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For example, under certain circumstances, an investment opportunity may be restricted due to","page_number":1,"box":{"x":116,"y":604,"width":733,"height":12}},{"id":"1a65a1d8-492e-463f-80d5-57857da53b67","block_type":"box","text":"limited supply in the market, legal constraints or other factors, in which event the investment opportunity will be","page_number":1,"box":{"x":116,"y":620,"width":764,"height":12}},{"id":"0ec7507b-5612-43d1-92c4-016f5082cc4d","block_type":"box","text":"allocated equitably among those portfolios and accounts, including the Fund, seeking such investment","page_number":1,"box":{"x":116,"y":635,"width":692,"height":12}},{"id":"e5670ad4-5199-480c-9cbc-97172714d6e8","block_type":"box","text":"opportunity. As a consequence, from time to time the Fund may receive a smaller allocation of an investment","page_number":1,"box":{"x":116,"y":651,"width":742,"height":12}},{"id":"f31a93e4-c84c-43b4-8e09-0088e78bf6ac","block_type":"box","text":"opportunity than it would have if the Portfolio Managers and BFA and its affiliates did not manage other","page_number":1,"box":{"x":116,"y":666,"width":706,"height":12}},{"id":"45900cd2-1276-4743-ae4f-6e13b9ecf066","block_type":"box","text":"portfolios or accounts.","page_number":1,"box":{"x":116,"y":682,"width":150,"height":12}},{"id":"af36192b-c696-4798-b6b7-04cb5b2a8324","block_type":"box","text":"Like the Fund, the other portfolios or accounts for which the Portfolio Managers are primarily responsible for the","page_number":1,"box":{"x":116,"y":713,"width":764,"height":12}},{"id":"62d45764-a46a-456b-b69f-aceb393f182d","block_type":"box","text":"day-to-day portfolio management generally pay an asset-based fee to BFA or its affiliates, as applicable, for its","page_number":1,"box":{"x":116,"y":728,"width":748,"height":12}},{"id":"07068668-f502-4c06-a966-ee62ae9c97e8","block_type":"box","text":"advisory services. One or more of those other portfolios or accounts, however, may pay BFA or its affiliates a","page_number":1,"box":{"x":116,"y":744,"width":741,"height":12}},{"id":"09c75958-7d1c-49fa-96a2-ff9548b415d2","block_type":"box","text":"performance-based fee in lieu of, or in addition to, an asset-based fee for its advisory services. A portfolio or","page_number":1,"box":{"x":116,"y":759,"width":733,"height":12}},{"id":"7d3863ea-1077-4be8-aab1-29b0d8cb21bb","block_type":"box","text":"account with a performance-based fee would pay BFA or its affiliates a portion of that portfolio’s or account’s","page_number":1,"box":{"x":116,"y":775,"width":744,"height":12}},{"id":"cceb1a96-6a5a-41b1-b21b-41a6b7d06845","block_type":"box","text":"gains, or would pay BFA or its affiliates more for its services than would otherwise be the case if BFA or any of","page_number":1,"box":{"x":116,"y":790,"width":758,"height":12}},{"id":"1a09df48-2901-4367-85f9-aad0d4a5fc98","block_type":"box","text":"its affiliates meets or exceeds specified performance targets. Performance-based fee arrangements could present","page_number":1,"box":{"x":116,"y":806,"width":755,"height":12}},{"id":"6cad9935-ab76-4bb8-a7e9-13b6e26a3d02","block_type":"box","text":"an incentive for BFA or its affiliates to devote greater resources, and allocate more investment opportunities, to","page_number":1,"box":{"x":116,"y":821,"width":751,"height":12}},{"id":"39200578-c460-477a-b041-6349e39a688f","block_type":"box","text":"the portfolios or accounts that have those fee arrangements, relative to other portfolios or accounts, in order to","page_number":1,"box":{"x":116,"y":837,"width":747,"height":12}},{"id":"dee0914d-6085-4906-b1c5-0f375eada104","block_type":"box","text":"earn larger fees. Although BFA and each of its affiliates have an obligation to allocate resources and","page_number":1,"box":{"x":116,"y":852,"width":682,"height":12}},{"id":"193478aa-539f-4758-80a2-432bd2fd0c83","block_type":"box","text":"NM1026U-6004408-1/267","page_number":1,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"c6a44c8f-6ad8-4e26-8f92-8233ec263bd0","block_type":"box","text":"opportunities equitably among portfolios and accounts and intend to do so, shareholders of the Fund should be","page_number":2,"box":{"x":116,"y":88,"width":749,"height":11}},{"id":"a4775fab-90cc-4e96-8cae-d73c19443a20","block_type":"box","text":"aware that, as with any group of portfolios and accounts managed by an investment adviser and/or its affiliates","page_number":2,"box":{"x":116,"y":103,"width":750,"height":12}},{"id":"4932fee1-b9d9-4a85-83c3-7d83ac51caa6","block_type":"box","text":"pursuant to varying fee arrangements, including performance-based fee arrangements, there is the potential for a","page_number":2,"box":{"x":116,"y":119,"width":762,"height":11}},{"id":"53e6240c-1676-4a0d-9435-394c650f1942","block_type":"box","text":"conflict of interest, which may result in the Portfolio Managers favoring those portfolios or accounts with","page_number":2,"box":{"x":116,"y":134,"width":716,"height":12}},{"id":"45a548a9-2f08-4bb4-b654-bb47d5009c8f","block_type":"box","text":"performance-based fee arrangements.","page_number":2,"box":{"x":116,"y":150,"width":257,"height":11}},{"id":"9973f335-b4b8-47e5-b43e-b99e9c976fc5","block_type":"box","text":"The tables below show, for each Portfolio Manager, the number of portfolios or accounts of the types set forth in","page_number":2,"box":{"x":116,"y":181,"width":765,"height":11}},{"id":"d3570cab-1422-46ca-8e02-f1eefdcd2478","block_type":"box","text":"the above tables and the aggregate of total assets in those portfolios or accounts with respect to which the","page_number":2,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"9298054d-c597-41fa-8d5e-8ffc3f47cabf","block_type":"box","text":"investment management fees are based on the performance of those portfolios or accounts as of August 31, 2026:","page_number":2,"box":{"x":116,"y":212,"width":769,"height":11}},{"id":"81d9c1e7-80b1-49f5-951c-7705014432f0","block_type":"box","text":"Zeshan Azam","page_number":2,"box":{"x":116,"y":243,"width":103,"height":9}},{"id":"1427aa54-26ee-4130-9c21-d6624083cc1a","block_type":"box","text":"Types of Accounts","page_number":2,"box":{"x":126,"y":315,"width":136,"height":11}},{"id":"21eb4ac4-8dd9-46e8-a161-d64377c4b834","block_type":"box","text":"Number of Other","page_number":2,"box":{"x":568,"y":263,"width":130,"height":9}},{"id":"85ef97ba-ba72-40c7-9ea6-dc66af41b8a8","block_type":"box","text":"Accounts","page_number":2,"box":{"x":598,"y":276,"width":70,"height":9}},{"id":"b4a0cc79-4521-4c6b-9ded-559291ac0b14","block_type":"box","text":"with Performance Fees","page_number":2,"box":{"x":548,"y":289,"width":170,"height":9}},{"id":"a5b1592d-da78-45c1-ac4d-ada5830cf408","block_type":"box","text":"Managed by Portfolio","page_number":2,"box":{"x":552,"y":302,"width":162,"height":12}},{"id":"e7123ea2-027a-415a-81fe-a438e3d968f5","block_type":"box","text":"Manager","page_number":2,"box":{"x":598,"y":315,"width":70,"height":11}},{"id":"d7438387-a586-438a-a1f4-ebb67cf32cf6","block_type":"box","text":"Aggregate","page_number":2,"box":{"x":767,"y":302,"width":78,"height":12}},{"id":"84161f58-e8aa-4a1f-986c-14133c2397cd","block_type":"box","text":"of Total Assets","page_number":2,"box":{"x":752,"y":315,"width":109,"height":9}},{"id":"e5ceefba-e0cc-4982-aece-f4203ea1c24c","block_type":"box","text":"Registered Investment Companies 0 $ 0","page_number":2,"box":{"x":126,"y":335,"width":729,"height":12}},{"id":"926ec567-348d-4a36-b2b9-f3f19be8835e","block_type":"box","text":"Other Pooled Investment Vehicles 0 0","page_number":2,"box":{"x":126,"y":356,"width":729,"height":9}},{"id":"bb33d934-2716-43b7-993d-3dd6785f26f2","block_type":"box","text":"Other Accounts 1 1.58 Billion","page_number":2,"box":{"x":126,"y":377,"width":729,"height":9}},{"id":"e9db8db3-8f90-4634-812f-15074e008150","block_type":"box","text":"Wendy Agnew, CFA","page_number":2,"box":{"x":116,"y":413,"width":152,"height":12}},{"id":"7c448c78-df8d-4ddb-a9bc-c7dd614b9a5b","block_type":"box","text":"Types of Accounts","page_number":2,"box":{"x":126,"y":485,"width":136,"height":12}},{"id":"3352b4a5-217a-4240-a7b6-752089c0d2e7","block_type":"box","text":"Number of Other","page_number":2,"box":{"x":568,"y":434,"width":130,"height":9}},{"id":"459e3f68-c4cf-44a7-811c-f0d5a9790689","block_type":"box","text":"Accounts","page_number":2,"box":{"x":598,"y":447,"width":70,"height":9}},{"id":"20fe9fb4-d131-4624-a718-6d6196560a95","block_type":"box","text":"with Performance Fees","page_number":2,"box":{"x":548,"y":460,"width":170,"height":9}},{"id":"a84792e3-647b-45f7-8f08-13f1ed74f711","block_type":"box","text":"Managed by Portfolio","page_number":2,"box":{"x":552,"y":472,"width":162,"height":12}},{"id":"371466e0-3ff9-4f40-b770-11e7704c07b7","block_type":"box","text":"Manager","page_number":2,"box":{"x":598,"y":486,"width":70,"height":11}},{"id":"9435378e-de36-408b-b87c-5c7bfa439e21","block_type":"box","text":"Aggregate","page_number":2,"box":{"x":767,"y":472,"width":78,"height":12}},{"id":"2b2dba13-bc83-44e8-aad1-7250a1e8b5e8","block_type":"box","text":"of Total Assets","page_number":2,"box":{"x":752,"y":485,"width":109,"height":10}},{"id":"7e6eebab-b2ba-4003-8e39-c7b147b5296d","block_type":"box","text":"Registered Investment Companies 0 $ 0","page_number":2,"box":{"x":126,"y":506,"width":729,"height":12}},{"id":"5a3579a2-495b-41db-a1bb-24601fe0a50a","block_type":"box","text":"Other Pooled Investment Vehicles 0 0","page_number":2,"box":{"x":126,"y":527,"width":729,"height":9}},{"id":"785900c2-2cf8-41c7-9456-6b8391da0244","block_type":"box","text":"Other Accounts 1 1.58 Billion","page_number":2,"box":{"x":126,"y":547,"width":729,"height":10}},{"id":"5d6f7890-7b21-4200-ab82-c2408fbdff11","block_type":"box","text":"Portfolio Manager Compensation Overview","page_number":2,"box":{"x":116,"y":584,"width":319,"height":11}},{"id":"ff991917-63ac-4eeb-8467-4a55d1ef10be","block_type":"box","text":"The discussion below describes the Portfolio Managers’ compensation as of August 31, 2026.","page_number":2,"box":{"x":116,"y":615,"width":637,"height":11}},{"id":"bb191a62-c538-4a68-a7b3-32549ff2245c","block_type":"box","text":"BlackRock, Inc.’s financial arrangements with its portfolio managers, its competitive compensation and its career","page_number":2,"box":{"x":116,"y":646,"width":770,"height":11}},{"id":"1edba6b9-fa97-426c-8e96-81f50031fa11","block_type":"box","text":"path emphasis at all levels reflect the value senior management places on key resources. Compensation may","page_number":2,"box":{"x":116,"y":661,"width":728,"height":12}},{"id":"c854ac85-8ba5-4523-8fdd-3d0ff5f91071","block_type":"box","text":"include a variety of components and may vary from year to year based on a number of factors. The principal","page_number":2,"box":{"x":116,"y":677,"width":731,"height":11}},{"id":"08d4cfe7-5d17-4df2-8e2b-1e0d1923ca08","block_type":"box","text":"components of compensation include a base salary, a performance-based discretionary bonus, participation in","page_number":2,"box":{"x":116,"y":692,"width":739,"height":12}},{"id":"a66c2863-527a-41ff-8bee-4f7417fe83aa","block_type":"box","text":"various benefits programs and one or more of the incentive compensation programs established by BlackRock,","page_number":2,"box":{"x":116,"y":708,"width":747,"height":11}},{"id":"89c4285a-e9e2-4827-901f-4d52418545fa","block_type":"box","text":"Inc.","page_number":2,"box":{"x":116,"y":724,"width":24,"height":8}},{"id":"13e9eceb-5c02-49f7-9c41-9a1688b8b672","block_type":"box","text":"Base Compensation.","page_number":2,"box":{"x":116,"y":754,"width":145,"height":12}},{"id":"c10551e6-85c2-427f-8cb2-308cc3ce42f2","block_type":"box","text":"Generally, portfolio managers receive base compensation based on their position with the","page_number":2,"box":{"x":266,"y":754,"width":604,"height":12}},{"id":"ca3cbbdd-7e4c-4c13-8497-0d66fa7b5957","block_type":"box","text":"firm.","page_number":2,"box":{"x":116,"y":770,"width":32,"height":9}},{"id":"1a05715c-d42d-4521-b6e1-3815c8e071f8","block_type":"box","text":"Discretionary Incentive Compensation.","page_number":2,"box":{"x":116,"y":801,"width":280,"height":11}},{"id":"8a83a545-5ac8-461c-b9fd-bd08e61280e2","block_type":"box","text":"Generally, discretionary incentive compensation for Fundamental","page_number":2,"box":{"x":402,"y":801,"width":442,"height":11}},{"id":"9d3a9534-bf1a-473c-8c3c-d2085155d701","block_type":"box","text":"Equities portfolio managers is based on a formulaic compensation program. BlackRock’s formulaic portfolio","page_number":2,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"74c5cc18-f66a-4cd8-ae7b-bea182f86d9e","block_type":"box","text":"manager compensation program is based on team revenue and pre-tax investment performance relative to","page_number":2,"box":{"x":116,"y":832,"width":715,"height":11}},{"id":"017e9fde-33ea-4467-b603-af1391dd9cef","block_type":"box","text":"appropriate competitors or benchmarks over 3- and 5-year performance periods, as applicable. In most cases,","page_number":2,"box":{"x":116,"y":847,"width":740,"height":12}},{"id":"94006541-380c-4a58-962c-6745fe719bb7","block_type":"box","text":"these benchmarks are the same as the benchmark or benchmarks against which the performance of the Fund or","page_number":2,"box":{"x":116,"y":863,"width":751,"height":11}},{"id":"b838be4b-5dee-4b5d-b3b6-421a730fc30e","block_type":"box","text":"other accounts managed by the portfolio managers are measured. BlackRock’s global compensation team","page_number":2,"box":{"x":116,"y":878,"width":715,"height":12}},{"id":"82f92cb5-1c2f-4cde-a130-9b7bd8f2c6dc","block_type":"box","text":"2","page_number":2,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"5d44ec7f-d0af-442b-9a58-66160ecc7474","block_type":"box","text":"NM1026U-6004408-2/267","page_number":2,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"792ac631-889e-4835-8fea-537ab1b72e80","block_type":"box","text":"determines the benchmarks or rankings against which the performance of the Fund and other accounts managed","page_number":3,"box":{"x":116,"y":88,"width":758,"height":11}},{"id":"e30a135e-8675-406b-88c4-4893ec92205d","block_type":"box","text":"by each portfolio management team is compared and the period of time over which performance is evaluated.","page_number":3,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"47313006-ecfe-4085-a27e-6e525e748432","block_type":"box","text":"With respect to these portfolio managers, such benchmarks for the Fund and other accounts are: MSCI All","page_number":3,"box":{"x":116,"y":119,"width":722,"height":11}},{"id":"1d7efd61-0513-42f8-87a0-5ed567691cc6","block_type":"box","text":"Country World ex US Index (Net TR); MSCI All Country World Index (Net Total Return); MSCI ACWI HIGH","page_number":3,"box":{"x":116,"y":134,"width":761,"height":12}},{"id":"88043d42-a0d0-4bfc-a25f-75b0014a1d48","block_type":"box","text":"DIVIDEND YIELD – NET USD; MSCI All Country World Net TR Index — in GBP.","page_number":3,"box":{"x":116,"y":150,"width":587,"height":11}},{"id":"a95b9b84-3f39-403d-be78-68d974f1cc70","block_type":"box","text":"A smaller element of portfolio manager discretionary compensation may include consideration of: financial","page_number":3,"box":{"x":116,"y":181,"width":730,"height":11}},{"id":"76b0b02d-b9f1-4fb0-b759-ba21c168eae3","block_type":"box","text":"results, expense control, profit margins, strategic planning and implementation, quality of client service, market","page_number":3,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"f39ff04e-ee89-49fc-a76a-f5744a7fef8f","block_type":"box","text":"share, corporate reputation, capital allocation, compliance and risk control, leadership, technology and","page_number":3,"box":{"x":117,"y":212,"width":693,"height":11}},{"id":"bc801ec6-b5cb-43cf-9e1a-5814c3de4340","block_type":"box","text":"innovation. These factors are considered collectively by BlackRock management and the relevant Chief","page_number":3,"box":{"x":116,"y":227,"width":704,"height":12}},{"id":"77deb7af-2713-4ef6-8a39-e6f5a21f73f6","block_type":"box","text":"Investment Officers.","page_number":3,"box":{"x":116,"y":243,"width":142,"height":9}},{"id":"70196a35-5579-4178-9d53-c7c82d1b276a","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":3,"box":{"x":116,"y":274,"width":391,"height":11}},{"id":"78e7321d-e94b-423a-95c4-c8cf287b7d70","block_type":"box","text":"Discretionary incentive compensation is distributed to","page_number":3,"box":{"x":507,"y":274,"width":374,"height":11}},{"id":"cef3e4cc-9d03-49dd-9fff-05ce7c004747","block_type":"box","text":"portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/or deferred cash awards","page_number":3,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"8b9ba79d-4be8-4384-a530-e861754ae887","block_type":"box","text":"that notionally track the return of certain BlackRock investment products.","page_number":3,"box":{"x":116,"y":305,"width":501,"height":11}},{"id":"3a6b539d-4f2d-4278-b141-97063c81513f","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash. Portfolio","page_number":3,"box":{"x":116,"y":336,"width":726,"height":11}},{"id":"525939a4-23e4-470b-ab4d-e95b468639ed","block_type":"box","text":"managers whose total compensation is above a specified threshold also receive deferred BlackRock, Inc. stock","page_number":3,"box":{"x":116,"y":351,"width":749,"height":12}},{"id":"3044887e-1c0b-4f6a-bfb7-c70676186aba","block_type":"box","text":"awards annually as part of their discretionary incentive compensation. Paying a portion of discretionary incentive","page_number":3,"box":{"x":116,"y":367,"width":769,"height":11}},{"id":"583656f9-c260-4702-854d-aebea60608ac","block_type":"box","text":"compensation in the form of deferred BlackRock, Inc. stock puts compensation earned by a portfolio manager for","page_number":3,"box":{"x":116,"y":382,"width":770,"height":12}},{"id":"3fb0d2f1-3a04-4d84-bf66-6e464b9ee166","block_type":"box","text":"a given year “at risk” based on BlackRock’s ability to sustain and improve its performance over future periods.","page_number":3,"box":{"x":116,"y":398,"width":753,"height":11}},{"id":"feefceee-25f6-47c6-babc-087b9fc18413","block_type":"box","text":"In some cases, additional deferred BlackRock, Inc. stock may be granted to certain key employees as part of a","page_number":3,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"523e4e7a-8760-4cd9-9d85-1c611bc57df2","block_type":"box","text":"long-term incentive award to aid in retention, align interests with long-term shareholders and motivate","page_number":3,"box":{"x":116,"y":429,"width":694,"height":11}},{"id":"926856c3-856a-4623-b6a9-bb8310d13099","block_type":"box","text":"performance. Deferred BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc.","page_number":3,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"4691b55e-dde7-48cf-a3b2-98d22f035378","block_type":"box","text":"restricted stock units that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock,","page_number":3,"box":{"x":116,"y":460,"width":761,"height":11}},{"id":"30759746-2211-471e-83aa-c118cc864776","block_type":"box","text":"Inc. common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.","page_number":3,"box":{"x":116,"y":475,"width":691,"height":12}},{"id":"c6205e32-9d5e-4c70-9c8d-7d6f0171d14d","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed in the","page_number":3,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"531c912e-e607-4d3c-a68b-793ea491be9c","block_type":"box","text":"form of deferred cash awards that notionally track the returns of select BlackRock investment products they","page_number":3,"box":{"x":116,"y":522,"width":731,"height":11}},{"id":"04ca5505-df37-4a9e-8210-c797ecd9efdb","block_type":"box","text":"manage, which provides direct alignment of portfolio manager discretionary incentive compensation with","page_number":3,"box":{"x":116,"y":537,"width":717,"height":12}},{"id":"38d95d98-76eb-4a65-b307-41f1a95416f7","block_type":"box","text":"investment product results. Deferred cash awards vest ratably over a number of years and, once vested, settle in","page_number":3,"box":{"x":116,"y":553,"width":756,"height":11}},{"id":"007ee573-0fe7-4fbe-9c9b-513128a5f086","block_type":"box","text":"the form of cash. Only portfolio managers who manage specified products and whose total compensation is","page_number":3,"box":{"x":116,"y":568,"width":729,"height":12}},{"id":"ba2196d1-41da-44b0-97cd-87cd1614136c","block_type":"box","text":"above a specified threshold are eligible to participate in the deferred cash award program.","page_number":3,"box":{"x":116,"y":584,"width":608,"height":11}},{"id":"35497eec-98f4-4624-872c-48987302dc81","block_type":"box","text":"Other Compensation Benefits.","page_number":3,"box":{"x":116,"y":615,"width":217,"height":11}},{"id":"39c267e1-e35d-455e-b63d-45e8c63c42f2","block_type":"box","text":"In addition to base salary and discretionary incentive compensation, portfolio","page_number":3,"box":{"x":333,"y":615,"width":531,"height":11}},{"id":"ca41193c-7990-4bed-8324-2c7ddd7332be","block_type":"box","text":"managers may be eligible to receive or participate in one or more of the following:","page_number":3,"box":{"x":116,"y":630,"width":561,"height":12}},{"id":"62cd017a-78d9-4c97-ba1a-2f64c9c51174","block_type":"box","text":"Incentive Savings Plans","page_number":3,"box":{"x":116,"y":661,"width":160,"height":12}},{"id":"679641a4-8b4f-4ff6-8537-632ab81501bd","block_type":"box","text":"— BlackRock, Inc. has created a variety of incentive savings plans in which BlackRock,","page_number":3,"box":{"x":281,"y":661,"width":596,"height":12}},{"id":"85fdefb4-5d0f-4690-afec-c9f12913931d","block_type":"box","text":"Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock Retirement Savings Plan","page_number":3,"box":{"x":116,"y":677,"width":719,"height":11}},{"id":"88cc99e9-bfa7-4065-b549-03a9e7ea674a","block_type":"box","text":"(RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The employer contribution components of the","page_number":3,"box":{"x":116,"y":692,"width":763,"height":12}},{"id":"2fe2ed3e-e0e5-47c7-913f-7061e74a159c","block_type":"box","text":"RSP include a company match equal to 50% of the first 8% of eligible pay contributed to the plan capped at","page_number":3,"box":{"x":116,"y":708,"width":727,"height":11}},{"id":"69144e5b-5831-443f-bc86-c5f369c0de74","block_type":"box","text":"$5,000 per year, and a company retirement contribution equal to 3-5% of eligible compensation up to the Internal","page_number":3,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"d64b502b-cd00-4686-91de-2decae88ad37","block_type":"box","text":"Revenue Service limit ($360,000 for 2026). The RSP offers a range of investment options, including registered","page_number":3,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"6e84a3b6-fff1-4a13-9d40-ad5d05506a5d","block_type":"box","text":"investment companies and collective investment funds managed by the firm. BlackRock, Inc. contributions","page_number":3,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"b14e3581-d066-4a72-be3c-4b92bb335cb5","block_type":"box","text":"follow the investment direction set by participants for their own contributions or, absent participant investment","page_number":3,"box":{"x":116,"y":770,"width":748,"height":11}},{"id":"5f779b80-339f-4cf4-8ec7-28ba300b1ff9","block_type":"box","text":"direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the participant","page_number":3,"box":{"x":116,"y":785,"width":766,"height":12}},{"id":"6b12ee19-2c30-4aa5-93d2-f47305b017ef","block_type":"box","text":"attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5% discount on the fair","page_number":3,"box":{"x":116,"y":801,"width":743,"height":11}},{"id":"1a69aead-d43d-40d3-803e-91b50103c92a","block_type":"box","text":"market value of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of","page_number":3,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"a75eec7b-2a98-48b3-8e68-a3fecfcab74e","block_type":"box","text":"1,000 shares of common stock or a dollar value of $25,000 based on its fair market value on the purchase date.","page_number":3,"box":{"x":118,"y":831,"width":749,"height":12}},{"id":"11c0de2b-57ef-486c-8466-9be99bd3b6a2","block_type":"box","text":"All of the eligible portfolio managers are eligible to participate in these plans.","page_number":3,"box":{"x":116,"y":847,"width":528,"height":12}},{"id":"9d877ce2-e71a-4fa0-bf7f-33bd934936e5","block_type":"box","text":"3","page_number":3,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"3755354a-a3b5-47d8-b25d-5fe744cf1002","block_type":"box","text":"NM1026U-6004408-3/267","page_number":3,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"346f5496-10f8-47f8-890a-4101fe49b8ba","block_type":"box","text":"The following table sets forth the dollar range of equity securities in the Fund beneficially owned by each","page_number":4,"box":{"x":116,"y":88,"width":716,"height":11}},{"id":"5b524bdc-db35-402d-94e8-ff622c90097e","block_type":"box","text":"portfolio manager as of August 31, 2026.","page_number":4,"box":{"x":116,"y":103,"width":282,"height":12}},{"id":"5612c630-ac44-4c73-a4f7-21afb1d3c7c5","block_type":"box","text":"Portfolio Manager","page_number":4,"box":{"x":123,"y":144,"width":137,"height":12}},{"id":"042618e8-4b13-441c-955f-eb3446bd1652","block_type":"box","text":"Dollar Range of Equity Securities","page_number":4,"box":{"x":642,"y":131,"width":245,"height":12}},{"id":"820d18ec-bf1c-46e8-9c8e-b05922cb09c4","block_type":"box","text":"Beneficially Owned","page_number":4,"box":{"x":693,"y":144,"width":144,"height":12}},{"id":"b2268e83-e913-4ab9-93f4-c30d473fda9b","block_type":"box","text":"Zeshan Azam None","page_number":4,"box":{"x":123,"y":165,"width":662,"height":9}},{"id":"22b2b9ce-eeda-4d9d-893e-524cdc0cb55e","block_type":"box","text":"Wendy Agnew, CFA None","page_number":4,"box":{"x":122,"y":186,"width":663,"height":11}},{"id":"66001658-3fb2-4a5e-b058-3c636c4a4d0c","block_type":"box","text":"Shareholders should retain this Supplement for future reference.","page_number":4,"box":{"x":267,"y":222,"width":470,"height":11}},{"id":"6fc4b4b7-e980-4560-b36e-077e224b1421","block_type":"box","text":"SAI-BIDD-1026SUP","page_number":4,"box":{"x":116,"y":253,"width":148,"height":9}},{"id":"e46a5ec6-ca10-46bc-bc37-0dba9775a1e4","block_type":"box","text":"4","page_number":4,"box":{"x":495,"y":909,"width":8,"height":9}},{"id":"92a1c772-fc97-4625-907f-68b41e71637a","block_type":"box","text":"NM1026U-6004408-4/267","page_number":4,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"6c1a6d75-2873-4cbe-8e72-4246235c80b9","block_type":"box","text":"BlackRock ETF Trust","page_number":5,"box":{"x":420,"y":88,"width":164,"height":9}},{"id":"ea5441ea-d238-4125-b408-496f9e5a64c9","block_type":"box","text":"BlackRock ETF Trust II","page_number":5,"box":{"x":411,"y":103,"width":181,"height":9}},{"id":"8cba429c-dd1e-4396-bfe1-6cfaf01745c6","block_type":"box","text":"Supplement dated September 11, 2026","page_number":5,"box":{"x":362,"y":134,"width":280,"height":12}},{"id":"64f74340-57b7-40df-9aa5-86c112fd4907","block_type":"box","text":"to the currently effective Statement of Additional Information (the “SAI”)","page_number":5,"box":{"x":234,"y":149,"width":536,"height":12}},{"id":"4361a671-37b4-4942-b9ad-113aab99187c","block_type":"box","text":"for each of the funds listed in Appendix A (each, a “Fund”), as amended from time to time","page_number":5,"box":{"x":176,"y":165,"width":651,"height":12}},{"id":"ab8e447f-9d7d-4d80-807e-024dd399044a","block_type":"box","text":"Effective immediately, the following changes are made to each Fund’s SAI:","page_number":5,"box":{"x":116,"y":196,"width":543,"height":12}},{"id":"c66eea4a-62a1-42b8-bdba-c87a60dcbd2e","block_type":"box","text":"The fifth paragraph of the section of the SAI entitled “Investment Advisory, Administrative and","page_number":5,"box":{"x":116,"y":227,"width":694,"height":12}},{"id":"19cbca92-104e-49a6-9eba-ff31dd9cd553","block_type":"box","text":"Distribution Services — Payments by BFA and its Affiliates” is deleted in its entirety and replaced with","page_number":5,"box":{"x":116,"y":242,"width":745,"height":12}},{"id":"46f5395f-6ce6-44a0-9a6f-63bfef18dc7e","block_type":"box","text":"the following:","page_number":5,"box":{"x":116,"y":258,"width":103,"height":12}},{"id":"bdd4082d-42cf-4ff8-a592-d5857935ac02","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and certain other","page_number":5,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"00089685-0048-4642-a21b-a5668d621c64","block_type":"box","text":"third parties that the BFA Entities believe may benefit the business of the BFA Entities or facilitate investment in","page_number":5,"box":{"x":116,"y":305,"width":769,"height":11}},{"id":"4e4490aa-4ce2-404b-89c3-3e85fcc71ee7","block_type":"box","text":"the Fund or certain Products. Such agreements can include payments by BFA Entities to such Intermediaries and","page_number":5,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"acef2ce9-b9b4-42b4-a720-b826a7192b31","block_type":"box","text":"third parties for data collection and provision, technology support, platform enhancement, or educational content,","page_number":5,"box":{"x":116,"y":336,"width":769,"height":11}},{"id":"c1eebc20-e3f1-4069-8b41-25004dc1749e","block_type":"box","text":"co-marketing and cross-promotional efforts. In certain cases, such payments to Intermediaries are subject to","page_number":5,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"8a3b0258-d3bd-47fb-90e0-2b52a5ed8b1b","block_type":"box","text":"certain minimum payment levels or tiered payments. With respect to certain funds and Products, payments by the","page_number":5,"box":{"x":116,"y":367,"width":769,"height":11}},{"id":"40a5e924-1ff7-4f3a-bcd2-31d5a9ae04ee","block_type":"box","text":"BFA Entities may take the form of, among other things, “due diligence” payments for an Intermediary’s review","page_number":5,"box":{"x":116,"y":382,"width":757,"height":12}},{"id":"73c3b223-e034-4b55-97c7-558ac269f61a","block_type":"box","text":"of such funds and Products; payment for providing employee training and information relating to such funds and","page_number":5,"box":{"x":116,"y":398,"width":765,"height":11}},{"id":"c4acd164-73f5-410d-adda-8ccfb9695e9f","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered representatives,","page_number":5,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"f7843561-10ad-47e8-a0a9-f27ab77c51ae","block_type":"box","text":"salespersons or other personnel, fees for maintaining an Intermediary’s investor platform, “shelf space” payments","page_number":5,"box":{"x":117,"y":429,"width":770,"height":11}},{"id":"f9510c17-41c4-4870-aeb4-0202e9983c45","block_type":"box","text":"for making such funds and Products available on the Intermediary’s platform or fees for providing assistance in","page_number":5,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"5c99f92e-e4f8-4cd0-a972-90fe98b35034","block_type":"box","text":"promoting the sale of such funds and Products. 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As of the date of this SAI, the Intermediaries and other third parties (or their respective affiliates)","page_number":5,"box":{"x":116,"y":522,"width":729,"height":11}},{"id":"3fe2ebac-d1c5-46bf-b4b2-7ccf17874ccd","block_type":"box","text":"receiving one or more types of the contractual payments described above include (in addition to FBS and NFS):","page_number":5,"box":{"x":116,"y":537,"width":758,"height":12}},{"id":"a0658c67-d3ba-4b09-8ff8-fd1c8a1a2095","block_type":"box","text":"&Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American Enterprise Investment Services,","page_number":5,"box":{"x":116,"y":553,"width":761,"height":11}},{"id":"187492d9-c556-4745-887c-70bc56ee7a97","block_type":"box","text":"Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets, LLC, BNY Mellon Performance & Risk","page_number":5,"box":{"x":116,"y":568,"width":759,"height":12}},{"id":"89cd0e17-e456-4c04-9ab4-c54ebfd10fb2","block_type":"box","text":"Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab & Co., Inc., Clearstream Fund Centre AG,","page_number":5,"box":{"x":116,"y":584,"width":717,"height":11}},{"id":"1216ca6e-860e-4278-9d1b-4f1eb0447eca","block_type":"box","text":"Commonwealth Equity Services, LLC, Dorsey Wright and Associates, LLC, Dynasty Financial Partners LLC,","page_number":5,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"948f5e8b-6fe5-4bf2-a8e5-582bab48da9b","block_type":"box","text":"E*Trade Securities LLC, Envestnet Asset Management, Inc., Equitable Advisors, LLC, iCapital Markets LLC,","page_number":5,"box":{"x":116,"y":615,"width":751,"height":11}},{"id":"351f7d33-dabf-466f-8f1b-46ee0b88a596","block_type":"box","text":"Interactive Brokers LLC, LPL Financial LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, MML","page_number":5,"box":{"x":116,"y":630,"width":721,"height":12}},{"id":"205eb889-9292-45b9-8333-bed6f17dfee0","block_type":"box","text":"Investors Services, LLC, Morgan Stanley Smith Barney LLC, Northwestern Mutual Investment Services, LLC,","page_number":5,"box":{"x":116,"y":646,"width":755,"height":11}},{"id":"d76a6433-e8cb-4728-9046-50a22129fd15","block_type":"box","text":"Orion Portfolio Solutions, LLC, Pershing LLC, Raymond James Financial Services, Inc., Riskalyze, Inc.,","page_number":5,"box":{"x":116,"y":661,"width":709,"height":12}},{"id":"068c5398-5eb3-47b8-9ff2-0046f2796b09","block_type":"box","text":"Rockefeller Financial LLC, Sanctuary Wealth Group, LLC, UBS Financial Services Inc., Wells Fargo Clearing","page_number":5,"box":{"x":116,"y":677,"width":750,"height":11}},{"id":"69a59b59-f75c-45c6-9dfd-5411753105b9","block_type":"box","text":"Services, LLC and Wells Fargo Advisors Financial Network, LLC. 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Capitalized terms used herein that are not defined have the same meaning as in the","page_number":7,"box":{"x":117,"y":379,"width":710,"height":12}},{"id":"a13e817a-3aac-4a75-9f4d-235239b8f910","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":7,"box":{"x":117,"y":394,"width":755,"height":12}},{"id":"5fffe863-496e-48bd-9248-ee5d2bc579e8","block_type":"box","text":"to the Fund have been incorporated by reference into the Fund’s Prospectus. 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II-1","page_number":9,"box":{"x":399,"y":506,"width":476,"height":9}},{"id":"19cf987e-df65-45ad-ba3c-99f07b046c7e","block_type":"box","text":"Appendix A – Description of Bond Ratings","page_number":9,"box":{"x":116,"y":521,"width":318,"height":12}},{"id":"d66e1988-755e-4dbd-bda4-7e94e752f10a","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1","page_number":9,"box":{"x":435,"y":521,"width":440,"height":10}},{"id":"94d01819-13d4-488c-baff-a9c8f174f647","block_type":"box","text":"Appendix B – Proxy Voting Policies","page_number":9,"box":{"x":116,"y":537,"width":267,"height":12}},{"id":"c1f8f2c3-5d55-4c34-8b41-e981e30064fa","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1","page_number":9,"box":{"x":390,"y":537,"width":485,"height":9}},{"id":"38ac0d8b-96fb-44bc-9d2b-1a6ddec3b998","block_type":"box","text":"ii","page_number":9,"box":{"x":497,"y":909,"width":5,"height":9}},{"id":"a91198fe-b801-4d29-be73-28a162736eaa","block_type":"box","text":"NM1026U-6004408-9/267","page_number":9,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"dafde823-070f-4437-b1a1-3f7e30701e3e","block_type":"box","text":"PART I: INFORMATION ABOUT","page_number":10,"box":{"x":210,"y":92,"width":594,"height":23}},{"id":"c5eaaf25-4765-4aeb-bb3b-d3b2b361aef8","block_type":"box","text":"iSHARES INTERNATIONAL DIVIDEND","page_number":10,"box":{"x":145,"y":126,"width":723,"height":22}},{"id":"57ae786d-7a33-4795-806b-d024876625f9","block_type":"box","text":"ACTIVE ETF","page_number":10,"box":{"x":383,"y":159,"width":244,"height":23}},{"id":"e7bc2030-a173-490a-ae37-5eb8dc065db8","block_type":"box","text":"Part I of this Statement of Additional Information (“SAI”) sets forth information about iShares","page_number":10,"box":{"x":117,"y":211,"width":686,"height":12}},{"id":"67f3eecb-ee72-40e2-9ad2-08d5b34eaa65","block_type":"box","text":"International Dividend Active ETF (the “Fund”), a series of BlackRock ETF Trust (the “Trust”). It","page_number":10,"box":{"x":117,"y":227,"width":710,"height":12}},{"id":"5bc4d96f-499c-4123-a747-79926f88192f","block_type":"box","text":"includes information about the Trust’s Board of Trustees (the “Board”), the advisory and management","page_number":10,"box":{"x":117,"y":242,"width":758,"height":12}},{"id":"ea6e91f5-3581-4ce8-a934-8267b66d5682","block_type":"box","text":"services provided to and the management fees paid by the Fund and information about other fees","page_number":10,"box":{"x":116,"y":258,"width":732,"height":12}},{"id":"fee74d24-b816-4021-81c9-b826944dca0f","block_type":"box","text":"applicable to and services provided to the Fund. This Part I of this SAI should be read in conjunction","page_number":10,"box":{"x":116,"y":273,"width":748,"height":12}},{"id":"ee0537f1-538e-49dd-a60a-bb8e9c17e9f6","block_type":"box","text":"with the Fund’s Prospectus and those portions of Part II of this SAI that pertain to the Fund.","page_number":10,"box":{"x":116,"y":289,"width":683,"height":12}},{"id":"3dc773a7-e10c-419b-bc2b-26820cb04116","block_type":"box","text":"General Description of the Fund","page_number":10,"box":{"x":118,"y":340,"width":582,"height":29}},{"id":"3a8af812-fe9e-49df-acb6-cac06c570417","block_type":"box","text":"The Fund is the successor to BlackRock International Dividend Fund (the “Predecessor Fund”), a","page_number":10,"box":{"x":116,"y":392,"width":727,"height":12}},{"id":"fbefacb5-c33b-4ef6-ae77-67c1967fd19a","block_type":"box","text":"series of BlackRock Funds","page_number":10,"box":{"x":116,"y":407,"width":198,"height":10}},{"id":"6bb319d1-99c9-4aac-9538-97d1e3742ca2","block_type":"box","text":"SM","page_number":10,"box":{"x":315,"y":407,"width":15,"height":7}},{"id":"4bdaa45b-1992-45d0-94ac-c2942244685c","block_type":"box","text":"(the “Predecessor Trust”), as a result of a reorganization (the","page_number":10,"box":{"x":331,"y":407,"width":463,"height":13}},{"id":"08c0d8c4-1633-40ad-8f61-021307fe035c","block_type":"box","text":"“Reorganization”) that occurred as of the close of trading on the New York Stock Exchange (“NYSE”)","page_number":10,"box":{"x":116,"y":423,"width":754,"height":12}},{"id":"4402345c-a14d-457c-a577-372b7f8b74f4","block_type":"box","text":"on November 15, 2024 in which the Fund acquired all of the assets and assumed certain stated","page_number":10,"box":{"x":116,"y":438,"width":715,"height":12}},{"id":"ca88d1fd-d220-4736-bbd3-37b953970d73","block_type":"box","text":"liabilities of the Predecessor Fund. Institutional Shares of the Predecessor Fund, for purposes of the","page_number":10,"box":{"x":117,"y":454,"width":747,"height":12}},{"id":"aa0021e0-ccc4-4133-bf5e-8b48e9597be8","block_type":"box","text":"Reorganization, is considered the accounting survivor of the Reorganization, which means the Fund","page_number":10,"box":{"x":117,"y":469,"width":746,"height":13}},{"id":"48f5fbf9-44a6-4806-ac71-eeaf54a00849","block_type":"box","text":"adopted the performance and financial history of the Predecessor Fund as of the date of the","page_number":10,"box":{"x":116,"y":485,"width":689,"height":12}},{"id":"0fce089b-5d81-4bac-853e-e14eee740f79","block_type":"box","text":"Reorganization. As a result, financial history and other information presented in this SAI for periods","page_number":10,"box":{"x":117,"y":500,"width":739,"height":13}},{"id":"d507f6d4-ee7c-4d37-b486-b09c58a840ba","block_type":"box","text":"prior to the Reorganization is the information of the Predecessor Fund and the Predecessor Trust, as","page_number":10,"box":{"x":117,"y":516,"width":754,"height":12}},{"id":"bb207a60-41c1-49ce-b2f7-c7dcc26cb59e","block_type":"box","text":"applicable. On February 19, 2025, the Fund changed its name from “BlackRock International Dividend","page_number":10,"box":{"x":116,"y":531,"width":763,"height":13}},{"id":"378188b6-5519-456a-a8fe-bc371f325466","block_type":"box","text":"ETF” to “iShares International Dividend Active ETF”.","page_number":10,"box":{"x":117,"y":547,"width":391,"height":9}},{"id":"2b025471-1b91-49a8-96a7-973748f09125","block_type":"box","text":"The Fund is managed by BlackRock Fund Advisors (“BFA” or the “Investment Adviser”), an indirect","page_number":10,"box":{"x":116,"y":578,"width":741,"height":12}},{"id":"d48c3572-3a21-4945-a061-cfee4cf2df2f","block_type":"box","text":"majority-owned subsidiary of BlackRock, Inc. BlackRock International Limited (“BIL” or the","page_number":10,"box":{"x":117,"y":593,"width":672,"height":13}},{"id":"e4fd1372-44c6-435a-a067-be0fc8f410f8","block_type":"box","text":"“Sub-Adviser”), an affiliate of BFA, serves as the sub-adviser to the Fund.","page_number":10,"box":{"x":116,"y":609,"width":551,"height":12}},{"id":"49d5b338-1e93-4b32-b160-42f5bcb62375","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":10,"box":{"x":116,"y":640,"width":763,"height":12}},{"id":"781669c1-d598-4793-bed9-143d152f2c63","block_type":"box","text":"specified number of shares (each, a “Creation Unit”), generally in exchange for a designated portfolio","page_number":10,"box":{"x":116,"y":655,"width":755,"height":13}},{"id":"45ba599b-dcd0-4f19-82b6-4dafcacd61f8","block_type":"box","text":"of securities (including any portion of such securities for which cash may be substituted) (the “Deposit","page_number":10,"box":{"x":116,"y":671,"width":754,"height":12}},{"id":"a66408cb-c8f5-4b3a-bb18-f020a6294940","block_type":"box","text":"Securities” or “Creation Basket”), together with the deposit of a specified cash payment (the “Cash","page_number":10,"box":{"x":116,"y":686,"width":729,"height":13}},{"id":"d134fadc-eda0-463a-b574-7b5f3e3eda6a","block_type":"box","text":"Component”). Shares of the Fund are listed for trading on NYSE Arca, Inc. (the “Listing Exchange” or","page_number":10,"box":{"x":117,"y":702,"width":750,"height":12}},{"id":"9408fdb6-6161-4b06-a05e-97cc964731a2","block_type":"box","text":"“NYSE Arca”), a national securities exchange. Shares of the Fund are traded in the secondary market","page_number":10,"box":{"x":116,"y":717,"width":756,"height":13}},{"id":"9e918f1e-ce8d-4519-83f9-31f65a93e887","block_type":"box","text":"and elsewhere at market prices that may be at, above or below the Fund’s NAV. Shares are","page_number":10,"box":{"x":116,"y":733,"width":682,"height":12}},{"id":"6d4f60ac-f989-4c10-9a2b-38d71f3aa133","block_type":"box","text":"redeemable by the Fund only in Creation Units by Authorized Participants (as defined in the","page_number":10,"box":{"x":117,"y":748,"width":679,"height":13}},{"id":"f0860f55-21ba-4792-bfb4-295e9a8d03cf","block_type":"box","text":"Portfolio","page_number":10,"box":{"x":802,"y":748,"width":61,"height":10}},{"id":"7afe33e4-c49e-4a49-9685-3e5f1d3d1f54","block_type":"box","text":"Holdings Information","page_number":10,"box":{"x":116,"y":764,"width":153,"height":12}},{"id":"9d001bd6-7e59-4904-94a0-c43e1a734bd4","block_type":"box","text":"section of this SAI), and, generally, in exchange for portfolio securities and a","page_number":10,"box":{"x":275,"y":764,"width":566,"height":12}},{"id":"2e7f5d52-3444-403a-99eb-aebfa52822a2","block_type":"box","text":"Cash Amount (as defined in the","page_number":10,"box":{"x":117,"y":780,"width":234,"height":12}},{"id":"070c6a20-42c7-4c8c-9b55-2441ba7164bd","block_type":"box","text":"Redemption of Creation Units","page_number":10,"box":{"x":357,"y":780,"width":220,"height":11}},{"id":"69b1b2f9-a02e-4605-a356-9ad7fab340a1","block_type":"box","text":"section of this SAI). Creation Units","page_number":10,"box":{"x":582,"y":780,"width":255,"height":12}},{"id":"58769251-9093-4c61-9e49-0288a6e981f6","block_type":"box","text":"typically are a specified number of shares, generally 40,000 shares or multiples thereof.","page_number":10,"box":{"x":116,"y":795,"width":649,"height":12}},{"id":"fd326592-6220-4076-9da4-0adc000329f0","block_type":"box","text":"The Trust reserves the right to permit or require that creations and redemptions of shares are effected","page_number":10,"box":{"x":116,"y":826,"width":762,"height":12}},{"id":"de56987d-b790-4f3e-9d3c-a2056033b880","block_type":"box","text":"fully or partially in cash and reserves the right to permit or require the substitution of Deposit Securities","page_number":10,"box":{"x":116,"y":842,"width":766,"height":12}},{"id":"72b75e86-0060-4e97-85df-edbc5b635959","block_type":"box","text":"in lieu of cash. Shares may be issued in advance of receipt of Deposit Securities, subject to various","page_number":10,"box":{"x":117,"y":857,"width":742,"height":12}},{"id":"22574def-3f96-4cdc-89d1-56ffe5d22d5d","block_type":"box","text":"conditions, including a requirement that the Authorized Participant maintain with the Trust collateral as","page_number":10,"box":{"x":116,"y":873,"width":763,"height":12}},{"id":"a2d9175a-40c6-4d23-8528-7842225e1540","block_type":"box","text":"1","page_number":10,"box":{"x":497,"y":909,"width":4,"height":9}},{"id":"e9e05128-ac3f-426b-897b-3e8d13cd7118","block_type":"box","text":"NM1026U-6004408-10/267","page_number":10,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f0ea0d38-a4b8-4ee4-bde1-d54bc950f8c5","block_type":"box","text":"set forth in the handbook for Authorized Participants. The Trust may use such collateral at any time to","page_number":11,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"325c2153-9b1b-46a6-bc73-8a16b97761c9","block_type":"box","text":"purchase Deposit Securities. See the","page_number":11,"box":{"x":117,"y":102,"width":280,"height":12}},{"id":"eb4ca5bc-a267-4912-854b-375f4663369a","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":11,"box":{"x":399,"y":102,"width":320,"height":12}},{"id":"af99afdf-446c-429b-bae3-7a1b9e46818d","block_type":"box","text":"s section of this SAI.","page_number":11,"box":{"x":719,"y":102,"width":149,"height":10}},{"id":"c39fe383-7b79-4cb0-b259-abf803c9df62","block_type":"box","text":"Transaction fees and other costs associated with creations or redemptions that include a cash portion","page_number":11,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"cc5d8eca-affb-44e4-83b4-e322c03f3630","block_type":"box","text":"may be higher than the transaction fees and other costs associated with in-kind creations or","page_number":11,"box":{"x":117,"y":134,"width":686,"height":12}},{"id":"2ee14633-1d12-4395-abce-a0c48afd830f","block_type":"box","text":"redemptions. In all cases, conditions with respect to creations and redemptions of shares and fees will","page_number":11,"box":{"x":117,"y":149,"width":762,"height":12}},{"id":"cff1297c-64cf-4420-816a-ee50ba2deb13","block_type":"box","text":"be limited in accordance with the requirements of SEC rules and regulations applicable to","page_number":11,"box":{"x":117,"y":165,"width":668,"height":12}},{"id":"3acf44d4-9d4d-4230-8506-07f7164be523","block_type":"box","text":"management investment companies offering redeemable securities.","page_number":11,"box":{"x":117,"y":180,"width":509,"height":12}},{"id":"4000e3e9-735b-48e3-8fbb-6e891c34be8c","block_type":"box","text":"Exchange Listing and Trading","page_number":11,"box":{"x":119,"y":225,"width":542,"height":29}},{"id":"92669efa-93b5-4841-9727-3ce74df504b3","block_type":"box","text":"A discussion of exchange listing and trading matters associated with an investment in the Fund is","page_number":11,"box":{"x":116,"y":272,"width":728,"height":12}},{"id":"b3742fdf-513a-4240-9de5-4a4fd27babd3","block_type":"box","text":"contained in the","page_number":11,"box":{"x":116,"y":287,"width":123,"height":10}},{"id":"4d862fe6-d8fd-4faf-a8a8-0364a21059ad","block_type":"box","text":"Shareholder Information","page_number":11,"box":{"x":240,"y":287,"width":179,"height":10}},{"id":"6c460765-a573-492a-9cd1-0bfba7e672da","block_type":"box","text":"section of the Fund’s Prospectus. The discussion below","page_number":11,"box":{"x":420,"y":287,"width":424,"height":12}},{"id":"0576bb4d-5674-46ca-bfee-c30f6fc9693d","block_type":"box","text":"supplements, and should be read in conjunction with, that section of the Prospectus.","page_number":11,"box":{"x":116,"y":303,"width":631,"height":12}},{"id":"11079aac-7546-4aab-90c1-70867b1f22f0","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":11,"box":{"x":116,"y":331,"width":766,"height":12}},{"id":"16e259be-7588-4288-8930-30747aa991d0","block_type":"box","text":"other secondary markets. Shares of the Fund may also be listed on certain non-U.S. exchanges. There","page_number":11,"box":{"x":116,"y":346,"width":771,"height":12}},{"id":"9cb803ab-8b01-4cc5-8bf4-cfcf5e410026","block_type":"box","text":"can be no assurance that the requirements of the Listing Exchange necessary to maintain the listing of","page_number":11,"box":{"x":116,"y":362,"width":767,"height":12}},{"id":"c8e3d835-6e4b-4679-83d0-21367229df44","block_type":"box","text":"shares of the Fund will continue to be met. The Listing Exchange may, but is not required to, remove","page_number":11,"box":{"x":116,"y":377,"width":752,"height":12}},{"id":"79a2f659-ba48-4a3f-a8e8-877d3680ec24","block_type":"box","text":"the shares of the Fund from listing if, among other things: (i) the Fund is no longer eligible to operate in","page_number":11,"box":{"x":116,"y":393,"width":768,"height":12}},{"id":"e2e05963-49e1-4b2d-ac87-5dc479ade2bd","block_type":"box","text":"reliance on Rule 6c-11 under the 1940 Act; (ii) any of the other listing requirements are not","page_number":11,"box":{"x":117,"y":408,"width":676,"height":12}},{"id":"5e75075f-07ac-4e2f-9d39-88047e9bb749","block_type":"box","text":"continuously maintained; (iii) following the initial 12-month period beginning upon the commencement","page_number":11,"box":{"x":116,"y":424,"width":757,"height":12}},{"id":"24873cf0-c5e0-4ebd-8b0d-ff790447e982","block_type":"box","text":"of trading of Fund shares, there are fewer than 50 record and/or beneficial owners of shares of the","page_number":11,"box":{"x":116,"y":439,"width":735,"height":12}},{"id":"2fbcf3b0-a5ee-41db-b631-5d088c8dc402","block_type":"box","text":"Fund; or (iv) any event shall occur or condition shall exist that, in the opinion of the Listing Exchange,","page_number":11,"box":{"x":117,"y":455,"width":754,"height":12}},{"id":"bb37500a-5c1c-49c1-966f-63e33d7cf313","block_type":"box","text":"makes further dealings on the Listing Exchange inadvisable. 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A vote of a majority of the outstandi","page_number":18,"box":{"x":116,"y":784,"width":335,"height":12}},{"id":"521d4740-3b0c-40fb-8557-d3dc8104a97c","block_type":"box","text":"ng voting securities of the Fund is defined in the","page_number":18,"box":{"x":453,"y":784,"width":347,"height":12}},{"id":"ad93603b-f368-4670-8900-4ca1c7501bb1","block_type":"box","text":"Investment Company Act as the lesser of (i) 67%","page_number":18,"box":{"x":117,"y":800,"width":355,"height":12}},{"id":"593ac5d5-920c-45fd-8a5e-6dfcf1af091c","block_type":"box","text":"or more of the voting securities present at a","page_number":18,"box":{"x":478,"y":800,"width":316,"height":12}},{"id":"a5599b24-959e-463c-bb58-49d9a72b25fc","block_type":"box","text":"shareholder meeting, if the holders of more than 50%","page_number":18,"box":{"x":116,"y":815,"width":387,"height":12}},{"id":"e118818e-7ba4-4c72-88f1-e8bdd92808ea","block_type":"box","text":"of the outstanding voting securities of the Fund are","page_number":18,"box":{"x":509,"y":815,"width":368,"height":12}},{"id":"f6f01544-9a99-4bcd-9fbb-2614801c9226","block_type":"box","text":"present or represented by proxy, or (ii) more t","page_number":18,"box":{"x":117,"y":831,"width":330,"height":12}},{"id":"fdd5c141-3bce-41ff-9a93-2f13c6c5baf9","block_type":"box","text":"han 50% of the outstanding voting securities of the Fund.","page_number":18,"box":{"x":448,"y":831,"width":419,"height":12}},{"id":"3e08615c-d605-4744-8aa8-2e47cf327ddd","block_type":"box","text":"The Fund has also adopted certain non-fundamental inve","page_number":18,"box":{"x":116,"y":846,"width":417,"height":12}},{"id":"0a375bec-7fb0-4ce7-801d-22710c2846e9","block_type":"box","text":"stment policies, including its investment","page_number":18,"box":{"x":534,"y":846,"width":291,"height":12}},{"id":"0bf56fcb-138b-42f2-9f6d-15297450841e","block_type":"box","text":"objective. Non-fundamental investment policie","page_number":18,"box":{"x":116,"y":862,"width":335,"height":12}},{"id":"76c7eff2-5d16-4157-a584-09f257f4beb2","block_type":"box","text":"s may be changed by the Board without shareholder","page_number":18,"box":{"x":452,"y":862,"width":385,"height":12}},{"id":"34e1b944-83f2-4bf3-b90d-eabb6fa00367","block_type":"box","text":"approval. Therefore, the Fund may change its inves","page_number":18,"box":{"x":116,"y":877,"width":375,"height":12}},{"id":"ff6c617d-4264-4f9d-b2f6-b50fe7f21845","block_type":"box","text":"tment objective without shareholder approval.","page_number":18,"box":{"x":492,"y":877,"width":336,"height":12}},{"id":"ca90e10c-c371-4436-9c43-76b9da85b4bb","block_type":"box","text":"9","page_number":18,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"a2bb5a33-14d4-4c39-8f5d-55e52041ef51","block_type":"box","text":"NM1026U-6004408-18/267","page_number":18,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"187f2aa3-915e-4653-b583-da2fcfe2ea46","block_type":"box","text":"Fundamental Investment Policies","page_number":19,"box":{"x":117,"y":87,"width":270,"height":10}},{"id":"412fa3a3-4dfb-42cf-a434-9b6459bcf6b1","block_type":"box","text":"The Fund may not:","page_number":19,"box":{"x":116,"y":110,"width":146,"height":12}},{"id":"b4065058-74eb-488d-a702-115f10975f40","block_type":"box","text":"1. Purchase any securities which would cause 25% or more of the value of the Fund’s total assets at","page_number":19,"box":{"x":118,"y":141,"width":764,"height":12}},{"id":"945c2c76-3197-4bb3-a433-263e5e1503b9","block_type":"box","text":"the time of purchase to be invested in the securities of one or more issuers conducting their","page_number":19,"box":{"x":150,"y":157,"width":684,"height":12}},{"id":"40fc6a91-363a-4e01-89a4-2bf1072558fa","block_type":"box","text":"principal business activities in the same industry, provided that (a) there is no limitation with","page_number":19,"box":{"x":150,"y":172,"width":683,"height":12}},{"id":"3259cd85-b906-4546-a60e-9c0a6efaf8fd","block_type":"box","text":"respect to (i) instruments issued or guaranteed by the United States and tax exempt instruments","page_number":19,"box":{"x":150,"y":188,"width":720,"height":12}},{"id":"c6a0c2ce-51a7-4f5f-abea-727b4e563cba","block_type":"box","text":"issued by any state, territory or possession of the United States, the District of Columbia or any of","page_number":19,"box":{"x":150,"y":203,"width":730,"height":12}},{"id":"c69cce20-9a99-4e3f-a929-79ec7dc1586b","block_type":"box","text":"their authorities, agencies, instrumentalities or political subdivisions, and (ii) repurchase","page_number":19,"box":{"x":150,"y":219,"width":653,"height":12}},{"id":"c36dbf4f-d8e5-48d1-9bfa-77be9724d3cb","block_type":"box","text":"agreements secured by the instruments described in clause (i); (b) wholly-owned finance","page_number":19,"box":{"x":150,"y":234,"width":664,"height":12}},{"id":"52e7382d-e741-4ea0-965e-43c007c42b8a","block_type":"box","text":"companies will be considered to be in the industries of their parents if their activities are primarily","page_number":19,"box":{"x":150,"y":250,"width":723,"height":12}},{"id":"58ecaf4f-0b48-4cea-8059-4dbfd3e6a9c6","block_type":"box","text":"related to financing the activities of the parents; and (c) utilities will be divided according to their","page_number":19,"box":{"x":150,"y":265,"width":712,"height":12}},{"id":"1431448a-ec28-4269-aead-e447fc61a517","block_type":"box","text":"services; for example, gas, gas transmission, electric and gas, electric and telephone will each be","page_number":19,"box":{"x":150,"y":281,"width":729,"height":12}},{"id":"7b663bc6-d53b-423c-97cc-075a183b0535","block_type":"box","text":"considered a separate industry.","page_number":19,"box":{"x":150,"y":296,"width":239,"height":12}},{"id":"5ebb2781-9f96-4bfc-97f0-f844d769a1fd","block_type":"box","text":"2. Purchase or sell real estate, except that the Fund may purchase securities of issuers which deal in","page_number":19,"box":{"x":116,"y":320,"width":770,"height":12}},{"id":"43d51567-0dfe-4f17-9c6b-1c6e9b4c71c7","block_type":"box","text":"real estate and may purchase securities which are secured by interests in real estate.","page_number":19,"box":{"x":150,"y":335,"width":639,"height":12}},{"id":"38c8fd81-79fc-4484-a8d2-1bde3af948b1","block_type":"box","text":"3. Acquire any other investment company or investment company security except in connection with","page_number":19,"box":{"x":116,"y":358,"width":763,"height":12}},{"id":"c7d962ed-cb52-46ef-94fe-be648d2903bb","block_type":"box","text":"a merger, consolidation, reorganization or acquisition of assets or where otherwise permitted by","page_number":19,"box":{"x":150,"y":374,"width":715,"height":12}},{"id":"d9d465e7-ca58-4bc6-9780-e4789513b20e","block_type":"box","text":"the Investment Company Act.","page_number":19,"box":{"x":150,"y":389,"width":225,"height":12}},{"id":"4c31a5ab-248a-4f4e-bd62-c146c5f69921","block_type":"box","text":"4. Act as an underwriter of securities within the meaning of the Securities Act of 1933, as amended","page_number":19,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"d11e6637-3a61-4038-8845-b6760fd6795e","block_type":"box","text":"(the “1933 Act”), except to the extent that the purchase of obligations directly from the issuer","page_number":19,"box":{"x":150,"y":428,"width":690,"height":12}},{"id":"01bcdb93-319e-4589-aa88-ec9edb39b187","block_type":"box","text":"thereof, or the disposition of securities, in accordance with the Fund’s investment objective,","page_number":19,"box":{"x":150,"y":444,"width":682,"height":12}},{"id":"1516021a-53ad-4d9d-9bcc-14c4c1df6f86","block_type":"box","text":"policies and limitations may be deemed to be underwriting.","page_number":19,"box":{"x":150,"y":459,"width":441,"height":12}},{"id":"7e4d83e6-024d-4f86-b373-d750758a67cf","block_type":"box","text":"5. Write or sell put options, call options, straddles, spreads, or any combination thereof, except for","page_number":19,"box":{"x":116,"y":482,"width":747,"height":12}},{"id":"7774522b-6de0-4b75-a76f-c7e8c1891d69","block_type":"box","text":"transactions in options on securities and securities indices, futures contracts and options on","page_number":19,"box":{"x":150,"y":498,"width":685,"height":12}},{"id":"b10f96f4-2549-4162-b242-4cc18848fe36","block_type":"box","text":"futures contracts.","page_number":19,"box":{"x":149,"y":513,"width":134,"height":10}},{"id":"58403975-201b-4eed-b759-dba753c828c4","block_type":"box","text":"6. Purchase securities of companies for the purpose of exercising control.","page_number":19,"box":{"x":116,"y":537,"width":567,"height":12}},{"id":"1b4b7d6f-9e3d-4d40-8cc9-d22871cd44c6","block_type":"box","text":"7. Purchase securities on margin, make short sales of securities or maintain a short position, except","page_number":19,"box":{"x":116,"y":560,"width":761,"height":12}},{"id":"a2eb2067-c687-4880-9275-e6b21ba12971","block_type":"box","text":"that (a) this investment limitation shall not apply to the Fund’s transactions in futures contracts and","page_number":19,"box":{"x":150,"y":575,"width":735,"height":12}},{"id":"7fe946ed-7915-45e5-8c03-0432bb6fa41d","block_type":"box","text":"related options or the Fund’s sale of securities short against the box, and (b) the Fund may obtain","page_number":19,"box":{"x":150,"y":591,"width":729,"height":12}},{"id":"a20ad3e7-870c-4583-b9bc-bab350b1e41b","block_type":"box","text":"short-term credit as may be necessary for the clearance of purchases and sales of portfolio","page_number":19,"box":{"x":150,"y":606,"width":682,"height":12}},{"id":"34fe87a6-b47d-47b7-a865-a3d022038916","block_type":"box","text":"securities.","page_number":19,"box":{"x":150,"y":622,"width":80,"height":9}},{"id":"1f9eb465-3f88-425c-933a-e22c43981458","block_type":"box","text":"8. Purchase or sell commodity contracts, or invest in oil, gas or mineral exploration or development","page_number":19,"box":{"x":116,"y":645,"width":754,"height":12}},{"id":"089b45e3-610f-45d3-99ef-7ddf2337b1ba","block_type":"box","text":"programs, except that the Fund may, to the extent appropriate to its investment policies, purchase","page_number":19,"box":{"x":150,"y":661,"width":727,"height":12}},{"id":"47ffcabc-ea18-45bf-a903-a8293b55c079","block_type":"box","text":"securities of companies engaging in whole or in part in such activities and may enter into futures","page_number":19,"box":{"x":150,"y":676,"width":713,"height":12}},{"id":"5080b450-d2ae-4c98-b8a3-091ac75642b1","block_type":"box","text":"contracts and related options.","page_number":19,"box":{"x":150,"y":692,"width":219,"height":12}},{"id":"56c99ee3-b3dc-49c2-aa41-7da2891e46ff","block_type":"box","text":"9. Make loans, except that the Fund may purchase and hold debt instruments and enter into","page_number":19,"box":{"x":116,"y":715,"width":698,"height":12}},{"id":"5940fd72-9832-4b0c-b8ee-9c3a41b64118","block_type":"box","text":"repurchase agreements in accordance with its investment objective and policies and may lend","page_number":19,"box":{"x":150,"y":731,"width":698,"height":12}},{"id":"beb327e9-5bc2-47c2-84ad-7432b1bae3c8","block_type":"box","text":"portfolio securities.","page_number":19,"box":{"x":150,"y":746,"width":138,"height":12}},{"id":"dc4bd617-589e-4fe1-909d-b10520b58611","block_type":"box","text":"10. Purchase or sell commodities except that the Fund may, to the extent appropriate to its investment","page_number":19,"box":{"x":118,"y":769,"width":764,"height":12}},{"id":"5aa546ee-5675-4e69-b4bd-69aa7ba3dcee","block_type":"box","text":"policies, purchase securities of companies engaging in whole or in part in such activities, may","page_number":19,"box":{"x":150,"y":785,"width":694,"height":12}},{"id":"0c83d01a-17d3-45fb-8389-004ec2d77c16","block_type":"box","text":"engage in currency transactions and may enter into futures contracts and related options.","page_number":19,"box":{"x":150,"y":800,"width":662,"height":12}},{"id":"666b7f03-e371-485e-86ba-159dde6bdf5e","block_type":"box","text":"11. Purchase securities of any one issuer (other than securities issued or guaranteed by the U.S.","page_number":19,"box":{"x":118,"y":823,"width":722,"height":13}},{"id":"4add5a8a-8b41-45ce-940f-980dc3788a3d","block_type":"box","text":"Government, its agencies or instrumentalities or certificates of deposit for any such securities) if","page_number":19,"box":{"x":150,"y":839,"width":714,"height":12}},{"id":"66748e26-bd95-456f-8d56-83774bbe162d","block_type":"box","text":"more than 5% of the value of the Fund’s total assets would (taken at current value) be invested in","page_number":19,"box":{"x":150,"y":854,"width":728,"height":13}},{"id":"99b762d0-6128-4201-a5b2-1bf4607316d0","block_type":"box","text":"the securities of such issuer, or more than 10% of the issuer’s outstanding voting securities would","page_number":19,"box":{"x":150,"y":870,"width":729,"height":12}},{"id":"f945417a-b43d-4cb2-bbe9-5af89a259e89","block_type":"box","text":"10","page_number":19,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"b31197e7-4e54-43ca-88e3-f4202f7586d2","block_type":"box","text":"NM1026U-6004408-19/267","page_number":19,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6492ebba-3d47-4be1-92e8-cc3fcc0407b0","block_type":"box","text":"be owned by the Fund or the Trust, except that up to 25% of the value of the Fund’s total assets","page_number":20,"box":{"x":150,"y":87,"width":717,"height":12}},{"id":"f05ba134-4afa-4845-8c44-38b928e28107","block_type":"box","text":"may (taken at current value) be invested without regard to these limitations. For purposes of this","page_number":20,"box":{"x":150,"y":102,"width":718,"height":13}},{"id":"8994d8e4-3d51-49a3-8801-ef5ccd565694","block_type":"box","text":"limitation, a security is considered to be issued by the entity (or entities) whose assets and","page_number":20,"box":{"x":150,"y":118,"width":675,"height":12}},{"id":"d7abba9c-718d-4249-b7e0-758dd94317df","block_type":"box","text":"revenues back the security. A guarantee of a security shall not be deemed to be a security issued","page_number":20,"box":{"x":150,"y":134,"width":729,"height":12}},{"id":"73019711-fcdc-449e-a32a-06093b2aab9c","block_type":"box","text":"by the guarantors when the value of all securities issued and guaranteed by the guarantor, and","page_number":20,"box":{"x":150,"y":149,"width":710,"height":12}},{"id":"95e25b17-3175-44e0-b89a-0c81af0f8359","block_type":"box","text":"owned by the Fund, does not exceed 10% of the value of the Fund’s total assets.","page_number":20,"box":{"x":150,"y":165,"width":607,"height":12}},{"id":"2a00aae6-8e9e-454f-93a3-3a794507d6c6","block_type":"box","text":"12. Borrow money or issue senior securities, except that the Fund may borrow from banks and enter","page_number":20,"box":{"x":118,"y":188,"width":754,"height":12}},{"id":"4377fa85-e270-419f-a90c-d13dbfc8a57c","block_type":"box","text":"into reverse repurchase agreements for temporary purposes in amounts up to one-third of the","page_number":20,"box":{"x":150,"y":203,"width":701,"height":12}},{"id":"fb2e9f5d-9ee1-4a16-ae82-519bba3907ef","block_type":"box","text":"value of its total assets at the time of such borrowing; or mortgage, pledge or hypothecate any","page_number":20,"box":{"x":150,"y":219,"width":703,"height":12}},{"id":"fc7d172d-341c-4d2c-b8d8-dde76b895163","block_type":"box","text":"assets, except in connection with any such borrowing and then in amounts not in excess of one","page_number":20,"box":{"x":150,"y":234,"width":713,"height":12}},{"id":"b41dadea-c429-44d4-b0cc-44e481c09f7a","block_type":"box","text":"third of the value of the Fund’s total assets at the time of such borrowing. The Fund will not","page_number":20,"box":{"x":150,"y":250,"width":679,"height":12}},{"id":"5dff6ac6-e505-467a-b356-182d9698fb9d","block_type":"box","text":"purchase securities while its aggregate borrowings (including reverse repurchase agreements and","page_number":20,"box":{"x":150,"y":265,"width":734,"height":12}},{"id":"4eace2c9-0cbe-40de-9703-8ce900a9eba1","block_type":"box","text":"borrowings from banks) in excess of 5% of its total assets are outstanding. Securities held in","page_number":20,"box":{"x":150,"y":281,"width":691,"height":12}},{"id":"9be6fbc7-2794-4789-85cc-c0d35461275d","block_type":"box","text":"escrow or separate accounts in connection with the Fund’s investment practices are not deemed","page_number":20,"box":{"x":150,"y":296,"width":722,"height":12}},{"id":"c59b2eb4-6910-4ffb-9518-e371318cbe73","block_type":"box","text":"to be pledged for purposes of this limitation.","page_number":20,"box":{"x":150,"y":312,"width":330,"height":12}},{"id":"fbe6ae8c-dac0-468a-9843-8cc804f7fe1d","block_type":"box","text":"Notations Regarding the Fund’s Fundamental Investment Policies","page_number":20,"box":{"x":116,"y":343,"width":531,"height":12}},{"id":"f2abb73a-f22f-479f-8322-dbb0ca71eb69","block_type":"box","text":"The following notations are not considered to be part of the Fund’s fundamental investment restrictions","page_number":20,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"c8057da1-0609-41e7-8601-4d72785ecfef","block_type":"box","text":"and are subject to change without shareholder approval.","page_number":20,"box":{"x":116,"y":382,"width":424,"height":12}},{"id":"bbb7020b-fb1c-4277-94f0-6e11cccb1d03","block_type":"box","text":"Fundamental investment restriction no. 5, which does not restrict transactions in options on securities","page_number":20,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"64a4d313-72f6-496c-bad1-ed3f6ab094ad","block_type":"box","text":"and securities indices, and fundamental restrictions no. 8 and 10 are being interpreted to permit the","page_number":20,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"708650b5-c8d2-447e-9195-71437ae7cba2","block_type":"box","text":"Fund to engage in transactions in swaps and options on swaps, as applicable, related to financial","page_number":20,"box":{"x":117,"y":444,"width":726,"height":12}},{"id":"4d56cdc1-ef7b-419b-8d9f-29caefecb702","block_type":"box","text":"instruments, such as securities, securities indices and currencies, but not to engage in transactions in","page_number":20,"box":{"x":117,"y":459,"width":758,"height":12}},{"id":"8d7aad5b-45df-419d-816f-c02a0fbeb24c","block_type":"box","text":"swaps or options on swaps related to physical commodities, such as oil or metals.","page_number":20,"box":{"x":116,"y":475,"width":613,"height":12}},{"id":"f86056ac-b575-40fb-a3c2-2dde7b2f644b","block_type":"box","text":"With respect to the fundamental policy relating to issuing senior securities above, the Investment","page_number":20,"box":{"x":116,"y":506,"width":722,"height":12}},{"id":"46484af0-10a2-4e7c-a34f-cbbc5abcbd15","block_type":"box","text":"Company Act, including the rules and regulations thereunder, generally prohibits the Fund from issuing","page_number":20,"box":{"x":117,"y":521,"width":768,"height":12}},{"id":"0b43633c-b167-4159-a29a-e4c6c135f4ce","block_type":"box","text":"senior securities (other than certain temporary borrowings) unless immediately after the issuance the","page_number":20,"box":{"x":116,"y":537,"width":754,"height":12}},{"id":"30bc1223-1399-4929-b797-6ae748711b6c","block_type":"box","text":"Fund has satisfied an asset coverage requirement with respect to senior securities representing","page_number":20,"box":{"x":117,"y":552,"width":714,"height":12}},{"id":"a9246453-3d80-422a-932e-c944f3adf110","block_type":"box","text":"indebtedness prescribed by the Investment Company Act. Certain trading practices and investments,","page_number":20,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"389766ed-61a1-40b9-9bef-3dd194502e8b","block_type":"box","text":"such as derivatives transactions, may be treated as senior securities. Prior to the adoption and","page_number":20,"box":{"x":116,"y":583,"width":707,"height":12}},{"id":"5b64e127-7e9a-4748-94ce-53f536509ee8","block_type":"box","text":"implementation of Rule 18f-4 under the Investment Company Act, when a fund engaged in a","page_number":20,"box":{"x":117,"y":599,"width":690,"height":12}},{"id":"955994da-2845-472b-9754-2643f1207bf7","block_type":"box","text":"derivatives transaction that creates future payment obligations, consistent with SEC staff guidance and","page_number":20,"box":{"x":116,"y":614,"width":768,"height":12}},{"id":"c8193419-285e-479c-9967-fe9d33b9000a","block_type":"box","text":"interpretations, such fund was permitted to segregate or earmark liquid assets, or enter into an","page_number":20,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"3579ec4e-0c8a-4556-8efd-6a38a9c7896f","block_type":"box","text":"offsetting position, in an amount at least equal to the Fund’s exposure, on a mark-to-market basis, to","page_number":20,"box":{"x":116,"y":645,"width":751,"height":12}},{"id":"266a9766-84ec-45eb-9b4e-0909ffd979a5","block_type":"box","text":"the transaction, instead of meeting the asset coverage requirement with respect to senior securities","page_number":20,"box":{"x":116,"y":661,"width":738,"height":12}},{"id":"87768d93-0549-4b2e-9521-5a8caab41b7a","block_type":"box","text":"prescribed by the Investment Company Act. The SEC staff guidance and interpretations were","page_number":20,"box":{"x":117,"y":676,"width":693,"height":12}},{"id":"ba32532a-750c-4476-abf3-43e76883062a","block_type":"box","text":"rescinded in connection with the adoption of Rule 18f-4, and the Fund complies with Rule 18f-4 with","page_number":20,"box":{"x":117,"y":692,"width":738,"height":12}},{"id":"757b07dd-e5e1-40a4-b5e4-034e9b91038c","block_type":"box","text":"respect to its derivatives transactions. Thus, the fundamental policy relating to issuing senior securities","page_number":20,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"985d1e28-1b45-45d6-b2b9-417aa4ec027b","block_type":"box","text":"above will not restrict the Fund from entering into derivatives transactions that are treated as senior","page_number":20,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"d5789289-1a14-4c21-ab90-8d416dafaab9","block_type":"box","text":"securities so long as the Fund complies with Rule 18f-4 with respect to such derivatives transactions.","page_number":20,"box":{"x":116,"y":738,"width":748,"height":12}},{"id":"62eb7afc-0a63-4a6b-a548-5f10b92f33c2","block_type":"box","text":"Non-Fundamental Investment Policies","page_number":20,"box":{"x":117,"y":769,"width":303,"height":10}},{"id":"64e0c9db-1572-441e-b7a9-be2498ee6be8","block_type":"box","text":"The Fund has adopted a non-fundamental investment policy, in accordance with Rule 35d-1 under the","page_number":20,"box":{"x":116,"y":792,"width":759,"height":13}},{"id":"c01e507a-2fb0-4057-bf41-92dd97f80ff6","block_type":"box","text":"1940 Act, to invest, under normal circumstances, at least 80% of its net assets plus any borrowings for","page_number":20,"box":{"x":118,"y":808,"width":760,"height":12}},{"id":"92c3adee-cd1c-468f-a4d8-6997dc45ee90","block_type":"box","text":"investment purposes in dividend-paying equity securities issued by foreign companies of any market","page_number":20,"box":{"x":117,"y":823,"width":744,"height":13}},{"id":"1b9f58c7-43a6-4f50-8f48-c7c7b36bf644","block_type":"box","text":"capitalization and derivatives that have similar economic characteristics to such securities. Investments","page_number":20,"box":{"x":116,"y":839,"width":771,"height":12}},{"id":"e3b73c7c-bb6e-4e96-a9b6-2187d38a043f","block_type":"box","text":"in derivatives are counted toward the Fund’s 80% policy to the extent that they provide investment","page_number":20,"box":{"x":117,"y":854,"width":732,"height":13}},{"id":"6f238e56-335c-48cc-90d3-3f80831acefd","block_type":"box","text":"exposure to the securities included within that policy or to one or more market risk factors associated","page_number":20,"box":{"x":116,"y":870,"width":753,"height":12}},{"id":"36a0f420-fe86-40b4-8d54-ce8d5177ad0e","block_type":"box","text":"11","page_number":20,"box":{"x":492,"y":909,"width":14,"height":9}},{"id":"53bb1163-507f-4a62-81f2-a3b9bc46b251","block_type":"box","text":"NM1026U-6004408-20/267","page_number":20,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"fedd541b-8022-44ad-a775-d0c5fd17fad2","block_type":"box","text":"with such securities. For purposes of the Fund’s 80% policy, dividend-paying equity securities are","page_number":21,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"3507e2f5-0b2b-4bd8-82e0-dbcf2b12aa34","block_type":"box","text":"equity securities of companies that pay out a portion of their profits to shareholders of such securities","page_number":21,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"0a134c32-2c03-4821-951d-aea77a339dbd","block_type":"box","text":"on a periodic basis (i.e., at least once within the company’s latest fiscal year). The Fund also has","page_number":21,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"c7337c92-5b30-4717-819c-fe0d83cdee41","block_type":"box","text":"adopted a policy to provide its shareholders with at least 60 days’ notice of any change in such policy.","page_number":21,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"ccd79164-9b58-47d5-8755-a14d83709ef8","block_type":"box","text":"If, subsequent to an investment, the 80% requirement is no longer met, the Fund’s future investments","page_number":21,"box":{"x":117,"y":149,"width":758,"height":12}},{"id":"4cf20515-91d3-4af0-85d7-2837408edfc4","block_type":"box","text":"will be made in a manner that will bring the Fund into compliance with this policy.","page_number":21,"box":{"x":116,"y":165,"width":605,"height":12}},{"id":"701e45d7-bdc1-4927-a097-2517e945a15d","block_type":"box","text":"Under its non-fundamental investment policies, which may be changed by the Board without","page_number":21,"box":{"x":117,"y":193,"width":688,"height":13}},{"id":"2e8e80c1-1557-4943-a231-2fd7c6cef2c5","block_type":"box","text":"shareholder approval, the Fund may not:","page_number":21,"box":{"x":116,"y":209,"width":308,"height":12}},{"id":"33a4bb3f-0448-4d22-b3f2-b88507b223af","block_type":"box","text":"a. Purchase securities of other investment companies, except to the extent permitted by the","page_number":21,"box":{"x":116,"y":238,"width":701,"height":12}},{"id":"fd820023-02ac-49b8-9e0a-1e1d6a099074","block_type":"box","text":"Investment Company Act. As a matter of policy, however, the Fund will not purchase shares of","page_number":21,"box":{"x":151,"y":253,"width":706,"height":13}},{"id":"bbdd03d2-a2dc-4b11-aa13-0ae51aee7ba7","block_type":"box","text":"any registered open-end investment company or registered unit investment trust, in reliance on","page_number":21,"box":{"x":150,"y":269,"width":710,"height":12}},{"id":"92692df8-ca1b-4a7b-be3c-e8c2c754393d","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":21,"box":{"x":150,"y":284,"width":723,"height":13}},{"id":"43917605-3308-4715-a202-2d6ae030fa9e","block_type":"box","text":"time the Fund has knowledge that its shares are purchased by another investment company","page_number":21,"box":{"x":150,"y":300,"width":689,"height":12}},{"id":"8b20e879-5bfa-412a-b08e-1f11a0020130","block_type":"box","text":"investor in reliance on the provisions of subparagraph (G) of Section 12(d)(1).","page_number":21,"box":{"x":150,"y":315,"width":581,"height":13}},{"id":"563cc3b8-e337-4c22-a3ec-b5e0bafc3c65","block_type":"box","text":"b. Make short sales of securities or maintain a short position, except to the extent permitted by the","page_number":21,"box":{"x":117,"y":338,"width":748,"height":12}},{"id":"e5893563-8ec4-41aa-af26-c2d067e0c03b","block_type":"box","text":"Fund’s Prospectus and SAI, as amended from time to time, and applicable law.","page_number":21,"box":{"x":151,"y":353,"width":592,"height":12}},{"id":"319c78c8-cc88-4106-a177-0f265e80f671","block_type":"box","text":"Unless otherwise indicated or with respect to policies adopted pursuant to Rule 35d-1 under the","page_number":21,"box":{"x":117,"y":382,"width":714,"height":12}},{"id":"0c5e17c0-3351-4b35-a837-1bead0a948a1","block_type":"box","text":"Investment Company Act, all limitations under the Fund’s fundamental or non-fundamental investment","page_number":21,"box":{"x":117,"y":398,"width":762,"height":12}},{"id":"b365d6f0-ec1b-4e93-b5c0-1087ba924e4d","block_type":"box","text":"policies apply only at the time that a transaction is undertaken. Any change in the percentage of the","page_number":21,"box":{"x":117,"y":413,"width":743,"height":12}},{"id":"a01b60ba-faab-487d-bf60-0b26836d6a30","block_type":"box","text":"Fund’s assets invested in certain securities or other instruments resulting from market fluctuations or","page_number":21,"box":{"x":117,"y":429,"width":750,"height":12}},{"id":"14c3036c-053a-4755-8fe6-c4c1828ba855","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":21,"box":{"x":116,"y":444,"width":769,"height":12}},{"id":"babf2b48-a560-4ca0-aa7b-403db4455cf1","block_type":"box","text":"determines that it is practicable to sell or close out the investment without undue market or tax","page_number":21,"box":{"x":116,"y":460,"width":704,"height":12}},{"id":"3a87e148-f5cb-41b0-b42d-c3901a9d7242","block_type":"box","text":"consequences.","page_number":21,"box":{"x":116,"y":478,"width":118,"height":9}},{"id":"499afb98-96d9-4b43-aace-c121fead1394","block_type":"box","text":"Continuous Offering","page_number":21,"box":{"x":118,"y":522,"width":368,"height":30}},{"id":"3fd966bf-d921-417f-acce-fe55206c8ecd","block_type":"box","text":"The method by which Creation Units are created and traded may raise certain issues under applicable","page_number":21,"box":{"x":116,"y":571,"width":764,"height":12}},{"id":"d45d3cf4-c45c-4c2f-8091-a2ef9295ddf6","block_type":"box","text":"securities laws. Because new Creation Units are issued and sold by the Fund on an ongoing basis, at","page_number":21,"box":{"x":116,"y":587,"width":758,"height":12}},{"id":"4e5d5dbd-2a77-4d36-ae7f-b9e6d2f9f703","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":21,"box":{"x":116,"y":602,"width":748,"height":12}},{"id":"18e326c4-7b3f-4c7d-9184-8f369b236827","block_type":"box","text":"persons are cautioned that some activities on their part may, depending on the circumstances, result in","page_number":21,"box":{"x":117,"y":618,"width":769,"height":12}},{"id":"bee1c36f-1101-444e-b389-5c8c67e0777e","block_type":"box","text":"their being deemed participants in a distribution in a manner that could render them statutory","page_number":21,"box":{"x":116,"y":634,"width":693,"height":11}},{"id":"34679f7f-3c64-47f1-981a-4ca160efb03a","block_type":"box","text":"underwriters and subject them to the prospectus delivery requirement and liability provisions of the","page_number":21,"box":{"x":117,"y":649,"width":735,"height":12}},{"id":"e7d03f7d-4496-49ad-afbe-b8547b60b033","block_type":"box","text":"1933 Act.","page_number":21,"box":{"x":118,"y":664,"width":67,"height":10}},{"id":"8aa80659-a94a-44b3-8e07-247b04146d6d","block_type":"box","text":"For example, a broker-dealer firm or its client may be deemed a statutory underwriter if it takes","page_number":21,"box":{"x":117,"y":693,"width":702,"height":12}},{"id":"d0a3d77e-5f1f-462f-9291-dee12d967d50","block_type":"box","text":"Creation Units after placing an order with the Distributor, breaks them down into constituent shares and","page_number":21,"box":{"x":117,"y":709,"width":765,"height":12}},{"id":"b1a7b1ef-7dd6-4385-a389-a7995dc4c8eb","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":21,"box":{"x":116,"y":724,"width":733,"height":12}},{"id":"93a0fd2e-5b9d-43f4-8300-20a3071b0898","block_type":"box","text":"active selling effort involving solicitation of secondary market demand for shares. A determination of","page_number":21,"box":{"x":116,"y":740,"width":741,"height":12}},{"id":"08300d93-33e3-494d-8255-aaea9361a947","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":21,"box":{"x":116,"y":755,"width":751,"height":12}},{"id":"3b2b063e-baa3-4d80-aa06-1c01988da004","block_type":"box","text":"circumstances pertaining to the activities of the broker-dealer or its client in the particular case and the","page_number":21,"box":{"x":116,"y":771,"width":759,"height":12}},{"id":"811258d3-de1d-497c-a43a-e269128c8484","block_type":"box","text":"examples mentioned above should not be considered a complete description of all the activities that","page_number":21,"box":{"x":116,"y":786,"width":741,"height":12}},{"id":"29a662af-9497-4a9b-ac54-abc73e8c8090","block_type":"box","text":"could lead to a categorization as an underwriter.","page_number":21,"box":{"x":116,"y":802,"width":356,"height":12}},{"id":"76dff4b6-3341-4f4a-868b-5213c3a30057","block_type":"box","text":"Broker-dealer firms should also note that dealers who are not “underwriters” but are effecting","page_number":21,"box":{"x":117,"y":831,"width":693,"height":12}},{"id":"83356882-1f09-446c-9ae0-4bddfefefa97","block_type":"box","text":"transactions in shares, whether or not participating in the distribution of shares, generally are required","page_number":21,"box":{"x":116,"y":846,"width":760,"height":12}},{"id":"47af0f74-717a-4b5b-9ebf-00b3ef25280a","block_type":"box","text":"to deliver a prospectus. This is because the prospectus delivery exemption in Section 4(a)(3) of the","page_number":21,"box":{"x":116,"y":862,"width":741,"height":12}},{"id":"3631e348-6dae-46a1-915f-ea3a418068f8","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":21,"box":{"x":118,"y":877,"width":745,"height":12}},{"id":"9bc48fcc-c6c4-4286-83fb-898f6a8627a5","block_type":"box","text":"12","page_number":21,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"620215ef-ad5c-4a6a-8e8c-c1d441fe6438","block_type":"box","text":"NM1026U-6004408-21/267","page_number":21,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f8612173-216c-4998-8da7-29049c2fa72c","block_type":"box","text":"Firms that incur a prospectus delivery obligation with respect to shares of the Fund are reminded that,","page_number":22,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"6967428c-75b1-415e-b146-27424f813c82","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":22,"box":{"x":117,"y":102,"width":762,"height":13}},{"id":"76206389-c3b3-47a4-8c69-4af79d005903","block_type":"box","text":"1933 Act owed to an exchange member in connection with a sale on the Listing Exchange generally is","page_number":22,"box":{"x":118,"y":118,"width":762,"height":12}},{"id":"649837a6-36fb-46b2-ac1b-55743d1c8ff3","block_type":"box","text":"satisfied by the fact that the prospectus is available at the Listing Exchange upon request. The","page_number":22,"box":{"x":116,"y":134,"width":705,"height":12}},{"id":"e79a0bee-aa27-477f-80c0-734694da63a3","block_type":"box","text":"prospectus delivery mechanism provided in Rule 153 is available only with respect to transactions on","page_number":22,"box":{"x":117,"y":149,"width":753,"height":12}},{"id":"990e78a9-849a-4975-9bcc-d05c518621a6","block_type":"box","text":"an exchange.","page_number":22,"box":{"x":116,"y":165,"width":105,"height":12}},{"id":"642a2476-2b67-4baa-b2a9-3afebeaec1c5","block_type":"box","text":"Management","page_number":22,"box":{"x":119,"y":216,"width":244,"height":29}},{"id":"9050253a-a435-4808-966e-92cecdddb33d","block_type":"box","text":"Trustees and Officers.","page_number":22,"box":{"x":116,"y":268,"width":182,"height":9}},{"id":"b826bc8a-29a9-45b5-92ec-6d1dd96a6daf","block_type":"box","text":"The Board of the Trust consists of fifteen Trustees, thirteen of whom are not","page_number":22,"box":{"x":299,"y":268,"width":569,"height":11}},{"id":"5ca38e5d-2f2e-4a3e-8880-4fbfafd7a2e9","block_type":"box","text":"“interested persons” of the Trust as defined in the 1940 Act (the “Independent Trustees”). The","page_number":22,"box":{"x":116,"y":283,"width":701,"height":12}},{"id":"4f83c28d-a7ac-4eb4-b251-b15fd4c11c04","block_type":"box","text":"registered investment companies advised by the Investment Adviser or its affiliates (the “BlackRock","page_number":22,"box":{"x":117,"y":299,"width":743,"height":12}},{"id":"4e8b0c60-dda6-407c-b17b-cdbbd4e5bec1","block_type":"box","text":"advised Funds”) are organized into the BlackRock Multi-Asset Complex, the BlackRock Fixed-Income","page_number":22,"box":{"x":116,"y":314,"width":759,"height":12}},{"id":"afd8dde4-4bf3-4153-bfb1-a7128441abc7","block_type":"box","text":"Complex, and the iShares Complex (each, a “BlackRock Fund Complex”). The Trust is included in the","page_number":22,"box":{"x":117,"y":330,"width":760,"height":12}},{"id":"3a2c081c-0a54-4650-a90d-209132766c4c","block_type":"box","text":"BlackRock Fund Complex referred to as the BlackRock Multi-Asset Complex. 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Mr. Perlowski","page_number":32,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"2112304d-b1f5-47ce-9cea-d063d4fc0484","block_type":"box","text":"also serves as a board member for the funds in the BlackRock Fixed-Income Complex. Mr. Perlowski","page_number":32,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"bfc8920f-faf9-430b-a100-d54f1a1148a1","block_type":"box","text":"is a member of BlackRock’s Global Executive Committee.","page_number":32,"box":{"x":117,"y":134,"width":433,"height":9}},{"id":"a4be2c5d-5a17-4b14-b8f9-88dec1775779","block_type":"box","text":"Independent Trustees","page_number":32,"box":{"x":117,"y":176,"width":178,"height":12}},{"id":"0e31de7d-f024-4ffb-b259-eeda98c5c317","block_type":"box","text":"Christopher Ailman has more than 30 years of experience in the financial services industry, including","page_number":32,"box":{"x":117,"y":201,"width":752,"height":12}},{"id":"0af52227-7b20-4616-8ac8-c199e31965dd","block_type":"box","text":"most recently serving as Chief Investment Officer of the California State Teachers Retirement System","page_number":32,"box":{"x":117,"y":216,"width":760,"height":12}},{"id":"54c18297-4842-466b-ab46-26ee619328ec","block_type":"box","text":"(CalSTRS) from 2000 to June 2024 where he led its investment program. Mr. Ailman currently is a","page_number":32,"box":{"x":117,"y":232,"width":733,"height":12}},{"id":"72d731c2-e0d4-481b-871e-b1de979401ec","block_type":"box","text":"principal at Ailman Advisers. In addition, he has held various roles in the industry, including as member","page_number":32,"box":{"x":117,"y":247,"width":768,"height":12}},{"id":"372fa67e-533b-4aeb-ae95-4967e23e2ec2","block_type":"box","text":"and chair of the asset owner committee of the Kroner Center for Financial Research, chairman of the","page_number":32,"box":{"x":116,"y":263,"width":754,"height":11}},{"id":"b4e5e764-6476-4469-a113-696f33eb0011","block_type":"box","text":"North American Chapter of the 300 Club of Global CIOs, and co-chair of the Milken Global Capital","page_number":32,"box":{"x":117,"y":278,"width":731,"height":12}},{"id":"a76bd456-b46b-465c-b492-f88dabbea281","block_type":"box","text":"Markets Advisory Council. These positions have provided Mr. Ailman with considerable investment","page_number":32,"box":{"x":117,"y":294,"width":737,"height":12}},{"id":"6a71ece2-18c8-48c3-9f4c-a6c16c414ce1","block_type":"box","text":"expertise across asset classes and strategies, and insight and perspective on the markets and the","page_number":32,"box":{"x":116,"y":309,"width":734,"height":12}},{"id":"e1625b62-720f-45c6-96d1-34689735b179","block_type":"box","text":"economy. In addition, Mr. Ailman serves as a member of the Governance and Nominating Committee","page_number":32,"box":{"x":116,"y":325,"width":759,"height":12}},{"id":"2aab20e9-59ca-4d89-b5fa-7b88e62e3a0d","block_type":"box","text":"and the Performance Oversight Committee.","page_number":32,"box":{"x":116,"y":340,"width":329,"height":12}},{"id":"f37815f0-2d65-49a2-859e-08d1ffc1e56e","block_type":"box","text":"Susan J. Carter has over 35 years of experience in investment management. She has served as","page_number":32,"box":{"x":116,"y":374,"width":721,"height":12}},{"id":"e8e070b3-4ff0-474f-bcc9-b40440758203","block_type":"box","text":"President & Chief Executive Officer of CCI, a registered investment adviser focused on non-profit","page_number":32,"box":{"x":117,"y":389,"width":725,"height":12}},{"id":"06559248-f43f-4c0f-a580-50a6ce79cd15","block_type":"box","text":"investors, from 1997 to 2013, Chief Executive Officer of CCI from 2013 to 2014 and Senior Advisor to","page_number":32,"box":{"x":117,"y":405,"width":757,"height":11}},{"id":"87e92cd4-9678-4d10-8f92-e0873ba6df2d","block_type":"box","text":"CCI in 2015. Ms. Carter also served as director of the Pacific Pension Institute from 2014 to 2018,","page_number":32,"box":{"x":117,"y":420,"width":731,"height":11}},{"id":"7a758c7d-e026-444b-ab2d-8da162deb777","block_type":"box","text":"trustee to the Financial Accounting Foundation from 2017 to 2021, Advisory Board Member for the","page_number":32,"box":{"x":116,"y":436,"width":735,"height":12}},{"id":"468a37f7-ba66-44e5-9482-186e439a6618","block_type":"box","text":"Center for Private Equity and Entrepreneurship at Tuck School of Business from 1997 to 2021,","page_number":32,"box":{"x":117,"y":451,"width":707,"height":12}},{"id":"18cc468d-a119-408f-bb82-d991a0c5da18","block_type":"box","text":"Advisory Board Member for Bridges Fund Management from 2016 to 2018, Advisory Board Member","page_number":32,"box":{"x":116,"y":467,"width":748,"height":12}},{"id":"62ef302a-b535-4466-a1f5-af881d9094a2","block_type":"box","text":"for Girls Who Invest from 2015 to 2018 and Board Member thereof from 2018 to 2022, and Practitioner","page_number":32,"box":{"x":116,"y":482,"width":768,"height":11}},{"id":"7a707b4e-9e44-49ea-85aa-6402f093b60c","block_type":"box","text":"Advisory Board Member for PCRI from 2017 to 2024. She currently serves as Member of the","page_number":32,"box":{"x":116,"y":498,"width":694,"height":12}},{"id":"35e33cf5-9612-466f-9b3f-d70125468868","block_type":"box","text":"President’s Counsel for Commonfund. These positions have provided her with insight and perspective","page_number":32,"box":{"x":117,"y":513,"width":761,"height":12}},{"id":"1cf2a860-2251-4455-a8e3-164cb93b3973","block_type":"box","text":"on the markets and the economy.","page_number":32,"box":{"x":116,"y":529,"width":254,"height":12}},{"id":"9044c163-f2ed-4320-b305-fe8aa7b5ab1a","block_type":"box","text":"Collette Chilton has over 20 years of experience in investment management. She held the position of","page_number":32,"box":{"x":117,"y":562,"width":754,"height":12}},{"id":"5914f97a-b287-40dc-b1e7-6e3167f3cc0b","block_type":"box","text":"Chief Investment Officer of Williams College from October 2006 to June 2023. Prior to that she was","page_number":32,"box":{"x":117,"y":578,"width":742,"height":12}},{"id":"63955946-231b-48ff-bf1c-7c8571c7cd40","block_type":"box","text":"President and Chief Investment Officer of Lucent Asset Management Corporation, where she oversaw","page_number":32,"box":{"x":117,"y":593,"width":763,"height":12}},{"id":"713cdffc-fab8-4591-8258-2332961041bb","block_type":"box","text":"approximately $40 billion in pension and retirement savings assets for the company. These positions","page_number":32,"box":{"x":116,"y":608,"width":752,"height":13}},{"id":"3424c7e1-f24c-4962-aa91-fafcca58423e","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy.","page_number":32,"box":{"x":117,"y":624,"width":604,"height":12}},{"id":"f7e8de60-2a62-48c0-95f8-2e084dc07b01","block_type":"box","text":"Neil A. Cotty has more than 30 years of experience in the financial services industry, including","page_number":32,"box":{"x":117,"y":658,"width":702,"height":12}},{"id":"c0ef8517-f0d6-43ed-add7-faff35a7cd41","block_type":"box","text":"19 years at Bank of America Corporation and its affiliates, where he served, at different times, as the","page_number":32,"box":{"x":118,"y":673,"width":745,"height":12}},{"id":"cf8642b4-060f-4ce3-a336-baf1284b3780","block_type":"box","text":"Chief Financial Officer of various businesses including Investment Banking, Global Markets, Wealth","page_number":32,"box":{"x":117,"y":689,"width":737,"height":12}},{"id":"96d143dd-469a-4e0a-b4de-4aaefe7d5fcc","block_type":"box","text":"Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of","page_number":32,"box":{"x":117,"y":704,"width":733,"height":12}},{"id":"f15ce8d3-b791-4e79-ab6c-d52c5c7fd0cf","block_type":"box","text":"America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee","page_number":32,"box":{"x":116,"y":720,"width":763,"height":12}},{"id":"b11a3d20-b403-46dd-9a74-0a974819ef58","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":32,"box":{"x":116,"y":735,"width":563,"height":12}},{"id":"9c4dd3d8-2833-4710-9978-bfc816ecb42e","block_type":"box","text":"Jeffrey Jarczyk is a CPA and has more than 30 years of experience in the financial services industry,","page_number":32,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"2bbdca97-650c-4a84-91f4-87784bec6f92","block_type":"box","text":"including over 19 years at Fidelity Investments, where he served, at different times, as the Chief","page_number":32,"box":{"x":117,"y":784,"width":712,"height":12}},{"id":"da7a2114-1b63-4528-9dba-1d63482079cd","block_type":"box","text":"Auditor and the Chief Accounting Officer of Fidelity Investments’ parent company, FMR LLC. Prior to","page_number":32,"box":{"x":116,"y":800,"width":746,"height":12}},{"id":"13dc1567-45e7-49c3-9360-cdde044ed986","block_type":"box","text":"working at Fidelity, Mr. Jarczyk was a partner at Deloitte and Arthur Andersen for approximately","page_number":32,"box":{"x":116,"y":815,"width":711,"height":12}},{"id":"5996870b-8a2c-46e9-8b05-8bbc844ffa21","block_type":"box","text":"seventeen years. These positions have allowed him to work extensively with audit and risk committees","page_number":32,"box":{"x":116,"y":831,"width":767,"height":12}},{"id":"06266379-e0bc-4c58-bdc2-732b99ed13b0","block_type":"box","text":"and company executives helping to identify, manage and mitigate risks for financial services","page_number":32,"box":{"x":116,"y":846,"width":688,"height":12}},{"id":"231a8a18-8d2a-43c5-8655-4df9c4d1cb38","block_type":"box","text":"companies. Mr. Jarczyk also served as consultant to the Independent Trustees prior to becoming an","page_number":32,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"fba5c155-b111-48d2-b5b3-0b8a525fd2d9","block_type":"box","text":"Independent Trustee.","page_number":32,"box":{"x":117,"y":877,"width":163,"height":12}},{"id":"486b9082-7ef5-4c27-8e06-724410b01ac1","block_type":"box","text":"23","page_number":32,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"35ce2ee6-f949-445a-91c3-f88d23af0640","block_type":"box","text":"NM1026U-6004408-32/267","page_number":32,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7ff47f6d-9516-48da-b6de-55cfef511e99","block_type":"box","text":"Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise","page_number":33,"box":{"x":117,"y":87,"width":766,"height":12}},{"id":"392687d1-10df-4217-974e-5e04fe74bf56","block_type":"box","text":"gained through his 35 year career at KPMG, a global professional services organization and by his","page_number":33,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"e85a5ab8-d1d0-4b33-9ab1-69685e7368d0","block_type":"box","text":"service as a director to both publicly and privately held organizations. He has extensive experience","page_number":33,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"5959d447-bb20-40d6-a23c-3f9a6a480ff8","block_type":"box","text":"with issues facing complex, global companies and expertise in financial reporting, accounting, auditing,","page_number":33,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"e3cbe052-fc07-4bfa-9166-df2069c9a07f","block_type":"box","text":"risk management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes","page_number":33,"box":{"x":117,"y":149,"width":738,"height":12}},{"id":"c230be59-6402-4255-a665-a8832e90cd30","block_type":"box","text":"service as an audit committee chair to both publicly and privately held organizations across numerous","page_number":33,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"5cded04a-fa0d-4980-9d0e-e978b78f7f45","block_type":"box","text":"industries including professional services, property and casualty reinsurance, insurance, diversified","page_number":33,"box":{"x":117,"y":180,"width":739,"height":12}},{"id":"42b590bd-02fe-4d22-895d-10c99469af8f","block_type":"box","text":"financial services, banking, direct to consumer, business to business and technology. Mr. Keizer is a","page_number":33,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"f4d96383-3e88-490e-84df-c04e89329a17","block_type":"box","text":"certified public accountant and also served on the board of the American Institute of Certified Public","page_number":33,"box":{"x":116,"y":211,"width":745,"height":12}},{"id":"8c3dedbe-ca3e-404c-8904-3a9d4c0bc409","block_type":"box","text":"Accountants. Mr. Keizer has been determined by the Audit Committee to be an audit committee","page_number":33,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"1dbf2a29-3bd0-46f2-baea-8e306195e4a5","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":33,"box":{"x":116,"y":242,"width":569,"height":12}},{"id":"33d1e1a2-89ae-4160-925f-f5539240c992","block_type":"box","text":"Cynthia A. Montgomery has served for over 20 years on the boards of registered investment","page_number":33,"box":{"x":117,"y":269,"width":690,"height":12}},{"id":"7e606970-820a-403e-8afc-e8938e12c038","block_type":"box","text":"companies, most recently as a member of the boards of certain BlackRock-advised Funds and","page_number":33,"box":{"x":116,"y":285,"width":707,"height":12}},{"id":"2388671b-3693-4b1d-9ae6-a6cd5522c556","block_type":"box","text":"predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. The","page_number":33,"box":{"x":117,"y":300,"width":759,"height":12}},{"id":"2bd4ab16-1036-435d-a95e-77022050ce77","block_type":"box","text":"Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at","page_number":33,"box":{"x":117,"y":316,"width":755,"height":12}},{"id":"1a15e975-821a-41cc-9554-e76c4566efdf","block_type":"box","text":"Harvard Business School where she taught courses on corporate strategy and corporate governance.","page_number":33,"box":{"x":117,"y":331,"width":759,"height":12}},{"id":"f7df9883-35b0-4ea4-821f-ebe55b90193e","block_type":"box","text":"Ms. Montgomery also has business management and corporate governance experience through her","page_number":33,"box":{"x":117,"y":347,"width":749,"height":12}},{"id":"e6d3ae04-164b-4ff1-b04d-0c269f87371d","block_type":"box","text":"service on the corporate boards of a variety of public companies. She has also authored numerous","page_number":33,"box":{"x":116,"y":362,"width":739,"height":12}},{"id":"88862b1e-1503-4ff1-be6c-996bc48a1ad6","block_type":"box","text":"articles and books on these topics.","page_number":33,"box":{"x":116,"y":378,"width":263,"height":12}},{"id":"766ac920-2a0e-4a8e-9062-867f2bc711c1","block_type":"box","text":"Donald C. Opatrny has more than 40 years of business, oversight and executive experience, including","page_number":33,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"014de4d3-9dd5-440a-a4da-168aa619c00e","block_type":"box","text":"through his service as president, director and investment committee chair for academic and","page_number":33,"box":{"x":116,"y":420,"width":684,"height":12}},{"id":"e68e691d-f928-43b7-bb32-5044e6860f47","block_type":"box","text":"not-for-profit organizations, and his experience as a partner, managing director and advisory director at","page_number":33,"box":{"x":117,"y":436,"width":769,"height":12}},{"id":"deb72eb0-a046-4988-878e-407c90757432","block_type":"box","text":"Goldman Sachs for 32 years. He also has investment management experience as a board member of","page_number":33,"box":{"x":117,"y":451,"width":760,"height":12}},{"id":"2b0da153-5235-46d3-85e7-ef95838cad49","block_type":"box","text":"Athena Capital Advisors LLC.","page_number":33,"box":{"x":116,"y":467,"width":224,"height":12}},{"id":"2567b784-f8c3-46b2-9bf0-b4c1535560e0","block_type":"box","text":"Lori Richards has more than 30 years of experience in the financial services industry, most notably as","page_number":33,"box":{"x":117,"y":494,"width":759,"height":12}},{"id":"20f48222-993a-4697-896d-19960bdc23cc","block_type":"box","text":"the first Director of the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities","page_number":33,"box":{"x":116,"y":509,"width":753,"height":13}},{"id":"1c748853-6aa2-4f68-980e-5d6dc0fa0c68","block_type":"box","text":"and Exchange Commission (“SEC”) from 1995 to 2009. During 14 years as the Director of OCIE, she","page_number":33,"box":{"x":116,"y":525,"width":756,"height":12}},{"id":"76637ed6-15f1-4809-b017-77a9a0ab5e9a","block_type":"box","text":"led the SEC’s nationwide examination oversight program for advisers, mutual funds, hedge funds,","page_number":33,"box":{"x":117,"y":540,"width":730,"height":13}},{"id":"47e05b2e-1a33-4280-9840-e572b59ce940","block_type":"box","text":"broker-dealers, stock exchanges, and other industry firms. Prior to that, from 1985 to 1995, she held","page_number":33,"box":{"x":117,"y":556,"width":748,"height":12}},{"id":"14b0680b-8e66-473b-9127-a55b941bd922","block_type":"box","text":"various roles at the SEC, including Associate Director for Enforcement for the SEC’s Pacific Regional","page_number":33,"box":{"x":116,"y":571,"width":757,"height":13}},{"id":"b5168223-7604-4ce9-93a4-791f8c5863ff","block_type":"box","text":"Office and executive assistant and senior advisor to then SEC Chairman Arthur Levitt. More recently,","page_number":33,"box":{"x":116,"y":587,"width":755,"height":12}},{"id":"c66bc5ce-6bc5-4254-a7b3-564cdb67d60e","block_type":"box","text":"Ms. Richards served as Chief Compliance Officer of the Asset and Wealth Management global lines of","page_number":33,"box":{"x":117,"y":602,"width":765,"height":13}},{"id":"14764949-6c7a-4848-aefc-2ba3991fff00","block_type":"box","text":"business at JPMorgan Chase & Co. from 2013 to 2018 where she led its global compliance program,","page_number":33,"box":{"x":117,"y":618,"width":754,"height":12}},{"id":"42c840db-1c76-4b1b-a4b5-23e1853d4ba6","block_type":"box","text":"advised business leaders on compliance issues, oversaw risk assessment, monitoring, testing and","page_number":33,"box":{"x":116,"y":634,"width":736,"height":12}},{"id":"83c57a02-b4e9-4dc2-9bf2-4f2cc5846979","block_type":"box","text":"training, and maintained relationships with regulators. In addition, Ms. Richards served as a member of","page_number":33,"box":{"x":116,"y":649,"width":769,"height":12}},{"id":"efb6c87e-92dc-40de-af27-5c8909b2ff73","block_type":"box","text":"the National Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA) from 2019 to","page_number":33,"box":{"x":116,"y":665,"width":753,"height":12}},{"id":"9cf27f7b-89c7-496c-8ff6-79e649fe2c20","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":33,"box":{"x":116,"y":680,"width":746,"height":12}},{"id":"96d1941a-80c0-4152-a540-752927aeb514","block_type":"box","text":"was a Principal at PricewaterhouseCoopers LLP (“PwC”) and co-leader of its Asset Management","page_number":33,"box":{"x":116,"y":696,"width":720,"height":12}},{"id":"7d4a5fbe-ed09-4e5c-8221-b715cb747e4a","block_type":"box","text":"Regulatory group. At PwC, she assisted a broad range of financial services clients in designing and","page_number":33,"box":{"x":117,"y":711,"width":736,"height":12}},{"id":"62847cb5-6227-4966-a84f-cf43c64511b5","block_type":"box","text":"implementing risk management and compliance programs, and preparing for new regulatory","page_number":33,"box":{"x":117,"y":727,"width":683,"height":12}},{"id":"ce3296a2-8f95-4aaa-b7cd-34c019d77039","block_type":"box","text":"expectations. These positions have provided her with insight and perspective on the markets and the","page_number":33,"box":{"x":116,"y":742,"width":749,"height":12}},{"id":"0adb245e-3b69-489f-9d4e-7f2041fc5950","block_type":"box","text":"economy, as well as asset management regulation and compliance. In addition, Ms. Richards serves","page_number":33,"box":{"x":116,"y":758,"width":748,"height":12}},{"id":"86a5ddf7-5649-4f7c-be9d-9e6f5e70e616","block_type":"box","text":"as a member of the Audit Committee and the Compliance Committee.","page_number":33,"box":{"x":116,"y":773,"width":518,"height":12}},{"id":"d9819d5b-00c8-41de-a23f-4be21d438b89","block_type":"box","text":"Mark Stalnecker has gained a wealth of experience in investing and asset management from his over","page_number":33,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"df835b28-9609-4135-b621-708aef3a3fda","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":33,"box":{"x":118,"y":816,"width":737,"height":12}},{"id":"2848060c-ea5b-414d-9082-1d02b7af1a26","block_type":"box","text":"various positions with First Union Corporation, including Senior Vice President and State Investment","page_number":33,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"d4d99dcf-94bf-468d-b739-e2bea1b2da45","block_type":"box","text":"Director of First Investment Advisors. The Board benefits from his experience and perspective as the","page_number":33,"box":{"x":117,"y":847,"width":752,"height":12}},{"id":"b012aaa1-e156-4fc1-8783-45d299452a73","block_type":"box","text":"Chief Investment Officer of a university endowment and from the oversight experience he gained from","page_number":33,"box":{"x":117,"y":862,"width":761,"height":12}},{"id":"8b64ab1a-e295-4fd9-81dc-64c5b5e9e78a","block_type":"box","text":"service on various private and non-profit boards.","page_number":33,"box":{"x":116,"y":878,"width":365,"height":12}},{"id":"96d3bd0c-fcf5-47a1-83bd-500cd11638d2","block_type":"box","text":"24","page_number":33,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"bdafdb42-0104-4803-ace4-e7f05b649057","block_type":"box","text":"NM1026U-6004408-33/267","page_number":33,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"063b649a-c455-4fb4-a4f8-d5954a0076e8","block_type":"box","text":"Marc D. Stern has more than 30 years of experience in investing and asset management. Mr. Stern","page_number":34,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"680f3adf-f35f-477f-be9f-a6e6661899d5","block_type":"box","text":"served as the Chief Executive Officer at Bessemer Trust, a wealth management business, for","page_number":34,"box":{"x":116,"y":102,"width":699,"height":13}},{"id":"0c864972-a686-419c-95ee-6294003e571a","block_type":"box","text":"13 years. During his tenure at Bessemer Trust, Mr. Stern served on the firm’s board of directors,","page_number":34,"box":{"x":118,"y":118,"width":718,"height":12}},{"id":"d5ea0226-29c8-4c54-bb4e-01fea7d1f38d","block_type":"box","text":"chaired the board’s trust and investment committee, and led the firm’s executive committee. He also","page_number":34,"box":{"x":116,"y":134,"width":749,"height":11}},{"id":"de206a45-e95e-4636-a0f5-d2657b6f3691","block_type":"box","text":"served as Bessemer’s Chief Investment Officer for 8 years, where he was Chair of the Investment","page_number":34,"box":{"x":116,"y":149,"width":732,"height":12}},{"id":"68417f59-14bc-4ace-940b-59fcf0b3fee5","block_type":"box","text":"Policy and Strategy Committee with responsibility for overall asset allocation and investment strategy.","page_number":34,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"329ad140-c316-422e-b875-ec784f15f58b","block_type":"box","text":"Mr. Stern also served as Chair of the Private Clients Investment group at AllianceBernstein. These","page_number":34,"box":{"x":117,"y":180,"width":735,"height":12}},{"id":"47bfda50-bb9a-403d-af37-021ec881d74c","block_type":"box","text":"positions provide Mr. Stern with insight and perspective into investment management, the economy,","page_number":34,"box":{"x":117,"y":196,"width":746,"height":12}},{"id":"de39d519-8a02-4ee3-9438-d9ad5844656e","block_type":"box","text":"and fiduciary governance. Mr. Stern also served as consultant to the Independent Trustees prior to","page_number":34,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"927211aa-5342-4f49-9f56-9761746bb30b","block_type":"box","text":"becoming an Independent Trustee.","page_number":34,"box":{"x":117,"y":227,"width":264,"height":12}},{"id":"9c1ff8a0-e784-4937-9215-37ddf1203ac7","block_type":"box","text":"Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most","page_number":34,"box":{"x":117,"y":258,"width":771,"height":12}},{"id":"858d6f22-c0c4-4e6e-b43f-95631e758681","block_type":"box","text":"recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds,","page_number":34,"box":{"x":117,"y":273,"width":722,"height":12}},{"id":"08ad56ce-9f04-4cc1-bc7e-a54ccac80185","block_type":"box","text":"including the legacy BlackRock funds. He has over 30 years of experience in public accounting.","page_number":34,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"52a346e6-861d-443f-83ab-5a1f8f4aeb17","block_type":"box","text":"Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been","page_number":34,"box":{"x":117,"y":304,"width":766,"height":12}},{"id":"0d48f57b-d529-494b-9a79-b2f303595f8e","block_type":"box","text":"determined by the Audit Committee to be an audit committee financial expert, as such term is defined","page_number":34,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"30d41760-f342-4d05-a57f-9a2b3f845822","block_type":"box","text":"in the applicable Commission rules.","page_number":34,"box":{"x":117,"y":335,"width":268,"height":12}},{"id":"68ade147-1f16-4c63-9d6f-ba432899b60f","block_type":"box","text":"Claire A. Walton has over 25 years of experience in investment management. She has served as the","page_number":34,"box":{"x":117,"y":366,"width":753,"height":12}},{"id":"9408f367-5739-4599-8319-fa64a761aa0f","block_type":"box","text":"Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP / Steel","page_number":34,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"36e967a1-3fc2-452b-94ff-b3c02981aaa1","block_type":"box","text":"Partners Japan Asset Management, LP from 1998 to 2015, an investment manager that specialized in","page_number":34,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"fde22299-3bc9-4cc3-9464-3797f18ec285","block_type":"box","text":"long/short non-U.S. equity investments, and was an owner and General Partner of Neon Liberty","page_number":34,"box":{"x":117,"y":413,"width":715,"height":12}},{"id":"134428b9-bf96-448b-8ad3-ea0d3e815a06","block_type":"box","text":"Capital Management, LLC from 2003 to 2023, a firm focusing on long/short equities in global emerging","page_number":34,"box":{"x":117,"y":428,"width":766,"height":12}},{"id":"baaf2527-2608-4b90-8094-46050b154d56","block_type":"box","text":"and frontier markets. These positions have provided her with insight and perspective on the markets","page_number":34,"box":{"x":116,"y":444,"width":748,"height":12}},{"id":"fbebd2db-c929-4232-add9-7c7bbc994dcd","block_type":"box","text":"and the economy. Ms. Walton has been determined by the Audit Committee to be an audit committee","page_number":34,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"cbe01cf4-794d-4617-b150-e701d094e197","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":34,"box":{"x":116,"y":475,"width":569,"height":12}},{"id":"ac1f695a-5d63-4bc9-a0c0-099ba57fbca6","block_type":"box","text":"Board – Leadership Structure and Oversight Responsibilities","page_number":34,"box":{"x":117,"y":506,"width":454,"height":12}},{"id":"8395af78-e19d-4d99-994c-e4fbb9968510","block_type":"box","text":"The Board has overall responsibility for the oversight","page_number":34,"box":{"x":116,"y":529,"width":387,"height":12}},{"id":"a3f010b4-3963-4608-b36a-1cf5382fa2a4","block_type":"box","text":"of the Trust and the Fund. The Chair of the Board is","page_number":34,"box":{"x":504,"y":529,"width":381,"height":9}},{"id":"fe0fc989-e313-414c-8b2a-09ce34c12b1c","block_type":"box","text":"an Independent Trustee, and the Chair of each Co","page_number":34,"box":{"x":116,"y":544,"width":367,"height":12}},{"id":"0a2ff804-37b7-453a-ae90-0bd62ee80219","block_type":"box","text":"mmittee is an Independent Trustee. The Board has","page_number":34,"box":{"x":484,"y":545,"width":375,"height":11}},{"id":"5b274011-8f8d-48fa-b8f2-7cc83bc3877a","block_type":"box","text":"five standing Committees: an Audit Committee, a Go","page_number":34,"box":{"x":116,"y":560,"width":383,"height":12}},{"id":"d05be3fe-7246-4af5-b504-8aac190164be","block_type":"box","text":"vernance and Nominating Committee, a Compliance","page_number":34,"box":{"x":500,"y":560,"width":386,"height":12}},{"id":"3972f3d2-c779-46b9-9176-efd7b25d4458","block_type":"box","text":"Committee, a Performance Oversight Committee and an A","page_number":34,"box":{"x":117,"y":575,"width":415,"height":12}},{"id":"982f1bbe-6973-4b50-a47f-0f25f25c5c08","block_type":"box","text":"Ad Hoc Topics Committee. The role of the Chair","page_number":34,"box":{"x":532,"y":575,"width":355,"height":12}},{"id":"493d6ee8-066e-411c-9b51-28ce2fa03d29","block_type":"box","text":"of the Board is to preside at all meetings of t","page_number":34,"box":{"x":116,"y":591,"width":320,"height":12}},{"id":"fcbce27e-f308-4c54-a007-935e45b17a15","block_type":"box","text":"he Board and to act as a liaison with service providers,","page_number":34,"box":{"x":437,"y":591,"width":402,"height":12}},{"id":"daf70e60-64ab-430c-ab1c-7d86ff5e4d15","block_type":"box","text":"officers, attorneys and other Trustees generally","page_number":34,"box":{"x":116,"y":606,"width":344,"height":12}},{"id":"799ae44a-dc6d-464d-b4f8-cdeba12b4e90","block_type":"box","text":"y between meetings. The Chair of each Committee","page_number":34,"box":{"x":460,"y":606,"width":367,"height":12}},{"id":"cae29388-c646-4fb5-8ed3-bf88e444ef5f","block_type":"box","text":"performs a similar role with respect to the Commi","page_number":34,"box":{"x":117,"y":622,"width":356,"height":12}},{"id":"2752bc67-14eb-4b89-9f18-27c8d186ba85","block_type":"box","text":"ttee. The Chair of the Board or the Chair of a","page_number":34,"box":{"x":474,"y":622,"width":330,"height":9}},{"id":"e9e1f85a-fd4b-4c07-946f-8e188b5a9da3","block_type":"box","text":"Committee may also perform such other functions","page_number":34,"box":{"x":117,"y":637,"width":367,"height":12}},{"id":"b57ed370-075b-433b-b56a-2110aa473f64","block_type":"box","text":"as may be delegated by the Board or the Committee","page_number":34,"box":{"x":485,"y":637,"width":386,"height":12}},{"id":"122bdd4d-5bd2-4da2-8e46-44e6bc0a274c","block_type":"box","text":"from time to time. The Independent Trustees meet","page_number":34,"box":{"x":116,"y":653,"width":371,"height":12}},{"id":"213ac258-9bc6-49a8-ba22-5854cf175230","block_type":"box","text":"regularly outside the presence of Fund management,","page_number":34,"box":{"x":488,"y":653,"width":390,"height":12}},{"id":"236e2b77-f4ff-444a-ae24-6b80de52d8d6","block_type":"box","text":"in executive session or with other service provider","page_number":34,"box":{"x":117,"y":669,"width":362,"height":11}},{"id":"d903c7f0-626d-4128-b9c1-b747d34b7731","block_type":"box","text":"s to the Fund. The Board has regular meetings five","page_number":34,"box":{"x":479,"y":668,"width":370,"height":12}},{"id":"aaa7a843-95dd-46f0-9824-d4177261f94e","block_type":"box","text":"times a year, and may hold special meetings if requi","page_number":34,"box":{"x":116,"y":684,"width":377,"height":12}},{"id":"27db22de-714a-4e97-a15c-bb6ad445062e","block_type":"box","text":"red before its next regular meeting. Each Committee","page_number":34,"box":{"x":495,"y":684,"width":381,"height":12}},{"id":"581b6100-c9d6-46e4-bd2b-0459f2cf8cfd","block_type":"box","text":"meets regularly to conduct the oversight functions","page_number":34,"box":{"x":117,"y":699,"width":360,"height":13}},{"id":"b95f6251-1304-427d-8896-5c692302e77e","block_type":"box","text":"delegated to that Committee by the Board and reports","page_number":34,"box":{"x":483,"y":699,"width":392,"height":13}},{"id":"5e6136b8-825d-4ab6-9fa3-70c77429c084","block_type":"box","text":"its findings to the Board. The Board and each st","page_number":34,"box":{"x":117,"y":715,"width":346,"height":12}},{"id":"885781ea-35a6-4a5f-9052-ac329f41e204","block_type":"box","text":"anding Committee conduct annual assessments of their","page_number":34,"box":{"x":464,"y":715,"width":405,"height":12}},{"id":"e1edbfb2-b979-4f2e-9ffb-0100584ab75a","block_type":"box","text":"oversight function and structure. The Board has dete","page_number":34,"box":{"x":116,"y":730,"width":383,"height":13}},{"id":"81f0cf8b-116d-418d-add1-6ded94f427c6","block_type":"box","text":"rmined that the Board’s leadership structure is","page_number":34,"box":{"x":500,"y":731,"width":334,"height":11}},{"id":"82608679-08a1-400a-900d-70f59a6385f0","block_type":"box","text":"appropriate because it allows the Board to ex","page_number":34,"box":{"x":116,"y":746,"width":329,"height":12}},{"id":"350f08d2-1b12-429e-babf-d11fd2621f82","block_type":"box","text":"ercise independent judgment over management and to","page_number":34,"box":{"x":446,"y":746,"width":398,"height":12}},{"id":"cc527027-8cc6-43d6-8a2b-1d99f3eda8e2","block_type":"box","text":"allocate areas of responsibility among Committees","page_number":34,"box":{"x":116,"y":761,"width":367,"height":13}},{"id":"acf6b745-cc26-49e4-a2e9-e3d19de4fac9","block_type":"box","text":"and the full Board to enhance effective oversight.","page_number":34,"box":{"x":489,"y":761,"width":354,"height":13}},{"id":"d9faee69-9d6c-4587-bf97-319d3d78edf1","block_type":"box","text":"The Board has engaged the Investment Adviser to","page_number":34,"box":{"x":116,"y":793,"width":367,"height":12}},{"id":"8f31ead4-e02e-40a3-ad8f-b1f5d9a7d969","block_type":"box","text":"manage the Fund on a day-to-day basis. The Board is","page_number":34,"box":{"x":489,"y":793,"width":392,"height":12}},{"id":"41a4ca04-f10f-4ec0-b1a2-b465d49c082f","block_type":"box","text":"responsible for overseeing the Investment Adviser,","page_number":34,"box":{"x":117,"y":808,"width":367,"height":12}},{"id":"ab2d3f44-39dd-47ac-9195-a4df6e5989f3","block_type":"box","text":"other service providers,","page_number":34,"box":{"x":490,"y":808,"width":170,"height":12}},{"id":"b7d8e8cc-5f16-4f49-bb70-2d713869a9ef","block_type":"box","text":"the operations of the Fund","page_number":34,"box":{"x":666,"y":808,"width":191,"height":12}},{"id":"0e3ee5d7-4efe-4fbe-8e2b-ce043ffb284a","block_type":"box","text":"and associated risks in accordance with the provisions","page_number":34,"box":{"x":116,"y":824,"width":395,"height":11}},{"id":"167fc2e3-b1b2-4ab1-9e59-67f647c8bfce","block_type":"box","text":"of the 1940 Act, state law, other applicable laws,","page_number":34,"box":{"x":517,"y":823,"width":350,"height":12}},{"id":"90955929-72cf-4468-9813-704a388404cb","block_type":"box","text":"the Trust’s charter, and the Fund’s investment objective and strategies. The Board reviews, on an","page_number":34,"box":{"x":116,"y":839,"width":713,"height":12}},{"id":"5f933250-a72c-41f1-9a59-4c26847a362f","block_type":"box","text":"ongoing basis, the Fund’s performance, operations and in","page_number":34,"box":{"x":116,"y":854,"width":419,"height":13}},{"id":"d94945bc-2ff1-4c4d-8e0c-97886ee5fd45","block_type":"box","text":"vestment strategies and techniques. The Board","page_number":34,"box":{"x":536,"y":855,"width":350,"height":12}},{"id":"a13b1420-066d-49cb-94aa-1f17e236196e","block_type":"box","text":"also conducts reviews of the Investment Adviser","page_number":34,"box":{"x":116,"y":870,"width":356,"height":9}},{"id":"d7734af6-6d99-4de2-9704-da76a94947e4","block_type":"box","text":"and its role in running the operations of the Fund.","page_number":34,"box":{"x":472,"y":870,"width":363,"height":12}},{"id":"6a059449-ff23-49bd-8b6d-3f0a5e625cd5","block_type":"box","text":"25","page_number":34,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"558b3de0-499f-4013-9142-ce0c8384ab99","block_type":"box","text":"NM1026U-6004408-34/267","page_number":34,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"469853bc-ab07-4bfe-8dc4-462f0000ec78","block_type":"box","text":"Day-to-day risk management with respect to the Fund is the responsibility of the Investment Adviser or","page_number":35,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"b3c5532d-d7f8-4803-9a33-7d751aa7a3f0","block_type":"box","text":"of sub-advisers or other service providers (depending on the nature of the risk), subject to the","page_number":35,"box":{"x":116,"y":102,"width":699,"height":13}},{"id":"356f47df-ce6f-4927-91ab-88df71d8312b","block_type":"box","text":"supervision of the Investment Adviser. The Fund is subject to a number of risks, including investment,","page_number":35,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"7f97fc8f-6eea-4823-b830-1468d5485ddb","block_type":"box","text":"compliance, operational and valuation risks, among others. While there are a number of risk","page_number":35,"box":{"x":116,"y":134,"width":687,"height":12}},{"id":"32fe0dc0-de40-4008-a582-f5a2908117a8","block_type":"box","text":"management functions performed by the Investment Adviser and the sub-advisers or other service","page_number":35,"box":{"x":117,"y":149,"width":735,"height":12}},{"id":"c8a1ac30-550f-4677-b52b-e86f6511d959","block_type":"box","text":"providers, as applicable, it is not possible to eliminate all of the risks applicable to the Fund. Risk","page_number":35,"box":{"x":117,"y":165,"width":720,"height":11}},{"id":"d09a3c83-2823-46d6-8521-6faf7013c6b3","block_type":"box","text":"oversight forms part of the Board’s general oversight of the Fund and is addressed as part of various","page_number":35,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"a24ccbf7-ae08-4f8d-a386-393f9e0c912e","block_type":"box","text":"Board and Committee activities. The Board, directly or through a Committee, also reviews reports from,","page_number":35,"box":{"x":117,"y":196,"width":771,"height":12}},{"id":"14bf0e0e-1bd4-44c0-a8fe-bd480aa7712f","block_type":"box","text":"among others, management, the independent registered public accounting firm for the Fund,","page_number":35,"box":{"x":116,"y":211,"width":692,"height":12}},{"id":"d5f5c064-8d84-42d1-8e15-94c0e35fe4d8","block_type":"box","text":"sub-advisers and internal auditors for the investment adviser or its affiliates, as appropriate, regarding","page_number":35,"box":{"x":116,"y":227,"width":760,"height":12}},{"id":"8650adf5-5a1c-4d08-92a3-b6b0500ba3eb","block_type":"box","text":"risks faced by the Fund and management’s or the service provider’s risk functions. The Committee","page_number":35,"box":{"x":117,"y":242,"width":736,"height":12}},{"id":"ec219d51-943f-44b7-8464-a3e4c48d1fa5","block_type":"box","text":"system facilitates the timely and efficient consideration of matters by the Trustees, and facilitates","page_number":35,"box":{"x":116,"y":258,"width":722,"height":12}},{"id":"4998e499-b5c8-49a0-bdd6-2b6f12a11219","block_type":"box","text":"effective oversight of compliance with legal and regulatory requirements and of the Fund’s activities","page_number":35,"box":{"x":116,"y":273,"width":743,"height":12}},{"id":"910b688e-743c-4ece-af70-ca3a05bfc050","block_type":"box","text":"and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the","page_number":35,"box":{"x":116,"y":289,"width":702,"height":12}},{"id":"7ef37dfc-515a-490b-8fb7-c6943b428a71","block_type":"box","text":"implementation and testing of the Trust’s compliance program and reports to the Board regarding","page_number":35,"box":{"x":117,"y":304,"width":726,"height":12}},{"id":"932fc44e-e96c-44bd-b3f6-e221f7f0361c","block_type":"box","text":"compliance matters for the Fund and its service providers. The Independent Trustees have engaged","page_number":35,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"089d4d5e-fc44-48a1-9766-80672b05cc8c","block_type":"box","text":"independent legal counsel to assist them in performing their oversight responsibilities.","page_number":35,"box":{"x":117,"y":335,"width":640,"height":12}},{"id":"45e5783c-7d0d-4344-9296-2246d7c65313","block_type":"box","text":"Committees of the Board of Trustees.","page_number":35,"box":{"x":116,"y":366,"width":299,"height":10}},{"id":"1c369383-60bd-4246-85bd-98ccf3e03bdb","block_type":"box","text":"The members of the Audit Committee (the “Audit Committee”)","page_number":35,"box":{"x":416,"y":366,"width":469,"height":12}},{"id":"1e97d6a2-5519-415c-a386-41c0c16fada0","block_type":"box","text":"are Henry R. Keizer (Chair), Neil A. Cotty, Jeffrey Jarczyk, Lori Richards, Kenneth L. Urish and Claire","page_number":35,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"a1deb976-2c47-4403-a573-ec79c31fcbc7","block_type":"box","text":"A. Walton, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee","page_number":35,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"cd550adf-35a0-4e09-9848-34c272254acb","block_type":"box","text":"are to approve, and recommend to the full Board for approval, the selection, retention, termination and","page_number":35,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"e0c08f72-9716-4226-8e4e-24641a086f1b","block_type":"box","text":"compensation of the Fund’s independent registered public accounting firm (the “Independent","page_number":35,"box":{"x":116,"y":428,"width":693,"height":12}},{"id":"1a97518c-6c85-4423-9b4c-589ac5ced66b","block_type":"box","text":"Registered Public Accounting Firm”) and to oversee the Independent Registered Public Accounting","page_number":35,"box":{"x":117,"y":444,"width":739,"height":12}},{"id":"a7c1fe99-300a-45b5-aadb-92dc259c12d8","block_type":"box","text":"Firm’s work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the","page_number":35,"box":{"x":117,"y":459,"width":721,"height":12}},{"id":"f549d41a-dad9-46c2-9571-9dfd8affd711","block_type":"box","text":"qualifications and independence of the Independent Registered Public Accounting Firm; (2) approve all","page_number":35,"box":{"x":116,"y":475,"width":769,"height":12}},{"id":"c63af1cf-a95f-4fbd-b044-41b26d24ce4a","block_type":"box","text":"audit engagement terms and fees for the Fund; (3) review the conduct and results of each independent","page_number":35,"box":{"x":116,"y":490,"width":770,"height":12}},{"id":"91413e3d-5bcf-4de2-b312-0e8847bc7167","block_type":"box","text":"audit of the Fund’s annual financial statements; (4) review any issues raised by the Independent","page_number":35,"box":{"x":116,"y":506,"width":718,"height":12}},{"id":"57673c26-bc0a-47ec-9e00-6cf270b24076","block_type":"box","text":"Registered Public Accounting Firm or Fund management regarding the accounting or financial","page_number":35,"box":{"x":117,"y":521,"width":703,"height":12}},{"id":"2e115b53-f61c-4e69-aef2-7f50c4bd7dae","block_type":"box","text":"reporting policies and practices of the Fund and the internal controls of the Fund and certain service","page_number":35,"box":{"x":117,"y":537,"width":745,"height":12}},{"id":"2313f393-d135-4f5f-ace7-04545899d092","block_type":"box","text":"providers; (5) oversee the performance of the Fund’s Independent Registered Public Accounting Firm;","page_number":35,"box":{"x":117,"y":552,"width":762,"height":12}},{"id":"8d6dd23a-ff67-4718-af55-23961c873549","block_type":"box","text":"(6) review and discuss with management and the Fund’s Independent Registered Public Accounting","page_number":35,"box":{"x":117,"y":568,"width":747,"height":12}},{"id":"c45556a8-9a83-42bf-af02-e3e5113c5829","block_type":"box","text":"Firm the performance and findings of the Fund’s internal auditors; (7) discuss with Fund management","page_number":35,"box":{"x":117,"y":583,"width":758,"height":12}},{"id":"1318c381-6cab-4e20-a028-0879e8cf519d","block_type":"box","text":"its policies regarding risk assessment and risk management as such matters relate to the Fund’s","page_number":35,"box":{"x":117,"y":599,"width":721,"height":12}},{"id":"031a3d84-9596-45d9-a7f9-75e727eab459","block_type":"box","text":"financial reporting and controls; (8) resolve any disagreements between Fund management and the","page_number":35,"box":{"x":116,"y":614,"width":744,"height":12}},{"id":"f52b2bc3-9d14-403f-a4fc-e954ab19f283","block_type":"box","text":"Independent Registered Public Accounting Firm regarding financial reporting; and (9) undertake such","page_number":35,"box":{"x":117,"y":630,"width":755,"height":12}},{"id":"f7bb7a63-b855-4b53-b983-df714d841068","block_type":"box","text":"other duties and responsibilities as may from time to time be delegated by the Board to the Audit","page_number":35,"box":{"x":116,"y":645,"width":721,"height":12}},{"id":"fc95da79-c869-496f-9251-1159dd4b9662","block_type":"box","text":"Committee. The Board has adopted a written charter for the Audit Committee. During the twelve","page_number":35,"box":{"x":117,"y":661,"width":711,"height":12}},{"id":"5b959a67-913f-488e-a34d-e8b0f32ff950","block_type":"box","text":"months ended April 30, 2026, the Audit Committee met four times.","page_number":35,"box":{"x":117,"y":676,"width":490,"height":12}},{"id":"245dcd3b-f7db-4d62-8456-e34728a88292","block_type":"box","text":"The members of the Governance and Nominating Committee (the “Governance Committee”) are","page_number":35,"box":{"x":116,"y":707,"width":717,"height":12}},{"id":"6cef57ae-605c-4140-adab-240c33a0cb61","block_type":"box","text":"Cynthia A. Montgomery (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Henry R.","page_number":35,"box":{"x":117,"y":723,"width":725,"height":12}},{"id":"f6899ed2-c814-4103-bc9b-374c042e9545","block_type":"box","text":"Keizer and Marc D. Stern, all of whom are Independent Trustees. The principal responsibilities of the","page_number":35,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"f00d650b-3498-4246-bc75-e7f54336469b","block_type":"box","text":"Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the","page_number":35,"box":{"x":117,"y":754,"width":760,"height":12}},{"id":"57772e9b-7171-4a1a-b8ad-1d3e6eb57b9c","block_type":"box","text":"Trust and recommend Independent Trustee nominees for election by shareholders or appointment by","page_number":35,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"2f004ac9-a7c1-4fd0-b868-a216efdaa326","block_type":"box","text":"the Board; (2) advise the Board with respect to Board composition, procedures and committees (other","page_number":35,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"edc062d7-63d2-433d-8cc7-a9d8fdc4130e","block_type":"box","text":"than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the","page_number":35,"box":{"x":116,"y":800,"width":755,"height":12}},{"id":"ddac6843-fd6d-4339-a3d3-f96b3a298a49","block_type":"box","text":"Board (other than the Audit Committee); (4) review and make recommendations regarding","page_number":35,"box":{"x":117,"y":816,"width":668,"height":12}},{"id":"e9858fcd-22b5-4c3d-8858-3512ad8c82c3","block_type":"box","text":"Independent Trustee compensation; (5) monitor corporate governance matters and develop","page_number":35,"box":{"x":117,"y":831,"width":685,"height":12}},{"id":"681e4a06-8da6-4d1b-ae2b-fc1c12bc377a","block_type":"box","text":"appropriate recommendations to the Board; (6) act as the administrative committee with respect to","page_number":35,"box":{"x":116,"y":847,"width":736,"height":12}},{"id":"41e32830-5a9d-4ee6-b2eb-29dd0efd0b46","block_type":"box","text":"Board policies and procedures, committee policies and procedures (other than the Audit Committee)","page_number":35,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"82a566d5-c879-4e2d-bc48-c59b4b81217a","block_type":"box","text":"and codes of ethics as they relate to Independent Trustees; and (7) undertake such other duties and","page_number":35,"box":{"x":116,"y":878,"width":750,"height":12}},{"id":"2cb1f343-b67b-4bf6-85bb-11799c5a2e37","block_type":"box","text":"26","page_number":35,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ff887cd9-b8d8-4579-802b-c4dc2b0b8ae2","block_type":"box","text":"NM1026U-6004408-35/267","page_number":35,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a17fe600-2dd2-4582-8ca9-2276b19341ea","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Governance Committee.","page_number":36,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"3ba7fa53-1cbf-4f8e-8b76-c6a308120cbb","block_type":"box","text":"The Governance Committee may consider nominations for Trustees made by the Fund’s shareholders","page_number":36,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"4b1266c7-4e66-4722-a736-a2700ef56877","block_type":"box","text":"as it deems appropriate. Under the Trust’s Bylaws, shareholders must follow certain procedures to","page_number":36,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"de5eaeca-617c-4cdd-84af-e99bcb692a53","block_type":"box","text":"nominate a person for election as a Trustee at a shareholder meeting at which Trustees are to be","page_number":36,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"9b4370c0-ed21-4c47-9f5c-2146f30ab7d9","block_type":"box","text":"elected. Under these advance notice procedures, shareholders must submit the proposed nominee by","page_number":36,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"f530a72c-9055-4ab3-a0de-04df50f45a9e","block_type":"box","text":"delivering a notice to the Secretary of the Trust at its principal executive offices no earlier than the","page_number":36,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"62b9dcef-ac4f-4e47-8650-bc82760e367c","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":36,"box":{"x":118,"y":180,"width":746,"height":12}},{"id":"b1397850-e558-4b00-8b97-e82f967dd486","block_type":"box","text":"day prior to such meeting or the tenth day following the day on which public announcement is first","page_number":36,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"ae2fb80f-3ce1-4344-bbb1-ef0a89e19f79","block_type":"box","text":"made of the date of such meeting. The Trust’s Bylaws provide that notice of a proposed nomination","page_number":36,"box":{"x":117,"y":211,"width":742,"height":12}},{"id":"ac3ba48e-1e5d-47de-be6e-95406f362b38","block_type":"box","text":"must include certain information about the shareholder and the nominee, as well as certain other","page_number":36,"box":{"x":117,"y":227,"width":721,"height":11}},{"id":"33c7bb4f-d3c7-4e5e-8b9b-65bd564119bc","block_type":"box","text":"information, including a written consent of the proposed nominee to serve if elected. Reference is","page_number":36,"box":{"x":117,"y":242,"width":726,"height":12}},{"id":"9018e381-90d7-4a86-9b69-d5719c23ced4","block_type":"box","text":"made to the Trust’s Bylaws for more details. The Board has adopted a written charter for the","page_number":36,"box":{"x":117,"y":258,"width":690,"height":12}},{"id":"f23da6c4-fc5d-4c70-b1e2-75c75363d4fe","block_type":"box","text":"Governance Committee. During the twelve months ended April 30, 2026, the Governance Committee","page_number":36,"box":{"x":117,"y":273,"width":756,"height":12}},{"id":"595840ce-5322-4fd7-bc39-5a98c1ee1200","block_type":"box","text":"met eleven times.","page_number":36,"box":{"x":117,"y":289,"width":135,"height":9}},{"id":"bed6d9f2-f035-47ce-9fc9-a0d9359afab7","block_type":"box","text":"The members of the Compliance Committee (the “Com","page_number":36,"box":{"x":116,"y":320,"width":400,"height":12}},{"id":"6a0aab87-b914-4b2a-bedb-2ebbec061c84","block_type":"box","text":"pliance Committee”) are Claire A. Walton (Chair),","page_number":36,"box":{"x":518,"y":320,"width":363,"height":12}},{"id":"74c582af-adc8-444e-bf7e-8321c534bd42","block_type":"box","text":"Jeffrey Jarczyk, Cynthia A. Montgomery, Donald C. O","page_number":36,"box":{"x":116,"y":335,"width":390,"height":12}},{"id":"ba4baec4-5de2-494d-8b2c-503bd9673927","block_type":"box","text":"patrny, Lori Richards and Kenneth L. Urish, all of","page_number":36,"box":{"x":508,"y":335,"width":358,"height":12}},{"id":"e89fa41b-452d-44c4-9cfd-38ee14491317","block_type":"box","text":"whom are Independent Trustees. The Compliance Committee’","page_number":36,"box":{"x":116,"y":351,"width":453,"height":12}},{"id":"5413a322-5a27-4b02-af5e-649aaba5ef86","block_type":"box","text":"s purpose is to assist the Board in fulfilling","page_number":36,"box":{"x":571,"y":351,"width":310,"height":12}},{"id":"0b7da3a9-6e9d-4b0e-81de-a22451de0f83","block_type":"box","text":"its responsibility to oversee regulatory and fiduciary","page_number":36,"box":{"x":117,"y":366,"width":371,"height":12}},{"id":"7b2d0fdd-23a4-432a-9c10-005ac05d221e","block_type":"box","text":"y compliance matters involving the Trust, the fund","page_number":36,"box":{"x":488,"y":366,"width":359,"height":12}},{"id":"24cf734e-35bf-48c6-a117-f7ffa75f8437","block_type":"box","text":"related activities of BFA and any sub-adviser and","page_number":36,"box":{"x":117,"y":382,"width":361,"height":12}},{"id":"74c863c4-d4ef-4ed7-98b3-841705476049","block_type":"box","text":"the Trust’s third-party service providers. The","page_number":36,"box":{"x":478,"y":382,"width":326,"height":12}},{"id":"0a37d62d-fc25-4745-a5a3-962d68f91602","block_type":"box","text":"Compliance Committee’s responsibilities include, without lim","page_number":36,"box":{"x":117,"y":397,"width":436,"height":12}},{"id":"5940a803-9d5e-4ccb-85ca-b7a2a03ccfa5","block_type":"box","text":"itation, to (1) oversee the compliance policies","page_number":36,"box":{"x":555,"y":397,"width":333,"height":12}},{"id":"de95651d-79fa-4d05-ac64-b398338c2b94","block_type":"box","text":"and procedures of the Trust and its service prov","page_number":36,"box":{"x":116,"y":413,"width":348,"height":12}},{"id":"b59fc414-5a56-4055-986b-6f643acfbed5","block_type":"box","text":"iders and recommend changes or additions to such","page_number":36,"box":{"x":465,"y":413,"width":378,"height":12}},{"id":"9d780c7f-00e1-4d8c-9abb-8a5a8629bf9c","block_type":"box","text":"policies and procedures; (2) review information on and, where appropriate, recommend policies","page_number":36,"box":{"x":117,"y":428,"width":697,"height":12}},{"id":"ecb9f970-7d5b-4fb8-852f-d816e1203a14","block_type":"box","text":"concerning the Trust’s compliance with applicable la","page_number":36,"box":{"x":116,"y":444,"width":378,"height":12}},{"id":"8623b2ed-566e-4d51-8039-0ab582c30c51","block_type":"box","text":"w; (3) review reports from, oversee the annual","page_number":36,"box":{"x":495,"y":444,"width":341,"height":12}},{"id":"981a4429-9b0b-46ef-8c4c-8c568d67c64d","block_type":"box","text":"performance review of, and make certain recomm","page_number":36,"box":{"x":117,"y":459,"width":361,"height":12}},{"id":"f57b91e2-3626-45f9-a545-52899cb53d34","block_type":"box","text":"endations and determinations regarding the Trust’s","page_number":36,"box":{"x":479,"y":459,"width":376,"height":12}},{"id":"52c483aa-1b03-4259-882b-0014a2950289","block_type":"box","text":"Chief Compliance Officer (the “CCO”), including dete","page_number":36,"box":{"x":117,"y":475,"width":382,"height":12}},{"id":"7fe57ab4-614c-4bdd-bcc7-e69f71f97a42","block_type":"box","text":"rmining the amount and structure of the CCO’s","page_number":36,"box":{"x":501,"y":475,"width":344,"height":12}},{"id":"133ff228-34f8-42b1-8760-ba15684d613c","block_type":"box","text":"compensation and recommending such amount and s","page_number":36,"box":{"x":116,"y":490,"width":392,"height":12}},{"id":"83ea1cc2-ac6e-44a6-983e-4806e7eca057","block_type":"box","text":"tructure to the full Board for approval and","page_number":36,"box":{"x":508,"y":490,"width":304,"height":12}},{"id":"8a917f8e-9448-46e3-b4dc-6384a11684fa","block_type":"box","text":"ratification; and (4) undertake such other duties","page_number":36,"box":{"x":117,"y":506,"width":347,"height":12}},{"id":"4b81b788-08e2-4b04-a356-4bb2b6b29862","block_type":"box","text":"and responsibilities as may from time to time be","page_number":36,"box":{"x":465,"y":506,"width":351,"height":12}},{"id":"d727dc46-43ce-494b-a913-373b89da512f","block_type":"box","text":"delegated by the Board to the Compliance Committee.","page_number":36,"box":{"x":116,"y":521,"width":395,"height":12}},{"id":"628385f0-f09b-4fac-b85b-1d542c9e93b7","block_type":"box","text":"The Board has adopted a written charter for the","page_number":36,"box":{"x":512,"y":521,"width":355,"height":12}},{"id":"0e2020fe-b6f6-4256-8ef4-11fd846fb374","block_type":"box","text":"Compliance Committee. During the twelve months","page_number":36,"box":{"x":117,"y":537,"width":365,"height":12}},{"id":"572d651c-1c3b-43f1-92e1-78005575fd4f","block_type":"box","text":"ended April 30, 2026, the Compliance Committee met","page_number":36,"box":{"x":482,"y":537,"width":401,"height":12}},{"id":"c6b890d8-0138-4ef3-a668-b96dc9d22ac7","block_type":"box","text":"four times.","page_number":36,"box":{"x":116,"y":552,"width":81,"height":10}},{"id":"9f0dd0dd-b462-41c6-86d7-12ef82185621","block_type":"box","text":"The members of the Performance Oversight Committee (the “Performance Oversight Committee”) are","page_number":36,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"e9c98952-525b-425e-83bb-0d091cf0719d","block_type":"box","text":"Donald C. Opatrny (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Neil A. Cotty and","page_number":36,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"08d9055a-99a5-4593-8e30-ffd8c2f756d7","block_type":"box","text":"Marc D. Stern, all of whom are Independent Trustees. The Performance Oversight Committee’s","page_number":36,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"f03c9caa-af92-4642-bab9-192eea068e79","block_type":"box","text":"purpose is to assist the Board in fulfilling its responsibility to oversee the Fund’s investment","page_number":36,"box":{"x":117,"y":630,"width":680,"height":12}},{"id":"127b9911-faf2-40ab-b086-eb1b246835d0","block_type":"box","text":"performance relative to its agreed-upon performance objectives and to assist the Independent","page_number":36,"box":{"x":117,"y":645,"width":702,"height":12}},{"id":"ec921571-f93d-450c-a791-5d45787daa76","block_type":"box","text":"Trustees in their consideration of investment advisory agreements. The Performance Oversight","page_number":36,"box":{"x":116,"y":661,"width":707,"height":12}},{"id":"1832f5a9-7f86-45e1-82b0-bd6e7c0e6b0e","block_type":"box","text":"Committee’s responsibilities include, without limitation, to (1) review information on, and make","page_number":36,"box":{"x":117,"y":676,"width":695,"height":12}},{"id":"906b785f-0575-47d9-92f8-e959de37bba9","block_type":"box","text":"recommendations to the full Board in respect of, the Fund’s investment objective, policies and","page_number":36,"box":{"x":117,"y":692,"width":694,"height":12}},{"id":"3da8c6fc-b9c7-4387-8524-4ec16ec3cbd3","block_type":"box","text":"practices; (2) review information on the Fund’s investment performance; (3) review information on","page_number":36,"box":{"x":117,"y":707,"width":723,"height":12}},{"id":"f3f9934b-814c-4411-9bb0-ef0e5bce00a5","block_type":"box","text":"appropriate benchmarks and competitive universes and unusual or exceptional investment matters;","page_number":36,"box":{"x":116,"y":723,"width":736,"height":12}},{"id":"286d2215-5ba3-4ca1-9e3f-55725a630dd4","block_type":"box","text":"(4) review personnel and other resources devoted to management of the Fund and evaluate the nature","page_number":36,"box":{"x":117,"y":738,"width":763,"height":12}},{"id":"79af226f-88ce-4090-a47d-48a9937fa734","block_type":"box","text":"and quality of information furnished to the Performance Oversight Committee; (5) recommend any","page_number":36,"box":{"x":116,"y":754,"width":728,"height":12}},{"id":"db637091-24f1-4217-9810-55c1edf5e49e","block_type":"box","text":"required action regarding changes in fundamental and non-fundamental investment policies and","page_number":36,"box":{"x":117,"y":769,"width":711,"height":12}},{"id":"88e16218-4dae-4a0b-9815-91101c129429","block_type":"box","text":"restrictions, fund mergers or liquidations; (6) request and review information on the nature, extent and","page_number":36,"box":{"x":117,"y":785,"width":753,"height":12}},{"id":"0a8ee556-b3bd-4363-8927-9c9d4a2df19a","block_type":"box","text":"quality of services provided to the shareholders; (7) make recommendations to the Board concerning","page_number":36,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"cf7f6555-da7c-454b-bc5a-c6cd410307d3","block_type":"box","text":"the approval or renewal of investment advisory agreements; and (8) undertake such other duties and","page_number":36,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"516e6380-19ee-4d9e-b783-5422e47fe097","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Performance Oversight","page_number":36,"box":{"x":117,"y":831,"width":730,"height":12}},{"id":"20339778-f789-45bf-8f63-23a97f00e93c","block_type":"box","text":"Committee. The Board has adopted a written charter for the Performance Oversight Committee. During","page_number":36,"box":{"x":117,"y":847,"width":771,"height":12}},{"id":"2aec958d-165a-4707-b42b-99098c4b6657","block_type":"box","text":"the twelve months ended April 30, 2026, the Performance Oversight Committee met five times.","page_number":36,"box":{"x":116,"y":862,"width":710,"height":12}},{"id":"ef869e58-86c2-4c09-bc6b-892df15a0090","block_type":"box","text":"27","page_number":36,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ac890631-d908-4baf-a681-76a70c162911","block_type":"box","text":"NM1026U-6004408-36/267","page_number":36,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a0e85356-8b34-46fb-a42a-faef0cd22e23","block_type":"box","text":"The members of the Ad Hoc Topics Committee (the “Ad Hoc Topics Committee”) are Mark Stalnecker","page_number":37,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"e077afe3-fc60-4f2d-9b44-7538c7bc8c64","block_type":"box","text":"(Chair) and Claire A. Walton, both of whom are Independent Trustees, and John M. Perlowski, who","page_number":37,"box":{"x":117,"y":102,"width":741,"height":13}},{"id":"fb21b6c8-2469-4c13-a321-dbf7c77e740c","block_type":"box","text":"serves as an interested Trustee. The principal responsibilities of the Ad Hoc Topics Committee are to","page_number":37,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"d84f68ae-7e3d-445a-a632-51f382a0f9cd","block_type":"box","text":"(1) act on routine matters between meetings of the Board; (2) act on such matters as may require","page_number":37,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"b85eb8c5-9ad8-4a97-a1fb-ef155fa7950b","block_type":"box","text":"urgent action between meetings of the Board; and (3) exercise such other authority as may from time","page_number":37,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"515492ba-d0e5-4025-87c3-ea6a0fef5032","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":37,"box":{"x":116,"y":165,"width":758,"height":12}},{"id":"d78c10da-363a-4dde-937f-09c74680c3fb","block_type":"box","text":"charter for the Ad Hoc Topics Committee. During the twelve months ended April 30, 2026, the Ad Hoc","page_number":37,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"9127884c-0fad-415f-abe2-a401cc1fc60c","block_type":"box","text":"Topics Committee did not meet.","page_number":37,"box":{"x":116,"y":196,"width":242,"height":11}},{"id":"b9a62e9c-2426-4439-a254-861f24cc54fc","block_type":"box","text":"The Governance Committee has adopted a statement of","page_number":37,"box":{"x":116,"y":223,"width":412,"height":12}},{"id":"372a871a-9696-4636-b9af-e07a5919541c","block_type":"box","text":"f policy that describes the experience,","page_number":37,"box":{"x":527,"y":224,"width":276,"height":12}},{"id":"ec05a779-ed7f-4b75-850f-282eacc12ce7","block_type":"box","text":"qualifications, skills and attributes that are nec","page_number":37,"box":{"x":116,"y":239,"width":335,"height":12}},{"id":"f579a36b-8895-4002-af3e-cb7972b911d0","block_type":"box","text":"essary and desirable for potential Independent Trustee","page_number":37,"box":{"x":451,"y":239,"width":403,"height":12}},{"id":"c4a0a9a4-6017-40e7-9c98-e97d8caf2e24","block_type":"box","text":"candidates (the “Statement of Policy”). The Board be","page_number":37,"box":{"x":116,"y":254,"width":384,"height":13}},{"id":"c85bc374-6356-4ac5-bc08-d3badec81d40","block_type":"box","text":"lieves that each Independent Tr","page_number":37,"box":{"x":501,"y":255,"width":230,"height":11}},{"id":"290004db-a6e9-4930-979e-c5dac3eaef07","block_type":"box","text":"ustee satisfied, at","page_number":37,"box":{"x":732,"y":254,"width":131,"height":12}},{"id":"8300b42c-a37f-4cae-ae82-1a42d6817d8d","block_type":"box","text":"the time he or she was initially elected or appointed","page_number":37,"box":{"x":116,"y":270,"width":377,"height":12}},{"id":"31ce50d0-f3ba-4e9c-a440-c4f0d0ccd367","block_type":"box","text":"a Trustee, and continues to satisfy, the standards","page_number":37,"box":{"x":494,"y":270,"width":363,"height":12}},{"id":"56881534-beac-4c24-8478-b151b317047b","block_type":"box","text":"contemplated by the Statement of Policy. Furt","page_number":37,"box":{"x":116,"y":285,"width":333,"height":13}},{"id":"9e70340b-4d58-4581-9412-bceb1af09cab","block_type":"box","text":"hermore, in determining that a particular Independent","page_number":37,"box":{"x":450,"y":286,"width":392,"height":12}},{"id":"e68241d2-68e0-4fd8-853c-0683f367d216","block_type":"box","text":"Trustee was and continues to be qualified to serve as","page_number":37,"box":{"x":116,"y":301,"width":393,"height":12}},{"id":"4f986131-0e89-435e-a4f4-9a55449f4832","block_type":"box","text":"a Trustee, the Board has considered a variety of","page_number":37,"box":{"x":510,"y":301,"width":355,"height":12}},{"id":"9344371f-0d26-4abc-92fe-bc5e2cd76651","block_type":"box","text":"criteria, none of which, in isolation, was controlli","page_number":37,"box":{"x":116,"y":316,"width":345,"height":12}},{"id":"8a448e7a-4a6e-4a04-aa07-c8e3006b2c8a","block_type":"box","text":"ng. The Board believes that, collectively, the Independent","page_number":37,"box":{"x":463,"y":317,"width":421,"height":12}},{"id":"8d5403f9-ea12-41f7-8323-0bd5fda49fe6","block_type":"box","text":"Trustees have balanced and diverse experience, skills","page_number":37,"box":{"x":116,"y":332,"width":394,"height":12}},{"id":"cde2eaee-62d9-4265-ab14-e3b3d41b65c3","block_type":"box","text":", attributes and qualifications, which allow the","page_number":37,"box":{"x":512,"y":332,"width":332,"height":12}},{"id":"a4884ca6-0782-4a0a-816a-83bed6e27e3c","block_type":"box","text":"Board to operate effectively in governing the Trus","page_number":37,"box":{"x":117,"y":347,"width":358,"height":13}},{"id":"4778eeb5-7116-4e90-9197-2e66b9f59dec","block_type":"box","text":"t and protecting the interests of shareholders. Among","page_number":37,"box":{"x":475,"y":347,"width":392,"height":13}},{"id":"9bfaddc1-7964-405a-b0c1-86f059b6f41a","block_type":"box","text":"the attributes common to all Independent Trustees are t","page_number":37,"box":{"x":116,"y":363,"width":404,"height":12}},{"id":"56adddbe-6489-4679-bfe0-cce553172e1e","block_type":"box","text":"heir ability to review critically, evaluate, question","page_number":37,"box":{"x":521,"y":363,"width":353,"height":12}},{"id":"f393e327-349e-45c6-a506-fcd3890548e2","block_type":"box","text":"and discuss information provided to them, to interact","page_number":37,"box":{"x":116,"y":378,"width":381,"height":12}},{"id":"7b528132-1fb3-42d4-8f31-3b82bc785a0b","block_type":"box","text":"t effectively with the Fund’s investment adviser,","page_number":37,"box":{"x":497,"y":378,"width":344,"height":13}},{"id":"f172207c-1809-4cb4-b954-d57a5df46172","block_type":"box","text":"sub-advisers, other service providers, counsel","page_number":37,"box":{"x":116,"y":394,"width":333,"height":12}},{"id":"dcb1cb63-c2d2-4c78-9183-ffe236a8539f","block_type":"box","text":"and the Independent Registered Public Accounting Firm,","page_number":37,"box":{"x":450,"y":394,"width":422,"height":12}},{"id":"e322ba85-be9e-43d1-af47-cac708f85cb6","block_type":"box","text":"and to exercise effective business judgment in","page_number":37,"box":{"x":116,"y":409,"width":341,"height":13}},{"id":"2576b0c5-6de4-4b73-b635-78ea8f90bf52","block_type":"box","text":"the performance of their duties as Trustees.","page_number":37,"box":{"x":457,"y":409,"width":323,"height":12}},{"id":"a5453304-c139-4644-b521-0ef94d42acbf","block_type":"box","text":"Information relating to each Trustee’s share ownership in the Fund and in all BlackRock-advised Funds","page_number":37,"box":{"x":117,"y":437,"width":769,"height":12}},{"id":"a0137784-f9ac-4590-9c9d-c23c4c68a028","block_type":"box","text":"that are currently overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2025,","page_number":37,"box":{"x":116,"y":453,"width":760,"height":12}},{"id":"4f1926b2-ce8b-411c-97b1-4b49b517d1b7","block_type":"box","text":"except as otherwise noted, is set forth in the chart below. Amounts shown may include shares as to","page_number":37,"box":{"x":116,"y":468,"width":744,"height":12}},{"id":"e4bbe5bd-9098-4934-8998-4b9c61aebca8","block_type":"box","text":"which a Trustee has indirect beneficial ownership, such as through participation in certain family","page_number":37,"box":{"x":116,"y":484,"width":717,"height":12}},{"id":"38ef4f0a-93e4-4385-a215-c83e750edce8","block_type":"box","text":"accounts, 529 college savings plan interests, or similar arrangements where the Trustee has beneficial","page_number":37,"box":{"x":116,"y":499,"width":768,"height":13}},{"id":"cefff695-18ce-48a5-b5f7-603ffa232965","block_type":"box","text":"economic interest but not a direct ownership interest.","page_number":37,"box":{"x":116,"y":515,"width":398,"height":12}},{"id":"d274a913-c89a-4699-9d05-652332f7b2f2","block_type":"box","text":"Name","page_number":37,"box":{"x":197,"y":571,"width":35,"height":7}},{"id":"bc936aad-e9d9-4681-ad34-492f3b15fb7a","block_type":"box","text":"Dollar","page_number":37,"box":{"x":511,"y":540,"width":37,"height":7}},{"id":"7ea0c4f9-7108-4203-88a6-2c36fe6ae134","block_type":"box","text":"Range of Equity","page_number":37,"box":{"x":479,"y":550,"width":101,"height":10}},{"id":"8e1dc6da-68c2-44fb-be9e-36b67eb88457","block_type":"box","text":"Securities in","page_number":37,"box":{"x":490,"y":560,"width":78,"height":8}},{"id":"9420a818-0c30-4cee-83bd-5dfa028bced9","block_type":"box","text":"the Fund","page_number":37,"box":{"x":501,"y":571,"width":55,"height":7}},{"id":"22d04b28-c2a1-4ecf-ae5b-bf0d60ccd96f","block_type":"box","text":"Aggregate Dollar","page_number":37,"box":{"x":731,"y":540,"width":108,"height":9}},{"id":"35dfd542-bc41-495e-b8a8-e6abe19d7af7","block_type":"box","text":"Range of Equity","page_number":37,"box":{"x":735,"y":550,"width":101,"height":10}},{"id":"9e3bc229-370c-4937-899e-b424318f2d39","block_type":"box","text":"Securities in","page_number":37,"box":{"x":745,"y":560,"width":79,"height":8}},{"id":"d0718dfa-5763-4a76-817a-0fff3f256a6e","block_type":"box","text":"Supervised Funds","page_number":37,"box":{"x":727,"y":571,"width":116,"height":9}},{"id":"82c89aa0-630a-4618-8d72-37a82588455d","block_type":"box","text":"Interested Trustees","page_number":37,"box":{"x":117,"y":588,"width":144,"height":10}},{"id":"d57ff888-961f-44cc-a7e1-27049e485103","block_type":"box","text":"Robert Fairbairn None Over $100,000","page_number":37,"box":{"x":117,"y":602,"width":728,"height":11}},{"id":"900236bb-1789-44ab-8e91-88d0d4fcfa15","block_type":"box","text":"John M. Perlowski None Over $100,000","page_number":37,"box":{"x":116,"y":616,"width":729,"height":12}},{"id":"855422df-305c-4176-b0a9-72a7c9b276c3","block_type":"box","text":"Independent Trustees","page_number":37,"box":{"x":117,"y":639,"width":162,"height":11}},{"id":"af14ee2a-3ee7-4749-ad8c-0e5e73b29400","block_type":"box","text":"Christopher J. Ailman None Over $100,000","page_number":37,"box":{"x":117,"y":652,"width":728,"height":13}},{"id":"b1e9ed72-662d-4361-be6a-6edf7db82aa6","block_type":"box","text":"Susan J. Carter None Over $100,000","page_number":37,"box":{"x":116,"y":666,"width":724,"height":12}},{"id":"aa07e43a-beea-4b17-aec9-311427be931e","block_type":"box","text":"Collette Chilton None Over $100,000","page_number":37,"box":{"x":117,"y":680,"width":723,"height":12}},{"id":"f7004ca2-7744-4cc6-b6e9-95345526810b","block_type":"box","text":"Neil A. Cotty None Over $100,000","page_number":37,"box":{"x":117,"y":695,"width":723,"height":12}},{"id":"1f46a0b9-e9b4-40d2-b48d-e824bef50468","block_type":"box","text":"Jeffrey Jarczyk* None None","page_number":37,"box":{"x":116,"y":709,"width":688,"height":13}},{"id":"6afec763-d921-415a-8ca0-acfc7896e599","block_type":"box","text":"Henry R. Keizer None Over $100,000","page_number":37,"box":{"x":117,"y":723,"width":723,"height":13}},{"id":"7bc1c20f-ab27-4bc7-b43e-72af45005ba7","block_type":"box","text":"Cynthia A. Montgomery None Over $100,000","page_number":37,"box":{"x":117,"y":737,"width":723,"height":13}},{"id":"3a235351-5d52-49c9-8ce4-6a8a15bd90b4","block_type":"box","text":"Donald C. 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BlackRock may also determine to rely on the","page_number":40,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"73c053bb-c311-48cd-93bd-01820b01e709","block_type":"box","text":"actions of similarly situated holders of loans or securities rather than, or in connection with, taking such","page_number":40,"box":{"x":116,"y":754,"width":762,"height":12}},{"id":"9634a0b3-0f8e-4939-b5e7-b443fd6f5b48","block_type":"box","text":"actions itself on behalf of the Fund.","page_number":40,"box":{"x":116,"y":769,"width":259,"height":10}},{"id":"c3a474ad-41e9-40c2-80d9-01435c0400ee","block_type":"box","text":"In addition, to the extent permitted by applicable law, the Fund may invest its assets in other funds","page_number":40,"box":{"x":117,"y":800,"width":728,"height":12}},{"id":"a8a429f9-d04f-426e-8626-995dc87d27a8","block_type":"box","text":"advised by BlackRock, including funds that are managed by one or more of the same portfolio","page_number":40,"box":{"x":116,"y":816,"width":697,"height":12}},{"id":"f9cf7b31-73b6-46f6-9032-df4937b6b959","block_type":"box","text":"managers, which could result in conflicts of interest relating to asset allocation, timing of Fund","page_number":40,"box":{"x":117,"y":831,"width":699,"height":12}},{"id":"8ba691d2-607a-45ae-9d2f-d86861f0ca65","block_type":"box","text":"purchases and redemptions, and increased remuneration and profitability for BlackRock and/or its","page_number":40,"box":{"x":117,"y":847,"width":730,"height":12}},{"id":"6395b0c8-529e-4a9e-859a-06e94cf95355","block_type":"box","text":"personnel, including portfolio managers.","page_number":40,"box":{"x":117,"y":862,"width":302,"height":12}},{"id":"fcff93a9-e20e-48e1-bd88-84a6be15572e","block_type":"box","text":"31","page_number":40,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"5a75ed5a-ce2d-4dbf-8464-a201206ca571","block_type":"box","text":"NM1026U-6004408-40/267","page_number":40,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c063afc4-7f99-4e79-8a8d-091ae7707c7d","block_type":"box","text":"Third parties, including service providers to BlackRo","page_number":41,"box":{"x":116,"y":87,"width":378,"height":12}},{"id":"f229998d-5ce1-4946-8d01-9a0ace9bdd04","block_type":"box","text":"ck or the Fund, may sponsor events (including, but","page_number":41,"box":{"x":495,"y":87,"width":372,"height":12}},{"id":"2bd9db79-eec2-4984-ba8f-642e56b339ba","block_type":"box","text":"not limited to, marketing and promotional activities","page_number":41,"box":{"x":117,"y":103,"width":363,"height":12}},{"id":"4d6a9487-f04b-436f-8f36-94ac0aa31a9a","block_type":"box","text":"and presentations, educational training programs and","page_number":41,"box":{"x":480,"y":103,"width":398,"height":12}},{"id":"6cadf2ac-6bdf-4d4c-825d-77b754b7280f","block_type":"box","text":"conferences) for registered representatives, other","page_number":41,"box":{"x":116,"y":118,"width":365,"height":12}},{"id":"1705d734-9fa6-407f-9f71-3d3cb92502f6","block_type":"box","text":"professionals and individual investors. There is a","page_number":41,"box":{"x":482,"y":118,"width":358,"height":12}},{"id":"0514e45b-7ab9-4e4a-91c5-76fd62ee3cea","block_type":"box","text":"potential conflict of interest as such sponsorships ma","page_number":41,"box":{"x":117,"y":134,"width":383,"height":11}},{"id":"280f6538-ecdd-4a32-a59b-d1d9f1edf49d","block_type":"box","text":"y defray the costs of such activities to BlackRock,","page_number":41,"box":{"x":501,"y":134,"width":364,"height":12}},{"id":"531828e8-969e-485e-9deb-ac2cb5ad2ed2","block_type":"box","text":"and may provide an incentive to BlackRock to retain such third parties to provide services to the Fund.","page_number":41,"box":{"x":116,"y":149,"width":747,"height":12}},{"id":"d6f78191-f58c-4934-9bdb-d23c00b2bad4","block_type":"box","text":"In certain circumstances, BlackRock, on behalf of the Fund, may seek to buy from or sell securities to","page_number":41,"box":{"x":117,"y":177,"width":757,"height":12}},{"id":"e31f9bb5-8a7a-4e37-8417-8cd94d66235d","block_type":"box","text":"another fund or account advised by BlackRock. BlackRock may (but is not required to) effect","page_number":41,"box":{"x":116,"y":193,"width":692,"height":12}},{"id":"951ead6e-c047-45f1-a092-e97eee9394d6","block_type":"box","text":"purchases and sales between BlackRock clients (“cross trades”), including the Fund, if BlackRock","page_number":41,"box":{"x":117,"y":208,"width":730,"height":12}},{"id":"551fe996-d248-422f-8cb7-6a0399ad4fe9","block_type":"box","text":"believes such transactions are appropriate based on each party’s investment objectives and","page_number":41,"box":{"x":117,"y":224,"width":687,"height":12}},{"id":"98a9816d-44c5-4218-af68-48ea09266c02","block_type":"box","text":"guidelines, subject to applicable law and regulation. There may be potential conflicts of interest or","page_number":41,"box":{"x":116,"y":239,"width":728,"height":12}},{"id":"7c49eeaf-3a5d-42aa-a97e-e62788745a9c","block_type":"box","text":"regulatory issues relating to these transactions which could limit BlackRock’s decision to engage in","page_number":41,"box":{"x":117,"y":255,"width":738,"height":12}},{"id":"21297dda-3f7d-45dc-9d40-b77743c3da31","block_type":"box","text":"these transactions for the Fund. BlackRock may have a potentially conflicting division of loyalties and","page_number":41,"box":{"x":116,"y":270,"width":755,"height":12}},{"id":"3d1dd59a-b9ac-4110-a2a3-6b74ad058da8","block_type":"box","text":"responsibilities to the parties in such transactions.","page_number":41,"box":{"x":117,"y":286,"width":374,"height":12}},{"id":"e26069e3-7d53-4d90-9f78-2ddb91682f4d","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":41,"box":{"x":117,"y":314,"width":763,"height":12}},{"id":"dda72f0b-26cb-4c43-9e60-3b933d9d1517","block_type":"box","text":"invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability,","page_number":41,"box":{"x":117,"y":330,"width":760,"height":12}},{"id":"b5a16cda-d2f6-4cca-98fa-5af83a48b19f","block_type":"box","text":"liquidity and terms of the Fund’s investments may be negatively impacted by the activities of","page_number":41,"box":{"x":117,"y":345,"width":687,"height":12}},{"id":"da4b13db-145c-4595-a88b-5a5fb941bbc5","block_type":"box","text":"BlackRock or its clients, and transactions for the Fund may be impaired or effected at prices or terms","page_number":41,"box":{"x":117,"y":361,"width":753,"height":12}},{"id":"df8de103-bf56-4d07-99f5-a85e235ebc67","block_type":"box","text":"that may be less favorable than would otherwise have been the case.","page_number":41,"box":{"x":116,"y":376,"width":520,"height":12}},{"id":"454a1753-84d9-4f0f-a5fb-50f68d5d1cd4","block_type":"box","text":"The results of the Fund’s investment activities may differ significantly from the results achieved by","page_number":41,"box":{"x":116,"y":405,"width":731,"height":12}},{"id":"f3ed7045-7888-4d9a-95ba-612a6e5da198","block_type":"box","text":"BlackRock for its proprietary accounts or other accounts (including investment companies or collective","page_number":41,"box":{"x":117,"y":420,"width":763,"height":12}},{"id":"bceecf37-f957-47e6-b292-b83445c9395f","block_type":"box","text":"investment vehicles) that it manages or advises. It is possible that one or more accounts managed or","page_number":41,"box":{"x":117,"y":436,"width":754,"height":12}},{"id":"abdcd41d-3084-4dcc-a859-18c0291ee885","block_type":"box","text":"advised by BlackRock and such other accounts will achieve investment results that are substantially","page_number":41,"box":{"x":116,"y":451,"width":747,"height":12}},{"id":"21baeaa9-44e5-4591-8763-21bed5932c31","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":41,"box":{"x":117,"y":467,"width":769,"height":12}},{"id":"30be11f9-3679-4b88-9233-0da0d315099d","block_type":"box","text":"sustain losses during periods in which one or more proprietary or other accounts managed or advised","page_number":41,"box":{"x":116,"y":482,"width":759,"height":12}},{"id":"ae753dac-97cc-49b6-b9f3-14be23090ca1","block_type":"box","text":"by BlackRock achieve significant profits. The opposite result is also possible.","page_number":41,"box":{"x":117,"y":498,"width":574,"height":12}},{"id":"a29a7b52-b08e-4307-b324-f132eec974bf","block_type":"box","text":"From time to time, the Fund may be restricted from purchasing or selling securities, or from engaging","page_number":41,"box":{"x":117,"y":526,"width":754,"height":12}},{"id":"345935b0-e079-45c2-87b1-410cb778b040","block_type":"box","text":"in other investment activities because of regulatory, legal or contractual requirements applicable to","page_number":41,"box":{"x":117,"y":542,"width":735,"height":12}},{"id":"8bc85da5-a648-4c3a-9afd-7e1abf31b238","block_type":"box","text":"BlackRock or other accounts managed or advised by BlackRock, and/or the internal policies of","page_number":41,"box":{"x":117,"y":557,"width":706,"height":12}},{"id":"43b74f6d-d074-433e-beaf-3e07189d8ba5","block_type":"box","text":"BlackRock designed to comply with such requirements. As a result, there may be periods, for example,","page_number":41,"box":{"x":117,"y":573,"width":769,"height":12}},{"id":"13f35dc0-fe30-4882-9646-22b2ece758fa","block_type":"box","text":"when BlackRock will not initiate or recommend certain types of transactions in certain securities or","page_number":41,"box":{"x":116,"y":588,"width":734,"height":12}},{"id":"a7bde4d0-bf63-4b5f-8754-ebe49c9227fc","block_type":"box","text":"instruments with respect to which BlackRock is performing services or when position limits have been","page_number":41,"box":{"x":117,"y":604,"width":757,"height":12}},{"id":"998dc6ea-6a9d-4b16-aa9b-6a89b6b3bae7","block_type":"box","text":"reached. For example, the investment activities of BlackRock for its proprietary accounts and accounts","page_number":41,"box":{"x":117,"y":619,"width":766,"height":12}},{"id":"67ac64e9-7f8f-49aa-9080-f37efb2f6015","block_type":"box","text":"under its management may limit the investment opportunities for the Fund in certain emerging and","page_number":41,"box":{"x":117,"y":635,"width":733,"height":12}},{"id":"f1302e71-40f0-45cd-9b69-2693eb951a6b","block_type":"box","text":"other markets in which limitations are imposed upon the amount of investment, in the aggregate or in","page_number":41,"box":{"x":116,"y":650,"width":754,"height":12}},{"id":"8711d15b-aaa6-4388-8270-077576795343","block_type":"box","text":"individual issuers, by affiliated foreign investors.","page_number":41,"box":{"x":117,"y":666,"width":353,"height":12}},{"id":"0b67a94d-2cd4-4f21-af74-ae8dce609aca","block_type":"box","text":"In connection with its management of the Fund, BlackRock may have access to certain fundamental","page_number":41,"box":{"x":117,"y":694,"width":742,"height":12}},{"id":"0939b795-65b3-49f3-97f1-7c96fdd306af","block_type":"box","text":"analysis and proprietary technical models developed by BlackRock. BlackRock will not be under any","page_number":41,"box":{"x":116,"y":710,"width":745,"height":12}},{"id":"006571b3-bb33-45c8-981a-11104c2448ae","block_type":"box","text":"obligation, however, to effect transactions on behalf of the Fund in accordance with such analysis and","page_number":41,"box":{"x":116,"y":725,"width":755,"height":12}},{"id":"5d3bb328-ba8e-4655-9513-a78f6cc3b2b0","block_type":"box","text":"models. In addition, BlackRock will not have any obligation to make available any information regarding","page_number":41,"box":{"x":117,"y":740,"width":764,"height":13}},{"id":"b7cde9b3-c844-4cf0-8370-533c4f4236ed","block_type":"box","text":"its proprietary activities or strategies, or the activities or strategies used for other accounts managed by","page_number":41,"box":{"x":117,"y":756,"width":764,"height":12}},{"id":"6c7d3f60-1d10-4126-b5de-4fe33d07070f","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":41,"box":{"x":116,"y":771,"width":752,"height":13}},{"id":"dd83465f-6f03-4667-abd4-6d4530a70d3d","block_type":"box","text":"access to such information for the purpose of managing the Fund. The proprietary activities or portfolio","page_number":41,"box":{"x":116,"y":787,"width":762,"height":12}},{"id":"b30d8aa8-2cad-4fc9-b02a-f8bec2cf40f8","block_type":"box","text":"strategies of BlackRock, or the activities or strategies used for accounts managed by BlackRock or","page_number":41,"box":{"x":116,"y":802,"width":734,"height":13}},{"id":"4e22941b-13fd-4698-8b80-5f5c1ba6a3c8","block_type":"box","text":"other client accounts could conflict with the transactions and strategies employed by BlackRock in","page_number":41,"box":{"x":116,"y":818,"width":725,"height":12}},{"id":"64c26bcc-0dd2-41d7-bf54-aa79a30edfca","block_type":"box","text":"managing the Fund.","page_number":41,"box":{"x":117,"y":834,"width":153,"height":12}},{"id":"6ae4628b-6bce-4352-8428-c9afd19a9413","block_type":"box","text":"The Fund may be included in investment models developed by BlackRock for use by clients and","page_number":41,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"f06d8e25-e3ee-421d-93d4-e018ed505214","block_type":"box","text":"financial advisors. To the extent clients invest in these investment models and increase the assets","page_number":41,"box":{"x":116,"y":877,"width":733,"height":10}},{"id":"d04dd238-c313-419b-882a-fe6fcb0ae6a4","block_type":"box","text":"32","page_number":41,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c65a01f7-3457-4f57-bece-5b5b59a3253a","block_type":"box","text":"NM1026U-6004408-41/267","page_number":41,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"34f60714-f34e-4ea5-a842-5fee86ea1fb2","block_type":"box","text":"under management of the Fund, the investment management fee amounts paid by the Fund to","page_number":42,"box":{"x":117,"y":87,"width":707,"height":12}},{"id":"905590bc-3934-40a6-bd2e-775c7c073c2c","block_type":"box","text":"BlackRock may also increase. The net asset value and liquidity of the Fund may be impacted by","page_number":42,"box":{"x":117,"y":102,"width":718,"height":13}},{"id":"b20fcb2c-0b32-431a-9115-5afb367ddef6","block_type":"box","text":"purchases and sales of the Fund by model-driven investment portfolios, as well as by BlackRock itself","page_number":42,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"56a32207-9235-4e8e-86b2-e69867791581","block_type":"box","text":"and by its advisory clients.","page_number":42,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"3eb6c01e-8b7d-448b-8e54-0af84272609f","block_type":"box","text":"In addition, certain principals and certain employees of the Fund’s investment adviser are also","page_number":42,"box":{"x":117,"y":165,"width":702,"height":12}},{"id":"c181c1fe-d4d2-42c6-bab1-8c6958a5b0b9","block_type":"box","text":"principals or employees of other business units or entities within BlackRock. As a result, these","page_number":42,"box":{"x":117,"y":180,"width":702,"height":12}},{"id":"6ce7a853-a559-46c1-ac73-5630d7b30b4e","block_type":"box","text":"principals and employees may have obligations to such other business units or entities or their clients","page_number":42,"box":{"x":117,"y":196,"width":756,"height":12}},{"id":"040a5cae-60f2-4d85-a2f6-aab5b2bf94d5","block_type":"box","text":"and such obligations to other business units or entities or their clients may be a consideration of which","page_number":42,"box":{"x":116,"y":211,"width":763,"height":12}},{"id":"ad4aa394-a6c2-409b-900c-318b57c078d6","block_type":"box","text":"investors in the Fund should be aware.","page_number":42,"box":{"x":117,"y":227,"width":292,"height":9}},{"id":"b257c19f-edb3-40bb-bc11-414c11deeba3","block_type":"box","text":"BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of","page_number":42,"box":{"x":117,"y":258,"width":769,"height":12}},{"id":"87df936b-b450-4d98-98c8-764d4054f22e","block_type":"box","text":"the Fund in which clients of BlackRock, or, to the extent permitted by the Commission and applicable","page_number":42,"box":{"x":116,"y":273,"width":754,"height":12}},{"id":"c07a73e8-90dc-44e0-a9b8-d1e8225d7405","block_type":"box","text":"law, BlackRock, serves as the counterparty, principal or issuer. In such cases, such party’s interests in","page_number":42,"box":{"x":117,"y":289,"width":764,"height":12}},{"id":"c87ee291-247b-4460-b8a5-5f03ee556c8f","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":42,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"67a76f8e-5efe-483a-b53b-62fc2b01287c","block_type":"box","text":"assure that the Fund obtains the best possible prices or terms in connection with the transactions. In","page_number":42,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"425ec68b-2eaa-4528-a339-152749342098","block_type":"box","text":"addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability","page_number":42,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"94c398a3-287d-4753-9644-44a1bbef727f","block_type":"box","text":"of BlackRock.","page_number":42,"box":{"x":116,"y":351,"width":107,"height":9}},{"id":"71af6d8e-235b-4e01-b624-dcfa4b291223","block_type":"box","text":"BlackRock may also create, write or issue derivatives for clients, the underlying securities, currencies","page_number":42,"box":{"x":117,"y":382,"width":755,"height":12}},{"id":"d38aac0c-fdf9-4aef-b8d7-83ad7a271c10","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":42,"box":{"x":116,"y":397,"width":706,"height":12}},{"id":"384164b2-8a58-4a51-9aff-295134ed629c","block_type":"box","text":"performance of the Fund. Additionally, an affiliate of BlackRock will create, write or issue options,","page_number":42,"box":{"x":117,"y":413,"width":724,"height":12}},{"id":"51b95341-a9c7-4ec9-a581-8ca8add7ac0a","block_type":"box","text":"which may be based on the performance of the Fund. BlackRock has entered into an arrangement with","page_number":42,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"a055a0cf-cf26-4b97-9406-76d585837ae5","block_type":"box","text":"Markit Indices Limited, the index provider for underlying fixed-income indexes used by certain iShares","page_number":42,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"559b3eb6-b37f-472e-86c5-2e1a6dc2abec","block_type":"box","text":"ETFs, related to derivative fixed-income products that are based on such iShares ETFs. Trading","page_number":42,"box":{"x":117,"y":459,"width":718,"height":12}},{"id":"2dd7929d-d5a3-4a60-a77d-8ed6c6ea3cd9","block_type":"box","text":"activity in these derivative products could also potentially lead to greater liquidity for such products,","page_number":42,"box":{"x":116,"y":475,"width":739,"height":12}},{"id":"c3d0045f-e5f7-42a3-a5e4-b58167cb1534","block_type":"box","text":"increased purchase activity with respect to these iShares ETFs and increased assets under","page_number":42,"box":{"x":117,"y":490,"width":684,"height":12}},{"id":"d1555f1e-ba76-4e3f-ba22-68ae09f3ba03","block_type":"box","text":"management for BlackRock.","page_number":42,"box":{"x":117,"y":506,"width":215,"height":12}},{"id":"1b2e25d1-be5f-4af5-87ba-a97bec758697","block_type":"box","text":"The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting","page_number":42,"box":{"x":116,"y":537,"width":764,"height":12}},{"id":"279b5c3b-c985-4da9-a719-2d9283ef2883","block_type":"box","text":"or other distribution by BlackRock and may also enter into transactions with other clients of BlackRock","page_number":42,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"9d693aa3-5685-45ad-876a-f7c02e09c2f3","block_type":"box","text":"where such other clients have interests adverse to those of the Fund. At times, these activities may","page_number":42,"box":{"x":116,"y":568,"width":741,"height":12}},{"id":"8b37ed40-c008-4cd1-908b-e51c0b19b544","block_type":"box","text":"cause business units or entities within BlackRock to give advice to clients that may cause these clients","page_number":42,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"4f5a683b-2703-4549-abbe-e6c48e17a078","block_type":"box","text":"to take actions adverse to the interests of the Fund. To the extent such transactions are permitted, the","page_number":42,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"2765c24b-495b-4f78-b6d5-ef0f9f293352","block_type":"box","text":"Fund will deal with BlackRock on an arms-length basis.","page_number":42,"box":{"x":117,"y":614,"width":414,"height":12}},{"id":"15c3f020-3110-469b-a9f4-0eba821779e8","block_type":"box","text":"To the extent authorized by applicable law, BlackRock may act as broker, dealer, agent, lender or","page_number":42,"box":{"x":116,"y":645,"width":729,"height":12}},{"id":"a1ead31b-f424-4537-b028-50ab634530a5","block_type":"box","text":"adviser or in other commercial capacities for the Fund. It is anticipated that the commissions,","page_number":42,"box":{"x":116,"y":661,"width":688,"height":12}},{"id":"c838481a-0b85-409c-85ad-a83de88d37a3","block_type":"box","text":"mark-ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing","page_number":42,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"a65e4d01-29a2-44d2-b8e6-772adabc046f","block_type":"box","text":"and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions","page_number":42,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"8d6e956a-c815-46ab-b15a-685000959d4f","block_type":"box","text":"charged by BlackRock will be in its view commercially reasonable, although BlackRock, including its","page_number":42,"box":{"x":116,"y":707,"width":741,"height":12}},{"id":"72cac94f-526a-4872-8a24-1c8dac559120","block_type":"box","text":"sales personnel, will have an interest in obtaining fees and other amounts that are favorable to","page_number":42,"box":{"x":116,"y":723,"width":701,"height":12}},{"id":"0ff594c6-5b2e-489e-a430-1fb3c9a2428c","block_type":"box","text":"BlackRock and such sales personnel, which may have an adverse effect on the Fund. Index based","page_number":42,"box":{"x":117,"y":738,"width":732,"height":12}},{"id":"b7571f3a-16f2-49ad-892d-900262a962d9","block_type":"box","text":"funds may use an index provider that is affiliated with another service provider of the Fund or","page_number":42,"box":{"x":116,"y":754,"width":690,"height":12}},{"id":"7768308d-59fb-454c-80f4-a0fa18387ab0","block_type":"box","text":"BlackRock that acts as a broker, dealer, agent, lender or in other commercial capacities for the Fund or","page_number":42,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"91977904-aac4-4f8c-9688-266a516d3e23","block_type":"box","text":"BlackRock.","page_number":42,"box":{"x":117,"y":785,"width":81,"height":9}},{"id":"6ab004da-6095-4908-9caf-a0c9ffe2d3f6","block_type":"box","text":"Subject to applicable law, BlackRock (and its personnel and other distributors) will be entitled to retain","page_number":42,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"f579e146-26fd-4cc7-81a8-5d4bac013e3d","block_type":"box","text":"fees and other amounts that they receive in connection with their service to the Fund as broker, dealer,","page_number":42,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"ba14ae73-f672-4d49-a75b-72cd70ddf746","block_type":"box","text":"agent, lender, adviser or in other commercial capacities. No accounting to the Fund or its shareholders","page_number":42,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"9693ae96-9f3d-4792-8067-18ff0af4afbb","block_type":"box","text":"will be required, and no fees or other compensation payable by the Fund or its shareholders will be","page_number":42,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"8bbfa4d9-6a8f-491c-bfff-4ab259ac99ca","block_type":"box","text":"reduced by reason of receipt by BlackRock of any such fees or other amounts.","page_number":42,"box":{"x":117,"y":878,"width":587,"height":12}},{"id":"09a2ecc6-917c-4fb6-8b66-b97f2a417f04","block_type":"box","text":"33","page_number":42,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b211cb23-76e2-4d95-85ed-8970f5f057c6","block_type":"box","text":"NM1026U-6004408-42/267","page_number":42,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"468bd4f1-b98b-4748-b541-f2a693b5bec1","block_type":"box","text":"When BlackRock acts as broker, dealer, agent, adviser or in other commercial capacities in relation to","page_number":43,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"3a8a2750-47b3-4241-8571-6d6141a7fa7e","block_type":"box","text":"the Fund, BlackRock may take commercial steps in its own interests, which may have an adverse","page_number":43,"box":{"x":116,"y":103,"width":730,"height":12}},{"id":"91030967-9b6f-4f53-b26b-913b35e3afb5","block_type":"box","text":"effect on the Fund.","page_number":43,"box":{"x":116,"y":118,"width":145,"height":10}},{"id":"88c6bedc-afa5-4ea3-96b5-62a4582cf805","block_type":"box","text":"The Fund will be required to establish business relationships with its counterparties based on the","page_number":43,"box":{"x":116,"y":149,"width":724,"height":12}},{"id":"9c371e10-4384-41d0-9cfd-3facb69d2913","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":43,"box":{"x":117,"y":165,"width":728,"height":12}},{"id":"0e99782b-3ffd-4da0-a724-3f1f8442cccf","block_type":"box","text":"connection with the Fund’s establishment of its business relationships, nor is it expected that the","page_number":43,"box":{"x":116,"y":180,"width":720,"height":12}},{"id":"100e651c-3bbd-404b-8a56-bc9db45c575b","block_type":"box","text":"Fund’s counterparties will rely on the credit of BlackRock in evaluating the Fund’s creditworthiness.","page_number":43,"box":{"x":117,"y":196,"width":738,"height":12}},{"id":"5da12c9c-2723-4416-be1f-c0290e20a2b0","block_type":"box","text":"BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, pursuant to SEC exemptive","page_number":43,"box":{"x":117,"y":227,"width":752,"height":12}},{"id":"a8521db0-910d-4224-9bfe-f4d446bba344","block_type":"box","text":"relief, acts as securities lending agent to, and receives a share of securities lending revenues from, the","page_number":43,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"1d4536ea-b932-49aa-a29b-2a90884f8248","block_type":"box","text":"Fund. BlackRock will also receive compensation for managing the reinvestment of the cash collateral","page_number":43,"box":{"x":117,"y":258,"width":754,"height":12}},{"id":"e03553d9-f94f-4755-be53-ed9da1f67ec7","block_type":"box","text":"from securities lending. There are potential conflicts of interests in managing a securities lending","page_number":43,"box":{"x":116,"y":273,"width":721,"height":12}},{"id":"76e2ad3a-815a-4d2a-91a2-55858a1af38e","block_type":"box","text":"program, including but not limited to: (i) BlackRock as securities lending agent may have an incentive","page_number":43,"box":{"x":117,"y":289,"width":755,"height":12}},{"id":"8212bc23-0538-47f1-90c1-7197a50af46a","block_type":"box","text":"to, among other things, increase or decrease the amount of securities on loan or to lend particular","page_number":43,"box":{"x":116,"y":304,"width":731,"height":12}},{"id":"5fe50300-2d2f-4aea-934a-7bb08669875c","block_type":"box","text":"securities in order to generate additional risk-adjusted revenue for BlackRock and its affiliates; and","page_number":43,"box":{"x":116,"y":320,"width":736,"height":12}},{"id":"834bb61b-c022-40fc-a685-bc0b0e624e33","block_type":"box","text":"(ii) BlackRock as securities lending agent may have an incentive to allocate loans to clients that would","page_number":43,"box":{"x":117,"y":335,"width":761,"height":12}},{"id":"fa8c2547-46da-4dd2-8b3d-9c53432cc435","block_type":"box","text":"provide more revenue to BlackRock. As described further below, BlackRock seeks to mitigate this","page_number":43,"box":{"x":117,"y":351,"width":729,"height":12}},{"id":"0273d746-1bd3-4555-a91f-00690e30fcba","block_type":"box","text":"conflict by providing its securities lending clients with equal lending opportunities over time in order to","page_number":43,"box":{"x":116,"y":366,"width":755,"height":12}},{"id":"b6bd63d4-13c5-415a-8993-9482efca9ce6","block_type":"box","text":"approximate","page_number":43,"box":{"x":116,"y":382,"width":92,"height":12}},{"id":"1dd2ebbb-1c13-4fae-8e2f-26831c5958c0","block_type":"box","text":"pro rata","page_number":43,"box":{"x":208,"y":382,"width":63,"height":12}},{"id":"7dfbb33b-2fdb-4292-9a5a-daca7279e530","block_type":"box","text":"allocation.","page_number":43,"box":{"x":271,"y":382,"width":85,"height":9}},{"id":"e198f6a1-5e9e-419d-b206-4ac2d4377982","block_type":"box","text":"As part of its securities lending program, BlackRock indemnifies the Fund and certain other clients and/","page_number":43,"box":{"x":116,"y":413,"width":766,"height":12}},{"id":"1b932a35-e1bf-48dd-b119-713738d1674a","block_type":"box","text":"or funds against a shortfall in collateral in the event of borrower default. On a regular basis, BlackRock","page_number":43,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"d4c2c84a-805c-4cba-bca2-9cf8c044b12e","block_type":"box","text":"calculates the potential dollar exposure of collateral shortfall resulting from a borrower default (“shortfall","page_number":43,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"9683675c-7f55-4b8d-9c4a-573153c13ce9","block_type":"box","text":"risk”) in the securities lending program. BlackRock establishes program-wide borrower limits (“credit","page_number":43,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"a5908c81-d825-4190-86b4-7637bd5b4d9d","block_type":"box","text":"limits”) to actively manage borrower-specific credit exposure. BlackRock oversees the risk model that","page_number":43,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"ee09946b-21b4-4f37-9a50-c9b02a5b4048","block_type":"box","text":"calculates projected collateral shortfall values using loan-level factors such as loan and collateral type","page_number":43,"box":{"x":116,"y":490,"width":759,"height":12}},{"id":"ceb63814-248b-4d06-857a-ee9f61849571","block_type":"box","text":"and market value as well as specific borrower credit characteristics. When necessary, BlackRock may","page_number":43,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"a1bb2054-6ccb-4f6f-9eb1-e77d8642fddd","block_type":"box","text":"adjust securities lending program attributes by restricting eligible collateral or reducing borrower credit","page_number":43,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"426be5ea-2197-4215-b1c0-fdd7162ce02e","block_type":"box","text":"limits. As a result, the management of program-wide exposure as well as BlackRock-specific","page_number":43,"box":{"x":117,"y":537,"width":691,"height":12}},{"id":"737b71fe-8808-4a87-8784-a5c69c5241e6","block_type":"box","text":"indemnification exposure may affect the amount of securities lending activity BlackRock may conduct","page_number":43,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"0b80e7ca-9f4b-4396-8075-2ca1edd2f335","block_type":"box","text":"at any given point in time by reducing the volume of lending opportunities for certain loans (including by","page_number":43,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"32d8144d-63e5-4196-b2e4-30cf8349623d","block_type":"box","text":"asset type, collateral type and/or revenue profile).","page_number":43,"box":{"x":116,"y":583,"width":373,"height":12}},{"id":"54ffd72f-bf87-4783-b56a-b3544d095186","block_type":"box","text":"BlackRock may decline to make a securities loan on behalf of the Fund, discontinue lending on behalf","page_number":43,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"70e82264-801a-467f-9f38-b6a3d2f14599","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":43,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"950b5216-52d7-4422-a470-892d7841663c","block_type":"box","text":"to regulatory requirements and/or market rules, liquidity considerations, or credit considerations, which","page_number":43,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"739485b2-6d73-4446-bc4d-0c0c640ca062","block_type":"box","text":"may impact the Fund by reducing or eliminating the volume of lending opportunities for certain types of","page_number":43,"box":{"x":117,"y":661,"width":762,"height":12}},{"id":"6462b3d4-8268-42a3-8083-9efd0b6f3d11","block_type":"box","text":"loans, loans in particular markets, loans of particular securities or types of securities, or for loans","page_number":43,"box":{"x":117,"y":676,"width":715,"height":12}},{"id":"64549958-f171-482a-9e31-4ba0cc05679f","block_type":"box","text":"overall. In addition, some borrowers may prefer certain BlackRock lenders that provide additional","page_number":43,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"e8dbc58c-3a37-4cb5-bcc5-8bd40a9d6c1c","block_type":"box","text":"protections against lender default that are favored by their prudential regulation.","page_number":43,"box":{"x":117,"y":707,"width":590,"height":12}},{"id":"2b605496-7dca-4bb9-9de0-ece7910569b3","block_type":"box","text":"BlackRock uses a predetermined systematic process in order to approximate pro rata allocation over","page_number":43,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"ddc9684c-6e5b-4a4a-9e5d-667ce59263e6","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":43,"box":{"x":116,"y":754,"width":733,"height":12}},{"id":"36752fab-8965-47e2-8c32-e6db4c08c0b3","block_type":"box","text":"capacity pursuant to the various program limits (","page_number":43,"box":{"x":116,"y":769,"width":358,"height":12}},{"id":"4a747e13-452d-4964-a803-b9c3d0035c62","block_type":"box","text":"i.e.","page_number":43,"box":{"x":475,"y":769,"width":20,"height":10}},{"id":"110203d4-8eb6-4a45-bb84-bd94f432d1a3","block_type":"box","text":"indemnification exposure limit and borrower credit","page_number":43,"box":{"x":502,"y":769,"width":370,"height":12}},{"id":"436e5f65-1614-4682-8e5a-2e67fd648648","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":43,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"c7713b40-f504-4946-b401-0cf56b51dc41","block_type":"box","text":"lending portfolio must also have enough inventory, either on its own or when aggregated with other","page_number":43,"box":{"x":117,"y":800,"width":733,"height":12}},{"id":"5b35fdb6-4b73-4892-bd20-63854d8f27bc","block_type":"box","text":"portfolios into one single market delivery, to satisfy the loan request. In doing so, BlackRock seeks to","page_number":43,"box":{"x":117,"y":816,"width":748,"height":12}},{"id":"590fdb6a-a138-4df3-9394-4307bdd87b95","block_type":"box","text":"provide equal lending opportunities for all portfolios, independent of whether BlackRock indemnifies the","page_number":43,"box":{"x":117,"y":831,"width":770,"height":12}},{"id":"fb12e2f7-8f52-4e9f-9d47-3d3c13d00538","block_type":"box","text":"portfolio. Equal opportunities for lending portfolios does not guarantee equal outcomes. Specifically,","page_number":43,"box":{"x":117,"y":847,"width":744,"height":12}},{"id":"56fc6e86-3625-4a2f-b6fc-be5fa2231bdf","block_type":"box","text":"short and long-term outcomes for individual clients may vary due to asset mix, asset/liability spreads","page_number":43,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"360a0972-2031-4918-99f9-009fc6ffb976","block_type":"box","text":"on different securities, and the overall limits imposed by the firm.","page_number":43,"box":{"x":116,"y":878,"width":483,"height":12}},{"id":"b44e2ad8-f2f7-47ad-97f9-a9d3779d6262","block_type":"box","text":"34","page_number":43,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"7ab0d566-519f-433b-b4ac-8b6490398cb1","block_type":"box","text":"NM1026U-6004408-43/267","page_number":43,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1c84ce1c-009d-4cac-b60c-bc6c3ce7a67c","block_type":"box","text":"Purchases and sales of securities and other assets for the Fund may be aggregated with orders for","page_number":44,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"ae64ffac-0ba4-451a-ba0d-e76c8accc819","block_type":"box","text":"other BlackRock client accounts, including with accounts that pay different transaction costs solely due","page_number":44,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"aa0af83b-a56a-4854-b2d1-9a73feab9e6c","block_type":"box","text":"to the fact that they have different research payment arrangements. BlackRock, however, is not","page_number":44,"box":{"x":116,"y":118,"width":714,"height":12}},{"id":"22d7da2f-0611-4360-8a5f-8b601ac29190","block_type":"box","text":"required to aggregate orders if portfolio management decisions for different accounts are made","page_number":44,"box":{"x":117,"y":134,"width":710,"height":12}},{"id":"7f310b76-8d55-48c9-94fb-5b3e4adfc111","block_type":"box","text":"separately, or if they determine that aggregating is not practicable or required, or in cases involving","page_number":44,"box":{"x":116,"y":149,"width":740,"height":12}},{"id":"79a51f99-47f9-4c8d-893b-80d73a7e710d","block_type":"box","text":"client direction.","page_number":44,"box":{"x":116,"y":165,"width":117,"height":9}},{"id":"999a328b-694b-405f-80d2-4060c1ca30db","block_type":"box","text":"Prevailing trading activity frequently may make impossible the receipt of the same price or execution","page_number":44,"box":{"x":117,"y":196,"width":748,"height":12}},{"id":"9df3aa3f-0156-49f1-9cb5-7d5a8576c205","block_type":"box","text":"on the entire volume of securities purchased or sold. When this occurs, the various prices may be","page_number":44,"box":{"x":116,"y":211,"width":730,"height":12}},{"id":"922a52d4-3ff1-4a35-a319-fca5591ef23a","block_type":"box","text":"averaged, and the Fund will be charged or credited with the average price. Thus, the effect of the","page_number":44,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"96211f27-7ba3-4b0a-b026-6cbe2226cf45","block_type":"box","text":"aggregation may operate on some occasions to the disadvantage of the Fund. In addition, under","page_number":44,"box":{"x":116,"y":242,"width":721,"height":12}},{"id":"8ffc11b9-4f92-4e36-9c26-65af6dc9ba7d","block_type":"box","text":"certain circumstances, the Fund will not be charged the same commission or commission equivalent","page_number":44,"box":{"x":116,"y":258,"width":750,"height":12}},{"id":"d81eb9ab-9c4f-4c90-b337-1cf967a35e66","block_type":"box","text":"rates in connection with an aggregated order.","page_number":44,"box":{"x":117,"y":273,"width":341,"height":12}},{"id":"56639c64-ac15-460e-8776-ef68dc4b5d51","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may cause the Fund or account to pay a broker or","page_number":44,"box":{"x":117,"y":304,"width":734,"height":12}},{"id":"778f84c3-f8ad-497a-816b-bd1df207f04d","block_type":"box","text":"dealer a commission for effecting a transaction that exceeds the amount another broker or dealer","page_number":44,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"769301f5-0911-4047-a37a-ddb1c9cc3c08","block_type":"box","text":"would have charged for effecting the same transaction in recognition of the value of brokerage and","page_number":44,"box":{"x":116,"y":335,"width":737,"height":12}},{"id":"026dfabd-f52c-461c-9bde-e186c31de3d8","block_type":"box","text":"research services provided by that broker or dealer. Under the European Union Markets in Financial","page_number":44,"box":{"x":117,"y":351,"width":747,"height":12}},{"id":"db5b7349-bf37-4c9d-aa26-4f9eadee8d5e","block_type":"box","text":"Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments Regulation","page_number":44,"box":{"x":117,"y":366,"width":701,"height":12}},{"id":"03b4001f-041d-4154-a31d-b1eca5279253","block_type":"box","text":"(Regulation (EU) No 600/2014), EU investment managers, including BIL, pay for research from brokers","page_number":44,"box":{"x":117,"y":382,"width":770,"height":12}},{"id":"cb1f55d4-f86a-4592-988f-a9fdb68e779f","block_type":"box","text":"and dealers directly out of their own resources, rather than through client commissions.","page_number":44,"box":{"x":116,"y":397,"width":652,"height":12}},{"id":"bf3d7ff2-5d03-48fa-ba8b-5a64fb5cc221","block_type":"box","text":"Subject to applicable law, BlackRock may select brokers that furnish BlackRock, the Fund, other","page_number":44,"box":{"x":116,"y":428,"width":720,"height":12}},{"id":"875a6204-c32a-4504-aea6-1b9a604efcde","block_type":"box","text":"BlackRock client accounts or personnel, directly or through correspondent relationships, with research","page_number":44,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"8ed3c485-b3ff-4cbe-af73-89cb43f1e2d6","block_type":"box","text":"or other appropriate services which provide, in BlackRock’s view, appropriate assistance to BlackRock","page_number":44,"box":{"x":116,"y":459,"width":765,"height":12}},{"id":"348c96c0-4753-4925-9364-6342438a6560","block_type":"box","text":"in the investment decision-making process (including with respect to futures, fixed-price offerings and","page_number":44,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"865e0587-1e60-4908-99d1-4464601e6615","block_type":"box","text":"OTC transactions). Such research or other services may include, to the extent permitted by law,","page_number":44,"box":{"x":116,"y":490,"width":717,"height":12}},{"id":"55b0b625-e657-4753-b5d3-8db64052dc1e","block_type":"box","text":"research reports on companies, industries and securities; economic and financial data; financial","page_number":44,"box":{"x":117,"y":506,"width":714,"height":12}},{"id":"7a42c343-8609-4545-b23a-392fd8ce781d","block_type":"box","text":"publications; proxy analysis; trade industry seminars; computer data bases; research-oriented software","page_number":44,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"dec7d92a-6152-42ca-8e23-cdf4b7f64412","block_type":"box","text":"and other services and products.","page_number":44,"box":{"x":116,"y":537,"width":249,"height":12}},{"id":"2be2d9ca-5a1a-4a52-9869-6801600abcb9","block_type":"box","text":"Research or other services obtained in this manner may be used in servicing any or all of the Fund and","page_number":44,"box":{"x":117,"y":568,"width":770,"height":12}},{"id":"cbf62001-c803-4457-959f-4dc276b17a30","block_type":"box","text":"other BlackRock client accounts, including in connection with BlackRock client accounts other than","page_number":44,"box":{"x":116,"y":583,"width":738,"height":12}},{"id":"820eff63-5e0e-4bec-96a8-af910fd777c7","block_type":"box","text":"those that pay commissions to the broker relating to the research or other service arrangements. Such","page_number":44,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"6dc659e8-e090-43bb-b963-5dbbaf3b8753","block_type":"box","text":"products and services may disproportionately benefit other BlackRock client accounts relative to the","page_number":44,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"d1d8ace4-d628-45a6-b291-8d3848f76ab2","block_type":"box","text":"Fund based on the amount of brokerage commissions paid by the Fund and such other BlackRock","page_number":44,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"e9616d05-6d91-4365-afcf-03a93ef5e3de","block_type":"box","text":"client accounts. For example, research or other services that are paid for through one client’s","page_number":44,"box":{"x":116,"y":645,"width":696,"height":12}},{"id":"7d1bb681-ea5c-4e50-9d83-c9fc17d15037","block_type":"box","text":"commissions may not be used in managing that client’s account. In addition, other BlackRock client","page_number":44,"box":{"x":116,"y":661,"width":738,"height":12}},{"id":"d50ed9a7-edc1-4340-a2ae-0c2cd6e10602","block_type":"box","text":"accounts may receive the benefit, including disproportionate benefits, of economies of scale or price","page_number":44,"box":{"x":116,"y":676,"width":743,"height":12}},{"id":"355138e2-188f-4887-afd2-171d48a231f5","block_type":"box","text":"discounts in connection with products and services that may be provided to the Fund and to such other","page_number":44,"box":{"x":116,"y":692,"width":764,"height":12}},{"id":"bfa8e170-763c-4722-a14e-2993b45d4125","block_type":"box","text":"BlackRock client accounts. To the extent that BlackRock uses soft dollars, it will not have to pay for","page_number":44,"box":{"x":117,"y":707,"width":735,"height":12}},{"id":"f9669cfa-6c66-4c9c-a72f-e066ba9bda71","block_type":"box","text":"those products and services itself.","page_number":44,"box":{"x":116,"y":723,"width":252,"height":12}},{"id":"d4585fc3-e881-4a7d-be05-9fc5dc569454","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may endeavor to execute trades through brokers who,","page_number":44,"box":{"x":117,"y":754,"width":759,"height":12}},{"id":"9858d81f-cdfb-4848-891f-7f7c8c11746c","block_type":"box","text":"pursuant to such arrangements, provide research or other services in order to ensure the continued","page_number":44,"box":{"x":117,"y":769,"width":737,"height":12}},{"id":"89faa970-8b00-4f53-a0a8-e85c62d5471e","block_type":"box","text":"receipt of research or other services BlackRock believes are useful in its investment decision-making","page_number":44,"box":{"x":117,"y":785,"width":747,"height":12}},{"id":"6e6d8399-c8b1-4712-a6a3-358c7b354e5f","block_type":"box","text":"process. BlackRock may from time to time choose not to engage in the above described arrangements","page_number":44,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"a5b9d756-1292-42ef-b05c-f924f78df3e9","block_type":"box","text":"to varying degrees. BlackRock, unless prohibited by applicable law, may also enter into commission","page_number":44,"box":{"x":116,"y":816,"width":740,"height":12}},{"id":"88eb6d1e-814a-4430-97c7-470ef05df9dc","block_type":"box","text":"sharing arrangements under which BlackRock may execute transactions through a broker-dealer and","page_number":44,"box":{"x":116,"y":831,"width":757,"height":12}},{"id":"ca32ce9b-1710-4242-9128-75bd72676435","block_type":"box","text":"request that the broker-dealer allocate a portion of the commissions or commission credits to another","page_number":44,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"e8a18efe-6d87-40d6-af7f-4e9ef45706fc","block_type":"box","text":"firm that provides research to BlackRock. To the extent that BlackRock engages in commission sharing","page_number":44,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"1b01672a-8277-49cc-95b3-7a7ab51d5104","block_type":"box","text":"arrangements, many of the same conflicts related to traditional soft dollars may exist.","page_number":44,"box":{"x":116,"y":878,"width":636,"height":12}},{"id":"e761a46f-615d-431b-94d0-baf0633b12ad","block_type":"box","text":"35","page_number":44,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"721127b5-5f1c-40dd-8654-3489b88a626c","block_type":"box","text":"NM1026U-6004408-44/267","page_number":44,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"af3d534e-f623-42d1-ba28-1cf5431afd96","block_type":"box","text":"BlackRock may utilize certain electronic crossing networks (“ECNs”) (including, without limitation,","page_number":45,"box":{"x":117,"y":87,"width":724,"height":12}},{"id":"c938bfe8-9435-4d8a-912a-bcf339f054d8","block_type":"box","text":"ECNs in which BlackRock has an investment or other interest, to the extent permitted by applicable","page_number":45,"box":{"x":117,"y":102,"width":741,"height":13}},{"id":"794ddcdf-beaf-429c-a77b-122a393cd0a7","block_type":"box","text":"law) in executing client securities transactions for certain types of securities. These ECNs may charge","page_number":45,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"c8fe1637-df7e-4d57-8db9-7c9deb3811d6","block_type":"box","text":"fees for their services, including access fees and transaction fees. The transaction fees, which are","page_number":45,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"e7100831-f840-4196-8b13-16f39adf4d0d","block_type":"box","text":"similar to commissions or markups/markdowns, will generally be charged to clients and, like","page_number":45,"box":{"x":116,"y":149,"width":686,"height":12}},{"id":"d93de6f0-4631-4872-8cde-01ef237513a8","block_type":"box","text":"commissions and markups/markdowns, would generally be included in the cost of the securities","page_number":45,"box":{"x":116,"y":165,"width":715,"height":12}},{"id":"0f28beb6-c6e8-4da7-9ac4-716d137961c3","block_type":"box","text":"purchased. Access fees may be paid by BlackRock even though incurred in connection with executing","page_number":45,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"68989d6a-06f8-420b-a791-80d71526cc98","block_type":"box","text":"transactions on behalf of clients, including the Fund. In certain circumstances, ECNs may offer volume","page_number":45,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"9ced4149-4a5f-4bbd-bf7e-2a64a98e812d","block_type":"box","text":"discounts that will reduce the access fees typically paid by BlackRock. BlackRock will only utilize ECNs","page_number":45,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"d16a2354-e0f5-40c8-af1d-5cf14861438d","block_type":"box","text":"consistent with its obligation to seek to obtain best execution in client transactions.","page_number":45,"box":{"x":116,"y":227,"width":616,"height":12}},{"id":"f994b17d-4bf2-4783-b19d-67433bb19dac","block_type":"box","text":"BlackRock owns a minority interest in, and is a member of, Members Exchange (“MEMX”), a newly","page_number":45,"box":{"x":117,"y":258,"width":739,"height":12}},{"id":"dd7dba92-ba9f-4ac6-a820-387069b88397","block_type":"box","text":"created U.S. stock exchange. Transactions for the Fund may be executed on MEMX if third party","page_number":45,"box":{"x":116,"y":273,"width":725,"height":12}},{"id":"d49d80b7-7459-4a79-8a2e-34c9a7699fde","block_type":"box","text":"brokers select MEMX as the appropriate venue for execution of orders placed by BlackRock traders on","page_number":45,"box":{"x":117,"y":289,"width":768,"height":12}},{"id":"d1f59f24-c14d-4efe-8b8f-e739c8154ea3","block_type":"box","text":"behalf of the Fund. In addition, transactions in Fund shares may be executed on MEMX if third party","page_number":45,"box":{"x":117,"y":304,"width":746,"height":12}},{"id":"ae938ef8-8944-4fd9-85a4-6a6056eb675d","block_type":"box","text":"brokers select MEMX as the appropriate venue for the execution of such orders.","page_number":45,"box":{"x":117,"y":320,"width":600,"height":12}},{"id":"6b07dba1-e505-409b-ba62-30957b46cdea","block_type":"box","text":"BlackRock has adopted policies and procedures designed to prevent conflicts of interest from","page_number":45,"box":{"x":117,"y":351,"width":697,"height":12}},{"id":"21efdb74-1810-4938-b044-2e8b9c312ab2","block_type":"box","text":"influencing proxy voting decisions that it makes on behalf of advisory clients, including the Fund, and to","page_number":45,"box":{"x":117,"y":366,"width":769,"height":12}},{"id":"72973a77-9854-4cfd-b244-8bb53317a9ae","block_type":"box","text":"help ensure that such decisions are made in accordance with BlackRock’s fiduciary obligations to its","page_number":45,"box":{"x":117,"y":382,"width":748,"height":12}},{"id":"544e9311-aea4-4635-80f5-acaa8f0d4429","block_type":"box","text":"clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting","page_number":45,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"d795c97f-1a84-4a53-85b6-56f85cc4fbe8","block_type":"box","text":"decisions of BlackRock may have the effect of favoring the interests of other clients or businesses of","page_number":45,"box":{"x":116,"y":413,"width":750,"height":12}},{"id":"fccfd0e7-e96c-4c13-92da-b245a4ea7790","block_type":"box","text":"other divisions or units of BlackRock, provided that BlackRock believes such voting decisions to be in","page_number":45,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"461bdf2e-3bc3-4633-92ee-657e78c5a811","block_type":"box","text":"accordance with its fiduciary obligations. For a more detailed discussion of these policies and","page_number":45,"box":{"x":116,"y":444,"width":696,"height":12}},{"id":"381c7c89-535a-44d8-b311-4e589dc57bb9","block_type":"box","text":"procedures, see the","page_number":45,"box":{"x":117,"y":459,"width":147,"height":12}},{"id":"adcb3b76-fc65-4113-8d75-d6340d94a9a4","block_type":"box","text":"Proxy Voting Policy","page_number":45,"box":{"x":264,"y":459,"width":151,"height":12}},{"id":"298b6253-ff90-4796-ba8b-6e2f8af98bc0","block_type":"box","text":"y section in this SAI.","page_number":45,"box":{"x":414,"y":459,"width":148,"height":10}},{"id":"ded16bd0-7f32-42dc-9020-d1d6ec66eb60","block_type":"box","text":"It is also possible that, from time","page_number":45,"box":{"x":117,"y":490,"width":238,"height":12}},{"id":"fd0eb0ee-70ae-4274-aaa6-016f089b5839","block_type":"box","text":"to time, BlackRock and/or its advisory clients (including other funds and","page_number":45,"box":{"x":355,"y":490,"width":524,"height":12}},{"id":"20ad355c-e18f-4fb2-a41e-5cfbf78c63c7","block_type":"box","text":"separately managed accounts) may, subject to","page_number":45,"box":{"x":116,"y":506,"width":345,"height":12}},{"id":"1fc63bb6-af80-4bff-85ca-fbd01ac8598f","block_type":"box","text":"compliance with applicable law, purchase and hold","page_number":45,"box":{"x":462,"y":506,"width":373,"height":12}},{"id":"3247b2f3-f3c9-47ac-bcde-a36958654ecc","block_type":"box","text":"shares of the Fund. Increasing the Fund’s assets ma","page_number":45,"box":{"x":116,"y":521,"width":383,"height":12}},{"id":"9dfc06d2-6a8b-4525-964c-d3c1ec4b5976","block_type":"box","text":"y enhance investment flexibility and diversification","page_number":45,"box":{"x":500,"y":521,"width":366,"height":12}},{"id":"0a55d5ce-5b12-4d9b-a3b4-d111c343e1aa","block_type":"box","text":"and may contribute to economies of scale that","page_number":45,"box":{"x":116,"y":537,"width":340,"height":12}},{"id":"3eeb2848-53fd-4ce4-a8bf-18aaa021178c","block_type":"box","text":"tend to reduce the Fund’s expense ratio. BlackRock","page_number":45,"box":{"x":456,"y":537,"width":382,"height":12}},{"id":"ab8da5e2-bb37-4d68-b04c-920f73a5e429","block_type":"box","text":"reserves the right, subject to compliance with applicable","page_number":45,"box":{"x":117,"y":552,"width":410,"height":12}},{"id":"d24ca83f-99f8-4c1f-9726-0b5c3ddc47e1","block_type":"box","text":"law, to sell into the market or redeem in Creation","page_number":45,"box":{"x":528,"y":552,"width":358,"height":11}},{"id":"b69aa1ef-b37d-49c3-8e1f-53a69da54f64","block_type":"box","text":"Units through an Authorized Participant at any time some","page_number":45,"box":{"x":117,"y":568,"width":415,"height":12}},{"id":"32ab15f9-2324-4ef3-ae77-61cb769f0d27","block_type":"box","text":"or all of the shares of the Fund acquired for its","page_number":45,"box":{"x":532,"y":568,"width":345,"height":12}},{"id":"49129705-83f7-486b-8991-4142dbb0671c","block_type":"box","text":"own accounts or the account of a BlackRock advisory cli","page_number":45,"box":{"x":116,"y":583,"width":409,"height":12}},{"id":"4e1d2fca-0b16-43a5-b838-d54081542c66","block_type":"box","text":"ent. A large sale or redemption of shares of the","page_number":45,"box":{"x":526,"y":583,"width":347,"height":12}},{"id":"85914762-3d0e-45af-b94b-e0b64b2a4664","block_type":"box","text":"Fund by BlackRock itself or a BlackRock advisory client","page_number":45,"box":{"x":117,"y":599,"width":408,"height":12}},{"id":"476ec2f8-2aee-4901-ba1d-37efd49241bb","block_type":"box","text":"could significantly reduce the asset size of the","page_number":45,"box":{"x":525,"y":599,"width":338,"height":12}},{"id":"f3180234-f480-4981-ada2-b3d64ca4bdc0","block_type":"box","text":"Fund, which might have an adverse effect on the Fund’","page_number":45,"box":{"x":117,"y":614,"width":399,"height":12}},{"id":"7407c1a1-65d4-424a-b62c-7fc85c992c50","block_type":"box","text":"s liquidity, investment flexibility, portfolio","page_number":45,"box":{"x":517,"y":614,"width":294,"height":12}},{"id":"f9fd2831-2829-470f-8c0e-f7f1077ab33b","block_type":"box","text":"diversification, expense ratio or ability to co","page_number":45,"box":{"x":116,"y":630,"width":312,"height":12}},{"id":"cca097c1-19fe-4ab3-ab0a-b2ff43e885f4","block_type":"box","text":"mply with the listing requirements for the Fund.","page_number":45,"box":{"x":430,"y":630,"width":344,"height":12}},{"id":"665173f6-0160-4944-a2c0-71384ca4887a","block_type":"box","text":"It is possible that the Fund may invest in securities of, or engage in transactions with, companies in","page_number":45,"box":{"x":117,"y":661,"width":733,"height":12}},{"id":"1286e21a-3a03-40c5-8e92-e67ccf2e2c4b","block_type":"box","text":"which BlackRock has significant debt or equity investments or other interests. The Fund may also","page_number":45,"box":{"x":116,"y":676,"width":723,"height":12}},{"id":"68c84396-7c2f-4ca4-b956-2f524ee66653","block_type":"box","text":"invest in issuances (such as structured notes) by entities for which BlackRock provides and is","page_number":45,"box":{"x":117,"y":692,"width":693,"height":12}},{"id":"2eee5e75-8c9f-4d9a-9e74-05fa722da06b","block_type":"box","text":"compensated for cash management services relating to the proceeds from the sale of such issuances.","page_number":45,"box":{"x":116,"y":707,"width":759,"height":12}},{"id":"30f73458-22a7-4fdd-83d6-91e5157312f1","block_type":"box","text":"In making investment decisions for the Fund, BlackRock is not permitted to obtain or use","page_number":45,"box":{"x":117,"y":723,"width":657,"height":12}},{"id":"a170cabe-7689-4845-8815-48a2821235d5","block_type":"box","text":"material non-public information acquired by any unit of BlackRock, in the course of these activities. In","page_number":45,"box":{"x":117,"y":738,"width":749,"height":12}},{"id":"287079f5-2bd3-402f-8ede-93fe6d267691","block_type":"box","text":"addition, from time to time, the activities of BlackRock may limit the Fund’s flexibility in purchases and","page_number":45,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"12d3de0d-e630-488b-8df6-8b5e1e1329da","block_type":"box","text":"sales of securities. As indicated below, BlackRock may engage in transactions with companies in","page_number":45,"box":{"x":116,"y":769,"width":720,"height":12}},{"id":"844412f4-872a-476f-b588-9f64a50a2c1f","block_type":"box","text":"which BlackRock-advised funds or other clients of BlackRock have an investment.","page_number":45,"box":{"x":116,"y":785,"width":608,"height":9}},{"id":"f47e7c80-ad1c-4550-a53f-68c2f1142318","block_type":"box","text":"BlackRock and its personnel and other financial service providers may have interests in promoting","page_number":45,"box":{"x":117,"y":816,"width":727,"height":12}},{"id":"7023865b-bd9c-49de-bba5-9876dc0ff0f1","block_type":"box","text":"sales of the Fund. With respect to BlackRock and its personnel, the remuneration and profitability","page_number":45,"box":{"x":116,"y":831,"width":727,"height":12}},{"id":"01cbd2a9-f50b-4f74-b1fd-4e27846afc0b","block_type":"box","text":"relating to services to and sales of the Fund or other products may be greater than remuneration and","page_number":45,"box":{"x":117,"y":847,"width":753,"height":12}},{"id":"daae5d78-6008-46ce-9b1c-73a910af9ea8","block_type":"box","text":"profitability relating to services to and sales of certain funds or other products that might be provided or","page_number":45,"box":{"x":117,"y":862,"width":767,"height":12}},{"id":"fcdbc787-501f-4c12-8b4d-4e242a738904","block_type":"box","text":"offered. BlackRock and its sales personnel may directly or indirectly receive a portion of the fees and","page_number":45,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"8ffbe19b-09a5-41cb-bf2a-a7b4c49366a2","block_type":"box","text":"36","page_number":45,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ea97d9a2-0d32-44a7-bf21-155ff81b10cf","block_type":"box","text":"NM1026U-6004408-45/267","page_number":45,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2b044ff9-3df3-44cd-9f00-8e949391b564","block_type":"box","text":"commissions charged to the Fund or its shareholders. BlackRock and its advisory or other personnel","page_number":46,"box":{"x":116,"y":87,"width":752,"height":12}},{"id":"bfb60cdd-08f1-48cf-a9c5-492e54e07d31","block_type":"box","text":"may also benefit from increased amounts of assets under management. 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While BlackRock will generally communica","page_number":46,"box":{"x":117,"y":238,"width":430,"height":12}},{"id":"3a20dd65-56db-4d31-8638-520ed1879381","block_type":"box","text":"te its valuation information or determinations","page_number":46,"box":{"x":548,"y":238,"width":326,"height":10}},{"id":"0aa1763b-0179-4be3-b987-67158b816428","block_type":"box","text":"to the Fund’s pricing vendors and/or fund accountants,","page_number":46,"box":{"x":116,"y":254,"width":395,"height":12}},{"id":"ddd7697a-9ff3-4d48-953b-e56151c85356","block_type":"box","text":"there may be instances where the Fund’s pricing","page_number":46,"box":{"x":513,"y":254,"width":363,"height":12}},{"id":"ae440e7b-ba39-42fa-b7c0-f39f42d14030","block_type":"box","text":"vendors or fund accountants assign a different valuati","page_number":46,"box":{"x":116,"y":269,"width":388,"height":12}},{"id":"8a874154-31b5-4968-933a-d33d8d1f4f6d","block_type":"box","text":"on to a security or other investment than the","page_number":46,"box":{"x":506,"y":269,"width":325,"height":12}},{"id":"c529166f-6808-4ae9-8729-a1323f9f8f43","block_type":"box","text":"valuation for such security or inves","page_number":46,"box":{"x":116,"y":285,"width":251,"height":12}},{"id":"dea93398-a75b-4683-9e09-dd73f8abd3bd","block_type":"box","text":"tment determined or recommended by BlackRock.","page_number":46,"box":{"x":368,"y":285,"width":371,"height":12}},{"id":"2ef5f2ec-dae2-49f5-a0bb-02be3467e4c6","block_type":"box","text":"As disclosed in more detail in the","page_number":46,"box":{"x":116,"y":312,"width":245,"height":9}},{"id":"88f33b83-1175-438b-8325-60e709351772","block_type":"box","text":"Determination of Net Asset Value","page_number":46,"box":{"x":362,"y":312,"width":253,"height":9}},{"id":"290ba2ad-4bf5-4ec9-9378-45480b986cf2","block_type":"box","text":"section in this SAI, when market","page_number":46,"box":{"x":615,"y":312,"width":249,"height":11}},{"id":"5deac272-e73c-45eb-b2f6-3fdb049ac6ce","block_type":"box","text":"quotations are not readily available or are believed by BFA to be unreliable, the Fund’s investments are","page_number":46,"box":{"x":116,"y":327,"width":771,"height":12}},{"id":"773788f6-214d-443a-88ba-74a87ebd49ff","block_type":"box","text":"valued at fair value by BFA. BFA has been designated as the Fund’s valuation designee pursuant to","page_number":46,"box":{"x":116,"y":343,"width":748,"height":12}},{"id":"188fce8d-c5ad-4285-a4f9-a328d8fd345e","block_type":"box","text":"Rule 2a-5 under the Investment Company Act and acts through BFA’s Rule 2a-5 Committee","page_number":46,"box":{"x":117,"y":358,"width":688,"height":12}},{"id":"a6aebcad-2a83-43c9-bea2-2255dd3b7717","block_type":"box","text":"(the “2a-5 Committee”), with assistance from other BFA pricing committees and in accordance with","page_number":46,"box":{"x":117,"y":374,"width":738,"height":12}},{"id":"9d05036a-b5b8-4082-9f68-ccdce1266657","block_type":"box","text":"BFA’s policies and procedures (the “Valuation Procedures”). When determining a “fair value price,”","page_number":46,"box":{"x":117,"y":389,"width":737,"height":12}},{"id":"44d4e7f7-f4eb-4141-9c50-8e42cff11d87","block_type":"box","text":"the 2a-5 Committee seeks to determine the price that the Fund might reasonably expect to receive","page_number":46,"box":{"x":116,"y":405,"width":737,"height":12}},{"id":"7430a3c6-6460-4b94-8288-bfee5becff26","block_type":"box","text":"from the current sale of that asset or liability in an arm’s-length transaction. The price generally may","page_number":46,"box":{"x":116,"y":420,"width":745,"height":12}},{"id":"5b2ab2ab-12b9-4770-84ec-6d6e89891272","block_type":"box","text":"not be determined based on what the Fund might reasonably expect to receive for selling an asset or","page_number":46,"box":{"x":117,"y":436,"width":754,"height":12}},{"id":"c8466e56-148e-445f-a9fb-ae58583f3f91","block_type":"box","text":"liability at a later time or if it holds the asset or liability to maturity. While fair value determinations will","page_number":46,"box":{"x":117,"y":451,"width":750,"height":12}},{"id":"b08de3c7-73e5-411f-86f9-50abaa203bb5","block_type":"box","text":"be based upon all available factors that BFA deems relevant at the time of the determination, and may","page_number":46,"box":{"x":117,"y":467,"width":763,"height":12}},{"id":"7641677c-ea94-4a7f-af6d-6eb4a53dbf63","block_type":"box","text":"be based on analytical values determined by BFA using proprietary or third party valuation models, fair","page_number":46,"box":{"x":117,"y":482,"width":766,"height":12}},{"id":"a19e2e6e-fdb4-48b7-af01-137f35c00b02","block_type":"box","text":"value represents only a good faith approximation of the value of an asset or liability. The fair value of","page_number":46,"box":{"x":116,"y":498,"width":751,"height":12}},{"id":"68383066-5a0d-43fa-a8b9-8e010a049f6d","block_type":"box","text":"one or more assets or liabilities may not, in retrospect, be the price at which those assets or liabilities","page_number":46,"box":{"x":116,"y":514,"width":754,"height":11}},{"id":"77c709b6-4dfe-468d-845b-6e2132282b5e","block_type":"box","text":"could have been sold during the period in which the particular fair values were used in determining the","page_number":46,"box":{"x":116,"y":529,"width":764,"height":12}},{"id":"4169b0ce-f77c-44f3-9936-b3b5af3202ce","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":46,"box":{"x":117,"y":544,"width":760,"height":12}},{"id":"3dd4de63-9e34-4520-9b33-5120e47f33e4","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":46,"box":{"x":116,"y":560,"width":771,"height":12}},{"id":"bc31eed5-4eeb-43d5-9936-8e09a29759be","block_type":"box","text":"the economic interest of existing shareholders and may affect the amount of revenue received by BFA","page_number":46,"box":{"x":116,"y":575,"width":763,"height":12}},{"id":"e38f7435-03a7-43c9-89c1-d63a0718a36e","block_type":"box","text":"with respect to services for which it receives an asset-based fee.","page_number":46,"box":{"x":116,"y":591,"width":484,"height":12}},{"id":"e3125242-0dec-4f4a-aaaf-62cb57333353","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":46,"box":{"x":116,"y":618,"width":720,"height":12}},{"id":"52fe03bc-d6df-4dd3-845a-30f04eda5375","block_type":"box","text":"investments in any money market fund or similarly-managed private fund advised or managed by","page_number":46,"box":{"x":117,"y":634,"width":725,"height":12}},{"id":"2096d183-c73b-41e3-986a-f98287394c78","block_type":"box","text":"BlackRock. In connection with any such investments, the Fund, to the extent permitted by the","page_number":46,"box":{"x":117,"y":649,"width":697,"height":12}},{"id":"b8f7bcc6-5075-498e-88be-c8a5001ba2b9","block_type":"box","text":"Investment Company Act, may pay its share of expenses of a money market fund or other similarly","page_number":46,"box":{"x":117,"y":665,"width":739,"height":12}},{"id":"0a5b6e90-2a22-4b1f-b38d-24fea0b0741b","block_type":"box","text":"managed private fund in which it invests, which may result in the Fund bearing some additional","page_number":46,"box":{"x":117,"y":680,"width":703,"height":12}},{"id":"3e8e49a9-8a56-4c47-be49-c5703cf5e75f","block_type":"box","text":"expenses.","page_number":46,"box":{"x":116,"y":698,"width":75,"height":9}},{"id":"678570e9-9f7e-4301-b0a6-c453c2b28faf","block_type":"box","text":"BlackRock and its directors, officers and employees, may buy and sell securities or other investments","page_number":46,"box":{"x":117,"y":723,"width":752,"height":12}},{"id":"57bfb27e-2714-46e9-8b08-bd4906a1a4a7","block_type":"box","text":"for their own accounts and may have conflicts of interest with respect to investments made on behalf of","page_number":46,"box":{"x":116,"y":738,"width":767,"height":12}},{"id":"d9262d3e-8a5d-441d-8780-26f4bee21f9e","block_type":"box","text":"the Fund. As a result of differing trading and investment strategies or constraints, positions may be","page_number":46,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"4bb17800-97c9-4c42-8dee-87543a538165","block_type":"box","text":"taken by directors, officers and employees of BlackRock that are the same, different from or made at","page_number":46,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"67efa6a7-ea19-4c7c-91ff-2284ece821ff","block_type":"box","text":"different times than positions taken for the Fund. To lessen the possibility that the Fund will be","page_number":46,"box":{"x":116,"y":785,"width":698,"height":12}},{"id":"0abbd5b1-355f-470a-a71d-ae240fbed398","block_type":"box","text":"adversely affected by this personal trading, the Fund, BFA and BlackRock each have adopted a Code","page_number":46,"box":{"x":116,"y":800,"width":756,"height":12}},{"id":"2e3d930e-b242-42c9-ac35-731731c068a6","block_type":"box","text":"of Ethics in compliance with Section 17(j) of the Investment Company Act that restricts securities","page_number":46,"box":{"x":116,"y":816,"width":717,"height":12}},{"id":"c9481849-d837-4365-a03f-5b0407bca298","block_type":"box","text":"trading in the personal accounts of investment professionals and others who normally come into","page_number":46,"box":{"x":116,"y":831,"width":717,"height":12}},{"id":"a312c692-9541-4b34-bc91-038d4de79a86","block_type":"box","text":"possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics is also","page_number":46,"box":{"x":117,"y":847,"width":727,"height":12}},{"id":"46d6e7f6-8da3-4038-8a70-459d5d0464c1","block_type":"box","text":"available on the EDGAR Database on the Commission’s Internet site at http://www.sec.gov, and","page_number":46,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"368d2559-4389-4ff6-b973-01934c9e7f2e","block_type":"box","text":"copies may be obtained, after paying a duplicating fee, by e-mail at publicinfo@sec.gov.","page_number":46,"box":{"x":116,"y":878,"width":659,"height":12}},{"id":"a740b2cc-adee-4592-bda7-55dff1d540cc","block_type":"box","text":"37","page_number":46,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4d16af2e-bb6b-43d9-8657-c366eaa6f06d","block_type":"box","text":"NM1026U-6004408-46/267","page_number":46,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e79400f0-afc2-48be-a29e-ab8ccd8d5f8b","block_type":"box","text":"BlackRock will not purchase securities or other property from, or sell securities or other property to, the","page_number":47,"box":{"x":117,"y":87,"width":767,"height":12}},{"id":"526ac6d0-eb61-4ebc-8d27-e3a5c7589bf0","block_type":"box","text":"Fund, except that the Fund may in accordance with rules or guidance adopted under the Investment","page_number":47,"box":{"x":117,"y":103,"width":747,"height":12}},{"id":"04f962a2-e3ab-4ac4-8595-dc4808a7b123","block_type":"box","text":"Company Act engage in transactions with another fund or accounts that are affiliated with the Fund as","page_number":47,"box":{"x":117,"y":118,"width":761,"height":12}},{"id":"96eb1cab-0c7e-49fa-91ef-1a3672535ffb","block_type":"box","text":"a result of common officers, directors, or investment advisers or pursuant to exemptive orders granted","page_number":47,"box":{"x":116,"y":134,"width":763,"height":12}},{"id":"d54c8399-6064-430c-99d8-c492ae541922","block_type":"box","text":"to the Fund and/or BlackRock by the Commission. These transactions would be effected in","page_number":47,"box":{"x":116,"y":149,"width":680,"height":12}},{"id":"8c8e29f6-7717-475d-b3d8-ecfb46fbff55","block_type":"box","text":"circumstances in which BlackRock determined that it would be appropriate for the Fund to purchase","page_number":47,"box":{"x":116,"y":165,"width":746,"height":11}},{"id":"e85af3ee-0f9b-4518-8b38-025eee129b26","block_type":"box","text":"and another client of BlackRock to sell, or the Fund to sell and another client of BlackRock to","page_number":47,"box":{"x":116,"y":180,"width":694,"height":11}},{"id":"d0bc9039-5069-48a8-a1e7-565152fdcec1","block_type":"box","text":"purchase, the same security or instrument on the same day. From time to time, the activities of the","page_number":47,"box":{"x":117,"y":196,"width":736,"height":12}},{"id":"606924be-02d7-4545-97d5-8b28c11cee5d","block_type":"box","text":"Fund may be restricted because of regulatory requirements applicable to BlackRock and/or","page_number":47,"box":{"x":117,"y":211,"width":681,"height":12}},{"id":"bdd47bea-a07d-4137-a01e-7ca43bd3554b","block_type":"box","text":"BlackRock’s internal policies designed to comply with, limit the applicability of, or otherwise relate to","page_number":47,"box":{"x":117,"y":227,"width":744,"height":12}},{"id":"ec1c95a3-12ed-464c-b193-6e141ad1d6dd","block_type":"box","text":"such requirements. A client not advised by BlackRock would not be subject to some of those","page_number":47,"box":{"x":116,"y":242,"width":692,"height":12}},{"id":"8f0a4332-e1a0-482c-874b-6e74935fb651","block_type":"box","text":"considerations. There may be periods when BlackRock may not initiate or recommend certain types of","page_number":47,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"70b9f554-66d1-49c0-848b-b1efd828cb3e","block_type":"box","text":"transactions, or may otherwise restrict or limit its advice in certain securities or instruments issued by","page_number":47,"box":{"x":116,"y":273,"width":753,"height":12}},{"id":"e61c5ac9-bcd4-4aac-9603-bf9bb54a3188","block_type":"box","text":"or related to companies for which BlackRock is performing advisory or other services or has proprietary","page_number":47,"box":{"x":116,"y":289,"width":772,"height":12}},{"id":"0ddecb08-02a3-4289-b1ac-fb75c84b901e","block_type":"box","text":"positions. For example, when BlackRock is engaged to provide advisory or risk management services","page_number":47,"box":{"x":117,"y":304,"width":759,"height":12}},{"id":"2a8aa28b-af34-46bb-86db-e1348b49cb39","block_type":"box","text":"for a company, BlackRock may be prohibited from or limited in purchasing or selling securities of that","page_number":47,"box":{"x":116,"y":320,"width":754,"height":12}},{"id":"a0c113cd-9960-4f4a-89d6-77dc9568fe7a","block_type":"box","text":"company on behalf of the Fund, particularly where such services result in BlackRock obtaining","page_number":47,"box":{"x":116,"y":335,"width":705,"height":12}},{"id":"4ad2915a-67f8-4084-b7ae-980740fbebd0","block_type":"box","text":"material non-public information about the company (","page_number":47,"box":{"x":117,"y":351,"width":386,"height":12}},{"id":"337e5266-4486-464f-8800-eb6b5ad87993","block_type":"box","text":"e.g.","page_number":47,"box":{"x":505,"y":353,"width":25,"height":10}},{"id":"8810019f-7bf7-4122-9695-49884ce502c7","block_type":"box","text":", in connection with participation in a creditors’","page_number":47,"box":{"x":533,"y":351,"width":347,"height":12}},{"id":"771dc8bf-29f7-498c-9f44-8cc222086382","block_type":"box","text":"committee). Similar situations could arise if personnel of BlackRock serve as directors of companies","page_number":47,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"58453a5c-902e-491f-9f7a-85ae1259af2c","block_type":"box","text":"the securities of which the Fund wishes to purchase or sell. 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Certain BlackRock advisory personnel may take views, and make decisions or","page_number":47,"box":{"x":116,"y":506,"width":719,"height":12}},{"id":"1e319ca3-f052-4ce0-abe0-c1af4e9e245d","block_type":"box","text":"recommendations, that are different than or opposite those of other BlackRock advisory personnel.","page_number":47,"box":{"x":117,"y":521,"width":737,"height":12}},{"id":"0c7f9a1e-c985-4fbe-8026-db550bb61ddc","block_type":"box","text":"Certain portfolio management teams within BlackRock may make decisions or take (or refrain from","page_number":47,"box":{"x":117,"y":537,"width":737,"height":12}},{"id":"094dd673-51df-4d1b-8a81-f8032fe98947","block_type":"box","text":"taking) actions with respect to clients they advise in a manner different than or adverse to the decisions","page_number":47,"box":{"x":116,"y":552,"width":771,"height":12}},{"id":"bc81b0fa-1089-4f45-8ce9-6e3da8cbb1b5","block_type":"box","text":"made or the actions taken (or not taken) by the Fund’s portfolio management teams. The various","page_number":47,"box":{"x":117,"y":568,"width":723,"height":12}},{"id":"be3cf97a-10c8-480a-a69d-e7c8bdfe4fbf","block_type":"box","text":"portfolio management teams may not share information with each other, including as a result of certain","page_number":47,"box":{"x":117,"y":583,"width":767,"height":12}},{"id":"d2353767-0e83-4bfd-9b14-1d485b62f4fe","block_type":"box","text":"information barriers and other policies, and will not have any obligation or other duty to do so.","page_number":47,"box":{"x":117,"y":599,"width":697,"height":12}},{"id":"d3246a36-722e-44b9-8dcf-60c79afcf540","block_type":"box","text":"BlackRock has established certain information barriers and other policies to address the sharing of","page_number":47,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"974f166f-c6a4-4f47-964d-69d220401370","block_type":"box","text":"information between different businesses within BlackRock, including with respect to personnel","page_number":47,"box":{"x":117,"y":645,"width":709,"height":12}},{"id":"c52515c9-0727-45ef-800d-81490025fe1a","block_type":"box","text":"responsible with managing portfolios and voting proxies with respect to certain index equity portfolios","page_number":47,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"5d59d5c1-8ea4-46fd-b77c-375c92d98798","block_type":"box","text":"versus those responsible for managing portfolios and voting proxies with respect to all other portfolios.","page_number":47,"box":{"x":116,"y":676,"width":757,"height":12}},{"id":"9fa1f19a-efd6-4751-bf26-d4e8035ceb55","block_type":"box","text":"As a result of information barriers, certain units of BlackRock generally will not have access, or will","page_number":47,"box":{"x":116,"y":692,"width":729,"height":12}},{"id":"e93d7707-ec5e-4a69-a9f1-bfc8cb31adbb","block_type":"box","text":"have limited access, to certain information and personnel, including senior personnel, in other units of","page_number":47,"box":{"x":117,"y":707,"width":753,"height":12}},{"id":"8d847d04-c4d1-474b-9228-755c2228bb9f","block_type":"box","text":"BlackRock, and generally will not manage the funds with the benefit of information possessed by such","page_number":47,"box":{"x":117,"y":723,"width":755,"height":12}},{"id":"8fe8eab6-a280-4540-8b06-903d02661769","block_type":"box","text":"other units. Therefore, BlackRock may not be able to review potential investments for the Fund with the","page_number":47,"box":{"x":116,"y":738,"width":767,"height":12}},{"id":"515501cf-ce26-42cf-8b65-3f15d21316f1","block_type":"box","text":"benefit of information held by certain areas of BlackRock.","page_number":47,"box":{"x":117,"y":754,"width":423,"height":12}},{"id":"3dea538e-3616-4ee5-ad6d-2576366027ff","block_type":"box","text":"BlackRock may determine to move certain personnel, businesses, or business units from one side of","page_number":47,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"f604be2e-fbfe-4060-97bc-0425c2fdf8a9","block_type":"box","text":"an information barrier to the other side of the information barrier. In connection therewith, BlackRock","page_number":47,"box":{"x":116,"y":800,"width":745,"height":11}},{"id":"c81a78de-d21a-4891-bd0c-4ad82652ccda","block_type":"box","text":"personnel, businesses, and business units that were moved will no longer have access to the","page_number":47,"box":{"x":117,"y":816,"width":691,"height":12}},{"id":"f8fb22ea-cd2c-4af8-bdfa-4ad450f5a481","block_type":"box","text":"information and personnel from the side of the information barrier from which they were moved.","page_number":47,"box":{"x":117,"y":831,"width":712,"height":12}},{"id":"f3046f2d-4665-4181-b0dc-96180deb44cc","block_type":"box","text":"Information obtained in connection with such changes to information barriers may limit or restrict the","page_number":47,"box":{"x":117,"y":847,"width":746,"height":12}},{"id":"6813aca4-1fb1-4e4a-86ae-b952503a7bf0","block_type":"box","text":"ability of BlackRock to engage in or otherwise effect transactions on behalf of the Fund (including","page_number":47,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"d0ac21e6-fe0b-404a-b4f4-cb87d4ba4232","block_type":"box","text":"purchasing or selling securities that BlackRock may otherwise have purchased or sold for a client in","page_number":47,"box":{"x":117,"y":878,"width":743,"height":12}},{"id":"d1b6c2b4-42b4-4d2b-a030-12da959cc595","block_type":"box","text":"38","page_number":47,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9a0ea1ff-cbda-417f-96ba-7370424db373","block_type":"box","text":"NM1026U-6004408-47/267","page_number":47,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3d2ff6dd-009e-4a24-b2b2-2dc32ac84466","block_type":"box","text":"the absence of a change to an information barrier). Information barriers may not have their intended","page_number":48,"box":{"x":116,"y":87,"width":746,"height":12}},{"id":"58c15f48-6e63-4c7e-9411-37dc7dc0015e","block_type":"box","text":"impact due to, for example, changes in applicable law or inadvertent crossings of the barriers, and","page_number":48,"box":{"x":117,"y":102,"width":732,"height":13}},{"id":"6c62531a-d5b7-4153-8b68-fcdf52ae27de","block_type":"box","text":"actions by personnel on one side of a barrier may impact the potential actions of personnel on the","page_number":48,"box":{"x":116,"y":118,"width":731,"height":12}},{"id":"7ddc0720-3ab9-447c-8742-66b6e07e667e","block_type":"box","text":"other side of a barrier.","page_number":48,"box":{"x":116,"y":134,"width":169,"height":9}},{"id":"45cdbadb-93ea-47fb-b074-3096a09e08b7","block_type":"box","text":"Although the information barriers are intended to allow for independent portfolio management decision","page_number":48,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"cd915110-9d62-4e56-8895-9e119de5f96f","block_type":"box","text":"making and proxy voting among certain BlackRock businesses, the investment activities of BlackRock","page_number":48,"box":{"x":117,"y":180,"width":761,"height":12}},{"id":"ef72f024-3cfd-4b8f-bc0d-8fb0247724d4","block_type":"box","text":"for BlackRock clients, as well as BlackRock’s proprietary accounts, may nonetheless limit the","page_number":48,"box":{"x":116,"y":196,"width":697,"height":12}},{"id":"b7d1d304-ee3c-419f-b066-a92d3597dd88","block_type":"box","text":"investment strategies and rights of other clients (including the Fund). As BlackRock’s assets under","page_number":48,"box":{"x":117,"y":211,"width":735,"height":12}},{"id":"efb2905b-8992-408e-b899-31f675d4aca9","block_type":"box","text":"management increases, BlackRock clients may face greater negative impacts due to ownership","page_number":48,"box":{"x":117,"y":227,"width":714,"height":12}},{"id":"2615eca3-ebdf-4eb8-93a0-f8c02f106ac9","block_type":"box","text":"restrictions and limitations imposed by laws, regulations, rules, regulators, or issuers. For example, in","page_number":48,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"f6c14a40-4abf-4d44-a4e6-acc4ee146f70","block_type":"box","text":"certain circumstances where a BlackRock client invests in securities issued by companies that operate","page_number":48,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"360c1d4c-5145-45df-a803-1bdcf82c94ea","block_type":"box","text":"in certain industries (e.g., banking, insurance, and utilities) or in certain emerging or international","page_number":48,"box":{"x":117,"y":273,"width":720,"height":12}},{"id":"10a90027-4f8d-49a0-b212-cf1a6dae5a71","block_type":"box","text":"markets, or are subject to regulatory or corporate ownership restrictions (e.g., with mechanisms such","page_number":48,"box":{"x":117,"y":289,"width":753,"height":12}},{"id":"023c1f56-b9e0-4386-b7b7-062a97f42368","block_type":"box","text":"as poison pills in place to prevent takeovers), or where a BlackRock client invests in certain futures and","page_number":48,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"730e3b0b-0d86-443c-99c5-467bc121b1d0","block_type":"box","text":"derivatives, there may be limits on the aggregate amount invested by BlackRock for its clients and","page_number":48,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"36e1b80b-7b09-443a-b1be-6ffdc3552094","block_type":"box","text":"BlackRock’s proprietary accounts that may not be exceeded without the grant of a license or other","page_number":48,"box":{"x":117,"y":335,"width":732,"height":12}},{"id":"e9a24b72-9ff8-48d5-8791-ddf2b7d128a7","block_type":"box","text":"regulatory or corporate approval, order, consent, relief, waiver or non-disapproval or, if exceeded, may","page_number":48,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"6ac380d7-04dc-4dc3-919f-304315160f7c","block_type":"box","text":"cause BlackRock or its clients to be subject to enforcement actions, disgorgement of share ownership","page_number":48,"box":{"x":116,"y":366,"width":761,"height":12}},{"id":"936aa7be-58c6-448d-93ef-822ea99bdcf0","block_type":"box","text":"or profits, regulatory restrictions, complex compliance reporting, increased compliance costs or suffer","page_number":48,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"c6840465-3819-49f3-bac3-ba9c67de8063","block_type":"box","text":"disadvantages or business restrictions. In light of certain restrictions, BlackRock may also seek to","page_number":48,"box":{"x":116,"y":397,"width":729,"height":12}},{"id":"f960f0c2-7fe7-4523-9b90-c859ac0a52b1","block_type":"box","text":"make indirect investments (e.g., using derivatives) on behalf of its clients to receive exposure to certain","page_number":48,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"f60498de-cb3a-469a-833b-500f25658f2e","block_type":"box","text":"securities in excess of the applicable ownership restrictions and limitations when legally permitted that","page_number":48,"box":{"x":116,"y":428,"width":762,"height":12}},{"id":"824892ab-a094-4b84-96c2-bf3e2f787e83","block_type":"box","text":"will expose such clients to additional costs and additional risks, including any risks associated with","page_number":48,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"647c67d7-ed10-4a35-bc75-83260196b8be","block_type":"box","text":"investing in derivatives. There may be limited availability of derivatives that provide indirect exposure to","page_number":48,"box":{"x":117,"y":459,"width":769,"height":12}},{"id":"9de12232-2e0e-4203-a5ba-175df30af2e1","block_type":"box","text":"an impacted security. BlackRock clients can be subject to more than one ownership limitation","page_number":48,"box":{"x":116,"y":475,"width":698,"height":12}},{"id":"db99e6c7-9157-48c2-89b7-0d47c62ff30a","block_type":"box","text":"depending on each client’s holdings, and each ownership limitation can impact multiple securities held","page_number":48,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"daab0152-03db-4de4-af32-e1db867df3df","block_type":"box","text":"by the client. Certain clients or shareholders may have their own overlapping obligations to monitor","page_number":48,"box":{"x":117,"y":506,"width":738,"height":12}},{"id":"c21ca64a-63c5-4a83-b14f-b450f47b67b2","block_type":"box","text":"their compliance with ownership limitations across their investments.","page_number":48,"box":{"x":116,"y":521,"width":513,"height":12}},{"id":"6d754735-cf6c-4810-a1a2-e04f38207e8c","block_type":"box","text":"If certain aggregate ownership thresholds are reached either through the actions of BlackRock or a","page_number":48,"box":{"x":117,"y":552,"width":738,"height":12}},{"id":"268922c0-25de-4151-9bc3-2c37bb5b8b38","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":48,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"e99da213-6285-4a2d-9b18-342b0e1b1281","block_type":"box","text":"clients to purchase or dispose of investments, or exercise rights (including voting) or undertake","page_number":48,"box":{"x":116,"y":583,"width":709,"height":12}},{"id":"e069554b-023d-4c29-9450-4a314e65a85f","block_type":"box","text":"business transactions, may be restricted by law, regulation, rule, or organizational documents or","page_number":48,"box":{"x":117,"y":599,"width":717,"height":12}},{"id":"1c0b6196-8ac9-49e0-b4ee-83c64aa18d7a","block_type":"box","text":"otherwise impaired. For example, to meet the requirements of an ownership limitation or restriction, a","page_number":48,"box":{"x":116,"y":614,"width":756,"height":12}},{"id":"111b5b31-ee34-462e-bbed-96cfeb4d7b20","block_type":"box","text":"client may be unable to purchase or directly hold a security the client would otherwise purchase or","page_number":48,"box":{"x":116,"y":630,"width":733,"height":12}},{"id":"283dec58-adbb-46b0-ab65-db232db77e8f","block_type":"box","text":"hold. The limitation or restriction may be based on the holdings of other BlackRock clients instead of","page_number":48,"box":{"x":117,"y":645,"width":747,"height":12}},{"id":"bc7808a4-9276-4535-a213-38ad3d089533","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":48,"box":{"x":116,"y":661,"width":766,"height":12}},{"id":"1e778411-3dde-49d0-b2da-32971bdcd194","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":48,"box":{"x":116,"y":676,"width":729,"height":12}},{"id":"14428f52-0194-4838-9a78-0f2ca47f47e4","block_type":"box","text":"cannot acquire the amount of the impacted security included in its index. BlackRock on behalf of its","page_number":48,"box":{"x":116,"y":692,"width":735,"height":12}},{"id":"b6ceff88-a44c-429d-8bd3-2212482b252f","block_type":"box","text":"clients may limit purchases, sell existing investments, utilize indirect investments, utilize information","page_number":48,"box":{"x":116,"y":707,"width":737,"height":12}},{"id":"9be58292-6c3a-4630-ae74-6a5b18180d37","block_type":"box","text":"barriers, or otherwise restrict, forgo, or limit the exercise of rights (including transferring, outsourcing, or","page_number":48,"box":{"x":117,"y":723,"width":767,"height":12}},{"id":"49c4da2e-83f5-48c7-8946-3efa3080b550","block_type":"box","text":"limiting voting rights or forgoing the right to receive dividends) when BlackRock, in its sole discretion,","page_number":48,"box":{"x":117,"y":738,"width":745,"height":12}},{"id":"4bba4d1c-cec9-4a03-955b-09758fcd18f3","block_type":"box","text":"deems it appropriate in light of potential regulatory or other restrictions on ownership or other","page_number":48,"box":{"x":116,"y":754,"width":690,"height":12}},{"id":"2b8d47e9-dd84-4d02-bf15-7bb446bfaa70","block_type":"box","text":"consequences resulting from reaching investment thresholds. These types of restrictions could","page_number":48,"box":{"x":116,"y":769,"width":702,"height":12}},{"id":"6fa43acb-9acf-4bab-8608-b84f12941e29","block_type":"box","text":"negatively impact a client’s performance or ability to meet its investment objective.","page_number":48,"box":{"x":117,"y":785,"width":608,"height":12}},{"id":"ec83a17f-96f5-4d37-86ce-ba98043d8120","block_type":"box","text":"When BlackRock or a BlackRock client is subject to an ownership limitation, BlackRock may in its","page_number":48,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"6f14bc7b-afdf-400d-95a6-25d0ffab1f12","block_type":"box","text":"discretion seek permission from the applicable issuers or regulators to exceed the limitation. However,","page_number":48,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"ed4b9389-8373-4242-91a8-00dbaec33d2e","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":48,"box":{"x":116,"y":847,"width":746,"height":12}},{"id":"d87258ce-8210-46b3-9609-fb07b2834c1b","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":48,"box":{"x":117,"y":862,"width":734,"height":12}},{"id":"77f3c447-d973-48a3-ade4-c5a9a5fc0ba8","block_type":"box","text":"BlackRock on behalf of itself and its clients take or refrain from taking certain actions in connection with","page_number":48,"box":{"x":117,"y":878,"width":770,"height":12}},{"id":"5134ab1a-309b-4c44-93a8-27888194567d","block_type":"box","text":"39","page_number":48,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"370c448a-259b-4156-b78e-8f1e9fdf863a","block_type":"box","text":"NM1026U-6004408-48/267","page_number":48,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a2f366c1-b5ce-4ff5-b5c5-c12e7d04b098","block_type":"box","text":"the approval, order, consent, relief or non-disapproval, which BlackRock may accept if it believes the","page_number":49,"box":{"x":116,"y":87,"width":752,"height":12}},{"id":"7f3c8043-66fa-4d1f-b87b-58fcb7c9dfd5","block_type":"box","text":"benefits outweigh the costs and may limit BlackRock from taking actions that it otherwise would take.","page_number":49,"box":{"x":117,"y":102,"width":753,"height":13}},{"id":"d848b86f-003e-4ea6-a996-227f6e50d399","block_type":"box","text":"In those circumstances where ownership thresholds or limitations must be observed, BlackRock seeks","page_number":49,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"7394bfd6-65bc-4825-a879-7d8843090511","block_type":"box","text":"to allocate limited investment opportunities equitably among clients, taking into consideration","page_number":49,"box":{"x":116,"y":134,"width":693,"height":12}},{"id":"950d7c76-0602-419b-87ec-5218f69e1468","block_type":"box","text":"benchmark weight and investment strategy. BlackRock may adopt certain controls designed to prevent","page_number":49,"box":{"x":117,"y":149,"width":767,"height":12}},{"id":"87744c34-4f98-486b-a2ee-af2e9f62d7da","block_type":"box","text":"the occurrence of a breach of any applicable ownership threshold or limits, including, for example,","page_number":49,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"74691ccb-de4c-4c42-a36a-51fb49bfdb5f","block_type":"box","text":"when ownership in certain securities nears an applicable threshold, BlackRock may limit additional","page_number":49,"box":{"x":116,"y":180,"width":736,"height":12}},{"id":"67c4c086-3982-4470-9254-cdae94405f48","block_type":"box","text":"purchases in such securities or remove such securities from the list of Deposit Securities to be","page_number":49,"box":{"x":117,"y":196,"width":704,"height":11}},{"id":"210332e5-d105-43da-bcc4-d49e1b43b773","block_type":"box","text":"delivered to the Fund in connection with purchases of Creation Units of the Fund. If client holdings of","page_number":49,"box":{"x":116,"y":211,"width":752,"height":12}},{"id":"8fb2c0ce-4778-4c8a-80bd-0d7ffece0e20","block_type":"box","text":"an issuer exceed an applicable threshold and BlackRock is unable to obtain relief to enable the","page_number":49,"box":{"x":116,"y":227,"width":710,"height":11}},{"id":"be91197d-9681-4683-8722-308c5464628b","block_type":"box","text":"continued holding of such investments, it may be necessary to reduce these positions to meet the","page_number":49,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"ad155872-6d5b-4c05-b008-e10c9f71882c","block_type":"box","text":"applicable limitations and BlackRock or such client may be subject to regulatory actions. In these","page_number":49,"box":{"x":116,"y":258,"width":724,"height":12}},{"id":"4db1a9ec-9418-4e3f-a1f2-22d4847cb8af","block_type":"box","text":"cases, the investments will be sold in a manner that BlackRock deems fair and equitable over time.","page_number":49,"box":{"x":116,"y":273,"width":741,"height":12}},{"id":"a70b7218-cdf0-4a72-bc41-d279a8b397d1","block_type":"box","text":"Ownership limitations are highly complex. It is possible that, despite BlackRock’s intent to either","page_number":49,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"4665f035-12a2-4d72-a2bb-a59a26553882","block_type":"box","text":"comply with or be granted permission to exceed ownership limitations, it may inadvertently breach a","page_number":49,"box":{"x":116,"y":320,"width":746,"height":12}},{"id":"f51fd17a-94e3-4e8f-884d-8be0320f58d8","block_type":"box","text":"limit or violate the corporate or regulatory approval, order, consent, relief or non-disapproval that was","page_number":49,"box":{"x":117,"y":335,"width":753,"height":12}},{"id":"c89a0ccd-f854-4f29-b0f1-08e263ca03b1","block_type":"box","text":"obtained.","page_number":49,"box":{"x":116,"y":351,"width":74,"height":9}},{"id":"8df0e286-9a29-478f-9e0c-9eb1add82ac4","block_type":"box","text":"In addition to the foregoing, other ownership thresholds may trigger reporting requirements to","page_number":49,"box":{"x":117,"y":382,"width":696,"height":12}},{"id":"763fac8d-90f4-4485-930e-ce4c7707799f","block_type":"box","text":"governmental and regulatory authorities, and such reports may entail the disclosure of the identity of a","page_number":49,"box":{"x":116,"y":397,"width":763,"height":12}},{"id":"8fe5c492-d60e-495e-a08d-56cb9361ce6d","block_type":"box","text":"client or BlackRock’s intended strategy with respect to such security or asset.","page_number":49,"box":{"x":116,"y":413,"width":579,"height":12}},{"id":"ab765af2-afbb-470a-af7e-49993e12f215","block_type":"box","text":"BlackRock may not serve as an Authorized Participant in the creation and redemption of the Fund and","page_number":49,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"6d79335a-d655-4f6c-95a5-fba71f5a1abf","block_type":"box","text":"other BFA-advised ETFs.","page_number":49,"box":{"x":116,"y":459,"width":193,"height":10}},{"id":"8db2ebe3-40db-4bb1-94b4-586de9bcbfeb","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an Affiliate of BFA, to perform certain","page_number":49,"box":{"x":117,"y":490,"width":766,"height":12}},{"id":"6d936352-f2bc-4987-884e-52f2a169e21d","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":49,"box":{"x":116,"y":506,"width":756,"height":12}},{"id":"1b14b105-dd96-433f-888c-7bb8cf75240f","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL has engaged Citibank, N.A.","page_number":49,"box":{"x":117,"y":521,"width":706,"height":12}},{"id":"1cf05ee8-027f-4e6a-af01-9ab025bed085","block_type":"box","text":"(“Citibank”) as a subcontractor to provide certain ETF Services. BRIL retains a portion of the standard","page_number":49,"box":{"x":117,"y":537,"width":759,"height":12}},{"id":"8644b90d-a281-4766-82ba-f4f26a12edb9","block_type":"box","text":"transaction fee received from Authorized Participants on each creation or redemption order from the","page_number":49,"box":{"x":116,"y":552,"width":748,"height":12}},{"id":"c2e4d98a-dd77-4972-920a-54f408d0ee0c","block_type":"box","text":"Authorized Participant for the ETF Services provided. BlackRock collaborated with, and received","page_number":49,"box":{"x":116,"y":568,"width":722,"height":12}},{"id":"62921ea0-b40e-4123-b7fb-0e2ec0ff38b6","block_type":"box","text":"payment from, Citibank on the design and development of the ETF Services platform. Citibank has,","page_number":49,"box":{"x":117,"y":583,"width":741,"height":12}},{"id":"a5cbdbc9-dee4-4789-bda7-467153041bb2","block_type":"box","text":"and may from time to time develop, additional relationships with BlackRock or funds managed by BFA","page_number":49,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"bbbeb9fd-0fd7-4445-b1d7-037fd92d291b","block_type":"box","text":"and its affiliates.","page_number":49,"box":{"x":116,"y":614,"width":125,"height":10}},{"id":"a533f370-1e4d-458a-9262-c81ce4b60a8e","block_type":"box","text":"In order to defray transaction expenses and protect against possible shareholder dilution, the Fund","page_number":49,"box":{"x":117,"y":645,"width":737,"height":12}},{"id":"736780d1-08bf-4d70-8b55-4fe715c80c8c","block_type":"box","text":"may collect certain fees from Authorized Participants in connection with cash substitutions for creation","page_number":49,"box":{"x":117,"y":661,"width":756,"height":12}},{"id":"3f53c302-0d0a-40ab-8b58-2c581cfeb8d5","block_type":"box","text":"and redemption transactions. While BlackRock uses good faith estimates of the expected costs to the","page_number":49,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"10a1119e-8605-406b-8645-d3082b09aa6f","block_type":"box","text":"Fund in determining the rates for fees collected by the Fund related to creation and redemption activity,","page_number":49,"box":{"x":117,"y":692,"width":764,"height":12}},{"id":"6e197bdb-672c-4e7d-a833-2693007cd7e6","block_type":"box","text":"BlackRock may have incentives to improve Fund performance through the collection of these fees. As","page_number":49,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"60d151e4-b88e-44e2-9a3b-d76069548c7f","block_type":"box","text":"these charges are based on estimates, where the charges exceed actual transaction costs incurred by","page_number":49,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"8e1f86eb-60cd-461b-a58b-ec9f024025d6","block_type":"box","text":"the Fund, Fund performance could improve as a result. BlackRock has established processes to","page_number":49,"box":{"x":116,"y":738,"width":715,"height":12}},{"id":"fea07a1b-779f-4e6a-907e-30ec72017abe","block_type":"box","text":"oversee the determination of these estimates in an effort to mitigate this conflict.","page_number":49,"box":{"x":116,"y":754,"width":594,"height":12}},{"id":"7ce7256d-d322-4751-b6fc-72d2d62a797f","block_type":"box","text":"BlackRock may maintain securities indices. To the extent permitted by applicable laws, the Fund may","page_number":49,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"0a8abf95-cf51-427e-a7fa-841865737c6d","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":49,"box":{"x":116,"y":800,"width":758,"height":12}},{"id":"3028935f-a4ef-4603-9eff-92b89643f915","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":49,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"9b42c39b-fa46-473e-8c30-9012daa71293","block_type":"box","text":"fund name. Index providers, including BlackRock (to the extent permitted by applicable law), may be","page_number":49,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"af067715-d69b-4bcc-81df-2bf7e5729970","block_type":"box","text":"paid licensing fees for use of their index or index name. In instances where BlackRock charges a","page_number":49,"box":{"x":117,"y":847,"width":723,"height":12}},{"id":"c91b25cc-589b-4c34-8a57-796a09a6f4ed","block_type":"box","text":"unitary management fee, BlackRock may have a financial incentive to use a BlackRock index that is","page_number":49,"box":{"x":117,"y":862,"width":746,"height":12}},{"id":"7fdc9bb1-2614-4ef8-9788-2cd4713bdfb8","block_type":"box","text":"less costly to BlackRock than a third party index. BlackRock may benefit from the Fund using","page_number":49,"box":{"x":117,"y":878,"width":695,"height":12}},{"id":"c8432062-f0e3-476e-9b92-c8c545d952a0","block_type":"box","text":"40","page_number":49,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"f118fb8f-e644-46f3-8eaf-e9d2ff888071","block_type":"box","text":"NM1026U-6004408-49/267","page_number":49,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8b3472d3-4687-4549-a199-f854601208f9","block_type":"box","text":"BlackRock indices by creating increasing acceptance in the marketplace for such indices. BlackRock is","page_number":50,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"0ae87e55-3ec2-4f72-bb77-ab3d8325e8b1","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":50,"box":{"x":117,"y":103,"width":747,"height":12}},{"id":"c6e866b1-4a0a-4cd1-a60e-e45c602d9d3e","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":50,"box":{"x":117,"y":118,"width":756,"height":12}},{"id":"d9224e64-8107-48d5-aea9-c817951d0c9f","block_type":"box","text":"any index licensing agreement with BlackRock will be as favorable as those terms offered to other","page_number":50,"box":{"x":116,"y":134,"width":732,"height":12}},{"id":"2f755601-fa13-4c08-bd46-4e3fe5f7a03a","block_type":"box","text":"licensees.","page_number":50,"box":{"x":117,"y":149,"width":78,"height":10}},{"id":"e00dd37a-310b-42f6-a070-49e330279d79","block_type":"box","text":"BlackRock may enter into contractual arrangements with third-party service providers to the Fund (e.g.,","page_number":50,"box":{"x":117,"y":179,"width":770,"height":12}},{"id":"afdb988e-8828-4a6f-b347-9eae6f47bcc7","block_type":"box","text":"custodians, administrators and index providers) pursuant to which BlackRock receives fee discounts or","page_number":50,"box":{"x":116,"y":194,"width":769,"height":12}},{"id":"d52daab4-3096-4cab-8fb3-1f49e2daa9ae","block_type":"box","text":"concessions in recognition of BlackRock’s overall relationship with such service providers. BlackRock","page_number":50,"box":{"x":116,"y":210,"width":757,"height":12}},{"id":"20d3895a-0d4d-4b67-8419-f7445bc5a14b","block_type":"box","text":"may also enter into contractual arrangements with such service providers pursuant to which BlackRock","page_number":50,"box":{"x":117,"y":225,"width":769,"height":12}},{"id":"a38a12b2-dcf8-4671-98e7-003f0ac12366","block_type":"box","text":"incurs additional costs if the service provider’s services are terminated with respect to the Fund. To the","page_number":50,"box":{"x":117,"y":241,"width":767,"height":12}},{"id":"6ec04c3d-17f7-4a3b-a335-15012ce79542","block_type":"box","text":"extent that BlackRock is responsible for paying service providers out of its fees that it receives from the","page_number":50,"box":{"x":116,"y":256,"width":770,"height":12}},{"id":"7d68c18a-8f5a-45da-91cc-3331f20e186e","block_type":"box","text":"Fund, the benefits of lower fees, including any fee discounts or concessions, or any additional savings,","page_number":50,"box":{"x":117,"y":272,"width":766,"height":12}},{"id":"9790dbca-9374-4ab3-b510-fcfe2d80182d","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":50,"box":{"x":117,"y":287,"width":752,"height":12}},{"id":"20335d22-9562-4aa8-a2bf-04267f11fac6","block_type":"box","text":"use or termination of service providers to the Fund. In addition, conflicts of interest may arise with","page_number":50,"box":{"x":117,"y":303,"width":727,"height":12}},{"id":"57378afb-bedc-43e0-99ef-a25e47b6e668","block_type":"box","text":"respect to contractual arrangements with third-party service providers to the Fund, or the selection of","page_number":50,"box":{"x":117,"y":318,"width":752,"height":12}},{"id":"4d392c3f-19a7-4fee-a587-2cfede73b75f","block_type":"box","text":"such providers, particularly in circumstances where BlackRock is negotiating on behalf of both funds","page_number":50,"box":{"x":116,"y":334,"width":749,"height":12}},{"id":"66e891a1-227f-41e8-bd96-b4a792a30a04","block_type":"box","text":"that have a unitary management fee and those that do not or different service providers have different","page_number":50,"box":{"x":116,"y":349,"width":761,"height":12}},{"id":"6c5962f0-b5ef-4d82-a174-942c12bb5095","block_type":"box","text":"fee structures.","page_number":50,"box":{"x":116,"y":365,"width":111,"height":9}},{"id":"7924dd04-a5a2-456c-ae80-29e243a1b4b4","block_type":"box","text":"Conflicts of interest may arise as a result of simultaneous investment management of multiple client","page_number":50,"box":{"x":117,"y":394,"width":744,"height":12}},{"id":"a2ab7d4e-8b23-4058-bd2c-4e8bffd45b2c","block_type":"box","text":"accounts by BlackRock’s investment professionals. For example, differences in the advisory fee","page_number":50,"box":{"x":116,"y":410,"width":716,"height":12}},{"id":"c61c8fc6-0800-4969-beab-d6f0b1f2619c","block_type":"box","text":"structure may create the appearance of actual or potential conflicts of interest because such","page_number":50,"box":{"x":116,"y":425,"width":689,"height":12}},{"id":"7537bb3d-cc89-47c3-98ad-517676268c28","block_type":"box","text":"differences could create pecuniary incentives for BlackRock to favor one client account over another.","page_number":50,"box":{"x":116,"y":441,"width":754,"height":12}},{"id":"89716ba1-2974-4fa3-9d4a-698bd74fca82","block_type":"box","text":"BlackRock owns or has an ownership interest in certain trading, portfolio management, operations and/","page_number":50,"box":{"x":117,"y":470,"width":765,"height":12}},{"id":"5c53b184-8c76-4857-864e-9d3196b744eb","block_type":"box","text":"or information systems used by Fund service providers. These systems are, or will be, used by the","page_number":50,"box":{"x":116,"y":486,"width":736,"height":12}},{"id":"7c6d97fa-c479-4705-af7b-5ec08c30f206","block_type":"box","text":"Fund service provider in connection with the provision of services to accounts managed by BlackRock","page_number":50,"box":{"x":117,"y":501,"width":761,"height":12}},{"id":"a7ca32f7-945e-40ba-b41d-370a820ab0f4","block_type":"box","text":"and funds managed and sponsored by BlackRock, including the Fund, that engage the service","page_number":50,"box":{"x":116,"y":517,"width":707,"height":12}},{"id":"01cfbd76-fc8a-4fd3-b4d4-1a63cadc919c","block_type":"box","text":"provider (typically the custodian). The Fund’s service provider remunerates BlackRock for the use of","page_number":50,"box":{"x":117,"y":532,"width":748,"height":12}},{"id":"4eb9b3d3-a4b4-4e45-8116-7216d1906f1a","block_type":"box","text":"the systems. The Fund service provider’s payments to BlackRock for the use of these systems may","page_number":50,"box":{"x":116,"y":548,"width":744,"height":12}},{"id":"2680731f-9c87-4470-8623-7fbd4cce305f","block_type":"box","text":"enhance the profitability of BlackRock.","page_number":50,"box":{"x":116,"y":563,"width":290,"height":12}},{"id":"fadec74e-795e-4a45-a274-c2a696945f96","block_type":"box","text":"BlackRock’s receipt of fees from a service provider in connection with the use of systems provided by","page_number":50,"box":{"x":117,"y":593,"width":757,"height":12}},{"id":"a2417334-c869-46d1-85df-9ce034e483f6","block_type":"box","text":"BlackRock may create an incentive for BlackRock to recommend that the Fund enter into or renew an","page_number":50,"box":{"x":117,"y":608,"width":759,"height":13}},{"id":"a1b32e06-139e-4c03-938b-884c941ca358","block_type":"box","text":"arrangement with the service provider.","page_number":50,"box":{"x":116,"y":624,"width":291,"height":12}},{"id":"d18ff506-4ebe-4015-b24c-cd6885285e76","block_type":"box","text":"In recognition of a BlackRock client’s overall relationship with BlackRock, BlackRock may offer special","page_number":50,"box":{"x":117,"y":654,"width":744,"height":12}},{"id":"e5948815-f542-46a3-85be-a461691df741","block_type":"box","text":"pricing arrangements for certain services provided by","page_number":50,"box":{"x":117,"y":669,"width":386,"height":12}},{"id":"74495389-06f4-4840-ae18-9ca9d6644b10","block_type":"box","text":"BlackRock. Any such special pricing arrangements","page_number":50,"box":{"x":508,"y":669,"width":368,"height":12}},{"id":"5203f905-b436-4506-837d-e6fc7f2e5a07","block_type":"box","text":"will not affect Fund fees and expenses applicable to","page_number":50,"box":{"x":116,"y":685,"width":376,"height":12}},{"id":"c53e60fe-95d2-4c9b-a611-bf29bb0e1f17","block_type":"box","text":"such client’s investment in the Fund.","page_number":50,"box":{"x":497,"y":685,"width":264,"height":9}},{"id":"a9dcf8cf-8b33-4134-955b-f9e24eac23fb","block_type":"box","text":"Present and future activities of BlackRock and its directors, officers and employees, in addition to those","page_number":50,"box":{"x":117,"y":714,"width":766,"height":12}},{"id":"8618f3a9-187c-4d41-8161-566923680aeb","block_type":"box","text":"described in this section, may give rise to additional conflicts of interest.","page_number":50,"box":{"x":116,"y":730,"width":531,"height":12}},{"id":"bdd05dd9-571d-461d-ac82-77e57630b7bd","block_type":"box","text":"Investment Advisory, Administrative and","page_number":50,"box":{"x":119,"y":779,"width":726,"height":28}},{"id":"a6fd0cf0-5886-41d2-a736-a26505eb16e5","block_type":"box","text":"Distribution Services","page_number":50,"box":{"x":119,"y":812,"width":376,"height":23}},{"id":"deb7face-fcf1-4b54-ad45-5015af2433d5","block_type":"box","text":"Investment Adviser.","page_number":50,"box":{"x":117,"y":862,"width":163,"height":9}},{"id":"4dcdca5e-0104-4f61-afe2-50d2964a9cb1","block_type":"box","text":"BFA serves as investment adviser to the Fund pursuant to an investment","page_number":50,"box":{"x":282,"y":862,"width":546,"height":12}},{"id":"20bbae08-d488-466b-9cec-b924386cb266","block_type":"box","text":"advisory agreement between the Trust, on behalf of the Fund, and BFA (the “Investment Advisory","page_number":50,"box":{"x":116,"y":877,"width":731,"height":12}},{"id":"95f6c161-68fd-4f3d-aa76-2fc96e2a3248","block_type":"box","text":"41","page_number":50,"box":{"x":490,"y":909,"width":16,"height":9}},{"id":"028faea6-3b43-4339-8b3c-ce6d2b6d4b8e","block_type":"box","text":"NM1026U-6004408-50/267","page_number":50,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"92c43ef5-a731-4850-aa5c-4bd30f05365b","block_type":"box","text":"Agreement”). BFA is a California corporation indirectly owned by BlackRock, Inc. and is registered as","page_number":51,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"b8e71066-e1a5-4997-b39a-d0ff9150ae0c","block_type":"box","text":"an investment adviser under the Investment Advisers Act of 1940, as amended. Under the Investment","page_number":51,"box":{"x":116,"y":102,"width":763,"height":12}},{"id":"69eb8628-688b-4421-aac8-c3c322078c8b","block_type":"box","text":"Advisory Agreement, BFA, subject to the supervision of the Board and in conformity with the stated","page_number":51,"box":{"x":116,"y":118,"width":740,"height":12}},{"id":"0e894d90-1ffa-476c-bd5f-c921f4e8d6fc","block_type":"box","text":"investment policies of the Fund, manages and administers the Trust and the investment of the Fund’s","page_number":51,"box":{"x":117,"y":134,"width":758,"height":12}},{"id":"b704f8e0-149a-44aa-9e5b-a5917c3dd9a8","block_type":"box","text":"assets. BFA is responsible for making investment decisions for the Fund.","page_number":51,"box":{"x":116,"y":149,"width":547,"height":12}},{"id":"76c47ee7-7435-40e9-871c-0f6e6d980beb","block_type":"box","text":"Pursuant to the Investment Advisory Agreement, BFA","page_number":51,"box":{"x":117,"y":180,"width":403,"height":12}},{"id":"fd9b4d12-642e-435f-b9ce-f6f4642b657e","block_type":"box","text":"may, from time to time, in its sole discretion and","page_number":51,"box":{"x":521,"y":180,"width":360,"height":12}},{"id":"dc80e780-84ae-4746-b245-140f5b89b027","block_type":"box","text":"to the extent permitted by applicable law, appoint one or more sub-advisers, including, without","page_number":51,"box":{"x":116,"y":196,"width":703,"height":12}},{"id":"a6d3b71d-c924-4d6e-95a2-149a2b653bda","block_type":"box","text":"limitation, affiliates of BFA, to perform investment advisory or other services with respect to the Fund.","page_number":51,"box":{"x":117,"y":211,"width":755,"height":12}},{"id":"61ab7f8f-dea1-44f2-a2c5-c5f57a3d15a5","block_type":"box","text":"In addition, BFA may delegate certain of its investment advisory functions under the Investment","page_number":51,"box":{"x":117,"y":227,"width":713,"height":12}},{"id":"d3f18766-499e-4238-a35c-182c883051a5","block_type":"box","text":"Advisory Agreement to one or more of its affiliates to the extent permitted by applicable law. BFA may","page_number":51,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"f97eaee8-1424-4031-8feb-f7ef88c606a4","block_type":"box","text":"terminate any or all sub-advisers or such delegation arrangements in its sole discretion upon","page_number":51,"box":{"x":116,"y":258,"width":692,"height":12}},{"id":"f02a01b1-d4f5-4e1c-afcb-1f0a3e069e89","block_type":"box","text":"appropriate notice at any time to the extent permitted by applicable law.","page_number":51,"box":{"x":116,"y":273,"width":536,"height":12}},{"id":"ed5c5af3-4976-4a3d-a970-3aa03adab6ab","block_type":"box","text":"BFA is responsible, under the Investment Advisory Ag","page_number":51,"box":{"x":117,"y":304,"width":391,"height":12}},{"id":"6acb4a28-254a-4cc6-9f77-faa12667ea2b","block_type":"box","text":"reement, for substantially all expenses of the Fund,","page_number":51,"box":{"x":510,"y":304,"width":376,"height":12}},{"id":"8ee470fd-ec7c-4b83-b3d6-1865cfa01c6d","block_type":"box","text":"including the cost of transfer agency, custody, fund adm","page_number":51,"box":{"x":117,"y":320,"width":405,"height":12}},{"id":"dcff9a7c-6ab2-4702-80df-2a87f0a19839","block_type":"box","text":"inistration, legal, audit and other services. BFA is","page_number":51,"box":{"x":524,"y":320,"width":359,"height":12}},{"id":"53542b38-e96c-4084-8b30-19b1748b9017","block_type":"box","text":"not responsible for, and the Fund will bear the cost o","page_number":51,"box":{"x":117,"y":335,"width":381,"height":12}},{"id":"9827866a-f23b-4718-bd48-07928a9a7225","block_type":"box","text":"f, the management fees, interest expenses, taxes,","page_number":51,"box":{"x":498,"y":335,"width":369,"height":12}},{"id":"fd9b166b-4765-4baf-93de-3c0928e8bd24","block_type":"box","text":"expenses incurred with respect to the acquisition and di","page_number":51,"box":{"x":116,"y":351,"width":403,"height":12}},{"id":"72dc48a8-8521-40cb-a32e-218bf19839f3","block_type":"box","text":"sposition of portfolio securities and the execution","page_number":51,"box":{"x":520,"y":351,"width":359,"height":12}},{"id":"79b9dcbc-f13e-4bd8-aaa8-cd13fd13a83d","block_type":"box","text":"of portfolio transactions, including brokerage commissi","page_number":51,"box":{"x":116,"y":366,"width":395,"height":12}},{"id":"456a1e29-6803-4695-aa8d-5b5d41a8c0fe","block_type":"box","text":"ons, distribution fees or expenses, litigation","page_number":51,"box":{"x":512,"y":366,"width":318,"height":12}},{"id":"2b29440e-b9fb-49b2-b2ad-0982a4c417f4","block_type":"box","text":"expenses and any extraordinary expenses (as determi","page_number":51,"box":{"x":116,"y":382,"width":395,"height":12}},{"id":"a226501e-3ca3-4574-824e-e758026236c4","block_type":"box","text":"ned by a majority of the Independent Trustees).","page_number":51,"box":{"x":513,"y":382,"width":350,"height":12}},{"id":"2df7f8d6-c8cd-4caf-ae02-3a7482433587","block_type":"box","text":"For its investment advisory services to the Fund, BFA is paid a management fee by the Fund, based","page_number":51,"box":{"x":117,"y":413,"width":749,"height":12}},{"id":"ed860317-1ba1-4f3d-8876-3e801b212b07","block_type":"box","text":"on a percentage of the Fund’s average daily net assets, at an annual rate of 0.60% of the first $1 billion","page_number":51,"box":{"x":116,"y":427,"width":771,"height":13}},{"id":"2bfed923-9a0b-44d1-a05c-b55ff7925af4","block_type":"box","text":"of the Fund’s average daily net assets, 0.56% of the next $2 billion of the Fund’s average daily net","page_number":51,"box":{"x":116,"y":443,"width":734,"height":13}},{"id":"b46ac737-a715-4288-8a5d-e1e9fec09647","block_type":"box","text":"assets, 0.54% of the next $2 billion of the Fund’s average daily net assets, 0.52% of the next $5 billion","page_number":51,"box":{"x":116,"y":458,"width":764,"height":13}},{"id":"a53f00fc-6d91-449e-93fb-2471b4868922","block_type":"box","text":"of the Fund’s average daily net assets and 0.51% of the average daily net assets of the Fund in excess","page_number":51,"box":{"x":116,"y":475,"width":771,"height":12}},{"id":"02c791ea-742d-4c35-adf3-87e330564930","block_type":"box","text":"of $10 billion.","page_number":51,"box":{"x":116,"y":489,"width":104,"height":12}},{"id":"14f62540-9086-4490-b90d-fd6440c66216","block_type":"box","text":"BFA has contractually agreed to waive a portion of its management fees in an amount equal to the","page_number":51,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"97d4afb5-ca5c-4f11-bfaf-e02033d98ddf","block_type":"box","text":"aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in other","page_number":51,"box":{"x":116,"y":537,"width":758,"height":12}},{"id":"a7269c1d-681d-4971-81eb-941384b7ac25","block_type":"box","text":"equity and fixed-income mutual funds and ETFs advised by BFA or its affiliates through June 30, 2028.","page_number":51,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"34e8c0ef-b990-4cd8-b65f-96490036a35c","block_type":"box","text":"BFA has also contractually agreed to waive a portion of its management fees by an amount equal to","page_number":51,"box":{"x":117,"y":568,"width":747,"height":12}},{"id":"de7bc5da-b984-4094-8cdf-638c129f02ec","block_type":"box","text":"the aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in","page_number":51,"box":{"x":116,"y":583,"width":743,"height":12}},{"id":"9103a866-44b7-4087-a9b9-7b1b715fd697","block_type":"box","text":"money market funds advised by BFA or its affiliates through June 30, 2028. The agreement (with","page_number":51,"box":{"x":117,"y":599,"width":723,"height":12}},{"id":"5fd5c92b-e180-4498-867a-1bfc5a2999c1","block_type":"box","text":"respect to either waiver) may be terminated upon 90 days’ notice by a majority of the non-interested","page_number":51,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"d59ae28f-a576-49ff-bdf5-add71c525da0","block_type":"box","text":"trustees of the Trust or by a vote of a majority of the outstanding voting securities of the Fund.","page_number":51,"box":{"x":116,"y":630,"width":702,"height":12}},{"id":"902c927d-2874-4510-9f60-79a677fe4ab2","block_type":"box","text":"BFA has contractually agreed to cap the Fund’s total annual fund operating expenses after fee waiver","page_number":51,"box":{"x":117,"y":661,"width":754,"height":12}},{"id":"986500b8-fbab-4240-9148-708128a435af","block_type":"box","text":"to 0.59% as a percentage of the Fund’s average daily net assets through June 30, 2028. The","page_number":51,"box":{"x":116,"y":676,"width":691,"height":12}},{"id":"7410fc10-b01f-4f2b-9553-ed79dd1ec93c","block_type":"box","text":"contractual waiver may be terminated prior to June 30, 2028 only upon 90 days’ notice by a majority of","page_number":51,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"b055e924-85e8-4aa2-880d-d10c96f1bf03","block_type":"box","text":"the non-interested trustees of the Trust or by a vote of a majority of the outstanding voting securities of","page_number":51,"box":{"x":116,"y":707,"width":762,"height":12}},{"id":"f4dde143-0f09-47bd-9030-596979f2b9e5","block_type":"box","text":"the Fund.","page_number":51,"box":{"x":116,"y":723,"width":69,"height":9}},{"id":"bc3ea5fd-0b04-4658-b3a6-f1df8ee8456a","block_type":"box","text":"In addition, effective June 1, 2026, BFA has voluntarily agreed to cap the Fund’s total annual fund","page_number":51,"box":{"x":117,"y":754,"width":724,"height":12}},{"id":"3a024feb-978b-42f7-b3ae-b88f5404d357","block_type":"box","text":"operating expenses after fee waiver to 0.44% as a percentage of the Fund’s average daily net assets.","page_number":51,"box":{"x":116,"y":769,"width":754,"height":12}},{"id":"0faa9666-0bf9-4279-87ba-e319d5b10488","block_type":"box","text":"This voluntary waiver may be eliminated by BFA at any time.","page_number":51,"box":{"x":116,"y":785,"width":449,"height":12}},{"id":"f85c929f-1698-4f81-bd50-858493e129bb","block_type":"box","text":"As explained above in this SAI, the Fund is the successor to the Predecessor Fund as a result of the","page_number":51,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"866b5c62-f856-4f40-ace5-21eed971dee5","block_type":"box","text":"Reorganization. The Predecessor Trust, on behalf of the Predecessor Fund, was party to an","page_number":51,"box":{"x":117,"y":831,"width":688,"height":12}},{"id":"8c0c8a47-f75d-4268-b1dd-493697ebeec5","block_type":"box","text":"investment advisory agreement (the “Predecessor Management Agreement”) with BlackRock Advisors,","page_number":51,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"362beac3-1fee-449a-8314-c6af934c0bcc","block_type":"box","text":"LLC (“BAL”). Under the Predecessor Management Agreement, effective April 19, 2023, BAL was","page_number":51,"box":{"x":117,"y":862,"width":722,"height":12}},{"id":"460cbfb3-0b37-4362-acf6-cbd10debf645","block_type":"box","text":"entitled to an annual management fee at the maximum rate of 0.60% for the first $1 billion in average","page_number":51,"box":{"x":116,"y":877,"width":755,"height":13}},{"id":"07646d7d-9f44-4336-8c19-cf58cc1e753b","block_type":"box","text":"42","page_number":51,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"39f5668c-bf7d-4341-9612-70f7f6df9221","block_type":"box","text":"NM1026U-6004408-51/267","page_number":51,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4896adfb-e072-4ae6-8daf-09110d582cc8","block_type":"box","text":"daily net assets, 0.56% for the next $2 billion in average daily net assets, 0.54% for the next $2 billion","page_number":52,"box":{"x":116,"y":86,"width":759,"height":13}},{"id":"b6a73e1e-3d94-4db3-8ab6-2a452654f0c5","block_type":"box","text":"in average daily net assets, 0.52% for the next $5 billion in average daily net assets, and 0.51% for","page_number":52,"box":{"x":117,"y":102,"width":738,"height":13}},{"id":"064cd889-5b20-4a1d-9d49-2a2a4364f838","block_type":"box","text":"average daily net assets greater than $10 billion.","page_number":52,"box":{"x":116,"y":117,"width":367,"height":13}},{"id":"ec086fb3-a2d8-4540-a5fb-66891bc00ca8","block_type":"box","text":"Prior to April 19, 2023, with respect to the Predecessor Fund, BAL was entitled to an annual","page_number":52,"box":{"x":117,"y":147,"width":687,"height":12}},{"id":"b8817e8b-2273-4413-9b61-95c0109ecee5","block_type":"box","text":"management fee at the maximum rate of 0.79% for the first $1 billion in average daily net assets,","page_number":52,"box":{"x":117,"y":162,"width":723,"height":13}},{"id":"2c4ba130-2bd6-48df-bd86-f4c9d8adc48f","block_type":"box","text":"0.74% for the next $2 billion in average daily net assets, 0.71% for the next $2 billion in average daily","page_number":52,"box":{"x":116,"y":178,"width":756,"height":12}},{"id":"5c0634ba-9b15-4f0f-87d2-2755f8aa3f01","block_type":"box","text":"net assets, 0.69% for the next $5 billion in average daily net assets, and 0.67% for average daily net","page_number":52,"box":{"x":117,"y":193,"width":748,"height":13}},{"id":"26b3bfa2-d295-44ad-9501-6c59000dcd7f","block_type":"box","text":"assets greater than $10 billion.","page_number":52,"box":{"x":116,"y":209,"width":234,"height":12}},{"id":"ab75be62-7216-4ea7-8d7e-a0e381a66aba","block_type":"box","text":"The following table sets forth the management fee (net of any applicable waivers) the Fund paid BFA","page_number":52,"box":{"x":116,"y":239,"width":755,"height":12}},{"id":"d4f15d6b-eb1b-4fae-9568-fc94103b47f0","block_type":"box","text":"for the fiscal periods noted. Prior to November 15, 2024, the date of the Reorganization, the","page_number":52,"box":{"x":116,"y":254,"width":686,"height":12}},{"id":"b8e86586-f88a-4b2c-baf2-06446a42f601","block_type":"box","text":"management fees paid and reimbursed were pursuant to the Predecessor Management Agreement","page_number":52,"box":{"x":117,"y":270,"width":744,"height":12}},{"id":"232de542-7aa6-490d-a894-68a7075bf145","block_type":"box","text":"between BAL and the Predecessor Trust, on behalf of the Predecessor Fund.","page_number":52,"box":{"x":117,"y":285,"width":579,"height":11}},{"id":"0f3eb1d0-3ba0-4b28-a747-235cf0bccf34","block_type":"box","text":"Fund","page_number":52,"box":{"x":196,"y":353,"width":31,"height":7}},{"id":"ffa80f48-3faa-470c-9121-61e9877528d5","block_type":"box","text":"Inception","page_number":52,"box":{"x":181,"y":363,"width":58,"height":9}},{"id":"7434275f-fb39-453c-b8a7-f192bdc83af3","block_type":"box","text":"Date","page_number":52,"box":{"x":198,"y":373,"width":28,"height":8}},{"id":"9e526be4-29da-4c64-97c5-d705326619b8","block_type":"box","text":"Management","page_number":52,"box":{"x":368,"y":321,"width":81,"height":10}},{"id":"f7ef81a5-6b45-40b4-840a-af12727b9b65","block_type":"box","text":"Fees Paid Net","page_number":52,"box":{"x":365,"y":332,"width":87,"height":7}},{"id":"2d82631a-671d-456f-80c7-0ee49fd18b2b","block_type":"box","text":"of Waivers for","page_number":52,"box":{"x":363,"y":342,"width":90,"height":8}},{"id":"341e109d-3f75-48b0-9b13-d9b802f98d8b","block_type":"box","text":"the Fiscal Year","page_number":52,"box":{"x":360,"y":353,"width":95,"height":7}},{"id":"5b360044-a46f-459a-9eb3-8a12e0831d8e","block_type":"box","text":"Ended April 30,","page_number":52,"box":{"x":360,"y":363,"width":96,"height":9}},{"id":"32599ebc-370e-475f-8493-b6454e03be27","block_type":"box","text":"2026","page_number":52,"box":{"x":393,"y":373,"width":29,"height":8}},{"id":"98461165-761e-4e27-a684-6027a33b7a85","block_type":"box","text":"Management","page_number":52,"box":{"x":559,"y":311,"width":82,"height":10}},{"id":"b0273663-71d1-4ed3-8565-0f3c0a2dcca1","block_type":"box","text":"Fees Paid Net","page_number":52,"box":{"x":556,"y":321,"width":88,"height":8}},{"id":"863ec21f-7462-4e4d-97b6-c2285cac2ebd","block_type":"box","text":"of Waivers for","page_number":52,"box":{"x":555,"y":332,"width":90,"height":7}},{"id":"30c80081-c3cb-465b-ae4d-b223903d4d7c","block_type":"box","text":"the Fiscal Period","page_number":52,"box":{"x":546,"y":342,"width":107,"height":8}},{"id":"7b2793d3-ddec-4e0c-804b-b7a8e669c7cd","block_type":"box","text":"June 1, 2024","page_number":52,"box":{"x":560,"y":352,"width":79,"height":10}},{"id":"0f99e173-d378-4875-bf80-269550502e16","block_type":"box","text":"to April 30,","page_number":52,"box":{"x":565,"y":363,"width":68,"height":9}},{"id":"931e7607-1e49-4eaf-a5be-c45eca7e0fd8","block_type":"box","text":"2025","page_number":52,"box":{"x":585,"y":373,"width":29,"height":8}},{"id":"2eaca8e2-8782-4219-9df2-9281f18de2f1","block_type":"box","text":"Management","page_number":52,"box":{"x":751,"y":321,"width":82,"height":10}},{"id":"9d297e24-57e5-41fe-81cb-2332d73366aa","block_type":"box","text":"Fees Paid Net","page_number":52,"box":{"x":748,"y":332,"width":88,"height":7}},{"id":"60702186-5f73-46dc-85a6-47bf24fde031","block_type":"box","text":"of Waivers for","page_number":52,"box":{"x":747,"y":342,"width":90,"height":8}},{"id":"b27fae88-eb27-47a4-b759-682489a36d1c","block_type":"box","text":"the Fiscal Year","page_number":52,"box":{"x":744,"y":353,"width":95,"height":7}},{"id":"d245ef5c-3b37-41e9-b5d2-d0104465823f","block_type":"box","text":"Ended May 31,","page_number":52,"box":{"x":744,"y":363,"width":91,"height":9}},{"id":"10cb6f3e-ac2b-466a-9637-e4793e5fdf2d","block_type":"box","text":"2024","page_number":52,"box":{"x":777,"y":373,"width":29,"height":8}},{"id":"60bd0c70-f5ac-4772-8acc-02534983b406","block_type":"box","text":"09/26/97 $3,372,961 $4,276,324 $3,477,777","page_number":52,"box":{"x":180,"y":391,"width":658,"height":12}},{"id":"24f99b37-fcb3-4c5e-b0d8-83d726f45f7e","block_type":"box","text":"The Investment Advisory Agreement with respect to the Fund continues in effect for two years from its","page_number":52,"box":{"x":116,"y":421,"width":763,"height":12}},{"id":"52d67ed2-7af7-47d5-acd6-4822ac2069d7","block_type":"box","text":"effective date, and thereafter is subject to annual approval by (i) the Board, or (ii) the vote of a majority","page_number":52,"box":{"x":116,"y":437,"width":766,"height":12}},{"id":"3ac0e0f2-54ee-4d7f-ac07-24fc7cf2aa61","block_type":"box","text":"of the outstanding voting securities (as defined in the 1940 Act) of the Fund, provided that in either","page_number":52,"box":{"x":116,"y":452,"width":735,"height":12}},{"id":"185abe67-f19c-4f03-a2fc-059075e1f8c1","block_type":"box","text":"event such continuance also is approved by a majority of the Board members who are not interested","page_number":52,"box":{"x":116,"y":468,"width":751,"height":12}},{"id":"17f1427c-8e6a-4370-ade4-2f59d2b67720","block_type":"box","text":"persons (as defined in the 1940 Act) of the Fund, by a vote cast in person at a meeting called for the","page_number":52,"box":{"x":117,"y":483,"width":749,"height":12}},{"id":"4762912e-577c-41e8-9216-66e9bf547ad7","block_type":"box","text":"purpose of voting on such approval.","page_number":52,"box":{"x":117,"y":499,"width":270,"height":12}},{"id":"be64678f-43e3-41db-8305-2ee41e6cd11a","block_type":"box","text":"The Investment Advisory Agreement with respect","page_number":52,"box":{"x":116,"y":528,"width":364,"height":12}},{"id":"05cb8892-918d-4d1a-842e-6270f5752e5e","block_type":"box","text":"to the Fund is terminable without penalty, on 60 days’","page_number":52,"box":{"x":480,"y":528,"width":393,"height":12}},{"id":"b9f096ba-edff-42c5-93bc-be7eedc37468","block_type":"box","text":"notice, by the Board or by a vote of the holders of","page_number":52,"box":{"x":117,"y":543,"width":359,"height":12}},{"id":"5e1870f1-2e1f-46f7-9110-2e10a0d75f40","block_type":"box","text":"f a majority of the Fund’s outstanding voting securities","page_number":52,"box":{"x":475,"y":543,"width":392,"height":12}},{"id":"d2152799-ddf9-47e0-9e7c-d2ad5bdbd1f3","block_type":"box","text":"(as defined in the 1940 Act). The Investment Advisory Agreement is also terminable upon 60 days’ notice","page_number":52,"box":{"x":117,"y":559,"width":768,"height":12}},{"id":"64c6cfca-191f-4c48-8d64-7cd0974d4690","block_type":"box","text":"by BFA and will terminate automatically in the event","page_number":52,"box":{"x":117,"y":575,"width":375,"height":12}},{"id":"dc8aa57d-7da0-47fe-a982-75460e6af9d6","block_type":"box","text":"t of its assignment (as defined in the 1940 Act).","page_number":52,"box":{"x":492,"y":574,"width":343,"height":13}},{"id":"3a42efd7-ccbe-45c9-ae54-0fcea9e066b5","block_type":"box","text":"Investment Sub-Adviser.","page_number":52,"box":{"x":117,"y":604,"width":193,"height":9}},{"id":"54791e69-b36b-403c-8095-6a7130cfeac6","block_type":"box","text":"Pursuant to the Investment Advisory Agreement between BFA and the Trust","page_number":52,"box":{"x":311,"y":604,"width":570,"height":12}},{"id":"bc33ad51-c490-4ded-9f25-eb3281ce20dc","block_type":"box","text":"entered into on behalf of the Fund, BFA may from time to time, in its sole discretion, to the extent","page_number":52,"box":{"x":116,"y":619,"width":716,"height":12}},{"id":"69a3ea43-1d06-45f5-b777-149c713631f7","block_type":"box","text":"permitted by applicable law, appoint one or more sub-advisers, including, without limitation, affiliates of","page_number":52,"box":{"x":117,"y":635,"width":758,"height":12}},{"id":"cccba6c7-8d05-470b-823c-d826c3db84d4","block_type":"box","text":"BFA, to perform investment advisory services with respect to the Fund. In addition, BFA may delegate","page_number":52,"box":{"x":117,"y":650,"width":753,"height":12}},{"id":"d39290f2-5f7c-413a-b94d-6b0c863b9d4f","block_type":"box","text":"certain of its investment advisory functions under the Investment Advisory Agreement to one or more of","page_number":52,"box":{"x":116,"y":666,"width":760,"height":12}},{"id":"7f1e2668-f7f9-46e2-afdc-aeeaa9c0dd73","block_type":"box","text":"its affiliates to the extent permitted by applicable law. BFA may terminate any or all sub-advisers or such","page_number":52,"box":{"x":117,"y":681,"width":764,"height":12}},{"id":"c39b4400-00f7-4406-9a25-f2eda7ec744f","block_type":"box","text":"delegation arrangements in its sole discretion at any time to the extent permitted by applicable law.","page_number":52,"box":{"x":116,"y":697,"width":725,"height":12}},{"id":"08ee5054-7591-45d8-b644-f7de8d30621a","block_type":"box","text":"BFA has entered into a sub-advisory agreement (the “Sub-Advisory Agreement”) with BIL, an affiliate","page_number":52,"box":{"x":117,"y":726,"width":749,"height":12}},{"id":"a485b743-f684-43ad-986a-b51dd644937e","block_type":"box","text":"of BFA, with respect to the Fund. BIL is a registered investment adviser, organized in 1999, located in","page_number":52,"box":{"x":116,"y":741,"width":754,"height":13}},{"id":"37fca7aa-03be-48a9-8bb6-5d68bfe8afe5","block_type":"box","text":"the U.K.","page_number":52,"box":{"x":116,"y":757,"width":59,"height":10}},{"id":"c7424590-3440-46b0-ab8f-0f0bd3a5e0ab","block_type":"box","text":"Subject to the supervision and oversight of the Board and BFA, BIL is primarily responsible for","page_number":52,"box":{"x":116,"y":786,"width":700,"height":12}},{"id":"ee61f83f-430c-4fc6-ba4a-af2c35c4da8b","block_type":"box","text":"execution of securities transactions and the management of specified assets outside the U.S. and","page_number":52,"box":{"x":116,"y":802,"width":725,"height":12}},{"id":"d4e4d791-e1ec-4bf7-940b-f6ca79d4285e","block_type":"box","text":"Canada in the Fund’s portfolio.","page_number":52,"box":{"x":117,"y":817,"width":226,"height":12}},{"id":"cc9f503e-0f5d-4723-9bab-e16f83b5fe80","block_type":"box","text":"Pursuant to the Sub-Advisory Agreement, BFA pays BIL for services it provides for that portion of the","page_number":52,"box":{"x":117,"y":846,"width":754,"height":13}},{"id":"23963384-0c04-45f2-8496-37c8798171f4","block_type":"box","text":"Fund for which it acts as sub-adviser a monthly fee at an annual rate equal to a percentage of the","page_number":52,"box":{"x":117,"y":862,"width":728,"height":12}},{"id":"dde50c70-70a7-46f6-ac57-a3cae3260d31","block_type":"box","text":"management fee paid to BFA under the Investment Advisory Agreement.","page_number":52,"box":{"x":117,"y":877,"width":546,"height":13}},{"id":"66cd034a-3ae0-4992-919e-9f6f5da65eac","block_type":"box","text":"43","page_number":52,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"35964456-6acc-413c-a0aa-35287703f387","block_type":"box","text":"NM1026U-6004408-52/267","page_number":52,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5b535ab8-1775-44dc-b3b2-d9429d178fe8","block_type":"box","text":"Unless earlier terminated as described below, the Sub-Advisory Agreement will remain in effect for an","page_number":53,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"bfbb8750-a4de-41ab-bb57-043c1697a325","block_type":"box","text":"initial two year period and from year to year if approved annually (i) by the Board or by a vote of a","page_number":53,"box":{"x":117,"y":102,"width":727,"height":13}},{"id":"87e1bf36-d4d1-465f-b8ff-8f614a47a36d","block_type":"box","text":"majority of the Fund’s outstanding voting securities and (ii) by a majority of the Trustees who are not","page_number":53,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"d2518aea-ac33-45c9-bc78-5e8bcbb139a7","block_type":"box","text":"parties to such agreement or interested persons (as defined in the 1940 Act) of any such party.","page_number":53,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"8377cdc2-8cc0-4213-b59f-372c4e01b0d7","block_type":"box","text":"The Sub-Advisory Agreement is terminable without penalty, on 60 days’ notice, by the Board or by a","page_number":53,"box":{"x":116,"y":165,"width":748,"height":12}},{"id":"bb7e771a-4113-4b47-82aa-8422b0733ea1","block_type":"box","text":"vote of the holders of a majority of the Fund’s outstanding voting securities (as defined in the 1940 Act)","page_number":53,"box":{"x":116,"y":181,"width":769,"height":12}},{"id":"d9fb09d0-cd86-46da-b350-bd5564403334","block_type":"box","text":"and will terminate automatically in the event of its assignment (as defined in the 1940 Act).","page_number":53,"box":{"x":116,"y":196,"width":676,"height":12}},{"id":"b2c97738-2845-4a4e-8e59-8d879a3913e6","block_type":"box","text":"Portfolio Managers.","page_number":53,"box":{"x":117,"y":228,"width":155,"height":12}},{"id":"6b9b18d3-7e2b-4115-9583-f2b28451b587","block_type":"box","text":"As of April 30, 2026, the individuals named as Portfolio Managers in the Fund’s","page_number":53,"box":{"x":273,"y":228,"width":598,"height":12}},{"id":"d3939f4c-c8ec-41b8-bb2a-41e1ffce3970","block_type":"box","text":"Prospectus were also primarily responsible for the day-to-day management of other BlackRock funds","page_number":53,"box":{"x":117,"y":243,"width":755,"height":12}},{"id":"799da72c-ba97-41b1-9cfc-0cf2ad15752b","block_type":"box","text":"and certain other types of portfolios and/or accounts as follows:","page_number":53,"box":{"x":116,"y":259,"width":475,"height":12}},{"id":"56ff870f-f7ce-44f9-88a4-a6641b335cf3","block_type":"box","text":"Olivia Treharne, CFA","page_number":53,"box":{"x":116,"y":290,"width":171,"height":12}},{"id":"41ecf650-febb-4b88-9b17-485e81159fcb","block_type":"box","text":"Types of Accounts","page_number":53,"box":{"x":116,"y":318,"width":120,"height":10}},{"id":"79855d77-1a26-4ad5-92c0-4f41ab0e12fd","block_type":"box","text":"Number","page_number":53,"box":{"x":708,"y":318,"width":50,"height":8}},{"id":"2fb52c36-80a3-498d-9614-91808bc7ea96","block_type":"box","text":"Total Assets","page_number":53,"box":{"x":798,"y":318,"width":79,"height":8}},{"id":"2656b3ca-8ea2-42d1-8d53-422201fb3350","block_type":"box","text":"Registered Investment Companies 7 $3.75 Billion","page_number":53,"box":{"x":117,"y":336,"width":771,"height":13}},{"id":"aaf50b01-d3ed-4c6b-8fb1-f90fed188296","block_type":"box","text":"Other Pooled Investment Vehicles 11 2.97 Billion","page_number":53,"box":{"x":116,"y":353,"width":772,"height":9}},{"id":"33f6c9ca-8ebb-4031-bd7a-ab4c4f2ca1d5","block_type":"box","text":"Other Accounts 2 1.57 Billion","page_number":53,"box":{"x":116,"y":368,"width":772,"height":10}},{"id":"8db7096c-139e-4c2c-82dd-5319de7e9d63","block_type":"box","text":"Stephen Andrews","page_number":53,"box":{"x":116,"y":400,"width":146,"height":12}},{"id":"b2ad2c38-afaf-42a6-a0b8-55c4b6d9435b","block_type":"box","text":"Types of Accounts","page_number":53,"box":{"x":116,"y":428,"width":120,"height":10}},{"id":"d1eadb0c-4fad-46e2-aad4-f972c0ae1522","block_type":"box","text":"Number","page_number":53,"box":{"x":696,"y":428,"width":50,"height":8}},{"id":"9e8fc3ac-59bd-4bee-bc26-375579a71010","block_type":"box","text":"Total Assets","page_number":53,"box":{"x":792,"y":428,"width":79,"height":8}},{"id":"0ab8f58c-ebc8-4203-bdaf-c0fa52874016","block_type":"box","text":"Registered Investment Companies 7 $ 3.76 Billion","page_number":53,"box":{"x":117,"y":446,"width":771,"height":13}},{"id":"8d4a8daa-cb42-4b5e-b734-f9f756323108","block_type":"box","text":"Other Pooled Investment Vehicles 7 5.12 Billion","page_number":53,"box":{"x":116,"y":462,"width":772,"height":10}},{"id":"9baa54cc-850c-4e6e-a9d2-f3869da35313","block_type":"box","text":"Other Accounts 1 70.29 Million","page_number":53,"box":{"x":116,"y":478,"width":772,"height":9}},{"id":"e970e41b-2ad6-4f28-9b7b-0cc78dc40e09","block_type":"box","text":"Molly Greenen, CFA","page_number":53,"box":{"x":117,"y":509,"width":163,"height":12}},{"id":"5f7fb0b7-0a2e-42a2-aa9c-304c87d5c3c8","block_type":"box","text":"Types of Accounts","page_number":53,"box":{"x":116,"y":537,"width":120,"height":10}},{"id":"38d9aac0-fa71-4725-a090-9821f712a263","block_type":"box","text":"Number","page_number":53,"box":{"x":708,"y":538,"width":50,"height":7}},{"id":"f125b603-90b0-4b2e-a036-226f91d8d9fc","block_type":"box","text":"Total Assets","page_number":53,"box":{"x":798,"y":538,"width":79,"height":7}},{"id":"db406810-a70c-4cbe-ab82-ffd0c3e7ad0e","block_type":"box","text":"Registered Investment Companies 7 $3.75 Billion","page_number":53,"box":{"x":117,"y":554,"width":771,"height":13}},{"id":"bbf7cc28-a6d8-4f6e-974e-5f58f4d8bd6c","block_type":"box","text":"Other Pooled Investment Vehicles 10 2.86 Billion","page_number":53,"box":{"x":116,"y":568,"width":772,"height":10}},{"id":"bf4d0e1a-e202-4b2c-854e-7123b88ea6b4","block_type":"box","text":"Other Accounts 2 1.57 Billion","page_number":53,"box":{"x":116,"y":582,"width":772,"height":10}},{"id":"80046e8e-78cd-4201-b21d-b96d588078fa","block_type":"box","text":"Pursuant to BFA’s policy, investment opportunities are allocated equitably among the Fund and other","page_number":53,"box":{"x":117,"y":614,"width":755,"height":12}},{"id":"4e9f4232-68bd-47f4-b980-4b8957979ef5","block_type":"box","text":"portfolios and accounts. For example, under certain circumstances, an investment opportunity may be","page_number":53,"box":{"x":117,"y":629,"width":761,"height":12}},{"id":"0840dd01-5f70-475a-9fef-75ba5a4805fe","block_type":"box","text":"restricted due to limited supply in the market, legal constraints or other factors, in which event the","page_number":53,"box":{"x":117,"y":645,"width":726,"height":12}},{"id":"f99e4875-a5f8-4762-bf0a-63563cb58c58","block_type":"box","text":"investment opportunity will be allocated equitably among those portfolios and accounts, including the","page_number":53,"box":{"x":117,"y":660,"width":746,"height":12}},{"id":"edafead6-fab3-4fb9-b651-4e3278c01366","block_type":"box","text":"Fund, seeking such investment opportunity. As a consequence, from time to time the Fund may","page_number":53,"box":{"x":117,"y":676,"width":709,"height":12}},{"id":"4147e163-6a63-4ab0-a35f-45d2cd29a7bf","block_type":"box","text":"receive a smaller allocation of an investment opportunity than it would have if the Portfolio Managers","page_number":53,"box":{"x":117,"y":691,"width":745,"height":12}},{"id":"dcc46299-03d7-46c8-8cd8-ee56e33536bc","block_type":"box","text":"and BFA and its affiliates did not manage other portfolios or accounts.","page_number":53,"box":{"x":116,"y":707,"width":518,"height":12}},{"id":"c4c31c43-6d51-4dcc-865b-4faa8fd7fe1e","block_type":"box","text":"Like the Fund, the other portfolios or accounts for which the Portfolio Managers are primarily","page_number":53,"box":{"x":117,"y":738,"width":685,"height":12}},{"id":"87f472f7-76b0-4be6-932e-43eb7a085b87","block_type":"box","text":"responsible for the day-to-day portfolio management generally pay an asset-based fee to BFA or its","page_number":53,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"b81579d7-6917-4f62-97fb-be36bd6d35a4","block_type":"box","text":"affiliates, as applicable, for its advisory services. One or more of those other portfolios or accounts,","page_number":53,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"619eee22-6f78-4333-ab27-0d27a4fb7d80","block_type":"box","text":"however, may pay BFA or its affiliates a performance-based fee in lieu of, or in addition to, an asset","page_number":53,"box":{"x":117,"y":785,"width":743,"height":12}},{"id":"baebb560-880f-453a-ac79-e8bec10479a4","block_type":"box","text":"based fee for its advisory services. A portfolio or account with a performance-based fee would pay BFA","page_number":53,"box":{"x":117,"y":800,"width":766,"height":12}},{"id":"98189d0d-3178-4c90-a566-6043c9748914","block_type":"box","text":"or its affiliates a portion of that portfolio’s or account’s gains, or would pay BFA or its affiliates more for","page_number":53,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"2a2f67ff-6e02-43c1-a161-a36433d5bf2f","block_type":"box","text":"its services than would otherwise be the case if BFA or any of its affiliates meets or exceeds specified","page_number":53,"box":{"x":117,"y":831,"width":759,"height":12}},{"id":"339b6bf4-09cc-431d-8c98-cb5a6078562d","block_type":"box","text":"performance targets. Performance-based fee arrangements could present an incentive for BFA or its","page_number":53,"box":{"x":117,"y":847,"width":751,"height":12}},{"id":"ca64f935-2e27-4b6f-8d18-32836e736385","block_type":"box","text":"affiliates to devote greater resources, and allocate more investment opportunities, to the portfolios or","page_number":53,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"2d35f0ea-f0b4-40d7-97b7-5968942b9273","block_type":"box","text":"accounts that have those fee arrangements, relative to other portfolios or accounts, in order to earn","page_number":53,"box":{"x":116,"y":878,"width":742,"height":12}},{"id":"0347200d-f470-4cd0-95a6-f528f19de1a1","block_type":"box","text":"44","page_number":53,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"ddb41065-76cc-4467-b244-dc8fd7dbe4da","block_type":"box","text":"NM1026U-6004408-53/267","page_number":53,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5e723e55-9175-467d-8018-a670b8a48c0b","block_type":"box","text":"larger fees. Although BFA and each of its affiliates have an obligation to allocate resources and","page_number":54,"box":{"x":117,"y":87,"width":711,"height":12}},{"id":"bbaec4c5-a25a-4bc5-b504-80ece9a5445b","block_type":"box","text":"opportunities equitably among portfolios and accounts and intend to do so, shareholders of the Fund","page_number":54,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"48b50d09-bb30-4981-907b-163de2a13b0c","block_type":"box","text":"should be aware that, as with any group of portfolios and accounts managed by an investment adviser","page_number":54,"box":{"x":116,"y":118,"width":764,"height":12}},{"id":"d83d7363-3b3f-4576-bdc7-9e2d69ca0f81","block_type":"box","text":"and/or its affiliates pursuant to varying fee arrangements, including performance-based fee","page_number":54,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"e35c6167-5a9c-48e2-b96a-8d81bbd5013c","block_type":"box","text":"arrangements, there is the potential for a conflict of interest, which may result in the Portfolio Managers","page_number":54,"box":{"x":116,"y":149,"width":770,"height":12}},{"id":"3d6da712-3d39-481d-a26c-2f68b86c21b1","block_type":"box","text":"favoring those portfolios or accounts with performance-based fee arrangements.","page_number":54,"box":{"x":116,"y":165,"width":601,"height":12}},{"id":"fa04b5bf-444a-41b8-965a-574a1406f62c","block_type":"box","text":"The tables below show, for each Portfolio Manager, the number of portfolios or accounts of the types","page_number":54,"box":{"x":116,"y":194,"width":753,"height":12}},{"id":"9ac7bf0b-373c-4d77-8e39-34db9af042b0","block_type":"box","text":"set forth in the above tables and the aggregate of total assets in those portfolios or accounts with","page_number":54,"box":{"x":116,"y":210,"width":724,"height":12}},{"id":"6aab426b-9fc6-4047-990b-5d40268517e0","block_type":"box","text":"respect to which the investment management fees are based on the performance of those portfolios or","page_number":54,"box":{"x":117,"y":225,"width":766,"height":12}},{"id":"10e0d4cd-86bc-4885-88d6-322ee43ca330","block_type":"box","text":"accounts as of April 30, 2026:","page_number":54,"box":{"x":116,"y":241,"width":226,"height":12}},{"id":"489e3e81-48be-4da1-94a0-d7272eb88397","block_type":"box","text":"Olivia Treharne, CFA","page_number":54,"box":{"x":116,"y":271,"width":171,"height":11}},{"id":"c6107af3-13a6-45ee-8658-00a2520d2ccb","block_type":"box","text":"Types of Accounts","page_number":54,"box":{"x":116,"y":338,"width":120,"height":10}},{"id":"11253e52-942a-4b69-8cc1-93b71dc20980","block_type":"box","text":"Number of Other","page_number":54,"box":{"x":622,"y":297,"width":106,"height":8}},{"id":"306201d3-9849-40ba-a88e-2a348105b81d","block_type":"box","text":"Accounts","page_number":54,"box":{"x":643,"y":308,"width":61,"height":7}},{"id":"381d195d-eb43-423c-afad-031ae171db36","block_type":"box","text":"with Performance Fees","page_number":54,"box":{"x":600,"y":318,"width":147,"height":7}},{"id":"063cba74-f966-4011-841a-d354b2270768","block_type":"box","text":"Managed by Portfolio","page_number":54,"box":{"x":607,"y":328,"width":135,"height":10}},{"id":"2eab39f1-46a7-4359-bd01-dc8468c77cd2","block_type":"box","text":"Manager","page_number":54,"box":{"x":647,"y":339,"width":55,"height":9}},{"id":"e752e121-1e46-431c-9602-6b1acc98cb03","block_type":"box","text":"Aggregate","page_number":54,"box":{"x":800,"y":328,"width":66,"height":10}},{"id":"b6cb615a-9315-49b1-bd47-a1b66acc4f7b","block_type":"box","text":"of Total Assets","page_number":54,"box":{"x":786,"y":338,"width":95,"height":8}},{"id":"ec835445-6565-4382-ad5c-2114321904b4","block_type":"box","text":"Registered Investment Companies 0 $ 0","page_number":54,"box":{"x":117,"y":355,"width":767,"height":13}},{"id":"00de2f1a-17fa-4f52-b160-6f0c8aeb8d5e","block_type":"box","text":"Other Pooled Investment Vehicles 0 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reflect the value senior management places on key resources.","page_number":54,"box":{"x":117,"y":770,"width":736,"height":12}},{"id":"964d1a3c-9635-4b2a-89c6-ef747ac165d2","block_type":"box","text":"Compensation may include a variety of components and may vary from year to year based on a","page_number":54,"box":{"x":117,"y":786,"width":710,"height":12}},{"id":"f18aa705-d2d2-4c07-9d77-3c4f45841465","block_type":"box","text":"number of factors. 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MSCI All Country Asia","page_number":55,"box":{"x":305,"y":423,"width":579,"height":12}},{"id":"a4b96e18-8b6b-4551-a22c-4b08c39e8ebe","block_type":"box","text":"Ex Japan in AUD Net Return; MSCI All Country Asia ex Japan in GBP Net","page_number":55,"box":{"x":306,"y":438,"width":555,"height":12}},{"id":"41f5844d-f48c-4557-87d6-d99f4a03b123","block_type":"box","text":"TR; MSCI All Country Asia ex Japan in SEK — NET; MSCI All Country Asia","page_number":55,"box":{"x":305,"y":453,"width":567,"height":12}},{"id":"22b3897a-000d-48b0-b292-3e5f1cf7ab14","block_type":"box","text":"ex Japan in USD — NET; MSCI All Country Asia Pacific Ex Japan Index, Net","page_number":55,"box":{"x":305,"y":468,"width":576,"height":12}},{"id":"22ff6434-c432-4cd6-b76d-e6c099470f2a","block_type":"box","text":"Dividends; MSCI All Country Asia Pacific Ex Japan Index, Net Dividends in","page_number":55,"box":{"x":306,"y":483,"width":559,"height":12}},{"id":"da060398-6edc-4983-9d2c-925c43a92531","block_type":"box","text":"GBP; MSCI Asia Pacific ex Japan ex Taiwan Gross TR Index; MSCI China All","page_number":55,"box":{"x":305,"y":498,"width":583,"height":12}},{"id":"1801e62e-adb2-4d86-88ce-604f231b358e","block_type":"box","text":"Shares 10-40 NET Index; MSCI EM Asia Index Net; MSCI EM China 10/40","page_number":55,"box":{"x":305,"y":513,"width":562,"height":11}},{"id":"5989915d-b7f6-430c-9199-c7967f224fae","block_type":"box","text":"Net TR Index; MSCI India 10-40 Index in USD; MSCI India Gross Returns in","page_number":55,"box":{"x":306,"y":528,"width":570,"height":11}},{"id":"4ae2fe47-1832-4fa7-b4a5-4cec232c2af8","block_type":"box","text":"JPY; MSCI CHINA A ONSHORE Index in CNY","page_number":55,"box":{"x":305,"y":543,"width":353,"height":11}},{"id":"e6f2b26b-5227-4202-a1e1-b0a4df9ecdc6","block_type":"box","text":"A smaller element of portfolio manager discretionary compensation may include consideration of:","page_number":55,"box":{"x":116,"y":575,"width":726,"height":12}},{"id":"e5d9bc6a-83c6-47d9-a012-486ea142702a","block_type":"box","text":"financial results, expense control, profit margins, strategic planning and implementation, quality of","page_number":55,"box":{"x":116,"y":590,"width":729,"height":12}},{"id":"923024dd-2b01-430e-aa78-3988e04adebd","block_type":"box","text":"client service, market share, corporate reputation, capital allocation, compliance and risk control,","page_number":55,"box":{"x":116,"y":606,"width":721,"height":12}},{"id":"5c28d7c1-7b6d-4aad-aab9-629b120cdfd3","block_type":"box","text":"leadership, technology and innovation. These factors are considered collectively by BlackRock","page_number":55,"box":{"x":117,"y":621,"width":706,"height":12}},{"id":"b5ce6c4e-fa4e-4c9b-b9c6-c86f587c5003","block_type":"box","text":"management and the relevant Chief Investment Officers.","page_number":55,"box":{"x":117,"y":637,"width":425,"height":12}},{"id":"3139483b-fb8f-41c6-a7f6-2811ac5ee17c","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":55,"box":{"x":117,"y":664,"width":429,"height":12}},{"id":"83adcf43-5eb2-4f8f-8fe5-a8e3b227fdb8","block_type":"box","text":"Discretionary incentive compensation is","page_number":55,"box":{"x":553,"y":664,"width":294,"height":12}},{"id":"e87ab6ee-3c80-48a7-928e-2f608381b653","block_type":"box","text":"distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/","page_number":55,"box":{"x":116,"y":680,"width":764,"height":12}},{"id":"3c8c80f7-6c2f-4993-9197-ed7b5951fa36","block_type":"box","text":"or deferred cash awards that notionally track the return of certain BlackRock investment products.","page_number":55,"box":{"x":116,"y":695,"width":724,"height":12}},{"id":"48c4c1cf-d122-4d90-aa7c-13738f2c1a12","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash.","page_number":55,"box":{"x":117,"y":723,"width":719,"height":12}},{"id":"325fd547-c0b5-46b7-8b85-dfcf80d26be3","block_type":"box","text":"Portfolio managers whose total compensation is above a specified threshold also receive deferred","page_number":55,"box":{"x":117,"y":738,"width":726,"height":12}},{"id":"86d00366-e6d6-4d4b-a533-cef2ab90a8c4","block_type":"box","text":"BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a","page_number":55,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"7e10ba3a-13aa-463d-bca9-04afa5fe5557","block_type":"box","text":"portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts","page_number":55,"box":{"x":117,"y":769,"width":721,"height":12}},{"id":"d6257bcb-e5ec-4948-a4bd-c0ad89bef820","block_type":"box","text":"compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to","page_number":55,"box":{"x":116,"y":785,"width":751,"height":12}},{"id":"7dc01313-ced7-43e9-9c58-728cbee8d2c4","block_type":"box","text":"sustain and improve its performance over future periods. In some cases, additional deferred","page_number":55,"box":{"x":116,"y":800,"width":682,"height":12}},{"id":"502d2f4b-c157-4b7b-8903-98a787d4c482","block_type":"box","text":"BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award","page_number":55,"box":{"x":117,"y":816,"width":757,"height":12}},{"id":"3ab1ceb7-0ef3-4c08-955b-73b36d0cd1da","block_type":"box","text":"to aid in retention, align interests with long-term shareholders and motivate performance. Deferred","page_number":55,"box":{"x":116,"y":831,"width":734,"height":12}},{"id":"2155db8f-f352-4e0b-9cca-4938c3a65515","block_type":"box","text":"BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units","page_number":55,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"5bdcea21-256d-4ed5-9bca-b643fc89ce98","block_type":"box","text":"that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc.","page_number":55,"box":{"x":116,"y":862,"width":717,"height":12}},{"id":"9e263896-10ce-4031-9ca9-c60a3ad1f756","block_type":"box","text":"common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.","page_number":55,"box":{"x":116,"y":878,"width":725,"height":12}},{"id":"51881ad0-bad5-4eef-988a-a4bd1aacfcb9","block_type":"box","text":"46","page_number":55,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"dda3e0ec-914a-443e-9409-3c2355eb98ec","block_type":"box","text":"NM1026U-6004408-55/267","page_number":55,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3e8321da-497b-4dcb-8b61-1a44abff0f59","block_type":"box","text":"For certain portfolio managers, a portion of the discreti","page_number":56,"box":{"x":117,"y":87,"width":383,"height":12}},{"id":"eed3656c-1b60-4832-9043-ca4caf476508","block_type":"box","text":"onary incentive compensation is also distributed in","page_number":56,"box":{"x":501,"y":87,"width":362,"height":12}},{"id":"a40c3ca6-fa91-4057-be1c-98c71839fa91","block_type":"box","text":"the form of deferred cash awards that notionally track t","page_number":56,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"69b5f764-828c-45f7-9a8d-7e1554a6fd9d","block_type":"box","text":"the returns of select BlackRock investment products","page_number":56,"box":{"x":499,"y":102,"width":375,"height":12}},{"id":"92a74bdf-f860-45a0-86a7-80416be406a2","block_type":"box","text":"they manage, which provides direct alignment of","page_number":56,"box":{"x":116,"y":118,"width":349,"height":12}},{"id":"9e3f75a4-23bd-4933-ba99-edf0a66e72eb","block_type":"box","text":"portfolio manager discretionary incentive compensation","page_number":56,"box":{"x":466,"y":118,"width":396,"height":12}},{"id":"63e224b9-af73-4013-91fe-1fa5b4a060bf","block_type":"box","text":"with investment product results. Deferred cash award","page_number":56,"box":{"x":116,"y":134,"width":371,"height":11}},{"id":"b6cd31f3-e4cf-4972-b27b-baa38eb37a6a","block_type":"box","text":"rds vest ratably over a number of years and, once","page_number":56,"box":{"x":487,"y":134,"width":353,"height":12}},{"id":"7c3cfbde-228b-4444-a126-14ccbeb2272f","block_type":"box","text":"vested, settle in the form of cash. Only portfolio managers who manage specified products and whose total","page_number":56,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"efec0c2d-8604-4398-9ea3-6f94ae86971a","block_type":"box","text":"compensation is above a specified threshold are eligible","page_number":56,"box":{"x":116,"y":165,"width":398,"height":12}},{"id":"a63d6b01-fb8e-4ab6-8b02-731430269239","block_type":"box","text":"to participate in the deferred cash award program.","page_number":56,"box":{"x":514,"y":165,"width":365,"height":12}},{"id":"dbba698f-c021-4681-b160-66b7e8581680","block_type":"box","text":"Other Compensation Benefits.","page_number":56,"box":{"x":116,"y":196,"width":241,"height":11}},{"id":"cd16bc20-ede5-4349-9ec4-4d3bef40fc9f","block_type":"box","text":"In addition to base salary and discretionary incentive compensation,","page_number":56,"box":{"x":358,"y":196,"width":515,"height":12}},{"id":"085ce70b-cb27-44db-9bcb-4fa272ffaf49","block_type":"box","text":"portfolio managers may be eligible to receive or participate in one or more of the following:","page_number":56,"box":{"x":117,"y":211,"width":674,"height":12}},{"id":"886c784a-c9ab-43ff-bdc7-b71f29708329","block_type":"box","text":"Incentive Savings Plans","page_number":56,"box":{"x":117,"y":242,"width":177,"height":12}},{"id":"1de3cf72-ae7d-4e59-b3f4-1a7448143e27","block_type":"box","text":"s — United Kingdom-based portfolio managers are also eligible to participate in","page_number":56,"box":{"x":294,"y":242,"width":587,"height":12}},{"id":"647b347c-a0f5-4326-8842-d80b638187e6","block_type":"box","text":"broad-based plans offered generally to BlackRock employees, including broad-based retirement,","page_number":56,"box":{"x":117,"y":258,"width":722,"height":12}},{"id":"e81e23cf-1228-44b8-99ac-d8e3f94b6952","block_type":"box","text":"health and other employee benefit plans. For example, BlackRock has created a variety of incentive","page_number":56,"box":{"x":117,"y":273,"width":745,"height":12}},{"id":"7499022b-6927-44ed-8651-6b3b682d3a5a","block_type":"box","text":"savings plans in which BlackRock employees are eligible to participate, including the BlackRock","page_number":56,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"4cfb4709-28d8-40b0-bd00-28db9168ab46","block_type":"box","text":"Retirement Savings Plan (RSP) and the BlackRock Employee Stock Purchase Plan (ESPP). The","page_number":56,"box":{"x":117,"y":304,"width":723,"height":12}},{"id":"aca5f3f3-3930-4580-adec-25b5ed7ff8e4","block_type":"box","text":"employer contribution to the RSP is between 10% and 15% of eligible pay capped at £160,000 per","page_number":56,"box":{"x":116,"y":320,"width":736,"height":12}},{"id":"1d88a592-776e-4595-810a-b97fde678fff","block_type":"box","text":"annum. The RSP offers a range of investment options, including several collective investment funds","page_number":56,"box":{"x":116,"y":335,"width":746,"height":12}},{"id":"eecf8a1c-67fa-49c4-93f7-24bbcf53087b","block_type":"box","text":"managed by the firm. BlackRock contributions follow the investment direction set by participants for","page_number":56,"box":{"x":117,"y":351,"width":741,"height":12}},{"id":"0dde1357-acdf-4027-aa02-44db01d3e561","block_type":"box","text":"their own contributions or, in the absence of an investment election being made, are invested into a","page_number":56,"box":{"x":116,"y":366,"width":742,"height":12}},{"id":"4bced66a-64ab-4bcf-9e0b-1c976d0c334c","block_type":"box","text":"target date fund that corresponds to, or is closest to, the year in which the participant attains age 65.","page_number":56,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"c6aecd17-a075-409d-8f00-5f391ea8aa0d","block_type":"box","text":"The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value","page_number":56,"box":{"x":116,"y":397,"width":770,"height":10}},{"id":"15f03d9b-f843-4fc6-97b1-78f111ffb4d9","block_type":"box","text":"of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000","page_number":56,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"e1096b02-cde0-4b04-8b71-71ffbadca8b4","block_type":"box","text":"shares of common stock or a US dollar value of $25,000 based on its fair market value on the","page_number":56,"box":{"x":116,"y":427,"width":700,"height":12}},{"id":"2dd0413a-69a8-45cc-b98d-5a8661d1de1f","block_type":"box","text":"purchase date. Mses. Greenen and Treharne are eligible to participate in these plans.","page_number":56,"box":{"x":117,"y":444,"width":641,"height":12}},{"id":"834896a2-9262-4fce-a93e-164e4ca3080e","block_type":"box","text":"Incentive Savings Plans","page_number":56,"box":{"x":117,"y":475,"width":177,"height":12}},{"id":"84350bbe-3873-454c-8c42-541147f046f2","block_type":"box","text":"s — Hong Kong-based portfolio managers are also eligible to participate in","page_number":56,"box":{"x":294,"y":475,"width":551,"height":12}},{"id":"9a23342a-76c9-4b8c-9620-3ba280519f1c","block_type":"box","text":"broad-based plans offered generally to BlackRock employees, including broad-based retirement,","page_number":56,"box":{"x":117,"y":490,"width":722,"height":12}},{"id":"c788c695-07e2-4386-8000-7ea783fe1f18","block_type":"box","text":"health and other employee benefit plans. For example, BlackRock Inc. has created a variety of","page_number":56,"box":{"x":117,"y":506,"width":706,"height":12}},{"id":"8aa94d94-fbd5-4864-89fa-7b9d7f78e2e2","block_type":"box","text":"incentive savings plans in which employees are eligible to participate, including the Hong Kong","page_number":56,"box":{"x":117,"y":521,"width":707,"height":12}},{"id":"6bbf3c7e-8e52-4539-a95c-d9be1d7b3a63","block_type":"box","text":"Employee Retirement Plan (ERP) that includes the Mandatory Provident Fund (MPF) plan and","page_number":56,"box":{"x":117,"y":537,"width":705,"height":12}},{"id":"544d5ce6-f584-4e08-acd8-08778fceb85e","block_type":"box","text":"BlackRock ORSO Retirement Plan (ORSO), and the BlackRock Employee Stock Purchase Plan","page_number":56,"box":{"x":117,"y":552,"width":718,"height":12}},{"id":"55dee911-37ec-42be-bce2-1b012a98735b","block_type":"box","text":"(ESPP). BlackRock contributes 5% to the ERP and will match 2~5% employee’s monthly voluntary","page_number":56,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"48763bac-27ee-4132-8df3-cf4ecd646ac3","block_type":"box","text":"contribution. The ORSO offers a range of investment options and the funds are managed by the firm.","page_number":56,"box":{"x":116,"y":583,"width":755,"height":12}},{"id":"51f463fe-42a3-453d-90e9-021303ab6a51","block_type":"box","text":"BlackRock contributions follow the investment direction set by participants for their own contributions.","page_number":56,"box":{"x":117,"y":599,"width":756,"height":12}},{"id":"2208ab42-e837-4379-af7f-9f69fc50ed11","block_type":"box","text":"The ESPP allows for investment in BlackRock common stock at a 5% discount on the fair market value","page_number":56,"box":{"x":116,"y":614,"width":770,"height":10}},{"id":"64c0440a-0f07-478c-ad95-b9e118ecf91f","block_type":"box","text":"of the stock on the purchase date. Annual participation in the ESPP is limited to the purchase of 1,000","page_number":56,"box":{"x":116,"y":630,"width":762,"height":12}},{"id":"9d7797a6-7d9c-4a17-904e-bbd6985234c2","block_type":"box","text":"shares of common stock or a US dollar value of $25,000 based on its fair market value on the","page_number":56,"box":{"x":116,"y":644,"width":700,"height":12}},{"id":"74533879-0248-4025-95c2-a9946f0d725c","block_type":"box","text":"purchase date. Mr. Andrews is eligible to participate in these plans.","page_number":56,"box":{"x":117,"y":661,"width":496,"height":12}},{"id":"6df664bf-9502-4869-854b-24f678e5af58","block_type":"box","text":"The following table sets forth the dollar range of equity securities of the Fund beneficially owned by","page_number":56,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"616c60ee-d759-4b5e-97c6-abac27a86a0b","block_type":"box","text":"each portfolio manager as of April 30, 2026.","page_number":56,"box":{"x":116,"y":707,"width":325,"height":12}},{"id":"8e07d944-8f11-4213-aadc-0392ca6ac992","block_type":"box","text":"Portfolio Manager","page_number":56,"box":{"x":247,"y":745,"width":114,"height":10}},{"id":"00171d20-46c4-4596-8835-f27ac090a489","block_type":"box","text":"Dollar Range of","page_number":56,"box":{"x":641,"y":735,"width":99,"height":10}},{"id":"61c1ab9d-46fa-447f-8547-85c617f3d135","block_type":"box","text":"Equity Securities Beneficially Owned","page_number":56,"box":{"x":574,"y":745,"width":235,"height":10}},{"id":"9add995b-5ec3-41f2-991c-3d07fe63c5ff","block_type":"box","text":"Olivia Treharne None","page_number":56,"box":{"x":116,"y":764,"width":595,"height":10}},{"id":"57ef6ee9-bb32-4a1b-ad78-ae31cb77487e","block_type":"box","text":"Molly Greenen $1 - $10,000","page_number":56,"box":{"x":117,"y":779,"width":621,"height":13}},{"id":"d14a79cb-3897-4091-87ec-d8f27c36d681","block_type":"box","text":"Stephen Andrews $10,001 - $50,000","page_number":56,"box":{"x":116,"y":794,"width":643,"height":13}},{"id":"c4ba4200-4442-4ac5-8b45-6d67face4b7f","block_type":"box","text":"Codes of Ethics.","page_number":56,"box":{"x":116,"y":826,"width":130,"height":10}},{"id":"1f169e17-0988-420c-bde1-74eb881aefae","block_type":"box","text":"The Trust, BFA, BIL and the Distributor have adopted codes of ethics pursuant to","page_number":56,"box":{"x":248,"y":826,"width":613,"height":12}},{"id":"1d1d7b6b-f5b3-4f47-9924-7222a51d30f6","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":56,"box":{"x":117,"y":842,"width":753,"height":12}},{"id":"7cd20d1f-1621-4612-9ba6-e1f4f0a1f059","block_type":"box","text":"invest in securities, subject to certain limitations, including securities that may be purchased or held by","page_number":56,"box":{"x":117,"y":857,"width":763,"height":12}},{"id":"3940d7d9-39ac-4091-a83d-696cfda0988f","block_type":"box","text":"the Fund. Each code of ethics is available by contacting BlackRock at the telephone number on the","page_number":56,"box":{"x":116,"y":873,"width":742,"height":12}},{"id":"5cc2d742-aa53-424b-bfad-b0131b9e90c4","block_type":"box","text":"47","page_number":56,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"07a478aa-b946-4f3a-841a-f2642cb96d85","block_type":"box","text":"NM1026U-6004408-56/267","page_number":56,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3e76d9fa-d729-46d6-be16-2c0dba647373","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":57,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"8c79cc44-dfd4-489d-a625-e78055303566","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":57,"box":{"x":116,"y":102,"width":705,"height":13}},{"id":"3f99fef7-6d6b-4ddc-8688-d16b63b140dc","block_type":"box","text":"publicinfo@sec.gov","page_number":57,"box":{"x":117,"y":118,"width":158,"height":12}},{"id":"155b0eff-155e-4dac-8166-e0d97c657a1f","block_type":"box","text":".","page_number":57,"box":{"x":277,"y":126,"width":8,"height":1}},{"id":"f4dd60af-0b59-4297-8c97-8c63a744b3c6","block_type":"box","text":"Anti-Money Laundering Requirements.","page_number":57,"box":{"x":116,"y":149,"width":308,"height":12}},{"id":"471d902d-78a3-4f5b-9232-bc639b4dbfa5","block_type":"box","text":"The Fund is subject to the USA PATRIOT Act (the “Patriot","page_number":57,"box":{"x":425,"y":149,"width":442,"height":12}},{"id":"201ea7c1-d128-4d8c-9d64-6ccd5746643d","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":57,"box":{"x":116,"y":165,"width":722,"height":12}},{"id":"99b17f01-14cf-4db1-b429-cedec14efbbc","block_type":"box","text":"money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the","page_number":57,"box":{"x":117,"y":180,"width":771,"height":12}},{"id":"51ca8579-6273-469c-af3c-2f38c44eb81c","block_type":"box","text":"Fund may request information from Authorized Participants to enable it to form a reasonable belief that","page_number":57,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"9d0b2811-0d5f-4999-a4a9-7335b18cc25a","block_type":"box","text":"it knows the true identity of its Authorized Participants. This information will be used to verify the","page_number":57,"box":{"x":117,"y":211,"width":715,"height":12}},{"id":"f786a614-76c8-4e75-a2a8-96ac0d72336f","block_type":"box","text":"identity of Authorized Participants or, in some cases, the status of financial professionals; it will be","page_number":57,"box":{"x":117,"y":227,"width":730,"height":12}},{"id":"50a9ca61-8109-410f-9a2e-cd1cb2238020","block_type":"box","text":"used only for compliance with the requirements of the Patriot Act.","page_number":57,"box":{"x":117,"y":242,"width":489,"height":12}},{"id":"0d096294-2f7e-4dfd-acd8-936bdfe5bde6","block_type":"box","text":"The Fund reserves the right to reject purchase orders from persons who have not submitted","page_number":57,"box":{"x":116,"y":273,"width":688,"height":12}},{"id":"79bc113e-5b36-4a1a-a64b-d3320e57641c","block_type":"box","text":"information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to","page_number":57,"box":{"x":117,"y":289,"width":720,"height":12}},{"id":"bba1b8fc-adb5-44e2-a16a-f0fd8811e791","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":57,"box":{"x":117,"y":304,"width":762,"height":12}},{"id":"517642a3-9427-4703-a4d8-f77ce1cbab05","block_type":"box","text":"is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with","page_number":57,"box":{"x":117,"y":320,"width":756,"height":12}},{"id":"4d7ae6f9-9c67-4996-a17e-4e5ea2259092","block_type":"box","text":"respect to potential money laundering, terrorism or other illicit activities.","page_number":57,"box":{"x":117,"y":335,"width":533,"height":12}},{"id":"b9e7f004-19b3-45ae-874f-fe28c96da9a7","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":57,"box":{"x":116,"y":366,"width":370,"height":12}},{"id":"a8ed788f-0c1d-4139-97f8-125941f6010f","block_type":"box","text":"State Street Bank and Trust Company (“State","page_number":57,"box":{"x":487,"y":366,"width":344,"height":12}},{"id":"f60bd8e4-b1a9-4d5f-8f55-249d8b55b93b","block_type":"box","text":"Street”) serves as administrator, custodian and transfer agent for the Fund under the Master Services","page_number":57,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"3dbfca1f-bad1-4b0a-93b3-557fd2c0a8ca","block_type":"box","text":"Agreement and related Service Schedule (the “Service Module”). State Street’s principal address is","page_number":57,"box":{"x":116,"y":397,"width":742,"height":12}},{"id":"f1c1e2e8-1501-44ed-8143-27f07327e9ce","block_type":"box","text":"One Congress Street, Suite 1, Boston, MA 02114. Pursuant to the Service Module for Fund","page_number":57,"box":{"x":116,"y":413,"width":684,"height":12}},{"id":"6a5b4388-761e-482b-b57b-f842131146d8","block_type":"box","text":"Administration and Accounting Services with the Trust, State Street provides necessary administrative,","page_number":57,"box":{"x":116,"y":428,"width":768,"height":12}},{"id":"68388edc-40a6-4ed0-a6af-0341b79520b3","block_type":"box","text":"legal, tax and accounting and financial reporting services for the maintenance and operations of the","page_number":57,"box":{"x":117,"y":444,"width":743,"height":12}},{"id":"acee3b91-a057-4a64-9ad8-aa3723e297e1","block_type":"box","text":"Trust and the Fund. In addition, State Street makes available the office space, equipment, personnel","page_number":57,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"93fde94f-bbf7-4d3c-9104-83bf046456a4","block_type":"box","text":"and facilities required to provide such services. Pursuant to the Service Module for Custodial Services","page_number":57,"box":{"x":116,"y":475,"width":761,"height":12}},{"id":"d117c533-1051-4ba1-9f22-3f486e35e6a7","block_type":"box","text":"with the Trust, State Street maintains, in separate accounts, cash, securities and other assets of the","page_number":57,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"f7235e06-d6a9-4648-b9ba-60d81b1426c9","block_type":"box","text":"Trust and the Fund, keeps all necessary accounts and records and provides other services. State","page_number":57,"box":{"x":116,"y":506,"width":729,"height":12}},{"id":"006f9cf5-edac-4f30-a6bf-b7b8c422bf7a","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":57,"box":{"x":116,"y":521,"width":745,"height":12}},{"id":"8de51943-73d9-4f44-8e1d-acba0bd227eb","block_type":"box","text":"payments for securities purchased by the Trust for the Fund. State Street is authorized to appoint","page_number":57,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"efd0f29d-15e8-4be8-a755-825bc5b3a40d","block_type":"box","text":"certain foreign custodians or foreign custody managers for Fund investments outside the U.S.","page_number":57,"box":{"x":116,"y":552,"width":701,"height":12}},{"id":"1e8b9528-1b27-40b0-bf61-767a9a93eb81","block_type":"box","text":"Pursuant to the Service Module for Transfer Agency Services with the Trust, State Street acts as a","page_number":57,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"3f896a03-14cf-4102-a21e-f997ea6a0425","block_type":"box","text":"transfer agent for the Fund’s authorized and issued shares of beneficial interest, and as dividend","page_number":57,"box":{"x":116,"y":583,"width":722,"height":12}},{"id":"1d6a50f5-9c3c-4b10-89a3-efdc73e06fda","block_type":"box","text":"disbursing agent of the Trust. As compensation for these services, State Street receives certain out-of","page_number":57,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"bde92fb8-08e4-472a-a849-4492dc93dac0","block_type":"box","text":"pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly by BFA.","page_number":57,"box":{"x":117,"y":614,"width":769,"height":12}},{"id":"4aa4dfef-2ab8-4836-95a2-f6f8a192cabe","block_type":"box","text":"BFA pays the compensation because it has agreed to pay these operating expenses under the","page_number":57,"box":{"x":117,"y":630,"width":708,"height":12}},{"id":"82c4cdfd-7a28-4b30-a482-4eadf97dc083","block_type":"box","text":"Investment Advisory Agreement as described therein.","page_number":57,"box":{"x":117,"y":645,"width":403,"height":12}},{"id":"bd55eace-ad45-49ad-adac-46d279119d74","block_type":"box","text":"BAL served as the Predecessor Fund’s administrator (in such capacity, the “Administrator”) pursuant to","page_number":57,"box":{"x":117,"y":676,"width":748,"height":12}},{"id":"597ef880-a61e-4ff2-bf55-4d0202300a9f","block_type":"box","text":"an administration agreement (the “Predecessor Administration Agreement”). The Administrator agreed to","page_number":57,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"ea316963-6f9c-4322-ab2d-2b3b064b6652","block_type":"box","text":"maintain office facilities for the Predecessor Fund; furnish the Predecessor Fund with clerical,","page_number":57,"box":{"x":117,"y":707,"width":677,"height":11}},{"id":"1eaad201-3c21-4870-a597-6a4ebe1d36e1","block_type":"box","text":"bookkeeping and administrative services; oversee the determination and publication of the Predecessor","page_number":57,"box":{"x":117,"y":723,"width":754,"height":12}},{"id":"df67f4a4-4e9b-4332-a708-3ff14314e9e0","block_type":"box","text":"Fund’s net asset value; oversee the preparation and filing of Federal, state and local income tax returns;","page_number":57,"box":{"x":117,"y":738,"width":755,"height":12}},{"id":"65d52b27-f5fe-41a9-973a-e6270e209a0a","block_type":"box","text":"prepare certain reports required by regulatory authorities; calculate various contractual expenses;","page_number":57,"box":{"x":117,"y":754,"width":706,"height":12}},{"id":"8721f3f5-213f-4a9c-aede-4a38ae1d37f6","block_type":"box","text":"determine the amount of dividends and distributions available for payment by the Predecessor Fund to its","page_number":57,"box":{"x":116,"y":769,"width":766,"height":12}},{"id":"370d2e52-e4bb-4c19-94df-b64622691363","block_type":"box","text":"shareholders; prepare and arrange for the printing of dividend notices to shareholders; provide","page_number":57,"box":{"x":116,"y":785,"width":686,"height":12}},{"id":"848dc6fd-993b-4dcb-8b48-f40bf0905ffb","block_type":"box","text":"Predecessor Fund service providers with such information as is required to effect the payment of","page_number":57,"box":{"x":117,"y":800,"width":703,"height":12}},{"id":"600253ce-baf9-4743-afd4-cc0c0803d1ad","block_type":"box","text":"dividends and distributions; and serve as liaison with the Predecessor Trust’s officers, independent","page_number":57,"box":{"x":116,"y":816,"width":719,"height":12}},{"id":"00fb7619-f9ec-4ff6-a004-62bce0458615","block_type":"box","text":"accountants, legal counsel, custodian, accounting agent and transfer and dividend disbursing agent in","page_number":57,"box":{"x":116,"y":831,"width":747,"height":12}},{"id":"95ea2ac8-c842-4ac4-ac9a-aecad609a912","block_type":"box","text":"establishing the accounting policies of the Predecessor Fund and monitoring financial and shareholder","page_number":57,"box":{"x":116,"y":847,"width":750,"height":12}},{"id":"c95a005d-e46e-45e0-a90d-7d7350bced6d","block_type":"box","text":"accounting services. The Administrator may from time to time voluntarily waive administration fees with","page_number":57,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"b308780c-16de-4c83-a06f-d9c53083f4c6","block_type":"box","text":"respect to the Predecessor Fund and may voluntarily reimburse the Predecessor Fund for expenses.","page_number":57,"box":{"x":117,"y":878,"width":737,"height":12}},{"id":"3158a034-835e-47e6-bb23-a5a280c1f504","block_type":"box","text":"48","page_number":57,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"79cbed1f-e4cc-48a8-8408-fdd631027383","block_type":"box","text":"NM1026U-6004408-57/267","page_number":57,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5d289f30-33bd-4aeb-9363-a108e5b1ccf0","block_type":"box","text":"Under the Predecessor Administration Agreement,","page_number":58,"box":{"x":117,"y":87,"width":372,"height":12}},{"id":"539abc16-7198-46c8-91fd-d442f27865b8","block_type":"box","text":"the Predecessor Trust, on behalf of the Predecessor","page_number":58,"box":{"x":489,"y":87,"width":386,"height":11}},{"id":"f95f8469-78c2-4d18-b76b-6630ce08c0d9","block_type":"box","text":"Fund, paid to the Administrator a fee, computed","page_number":58,"box":{"x":117,"y":102,"width":351,"height":12}},{"id":"1863b3cc-49b2-42b9-9365-bb545e667f2d","block_type":"box","text":"daily and payable monthly, at an aggregate annual rate","page_number":58,"box":{"x":469,"y":103,"width":405,"height":12}},{"id":"985eac15-de69-4a1f-a0a6-574fb918b03f","block_type":"box","text":"of (i) 0.0425% of the first $500 million of the Predec","page_number":58,"box":{"x":116,"y":117,"width":374,"height":13}},{"id":"e6cef352-0376-49b6-8375-c08dfba94b49","block_type":"box","text":"essor Fund’s average daily net assets, 0.040% of the","page_number":58,"box":{"x":490,"y":118,"width":392,"height":12}},{"id":"a7534324-2f12-49af-b750-692f70842ea1","block_type":"box","text":"next $500 million of the Predecessor Fund’s average daily","page_number":58,"box":{"x":117,"y":133,"width":421,"height":13}},{"id":"9bf91708-a406-4e7a-b715-76cb3e6639d3","block_type":"box","text":"y net assets, 0.0375% of the next $1 billion of","page_number":58,"box":{"x":538,"y":133,"width":328,"height":12}},{"id":"13b4a3b2-8efb-40bf-ab0c-aecba1fb1b2d","block_type":"box","text":"the Predecessor Fund’s average daily net assets, 0.","page_number":58,"box":{"x":116,"y":149,"width":377,"height":12}},{"id":"b7911262-553b-4c86-98aa-2c4c20364e2e","block_type":"box","text":"035% of the next $2 billion of the Predecessor","page_number":58,"box":{"x":495,"y":148,"width":340,"height":12}},{"id":"4549b4f3-b0a4-4b23-9e5a-8b5fa9ba0787","block_type":"box","text":"Fund’s average daily net assets, 0.0325% of the nex","page_number":58,"box":{"x":117,"y":165,"width":381,"height":12}},{"id":"ce881428-641b-4cda-88b9-af78fbbadc60","block_type":"box","text":"t $9 billion of the Predecessor Fund’s average daily","page_number":58,"box":{"x":499,"y":164,"width":377,"height":13}},{"id":"684239ca-c3dd-4150-a5e1-05989ea4b4ff","block_type":"box","text":"net assets and 0.030% of the average daily net asse","page_number":58,"box":{"x":117,"y":180,"width":381,"height":12}},{"id":"18ebb03f-dd06-4f4b-af33-4b3268b31645","block_type":"box","text":"ts of the Predecessor Fund in excess of $13 billion","page_number":58,"box":{"x":499,"y":179,"width":372,"height":12}},{"id":"8dd3a09c-35a3-475b-b2db-dff28b461cff","block_type":"box","text":"and (ii) 0.020% of average daily net assets allocat","page_number":58,"box":{"x":116,"y":196,"width":363,"height":12}},{"id":"bb7d7944-7ed5-46b6-9e45-01ae5c186fd2","block_type":"box","text":"ed to each class of shares of the Predecessor Fund.","page_number":58,"box":{"x":479,"y":196,"width":385,"height":9}},{"id":"95602d1f-f457-45b0-8933-2800e25350d3","block_type":"box","text":"The table below sets forth information about the administration fees paid by the Predecessor Trust on","page_number":58,"box":{"x":116,"y":227,"width":759,"height":12}},{"id":"d00d94ff-ab06-4e29-a3ee-b95573613c64","block_type":"box","text":"behalf of the Predecessor Fund, to the Administrator, and the amounts waived for the periods shown.","page_number":58,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"d6455162-8ae5-4d03-8ed7-e7bdc2da82ba","block_type":"box","text":"Prior to November 15, 2024, the date of the Reorganization, the administration fees paid and waived","page_number":58,"box":{"x":117,"y":258,"width":750,"height":12}},{"id":"7a3dbc1d-b9b3-4ee6-86dd-0fecf0ec59f4","block_type":"box","text":"were pursuant to the Predecessor Administration Agreement between BAL and the Predecessor Trust,","page_number":58,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"a24abf5d-b700-47c8-b312-0394dac0e8c9","block_type":"box","text":"on behalf of the Predecessor Fund.","page_number":58,"box":{"x":116,"y":289,"width":267,"height":9}},{"id":"e9f7dc39-bddb-47f8-8bc5-9f6d9e33d1f2","block_type":"box","text":"Fees Paid to","page_number":58,"box":{"x":696,"y":316,"width":77,"height":8}},{"id":"bf50c843-6263-4e5b-83c0-4d8972241f4e","block_type":"box","text":"the","page_number":58,"box":{"x":724,"y":327,"width":20,"height":7}},{"id":"f28043d1-8118-4198-b21d-4620f1ca8f17","block_type":"box","text":"Administrator","page_number":58,"box":{"x":690,"y":337,"width":89,"height":8}},{"id":"eb84df10-28a3-4308-b556-debb5ee4336d","block_type":"box","text":"Fees Waived","page_number":58,"box":{"x":799,"y":316,"width":80,"height":8}},{"id":"f7913e8b-6309-48ab-9592-a0b0c39d4810","block_type":"box","text":"by the","page_number":58,"box":{"x":820,"y":327,"width":39,"height":9}},{"id":"c342822c-cc3f-46ce-bae7-df3b612938c6","block_type":"box","text":"Administrator","page_number":58,"box":{"x":795,"y":337,"width":89,"height":8}},{"id":"d2dcb6fa-5acf-431b-8c03-101c74706be7","block_type":"box","text":"Fiscal Year Ended April 30, 2026 N/A N/A","page_number":58,"box":{"x":117,"y":356,"width":762,"height":12}},{"id":"ac8b1685-6828-4f6c-8b17-678219696d38","block_type":"box","text":"Fiscal Period November 16, 2024 to April 30, 2025 N/A N/A","page_number":58,"box":{"x":117,"y":371,"width":762,"height":12}},{"id":"3ff41977-5aa3-4057-9a83-ca53d4410592","block_type":"box","text":"Fiscal Period June 1, 2024 to November 15, 2024 $235,041 $ 66,216","page_number":58,"box":{"x":117,"y":386,"width":762,"height":12}},{"id":"d5208d49-dbb2-494f-9960-bc6889acbac7","block_type":"box","text":"Fiscal Year Ended May 31, 2024 $442,819 $143,411","page_number":58,"box":{"x":117,"y":402,"width":762,"height":12}},{"id":"bf797633-479b-4409-8f8a-2637703955fc","block_type":"box","text":"In addition, pursuant to a shareholders’ administrative services agreement, BAL provided certain","page_number":58,"box":{"x":117,"y":433,"width":720,"height":12}},{"id":"465f8bd4-c025-45b0-b3ed-644868647b4b","block_type":"box","text":"shareholder liaison services in connection with the Predecessor Trust’s investor service center. The","page_number":58,"box":{"x":116,"y":449,"width":744,"height":9}},{"id":"697d3fdb-a29b-4beb-8f2c-91562f54b504","block_type":"box","text":"Predecessor Trust, on behalf of the Predecessor Fund, reimbursed BAL for its costs in maintaining the","page_number":58,"box":{"x":117,"y":464,"width":765,"height":12}},{"id":"66b6228d-7dea-4c0c-8faf-1e96f7141499","block_type":"box","text":"service center, which costs included, among other things, employee salaries, leasehold expenses, and","page_number":58,"box":{"x":116,"y":480,"width":767,"height":12}},{"id":"b9d753e2-efb2-42f3-8f8c-3f6c7faf8c0c","block_type":"box","text":"other out-of-pocket expenses.","page_number":58,"box":{"x":116,"y":495,"width":227,"height":12}},{"id":"f3a9b9dd-9339-45a5-9359-1ae52044bb27","block_type":"box","text":"For the periods shown, the Predecessor Trust on behalf of the Predecessor Fund reimbursed BAL for","page_number":58,"box":{"x":117,"y":526,"width":758,"height":12}},{"id":"b013b285-2db4-47b5-ad1c-034a5b8c174f","block_type":"box","text":"shareholder liaison services pursuant to such agreement in the amounts set forth below.","page_number":58,"box":{"x":116,"y":542,"width":660,"height":12}},{"id":"1a3e0fa1-f4eb-47f1-bdb4-ddd5f6fe9a50","block_type":"box","text":"Fees Paid to","page_number":58,"box":{"x":707,"y":570,"width":77,"height":7}},{"id":"582edc7c-3649-474b-9da1-67d038e7346d","block_type":"box","text":"BAL","page_number":58,"box":{"x":732,"y":580,"width":27,"height":7}},{"id":"25aa7514-bb7a-4a73-9f0e-e8cc3c842c27","block_type":"box","text":"Fees Waived","page_number":58,"box":{"x":803,"y":570,"width":80,"height":7}},{"id":"a0530565-6a77-4053-8a07-485c65b74960","block_type":"box","text":"by BAL","page_number":58,"box":{"x":820,"y":580,"width":46,"height":10}},{"id":"5bb2cda6-3f1b-41c7-ac6d-1c36b88c0a77","block_type":"box","text":"Fiscal Year Ended April 30, 2026 N/A N/A","page_number":58,"box":{"x":117,"y":599,"width":761,"height":12}},{"id":"0005a2b8-eeda-496b-8e8a-bf82f06c565a","block_type":"box","text":"Fiscal Period November 16, 2024 to April 30, 2025 N/A N/A","page_number":58,"box":{"x":117,"y":614,"width":761,"height":12}},{"id":"529203d2-33f6-4af5-a06b-021023a57c82","block_type":"box","text":"Fiscal Period June 1, 2024 to November 15, 2024 $ 6,533 $ 2,518","page_number":58,"box":{"x":117,"y":629,"width":761,"height":12}},{"id":"23a684ed-ac8d-4293-a212-f6f1d4a38d59","block_type":"box","text":"Fiscal Year Ended May 31, 2024 $22,428 $22,428","page_number":58,"box":{"x":117,"y":644,"width":761,"height":13}},{"id":"790dd75a-6731-467e-9a21-6d198a92c020","block_type":"box","text":"In addition, BNY Mellon Investment Servicing (US) Inc. (“BNY MIS”) served as the accounting services","page_number":58,"box":{"x":117,"y":676,"width":761,"height":12}},{"id":"707f25b9-ed79-4997-9f2d-66f606493955","block_type":"box","text":"provider for the Predecessor Fund. BNY MIS recorded investment, capital share and income and","page_number":58,"box":{"x":117,"y":692,"width":718,"height":12}},{"id":"8b0d19f1-e716-49c6-9764-96d528ff3b18","block_type":"box","text":"expense activities; verified and transmitted trade tickets; maintained accounting ledgers for investment","page_number":58,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"328fa436-33aa-4f93-813f-96cc6c466e12","block_type":"box","text":"securities; maintained tax lots; reconciled cash with the Predecessor Fund’s custodian; reported cash","page_number":58,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"3af7904f-1790-4c70-b177-774f68f136b7","block_type":"box","text":"balances to BAL; prepared certain financial statements; calculated expenses, gains, losses and","page_number":58,"box":{"x":117,"y":738,"width":707,"height":12}},{"id":"eb5bc776-d60a-4c24-9b00-e6551c9de79c","block_type":"box","text":"income; controlled disbursements; worked with independent pricing sources; and computed and","page_number":58,"box":{"x":117,"y":754,"width":710,"height":12}},{"id":"751f37a4-8867-4afa-9993-f9cf9aabb8d8","block_type":"box","text":"reported net asset value. In connection with its accounting services, BNY MIS also provided certain","page_number":58,"box":{"x":117,"y":769,"width":735,"height":12}},{"id":"70cb2bfe-384c-493d-b6d4-3574dd7cdf62","block_type":"box","text":"administration services.","page_number":58,"box":{"x":116,"y":785,"width":174,"height":9}},{"id":"84a5ac5c-28ef-4f67-8fd4-752facf30b9b","block_type":"box","text":"49","page_number":58,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"75fdc133-251e-442e-9435-cb229de4bdb9","block_type":"box","text":"NM1026U-6004408-58/267","page_number":58,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"83dd1fc6-0555-4288-be63-22a5999b7179","block_type":"box","text":"The table below shows the amounts paid by the Predecessor Fund to BNY MIS for accounting services","page_number":59,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"bc919dc0-ebae-41cb-a631-3346df4ae0f9","block_type":"box","text":"for the periods shown:","page_number":59,"box":{"x":116,"y":102,"width":170,"height":12}},{"id":"cf645bc8-f7fa-46c3-ac9e-100b4c71b608","block_type":"box","text":"Fees Paid to","page_number":59,"box":{"x":805,"y":131,"width":78,"height":8}},{"id":"3210bab1-0535-46b8-a001-30d93aaeeb68","block_type":"box","text":"BNY MIS","page_number":59,"box":{"x":817,"y":141,"width":54,"height":8}},{"id":"3ca8ffb3-2bea-4475-acd7-e425952411eb","block_type":"box","text":"Fiscal Year Ended April 30, 2026 N/A","page_number":59,"box":{"x":117,"y":160,"width":762,"height":12}},{"id":"901dbedf-0b4b-429d-9d7e-12e9ece878ba","block_type":"box","text":"Fiscal Period November 16, 2024 to April 30, 2025 N/A","page_number":59,"box":{"x":117,"y":176,"width":762,"height":12}},{"id":"2c7f8871-8909-4c18-a84b-2ec9a1318b91","block_type":"box","text":"Fiscal Period June 1, 2024 to November 15, 2024 $37,637","page_number":59,"box":{"x":117,"y":190,"width":762,"height":12}},{"id":"f76c8e8c-8815-45dd-9c13-2365104098e5","block_type":"box","text":"Fiscal Year Ended May 31, 2024 $75,611","page_number":59,"box":{"x":117,"y":206,"width":762,"height":13}},{"id":"88063e45-1464-475f-aa35-d99eba331040","block_type":"box","text":"Credit Agreement.","page_number":59,"box":{"x":116,"y":239,"width":144,"height":12}},{"id":"9bf75938-7ecd-4fea-8b88-7dcd784d6afd","block_type":"box","text":"The Trust, on behalf of the Fund, along with certain other funds managed by BFA","page_number":59,"box":{"x":262,"y":239,"width":614,"height":12}},{"id":"8cd79a90-8d7f-49e4-9af4-eeb3821c60db","block_type":"box","text":"and its affiliates (“Participating Funds”), is a party to a 364-day, $2.4 billion credit agreement with a","page_number":59,"box":{"x":116,"y":253,"width":737,"height":13}},{"id":"936fc5a1-d32c-4c80-8ecd-1525d4578c01","block_type":"box","text":"group of lenders, which facility terminates on April 8, 2027 unless otherwise extended or renewed (the","page_number":59,"box":{"x":116,"y":270,"width":762,"height":12}},{"id":"e6950056-6813-486a-8e71-8db247cfce99","block_type":"box","text":"“Credit Agreement”). Excluding commitments designated for certain Participating Funds, the","page_number":59,"box":{"x":116,"y":285,"width":688,"height":12}},{"id":"c0bb4793-3373-430f-9bcf-0c445f3f20fa","block_type":"box","text":"Participating Funds, including the Fund, can borrow up to an aggregate commitment amount of","page_number":59,"box":{"x":117,"y":301,"width":709,"height":12}},{"id":"1d233af6-531e-4f31-866c-1cabedb51bf4","block_type":"box","text":"$1.75 billion at any time outstanding, subject to asset coverage and other limitations as specified in the","page_number":59,"box":{"x":116,"y":315,"width":768,"height":13}},{"id":"4fe372c9-26a5-4e39-b9a6-e666cc8ccb13","block_type":"box","text":"Credit Agreement. The Fund may borrow under the Credit Agreement to meet shareholder","page_number":59,"box":{"x":117,"y":332,"width":676,"height":12}},{"id":"5c0182ad-8e29-451a-820d-54a8955f03b2","block_type":"box","text":"redemptions and for other lawful purposes. However, the Fund may not borrow under the Credit","page_number":59,"box":{"x":117,"y":347,"width":716,"height":12}},{"id":"00f1567a-ab37-426c-9ebb-48c4d27e6489","block_type":"box","text":"Agreement for leverage. The Fund may borrow up to the maximum amount allowable under its current","page_number":59,"box":{"x":116,"y":363,"width":764,"height":12}},{"id":"3ec1b220-8bdd-4795-96d3-110aa7e70912","block_type":"box","text":"Prospectus and SAI, subject to various other legal, regulatory or contractual limits. Borrowing results in","page_number":59,"box":{"x":117,"y":378,"width":767,"height":12}},{"id":"13038fc1-e51b-41d5-975e-4b31e94566a5","block_type":"box","text":"interest expense and other fees and expenses for the Fund which may impact the Fund’s net","page_number":59,"box":{"x":117,"y":394,"width":694,"height":12}},{"id":"5bba1c6f-a8cd-4c3f-9cb0-f3a176794f01","block_type":"box","text":"expenses. The costs of borrowing may reduce the Fund’s return. The Fund is charged its pro rata","page_number":59,"box":{"x":116,"y":409,"width":729,"height":12}},{"id":"b038894b-0383-4887-8107-cead00ca1cfe","block_type":"box","text":"share of upfront fees and commitment fees on the aggregate commitment amount based on its net","page_number":59,"box":{"x":116,"y":425,"width":738,"height":12}},{"id":"78a4336c-e85b-49c3-85b9-003d300aa793","block_type":"box","text":"assets. If the Fund borrows pursuant to the Credit Agreement, the Fund will be charged interest at a","page_number":59,"box":{"x":116,"y":440,"width":747,"height":12}},{"id":"3e908ba4-917f-4916-8beb-114fe0ced567","block_type":"box","text":"variable rate.","page_number":59,"box":{"x":116,"y":456,"width":102,"height":9}},{"id":"656baf14-348c-4439-9939-d0c762d39b20","block_type":"box","text":"Distributor.","page_number":59,"box":{"x":117,"y":488,"width":88,"height":9}},{"id":"76df71d1-dee6-4dc8-b4f4-fbfe437f1068","block_type":"box","text":"The Distributor’s principal address is 50 Hudson Yards, New York, NY 10001. Shares are","page_number":59,"box":{"x":206,"y":487,"width":674,"height":12}},{"id":"545e5fa7-4034-4c0c-9a38-915a0d29bae1","block_type":"box","text":"continuously offered for sale by the Fund through the Distributor or its agent only in Creation Units, as","page_number":59,"box":{"x":116,"y":503,"width":760,"height":12}},{"id":"08cde931-2884-4b12-b321-3fc5998ff625","block_type":"box","text":"described in the Prospectus and below in the","page_number":59,"box":{"x":116,"y":519,"width":334,"height":11}},{"id":"465ed042-2584-4005-9c37-e16aae367838","block_type":"box","text":"Creation","page_number":59,"box":{"x":451,"y":518,"width":67,"height":10}},{"id":"fb4c4996-f19b-427e-a2be-ae5aadda610c","block_type":"box","text":"and Redemption of Creation Units","page_number":59,"box":{"x":524,"y":518,"width":258,"height":12}},{"id":"31df7fb0-1c1f-48ce-9b1e-0f74c4b917e2","block_type":"box","text":"section of","page_number":59,"box":{"x":782,"y":518,"width":76,"height":10}},{"id":"388359e2-c49f-4d30-8070-b282a6856767","block_type":"box","text":"this SAI. Fund shares in amounts less than Creation Units are generally not distributed by the","page_number":59,"box":{"x":116,"y":534,"width":699,"height":12}},{"id":"df46c3c8-6e3a-4f56-bd9e-dbe82273e53e","block_type":"box","text":"Distributor or its agent. The Distributor or its agent will arrange for the delivery of the Prospectus and,","page_number":59,"box":{"x":117,"y":549,"width":755,"height":13}},{"id":"c7bfb51a-97a5-4110-9ab5-deb87c498e05","block_type":"box","text":"upon request, this SAI to persons purchasing Creation Units and will maintain records of both orders","page_number":59,"box":{"x":117,"y":565,"width":749,"height":12}},{"id":"f231fc12-20b5-40a1-95c9-547518ee1da4","block_type":"box","text":"placed with it or its agents and confirmations of acceptance furnished by it or its agents. The Distributor","page_number":59,"box":{"x":117,"y":580,"width":770,"height":13}},{"id":"515eb704-62d9-44f6-b5da-e7024e09295d","block_type":"box","text":"is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “1934 Act”),","page_number":59,"box":{"x":117,"y":596,"width":766,"height":12}},{"id":"3a1ba31d-124a-4405-93a2-55732554b234","block_type":"box","text":"and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is also","page_number":59,"box":{"x":116,"y":611,"width":740,"height":13}},{"id":"a79d2bf1-e086-47cd-9998-b79a28b6eb8c","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":59,"box":{"x":117,"y":627,"width":758,"height":12}},{"id":"fbb81387-8dcc-4f0d-85fa-ab92422d51f0","block_type":"box","text":"the District of Columbia.","page_number":59,"box":{"x":116,"y":642,"width":183,"height":10}},{"id":"de8619e5-3a15-49fb-92cd-bfba528f3860","block_type":"box","text":"The Distribution Agreement for the Fund provides that it may be terminated at any time, without the","page_number":59,"box":{"x":116,"y":674,"width":736,"height":12}},{"id":"da0c9ad5-223a-4143-80a0-2e5358b65b34","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":59,"box":{"x":117,"y":690,"width":755,"height":12}},{"id":"d0d9c5f7-43df-4765-a932-45f6bcfb4684","block_type":"box","text":"of a majority of the Independent Trustees, or (ii) the vote of a majority of the outstanding voting","page_number":59,"box":{"x":116,"y":705,"width":703,"height":12}},{"id":"aa46eb8b-0212-46c9-a983-3b1288c33fae","block_type":"box","text":"securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate","page_number":59,"box":{"x":116,"y":721,"width":688,"height":12}},{"id":"83aa934d-0952-4b59-a0de-9cf790918b02","block_type":"box","text":"automatically in the event of its assignment (as defined in the 1940 Act).","page_number":59,"box":{"x":116,"y":736,"width":534,"height":12}},{"id":"dd047395-e291-4619-a775-da73489783f3","block_type":"box","text":"The Distributor may also enter into agreements with securities dealers (“Soliciting Dealers”) who will","page_number":59,"box":{"x":116,"y":768,"width":740,"height":12}},{"id":"cb1e2d3d-b189-41fd-b30f-6839d389b0ac","block_type":"box","text":"solicit purchases of Creation Units of Fund shares. Such Soliciting Dealers may also be Authorized","page_number":59,"box":{"x":116,"y":784,"width":733,"height":12}},{"id":"f6dcc382-b533-4130-84ce-620e4825d25f","block_type":"box","text":"Participants (as described below), Depository Trust Company (“DTC”) participants and/or investor","page_number":59,"box":{"x":117,"y":799,"width":725,"height":12}},{"id":"3906c68a-234b-42f8-a8e1-4bea8682d013","block_type":"box","text":"services organizations.","page_number":59,"box":{"x":116,"y":815,"width":169,"height":12}},{"id":"32e27bb6-548f-4cee-9867-b3573fc36852","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":59,"box":{"x":117,"y":847,"width":735,"height":12}},{"id":"d734df95-0b9c-4f8e-8f90-6b6d260e1bf8","block_type":"box","text":"relating to distribution, including payments out of its own resources to the Distributor, or to otherwise","page_number":59,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"18a05b9d-d84e-41cb-9ceb-0fcbca02d295","block_type":"box","text":"promote the sale of shares.","page_number":59,"box":{"x":117,"y":878,"width":207,"height":12}},{"id":"ca6f8cb5-b2a7-4253-8b78-f66892d0fd1f","block_type":"box","text":"50","page_number":59,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"785b973e-e8f8-49fb-afdc-2e12a9bf280f","block_type":"box","text":"NM1026U-6004408-59/267","page_number":59,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"50a6dfa8-49a5-4602-a915-114efefa3596","block_type":"box","text":"Securities Lending.","page_number":60,"box":{"x":116,"y":87,"width":151,"height":12}},{"id":"4c63895d-2e00-45b3-871f-da9f7b8fb610","block_type":"box","text":"To the extent that the Fund engages in se","page_number":60,"box":{"x":268,"y":87,"width":309,"height":12}},{"id":"7313562f-6f4a-4086-a3e1-c8c2841a89d7","block_type":"box","text":"curities lending, the Fund conducts its","page_number":60,"box":{"x":578,"y":87,"width":279,"height":12}},{"id":"2578aa90-113a-41f8-b670-1dfd25f6ccdf","block_type":"box","text":"securities lending pursuant to an exemptive order","page_number":60,"box":{"x":116,"y":103,"width":360,"height":12}},{"id":"ccf5d358-fb83-4788-a292-74b570752216","block_type":"box","text":"r from the Commission permitting it to lend portfolio","page_number":60,"box":{"x":475,"y":102,"width":371,"height":13}},{"id":"2de843e9-5737-4b28-bb85-c4243e442f29","block_type":"box","text":"securities to borrowers affiliated with the Fund and to","page_number":60,"box":{"x":116,"y":118,"width":389,"height":10}},{"id":"ec6974d9-151a-49e8-af6e-06e7abc25c5d","block_type":"box","text":"retain an affiliate of the Fund as securities lending","page_number":60,"box":{"x":506,"y":118,"width":365,"height":12}},{"id":"227435bc-f1dc-47b2-ab27-e2645ca99a82","block_type":"box","text":"agent. To the extent that the Fund engages in securities","page_number":60,"box":{"x":116,"y":134,"width":406,"height":12}},{"id":"378a514a-7d63-4a39-947e-45115f53bf88","block_type":"box","text":"lending, BlackRock Institutional Trust Company,","page_number":60,"box":{"x":523,"y":134,"width":358,"height":12}},{"id":"71c49aed-5519-410c-b6e9-cd2bd528c6dd","block_type":"box","text":"N.A. (previously defined as “BTC”) acts as securiti","page_number":60,"box":{"x":117,"y":149,"width":362,"height":12}},{"id":"f08ac25a-233e-4a2d-ac91-c980144b1155","block_type":"box","text":"es lending agent for the Fund, subject to the overall","page_number":60,"box":{"x":480,"y":149,"width":378,"height":12}},{"id":"ee044ac0-f79a-4b85-98ec-aa6df68cefed","block_type":"box","text":"supervision of BFA, pursuant to a written agreem","page_number":60,"box":{"x":116,"y":165,"width":356,"height":12}},{"id":"27ad062b-3bbe-4172-b1cb-165c6dd2b191","block_type":"box","text":"ent (the “Securities Lending Agency Agreement”). BTC","page_number":60,"box":{"x":473,"y":165,"width":403,"height":12}},{"id":"e7e07508-24a2-4595-b018-549a64268733","block_type":"box","text":"administers the lending program in accor","page_number":60,"box":{"x":116,"y":180,"width":297,"height":12}},{"id":"7ca5243c-64fc-46ea-9187-7ae92bf3efcf","block_type":"box","text":"dance with guidelines approved by the Board.","page_number":60,"box":{"x":414,"y":180,"width":337,"height":12}},{"id":"60a431e0-89ea-4a12-a120-66facdb10f3f","block_type":"box","text":"The Fund retains a portion of the securities lending income and remits the remaining portion to BTC as","page_number":60,"box":{"x":116,"y":211,"width":768,"height":12}},{"id":"76fa1f97-ead4-410c-9b2f-89bbd2891cb1","block_type":"box","text":"compensation for its services as securities lending agent. Securities lending income is generally equal","page_number":60,"box":{"x":116,"y":227,"width":762,"height":12}},{"id":"fe671be5-d62a-4f68-92bb-1b0d094f898b","block_type":"box","text":"to the total of income earned from the reinvestment of cash collateral (and excludes collateral","page_number":60,"box":{"x":116,"y":242,"width":698,"height":12}},{"id":"0328fcd4-585e-4ae4-86ea-c09584be0061","block_type":"box","text":"investment fees as defined below), and any fees or other payments to and from borrowers of","page_number":60,"box":{"x":117,"y":258,"width":692,"height":12}},{"id":"cf086c38-02d3-4a39-90aa-c25d5d86bbdf","block_type":"box","text":"securities. As securities lending agent, BTC bears all operational costs directly related to securities","page_number":60,"box":{"x":116,"y":273,"width":738,"height":12}},{"id":"f1f4e850-9828-4731-8af0-66890dd76a2b","block_type":"box","text":"lending. The Fund is responsible for fees in connection with the investment of cash collateral received","page_number":60,"box":{"x":117,"y":289,"width":759,"height":12}},{"id":"87b4469c-a06b-4254-a1a4-0ca4cd87da62","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":60,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"57522e61-b89f-4caf-a208-1d00872b3bed","block_type":"box","text":"subject to any waivers (the “collateral investment fees”); however, BTC has agreed to reduce the","page_number":60,"box":{"x":116,"y":320,"width":723,"height":12}},{"id":"a49084f1-96de-46e6-89d4-eb070376bdad","block_type":"box","text":"amount of securities lending income it receives in order to effectively limit the collateral investment fees","page_number":60,"box":{"x":116,"y":335,"width":771,"height":12}},{"id":"9aef2165-0928-4ab6-b7b1-fe63be456791","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":60,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"97806a0f-71e3-4e83-9f7b-441620d51394","block_type":"box","text":"sales load, distribution fee or service fee.","page_number":60,"box":{"x":116,"y":366,"width":309,"height":11}},{"id":"a0d6057f-6365-478f-b4f1-582127eabfb5","block_type":"box","text":"To the extent that the Fund invests cash collateral in a non-government money market fund, the Fund","page_number":60,"box":{"x":116,"y":397,"width":760,"height":12}},{"id":"3bf4961a-6dbe-452c-927b-d987480774fe","block_type":"box","text":"may be subject to a discretionary liquidity fee of up to 2% on all redemptions. Discretionary liquidity","page_number":60,"box":{"x":117,"y":413,"width":739,"height":12}},{"id":"f8b36cd3-a36a-4186-862b-88188021bbf3","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":60,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"dad6e18b-da1e-4b7b-9114-f97a81d2bc45","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":60,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"3aeb1f96-63ba-4d24-9577-fda55ccce649","block_type":"box","text":"the best interest of the money market fund. Additionally, the Fund will be subject to a mandatory","page_number":60,"box":{"x":116,"y":459,"width":718,"height":12}},{"id":"be3a12c2-ff40-454b-95a4-7f2e23035929","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":60,"box":{"x":117,"y":475,"width":760,"height":12}},{"id":"9436f8dd-1f17-41bf-b2c8-1db6053384b2","block_type":"box","text":"market fund’s net assets, unless the liquidity costs are de minimis (i.e., less than one basis point","page_number":60,"box":{"x":117,"y":490,"width":718,"height":12}},{"id":"7fec5340-1da0-4f6b-b5cd-9056c96ef08a","block_type":"box","text":"(0.01%)). The money market fund will determine the size of the mandatory liquidity fee by making a","page_number":60,"box":{"x":117,"y":506,"width":741,"height":12}},{"id":"237fc9e7-b63c-4573-bc22-b50ed1633367","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":60,"box":{"x":116,"y":521,"width":724,"height":12}},{"id":"71d76583-1c8c-4d2d-99a5-a8a6d59d6b03","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":60,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"aacc8f3a-0853-4f49-bff2-d820fd79be5f","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":60,"box":{"x":117,"y":552,"width":754,"height":12}},{"id":"fce86ccf-f850-41ce-8473-67f3746d4dfb","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":60,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"e43711a2-a4d9-48b9-aeb7-bd8e7b3b22b0","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":60,"box":{"x":116,"y":583,"width":759,"height":12}},{"id":"4427a9d6-e786-40ff-bde2-b9b2f2b886db","block_type":"box","text":"such discretionary or mandatory liquidity fee would reduce the Fund’s returns on securities lending.","page_number":60,"box":{"x":116,"y":599,"width":741,"height":12}},{"id":"ee2bcb32-65e4-47d0-ba8f-5245ce70c4f3","block_type":"box","text":"Under the securities lending program, the Fund is categorized into one of several specific asset","page_number":60,"box":{"x":117,"y":630,"width":712,"height":12}},{"id":"1a84a1a3-948c-482d-858f-b82cfc389ba7","block_type":"box","text":"classes. The determination of the Fund’s asset class category (fixed-income, domestic equity,","page_number":60,"box":{"x":116,"y":645,"width":701,"height":12}},{"id":"04a4bfc1-c08f-464a-9e8b-7b4307b38c3b","block_type":"box","text":"international equity or fund of funds), each of which may be subject to a different fee arrangement, is","page_number":60,"box":{"x":117,"y":661,"width":745,"height":12}},{"id":"5e0ab58e-6b14-4ebe-97d4-f1d6e4b63a11","block_type":"box","text":"based on a methodology agreed to by the Trust and BTC.","page_number":60,"box":{"x":117,"y":676,"width":427,"height":12}},{"id":"fac5db44-43c1-4359-b7d1-e9b80538380f","block_type":"box","text":"Pursuant to the securities lending agreement effective January 1, 2026: (i) the Fund retains 82% of","page_number":60,"box":{"x":117,"y":707,"width":734,"height":12}},{"id":"de99ebdd-21c1-4595-9a1b-d4e3df5b2eaa","block_type":"box","text":"securities lending income (which excludes collateral investment fees); and (ii) this amount can never","page_number":60,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"02b95fbe-acce-4663-81d6-a92eeaf5046f","block_type":"box","text":"be less than 70% of the sum of securities lending income plus collateral investment fees.","page_number":60,"box":{"x":117,"y":738,"width":657,"height":12}},{"id":"4a53f0ae-5158-46bd-b1d8-a1c09dcf941a","block_type":"box","text":"In addition, commencing the business day following the date that the aggregate securities lending","page_number":60,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"03724d3b-47d5-4d0d-84df-6c3471ae2565","block_type":"box","text":"income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds specified","page_number":60,"box":{"x":117,"y":785,"width":711,"height":12}},{"id":"ab67d4d8-55ae-4d9c-a30a-26d8011df28a","block_type":"box","text":"thresholds, the Fund, pursuant to the current securities lending agreement, will receive for the","page_number":60,"box":{"x":116,"y":800,"width":695,"height":12}},{"id":"b326fc7f-ba27-4086-8d0f-200e9b07f0f3","block_type":"box","text":"remainder of that calendar year securities lending income as follows: (i) 85% of securities lending","page_number":60,"box":{"x":117,"y":816,"width":720,"height":12}},{"id":"16ab3ed1-a4ba-492b-9341-2bf5b80eddf3","block_type":"box","text":"income (which excludes collateral investment fees); and (ii) this amount can never be less than 70% of","page_number":60,"box":{"x":117,"y":831,"width":766,"height":12}},{"id":"9b33ff9b-38b0-4f90-ad04-e866f8115cde","block_type":"box","text":"the sum of securities lending income plus collateral investment fees.","page_number":60,"box":{"x":116,"y":847,"width":511,"height":12}},{"id":"429cbe88-c3b1-45ff-b4c8-84137b3b2ad6","block_type":"box","text":"Prior to January 1, 2026, the Fund was subject to the same securities lending fee arrangement.","page_number":60,"box":{"x":117,"y":878,"width":712,"height":12}},{"id":"126a6043-55dd-4293-b583-d26a8cb60d30","block_type":"box","text":"51","page_number":60,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"78ab2b9d-942b-41db-b080-e4ae1c31ad03","block_type":"box","text":"NM1026U-6004408-60/267","page_number":60,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"cf67935a-50df-4b9b-89d1-d449de3c6556","block_type":"box","text":"The following table shows the dollar amounts of income and fees/compensation related to the","page_number":61,"box":{"x":116,"y":87,"width":699,"height":12}},{"id":"ae38ada6-c20f-4ac1-86bb-36698995e1cd","block_type":"box","text":"securities lending activities of the Fund during its most recent fiscal year ended April 30, 2026.","page_number":61,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"5d7e9612-66e9-479e-a318-5b90d0b79ce4","block_type":"box","text":"iShares","page_number":61,"box":{"x":820,"y":130,"width":47,"height":8}},{"id":"4cea1fe2-e4e2-48d9-a3ec-ac2a4a05d8f0","block_type":"box","text":"International","page_number":61,"box":{"x":804,"y":141,"width":78,"height":7}},{"id":"63036a20-485a-407a-b078-de7e3371bc20","block_type":"box","text":"Dividend","page_number":61,"box":{"x":815,"y":151,"width":56,"height":8}},{"id":"83127ec3-c2a5-4b59-b381-b1d37b006454","block_type":"box","text":"Active ETF","page_number":61,"box":{"x":808,"y":161,"width":69,"height":8}},{"id":"137417e4-0748-453a-8ff5-b25aaacde0c2","block_type":"box","text":"Gross income from securities lending activities $119,642","page_number":61,"box":{"x":116,"y":179,"width":767,"height":13}},{"id":"42d836ef-7c18-4471-919c-f02625939d6d","block_type":"box","text":"Fees and/or compensation for securities lending activities and related services","page_number":61,"box":{"x":116,"y":201,"width":582,"height":12}},{"id":"e94e1393-330c-4633-854a-54703a8881a6","block_type":"box","text":"s","page_number":61,"box":{"x":698,"y":210,"width":5,"height":0}},{"id":"e00e58e3-ff99-480f-a755-b2fb1ebe6e4f","block_type":"box","text":"Securities lending income paid to BTC for services as securities lending agent $ 1,545","page_number":61,"box":{"x":150,"y":215,"width":733,"height":13}},{"id":"0a28fa12-5f5e-4bea-ac5d-718689951bce","block_type":"box","text":"Cash collateral management expenses not included in securities lending income paid","page_number":61,"box":{"x":150,"y":232,"width":638,"height":12}},{"id":"731c5ae1-5bd9-402e-955a-4b9704158b76","block_type":"box","text":"to BTC","page_number":61,"box":{"x":166,"y":247,"width":57,"height":10}},{"id":"f5e6ec3f-4cc9-43cb-8034-05a535b26f27","block_type":"box","text":"$ 1,122","page_number":61,"box":{"x":809,"y":247,"width":74,"height":11}},{"id":"e96fb9b6-5238-4c7b-b89d-63060b3f3305","block_type":"box","text":"Administrative fees not included in securities lending income paid to BTC $ 0","page_number":61,"box":{"x":149,"y":262,"width":734,"height":13}},{"id":"df8018f0-bd60-462f-9cd7-280bd32caea4","block_type":"box","text":"Indemnification fees not included in securities lending income paid to BTC $ 0","page_number":61,"box":{"x":151,"y":278,"width":732,"height":12}},{"id":"d8a8939a-0dd7-459c-902a-85cf4f2d1e93","block_type":"box","text":"Rebates (paid to borrowers) $109,272","page_number":61,"box":{"x":151,"y":293,"width":732,"height":13}},{"id":"41a4f96c-b726-4bff-9dcc-80b407af8fed","block_type":"box","text":"Other fees not included in securities lending income paid to BTC $ 0","page_number":61,"box":{"x":150,"y":309,"width":733,"height":12}},{"id":"50bcf1e6-2521-485b-a3d7-8d6638aa7f64","block_type":"box","text":"Aggregate fees/compensation for securities lending activities $111,939","page_number":61,"box":{"x":116,"y":324,"width":767,"height":13}},{"id":"d76d0d00-dcb2-450f-9252-808a29d67771","block_type":"box","text":"Net income from securities lending activities $ 7,703","page_number":61,"box":{"x":117,"y":345,"width":766,"height":12}},{"id":"ce201b90-f120-4677-84de-92bafb9061a1","block_type":"box","text":"Payments by BFA and its Affiliates.","page_number":61,"box":{"x":117,"y":382,"width":280,"height":12}},{"id":"b3f03bb2-0333-4f00-bd3a-c2d02e4162a2","block_type":"box","text":"BFA and/or its affiliates (“BFA Entities”) pay certain broker","page_number":61,"box":{"x":398,"y":382,"width":442,"height":12}},{"id":"6998f563-c70f-4826-9f15-ce597a52fb95","block_type":"box","text":"dealers, registered investment advisers, banks and other financial intermediaries (“Intermediaries”) for","page_number":61,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"37bb85bd-ca27-4bd6-8a8b-918100d3c7b0","block_type":"box","text":"certain activities related to the Fund and other funds or products sponsored and/or advised by BFA","page_number":61,"box":{"x":116,"y":413,"width":739,"height":12}},{"id":"3fe066d0-8f2c-4307-8fed-ccc9638802e9","block_type":"box","text":"Entities (collectively for purposes of this section, the “Products”). BFA Entities make these payments","page_number":61,"box":{"x":117,"y":428,"width":748,"height":12}},{"id":"ce0fd3a8-459b-4e7f-9b02-613fed157323","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":61,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"a1902e06-11e3-43d7-b802-ea36862ceceb","block_type":"box","text":"comes directly or indirectly in part from fees paid by the Fund or other Products (including, if","page_number":61,"box":{"x":116,"y":459,"width":688,"height":12}},{"id":"98a7509b-89f4-4e4a-8681-0ec4a66c9cac","block_type":"box","text":"applicable, any underlying Products held by the Fund), these payments do not increase the price paid","page_number":61,"box":{"x":116,"y":475,"width":759,"height":12}},{"id":"ffc316b6-46d8-4448-98e1-25a6b286bb03","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":61,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"a2144752-a237-4531-8c74-9252a353505f","block_type":"box","text":"Entities make payments for Intermediaries’ participation in activities that are designed to make","page_number":61,"box":{"x":117,"y":506,"width":703,"height":12}},{"id":"9f4573f0-100e-4b07-bf16-cfba95bf84b5","block_type":"box","text":"registered representatives, other professionals and individual investors more knowledgeable about","page_number":61,"box":{"x":117,"y":521,"width":736,"height":12}},{"id":"3c18be96-ae83-4299-9ea5-163cc1533d20","block_type":"box","text":"exchange-traded products, including the Fund and other Products, or for other activities, such as","page_number":61,"box":{"x":116,"y":537,"width":722,"height":12}},{"id":"754628a1-a91b-42b3-b80b-2d0f0cb164b2","block_type":"box","text":"participation in marketing activities and presentations, educational training programs, conferences, the","page_number":61,"box":{"x":117,"y":552,"width":763,"height":12}},{"id":"8d7c77a3-54f3-4eb8-8807-4a5f732441d7","block_type":"box","text":"development of technology platforms and reporting systems (“Education Costs”). BFA Entities also","page_number":61,"box":{"x":116,"y":568,"width":737,"height":12}},{"id":"244a0464-a316-41f3-97f4-2b77491ec8e5","block_type":"box","text":"make payments to Intermediaries for certain printing, publishing and mailing costs or materials relating","page_number":61,"box":{"x":117,"y":583,"width":764,"height":12}},{"id":"7d4d5dfc-2a10-4e4b-b93a-73e822b6849a","block_type":"box","text":"to the Fund or other Products (“Publishing Costs”). In addition, BFA Entities make payments to","page_number":61,"box":{"x":116,"y":599,"width":707,"height":12}},{"id":"dde9f797-bc11-47ba-a3e3-2f2606432eaa","block_type":"box","text":"Intermediaries that make shares of the Fund or other Products available to their clients, in some cases","page_number":61,"box":{"x":117,"y":614,"width":764,"height":11}},{"id":"f76c7d8e-edd2-4ad7-9755-e648474e8956","block_type":"box","text":"at a waived or reduced commission rate or ticket charge, develop new products that feature iShares,","page_number":61,"box":{"x":116,"y":630,"width":751,"height":12}},{"id":"eaf41089-3765-4309-a98e-2aa06ca71491","block_type":"box","text":"create educational content about the Fund or other Products that is featured on an Intermediary’s","page_number":61,"box":{"x":116,"y":645,"width":727,"height":12}},{"id":"0122bd05-6222-42b5-937f-92dce12b3d3b","block_type":"box","text":"platform, or otherwise promote the Fund or other Products. BFA Entities may also reimburse expenses","page_number":61,"box":{"x":117,"y":661,"width":762,"height":12}},{"id":"af2ab5ca-1020-45da-ad38-87a693b18645","block_type":"box","text":"or make payments from their own assets to Intermediaries or other persons in consideration of","page_number":61,"box":{"x":116,"y":676,"width":702,"height":12}},{"id":"845b97da-cf45-46ae-895c-f76430e1935f","block_type":"box","text":"services or other activities that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":61,"box":{"x":116,"y":692,"width":764,"height":12}},{"id":"28a7ef32-bf16-4f26-8154-9a1d18c6bb40","block_type":"box","text":"facilitate investment in the Fund or other Products. Payments of the type described above are","page_number":61,"box":{"x":116,"y":707,"width":695,"height":12}},{"id":"f732cd09-428d-41a1-8a8d-f7010eb943df","block_type":"box","text":"sometimes referred to as revenue-sharing payments.","page_number":61,"box":{"x":116,"y":723,"width":393,"height":12}},{"id":"0a6ed308-e04d-4726-95e9-ca6cd1240fef","block_type":"box","text":"Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries","page_number":61,"box":{"x":117,"y":754,"width":749,"height":12}},{"id":"7da327f2-166c-483c-a7dc-54e36154822d","block_type":"box","text":"pay to your salesperson or other investment professional may also be significant for your salesperson","page_number":61,"box":{"x":117,"y":769,"width":753,"height":12}},{"id":"ea0f3b80-de36-4b4d-801f-16e624bbb2bb","block_type":"box","text":"or other investment professional. Because an Intermediary may make decisions about which","page_number":61,"box":{"x":116,"y":785,"width":686,"height":12}},{"id":"2c08c61c-87e5-4f4d-b30d-f9a1e1654ac9","block_type":"box","text":"investment options it will recommend or make available to its clients, what services to provide for","page_number":61,"box":{"x":117,"y":800,"width":717,"height":12}},{"id":"92a2980f-a680-42f1-81cd-d8264e9cbfee","block_type":"box","text":"various products or what marketing content to make available to its clients based on payments it","page_number":61,"box":{"x":116,"y":816,"width":714,"height":12}},{"id":"2e13a606-6759-4e24-b455-a22332b1ca1e","block_type":"box","text":"receives or is eligible to receive, such payments may create conflicts of interest between the","page_number":61,"box":{"x":117,"y":831,"width":688,"height":12}},{"id":"97590da2-063b-4203-9a77-72cfb82e8be5","block_type":"box","text":"Intermediary and its clients. These financial incentives may cause the Intermediary to recommend the","page_number":61,"box":{"x":117,"y":847,"width":759,"height":12}},{"id":"7e0a778d-36cc-484a-9cc7-edb93d4af143","block_type":"box","text":"Fund or other Products or otherwise promote the Fund or other Products over other investments. The","page_number":61,"box":{"x":117,"y":862,"width":757,"height":12}},{"id":"7581f078-2872-4080-b558-b19bd07062e2","block_type":"box","text":"52","page_number":61,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"fbd254e9-8241-4ab2-b9bc-4e182239223d","block_type":"box","text":"NM1026U-6004408-61/267","page_number":61,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0ecf5543-8f87-4b08-a9ea-403fe71b1467","block_type":"box","text":"same conflicts of interest and financial incentives exist with respect to your salesperson or other","page_number":62,"box":{"x":116,"y":87,"width":716,"height":12}},{"id":"3202963c-41fb-4a56-a1c3-96afd15ea2f5","block_type":"box","text":"investment professional if he or she receives similar payments from his or her Intermediary firm.","page_number":62,"box":{"x":117,"y":102,"width":716,"height":13}},{"id":"a9d5537c-3727-414c-941a-bee7b8ffbe88","block_type":"box","text":"In addition to the payments described above, BFA Entities have developed proprietary tools,","page_number":62,"box":{"x":117,"y":134,"width":689,"height":12}},{"id":"f974bd06-e413-473b-b089-a13128d0a5da","block_type":"box","text":"calculators and related interactive or digital content that is made available through the","page_number":62,"box":{"x":116,"y":149,"width":641,"height":12}},{"id":"76296810-aefb-4df3-8de8-7ae2a2b983b7","block_type":"box","text":"www.blackrock.com website at no additional cost to Intermediaries. BlackRock may configure these","page_number":62,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"ddc3a223-272e-4d6b-afe4-a1001c2c7711","block_type":"box","text":"tools and calculators and localize the content for Intermediaries as part of its customary digital","page_number":62,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"f6370213-4731-4527-bb32-4d740dbf6885","block_type":"box","text":"marketing support and promotion of the Fund or other Products.","page_number":62,"box":{"x":117,"y":196,"width":479,"height":12}},{"id":"d4332af5-2d7e-49ae-8613-ef26f072e11b","block_type":"box","text":"As of March 1, 2013, BFA Entities have contractual arrangements to make payments (in addition to","page_number":62,"box":{"x":116,"y":227,"width":742,"height":12}},{"id":"bf2d0f3c-ce93-492e-a0e9-e15799553f0d","block_type":"box","text":"payments for Education Costs or Publishing Costs) to one Intermediary, Fidelity Brokerage Services","page_number":62,"box":{"x":117,"y":242,"width":747,"height":12}},{"id":"ab27d175-b477-4b1d-b3f3-98565b8fedea","block_type":"box","text":"LLC (“FBS”). Effective June 4, 2016, this relationship was expanded to include National Financial","page_number":62,"box":{"x":117,"y":258,"width":725,"height":12}},{"id":"2d9b9dd4-330e-4a0b-9e85-f1dcac6ecf4f","block_type":"box","text":"Services, LLC (“NFS”), an affiliate of FBS. Pursuant to this special, long-term and significant","page_number":62,"box":{"x":116,"y":273,"width":688,"height":12}},{"id":"27e50c4d-33ea-4574-80c3-4de45d6baf38","block_type":"box","text":"arrangement (the “Marketing Program”), FBS, NFS and certain of their affiliates (collectively “Fidelity”)","page_number":62,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"12be77c5-b96a-4ebd-b72a-6b211319b5f3","block_type":"box","text":"have agreed, among other things, to actively promote certain funds and Products to customers,","page_number":62,"box":{"x":117,"y":304,"width":712,"height":12}},{"id":"255168d2-7456-4198-978c-b25b4e1ed5ff","block_type":"box","text":"investment professionals and other intermediaries and in advertising campaigns as the preferred","page_number":62,"box":{"x":117,"y":320,"width":721,"height":12}},{"id":"a041e7ab-fcd3-4e62-8eac-61a56ac19169","block_type":"box","text":"exchange-traded product, to offer certain funds and Products in certain Fidelity platforms and","page_number":62,"box":{"x":116,"y":335,"width":696,"height":12}},{"id":"2deb9a76-298f-4bdb-905c-38811c55c628","block_type":"box","text":"investment programs, in some cases at a waived or reduced commission rate or ticket charge, and to","page_number":62,"box":{"x":117,"y":351,"width":756,"height":12}},{"id":"8ea516c0-9d8f-4388-b082-03dcb52a8f84","block_type":"box","text":"provide marketing data to BFA Entities. BFA Entities have agreed to facilitate the Marketing Program","page_number":62,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"5c7dac5a-7921-4c73-9b83-6a6b65ae389b","block_type":"box","text":"by, among other things, making certain payments to FBS and NFS for marketing and implementing","page_number":62,"box":{"x":117,"y":382,"width":739,"height":12}},{"id":"9c76c3a9-f56f-43bc-8bf8-6e3b057b4f47","block_type":"box","text":"certain brokerage and investment programs. Upon termination of the arrangement, the BFA Entities","page_number":62,"box":{"x":116,"y":397,"width":745,"height":12}},{"id":"f5657f66-decd-4427-aff8-577bbfc53e3e","block_type":"box","text":"will make additional payments to FBS and/or NFS based upon a number of criteria, including the","page_number":62,"box":{"x":116,"y":413,"width":721,"height":12}},{"id":"702504e5-48d2-4aa5-8c1a-d3fea4a904ee","block_type":"box","text":"overall success of the Marketing Program and the level of services provided by FBS and NFS during","page_number":62,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"88db6213-fa81-4178-86d1-c84a871dc297","block_type":"box","text":"the wind-down period.","page_number":62,"box":{"x":116,"y":444,"width":169,"height":12}},{"id":"04198159-91f4-4328-894e-9100c74d7d8d","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and","page_number":62,"box":{"x":117,"y":475,"width":735,"height":12}},{"id":"09a574d9-8c41-47e2-9797-8fd1b0a295d2","block_type":"box","text":"certain other third parties that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":62,"box":{"x":116,"y":490,"width":761,"height":12}},{"id":"a1bb1a63-7998-40a1-83c2-8e9c39857040","block_type":"box","text":"facilitate investment in the Fund or certain Products. Such agreements can include payments by BFA","page_number":62,"box":{"x":116,"y":506,"width":756,"height":12}},{"id":"45fac2c7-3194-4401-a081-1abcf06e7497","block_type":"box","text":"Entities to such Intermediaries and third parties for data collection and provision, technology support,","page_number":62,"box":{"x":117,"y":521,"width":752,"height":12}},{"id":"534e98c1-f64e-478e-a989-2802e527937e","block_type":"box","text":"platform enhancement, or educational content, co-marketing and cross-promotional efforts. In certain","page_number":62,"box":{"x":117,"y":537,"width":754,"height":12}},{"id":"5344f1e4-4f26-4908-a546-05035303ac5d","block_type":"box","text":"cases, such payments to Intermediaries are subject to certain minimum payment levels or tiered","page_number":62,"box":{"x":116,"y":552,"width":718,"height":12}},{"id":"0fd3aab9-df8a-4f45-b401-4b9d3d138052","block_type":"box","text":"payments. With respect to certain funds and Products, payments by the BFA Entities may take the","page_number":62,"box":{"x":117,"y":568,"width":734,"height":12}},{"id":"2ea1832d-f589-47d0-8309-8068fb4a5c2e","block_type":"box","text":"form of, among other things, “due diligence” payments for an Intermediary’s review of such funds and","page_number":62,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"1cb48122-51bc-421c-adfd-304578288cdf","block_type":"box","text":"Products; payment for providing employee training and information relating to such funds and","page_number":62,"box":{"x":117,"y":599,"width":697,"height":12}},{"id":"64c6739b-9506-474b-937b-0d7e603f6025","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered","page_number":62,"box":{"x":117,"y":614,"width":719,"height":12}},{"id":"3ac11442-0543-4bbc-8b3b-388e33784ba7","block_type":"box","text":"representatives, salespersons or other personnel, fees for maintaining an Intermediary’s investor","page_number":62,"box":{"x":117,"y":630,"width":722,"height":12}},{"id":"9469c1a7-7f20-4624-b9e1-61cce29c9a5e","block_type":"box","text":"platform, “shelf space” payments for making such funds and Products available on the Intermediary’s","page_number":62,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"6bca0aef-c571-4695-803c-377807f192ae","block_type":"box","text":"platform or fees for providing assistance in promoting the sale of such funds and Products. In such","page_number":62,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"2f752ebe-2515-4fa6-a28d-9dd965bce9e5","block_type":"box","text":"cases, the payments to Intermediaries may be tiered or based on a percentage of the value of the","page_number":62,"box":{"x":116,"y":676,"width":726,"height":12}},{"id":"d12a8f10-3d27-472d-a00f-387323443419","block_type":"box","text":"funds and Products held by customers of the applicable Intermediary and may also be subject to","page_number":62,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"db8d9696-82b0-4164-9618-d8d5ee564972","block_type":"box","text":"minimum payment levels. Payments made pursuant to such arrangements may vary in any year and","page_number":62,"box":{"x":117,"y":707,"width":744,"height":12}},{"id":"19f3334e-b894-439b-be0e-fc8888e9556d","block_type":"box","text":"may be different for different Intermediaries and third parties and may reflect different services","page_number":62,"box":{"x":117,"y":723,"width":697,"height":12}},{"id":"8fe077bd-8ef9-47b3-8b54-60f7b79f31eb","block_type":"box","text":"provided. As of the date of this SAI, the Intermediaries and other third parties (or their respective","page_number":62,"box":{"x":117,"y":738,"width":714,"height":12}},{"id":"eef20f92-dc47-48d2-8103-dd70a8d6441e","block_type":"box","text":"affiliates) receiving one or more types of the contractual payments described above include (in addition","page_number":62,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"ac65c264-a2f8-40c7-9a5a-a84390da6ee0","block_type":"box","text":"to FBS and NFS): &Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American","page_number":62,"box":{"x":116,"y":769,"width":718,"height":12}},{"id":"21282eed-51fc-49d4-ba6d-36064005b13a","block_type":"box","text":"Enterprise Investment Services, Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets,","page_number":62,"box":{"x":117,"y":785,"width":754,"height":12}},{"id":"b9b43555-5d77-452c-80b6-36097de81f58","block_type":"box","text":"LLC, BNY Mellon Performance & Risk Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab &","page_number":62,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"4064aa52-1fc0-43cb-ad94-77dfc1551bd3","block_type":"box","text":"Co., Inc., Clearstream Fund Centre AG, Commonwealth Equity Services, LLC, Dorsey Wright and","page_number":62,"box":{"x":117,"y":816,"width":725,"height":12}},{"id":"c752abf7-b3a2-4e7f-995b-3c2fafdf6308","block_type":"box","text":"Associates, LLC, Dynasty Financial Partners LLC, E*Trade Securities LLC, Envestnet Asset","page_number":62,"box":{"x":116,"y":831,"width":688,"height":12}},{"id":"d742fd4a-d032-4c05-bd3d-639347715218","block_type":"box","text":"Management, Inc., iCapital Markets LLC, Interactive Brokers LLC, LPL Financial LLC, Merrill Lynch,","page_number":62,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"fb2915f1-53eb-4abe-a44c-aa22cf6d7111","block_type":"box","text":"Pierce, Fenner & Smith Incorporated, MML Investors Services, LLC, Morgan Stanley Smith Barney","page_number":62,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"04f8b8b0-c865-4cde-b4e1-7968d9227bb5","block_type":"box","text":"LLC, Northwestern Mutual Investment Services, LLC, Orion Portfolio Solutions, LLC, Pershing LLC,","page_number":62,"box":{"x":117,"y":878,"width":743,"height":12}},{"id":"c752a0c2-49c7-41cb-a1b7-f160a5661bba","block_type":"box","text":"53","page_number":62,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c7e11a17-85fe-4532-a445-0b92b1c97fb8","block_type":"box","text":"NM1026U-6004408-62/267","page_number":62,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"40e0daef-e0cf-4226-9d62-0bb425925393","block_type":"box","text":"Raymond James Financial Services, Inc., Riskalyze, Inc., Rockefeller Financial LLC, Sanctuary Wealth","page_number":63,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"4e51bcca-d9a2-4168-8675-815737354144","block_type":"box","text":"Group, LLC, UBS Financial Services Inc., Wells Fargo Clearing Services, LLC and Wells Fargo","page_number":63,"box":{"x":117,"y":102,"width":710,"height":13}},{"id":"e365be13-9dab-47dd-a14d-743a86528c45","block_type":"box","text":"Advisors Financial Network, LLC. 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Any payments made, or financial incentives","page_number":63,"box":{"x":117,"y":285,"width":770,"height":12}},{"id":"35da756a-032c-47b0-a052-81983d72210e","block_type":"box","text":"offered, by the BFA Entities to an Intermediary may create the incentive for the Intermediary to","page_number":63,"box":{"x":116,"y":301,"width":760,"height":12}},{"id":"152a1ade-68f0-4a9e-807c-346c730105e3","block_type":"box","text":"encourage customers to buy shares of the Fund or other Products.","page_number":63,"box":{"x":116,"y":316,"width":535,"height":12}},{"id":"caf7d3dc-e025-4ea2-8844-f916fe423114","block_type":"box","text":"The Fund may participate in certain market maker incentive programs of a national securities","page_number":63,"box":{"x":116,"y":344,"width":695,"height":12}},{"id":"9ba49d7e-1546-4b1a-a49c-f1ce67a8e9ff","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":63,"box":{"x":116,"y":359,"width":739,"height":12}},{"id":"a1cc3750-bb8c-46b4-9a78-a3fa105eb9be","block_type":"box","text":"incentivizing one or more market makers in the securities of the Fund to enhance the liquidity and","page_number":63,"box":{"x":117,"y":375,"width":728,"height":12}},{"id":"603bcb7f-c7d5-493f-984f-5ddce6a4f45e","block_type":"box","text":"quality of the secondary market of securities of the Fund. The fee would then be credited by the","page_number":63,"box":{"x":116,"y":390,"width":714,"height":12}},{"id":"17292b10-175d-4847-90c2-54809dd6bca7","block_type":"box","text":"exchange to one or more market makers that meet or exceed liquidity and market quality standards","page_number":63,"box":{"x":116,"y":406,"width":743,"height":12}},{"id":"c525b9e0-ef78-457c-a995-8a0170a1b18a","block_type":"box","text":"with respect to the securities of the Fund. Each market maker incentive program is subject to approval","page_number":63,"box":{"x":116,"y":421,"width":764,"height":12}},{"id":"820205f6-9e38-4cf0-b40e-ed03d4397a14","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":63,"box":{"x":116,"y":437,"width":748,"height":12}},{"id":"973bd0bc-c7b6-4650-baae-5ee3f7743e06","block_type":"box","text":"solely for the benefit of the Fund and will not","page_number":63,"box":{"x":116,"y":452,"width":334,"height":12}},{"id":"076d70ec-0f3f-4d18-8e97-207f324429fd","block_type":"box","text":"be paid from any Fund assets. Other funds managed by","page_number":63,"box":{"x":451,"y":452,"width":420,"height":12}},{"id":"08a8b8a6-9898-4802-bec9-3bf4c6f6c3a1","block_type":"box","text":"BFA may also participate in such programs.","page_number":63,"box":{"x":117,"y":468,"width":329,"height":12}},{"id":"ee4fa356-4663-4e8d-9de2-8a3262daaf8b","block_type":"box","text":"Determination of Net Asset Value","page_number":63,"box":{"x":119,"y":512,"width":605,"height":23}},{"id":"a6c403f4-86cd-4bfe-b9a1-d672cf987050","block_type":"box","text":"Valuation of Shares.","page_number":63,"box":{"x":116,"y":559,"width":166,"height":9}},{"id":"7a8b2138-f945-4390-b406-490542f13cf4","block_type":"box","text":"The NAV for the Fund is generally calculated as of the close of regular trading","page_number":63,"box":{"x":283,"y":559,"width":583,"height":12}},{"id":"46cb22c8-c684-4dc6-b9c8-8e985399540e","block_type":"box","text":"hours on the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) on each business","page_number":63,"box":{"x":117,"y":574,"width":769,"height":12}},{"id":"042b63b2-45a8-4ced-b4a4-bbe36072d904","block_type":"box","text":"day the NYSE is open. 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The pricing services may use","page_number":63,"box":{"x":468,"y":847,"width":363,"height":12}},{"id":"ab1cb01c-62ef-4ba2-81d0-538e03e43ba1","block_type":"box","text":"valuation models that utilize certain inputs and assu","page_number":63,"box":{"x":116,"y":862,"width":374,"height":12}},{"id":"bb4e7f41-3744-45f9-a755-2cafb2c9fd57","block_type":"box","text":"mptions to derive values, including transaction data","page_number":63,"box":{"x":492,"y":862,"width":377,"height":12}},{"id":"33c51df2-3513-432b-846a-46c28716a99d","block_type":"box","text":"(e.g., recent representative bids and offers), credi","page_number":63,"box":{"x":117,"y":877,"width":357,"height":13}},{"id":"afe80b19-378f-40b8-b9fe-3ea95db4bd2c","block_type":"box","text":"t quality information, perceived market movements,","page_number":63,"box":{"x":475,"y":877,"width":377,"height":13}},{"id":"c0def267-f1bb-4795-838e-0bb512a1e842","block_type":"box","text":"54","page_number":63,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"31c62db7-12d4-4af3-9a9b-f3bd38fc7d88","block_type":"box","text":"NM1026U-6004408-63/267","page_number":63,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b63e5f65-6a7e-44c3-824e-273427ba5708","block_type":"box","text":"news, and other relevant information and by other met","page_number":64,"box":{"x":117,"y":87,"width":393,"height":12}},{"id":"6733974c-1bdd-4d16-827f-02ca60055871","block_type":"box","text":"hods, which may include consideration of: yields or","page_number":64,"box":{"x":511,"y":87,"width":374,"height":12}},{"id":"93738faa-05b7-41ba-a893-21e26b3a6c56","block_type":"box","text":"prices of securities of comparable quality, coupon,","page_number":64,"box":{"x":117,"y":102,"width":368,"height":13}},{"id":"9c073ca7-a216-4181-8edd-cbb2479beec0","block_type":"box","text":"maturity and type; indications as to values from","page_number":64,"box":{"x":486,"y":102,"width":347,"height":13}},{"id":"77284679-0de9-43b0-a0d3-c5aa956629bf","block_type":"box","text":"dealers; general market conditions; and/or other fa","page_number":64,"box":{"x":116,"y":118,"width":367,"height":12}},{"id":"036c76b6-8af3-42ee-a20d-91b5429c5f84","block_type":"box","text":"ctors and assumptions. Pricing services generally","page_number":64,"box":{"x":484,"y":118,"width":364,"height":12}},{"id":"19abeaa3-8d05-4b8a-8f96-8c9c06263bc5","block_type":"box","text":"value fixed-income securities assuming orderly trans","page_number":64,"box":{"x":116,"y":134,"width":381,"height":12}},{"id":"9eff9dcb-e42f-4d62-9af3-d13f880d5a1c","block_type":"box","text":"actions of an institutional round lot size, but the Fund","page_number":64,"box":{"x":499,"y":134,"width":387,"height":11}},{"id":"7da8909d-1230-4cf0-9745-1a681b6c1c79","block_type":"box","text":"may hold or transact in such securities in smaller, odd","page_number":64,"box":{"x":117,"y":149,"width":395,"height":12}},{"id":"fd62d18a-9183-4499-935d-c08e51eb9a29","block_type":"box","text":"lot sizes. Odd lots of securities in certain asset","page_number":64,"box":{"x":513,"y":149,"width":340,"height":10}},{"id":"4d265693-691e-41de-9100-7ecc5de961eb","block_type":"box","text":"classes may trade at lower prices than institutional","page_number":64,"box":{"x":116,"y":165,"width":371,"height":12}},{"id":"9fc39e9d-03cd-4058-9ef7-512fabaff33e","block_type":"box","text":"round lots, and the value ultimately realized when the","page_number":64,"box":{"x":488,"y":165,"width":391,"height":12}},{"id":"d63398d7-6399-4f4f-a4e9-68394cc0b2e5","block_type":"box","text":"securities are sold could differ from the prices us","page_number":64,"box":{"x":116,"y":180,"width":352,"height":12}},{"id":"4d68f01b-fd1e-455d-aa91-2727002c5320","block_type":"box","text":"ed by the Fund. The amortized cost method of valuation","page_number":64,"box":{"x":469,"y":180,"width":412,"height":12}},{"id":"0999d0ca-e50c-40e8-93cb-7e9385e9acfa","block_type":"box","text":"may be used with respect to debt obligations with 60","page_number":64,"box":{"x":117,"y":196,"width":385,"height":12}},{"id":"9ebda369-209e-46d2-92d7-0e71e55bc537","block_type":"box","text":"days or less remaining to maturity unless such","page_number":64,"box":{"x":502,"y":196,"width":342,"height":12}},{"id":"6528ed23-3576-4ee5-a94d-7c66ac194a51","block_type":"box","text":"method does not represent fair value. Certain fi","page_number":64,"box":{"x":117,"y":211,"width":341,"height":12}},{"id":"c0619ef8-239a-4ee8-890e-e91dbc201c5f","block_type":"box","text":"xed-income investments, including asset-backed and","page_number":64,"box":{"x":459,"y":211,"width":391,"height":12}},{"id":"e7925478-6758-4f40-9d6a-0f9c6c9216b8","block_type":"box","text":"mortgage related securities, may be valued based on val","page_number":64,"box":{"x":117,"y":227,"width":410,"height":12}},{"id":"520c01cd-5b20-4f34-9a7b-f259a33c343b","block_type":"box","text":"uation models that consider the estimated cash","page_number":64,"box":{"x":529,"y":227,"width":348,"height":9}},{"id":"dd0098c3-f287-4e4a-86d2-81a0f23bfcb1","block_type":"box","text":"flows of each tranche of the issuer, establis","page_number":64,"box":{"x":116,"y":242,"width":314,"height":11}},{"id":"dc98cd0d-91c3-4377-a974-881bcce757f2","block_type":"box","text":"h a benchmark yield and develop an estimated tranche","page_number":64,"box":{"x":431,"y":242,"width":404,"height":12}},{"id":"6d68b351-df4e-4c52-8331-070288319fac","block_type":"box","text":"specific spread to the benchmark yield bas","page_number":64,"box":{"x":116,"y":258,"width":310,"height":12}},{"id":"c3845e0b-1267-4bcf-8996-2cb17fa483ea","block_type":"box","text":"ed on the unique attributes of the tranche.","page_number":64,"box":{"x":427,"y":258,"width":309,"height":11}},{"id":"8be2fdf2-2b6b-4267-8e0d-a838c8624773","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":64,"box":{"x":116,"y":285,"width":379,"height":12}},{"id":"98bdf3ee-3da6-4438-8b01-b770003ab034","block_type":"box","text":"Exchange-traded equity options (except ETF","page_number":64,"box":{"x":497,"y":285,"width":342,"height":13}},{"id":"d30be49d-e32c-482e-8618-f7fbea138029","block_type":"box","text":"options, equity index options or those that are customized) for which market quotations are readily","page_number":64,"box":{"x":116,"y":301,"width":733,"height":12}},{"id":"b6918ac1-41ed-4d07-99ab-21b8c2f0edec","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":64,"box":{"x":116,"y":316,"width":771,"height":13}},{"id":"97148aa3-1521-446c-a474-f56e7c7f0913","block_type":"box","text":"of trade on which such options are traded. In the event that there is no mean price available for such","page_number":64,"box":{"x":116,"y":332,"width":750,"height":12}},{"id":"1e7c65a2-4aac-449a-ba07-bdc1f9c42c0b","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":64,"box":{"x":116,"y":348,"width":748,"height":12}},{"id":"d3f0f4be-d185-469f-9848-3fd798760401","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":64,"box":{"x":117,"y":363,"width":732,"height":12}},{"id":"7c3f5721-6561-485e-8dbe-82e00ea8e35a","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":64,"box":{"x":116,"y":378,"width":770,"height":13}},{"id":"73273eae-a5c9-4901-9156-42ef1650b524","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":64,"box":{"x":117,"y":394,"width":766,"height":12}},{"id":"cdd81063-7dc1-496f-91dc-19fdffe57838","block_type":"box","text":"the option, in which case such option will be treated as a Fair Value Asset. Customized exchange","page_number":64,"box":{"x":116,"y":409,"width":729,"height":13}},{"id":"54b0f233-47f3-493f-b26b-d8ecc088ec33","block_type":"box","text":"traded equity options, ETF options, equity index options","page_number":64,"box":{"x":116,"y":425,"width":419,"height":12}},{"id":"521db4b7-d867-40da-9de4-d4231c08f9bc","block_type":"box","text":"and OTC derivatives may be valued using a","page_number":64,"box":{"x":535,"y":425,"width":331,"height":12}},{"id":"7c048b35-8796-4345-b7af-f02894d13a87","block_type":"box","text":"mathematical model which may incorporate a number of market data factors. Financial futures","page_number":64,"box":{"x":117,"y":440,"width":703,"height":13}},{"id":"d3621cf7-2e12-4c13-a575-2ae520d6ec35","block_type":"box","text":"contracts and options thereon, which are traded on exchanges, are valued at their last sale price or","page_number":64,"box":{"x":116,"y":456,"width":741,"height":12}},{"id":"491e1f18-0e79-4616-96e8-3ba9c0473e41","block_type":"box","text":"settle price as of the close of such exchanges. Swap agreements and other derivatives are generally","page_number":64,"box":{"x":116,"y":471,"width":752,"height":13}},{"id":"d76e6fd9-1a4d-412b-acb0-49a227e1753c","block_type":"box","text":"valued daily based upon quotations from market makers or by a pricing service in accordance with the","page_number":64,"box":{"x":116,"y":487,"width":763,"height":12}},{"id":"a79a6081-91cf-40c5-bd99-6e84c277b0f4","block_type":"box","text":"Valuation Procedures.","page_number":64,"box":{"x":116,"y":503,"width":170,"height":9}},{"id":"e9dd5381-4408-4595-9723-49923e609484","block_type":"box","text":"Underlying Funds.","page_number":64,"box":{"x":117,"y":531,"width":145,"height":12}},{"id":"2bd281ca-df10-4ec6-82b8-b0bfc7289e92","block_type":"box","text":"Shares of underlying open-end funds that are not traded on an exchange","page_number":64,"box":{"x":263,"y":530,"width":553,"height":13}},{"id":"a64bd008-b99c-4e5a-ad7c-1b040d5dc52f","block_type":"box","text":"(including money market funds) are valued at NAV. Shares of underlying exchange-traded closed-end","page_number":64,"box":{"x":117,"y":546,"width":761,"height":12}},{"id":"037d241a-cbd1-448d-8ee7-ca9cb1900127","block_type":"box","text":"funds or other ETFs will be valued at their most recent closing price.","page_number":64,"box":{"x":116,"y":561,"width":511,"height":13}},{"id":"a9be6c77-fc1d-4b99-a1c1-669f3894ed3a","block_type":"box","text":"General Valuation Information.","page_number":64,"box":{"x":116,"y":589,"width":244,"height":10}},{"id":"4b2b7fb0-d2e4-4262-a010-8df62d1f651d","block_type":"box","text":"Prices obtained from independent third-party pricing services, broker","page_number":64,"box":{"x":361,"y":589,"width":520,"height":12}},{"id":"f741b9b1-998d-47bc-9695-88d4ea4631a3","block_type":"box","text":"dealers or market makers to value the Fund’s securities and other assets and liabilities are based on","page_number":64,"box":{"x":116,"y":605,"width":751,"height":9}},{"id":"eae61277-ed4a-4351-9ff1-05f11b9d620c","block_type":"box","text":"information available at the time the Fund values its assets and liabilities. In the event that a pricing","page_number":64,"box":{"x":117,"y":620,"width":740,"height":12}},{"id":"fb8a4189-2e8e-4aee-8ccc-b54fd505d5e1","block_type":"box","text":"service quotation is revised or updated subsequent to the day on which the Fund valued such security,","page_number":64,"box":{"x":116,"y":636,"width":767,"height":12}},{"id":"123a29cf-dbaa-4b50-9941-bbf3bb3dacc4","block_type":"box","text":"the revised pricing service quotation generally will be applied prospectively. Such determination will be","page_number":64,"box":{"x":116,"y":651,"width":764,"height":12}},{"id":"05ec7e37-9dd6-4eef-a1f6-74e1c3297ba9","block_type":"box","text":"made considering pertinent facts and circumstances surrounding the revision.","page_number":64,"box":{"x":117,"y":667,"width":574,"height":12}},{"id":"24b001cb-fedd-4966-be69-4165ca2895b5","block_type":"box","text":"The price the Fund could receive upon the sale of any particular portfolio investment may differ from","page_number":64,"box":{"x":116,"y":695,"width":742,"height":12}},{"id":"d1b3cde3-7c67-48d9-9a4c-53b43b4add08","block_type":"box","text":"the Fund’s valuation of the investment, particularly for assets that trade in thin or volatile markets or","page_number":64,"box":{"x":116,"y":710,"width":738,"height":12}},{"id":"e7442657-3441-419a-b654-b754f3265098","block_type":"box","text":"that are valued using a fair valuation methodology or a price provided by an independent pricing","page_number":64,"box":{"x":116,"y":726,"width":711,"height":12}},{"id":"a515d240-c7b0-41db-9b0c-73fe4b91a4bf","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":64,"box":{"x":116,"y":741,"width":723,"height":12}},{"id":"bceb2578-52ab-4beb-9ebd-abf6f573c992","block_type":"box","text":"ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected","page_number":64,"box":{"x":116,"y":757,"width":760,"height":12}},{"id":"c1facd8f-e20a-42d8-a468-ee40c6f48077","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":64,"box":{"x":116,"y":772,"width":750,"height":12}},{"id":"efe4b61e-8efe-4af2-82a5-c49d2b26b4d5","block_type":"box","text":"by technological issues and/or errors by pricing services or other third-party service providers.","page_number":64,"box":{"x":117,"y":788,"width":694,"height":12}},{"id":"9335c39e-e100-4bda-8ae5-6b76325a3172","block_type":"box","text":"In the event that application of the methods of val","page_number":64,"box":{"x":117,"y":816,"width":356,"height":12}},{"id":"459c1c50-6bcc-42d5-94b9-df3d30c3f02d","block_type":"box","text":"uation discussed above result in a price for a security","page_number":64,"box":{"x":475,"y":816,"width":386,"height":12}},{"id":"ac78936e-21a5-41b9-8176-16a566b83136","block_type":"box","text":"which is deemed not to be representative of the fair","page_number":64,"box":{"x":116,"y":831,"width":378,"height":12}},{"id":"53ccb5fc-2340-4e34-af0a-0fd0db613783","block_type":"box","text":"market value of such security, the security will be","page_number":64,"box":{"x":494,"y":831,"width":361,"height":12}},{"id":"35877b43-78a8-4741-a7a9-f58d88de7898","block_type":"box","text":"valued by, under the direction of or in accordanc","page_number":64,"box":{"x":116,"y":847,"width":351,"height":12}},{"id":"17e0a0f6-40fa-4294-85da-4f6b61a76ad5","block_type":"box","text":"e with a method approved by BFA, the Fund’s valuation","page_number":64,"box":{"x":467,"y":847,"width":409,"height":12}},{"id":"5c84de45-fa4c-4d75-8cf2-228b42093689","block_type":"box","text":"designee, as reflecting fair value. All other assets","page_number":64,"box":{"x":116,"y":862,"width":362,"height":12}},{"id":"ce2fe88a-790a-495b-b78e-b86d5dced45d","block_type":"box","text":"and liabilities (including securities for which market","page_number":64,"box":{"x":478,"y":862,"width":372,"height":12}},{"id":"ac20f6c5-1749-40a4-af58-cd1647042be2","block_type":"box","text":"quotations are not readily available) held by the Fund","page_number":64,"box":{"x":116,"y":878,"width":391,"height":12}},{"id":"867a0782-262a-4c92-ab0c-90e315f21222","block_type":"box","text":"(including restricted securities and private market","page_number":64,"box":{"x":508,"y":878,"width":361,"height":12}},{"id":"3a144e2a-c365-4e4f-aafc-52ab4aea05e7","block_type":"box","text":"55","page_number":64,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"301a54c1-fb5f-4694-bd00-4cbe44d8368a","block_type":"box","text":"NM1026U-6004408-64/267","page_number":64,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4be1b1a8-e653-4383-a1e4-b43168e2a4f5","block_type":"box","text":"investments, as applicable) are valued at fair val","page_number":65,"box":{"x":117,"y":87,"width":349,"height":12}},{"id":"98f4b5af-6cfe-4610-bc17-3217210340db","block_type":"box","text":"ue as determined in good faith by BFA pursuant to the","page_number":65,"box":{"x":468,"y":87,"width":398,"height":12}},{"id":"cd079b0a-093d-478e-b17b-e741f11c7412","block_type":"box","text":"Valuation Procedures. Any assets and liabilities w","page_number":65,"box":{"x":116,"y":103,"width":350,"height":12}},{"id":"dc4d5651-5296-44c7-aab5-224f394a473d","block_type":"box","text":"which are denominated in a foreign currency are","page_number":65,"box":{"x":466,"y":102,"width":356,"height":13}},{"id":"341174c1-d9b3-4f04-adbd-d3c46bc5ac2b","block_type":"box","text":"translated into U.S. dollars at the prevailing market rates.","page_number":65,"box":{"x":116,"y":118,"width":418,"height":12}},{"id":"061811b0-4411-400e-afb2-ddff246bce04","block_type":"box","text":"Fair Value.","page_number":65,"box":{"x":117,"y":149,"width":83,"height":10}},{"id":"2ebabe07-4751-48b0-b85e-08bb6a89c5f2","block_type":"box","text":"When market quotations are not readily available or are believed by BFA to be unreliable,","page_number":65,"box":{"x":201,"y":149,"width":674,"height":12}},{"id":"9030dd89-d35b-4afa-a573-6b6e939e933f","block_type":"box","text":"the Fund’s investments are valued at fair value (“Fair Value Assets”). Fair Value Assets are valued by","page_number":65,"box":{"x":116,"y":165,"width":758,"height":12}},{"id":"9a922a42-db8f-4072-bc26-f86c6bcec134","block_type":"box","text":"BFA in accordance with the Valuation Procedures. Pursuant to Rule 2a-5 under the Investment","page_number":65,"box":{"x":117,"y":180,"width":710,"height":10}},{"id":"705eb59f-f58e-469c-9844-621e0da5ca6d","block_type":"box","text":"Company Act, the Board has designated BFA as the valuation designee for the Fund. BFA may","page_number":65,"box":{"x":117,"y":196,"width":712,"height":12}},{"id":"6a2f3a69-bd38-4c63-b793-03c5e18910e3","block_type":"box","text":"reasonably conclude that a market quotation is not readily available or is unreliable if, among other","page_number":65,"box":{"x":117,"y":211,"width":736,"height":12}},{"id":"a7ca4d16-7542-4116-bd36-ef6ee7dd5477","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":65,"box":{"x":116,"y":227,"width":733,"height":12}},{"id":"313fc8ac-3f24-4a31-9482-3a3904f5baef","block_type":"box","text":"trading, if BFA believes a market quotation from a broker-dealer or other source is unreliable (e.g.,","page_number":65,"box":{"x":116,"y":242,"width":734,"height":12}},{"id":"6166262b-a3c8-4a6d-9584-d867b73e5cfc","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":65,"box":{"x":116,"y":258,"width":740,"height":12}},{"id":"c0728c16-2832-42b4-8d55-a76bec125b72","block_type":"box","text":"other asset or liability subsequent to the most recent market quotation), or where the security or other","page_number":65,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"85c95e73-c02c-4b2a-b7a4-a88f980fcbf2","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":65,"box":{"x":116,"y":289,"width":752,"height":12}},{"id":"34b604a7-68d8-4d7c-b257-3452564c73bb","block_type":"box","text":"most recent market quotation. For this purpose, a “significant event” is deemed to occur if BFA","page_number":65,"box":{"x":117,"y":304,"width":706,"height":12}},{"id":"b6a2147e-efb1-4948-85bf-04cd30633c19","block_type":"box","text":"determines, in its reasonable business judgment, that an event has occurred after the close of trading","page_number":65,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"1436ebbd-ec5f-42e1-b04b-85ad6c34457a","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":65,"box":{"x":116,"y":335,"width":735,"height":12}},{"id":"23851be9-fba4-4fa6-b669-928ad5751887","block_type":"box","text":"cause a material change to the last exchange closing price or closing market price of one or more","page_number":65,"box":{"x":116,"y":351,"width":730,"height":12}},{"id":"dbec1185-5d8d-4d80-af6f-f924f7484540","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":65,"box":{"x":116,"y":366,"width":739,"height":12}},{"id":"cdd8d6ea-deba-476e-ac08-4f6b52adbf2d","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":65,"box":{"x":117,"y":382,"width":753,"height":12}},{"id":"fe6a2997-33dd-4493-b2f5-5f545c210442","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":65,"box":{"x":116,"y":397,"width":729,"height":12}},{"id":"6dbad563-a5c5-47fc-946a-dbce53cfea6d","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":65,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"5b37563d-518f-4693-8a4a-193fa1833c51","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":65,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"ffac741b-b5c0-4963-928a-92001f863539","block_type":"box","text":"third-party vendor supplies evaluated, systematic fair value pricing based upon the movement of a","page_number":65,"box":{"x":116,"y":444,"width":733,"height":12}},{"id":"11985aac-00d6-4086-91d2-e669ae460657","block_type":"box","text":"proprietary multi-factor model after the relevant foreign markets have closed. This systematic fair value","page_number":65,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"7fce13a9-296f-4a44-ac77-8dc11b2d4aed","block_type":"box","text":"pricing methodology is designed to correlate the prices of foreign assets in one or more non-U.S.","page_number":65,"box":{"x":117,"y":475,"width":723,"height":12}},{"id":"b4a2e721-9e9f-4c7e-b11e-db6fb774468f","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":65,"box":{"x":117,"y":490,"width":770,"height":12}},{"id":"877f7302-e66c-4161-858f-ec223cfccbe9","block_type":"box","text":"pricing time.","page_number":65,"box":{"x":117,"y":506,"width":94,"height":12}},{"id":"025ae979-4828-4c35-99e2-e7c4137e363f","block_type":"box","text":"BFA’s Rule 2a-5 Committee is responsible for reviewing and approving methodologies by investment","page_number":65,"box":{"x":117,"y":537,"width":753,"height":12}},{"id":"e174ca71-62ee-44e6-a505-e10a1524be4c","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":65,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"27e0fdd2-7d92-4234-9244-2968c9885700","block_type":"box","text":"accounting agent assists BFA by periodically endeavoring to confirm the prices it receives from all","page_number":65,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"9c0ef62e-cda0-4b6c-91bd-a231da319e2d","block_type":"box","text":"third-party pricing services, index providers and broker-dealers.","page_number":65,"box":{"x":116,"y":583,"width":475,"height":12}},{"id":"f7c8a5ed-f3fe-44c2-ac42-f810fd678a1f","block_type":"box","text":"BFA regularly evaluates the values","page_number":65,"box":{"x":592,"y":583,"width":264,"height":12}},{"id":"14202593-120c-45e8-a7b2-c6834f19d771","block_type":"box","text":"assigned to the securities and other assets and liabilities of the Fund.","page_number":65,"box":{"x":116,"y":599,"width":519,"height":12}},{"id":"0ea8be2a-863d-43af-b591-22f97e03f0b7","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":65,"box":{"x":116,"y":630,"width":759,"height":12}},{"id":"0852e5b4-af6d-4665-b7b4-3d9f941ef4bc","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":65,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"620eeaea-b27c-4252-b49c-01bd81b9381a","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":65,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"a28d9469-08a2-48d9-bbfe-9e0338f2bdd4","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":65,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"81a7f9b0-ed32-408a-ad67-d81d4364bf7b","block_type":"box","text":"it holds the asset or liability to maturity. Fair value determinations will be based upon all available","page_number":65,"box":{"x":117,"y":692,"width":718,"height":12}},{"id":"e187e206-c1e2-4cb4-926a-01be1c9aebae","block_type":"box","text":"factors that BFA deems relevant at the time of the determination, and may be based on analytical","page_number":65,"box":{"x":116,"y":707,"width":722,"height":12}},{"id":"3b35c404-66cd-452a-8d7c-bb116324a50b","block_type":"box","text":"values determined by BFA using proprietary or third-party valuation models.","page_number":65,"box":{"x":116,"y":723,"width":561,"height":12}},{"id":"1b7e4fbc-88d1-4061-9f1b-1566de682273","block_type":"box","text":"Fair value represents a good faith approximation of the value of an asset or liability. When determining","page_number":65,"box":{"x":117,"y":754,"width":758,"height":12}},{"id":"512ac34d-a5f3-4707-b969-3df46ea55133","block_type":"box","text":"the fair value of an investment, one or more fair value methodologies may be used (depending on","page_number":65,"box":{"x":116,"y":769,"width":724,"height":12}},{"id":"5c8c3976-9727-49c6-a456-6fee89b32619","block_type":"box","text":"certain factors, including the asset type). For example, the investment may be initially priced based on","page_number":65,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"7e1f9a5a-2649-4527-bc62-c08163c19a99","block_type":"box","text":"the original cost of the investment or, alternatively, using proprietary or third-party models that may rely","page_number":65,"box":{"x":116,"y":800,"width":764,"height":12}},{"id":"ffeb76bf-788f-45c8-bf02-174a03ac9ec2","block_type":"box","text":"upon one or more unobservable inputs. Prices of actual, executed or historical transactions in the","page_number":65,"box":{"x":117,"y":816,"width":721,"height":12}},{"id":"657b57b6-2534-4600-8284-5ca67589a5c2","block_type":"box","text":"relevant investment (or comparable instruments) or, where appropriate, an appraisal by a third-party","page_number":65,"box":{"x":117,"y":831,"width":747,"height":12}},{"id":"4058889b-48d4-415d-a048-64873e88aa19","block_type":"box","text":"experienced in the valuation of similar instruments, may also be used as a basis for establishing the","page_number":65,"box":{"x":116,"y":847,"width":745,"height":12}},{"id":"b4ef902e-1832-4ab0-b507-99302a498985","block_type":"box","text":"fair value of an investment.","page_number":65,"box":{"x":116,"y":862,"width":206,"height":10}},{"id":"daf64412-a0dc-4d1d-98ab-61c2ffe5a162","block_type":"box","text":"56","page_number":65,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4c8e78f0-375e-4b0f-b9c4-01200600e691","block_type":"box","text":"NM1026U-6004408-65/267","page_number":65,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6f6ec865-a86b-4a94-8d1a-916ac65b7b96","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":66,"box":{"x":116,"y":87,"width":738,"height":12}},{"id":"4f676c6b-cfd0-4783-ab3c-2c6c39729617","block_type":"box","text":"assets or liabilities could have been sold during the period in which the particular fair values were used","page_number":66,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"56741259-989c-4ffe-9009-30d2eed287e9","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":66,"box":{"x":117,"y":118,"width":744,"height":12}},{"id":"dcd94beb-6229-4472-972f-3085010fc2c3","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":66,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"8f1a0cc0-ebb2-4236-9391-12bcb9e74f3c","block_type":"box","text":"the economic interest of existing shareholders.","page_number":66,"box":{"x":116,"y":149,"width":352,"height":12}},{"id":"835b7328-a67b-4a5d-8e82-78b0e4fe6a4d","block_type":"box","text":"The Fund’s annual audited financial statements, which are prepared in accordance with accounting","page_number":66,"box":{"x":116,"y":177,"width":740,"height":12}},{"id":"9c7e4ccf-83dd-47ce-b2a1-1a460f0d53a2","block_type":"box","text":"principles generally accepted in the United States of America (“US GAAP”), follow the requirements for","page_number":66,"box":{"x":117,"y":192,"width":767,"height":12}},{"id":"e144c1a5-6c01-445a-a27d-1fb1ad572f6d","block_type":"box","text":"valuation set forth in Financial Accounting Standards Board Accounting Standards Codification Topic","page_number":66,"box":{"x":116,"y":208,"width":753,"height":12}},{"id":"711dde4e-d3f6-4315-b974-31ecc53ec021","block_type":"box","text":"820, “Fair Value Measurements and Disclosures” (“ASC 820”), which defines and establishes a","page_number":66,"box":{"x":116,"y":223,"width":712,"height":12}},{"id":"39d7f222-d683-4409-8a2e-5f66dffae5cb","block_type":"box","text":"framework for measuring fair value under US GAAP and expands financial statement disclosure","page_number":66,"box":{"x":116,"y":239,"width":717,"height":12}},{"id":"2de1002f-a607-4244-9f9c-4234dae1887f","block_type":"box","text":"requirements relating to fair value measurements.","page_number":66,"box":{"x":117,"y":254,"width":374,"height":12}},{"id":"26ab460c-6b62-454d-a457-c6f713ece406","block_type":"box","text":"Generally, ASC 820 and other accounting rules applicable to funds and various assets in which they","page_number":66,"box":{"x":117,"y":282,"width":731,"height":12}},{"id":"74c0e8c9-3e89-4e8d-87c9-731ec3209d20","block_type":"box","text":"invest are evolving. Such changes may adversely affe","page_number":66,"box":{"x":117,"y":297,"width":391,"height":12}},{"id":"361d484d-a0cb-467c-b09c-ccafa2b4ee9a","block_type":"box","text":"ct the Fund. For example, the evolution of rules","page_number":66,"box":{"x":509,"y":297,"width":348,"height":12}},{"id":"9d2b6e66-488a-48c8-84c7-052d04e66c95","block_type":"box","text":"governing the determination of the fair market value of","page_number":66,"box":{"x":116,"y":313,"width":395,"height":12}},{"id":"0dae6a7f-1a35-445e-a66f-38cbd222fcb2","block_type":"box","text":"f assets or liabilities, to the extent such rules","page_number":66,"box":{"x":510,"y":313,"width":321,"height":11}},{"id":"f53d757a-3e20-4fde-b0ed-40563a1c1724","block_type":"box","text":"become more stringent, would tend to increase the co","page_number":66,"box":{"x":117,"y":328,"width":390,"height":12}},{"id":"b4537a37-ca3b-451c-be1c-784d8fe3cd8d","block_type":"box","text":"st and/or reduce the availability of third-party","page_number":66,"box":{"x":508,"y":328,"width":327,"height":12}},{"id":"7d761b07-900d-43ee-81dd-db9a0d3b9984","block_type":"box","text":"determinations of fair market value. This may in tu","page_number":66,"box":{"x":116,"y":344,"width":363,"height":12}},{"id":"b2190ad3-80ea-48e8-817a-234972417e6b","block_type":"box","text":"rn increase the costs associated with selling assets or","page_number":66,"box":{"x":481,"y":344,"width":395,"height":12}},{"id":"a0f11f88-32df-45cd-9034-352ef243204d","block_type":"box","text":"affect their liquidity due to the Fund’s inability to obtai","page_number":66,"box":{"x":116,"y":359,"width":384,"height":12}},{"id":"bdd0fc06-6202-41c7-a7dd-6913be3ac1e2","block_type":"box","text":"n a third-party determination of fair market value.","page_number":66,"box":{"x":502,"y":359,"width":358,"height":12}},{"id":"24611263-431c-4f6f-be5f-babe3fba5e69","block_type":"box","text":"Brokerage Transactions","page_number":66,"box":{"x":119,"y":404,"width":437,"height":29}},{"id":"1cfb430b-860d-4f98-9eeb-03512ed061b3","block_type":"box","text":"Subject to policies established by the Board, BFA is primarily responsible for the execution of the","page_number":66,"box":{"x":116,"y":450,"width":724,"height":12}},{"id":"21bb0d29-e4a7-428a-ae02-250c2d8f5875","block_type":"box","text":"Fund’s portfolio transactions and the allocation of brokerage. BFA does not execute transactions","page_number":66,"box":{"x":117,"y":466,"width":720,"height":12}},{"id":"27f1d3d3-0b4b-4273-8828-4b49a55297de","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":66,"box":{"x":116,"y":481,"width":770,"height":12}},{"id":"e4b96dd4-9a61-45bb-b19d-b8940e06d287","block_type":"box","text":"account certain factors set out below. While BFA generally seeks reasonable trade execution costs,","page_number":66,"box":{"x":116,"y":497,"width":744,"height":12}},{"id":"135ac2bb-8d09-4b38-8f34-bc58595e75da","block_type":"box","text":"the Fund does not necessarily pay the lowest spread or commission available, and payment of the","page_number":66,"box":{"x":116,"y":512,"width":735,"height":12}},{"id":"1e480f11-3d9e-437a-ac6d-795ca9e1e826","block_type":"box","text":"lowest commission or spread is not necessarily consistent with obtaining the best price and execution","page_number":66,"box":{"x":117,"y":528,"width":757,"height":12}},{"id":"ead3836d-ae47-47e6-84d2-69088ad359a4","block_type":"box","text":"in particular transactions. Subject to applicable legal requirements, BFA may select a broker based","page_number":66,"box":{"x":117,"y":543,"width":738,"height":12}},{"id":"494e36ad-a4c5-4f32-bb40-fb4ce3cf8f60","block_type":"box","text":"partly upon brokerage or research services provided to BFA and its clients, including the Fund. In","page_number":66,"box":{"x":117,"y":559,"width":726,"height":12}},{"id":"7f14d125-8808-44a0-a63b-58463a850818","block_type":"box","text":"return for such services, BFA may cause the Fund to pay a higher commission than other brokers","page_number":66,"box":{"x":117,"y":574,"width":729,"height":12}},{"id":"84cf6c8c-e0c6-4d7f-96c4-082249819551","block_type":"box","text":"would charge if BFA determines in good faith that the commission is reasonable in relation to the","page_number":66,"box":{"x":116,"y":590,"width":723,"height":12}},{"id":"9fac7da2-98f4-4045-acdd-20ffda413d1f","block_type":"box","text":"services provided.","page_number":66,"box":{"x":116,"y":605,"width":140,"height":12}},{"id":"13822e80-7e30-40ce-b6da-30f763c463e2","block_type":"box","text":"In selecting brokers or dealers to execute portfolio transactions, BFA and the Sub-Adviser seek to","page_number":66,"box":{"x":117,"y":633,"width":730,"height":12}},{"id":"dbe95269-0cfa-4750-a458-9eb87a356339","block_type":"box","text":"obtain the best price and most favorable execution for the Fund, taking into account a variety of factors","page_number":66,"box":{"x":116,"y":648,"width":768,"height":12}},{"id":"34ca97f1-ee62-4146-a9bf-80b16cc6eb20","block_type":"box","text":"including: (i) the size, nature and character of the security or instrument being traded and the markets","page_number":66,"box":{"x":117,"y":664,"width":752,"height":12}},{"id":"62826409-e722-49fb-8fb0-9d9359ec8281","block_type":"box","text":"in which it is purchased or sold; (ii) the desired timing of the transaction; (iii) BFA’s knowledge of the","page_number":66,"box":{"x":117,"y":679,"width":740,"height":12}},{"id":"39462db3-7b68-489d-ab2d-b2d71b6212ad","block_type":"box","text":"expected commission rates and spreads currently available; (iv) the activity existing and expected in","page_number":66,"box":{"x":116,"y":695,"width":742,"height":12}},{"id":"4d857013-a1d2-4386-ba50-304da91b4874","block_type":"box","text":"the market for the particular security or instrument, including any anticipated execution difficulties;","page_number":66,"box":{"x":116,"y":710,"width":723,"height":12}},{"id":"b5bbd6b0-30f7-443a-9a6f-0fd18ba8d5b2","block_type":"box","text":"(v) the full range of brokerage services provided; (vi) the broker’s or dealer’s capital; (vii) the quality of","page_number":66,"box":{"x":117,"y":726,"width":755,"height":12}},{"id":"3b1dae5a-9bf4-4e6d-be58-8d9cde2b14c5","block_type":"box","text":"research and research services provided; (viii) the reasonableness of the commission, dealer spread","page_number":66,"box":{"x":117,"y":741,"width":746,"height":12}},{"id":"fdb3b87f-3012-4cf3-9581-b26e3f6bb831","block_type":"box","text":"or its equivalent for the specific transaction; and (ix) BFA’s knowledge of any actual or apparent","page_number":66,"box":{"x":116,"y":757,"width":709,"height":12}},{"id":"f55afd52-a382-46f3-9787-ebcc80f96b23","block_type":"box","text":"operational problems of a broker or dealer.","page_number":66,"box":{"x":116,"y":772,"width":316,"height":12}},{"id":"074e80b8-9799-4940-988f-03b2ce99ebb1","block_type":"box","text":"Section 28(e) of the 1934 Act (“Section 28(e)”) permits an investment adviser, under certain","page_number":66,"box":{"x":116,"y":800,"width":665,"height":12}},{"id":"c748a2f9-aec2-4022-9b14-4c4821943536","block_type":"box","text":"circumstances, to cause an account to pay a broker or dealer a commission for effecting a transaction","page_number":66,"box":{"x":116,"y":815,"width":739,"height":13}},{"id":"b9ad04c0-ba83-4506-b6e1-96926c377e7a","block_type":"box","text":"that exceeds the amount another brok","page_number":66,"box":{"x":116,"y":831,"width":277,"height":9}},{"id":"bfb2a14a-e2e1-4d7a-b437-777c1411316f","block_type":"box","text":"er or dealer would have charged for effecting the same transaction","page_number":66,"box":{"x":394,"y":831,"width":488,"height":12}},{"id":"b54bedac-6fdd-4126-863e-c016fec94a45","block_type":"box","text":"in recognition of the value of brokerage and research","page_number":66,"box":{"x":117,"y":846,"width":388,"height":13}},{"id":"0b4cdce4-3334-4748-a118-4c580a4da740","block_type":"box","text":"services provided by that broker or dealer. This","page_number":66,"box":{"x":506,"y":847,"width":347,"height":12}},{"id":"2f667a1f-e01c-4648-a6bd-9156cde026a5","block_type":"box","text":"includes commissions paid on riskless principal tr","page_number":66,"box":{"x":117,"y":862,"width":357,"height":12}},{"id":"d51049a9-0c8c-4b18-8006-d3bf31030ecb","block_type":"box","text":"ansactions under certain conditions. Brokerage and","page_number":66,"box":{"x":474,"y":862,"width":380,"height":12}},{"id":"8d0b20eb-04f9-46e2-bc17-1ef8cfe66a57","block_type":"box","text":"research services include: (1) furnishing advice as","page_number":66,"box":{"x":117,"y":877,"width":363,"height":13}},{"id":"004cd890-2158-4772-8d59-ce85123a2e8b","block_type":"box","text":"to the value of securities, including pricing and","page_number":66,"box":{"x":480,"y":877,"width":346,"height":13}},{"id":"b1da338c-9cb9-4910-8437-ce09afe76314","block_type":"box","text":"57","page_number":66,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ad8ddb24-0641-413a-9b0f-09e427a1a21e","block_type":"box","text":"NM1026U-6004408-66/267","page_number":66,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7e2eed54-58b1-4dd5-b271-bf5dd3dad7a1","block_type":"box","text":"appraisal advice, credit analysis, risk measurement","page_number":67,"box":{"x":116,"y":87,"width":377,"height":12}},{"id":"76322945-364e-417f-9750-c1059d2e9a2d","block_type":"box","text":"analysis, performance and other analysis, as well as","page_number":67,"box":{"x":493,"y":87,"width":385,"height":12}},{"id":"43c3961a-ea4b-4c4d-a38c-87e7eea9cfbe","block_type":"box","text":"the advisability of investing in, purchasing or selling","page_number":67,"box":{"x":116,"y":102,"width":377,"height":13}},{"id":"b39abe7b-241f-47ec-8281-068e4f928281","block_type":"box","text":"securities, and the availability of securities or","page_number":67,"box":{"x":493,"y":102,"width":329,"height":13}},{"id":"0da7d39f-efe1-4b6f-8a41-31148d73b1a7","block_type":"box","text":"purchasers or sellers of securities; (2) furnishi","page_number":67,"box":{"x":117,"y":118,"width":329,"height":12}},{"id":"89cfe151-28ef-4b38-9113-69650d0474e3","block_type":"box","text":"ng analyses and reports concerning issuers, industries,","page_number":67,"box":{"x":448,"y":118,"width":405,"height":12}},{"id":"4a4a7d92-0a6e-438c-ada3-62dfdc929379","block_type":"box","text":"securities, economic factors and trends, portfolio strategy, and the performance of accounts; and","page_number":67,"box":{"x":116,"y":134,"width":707,"height":12}},{"id":"6c0a40f4-a075-48ee-b1b7-bb302fb10989","block_type":"box","text":"(3) effecting securities transactions and performing functi","page_number":67,"box":{"x":117,"y":149,"width":411,"height":12}},{"id":"a4c0cc0d-3128-4887-970b-67a23e633741","block_type":"box","text":"ons incidental to securities transactions (such as","page_number":67,"box":{"x":529,"y":149,"width":357,"height":12}},{"id":"2af9e4a7-8175-4ba7-84dc-435d5fb6c0d4","block_type":"box","text":"clearance, settlement, and custody). BFA believes that","page_number":67,"box":{"x":116,"y":165,"width":398,"height":12}},{"id":"1c566f01-702f-4210-8382-33df6b966422","block_type":"box","text":"t access to independent investment research is","page_number":67,"box":{"x":514,"y":165,"width":343,"height":11}},{"id":"7f0092ad-6d3d-4e7c-bf4d-c4e2e39b9c23","block_type":"box","text":"beneficial to its investment decision-maki","page_number":67,"box":{"x":117,"y":180,"width":296,"height":10}},{"id":"d1a77189-41f2-4cfb-bba3-33499d7ff5ff","block_type":"box","text":"ng processes and, therefore, to the Fund.","page_number":67,"box":{"x":415,"y":180,"width":305,"height":12}},{"id":"d627a613-8c73-4efe-a89c-aef363f0d0e8","block_type":"box","text":"BFA, unless prohibited by applicable law, may participate in client commission arrangements under","page_number":67,"box":{"x":117,"y":211,"width":740,"height":12}},{"id":"daf586fa-7945-4f72-b168-36f59b906363","block_type":"box","text":"which BFA may execute transactions through a broker-dealer and request that the broker-dealer","page_number":67,"box":{"x":116,"y":227,"width":720,"height":12}},{"id":"48ae77b0-df29-45be-bd48-a1b45eadfe59","block_type":"box","text":"allocate a portion of the commissions or commission credits to another firm that provides research to","page_number":67,"box":{"x":116,"y":242,"width":752,"height":12}},{"id":"ed84aa57-d0cf-4986-b8de-d285b7da3751","block_type":"box","text":"BFA. BFA believes that research services obtained through soft dollar or commission sharing","page_number":67,"box":{"x":117,"y":258,"width":696,"height":12}},{"id":"2d796cae-f1c8-4ee4-b502-a11a5ee90003","block_type":"box","text":"arrangements enhance its investment decision-making capabilities, thereby increasing the prospects","page_number":67,"box":{"x":116,"y":273,"width":752,"height":12}},{"id":"7da5a1d6-ad19-4309-81ba-48bdcf6a91dc","block_type":"box","text":"for higher investment returns. BFA will engage only in soft dollar or commission sharing transactions","page_number":67,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"3e954e06-57ff-4ea4-9558-ffe0ad916ea4","block_type":"box","text":"that comply with the requirements of Section 28(e).","page_number":67,"box":{"x":116,"y":304,"width":384,"height":12}},{"id":"0131417e-16da-4361-a23d-a9bc71d8230e","block_type":"box","text":"Under MiFID II, EU investment managers, including BIL, pay for any research out of their own","page_number":67,"box":{"x":117,"y":335,"width":700,"height":12}},{"id":"9e546714-29a1-4ffa-bf15-5926095e8ee7","block_type":"box","text":"resources and not through soft dollars or commission sharing arrangements. BFA regularly evaluates","page_number":67,"box":{"x":117,"y":351,"width":756,"height":12}},{"id":"916c1959-c984-4974-968d-bcb33545c5b4","block_type":"box","text":"the soft dollar products and services utilized, as well as the overall soft dollar and commission sharing","page_number":67,"box":{"x":116,"y":366,"width":760,"height":12}},{"id":"7012ec15-22d4-45db-9497-c4bf16df6246","block_type":"box","text":"arrangements to ensure that trades are executed by firms that are regarded as best able to execute","page_number":67,"box":{"x":116,"y":382,"width":745,"height":12}},{"id":"33508ff4-c0c5-47e0-8bc2-598d748d06b4","block_type":"box","text":"trades for client accounts, while at the same time providing access to the research and other services","page_number":67,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"4c6ab587-a96a-49e0-bd1e-54d55b412c2a","block_type":"box","text":"BFA views as impactful to its trading results.","page_number":67,"box":{"x":117,"y":413,"width":333,"height":12}},{"id":"7dec2385-dfdc-4703-96b9-a763f58089af","block_type":"box","text":"BFA, unless prohibited by applicable law, may utilize soft dollars and related services, including","page_number":67,"box":{"x":117,"y":444,"width":711,"height":12}},{"id":"c782b825-bb7d-43e0-bdb3-5d4db1531517","block_type":"box","text":"research (whether prepared by the broker-dealer or prepared by a third-party and provided to BFA by","page_number":67,"box":{"x":117,"y":459,"width":756,"height":12}},{"id":"593e30ef-4d3e-433c-93e8-b92238659e83","block_type":"box","text":"the broker-dealer) and execution or brokerage services within applicable rules and BFA’s policies to","page_number":67,"box":{"x":116,"y":475,"width":745,"height":12}},{"id":"bf246f4f-9bd2-4958-bc3e-e8ec8e3f2d9f","block_type":"box","text":"the extent that such permitted services do not compromise BFA’s ability to seek to obtain best","page_number":67,"box":{"x":116,"y":490,"width":703,"height":12}},{"id":"920502a7-5854-4f30-aac9-45c9ea9370c8","block_type":"box","text":"execution. In this regard, the portfolio management investment and/or trading teams may consider a","page_number":67,"box":{"x":116,"y":506,"width":749,"height":12}},{"id":"d3c3c814-2722-400e-8482-286fe28ee0f9","block_type":"box","text":"variety of factors, including the degree to which the broker-dealer: (a) provides access to company","page_number":67,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"ba5d54d4-7473-4c6f-9855-8db822a8db35","block_type":"box","text":"management; (b) provides access to their analysts; (c) provides meaningful/insightful research notes","page_number":67,"box":{"x":117,"y":537,"width":751,"height":12}},{"id":"84e6929c-541c-4f56-b135-a5016b75d6f5","block_type":"box","text":"on companies or other potential investments; (d) facilitates calls on which meaningful or insightful ideas","page_number":67,"box":{"x":116,"y":552,"width":772,"height":12}},{"id":"e0711329-1f79-4da3-bcb3-0fc76a27d6fe","block_type":"box","text":"about companies or potential investments are discussed; (e) facilitates conferences at which","page_number":67,"box":{"x":116,"y":568,"width":691,"height":12}},{"id":"50173bcb-cc1e-45bf-88e4-c48549491f26","block_type":"box","text":"meaningful or insightful ideas about companies or potential investments are discussed; or (f) provides","page_number":67,"box":{"x":117,"y":583,"width":758,"height":12}},{"id":"f81514c7-9889-4f03-84cd-0aa4c7c9db82","block_type":"box","text":"research tools such as market data, financial analysis, and other third-party related research and","page_number":67,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"43c9c22b-7cee-4a31-8ec3-6c21a20c19b2","block_type":"box","text":"brokerage tools that aid in the investment process.","page_number":67,"box":{"x":117,"y":614,"width":380,"height":12}},{"id":"31db342f-416c-43b6-85f7-391431e7d90c","block_type":"box","text":"Research-oriented services for which BFA, unless prohibited by applicable law, might pay with Fund","page_number":67,"box":{"x":117,"y":645,"width":747,"height":12}},{"id":"3f2070b5-d5dd-4ade-80cb-07427a15e681","block_type":"box","text":"commissions may be in written form or through direct contact with individuals and may include","page_number":67,"box":{"x":116,"y":661,"width":698,"height":12}},{"id":"108ce797-c5bb-4601-a157-a6fa41e3b156","block_type":"box","text":"information as to particular companies or industries and securities or groups of securities, as well as","page_number":67,"box":{"x":117,"y":676,"width":741,"height":12}},{"id":"2e319a98-9427-4ac8-a9fa-16e4ba2dcb99","block_type":"box","text":"market, economic, or institutional advice and statistical information, political developments and","page_number":67,"box":{"x":117,"y":692,"width":699,"height":12}},{"id":"85e85235-0f52-41eb-b04d-cea2537ee400","block_type":"box","text":"technical market information that assists in the valuation of investments. Except as noted immediately","page_number":67,"box":{"x":116,"y":707,"width":755,"height":12}},{"id":"feb190d6-c3e0-4976-8f3f-c72f5a3b846f","block_type":"box","text":"below, research services furnished by brokers may be used in servicing some or all client accounts","page_number":67,"box":{"x":117,"y":723,"width":733,"height":12}},{"id":"b1158532-7d48-4a50-8d15-f05fbc7acdaf","block_type":"box","text":"and not all services may be used in connection with the fund or account that paid commissions to the","page_number":67,"box":{"x":116,"y":738,"width":750,"height":12}},{"id":"5634f581-691a-4c32-8b62-95f6a7035741","block_type":"box","text":"broker providing such services. In some cases, research information received from brokers by mutual","page_number":67,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"0d1a6bd7-49d4-4304-b754-031e3f900f60","block_type":"box","text":"fund management personnel, or personnel principally responsible for BFA’s individually managed","page_number":67,"box":{"x":116,"y":769,"width":721,"height":12}},{"id":"0b09f5cd-a590-423c-882b-6959bad07b0f","block_type":"box","text":"portfolios, is not necessarily shared by and between such personnel. Any investment advisory or other","page_number":67,"box":{"x":117,"y":785,"width":759,"height":12}},{"id":"5f3fdde0-79bd-46cf-af9a-51dc1dafcff6","block_type":"box","text":"fees paid by the Fund to BFA are not reduced as a result of BFA’s receipt of research services. In","page_number":67,"box":{"x":116,"y":800,"width":724,"height":12}},{"id":"b6ff047f-fdcc-4593-852d-3de0baed2600","block_type":"box","text":"some cases, BFA may receive a service from a broker that has both a “research” and a “non-research”","page_number":67,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"764ab944-d47e-42ae-bc50-b94c6a90dab5","block_type":"box","text":"use. When this occurs BFA makes a good faith allocation, under all the circumstances, between the","page_number":67,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"be10f56c-6338-438a-8aa9-3082a4a9c87b","block_type":"box","text":"research and non-research uses of the service. The percentage of the service that is used for research","page_number":67,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"51544d12-1cb4-46be-a982-68b0df27976e","block_type":"box","text":"purposes may be paid for with client commissions, while BFA will use its own funds to pay for the","page_number":67,"box":{"x":117,"y":862,"width":725,"height":12}},{"id":"f6da0c23-e6c9-4178-b221-60fabf258fd6","block_type":"box","text":"percentage of the service that is used for non-research purposes. In making this good faith allocation,","page_number":67,"box":{"x":117,"y":878,"width":758,"height":12}},{"id":"d132d443-5c1f-4412-ac60-734d9fbd3908","block_type":"box","text":"58","page_number":67,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6e3eca4d-47a8-47c7-a319-8592bb044b48","block_type":"box","text":"NM1026U-6004408-67/267","page_number":67,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"50f9b794-96e8-4714-9ac7-b506de482b60","block_type":"box","text":"BFA faces a potential conflict of interest, but BFA believes that its allocation procedures are reasonably","page_number":68,"box":{"x":117,"y":87,"width":771,"height":12}},{"id":"55c0194e-8eeb-403c-a7a7-ca1bdb8e0412","block_type":"box","text":"designed to ensure that it appropriately allocates the anticipated use of such services to their research","page_number":68,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"e60d4b03-4dbc-42f2-a601-7c88d4926ce2","block_type":"box","text":"and non-research uses.","page_number":68,"box":{"x":116,"y":118,"width":181,"height":10}},{"id":"0145dae4-8094-4092-af22-65bb558aa8a0","block_type":"box","text":"Under MiFID II, investment managers in the EU, including BIL, are not able to use soft dollars to pay","page_number":68,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"f58fb0ba-fc49-4830-881d-6495176dc734","block_type":"box","text":"for research from brokers. Investment managers in the EU are required to either pay for research out","page_number":68,"box":{"x":116,"y":165,"width":754,"height":12}},{"id":"262284ea-197c-4fac-a63c-7ff8222e314f","block_type":"box","text":"of their own profit and loss or agree with clients to have research costs paid by clients through","page_number":68,"box":{"x":116,"y":180,"width":702,"height":12}},{"id":"6acafd77-df85-4563-bdfd-4f20f4f84dc9","block_type":"box","text":"research payment accounts that are directly funded or funded by a specific client research charge","page_number":68,"box":{"x":117,"y":196,"width":730,"height":12}},{"id":"8baed9f4-381e-4d2b-a68d-4648c4d9f80b","block_type":"box","text":"collected alongside execution commissions, provided that the payments for research are unbundled","page_number":68,"box":{"x":116,"y":211,"width":745,"height":12}},{"id":"bfb7ac90-e07f-4f78-ba23-451a7428ab3a","block_type":"box","text":"from the payments for execution. BIL will pay for any research out of its own resources and not through","page_number":68,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"28171aef-3c20-49c2-8326-22a47a8706b3","block_type":"box","text":"soft dollars or commission sharing arrangements.","page_number":68,"box":{"x":116,"y":242,"width":372,"height":12}},{"id":"ab0a16de-24a3-43e7-8bb4-285b93055eac","block_type":"box","text":"Payments of commissions to brokers who are affiliated persons of the Fund will be made in","page_number":68,"box":{"x":117,"y":273,"width":681,"height":12}},{"id":"e435b056-5094-475f-a0f6-b05a8bcff8b4","block_type":"box","text":"accordance with Rule 17e-1 under the Investment Company Act.","page_number":68,"box":{"x":116,"y":289,"width":486,"height":12}},{"id":"4bf77b31-4a4b-46bb-80e5-423a77a6a41c","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":68,"box":{"x":117,"y":320,"width":747,"height":12}},{"id":"a70fc56c-b4c0-4593-9e66-afe9e94f5cf7","block_type":"box","text":"situations, the broker may be a member of the selling group that will, in addition to selling securities,","page_number":68,"box":{"x":116,"y":335,"width":746,"height":12}},{"id":"966bab93-4003-494d-839b-c4d0bf65c497","block_type":"box","text":"provide BFA with research services. FINRA has adopted rules expressly permitting these types of","page_number":68,"box":{"x":117,"y":351,"width":729,"height":12}},{"id":"cf3fac91-be28-4132-ac85-f5bd3cd6777d","block_type":"box","text":"arrangements under certain circumstances. Generally, the broker will provide research “credits” in","page_number":68,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"2b7d3e21-1e80-438a-aa2b-37091a91f450","block_type":"box","text":"these situations at a rate that is higher than that available for typical secondary market transactions.","page_number":68,"box":{"x":116,"y":382,"width":746,"height":12}},{"id":"b945ce50-d35d-4d76-9797-337d90a4e0ec","block_type":"box","text":"These arrangements may not fall within the safe harbor of Section 28(e).","page_number":68,"box":{"x":116,"y":397,"width":544,"height":12}},{"id":"24e0ff2b-ffdd-4bc6-a00f-d567498d1bd0","block_type":"box","text":"The Fund anticipates that its brokerage transactions involving foreign securities generally will be","page_number":68,"box":{"x":116,"y":428,"width":718,"height":12}},{"id":"dac7890d-6086-4504-83bf-237cd7ab7090","block_type":"box","text":"conducted primarily on the principal stock exchanges of the applicable country. Foreign equity","page_number":68,"box":{"x":116,"y":444,"width":702,"height":12}},{"id":"c44469e2-984b-47de-92a2-17e93cb2ba86","block_type":"box","text":"securities may be held by the Fund in the form of depositary receipts, or other securities convertible","page_number":68,"box":{"x":116,"y":459,"width":744,"height":12}},{"id":"6ec57af7-88da-4ba8-b552-3adfa52e30f1","block_type":"box","text":"into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in OTC","page_number":68,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"10a05c98-da25-4fcb-acce-4404e160a5b8","block_type":"box","text":"markets in the United States or Europe, as the case may be. American Depositary Receipts, like other","page_number":68,"box":{"x":117,"y":490,"width":762,"height":12}},{"id":"5fa2a685-a4a8-44c0-878e-6f321c41aa4e","block_type":"box","text":"securities traded in the United States, will be subject to negotiated commission rates.","page_number":68,"box":{"x":116,"y":506,"width":636,"height":12}},{"id":"a822b668-e18a-471e-a98d-61006f465142","block_type":"box","text":"The Fund may invest in certain securities traded in the OTC market and intends to deal directly with","page_number":68,"box":{"x":116,"y":537,"width":745,"height":12}},{"id":"ca822dc5-76c1-420d-83e1-93e9acb05747","block_type":"box","text":"the dealers who make a market in the particular securities, except in those circumstances in which","page_number":68,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"05c7bbfb-8fc0-4ced-8492-ee281e49d48a","block_type":"box","text":"better prices and execution are available elsewhere. Under the Investment Company Act, persons","page_number":68,"box":{"x":117,"y":568,"width":732,"height":12}},{"id":"cfb3f2d1-626f-4c37-a32e-71e5ac101da5","block_type":"box","text":"affiliated with the Fund and persons who are affiliated with such affiliated persons are prohibited from","page_number":68,"box":{"x":116,"y":583,"width":755,"height":12}},{"id":"b4e4491b-81bd-460f-b3b9-3a3a45309a40","block_type":"box","text":"dealing with the Fund as principal in the purchase and sale of securities unless a permissive order","page_number":68,"box":{"x":116,"y":599,"width":733,"height":12}},{"id":"df4ca2ae-5cbe-4649-8a1d-309137eb17af","block_type":"box","text":"allowing such transactions is obtained from the Commission. Since transactions in the OTC market","page_number":68,"box":{"x":116,"y":614,"width":740,"height":12}},{"id":"4e1a0a24-4f67-431b-9069-bc21ba5d53d9","block_type":"box","text":"usually involve transactions with the dealers acting as principal for their own accounts, the Fund will","page_number":68,"box":{"x":117,"y":630,"width":743,"height":12}},{"id":"f807265b-1e5c-4139-8399-dab39180a089","block_type":"box","text":"not deal with affiliated persons in connection with such transactions. However, an affiliated person of","page_number":68,"box":{"x":117,"y":645,"width":750,"height":12}},{"id":"f0a22064-ac52-49ab-a6ba-7bbbff342a1d","block_type":"box","text":"the Fund may serve as its broker in OTC transactions conducted on an agency basis provided that,","page_number":68,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"db48cb43-77a3-44b1-b6b2-9707937bb26f","block_type":"box","text":"among other things, the fee or commission received by such affiliated broker is reasonable and fair","page_number":68,"box":{"x":116,"y":676,"width":734,"height":12}},{"id":"af4078bb-9fdf-4aad-a0cf-bff5f82b4c77","block_type":"box","text":"compared to the fee or commission received by non-affiliated brokers in connection with comparable","page_number":68,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"6fb2d1ca-3db0-4fb5-b3ee-819ea8735ec8","block_type":"box","text":"transactions.","page_number":68,"box":{"x":116,"y":707,"width":94,"height":10}},{"id":"34624435-0a83-4a91-9cbb-d20713570855","block_type":"box","text":"OTC issues, including most fixed-income securities such as corporate debt and U.S. Government","page_number":68,"box":{"x":116,"y":738,"width":724,"height":12}},{"id":"60e7df79-7b35-4464-a8c2-727fb2b26ce3","block_type":"box","text":"securities, are normally traded on a “net” basis without a stated commission, through dealers acting for","page_number":68,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"03def5a1-d953-4a4e-af2f-84585e896211","block_type":"box","text":"their own account and not as brokers. The Fund will primarily engage in transactions with these","page_number":68,"box":{"x":116,"y":769,"width":707,"height":12}},{"id":"9aecd76b-0119-4b48-83a4-c31b7b50cffb","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":68,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"71c9d193-17f0-41ce-b4fd-b50b0e7842e6","block_type":"box","text":"broker. Prices paid to a dealer with respect to both foreign and domestic securities will generally","page_number":68,"box":{"x":117,"y":800,"width":712,"height":12}},{"id":"e2bed728-52cb-4068-aa9e-6d090283cec3","block_type":"box","text":"include a “spread,” which is the difference between the prices at which the dealer is willing to purchase","page_number":68,"box":{"x":117,"y":816,"width":761,"height":12}},{"id":"15df5847-0493-4baa-b791-b6bf9e200a5e","block_type":"box","text":"and sell the specific security at the time, and includes the dealer’s normal profit.","page_number":68,"box":{"x":116,"y":831,"width":596,"height":12}},{"id":"6bc9111d-be40-4d00-8a9d-1780ba0618f6","block_type":"box","text":"Purchases of money market instruments by the Fund are made from dealers, underwriters and issuers.","page_number":68,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"585b5f0a-c700-4ffe-9624-c8636a7a14e7","block_type":"box","text":"The Fund does not currently expect to incur any brokerage commission expense on such transactions","page_number":68,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"cbe64ea9-c355-45d7-8efe-239455eea9da","block_type":"box","text":"59","page_number":68,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"632b0b13-e385-44d7-b8f2-067f23951893","block_type":"box","text":"NM1026U-6004408-68/267","page_number":68,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"dcfeec0a-05cc-438f-9375-463002711a93","block_type":"box","text":"because money market instruments are generally traded on a “net” basis with dealers acting as","page_number":69,"box":{"x":117,"y":87,"width":712,"height":12}},{"id":"9d938b4f-74b3-474e-b78f-eff63794fb26","block_type":"box","text":"principal for their own accounts without a stated commission. The price of the security, however,","page_number":69,"box":{"x":117,"y":102,"width":718,"height":13}},{"id":"245ba0e1-b49b-4a9d-8098-c86f7a5c0575","block_type":"box","text":"usually includes a profit to the dealer.","page_number":69,"box":{"x":117,"y":118,"width":281,"height":12}},{"id":"e878ba77-b25c-4a96-9c59-5692b91dd618","block_type":"box","text":"Securities purchased in underwritten offerings include a fixed amount of compensation to the","page_number":69,"box":{"x":116,"y":149,"width":694,"height":12}},{"id":"3225feb5-9984-4eee-b6b0-af838bcf49a7","block_type":"box","text":"underwriter, generally referred to as the underwriter’s concession or discount. When offered securities","page_number":69,"box":{"x":117,"y":165,"width":761,"height":12}},{"id":"f37d42ab-28df-4f43-8acd-d28779f2e053","block_type":"box","text":"are purchased or sold directly from or to an issuer, no commissions or discounts are paid except where","page_number":69,"box":{"x":116,"y":180,"width":771,"height":12}},{"id":"d5646354-df68-4b8b-b993-17b2c8b5e940","block_type":"box","text":"required by local markets.","page_number":69,"box":{"x":117,"y":196,"width":196,"height":12}},{"id":"f55a8cdc-fd80-4c1e-ac3d-a14984ce8a8a","block_type":"box","text":"BFA or the Sub-Adviser may seek to obtain an undertaking from issuers of commercial paper or","page_number":69,"box":{"x":117,"y":227,"width":716,"height":12}},{"id":"04ae4f25-a414-4d85-8e90-9b1215836a4e","block_type":"box","text":"dealers selling commercial paper to consider the repurchase of such securities from the Fund prior to","page_number":69,"box":{"x":116,"y":242,"width":756,"height":12}},{"id":"bda5d128-63fc-45e4-81c4-e0ebb32d8742","block_type":"box","text":"maturity at their original cost plus interest (sometimes adjusted to reflect the actual maturity of the","page_number":69,"box":{"x":117,"y":258,"width":728,"height":12}},{"id":"750735aa-08bc-492b-92cb-491057402235","block_type":"box","text":"securities), if it believes that the Fund’s anticipated need for liquidity makes such action desirable. Any","page_number":69,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"0ef3404a-5cfb-4ae5-82ed-419b529ccbfb","block_type":"box","text":"such repurchase prior to maturity reduces the possibility that the Fund would incur a capital loss in","page_number":69,"box":{"x":116,"y":289,"width":734,"height":12}},{"id":"d5862b40-7a9f-43a6-b037-ced70e0666f7","block_type":"box","text":"liquidating commercial paper, especially if interest rates have risen since acquisition of such","page_number":69,"box":{"x":117,"y":304,"width":685,"height":12}},{"id":"59865516-b762-4c96-b8b6-2ffd0f49323f","block_type":"box","text":"commercial paper.","page_number":69,"box":{"x":116,"y":320,"width":143,"height":12}},{"id":"4529d6d6-12b1-499e-ae47-bfb603b53108","block_type":"box","text":"Investment decisions for the Fund and for other investment accounts managed by BFA and the other","page_number":69,"box":{"x":117,"y":351,"width":753,"height":12}},{"id":"18274f3b-0d27-4b01-924e-244a6ef37a3b","block_type":"box","text":"Affiliates are made independently of each other in light of differing conditions. BFA allocates","page_number":69,"box":{"x":116,"y":366,"width":686,"height":12}},{"id":"7c953844-d944-4cae-82ee-5237d30dd01b","block_type":"box","text":"investments among client accounts in a fair and equitable manner over time. A variety of factors will be","page_number":69,"box":{"x":117,"y":382,"width":767,"height":12}},{"id":"7b7bcf07-6562-4e63-a21c-ee92c9413b8f","block_type":"box","text":"considered in making such allocations. These factors include: (i) investment objectives or strategies for","page_number":69,"box":{"x":116,"y":397,"width":769,"height":12}},{"id":"d05a8453-73aa-41a4-bb4a-822d9911a8c7","block_type":"box","text":"particular accounts, including sector, industry, country or region and capitalization weightings; (ii) tax","page_number":69,"box":{"x":117,"y":413,"width":749,"height":12}},{"id":"dfbc4428-e99b-4fc1-a58d-1b7fb284298e","block_type":"box","text":"considerations of an account; (iii) risk or investment concentration parameters for an account;","page_number":69,"box":{"x":116,"y":428,"width":699,"height":12}},{"id":"40d2eb32-4abd-4af5-b8e7-bcdaf0c3ea83","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":69,"box":{"x":117,"y":444,"width":737,"height":12}},{"id":"e51d879c-2749-48b2-b4e1-39f42ac71d9d","block_type":"box","text":"availability and liquidity requirements for accounts; (vii) regulatory restrictions; (viii) minimum","page_number":69,"box":{"x":116,"y":459,"width":690,"height":12}},{"id":"e7302a61-87be-4e8b-8526-0be878a41a1b","block_type":"box","text":"investment size of an account; (ix) relative size of account; and (x) such other factors as may be","page_number":69,"box":{"x":117,"y":475,"width":717,"height":12}},{"id":"8217cbc3-0f23-448a-bbda-64619c812bd6","block_type":"box","text":"approved by BlackRock’s general counsel. Moreover, investments may not be allocated to one client","page_number":69,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"6aa4b9c6-0b1d-4b2b-be2f-65d284c15fb2","block_type":"box","text":"account over another based on any of the following considerations: (i) to favor one client account at the","page_number":69,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"b6174120-eb10-4c70-9757-9d816d8c7a10","block_type":"box","text":"expense of another; (ii) to generate higher fees paid by one client account over another or to produce","page_number":69,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"d8db42af-15a1-450e-ac87-3630223047bd","block_type":"box","text":"greater performance compensation to BlackRock; (iii) to develop or enhance a relationship with a client","page_number":69,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"4b33a20c-2942-4e13-aaa6-34592e470fd2","block_type":"box","text":"or prospective client; (iv) to compensate a client for past services or benefits rendered to BlackRock or","page_number":69,"box":{"x":116,"y":552,"width":765,"height":12}},{"id":"518f40c1-ea58-4983-915d-476f9a4ec6e4","block_type":"box","text":"to induce future services or benefits to be rendered to BlackRock; or (v) to manage or equalize","page_number":69,"box":{"x":116,"y":568,"width":707,"height":12}},{"id":"8ce3cebd-28cc-401f-8465-2a382dc87eec","block_type":"box","text":"investment performance among different client accounts.","page_number":69,"box":{"x":117,"y":583,"width":426,"height":12}},{"id":"7aaeb538-bb5a-499f-bcea-ba5439ac26c9","block_type":"box","text":"Equity securities will generally be allocated among client accounts within the same investment","page_number":69,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"4e512b49-01e8-4f99-8963-63c9cbe63fd2","block_type":"box","text":"mandate on a pro rata basis. All allocations of equity securities will be subject, where relevant, to share","page_number":69,"box":{"x":117,"y":630,"width":769,"height":12}},{"id":"0a8683d1-bf62-48cf-9479-3a4f5ffa0f14","block_type":"box","text":"minimums established for accounts and compliance constraints.","page_number":69,"box":{"x":117,"y":645,"width":479,"height":12}},{"id":"9fbe8235-5ea8-40b6-92c0-87b87b2c0586","block_type":"box","text":"Initial public offerings (“IPOs”) of securities may be over-subscribed and subsequently trade at a","page_number":69,"box":{"x":117,"y":676,"width":711,"height":12}},{"id":"fbed02dd-42e9-405f-b008-acc637586549","block_type":"box","text":"premium in the secondary market. In these situations, the supply of securities available for client","page_number":69,"box":{"x":117,"y":692,"width":714,"height":12}},{"id":"a3b5587f-af93-4706-a7c5-0536f191e2fc","block_type":"box","text":"accounts is often less than the amount of securities the accounts would otherwise take. In order to","page_number":69,"box":{"x":116,"y":707,"width":729,"height":10}},{"id":"a145a5e2-84a4-4952-9130-51cb19f71dfd","block_type":"box","text":"allocate these investments fairly and equitably among client accounts over time, each portfolio","page_number":69,"box":{"x":116,"y":723,"width":699,"height":12}},{"id":"0a192e5c-e922-4357-8572-70bb5604ff81","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":69,"box":{"x":117,"y":738,"width":762,"height":12}},{"id":"e060c688-68a9-49a6-aee5-15db5b23b4bc","block_type":"box","text":"level of interest in a particular offering with respect to eligible client accounts for which that team is","page_number":69,"box":{"x":117,"y":754,"width":728,"height":12}},{"id":"52308f21-c0f2-4ae1-9df6-70e6e72fbfcf","block_type":"box","text":"responsible. IPOs of U.S. equity securities will be identified as eligible for particular client accounts that","page_number":69,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"acc4d6c3-fb3a-46b2-b3c4-7387554145c7","block_type":"box","text":"are managed by portfolio teams who have indicated interest in the offering based on market","page_number":69,"box":{"x":116,"y":785,"width":682,"height":12}},{"id":"3d03ccaf-5509-4ee0-b271-4acef8da6625","block_type":"box","text":"capitalization of the issuer of the security and the investment mandate of the client account and in the","page_number":69,"box":{"x":116,"y":800,"width":753,"height":12}},{"id":"d708c435-2c45-4deb-9298-be881438f29c","block_type":"box","text":"case of international equity securities, the country where the offering is taking place and the investment","page_number":69,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"5d6288fc-41c7-476e-b0c2-5bd2faf5fc95","block_type":"box","text":"mandate of the client account. Generally, shares received during the IPO will be allocated among","page_number":69,"box":{"x":117,"y":831,"width":726,"height":12}},{"id":"2c6d8d14-1a4c-451b-9471-0924b601ec51","block_type":"box","text":"participating client accounts within each investment mandate on a pro rata basis. In situations where","page_number":69,"box":{"x":117,"y":847,"width":749,"height":12}},{"id":"6a0f2f92-de6c-4855-95e0-8dd94538c7d8","block_type":"box","text":"supply is too limited to be allocated among all accounts for which the investment is eligible, portfolio","page_number":69,"box":{"x":116,"y":862,"width":744,"height":12}},{"id":"f57cde4f-477b-4af8-bdcf-d2339e47b60f","block_type":"box","text":"managers may rotate such investment opportunities among one or more accounts so long as the","page_number":69,"box":{"x":117,"y":878,"width":723,"height":12}},{"id":"e4f7e2af-e280-488b-aad2-b3243fb35ff4","block_type":"box","text":"60","page_number":69,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"459327d7-3a25-458b-be8f-70d30bd71d3d","block_type":"box","text":"NM1026U-6004408-69/267","page_number":69,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e6af93bd-4165-4073-9fd9-b1e1bd5fa589","block_type":"box","text":"rotation system provides for fair access for all client accounts over time. Other allocation","page_number":70,"box":{"x":117,"y":87,"width":659,"height":12}},{"id":"ced292b5-6b16-4d47-a413-1ee1b6731330","block_type":"box","text":"methodologies that are considered by BFA to be fair and equitable to clients may be used as well.","page_number":70,"box":{"x":117,"y":102,"width":730,"height":13}},{"id":"09db12d7-d912-446e-8304-1b58155179c7","block_type":"box","text":"Because different accounts may have differing investment objectives and policies, BFA may buy and","page_number":70,"box":{"x":117,"y":129,"width":751,"height":12}},{"id":"5ba14ca2-95d7-4efd-a07d-909e46351cdf","block_type":"box","text":"sell the same securities at the same time for different clients based on the particular investment","page_number":70,"box":{"x":116,"y":145,"width":713,"height":12}},{"id":"d58caff5-5790-4173-8d48-9b834af5173c","block_type":"box","text":"objective, guidelines and strategies of those accounts. For example, BFA may decide that it may be","page_number":70,"box":{"x":116,"y":160,"width":745,"height":12}},{"id":"cbd835ee-e685-4edd-8d2b-6f7a8f2341b5","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":70,"box":{"x":116,"y":176,"width":734,"height":12}},{"id":"4452889d-1d29-4898-951c-7e357f21a730","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":70,"box":{"x":116,"y":191,"width":764,"height":12}},{"id":"4d0e3ae5-7edb-48b5-8796-48203e8e5007","block_type":"box","text":"during the same period increase the demand for securities being purchased or the supply of securities","page_number":70,"box":{"x":116,"y":207,"width":763,"height":12}},{"id":"90b37719-850c-4a61-8dfd-d8442bacd5ea","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":70,"box":{"x":117,"y":222,"width":763,"height":12}},{"id":"3ed70b04-a178-4895-9cd6-39ca8654188c","block_type":"box","text":"behalf of one or more of its clients may decrease the market price of such security, adversely","page_number":70,"box":{"x":117,"y":238,"width":695,"height":12}},{"id":"e7a6539e-1f35-4628-a547-287118f907bb","block_type":"box","text":"impacting other BlackRock clients that still hold the security. If purchases or sales of securities arise for","page_number":70,"box":{"x":117,"y":253,"width":769,"height":12}},{"id":"b937dd1e-913c-4471-b26d-087ac30b65d1","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":70,"box":{"x":116,"y":269,"width":763,"height":9}},{"id":"c1ea3107-1a19-4795-96c1-10e1ecb971c0","block_type":"box","text":"BFA or another Affiliate act as investment manager, transactions in such securities will be made,","page_number":70,"box":{"x":117,"y":284,"width":721,"height":12}},{"id":"bf9fce99-940b-4006-ae37-f9a05d9e1823","block_type":"box","text":"insofar as feasible, for the respective funds and clients in a manner deemed equitable to all.","page_number":70,"box":{"x":117,"y":300,"width":686,"height":12}},{"id":"bc02d0e6-ff80-42ec-805e-9481a3d045c2","block_type":"box","text":"In certain instances, BFA may find it efficient for purposes of seeking to obtain best execution, to","page_number":70,"box":{"x":117,"y":326,"width":720,"height":13}},{"id":"06383008-2244-4c3e-b6e9-c035739e7f68","block_type":"box","text":"aggregate certain contemporaneous purchases or sale orders of its advisory accounts and advisory","page_number":70,"box":{"x":116,"y":342,"width":745,"height":12}},{"id":"5cfd4f73-d29b-4a0c-9793-85d93fc6b112","block_type":"box","text":"accounts of affiliates. In general, all contemporaneous trades for client accounts under management by","page_number":70,"box":{"x":116,"y":357,"width":772,"height":13}},{"id":"f851c2fa-ecd1-407e-bfca-355bc0bad633","block_type":"box","text":"the same portfolio manager or investment team will be aggregated in a single order if the trader","page_number":70,"box":{"x":116,"y":373,"width":713,"height":12}},{"id":"151be9c2-422a-4f2e-a7bf-58cd193abf6e","block_type":"box","text":"believes the aggregated trade would provide each client with an opportunity to achieve a more","page_number":70,"box":{"x":117,"y":389,"width":704,"height":12}},{"id":"d2760c3d-ec93-48ec-abfb-df227b48ffb0","block_type":"box","text":"favorable execution at a potentially lower execution cost. The costs associated with an aggregated","page_number":70,"box":{"x":116,"y":404,"width":736,"height":12}},{"id":"96a6a6dd-b0c7-4c13-8e4f-b4f1c98401a5","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":70,"box":{"x":116,"y":419,"width":735,"height":13}},{"id":"5a9adda7-a7c3-4248-bab1-9256e77072f7","block_type":"box","text":"particular portfolio manager or management team is filled at several different prices through multiple","page_number":70,"box":{"x":117,"y":435,"width":746,"height":12}},{"id":"857bc2a0-e0a8-4e3c-8f87-4719f3ce12e5","block_type":"box","text":"trades, all accounts participating in the order will receive the average price except in the case of certain","page_number":70,"box":{"x":116,"y":450,"width":771,"height":13}},{"id":"2e7fa926-2e48-43f6-ac66-85139747e10e","block_type":"box","text":"international markets where average pricing is not permitted. While in some cases this practice could","page_number":70,"box":{"x":117,"y":466,"width":753,"height":12}},{"id":"4abd34ff-dc69-4d74-b8de-17020f33562b","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":70,"box":{"x":117,"y":481,"width":736,"height":13}},{"id":"8f5c3e5f-8093-4c45-a51b-8c5bd53f8ead","block_type":"box","text":"other cases it could be beneficial to the Fund. Transactions effected by BFA or the other Affiliates on","page_number":70,"box":{"x":116,"y":497,"width":751,"height":12}},{"id":"732b8ef7-d28f-4b47-984a-c095431ca928","block_type":"box","text":"behalf of more than one of its clients during the same period may increase the demand for securities","page_number":70,"box":{"x":117,"y":512,"width":749,"height":13}},{"id":"8623cc86-c4be-42f6-872f-0f083600c965","block_type":"box","text":"being purchased or the supply of securities being sold, causing an adverse effect on price. The trader","page_number":70,"box":{"x":117,"y":528,"width":758,"height":12}},{"id":"f972068a-32fc-4622-b51c-46b538d8d5c9","block_type":"box","text":"will give the aggregated order to the broker-dealer that the trader has identified as being able to","page_number":70,"box":{"x":116,"y":543,"width":714,"height":13}},{"id":"143f4f4b-dc55-4f22-94e4-cdf105a0c258","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":70,"box":{"x":117,"y":559,"width":767,"height":12}},{"id":"9e591d99-ac6a-4365-98e4-b6c047ae843b","block_type":"box","text":"reasonable amount of time of the order receipt and aggregated orders will be kept aggregated only","page_number":70,"box":{"x":117,"y":574,"width":737,"height":13}},{"id":"faa44f7f-488a-4230-bcab-d052d5b80328","block_type":"box","text":"long enough to execute the order.","page_number":70,"box":{"x":117,"y":590,"width":255,"height":12}},{"id":"9da7d2ce-2e37-4d0b-85b7-a8a33e4f01df","block_type":"box","text":"The Fund will not purchase securities during the existence of any underwriting or selling group relating","page_number":70,"box":{"x":116,"y":617,"width":764,"height":12}},{"id":"52ca64fc-177b-420c-b9b8-d4e96a35f039","block_type":"box","text":"to such securities of which BFA, BRIL or any affiliated person (as defined in the Investment Company","page_number":70,"box":{"x":116,"y":632,"width":758,"height":12}},{"id":"0baac056-ec03-46af-9e0d-c19cd9c05bd2","block_type":"box","text":"Act) thereof is a member except pursuant to procedures adopted by the Board in accordance with","page_number":70,"box":{"x":116,"y":648,"width":731,"height":12}},{"id":"58bb61ac-9ebb-4c2e-b6d3-9b294a331f4b","block_type":"box","text":"Rule 10f-3 under the Investment Company Act. In no instance will portfolio securities be purchased","page_number":70,"box":{"x":117,"y":663,"width":733,"height":12}},{"id":"45c54083-a686-439a-92a6-39355f7e121f","block_type":"box","text":"from or sold to BFA, BRIL or any affiliated person of the foregoing entities except as permitted by","page_number":70,"box":{"x":116,"y":679,"width":720,"height":12}},{"id":"bd7047f3-3890-46b1-9f74-45f1806a4252","block_type":"box","text":"Commission exemptive order or by applicable law.","page_number":70,"box":{"x":117,"y":694,"width":372,"height":12}},{"id":"fc7187c2-c639-4ca4-8df5-757c83bb84fa","block_type":"box","text":"The table below sets forth the brokerage commissions paid by the Fund for the fiscal periods noted.","page_number":70,"box":{"x":116,"y":721,"width":738,"height":12}},{"id":"6c18d585-03b4-4208-bef9-fa5990570895","block_type":"box","text":"Prior to November 15, 2024, the date of the Reorganization, brokerage commissions were paid by the","page_number":70,"box":{"x":117,"y":736,"width":755,"height":12}},{"id":"62f6c0cf-92da-43df-8b80-fdcb49e392cf","block_type":"box","text":"Predecessor Trust, on behalf of the Predecessor Fund.","page_number":70,"box":{"x":117,"y":752,"width":407,"height":11}},{"id":"385233d6-912c-44a9-8fae-b43645188beb","block_type":"box","text":"Fund","page_number":70,"box":{"x":192,"y":806,"width":31,"height":8}},{"id":"f514b08f-396e-4747-a9cd-4f7d1edc4b0e","block_type":"box","text":"Inception Date","page_number":70,"box":{"x":162,"y":817,"width":91,"height":9}},{"id":"357e7516-a94a-4ef5-a941-64f2ab13cb6f","block_type":"box","text":"Brokerage","page_number":70,"box":{"x":375,"y":786,"width":66,"height":9}},{"id":"ed94df25-b4cf-4d9a-a8ca-43741767e55f","block_type":"box","text":"Commissions Paid","page_number":70,"box":{"x":348,"y":796,"width":119,"height":8}},{"id":"564c3bb4-9f07-42b2-8f66-b455b380f6ed","block_type":"box","text":"During the Fiscal","page_number":70,"box":{"x":354,"y":806,"width":107,"height":10}},{"id":"af6b91bd-9787-4d8f-a7f5-e2282ef56874","block_type":"box","text":"Year Ended April 30, 2026","page_number":70,"box":{"x":325,"y":817,"width":165,"height":9}},{"id":"e68e609d-715b-4870-923f-f2dd7ca228d5","block_type":"box","text":"Brokerage Commissions","page_number":70,"box":{"x":517,"y":786,"width":157,"height":9}},{"id":"41dc11b4-5eb5-45ae-9c19-066ec6df60ad","block_type":"box","text":"Paid During the Fiscal","page_number":70,"box":{"x":526,"y":796,"width":139,"height":10}},{"id":"011d6044-02ab-40e1-a7eb-e9dc2519174a","block_type":"box","text":"Period June 1, 2024 to","page_number":70,"box":{"x":525,"y":806,"width":141,"height":9}},{"id":"d8a88c08-8351-429b-b562-1905a464e752","block_type":"box","text":"April 30, 2025","page_number":70,"box":{"x":552,"y":817,"width":86,"height":9}},{"id":"fcefeee7-4e07-4528-a961-95a57ac9e257","block_type":"box","text":"Brokerage","page_number":70,"box":{"x":755,"y":775,"width":65,"height":10}},{"id":"00e31ff2-3aad-4383-be83-49386c87c7a7","block_type":"box","text":"Commissions Paid","page_number":70,"box":{"x":728,"y":786,"width":119,"height":7}},{"id":"c932b441-45b7-4b05-bc95-9f52d3a265e3","block_type":"box","text":"During the Fiscal","page_number":70,"box":{"x":734,"y":796,"width":107,"height":10}},{"id":"fe5d1bf5-6a36-41c6-b612-92a4da53a0d8","block_type":"box","text":"Year Ended May 31,","page_number":70,"box":{"x":724,"y":806,"width":126,"height":10}},{"id":"efcdabc0-5c7f-4914-ab2f-9c1fc864a3c2","block_type":"box","text":"2024","page_number":70,"box":{"x":773,"y":817,"width":29,"height":7}},{"id":"07d0a8b4-ed1b-40c5-85ac-1e390b6e94c2","block_type":"box","text":"09/26/97 $379,974 $276,074 $321,513","page_number":70,"box":{"x":175,"y":835,"width":652,"height":12}},{"id":"c3c31f0b-101a-430c-b2cf-7546450d3551","block_type":"box","text":"The Fund did not pay any brokerage commissions to BRIL, an affiliate of BFA, or to any other broker","page_number":70,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"8d7fb945-e7bc-4d3a-b0d7-9352573a8dd6","block_type":"box","text":"dealer that is part of the BlackRock group of","page_number":70,"box":{"x":116,"y":878,"width":332,"height":12}},{"id":"1c97f91d-06c8-4570-97b8-1482a42ea571","block_type":"box","text":"companies for the year ended April 30, 2026.","page_number":70,"box":{"x":449,"y":878,"width":340,"height":12}},{"id":"8d080afc-73fb-436a-84b2-d8774f3fdf07","block_type":"box","text":"61","page_number":70,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"2f2f29da-0b85-4b6b-8f2d-27b433b45501","block_type":"box","text":"NM1026U-6004408-70/267","page_number":70,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9e9fea44-f3df-4137-8787-afadeed5d4ca","block_type":"box","text":"The following table shows the dollar amount of brokerage commissions paid to brokers for providing","page_number":71,"box":{"x":116,"y":87,"width":746,"height":12}},{"id":"c5843f64-57b7-40cf-a3e7-7839e3afacc2","block_type":"box","text":"Section 28(e) research/brokerage services under Section 28(e) of the Securities Exchange Act of","page_number":71,"box":{"x":116,"y":102,"width":727,"height":13}},{"id":"37dc755d-cd7b-4d86-9391-4ddc3fc2396b","block_type":"box","text":"1934, as amended, and the approximate dollar amount of the transactions involved for the year ended","page_number":71,"box":{"x":118,"y":118,"width":761,"height":12}},{"id":"4c7c822e-7b9b-4624-b0ad-9dae39b0b8dc","block_type":"box","text":"April 30, 2026. The provision of Section 28(e) research/brokerage services was not necessarily a factor","page_number":71,"box":{"x":116,"y":134,"width":772,"height":12}},{"id":"848a96ce-0a0e-4bc0-80ea-f8006ec1c2eb","block_type":"box","text":"in the placement of all brokerage business with such brokers.","page_number":71,"box":{"x":117,"y":149,"width":459,"height":12}},{"id":"660251e9-66f4-407d-a785-747eb68f20e4","block_type":"box","text":"Amount of Commissions","page_number":71,"box":{"x":329,"y":173,"width":159,"height":8}},{"id":"73799a4e-8958-4973-8f38-1174b68537d0","block_type":"box","text":"Paid to Brokers for","page_number":71,"box":{"x":349,"y":184,"width":120,"height":7}},{"id":"3621ddd6-5f4a-4262-adbb-128c48653c82","block_type":"box","text":"Providing 28(e) Eligible","page_number":71,"box":{"x":335,"y":194,"width":148,"height":10}},{"id":"09eeec0d-c78d-4e64-952f-fbf1db1865c7","block_type":"box","text":"Research Services","page_number":71,"box":{"x":350,"y":204,"width":118,"height":8}},{"id":"df16dc27-19ae-478f-8084-f229a183fe44","block_type":"box","text":"Amount of Brokerage","page_number":71,"box":{"x":520,"y":194,"width":137,"height":10}},{"id":"887d3652-f92a-4389-9fe9-b42cc64db50d","block_type":"box","text":"Transactions Involved","page_number":71,"box":{"x":520,"y":205,"width":141,"height":7}},{"id":"d720d353-2b07-4153-b41b-4bad5ab95168","block_type":"box","text":"$0 $0","page_number":71,"box":{"x":400,"y":223,"width":204,"height":11}},{"id":"1b1e46e7-50a9-4333-9328-3f810a0de896","block_type":"box","text":"The value of the Fund’s aggregate holdings of the securities of its regular brokers or dealers (as","page_number":71,"box":{"x":116,"y":251,"width":716,"height":12}},{"id":"27f39c7b-c719-4a85-b6e2-51e6e97a6596","block_type":"box","text":"defined in Rule 10b-1 of the Investment Company Act) or their parents as of April 30, 2026 if any","page_number":71,"box":{"x":116,"y":266,"width":722,"height":13}},{"id":"2d159387-4b4d-4689-844b-8aeea0a6692c","block_type":"box","text":"portion of such holdings were purchased during the fiscal year ended April 30, 2026 is as follows:","page_number":71,"box":{"x":117,"y":282,"width":726,"height":12}},{"id":"b0ae913b-dbfb-491d-948c-629d8fb63660","block_type":"box","text":"Issuer","page_number":71,"box":{"x":274,"y":307,"width":39,"height":7}},{"id":"7ce8ba40-c16e-41d7-bdf5-5462d24bb249","block_type":"box","text":"Debt (D)/Equity (E)","page_number":71,"box":{"x":441,"y":306,"width":117,"height":10}},{"id":"ea00862a-941d-49ab-be5d-17cbcc616159","block_type":"box","text":"Aggregate Holdings (000’s)","page_number":71,"box":{"x":614,"y":306,"width":174,"height":10}},{"id":"a33f85b9-6a8f-44e4-90b1-9b4093a6ddc6","block_type":"box","text":"BNP Paribas SA E $4,290,966","page_number":71,"box":{"x":233,"y":324,"width":515,"height":12}},{"id":"78f87836-0d0d-4d31-920e-30c4d1b08b21","block_type":"box","text":"The Fund’s purchase and sale orders for securities may be combined with those of other investment","page_number":71,"box":{"x":116,"y":352,"width":749,"height":12}},{"id":"6da76c08-b6b5-4aac-b09b-7e9b44eea9dd","block_type":"box","text":"companies, clients or accounts that BlackRock manages or advises. If purchases or sales of portfolio","page_number":71,"box":{"x":116,"y":368,"width":755,"height":12}},{"id":"b35dca1c-b357-44d8-96b8-043f6ed8728e","block_type":"box","text":"securities of the Fund and one or more other accounts managed or advised by BlackRock are","page_number":71,"box":{"x":116,"y":383,"width":701,"height":12}},{"id":"ae7ebd70-4ff0-4f4b-b433-2d1207badbbd","block_type":"box","text":"considered at or about the same time, transactions in such securities are allocated among the Fund","page_number":71,"box":{"x":116,"y":399,"width":745,"height":12}},{"id":"4ed53a03-214d-49d4-83a3-ff1288b686e2","block_type":"box","text":"and the other accounts in a manner deemed equitable to all by BlackRock. In some cases, this","page_number":71,"box":{"x":116,"y":414,"width":708,"height":12}},{"id":"de0ea93c-adf7-497d-a78a-ce07524b3f39","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":71,"box":{"x":117,"y":430,"width":751,"height":12}},{"id":"ae414159-ee06-4852-8eed-e381dc9181ff","block_type":"box","text":"concerned. However, in other cases, it is possible that the ability to participate in volume transactions","page_number":71,"box":{"x":116,"y":445,"width":756,"height":12}},{"id":"ce33f8cc-d230-4a32-8085-fed62738f1f3","block_type":"box","text":"and to negotiate lower transaction costs will be beneficial to the Fund. BlackRock may deal, trade and","page_number":71,"box":{"x":116,"y":461,"width":760,"height":12}},{"id":"988d436f-2232-446d-a7e9-124a61e8bcc5","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":71,"box":{"x":117,"y":476,"width":768,"height":12}},{"id":"0b53c6c7-cde4-4338-b37c-a48dc7cbafb9","block_type":"box","text":"time to time, effect trades on behalf of and for the","page_number":71,"box":{"x":116,"y":492,"width":372,"height":11}},{"id":"4b0b21aa-743d-49f8-93df-1c3d6fdd3f6a","block_type":"box","text":"account of the Fund with brokers or dealers that are","page_number":71,"box":{"x":488,"y":492,"width":390,"height":9}},{"id":"23b50343-1788-41d7-8c54-056afef47edb","block_type":"box","text":"affiliated with BFA, in conformity with the 1940 Act and SEC rules and regulations. Under these","page_number":71,"box":{"x":116,"y":507,"width":712,"height":12}},{"id":"a32cb60e-05cc-4d04-8c3b-946ab14348a2","block_type":"box","text":"provisions, any commissions paid to affiliated brokers or dealers must be reasonable and fair","page_number":71,"box":{"x":117,"y":523,"width":694,"height":12}},{"id":"8f33ce72-7f6b-47eb-9801-912f1807e7ab","block_type":"box","text":"compared to the commissions charged by other brokers or dealers in comparable transactions. The","page_number":71,"box":{"x":116,"y":538,"width":744,"height":12}},{"id":"02cca61c-cc32-4fb5-9d9b-a1ed473a6fde","block_type":"box","text":"Fund will not deal with affiliates in principal transactions unless permitted by applicable SEC rules or","page_number":71,"box":{"x":117,"y":554,"width":747,"height":12}},{"id":"88a66e9e-0296-4fec-b66e-e25276bc0f69","block_type":"box","text":"regulations, or by SEC exemptive order.","page_number":71,"box":{"x":117,"y":569,"width":302,"height":12}},{"id":"3cbc3954-bce0-45af-b846-19e6eeff64fb","block_type":"box","text":"While the Fund generally does not expect to engage in trading for short-term gains, it will effect portfolio","page_number":71,"box":{"x":116,"y":597,"width":738,"height":12}},{"id":"04d7f3b3-7d4f-4663-8858-83626e83cb05","block_type":"box","text":"transactions without regard to any holding period if,","page_number":71,"box":{"x":116,"y":612,"width":368,"height":12}},{"id":"ee4390de-9032-4959-b6f3-0288904c75e1","block_type":"box","text":"in Fund management’s judgment, such transactions are","page_number":71,"box":{"x":484,"y":613,"width":401,"height":11}},{"id":"20f0b2d9-81de-46d5-aeff-8df985d56a2c","block_type":"box","text":"advisable in light of a change in circumstances of a pa","page_number":71,"box":{"x":116,"y":628,"width":384,"height":12}},{"id":"a5642103-b798-426f-83a6-3da300bf85f0","block_type":"box","text":"rticular company or within a particular industry or in","page_number":71,"box":{"x":501,"y":628,"width":366,"height":12}},{"id":"74b7cbe4-3039-48a6-934e-a5f61d7bcd0a","block_type":"box","text":"general market, economic or financial conditions. The portfo","page_number":71,"box":{"x":116,"y":643,"width":426,"height":12}},{"id":"f70dbce8-51ba-4bc2-b883-94883078e022","block_type":"box","text":"lio turnover rate is calculated by dividing the","page_number":71,"box":{"x":543,"y":644,"width":314,"height":11}},{"id":"72484566-af7f-48af-9599-1b36f048b67c","block_type":"box","text":"lesser of the Fund’s annual sales or purchases of portfolio","page_number":71,"box":{"x":117,"y":659,"width":410,"height":12}},{"id":"da9143b2-12e5-4d84-93c8-3d43da3af931","block_type":"box","text":"securities (exclusive of purchases or sales of","page_number":71,"box":{"x":527,"y":659,"width":328,"height":12}},{"id":"d0a7f365-8fb1-442a-bb0b-5d4d7ca28799","block_type":"box","text":"U.S. Government securities and all other securities","page_number":71,"box":{"x":117,"y":674,"width":360,"height":10}},{"id":"7de68e8d-b71b-4115-b1f1-811235d9dc15","block_type":"box","text":"whose maturities at the time of acquisition were one","page_number":71,"box":{"x":482,"y":674,"width":369,"height":12}},{"id":"9a092ead-9af1-44c9-9d71-c73643eefd91","block_type":"box","text":"year or less) by the monthly average value of the secu","page_number":71,"box":{"x":116,"y":690,"width":385,"height":12}},{"id":"bf4772d9-df7f-4757-8070-00e31a419ead","block_type":"box","text":"rities in the portfolio during the year. A high rate of","page_number":71,"box":{"x":503,"y":690,"width":354,"height":12}},{"id":"26e98d98-0100-4e4e-8ebc-b151e1b2bbb4","block_type":"box","text":"portfolio turnover results in certain tax consequences, such as increased capital gain dividends and/or","page_number":71,"box":{"x":117,"y":705,"width":722,"height":13}},{"id":"fca005a6-2754-4986-853a-e3c931b7063c","block_type":"box","text":"ordinary income dividends, and in correspondingly greater","page_number":71,"box":{"x":116,"y":721,"width":413,"height":12}},{"id":"f274992e-d9c3-4090-9f99-07091bc27c0f","block_type":"box","text":"transaction costs in the form of dealer spreads","page_number":71,"box":{"x":533,"y":721,"width":329,"height":12}},{"id":"f9a8b291-ed2b-44f6-a6ec-9cbcdfaa6a95","block_type":"box","text":"and brokerage commissions, which are borne directly by the Fund.","page_number":71,"box":{"x":116,"y":737,"width":473,"height":12}},{"id":"543462bb-08c4-4427-a085-9880fc1a002a","block_type":"box","text":"Additional Information Concerning the","page_number":71,"box":{"x":116,"y":781,"width":687,"height":29}},{"id":"2fca77c2-9544-4717-bb96-2002f3a7f417","block_type":"box","text":"Trust","page_number":71,"box":{"x":117,"y":815,"width":102,"height":23}},{"id":"cdc206e1-a9f7-466e-a737-e186f8610f97","block_type":"box","text":"Shares.","page_number":71,"box":{"x":116,"y":862,"width":59,"height":9}},{"id":"6f41129d-432a-4d8c-9a35-613d84540ca6","block_type":"box","text":"The Trust is an open-end management investment company registered with the SEC under","page_number":71,"box":{"x":176,"y":862,"width":689,"height":12}},{"id":"9913ffbb-a036-4639-ab58-c60cdba245a8","block_type":"box","text":"the 1940 Act. The offering of the Trust’s shares is registered under the 1933 Act.","page_number":71,"box":{"x":116,"y":877,"width":603,"height":13}},{"id":"619b02cb-e08f-4827-8484-943d68d849f2","block_type":"box","text":"62","page_number":71,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5aecaf8a-65c5-441c-9998-1e0e5bb188b9","block_type":"box","text":"NM1026U-6004408-71/267","page_number":71,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"10c66dfe-513b-4fe6-9a2c-a6e425e6af78","block_type":"box","text":"The Trust was organized as a Delaware statutory trust on October 31, 2018 and is authorized to have","page_number":72,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"3602db61-e48f-49a7-b6af-95239ab9b7cf","block_type":"box","text":"multiple series or portfolios, each called a fund. The Trust issues shares of beneficial interests in each","page_number":72,"box":{"x":117,"y":102,"width":760,"height":12}},{"id":"0f0c2808-02ab-41bb-924a-f8a2c4ce4573","block_type":"box","text":"fund with no par value. The Board may establish and designate additional funds. This SAI relates","page_number":72,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"cf1daed1-1d4a-4226-a300-4867a5cbb537","block_type":"box","text":"solely to the Fund.","page_number":72,"box":{"x":116,"y":134,"width":142,"height":12}},{"id":"e07e7d4b-1237-44df-9524-9a7f03137fd3","block_type":"box","text":"Each whole share issued by a fund has a p","page_number":72,"box":{"x":117,"y":161,"width":310,"height":12}},{"id":"e804aa6e-ea68-4f96-830b-ffe09862dd4b","block_type":"box","text":"pro rata","page_number":72,"box":{"x":427,"y":161,"width":58,"height":12}},{"id":"cd60ca8b-316e-491f-9b2d-ed87be37744b","block_type":"box","text":"interest in the assets of that fund. Shares have no","page_number":72,"box":{"x":485,"y":161,"width":380,"height":9}},{"id":"41091534-548f-4e5d-a2c7-700a72db9062","block_type":"box","text":"preemptive, exchange, subscription or conversion rights and are freely transferable. Each share is","page_number":72,"box":{"x":117,"y":176,"width":732,"height":12}},{"id":"1211a998-dc51-4b78-9288-e53e8804e395","block_type":"box","text":"entitled to participate equally in dividends and distributions declared by the Board with respect to the","page_number":72,"box":{"x":116,"y":192,"width":749,"height":12}},{"id":"702ea6fc-570e-4547-a12f-680b667d42aa","block_type":"box","text":"relevant fund, and in the net distributable assets of such fund on liquidation.","page_number":72,"box":{"x":117,"y":207,"width":566,"height":12}},{"id":"8d929478-3b3e-4474-b0ad-2c1479238956","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":72,"box":{"x":117,"y":234,"width":762,"height":12}},{"id":"f1b73449-2fb5-49a2-86bc-a8e8739193e1","block_type":"box","text":"matter submitted to shareholders for a vote, each fund shall hold a separate vote, provided that","page_number":72,"box":{"x":117,"y":250,"width":711,"height":12}},{"id":"d6efd397-60f0-4d90-be25-81e6627048a7","block_type":"box","text":"shareholders of all affected funds will vote together when: (i) required by the 1940 Act, or (ii) the","page_number":72,"box":{"x":116,"y":265,"width":717,"height":12}},{"id":"065adb58-1ae7-495c-959b-c591ebbb736d","block_type":"box","text":"Trustees determine that the matter affects the interests of more than one fund.","page_number":72,"box":{"x":116,"y":281,"width":588,"height":9}},{"id":"bfd98011-539a-48e9-aa43-078d42672c76","block_type":"box","text":"Under Delaware law, the Trust is not required to hold an annual meeting of shareholders unless","page_number":72,"box":{"x":117,"y":308,"width":714,"height":12}},{"id":"6c489e02-f820-4d2c-99c1-b01cbd6e35b6","block_type":"box","text":"required to do so under the 1940 Act. The policy of","page_number":72,"box":{"x":117,"y":323,"width":381,"height":13}},{"id":"8a5ea7b2-9b38-4672-bb08-f2fe316ad95c","block_type":"box","text":"the Trust is not to hold an annual meeting of","page_number":72,"box":{"x":499,"y":323,"width":333,"height":13}},{"id":"d6f22a8c-0820-4161-a304-da5a47ca6e47","block_type":"box","text":"shareholders unless required to do so under the 1940 Act. All shares (regardless of the fund) have","page_number":72,"box":{"x":116,"y":339,"width":736,"height":12}},{"id":"c9645144-cda0-461c-bdc4-94bd76ccbf46","block_type":"box","text":"noncumulative voting rights in the election of members of the Board. Under Delaware law, Trustees of","page_number":72,"box":{"x":117,"y":354,"width":760,"height":13}},{"id":"4174d857-cb45-49eb-86cb-ac39952affe7","block_type":"box","text":"the Trust may be removed by vote of the shareholders.","page_number":72,"box":{"x":116,"y":370,"width":414,"height":12}},{"id":"0b10626f-9b24-4296-8b29-752de5af7e7b","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":72,"box":{"x":117,"y":397,"width":736,"height":12}},{"id":"2b86f94c-cc03-4c47-8318-0e35868d5ec6","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":72,"box":{"x":116,"y":413,"width":749,"height":12}},{"id":"f295c207-a7bc-41fb-a2f5-faed36c76fef","block_type":"box","text":"fund, as defined in Rule 0-1 under the 1940 Act. A","page_number":72,"box":{"x":116,"y":428,"width":378,"height":11}},{"id":"34b2c823-f328-46a1-b3f8-e4cd4cd735b4","block_type":"box","text":"fund cannot predict the length of time for which one","page_number":72,"box":{"x":494,"y":428,"width":386,"height":12}},{"id":"ec474c13-8f69-4716-9e21-2d2e09f17f88","block_type":"box","text":"or more shareholders may remain a control person of the fund.","page_number":72,"box":{"x":116,"y":444,"width":471,"height":12}},{"id":"30bd2605-f82e-4dd5-80d7-55064b6d22e5","block_type":"box","text":"Shareholders may make inquiries by writing to BlackRock ETF Trust, c/o BlackRock Investments, LLC,","page_number":72,"box":{"x":116,"y":471,"width":769,"height":12}},{"id":"2de36d3d-e96d-4459-aefb-cc4e7daa3962","block_type":"box","text":"1 University Square Drive, Princeton, NJ 08540.","page_number":72,"box":{"x":118,"y":486,"width":360,"height":12}},{"id":"5932ac74-271a-4e81-9563-4b68f56b82ab","block_type":"box","text":"Absent an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than","page_number":72,"box":{"x":116,"y":513,"width":769,"height":12}},{"id":"ac1886c5-0353-493a-9b34-35345e4a7c18","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":72,"box":{"x":116,"y":529,"width":771,"height":12}},{"id":"0d869e1a-9a45-472b-93fe-fdccc7952187","block_type":"box","text":"the SEC’s rules promulgated thereunder. In addition, absent an applicable exemption or other relief","page_number":72,"box":{"x":116,"y":544,"width":742,"height":12}},{"id":"4e64ec32-cecc-4561-b697-aa7bcc60d884","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":72,"box":{"x":116,"y":560,"width":760,"height":11}},{"id":"40d7df4a-8790-48a9-b2b7-868767b272a8","block_type":"box","text":"a fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short sale provisions","page_number":72,"box":{"x":116,"y":575,"width":756,"height":12}},{"id":"6c3a98ca-db00-4730-82e3-5d5055ac3306","block_type":"box","text":"of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and","page_number":72,"box":{"x":116,"y":591,"width":732,"height":12}},{"id":"53d5c940-9ccf-413c-867f-3dba0cbeb17f","block_type":"box","text":"Insiders should consult with their own legal counsel concerning their obligations under Sections 13 and","page_number":72,"box":{"x":117,"y":606,"width":767,"height":12}},{"id":"44602e7c-cd60-4351-82dc-c2e8520cd1a4","block_type":"box","text":"16 of the 1934 Act and existing guidance provided by the SEC staff.","page_number":72,"box":{"x":118,"y":622,"width":507,"height":12}},{"id":"947fd052-1571-4057-b3e7-abee2748ac45","block_type":"box","text":"In accordance with the Trust’s current Agreement and Declaration of Trust (the “Declaration of Trust”),","page_number":72,"box":{"x":117,"y":649,"width":762,"height":12}},{"id":"3fd3036c-7b5c-431c-9c61-53b62760685a","block_type":"box","text":"the Board may, without shareholder approval (unless such shareholder approval is required by","page_number":72,"box":{"x":116,"y":665,"width":702,"height":12}},{"id":"a0079b71-4309-43f0-b854-334ad251a4d3","block_type":"box","text":"applicable law, including the 1940 Act), authorize certain funds to merge, reorganize, consolidate, sell","page_number":72,"box":{"x":116,"y":680,"width":754,"height":12}},{"id":"ee640c4f-f5e6-4d4f-965a-5784c220b44a","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":72,"box":{"x":116,"y":696,"width":726,"height":12}},{"id":"69d4dbe9-74a8-4062-9ee1-43c6f672ef04","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":72,"box":{"x":116,"y":711,"width":703,"height":12}},{"id":"9d5a4f6f-40b7-444b-ab88-32cf4c27a1cc","block_type":"box","text":"automatically redeemable upon the occurrence of any specific event, the Declaration of Trust provides","page_number":72,"box":{"x":116,"y":727,"width":759,"height":12}},{"id":"650576c3-b9ae-4cfb-a98b-31f8020592bd","block_type":"box","text":"that the Board will have the unrestricted power to alter the number of shares in a Creation Unit.","page_number":72,"box":{"x":116,"y":742,"width":704,"height":12}},{"id":"89aa2288-bd75-4a9a-b778-415ced8418b2","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":72,"box":{"x":116,"y":758,"width":738,"height":11}},{"id":"f2ab483d-16ec-4fd7-a80f-24883d0b1b2f","block_type":"box","text":"determine to permit the shares to be redeemable in aggregations smaller than Creation Units or to be","page_number":72,"box":{"x":116,"y":773,"width":753,"height":12}},{"id":"713f4626-83fd-48ad-bcc2-e166b4624505","block_type":"box","text":"individually redeemable. In such circumstance, the Trust or a fund may make redemptions, for cash or","page_number":72,"box":{"x":117,"y":789,"width":758,"height":12}},{"id":"c9066c39-82ae-401c-8abf-5479639c3377","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":72,"box":{"x":116,"y":804,"width":742,"height":11}},{"id":"c4bac336-4625-4138-84b9-5783efde4f9a","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":72,"box":{"x":116,"y":820,"width":758,"height":12}},{"id":"3908c156-bcc7-4f2e-8388-48cdc65baa0b","block_type":"box","text":"shareholders owning in excess of a certain stated minimum amount.","page_number":72,"box":{"x":116,"y":835,"width":511,"height":12}},{"id":"59a791c7-7a19-4649-82a1-27a399d55d88","block_type":"box","text":"DTC as Securities Depository for Shares of the Fund.","page_number":72,"box":{"x":117,"y":862,"width":428,"height":12}},{"id":"54732fce-6b7a-4895-916d-e5d143a55f66","block_type":"box","text":"Shares of the Fund are represented by","page_number":72,"box":{"x":546,"y":862,"width":293,"height":12}},{"id":"5e547761-4346-48f9-882c-2150db1121a2","block_type":"box","text":"securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.","page_number":72,"box":{"x":116,"y":878,"width":727,"height":12}},{"id":"161af630-6812-472d-b76e-b00dbe659e80","block_type":"box","text":"63","page_number":72,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"634af179-3894-47a7-8f00-b84a6f8d1334","block_type":"box","text":"NM1026U-6004408-72/267","page_number":72,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"dd992701-54c2-491b-9a5a-9be0f55a97b1","block_type":"box","text":"DTC was created in 1973 to enable electronic movement of securities between its participants (“DTC","page_number":73,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"659425bb-58c6-49d5-b6a0-81681586060a","block_type":"box","text":"Participants”), and NSCC was established in 1976 to provide a single settlement system for securities","page_number":73,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"cd994c09-95ef-4b81-ad70-dbaf07ce5800","block_type":"box","text":"clearing and to serve as central counterparty for securities trades among DTC Participants. In 1999,","page_number":73,"box":{"x":116,"y":118,"width":747,"height":12}},{"id":"54d6787c-ad71-4228-89db-91e7e5870e91","block_type":"box","text":"DTC and NSCC were consolidated within the Depository Trust & Clearing Corporation (“DTCC”) and","page_number":73,"box":{"x":117,"y":134,"width":750,"height":12}},{"id":"026efe71-dc19-479e-ab45-1d5d1413de57","block_type":"box","text":"became wholly-owned subsidiaries of DTCC. The common stock of DTCC is owned by the DTC","page_number":73,"box":{"x":117,"y":149,"width":716,"height":12}},{"id":"a1b05270-ec97-4e64-ad25-ee5391960aea","block_type":"box","text":"Participants, but NYSE and FINRA, through subsidiaries, hold preferred shares in DTCC that provide","page_number":73,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"82f2a790-6945-4930-a87a-7e9a937c026a","block_type":"box","text":"them with the right to elect one member each to the DTCC board of directors. Access to the DTC","page_number":73,"box":{"x":116,"y":180,"width":725,"height":12}},{"id":"b5087419-b2f6-4cce-8db1-c5b0906dc729","block_type":"box","text":"system is available to entities, such as banks, brokers, dealers and trust companies, that clear through","page_number":73,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"a99ffcf9-d95d-4b65-9b22-74711605afa4","block_type":"box","text":"or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect","page_number":73,"box":{"x":116,"y":211,"width":707,"height":12}},{"id":"26221e4d-a019-42ec-ae02-31b345e21a67","block_type":"box","text":"Participants”).","page_number":73,"box":{"x":117,"y":227,"width":107,"height":12}},{"id":"0809f1ae-4bc6-4024-8754-a01c5df52910","block_type":"box","text":"Beneficial ownership of shares is limited to DTC Participants, Indirect Participants and persons holding","page_number":73,"box":{"x":117,"y":258,"width":766,"height":12}},{"id":"cee75242-0756-41c6-b84d-6b0cee290bea","block_type":"box","text":"interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in","page_number":73,"box":{"x":117,"y":273,"width":716,"height":12}},{"id":"0ad49006-a867-48d1-81bb-a6faaabb5f27","block_type":"box","text":"shares (owners of such beneficial interests are referred to herein as “Beneficial Owners”) is shown on,","page_number":73,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"c9a93449-0d2c-4857-8b2d-f444ed4e7f9e","block_type":"box","text":"and the transfer of ownership is effected only through, records maintained by DTC (with respect to","page_number":73,"box":{"x":116,"y":304,"width":734,"height":12}},{"id":"3a51d195-4b07-43d3-8570-5275885a8276","block_type":"box","text":"DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and","page_number":73,"box":{"x":117,"y":320,"width":736,"height":12}},{"id":"9ab6bd72-20db-4644-9436-a15f27d8509d","block_type":"box","text":"Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the","page_number":73,"box":{"x":117,"y":335,"width":746,"height":12}},{"id":"abc21b64-1495-4b7f-8002-88435e26006c","block_type":"box","text":"DTC Participant a written confirmation relating to their purchase of shares. The laws of some","page_number":73,"box":{"x":117,"y":351,"width":692,"height":12}},{"id":"7c1243e0-b069-449c-b4e9-8d9ddb2e290c","block_type":"box","text":"jurisdictions may require that certain purchasers of securities take physical delivery of such securities","page_number":73,"box":{"x":115,"y":366,"width":757,"height":12}},{"id":"4c134966-c834-4f2f-88a4-56aec30be015","block_type":"box","text":"in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in","page_number":73,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"465db3c4-227c-4412-b534-c5fc0cc1a734","block_type":"box","text":"shares of the Fund.","page_number":73,"box":{"x":116,"y":397,"width":149,"height":10}},{"id":"d4a9ddbd-18d8-46ea-9d9f-7c48cab30151","block_type":"box","text":"Conveyance of all notices, statements and other communications to Beneficial Owners is effected as","page_number":73,"box":{"x":117,"y":428,"width":752,"height":12}},{"id":"77c39925-616c-4c12-a950-a396ebfe0bc3","block_type":"box","text":"follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make","page_number":73,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"65c6b9c9-1027-4fef-b999-350b9fb2bf50","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":73,"box":{"x":116,"y":459,"width":771,"height":12}},{"id":"5997b712-efab-4497-abe9-ef67409b6dcb","block_type":"box","text":"Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the","page_number":73,"box":{"x":117,"y":475,"width":734,"height":12}},{"id":"0842ac04-9521-4a37-86fb-c6aa18dacc92","block_type":"box","text":"number of Beneficial Owners holding shares, directly or indirectly, through such DTC Participant. The","page_number":73,"box":{"x":117,"y":490,"width":755,"height":12}},{"id":"7ec5234a-4989-447f-8947-4deaaddedb34","block_type":"box","text":"Trust shall provide each such DTC Participant with copies of such notice, statement or other","page_number":73,"box":{"x":116,"y":506,"width":689,"height":12}},{"id":"e0a0eef9-4aa8-469e-b398-02d178986d39","block_type":"box","text":"communication, in such form, number and at such place as such DTC Participant may reasonably","page_number":73,"box":{"x":116,"y":521,"width":731,"height":12}},{"id":"c38cb978-0a14-4e29-aed8-55caca97e256","block_type":"box","text":"request, in order that such notice, statement or communication may be transmitted by such DTC","page_number":73,"box":{"x":117,"y":537,"width":720,"height":12}},{"id":"409995b8-df2c-4a23-94ec-aca51b9a01df","block_type":"box","text":"Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each","page_number":73,"box":{"x":117,"y":552,"width":734,"height":12}},{"id":"08570bba-b300-4c1c-8560-06cd0a8ef91b","block_type":"box","text":"such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to","page_number":73,"box":{"x":116,"y":568,"width":749,"height":12}},{"id":"1a25ed71-188e-467d-ab17-c30bf86b8f21","block_type":"box","text":"such transmittal, all subject to applicable statutory and regulatory requirements.","page_number":73,"box":{"x":116,"y":583,"width":595,"height":12}},{"id":"ef7ef7b4-3500-40b7-8bf5-52293dd0ce9f","block_type":"box","text":"Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all","page_number":73,"box":{"x":116,"y":614,"width":744,"height":12}},{"id":"e89af4aa-06e8-4e6f-87cd-e7534e46923d","block_type":"box","text":"shares of the Trust. DTC or its nominee, upon receipt of any such distributions, shall credit immediately","page_number":73,"box":{"x":116,"y":630,"width":771,"height":12}},{"id":"701a12c0-5266-430c-82d8-9bd3074c72eb","block_type":"box","text":"DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial","page_number":73,"box":{"x":117,"y":645,"width":723,"height":12}},{"id":"d1b247f2-4c35-42f3-81f6-e9436822b3ad","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":73,"box":{"x":117,"y":661,"width":727,"height":12}},{"id":"2c5e4d25-d103-434f-aad8-1c971fb18d97","block_type":"box","text":"Participants to Indirect Participants and Beneficial Owners of shares held through such DTC","page_number":73,"box":{"x":117,"y":676,"width":682,"height":12}},{"id":"d8d5db0f-9eb6-4777-b88c-b5a95c43b148","block_type":"box","text":"Participants will be governed by standing instructions and customary practices, as is now the case with","page_number":73,"box":{"x":117,"y":692,"width":762,"height":12}},{"id":"d91f2c4f-b96e-425d-90a7-b48cb941eb80","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":73,"box":{"x":116,"y":707,"width":767,"height":12}},{"id":"23792b1f-941a-4462-9d63-341966fc6b2f","block_type":"box","text":"the responsibility of such DTC Participants.","page_number":73,"box":{"x":116,"y":723,"width":319,"height":12}},{"id":"c6d35d41-9aea-4186-bbb6-be0103d269ec","block_type":"box","text":"The Trust has no responsibility or liability for any aspect of the records relating to or notices to","page_number":73,"box":{"x":116,"y":754,"width":696,"height":12}},{"id":"6b6a7d88-be02-4421-bba6-805e4e79c064","block_type":"box","text":"Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or","page_number":73,"box":{"x":117,"y":769,"width":752,"height":12}},{"id":"312c4066-9f14-4bd1-b456-fbcbd8d28a4b","block_type":"box","text":"for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or","page_number":73,"box":{"x":116,"y":785,"width":761,"height":12}},{"id":"9c849435-dc43-4156-801f-ae21aaa39721","block_type":"box","text":"for any other aspect of the relationship between DTC and the DTC Participants or the relationship","page_number":73,"box":{"x":116,"y":800,"width":724,"height":12}},{"id":"249ad253-7c00-4154-bc7f-35b43e674990","block_type":"box","text":"between such DTC Participants and the Indirect Participants and Beneficial Owners owning through","page_number":73,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"e63ae2ce-2c02-4747-b335-df9de316509f","block_type":"box","text":"such DTC Participants. DTC may decide to discontinue providing its service with respect to shares of","page_number":73,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"faded647-3ae9-41e5-a725-8170140d91c0","block_type":"box","text":"the Trust at any time by giving reasonable notice to the Trust and discharging its responsibilities with","page_number":73,"box":{"x":116,"y":847,"width":751,"height":12}},{"id":"5d835b35-c8ef-4c71-b563-8f82795c941a","block_type":"box","text":"respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a","page_number":73,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"dc99f69a-3251-4577-beb7-499b64aac928","block_type":"box","text":"replacement for DTC to perform its functions at a comparable cost.","page_number":73,"box":{"x":117,"y":878,"width":500,"height":12}},{"id":"9458f054-c36a-4e4b-a09b-683884ff19de","block_type":"box","text":"64","page_number":73,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"dfeb58d5-8ac7-4d86-ba66-31a9aa408d9d","block_type":"box","text":"NM1026U-6004408-73/267","page_number":73,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2a9ef547-0dcf-4fa3-b4c1-da6344aede7c","block_type":"box","text":"Distribution of Shares.","page_number":74,"box":{"x":117,"y":87,"width":184,"height":10}},{"id":"fcd84f26-0283-4ad1-a019-3f1f972936b0","block_type":"box","text":"In connection with the Fund’s launch, the Fund was seeded through the sale","page_number":74,"box":{"x":303,"y":87,"width":571,"height":12}},{"id":"5a22ce0c-a17c-4af2-939c-8319a5451fd2","block_type":"box","text":"of one or more Creation Units by the Fund to one or more initial investors. Initial investors participating","page_number":74,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"a96af804-ffc8-474e-9475-f8c8f5ef78dd","block_type":"box","text":"in the seeding may be Authorized Participants, a lead market maker or other third party investor or an","page_number":74,"box":{"x":117,"y":118,"width":758,"height":12}},{"id":"c329dfd4-f5d5-43e9-b22f-d030d61609fa","block_type":"box","text":"affiliate of the Fund or the Fund’s adviser. Each such initial investor may sell some or all of the shares","page_number":74,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"40315292-6ca8-4314-9143-1961b6f9bde4","block_type":"box","text":"underlying the Creation Unit(s) held by them pursuant to the registration statement for the Fund (each,","page_number":74,"box":{"x":117,"y":149,"width":763,"height":12}},{"id":"f34113b4-55a7-4a1f-8adb-da7f2bbc3333","block_type":"box","text":"a “Selling Shareholder”), which shares have been registered to permit the resale from time to time after","page_number":74,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"232cff69-8e3f-4353-a23c-2aabfd98b8c9","block_type":"box","text":"purchase. The Fund will not receive any of the proceeds from the resale by the Selling Shareholders of","page_number":74,"box":{"x":117,"y":180,"width":768,"height":12}},{"id":"913240ae-efd2-4fb6-8d45-9bbe2517fcc4","block_type":"box","text":"these shares.","page_number":74,"box":{"x":116,"y":196,"width":105,"height":9}},{"id":"68ce022e-1baf-404f-8715-4534dac56473","block_type":"box","text":"Selling Shareholders may sell shares owned by them directly or through broker-dealers, in accordance","page_number":74,"box":{"x":116,"y":223,"width":767,"height":13}},{"id":"ac6ca581-b527-4a39-a367-2f74ea7befad","block_type":"box","text":"with applicable law, on any national securities exchange on which the shares may be listed or quoted","page_number":74,"box":{"x":116,"y":239,"width":755,"height":12}},{"id":"249402f1-4c74-40cd-bc44-be16e86d216b","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":74,"box":{"x":116,"y":254,"width":756,"height":13}},{"id":"d3fc26e8-fb90-41f2-ba98-240e7dff51e7","block_type":"box","text":"exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying","page_number":74,"box":{"x":116,"y":270,"width":735,"height":12}},{"id":"14ad5c18-5e15-4e6e-9130-0eac4fb062f5","block_type":"box","text":"prices determined at the time of sale, or at negotiated prices. These sales may be effected through","page_number":74,"box":{"x":117,"y":286,"width":737,"height":12}},{"id":"921cf678-3d19-4e2a-be4c-682f1151558c","block_type":"box","text":"brokerage transactions, privately negotiated trades, block sales, entry into options or other derivatives","page_number":74,"box":{"x":117,"y":301,"width":760,"height":12}},{"id":"c38e9de1-19b1-497c-ba4d-bcaec702fe15","block_type":"box","text":"transactions or through any other means authorized by applicable law. Selling Shareholders may","page_number":74,"box":{"x":116,"y":317,"width":724,"height":12}},{"id":"07799d7e-6c40-4b05-9e0f-4fa5f1e89886","block_type":"box","text":"redeem the shares held in Creation Unit size by them through an Authorized Participant.","page_number":74,"box":{"x":117,"y":332,"width":659,"height":12}},{"id":"83de8428-1f59-459b-be44-346f7bb31ea2","block_type":"box","text":"Any Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may","page_number":74,"box":{"x":116,"y":360,"width":767,"height":12}},{"id":"712df0a8-0988-4a23-8a67-885c97c731bc","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":74,"box":{"x":117,"y":375,"width":754,"height":13}},{"id":"a2deeb96-9934-4730-a652-dbe47dde7a33","block_type":"box","text":"with such sales.","page_number":74,"box":{"x":116,"y":391,"width":123,"height":10}},{"id":"2291b736-435e-46ba-9175-19393b081e70","block_type":"box","text":"Any Selling Shareholder and any other person participating in such distribution will be subject to","page_number":74,"box":{"x":116,"y":419,"width":716,"height":12}},{"id":"b083a750-3c58-40b1-958f-86cf8a9f5468","block_type":"box","text":"applicable provisions of the 1934 Act and the rules and regulations thereunder.","page_number":74,"box":{"x":116,"y":434,"width":591,"height":13}},{"id":"0f6ea0a0-de4b-4ba1-be29-e2e7a28c416d","block_type":"box","text":"Creation and Redemption of Creation","page_number":74,"box":{"x":118,"y":480,"width":678,"height":29}},{"id":"8a5e6888-abcd-4340-aae2-838580ed3ae5","block_type":"box","text":"Units","page_number":74,"box":{"x":119,"y":514,"width":100,"height":22}},{"id":"0d04a6ed-a438-4df4-aa1c-f17b641d3256","block_type":"box","text":"General.","page_number":74,"box":{"x":116,"y":561,"width":66,"height":9}},{"id":"85dfeeeb-3257-4e44-8056-a911b10e696c","block_type":"box","text":"The Trust issues and sells shares of the Fund only in Creation Units on a continuous basis","page_number":74,"box":{"x":183,"y":561,"width":682,"height":12}},{"id":"cb2a85ed-14a2-4e94-8e57-c6deab292d59","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":74,"box":{"x":116,"y":577,"width":728,"height":12}},{"id":"c108ff0e-0480-4883-848c-03ae91f9c838","block_type":"box","text":"determined after receipt, on any Business Day (as defined below), of an order received by the","page_number":74,"box":{"x":116,"y":592,"width":702,"height":12}},{"id":"81b80b7b-06e5-48c9-a8ee-a4728bcf378b","block_type":"box","text":"Distributor or its agent in proper form. On days when the Listing Exchange closes earlier than normal,","page_number":74,"box":{"x":117,"y":607,"width":758,"height":13}},{"id":"f987c90d-cadd-422d-b384-c256d01b74fa","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":74,"box":{"x":116,"y":623,"width":756,"height":12}},{"id":"8929dbb9-ed26-471c-8766-ab39bf6bae29","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":74,"box":{"x":116,"y":638,"width":748,"height":12}},{"id":"6fc5148a-d6fb-4807-8eea-2730fb5879f6","block_type":"box","text":"Creation Unit as of May 31, 2026:","page_number":74,"box":{"x":117,"y":654,"width":254,"height":12}},{"id":"5ef01c00-9266-49ca-a00e-b60faa638e29","block_type":"box","text":"Shares Per","page_number":74,"box":{"x":374,"y":689,"width":70,"height":8}},{"id":"e269ef53-9840-4895-b3ac-4a9cb0a7af31","block_type":"box","text":"Creation","page_number":74,"box":{"x":382,"y":699,"width":53,"height":8}},{"id":"d074b97c-3aa6-4659-9949-c346cf228f05","block_type":"box","text":"Unit","page_number":74,"box":{"x":396,"y":710,"width":25,"height":7}},{"id":"99b7ad6d-a71e-44af-93e7-2f8ca0f746bb","block_type":"box","text":"Approximate","page_number":74,"box":{"x":549,"y":679,"width":82,"height":9}},{"id":"2856a6b9-f4ac-49a5-9ac2-12fb946f68a2","block_type":"box","text":"Value Per","page_number":74,"box":{"x":560,"y":689,"width":61,"height":8}},{"id":"30e7a78c-eb6a-446f-aa13-7d02249b41dd","block_type":"box","text":"Creation","page_number":74,"box":{"x":564,"y":699,"width":53,"height":8}},{"id":"b432f916-f4a1-4b11-908e-050ae5578441","block_type":"box","text":"Unit (U.S.$)","page_number":74,"box":{"x":555,"y":709,"width":71,"height":10}},{"id":"4ff86858-27ea-4c57-b2a6-332de6e0f06b","block_type":"box","text":"40,000 $1,278,213","page_number":74,"box":{"x":383,"y":728,"width":249,"height":12}},{"id":"c7f9949c-ccc4-4c60-b5ec-a223510968d6","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":74,"box":{"x":117,"y":756,"width":749,"height":12}},{"id":"70e0b248-2e93-4bbe-84a4-a226fc4b76ef","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":74,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"f793b06b-7ff1-4db5-b04e-0cae33cec952","block_type":"box","text":"number of shares outstanding of the Fund, and to make a corresponding change in the number of","page_number":74,"box":{"x":117,"y":787,"width":726,"height":12}},{"id":"defe7d96-b84f-4ef8-bcde-5edc81dcb37b","block_type":"box","text":"shares constituting a Creation Unit, in the event that the per share price in the secondary market rises","page_number":74,"box":{"x":116,"y":803,"width":755,"height":12}},{"id":"126b76bd-e9ad-41d1-b3c1-94ee17bc5e0e","block_type":"box","text":"(or declines) to an amount that falls outside the range deemed desirable by the Board.","page_number":74,"box":{"x":117,"y":818,"width":638,"height":12}},{"id":"d30aa284-7b01-48b0-9286-7114963c933c","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":74,"box":{"x":116,"y":846,"width":764,"height":12}},{"id":"76ca3199-c2b8-456a-bb2e-a81e7c7c4141","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":74,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"f1947f2e-30af-4b42-a40a-f4ad3d518045","block_type":"box","text":"for business any day on which the Listing Exchange on","page_number":74,"box":{"x":116,"y":877,"width":414,"height":12}},{"id":"3d0d11f6-0032-4fc2-9d8c-205f0c659f2b","block_type":"box","text":"which the Fund is listed for trading is open for","page_number":74,"box":{"x":530,"y":877,"width":343,"height":12}},{"id":"56ad0f89-7d51-4208-8f6f-e486470fa41e","block_type":"box","text":"65","page_number":74,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"10916c1f-140e-4156-8d96-0834c24e4b0d","block_type":"box","text":"NM1026U-6004408-74/267","page_number":74,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"853ae262-a410-4467-97d5-a8e235f6eb7e","block_type":"box","text":"business. As of the date of this SAI, the Listing Exchange observes the following holidays, as","page_number":75,"box":{"x":117,"y":87,"width":695,"height":12}},{"id":"2cfbdef3-7e3b-410d-b567-78691eb3f1fb","block_type":"box","text":"observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,","page_number":75,"box":{"x":116,"y":102,"width":760,"height":13}},{"id":"0ed5eb8c-0298-4a51-b577-ae9dab57094c","block_type":"box","text":"Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.","page_number":75,"box":{"x":116,"y":118,"width":621,"height":12}},{"id":"845a6607-3c34-40a3-91c8-e207182f3916","block_type":"box","text":"Fund Deposit.","page_number":75,"box":{"x":117,"y":145,"width":110,"height":12}},{"id":"9621233b-009e-420e-8c35-9e0c59348990","block_type":"box","text":"The consideration for purchase of Creation Units of the Fund generally consists of","page_number":75,"box":{"x":228,"y":145,"width":618,"height":12}},{"id":"36675af5-4420-4ee7-9dc5-f961cdce0eb3","block_type":"box","text":"Deposit Securities and the Cash Component computed as described below. Together, the Deposit","page_number":75,"box":{"x":117,"y":161,"width":734,"height":12}},{"id":"6be3ed6d-15b8-465f-b50e-fbea9bbe80f8","block_type":"box","text":"Securities and the Cash Component constitute the “Fund Deposit,” which will be applicable (subject to","page_number":75,"box":{"x":116,"y":176,"width":762,"height":12}},{"id":"0794142b-9c59-4637-a926-49b3757d75f8","block_type":"box","text":"possible amendment or correction) to creation requests received in proper form. The Fund Deposit","page_number":75,"box":{"x":117,"y":192,"width":736,"height":12}},{"id":"57b2c828-f4fe-42be-90fe-1c7669b63d35","block_type":"box","text":"represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund.","page_number":75,"box":{"x":117,"y":207,"width":734,"height":12}},{"id":"14834c3d-372b-46c7-8c25-4fda59386155","block_type":"box","text":"Such Fund Deposit is applicable, subject to any adjustments as described below, to purchases of","page_number":75,"box":{"x":116,"y":223,"width":726,"height":12}},{"id":"8013ce84-25db-4a9a-b220-ced7fd6f5ab1","block_type":"box","text":"Creation Units of shares of the Fund until such time as the next-announced Fund Deposit is made","page_number":75,"box":{"x":117,"y":238,"width":730,"height":12}},{"id":"fb5ec49b-2539-46a8-a18e-6b2170db21c7","block_type":"box","text":"available.","page_number":75,"box":{"x":116,"y":254,"width":75,"height":9}},{"id":"e41fb84e-a9e5-4b95-8265-bcc6c7d9bd1a","block_type":"box","text":"The Cash Component is an amount equal to the difference between the NAV of the shares (per","page_number":75,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"0a4af1f4-9350-48fe-9fac-46714178748a","block_type":"box","text":"Creation Unit) and the “Deposit Amount,” which is an amount equal to the market value of the Deposit","page_number":75,"box":{"x":117,"y":296,"width":760,"height":12}},{"id":"3614971b-15a9-423c-9536-3e2d4c657f3f","block_type":"box","text":"Securities, and serves to compensate for any differences between the NAV per Creation Unit and the","page_number":75,"box":{"x":116,"y":312,"width":757,"height":12}},{"id":"cf6bdb9c-b8ee-4b8e-bb48-826fd55a8f39","block_type":"box","text":"Deposit Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer","page_number":75,"box":{"x":117,"y":327,"width":766,"height":12}},{"id":"6c2c2eb6-b6aa-40b1-972c-0293f79e6406","block_type":"box","text":"of beneficial ownership of the Deposit Securities are the sole responsibility of the Authorized","page_number":75,"box":{"x":116,"y":343,"width":689,"height":12}},{"id":"dc646417-b7bc-4f43-8439-8d69280ba81e","block_type":"box","text":"Participant purchasing the Creation Unit.","page_number":75,"box":{"x":117,"y":358,"width":305,"height":12}},{"id":"9f069cbe-48e3-4e6f-aab4-0478cad0d9bf","block_type":"box","text":"The identity and number or par value of the Deposit Securities change pursuant to changes in the","page_number":75,"box":{"x":116,"y":385,"width":730,"height":13}},{"id":"778ef47a-e39d-4d92-ab1b-72efdf9efd60","block_type":"box","text":"composition of the Fund’s portfolio and as rebalancing adjustments and corporate action events are","page_number":75,"box":{"x":116,"y":401,"width":744,"height":12}},{"id":"5ab7f676-a0ac-460a-bd73-48a97d7061ee","block_type":"box","text":"reflected from time to time by BFA with a view to the investment objective of the Fund. The","page_number":75,"box":{"x":117,"y":416,"width":677,"height":13}},{"id":"ffbd30f2-ad74-4d80-bab9-d007400ae698","block_type":"box","text":"composition of the Deposit Securities may also change in response to adjustments to the weighting or","page_number":75,"box":{"x":116,"y":432,"width":761,"height":12}},{"id":"f92392ec-4483-43df-b910-688122df49b9","block_type":"box","text":"composition of the component securities constituting the Fund’s portfolio.","page_number":75,"box":{"x":116,"y":447,"width":547,"height":13}},{"id":"a246e936-080c-4759-863c-306679c9bbe9","block_type":"box","text":"The Fund Deposit may also be modified to minimize the Cash Component by redistributing the cash to","page_number":75,"box":{"x":116,"y":475,"width":766,"height":12}},{"id":"1c0acbef-e72d-4193-8e47-ce8e894c5f4c","block_type":"box","text":"the Deposit Securities portion of the Fund Deposit through “systematic rounding.” The rounding","page_number":75,"box":{"x":116,"y":490,"width":712,"height":12}},{"id":"c434095c-7151-4dc3-ba5e-313963a1ce5f","block_type":"box","text":"methodology “rounds up” position sizes of securities in the Deposit Securities (which in turn reduces","page_number":75,"box":{"x":117,"y":506,"width":746,"height":12}},{"id":"405fcce1-fd66-44d6-b29e-64e10e731e8f","block_type":"box","text":"the cash portion). However, the methodology limits the maximum allowed percentage change in weight","page_number":75,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"e173a826-6008-4c23-8c45-7a43e785f79a","block_type":"box","text":"and share quantity of any given security in the Fund Deposit.","page_number":75,"box":{"x":116,"y":537,"width":456,"height":12}},{"id":"9a23ee1e-1714-4acf-ae0b-d3f34a64cd41","block_type":"box","text":"Fund Deposits may also be modified to position a fund towards a forward index rebalance to reflect","page_number":75,"box":{"x":117,"y":564,"width":740,"height":12}},{"id":"c541851f-17a2-45c7-a699-8a305ff31895","block_type":"box","text":"revisions that account for index additions, deletions, and re-weights.","page_number":75,"box":{"x":117,"y":579,"width":509,"height":12}},{"id":"9feb111f-a33d-4331-9dea-2ef1375bb14e","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":75,"box":{"x":116,"y":606,"width":710,"height":12}},{"id":"15a4b821-9c4c-47da-9691-25fdbb38fc78","block_type":"box","text":"Component to replace any Deposit Security in certain circumstances, including: (i) when instruments","page_number":75,"box":{"x":117,"y":622,"width":750,"height":12}},{"id":"7cae611a-05d9-4e4d-b943-bb4ce061622b","block_type":"box","text":"are not available in sufficient quantity for delivery, (ii) when instruments are not eligible for transfer","page_number":75,"box":{"x":116,"y":637,"width":732,"height":12}},{"id":"1dd3adb1-be4c-4017-82b2-187a33f9150d","block_type":"box","text":"through DTC or the clearing process (as discussed below), (iii) when instruments that the Authorized","page_number":75,"box":{"x":116,"y":653,"width":752,"height":12}},{"id":"49883067-16fa-4129-aa1d-1733e3c11c5a","block_type":"box","text":"Participant (or an investor on whose behalf the Authorized Participant is acting) are not able to be","page_number":75,"box":{"x":117,"y":668,"width":722,"height":12}},{"id":"61cedb83-4bbc-447a-b3d7-2c7ef242b2e4","block_type":"box","text":"traded due to a trading restriction, (iv) when delivery of the Deposit Security by the Authorized","page_number":75,"box":{"x":116,"y":684,"width":696,"height":12}},{"id":"501947bb-3063-4f07-85c0-b412edb57f45","block_type":"box","text":"Participant (or by an investor on whose behalf the Authorized Participant is acting) would be restricted","page_number":75,"box":{"x":117,"y":699,"width":754,"height":13}},{"id":"a24e5882-3917-4233-a467-29d9c6ab42e3","block_type":"box","text":"under applicable securities or other local laws, (v) in connection with distribution payments to be made","page_number":75,"box":{"x":117,"y":715,"width":758,"height":12}},{"id":"67658519-104f-4570-b403-00a5363b6b3f","block_type":"box","text":"by the Fund, or (vi) in certain other situations.","page_number":75,"box":{"x":117,"y":730,"width":335,"height":13}},{"id":"ea971eb5-83a5-429f-b012-f1a14d914911","block_type":"box","text":"Cash Purchase Method.","page_number":75,"box":{"x":116,"y":758,"width":189,"height":9}},{"id":"77a1e124-90e8-4bdf-8d4c-7c396734956d","block_type":"box","text":"Although the Trust does not generally permit partial or full cash purchases of","page_number":75,"box":{"x":311,"y":758,"width":570,"height":12}},{"id":"7464ad6e-a78b-424d-a43d-c3f3201c709e","block_type":"box","text":"Creation Units of its funds, when partial or full cash purchases of Creation Units are available or","page_number":75,"box":{"x":117,"y":773,"width":710,"height":12}},{"id":"aba3977c-3282-4e16-b50d-132ba1490274","block_type":"box","text":"specified for the Fund, they will be effected in essentially the same manner as in-kind purchases","page_number":75,"box":{"x":116,"y":789,"width":714,"height":12}},{"id":"d7d4090f-3d1b-4e6d-ba8d-aa42fec72189","block_type":"box","text":"thereof. In the case of a partial or full cash purchase, the Authorized Participant must pay the cash","page_number":75,"box":{"x":116,"y":804,"width":730,"height":12}},{"id":"891be458-c05c-4113-bade-a61398751f79","block_type":"box","text":"equivalent of the Deposit Securities it would otherwise be required to provide through an in-kind","page_number":75,"box":{"x":116,"y":820,"width":709,"height":12}},{"id":"cc541e03-6023-4888-b426-75e47558a2be","block_type":"box","text":"purchase, plus the same Cash Component required to be paid by an in-kind purchaser.","page_number":75,"box":{"x":117,"y":835,"width":652,"height":12}},{"id":"e1652526-e539-4bb3-8c06-413077a9968e","block_type":"box","text":"Procedures for Creation of Creation Units.","page_number":75,"box":{"x":117,"y":862,"width":335,"height":10}},{"id":"48aa5b63-6bd2-4d79-80f8-1a2da8f21a98","block_type":"box","text":"To be eligible to place orders with the Distributor and to","page_number":75,"box":{"x":453,"y":862,"width":421,"height":12}},{"id":"ccf4265d-5857-4e60-aa6c-2cb149e16df6","block_type":"box","text":"create a Creation Unit of the Fund, an entity must be: (i) a “Participating Party,” i.e., a broker-dealer or","page_number":75,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"07cbc7de-dc6e-4ec4-9bbd-c7f98d4a5733","block_type":"box","text":"66","page_number":75,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"3c6c8654-ac51-465a-80c6-7d4bbd11af00","block_type":"box","text":"NM1026U-6004408-75/267","page_number":75,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"65e9de0e-68b9-4fa8-ac4f-6198b81aa88a","block_type":"box","text":"other participant in the clearing process through the Continuous Net Settlement System of the NSCC","page_number":76,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"6c13c31a-c871-4535-9ee0-2b1a300f9d41","block_type":"box","text":"(the “Clearing Process”), a clearing agency that is registered with the SEC, or (ii) a DTC Participant,","page_number":76,"box":{"x":117,"y":102,"width":744,"height":13}},{"id":"f42d76b6-1416-46bf-b1bf-8d1fb7873a12","block_type":"box","text":"and must have executed an agreement with the Distributor, with respect to creations and redemptions","page_number":76,"box":{"x":116,"y":118,"width":762,"height":12}},{"id":"bcff1430-bc6a-4dd4-97db-13a2fb1fb158","block_type":"box","text":"of Creation Units (“Authorized Participant Agreement”) (discussed below). A member or participant of a","page_number":76,"box":{"x":116,"y":134,"width":770,"height":12}},{"id":"431497b8-e926-4e8e-9b0b-e983eaad487e","block_type":"box","text":"clearing agency registered with the SEC which has a written agreement with the Fund or one of its","page_number":76,"box":{"x":116,"y":149,"width":735,"height":12}},{"id":"c5cfd611-b806-40df-be48-9388bed3844b","block_type":"box","text":"service providers that allows such member or participant to place orders for the purchase and","page_number":76,"box":{"x":116,"y":165,"width":700,"height":11}},{"id":"c1d075ce-7c96-4e64-be1a-f58b08a23ee0","block_type":"box","text":"redemption of Creation Units is referred to as an “Authorized Participant.” All shares of the Fund,","page_number":76,"box":{"x":117,"y":180,"width":721,"height":12}},{"id":"8e0ac5b1-ec91-45d9-8786-289774df5de8","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":76,"box":{"x":117,"y":196,"width":768,"height":11}},{"id":"cf36dad3-8b0d-4fd2-a522-66ae79e9d32b","block_type":"box","text":"DTC Participant.","page_number":76,"box":{"x":117,"y":211,"width":127,"height":12}},{"id":"37f71409-e999-446c-b445-b8d4d43eff57","block_type":"box","text":"Role of the Authorized Participant.","page_number":76,"box":{"x":117,"y":242,"width":274,"height":12}},{"id":"60e131e6-75c4-4c15-a6da-44c926a39c9c","block_type":"box","text":"Creation Units may be purchased only by or through a member","page_number":76,"box":{"x":392,"y":242,"width":479,"height":12}},{"id":"e2f6504f-8815-4f80-a9b1-a444627561cc","block_type":"box","text":"or participant of a clearing agency registered with the SEC, which has a written agreement with the","page_number":76,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"ee1e44b0-f79a-4c19-adc2-f256908baaf1","block_type":"box","text":"Fund or one of its service providers that allows such member or participant to place orders for the","page_number":76,"box":{"x":117,"y":273,"width":728,"height":12}},{"id":"0a386290-7651-49f6-af19-d15887d7bed6","block_type":"box","text":"purchase and redemption of Creation Units. Such Authorized Participant will agree, pursuant to the","page_number":76,"box":{"x":117,"y":289,"width":739,"height":12}},{"id":"3ac4b768-4f61-49e9-9d69-2cc9fa4063c9","block_type":"box","text":"terms of such Authorized Participant Agreement and on behalf of itself or any investor on whose behalf","page_number":76,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"b0478bef-7eb1-4e56-aa1b-46e992a73e71","block_type":"box","text":"it will act, to certain conditions, including that such Authorized Participant will make available in","page_number":76,"box":{"x":117,"y":320,"width":707,"height":12}},{"id":"726b6496-3ebf-4120-b609-f1a8cfd30fa9","block_type":"box","text":"advance of each purchase of shares an amount of cash sufficient to pay the Cash Component, once","page_number":76,"box":{"x":116,"y":335,"width":750,"height":12}},{"id":"67497371-6f14-4579-bca3-8b3700d49863","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":76,"box":{"x":116,"y":351,"width":753,"height":12}},{"id":"01ac2c19-0993-40c1-927c-7ce71b404cec","block_type":"box","text":"form, together with the transaction fees described below. An Authorized Participant, acting on behalf of","page_number":76,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"56bda531-5dfd-416e-8973-adc8e66d85b1","block_type":"box","text":"an investor, may require the investor to enter into an agreement with such Authorized Participant with","page_number":76,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"14cc34a5-354c-4828-b360-9287e7e8c6ca","block_type":"box","text":"respect to certain matters, including payment of the Cash Component. Investors who are not","page_number":76,"box":{"x":117,"y":397,"width":691,"height":12}},{"id":"00f9384e-8545-4d25-8432-aba2415ddca6","block_type":"box","text":"Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors","page_number":76,"box":{"x":116,"y":413,"width":768,"height":12}},{"id":"b4071854-2b94-46aa-9e2d-08277318117a","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":76,"box":{"x":116,"y":428,"width":772,"height":12}},{"id":"9a04fe49-5f11-47fc-bee6-276eaf3cef6e","block_type":"box","text":"Authorized Participant Agreement and that orders to purchase Creation Units may have to be placed","page_number":76,"box":{"x":116,"y":444,"width":752,"height":12}},{"id":"f30de153-2dd6-4c80-a751-9b6b2254bde0","block_type":"box","text":"by the investor’s broker through an Authorized Participant. As a result, purchase orders placed through","page_number":76,"box":{"x":117,"y":459,"width":768,"height":12}},{"id":"4f8fd8f1-7cc9-4e73-b1d7-92e7da89fa6d","block_type":"box","text":"an Authorized Participant may result in additional charges to such investor. The Trust does not expect","page_number":76,"box":{"x":116,"y":475,"width":761,"height":12}},{"id":"ad60af56-7868-4e94-a1de-9515fe374d57","block_type":"box","text":"to enter into an Authorized Participant Agreement with more than a small number of DTC Participants.","page_number":76,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"5ad3342c-bcbc-4408-b413-d618f6eb9b8b","block_type":"box","text":"A list of current Authorized Participants may be obtained from the Distributor. The Distributor has","page_number":76,"box":{"x":116,"y":506,"width":723,"height":12}},{"id":"57bf8f73-0be8-43d0-8bfa-06605b9b81c0","block_type":"box","text":"adopted guidelines regarding Authorized Participants’ transactions in Creation Units that are made","page_number":76,"box":{"x":116,"y":521,"width":736,"height":12}},{"id":"9543257c-80ec-49bb-8c3a-35799a0b53a8","block_type":"box","text":"available to all Authorized Participants. These guidelines set forth the processes and standards for","page_number":76,"box":{"x":116,"y":537,"width":736,"height":12}},{"id":"c90e5c12-d198-4d8c-9bd2-4fe3fb124cbf","block_type":"box","text":"Authorized Participants to transact with the Distributor and its agents in connection with creation and","page_number":76,"box":{"x":116,"y":552,"width":750,"height":12}},{"id":"cd34d60b-aab8-489a-9d25-f16316f2e6b4","block_type":"box","text":"redemption transactions. In addition, the Distributor may be appointed as the proxy of the Authorized","page_number":76,"box":{"x":117,"y":568,"width":751,"height":12}},{"id":"b36220af-b38b-4ce1-8976-02e31e2d8a8e","block_type":"box","text":"Participant and may be granted a power of attorney under its Authorized Participant Agreement.","page_number":76,"box":{"x":117,"y":583,"width":716,"height":12}},{"id":"ec0589e7-b5d0-4b88-909c-2e56e9767310","block_type":"box","text":"Purchase Orders.","page_number":76,"box":{"x":117,"y":614,"width":141,"height":10}},{"id":"3698c5fe-2fde-4a7b-91b4-410eafc329f4","block_type":"box","text":"To initiate an order for a Creation Unit, an A","page_number":76,"box":{"x":258,"y":614,"width":307,"height":11}},{"id":"46a68a7f-b9e8-4eb5-86cd-e81ff84f5030","block_type":"box","text":"Authorized Participant must submit to the","page_number":76,"box":{"x":565,"y":614,"width":305,"height":12}},{"id":"f9c1231f-09cd-47a3-b515-46c7a47ced56","block_type":"box","text":"Distributor or its agent an irrevocable order to pur","page_number":76,"box":{"x":117,"y":630,"width":357,"height":12}},{"id":"f57d1970-7b76-43f5-bd4f-e53004a35ae9","block_type":"box","text":"chase shares of the Fund, in proper form, generally","page_number":76,"box":{"x":474,"y":630,"width":378,"height":12}},{"id":"8d802962-fe21-49ae-9660-de2726adae44","block_type":"box","text":"before 4:00 p.m., Eastern time on any Business Day to","page_number":76,"box":{"x":117,"y":645,"width":398,"height":12}},{"id":"f5a52b2c-bc00-43e6-a6ef-a4dc31aa6270","block_type":"box","text":"receive that day’s NAV. The Distributor or its","page_number":76,"box":{"x":515,"y":645,"width":333,"height":12}},{"id":"3980e0a7-47c9-4b69-bca3-87313d93259f","block_type":"box","text":"agent will notify BFA and the custodian of such order.","page_number":76,"box":{"x":116,"y":661,"width":387,"height":12}},{"id":"1ec22644-c162-448c-a68a-7908c2b292f7","block_type":"box","text":"The custodian will then provide such information to","page_number":76,"box":{"x":509,"y":661,"width":369,"height":12}},{"id":"e5cc9c09-7291-4ecf-923f-e398910bbae7","block_type":"box","text":"any appropriate sub-custodian. Procedures and require","page_number":76,"box":{"x":116,"y":676,"width":402,"height":12}},{"id":"8438be06-3eae-4b0e-828a-aa5bd7cab382","block_type":"box","text":"ments governing the deliv","page_number":76,"box":{"x":519,"y":676,"width":187,"height":12}},{"id":"6ef0883d-1248-454a-b6f2-3a42ca78f172","block_type":"box","text":"ery of the Fund Deposit","page_number":76,"box":{"x":707,"y":676,"width":170,"height":12}},{"id":"cc966012-b44f-4609-9566-eecca0cb7a11","block_type":"box","text":"are set forth in the procedures handbook for Authorized Participants and may change from time to time.","page_number":76,"box":{"x":116,"y":692,"width":751,"height":12}},{"id":"d1e1b5b2-fe91-461f-a7b8-ab54041dd886","block_type":"box","text":"Investors, other than Authorized","page_number":76,"box":{"x":117,"y":707,"width":231,"height":11}},{"id":"c8d0fcf3-ef7e-4733-ac1c-e6de1724cf4e","block_type":"box","text":"Participants, are responsible for making arrangements for a creation","page_number":76,"box":{"x":355,"y":707,"width":494,"height":12}},{"id":"081ebd26-b804-444f-b7d5-7656b65eaebc","block_type":"box","text":"request to be made through an Authorized Participant.","page_number":76,"box":{"x":117,"y":723,"width":393,"height":12}},{"id":"7bee2045-d0f5-4d14-9a40-f8f6685cf829","block_type":"box","text":"The Distributor or its agent will provide a list of","page_number":76,"box":{"x":516,"y":723,"width":336,"height":12}},{"id":"82bb8552-029e-4acd-a022-6c3deda80601","block_type":"box","text":"current Authorized Participants upon request. Those plac","page_number":76,"box":{"x":116,"y":738,"width":415,"height":12}},{"id":"6c0b9ff4-058c-482b-844a-776914c03e81","block_type":"box","text":"ing orders to purchase Creation Units through","page_number":76,"box":{"x":532,"y":738,"width":331,"height":12}},{"id":"60c4702d-3d5b-4a70-80e9-b953f9adcd43","block_type":"box","text":"an Authorized Participant should allow sufficient time","page_number":76,"box":{"x":116,"y":754,"width":383,"height":12}},{"id":"3dac8175-a97d-4abf-b6b2-8fe419e5d2aa","block_type":"box","text":"to permit proper submission of the purchase order","page_number":76,"box":{"x":504,"y":754,"width":365,"height":12}},{"id":"2a50d698-e3f9-45c1-9c93-c3add6f9d045","block_type":"box","text":"to the Distributor or its agent by the Cutoff","page_number":76,"box":{"x":116,"y":769,"width":305,"height":12}},{"id":"a82818cb-231e-4e0f-8b68-3d8d2282a267","block_type":"box","text":"Time (as defined below) on such Business Day.","page_number":76,"box":{"x":425,"y":769,"width":346,"height":12}},{"id":"97ad58cb-3345-43d3-bf7a-3de4c8a62d85","block_type":"box","text":"The Authorized Participant must also make available on or before the contractual settlement date, by","page_number":76,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"4caf2cd6-8213-4e98-a34c-625e4f9ad3e8","block_type":"box","text":"means satisfactory to the Fund, immediately available or same day funds estimated by the Fund to be","page_number":76,"box":{"x":117,"y":816,"width":755,"height":12}},{"id":"f838196c-fd51-4ac5-a87b-aadc909ebd33","block_type":"box","text":"sufficient to pay the Cash Component next determined after acceptance of the purchase order,","page_number":76,"box":{"x":116,"y":831,"width":709,"height":12}},{"id":"05fb3b70-615b-4999-9d81-a3a2b8ef9839","block_type":"box","text":"together with the applicable purchase transaction fees. Those placing orders should ascertain the","page_number":76,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"bca2a361-46ea-4501-8442-9653631947cd","block_type":"box","text":"deadline for cash transfers by contacting the operations department of the broker or depositary","page_number":76,"box":{"x":116,"y":862,"width":709,"height":12}},{"id":"0d4d1780-273c-4821-b3c9-7fc5c65b9408","block_type":"box","text":"institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly","page_number":76,"box":{"x":117,"y":878,"width":741,"height":12}},{"id":"b1293582-8a16-4e25-89d7-6883eacebcdb","block_type":"box","text":"67","page_number":76,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ba23d518-2911-43c7-8d7c-0315e1f81147","block_type":"box","text":"NM1026U-6004408-76/267","page_number":76,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e2cf0371-dbb0-4e0d-a55f-a088da09fdc3","block_type":"box","text":"earlier than the Cutoff Time of the Fund. Investors should be aware that an Authorized Participant may","page_number":77,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"c8135a41-e970-46af-9f9b-99d1a4b742f9","block_type":"box","text":"require orders for purchases of shares placed with it to be in the particular form required by the","page_number":77,"box":{"x":117,"y":102,"width":708,"height":13}},{"id":"3ff08879-2dca-49db-b79c-f67664dfff3d","block_type":"box","text":"individual Authorized Participant.","page_number":77,"box":{"x":117,"y":118,"width":247,"height":12}},{"id":"a938fdd6-be71-429d-a7c3-4c4b71d2219d","block_type":"box","text":"The Authorized Participant is responsible for any and all expenses and costs incurred by the Fund,","page_number":77,"box":{"x":116,"y":146,"width":738,"height":12}},{"id":"6dd948ce-ddad-4417-8947-1654df018aa2","block_type":"box","text":"including any applicable cash amounts, in connection with any purchase order.","page_number":77,"box":{"x":117,"y":162,"width":589,"height":11}},{"id":"6d4ab396-b47d-43d2-9cbd-4d14bf2ff442","block_type":"box","text":"Timing of Submission of Purchase Orders.","page_number":77,"box":{"x":116,"y":189,"width":340,"height":12}},{"id":"588261ce-5983-44cc-9d8b-71e234a24bd2","block_type":"box","text":"An Authorized Participant must submit an irrevocable","page_number":77,"box":{"x":457,"y":189,"width":405,"height":12}},{"id":"d5d10304-137f-4a1d-99f4-b232033551c9","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":77,"box":{"x":116,"y":205,"width":766,"height":12}},{"id":"1d61a659-4a4d-4dc1-beb3-437c78d7dd48","block_type":"box","text":"order to receive that day’s NAV. Creation Orders must be transmitted by an Authorized Participant in","page_number":77,"box":{"x":116,"y":220,"width":752,"height":12}},{"id":"ff28df2d-ce0a-4c73-a940-cfc3a451e9e9","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":77,"box":{"x":116,"y":236,"width":732,"height":12}},{"id":"659d82b1-6c07-42ad-9dcc-51b034a3ed1b","block_type":"box","text":"Authorized Participant Agreement. Economic or market disruptions or changes, or telephone or other","page_number":77,"box":{"x":116,"y":251,"width":755,"height":12}},{"id":"9e50d53d-3914-437f-bd02-3dd94fa8156f","block_type":"box","text":"communication failure, may impede the ability to reach the Distributor or its agent or an Authorized","page_number":77,"box":{"x":116,"y":267,"width":736,"height":12}},{"id":"98b2d59a-79d8-4a0b-9acd-faaf4d0c16fb","block_type":"box","text":"Participant. Orders to create shares of the Fund that are submitted on the Business Day immediately","page_number":77,"box":{"x":117,"y":282,"width":752,"height":12}},{"id":"b8008a0c-5411-46e6-b23e-953b70d06637","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":77,"box":{"x":117,"y":298,"width":761,"height":12}},{"id":"36ca965b-60b7-4fbf-ac24-96c98495c224","block_type":"box","text":"market are closed may not be accepted. The Fund’s deadline specified above for the submission of","page_number":77,"box":{"x":117,"y":313,"width":742,"height":12}},{"id":"ec793d5e-fc2c-4655-8e0f-6f285bbe738f","block_type":"box","text":"purchase orders is referred to as the Fund’s “Cutoff Time.” The Distributor or its agent, in their","page_number":77,"box":{"x":117,"y":329,"width":701,"height":12}},{"id":"4c86398e-92b3-451c-8bf6-587766ba5a7c","block_type":"box","text":"discretion, may permit the submission of such orders and requests by or through an Authorized","page_number":77,"box":{"x":116,"y":344,"width":712,"height":12}},{"id":"e78c1e72-2eed-437b-b9f4-52dc0b7e2fe5","block_type":"box","text":"Participant at any time (including on days on which the Listing Exchange is not open for business) via","page_number":77,"box":{"x":117,"y":360,"width":756,"height":12}},{"id":"a29978d6-050a-446d-b18a-bb8a2815dc19","block_type":"box","text":"communication through the facilities of the Distributor’s or its agent’s proprietary website maintained for","page_number":77,"box":{"x":116,"y":375,"width":771,"height":12}},{"id":"4b93612f-4582-4ecc-81a6-2924206645ec","block_type":"box","text":"this purpose. Purchase orders and redemption requests, if accepted by the Trust, will be processed","page_number":77,"box":{"x":116,"y":391,"width":743,"height":12}},{"id":"e80e33d7-03d5-41ca-abb8-f7409c0eba18","block_type":"box","text":"based on the NAV next determined after such acceptance in accordance with the Fund’s Cutoff Times","page_number":77,"box":{"x":117,"y":406,"width":762,"height":12}},{"id":"0bceae96-1305-45d1-9316-5ecb68b05ff5","block_type":"box","text":"as provided in the Authorized Participant Agreement and disclosed in this SAI.","page_number":77,"box":{"x":116,"y":422,"width":586,"height":12}},{"id":"81bbf43e-6ec5-4f58-8e1e-fbd0486220d0","block_type":"box","text":"Acceptance of Orders for Creation Units.","page_number":77,"box":{"x":116,"y":450,"width":331,"height":12}},{"id":"1b27b218-dafc-4e00-9fbd-4d372160d619","block_type":"box","text":"Subject to the conditions that (i) an irrevocable purchase","page_number":77,"box":{"x":448,"y":450,"width":424,"height":12}},{"id":"6b5418f5-3719-4864-8244-14ae45426001","block_type":"box","text":"order has been submitted by the Authorized Participant (either on its own or another investor’s behalf)","page_number":77,"box":{"x":116,"y":465,"width":761,"height":12}},{"id":"4842350e-5a8a-40d4-b07c-bcb5af35dcf2","block_type":"box","text":"and (ii) arrangements satisfactory to the Fund are in place for payment of the Cash Component and","page_number":77,"box":{"x":116,"y":481,"width":745,"height":12}},{"id":"54959849-b556-4737-873e-c57b8bd3a613","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":77,"box":{"x":116,"y":497,"width":757,"height":12}},{"id":"17290941-0bcc-4a44-b0fa-37a1ec39bc6a","block_type":"box","text":"(and the right of the Distributor and BFA) to reject any order until acceptance, as set forth below.","page_number":77,"box":{"x":117,"y":512,"width":720,"height":12}},{"id":"f592196a-eee9-40f3-98c0-ed900c979ab0","block_type":"box","text":"Once the Fund has accepted an order, upon the next determination of the net asset value of the","page_number":77,"box":{"x":116,"y":540,"width":718,"height":12}},{"id":"a1855845-1061-4a6c-b648-5023ac24232a","block_type":"box","text":"shares, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such net","page_number":77,"box":{"x":116,"y":556,"width":752,"height":12}},{"id":"86693d9f-6b57-47d8-8dd1-7cb29eb0c0f1","block_type":"box","text":"asset value. The Distributor or its agent will then transmit a confirmation of acceptance to the","page_number":77,"box":{"x":116,"y":571,"width":694,"height":13}},{"id":"7afbd14b-5f66-4cba-85dd-a317d39db241","block_type":"box","text":"Authorized Participant that placed the order.","page_number":77,"box":{"x":116,"y":587,"width":333,"height":12}},{"id":"dea40478-3767-4594-bb03-21bcc920552c","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":77,"box":{"x":116,"y":615,"width":767,"height":12}},{"id":"1471a2d7-47bf-435c-ad43-ef3e3f1b5385","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":77,"box":{"x":116,"y":631,"width":759,"height":12}},{"id":"842e074c-2463-417f-b459-c02925e7d9ae","block_type":"box","text":"Investment Company Act. For example, the Fund may reject or revoke a creation order transmitted to it","page_number":77,"box":{"x":117,"y":646,"width":770,"height":12}},{"id":"daae873a-03c2-4544-9189-f71f464e916f","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":77,"box":{"x":117,"y":662,"width":760,"height":12}},{"id":"79d1950f-a4bf-4280-887d-034007101428","block_type":"box","text":"shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (iii) the","page_number":77,"box":{"x":116,"y":678,"width":715,"height":12}},{"id":"49c23682-6396-4669-9cea-a8fa2f346cff","block_type":"box","text":"Deposit Securities delivered do not conform to the identity and number of shares specified, as","page_number":77,"box":{"x":117,"y":693,"width":695,"height":12}},{"id":"7c9a6892-4329-42cc-9ae4-a36756904b1c","block_type":"box","text":"described above; (iv) acceptance of the Deposit Securities is not legally required or would, in the","page_number":77,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"b00eb5da-71c5-4f1e-b9f9-e52dc0a52380","block_type":"box","text":"opinion of counsel, be unlawful; or (v) circumstances outside the control of the Fund, the Distributor or","page_number":77,"box":{"x":116,"y":725,"width":757,"height":12}},{"id":"f10b7ab6-e53b-4bb7-88ed-0f8e17b65618","block_type":"box","text":"its agent and BFA make it impracticable to process purchase orders. The Distributor or its agent shall","page_number":77,"box":{"x":117,"y":740,"width":750,"height":12}},{"id":"e1c14e02-6f51-464c-8105-0cbe1b9e9351","block_type":"box","text":"notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on behalf of","page_number":77,"box":{"x":117,"y":756,"width":752,"height":12}},{"id":"f506914e-6236-4775-8570-e47ce4e0373b","block_type":"box","text":"such purchaser of its rejection of such order. The Fund, State Street, the sub-custodian and the","page_number":77,"box":{"x":116,"y":771,"width":709,"height":13}},{"id":"6ccc8ea8-3fe1-44c0-8d0e-a9d1588fb066","block_type":"box","text":"Distributor or its agent are under no duty, however, to give notification of any defects or irregularities in","page_number":77,"box":{"x":117,"y":787,"width":759,"height":12}},{"id":"e5b48d37-6ffe-45ed-9168-0d87290a2c03","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":77,"box":{"x":116,"y":803,"width":764,"height":12}},{"id":"7c4a8c9e-e2ae-4976-841e-2fa311d30451","block_type":"box","text":"Issuance of a Creation Unit.","page_number":77,"box":{"x":117,"y":831,"width":223,"height":9}},{"id":"2e160e0a-acb1-48c8-8361-ded2eeea81be","block_type":"box","text":"Except as provided herein, a Creation Unit will not be issued until the","page_number":77,"box":{"x":341,"y":831,"width":511,"height":12}},{"id":"eb811910-630d-4bb6-a78f-f7fb0347d084","block_type":"box","text":"transfer of good title to the Fund of the Deposit Securities and the payment of the Cash Component","page_number":77,"box":{"x":116,"y":846,"width":735,"height":12}},{"id":"a396f367-f858-4335-9145-25d256ddc825","block_type":"box","text":"have been completed. When the sub-custodian has confirmed to the custodian that the securities","page_number":77,"box":{"x":117,"y":862,"width":718,"height":12}},{"id":"4436333c-3f81-4f46-8c5a-6ca12447e58f","block_type":"box","text":"included in the Fund Deposit (or the cash value thereof) have been delivered to the account of the","page_number":77,"box":{"x":117,"y":878,"width":724,"height":12}},{"id":"888ef751-9567-45be-b74d-2b8a71f0655d","block_type":"box","text":"68","page_number":77,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ecd87bf7-ab6e-4607-9ecd-fe46e7da24b7","block_type":"box","text":"NM1026U-6004408-77/267","page_number":77,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2780f31a-aaff-490b-9bbc-6d51a8991d4b","block_type":"box","text":"relevant sub-custodian or sub-custodians, the Distributor or its agent and BFA shall be notified of such","page_number":78,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"61c0dd6c-7160-40e9-9917-d4abc59dc488","block_type":"box","text":"delivery and the Fund will issue and cause the delivery of the Creation Unit. Creation Units are generally","page_number":78,"box":{"x":116,"y":103,"width":771,"height":12}},{"id":"d624da2c-c130-4bb9-aaf0-0ec6981cbff5","block_type":"box","text":"issued on a “T+2 basis” (","page_number":78,"box":{"x":117,"y":118,"width":182,"height":12}},{"id":"5392d664-4709-47c6-b5c8-38808093a283","block_type":"box","text":"i.e.","page_number":78,"box":{"x":300,"y":119,"width":20,"height":9}},{"id":"bd7a4b49-196c-4d8c-b6a2-8a02b3898ebf","block_type":"box","text":", two Business Days after trade date). However, the Fund reserves the right","page_number":78,"box":{"x":323,"y":118,"width":560,"height":12}},{"id":"ff01cde5-7f8c-4858-943a-305ca60f37a0","block_type":"box","text":"to settle Creation Unit transactions on a basis other than T+2, including a shorter settlement period, if","page_number":78,"box":{"x":116,"y":134,"width":748,"height":12}},{"id":"ad1ae1f1-b0ab-4fad-9397-c8eaeaf64d3b","block_type":"box","text":"necessary or appropriate under the circumstances and compliant with applicable law.","page_number":78,"box":{"x":117,"y":150,"width":630,"height":12}},{"id":"20938083-bf4c-4ce0-a45b-2725fe3965bf","block_type":"box","text":"To the extent contemplated by an Authorized Participant Agreement with the Distributor, the Fund will","page_number":78,"box":{"x":116,"y":181,"width":759,"height":12}},{"id":"87221c42-c2ee-4b8e-bf07-cd66d040bba1","block_type":"box","text":"issue Creation Units to such Authorized Participant, notwithstanding the fact that the corresponding","page_number":78,"box":{"x":117,"y":196,"width":741,"height":13}},{"id":"05d1d456-014b-4df8-8f3d-e9cd52a90ba1","block_type":"box","text":"Fund Deposits have not been received in part or in whole, in reliance on the undertaking of the","page_number":78,"box":{"x":117,"y":212,"width":706,"height":12}},{"id":"86e254cc-1232-4d8a-ba7d-4f3f8d4d082b","block_type":"box","text":"Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking","page_number":78,"box":{"x":116,"y":228,"width":769,"height":12}},{"id":"9c8a0374-31ce-4c59-b1af-075e0ea7df7e","block_type":"box","text":"shall be secured by such Authorized Participant’s delivery and maintenance of collateral as set forth in","page_number":78,"box":{"x":116,"y":243,"width":764,"height":12}},{"id":"72e00c8a-204f-4b8f-9d94-bdd846809fc6","block_type":"box","text":"the handbook for Authorized Participants. The Trust may use such collateral at any time to buy Deposit","page_number":78,"box":{"x":116,"y":259,"width":770,"height":12}},{"id":"77b6963f-5ebc-4233-95cb-e6878bf590eb","block_type":"box","text":"Securities for the Fund. Such collateral must be delivered no later than the time specified by the Fund","page_number":78,"box":{"x":116,"y":275,"width":759,"height":12}},{"id":"9151b80a-2af8-46fe-90b6-04c66352cbd7","block_type":"box","text":"or its custodian on the contractual settlement date. Information concerning the Fund’s current","page_number":78,"box":{"x":116,"y":290,"width":697,"height":12}},{"id":"694edfe4-9b70-4141-9874-0b5895c87ffe","block_type":"box","text":"procedures for collateralization of missing Deposit Securities is available from the Distributor or its","page_number":78,"box":{"x":117,"y":306,"width":730,"height":12}},{"id":"688ba1b0-a409-4571-afb1-12ed97c09625","block_type":"box","text":"agent. The Authorized Participant Agreement will permit the Fund to buy the missing Deposit","page_number":78,"box":{"x":116,"y":322,"width":694,"height":12}},{"id":"6f7d60f5-e736-4907-a01b-083e74da7c9c","block_type":"box","text":"Securities at any time and will subject the Authorized Participant to liability for any shortfall between the","page_number":78,"box":{"x":116,"y":337,"width":771,"height":12}},{"id":"8bd0d244-1938-4b49-930e-89af1bab28d8","block_type":"box","text":"cost to the Fund of purchasing such securities and the collateral including, without limitation, liability for","page_number":78,"box":{"x":116,"y":353,"width":769,"height":12}},{"id":"8117b6f0-cd9c-4d21-b681-8a8309b959bb","block_type":"box","text":"related brokerage, borrowings and other charges.","page_number":78,"box":{"x":117,"y":369,"width":372,"height":11}},{"id":"49817b69-0bd2-45cc-869b-82bbd9d09bc3","block_type":"box","text":"In certain cases, Authorized Participants may create and redeem Creation Units on the same trade","page_number":78,"box":{"x":117,"y":400,"width":738,"height":12}},{"id":"d4462663-bc8e-4f1b-a970-ff3dc6633796","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":78,"box":{"x":116,"y":416,"width":754,"height":12}},{"id":"dbdec106-70f5-47e9-85a2-1ce994d89f67","block_type":"box","text":"require a representation from the Authorized Participants that the creation and redemption transactions","page_number":78,"box":{"x":117,"y":431,"width":769,"height":12}},{"id":"ce135816-2f4b-4475-8e64-4443f6762fd0","block_type":"box","text":"are for separate beneficial owners. All questions as to the number of shares of each security in the","page_number":78,"box":{"x":116,"y":447,"width":736,"height":12}},{"id":"3ad59cfd-e371-43a9-847e-8f9da4fc7d15","block_type":"box","text":"Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be","page_number":78,"box":{"x":117,"y":463,"width":747,"height":12}},{"id":"bd289939-1885-4e71-8828-999aae9ecbca","block_type":"box","text":"delivered shall be determined by the Fund and the Fund’s determination shall be final and binding.","page_number":78,"box":{"x":116,"y":478,"width":735,"height":13}},{"id":"e191da25-f9a5-4de0-842f-cabf29e1e813","block_type":"box","text":"Costs Associated with Creation Transactions.","page_number":78,"box":{"x":116,"y":510,"width":365,"height":9}},{"id":"1dca7920-ebf0-43e7-97ff-fc6aac96312d","block_type":"box","text":"A standard creation transaction fee is imposed to","page_number":78,"box":{"x":482,"y":510,"width":375,"height":12}},{"id":"f6192097-7178-4d04-8634-d118a82f6f78","block_type":"box","text":"offset the transfer and other transaction costs associated with the issuance of Creation Units.","page_number":78,"box":{"x":116,"y":525,"width":696,"height":10}},{"id":"382ad368-c920-4a7a-937d-3cfd4e3456ae","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain","page_number":78,"box":{"x":117,"y":557,"width":764,"height":12}},{"id":"7e21c174-ce3c-431b-8b8f-e96f7293815b","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":78,"box":{"x":116,"y":573,"width":756,"height":12}},{"id":"243bb2bb-66fa-4c86-a2c5-0edfc59eab8e","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL will receive from an Authorized","page_number":78,"box":{"x":117,"y":588,"width":730,"height":12}},{"id":"40065a68-3918-4fbe-ab88-944c6c480e08","block_type":"box","text":"Participant a standard transaction fee on each creation order, which consists of (1) a fee for providing","page_number":78,"box":{"x":117,"y":604,"width":757,"height":12}},{"id":"26b77c05-ed37-4680-9309-64f754ed06f8","block_type":"box","text":"the ETF Services (the “ETF Servicing Fee”) and (2) transfer, processing and other transaction costs","page_number":78,"box":{"x":116,"y":620,"width":746,"height":12}},{"id":"0ab82f20-cf62-4306-99c6-3b16b807820a","block_type":"box","text":"charged by the Fund custodian in connection with the issuance of Creation Units for such creation","page_number":78,"box":{"x":116,"y":636,"width":732,"height":12}},{"id":"7baa89a2-1df7-4bf3-9c14-9d41cdafbfb3","block_type":"box","text":"order (“Custody Transaction Costs”). BRIL is entitled to retain the ETF Servicing Fee pursuant to the","page_number":78,"box":{"x":116,"y":651,"width":750,"height":12}},{"id":"2ad4f10c-c85e-418e-bee6-7ab789263d9a","block_type":"box","text":"ETF Services Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund","page_number":78,"box":{"x":117,"y":667,"width":696,"height":12}},{"id":"29077547-ba22-42f3-9808-851ba26e608d","block_type":"box","text":"custodian according to the amounts invoiced by such custodian.","page_number":78,"box":{"x":116,"y":683,"width":474,"height":12}},{"id":"b6b2f77f-1201-4e1c-b3fb-93c721693b2d","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":78,"box":{"x":116,"y":714,"width":699,"height":12}},{"id":"371d0a6f-a9ec-490d-812a-d4e6dd34419c","block_type":"box","text":"purchased, which amount will vary among different BlackRock-advised funds based on a number of","page_number":78,"box":{"x":117,"y":730,"width":739,"height":12}},{"id":"3763d08e-8c23-4b4f-9d2c-84a7e73d9539","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":78,"box":{"x":116,"y":746,"width":739,"height":12}},{"id":"8cec36c5-a5b3-4f4f-92f2-b56d027316e7","block_type":"box","text":"fund’s Creation Basket, among other variables. The ETF Servicing Fee may be equal to zero in certain","page_number":78,"box":{"x":116,"y":761,"width":761,"height":13}},{"id":"e51e14ff-1cef-46cd-9e45-ca4d0835e9c1","block_type":"box","text":"instances, such as for creation transactions that consist solely of cash. The actual Custody Transaction","page_number":78,"box":{"x":117,"y":777,"width":764,"height":12}},{"id":"0e60bfa3-3719-47a1-8874-6d197f59696b","block_type":"box","text":"Costs vary per order based on the number of trades, underlying markets and settlement locations","page_number":78,"box":{"x":117,"y":793,"width":723,"height":12}},{"id":"04d4394f-73c7-4ec1-ac01-e77d5f01b734","block_type":"box","text":"associated with the issuance of a Creation Unit. The following table sets forth for the Fund an estimate","page_number":78,"box":{"x":116,"y":809,"width":760,"height":12}},{"id":"1e060e34-a33b-42da-a650-2e1cb180b5d2","block_type":"box","text":"of the creation transaction fee that would have been charged as of July 31, 2026 if the Fund had","page_number":78,"box":{"x":116,"y":824,"width":714,"height":13}},{"id":"22bd13cb-d33f-44ff-b044-fad391358df2","block_type":"box","text":"issued a Creation Unit on that date. The actual fee that would have been charged to an Authorized","page_number":78,"box":{"x":117,"y":840,"width":736,"height":12}},{"id":"c1df3f0f-6e2e-47e8-830e-d7e4c49ca474","block_type":"box","text":"Participant in connection with a creation order will vary over time depending on the factors discussed","page_number":78,"box":{"x":117,"y":856,"width":752,"height":12}},{"id":"bbe97e8c-efb9-4556-a25e-0a07bc3ac14b","block_type":"box","text":"above, and may be higher than the fee set forth below.","page_number":78,"box":{"x":116,"y":872,"width":412,"height":12}},{"id":"c4870bfe-75a5-41b6-9165-91e7277997b1","block_type":"box","text":"69","page_number":78,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"944cc301-54c6-43b4-8fab-df107b67b370","block_type":"box","text":"NM1026U-6004408-78/267","page_number":78,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1f0bf787-057f-4073-9d31-4174ef05c964","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":79,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"abca890c-c0e0-4957-bf3b-6eac88d7d262","block_type":"box","text":"if a creation transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":79,"box":{"x":117,"y":103,"width":729,"height":12}},{"id":"73cd4219-d1e9-4a05-9494-cda5fa41caaa","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":79,"box":{"x":117,"y":119,"width":762,"height":12}},{"id":"1cdce92f-f7cd-49b0-9322-af5aa26930b4","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":79,"box":{"x":116,"y":135,"width":703,"height":12}},{"id":"53866d81-642b-4d4f-a03a-bb2363f75c84","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":79,"box":{"x":116,"y":150,"width":743,"height":12}},{"id":"af0ae9f5-2dc1-4760-b343-ca171b5023ac","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":79,"box":{"x":117,"y":166,"width":743,"height":12}},{"id":"fdb97faf-ac78-4fd9-a48c-eb4ccc2649d9","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":79,"box":{"x":116,"y":182,"width":702,"height":12}},{"id":"69c095d8-c1bf-4c32-adc2-65809a2d2ac5","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":79,"box":{"x":117,"y":198,"width":769,"height":12}},{"id":"39c3938f-3e3e-4a95-8c50-640c0bb8e454","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":79,"box":{"x":117,"y":214,"width":719,"height":11}},{"id":"c8f0f8d5-941a-4df5-b338-493a59b51024","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":79,"box":{"x":116,"y":229,"width":734,"height":12}},{"id":"52748a73-44e4-4a50-b34b-333540790b5d","block_type":"box","text":"amounts shown below.","page_number":79,"box":{"x":116,"y":245,"width":176,"height":9}},{"id":"2bd1f025-8a6a-4a4e-9062-53d93e797271","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Deposit Securities to the Fund.","page_number":79,"box":{"x":116,"y":272,"width":723,"height":12}},{"id":"5464e2f1-419a-42c7-9666-788f1da71de8","block_type":"box","text":"Certain fees/costs associated with creation transactions may be waived in certain circumstances.","page_number":79,"box":{"x":117,"y":287,"width":725,"height":12}},{"id":"df6e98f4-b798-415e-832e-1aa55d3251a3","block_type":"box","text":"Investors who use the services of a broker or other financial intermediary to acquire Fund shares may","page_number":79,"box":{"x":117,"y":303,"width":759,"height":12}},{"id":"ca313b10-bd3f-45b5-aada-a0f3f559d48b","block_type":"box","text":"be charged a fee for such services.","page_number":79,"box":{"x":117,"y":318,"width":265,"height":12}},{"id":"b0cfc12a-5120-48d1-91c8-3c9f757dd171","block_type":"box","text":"The following table sets forth the Fund’s estimated creation transaction fee as of July 31, 2026 and","page_number":79,"box":{"x":116,"y":345,"width":738,"height":12}},{"id":"88573918-f75a-47db-96f4-3c3a628a5244","block_type":"box","text":"maximum additional charge (as described above):","page_number":79,"box":{"x":117,"y":361,"width":376,"height":12}},{"id":"992a54da-1f25-43b7-84d7-5ce5df549a5f","block_type":"box","text":"Standard","page_number":79,"box":{"x":380,"y":400,"width":57,"height":8}},{"id":"ede904d8-e6dd-4a9c-a41b-83d4fe6cee32","block_type":"box","text":"Creation","page_number":79,"box":{"x":382,"y":410,"width":53,"height":8}},{"id":"8c37d18d-4b92-4677-99a5-d42d90d10dec","block_type":"box","text":"Transaction Fee*","page_number":79,"box":{"x":355,"y":421,"width":108,"height":7}},{"id":"4ccac761-d462-403b-8b70-231b10bad59b","block_type":"box","text":"Maximum Additional","page_number":79,"box":{"x":526,"y":410,"width":129,"height":8}},{"id":"c8fc0ac5-da9e-4858-8c57-d08ae83fc6a6","block_type":"box","text":"Charge**","page_number":79,"box":{"x":563,"y":421,"width":56,"height":9}},{"id":"d4ef2ac9-b55c-4c3f-a4ea-672cb4f6a4fd","block_type":"box","text":"$417 3%","page_number":79,"box":{"x":391,"y":439,"width":216,"height":11}},{"id":"e79a7e61-2bc3-4953-9484-8b78bb3e58cd","block_type":"box","text":"* The standard creation transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The standard","page_number":79,"box":{"x":143,"y":481,"width":732,"height":10}},{"id":"3d89fe86-5ac0-41d9-b539-2b9840f136a7","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":79,"box":{"x":170,"y":494,"width":706,"height":10}},{"id":"28730ba8-7c88-454c-96c6-3219da5e4b64","block_type":"box","text":"set forth above. Estimated fee as of July 31, 2026.","page_number":79,"box":{"x":170,"y":507,"width":297,"height":9}},{"id":"03170ab5-33a3-4baa-975b-9dc302e5dd32","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":79,"box":{"x":143,"y":520,"width":364,"height":9}},{"id":"24be320c-66ac-4e75-bae7-b3f34494cf1a","block_type":"box","text":"Redemption of Creation Units.","page_number":79,"box":{"x":117,"y":545,"width":240,"height":12}},{"id":"3b02288f-7a19-4ee3-a172-078736672c8b","block_type":"box","text":"Shares of the Fund may be redeemed by Authorized Participants only","page_number":79,"box":{"x":358,"y":545,"width":529,"height":12}},{"id":"a9ced75c-39c8-4a6f-9b01-548e42365e1b","block_type":"box","text":"in Creation Units at their NAV next determined after receipt of a redemption request in proper form by","page_number":79,"box":{"x":117,"y":560,"width":757,"height":12}},{"id":"5414b159-56eb-46f1-af56-f8dc5902e9fe","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":79,"box":{"x":116,"y":576,"width":752,"height":12}},{"id":"983c2ee4-d83b-453a-9d7b-b66d162d6271","block_type":"box","text":"less than Creation Units. There can be no assurance, however, that there will be sufficient liquidity in","page_number":79,"box":{"x":117,"y":591,"width":751,"height":12}},{"id":"9992b55b-5a1a-4ec9-8d48-cbc10a20627b","block_type":"box","text":"the secondary market at any time to permit assembly of a Creation Unit. Investors should expect to","page_number":79,"box":{"x":116,"y":607,"width":740,"height":12}},{"id":"b3759bbc-484e-4cd3-a972-b13de0e5c1f2","block_type":"box","text":"incur brokerage and other costs in connection with assembling a sufficient number of shares to","page_number":79,"box":{"x":117,"y":622,"width":708,"height":12}},{"id":"b1e6c596-c97d-4f31-a216-455a1beace93","block_type":"box","text":"constitute a Creation Unit that could be redeemed by an Authorized Participant. Beneficial owners also","page_number":79,"box":{"x":116,"y":638,"width":767,"height":12}},{"id":"5ad1a782-bd73-4b1e-ba50-b3ee7135a616","block_type":"box","text":"may sell shares in the secondary market.","page_number":79,"box":{"x":117,"y":653,"width":309,"height":12}},{"id":"42c07540-1b3b-46a0-97af-08d98ef5c1db","block_type":"box","text":"The Fund generally redeems Creation Units for Fund Securities. Please see the","page_number":79,"box":{"x":116,"y":680,"width":592,"height":12}},{"id":"64d8afb7-bd03-442a-a837-f63cd6b1d9bf","block_type":"box","text":"Cash Redemption","page_number":79,"box":{"x":715,"y":680,"width":133,"height":12}},{"id":"9b8bbf6a-6535-4a29-bf9b-abcbcd30877e","block_type":"box","text":"Method","page_number":79,"box":{"x":116,"y":696,"width":57,"height":9}},{"id":"3605aad6-4e3c-45ac-b36a-fa60fecc8a82","block_type":"box","text":"section below and the following discussion summarizing the in-kind method for further","page_number":79,"box":{"x":177,"y":696,"width":637,"height":12}},{"id":"6a5296c7-0bc2-4571-a8dd-d40f88e1a424","block_type":"box","text":"information on redeeming Creation Units of the Fund.","page_number":79,"box":{"x":117,"y":711,"width":394,"height":12}},{"id":"16fe4b27-5279-445c-86f9-24ffc1de3deb","block_type":"box","text":"The Fund publishes the designated portfolio of securities (including any portion of such securities for","page_number":79,"box":{"x":116,"y":738,"width":745,"height":12}},{"id":"663906a2-e6da-4765-862f-e9a41e796cd2","block_type":"box","text":"which cash may be substituted) that will be applicable to redemption requests received in proper form","page_number":79,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"d32b67c1-5796-4a13-9bca-3bdd8cc0fc4f","block_type":"box","text":"(as defined below) on that day (“Fund Securities” or “Redemption Basket”), and an amount of cash (the","page_number":79,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"5cd82822-ea4c-494e-8668-3fe695d26f9a","block_type":"box","text":"“Cash Amount,” as described below) in order to effect redemptions of Creation Units of the Fund. Such","page_number":79,"box":{"x":116,"y":785,"width":762,"height":12}},{"id":"cdde071c-d0ba-4c84-a1da-048debca868d","block_type":"box","text":"Fund Securities and Cash Amount will remain in effect until such time as the next announced","page_number":79,"box":{"x":117,"y":800,"width":689,"height":10}},{"id":"dea894e3-7f5a-4821-adca-5b0db1ffbafa","block_type":"box","text":"composition of the Fund Securities and Cash Amount is made available. The Fund Securities and","page_number":79,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"0f16e80e-8a5c-4e35-9666-1f6960409b5d","block_type":"box","text":"Cash Amount are subject to possible amendment or correction. Fund Securities received on","page_number":79,"box":{"x":117,"y":831,"width":687,"height":12}},{"id":"da5f9605-02cf-47a2-9ca0-97e3379cd5f7","block_type":"box","text":"redemption may not be identical to Deposit Securities that are applicable to creations of Creation Units.","page_number":79,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"8ea27ec8-92df-45dc-a892-ef093966d9c4","block_type":"box","text":"Procedures and requirements governing redemption transactions are set forth in the handbook for","page_number":79,"box":{"x":117,"y":862,"width":731,"height":12}},{"id":"da094c56-888b-4410-a71f-c97f6ad32794","block_type":"box","text":"Authorized Participants and may change from time to time.","page_number":79,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"67428888-13d5-453e-8c0f-9710a43b0cf7","block_type":"box","text":"70","page_number":79,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"51c1aa2a-2ef6-4144-9123-a47482b981d5","block_type":"box","text":"NM1026U-6004408-79/267","page_number":79,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f4996237-979b-4386-9dc4-cca2ae1a9e7c","block_type":"box","text":"Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a","page_number":80,"box":{"x":117,"y":87,"width":713,"height":12}},{"id":"f9a2ff95-b850-4c9d-a1d0-b6545900d47d","block_type":"box","text":"Creation Unit generally consist of Fund Securities, plus the Cash Amount, which is an amount equal to","page_number":80,"box":{"x":117,"y":102,"width":765,"height":13}},{"id":"71867b21-e53e-4e4c-badb-0b5abd32dd19","block_type":"box","text":"the difference between the net asset value of the shares being redeemed, as next determined after the","page_number":80,"box":{"x":116,"y":118,"width":768,"height":12}},{"id":"8bda3d96-b801-4c22-a9ec-abae8e6f0e79","block_type":"box","text":"receipt of a redemption request in proper form, and the value of Fund Securities, less a redemption","page_number":80,"box":{"x":117,"y":134,"width":739,"height":11}},{"id":"8f55e722-e4e6-4980-a07e-5d91f2cd3eb9","block_type":"box","text":"transaction fee (as described below).","page_number":80,"box":{"x":116,"y":149,"width":279,"height":12}},{"id":"d8bb726c-cce5-4494-af9e-80172c1f1263","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":80,"box":{"x":116,"y":177,"width":762,"height":12}},{"id":"7c72747c-93a9-491f-9f72-08ece5893e1b","block_type":"box","text":"certain circumstances, including: (i) when the delivery of a Fund Security to the Authorized Participant","page_number":80,"box":{"x":116,"y":192,"width":760,"height":13}},{"id":"4c305425-9c13-4dda-8094-12eeb40fad46","block_type":"box","text":"(or to an investor on whose behalf the Authorized Participant is acting) would be restricted under","page_number":80,"box":{"x":117,"y":208,"width":720,"height":12}},{"id":"a1105eb6-370f-4099-ad7d-db483c87b490","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":80,"box":{"x":116,"y":223,"width":755,"height":13}},{"id":"da90a363-85eb-4f4a-a345-5ef060f37540","block_type":"box","text":"Security to the Authorized Participant would result in the disposition of the Fund Security by the","page_number":80,"box":{"x":116,"y":239,"width":712,"height":12}},{"id":"361adb9d-be5d-4938-bbd7-5ae246a15442","block_type":"box","text":"Authorized Participant due to restrictions under applicable securities or other local laws, (iii) when the","page_number":80,"box":{"x":116,"y":254,"width":755,"height":13}},{"id":"800f897b-ed06-4dd3-aa74-8069ef90e62b","block_type":"box","text":"delivery of a Fund Security to the Authorized Participant would result in unfavorable tax treatment,","page_number":80,"box":{"x":116,"y":270,"width":732,"height":12}},{"id":"01ecde54-eafd-47f4-b022-5582490dcd71","block_type":"box","text":"(iv) when a Fund Security cannot be settled or otherwise delivered in time to facilitate an in-kind","page_number":80,"box":{"x":117,"y":285,"width":714,"height":13}},{"id":"ee211ca3-0e83-4201-bcaa-68932ff2c856","block_type":"box","text":"redemption, or (v) in certain other situations. The amount of cash paid out in such cases will be","page_number":80,"box":{"x":117,"y":301,"width":709,"height":12}},{"id":"fb520a0a-27f1-4370-8ba6-0b3dafcab0f5","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":80,"box":{"x":116,"y":316,"width":759,"height":13}},{"id":"169369bf-ddf6-41fe-a795-40176cef6562","block_type":"box","text":"Securities have a value greater than the NAV of the shares, a compensating cash payment equal to","page_number":80,"box":{"x":116,"y":332,"width":745,"height":12}},{"id":"a10aab46-fd84-4e68-88c9-a39b53548363","block_type":"box","text":"the difference is required to be made by or through an Authorized Participant by the redeeming","page_number":80,"box":{"x":116,"y":347,"width":710,"height":13}},{"id":"a7ff9c2c-2477-4ddc-afda-9b70ccc3d7e7","block_type":"box","text":"shareholder. The Fund generally redeems Creation Units for Fund Securities, but the Fund reserves","page_number":80,"box":{"x":116,"y":363,"width":748,"height":12}},{"id":"12020270-b47a-43f4-8450-37eacf912109","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":80,"box":{"x":116,"y":378,"width":759,"height":13}},{"id":"3b00cff4-dc6d-47b5-ba92-e4f8d82acae8","block_type":"box","text":"provide such redeeming Authorized Participant a portfolio of securities that differs from the exact","page_number":80,"box":{"x":117,"y":394,"width":720,"height":12}},{"id":"06ebb7b2-fbe9-47d8-90ff-fe338ee5007b","block_type":"box","text":"composition of the Fund Securities, but does not differ in NAV. The Redemption Basket may also be","page_number":80,"box":{"x":116,"y":409,"width":749,"height":13}},{"id":"a8f353af-187e-4fd7-bf2a-e2d36424c84e","block_type":"box","text":"modified to minimize the Cash Component by redistributing the cash to the Fund Securities portion of","page_number":80,"box":{"x":117,"y":425,"width":756,"height":12}},{"id":"9489ab11-ac82-4c77-97aa-91646541e2c6","block_type":"box","text":"the Redemption Basket through systematically rounding. The rounding methodology allows position","page_number":80,"box":{"x":116,"y":441,"width":744,"height":12}},{"id":"60f4ebae-4149-4878-ad03-e5a0fb77eb14","block_type":"box","text":"sizes of securities in the Fund Securities to be “rounded up,” while limiting the maximum allowed","page_number":80,"box":{"x":116,"y":456,"width":720,"height":12}},{"id":"f3ee5ab5-8034-42b8-a5cd-428189c5d17d","block_type":"box","text":"percentage change in weight and share quantity of any given security in the Redemption Basket.","page_number":80,"box":{"x":117,"y":471,"width":722,"height":13}},{"id":"9c1d36bf-06fd-4729-a7ac-23c6492ae457","block_type":"box","text":"Redemption Baskets may also be modified to position a fund towards a forward index rebalance to","page_number":80,"box":{"x":117,"y":487,"width":736,"height":12}},{"id":"72a3f7a2-5448-44ea-b8d7-a3adc443785b","block_type":"box","text":"reflect revisions that account for index additions, deletions, and re-weights.","page_number":80,"box":{"x":117,"y":502,"width":559,"height":13}},{"id":"8b5ec053-69e3-4a7a-8d1b-0731f3813a45","block_type":"box","text":"Cash Redemption Method.","page_number":80,"box":{"x":116,"y":530,"width":211,"height":12}},{"id":"21faef12-a722-4d2d-8419-5675b2fff416","block_type":"box","text":"Although the Trust does not generally permit partial or full cash","page_number":80,"box":{"x":328,"y":530,"width":477,"height":13}},{"id":"b0ec5141-5888-4d95-951d-bc1b7e4f6f65","block_type":"box","text":"redemptions of Creation Units of its funds, when partial or full cash redemptions of Creation Units are","page_number":80,"box":{"x":117,"y":546,"width":755,"height":12}},{"id":"499f90bc-351f-4867-80cb-601c6f6f26f0","block_type":"box","text":"available or specified for the Fund, they will be effected in essentially the same manner as in-kind","page_number":80,"box":{"x":116,"y":561,"width":728,"height":13}},{"id":"4e04fc8a-3d2d-4877-be4a-05bf078f0671","block_type":"box","text":"redemptions thereof. In the case of partial or full cash redemption, the Authorized Participant receives","page_number":80,"box":{"x":117,"y":577,"width":759,"height":12}},{"id":"d48ac502-a043-4b6c-bfc3-3a2dc869dbcf","block_type":"box","text":"the cash equivalent of the Fund Securities it would otherwise receive through an in-kind redemption,","page_number":80,"box":{"x":116,"y":592,"width":748,"height":13}},{"id":"b168cec2-57d5-4bdb-9e5b-2a4238562db9","block_type":"box","text":"plus the same Cash Amount to be paid to an in-kind redeemer.","page_number":80,"box":{"x":117,"y":608,"width":471,"height":12}},{"id":"f1c28d56-acf2-40ce-b33d-de5fcbaf6527","block_type":"box","text":"Costs Associated with Redemption Transactions.","page_number":80,"box":{"x":116,"y":636,"width":394,"height":12}},{"id":"64a39c15-2cc1-4077-8d76-c9b6e974b86b","block_type":"box","text":"A standard redemption transaction fee is","page_number":80,"box":{"x":511,"y":636,"width":312,"height":12}},{"id":"405196db-ea49-4c5c-9082-19f38ace5ebc","block_type":"box","text":"imposed to offset transfer and other transaction costs that may be incurred by the Fund.","page_number":80,"box":{"x":117,"y":651,"width":657,"height":12}},{"id":"386ae2cf-c565-4bff-9eeb-30a6b9af4c51","block_type":"box","text":"As described above, under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of","page_number":80,"box":{"x":116,"y":679,"width":737,"height":12}},{"id":"47b0625b-5631-484b-af4b-bc0dc34f7024","block_type":"box","text":"BFA, to perform certain ETF Services. BRIL will receive from an Authorized Participant a standard","page_number":80,"box":{"x":117,"y":695,"width":726,"height":12}},{"id":"9b4b590f-fbe2-46cb-aa3f-9f0e046f0f54","block_type":"box","text":"transaction fee on each redemption order, which consists of (1) the ETF Servicing Fee and (2) Custody","page_number":80,"box":{"x":116,"y":710,"width":766,"height":12}},{"id":"becf51c6-8ad1-440d-9793-bb9ded391c56","block_type":"box","text":"Transaction Costs. BRIL is entitled to retain the ETF Servicing Fee pursuant to the ETF Services","page_number":80,"box":{"x":116,"y":726,"width":718,"height":12}},{"id":"8d0624cc-fdac-465b-8fbd-c490b48d2a9f","block_type":"box","text":"Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund custodian according to","page_number":80,"box":{"x":116,"y":741,"width":765,"height":12}},{"id":"bdf196ce-b463-4b5c-a071-034d7840a888","block_type":"box","text":"the amounts invoiced by such custodian.","page_number":80,"box":{"x":116,"y":757,"width":301,"height":12}},{"id":"f8e43c45-c948-41cc-8043-7ec93d44f47d","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":80,"box":{"x":116,"y":785,"width":699,"height":12}},{"id":"14147eac-43da-4d94-b2d9-40bd002f782a","block_type":"box","text":"redeemed, which amount will vary among different BlackRock-advised funds based on a number of","page_number":80,"box":{"x":117,"y":800,"width":736,"height":12}},{"id":"542d7cb1-7a1d-4eed-8e5c-3e3c8b6d6f5f","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":80,"box":{"x":116,"y":816,"width":739,"height":12}},{"id":"da783029-4c52-4417-b069-f75309c2447e","block_type":"box","text":"fund’s Redemption Basket, among other variables. The ETF Servicing Fee may be equal to zero in","page_number":80,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"61091c8f-4e44-47e2-9bd2-1a31ea89a2ed","block_type":"box","text":"certain instances, such as for redemption transactions that consist solely of cash. The actual Custody","page_number":80,"box":{"x":116,"y":847,"width":758,"height":12}},{"id":"e59cfac1-3a6b-4bde-ae7f-3d469c9fb70f","block_type":"box","text":"Transaction Costs vary per order based on the number of trades, underlying markets, and settlement","page_number":80,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"a9adc92b-0e44-4e2b-bcad-3119652d3b3d","block_type":"box","text":"locations associated with the redemption of a Creation Unit. The following table sets forth for the Fund","page_number":80,"box":{"x":117,"y":878,"width":761,"height":12}},{"id":"a327893e-eb70-4eed-8709-f718fd766cd9","block_type":"box","text":"71","page_number":80,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"833cc323-e1a4-48a8-8ec6-9d47527332bb","block_type":"box","text":"NM1026U-6004408-80/267","page_number":80,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"51c450ef-74c9-47de-93b6-31a40c5b52b6","block_type":"box","text":"an estimate of the redemption transaction fee that would have been charged as of July 31, 2026 if the","page_number":81,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"c2b59b40-efec-4428-a8ed-59c6ce7ba819","block_type":"box","text":"Fund had redeemed a Creation Unit on that date. The actual fee that would have been charged to an","page_number":81,"box":{"x":117,"y":102,"width":754,"height":13}},{"id":"c4f47803-223c-41d5-b8d4-958a5362cb65","block_type":"box","text":"Authorized Participant in connection with a redemption order will vary over time depending on the","page_number":81,"box":{"x":116,"y":118,"width":727,"height":12}},{"id":"f8531042-0d86-46b0-b617-7891fbbd3ea7","block_type":"box","text":"factors discussed above, and may be higher than the fee set forth below.","page_number":81,"box":{"x":116,"y":134,"width":546,"height":12}},{"id":"4989a2bc-18dc-4615-bd74-1a939cab5012","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":81,"box":{"x":117,"y":163,"width":761,"height":12}},{"id":"5fa0ddde-7c4b-4951-98a7-fe8309385fcd","block_type":"box","text":"if a redemption transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":81,"box":{"x":117,"y":178,"width":754,"height":12}},{"id":"b7ee0398-eb1a-4cb7-83b9-92447aa93a3b","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":81,"box":{"x":117,"y":194,"width":762,"height":12}},{"id":"70192d98-b20c-49a3-991a-24b62a04fcf3","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":81,"box":{"x":116,"y":209,"width":703,"height":12}},{"id":"085f802f-6890-4636-9655-917f86d2eec0","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":81,"box":{"x":116,"y":225,"width":743,"height":12}},{"id":"907e2f5d-b9af-4444-a0ed-e3ffa289e71e","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":81,"box":{"x":117,"y":240,"width":743,"height":12}},{"id":"9c5d1916-52d9-454f-8690-2601f2668f89","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":81,"box":{"x":116,"y":256,"width":702,"height":12}},{"id":"f0f8e97f-b7d4-41c0-962f-396743ea4396","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":81,"box":{"x":117,"y":271,"width":769,"height":12}},{"id":"c0a32e29-e466-49a1-b26a-b408d3e78bf6","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":81,"box":{"x":117,"y":287,"width":719,"height":12}},{"id":"c54df55d-528e-48fc-b34e-38748af9ab78","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":81,"box":{"x":116,"y":302,"width":734,"height":12}},{"id":"76bf2419-6e15-430b-8765-a8d365187e39","block_type":"box","text":"amounts shown below.","page_number":81,"box":{"x":116,"y":318,"width":176,"height":9}},{"id":"b51742b4-d572-4641-b0e3-30894f311c1b","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Fund Securities from the Fund to","page_number":81,"box":{"x":116,"y":347,"width":738,"height":12}},{"id":"cc2b4948-eb38-4ec9-9838-8054944c138e","block_type":"box","text":"their account on their order. Certain fees/costs associated with redemption transactions may be waived","page_number":81,"box":{"x":116,"y":362,"width":771,"height":13}},{"id":"badf4fec-a7be-46c0-96e1-1be242e27055","block_type":"box","text":"in certain circumstances. Investors who use the services of a broker or other financial intermediary to","page_number":81,"box":{"x":117,"y":378,"width":754,"height":12}},{"id":"2a12bb42-6b38-4d9e-a100-7ee5f4188c55","block_type":"box","text":"dispose of Fund shares may be charged a fee for such services.","page_number":81,"box":{"x":116,"y":393,"width":483,"height":13}},{"id":"ee1d1517-7263-4336-b2ce-057722cff5a4","block_type":"box","text":"The following table sets forth the Fund’s estimated redemption transaction fee as of July 31, 2026 and","page_number":81,"box":{"x":116,"y":423,"width":762,"height":12}},{"id":"af795484-ba9c-43f2-8820-741c7cd76e48","block_type":"box","text":"maximum additional charge (as described above):","page_number":81,"box":{"x":117,"y":438,"width":376,"height":12}},{"id":"046b9833-1cbc-4ecc-9035-35d9611ccf7e","block_type":"box","text":"Standard","page_number":81,"box":{"x":380,"y":464,"width":57,"height":8}},{"id":"150b34f0-f9a9-4da1-8f08-44e60f0a35c5","block_type":"box","text":"Redemption","page_number":81,"box":{"x":371,"y":475,"width":76,"height":9}},{"id":"7d5c6635-1626-475c-a32c-30609394a6d4","block_type":"box","text":"Transaction Fee*","page_number":81,"box":{"x":355,"y":485,"width":108,"height":7}},{"id":"1530f959-9920-46d9-a08a-b24ceef8f15c","block_type":"box","text":"Maximum Additional","page_number":81,"box":{"x":526,"y":475,"width":129,"height":7}},{"id":"62f39096-5086-4188-a097-19d6c6f89bbc","block_type":"box","text":"Charge**","page_number":81,"box":{"x":563,"y":485,"width":56,"height":9}},{"id":"fe1c3de9-5c95-485f-9218-07e4a8cd79f7","block_type":"box","text":"$417 2%","page_number":81,"box":{"x":391,"y":503,"width":233,"height":11}},{"id":"02137e31-1494-4ba2-a935-19945b3865f2","block_type":"box","text":"* The standard redemption transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The","page_number":81,"box":{"x":143,"y":550,"width":695,"height":9}},{"id":"a4dffa62-f8c9-41dc-8484-755548252c0d","block_type":"box","text":"standard redemption transaction fee may vary over time depending on the factors discussed above, and may be higher","page_number":81,"box":{"x":170,"y":563,"width":707,"height":9}},{"id":"02d372a8-05b1-4c28-8571-a840e6e099c8","block_type":"box","text":"than the fee set forth above. Estimated fee as of July 31, 2026.","page_number":81,"box":{"x":170,"y":575,"width":372,"height":10}},{"id":"6f84d41f-a72f-4597-b9c2-3d7d6f536da8","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":81,"box":{"x":143,"y":588,"width":364,"height":10}},{"id":"547932b1-e75d-47b3-91f4-4a25c58fe7a1","block_type":"box","text":"Placement of Redemption Orders.","page_number":81,"box":{"x":117,"y":616,"width":269,"height":12}},{"id":"9808696d-0bd3-4610-b287-fefd9fb3d954","block_type":"box","text":"Redemption requests for Creation Units of the Fund must be","page_number":81,"box":{"x":387,"y":616,"width":460,"height":12}},{"id":"62ae8266-58d8-4fac-8768-9f674fcbb146","block_type":"box","text":"submitted to the Distributor or its agent by or through an Authorized Participant. An Authorized","page_number":81,"box":{"x":116,"y":631,"width":705,"height":12}},{"id":"084a5662-4d63-45c3-958a-b9b1164c680f","block_type":"box","text":"Participant must submit an irrevocable request to redeem shares of the Fund generally before 4:00","page_number":81,"box":{"x":117,"y":647,"width":738,"height":12}},{"id":"efd6f841-3665-4ca3-9f62-e091fb65e39b","block_type":"box","text":"p.m., Eastern time on any Business Day in order to receive that day’s NAV. On days when the Listing","page_number":81,"box":{"x":117,"y":662,"width":751,"height":12}},{"id":"992aea81-d558-4524-a482-32f2141ad5bf","block_type":"box","text":"Exchange closes earlier than normal, the Fund may require orders to redeem Creation Units to be","page_number":81,"box":{"x":117,"y":678,"width":726,"height":12}},{"id":"2c1da32a-ad16-4caa-9b3d-6b22d5ec9163","block_type":"box","text":"placed earlier that day. Investors, other than Authorized Participants, are responsible for making","page_number":81,"box":{"x":117,"y":693,"width":712,"height":12}},{"id":"6d1243de-57c3-42d6-8adf-f5dc72809c51","block_type":"box","text":"arrangements for a redemption request to be made through an Authorized Participant. The Distributor","page_number":81,"box":{"x":116,"y":709,"width":755,"height":12}},{"id":"e890f209-5093-4ca4-b4bd-2442cba996a8","block_type":"box","text":"or its agent will provide a list of current Authorized Participants upon request.","page_number":81,"box":{"x":116,"y":724,"width":570,"height":12}},{"id":"0ba820a0-e03c-4da7-b9f2-010d3a8ed79c","block_type":"box","text":"The Authorized Participant must transmit the request for redemption in the form required by the Fund","page_number":81,"box":{"x":116,"y":753,"width":749,"height":13}},{"id":"90c21e4a-7f6e-4d8d-a79a-6987593b5461","block_type":"box","text":"to the Distributor or its agent in accordance with procedures set forth in the Authorized Participant","page_number":81,"box":{"x":116,"y":769,"width":725,"height":12}},{"id":"17ff6c17-aac5-452f-9198-a9c8ca652120","block_type":"box","text":"Agreement. Investors should be aware that their particular broker may not have executed an","page_number":81,"box":{"x":116,"y":785,"width":686,"height":12}},{"id":"12538bca-b1b0-4eb4-8871-b0a20e61442f","block_type":"box","text":"Authorized Participant Agreement and that, therefore, requests to redeem Creation Units may have to","page_number":81,"box":{"x":116,"y":800,"width":755,"height":12}},{"id":"65538cda-dd12-47d7-ba4a-34ca77d23060","block_type":"box","text":"be placed by the investor’s broker through an Authorized Participant who has executed an Authorized","page_number":81,"box":{"x":117,"y":816,"width":753,"height":12}},{"id":"12fdea22-f264-4a2c-8440-410ca792e332","block_type":"box","text":"Participant Agreement. At any time, only a limited number of broker-dealers will have an Authorized","page_number":81,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"687eaaaf-8ea7-4f84-bd46-d036d6186ebd","block_type":"box","text":"Participant Agreement in effect. Investors making a redemption request should be aware that such","page_number":81,"box":{"x":117,"y":846,"width":735,"height":13}},{"id":"e0c76e81-456f-4345-86f9-0360b35b75d7","block_type":"box","text":"request must be in the form specified by such Authorized Participant. Investors making a request to","page_number":81,"box":{"x":117,"y":862,"width":742,"height":12}},{"id":"7f46986a-f3c8-4e78-a606-35260d93b8ab","block_type":"box","text":"redeem Creation Units should allow sufficient time to permit proper submission of the request by an","page_number":81,"box":{"x":117,"y":877,"width":743,"height":13}},{"id":"fb20451a-e818-4086-b7b2-b4ed4591ff81","block_type":"box","text":"72","page_number":81,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"19cc319e-edb7-4b7b-ba1c-cca0bcbe6cf9","block_type":"box","text":"NM1026U-6004408-81/267","page_number":81,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c668e5aa-f670-462c-aed7-e98defa4dd95","block_type":"box","text":"Authorized Participant and transfer of the shares to the Fund’s transfer agent; such investors should","page_number":82,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"66458ea2-d1a7-4a99-85ca-44814ad34205","block_type":"box","text":"allow for the additional time that may be required to effect redemptions through their banks, brokers or","page_number":82,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"349a6533-5d75-4e30-a151-d916b8452ea5","block_type":"box","text":"other financial intermediaries if such intermediaries are not Authorized Participants.","page_number":82,"box":{"x":116,"y":118,"width":623,"height":12}},{"id":"d7859622-114a-4f09-8566-12f7ada7c004","block_type":"box","text":"A redemption request is considered to be in “proper form” if: (i) an Authorized Participant has","page_number":82,"box":{"x":116,"y":146,"width":694,"height":12}},{"id":"87d1e04a-1375-4d92-917e-dc5d86116cf4","block_type":"box","text":"transferred or caused to be transferred to the Fund’s transfer agent the Creation Unit redeemed","page_number":82,"box":{"x":116,"y":162,"width":715,"height":12}},{"id":"d73b2ec4-1800-4698-9135-9030c5abe003","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":82,"box":{"x":116,"y":177,"width":745,"height":12}},{"id":"ca39d1b8-6226-454c-ac7a-d08d6fd1ccd6","block_type":"box","text":"any Business Day on which the redemption request is submitted; (ii) a request in form satisfactory to","page_number":82,"box":{"x":116,"y":193,"width":750,"height":12}},{"id":"09aa3ffb-8a40-48cc-bf42-665f92b2cc88","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":82,"box":{"x":116,"y":208,"width":763,"height":12}},{"id":"76793f73-60fa-4504-b4c6-4ea39f0504b8","block_type":"box","text":"another redeeming investor within the time periods specified above; and (iii) all other procedures set","page_number":82,"box":{"x":116,"y":224,"width":748,"height":12}},{"id":"d4b49161-34f2-4172-9182-e397a9d700d1","block_type":"box","text":"forth in the Authorized Participant Agreement are properly followed.","page_number":82,"box":{"x":116,"y":239,"width":506,"height":12}},{"id":"83137f0a-be3b-4bde-90b7-713e951b5135","block_type":"box","text":"Upon receiving a redemption request, the Distributor or its agent shall notify the Fund and the Fund’s","page_number":82,"box":{"x":117,"y":268,"width":753,"height":12}},{"id":"f267b276-9f22-4fd1-9fda-d9318b7f776f","block_type":"box","text":"transfer agent of such redemption request. The tender of an investor’s shares for redemption and the","page_number":82,"box":{"x":116,"y":283,"width":755,"height":12}},{"id":"e253fd84-62cb-4119-9844-e8e0fd9385ba","block_type":"box","text":"distribution of the securities and/or cash included in the redemption payment made in respect of","page_number":82,"box":{"x":116,"y":299,"width":716,"height":12}},{"id":"5f0fb6dd-d007-4b63-9c03-ab9f5b6e5100","block_type":"box","text":"Creation Units redeemed will be made through DTC and the relevant Authorized Participant to the","page_number":82,"box":{"x":117,"y":314,"width":731,"height":12}},{"id":"6119c46f-1a1c-4102-a10f-5b649bd6512f","block_type":"box","text":"Beneficial Owner thereof as recorded on the book-entry system of DTC or the DTC Participant through","page_number":82,"box":{"x":117,"y":330,"width":766,"height":12}},{"id":"34d36ad1-b633-44e7-b8d2-ce24e9de76f8","block_type":"box","text":"which such investor holds, as the case may be, or by such other means specified by the Authorized","page_number":82,"box":{"x":116,"y":345,"width":744,"height":12}},{"id":"f7d255b0-71f8-4a76-8535-eb459ae76dc5","block_type":"box","text":"Participant submitting the redemption request.","page_number":82,"box":{"x":117,"y":361,"width":347,"height":12}},{"id":"b376df12-cace-40ad-ac7a-930ba04e66ba","block_type":"box","text":"A redeeming Authorized Participant, whether on its own account or acting on behalf of a Beneficial","page_number":82,"box":{"x":116,"y":389,"width":736,"height":12}},{"id":"26af9ce2-f76e-47b0-b1fb-0c15e65c9a33","block_type":"box","text":"Owner, must maintain appropriate security arrangements with a qualified broker-dealer, bank or other","page_number":82,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"a3f74342-8475-4c64-bfc5-e85ccd724611","block_type":"box","text":"custody providers in each jurisdiction in which any of the portfolio securities are customarily traded, to","page_number":82,"box":{"x":116,"y":420,"width":758,"height":12}},{"id":"fa7c70cc-1de2-4ee4-8ca1-f79399bb7976","block_type":"box","text":"which account such portfolio securities will be delivered.","page_number":82,"box":{"x":116,"y":436,"width":421,"height":12}},{"id":"777ee7d5-634a-4c47-b856-d0e948ee6dd6","block_type":"box","text":"Deliveries of redemption proceeds by the Fund are generally made within two Business Days (","page_number":82,"box":{"x":117,"y":464,"width":700,"height":12}},{"id":"3b02e648-8840-452d-9c3c-1ef24dfd31d0","block_type":"box","text":"i.e","page_number":82,"box":{"x":819,"y":464,"width":16,"height":10}},{"id":"9b8eed19-b70d-4804-bfda-409608450b91","block_type":"box","text":".,","page_number":82,"box":{"x":837,"y":472,"width":13,"height":3}},{"id":"35211cbd-fc58-4218-b05a-6a2d73b54fa6","block_type":"box","text":"“T+2”). However, the Fund reserves the right to settle redemption transactions on a basis other than","page_number":82,"box":{"x":116,"y":480,"width":747,"height":12}},{"id":"a6bb07ad-1505-42c2-8faa-c60c1f782be6","block_type":"box","text":"T+2, including a shorter settlement period, if necessary or appropriate under the circumstances and","page_number":82,"box":{"x":116,"y":495,"width":744,"height":12}},{"id":"dcb880ef-999b-4992-92ce-729b82fcc697","block_type":"box","text":"compliant with applicable law. Delayed settlement may occur due to a number of different reasons,","page_number":82,"box":{"x":116,"y":511,"width":738,"height":12}},{"id":"d6889736-4073-4de5-8c2b-d3c6ec3646d7","block_type":"box","text":"including, without limitation, settlement cycles for the underlying securities, unscheduled market","page_number":82,"box":{"x":117,"y":526,"width":713,"height":12}},{"id":"9b1c5e5d-48e4-4bbd-a8f3-9bf9fe6db5da","block_type":"box","text":"closings, an effort to link distribution to dividend record dates and ex-dates and newly announced","page_number":82,"box":{"x":116,"y":542,"width":726,"height":12}},{"id":"4bc0e677-b5b2-460b-9ac8-44b34372328c","block_type":"box","text":"holidays. For example, the Fund reserves the right to settle redemption transactions on a basis other","page_number":82,"box":{"x":117,"y":557,"width":751,"height":12}},{"id":"15cdf04f-ecb0-489f-8f54-41c48c4c76ba","block_type":"box","text":"than T+2 in order to accommodate non-U.S. market holiday schedules, to account for different","page_number":82,"box":{"x":116,"y":573,"width":705,"height":12}},{"id":"069c12da-f3a7-421e-a193-7fff4ea27f2d","block_type":"box","text":"treatment among non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (i.e., the","page_number":82,"box":{"x":116,"y":588,"width":757,"height":12}},{"id":"2f2fdd09-28c0-4f32-b797-38d1e1d3836b","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":82,"box":{"x":117,"y":604,"width":769,"height":12}},{"id":"6232efc1-648a-46a8-8eec-195a4922112a","block_type":"box","text":"sold) and in certain other circumstances consistent with applicable law.","page_number":82,"box":{"x":116,"y":619,"width":532,"height":12}},{"id":"809f9f8b-2308-4d21-b0b8-2f783291f94c","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":82,"box":{"x":117,"y":647,"width":711,"height":13}},{"id":"a129703c-0e12-4b41-84f2-e0745edaf903","block_type":"box","text":"consecutive holidays, or the extended delivery cycles for transferring foreign investments to redeeming","page_number":82,"box":{"x":116,"y":663,"width":762,"height":12}},{"id":"1635e809-147c-4552-82a4-ed5c9a6fdf24","block_type":"box","text":"Authorized Participants prevents timely delivery of the foreign investment in response to a redemption","page_number":82,"box":{"x":116,"y":678,"width":755,"height":13}},{"id":"3914786e-dd93-452b-af91-65a70f0d2df2","block_type":"box","text":"request, the Fund may delay delivery of the foreign investment more than seven days if the Fund","page_number":82,"box":{"x":117,"y":694,"width":717,"height":12}},{"id":"cb6384d1-525b-42af-87ee-9213fcf04a2b","block_type":"box","text":"delivers the foreign investment as soon as practicable, but in no event later than 15 days.","page_number":82,"box":{"x":116,"y":709,"width":662,"height":13}},{"id":"43165f8e-5202-4b1c-a817-70af6fd80fa9","block_type":"box","text":"If neither the Authorized Participant nor the Beneficial Owner on whose behalf the Authorized","page_number":82,"box":{"x":117,"y":738,"width":690,"height":12}},{"id":"99483840-df9b-4807-be53-97697265d502","block_type":"box","text":"Participant is acting has appropriate arrangements to take delivery of Fund Securities in the applicable","page_number":82,"box":{"x":117,"y":753,"width":759,"height":12}},{"id":"28ddcd7a-8012-4d0f-8ae8-2ce1ebbad045","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":82,"box":{"x":117,"y":769,"width":743,"height":12}},{"id":"27612f7a-ea05-44f7-b6af-b708bf42f667","block_type":"box","text":"effect deliveries of Fund Securities in such jurisdiction, the Fund may in its discretion exercise its option","page_number":82,"box":{"x":116,"y":784,"width":766,"height":12}},{"id":"8aceaae1-3c8e-41ce-91cf-a7a4bfdeae5b","block_type":"box","text":"to redeem such shares in cash, and the Beneficial Owner will be required to receive its redemption","page_number":82,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"b0368627-d6cf-404b-a0c2-02f95c3414e5","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":82,"box":{"x":117,"y":815,"width":767,"height":12}},{"id":"4e01853e-5fca-4b4b-9613-440dcf58a9a9","block_type":"box","text":"its shares based on the NAV of the Fund next determined after the redemption request is received in","page_number":82,"box":{"x":117,"y":831,"width":751,"height":12}},{"id":"45bcd40c-df26-470a-a052-a5378df8c3b1","block_type":"box","text":"proper form (minus a redemption transaction fee and additional charges specified above to offset the","page_number":82,"box":{"x":117,"y":846,"width":752,"height":12}},{"id":"e44426bc-26dd-4028-9d2f-a73e0430f074","block_type":"box","text":"Fund’s brokerage and other transaction costs associated with the disposition of Fund Securities).","page_number":82,"box":{"x":117,"y":862,"width":724,"height":12}},{"id":"6f333fe6-e5cf-4cf6-90c8-8fc962b519ce","block_type":"box","text":"Redemptions of shares for Fund Securities will be subject to compliance with applicable U.S. federal","page_number":82,"box":{"x":117,"y":877,"width":749,"height":12}},{"id":"67eda0f9-e008-4b02-8206-d93ba27ee080","block_type":"box","text":"73","page_number":82,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d9344bdd-ffaa-4958-95be-4d1606c63eae","block_type":"box","text":"NM1026U-6004408-82/267","page_number":82,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"889d0806-d0eb-45fd-aa79-d831ac463149","block_type":"box","text":"and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves","page_number":83,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"fa596314-a2b6-40d8-86c8-06cece48f836","block_type":"box","text":"the right to redeem Creation Units for cash to the extent that the Fund cannot lawfully deliver specific","page_number":83,"box":{"x":116,"y":102,"width":753,"height":13}},{"id":"28c6a1a6-e6ac-4800-a290-bb09958a3ef2","block_type":"box","text":"Fund Securities upon redemptions or cannot do so without first registering the Fund Securities under","page_number":83,"box":{"x":117,"y":118,"width":751,"height":12}},{"id":"2f76a5ea-c91a-4e0f-97c3-41c6a65566c9","block_type":"box","text":"such laws.","page_number":83,"box":{"x":116,"y":134,"width":83,"height":9}},{"id":"a5da6b5f-e387-4b04-a5a4-27ea79dc639d","block_type":"box","text":"To the extent contemplated by an Authorized Participant’s agreement with the Distributor or its agent,","page_number":83,"box":{"x":116,"y":162,"width":758,"height":12}},{"id":"81a831f1-a98b-4a7d-bff3-b8b1ffa146cf","block_type":"box","text":"in the event an Authorized Participant has submitted a redemption request in proper form but is unable","page_number":83,"box":{"x":117,"y":177,"width":766,"height":12}},{"id":"40c4f556-05cd-43b9-bbd9-9721bf786af3","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":83,"box":{"x":116,"y":192,"width":754,"height":12}},{"id":"28397725-8733-4fd2-80f2-7d1df214c884","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":83,"box":{"x":117,"y":208,"width":729,"height":12}},{"id":"10ecd29d-5485-426c-9b75-800d9d1dc97b","block_type":"box","text":"request, the Distributor or its agent will accept the redemption request in reliance on the undertaking by","page_number":83,"box":{"x":117,"y":224,"width":770,"height":12}},{"id":"aea8f39d-597d-4c7c-a2a3-3e9575198077","block_type":"box","text":"the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be","page_number":83,"box":{"x":116,"y":239,"width":770,"height":12}},{"id":"e4e11131-055a-4729-8079-db868cd12972","block_type":"box","text":"secured by the Authorized Participant’s delivery and maintenance of collateral as set forth in the","page_number":83,"box":{"x":116,"y":254,"width":717,"height":13}},{"id":"642fa9fa-4c94-4799-a87a-cbdead159aeb","block_type":"box","text":"handbook for Authorized Participants. Such collateral must be delivered no later than the time specified","page_number":83,"box":{"x":117,"y":270,"width":771,"height":12}},{"id":"0047e105-bb81-4589-a4b1-d20456d6d7bd","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":83,"box":{"x":117,"y":285,"width":729,"height":13}},{"id":"cbbad8f8-68bb-447e-8269-3194ea98be90","block_type":"box","text":"request and shall be held by State Street and marked-to-market daily.","page_number":83,"box":{"x":117,"y":301,"width":522,"height":12}},{"id":"d8209e7e-ae7f-4fe2-8923-75597ab8c5af","block_type":"box","text":"The fees of State Street and any sub-custodians in respect of the delivery, maintenance and redelivery","page_number":83,"box":{"x":116,"y":329,"width":768,"height":12}},{"id":"f9042239-254b-45e0-aff7-16c3fc90d308","block_type":"box","text":"of the collateral shall be payable by the Authorized Participant. The Authorized Participant Agreement","page_number":83,"box":{"x":116,"y":344,"width":759,"height":12}},{"id":"b5b3841d-4435-4e7a-b58a-6a99d0e416e3","block_type":"box","text":"permits the Fund to acquire shares of the Fund at any time and subjects the Authorized Participant to","page_number":83,"box":{"x":117,"y":360,"width":756,"height":12}},{"id":"bbdc4322-bce2-445c-b0f1-cf5aa34353e3","block_type":"box","text":"liability for any shortfall between the aggregate of the cost to the Fund of purchasing such shares, plus","page_number":83,"box":{"x":117,"y":375,"width":764,"height":12}},{"id":"cf2b8103-09ae-4e6e-9e2c-0b13a6e11dd3","block_type":"box","text":"the value of the Cash Amount, and the value of the collateral together with liability for related","page_number":83,"box":{"x":116,"y":391,"width":692,"height":12}},{"id":"3f2c50a4-f7c2-4417-a4e0-3951a0938c50","block_type":"box","text":"brokerage and other charges. Because the portfolio securities of the Fund may trade on exchange(s)","page_number":83,"box":{"x":117,"y":406,"width":753,"height":12}},{"id":"40583873-09df-4c0e-a96e-b31a649f6335","block_type":"box","text":"on days that the Listing Exchange is closed or are otherwise not Business Days for the Fund,","page_number":83,"box":{"x":116,"y":422,"width":697,"height":12}},{"id":"f5440721-b2e9-4833-a9c0-d04aa2e84c5b","block_type":"box","text":"shareholders may not be able to redeem their shares of the Fund, or purchase or sell shares of the","page_number":83,"box":{"x":116,"y":437,"width":739,"height":12}},{"id":"ded9e218-2c44-40c9-858e-ac9e57575ae5","block_type":"box","text":"Fund on the Listing Exchange on days when the NAV of the Fund could be significantly affected by","page_number":83,"box":{"x":117,"y":453,"width":739,"height":12}},{"id":"4c444faf-7ac8-4353-be3c-7022c54f7a03","block_type":"box","text":"events in the relevant non-U.S. markets.","page_number":83,"box":{"x":116,"y":468,"width":305,"height":10}},{"id":"43e77f57-5986-4744-a9ec-56dbcb4bab9b","block_type":"box","text":"The right of redemption may be suspended or the date of payment postponed with respect to the Fund:","page_number":83,"box":{"x":116,"y":496,"width":771,"height":12}},{"id":"64816099-99f9-4e12-9db2-4488f1097a52","block_type":"box","text":"(i) for any period during which the Listing Exchange is closed (other than customary weekend and","page_number":83,"box":{"x":117,"y":512,"width":729,"height":12}},{"id":"5e96de4c-53cd-42ba-8dad-bed7b3820f25","block_type":"box","text":"holiday closings); (ii) for any period during which trading on the Listing Exchange is suspended or","page_number":83,"box":{"x":117,"y":527,"width":726,"height":12}},{"id":"a1a1d6a0-6a04-4a3f-a167-e145bedc6602","block_type":"box","text":"restricted; (iii) for any period during which an emergency exists as a result of which disposal of the","page_number":83,"box":{"x":117,"y":543,"width":732,"height":12}},{"id":"50b9dbb2-38bd-4bac-b869-e04420b95f56","block_type":"box","text":"shares of the Fund’s portfolio securities or determination of its net asset value is not reasonably","page_number":83,"box":{"x":116,"y":558,"width":714,"height":12}},{"id":"722c3130-d288-4467-8f02-f204211a4b6e","block_type":"box","text":"practicable; or (iv) in such other circumstance as is permitted by the SEC.","page_number":83,"box":{"x":117,"y":574,"width":551,"height":12}},{"id":"fe95e04e-44a6-4d5b-861f-19dff167c34a","block_type":"box","text":"Custom Baskets.","page_number":83,"box":{"x":116,"y":602,"width":135,"height":9}},{"id":"4dd58120-c85d-4d61-827d-dda92aea0318","block_type":"box","text":"Creation and redemption baskets may differ and the Fund may accept “custom","page_number":83,"box":{"x":252,"y":602,"width":595,"height":12}},{"id":"a70ad515-08ed-4e54-af67-bf9d9a2bcaef","block_type":"box","text":"baskets.” A custom basket may include any of the following: (i) a basket that is composed of a","page_number":83,"box":{"x":117,"y":617,"width":702,"height":12}},{"id":"6f5a1e6d-5734-4222-9dd0-2bec34b31867","block_type":"box","text":"non-representative selection of the Fund’s portfolio holdings; (ii) a representative basket that is","page_number":83,"box":{"x":117,"y":633,"width":706,"height":12}},{"id":"74bbe342-589b-43fb-9568-bfb7e29d2131","block_type":"box","text":"different from the initial basket used in transactions on the same business day; or (iii) a basket that","page_number":83,"box":{"x":116,"y":648,"width":736,"height":12}},{"id":"adcfdfca-8f74-4407-939a-dfbfa7996ae1","block_type":"box","text":"contains bespoke cash substitutions for a single Authorized Participant. The Fund has adopted policies","page_number":83,"box":{"x":116,"y":664,"width":764,"height":12}},{"id":"826b9efa-d62b-4c80-99f4-17a9f6700bdc","block_type":"box","text":"and procedures that govern the construction and acceptance of baskets, including heightened","page_number":83,"box":{"x":116,"y":679,"width":697,"height":12}},{"id":"987c1b88-b020-456b-a289-3b59fedd2b4e","block_type":"box","text":"requirements for certain types of custom baskets. Such policies and procedures provide the","page_number":83,"box":{"x":117,"y":695,"width":679,"height":12}},{"id":"8eb3df22-f4c8-4dad-b279-cb4c5db6625e","block_type":"box","text":"parameters for the construction and acceptance of custom baskets that are in the best interests of the","page_number":83,"box":{"x":117,"y":710,"width":755,"height":12}},{"id":"84be8198-54c2-44b0-9c68-d61e42c8f696","block_type":"box","text":"Fund and its shareholders, establish processes for revisions to, or deviations from, such parameters,","page_number":83,"box":{"x":117,"y":726,"width":746,"height":12}},{"id":"1ce0644d-f72f-4235-8358-48848e2781af","block_type":"box","text":"and specify the titles and roles of the employees of BFA who are required to review each custom","page_number":83,"box":{"x":116,"y":741,"width":717,"height":12}},{"id":"2209652c-b485-4e8d-ae21-ad2e59f794d2","block_type":"box","text":"basket for compliance with those parameters. In addition, when constructing custom baskets for","page_number":83,"box":{"x":117,"y":757,"width":711,"height":12}},{"id":"9f2bab71-fae9-4ace-9a5c-8867215d943b","block_type":"box","text":"redemptions, the tax efficiency of the Fund may be taken into account. The policies and procedures","page_number":83,"box":{"x":117,"y":772,"width":737,"height":12}},{"id":"41aa9f84-e415-4758-9e52-d3d080cb7ae3","block_type":"box","text":"distinguish among different types of custom baskets that may be used and impose different","page_number":83,"box":{"x":116,"y":788,"width":677,"height":12}},{"id":"7ffc8090-6344-4dd0-836f-c0c580793239","block_type":"box","text":"requirements for different types of custom baskets in order to seek to mitigate against potential risks of","page_number":83,"box":{"x":117,"y":803,"width":761,"height":12}},{"id":"0e4e084e-b9cd-49a5-a998-2f0fc768dea2","block_type":"box","text":"conflicts and/or overreaching by an Authorized Participant. BlackRock has established a governance","page_number":83,"box":{"x":116,"y":819,"width":747,"height":12}},{"id":"5771cc18-49e8-4e7c-8160-404dc271254a","block_type":"box","text":"process to oversee basket compliance for the Fund, as set forth in the Fund’s policies and procedures.","page_number":83,"box":{"x":117,"y":834,"width":766,"height":12}},{"id":"00a11779-aa7a-4cbc-a8e4-d48364055381","block_type":"box","text":"Taxation on Creations and Redemptions of Creation Units.","page_number":83,"box":{"x":116,"y":862,"width":472,"height":12}},{"id":"0b9ce927-15a4-4094-b4f6-64c663c42471","block_type":"box","text":"An Authorized Participant generally will","page_number":83,"box":{"x":588,"y":862,"width":296,"height":12}},{"id":"4e6af6ae-fe35-40f8-b570-74179dd0b452","block_type":"box","text":"recognize either gain or loss upon the exchange of Deposit Securities for Creation Units. This gain or","page_number":83,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"d3e4c489-43de-47cf-9c72-4939e0828406","block_type":"box","text":"74","page_number":83,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"1ad3b69d-0f4a-48f7-bb1a-bcf52eb328f2","block_type":"box","text":"NM1026U-6004408-83/267","page_number":83,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b5faa1a6-3df9-4a92-ac60-33472d8ecca4","block_type":"box","text":"loss is calculated by taking the market value of the Creation Units purchased over the Authorized","page_number":84,"box":{"x":117,"y":87,"width":724,"height":12}},{"id":"3db4b1e0-89ed-41d9-89ff-02eb4f318e68","block_type":"box","text":"Participant’s aggregate basis in the Deposit Securities exchanged therefor. However, the IRS may","page_number":84,"box":{"x":117,"y":102,"width":733,"height":13}},{"id":"bed8a615-8843-4ef6-8a37-129ab53473af","block_type":"box","text":"apply the wash sales rules to determine that any loss realized upon the exchange of Deposit Securities","page_number":84,"box":{"x":116,"y":118,"width":770,"height":12}},{"id":"ef7ce00f-84d5-4fd4-b9ec-c8769bf082fb","block_type":"box","text":"for Creation Units is not currently deductible. Authorized Participants should consult their own tax","page_number":84,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"33059c46-e4be-43a2-993a-da4ef3606226","block_type":"box","text":"advisors.","page_number":84,"box":{"x":116,"y":149,"width":72,"height":10}},{"id":"ca179d08-381e-43a9-9732-59f076bf2776","block_type":"box","text":"Similarly, an Authorized Participant generally will recognize either gain or loss upon the redemption of","page_number":84,"box":{"x":116,"y":181,"width":759,"height":12}},{"id":"cbf9397f-0adc-48db-b46a-83fcfc68cb38","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":84,"box":{"x":116,"y":196,"width":772,"height":12}},{"id":"f4a1f953-0560-4636-932f-320c99f583a7","block_type":"box","text":"dictate that capital gain or loss realized from the redemption of the Creation Units will generally create","page_number":84,"box":{"x":116,"y":212,"width":760,"height":12}},{"id":"0b6e155f-75ff-4fea-8f46-8219d6d13828","block_type":"box","text":"long-term capital gain or loss if the Authorized Participant held the Creation Units for more than one","page_number":84,"box":{"x":117,"y":227,"width":743,"height":12}},{"id":"cd875d84-2eb4-4a9e-9bd2-3feb1ff62943","block_type":"box","text":"year and short-term capital gain or loss if the Authorized Participant held the Creation Units for one","page_number":84,"box":{"x":116,"y":243,"width":739,"height":12}},{"id":"0dd461da-d424-49fe-99e5-3f0b315a9092","block_type":"box","text":"year or less.","page_number":84,"box":{"x":116,"y":258,"width":96,"height":12}},{"id":"090d608c-6bcb-4a15-88a6-e8bfed23a2c6","block_type":"box","text":"Taxes","page_number":84,"box":{"x":117,"y":312,"width":120,"height":22}},{"id":"8eace05f-7a03-4a34-8a12-434a1a1e83c4","block_type":"box","text":"The following is a summary of certain material U.S. federal income tax considerations regarding the","page_number":84,"box":{"x":116,"y":364,"width":743,"height":12}},{"id":"1ab8bb95-492b-4b8b-b515-bc7c7369f4fc","block_type":"box","text":"purchase, ownership and disposition of shares of the Fund. This summary does not address all of the","page_number":84,"box":{"x":117,"y":380,"width":757,"height":12}},{"id":"bfaa50e6-aa90-4bc2-bd12-19f678237dff","block_type":"box","text":"potential U.S. federal income tax consequences that may be applicable to the Fund or to all categories","page_number":84,"box":{"x":117,"y":395,"width":765,"height":12}},{"id":"4658826f-89c5-4d28-ad63-882a69dce210","block_type":"box","text":"of investors, some of which may be subject to special tax rules. Current and prospective shareholders","page_number":84,"box":{"x":116,"y":411,"width":761,"height":12}},{"id":"026c62bd-8033-4c87-a75a-9a9be4cabf04","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":84,"box":{"x":116,"y":426,"width":739,"height":13}},{"id":"4e32afca-6f90-49f0-b7df-3868c6db9346","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":84,"box":{"x":117,"y":442,"width":747,"height":12}},{"id":"9fc56ae3-660b-471e-bb6c-ad0e06b2e515","block_type":"box","text":"and administrative interpretations thereof in effect on the date of this SAI, all of which are subject to","page_number":84,"box":{"x":116,"y":457,"width":742,"height":12}},{"id":"2b7fbc92-4419-463f-be3c-f015ad2ddfff","block_type":"box","text":"change, possibly with retroactive effect.","page_number":84,"box":{"x":116,"y":473,"width":298,"height":12}},{"id":"381293ec-13ba-4a10-b372-9d548342a7ec","block_type":"box","text":"Regulated Investment Company Qualifications.","page_number":84,"box":{"x":117,"y":505,"width":374,"height":12}},{"id":"6abef9ed-8244-4d20-ae42-86dce3b73b9e","block_type":"box","text":"The Fund intends to qualify for treatment as a","page_number":84,"box":{"x":493,"y":505,"width":349,"height":12}},{"id":"b9513a27-405e-4b36-aa2f-d4904dda345e","block_type":"box","text":"separate RIC under Subchapter M of the Internal Revenue Code. To qualify for treatment as a RIC, the","page_number":84,"box":{"x":116,"y":520,"width":771,"height":12}},{"id":"7d9bb7db-750a-4321-b6f7-c491e71ccc05","block_type":"box","text":"Fund must annually distribute at least 90% of its investment company taxable income (which includes","page_number":84,"box":{"x":117,"y":536,"width":757,"height":12}},{"id":"8845fa63-70e5-4bbd-abaa-0c3eae677ea8","block_type":"box","text":"dividends, interest and net short-term capital gains) and meet several other requirements. Among such","page_number":84,"box":{"x":116,"y":551,"width":769,"height":12}},{"id":"415aa33e-4e81-44a3-9b91-e7451f49a624","block_type":"box","text":"other requirements are the following: (i) at least 90% of the Fund’s annual gross income must be","page_number":84,"box":{"x":116,"y":567,"width":721,"height":12}},{"id":"ee63e196-53f9-49ad-a15d-2f321ab2bdc6","block_type":"box","text":"derived from dividends, interest, payments with respect to securities loans, gains from the sale or other","page_number":84,"box":{"x":116,"y":582,"width":769,"height":12}},{"id":"92d7b2d0-1fd1-432f-95ea-6ae08ceddfab","block_type":"box","text":"disposition of stock or securities or non-U.S. currencies, other income (including, but not limited to,","page_number":84,"box":{"x":116,"y":598,"width":736,"height":12}},{"id":"ae3c49a3-ea6c-4878-8233-4e5bc7a6e69b","block_type":"box","text":"gains from options, futures or forward contracts) derived with respect to its business of investing in","page_number":84,"box":{"x":116,"y":613,"width":735,"height":12}},{"id":"a424fe2e-1f63-4056-8ed3-fc38de2076d3","block_type":"box","text":"such stock, securities or currencies, and net income derived from interests in qualified publicly-traded","page_number":84,"box":{"x":116,"y":629,"width":757,"height":12}},{"id":"4d4cdbef-4128-42f0-bbe1-e8e583430c08","block_type":"box","text":"partnerships (","page_number":84,"box":{"x":117,"y":644,"width":101,"height":12}},{"id":"3e1c3197-0e59-48b2-ad60-8844cbb5a4c0","block_type":"box","text":"i.e.,","page_number":84,"box":{"x":219,"y":644,"width":25,"height":11}},{"id":"4cff65f0-3383-4b12-92a5-1ce23dab060c","block_type":"box","text":"partnerships that are traded on an established securities market or tradable on a","page_number":84,"box":{"x":246,"y":644,"width":607,"height":12}},{"id":"17979d5a-ee8a-49f1-a917-fb6d364082d3","block_type":"box","text":"secondary market, other than partnerships that derive at least 90% of their income from interest,","page_number":84,"box":{"x":116,"y":660,"width":714,"height":12}},{"id":"70862d02-99fe-44db-a9b3-39d0f5c23d80","block_type":"box","text":"dividends, capital gains and other traditionally permitted RIC income); and (ii) at the close of each","page_number":84,"box":{"x":116,"y":675,"width":723,"height":12}},{"id":"ba0b6f97-53b3-4fb6-8548-de581d46e289","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":84,"box":{"x":116,"y":691,"width":760,"height":12}},{"id":"4df684a4-0ef3-494b-bdf6-e61219e52901","block_type":"box","text":"be represented by cash and cash items, U.S. government securities, securities of other RICs and other","page_number":84,"box":{"x":117,"y":706,"width":765,"height":12}},{"id":"eed0bbda-9a62-4a5a-86c3-a93f15855691","block_type":"box","text":"securities, with such other securities limited for purposes of this calculation in respect of any one issuer","page_number":84,"box":{"x":116,"y":722,"width":765,"height":12}},{"id":"7ad5bcd9-9a49-4a78-b6c8-3200f6f4a4be","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":84,"box":{"x":116,"y":737,"width":739,"height":12}},{"id":"6735bb50-73e3-45c4-8e66-b56514c4c33a","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":84,"box":{"x":116,"y":753,"width":760,"height":12}},{"id":"830d6ce0-3fca-4efe-9322-c1395f915d66","block_type":"box","text":"assets may be invested in the securities (other than U.S. government securities or the securities of","page_number":84,"box":{"x":116,"y":768,"width":733,"height":12}},{"id":"06359683-74e3-4251-a8c2-f7b76e436a89","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":84,"box":{"x":116,"y":784,"width":754,"height":12}},{"id":"9a832470-cc5d-4a0a-9059-23a11be5d904","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":84,"box":{"x":117,"y":799,"width":724,"height":12}},{"id":"0579c09f-b27a-4344-a369-063a039ae897","block_type":"box","text":"businesses, or the securities of one or more qualified publicly-traded partnerships.","page_number":84,"box":{"x":117,"y":815,"width":607,"height":12}},{"id":"4c41936f-bdb5-4e20-a6b1-65603721263f","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":84,"box":{"x":116,"y":847,"width":761,"height":12}},{"id":"2b91d37f-986a-44d7-85c4-ea8d03be834f","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":84,"box":{"x":116,"y":862,"width":737,"height":12}},{"id":"a20e5b82-5093-4c1e-9437-ac21b0c59cdf","block_type":"box","text":"disposing of certain assets. 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The Fund’s investments in partnerships, including in qualified publicly-traded","page_number":85,"box":{"x":117,"y":162,"width":674,"height":12}},{"id":"fe37d58c-fbb2-488e-8b9c-551b2dbb2c8c","block_type":"box","text":"partnerships, may result in the Fund being subject to state, local, or non-U.S. income, franchise or","page_number":85,"box":{"x":117,"y":177,"width":732,"height":12}},{"id":"160f51d2-3e28-40e2-8f12-26f1d6155090","block_type":"box","text":"withholding tax liabilities.","page_number":85,"box":{"x":116,"y":193,"width":189,"height":12}},{"id":"4c375bb3-5999-468d-94ed-6afcd81d3b80","block_type":"box","text":"Taxation of RICs.","page_number":85,"box":{"x":116,"y":221,"width":133,"height":10}},{"id":"e9fe3b9b-606d-4f43-9c83-d03f645b2550","block_type":"box","text":"As a RIC, the Fund will not be subject to U.S.","page_number":85,"box":{"x":250,"y":221,"width":333,"height":12}},{"id":"bcb64bbf-3e9c-48da-9729-24ea6f34e4de","block_type":"box","text":"federal income tax on the portion of its","page_number":85,"box":{"x":584,"y":221,"width":288,"height":12}},{"id":"d5177564-84a4-43f3-b768-52e6e962809c","block_type":"box","text":"taxable investment income and capital gains that it dis","page_number":85,"box":{"x":116,"y":237,"width":392,"height":12}},{"id":"84d1f195-f373-4d8c-9690-c287131726a0","block_type":"box","text":"tributes to its shareholders, provided that it satisfies","page_number":85,"box":{"x":509,"y":237,"width":378,"height":12}},{"id":"70265c00-b36f-49d7-a52c-90dd3801793b","block_type":"box","text":"a minimum distribution requirement. To satisfy t","page_number":85,"box":{"x":116,"y":252,"width":346,"height":12}},{"id":"2217f995-4a9c-4aa0-bda7-25e35237b6ee","block_type":"box","text":"he minimum distribution requirement, the Fund must","page_number":85,"box":{"x":462,"y":252,"width":385,"height":12}},{"id":"b2d3fe5d-2e70-4a35-b482-e7b36489c4c2","block_type":"box","text":"distribute to its shareholders at least the sum of (i","page_number":85,"box":{"x":116,"y":268,"width":357,"height":12}},{"id":"4caaf771-0c1a-4075-9a07-410c30e59eaa","block_type":"box","text":") 90% of its “investment company taxable income” (","page_number":85,"box":{"x":474,"y":268,"width":374,"height":12}},{"id":"07e4ab42-f91e-47ae-a37e-b5e73fa53b94","block_type":"box","text":"i.e.,","page_number":85,"box":{"x":849,"y":268,"width":24,"height":11}},{"id":"57271fea-7bc7-42df-9457-ff73c70979fc","block_type":"box","text":"income other than the excess of its net realized l","page_number":85,"box":{"x":117,"y":283,"width":350,"height":10}},{"id":"5f829e9e-48e9-44a2-900c-3aeafd81cf47","block_type":"box","text":"ong-term capital gain over its net realized short-term","page_number":85,"box":{"x":468,"y":283,"width":385,"height":12}},{"id":"11897063-af42-410a-a711-9ef9e062d23b","block_type":"box","text":"capital loss), plus or minus certain adjustments, and (ii)","page_number":85,"box":{"x":116,"y":299,"width":399,"height":12}},{"id":"45bf4adc-72dc-4606-88b0-1f273ccd1d82","block_type":"box","text":"90% of its net tax-exempt income for the taxable","page_number":85,"box":{"x":516,"y":299,"width":362,"height":12}},{"id":"ab1ae102-e0b7-4455-947a-3ca2c59b6f7a","block_type":"box","text":"year. 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If the","page_number":85,"box":{"x":116,"y":330,"width":368,"height":9}},{"id":"4ccf039a-8f33-44a0-945e-e44e684b0cb8","block_type":"box","text":"Fund fails to qualify for any taxable year as a RIC or","page_number":85,"box":{"x":485,"y":330,"width":382,"height":12}},{"id":"24123315-18d4-414f-89a4-1fc022a9358d","block_type":"box","text":"fails to meet the distribution requirement, all of","page_number":85,"box":{"x":116,"y":345,"width":340,"height":12}},{"id":"a92eca1d-d8ca-4499-afbf-02ec6c181e8f","block_type":"box","text":"its taxable income will be subject to tax at regular","page_number":85,"box":{"x":457,"y":345,"width":361,"height":12}},{"id":"9f9dd21c-fa51-416f-81c4-dc7b0413e993","block_type":"box","text":"corporate income tax rates without any deduction for di","page_number":85,"box":{"x":116,"y":361,"width":399,"height":12}},{"id":"cab337cc-26d2-41fe-b2d5-9933ce5192fd","block_type":"box","text":"stributions to shareholders, and such distributions","page_number":85,"box":{"x":516,"y":361,"width":365,"height":11}},{"id":"2ea86034-17c0-480c-973c-559b9fe21602","block_type":"box","text":"generally will be taxable to shareholders as ordinary","page_number":85,"box":{"x":116,"y":376,"width":383,"height":12}},{"id":"5a3c6ec9-617c-4273-a60f-157d83578313","block_type":"box","text":"dividends to the extent of the Fund’s current and","page_number":85,"box":{"x":499,"y":376,"width":356,"height":10}},{"id":"3831bcc4-f310-4ecc-93bd-a7bf0502d362","block_type":"box","text":"accumulated earnings and profits. 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Although the","page_number":85,"box":{"x":116,"y":423,"width":425,"height":12}},{"id":"96de7189-050d-4c60-b7af-37871cd920be","block_type":"box","text":"Fund intends to distribute substantially all of its","page_number":85,"box":{"x":542,"y":423,"width":343,"height":12}},{"id":"73e6d9b6-554f-4d60-b2c6-f454e0c82718","block_type":"box","text":"net investment income and its capital gains for each","page_number":85,"box":{"x":117,"y":438,"width":381,"height":12}},{"id":"27bc78f3-ad11-4d26-8c66-a3fea120d0ca","block_type":"box","text":"taxable year, the Fund may decide to retain a portion","page_number":85,"box":{"x":498,"y":438,"width":390,"height":12}},{"id":"0ef182a4-636a-421d-9b03-b98892b3b1aa","block_type":"box","text":"of its income or gains. The Fund will be subject to U.S.","page_number":85,"box":{"x":116,"y":454,"width":395,"height":12}},{"id":"a9aeb82a-e659-485d-bf4b-520754f7aa16","block_type":"box","text":"federal income taxation and excise taxation (as","page_number":85,"box":{"x":512,"y":454,"width":352,"height":12}},{"id":"b23aaab0-26c3-4806-8053-640b1a738930","block_type":"box","text":"described below) to the extent it does not distribute all (o","page_number":85,"box":{"x":116,"y":469,"width":410,"height":12}},{"id":"483b4888-4afd-4284-a40e-f2ba74651745","block_type":"box","text":"r, in the case of the excise tax, substantially all)","page_number":85,"box":{"x":528,"y":469,"width":347,"height":12}},{"id":"82ecf49c-a4fe-4b05-9446-1b9f0525d66d","block_type":"box","text":"of such income or gains. In certain circumstances,","page_number":85,"box":{"x":116,"y":485,"width":370,"height":12}},{"id":"feed68e3-8056-4858-82ab-4a9751fb6a5c","block_type":"box","text":"including in instances where the operational cost of","page_number":85,"box":{"x":486,"y":485,"width":376,"height":12}},{"id":"24bf52f5-f68a-4d96-a745-b0fe4a58f9a4","block_type":"box","text":"the distribution would exceed the amount of the income","page_number":85,"box":{"x":116,"y":500,"width":407,"height":10}},{"id":"d20a62b2-1db0-4821-af71-7238025a86aa","block_type":"box","text":"or excise tax, BFA or an affiliate may voluntarily","page_number":85,"box":{"x":523,"y":500,"width":351,"height":12}},{"id":"dfa63d72-27c2-49ee-a30b-9d1e20cf1842","block_type":"box","text":"pay the tax on behalf of the Fund or reimburse the Fund fo","page_number":85,"box":{"x":117,"y":516,"width":424,"height":12}},{"id":"027d9eae-3609-4d2f-82ef-dae42951ef93","block_type":"box","text":"r the tax. 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If the Fund fails to qualify as a RIC for a per","page_number":85,"box":{"x":117,"y":547,"width":354,"height":12}},{"id":"38c007d7-f1c1-4d4e-b7f5-8c5a4f8cc293","block_type":"box","text":"iod greater than two taxable years, the Fund may be","page_number":85,"box":{"x":471,"y":547,"width":385,"height":12}},{"id":"b7601f34-8451-404b-a59f-f9844e8fb455","block_type":"box","text":"required to recognize any net built-in gains w","page_number":85,"box":{"x":117,"y":562,"width":313,"height":12}},{"id":"2eda53cc-e342-4fc2-baa2-b1334a730a42","block_type":"box","text":"with respect to certain of its assets (","page_number":85,"box":{"x":430,"y":562,"width":261,"height":12}},{"id":"958ef14a-bdc9-432a-a0bb-4f6efb1f33ff","block_type":"box","text":"i.e.,","page_number":85,"box":{"x":692,"y":562,"width":24,"height":12}},{"id":"e8e73e79-1366-4607-bc25-12fccf24e62e","block_type":"box","text":"the excess of the","page_number":85,"box":{"x":718,"y":562,"width":133,"height":10}},{"id":"3aff55a9-54e8-48ae-8ac6-79e258fc1717","block_type":"box","text":"aggregate gains, including items of income, over","page_number":85,"box":{"x":116,"y":578,"width":357,"height":12}},{"id":"91122c5f-ec34-4163-9bec-b629371669c5","block_type":"box","text":"aggregate losses that would have been realized with","page_number":85,"box":{"x":474,"y":578,"width":386,"height":12}},{"id":"d1adc047-6440-4c0d-accf-70e473ae40d0","block_type":"box","text":"respect to such assets if the Fund had been liquidated)","page_number":85,"box":{"x":117,"y":593,"width":398,"height":12}},{"id":"c941f928-801a-4ba6-8bcb-e3f4e8b0b2ba","block_type":"box","text":"if it qualifies as a RIC in a subsequent year.","page_number":85,"box":{"x":515,"y":593,"width":326,"height":12}},{"id":"2e818196-c4ff-4029-aea1-ede5f0e85f5e","block_type":"box","text":"Excise Tax.","page_number":85,"box":{"x":117,"y":622,"width":87,"height":9}},{"id":"0f2529a3-6a36-4e45-a495-79195c129e74","block_type":"box","text":"The Fund will be subject to a 4% excise tax on certain undistributed income if it does not","page_number":85,"box":{"x":205,"y":622,"width":652,"height":12}},{"id":"11552668-e324-46c7-8c3d-d2efc5bcc958","block_type":"box","text":"distribute to its shareholders in each calendar year at","page_number":85,"box":{"x":116,"y":637,"width":385,"height":12}},{"id":"355f7d8b-bd64-40ad-8286-7df4b01e7af2","block_type":"box","text":"t least 98% of its ordinary income for the calendar","page_number":85,"box":{"x":501,"y":637,"width":362,"height":12}},{"id":"34379470-90a3-4dcd-901c-41d883fae613","block_type":"box","text":"year plus at least 98.2% of its capital gain net in","page_number":85,"box":{"x":116,"y":653,"width":346,"height":12}},{"id":"a52e5392-c485-4d54-9965-074acad2bbaa","block_type":"box","text":"come for the 12 months ended October 31 of such year.","page_number":85,"box":{"x":463,"y":653,"width":413,"height":12}},{"id":"fd7fc0b5-b51b-43a9-84ca-3509eaa54d41","block_type":"box","text":"For this purpose, however, any ordinary income or c","page_number":85,"box":{"x":117,"y":668,"width":379,"height":12}},{"id":"daef6fec-2707-442a-9884-0b95d660872c","block_type":"box","text":"apital gain net income retained by the Fund that is","page_number":85,"box":{"x":496,"y":668,"width":363,"height":12}},{"id":"f19f6baf-297d-4cce-917d-7b31f7f2c991","block_type":"box","text":"subject to corporate income tax will be considered to","page_number":85,"box":{"x":116,"y":684,"width":381,"height":12}},{"id":"c107fefb-c736-43a0-9bf3-c2f000ce3d2a","block_type":"box","text":"have been distributed by year-end. In addition, the","page_number":85,"box":{"x":503,"y":684,"width":365,"height":12}},{"id":"5bde57a7-633f-4201-879f-d1b4a413e1fb","block_type":"box","text":"minimum amounts that must be distributed in any y","page_number":85,"box":{"x":117,"y":699,"width":371,"height":12}},{"id":"9378c9ee-f9ce-4b5b-9a39-0cecb886c5dd","block_type":"box","text":"ear to avoid the excise tax will be increased or","page_number":85,"box":{"x":488,"y":699,"width":336,"height":10}},{"id":"69244aed-41e8-45a3-9a3a-d63d47925419","block_type":"box","text":"decreased to reflect any underdistribution or overdistribut","page_number":85,"box":{"x":116,"y":715,"width":415,"height":12}},{"id":"da847c0b-591a-45fe-9a71-13b83bdc0235","block_type":"box","text":"ion, as the case may be, from the previous year.","page_number":85,"box":{"x":532,"y":715,"width":349,"height":12}},{"id":"83f290f5-eb61-4cba-ac18-4c0ae9da051e","block_type":"box","text":"Net Capital Loss Carryforwards.","page_number":85,"box":{"x":117,"y":743,"width":254,"height":12}},{"id":"e1d6bce6-889c-48a7-afc7-245fca8297f9","block_type":"box","text":"Net capital loss carryforwards may be applied against any net","page_number":85,"box":{"x":378,"y":743,"width":457,"height":12}},{"id":"9ff648a8-493c-4929-8033-e1bc440fd062","block_type":"box","text":"realized capital gains in each succeeding year, until they have been reduced to zero.","page_number":85,"box":{"x":117,"y":759,"width":627,"height":12}},{"id":"92ec70d9-81cd-459d-aa73-d969d6a51a31","block_type":"box","text":"In the event that the Fund were to experience an ownership change as defined under the Internal","page_number":85,"box":{"x":117,"y":787,"width":720,"height":12}},{"id":"5b71fe16-1ee8-4201-bf65-3fb9d9fe4cb8","block_type":"box","text":"Revenue Code, the loss carryforwards and other favorable tax attributes of the Fund, if any, may be","page_number":85,"box":{"x":117,"y":802,"width":740,"height":13}},{"id":"0817f6d7-8915-44d5-818a-959089c3de33","block_type":"box","text":"subject to limitation.","page_number":85,"box":{"x":116,"y":818,"width":146,"height":12}},{"id":"a957dda4-986a-44e9-937b-bfbff021eed6","block_type":"box","text":"Taxation of U.S. Shareholders.","page_number":85,"box":{"x":116,"y":846,"width":249,"height":10}},{"id":"8b44a213-cf1b-4015-ae75-66247a5e2047","block_type":"box","text":"Dividends and other distributions by the Fund are generally treated","page_number":85,"box":{"x":366,"y":846,"width":500,"height":12}},{"id":"d1baa3d4-78d9-4133-818f-0cea3514a19f","block_type":"box","text":"under the Internal Revenue Code as received by the shareholders at the time the dividend or","page_number":85,"box":{"x":117,"y":862,"width":694,"height":12}},{"id":"d6bde9ca-e8d1-4b53-b3b2-7ed5df0faa16","block_type":"box","text":"distribution is made. However, any dividend or distribution declared by the Fund in October, November","page_number":85,"box":{"x":116,"y":877,"width":767,"height":12}},{"id":"b186e139-6b72-480a-a6d5-2887799f3170","block_type":"box","text":"76","page_number":85,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6744314f-4e4c-4d16-917a-70954c8ded57","block_type":"box","text":"NM1026U-6004408-85/267","page_number":85,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"cd7fd659-ec9d-48b1-b148-736c610903bc","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":86,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"cb6b1178-6796-4902-8a7a-ca28f15fefdc","block_type":"box","text":"month shall be deemed to have been received by each shareholder on December 31 of such calendar","page_number":86,"box":{"x":117,"y":102,"width":763,"height":13}},{"id":"d39a7a77-4904-4f41-be2f-ea93c3373d88","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":86,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"989cd6e4-7487-4049-ba41-0839f2846290","block_type":"box","text":"actually paid by the Fund during January of the following calendar year.","page_number":86,"box":{"x":116,"y":134,"width":536,"height":12}},{"id":"73430abe-9185-4d20-bdac-631f190ede17","block_type":"box","text":"The Fund intends to distribute annually to its shareholder","page_number":86,"box":{"x":116,"y":162,"width":414,"height":12}},{"id":"23274336-1a3b-4e7a-bc09-1940f762d327","block_type":"box","text":"s substantially all of its investment company","page_number":86,"box":{"x":530,"y":161,"width":323,"height":13}},{"id":"68f42916-9846-49a1-9921-cd442b31125c","block_type":"box","text":"taxable income and any net realized long-term capital","page_number":86,"box":{"x":116,"y":177,"width":394,"height":12}},{"id":"3b490467-d959-4297-92c7-742b85d9f52e","block_type":"box","text":"gains in excess of net realized short-term capital","page_number":86,"box":{"x":510,"y":177,"width":356,"height":12}},{"id":"9e516675-91cc-4ada-9675-1c62487167e4","block_type":"box","text":"losses (including any capital loss carryovers). However, if the Fund retains for investment an amount","page_number":86,"box":{"x":117,"y":192,"width":734,"height":13}},{"id":"6a7e48da-4c0c-438d-86fb-b1617b52e756","block_type":"box","text":"equal to all or a portion of its net long-term capital","page_number":86,"box":{"x":116,"y":208,"width":364,"height":12}},{"id":"f3ccc952-6ba5-4317-83be-39a1d6e2ffee","block_type":"box","text":"gains in excess of its net short-term capital losses","page_number":86,"box":{"x":480,"y":208,"width":367,"height":12}},{"id":"4b2dac47-6470-4829-a9d3-8227382f1d67","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":86,"box":{"x":117,"y":223,"width":742,"height":13}},{"id":"43a02c88-a018-49ff-81e4-7f5f1e776f5a","block_type":"box","text":"amount retained. In that event, unless the retai","page_number":86,"box":{"x":116,"y":239,"width":338,"height":11}},{"id":"01a5a084-ebb4-45f7-9fa3-94f7f827a6aa","block_type":"box","text":"ned amount is deemed to be de minimis or the applicable","page_number":86,"box":{"x":456,"y":239,"width":421,"height":12}},{"id":"a47f3a73-cf97-4f39-be3a-22581ab8b119","block_type":"box","text":"tax is otherwise reimbursed by BFA or an aff","page_number":86,"box":{"x":116,"y":254,"width":324,"height":13}},{"id":"f6e4ed90-6fef-4a9a-acb6-8094510fd5a8","block_type":"box","text":"iliate, the Fund will generally designate such retained","page_number":86,"box":{"x":441,"y":255,"width":389,"height":12}},{"id":"bd5d800f-7e6a-4f40-946b-2f86a561db88","block_type":"box","text":"amounts as undistributed capital gains in a notice to","page_number":86,"box":{"x":116,"y":270,"width":382,"height":12}},{"id":"7b42f094-1467-43ac-a929-9f3ede7b65f6","block_type":"box","text":"its shareholders who (a) will be required to include in","page_number":86,"box":{"x":499,"y":270,"width":386,"height":12}},{"id":"add2648b-7267-4699-b547-a86300fecaeb","block_type":"box","text":"income for U.S. federal income tax purposes, as l","page_number":86,"box":{"x":117,"y":285,"width":358,"height":12}},{"id":"c43a2ec9-061e-4e09-90cf-49bab60993c7","block_type":"box","text":"ong-term capital gains, their proportionate shares of the","page_number":86,"box":{"x":476,"y":285,"width":408,"height":13}},{"id":"897b1612-a4dc-4a16-aaf9-fd37af2d19e5","block_type":"box","text":"undistributed amount, (b) will be entitled to credit thei","page_number":86,"box":{"x":117,"y":301,"width":382,"height":12}},{"id":"809dee7e-a99c-4ea7-a2d6-113afcbc0c91","block_type":"box","text":"r proportionate shares of the tax paid by the Fund","page_number":86,"box":{"x":501,"y":301,"width":364,"height":12}},{"id":"7b163429-7bcd-4f4a-83b9-971ae28cbdd3","block_type":"box","text":"on the undistributed amount against their U.","page_number":86,"box":{"x":116,"y":317,"width":318,"height":12}},{"id":"dc1bb422-5828-4965-a80c-79ac409c34bf","block_type":"box","text":"S. federal income tax liabilities, if any, and to claim refunds to","page_number":86,"box":{"x":436,"y":316,"width":448,"height":13}},{"id":"be9ba14e-826c-4d65-a15c-373c21ff78bf","block_type":"box","text":"the extent their credits exceed their liabilities, if","page_number":86,"box":{"x":116,"y":332,"width":344,"height":11}},{"id":"923906c6-0929-4444-93c1-b09d9b847160","block_type":"box","text":"any, and (c) will be entitled to increase their tax basis, for","page_number":86,"box":{"x":460,"y":332,"width":418,"height":12}},{"id":"77b9cc8a-f2b8-473f-87f3-a71d3bff7ce7","block_type":"box","text":"U.S. federal income tax purposes, in their shares","page_number":86,"box":{"x":117,"y":347,"width":354,"height":12}},{"id":"1d006101-0c13-41d9-818e-5ed7b88e21d9","block_type":"box","text":"by an amount equal to the excess of the amount in","page_number":86,"box":{"x":471,"y":347,"width":379,"height":13}},{"id":"92877b75-782a-4a72-977f-805b33957980","block_type":"box","text":"clause (a) over the amount in clause (b). Organizations or","page_number":86,"box":{"x":116,"y":363,"width":420,"height":12}},{"id":"711c239c-5cf3-4d40-b8fe-1c41ea9f14d4","block_type":"box","text":"r persons not subject to U.S. federal income tax","page_number":86,"box":{"x":536,"y":363,"width":346,"height":12}},{"id":"03429dce-8d02-4310-aec1-9b661ca49c30","block_type":"box","text":"on such capital gains will be entitled to a refund of their p","page_number":86,"box":{"x":116,"y":378,"width":403,"height":13}},{"id":"2eba0cd3-ec1e-42a2-90fa-878cbe0fb8e3","block_type":"box","text":"pro rata","page_number":86,"box":{"x":519,"y":379,"width":57,"height":11}},{"id":"4026b5ed-4074-4722-9e23-61c853c8d62a","block_type":"box","text":"share of such taxes paid by the Fund","page_number":86,"box":{"x":576,"y":378,"width":279,"height":13}},{"id":"1fb733c6-be55-4de4-bf9f-33151130da32","block_type":"box","text":"upon filing appropriate returns or claims for refund with the IRS.","page_number":86,"box":{"x":117,"y":394,"width":465,"height":12}},{"id":"83711ada-df57-483b-976e-1ec591335dcb","block_type":"box","text":"Distributions of net long-term capital gains, if any, that the Fund reports as capital gains dividends are","page_number":86,"box":{"x":117,"y":422,"width":758,"height":12}},{"id":"40daf16c-4776-437f-9c78-9ba022fa2078","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":86,"box":{"x":116,"y":437,"width":732,"height":12}},{"id":"9994b923-cd78-4a98-8892-b2dee7ed6292","block_type":"box","text":"shareholder has held shares of the Fund. All other dividends of the Fund (including dividends from","page_number":86,"box":{"x":116,"y":453,"width":734,"height":12}},{"id":"8d4edb8f-6ff4-45cd-8ac6-9f13b9be3c79","block_type":"box","text":"short-term capital gains) from its current and accumulated earnings and profits (“regular dividends”) are","page_number":86,"box":{"x":116,"y":468,"width":772,"height":12}},{"id":"3c90547b-c9a8-4c4e-bbcf-0367b041b4c3","block_type":"box","text":"generally subject to tax as ordinary income, subject to the discussion of qualified dividend income","page_number":86,"box":{"x":116,"y":484,"width":728,"height":12}},{"id":"a3f478c6-1b25-43e6-beda-897b1576cd06","block_type":"box","text":"below. Long-term capital gains are eligible for taxation at a maximum rate of 15% or 20% for","page_number":86,"box":{"x":117,"y":499,"width":689,"height":13}},{"id":"54e588ec-c56a-4dda-bdff-cde7cf2d03fa","block_type":"box","text":"non-corporate shareholders, depending on whether their income exceeds certain threshold amounts.","page_number":86,"box":{"x":117,"y":515,"width":753,"height":12}},{"id":"9a1e866a-16e6-46ea-b94f-0af45a8ab3fe","block_type":"box","text":"If an individual receives a regular dividend qualifying for the long-term capital gains rates and such","page_number":86,"box":{"x":117,"y":543,"width":734,"height":12}},{"id":"e927928c-f11a-4856-81ea-a262c0b88b9f","block_type":"box","text":"dividend constitutes an “extraordinary dividend,” and the individual subsequently recognizes a loss on","page_number":86,"box":{"x":116,"y":558,"width":759,"height":12}},{"id":"e05de6c3-69a1-4fea-ac62-0c6ab3b1e07e","block_type":"box","text":"the sale or exchange of stock in respect of which the extraordinary dividend was paid, then the loss will","page_number":86,"box":{"x":116,"y":574,"width":770,"height":12}},{"id":"481b93eb-0e9a-4a3c-87f1-09c0afaf3504","block_type":"box","text":"be long-term capital loss to the extent of such extraordinary dividend. An “extraordinary dividend” on","page_number":86,"box":{"x":117,"y":589,"width":747,"height":12}},{"id":"0aabbe4f-9ad7-4034-981c-3ec50d2323d8","block_type":"box","text":"common stock for this purpose is generally a dividend (i) in an amount greater than or equal to 10% of","page_number":86,"box":{"x":116,"y":605,"width":763,"height":12}},{"id":"ddd592ab-5e23-453c-8c1b-3f929395769c","block_type":"box","text":"the taxpayer’s tax basis (or trading value) in a share of stock, aggregating dividends with ex-dividend","page_number":86,"box":{"x":116,"y":620,"width":753,"height":12}},{"id":"31500c71-0961-48f1-88c6-e61b2beaa020","block_type":"box","text":"dates within an 85-day period, or (ii) in an amount greater than 20% of the taxpayer’s tax basis (or","page_number":86,"box":{"x":116,"y":636,"width":733,"height":12}},{"id":"2d40b98a-e73c-4f58-b7c9-9ae6228f5526","block_type":"box","text":"trading value) in a share of stock, aggregating dividends with ex-dividend dates within a 365-day","page_number":86,"box":{"x":116,"y":651,"width":720,"height":12}},{"id":"32b6723f-0bb7-4b73-9d85-a0339045ca88","block_type":"box","text":"period.","page_number":86,"box":{"x":117,"y":667,"width":49,"height":12}},{"id":"ea8d7654-0e42-4723-bfef-5c34d34403be","block_type":"box","text":"Distributions in excess of the Fund’s current and accumulated earnings and profits will, as to each","page_number":86,"box":{"x":117,"y":695,"width":725,"height":12}},{"id":"f7e0d3ba-3795-429e-9032-14ab91b54a4d","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":86,"box":{"x":116,"y":710,"width":765,"height":12}},{"id":"6fc5b8f1-2b4b-4190-ac89-0c38a348c974","block_type":"box","text":"the Fund, and as a capital gain thereafter (if the shareholder holds shares of the Fund as capital","page_number":86,"box":{"x":116,"y":726,"width":712,"height":12}},{"id":"a580dff9-1135-4d47-a4cf-fcf415f4c992","block_type":"box","text":"assets). Distributions in excess of the Fund’s minimum distribution requirements, but not in excess of","page_number":86,"box":{"x":116,"y":741,"width":750,"height":12}},{"id":"2d1c9833-2c36-4d6d-bf33-3ea7588b49d4","block_type":"box","text":"the Fund’s current and accumulated earnings and profits, will be taxable to shareholders and will not","page_number":86,"box":{"x":116,"y":757,"width":745,"height":12}},{"id":"270effcc-c75a-4765-9952-ea9411fb5720","block_type":"box","text":"constitute nontaxable returns of capital. Shareholders receiving dividends or distributions in the form of","page_number":86,"box":{"x":116,"y":772,"width":763,"height":12}},{"id":"451e7b5e-9d79-4a59-b1ed-c8c0bcb15a87","block_type":"box","text":"additional shares should be treated for U.S. federal income tax purposes as receiving a distribution in","page_number":86,"box":{"x":116,"y":788,"width":751,"height":12}},{"id":"9e7c3cdd-8e1d-4aef-b93e-d6ac13f7e9e3","block_type":"box","text":"an amount equal to the amount of money that the shareholders receiving cash dividends or","page_number":86,"box":{"x":116,"y":803,"width":677,"height":12}},{"id":"0bce1a82-7281-4a10-9057-c336f7c8fc85","block_type":"box","text":"distributions will receive and should have a cost basis in the shares received equal to such amount.","page_number":86,"box":{"x":116,"y":819,"width":736,"height":12}},{"id":"6235868e-2852-4f17-8dac-3ee65ff545d6","block_type":"box","text":"A 3.8% U.S. federal Medicare contribution tax is imposed on net investment income, including, but not","page_number":86,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"76265070-ee75-4571-8ea1-9c0fe05c2b76","block_type":"box","text":"limited to, interest, dividends, and net gain from investments, of U.S. individuals with income exceeding","page_number":86,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"7cd09f7a-62b3-45b4-9804-092e33e8ee11","block_type":"box","text":"$200,000 (or $250,000 if married and filing jointly) and of estates and trusts.","page_number":86,"box":{"x":116,"y":877,"width":569,"height":13}},{"id":"bea0b7c7-5c76-42b5-9e64-6c78b74d9fe8","block_type":"box","text":"77","page_number":86,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"de924b5e-d578-422a-bf0c-316d012b1a58","block_type":"box","text":"NM1026U-6004408-86/267","page_number":86,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f9dc8252-d3ff-43bb-8e49-e978283adc22","block_type":"box","text":"Investors considering buying shares just prior to a dividend or capital gain distribution should be aware","page_number":87,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"a68929a2-eef3-44b4-b173-c1d58879cfe6","block_type":"box","text":"that, although the price of shares purchased at that time may reflect the amount of the forthcoming","page_number":87,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"2cb63f93-ec0c-4bc8-8b27-bf6cb1fa251e","block_type":"box","text":"distribution, such dividend or distribution may nevertheless be taxable to them. If the Fund is the holder","page_number":87,"box":{"x":116,"y":118,"width":770,"height":12}},{"id":"682e4f93-281c-43cc-a453-7e859e53d44a","block_type":"box","text":"of record of any security on the record date for any dividends payable with respect to such security,","page_number":87,"box":{"x":116,"y":134,"width":742,"height":12}},{"id":"cc07aaae-5b03-4c31-8634-affbc6a34818","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":87,"box":{"x":116,"y":149,"width":741,"height":12}},{"id":"2e74c1f1-b91a-4abf-a574-13e78327baec","block_type":"box","text":"later of (a) the date such security became ex-dividend with respect to such dividends (","page_number":87,"box":{"x":117,"y":165,"width":638,"height":12}},{"id":"285dcb26-e7dc-4025-b085-13c968d97fff","block_type":"box","text":"i.e.","page_number":87,"box":{"x":756,"y":165,"width":21,"height":9}},{"id":"da297f48-b359-4fb9-98fd-f46a8ec88158","block_type":"box","text":", the date on","page_number":87,"box":{"x":780,"y":165,"width":97,"height":11}},{"id":"844d352b-b9f7-4375-8188-f9420a512b58","block_type":"box","text":"which a buyer of the security would not be entitled to receive the declared, but unpaid, dividends); or","page_number":87,"box":{"x":116,"y":180,"width":750,"height":12}},{"id":"ed5fff58-7d05-4fe9-9c49-b1380ffe42c6","block_type":"box","text":"(b) the date the Fund acquired such security. Accordingly, in order to satisfy its income distribution","page_number":87,"box":{"x":117,"y":196,"width":733,"height":12}},{"id":"5fe29160-2836-403e-ba49-2299d6c6f58b","block_type":"box","text":"requirements, the Fund may be required to pay dividends based on anticipated earnings, and","page_number":87,"box":{"x":117,"y":211,"width":697,"height":12}},{"id":"b48a62c7-eb6e-40b1-84af-1784358c6fd6","block_type":"box","text":"shareholders may receive dividends in an earlier year than would otherwise be the case.","page_number":87,"box":{"x":116,"y":227,"width":662,"height":12}},{"id":"0e96d2fa-db05-498f-bacf-dc85ea183f0d","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":87,"box":{"x":117,"y":258,"width":754,"height":12}},{"id":"4e1efc7f-682a-4e2f-88ef-17f61a091482","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":87,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"9cbd1984-d557-41f8-bd7c-a9132ca3f72d","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":87,"box":{"x":117,"y":289,"width":746,"height":12}},{"id":"e2d7cc4f-72c7-4258-b898-c412a66dcbf8","block_type":"box","text":"passive foreign investment company (“PFIC”) losses over post-October foreign currency and PFIC","page_number":87,"box":{"x":117,"y":304,"width":734,"height":12}},{"id":"f0df9739-937f-440c-b965-366ccea99365","block_type":"box","text":"gains and (ii) the excess of post-December ordinary losses over post-December ordinary income) until","page_number":87,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"08d06c77-14ce-4b43-bb68-815a8be06e60","block_type":"box","text":"the next taxable year in computing its investment company taxable income and net capital gain, which","page_number":87,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"c117fd9b-ef47-4746-8b80-3667488265bb","block_type":"box","text":"will defer the recognition of such realized losses. Such deferrals and other rules regarding gains and","page_number":87,"box":{"x":116,"y":351,"width":749,"height":12}},{"id":"068e85df-8d31-4374-8618-901088203508","block_type":"box","text":"losses realized after October (or December) may affect the tax character of shareholder distributions.","page_number":87,"box":{"x":117,"y":366,"width":755,"height":12}},{"id":"5ba12639-481a-4189-9228-841a76629add","block_type":"box","text":"Sales of Shares.","page_number":87,"box":{"x":116,"y":397,"width":125,"height":10}},{"id":"0114b808-ad7a-4551-927e-8fb4908a1bf3","block_type":"box","text":"Upon the sale or exchange of shares of the Fund, a shareholder will realize a taxable","page_number":87,"box":{"x":242,"y":397,"width":620,"height":12}},{"id":"4db2152e-b07c-4165-bc41-68d0927a789b","block_type":"box","text":"gain or loss equal to the difference between the amount realized and the shareholder’s basis in shares of","page_number":87,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"0a473cdc-f17f-46b7-bc9d-038fbc9dc393","block_type":"box","text":"the Fund. A redemption of shares by the Fund will be treated as a sale for this purpose. Such gain or loss","page_number":87,"box":{"x":116,"y":428,"width":761,"height":12}},{"id":"2c983d30-04e0-426d-9182-9186c54cc049","block_type":"box","text":"will be treated as capital gain or loss if the shares are capital assets in the shareholder’s hands and will be","page_number":87,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"bd10ea1d-e747-4417-a63e-82e5fb74b750","block_type":"box","text":"long-term capital gain or loss if the shares are held for more than one year and short-term capital gain or","page_number":87,"box":{"x":117,"y":459,"width":753,"height":12}},{"id":"f47baa7d-c2ef-4ceb-b59e-645f826785aa","block_type":"box","text":"loss if the shares are held for one year or less. Any loss realized on a sale or exchange will be disallowed","page_number":87,"box":{"x":117,"y":475,"width":759,"height":12}},{"id":"7df8d520-c6f3-44e3-9848-e8c246fa48d4","block_type":"box","text":"to the extent the shares disposed of are replaced, including replacement through the reinvesting of","page_number":87,"box":{"x":116,"y":490,"width":713,"height":12}},{"id":"74fcd0a6-6587-423d-b57a-cb8204ea5685","block_type":"box","text":"dividends or capital gains distributions, or by an option or contract to acquire substantially identical shares,","page_number":87,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"dd7562bb-926a-40bf-b57b-8671367ac74c","block_type":"box","text":"within a 61-day period beginning 30 days before and ending 30 days after the disposition of the shares. In","page_number":87,"box":{"x":116,"y":521,"width":764,"height":12}},{"id":"581e0006-294a-4445-b412-30058ae4ef82","block_type":"box","text":"such a case, the basis of the shares acquired will be increased to reflect the disallowed loss. Any loss","page_number":87,"box":{"x":116,"y":537,"width":734,"height":12}},{"id":"095bc32d-2656-415c-9ade-afd365dbde38","block_type":"box","text":"realized by a shareholder on the sale of Fund shares held by the shareholder for six months or less will be","page_number":87,"box":{"x":117,"y":552,"width":766,"height":12}},{"id":"0e572a20-df20-4122-98c6-086f2e4cc21b","block_type":"box","text":"treated for U.S. federal income tax purposes as a long-term capital loss to the extent of any distributions or","page_number":87,"box":{"x":116,"y":568,"width":770,"height":12}},{"id":"9ec9b6aa-2b0c-4de2-8276-fc2f83599c3f","block_type":"box","text":"deemed distributions of long-term capital gains received by the shareholder with respect to such share.","page_number":87,"box":{"x":116,"y":583,"width":744,"height":12}},{"id":"31ce9c58-d215-42ed-90b0-286ad2c847aa","block_type":"box","text":"The Medicare contribution tax described above will apply to the sale of Fund shares.","page_number":87,"box":{"x":116,"y":599,"width":611,"height":12}},{"id":"cbf9d85e-38be-42a5-8c74-5cfd6dedc498","block_type":"box","text":"If a shareholder incurs a sales charge in acquiring shares of the Fund, disposes of those shares within","page_number":87,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"172bb6d3-e80d-49e7-9617-0f874dfbb30f","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":87,"box":{"x":116,"y":645,"width":761,"height":12}},{"id":"227f1a72-ab40-404b-9324-5a8617e9cdd6","block_type":"box","text":"fund for which the otherwise applicable sales charge is reduced by reason of a reinvestment right (","page_number":87,"box":{"x":116,"y":661,"width":732,"height":12}},{"id":"70ee40b3-3dad-453c-a559-3e16d5a72cdd","block_type":"box","text":"e.g.","page_number":87,"box":{"x":849,"y":663,"width":26,"height":10}},{"id":"8948e3e9-603e-4f6b-afc4-f32c7ead70cc","block_type":"box","text":",","page_number":87,"box":{"x":878,"y":669,"width":2,"height":3}},{"id":"56df6723-dd3d-4256-906a-0c978fef41f3","block_type":"box","text":"an exchange privilege), the original sales charge will not be taken into account in computing gain or","page_number":87,"box":{"x":116,"y":676,"width":738,"height":12}},{"id":"91295608-e793-45ce-a57c-313e2b366323","block_type":"box","text":"loss on the disposition of the original shares to the extent the subsequent sales charge is reduced.","page_number":87,"box":{"x":117,"y":692,"width":728,"height":12}},{"id":"aac36b5b-3ae1-42ae-8836-96abedded7bc","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":87,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"df610869-3a4c-4ea4-a04f-f3e3209b1d07","block_type":"box","text":"acquired shares. Furthermore, the same rule also applies to a disposition of the newly acquired shares","page_number":87,"box":{"x":116,"y":723,"width":762,"height":12}},{"id":"a2366fef-df9e-4e10-9427-cc563d3d6134","block_type":"box","text":"made within 90 days of the second acquisition. This provision prevents shareholders from immediately","page_number":87,"box":{"x":117,"y":738,"width":759,"height":12}},{"id":"cc4bf4fa-dd15-44e8-a20d-cfb4a68b7afc","block_type":"box","text":"deducting the sales charge by shifting their investments within a family of mutual funds.","page_number":87,"box":{"x":116,"y":754,"width":647,"height":12}},{"id":"805425d0-8f86-4a78-b28c-ef2b3ef80ae9","block_type":"box","text":"Backup Withholding.","page_number":87,"box":{"x":117,"y":785,"width":165,"height":12}},{"id":"e92d2433-73b8-44d0-b5a9-c03d4cf590a3","block_type":"box","text":"In certain cases, the Fund will be required to withhold at a 24% rate and remit to","page_number":87,"box":{"x":289,"y":785,"width":593,"height":12}},{"id":"3e336e9d-d2d1-47fc-af25-af5eb19c2593","block_type":"box","text":"the U.S. Treasury such amounts withheld from any distributions paid to a shareholder who: (i) has","page_number":87,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"409f46ca-cd85-4e1b-a482-d22d7c69d552","block_type":"box","text":"failed to provide a correct taxpayer identification number; (ii) is subject to backup withholding by the","page_number":87,"box":{"x":116,"y":816,"width":737,"height":12}},{"id":"9d2eba91-4204-4053-9f7b-e1214523f0ce","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":87,"box":{"x":117,"y":831,"width":759,"height":12}},{"id":"0d8baf8e-cff3-486e-98f1-ea644360550e","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":87,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"d73017ae-1b3e-42ae-a64d-10f36b8966c4","block_type":"box","text":"withholding is not an additional tax and any amount withheld may be credited against a shareholder’s","page_number":87,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"61d0c368-b995-4c0f-9483-55e3532b335c","block_type":"box","text":"U.S. federal income tax liability.","page_number":87,"box":{"x":117,"y":878,"width":238,"height":12}},{"id":"62d953f9-ca3e-4624-9220-80b5da454981","block_type":"box","text":"78","page_number":87,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"bc9e6ff5-1158-477d-958a-6994ae8d7b2a","block_type":"box","text":"NM1026U-6004408-87/267","page_number":87,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3e97b7fd-68e0-492a-88d2-828bf01373d6","block_type":"box","text":"Sections 351 and 362.","page_number":88,"box":{"x":116,"y":87,"width":173,"height":10}},{"id":"223b7e63-4547-48f7-bfc6-6387919acb86","block_type":"box","text":"The Trust, on behalf of the Fund, has the right to reject an order to create","page_number":88,"box":{"x":291,"y":87,"width":554,"height":12}},{"id":"bb5b2baf-9d95-473e-8a52-a4ff9507a57e","block_type":"box","text":"Creation Units of the Fund if the Authorized Participant (or group of Authorized Participants) would,","page_number":88,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"6e830bdd-e1b6-4669-b38a-2b510e23f88d","block_type":"box","text":"upon obtaining the Creation Units, own 80% or more of the outstanding shares of the Fund and if,","page_number":88,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"ed27bd9f-b4ed-4101-a1da-3c9ee5451eb8","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":88,"box":{"x":117,"y":134,"width":749,"height":11}},{"id":"e7839a08-041a-4e63-80cc-aea258d67da4","block_type":"box","text":"Deposit Securities different from the market value of such Deposit Securities on the date of deposit. If","page_number":88,"box":{"x":117,"y":149,"width":757,"height":12}},{"id":"238257d8-f296-44c8-b51b-1b250e4f801d","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":88,"box":{"x":116,"y":165,"width":763,"height":11}},{"id":"283c2849-354c-452f-acbd-3f0d9374a0b1","block_type":"box","text":"date, the Fund, upon disposition of the Deposit Securities, would recognize more taxable gain or less","page_number":88,"box":{"x":116,"y":180,"width":755,"height":12}},{"id":"0f4ebfd4-9847-4070-9336-d6868bf0bbf4","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":88,"box":{"x":116,"y":196,"width":700,"height":11}},{"id":"762298ac-ebb4-4c00-9b96-e6b4f9bc968b","block_type":"box","text":"anticipated that the Trust will exercise the right of rejection except in a case where the Trust","page_number":88,"box":{"x":116,"y":211,"width":686,"height":12}},{"id":"4effd58c-6f8f-4c64-9f92-083b40713598","block_type":"box","text":"determines that accepting the order could result in material adverse tax consequences to the Fund or","page_number":88,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"06ecc61e-bcc7-4cce-bfb4-0e45f4a7516e","block_type":"box","text":"its shareholders. The Trust also has the right to require information necessary to determine beneficial","page_number":88,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"6d278682-f638-4cc8-9091-1c3955b80d47","block_type":"box","text":"share ownership for purposes of the 80% determination.","page_number":88,"box":{"x":116,"y":258,"width":423,"height":11}},{"id":"2ad1e7af-5cf6-45b8-8e23-652f8267a345","block_type":"box","text":"Taxation of Certain Derivatives.","page_number":88,"box":{"x":116,"y":289,"width":256,"height":9}},{"id":"9dfe8193-9eee-4592-a5c7-a4e4dd18cf12","block_type":"box","text":"The Fund’s transactions in zero coupon securities, non-U.S.","page_number":88,"box":{"x":373,"y":289,"width":450,"height":12}},{"id":"5b6fc7db-12e7-45a2-ae26-c8e0cbd65f2e","block_type":"box","text":"currencies, forward contracts, options and futures contracts (including options and futures contracts on","page_number":88,"box":{"x":116,"y":304,"width":767,"height":12}},{"id":"3f2a86bc-3583-459e-b9d9-335d782b3841","block_type":"box","text":"non-U.S. currencies), to the extent permitted, will be subject to special provisions of the Internal","page_number":88,"box":{"x":117,"y":320,"width":713,"height":12}},{"id":"384746ea-fc62-41ee-a205-07ae564de390","block_type":"box","text":"Revenue Code (including provisions relating to “hedging transactions” and “straddles”) that, among","page_number":88,"box":{"x":117,"y":335,"width":739,"height":12}},{"id":"bb7d9d61-bbb3-4f4e-a7f0-26e3adbfd115","block_type":"box","text":"other consequences, may affect the character of gains and losses realized by the Fund (","page_number":88,"box":{"x":116,"y":351,"width":657,"height":12}},{"id":"d53b562d-b210-4159-a307-9b1c17f9fdeb","block_type":"box","text":"i.e.","page_number":88,"box":{"x":774,"y":351,"width":20,"height":9}},{"id":"5db94611-6d24-4e28-9984-d908578464b8","block_type":"box","text":", may affect","page_number":88,"box":{"x":798,"y":351,"width":90,"height":12}},{"id":"7adac61f-27f4-4584-adcb-f558ebe9643d","block_type":"box","text":"whether gains or losses are ordinary or capital), accelerate recognition of income to the Fund and defer","page_number":88,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"7d947c93-3bb8-44df-88bc-2ab5dd9661df","block_type":"box","text":"Fund losses. These rules could therefore affect the character, amount and timing of distributions to","page_number":88,"box":{"x":117,"y":382,"width":737,"height":12}},{"id":"48b9ce0f-8af3-463a-b052-ab5259418734","block_type":"box","text":"shareholders. These provisions also (a) may require the Fund to mark-to-market certain types of the","page_number":88,"box":{"x":116,"y":397,"width":749,"height":12}},{"id":"f49eefe6-f101-42ed-9d7a-bb65cf3a40d0","block_type":"box","text":"positions in its portfolio (","page_number":88,"box":{"x":117,"y":413,"width":179,"height":12}},{"id":"2ac87e53-4e2a-4ead-b019-f79944a3bd70","block_type":"box","text":"i.e.","page_number":88,"box":{"x":297,"y":413,"width":20,"height":9}},{"id":"d44e90d6-19a6-493e-8e2a-616199235ca5","block_type":"box","text":", treat them as if they were closed out at the end of each year) and (b) may","page_number":88,"box":{"x":320,"y":413,"width":561,"height":12}},{"id":"6deabe72-59f0-4a0c-b5ff-4b74042bc171","block_type":"box","text":"cause the Fund to recognize income without receiving cash with which to pay dividends or make","page_number":88,"box":{"x":116,"y":428,"width":720,"height":12}},{"id":"c6145003-d912-4daa-a033-cc86f2b834a7","block_type":"box","text":"distributions in amounts necessary to satisfy the distribution requirements for avoiding income and","page_number":88,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"13768acf-98f2-4682-ab10-64dea3533a67","block_type":"box","text":"excise taxes. The Fund will monitor its transactions, will make the appropriate tax elections and will","page_number":88,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"dcd7eb51-b759-4157-b834-acc3f91dbfd7","block_type":"box","text":"make the appropriate entries in its books and records when it acquires any zero coupon security,","page_number":88,"box":{"x":117,"y":475,"width":723,"height":12}},{"id":"785b8239-3f5c-446c-aa6f-6afc3c84f275","block_type":"box","text":"non-U.S. currency, forward contract, option, futures contract or hedged investment in order to mitigate","page_number":88,"box":{"x":117,"y":490,"width":761,"height":12}},{"id":"4cf29bd4-e2f6-4db9-a5c0-b124f59ae3b6","block_type":"box","text":"the effect of these rules and prevent disqualification of the Fund as a RIC.","page_number":88,"box":{"x":116,"y":506,"width":553,"height":12}},{"id":"2e1b4cbd-d897-406c-b91f-9fc61cef4be9","block_type":"box","text":"The Fund’s investments in so-called “Section 1256 contracts,” such as regulated futures contracts,","page_number":88,"box":{"x":116,"y":537,"width":736,"height":12}},{"id":"99df511d-7c1f-4b2d-b135-a6f2bfb72f09","block_type":"box","text":"most non-U.S. currency forward contracts traded in the interbank market and options on most security","page_number":88,"box":{"x":117,"y":552,"width":762,"height":12}},{"id":"5051a6f7-e0f2-4b5c-8d2f-89c956aeb401","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":88,"box":{"x":117,"y":568,"width":751,"height":12}},{"id":"af85d098-73d8-414d-a9ec-71c1eb539915","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":88,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"94d8a60e-759e-45ed-ae99-44baf9aa5225","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":88,"box":{"x":117,"y":599,"width":728,"height":12}},{"id":"9f94902a-2838-4a6b-bff8-86a03fb58e4f","block_type":"box","text":"value at the end of the taxable year. The resulting gain","page_number":88,"box":{"x":116,"y":614,"width":411,"height":12}},{"id":"0e0c20e7-df9d-4a78-a70e-660b8fca2e60","block_type":"box","text":"or loss will be combined with any gain or loss","page_number":88,"box":{"x":527,"y":614,"width":340,"height":12}},{"id":"49917732-e79f-414e-b2e7-14658cf5900a","block_type":"box","text":"realized by the Fund from positions in Section 1256 contracts closed during the taxable year. Provided","page_number":88,"box":{"x":117,"y":630,"width":764,"height":12}},{"id":"c9f7c188-9d7a-4b33-a8ce-000e1c4891e3","block_type":"box","text":"such positions were held as capital assets and were not","page_number":88,"box":{"x":116,"y":645,"width":420,"height":12}},{"id":"d39f8a97-26b9-4b9e-9cf8-e3b76bc77118","block_type":"box","text":"part of a “hedging transaction” nor part of a","page_number":88,"box":{"x":537,"y":645,"width":324,"height":12}},{"id":"11899446-8ea0-41f0-98df-eb2884fcddc7","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":88,"box":{"x":116,"y":661,"width":735,"height":12}},{"id":"0813c567-e62c-46df-8ee3-2c14409dac11","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":88,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"8fcdb759-30d0-4916-a724-a753b019a3c1","block_type":"box","text":"of time the positions were actually held by the Fund.","page_number":88,"box":{"x":116,"y":692,"width":386,"height":12}},{"id":"8450eb32-9930-4898-8aff-907cf6075799","block_type":"box","text":"As a result of entering into swap contracts, the Fund may make or receive periodic net payments. The","page_number":88,"box":{"x":116,"y":723,"width":756,"height":12}},{"id":"50b69350-8935-4f0c-8ab9-630e9d37a519","block_type":"box","text":"Fund may also make or receive a payment when a swap is terminated prior to maturity through an","page_number":88,"box":{"x":117,"y":738,"width":727,"height":12}},{"id":"ac327480-3e8d-435a-88f1-a5780faf6223","block_type":"box","text":"assignment of the swap or other closing transaction. Periodic net payments will generally constitute","page_number":88,"box":{"x":116,"y":754,"width":736,"height":12}},{"id":"4840bba2-af62-4aa4-b1f5-27db20db0d59","block_type":"box","text":"ordinary income or deductions, while termination of a swap will generally result in capital gain or loss","page_number":88,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"0be0e4d9-16de-4690-8a7b-82e022e1fa6e","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":88,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"459b89fd-1954-4de1-84a5-b91c617669f2","block_type":"box","text":"one year). With respect to certain types of swaps, the Fund may be required to currently recognize","page_number":88,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"39b9b8da-e9e6-4bea-8423-48b24cf7be97","block_type":"box","text":"income or loss with respect to future payments on such swaps or may elect under certain","page_number":88,"box":{"x":117,"y":816,"width":660,"height":12}},{"id":"7af63467-d61b-469c-952c-77b5c773c92f","block_type":"box","text":"circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.","page_number":88,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"0d52efcc-aca5-457e-b0d2-5c809fe80452","block_type":"box","text":"Qualified Dividend Income and Qualified REIT Dividends.","page_number":88,"box":{"x":116,"y":862,"width":454,"height":11}},{"id":"be7e1333-11b3-4ed5-bf11-623124220590","block_type":"box","text":"For non-corporate shareholders,","page_number":88,"box":{"x":571,"y":862,"width":251,"height":12}},{"id":"bec06017-7e58-4eb1-aa1b-45521fd8684b","block_type":"box","text":"distributions by the Fund of investment company taxable income (including any short-term capital","page_number":88,"box":{"x":116,"y":878,"width":727,"height":12}},{"id":"97dafb8e-14bf-4f58-868e-affbe580a397","block_type":"box","text":"79","page_number":88,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2dd5d808-c96e-4f3b-ad01-cacebbd7afb9","block_type":"box","text":"NM1026U-6004408-88/267","page_number":88,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b940373b-eb87-46bb-84e0-c706e4bae68a","block_type":"box","text":"gains), whether received in cash or shares, will be taxable either as ordinary income or as qualified","page_number":89,"box":{"x":116,"y":87,"width":739,"height":12}},{"id":"f0398831-d0de-4155-a47f-d15b6b323235","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":89,"box":{"x":116,"y":103,"width":735,"height":12}},{"id":"14565185-75b1-4a14-9517-961949ee24c9","block_type":"box","text":"receives qualified dividend income on the securities it holds and the Fund reports the distribution as","page_number":89,"box":{"x":117,"y":118,"width":742,"height":12}},{"id":"4e933899-1b3e-46f7-9f5d-ce7aff652053","block_type":"box","text":"qualified dividend income. Qualified dividend income is, in general, dividend income from taxable U.S.","page_number":89,"box":{"x":116,"y":134,"width":761,"height":12}},{"id":"aa59b949-8a85-41d0-884b-3979fd3fe2c6","block_type":"box","text":"corporations and certain non-U.S. corporations (","page_number":89,"box":{"x":116,"y":149,"width":358,"height":12}},{"id":"06de5883-50b9-45cf-9523-85f9d29e2221","block_type":"box","text":"e.g.","page_number":89,"box":{"x":476,"y":152,"width":25,"height":9}},{"id":"4f0649fd-2fd3-4306-be54-06e9a31083a9","block_type":"box","text":", non-U.S. corporations that are not PFICs and","page_number":89,"box":{"x":505,"y":149,"width":350,"height":12}},{"id":"a3794871-37cf-424d-b577-25409d4aa4a0","block_type":"box","text":"which are incorporated in a possession of the U.S. or in certain countries with a comprehensive tax","page_number":89,"box":{"x":116,"y":165,"width":740,"height":11}},{"id":"954fc3ca-a884-422e-b864-11e2aaaf6fda","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":89,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"24001761-a220-4732-adbf-a6e2c313053a","block_type":"box","text":"U.S. (where the dividends are paid with respect to such stock)). Substitute payments received by the","page_number":89,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"352d7754-7d65-4ff4-a15c-5d21a053e86c","block_type":"box","text":"Fund with respect to dividends paid on securities lent out will not be qualified dividend income.","page_number":89,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"1f7bbb1e-bbf6-4885-a9ca-53ca7b621546","block_type":"box","text":"A dividend from the Fund will not be treated as qualified","page_number":89,"box":{"x":116,"y":242,"width":409,"height":12}},{"id":"e78798fa-19a9-4664-b935-678d1504915b","block_type":"box","text":"dividend income to the extent that: (i) the","page_number":89,"box":{"x":526,"y":242,"width":301,"height":12}},{"id":"54116caa-e16b-4e07-abec-e2fccb4f4788","block_type":"box","text":"shareholder has not held the shares on which t","page_number":89,"box":{"x":116,"y":258,"width":341,"height":9}},{"id":"62f8ebe3-aa2f-4145-b128-b720b92fd1f8","block_type":"box","text":"he dividend was paid for 61 days during the 121-day","page_number":89,"box":{"x":458,"y":258,"width":385,"height":12}},{"id":"e36bcce3-e1cd-4ab6-b822-7b2fbf969bdf","block_type":"box","text":"period that begins on the date that is 60 days befor","page_number":89,"box":{"x":117,"y":273,"width":369,"height":12}},{"id":"fb3892aa-0bab-4bec-aafe-d4d191226b32","block_type":"box","text":"e the date on which the shares become ex-dividend","page_number":89,"box":{"x":487,"y":273,"width":380,"height":10}},{"id":"b05d60d2-57fe-45f8-9cdc-26d54be49f57","block_type":"box","text":"with respect to such dividend or the Fund fails to sati","page_number":89,"box":{"x":116,"y":289,"width":381,"height":12}},{"id":"041bd0aa-1543-4350-81a6-3f2f9b937271","block_type":"box","text":"sfy those holding period requirements with respect to","page_number":89,"box":{"x":498,"y":289,"width":389,"height":12}},{"id":"c2285168-cd82-4142-acf1-22e5d75f1d0a","block_type":"box","text":"the securities it holds that paid the dividends distri","page_number":89,"box":{"x":116,"y":304,"width":360,"height":12}},{"id":"47a0f9ff-b672-47b2-8b34-4e86bf11ca94","block_type":"box","text":"buted to the shareholder (or, in the case of certain","page_number":89,"box":{"x":478,"y":304,"width":368,"height":12}},{"id":"e2119046-8883-4fd6-8f6e-d50e2f0a5ac7","block_type":"box","text":"preferred stocks, the holding requi","page_number":89,"box":{"x":117,"y":320,"width":246,"height":12}},{"id":"775382e8-716d-4f85-bd56-663953ed91c3","block_type":"box","text":"rement of 91 days during the 181-day","page_number":89,"box":{"x":365,"y":320,"width":273,"height":12}},{"id":"e0fc86d5-dacc-43d0-bd69-d9b9344e43f6","block_type":"box","text":"y period beginning on the date that","page_number":89,"box":{"x":638,"y":320,"width":250,"height":12}},{"id":"7b1349bd-70da-4cdc-baf0-5907ca2ba83a","block_type":"box","text":"is 90 days before the date on which the stock becomes","page_number":89,"box":{"x":117,"y":335,"width":404,"height":12}},{"id":"fc2765bf-f73f-47d3-bc61-63e096bf92dd","block_type":"box","text":"ex-dividend with respect to such dividend); (ii) the","page_number":89,"box":{"x":522,"y":335,"width":364,"height":12}},{"id":"7595a0c4-8928-497f-9935-59d4ce6b10dc","block_type":"box","text":"Fund or the shareholder is under an obligation (whether pur","page_number":89,"box":{"x":117,"y":351,"width":433,"height":12}},{"id":"80623b1d-11c4-418a-8806-8fe0eb9f4354","block_type":"box","text":"suant to a short sale or otherwise) to make","page_number":89,"box":{"x":550,"y":351,"width":315,"height":12}},{"id":"8c5498e4-8d34-4f18-a327-e2191693183b","block_type":"box","text":"related payments with respect to substantially similar or","page_number":89,"box":{"x":117,"y":366,"width":402,"height":12}},{"id":"aa39535b-93a7-4daf-a3ef-8e581c89be4f","block_type":"box","text":"r related property; or (iii) the shareholder elects to","page_number":89,"box":{"x":519,"y":366,"width":359,"height":12}},{"id":"dcbb4192-1e82-4dae-a3f3-dc8f02ae5e7b","block_type":"box","text":"treat such dividend as investment income under Se","page_number":89,"box":{"x":116,"y":382,"width":373,"height":9}},{"id":"5743225c-4ebc-4780-961a-fad3ec6136aa","block_type":"box","text":"ction 163(d)(4)(B) of the Internal Revenue Code.","page_number":89,"box":{"x":490,"y":382,"width":357,"height":12}},{"id":"2c48b3f0-ea4a-4fed-951f-89843a469769","block_type":"box","text":"Dividends received by the Fund from a REIT or another RIC may be treated as qualified dividend","page_number":89,"box":{"x":117,"y":413,"width":724,"height":12}},{"id":"962ac800-25ce-4ef7-9f56-cca2dea95f7e","block_type":"box","text":"income only to the extent the dividend distributions are attributable to qualified dividend income","page_number":89,"box":{"x":117,"y":428,"width":710,"height":12}},{"id":"f3483795-2eb0-47fb-9fc5-cd66ffaa8de0","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":89,"box":{"x":117,"y":444,"width":744,"height":12}},{"id":"9775693b-ea3a-4958-8bfe-b47014188521","block_type":"box","text":"and distributed to a shareholder generally will be taxable to the shareholder as ordinary income.","page_number":89,"box":{"x":116,"y":459,"width":716,"height":12}},{"id":"267c1700-bdc3-425b-b0d9-6f3765b80429","block_type":"box","text":"However, a non-corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified","page_number":89,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"424deb32-eb9b-4992-9f66-20f04c69a1ee","block_type":"box","text":"business income” deduction for ordinary REIT dividends, and a RIC may report dividends as eligible for","page_number":89,"box":{"x":117,"y":490,"width":770,"height":12}},{"id":"baf2d8a6-09e7-46b2-b5fd-07b56acdf9fd","block_type":"box","text":"this deduction to the extent the RIC’s income is derived from ordinary REIT dividends (reduced by","page_number":89,"box":{"x":116,"y":506,"width":731,"height":12}},{"id":"296524f9-bef1-4dac-bdae-501e5cf98059","block_type":"box","text":"allocable RIC expenses). A shareholder may treat the dividends as such provided the RIC and the","page_number":89,"box":{"x":116,"y":521,"width":734,"height":12}},{"id":"c0ec7036-8f46-45ac-83c3-63eddf605b30","block_type":"box","text":"shareholder satisfy applicable holding period requirements. A dividend from the Fund will not be","page_number":89,"box":{"x":116,"y":537,"width":716,"height":12}},{"id":"a2ea652d-a2f4-4f3c-bf5d-67ec29273747","block_type":"box","text":"treated as qualified REIT dividend income to the extent that: (i) the shareholder has not held the shares","page_number":89,"box":{"x":116,"y":552,"width":772,"height":12}},{"id":"f708bc9c-9bd8-484e-9c82-48c4bcc5c58f","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":89,"box":{"x":116,"y":568,"width":747,"height":12}},{"id":"7b32fa4e-a607-41b9-b228-9bbfd964798b","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":89,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"b299bb0f-39a3-4f9a-9b69-8d3e584545b2","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":89,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"fb84aa3c-8568-4ea9-b44e-eaa591090150","block_type":"box","text":"holds that paid the dividends distributed to the shareholder; or (ii) the Fund or the shareholder is under","page_number":89,"box":{"x":117,"y":614,"width":764,"height":12}},{"id":"00164463-189b-4bf6-b85e-70c49bf5e51b","block_type":"box","text":"an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to","page_number":89,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"6d8b92e0-6d19-4680-a079-afcb28bb09c4","block_type":"box","text":"substantially similar or related property. Distributions by the Fund of its net short-term capital gains will","page_number":89,"box":{"x":116,"y":645,"width":764,"height":12}},{"id":"9ca228cc-4734-4a60-9a7d-494240fa0a57","block_type":"box","text":"be taxable as ordinary income.","page_number":89,"box":{"x":117,"y":661,"width":226,"height":12}},{"id":"a48c6758-8283-41da-b49b-9913c840fe1d","block_type":"box","text":"Corporate Dividends Received Deduction.","page_number":89,"box":{"x":116,"y":692,"width":334,"height":12}},{"id":"342b0de5-bf37-4c1d-89cc-c6a2ce415d8f","block_type":"box","text":"For corporate shareholders, dividends paid by the Fund","page_number":89,"box":{"x":457,"y":692,"width":411,"height":12}},{"id":"3b767fc1-8de2-4038-b9f3-21c9f2a17024","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":89,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"9598c857-f94c-4d5d-84bc-c33bb8b843da","block_type":"box","text":"federal dividends received deduction and the Fund reports the distribution as eligible for such","page_number":89,"box":{"x":116,"y":723,"width":691,"height":12}},{"id":"5f37f5bd-611f-40fb-a01a-9cb4a31f098d","block_type":"box","text":"deduction. A 46-day minimum holding period during the 90-day period that begins 45 days prior to","page_number":89,"box":{"x":116,"y":738,"width":727,"height":12}},{"id":"058253df-3ee3-4b1f-9449-2ca46369badd","block_type":"box","text":"ex-dividend date (or 91-day minimum holding period during the 180-day period beginning 90 days prior","page_number":89,"box":{"x":116,"y":754,"width":764,"height":12}},{"id":"25cd548a-dfad-424e-bdde-d79049de0111","block_type":"box","text":"to ex-dividend date for certain preference dividends) during which risk of loss may not be diminished is","page_number":89,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"dadd99aa-800a-40a1-9a04-96f4616e54dd","block_type":"box","text":"required for the applicable shares, at both the Fund and shareholder level, for a dividend to be eligible","page_number":89,"box":{"x":117,"y":785,"width":755,"height":12}},{"id":"3ce37a69-0e0e-45cb-83e8-d589fcdda6b9","block_type":"box","text":"for the dividends received deduction. Dividends received by the Fund from a REIT are not eligible for","page_number":89,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"1c3f748c-7c2b-4f2b-a65f-c5f408768978","block_type":"box","text":"the dividends received deduction. In addition, dividends received by the Fund from another RIC may","page_number":89,"box":{"x":116,"y":816,"width":744,"height":12}},{"id":"a742f029-6a84-4a14-8790-f5770c29348b","block_type":"box","text":"be eligible for such deduction only to the extent the dividends received from such RIC would","page_number":89,"box":{"x":117,"y":831,"width":687,"height":12}},{"id":"845c8964-d7a2-4869-800d-c52830d4a643","block_type":"box","text":"themselves qualify for the dividends received deduction.","page_number":89,"box":{"x":116,"y":847,"width":422,"height":12}},{"id":"877bb04f-8b70-4f5f-91e7-c5ae501d9b1d","block_type":"box","text":"80","page_number":89,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"be7e5c3d-415f-4ea0-9cfc-7c6861006987","block_type":"box","text":"NM1026U-6004408-89/267","page_number":89,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d952289c-2698-402b-b4fe-07012b8e46d0","block_type":"box","text":"Tax-Exempt Investors and Excess Inclusion Income.","page_number":90,"box":{"x":116,"y":87,"width":423,"height":12}},{"id":"8168b48a-b36a-4ff0-b07e-d0aea42c60fb","block_type":"box","text":"Under current law, the Fund serves to block","page_number":90,"box":{"x":541,"y":87,"width":329,"height":11}},{"id":"59bce7b9-fe3e-4195-be6b-3a5ca67fa457","block_type":"box","text":"unrelated business taxable income (“UBTI”) from being realized by its tax-exempt shareholders. UBTI","page_number":90,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"bf85bba5-3e2f-4e3c-ba70-2c7c0d60d017","block_type":"box","text":"includes unrelated debt-financed income, which generally consists of income and gains derived by a","page_number":90,"box":{"x":117,"y":118,"width":748,"height":12}},{"id":"5b63784e-cfe4-41db-bf02-9d471cbf95af","block_type":"box","text":"tax-exempt investor from the disposition of property that has been acquired with borrowed money. A","page_number":90,"box":{"x":116,"y":134,"width":748,"height":12}},{"id":"c568bbfa-947a-4092-9b9a-fcd41c260e86","block_type":"box","text":"tax-exempt shareholder could realize UBTI by virtue of its investment in the Fund if the shareholder","page_number":90,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"e3f2d5a3-b555-4bbc-9e05-5b8d1a215520","block_type":"box","text":"borrows money to acquire its shares fund.","page_number":90,"box":{"x":117,"y":165,"width":316,"height":12}},{"id":"4dd957d6-16ba-4592-9719-a7c25f9a485f","block_type":"box","text":"Certain types of income received by the Fund from REITs, real estate mortgage investment conduits,","page_number":90,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"f2142b03-f4f6-4261-a290-468556b5f8d3","block_type":"box","text":"taxable mortgage pools or other investments may cause the Fund to report some or all of its","page_number":90,"box":{"x":116,"y":211,"width":689,"height":12}},{"id":"5e1f0a99-ebf5-4aa0-a895-66a54ebd41aa","block_type":"box","text":"distributions as “excess inclusion income.” To Fund shareholders, such excess inclusion income may:","page_number":90,"box":{"x":116,"y":227,"width":760,"height":12}},{"id":"f099e91e-d4dc-4973-9739-73f472b0a5ed","block_type":"box","text":"(i) constitute taxable income, as UBTI for those shareholders who would otherwise be tax-exempt such","page_number":90,"box":{"x":117,"y":242,"width":768,"height":12}},{"id":"6ee41b8e-73a3-454d-aec9-581f0e6616d6","block_type":"box","text":"as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable","page_number":90,"box":{"x":116,"y":258,"width":760,"height":12}},{"id":"3c25839f-cc71-40bc-9120-feb9c5deafb0","block_type":"box","text":"entities; (ii) not be offset by otherwise allowable deductions for tax purposes; (iii) not be eligible for","page_number":90,"box":{"x":116,"y":273,"width":733,"height":12}},{"id":"1eeb3db1-3fea-41cf-b21a-4f4e1bf96de5","block_type":"box","text":"reduced U.S. withholding for non-U.S. shareholders even from tax treaty countries; and (iv) cause the","page_number":90,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"de032e51-cd10-4fb4-b944-356b9bec65ab","block_type":"box","text":"Fund to be subject to tax if certain “disqualified organizations,” as defined by the Internal Revenue","page_number":90,"box":{"x":117,"y":304,"width":731,"height":12}},{"id":"29830346-dd39-457d-93cc-87c4375ca39b","block_type":"box","text":"Code, are Fund shareholders. If a charitable remainder annuity trust or a charitable remainder unitrust","page_number":90,"box":{"x":117,"y":320,"width":761,"height":12}},{"id":"501ec84d-f296-4a8e-bd97-5ba951c83e55","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":90,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"cd1136e3-a482-4eac-acbd-4e8b7ab920d2","block_type":"box","text":"excise tax on the UBTI is imposed on the trust.","page_number":90,"box":{"x":116,"y":351,"width":352,"height":12}},{"id":"a02632bb-4c57-4d36-8125-4b3beb9ec1ce","block_type":"box","text":"The Fund tries to avoid investing in REITs that are expected to generate excess inclusion income, but","page_number":90,"box":{"x":116,"y":382,"width":760,"height":12}},{"id":"8691d0ec-8742-496f-8470-2e177cc4a263","block_type":"box","text":"the Fund may not always be successful in doing so. Because information about a REIT’s investments","page_number":90,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"165ecb35-63c7-4231-b2a6-8dbb6b397ce5","block_type":"box","text":"may be inadequate or inaccurate, or because a REIT may change its investment program, the Fund","page_number":90,"box":{"x":117,"y":413,"width":746,"height":12}},{"id":"08c28759-7b27-4e01-995b-ad5b34b0134a","block_type":"box","text":"may not be successful in avoiding the consequences described above. Avoidance of investments in","page_number":90,"box":{"x":117,"y":428,"width":743,"height":12}},{"id":"e713e1be-c3f0-4e6c-b103-2bd5f88d3291","block_type":"box","text":"REITs that generate excess inclusion income may require the Fund to forego otherwise attractive","page_number":90,"box":{"x":117,"y":444,"width":726,"height":12}},{"id":"424b6d6e-ac05-4a45-b2bf-91d1835fb587","block_type":"box","text":"investment opportunities.","page_number":90,"box":{"x":117,"y":459,"width":191,"height":12}},{"id":"7c873bc5-5258-4b84-ba24-7b53a3ab1640","block_type":"box","text":"Non-U.S. Investments.","page_number":90,"box":{"x":117,"y":490,"width":179,"height":10}},{"id":"28b9f240-3a50-4479-aa53-5b4dbe2959f2","block_type":"box","text":"Under Section 988 of the Internal Revenue Code, gains or losses attributable to","page_number":90,"box":{"x":297,"y":490,"width":582,"height":12}},{"id":"eed0aea1-a272-4856-b144-966b158664fa","block_type":"box","text":"fluctuations in exchange rates between the time the","page_number":90,"box":{"x":116,"y":506,"width":379,"height":12}},{"id":"d07317c1-3e5f-4635-b411-b5c7a73d14c0","block_type":"box","text":"Fund accrues income or receivables or expenses or","page_number":90,"box":{"x":497,"y":506,"width":381,"height":12}},{"id":"c9598a38-2365-4bc2-945b-8a55e008aea4","block_type":"box","text":"other liabilities denominated in a non-","page_number":90,"box":{"x":116,"y":521,"width":271,"height":10}},{"id":"cd59c5a9-71ea-45c9-a2a4-fd378fb42614","block_type":"box","text":"U.S. currency and the time the Fund actually collects such income","page_number":90,"box":{"x":389,"y":521,"width":485,"height":12}},{"id":"ee1da1d5-8a32-498b-8597-bb7adfb3db16","block_type":"box","text":"or pays such liabilities are generally treated as ordi","page_number":90,"box":{"x":116,"y":537,"width":368,"height":12}},{"id":"75db5586-226c-4bc9-870c-928a4163cc44","block_type":"box","text":"nary income or ordinary loss. In general, gains (and","page_number":90,"box":{"x":486,"y":537,"width":378,"height":12}},{"id":"d5f43f74-9f05-48d7-8ac5-d984e9fcdbc1","block_type":"box","text":"losses) realized on debt instruments will be treated as Se","page_number":90,"box":{"x":117,"y":552,"width":414,"height":12}},{"id":"18c603c5-6b0c-4013-a5df-4bc18f3bdeaf","block_type":"box","text":"ction 988 gain (or loss) to the extent attributable","page_number":90,"box":{"x":532,"y":552,"width":351,"height":12}},{"id":"ab99df09-4a1d-467e-88d8-3053a6c9e8ea","block_type":"box","text":"to changes in exchange rates between the U.S. dollar","page_number":90,"box":{"x":116,"y":568,"width":395,"height":12}},{"id":"b0e077a7-a1a5-4da5-ba80-206059ba9dc9","block_type":"box","text":"and the currencies in which the instruments are","page_number":90,"box":{"x":512,"y":568,"width":348,"height":9}},{"id":"8906cdb2-b56e-45cf-bc20-bf82681e9f3c","block_type":"box","text":"denominated. Similarly, gains or losses on non-U.S.","page_number":90,"box":{"x":116,"y":583,"width":382,"height":12}},{"id":"2b4b52a8-cc0b-4d36-998e-3fa0e810b935","block_type":"box","text":"currency, non-U.S. currency forward contracts and","page_number":90,"box":{"x":499,"y":583,"width":372,"height":12}},{"id":"d522e7fb-1a0a-41f3-a0c4-7abf1e014438","block_type":"box","text":"certain non-U.S. currency options or futures contra","page_number":90,"box":{"x":116,"y":599,"width":368,"height":12}},{"id":"8e05eb00-a0ed-4eec-8904-dd02050d2445","block_type":"box","text":"cts denominated in non-U.S. cu","page_number":90,"box":{"x":485,"y":599,"width":228,"height":9}},{"id":"8bbc4cb9-0792-4d21-aa8e-5e50ee561a1f","block_type":"box","text":"rrency, to the extent","page_number":90,"box":{"x":715,"y":599,"width":149,"height":12}},{"id":"d7bb17d2-d3f2-4af3-b4a0-a755daff4fba","block_type":"box","text":"attributable to fluctuations in exchange rates betw","page_number":90,"box":{"x":116,"y":614,"width":361,"height":12}},{"id":"f19a2d09-4f8b-4ae8-892f-942c214e3a9e","block_type":"box","text":"een the acquisition and disposition dates, are also","page_number":90,"box":{"x":477,"y":614,"width":368,"height":12}},{"id":"88809d85-3e4f-4759-9aa0-9aa70edb3061","block_type":"box","text":"treated as ordinary income or loss unless the Fund were to elect otherwise.","page_number":90,"box":{"x":116,"y":630,"width":552,"height":12}},{"id":"e8461db9-20e0-44c2-b91d-d3750954ed49","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":90,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"a943aaa7-1210-4564-88cf-afa88a4cc3b9","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":90,"box":{"x":116,"y":676,"width":736,"height":12}},{"id":"0edf36fd-c0bc-447d-b0be-76a4f72ed8b7","block_type":"box","text":"Fund provided that the Fund held the security on the dividend settlement date and for at least 15","page_number":90,"box":{"x":117,"y":692,"width":715,"height":12}},{"id":"7fa43ad0-d3b7-4b70-861f-c79516413989","block_type":"box","text":"additional days immediately before and/or thereafter, with the result that each investor with respect to","page_number":90,"box":{"x":116,"y":707,"width":752,"height":12}},{"id":"c9e837ef-340f-44c9-9ae2-824b6d9da269","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":90,"box":{"x":116,"y":723,"width":735,"height":12}},{"id":"a26ea6fa-6a70-461c-96d3-f976d9f55c5f","block_type":"box","text":"(i) include in gross income, even though not actually received, the investor’s pro rata share of the","page_number":90,"box":{"x":117,"y":738,"width":719,"height":12}},{"id":"d3fd5fe5-c32e-4f96-b6c4-b044e5964e58","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":90,"box":{"x":117,"y":754,"width":743,"height":12}},{"id":"5dfd04aa-2c9b-41c6-8c83-7f2d4356d84b","block_type":"box","text":"investors who itemize their deductions on their personal tax returns) or credit (in calculating U.S.","page_number":90,"box":{"x":117,"y":769,"width":712,"height":12}},{"id":"c25005b8-8ca4-4fb6-9927-c68c68a46c94","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":90,"box":{"x":116,"y":785,"width":730,"height":12}},{"id":"327118e5-775b-419b-a02b-f26b42b6f736","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":90,"box":{"x":116,"y":800,"width":764,"height":12}},{"id":"dadc81aa-73f9-47fb-bcea-353e201615a3","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":90,"box":{"x":116,"y":816,"width":756,"height":12}},{"id":"c4058081-3351-4227-bf92-03dc8e176fc1","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":90,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"8e96eb26-17f1-4c95-9b66-19119672b415","block_type":"box","text":"the Fund elects to “pass through” its non-U.S. taxes may be treated as receiving additional dividend","page_number":90,"box":{"x":116,"y":847,"width":745,"height":12}},{"id":"aac49002-c10d-40e7-9f1a-7f9e17cd36c5","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":90,"box":{"x":117,"y":862,"width":717,"height":12}},{"id":"f80c068a-0b36-45ab-9844-072013a2658b","block_type":"box","text":"federal income tax otherwise payable with respect to the investor’s non-U.S. source income. For this","page_number":90,"box":{"x":116,"y":878,"width":750,"height":12}},{"id":"a9320c37-f4b8-48a6-bc41-60dc00196100","block_type":"box","text":"81","page_number":90,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"38d14330-dd11-4f23-99ad-a873177173c3","block_type":"box","text":"NM1026U-6004408-90/267","page_number":90,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"237f1c76-f576-4d36-84fc-88c5ddeaa7af","block_type":"box","text":"purpose, shareholders must treat as non-U.S. source gross income (i) their proportionate shares of","page_number":91,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"3b055880-9a2f-4277-abe1-566ab68999f4","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":91,"box":{"x":117,"y":102,"width":750,"height":13}},{"id":"a4c9f99a-9a32-40ef-8ac9-d2aada531227","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":91,"box":{"x":117,"y":118,"width":736,"height":12}},{"id":"f2c8bafb-fa1b-44dd-92d8-7097a6b26bfe","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":91,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"da6e3ca6-d960-4123-909d-15db1400b3e8","block_type":"box","text":"tax credit may be claimed. If your Fund shares are loaned pursuant to securities lending arrangements,","page_number":91,"box":{"x":116,"y":149,"width":771,"height":12}},{"id":"f483ba88-54b8-442d-b009-99cbf9a49785","block_type":"box","text":"you may lose the ability to use any non-U.S. tax credits passed through by the","page_number":91,"box":{"x":116,"y":165,"width":580,"height":12}},{"id":"4e05af6d-c97b-410f-8a40-cf70ab6c0a37","block_type":"box","text":"Fund or to treat Fund","page_number":91,"box":{"x":703,"y":165,"width":162,"height":9}},{"id":"65baf09a-a9cc-4239-9ee4-20ee8924f47e","block_type":"box","text":"dividends (paid while the shares are held by the borrower) as qualified dividends. Regarding a short","page_number":91,"box":{"x":116,"y":180,"width":745,"height":12}},{"id":"275bc205-4c8d-45a8-9ab6-0c4fc8c1de2b","block_type":"box","text":"sale with respect to shares of the Fund, substitute payments made to the lender of such shares may","page_number":91,"box":{"x":116,"y":196,"width":749,"height":12}},{"id":"09cf43da-a759-4f21-ac65-911ace39c9b1","block_type":"box","text":"not be deductible under certain circumstances. Consult your financial intermediary or tax advisor.","page_number":91,"box":{"x":117,"y":211,"width":725,"height":12}},{"id":"36a86db3-c8bb-4f33-b7ac-96817bd8b18d","block_type":"box","text":"The Fund may file refund claims in various countries to recover taxes withheld on dividend income.","page_number":91,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"4001a68f-725b-48ce-95d9-6c10bec6b8df","block_type":"box","text":"Whether or when the Fund will receive a tax refund is within the control of the individual country.","page_number":91,"box":{"x":116,"y":258,"width":718,"height":12}},{"id":"340eadd6-2135-4cce-b228-7de128246487","block_type":"box","text":"Pending confirmatory guidance from the IRS, the refunds received may reduce the Fund’s pass","page_number":91,"box":{"x":117,"y":273,"width":713,"height":12}},{"id":"ff3797cc-c37c-495a-a92e-c5027b189ec2","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":91,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"6d532d9f-bc35-48cd-a5ea-8250ef9541d4","block_type":"box","text":"an IRS compliance fee to cover the effect of the tax credits previously passed through to shareholders","page_number":91,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"3d1e5486-afc6-4951-bdd1-7ed355d39eb0","block_type":"box","text":"on refunded foreign taxes.","page_number":91,"box":{"x":116,"y":320,"width":200,"height":12}},{"id":"576d2777-ecf2-40c6-a592-ec4b35b86773","block_type":"box","text":"Passive Foreign Investment Companies.","page_number":91,"box":{"x":117,"y":351,"width":326,"height":12}},{"id":"41fec87b-bc23-4674-a423-d7081cb3ec21","block_type":"box","text":"If the Fund purchases shares in PFICs, it may be subject","page_number":91,"box":{"x":445,"y":351,"width":426,"height":12}},{"id":"562da38f-6de0-4021-9871-30c3080eb8e1","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":91,"box":{"x":116,"y":366,"width":763,"height":12}},{"id":"bd476fe6-a2e4-4036-9105-2b483227c510","block_type":"box","text":"shares even if such income is distributed as a taxable dividend by the Fund to its shareholders.","page_number":91,"box":{"x":116,"y":382,"width":711,"height":12}},{"id":"20faecf3-0158-4682-b06a-6a4712320d39","block_type":"box","text":"Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes","page_number":91,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"52f9eb26-5476-44a0-b70c-375afedc4c4d","block_type":"box","text":"arising from such distributions or gains.","page_number":91,"box":{"x":116,"y":413,"width":296,"height":12}},{"id":"fcd95d79-3792-430f-bda4-9834a0bc9df9","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":91,"box":{"x":117,"y":444,"width":760,"height":12}},{"id":"cf26fe3c-cf3c-4f85-874e-326601186102","block_type":"box","text":"Internal Revenue Code, in lieu of the foregoing requirements, the Fund would be required to include in","page_number":91,"box":{"x":117,"y":459,"width":763,"height":12}},{"id":"0cdc1456-135a-43c1-b6b2-8ab67830794c","block_type":"box","text":"income each year a portion of the ordinary earnings and net capital gains of the qualified electing fund,","page_number":91,"box":{"x":117,"y":475,"width":766,"height":12}},{"id":"773f4699-44a4-4643-a5bc-0733053657b8","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":91,"box":{"x":116,"y":490,"width":729,"height":12}},{"id":"93eefd15-87c2-4db1-8284-428de0dcdb99","block_type":"box","text":"distribution requirements described above. In order to make this election, the Fund would be required","page_number":91,"box":{"x":116,"y":506,"width":757,"height":12}},{"id":"752a59e1-3848-42c0-8fb2-a514b20e6b51","block_type":"box","text":"to obtain certain annual information from the PFICs in which it invests, which may be difficult or","page_number":91,"box":{"x":116,"y":521,"width":710,"height":12}},{"id":"b9e32cf8-f976-4f0a-b6fa-1b28d90f1bc1","block_type":"box","text":"impossible to obtain.","page_number":91,"box":{"x":117,"y":537,"width":157,"height":12}},{"id":"e2be297e-3775-4dcb-bdd8-2323ffc20bba","block_type":"box","text":"Alternatively, the Fund may make a mark-to-market election that would result in the Fund being treated","page_number":91,"box":{"x":116,"y":568,"width":769,"height":12}},{"id":"7fb096ce-904c-4e07-938f-0f99ed1265f0","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":91,"box":{"x":116,"y":583,"width":762,"height":12}},{"id":"54e9834c-0f3a-4032-a4d2-8b3735e358ac","block_type":"box","text":"report any such gains as ordinary income and would deduct any such losses as ordinary losses to the","page_number":91,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"5ebb53c5-4ad0-4800-bc91-bc9f5c6e9375","block_type":"box","text":"extent of previously recognized gains. The election must be made separately for each PFIC owned by","page_number":91,"box":{"x":116,"y":614,"width":761,"height":12}},{"id":"ac2c1d57-212a-4698-9aff-cf33fccfbe9a","block_type":"box","text":"the Fund and, once made, would be effective for all subsequent taxable years, unless revoked with the","page_number":91,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"1a93bb0c-6a8a-4d16-82f1-e67eb6a2d3bc","block_type":"box","text":"consent of the IRS. By making the election, the Fund could potentially ameliorate the adverse tax","page_number":91,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"8d0b92f3-ba37-44a5-ba2b-c096a5340f80","block_type":"box","text":"consequences with respect to its ownership of shares in a PFIC, but in any particular year may be","page_number":91,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"4bfcceec-87ca-4850-a191-d9f1dbb82d38","block_type":"box","text":"required to recognize income in excess of the distributions it receives from PFICs and its proceeds","page_number":91,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"903cc4fc-f1f4-4a6d-9a5f-6cee15bd1f5e","block_type":"box","text":"from dispositions of PFIC stock. The Fund may have to distribute this “phantom” income and gain to","page_number":91,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"bf790fa9-a272-4136-aaf9-76bf965ddd02","block_type":"box","text":"satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax.","page_number":91,"box":{"x":116,"y":707,"width":630,"height":12}},{"id":"e59827cb-e52b-481e-8184-19e15e2f938c","block_type":"box","text":"The Fund will make the appropriate tax elections, if possible, and take any additional steps that are","page_number":91,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"4f9ca259-5656-4bed-9b1e-6682787a2d77","block_type":"box","text":"necessary to mitigate the effects of these rules.","page_number":91,"box":{"x":117,"y":754,"width":349,"height":12}},{"id":"e5922f8f-f107-4f96-b33d-fe58a2f4620f","block_type":"box","text":"Reporting.","page_number":91,"box":{"x":117,"y":785,"width":82,"height":12}},{"id":"49353a97-fedb-4332-af70-dbd84e933211","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":91,"box":{"x":206,"y":784,"width":672,"height":13}},{"id":"c0ed7f56-3dfe-4620-9221-d8ea779e06d0","block_type":"box","text":"any single taxable year or $4 million in any combination of taxable years for an individual shareholder","page_number":91,"box":{"x":116,"y":799,"width":752,"height":13}},{"id":"bf41d4fc-38d6-4a0b-89c8-e6e631a8c508","block_type":"box","text":"or $10 million in any single taxable year or $20 million in any combination of taxable years for a","page_number":91,"box":{"x":116,"y":815,"width":705,"height":13}},{"id":"6c236161-6f41-4ac9-8c20-1eb395f4d56b","block_type":"box","text":"corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form","page_number":91,"box":{"x":116,"y":831,"width":731,"height":12}},{"id":"3becd4a6-2271-4933-a867-7d009424f3e2","block_type":"box","text":"8886. Direct shareholders of portfolio securities are in many cases exempted from this reporting","page_number":91,"box":{"x":116,"y":847,"width":717,"height":12}},{"id":"7e1eceba-8e5d-4f82-a88b-488b2a104bff","block_type":"box","text":"requirement, but under current guidance, shareholders of a RIC are not exempted. The fact that a loss","page_number":91,"box":{"x":117,"y":862,"width":764,"height":12}},{"id":"47df73e5-6094-4593-95ea-63871fde894c","block_type":"box","text":"is reportable under these regulations does not affect the legal determination of whether the taxpayer’s","page_number":91,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"0e8d1d23-87ae-4f95-9505-19a4d6a68e66","block_type":"box","text":"82","page_number":91,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"bf179ec6-ed81-4480-b8e4-8a5cd1d18b45","block_type":"box","text":"NM1026U-6004408-91/267","page_number":91,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"28495f19-e130-4191-a58a-8241d5554be7","block_type":"box","text":"treatment of the loss is proper. Shareholders should consult their tax advisors to determine the","page_number":92,"box":{"x":116,"y":87,"width":707,"height":12}},{"id":"c3323c80-7902-4c1d-a8fc-2f327b2d9dba","block_type":"box","text":"applicability of these regulations in light of their individual circumstances.","page_number":92,"box":{"x":116,"y":102,"width":544,"height":13}},{"id":"d678fac8-0321-4c1c-8bf2-376c7a6efa58","block_type":"box","text":"Other Taxes.","page_number":92,"box":{"x":116,"y":134,"width":106,"height":9}},{"id":"c038e710-4bad-447e-a8ba-c110df3fdd29","block_type":"box","text":"Dividends, distributions and redemption proceeds may also be subject to additional","page_number":92,"box":{"x":224,"y":134,"width":621,"height":12}},{"id":"ff50a52d-5b54-489a-8ec9-7de4b1986462","block_type":"box","text":"state, local and non-U.S. taxes depending on each shareholder’s particular situation.","page_number":92,"box":{"x":116,"y":149,"width":633,"height":12}},{"id":"0be36773-d2cd-4931-b5b6-db4fd7b94e6e","block_type":"box","text":"Taxation of Non-U.S. Shareholders.","page_number":92,"box":{"x":116,"y":180,"width":287,"height":10}},{"id":"d2b84fb2-5598-43a5-b97b-0b4e7f311db5","block_type":"box","text":"Dividends paid by the Fund to non-U.S. shareholders (other","page_number":92,"box":{"x":404,"y":180,"width":448,"height":12}},{"id":"99d2aeee-ad2a-4fe3-9ca0-585c7832b802","block_type":"box","text":"than a pass-through entity to the extent owned by U.S. persons) are generally subject to withholding","page_number":92,"box":{"x":116,"y":196,"width":748,"height":12}},{"id":"646ec6ac-5ff2-4744-850b-7488c5ff0346","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":92,"box":{"x":116,"y":211,"width":752,"height":12}},{"id":"8d9709a5-33f7-4255-aa92-fad43e0cbd1f","block_type":"box","text":"from investment income and short-term capital gains. Dividends paid by the Fund from net tax-exempt","page_number":92,"box":{"x":116,"y":227,"width":763,"height":12}},{"id":"6f6cd4a3-8597-4746-ba44-b6fd6f9fee33","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":92,"box":{"x":117,"y":242,"width":765,"height":12}},{"id":"e9bbe32f-dc5d-474c-b42e-f24ddd026fd2","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":92,"box":{"x":117,"y":258,"width":756,"height":12}},{"id":"59faf07a-ae92-4d16-929e-c3bbdd613525","block_type":"box","text":"or IRS Form W-8BEN-E certifying its entitlement to benefits under a treaty. The withholding tax does","page_number":92,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"58b9679f-1d2a-4aba-8b25-9b428cc88adb","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":92,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"97f0ecba-7915-4ffb-97a8-b6badac92151","block_type":"box","text":"certifying that the dividends are effectively connected with the non-U.S. shareholder’s conduct of a","page_number":92,"box":{"x":116,"y":304,"width":735,"height":12}},{"id":"b2e6764e-f44a-4630-937c-02e75125f20d","block_type":"box","text":"trade or business within the U.S. Instead, the effectively connected dividends will be subject to regular","page_number":92,"box":{"x":116,"y":320,"width":762,"height":12}},{"id":"83dfa75c-a7f1-4a36-94b4-a5a84edf145b","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":92,"box":{"x":117,"y":335,"width":717,"height":12}},{"id":"0861d208-8b4a-45cd-afd2-a8b1023bb61d","block_type":"box","text":"receiving effectively connected dividends may also be subject to additional “branch profits tax” imposed","page_number":92,"box":{"x":117,"y":351,"width":771,"height":12}},{"id":"0fb31cc5-10a6-466a-bc29-0df44c2e0df6","block_type":"box","text":"at a rate of 30% (or lower treaty rate). A","page_number":92,"box":{"x":116,"y":366,"width":300,"height":12}},{"id":"acbf00f5-49d3-42c9-a6cd-3333689cb976","block_type":"box","text":"non-U.S. shareholder who fails to provide an IRS Form","page_number":92,"box":{"x":418,"y":366,"width":412,"height":12}},{"id":"2be20d40-7cf9-49df-b130-34e7c680612d","block_type":"box","text":"W-8BEN, IRS Form W-8BEN-E or other applicable form may be subject to backup withholding at the","page_number":92,"box":{"x":116,"y":382,"width":751,"height":12}},{"id":"a57fd24e-1314-4184-b5d5-5aebee60d2f6","block_type":"box","text":"appropriate rate.","page_number":92,"box":{"x":116,"y":397,"width":128,"height":12}},{"id":"cbc6e040-58ae-4ac7-af41-b6711fec58fb","block_type":"box","text":"Except as discussed below, properly-reported dividends are generally exempt from U.S. federal","page_number":92,"box":{"x":117,"y":428,"width":713,"height":12}},{"id":"4fc815b0-79d1-485d-8ac0-1efa0545aac7","block_type":"box","text":"withholding tax where they (i) are paid in respect of the Fund’s “qualified net interest income”","page_number":92,"box":{"x":116,"y":444,"width":693,"height":12}},{"id":"25933f11-9977-4450-b2f9-3dc300241e3e","block_type":"box","text":"(generally, the Fund’s U.S. source interest income, other than certain contingent interest and interest","page_number":92,"box":{"x":117,"y":459,"width":752,"height":12}},{"id":"dd4ad538-a1d0-4e75-b5a2-a8bf80c27ed5","block_type":"box","text":"from obligations of a corporation or partnership in which the Fund is at least a 10% shareholder or","page_number":92,"box":{"x":116,"y":475,"width":731,"height":12}},{"id":"8eebee0d-d07a-485c-a61f-d7202fb54854","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":92,"box":{"x":117,"y":490,"width":756,"height":12}},{"id":"03099486-0231-4ec4-81aa-46fd8f226949","block_type":"box","text":"“qualified short-term capital gains” (generally, the excess of the Fund’s net short-term capital gain over","page_number":92,"box":{"x":116,"y":506,"width":765,"height":12}},{"id":"c89a75d5-5794-4b81-81c8-5a55f676872b","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":92,"box":{"x":116,"y":521,"width":765,"height":12}},{"id":"555aa511-3141-47c6-b9c0-a146c29a914c","block_type":"box","text":"income earned on municipal and other tax-exempt securities. However, depending on its","page_number":92,"box":{"x":117,"y":537,"width":662,"height":12}},{"id":"1f9e0676-2c67-490d-8c60-86f634f21a93","block_type":"box","text":"circumstances, the Fund may report all, some or none of its potentially eligible dividends as interest","page_number":92,"box":{"x":116,"y":552,"width":743,"height":12}},{"id":"6da0c0b5-5217-4b3e-bf9a-e9b057f5f673","block_type":"box","text":"related dividends, short-term capital gains dividends or exempt-interest dividends and/or treat such","page_number":92,"box":{"x":117,"y":568,"width":738,"height":12}},{"id":"5077a591-dfa7-445c-8e8b-53105378d379","block_type":"box","text":"dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for","page_number":92,"box":{"x":116,"y":583,"width":743,"height":12}},{"id":"448eb9ae-8cbe-4546-b71d-d3ac3386e30b","block_type":"box","text":"this exemption from withholding, a non-U.S. shareholder will need to comply with applicable","page_number":92,"box":{"x":116,"y":599,"width":685,"height":12}},{"id":"eaa468a9-1b3b-4f62-83da-d1bdf682eff3","block_type":"box","text":"certification requirements relating to its non-U.S. status (including, in general, furnishing an IRS Form","page_number":92,"box":{"x":116,"y":614,"width":756,"height":12}},{"id":"ca08fc30-37f8-4f7d-ba30-ead9aed2e916","block_type":"box","text":"W-8BEN, IRS Form W-8BEN-E or substitute Form). In the case of shares held through an","page_number":92,"box":{"x":116,"y":630,"width":672,"height":12}},{"id":"6a972de4-73b6-424f-8a6b-19c9fae5f584","block_type":"box","text":"intermediary, the intermediary may withhold even if the Fund reports the payment as qualified net","page_number":92,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"139bef17-fc85-4b70-ba68-0e0df1dfcfd0","block_type":"box","text":"interest income or qualified short-term capital gain. Non-U.S. shareholders should contact their","page_number":92,"box":{"x":117,"y":661,"width":702,"height":12}},{"id":"76d5d0bb-23d1-4f9f-a774-a694a7e2122f","block_type":"box","text":"intermediaries with respect to the application of these rules to their accounts.","page_number":92,"box":{"x":117,"y":676,"width":568,"height":12}},{"id":"55577c58-e2f5-43fd-8523-11e4feac10d6","block_type":"box","text":"Special rules may apply to a foreign shareholder receiving a Fund distribution if at least 50% of the","page_number":92,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"889504d5-75be-4d8f-9905-91f89e6e96d7","block_type":"box","text":"Fund’s assets consist of U.S. real property interests, including certain REITs and U.S. real property","page_number":92,"box":{"x":117,"y":723,"width":735,"height":12}},{"id":"c442a0bc-0395-4892-901c-581407271e72","block_type":"box","text":"holding corporations (as defined in the Internal Revenue Code and Treasury regulations). Fund","page_number":92,"box":{"x":117,"y":738,"width":705,"height":12}},{"id":"80e4dc2d-2e59-4cd2-9d27-e2004c6eec9a","block_type":"box","text":"distributions that are attributable to gain from the disposition of a U.S. real property interest will be","page_number":92,"box":{"x":116,"y":754,"width":725,"height":12}},{"id":"63719b98-7410-47da-9b80-2c394e3f247a","block_type":"box","text":"taxable as ordinary dividends and subject to withholding at a 30% or lower treaty rate if the foreign","page_number":92,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"1bf660c8-f52a-49ff-9e43-36458bb54da4","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":92,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"1f88e5c5-70c6-4b97-8746-d248b1046469","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":92,"box":{"x":116,"y":800,"width":746,"height":12}},{"id":"56bf978b-0b47-4ef7-8766-e77421a1795c","block_type":"box","text":"time during the one-year testing period, the distribution would be treated as income effectively","page_number":92,"box":{"x":116,"y":816,"width":697,"height":12}},{"id":"23b1784b-a7c9-40b3-aeed-2afbfc6b482d","block_type":"box","text":"connected with a trade or business within the U.S. and the foreign shareholder would be subject to","page_number":92,"box":{"x":116,"y":831,"width":737,"height":12}},{"id":"a8e252c3-1831-4840-a570-4bbe1a5be2ac","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":92,"box":{"x":116,"y":847,"width":722,"height":12}},{"id":"c402bc80-5e9d-431a-940d-c2f854801a17","block_type":"box","text":"return.","page_number":92,"box":{"x":117,"y":863,"width":52,"height":9}},{"id":"7938a5e4-de2e-417c-a7da-83661ce37ef8","block_type":"box","text":"83","page_number":92,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"fa7e922a-e42a-4fcb-954c-65566f6f9d10","block_type":"box","text":"NM1026U-6004408-92/267","page_number":92,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"339b405d-de4e-4c6b-92cb-f89c855568cd","block_type":"box","text":"Similar consequences would generally apply to a foreign shareholder’s gain on the sale of Fund shares","page_number":93,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"c93f83eb-67f2-4fb8-851a-7143d0ab59aa","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":93,"box":{"x":117,"y":102,"width":692,"height":13}},{"id":"6642208a-6cd9-4a42-ba6e-eea8f88f2e61","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":93,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"38f63bab-d23e-491f-aa9b-26c32bac0385","block_type":"box","text":"shareholders) or the foreign shareholder owns no more than 5% of the Fund’s shares at all times","page_number":93,"box":{"x":116,"y":134,"width":724,"height":12}},{"id":"88b42b1f-70d0-4b3a-b90c-1899584beeb4","block_type":"box","text":"during the five-year period ending on the date of sale. Finally, a domestically controlled Fund may be","page_number":93,"box":{"x":116,"y":149,"width":753,"height":12}},{"id":"549dbf89-5629-4378-a7cf-37f5bda96984","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":93,"box":{"x":117,"y":165,"width":711,"height":12}},{"id":"e104f804-1b2b-4a93-96d3-0ec5d1b70ea1","block_type":"box","text":"interests. Shareholders that are nonresident aliens or foreign entities are urged to consult their own tax","page_number":93,"box":{"x":117,"y":180,"width":767,"height":12}},{"id":"a3a2ea8c-a28e-49f7-a537-196b99c8667e","block_type":"box","text":"advisors concerning the particular tax consequences to them of an investment in the Fund.","page_number":93,"box":{"x":116,"y":196,"width":679,"height":12}},{"id":"7be1aa8b-cc50-49ff-bca3-897ef444c8f3","block_type":"box","text":"A foreign shareholder may also be subject to certain “wash sale” rules to prevent the avoidance of the","page_number":93,"box":{"x":116,"y":224,"width":772,"height":13}},{"id":"922ac5d8-70ef-400c-82db-769a49c04d00","block_type":"box","text":"tax filing and payment obligations discussed above through the sale and repurchase of Fund shares.","page_number":93,"box":{"x":116,"y":240,"width":752,"height":12}},{"id":"7d1218c7-2646-45bf-a8b4-13bc6aaba2c4","block_type":"box","text":"Separately, a 30% withholding tax is currently imposed on U.S.-source dividends, interest and other","page_number":93,"box":{"x":116,"y":269,"width":745,"height":12}},{"id":"de7510f1-dd9d-481b-99bd-dd98515bfd60","block_type":"box","text":"income items paid to: (i) foreign financial institutions, including non-U.S. investment funds; and","page_number":93,"box":{"x":117,"y":284,"width":705,"height":13}},{"id":"bf747de9-7f85-4dea-9dcf-ad5037ff7d53","block_type":"box","text":"(ii) certain other foreign entities. To avoid withholding, foreign financial institutions will need to: (i) enter","page_number":93,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"be19c5d5-264e-473a-80f8-083eb07f08b3","block_type":"box","text":"into agreements with the IRS that state that they will provide the IRS information, including the names,","page_number":93,"box":{"x":117,"y":315,"width":763,"height":13}},{"id":"b35f5bb1-7afc-4a98-ab28-977f28ae0b35","block_type":"box","text":"addresses and taxpayer identification numbers of direct and indirect U.S. account holders; comply with","page_number":93,"box":{"x":116,"y":331,"width":767,"height":12}},{"id":"0ea56f78-ef07-498b-bf78-fdf87384c80d","block_type":"box","text":"due diligence procedures with respect to the identification of U.S. accounts; report to the IRS certain","page_number":93,"box":{"x":116,"y":346,"width":748,"height":13}},{"id":"b3175cac-7003-4a5b-b55f-df5f85f3a9a2","block_type":"box","text":"information with respect to U.S. accounts maintained; agree to withhold tax on certain payments made","page_number":93,"box":{"x":117,"y":362,"width":764,"height":12}},{"id":"5433ade9-40fc-4512-91a8-c0d275ec872c","block_type":"box","text":"to non-compliant foreign financial institutions or to account holders who fail to provide the required","page_number":93,"box":{"x":116,"y":377,"width":732,"height":13}},{"id":"41f67720-3d0d-4479-ade0-692e620b2297","block_type":"box","text":"information; and determine certain other information concerning their account holders, or (ii) in the","page_number":93,"box":{"x":117,"y":393,"width":731,"height":12}},{"id":"2de18258-be20-4ffc-80b2-a5be15e78684","block_type":"box","text":"event an intergovernmental agreement and implementing legislation are adopted, provide local","page_number":93,"box":{"x":116,"y":409,"width":709,"height":12}},{"id":"b0b8d9e5-3394-4305-b575-f1c255b05770","block_type":"box","text":"revenue authorities with similar account holder information. Other foreign entities may need to report","page_number":93,"box":{"x":117,"y":424,"width":749,"height":12}},{"id":"5b97cf37-7c5d-4e81-9d56-301987207af0","block_type":"box","text":"the name, address, and taxpayer identification number of each substantial U.S. owner or provide","page_number":93,"box":{"x":116,"y":439,"width":723,"height":13}},{"id":"1411f7ee-52b2-49af-bdc8-08178838090e","block_type":"box","text":"certifications of no substantial U.S. ownership unless certain exceptions apply.","page_number":93,"box":{"x":116,"y":455,"width":587,"height":12}},{"id":"482f5b6e-6e97-4f9e-ac98-0d35716abe67","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":93,"box":{"x":116,"y":484,"width":766,"height":12}},{"id":"07c138a0-b581-483e-ac61-bf442b3267b4","block_type":"box","text":"and subject to the U.S. estate tax.","page_number":93,"box":{"x":116,"y":499,"width":257,"height":12}},{"id":"399998b3-1870-4838-bf4b-bafa8a071808","block_type":"box","text":"The foregoing discussion is a summary of certain material U.S. federal income tax considerations only","page_number":93,"box":{"x":116,"y":528,"width":763,"height":12}},{"id":"2d81d69e-ad7a-4e9f-bbc4-da1debb304e2","block_type":"box","text":"and is not intended as a substitute for careful tax planning. Purchasers of shares should consult their","page_number":93,"box":{"x":116,"y":544,"width":753,"height":12}},{"id":"bc990b6e-7987-4df4-b8b7-fdec06bcc78a","block_type":"box","text":"own tax advisors as to the tax consequences of investing in such shares, including consequences","page_number":93,"box":{"x":116,"y":559,"width":731,"height":12}},{"id":"9f4cd4b8-5f95-49eb-868c-64be0785e78d","block_type":"box","text":"under state, local and non-U.S. tax laws. Finally, the foregoing discussion is based on applicable","page_number":93,"box":{"x":117,"y":575,"width":721,"height":12}},{"id":"cf6a7567-a373-466c-8d13-091ae6c21e8d","block_type":"box","text":"provisions of the Internal Revenue Code, regulations, judicial authority and administrative","page_number":93,"box":{"x":117,"y":590,"width":667,"height":12}},{"id":"8741f242-18fd-4f69-baf8-e31dee35d6eb","block_type":"box","text":"interpretations in effect on the date of this SAI. Changes in applicable authority could materially affect","page_number":93,"box":{"x":117,"y":606,"width":756,"height":12}},{"id":"8ed90c52-05e5-4730-bd93-f1492af98a78","block_type":"box","text":"the conclusions discussed above, and such changes often occur.","page_number":93,"box":{"x":116,"y":621,"width":489,"height":12}},{"id":"d66f60c0-9eec-42f8-bc19-da00095f50d6","block_type":"box","text":"Miscellaneous Information","page_number":93,"box":{"x":119,"y":662,"width":477,"height":23}},{"id":"74f48de8-bc84-4a5b-862a-3a2a9c8a80f7","block_type":"box","text":"Counsel.","page_number":93,"box":{"x":116,"y":711,"width":70,"height":9}},{"id":"fa447dd0-7732-404e-8931-5fff36b9eeba","block_type":"box","text":"Ropes & Gray LLP, located at 1211 Avenue of the Americas, New York, New York 10036, is","page_number":93,"box":{"x":193,"y":711,"width":684,"height":12}},{"id":"fd9bbb03-320b-4b70-bede-0cdeebeabbb2","block_type":"box","text":"counsel to the Trust.","page_number":93,"box":{"x":116,"y":727,"width":151,"height":9}},{"id":"770a9169-0202-4239-9783-db4d5b6e89a0","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":93,"box":{"x":117,"y":755,"width":387,"height":12}},{"id":"680f787f-197b-4930-9edc-831c78a4f561","block_type":"box","text":"PricewaterhouseCoopers LLP, located at","page_number":93,"box":{"x":512,"y":755,"width":304,"height":12}},{"id":"3535d5f0-496f-4db6-b648-4413da6e3631","block_type":"box","text":"Two Commerce Square, 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103, serves","page_number":93,"box":{"x":116,"y":771,"width":740,"height":12}},{"id":"0c6737e4-1e00-4bac-89af-f895c409fff9","block_type":"box","text":"as the Trust’s independent registered public accounting firm, audits the Fund’s financial statements,","page_number":93,"box":{"x":116,"y":786,"width":739,"height":12}},{"id":"3eaa3dfe-09a8-4f23-ad4e-6ad3228fafc9","block_type":"box","text":"and may perform other services. Another independent accounting firm served as the Predecessor","page_number":93,"box":{"x":116,"y":802,"width":726,"height":12}},{"id":"01058596-6d31-40b0-a3a7-b608109ea8db","block_type":"box","text":"Fund’s independent registered public accounting firm.","page_number":93,"box":{"x":117,"y":817,"width":396,"height":12}},{"id":"69731dc8-7a28-4dee-b119-434e7a58024e","block_type":"box","text":"Investors’ Rights.","page_number":93,"box":{"x":117,"y":846,"width":139,"height":12}},{"id":"2981668f-acac-40a3-a23c-43d4903b5332","block_type":"box","text":"The Fund relies on the services of BFA and its other service providers, including","page_number":93,"box":{"x":257,"y":846,"width":605,"height":12}},{"id":"3fe9aeaf-8e36-43fe-865e-c3f7f59a7409","block_type":"box","text":"the Distributor, administrator, custodian and transfer agent. Further information about the duties and","page_number":93,"box":{"x":116,"y":862,"width":748,"height":12}},{"id":"20c9b2d5-68bb-4e2e-9b66-076f315a571b","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":93,"box":{"x":117,"y":877,"width":764,"height":12}},{"id":"a505108d-480a-474a-81ff-bc256ad2b8dd","block_type":"box","text":"84","page_number":93,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"1040f430-fe6f-4830-99e5-4ac14fc62b97","block_type":"box","text":"NM1026U-6004408-93/267","page_number":93,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f9f05b07-cd87-470a-a319-d0968edc1434","block_type":"box","text":"parties to the relevant agreement with these service providers and do not have express contractual","page_number":94,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"1a565199-75c8-41b3-acfa-55ce525758cb","block_type":"box","text":"rights against the Fund or its service providers, except certain institutional investors that are Authorized","page_number":94,"box":{"x":117,"y":103,"width":770,"height":12}},{"id":"6b246890-ec4d-4fbb-a69a-4ca6e01a5d61","block_type":"box","text":"Participants may have certain express contractual rights with respect to the Distributor under the terms","page_number":94,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"c88704cc-63a2-4ff9-8127-ca08b387737d","block_type":"box","text":"of the relevant Authorized Participant Agreement. Investors may have certain legal rights under federal","page_number":94,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"af6153a1-3b91-42db-abec-7cc680d555db","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":94,"box":{"x":116,"y":149,"width":770,"height":12}},{"id":"80dd22d4-d8b5-4b27-b0e4-9ba81eda2453","block_type":"box","text":"have a claim against the Fund, or against any service provider in connection with its investment in the","page_number":94,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"e96a95f0-8c76-4968-91e2-06c0ccd9b1dc","block_type":"box","text":"Fund, such investor should consult its own legal advisor.","page_number":94,"box":{"x":117,"y":180,"width":423,"height":12}},{"id":"5dbf326b-7604-4443-8aa9-0a40ad2cc5fc","block_type":"box","text":"By contract, Authorized Participants irrevocably submit to the non-exclusive jurisdiction of any New","page_number":94,"box":{"x":117,"y":211,"width":738,"height":12}},{"id":"116b57b5-a371-4996-9627-b0da0944641c","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":94,"box":{"x":116,"y":227,"width":760,"height":12}},{"id":"0f2e672b-c6f0-4cfd-84a8-c383eaaebfde","block_type":"box","text":"of or relating to the Authorized Participant Agreement. Jurisdiction over other claims, whether by","page_number":94,"box":{"x":116,"y":242,"width":719,"height":12}},{"id":"56274bd3-1763-4901-a18e-38976e6647cb","block_type":"box","text":"investors or Authorized Participants, will turn on the facts of the particular case and the law of the","page_number":94,"box":{"x":117,"y":258,"width":725,"height":11}},{"id":"a40c626d-fee1-4150-9ff1-417e9d173c30","block_type":"box","text":"jurisdiction in which the proceeding is brought.","page_number":94,"box":{"x":115,"y":273,"width":349,"height":12}},{"id":"6ea8d44b-827f-4a26-b9c9-f45af4546ce3","block_type":"box","text":"Financial Statements","page_number":94,"box":{"x":119,"y":324,"width":385,"height":23}},{"id":"b4831b9b-be40-4ed8-b268-2604a3880541","block_type":"box","text":"The audited financial statements, financial highlights and notes thereto in the Fund’s Annual Financial","page_number":94,"box":{"x":116,"y":376,"width":759,"height":13}},{"id":"7d46b211-7f98-4b03-a163-dd8e811ceb6a","block_type":"box","text":"Statements and Additional Information for the fiscal year ended April 30, 2026, as filed with the SEC on","page_number":94,"box":{"x":116,"y":392,"width":771,"height":12}},{"id":"ef2abf4d-ede0-4134-8963-3ef79c0c58b5","block_type":"box","text":"Form N-CSR (the “2026 Annual Financial Statements”), are incorporated in this SAI by reference. No","page_number":94,"box":{"x":117,"y":407,"width":754,"height":13}},{"id":"2423e0cb-b501-41e3-8c7a-ca841afff419","block_type":"box","text":"other parts of the 2026 Annual Financial Statements are incorporated by reference herein. The 2026","page_number":94,"box":{"x":116,"y":423,"width":750,"height":12}},{"id":"1abdba74-ae03-4f5c-8d64-b66cba3d1e48","block_type":"box","text":"Annual Financial Statements have been audited by PricewaterhouseCoopers LLP, the Fund’s","page_number":94,"box":{"x":116,"y":438,"width":700,"height":13}},{"id":"8c1ccbd1-a018-47ae-b094-88f2e2f98cc3","block_type":"box","text":"independent registered public accounting firm. The information in the financial statements and financial","page_number":94,"box":{"x":117,"y":454,"width":768,"height":12}},{"id":"1c0cb30a-add3-4d1e-932f-336a4493cd68","block_type":"box","text":"highlights included in the 2026 Annual Financial Statements for the fiscal years prior to the fiscal period","page_number":94,"box":{"x":117,"y":469,"width":769,"height":13}},{"id":"e5261072-0cda-466a-b699-56eee7bd6b85","block_type":"box","text":"from June 1, 2024 to April 30, 2025 was audited by another independent accounting firm, who was the","page_number":94,"box":{"x":116,"y":485,"width":765,"height":12}},{"id":"d6a6daf0-d80d-40d0-893e-9b6a727e3512","block_type":"box","text":"Predecessor Fund’s independent registered public accounting firm. The report of","page_number":94,"box":{"x":117,"y":500,"width":603,"height":13}},{"id":"b08da9a1-9da6-4b7a-8121-5524693700d1","block_type":"box","text":"PricewaterhouseCoopers LLP is incorporated herein by reference. Such 2026 Annual Financial","page_number":94,"box":{"x":117,"y":516,"width":710,"height":12}},{"id":"9c6f9126-ca68-4648-b3cb-f4a0de41f8c9","block_type":"box","text":"Statements have been incorporated herein in reliance upon the report of such firm given their authority","page_number":94,"box":{"x":116,"y":531,"width":766,"height":13}},{"id":"9aa43c67-2115-47ce-b4bd-91c2b8502cce","block_type":"box","text":"as experts in accounting and auditing. Additional copies of the Fund’s annual and semi-annual reports","page_number":94,"box":{"x":116,"y":547,"width":762,"height":12}},{"id":"562a0182-231f-4d3c-9de6-218b4f902220","block_type":"box","text":"to shareholders and the Fund’s Annual and Semi-Annual Financial Statements and Additional","page_number":94,"box":{"x":116,"y":562,"width":700,"height":10}},{"id":"a5af1d65-2dbc-4334-9d0e-26d46eb710d7","block_type":"box","text":"Information may be obtained at no charge by telephoning the Distributor at the telephone number","page_number":94,"box":{"x":117,"y":578,"width":726,"height":12}},{"id":"79b7e653-39dc-4020-a856-2affa7e30ec0","block_type":"box","text":"appearing on the front page of this SAI.","page_number":94,"box":{"x":116,"y":593,"width":297,"height":13}},{"id":"9ccdb0e0-d252-4e61-9110-031bd46c88d0","block_type":"box","text":"85","page_number":94,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d91d842c-2b7f-4910-b887-7caee2ff9baf","block_type":"box","text":"NM1026U-6004408-94/267","page_number":94,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"88e8cc73-225a-41e6-84a0-baa9cc1c749e","block_type":"box","text":"PART II","page_number":95,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"2d3320c5-d5a0-4295-8d7d-66a20087ce78","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be","page_number":95,"box":{"x":116,"y":143,"width":734,"height":12}},{"id":"bd8b6624-ca65-4273-9955-9d98fedc9c43","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":95,"box":{"x":117,"y":158,"width":770,"height":13}},{"id":"c278d6d5-451d-4738-a5dc-4e3707496317","block_type":"box","text":"as “Municipal Funds” if they invest certain of their assets in municipal investments described below.","page_number":95,"box":{"x":116,"y":174,"width":743,"height":12}},{"id":"95dec970-acf8-4100-b6cd-34476c31736e","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a","page_number":95,"box":{"x":117,"y":205,"width":704,"height":11}},{"id":"c90f63a7-ccbb-473d-aedd-71c043f1c84f","block_type":"box","text":"Delaware statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation,","page_number":95,"box":{"x":117,"y":220,"width":769,"height":12}},{"id":"c792bb9c-1368-4013-ab80-0c4fd0c17bd6","block_type":"box","text":"shares of common stock and shares of beneficial interest are referred to herein as “shares” or","page_number":95,"box":{"x":116,"y":235,"width":701,"height":10}},{"id":"36d93161-ffd2-45e9-ae48-f0f888b836f9","block_type":"box","text":"“Common Stock,” holders of shares of Common Stock are referred to as “shareholders,” the trustees","page_number":95,"box":{"x":116,"y":251,"width":752,"height":11}},{"id":"515c0c1c-dcda-4ccb-a241-db0b80e2eca0","block_type":"box","text":"or directors of each Fund are referred to as “Directors,” the boards of trustees/directors of each Fund","page_number":95,"box":{"x":116,"y":266,"width":754,"height":12}},{"id":"39b55abf-275b-45b0-bb62-c12b1e72e3f0","block_type":"box","text":"are referred to as the “Board of Directors” or the “Board,” BlackRock Advisors, LLC, BlackRock Fund","page_number":95,"box":{"x":116,"y":282,"width":752,"height":11}},{"id":"fde021f0-2728-4983-98c4-1bf41808d6e3","block_type":"box","text":"Advisors or their respective affiliates is the investment adviser or manager of each Fund and is referred","page_number":95,"box":{"x":116,"y":297,"width":771,"height":12}},{"id":"d8f8ebe7-f71c-4635-a593-26fc587e8445","block_type":"box","text":"to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or management","page_number":95,"box":{"x":116,"y":313,"width":745,"height":12}},{"id":"cddaa2a4-ffbc-49b6-b789-bed993be075b","block_type":"box","text":"agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":95,"box":{"x":116,"y":328,"width":722,"height":13}},{"id":"112839ac-1b03-49da-9135-6abdddac9527","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as","page_number":95,"box":{"x":116,"y":344,"width":765,"height":12}},{"id":"c2b655e7-e2cb-4496-8870-3b292e5baef4","block_type":"box","text":"its “charter.” The Investment Company Act of 1940, as amended, is referred to herein as the","page_number":95,"box":{"x":117,"y":359,"width":689,"height":13}},{"id":"673e1d21-7e0a-483f-8e0a-ab9a6e0869fe","block_type":"box","text":"“Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the","page_number":95,"box":{"x":116,"y":375,"width":719,"height":12}},{"id":"005cc05d-adb8-475a-9286-13011330f64b","block_type":"box","text":"“Securities Act.” The Securities and Exchange Commission is referred to herein as the “Commission”","page_number":95,"box":{"x":116,"y":390,"width":755,"height":13}},{"id":"6a001d14-acf4-4659-aef6-442c710ce860","block_type":"box","text":"or the “SEC.”","page_number":95,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"9ab13fd4-fe3c-4dcc-91a3-41ca562a6abf","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":95,"box":{"x":117,"y":436,"width":765,"height":12}},{"id":"cfaaf53f-0051-46c7-8226-dbd75bfa612f","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each,","page_number":95,"box":{"x":116,"y":452,"width":770,"height":12}},{"id":"9b88d01d-595e-4537-a1f0-bcc2147f8367","block_type":"box","text":"a “Master LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All","page_number":95,"box":{"x":116,"y":467,"width":734,"height":12}},{"id":"9a724b5a-38dd-4995-9af5-c5e1a8590deb","block_type":"box","text":"investments are generally made at the level of the Master Portfolio. This structure is sometimes called","page_number":95,"box":{"x":117,"y":483,"width":761,"height":12}},{"id":"2926fa3e-3861-4028-9ffb-50b175b40ba2","block_type":"box","text":"a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the","page_number":95,"box":{"x":116,"y":498,"width":700,"height":12}},{"id":"78a0fddb-9ff0-4eed-ba4a-4055ef852501","block_type":"box","text":"investment results of the underlying Master Portfolio in which it invests. For simplicity, this SAI uses the","page_number":95,"box":{"x":117,"y":514,"width":770,"height":12}},{"id":"cd9b0317-d777-4e87-8b31-620a9314e5ae","block_type":"box","text":"term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":95,"box":{"x":116,"y":529,"width":503,"height":10}},{"id":"6affb477-75a7-4f0c-8b81-a62bbbddc446","block_type":"box","text":"Certain information contained herein may not be relevant to a particular Fund.","page_number":95,"box":{"x":117,"y":560,"width":582,"height":12}},{"id":"39f31e55-2fca-4944-9eba-73e58a734661","block_type":"box","text":"Investment Risks and Considerations","page_number":95,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"27710f0e-533a-4e82-9f11-c16f8ac90589","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one","page_number":95,"box":{"x":116,"y":661,"width":767,"height":12}},{"id":"44e05035-9fbf-4d78-b119-f07a5920e445","block_type":"box","text":"or more of the Funds may use, and the risks and considerations associated with those investments","page_number":95,"box":{"x":116,"y":677,"width":735,"height":12}},{"id":"0b1fd3e2-152c-4533-9c94-10b1914dd32a","block_type":"box","text":"and investment strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the","page_number":95,"box":{"x":116,"y":692,"width":685,"height":12}},{"id":"e81419bf-9dd2-4cce-b201-c88c42566bf1","block_type":"box","text":"“Investment Objective and Policies,” “Investment Objectives and Policies” or “Investment Strategies","page_number":95,"box":{"x":116,"y":708,"width":737,"height":12}},{"id":"1dd46404-3974-47b6-bb24-8b9d87cc4373","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":95,"box":{"x":116,"y":723,"width":714,"height":12}},{"id":"8215bba6-174c-481d-bf35-23c8f773d8cd","block_type":"box","text":"Fund’s investment policies and risks. Information contained in this section about the risks and","page_number":95,"box":{"x":117,"y":739,"width":692,"height":12}},{"id":"13e5c007-acd5-43b8-b49d-c8a1b97c13d8","block_type":"box","text":"considerations associated with a Fund’s investments and/or investment strategies applies only to those","page_number":95,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"e1f2535c-2db8-4b18-8797-c67671e02212","block_type":"box","text":"Funds specifically identified in Part I of this SAI as making each type of investment or using each","page_number":95,"box":{"x":117,"y":770,"width":716,"height":12}},{"id":"f15edec1-7936-4409-8118-09c1722298a0","block_type":"box","text":"investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does","page_number":95,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"e705ad12-655a-489a-9f93-cc29fa26b141","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":95,"box":{"x":117,"y":801,"width":735,"height":12}},{"id":"c8d6d9bd-103c-4a32-82c8-8134fe37df78","block_type":"box","text":"Fund. Only information that is clearly identified as applicable to a Covered Fund is considered to form a","page_number":95,"box":{"x":117,"y":816,"width":765,"height":12}},{"id":"4fe89452-a5aa-4617-9d8d-95eca333a0e5","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":95,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"caa605bf-7177-4dd2-b9b5-6f8754ec9c46","block_type":"box","text":"Asset-Backed Securities.","page_number":95,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"70352cbe-4a35-42d7-88fd-4fd67e29aaa5","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans,","page_number":95,"box":{"x":317,"y":862,"width":519,"height":12}},{"id":"c3002994-87d0-4bb6-b784-2b6dda1d2e17","block_type":"box","text":"installment sale contracts, credit card receivables or other assets. Asset-backed securities are","page_number":95,"box":{"x":117,"y":878,"width":702,"height":11}},{"id":"2aa2569e-988f-42b1-b33b-6b0e65083843","block_type":"box","text":"II-1","page_number":95,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"08754e63-437e-40cb-ad29-ff8e8377adc4","block_type":"box","text":"NM1026U-6004408-95/267","page_number":95,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0c5584fa-941f-4414-94c7-24c7ba101bf8","block_type":"box","text":"“pass-through” securities, meaning that principal and interest payments — net of expenses — made by","page_number":96,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"65fb853d-5ba2-4fb0-b5fb-0bce6eae4d03","block_type":"box","text":"the borrower on the underlying assets (such as credit card receivables) are passed through to a Fund.","page_number":96,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"8596c3e3-0b39-43d5-bf1b-b20992738c44","block_type":"box","text":"The value of asset-backed securities, like that of traditional fixed-income securities, typically increases","page_number":96,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"485639ad-ff57-4f5e-b140-1813e7216c16","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, asset-backed securities differ","page_number":96,"box":{"x":116,"y":134,"width":770,"height":11}},{"id":"bfee2392-5a48-4bb4-9872-bd4fae8a6dea","block_type":"box","text":"from traditional fixed-income securities because of their potential for prepayment. The price paid by a","page_number":96,"box":{"x":116,"y":149,"width":755,"height":12}},{"id":"0c1f64d0-08d5-4ccc-a5f7-03c0e0ae569e","block_type":"box","text":"Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and the","page_number":96,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"6baf28e9-8d7e-4e7c-9b7b-61acc682ae08","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of","page_number":96,"box":{"x":116,"y":180,"width":709,"height":12}},{"id":"d539b9da-c2aa-478d-9c44-148a9b2ffc30","block_type":"box","text":"prepayment of the underlying assets. In a period of declining interest rates, borrowers may prepay the","page_number":96,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"e57b71f5-22ab-423a-9d2b-8492453a4e2a","block_type":"box","text":"underlying assets more quickly than anticipated, thereby reducing the yield to maturity and the average","page_number":96,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"53fd9464-7998-48af-a1c8-daf14699ed02","block_type":"box","text":"life of the asset-backed securities. Moreover, when a Fund reinvests the proceeds of a prepayment in","page_number":96,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"38d7e82e-300f-45f9-9ef8-726feac690d7","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":96,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"76bb3658-0aed-49f0-ac8a-4c0133655cb8","block_type":"box","text":"was prepaid. To the extent that a Fund purchases asset-backed securities at a premium, prepayments","page_number":96,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"edc9f715-c943-454f-87c5-04fd643514e1","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":96,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"12ac39b1-54d6-41df-9c3c-2b3ed5e98af5","block_type":"box","text":"both scheduled payments and unscheduled prepayments will increase current and total returns and","page_number":96,"box":{"x":117,"y":289,"width":742,"height":12}},{"id":"196e39f6-d7f0-4f05-97e9-220c88326a1f","block_type":"box","text":"unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":96,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"46cafe2c-d108-4fd1-b764-69efbe09ea0e","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the","page_number":96,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"54952f0c-5f61-48a1-beb7-0577cb0a5adb","block_type":"box","text":"underlying assets may occur at a slower than expected rate, creating maturity extension risk. This","page_number":96,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"1f55b3af-4868-4fa7-b809-01e5389a34a5","block_type":"box","text":"particular risk may effectively change a security that was considered short- or intermediate-term at the","page_number":96,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"a141a30e-e06e-4275-b392-c2d2f9517734","block_type":"box","text":"time of purchase into a longer term security. Since the value of longer-term securities generally","page_number":96,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"505a4eb8-1471-4d88-8284-b16280046f3a","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than does the value of shorter-term","page_number":96,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"c313375a-950a-42c2-bfd7-1e753abf2a43","block_type":"box","text":"securities, maturity extension risk could increase the volatility of the Fund. When interest rates decline,","page_number":96,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"e9aeabec-5311-4db1-921e-dbad94346901","block_type":"box","text":"the value of an asset-backed security with prepayment features may not increase as much as that of","page_number":96,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"e91d8c85-5eee-4758-a952-61ddb5bcd861","block_type":"box","text":"other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate","page_number":96,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"5a08d6b8-7952-449d-9234-1ce4ee0f7926","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":96,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"92677942-586a-4abb-965c-bc11b4be92ec","block_type":"box","text":"Asset-Based Securities.","page_number":96,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"0d1c7aba-d7fe-43c6-b67f-1d022042bd6d","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the","page_number":96,"box":{"x":307,"y":475,"width":548,"height":12}},{"id":"0a8e3778-76e3-4da4-b1a3-8b0f3b88de14","block_type":"box","text":"principal amount, redemption terms or conversion terms of which are related to the market price of","page_number":96,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"fda9e3bd-e912-4366-9a21-f167bc994e31","block_type":"box","text":"some natural resource asset such as gold bullion. These securities are referred to as “asset-based","page_number":96,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"80cdbd0f-470a-49de-88e1-cb9ac70ec404","block_type":"box","text":"securities.” A Fund will purchase only asset-based securities that are rated, or are issued by issuers","page_number":96,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"33a4efa3-7ce8-4c2b-984d-2ff2257755ef","block_type":"box","text":"that have outstanding debt obligations rated, investment grade (for example, AAA, AA, A or BBB by","page_number":96,"box":{"x":116,"y":537,"width":744,"height":12}},{"id":"7d154c1a-89a7-4f78-99d1-29fb15cfed68","block_type":"box","text":"S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by Moody’s Investors Service, Inc.","page_number":96,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"843001ab-14b8-4ed3-8cc5-790f09a52b8f","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":96,"box":{"x":117,"y":568,"width":721,"height":12}},{"id":"d4c8f1a2-7ce8-4609-b03f-c74c989113c9","block_type":"box","text":"Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":96,"box":{"x":117,"y":583,"width":733,"height":12}},{"id":"77ccadfe-53e3-46ed-8c89-961f0fc83551","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and","page_number":96,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"d8bc39a7-3afa-483b-9944-b86332ba81fa","block_type":"box","text":"may be more likely to be downgraded than securities rated in the three highest rating categories. If an","page_number":96,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"d93101e6-7adc-49a9-8e15-0ad733032569","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":96,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"8839d609-111a-4995-a02a-5617cf504bc9","block_type":"box","text":"such backing into account in determining the creditworthiness of the issuer. While the market prices for","page_number":96,"box":{"x":116,"y":645,"width":769,"height":12}},{"id":"56b3ea3e-93d8-48f0-9fb2-ba1fa9a33ba5","block_type":"box","text":"an asset-based security and the related natural resource asset generally are expected to move in the","page_number":96,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"c8f33bf0-fcd9-4db8-99ec-bcd56952628e","block_type":"box","text":"same direction, there may not be perfect correlation in the two price movements. Asset-based","page_number":96,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"5b9b3c72-b61a-4a71-9e06-af875498df33","block_type":"box","text":"securities may not be secured by a security interest in or claim on the underlying natural resource","page_number":96,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"b47c4b7b-6da3-4a66-ac9f-2f2e7b7c7989","block_type":"box","text":"asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred","page_number":96,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"9f60336e-3987-4cd8-8dfd-875d9509e2d0","block_type":"box","text":"dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be","page_number":96,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"f24e9381-742f-4528-af19-5b8a611c7893","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":96,"box":{"x":117,"y":738,"width":738,"height":12}},{"id":"c6c3433b-16ef-43b1-8015-522105f0dd22","block_type":"box","text":"stated amount of the asset to which it is related. In such instance, because no Fund presently intends","page_number":96,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"830fc104-8bb2-4880-ad74-f12b273c497e","block_type":"box","text":"to invest directly in natural resource assets, a Fund would sell the asset-based security in the","page_number":96,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"07a39e70-44c0-416b-b141-320f8548a418","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":96,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"4b18756b-8c09-42e4-b355-88d8d5407052","block_type":"box","text":"asset exceeds the stated principal amount and thereby realize the appreciation in the underlying asset.","page_number":96,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"26e2805d-e973-42e1-9355-94b1fcb9b355","block_type":"box","text":"Precious Metal-Related Securities.","page_number":96,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"8c3f8516-dc59-4296-8625-d57379ff0a35","block_type":"box","text":"A Fund may invest in the equity and other securities of companies","page_number":96,"box":{"x":374,"y":831,"width":500,"height":12}},{"id":"1beb336f-2d99-4028-a510-b8a87481bbf1","block_type":"box","text":"that explore for, extract, process or deal in precious metals (","page_number":96,"box":{"x":116,"y":847,"width":447,"height":12}},{"id":"a8caf03f-22ad-4a95-91b9-37fb909f6dcf","block_type":"box","text":"e.g.","page_number":96,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"678cad51-f051-4164-a1e3-883f93e6c6fe","block_type":"box","text":", gold, silver and platinum), and in","page_number":96,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"f4658891-f7ef-4998-b03c-1edba3040663","block_type":"box","text":"asset-based securities indexed to the value of such metals. Such securities may be purchased when","page_number":96,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"70879da4-3da9-4673-8fdf-ffcb6329c459","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":96,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"acdad835-48bd-4bdf-83d2-7b1b9d68d76a","block_type":"box","text":"II-2","page_number":96,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"d795d911-0762-4a8b-bad7-6350a406b45a","block_type":"box","text":"NM1026U-6004408-96/267","page_number":96,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d1207901-0f04-4a93-b10f-ee870881b9ee","block_type":"box","text":"assets or when the values of precious metals are expected to benefit from inflationary pressure or","page_number":97,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"c8199eaa-7b98-449b-9f58-0bf30769e2d0","block_type":"box","text":"other economic, political or financial uncertainty or instability. Based on historical experience, during","page_number":97,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"d43391ad-8b20-4d2c-af0a-4ea3503ee8e8","block_type":"box","text":"periods of economic or financial instability the securities of companies involved in precious metals may","page_number":97,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"f9acac4e-e076-4939-a373-12bd81b6e700","block_type":"box","text":"be subject to extreme price fluctuations, reflecting the high volatility of precious metal prices during","page_number":97,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"6f7c7acb-28a3-4aa2-bf73-2014b3a655b3","block_type":"box","text":"such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":97,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"6a0fa3c2-70b3-4d75-a7da-06490962121b","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such","page_number":97,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"3dbd1dbe-6375-4f46-bfe5-9b86d5cd6e11","block_type":"box","text":"companies. The major producers of gold include the Republic of South Africa, Russia, Canada, the","page_number":97,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"9efc0c30-5d2b-4f8f-948e-76e5795ef006","block_type":"box","text":"United States, Brazil and Australia. Sales of gold by Russia are largely unpredictable and often relate","page_number":97,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"a596e929-bd85-450a-8863-a776ab89ab15","block_type":"box","text":"to political and economic considerations rather than to market forces. Economic, financial, social and","page_number":97,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"0e781ea4-cf49-47de-b8bc-dc27ca985769","block_type":"box","text":"political factors within South Africa may significantly affect South African gold production.","page_number":97,"box":{"x":117,"y":227,"width":663,"height":12}},{"id":"eeaf4c4e-f15a-4882-a829-fed21c1a11b3","block_type":"box","text":"Borrowing and Leverage.","page_number":97,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"094ee14f-76be-4350-ad14-0e54701a256b","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or","page_number":97,"box":{"x":318,"y":258,"width":517,"height":12}},{"id":"f2bdc073-ff40-4901-b191-aa5d9c43294b","block_type":"box","text":"emergency purposes, including to meet redemptions or to settle securities transactions. Certain Funds","page_number":97,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"fa9530c9-afbe-4e88-ab16-674526e7bbd4","block_type":"box","text":"will not purchase securities at any time when borrowings exceed 5% of their total assets, except (a) to","page_number":97,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"5d2fc819-8162-4ae3-8f0d-e61d8da5932d","block_type":"box","text":"honor prior commitments or (b) to exercise subscription rights when outstanding borrowings have been","page_number":97,"box":{"x":117,"y":304,"width":768,"height":12}},{"id":"74b0a7ed-01d2-4b65-a9b9-fb03cd0cca16","block_type":"box","text":"obtained exclusively for settlements of other securities transactions.","page_number":97,"box":{"x":116,"y":320,"width":508,"height":12}},{"id":"99afe7b7-10e7-4353-910c-e32c0bab981c","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s","page_number":97,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"63485d26-1c67-441a-adc8-22c80b350373","block_type":"box","text":"Prospectus. The purchase of securities while borrowings are outstanding will have the effect of","page_number":97,"box":{"x":117,"y":366,"width":707,"height":12}},{"id":"4c7ddfc7-1a80-4b04-8c79-5925441234ae","block_type":"box","text":"leveraging the Fund. Such leveraging increases the Fund’s exposure to capital risk, and borrowed","page_number":97,"box":{"x":117,"y":382,"width":731,"height":12}},{"id":"4ed65fb1-3130-4d36-a7b8-5886090c2e5e","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":97,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"9df660bf-9530-4c5e-bd32-a0cfd7893a8a","block_type":"box","text":"an opportunity for greater total return, but, at the same time, creates special risks. For example,","page_number":97,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"21b1ae38-f01a-4943-909f-b05a51f3bc1e","block_type":"box","text":"leveraging may exaggerate changes in the net asset value (“NAV”) of Fund shares and in the yield on","page_number":97,"box":{"x":117,"y":428,"width":758,"height":12}},{"id":"73773d59-2b2d-4f0e-8d05-6b8c217c852c","block_type":"box","text":"the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s assets may","page_number":97,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"0691286e-387a-42f5-a3b0-b6b514cdfce8","block_type":"box","text":"change in value during the time the borrowings are outstanding. Borrowings will create interest","page_number":97,"box":{"x":116,"y":459,"width":707,"height":12}},{"id":"733852fc-d855-4856-be07-a6433adb2601","block_type":"box","text":"expenses for the Fund that can exceed the income from the assets purchased with the borrowings. To","page_number":97,"box":{"x":116,"y":475,"width":764,"height":12}},{"id":"88a6f502-a12c-487b-a2d6-36625bbb27ce","block_type":"box","text":"the extent the income or capital appreciation derived from securities purchased with borrowed funds","page_number":97,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"45ee5cad-d44a-42be-912d-6166b37e47ce","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":97,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"c0b8fe2d-f750-48bd-a669-8978c4e602b4","block_type":"box","text":"if leverage had not been used. Conversely, if the income or capital appreciation from the securities","page_number":97,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"679b12bb-0c27-4a7f-a503-a446217ff643","block_type":"box","text":"purchased with such borrowed funds is not sufficient to cover the cost of borrowing, the return to the","page_number":97,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"efcae3ed-8915-4907-b40d-94c6d82af0e9","block_type":"box","text":"Fund will be less than if leverage had not been used and, therefore, the amount available for","page_number":97,"box":{"x":117,"y":552,"width":690,"height":12}},{"id":"af86ecfd-3149-45d1-b674-e08ef6ccfd8b","block_type":"box","text":"distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best","page_number":97,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"0bca16f7-8da6-4408-b2b5-b683e6b0ab05","block_type":"box","text":"judgment nevertheless may determine to maintain the Fund’s leveraged position if it expects that the","page_number":97,"box":{"x":115,"y":583,"width":752,"height":12}},{"id":"f26a5e66-986f-402a-af8f-713ea8658edb","block_type":"box","text":"benefits to the Fund’s shareholders of maintaining the leveraged position will outweigh the current","page_number":97,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"eac33549-ac8d-4be1-bcf4-9d19e1dcbaa9","block_type":"box","text":"reduced return.","page_number":97,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"1f49904b-9a3e-48c9-9f49-d70e542c1633","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit","page_number":97,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"c80b3c6e-9b37-4502-b6f5-e27a2402886c","block_type":"box","text":"agreements relating to asset coverage, portfolio composition requirements and other matters. It is not","page_number":97,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"0cae8246-3f03-4591-b00c-67885528c63c","block_type":"box","text":"anticipated that observance of such covenants would impede the Manager from managing a Fund’s","page_number":97,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"1fb34f3b-50f9-4142-95c9-c89a89ae0de3","block_type":"box","text":"portfolio in accordance with the Fund’s investment objectives and policies. However, a breach of any","page_number":97,"box":{"x":117,"y":692,"width":746,"height":12}},{"id":"eaaadb1e-cd5b-4052-8299-7f79789a6118","block_type":"box","text":"such covenants not cured within the specified cure period may result in acceleration of outstanding","page_number":97,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"04bc1eb2-ae4c-40f2-92e7-d3f7ec949de9","block_type":"box","text":"indebtedness and require the Fund to dispose of portfolio investments at a time when it may be","page_number":97,"box":{"x":117,"y":723,"width":706,"height":12}},{"id":"eca81e26-f167-4cdd-b11b-0ac1dbef7e37","block_type":"box","text":"disadvantageous to do so.","page_number":97,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"b5286a99-d376-4d25-92c4-05560e9c4121","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such","page_number":97,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"78772b00-ce3f-4a82-ba81-031bf610771d","block_type":"box","text":"borrowings are no less favorable than those available from comparable sources of funds in the","page_number":97,"box":{"x":117,"y":785,"width":701,"height":12}},{"id":"9d6ff83c-b556-403a-97e4-e59ff04bf34c","block_type":"box","text":"marketplace.","page_number":97,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"00a28842-6f45-4cd7-9382-cdbe10d29566","block_type":"box","text":"Cash Management.","page_number":97,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"7eee82e5-e9ca-442d-b561-3ad03a16e57c","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide","page_number":97,"box":{"x":269,"y":831,"width":578,"height":12}},{"id":"c9dda5c0-3aec-49ae-8666-39676a3c8113","block_type":"box","text":"liquidity necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if","page_number":97,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"2d66a071-7c6d-449d-b918-f4f20de39e5c","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":97,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"921d8fbe-a8df-4a37-aa5b-72ad09329d01","block_type":"box","text":"certain types of instruments with remaining maturities of 397 days or less for liquidity purposes. Such","page_number":97,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"b719d1d9-b5d2-408f-bb59-b18240312e37","block_type":"box","text":"II-3","page_number":97,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"48a11d2b-3148-434a-8694-d21eadcd715d","block_type":"box","text":"NM1026U-6004408-97/267","page_number":97,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2da42568-745e-434a-900f-ce5873caa0bd","block_type":"box","text":"instruments would consist of: (i) obligations of the U.S. Government, its agencies, instrumentalities,","page_number":98,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"550fc1ab-5b24-41ff-90fc-d9c94e39402b","block_type":"box","text":"authorities or political subdivisions (“U.S. Government Securities”); (ii) other fixed-income securities","page_number":98,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"8a9db4cf-5a31-4071-873d-ecdbac8493d8","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":98,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"a32f58fb-c09a-4dee-b102-a75db3a707f3","block_type":"box","text":"opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable certificates of","page_number":98,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"574e2dbc-295b-4326-a6c3-2aa98e156884","block_type":"box","text":"deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":98,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"debd7698-148a-4b04-9944-cd6c46c58649","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the","page_number":98,"box":{"x":117,"y":165,"width":718,"height":12}},{"id":"b2633c08-fdc7-492e-b4e5-22a344daaf06","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":98,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"fde35e3d-bd56-4701-8d27-6b1faae1ac82","block_type":"box","text":"outstanding commercial paper, bank obligations or other short-term obligations rated Prime-1 by","page_number":98,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"4c237af5-d3e0-475a-a3ce-2e9860fb082d","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":98,"box":{"x":117,"y":211,"width":731,"height":12}},{"id":"00e8b7a1-0704-4530-8816-418b503b4a27","block_type":"box","text":"quality in the opinion of the Manager. For more information on money market instruments, see “Money","page_number":98,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"0d531140-8e15-4198-977c-5422e5ad9124","block_type":"box","text":"Market Securities” below.","page_number":98,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"ff9ecec0-29ae-4768-98d7-91605a7750f8","block_type":"box","text":"Collateralized Debt Obligations.","page_number":98,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"2244201e-7d14-412e-9eb4-f9550eec2a61","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations","page_number":98,"box":{"x":369,"y":273,"width":444,"height":12}},{"id":"23f36194-4349-4f95-b145-19273f5c7057","block_type":"box","text":"(“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations","page_number":98,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"1299d087-76e4-4ab2-bd10-afb9bd0bc3a9","block_type":"box","text":"(“CLOs”) and other similarly structured securities. CDOs are types of asset-backed securities. A CBO","page_number":98,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"57245802-7521-4cac-a39b-e4ddf4f651bb","block_type":"box","text":"is ordinarily issued by a trust or other special purpose entity (“SPE”) and is typically backed by a","page_number":98,"box":{"x":117,"y":320,"width":716,"height":12}},{"id":"9c854951-cd99-4278-910e-a4288e06d6fd","block_type":"box","text":"diversified pool of fixed-income securities (which may include high risk, below investment grade","page_number":98,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"036961cc-f279-4fbc-8523-230530824b7c","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":98,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"ca94d5ba-4283-43e2-97e1-1908ecb0643f","block_type":"box","text":"collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior","page_number":98,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"c2e124e3-7022-40c1-a211-3f8c78786d26","block_type":"box","text":"secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be","page_number":98,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"9027370a-658c-428f-b25c-88c82b6807ad","block_type":"box","text":"rated below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO","page_number":98,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"bcee4f4d-be2d-4b07-bd99-70799a4796df","block_type":"box","text":"organized outside of the United States may not be deemed to be foreign securities if the CLO is","page_number":98,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"9d237b52-62fa-4ee7-a74c-f23e9dcf4b3d","block_type":"box","text":"collateralized by a pool of loans, a substantial portion of which are U.S. loans. Although certain CDOs","page_number":98,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"7759d0c3-426f-438d-bb0f-2ad315d386fb","block_type":"box","text":"may benefit from credit enhancement in the form of a senior-subordinate structure, over","page_number":98,"box":{"x":117,"y":444,"width":655,"height":12}},{"id":"347d6385-e803-41ac-bdc7-cb9e716b3841","block_type":"box","text":"collateralization or bond insurance, such enhancement may not always be present, and may fail to","page_number":98,"box":{"x":116,"y":459,"width":735,"height":12}},{"id":"437ce6c2-b287-4614-8a82-8258f41d0185","block_type":"box","text":"protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may use","page_number":98,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"ed510db1-49c0-43ce-985a-5ac6bc9b459c","block_type":"box","text":"derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly,","page_number":98,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"a8754a6d-4f4a-4a64-b511-e5142dc51efd","block_type":"box","text":"which entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge","page_number":98,"box":{"x":116,"y":506,"width":742,"height":12}},{"id":"f76fc4d9-41e6-412d-9f3f-ffa03fb156ce","block_type":"box","text":"management fees and administrative expenses, which are in addition to those of a Fund.","page_number":98,"box":{"x":117,"y":521,"width":664,"height":12}},{"id":"eb86d3a8-fc3b-4af3-af33-94aa579dabe4","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":98,"box":{"x":117,"y":552,"width":724,"height":12}},{"id":"9ae2f8ef-2a78-430e-8ea3-25048fefefe9","block_type":"box","text":"tranches, varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss","page_number":98,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"5bb964c7-1fcb-413b-b5e5-66a0476c6b90","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":98,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"02254549-2ee2-4f18-885b-cf42acb89a52","block_type":"box","text":"from default (though such protection is not complete). Since it is partially protected from defaults, a","page_number":98,"box":{"x":116,"y":599,"width":737,"height":12}},{"id":"a4de5051-0c78-4f10-b8b2-2b14b2e60950","block_type":"box","text":"senior tranche from a CBO or CLO typically has higher ratings and lower yields than its underlying","page_number":98,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"fea75af0-ac67-46b1-b2f6-cfcfada1e68e","block_type":"box","text":"securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO or","page_number":98,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"54faa9a3-568b-4720-a929-66714daac224","block_type":"box","text":"CLO tranches can experience substantial losses due to actual defaults, downgrades of the underlying","page_number":98,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"2cccda43-4df7-48f4-9203-a2ba615cb06e","block_type":"box","text":"collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests,","page_number":98,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"fca3590c-3c4f-4676-938b-af2c105b8635","block_type":"box","text":"increased sensitivity to defaults due to collateral default and disappearance of protecting tranches,","page_number":98,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"d999d9a4-c882-4722-b8a4-e49137a323cf","block_type":"box","text":"market anticipation of defaults as well as investor aversion to CBO or CLO securities as a class.","page_number":98,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"406801d8-80d2-4f8a-ba3f-81c65c87bd3c","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":98,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"a3568ab8-92f3-481a-a985-44157079e988","block_type":"box","text":"of obligations of the same type rather than cash), which involves continued exposure to default risk","page_number":98,"box":{"x":116,"y":723,"width":734,"height":12}},{"id":"922a79f7-cdc9-4a35-ae28-85c0a9147a52","block_type":"box","text":"with respect to such payments.","page_number":98,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"97ced6d9-8b91-495b-978e-65667789a124","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":98,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"30eadf72-f95a-421c-83e1-b841d2d3a17e","block_type":"box","text":"class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately","page_number":98,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"0f226975-737a-4f5b-89e6-e9e1ba8f5db2","block_type":"box","text":"offered and sold, and thus are not registered under the securities laws. However, an active dealer","page_number":98,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"a08bb7af-2be9-40ac-b302-489a8ca480ea","block_type":"box","text":"market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the","page_number":98,"box":{"x":117,"y":816,"width":736,"height":12}},{"id":"5d8d67f7-fae6-4f3a-a66d-3acd77059221","block_type":"box","text":"normal risks associated with fixed-income securities and asset-backed securities generally discussed","page_number":98,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"1999d278-374d-4101-9bbd-f84ef3ffa063","block_type":"box","text":"elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the possibility that","page_number":98,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"3e79946c-48bf-4dba-9264-d074ae9ed264","block_type":"box","text":"distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":98,"box":{"x":116,"y":862,"width":756,"height":12}},{"id":"5ae07c45-6b6e-4368-9546-2f6eeb34442b","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally","page_number":98,"box":{"x":117,"y":878,"width":708,"height":12}},{"id":"a17db1cd-f7e5-47bc-9441-cb8db8823a50","block_type":"box","text":"II-4","page_number":98,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"fdc1a788-4804-4272-8410-b2a10518aa21","block_type":"box","text":"NM1026U-6004408-98/267","page_number":98,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"39d3b462-3e1f-4ddb-8932-bccf45b3819f","block_type":"box","text":"recognized statistical rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that","page_number":99,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"b2505d0a-35bf-4416-8e69-09f92034e645","block_type":"box","text":"are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal","page_number":99,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"22f256fc-0f87-47f6-bbd0-fe9b7e4f4ebf","block_type":"box","text":"documents could lead to disputes among investors regarding the characterization of proceeds; (v) the","page_number":99,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"94844880-fb82-4acb-9051-0c32c5edf49b","block_type":"box","text":"investment return achieved by the Fund could be significantly different than those predicted by financial","page_number":99,"box":{"x":117,"y":134,"width":771,"height":12}},{"id":"d2c5191e-0bbf-4f1c-aeab-82ec436553cc","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":99,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"901384a1-7566-4be1-96e3-b7785104cfdb","block_type":"box","text":"liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may","page_number":99,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"60c4795f-5d69-4fa0-a264-613e5c4ea168","block_type":"box","text":"perform poorly.","page_number":99,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"739308fe-acd8-4fd0-b2d2-e535465b7f23","block_type":"box","text":"Commercial Paper.","page_number":99,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"d445ff8a-7f63-403f-b093-0a5ad415ee1c","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable","page_number":99,"box":{"x":268,"y":211,"width":607,"height":12}},{"id":"e8d8cd68-8487-46c3-bc51-6fa2f1318b01","block_type":"box","text":"by each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance","page_number":99,"box":{"x":117,"y":227,"width":760,"height":12}},{"id":"b798c010-2a89-410c-89f1-2e1d4a56ef4a","block_type":"box","text":"on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities","page_number":99,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"03307569-ad57-44f9-a3b9-1d57726941d8","block_type":"box","text":"Act. Section 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is","page_number":99,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"8b33941a-0302-45d5-8238-7563bff12b76","block_type":"box","text":"frequently sold (and resold) to institutional investors such as the Fund through or with the assistance of","page_number":99,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"dcbe435e-8f7e-4a79-8117-8e56c0adb9be","block_type":"box","text":"investment dealers who make a market in the Section 4(a)(2) paper, thereby providing liquidity. Certain","page_number":99,"box":{"x":117,"y":289,"width":769,"height":12}},{"id":"e6524fab-568d-4885-8f6f-5ab385cca829","block_type":"box","text":"transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A","page_number":99,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"6c915d90-e8ae-4ad6-8edc-b1da490f854c","block_type":"box","text":"under the Securities Act. Most Funds can purchase commercial paper rated (at the time of purchase)","page_number":99,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"b1241c63-61e7-4ae0-9bc9-1219ea9c1a49","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":99,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"44712adf-79f1-4824-863b-3f56641159fa","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":99,"box":{"x":116,"y":351,"width":675,"height":12}},{"id":"f046dc26-13e3-4c7d-8b1d-68ca41e8eba2","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all","page_number":99,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"7088c347-f7c0-4a89-8bb4-388dfb4db6db","block_type":"box","text":"fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If","page_number":99,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"204b93ab-66d7-44a8-8a4c-cb22dc94b877","block_type":"box","text":"interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature","page_number":99,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"f05a65d6-3c50-42ce-bf8b-063eae837552","block_type":"box","text":"of a commercial paper investment generally makes it less susceptible to volatility than many other fixed","page_number":99,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"5655f9f8-a4d9-4a4c-8e67-afda5b795c69","block_type":"box","text":"income securities because interest rate risk typically increases as maturity lengths increase.","page_number":99,"box":{"x":117,"y":444,"width":686,"height":12}},{"id":"00e50d0f-a16f-4929-824c-329e1fed774e","block_type":"box","text":"Commercial paper tends to yield smaller returns than longer-term corporate debt because securities","page_number":99,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"98d3cfa6-6db4-4438-a0ed-dfcb03083998","block_type":"box","text":"with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":99,"box":{"x":116,"y":475,"width":686,"height":12}},{"id":"26cef828-5c40-4130-a7f2-661c32bb2086","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":99,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"b193b121-b235-44a9-9723-bc36dc8791f3","block_type":"box","text":"Certain Funds seek to gain","page_number":99,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"4c8cb8d7-4f45-44c7-8bcc-610b909846f7","block_type":"box","text":"exposure to the commodities markets primarily through investments in hybrid instruments. Hybrid","page_number":99,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"87b7e32a-c1fe-4095-bfb8-5ced23c75b3d","block_type":"box","text":"instruments are either equity or debt derivative securities with one or more commodity-dependent","page_number":99,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"7fcf5569-6921-4d31-bf61-7ae52faebc4a","block_type":"box","text":"components that have payment features similar to a commodity futures contract, a commodity option","page_number":99,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"e10e5381-0f10-4cc1-81a5-f5f4232570dd","block_type":"box","text":"contract, or a combination of both. Therefore, these instruments are “commodity-linked.” They are","page_number":99,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"920eaf4a-c063-4cca-af05-042ecaffaf86","block_type":"box","text":"considered “hybrid” instruments because they have both commodity-like and security-like","page_number":99,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"5ce8fb96-4eeb-49c2-93d6-4a955d28f8d3","block_type":"box","text":"characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":99,"box":{"x":116,"y":599,"width":738,"height":12}},{"id":"97527b4d-e4ee-43a2-90fb-0d57d100df2e","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable","page_number":99,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"15bd8598-5652-4798-aab8-622aa545ffcf","block_type":"box","text":"economic variable.","page_number":99,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"d0fc2699-bd24-41f9-804b-aafa878e4d8e","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than","page_number":99,"box":{"x":116,"y":661,"width":680,"height":12}},{"id":"989f609c-8755-40e9-aa6a-9efb86fa834d","block_type":"box","text":"investments in traditional equity and debt securities when the value of those traditional securities is","page_number":99,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"6f498c58-beef-462b-9f23-51284ac55526","block_type":"box","text":"declining due to adverse economic conditions. As an example, during periods of rising inflation, debt","page_number":99,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"52ed84a6-c4e0-4157-bf91-03255b2c741d","block_type":"box","text":"securities have historically tended to decline in value due to the general increase in prevailing interest","page_number":99,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"9053364e-debc-477c-9bb9-b004c3c64f0b","block_type":"box","text":"rates. Conversely, during those same periods of rising inflation, the prices of certain commodities, such","page_number":99,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"dff847e3-4f07-455c-8b9a-412ec0056869","block_type":"box","text":"as oil and metals, have historically tended to increase. Of course, there cannot be any guarantee that","page_number":99,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"81a413a8-d55e-477d-a95c-d44022ef0795","block_type":"box","text":"these investments will perform in that manner in the future, and at certain times the price movements","page_number":99,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"a85eb7ff-62a0-4bf0-8077-7bee881c029d","block_type":"box","text":"of commodity-linked instruments have been parallel to those of debt and equity securities.","page_number":99,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"eb5c4479-4e94-4b21-83ec-3a21f084c3f2","block_type":"box","text":"Commodities have historically tended to increase and decrease in value during different parts of the","page_number":99,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"c5816267-fea2-491b-a1d2-febd3312ae44","block_type":"box","text":"business cycle than financial assets. 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A hybrid","page_number":100,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"6bd22c64-4245-4226-8536-87f073d61657","block_type":"box","text":"instrument that qualifies for this exclusion from r","page_number":100,"box":{"x":117,"y":118,"width":347,"height":12}},{"id":"2f90f6e7-f774-4b52-a039-8f95a8916427","block_type":"box","text":"egulation must be “predominantly a security.” A hybrid","page_number":100,"box":{"x":464,"y":118,"width":398,"height":12}},{"id":"fe0e8679-dbe0-44ef-9a77-336ca60d7c6d","block_type":"box","text":"instrument is considered to be predominantly a security if","page_number":100,"box":{"x":117,"y":134,"width":415,"height":12}},{"id":"34ad2f1f-6e9a-4616-b640-3952e5e08adb","block_type":"box","text":"f (a) the issuer of the hybrid instrument receives","page_number":100,"box":{"x":531,"y":134,"width":347,"height":12}},{"id":"ac7730f5-8747-44b4-99ed-caa5d88e1324","block_type":"box","text":"payment in full of the purchase price of the hybr","page_number":100,"box":{"x":117,"y":149,"width":346,"height":12}},{"id":"16696899-ff6b-4244-9c44-2d0355b159bf","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":100,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"e0020b09-8a8a-4359-9930-8bc61f407257","block_type":"box","text":"delivery of the hybrid instrument; (b) the purchaser or","page_number":100,"box":{"x":116,"y":165,"width":387,"height":12}},{"id":"da9653c2-0fa3-4532-af78-8d5149608e58","block_type":"box","text":"r holder of the hybrid instrument is not required to","page_number":100,"box":{"x":502,"y":165,"width":359,"height":12}},{"id":"11073e6b-4147-4745-9584-c89dbb060af6","block_type":"box","text":"make any payment to the issuer in addition to t","page_number":100,"box":{"x":117,"y":180,"width":335,"height":12}},{"id":"b806cb20-edcb-44ff-9103-8a172eaa702c","block_type":"box","text":"the purchase price paid under subparagraph (a), whether","page_number":100,"box":{"x":452,"y":180,"width":421,"height":12}},{"id":"8273d1d0-2807-4ca3-8a19-f311d47b759b","block_type":"box","text":"as margin, settlement payment, or otherwise, during the life","page_number":100,"box":{"x":116,"y":196,"width":423,"height":12}},{"id":"4745598d-9506-4c93-8ce8-a054e67f3f0b","block_type":"box","text":"fe of the hybrid instrument or at maturity; (c) the","page_number":100,"box":{"x":539,"y":196,"width":346,"height":12}},{"id":"a3862995-a389-4dce-adff-5c617d523f45","block_type":"box","text":"issuer of the hybrid instrument is not subject by t","page_number":100,"box":{"x":117,"y":211,"width":351,"height":12}},{"id":"81832bf0-e6c9-4ef6-aa2a-48d0c482121b","block_type":"box","text":"he terms of the instrument to mark-to-market margining","page_number":100,"box":{"x":469,"y":211,"width":406,"height":12}},{"id":"41a57c50-3be1-482c-b873-bc5f68d15b2b","block_type":"box","text":"requirements; and (d) the hybrid instrument is not ma","page_number":100,"box":{"x":117,"y":227,"width":385,"height":12}},{"id":"faad5357-d4fd-4d07-a5cc-b6abffffeafe","block_type":"box","text":"rketed as a contract of sale of a commodity for","page_number":100,"box":{"x":504,"y":227,"width":341,"height":12}},{"id":"f123878c-8c41-4d4c-9ff4-4a2a223706f2","block_type":"box","text":"future delivery (or option on such a contract) subjec","page_number":100,"box":{"x":116,"y":242,"width":374,"height":12}},{"id":"4ba94378-f963-455d-b304-d98f799c8c98","block_type":"box","text":"t to applicable provisions of the Commodity Exchange","page_number":100,"box":{"x":490,"y":242,"width":396,"height":12}},{"id":"1bec7243-92c1-40f5-b988-edd6a90e5104","block_type":"box","text":"Act. Hybrid instruments may be principal protected, parti","page_number":100,"box":{"x":116,"y":258,"width":408,"height":12}},{"id":"90398503-afef-4eeb-9128-ebfcbdc562b2","block_type":"box","text":"ally protected, or offer no principal protection. A","page_number":100,"box":{"x":525,"y":258,"width":349,"height":12}},{"id":"ad20d21e-1adf-48d0-96a5-61fd480fb552","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":100,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"32d3b03e-953f-4140-ab73-a21c0f72f8a9","block_type":"box","text":"he issuer will pay, at a minimum, the par value of the","page_number":100,"box":{"x":477,"y":273,"width":387,"height":12}},{"id":"3b241e6d-45cf-4810-bea3-d295afe77456","block_type":"box","text":"note at maturity. Therefore, if the commodity value to w","page_number":100,"box":{"x":117,"y":289,"width":389,"height":12}},{"id":"b9246025-8cea-484b-ac20-89a9d7dd4a5c","block_type":"box","text":"which the hybrid instrument is linked declines over","page_number":100,"box":{"x":505,"y":289,"width":371,"height":12}},{"id":"70af2f19-186f-45a5-aecf-f5a202d4ec39","block_type":"box","text":"the life of the note, the Fund will receive","page_number":100,"box":{"x":116,"y":304,"width":294,"height":11}},{"id":"f6f1ed78-46a5-406f-8fa5-8cd42429b673","block_type":"box","text":"at maturity the face or stated value of the note. With a principal","page_number":100,"box":{"x":410,"y":304,"width":461,"height":12}},{"id":"69c87599-ce3b-4fd5-b9f2-59e88b2e6a4c","block_type":"box","text":"protected hybrid instrument, the Fund will receive at matu","page_number":100,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"70d38ac5-ef71-4e83-8c8f-fcfc794b90ad","block_type":"box","text":"rity the greater of the","page_number":100,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"60b70fff-0dfa-48fa-84bd-8730d8524745","block_type":"box","text":"par value of the note or","page_number":100,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"960a86e3-8346-4a6d-8b39-18a6884b9b84","block_type":"box","text":"the increase in its value based on the underlying comm","page_number":100,"box":{"x":116,"y":335,"width":400,"height":12}},{"id":"5915f9b8-5e8c-4adf-8c72-2bebfcdb86e3","block_type":"box","text":"odity or index. This protection is, in effect, an","page_number":100,"box":{"x":518,"y":335,"width":329,"height":12}},{"id":"267c0ba1-9c8d-460a-b9b2-8e7259229c8e","block_type":"box","text":"option whose value is subject to the volatility and","page_number":100,"box":{"x":116,"y":351,"width":359,"height":12}},{"id":"6ecec83e-6f46-487e-abc2-dbe45efe37ed","block_type":"box","text":"price level of the underlying commodity. The Manager’s","page_number":100,"box":{"x":476,"y":351,"width":407,"height":12}},{"id":"2193e5fe-3568-4cd8-8c49-efa4bf7620f4","block_type":"box","text":"decision whether to use principal protection depends in","page_number":100,"box":{"x":116,"y":366,"width":405,"height":12}},{"id":"24592bb6-5e92-4aa8-a466-6e1e1db785fb","block_type":"box","text":"part on the cost of the protection. In addition, the","page_number":100,"box":{"x":522,"y":366,"width":356,"height":12}},{"id":"06ae7d47-9e56-40df-92e1-0814d7035015","block_type":"box","text":"protection feature depends upon the ability","page_number":100,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"4c45ece7-cef4-4ee3-96a1-b3994c9d4877","block_type":"box","text":"of the issuer to meet its obligation to buy back the security,","page_number":100,"box":{"x":432,"y":382,"width":431,"height":12}},{"id":"784faf58-c655-4b90-9a83-0ae4d7675cf0","block_type":"box","text":"and, therefore, depends on the creditworthiness of the","page_number":100,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"5367f116-50ab-4238-b225-47d9ed23980a","block_type":"box","text":"issuer. With full principal protection, the Fund will","page_number":100,"box":{"x":516,"y":397,"width":358,"height":12}},{"id":"6cdab84e-ce2f-43b2-9186-11ddd79af31c","block_type":"box","text":"receive at maturity of the hybrid instrument either","page_number":100,"box":{"x":117,"y":413,"width":356,"height":12}},{"id":"97937f7e-43ba-4385-a17e-8def1ac0770a","block_type":"box","text":"r the stated par value of the hybrid instrument, or","page_number":100,"box":{"x":472,"y":413,"width":354,"height":12}},{"id":"d629dd94-6f84-4623-b151-934583c5a7a0","block_type":"box","text":"potentially, an amount greater than","page_number":100,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"4e6ee959-da03-4034-ae2b-084e2fb0166a","block_type":"box","text":"the stated par value if the underlying commodity, index, futures","page_number":100,"box":{"x":375,"y":428,"width":461,"height":12}},{"id":"9c95c5c4-8013-43d3-974d-ebfd8b03d799","block_type":"box","text":"contract or economic variable to which the hybrid in","page_number":100,"box":{"x":116,"y":444,"width":373,"height":12}},{"id":"5fe92be5-6f67-4e69-8240-06d3f6e6ac77","block_type":"box","text":"strument is linked has increased in value. Partially","page_number":100,"box":{"x":490,"y":444,"width":368,"height":12}},{"id":"b00ce34b-5564-4ae2-bb73-c630c3b43eb5","block_type":"box","text":"protected hybrid instruments may suffer some loss of","page_number":100,"box":{"x":117,"y":459,"width":386,"height":12}},{"id":"e2fcdc94-75a2-462b-91ce-2be4c141dbb9","block_type":"box","text":"f principal if the underlying commodity, index, futures","page_number":100,"box":{"x":502,"y":459,"width":383,"height":12}},{"id":"ab0a50be-6de1-4726-9d98-ce49fd0fbdb1","block_type":"box","text":"contract or economic variable to which the hybrid ins","page_number":100,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"2cf798b3-fce0-4d38-8ed0-f707a6f0e5b5","block_type":"box","text":"trument is linked declines in value during the term of","page_number":100,"box":{"x":498,"y":475,"width":384,"height":12}},{"id":"bddc2738-8e6d-4c59-af91-94880adf4d33","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":100,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"90caca57-0f1f-4f4f-aadf-a28a07d04232","block_type":"box","text":"brid instruments have a specified limit as to the","page_number":100,"box":{"x":505,"y":490,"width":346,"height":12}},{"id":"8fdf671c-d4d7-465a-8ad2-209a2900850d","block_type":"box","text":"amount of principal that they may lose.","page_number":100,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"a5ae78dc-39dc-4a4b-a768-5f8b0f14a412","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":100,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"60945a77-4d5b-4949-b03a-10ac4cd06674","block_type":"box","text":"Certain Funds may invest in hybrid instruments that","page_number":100,"box":{"x":473,"y":537,"width":393,"height":12}},{"id":"c39e16a6-afa7-46c1-8aa4-ed0272db2606","block_type":"box","text":"offer no principal protection. At maturity, there is a risk that the underlying commodity price, futures","page_number":100,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"06d0cf82-c17c-48a4-b54d-a244dc631e40","block_type":"box","text":"contract, index or other economic variable may have declined sufficiently in value such that some or all","page_number":100,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"c22d9f24-2de7-4890-9165-abb9f57ebe78","block_type":"box","text":"of the face value of the hybrid instrument might not be returned. The Manager, at its discretion, may","page_number":100,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"e2ea4a71-8ee5-41d1-a0a2-ddd21b4adebf","block_type":"box","text":"invest in a partially protected principal structured note or a note without principal protection. In deciding","page_number":100,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"4f53842a-f5fc-45a1-ad97-e86f097db757","block_type":"box","text":"to purchase a note without principal protection, the Manager may consider, among other things, the","page_number":100,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"6d544134-06fa-4c5f-960a-373bab16040d","block_type":"box","text":"expected performance of the underlying commodity futures contract, index or other economic variable","page_number":100,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"a19ca7f6-d52d-4b18-9db5-134ce367864f","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":100,"box":{"x":116,"y":645,"width":717,"height":12}},{"id":"d59d5202-170f-4001-ad5c-0b41aa56a062","block_type":"box","text":"believes are relevant.","page_number":100,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"6a98d4b1-a1ba-43c6-835e-9f8fe51a0dcc","block_type":"box","text":"Limitations on Leverage.","page_number":100,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"99c1402d-9341-4876-b1cc-e5c976b2f0a1","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve","page_number":100,"box":{"x":300,"y":692,"width":522,"height":12}},{"id":"81c8b1e1-f074-401d-af32-1fd178fb26ad","block_type":"box","text":"leverage. To avoid being subject to undue leverage risk,","page_number":100,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"7eb4510a-4c07-428d-aaac-56fc20dee613","block_type":"box","text":"a Fund will seek to limit the amount of economic","page_number":100,"box":{"x":529,"y":707,"width":349,"height":10}},{"id":"e111125c-d30c-4c2c-8343-c6a45c1a7240","block_type":"box","text":"leverage it has under any one hybrid instrument t","page_number":100,"box":{"x":117,"y":723,"width":356,"height":12}},{"id":"b99630e0-43a4-446c-b598-39d2f352ec50","block_type":"box","text":"hat it buys and the leverage of the Fund’s overall","page_number":100,"box":{"x":474,"y":723,"width":352,"height":12}},{"id":"8aa88e92-be11-4827-9ba9-e54ac181303c","block_type":"box","text":"portfolio. A Fund will not invest in a hybrid instrument i","page_number":100,"box":{"x":117,"y":738,"width":390,"height":12}},{"id":"5437092b-98a9-4560-94c0-7be89e3c77e1","block_type":"box","text":"f, at the time of purchase: (i) that instrument’s","page_number":100,"box":{"x":508,"y":738,"width":330,"height":12}},{"id":"37c2a15d-bbfc-43ba-90db-58b1be34c8fc","block_type":"box","text":"“leverage ratio” exceeds 300% of the price increase","page_number":100,"box":{"x":116,"y":754,"width":375,"height":12}},{"id":"5af517e1-b2ac-4616-a8b2-946e5b7715f3","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":100,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"843b25b0-ee67-4d98-95a7-417f87fbac05","block_type":"box","text":"or other economic variable or (ii) the Fund’s “portfo","page_number":100,"box":{"x":116,"y":769,"width":369,"height":12}},{"id":"f5628d1e-17cf-462c-ad77-e45412e2092c","block_type":"box","text":"lio leverage ratio” exceeds 150%, measured at the","page_number":100,"box":{"x":486,"y":769,"width":366,"height":12}},{"id":"ad6a378f-ae3a-486a-ad97-1661552febc1","block_type":"box","text":"time of purchase. “Leverage ratio” is the expected in","page_number":100,"box":{"x":116,"y":785,"width":378,"height":12}},{"id":"abafebc0-dc6f-4f29-af09-75284c2c625e","block_type":"box","text":"crease in the value of a hybrid instrument, assuming","page_number":100,"box":{"x":496,"y":785,"width":379,"height":12}},{"id":"19ed3717-3f87-448c-a41c-b88b4a8372d1","block_type":"box","text":"a one percent price increase in the underlying commodi","page_number":100,"box":{"x":116,"y":800,"width":403,"height":12}},{"id":"76262f41-8d77-4b95-8ead-ef2ae1f8c67c","block_type":"box","text":"ty, futures contract, index or other economic","page_number":100,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"2eeb3c8a-ec86-49d6-80f0-830948bdd0f6","block_type":"box","text":"factor. In other words, for a hybrid instrument wit","page_number":100,"box":{"x":116,"y":816,"width":352,"height":12}},{"id":"0d9c8d5b-792c-4036-93dd-7a9a8c1abb24","block_type":"box","text":"h a leverage factor of 150%, a 1% gain in the underlying","page_number":100,"box":{"x":469,"y":816,"width":407,"height":12}},{"id":"e1dee017-b04d-4be4-ba58-e03cabf0df54","block_type":"box","text":"economic variable would be expected to result in a","page_number":100,"box":{"x":116,"y":831,"width":373,"height":12}},{"id":"d521258c-3093-4599-ab08-fd388ff574c2","block_type":"box","text":"1.5% gain in value for the hybrid instrument.","page_number":100,"box":{"x":491,"y":831,"width":323,"height":12}},{"id":"842040ea-bcc8-4393-a107-d30aba3b6564","block_type":"box","text":"Conversely, a hybrid instrument with a leverage fact","page_number":100,"box":{"x":117,"y":847,"width":376,"height":12}},{"id":"9cc52535-3869-434d-bcda-61f9a5db9299","block_type":"box","text":"or of 150% would suffer a 1.5% loss if the underlying","page_number":100,"box":{"x":494,"y":847,"width":387,"height":12}},{"id":"74ee55c5-5479-4020-9769-1d2c4b809556","block_type":"box","text":"economic variable lost 1% of its value. “Portfolio","page_number":100,"box":{"x":116,"y":862,"width":348,"height":10}},{"id":"10cc8aba-7a22-41a7-9441-ad0b11d9cc08","block_type":"box","text":"leverage ratio” is defined as the average (mean)","page_number":100,"box":{"x":465,"y":862,"width":359,"height":12}},{"id":"ffe34b7c-0a2d-4cb2-8e7d-b29354340e96","block_type":"box","text":"leverage ratio of all instruments in a Fund’s portfolio, we","page_number":100,"box":{"x":117,"y":878,"width":405,"height":12}},{"id":"c23ff59f-868e-431c-b206-a5ac48824464","block_type":"box","text":"ighted by the market values of such instruments","page_number":100,"box":{"x":523,"y":878,"width":353,"height":12}},{"id":"974f87a6-11f4-4ff6-8862-c1346e572e57","block_type":"box","text":"II-6","page_number":100,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"79c12907-db22-4dad-88a6-9e6a3c07dbf6","block_type":"box","text":"NM1026U-6004408-100/267","page_number":100,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"acf113e3-b496-4007-aa10-3a2f02877277","block_type":"box","text":"or, in the case of futures contracts, their notional v","page_number":101,"box":{"x":116,"y":87,"width":355,"height":11}},{"id":"3d085fed-b323-45ad-80e3-f111aba6daa4","block_type":"box","text":"values. A Fund may at times or from time to time decide","page_number":101,"box":{"x":471,"y":87,"width":412,"height":12}},{"id":"9c66cdf1-7924-4090-862a-1b7de0cb4b17","block_type":"box","text":"not to use leverage in its investments or us","page_number":101,"box":{"x":117,"y":103,"width":310,"height":12}},{"id":"528e4ed5-8ffc-48a1-8516-ddcf3cb72c96","block_type":"box","text":"e less leverage than may otherwise be allowable.","page_number":101,"box":{"x":428,"y":103,"width":363,"height":12}},{"id":"c4a4e8df-1a14-43ff-a21f-ee4d29463f52","block_type":"box","text":"Counterparty Risk.","page_number":101,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"22d0cd9e-b0c4-4a17-8cdc-c3d073fc9351","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded","page_number":101,"box":{"x":255,"y":134,"width":625,"height":12}},{"id":"5314ee25-e7f9-439e-bd94-9bf9b1b9aac4","block_type":"box","text":"futures and options, which are standard contracts, hybrid instruments are customized securities, tailor","page_number":101,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"aa8e1f90-7152-4e8a-9430-5910e03c97a7","block_type":"box","text":"made by a specific issuer. With a listed futures or options contract, an investor’s counterparty is the","page_number":101,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"8521abb8-1054-4310-acf7-bf0b27f1ff10","block_type":"box","text":"exchange clearinghouse. Exchange clearinghouses are capitalized by the exchange members and","page_number":101,"box":{"x":116,"y":180,"width":738,"height":12}},{"id":"9f88866f-5fac-4463-bda5-a3d0b35d1764","block_type":"box","text":"typically have high investment grade ratings (","page_number":101,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"2ea91373-021e-4933-994f-e76889216877","block_type":"box","text":"e.g.","page_number":101,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"dfbe8120-8f8f-4a4d-967c-27ca44aee7ad","block_type":"box","text":", ratings of AAA or AA by S&P). Therefore, the risk is","page_number":101,"box":{"x":482,"y":196,"width":396,"height":12}},{"id":"894c9430-1736-463d-b47e-7ebfefc314ed","block_type":"box","text":"small that an exchange clearinghouse might be unable to meet its obligations at maturity. However,","page_number":101,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"867dd976-7885-4c8a-b13c-9c666d0f3147","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":101,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"1ed19950-be73-4aa9-b178-c3b963c203d0","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":101,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"57def920-572b-4604-bfb0-dc8bc0f7c4ab","block_type":"box","text":"under the structured note.","page_number":101,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"d67172c7-b974-4469-9e74-49e2e9702fa4","block_type":"box","text":"Convertible Securities.","page_number":101,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"e97a4b67-15db-4708-bff4-40b857ef0058","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other","page_number":101,"box":{"x":298,"y":289,"width":554,"height":12}},{"id":"ef94b180-8680-4766-b8b6-4e58e4b7d6ab","block_type":"box","text":"security that may be converted into or exchanged for a prescribed amount of common stock or other","page_number":101,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"740d1d29-393c-4964-8082-1d4952b99ee5","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":101,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"31aca8e0-5f31-44ee-9b52-df1fc317ecf4","block_type":"box","text":"formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the","page_number":101,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"4d117a94-54de-4376-8d45-c0f521cf6ba8","block_type":"box","text":"dividend paid on preferred stock until the convertible security matures or is redeemed, converted or","page_number":101,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"38c0f4c8-d7ce-4774-8165-297337530484","block_type":"box","text":"exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible","page_number":101,"box":{"x":116,"y":366,"width":738,"height":12}},{"id":"675bb72f-ae79-468e-835a-1a51ed0bdc45","block_type":"box","text":"income securities in that they ordinarily provide a stable stream of income with generally higher yields","page_number":101,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"f1661ed8-cd27-4ffa-9110-ba71fed1faa8","block_type":"box","text":"than those of common stocks of the same or similar issuers, but lower yields than comparable","page_number":101,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"feee61eb-b0bb-46ea-a85e-01d2163359d4","block_type":"box","text":"nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":101,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"b7870866-36af-47e1-ac3d-babda32f51be","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The","page_number":101,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"e18efda7-94bc-4740-ab4e-9aac638cb32a","block_type":"box","text":"credit standing of the issuer and other factors also may have an effect on the convertible security’s","page_number":101,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"b6c2dc09-cfd7-4609-b22e-a3e54862f594","block_type":"box","text":"investment value. Convertible securities rank senior to common stock in a corporation’s capital","page_number":101,"box":{"x":117,"y":459,"width":706,"height":12}},{"id":"64827bd7-e78f-4217-8c5c-42ff7b75fc2c","block_type":"box","text":"structure but are usually subordinated to comparable nonconvertible securities. Convertible securities","page_number":101,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"3e77a2c0-8f5c-41c3-a42d-8c0536e9c248","block_type":"box","text":"may be subject to redemption at the option of the issuer at a price established in the convertible","page_number":101,"box":{"x":117,"y":490,"width":714,"height":12}},{"id":"931c0788-b6de-46d2-a24e-05ff159620d9","block_type":"box","text":"security’s governing instrument.","page_number":101,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"af6e7c4c-11d7-4ce2-baa7-6d3061e95521","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an","page_number":101,"box":{"x":116,"y":537,"width":710,"height":12}},{"id":"da90deba-771e-46d7-b025-8b9ce9b3ee38","block_type":"box","text":"investment company seeking a high total return from capital appreciation and investment income.","page_number":101,"box":{"x":117,"y":552,"width":727,"height":12}},{"id":"00e6ee1b-f0d9-4290-beb8-5731b4a76fe0","block_type":"box","text":"These characteristics include the potential for capital appreciation as the value of the underlying","page_number":101,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"96f807c8-d378-429b-83a3-729c0ff40afd","block_type":"box","text":"common stock increases, the relatively high yield received from dividend or interest payments as","page_number":101,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"b045eb9f-f72f-496e-8684-18e2f8e62b15","block_type":"box","text":"compared to common stock dividends and decreased risks of decline in value relative to the underlying","page_number":101,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"5be6480d-bce3-4621-b2cc-966738f52478","block_type":"box","text":"common stock due to their fixed-income nature. As a result of the conversion feature, however, the","page_number":101,"box":{"x":116,"y":614,"width":739,"height":11}},{"id":"6a68e526-d153-4ba9-bc9b-6289f1a1a883","block_type":"box","text":"interest rate or dividend preference on a convertible security is generally less than would be the case if","page_number":101,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"6633c57c-29de-43ae-98f1-686401d12935","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":101,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"0e4a829b-fd61-47af-bb28-6a89a8910f3e","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security","page_number":101,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"bb581e75-445e-4b54-94de-98495b969cb2","block_type":"box","text":"relative to its credit quality and the potential capital appreciation that is offered by the underlying","page_number":101,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"c01cf634-fe80-4164-9621-39a6536f5ba1","block_type":"box","text":"common stock, among other things.","page_number":101,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"e636304c-09a6-4720-a2ff-a420dd992a17","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":101,"box":{"x":117,"y":738,"width":758,"height":10}},{"id":"b74ea963-92be-4125-ab7a-70c2499df986","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the","page_number":101,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"309e4d35-d4e7-46a5-b609-a82e9e33918b","block_type":"box","text":"underlying equity securities may be quoted in the currency of the country where the issuer is domiciled.","page_number":101,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"5e6af1aa-26c8-41f8-8ce1-0d812829216d","block_type":"box","text":"As a result, fluctuations in the exchange rate between the currency in which the debt security is","page_number":101,"box":{"x":116,"y":785,"width":707,"height":12}},{"id":"c97abf8a-f493-4ec5-95a9-6d01dcbc6842","block_type":"box","text":"denominated and the currency in which the share price is quoted will affect the value of the convertible","page_number":101,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"e3a70228-8d8e-4ea4-b7a1-49ec586bc144","block_type":"box","text":"security. With respect to convertible securities denominated in a currency different from that of the","page_number":101,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"3e86d412-7183-47e7-aa15-f372ab6d958e","block_type":"box","text":"underlying equity securities, the conversion price may be based on a fixed exchange rate established","page_number":101,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"90cd0f88-980a-4453-ba8b-f30cbe172b18","block_type":"box","text":"at the time the security is issued, which may increase the effects of currency risk. As described below,","page_number":101,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"4d1d9446-dc99-44b4-ae1d-11f2e5f6c63c","block_type":"box","text":"a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to reduce","page_number":101,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"8a19858e-c98a-4c49-935b-bca3d4c13e1d","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":101,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"7ea5233a-8de1-4328-adf3-6c17d93b955f","block_type":"box","text":"II-7","page_number":101,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"b1504f2a-f145-4248-bb94-962aafa07d0d","block_type":"box","text":"NM1026U-6004408-101/267","page_number":101,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"226b5312-0bb1-4460-97ea-cadc89c8d844","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield","page_number":102,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"5f5daa67-db06-4a84-a4ea-a795d60f0e4e","block_type":"box","text":"on nonconvertible securities of comparable issuers and by the value of the underlying common stock.","page_number":102,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"78a296fc-c3b3-4a4d-b0e4-9e6e9cada5e6","block_type":"box","text":"The value of a convertible security viewed without regard to its conversion feature (","page_number":102,"box":{"x":116,"y":118,"width":617,"height":12}},{"id":"ea19bfc0-3ccb-4593-aeae-8884f3923fde","block_type":"box","text":"i.e.","page_number":102,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"db221b77-ef4d-445d-9f55-48e9e15f91b5","block_type":"box","text":", strictly on the","page_number":102,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"58f9d738-fc19-4028-8b34-860bfdc7af0b","block_type":"box","text":"basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates","page_number":102,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"3d70e9fa-4cc7-4d9c-ab8c-70fc41ccecd4","block_type":"box","text":"change, the investment value of the convertible security typically will fluctuate. At the same time,","page_number":102,"box":{"x":116,"y":149,"width":720,"height":12}},{"id":"59e740da-2ed9-44fd-9a74-657e828c8dd0","block_type":"box","text":"however, the value of the convertible security will be influenced by its “conversion value,” which is the","page_number":102,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"5e2e01a2-9b71-4bda-a4cb-ccf32f8fbced","block_type":"box","text":"market value of the underlying common stock that would be obtained if the convertible security were","page_number":102,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"cbc7eb5c-cd34-4a74-b4f3-9ca20dcc1483","block_type":"box","text":"converted. Conversion value fluctuates directly with the price of the underlying common stock. If the","page_number":102,"box":{"x":116,"y":196,"width":746,"height":12}},{"id":"5297bf69-5368-453d-b5c3-5f97213ebb16","block_type":"box","text":"conversion value of a convertible security is substantially below its investment value, the price of the","page_number":102,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"eea35f63-821f-410f-b853-527e945222ea","block_type":"box","text":"convertible security is governed principally by its investment value. To the extent the conversion value","page_number":102,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"3811027e-574d-4eee-b33e-c95fd5d395f4","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the","page_number":102,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"ddb0a907-24e6-4fe7-99f2-00169492db8f","block_type":"box","text":"price of the convertible security will be influenced principally by its conversion value. A convertible","page_number":102,"box":{"x":117,"y":258,"width":729,"height":12}},{"id":"c8323981-f924-4667-b984-4b21974a38ee","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":102,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"ec47a5ac-0386-4121-82ba-af770dd14c09","block_type":"box","text":"to acquire the underlying common stock while holding a fixed-income security. The yield and","page_number":102,"box":{"x":116,"y":289,"width":691,"height":12}},{"id":"0d14cc24-8877-40c3-8ca0-da1d81bf40a3","block_type":"box","text":"conversion premium of convertible securities issued in Japan and the Euromarket are frequently","page_number":102,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"8d95a18d-11ec-4d56-ac90-dd0732de4897","block_type":"box","text":"determined at levels that cause the conversion value to affect their market value more than the","page_number":102,"box":{"x":116,"y":320,"width":708,"height":9}},{"id":"bbe7d93e-b0f9-41c9-8377-1a3f642be238","block_type":"box","text":"securities’ investment value.","page_number":102,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"3ccdcb21-65f8-4c04-bbd5-0f384f70bdc9","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":102,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"44f4b181-ae55-4f46-afb0-ce58f76b55bf","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible","page_number":102,"box":{"x":116,"y":378,"width":713,"height":12}},{"id":"0f6a6f58-0d9e-45d4-b94b-28f9544742ff","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":102,"box":{"x":116,"y":393,"width":734,"height":12}},{"id":"92951f34-85bf-49de-95b7-d775e6386b07","block_type":"box","text":"provision, indenture or other governing instrument pursuant to which the convertible security was","page_number":102,"box":{"x":117,"y":409,"width":723,"height":12}},{"id":"281592e7-9623-4442-815c-c45e795f9ac0","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":102,"box":{"x":117,"y":424,"width":741,"height":12}},{"id":"481cadec-348d-4799-ba4e-ba2416739064","block_type":"box","text":"redeem the security, convert it into the underlying common stock or sell it to a third party. Certain","page_number":102,"box":{"x":117,"y":440,"width":723,"height":12}},{"id":"831e32e0-ded0-4240-b57f-50ec4d378489","block_type":"box","text":"convertible debt securities may provide a put option to the holder, which entitles the holder to cause","page_number":102,"box":{"x":116,"y":455,"width":745,"height":12}},{"id":"012f4f51-b370-4f73-81b2-ef68b56d9bc7","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":102,"box":{"x":116,"y":471,"width":745,"height":12}},{"id":"2fa9ee6c-e563-484c-baac-c4b3e12a2a38","block_type":"box","text":"security under certain circumstances.","page_number":102,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"d8838c76-3564-47ac-8155-33f2da184993","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include","page_number":102,"box":{"x":116,"y":513,"width":765,"height":12}},{"id":"04a015e9-e08d-4bc9-8734-13ab132c4a49","block_type":"box","text":"either Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are","page_number":102,"box":{"x":116,"y":529,"width":717,"height":9}},{"id":"5c87a2dd-0c22-4db2-988e-dca13d5e3955","block_type":"box","text":"instruments that are created by the issuer and have the economic characteristics of traditional","page_number":102,"box":{"x":117,"y":544,"width":701,"height":12}},{"id":"85746e2f-3180-4260-bd6c-edea554ede45","block_type":"box","text":"convertible securities but may not actually permit conversion into the underlying equity securities in all","page_number":102,"box":{"x":116,"y":560,"width":760,"height":12}},{"id":"2bd96e84-b6a2-43f7-82cf-78d23c5e32c8","block_type":"box","text":"circumstances. As an example, a private company may issue a Cash-Settled Convertible that is","page_number":102,"box":{"x":116,"y":575,"width":715,"height":12}},{"id":"480e15a1-c14f-449c-9d5f-ca890e7d5879","block_type":"box","text":"convertible into common stock only if the company successfully completes a public offering of its","page_number":102,"box":{"x":116,"y":591,"width":721,"height":12}},{"id":"6e3faaf8-d6f4-44fc-b388-1d96793cd56b","block_type":"box","text":"common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation.","page_number":102,"box":{"x":116,"y":606,"width":751,"height":12}},{"id":"ef9d0a21-a286-4b4c-b45a-32ba0d56952e","block_type":"box","text":"“Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":102,"box":{"x":116,"y":622,"width":726,"height":12}},{"id":"59c46b7a-f732-40b9-8de2-c1396ce1aedf","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":102,"box":{"x":116,"y":637,"width":651,"height":12}},{"id":"67c22596-7b4c-4c23-a261-a04acc5e52b1","block_type":"box","text":"i.e.","page_number":102,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"95b17c3b-bbff-459c-93cd-afb95ff542f8","block_type":"box","text":", fixed","page_number":102,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"b623bb42-f6f8-4a41-9faf-3d52e86bcc3f","block_type":"box","text":"income (“fixed-income component”) or a right to acquire equity securities (“convertibility component”).","page_number":102,"box":{"x":117,"y":653,"width":756,"height":12}},{"id":"e179f644-e6ed-48a9-acc6-e2fbb699354d","block_type":"box","text":"The fixed-income component is achieved by investing in nonconvertible fixed-income securities, such","page_number":102,"box":{"x":116,"y":668,"width":751,"height":12}},{"id":"26391df6-3086-4512-a2b6-19c528a09dfd","block_type":"box","text":"as nonconvertible bonds, preferred stocks and money market instruments. The convertibility","page_number":102,"box":{"x":116,"y":684,"width":684,"height":12}},{"id":"ca317aa7-994e-40d4-9b42-fbd8cfe06c78","block_type":"box","text":"component is achieved by investing in call options, warrants, or other securities with equity conversion","page_number":102,"box":{"x":116,"y":700,"width":758,"height":12}},{"id":"b02f3ded-88ab-4a7f-b473-a86394bc8a2d","block_type":"box","text":"features (“equity features”) granting the holder the right to purchase a specified quantity of the","page_number":102,"box":{"x":116,"y":715,"width":697,"height":12}},{"id":"c97b118a-f90e-4b40-993e-0822d3aae76b","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":102,"box":{"x":117,"y":730,"width":745,"height":13}},{"id":"bcae7719-48bb-4303-8aa9-fc4d5fd7dd7a","block_type":"box","text":"option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":102,"box":{"x":116,"y":746,"width":685,"height":12}},{"id":"22fd76e3-c2b4-48db-8a59-745f219d2624","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a","page_number":102,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"6825cc1e-02b3-4c8a-a556-463b258a3f89","block_type":"box","text":"traditional convertible security, which is a single security that has a unitary market value, a","page_number":102,"box":{"x":116,"y":789,"width":669,"height":12}},{"id":"4254a506-b9c6-4a04-915c-8517b065c105","block_type":"box","text":"Manufactured Convertible is comprised of two or more separate securities, each with its own market","page_number":102,"box":{"x":117,"y":804,"width":742,"height":12}},{"id":"6d419701-013f-4db1-aeb2-badb63ff9360","block_type":"box","text":"value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values","page_number":102,"box":{"x":116,"y":820,"width":755,"height":11}},{"id":"c73352e2-e5af-45a5-9099-8704973ef1db","block_type":"box","text":"of its fixed-income component and its convertibility component.","page_number":102,"box":{"x":116,"y":835,"width":472,"height":12}},{"id":"113e5244-a5e3-4136-86e1-f9a791b8ecdf","block_type":"box","text":"More flexibility is possible in the creation of a Manufact","page_number":102,"box":{"x":117,"y":862,"width":382,"height":12}},{"id":"0132bc75-cd4a-4e06-ac3e-9f05352b0d04","block_type":"box","text":"ctured Convertible than in the purchase of a traditional","page_number":102,"box":{"x":499,"y":862,"width":382,"height":12}},{"id":"6295d05e-5919-449a-9b0e-a2653224bd97","block_type":"box","text":"convertible security. Because many corporations hav","page_number":102,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"0f5e94ae-492c-40e6-be64-4c3d0b339bc5","block_type":"box","text":"e not issued convertible securities, the Manager may","page_number":102,"box":{"x":493,"y":878,"width":380,"height":12}},{"id":"ed665108-1a8e-4f26-bb3e-b200ffe7a4b6","block_type":"box","text":"II-8","page_number":102,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"d3e62c40-736b-45a2-b8f8-1d744abebd2e","block_type":"box","text":"NM1026U-6004408-102/267","page_number":102,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d99a2a5d-20a9-44c1-b047-a02966ae7620","block_type":"box","text":"combine a fixed-income instrument and an equity feature wit","page_number":103,"box":{"x":116,"y":87,"width":429,"height":12}},{"id":"d81765ea-6923-4e5c-b898-6b8a56cf1901","block_type":"box","text":"h respect to the stock of the issuer of the fixed","page_number":103,"box":{"x":546,"y":87,"width":332,"height":12}},{"id":"331a6cc5-19c7-4a74-a70f-f1a97e507e31","block_type":"box","text":"income instrument to create a synthetic converti","page_number":103,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"cf804c31-d4b6-4a92-bf06-607328630380","block_type":"box","text":"ble security otherwise unavailable in the market. The","page_number":103,"box":{"x":457,"y":103,"width":378,"height":12}},{"id":"9c41fbb1-f5f4-42ee-a545-b3eb36e45737","block_type":"box","text":"Manager may also combine a fixed-income instrument of","page_number":103,"box":{"x":117,"y":118,"width":405,"height":12}},{"id":"c6166e21-129b-41e7-a2e0-2966c487447b","block_type":"box","text":"f an issuer with an equity feature with respect to the","page_number":103,"box":{"x":521,"y":118,"width":366,"height":12}},{"id":"7f92a8e3-8dc4-42bc-b87f-faf47a8195e8","block_type":"box","text":"stock of a different issuer when the Manager belie","page_number":103,"box":{"x":116,"y":134,"width":354,"height":12}},{"id":"05700a2c-abe7-4791-844b-20c06ba3e1ff","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":103,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"6e381e16-9761-43a3-bff6-4c4824cecece","block_type":"box","text":"promote a Fund’s objective than alternative investment","page_number":103,"box":{"x":117,"y":149,"width":389,"height":12}},{"id":"d73e3146-a957-4842-9d2e-ad66a06b203c","block_type":"box","text":"s. For example, the Manager may combine an equity","page_number":103,"box":{"x":506,"y":149,"width":381,"height":12}},{"id":"691d3bf4-8799-41d9-9f23-d3c39a13e560","block_type":"box","text":"feature with respect to an issuer’s stock with a fixed-in","page_number":103,"box":{"x":116,"y":165,"width":383,"height":11}},{"id":"112bbd91-cdd5-49c8-87a4-886072904c45","block_type":"box","text":"come security of a different issuer in the same","page_number":103,"box":{"x":500,"y":165,"width":332,"height":12}},{"id":"fff166e0-1f3b-495d-864d-ef8d6f851670","block_type":"box","text":"industry to diversify the Fund’s credit exposure, or","page_number":103,"box":{"x":117,"y":180,"width":353,"height":12}},{"id":"e92b757b-4da4-44b0-b8ac-696496278453","block_type":"box","text":"r with a U.S. Treasury instrument to create a","page_number":103,"box":{"x":470,"y":180,"width":315,"height":12}},{"id":"94a0ae06-76d3-430e-a0b0-362fd32e3d30","block_type":"box","text":"Manufactured Convertible with a higher credit profile t","page_number":103,"box":{"x":117,"y":196,"width":379,"height":12}},{"id":"d7c6729b-073b-4f59-93e3-332293a2e3c4","block_type":"box","text":"han a traditional convertible security issued by that","page_number":103,"box":{"x":497,"y":196,"width":363,"height":12}},{"id":"84694e4b-5474-4ff4-abf7-a85c28cab641","block_type":"box","text":"issuer. A Manufactured Convertible also is a more fl","page_number":103,"box":{"x":117,"y":211,"width":366,"height":10}},{"id":"596044d9-0d94-42c8-8953-e7f3fbc53654","block_type":"box","text":"exible investment in that its two components may be","page_number":103,"box":{"x":484,"y":211,"width":377,"height":12}},{"id":"d3d148d8-d300-48b3-addb-6c63cd9ad328","block_type":"box","text":"purchased separately and, upon purchasi","page_number":103,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"f37501fe-21f9-4cad-af50-550a32a8b2cc","block_type":"box","text":"ng the separate securities, “combined” to create a Manufactured","page_number":103,"box":{"x":412,"y":227,"width":461,"height":12}},{"id":"f3a57aaa-6f09-4baa-b6e6-540aaf37ac55","block_type":"box","text":"Convertible. For example, the Fund may purchase a w","page_number":103,"box":{"x":117,"y":242,"width":375,"height":12}},{"id":"bc3ef648-f756-43db-a8bc-d71e40d822a9","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":103,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"08b613b5-de15-42de-8e27-afd7f883aa8d","block_type":"box","text":"Convertible while postponing the purchase of a su","page_number":103,"box":{"x":117,"y":258,"width":354,"height":12}},{"id":"b10d9971-88c4-4f61-8cec-de91e0a4351a","block_type":"box","text":"itable bond to pair with the warrant pending development","page_number":103,"box":{"x":473,"y":258,"width":407,"height":12}},{"id":"1239f2e2-40e9-44d2-b3e6-99450b9fa453","block_type":"box","text":"of more favorable market conditions.","page_number":103,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"f3e8b8b6-da54-4cbc-8d4c-5cf5ad511c23","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a","page_number":103,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"7163aae5-b20d-46a2-9934-c6090d7ec54a","block_type":"box","text":"traditional convertible security with similar characteristics. For example, in the event a Fund created a","page_number":103,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"afbdb8e8-478b-43a1-88c2-c848b5d59a07","block_type":"box","text":"Manufactured Convertible by combining a short-term U.S. Treasury instrument and a call option on a","page_number":103,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"c5a5e554-7116-4554-9ae9-6815dcad153d","block_type":"box","text":"stock, the Manufactured Convertible would be expected to outperform a traditional convertible of","page_number":103,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"697d488f-79a5-409a-960b-660d19923c3d","block_type":"box","text":"similar maturity that is convertible into that stock during periods when Treasury instruments outperform","page_number":103,"box":{"x":116,"y":366,"width":767,"height":12}},{"id":"49902bf8-6a5c-42de-85c6-95946930aff1","block_type":"box","text":"corporate fixed-income securities and underperform during periods when corporate fixed-income","page_number":103,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"70cf97c4-e13f-49a1-9dcd-e4b4c29a18f3","block_type":"box","text":"securities outperform Treasury instruments.","page_number":103,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"45201167-48f7-45ba-84b6-d481d185ce5f","block_type":"box","text":"Corporate Loans.","page_number":103,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"087229c7-e144-40bc-8eec-f3a495e472e3","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally","page_number":103,"box":{"x":255,"y":428,"width":570,"height":12}},{"id":"28a992f6-8527-42a9-b1a9-1dc6c78505ff","block_type":"box","text":"non-investment grade floating rate instruments. Usually, they are freely callable at the issuer’s option.","page_number":103,"box":{"x":117,"y":444,"width":757,"height":12}},{"id":"7b01a69d-d9c4-48b9-abb3-0f5ad2fa1b11","block_type":"box","text":"Certain Funds may invest in fixed and floating rate loans (“Loans”) arranged through private","page_number":103,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"8b98100e-a3ef-4ced-85a2-f5a6cc3d2414","block_type":"box","text":"negotiations between a corporate borrower or a foreign sovereign entity and one or more financial","page_number":103,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"50f7147b-caa8-4329-886c-001c5e3bdc7b","block_type":"box","text":"institutions or institutional investors (“Lenders”). A Fund may invest in such Loans in the form of","page_number":103,"box":{"x":117,"y":490,"width":712,"height":12}},{"id":"1d48752e-abd6-43bb-8fec-2e5810967d1a","block_type":"box","text":"participations in Loans (“Participations”) and assignments of all or a portion of Loans from third parties","page_number":103,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"70478101-2c8c-4876-b79b-d21f70c02ee6","block_type":"box","text":"(“Assignments”). A Fund considers these investments to be investments in debt securities for purposes","page_number":103,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"1fd90524-13ee-4f49-aad8-3f2bda6b08dc","block_type":"box","text":"of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":103,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"4e375d96-237b-4bbc-a15b-80f1f32e8087","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of","page_number":103,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"1c250482-19b5-44e9-8c29-a057047216fb","block_type":"box","text":"principal, interest and any fees to which it is entitled only from the Lender selling the Participation and","page_number":103,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"ad5a699b-bca8-4cd8-ba01-4570aa3c6fe1","block_type":"box","text":"only upon receipt by the Lender of the payments from the borrower. In connection with purchasing","page_number":103,"box":{"x":116,"y":583,"width":734,"height":12}},{"id":"5fbbdc59-577d-415d-b6cf-1962dfd72ab5","block_type":"box","text":"Participations, the Fund generally will have no right to enforce compliance by the borrower with the","page_number":103,"box":{"x":117,"y":599,"width":737,"height":12}},{"id":"669867d1-c688-4e21-9fff-f70ed05c0567","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":103,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"1b8142ee-3d4c-4d7d-8eb2-37083a3ce54c","block_type":"box","text":"the Fund may not benefit directly from any collateral supporting the Loan in which it has purchased the","page_number":103,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"0cb77c0f-4d87-4043-8135-fca2fc1a67bd","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":103,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"31d9521e-bb9f-4c3b-9de6-061349489e48","block_type":"box","text":"is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the","page_number":103,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"4361616a-51b2-4f6b-987e-af0860d3be5d","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":103,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"690cb90f-5022-4215-bb49-d9fae866bfd1","block_type":"box","text":"the Lender and the borrower. The Fund will acquire Participations only if the Lender interpositioned","page_number":103,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"2677ac35-c687-449f-af45-b78158302490","block_type":"box","text":"between the Fund and the borrower is determined by the Fund’s manager to be creditworthy. When","page_number":103,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"1d232a93-1800-402e-8ff8-a265a8c7aa38","block_type":"box","text":"the Fund purchases Assignments from Lenders, the Fund will acquire direct rights against the borrower","page_number":103,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"d35b9cbd-0538-4e1f-a7f2-b2ffc7b0d35c","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":103,"box":{"x":116,"y":738,"width":718,"height":12}},{"id":"ffc779cd-86aa-46c5-9859-b7a2949e0315","block_type":"box","text":"Participations and Assignments on a forward commitment or “when-issued” basis, whereby a Fund","page_number":103,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"90ff34fc-d619-438d-8bd1-908e58c11daf","block_type":"box","text":"would agree to purchase a Participation or Assignment at set terms in the future. For more information","page_number":103,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"90f70359-3521-4b8c-a7c4-d95cff286793","block_type":"box","text":"on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":103,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"18956127-37e6-482c-9888-09a59ffc312f","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":103,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"0ff5815b-4c74-400f-a53f-f8f35bd823ea","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market","page_number":103,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"aaffed69-159f-4a38-82e6-9af1d2488881","block_type":"box","text":"for such instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases","page_number":103,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"dfed2f36-2fcd-42f9-9a9e-e0a5923657b1","block_type":"box","text":"such instruments could be sold only to a limited number of institutional investors. The lack of a","page_number":103,"box":{"x":116,"y":862,"width":704,"height":12}},{"id":"c462f311-6a35-41bb-aca2-89e8a2450f2c","block_type":"box","text":"sufficiently liquid secondary market may have an adverse impact on the value of such instruments and","page_number":103,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"619a406e-6ecf-47ca-af91-cd28a1c01ba8","block_type":"box","text":"II-9","page_number":103,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"128c5f1e-b6b6-4f1c-bcbe-e74ae94eff26","block_type":"box","text":"NM1026U-6004408-103/267","page_number":103,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"318a8228-3d04-42a9-a336-638e9bbb38dc","block_type":"box","text":"on the Fund’s ability to dispose of particular Assignments or Participations in response to a specific","page_number":104,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"c43c4243-7dbf-40f1-832a-e43eb5c27e90","block_type":"box","text":"economic event, such as deterioration in the creditworthiness of the borrower.","page_number":104,"box":{"x":116,"y":102,"width":583,"height":12}},{"id":"21eb4973-123d-42cf-9719-180067d4d97d","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as","page_number":104,"box":{"x":117,"y":132,"width":768,"height":12}},{"id":"c5b1e43b-d1aa-475b-aee3-961a9719df13","block_type":"box","text":"a syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of","page_number":104,"box":{"x":116,"y":147,"width":720,"height":12}},{"id":"a201e45f-6fc4-4734-8267-05d65cbf63bd","block_type":"box","text":"principal and interest. Failure by the syndicate agent to fulfill its obligations may delay or adversely","page_number":104,"box":{"x":117,"y":163,"width":734,"height":12}},{"id":"ed91a80f-0ce9-4ca6-95b1-a3acacaba86d","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":104,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"59f903f9-7cc4-43f3-b791-16ee7c20fb2b","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":104,"box":{"x":116,"y":207,"width":706,"height":12}},{"id":"7607d75e-e0a0-4f59-a17b-eb83be3b7389","block_type":"box","text":"Although borrowers frequently provide collateral to secure repayment of these obligations they do not","page_number":104,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"97e139ac-a6a1-478f-8d3d-58a6b558ee2a","block_type":"box","text":"always do so. If they do provide collateral, the value of the collateral may not completely cover the","page_number":104,"box":{"x":116,"y":238,"width":732,"height":12}},{"id":"c402e51c-889d-40cf-a1f0-038c2f35968d","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":104,"box":{"x":117,"y":254,"width":757,"height":12}},{"id":"344acf9d-4445-4866-b9cb-b59e04507ca1","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":104,"box":{"x":116,"y":269,"width":761,"height":12}},{"id":"d1bb3463-ede2-4589-bc93-68540d26abf9","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":104,"box":{"x":116,"y":285,"width":762,"height":12}},{"id":"e144b052-4156-4b78-8ac9-059a3450a2f5","block_type":"box","text":"not recover its principal, may experience a long delay in recovering its investment and may not receive","page_number":104,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"51bca975-0851-4527-a9a4-8d4a27e5e663","block_type":"box","text":"interest during the delay.","page_number":104,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"fd52410e-9cbb-4649-a36e-cfba0d773c11","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale","page_number":104,"box":{"x":116,"y":345,"width":763,"height":12}},{"id":"f08700de-e82a-4d49-91a0-30b492c1609b","block_type":"box","text":"of corporate loans may not be readily available to make additional investments or to meet a Fund’s","page_number":104,"box":{"x":116,"y":360,"width":738,"height":12}},{"id":"922fb203-bbcb-49c8-a4d7-647b96bec54a","block_type":"box","text":"redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity","page_number":104,"box":{"x":117,"y":376,"width":765,"height":12}},{"id":"5ee63c71-46d3-4dcb-9dea-9264e4f6ce0a","block_type":"box","text":"needs, a Fund may hold additional cash, sell investments or temporarily borrow from banks and other","page_number":104,"box":{"x":117,"y":391,"width":758,"height":12}},{"id":"16c3bd39-07bb-4f2d-8f50-707e9069a3d4","block_type":"box","text":"lenders.","page_number":104,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"198ffef3-c1b3-4203-bc7b-3868cf2e3daf","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities","page_number":104,"box":{"x":117,"y":436,"width":746,"height":12}},{"id":"25b77fd3-fbbf-4e75-96b5-e057bd37dbab","block_type":"box","text":"laws. Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and","page_number":104,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"06e7fbe4-72d3-495b-b380-ccf42fa961a9","block_type":"box","text":"purchasers of interests in Loans, such as the Funds, may not have the protection of the anti-fraud","page_number":104,"box":{"x":117,"y":467,"width":729,"height":12}},{"id":"e5cb33dc-653c-414a-9f16-aa5ab9f013d7","block_type":"box","text":"provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead,","page_number":104,"box":{"x":117,"y":482,"width":755,"height":12}},{"id":"0ad2d179-05dd-426d-b10f-502e74634049","block_type":"box","text":"in such cases, parties generally would rely on the contractual provisions in the Loan agreement itself","page_number":104,"box":{"x":117,"y":498,"width":750,"height":12}},{"id":"6332f81b-3ac3-4a0c-af14-8505de576696","block_type":"box","text":"and common-law fraud protections under applicable state law.","page_number":104,"box":{"x":116,"y":513,"width":467,"height":12}},{"id":"47c99111-dd98-440f-9e36-19b393f425b8","block_type":"box","text":"Direct Lending.","page_number":104,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"0fd47962-42a7-49cf-8efe-728b9db36ffb","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct","page_number":104,"box":{"x":226,"y":542,"width":641,"height":13}},{"id":"22792a03-fe26-4b25-9c7d-ec828f0bf357","block_type":"box","text":"loans between the Fund and a borrower may not be adm","page_number":104,"box":{"x":117,"y":558,"width":412,"height":12}},{"id":"2c758a08-1f45-49f9-9030-c4b43658c41d","block_type":"box","text":"inistered by an underwriter or agent bank. The","page_number":104,"box":{"x":531,"y":558,"width":340,"height":12}},{"id":"743b1792-a05f-4b61-8f48-23d7fcfa2fde","block_type":"box","text":"Fund may provide financing to commercial borrowers di","page_number":104,"box":{"x":117,"y":573,"width":402,"height":13}},{"id":"38cdcc62-ac8f-4817-ba7b-c41641e9abf8","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":104,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"f7f3f892-030e-4a92-a57a-7ff43b68e2ca","block_type":"box","text":"and owned by or otherwise affiliat","page_number":104,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"ee96fb30-facd-449f-87c1-976b6667a85b","block_type":"box","text":"ed with the Fund. The terms of the","page_number":104,"box":{"x":360,"y":589,"width":255,"height":9}},{"id":"9fe736f7-0a72-4cb6-b660-04489824d1f3","block_type":"box","text":"direct loans are negotiated with","page_number":104,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"fc1558e2-8fcb-4202-880a-d93e4c721c14","block_type":"box","text":"borrowers in private transactions. Furthermore, a direct loan may be secured or unsecured.","page_number":104,"box":{"x":117,"y":605,"width":667,"height":12}},{"id":"91c01b16-2ddf-4e5a-af3b-1bbc768542c5","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of","page_number":104,"box":{"x":117,"y":634,"width":755,"height":12}},{"id":"426a3624-4984-47b3-8b1c-afb14435d29d","block_type":"box","text":"the borrower and/or any collateral for payment of interest and repayment of principal. The risks","page_number":104,"box":{"x":116,"y":649,"width":708,"height":12}},{"id":"107d65f3-1ec9-4499-8697-4e7c55bdb64e","block_type":"box","text":"associated with direct loans are substantially similar to those associated with investing in corporate","page_number":104,"box":{"x":116,"y":665,"width":733,"height":12}},{"id":"b420a8f4-bb39-4f77-9b84-3d2a481db910","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":104,"box":{"x":117,"y":680,"width":764,"height":12}},{"id":"c58afbb2-d0e2-423c-a0e6-6dac8bb4cb82","block_type":"box","text":"insolvent and, consequently, that the Fund will lose money on the loan. Furthermore, direct loans may","page_number":104,"box":{"x":117,"y":696,"width":755,"height":12}},{"id":"36fffcc4-872d-4f61-8364-6fb6cbc4690a","block_type":"box","text":"subject the Fund to liquidity and interest rate risk and certain direct loans may be deemed illiquid.","page_number":104,"box":{"x":116,"y":711,"width":720,"height":12}},{"id":"b7288f9c-1c32-4731-b37e-565f346e1904","block_type":"box","text":"Direct loans are not publicly traded and may not have a secondary market. The lack of a secondary","page_number":104,"box":{"x":117,"y":727,"width":737,"height":12}},{"id":"5148bf48-3fdf-43aa-8234-1016177aa171","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":104,"box":{"x":117,"y":742,"width":734,"height":12}},{"id":"e1284eec-7bc0-4646-ae98-a554326d42c4","block_type":"box","text":"loan and/or to value the direct loan.","page_number":104,"box":{"x":117,"y":758,"width":260,"height":9}},{"id":"3d8cf815-d032-4af1-87b3-9efb921516ac","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the","page_number":104,"box":{"x":116,"y":787,"width":731,"height":12}},{"id":"85f976ae-6765-4c5b-8346-9dd4c4e554fc","block_type":"box","text":"Fund to originate loans on advantageous terms. In originating loans, the Fund will compete with a","page_number":104,"box":{"x":117,"y":802,"width":722,"height":12}},{"id":"82688ff2-aaa0-43c6-9d6f-0250ead3d71a","block_type":"box","text":"broad spectrum of lenders. Increased competition for, or a diminishment in the available supply of,","page_number":104,"box":{"x":117,"y":818,"width":727,"height":12}},{"id":"492d7336-ff89-4131-837e-5d0cfd42d81b","block_type":"box","text":"qualifying loans could result in lower yields on such loans, which could reduce Fund performance.","page_number":104,"box":{"x":116,"y":833,"width":730,"height":12}},{"id":"9753a608-1a3a-44ff-b5fc-ead03f70561f","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing","page_number":104,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"90836a55-d427-4903-8ebc-16cf015ce18a","block_type":"box","text":"significant financial or business difficulties, including companies involved in bankruptcy or other","page_number":104,"box":{"x":116,"y":878,"width":710,"height":12}},{"id":"08e20259-bf4c-4a44-b9d7-d04b1d433c69","block_type":"box","text":"II-10","page_number":104,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f8873a46-9fd8-4dfe-924c-e866d0fa4a04","block_type":"box","text":"NM1026U-6004408-104/267","page_number":104,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"604d58ab-5cd9-47f9-9882-e9e50566b3c9","block_type":"box","text":"reorganization and liquidation proceedings. Although the terms of such financing may result in","page_number":105,"box":{"x":117,"y":87,"width":701,"height":12}},{"id":"df7458dc-7374-4ebe-85ef-fa1fc8662ee8","block_type":"box","text":"significant financial returns to the Fund, they involve a substantial degree of risk. The level of analytical","page_number":105,"box":{"x":116,"y":102,"width":768,"height":13}},{"id":"9d9b95d1-6fc9-4abe-94ae-26583d49587e","block_type":"box","text":"sophistication, both financial and legal, necessary for successful financing to companies experiencing","page_number":105,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"cc254f59-3afd-44a1-bba4-706a0a91a720","block_type":"box","text":"significant business and financial difficulties is unusually high.","page_number":105,"box":{"x":116,"y":134,"width":461,"height":12}},{"id":"072d9f0e-e2a5-4580-ad5b-611bbea6c153","block_type":"box","text":"Credit Linked Securities.","page_number":105,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"40f6c3dc-88f3-4afd-b094-029a5724d56e","block_type":"box","text":"Among the income producing securities in which a Fund may invest are","page_number":105,"box":{"x":313,"y":162,"width":541,"height":12}},{"id":"a5f4b277-0fb4-41ec-a2ec-9094893c3e3f","block_type":"box","text":"credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests","page_number":105,"box":{"x":116,"y":178,"width":768,"height":12}},{"id":"5194a21b-3f78-4d03-a6d8-a465f9144703","block_type":"box","text":"in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate","page_number":105,"box":{"x":117,"y":193,"width":771,"height":12}},{"id":"ee13e622-4e07-42d3-a5fd-63f760eec0cd","block_type":"box","text":"swaps and other securities, in order to provide exposure to certain fixed-income markets. For instance,","page_number":105,"box":{"x":116,"y":209,"width":768,"height":12}},{"id":"4a2318e1-5b21-4a69-9976-81383f33bcfd","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":105,"box":{"x":116,"y":224,"width":765,"height":12}},{"id":"9634e0c8-1429-403a-b1f7-01d42be5c8b1","block_type":"box","text":"certain market and/or to remain fully invested when more traditional income producing securities are","page_number":105,"box":{"x":116,"y":240,"width":748,"height":12}},{"id":"60ae253f-889e-4b0b-b7f7-16a7c8c85fcf","block_type":"box","text":"not available.","page_number":105,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"94734b91-500e-4309-92cb-ca507f82aaac","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive","page_number":105,"box":{"x":117,"y":284,"width":770,"height":12}},{"id":"0de1eb4c-947a-40e1-86b9-a1194d97b79f","block_type":"box","text":"periodic income payments (in the form of distributions) and payment of principal at the end of the term","page_number":105,"box":{"x":117,"y":300,"width":761,"height":12}},{"id":"8b3fba4a-d1c4-44b1-ad28-9c31b5253970","block_type":"box","text":"of the security.","page_number":105,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"198283f4-ccc8-4398-a5b5-abfdecaf0044","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s","page_number":105,"box":{"x":117,"y":344,"width":748,"height":12}},{"id":"5bad697d-b56b-4943-bb51-5adb9e307a72","block_type":"box","text":"potential obligations to, the counterparties to the derivative instruments and other securities in which","page_number":105,"box":{"x":117,"y":359,"width":747,"height":12}},{"id":"a003c5c1-d800-45f0-a084-3c27ab6edcb9","block_type":"box","text":"the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the","page_number":105,"box":{"x":116,"y":375,"width":762,"height":12}},{"id":"c871d2d0-7eda-464f-b912-76aa354d4a47","block_type":"box","text":"issuer would receive a stream of payments over the term of the swap agreements provided that no","page_number":105,"box":{"x":117,"y":390,"width":736,"height":12}},{"id":"fa9348df-2a67-4506-b1f3-36231b55f993","block_type":"box","text":"event of default has occurred with respect to the referenced debt obligation upon which the swap is","page_number":105,"box":{"x":116,"y":406,"width":741,"height":12}},{"id":"05b26814-23f4-497c-9385-84df1aceb1eb","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":105,"box":{"x":117,"y":421,"width":756,"height":12}},{"id":"e8a435d3-cbb4-4cfc-9f99-08371b4432e8","block_type":"box","text":"the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn,","page_number":105,"box":{"x":116,"y":437,"width":749,"height":12}},{"id":"34f4562a-2a46-463b-adf4-0b906d5767d2","block_type":"box","text":"would reduce the amount of income and principal that","page_number":105,"box":{"x":116,"y":452,"width":404,"height":12}},{"id":"cd18cb93-0c59-4c49-b5cc-200a31e1fba2","block_type":"box","text":"a Fund would receive. A Fund’s investments in","page_number":105,"box":{"x":521,"y":452,"width":351,"height":10}},{"id":"c8309e4e-978d-4217-b226-c14e8682cdff","block_type":"box","text":"these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":105,"box":{"x":116,"y":468,"width":750,"height":12}},{"id":"7d188b73-c84b-4d60-8f04-1a3fdeb9c916","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk","page_number":105,"box":{"x":116,"y":483,"width":766,"height":12}},{"id":"44b67d62-531c-48dc-8069-f2fa6c1944c7","block_type":"box","text":"and management risk. It is also expected that the securities will be exempt from registration under the","page_number":105,"box":{"x":116,"y":499,"width":761,"height":12}},{"id":"16f401db-e322-423a-86d0-5eb2969d015a","block_type":"box","text":"Securities Act. Accordingly, there may be no established trading market for the securities and they may","page_number":105,"box":{"x":116,"y":514,"width":771,"height":12}},{"id":"70826850-d712-4474-b42e-1dceddac2ba8","block_type":"box","text":"constitute illiquid investments.","page_number":105,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"4f8d7525-f2c1-4a16-b20a-f17abe3f727c","block_type":"box","text":"Debt Securities.","page_number":105,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"b0f93621-d228-4612-a1e0-93041be2e1fb","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will","page_number":105,"box":{"x":243,"y":559,"width":633,"height":11}},{"id":"61bb72e0-8e25-4760-922b-33a0bd37fdd5","block_type":"box","text":"not make timely payments of principal and interest. The degree of credit risk depends on the issuer’s","page_number":105,"box":{"x":117,"y":574,"width":751,"height":12}},{"id":"1df10d0a-8f39-4c80-842c-217eea17bb1f","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":105,"box":{"x":116,"y":590,"width":749,"height":12}},{"id":"408d23d3-c271-48ca-9b18-699bc66909d6","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":105,"box":{"x":117,"y":605,"width":763,"height":12}},{"id":"98cac878-e81b-4bb2-8e1f-e29b3bbfea22","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":105,"box":{"x":116,"y":621,"width":754,"height":9}},{"id":"67ade9da-8661-4bdd-b228-7e0a7db8df39","block_type":"box","text":"Securities.","page_number":105,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"9abd7a46-2d9a-4dd6-a19a-f0cc5b35a1c1","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":105,"box":{"x":116,"y":665,"width":709,"height":12}},{"id":"febe99f4-9a2a-465f-83f8-6352492f49d6","block_type":"box","text":"security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by","page_number":105,"box":{"x":116,"y":680,"width":755,"height":12}},{"id":"3cc1800a-004c-46a2-bffd-3d4c93ea8c74","block_type":"box","text":"Fund management, a Fund’s investments in debt securities could be adversely affected and the Fund","page_number":105,"box":{"x":117,"y":696,"width":752,"height":12}},{"id":"1e9e56bb-7787-48e9-b88b-159f7cecb554","block_type":"box","text":"could lose money. In general, the market price of debt securities with longer maturities will go up or","page_number":105,"box":{"x":116,"y":711,"width":735,"height":12}},{"id":"a45ac15d-6b66-49a4-a6be-7d58ebe5bdf9","block_type":"box","text":"down more in response to changes in interest rates than will the market price of shorter-term debt","page_number":105,"box":{"x":116,"y":727,"width":725,"height":12}},{"id":"0dd4d083-10d0-4f3d-a7bf-c06c1dfdf631","block_type":"box","text":"securities.","page_number":105,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"00e725de-da49-4ff0-9c91-6934f707d3f2","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended","page_number":105,"box":{"x":117,"y":771,"width":738,"height":12}},{"id":"a894edaf-dfd1-4a21-aeae-96e6f47a593c","block_type":"box","text":"because of slower than expected principal payments. This may lock in a below-market interest rate and","page_number":105,"box":{"x":117,"y":787,"width":765,"height":12}},{"id":"c784ea34-b333-4f52-a17b-a403ff032378","block_type":"box","text":"extend the duration of these fixed-income securities, especially mortgage-related securities, making","page_number":105,"box":{"x":116,"y":802,"width":739,"height":12}},{"id":"eaa83c08-001e-49fa-8755-257d92172424","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":105,"box":{"x":116,"y":818,"width":750,"height":12}},{"id":"4271f690-233b-4fcd-8649-6b5774993b87","block_type":"box","text":"securities may exhibit additional volatility and lose value. This is known as extension risk.","page_number":105,"box":{"x":116,"y":833,"width":665,"height":12}},{"id":"21e55b48-ee66-4221-b047-2e204e2b7c34","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in","page_number":105,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"7c39dc6e-6850-4c9b-ba7b-3f25fa8c61ed","block_type":"box","text":"prevailing interest rates. Fixed-income securities with longer maturities, which tend to produce higher","page_number":105,"box":{"x":117,"y":878,"width":753,"height":11}},{"id":"847b0692-5a7f-40f1-b9b9-12ef23087ae9","block_type":"box","text":"II-11","page_number":105,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"54257741-3730-4116-afce-a27b8c2839a7","block_type":"box","text":"NM1026U-6004408-105/267","page_number":105,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c22de112-3842-4a0d-8894-c7e09caec318","block_type":"box","text":"yields, are subject to potentially greater capital appreciation and depreciation than securities with","page_number":106,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"987a5d27-05e9-4982-aa01-b09665f85340","block_type":"box","text":"shorter maturities. The Funds are not restricted to any maximum or minimum time to maturity in","page_number":106,"box":{"x":116,"y":103,"width":714,"height":12}},{"id":"7f532d98-a4b7-49f3-9b77-5369835ea7cf","block_type":"box","text":"purchasing individual portfolio securities, and the average maturity of a Fund’s assets will vary.","page_number":106,"box":{"x":117,"y":118,"width":707,"height":12}},{"id":"ec4424a3-b30c-4d30-aed0-268e378041f1","block_type":"box","text":"Floating and Variable Rate Securities","page_number":106,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"5a633b9c-e267-49d4-ab41-c64df46a0bb6","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable","page_number":106,"box":{"x":395,"y":149,"width":493,"height":12}},{"id":"d62e4f46-6f36-4457-b03a-00a323782d70","block_type":"box","text":"coupon rate. Securities with floating or variable interest rates can be less sensitive to interest rate","page_number":106,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"eb0570a6-a10e-484b-8e43-ceaf2d1e6e53","block_type":"box","text":"changes than securities with fixed interest rates, but may decline in value if their interest rates do not","page_number":106,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"143182ad-4c8e-4222-984f-9fc96ef6d96c","block_type":"box","text":"rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not","page_number":106,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"f6e3c08c-23bf-4f4a-a45b-16d65da80273","block_type":"box","text":"generally increase in value if interest rates decline. The","page_number":106,"box":{"x":116,"y":211,"width":415,"height":12}},{"id":"b16b228f-f9a5-4bbe-ab5a-1de3e21ae688","block_type":"box","text":"impact of interest rate changes on floating rate","page_number":106,"box":{"x":532,"y":211,"width":350,"height":12}},{"id":"33c723d3-3e4a-423a-bc1f-03568a91b095","block_type":"box","text":"investments is typically mitigated by the periodic interest rate reset of the investments. Benchmark","page_number":106,"box":{"x":117,"y":227,"width":733,"height":12}},{"id":"81e6c947-d022-48c8-94bd-22d6620ccc06","block_type":"box","text":"interest rates used for floating and variable rate securities may not accurately track market interest","page_number":106,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"b5d4f0f2-8038-482a-9e80-2301a4edd828","block_type":"box","text":"rates.","page_number":106,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"6c212e09-4562-4c3b-b921-be01270f0ac8","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":106,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"bc40c6d2-ac4a-45c4-95ff-68054713587c","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income","page_number":106,"box":{"x":297,"y":289,"width":577,"height":12}},{"id":"d6a3bb90-dd6a-46e6-ad87-23a7c4db2ee6","block_type":"box","text":"securities or other instruments whose principal value is periodically adjusted according to the rate of","page_number":106,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"fabbd84a-5e4a-4657-96d2-246f320ae3ec","block_type":"box","text":"inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that","page_number":106,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"07bb93b5-c963-4b91-a2f8-1e46e0cb39b0","block_type":"box","text":"accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price","page_number":106,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"6ea07e27-946e-47c4-a280-2bf0cd976bee","block_type":"box","text":"Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":106,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"cb245e12-b532-4e16-a5ad-0f338cb430a1","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years,","page_number":106,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"13238f6c-be71-4e0a-81e4-0aac7849bd01","block_type":"box","text":"although it is possible that securities with other maturities will be issued in the future. The U.S.","page_number":106,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"55f1255b-8e79-496a-9315-d7776f491c97","block_type":"box","text":"Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation","page_number":106,"box":{"x":116,"y":413,"width":738,"height":12}},{"id":"e43c45a4-b7dc-4fb7-b1c1-79aae83d47cb","block_type":"box","text":"adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par","page_number":106,"box":{"x":116,"y":428,"width":727,"height":12}},{"id":"7803dae4-9193-4491-b55f-0d77449e46c2","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":106,"box":{"x":116,"y":443,"width":753,"height":13}},{"id":"5f7c4394-6058-42d6-953a-3bf0eefe2d03","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":106,"box":{"x":116,"y":458,"width":736,"height":13}},{"id":"dced2d52-78c8-46ec-9f7e-5936147dd6dc","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":106,"box":{"x":116,"y":474,"width":766,"height":13}},{"id":"24ce55e7-3c58-4087-8f8d-29313a12ee7f","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":106,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"3a189b5d-10ab-4fd3-bde8-69f3dd914262","block_type":"box","text":"$1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":106,"box":{"x":116,"y":505,"width":689,"height":13}},{"id":"6f682f15-49c8-4b5e-a657-9f076aeb4b9d","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds","page_number":106,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"25125758-9e68-4dc4-b440-ec6fb7d333d9","block_type":"box","text":"will be adjusted downward, and, consequently, the interest payable on these securities (calculated with","page_number":106,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"de12837c-38b8-4e1e-bdb5-77a50b2a3338","block_type":"box","text":"respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon","page_number":106,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"95cbab17-5bd2-494a-8715-a9669d938f16","block_type":"box","text":"maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds,","page_number":106,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"640e7ab6-2f74-4288-b7fa-93a550e65f04","block_type":"box","text":"even during a period of deflation. However, the current market value of the bonds is not guaranteed,","page_number":106,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"ce5bf903-1824-4a00-a7bd-99eeccdd8721","block_type":"box","text":"and will fluctuate. Certain Funds may also invest in other inflation related bonds which may or may not","page_number":106,"box":{"x":116,"y":614,"width":763,"height":12}},{"id":"6fc86ff7-515e-4c9e-b9b2-b524af8b1a13","block_type":"box","text":"provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of","page_number":106,"box":{"x":117,"y":630,"width":752,"height":12}},{"id":"411a55ff-81ba-46c7-8e4e-e129058fc170","block_type":"box","text":"the bond repaid at maturity may be less than the original principal. In addition, if the Fund purchases","page_number":106,"box":{"x":116,"y":645,"width":749,"height":12}},{"id":"e76b8f0a-6c94-4e9f-b050-faf73ef10482","block_type":"box","text":"inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign inflation","page_number":106,"box":{"x":117,"y":661,"width":761,"height":12}},{"id":"ed87d9f9-a2d4-4780-8b30-c73135f1796d","block_type":"box","text":"index may not be correlated to the rate of inflation in the United States.","page_number":106,"box":{"x":117,"y":676,"width":523,"height":12}},{"id":"fc23e413-aaf4-4256-9943-8609c594d2ce","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest","page_number":106,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"818af724-a2fd-4dfe-a621-10a7a63ea420","block_type":"box","text":"rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the","page_number":106,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"ba200344-2f46-4e91-91db-c030a3e49d22","block_type":"box","text":"rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real","page_number":106,"box":{"x":117,"y":738,"width":717,"height":11}},{"id":"5955cb99-6f5e-43dd-a841-6f25e7cbfb67","block_type":"box","text":"interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if","page_number":106,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"8cf3c6e1-94fa-4097-b5f5-61a5d4dc80d8","block_type":"box","text":"nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a","page_number":106,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"599e761c-112b-4df3-95f2-9d48bf44df6f","block_type":"box","text":"decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of","page_number":106,"box":{"x":116,"y":785,"width":745,"height":11}},{"id":"e6a64b47-949c-4806-9a87-3a61441ee7dc","block_type":"box","text":"inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":106,"box":{"x":117,"y":800,"width":570,"height":12}},{"id":"7e701061-a97f-43be-8e11-d703864c87b3","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term","page_number":106,"box":{"x":116,"y":831,"width":725,"height":12}},{"id":"38aa85e8-1bf7-4bc4-b181-0578e472decf","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":106,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"bc6cbb19-cda6-4861-8559-82496dfc8a28","block_type":"box","text":"inflation (for example, due to changes in currency exchange rates), investors in these securities may","page_number":106,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"e8608bd5-b1fc-4ffd-9865-a48b55105279","block_type":"box","text":"not be protected to the extent that the increase is not reflected in the bond’s inflation measure.","page_number":106,"box":{"x":117,"y":878,"width":704,"height":12}},{"id":"b652ad21-bb6b-47ad-b9d4-f848bfd6b48e","block_type":"box","text":"II-12","page_number":106,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"8e4df048-c740-453c-bf2e-895c0fd89147","block_type":"box","text":"NM1026U-6004408-106/267","page_number":106,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9619dc9-3930-4882-94db-10873353045a","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is","page_number":107,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"8f3e5550-7f71-40f2-9f4d-fc5ded2349ad","block_type":"box","text":"the Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S.","page_number":107,"box":{"x":116,"y":102,"width":739,"height":13}},{"id":"9bc03d2f-7894-4320-8f9d-98f85f8135e4","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":107,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"6d4fddb2-8aee-442d-bd35-5ed880a027d7","block_type":"box","text":"components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a","page_number":107,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"70edd63b-d403-479a-893a-f68d00dff7cb","block_type":"box","text":"foreign government are generally adjusted to reflect a comparable inflation index, calculated by that","page_number":107,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"18f4025d-b318-4d52-bf6e-4e716e8111f8","block_type":"box","text":"government. There can be no assurance that the CPI-U or any foreign inflation index will accurately","page_number":107,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"86ebcea7-4263-4b0f-bd13-2f1e3fa575ac","block_type":"box","text":"measure the real rate of inflation in the prices of goods and services. Moreover, there can be no","page_number":107,"box":{"x":117,"y":180,"width":716,"height":12}},{"id":"e300e1a8-eec6-4f22-98d2-1a8ca34ad671","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":107,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"62a15f32-a8fe-4915-8237-2386ce69af58","block_type":"box","text":"United States.","page_number":107,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"8c4ffce7-1b60-48c6-b039-851899b01aee","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary","page_number":107,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"0511e847-ec50-43d4-a5df-b7427f1869f9","block_type":"box","text":"income, even though investors do not receive their principal until maturity.","page_number":107,"box":{"x":117,"y":258,"width":552,"height":12}},{"id":"8fad6582-d82d-48fd-a3e5-fbee6f3df93c","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":107,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"a2e54f75-595e-43be-9c8e-b93c38b847c9","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which","page_number":107,"box":{"x":383,"y":289,"width":492,"height":12}},{"id":"0c00bd17-0d30-4a28-9227-145c640dc44c","block_type":"box","text":"are securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent","page_number":107,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"b6ee3423-9d2d-4665-bac8-3adcf55bfcb5","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":107,"box":{"x":116,"y":320,"width":734,"height":12}},{"id":"d22149bd-3cc6-4337-bae2-8fdd2c0f6b7b","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":107,"box":{"x":116,"y":335,"width":708,"height":12}},{"id":"44d7ac1a-19ce-4596-a055-e49242e2363e","block_type":"box","text":"i.e.","page_number":107,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"b4ee4094-6a61-449d-a56e-a9da6f9021ad","block_type":"box","text":",","page_number":107,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"7da1cb33-7a1b-4d68-aa1f-250429ff2742","block_type":"box","text":"“Baa” by Moody’s or “BBB” by S&P) are considered to have some speculative characteristics and are","page_number":107,"box":{"x":116,"y":351,"width":756,"height":12}},{"id":"5a5df2cb-18e3-4fc0-b28e-938dbcfe6cd4","block_type":"box","text":"more sensitive to economic change than higher rated securities. If an investment grade security of a","page_number":107,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"ef7f15da-ff24-4428-a541-3a7505ead47d","block_type":"box","text":"Fund is subsequently downgraded below investment grade, the Fund’s Manager will consider such an","page_number":107,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"93a63908-763f-4dcb-87e2-4ee13fb14b7b","block_type":"box","text":"event in determining whether the Fund should continue to hold the security. Subject to its investment","page_number":107,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"ba7526b4-8528-428d-8262-9c62fa9277d9","block_type":"box","text":"strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":107,"box":{"x":116,"y":413,"width":679,"height":12}},{"id":"82198cdc-4f0d-4eaa-8715-6c78230c4da8","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":107,"box":{"x":116,"y":444,"width":566,"height":12}},{"id":"94677fc9-c181-4be7-864b-36ec89245f0a","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":107,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"cb27b017-b764-41cb-834a-838ff878202f","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to","page_number":107,"box":{"x":117,"y":498,"width":711,"height":12}},{"id":"cc8e3866-7e48-428b-a4a9-c362c050ed2b","block_type":"box","text":"investors as “junk bonds” are debt securities that are rated below investment grade by the major rating","page_number":107,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"30333f05-b055-46b2-aec8-03883f1c714e","block_type":"box","text":"agencies or are securities that Fund management believes are of comparable quality. While generally","page_number":107,"box":{"x":116,"y":529,"width":759,"height":12}},{"id":"f72e19cf-4b94-4921-9608-aaf518a7811c","block_type":"box","text":"providing greater income and opportunity for gain, non-investment grade debt securities may be","page_number":107,"box":{"x":117,"y":544,"width":715,"height":12}},{"id":"8291490d-20c8-41b3-ac96-8e3e1a8e47b4","block_type":"box","text":"subject to greater risks than securities which have higher credit ratings, including a high risk of default,","page_number":107,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"9779c300-2fe2-4b1a-8af8-d98c03f9d60f","block_type":"box","text":"and their yields will fluctuate over time. High yield securities will generally be in the lower rating","page_number":107,"box":{"x":116,"y":575,"width":709,"height":12}},{"id":"a2470cce-3670-4c9d-899e-5cc541917270","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":107,"box":{"x":116,"y":591,"width":755,"height":12}},{"id":"80c2d667-689e-4cb8-8647-ae76e609fa9c","block_type":"box","text":"will be non-rated. The credit rating of a high yield security does not necessarily address its market","page_number":107,"box":{"x":116,"y":606,"width":730,"height":12}},{"id":"e9d1c70c-c15c-435d-b609-64ee5247fddf","block_type":"box","text":"value risk, and ratings may from time to time change, positively or negatively, to reflect developments","page_number":107,"box":{"x":116,"y":622,"width":757,"height":12}},{"id":"a86f5d7c-9330-4e7c-b281-a58cf53781aa","block_type":"box","text":"regarding the issuer’s financial condition. High yield securities are considered to be speculative with","page_number":107,"box":{"x":117,"y":637,"width":743,"height":12}},{"id":"c7aa7258-260b-4084-9af9-2fe1cb885576","block_type":"box","text":"respect to the capacity of the issuer to timely repay principal and pay interest or dividends in","page_number":107,"box":{"x":117,"y":653,"width":687,"height":12}},{"id":"18ad60ad-5462-4099-980a-8aead1a54ed1","block_type":"box","text":"accordance with the terms of the obligation and may have more credit risk than higher rated securities.","page_number":107,"box":{"x":116,"y":668,"width":761,"height":12}},{"id":"1f141402-b876-4100-b49b-bbb890b9c069","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":107,"box":{"x":116,"y":699,"width":464,"height":13}},{"id":"c0bc8612-8389-40be-9ea7-7a40054c040f","block_type":"box","text":"• Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to","page_number":107,"box":{"x":117,"y":731,"width":731,"height":12}},{"id":"fcaccb49-0b74-4807-8556-c0dae3ead25f","block_type":"box","text":"adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk","page_number":107,"box":{"x":150,"y":746,"width":686,"height":12}},{"id":"e7acae21-2472-4990-beea-a4e89e7bbff8","block_type":"box","text":"bonds may be unable to meet their interest or principal payment obligations because of an","page_number":107,"box":{"x":150,"y":761,"width":669,"height":13}},{"id":"9d079145-16c0-4260-bfee-c6a2e633b138","block_type":"box","text":"economic downturn, specific issuer developments or the unavailability of additional financing.","page_number":107,"box":{"x":150,"y":777,"width":689,"height":12}},{"id":"83626277-8a8d-4558-b07a-d9d4b596a439","block_type":"box","text":"• The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets","page_number":107,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"45a8e2c8-86b2-4e99-a9b8-e6ab1a40b8ae","block_type":"box","text":"than issuers of investment grade bonds. If the issuer experiences financial stress, it may be","page_number":107,"box":{"x":150,"y":816,"width":678,"height":12}},{"id":"4fc79556-04f1-4df0-8f5c-b2a3d5d071f3","block_type":"box","text":"unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be","page_number":107,"box":{"x":150,"y":831,"width":697,"height":12}},{"id":"8e2500be-fe78-4254-93a9-b29f7bfd6277","block_type":"box","text":"lessened by specific issuer developments, or the unavailability of additional financing. Issuers of","page_number":107,"box":{"x":150,"y":847,"width":717,"height":12}},{"id":"a1b99cae-9f0d-4456-9ab2-a105e30a5072","block_type":"box","text":"high yield securities are often in the growth stage of their development and/or involved in a","page_number":107,"box":{"x":150,"y":862,"width":677,"height":12}},{"id":"e9deab82-e958-42ed-b3d9-562abf782b10","block_type":"box","text":"reorganization or takeover.","page_number":107,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"ae292205-cfdf-44e5-be4d-daa3128c7776","block_type":"box","text":"II-13","page_number":107,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b30f0b11-e30a-4902-9ba3-0062fef2aa60","block_type":"box","text":"NM1026U-6004408-107/267","page_number":107,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"edd0ecf2-6728-4865-9bda-f9c57367040c","block_type":"box","text":"• Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its","page_number":108,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"cdff522e-13f0-448b-926b-def314aee298","block_type":"box","text":"obligations, the senior obligations are generally paid off before the junior obligations, which will","page_number":108,"box":{"x":150,"y":102,"width":706,"height":13}},{"id":"fc1efb05-32cf-4adb-85e9-4cbcfb9b71cb","block_type":"box","text":"potentially limit a Fund’s ability to fully recover principal or to receive interest payments when","page_number":108,"box":{"x":150,"y":118,"width":693,"height":12}},{"id":"2e9f9a3e-daba-456e-98bc-e094bf79acb2","block_type":"box","text":"senior securities are in default. Thus, investors in high yield securities have a lower degree of","page_number":108,"box":{"x":150,"y":134,"width":696,"height":12}},{"id":"947fab3e-94c7-42cf-bd31-c7d0d9acd757","block_type":"box","text":"protection with respect to principal and interest payments than do investors in higher rated","page_number":108,"box":{"x":150,"y":149,"width":674,"height":12}},{"id":"09d6f9ec-3015-4c14-9193-eed201ddac25","block_type":"box","text":"securities.","page_number":108,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"007bf39e-2495-4267-b9c5-26a83e113b5a","block_type":"box","text":"• Junk bonds frequently have redemption features that permit an issuer to repurchase the security","page_number":108,"box":{"x":117,"y":188,"width":753,"height":12}},{"id":"a6821c71-4710-4faa-a5f1-41edd5f80097","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":108,"box":{"x":149,"y":203,"width":738,"height":12}},{"id":"d6b22e6e-f6c8-415b-af69-2df76e2a60d4","block_type":"box","text":"proceeds in bonds with lower yields and may lose income.","page_number":108,"box":{"x":150,"y":219,"width":437,"height":12}},{"id":"06700fcd-2a16-4336-a2c3-f83d3146427f","block_type":"box","text":"• Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments","page_number":108,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"970e8981-3a90-4306-8ae4-c606c9246288","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":108,"box":{"x":150,"y":258,"width":713,"height":12}},{"id":"f5df7792-828b-4201-9ea6-f7668231cb97","block_type":"box","text":"income securities.","page_number":108,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"c599ceb2-900a-421f-8fb6-d4b586802812","block_type":"box","text":"• Junk bonds may be less liquid than higher rated fixed-income securities even under normal","page_number":108,"box":{"x":117,"y":296,"width":714,"height":12}},{"id":"af8402e6-2b82-4bea-ac95-40ecf86ad483","block_type":"box","text":"economic conditions. Under certain economic and/or market conditions, a Fund may have difficulty","page_number":108,"box":{"x":150,"y":312,"width":738,"height":12}},{"id":"7508f6fe-b349-474e-b63e-f7e7e25b2550","block_type":"box","text":"disposing of certain high yield securities due to the limited number of investors in that sector of the","page_number":108,"box":{"x":150,"y":327,"width":734,"height":12}},{"id":"04cc1b7e-deee-4ba3-9ec9-db88e7afb499","block_type":"box","text":"market. There are fewer dealers in the junk bond market, and there may be significant differences","page_number":108,"box":{"x":150,"y":343,"width":730,"height":12}},{"id":"b4728dd5-98d4-492c-8940-ed7db5ad5f35","block_type":"box","text":"in the prices quoted for junk bonds by the dealers, and such quotations may not be the actual","page_number":108,"box":{"x":150,"y":358,"width":698,"height":12}},{"id":"cd6d0153-c98e-4844-97b7-ed83d70f367c","block_type":"box","text":"prices available for a purchase or sale. Because junk bonds are less liquid than higher rated","page_number":108,"box":{"x":150,"y":374,"width":688,"height":12}},{"id":"522ab552-2025-4dc1-8b7b-7541adda00b1","block_type":"box","text":"bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in","page_number":108,"box":{"x":150,"y":389,"width":720,"height":12}},{"id":"81bd69bc-6b7f-4676-870c-61374e70eba9","block_type":"box","text":"the case of securities trading in a more liquid market.","page_number":108,"box":{"x":150,"y":405,"width":398,"height":12}},{"id":"b8a2d2ab-cfc0-46b7-ae59-27efddd80da4","block_type":"box","text":"• The secondary markets for high yield securities are not as liquid as the secondary markets for","page_number":108,"box":{"x":117,"y":428,"width":734,"height":12}},{"id":"1129db35-7f8b-4da9-b762-b6c29343d9df","block_type":"box","text":"higher rated securities. The secondary markets for high yield securities are concentrated in","page_number":108,"box":{"x":150,"y":444,"width":680,"height":12}},{"id":"049c8b14-cc4f-40bc-b4d5-6b5e956615e5","block_type":"box","text":"relatively few market makers and participants in the markets are mostly institutional investors,","page_number":108,"box":{"x":150,"y":459,"width":699,"height":12}},{"id":"5cb769ae-aee6-48e3-8bbe-dba65aeaa016","block_type":"box","text":"including insurance companies, banks, other financial institutions and mutual funds. In addition,","page_number":108,"box":{"x":150,"y":475,"width":712,"height":12}},{"id":"ec85ad24-29f6-4cbe-b17e-53a3cbdd4fb5","block_type":"box","text":"the trading volume for high yield securities is generally lower than that for higher rated securities","page_number":108,"box":{"x":150,"y":490,"width":718,"height":12}},{"id":"96f19936-76ed-4368-a845-f11c1e1eef81","block_type":"box","text":"and the secondary markets could contract under adverse market or economic conditions","page_number":108,"box":{"x":150,"y":506,"width":662,"height":12}},{"id":"59dbe561-eaff-4788-9eb3-05477f809e0a","block_type":"box","text":"independent of any specific adverse changes in the condition of a particular issuer. Under certain","page_number":108,"box":{"x":150,"y":521,"width":725,"height":12}},{"id":"0c6f32fa-6e67-4a47-87d4-3b0a0caa3e78","block_type":"box","text":"economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":108,"box":{"x":150,"y":537,"width":695,"height":12}},{"id":"5493841c-7d4e-4147-b8a9-52215442e0ff","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. An illiquid secondary","page_number":108,"box":{"x":150,"y":552,"width":728,"height":12}},{"id":"1e9dd19a-6223-425f-aa8f-98adaf0502ad","block_type":"box","text":"market may adversely affect the market price of the high yield security, which may result in","page_number":108,"box":{"x":150,"y":568,"width":678,"height":12}},{"id":"7f1c4101-8f69-484c-8e42-2346583263da","block_type":"box","text":"increased difficulty selling the particular issue and obtaining accurate market quotations on the","page_number":108,"box":{"x":150,"y":583,"width":706,"height":12}},{"id":"2ca96257-9baf-4cb7-9354-938a8ae9f8fa","block_type":"box","text":"issue when valuing a Fund’s assets. Market quotations on high yield securities are available only","page_number":108,"box":{"x":150,"y":599,"width":722,"height":12}},{"id":"9820479d-7315-4194-9e8a-03c26e8e4bd0","block_type":"box","text":"from a limited number of dealers, and such quotations may not be the actual prices available for a","page_number":108,"box":{"x":149,"y":614,"width":731,"height":12}},{"id":"5ffef334-1036-4ae5-98a3-e08436585645","block_type":"box","text":"purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in","page_number":108,"box":{"x":150,"y":630,"width":734,"height":12}},{"id":"ee509c1c-8a04-4772-90d5-895030c43475","block_type":"box","text":"the absence of readily available market quotations for such securities, the relative lack of reliable","page_number":108,"box":{"x":150,"y":645,"width":723,"height":12}},{"id":"a4c1179d-e57b-47aa-8046-fede633918e9","block_type":"box","text":"objective data makes it more difficult to value a Fund’s securities, and judgment plays a more","page_number":108,"box":{"x":150,"y":661,"width":691,"height":12}},{"id":"418fb973-a644-4b7d-b23b-0ace8c96bbec","block_type":"box","text":"important role in determining such valuations.","page_number":108,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"e1e4f7aa-cceb-4d6a-850f-400e1bad449b","block_type":"box","text":"• A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate","page_number":108,"box":{"x":117,"y":699,"width":757,"height":13}},{"id":"01c644e3-fcb9-4c91-beb8-d00c3e6debd9","block_type":"box","text":"new terms with a defaulting issuer.","page_number":108,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"83c1e75c-7529-4c34-83ee-6ee1d2a92801","block_type":"box","text":"• The junk bond markets may react strongly to adverse news about an issuer or the economy, or to","page_number":108,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"b91692ef-2759-48c9-98b6-78eba7029c79","block_type":"box","text":"the perception or expectation of adverse news, whether or not it is based on fundamental analysis.","page_number":108,"box":{"x":150,"y":754,"width":731,"height":12}},{"id":"25982de8-3a2b-4422-a909-dac82303c2e0","block_type":"box","text":"Additionally, prices for high yield securities may be affected by legislative and regulatory","page_number":108,"box":{"x":149,"y":769,"width":654,"height":12}},{"id":"7d47bfcb-7b60-43bd-9557-0dcb6c499e4b","block_type":"box","text":"developments. These developments could adversely affect a Fund’s NAV and investment","page_number":108,"box":{"x":150,"y":785,"width":664,"height":12}},{"id":"1e1cdf4c-6a43-46b6-adf9-f59271fdae21","block_type":"box","text":"practices, the secondary market for high yield securities, the financial condition of issuers of these","page_number":108,"box":{"x":150,"y":800,"width":726,"height":12}},{"id":"931af669-9a46-4b13-b011-94a8414ec7e6","block_type":"box","text":"securities and the value and liquidity of outstanding high yield securities, especially in a thinly","page_number":108,"box":{"x":150,"y":816,"width":690,"height":12}},{"id":"28426183-c17e-4839-ae10-df94d358016c","block_type":"box","text":"traded market. For example, federal legislation requiring the divestiture by federally insured","page_number":108,"box":{"x":150,"y":831,"width":681,"height":12}},{"id":"e166eb6f-e711-490a-a69b-476f2402aa71","block_type":"box","text":"savings and loan associations of their investments in high yield bonds and limiting the deductibility","page_number":108,"box":{"x":150,"y":847,"width":733,"height":12}},{"id":"f6d5f08e-c47a-48bd-b587-0cda43e54db1","block_type":"box","text":"of interest by certain corporate issuers of high yield bonds adversely affected the market in the","page_number":108,"box":{"x":150,"y":862,"width":706,"height":12}},{"id":"b98daa87-44d5-49ac-97ff-43ab5046d606","block_type":"box","text":"past.","page_number":108,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"8a20e4ef-24a4-45fd-b0e9-3c6a91f522ce","block_type":"box","text":"II-14","page_number":108,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c343e4d2-665e-4830-8efb-ac78490a3926","block_type":"box","text":"NM1026U-6004408-108/267","page_number":108,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9536512b-2665-4c2d-9634-0aabe4744849","block_type":"box","text":"• The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of","page_number":109,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"b31c603f-b552-4ead-830c-42c060557630","block_type":"box","text":"a non-investment grade security’s principal and interest payments, but does not address market","page_number":109,"box":{"x":150,"y":103,"width":716,"height":12}},{"id":"7777bcec-ce3b-47ae-a9de-36bcd11e87ed","block_type":"box","text":"value risk. Because such ratings of the ratings agencies may not always reflect current conditions","page_number":109,"box":{"x":150,"y":118,"width":728,"height":12}},{"id":"47a83808-d35d-4a1b-9a64-ac5e8336dfc6","block_type":"box","text":"and events, in addition to using recognized rating agencies and other sources, the Manager or","page_number":109,"box":{"x":150,"y":134,"width":705,"height":12}},{"id":"0e979e13-5f60-4a59-8bd4-b4e40234eee0","block_type":"box","text":"sub-adviser performs its own analysis of the issuers whose non-investment grade securities a","page_number":109,"box":{"x":150,"y":149,"width":700,"height":12}},{"id":"e2f58dea-9f4b-4061-bd0d-832ce28f46bf","block_type":"box","text":"Fund holds. Because of this, the Fund’s performance may depend more on the Manager’s or","page_number":109,"box":{"x":151,"y":165,"width":693,"height":12}},{"id":"606687b3-362b-4035-8570-3c582921bcd1","block_type":"box","text":"sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated","page_number":109,"box":{"x":150,"y":180,"width":678,"height":12}},{"id":"802ba946-9d13-40e6-9bdf-0d2584ca57e9","block_type":"box","text":"securities.","page_number":109,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"a85e2e46-d72c-4220-95c9-4fb83b67ce30","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as","page_number":109,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"40973410-6539-46ed-9578-03b9b7a8872c","block_type":"box","text":"those relating to the creditworthiness of issuers, the ratings and performance of the securities, the","page_number":109,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"84930645-674d-4795-bbc0-4a2c4244ac44","block_type":"box","text":"protections afforded the securities and the diversity of the Fund. The Manager or sub-adviser","page_number":109,"box":{"x":117,"y":258,"width":694,"height":12}},{"id":"5ae32b24-cda1-4ed0-88b5-52c11374aabc","block_type":"box","text":"continuously monitors the issuers of non-investment grade securities held by the Fund for their ability","page_number":109,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"a2850cb7-b99b-4fd7-a1fe-787083af6e4d","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":109,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"91a24db8-60cd-4ff8-a455-b8f837c7fa91","block_type":"box","text":"Fund so that it can meet redemption requests. If a security’s rating is reduced below the minimum","page_number":109,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"fab0d5bf-6e0b-489d-b1b9-adea7bc3dcf8","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":109,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"d1e3b32e-7ea0-4bd6-81b4-24a053f41eb0","block_type":"box","text":"Fund should continue to hold the security.","page_number":109,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"09acd8f4-bae9-4fa7-9164-0683b0ed5932","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net","page_number":109,"box":{"x":117,"y":366,"width":718,"height":12}},{"id":"4c0e59b8-d77b-45b8-947e-1a64b86ec42f","block_type":"box","text":"redemptions, the Fund could be forced to sell its holdings without regard to the investment merits,","page_number":109,"box":{"x":117,"y":382,"width":729,"height":12}},{"id":"4c6c5a8e-2632-4574-bccf-a2cd8e3078ba","block_type":"box","text":"thereby decreasing the assets upon which the Fund’s rate of return is based.","page_number":109,"box":{"x":116,"y":397,"width":575,"height":12}},{"id":"05eb947b-48c9-40b6-84cb-7261543156d1","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons,","page_number":109,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"d8d2f635-db2f-4567-b58e-8da31e883773","block_type":"box","text":"such as higher investment research costs and higher commission costs.","page_number":109,"box":{"x":116,"y":444,"width":540,"height":12}},{"id":"c7e587fc-789c-4a39-88b9-f3fe661e71ae","block_type":"box","text":"Mezzanine Investments.","page_number":109,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"fd20b0ce-1deb-4048-89f6-af213761b137","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a","page_number":109,"box":{"x":297,"y":475,"width":579,"height":12}},{"id":"b299f0c8-7160-44af-819f-548745c498b9","block_type":"box","text":"specific credit quality, may invest in certain high yield securities known as mezzanine investments,","page_number":109,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"9308d506-6d88-468f-a038-3cf58ada1ef8","block_type":"box","text":"which are subordinated debt securities which are generally issued in private placements in connection","page_number":109,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"76d0439b-0cb4-4f5f-9c38-4da8afba1c0c","block_type":"box","text":"with an equity security (","page_number":109,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"a19cd14b-033d-48bc-b86d-0834850cfccc","block_type":"box","text":"e.g.","page_number":109,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"8ba02d6d-570f-42ed-a138-4003c827d646","block_type":"box","text":", with attached warrants). Such mezzanine investments may be issued with","page_number":109,"box":{"x":321,"y":521,"width":563,"height":12}},{"id":"6738a305-5e0c-4c99-89bc-8a069099034e","block_type":"box","text":"or without registration rights. Similar to other high yield securities, maturities of mezzanine investments","page_number":109,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"f089bbff-d217-4226-b7d4-1bb4142faf11","block_type":"box","text":"are typically seven to ten years, but the expected average life is significantly shorter at three to five","page_number":109,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"e38b9400-4191-4a2c-bb78-5fbada1f2621","block_type":"box","text":"years. Mezzanine investments are usually unsecured and subordinate to other obligations of the","page_number":109,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"bd97316a-fa2c-4092-a361-d7a4be9e4dde","block_type":"box","text":"issuer.","page_number":109,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"322b9bf9-56aa-415a-9a43-329d4d7175ac","block_type":"box","text":"Pay-in-kind Bonds.","page_number":109,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"994f6853-7177-40b3-83b0-7d888045a25e","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which","page_number":109,"box":{"x":257,"y":614,"width":631,"height":12}},{"id":"9106205c-22d2-4c09-b275-40e49ad9dbd3","block_type":"box","text":"pay interest through the issuance of additional debt or equity securities. Similar to zero coupon","page_number":109,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"89d9ae44-fc9a-4dd7-9f94-5e3232716e6c","block_type":"box","text":"obligations, pay-in-kind bonds also carry additional risk as holders of these types of securities realize","page_number":109,"box":{"x":116,"y":645,"width":753,"height":12}},{"id":"95b31a52-7e6f-4f2b-b216-4e6b4ed8767d","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":109,"box":{"x":117,"y":661,"width":707,"height":12}},{"id":"54162d3e-3f23-480d-bc3b-bf448e03698a","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":109,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"734b6125-fa12-437e-94bc-f6586090af63","block_type":"box","text":"affected by interest rate changes to a greater extent, and therefore tends to be more volatile, than that","page_number":109,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"304ac43f-28d1-42c3-a736-f00ead47d7dc","block_type":"box","text":"of securities which pay interest in cash. Additionally, current U.S. federal tax law requires the holder of","page_number":109,"box":{"x":116,"y":707,"width":759,"height":12}},{"id":"cea4455c-a6ef-453f-b241-25da82db9118","block_type":"box","text":"pay-in-kind bonds to accrue income with respect to these securities prior to the receipt of cash","page_number":109,"box":{"x":117,"y":723,"width":698,"height":12}},{"id":"f6d48ec4-a877-4d5b-a515-adf7f483e900","block_type":"box","text":"payments. To maintain its qualification as a regulated investment company and avoid liability for U.S.","page_number":109,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"96787375-7989-433a-a034-dcfa0eea6054","block_type":"box","text":"federal income and excise taxes, each Fund may be required to distribute income accrued with respect","page_number":109,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"c07212e9-6fa6-4f15-bc83-2cd7cce648c7","block_type":"box","text":"to these securities and may have to dispose of portfolio securities under disadvantageous","page_number":109,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"72dc97d2-d36b-40c1-ba39-585b447e589f","block_type":"box","text":"circumstances in order to generate cash to satisfy these distribution requirements.","page_number":109,"box":{"x":116,"y":785,"width":608,"height":12}},{"id":"38227f50-3f87-4879-8e73-b077f822a7b0","block_type":"box","text":"Supranational Entities.","page_number":109,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"0b302854-fa45-47b3-bdd9-ae2a1698d063","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of","page_number":109,"box":{"x":289,"y":816,"width":555,"height":12}},{"id":"5ec7fd4d-587b-45f7-b3ef-373551380daa","block_type":"box","text":"such entities include the International Bank for Reconstruction and Development (the World Bank), the","page_number":109,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"4157e5bf-6b92-4a93-a261-b58a1f604ccb","block_type":"box","text":"European Steel and Coal Community, the Asian Development Bank and the Inter-American","page_number":109,"box":{"x":117,"y":847,"width":683,"height":12}},{"id":"7c088e3e-dd6a-424a-964c-82be308dc1d5","block_type":"box","text":"Development Bank. The government members, or “stockholders,” usually make initial capital","page_number":109,"box":{"x":117,"y":862,"width":691,"height":12}},{"id":"953b266c-8957-4480-bd7d-179db6cc0e1a","block_type":"box","text":"contributions to the supranational entity and in many cases are committed to make additional capital","page_number":109,"box":{"x":116,"y":878,"width":748,"height":12}},{"id":"78557ba6-bb52-4e0c-b93a-c26fd9ec60c1","block_type":"box","text":"II-15","page_number":109,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d8c0b72d-5695-4e35-92d2-1cff98418924","block_type":"box","text":"NM1026U-6004408-109/267","page_number":109,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9739f734-710f-4d74-acad-4317f12bfdd3","block_type":"box","text":"contributions if the supranational entity is unable to repay its borrowings. There is no guarantee that","page_number":110,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"f514cb30-eb1b-4c9e-aceb-adc48b2f82e8","block_type":"box","text":"one or more stockholders of a supranational entity will continue to make any necessary additional","page_number":110,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"ccb5a27d-36e7-4500-8339-a6d8cd190953","block_type":"box","text":"capital contributions. If such contributions are not made, the entity may be unable to pay interest or","page_number":110,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"aa677fbb-b498-4f0b-830e-99fa42e17adf","block_type":"box","text":"repay principal on its debt securities, and a Fund may lose money on such investments.","page_number":110,"box":{"x":117,"y":134,"width":655,"height":12}},{"id":"6f9d8817-4873-4f00-89bb-967b9d895402","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":110,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"74bbac8f-defe-413d-8b46-62e3d1c39a5d","block_type":"box","text":"Certain Funds may invest in the securities of foreign","page_number":110,"box":{"x":484,"y":167,"width":397,"height":12}},{"id":"90c320f2-aa42-46bd-93ed-dc764dfbf5bc","block_type":"box","text":"issuers in the form of Depositary Receipts or other securities convertible into securities of foreign","page_number":110,"box":{"x":117,"y":182,"width":722,"height":12}},{"id":"4bf8e21d-11df-4678-a557-7105fc0c1745","block_type":"box","text":"issuers. Depositary Receipts may not necessarily be denominated in the same currency as the","page_number":110,"box":{"x":117,"y":198,"width":707,"height":12}},{"id":"6cd148fc-a085-4ffe-a90d-549d035667f8","block_type":"box","text":"underlying securities into which they may be converted. The Fund may invest in both sponsored and","page_number":110,"box":{"x":117,"y":213,"width":749,"height":12}},{"id":"f74fea8f-0bc7-4344-a096-9aa43d84f6ea","block_type":"box","text":"unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global","page_number":110,"box":{"x":117,"y":229,"width":769,"height":12}},{"id":"acf3786e-52ce-42e5-a304-eb5231ba12b0","block_type":"box","text":"Depositary Receipts (“GDRs”) and other similar global instruments. ADRs typically are issued by an","page_number":110,"box":{"x":117,"y":244,"width":743,"height":12}},{"id":"c168b951-0dd8-415d-a135-27248e130193","block_type":"box","text":"American bank or trust company and evidence ownership of underlying securities issued by a foreign","page_number":110,"box":{"x":116,"y":260,"width":756,"height":12}},{"id":"affc9919-4157-4e9c-b025-e58472116e20","block_type":"box","text":"corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are receipts","page_number":110,"box":{"x":116,"y":275,"width":757,"height":12}},{"id":"de0733dc-141c-48da-b4c9-cbfdb24fc20d","block_type":"box","text":"issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either","page_number":110,"box":{"x":117,"y":291,"width":739,"height":12}},{"id":"9c188b7d-790d-4d55-903f-3ef75bf75672","block_type":"box","text":"foreign or domestic underlying securities. GDRs are depositary receipts structured like global debt","page_number":110,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"52f8830a-6135-40a6-b2d1-dca08d1045ac","block_type":"box","text":"issues to facilitate trading on an international basis. In addition to investment risks associated with the","page_number":110,"box":{"x":117,"y":322,"width":758,"height":12}},{"id":"ce3b5b18-f712-4d85-8d4e-1b62b43d8139","block_type":"box","text":"underlying issuer, Depositary Receipts expose a Fund to additional risks associated with the","page_number":110,"box":{"x":117,"y":337,"width":689,"height":12}},{"id":"b2232c52-7d50-4daa-affa-e74a598f16a1","block_type":"box","text":"non-uniform terms that apply to Depositary Receipt programs, credit exposure to the depository bank","page_number":110,"box":{"x":117,"y":353,"width":754,"height":12}},{"id":"98d3bcaa-9335-452f-ad31-2fe716eb55b6","block_type":"box","text":"and to the sponsors and other parties with whom the depository bank establishes the programs,","page_number":110,"box":{"x":116,"y":368,"width":716,"height":12}},{"id":"f7bd471a-b6fd-46f9-843c-f2f2f88955a6","block_type":"box","text":"currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR, EDR and","page_number":110,"box":{"x":116,"y":384,"width":748,"height":12}},{"id":"b77bc9d0-be29-4fc9-bbb7-e074a1fb96de","block_type":"box","text":"GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":110,"box":{"x":117,"y":399,"width":771,"height":12}},{"id":"df0ee4f9-a542-42fc-ad93-bf2bf3a42aea","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored","page_number":110,"box":{"x":116,"y":415,"width":701,"height":12}},{"id":"a13fad09-8b07-4d55-9f9d-ac97bb32e108","block_type":"box","text":"programs and do not provide holders with many of the shareholder benefits that come from investing in","page_number":110,"box":{"x":117,"y":430,"width":769,"height":12}},{"id":"4886c290-ac8f-4fa0-9536-e6aff32b3cf9","block_type":"box","text":"a sponsored Depositary Receipt. Available information concerning the issuer may not be as current as","page_number":110,"box":{"x":116,"y":446,"width":764,"height":12}},{"id":"ff9016ee-2964-4dbb-8d5e-dc7609b8eeba","block_type":"box","text":"for sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may","page_number":110,"box":{"x":116,"y":461,"width":750,"height":12}},{"id":"4b28b052-5ca5-404f-9a4a-7d50a74e6390","block_type":"box","text":"be more volatile than if such instruments were sponsored by the issuer. Depositary Receipts are","page_number":110,"box":{"x":117,"y":477,"width":718,"height":12}},{"id":"5c76e1d2-9415-4549-89b8-fa8f4e86e776","block_type":"box","text":"generally subject to the same risks as the foreign securities that they evidence or into which they may","page_number":110,"box":{"x":116,"y":492,"width":759,"height":12}},{"id":"cbaf8691-e98d-4ac9-b2c2-672f80abaec3","block_type":"box","text":"be converted. Investments in ADRs, EDRs and GDRs present additional investment considerations as","page_number":110,"box":{"x":117,"y":508,"width":763,"height":12}},{"id":"431ee1cb-5066-49ac-9c7b-df6b3c7d565b","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":110,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"f4f47b0b-79b1-4497-bc46-67856c397944","block_type":"box","text":"Derivatives.","page_number":110,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"93ddf9c6-dc7f-4cd8-a75d-385c5dbbcb46","block_type":"box","text":"General.","page_number":110,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"2c5c83f3-f2bc-48c4-bc87-68ce35d32bee","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments","page_number":110,"box":{"x":186,"y":581,"width":675,"height":12}},{"id":"15171c80-ea25-4cbc-838f-e876c2ddfc30","block_type":"box","text":"that derive their value from one or more securities, commodities (such as gold or oil), currencies,","page_number":110,"box":{"x":116,"y":596,"width":722,"height":12}},{"id":"d56b6763-8bcc-4b90-b63a-037d68614698","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":110,"box":{"x":117,"y":612,"width":758,"height":12}},{"id":"461f2fa7-797c-4b8d-b87c-ce515d7114d7","block_type":"box","text":"prime lending rate) or other reference asset. Derivatives may allow a Fund to increase or decrease the","page_number":110,"box":{"x":117,"y":627,"width":765,"height":12}},{"id":"d99062e0-6b68-45f2-80d9-3d6ec2162256","block_type":"box","text":"level of risk to which the Fund is exposed more quickly and efficiently than with other transactions.","page_number":110,"box":{"x":117,"y":643,"width":732,"height":12}},{"id":"e83a8414-7b98-4210-b92d-73fb8f47f4c5","block_type":"box","text":"Certain Funds may use derivatives to maintain a portion of their long and short positions. Unless","page_number":110,"box":{"x":117,"y":658,"width":719,"height":12}},{"id":"6be7dd76-0fa9-4c29-9791-de3b7c6c49b3","block_type":"box","text":"otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset class it is","page_number":110,"box":{"x":116,"y":674,"width":724,"height":12}},{"id":"064bf7de-b7cd-40b7-b40b-f0ff9756a473","block_type":"box","text":"prohibited by its investment restrictions from purchasing directly. As described below, derivatives can","page_number":110,"box":{"x":117,"y":689,"width":748,"height":12}},{"id":"54efc5a4-1a52-4c31-abd4-4745d57bd5fe","block_type":"box","text":"be used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":110,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"d061bb39-318e-4889-9e14-e42fd3e502f8","block_type":"box","text":"i.e.","page_number":110,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"9d0fd69c-579a-41d6-91d5-94fc6df7288d","block_type":"box","text":", the payment obligations of derivatives contracts are netted against one another with the Fund","page_number":110,"box":{"x":140,"y":720,"width":701,"height":12}},{"id":"01bd87cd-64e5-4e6c-b846-250efcdd7332","block_type":"box","text":"receiving or paying, as the case may be, only the net amount of the two payment streams.","page_number":110,"box":{"x":117,"y":736,"width":667,"height":12}},{"id":"76077ce9-b91c-46c5-b3ba-4068837e0b1d","block_type":"box","text":"Hedging.","page_number":110,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"681a6bd0-5089-4a20-86e7-b443889da2eb","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset","page_number":110,"box":{"x":189,"y":769,"width":680,"height":12}},{"id":"85aa2553-dacb-4324-981d-7cf21815723a","block_type":"box","text":"the risks associated with other Fund holdings. Losses on other investments may be substantially","page_number":110,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"ba3613f9-dde3-47fd-bcb0-572bf5e16f7f","block_type":"box","text":"reduced by gains on a derivative that reacts in an opposite manner to market movements. Although","page_number":110,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"cd9de39d-dd3a-4cad-8814-20a7c2a23283","block_type":"box","text":"hedging may reduce losses, it may also reduce or eliminate gains. In addition, hedging may cause","page_number":110,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"d43731e7-2d0c-41b4-b23c-bc27cc3a4f33","block_type":"box","text":"losses if the market moves in an unanticipated manner, or if the cost of the derivative outweighs the","page_number":110,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"e3bc4a7a-2078-43f1-878e-124d7992e6b0","block_type":"box","text":"benefit of the hedge. The effectiveness of hedging may be reduced by correlation risk,","page_number":110,"box":{"x":117,"y":847,"width":643,"height":12}},{"id":"a45778e9-6367-4cd1-aaed-d872245c6326","block_type":"box","text":"i.e.","page_number":110,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"3d410cd4-f02c-4062-80d2-72d769f691e2","block_type":"box","text":",","page_number":110,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"8653a5db-585c-48e3-8937-4ffe2947ac8a","block_type":"box","text":"the risk that","page_number":110,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"16389394-677a-432e-af26-b38fb0ed9f20","block_type":"box","text":"changes in the value of the derivative will not match those of the holdings being hedged as expected","page_number":110,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"0d0ed13d-3fd9-497f-87e6-55919086234c","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":110,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"2b6d1da8-7460-42af-bb7f-dbf07e64fb90","block_type":"box","text":"II-16","page_number":110,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"772f3abf-04b5-4b56-a1e9-dda8dfb74e08","block_type":"box","text":"NM1026U-6004408-110/267","page_number":110,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e3dcde53-cac7-493f-80a7-04d3b0c725a2","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":111,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"5b0d4b3b-77e4-4b5e-995f-82abb64eb7f7","block_type":"box","text":"will be effective. No Fund is required to use derivatives to hedge.","page_number":111,"box":{"x":116,"y":102,"width":486,"height":13}},{"id":"f6004df3-8f30-41e4-820b-3fb47477e664","block_type":"box","text":"Speculation.","page_number":111,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"e7144cdf-6fde-4ee9-b061-f223003a5152","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance","page_number":111,"box":{"x":208,"y":132,"width":638,"height":13}},{"id":"2d4e82d5-178e-424e-96b6-bd003546652e","block_type":"box","text":"returns. The use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather","page_number":111,"box":{"x":117,"y":148,"width":753,"height":12}},{"id":"b306f692-d080-420a-aada-03f19cacbb16","block_type":"box","text":"than offset the risk of other positions. To the extent a Fund invests in a derivative for speculative","page_number":111,"box":{"x":116,"y":163,"width":719,"height":12}},{"id":"6cb8db3f-b0ac-4e88-82e3-65ca52c90335","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":111,"box":{"x":117,"y":179,"width":769,"height":12}},{"id":"bd711534-9c51-4c49-8c41-67ba908c5f3a","block_type":"box","text":"greater than the derivative’s cost, and the potential for loss in certain cases may be unlimited.","page_number":111,"box":{"x":116,"y":194,"width":699,"height":13}},{"id":"cade8b9b-cdc0-4f15-b3fb-641398eeeefd","block_type":"box","text":"Regulation of Derivatives.","page_number":111,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"a1410344-94a8-4812-848f-b7f2678eca46","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":111,"box":{"x":116,"y":247,"width":352,"height":12}},{"id":"38df2eda-026a-4f70-a137-a5538f2b7934","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits","page_number":111,"box":{"x":469,"y":247,"width":416,"height":12}},{"id":"454b49d2-8b1c-4196-bbf0-32883838f0ef","block_type":"box","text":"a Fund to enter into Derivatives Transactions (as defined below) and certain other transactions","page_number":111,"box":{"x":116,"y":263,"width":708,"height":12}},{"id":"b5cd4d2d-6e01-4003-8289-adecae4951c7","block_type":"box","text":"notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the","page_number":111,"box":{"x":117,"y":278,"width":692,"height":12}},{"id":"74b30bc9-0765-45ff-853f-b23b55ccac3a","block_type":"box","text":"Investment Company Act. Section 18 of the Investment Company Act, among other things, prohibits","page_number":111,"box":{"x":117,"y":294,"width":747,"height":12}},{"id":"d85037fb-e1dc-4736-84ba-9989017dd9c8","block_type":"box","text":"open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing","page_number":111,"box":{"x":116,"y":309,"width":769,"height":12}},{"id":"5a3804af-4e85-4d86-a23e-fe96f0947a5d","block_type":"box","text":"from a bank (subject to a requirement to maintain 300% “asset coverage”).","page_number":111,"box":{"x":116,"y":325,"width":560,"height":12}},{"id":"660b71bc-41b8-4732-8031-aadc7df8c300","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap","page_number":111,"box":{"x":117,"y":354,"width":761,"height":13}},{"id":"0de6cce6-8688-4cb3-9142-e614ac7ca4b0","block_type":"box","text":"(including a contract for differences), futures contract, forward contract, option (excluding purchased","page_number":111,"box":{"x":117,"y":370,"width":747,"height":12}},{"id":"ac88ca8c-4794-407b-9147-53a1b3aca00e","block_type":"box","text":"options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be","page_number":111,"box":{"x":116,"y":385,"width":764,"height":13}},{"id":"7ece658e-e47b-48da-a41f-090a9c08bb09","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":111,"box":{"x":117,"y":401,"width":763,"height":12}},{"id":"03a341da-e435-4311-beae-4fc949982684","block_type":"box","text":"maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale","page_number":111,"box":{"x":117,"y":416,"width":767,"height":13}},{"id":"618e94d1-c4c2-4d4d-a14d-ac4f34741c1a","block_type":"box","text":"borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and","page_number":111,"box":{"x":117,"y":432,"width":750,"height":12}},{"id":"afd30a43-ed38-42b4-baa6-cc45c7661be7","block_type":"box","text":"non-recourse tender option bonds, and borrowed bonds), if a Fund elects to treat all of these","page_number":111,"box":{"x":117,"y":447,"width":691,"height":13}},{"id":"ef1d6ab2-d97d-4178-b05d-a87dc6c74ac9","block_type":"box","text":"transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":111,"box":{"x":116,"y":463,"width":738,"height":12}},{"id":"2212782f-5b0f-440e-ac9a-16b0b4e4d686","block_type":"box","text":"securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and","page_number":111,"box":{"x":116,"y":478,"width":763,"height":13}},{"id":"7bb08fd9-0fe4-4e8f-bee3-1b76fa9a298d","block_type":"box","text":"dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed","page_number":111,"box":{"x":116,"y":494,"width":755,"height":12}},{"id":"e1886e21-b8d7-455f-ad1a-8a809df76074","block_type":"box","text":"Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed Delivery","page_number":111,"box":{"x":116,"y":509,"width":768,"height":13}},{"id":"6976b959-4efa-4991-88d3-371441c8fbee","block_type":"box","text":"Securities and Forward Commitments”).","page_number":111,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"de750243-7e0e-46d2-a793-66dd4c688997","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must","page_number":111,"box":{"x":117,"y":555,"width":759,"height":12}},{"id":"24770196-f46f-46a1-b0c1-65d81f8d6d3f","block_type":"box","text":"comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things,","page_number":111,"box":{"x":116,"y":570,"width":744,"height":12}},{"id":"c8d64ad4-f284-49c0-9c48-744d2b6e6d8d","block_type":"box","text":"requires a Fund to adopt and implement a comprehensive written derivatives risk management","page_number":111,"box":{"x":117,"y":586,"width":708,"height":12}},{"id":"2f85ebdc-fd50-42ab-b795-244941876752","block_type":"box","text":"program (“DRMP”) and comply with a relative or absolute limit on Fund leverage risk calculated based","page_number":111,"box":{"x":117,"y":601,"width":761,"height":13}},{"id":"b39695f5-1afd-4962-8c24-49b9279d312f","block_type":"box","text":"on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed","page_number":111,"box":{"x":116,"y":617,"width":760,"height":12}},{"id":"d9a4aa91-32a2-4440-9d42-a1a5eb2d55ce","block_type":"box","text":"by the Fund’s Board, including a majority of the independent Directors, and periodically reviews the","page_number":111,"box":{"x":117,"y":632,"width":739,"height":13}},{"id":"4385e5e0-99b0-42e1-bf89-33f80ea3beaf","block_type":"box","text":"DRMP and reports to the Fund’s Board.","page_number":111,"box":{"x":117,"y":648,"width":299,"height":12}},{"id":"19bc0272-4201-47a7-b770-42f96f3cae39","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":111,"box":{"x":117,"y":678,"width":758,"height":12}},{"id":"7d322c06-ac99-4e76-8373-a31d7b9748ae","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)","page_number":111,"box":{"x":116,"y":693,"width":754,"height":12}},{"id":"644395ee-cba2-4284-8f77-5c9df4e8fcaa","block_type":"box","text":"and the Fund adopts and implements written policies and procedures reasonably designed to manage","page_number":111,"box":{"x":116,"y":709,"width":758,"height":12}},{"id":"bb1c9f4a-47d8-4397-ba01-2ce115d9cca3","block_type":"box","text":"its derivatives risks (the “Limited Derivatives User Exception”).","page_number":111,"box":{"x":117,"y":724,"width":459,"height":12}},{"id":"f41b6e2c-5001-421d-a037-56e51c5a4a20","block_type":"box","text":"Dodd-Frank Regulations.","page_number":111,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"5cd92f40-8493-4a34-90a0-b0b422aca5b4","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd","page_number":111,"box":{"x":308,"y":754,"width":555,"height":12}},{"id":"ac9537c8-6968-4c57-b4c1-c2b9b5e4830f","block_type":"box","text":"Frank”), enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter","page_number":111,"box":{"x":117,"y":770,"width":754,"height":12}},{"id":"17b075d2-57cb-41ee-94fe-a89fd84dddd9","block_type":"box","text":"(“OTC”) derivatives markets for the first time. While the Commodity Futures Trading Commission","page_number":111,"box":{"x":117,"y":785,"width":716,"height":12}},{"id":"53139936-1d0a-4cf7-890f-9cea8b591194","block_type":"box","text":"(“CFTC”) and other U.S. regulators have adopted many of the required Dodd-Frank regulations, certain","page_number":111,"box":{"x":117,"y":801,"width":764,"height":12}},{"id":"05f666de-82cd-438f-9cc4-4108320c999e","block_type":"box","text":"regulations have only recently become effective and other regulations remain to be adopted. The full","page_number":111,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"611bba6e-adac-4b8a-bbf5-f3b849e3baff","block_type":"box","text":"impact of Dodd-Frank on the Funds remains uncertain.","page_number":111,"box":{"x":117,"y":832,"width":411,"height":12}},{"id":"7023b704-581a-4984-9a71-6e75e4f18276","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the","page_number":111,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"c26e43f5-349e-4586-905a-41c1307d1e7b","block_type":"box","text":"SEC as “security-based swap dealers”. Registered swap dealers and security-based swap dealers are","page_number":111,"box":{"x":116,"y":877,"width":765,"height":12}},{"id":"cd3ed191-42bd-4c78-8981-75fd06aedb74","block_type":"box","text":"II-17","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9e73cb88-51fc-420c-abe2-ab2c89795274","block_type":"box","text":"NM1026U-6004408-111/267","page_number":111,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1d7d2d22-f199-40dc-9065-cec12ae03fbc","block_type":"box","text":"subject to various regulatory requirements, including, but not limited to, margin, recordkeeping,","page_number":112,"box":{"x":116,"y":87,"width":708,"height":12}},{"id":"b0f33926-0f5a-4d15-b7fc-1c09640b0549","block_type":"box","text":"reporting, transparency, position limits, limitations on conflicts of interest, business conduct standards,","page_number":112,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"a55bb768-734b-4e45-85db-f27d67c63e14","block_type":"box","text":"minimum capital requirements and other regulatory requirements, which indirectly impact the Funds","page_number":112,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"a3846f69-fb1d-437d-ab08-5e1362034477","block_type":"box","text":"that enter into transactions with them.","page_number":112,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"c8493c08-af4d-440f-b663-ce8357a20b2a","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed","page_number":112,"box":{"x":116,"y":165,"width":761,"height":11}},{"id":"77c54bd8-77e8-4b17-8c21-75d9e8a249d9","block_type":"box","text":"in regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also","page_number":112,"box":{"x":117,"y":180,"width":719,"height":12}},{"id":"991b0906-419c-4ab5-9b15-1f6c9da987ab","block_type":"box","text":"expected to impose similar requirements on certain security-based derivatives in the future. OTC","page_number":112,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"f600a3fa-7478-4def-932c-a5f97bfa3ce6","block_type":"box","text":"derivatives trades submitted for clearing are subject to minimum initial and variation margin","page_number":112,"box":{"x":116,"y":211,"width":681,"height":12}},{"id":"e5f0dec5-12a0-42c7-a357-0d8d348c55ec","block_type":"box","text":"requirements set by the relevant clearinghouse, as well as margin requirements mandated by the","page_number":112,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"cbb73eec-77be-47b7-acbd-3ebdde917d4b","block_type":"box","text":"CFTC, SEC and/or federal prudential regulators. In addition, futures commission merchants (“FCMs”),","page_number":112,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"d589c8c0-40a9-4295-a582-0c37eb21ca02","block_type":"box","text":"who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":112,"box":{"x":116,"y":258,"width":697,"height":12}},{"id":"4a73985a-6bfd-4150-9cfe-b9e272a183c9","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond","page_number":112,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"812108ab-5c25-4438-a3fb-eeec8dfc5465","block_type":"box","text":"any regulatory and clearinghouse minimums subject to any restrictions on such discretion in the","page_number":112,"box":{"x":116,"y":289,"width":715,"height":12}},{"id":"6b790d34-b01f-485b-85bc-db5215994077","block_type":"box","text":"documentation between the FCM and the customer. These regulatory requirements may make it more","page_number":112,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"236cc32e-1040-4be4-adfb-f962f7f785e1","block_type":"box","text":"difficult and costly for the Funds to enter into highly tailored or customized transactions, potentially","page_number":112,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"a86f90d4-f660-4480-a5b1-1d5a23a2b7e1","block_type":"box","text":"rendering certain investment strategies impossible or not economically feasible. If a Fund decides to","page_number":112,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"92fe58b8-4238-41e0-99a5-fcd34382a279","block_type":"box","text":"execute and clear cleared OTC derivatives and/or futures contracts through execution facilities,","page_number":112,"box":{"x":116,"y":351,"width":712,"height":12}},{"id":"df92f920-9a41-410f-97ee-cb6c7330f0c9","block_type":"box","text":"exchanges or clearinghouses, either indirectly through an executing broker, clearing member FCM or","page_number":112,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"b2fb8ee6-9c7c-484f-9ae8-0f3817e5343d","block_type":"box","text":"as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":112,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"070bb19f-54ce-4ae5-9e9f-bcc958558e64","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":112,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"05428878-88fc-4693-becd-6747ea9a0172","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not","page_number":112,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"556fd3e2-a397-42b0-8635-aa3f109ffe16","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":112,"box":{"x":116,"y":444,"width":759,"height":12}},{"id":"2da8af9d-89d5-4ea4-908f-020f90ab9a6f","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":112,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"67999745-5b51-4c57-b3f8-173282ee108e","block_type":"box","text":"clearing member customer to meet its obligations to its clearing member. Such scenario could arise","page_number":112,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"e3ca5dbb-20a9-4d5d-81f9-66fe0fe1eda1","block_type":"box","text":"due to a default by the clearing member on its obligations to the clearinghouse simultaneously with a","page_number":112,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"336eabcf-bd9e-487a-bc45-e4a415a8c2f4","block_type":"box","text":"customer’s failure to meet its obligations to the clearing member.","page_number":112,"box":{"x":116,"y":506,"width":485,"height":12}},{"id":"9ed7912c-cc7f-4dba-856f-d6f059da4363","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they","page_number":112,"box":{"x":117,"y":537,"width":742,"height":12}},{"id":"db5dcee1-062e-4cf1-80d8-9df9889f3a4a","block_type":"box","text":"clear their customers’ cleared OTC derivatives and futures contracts, instead of using such initial","page_number":112,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"19b3f81a-a8e8-4d89-913e-f64c0b9f2202","block_type":"box","text":"margin in their businesses, as was widely permitted for OTC derivatives before Dodd-Frank. While an","page_number":112,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"b68a8cca-9d3a-47d6-8683-42ef28c08af0","block_type":"box","text":"FCM may require its customer to post initial margin in excess of clearinghouse requirements, and","page_number":112,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"cac90d3e-6e06-4b13-b3d2-c5770a2dc56c","block_type":"box","text":"certain clearinghouses may share a portion of their earnings on initial margin with their clearing","page_number":112,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"2bacbd71-5816-4d75-a388-200b0c79dc41","block_type":"box","text":"members, some portion of the initial margin that is passed through to the clearinghouse does not","page_number":112,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"d53f139d-c95b-449c-8f22-d4d91ef1be72","block_type":"box","text":"generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on initial","page_number":112,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"3aabc1f9-5b61-468c-8585-c4676a969f25","block_type":"box","text":"margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives","page_number":112,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"5987d09f-458b-4796-91e6-ce93a1fd1d7a","block_type":"box","text":"may cause FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives","page_number":112,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"3e474a74-10a1-4fa5-83a0-ad251745f6a6","block_type":"box","text":"than swap dealers will provide for non-cleared OTC derivatives. Furthermore, customers, including the","page_number":112,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"1ba3e815-c89d-47e5-acd7-ef762cdb18ad","block_type":"box","text":"Funds, are subject to additional fees payable to FCMs with respect to cleared OTC derivatives, which","page_number":112,"box":{"x":117,"y":692,"width":751,"height":12}},{"id":"cc846578-f737-4a58-8e70-599b69d94b47","block_type":"box","text":"may raise the cost to Funds of clearing as compared to trading non-cleared OTC derivatives bilaterally.","page_number":112,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"9c5adfd6-f6aa-41ba-8056-c58e96f15f68","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are","page_number":112,"box":{"x":116,"y":738,"width":710,"height":12}},{"id":"a9a1fe5b-b582-41ac-b98a-afad010007e1","block_type":"box","text":"required to exchange variation margin with a Fund and may be required by applicable regulations to","page_number":112,"box":{"x":117,"y":754,"width":740,"height":12}},{"id":"b82c4165-1a12-43c5-99de-0594110f3173","block_type":"box","text":"collect (and in some cases exchange) initial margin with a Fund. Both initial and variation margin may","page_number":112,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"8ef5c2de-a0fd-4987-b540-249058478389","block_type":"box","text":"be comprised of cash and/or securities, subject to applicable regulatory haircuts and other restrictions.","page_number":112,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"a0bcbb46-5b38-4988-9879-f443bd34cd77","block_type":"box","text":"Shares of investment companies (other than certain money market funds) may not be posted as","page_number":112,"box":{"x":116,"y":800,"width":713,"height":12}},{"id":"609cc9d0-70a1-4def-9936-f0dfbe8cb4ef","block_type":"box","text":"collateral under applicable regulations.","page_number":112,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"9c111ec3-4e32-4563-965f-132652ebf02a","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to","page_number":112,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"01aa4d63-b3da-4dbb-bee5-4249993bc9b8","block_type":"box","text":"evaluate and monitor) speculative position limits (“position limits”) on the maximum speculative position","page_number":112,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"f90ebb6e-26af-4d7f-bde3-0c379d9d2484","block_type":"box","text":"which any person, or group of persons acting in concert, may hold or control in particular contracts. In","page_number":112,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"6eebcce9-6197-4bf4-bf7b-c317bcba0aa5","block_type":"box","text":"II-18","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a142d172-411b-48df-b1f4-3eb9ab0bcf29","block_type":"box","text":"NM1026U-6004408-112/267","page_number":112,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6e673446-d286-4fe8-b545-c91f1bb45553","block_type":"box","text":"addition, U.S. federal position limits apply to swaps that are economically equivalent to futures","page_number":113,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"0db3bef7-8292-43a7-871f-a0461e3937b9","block_type":"box","text":"contracts on certain agricultural, metals and energy commodities. All positions owned or controlled by","page_number":113,"box":{"x":116,"y":103,"width":758,"height":12}},{"id":"c773866a-ec7c-4d11-8b48-260e5415e94a","block_type":"box","text":"the same person or entity, even if in different accounts, must be aggregated for purposes of complying","page_number":113,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"211aba62-53d7-4a54-829a-5c6a076d6e11","block_type":"box","text":"with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits, it","page_number":113,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"1f59dbfd-9410-47cb-9c78-b39257f8a475","block_type":"box","text":"is possible that different clients managed by the Manager and its affiliates may be aggregated for this","page_number":113,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"4df50640-4f0b-4ee8-a06a-039e56ca66cb","block_type":"box","text":"purpose. Therefore, the trading decisions of the Manager may have to be modified and positions held","page_number":113,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"f5d77d9c-8c19-4a0f-baa2-f689f1e3cfb6","block_type":"box","text":"by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions","page_number":113,"box":{"x":117,"y":180,"width":757,"height":12}},{"id":"b6d1a4d0-e3d3-4045-ae3e-c723ccc27a9e","block_type":"box","text":"or the elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A","page_number":113,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"ea0592d8-c4f5-4fe2-90cb-19638b9a7c7c","block_type":"box","text":"violation of position limits could also lead to regulatory action materially adverse to a Fund’s investment","page_number":113,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"acc5bcc4-1717-4120-bb4d-e03dcef91389","block_type":"box","text":"strategy. A Fund may also be affected by other regimes, including those of the European Union and","page_number":113,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"da8e973a-319c-4dfc-9956-7eb4fcd06700","block_type":"box","text":"United Kingdom, and trading venues that impose position limits on commodity derivative contracts.","page_number":113,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"b5927df6-7f37-4fe9-b186-e5f471947b62","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":113,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"33125a13-014a-4b69-92fd-6a748e8d90af","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed,","page_number":113,"box":{"x":386,"y":275,"width":489,"height":12}},{"id":"a26c953a-714b-490f-8623-59cc86953162","block_type":"box","text":"or may propose in the future, legislation similar to Dodd-Frank or other legislation that could increase","page_number":113,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"2d82e3c2-6025-43bb-a963-0a48aedef968","block_type":"box","text":"the costs of participating in, or otherwise adversely impact the liquidity of, participating in the","page_number":113,"box":{"x":116,"y":306,"width":689,"height":12}},{"id":"c2c65d08-4b44-4bdc-b15d-df7511b94883","block_type":"box","text":"commodities markets. For example, the European Market Infrastructure Regulation (Regulation (EU)","page_number":113,"box":{"x":116,"y":321,"width":752,"height":12}},{"id":"1f842588-1a57-4913-a677-3e95bc1aa441","block_type":"box","text":"No 648/2012) (“EMIR”) introduced certain requirements in respect of OTC derivatives including: (i) the","page_number":113,"box":{"x":117,"y":337,"width":761,"height":12}},{"id":"f06b00bc-3c72-4348-85a6-749378204a11","block_type":"box","text":"mandatory clearing of OTC derivative contracts declared subject to the clearing obligation; (ii) risk","page_number":113,"box":{"x":117,"y":352,"width":728,"height":12}},{"id":"c6ff4338-44dd-4b2b-ab41-51367fb51f01","block_type":"box","text":"mitigation techniques in respect of uncleared OTC derivative contracts, including the mandatory","page_number":113,"box":{"x":117,"y":368,"width":714,"height":12}},{"id":"8da55dd2-7bec-4479-8593-8f7f0ce2a2d8","block_type":"box","text":"margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping requirements in","page_number":113,"box":{"x":117,"y":383,"width":765,"height":12}},{"id":"dcc33ce3-da75-43b7-8d7e-d6be00417289","block_type":"box","text":"respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":113,"box":{"x":117,"y":399,"width":703,"height":12}},{"id":"858742b9-2b60-4615-bab6-6096332d91d1","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments","page_number":113,"box":{"x":117,"y":414,"width":688,"height":12}},{"id":"c561cdbc-a56e-4bfb-9c9c-dca42277c5ef","block_type":"box","text":"Regulation (Regulation (EU) No 600/2014) (together “MiFID II”), which have applied since January 3,","page_number":113,"box":{"x":117,"y":430,"width":753,"height":12}},{"id":"71097813-645d-4524-97a5-005c33faeef5","block_type":"box","text":"2018, govern the provision of investment services and activities in relation to, as well as the organized","page_number":113,"box":{"x":116,"y":445,"width":762,"height":12}},{"id":"dfb22358-d52c-4120-9e1e-fc4a1971cbbf","block_type":"box","text":"trading of, financial instruments such as shares, bonds, units in collective investment schemes and","page_number":113,"box":{"x":116,"y":461,"width":738,"height":12}},{"id":"20c29e6a-74d0-422d-9666-b8d42dd98a4a","block_type":"box","text":"derivatives. In particular, MiFID II requires European Union Member States to apply position limits to","page_number":113,"box":{"x":116,"y":476,"width":749,"height":12}},{"id":"c7861ee7-fabf-445c-94cd-2c10bc527097","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":113,"box":{"x":116,"y":492,"width":754,"height":12}},{"id":"504b0946-f5cd-449b-a938-466f990118e1","block_type":"box","text":"Union trading venues and in “economically equivalent” OTC contracts. If the requirements of EMIR and","page_number":113,"box":{"x":117,"y":507,"width":769,"height":12}},{"id":"e57711a9-832d-4681-b66b-34fc13db2205","block_type":"box","text":"MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":113,"box":{"x":117,"y":523,"width":550,"height":12}},{"id":"f01187c3-0035-4b37-b6ad-b11e724ac79c","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain","page_number":113,"box":{"x":117,"y":555,"width":742,"height":13}},{"id":"36b5d929-62b1-43af-b998-93cd6da3c8da","block_type":"box","text":"prudentially regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to","page_number":113,"box":{"x":117,"y":571,"width":764,"height":12}},{"id":"dfd89c45-91d4-4a61-8b14-e4d6a1f36e7b","block_type":"box","text":"include in their derivatives contracts and certain other financial contracts, terms that delay or restrict","page_number":113,"box":{"x":117,"y":586,"width":745,"height":13}},{"id":"ccbce796-e170-48fe-8e85-b244e0a4d9e4","block_type":"box","text":"the rights of counterparties (such as the Funds) to terminate such contracts, foreclose upon collateral,","page_number":113,"box":{"x":116,"y":602,"width":761,"height":12}},{"id":"a1fd5702-f6e4-4f23-8ff0-8442803266a4","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the prudentially","page_number":113,"box":{"x":116,"y":617,"width":725,"height":13}},{"id":"089a8699-631a-4172-9fd1-d56c0607acff","block_type":"box","text":"regulated entity and/or its affiliates are subject to certain types of resolution or insolvency proceedings.","page_number":113,"box":{"x":117,"y":633,"width":765,"height":12}},{"id":"e1567907-1a5d-44ac-9015-2adc1be8728d","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":113,"box":{"x":116,"y":648,"width":746,"height":13}},{"id":"9368d5bf-b9f1-4d32-a29c-fac6124336fb","block_type":"box","text":"counterparties located in those jurisdictions. In particular, in the United Kingdom and the European","page_number":113,"box":{"x":116,"y":664,"width":731,"height":12}},{"id":"564cddbc-1a81-41ab-b47b-592a85b743d4","block_type":"box","text":"Union, governmental authorities could reduce, eliminate or convert to equity the liabilities to a Fund of","page_number":113,"box":{"x":117,"y":680,"width":753,"height":12}},{"id":"d3fbbb64-692c-492f-ad66-d7a9d9638c6b","block_type":"box","text":"a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":113,"box":{"x":116,"y":695,"width":763,"height":12}},{"id":"97417e81-79d9-4c64-a674-f76ea50001f9","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely","page_number":113,"box":{"x":116,"y":711,"width":726,"height":12}},{"id":"3f059984-20f8-453a-ad16-212c39a33cda","block_type":"box","text":"affect a Fund’s ability to terminate existing derivatives contracts, exercise default rights or satisfy","page_number":113,"box":{"x":116,"y":726,"width":716,"height":12}},{"id":"6eaa05ea-e5fd-454f-a1ea-ffaa44b2b420","block_type":"box","text":"obligations owed to it with collateral received under such contracts.","page_number":113,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"58cf4162-8a39-415f-9d56-6a7c410c7b34","block_type":"box","text":"Risk Factors in Derivatives.","page_number":113,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"3c9a74b5-fedc-4306-875e-7dcba54c52e7","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":113,"box":{"x":116,"y":798,"width":620,"height":12}},{"id":"e8750fdb-dd10-4f95-a3fd-9576ee6b4ade","block_type":"box","text":"Correlation Risk —","page_number":113,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"bf7a7feb-43f5-41bd-895a-5141ddf1cc48","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the","page_number":113,"box":{"x":240,"y":831,"width":631,"height":12}},{"id":"2a11ad20-6316-47bb-89e2-3e2030f6329e","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":113,"box":{"x":116,"y":846,"width":765,"height":13}},{"id":"e0acbcb9-1e7e-4f6e-8b8a-380a0ffedc8e","block_type":"box","text":"Fund seeks exposure. There are a number of factors which may prevent a derivative instrument from","page_number":113,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"0b4e75fb-78df-4687-8a03-d5946b347bb0","block_type":"box","text":"achieving the desired correlation (or inverse correlation) with an underlying asset, rate or index, such","page_number":113,"box":{"x":116,"y":877,"width":753,"height":13}},{"id":"89e1c690-c862-4dc4-84a2-43b9d0932a50","block_type":"box","text":"II-19","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2033b0ba-41bc-4a32-a8c3-7d465507d18b","block_type":"box","text":"NM1026U-6004408-113/267","page_number":113,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"23f0873d-c132-483c-b992-c37eeadf90e5","block_type":"box","text":"as the impact of fees, expenses and transaction costs, the timing of pricing, and disruptions or illiquidity","page_number":114,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"6485b652-3ef5-4541-9c33-b0dc462dbb15","block_type":"box","text":"in the markets for such derivative instrument.","page_number":114,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"1fab5c88-4a24-4ac7-9f59-fb0000d76d8d","block_type":"box","text":"Counterparty Risk —","page_number":114,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"984dd30a-686f-4337-8492-c47144a96ee8","block_type":"box","text":"—","page_number":114,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"43908642-edfc-48af-92c4-b4a641c735ad","block_type":"box","text":"the risk that a derivatives transaction counterparty will be unable or unwilling to","page_number":114,"box":{"x":277,"y":134,"width":590,"height":12}},{"id":"3a19e541-1b39-45aa-99a7-f3d2cb63d0fa","block_type":"box","text":"make payments or otherwise honor its obligations to a Fund and the related risks of having","page_number":114,"box":{"x":117,"y":149,"width":678,"height":12}},{"id":"77f55f48-ccc3-4441-83ed-321bb255f4b6","block_type":"box","text":"concentrated exposure to such a counterparty. In particular, derivatives traded in OTC markets often","page_number":114,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"94dfc5a7-d3bf-4f55-9ffe-9e1bdd9858b2","block_type":"box","text":"are not guaranteed by an exchange or clearing corporation and often do not require payment of","page_number":114,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"e7083a44-595b-46f7-a92b-b17181a3f237","block_type":"box","text":"margin, and to the extent that the Fund has unrealized gains in such instruments or has deposited","page_number":114,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"ed334842-cee4-44e0-828c-0270286ff7c9","block_type":"box","text":"collateral with its counterparties the Fund is at risk that its counterparties will become bankrupt or","page_number":114,"box":{"x":116,"y":211,"width":725,"height":12}},{"id":"670c6dca-3250-4d7f-ab32-d716a939be0c","block_type":"box","text":"otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":114,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"90e3f38b-5bcd-42c5-b461-1b381def0832","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or","page_number":114,"box":{"x":116,"y":242,"width":768,"height":12}},{"id":"49b9261b-6768-44df-bfb8-d340d018d820","block_type":"box","text":"that have provided the Fund with a third-party guaranty or other credit support. When a Fund enters","page_number":114,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"ab093aa6-b9b6-47a2-af2c-a9d637e79a62","block_type":"box","text":"into a derivatives transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is","page_number":114,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"c844ee10-7624-40a3-b6d0-97bf48307ecb","block_type":"box","text":"subject to the credit risk of the clearing house and the clearing member through which it holds its","page_number":114,"box":{"x":116,"y":289,"width":722,"height":12}},{"id":"dfb81fbf-4b4d-4d35-ab92-f56f32ef5d4f","block_type":"box","text":"cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared","page_number":114,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"4f24bec1-af30-4837-a39b-60117856de40","block_type":"box","text":"is concentrated in a few clearing houses and increasingly fewer clearing members. It is not clear how","page_number":114,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"ab0427f9-9d02-45b3-b93e-e9b12bc7abf6","block_type":"box","text":"an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a","page_number":114,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"c6c0e33d-6523-4be5-aca8-546c62dfb82b","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":114,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"51435556-2455-4afb-a5ca-38341f7d1c7e","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":114,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"78148e5c-db32-4be2-9184-bd187d4e9065","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":114,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"8486d8ef-55b9-418d-8b84-d422bda8d219","block_type":"box","text":"cleared derivatives. Although a clearing member is required to segregate assets from customers with","page_number":114,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"78d35e11-0d05-4293-abc1-a95a94bdb004","block_type":"box","text":"respect to cleared derivatives positions from the clearing member’s proprietary assets, if a clearing","page_number":114,"box":{"x":117,"y":413,"width":736,"height":12}},{"id":"91486b7d-cf35-4fe3-804a-0d8e01c34f5a","block_type":"box","text":"member does not comply with the applicable regulations, or in the event of fraud or misappropriation of","page_number":114,"box":{"x":117,"y":428,"width":768,"height":12}},{"id":"fea95a56-9034-43a0-8326-e122aeec1cfc","block_type":"box","text":"customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an","page_number":114,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"7c314458-6897-4cad-a889-8292e9af9c2f","block_type":"box","text":"insolvency of the clearing member with respect to the assets held by the clearing member.","page_number":114,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"e065349d-09ca-421b-9709-1d7348f1475c","block_type":"box","text":"Credit Risk —","page_number":114,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"abddfef5-b721-4c64-b4bd-487efa1a0446","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be","page_number":114,"box":{"x":203,"y":490,"width":668,"height":12}},{"id":"91e8284c-c7ba-4ff1-86c6-6734a16a84d0","block_type":"box","text":"able to honor its financial obligations.","page_number":114,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"383de9ae-2c00-421e-856e-8c691dbc89f0","block_type":"box","text":"Currency Risk —","page_number":114,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"574a8f0a-4e7e-46a1-8b00-ea2d906ec8f0","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely","page_number":114,"box":{"x":226,"y":537,"width":625,"height":12}},{"id":"a73f5de3-626b-4e7c-80b3-25d1eb7a9380","block_type":"box","text":"affect the value (in U.S. dollar terms) of a derivative.","page_number":114,"box":{"x":116,"y":552,"width":392,"height":12}},{"id":"f6a51777-75e2-49d9-ae33-ce0ca3650942","block_type":"box","text":"Illiquidity Risk —","page_number":114,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"8a30020d-5b69-4dab-ae2f-82e31f431554","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at","page_number":114,"box":{"x":222,"y":583,"width":644,"height":12}},{"id":"7c7576ef-e830-45d4-9106-5441d5df42c2","block_type":"box","text":"the time or at the price desired by a Fund in connection with payments of margin, collateral, or","page_number":114,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"610670d9-eb66-40d7-8747-bd262321b31d","block_type":"box","text":"settlement payments. There can be no assurance that a Fund will be able to unwind or offset a","page_number":114,"box":{"x":116,"y":614,"width":708,"height":12}},{"id":"e79fbf7e-3995-460e-a16f-60ef9f0569e5","block_type":"box","text":"derivative at its desired price, in a secondary market or otherwise. It may, therefore, not be possible for","page_number":114,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"f54037cd-9627-4179-bc7b-a6da0febabb4","block_type":"box","text":"the Fund to unwind its position in a derivative without incurring substantial losses (if at all). Certain","page_number":114,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"19ba0b47-1fdc-48c5-a31f-6fb12085aa71","block_type":"box","text":"OTC derivatives, including swaps and OTC options, involve substantial illiquidity risk. Illiquidity may","page_number":114,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"747a93eb-9ff0-48bd-b1ee-110bf1dbc047","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":114,"box":{"x":116,"y":676,"width":723,"height":11}},{"id":"8c2f3988-88a3-4194-92e4-24a2f4bc3e35","block_type":"box","text":"therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":114,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"62cb034a-64b6-4bff-92bf-b2b8fadec52c","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which","page_number":114,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"1c8f47c2-c517-40e9-a483-6dbb66207b16","block_type":"box","text":"the Manager anticipates the Fund can receive on each business day at least two independent bids or","page_number":114,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"4dcf1db5-a6aa-4ff6-89ce-3aa5c16173fe","block_type":"box","text":"offers, unless a quotation from only one dealer is available, in which case that dealer’s quotation may","page_number":114,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"7d1c38e6-76af-4d5a-88fa-61aa7589ec71","block_type":"box","text":"be used. The illiquidity of the derivatives markets may be due to various factors, including congestion,","page_number":114,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"6c019d7c-b96c-4d95-a415-bc66731d9734","block_type":"box","text":"disorderly markets, limitations on deliverable supplies, the participation of speculators, government","page_number":114,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"34077561-869d-4c8a-a91c-31b9fe99e654","block_type":"box","text":"regulation and intervention, and technical and operational or system failures. In addition, the liquidity of","page_number":114,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"6206d143-f22e-4c6b-a901-bddab24c49b5","block_type":"box","text":"a market in an exchange-traded derivative contract may be adversely affected by “daily price","page_number":114,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"2f586c0b-e3d2-4cfd-9ea0-e7b622c121cf","block_type":"box","text":"fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":114,"box":{"x":116,"y":816,"width":747,"height":12}},{"id":"4d5dcd5c-6cea-4b3f-92bb-a78592c2583b","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract,","page_number":114,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"830c1807-86b0-48b9-bece-911f961a234c","block_type":"box","text":"no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open","page_number":114,"box":{"x":117,"y":847,"width":717,"height":12}},{"id":"0cb0630f-1c22-4d79-9cb3-f4bd4d7bd065","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":114,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"7689ec9a-d2b5-4210-9b1e-4fdaf47fc3d7","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":114,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"1447102b-e66d-449d-a06e-a356806a8ba8","block_type":"box","text":"II-20","page_number":114,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f88301c5-91bd-487a-92f3-7b285bfac4bb","block_type":"box","text":"NM1026U-6004408-114/267","page_number":114,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"aa448d46-6ad1-4859-be2c-76d6374f65b3","block_type":"box","text":"Fund would continue to be required to make daily cash payments of variation margin in the event of","page_number":115,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"9320ed85-f977-4b50-8a9b-420ed2f37c12","block_type":"box","text":"adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell","page_number":115,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"fabc4273-54a2-4804-969a-f5836cbf940d","block_type":"box","text":"portfolio securities to meet daily variation margin requirements at a time when it may be","page_number":115,"box":{"x":117,"y":118,"width":654,"height":12}},{"id":"ac1e7b6a-9841-460d-b517-0ad80c2156de","block_type":"box","text":"disadvantageous to do so.","page_number":115,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"2c33dd5d-2ee5-4e23-85c9-1838fa5e7a57","block_type":"box","text":"Index Risk","page_number":115,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"bfea2a54-71c7-4294-9489-5301b4c9e988","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":115,"box":{"x":194,"y":166,"width":656,"height":12}},{"id":"9f8a896a-d41f-4d37-933f-cb55012847ec","block_type":"box","text":"associated with changes in that index. If the index changes, the Fund could receive lower interest","page_number":115,"box":{"x":116,"y":181,"width":728,"height":12}},{"id":"847c3161-61ee-48a9-a5b8-7d3692d00a67","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":115,"box":{"x":117,"y":197,"width":762,"height":12}},{"id":"2065b96b-47c7-4068-a57d-053a33668b07","block_type":"box","text":"for such derivative.","page_number":115,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"310c77d8-c776-4b2a-b56b-1610e2ad84d0","block_type":"box","text":"Legal Risk","page_number":115,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"6b2c930a-a8f9-425f-ac1f-3f0f618bc9b8","block_type":"box","text":"k — the risk of insufficient documentation, insufficient capacity or authority of counterparty, or","page_number":115,"box":{"x":194,"y":245,"width":689,"height":12}},{"id":"c132bf53-7331-48a9-b3f1-c32b58333f2e","block_type":"box","text":"legality or enforceability of a contract.","page_number":115,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"fcea01b3-e994-476d-87cb-8c3de1697a14","block_type":"box","text":"Leverage Risk —","page_number":115,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"9c5d1516-30a4-4397-a0c1-c0002f270905","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and","page_number":115,"box":{"x":228,"y":293,"width":619,"height":12}},{"id":"af935aa6-6372-4981-9937-817c0a7d83f6","block_type":"box","text":"losses. Relatively small market movements may result in large changes in the value of a derivatives","page_number":115,"box":{"x":117,"y":308,"width":744,"height":12}},{"id":"c345fd83-b264-47ca-8adf-fa1b6d3ca48f","block_type":"box","text":"position and can result in losses that greatly exceed the amount originally invested.","page_number":115,"box":{"x":117,"y":324,"width":621,"height":12}},{"id":"c687dffd-a89c-4307-9e98-ef800bae8f28","block_type":"box","text":"Market Risk —","page_number":115,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"89a97f99-4ce0-4981-be36-235f4de9345a","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to","page_number":115,"box":{"x":209,"y":356,"width":653,"height":12}},{"id":"9a623205-625a-4748-b6b2-3e559dc0deb4","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":115,"box":{"x":116,"y":371,"width":719,"height":13}},{"id":"339c2d02-6018-4c3f-b925-e7ccc4634ea0","block_type":"box","text":"adverse movement, a Fund may be required to pay substantial additional margin to maintain its","page_number":115,"box":{"x":116,"y":387,"width":713,"height":12}},{"id":"225044e1-105c-4e21-a3d8-f8c104bbdfa2","block_type":"box","text":"position or the Fund’s returns may be adversely affected.","page_number":115,"box":{"x":117,"y":402,"width":427,"height":13}},{"id":"d6f4ae6e-ce47-4c30-b2c5-a287f9596123","block_type":"box","text":"Operational Risk","page_number":115,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"d162f837-7128-4937-9e3a-6ba65b7158d1","block_type":"box","text":"k — the risk related to potential operational issues, including documentation issues,","page_number":115,"box":{"x":240,"y":435,"width":616,"height":12}},{"id":"bf359d7f-6e3b-4c53-8399-a8759f3410a9","block_type":"box","text":"settlement issues, systems failures, inadequate controls and human error.","page_number":115,"box":{"x":116,"y":450,"width":555,"height":12}},{"id":"7da818a9-c977-4e30-9126-e40bd78402a9","block_type":"box","text":"Valuation Risk —","page_number":115,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"f2b349fe-e7fe-41ee-84ad-71f243eaaf14","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the","page_number":115,"box":{"x":228,"y":483,"width":614,"height":12}},{"id":"c8345659-eae5-40fd-bf5c-0d621c90935a","block_type":"box","text":"market. This is possible especially in times of market distress, since many market participants may be","page_number":115,"box":{"x":117,"y":498,"width":760,"height":12}},{"id":"75acfa09-ab13-4046-962e-1e6439b41386","block_type":"box","text":"reluctant to purchase complex instruments or quote prices for them.","page_number":115,"box":{"x":117,"y":514,"width":507,"height":12}},{"id":"2134b8ff-b23a-4189-a3bc-2c7f8ec4284c","block_type":"box","text":"Volatility Risk —","page_number":115,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"78bb252f-82a9-427a-a8e1-08c58e851555","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time","page_number":115,"box":{"x":220,"y":546,"width":619,"height":12}},{"id":"ca222be6-13de-4829-8131-72d221271eab","block_type":"box","text":"period.","page_number":115,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"b8ed5dc8-d120-4b52-a9ea-5bf8e905af74","block_type":"box","text":"Types of Derivatives Transactions.","page_number":115,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"af002f90-1ac3-4ad2-b90f-b3dde241a792","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and","page_number":115,"box":{"x":116,"y":618,"width":715,"height":12}},{"id":"087d0e4b-2590-43f8-92d8-329084840665","block_type":"box","text":"restrictions, including the following:","page_number":115,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"584706fd-875a-49e8-9704-ba496958d1fb","block_type":"box","text":"Futures.","page_number":115,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"7090422d-e402-47a7-a63f-5fbacc4e3ff4","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are","page_number":115,"box":{"x":116,"y":690,"width":713,"height":12}},{"id":"8a38d318-c757-4ac4-a486-26910007cadb","block_type":"box","text":"standardized, exchange-traded contracts that require a purchaser to take delivery, and a seller to make","page_number":115,"box":{"x":116,"y":705,"width":767,"height":12}},{"id":"b2eefa40-24e9-42ec-a7d0-560fc71c7523","block_type":"box","text":"delivery, of a specified amount of an asset at a specified future date and price. Upon purchasing or","page_number":115,"box":{"x":116,"y":721,"width":734,"height":12}},{"id":"ae29f8f1-523e-4e12-b6d6-796893c58805","block_type":"box","text":"selling a futures contract, a Fund is required to deposit initial margin equal to a percentage of the","page_number":115,"box":{"x":116,"y":736,"width":718,"height":12}},{"id":"6a5b9f12-88f6-4dd4-8eb5-23f70b845d28","block_type":"box","text":"contract value. Futures contracts are marked to market daily for the duration of the contract, and the","page_number":115,"box":{"x":116,"y":752,"width":743,"height":12}},{"id":"bfeb8599-d178-4c93-a9bf-b8d3cc2d53f3","block_type":"box","text":"Fund will either post additional margin or be entitled to a payment, as applicable, based on the","page_number":115,"box":{"x":117,"y":767,"width":699,"height":12}},{"id":"49bc59c7-2d04-4270-8b4f-7290366a8b86","block_type":"box","text":"mark-to-market movement of the contract.","page_number":115,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"a4a1846a-f313-4c6d-a8d4-a35a132af966","block_type":"box","text":"A Fund may sell a futures contract prior to the completion","page_number":115,"box":{"x":116,"y":815,"width":425,"height":12}},{"id":"3c6183f9-8edd-4d33-ba6b-baf4f104f6ec","block_type":"box","text":"of its term to limit its risk of loss from a","page_number":115,"box":{"x":548,"y":815,"width":284,"height":10}},{"id":"0c88465f-b8eb-4328-b49e-5f21dd5c9d5d","block_type":"box","text":"decline in the market value of portfolio holdings correlated with the futures contract. However, in the","page_number":115,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"6318ff79-dee6-4853-9f7f-ed933001bd37","block_type":"box","text":"event the market value of the portfolio holdings correlated with the futures contract increases rather","page_number":115,"box":{"x":116,"y":846,"width":742,"height":12}},{"id":"4b47086c-60c6-44fd-9787-6db91488c5c7","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":115,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"698c1e59-5fba-43a5-9639-36399b0be68a","block_type":"box","text":"holdings than would have been realized without the purchase of the futures contract.","page_number":115,"box":{"x":117,"y":877,"width":631,"height":12}},{"id":"cebd49fd-c5da-4264-9e22-b4e5b03e8fc5","block_type":"box","text":"II-21","page_number":115,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"daafec5c-7a38-4094-a493-7bf58424648a","block_type":"box","text":"NM1026U-6004408-115/267","page_number":115,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"419e001e-6b87-4125-bf21-dfe80ba24ee5","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing","page_number":116,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"6a9dff0e-1ebc-4b1b-bd7d-96abf30fea6c","block_type":"box","text":"securities or commodities directly. In the event that such securities or commodities decline in value or a","page_number":116,"box":{"x":116,"y":103,"width":772,"height":12}},{"id":"057615b2-96fa-47d8-9146-127dda92f401","block_type":"box","text":"Fund determines not to complete an anticipatory hedge transaction relating to a futures contract,","page_number":116,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"fc0a3972-98f3-4105-9f76-4e1e495483b9","block_type":"box","text":"however, the Fund may realize a loss relating to the futures position.","page_number":116,"box":{"x":117,"y":134,"width":512,"height":12}},{"id":"412a482c-084c-43ce-8a81-dbf1a38b110a","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may","page_number":116,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"58ec636f-3e89-4c20-b099-b4ac4aa10559","block_type":"box","text":"be required to liquidate positions or may not be able to fully implement trading instructions. Any such","page_number":116,"box":{"x":117,"y":181,"width":750,"height":12}},{"id":"5c13e9ed-359a-4262-8913-f8c52b6a15d9","block_type":"box","text":"liquidation or limited implementation could result in substantial costs to a Fund. See “— Regulation of","page_number":116,"box":{"x":117,"y":196,"width":754,"height":13}},{"id":"30f6a06b-6735-41f5-9a5e-75d62d2cfe3e","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":116,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"e1d2e428-ede2-43a4-9a1b-1357f9d9b3c2","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including","page_number":116,"box":{"x":116,"y":244,"width":706,"height":12}},{"id":"70aff844-70cd-4b00-a558-3bc0ee727d02","block_type":"box","text":"financial futures and stock indices. Generally, these strategies would be used under the same market","page_number":116,"box":{"x":116,"y":259,"width":757,"height":13}},{"id":"e89e1ce1-ffb6-4f5a-8c39-d82a518412c2","block_type":"box","text":"and market sector conditions (","page_number":116,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"0faa204d-bb9c-43d7-a00e-ed6f45d47c43","block_type":"box","text":"i.e.","page_number":116,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"8f20bf78-cad0-448d-b158-7584a4fb2028","block_type":"box","text":", conditions relating to specific types of investments) in which the","page_number":116,"box":{"x":365,"y":275,"width":485,"height":12}},{"id":"7b2e4397-9c24-4502-9264-431e93c8611f","block_type":"box","text":"Fund entered into futures transactions. A Fund may purchase put options or write call options on","page_number":116,"box":{"x":117,"y":290,"width":720,"height":13}},{"id":"ae598e98-517b-48bd-a70e-fca59dc81e21","block_type":"box","text":"futures contracts and stock indices in lieu of selling the underlying futures contract in anticipation of a","page_number":116,"box":{"x":116,"y":306,"width":754,"height":12}},{"id":"1227cdcb-3c92-47e2-8771-b79bc19255a2","block_type":"box","text":"decrease in the market value of its securities. Similarly, a Fund can purchase call options, or write put","page_number":116,"box":{"x":116,"y":321,"width":759,"height":13}},{"id":"bab30c4f-4c60-47c2-a102-884e99139e6a","block_type":"box","text":"options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":116,"box":{"x":116,"y":337,"width":705,"height":12}},{"id":"afb9e7e1-ba3d-4c7c-afa8-0b84eb7482b6","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of","page_number":116,"box":{"x":116,"y":352,"width":707,"height":13}},{"id":"600082dc-da97-4658-8e3b-0284d119274b","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":116,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"4b440fe9-e448-41d6-96e3-82e0d993d360","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to","page_number":116,"box":{"x":116,"y":400,"width":748,"height":12}},{"id":"e57d26cb-f59e-4426-863f-b3fcd3aa6c98","block_type":"box","text":"futures contracts. These instruments may take a variety of forms, such as debt securities with interest","page_number":116,"box":{"x":116,"y":415,"width":759,"height":13}},{"id":"7b1edda3-7fab-4149-8211-03a270e130e7","block_type":"box","text":"or principal payments determined by reference to the value of a security, an index of securities or a","page_number":116,"box":{"x":116,"y":431,"width":740,"height":12}},{"id":"f10c1e8f-bcaa-4d8f-8012-ea7d09c0e393","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":116,"box":{"x":116,"y":446,"width":764,"height":13}},{"id":"7a7a6f2e-60d8-4883-8056-ea939b860696","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":116,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"2fc9cf0f-9654-49dd-8b10-eeb23e27a13d","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage","page_number":116,"box":{"x":117,"y":494,"width":751,"height":12}},{"id":"7cf1c84c-6b8a-4aed-a0f8-fd6b338cf1a9","block_type":"box","text":"risk, illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the","page_number":116,"box":{"x":117,"y":509,"width":726,"height":13}},{"id":"592d6d9e-03d3-4715-9eea-683df9e82131","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":116,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"604253bc-e59b-43ef-b0fa-fffd456ee63e","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a","page_number":116,"box":{"x":117,"y":557,"width":771,"height":12}},{"id":"44d69b4a-7c0f-4704-be26-078c85f6fbd6","block_type":"box","text":"limit is set by a regulator, such as a government entity, on the total amount of specific greenhouse","page_number":116,"box":{"x":117,"y":572,"width":732,"height":13}},{"id":"8ac53fab-fdb9-40f3-a5bf-bbd3823866ba","block_type":"box","text":"gases, such as CO2, that can be emitted by regulated entities, such as manufacturers or energy","page_number":116,"box":{"x":116,"y":588,"width":720,"height":12}},{"id":"dd5148ee-b592-4be3-83ea-eb3633fe3b81","block_type":"box","text":"producers. The regulator then may issue or sell individual “emission allowances” to regulated entities,","page_number":116,"box":{"x":117,"y":603,"width":756,"height":13}},{"id":"15bcd976-6f5a-4768-a913-203f8daf9157","block_type":"box","text":"which can then be traded on the open market. Commodity futures contracts linked to the value of","page_number":116,"box":{"x":116,"y":619,"width":725,"height":12}},{"id":"51bd7e76-8faf-4700-bd62-53cd144a226f","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":116,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"48125653-7828-4a3d-95f7-6bae567885fb","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":116,"box":{"x":116,"y":666,"width":756,"height":13}},{"id":"8416de7b-aeb8-4982-8a96-5035937e172e","block_type":"box","text":"demand for carbon futures contracts. Changes in law, market conditions and expectations, position","page_number":116,"box":{"x":116,"y":682,"width":734,"height":12}},{"id":"4881b85d-8226-406a-8a22-d166f379d740","block_type":"box","text":"limits, collateral requirements, and other factors each can impact the supply of and demand for carbon","page_number":116,"box":{"x":117,"y":697,"width":758,"height":13}},{"id":"40635487-5861-4a17-b44e-08c3d0b1f620","block_type":"box","text":"futures contracts. The market for carbon futures contracts is still developing and may be subject to","page_number":116,"box":{"x":116,"y":713,"width":729,"height":12}},{"id":"608714f6-9e5a-4d71-8d85-15c6f483d904","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":116,"box":{"x":117,"y":728,"width":742,"height":13}},{"id":"cfcb368d-9540-434a-a3c5-3dd03b5ac6d7","block_type":"box","text":"desired price. Market disruptions or volatility can also make it difficult to find a counterparty willing to","page_number":116,"box":{"x":116,"y":744,"width":742,"height":12}},{"id":"ab2bf6a0-a9e0-49cc-acff-d0beb1bd403b","block_type":"box","text":"transact at a reasonable price and sufficient size.","page_number":116,"box":{"x":116,"y":759,"width":363,"height":12}},{"id":"36a03e8c-d6ef-4386-b817-bd45a76f871d","block_type":"box","text":"Swap Agreements.","page_number":116,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"9b7d4758-5e76-45b0-8b04-929826ee48aa","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap","page_number":116,"box":{"x":116,"y":815,"width":699,"height":12}},{"id":"7e9aced6-07b7-4c57-9a14-df846c55cc6a","block_type":"box","text":"agreements are OTC contracts entered into primarily by financial institutions and institutional investors","page_number":116,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"f94e76da-dd3a-4dc4-8856-e40e34a39eb8","block_type":"box","text":"which may or may not be cleared by a central clearinghouse. In a standard “swap” transaction, two","page_number":116,"box":{"x":116,"y":846,"width":738,"height":12}},{"id":"5c7a849c-6bac-4406-be97-6fda1413b0dc","block_type":"box","text":"parties agree to exchange the returns earned or realized from one or more underlying assets or rates","page_number":116,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"27ce643a-065f-4813-a958-caae069d3145","block_type":"box","text":"of return, which may be adjusted for an interest factor. The gross returns to be exchanged or","page_number":116,"box":{"x":116,"y":877,"width":693,"height":12}},{"id":"0f8333b9-a35d-4a9d-ac8a-17cfa49a4c81","block_type":"box","text":"II-22","page_number":116,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"363cef4a-afea-4057-9244-60a66e125e52","block_type":"box","text":"NM1026U-6004408-116/267","page_number":116,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6cafe8df-c0c3-4e6f-ac87-10d2b8b67a5d","block_type":"box","text":"“swapped” between the parties are generally calculated with respect to a “notional amount,”","page_number":117,"box":{"x":116,"y":87,"width":684,"height":12}},{"id":"cc1bb6cb-5f42-4e41-a376-4a772dd9c4aa","block_type":"box","text":"e.g.","page_number":117,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"e59c3817-9922-44c5-97a7-d37790f96c4f","block_type":"box","text":", the","page_number":117,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"f7828b6a-fe5b-4e07-aaee-005b3396c616","block_type":"box","text":"return or increase in value of a particular dollar amount invested at a particular interest rate, in a","page_number":117,"box":{"x":117,"y":102,"width":716,"height":12}},{"id":"56f80350-1abf-4c34-9d14-4765c54ef797","block_type":"box","text":"particular foreign currency, or in a “basket” of securities representing a particular index. The notional","page_number":117,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"1942f8bc-ef6d-4560-aa6e-04796ea369ff","block_type":"box","text":"amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":117,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"b130080a-6493-438c-a215-0c153111d1ae","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will","page_number":117,"box":{"x":116,"y":149,"width":736,"height":12}},{"id":"590a8774-0f15-4e73-a896-ae345d1e7859","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":117,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"a0b0e0cf-af48-47eb-bf0b-c1455e5b5c7f","block_type":"box","text":"relative values of the positions held by each party to the agreement. Swaps that are not cleared involve","page_number":117,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"aa7cb004-887b-4596-98c4-00963881370b","block_type":"box","text":"substantial counterparty risk. A Fund will typically attempt to mitigate this counterparty risk by entering","page_number":117,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"3d3694f0-ae5f-4a5b-85d3-cefcd37eb804","block_type":"box","text":"into swap agreements only with creditworthy entities that have substantial capital or that have provided","page_number":117,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"4b8ee966-3061-42c0-948b-511a76a4e1a9","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":117,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"dcd93c2e-8124-42cf-ae48-71814cb54a66","block_type":"box","text":"may be restricted by the tax rules applicable to registered investment companies.","page_number":117,"box":{"x":117,"y":242,"width":607,"height":12}},{"id":"e3eb1026-4434-454b-a01f-712101cedd38","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":117,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"8c7e56d8-66eb-42d2-848e-6c9c13f3c822","block_type":"box","text":"Certain Funds may enter into credit default swaps and","page_number":117,"box":{"x":450,"y":273,"width":389,"height":12}},{"id":"429e9ce4-b565-4c2a-97d0-d2eaa5d2cd8c","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":117,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"bc353cd5-41b4-45fe-ab69-0b39147c35a4","block_type":"box","text":"zed agreements in which the protection “buyer” pays","page_number":117,"box":{"x":503,"y":289,"width":378,"height":12}},{"id":"4f05c9ff-d68d-49ed-919f-db76214c0db2","block_type":"box","text":"the protection “seller” an up-front payment, or a periodic","page_number":117,"box":{"x":116,"y":304,"width":400,"height":12}},{"id":"11b5ff3a-b93d-427d-911e-9e62f08030f6","block_type":"box","text":"stream of payments, over the term of the contract,","page_number":117,"box":{"x":517,"y":304,"width":360,"height":12}},{"id":"502473d5-c228-4394-8676-7f079f9d11c0","block_type":"box","text":"provided generally that no credit event on a reference ob","page_number":117,"box":{"x":117,"y":320,"width":401,"height":12}},{"id":"ba8b1c65-b097-4dd5-9176-a46a91344f8f","block_type":"box","text":"ligation has occurred. If a credit event occurs, the","page_number":117,"box":{"x":520,"y":320,"width":353,"height":12}},{"id":"4774d735-6a47-404e-ab3c-0b3835d16352","block_type":"box","text":"seller generally must pay the buyer the difference","page_number":117,"box":{"x":116,"y":335,"width":355,"height":12}},{"id":"51278115-8d6e-4ec7-90e5-4a81eec1a071","block_type":"box","text":"between the notional amount of the contract and the","page_number":117,"box":{"x":472,"y":335,"width":375,"height":10}},{"id":"fcf779b5-bc1d-41db-8636-b98f91630244","block_type":"box","text":"value of a portfolio of securities issued by the refere","page_number":117,"box":{"x":116,"y":351,"width":357,"height":12}},{"id":"711240be-5995-4373-960c-29c0b7389d3d","block_type":"box","text":"rence entity. A Fund may be either the buyer or seller in","page_number":117,"box":{"x":473,"y":351,"width":395,"height":12}},{"id":"fa1cd865-d930-487a-84e1-47db259dca22","block_type":"box","text":"the transaction. The Funds may enter into credit default","page_number":117,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"1d18d8fb-07f9-40a9-85bb-f851650f8ff7","block_type":"box","text":"swaps that reference the obligations of a single","page_number":117,"box":{"x":515,"y":366,"width":338,"height":12}},{"id":"3290d3a0-0a67-4406-9147-77b5801ad0fb","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":117,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"b1e40e26-ed29-4603-9889-266f59d728d6","block_type":"box","text":"gations of entities that make up an index (“index CDS”). References to","page_number":117,"box":{"x":381,"y":382,"width":504,"height":12}},{"id":"750aa0f3-aac8-4c06-9ea9-962549261eb5","block_type":"box","text":"“credit default swaps” shall collectively refer to single-name CDS and index CDS.","page_number":117,"box":{"x":116,"y":397,"width":579,"height":12}},{"id":"ba4fae32-0ab1-49f4-8a28-be34404ac6ed","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not","page_number":117,"box":{"x":117,"y":428,"width":706,"height":12}},{"id":"8be0bdf1-bf7b-4686-afb7-ef977ed5855e","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":117,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"0544baef-825e-413d-8ef8-0fb6b42b75c2","block_type":"box","text":"are deliverable under a credit default swap, the Fund is exposed to the risk that deliverable securities","page_number":117,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"45b588b7-1ac8-4d53-9d7f-00d09c5624ab","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":117,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"2eb9f1b3-7b53-4d75-8d7d-2961ba215062","block_type":"box","text":"in a so-called “short squeeze.” In certain instances of issuer defaults or restructurings, it has been","page_number":117,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"7705b6cb-df9c-488d-8b1a-e3cacbab42db","block_type":"box","text":"unclear under the standard industry documentation for credit default swaps whether or not a “credit","page_number":117,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"b8559453-dcf8-4b13-8679-a7c582dd4b5e","block_type":"box","text":"event” triggering the seller’s payment obligation had occurred. Certain initiatives adopted by derivatives","page_number":117,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"0f063f21-e821-4dd8-afcf-a8d6a9657ab6","block_type":"box","text":"market participants, including the International Swaps and Derivatives Association (“ISDA”), are","page_number":117,"box":{"x":117,"y":537,"width":713,"height":12}},{"id":"ebc32132-2b46-4a2d-9b6f-0f5f25ef5fe2","block_type":"box","text":"designed to implement uniform settlement terms into standard credit default swap documentation, as","page_number":117,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"ce54a998-4e23-4455-91c3-7d4041818124","block_type":"box","text":"well as refine the practices for the transparent conduct of the credit default swap market generally.","page_number":117,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"dc470d98-3595-4ba0-af9e-20d7605eb54f","block_type":"box","text":"Among these initiatives are the ISDA Credit Derivatives Determination Committee and the","page_number":117,"box":{"x":116,"y":583,"width":672,"height":12}},{"id":"5148585c-ca45-48ac-9220-b4bd8fab52ba","block_type":"box","text":"implementation of market-wide cash settlement protocols applicable to all market-standard credit","page_number":117,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"609bed8d-6700-4cce-9514-145f1dbccdde","block_type":"box","text":"default swaps. These initiatives are intended to reduce both the uncertainty as to the occurrence of","page_number":117,"box":{"x":116,"y":614,"width":739,"height":12}},{"id":"37c99fe7-7799-4e53-a0ac-887617f9742f","block_type":"box","text":"credit events and the risk of a “short squeeze” by providing that the ISDA Credit Derivatives","page_number":117,"box":{"x":116,"y":630,"width":684,"height":12}},{"id":"e95fccaf-d625-45f7-8bd5-c9f571590d3c","block_type":"box","text":"Determinations Committee will make determinations as to whether a credit event has occurred,","page_number":117,"box":{"x":117,"y":645,"width":710,"height":11}},{"id":"db5641bf-0320-4b4d-9ab1-1ab8a7a3df8b","block_type":"box","text":"establish an auction to determine a settlement price and identify the deliverable securities for purposes","page_number":117,"box":{"x":116,"y":661,"width":763,"height":12}},{"id":"a589e39f-1235-454b-b107-07910e6e9870","block_type":"box","text":"of the auction, although the ISDA Credit Derivatives Determinations Committee may in certain limited","page_number":117,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"b216770f-6d07-4d3b-88ac-41b31c8e8f98","block_type":"box","text":"circumstances refrain from doing so. In the event the ISDA Credit Derivatives Determinations","page_number":117,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"abb088bc-c000-4c8d-877f-a8fcdca65e0f","block_type":"box","text":"Committee cannot reach a timely resolution with respect to a “credit event” or otherwise does not","page_number":117,"box":{"x":117,"y":707,"width":718,"height":12}},{"id":"b049873e-1398-442f-bacf-5440be67acad","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":117,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"1529f8f7-2008-4475-afe2-b53f65ff7a3c","block_type":"box","text":"default swap upon a default by the reference entity. Furthermore, a Fund may enter into certain credit","page_number":117,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"d31d89b5-d85a-4018-9fa1-94bad9194c2b","block_type":"box","text":"default swaps or similar instruments that may not be covered by these initiatives.","page_number":117,"box":{"x":116,"y":754,"width":598,"height":12}},{"id":"079c325f-bd99-4538-b800-e4b30dce2192","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":117,"box":{"x":117,"y":785,"width":723,"height":12}},{"id":"26a26f6f-1e21-4b08-beaa-d8dabd245986","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":117,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"2b52326c-0204-4f01-b753-e8e57236f816","block_type":"box","text":"of any deliverable obligation received by the Fund or the amount of cash settlement received by the","page_number":117,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"5a498522-0fcf-4e06-b8fe-aafca0984c63","block_type":"box","text":"Fund pursuant to the relevant cash settlement auction, together with the up-front or periodic payments","page_number":117,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"0df979df-687d-47c4-92e5-cec1f1341946","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":117,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"cb71ac2b-ff1d-468f-ae06-23bfa3581861","block_type":"box","text":"Fund. A Fund that sells credit default swaps incurs leveraged exposure to the credit of one or more","page_number":117,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"70d85100-2b3a-4588-bdb7-2e7bba715d4e","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":117,"box":{"x":117,"y":878,"width":703,"height":12}},{"id":"f35d6d48-9ee5-4958-8600-17c486226b18","block_type":"box","text":"II-23","page_number":117,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d0aae248-f354-41ca-af2b-0f9ea47ab658","block_type":"box","text":"NM1026U-6004408-117/267","page_number":117,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d4f66d4f-c326-4560-81a2-36fc0d81249f","block_type":"box","text":"securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":118,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"d2189e1d-6d5e-41cf-9f22-5fbb030c9786","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt","page_number":118,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"d9950705-9d40-43f7-975c-70b232abb5ff","block_type":"box","text":"obligations. In the event the ISDA Credit Derivatives Determinations Committee does not establish a","page_number":118,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"82e044ed-9d2a-49a2-b3d4-d0822b7df3f5","block_type":"box","text":"cash settlement auction and identify the relevant deliverable securities or loans, the credit default swap","page_number":118,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"e408eeac-cdfe-4c82-a2ca-d1393b0ebd23","block_type":"box","text":"buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to","page_number":118,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"e7bea660-ea42-449b-bcf3-bb6655ac5534","block_type":"box","text":"the Fund following a credit event and will likely choose the obligations with the lowest market value in","page_number":118,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"c3a1abfd-185c-43bf-b4d2-6bf08a343cd5","block_type":"box","text":"order to maximize the payment obligations of the Fund. In addition, credit default swaps generally trade","page_number":118,"box":{"x":116,"y":180,"width":772,"height":12}},{"id":"5ccb02ae-13a5-44f9-a30b-000914389594","block_type":"box","text":"on the basis of theoretical pricing and valuation models, which may not accurately value such swap","page_number":118,"box":{"x":116,"y":196,"width":742,"height":12}},{"id":"baa4fed3-4d3c-43d0-826d-54d83ffddc89","block_type":"box","text":"positions when established or when subsequently traded or unwound under actual market conditions.","page_number":118,"box":{"x":117,"y":211,"width":756,"height":12}},{"id":"b27c010c-c7ca-4ff2-8d3f-192c348940bf","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for","page_number":118,"box":{"x":117,"y":242,"width":719,"height":12}},{"id":"4b9dda1f-1347-442c-8c27-94d29d003f68","block_type":"box","text":"clearing to regulated clearinghouses. See “— Derivatives — Regulation of Derivatives — Dodd-Frank","page_number":118,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"3e2d6e63-6c05-4160-8236-3e9bdf5a886b","block_type":"box","text":"Regulations” above. Other single-name CDS and index CDS are permitted, although not required, to","page_number":118,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"3df76f59-8f6b-4267-847c-acba7dbb9747","block_type":"box","text":"be cleared through regulated clearinghouses. The Funds clear all credit default swaps that are subject","page_number":118,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"fc1d5d68-362c-48bb-8e16-cf85baed3724","block_type":"box","text":"to mandatory clearing and may voluntarily clear some, but not all, of the other credit default swaps not","page_number":118,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"f42be0a9-5739-4de4-817e-0a7073a33229","block_type":"box","text":"subject to mandatory clearing. The Funds face counterparty risk with respect to the clearinghouse","page_number":118,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"f46dc7f2-2ca4-48b6-a9eb-de1fd6685431","block_type":"box","text":"when entering into cleared single-name CDS and cleared index CDS. The Funds face significant","page_number":118,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"b430001d-e617-417b-89f8-ec54991ecd82","block_type":"box","text":"counterparty risk with respect to their counterparties to non-cleared credit default swaps and similar","page_number":118,"box":{"x":116,"y":351,"width":743,"height":12}},{"id":"4eeee728-d69b-492e-9bd6-76fadc47a58e","block_type":"box","text":"instruments. A Fund typically will enter into non-cleared credit default swaps and similar instruments","page_number":118,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"daa87f0b-c7d8-4333-acbf-328db5b0ebe4","block_type":"box","text":"with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":118,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"abef6ad4-7c36-48a7-ad9d-f991b1b1972c","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":118,"box":{"x":116,"y":397,"width":373,"height":12}},{"id":"af134cb3-2282-4e6a-8aa3-a8b6b2fcb3cb","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either","page_number":118,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"46c0824e-d561-4180-a9a5-470a03b5746d","block_type":"box","text":"as protection buyer or protection seller. While these contracts are similar in their operation to the","page_number":118,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"1834388e-8186-40bb-88d7-1cfa3b546e7a","block_type":"box","text":"market-standard credit default swaps described above, they are less standardized and instead have","page_number":118,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"251f3561-68bf-455e-a5de-f54d2c4d1746","block_type":"box","text":"bespoke or tailored features. For example, as compared to market-standard credit defaults, the range","page_number":118,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"b830f157-6be8-4bb7-9786-4f7cf47b8d73","block_type":"box","text":"of “credit events” triggering settlement of such bespoke contracts may be narrower or broader, any","page_number":118,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"3a8a3266-1517-4d08-96aa-0a653c847489","block_type":"box","text":"such triggered contracts are settled by physical delivery of the underlying security or loan to or by the","page_number":118,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"5ec407e5-dc1d-469b-9a69-83efc65e7ba2","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":118,"box":{"x":117,"y":521,"width":719,"height":12}},{"id":"78dae58d-7188-4323-8b8d-1db78521a68f","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":118,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"97801329-5185-4221-82b0-f2495ace576f","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund","page_number":118,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"89b1be61-1c4f-4cf1-8b04-6fe03c31d42b","block_type":"box","text":"had invested in the reference obligation directly and are subject to significant credit risk, correlation","page_number":118,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"5973030e-6db1-4390-bef3-3a1668e09e31","block_type":"box","text":"risk, leverage risk, illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":118,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"7b2c5cfa-273d-4685-bd03-232f4e569526","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":118,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"014210f7-a94e-40c4-b223-4115e1b60944","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of","page_number":118,"box":{"x":410,"y":630,"width":450,"height":12}},{"id":"e55faa9c-8eaa-4c4b-8554-81f8ae42df8d","block_type":"box","text":"interest rate swaps and interest rate caps and floors. As described in further detail below, a Fund may","page_number":118,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"15efd853-3fcd-42ac-85c5-6563fda66f78","block_type":"box","text":"enter into these transactions primarily to preserve a return or spread on a particular investment or","page_number":118,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"7d446e7b-3d13-480f-a550-4ae7411cf1d6","block_type":"box","text":"portion of its holdings, as a duration management technique, to protect against an increase in the price","page_number":118,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"980d6a80-3217-40a3-bd31-2e7e88b68691","block_type":"box","text":"of securities a Fund anticipates purchasing at a later date, or for speculation to increase returns.","page_number":118,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"1e06d499-4515-4aac-a217-4dbc774c2b88","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted","page_number":118,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"4e36c8eb-1c50-4a93-9452-b39991d0f29b","block_type":"box","text":"for clearing to regulated clearinghouses. See “— Regulation of Derivatives — Dodd-Frank Regulations”","page_number":118,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"2f47215e-1eb3-4f2d-b512-13642362dffc","block_type":"box","text":"above. Other interest rate swaps are permitted, although not required, to be cleared. Most of the","page_number":118,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"154394d0-4311-42f5-a349-d176f3b8d438","block_type":"box","text":"interest rate swaps entered into by the Funds are cleared. The Funds face counterparty risk with","page_number":118,"box":{"x":117,"y":769,"width":714,"height":12}},{"id":"5e036815-c1db-422e-a0bf-824c00a204cb","block_type":"box","text":"respect to the clearinghouse when entering into cleared interest rate swaps.","page_number":118,"box":{"x":117,"y":785,"width":561,"height":12}},{"id":"89be75cd-b79a-4d5d-bc49-5999276f5a1e","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest","page_number":118,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"9db01047-964d-4a6f-b5d0-b35152046e36","block_type":"box","text":"rate swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared","page_number":118,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"bccdc8fb-fc55-46ce-a878-cb43cba5e850","block_type":"box","text":"interest rate derivatives transactions are swap dealers and other creditworthy entities that have","page_number":118,"box":{"x":117,"y":847,"width":709,"height":12}},{"id":"8402bdf8-a9f3-42b0-ac92-2d31f6dc9c31","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. If","page_number":118,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"6489d127-538c-4e45-a1a5-38aaa5cd5977","block_type":"box","text":"the Fund’s counterparty defaults on such a transaction, a Fund will have contractual remedies with","page_number":118,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"2623e5a8-dd30-4be7-8824-77d608280a78","block_type":"box","text":"II-24","page_number":118,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"33113dab-27ac-478e-9680-a667aa5217ba","block_type":"box","text":"NM1026U-6004408-118/267","page_number":118,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2dbb0c16-b129-4396-b83e-b5f681a241b8","block_type":"box","text":"respect to the transaction, but there can be no guarantee that the Fund will be successful in enforcing","page_number":119,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"7acc1e18-a672-4674-be48-a91914494ff1","block_type":"box","text":"such remedies. The market for interest rate swaps is relatively liquid in comparison with other similar","page_number":119,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"fab26e06-3b26-4ee2-a7b8-8fb85eb55b1c","block_type":"box","text":"instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":119,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"1d441e06-10cd-4868-baa8-0a045a1f1278","block_type":"box","text":"interest rate derivatives due to applicable income tax requirements.","page_number":119,"box":{"x":117,"y":134,"width":503,"height":11}},{"id":"d8e2b665-3950-4b82-8100-2eb3ef46f15b","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a","page_number":119,"box":{"x":117,"y":163,"width":762,"height":12}},{"id":"421e51a5-8ef6-4c43-89b9-807a8fad30c0","block_type":"box","text":"fixed or variable interest rate, index or asset in return for periodic payments from its counterparty based","page_number":119,"box":{"x":116,"y":178,"width":772,"height":12}},{"id":"5a24e908-acdd-4ea4-a263-9c7cf284f8da","block_type":"box","text":"on a different fixed or variable interest rate, index or asset.","page_number":119,"box":{"x":116,"y":194,"width":439,"height":11}},{"id":"e4b4f1d3-bb3c-450e-a36b-afc68add5b78","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls","page_number":119,"box":{"x":116,"y":223,"width":746,"height":12}},{"id":"70c372ce-b84f-4e11-9050-6a41da49a642","block_type":"box","text":"below a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":119,"box":{"x":117,"y":239,"width":736,"height":12}},{"id":"4a7ea606-fe21-4001-8c6b-ea1ae8d7bf80","block_type":"box","text":"from the party selling such interest rate floor.","page_number":119,"box":{"x":116,"y":254,"width":337,"height":12}},{"id":"c23a605c-c4ba-451f-8a16-52d82f555c03","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises","page_number":119,"box":{"x":116,"y":283,"width":746,"height":12}},{"id":"6666c2b3-b592-4ba7-a4ca-5660158d6fb0","block_type":"box","text":"above a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":119,"box":{"x":116,"y":299,"width":739,"height":12}},{"id":"d53747fc-b861-4f27-b7ae-6db74d9b0532","block_type":"box","text":"from the party selling such interest rate cap.","page_number":119,"box":{"x":116,"y":314,"width":331,"height":12}},{"id":"1eb9de69-1a2c-4e37-86c3-3f5737a5b9e4","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":119,"box":{"x":116,"y":344,"width":764,"height":12}},{"id":"8b1b8dc9-80c5-4289-9e16-5e64a8d8c687","block_type":"box","text":"commitments to pay or receive interest,","page_number":119,"box":{"x":116,"y":359,"width":298,"height":12}},{"id":"d5c7e6b5-bd21-4a3c-b3f8-226d8efd14eb","block_type":"box","text":"e.g.","page_number":119,"box":{"x":415,"y":362,"width":26,"height":9}},{"id":"382ca61e-5f40-4056-8c28-b69092cf00db","block_type":"box","text":", an exchange of fixed rate payments for floating rate","page_number":119,"box":{"x":444,"y":359,"width":396,"height":12}},{"id":"ad8e55aa-8b59-4361-aef4-d3aea614660d","block_type":"box","text":"payments. For example, if a Fund holds a mortgage-backed security with an interest rate that is reset","page_number":119,"box":{"x":117,"y":375,"width":755,"height":12}},{"id":"304d6905-dfbf-494e-a09d-820dacee1084","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":119,"box":{"x":116,"y":390,"width":748,"height":12}},{"id":"4aacf21e-7185-427d-bd5d-702821ad3ffc","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":119,"box":{"x":117,"y":406,"width":755,"height":12}},{"id":"1e635a79-0765-40d7-bf41-1a97b2831b10","block_type":"box","text":"the mortgage-backed security due to rising interest rates but would also limit its ability to benefit from","page_number":119,"box":{"x":116,"y":421,"width":753,"height":12}},{"id":"f864f2ce-2011-40f3-825d-9d5a7e0118fc","block_type":"box","text":"falling interest rates. Conversely, if a Fund holds a mortgage-backed security with an interest rate that","page_number":119,"box":{"x":116,"y":437,"width":761,"height":12}},{"id":"06b5b648-3fb1-47dd-ab63-751ffae2dff9","block_type":"box","text":"is reset every week and it would like to lock in what","page_number":119,"box":{"x":117,"y":452,"width":383,"height":12}},{"id":"acee8d35-e1ff-4ae4-a420-38a735c2aa4c","block_type":"box","text":"it believes to be a high interest rate for one year, it","page_number":119,"box":{"x":501,"y":452,"width":377,"height":12}},{"id":"711580ab-f0b7-4b2b-8a7a-3ca3898c7530","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":119,"box":{"x":117,"y":468,"width":746,"height":12}},{"id":"f85ebf2e-8f35-4bfc-be09-2273be7bab1b","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":119,"box":{"x":117,"y":483,"width":733,"height":12}},{"id":"15a65ead-91b3-42da-a289-a50be2bff808","block_type":"box","text":"falling interest rates and may permit the Fund to enhance its income through the positive differential","page_number":119,"box":{"x":116,"y":499,"width":745,"height":12}},{"id":"50174ad7-f550-4958-87b2-0e856358f0b3","block_type":"box","text":"between one week and one year interest rates, but would preclude it from taking full advantage of","page_number":119,"box":{"x":117,"y":514,"width":729,"height":12}},{"id":"8dd44ced-e700-46fe-9f20-5ca2cfa82da0","block_type":"box","text":"rising interest rates.","page_number":119,"box":{"x":117,"y":530,"width":150,"height":12}},{"id":"e195f818-5b13-4bfc-b34c-752ae662bdd8","block_type":"box","text":"Gains from transactions in interest rate swaps distributed to shareholders will be taxable as ordinary","page_number":119,"box":{"x":117,"y":559,"width":746,"height":12}},{"id":"a7d54b56-15da-4e50-b8f1-cd4c59f29fbb","block_type":"box","text":"income or, in certain circumstances, as long term capital gains to shareholders.","page_number":119,"box":{"x":117,"y":575,"width":593,"height":12}},{"id":"47946ee2-171e-478d-a119-3cb592ef2e97","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk,","page_number":119,"box":{"x":117,"y":604,"width":751,"height":12}},{"id":"0ef1a93a-6aab-40c3-a606-9e964ebd21f2","block_type":"box","text":"illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":119,"box":{"x":117,"y":619,"width":549,"height":12}},{"id":"5185a4de-7eaf-42d2-8d31-514baca11da7","block_type":"box","text":"Total Return Swaps.","page_number":119,"box":{"x":118,"y":648,"width":155,"height":12}},{"id":"5aca76b3-7290-4f06-9abb-f8605cd686d1","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic","page_number":119,"box":{"x":273,"y":649,"width":570,"height":12}},{"id":"8bbf9ddf-9f39-4e0b-bfbd-f434465028e1","block_type":"box","text":"payments to the other party based on the return of the assets underlying the contract in exchange for","page_number":119,"box":{"x":117,"y":664,"width":750,"height":12}},{"id":"06842e6a-202b-4426-98fa-da769b37b814","block_type":"box","text":"periodic payments based on a fixed or variable interest rate or the total return from different underlying","page_number":119,"box":{"x":117,"y":679,"width":759,"height":13}},{"id":"7163ed70-d431-4bf0-b825-551cc03855cb","block_type":"box","text":"assets. The return of the assets underlying the contract includes both the income generated by the","page_number":119,"box":{"x":116,"y":695,"width":732,"height":12}},{"id":"22e3ecfd-30cf-4eb1-bcab-d3586a964253","block_type":"box","text":"asset and the change in market value of the asset. The asset underlying the contract may include a","page_number":119,"box":{"x":116,"y":710,"width":737,"height":13}},{"id":"935dd1f7-9802-4ee2-8c16-d4119014c454","block_type":"box","text":"specified security, basket of securities or securities indices. Total return swaps on a specified security,","page_number":119,"box":{"x":116,"y":726,"width":757,"height":12}},{"id":"d713fb2a-824e-4ad6-98a3-b234ba036a67","block_type":"box","text":"basket of securities or securities indices may sometimes be referred to as “contracts for difference.”","page_number":119,"box":{"x":117,"y":741,"width":738,"height":13}},{"id":"87206b69-19f2-4d0e-b167-6e3c3575e80f","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking","page_number":119,"box":{"x":116,"y":771,"width":738,"height":12}},{"id":"6d26ca84-bcf3-4270-95cb-ce64197f4b8d","block_type":"box","text":"physical custody of such security or investing directly in such market. Upon entering into a total return","page_number":119,"box":{"x":117,"y":786,"width":752,"height":12}},{"id":"de1c309d-1c9f-42c4-a96b-59859789bd47","block_type":"box","text":"swap, a Fund is required to deposit initial margin but the parties do not exchange the notional amount.","page_number":119,"box":{"x":116,"y":802,"width":757,"height":12}},{"id":"1317a801-5ed7-4d4e-80a8-ce474d3bf1c2","block_type":"box","text":"As a result, total return swaps may effectively add leverage to the Fund’s portfolio because the Fund","page_number":119,"box":{"x":116,"y":817,"width":744,"height":12}},{"id":"ddd64179-e6fe-415b-83b0-74e6b926364d","block_type":"box","text":"would be subject to investment exposure on the notional amount of the swap.","page_number":119,"box":{"x":116,"y":833,"width":580,"height":12}},{"id":"5b0950ad-c288-4ce0-b590-095d8aee93ea","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk","page_number":119,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"0214e686-0060-4725-bf9a-173e2e42a389","block_type":"box","text":"and counterparty risk. See “— Risk Factors in Derivatives” above.","page_number":119,"box":{"x":116,"y":877,"width":493,"height":13}},{"id":"c732b632-4c90-4ffc-bc73-d05388f5443f","block_type":"box","text":"II-25","page_number":119,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0b79c4ff-6676-416a-aae0-cd46fc7c734d","block_type":"box","text":"NM1026U-6004408-119/267","page_number":119,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"940792fd-38f8-4d79-a6ce-fb288763310d","block_type":"box","text":"Options.","page_number":120,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"44417d31-170f-421d-9117-bf13e2ae35ed","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":120,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"cdc8a34a-7236-46b5-a3db-7f2d5c5afa8d","block_type":"box","text":"A Fund may engage in transactions in options on","page_number":120,"box":{"x":454,"y":110,"width":370,"height":12}},{"id":"5ece9393-9d64-477b-9a14-bb49c47290d1","block_type":"box","text":"individual securities, baskets of securities or securities indices, or particular measurements of value or","page_number":120,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"76d39cc5-41be-4871-84fc-479df73b7c9f","block_type":"box","text":"rates, such as an index of the price of treasury securities or an index representative of short-term","page_number":120,"box":{"x":117,"y":141,"width":724,"height":12}},{"id":"768d6729-33f4-4148-afd3-b042dac193de","block_type":"box","text":"interest rates. Such investments may be made on exchanges and in the OTC markets. In general,","page_number":120,"box":{"x":117,"y":157,"width":732,"height":12}},{"id":"a11ed3b9-421f-4a72-8f33-230f3f68431f","block_type":"box","text":"exchange-traded options have standardized exercise prices and expiration dates and require the","page_number":120,"box":{"x":116,"y":172,"width":723,"height":12}},{"id":"b45e47a7-69ed-4958-b5fe-b8f1b557d84b","block_type":"box","text":"parties to post margin against their obligations, and the performance of the parties’ obligations in","page_number":120,"box":{"x":117,"y":188,"width":720,"height":12}},{"id":"1d0f577e-3108-4fe1-90be-8780e929e3dd","block_type":"box","text":"connection with such options is guaranteed by the exchange or a related clearing corporation. OTC","page_number":120,"box":{"x":116,"y":203,"width":742,"height":12}},{"id":"b07b5237-7b56-481c-af1f-d78da275f1cd","block_type":"box","text":"options have more flexible terms negotiated between the buyer and the seller, but are subject to","page_number":120,"box":{"x":116,"y":219,"width":717,"height":12}},{"id":"5048bc61-a0d6-4126-9ecb-39b2bc2bfc63","block_type":"box","text":"greater credit risk. OTC options also involve greater illiquidity risk.","page_number":120,"box":{"x":116,"y":234,"width":493,"height":12}},{"id":"b15c3e69-8259-4d84-afcf-49fcf2dc8b16","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in","page_number":120,"box":{"x":116,"y":265,"width":709,"height":12}},{"id":"a179fef9-a419-4b98-b44f-554c2a018b34","block_type":"box","text":"different payment structures and/or expirations (commonly referred to as exotic options). For example,","page_number":120,"box":{"x":116,"y":281,"width":765,"height":12}},{"id":"2251ca76-f447-4c21-ac09-bd17f49cb016","block_type":"box","text":"barrier options are exotic options that can only be exercised (or automatically expire) if the price of the","page_number":120,"box":{"x":117,"y":296,"width":761,"height":12}},{"id":"ff6ce226-6057-468c-8b52-4f4e0c1ca576","block_type":"box","text":"underlying asset reaches one or more predetermined levels on or before expiration. Binary options are","page_number":120,"box":{"x":117,"y":312,"width":765,"height":12}},{"id":"0449428f-19aa-48fc-a534-5d49e439f074","block_type":"box","text":"another example of exotic options which have a fixed all-or-nothing payout if one or more","page_number":120,"box":{"x":116,"y":327,"width":666,"height":12}},{"id":"bc583f8f-9217-4ca5-ba22-316213b9293c","block_type":"box","text":"predetermined conditions are met. Exotic options are typically traded in OTC markets.","page_number":120,"box":{"x":117,"y":343,"width":641,"height":12}},{"id":"5d0aadfd-75e5-4dd3-ab22-8a223139798b","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example,","page_number":120,"box":{"x":116,"y":374,"width":770,"height":12}},{"id":"b46cb642-fab9-4b67-8568-13c232b3c0df","block_type":"box","text":"there are significant differences between the securities and options markets that could result in an","page_number":120,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"e8fc4a12-05a7-441d-a7bb-a3d05c848334","block_type":"box","text":"imperfect correlation between these markets, causing a given transaction not to achieve its objectives.","page_number":120,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"beac505a-d9ca-464c-b56c-8000d3b7c071","block_type":"box","text":"In addition, a liquid market for particular options, whether traded OTC or on a national securities","page_number":120,"box":{"x":117,"y":420,"width":716,"height":12}},{"id":"2ac9f85b-1632-4041-b959-5040194e02e3","block_type":"box","text":"exchange (“Exchange”) may be absent for reasons which include the following: there may be","page_number":120,"box":{"x":116,"y":436,"width":695,"height":12}},{"id":"8848ad1b-ce8a-481a-b1d1-4790434b0cb9","block_type":"box","text":"insufficient trading interest in certain options; restrictions may be imposed by an Exchange on opening","page_number":120,"box":{"x":117,"y":451,"width":763,"height":12}},{"id":"221a2cd1-065d-4f60-8acc-e00dae0aba05","block_type":"box","text":"transactions or closing transactions or both; trading halts, suspensions or other restrictions may be","page_number":120,"box":{"x":116,"y":467,"width":737,"height":12}},{"id":"e7a87ad9-c448-44cf-b7e3-b0c905438e35","block_type":"box","text":"imposed with respect to particular classes or series of options or underlying securities; unusual or","page_number":120,"box":{"x":117,"y":482,"width":727,"height":12}},{"id":"59a24dfe-882a-4b60-9d80-7b7f644caef3","block_type":"box","text":"unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an","page_number":120,"box":{"x":117,"y":498,"width":708,"height":12}},{"id":"31d8496f-f41a-4d6d-8419-56e394539fb2","block_type":"box","text":"Exchange or the Options Clearing Corporation may not at all times be adequate to handle current","page_number":120,"box":{"x":117,"y":513,"width":728,"height":12}},{"id":"8cb58fb0-bc03-4795-81fe-4697a4255204","block_type":"box","text":"trading volume; or one or more Exchanges could, for economic or other reasons, decide or be","page_number":120,"box":{"x":116,"y":529,"width":703,"height":12}},{"id":"95ed2b35-0901-42b4-981d-17b8a58077b7","block_type":"box","text":"compelled at some future date to discontinue the trading of options (or a particular class or series of","page_number":120,"box":{"x":116,"y":544,"width":746,"height":12}},{"id":"29936b62-91b4-4224-8b6f-b50a787a5648","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":120,"box":{"x":116,"y":560,"width":770,"height":12}},{"id":"3ee02d42-401b-4b9f-83c4-5073604c7c7c","block_type":"box","text":"to exist, although outstanding options that had been issued by the Options Clearing Corporation as a","page_number":120,"box":{"x":116,"y":575,"width":753,"height":12}},{"id":"38bdd837-4fdd-4a8d-a12f-c58297db794b","block_type":"box","text":"result of trades on that Exchange would continue to be exercisable in accordance with their terms.","page_number":120,"box":{"x":117,"y":591,"width":732,"height":12}},{"id":"a213120e-708e-4a71-9e0b-e75d3149c5a1","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or","page_number":120,"box":{"x":117,"y":622,"width":749,"height":12}},{"id":"406f5e0a-2cd4-4b21-b3fc-5c9bb27479d0","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":120,"box":{"x":117,"y":638,"width":764,"height":11}},{"id":"9c03883d-96d4-405b-b273-180b4c30bf1b","block_type":"box","text":"or in concert with others (regardless of whether such options are written on the same or different","page_number":120,"box":{"x":116,"y":653,"width":720,"height":12}},{"id":"e50a05df-2aeb-4e74-be5e-46b5891d6b45","block_type":"box","text":"exchanges or are held or written on one or more accounts or through one or more brokers). Under","page_number":120,"box":{"x":116,"y":668,"width":730,"height":12}},{"id":"e8c8da69-8dbc-47ee-b295-6278093c64f8","block_type":"box","text":"these limitations, option positions of all investment companies advised by the Manager are combined","page_number":120,"box":{"x":116,"y":684,"width":749,"height":12}},{"id":"0caed77d-d0fc-4329-b041-8efeb4b50c71","block_type":"box","text":"for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation of","page_number":120,"box":{"x":116,"y":699,"width":736,"height":13}},{"id":"06662183-c839-4746-b6f5-fce56d02a667","block_type":"box","text":"positions and may impose other sanctions or restrictions. These position limits may restrict the number","page_number":120,"box":{"x":117,"y":715,"width":762,"height":12}},{"id":"d46f7f4d-85cb-470a-9c59-6cfb271d2571","block_type":"box","text":"of listed options that a Fund may buy or sell.","page_number":120,"box":{"x":116,"y":730,"width":328,"height":13}},{"id":"b428bedf-3daa-41cf-92f5-dd42bdfd174c","block_type":"box","text":"Call Options.","page_number":120,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"dde316e6-22a2-45bf-b650-5a9f21a89773","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in","page_number":120,"box":{"x":217,"y":761,"width":623,"height":13}},{"id":"98410374-a9b4-41d2-8c6a-1ed97c992410","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":120,"box":{"x":116,"y":777,"width":743,"height":12}},{"id":"54c46609-5348-48ab-9488-d35549903ade","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":120,"box":{"x":116,"y":793,"width":762,"height":12}},{"id":"f14e347b-39f6-48ad-abfe-866c5f97e5ce","block_type":"box","text":"purchase and sell call options on indices. Index options are similar to options on securities except that,","page_number":120,"box":{"x":117,"y":808,"width":759,"height":12}},{"id":"2118f603-634d-4023-aa29-fd989bf988b0","block_type":"box","text":"rather than taking or making delivery of securities underlying the option at a specified price upon","page_number":120,"box":{"x":117,"y":823,"width":712,"height":13}},{"id":"27f6ddaf-9620-4919-8c12-9d375ed66643","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":120,"box":{"x":116,"y":839,"width":745,"height":12}},{"id":"5d169aa5-9694-4ece-a168-3e6f15c8fc70","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":120,"box":{"x":117,"y":854,"width":716,"height":13}},{"id":"c009a6ce-becf-48b7-b927-1f0a7177b99a","block_type":"box","text":"II-26","page_number":120,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1f90e87d-e497-49a3-bfd3-4c3d48dde9b1","block_type":"box","text":"NM1026U-6004408-120/267","page_number":120,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bd1df147-ac8f-467f-971c-0a502dca5e91","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":121,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"6823b1a3-650b-4b79-be12-05a530f1244f","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":121,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"da1a4f31-71bf-4e98-b30b-147e615ff59e","block_type":"box","text":"or (ii) greater than the exercise price of the call written provided the difference is maintained by the","page_number":121,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"cc4d35f9-1575-4522-a79d-30b19982ada7","block_type":"box","text":"Fund in assets which are not considered illiquid investments under the Funds’ Liquidity Program (as","page_number":121,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"daf7de4b-c85b-451f-9ec1-d06dc911ad43","block_type":"box","text":"defined below) (“liquid assets”) designated on the Manager’s or the sub-adviser’s books and records to","page_number":121,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"40a2f8e0-a41f-4e59-af74-0b9e5481ced2","block_type":"box","text":"the extent required by Commission guidelines.","page_number":121,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"781032e6-4808-435d-9cab-06b0a48e8b62","block_type":"box","text":"A Fund may write (","page_number":121,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"db199b00-cd38-4e93-a409-d4bef2acd2ea","block_type":"box","text":"i.e.","page_number":121,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"bfd8752e-11b0-4f2c-a90b-b63a3ddcda34","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest","page_number":121,"box":{"x":281,"y":196,"width":599,"height":12}},{"id":"a6b2c6ae-e3e6-45ac-9b0a-c351f808a111","block_type":"box","text":"and to enter into closing purchase transactions with respect to certain of such options. A covered call","page_number":121,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"f31d3fcb-7955-4b73-b3d9-d2001caebc24","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":121,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"082477b2-e6c7-4a20-8bad-c5f99e236e74","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":121,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"51c5a98f-48fc-4851-9537-9e79d4e7beef","block_type":"box","text":"principal reason for writing call options is the attempt to realize, through the receipt of premiums, a","page_number":121,"box":{"x":117,"y":258,"width":733,"height":12}},{"id":"08761554-ac92-415b-89cf-2d12f01695ab","block_type":"box","text":"greater return than would be realized on the securities alone. By writing covered call options, a Fund","page_number":121,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"a5600d22-9251-4c89-ac0c-556fdc58944d","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":121,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"b929bcac-0dd1-4fd1-946b-6c37f0f61e74","block_type":"box","text":"security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will","page_number":121,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"74257c95-049a-4ec0-ad97-d6328b433952","block_type":"box","text":"be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":121,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"e7d82cfd-6fe1-49b4-8bb0-baa459feb68e","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":121,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"a267348d-9ad7-4bde-8d90-54b6667848b5","block_type":"box","text":"offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call","page_number":121,"box":{"x":116,"y":351,"width":768,"height":12}},{"id":"abd9ca14-4272-4af9-971c-3bd12edf1b9e","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":121,"box":{"x":116,"y":366,"width":736,"height":12}},{"id":"62ab5c66-5ee6-41f3-96f8-34f01e254a99","block_type":"box","text":"underlying security declining.","page_number":121,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"3681a59f-da52-4fbf-97ee-ea9f204942a6","block_type":"box","text":"A Fund may write (","page_number":121,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"98f9b7f8-75fa-4f81-ace0-e87faf9c3d5d","block_type":"box","text":"i.e.","page_number":121,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"034a74d7-fd4d-4a50-93ac-0b9915e48eca","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest","page_number":121,"box":{"x":281,"y":413,"width":590,"height":12}},{"id":"77a3aa3d-5f75-498e-b92b-ce841acb3509","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":121,"box":{"x":117,"y":428,"width":763,"height":12}},{"id":"c80aadbd-4eb8-48be-8a9f-90fb3d3deec5","block_type":"box","text":"realize income without committing capital to the ownership of the underlying securities or instruments.","page_number":121,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"00a3b9dc-dd04-48b5-baae-7b4a18c39a44","block_type":"box","text":"When writing uncovered call options, a Fund must deposit and maintain sufficient margin with the","page_number":121,"box":{"x":116,"y":459,"width":727,"height":12}},{"id":"60a7c13a-bd08-4630-bf45-9ff56b8cf9e6","block_type":"box","text":"broker-dealer through which it made the uncovered call option as collateral to ensure that the securities","page_number":121,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"fea03c46-feee-4f9e-8019-66475c4f83ec","block_type":"box","text":"can be purchased for delivery if and when the option is exercised. During periods of declining","page_number":121,"box":{"x":116,"y":490,"width":697,"height":12}},{"id":"77158cf2-f0ec-4810-a370-4c27b875d51e","block_type":"box","text":"securities prices or when prices are stable, writing uncovered calls can be a profitable strategy to","page_number":121,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"f85ea51a-49be-4c07-ae86-bbf1035b00f1","block_type":"box","text":"increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls","page_number":121,"box":{"x":117,"y":521,"width":724,"height":12}},{"id":"dc931894-d271-40c0-a44c-13cd1e76e6d8","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":121,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"05cfec3d-ac87-4e98-af7d-3bc6fb673a23","block_type":"box","text":"have speculative characteristics and the potential for loss is unlimited. When an uncovered call is","page_number":121,"box":{"x":117,"y":552,"width":725,"height":12}},{"id":"10476c03-6ade-45c4-bd27-4372bf416cf4","block_type":"box","text":"exercised, a Fund must purchase the underlying security to meet its call obligation. There is also a risk,","page_number":121,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"5e640ff3-7052-4248-8b94-f20e925ea75a","block_type":"box","text":"especially with preferred and debt securities that lack sufficient liquidity, that the securities may not be","page_number":121,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"56f3be8a-aa3a-4d04-8aa9-337558558b08","block_type":"box","text":"available for purchase. If the purchase price exceeds the exercise price, a Fund will lose the difference.","page_number":121,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"a3ea4d99-63ab-41be-b7ce-497a99b26947","block_type":"box","text":"Put Options.","page_number":121,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"57ae08ed-07f7-4f9f-a197-59fea3d7d3ac","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its","page_number":121,"box":{"x":213,"y":630,"width":648,"height":12}},{"id":"f531c33e-b602-4a8a-8d98-7beadea26833","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":121,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"c5ac4691-0b33-42bc-8412-cd928e3eebcd","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":121,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"2295c387-3651-45d1-b6f4-38eeba2b55e6","block_type":"box","text":"the market value of the securities or instruments until the put option expires. The amount of any","page_number":121,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"01561f64-7b53-4c74-afd0-896ed65885f0","block_type":"box","text":"appreciation in the value of the underlying securities or instruments will be partially offset by the","page_number":121,"box":{"x":116,"y":692,"width":708,"height":12}},{"id":"886734a4-4394-4de6-a984-520c237686f3","block_type":"box","text":"amount of the premium paid for the put option and any related transaction costs. Prior to its expiration,","page_number":121,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"62d780af-b07c-47b7-99b9-28f8e363d36f","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":121,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"f850c776-863b-41a1-9535-8612840de71d","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":121,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"2e169967-27ec-4162-ac56-6171450eb0a8","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an","page_number":121,"box":{"x":116,"y":754,"width":719,"height":12}},{"id":"aef38d48-9b76-4ad7-bf2f-927be8bb8c17","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":121,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"7bb82d07-00cf-40ed-b382-c6431225e5d5","block_type":"box","text":"purchased. A Fund also may purchase uncovered put options.","page_number":121,"box":{"x":117,"y":785,"width":460,"height":12}},{"id":"d2269318-39f0-4408-8b7f-a82d6568017b","block_type":"box","text":"A Fund also may write (","page_number":121,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"21bc701a-11ae-4026-8d71-86a957e7d032","block_type":"box","text":"i.e.","page_number":121,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"1bdca676-ad3d-457c-9eb3-50866298f56a","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held","page_number":121,"box":{"x":316,"y":816,"width":557,"height":12}},{"id":"d53a51fc-9a98-4b39-b59d-9e08f68df116","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":121,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"ebcf6ff9-2f1b-4b00-bfb3-74ebd7ba58df","block_type":"box","text":"A Fund also may write (","page_number":121,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"10c416ca-5314-41f9-9d4d-f26a5ae3dc2c","block_type":"box","text":"i.e.","page_number":121,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"0edcfd83-0cf8-46ba-b015-855c6bda36ca","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest","page_number":121,"box":{"x":312,"y":862,"width":575,"height":12}},{"id":"ead427f5-3665-4b47-a72a-a236a1aa1c2b","block_type":"box","text":"but with respect to which the Fund does not current","page_number":121,"box":{"x":117,"y":878,"width":372,"height":12}},{"id":"ff196db0-60c7-432d-9da6-0009239d1b10","block_type":"box","text":"ly have a corresponding short position or has not","page_number":121,"box":{"x":490,"y":878,"width":359,"height":12}},{"id":"8d85e656-3f83-49bc-b198-c36c865f8b2f","block_type":"box","text":"II-27","page_number":121,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ef5fb72e-4809-43ed-a912-bf6777027971","block_type":"box","text":"NM1026U-6004408-121/267","page_number":121,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"66e3e435-56ea-4c7d-8667-1400b281b5eb","block_type":"box","text":"deposited as collateral cash equal to the exercise va","page_number":122,"box":{"x":116,"y":87,"width":380,"height":12}},{"id":"f0d18a87-bebf-48cd-ab96-1d0b23132ec2","block_type":"box","text":"lue of the put option with","page_number":122,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"f64ca8ab-25bd-42d2-841f-3bc85b0a11fe","block_type":"box","text":"the broker-dealer through","page_number":122,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"ddd0cbdf-e30e-4098-8968-f768756df886","block_type":"box","text":"which it made the uncovered put opt","page_number":122,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"eb4cebd0-22a0-4072-8654-a851ebc756d9","block_type":"box","text":"ion. The principal reason for writing uncovered put options is to","page_number":122,"box":{"x":381,"y":102,"width":461,"height":13}},{"id":"862ffa57-3b33-461f-8bfa-1189418f084b","block_type":"box","text":"receive premium income and to acquire such securities","page_number":122,"box":{"x":117,"y":118,"width":400,"height":12}},{"id":"e37e5bbc-6134-4c66-abc1-acc529c0556f","block_type":"box","text":"or instruments at a net cost below the current","page_number":122,"box":{"x":517,"y":118,"width":339,"height":10}},{"id":"16f2608d-50e7-4f74-b880-d37523499465","block_type":"box","text":"market value. A Fund has the obligation to buy the","page_number":122,"box":{"x":117,"y":134,"width":370,"height":12}},{"id":"8eb53cb2-de6c-48c9-8af7-24b5885118b6","block_type":"box","text":"securities or instruments at an agreed upon price if","page_number":122,"box":{"x":488,"y":134,"width":373,"height":12}},{"id":"93dd2158-1f0e-4c9b-980e-a3df9ddddc32","block_type":"box","text":"the price of the securities or instruments decreases bel","page_number":122,"box":{"x":116,"y":149,"width":397,"height":12}},{"id":"ff322639-11f9-4549-8a23-e1aab8b53101","block_type":"box","text":"ow the exercise price. If the price of the securities","page_number":122,"box":{"x":515,"y":149,"width":364,"height":12}},{"id":"b7d7db9a-696e-4e55-b376-357f13daacc1","block_type":"box","text":"or instruments increases during the option period,","page_number":122,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"8b84a132-cce8-4b0d-839a-df492374d86a","block_type":"box","text":"the option will expire worthless and a Fund will retain","page_number":122,"box":{"x":477,"y":165,"width":393,"height":11}},{"id":"2e805e41-da8f-4818-a107-bb7cc7560f3f","block_type":"box","text":"the premium and will not have to purchase the securiti","page_number":122,"box":{"x":116,"y":180,"width":392,"height":12}},{"id":"0641bf1c-3fbc-4cb5-be2c-b32f1f1cd5c0","block_type":"box","text":"es or instruments at the exercise price.","page_number":122,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"933bd64e-88c7-4463-a251-8586da4b1090","block_type":"box","text":"Options on Government National Mortgage Association (“GNMA”) Certificates.","page_number":122,"box":{"x":117,"y":211,"width":586,"height":12}},{"id":"f4ecb74d-bf0f-4a9f-a7dd-741a82ea7c4b","block_type":"box","text":"The following","page_number":122,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"800f7f7e-c635-4bec-83ee-dff202a16f8c","block_type":"box","text":"information relates to the unique characteristics of options on GNMA Certificates. Since the remaining","page_number":122,"box":{"x":117,"y":227,"width":759,"height":12}},{"id":"a1bc3bc5-75d3-4c1b-b2ad-c6f79ed19761","block_type":"box","text":"principal balance of GNMA Certificates declines each month as a result of mortgage payments, a","page_number":122,"box":{"x":117,"y":242,"width":725,"height":12}},{"id":"23e9bb2b-3f22-44cf-8125-a659430cf001","block_type":"box","text":"Fund, as a writer of a GNMA call holding GNMA Certificates as “cover” to satisfy its delivery obligation","page_number":122,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"460d7e29-f5ea-4e9d-917e-08ce46582551","block_type":"box","text":"in the event of exercise, may find that the GNMA Certificates it holds no longer have a sufficient","page_number":122,"box":{"x":117,"y":273,"width":714,"height":12}},{"id":"1653de27-4be5-4edc-9f0a-7561a591c3bb","block_type":"box","text":"remaining principal balance for this purpose. Should this occur, a Fund will purchase additional GNMA","page_number":122,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"c2b02c3f-abec-4efa-9157-e467565a1976","block_type":"box","text":"Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash market in order","page_number":122,"box":{"x":117,"y":304,"width":754,"height":12}},{"id":"f5b7d41a-0b84-4eab-bcf4-a95010be09e5","block_type":"box","text":"to maintain its “cover.”","page_number":122,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"fef97bce-0fa1-4fbb-817a-c5f943831a82","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":122,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"ffe068d1-df8f-4a0b-b072-38edd0ece752","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":122,"box":{"x":117,"y":366,"width":724,"height":12}},{"id":"29a40947-0c99-4f04-80de-5dbd3da7061a","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":122,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"f125457f-65ee-40c1-8495-eb695680b253","block_type":"box","text":"occur, a Fund will no longer be covered, and the Fund will either enter into a closing purchase","page_number":122,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"4cbcb536-5606-475d-8dd2-8f0efa61f580","block_type":"box","text":"transaction or replace such Certificate with a certificate that represents cover. When a Fund closes its","page_number":122,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"e17e6804-e462-42b6-a515-16e70a66c0d0","block_type":"box","text":"position or replaces such Certificate, it may realize an unanticipated loss and incur transaction costs.","page_number":122,"box":{"x":117,"y":428,"width":751,"height":12}},{"id":"f6c6f61a-db55-4c10-bb67-e9deb1aa2426","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":122,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"a3caf32f-82f9-4c57-b78e-e455fc6d5625","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to","page_number":122,"box":{"x":362,"y":459,"width":517,"height":12}},{"id":"719faa3d-4ad7-4745-b1db-9f37d41a7cab","block_type":"box","text":"enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap","page_number":122,"box":{"x":116,"y":475,"width":750,"height":12}},{"id":"9e9b108d-de33-49a2-b2c9-f95a14a74daa","block_type":"box","text":"agreement, at a designated future time on specified terms. A Fund may write (","page_number":122,"box":{"x":116,"y":490,"width":580,"height":12}},{"id":"027e8ddf-a132-4654-a7b2-ef4ee379849d","block_type":"box","text":"i.e.","page_number":122,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"87944391-cb13-4f40-b521-eb6293519c5b","block_type":"box","text":", sell) and purchase","page_number":122,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"08c46319-5b56-423b-9426-a0ec58d30b00","block_type":"box","text":"put and call swaptions. Depending on the terms of the particular option agreement, a Fund will","page_number":122,"box":{"x":117,"y":506,"width":704,"height":12}},{"id":"4916098e-1837-4c0f-8ee1-d74836a59729","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":122,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"f944dc2f-d485-4978-9f6b-53b238aaee96","block_type":"box","text":"swaption. When a Fund purchases a swaption, it risks losing only the amount of the premium it has","page_number":122,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"2d22bdb6-f759-4df9-9b32-428461adbcd6","block_type":"box","text":"paid should it decide to let the option expire unexercised. However, when a Fund writes a swaption,","page_number":122,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"9e680662-b03c-430f-b7d5-bdb4c43b72f1","block_type":"box","text":"upon exercise of the option the Fund will become obligated according to the terms of the underlying","page_number":122,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"aa6c4d83-06d2-4cc6-a66f-362aa523b0f1","block_type":"box","text":"agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":122,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"e9fac00c-f35a-4a32-991e-aa61bb3e425d","block_type":"box","text":"required, to be cleared.","page_number":122,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"b90c7ab0-a827-44b2-a9b7-bd213bb05018","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment","page_number":122,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"79c9270c-52e5-46c8-bcc7-d66af46e3000","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":122,"box":{"x":116,"y":645,"width":772,"height":12}},{"id":"3d316f29-2c6a-4901-8e3c-a869ebd3f31a","block_type":"box","text":"purchasing at a later date. A Fund generally will use these transactions for hedging purposes, not for","page_number":122,"box":{"x":117,"y":661,"width":746,"height":12}},{"id":"0da1a2cb-1c15-410b-94e2-7f89604bacb5","block_type":"box","text":"speculation.","page_number":122,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"1de2f9cc-67ad-4707-ad6d-5e49d0ee7a69","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “— Risk","page_number":122,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"17f49563-59f3-419c-9430-f32f410c5403","block_type":"box","text":"Factors in Derivatives” above.","page_number":122,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"85f37747-d94c-47e6-aa13-818d526dd09e","block_type":"box","text":"FLEX Options.","page_number":122,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"5f963dec-b21f-454d-9a6e-e3f20e5b443a","block_type":"box","text":"FLEX Options are customized option contracts available through national securities","page_number":122,"box":{"x":231,"y":754,"width":617,"height":12}},{"id":"7eebce6d-e4e3-4cd1-807e-d4ca51e48608","block_type":"box","text":"exchanges that are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX","page_number":122,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"abe32098-821c-4f27-8807-2b54a3598dae","block_type":"box","text":"Options are listed on a U.S. national securities exchange. FLEX Options provide investors with the","page_number":122,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"1a814d29-bfe5-43c8-88a7-ed020817e9a0","block_type":"box","text":"ability to customize assets referenced by the options, exercise prices, exercise styles (","page_number":122,"box":{"x":116,"y":800,"width":641,"height":12}},{"id":"d48b7aec-cce4-4701-9f0f-754e66ca6333","block_type":"box","text":"i.e.","page_number":122,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"0d879a93-202d-4465-b51a-3b421cbfa8b4","block_type":"box","text":", American","page_number":122,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"a88d1ec5-4c1a-44f7-8bcf-0f448c5b4bde","block_type":"box","text":"style, exercisable any time prior to the expiration date, or European-style, exercisable only on the","page_number":122,"box":{"x":116,"y":816,"width":721,"height":12}},{"id":"f2a3af1f-2af8-4f53-acba-cc54bad0a7c1","block_type":"box","text":"option expiration date) and expiration dates, while achieving price discovery in competitive, transparent","page_number":122,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"98df9421-e668-41d9-be47-ed0750caecf1","block_type":"box","text":"auctions markets and avoiding the counterparty exposure of OTC options positions. Each option","page_number":122,"box":{"x":116,"y":847,"width":719,"height":12}},{"id":"16cca387-b883-4643-948b-50ca18a62829","block_type":"box","text":"contract entitles the holder thereof to purchase (for the","page_number":122,"box":{"x":116,"y":862,"width":410,"height":12}},{"id":"6ccacf85-d1fc-4d16-b3a2-a9e277d3ba6e","block_type":"box","text":"call options) or sell (for the put options) shares","page_number":122,"box":{"x":527,"y":862,"width":349,"height":12}},{"id":"8aa6bebc-76ee-4e03-96b8-ff385da19466","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":122,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"8fa1fe32-352a-4fc0-a9aa-20bed6418ad9","block_type":"box","text":"II-28","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a7602a38-07bb-491f-9c1d-cf4d7d95f200","block_type":"box","text":"NM1026U-6004408-122/267","page_number":122,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5162b19e-c2e8-4250-8f5a-7b81207934eb","block_type":"box","text":"including both purchased and written put and call options (as further described below). The FLEX","page_number":123,"box":{"x":117,"y":87,"width":726,"height":12}},{"id":"2a792a68-0eaf-4982-b24f-110576b6af25","block_type":"box","text":"Options are all European style options, which means that they are exercisable at a predetermined","page_number":123,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"71153ed5-0c2f-4128-9c0e-c2253783f4d8","block_type":"box","text":"specified price (the “strike price”) only on the FLEX Option’s expiration date.","page_number":123,"box":{"x":116,"y":118,"width":569,"height":12}},{"id":"75582630-007e-4125-af48-faa0641f9173","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the","page_number":123,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"efc634c3-ad8f-4068-87dd-379e99046a57","block_type":"box","text":"“buyer for every seller and the seller for every buyer”, reducing counterparty risk for clearing members","page_number":123,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"0d00dd1c-1fb6-4d0c-892e-21708234924d","block_type":"box","text":"and options traders. Although guaranteed for settlement by the OCC, FLEX Options are still subject to","page_number":123,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"4dc7ed90-08be-40ba-b657-2b3dc8f3b4a5","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":123,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"95e8eb45-61db-4f8e-adac-71adf57269fe","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":123,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"a8fbf1c0-cc42-4faf-baf2-5a7ba0f25f8c","block_type":"box","text":"will be unable or unwilling to perform its obligations under the FLEX Options contracts.","page_number":123,"box":{"x":116,"y":227,"width":646,"height":12}},{"id":"97637499-3405-4e98-ad9b-bbc1f304a0cb","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the","page_number":123,"box":{"x":116,"y":258,"width":744,"height":12}},{"id":"e87458b0-6170-465a-85f0-9e1f1ee1c134","block_type":"box","text":"FLEX Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and","page_number":123,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"61f9dd71-fd65-42a2-b7e4-bb889b8029ce","block_type":"box","text":"rules: certain stock dividends or distributions, stock splits, reverse stock splits, rights offerings,","page_number":123,"box":{"x":117,"y":289,"width":702,"height":12}},{"id":"c2a53fb8-88de-4f85-887e-088d28bd186b","block_type":"box","text":"distributions, reorganizations, recapitalizations, or reclassifications with respect to an underlying","page_number":123,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"7c81114e-a9e1-4399-8b29-40f7bdc42ff5","block_type":"box","text":"security, or a merger, consolidation, dissolution or liquidation of the issuer of the underlying security.","page_number":123,"box":{"x":116,"y":320,"width":748,"height":12}},{"id":"41680846-1496-4480-9034-574d33785630","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":123,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"78379ffd-4d44-41bf-b9b5-0131d223101c","block_type":"box","text":"the OCC’s Securities Committee, in light of the circumstances known to it at the time such","page_number":123,"box":{"x":116,"y":351,"width":673,"height":12}},{"id":"7468c786-5f36-43af-b217-48fe3b6719de","block_type":"box","text":"determination is made, based on its judgment as to what is appropriate for the protection of investors","page_number":123,"box":{"x":116,"y":366,"width":754,"height":12}},{"id":"7ade5a94-f2e0-4878-b7e2-d04461a65252","block_type":"box","text":"and the public interest, taking into account such factors as fairness to holders and writers (or","page_number":123,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"4e788f5e-ff62-41cb-9271-dcc4afebc169","block_type":"box","text":"purchasers and sellers) of the affected options, the maintenance of a fair and orderly market in the","page_number":123,"box":{"x":117,"y":397,"width":734,"height":12}},{"id":"da49b298-4e08-4719-b569-5ecc38abc23b","block_type":"box","text":"affected options, consistency of interpretation and practice, efficiency of exercise settlement","page_number":123,"box":{"x":116,"y":413,"width":687,"height":12}},{"id":"5becb932-eb41-4df5-a779-184da46a1d91","block_type":"box","text":"procedures, and the coordination with other clearing agencies of the clearance and settlement of","page_number":123,"box":{"x":117,"y":428,"width":721,"height":12}},{"id":"9307edb6-a23c-4c00-965d-653f9916be80","block_type":"box","text":"transactions in the underlying interest.","page_number":123,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"b11e0f70-5ad4-4f82-9e28-7757e3de331e","block_type":"box","text":"Certain Considerations Regarding Options","page_number":123,"box":{"x":151,"y":475,"width":314,"height":12}},{"id":"27a9fcfc-5757-4bb7-9990-0fc5d74f3ba3","block_type":"box","text":". The FLEX Options in which each Fund may invest will","page_number":123,"box":{"x":467,"y":475,"width":414,"height":12}},{"id":"409832f1-62dd-4e35-b1e3-0541325bee88","block_type":"box","text":"be options on an exchange-traded fund (“ETF”) or the S&P 500 Index (together with such ETF, a","page_number":123,"box":{"x":150,"y":490,"width":723,"height":12}},{"id":"b278e4ef-34fd-4062-8cfc-247619ce3d7c","block_type":"box","text":"“Reference Asset”). As such, the value of a Fund’s FLEX Options will fluctuate with changes in the","page_number":123,"box":{"x":150,"y":506,"width":735,"height":12}},{"id":"493939d6-742a-45d1-af31-6f06f5aa18c0","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","page_number":123,"box":{"x":150,"y":521,"width":726,"height":12}},{"id":"b24b481d-9386-490c-8ca2-b2e8d057a845","block_type":"box","text":"the ETF, the value of an option, in general, will reflect, among other things, the time remaining until","page_number":123,"box":{"x":150,"y":537,"width":738,"height":12}},{"id":"555d608e-427d-4d99-9b47-2f1e0a0465e2","block_type":"box","text":"expiration (the end of the Outcome Period), the relationship of the exercise price to the market","page_number":123,"box":{"x":150,"y":552,"width":704,"height":12}},{"id":"ff2138c3-2dcb-4026-8a54-0795e5ac3f2c","block_type":"box","text":"price of the Reference Asset, and general market conditions. Options that expire unexercised","page_number":123,"box":{"x":150,"y":568,"width":698,"height":12}},{"id":"7d14076c-1404-45ef-ae8b-cceba14ce380","block_type":"box","text":"have no value.","page_number":123,"box":{"x":150,"y":583,"width":113,"height":10}},{"id":"191c6e0f-c6b1-4365-ad0e-2fbcd90773cf","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase","page_number":123,"box":{"x":150,"y":606,"width":734,"height":12}},{"id":"4726f6cc-9886-46af-bb42-e92bd4d2a5b1","block_type":"box","text":"(for a call option) or sell (for a put option) the Reference Asset at a predetermined specified price","page_number":123,"box":{"x":150,"y":622,"width":723,"height":12}},{"id":"619e1e41-59e6-408c-ae86-22bbf97cfb3f","block_type":"box","text":"(the “strike price”). When a Fund writes a call on the Reference Asset, it receives a premium and","page_number":123,"box":{"x":150,"y":637,"width":722,"height":12}},{"id":"17521895-0e0e-40a6-b8cd-6324896a301b","block_type":"box","text":"agrees that the purchaser of the call, upon exercise of the call, will receive from the Fund the","page_number":123,"box":{"x":150,"y":653,"width":693,"height":12}},{"id":"daa4aab9-3f42-4cea-af4f-d81e99d4da12","block_type":"box","text":"delivery of a specified number of shares of the ETF in exchange for the strike price. When a Fund","page_number":123,"box":{"x":150,"y":668,"width":724,"height":12}},{"id":"c0350cba-b5c9-4cb5-aa65-9fd954d5114e","block_type":"box","text":"buys a call on the Reference Asset, it pays a premium and has the same rights to such call as","page_number":123,"box":{"x":150,"y":684,"width":697,"height":12}},{"id":"922b0542-3573-4c46-b8d8-66134dc47190","block_type":"box","text":"indicated above. When a Fund buys a put on the Reference Asset, it pays a premium and has the","page_number":123,"box":{"x":150,"y":699,"width":725,"height":13}},{"id":"62cdaa19-8a3a-4ccd-8bc3-ac1ff62e1442","block_type":"box","text":"right to require the seller of the put, upon the Fund’s exercise of the put, to deliver the specified","page_number":123,"box":{"x":150,"y":715,"width":704,"height":12}},{"id":"e51d6907-e26c-47aa-b097-56d35b078bda","block_type":"box","text":"number of shares of the ETF in exchange for the strike price. When a Fund writes a put on the","page_number":123,"box":{"x":150,"y":730,"width":700,"height":13}},{"id":"f7d13d53-5afe-438e-bffb-bb7d4d87587e","block_type":"box","text":"Reference Asset, it receives a premium and the purchaser of the put has the right to require the","page_number":123,"box":{"x":151,"y":746,"width":708,"height":12}},{"id":"42c4ddba-91c1-4499-9df5-d074af4b1a28","block_type":"box","text":"Fund to deliver the specified number of shares of the ETF in exchange for the strike price.","page_number":123,"box":{"x":151,"y":761,"width":665,"height":13}},{"id":"8d02cb1a-359f-4528-a40b-437cb78bf618","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may","page_number":123,"box":{"x":149,"y":785,"width":701,"height":12}},{"id":"e8102994-ce15-43fe-8810-8e8a40998408","block_type":"box","text":"also utilize FLEX Options that are cash-settled. Cash-settled options give the holder the right to","page_number":123,"box":{"x":150,"y":800,"width":706,"height":12}},{"id":"f3997206-bee2-44f5-818f-172859b85cf1","block_type":"box","text":"receive an amount (or owe an amount) of cash upon the exercise of the option. Gain or loss","page_number":123,"box":{"x":150,"y":816,"width":681,"height":12}},{"id":"92c96544-c4ec-4db3-88df-a224c4d1b51f","block_type":"box","text":"depends on changes in the value of the ETF’s share price relative to the strike price for a given","page_number":123,"box":{"x":150,"y":831,"width":710,"height":12}},{"id":"15dfbe4b-e202-4880-b2d8-aac9ba5a28e0","block_type":"box","text":"option contract. The amount of cash is equal to the difference between the closing price of the","page_number":123,"box":{"x":150,"y":847,"width":702,"height":12}},{"id":"3bddf024-f31a-4cb9-9fb4-6bb88ffed72a","block_type":"box","text":"ETF’s share price and the exercise price of the option contract times a specified multiple","page_number":123,"box":{"x":151,"y":862,"width":659,"height":12}},{"id":"5c53a180-d458-45b2-93c3-5799292ff921","block_type":"box","text":"(“multiplier”), which determines the total value for each point of such difference.","page_number":123,"box":{"x":150,"y":878,"width":593,"height":12}},{"id":"f90b0a62-8d93-4d80-b1eb-217fded2be28","block_type":"box","text":"II-29","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6db1755a-bb56-4877-aaeb-4d9df5966092","block_type":"box","text":"NM1026U-6004408-123/267","page_number":123,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9aa6ace-22ab-4f53-a791-e8915eca3816","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":124,"box":{"x":150,"y":87,"width":311,"height":12}},{"id":"7b1c175b-2cfc-4dd5-b91f-7c4e6dbc9c09","block_type":"box","text":". If a Fund has purchased an option and exercises it","page_number":124,"box":{"x":462,"y":87,"width":390,"height":12}},{"id":"b69ed0a0-dcca-447f-8006-dd98b2c51161","block_type":"box","text":"before the closing value for that day is available, it runs the risk that the level of the Reference","page_number":124,"box":{"x":150,"y":102,"width":702,"height":13}},{"id":"234edaea-1fdf-4dba-bd26-85f41dc27796","block_type":"box","text":"Asset may subsequently change. If such a change causes the exercised option to fall out of the","page_number":124,"box":{"x":149,"y":118,"width":714,"height":12}},{"id":"9958b98c-15e9-4f2e-a8aa-a2d22c06616b","block_type":"box","text":"money, the applicable Fund will be required to pay the difference between the closing Reference","page_number":124,"box":{"x":150,"y":134,"width":721,"height":12}},{"id":"51748df0-97a7-4b40-9066-045a0da78184","block_type":"box","text":"Asset value and the exercise price of the option (times the applicable multiplier) to the assigned","page_number":124,"box":{"x":149,"y":149,"width":714,"height":12}},{"id":"66479a1f-de8f-4f3a-ba58-52a02427f878","block_type":"box","text":"writer.","page_number":124,"box":{"x":149,"y":165,"width":51,"height":9}},{"id":"395907b4-1ba1-49b9-b2e8-d8f63bc8f38f","block_type":"box","text":"Foreign Exchange Transactions.","page_number":124,"box":{"x":116,"y":196,"width":247,"height":12}},{"id":"166c7b5b-5524-42cd-8baf-ced1a17c77ee","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX","page_number":124,"box":{"x":116,"y":219,"width":768,"height":12}},{"id":"a48f4152-24ee-462f-8714-d6896cea947e","block_type":"box","text":"forwards”) and currency swaps, purchase and sell currency options, currency futures and related","page_number":124,"box":{"x":116,"y":234,"width":723,"height":12}},{"id":"b602c352-4fe3-409d-883c-805354ef74b0","block_type":"box","text":"options thereon (collectively, “Currency Instruments”) for purposes of hedging against the decline in the","page_number":124,"box":{"x":116,"y":250,"width":772,"height":12}},{"id":"b2ab4065-89c0-44cb-86e6-f07dac040f39","block_type":"box","text":"value of currencies in which its portfolio holdings are denominated against the U.S. dollar or, with","page_number":124,"box":{"x":116,"y":265,"width":725,"height":12}},{"id":"fec7c0ad-ccae-4a09-a3e8-dae457c87113","block_type":"box","text":"respect to certain Funds, to seek to enhance returns.","page_number":124,"box":{"x":117,"y":281,"width":397,"height":12}},{"id":"7a85a283-0e93-49ed-974b-507d244eeaf3","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities","page_number":124,"box":{"x":116,"y":312,"width":734,"height":12}},{"id":"5c22f4d5-2c6e-4d67-a629-d921f7d0365f","block_type":"box","text":"owned by a Fund, sold by a Fund but not","page_number":124,"box":{"x":116,"y":327,"width":309,"height":12}},{"id":"56d56515-3f5c-45a4-a6b1-9b7910cfe0ff","block_type":"box","text":"yet delivered, or committed or anticipated to be purchased by","page_number":124,"box":{"x":426,"y":327,"width":460,"height":12}},{"id":"2888106a-8925-459f-aa79-61560bd9fdf5","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":124,"box":{"x":116,"y":343,"width":768,"height":12}},{"id":"d2d40996-aef1-4483-bb37-24de5499a255","block_type":"box","text":"an investment in a yen-denominated security. For example, the Fund may purchase a foreign currency","page_number":124,"box":{"x":116,"y":358,"width":767,"height":12}},{"id":"3be6f09d-6bb8-4094-8746-112828a44bc2","block_type":"box","text":"put option enabling it to sell a specified amount of yen","page_number":124,"box":{"x":117,"y":374,"width":404,"height":12}},{"id":"e06c5cc5-384f-43f3-936a-024ebca4cd42","block_type":"box","text":"for dollars at a specified price by a future date.","page_number":124,"box":{"x":521,"y":374,"width":350,"height":12}},{"id":"9edaa3a8-7b8e-4e80-9a3d-78bbf50657f4","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":124,"box":{"x":116,"y":389,"width":764,"height":12}},{"id":"03755c10-2af5-4440-87b8-59974b3a7a25","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":124,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"fb308eb2-81ba-4e10-97de-7cc6f4793fae","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":124,"box":{"x":116,"y":420,"width":764,"height":12}},{"id":"6b3e568d-5000-43b5-bad1-15c968a25ccd","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":124,"box":{"x":116,"y":436,"width":727,"height":12}},{"id":"b5b73739-e6f4-4c46-ac19-d79966172291","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":124,"box":{"x":116,"y":451,"width":767,"height":12}},{"id":"6abcfdc8-d0a4-407a-a540-b48b94e4b63f","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":124,"box":{"x":117,"y":467,"width":742,"height":12}},{"id":"77499d58-c18d-4cff-8380-0e9f2520256e","block_type":"box","text":"Fund are considered hedging transactions. Certain Funds have a fundamental investment restriction","page_number":124,"box":{"x":117,"y":482,"width":749,"height":12}},{"id":"db744042-a15b-4a57-a895-ae1858ade351","block_type":"box","text":"that restricts currency option strategies.","page_number":124,"box":{"x":116,"y":498,"width":298,"height":12}},{"id":"1f04c9e0-c1df-4826-8013-4f94db55194e","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation","page_number":124,"box":{"x":117,"y":529,"width":737,"height":12}},{"id":"96307260-1d4f-4481-9c58-9b411635d9dc","block_type":"box","text":"risk. A Fund’s use of Currency Instruments to effect hedging strategies is intended to reduce the","page_number":124,"box":{"x":117,"y":544,"width":718,"height":12}},{"id":"648e88de-3d0a-4fa2-8738-ac8e077ffa12","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":124,"box":{"x":116,"y":560,"width":763,"height":12}},{"id":"820cf61d-312f-43a7-bbca-49588ffcf288","block_type":"box","text":"the NAV of the Fund’s shares from fluctuating. Moreover, although Currency Instruments will be used","page_number":124,"box":{"x":116,"y":575,"width":757,"height":12}},{"id":"0bccd785-058b-49c5-acba-e1490d0aa816","block_type":"box","text":"with the intention of hedging against adverse currency movements, transactions in Currency","page_number":124,"box":{"x":116,"y":591,"width":689,"height":12}},{"id":"73f8aa6b-a99d-4311-a6ad-66a2fdf84790","block_type":"box","text":"Instruments involve the risk that anticipated currency movements will not be accurately predicted and","page_number":124,"box":{"x":117,"y":607,"width":755,"height":11}},{"id":"eb15c2e5-a8ad-46e1-a3e3-13ed4a98e7d2","block_type":"box","text":"that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges against","page_number":124,"box":{"x":116,"y":622,"width":706,"height":12}},{"id":"6b195e4f-3890-44d7-b36a-f3cd5954a400","block_type":"box","text":"anticipated currency movements that do not occur, the Fund may realize losses and decrease its total","page_number":124,"box":{"x":116,"y":638,"width":761,"height":11}},{"id":"54b61fef-1c2e-479f-8953-45ec60215d19","block_type":"box","text":"return. Furthermore, a Fund will only engage in hedging activities from time to time and may not be","page_number":124,"box":{"x":117,"y":653,"width":738,"height":12}},{"id":"923ff235-c6fc-46f7-8e89-b8d2ff538b7f","block_type":"box","text":"engaging in hedging activities when movements in currency exchange rates actually occur.","page_number":124,"box":{"x":116,"y":669,"width":674,"height":11}},{"id":"b30d711e-5442-4627-807d-26aa83347aec","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign","page_number":124,"box":{"x":117,"y":699,"width":746,"height":13}},{"id":"940355d5-456a-414c-8730-824bf204a1f0","block_type":"box","text":"or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified","page_number":124,"box":{"x":116,"y":715,"width":766,"height":12}},{"id":"100bdc6b-42f0-4473-8616-e310e807ef9e","block_type":"box","text":"amount of a particular currency. There are no limitations on daily price moves in such forward","page_number":124,"box":{"x":116,"y":730,"width":693,"height":13}},{"id":"a780d1f6-cf69-4668-afde-dbbef209a513","block_type":"box","text":"contracts, and banks and dealers are not required to continue to make markets in such contracts.","page_number":124,"box":{"x":116,"y":746,"width":722,"height":12}},{"id":"ed08b7f1-c6b4-446f-a1b4-557aad2ecbc5","block_type":"box","text":"There have been periods during which certain banks or dealers have refused to quote prices for such","page_number":124,"box":{"x":116,"y":761,"width":751,"height":13}},{"id":"b236c25e-67ac-4e0f-bec0-a2be62c33cde","block_type":"box","text":"forward contracts or have quoted prices with an unusually wide spread between the price at which the","page_number":124,"box":{"x":116,"y":777,"width":756,"height":12}},{"id":"18fb431b-1efe-48df-b73a-6ad7ced2d591","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":124,"box":{"x":117,"y":792,"width":743,"height":13}},{"id":"5df741b8-5a62-4c6c-beb4-1ac1755cab96","block_type":"box","text":"currency controls might limit any such forward contract trading. With respect to its trading of forward","page_number":124,"box":{"x":116,"y":808,"width":740,"height":12}},{"id":"2b8e5f17-741a-4642-9f4e-5c1a72406d13","block_type":"box","text":"contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a","page_number":124,"box":{"x":116,"y":823,"width":683,"height":13}},{"id":"0a750fff-9e06-4a18-b149-aabadf55bf30","block_type":"box","text":"counterparty would deprive the Fund of any profit potential or force the Fund to cover its commitments","page_number":124,"box":{"x":116,"y":839,"width":762,"height":12}},{"id":"39f7d919-1fe2-4f07-95ee-d8216f9f8e6b","block_type":"box","text":"for resale, if any, at the then market price and could result in a loss to the Fund.","page_number":124,"box":{"x":116,"y":854,"width":595,"height":13}},{"id":"8521e58a-e969-4ea6-8b14-1c96915fa024","block_type":"box","text":"II-30","page_number":124,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a7e7c580-5894-41ed-b8ea-3d080f81fee5","block_type":"box","text":"NM1026U-6004408-124/267","page_number":124,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8605ee4a-ee31-4af3-a7aa-d82f2267fea1","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if","page_number":125,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"71801a65-5cf3-4b0a-907d-e88e28d964d9","block_type":"box","text":"correctly anticipated, in the event that (i) the currency exchange rate movement is so generally","page_number":125,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"e81ed571-665e-44cf-bf7c-180726ccaccf","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":125,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"8c981c84-8502-4a58-ae76-f378b97e026c","block_type":"box","text":"currency exchange rate movement relates to a market with respect to which Currency Instruments are","page_number":125,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"2cbe8b2a-c39e-4b3d-bb40-d8d525c3c11b","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":125,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"1237d511-57dc-436e-9c04-a42819fe362c","block_type":"box","text":"of engaging in foreign currency transactions varies with such factors as the currencies involved, the","page_number":125,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"556a03d0-59c5-4c6c-b888-aaee90ce142f","block_type":"box","text":"length of the contract period and the market conditions then prevailing. Since transactions in foreign","page_number":125,"box":{"x":117,"y":180,"width":744,"height":12}},{"id":"46a10df2-b1a0-4b54-b1d0-b8acebf84e04","block_type":"box","text":"currency exchange usually are conducted on a principal basis, no fees or commissions are involved.","page_number":125,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"98f8cc07-5609-4235-a800-7d521cdedd9b","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":125,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"b2af23c1-d8c4-463a-a3ad-be6ebabb07ca","block_type":"box","text":"(including receivables for unsettled securities sales), or has committed to purchase or anticipates","page_number":125,"box":{"x":117,"y":242,"width":724,"height":12}},{"id":"e7449d7b-ba52-4c9e-897f-a36e52f52aaf","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":125,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"6ae17aff-ee4b-46ec-af03-a90eb351017e","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":125,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"e5247d78-4d65-4008-a7dd-53aa74dd67f7","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified","page_number":125,"box":{"x":390,"y":289,"width":470,"height":12}},{"id":"292de683-f812-4c9b-9843-816ffe935976","block_type":"box","text":"amount of a specified currency or multinational currency unit at a specified price and specified future","page_number":125,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"d472604b-e8ac-44b2-8a5e-f337e45e826d","block_type":"box","text":"date. Spot foreign exchange transactions are similar but are settled in the current, or “spot”, market. A","page_number":125,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"7875fd95-4e96-4ce5-bd9a-5959e3465960","block_type":"box","text":"Fund will enter into foreign exchange transactions for purposes of hedging either a specific transaction","page_number":125,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"e72a451d-1e9b-45b2-9a90-9f011c326515","block_type":"box","text":"or a portfolio position, or, with respect to certain Funds, to seek to enhance returns. FX forwards","page_number":125,"box":{"x":116,"y":351,"width":719,"height":12}},{"id":"6ef8aadc-7687-4358-a971-af31e58800d7","block_type":"box","text":"involve substantial currency risk, credit risk and liquidity risk. A Fund may enter into a foreign exchange","page_number":125,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"984d10d6-669d-4740-b1d4-89367dc20641","block_type":"box","text":"transaction for purposes of hedging a specific transaction by, for example, purchasing a currency","page_number":125,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"0b727168-4f14-447a-8a49-51e69a4c9e15","block_type":"box","text":"needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":125,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"4a759a31-4c6e-4243-9358-c71b0dd6070e","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction","page_number":125,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"c8feb094-b562-4b68-bdec-5b0a15d8c1dc","block_type":"box","text":"for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of","page_number":125,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"778debd1-d7f7-4a4c-9534-fd3cff93a083","block_type":"box","text":"the Fund is denominated or by purchasing a currency in which the Fund anticipates acquiring a","page_number":125,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"9c79b6e3-9786-41ea-852d-2e197a4fe9a3","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":125,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"35cce4a8-7acb-44eb-8661-f123dd5c4380","block_type":"box","text":"a Currency Instrument denominated in a currency other than the currency being hedged (a “cross","page_number":125,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"50359193-64f4-405f-8d51-62c965d5f9f3","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":125,"box":{"x":117,"y":490,"width":680,"height":12}},{"id":"2740331a-4be1-4b74-8c43-cf0b6896b850","block_type":"box","text":"demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":125,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"d6c4c7c6-8c0a-4a5b-9702-68c60293658a","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross","page_number":125,"box":{"x":116,"y":521,"width":722,"height":12}},{"id":"742a5342-bf1e-42bb-8810-2ddb3860b2da","block_type":"box","text":"hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity","page_number":125,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"a4726789-c558-4c00-a7cb-79e09d851664","block_type":"box","text":"than executing a similar hedging transaction by means of the currency being hedged.","page_number":125,"box":{"x":116,"y":552,"width":638,"height":12}},{"id":"028f93b6-f3bc-4d77-a2ea-c5f8ecca6359","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on","page_number":125,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"ae33e972-6535-4dfa-a728-3dfcc26fb7bd","block_type":"box","text":"the value of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when","page_number":125,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"e128cb41-7c5e-4159-aa75-4a47d5e70b2e","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":125,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"e79242eb-0a2c-4cf0-80b5-36eca1c5c9ce","block_type":"box","text":"Proxy hedging entails entering into a forward contract to sell a currency whose changes in value are","page_number":125,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"014c99ae-6a9e-48a0-a8b0-40abcd622404","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":125,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"1ce133f8-b1ba-41c1-b7bb-c415093f9a14","block_type":"box","text":"securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy hedging involves","page_number":125,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"f27dce0e-407d-4fe3-932a-a63474e214cf","block_type":"box","text":"some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":125,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"54872778-f585-4032-8211-b8cefea2aebb","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a","page_number":125,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"55f4d177-023f-4db1-94e9-b4351d29f71b","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":125,"box":{"x":116,"y":707,"width":742,"height":12}},{"id":"5389d7fd-52e0-4f66-93bd-4e5978876017","block_type":"box","text":"between various currencies may not be present, including during the particular time that a Fund is","page_number":125,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"4f1cbc16-00e0-444c-9036-9b3aab0e8f5e","block_type":"box","text":"engaging in proxy hedging.","page_number":125,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"cf27904d-6bb0-4ff3-b70b-12ad0e2d6cb9","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more","page_number":125,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"0050f6a9-c3b8-41e8-83bd-df9885cf13b5","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":125,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"658c29c8-ef27-4f47-94d6-de53b8e70ca1","block_type":"box","text":"which the Fund expects to have portfolio exposure. For example, a Fund may hold both Canadian","page_number":125,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"b47c2106-bdaa-4477-9b04-8cbbfdb8fe8d","block_type":"box","text":"government bonds and Japanese government bonds, and the Manager or sub-adviser may believe","page_number":125,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"bd53272f-a1a0-451e-a472-27d0cbf88caa","block_type":"box","text":"that Canadian dollars will deteriorate against Japanese yen. The Fund would sell Canadian dollars to","page_number":125,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"eeae4419-43d4-4f0f-8b64-7a8432a18232","block_type":"box","text":"reduce its exposure to that currency and buy Japanese yen. This strategy would be a hedge against a","page_number":125,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"6ffdcf9e-8149-4e87-93be-f347d3d5787b","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":125,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"6bf87826-67cd-4ddf-96c0-5b13d815b7b3","block_type":"box","text":"the Japanese yen relative to the U.S. dollar.","page_number":125,"box":{"x":116,"y":878,"width":331,"height":12}},{"id":"2404b84a-48a8-4f1d-829a-a1dc84c7b1d9","block_type":"box","text":"II-31","page_number":125,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"cb489939-7adc-456c-aa4f-28ee08410716","block_type":"box","text":"NM1026U-6004408-125/267","page_number":125,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dc6254a7-bd7b-4b1b-907d-9e9f28cd64d1","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as","page_number":126,"box":{"x":116,"y":87,"width":690,"height":12}},{"id":"a9e18a13-33f8-4777-bd1b-68c588600dc8","block_type":"box","text":"non-deliverable forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be","page_number":126,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"5f8550ff-ffe2-4ab2-8409-279eeb73c4c7","block_type":"box","text":"thinly traded or are denominated in non-convertible foreign currency, where the profit or loss at the","page_number":126,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"e9e1e47a-86f0-4502-b32a-d4cb689f469e","block_type":"box","text":"time at the settlement date is calculated by taking the difference between the agreed upon exchange","page_number":126,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"dbb0e777-a3af-4011-8aa8-7722ba520ad6","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":126,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"6d4b5a76-fb38-4cea-a662-47f137faab80","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":126,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"8c1c3477-f8ec-4233-be5e-edd88e9f517c","block_type":"box","text":"the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement","page_number":126,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"57d02891-dbf0-460e-9883-efe63efd46a2","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":126,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"dd912121-6636-409c-9b6a-aeab2bef6eca","block_type":"box","text":"are commonly quoted for time periods of one month up to two years, and are normally quoted and","page_number":126,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"fe472a62-48c0-4f21-9b06-cbe8d91a2a12","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":126,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"25abf9d2-bbae-40ea-b7ae-2535ffb56d83","block_type":"box","text":"currencies that are not internationally traded.","page_number":126,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"a5c84fa5-307f-4c77-a85a-40672c8baf21","block_type":"box","text":"Currency Futures.","page_number":126,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"499516d7-5491-4f7e-b36e-853b8ea93cf8","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":126,"box":{"x":250,"y":273,"width":626,"height":12}},{"id":"14249560-0d3a-4bca-b514-11660cab825b","block_type":"box","text":"currency through use of currency futures or options on currency futures. Currency futures are similar to","page_number":126,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"3cc98f8e-bba8-4ad6-80aa-660503dd0c8f","block_type":"box","text":"forward foreign exchange transactions except that futures are standardized, exchange-traded contracts","page_number":126,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"314be8c0-4035-4a67-99db-29f2cb522d91","block_type":"box","text":"while forward foreign exchange transactions are traded in the OTC market. Currency futures involve","page_number":126,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"2a06c21d-3ac1-4a7e-8a0b-50c4fee296b9","block_type":"box","text":"substantial currency risk as well as the risks discussed above in “— Futures.”","page_number":126,"box":{"x":116,"y":335,"width":578,"height":12}},{"id":"e4ce1bab-ee8a-48bb-9992-37c31a8d1ab4","block_type":"box","text":"Currency Options.","page_number":126,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"784d5d5c-8982-41a8-8efc-d6128078227d","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":126,"box":{"x":251,"y":366,"width":626,"height":12}},{"id":"a653849b-e387-47af-a955-dbbd7ae61393","block_type":"box","text":"currency through the use of currency options. Certain Funds have fundamental investment restrictions","page_number":126,"box":{"x":116,"y":382,"width":763,"height":12}},{"id":"5cd4c916-b25a-4b93-a45a-735ca16f2e81","block_type":"box","text":"that permit the purchase of currency options, but prohibit the writing of currency options. Currency","page_number":126,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"2415de92-0d36-43b1-ac34-2f16f31d6673","block_type":"box","text":"options are similar to options on securities. For example, in consideration for an option premium the","page_number":126,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"93c603d1-fe6e-43e2-b9eb-f0abed31e278","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":126,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"09900628-b92a-4756-8423-d7048264a7fb","block_type":"box","text":"put option) a specified amount of a specified currency on or before the expiration date for a specified","page_number":126,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"46468094-620a-4f1e-bfd8-f791e410b860","block_type":"box","text":"amount of another currency. A Fund may engage in transactions in options on currencies either on","page_number":126,"box":{"x":116,"y":459,"width":737,"height":12}},{"id":"d820e2f8-28e3-4c06-89b8-a99eb60f42b3","block_type":"box","text":"exchanges or OTC markets. Such transactions in options may include exotic options on currencies,","page_number":126,"box":{"x":116,"y":475,"width":743,"height":12}},{"id":"31fabac2-958f-437b-9fbc-b28336d644a4","block_type":"box","text":"which are typically traded in OTC markets and have additional features that result in different payment","page_number":126,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"57f839ed-106e-47c3-8543-53dfe96a9179","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered","page_number":126,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"adbca9d2-7aa2-4a95-b2f3-45c59297523d","block_type":"box","text":"call options on up to 100% of the currencies in its portfolio. See “— Options” above. Currency options","page_number":126,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"d5755d5d-2788-4dd1-bb9f-fa6a4090691b","block_type":"box","text":"involve substantial currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":126,"box":{"x":117,"y":537,"width":651,"height":12}},{"id":"046ce827-8120-4d79-9e45-3dc63eb764a1","block_type":"box","text":"Currency Swaps.","page_number":126,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"4d7bba03-bfdb-4d38-a781-d3c2990fd1f4","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency","page_number":126,"box":{"x":248,"y":568,"width":557,"height":12}},{"id":"2ff1e5f9-2d0e-46c8-a2b4-425ee52ad3ba","block_type":"box","text":"fluctuations or to hedge portfolio positions. Currency swaps are transactions in which one currency is","page_number":126,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"a09765bf-4ba9-432c-bac0-4c400cc100b8","block_type":"box","text":"simultaneously bought for a second currency on a spot basis and sold for the second currency on a","page_number":126,"box":{"x":116,"y":599,"width":743,"height":12}},{"id":"869ad22a-9f8a-458b-842e-a359677888fa","block_type":"box","text":"forward basis. Currency swaps involve the exchange of the rights of a Fund and another party to make","page_number":126,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"d7a1785f-91d6-42fc-a350-330e68e023a3","block_type":"box","text":"or receive payments in specified currencies, and typically require the delivery of the entire principal","page_number":126,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"a74c1ba9-7d0f-4776-933a-ddc52ba2f7d3","block_type":"box","text":"value of one designated currency in exchange for the other designated currency. As a result, the entire","page_number":126,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"9cc6b4dc-7d90-4d06-91d0-5d36daf7b89b","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":126,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"2bda8b12-482b-472b-a11a-26e60a925b67","block_type":"box","text":"its contractual delivery obligations.","page_number":126,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"75869f54-18ef-488b-84eb-8ea28a5172cd","block_type":"box","text":"Distressed Securities.","page_number":126,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"decbbffa-2775-4da0-9421-18786f6d5d59","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary","page_number":126,"box":{"x":296,"y":707,"width":565,"height":12}},{"id":"dc1cfbef-0bec-4ad2-88f2-304802e031ed","block_type":"box","text":"market, that are the subject of bankruptcy proceedings or otherwise in default or in risk of being in","page_number":126,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"2cdeb530-aec9-4998-81ad-a19f3249eb4a","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":126,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"4fc7b4bd-0e78-4530-b2bb-9c8210620a39","block_type":"box","text":"rated in the lower rating categories by one or more nationally recognized statistical rating organizations","page_number":126,"box":{"x":117,"y":754,"width":762,"height":12}},{"id":"c4125576-094e-497c-8f7f-d9dd97647b24","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":126,"box":{"x":117,"y":769,"width":709,"height":12}},{"id":"75f419d8-b3cd-4ea3-a7b2-da0a3b6b11af","block_type":"box","text":"judgment of the Manager of equivalent quality (“Distressed Securities”). Investment in Distressed","page_number":126,"box":{"x":115,"y":785,"width":719,"height":12}},{"id":"2246c081-30b7-49fa-8d90-838c218dcd74","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":126,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"f9acc4c7-8d4e-495f-b086-56b1d1a761a7","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely","page_number":126,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"dd905119-0788-4a6c-a31d-8f546ebf3a51","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":126,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"9f0fe063-077c-4261-8012-de3ae41e45b1","block_type":"box","text":"of reorganization pursuant to which the Fund will receive new securities in return for the Distressed","page_number":126,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"3599b788-79da-4fe3-9431-ed31a104d624","block_type":"box","text":"Securities. However, there can be no assurance that such an exchange offer will be made or that such","page_number":126,"box":{"x":116,"y":878,"width":766,"height":12}},{"id":"8a4ca4b0-8eac-4fba-9478-e7cbf40eb8e1","block_type":"box","text":"II-32","page_number":126,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"13320e42-a4da-46d6-9559-935f855c58a0","block_type":"box","text":"NM1026U-6004408-126/267","page_number":126,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b2c1ed28-094e-4fea-941f-4bdc3479fb48","block_type":"box","text":"a plan of reorganization will be adopted. In addition, a significant period of time may pass between the","page_number":127,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"db5bbc61-89fc-40a7-8717-b39e76b8458e","block_type":"box","text":"time at which a Fund makes its investment in Distressed Securities and the time that any such","page_number":127,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"190de113-ef52-4887-93c4-9bf9b6dc8b8a","block_type":"box","text":"exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Fund will","page_number":127,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"579c5f18-62ce-4ed6-a2c4-f123a8b12f79","block_type":"box","text":"receive any interest payments on the Distressed Securities, the Fund will be subject to significant","page_number":127,"box":{"x":117,"y":134,"width":725,"height":12}},{"id":"9df0a38a-9f55-44c1-8e35-2b0ed06f8c88","block_type":"box","text":"uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":127,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"4c63e4b2-5c50-4aa9-90ea-dd954fb2c338","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment.","page_number":127,"box":{"x":117,"y":165,"width":741,"height":12}},{"id":"3367b233-c8ae-4596-9291-d46fb69cc803","block_type":"box","text":"Therefore, to the extent the Fund seeks capital appreciation through investment in distressed","page_number":127,"box":{"x":116,"y":180,"width":696,"height":12}},{"id":"29167e87-eb76-47eb-b871-014e7f64c28d","block_type":"box","text":"securities, the Fund’s ability to achieve current income for its shareholders may be diminished. The","page_number":127,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"e81f2de5-2b35-4884-b556-d953bbb188f1","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":127,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"f5234dc2-0973-4f1e-b5e9-dade45885c70","block_type":"box","text":"the obligations evidenced by the distressed securities will eventually be satisfied (","page_number":127,"box":{"x":116,"y":227,"width":605,"height":12}},{"id":"28518e27-ffbb-4956-a556-fd0a5d150a07","block_type":"box","text":"e.g.","page_number":127,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"f36e1ef3-f1d0-4db3-9796-c6166cc06d1d","block_type":"box","text":", through a","page_number":127,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"cb84a79e-658e-44b1-ba3d-f2883af94f8b","block_type":"box","text":"liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the distressed","page_number":127,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"0853a1de-67a4-439b-b337-36754a979cf9","block_type":"box","text":"securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":127,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"6c193c3e-b716-4e98-a0e2-211b400969e0","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there","page_number":127,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"de8e49ca-597c-425e-a214-0690c61c0705","block_type":"box","text":"can be no assurance that the securities or other assets received by a Fund in connection with such","page_number":127,"box":{"x":116,"y":289,"width":740,"height":12}},{"id":"a638d4c6-b0ea-4135-8f82-15d8c1a30382","block_type":"box","text":"exchange offer or plan of reorganization will not have a lower value or income potential than may have","page_number":127,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"1ecffe71-f3d5-42a2-a220-31b3ed18b05a","block_type":"box","text":"been anticipated when the investment was made or no value. Moreover, any securities received by a","page_number":127,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"239e1e1c-07c9-4410-88da-94370c1461bd","block_type":"box","text":"Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale.","page_number":127,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"d6b56ffb-bb0f-4b62-bc87-dc772c7d7ee9","block_type":"box","text":"Similarly, if a Fund participates in negotiations with respect to any exchange offer or plan of","page_number":127,"box":{"x":116,"y":351,"width":683,"height":12}},{"id":"ce9a039a-96bd-44f0-b409-406bfc1b7ec0","block_type":"box","text":"reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from","page_number":127,"box":{"x":117,"y":366,"width":726,"height":12}},{"id":"f2855fa5-d5ed-4848-8cc9-300ae9742af6","block_type":"box","text":"disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":127,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"6d3d1a53-2ea8-42eb-871a-099a53fd94b5","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by","page_number":127,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"cbf016ae-1096-4398-a1be-4c657117b841","block_type":"box","text":"an investor. The Fund, however, will not make investments for the purpose of exercising day-to-day","page_number":127,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"f2befe62-a7be-40d8-bc60-57b1f673737c","block_type":"box","text":"management of any issuer’s affairs.","page_number":127,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"d8acc886-12f1-4c09-b1d7-358e582ca329","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":127,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"eeb84843-9913-408b-becf-0444e14f6461","block_type":"box","text":"Although a Fund does not seek to","page_number":127,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"d038277c-a630-4e55-8d28-cc3080ba5f0c","block_type":"box","text":"implement a specific sustainability objective, strategy or process unless disclosed in its Prospectus,","page_number":127,"box":{"x":117,"y":475,"width":741,"height":12}},{"id":"023f06bd-103c-4b3b-991a-445c770dc80c","block_type":"box","text":"Fund management will consider ESG factors as part of the investment process for the Fund. Fund","page_number":127,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"3acd1861-3300-4cb5-90c9-b1b85e22758b","block_type":"box","text":"management views ESG integration as the practice of incorporating financially material ESG data or","page_number":127,"box":{"x":117,"y":506,"width":747,"height":12}},{"id":"54ef877d-db6e-4c61-9a43-469ea4fe23ef","block_type":"box","text":"information into investment processes with the objective of enhancing risk-adjusted returns. These","page_number":127,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"3d00d40d-6f46-49ea-a3b3-5dfac5cca0a3","block_type":"box","text":"ESG considerations will vary depending on a Fund’s particular investment strategies and may include","page_number":127,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"878d967a-9397-4a81-80ce-828c9a3392bd","block_type":"box","text":"consideration of third-party research as well as consideration of proprietary BlackRock research across","page_number":127,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"07ca8b65-ee7d-47ad-86a9-202c5c4ab827","block_type":"box","text":"the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":127,"box":{"x":116,"y":568,"width":725,"height":12}},{"id":"63845f0b-3521-419c-8179-745e9cdbe267","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be","page_number":127,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"b1e78760-e5af-43a0-9397-c1c4332b4b6b","block_type":"box","text":"relevant with respect to all issuers that are eligible for investment.","page_number":127,"box":{"x":117,"y":599,"width":490,"height":12}},{"id":"4b6265f1-8e4f-4a40-aa9a-fe8bb40f1a79","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. 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Stock markets are volatile. The price of equity securities will fluctuate and can","page_number":127,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"6de7de33-7d81-42bc-a5fc-63e799cd048e","block_type":"box","text":"decline and reduce the value of a portfolio investing in equities. The price of equity securities fluctuates","page_number":127,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"fc87e58f-b5ff-43f9-bf06-8f2b901907bc","block_type":"box","text":"based on changes in a company’s financial condition and overall market and economic conditions. The","page_number":127,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"21a06b71-3c42-4991-8569-703069100893","block_type":"box","text":"value of equity securities purchased by the Fund could decline if the financial condition of the","page_number":127,"box":{"x":116,"y":785,"width":689,"height":12}},{"id":"5b42692d-957f-4b5d-8168-517828a37912","block_type":"box","text":"companies the Fund invests in decline or if overall market and economic conditions deteriorate. They","page_number":127,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"45cf3ced-5bcd-45c7-93f3-fadae31f2885","block_type":"box","text":"may also decline due to factors that affect a particular industry or industries, such as labor shortages or","page_number":127,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"65d0c71d-865a-45da-b3e6-ddadc1512bbf","block_type":"box","text":"increase in production costs and competitive conditions within an industry. In addition, they may","page_number":127,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"1261b4d5-b445-4453-95a1-f7b49baa4db7","block_type":"box","text":"decline due to general market conditions that are not specifically related to a company or industry,","page_number":127,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"c2454c0c-1d51-4199-a0a5-34e6d939da1a","block_type":"box","text":"such as real or perceived adverse economic conditions, changes in the general outlook for corporate","page_number":127,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"51db1e66-19aa-4d22-99dd-76192eea7c7f","block_type":"box","text":"earnings, changes in interest or currency rates or generally adverse investor sentiment.","page_number":127,"box":{"x":116,"y":878,"width":654,"height":12}},{"id":"1355a263-44c9-4f00-8db9-8cc06ec766d1","block_type":"box","text":"II-33","page_number":127,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e61b4856-93fb-42ac-83fa-0185be35d966","block_type":"box","text":"NM1026U-6004408-127/267","page_number":127,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b24a0ca2-c44b-47c4-a6f6-b7e73d54e186","block_type":"box","text":"From time to time certain of the Funds may invest in","page_number":128,"box":{"x":117,"y":87,"width":368,"height":12}},{"id":"696e2523-c825-4eac-bfc7-c7eed984f32f","block_type":"box","text":"shares of companies through initial public offerings","page_number":128,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"c83fdeed-d91c-44b4-b4f0-0fa60e738bed","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds.","page_number":128,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"a50f5396-d23b-45a5-9457-68bfcdc61c49","block_type":"box","text":"There is no assurance that any Fund will have continued a","page_number":128,"box":{"x":116,"y":118,"width":415,"height":12}},{"id":"9e413a75-fb6c-4fb7-97ca-4ae967e74954","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":128,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"d8888b09-d573-4dbd-b698-028d953c025c","block_type":"box","text":"should not rely on these past gains as an indication of future performance. The investment performance of","page_number":128,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"a6c49423-dc38-4a6b-a559-992128586415","block_type":"box","text":"a Fund during periods when it is unable to invest signifi","page_number":128,"box":{"x":116,"y":149,"width":389,"height":12}},{"id":"9b7e9944-c8d8-4a4e-a341-555aa847f7e5","block_type":"box","text":"cantly or at all in IPOs may be lower than during","page_number":128,"box":{"x":506,"y":149,"width":345,"height":12}},{"id":"d5196bcf-18e8-4be2-8e11-f563430ced65","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":128,"box":{"x":117,"y":165,"width":694,"height":11}},{"id":"4ca8f808-dd48-4227-823a-6df5578c4c10","block_type":"box","text":"performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as","page_number":128,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"ccb53457-f46e-408f-85b4-1c6188b96639","block_type":"box","text":"investing in companies with smaller market capita","page_number":128,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"c37368a2-8523-41f0-9daa-3599606cc708","block_type":"box","text":"lizations. Securities issued in IPOs have no trading","page_number":128,"box":{"x":470,"y":196,"width":364,"height":12}},{"id":"362293f0-41df-4ab0-bfcf-76cfe262e9ce","block_type":"box","text":"history, and information about the companies may be av","page_number":128,"box":{"x":117,"y":211,"width":399,"height":12}},{"id":"adb1e7f5-b017-435c-a782-9ac5abdc904b","block_type":"box","text":"ailable for very limited periods. In addition, the","page_number":128,"box":{"x":516,"y":211,"width":330,"height":12}},{"id":"86a77059-fe9f-45e3-b340-9cb8c8ff6d6a","block_type":"box","text":"prices of securities sold in IPOs may be highly volatile","page_number":128,"box":{"x":117,"y":227,"width":380,"height":12}},{"id":"547195d4-b408-4357-b31f-75ed7e7e226c","block_type":"box","text":"or may decline shortly after the initial public offering.","page_number":128,"box":{"x":497,"y":227,"width":377,"height":12}},{"id":"8f786673-5f2d-4047-a404-69837a3fb801","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These","page_number":128,"box":{"x":116,"y":258,"width":685,"height":12}},{"id":"2f3b7816-4252-40ba-9d7b-52a991fe8e7f","block_type":"box","text":"organizations will normally have more limited product lines, markets and financial resources and will be","page_number":128,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"d58d1c15-8e00-41ad-898a-68293e6807ef","block_type":"box","text":"dependent upon a more limited management group than larger capitalized companies. In addition, it is","page_number":128,"box":{"x":116,"y":289,"width":764,"height":12}},{"id":"028e0b1b-ef86-4edb-8e54-a0ca22a1f24b","block_type":"box","text":"more difficult to get information on smaller companies, which tend to be less well known, have shorter","page_number":128,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"3a2229d9-9178-4e87-829a-4b8e234c1ace","block_type":"box","text":"operating histories, do not have significant ownership by large investors and are followed by relatively","page_number":128,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"b4805160-004b-4eb8-a10b-21e443485f85","block_type":"box","text":"few securities analysts. The securities of smaller capitalized companies are often traded in the OTC","page_number":128,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"59159104-737e-4e41-8829-a6bf95beb0e5","block_type":"box","text":"markets and may have fewer market makers and wider price spreads. This may result in greater price","page_number":128,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"847f3c1a-2f7d-4699-97e6-f7c654be5161","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":128,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"64644ef7-7d16-400d-ab66-8121e3ed560e","block_type":"box","text":"more established companies.","page_number":128,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"39727a95-fecd-4d30-86d6-f7750066747b","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks","page_number":128,"box":{"x":117,"y":413,"width":693,"height":12}},{"id":"425e3905-fec9-4e15-9143-479498e43c75","block_type":"box","text":"associated with investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds","page_number":128,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"5c9d2a7a-e46b-4e2f-b814-2d01352b1df9","block_type":"box","text":"may also invest in shares of private companies, which are subject to the risks of “Illiquid Investments”","page_number":128,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"bbbbe902-08d0-4b4b-914d-b5a9e52d7ac6","block_type":"box","text":"and “Restricted Securities” described below.","page_number":128,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"d2d11ac8-2893-4455-91a2-fa4334f8cfd9","block_type":"box","text":"Real Estate-Related Securities.","page_number":128,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"3d9eec82-317d-4d2f-9bee-7c3ff6789a3e","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may","page_number":128,"box":{"x":349,"y":490,"width":535,"height":12}},{"id":"58746f04-2f66-4786-8fa3-564f68db9004","block_type":"box","text":"invest in equity securities of issuers that are principally engaged in the real estate industry. Such","page_number":128,"box":{"x":117,"y":506,"width":719,"height":12}},{"id":"2900fc21-2e74-4572-8c81-cc7f47e053a8","block_type":"box","text":"investments are subject to certain risks associated with the ownership of real estate and with the real","page_number":128,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"4be2b62f-50ba-4094-a3ed-d1d4a4bf364c","block_type":"box","text":"estate industry in general. These risks include, among others: possible declines in the value of real","page_number":128,"box":{"x":116,"y":537,"width":738,"height":12}},{"id":"c908c406-9962-4f0a-99f1-a1422de2bd72","block_type":"box","text":"estate; risks related to general and local economic conditions; possible lack of availability of mortgage","page_number":128,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"58ca561c-fae4-4d11-b873-4c4042a9a9aa","block_type":"box","text":"funds or other limitations on access to capital; overbuilding; risks associated with leverage; market","page_number":128,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"cd46ddeb-e29d-4b12-8fa3-df14bc180dc7","block_type":"box","text":"illiquidity; extended vacancies of properties; increase in competition, property taxes, capital","page_number":128,"box":{"x":117,"y":583,"width":679,"height":12}},{"id":"7d9a476b-7f06-47e6-b4c2-f3cb6b118844","block_type":"box","text":"expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":128,"box":{"x":116,"y":599,"width":765,"height":12}},{"id":"10137820-265f-42dd-999e-b24c6d0d42ec","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental","page_number":128,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"efe42621-ee64-41a2-b270-46368f035f50","block_type":"box","text":"problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured","page_number":128,"box":{"x":117,"y":630,"width":748,"height":12}},{"id":"f707134c-6cba-4d1f-aa5c-1a4f365ddea2","block_type":"box","text":"damages from floods, earthquakes or other natural disasters; limitations on and variations in rents,","page_number":128,"box":{"x":116,"y":645,"width":736,"height":12}},{"id":"55a8bd59-d05c-4371-8057-3dcd2b1b2679","block_type":"box","text":"including decreases in market rates for rents; investment in developments that are not completed or","page_number":128,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"30be89e8-a6f0-4133-9f96-22fc7445a168","block_type":"box","text":"that are subject to delays in completion; and changes in interest rates. To the extent that assets","page_number":128,"box":{"x":116,"y":676,"width":710,"height":12}},{"id":"398f89a6-0e82-4011-a305-8d8b8dc9a29b","block_type":"box","text":"underlying a Fund’s investments are concentrated geographically, by property type or in certain other","page_number":128,"box":{"x":117,"y":692,"width":750,"height":12}},{"id":"31a3e976-044b-4ba0-8296-931b236957f5","block_type":"box","text":"respects, the Fund may be subject to certain of the foregoing risks to a greater extent. Investments by","page_number":128,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"4b198336-c207-48f9-b882-6e0ac0bb2ac4","block_type":"box","text":"a Fund in securities of companies providing mortgage servicing will be subject to the risks associated","page_number":128,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"93850613-52c1-4ce2-ba9c-76202663d3b6","block_type":"box","text":"with refinancings and their impact on servicing rights.","page_number":128,"box":{"x":116,"y":738,"width":393,"height":12}},{"id":"8d46d2e0-9d5a-4b0e-bf52-168a7406d0f3","block_type":"box","text":"In addition, if a Fund receives rental income or income from the disposition of real property acquired as","page_number":128,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"8c40dcb2-bf20-4774-86ab-007b4dc40f84","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":128,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"dfebe510-792e-46e9-96bb-ef0b767db45a","block_type":"box","text":"Fund’s ability to retain its tax status as a regulated investment company because of certain income","page_number":128,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"d8b17a3f-1692-42c2-b2aa-bddebba799bc","block_type":"box","text":"source requirements applicable to regulated investment companies under the Internal Revenue Code","page_number":128,"box":{"x":116,"y":816,"width":752,"height":12}},{"id":"83c1754f-e1ce-4b63-8e19-7d1fb39a4fb9","block_type":"box","text":"of 1986, as amended (the “Code”).","page_number":128,"box":{"x":116,"y":831,"width":263,"height":12}},{"id":"1ae055be-e471-4d93-ab16-e8df546916f2","block_type":"box","text":"Securities of Smaller or Emerging Growth Companies.","page_number":128,"box":{"x":117,"y":862,"width":401,"height":12}},{"id":"5bda0e89-a7ab-4b16-bfca-a878f53b11d7","block_type":"box","text":"Investment in smaller or emerging growth","page_number":128,"box":{"x":520,"y":862,"width":318,"height":12}},{"id":"15bcc8e8-edf3-4d93-b848-399818c3948e","block_type":"box","text":"companies involves greater risk than is customarily associated with investments in more established","page_number":128,"box":{"x":116,"y":878,"width":749,"height":12}},{"id":"4f3f3ed1-c51a-4469-9f92-873a747a78a0","block_type":"box","text":"II-34","page_number":128,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6e336749-cc12-419d-8800-db5886ed9ee5","block_type":"box","text":"NM1026U-6004408-128/267","page_number":128,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c5845c98-d15e-4d16-8348-2f7560f88e6a","block_type":"box","text":"companies. The securities of smaller or emerging growth companies may be subject to more abrupt or","page_number":129,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"db43637c-6c3a-401e-a3fd-7f1845927f38","block_type":"box","text":"erratic market movements than larger, more established companies or the market average in general.","page_number":129,"box":{"x":116,"y":103,"width":761,"height":12}},{"id":"b05cc5c8-38dd-4cfe-89ed-ad6d307c71c0","block_type":"box","text":"These companies may have limited product lines, markets or financial resources, or they may be","page_number":129,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"87af201d-25cf-464c-b16a-810c3d914ac9","block_type":"box","text":"dependent on a limited management group.","page_number":129,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"e7cf7a20-7b00-41d6-ae34-3e03cfa1246a","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be","page_number":129,"box":{"x":117,"y":163,"width":771,"height":12}},{"id":"10743509-47fa-4974-9277-f0e539b4b8a3","block_type":"box","text":"considered speculative. Full development of these companies and trends frequently takes time.","page_number":129,"box":{"x":116,"y":178,"width":713,"height":12}},{"id":"eb6d1797-5874-42a4-855d-a2bd7ae33b13","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":129,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"4dda4fea-7fcc-438e-9bdd-d7f1ccbdcc48","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":129,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"7e37d55a-c1d3-46c2-ae9a-a3b6d911edbf","block_type":"box","text":"securities exchange. As a result, the disposition by a Fund of portfolio securities to meet redemptions","page_number":129,"box":{"x":116,"y":238,"width":756,"height":12}},{"id":"7f3db301-ed23-4787-af5e-6cd26b9a52b4","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":129,"box":{"x":116,"y":254,"width":749,"height":12}},{"id":"ad739a0b-9ba9-4002-9bab-01b8ea2aebed","block_type":"box","text":"these securities at a discount from market prices or during periods when, in Fund management’s","page_number":129,"box":{"x":116,"y":269,"width":722,"height":12}},{"id":"f9e8bbb8-e28e-4fe5-9c8c-5d9a5bf79ed0","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":129,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"a1004faf-69c5-4388-89c9-8faf5049d421","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee","page_number":129,"box":{"x":116,"y":314,"width":714,"height":12}},{"id":"ab2e07bf-dd8b-4ffe-94fb-d4ca19e7db55","block_type":"box","text":"successful investment results. Careful initial selection is particularly important in this area as many new","page_number":129,"box":{"x":116,"y":329,"width":770,"height":12}},{"id":"83d3447d-8ea1-46a2-b505-8075004689ac","block_type":"box","text":"enterprises have promise but lack certain of the fundamental factors necessary to prosper. Investing in","page_number":129,"box":{"x":116,"y":345,"width":767,"height":12}},{"id":"ecbf19ed-a706-4ae3-82f8-505d3378510e","block_type":"box","text":"small cap and emerging growth companies requires specialized research and analysis.","page_number":129,"box":{"x":116,"y":360,"width":651,"height":12}},{"id":"3ab03c9c-b5c8-4f5b-92c6-237d497852e4","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into","page_number":129,"box":{"x":117,"y":389,"width":753,"height":12}},{"id":"3c08aa83-c14c-4ae9-8b19-920d096bf85c","block_type":"box","text":"significant business enterprises. A Fund may invest in securities of small issuers in the relatively early","page_number":129,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"9c699e1f-ae23-41f4-93d7-5f0f683747f7","block_type":"box","text":"stages of business development that have a new technology, a unique or proprietary product or","page_number":129,"box":{"x":116,"y":420,"width":714,"height":12}},{"id":"1a8a2a78-5a89-44a8-83e5-c521c5ada9fc","block_type":"box","text":"service, or a favorable market position.","page_number":129,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"09449b0f-4a5e-4598-b289-2375c89695fb","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":129,"box":{"x":117,"y":465,"width":757,"height":12}},{"id":"487842cb-2e3f-4e07-b9c0-621f60d621cf","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying","page_number":129,"box":{"x":116,"y":480,"width":763,"height":13}},{"id":"f446010d-4d6c-41be-8f10-ec5119a17ebc","block_type":"box","text":"stages of their business development. The market valuation of small cap issuers tends to fluctuate","page_number":129,"box":{"x":116,"y":496,"width":734,"height":12}},{"id":"1175a7b0-61e5-4234-bce0-6c43b5a89096","block_type":"box","text":"during economic or market cycles.","page_number":129,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"f7479bda-90a7-4562-82d8-71065fb22161","block_type":"box","text":"Tracking Stocks","page_number":129,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"a1317a1d-d0ef-4444-86da-2bc17a7c364d","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a","page_number":129,"box":{"x":237,"y":540,"width":604,"height":13}},{"id":"39227b01-3c34-4161-a24a-062024d3ee3b","block_type":"box","text":"specific business unit or operating division within a larger company and is designed to “track” the","page_number":129,"box":{"x":116,"y":556,"width":723,"height":12}},{"id":"85e97aab-1349-45c4-93f2-a4351b4b76fb","block_type":"box","text":"performance of such business unit or division. The tracking stock may pay dividends to shareholders","page_number":129,"box":{"x":117,"y":571,"width":751,"height":13}},{"id":"c939b586-e7c9-4c0d-b953-7e8841753180","block_type":"box","text":"independent of the parent company. The parent company, rather than the business unit or division,","page_number":129,"box":{"x":117,"y":587,"width":739,"height":12}},{"id":"b5610b3a-5a57-4451-97c6-35e9d96179dd","block_type":"box","text":"generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same","page_number":129,"box":{"x":116,"y":602,"width":768,"height":13}},{"id":"cd3af9dd-345d-4eab-8a77-12e384f8bae9","block_type":"box","text":"rights as holders of the company’s common stock.","page_number":129,"box":{"x":117,"y":618,"width":377,"height":12}},{"id":"9d80d52b-97a0-4d63-b854-696b8e19485a","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":129,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"2b91597c-df47-4156-bb2f-8f52708ad79b","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes","page_number":129,"box":{"x":389,"y":647,"width":464,"height":12}},{"id":"c5282a38-5813-475c-9cda-3fd81ed2d8bc","block_type":"box","text":"representing debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and","page_number":129,"box":{"x":117,"y":663,"width":765,"height":12}},{"id":"f6dfe158-6ef6-429e-a120-3a01e7c57640","block_type":"box","text":"ETFs. An ETN’s returns are based on the performance of one or more underlying assets, reference","page_number":129,"box":{"x":117,"y":678,"width":737,"height":12}},{"id":"09408957-3749-46b3-b2bb-7c40be4f2738","block_type":"box","text":"rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange and","page_number":129,"box":{"x":117,"y":694,"width":724,"height":12}},{"id":"f190bb4a-56b2-4b43-8dd4-17f35549f6a5","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":129,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"87ef6824-af77-4b47-af74-30b2c4d1797e","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":129,"box":{"x":116,"y":725,"width":748,"height":12}},{"id":"2a4cdfa7-82bd-48f1-9b72-b009a3dc00a0","block_type":"box","text":"(“reference instrument”) to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do","page_number":129,"box":{"x":117,"y":740,"width":753,"height":12}},{"id":"45bb4935-5fbf-42f1-b44b-6ddbfcc3ee0a","block_type":"box","text":"not make periodic interest payments, and principal is not protected.","page_number":129,"box":{"x":117,"y":756,"width":497,"height":12}},{"id":"5a9347b0-1077-45bc-9a75-60c042131ceb","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":129,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"932d7e51-2001-43f2-b0ef-d715999859ca","block_type":"box","text":"demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable","page_number":129,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"d0553329-e4d6-401b-aff6-68d512b23ea5","block_type":"box","text":"interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and","page_number":129,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"df285129-d287-4db4-a609-47644ab3ee46","block_type":"box","text":"economic, legal, political or geographic events that affect the reference instrument. ETNs are subject to","page_number":129,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"b6dad3a2-3e19-4655-a955-2b2980e3fbf9","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":129,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"c93f8603-1fc1-45ef-8bfc-7f014f08b3d7","block_type":"box","text":"the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will bear","page_number":129,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"cb7da702-4364-4bde-b01f-67d46f1faa42","block_type":"box","text":"its proportionate share of any fees and expenses borne by the ETN.","page_number":129,"box":{"x":117,"y":878,"width":509,"height":12}},{"id":"93d46355-f898-4f9a-a6a4-db1b8a33046a","block_type":"box","text":"II-35","page_number":129,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1c463c34-e126-4044-85d5-bdf173f68fd3","block_type":"box","text":"NM1026U-6004408-129/267","page_number":129,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5b3b34fd-1f2c-48dd-8c1e-84294541e2b8","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference","page_number":130,"box":{"x":116,"y":87,"width":720,"height":12}},{"id":"eba0cd70-910f-4fea-b95f-efee825716db","block_type":"box","text":"instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument.","page_number":130,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"cfda3dff-5c19-448e-9677-c5c357412f52","block_type":"box","text":"Some ETNs that use leverage may, at times, be illiquid and","page_number":130,"box":{"x":116,"y":118,"width":446,"height":12}},{"id":"29c54214-2410-461a-a6c5-686d88d0d3cb","block_type":"box","text":"may be difficult to purchase or sell at a fair","page_number":130,"box":{"x":563,"y":118,"width":319,"height":12}},{"id":"e6975328-0267-4fbc-ad57-71eab342a768","block_type":"box","text":"price. Levered ETNs are subject to the same risk as other instruments that use leverage in any form.","page_number":130,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"0555bf27-b79a-43dc-afba-fc752476e194","block_type":"box","text":"While leverage allows for greater potential return, the potential for loss is also greater. Finally,","page_number":130,"box":{"x":116,"y":149,"width":700,"height":12}},{"id":"f3b8ccb0-3aa7-4a0e-9f46-bb6cf474d05e","block_type":"box","text":"additional losses may be incurred if the investment loses value because, in addition to the money lost","page_number":130,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"5533fa42-46fc-45bb-bbb3-d2af7e5b0401","block_type":"box","text":"on the investment, the loan still needs to be repaid.","page_number":130,"box":{"x":116,"y":180,"width":384,"height":12}},{"id":"4e78edb3-51db-44f0-8857-e223220476d3","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its","page_number":130,"box":{"x":117,"y":210,"width":685,"height":12}},{"id":"af4adcc8-23f3-4ce4-b572-d03e9ff4a490","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":130,"box":{"x":116,"y":226,"width":757,"height":12}},{"id":"24790fd2-2db9-49ff-81cc-422db17a99b3","block_type":"box","text":"change in the underlying reference instrument. The market value of ETN shares may differ from the","page_number":130,"box":{"x":116,"y":241,"width":744,"height":12}},{"id":"f36193dd-38fd-4568-b0b1-53d11b98c3cd","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":130,"box":{"x":116,"y":257,"width":748,"height":12}},{"id":"195a6043-6463-4868-8093-cd5f07c07bde","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":130,"box":{"x":116,"y":272,"width":732,"height":12}},{"id":"d62f2023-df59-4ff2-bb8e-5d87ceafe447","block_type":"box","text":"demand in the market for the assets underlying the reference instrument that the ETN seeks to track.","page_number":130,"box":{"x":116,"y":288,"width":755,"height":12}},{"id":"11fb79ff-460c-4743-b7b2-08a582eb9a8d","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":130,"box":{"x":116,"y":318,"width":761,"height":12}},{"id":"7a917008-61dc-43d2-b13b-3c9bc6634034","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":130,"box":{"x":117,"y":333,"width":728,"height":12}},{"id":"65733ca7-2f9c-43a7-aa06-a90c109a9041","block_type":"box","text":"availability of a secondary market. An investor in an ETN could lose some or all of the amount","page_number":130,"box":{"x":116,"y":349,"width":701,"height":12}},{"id":"11fe0313-2d84-4245-a4ca-38d9e06ab60d","block_type":"box","text":"invested.","page_number":130,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"10d8bfc0-365e-4b29-86d1-b219e8336fdf","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a","page_number":130,"box":{"x":117,"y":394,"width":739,"height":12}},{"id":"20637045-fed1-452d-8bb5-a64bde878520","block_type":"box","text":"court may not uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and","page_number":130,"box":{"x":116,"y":410,"width":742,"height":12}},{"id":"e1376141-e29d-4b56-87d8-07af55767b86","block_type":"box","text":"character of income and gains derived by a Fund from investments in ETNs may be affected by future","page_number":130,"box":{"x":116,"y":425,"width":762,"height":12}},{"id":"79d0d01e-c3e0-4929-87f6-685f7291be00","block_type":"box","text":"legislation.","page_number":130,"box":{"x":117,"y":441,"width":83,"height":12}},{"id":"90d6d70b-e69c-48ea-ac60-3997e47d685f","block_type":"box","text":"Foreign Investments.","page_number":130,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"b900be4d-0761-4336-8bb4-21d163e8250a","block_type":"box","text":"Foreign Investment Risks.","page_number":130,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"1e86f183-102b-47e5-9c49-2241c5865c49","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from","page_number":130,"box":{"x":310,"y":493,"width":540,"height":13}},{"id":"11480c9a-fc7b-4717-a2f5-354e08bc5ee8","block_type":"box","text":"issuers located in emerging market countries. These securities may be denominated in U.S. dollars or","page_number":130,"box":{"x":117,"y":509,"width":760,"height":12}},{"id":"d631ae07-02c6-42fb-aba7-edfc780706da","block_type":"box","text":"in a foreign currency. Investing in foreign securities involves risks not typically associated with investing","page_number":130,"box":{"x":117,"y":524,"width":770,"height":13}},{"id":"60a0f14f-af9a-44f5-a2ee-5452d554179d","block_type":"box","text":"in securities of companies organized and operated in the United States that can increase the chances","page_number":130,"box":{"x":117,"y":540,"width":759,"height":12}},{"id":"92992616-7723-489e-ab77-1c2c29b4ff3b","block_type":"box","text":"that a Fund will lose money.","page_number":130,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"b906d0b6-c752-4311-9d5a-321108e239d8","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be","page_number":130,"box":{"x":116,"y":586,"width":762,"height":12}},{"id":"83c5214a-41cf-4d44-986f-4d9fce900492","block_type":"box","text":"foreign securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are","page_number":130,"box":{"x":116,"y":601,"width":766,"height":12}},{"id":"585d3295-bd24-4668-99e0-8fc6d962218a","block_type":"box","text":"conducted from the U.S., (ii) the company’s equity securities trade principally on a U.S. stock","page_number":130,"box":{"x":116,"y":617,"width":694,"height":12}},{"id":"988c8ccf-6d73-4f89-bb9b-fe7743141220","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":130,"box":{"x":116,"y":632,"width":729,"height":12}},{"id":"96ff578e-e8f4-498c-a5fb-942920802c38","block_type":"box","text":"securities is included in the Fund’s primary U.S. benchmark index.","page_number":130,"box":{"x":116,"y":648,"width":496,"height":12}},{"id":"f89b10f3-7599-4d9d-9083-716604698a56","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations","page_number":130,"box":{"x":117,"y":678,"width":721,"height":12}},{"id":"78691338-5ba5-4d65-9a3e-bc33992d4a97","block_type":"box","text":"issued or guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities","page_number":130,"box":{"x":117,"y":693,"width":762,"height":12}},{"id":"e234675b-9e72-48fd-8030-27cd350e1f68","block_type":"box","text":"or political subdivisions, including a foreign state, province or municipality; (b) debt obligations of","page_number":130,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"0ecbdc87-6a75-4dc6-ba86-569e0b32c464","block_type":"box","text":"supranational organizations; (c) debt obligations of foreign banks and bank holding companies;","page_number":130,"box":{"x":116,"y":724,"width":703,"height":12}},{"id":"97391228-96d6-47e9-ae59-b6bccce8bc93","block_type":"box","text":"(d) debt obligations of domestic banks and corporations issued in foreign currencies; (e) debt","page_number":130,"box":{"x":117,"y":740,"width":689,"height":12}},{"id":"7ac383db-e564-4b68-8a76-bf73aeedefdb","block_type":"box","text":"obligations denominated in the Euro; and (f) foreign corporate debt securities and commercial paper.","page_number":130,"box":{"x":116,"y":755,"width":746,"height":12}},{"id":"345da252-56f3-4d07-9d58-8554b2cfdb65","block_type":"box","text":"Such securities may include loan participations and assignments, convertible securities and","page_number":130,"box":{"x":116,"y":771,"width":678,"height":12}},{"id":"9c4843e0-c195-417a-8be1-c5f693fa75c4","block_type":"box","text":"zero-coupon securities.","page_number":130,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"07c31ba1-3ddf-4b6a-b124-29b15905c300","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign","page_number":130,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"a1d5ccd7-5b6b-4e4d-975a-b0c3b16708ae","block_type":"box","text":"withholding taxes.","page_number":130,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"6f79109a-259d-470b-baab-f3ed41179270","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign","page_number":130,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"6fddb9d7-7c46-4d1e-9782-18e3da9baecc","block_type":"box","text":"exchanges or in foreign markets that are closed when the securities exchange on which the Fund’s","page_number":130,"box":{"x":116,"y":877,"width":740,"height":12}},{"id":"3b9e7c28-0710-4ac7-869b-cd8bd72a3af4","block_type":"box","text":"II-36","page_number":130,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ebce5fee-5e56-4735-8a73-cb395bd48597","block_type":"box","text":"NM1026U-6004408-130/267","page_number":130,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b13b98a8-f277-4b3f-b610-320a251cd84a","block_type":"box","text":"shares trade is open, there are likely to be deviations between the current price of such an underlying","page_number":131,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"2bdd0e21-785e-42b3-bfef-34395849bd70","block_type":"box","text":"security and the last quoted price for the underlying security (","page_number":131,"box":{"x":116,"y":102,"width":454,"height":13}},{"id":"9e3d0e2f-3ee2-4dae-b31f-94ce7e5d80b6","block_type":"box","text":"i.e.","page_number":131,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"db110222-d868-4c3d-a7b7-eefacf443d57","block_type":"box","text":", the Fund’s quote from the closed","page_number":131,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"e5ee76be-7057-4037-8157-af08d39a801e","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":131,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"6307d9d1-3f29-48b7-91e6-c397d59a3e76","block_type":"box","text":"portion of the Fund’s underlying securities or other instruments trade on that closed foreign market or","page_number":131,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"0a997905-f040-43fe-a38b-cd683d01fbb3","block_type":"box","text":"when the foreign market is closed for unscheduled reasons. These deviations may result in premiums","page_number":131,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"689dc138-f8c0-4117-91c4-9e55ce5e3ecc","block_type":"box","text":"or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":131,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"3fd6d28b-ba99-4f21-8c7b-67882fa1e351","block_type":"box","text":"Foreign Market Risk.","page_number":131,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"e8abfac8-b629-4161-9a55-e884c041b800","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more","page_number":131,"box":{"x":269,"y":196,"width":521,"height":12}},{"id":"9f977e7f-3313-43fd-b8ea-537eed270b5f","block_type":"box","text":"diversification than a Fund that invests only in the United States because securities traded on foreign","page_number":131,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"63f32ff5-20e7-4b47-a6e3-e06f7617643f","block_type":"box","text":"markets have often (though not always) performed differently from securities traded in the United","page_number":131,"box":{"x":117,"y":227,"width":715,"height":12}},{"id":"588aa686-2b7f-4e58-bfec-c6d1063b7b32","block_type":"box","text":"States. However, such investments often involve risks not present in U.S. investments that can increase","page_number":131,"box":{"x":116,"y":242,"width":769,"height":12}},{"id":"8df31c2b-243b-4af5-b9c0-590cc36064de","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":131,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"bfd97dc7-2f26-4867-986f-bde206904a3a","block_type":"box","text":"are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it","page_number":131,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"4ffc20b6-2c2a-4e3b-985c-5953b1d350f6","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":131,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"c2505f35-011e-4f1c-851a-f59cd052e527","block_type":"box","text":"securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":131,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"731baafd-e0ac-436c-a35e-c7772cefdf01","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of","page_number":131,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"44ff8e41-a567-4e42-96c8-14316329f47c","block_type":"box","text":"punitive taxes or tariffs. In addition, economic conditions, such as volatile currency exchange rates and","page_number":131,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"8de54874-bff8-4652-b3ed-f970d2b838b5","block_type":"box","text":"interest rates, political events, military action and other conditions may, without prior warning, lead to the","page_number":131,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"6c1a858d-d70d-476b-be1f-86541be8baa6","block_type":"box","text":"governments of certain countries, or the U.S. Government with respect to certain countries, prohibiting","page_number":131,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"2e6a6d6c-4a20-47c2-94be-ff45a3842d88","block_type":"box","text":"or imposing substantial restrictions through capital controls and/or sanctions on foreign investing in the","page_number":131,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"a33526d4-57fa-46b1-a206-97e3d6e701c7","block_type":"box","text":"capital markets or certain industries in those countries. Capital controls and/or sanctions may include","page_number":131,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"fc65862b-33e2-4e61-a25e-34283aa09647","block_type":"box","text":"the prohibition of, or restrictions on, the ability to own or transfer currency, securities, derivatives or","page_number":131,"box":{"x":116,"y":413,"width":730,"height":12}},{"id":"8a446122-533b-4819-8bf0-68fca1877300","block_type":"box","text":"other assets and may also include retaliatory actions of one government against another government,","page_number":131,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"ac269ae4-5c5d-4bf3-b0bc-7ef434e62775","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":131,"box":{"x":116,"y":444,"width":758,"height":12}},{"id":"d3e6ec40-64a5-40a4-8964-bd118e6cbbfd","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the","page_number":131,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"2fca2b1e-459c-4220-ad93-603038a8aa8f","block_type":"box","text":"ability to transfer the Fund’s assets or income back into the United States, and could negatively impact","page_number":131,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"577c2983-0dee-4372-b49e-9b67ab2b1910","block_type":"box","text":"the value and/or liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the","page_number":131,"box":{"x":116,"y":490,"width":757,"height":12}},{"id":"f239c287-9a77-4365-9c59-5827e88838ae","block_type":"box","text":"Fund to decline in value. Other potential foreign market risks include exchange controls, difficulties in","page_number":131,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"2ede1238-c268-448e-bed8-984cb743bfb5","block_type":"box","text":"pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal","page_number":131,"box":{"x":117,"y":521,"width":727,"height":12}},{"id":"49abd3b6-9195-47a4-8d53-138b6196c02f","block_type":"box","text":"judgments in foreign courts, and political and social conditions, such as diplomatic relations,","page_number":131,"box":{"x":115,"y":537,"width":680,"height":12}},{"id":"c056ab15-5715-4b89-83d4-0c3e6c4864fe","block_type":"box","text":"confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or","page_number":131,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"53db4481-0634-4d46-bfa1-4229e685afdb","block_type":"box","text":"change in) exchange control regulations. Legal remedies available to investors in certain foreign","page_number":131,"box":{"x":116,"y":568,"width":711,"height":12}},{"id":"2c6c1886-108c-401e-a98d-c85b8ec5bbc7","block_type":"box","text":"countries may be less extensive than those available to investors in the United States or other foreign","page_number":131,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"97058d17-81cd-4a8c-94b4-8bc0a512d1ea","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the","page_number":131,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"fe2b1d0a-e325-4b7d-8ace-bef8970ffb83","block_type":"box","text":"United States or abroad could result in appreciation or depreciation of portfolio securities and could","page_number":131,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"5ac199a4-efb2-432c-a90b-c4bb4b924df0","block_type":"box","text":"favorably or adversely affect a Fund’s operations.","page_number":131,"box":{"x":116,"y":630,"width":368,"height":12}},{"id":"69a2cc0d-32b0-4fd0-98d7-82089af5b16a","block_type":"box","text":"Foreign Economy Risk.","page_number":131,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"31e5856f-66c2-4cc8-87c4-6f9d95684384","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with","page_number":131,"box":{"x":295,"y":661,"width":579,"height":12}},{"id":"b08e8ca6-cc0d-4caf-a77c-6f38efbe7c72","block_type":"box","text":"that of the United States with respect to such issues as growth of gross national product, reinvestment","page_number":131,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"e4496ab8-9fd7-4886-83b9-045d21e4ea1c","block_type":"box","text":"of capital, resources, and balance of payments position. Certain such economies may rely heavily on","page_number":131,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"e420ae0d-1f68-42cf-85b3-bf2ca44c94de","block_type":"box","text":"particular industries or foreign capital and are more vulnerable to diplomatic developments, the","page_number":131,"box":{"x":117,"y":707,"width":702,"height":12}},{"id":"fe3b2302-5f26-4a66-8f26-0f8a0b05f00a","block_type":"box","text":"imposition of economic sanctions against a particular country or countries, changes in international","page_number":131,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"513c2018-32ea-4c73-8bdd-95ab4e01dc18","block_type":"box","text":"trading patterns, trade barriers, and other protectionist or retaliatory measures.","page_number":131,"box":{"x":116,"y":738,"width":582,"height":12}},{"id":"26a35954-2546-402a-b72b-49ffdee884e4","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":131,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"35306631-a863-4d41-a06c-a1d26158be2b","block_type":"box","text":"Because foreign securities generally are denominated and pay","page_number":131,"box":{"x":382,"y":769,"width":464,"height":12}},{"id":"4ece06e5-fb2f-4cf8-a15a-ae9ec3dc59a2","block_type":"box","text":"dividends or interest in foreign currencies, the value of a Fund that invests in foreign securities as","page_number":131,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"56dec70d-e5ad-4771-854f-3aa6efdd01b7","block_type":"box","text":"measured in U.S. dollars will be affected favorably or unfavorably by changes in exchange rates.","page_number":131,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"266fb638-9856-41ad-be1d-31517539905c","block_type":"box","text":"Generally, when the U.S. dollar rises in value against a foreign currency, a security denominated in","page_number":131,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"b2eae12f-b0df-4504-9513-dbd39439cd03","block_type":"box","text":"that currency loses value because the currency is worth fewer U.S. dollars. Conversely, when the U.S.","page_number":131,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"31fe31f5-2b86-479d-b418-3e730604ce13","block_type":"box","text":"dollar decreases in value against a foreign currency, a security denominated in that currency gains","page_number":131,"box":{"x":116,"y":847,"width":737,"height":12}},{"id":"ff78fa57-21ab-4c5b-ab9c-9a1e51363a01","block_type":"box","text":"value because the currency is worth more U.S. dollars. This risk, generally known as “currency risk,”","page_number":131,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"c14c8149-976f-42da-a551-1a4957387997","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":131,"box":{"x":117,"y":878,"width":738,"height":12}},{"id":"e8d35c9c-0579-4335-86b2-0e4f15029de6","block_type":"box","text":"II-37","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"aa72f8d1-88b3-4d11-87fa-246ab6cac29d","block_type":"box","text":"NM1026U-6004408-131/267","page_number":131,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"743df19c-0f2d-463b-b31f-c867cf925be7","block_type":"box","text":"increase those returns. Currency exchange rates can also be affected unpredictably by intervention by","page_number":132,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"a86d4810-5cda-4d07-878f-70334232fd49","block_type":"box","text":"U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or","page_number":132,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"92b3d09f-b898-4901-ab87-9ef8463e54a0","block_type":"box","text":"political developments in the United States or abroad.","page_number":132,"box":{"x":117,"y":118,"width":402,"height":12}},{"id":"d1c73543-4108-4d35-bfe2-5c585ea82fe5","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards. Many foreign governments","page_number":132,"box":{"x":117,"y":149,"width":697,"height":12}},{"id":"d0b8a883-b629-408a-895c-9d725947615e","block_type":"box","text":"supervise and regulate stock exchanges, brokers and the sale of securities less than does the United","page_number":132,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"6a9c8b8d-2f76-4ab6-952b-d0d876c0c746","block_type":"box","text":"States. Some countries may not have laws to protect investors comparable to the U.S. securities laws.","page_number":132,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"cbdf3b6c-76ee-41d6-94b4-1c424e07bb88","block_type":"box","text":"For example, some foreign countries may have no laws or rules against insider trading. Insider trading","page_number":132,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"98a8bec9-e142-4b37-bc6b-9f039b16d697","block_type":"box","text":"occurs when a person buys or sells a company’s securities based on nonpublic information about that","page_number":132,"box":{"x":116,"y":211,"width":760,"height":12}},{"id":"9e6c7074-f6b7-4a54-9716-717dda296a72","block_type":"box","text":"company. Accounting standards in other countries are not necessarily the same as in the United","page_number":132,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"e5863b04-1d40-4d59-b7af-f29206db533d","block_type":"box","text":"States. If the accounting standards in another country do not require as much detail as U.S. accounting","page_number":132,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"f95f8195-97e3-4f51-b05e-3d325ae833c7","block_type":"box","text":"standards, it may be harder for Fund management to completely and accurately determine a","page_number":132,"box":{"x":116,"y":258,"width":691,"height":12}},{"id":"2c610259-e1b7-4786-a47c-84646ebed411","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past","page_number":132,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"5e2d12e0-4c2b-4c5c-9384-47d6336e6daa","block_type":"box","text":"imposed restrictions, through penalties and otherwise, on foreign investments by U.S. investors such","page_number":132,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"b28bb5fc-afe3-431c-9dff-af1b9e34ac31","block_type":"box","text":"as the Fund. If such restrictions should be reinstituted, it might become necessary for the Fund to","page_number":132,"box":{"x":116,"y":304,"width":727,"height":12}},{"id":"7371452c-b549-42f5-bb52-8b5b2bb8406b","block_type":"box","text":"invest all or substantially all of its assets in U.S. securities. Also, brokerage commissions and other","page_number":132,"box":{"x":117,"y":320,"width":737,"height":12}},{"id":"f9bd053e-bac4-4130-98f8-39b9fb2ff175","block_type":"box","text":"costs of buying or selling securities often are higher in foreign countries than they are in the United","page_number":132,"box":{"x":116,"y":335,"width":736,"height":12}},{"id":"dc7f2f92-9c8b-41ef-bcf7-41fb00771216","block_type":"box","text":"States. This reduces the amount the Fund can earn on its investments.","page_number":132,"box":{"x":116,"y":351,"width":532,"height":9}},{"id":"e7111094-f5c4-4ab2-95cd-363cae6216be","block_type":"box","text":"Certain Risks of Holding Fund Assets Outside the United States.","page_number":132,"box":{"x":117,"y":382,"width":477,"height":12}},{"id":"499cac8d-6742-4a49-bc67-df346076384d","block_type":"box","text":"A Fund generally holds its foreign","page_number":132,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"83ff5868-88be-455e-a17d-e48058608979","block_type":"box","text":"securities and cash in foreign banks and securities depositories. Some foreign banks and securities","page_number":132,"box":{"x":116,"y":397,"width":743,"height":12}},{"id":"be7341f5-fd36-48dc-89bf-87bdf5509e6a","block_type":"box","text":"depositories may be recently organized or new to the foreign custody business. In addition, there may","page_number":132,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"031962f5-aa87-4e60-9606-2f0eb72d48f7","block_type":"box","text":"be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put","page_number":132,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"afbc4c50-e83d-4033-9ab1-2585aac20ca1","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":132,"box":{"x":117,"y":444,"width":747,"height":12}},{"id":"9c88dac1-690c-411a-ac53-0f372a808ab7","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":132,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"a91b6997-7b77-4d53-94a5-d2f7f79bcc5c","block_type":"box","text":"hold securities in certain foreign markets than in the United States. The increased expense of investing","page_number":132,"box":{"x":117,"y":475,"width":768,"height":12}},{"id":"79d0abce-fb1c-4964-86da-190cefebd4e5","block_type":"box","text":"in foreign markets reduces the amount a Fund can earn on its investments and typically results in a","page_number":132,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"4e1e1023-a55b-4e10-a253-a7781be84975","block_type":"box","text":"higher operating expense ratio for the Fund as compared to investment companies that invest only in","page_number":132,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"deaafe5d-94c4-4654-8385-f1aa0f088189","block_type":"box","text":"the United States.","page_number":132,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"f37af23e-c34e-4e7d-9060-517d9efa556a","block_type":"box","text":"Publicly Available Information.","page_number":132,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"8a468023-4541-4b06-847d-2e52f16df45a","block_type":"box","text":"In general, less information is publicly available with respect to foreign","page_number":132,"box":{"x":340,"y":552,"width":529,"height":12}},{"id":"57f95e30-b7bd-47dc-923c-387752ad13de","block_type":"box","text":"issuers than is available with respect to U.S. companies. Most foreign companies are also not subject","page_number":132,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"c5a1908d-a126-4b0e-be05-6e687094b765","block_type":"box","text":"to the uniform accounting and financial reporting requirements applicable to issuers in the United","page_number":132,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"fb498866-47b3-46b8-b564-4d691ffa6dab","block_type":"box","text":"States. While the volume of transactions effected on foreign stock exchanges has increased in recent","page_number":132,"box":{"x":116,"y":599,"width":758,"height":12}},{"id":"6b9e6e29-df64-4afc-a9a9-457a6f51cac5","block_type":"box","text":"years, it remains appreciably below that of the New York Stock Exchange. Accordingly, a Fund’s","page_number":132,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"331e0ca3-4d46-42ba-b56d-51138ab78c2e","block_type":"box","text":"foreign investments may be less liquid than, and their prices may be more volatile than, comparable","page_number":132,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"ee49d8a2-2c69-4f72-b367-3387e6323f05","block_type":"box","text":"investments in securities in U.S. companies. In addition, there is generally less government supervision","page_number":132,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"5394ffd5-ccab-4e15-94de-5d1d08fe4eb0","block_type":"box","text":"and regulation of securities exchanges, brokers and issuers in foreign countries than in the United","page_number":132,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"1f1a7699-3b89-409d-90fb-0b1fbd7fd990","block_type":"box","text":"States.","page_number":132,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"098ddce1-76be-439e-9684-fe2a470ce53f","block_type":"box","text":"Settlement Risk.","page_number":132,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"a19a6da2-3a40-4822-a813-181c1322081b","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly","page_number":132,"box":{"x":244,"y":707,"width":606,"height":12}},{"id":"59fe2418-7048-453f-8706-b58e638eb8d4","block_type":"box","text":"from those in the United States. Supervisory authorities may also be unable to apply standards which","page_number":132,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"8dfb4f65-6124-420e-bb2a-779e7f8d2ee4","block_type":"box","text":"are comparable with those in the United States. Foreign settlement procedures and trade regulations","page_number":132,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"51136dc2-e924-4260-bf32-0ae1cf0a63ac","block_type":"box","text":"also may involve certain risks (such as delays in payment for or delivery of securities) not typically","page_number":132,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"3311c2d7-aa99-494a-bf0a-508cf09cf3f3","block_type":"box","text":"generated by the settlement of U.S. investments.","page_number":132,"box":{"x":116,"y":769,"width":362,"height":12}},{"id":"6977ec05-2e9c-41ee-a502-fadeb803264d","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable,","page_number":132,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"e9a33eab-646e-4af8-a6e0-012a7c2438cc","block_type":"box","text":"increasing the risk of delayed settlements or losses of security certificates in markets that still rely on","page_number":132,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"dd0708d3-41f4-448c-84ab-c62ca5691dfb","block_type":"box","text":"physical settlement. Settlements in certain foreign countries at times have not kept pace with the","page_number":132,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"a7c83b42-32dd-499a-8f94-e2da14d8042c","block_type":"box","text":"number of securities transactions; these problems may make it difficult for a Fund to carry out","page_number":132,"box":{"x":117,"y":847,"width":698,"height":12}},{"id":"b4bf0f6f-4f0a-4421-a809-87f87e7c2561","block_type":"box","text":"transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss","page_number":132,"box":{"x":116,"y":862,"width":723,"height":12}},{"id":"e4d36fad-fda9-4d0b-85ec-a568133cf4cb","block_type":"box","text":"attractive investment opportunities and certain of its assets may be uninvested with no return earned","page_number":132,"box":{"x":116,"y":878,"width":751,"height":12}},{"id":"52971375-a97b-4990-ae86-b0390c2757e6","block_type":"box","text":"II-38","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"45dc892a-c14c-46ce-b39c-a23c77fb5e11","block_type":"box","text":"NM1026U-6004408-132/267","page_number":132,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"499bd9ea-69f7-4ae1-964d-74d21a945f10","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":133,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"d4cad30e-e882-4bf3-9557-a92f1295a217","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":133,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"7cb2c3ea-8390-4c99-a52d-803bf8c506f0","block_type":"box","text":"party, the Fund could be liable to that party for any losses incurred.","page_number":133,"box":{"x":117,"y":118,"width":501,"height":12}},{"id":"4463ed22-96f9-4347-bbe3-31da889db4d0","block_type":"box","text":"Because of uncertainties in the operation of settlement systems in individual markets, competing","page_number":133,"box":{"x":117,"y":149,"width":720,"height":12}},{"id":"24242042-addb-4170-bc4e-751453ba1e91","block_type":"box","text":"claims may arise in respect of securities held by or to be transferred to a Fund. Compensation","page_number":133,"box":{"x":116,"y":165,"width":703,"height":12}},{"id":"55b0330d-1c1a-48ea-a6ae-16a29905f6b0","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":133,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"84a81a2d-df10-4bd9-8472-5f908d7d23b9","block_type":"box","text":"such event.","page_number":133,"box":{"x":116,"y":196,"width":90,"height":9}},{"id":"795b7772-01b4-4f19-bd07-8f091e8059f6","block_type":"box","text":"Sovereign Debt.","page_number":133,"box":{"x":117,"y":227,"width":115,"height":12}},{"id":"dd40a856-def8-4fc2-9610-6849878e14fe","block_type":"box","text":"Investment in sovereign debt can involv","page_number":133,"box":{"x":234,"y":227,"width":293,"height":12}},{"id":"2fb04e50-bcc3-4c59-9328-eacf3a0eea00","block_type":"box","text":"e a high degree of risk. The governmental entity","page_number":133,"box":{"x":527,"y":227,"width":353,"height":12}},{"id":"e86a5e7d-5014-4d15-b33c-966cfd12d174","block_type":"box","text":"that controls the repayment of sovereign debt ma","page_number":133,"box":{"x":116,"y":242,"width":357,"height":12}},{"id":"bf49bbd1-81f7-4245-b116-6e1c4e109303","block_type":"box","text":"y not be able or willing to repay the principal and/or","page_number":133,"box":{"x":474,"y":242,"width":375,"height":12}},{"id":"f2db9e6b-b8b5-4919-a1f5-15a86d31b5ac","block_type":"box","text":"interest when due in accordance with the terms of","page_number":133,"box":{"x":117,"y":258,"width":362,"height":9}},{"id":"d7d4ca66-5ac5-4e07-8734-8dd6ea603e0b","block_type":"box","text":"f such debt. A governmental entity’s willingness or","page_number":133,"box":{"x":478,"y":258,"width":364,"height":12}},{"id":"7df30f65-3f8f-4fe3-8a31-1108d57185dd","block_type":"box","text":"ability to repay principal and interest due in a timely","page_number":133,"box":{"x":116,"y":273,"width":372,"height":12}},{"id":"59ecb52e-e376-4748-ae31-613a19f3b9c7","block_type":"box","text":"y manner may be affected by, among other factors, its","page_number":133,"box":{"x":488,"y":273,"width":390,"height":12}},{"id":"d9641c44-11db-482a-91cf-bb3b0448c8ce","block_type":"box","text":"cash flow situation, the extent of its foreign rese","page_number":133,"box":{"x":116,"y":289,"width":346,"height":12}},{"id":"f7a460cd-13d4-406c-8b0b-4629c4a399e3","block_type":"box","text":"rves, the availability of sufficient foreign exchange on the","page_number":133,"box":{"x":463,"y":289,"width":415,"height":12}},{"id":"90afa80e-854b-4bf6-abb7-69e8b383838f","block_type":"box","text":"date a payment is due, the relative size of the","page_number":133,"box":{"x":116,"y":304,"width":335,"height":12}},{"id":"6c73006c-6f48-4857-86e7-caeaa100c2f9","block_type":"box","text":"debt service burden to the economy as a whole, the","page_number":133,"box":{"x":452,"y":304,"width":381,"height":12}},{"id":"da9515bb-4431-4591-abc8-6c08f5d80d77","block_type":"box","text":"governmental entity’s policy towards the Internati","page_number":133,"box":{"x":116,"y":320,"width":354,"height":12}},{"id":"4d313410-5241-4d48-a679-25f463751db3","block_type":"box","text":"onal Monetary Fund and the political constraints to","page_number":133,"box":{"x":472,"y":320,"width":372,"height":12}},{"id":"be789d7f-863f-48ce-9f7e-69503e514850","block_type":"box","text":"which a governmental entity may be subject. Gove","page_number":133,"box":{"x":116,"y":335,"width":367,"height":12}},{"id":"257fd787-2c85-4d60-ad4d-8c7508cdd8b9","block_type":"box","text":"rnmental entities may also be dependent on expected","page_number":133,"box":{"x":485,"y":335,"width":395,"height":12}},{"id":"81f5869d-5498-46f3-b6e4-e440c27eeb81","block_type":"box","text":"disbursements from foreign governments, multila","page_number":133,"box":{"x":116,"y":351,"width":355,"height":12}},{"id":"25df9653-0fa7-4a0d-afc2-abde0847ea08","block_type":"box","text":"teral agencies and others abroad to reduce principal","page_number":133,"box":{"x":472,"y":351,"width":384,"height":12}},{"id":"fdb23579-e68c-439b-8925-26420bccaabd","block_type":"box","text":"and interest arrearages on their debt. The commitment","page_number":133,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"305e4718-b7fa-4cd6-93af-1261810826f6","block_type":"box","text":"t on the part of these governments, agencies and","page_number":133,"box":{"x":514,"y":366,"width":358,"height":12}},{"id":"ea77eeed-7cef-4c84-961e-8fb795230dfe","block_type":"box","text":"others to make such disbursements may be condi","page_number":133,"box":{"x":116,"y":382,"width":362,"height":12}},{"id":"8d66715d-d0fe-4043-af27-130c33c14a9a","block_type":"box","text":"tioned on the implementation of economic reforms and/","page_number":133,"box":{"x":479,"y":382,"width":402,"height":12}},{"id":"2f17b3f6-5196-4b03-a67c-17750ce6b061","block_type":"box","text":"or economic performance and the timely service of such","page_number":133,"box":{"x":116,"y":397,"width":407,"height":12}},{"id":"252722e3-ab8d-40a6-9359-725300e7f4b7","block_type":"box","text":"debtor’s obligations. Failure to implement such","page_number":133,"box":{"x":524,"y":397,"width":349,"height":12}},{"id":"abe1d41c-f597-415b-829b-dd57a6cacb35","block_type":"box","text":"reforms, achieve such levels of economic performance","page_number":133,"box":{"x":117,"y":413,"width":402,"height":12}},{"id":"396c4b66-1e1f-4910-8857-990524f917b4","block_type":"box","text":"or repay principal or interest when due may result","page_number":133,"box":{"x":519,"y":413,"width":365,"height":12}},{"id":"a2e11708-5106-4053-a7c5-6c5825a99fb9","block_type":"box","text":"in the cancellation of such third parties’ commitments","page_number":133,"box":{"x":117,"y":428,"width":389,"height":12}},{"id":"0627687b-346b-46e1-971c-2d99a1665dbc","block_type":"box","text":"to lend funds to the governmental entity, which may","page_number":133,"box":{"x":506,"y":428,"width":380,"height":12}},{"id":"5ba355e2-d7e5-47e8-acc5-fee193bcdde0","block_type":"box","text":"further impair such debtor’s ability or willingness to t","page_number":133,"box":{"x":116,"y":444,"width":372,"height":12}},{"id":"f42ed7a2-5857-4b9c-a235-3d73179eb2ea","block_type":"box","text":"timely service its debts. Consequently, governmental","page_number":133,"box":{"x":487,"y":444,"width":389,"height":12}},{"id":"2ce93b5b-e442-426c-8100-8392e2833a88","block_type":"box","text":"entities may default on their sovereign debt.","page_number":133,"box":{"x":116,"y":459,"width":323,"height":12}},{"id":"f10d1f99-7803-4eee-8273-fd6d1bddc0d5","block_type":"box","text":"Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to","page_number":133,"box":{"x":117,"y":490,"width":730,"height":12}},{"id":"777e1fa4-c821-4cf4-924b-d4e42c3148c2","block_type":"box","text":"extend further loans to governmental entities. In the event of a default by a governmental entity, there","page_number":133,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"9ef45fd1-b1c3-41b8-bdb6-00ed48160868","block_type":"box","text":"may be few or no effective legal remedies for collecting on such debt.","page_number":133,"box":{"x":117,"y":521,"width":519,"height":12}},{"id":"4d262a3d-69ef-491b-a3db-3ae2e271c4cf","block_type":"box","text":"Withholding Tax Reclaims Risk","page_number":133,"box":{"x":118,"y":552,"width":226,"height":12}},{"id":"b5f95b17-7efe-4229-b43a-e9e8914d0092","block_type":"box","text":". A Fund may file claims to recover foreign withholding taxes on dividend","page_number":133,"box":{"x":344,"y":552,"width":530,"height":12}},{"id":"3174c93c-5b42-49a7-a04f-869292ca554a","block_type":"box","text":"and interest income (if any) received from issuers in","page_number":133,"box":{"x":116,"y":568,"width":381,"height":12}},{"id":"b21a06e0-1b41-47e9-b2c5-72961f48b16b","block_type":"box","text":"certain countries and capital gains on the disposition","page_number":133,"box":{"x":498,"y":568,"width":385,"height":12}},{"id":"e7a1c4e2-8179-41f5-8295-f655cdfc6c10","block_type":"box","text":"of stocks or securities where such withholding ta","page_number":133,"box":{"x":116,"y":583,"width":351,"height":12}},{"id":"5cf454c3-a47f-4f32-b6fe-4d890b891f0b","block_type":"box","text":"x reclaim is possible. Whether or when a Fund will","page_number":133,"box":{"x":468,"y":583,"width":369,"height":12}},{"id":"467fa766-0e24-47f6-809f-27d55c12e1d5","block_type":"box","text":"receive a withholding tax refund is within the control","page_number":133,"box":{"x":117,"y":599,"width":379,"height":12}},{"id":"9c2319bd-f08c-40ed-a77c-b310d4ace94f","block_type":"box","text":"of the tax authorities in such countries. Where a","page_number":133,"box":{"x":496,"y":599,"width":352,"height":9}},{"id":"078d466a-1854-4fbd-a04e-cf170d0b3d4a","block_type":"box","text":"Fund expects to recover withholding taxes, the net asset value of the Fund generally includes accruals","page_number":133,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"6b688b1f-401b-403d-9e05-f0ceeb47d242","block_type":"box","text":"for such tax refunds. Each Fund regularly evaluates","page_number":133,"box":{"x":116,"y":630,"width":375,"height":12}},{"id":"0f27f566-713a-4152-b5c1-b52c67341413","block_type":"box","text":"the probability of recovery. If the likelihood of","page_number":133,"box":{"x":492,"y":630,"width":334,"height":12}},{"id":"27820c4d-9a92-4299-86cc-81d9f0a76f58","block_type":"box","text":"recovery materially decreases, due to, for example,","page_number":133,"box":{"x":117,"y":645,"width":377,"height":12}},{"id":"489a3b3d-9bcb-44a8-9d54-4da5a6c939bc","block_type":"box","text":"a change in tax regulation or approach in the foreign","page_number":133,"box":{"x":494,"y":645,"width":385,"height":12}},{"id":"fa626ddf-8c81-4fb8-9b88-b9c553dfca17","block_type":"box","text":"country, accruals in a Fund’s net asset value for such","page_number":133,"box":{"x":116,"y":661,"width":387,"height":12}},{"id":"0e2ad70a-ecd3-4af6-a91b-ee37438af06e","block_type":"box","text":"refunds may be written down partially or in full,","page_number":133,"box":{"x":509,"y":661,"width":336,"height":12}},{"id":"c5fd31e7-be59-4c23-98eb-a8b2e0d7c011","block_type":"box","text":"which will adversely affect the Fund’s net asset value.","page_number":133,"box":{"x":116,"y":676,"width":389,"height":12}},{"id":"b0458e3d-b48e-427e-8050-c3fb432d519a","block_type":"box","text":"Shareholders in a Fund at the time an accrual is","page_number":133,"box":{"x":511,"y":676,"width":348,"height":10}},{"id":"67264b79-6a71-4753-a3e5-b59f4ef3e9c0","block_type":"box","text":"written down will bear the impact of t","page_number":133,"box":{"x":116,"y":692,"width":265,"height":12}},{"id":"40cea9dd-ac70-451c-9e14-6aa0835ee07b","block_type":"box","text":"he resulting reduction in net asset","page_number":133,"box":{"x":382,"y":692,"width":244,"height":12}},{"id":"27c26972-0f8c-41aa-8b1e-cf36cb16acf7","block_type":"box","text":"value regardless of whether they","page_number":133,"box":{"x":631,"y":692,"width":238,"height":12}},{"id":"336ec682-b6ac-4d43-8237-c9295b5ee05d","block_type":"box","text":"were shareholders during the accrual period. Converse","page_number":133,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"52344e64-066c-4fda-a075-f6646a073933","block_type":"box","text":"ly, if a Fund receives a tax refund that has not","page_number":133,"box":{"x":518,"y":707,"width":331,"height":12}},{"id":"c7d2fd17-666a-4f01-8197-ef70455ab475","block_type":"box","text":"been previously accrued, shareholders in the Fund at t","page_number":133,"box":{"x":117,"y":723,"width":396,"height":12}},{"id":"dc1a49cc-dbb1-46da-a54c-0e829481ae85","block_type":"box","text":"he time of the successful recovery will benefit from","page_number":133,"box":{"x":514,"y":723,"width":365,"height":12}},{"id":"b2f7c109-315e-476a-ba56-788c74c4b396","block_type":"box","text":"the resulting increase in the Fund’s net asset value.","page_number":133,"box":{"x":116,"y":738,"width":373,"height":12}},{"id":"3ba7351e-1fac-4f2d-9095-03be8b8238ea","block_type":"box","text":"Shareholders who sold their shares prior to such","page_number":133,"box":{"x":496,"y":738,"width":351,"height":12}},{"id":"e75c6ded-5406-42d3-bb55-8297234345c1","block_type":"box","text":"time will not benefit from such increase in the Fund’s net asset value.","page_number":133,"box":{"x":116,"y":754,"width":500,"height":9}},{"id":"68b18e91-aa78-4431-b796-ac882fdb4758","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":133,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"3a5a87cb-751c-468b-8da4-683cb10bfd0e","block_type":"box","text":"The United States is a significant, and in some cases the most","page_number":133,"box":{"x":404,"y":785,"width":464,"height":12}},{"id":"3fa6e9d1-d796-4b87-ba25-5e74db07288a","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. As a","page_number":133,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"122a7833-d2cc-4f98-9565-32cb58e74ec2","block_type":"box","text":"result, economic conditions of such countries may be particularly affected by changes in the U.S.","page_number":133,"box":{"x":117,"y":816,"width":717,"height":12}},{"id":"b3fc8a02-8583-426f-9924-475a82f1677d","block_type":"box","text":"economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs, changes","page_number":133,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"06f9ef19-3d1f-42d4-9469-19dda5f1553b","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":133,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"5cd3b4df-66b9-43dd-be5b-64ea607cab96","block_type":"box","text":"adverse effect on a country’s economic conditions and, as a result, securities to which the Fund has","page_number":133,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"cccbf92a-2cb3-4a18-88bb-9dabc70b103e","block_type":"box","text":"exposure. Circumstances could arise that could prevent the timely payment of interest or principal on","page_number":133,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"a4a7b13d-e43e-4cb2-814f-46aa03ce3ce0","block_type":"box","text":"II-39","page_number":133,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f7644c2a-17a1-4d0b-8d0b-c08d66e10ab0","block_type":"box","text":"NM1026U-6004408-133/267","page_number":133,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a7478b67-1ae2-403b-91a8-e0e0ff3e2e10","block_type":"box","text":"U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result","page_number":134,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"8fc28dbe-8cef-4aa8-828a-dd34e04801d3","block_type":"box","text":"in substantial negative consequences for the U.S. economy and the global financial system.","page_number":134,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"a9701ead-4061-46b9-8be9-a5df946fbc33","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including","page_number":134,"box":{"x":116,"y":135,"width":745,"height":12}},{"id":"ff607892-4a2f-41b9-ad67-26f2c48a1b34","block_type":"box","text":"traditional allies, such as certain European countries, and historical adversaries, such as North Korea,","page_number":134,"box":{"x":116,"y":151,"width":761,"height":11}},{"id":"7c6cba45-5e9b-469e-8002-93f70a699c93","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":134,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"44ac7082-6539-4b69-9f18-cbefbb1e9640","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":134,"box":{"x":116,"y":181,"width":748,"height":12}},{"id":"ac86cb6c-f457-4afd-83c7-061aba18569d","block_type":"box","text":"increased internal unrest and discord. If these trends were to continue, it may have an adverse impact","page_number":134,"box":{"x":117,"y":197,"width":761,"height":12}},{"id":"8522ef12-9f13-4583-8170-f196b8a477e8","block_type":"box","text":"on the U.S. economy and many of the issuers in which a Fund may invest.","page_number":134,"box":{"x":116,"y":212,"width":557,"height":12}},{"id":"811fce95-5416-4d31-8f84-625ead98ef9d","block_type":"box","text":"Funding Agreements.","page_number":134,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"0b8da685-6364-4d07-89b9-8f90c4518797","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar","page_number":134,"box":{"x":289,"y":245,"width":561,"height":12}},{"id":"22762efd-cc1e-42d7-9f7d-0e32b3519dd6","block_type":"box","text":"funding agreements. In connection with these investments, a Fund makes cash contributions to a","page_number":134,"box":{"x":116,"y":260,"width":727,"height":12}},{"id":"0b4dcda8-6f21-40fe-af4c-a19162e45a6d","block_type":"box","text":"deposit fund of an insurance company’s general account. The insurance company then credits to the","page_number":134,"box":{"x":116,"y":276,"width":753,"height":12}},{"id":"50c6de90-5257-4124-9f46-098ccb7f2572","block_type":"box","text":"Fund on a monthly basis guaranteed interest, which is based on an index. The funding agreements","page_number":134,"box":{"x":117,"y":291,"width":740,"height":12}},{"id":"13b0362a-247d-4d43-b87b-22babccbf79b","block_type":"box","text":"provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price","page_number":134,"box":{"x":117,"y":307,"width":753,"height":12}},{"id":"ff1830a9-e616-4156-9f52-bd0cb9f5d3a5","block_type":"box","text":"paid for a funding agreement becomes part of the general assets of the insurance company, and the","page_number":134,"box":{"x":117,"y":322,"width":749,"height":12}},{"id":"fe21c4df-6138-4fcf-8751-e8a2ab3aa38e","block_type":"box","text":"contract is paid from the general assets of the insurance company. Generally, funding agreements are","page_number":134,"box":{"x":116,"y":338,"width":764,"height":12}},{"id":"88946586-8f57-4bbf-8d26-348561e7383a","block_type":"box","text":"not assignable or transferable without the permission of the issuing insurance companies, and an","page_number":134,"box":{"x":117,"y":353,"width":726,"height":12}},{"id":"6f2b9306-55ba-476e-ba03-2ddb752a857b","block_type":"box","text":"active secondary market in some funding agreements does not currently exist.","page_number":134,"box":{"x":116,"y":369,"width":586,"height":12}},{"id":"ce7ba7ee-18e7-418c-9d6b-0f379d6608f9","block_type":"box","text":"Guarantees","page_number":134,"box":{"x":117,"y":401,"width":91,"height":10}},{"id":"07d5e8a9-91ae-4300-8a48-dc3d6e51d7c9","block_type":"box","text":".","page_number":134,"box":{"x":209,"y":409,"width":3,"height":2}},{"id":"8031e5ac-919d-4cc8-a9f3-602b14f8a0ab","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate","page_number":134,"box":{"x":213,"y":401,"width":660,"height":12}},{"id":"187434ac-4aa6-48bd-a964-6bb292d1b110","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":134,"box":{"x":116,"y":417,"width":771,"height":12}},{"id":"f75ca97c-6834-4e6d-9007-8b851b67192a","block_type":"box","text":"fulfill an issuer’s payment obligations under a security if the issuer is unable to do so.","page_number":134,"box":{"x":116,"y":432,"width":634,"height":12}},{"id":"ba83ff7b-d24c-4364-b9d4-013f3dfdb291","block_type":"box","text":"Illiquid Investments.","page_number":134,"box":{"x":116,"y":465,"width":160,"height":11}},{"id":"5aa6df51-81a5-4fcd-86ec-e7c65d462043","block_type":"box","text":"Each Fund may not acquire any illiquid investment if, immediately after the","page_number":134,"box":{"x":278,"y":465,"width":563,"height":12}},{"id":"fa1bc56f-b0d0-4b30-9b9f-ab6f891eb388","block_type":"box","text":"acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An","page_number":134,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"70b11cc2-584a-4501-9cb1-bb3c5812ac76","block_type":"box","text":"illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in","page_number":134,"box":{"x":117,"y":496,"width":753,"height":12}},{"id":"22844c3b-e48c-4d92-b62a-b91eac008df8","block_type":"box","text":"current market conditions in seven calendar days or less without the sale or disposition significantly","page_number":134,"box":{"x":116,"y":511,"width":742,"height":12}},{"id":"99a24dfd-7dfa-4f43-aa82-85dee3482319","block_type":"box","text":"changing the market value of the investment. Liquid investments may become illiquid after purchase by","page_number":134,"box":{"x":116,"y":527,"width":771,"height":12}},{"id":"888f0538-f0d1-4165-9d6b-61b42d45feab","block_type":"box","text":"a Fund, particularly during periods of market turmoil. There can be no assurance that a security or","page_number":134,"box":{"x":116,"y":542,"width":733,"height":12}},{"id":"61dfc2ca-c46b-4645-8e5f-1ce00c3df3fd","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":134,"box":{"x":117,"y":558,"width":766,"height":12}},{"id":"c8060338-c36b-48b1-8cfb-34cf8cfce2cc","block_type":"box","text":"by a Fund, and any security or instrument held by the Fund may be deemed an illiquid investment","page_number":134,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"0077cabf-1a2e-4e17-ae19-dfdcc786eecd","block_type":"box","text":"pursuant to the Fund’s liquidity risk management program. A Fund’s illiquid investments may reduce","page_number":134,"box":{"x":117,"y":589,"width":747,"height":12}},{"id":"1b456876-f743-4a92-910d-881930d6a009","block_type":"box","text":"the returns of the Fund because it may be difficult to sell the illiquid investments at an advantageous","page_number":134,"box":{"x":116,"y":604,"width":748,"height":12}},{"id":"5f2bf367-ad9f-44c3-93cc-2b1aa7b2c27e","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":134,"box":{"x":116,"y":620,"width":713,"height":12}},{"id":"327bc849-019f-4fec-8fa4-701a2b7d6dc9","block_type":"box","text":"periods when shareholders are redeeming or selling their shares or the Fund’s net assets otherwise","page_number":134,"box":{"x":117,"y":635,"width":744,"height":12}},{"id":"eb4f95ba-f6cb-4ed5-ba08-4c7c5d3822eb","block_type":"box","text":"shrink, the Fund will need to dispose of liquid securities to meet redemption requests and illiquid","page_number":134,"box":{"x":116,"y":651,"width":718,"height":12}},{"id":"8e2705ac-814a-4c96-b60a-2d1807e42db2","block_type":"box","text":"securities will become a larger portion of the Fund’s holdings. If illiquid investments exceed 15% of a","page_number":134,"box":{"x":116,"y":666,"width":745,"height":12}},{"id":"b025c0f3-3cef-492f-bfc4-40f847230a0e","block_type":"box","text":"Fund’s net assets, the Liquidity Rule (as defined below) and the Liquidity Program (as defined below)","page_number":134,"box":{"x":117,"y":682,"width":749,"height":12}},{"id":"5f5587b9-9ddb-457f-b599-cb5eaf960487","block_type":"box","text":"will require that certain remedial actions be taken. Illiquid investments may trade at a discount from","page_number":134,"box":{"x":116,"y":697,"width":733,"height":12}},{"id":"31954dad-b34d-45d3-984c-9be22e7e08a7","block_type":"box","text":"comparable liquid investments. Investment of a Fund’s assets in illiquid investments may restrict the","page_number":134,"box":{"x":116,"y":713,"width":742,"height":12}},{"id":"127900b1-778b-45c7-a451-b9e297501cfd","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":134,"box":{"x":116,"y":728,"width":728,"height":12}},{"id":"78c8cb3f-80d5-4464-b55a-53852b55230e","block_type":"box","text":"ability to take advantage of market opportunities. The risks associated with illiquidity will be particularly","page_number":134,"box":{"x":116,"y":744,"width":760,"height":12}},{"id":"8d41a359-c65b-4762-90c5-6b510f361584","block_type":"box","text":"acute where a Fund’s operations require cash, such as when the Fund redeems shares or pays","page_number":134,"box":{"x":116,"y":759,"width":709,"height":12}},{"id":"84496891-a7b9-4d45-aa15-d5bc3c823f83","block_type":"box","text":"dividends, and could result in the Fund borrowing to meet short-term cash requirements or incurring","page_number":134,"box":{"x":116,"y":775,"width":740,"height":12}},{"id":"7e7bca1f-3d24-4c3a-8f33-ce5a453cd310","block_type":"box","text":"capital losses on the sale of illiquid investments.","page_number":134,"box":{"x":116,"y":790,"width":355,"height":12}},{"id":"74cc45cb-c666-473e-81fe-8334904603eb","block_type":"box","text":"Index Funds.","page_number":134,"box":{"x":116,"y":823,"width":102,"height":9}},{"id":"468e0c65-250d-4d68-9b23-d5abedf69e92","block_type":"box","text":"Cash Flows; Expenses.","page_number":134,"box":{"x":117,"y":846,"width":173,"height":12}},{"id":"8a0f7add-1a71-4342-8dc7-72b84a624278","block_type":"box","text":"The ability of each Fund to satisfy its investment objective depends to some","page_number":134,"box":{"x":291,"y":846,"width":573,"height":12}},{"id":"8ad3f90a-fb82-40a8-9324-8fcadc15dc8a","block_type":"box","text":"extent on the Manager’s ability to manage cash flow (primarily from purchases and redemptions and","page_number":134,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"2885295b-2649-44e1-9045-ca6068793e2b","block_type":"box","text":"distributions from the Fund’s investments). The Manager will make investment changes to a Fund’s","page_number":134,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"aad3fbfe-9322-4596-a62d-e96bc9b948de","block_type":"box","text":"II-40","page_number":134,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3104112f-f3b9-488c-9268-be9fb8f8a397","block_type":"box","text":"NM1026U-6004408-134/267","page_number":134,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7706eee6-5cfa-4136-bc11-c1d40e91f55d","block_type":"box","text":"portfolio to accommodate cash flow while continuing to seek to replicate the total return of the Fund’s","page_number":135,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"6c131ca7-7d1b-4e01-be66-4f1876ae0ec3","block_type":"box","text":"target index. Investors should also be aware that the investment performance of each index is a","page_number":135,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"a4619c64-39f6-4774-9343-af4a100bc233","block_type":"box","text":"hypothetical number which does not take into account brokerage commissions and other transaction","page_number":135,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"60d4fa90-e2a6-4e24-9208-338b7e7a4996","block_type":"box","text":"costs, custody and other costs of investing, and any incremental operating costs (e.g., transfer agency","page_number":135,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"62ef13fe-e229-4a1f-b9c8-b46f20c7ea62","block_type":"box","text":"and accounting costs) that will be borne by the Funds. Finally, since each Fund seeks to replicate the","page_number":135,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"6b81b70b-b6ae-49ac-a7b8-5f4a88f21451","block_type":"box","text":"total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":135,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"9ddbbedc-33cb-4f82-bf05-bd07cab4b7ca","block_type":"box","text":"particular security as an investment.","page_number":135,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"9c3486df-5bfc-4fd2-9614-e08f2e14c343","block_type":"box","text":"Tracking Error Risk","page_number":135,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"ca2a3cda-dacb-4107-8de3-dd34545a3670","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s","page_number":135,"box":{"x":261,"y":211,"width":594,"height":12}},{"id":"0a0135fd-6168-4ca1-ba19-ecfe34d5b141","block_type":"box","text":"performance from that of the Underlying Index. Tracking error may occur because of differences","page_number":135,"box":{"x":117,"y":227,"width":718,"height":12}},{"id":"ff3df85f-6373-41ff-82b6-6514e4ffb534","block_type":"box","text":"between the securities and other instruments held in the Fund’s portfolio and those included in the","page_number":135,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"64d8ae9a-9943-411b-953f-e4ba0fc3cae5","block_type":"box","text":"Underlying Index, pricing differences (including, as applicable, differences between a security’s price at","page_number":135,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"86d1df52-b369-4cbb-8480-b86f80d462fe","block_type":"box","text":"the local market close and the Fund’s valuation of a security at the time of calculation of the Fund’s net","page_number":135,"box":{"x":116,"y":273,"width":767,"height":12}},{"id":"14845cdb-b742-4a62-bae1-94b8c98eac64","block_type":"box","text":"asset value), differences in transaction costs incurred by the Fund, the Fund’s holding of uninvested","page_number":135,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"81e7f2b8-08a4-4a09-aca3-1d9d29f132dd","block_type":"box","text":"cash, differences in timing of the accrual of or the valuation of dividends or other distributions, interest,","page_number":135,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"d2511b5e-95c9-4e01-bd6c-30e2a8585e86","block_type":"box","text":"the requirements to maintain pass-through tax treatment, portfolio transactions carried out to minimize","page_number":135,"box":{"x":116,"y":320,"width":763,"height":12}},{"id":"366be412-a4ac-4819-a6fd-bf55d4cdde32","block_type":"box","text":"the distribution of capital gains to shareholders, changes to the Underlying Index or the costs to the","page_number":135,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"166dc59b-2eac-4fba-bd2c-0fb6d213063e","block_type":"box","text":"Fund of complying with various new or existing regulatory requirements. These risks may be","page_number":135,"box":{"x":117,"y":351,"width":689,"height":12}},{"id":"83743e6e-7baa-4480-9370-a8270076eac5","block_type":"box","text":"heightened during times of increased market volatility or other unusual market conditions. In addition,","page_number":135,"box":{"x":117,"y":366,"width":755,"height":12}},{"id":"9cbf2fdd-8a05-4953-bf1a-c55d7e6f8c2d","block_type":"box","text":"tracking error may result because the Fund incurs fees and expenses, while the Underlying Index does","page_number":135,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"9033ba10-fcd6-44cb-bae0-a0e5e75dbb8f","block_type":"box","text":"not.","page_number":135,"box":{"x":117,"y":397,"width":31,"height":10}},{"id":"a2d53120-b680-4b28-80cf-46fcff48a7a2","block_type":"box","text":"When an issuer is introduced by an index provider into an index tracked by a Fund, the Manager may","page_number":135,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"beb105eb-7f52-4276-bb4f-2cdfb1cb0580","block_type":"box","text":"conduct an analysis on such issuer’s securities to identify and screen for outlier high risk behavior","page_number":135,"box":{"x":116,"y":444,"width":729,"height":12}},{"id":"8ed346de-4d3e-4dc4-8a00-284ced5b762f","block_type":"box","text":"(such as rapid or unusual price growth that does not appear to be supported by publicly available","page_number":135,"box":{"x":117,"y":459,"width":724,"height":12}},{"id":"20f1ffe8-3ff0-48f8-8b9b-bd18731eba23","block_type":"box","text":"information on the business and assets of the issuer, unusual or significant short interest or lending","page_number":135,"box":{"x":117,"y":475,"width":740,"height":12}},{"id":"3c95b05f-90d4-456e-86af-f6720b3239be","block_type":"box","text":"activity, negative sentiment, suspended trading or incorrect free-float calculations, which could be","page_number":135,"box":{"x":116,"y":490,"width":728,"height":12}},{"id":"23d9fffa-4640-4613-9258-16c66de25bfc","block_type":"box","text":"indicators of possible irregularities, miscalculations or even fraud). 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FTSE has no obligation to take the needs of any particular Fund or its","page_number":137,"box":{"x":116,"y":366,"width":694,"height":12}},{"id":"fc1a7378-f7e8-43ef-aede-670d1ed7f816","block_type":"box","text":"participants or any other product or person into consideration in determining, composing or calculating","page_number":137,"box":{"x":117,"y":382,"width":762,"height":12}},{"id":"56a20eb0-eddb-4519-8c08-a5d406e1daaa","block_type":"box","text":"the FTSE Index.","page_number":137,"box":{"x":116,"y":397,"width":126,"height":10}},{"id":"d9025965-0a3c-4322-81d5-bff63ff60bfa","block_type":"box","text":"Bloomberg Indexes.","page_number":137,"box":{"x":116,"y":428,"width":148,"height":12}},{"id":"6ec9971e-b9b2-41a5-b5cc-9e7e41c4bb27","block_type":"box","text":"No Fund is promoted, sponsored or endorsed by, nor in any way affiliated with","page_number":137,"box":{"x":265,"y":428,"width":592,"height":12}},{"id":"99597930-fa35-43f9-a289-ced96bf7a4ca","block_type":"box","text":"Bloomberg Finance L.P. and its affiliates (collectively, “Bloomberg”). Bloomberg is not responsible for","page_number":137,"box":{"x":117,"y":444,"width":754,"height":12}},{"id":"ec9dbaee-8bbb-40d9-a509-a9a513e35184","block_type":"box","text":"nor has it reviewed any Fund nor any associated literature or publications, and Bloomberg makes no","page_number":137,"box":{"x":117,"y":459,"width":750,"height":12}},{"id":"ff047f77-50ea-4f75-a257-4f6a5b7d2c72","block_type":"box","text":"representation or warranty, express or implied, as to their accuracy, or completeness, or otherwise.","page_number":137,"box":{"x":117,"y":475,"width":740,"height":12}},{"id":"01405f71-71a6-4a6f-bc05-8f2038896e69","block_type":"box","text":"Bloomberg reserves the right, at any time and without notice, to alter, amend, terminate or in any way","page_number":137,"box":{"x":117,"y":506,"width":757,"height":12}},{"id":"59e95d6d-91b7-4914-a164-7c6037cf9e20","block_type":"box","text":"change a Bloomberg Index. 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ICE has no obligation to take the needs of any particular Fund or its participants or","page_number":137,"box":{"x":116,"y":707,"width":761,"height":12}},{"id":"544ef451-89f2-4ed1-b241-e8d71b440fee","block_type":"box","text":"any other product or person into consideration in determining, composing or calculating an ICE BofA","page_number":137,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"41a95c0f-b17e-4d0a-a6e7-d66c8c78c002","block_type":"box","text":"Index.","page_number":137,"box":{"x":117,"y":738,"width":43,"height":10}},{"id":"352a70df-3b6c-49f8-a9a4-c5cae0755e63","block_type":"box","text":"Indexed and Inverse Securities.","page_number":137,"box":{"x":116,"y":769,"width":250,"height":10}},{"id":"251a3e55-b3e2-4b2d-8103-72697ff8bda3","block_type":"box","text":"A Fund may invest in securities that provide a potential return based","page_number":137,"box":{"x":372,"y":769,"width":506,"height":12}},{"id":"ae0eecca-ebfc-4503-b51b-4a9f1c1507d4","block_type":"box","text":"on a particular index of value or interest rates. 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As a result, the market","page_number":138,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"4ad9eb4a-c407-4a44-b730-db7cdc9c9282","block_type":"box","text":"values of such securities will generally be more volatile than the market values of fixed-rate securities.","page_number":138,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"d25859c3-e564-4bce-954c-efc6eaa7525d","block_type":"box","text":"To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that","page_number":138,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"5aec98b7-a7a3-4fe2-833d-0bc89045b4a5","block_type":"box","text":"have shorter-term maturities or that contain limitations on the extent to which the interest rate may","page_number":138,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"e58b4b6f-08da-49e3-ac55-b2ae0b0a8a12","block_type":"box","text":"vary. Certain investments in such obligations may be illiquid. 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Inverse floaters are securities the potential of which is inversely related","page_number":138,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"10cbbfab-5633-410c-b7f6-a896e9e76a5c","block_type":"box","text":"to changes in interest rates. In general, the return on inverse floaters will decrease when short-term","page_number":138,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"4d113f62-be7b-4af1-8b65-cbf1bee1f56c","block_type":"box","text":"interest rates increase and increase when short-term rates decrease. Municipal tender option bonds,","page_number":138,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"307807dc-ecc8-4bf7-9edf-0e59a262485b","block_type":"box","text":"both taxable and tax-exempt, which may include inverse floating rate debt instruments, (including","page_number":138,"box":{"x":117,"y":459,"width":725,"height":12}},{"id":"4ac64d7f-c12e-4a78-a243-71cfad5be81b","block_type":"box","text":"residual interests thereon) are excluded from this 10% limitation.","page_number":138,"box":{"x":117,"y":475,"width":483,"height":12}},{"id":"459acc18-0716-44c7-ad77-cfe261500efd","block_type":"box","text":"Inflation Risk.","page_number":138,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"e0d3ce8d-5088-4da8-8f1e-45134ff10483","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":138,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"d63f16d2-c5ae-48c2-b8fa-6dd3bb9aab13","block_type":"box","text":"of potential factors, including, among others, unexpected economic shifts or changes in fiscal or","page_number":138,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"41cfe6ff-a849-48dd-b2ad-1b582289df70","block_type":"box","text":"monetary policies.","page_number":138,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"4fc066d2-3e0f-4dae-b002-202144713a3f","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":138,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"acc7ef4c-9835-426a-986f-67ce5124fcf2","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued","page_number":138,"box":{"x":392,"y":614,"width":462,"height":12}},{"id":"de0c22e8-1f5b-4868-a8fb-56bd30a9668e","block_type":"box","text":"stocks trade in the secondary market are affected by the performance of the stock market overall. If","page_number":138,"box":{"x":116,"y":630,"width":743,"height":12}},{"id":"77702ffe-4830-44bf-85d4-53a720e71dc7","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":138,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"b652ab88-d928-4fd4-8989-22fac537fcb8","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":138,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"a0b58c46-565c-4c42-8162-100863bd9842","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":138,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"ec1e620f-e03f-476c-9ddb-4cdfccf91534","block_type":"box","text":"to greater and more unpredictable price changes than more established stocks. IPOs have the","page_number":138,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"ae0c9f9b-32bc-4fc3-8e38-17c7f9ff7832","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":138,"box":{"x":117,"y":707,"width":751,"height":12}},{"id":"31ce7955-8715-4c17-9f72-120290c912ec","block_type":"box","text":"time given possible price volatility. This may result in increased portfolio turnover and expenses, such","page_number":138,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"35015ef8-96ff-4f32-9984-1322d897bb99","block_type":"box","text":"as commissions and transaction costs, and potentially result in taxable gains that the Fund will","page_number":138,"box":{"x":116,"y":738,"width":699,"height":12}},{"id":"4ac10ab2-5deb-452d-af37-77a1fe015245","block_type":"box","text":"subsequently distribute to shareholders. There is no assurance that any Fund will have access to","page_number":138,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"ef44dd38-5f0d-48a7-94de-94a89ff6b08a","block_type":"box","text":"profitable IPOs and therefore investors should not rely on any past gains from IPOs as an indication of","page_number":138,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"efc5b77d-e02f-4677-be1d-226a90f2e6a7","block_type":"box","text":"future performance. The investment performance of a Fund during periods when it is unable to invest","page_number":138,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"3f0d9283-01f1-4a2e-addb-da96ade03540","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":138,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"4417b833-7203-4a10-b4ac-3fec05223593","block_type":"box","text":"Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":138,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"b899688e-9040-40f3-9156-9b4aacdf656b","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market","page_number":138,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"3ff69cfe-8491-4515-8b8a-b7a7eeb7b902","block_type":"box","text":"capitalizations. Securities issued in IPOs have no trading history, and information about the companies","page_number":138,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"955c8daf-580b-4944-9e5e-87df73eb1595","block_type":"box","text":"may be available for very limited periods.","page_number":138,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"6b4f5da2-ac11-404d-8767-0332bb405b91","block_type":"box","text":"II-44","page_number":138,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8fe5bc7a-e8da-4be4-8f0c-68204f6a3b5d","block_type":"box","text":"NM1026U-6004408-138/267","page_number":138,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"22dc40e2-7f77-4d04-a9e8-3f282bf034fa","block_type":"box","text":"Investment in Emerging Markets.","page_number":139,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"58ec41d4-ae92-4121-91b2-39a242b71705","block_type":"box","text":"General.","page_number":139,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"2b4a6d3a-b589-47f6-82da-cd5493c89b6d","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging","page_number":139,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"7175ce70-7d51-4b4a-8e07-a98b1f266aaa","block_type":"box","text":"capital markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital","page_number":139,"box":{"x":116,"y":149,"width":765,"height":12}},{"id":"1f04fd0d-198b-4db5-91b4-a3325c1425ad","block_type":"box","text":"market is any country that is (i) generally recognized to be an emerging market country by the","page_number":139,"box":{"x":117,"y":165,"width":700,"height":12}},{"id":"ea084faa-1813-42ba-87cf-6d69273772ad","block_type":"box","text":"international financial community, such as the International Finance Corporation, or","page_number":139,"box":{"x":117,"y":180,"width":617,"height":12}},{"id":"efdb47b5-3e3c-4b60-bc3f-7da5ecbb329b","block_type":"box","text":"determined by the","page_number":139,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"c1ce8bb1-edca-40f0-b9fb-29462bcc676e","block_type":"box","text":"World Bank to have a low, middle or middle upper income economy; (ii) classified by the United","page_number":139,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"a9582a7b-7875-4d32-9653-43629f89d8f4","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":139,"box":{"x":117,"y":211,"width":762,"height":12}},{"id":"73bfec34-3a52-40ad-877a-170f0775258f","block_type":"box","text":"representative of emerging markets. Countries with emerging markets can be found in regions such as","page_number":139,"box":{"x":117,"y":227,"width":766,"height":12}},{"id":"b9271993-5c01-43e9-81c3-1a0e2d241fa1","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":139,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"4cf92859-03d3-4e28-96ed-99bd4bae0d81","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve","page_number":139,"box":{"x":117,"y":273,"width":743,"height":12}},{"id":"fcaab0b7-b679-417e-a33c-672873f0300f","block_type":"box","text":"certain additional risks that do not generally apply to investments in securities of issuers in more","page_number":139,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"25ddb839-e266-46d7-859c-af761168bb08","block_type":"box","text":"developed capital markets, such as (i) low or non-existent trading volume, resulting in market illiquidity","page_number":139,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"d0ec75fa-a802-4ac7-9b7d-daad5a240b4f","block_type":"box","text":"and increased volatility in prices for such securities, as compared to securities of comparable issuers in","page_number":139,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"a9a81110-a748-430a-a965-ff67039b85da","block_type":"box","text":"more developed capital markets; (ii) uncertain national policies and social, political and economic","page_number":139,"box":{"x":117,"y":335,"width":723,"height":12}},{"id":"01ceb72d-b5be-40d1-afa8-09eaf0fd1759","block_type":"box","text":"instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of","page_number":139,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"3dba46c6-0bac-45a4-b7d2-9bb5fffa8922","block_type":"box","text":"inflation or unfavorable diplomatic developments; (iii) possible fluctuations in exchange rates, differing","page_number":139,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"d0382265-ae65-4366-af45-6f9650e1520f","block_type":"box","text":"legal systems and the existence or possible imposition of exchange controls, custodial restrictions or","page_number":139,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"d8a7a452-6e6e-484f-be1a-ea528258dee2","block_type":"box","text":"other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":139,"box":{"x":116,"y":397,"width":741,"height":12}},{"id":"cdfbedd9-0500-437c-a6a5-cc16da7d2f93","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers","page_number":139,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"6f00ad62-94d3-46f1-8ebd-4a433bb8a3b7","block_type":"box","text":"or industries deemed sensitive to national interests; and (v) the lack or relatively early development of","page_number":139,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"2b1041de-36ba-4cbd-a645-6afa8fec0bab","block_type":"box","text":"legal structures governing private and foreign investments and private property. In addition to","page_number":139,"box":{"x":117,"y":444,"width":695,"height":12}},{"id":"46f7e275-1874-4302-9556-c5ee5ecc202c","block_type":"box","text":"withholding taxes on investment income, some countries with emerging markets may impose","page_number":139,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"9e38f7c3-473c-464d-9a1d-fde285b4a8bb","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":139,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"04a57931-37e0-412d-bb17-abe67b103ac1","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":139,"box":{"x":117,"y":506,"width":699,"height":12}},{"id":"2f70f4c3-371a-4955-979c-ba3f127dee25","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":139,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"61789856-09bd-4012-a65d-e4afcdd106c1","block_type":"box","text":"stability characteristic of more developed countries. In such a dynamic environment, there can be no","page_number":139,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"95712c7a-dee7-4346-aed0-c425416eff62","block_type":"box","text":"assurance that any or all of these capital markets will continue to present viable investment","page_number":139,"box":{"x":116,"y":552,"width":681,"height":12}},{"id":"f9ab558e-606d-4278-8bd3-6328c8f12aa4","block_type":"box","text":"opportunities for a Fund. In the past, governments of such nations have expropriated substantial","page_number":139,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"84c3cc36-67d9-4094-850e-d6a51e620201","block_type":"box","text":"amounts of private property, and most claims of the property owners have never been fully settled.","page_number":139,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"9e67cabe-348c-4660-96ed-5d5481b50b47","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":139,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"90ba71e9-660f-4673-8264-3703d0adbb57","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks","page_number":139,"box":{"x":117,"y":614,"width":700,"height":10}},{"id":"4f85f11f-b86a-4463-8084-f5f2049daf0b","block_type":"box","text":"described above, including the risks of nationalization or expropriation of assets, may be heightened. In","page_number":139,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"22e07006-0007-4951-9aaa-ab3c1d374356","block_type":"box","text":"addition, unanticipated political or social developments may affect the value of investments in these","page_number":139,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"4c9c8d79-d0fc-4f57-af33-ad3c12c69b80","block_type":"box","text":"countries and the availability to a Fund of additional investments. The small size and inexperience of","page_number":139,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"f077e79e-84d0-4aa6-b787-1cb2ced015d4","block_type":"box","text":"the securities markets in certain of these countries and the limited volume of trading in securities in","page_number":139,"box":{"x":116,"y":676,"width":732,"height":12}},{"id":"d5fba7f0-bd91-44bd-9357-9b22239b155d","block_type":"box","text":"these countries may make investments in the countries illiquid and more volatile than investments in","page_number":139,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"389e9da6-47e4-4d43-82aa-6a79fb183c93","block_type":"box","text":"more established markets.","page_number":139,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"3eebf649-4038-4aae-8112-d776d837907b","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be","page_number":139,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"4b3a2650-9f67-4e0c-b0b3-eb5580db01cb","block_type":"box","text":"available about issuers in more developed capital markets, and such issuers may not be subject to","page_number":139,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"fc6dfa9f-c162-47e6-8d1b-4a79d2a0bd15","block_type":"box","text":"accounting, auditing and financial reporting standards and requirements comparable to those to which","page_number":139,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"32da2639-225e-4f10-afcf-403809f4a2bf","block_type":"box","text":"U.S. companies are subject. In certain countries with emerging capital markets, reporting standards","page_number":139,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"47f27c48-887c-4fee-9d00-3bb062f30ca4","block_type":"box","text":"vary widely. As a result, traditional investment measurements used in the United States, such as price/","page_number":139,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"4e9b29c0-119e-4aa2-9aec-907484041671","block_type":"box","text":"earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid","page_number":139,"box":{"x":116,"y":816,"width":731,"height":12}},{"id":"8e89e57e-66f4-4de7-84d9-ac9b3d248816","block_type":"box","text":"than, and more volatile than, those of mature markets, and company shares may be held by a limited","page_number":139,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"17ed4afc-2c7e-454a-9e17-6de157af7684","block_type":"box","text":"number of persons. This may adversely affect the timing and pricing of the Fund’s acquisition or","page_number":139,"box":{"x":117,"y":847,"width":715,"height":12}},{"id":"e8a5d9c5-bbcc-42cf-827b-0602fae6f90c","block_type":"box","text":"disposal of securities.","page_number":139,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"dbe37ed5-8612-450f-a413-e5611df17676","block_type":"box","text":"II-45","page_number":139,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c8bd9d57-b8db-47b9-82c5-ce3f56725534","block_type":"box","text":"NM1026U-6004408-139/267","page_number":139,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"aa0b929a-2ace-4d42-b751-2e4bff00546f","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks","page_number":140,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"330dd55b-bd12-4c7b-ae9e-6f898cfb435d","block_type":"box","text":"than those in developed markets, in part because a Fund will need to use brokers and counterparties","page_number":140,"box":{"x":116,"y":103,"width":755,"height":11}},{"id":"312f2709-9269-46c7-9c23-4778cc84c8eb","block_type":"box","text":"that are less well capitalized, and custody and registration of assets in some countries may be","page_number":140,"box":{"x":116,"y":118,"width":703,"height":12}},{"id":"3a84bb9c-37dc-430b-ac6c-6b731739ea77","block_type":"box","text":"unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal","page_number":140,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"14c60386-11a5-4069-be81-508a24a6e982","block_type":"box","text":"to recognize ownership exists in some emerging markets, and, along with other factors, could result in","page_number":140,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"2590413a-0c69-47ec-b4fd-eea9a570ccd8","block_type":"box","text":"ownership registration being completely lost. A Fund would absorb any loss resulting from such","page_number":140,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"f538d87a-11e6-4036-9ca3-c0d24800cd9c","block_type":"box","text":"registration problems and may have no successful claim for compensation.","page_number":140,"box":{"x":117,"y":180,"width":560,"height":12}},{"id":"9e3570bd-5efe-4e4b-b380-6532c37697db","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging","page_number":140,"box":{"x":117,"y":211,"width":755,"height":12}},{"id":"f194dc06-635f-4d28-95db-7b919c6d4330","block_type":"box","text":"market countries may be on either a currency hedged or unhedged basis, and the Funds may hold","page_number":140,"box":{"x":117,"y":227,"width":735,"height":12}},{"id":"6076fb2f-15d3-4a43-925b-45d023b8c559","block_type":"box","text":"from time to time various foreign currencies pending investment or conversion into U.S. dollars. Some","page_number":140,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"62211991-6854-4899-9183-d312bf863c10","block_type":"box","text":"of these instruments may have the characteristics of futures contracts. In addition, certain Funds may","page_number":140,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"0c96546d-6e7f-4e2e-b0a2-1e3a5c56aa88","block_type":"box","text":"engage in foreign currency exchange transactions to seek to protect against changes in the level of","page_number":140,"box":{"x":116,"y":273,"width":742,"height":12}},{"id":"de1b951a-4d74-423c-81ce-17b6f2456c8e","block_type":"box","text":"future exchange rates which would adversely affect the Fund’s performance. These investments and","page_number":140,"box":{"x":116,"y":289,"width":752,"height":12}},{"id":"c6010761-31d3-4351-9e81-1f4d876f3701","block_type":"box","text":"transactions involving foreign securities, currencies, options (including options that relate to foreign","page_number":140,"box":{"x":116,"y":304,"width":738,"height":12}},{"id":"0166967e-5f11-4261-82f8-93571c8c6986","block_type":"box","text":"currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":140,"box":{"x":116,"y":320,"width":619,"height":12}},{"id":"95ede6bc-d40a-47d1-92e3-6eccc1e102d4","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":140,"box":{"x":116,"y":351,"width":328,"height":12}},{"id":"0fb5b038-367d-44c2-ab59-e7b204fde6b5","block_type":"box","text":"In addition to the risks of foreign investing and the risks of","page_number":140,"box":{"x":445,"y":351,"width":432,"height":12}},{"id":"e2308d3b-0e27-4663-ab37-173c540fc4df","block_type":"box","text":"investing in developing markets, the developing market Asia-Pacific countries in which a Fund may","page_number":140,"box":{"x":117,"y":366,"width":738,"height":12}},{"id":"59ef1a67-41b4-4af9-bf81-fe0ff6edc23a","block_type":"box","text":"invest are subject to certain additional or specific risks. Certain Funds may make substantial","page_number":140,"box":{"x":117,"y":382,"width":687,"height":12}},{"id":"58fa0513-10a4-432b-8169-3615a87ea3a6","block_type":"box","text":"investments in Asia-Pacific countries. In many of these markets, there is a high concentration of market","page_number":140,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"0a51a87d-88f6-46e1-a03a-eca0d1fcbac9","block_type":"box","text":"capitalization and trading volume in a small number of issuers representing a limited number of","page_number":140,"box":{"x":116,"y":413,"width":710,"height":12}},{"id":"5e6093bf-5a58-43e6-9572-058271546942","block_type":"box","text":"industries, as well as a high concentration of investors and financial intermediaries. Many of these","page_number":140,"box":{"x":117,"y":428,"width":730,"height":12}},{"id":"1ab4948b-3967-4a7f-841e-c5c62a39c789","block_type":"box","text":"markets also may be affected by developments with respect to more established markets in the region","page_number":140,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"eb638e98-1750-4ece-b622-52cd0bc64759","block_type":"box","text":"such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are","page_number":140,"box":{"x":116,"y":459,"width":739,"height":12}},{"id":"879f67f3-be87-44ae-bb7d-617f98ff804c","block_type":"box","text":"fewer in number and less well capitalized than brokers in the United States. These factors, combined","page_number":140,"box":{"x":116,"y":475,"width":754,"height":12}},{"id":"46c3cd8b-cf52-4968-a0fb-90c15e9901f8","block_type":"box","text":"with the U.S. regulatory requirements for open-end investment companies and the restrictions on","page_number":140,"box":{"x":116,"y":490,"width":725,"height":12}},{"id":"df04c473-f099-4382-97b7-73a3811bb34a","block_type":"box","text":"foreign investment discussed below, result in potentially fewer investment opportunities for a Fund and","page_number":140,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"fc071df5-95b3-441a-ac32-60b8118033c0","block_type":"box","text":"may have an adverse impact on the investment performance of the Fund.","page_number":140,"box":{"x":117,"y":521,"width":550,"height":12}},{"id":"0080a0aa-80d8-4f4c-9be0-cf6dbd23c840","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic,","page_number":140,"box":{"x":117,"y":552,"width":757,"height":12}},{"id":"bedddeb4-f0dc-490d-a30a-d6f119be3d69","block_type":"box","text":"political and social instability than is the case in the United States and Western European countries.","page_number":140,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"893d0efb-f087-4f8e-ac6d-6aab67088f5c","block_type":"box","text":"Such instability may result from, among other things: (i) authoritarian governments or military","page_number":140,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"a7bba510-7713-43e5-bf24-2b56f9a687f1","block_type":"box","text":"involvement in political and economic decision-making, including changes in government through extra","page_number":140,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"8ef1c55c-6928-4f55-af6a-03815b087626","block_type":"box","text":"constitutional means; (ii) popular unrest associated with demands for improved political, economic and","page_number":140,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"5344d96b-ed24-4b30-8423-d52781f6d218","block_type":"box","text":"social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and","page_number":140,"box":{"x":116,"y":630,"width":703,"height":12}},{"id":"e3d14b97-aae4-4cc9-adce-6ba95662d22a","block_type":"box","text":"(v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such","page_number":140,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"e2d49c97-9312-4512-b4e2-2db1fde58f64","block_type":"box","text":"as Indonesia, have a substantial role in regulating and supervising the economy. Another risk common","page_number":140,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"feec35e1-7f66-4d77-a0ef-2123f60470d6","block_type":"box","text":"to most such countries is that the economy is heavily export oriented and, accordingly, is dependent","page_number":140,"box":{"x":116,"y":676,"width":735,"height":12}},{"id":"3a073e21-2ff4-493e-a4c5-6d3d3ae8fb5f","block_type":"box","text":"upon international trade. The existence of overburdened infrastructure and obsolete financial systems","page_number":140,"box":{"x":117,"y":692,"width":745,"height":12}},{"id":"b654f28a-e733-4fb7-b3db-03b491cee50e","block_type":"box","text":"also presents risks in certain countries, as do environmental problems. Certain economies also depend","page_number":140,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"26a70569-2dae-4a06-b01d-52da3ff6219f","block_type":"box","text":"to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in","page_number":140,"box":{"x":116,"y":723,"width":766,"height":12}},{"id":"44a91ad5-4de2-4d78-b67f-5918e0bb4508","block_type":"box","text":"commodity prices that, in turn, may be affected by a variety of factors.","page_number":140,"box":{"x":116,"y":738,"width":511,"height":12}},{"id":"86afc54a-0fa2-41a6-a536-8c35294f5bd8","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse","page_number":140,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"9315867d-f65a-4c1c-b2d7-cbd97762e5d1","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":140,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"f0976f6b-9e6f-490c-8849-7ea3c70c43ec","block_type":"box","text":"respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the","page_number":140,"box":{"x":117,"y":800,"width":766,"height":12}},{"id":"52227fbc-10b7-4169-9ddc-5ab644fa19a4","block_type":"box","text":"notion of limited liability is less clear in certain emerging market Asia-Pacific countries. Similarly, the","page_number":140,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"295c7a5a-ef3c-4afa-a853-8b6aa5314a59","block_type":"box","text":"rights of investors in developing market Asia-Pacific companies may be more limited than those of","page_number":140,"box":{"x":117,"y":831,"width":732,"height":12}},{"id":"8c66f463-e42f-4e09-8ce6-d3167696d01d","block_type":"box","text":"shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment","page_number":140,"box":{"x":116,"y":847,"width":765,"height":12}},{"id":"480b41a1-36ce-4171-ad22-72d411c7be96","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":140,"box":{"x":117,"y":862,"width":330,"height":12}},{"id":"305403b3-7cce-443e-ac07-0f854631f375","block_type":"box","text":"II-46","page_number":140,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c973d175-718d-48f0-9213-c9d37fbf92da","block_type":"box","text":"NM1026U-6004408-140/267","page_number":140,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b83fd425-e5e0-4e4d-b091-4c93b8343d65","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to","page_number":141,"box":{"x":117,"y":87,"width":714,"height":12}},{"id":"facd1519-8848-427a-a53e-29881ea74db1","block_type":"box","text":"exercise substantial influence over many aspects of the private sector. In certain cases, the","page_number":141,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"a6c1a1eb-6c5d-42c4-8c0d-1757cf9b996d","block_type":"box","text":"government owns or controls many companies, including the largest in the country. Accordingly,","page_number":141,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"ee147eec-c383-4dee-a7cd-2d8a454b538d","block_type":"box","text":"government actions in the future could have a significant effect on economic conditions in developing","page_number":141,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"77ff53f2-d439-4c6e-8116-e7f048ef7d87","block_type":"box","text":"market Asia-Pacific countries, which could affect private sector companies and a Fund itself, as well as","page_number":141,"box":{"x":117,"y":149,"width":768,"height":12}},{"id":"9acc29c4-d342-4ab4-952b-b1259f16cbd6","block_type":"box","text":"the value of securities in the Fund’s portfolio. In addition, economic statistics of developing market","page_number":141,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"989806c7-8160-429b-8540-7e6199b8b7dd","block_type":"box","text":"Asia-Pacific countries may be less reliable than economic statistics of more developed nations.","page_number":141,"box":{"x":116,"y":180,"width":710,"height":12}},{"id":"5123f298-8d53-4471-8751-66a2595ca88b","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific","page_number":141,"box":{"x":117,"y":211,"width":741,"height":12}},{"id":"7e9c1c8a-4a57-4f2d-8a41-f1d37639caab","block_type":"box","text":"issuers and the possibility that such issuers may not be subject to the same accounting, auditing and","page_number":141,"box":{"x":117,"y":227,"width":752,"height":12}},{"id":"842694c6-c253-4b4c-a5d4-350ddae068ed","block_type":"box","text":"financial reporting standards as U.S. companies, inflation accounting rules in some developing market","page_number":141,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"f3767307-ef83-425b-97a4-2a7e374b3744","block_type":"box","text":"Asia-Pacific countries require companies that keep accounting records in the local currency, for both","page_number":141,"box":{"x":116,"y":258,"width":750,"height":12}},{"id":"61e26911-a219-4d44-83c1-91c765609f82","block_type":"box","text":"tax and accounting purposes, to restate certain assets and liabilities on the company’s balance sheet","page_number":141,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"3a31bb6a-49d3-44b5-a5c7-1847db1ff492","block_type":"box","text":"in order to express items in terms of currency of constant purchasing power. Inflation accounting may","page_number":141,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"b95d9352-cea4-498e-b04a-a2234a9c1de3","block_type":"box","text":"indirectly generate losses or profits for certain developing market Asia-Pacific companies.","page_number":141,"box":{"x":117,"y":304,"width":669,"height":12}},{"id":"34b46575-4353-4355-bc32-6b6e59a6fbe6","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia","page_number":141,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"0ea24c78-5614-4019-a0c9-94b639a3cbcc","block_type":"box","text":"Pacific countries, which may result in the Fund incurring additional costs and delays in providing","page_number":141,"box":{"x":117,"y":351,"width":716,"height":12}},{"id":"272e16a3-01a2-42b2-9880-312026e2a175","block_type":"box","text":"transportation and custody services for such securities outside such countries.","page_number":141,"box":{"x":116,"y":366,"width":586,"height":12}},{"id":"b5fa28f0-bf64-4cf3-b9a9-fae67f930028","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially","page_number":141,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"4ea5c4c7-9f23-4bdd-9da9-8bf2a3fdd3f1","block_type":"box","text":"large debtors to commercial banks and foreign governments.","page_number":141,"box":{"x":117,"y":413,"width":456,"height":12}},{"id":"e4b0e0f3-c5a1-459c-8f93-595c0d669856","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and","page_number":141,"box":{"x":117,"y":444,"width":705,"height":12}},{"id":"18256d03-82c9-4899-8d80-8700b56449a6","block_type":"box","text":"negative impact on a Fund’s investment portfolio and, in the longer term, could impair the ability of","page_number":141,"box":{"x":117,"y":459,"width":732,"height":12}},{"id":"fccfe8d8-c650-4ede-87f0-ebbaebb02a6b","block_type":"box","text":"issuers in which the Fund invests to conduct their businesses in the manner normally conducted.","page_number":141,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"ebf7b96e-fbbb-42fc-9906-91815c3b92c1","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may","page_number":141,"box":{"x":117,"y":506,"width":766,"height":12}},{"id":"a5acdd6c-d093-4e8b-a17e-70b101eac17a","block_type":"box","text":"not be practicable or appropriate to invest in a particular developing Asia-Pacific country. A Fund may","page_number":141,"box":{"x":117,"y":521,"width":757,"height":12}},{"id":"399bb1db-3e03-4dc3-aed8-26734bb4094d","block_type":"box","text":"invest in countries in which foreign investors, including management of the Fund, have had no or","page_number":141,"box":{"x":117,"y":537,"width":722,"height":12}},{"id":"5c2bd1cd-01a2-4bae-903b-3fc943f877d0","block_type":"box","text":"limited prior experience.","page_number":141,"box":{"x":117,"y":552,"width":182,"height":12}},{"id":"1cd40c37-6653-42d3-9808-7db9ff002ad6","block_type":"box","text":"Restrictions on Foreign Investments in Asia-Pacific Countries.","page_number":141,"box":{"x":116,"y":583,"width":458,"height":12}},{"id":"b44fcdaa-c302-465b-9691-ba6055e519f3","block_type":"box","text":"Some developing Asia-Pacific countries","page_number":141,"box":{"x":576,"y":583,"width":305,"height":12}},{"id":"b6e6ee02-fbdf-43a4-9da3-d1b997efebe4","block_type":"box","text":"prohibit or impose substantial restrictions on investments in their capital markets, particularly their","page_number":141,"box":{"x":117,"y":599,"width":728,"height":12}},{"id":"e2803a72-b6cc-4cb4-aca0-9700d5d87a8b","block_type":"box","text":"equity markets, by foreign entities such as a Fund. As illustrations, certain countries may require","page_number":141,"box":{"x":116,"y":614,"width":719,"height":12}},{"id":"14afdff5-089d-4bab-a4ce-a66837587d1c","block_type":"box","text":"governmental approval prior to investments by foreign persons or limit the amount of investment by","page_number":141,"box":{"x":116,"y":630,"width":741,"height":12}},{"id":"61efb5e9-7aff-4081-b75d-13829ffbdf10","block_type":"box","text":"foreign persons in a particular company or limit the investment by foreign persons to only a specific","page_number":141,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"506f627e-4fdd-498a-951c-aba0b9f578cf","block_type":"box","text":"class of securities of a company which may have less advantageous terms (including price and","page_number":141,"box":{"x":116,"y":661,"width":705,"height":12}},{"id":"ed30e8bf-e160-4102-ba95-82d0cb24b182","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. There can be","page_number":141,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"3175ac89-49b1-44e3-9d89-cac12057a6fc","block_type":"box","text":"no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In","page_number":141,"box":{"x":117,"y":692,"width":762,"height":12}},{"id":"f61d8e2a-7d20-4e17-8bdf-5ed30c04a976","block_type":"box","text":"addition, changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of","page_number":141,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"4665c3db-8dcf-4235-b51e-978f7b490d31","block_type":"box","text":"such securities may have an adverse effect on the value of such shares. Certain countries may restrict","page_number":141,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"0cefb2ec-47a4-44c7-a240-1412fb1d4c59","block_type":"box","text":"investment opportunities in issuers or industries deemed important to national interests.","page_number":141,"box":{"x":117,"y":738,"width":647,"height":12}},{"id":"8a45cc6d-1aee-4936-8e99-0b9538d66df3","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific","page_number":141,"box":{"x":116,"y":769,"width":724,"height":12}},{"id":"e93bb344-9220-4bd3-b44a-b8afdb1836f7","block_type":"box","text":"countries, as well as limitations on such investments, also may have an adverse impact on the","page_number":141,"box":{"x":116,"y":785,"width":700,"height":12}},{"id":"bee18a1f-40d8-4095-b7e1-767b5c565f52","block_type":"box","text":"operations of a Fund. For example, a Fund may be required in certain of such countries to invest","page_number":141,"box":{"x":116,"y":800,"width":717,"height":12}},{"id":"4b20601c-53f7-488e-96aa-f50c765a9794","block_type":"box","text":"initially through a local broker or other entity and then have the shares purchased re-registered in the","page_number":141,"box":{"x":117,"y":816,"width":748,"height":12}},{"id":"5ac45391-8c7e-4a6d-bf17-9a001d5e6ef1","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":141,"box":{"x":117,"y":831,"width":718,"height":12}},{"id":"93694032-c06e-4057-a2ee-f4416e8cbe92","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":141,"box":{"x":117,"y":847,"width":742,"height":12}},{"id":"ccf5dbc7-39bd-4f36-a3ae-8ba2ddecdb85","block_type":"box","text":"rights as to dividends or to be made aware of certain corporate actions. There also may be instances","page_number":141,"box":{"x":117,"y":862,"width":753,"height":12}},{"id":"e2e83861-66e2-40ae-a367-5d5c5d73ee7b","block_type":"box","text":"where a Fund places a purchase order but is subsequently informed, at the time of re-registration, that","page_number":141,"box":{"x":116,"y":878,"width":764,"height":12}},{"id":"f0a51910-7e15-4034-b5bb-500459722a8d","block_type":"box","text":"II-47","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"17d7db99-9c97-4808-b932-48a454273687","block_type":"box","text":"NM1026U-6004408-141/267","page_number":141,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"661ffe9f-0422-4769-8323-a7c8462d8a83","block_type":"box","text":"the permissible allocation of the investment to foreign investors has been filled, depriving the Fund of","page_number":142,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"bbd9d950-0585-4126-a5b9-a109ec1a3284","block_type":"box","text":"the ability to make its desired investment at that time.","page_number":142,"box":{"x":116,"y":103,"width":400,"height":12}},{"id":"bcaa4cc1-c562-4fe4-9a97-830fe497b16f","block_type":"box","text":"Substantial limitations may exist in certain countries with respect to a Fund’s ability to repatriate","page_number":142,"box":{"x":116,"y":131,"width":714,"height":12}},{"id":"bcba1be8-018d-47d0-8877-7f6ae0513654","block_type":"box","text":"investment income, capital or the proceeds of sales of securities by foreign investors. A Fund could be","page_number":142,"box":{"x":117,"y":146,"width":763,"height":12}},{"id":"2f81e5e3-b163-4639-92c9-3871fcf81e1a","block_type":"box","text":"adversely affected by delays in, or a refusal to grant, any required governmental approval for","page_number":142,"box":{"x":116,"y":162,"width":693,"height":12}},{"id":"229df372-7186-40d3-96af-fa8d03c5ef25","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":142,"box":{"x":117,"y":177,"width":759,"height":12}},{"id":"b3010ed5-1d3a-4859-baa6-874383cce33b","block_type":"box","text":"possible that certain countries may impose currency controls or other restrictions relating to their","page_number":142,"box":{"x":117,"y":193,"width":719,"height":12}},{"id":"ba34b789-b255-4777-ab8c-2f3f1996306f","block_type":"box","text":"currencies or to securities of issuers in those countries. To the extent that such restrictions have the","page_number":142,"box":{"x":116,"y":208,"width":746,"height":10}},{"id":"16b95cb4-400e-45be-b926-f8ed40af9c84","block_type":"box","text":"effect of making certain investments illiquid, securities may not be available for sale to meet","page_number":142,"box":{"x":116,"y":224,"width":685,"height":12}},{"id":"323d9160-1643-4c5c-9ec2-13312b324063","block_type":"box","text":"redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":142,"box":{"x":117,"y":239,"width":770,"height":12}},{"id":"f530956f-cefd-4a26-b1a0-d1ceeb3f9404","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the","page_number":142,"box":{"x":116,"y":255,"width":763,"height":12}},{"id":"a1ae781b-ed97-4277-bca8-34c19ae7775f","block_type":"box","text":"Fund’s assets that may be used to meet redemptions may be further decreased. Even where there is","page_number":142,"box":{"x":117,"y":270,"width":754,"height":12}},{"id":"750d9439-369f-4f41-ae34-2fec352c2967","block_type":"box","text":"no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects","page_number":142,"box":{"x":117,"y":286,"width":771,"height":12}},{"id":"a0a7a5c1-302e-4b82-a0ba-3500027eda46","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":142,"box":{"x":116,"y":301,"width":751,"height":13}},{"id":"8663b198-1256-4160-8ebc-1e805d182dfe","block_type":"box","text":"only at an exchange rate established by the government).","page_number":142,"box":{"x":116,"y":317,"width":433,"height":12}},{"id":"b5981b3d-6fc9-4cff-bf32-74997ee1bd15","block_type":"box","text":"In certain countries, banks or other financial institutions may be among the leading companies or have","page_number":142,"box":{"x":117,"y":345,"width":763,"height":12}},{"id":"2bd49a7f-5731-49f2-a1fa-487436242384","block_type":"box","text":"actively traded securities available for investment. The Investment Company Act restricts a Fund’s","page_number":142,"box":{"x":116,"y":361,"width":734,"height":12}},{"id":"c7efccdf-fda2-41ad-b247-de34ba8dc4e7","block_type":"box","text":"investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than","page_number":142,"box":{"x":117,"y":376,"width":755,"height":12}},{"id":"5fe88fe0-5bd8-43de-8a3d-a47c49dd6c16","block_type":"box","text":"15% of its revenues from “securities related activities,” as defined by the rules thereunder. These","page_number":142,"box":{"x":118,"y":392,"width":722,"height":12}},{"id":"2f7caeb5-9f62-43a6-b424-e57870d178ae","block_type":"box","text":"provisions may restrict a Fund’s investments in certain foreign banks and other financial institutions.","page_number":142,"box":{"x":117,"y":407,"width":744,"height":12}},{"id":"7e7346b5-6a69-4bd6-960c-409963aa2956","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":142,"box":{"x":117,"y":436,"width":699,"height":12}},{"id":"cfc58d02-cf05-46cb-8991-c22bb859c28d","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":142,"box":{"x":116,"y":451,"width":726,"height":12}},{"id":"75f3b215-b5dd-40c1-ae14-a9638230c5b5","block_type":"box","text":"stability characteristic of more developed countries. Some of these countries may have in the past","page_number":142,"box":{"x":116,"y":467,"width":732,"height":12}},{"id":"5c7b029c-b2ed-4528-9c7f-f383b3259d36","block_type":"box","text":"failed to recognize private property rights and have at times nationalized or expropriated the assets of","page_number":142,"box":{"x":116,"y":482,"width":759,"height":12}},{"id":"66530734-f792-4c3f-822f-70dd7176a48f","block_type":"box","text":"private companies. As a result the risks described above, including the risks of nationalization or","page_number":142,"box":{"x":117,"y":498,"width":718,"height":12}},{"id":"8067b254-93a7-408b-a7db-11585a0e51d8","block_type":"box","text":"expropriation of assets, may be heightened. In addition, unanticipated political or social developments","page_number":142,"box":{"x":116,"y":513,"width":760,"height":12}},{"id":"8ffacdcf-8c08-4c9e-ad52-d6ab25a05821","block_type":"box","text":"may affect the value of investments in these countries and the availability to a Fund of additional","page_number":142,"box":{"x":117,"y":529,"width":718,"height":12}},{"id":"e6bb74f1-cdfa-4572-af1b-48e8ee649fa7","block_type":"box","text":"investments in emerging market countries. The small size and inexperience of the securities markets in","page_number":142,"box":{"x":117,"y":544,"width":770,"height":12}},{"id":"445118bd-80e3-40fb-921d-bf812541f3ed","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make","page_number":142,"box":{"x":116,"y":560,"width":753,"height":12}},{"id":"5e5ddb81-f51a-421e-87b6-b63b55bc222a","block_type":"box","text":"investments in the countries illiquid and more volatile than investments in Japan or most Western","page_number":142,"box":{"x":117,"y":575,"width":725,"height":12}},{"id":"619ee8bd-3cef-4d8f-b30d-f200e0db9c0b","block_type":"box","text":"European countries. There may be little financial or accounting information available with respect to","page_number":142,"box":{"x":117,"y":591,"width":741,"height":12}},{"id":"3a349f85-7939-4962-a67a-06d8dbf1b0bc","block_type":"box","text":"issuers located in certain emerging market countries, and it may be difficult to assess the value or","page_number":142,"box":{"x":117,"y":606,"width":729,"height":12}},{"id":"0e86bf02-2054-4dfc-8b78-597b0a2f6bcc","block_type":"box","text":"prospects of an investment in such issuers.","page_number":142,"box":{"x":117,"y":622,"width":325,"height":12}},{"id":"e91ddc1d-8b4f-4e89-abf9-0103b7b0deab","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be","page_number":142,"box":{"x":116,"y":650,"width":728,"height":12}},{"id":"88c70366-ddce-406e-8e59-572769a486a7","block_type":"box","text":"higher than those of Funds investing primarily in domestic securities. The costs attributable to investing","page_number":142,"box":{"x":117,"y":666,"width":763,"height":12}},{"id":"272bd233-84cd-4ef8-8a48-c966a42c9540","block_type":"box","text":"abroad are usually higher for several reasons, such as the higher cost of custody of foreign securities,","page_number":142,"box":{"x":116,"y":681,"width":755,"height":12}},{"id":"44c492d5-2437-4474-a71c-42f4af183bfc","block_type":"box","text":"higher commissions paid on comparable transactions on foreign markets and additional costs arising","page_number":142,"box":{"x":117,"y":697,"width":746,"height":12}},{"id":"45f63051-dec6-40d8-adcc-82e9fbb6a0a2","block_type":"box","text":"from delays in settlements of transactions involving foreign securities.","page_number":142,"box":{"x":116,"y":712,"width":515,"height":12}},{"id":"3871db60-9777-4d93-ade9-855bab07ee54","block_type":"box","text":"Risks of Investments in Russia.","page_number":142,"box":{"x":116,"y":740,"width":232,"height":10}},{"id":"684c0f0e-4f69-46b2-b11d-4e61af68ee86","block_type":"box","text":"A Fund may invest a portion of its assets in securities issued by","page_number":142,"box":{"x":354,"y":740,"width":473,"height":13}},{"id":"97b97906-f4bf-4da6-b4f0-9bbe8f901733","block_type":"box","text":"companies located in Russia. The Russian securities market suffers from a variety of problems","page_number":142,"box":{"x":116,"y":756,"width":704,"height":12}},{"id":"63eba200-4cbb-4f1a-8146-723102dbe80c","block_type":"box","text":"described above in “Investment in Emerging Markets” not encountered in more developed markets.","page_number":142,"box":{"x":116,"y":771,"width":736,"height":13}},{"id":"44776502-af47-47fd-821e-b78bd85480e6","block_type":"box","text":"The Russian securities market is relatively new, and a substantial portion of securities transactions in","page_number":142,"box":{"x":116,"y":787,"width":749,"height":12}},{"id":"5b9b9ec7-16e5-47d5-a36d-dbc342a27314","block_type":"box","text":"Russia are privately negotiated outside of stock exchanges. 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Actual and threatened responses to such","page_number":143,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"7f447b8a-e51e-4230-8758-1ec751b7ef7c","block_type":"box","text":"military action may also impact the markets for certain Russian commodities, such as oil and natural","page_number":143,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"7d174aa6-dc52-4e17-8188-1102c8aae8dc","block_type":"box","text":"gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":143,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"9a9546a8-6fc3-4570-bf57-8ed02ffcf01a","block_type":"box","text":"sectors globally.","page_number":143,"box":{"x":116,"y":583,"width":125,"height":12}},{"id":"3d44015f-1971-4632-9979-ad89adb5c5de","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”)","page_number":143,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"b1206d69-fa4b-4932-b6f9-d90de153ae47","block_type":"box","text":"have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain","page_number":143,"box":{"x":117,"y":630,"width":745,"height":12}},{"id":"8abac668-5c8c-4924-af7b-a059592c428e","block_type":"box","text":"private transactions in the energy sector, asset freezes and prohibition of all business, against certain","page_number":143,"box":{"x":117,"y":645,"width":757,"height":12}},{"id":"2d59ddb1-feda-4bc5-884e-f62db8bcf752","block_type":"box","text":"Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning","page_number":143,"box":{"x":117,"y":661,"width":760,"height":12}},{"id":"9d1079bd-9699-4055-a8e9-f5b4f2422131","block_type":"box","text":"Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from","page_number":143,"box":{"x":117,"y":676,"width":725,"height":12}},{"id":"ffc610a5-0748-4124-b9f1-1eb81add1243","block_type":"box","text":"global payments systems that facilitate cross-border payments. These sanctions, or even the threat of","page_number":143,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"3784fa0a-bea4-4dbb-9125-2622813b1654","block_type":"box","text":"further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening","page_number":143,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"cf8d8722-fa8c-46ad-a025-3b478fc82766","block_type":"box","text":"of the ruble or other adverse consequences to the Russian economy. These sanctions have resulted","page_number":143,"box":{"x":116,"y":723,"width":746,"height":12}},{"id":"602a2328-93f7-4e0e-9cd3-91a972f98d1f","block_type":"box","text":"and may continue to result in the immediate freeze of Russian securities and/or funds invested in","page_number":143,"box":{"x":116,"y":738,"width":719,"height":12}},{"id":"9914f9af-8a86-4cd6-8809-6889c29cbc4f","block_type":"box","text":"prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or","page_number":143,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"45ada6c4-4be2-4c7c-9a0c-4226bff6cdb8","block_type":"box","text":"assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may","page_number":143,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"ae6268cb-45ac-4aa9-af52-45d98f526997","block_type":"box","text":"further impair the value and liquidity of Russian securities.","page_number":143,"box":{"x":116,"y":785,"width":428,"height":12}},{"id":"8fab2471-9e85-4289-9426-401f70b9adba","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":143,"box":{"x":116,"y":816,"width":253,"height":12}},{"id":"ced97868-f000-47fb-b02b-e09e4220ab9b","block_type":"box","text":"The ability of foreign investors (such as a Fund) to invest in Saudi","page_number":143,"box":{"x":376,"y":816,"width":486,"height":12}},{"id":"13ee4368-f4e9-43b4-a8c3-266d3c5837e7","block_type":"box","text":"Arabian issuers is new and untested. Such ability could be restricted or revoked by the Saudi Arabian","page_number":143,"box":{"x":116,"y":831,"width":757,"height":12}},{"id":"ff8521d1-04da-49b0-8683-8e5b0ad89857","block_type":"box","text":"government at any time, and unforeseen risks could materialize due to foreign ownership in such","page_number":143,"box":{"x":116,"y":847,"width":724,"height":12}},{"id":"06548699-ae32-4785-975f-25a05a27dfb2","block_type":"box","text":"securities. In addition, the Capital Market Authority (“CMA”) places investment limitations on the","page_number":143,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"d9706767-db19-40ad-9f82-5b526c5a9ccf","block_type":"box","text":"ownership of Saudi Arabian issuers by foreign investors, including a limitation on a Fund’s ownership","page_number":143,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"ba5f18cf-f811-491f-b0fd-fe615f4864c9","block_type":"box","text":"II-49","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3973ffa6-ebf4-47de-9943-436cc14c21fc","block_type":"box","text":"NM1026U-6004408-143/267","page_number":143,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ef4befad-48ba-46d5-8bc6-292c64755cfc","block_type":"box","text":"of any single issuer listed on the Saudi Arabian Stock Exchange, which may prevent a Fund from","page_number":144,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"8570be62-4be0-443c-8b4a-5a5cebc3a170","block_type":"box","text":"investing in accordance with its strategy and contribute to tracking error against the Underlying Index.","page_number":144,"box":{"x":117,"y":103,"width":757,"height":12}},{"id":"3b437c4d-2a08-4a85-b7a6-65316d880b4e","block_type":"box","text":"These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":144,"box":{"x":116,"y":118,"width":710,"height":12}},{"id":"1d3e3d0e-3f15-4436-bd63-f42dbf35e9ca","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":144,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"b859af49-fbad-467f-a088-dda9dca33023","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":144,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"408660f1-3129-4b0b-b56c-57e69adbb50d","block_type":"box","text":"Major disruptions or regulatory changes could occur in the Saudi Arabian market, any of which could","page_number":144,"box":{"x":117,"y":165,"width":750,"height":12}},{"id":"b2d3bc97-37c6-45ff-b203-7488c499a836","block_type":"box","text":"negatively impact a Fund. These risks may be exacerbated, compared to more developed markets,","page_number":144,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"7bfd431b-f700-4ef1-82e0-9ea5638dedee","block_type":"box","text":"given the limited history of foreign investment in the Saudi Arabian market. Investments in Saudi","page_number":144,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"400fa206-7e06-4b90-be7b-d827bfb945db","block_type":"box","text":"Arabia may also be subject to loss due to expropriation or nationalization of assets and property or the","page_number":144,"box":{"x":116,"y":211,"width":764,"height":12}},{"id":"ad869cb6-7bdb-4bad-ba6f-afbdeb42dc02","block_type":"box","text":"imposition of restrictions on additional foreign investments and repatriation of capital. Such heightened","page_number":144,"box":{"x":117,"y":227,"width":764,"height":12}},{"id":"c2584fd8-b1bd-43aa-bf2a-bbf4ae655845","block_type":"box","text":"risks may include, among others, restrictions on and government intervention in international trade,","page_number":144,"box":{"x":117,"y":242,"width":739,"height":12}},{"id":"a7591be7-4486-4215-bf15-642d8c090212","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in","page_number":144,"box":{"x":116,"y":258,"width":694,"height":12}},{"id":"1a3cc72a-9628-4d59-ac14-0d49c22d8d85","block_type":"box","text":"governmental decision making, armed conflict, crime and instability as a result of religious, ethnic and/","page_number":144,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"a3d0a868-8fee-4752-a20c-4a58dd3f3222","block_type":"box","text":"or socioeconomic unrest. Saudi Arabia has privatized, or has begun the process of privatizing, certain","page_number":144,"box":{"x":116,"y":289,"width":759,"height":12}},{"id":"ee44a59c-7d4c-46cc-9900-69b2eec9ee91","block_type":"box","text":"entities and industries. Newly privatized companies may face strong competition from government","page_number":144,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"33309d2a-6536-42c8-8f24-75d7be098a8c","block_type":"box","text":"sponsored competitors that have not been privatized. In some instances, investors in newly privatized","page_number":144,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"4ec20d21-ac6c-4e27-898d-814b030c2953","block_type":"box","text":"entities have suffered losses due to the inability of the newly privatized entities to adjust quickly to a","page_number":144,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"dd87b1d0-8e92-4572-b493-39a45e8a58f3","block_type":"box","text":"competitive environment or changing regulatory and legal standards or, in some cases, due to","page_number":144,"box":{"x":116,"y":351,"width":703,"height":12}},{"id":"fa21ef88-d09b-4ad2-a32c-f7770ed98683","block_type":"box","text":"re-nationalization of such privatized entities. There is no assurance that similar losses will not recur.","page_number":144,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"404dbae3-086d-4768-bd91-38582870d044","block_type":"box","text":"Further, under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid","page_number":144,"box":{"x":117,"y":382,"width":754,"height":12}},{"id":"bcd5263b-b207-46e5-944c-4755a06c7cb4","block_type":"box","text":"by a Saudi Arabian company to foreign stockholders are generally subject to a 5% withholding tax","page_number":144,"box":{"x":117,"y":397,"width":730,"height":12}},{"id":"37be252f-8156-4680-ad95-df2dde622dfa","block_type":"box","text":"(different tax rates may apply pursuant to an applicable treaty). Saudi Arabia is highly reliant on income","page_number":144,"box":{"x":117,"y":413,"width":770,"height":12}},{"id":"b73bfedc-dec5-4fa2-a3dc-490c02dabebe","block_type":"box","text":"from the sale of petroleum and trade with other countries involved in the sale of petroleum, and its","page_number":144,"box":{"x":116,"y":428,"width":732,"height":12}},{"id":"c5787732-2b40-4a88-9850-a7bb70c96dc1","block_type":"box","text":"economy is therefore vulnerable to changes in foreign currency values and the market for petroleum.","page_number":144,"box":{"x":116,"y":444,"width":753,"height":12}},{"id":"ed507319-effb-4c7c-af0b-05b80b727e8b","block_type":"box","text":"As global demand for petroleum fluctuates, Saudi Arabia may be significantly impacted.","page_number":144,"box":{"x":116,"y":459,"width":655,"height":12}},{"id":"a76d1e44-ca4f-4d0b-8e3b-a2d1313e52b1","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial","page_number":144,"box":{"x":117,"y":490,"width":701,"height":12}},{"id":"7ae3db67-a300-49e1-a1cc-8d6edc87651c","block_type":"box","text":"influence over many aspects of the private sector. Although liberalization in the wider economy is","page_number":144,"box":{"x":117,"y":506,"width":724,"height":12}},{"id":"05af2303-652d-4c22-8c34-5d1f6676c749","block_type":"box","text":"underway, in many areas it has lagged significantly: restrictions on foreign ownership persist, and the","page_number":144,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"3a0b55b9-877d-43a1-acb0-1807b4b6760e","block_type":"box","text":"government has an ownership stake in many key industries. The situation is exacerbated by the fact","page_number":144,"box":{"x":116,"y":537,"width":748,"height":12}},{"id":"7d1d972a-8f16-4475-9d09-2c0d7fd1a0c3","block_type":"box","text":"that Saudi Arabia is governed by an absolute monarchy. Saudi Arabia has historically experienced","page_number":144,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"61198b9f-aaa9-404a-a4b4-869a797368c5","block_type":"box","text":"strained relations with economic partners worldwide, including other countries in the Middle East due to","page_number":144,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"48466e1e-efa4-45e0-9429-2b1ecc5db01e","block_type":"box","text":"geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security, including","page_number":144,"box":{"x":116,"y":583,"width":742,"height":12}},{"id":"3ad306a8-849c-4ccd-9246-7f76b299fe99","block_type":"box","text":"terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":144,"box":{"x":116,"y":599,"width":757,"height":12}},{"id":"94ff3f9e-2c18-4e33-93e7-0628cdf8b588","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions","page_number":144,"box":{"x":117,"y":614,"width":766,"height":12}},{"id":"7af42ed0-fc6b-4e6c-aeb5-03768877b50e","block_type":"box","text":"in Saudi Arabia, which could affect private sector companies and a Fund, as well as the value of","page_number":144,"box":{"x":117,"y":630,"width":717,"height":12}},{"id":"d86c2b0d-e8e4-4fee-bb57-4a053b02c717","block_type":"box","text":"securities in a Fund’s portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian","page_number":144,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"909291a2-1f66-481a-8fdf-9106cb0e58bc","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":144,"box":{"x":116,"y":661,"width":760,"height":12}},{"id":"3c4f66d7-87c3-4bd4-a3a7-7303cb61859f","block_type":"box","text":"Saudi Arabian securities, a weakening of the Saudi riyal or other adverse consequences to the Saudi","page_number":144,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"c0e5834b-381d-4538-9481-60d028e6b2b3","block_type":"box","text":"Arabian economy. In addition, Saudi Arabia’s economy relies heavily on cheap, foreign labor, and","page_number":144,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"d2819843-98e4-4a5e-83e8-355784f720e2","block_type":"box","text":"changes in the availability of this labor supply could have an adverse effect on the economy.","page_number":144,"box":{"x":116,"y":707,"width":684,"height":12}},{"id":"b0f8705b-59bc-48cb-9999-54e410eb4678","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a","page_number":144,"box":{"x":116,"y":738,"width":725,"height":12}},{"id":"df01348c-b3d3-4440-91c9-b765c04dfa63","block_type":"box","text":"result, securities markets in Saudi Arabia are subject to greater risks associated with market volatility,","page_number":144,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"a13cc248-0a9c-49e3-b84d-34b6c8a480e0","block_type":"box","text":"lower market capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations,","page_number":144,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"644aaef9-02fc-44cd-a225-5a23bb63895d","block_type":"box","text":"uncertainty regarding the existence of trading markets, governmental control and heavy regulation of","page_number":144,"box":{"x":117,"y":785,"width":747,"height":12}},{"id":"f2797387-9f46-4b8d-a48a-9842c1e47ca7","block_type":"box","text":"labor and industry. Shares of certain Saudi Arabian companies tend to trade less frequently than those","page_number":144,"box":{"x":117,"y":800,"width":761,"height":12}},{"id":"0e7c0658-7e24-4b65-b4c9-8e093887f337","block_type":"box","text":"of companies on exchanges in more developed markets. Such infrequent trading may adversely affect","page_number":144,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"8c11055b-1dd7-42a3-ab2b-54b7ba243bed","block_type":"box","text":"the pricing of these securities and a Fund’s ability to sell these securities in the future. Current","page_number":144,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"ad02710c-f7ab-4d01-9c9c-4017f30b3ef0","block_type":"box","text":"regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":144,"box":{"x":117,"y":847,"width":733,"height":12}},{"id":"4cf19489-595c-42f0-9037-69e346853056","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":144,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"50050eba-2d9a-4955-a7f1-62cfedb5fd94","block_type":"box","text":"Fund than is typically the case for investment managers.","page_number":144,"box":{"x":117,"y":878,"width":424,"height":12}},{"id":"2e264b23-e61c-4c0a-b504-6dd1481d8639","block_type":"box","text":"II-50","page_number":144,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1a8ed9b9-1c6f-4ec3-9a61-974b5cd914c1","block_type":"box","text":"NM1026U-6004408-144/267","page_number":144,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c03a804d-730d-4e12-bb98-3bb19a5bfee7","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically","page_number":145,"box":{"x":116,"y":87,"width":687,"height":12}},{"id":"8e52995c-3a0b-44e1-b5e7-ff648c670ddb","block_type":"box","text":"experienced political instability, and there remains the possibility that the stability will not hold in the","page_number":145,"box":{"x":116,"y":103,"width":741,"height":12}},{"id":"860f7bbb-3af6-4e82-ae0a-e0e5255d1a44","block_type":"box","text":"future or that instability in the larger Middle East region could adversely impact the economy of Saudi","page_number":145,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"5b4384fd-e8f9-44e9-8eed-e9377a62b58f","block_type":"box","text":"Arabia. Instability may be caused by military developments, government interventions in the","page_number":145,"box":{"x":116,"y":134,"width":686,"height":12}},{"id":"8e708d2a-2417-4a24-949a-97a3b87e338d","block_type":"box","text":"marketplace, terrorism, extremist attitudes, attempted social or political reforms, religious differences,","page_number":145,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"ffa125c5-e0a0-4898-b238-c7d83a844205","block_type":"box","text":"or other factors. Additionally, anti-Western views held by certain groups in the Middle East may","page_number":145,"box":{"x":116,"y":165,"width":710,"height":12}},{"id":"e12194da-e39a-4512-a73f-64c47b567b87","block_type":"box","text":"influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":145,"box":{"x":117,"y":180,"width":740,"height":12}},{"id":"4108b256-b875-4ec1-a2f8-7cab341d2941","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S.","page_number":145,"box":{"x":116,"y":196,"width":768,"height":12}},{"id":"3a74b45a-0c08-4b14-aa32-6a99c20f03c9","block_type":"box","text":"is a significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi","page_number":145,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"2a32dde8-a097-44b4-a767-4c8a4eaf6e91","block_type":"box","text":"Arabia. As a result, economic conditions of Saudi Arabia may be particularly affected by changes in the","page_number":145,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"83524191-928f-44de-8fad-3e48945c0e04","block_type":"box","text":"U.S. economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs,","page_number":145,"box":{"x":117,"y":242,"width":738,"height":12}},{"id":"e99d8e47-741f-4062-b481-858e1cb02343","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":145,"box":{"x":116,"y":258,"width":746,"height":12}},{"id":"92142b1b-7a44-47b9-9979-05d790a1cf05","block_type":"box","text":"adverse effect on the economic conditions of Saudi Arabia and, as a result, securities to which the","page_number":145,"box":{"x":116,"y":273,"width":733,"height":11}},{"id":"aea320c5-8e27-4a62-a208-7298c5294209","block_type":"box","text":"Fund has exposure. Political instability in North Africa and the larger Middle East region has caused","page_number":145,"box":{"x":117,"y":289,"width":743,"height":12}},{"id":"3157c800-dcff-4d61-8fed-23f1b2a4a1cc","block_type":"box","text":"significant disruptions to many industries. Continued political and social unrest in these areas may","page_number":145,"box":{"x":116,"y":304,"width":732,"height":12}},{"id":"64276508-a4ac-48b0-8bf0-cd6a03f5b023","block_type":"box","text":"negatively affect the value of securities in a Fund’s portfolio.","page_number":145,"box":{"x":117,"y":320,"width":449,"height":12}},{"id":"2036316c-be19-4262-92d4-a4ee475cfee5","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to","page_number":145,"box":{"x":117,"y":351,"width":731,"height":12}},{"id":"5e4c90aa-b18f-4e47-924c-540f2a26d034","block_type":"box","text":"sanctions and/or embargoes imposed by the U.S. Government and the United Nations and/or countries","page_number":145,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"342f7010-fd34-4b6e-bf72-7af8797991b3","block_type":"box","text":"identified by the U.S. Government as state sponsors of terrorism. As a result, an issuer may sustain","page_number":145,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"2e561df3-34d2-4b9e-8087-b340a1dadc93","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":145,"box":{"x":116,"y":397,"width":734,"height":12}},{"id":"2442e936-dd97-44f2-be8b-e380055bdd10","block_type":"box","text":"countries. A Fund, as an investor in such issuers will be indirectly subject to those risks.","page_number":145,"box":{"x":116,"y":413,"width":655,"height":12}},{"id":"8d49f980-4537-4163-82ba-89ba3282e00f","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":145,"box":{"x":116,"y":444,"width":237,"height":12}},{"id":"1285bef0-8de9-47db-964d-c02c7db81cbc","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory,","page_number":145,"box":{"x":354,"y":444,"width":493,"height":12}},{"id":"736ca240-febe-4789-a715-f8373a4cf27e","block_type":"box","text":"political, currency, security, expropriation and/or nationalization of assets and economic risk specific to","page_number":145,"box":{"x":117,"y":459,"width":764,"height":12}},{"id":"a4630a8d-8683-421d-9dba-14a4a0e8248b","block_type":"box","text":"Venezuela. Venezuela is extremely well endowed with natural resources, including oil and natural gas,","page_number":145,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"54f72709-e86c-4cd8-9b38-383db91a5c38","block_type":"box","text":"and its economy is heavily dependent on export of natural resources to key trading partners. Any act of","page_number":145,"box":{"x":116,"y":490,"width":770,"height":12}},{"id":"0518ace5-dbfd-403f-a181-be81ad0f8cd3","block_type":"box","text":"terrorism, an armed conflict or a breakdown of a key trading relationship that disrupts the production or","page_number":145,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"e363eb4d-7dd4-4ae8-9fb7-ebd389801bb1","block_type":"box","text":"export of natural resources will likely negatively affect the Venezuelan economy. The government","page_number":145,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"de4a7d6f-b6ff-4f38-9822-f63530cafaf2","block_type":"box","text":"continues to control key sectors of the economy, including upstream oil and gas production, and has","page_number":145,"box":{"x":116,"y":537,"width":749,"height":12}},{"id":"0b9ee92c-d960-4254-a7a1-13e595aea405","block_type":"box","text":"sought to increase its role in key sectors, such as telecommunications and steel. Meanwhile,","page_number":145,"box":{"x":116,"y":552,"width":692,"height":12}},{"id":"4552eded-7544-439c-a83f-a7c94a345e63","block_type":"box","text":"ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":145,"box":{"x":116,"y":568,"width":753,"height":12}},{"id":"d14fb83d-ddd7-4738-a7e5-99fbb935fb37","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues","page_number":145,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"82d47c9a-13d8-41be-8a32-b34a38efad8e","block_type":"box","text":"between the governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions,","page_number":145,"box":{"x":117,"y":599,"width":731,"height":12}},{"id":"27e73cf3-3216-4d1c-a621-aba19c8c3bfd","block_type":"box","text":"which consist of asset freezes and sectoral sanctions, on certain Venezuelan individuals and","page_number":145,"box":{"x":116,"y":614,"width":693,"height":11}},{"id":"3e8a32f2-8b30-435a-9bae-507676a5b8a3","block_type":"box","text":"Venezuelan corporate entities, and on the Venezuelan government. The U.S. could also institute","page_number":145,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"f82889c0-bd28-4932-9878-886ad728f6ee","block_type":"box","text":"broader sanctions on Venezuela. The U.S. has also taken military action against Venezuela in an effort","page_number":145,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"cbed5a46-f3d5-4d81-81b3-5a8fffad2ec2","block_type":"box","text":"to effect regime change. Military action, sanctions, or even the threat of further military action and","page_number":145,"box":{"x":116,"y":661,"width":721,"height":12}},{"id":"604967ad-1f92-4bd9-b072-702f57aa1564","block_type":"box","text":"sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a weakening of","page_number":145,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"0b565cf2-791e-42ca-994c-40d74db695a6","block_type":"box","text":"the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":145,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"1f39d6e7-c462-4322-82d4-8243e96c4354","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions","page_number":145,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"076b2764-7b59-45a1-b828-518a12bfd3c5","block_type":"box","text":"against Venezuela may in the future be imposed by the U.S. or other countries. These factors, among","page_number":145,"box":{"x":116,"y":723,"width":755,"height":12}},{"id":"78971b7a-1f9e-41b0-a36e-addbb0565865","block_type":"box","text":"others, can have a negative impact on a Fund’s investments.","page_number":145,"box":{"x":116,"y":738,"width":451,"height":12}},{"id":"a1b8de50-24d9-45f0-ac83-04a529416a9a","block_type":"box","text":"Brady Bonds.","page_number":145,"box":{"x":116,"y":769,"width":99,"height":12}},{"id":"65429bf1-712d-417b-a031-fa1d7eac7a93","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities","page_number":145,"box":{"x":222,"y":769,"width":628,"height":12}},{"id":"af9ca27e-61a8-4a7f-a7b0-8e941ef57cd6","block_type":"box","text":"may include emerging market governmental debt obligations commonly referred to as Brady Bonds.","page_number":145,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"e24886ba-9159-4383-8409-71007c62f5a3","block_type":"box","text":"Brady Bonds are securities created through the exchange of existing commercial bank loans to","page_number":145,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"a7a2b122-6caf-4738-8440-2de8f2be7039","block_type":"box","text":"sovereign entities for new obligations in connection with debt restructurings under a debt restructuring","page_number":145,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"b3437d69-66bb-4fdc-ae5c-2ca0b0f406b2","block_type":"box","text":"plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the “Brady Plan”). Brady","page_number":145,"box":{"x":117,"y":831,"width":760,"height":12}},{"id":"b3da90ed-1648-43cc-9e13-16a7f9e1ed06","block_type":"box","text":"Plan debt restructurings have been implemented in a number of countries, including: Argentina,","page_number":145,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"4568d011-2ede-4556-a4a9-da81b2c14e69","block_type":"box","text":"Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico, Niger, Nigeria,","page_number":145,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"19283224-0f0a-4192-9c1b-622fa428aae4","block_type":"box","text":"Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. Beginning in the early","page_number":145,"box":{"x":117,"y":878,"width":728,"height":12}},{"id":"c80f43e7-a305-4f14-a404-33597f55548f","block_type":"box","text":"II-51","page_number":145,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"e95430c3-7dcc-45b3-8374-090f332e1643","block_type":"box","text":"NM1026U-6004408-145/267","page_number":145,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"77963fa6-4127-45f3-9305-56235b478cbd","block_type":"box","text":"2000s, certain countries began retiring their Brady Bonds, including Brazil, Colombia, Mexico, the","page_number":146,"box":{"x":116,"y":87,"width":727,"height":12}},{"id":"ed65bdfe-b4e7-4985-8224-94241d6901e7","block_type":"box","text":"Philippines, and Venezuela.","page_number":146,"box":{"x":117,"y":103,"width":211,"height":11}},{"id":"7ee71fab-7770-46aa-ac21-abb9633e80d9","block_type":"box","text":"Brady Bonds may be collateralized or uncollateralized, are issued in various currencies (primarily the","page_number":146,"box":{"x":117,"y":134,"width":752,"height":12}},{"id":"8be9335f-4263-4e3e-9b41-03bda66e1b46","block_type":"box","text":"U.S. dollar) and are actively traded in the OTC secondary market. Brady Bonds are not considered to","page_number":146,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"29769f38-16bd-4795-87d0-1d8400506403","block_type":"box","text":"be U.S. Government Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be","page_number":146,"box":{"x":117,"y":165,"width":747,"height":12}},{"id":"fd91cfcf-11f2-478b-a42a-09dee8531dd2","block_type":"box","text":"fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal by","page_number":146,"box":{"x":116,"y":180,"width":768,"height":12}},{"id":"462a768e-160d-4f31-94a5-2c81eafbeec0","block_type":"box","text":"U.S. Treasury zero-coupon bonds having the same maturity as the Brady Bonds. Interest payments on","page_number":146,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"5ff773f9-e22b-47c3-b3b8-6b6d31411315","block_type":"box","text":"these Brady Bonds generally are collateralized on a one-year or longer rolling-forward basis by cash or","page_number":146,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"3d0b61b3-4e3a-4f87-aee7-0929ecb01153","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":146,"box":{"x":116,"y":227,"width":738,"height":12}},{"id":"6acb261e-4a2a-41b6-bab5-69bdb52e5ec9","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":146,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"5c379d30-5eff-4991-8116-dd16cd8833bf","block_type":"box","text":"based on the applicable interest rate at that time and is adjusted at regular intervals thereafter. Certain","page_number":146,"box":{"x":117,"y":258,"width":764,"height":12}},{"id":"86b55c20-22eb-4611-a039-df62701f70fb","block_type":"box","text":"Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect","page_number":146,"box":{"x":117,"y":273,"width":711,"height":12}},{"id":"f6e76318-d910-458b-abdf-9eff837f789f","block_type":"box","text":"constitute supplemental interest payments but generally are not collateralized. Brady Bonds are often","page_number":146,"box":{"x":116,"y":289,"width":757,"height":12}},{"id":"5484aef5-a69a-4f9a-90e8-d0e797a3194a","block_type":"box","text":"viewed as having three or four valuation components: (i) the collateralized repayment of principal at","page_number":146,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"87a04a5f-6c99-4560-aefa-ad075a1aed88","block_type":"box","text":"final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and","page_number":146,"box":{"x":116,"y":320,"width":753,"height":12}},{"id":"53bf0380-906b-45d7-80e8-607e190c29d7","block_type":"box","text":"(iv) any uncollateralized repayment of principal at maturity (the uncollateralized amounts constitute the","page_number":146,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"99679fe0-5bee-45dd-a6b7-606e7787ea51","block_type":"box","text":"“residual risk”).","page_number":146,"box":{"x":116,"y":351,"width":116,"height":12}},{"id":"6fa2f671-7444-4b41-a059-391c07bd59be","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign","page_number":146,"box":{"x":117,"y":382,"width":695,"height":12}},{"id":"dc83b614-86b1-42fa-a9f8-bde16c52ef15","block_type":"box","text":"securities, including the history of defaults with respect to commercial bank loans by public and private","page_number":146,"box":{"x":116,"y":397,"width":765,"height":12}},{"id":"38d2764d-d6ee-49e1-a4ca-c141a0d0f78d","block_type":"box","text":"entities of countries issuing Brady Bonds. In light of the residual risk of Brady Bonds and, among other","page_number":146,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"98a9bf19-3425-4dee-8604-8041885824cc","block_type":"box","text":"factors, the history of defaults, investments in Brady Bonds are considered speculative. There can be","page_number":146,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"28798e1a-078e-4241-9ed9-61f326f2e428","block_type":"box","text":"no assurance that Brady Bonds in which the Funds may invest will not be subject to restructuring","page_number":146,"box":{"x":117,"y":444,"width":723,"height":12}},{"id":"dde7d0fa-51d0-4dcd-87a5-73d3401896fe","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":146,"box":{"x":116,"y":459,"width":752,"height":12}},{"id":"3605313b-685e-44c3-9e04-9a7ac53e3f1b","block_type":"box","text":"principal on any of its holdings.","page_number":146,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"a4af1834-ca82-4b53-9230-217b1ef602b5","block_type":"box","text":"China Investments Risk.","page_number":146,"box":{"x":117,"y":506,"width":185,"height":9}},{"id":"a53bec84-9615-4c99-9c0c-095f4ea4fcd0","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the","page_number":146,"box":{"x":117,"y":529,"width":734,"height":12}},{"id":"a39bf589-e0b2-453b-a822-bc0537ada6d0","block_type":"box","text":"“PRC”), including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and","page_number":146,"box":{"x":116,"y":544,"width":764,"height":12}},{"id":"225d25c6-f186-4855-ad49-98ebc53579fb","block_type":"box","text":"special considerations not typically associated with investing in the U.S. securities markets. Such","page_number":146,"box":{"x":116,"y":560,"width":725,"height":12}},{"id":"e48a857d-c92f-4656-8301-8d3da8dab24a","block_type":"box","text":"heightened risks include, among others, an authoritarian government, popular unrest associated with","page_number":146,"box":{"x":117,"y":576,"width":753,"height":11}},{"id":"ad1ba36b-7d09-4bd3-a4cd-323dcc64534f","block_type":"box","text":"demands for improved political, economic and social conditions, the impact of regional conflict on the","page_number":146,"box":{"x":116,"y":591,"width":754,"height":12}},{"id":"6cd02981-faa0-4021-b9d9-0e2938b141a5","block_type":"box","text":"economy and hostile relations with other countries.","page_number":146,"box":{"x":116,"y":607,"width":382,"height":11}},{"id":"375dfc07-c2dd-485d-a29b-720f20673fe9","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could","page_number":146,"box":{"x":117,"y":637,"width":729,"height":12}},{"id":"679551bd-691e-486b-964c-fea237588568","block_type":"box","text":"disrupt economic development. The Chinese economy is vulnerable to the long-running disagreements","page_number":146,"box":{"x":116,"y":653,"width":769,"height":12}},{"id":"ced90f8f-629c-40ae-827e-d86357c088ca","block_type":"box","text":"and religious and nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been","page_number":146,"box":{"x":116,"y":668,"width":752,"height":12}},{"id":"79954328-dc20-4989-8eaa-048b5f4165e7","block_type":"box","text":"tensions between the Chinese government and many people in Hong Kong who perceive China as","page_number":146,"box":{"x":116,"y":684,"width":733,"height":12}},{"id":"47b8e015-1306-47e7-96cd-05876e834b4e","block_type":"box","text":"tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal, and social","page_number":146,"box":{"x":116,"y":700,"width":725,"height":12}},{"id":"75aa4421-801a-4d3f-bce9-050d9711c1e8","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. Due to the interconnected","page_number":146,"box":{"x":116,"y":715,"width":716,"height":9}},{"id":"dec61ede-811d-47f7-9927-27e1414b40b2","block_type":"box","text":"nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty","page_number":146,"box":{"x":117,"y":730,"width":756,"height":13}},{"id":"3781ee99-8971-44c0-b772-c5735e47d5d3","block_type":"box","text":"in the Hong Kong and Chinese markets. China has a complex territorial dispute regarding the","page_number":146,"box":{"x":117,"y":746,"width":691,"height":12}},{"id":"692b229f-f2a1-455b-8a53-98cd4402392a","block_type":"box","text":"sovereignty of Taiwan and has made threats of invasion. Taiwan-based companies and individuals are","page_number":146,"box":{"x":116,"y":761,"width":761,"height":13}},{"id":"421ee419-29ad-4c9d-bf6c-41dd1b7a7e9b","block_type":"box","text":"significant investors in China. The continuing hostility between China and Taiwan may have an adverse","page_number":146,"box":{"x":116,"y":777,"width":767,"height":12}},{"id":"1465e242-95b8-4cf1-9087-7c6a8baf7aef","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":146,"box":{"x":117,"y":792,"width":712,"height":13}},{"id":"3e032183-2105-412a-9476-75bc6ac1d050","block_type":"box","text":"Fund’s ability to trade in certain securities or other assets or may otherwise make such investments","page_number":146,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"2c12271b-9bc5-469d-bb11-a5f1ceee2ffd","block_type":"box","text":"impracticable or impossible. Any escalation of hostility between China and Taiwan would likely have a","page_number":146,"box":{"x":117,"y":823,"width":753,"height":13}},{"id":"62bc5e8b-46a5-4f09-8c68-fda630db25df","block_type":"box","text":"significant adverse impact on the value of the Fund’s investments in both countries and the region. In","page_number":146,"box":{"x":116,"y":839,"width":755,"height":12}},{"id":"bea2efaf-160c-47cf-a063-0a7fc15ec696","block_type":"box","text":"addition, China has strained international relations with Japan, India, the Philippines and other","page_number":146,"box":{"x":116,"y":854,"width":703,"height":12}},{"id":"638d7978-ffbd-41f4-a6b5-f6d5055b8fc7","block_type":"box","text":"neighbors due to territorial disputes, historical animosities and other defense concerns. Frictions","page_number":146,"box":{"x":117,"y":870,"width":717,"height":12}},{"id":"a2298cdd-f943-4745-a84f-2340fb003750","block_type":"box","text":"II-52","page_number":146,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"15ac73c6-c768-4a37-861c-288187c93711","block_type":"box","text":"NM1026U-6004408-146/267","page_number":146,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ca168e48-80e0-41ca-b5b8-3ab88f49473b","block_type":"box","text":"between China and the Philippines in the South China Sea pose a risk of escalation potentially leading","page_number":147,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"c4ab2ef8-8c70-4bd3-bf43-af1c2864fed4","block_type":"box","text":"to military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks","page_number":147,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"c8f2f75d-c7ff-479a-af0a-b75a7ae2d4b8","block_type":"box","text":"against foreign companies and foreign governments. Actual and threatened responses to such activity","page_number":147,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"b05d238d-9c63-45b9-9a48-cc9fe418422d","block_type":"box","text":"and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks","page_number":147,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"4f4d9a3c-ef07-4f7a-a39d-85a1eae17d1f","block_type":"box","text":"on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers","page_number":147,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"5a12bc3f-85cc-49a8-b295-91cf1ca4d4fc","block_type":"box","text":"of securities in which a Fund invests. China could be affected by military events on the Korean","page_number":147,"box":{"x":116,"y":165,"width":705,"height":12}},{"id":"34d57ce8-686d-4e63-9664-abfba86dea81","block_type":"box","text":"peninsula or internal instability within North Korea. These situations may cause uncertainty in the","page_number":147,"box":{"x":117,"y":180,"width":723,"height":12}},{"id":"921ebcf8-37e1-4304-861c-a8533d388d79","block_type":"box","text":"Chinese market and may adversely affect the performance of the Chinese economy.","page_number":147,"box":{"x":117,"y":196,"width":631,"height":12}},{"id":"c8290ea3-2ea8-42ee-b295-7eb13db02ab2","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy,","page_number":147,"box":{"x":116,"y":227,"width":712,"height":12}},{"id":"f2e952a4-e577-43ea-be56-26bc1a22d5c0","block_type":"box","text":"promote foreign investment in the economy, reduce government control of the economy and develop","page_number":147,"box":{"x":117,"y":242,"width":752,"height":12}},{"id":"0fe3a6a9-2ad6-4408-bb81-273935d871f9","block_type":"box","text":"market mechanisms. However, the Chinese government still exercises substantial influence over many","page_number":147,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"d4c54b63-ece3-478b-add7-cf4890cb4204","block_type":"box","text":"aspects of the private sector and may own or control many companies. Chinese companies, such as","page_number":147,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"112d8d87-4631-40ff-afb7-ec1732a6978d","block_type":"box","text":"those in the financial services or technology sectors, and potentially other sectors in the future, are","page_number":147,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"abb45b95-5fc3-4e3c-92d4-e82836761508","block_type":"box","text":"subject to the risk that Chinese authorities can intervene in their operations and structure. The Chinese","page_number":147,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"2848ce8e-ceb4-41bf-8098-5d2b177b3e3f","block_type":"box","text":"government continues to maintain a major role in economic policymaking and investing in China","page_number":147,"box":{"x":116,"y":320,"width":717,"height":12}},{"id":"1f6d759b-ad36-4239-8b3f-4dff0746d314","block_type":"box","text":"involves risk of loss due to expropriation, nationalization, confiscation of assets and property or the","page_number":147,"box":{"x":117,"y":335,"width":736,"height":12}},{"id":"9554571a-d60d-4c86-9edd-e1a6e8923283","block_type":"box","text":"imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":147,"box":{"x":117,"y":351,"width":647,"height":12}},{"id":"1cb5fc51-c5cb-4443-9236-78d5e6086cc7","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of","page_number":147,"box":{"x":116,"y":382,"width":764,"height":12}},{"id":"63a5400b-4561-4c5f-adaf-6b4c555430de","block_type":"box","text":"trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks.","page_number":147,"box":{"x":116,"y":397,"width":761,"height":12}},{"id":"685eeb18-da56-4eca-9405-6c1723ffe0a7","block_type":"box","text":"This may affect market price and liquidity of these stocks, and may have an unpredictable impact on","page_number":147,"box":{"x":116,"y":413,"width":748,"height":12}},{"id":"276a4a9c-5f46-4097-96a6-c14854ee5391","block_type":"box","text":"the investment activities of the Funds. Furthermore, such market interventions may have a negative","page_number":147,"box":{"x":116,"y":428,"width":745,"height":12}},{"id":"872647e1-542f-4e5f-bec0-1dcd4708c022","block_type":"box","text":"impact on market sentiment which may in turn affect the performance of the securities markets and as","page_number":147,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"604ef676-1f17-4d5a-a5ee-35d6b0e9d6a8","block_type":"box","text":"a result the performance of the Funds.","page_number":147,"box":{"x":116,"y":459,"width":290,"height":12}},{"id":"cf82da9c-2ecb-4e3d-a0a4-b813c83291ed","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of","page_number":147,"box":{"x":117,"y":490,"width":749,"height":12}},{"id":"0150417b-8532-41e5-b99a-0419d7c3c1c9","block_type":"box","text":"investors, brokers and other participants than in the United States. Accordingly, issuers of securities in","page_number":147,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"c623e883-39d9-4547-80e1-b859b8d19e18","block_type":"box","text":"China, including Chinese companies that are listed on U.S. exchanges, are not subject to the same","page_number":147,"box":{"x":117,"y":521,"width":741,"height":12}},{"id":"8a7cb971-4016-48c7-be61-1462990dd5ef","block_type":"box","text":"degree of regulation as are U.S. issuers with respect to such matters as insider trading rules, tender","page_number":147,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"9cccdd97-8253-4a2b-9d37-6703e57bc431","block_type":"box","text":"offer regulation, accounting standards or auditor oversight, stockholder proxy requirements and the","page_number":147,"box":{"x":116,"y":552,"width":740,"height":12}},{"id":"ffc8e410-d6ee-43dd-a0ee-6b5040336268","block_type":"box","text":"requirements mandating timely and accurate disclosure of information. Securities markets in China are","page_number":147,"box":{"x":117,"y":568,"width":766,"height":12}},{"id":"4208b52e-2300-465a-8bd4-0f385aabc95f","block_type":"box","text":"in the process of change and further development. This may lead to trading volatility, difficulty in the","page_number":147,"box":{"x":117,"y":583,"width":744,"height":12}},{"id":"3f5e1bf0-f3df-479e-bc1a-518fd75969f4","block_type":"box","text":"settlement and recording of transactions and difficulty in interpreting and applying the relevant","page_number":147,"box":{"x":116,"y":599,"width":701,"height":12}},{"id":"d1269cbf-1562-4c7d-ba57-0979cce9ae5d","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":147,"box":{"x":117,"y":614,"width":755,"height":12}},{"id":"535d29db-41d9-4a79-8f67-e9f217b83a74","block_type":"box","text":"settlement and administration of securities in China that is customary in more developed markets. In","page_number":147,"box":{"x":116,"y":630,"width":748,"height":12}},{"id":"488e2689-73b8-4e45-a660-1e8499a6299e","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":147,"box":{"x":117,"y":645,"width":764,"height":12}},{"id":"c4cee0a2-d884-41db-89ab-ffb1be9ef285","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":147,"box":{"x":117,"y":661,"width":278,"height":12}},{"id":"81a760a6-4291-4b52-83a9-2d2a21ea40d3","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or","page_number":147,"box":{"x":116,"y":692,"width":702,"height":12}},{"id":"eb1a2dbf-ab9e-4c7d-a1a7-1cee5f9485b0","block_type":"box","text":"litigation against Chinese companies, and shareholders may have limited legal remedies. The Funds","page_number":147,"box":{"x":117,"y":707,"width":745,"height":12}},{"id":"3ee4448a-4242-4a00-8c49-e6768541560f","block_type":"box","text":"do not select investments based on investor protection considerations.","page_number":147,"box":{"x":116,"y":723,"width":522,"height":12}},{"id":"1aad132f-9eff-41b0-aa60-1ace61300104","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company","page_number":147,"box":{"x":116,"y":754,"width":684,"height":12}},{"id":"3cafef8a-2dde-4ff1-a82d-224cccf78b84","block_type":"box","text":"Accounting Oversight Board (“PCAOB”) from inspecting the audit work and practices of accounting","page_number":147,"box":{"x":116,"y":769,"width":732,"height":12}},{"id":"d63196a5-2cb9-4674-8c2b-88e31e991188","block_type":"box","text":"firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. On","page_number":147,"box":{"x":116,"y":785,"width":751,"height":12}},{"id":"a950db08-442d-43fa-83c9-def2b5d0fa8c","block_type":"box","text":"August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory","page_number":147,"box":{"x":116,"y":800,"width":729,"height":12}},{"id":"c911e43c-ea09-4b9d-a906-13454fedbc9f","block_type":"box","text":"Commission and the Ministry of Finance of the PRC, which marked the first step toward opening","page_number":147,"box":{"x":117,"y":816,"width":714,"height":12}},{"id":"899b9aae-5d3f-4766-86df-eb955d4112aa","block_type":"box","text":"access for the PCAOB to inspect and investigate registered public accounting firms headquartered in","page_number":147,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"5707a713-2a3c-4f31-86be-dde916908073","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":147,"box":{"x":117,"y":847,"width":672,"height":12}},{"id":"5af11f62-7dcc-4de5-943c-562888418002","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested.","page_number":147,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"3537a1d0-ca50-4086-a730-ba9177c20d6a","block_type":"box","text":"Audits performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be","page_number":147,"box":{"x":116,"y":878,"width":747,"height":12}},{"id":"bc092f1e-ee2d-4dc7-bc80-68a05819922d","block_type":"box","text":"II-53","page_number":147,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dad1b1a4-f417-45d4-b2a1-161763e5d7f7","block_type":"box","text":"NM1026U-6004408-147/267","page_number":147,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"aa4d852e-531a-4166-81d8-df673b7fd494","block_type":"box","text":"less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information","page_number":148,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"7ca6f06e-f0b9-4f2e-a94d-c1f95d03a55d","block_type":"box","text":"about the Chinese securities in which the Funds invest may be less reliable or complete. Under","page_number":148,"box":{"x":116,"y":102,"width":712,"height":13}},{"id":"a063c15f-9960-4b90-944e-d0b3aee3da72","block_type":"box","text":"amendments to the Sarbanes-Oxley Act enacted in December 2020, which requires that the PCAOB","page_number":148,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"1da11f2b-58d7-42bb-bb8e-b1640af9036f","block_type":"box","text":"be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies with","page_number":148,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"cb156690-65c6-4666-97ee-4789303d1a33","block_type":"box","text":"securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":148,"box":{"x":116,"y":149,"width":670,"height":12}},{"id":"a058d1d4-a3a9-4ea0-80d7-cfc46c92a609","block_type":"box","text":"accounting firm.","page_number":148,"box":{"x":116,"y":165,"width":123,"height":12}},{"id":"311bab0a-df6c-4f05-b0f3-4399fd370dbd","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange","page_number":148,"box":{"x":116,"y":196,"width":763,"height":12}},{"id":"efe18281-7884-463a-9b4c-1a9f56dd137a","block_type":"box","text":"control policies and repatriation restrictions imposed by the Chinese government. The imposition of","page_number":148,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"543e8b28-83c6-45a6-98c6-c7e0e4d67803","block_type":"box","text":"currency controls may negatively impact performance and liquidity of the Funds as capital may become","page_number":148,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"76b21604-2e73-4e1f-8e61-f9b316115731","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":148,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"b15d4c87-f99c-41c2-bd33-aa615b5ff692","block_type":"box","text":"required governmental approval for repatriation of capital, as well as by the application to the Funds of","page_number":148,"box":{"x":117,"y":258,"width":762,"height":12}},{"id":"0bff5d6a-5864-49a8-868a-248891ced1e1","block_type":"box","text":"any restrictions on investments. Investing in entities either in, or which have a substantial portion of","page_number":148,"box":{"x":116,"y":273,"width":740,"height":12}},{"id":"819e233d-cc61-4131-bb9e-d9640c2525bb","block_type":"box","text":"their operations in, the PRC may require the Funds to adopt special procedures, seek local","page_number":148,"box":{"x":116,"y":289,"width":680,"height":12}},{"id":"60ac0087-47e9-4fb3-8de9-d56d5ef1f511","block_type":"box","text":"government approvals or take other actions, each of which may involve additional costs and delays to","page_number":148,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"c9c3f88a-cae6-4cfc-ac90-2154210c4e08","block_type":"box","text":"the Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and","page_number":148,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"15261608-d972-43fa-8efe-4370ae5281ac","block_type":"box","text":"RMB, as well as in connection with conversions between the two separate types of RMB, the onshore","page_number":148,"box":{"x":117,"y":335,"width":758,"height":12}},{"id":"e60eb4a6-f71a-4fd8-953a-2778b665ca5d","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":148,"box":{"x":117,"y":351,"width":340,"height":12}},{"id":"ad8bb03c-4f79-4415-8252-85fd6a3a5039","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their","page_number":148,"box":{"x":117,"y":382,"width":727,"height":12}},{"id":"6233ed33-eb62-4df1-a428-4f0f10e19d00","block_type":"box","text":"structure as a result of foreign ownership restrictions. In a VIE structure, a Chinese operating company","page_number":148,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"713de7c0-cd56-4752-a5b7-11f2c9f20edf","block_type":"box","text":"establishes a shell company in another jurisdiction to issue stock to public shareholders. When a VIE","page_number":148,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"3a4752a1-00b5-4cea-916f-c2d0cac22c42","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":148,"box":{"x":116,"y":428,"width":715,"height":12}},{"id":"9884bb58-efd3-41e4-bf22-fe91a6914c7c","block_type":"box","text":"securities of the Chinese company, the U.S.-listed shell company directly or indirectly enters into","page_number":148,"box":{"x":116,"y":444,"width":721,"height":12}},{"id":"789d0b25-fdf8-4cf2-815c-20093a7b4261","block_type":"box","text":"contracts with the Chinese operating company under Chinese law. These contracts provide the U.S.-","page_number":148,"box":{"x":116,"y":459,"width":749,"height":12}},{"id":"5ce2721f-ae22-4a2b-85db-4af79ae236df","block_type":"box","text":"listed shell company with only economic exposure to the Chinese company and do not represent","page_number":148,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"721e51ed-ca49-4bff-b5c9-fc125c1d4008","block_type":"box","text":"equity ownership in the operating company.","page_number":148,"box":{"x":116,"y":490,"width":329,"height":12}},{"id":"63afe0b4-6e8c-4bfc-83e4-dcac695f6875","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have","page_number":148,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"8589093f-5d8a-4e87-98b8-5bd4fa1c53fd","block_type":"box","text":"not been formally recognized under Chinese law. The Chinese government has provided guidance to","page_number":148,"box":{"x":117,"y":537,"width":754,"height":12}},{"id":"d8fc6c48-e201-4010-a642-9d2aada2dcf9","block_type":"box","text":"and placed restrictions on Chinese-based companies raising capital offshore, including through VIEs.","page_number":148,"box":{"x":116,"y":552,"width":755,"height":12}},{"id":"c3438629-e928-4911-829f-069c48050284","block_type":"box","text":"In 2023, the China Securities Regulatory Commission (“CSRC”) released new rules that permit the use","page_number":148,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"806a5c43-0bf8-42e7-b0ff-ae9b48bcb78f","block_type":"box","text":"of VIE structures, provided they abide by Chinese laws and register with the CSRC. The rules,","page_number":148,"box":{"x":116,"y":583,"width":705,"height":12}},{"id":"b2eb5cd5-d9b8-4e03-a6d6-3e5d925f4963","block_type":"box","text":"however, may cause Chinese companies to undergo greater scrutiny and add costs to VIE structures.","page_number":148,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"df35bf00-b7c8-4b78-ab52-b07229f5eedb","block_type":"box","text":"Intervention, rulemaking or guidance by the Chinese government with respect to VIE structures or the","page_number":148,"box":{"x":117,"y":614,"width":758,"height":12}},{"id":"71cbf04e-2166-46f1-9462-36a94b08a352","block_type":"box","text":"non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":148,"box":{"x":117,"y":630,"width":742,"height":12}},{"id":"dd4119a0-9a41-498b-ac53-967385939f6a","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with","page_number":148,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"53ffa7b3-d76f-4526-9862-6a4d30f12e4e","block_type":"box","text":"the Chinese company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement","page_number":148,"box":{"x":116,"y":661,"width":757,"height":12}},{"id":"a74814d5-9b80-40b6-9541-8dc2abe72e4a","block_type":"box","text":"would likely be subject to Chinese law and jurisdiction, and remedies available to the U.S.-listed shell","page_number":148,"box":{"x":116,"y":676,"width":748,"height":12}},{"id":"39a6065b-ac6a-4708-8c03-386139b00aeb","block_type":"box","text":"company are uncertain and could be ineffective. In addition to the risk of government intervention,","page_number":148,"box":{"x":116,"y":692,"width":724,"height":12}},{"id":"ca9b6536-d34c-47cf-a9fe-65711d3e61f0","block_type":"box","text":"investments through a VIE structure are subject to the risk that the China-based company (or its","page_number":148,"box":{"x":117,"y":707,"width":711,"height":12}},{"id":"284bf86e-1d16-48da-bce2-4a5961370c45","block_type":"box","text":"officers, directors, or Chinese equity owners) may breach those contractual arrangements, or Chinese","page_number":148,"box":{"x":116,"y":723,"width":757,"height":12}},{"id":"0bddfcd6-3657-4253-9ba7-e5dd85548087","block_type":"box","text":"law changes in a way that adversely affects the enforceability of these arrangements, or those","page_number":148,"box":{"x":117,"y":738,"width":697,"height":12}},{"id":"7aef72d8-fc9d-4d69-a697-bba1232abd27","block_type":"box","text":"contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer","page_number":148,"box":{"x":116,"y":754,"width":703,"height":12}},{"id":"794c3dfb-dd69-4a20-9fe5-bdbbfeca223a","block_type":"box","text":"significant losses on its investments through a VIE structure with little or no recourse available. Any","page_number":148,"box":{"x":116,"y":769,"width":736,"height":12}},{"id":"1d187adf-ba0c-49ec-b3ed-98e0a2ad074e","block_type":"box","text":"change in the operations of entities in a VIE structure, the status of VIE contractual arrangements or","page_number":148,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"e53fc3f6-be33-4038-8161-cb53243677ab","block_type":"box","text":"the legal or regulatory environment in China, generally or with respect to specific industries, could","page_number":148,"box":{"x":116,"y":800,"width":723,"height":12}},{"id":"c8fa10fe-3a78-42d9-bdb5-7466f4ef6e9a","block_type":"box","text":"result in significant, and possibly permanent and/or total, losses to a Fund.","page_number":148,"box":{"x":117,"y":816,"width":550,"height":12}},{"id":"da4b6447-2f2a-4790-98f0-14641364e63d","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that","page_number":148,"box":{"x":116,"y":847,"width":758,"height":12}},{"id":"22e0e8ad-b7de-4bbb-b229-96ae72e5cb7c","block_type":"box","text":"such growth rates will recur. Other economic challenges for China include indebtedness, weak","page_number":148,"box":{"x":116,"y":862,"width":706,"height":12}},{"id":"e80cdfe4-ba96-43b7-98a8-fb304359c590","block_type":"box","text":"consumer demand, trade tensions, and an aging population. China continues to face pressure from its","page_number":148,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"d813fadd-7bb1-4fbe-9648-79a346694660","block_type":"box","text":"II-54","page_number":148,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ff017884-3dfa-4a9e-b091-b6a2f1820c9b","block_type":"box","text":"NM1026U-6004408-148/267","page_number":148,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1ee62aa1-75fe-4b4c-abd9-ea0e93797d57","block_type":"box","text":"trading partners over its exporting of its excess industrial capacity and overall approach to economic","page_number":149,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"3e5d004b-d380-4d12-b568-15520af32ede","block_type":"box","text":"management. China’s economy is heavily dependent on export growth. Reduction in spending on","page_number":149,"box":{"x":117,"y":102,"width":727,"height":13}},{"id":"02cb38a2-e627-48e6-ae6c-4f8b369bd950","block_type":"box","text":"Chinese products and services, supply chain diversification, institution of additional tariffs, sanctions or","page_number":149,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"7bcba0a7-affa-45a8-ac0d-fba773600173","block_type":"box","text":"other trade barriers (including as a result of heightened trade tensions between China and the United","page_number":149,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"49deda85-af3b-4a54-9320-8aaf73bf0efb","block_type":"box","text":"States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":149,"box":{"x":116,"y":149,"width":688,"height":12}},{"id":"f005286d-8026-449f-8576-78a9742d2c2d","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and","page_number":149,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"ae042843-e033-4d00-bb00-37efe2f439be","block_type":"box","text":"the companies in which a Fund invests. Certain Chinese companies (which may change from time to","page_number":149,"box":{"x":116,"y":180,"width":753,"height":12}},{"id":"9e4a8689-792a-47dd-baeb-2a03f7adc07b","block_type":"box","text":"time) are directly or indirectly subject to economic or trade restrictions imposed by the U.S. or other","page_number":149,"box":{"x":116,"y":196,"width":741,"height":12}},{"id":"fdf5e558-63b0-408f-b9dc-b88c9eafb813","block_type":"box","text":"governments due to national security, human rights or other concerns of such government. For","page_number":149,"box":{"x":116,"y":211,"width":709,"height":12}},{"id":"0695d61b-5299-4692-9b95-127e1d6c8cc2","block_type":"box","text":"example, certain foreign technology companies are subject to U.S. export controls as those companies","page_number":149,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"f4cf3997-0555-4a29-9332-46d1cf79e4d8","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":149,"box":{"x":116,"y":242,"width":755,"height":12}},{"id":"88b44277-f542-4b11-9258-d9401c97524b","block_type":"box","text":"regions of China or by certain Chinese companies due to concerns about forced labor. Such","page_number":149,"box":{"x":117,"y":258,"width":688,"height":12}},{"id":"3d2b5fb9-6053-4e21-a965-f57cff133620","block_type":"box","text":"restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any","page_number":149,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"926267aa-2101-4494-bd89-6445789b1ded","block_type":"box","text":"action that targets Chinese financial markets or securities exchanges could interfere with orderly","page_number":149,"box":{"x":116,"y":289,"width":719,"height":12}},{"id":"4b02cc17-8eb2-42d0-b85d-b0f446b2e4d5","block_type":"box","text":"trading, delay settlement or cause market disruptions. Certain companies may be subject to economic","page_number":149,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"9b9e4dc0-69b9-46c2-87bd-76e7ce883481","block_type":"box","text":"or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to","page_number":149,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"0acf186c-ed64-48a3-92bb-5a8c7d6c8da8","block_type":"box","text":"national security, human rights or other concerns of such government. So long as these restrictions do","page_number":149,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"46413891-27e4-4e92-a80c-5ad40977dfda","block_type":"box","text":"not include restrictions on investments, the Fund may invest in such companies.","page_number":149,"box":{"x":117,"y":351,"width":599,"height":12}},{"id":"6b788589-6d63-4d5a-8a65-9d824fa50588","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative","page_number":149,"box":{"x":116,"y":383,"width":760,"height":12}},{"id":"d215fe6e-aa39-45d4-85b7-7cc6040c0123","block_type":"box","text":"guidance or enforcement, possibly with retroactive effect. The interpretation, applicability and","page_number":149,"box":{"x":116,"y":399,"width":695,"height":12}},{"id":"395c55ca-d9e7-4c77-9b46-0c8496d4afd1","block_type":"box","text":"enforcement of such laws by PRC tax authorities are not as consistent and transparent as those of","page_number":149,"box":{"x":116,"y":414,"width":737,"height":12}},{"id":"1a282f28-e44c-4602-a719-9c56ee98dcd8","block_type":"box","text":"more developed nations, and may vary over time and from region to region. The application and","page_number":149,"box":{"x":117,"y":430,"width":716,"height":12}},{"id":"daa8f1d1-f8ce-4c9b-bfc9-0cc0fa7d12b8","block_type":"box","text":"enforcement of PRC tax rules could have a significant adverse effect on a Fund and its investors,","page_number":149,"box":{"x":116,"y":445,"width":727,"height":12}},{"id":"12d73e8b-9ce1-437f-adc3-0be6d6d5dd99","block_type":"box","text":"particularly in relation to capital gains withholding tax imposed upon non-residents. In addition, the","page_number":149,"box":{"x":117,"y":461,"width":732,"height":12}},{"id":"1afc679f-fe4b-434f-8842-e733586798f3","block_type":"box","text":"accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":149,"box":{"x":116,"y":476,"width":759,"height":12}},{"id":"70e21c73-8e9d-4d41-ac0a-26d3381e4613","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared","page_number":149,"box":{"x":117,"y":492,"width":757,"height":12}},{"id":"357a4733-8407-4362-850f-165a6dc381ca","block_type":"box","text":"in accordance with PRC accounting standards and practice and those prepared in accordance with","page_number":149,"box":{"x":117,"y":507,"width":739,"height":12}},{"id":"60d37bf9-d2e1-46ad-93fc-2da6737f4f54","block_type":"box","text":"international accounting standards.","page_number":149,"box":{"x":117,"y":523,"width":264,"height":12}},{"id":"0d210dd5-66ea-44e8-862b-1e0af23cd10b","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the","page_number":149,"box":{"x":117,"y":555,"width":767,"height":13}},{"id":"e1802695-fa90-4fcd-bf16-3059c430b8af","block_type":"box","text":"country may be subject to other public health threats, infectious illnesses, diseases or similar issues in","page_number":149,"box":{"x":116,"y":571,"width":763,"height":12}},{"id":"9eca409c-bda1-4eeb-8927-4df771bfb885","block_type":"box","text":"the future. Any spread of an infectious illness, public health threat or similar issue could reduce","page_number":149,"box":{"x":116,"y":586,"width":709,"height":13}},{"id":"a8bc563a-3c52-43f4-b44d-c0fc3c15b8e5","block_type":"box","text":"consumer demand or economic output, result in market closures, travel restrictions or quarantines, and","page_number":149,"box":{"x":116,"y":602,"width":770,"height":12}},{"id":"9bc727f1-7a37-458f-a6a4-ec832f9b3ce6","block_type":"box","text":"generally have a significant impact on the Chinese economy, which in turn could adversely affect a","page_number":149,"box":{"x":116,"y":617,"width":738,"height":13}},{"id":"ff50cbb2-8287-4894-a1b0-955caa25a4d0","block_type":"box","text":"Fund’s investments.","page_number":149,"box":{"x":117,"y":633,"width":153,"height":10}},{"id":"f6d19441-2624-47a4-9fed-7f084cb6198c","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":149,"box":{"x":116,"y":666,"width":302,"height":12}},{"id":"7178e6c7-c7e3-4fdd-bf36-a5f7e0177106","block_type":"box","text":"General.","page_number":149,"box":{"x":117,"y":690,"width":62,"height":9}},{"id":"1fb87dc6-21fb-4203-a2a4-741c8e51e339","block_type":"box","text":"China A-shares are equity securities of companies domiciled in China that trade on Chinese","page_number":149,"box":{"x":186,"y":690,"width":681,"height":12}},{"id":"b03f97b5-fdef-4273-a65f-918ba4e41ba8","block_type":"box","text":"stock exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange","page_number":149,"box":{"x":116,"y":705,"width":718,"height":12}},{"id":"aef94868-d749-4e84-a9a6-a8c628610757","block_type":"box","text":"(“SZSE”) and the Beijing Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the","page_number":149,"box":{"x":117,"y":721,"width":756,"height":12}},{"id":"841da402-d6e4-4589-89d8-0aadb45b1748","block_type":"box","text":"SSE and SZSE is not permitted, other than pursuant to available exceptions, such as through a","page_number":149,"box":{"x":116,"y":736,"width":707,"height":12}},{"id":"cdba2516-25c3-4f6b-9d24-7d047f7d2fcb","block_type":"box","text":"qualified foreign investor approved pursuant to the relevant mainland China laws and regulations as","page_number":149,"box":{"x":116,"y":752,"width":740,"height":12}},{"id":"48bf8ef6-909c-4786-a742-eeef5ae0e678","block_type":"box","text":"may be promulgated and/or amended from time to time (“QFI”).","page_number":149,"box":{"x":117,"y":767,"width":468,"height":12}},{"id":"c0c62eb1-c856-45ba-b80d-2ad15210e677","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE","page_number":149,"box":{"x":117,"y":800,"width":723,"height":12}},{"id":"d418ab24-c72f-46f5-9a17-fb1ec5c8d8a0","block_type":"box","text":"(“Stock Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect","page_number":149,"box":{"x":117,"y":815,"width":706,"height":13}},{"id":"c8176d2e-616f-4882-a884-78f46959a0d1","block_type":"box","text":"program or the Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock Connect”","page_number":149,"box":{"x":117,"y":831,"width":764,"height":12}},{"id":"1df13049-acb0-4920-987c-c7a563624dd8","block_type":"box","text":"and collectively, “Stock Connects”). Each Stock Connect is a securities trading and clearing links","page_number":149,"box":{"x":116,"y":846,"width":722,"height":13}},{"id":"19d21a70-9680-499c-9459-a7e90b9650ea","block_type":"box","text":"program established by The Stock Exchange of Hong Kong Limited (“SEHK”), the Hong Kong","page_number":149,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"efb4bdbe-69c6-4a42-9fdd-9c049c2272cf","block_type":"box","text":"Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China","page_number":149,"box":{"x":116,"y":877,"width":700,"height":13}},{"id":"e5d8d5f1-229a-42cc-9bfb-044ad35fc93b","block_type":"box","text":"II-55","page_number":149,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"72fb5fa2-f51a-4e40-907e-43f477a548aa","block_type":"box","text":"NM1026U-6004408-149/267","page_number":149,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"aecc1f38-d99b-4f2c-aa02-67524ea349c7","block_type":"box","text":"Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":150,"box":{"x":116,"y":87,"width":753,"height":12}},{"id":"5d9ec340-dab2-4cc5-a945-b6f423601cba","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on","page_number":150,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"b14d8a1e-5422-4001-a166-4bb1612f0f29","block_type":"box","text":"each market through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock","page_number":150,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"df3943f9-a790-421a-9033-33013af45c46","block_type":"box","text":"Connect Securities listed on the SSE or SZSE, as applicable, would be effectuated through its Hong","page_number":150,"box":{"x":117,"y":134,"width":747,"height":12}},{"id":"ae8a292a-7e92-4598-bc5f-5105323c270c","block_type":"box","text":"Kong broker and a securities trading service company established by SEHK.","page_number":150,"box":{"x":117,"y":149,"width":572,"height":12}},{"id":"22b406a0-9456-49f1-8c62-359b5af79ffd","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock","page_number":150,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"392b6f6c-237e-4e7a-9223-e69ddd7756f0","block_type":"box","text":"Connect, trading through a Stock Connect’s Northbound Trading Link is subject to daily investment","page_number":150,"box":{"x":117,"y":196,"width":738,"height":12}},{"id":"7444c6bd-b925-4b37-bb8a-c6b22d5a892a","block_type":"box","text":"quota limitations which require that buy orders for Stock Connect Securities be rejected once the daily","page_number":150,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"61345730-d58e-44b4-82ef-3482fede0053","block_type":"box","text":"quota is exceeded (although a Fund will be permitted to sell their Stock Connect Securities regardless","page_number":150,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"9c8c6983-f632-4835-859b-10499c987895","block_type":"box","text":"of the quota). These limitations may restrict a Fund from investing in Stock Connect Securities on a","page_number":150,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"8ec600d2-3016-4597-a931-68c02762dfc5","block_type":"box","text":"timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.","page_number":150,"box":{"x":116,"y":258,"width":698,"height":12}},{"id":"9b4a31a7-dccd-4b04-9475-64fd61e121de","block_type":"box","text":"Investment quotas are also subject to change. Investment in Stock Connect Securities through a Stock","page_number":150,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"aeb62795-a007-43d9-aa65-ebbe4de924e6","block_type":"box","text":"Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund.","page_number":150,"box":{"x":117,"y":289,"width":741,"height":12}},{"id":"c1f759ab-e21d-4433-8c92-2295bcf42b13","block_type":"box","text":"Stock Connect Securities purchased through Stock Connects generally may not be sold or otherwise","page_number":150,"box":{"x":116,"y":304,"width":753,"height":12}},{"id":"09a08570-ff12-4a3f-ae08-41316a54a83d","block_type":"box","text":"transferred other than through Stock Connects in accordance with applicable rules. For example, the","page_number":150,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"f442a42e-95a8-4af2-8f94-96bdff23c912","block_type":"box","text":"PRC regulations require that in order for an investor to sell any Stock Connect Securities on a certain","page_number":150,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"27b0cccb-a177-4b1d-80dc-7cdf6eae3014","block_type":"box","text":"trading day, there must be sufficient Stock Connect Securities in the investor’s account before the","page_number":150,"box":{"x":116,"y":351,"width":730,"height":12}},{"id":"2e0b7bd7-7a9f-4e61-909f-368797d45887","block_type":"box","text":"market opens on that day. If there are insufficient Stock Connect Securities in the investor’s account,","page_number":150,"box":{"x":117,"y":366,"width":751,"height":12}},{"id":"aac9feed-e8c1-41da-bb43-c0b8b349f668","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":150,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"7c0611ca-05bf-428c-98d7-365755a88611","block_type":"box","text":"on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE","page_number":150,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"b7e0eda1-282c-48d5-bc4f-c7e28f7e1688","block_type":"box","text":"Securities”) of its participants (","page_number":150,"box":{"x":116,"y":413,"width":226,"height":12}},{"id":"66bce5f2-5d06-456f-9319-567bafaa792c","block_type":"box","text":"i.e.","page_number":150,"box":{"x":343,"y":413,"width":20,"height":9}},{"id":"8f0ac6fc-51fe-4b65-b377-8c9df4620d19","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While","page_number":150,"box":{"x":366,"y":413,"width":486,"height":12}},{"id":"e13123ca-f1b6-455d-9472-a162b9dcd861","block_type":"box","text":"shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose","page_number":150,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"5af1236c-4371-40ee-88a2-1564d5ebbe2f","block_type":"box","text":"such designation, and if this occurs, such shares may be sold but cannot be purchased through a","page_number":150,"box":{"x":116,"y":444,"width":728,"height":12}},{"id":"7df87e69-a3e7-44c4-84d6-b6ea444f7567","block_type":"box","text":"Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong","page_number":150,"box":{"x":116,"y":459,"width":771,"height":12}},{"id":"13c1ca16-cc2e-49a6-877a-22597897fdbb","block_type":"box","text":"Kong markets are open for trading, and banking services are available in both markets on the","page_number":150,"box":{"x":117,"y":475,"width":698,"height":12}},{"id":"4bf0a569-4e5d-4734-b009-461fd53c23c3","block_type":"box","text":"corresponding settlement days. Therefore, an investment in Stock Connect Securities through a Stock","page_number":150,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"7888a682-dd7d-46d4-94e5-b48398e92b80","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":150,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"ff71dd32-aa49-4b98-afea-67e8a346aae9","block_type":"box","text":"but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the Stock","page_number":150,"box":{"x":117,"y":521,"width":745,"height":12}},{"id":"a3840921-469d-4c2e-937f-6d27500eeb4c","block_type":"box","text":"Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will","page_number":150,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"e981cb94-92a1-4bcd-bcd9-0d641a53bd0e","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":150,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"c6442277-9fdc-47c4-9c54-215f3710134f","block_type":"box","text":"Connect Securities must be settled in RMB, investors must have timely access to a reliable supply of","page_number":150,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"557dd849-693b-4f95-9841-f4ce69a09e47","block_type":"box","text":"offshore RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to","page_number":150,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"bd862543-224a-4400-8d47-476e848dfad8","block_type":"box","text":"devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If a Fund holds a","page_number":150,"box":{"x":116,"y":599,"width":746,"height":12}},{"id":"b4167dbc-c0cf-43e3-a1f8-3efc12b9062b","block_type":"box","text":"class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency","page_number":150,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"00e81039-3bb3-4491-8398-4f93da054ce8","block_type":"box","text":"exchange risk if the Fund converts the local currency into RMB for investments in Stock Connect","page_number":150,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"99eb472a-9f61-464c-9bea-601d98a553db","block_type":"box","text":"Securities. A Fund may also incur conversion costs.","page_number":150,"box":{"x":116,"y":645,"width":390,"height":12}},{"id":"fcfcaca9-e4f3-4e61-a147-fdf340e538b5","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held","page_number":150,"box":{"x":116,"y":676,"width":716,"height":12}},{"id":"1c7cf7f2-27f7-4c0d-9817-8f5bb21afa0c","block_type":"box","text":"through HKSCC as nominee on behalf of investors. The precise nature and rights of a Fund as the","page_number":150,"box":{"x":116,"y":692,"width":731,"height":12}},{"id":"da4f45cc-7660-4560-8d53-277d6c9fa7cd","block_type":"box","text":"beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well","page_number":150,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"f8411a0b-8785-484c-abe7-c195e97ed503","block_type":"box","text":"defined under the PRC laws. There is a lack of a clear definition of, and distinction between, legal","page_number":150,"box":{"x":116,"y":723,"width":722,"height":12}},{"id":"14313a10-6a49-43bd-958f-08b73818023e","block_type":"box","text":"ownership and beneficial ownership under the PRC laws and there have been few cases involving a","page_number":150,"box":{"x":116,"y":738,"width":742,"height":12}},{"id":"61fb026c-4004-4c29-87f4-b58f2aee8043","block_type":"box","text":"nominee account structure in the PRC courts. The exact nature and methods of enforcement of the","page_number":150,"box":{"x":117,"y":754,"width":735,"height":9}},{"id":"a45038ec-3147-4256-88cb-0623e9aead43","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":150,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"1a5fa5e0-94b0-490d-b18c-fd6444747950","block_type":"box","text":"becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or","page_number":150,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"75216ab7-d36f-4e01-9019-98179260f77e","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":150,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"723eda87-3e9b-4231-9fc3-662964ce8b23","block_type":"box","text":"general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that","page_number":150,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"66387046-492a-44b0-976e-cf05b2f0cc30","block_type":"box","text":"HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its","page_number":150,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"3077b8ab-c430-4225-af1f-14365c9694dd","block_type":"box","text":"omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed","page_number":150,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"7ba0b07c-7232-49a1-8683-b315e56138f3","block_type":"box","text":"companies will still treat HKSCC as one of the shareholders when it handles corporate actions in","page_number":150,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"c803a2df-1c7c-401f-bcdd-a905b05f573c","block_type":"box","text":"respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting","page_number":150,"box":{"x":117,"y":878,"width":749,"height":12}},{"id":"bc3ca6be-ae5c-4954-afc7-ea5a6163b6c1","block_type":"box","text":"II-56","page_number":150,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0aebdd5d-1656-42ac-a9e3-eda6b1096213","block_type":"box","text":"NM1026U-6004408-150/267","page_number":150,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"17ccfe19-341c-4ed3-a50f-efd4bf8b24a8","block_type":"box","text":"SSE Securities and SZSE Securities and keeps participants of Central Clearing and Settlement","page_number":151,"box":{"x":116,"y":87,"width":712,"height":12}},{"id":"b55092a5-27bd-4749-a8ef-e0ff848ddb40","block_type":"box","text":"System (“CCASS”) informed of all such corporate actions that require CCASS participants to take","page_number":151,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"d6ed35d2-abca-4863-a4fc-492dbd20f5e2","block_type":"box","text":"steps in order to participate in them. Investors may only exercise their voting rights by providing their","page_number":151,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"88b16777-f055-4e2f-bb2a-3a1f730c6af2","block_type":"box","text":"voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS","page_number":151,"box":{"x":116,"y":134,"width":724,"height":12}},{"id":"d26923fd-f829-4988-8693-1e4db398e58f","block_type":"box","text":"participants will be consolidated by HKSCC, who will then submit a combined single voting instruction","page_number":151,"box":{"x":117,"y":149,"width":757,"height":12}},{"id":"3809b1eb-fd0f-4902-afb9-28679d5ee787","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":151,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"34beddf2-5354-4472-bdaa-0e3e352ac3ce","block_type":"box","text":"enforcing its rights in SSE Securities or SZSE Securities.","page_number":151,"box":{"x":116,"y":180,"width":427,"height":12}},{"id":"de082e09-59f3-4afc-95e2-c4edc80ca271","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any","page_number":151,"box":{"x":117,"y":211,"width":728,"height":12}},{"id":"f8add21a-0cd7-492f-bbaf-d3035277e4d1","block_type":"box","text":"nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized","page_number":151,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"062b3efe-dc58-456d-9123-aeed76cdbe3b","block_type":"box","text":"financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or","page_number":151,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"4ec132aa-9431-49e8-b986-a7079c24cd7b","block_type":"box","text":"after January 1, 2020, Hong Kong’s Investor Compensation Fund covers investors’ losses in relation to","page_number":151,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"d03f9f5d-8aaa-4961-bdc2-667faf3661ee","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":151,"box":{"x":116,"y":273,"width":743,"height":12}},{"id":"7c09d9e9-fecb-4327-8bac-b28d3d519610","block_type":"box","text":"purchase is permitted to be routed through the Northbound Trading Link of a Stock Connect. On the","page_number":151,"box":{"x":117,"y":289,"width":746,"height":12}},{"id":"c17d586d-2c3d-4f81-a3e5-52a0ae934f87","block_type":"box","text":"other hand, since a Fund carries out Northbound trading through securities brokers in Hong Kong but","page_number":151,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"22d7c8b4-e3ea-446e-89ac-9a305989c8f7","block_type":"box","text":"not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the PRC.","page_number":151,"box":{"x":117,"y":320,"width":722,"height":12}},{"id":"7b50177a-b9f3-447e-bfd8-93f412154fd1","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information","page_number":151,"box":{"x":117,"y":351,"width":737,"height":12}},{"id":"82de3a9f-e125-4e68-b3f0-0d39c9efa233","block_type":"box","text":"technology capability, risk management and other requirements as may be specified by the relevant","page_number":151,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"1ad3751f-32ab-4051-97fd-ed4c1775d6af","block_type":"box","text":"exchange and/or clearing house. Further, the “connectivity” in Stock Connects requires routing of","page_number":151,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"627e4797-6dba-4303-a0be-b0b8ac622df5","block_type":"box","text":"orders across the border of Hong Kong and the PRC. This requires the development of new","page_number":151,"box":{"x":116,"y":397,"width":687,"height":12}},{"id":"638d6d0e-5578-456b-8fcf-4bdc759cad2c","block_type":"box","text":"information technology systems on the part of SEHK and exchange participants. There is no assurance","page_number":151,"box":{"x":117,"y":413,"width":771,"height":12}},{"id":"7d09fe43-5493-4790-b7e9-036fe31fcf76","block_type":"box","text":"that the systems of SEHK and market participants will function properly or will continue to be adapted","page_number":151,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"ccbdfa43-9303-4efd-b081-52d30dfba455","block_type":"box","text":"to changes and developments in both markets. In the event that the relevant systems fail to function","page_number":151,"box":{"x":116,"y":444,"width":747,"height":12}},{"id":"1905968c-98fb-4c6e-ba35-dcd0c8260c66","block_type":"box","text":"properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":151,"box":{"x":117,"y":459,"width":667,"height":12}},{"id":"593aef16-3711-418d-a50e-e933488e3597","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen","page_number":151,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"c8543e5a-04ed-41b7-940e-388a52dbdfbb","block_type":"box","text":"Hong Kong Stock Connect program launched in December 2016. Each program does not have an","page_number":151,"box":{"x":117,"y":506,"width":733,"height":12}},{"id":"91213b4e-3215-4c6d-ac1e-77375b550951","block_type":"box","text":"extensive operating history. New or revised regulations may be issued from time to time by the","page_number":151,"box":{"x":116,"y":521,"width":707,"height":12}},{"id":"9642ccf6-0316-4276-8504-994500b27e7f","block_type":"box","text":"regulators and stock exchanges in China and Hong Kong in connection with operations, legal","page_number":151,"box":{"x":117,"y":537,"width":695,"height":12}},{"id":"a351bf3d-8e0c-46c3-b938-1b623e72f4ae","block_type":"box","text":"enforcement and cross-border trades under Stock Connects. In addition, there can be no assurance","page_number":151,"box":{"x":116,"y":552,"width":748,"height":11}},{"id":"c766c748-4630-498b-92ac-575cd2eeb9c4","block_type":"box","text":"that Stock Connect will not be discontinued. A Fund may be adversely affected as a result of such","page_number":151,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"552e15d5-55e8-4bfd-8818-6af8963a5b13","block_type":"box","text":"changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":151,"box":{"x":116,"y":583,"width":714,"height":12}},{"id":"85242bbc-2b6d-4ca4-a118-71bc6ddbcdc7","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the","page_number":151,"box":{"x":116,"y":599,"width":727,"height":12}},{"id":"e00d8d24-6d5d-4557-afba-3e035ff59996","block_type":"box","text":"relevant systems fail to function properly, trading in both markets through Stock Connects could be","page_number":151,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"f0c453f3-13fe-47b1-b6cf-e28213cc9b35","block_type":"box","text":"disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In","page_number":151,"box":{"x":116,"y":630,"width":708,"height":12}},{"id":"7b84a3ec-a406-4841-b1a0-ff36fe300e9f","block_type":"box","text":"addition, a Fund’s investments in Stock Connect Securities through Stock Connects are generally","page_number":151,"box":{"x":116,"y":645,"width":728,"height":12}},{"id":"6e7cbfe4-221e-4f67-ba3c-bbac98ce0ec8","block_type":"box","text":"subject to Chinese securities regulations and listing rules, among other restrictions. Further, different","page_number":151,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"8d552d81-6ba7-4831-9f9c-21d2203b22e7","block_type":"box","text":"fees, costs and taxes are imposed on foreign investors acquiring Stock Connect Securities through","page_number":151,"box":{"x":116,"y":676,"width":733,"height":12}},{"id":"e5468541-5189-449d-865f-890fcdebe69d","block_type":"box","text":"Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":151,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"314cf62e-2e6e-4a07-bd74-70aeca34f181","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":151,"box":{"x":116,"y":707,"width":618,"height":12}},{"id":"4a3b37c1-3f6f-4dab-ba6b-264bb9e97c77","block_type":"box","text":"Suspension Risk.","page_number":151,"box":{"x":117,"y":738,"width":127,"height":12}},{"id":"eec4c922-fc30-411d-be9b-58a78feb90d2","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at","page_number":151,"box":{"x":251,"y":738,"width":620,"height":12}},{"id":"3aa7cb22-6ca7-4db7-b9e3-03788a1486c9","block_type":"box","text":"times when the relevant SSE Securities and SZSE Securities may be sold or purchased on the","page_number":151,"box":{"x":116,"y":754,"width":704,"height":12}},{"id":"c4a9376a-5aae-4c68-acdf-d8eeea727e6a","block_type":"box","text":"relevant Chinese stock exchange. The SSE Securities and SZSE Securities markets have a higher","page_number":151,"box":{"x":117,"y":769,"width":733,"height":12}},{"id":"b9418645-54ca-4487-a98a-921d7f250abf","block_type":"box","text":"propensity for trading suspensions than many other global equity markets. Each of the SEHK, SSE and","page_number":151,"box":{"x":117,"y":785,"width":765,"height":12}},{"id":"0f508129-45f8-4a04-ae4c-e5d8d88803dc","block_type":"box","text":"SZSE reserves the right to suspend trading of SSE Securities and SZSE Securities purchased on the","page_number":151,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"daa7ccdd-ae83-4440-889d-b9b1a4081f79","block_type":"box","text":"Stock Connects if necessary for ensuring an orderly and fair market and ensuring that risks are","page_number":151,"box":{"x":116,"y":816,"width":705,"height":12}},{"id":"1dcfa0ad-7e17-42f3-be51-2043fb66ffaa","block_type":"box","text":"managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":151,"box":{"x":117,"y":831,"width":724,"height":12}},{"id":"439ac047-2c1d-4340-aad8-7e658a73571e","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit","page_number":151,"box":{"x":117,"y":847,"width":727,"height":12}},{"id":"fa365e05-82e8-4a68-85af-831cc19e7904","block_type":"box","text":"breakers” and other measures to halt or suspend Northbound trading. Where a suspension in the","page_number":151,"box":{"x":117,"y":862,"width":725,"height":12}},{"id":"977b7e9f-76c5-4883-b8f9-09dc6cd01d02","block_type":"box","text":"Northbound trading through Stock Connect is effected, the Fund’s ability to access the PRC market will","page_number":151,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"1646fab4-f4a3-482a-82c4-81b05c1542a6","block_type":"box","text":"II-57","page_number":151,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"db570c35-b00c-4f53-9937-6f24c7a3dee6","block_type":"box","text":"NM1026U-6004408-151/267","page_number":151,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ccbf54c2-f583-4dd3-bc2b-a3363eebbb68","block_type":"box","text":"be adversely affected. Trading suspensions in certain stocks could lead to greater market execution","page_number":152,"box":{"x":117,"y":87,"width":745,"height":12}},{"id":"2f9794d0-c842-47be-adc2-91f6da584030","block_type":"box","text":"risk and costs for a Fund. The SSE and SZSE currently","page_number":152,"box":{"x":117,"y":102,"width":415,"height":13}},{"id":"429f5b29-b307-4910-9712-cc9cb1f64bdb","block_type":"box","text":"apply a daily price limit, generally set at 10%,","page_number":152,"box":{"x":533,"y":102,"width":340,"height":13}},{"id":"7b1421ac-8ab3-4dd2-bc8b-a929519a21a3","block_type":"box","text":"of the amount of fluctuation permitted in the prices of the relevant SSE Securities and SZSE Securities","page_number":152,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"dc6a43a0-b901-4d05-8451-9c0971055a5c","block_type":"box","text":"during a single trading day. The daily price limit refers to price movements only and does not restrict","page_number":152,"box":{"x":116,"y":134,"width":747,"height":12}},{"id":"e71796eb-37d1-4e0b-8d4a-215a644965f7","block_type":"box","text":"trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":152,"box":{"x":116,"y":149,"width":744,"height":12}},{"id":"5bfbda1a-571a-4c4c-9249-feec8c2b2997","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":152,"box":{"x":116,"y":165,"width":598,"height":12}},{"id":"d43aa5bf-9170-41ba-8656-c9bfddf6bfac","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":152,"box":{"x":116,"y":192,"width":575,"height":12}},{"id":"3c20e2df-4cc0-4201-8300-a91739afea96","block_type":"box","text":"A Fund may invest","page_number":152,"box":{"x":691,"y":192,"width":144,"height":12}},{"id":"c773ed4e-b882-4981-a205-5bad83839441","block_type":"box","text":"directly in the domestic bond market in the PRC (the “China Interbank Bond Market”) through the","page_number":152,"box":{"x":116,"y":207,"width":724,"height":12}},{"id":"840808fd-21ff-421e-a0db-a8d6dc97c3eb","block_type":"box","text":"northbound trading of Bond Connect (“Bond Connect”). Bond Connect is an initiative launched in July","page_number":152,"box":{"x":117,"y":223,"width":755,"height":12}},{"id":"c8a7fb9b-80c6-4053-8574-6aafd5ee0a14","block_type":"box","text":"2017 for mutual bond market access between the PRC and Hong Kong, established by the China","page_number":152,"box":{"x":116,"y":238,"width":729,"height":12}},{"id":"4df205dc-ffa5-4da0-9552-3c27b1ed293d","block_type":"box","text":"Foreign Exchange Trade System & National Interbank Funding Centre (“CFETS”), China Central","page_number":152,"box":{"x":117,"y":254,"width":722,"height":12}},{"id":"887e7487-453e-4dac-92ce-abac8de4da72","block_type":"box","text":"Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”), Hong Kong Exchanges","page_number":152,"box":{"x":117,"y":269,"width":752,"height":12}},{"id":"cea1362a-d0f0-475d-aeb1-02e038daf28a","block_type":"box","text":"and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":152,"box":{"x":116,"y":285,"width":699,"height":12}},{"id":"5a17f48c-ebe7-4752-8b4a-f223f1f18175","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the","page_number":152,"box":{"x":117,"y":300,"width":738,"height":12}},{"id":"7d9a0e6a-47a1-4f79-8482-9ee6112ddac3","block_type":"box","text":"China Interbank Bond Market through Bond Connect. Eligible foreign investors may submit trade","page_number":152,"box":{"x":117,"y":316,"width":721,"height":12}},{"id":"963d797d-20b0-4aac-891e-b5ff072216e7","block_type":"box","text":"requests for bonds circulated in the China Interbank Bond Market through offshore electronic bond","page_number":152,"box":{"x":117,"y":331,"width":735,"height":12}},{"id":"9f8e045b-b370-40eb-a489-27722f833855","block_type":"box","text":"trading platforms (such as Tradeweb), which will in turn transmit their requests for quotation to CFETS.","page_number":152,"box":{"x":116,"y":347,"width":768,"height":12}},{"id":"a411b7a8-aeb0-41ae-acbb-c380ce68f38f","block_type":"box","text":"CFETS will send the requests for quotation to a number of approved onshore dealers (including market","page_number":152,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"0a3db778-d368-4577-a24d-e9fd670dd629","block_type":"box","text":"makers and others engaged in the market making business) in the PRC. The approved onshore","page_number":152,"box":{"x":117,"y":378,"width":715,"height":12}},{"id":"eebbb8e3-4af0-4d2e-9824-a5fb0ecff60a","block_type":"box","text":"dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their responses to","page_number":152,"box":{"x":116,"y":393,"width":765,"height":12}},{"id":"a0a06ba9-9152-4a93-9647-2eedd9cb2298","block_type":"box","text":"those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":152,"box":{"x":116,"y":409,"width":759,"height":12}},{"id":"f37e0af2-332b-4385-80da-e197179a4479","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":152,"box":{"x":116,"y":424,"width":603,"height":12}},{"id":"de44c7d6-67a6-4799-bbe9-c445e4843d4d","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect","page_number":152,"box":{"x":116,"y":451,"width":761,"height":12}},{"id":"19909a72-e095-417c-a3a3-11586484d9b2","block_type":"box","text":"will be effected through the settlement and custody link between CMU, as an offshore custody agent,","page_number":152,"box":{"x":116,"y":467,"width":755,"height":12}},{"id":"3a377d7a-a7a5-41a9-a3c0-bcfc7c21bb8e","block_type":"box","text":"and CDCC and SCH, as onshore custodians and clearing institutions in the PRC. Under the settlement","page_number":152,"box":{"x":116,"y":482,"width":768,"height":12}},{"id":"923d35bb-35b4-4158-920c-81ba9887887c","block_type":"box","text":"link, CDCC or SCH will effect gross settlement of confirmed trades onshore and CMU will process","page_number":152,"box":{"x":117,"y":498,"width":730,"height":12}},{"id":"9a0bcb89-9d1b-4e41-9eac-f26002033d37","block_type":"box","text":"bond settlement instructions from CMU members on behalf of eligible foreign investors in accordance","page_number":152,"box":{"x":117,"y":513,"width":757,"height":12}},{"id":"6cd17d82-1f36-43b9-b6cd-1b63990ea2a0","block_type":"box","text":"with its relevant rules. Since the introduction in August 2018 of delivery versus payment (DVP)","page_number":152,"box":{"x":116,"y":529,"width":705,"height":12}},{"id":"4020a091-4da6-44c6-8c86-57a87122bae6","block_type":"box","text":"settlement in respect of Bond Connect, the movement of cash and securities is carried out","page_number":152,"box":{"x":116,"y":544,"width":675,"height":12}},{"id":"2a55ef65-3d65-42d1-98c3-3c4141c9d550","block_type":"box","text":"simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":152,"box":{"x":116,"y":560,"width":743,"height":12}},{"id":"15ad5cc1-d116-49c5-a43b-350a87c2ed60","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee","page_number":152,"box":{"x":116,"y":575,"width":759,"height":12}},{"id":"d12f8da4-e6d4-4fe4-9fd0-6c7b39702d37","block_type":"box","text":"accounts with the onshore custody agent recognized by the People’s Bank of China (","page_number":152,"box":{"x":116,"y":591,"width":631,"height":12}},{"id":"e29eb961-31d2-4241-8a50-33e0fb9cbdb4","block_type":"box","text":"i.e.","page_number":152,"box":{"x":749,"y":591,"width":20,"height":9}},{"id":"e1650479-9feb-451e-8620-235cacf5ae28","block_type":"box","text":", CDCC and","page_number":152,"box":{"x":772,"y":591,"width":94,"height":11}},{"id":"a6e33619-1026-498d-87a6-61822d8b8327","block_type":"box","text":"SCH). All bonds traded by eligible foreign investors through Bond Connect will be registered in the","page_number":152,"box":{"x":116,"y":606,"width":734,"height":12}},{"id":"e5fd54de-87da-46f3-8b17-0e9a4ce20fa9","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":152,"box":{"x":117,"y":622,"width":754,"height":12}},{"id":"45399c1f-f25d-4c70-a3a7-1095db42dfa2","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":152,"box":{"x":116,"y":637,"width":759,"height":12}},{"id":"a968618a-f2ea-48ca-bf97-f2554ce17246","block_type":"box","text":"Bond Connect bonds under its market contracts with clearing participants will be limited to assisting","page_number":152,"box":{"x":117,"y":653,"width":741,"height":12}},{"id":"ce5f0613-92d8-41ba-81e0-582f0b4e41d1","block_type":"box","text":"clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer delay in the","page_number":152,"box":{"x":116,"y":668,"width":753,"height":12}},{"id":"d98c7651-8de8-48ef-83e8-f3df5334e76e","block_type":"box","text":"recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":152,"box":{"x":117,"y":684,"width":739,"height":12}},{"id":"7ce0bb4d-a658-4aad-9627-ee3e5cc7263b","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by","page_number":152,"box":{"x":116,"y":699,"width":733,"height":13}},{"id":"394be7d0-5c16-4393-8a91-fa74bc1ebdd2","block_type":"box","text":"third parties, including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or","page_number":152,"box":{"x":116,"y":715,"width":723,"height":12}},{"id":"fcfa4297-235c-4aa9-9f68-d930d322dd02","block_type":"box","text":"errors on the part of such third parties.","page_number":152,"box":{"x":116,"y":730,"width":284,"height":12}},{"id":"4ecb6094-94f7-473d-befa-e605e2a3c676","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":152,"box":{"x":116,"y":758,"width":715,"height":12}},{"id":"1d3feed6-d6e5-4f4d-9e5f-a3907267f8ba","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":152,"box":{"x":117,"y":773,"width":761,"height":12}},{"id":"470cd373-1841-471f-a3f0-f8a6ac9266b1","block_type":"box","text":"a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law","page_number":152,"box":{"x":116,"y":789,"width":760,"height":12}},{"id":"5b710605-9c94-4a07-9157-c2bed341e59c","block_type":"box","text":"and there have been few cases involving a nominee account structure in the PRC courts. The exact","page_number":152,"box":{"x":116,"y":804,"width":741,"height":12}},{"id":"7958c178-5ada-4bc4-b7c5-d9baa357d9e1","block_type":"box","text":"nature and methods of enforcement of the rights and interests of a Fund under PRC law are also","page_number":152,"box":{"x":117,"y":820,"width":717,"height":12}},{"id":"4c5f731d-4dfb-4a52-a2d8-0dbc4e5ee7d4","block_type":"box","text":"uncertain.","page_number":152,"box":{"x":117,"y":835,"width":77,"height":10}},{"id":"d0254ab2-0b94-40d4-b5f4-2e56947b811a","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China","page_number":152,"box":{"x":117,"y":862,"width":750,"height":12}},{"id":"e2fa7b66-1d65-456f-a316-566c0c688f95","block_type":"box","text":"Interbank Bond Market may result in prices of certain bonds traded on such market fluctuating","page_number":152,"box":{"x":117,"y":878,"width":702,"height":12}},{"id":"7ea45794-d300-4fd5-86e3-7cf5d997da86","block_type":"box","text":"II-58","page_number":152,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"431dff02-b761-48e6-aa60-f8c64600b2dd","block_type":"box","text":"NM1026U-6004408-152/267","page_number":152,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"07163c80-3016-4008-8155-2e04b8fad0e2","block_type":"box","text":"significantly. A Fund investing in such market is therefore subject to liquidity and volatility risks. The","page_number":153,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"942df416-6924-4f90-997f-4f0c26bd3028","block_type":"box","text":"bid-ask spreads of the prices of such securities may be large, and a Fund may therefore incur","page_number":153,"box":{"x":117,"y":102,"width":700,"height":13}},{"id":"2b7c75ab-49ec-432f-804e-c1cbfbb74b12","block_type":"box","text":"significant costs and may suffer losses when selling such investments. The bonds traded in the China","page_number":153,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"c4262f60-8ad8-49e6-adf7-d6e0cd2c8110","block_type":"box","text":"Interbank Bond Market may be difficult or impossible to sell, which may impact a Fund’s ability to","page_number":153,"box":{"x":117,"y":134,"width":722,"height":12}},{"id":"3ae70fca-7423-4aaa-8483-56aeb4726d04","block_type":"box","text":"acquire or dispose of such securities at their expected prices.","page_number":153,"box":{"x":116,"y":149,"width":460,"height":12}},{"id":"4ba672d6-66da-4375-967a-0d2b5098cd08","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks.","page_number":153,"box":{"x":117,"y":177,"width":766,"height":12}},{"id":"8fff4fb0-ca10-48cd-b310-20ca449174eb","block_type":"box","text":"The relevant rules and regulations are subject to change, which may have potential retrospective","page_number":153,"box":{"x":116,"y":193,"width":724,"height":12}},{"id":"c6623965-1a3b-410c-81d7-7d88e4c2353d","block_type":"box","text":"effect, and there can be no assurance that Bond Connect will not be discontinued or abolished.","page_number":153,"box":{"x":116,"y":208,"width":711,"height":11}},{"id":"cf6e0bbb-3a6a-40da-834f-03532c0b0168","block_type":"box","text":"Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and","page_number":153,"box":{"x":117,"y":223,"width":764,"height":13}},{"id":"4a216703-c3fb-4800-8935-564a9b427e6f","block_type":"box","text":"issues may arise based on these differences. In the event that the relevant authorities suspend","page_number":153,"box":{"x":117,"y":239,"width":709,"height":12}},{"id":"44f2252e-36ae-461a-9aa0-4fbdb80c8826","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":153,"box":{"x":116,"y":254,"width":762,"height":13}},{"id":"82427a1b-5390-486c-9372-481790ff7741","block_type":"box","text":"Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability to","page_number":153,"box":{"x":117,"y":270,"width":716,"height":12}},{"id":"970c8120-0a3c-4b8c-80f5-068a7a4ac0d9","block_type":"box","text":"achieve its investment objective will be negatively affected and, after exhausting other trading","page_number":153,"box":{"x":116,"y":285,"width":699,"height":13}},{"id":"324a18f4-bf8a-4123-8d0d-d87a2a8d2092","block_type":"box","text":"alternatives, the Fund may suffer substantial losses as a result. Further, if Bond Connect is not","page_number":153,"box":{"x":116,"y":301,"width":707,"height":12}},{"id":"9fa3f98e-ebd3-47d3-886d-533d67b5f8e9","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":153,"box":{"x":116,"y":316,"width":745,"height":13}},{"id":"a13eb189-d8b5-4331-804f-1a376e1a098e","block_type":"box","text":"manner, which could adversely affect the Fund’s performance.","page_number":153,"box":{"x":117,"y":332,"width":467,"height":12}},{"id":"f312bd49-7ab5-47b5-ba66-a92fb7ac2413","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and","page_number":153,"box":{"x":116,"y":360,"width":687,"height":12}},{"id":"8ca00735-1a6d-4dda-b10e-84b7d5d88003","block_type":"box","text":"operational systems. There is no assurance that such systems will function properly or will continue to","page_number":153,"box":{"x":116,"y":375,"width":761,"height":12}},{"id":"bc8b1d0e-f9a7-4945-8bf3-a5f0e5d046cb","block_type":"box","text":"be adapted to changes and developments in the market. In the event that the relevant systems fail to","page_number":153,"box":{"x":117,"y":391,"width":753,"height":12}},{"id":"3a1ee3aa-0da1-40ad-b32c-8cdaff849d13","block_type":"box","text":"function properly, trading through Bond Connect may be disrupted. A Fund’s ability to trade through","page_number":153,"box":{"x":116,"y":406,"width":744,"height":12}},{"id":"d8a3eab7-995b-45ad-91ca-3ae0ed471c68","block_type":"box","text":"Bond Connect (and hence to pursue its investment strategy) may therefore be adversely affected. In","page_number":153,"box":{"x":117,"y":422,"width":749,"height":12}},{"id":"c658bb63-999c-4fa2-a43c-abe7b038d1f5","block_type":"box","text":"addition, where a Fund invests in the China Interbank Bond Market through Bond Connect, it may be","page_number":153,"box":{"x":116,"y":437,"width":753,"height":12}},{"id":"cb157a59-82bd-4b69-bedf-2f049e48bcf1","block_type":"box","text":"subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":153,"box":{"x":116,"y":453,"width":607,"height":12}},{"id":"63463d09-2cec-40c0-ba1d-b25e481dfb76","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not","page_number":153,"box":{"x":117,"y":481,"width":746,"height":12}},{"id":"ce5b0e43-9d99-4a8c-9417-47e2932a4d22","block_type":"box","text":"freely convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed","page_number":153,"box":{"x":116,"y":496,"width":740,"height":12}},{"id":"dfaeb13f-d9e7-46a5-8d48-457f6465b507","block_type":"box","text":"that investors will have timely access to a reliable supply of RMB.","page_number":153,"box":{"x":116,"y":512,"width":490,"height":12}},{"id":"1c135523-4d38-4652-af94-7d32d72d09f2","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":153,"box":{"x":118,"y":540,"width":317,"height":12}},{"id":"430b38a1-db1a-4d68-9ec0-fa9962faa1ed","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced","page_number":153,"box":{"x":116,"y":561,"width":697,"height":13}},{"id":"03abc6ed-57de-4636-b365-47130fb006c6","block_type":"box","text":"dividends and interests from non-government bonds paid to a non-PRC tax resident enterprise, unless","page_number":153,"box":{"x":116,"y":577,"width":765,"height":12}},{"id":"52917313-72ee-4c6f-9c46-7fa7b37d3ed3","block_type":"box","text":"the rate is reduced under an applicable tax treaty. From a technical perspective, withholding income","page_number":153,"box":{"x":116,"y":593,"width":746,"height":12}},{"id":"0dc1a2ef-96d7-4517-9fb9-1cc2d206bfb9","block_type":"box","text":"tax is also applicable to capital gains realized by foreign investors on the disposal of PRC equity","page_number":153,"box":{"x":116,"y":608,"width":717,"height":12}},{"id":"176d8324-4b41-4d98-903c-17a400ad6439","block_type":"box","text":"interests.","page_number":153,"box":{"x":117,"y":624,"width":72,"height":9}},{"id":"8ff28fc6-c1be-4612-bf23-0cfcb32fb90d","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":153,"box":{"x":116,"y":651,"width":735,"height":12}},{"id":"a74a2491-c5af-411b-9dd7-1fadd0e12e01","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and","page_number":153,"box":{"x":116,"y":679,"width":761,"height":12}},{"id":"07c91f2e-ad9e-46ec-8ffa-3f5f95934778","block_type":"box","text":"the State Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular","page_number":153,"box":{"x":116,"y":695,"width":767,"height":12}},{"id":"d10e53b4-ee38-41c6-9716-dcf0efb52705","block_type":"box","text":"79, which temporarily exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi","page_number":153,"box":{"x":116,"y":710,"width":699,"height":12}},{"id":"51860fee-fcf4-4c2d-9dd3-48012c13c403","block_type":"box","text":"Qualified Foreign Institutional Investors (“RQFIIs”) from tax on capital gains derived from the trading of","page_number":153,"box":{"x":116,"y":726,"width":760,"height":12}},{"id":"866ae1c6-b9a7-4c5d-a574-e4d5f910df3f","block_type":"box","text":"shares and other equity interest investments on or after November 17, 2014. Subsequently, Circulars","page_number":153,"box":{"x":116,"y":741,"width":751,"height":12}},{"id":"39671595-b41c-402d-bffe-113c7f3913cf","block_type":"box","text":"81 and 127 were issued to temporarily exempt tax on capital gains derived from trading of equity","page_number":153,"box":{"x":116,"y":757,"width":716,"height":12}},{"id":"4049e0f7-0fff-4dc2-872a-5103d88c9e11","block_type":"box","text":"securities of companies domiciled in the PRC that trade on Chinese stock exchanges (“A-Shares”)","page_number":153,"box":{"x":116,"y":772,"width":729,"height":12}},{"id":"c33591e9-b67a-4fde-a837-57571ad8b1d9","block_type":"box","text":"through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect","page_number":153,"box":{"x":116,"y":788,"width":764,"height":12}},{"id":"ef18c271-aaa2-4afb-be57-ab7d7a887b37","block_type":"box","text":"program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of","page_number":153,"box":{"x":117,"y":803,"width":746,"height":12}},{"id":"fe035a3f-9c45-439b-b025-e709358b57f3","block_type":"box","text":"the temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax","page_number":153,"box":{"x":116,"y":819,"width":735,"height":12}},{"id":"bed44d38-76ec-4a24-aea3-213ec479e46b","block_type":"box","text":"authorities with or without notice.","page_number":153,"box":{"x":116,"y":834,"width":249,"height":10}},{"id":"b54e85eb-0733-4bae-b86f-b5d9a58273e9","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":153,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"e3d38828-fb32-4c8f-8629-026f987da479","block_type":"box","text":"institutional investors are temporarily exempt from withholding income tax with respect to interest","page_number":153,"box":{"x":117,"y":878,"width":723,"height":12}},{"id":"8a6b29c8-7d22-4dac-90d7-c7dd85260545","block_type":"box","text":"II-59","page_number":153,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5fc89b83-53a4-42c5-9d2e-60637de7180f","block_type":"box","text":"NM1026U-6004408-153/267","page_number":153,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"30f25c62-7812-4a4b-9ab1-a3c4bca3d6d5","block_type":"box","text":"income on bonds derived from the PRC bond market from November 7, 2018 to November 6, 2021.","page_number":154,"box":{"x":117,"y":87,"width":745,"height":11}},{"id":"771bccb1-89be-4cf9-8859-2b10a2479cc8","block_type":"box","text":"On November 22, 2021, the MoF and STA issued Public Notice 34 to extend the temporary exemption","page_number":154,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"11250eac-f138-49fd-9d37-ea526fbe71fe","block_type":"box","text":"from November 7, 2021 to December 31, 2025. On January 15, 2026, it was announced via Public","page_number":154,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"be0ff6cc-34b2-49b9-8660-a2a8fcf6381c","block_type":"box","text":"Notice No. 5 of 2026 that the exemption was extended through December 31, 2027.","page_number":154,"box":{"x":117,"y":134,"width":628,"height":12}},{"id":"fdda67d1-11fa-4a98-ba91-e42eba7fafce","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":154,"box":{"x":118,"y":165,"width":225,"height":12}},{"id":"5066cd93-eff0-4400-a947-45b9934a61f7","block_type":"box","text":"k—From May 1, 2016, VAT applies to certain income derived by the","page_number":154,"box":{"x":342,"y":165,"width":501,"height":12}},{"id":"b02a56a0-b1ab-489f-9c14-60b0c39a131a","block_type":"box","text":"Fund, including PRC sourced interest income on non-government bonds and trading gains.","page_number":154,"box":{"x":117,"y":180,"width":681,"height":12}},{"id":"3e71a24a-5896-4c0b-a300-ee7e41a20de1","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":154,"box":{"x":116,"y":211,"width":735,"height":12}},{"id":"4e068a31-e2b7-4b89-aee0-57c030a7030d","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares","page_number":154,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"dc3e6bb6-74c0-4258-869e-447735bbf23f","block_type":"box","text":"traded on the Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":154,"box":{"x":116,"y":258,"width":699,"height":9}},{"id":"2e0ee7e7-f335-401c-b476-ca48f5b1a336","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":154,"box":{"x":116,"y":289,"width":694,"height":12}},{"id":"124c2288-09bf-423b-abee-894468e41665","block_type":"box","text":"institutional investors are temporarily exempt from VAT with respect to interest income on bonds","page_number":154,"box":{"x":117,"y":304,"width":718,"height":12}},{"id":"5ddbcff7-55c2-4252-8679-ab458f9b7fcd","block_type":"box","text":"derived from the PRC bond market from November 7, 2018 to November 6, 2021. On November 22,","page_number":154,"box":{"x":116,"y":320,"width":750,"height":11}},{"id":"c1e844d8-c05d-46f9-b360-90c68883c00b","block_type":"box","text":"2021, the MoF and STA jointly issued Public Notice 34 to extend the temporary exemption from","page_number":154,"box":{"x":116,"y":335,"width":714,"height":12}},{"id":"9aecc871-c8e9-458b-993e-0bba6ba5ca6f","block_type":"box","text":"November 7, 2021 to December 31, 2025. However, on July 31, 2025, the MoF and STA jointly issued","page_number":154,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"82d9ead8-5d8f-48f8-bf4b-772afa453ce4","block_type":"box","text":"Public Notice No 4 of 2025, stating that VAT will apply with respect to interest income derived from","page_number":154,"box":{"x":117,"y":366,"width":735,"height":12}},{"id":"e28d4363-fa2b-4471-9faa-7f9049891a29","block_type":"box","text":"treasury bonds, local government bonds and financial bonds issued on or after August 8, 2025. It is","page_number":154,"box":{"x":116,"y":382,"width":742,"height":12}},{"id":"23ca2c52-e4ae-4b14-a3c0-422d1b995711","block_type":"box","text":"understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption for","page_number":154,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"b6ee84fa-19a9-4748-ac84-9ee3671e79f5","block_type":"box","text":"foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":154,"box":{"x":116,"y":413,"width":668,"height":12}},{"id":"04e157fb-601e-478f-ae3b-6860647384f3","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement","page_number":154,"box":{"x":116,"y":444,"width":754,"height":12}},{"id":"26b249f4-525e-4644-9e9f-ba231aacf09b","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":154,"box":{"x":117,"y":459,"width":761,"height":12}},{"id":"49940176-b606-4dc0-a490-5d4d9416b611","block_type":"box","text":"PRC tax authorities may withdraw the temporary tax exemptions in the future and seek to collect taxes","page_number":154,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"a15403de-db68-4b57-acd0-69e9fbb24194","block_type":"box","text":"realized on the sale of A-Shares or PRC sourced interest income on non-government bonds received","page_number":154,"box":{"x":117,"y":490,"width":756,"height":12}},{"id":"4eed51dd-a9e7-4aca-8e6a-4d0bd186aa96","block_type":"box","text":"by the Fund without giving any prior notice. If the temporary tax exemptions are withdrawn, any taxes","page_number":154,"box":{"x":117,"y":506,"width":755,"height":12}},{"id":"f8d53a02-1a63-4fd3-8989-8389d65e9a43","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":154,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"0c4e362b-6b45-4c5c-bed3-ff83d18b604e","block_type":"box","text":"its net asset value. As with any net asset value adjustment, investors may be advantaged or","page_number":154,"box":{"x":117,"y":537,"width":687,"height":12}},{"id":"f0b8d6dd-e027-48aa-b418-e2b272d6d048","block_type":"box","text":"disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":154,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"dfba74ab-72bf-4994-b1ba-db28588b8b84","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":154,"box":{"x":116,"y":568,"width":494,"height":12}},{"id":"806fb5d7-cbbf-4404-a815-c8a4e530f664","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from","page_number":154,"box":{"x":117,"y":599,"width":758,"height":12}},{"id":"63f977d2-e5ef-46a7-96ff-efc014b5656b","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":154,"box":{"x":116,"y":614,"width":756,"height":12}},{"id":"fd8f9068-ab9d-47ba-a9f0-aada49975fc6","block_type":"box","text":"as further clarified by the PRC in notifications.","page_number":154,"box":{"x":116,"y":630,"width":345,"height":12}},{"id":"475d9ed0-0f9b-4fc4-9ec9-0ffc573df2cf","block_type":"box","text":"Investment in Other Investment Companies.","page_number":154,"box":{"x":116,"y":661,"width":350,"height":12}},{"id":"c31003d3-8767-4ba6-a644-a67f20a4506d","block_type":"box","text":"Each Fund may, subject to applicable law, invest in","page_number":154,"box":{"x":474,"y":661,"width":378,"height":12}},{"id":"2306cb89-9272-4c33-a932-62fd909163be","block_type":"box","text":"other investment companies (including investment companies managed by BlackRock and its","page_number":154,"box":{"x":116,"y":676,"width":694,"height":12}},{"id":"6bac6862-505e-4c2d-9a5d-f1b48dbdf785","block_type":"box","text":"affiliates), including money market funds and ETFs, which are typically open-end funds or unit","page_number":154,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"21826f29-4963-4e3c-93b2-94677b477d81","block_type":"box","text":"investment trusts listed on a stock exchange. Under Section 12(d)(1)(A) of the Investment Company","page_number":154,"box":{"x":117,"y":707,"width":743,"height":12}},{"id":"d29a2d50-64fe-4727-8a22-6238db457079","block_type":"box","text":"Act, however, a Fund may invest up to 10% of its total assets in securities of other investment","page_number":154,"box":{"x":116,"y":723,"width":696,"height":12}},{"id":"9cdce9bf-2847-474f-b7c8-473651e8ed00","block_type":"box","text":"companies (measured at the time of such investment). In addition, under Section 12(d)(1)(A) of the","page_number":154,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"86b09d3a-2611-4da5-9641-c83d80b2514a","block_type":"box","text":"Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":154,"box":{"x":117,"y":754,"width":698,"height":12}},{"id":"a9b95bc9-6566-42f1-870a-b83ca383088f","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such","page_number":154,"box":{"x":116,"y":769,"width":739,"height":12}},{"id":"6b6943dd-81f6-4447-88b5-8bb0b8a04798","block_type":"box","text":"investment company and a Fund may not invest in another investment company if such investment","page_number":154,"box":{"x":117,"y":785,"width":734,"height":12}},{"id":"7c931ab7-10c3-4cda-8146-ab8671defcda","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":154,"box":{"x":116,"y":800,"width":747,"height":10}},{"id":"a0d71dd9-d1e1-42eb-b52b-e7137987b049","block_type":"box","text":"investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in","page_number":154,"box":{"x":117,"y":816,"width":721,"height":12}},{"id":"09d664c7-32b3-4d11-9b55-1fe6e0740e31","block_type":"box","text":"shares of its Master Portfolio.) In addition to the restrictions on investing in other investment companies","page_number":154,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"5c9fc8fc-5420-402a-890d-d2fc93acff38","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":154,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"2ba4aab8-8a19-4a55-9119-20ab926e4d5e","block_type":"box","text":"a registered closed-end investment company if such investment would cause the Fund and other","page_number":154,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"1b545971-90a6-49a6-b7c6-0a09d6a2ee9c","block_type":"box","text":"BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock","page_number":154,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"d6ac7e70-1c93-49a2-b269-50d8c6d05720","block_type":"box","text":"II-60","page_number":154,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f9fed0f3-f885-4766-9e65-cde373853a77","block_type":"box","text":"NM1026U-6004408-154/267","page_number":154,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4f5657bb-5e33-4d1e-990b-266d55aef901","block_type":"box","text":"of such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company","page_number":155,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"27f368a1-5dff-4c89-a37e-d918afb1f496","block_type":"box","text":"Act, these percentage limitations do not apply to investments in affiliated investment companies,","page_number":155,"box":{"x":116,"y":102,"width":719,"height":13}},{"id":"cf02738c-d973-46dc-92e5-0b4c48e7bec5","block_type":"box","text":"including ETFs, subject to certain conditions. In addition, a Fund may be able to rely on certain rules","page_number":155,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"b7f8fbc2-840a-42fb-9a82-08a2350659bd","block_type":"box","text":"under the Investment Company Act to invest in shares of money market funds or other investment","page_number":155,"box":{"x":117,"y":134,"width":733,"height":12}},{"id":"139bc574-f4e6-4d92-836c-69788bd451d5","block_type":"box","text":"companies beyond the statutory limits noted above, but subject to certain conditions.","page_number":155,"box":{"x":116,"y":149,"width":633,"height":12}},{"id":"a032dd75-33fb-4e25-8e08-a4a0648c37b2","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and","page_number":155,"box":{"x":116,"y":180,"width":723,"height":12}},{"id":"7d29c955-7241-4035-81d3-5b13f5cf9365","block_type":"box","text":"selection risk.","page_number":155,"box":{"x":116,"y":196,"width":106,"height":9}},{"id":"e2cbfdd2-9c8d-4e0d-b8b1-1d2a3b2664fa","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an","page_number":155,"box":{"x":116,"y":227,"width":740,"height":11}},{"id":"027571dd-d601-4a0a-81ac-103902a8a711","block_type":"box","text":"exchange may at times be acquired at market prices representing premiums to their NAVs. In addition,","page_number":155,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"dfa1cbd3-38c6-4089-92c7-2b3911fc37f9","block_type":"box","text":"investment companies held by a Fund that trade on an exchange could trade at a discount from NAV,","page_number":155,"box":{"x":117,"y":258,"width":758,"height":12}},{"id":"3d88b3db-2715-401e-a702-dba244298f05","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":155,"box":{"x":116,"y":273,"width":756,"height":12}},{"id":"07b056e4-ca59-45ce-8be5-0b1f88f7419e","block_type":"box","text":"exchange-traded investment company decreases below the price that the Fund paid for the shares and","page_number":155,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"c5254335-f35b-4281-aca7-b36f1eddc94b","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":155,"box":{"x":116,"y":304,"width":757,"height":12}},{"id":"24694146-de0b-494c-8010-bd59d0e633ff","block_type":"box","text":"than the price at which it purchased the shares, the Fund would experience a loss.","page_number":155,"box":{"x":116,"y":320,"width":617,"height":12}},{"id":"e7a33687-d8f6-4012-b0ac-849ea4cfc3e2","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment","page_number":155,"box":{"x":117,"y":351,"width":698,"height":12}},{"id":"8c76ff0a-1f9e-443c-b995-741ec700858b","block_type":"box","text":"companies, shareholders would bear both their proportionate share of expenses in the Fund and,","page_number":155,"box":{"x":116,"y":366,"width":727,"height":12}},{"id":"534aaff0-edb6-45d1-8237-d2d32bde19f6","block_type":"box","text":"indirectly, the expenses of such investment companies. Such expenses, both at the Fund level and","page_number":155,"box":{"x":117,"y":382,"width":739,"height":12}},{"id":"5a85b274-9e3a-43a4-b082-7d8cbd16681a","block_type":"box","text":"acquired investment company level, would include management and advisory fees, unless such fees","page_number":155,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"8702e324-5246-4833-881b-25b156edcbca","block_type":"box","text":"have been waived by BlackRock. Please see the relevant Fund’s Prospectus to determine whether any","page_number":155,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"df3d55d9-2219-442b-a4a8-1e8d06779934","block_type":"box","text":"such management and advisory fees have been waived by BlackRock. Investments by a Fund in","page_number":155,"box":{"x":116,"y":428,"width":724,"height":12}},{"id":"626ec551-cfb3-4d19-93e0-7cd61b94ec70","block_type":"box","text":"wholly owned investment entities created under the laws of certain countries will not be deemed an","page_number":155,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"e8eebc41-ada2-48d6-a8e4-1cb0c52c524a","block_type":"box","text":"investment in other investment companies. Pursuant to guidance issued by the staff of the","page_number":155,"box":{"x":117,"y":459,"width":674,"height":12}},{"id":"a4531b1c-02b6-462c-8961-7634cf158e58","block_type":"box","text":"Commission, fees and expenses of money market funds used for the investment of cash collateral","page_number":155,"box":{"x":117,"y":475,"width":733,"height":12}},{"id":"b051e20f-3d54-43f3-a2a9-f112a564e43b","block_type":"box","text":"received in connection with loans of Fund securities are not treated as “acquired fund fees and","page_number":155,"box":{"x":117,"y":490,"width":706,"height":12}},{"id":"092a0502-f0c8-4aae-81bf-4f93c71ddbfb","block_type":"box","text":"expenses,” which are fees and expenses charged by other investment companies and pooled","page_number":155,"box":{"x":116,"y":506,"width":701,"height":12}},{"id":"811334ec-9a2e-48df-aeb7-7da5aa2698fb","block_type":"box","text":"investment vehicles in which a Fund invests a portion of its assets.","page_number":155,"box":{"x":117,"y":521,"width":498,"height":12}},{"id":"26652e79-f359-4288-8952-c8d7cb522d0f","block_type":"box","text":"To the extent shares of a Fund are held by another f","page_number":155,"box":{"x":116,"y":552,"width":380,"height":12}},{"id":"955d29dc-b3c4-437a-9fc5-6218cd34606f","block_type":"box","text":"und, the ability of the Fund it","page_number":155,"box":{"x":497,"y":552,"width":205,"height":12}},{"id":"15e6f67f-0983-4fe2-8755-277aa70a2c77","block_type":"box","text":"self to purchase other","page_number":155,"box":{"x":702,"y":552,"width":163,"height":12}},{"id":"d8ccf4bf-9ed4-4e65-91eb-d063ff0aacd8","block_type":"box","text":"funds may be limited. In addition, a fund of funds (","page_number":155,"box":{"x":116,"y":568,"width":363,"height":12}},{"id":"53646684-5a35-4edb-bc70-7ab70b5c65ec","block_type":"box","text":"e.g.","page_number":155,"box":{"x":480,"y":570,"width":25,"height":10}},{"id":"99cdea19-3796-4615-9b5d-afc580ca3032","block_type":"box","text":", an investment company that seeks to meet its","page_number":155,"box":{"x":508,"y":568,"width":347,"height":12}},{"id":"39c1a93e-77cc-44b1-a996-b5396ff26f14","block_type":"box","text":"investment objective by investing significantly in","page_number":155,"box":{"x":117,"y":583,"width":350,"height":12}},{"id":"1a728399-6654-4113-94f6-45cd2c39537a","block_type":"box","text":"other investment companies)","page_number":155,"box":{"x":468,"y":583,"width":215,"height":12}},{"id":"b1827e4a-399e-4576-b07a-cb5352318062","block_type":"box","text":"may be limited in its ability","page_number":155,"box":{"x":684,"y":583,"width":195,"height":12}},{"id":"950133c3-1c0c-46ce-8292-cb0e2b36e2ae","block_type":"box","text":"to purchase underlying funds if such underlying f","page_number":155,"box":{"x":116,"y":599,"width":353,"height":12}},{"id":"721697d1-c0d9-4434-a781-7c99c103381e","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":155,"box":{"x":470,"y":599,"width":364,"height":12}},{"id":"d23ae5ac-72f1-4515-bb88-a2852affba58","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate","page_number":155,"box":{"x":116,"y":630,"width":715,"height":12}},{"id":"7999d661-2099-475f-adc4-dc4d4ca1bf8a","block_type":"box","text":"indirect foreign investment in developing countries, and certain of such countries, such as Thailand,","page_number":155,"box":{"x":117,"y":645,"width":743,"height":12}},{"id":"923a2a4a-95c2-48a8-af20-695e88b7e5de","block_type":"box","text":"South Korea, Chile and Brazil, have specifically authorized such funds. There also are investment","page_number":155,"box":{"x":116,"y":661,"width":725,"height":12}},{"id":"1720cd67-6d50-4bd0-8954-eb7ef5df3391","block_type":"box","text":"opportunities in certain of such countries in pooled vehicles that resemble open-end investment","page_number":155,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"f0c87c3b-fe2a-4df6-96b9-177ebc19eae0","block_type":"box","text":"companies. The restrictions on investments in securities of investment companies set forth above may","page_number":155,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"315ba6cd-8595-4136-bfe4-c6c06c1f9cf2","block_type":"box","text":"limit opportunities for a Fund to invest indirectly in certain developing countries.","page_number":155,"box":{"x":117,"y":707,"width":585,"height":12}},{"id":"a5e5d4e1-ddeb-47bc-a5e2-2ed8d56bc8a4","block_type":"box","text":"Issuer Insolvency Risk.","page_number":155,"box":{"x":116,"y":738,"width":185,"height":12}},{"id":"510c3336-2c14-42db-8ee1-9697fdf60794","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled","page_number":155,"box":{"x":307,"y":738,"width":532,"height":12}},{"id":"3f9f5851-80db-4b73-a7e8-3188c480de56","block_type":"box","text":"issuers involves a high degree of credit and market risk, which may be heightened during an economic","page_number":155,"box":{"x":117,"y":754,"width":761,"height":12}},{"id":"e8d18a11-38a5-418f-8d0c-3e47a06964fa","block_type":"box","text":"downturn or recession. Should an issuer of securities held by a Fund become involved in a bankruptcy","page_number":155,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"ce735904-c38d-43a5-8162-a72fea0fc04a","block_type":"box","text":"proceeding, reorganization or financial restructuring, a wide variety of considerations make an","page_number":155,"box":{"x":117,"y":785,"width":695,"height":12}},{"id":"267eb898-0998-4115-9f6a-b16210d44527","block_type":"box","text":"evaluation of the outcome of the Fund’s exposure to the issuer uncertain.","page_number":155,"box":{"x":116,"y":800,"width":542,"height":12}},{"id":"cbf675ac-3a75-47a7-ac7c-a476d30e86b8","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that","page_number":155,"box":{"x":117,"y":831,"width":769,"height":12}},{"id":"51435c34-1b41-4694-a658-8d05dab12de5","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":155,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"ed8cfed1-35b6-4440-b456-155fdba402bc","block_type":"box","text":"significant uncertainty as to whether the reorganization or restructuring will be completed, and the Fund","page_number":155,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"8ed5dd73-0409-4106-b86a-5a6b142fc825","block_type":"box","text":"may bear certain extraordinary expenses to protect and recover its investment. A Fund will also be","page_number":155,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"06d5dc57-8759-4cb6-9f4f-7b94b727ef45","block_type":"box","text":"II-61","page_number":155,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"ff33155a-047c-4a1a-a579-d75bdc8cf37f","block_type":"box","text":"NM1026U-6004408-155/267","page_number":155,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"44d4983b-0e94-4361-a8e3-6f5c09f257f2","block_type":"box","text":"subject to significant uncertainty as to when and in what manner and for what value the obligations","page_number":156,"box":{"x":116,"y":87,"width":737,"height":12}},{"id":"4d11ff08-04ce-47a1-aaa4-4189f3b29c73","block_type":"box","text":"evidenced by the securities of the issuer held by the Fund will eventually be satisfied.","page_number":156,"box":{"x":116,"y":102,"width":637,"height":13}},{"id":"990d578d-b48f-4d81-9bb0-4d495ce88a24","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer","page_number":156,"box":{"x":117,"y":134,"width":741,"height":12}},{"id":"2c40b99f-12fd-4a6d-bf10-a39f847f7a97","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":156,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"9a825952-8e1c-4d98-a892-4391c92cac35","block_type":"box","text":"connection with such plan of reorganization or restructuring will not have a lower value or income","page_number":156,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"b3fb01e1-2bfd-488f-8a4c-58003cb99035","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":156,"box":{"x":117,"y":180,"width":742,"height":12}},{"id":"06f2cbc5-73bc-457c-b73d-2b434fb4aac4","block_type":"box","text":"rights in any collateral or may have its claims or security interest in any collateral challenged, disallowed","page_number":156,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"6d4e13e6-8cfb-44ed-8023-d9279d78a843","block_type":"box","text":"or subordinated to the claims or security interests of other creditors. In addition, amendments to the U.S.","page_number":156,"box":{"x":116,"y":211,"width":772,"height":12}},{"id":"332a1ac3-9f4e-4ce8-8fb5-e3553f4ede76","block_type":"box","text":"Bankruptcy Code or other relevant laws could alter the expected outcome or introduce greater","page_number":156,"box":{"x":117,"y":227,"width":695,"height":12}},{"id":"347406f2-f836-4116-823b-c486c3e80bf8","block_type":"box","text":"uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":156,"box":{"x":117,"y":242,"width":716,"height":12}},{"id":"ea09fe1b-0af1-4b7f-b18c-12ffbee8d6b9","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be","page_number":156,"box":{"x":117,"y":258,"width":716,"height":12}},{"id":"ee1e0e58-6349-4e73-bdf1-947365f0d96a","block_type":"box","text":"re-characterized or a Fund may receive different securities or other assets, including equity securities.","page_number":156,"box":{"x":117,"y":273,"width":752,"height":12}},{"id":"0743e06f-e510-43a0-b3c2-3b344b1b1a32","block_type":"box","text":"These types of equity securities include, but are not limited to: common stock; preferred stock (including","page_number":156,"box":{"x":116,"y":289,"width":768,"height":12}},{"id":"af616897-6cfb-415b-a3fa-29a92294f61c","block_type":"box","text":"convertible preferred stock); bonds, notes and debentures convertible into common or preferred stock;","page_number":156,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"425b4e9b-345a-4523-8fb6-b6515a9d0be6","block_type":"box","text":"stock purchase warrants and rights; equity interests in trusts; and depositary receipts. Equity securities","page_number":156,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"a25d9ff5-96c9-42d1-8863-a8db4a781f0b","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":156,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"97329255-b460-4c44-ae57-8e436ccee35b","block_type":"box","text":"Holders of equity securities are subject to more risk than holders of debt securities because the status of","page_number":156,"box":{"x":117,"y":351,"width":771,"height":12}},{"id":"7b4b2cb6-6a77-43a5-85f1-3dfad3366d7b","block_type":"box","text":"equity holders is subordinate to debtholders in an issuer’s capital structure. The value of equity","page_number":156,"box":{"x":116,"y":366,"width":701,"height":12}},{"id":"3a1f97cc-df41-429b-b48a-b1e83ad7726a","block_type":"box","text":"securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":156,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"1e0d7c10-6a71-472f-b7af-9bbfc0f863e6","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":156,"box":{"x":116,"y":397,"width":764,"height":12}},{"id":"d2285791-48f3-468b-a30f-7fad41e8edea","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding,","page_number":156,"box":{"x":116,"y":428,"width":681,"height":12}},{"id":"8b98f02d-5c59-4f57-8261-83b21c192c2e","block_type":"box","text":"reorganization or financial restructuring, the Fund may also be subject to additional risks associated with","page_number":156,"box":{"x":117,"y":444,"width":770,"height":12}},{"id":"5a950fca-aa81-48f9-9a14-73c6d87c192e","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":156,"box":{"x":116,"y":459,"width":730,"height":12}},{"id":"6f8b4266-f1ac-47c3-a237-74f1e4de6c6c","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":156,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"9176a4ea-4e57-4a4a-842e-ca42191c2eab","block_type":"box","text":"the issuer. A Fund may receive such interests in loans to the extent permitted by the Investment","page_number":156,"box":{"x":116,"y":490,"width":710,"height":12}},{"id":"3867244c-bb8f-4df5-acb6-8cbce08ebe8f","block_type":"box","text":"Company Act.","page_number":156,"box":{"x":117,"y":506,"width":108,"height":12}},{"id":"e0e4e41a-ff23-404e-b8f2-f34aea6f4cb8","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree","page_number":156,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"1f8171dc-a794-447c-b945-a2c9bf04746a","block_type":"box","text":"of risk than investments in securities of issuers that have not undergone a reorganization or","page_number":156,"box":{"x":116,"y":552,"width":684,"height":12}},{"id":"738dd53f-988b-4106-b3ee-36c07ad47054","block_type":"box","text":"restructuring and may be subject to heavy selling or downward pricing pressure after completion of the","page_number":156,"box":{"x":117,"y":568,"width":765,"height":12}},{"id":"b41caba7-0a41-4570-9253-d3574bbc1c47","block_type":"box","text":"reorganization or restructuring. The post-reorganization/restructuring assets and securities may also be","page_number":156,"box":{"x":117,"y":583,"width":771,"height":12}},{"id":"3090902f-f4fd-404e-b209-2faee6e8ccaf","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":156,"box":{"x":117,"y":599,"width":715,"height":12}},{"id":"b668987a-961f-4c6e-8b51-0d37ad5ffc20","block_type":"box","text":"reorganization or restructuring with respect to securities of the issuer held by a Fund, the Fund also","page_number":156,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"e2355e03-42c4-4d1b-b76d-74282a9a465a","block_type":"box","text":"may be restricted from disposing such securities for a period of time. If a Fund becomes involved in","page_number":156,"box":{"x":117,"y":630,"width":741,"height":12}},{"id":"1ce5fc72-6e95-4efd-b4a4-598ca1414124","block_type":"box","text":"such proceedings, the Fund may have more active participation in the affairs of the issuer than that","page_number":156,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"d5c28244-7ad2-49b0-8c02-722f3ef0f860","block_type":"box","text":"assumed generally by an investor.","page_number":156,"box":{"x":116,"y":661,"width":254,"height":12}},{"id":"9811e8b1-412e-4fc7-8e47-1d35dfe85544","block_type":"box","text":"Lease Obligations.","page_number":156,"box":{"x":116,"y":692,"width":148,"height":12}},{"id":"06e45a0f-b674-46de-806a-20d239c389c4","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase","page_number":156,"box":{"x":270,"y":692,"width":571,"height":12}},{"id":"ce55a7f6-d3e1-40ff-be96-df6ba0259179","block_type":"box","text":"contract, or a conditional sales contract (“lease obligations”). The Manager will monitor the credit","page_number":156,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"01067cfb-35b2-40db-bad9-687a986eaedc","block_type":"box","text":"standing of each borrower and each entity providing credit support and/or a put option relating to lease","page_number":156,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"6b115186-6cfa-4a0f-9a69-97f61b5f358c","block_type":"box","text":"obligations.","page_number":156,"box":{"x":116,"y":738,"width":83,"height":12}},{"id":"e3304be0-7070-4f5d-8f7e-5f2ee9287eed","block_type":"box","text":"Life Settlement Investments.","page_number":156,"box":{"x":116,"y":769,"width":227,"height":10}},{"id":"ab32481e-40d8-47ff-ae62-9a43c2330e9f","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties,","page_number":156,"box":{"x":349,"y":769,"width":514,"height":12}},{"id":"cefc1a89-d3dd-4d0a-bcab-05a3a8f4894d","block_type":"box","text":"such as the Fund, of existing life insurance contracts for more than their cash surrender value but less","page_number":156,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"e6414194-b8e1-4172-8cbd-6ea8f8fe196e","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":156,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"caef4004-cdd2-4d25-839c-d6e5494aa8bb","block_type":"box","text":"policy premiums in return for the expected receipt of the net benefit as the beneficiary under the policy.","page_number":156,"box":{"x":117,"y":816,"width":761,"height":12}},{"id":"40cf4a42-421f-4e66-921d-7fedee205955","block_type":"box","text":"Investments in these contracts involve certain risks, including liquidity risk, credit risk of the insurance","page_number":156,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"8324a8c1-c14d-4884-930f-91436ebbac5b","block_type":"box","text":"company, and inaccurate estimations of life expectancy of the insured individuals (viators). These","page_number":156,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"81a815e9-fe69-4868-8972-91c80049a8da","block_type":"box","text":"policies may be considered illiquid because they are bought and sold in a secondary market through","page_number":156,"box":{"x":117,"y":862,"width":748,"height":12}},{"id":"9c491c85-32dc-4643-a467-615239f35ab3","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":156,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"b097797f-e758-40ff-bb50-4291fb7373d6","block_type":"box","text":"II-62","page_number":156,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"6aaa92a2-c5ee-47e3-b788-8444f84afa9a","block_type":"box","text":"NM1026U-6004408-156/267","page_number":156,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dec8e6e1-c9e7-40d8-add7-56978a21c682","block_type":"box","text":"may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":157,"box":{"x":117,"y":87,"width":708,"height":12}},{"id":"fa09cd73-60c2-4388-9c42-b331a6cdc267","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund","page_number":157,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"7f646d6a-321a-4e03-991f-2c5983f6b061","block_type":"box","text":"may encounter losses on its investments if there is an inaccurate estimation of the life expectancies of","page_number":157,"box":{"x":117,"y":118,"width":761,"height":12}},{"id":"77f8b017-a2d9-448d-ab65-06d96785c365","block_type":"box","text":"viators. A Fund intends to reduce this life expectancy risk by investing only in contracts where the life","page_number":157,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"008263a4-945d-491e-9062-60be7467e5fe","block_type":"box","text":"expectancy was reviewed by an experienced actuary, as well as by diversifying its investments across","page_number":157,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"c0e69e93-1f03-401a-bbfb-75cb46829fc7","block_type":"box","text":"viators of varying ages and medical profiles. In addition, it is unclear whether the income from life","page_number":157,"box":{"x":116,"y":165,"width":725,"height":12}},{"id":"f18ac0fa-ec85-4e29-a69e-24a13f4e82cd","block_type":"box","text":"settlements is qualifying income for purposes of the IRS 90% gross income test a Fund must satisfy","page_number":157,"box":{"x":116,"y":180,"width":746,"height":12}},{"id":"814d27b6-fdb4-49d8-b4d3-7d4f32070778","block_type":"box","text":"each year to qualify as a regulated investment company. A Fund intends to monitor its investments to","page_number":157,"box":{"x":116,"y":196,"width":758,"height":12}},{"id":"20111fee-69f6-48c2-97e0-c39816756c22","block_type":"box","text":"ensure that the Fund remains qualified as a regulated investment company.","page_number":157,"box":{"x":116,"y":211,"width":567,"height":12}},{"id":"ec565c86-1920-45aa-9f14-7efc8f99bf78","block_type":"box","text":"Liquidity Risk Management.","page_number":157,"box":{"x":116,"y":242,"width":221,"height":12}},{"id":"709a6d20-b0e3-4ef1-9b6e-016cc3d9d984","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”)","page_number":157,"box":{"x":338,"y":242,"width":517,"height":12}},{"id":"f6196007-edd6-49da-a74e-bfca057c2dc9","block_type":"box","text":"requires open-end funds, such as the Funds, to adopt a liquidity risk management program and","page_number":157,"box":{"x":117,"y":258,"width":712,"height":12}},{"id":"6c6f3770-d1e9-4757-b03f-3d8929b1faa4","block_type":"box","text":"enhance disclosures regarding fund liquidity. As required by the Liquidity Rule, the Funds have","page_number":157,"box":{"x":116,"y":273,"width":709,"height":12}},{"id":"81772d62-427b-43d2-8c04-6b35fc224704","block_type":"box","text":"implemented a liquidity risk management program (the “Liquidity Program”), and the Boards of","page_number":157,"box":{"x":117,"y":289,"width":704,"height":12}},{"id":"e5023aa6-5182-44e1-8d1e-4676418e4dfe","block_type":"box","text":"Directors of the Funds, including a majority of the independent Directors, have appointed the Manager","page_number":157,"box":{"x":117,"y":304,"width":762,"height":12}},{"id":"9ad85581-89cf-4c61-acc4-caf8b5e26df0","block_type":"box","text":"as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity Program, the","page_number":157,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"a94a0ca9-2437-477f-a83d-d4a917f850a4","block_type":"box","text":"Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":157,"box":{"x":117,"y":335,"width":746,"height":12}},{"id":"a7136d5f-51a2-4441-b63c-6b7bdc530129","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid","page_number":157,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"595ee0d2-f225-4e42-a24f-676c9fcb1643","block_type":"box","text":"investment” or “illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund","page_number":157,"box":{"x":117,"y":366,"width":736,"height":12}},{"id":"56254d3b-ad73-4ff0-a27a-163dbf926b94","block_type":"box","text":"could not meet requests to redeem shares issued by the Fund without significant dilution of the","page_number":157,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"9a0ba33b-a360-475e-aaba-10da8c2d157e","block_type":"box","text":"remaining investors’ interests in the Fund. The liquidity of a Fund’s portfolio investments is determined","page_number":157,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"05a494e6-b6ed-4d2b-9ab6-44e6beb89b3c","block_type":"box","text":"based on relevant market, trading and investment-specific considerations under the Liquidity Program.","page_number":157,"box":{"x":117,"y":413,"width":764,"height":12}},{"id":"95bea0d2-5610-40d9-976c-061af7e8c020","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":157,"box":{"x":116,"y":428,"width":747,"height":12}},{"id":"76c39501-f883-477c-9068-34e8ade7787f","block_type":"box","text":"Fund can expect to be exposed to greater liquidity risk.","page_number":157,"box":{"x":117,"y":444,"width":411,"height":12}},{"id":"9b91969c-7318-4306-a21f-61b640757a69","block_type":"box","text":"Master Limited Partnerships.","page_number":157,"box":{"x":116,"y":475,"width":230,"height":12}},{"id":"96591c86-dfa0-4232-a092-cd211438c8d5","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships","page_number":157,"box":{"x":347,"y":475,"width":538,"height":12}},{"id":"1205ddf9-d9ac-448c-97df-8c09d3d24c01","block_type":"box","text":"(“MLPs”) which are limited partnerships or limited liability companies taxable as partnerships. MLPs","page_number":157,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"a7849641-0ac1-46e9-ab49-d493721e8179","block_type":"box","text":"may derive income and gains from the exploration, development, mining or production, processing,","page_number":157,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"53ec76fc-acf4-45b7-b879-a0f267301ec6","block_type":"box","text":"refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing","page_number":157,"box":{"x":117,"y":521,"width":758,"height":12}},{"id":"7e2c87cb-92af-4593-8577-b6739e366f39","block_type":"box","text":"of any mineral or natural resources. MLPs generally have two classes of owners, the general partner","page_number":157,"box":{"x":116,"y":537,"width":752,"height":12}},{"id":"ea3c1c92-5e15-40c4-b313-3a141ec68e9c","block_type":"box","text":"and limited partners. When investing in an MLP, a Fund intends to purchase publicly traded common","page_number":157,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"14d63e74-3db4-48f3-b920-a63c72470045","block_type":"box","text":"units issued to limited partners of the MLP. The general partner is typically owned by a major energy","page_number":157,"box":{"x":117,"y":568,"width":749,"height":12}},{"id":"fc095b7c-59d9-4827-8d72-16931b33337d","block_type":"box","text":"company, an investment fund, the direct management of the MLP or is an entity owned by one or more","page_number":157,"box":{"x":116,"y":583,"width":769,"height":12}},{"id":"deb1ba1d-f9e0-494c-b2a6-5ddefc90b5fe","block_type":"box","text":"of such parties. The general partner may be structured as a private or publicly traded corporation or","page_number":157,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"60b5b848-7f83-4aa9-93f8-2b4ff8e68b72","block_type":"box","text":"other entity. The general partner typically controls the operations and management of the MLP through","page_number":157,"box":{"x":116,"y":614,"width":768,"height":12}},{"id":"b2a901e7-eb6d-4730-9951-ca4b876e402f","block_type":"box","text":"an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and","page_number":157,"box":{"x":116,"y":630,"width":689,"height":12}},{"id":"5a54bb6c-0fd8-49d2-8d00-3af9be80b687","block_type":"box","text":"subordinated units. Limited partners own the remainder of the partnership, through ownership of","page_number":157,"box":{"x":116,"y":645,"width":718,"height":12}},{"id":"7716874b-37d0-4bb8-a463-2796b7858180","block_type":"box","text":"common units, and have a limited role in the partnership’s operations and management.","page_number":157,"box":{"x":116,"y":661,"width":652,"height":12}},{"id":"61f47a36-d9f6-4dd4-ba64-540a917dfa57","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to","page_number":157,"box":{"x":117,"y":692,"width":764,"height":12}},{"id":"fc08a3db-d4cf-4c70-aad5-955ff84cd43a","block_type":"box","text":"receive quarterly cash distributions up to an established minimum amount (“minimum quarterly","page_number":157,"box":{"x":117,"y":707,"width":701,"height":12}},{"id":"050d2ac6-debf-45db-8f08-acbd1a069236","block_type":"box","text":"distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions","page_number":157,"box":{"x":116,"y":723,"width":762,"height":12}},{"id":"97331b62-f903-4a3b-8524-eb641b16348f","block_type":"box","text":"to the extent the MQD is not paid. Once common and general partner interests have been paid,","page_number":157,"box":{"x":116,"y":738,"width":708,"height":12}},{"id":"0799770e-a005-44b0-ba82-129db3ddc8dc","block_type":"box","text":"subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue","page_number":157,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"c6aa92ef-50df-477a-a3c1-c458cfd47211","block_type":"box","text":"arrearages. Distributable cash in excess of the MQD paid to both common and subordinated units is","page_number":157,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"3c8d5fb9-b254-442a-a475-47a8725ac08f","block_type":"box","text":"distributed to both common and subordinated units generally on a pro rata basis. The general partner","page_number":157,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"f78b1bc4-f238-4a67-ac78-2ed4d2dedd48","block_type":"box","text":"is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":157,"box":{"x":117,"y":800,"width":707,"height":12}},{"id":"99fedda0-6641-406d-a3c9-8f8171d035b0","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the","page_number":157,"box":{"x":117,"y":816,"width":746,"height":12}},{"id":"f5b8cab1-8470-4424-bc2e-e7c3c2b105f2","block_type":"box","text":"general partner increases cash distributions to the limited partners, the general partner receives an","page_number":157,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"8c292214-aae6-414e-b869-e5f4114301f4","block_type":"box","text":"increasingly higher percentage of the incremental cash distributions. A common arrangement provides","page_number":157,"box":{"x":117,"y":847,"width":764,"height":12}},{"id":"6ec5fc36-446c-49e4-89b4-c8aa31f9d290","block_type":"box","text":"that the general partner can reach a tier where it receives 50% of every incremental dollar paid to","page_number":157,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"1b4bbfbb-fceb-4fea-9c1c-661923eee1ca","block_type":"box","text":"common and subordinated unit holders. These incentive distributions encourage the general partner to","page_number":157,"box":{"x":116,"y":878,"width":767,"height":12}},{"id":"126d57e4-c78a-4d5a-8522-e9813ee6df5f","block_type":"box","text":"II-63","page_number":157,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9e9323d0-6643-4008-ab33-5fab74148b90","block_type":"box","text":"NM1026U-6004408-157/267","page_number":157,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"17c50471-a5af-41f5-94e9-a5d4e30ed70f","block_type":"box","text":"streamline costs, increase capital expenditures and acquire assets in order to increase the","page_number":158,"box":{"x":116,"y":87,"width":676,"height":12}},{"id":"23edf371-66e1-4d3c-aacc-88fe9b4ec2a1","block_type":"box","text":"partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such","page_number":158,"box":{"x":117,"y":102,"width":736,"height":13}},{"id":"03647b87-b1dc-4aa4-8b89-23f0d1b3f60f","block_type":"box","text":"results benefit all security holders of the MLP.","page_number":158,"box":{"x":117,"y":118,"width":343,"height":12}},{"id":"ee8e46d7-ada5-4293-8b18-a24bacdd8cbf","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and","page_number":158,"box":{"x":117,"y":148,"width":748,"height":12}},{"id":"63d3a9e3-f84a-4ac9-be08-534c293e2e25","block_type":"box","text":"traded on U.S. securities exchanges, with their value fluctuating predominantly based on prevailing","page_number":158,"box":{"x":116,"y":163,"width":739,"height":13}},{"id":"24b9ea15-7093-486c-8cff-6deaac84f225","block_type":"box","text":"market conditions and the success of the MLP. Certain Funds intend to purchase common units in","page_number":158,"box":{"x":117,"y":179,"width":733,"height":12}},{"id":"5c16a306-c649-4d2e-8596-53fb90df331c","block_type":"box","text":"market transactions. Unlike owners of common stock of a corporation, owners of common units have","page_number":158,"box":{"x":117,"y":194,"width":752,"height":12}},{"id":"8ffd38c7-b721-44ed-9577-6f3bfc829ea8","block_type":"box","text":"limited voting rights and have no ability to annually elect directors. In the event of liquidation, common","page_number":158,"box":{"x":117,"y":210,"width":758,"height":12}},{"id":"1a91f0e5-29e0-48a4-929b-b2214512f2c9","block_type":"box","text":"units have preference over subordinated units, but not over debt or preferred units, to the remaining","page_number":158,"box":{"x":117,"y":225,"width":744,"height":13}},{"id":"534126ac-2130-4827-9a2f-69fdbb89ea9a","block_type":"box","text":"assets of the MLP.","page_number":158,"box":{"x":116,"y":241,"width":144,"height":9}},{"id":"21193dd2-8f00-4ae0-903e-901be1524b7d","block_type":"box","text":"Merger Transaction Risk.","page_number":158,"box":{"x":116,"y":271,"width":200,"height":12}},{"id":"17085cdf-90e2-4af2-ad3c-193276f0711b","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger","page_number":158,"box":{"x":317,"y":271,"width":531,"height":12}},{"id":"abfe6509-733f-4615-b0f0-e36b34e62b1a","block_type":"box","text":"transaction prior to the consummation of such transaction. In that circumstance, a Fund would expect","page_number":158,"box":{"x":116,"y":286,"width":757,"height":12}},{"id":"68e9c7bb-5d03-4577-95fc-0c3430bd2455","block_type":"box","text":"to receive an amount (whether in cash, stock of the acquiring company or a combination of both) in","page_number":158,"box":{"x":116,"y":302,"width":740,"height":12}},{"id":"29e1991c-12ad-4e46-ad01-781501f95e9e","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":158,"box":{"x":116,"y":317,"width":733,"height":12}},{"id":"40aecb52-9775-47e3-9dc9-acdeb3552d29","block_type":"box","text":"subject to the risk that the merger transaction may be canceled, delayed or restructured, in which case","page_number":158,"box":{"x":116,"y":333,"width":766,"height":12}},{"id":"bef928cb-5a91-4795-87f4-55d322ee1df5","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":158,"box":{"x":116,"y":348,"width":754,"height":12}},{"id":"22b545f5-4f8a-4b59-94b4-3008510503de","block_type":"box","text":"significant value.","page_number":158,"box":{"x":116,"y":364,"width":129,"height":12}},{"id":"727a7725-d604-4cfd-8304-e8b3b5bb1ac6","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S.","page_number":158,"box":{"x":116,"y":394,"width":737,"height":12}},{"id":"22c93083-e109-409d-93e8-588febf3cb03","block_type":"box","text":"Banks.","page_number":158,"box":{"x":116,"y":409,"width":54,"height":10}},{"id":"5bf4c75f-71bd-44a3-8fe1-d3333a973b83","block_type":"box","text":"Certain Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’","page_number":158,"box":{"x":171,"y":409,"width":705,"height":12}},{"id":"0ce60127-9564-4677-89be-6501ed24f2f0","block_type":"box","text":"acceptances and time deposits, including instruments issued or supported by the credit of U.S. or","page_number":158,"box":{"x":116,"y":425,"width":728,"height":12}},{"id":"aefcb4af-c51a-4757-b9fa-19af9f8490e5","block_type":"box","text":"foreign banks or savings institutions having total assets at the time of purchase in excess of $1 billion.","page_number":158,"box":{"x":116,"y":440,"width":761,"height":12}},{"id":"5354a3c3-e4ee-4d67-ba37-5fa003e68cc6","block_type":"box","text":"These obligations may be general obligations of the parent bank or may be limited to the issuing","page_number":158,"box":{"x":116,"y":456,"width":719,"height":12}},{"id":"37aeb7ff-6404-4acd-bac3-605c2a0e9ab7","block_type":"box","text":"branch or subsidiary by the terms of a specific obligation or by government regulation. The assets of a","page_number":158,"box":{"x":117,"y":471,"width":761,"height":12}},{"id":"018a737c-eff5-4f60-b510-305f90759fe4","block_type":"box","text":"bank or savings institution will be deemed to include the assets of its domestic and foreign branches","page_number":158,"box":{"x":117,"y":487,"width":747,"height":12}},{"id":"015de46c-f1ef-403a-8766-343b2338b877","block_type":"box","text":"for purposes of a Fund’s investment policies. Investments in short-term bank obligations may include","page_number":158,"box":{"x":116,"y":502,"width":753,"height":12}},{"id":"fb4e6ff7-6697-46c2-aa46-291c86a08133","block_type":"box","text":"obligations of foreign banks and domestic branches of foreign banks, and also foreign branches of","page_number":158,"box":{"x":116,"y":518,"width":734,"height":12}},{"id":"e937bf77-7085-4398-8b18-405c93f6f405","block_type":"box","text":"domestic banks.","page_number":158,"box":{"x":116,"y":533,"width":126,"height":10}},{"id":"bf36cfc2-d27e-44b7-8581-867cfb48d1e5","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of","page_number":158,"box":{"x":116,"y":563,"width":727,"height":12}},{"id":"7e8c15ee-d0f1-40a4-b23b-673b2c336fb8","block_type":"box","text":"domestic or foreign corporations and banks, and may acquire commercial obligations issued by","page_number":158,"box":{"x":116,"y":579,"width":713,"height":12}},{"id":"83679c7f-7588-4916-96f6-2b552ffffdad","block_type":"box","text":"Canadian corporations and Canadian counterparts of U.S. corporations, as well as Europaper, which is","page_number":158,"box":{"x":117,"y":594,"width":769,"height":12}},{"id":"166004e5-74ff-4419-8480-c6043d80976b","block_type":"box","text":"U.S. dollar-denominated commercial paper of a foreign issuer.","page_number":158,"box":{"x":117,"y":610,"width":466,"height":12}},{"id":"3439d51c-26f6-49da-9cc7-f78c0666fbd9","block_type":"box","text":"Money Market Securities.","page_number":158,"box":{"x":116,"y":640,"width":201,"height":12}},{"id":"9067ec5f-4dbc-447b-99df-41130099ab19","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S.","page_number":158,"box":{"x":318,"y":640,"width":564,"height":12}},{"id":"c5349b8c-dff6-4877-954b-f7a2f991cbfb","block_type":"box","text":"dollar-denominated instruments, such as government, bank, commercial and other obligations that are","page_number":158,"box":{"x":116,"y":655,"width":765,"height":12}},{"id":"046329cd-bef4-46e1-be0f-022d0446f111","block_type":"box","text":"available in the money markets. In particular, the Funds may invest in:","page_number":158,"box":{"x":116,"y":671,"width":519,"height":12}},{"id":"8017547e-4b73-41f1-b36b-64ce380e1e81","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks","page_number":158,"box":{"x":150,"y":701,"width":729,"height":12}},{"id":"ac8d2833-f3eb-4ffc-b7d7-c7fdf40c4fea","block_type":"box","text":"or savings institutions with total assets in excess of $1 billion (including obligations of foreign","page_number":158,"box":{"x":184,"y":715,"width":684,"height":13}},{"id":"edd6c967-7577-4efe-8870-687c7b68eb53","block_type":"box","text":"branches of such banks);","page_number":158,"box":{"x":184,"y":732,"width":186,"height":12}},{"id":"8a40d6cb-3f07-4f42-aa1c-0b801dfbfb8f","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign","page_number":158,"box":{"x":150,"y":754,"width":728,"height":12}},{"id":"b45f03a4-7ffc-44f0-bb71-05a86cd91ccf","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":158,"box":{"x":184,"y":770,"width":686,"height":12}},{"id":"c3069092-c404-436e-8558-b72c3ab48013","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":158,"box":{"x":184,"y":785,"width":681,"height":12}},{"id":"06b7039b-f4b5-4795-8a4b-e212838eeacc","block_type":"box","text":"(at the time of purchase) A or higher by those rating agencies;","page_number":158,"box":{"x":184,"y":801,"width":459,"height":12}},{"id":"8153cecb-a6e4-46e2-b37e-73d067c49517","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments","page_number":158,"box":{"x":150,"y":823,"width":720,"height":13}},{"id":"7bedb995-f1ca-4d00-b11f-7b967629f24e","block_type":"box","text":"described in (b) above as determined by the Fund’s Manager;","page_number":158,"box":{"x":184,"y":839,"width":463,"height":12}},{"id":"cc9e84d5-3109-4c80-a3bc-22dd2597d912","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment","page_number":158,"box":{"x":150,"y":862,"width":730,"height":12}},{"id":"f81c60d4-709e-4ab5-987a-96d1891fb38c","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":158,"box":{"x":184,"y":877,"width":374,"height":12}},{"id":"12688579-ec2a-4b82-8c51-3d93f279fc99","block_type":"box","text":"II-64","page_number":158,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8682f59c-2ce4-4674-a4c3-11e994b76417","block_type":"box","text":"NM1026U-6004408-158/267","page_number":158,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"07636155-7ec1-428f-a259-2bd93dcfe161","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its","page_number":159,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"88094d94-9a2b-4458-bd52-43ea0a540847","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":159,"box":{"x":184,"y":103,"width":401,"height":12}},{"id":"55507139-257e-46d6-9772-fc8d1a3308f2","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political","page_number":159,"box":{"x":150,"y":126,"width":719,"height":12}},{"id":"feeb9928-944a-4931-8888-b1501e531886","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":159,"box":{"x":184,"y":141,"width":279,"height":12}},{"id":"231d7ed6-1cc8-4473-8fe3-5031bebdb9ed","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":159,"box":{"x":150,"y":165,"width":561,"height":12}},{"id":"a8e82c82-8dfc-4811-bfd8-5f493f3da3b4","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":159,"box":{"x":150,"y":188,"width":560,"height":12}},{"id":"c1e2809d-071b-434d-9925-c7eeca3c5bb6","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":159,"box":{"x":150,"y":211,"width":469,"height":12}},{"id":"c3e41a60-10c2-473c-91c2-c12c2204392c","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S.","page_number":159,"box":{"x":150,"y":234,"width":736,"height":12}},{"id":"7b75a7db-4c52-4875-b61d-44b1aa75272a","block_type":"box","text":"Government or one of its agencies or authorities or which otherwise depend directly or","page_number":159,"box":{"x":184,"y":250,"width":646,"height":12}},{"id":"c6438754-e3e3-416c-a203-af43829e045a","block_type":"box","text":"indirectly on the credit of the United States;","page_number":159,"box":{"x":184,"y":265,"width":325,"height":12}},{"id":"1241c47a-ea71-4392-9967-77cb68196c82","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":159,"box":{"x":150,"y":289,"width":730,"height":12}},{"id":"33c0c265-a92b-4e6f-8376-7c97384bd7bc","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":159,"box":{"x":184,"y":304,"width":563,"height":12}},{"id":"8eed8d1a-06d4-4f7f-b8c6-0cb90026d7b1","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by","page_number":159,"box":{"x":150,"y":327,"width":675,"height":12}},{"id":"a787ae5e-5d33-4552-9209-8941d29a74fe","block_type":"box","text":"Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":159,"box":{"x":184,"y":343,"width":428,"height":12}},{"id":"9b5dee23-b585-454e-8a35-2228042f77ab","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":159,"box":{"x":150,"y":366,"width":488,"height":12}},{"id":"a317c28f-667a-4550-b7f3-175b137ffa15","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments","page_number":159,"box":{"x":150,"y":389,"width":713,"height":12}},{"id":"fbab7ee0-8a2f-4d3b-883c-409260c5e452","block_type":"box","text":"described above, as determined by the Fund’s Manager under guidelines established by the","page_number":159,"box":{"x":184,"y":405,"width":688,"height":12}},{"id":"f6e0723e-f461-4fd2-8556-c1c373ee8661","block_type":"box","text":"Board; and","page_number":159,"box":{"x":184,"y":420,"width":86,"height":12}},{"id":"a4345607-37d6-47dd-9187-0d5ef1c03aa3","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S.","page_number":159,"box":{"x":150,"y":444,"width":693,"height":12}},{"id":"6f07b813-43a4-4bdf-bb2d-92f69eca28c5","block_type":"box","text":"Government or an agency or instrumentality thereof or which otherwise depend directly or","page_number":159,"box":{"x":184,"y":459,"width":671,"height":12}},{"id":"6f2b6359-6ac1-472b-980a-fa7cd4bafb80","block_type":"box","text":"indirectly on the credit of the United States.","page_number":159,"box":{"x":184,"y":475,"width":325,"height":12}},{"id":"b28a1048-c35c-4547-a7b2-e2dd13731381","block_type":"box","text":"Mortgage-Related Securities.","page_number":159,"box":{"x":116,"y":506,"width":236,"height":12}},{"id":"6bc22e5b-b687-4403-8681-39608a28eabf","block_type":"box","text":"Mortgage-Backed Securities.","page_number":159,"box":{"x":116,"y":529,"width":214,"height":12}},{"id":"be259b5d-8113-4f51-a162-151d3a327de9","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in","page_number":159,"box":{"x":332,"y":529,"width":544,"height":12}},{"id":"b8e33627-d88a-4b1e-9cc7-b8a3c202cb35","block_type":"box","text":"which payments of both principal and interest on the securities are generally made monthly, in effect","page_number":159,"box":{"x":116,"y":544,"width":749,"height":12}},{"id":"f7f19141-16e3-4174-90fc-6134df31ce08","block_type":"box","text":"“passing through” monthly payments made by borrowers on the residential or commercial mortgage","page_number":159,"box":{"x":116,"y":560,"width":745,"height":12}},{"id":"4aa2fffe-4b95-46e2-ba72-a747799eb76c","block_type":"box","text":"loans that underlie the securities (net of any fees paid to the issuer or guarantor of the securities).","page_number":159,"box":{"x":117,"y":575,"width":728,"height":12}},{"id":"2b5ea273-dbd0-4838-995f-abd2ee563298","block_type":"box","text":"Mortgage-backed securities differ from other forms of debt securities, which normally provide for","page_number":159,"box":{"x":117,"y":591,"width":718,"height":12}},{"id":"4c2c259a-208f-4584-9a8b-1baa70f01ce3","block_type":"box","text":"periodic payment of interest in fixed amounts with principal payments at maturity or specified call","page_number":159,"box":{"x":117,"y":606,"width":721,"height":12}},{"id":"85f08705-a816-41b2-9733-9b506c152631","block_type":"box","text":"dates.","page_number":159,"box":{"x":116,"y":622,"width":50,"height":9}},{"id":"2be56b0b-d61e-4275-bf21-9b838748ac4c","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate","page_number":159,"box":{"x":117,"y":653,"width":736,"height":12}},{"id":"a5191625-4b36-4f01-92f0-e3215a4978bc","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":159,"box":{"x":116,"y":668,"width":718,"height":12}},{"id":"b616ee05-13cb-4291-bc71-79cfb4bd2ad0","block_type":"box","text":"mortgages relates declines. In addition, investments in mortgage-backed securities involve certain","page_number":159,"box":{"x":117,"y":684,"width":726,"height":12}},{"id":"978d0055-af36-4a79-a07c-ba3a418512e6","block_type":"box","text":"specific risks. These risks include the failure of a party to meet its commitments under the related","page_number":159,"box":{"x":116,"y":699,"width":720,"height":13}},{"id":"bebc2cff-c84d-4cbf-8ce9-3a5382fd8a0b","block_type":"box","text":"operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash","page_number":159,"box":{"x":116,"y":715,"width":762,"height":12}},{"id":"a809eb7a-5835-41bc-9f64-933ab5e51cf6","block_type":"box","text":"flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest","page_number":159,"box":{"x":116,"y":730,"width":740,"height":13}},{"id":"73726310-511f-4b0a-b157-29ccd90a82d0","block_type":"box","text":"payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":159,"box":{"x":117,"y":746,"width":687,"height":12}},{"id":"25ffbcab-1a34-446e-ba51-fddb45a1b805","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly","page_number":159,"box":{"x":116,"y":761,"width":720,"height":13}},{"id":"69571e8d-d870-44da-9bce-627ec155952e","block_type":"box","text":"sensitive to changes in prevailing interest rates, and, like other fixed income investments, the ability of","page_number":159,"box":{"x":116,"y":777,"width":757,"height":12}},{"id":"7ebc9b7b-ed2f-4d3f-afcc-e353bb1f85f2","block_type":"box","text":"a Fund to utilize these instruments successfully may depend in part upon the ability of the Manager to","page_number":159,"box":{"x":116,"y":792,"width":754,"height":13}},{"id":"4bdd9136-baee-4a56-83f9-8321824b3f23","block_type":"box","text":"forecast interest rates and other economic factors correctly. The value of mortgage-backed securities,","page_number":159,"box":{"x":116,"y":808,"width":755,"height":12}},{"id":"07774d8b-1557-44fa-92af-01ced176368d","block_type":"box","text":"like that of traditional fixed-income securities, typically increases when interest rates fall and decreases","page_number":159,"box":{"x":117,"y":823,"width":762,"height":13}},{"id":"8fed5419-3f04-411c-bbb2-5a93ac750a27","block_type":"box","text":"when interest rates rise. However, mortgage-backed securities differ from traditional fixed-income","page_number":159,"box":{"x":116,"y":839,"width":729,"height":12}},{"id":"b8a2a096-fdcf-4be7-b23f-88920b52588d","block_type":"box","text":"securities because of their potential for prepayment without penalty. The price paid by a Fund for its","page_number":159,"box":{"x":116,"y":854,"width":745,"height":13}},{"id":"9d16d7b1-fbde-4bc1-917c-18e68056f643","block_type":"box","text":"mortgage-backed securities, the yield the Fund expects to receive from such securities and the","page_number":159,"box":{"x":117,"y":870,"width":709,"height":12}},{"id":"9abfeca3-44ac-4a72-8406-190c6d21d619","block_type":"box","text":"II-65","page_number":159,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8f0f0e87-389a-4c3d-a9e0-8b7801e45e8c","block_type":"box","text":"NM1026U-6004408-159/267","page_number":159,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3eb3e9bd-8883-484d-b655-3da1b39eb9ac","block_type":"box","text":"weighted average life of the securities are based on a number of factors, including the anticipated rate","page_number":160,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"25dc4c81-0441-4817-9e94-450ca13ae028","block_type":"box","text":"of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may","page_number":160,"box":{"x":116,"y":102,"width":727,"height":13}},{"id":"13feae7d-4bc7-4e3a-be18-9f070ce9248d","block_type":"box","text":"prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity","page_number":160,"box":{"x":117,"y":118,"width":757,"height":12}},{"id":"0ba7ab68-219b-459b-85b5-c52111ca5f05","block_type":"box","text":"and the average life of the mortgage-backed securities. Moreover, when a Fund reinvests the proceeds","page_number":160,"box":{"x":116,"y":134,"width":772,"height":12}},{"id":"fd30a600-8ac0-48c1-81bc-5371745530fb","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":160,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"a03e7350-e540-4b0e-8705-d3f69de724e3","block_type":"box","text":"on the security that was prepaid.","page_number":160,"box":{"x":116,"y":165,"width":247,"height":12}},{"id":"ccab012c-3b9e-470e-9ab7-6fe929441d44","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures","page_number":160,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"3ac6a4a9-d5a8-443d-b6d6-0d98c029f434","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":160,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"ad2836f6-7d10-40e1-a275-5a74d7cddc43","block_type":"box","text":"securities at a discount, both scheduled payments of principal and unscheduled prepayments will","page_number":160,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"d3557096-d2b1-4549-91ce-e548c488e4de","block_type":"box","text":"increase current and total returns and will accelerate the recognition of income, which, when distributed","page_number":160,"box":{"x":117,"y":242,"width":771,"height":12}},{"id":"f87b35d9-dbbf-4a19-bb50-8c78e0ad981c","block_type":"box","text":"to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of","page_number":160,"box":{"x":116,"y":258,"width":762,"height":12}},{"id":"4f41c3a9-54b9-4d6e-b3a3-7b96e4037f56","block_type":"box","text":"the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk.","page_number":160,"box":{"x":116,"y":273,"width":753,"height":12}},{"id":"a8fddd4b-b133-45e9-9ca5-7430a9fdf34f","block_type":"box","text":"This particular risk may effectively change a security that was considered short- or intermediate-term at","page_number":160,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"9ece3e32-8e79-4976-b45a-40149c66059a","block_type":"box","text":"the time of purchase into a long-term security. Since the value of long-term securities generally","page_number":160,"box":{"x":116,"y":304,"width":709,"height":12}},{"id":"15ec4320-9f7e-4261-a6fc-f1397998794e","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than that of shorter-term securities,","page_number":160,"box":{"x":116,"y":320,"width":736,"height":12}},{"id":"bd28d9ad-4aea-4e92-ae32-f53186422142","block_type":"box","text":"maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":160,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"3eb986cf-d93e-46da-8f3b-459f11ce5bc2","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities","page_number":160,"box":{"x":117,"y":351,"width":740,"height":12}},{"id":"12c2714a-657e-46a4-a54f-31349f015bd3","block_type":"box","text":"notwithstanding any direct or indirect governmental or agency guarantee.","page_number":160,"box":{"x":117,"y":366,"width":547,"height":12}},{"id":"ce66d40d-508d-495b-aafb-1ae2c54fbe10","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S.","page_number":160,"box":{"x":116,"y":397,"width":725,"height":12}},{"id":"51518b64-2dde-4cd3-9df2-12eb6abd6443","block_type":"box","text":"Government or one of its agencies or instrumentalities, such as the Government National Mortgage","page_number":160,"box":{"x":117,"y":413,"width":742,"height":12}},{"id":"3582fef3-2fae-4a6d-b4ee-1b2e542b5ca3","block_type":"box","text":"Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal","page_number":160,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"8d87fe95-d106-48cd-8967-bf21d7409151","block_type":"box","text":"Home Loan Mortgage Corporation (“Freddie Mac”); (2) those issued by private issuers that represent","page_number":160,"box":{"x":117,"y":444,"width":753,"height":12}},{"id":"973b3dfd-5a64-4af6-b15a-06b11420a438","block_type":"box","text":"an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S.","page_number":160,"box":{"x":116,"y":459,"width":704,"height":12}},{"id":"c175f5d0-8f75-411f-965b-51d189564c3b","block_type":"box","text":"Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that","page_number":160,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"598461ed-f6a7-4b08-8026-30ec686a4922","block_type":"box","text":"represent an interest in or are collateralized by whole mortgage loans or pass-through securities","page_number":160,"box":{"x":117,"y":490,"width":717,"height":12}},{"id":"ae61bec5-4f6d-45b5-a8c7-40e536241a99","block_type":"box","text":"without a government guarantee but that usually have some form of private credit enhancement.","page_number":160,"box":{"x":116,"y":506,"width":720,"height":12}},{"id":"0e3a60d2-c6aa-4cf5-ba6f-e3b493ee8c4f","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and","page_number":160,"box":{"x":117,"y":537,"width":736,"height":12}},{"id":"2898678a-9a14-4591-9dfc-5d3b975ef73a","block_type":"box","text":"Urban Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S.","page_number":160,"box":{"x":117,"y":552,"width":741,"height":12}},{"id":"6ba0451d-19a4-4d51-9f60-48e4e3d79b87","block_type":"box","text":"Government, the timely payment of principal and interest on securities issued by the institutions","page_number":160,"box":{"x":117,"y":568,"width":713,"height":12}},{"id":"d4adc726-7235-4726-bdba-e1f35157c4c0","block_type":"box","text":"approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage","page_number":160,"box":{"x":116,"y":583,"width":725,"height":12}},{"id":"5aaeb343-a729-45e9-aef3-398f0e8ba217","block_type":"box","text":"banks), and backed by pools of Federal Housing Administration (“FHA”)-insured or Veterans’","page_number":160,"box":{"x":117,"y":599,"width":693,"height":12}},{"id":"3662198c-5b43-4001-98c1-12ab254ef7bd","block_type":"box","text":"Administration (“VA”)-guaranteed mortgages. Pass-through certificates guaranteed by Ginnie Mae","page_number":160,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"4913a50c-e784-4297-a3be-d94326f6a372","block_type":"box","text":"(such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely payment of","page_number":160,"box":{"x":117,"y":630,"width":711,"height":12}},{"id":"ee00c400-5389-4356-9057-85be9c819093","block_type":"box","text":"principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the","page_number":160,"box":{"x":117,"y":645,"width":725,"height":12}},{"id":"7dce30c8-b4fa-49f5-819d-877a6b45d353","block_type":"box","text":"United States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow","page_number":160,"box":{"x":117,"y":661,"width":729,"height":12}},{"id":"e48f9388-2a43-49f3-9b11-5636f06d72d7","block_type":"box","text":"funds from the U.S. Treasury Department to make payments under its guarantee. Mortgage-related","page_number":160,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"32a3b606-59e4-4fe8-9150-fa09651659f1","block_type":"box","text":"securities issued by Fannie Mae include Fannie Mae guaranteed Mortgage Pass-Through Certificates","page_number":160,"box":{"x":116,"y":692,"width":756,"height":12}},{"id":"42dd29b4-a81e-48a2-8ec2-ca8b893224a4","block_type":"box","text":"(also known as “Fannie Maes”), which are guaranteed as to timely payment of principal and interest by","page_number":160,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"a6caebff-4359-40e8-a413-b53ebb417a50","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":160,"box":{"x":117,"y":723,"width":754,"height":12}},{"id":"8ddf5c33-4be1-4049-ad18-f5429d62b26e","block_type":"box","text":"supported by the right of Fannie Mae to borrow from the U.S. Treasury Department. Fannie Mae was","page_number":160,"box":{"x":116,"y":738,"width":750,"height":12}},{"id":"8e23d289-cdd7-4296-8a99-b7346cea14e0","block_type":"box","text":"established as a federal agency in 1938 and in 1968 was chartered by Congress as a private","page_number":160,"box":{"x":116,"y":754,"width":690,"height":12}},{"id":"dbcb2cbb-af8f-40e4-b186-57590547de60","block_type":"box","text":"shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":160,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"0e1c6817-1878-43ab-b054-07e71a293617","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a","page_number":160,"box":{"x":117,"y":785,"width":697,"height":12}},{"id":"9f1907ed-f2bb-4edb-92af-6b49f4c98df7","block_type":"box","text":"stockholder-owned corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by","page_number":160,"box":{"x":116,"y":800,"width":745,"height":12}},{"id":"b0e42d3b-c3a3-419c-968a-ca945422a086","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":160,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"0446b4c5-d0a4-42a1-99af-0d3cf98a78c0","block_type":"box","text":"United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of","page_number":160,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"a76666c2-0b54-44b2-a088-1e102d6b3c3c","block_type":"box","text":"interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or","page_number":160,"box":{"x":117,"y":847,"width":735,"height":12}},{"id":"b6e5c934-0b12-4014-970d-6004a3941dd1","block_type":"box","text":"timely payment of all principal payments on the underlying mortgage loans. While Freddie Mac","page_number":160,"box":{"x":116,"y":862,"width":707,"height":12}},{"id":"6d6bdef2-7fc2-47cc-973d-c8c8831f1fa3","block_type":"box","text":"generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due on","page_number":160,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"63c1ac20-6c68-4481-9c0a-c01aae8766a0","block_type":"box","text":"II-66","page_number":160,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"51c69314-628f-48ab-b164-a335bb42de25","block_type":"box","text":"NM1026U-6004408-160/267","page_number":160,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fa512435-0569-400f-9cfe-95d88d32416b","block_type":"box","text":"account of its guarantee of ultimate payment of principal at any time after default on an underlying","page_number":161,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"5559f2e0-926e-45ab-bd79-3e10a9733107","block_type":"box","text":"mortgage, but in no event later than one year after it becomes payable.","page_number":161,"box":{"x":117,"y":102,"width":532,"height":13}},{"id":"1cd93ae5-7b0c-46c4-bbd6-d52a7662a4c4","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and","page_number":161,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"8e7fc225-42f7-43d6-a042-a821860b65d6","block_type":"box","text":"Freddie Mac mortgage pass-through securities and are issued by originators of and investors in","page_number":161,"box":{"x":117,"y":149,"width":714,"height":12}},{"id":"e03455f4-e002-4015-b6ca-f6305f5faf8f","block_type":"box","text":"mortgage loans, including depository institutions, mortgage banks, investment banks and special","page_number":161,"box":{"x":117,"y":165,"width":722,"height":12}},{"id":"30de8c24-113a-4f4d-b7f8-5ff80e7fa7ba","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":161,"box":{"x":117,"y":180,"width":284,"height":12}},{"id":"16ec9af4-4187-473b-bb35-9a52696703a2","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than","page_number":161,"box":{"x":117,"y":211,"width":747,"height":12}},{"id":"b1c7ed9d-62fd-4358-828d-06eb97783f04","block_type":"box","text":"government and government-related pools because there are no direct or indirect government or","page_number":161,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"842be36e-ad34-4b64-950a-efb62629778f","block_type":"box","text":"agency guarantees of payments in the private pools. However, timely payment of interest and principal","page_number":161,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"93c30e69-a8bd-4e1d-a0f1-cd9d6ea8d6b4","block_type":"box","text":"of these pools may be supported by various forms of insurance or guarantees, including individual","page_number":161,"box":{"x":116,"y":258,"width":732,"height":12}},{"id":"213029dc-b496-49fb-a4b9-4f1f7f92a0e1","block_type":"box","text":"loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by","page_number":161,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"3005b4e4-2af1-4b60-abb7-d1a01421d9e1","block_type":"box","text":"governmental entities, private insurers and the mortgage poolers. The insurance and guarantees and","page_number":161,"box":{"x":116,"y":289,"width":756,"height":12}},{"id":"b034f999-53f4-487a-9e29-52773e2ebaa8","block_type":"box","text":"the creditworthiness of the issuers thereof will be considered in determining whether a mortgage","page_number":161,"box":{"x":116,"y":304,"width":720,"height":12}},{"id":"2813aa99-c3dc-471d-8fd4-2fb07bc4954d","block_type":"box","text":"related security meets a Fund’s investment quality standards. There can be no assurance that the","page_number":161,"box":{"x":117,"y":320,"width":731,"height":12}},{"id":"2a87a48f-85b1-49ad-be3d-0629f5f95a7e","block_type":"box","text":"private insurers or guarantors can meet their obligations under the insurance policies or guarantee","page_number":161,"box":{"x":117,"y":335,"width":734,"height":12}},{"id":"ec65d7bf-7737-4f27-ae27-8861204c020d","block_type":"box","text":"arrangements. Private mortgage pass-through securities may be bought without insurance or","page_number":161,"box":{"x":116,"y":351,"width":696,"height":12}},{"id":"39881844-3732-4d7e-958b-b2731b111a96","block_type":"box","text":"guarantees if, through an examination of the loan experience and practices of the originator/servicers","page_number":161,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"28a8ab12-11dd-4b30-8238-30056b9c2ae4","block_type":"box","text":"and poolers, the Manager determines that the securities meet a Fund’s quality standards. Any","page_number":161,"box":{"x":116,"y":382,"width":703,"height":12}},{"id":"8d23eb1a-5a34-4e03-a7ae-d8f3f96305f1","block_type":"box","text":"mortgage-related securities that are issued by private issuers have some exposure to subprime loans","page_number":161,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"c24fa51a-93cc-4134-8863-477937ca07f8","block_type":"box","text":"as well as to the mortgage and credit markets generally.","page_number":161,"box":{"x":116,"y":413,"width":422,"height":12}},{"id":"390a3060-2983-42d0-a8a4-14f961256670","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the","page_number":161,"box":{"x":117,"y":444,"width":707,"height":12}},{"id":"4de910d3-cf94-46c7-9a61-6c0e950d6777","block_type":"box","text":"underwriting requirements for the underlying mortgages that are applicable to those mortgage-related","page_number":161,"box":{"x":117,"y":459,"width":757,"height":12}},{"id":"cbd2f499-31f7-4a2a-a84c-185d2f8b0589","block_type":"box","text":"securities that have a government or government-sponsored entity guarantee. As a result, the","page_number":161,"box":{"x":116,"y":475,"width":702,"height":12}},{"id":"29f4a8cc-4f02-40e4-9de6-3206e195eb44","block_type":"box","text":"mortgage loans underlying private mortgage-related securities may, and frequently do, have less","page_number":161,"box":{"x":117,"y":490,"width":722,"height":12}},{"id":"7e3e33ee-2616-4cae-8166-84d42aeac434","block_type":"box","text":"favorable collateral, credit risk or other underwriting characteristics than government or government","page_number":161,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"dd79832d-1736-40b4-9c2d-1feab131b1d8","block_type":"box","text":"sponsored mortgage-related securities and have wider variances in a number of terms including","page_number":161,"box":{"x":116,"y":521,"width":717,"height":12}},{"id":"47211828-699b-4145-bb96-9dab3b04469c","block_type":"box","text":"interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently","page_number":161,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"4d6394ed-49eb-4c22-bfb2-414fa63fba0b","block_type":"box","text":"include second mortgages, high loan-to-value mortgages and manufactured housing loans. The","page_number":161,"box":{"x":117,"y":552,"width":714,"height":12}},{"id":"c8f90553-daec-424c-9215-47bd21d9228a","block_type":"box","text":"coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-related","page_number":161,"box":{"x":116,"y":568,"width":723,"height":12}},{"id":"090c5c44-bef7-457f-8696-afc1aab859fd","block_type":"box","text":"securities pool may vary to a greater extent than those included in a government guaranteed pool, and","page_number":161,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"9fcccf7d-57ed-464b-b97f-f895fcb9975e","block_type":"box","text":"the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with","page_number":161,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"ff93faee-6a3e-4ec8-acbd-d1ae3f94a2b2","block_type":"box","text":"weakened credit histories or with a lower capacity to make timely payments on their loans. For these","page_number":161,"box":{"x":116,"y":614,"width":751,"height":12}},{"id":"a06ce301-8796-49ea-92f9-3a72d1a071cc","block_type":"box","text":"reasons, the loans underlying these securities have had in many cases higher default rates than those","page_number":161,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"764b38a6-7a1e-412a-8d02-b68046c9ea92","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":161,"box":{"x":117,"y":645,"width":416,"height":12}},{"id":"5a7f10a8-ec94-4848-89bd-fb31f4c762a5","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools","page_number":161,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"3324f791-0087-4234-9b5c-c442072dda9d","block_type":"box","text":"that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting","page_number":161,"box":{"x":116,"y":692,"width":740,"height":12}},{"id":"495898a7-80ae-4c96-83b5-c92efa00df3b","block_type":"box","text":"mortgage loan repayments may include a general economic turndown, high unemployment, a general","page_number":161,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"865dd2d8-38f9-444a-9d9d-594f5791c481","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":161,"box":{"x":116,"y":723,"width":763,"height":12}},{"id":"dc73df1c-f2e0-437f-ad3a-16db6fe8134f","block_type":"box","text":"rates resulting in higher mortgage payments by holders of adjustable rate mortgages.","page_number":161,"box":{"x":117,"y":738,"width":631,"height":12}},{"id":"9f20099e-636f-41c7-87f5-d5dca832e583","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited","page_number":161,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"fe6e5b8e-2cc1-4cc0-9c89-2245200c2a38","block_type":"box","text":"market for the securities, especially when there is a perceived weakness in the mortgage and real","page_number":161,"box":{"x":117,"y":785,"width":724,"height":12}},{"id":"eba2320b-2a61-4d10-931e-183581360b01","block_type":"box","text":"estate market sectors. Without an active trading market, mortgage-related securities held in a Fund’s","page_number":161,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"af27e583-a10c-46d5-87f0-103cd35c3bae","block_type":"box","text":"portfolio may be particularly difficult to value because of the complexities involved in assessing the","page_number":161,"box":{"x":117,"y":816,"width":729,"height":12}},{"id":"91314f58-2c13-4ff9-a972-0b5d1d1668ef","block_type":"box","text":"value of the underlying mortgage loans.","page_number":161,"box":{"x":116,"y":831,"width":299,"height":12}},{"id":"5e6e27fb-a172-4844-9f10-4e784a6a295a","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":161,"box":{"x":117,"y":862,"width":343,"height":12}},{"id":"a117394e-8f3e-4a19-96e8-e9c49bab7d13","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":161,"box":{"x":462,"y":862,"width":415,"height":12}},{"id":"dab616fc-315d-4528-ab95-b06cfc3c4b0e","block_type":"box","text":"or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest","page_number":161,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"729b5986-2710-466f-841f-2803d187f759","block_type":"box","text":"II-67","page_number":161,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"36dfcd99-89a2-4aac-9be6-e332002e0cc9","block_type":"box","text":"NM1026U-6004408-161/267","page_number":161,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ca5883bb-0112-48f8-b6e6-c74a0bb8915d","block_type":"box","text":"and prepaid principal are generally paid monthly. CMOs may be collateralized by whole mortgage","page_number":162,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"cfe0b799-5e9d-491b-bfcd-df4b01932a3c","block_type":"box","text":"loans or private mortgage pass-through securities but are more typically collateralized by portfolios of","page_number":162,"box":{"x":117,"y":102,"width":755,"height":13}},{"id":"1b4d3f2d-87a8-4a17-a51c-c22bf87ed69e","block_type":"box","text":"mortgage pass-through securities guaranteed by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer","page_number":162,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"590762c0-a85f-487e-9462-eadab5542d73","block_type":"box","text":"of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (“REMIC”).","page_number":162,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"62a9b3d7-0e89-49af-9f68-5367e06a66c8","block_type":"box","text":"All future references to CMOs also include REMICs.","page_number":162,"box":{"x":116,"y":149,"width":392,"height":10}},{"id":"1969265c-09dc-4e7f-9b21-3415a55864ae","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific","page_number":162,"box":{"x":117,"y":180,"width":746,"height":12}},{"id":"8ded6b0c-80ef-4390-95b8-2383817882fc","block_type":"box","text":"adjustable or fixed interest rate, and bearing a different stated maturity date and each must be fully","page_number":162,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"5ddd8289-1f33-4cde-8ec9-9f66aee7f7db","block_type":"box","text":"retired no later than its final distribution date. Actual maturity and average life will depend upon the","page_number":162,"box":{"x":117,"y":211,"width":734,"height":12}},{"id":"ad8f1553-bf10-49fb-9cc5-00385da42ca4","block_type":"box","text":"prepayment experience of the collateral, which is ordinarily unrelated to the stated maturity date.","page_number":162,"box":{"x":117,"y":227,"width":719,"height":12}},{"id":"2cb9c4fd-78d5-4f2d-92bb-08490686c02c","block_type":"box","text":"CMOs often provide for a modified form of call protection through a de facto breakdown of the","page_number":162,"box":{"x":117,"y":242,"width":700,"height":12}},{"id":"7f87fb3c-3717-48bf-81df-fddeb2ffe25c","block_type":"box","text":"underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of","page_number":162,"box":{"x":117,"y":258,"width":718,"height":12}},{"id":"2d717bb1-1b7a-4bc2-867c-d76d4055756e","block_type":"box","text":"principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":162,"box":{"x":117,"y":273,"width":740,"height":12}},{"id":"afc1bfc7-0a4c-4296-b517-1e3b12b6ff30","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually","page_number":162,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"9745665e-c36c-4cf6-b77b-3d33e99ca1e4","block_type":"box","text":"receive principal only after the first class has been retired. An investor may be partially protected","page_number":162,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"0ea75fa9-860f-4955-9bf5-97a7d48097c3","block_type":"box","text":"against a sooner than desired return of principal because of the sequential payments.","page_number":162,"box":{"x":116,"y":320,"width":640,"height":12}},{"id":"f660a420-1fd1-4867-be47-63aefc661bbe","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":162,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"22cdc6f2-6a8a-40d8-82c6-486e4681f30b","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by","page_number":162,"box":{"x":117,"y":366,"width":771,"height":12}},{"id":"7bdaca24-5761-4ddf-b5b7-0036584c732b","block_type":"box","text":"the Investment Company Act on investments by a Fund in other investment companies. In addition, in","page_number":162,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"b4554c95-c866-4a1b-adeb-69191537b0c9","block_type":"box","text":"reliance on an earlier Commission interpretation, a Fund’s investments in certain other qualifying","page_number":162,"box":{"x":117,"y":397,"width":721,"height":12}},{"id":"6e8e85fa-d3aa-4d2a-b6d3-cbbe254051fb","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":162,"box":{"x":117,"y":413,"width":753,"height":12}},{"id":"5462aadf-71fe-46b6-9a5c-eeeb126ab0d0","block_type":"box","text":"Company Act on acquiring interests in other investment companies. In order to be able to rely on the","page_number":162,"box":{"x":117,"y":428,"width":750,"height":12}},{"id":"198f4e5a-def6-491f-b926-25062ae72c54","block_type":"box","text":"Commission’s interpretation, these CMOs must be unmanaged, fixed asset issuers, that: (1) invest","page_number":162,"box":{"x":117,"y":444,"width":736,"height":12}},{"id":"362116e6-137a-4fef-9bd0-1110ee51db5a","block_type":"box","text":"primarily in mortgage-backed securities; (2) do not issue redeemable securities; (3) operate under","page_number":162,"box":{"x":117,"y":459,"width":730,"height":12}},{"id":"f3184e5c-c828-4576-a43b-df5476e86abc","block_type":"box","text":"general exemptive orders exempting them from all provisions of the Investment Company Act; and","page_number":162,"box":{"x":116,"y":475,"width":736,"height":12}},{"id":"f8e67fdf-eb55-4b40-8c89-441003f27d23","block_type":"box","text":"(4) are not registered or regulated under the Investment Company Act as investment companies. To","page_number":162,"box":{"x":117,"y":490,"width":748,"height":12}},{"id":"193a5f1c-9c81-4204-9bbc-4ba7a323be0d","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":162,"box":{"x":116,"y":506,"width":674,"height":12}},{"id":"20b43910-7ee1-4b97-9d0e-5303283cfe2a","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":162,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"a486cccf-774b-4534-813f-5e4e4226ed26","block_type":"box","text":"acquire more than 3% of the voting securities of any single such entity.","page_number":162,"box":{"x":116,"y":537,"width":530,"height":12}},{"id":"ee8042cf-8ce2-4dd1-8fc6-05c3078849fe","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating","page_number":162,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"cf258230-6945-4559-81ff-521668372088","block_type":"box","text":"rate CMOs. Parallel pay CMOs are structured to provide payments of principal on each payment date","page_number":162,"box":{"x":117,"y":583,"width":757,"height":12}},{"id":"ab912897-37f4-4403-a55b-d7768fff3b76","block_type":"box","text":"to more than one class, concurrently on a proportionate or disproportionate basis. These simultaneous","page_number":162,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"3cf9eaec-b3d7-4ab4-88f1-96e296cb8fa1","block_type":"box","text":"payments are taken into account in calculating the final distribution date of each class. Sequential pay","page_number":162,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"244a8ed6-f99c-493b-b9c2-22280e506121","block_type":"box","text":"CMOs generally pay principal to only one class at a time while paying interest to several classes. A","page_number":162,"box":{"x":117,"y":630,"width":739,"height":12}},{"id":"50b1bc54-8a65-449c-832f-8766bbd318f8","block_type":"box","text":"wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures.","page_number":162,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"a7563a9b-d23d-47d1-875f-1107f194053c","block_type":"box","text":"These securities include accrual certificates (also known as “Z-Bonds”), which only accrue interest at a","page_number":162,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"52ae3da8-5cb3-4ed8-bbec-6ca813512992","block_type":"box","text":"specified rate until all other certificates having an earlier final distribution date have been retired and","page_number":162,"box":{"x":116,"y":676,"width":740,"height":12}},{"id":"072c2c8d-c530-41ce-9573-a8936416e384","block_type":"box","text":"are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose","page_number":162,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"cc7bd6bf-3ed2-4297-8e60-b6849345105a","block_type":"box","text":"coupon rate fluctuates according to some formula related to an existing market index or rate. Typical","page_number":162,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"bf55621c-521c-48bf-b9c7-da22dee31d99","block_type":"box","text":"indices would include the eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and","page_number":162,"box":{"x":117,"y":723,"width":753,"height":12}},{"id":"23e0c016-8aa5-4305-adad-b8920fc22d57","block_type":"box","text":"ten-year Treasury yields.","page_number":162,"box":{"x":116,"y":738,"width":184,"height":12}},{"id":"58056372-4afa-4276-9e79-26a9ea72cdda","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization classes","page_number":162,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"f66c04dc-928c-4668-94d5-d408df42f0a9","block_type":"box","text":"(“TACs”). PAC bonds generally require payments of a specified amount of principal on each payment","page_number":162,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"8287a4df-f886-43b4-b4ad-43f491ce7737","block_type":"box","text":"date. The scheduled principal payments for PAC Certificates generally have the highest priority on each","page_number":162,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"d6e929e6-5722-428a-beab-6c18cf8d823d","block_type":"box","text":"payment date after interest due has been paid to all classes entitled to receive interest currently.","page_number":162,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"3e62dc42-e423-4498-bce8-50c05e545a39","block_type":"box","text":"Shortfalls, if any, are added to the amount payable on the next payment date. The PAC Certificate","page_number":162,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"3aee2034-1deb-4e73-86ed-e04ca7558a69","block_type":"box","text":"payment schedule is taken into account in calculating the final distribution date of each class of PAC. In","page_number":162,"box":{"x":117,"y":847,"width":763,"height":12}},{"id":"dc595f92-3940-4574-832d-eb84186946b5","block_type":"box","text":"order to create PAC tranches, one or more tranches generally must be created that absorb most of the","page_number":162,"box":{"x":116,"y":862,"width":759,"height":12}},{"id":"a89b666f-055e-48a2-aed5-d903623c43af","block_type":"box","text":"II-68","page_number":162,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c9b9f0d1-8343-4ab7-b4cd-2a89b2d35643","block_type":"box","text":"NM1026U-6004408-162/267","page_number":162,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4b04ca24-f6e9-4a91-98b9-9da5a053ed46","block_type":"box","text":"volatility in the underlying mortgage assets. These tranches (often called “supports” or “companion”","page_number":163,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"28ddc3ba-e9e9-4129-822a-7995926b74fc","block_type":"box","text":"tranches) tend to have market prices and yields that are more volatile than the PAC classes.","page_number":163,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"fa1c76eb-9002-4ee6-8ad5-a9955d0e25d6","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each","page_number":163,"box":{"x":116,"y":131,"width":745,"height":12}},{"id":"2ef1d42b-897c-4c10-812f-da8e3b46b5b7","block_type":"box","text":"payment date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however,","page_number":163,"box":{"x":117,"y":146,"width":738,"height":12}},{"id":"a191dbd3-f8f9-4891-90d1-13e9430ead2a","block_type":"box","text":"remains in effect as long as prepayment rates on the underlying mortgages do not exceed certain","page_number":163,"box":{"x":117,"y":162,"width":728,"height":12}},{"id":"61b1f6dc-a318-40e8-b4b2-d1fe0985fded","block_type":"box","text":"ranges. In contrast, a TAC provides investors with protection, to a certain level, against either faster","page_number":163,"box":{"x":117,"y":177,"width":743,"height":12}},{"id":"82ebb1f0-feb8-4cb5-b7d7-67bd4c32bf1a","block_type":"box","text":"than expected or slower than expected prepayment rates, but not both. TACs thus provide more cash","page_number":163,"box":{"x":116,"y":193,"width":759,"height":12}},{"id":"d5fe2e77-cf94-404e-8719-b2ff135d7168","block_type":"box","text":"flow stability than a regular sequential paying class, but less than a PAC. TACs also tend to have","page_number":163,"box":{"x":116,"y":208,"width":725,"height":12}},{"id":"12ee3228-a020-4407-877a-6f050251cc8a","block_type":"box","text":"market prices and yields that are more volatile than PACs.","page_number":163,"box":{"x":117,"y":224,"width":437,"height":12}},{"id":"74cee72b-48af-4482-bd5e-5501d0c5e777","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":163,"box":{"x":115,"y":252,"width":277,"height":12}},{"id":"6323f64d-64d5-48cd-b5cf-686a9325f3f3","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through","page_number":163,"box":{"x":393,"y":252,"width":479,"height":12}},{"id":"6fd6d841-994a-49dd-b6d9-33a35f31c0f2","block_type":"box","text":"securities collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for","page_number":163,"box":{"x":116,"y":268,"width":706,"height":12}},{"id":"af59f660-bc84-4494-aa93-43e14a274f44","block_type":"box","text":"inclusion in a mortgage pool generally provide for a fixed initial mortgage interest rate for a set number","page_number":163,"box":{"x":117,"y":283,"width":764,"height":12}},{"id":"d18e8113-1c97-422d-be12-f5ab62443dc8","block_type":"box","text":"of scheduled monthly payments. After that schedule of payments has been completed, the interest","page_number":163,"box":{"x":116,"y":299,"width":736,"height":12}},{"id":"44a16511-6133-4b72-aaf2-e35f568f67c3","block_type":"box","text":"rates are subject to periodic adjustment based on changes to a designated benchmark index.","page_number":163,"box":{"x":117,"y":314,"width":697,"height":12}},{"id":"55e7104a-601e-4c45-8de0-9d3cb92e4c20","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary","page_number":163,"box":{"x":116,"y":343,"width":741,"height":12}},{"id":"2ef39856-c62a-495e-b323-0f165160a9f0","block_type":"box","text":"over the lifetime of the security. In addition, certain ARMs provide for additional limitations on the","page_number":163,"box":{"x":116,"y":358,"width":722,"height":12}},{"id":"72643f69-4a7e-4149-8070-edc8dc470d2b","block_type":"box","text":"maximum amount by which the mortgage interest rate may adjust for any single adjustment period. In","page_number":163,"box":{"x":117,"y":374,"width":758,"height":12}},{"id":"59378a22-1c69-44d7-8213-f157d915269f","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":163,"box":{"x":116,"y":389,"width":741,"height":12}},{"id":"ed106e29-74ea-4f85-949f-293a4cc10716","block_type":"box","text":"rate, the ARM’s coupon may represent a below market rate of interest. In these circumstances, the","page_number":163,"box":{"x":117,"y":405,"width":737,"height":12}},{"id":"6ab3f82a-1d20-432f-8f74-1f7566d67b6c","block_type":"box","text":"market value of the ARM security will likely have fallen.","page_number":163,"box":{"x":117,"y":420,"width":412,"height":12}},{"id":"f7c6d6e9-dd48-46cb-a25f-4b023064b2a8","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a","page_number":163,"box":{"x":117,"y":448,"width":728,"height":13}},{"id":"d19278f7-ae9c-49e4-8340-daa9bb0a29f8","block_type":"box","text":"monthly payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is","page_number":163,"box":{"x":117,"y":464,"width":754,"height":12}},{"id":"1d5b8a5b-440f-4700-ac1d-742225df0c7d","block_type":"box","text":"added to the principal balance of the mortgage loan, which is repaid through future monthly payments.","page_number":163,"box":{"x":116,"y":480,"width":764,"height":12}},{"id":"42f5d4e8-d2d1-4173-8929-80e919952511","block_type":"box","text":"If the monthly payment for such an instrument exceeds the sum of the interest accrued at the","page_number":163,"box":{"x":117,"y":495,"width":695,"height":12}},{"id":"156599b5-c5bf-4323-9260-04721968723b","block_type":"box","text":"applicable mortgage interest rate and the principal payment required at such point to amortize the","page_number":163,"box":{"x":116,"y":511,"width":730,"height":12}},{"id":"86cbd320-c75f-4826-824c-57bb7ac95e9d","block_type":"box","text":"outstanding principal balance over the remaining term of the loan, the excess is then used to reduce","page_number":163,"box":{"x":116,"y":526,"width":748,"height":12}},{"id":"2d1b940c-440a-44c0-bc65-ff2e14bb7341","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":163,"box":{"x":116,"y":542,"width":344,"height":12}},{"id":"e15b7f80-f057-436d-ac4c-c429c7fd04d6","block_type":"box","text":"CMO Residuals.","page_number":163,"box":{"x":117,"y":570,"width":120,"height":9}},{"id":"8b1c75ee-86f1-4dfa-899a-c9fe0403e9ce","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or","page_number":163,"box":{"x":238,"y":570,"width":546,"height":12}},{"id":"dfb54015-8db3-4930-ab6e-b18f36ed4dbf","block_type":"box","text":"instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans,","page_number":163,"box":{"x":117,"y":585,"width":750,"height":12}},{"id":"1609a6a1-ead9-48b4-a204-cac1f230a590","block_type":"box","text":"including savings and loan associations, homebuilders, mortgage banks, commercial banks,","page_number":163,"box":{"x":117,"y":601,"width":688,"height":12}},{"id":"fbf50a12-cbde-4600-8c09-73d21376ec8c","block_type":"box","text":"investment banks, and special purpose entities of the foregoing. The cash flow generated by the","page_number":163,"box":{"x":117,"y":616,"width":718,"height":12}},{"id":"7824a90d-8acf-4217-b6fb-1189752a18e4","block_type":"box","text":"mortgage assets underlying a series of CMOs is applied first to make required payments of principal","page_number":163,"box":{"x":117,"y":632,"width":747,"height":12}},{"id":"3ad12450-b409-4258-918d-529fcac0293c","block_type":"box","text":"and interest on the CMOs and second to pay the related administrative expenses and any","page_number":163,"box":{"x":116,"y":647,"width":673,"height":13}},{"id":"ad74fa41-bb83-49d7-bd47-a747330ff42c","block_type":"box","text":"management fees of the issuer. The residual in a CMO structure generally represents the interest in","page_number":163,"box":{"x":117,"y":663,"width":740,"height":12}},{"id":"442273d3-c4c4-4069-a882-148b733df851","block_type":"box","text":"any excess cash flow remaining after making the foregoing payments. Each payment of such excess","page_number":163,"box":{"x":116,"y":678,"width":748,"height":13}},{"id":"ac2e854e-faac-4a80-8b52-16754f0f9a21","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":163,"box":{"x":116,"y":694,"width":733,"height":12}},{"id":"ecc7e387-16d9-42ad-8b4d-7897267611b4","block_type":"box","text":"amount of residual cash flow resulting from a CMO will depend on, among other things, the","page_number":163,"box":{"x":116,"y":709,"width":676,"height":13}},{"id":"3e0e3aeb-dd8c-4b42-aeaf-16c43e39c82b","block_type":"box","text":"characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates,","page_number":163,"box":{"x":116,"y":725,"width":762,"height":12}},{"id":"80069d69-a5de-4b10-8827-ac6c5d140ddf","block_type":"box","text":"the amount of administrative expenses and the prepayment experience on the mortgage assets. In","page_number":163,"box":{"x":116,"y":740,"width":732,"height":13}},{"id":"622c74eb-0e6e-4976-9063-256315b0b75d","block_type":"box","text":"part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the related","page_number":163,"box":{"x":117,"y":756,"width":743,"height":12}},{"id":"6ce97d8e-29d1-49e9-bd72-7e308bf362c4","block_type":"box","text":"underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":163,"box":{"x":117,"y":771,"width":764,"height":13}},{"id":"840dd1c4-e276-42ba-91b0-4d2c3f7d7200","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":163,"box":{"x":116,"y":787,"width":739,"height":12}},{"id":"a986ef51-27b3-4523-bb62-b109a34a3306","block_type":"box","text":"the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the","page_number":163,"box":{"x":116,"y":802,"width":728,"height":13}},{"id":"db3b2091-bac2-4091-9adf-5e54c6ecde3d","block_type":"box","text":"level of the index upon which interest rate adjustments are based. In certain circumstances, a Fund","page_number":163,"box":{"x":117,"y":818,"width":735,"height":12}},{"id":"75cfdc2a-d7ab-46d2-abf7-61e84184f5ad","block_type":"box","text":"may fail to recoup fully its initial investment in a CMO residual.","page_number":163,"box":{"x":117,"y":833,"width":466,"height":13}},{"id":"473b0a42-294b-45e7-8520-d108a870b999","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more","page_number":163,"box":{"x":117,"y":862,"width":709,"height":12}},{"id":"aa579791-a009-4da2-a0fc-e8fa2e172fee","block_type":"box","text":"investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally","page_number":163,"box":{"x":117,"y":877,"width":744,"height":12}},{"id":"9780d37f-1ca5-472b-9f6c-3ae1d36e088f","block_type":"box","text":"II-69","page_number":163,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c16e4257-0995-4c98-8618-7f0c7a3b17e8","block_type":"box","text":"NM1026U-6004408-163/267","page_number":163,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"37027cae-deb6-42cc-b54a-2d7a5b7b37d2","block_type":"box","text":"completed only after careful review of the characteristics of the securities in question. In addition, CMO","page_number":164,"box":{"x":116,"y":87,"width":768,"height":12}},{"id":"7506d145-47c1-451c-bb4e-410e721fd56d","block_type":"box","text":"residuals may or, pursuant to an exemption therefrom, may not have been registered under the","page_number":164,"box":{"x":117,"y":102,"width":711,"height":13}},{"id":"8908ad1e-7b6b-4ea6-8c2c-1eb1efa010e3","block_type":"box","text":"Securities Act. Residual interests generally are junior to, and may be significantly more volatile than,","page_number":164,"box":{"x":116,"y":118,"width":748,"height":12}},{"id":"613da22a-cd6f-4dcb-ac01-2e69e26e2840","block_type":"box","text":"“regular” CMO and REMIC interests. CMO residuals, whether or not registered under the Securities","page_number":164,"box":{"x":116,"y":134,"width":744,"height":12}},{"id":"e03f6013-32f8-4db9-a8e2-a897184cd414","block_type":"box","text":"Act, may be subject to certain restrictions on transferability.","page_number":164,"box":{"x":116,"y":149,"width":444,"height":12}},{"id":"fb44e8c1-416f-4f4c-867b-671dd91ee220","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":164,"box":{"x":117,"y":180,"width":280,"height":12}},{"id":"fd3ecc0f-2cd4-49e6-b4ae-0b2ed740a19d","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities","page_number":164,"box":{"x":399,"y":180,"width":443,"height":12}},{"id":"52d06bd7-3e78-4244-8901-423f49ee1939","block_type":"box","text":"(“SMBSs”) issued by agencies or instrumentalities of the United States. SMBSs are derivative multi","page_number":164,"box":{"x":117,"y":196,"width":740,"height":12}},{"id":"eca41754-e9f5-41b6-953b-37d81e11aa33","block_type":"box","text":"class mortgage-backed securities. SMBS arrangements commonly involve two classes of securities","page_number":164,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"20789b7c-8bf2-4741-a9db-bbf0ff57cde1","block_type":"box","text":"that receive different proportions of the interest and principal distributions on a pool of mortgage","page_number":164,"box":{"x":116,"y":227,"width":716,"height":12}},{"id":"65e44ede-3d36-43f9-a1b8-1e90728009c7","block_type":"box","text":"assets. A common variety of SMBS is where one class (the principal only or PO class) receives some","page_number":164,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"f8f66c8b-00a2-44b1-bcb8-9871cc62b303","block_type":"box","text":"of the interest and most of the principal from the underlying assets, while the other class (the interest","page_number":164,"box":{"x":116,"y":258,"width":752,"height":12}},{"id":"e59d3fe6-99fc-44c6-9dc3-c9909c143add","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":164,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"cf2ae77f-d444-4dab-997d-0e6074e597fd","block_type":"box","text":"case, the IO class receives all of the interest, while","page_number":164,"box":{"x":116,"y":289,"width":382,"height":11}},{"id":"312db0a0-d448-4262-9658-4bc0c1465649","block_type":"box","text":"the PO class receives all of the principal. While a","page_number":164,"box":{"x":498,"y":289,"width":368,"height":12}},{"id":"f23c3c15-218e-44f8-8986-dcf124fa1810","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":164,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"cfd38518-623c-4102-b402-35658d1937ec","block_type":"box","text":"class. The yield to maturity of an IO class is extremely sensitive to the rate of principal payments","page_number":164,"box":{"x":116,"y":320,"width":720,"height":12}},{"id":"9233a6cf-844a-4b55-92c5-0736c8d8d504","block_type":"box","text":"(including prepayments) on the related underlying assets, and a rapid rate of principal prepayments in","page_number":164,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"76a4a9b8-bef3-4b11-937f-3b226eb869d0","block_type":"box","text":"excess of that considered in pricing the securities will have a material adverse effect on an IO","page_number":164,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"a1e1d28e-c251-4b0a-b36e-9190984f57f9","block_type":"box","text":"security’s yield to maturity. If the underlying mortgage assets experience greater than anticipated","page_number":164,"box":{"x":116,"y":366,"width":724,"height":12}},{"id":"a76cba67-63f6-41b4-b4a5-35d2cb44f07e","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":164,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"3c70f65c-79e9-443f-a6a2-b99d421a3745","block_type":"box","text":"certain types of IOs that represent the interest portion of a particular class as opposed to the interest","page_number":164,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"262879fa-925c-4029-bdca-8b719eb9ea7a","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":164,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"1891628d-ab76-4783-ab9b-ee487f7f4ac1","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above","page_number":164,"box":{"x":117,"y":428,"width":733,"height":12}},{"id":"f43b6164-dc69-4e89-9088-4397a8d3ee83","block_type":"box","text":"factors, a Fund generally will purchase IOs only as a component of so called “synthetic” securities. This","page_number":164,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"f95b14ef-a8a9-4309-b89f-30dece98bdc9","block_type":"box","text":"means that purchases of IOs will be matched with certain purchases of other securities, such as POs,","page_number":164,"box":{"x":117,"y":459,"width":759,"height":12}},{"id":"2218c8d4-8af2-4728-8687-53f93a811d44","block_type":"box","text":"inverse floating rate CMOs or fixed rate securities; as interest rates fall, presenting a greater risk of","page_number":164,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"61fabf66-bfec-434d-9f9d-d74ad454b82f","block_type":"box","text":"unanticipated prepayments of principal, the negative effect on a Fund because of its holdings of IOs","page_number":164,"box":{"x":117,"y":490,"width":744,"height":12}},{"id":"0a6cb398-32b7-4a2c-8501-35919d4910f9","block_type":"box","text":"should be diminished somewhat because of the increased yield on the inverse floating rate CMOs or","page_number":164,"box":{"x":116,"y":506,"width":751,"height":12}},{"id":"e58294cf-9a5f-47cb-8d4e-dc6c877ceb3e","block_type":"box","text":"the increased appreciation on the POs or fixed rate securities.","page_number":164,"box":{"x":116,"y":521,"width":465,"height":12}},{"id":"5e1d171d-ec99-45a8-9074-0dd4871076f4","block_type":"box","text":"Tiered Index Bonds.","page_number":164,"box":{"x":118,"y":552,"width":147,"height":10}},{"id":"f6930f53-8a62-48ad-9f8b-9097565d0335","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on","page_number":164,"box":{"x":266,"y":552,"width":612,"height":12}},{"id":"888b67f1-c751-40d4-afb9-b9de462e85d3","block_type":"box","text":"a tiered index bond is tied to a specified index or","page_number":164,"box":{"x":116,"y":568,"width":365,"height":12}},{"id":"c716cbf4-3fdd-43e6-841f-d2da7a157502","block_type":"box","text":"market rate. So long as this index or market rate is","page_number":164,"box":{"x":482,"y":568,"width":380,"height":12}},{"id":"2ad9c17a-11b5-4338-a392-a657222aee70","block_type":"box","text":"below a predetermined “strike” rate, the interest rate on the tiered index bond remains fixed. If,","page_number":164,"box":{"x":117,"y":583,"width":704,"height":12}},{"id":"97d87eaf-4864-495a-b660-5cfc935fb683","block_type":"box","text":"however, the specified index or market rate rises above the “strike” rate, the interest rate of the tiered","page_number":164,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"18504158-c4f5-4794-801a-c967d67f926c","block_type":"box","text":"index bond will decrease. Thus, under these circumstances, the interest rate on a tiered index bond,","page_number":164,"box":{"x":117,"y":614,"width":747,"height":11}},{"id":"f888d444-7b5a-4339-b70d-fdd77bd6d61d","block_type":"box","text":"like an inverse floater, will move in the opposite direction of prevailing interest rates, with the result that","page_number":164,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"7ff9450a-8cf8-4468-9975-a56dad9157e7","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":164,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"ef72abc6-3252-4428-8ed3-9a89a3bde5d1","block_type":"box","text":"TBA Commitments.","page_number":164,"box":{"x":118,"y":676,"width":142,"height":10}},{"id":"f8dd5ec7-f0fd-4f5a-996e-fd6033283269","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA","page_number":164,"box":{"x":267,"y":676,"width":573,"height":12}},{"id":"2961b11a-57e4-4312-8731-25ca17b2c949","block_type":"box","text":"commitments are forward agreements for the purchase or sale of securities, including mortgage","page_number":164,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"f66b0348-90d0-4031-af6d-c94d0407f7d0","block_type":"box","text":"backed securities for a fixed price, with payment and delivery on an agreed upon future settlement","page_number":164,"box":{"x":117,"y":707,"width":728,"height":12}},{"id":"7e4f5b02-fb01-4100-9e34-170f94fec28c","block_type":"box","text":"date. The specific securities to be delivered are not identified at the trade date. However, delivered","page_number":164,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"5368ab43-cd15-4ba5-bc0f-34afb4b55adc","block_type":"box","text":"securities must meet specified terms, including issuer, rate and mortgage terms. When the Fund enters","page_number":164,"box":{"x":116,"y":738,"width":767,"height":12}},{"id":"009aa413-4362-4221-a67e-8d0a84d4c26b","block_type":"box","text":"into a TBA commitment for the sale of mortgage-backed securities for a fixed price, with payment and","page_number":164,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"8c523245-abcc-4036-8c1e-387e2c93f88b","block_type":"box","text":"delivery on an agreed upon future settlement date (which may be referred to as having a short position","page_number":164,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"1ef4a0f1-bd28-477e-952c-88da3b4fa126","block_type":"box","text":"in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":164,"box":{"x":117,"y":785,"width":707,"height":12}},{"id":"b91771a1-62a2-41da-a9a5-917bac475ccb","block_type":"box","text":"required to be delivered. See “— When-Issued Securities, Delayed Delivery Securities and Forward","page_number":164,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"c01c574c-27c6-4f9d-908e-820b6a0ea587","block_type":"box","text":"Commitments” below.","page_number":164,"box":{"x":117,"y":816,"width":160,"height":9}},{"id":"d4532286-3e1d-45c6-80a1-0594a72a648a","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":164,"box":{"x":116,"y":847,"width":164,"height":12}},{"id":"33d822a6-1364-4060-962b-d33ca9895ae9","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll","page_number":164,"box":{"x":282,"y":847,"width":562,"height":12}},{"id":"8314a8ff-b131-461f-a2c4-c154a05f273f","block_type":"box","text":"transaction, a Fund sells mortgage-backed securities for delivery in the current month and","page_number":164,"box":{"x":116,"y":862,"width":673,"height":12}},{"id":"d8898a95-eb89-4cc1-9462-11d0befb8a91","block_type":"box","text":"simultaneously contracts to repurchase substantially similar securities on a specified future date. The","page_number":164,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"bc52f253-2b09-46c2-a6f1-541615a2ba5e","block_type":"box","text":"II-70","page_number":164,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"39f504cb-baa9-4f4e-890a-9426b50e61d5","block_type":"box","text":"NM1026U-6004408-164/267","page_number":164,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1ce9870e-0b2a-4c73-8b36-cff03f80a748","block_type":"box","text":"securities that are repurchased will bear the same interest rate and a similar maturity as those sold, but","page_number":165,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"0ef36ba1-ba9f-4690-aebd-35422fc7e305","block_type":"box","text":"pools of mortgages collateralizing those securities may have different prepayment histories than those","page_number":165,"box":{"x":117,"y":102,"width":762,"height":13}},{"id":"ffff8946-cb54-4c4a-8576-35f9ef5d75b1","block_type":"box","text":"sold. During the period between the sale and repurchase, a Fund will not be entitled to receive interest","page_number":165,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"c66a96d3-458d-4f5b-b316-f0a71ac280b2","block_type":"box","text":"and principal payments on the securities sold. Proceeds of the sale will be invested in additional","page_number":165,"box":{"x":116,"y":134,"width":716,"height":12}},{"id":"0088521e-965e-4833-a655-3c9e03d855cc","block_type":"box","text":"instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":165,"box":{"x":117,"y":149,"width":762,"height":12}},{"id":"c73cbc92-cf5d-4e22-8196-27f285394f1c","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been","page_number":165,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"85433cdb-917d-42a7-a9d2-171d187ae10b","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":165,"box":{"x":117,"y":180,"width":715,"height":12}},{"id":"0f22fc44-b501-412c-ad06-0ac9d54273aa","block_type":"box","text":"investment performance of a Fund compared with what the performance would have been without the","page_number":165,"box":{"x":117,"y":196,"width":759,"height":11}},{"id":"19c0ee6d-90cf-4ef6-a5c8-c048167fafd2","block_type":"box","text":"use of dollar rolls.","page_number":165,"box":{"x":117,"y":211,"width":135,"height":10}},{"id":"7baa8b68-d67c-467c-96c5-4f2d51ddfee5","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and","page_number":165,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"2dd0272c-2a39-44a9-909e-5d03cbf7b5a3","block_type":"box","text":"a subsequent purchase or sale of a substantially similar security in the forward market. Transactions in","page_number":165,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"8037a018-2c68-429f-b6ab-d36e2380746d","block_type":"box","text":"mortgage dollar rolls may increase trading costs and portfolio turnover.","page_number":165,"box":{"x":117,"y":273,"width":529,"height":12}},{"id":"95c5e1f6-6ad5-4f14-a38d-c31a2c8f86b4","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes","page_number":165,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"63e9d9ee-e6aa-4107-bb29-7e20ddcc5b41","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":165,"box":{"x":117,"y":320,"width":760,"height":12}},{"id":"e5eced88-90a8-4aea-9b9b-4a66c6a0cb7a","block_type":"box","text":"pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s","page_number":165,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"0108c19e-330c-4c0b-ba98-8649ecab818f","block_type":"box","text":"obligation to purchase the similar securities in the forward transaction.","page_number":165,"box":{"x":116,"y":351,"width":525,"height":12}},{"id":"aa8932b5-c585-447c-aeae-f5b5d6987b9f","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar","page_number":165,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"eb37644f-6de0-4aaa-980a-dd9cf30ed8e7","block_type":"box","text":"rolls may depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar","page_number":165,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"8b8ae029-0f69-4788-a969-6a6a755ab51f","block_type":"box","text":"rolls involve the risk that the market value of the securities subject to a Fund’s forward purchase","page_number":165,"box":{"x":117,"y":413,"width":716,"height":12}},{"id":"7764d49c-4642-4fad-b9c7-78fe4bcc4ab9","block_type":"box","text":"commitment may decline below, or the market value of the securities subject to a Fund’s forward sale","page_number":165,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"04baae7e-9e53-4e5a-a94b-34d6f303acd7","block_type":"box","text":"commitment may increase above, the exercise price of the forward commitment. Dollar rolls are","page_number":165,"box":{"x":116,"y":444,"width":715,"height":12}},{"id":"4f632798-0c09-4b69-a53f-e95f6e129196","block_type":"box","text":"speculative techniques that can be deemed to involve leverage. There is no assurance that dollar rolls","page_number":165,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"20e42f8f-cd6f-41ef-be7b-01b163c6bb95","block_type":"box","text":"can be successfully employed.","page_number":165,"box":{"x":116,"y":475,"width":233,"height":12}},{"id":"e006d6a1-b9fb-4b0b-9404-ef28ced2d5b2","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":165,"box":{"x":117,"y":506,"width":740,"height":12}},{"id":"564b7409-5ba3-4857-88fc-9fe302f729bb","block_type":"box","text":"settling securities (e.g., dollar rolls and firm and standby commitments, including TBA commitments)","page_number":165,"box":{"x":116,"y":521,"width":748,"height":12}},{"id":"75921348-cc9f-4930-8bd0-7baedfb2ada1","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":165,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"bfc9a2a8-0d2f-4519-a24a-7863d34875a5","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the transaction meets the","page_number":165,"box":{"x":116,"y":552,"width":718,"height":12}},{"id":"6bee11af-5be8-495b-af86-dbf4069362ef","block_type":"box","text":"Delayed-Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed","page_number":165,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"adf43873-a72f-49bb-ac7d-4fbae7c369f2","block_type":"box","text":"Delivery Securities and Forward Commitments”). If a when-issued, forward-settling or non-standard","page_number":165,"box":{"x":117,"y":583,"width":742,"height":12}},{"id":"9b15129f-9978-424d-a6e0-01319094b1b0","block_type":"box","text":"settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then it is treated","page_number":165,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"7a88d84c-af1f-4fa3-aba1-e3f22f36217c","block_type":"box","text":"as a Derivatives Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":165,"box":{"x":116,"y":614,"width":736,"height":12}},{"id":"929777b9-dc3d-4255-bdc7-2f2170cfdabb","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":165,"box":{"x":117,"y":630,"width":411,"height":12}},{"id":"ab3628ed-0956-4600-b3d5-5ecc8b84fba7","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":165,"box":{"x":117,"y":661,"width":270,"height":12}},{"id":"1ca07ed1-a0dd-4694-a3a1-fdac0faea8af","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities.","page_number":165,"box":{"x":394,"y":661,"width":438,"height":12}},{"id":"65405fb9-ac5f-442f-b6d9-af0d003a0ea4","block_type":"box","text":"These securities are derivative interest-only mortgage securities structured off home equity loan","page_number":165,"box":{"x":116,"y":676,"width":711,"height":12}},{"id":"fd2d3587-00be-44c3-88c2-879d2e4ae3c1","block_type":"box","text":"transactions. NIM securities receive any “excess” interest computed after paying coupon costs,","page_number":165,"box":{"x":116,"y":692,"width":704,"height":12}},{"id":"28608e0e-2852-4554-8617-56853f897983","block_type":"box","text":"servicing costs and fees and any credit losses associated with the underlying pool of home equity","page_number":165,"box":{"x":116,"y":707,"width":724,"height":12}},{"id":"37203604-b69d-46da-b609-1c48b4fcb793","block_type":"box","text":"loans. Like traditional stripped mortgage-backed securities, the yield to maturity on a NIM security is","page_number":165,"box":{"x":117,"y":723,"width":740,"height":12}},{"id":"d31c3ca6-2650-4512-993f-96147ca23150","block_type":"box","text":"sensitive not only to changes in prevailing interest rates but also to the rate of principal payments","page_number":165,"box":{"x":116,"y":738,"width":720,"height":12}},{"id":"3c9c9013-55d3-474c-b586-2fb1d140e6b4","block_type":"box","text":"(including prepayments) on the underlying home equity loans. NIM securities are highly sensitive to","page_number":165,"box":{"x":117,"y":754,"width":735,"height":12}},{"id":"af94cb98-95c4-433f-8046-2344dfa4e112","block_type":"box","text":"credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":165,"box":{"x":116,"y":769,"width":651,"height":12}},{"id":"a3e40f0a-4334-4f8b-bdb7-7d3fd9b5065b","block_type":"box","text":"Municipal Investments.","page_number":165,"box":{"x":116,"y":800,"width":177,"height":12}},{"id":"e7e02c7f-b6d4-46e8-a902-b5da222a99b5","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of","page_number":165,"box":{"x":117,"y":823,"width":759,"height":13}},{"id":"f6ebb165-7a94-4438-af2b-140cde4a064b","block_type":"box","text":"the United States and the District of Columbia and their political subdivisions, agencies and","page_number":165,"box":{"x":116,"y":839,"width":681,"height":12}},{"id":"1be2f6d1-294f-4447-8baf-8fbc815f6ac7","block_type":"box","text":"instrumentalities, the payments from which, in the opinion of bond counsel to the issuer, are excludable","page_number":165,"box":{"x":117,"y":854,"width":770,"height":13}},{"id":"8a344829-d35b-476f-a986-9f7a255a61b8","block_type":"box","text":"from gross income for U.S. federal income tax purposes (“Municipal Bonds”). Certain of the Municipal","page_number":165,"box":{"x":116,"y":870,"width":758,"height":12}},{"id":"e94a4fb7-310a-4e18-9d66-f0a81ad8910a","block_type":"box","text":"II-71","page_number":165,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"191433b7-45c9-4afb-bc23-5f70712a074a","block_type":"box","text":"NM1026U-6004408-165/267","page_number":165,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d852812e-1ead-4a55-b45d-3ebcb3c307ed","block_type":"box","text":"Funds may also invest in Municipal Bonds that pay interest excludable from gross income for purposes","page_number":166,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"53c6d7f2-62aa-4b39-b67c-e45129f77cd3","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":166,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"8c7e3a95-b530-4371-9ac3-653e47a5074d","block_type":"box","text":"exempt from state and local taxes of the designated state (“State Municipal Bonds”). The Municipal","page_number":166,"box":{"x":116,"y":118,"width":740,"height":12}},{"id":"66904c46-2f30-4bb5-9317-b4a760c03512","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":166,"box":{"x":117,"y":134,"width":762,"height":12}},{"id":"b7689467-5d42-479f-9b73-7740546431ae","block_type":"box","text":"instrumentality thereof, if the Manager believes such securities to pay interest excludable from gross","page_number":166,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"55a1d0aa-17fd-4a89-8ab8-a35d824228d3","block_type":"box","text":"income for purposes of U.S. federal income tax and state and local income taxes of the designated","page_number":166,"box":{"x":117,"y":165,"width":738,"height":12}},{"id":"15787029-c321-4de6-9bda-df3a40a226be","block_type":"box","text":"state and/or state and local personal property taxes of the designated state (“Non-Municipal","page_number":166,"box":{"x":116,"y":180,"width":686,"height":12}},{"id":"af5155ea-f098-4dda-ba44-0ef5d246dbe2","block_type":"box","text":"Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":166,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"92908d4a-e9b3-40ef-8fe6-97881b14a8ff","block_type":"box","text":"instruments evidencing interest in one or more long-term municipal securities. Non-Municipal","page_number":166,"box":{"x":117,"y":211,"width":693,"height":12}},{"id":"985b046d-b43e-4844-9ae4-7c9aa6669f64","block_type":"box","text":"Tax-Exempt Securities also may include securities issued by other investment companies that invest in","page_number":166,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"7e632bc3-6767-4a8a-bf90-37cafb90dedb","block_type":"box","text":"municipal bonds, to the extent such investments are permitted by applicable law. Non-Municipal","page_number":166,"box":{"x":117,"y":242,"width":715,"height":12}},{"id":"93424b57-837c-4999-80f2-c3d81f57117f","block_type":"box","text":"Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":166,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"2af0d1f6-52e2-44bc-866f-9e38cc2e81ff","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective","page_number":166,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"c5a92c9e-cecc-4a71-84cf-3ff7afe32d21","block_type":"box","text":"and policies. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for","page_number":166,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"a1e9f97b-6883-40f9-97af-f8559390ad96","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":166,"box":{"x":117,"y":304,"width":734,"height":12}},{"id":"a7cf35a7-1123-4322-8eab-fa86d6606776","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":166,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"b7c13e32-bfe9-482b-8a46-c3cb8c92eb9c","block_type":"box","text":"state will be considered “State Municipal Bonds” for purposes of the investment objective and policies","page_number":166,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"ea302ec4-c779-43e8-b8dd-520610448b78","block_type":"box","text":"of each of California Municipal Opportunities Fund, New Jersey Municipal Bond Fund, New York","page_number":166,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"ebd3121d-80b1-4aae-a2c6-f174eacc52ab","block_type":"box","text":"Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":166,"box":{"x":117,"y":366,"width":527,"height":12}},{"id":"09696de7-6a3a-468f-a391-d70bec059563","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":166,"box":{"x":116,"y":397,"width":519,"height":12}},{"id":"a175c489-a9fe-4a48-9048-47eb0cfbe4ac","block_type":"box","text":"The risks and special","page_number":166,"box":{"x":636,"y":397,"width":168,"height":12}},{"id":"9d649022-46f0-442f-900c-04e34d3d92c2","block_type":"box","text":"considerations involved in investment in Municipal Bonds vary with the types of instruments being","page_number":166,"box":{"x":116,"y":413,"width":729,"height":12}},{"id":"44ba9042-2fad-4e29-bce8-19d45aae2bcb","block_type":"box","text":"acquired. Investments in Non-Municipal Tax-Exempt Securities may present similar risks, depending","page_number":166,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"5f0293f3-e7e5-4052-910f-9a7bddb7943b","block_type":"box","text":"on the particular product. Certain municipal instruments in which a Fund may invest may be","page_number":166,"box":{"x":116,"y":444,"width":685,"height":12}},{"id":"fd44c2d4-2c62-4811-b945-08b9a4c165d9","block_type":"box","text":"characterized as derivatives.","page_number":166,"box":{"x":116,"y":459,"width":218,"height":10}},{"id":"c461d2aa-831a-4278-978f-365c11fbbfe4","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a","page_number":166,"box":{"x":116,"y":490,"width":768,"height":12}},{"id":"c07b97b9-1289-419c-95c8-81287ad1768b","block_type":"box","text":"result of legislation or litigation, including legislation or litigation that changes the taxation of Municipal","page_number":166,"box":{"x":117,"y":506,"width":757,"height":12}},{"id":"a2f62b37-beee-4d77-8659-0e301311de65","block_type":"box","text":"Bonds or the rights of Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are","page_number":166,"box":{"x":117,"y":521,"width":764,"height":12}},{"id":"3f6ae351-0f07-427b-9d39-484d40cf1018","block_type":"box","text":"rare and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear.","page_number":166,"box":{"x":117,"y":537,"width":732,"height":12}},{"id":"ac90cfa1-1ca0-4d65-b502-a5e33861f7c3","block_type":"box","text":"Further, the application of state law to Municipal Bond issuers could produce varying results among the","page_number":166,"box":{"x":117,"y":552,"width":770,"height":12}},{"id":"4c2873d2-a1fd-4dfa-8713-c7d1fb4d8830","block_type":"box","text":"states or among Municipal Bond issuers within a state. These uncertainties could have a significant","page_number":166,"box":{"x":116,"y":568,"width":742,"height":12}},{"id":"3e8883c4-1d30-4978-90ae-222f8f33d838","block_type":"box","text":"impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":166,"box":{"x":117,"y":583,"width":513,"height":12}},{"id":"47e8042b-800b-465b-a446-83416e17e4f6","block_type":"box","text":"Description of Municipal Bonds.","page_number":166,"box":{"x":116,"y":614,"width":240,"height":12}},{"id":"868b2e59-d096-41c3-b45d-4606c22bb920","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including","page_number":166,"box":{"x":117,"y":637,"width":757,"height":12}},{"id":"654c9897-30bb-4285-8ec7-b28ac198be26","block_type":"box","text":"the construction of a wide range of public facilities, refunding of outstanding obligations and obtaining","page_number":166,"box":{"x":116,"y":653,"width":756,"height":12}},{"id":"ec6c6487-58f8-44be-a691-0e94c454cf70","block_type":"box","text":"funds for general operating expenses and loans to other public institutions and facilities. In addition,","page_number":166,"box":{"x":116,"y":668,"width":737,"height":12}},{"id":"b5a525ee-bc74-4790-8a75-04198499488f","block_type":"box","text":"certain types of bonds are issued by or on behalf of public authorities to finance various privately","page_number":166,"box":{"x":116,"y":684,"width":716,"height":12}},{"id":"a4179161-d23c-4b2a-bb4b-74a5063922b3","block_type":"box","text":"owned or operated facilities, including certain facilities for the local furnishing of electric energy or gas,","page_number":166,"box":{"x":116,"y":699,"width":757,"height":13}},{"id":"6f91eccf-c249-4ac1-a640-350cabcc0444","block_type":"box","text":"sewage facilities, solid waste disposal facilities and other specialized facilities. Such obligations are","page_number":166,"box":{"x":116,"y":715,"width":735,"height":12}},{"id":"09d1cc56-f326-4cb5-9342-ab3abdd34622","block_type":"box","text":"included within the term Municipal Bonds if the interest paid thereon is excluded from gross income for","page_number":166,"box":{"x":117,"y":730,"width":760,"height":13}},{"id":"0ab1e630-6e22-43fa-b42d-d01934c8dc5d","block_type":"box","text":"U.S. federal income tax purposes and any applicable state and local taxes. Other types of private","page_number":166,"box":{"x":117,"y":746,"width":721,"height":12}},{"id":"cca17e6b-7849-4ea2-9400-4d55debef34a","block_type":"box","text":"activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":166,"box":{"x":116,"y":761,"width":722,"height":13}},{"id":"88becdf4-8826-45ea-8acb-fae2b17c989b","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the","page_number":166,"box":{"x":117,"y":777,"width":727,"height":12}},{"id":"5a9cb6b7-cfd9-488b-9167-2a53a713ca55","block_type":"box","text":"current U.S. federal tax laws place substantial limitations on the size of such issues. The interest on","page_number":166,"box":{"x":116,"y":792,"width":739,"height":12}},{"id":"f689ed2b-1c74-4b73-a9aa-8d7350a9a299","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":166,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"17e3e649-4986-4e1c-803e-7ccef7f56458","block_type":"box","text":"classifications of Municipal Bonds are “general obligation” and “revenue” or “special obligation” bonds,","page_number":166,"box":{"x":116,"y":823,"width":756,"height":13}},{"id":"ff77f1b4-683e-4bf1-a8c2-107075552df6","block_type":"box","text":"which latter category includes private activity bonds (“PABs”) (or “industrial development bonds” under","page_number":166,"box":{"x":116,"y":839,"width":764,"height":12}},{"id":"059aab77-4a65-4097-9929-932f8d6a26d8","block_type":"box","text":"pre-1986 law).","page_number":166,"box":{"x":117,"y":854,"width":111,"height":13}},{"id":"933be54b-1be9-4456-8ba2-29742e1b5d6c","block_type":"box","text":"II-72","page_number":166,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"451f03cf-bfd7-4c6d-a32e-f11cb7e21ea4","block_type":"box","text":"NM1026U-6004408-166/267","page_number":166,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"edd5002d-f263-4f02-8f60-892792cf7625","block_type":"box","text":"General Obligation Bonds.","page_number":167,"box":{"x":117,"y":87,"width":194,"height":12}},{"id":"63891274-5f24-4fa9-9244-08b576049ac7","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith,","page_number":167,"box":{"x":313,"y":87,"width":565,"height":12}},{"id":"24c67ec5-0f63-4f8d-9b05-ba60ba3ea4ff","block_type":"box","text":"credit and taxing power for the payment of principal and interest. The taxing power of any","page_number":167,"box":{"x":116,"y":102,"width":668,"height":13}},{"id":"ae19d139-8f7f-40f7-8a8d-432bb6c22431","block_type":"box","text":"governmental entity may be limited, however, by provisions of its state constitution or laws, and an","page_number":167,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"da1f42d3-62b2-4038-84a5-f4b089df460f","block_type":"box","text":"entity’s creditworthiness will depend on many factors, including potential erosion of its tax base due to","page_number":167,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"c5f4014d-5442-446c-b433-e081586acd5d","block_type":"box","text":"population declines, natural disasters, declines in the state’s industrial base or inability to attract new","page_number":167,"box":{"x":117,"y":149,"width":750,"height":12}},{"id":"690005ac-482e-457d-9e1b-589ca117386f","block_type":"box","text":"industries, economic limits on the ability to tax without eroding the tax base, state legislative proposals","page_number":167,"box":{"x":117,"y":165,"width":762,"height":12}},{"id":"e46f955f-2be2-4057-9e4a-be82725e95e7","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":167,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"03c5188d-ec83-461a-aded-a144597bef14","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":167,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"d35474d7-c030-48b0-92c0-1657cac0ad04","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest","page_number":167,"box":{"x":116,"y":211,"width":765,"height":12}},{"id":"080f566b-2fb7-4dd8-8472-a02281d79421","block_type":"box","text":"and the repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":167,"box":{"x":116,"y":227,"width":717,"height":12}},{"id":"e7b02bc4-0b6e-45b7-8e0f-701642a46e38","block_type":"box","text":"Revenue Bonds.","page_number":167,"box":{"x":116,"y":258,"width":122,"height":9}},{"id":"92fb4cd1-d8c7-497e-8819-901cd85df1d6","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility","page_number":167,"box":{"x":240,"y":258,"width":634,"height":12}},{"id":"6e38c4f6-91df-439f-8fbd-c83f48bf67fe","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":167,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"6d10f2b4-85d4-4a80-9da3-46143ea268ef","block_type":"box","text":"revenue source such as payments from the user of the facility being financed; accordingly, the timely","page_number":167,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"ddfa0bb5-8f80-40d9-8e45-28566404d21c","block_type":"box","text":"payment of interest and the repayment of principal in accordance with the terms of the revenue or","page_number":167,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"7a54a1a2-96dc-4c97-aae0-bc512e6f705d","block_type":"box","text":"special obligation bond is a function of the economic viability of such facility or such revenue source.","page_number":167,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"3918e8a9-f5e2-459e-bf7d-b099d1ada66e","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi","page_number":167,"box":{"x":117,"y":351,"width":730,"height":12}},{"id":"3e25a2cc-d885-4a8f-b8aa-eeff63ae6185","block_type":"box","text":"family housing involve special risks in addition to those associated with municipal bonds generally,","page_number":167,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"ac084c1a-8a99-43be-972c-342219656fc9","block_type":"box","text":"including that the underlying properties may not generate sufficient income to pay expenses and","page_number":167,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"7fb6b595-cb41-4e6c-8392-fee8892ed608","block_type":"box","text":"interest costs. Such bonds are generally non-recourse against the property owner, may be junior to the","page_number":167,"box":{"x":117,"y":397,"width":768,"height":12}},{"id":"e584826d-d351-4bf9-82cb-ef398f4b58f1","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":167,"box":{"x":117,"y":413,"width":746,"height":12}},{"id":"d434e3de-45c0-45eb-a062-f08fb99c9b6e","block_type":"box","text":"financial performance of the property, may be prepayable without penalty and may be used to finance","page_number":167,"box":{"x":116,"y":428,"width":760,"height":12}},{"id":"fe2c6323-f5ce-4f3c-b7c3-566445c89389","block_type":"box","text":"the construction of housing developments which, until completed and rented, do not generate income","page_number":167,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"637dc3b7-a85e-4c79-ad04-f647722406f0","block_type":"box","text":"to pay interest. Increases in interest rates payable on senior obligations may make it more difficult for","page_number":167,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"a88d8108-5a93-47b6-b537-3e52e0974dda","block_type":"box","text":"issuers to meet payment obligations on subordinated bonds.","page_number":167,"box":{"x":117,"y":475,"width":452,"height":12}},{"id":"730c824a-69d4-4890-8717-bca712ccdd9d","block_type":"box","text":"PABs.","page_number":167,"box":{"x":116,"y":506,"width":45,"height":9}},{"id":"d6f5631f-fa63-4262-adad-a4cc75ab266e","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public","page_number":167,"box":{"x":162,"y":506,"width":666,"height":12}},{"id":"ca108500-a701-4fb0-8545-cc65eb0a23b7","block_type":"box","text":"authorities to provide funds, usually through a loan or lease arrangement, to a private entity for the","page_number":167,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"20c882fe-f8b6-4c5c-80c5-4109e2e4f5e6","block_type":"box","text":"purpose of financing construction or improvement of a facility to be used by the entity. Such bonds are","page_number":167,"box":{"x":117,"y":537,"width":762,"height":12}},{"id":"31b816d4-d81c-4314-b9fb-65a434a8b9df","block_type":"box","text":"secured primarily by revenues derived from loan repayments or lease payments due from the entity,","page_number":167,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"a8db6595-bd9e-480e-9001-0ae7f6ac804a","block_type":"box","text":"which may or may not be guaranteed by a parent company or otherwise secured. PABs generally are","page_number":167,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"10c08e20-716c-4328-93ef-8c4e57ab437a","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":167,"box":{"x":117,"y":583,"width":764,"height":12}},{"id":"4254c818-8898-4306-9dbd-eff837e1535a","block_type":"box","text":"understand that repayment of such bonds generally depends on the revenues of a private entity and be","page_number":167,"box":{"x":117,"y":599,"width":771,"height":12}},{"id":"ccabec63-6633-46b9-9d21-eae248490a4e","block_type":"box","text":"aware of the risks that such an investment may entail. The continued ability of an entity to generate","page_number":167,"box":{"x":116,"y":614,"width":741,"height":12}},{"id":"3be3e3d8-fc8d-474f-b03a-e50f75618553","block_type":"box","text":"sufficient revenues for the payment of principal and interest on such bonds will be affected by many","page_number":167,"box":{"x":116,"y":630,"width":744,"height":12}},{"id":"3bfe42a9-ddfe-4a8b-81e8-b67da0f03677","block_type":"box","text":"factors including the size of the entity, its capital structure, demand for its products or services,","page_number":167,"box":{"x":116,"y":645,"width":707,"height":12}},{"id":"f58590a0-6895-4b4f-9950-d6203d992090","block_type":"box","text":"competition, general economic conditions, government regulation and the entity’s dependence on","page_number":167,"box":{"x":116,"y":661,"width":723,"height":12}},{"id":"8c2e4db6-8b12-40e4-81d7-ebe90399d41f","block_type":"box","text":"revenues for the operation of the particular facility being financed.","page_number":167,"box":{"x":117,"y":676,"width":485,"height":12}},{"id":"8dd04cd8-4aa8-4383-a8e2-e17201c7e57c","block_type":"box","text":"Moral Obligation Bonds.","page_number":167,"box":{"x":116,"y":707,"width":178,"height":12}},{"id":"3204f3c6-9efd-437a-b35e-13374f19ab29","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public","page_number":167,"box":{"x":301,"y":707,"width":523,"height":12}},{"id":"f2786db9-9be8-4662-8238-b8d21fdbfae3","block_type":"box","text":"authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of","page_number":167,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"8aa4b74d-fae9-4e7d-b91f-268369ff04f1","block_type":"box","text":"such bonds becomes a moral commitment but not a legal obligation of the state or municipality that","page_number":167,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"d213b99e-5350-46d1-a1a7-faabdebef031","block_type":"box","text":"created the special purpose public authority that issued the bonds.","page_number":167,"box":{"x":116,"y":754,"width":492,"height":12}},{"id":"14ad441c-0e7e-4320-acc5-2e7d1ee0420d","block_type":"box","text":"Municipal Notes.","page_number":167,"box":{"x":116,"y":785,"width":122,"height":12}},{"id":"a304e6ac-ec5f-49a0-85fb-aec64e71ad10","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim","page_number":167,"box":{"x":246,"y":785,"width":636,"height":12}},{"id":"15b3879a-e3fe-401e-8b18-ff7c9d5cb8d2","block_type":"box","text":"financing in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the","page_number":167,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"d6836790-47f3-4224-a1a6-03c2e7ef8e7d","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":167,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"ab54b7f1-d824-4261-acd4-71c21e9ba4af","block_type":"box","text":"Fund may lose money.","page_number":167,"box":{"x":117,"y":831,"width":174,"height":12}},{"id":"9a612014-4812-4752-92c3-a0da46b9ca9b","block_type":"box","text":"Municipal Commercial Paper.","page_number":167,"box":{"x":116,"y":862,"width":218,"height":12}},{"id":"1b2fb261-48eb-4898-aec0-f85257f8582e","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet","page_number":167,"box":{"x":335,"y":862,"width":539,"height":12}},{"id":"34f2edab-a3c9-4cde-a968-2307cf51b643","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":167,"box":{"x":116,"y":878,"width":728,"height":12}},{"id":"378a8510-b500-4a39-ad2f-a9cce60e587b","block_type":"box","text":"II-73","page_number":167,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0a24a937-44a3-477f-adbb-0c3b66719ccd","block_type":"box","text":"NM1026U-6004408-167/267","page_number":167,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"06b9ec24-4fb7-4684-bd84-71ffc65d2783","block_type":"box","text":"event of an issuer’s bankruptcy, unsecured creditors are repaid only after the secured creditors out of","page_number":168,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"45e5b45e-f268-44cd-bc66-9b0c1d62b9de","block_type":"box","text":"the assets, if any, that remain.","page_number":168,"box":{"x":116,"y":102,"width":229,"height":13}},{"id":"f1cf41a0-eac5-414d-ba8e-3e163fbf6c4e","block_type":"box","text":"Municipal Lease Obligations.","page_number":168,"box":{"x":116,"y":134,"width":213,"height":12}},{"id":"c675fe12-eb70-4f55-b395-42ec40eb4ca4","block_type":"box","text":"Also included within the general category of Municipal Bonds are","page_number":168,"box":{"x":331,"y":134,"width":491,"height":12}},{"id":"16369a83-23ff-4ae7-82dd-856c41a27d68","block_type":"box","text":"certificates of participation (“COPs”) issued by government authorities or entities to finance the","page_number":168,"box":{"x":116,"y":149,"width":706,"height":12}},{"id":"71d8857f-9a75-4684-b19a-db35d6c52997","block_type":"box","text":"acquisition or construction of equipment, land and/or facilities. The COPs represent participations in a","page_number":168,"box":{"x":116,"y":165,"width":758,"height":11}},{"id":"0f6e72fa-478b-450a-9267-50b51567cb23","block_type":"box","text":"lease, an installment purchase contract or a conditional sales contract (hereinafter collectively called","page_number":168,"box":{"x":117,"y":180,"width":748,"height":12}},{"id":"abbd1796-6545-4b72-8497-fe28b0029c6e","block_type":"box","text":"“lease obligations”) relating to such equipment, land or facilities. Municipal leases, like other municipal","page_number":168,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"c5ae4c74-51d9-4baf-81a6-0ad6b54e1f7f","block_type":"box","text":"debt obligations, are subject to the risk of non-payment. Although lease obligations do not constitute","page_number":168,"box":{"x":116,"y":211,"width":747,"height":12}},{"id":"88d25ead-b670-4bdd-bae3-947ec51b7985","block_type":"box","text":"general obligations of the issuer for which the issuer’s unlimited taxing power is pledged, a lease","page_number":168,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"50d55942-5836-49b2-b364-746c542384c6","block_type":"box","text":"obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":168,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"ad2246bc-7e2c-4ab6-8077-6bfa4180bbb3","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain","page_number":168,"box":{"x":117,"y":258,"width":631,"height":12}},{"id":"d29a94d5-7b04-4e12-acbf-d4fb73e8c3e4","block_type":"box","text":"“non-appropriation” clauses, which provide that the issuer has no obligation to make lease or","page_number":168,"box":{"x":116,"y":273,"width":693,"height":12}},{"id":"0dc9b7d8-58d4-4e4f-8c87-e9472d6eddb4","block_type":"box","text":"installment purchase payments in future years unless money is appropriated for such purpose on a","page_number":168,"box":{"x":117,"y":289,"width":739,"height":12}},{"id":"d155f780-4041-4720-9118-69af565e4fa1","block_type":"box","text":"yearly basis. Although “non-appropriation” lease obligations are secured by the leased property,","page_number":168,"box":{"x":116,"y":304,"width":716,"height":12}},{"id":"9647ef5d-558b-4f4f-8203-1df7df716767","block_type":"box","text":"disposition of the property in the event of foreclosure might prove difficult. These securities represent a","page_number":168,"box":{"x":116,"y":320,"width":767,"height":12}},{"id":"0e3f5aff-fe90-4024-b5c5-21eb9cf43b91","block_type":"box","text":"type of financing that has not yet developed the depth of marketability associated with more","page_number":168,"box":{"x":116,"y":335,"width":685,"height":12}},{"id":"37b5cdb5-035c-4475-bd5b-b7553feb08db","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":168,"box":{"x":116,"y":351,"width":596,"height":12}},{"id":"da7cabc8-637e-412b-835e-3c216a8f3bf7","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in","page_number":168,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"cd89d295-8394-4e6e-917c-e8ac83ffd928","block_type":"box","text":"general economic downturns and as relative governmental cost burdens are allocated and reallocated","page_number":168,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"5931ae3a-f22c-44a7-a845-92babe05176a","block_type":"box","text":"among federal, state and local governmental units. Such non-payment would result in a reduction of","page_number":168,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"7586473e-bcc3-4e9a-a514-e27d6a899742","block_type":"box","text":"income to a Fund, and could result in a reduction in the value of the municipal lease experiencing","page_number":168,"box":{"x":117,"y":428,"width":726,"height":12}},{"id":"a19d23b8-c275-45cd-9e93-7ad5fb8571a3","block_type":"box","text":"non-payment and a potential decrease in the NAV of a Fund. Issuers of municipal securities might","page_number":168,"box":{"x":117,"y":444,"width":731,"height":12}},{"id":"15618a00-479a-44c5-bbfc-b819fbb41954","block_type":"box","text":"seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could","page_number":168,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"f39f88cf-27cf-45b8-a9c0-c227b16bc032","block_type":"box","text":"experience delays and limitations with respect to the collection of principal and interest on such","page_number":168,"box":{"x":116,"y":475,"width":711,"height":12}},{"id":"e1cc37a3-eb80-42d2-a8f3-b32001187954","block_type":"box","text":"municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest","page_number":168,"box":{"x":117,"y":490,"width":755,"height":12}},{"id":"54e8ad1b-6781-4d87-b6c6-2bccc4f48baf","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":168,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"4e585717-885f-4261-a546-128fe075a996","block_type":"box","text":"take possession of and manage the assets securing the issuer’s obligations on such securities, which","page_number":168,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"c725fec5-a3f2-419c-8e04-5fbb502b4055","block_type":"box","text":"may increase a Fund’s operating expenses and adversely affect the NAV of a Fund. When the lease","page_number":168,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"b6f7f357-fd2d-4f9d-a7ac-e399bcc8b3cc","block_type":"box","text":"contains a non-appropriation clause, however, the failure to pay would not be a default and a Fund","page_number":168,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"9977d852-4c56-4074-b322-57a49561e2d9","block_type":"box","text":"would not have the right to take possession of the assets. Any income derived from a Fund’s","page_number":168,"box":{"x":116,"y":568,"width":692,"height":12}},{"id":"c4228782-58db-42e2-82a1-1b530c0c1846","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":168,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"4650408a-5c5e-426b-a1bd-7f97dc064f57","block_type":"box","text":"as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":168,"box":{"x":116,"y":599,"width":717,"height":12}},{"id":"823b5a17-4b67-4848-a060-0182acbf0354","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a","page_number":168,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"84747cba-4779-4d62-9802-7ed8c3e848ae","block_type":"box","text":"Fund is subject to certain limitations on its investments and on the nature of its income.","page_number":168,"box":{"x":117,"y":630,"width":650,"height":12}},{"id":"9692cf7b-2694-4cdb-860a-d3b5ff30d7d8","block_type":"box","text":"Tender Option Bonds.","page_number":168,"box":{"x":118,"y":661,"width":161,"height":12}},{"id":"43ae10fb-2c71-44c2-8833-4ef98786bc33","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option","page_number":168,"box":{"x":286,"y":661,"width":585,"height":12}},{"id":"e673e01f-1de9-4684-aa29-8a83f40476e9","block_type":"box","text":"bonds (“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in","page_number":168,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"4fd9d621-f5b7-4ed4-baeb-af5503b8f53d","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":168,"box":{"x":116,"y":692,"width":710,"height":12}},{"id":"f4d08a78-bcd9-4283-94bc-9707cd70085f","block_type":"box","text":"exempt from regular U.S. federal income tax. BlackRock will not conduct its own analysis of the tax","page_number":168,"box":{"x":116,"y":707,"width":735,"height":12}},{"id":"1060e5e9-6123-4490-bfcb-20f0dae41314","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":168,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"549b3f59-3a57-4c2d-a41b-506ccb742d6b","block_type":"box","text":"counsel to the issuer. Although volatile, TOB Residuals typically offer the potential for yields exceeding","page_number":168,"box":{"x":116,"y":738,"width":761,"height":12}},{"id":"c1bacfd0-606a-456d-9584-e68ee1091c04","block_type":"box","text":"the yields available on fixed rate Municipal Bonds with comparable credit quality. The Funds may","page_number":168,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"e475482e-e553-4c75-a0e0-a2b79361a348","block_type":"box","text":"invest in TOB Residuals for the purpose of using economic leverage.","page_number":168,"box":{"x":117,"y":769,"width":509,"height":12}},{"id":"579cbce3-eca7-4b25-9633-5548a9c6cdad","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of","page_number":168,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"c467b739-2ecc-49f3-a41b-31a70868cca9","block_type":"box","text":"holding Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically","page_number":168,"box":{"x":117,"y":816,"width":719,"height":12}},{"id":"bae0efc2-be1a-4164-b5f7-4241b6566e4a","block_type":"box","text":"issues two classes of beneficial interests: short-term floating rate interests (“TOB Floaters”), which are","page_number":168,"box":{"x":117,"y":831,"width":762,"height":12}},{"id":"84674971-9440-401b-b6d1-619211398567","block_type":"box","text":"sold to third-party investors, and TOB Residuals, which are generally issued to the fund(s) that","page_number":168,"box":{"x":116,"y":847,"width":706,"height":12}},{"id":"b0e77ae0-943b-41a8-a912-485bf40ac78d","block_type":"box","text":"transferred Municipal Bonds to the TOB Trust. The Funds may invest in both TOB Floaters and TOB","page_number":168,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"3bd18e2a-894c-4f6c-b2c2-bb06772469eb","block_type":"box","text":"Residuals. TOB Floaters may have first priority on the cash flow from the Municipal Bonds held by the","page_number":168,"box":{"x":117,"y":878,"width":759,"height":12}},{"id":"5063d100-4b1b-40f2-a233-ade2c1f1ccfe","block_type":"box","text":"II-74","page_number":168,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3cff3d03-9f15-4242-8126-4bcabc137736","block_type":"box","text":"NM1026U-6004408-168/267","page_number":168,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"71a674aa-9c0f-493a-ac7b-ca2f1467d72b","block_type":"box","text":"TOB Trust and are enhanced with a liquidity support arrangement from a third-party Liquidity Provider","page_number":169,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"add97b6d-c3dc-4a0e-abf1-bc9ff650a358","block_type":"box","text":"(defined below) which allows holders to tender their position at par (plus accrued interest). A Fund, as","page_number":169,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"c7cf8351-7e67-4587-89a4-dc49af237052","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":169,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"ad0400f1-6931-447c-b6fc-f9dd3db361e2","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":169,"box":{"x":116,"y":134,"width":757,"height":12}},{"id":"94859388-af02-42a1-90e0-9134ee0d7369","block_type":"box","text":"TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional","page_number":169,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"434155ca-34d6-4729-abb9-be0571833455","block_type":"box","text":"Municipal Bonds or other investments permitted by its investment policies. If a Fund ever purchases all","page_number":169,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"20da3698-fb4f-4dd2-bec4-8b19e6c5ece4","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":169,"box":{"x":116,"y":180,"width":758,"height":12}},{"id":"83868f88-a329-4ee6-82cf-084bcfb9cf2f","block_type":"box","text":"with a proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate","page_number":169,"box":{"x":116,"y":196,"width":717,"height":12}},{"id":"d8d2b4c7-468e-45b0-a9f0-cb55740e287d","block_type":"box","text":"amount of the Municipal Bonds owned by the TOB Trust.","page_number":169,"box":{"x":116,"y":211,"width":427,"height":12}},{"id":"0e945ef9-ff1c-43ec-beaa-f0aadd4145c9","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has","page_number":169,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"f56f8e62-6ec0-4974-8d08-9adaf8b753da","block_type":"box","text":"contributed Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust,","page_number":169,"box":{"x":116,"y":258,"width":752,"height":11}},{"id":"3dc490e8-893c-4364-977b-56b8ffa66927","block_type":"box","text":"the economic rights and obligations under the TOB Residual will generally be shared among the funds","page_number":169,"box":{"x":116,"y":273,"width":764,"height":12}},{"id":"bcb742ca-20e2-451b-81f7-6e11b5f70319","block_type":"box","text":"ratably in proportion to their participation in the TOB Trust.","page_number":169,"box":{"x":117,"y":289,"width":437,"height":12}},{"id":"2ed4ca19-b40a-4e8e-92ea-00a9ffed3827","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain","page_number":169,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"7550125f-33ac-40c5-96e7-d60d2a480857","block_type":"box","text":"cases, when Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction","page_number":169,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"0b9f08a9-cc69-46f5-81d8-d3b97839c0e4","block_type":"box","text":"includes a credit enhancement feature that provides for the timely payment of principal and interest on","page_number":169,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"c5906e79-3191-4205-b1b9-c2b113822ad5","block_type":"box","text":"the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for","page_number":169,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"565eb29e-ebfb-4cbb-85ad-c47ab7fc5bf3","block_type":"box","text":"the payment of the credit enhancement fee and a Fund, as a TOB Residual holder, would be","page_number":169,"box":{"x":116,"y":382,"width":693,"height":12}},{"id":"f4a85876-ec2d-42b7-bea7-1f995990e231","block_type":"box","text":"responsible for reimbursement of any payments of principal and interest made by the credit","page_number":169,"box":{"x":117,"y":397,"width":681,"height":12}},{"id":"f79b6cea-dfee-40d1-8675-acfc47042154","block_type":"box","text":"enhancement provider.","page_number":169,"box":{"x":116,"y":413,"width":176,"height":12}},{"id":"12f3f462-9579-49a8-a6ac-78754b7276e1","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":169,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"a21c2a66-505e-490a-b191-e264d95f4f0d","block_type":"box","text":"proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued","page_number":169,"box":{"x":117,"y":459,"width":722,"height":12}},{"id":"3ee9e3cf-24a0-45a9-8e54-fece77f8bb92","block_type":"box","text":"interest. Thereafter, the Fund may withdraw a corresponding share of the Municipal Bonds from the","page_number":169,"box":{"x":117,"y":475,"width":743,"height":12}},{"id":"572d5730-2493-47fc-a15e-1b85b4ad25fb","block_type":"box","text":"TOB Trust. This transaction, in effect, creates exposure for the Fund to the entire return of the","page_number":169,"box":{"x":116,"y":490,"width":702,"height":12}},{"id":"6dfad0ac-0c43-44ca-8091-3948b9a72792","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":169,"box":{"x":117,"y":506,"width":770,"height":12}},{"id":"52635c16-83eb-4873-beb6-1598d24761b9","block_type":"box","text":"the Municipal Bonds in the TOB Trust. This multiplies the positive or negative impact of the Municipal","page_number":169,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"6bae4b74-f5f9-4448-bac9-ebc23817b2d6","block_type":"box","text":"Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust depends","page_number":169,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"59fd9a8f-30ce-4475-8184-0594846f1ff5","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":169,"box":{"x":116,"y":552,"width":714,"height":12}},{"id":"4bfa275c-8aad-4da4-8a7f-b269612f49a6","block_type":"box","text":"Floaters it issues.","page_number":169,"box":{"x":117,"y":568,"width":134,"height":9}},{"id":"3c3742a8-665f-4f32-af61-0349a0ac591e","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly","page_number":169,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"721dd630-d25e-4df2-90af-33a9ab1a19b8","block_type":"box","text":"leveraged if the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of","page_number":169,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"18d6d752-1195-4d40-86a3-f09d46431228","block_type":"box","text":"the principal amount of the Municipal Bonds owned by the TOB Trust.","page_number":169,"box":{"x":116,"y":630,"width":523,"height":12}},{"id":"511d0ac1-2658-4861-ba1b-f0d5637c3e3e","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option","page_number":169,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"f573f840-1b7d-4515-9de0-416571aa6cb4","block_type":"box","text":"termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust","page_number":169,"box":{"x":116,"y":676,"width":763,"height":12}},{"id":"2740d6af-4f34-47f0-8459-82e55d659879","block_type":"box","text":"agreements. TOTEs include the bankruptcy or default of the issuer of the Municipal Bonds held in the","page_number":169,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"92d97099-ae99-425c-8c60-e060cb292f01","block_type":"box","text":"TOB Trust, a substantial downgrade in the credit quality of the issuer of the Municipal Bonds held in","page_number":169,"box":{"x":116,"y":707,"width":739,"height":12}},{"id":"5f14889c-9982-4445-a249-7cd5d6112e3e","block_type":"box","text":"the TOB Trust, failure of any scheduled payment of principal or interest on the Municipal Bonds, and a","page_number":169,"box":{"x":116,"y":723,"width":758,"height":12}},{"id":"54640094-4fc7-4cb4-a00f-ef4d4912a09d","block_type":"box","text":"judgment or ruling that interest on the Municipal Bonds is subject to U.S. federal income taxation.","page_number":169,"box":{"x":115,"y":738,"width":721,"height":12}},{"id":"56fb3b21-36f9-4641-a32a-20dd91d6977a","block_type":"box","text":"MTEs may include, among other things, a failed remarketing of the TOB Floaters, the inability of the","page_number":169,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"7d764738-a95b-44ae-93fa-727c8126f09e","block_type":"box","text":"TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":169,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"7fd77413-d4cb-47b7-aa6f-06f2afc42172","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":169,"box":{"x":116,"y":785,"width":729,"height":12}},{"id":"23e553e6-7167-4700-abae-36db2df7fffb","block_type":"box","text":"TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee","page_number":169,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"31ac9a86-23f1-4a65-89c6-d5cee9c978ab","block_type":"box","text":"of the TOB Trust, the remarketing agent of the TOB Floaters and the Liquidity Provider (defined","page_number":169,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"b309fa95-e402-4200-a8fa-52b6f0665698","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":169,"box":{"x":117,"y":831,"width":739,"height":12}},{"id":"bf1c0fb4-2499-4971-a3a1-27b002a6ce30","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":169,"box":{"x":117,"y":847,"width":307,"height":12}},{"id":"834b5bf6-226f-4838-92e4-8c4a82901fb2","block_type":"box","text":"i.e.","page_number":169,"box":{"x":425,"y":847,"width":20,"height":9}},{"id":"33cb2203-2ed9-4a53-9470-1cc5f6026e7f","block_type":"box","text":", the Fund). In contrast, in the case of a TOTE, after","page_number":169,"box":{"x":448,"y":847,"width":389,"height":12}},{"id":"fffa2bbc-0f7d-425c-a0d4-23aed53fd9fe","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":169,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"6c74a763-8cf8-4011-90c1-780b4f28f6c8","block_type":"box","text":"proportion to the respective face values of their certificates.","page_number":169,"box":{"x":117,"y":878,"width":443,"height":12}},{"id":"fec429a5-8eaf-4ed6-a9a1-3dd986032daf","block_type":"box","text":"II-75","page_number":169,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"826bac6b-f9d1-4256-8c38-7ff9faa56573","block_type":"box","text":"NM1026U-6004408-169/267","page_number":169,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e2182b2b-e566-4766-865a-d1902c5b26a9","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":170,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"dc44cf3f-9700-4bd3-9658-6954479856d8","block_type":"box","text":"supported by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity","page_number":170,"box":{"x":116,"y":102,"width":766,"height":13}},{"id":"6c337c21-cdaa-4570-a840-75d54f898b13","block_type":"box","text":"Provider”) that allows the holders of the TOB Floaters to tender their TOB Floaters in exchange for","page_number":170,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"7ce89681-af76-4089-b879-2d2ea415e3f4","block_type":"box","text":"payment of par plus accrued interest on any business day (subject to the non-occurrence of a TOTE","page_number":170,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"3359369b-e3c7-4562-88fa-d30e48765549","block_type":"box","text":"described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase","page_number":170,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"58b0f26f-0ff2-43dc-96f3-0149fc22cb34","block_type":"box","text":"the tendered TOB Floaters, or the TOB Trust may draw upon a loan from the Liquidity Provider to","page_number":170,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"29b5d2cc-8e47-427f-af19-6f64798be8ce","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":170,"box":{"x":117,"y":180,"width":281,"height":12}},{"id":"d1532429-eaec-46fa-a07b-384665ab87be","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":170,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"88d68dd5-ba58-4546-b987-9f3e6b4a3d62","block_type":"box","text":"make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion","page_number":170,"box":{"x":117,"y":227,"width":753,"height":12}},{"id":"5b97bb75-a9b6-49c0-92b8-bde87c239363","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":170,"box":{"x":116,"y":242,"width":746,"height":12}},{"id":"aea41f59-06eb-4aea-9569-038fd6b3d3f9","block_type":"box","text":"under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in","page_number":170,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"7fab9563-e395-49c8-b760-9ea84ec757b2","block_type":"box","text":"a TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the","page_number":170,"box":{"x":116,"y":273,"width":712,"height":12}},{"id":"288054d8-02c6-4ac0-901b-c7606e957f67","block_type":"box","text":"Liquidity Provider pursuant to which the Fund is required to reimburse the Liquidity Provider the","page_number":170,"box":{"x":117,"y":289,"width":712,"height":12}},{"id":"f6f7c3e6-86ed-4c93-96f9-008fbd351eff","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":170,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"36698113-73f7-467d-b2bc-adecbeb79c65","block_type":"box","text":"will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":170,"box":{"x":116,"y":320,"width":751,"height":12}},{"id":"3ba2a7f6-83e5-47e7-9056-1519628aa45a","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their","page_number":170,"box":{"x":117,"y":335,"width":678,"height":12}},{"id":"13b8f0a9-5654-47ce-aba0-998f179c6270","block_type":"box","text":"participation in the TOB Trust.","page_number":170,"box":{"x":117,"y":351,"width":227,"height":12}},{"id":"2c574ddf-8ad1-4a38-a331-2e6edd9ddae7","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are","page_number":170,"box":{"x":117,"y":382,"width":682,"height":12}},{"id":"1065de32-fca5-4dfa-96bc-558ab3e27ad2","block_type":"box","text":"investments of the Fund and are presented on the Fund’s Schedule of Investments and outstanding","page_number":170,"box":{"x":117,"y":397,"width":745,"height":12}},{"id":"38468c71-5ca1-4bf2-be82-7c1e28dacc1f","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":170,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"89693c6f-902e-4844-8830-af16c383efb4","block_type":"box","text":"Liabilities. Interest income from the underlying Municipal Bonds is recorded by a Fund on an accrual","page_number":170,"box":{"x":117,"y":428,"width":747,"height":12}},{"id":"33f49455-ce8f-4d19-9e96-3c9d02c25197","block_type":"box","text":"basis. Interest expense incurred on the","page_number":170,"box":{"x":117,"y":444,"width":288,"height":12}},{"id":"ad59f4c7-6d52-4f07-9a23-e8f954112ff2","block_type":"box","text":"TOB Floaters and other expenses related to remarketing,","page_number":170,"box":{"x":409,"y":444,"width":430,"height":12}},{"id":"7a4f665a-7866-4c31-bae8-99599fd13681","block_type":"box","text":"administration, trustee and other services to a TOB Trust are reported as expenses of a Fund. In","page_number":170,"box":{"x":116,"y":459,"width":722,"height":12}},{"id":"29862d97-4808-449b-b0e4-b82635f9cdd0","block_type":"box","text":"addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented","page_number":170,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"fe453599-73f5-4727-8b9a-36a1c6544250","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":170,"box":{"x":116,"y":490,"width":721,"height":10}},{"id":"cf813ef4-c7e6-4cba-89c6-3403bf0e7502","block_type":"box","text":"assets.","page_number":170,"box":{"x":116,"y":506,"width":58,"height":9}},{"id":"f7f97af3-5fde-43d5-bfc7-23cc89ca2995","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal","page_number":170,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"d934b30b-a3d9-4e1c-b331-71b03e0afe93","block_type":"box","text":"Bonds with maturities or remarketing provisions that are comparable in duration to the periodic interval","page_number":170,"box":{"x":117,"y":552,"width":764,"height":12}},{"id":"c48af091-20cf-46c3-b15c-3498af152c32","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":170,"box":{"x":116,"y":568,"width":748,"height":12}},{"id":"6114e5e3-d717-4283-9921-330676e87a47","block_type":"box","text":"call date of the underlying Municipal Bonds deposited in the TOB Trust, the holder of the TOB Floaters","page_number":170,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"5f8ba76a-09fa-4025-850f-4d92b6a73ef8","block_type":"box","text":"relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as","page_number":170,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"043d6990-0f15-4704-9f6c-8398ad0c6743","block_type":"box","text":"well as the credit strength of that institution. The risk associated with TOB Floaters, however, may be","page_number":170,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"2ba4afdb-5c3e-40ad-b96c-d6ed92fdd3fc","block_type":"box","text":"increased in the current market environment as a result of recent downgrades to the credit ratings, and","page_number":170,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"d873259a-3e26-4e8e-b3f0-01fa946db21e","block_type":"box","text":"thus the perceived reliability and creditworthiness, of many major financial institutions, some of which","page_number":170,"box":{"x":116,"y":645,"width":755,"height":12}},{"id":"7da791cb-c4a8-4f26-81ab-8e2c7ef28a85","block_type":"box","text":"sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":170,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"e8342a38-8bc7-43be-93fb-c1e3967a5ed6","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":170,"box":{"x":117,"y":676,"width":627,"height":12}},{"id":"52eea7d2-aab4-40e4-a45a-adbcbda05763","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions,","page_number":170,"box":{"x":117,"y":707,"width":737,"height":12}},{"id":"7a12bf6a-383d-482a-b881-45830f1c891b","block_type":"box","text":"reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds)","page_number":170,"box":{"x":117,"y":723,"width":664,"height":12}},{"id":"8829c2a6-5ac8-4112-85a2-cfc674c9c00c","block_type":"box","text":"notwithstanding the limitation on the issuance of senior securities in Section 18 of the Investment","page_number":170,"box":{"x":117,"y":738,"width":718,"height":12}},{"id":"8000a0de-e94d-495c-af69-3d75de6e9911","block_type":"box","text":"Company Act, provided that the Fund either (i) complies with the 300% asset coverage ratio with","page_number":170,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"dbb65807-e4e7-43e0-b955-9539813e9074","block_type":"box","text":"respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions","page_number":170,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"f786222e-6f5a-4992-9571-9c69a53d9793","block_type":"box","text":"as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":170,"box":{"x":116,"y":785,"width":726,"height":12}},{"id":"2056d00c-9fd6-446e-980e-c098e40f29da","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":170,"box":{"x":117,"y":800,"width":404,"height":12}},{"id":"3c300f67-e640-4e85-af13-b5f06d63851e","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":170,"box":{"x":116,"y":831,"width":301,"height":12}},{"id":"1bc4092b-a3bc-4584-bbc1-6129b3ad5eec","block_type":"box","text":"In response to the restrictions imposed by section 619 of the","page_number":170,"box":{"x":419,"y":831,"width":452,"height":12}},{"id":"2cc129e5-81e2-4064-a1c8-dd6185d47bf0","block_type":"box","text":"Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), market participants","page_number":170,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"865cd835-2313-4511-b4f5-3d29c768928e","block_type":"box","text":"have developed a structure for TOB Trusts designed to ensure that no banking entity is sponsoring the","page_number":170,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"4dfd4953-7df8-468b-bd9a-6dcb46be8d0b","block_type":"box","text":"TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor”","page_number":170,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"e57fa0a7-97d5-4a31-a1bf-c0b16707d152","block_type":"box","text":"II-76","page_number":170,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d6b6f3c3-f68f-487d-b98f-0d20f804d834","block_type":"box","text":"NM1026U-6004408-170/267","page_number":170,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2485f1d4-a336-4467-a769-3e2a3fb05a4c","block_type":"box","text":"the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that","page_number":171,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"0067bf6c-da71-4b95-a3bc-2dc584f4d1cf","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":171,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"34403a6a-7d49-410f-99b6-38201c4c08b8","block_type":"box","text":"utilize service providers in meeting these responsibilities. It is possible that regulators could take","page_number":171,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"3f81a3ac-d82d-4ce1-b378-ea97265c1a3b","block_type":"box","text":"positions that could limit the market for such structured TOB Trust transactions or a Fund’s ability to","page_number":171,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"c1d8fec2-4ea4-4493-bbf7-50c20fea96dc","block_type":"box","text":"hold TOB Residuals. Under this TOB Trust structure, a Fund has certain additional duties and","page_number":171,"box":{"x":117,"y":149,"width":699,"height":11}},{"id":"384db1f0-29c7-4ba0-9477-e57ba457365d","block_type":"box","text":"responsibilities, which may give rise to certain additional risks including","page_number":171,"box":{"x":117,"y":165,"width":525,"height":12}},{"id":"01444d47-0cc3-466d-83d1-e0db317a669e","block_type":"box","text":",","page_number":171,"box":{"x":643,"y":173,"width":3,"height":3}},{"id":"0ae0a168-9b41-409c-b078-29b1ccce79a5","block_type":"box","text":"but not limited to, compliance,","page_number":171,"box":{"x":648,"y":165,"width":232,"height":11}},{"id":"85f18950-f915-46db-907a-e60160c85a84","block_type":"box","text":"securities law and operational risks.","page_number":171,"box":{"x":116,"y":180,"width":270,"height":12}},{"id":"3cbc41db-081a-4a44-9cb0-16b82e5d70bc","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers,","page_number":171,"box":{"x":117,"y":208,"width":724,"height":12}},{"id":"2640e1df-af8a-4933-b449-dedfe243e510","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":171,"box":{"x":116,"y":223,"width":764,"height":13}},{"id":"3056de3e-ba56-4643-a8ec-f4833cc4b3cb","block_type":"box","text":"holder. Similar to the traditional tender option bond structure, a Fund deposits Municipal Bonds into the","page_number":171,"box":{"x":117,"y":239,"width":768,"height":12}},{"id":"0b077ad0-bdc8-45da-b9cc-b43b50263852","block_type":"box","text":"TOB Trust in exchange for TOB Residuals, the TOB Trust then issues and sells TOB Floaters to third","page_number":171,"box":{"x":116,"y":254,"width":757,"height":13}},{"id":"b225154b-45da-47dc-9dba-a17c5d335906","block_type":"box","text":"party investors, and the proceeds of the sale of the TOB Floaters is distributed to such TOB Residual","page_number":171,"box":{"x":117,"y":270,"width":754,"height":12}},{"id":"819d2dae-675a-437e-9669-707325d21579","block_type":"box","text":"holders (","page_number":171,"box":{"x":117,"y":285,"width":64,"height":13}},{"id":"7d3a6291-8f85-42b2-915d-064b0eae706b","block_type":"box","text":"i.e.","page_number":171,"box":{"x":182,"y":286,"width":20,"height":9}},{"id":"57bcfca9-8d7b-4cab-81e6-4ce10e42ae00","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be supported by a remarketing agent and","page_number":171,"box":{"x":205,"y":285,"width":671,"height":13}},{"id":"95557668-2b73-46c2-9dcc-0696160e4e4a","block_type":"box","text":"a liquidity facility. However, the remarketing agent does not purchase tendered TOB Floaters for its","page_number":171,"box":{"x":116,"y":301,"width":740,"height":12}},{"id":"7d3df190-1389-481b-8959-3c00a8370df4","block_type":"box","text":"own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust","page_number":171,"box":{"x":116,"y":316,"width":751,"height":13}},{"id":"3d065882-13ec-4685-816d-d0a55bd156a0","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":171,"box":{"x":116,"y":332,"width":772,"height":12}},{"id":"b69c301b-9b5e-42ff-89cf-51ad91c19b30","block_type":"box","text":"a failed remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the","page_number":171,"box":{"x":116,"y":347,"width":745,"height":13}},{"id":"b5be7205-e5a5-4de6-b5ef-f3d3f7bb8d2e","block_type":"box","text":"TOB Trust the proceeds of which would be used by the TOB Trust to purchase the tendered TOB","page_number":171,"box":{"x":116,"y":363,"width":728,"height":12}},{"id":"cd135211-af0a-4a1e-817c-0a5a02d94b43","block_type":"box","text":"Floaters. The Liquidity Provider is not obligated to advance such a loan. The TOB Trust would be the","page_number":171,"box":{"x":117,"y":378,"width":753,"height":13}},{"id":"57d23a15-dd4f-4f3a-bb3c-3a20d4744f33","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":171,"box":{"x":117,"y":394,"width":758,"height":12}},{"id":"47a8f4d6-a0e9-49e9-b512-c7235d268960","block_type":"box","text":"purchased TOB Floaters held by the TOB Trust.","page_number":171,"box":{"x":117,"y":409,"width":361,"height":13}},{"id":"a2e21e28-19f7-4eff-821a-25af5471f171","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals","page_number":171,"box":{"x":116,"y":437,"width":769,"height":12}},{"id":"28f9e742-8c1d-4268-a6c2-9aca171d9390","block_type":"box","text":"or recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would","page_number":171,"box":{"x":116,"y":453,"width":735,"height":12}},{"id":"d13978eb-02e4-4e83-a05f-e8f48271a405","block_type":"box","text":"generally be no contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB","page_number":171,"box":{"x":116,"y":468,"width":718,"height":12}},{"id":"f488c0fb-23d7-45da-9c2d-27472e072946","block_type":"box","text":"Residual. However, as described above, a Fund would bear the risk of loss with respect to any","page_number":171,"box":{"x":117,"y":484,"width":706,"height":12}},{"id":"580c44aa-a90f-48b7-9b28-6b715a6f75d7","block_type":"box","text":"Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":171,"box":{"x":117,"y":499,"width":420,"height":12}},{"id":"03e2ce4a-fe6b-4ee6-a521-cefe134e1c2b","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for","page_number":171,"box":{"x":116,"y":527,"width":730,"height":12}},{"id":"a25a1f67-566c-417a-b045-1243d7cd4e75","block_type":"box","text":"securitizations (the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention","page_number":171,"box":{"x":116,"y":543,"width":753,"height":12}},{"id":"68bcb0e7-9b9c-45e5-9dc3-e2f8ccf4bdcd","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":171,"box":{"x":117,"y":558,"width":771,"height":12}},{"id":"c5f924cc-6688-4d77-926d-7024e43e265c","block_type":"box","text":"supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the","page_number":171,"box":{"x":116,"y":574,"width":721,"height":12}},{"id":"b7ce71dc-2a18-448b-8107-b04304507d15","block_type":"box","text":"Fund’s ability to engage in TOB Trust transactions or increase the costs of such transactions in certain","page_number":171,"box":{"x":117,"y":589,"width":764,"height":12}},{"id":"6d4ad5e6-4226-4f87-86cb-4257ab56bffa","block_type":"box","text":"circumstances.","page_number":171,"box":{"x":116,"y":605,"width":117,"height":9}},{"id":"65086530-477e-4809-a9ea-caa05579b4c9","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":171,"box":{"x":116,"y":633,"width":763,"height":12}},{"id":"0e6bd0c9-2f2a-457c-a201-7218ddef72fb","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through","page_number":171,"box":{"x":117,"y":648,"width":729,"height":12}},{"id":"91fa26e5-57fa-4310-9c6d-77df08ed0fdc","block_type":"box","text":"reduced demand for and liquidity of municipal bonds and increased financing costs for municipal","page_number":171,"box":{"x":117,"y":664,"width":713,"height":12}},{"id":"faf3c640-be49-405b-918c-42db20e03bbe","block_type":"box","text":"issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules","page_number":171,"box":{"x":117,"y":679,"width":749,"height":12}},{"id":"da0c43be-0d39-4a24-9c27-0ad159b7a211","block_type":"box","text":"on the TOB market and the overall municipal market is not yet certain.","page_number":171,"box":{"x":116,"y":695,"width":520,"height":12}},{"id":"5801ba23-7968-431e-8f8b-8159375be828","block_type":"box","text":"Yields.","page_number":171,"box":{"x":118,"y":723,"width":47,"height":9}},{"id":"8ed5dab2-ed3f-4353-856b-7d5e1330a04f","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general","page_number":171,"box":{"x":171,"y":723,"width":639,"height":12}},{"id":"2d813db0-aac2-4751-9248-73b5568c978a","block_type":"box","text":"condition of the money market and of the municipal bond market, the size of a particular offering, the","page_number":171,"box":{"x":116,"y":738,"width":746,"height":12}},{"id":"66e8a8e3-d51c-4484-9064-6296b3de807d","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":171,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"7d08a420-733b-475d-8bd5-4bd328a9bc5d","block_type":"box","text":"a Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of","page_number":171,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"a8dbb109-cd95-4f64-a620-3955277cba27","block_type":"box","text":"the securities in which the Fund invests to meet their obligations for the payment of interest and","page_number":171,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"e1fe00d2-4653-47cb-88da-aaeead57ce69","block_type":"box","text":"principal when due. There are variations in the risks involved in holding Municipal Bonds, both within a","page_number":171,"box":{"x":117,"y":800,"width":757,"height":12}},{"id":"f7a7de9d-3fb9-489a-83d7-828d5451580e","block_type":"box","text":"particular classification and between classifications, depending on numerous factors. Furthermore, the","page_number":171,"box":{"x":117,"y":816,"width":758,"height":12}},{"id":"1503d3d7-a51f-46dd-9db5-9b8f297f2426","block_type":"box","text":"rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal Bonds may be","page_number":171,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"c2063161-8934-41ce-b439-d7be5f424a43","block_type":"box","text":"subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights of","page_number":171,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"df97fc28-f09a-4b72-9839-f7d1b3e850e6","block_type":"box","text":"creditors generally and to general equitable principles, which may limit the enforcement of certain","page_number":171,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"174aae36-e367-4192-85d1-d7a429a41ba6","block_type":"box","text":"remedies.","page_number":171,"box":{"x":117,"y":878,"width":77,"height":9}},{"id":"20798772-f62d-41b0-9d0b-0b71df642aee","block_type":"box","text":"II-77","page_number":171,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"54ec6b81-995e-4062-8817-9ae0565b0ba7","block_type":"box","text":"NM1026U-6004408-171/267","page_number":171,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"416e70b6-22b9-4310-8c7b-6613d926d7d1","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":172,"box":{"x":118,"y":87,"width":344,"height":12}},{"id":"79f23726-1d19-44e6-9fa0-90bfa85a6dee","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a","page_number":172,"box":{"x":464,"y":87,"width":374,"height":12}},{"id":"b5a7c6d2-7ae9-4370-910b-a0c2cc8b818c","block_type":"box","text":"floating or variable interest rate adjustment formula and a right of demand on the part of the holder","page_number":172,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"e3fa80a0-c367-4c07-b644-7244df822d44","block_type":"box","text":"thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice","page_number":172,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"ffe99514-f713-4f5f-a384-c784cfd8f478","block_type":"box","text":"period not to exceed seven days.","page_number":172,"box":{"x":117,"y":134,"width":250,"height":12}},{"id":"a2a83ef4-6a2e-46e1-9091-346ad2c92d65","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be","page_number":172,"box":{"x":116,"y":162,"width":768,"height":12}},{"id":"036d7d7b-da9e-4853-8eb0-aa0b5bcb016b","block_type":"box","text":"honored. The interest rates are adjustable at periodic intervals to some prevailing market rate for","page_number":172,"box":{"x":117,"y":177,"width":721,"height":12}},{"id":"63967c16-acb8-44e0-a229-227048bbffec","block_type":"box","text":"similar investments, such adjustment formula being calculated to maintain the market rate of the","page_number":172,"box":{"x":116,"y":193,"width":718,"height":12}},{"id":"7c35185e-8ff7-47e4-b45d-7f66180706be","block_type":"box","text":"VRDOs at approximately the par value of the VRDOs on the adjustment date. The adjustments","page_number":172,"box":{"x":116,"y":208,"width":710,"height":12}},{"id":"a89c172f-0286-40e4-9eaf-f381933604f9","block_type":"box","text":"typically are based upon the Securities Industry and Financial Markets Association (“SIFMA”) Index.","page_number":172,"box":{"x":116,"y":224,"width":746,"height":12}},{"id":"893fc033-2a2c-4803-9857-a9a518a4d492","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate","page_number":172,"box":{"x":117,"y":252,"width":751,"height":12}},{"id":"32899665-0053-442e-8dee-e73beee5d25e","block_type":"box","text":"securities. During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its","page_number":172,"box":{"x":116,"y":268,"width":746,"height":12}},{"id":"eb6a5572-a531-42bd-bf70-f2de2e6b0ba7","block_type":"box","text":"shareholders will forego the opportunity for capital appreciation. During periods of rising interest rates,","page_number":172,"box":{"x":116,"y":283,"width":761,"height":12}},{"id":"cc0fdb73-9e4f-4510-ac73-69bb400bfb08","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":172,"box":{"x":117,"y":299,"width":764,"height":12}},{"id":"94606acc-72f5-4f41-b724-69c72ec052e4","block_type":"box","text":"of capital depreciation.","page_number":172,"box":{"x":116,"y":314,"width":173,"height":12}},{"id":"1c2b3654-05f7-47f2-b8f2-b165fd95c473","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":172,"box":{"x":118,"y":343,"width":488,"height":12}},{"id":"b0018a11-cf5d-4eee-801a-0fa5ba99dadf","block_type":"box","text":"The Municipal Funds and certain","page_number":172,"box":{"x":608,"y":343,"width":253,"height":12}},{"id":"df901d18-09c2-437b-a85d-bc4d80804d6a","block_type":"box","text":"other funds deal in financial futures contracts based on a long-term municipal bond index developed by","page_number":172,"box":{"x":116,"y":358,"width":770,"height":12}},{"id":"665cc30c-1606-4778-8b43-1ee9a28d9e68","block_type":"box","text":"the Chicago Board of Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal","page_number":172,"box":{"x":116,"y":374,"width":761,"height":12}},{"id":"4ff9037f-e932-423e-82c8-b0bc44872fc0","block_type":"box","text":"Bond Index is comprised of 40 long-term, actively traded tax-exempt municipal revenue and general","page_number":172,"box":{"x":117,"y":389,"width":746,"height":12}},{"id":"01f48482-0b59-4cd7-b3d5-4f08e3259312","block_type":"box","text":"obligation bonds. Each bond included in the Municipal Bond Index must be rated A or higher by","page_number":172,"box":{"x":116,"y":405,"width":712,"height":12}},{"id":"d5601ce5-6494-46f8-8f24-d723cff9e301","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":172,"box":{"x":117,"y":420,"width":754,"height":12}},{"id":"62dc6dd5-3801-4cb5-bb7b-f5db9f507306","block_type":"box","text":"satisfying the eligibility requirements are added to, and an equal number of old issues are deleted from,","page_number":172,"box":{"x":116,"y":436,"width":771,"height":12}},{"id":"4abc4800-2c33-4b5a-915c-bc7a9addfb8b","block_type":"box","text":"the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":172,"box":{"x":116,"y":451,"width":734,"height":12}},{"id":"ca225267-6bd7-4186-8a13-7adcf07ae62e","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six","page_number":172,"box":{"x":116,"y":467,"width":670,"height":12}},{"id":"5b0c47e2-184a-4df4-b947-de413693b327","block_type":"box","text":"dealer-to-dealer brokers.","page_number":172,"box":{"x":116,"y":482,"width":189,"height":10}},{"id":"65ae0eb1-c524-465a-bbb7-b5b551f8f56f","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the","page_number":172,"box":{"x":116,"y":511,"width":760,"height":12}},{"id":"3ef2b3f8-fd77-43a0-a230-7d8a48791042","block_type":"box","text":"CBT assures performance under futures contracts through a clearing corporation, a nonprofit","page_number":172,"box":{"x":117,"y":526,"width":694,"height":12}},{"id":"bd3989ef-7f7b-4e6e-88d6-dd4322d07504","block_type":"box","text":"organization managed by the exchange membership that is also responsible for handling daily","page_number":172,"box":{"x":116,"y":542,"width":704,"height":12}},{"id":"03c6ab5e-614b-41df-b0ed-99ea3572da0a","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":172,"box":{"x":116,"y":557,"width":364,"height":12}},{"id":"1b65885f-d23a-45e1-8116-10bbbcc8c4c6","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial","page_number":172,"box":{"x":116,"y":585,"width":735,"height":12}},{"id":"5a72c489-bb26-476b-a681-f4f5c385d135","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":172,"box":{"x":116,"y":601,"width":741,"height":12}},{"id":"4169a83b-b245-479f-beca-7d33d137b8ff","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":172,"box":{"x":116,"y":616,"width":749,"height":12}},{"id":"35417190-ffbc-4056-8037-fbcafac32fe7","block_type":"box","text":"financial futures contracts will depend in part on the degree to which price movements in the index","page_number":172,"box":{"x":116,"y":632,"width":734,"height":12}},{"id":"fc28cf74-1dd9-4343-ab69-8a1875454bcc","block_type":"box","text":"underlying the financial futures contract correlate with the price movements of the Municipal Bonds","page_number":172,"box":{"x":117,"y":647,"width":737,"height":13}},{"id":"9b224e8b-1734-4537-a7a3-82d7bd087e83","block_type":"box","text":"held by the Fund. The correlation may be affected by disparities in the average maturity, ratings,","page_number":172,"box":{"x":117,"y":663,"width":712,"height":12}},{"id":"309cb794-9391-4829-bfe2-c6677278e504","block_type":"box","text":"geographical mix or structure of a Municipal Fund’s investments as compared to those comprising the","page_number":172,"box":{"x":116,"y":678,"width":755,"height":13}},{"id":"8fea92e3-f021-422b-a72c-6e95a1774417","block_type":"box","text":"Municipal Bond Index and general economic or political factors. In addition, the correlation between","page_number":172,"box":{"x":117,"y":694,"width":736,"height":12}},{"id":"b363e032-7957-46ee-920d-f2f3a6c84415","block_type":"box","text":"movements in the value of the Municipal Bond Index may be subject to change over time as additions","page_number":172,"box":{"x":117,"y":709,"width":753,"height":13}},{"id":"12131329-1182-437a-976b-efaea74b5b41","block_type":"box","text":"to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":172,"box":{"x":116,"y":725,"width":725,"height":12}},{"id":"b91f8f81-66cc-406a-991c-d2dbee2473b2","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be","page_number":172,"box":{"x":116,"y":740,"width":745,"height":13}},{"id":"142335c6-0d40-476c-920e-91c563aeebc8","block_type":"box","text":"adversely affected by similar factors and the risk of imperfect correlation between movements in the","page_number":172,"box":{"x":116,"y":756,"width":740,"height":12}},{"id":"c501136a-97a6-4031-abf9-60a1737167c8","block_type":"box","text":"prices of such futures contracts and the prices of Municipal Bonds held by a Municipal Fund may be","page_number":172,"box":{"x":117,"y":771,"width":740,"height":13}},{"id":"b5529e53-9ba2-4657-bf8d-283b07ce1bcd","block_type":"box","text":"greater. Municipal Bond Index futures contracts were approved for trading in 1985. Trading in such","page_number":172,"box":{"x":116,"y":787,"width":732,"height":12}},{"id":"cb69c1dc-c555-47b4-a071-9724b70bf54a","block_type":"box","text":"futures contracts may tend to be less liquid than trading in other futures contracts. The trading of","page_number":172,"box":{"x":116,"y":802,"width":716,"height":13}},{"id":"7b4b30c2-2388-4462-b997-781e25c4ad8a","block_type":"box","text":"futures contracts also is subject to certain market risks, such as inadequate trading activity, which","page_number":172,"box":{"x":116,"y":818,"width":723,"height":12}},{"id":"61d794c0-8a76-4e83-b689-d59597caaa52","block_type":"box","text":"could at times make it difficult or impossible to liquidate existing positions.","page_number":172,"box":{"x":116,"y":833,"width":552,"height":13}},{"id":"fd9a381b-89a0-4ef9-bb8f-5ab07725e0ee","block_type":"box","text":"Call Rights.","page_number":172,"box":{"x":117,"y":862,"width":83,"height":12}},{"id":"1c311ed9-3ac6-44b3-9666-d6c27a6bd7a7","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such","page_number":172,"box":{"x":202,"y":862,"width":626,"height":12}},{"id":"3754f43e-214b-489c-918d-23c478d52b4b","block_type":"box","text":"Municipal Bond for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may","page_number":172,"box":{"x":117,"y":877,"width":711,"height":12}},{"id":"1ac4b44e-a2db-4275-9e8e-4fd3e276a8a0","block_type":"box","text":"II-78","page_number":172,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2b60c6aa-9047-4069-95ba-2ffaaf3e845b","block_type":"box","text":"NM1026U-6004408-172/267","page_number":172,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9a0b36b8-f6d6-44f5-ac7c-600f63825fa2","block_type":"box","text":"exercise such right to require a mandatory tender for the purchase of related Municipal Bonds, subject","page_number":173,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"2d14c6e4-9c34-4f41-8975-1635b2d9a580","block_type":"box","text":"to certain conditions. A Call Right that is not exercised prior to maturity of the related Municipal Bond","page_number":173,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"5c825078-3ecf-4d75-8944-05680d7ef2b4","block_type":"box","text":"will expire without value. The economic effect of holding both the Call Right and the related Municipal","page_number":173,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"ecd55f90-ce99-447f-93f0-cacc53f3eafa","block_type":"box","text":"Bond is identical to holding a Municipal Bond as a non-callable security. Certain investments in such","page_number":173,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"9cccb78d-eff7-4dbe-84cd-b35f77512d73","block_type":"box","text":"obligations may be illiquid.","page_number":173,"box":{"x":116,"y":149,"width":201,"height":12}},{"id":"be2b7502-8317-4d9e-9f60-66ef86efc5f6","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":173,"box":{"x":116,"y":180,"width":323,"height":12}},{"id":"18b38d99-abac-47c4-b3bd-10a30745b432","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":173,"box":{"x":440,"y":180,"width":439,"height":12}},{"id":"10c556ee-4174-4142-9b9d-c6ce3e49f7ff","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such","page_number":173,"box":{"x":116,"y":196,"width":772,"height":12}},{"id":"d50f4d21-004f-4b46-83a1-c6e850e56621","block_type":"box","text":"as Municipal Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial","page_number":173,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"8e0da3b6-f23e-477a-8184-c85615f1f3fb","block_type":"box","text":"Markets Association Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters","page_number":173,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"5e187baa-f500-48e8-b2f5-9cf22f33f232","block_type":"box","text":"into these transactions, the Fund expects to do so primarily to preserve a return or spread on a","page_number":173,"box":{"x":117,"y":242,"width":708,"height":12}},{"id":"673523c4-fd2a-47a0-97d5-4de7e1d1f074","block_type":"box","text":"particular investment or portion of its portfolio or to protect against any increase in the price of","page_number":173,"box":{"x":117,"y":258,"width":699,"height":12}},{"id":"ccd2df9f-12c9-468e-8fa8-18198ead4301","block_type":"box","text":"securities the Fund anticipates purchasing at a later date. A Fund intends to use these transactions","page_number":173,"box":{"x":116,"y":273,"width":741,"height":12}},{"id":"ed59479c-3387-4bf2-8e25-7bc0df1fc471","block_type":"box","text":"primarily as a hedge rather than as a speculative investment. However, a Fund also may invest in","page_number":173,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"881d810b-c08e-4c01-8674-a195526136e4","block_type":"box","text":"MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for","page_number":173,"box":{"x":117,"y":304,"width":704,"height":12}},{"id":"b7186b59-621a-4491-abf1-ca19f9d18989","block_type":"box","text":"example, during periods of steep interest rate yield curves (","page_number":173,"box":{"x":116,"y":320,"width":441,"height":12}},{"id":"4f2c7227-0fdd-4332-8b09-6e8345c8f310","block_type":"box","text":"i.e.","page_number":173,"box":{"x":558,"y":320,"width":20,"height":9}},{"id":"e0284309-027d-4f61-8d33-59a2c3e07f2d","block_type":"box","text":", wide differences between short-term","page_number":173,"box":{"x":581,"y":320,"width":284,"height":11}},{"id":"17e28f06-4bc2-40a3-b12f-35271fa93eda","block_type":"box","text":"and long-term interest rates).","page_number":173,"box":{"x":116,"y":335,"width":221,"height":12}},{"id":"39861747-6ac7-4cf1-9a8a-eb411c220615","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":173,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"c04ac268-9121-46b0-a230-27b5adb84ae8","block_type":"box","text":"exchanges with another party their respective commitments to pay or receive interest (","page_number":173,"box":{"x":116,"y":382,"width":642,"height":12}},{"id":"31f687f5-8830-43d7-808e-ad4dafdea777","block_type":"box","text":"e.g.","page_number":173,"box":{"x":760,"y":384,"width":25,"height":10}},{"id":"bbc225c2-c0bd-42e4-b5d9-207abf6f6470","block_type":"box","text":", an","page_number":173,"box":{"x":788,"y":384,"width":32,"height":9}},{"id":"9d9292e5-f1f5-4c01-9ac4-71a611d18329","block_type":"box","text":"exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap","page_number":173,"box":{"x":116,"y":397,"width":717,"height":12}},{"id":"7eb5865d-f4a1-40c4-bf7a-787ac9a1488d","block_type":"box","text":"Index). Because the underlying index is a tax-exempt index, SIFMA Swaps may reduce cross-market","page_number":173,"box":{"x":117,"y":413,"width":755,"height":12}},{"id":"3a260068-1463-4e37-85c9-71acafd8b072","block_type":"box","text":"risks incurred by a Fund and increase a Fund’s ability to hedge effectively. SIFMA Swaps are typically","page_number":173,"box":{"x":117,"y":428,"width":760,"height":12}},{"id":"36d2473d-7b32-47cf-827e-a907261fb474","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":173,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"944a34cc-b866-4a31-86f6-7b656220c53a","block_type":"box","text":"duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond with","page_number":173,"box":{"x":116,"y":459,"width":747,"height":12}},{"id":"acc9b292-2aa4-4ff7-96d2-246db375ad42","block_type":"box","text":"the same attributes as the swap (","page_number":173,"box":{"x":116,"y":475,"width":247,"height":12}},{"id":"d89a3ed6-1719-4cfc-a90f-6a46aeff1b49","block_type":"box","text":"e.g.","page_number":173,"box":{"x":365,"y":477,"width":25,"height":10}},{"id":"af9df157-872f-4020-9ddf-6264d39fe164","block_type":"box","text":", coupon, maturity, call feature).","page_number":173,"box":{"x":393,"y":475,"width":240,"height":12}},{"id":"862d99ba-9c60-4a91-b118-fd39864db968","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap","page_number":173,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"2d543bfb-8d05-4af6-8fa3-5c130f103ac2","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":173,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"63f1da06-9d7e-4127-9a18-b1450838896f","block_type":"box","text":"return on a particular investment or a portion of its portfolio as a duration management technique or to","page_number":173,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"5241f470-46bf-42be-9948-1e1c6fb5e7f5","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":173,"box":{"x":117,"y":552,"width":771,"height":12}},{"id":"3b326ee4-0682-4b29-a54b-8286891fbe7b","block_type":"box","text":"Swap, a Fund can create a synthetic long or short position, allowing the Fund to select the most","page_number":173,"box":{"x":116,"y":568,"width":715,"height":12}},{"id":"50c803ca-e074-412b-9a03-0d7782cba498","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":173,"box":{"x":116,"y":583,"width":729,"height":12}},{"id":"76787b71-275a-4684-be85-574698044b2a","block_type":"box","text":"provider pursuant to which the parties agree to make payments to each other on a notional amount,","page_number":173,"box":{"x":117,"y":599,"width":744,"height":12}},{"id":"ea26f3d6-b74c-4ea6-b7cb-321e0c50c180","block_type":"box","text":"contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a","page_number":173,"box":{"x":116,"y":614,"width":769,"height":12}},{"id":"6d0e286d-666a-4800-a8b4-5c85d981b072","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":173,"box":{"x":116,"y":630,"width":754,"height":12}},{"id":"f87e3360-e159-489b-af91-da11a9229145","block_type":"box","text":"the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration","page_number":173,"box":{"x":116,"y":645,"width":763,"height":12}},{"id":"af27feed-3959-4a3a-9f67-7c4982ae411e","block_type":"box","text":"date, the counterparty to the contract will make a payment to the Fund equal to the specified level","page_number":173,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"f5d4ff6c-990c-4db7-a758-157730e9ed73","block_type":"box","text":"minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data","page_number":173,"box":{"x":117,"y":676,"width":746,"height":12}},{"id":"b87da822-55ee-497f-9097-7b6b215eb7b2","block_type":"box","text":"AAA General Obligation Scale is above the specified level on the expiration date, a Fund will make a","page_number":173,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"0a161ed2-3012-4be0-864b-13c153aa3b55","block_type":"box","text":"payment to the counterparty equal to the actual level minus the specified level, multiplied by the","page_number":173,"box":{"x":117,"y":707,"width":708,"height":12}},{"id":"d4deed6b-5cb1-4a27-8d41-66e23b5c88fd","block_type":"box","text":"notional amount of the contract.","page_number":173,"box":{"x":117,"y":723,"width":233,"height":9}},{"id":"171238c5-e0f7-40fe-b08d-7cd35c69440c","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps,","page_number":173,"box":{"x":117,"y":754,"width":438,"height":12}},{"id":"d3710472-7971-4e45-9c97-83b1af31e739","block_type":"box","text":"there is a risk that municipal yields will","page_number":173,"box":{"x":561,"y":754,"width":283,"height":12}},{"id":"77a3b9cc-e3bc-4fd0-8f68-f2c5cf7b0df3","block_type":"box","text":"move in the opposite direction than anticipated by a Fund, which would cause the Fund to make","page_number":173,"box":{"x":117,"y":769,"width":711,"height":12}},{"id":"abf8caa5-3d0f-4bb9-a9cf-31954f492ada","block_type":"box","text":"payments to its counterparty in the transaction that could adversely affect the Fund’s performance.","page_number":173,"box":{"x":117,"y":785,"width":729,"height":12}},{"id":"d4516f4b-aa05-4064-99a1-9376495fb39c","block_type":"box","text":"Insured Municipal Bonds.","page_number":173,"box":{"x":117,"y":816,"width":186,"height":12}},{"id":"779efce1-151f-46e0-8e54-e008a28b6bd2","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees","page_number":173,"box":{"x":310,"y":816,"width":555,"height":12}},{"id":"216e8cea-09e6-4160-8f9c-43f16340dcdf","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":173,"box":{"x":116,"y":831,"width":768,"height":12}},{"id":"6da072ea-c8a0-4371-8c90-ebed3a81a376","block_type":"box","text":"matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to","page_number":173,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"19631096-1786-46c7-a06f-1af503686634","block_type":"box","text":"protect the Fund against losses caused by a bond issuer’s failure to make interest or principal","page_number":173,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"81d7237e-3512-4b49-a05d-3c203ff07dd4","block_type":"box","text":"payments. However, insurance does not protect the Fund or its shareholders against losses caused by","page_number":173,"box":{"x":117,"y":878,"width":767,"height":12}},{"id":"e61d9176-f611-4b1b-8e9b-3293e8c6c4e7","block_type":"box","text":"II-79","page_number":173,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"24b4b0d6-67f6-4f1e-ba64-031c36ec295c","block_type":"box","text":"NM1026U-6004408-173/267","page_number":173,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"635f05dd-92a8-4527-90d8-5611d183fa14","block_type":"box","text":"declines in a bond’s market value. Also, the Fund cannot be certain that any insurance company does","page_number":174,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"16b7f01f-340b-4ba7-927c-ba5867886798","block_type":"box","text":"not make these payments. In addition, if the Fund purchases the insurance, it may pay the premiums,","page_number":174,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"14e6131e-6b8c-481b-ba14-69c86f71e5a6","block_type":"box","text":"which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims","page_number":174,"box":{"x":116,"y":118,"width":721,"height":12}},{"id":"931d3202-3026-4458-94c6-ec9b97d2dbc3","block_type":"box","text":"paying ability, financial strength, or equivalent ratings of at least investment grade. However, if","page_number":174,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"a4a8606e-76b5-4614-9c25-5b51426b1dec","block_type":"box","text":"insurance from insurers with these ratings is not available, the Fund may use insurance companies","page_number":174,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"b88ea920-0e93-4b12-9dfe-f33c2c0f94a5","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":174,"box":{"x":116,"y":165,"width":742,"height":12}},{"id":"a4428ff1-372f-4726-86d8-6bb381a3674f","block_type":"box","text":"obligations or loses its credit rating, the value of the bond could drop.","page_number":174,"box":{"x":116,"y":180,"width":517,"height":12}},{"id":"4ac43043-142f-43aa-8d06-4f7902679bf5","block_type":"box","text":"Build America Bonds.","page_number":174,"box":{"x":116,"y":211,"width":159,"height":10}},{"id":"9a233734-43f9-4b4b-ae89-8cf6c14b5d78","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S.","page_number":174,"box":{"x":276,"y":211,"width":604,"height":12}},{"id":"c90583ee-b7dc-47b1-beeb-0e4f167259b8","block_type":"box","text":"federal income tax credit; however, the issuer of a Build America Bond may instead elect to receive a","page_number":174,"box":{"x":116,"y":227,"width":756,"height":12}},{"id":"d4f5e9d0-fde4-470a-8551-c2361c5b92c7","block_type":"box","text":"cash payment directly from the federal government in lieu of holders such as the fund receiving a tax","page_number":174,"box":{"x":116,"y":242,"width":752,"height":12}},{"id":"71f131b5-78cd-4f5f-b265-5c1dab63b4cf","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":174,"box":{"x":116,"y":258,"width":772,"height":11}},{"id":"d592bac7-2e8d-4278-977b-f67b5089314c","block_type":"box","text":"does receive tax credits from Build America Bonds or other tax credit bonds on one or more specified","page_number":174,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"4413e8e1-4e71-4210-a451-aaf4a751b493","block_type":"box","text":"dates during the fund’s taxable year, and the Fund satisfies the minimum distribution requirement, the","page_number":174,"box":{"x":116,"y":289,"width":760,"height":12}},{"id":"25a905cb-b0cf-4bab-a804-795e10640b8a","block_type":"box","text":"Fund may elect for U.S. federal income tax purposes to pass through to shareholders tax credits","page_number":174,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"3c4a13aa-2347-4c33-b964-92a8806d6c2a","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":174,"box":{"x":116,"y":320,"width":770,"height":12}},{"id":"9516f3cb-d9dd-4c7b-a358-95283651f79f","block_type":"box","text":"the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":174,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"601fa4fc-3077-4fbc-b53a-aa2d7e2b4caf","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy","page_number":174,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"767ef431-7b7c-4aa2-b44e-ce9b2342635d","block_type":"box","text":"bond, each of which must meet certain requirements specified in the Code), a “Build America Bond”","page_number":174,"box":{"x":117,"y":366,"width":744,"height":12}},{"id":"f6ae51a0-4343-4c1b-b919-a21835decf3b","block_type":"box","text":"(which includes certain qualified bonds issued before January 1, 2011) or certain other specified","page_number":174,"box":{"x":117,"y":382,"width":717,"height":12}},{"id":"c9ce5c0d-6083-4594-b28e-9d7a169cd36c","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":174,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"39ce1ffc-6360-490a-bddd-3415b4efb2db","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":174,"box":{"x":116,"y":413,"width":735,"height":12}},{"id":"946a4a5f-4a8b-41be-aa61-ba82b726bdec","block_type":"box","text":"amount would be subject to withholding provisions of the Code. Certain limitations may apply on the","page_number":174,"box":{"x":116,"y":428,"width":746,"height":12}},{"id":"574ac405-ade2-4b64-928e-6af148e94606","block_type":"box","text":"extent to which the credit may be claimed.","page_number":174,"box":{"x":116,"y":444,"width":318,"height":12}},{"id":"d3388e0c-d9ad-46be-aa5f-deac48ab9458","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":174,"box":{"x":118,"y":475,"width":263,"height":12}},{"id":"ce63bc4b-3411-41b3-8e49-30c08c100597","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which","page_number":174,"box":{"x":382,"y":475,"width":494,"height":12}},{"id":"7899ac52-5b7d-4bb0-b56e-b4e3e0268ba8","block_type":"box","text":"may be in the form of tender option bonds, variable rate demand obligations, participations, beneficial","page_number":174,"box":{"x":117,"y":490,"width":757,"height":12}},{"id":"4c7d48c8-4d22-4001-90ea-8ec8faa3fda3","block_type":"box","text":"interests in a trust, partnership interests or other forms. These investments are described in greater","page_number":174,"box":{"x":117,"y":506,"width":741,"height":12}},{"id":"8f36fbcf-1393-42dd-9fc1-a98e5a430a48","block_type":"box","text":"detail above in this section. Some of the structures used by certain Funds include interests in long-term","page_number":174,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"017098c3-4546-45c9-87c5-ac9ff272099c","block_type":"box","text":"fixed-rate municipal debt obligations, held by a trustee or custodian, that are coupled with tender","page_number":174,"box":{"x":116,"y":537,"width":720,"height":12}},{"id":"bea74f93-e1f3-422d-9023-f3fd76776307","block_type":"box","text":"option, demand and other features when the tax-exempt municipal investments are created. Together,","page_number":174,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"744e779e-917f-4e18-9650-4378fa1c5e79","block_type":"box","text":"these features entitle the holder of the interest to tender (or put) the underlying municipal debt","page_number":174,"box":{"x":116,"y":568,"width":701,"height":12}},{"id":"34fe9e2c-4008-48c9-a611-e66518bdb562","block_type":"box","text":"obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":174,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"84d20b59-4c4c-4d65-bb35-887a95a57b62","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to","page_number":174,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"cdc3f143-6132-4075-a50f-f73c6669a807","block_type":"box","text":"receive specific future interest payments, principal payments, or both, on the underlying securities held","page_number":174,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"5ae6e1fe-5212-48fe-8d66-9e8e09b3780d","block_type":"box","text":"by the custodian. Under such arrangements, the holder of the custodial receipt has the option to tender","page_number":174,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"8463efe2-2dc2-4660-b7a8-8fee67b33b0a","block_type":"box","text":"the underlying securities at their face value to the sponsor (","page_number":174,"box":{"x":116,"y":661,"width":440,"height":12}},{"id":"d52a6f72-0e18-4de6-ab7a-8ca55fd6febc","block_type":"box","text":"e.g.","page_number":174,"box":{"x":557,"y":663,"width":26,"height":10}},{"id":"b291a382-69a4-45a6-913d-159d1b8e524a","block_type":"box","text":", a Fund, or a bank or broker-dealer or","page_number":174,"box":{"x":586,"y":661,"width":284,"height":11}},{"id":"265ee7ea-f047-4bdb-a531-f69d8f786786","block_type":"box","text":"other financial institution), which is paid periodic fees equal to the difference between the securities’","page_number":174,"box":{"x":116,"y":676,"width":738,"height":12}},{"id":"5af869a2-3f69-45dc-a2c8-e4e40e16bbc6","block_type":"box","text":"fixed coupon rate and the rate that would cause the securities, coupled with the tender option, to trade","page_number":174,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"abebfeb9-974b-4ac5-870a-10665a460039","block_type":"box","text":"at par on the date of a rate adjustment.","page_number":174,"box":{"x":116,"y":707,"width":289,"height":12}},{"id":"4b8c45f3-b9d2-4f5f-92ff-1e6fa45bac01","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the","page_number":174,"box":{"x":116,"y":738,"width":747,"height":12}},{"id":"1aa8f51e-3167-4274-9306-c79ef66a45ac","block_type":"box","text":"Fund’s participation bears to the total principal amount of the Municipal Bond, and typically provides for","page_number":174,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"616a2d70-6352-4747-a1db-1c70c8494209","block_type":"box","text":"a repurchase feature for all or any part of the full principal amount of the participation interest, plus","page_number":174,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"a01ce66f-fa98-4af2-81c4-793640ca3152","block_type":"box","text":"accrued interest. Trusts and partnerships are typically used to convert long-term fixed rate high quality","page_number":174,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"7a286b91-1c77-4762-9975-db6454a0364e","block_type":"box","text":"bonds of a single state or municipal issuer into variable or floating rate demand instruments.","page_number":174,"box":{"x":117,"y":800,"width":680,"height":12}},{"id":"1a0b1d46-1255-4350-aeaf-93bea7f7c283","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt","page_number":174,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"410ab11d-c059-48d0-9a99-3b6193dedc8d","block_type":"box","text":"obligations which give the holder the right to receive payment of principal subject to the conditions","page_number":174,"box":{"x":116,"y":847,"width":731,"height":12}},{"id":"c984afd8-13dd-4db8-b2c5-b1c1a8a8b005","block_type":"box","text":"described above. The IRS has not ruled on whether the interest received on tax-exempt municipal","page_number":174,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"7c126c5d-46f9-4787-b6e0-1223ba2c8453","block_type":"box","text":"investments in the form of participation interests or custodial receipts is tax-exempt, and accordingly,","page_number":174,"box":{"x":117,"y":878,"width":751,"height":12}},{"id":"9b68732e-071c-409c-b93e-727087fbf9dd","block_type":"box","text":"II-80","page_number":174,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a6a6b418-475b-4af6-9e5b-93ddccc72521","block_type":"box","text":"NM1026U-6004408-174/267","page_number":174,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d476fb7c-b89a-444c-a906-9d3e43ee57c5","block_type":"box","text":"purchases of any such interests or receipts are based on the opinions of counsel to the sponsors of","page_number":175,"box":{"x":117,"y":87,"width":742,"height":12}},{"id":"60e6f9ee-06f8-4b4b-9d70-f0f1c83a3e8f","block_type":"box","text":"such derivative securities. Neither a Fund nor its investment adviser or sub-advisers will review the","page_number":175,"box":{"x":116,"y":103,"width":738,"height":9}},{"id":"5de7d339-4416-4d52-aade-d836b3f623bb","block_type":"box","text":"proceedings related to the creation of any tax-exempt municipal investments or the basis for such","page_number":175,"box":{"x":117,"y":118,"width":728,"height":12}},{"id":"5e2e1347-bd32-42f1-b3ac-22db2b662fb8","block_type":"box","text":"opinions.","page_number":175,"box":{"x":116,"y":134,"width":72,"height":11}},{"id":"2d640261-9756-47b9-98a4-b501fe2e611e","block_type":"box","text":"Operational and Technology Risks.","page_number":175,"box":{"x":117,"y":165,"width":279,"height":12}},{"id":"fb460137-cf94-4fdd-b221-b8d5de4411f4","block_type":"box","text":"The Fund and the entities with which it interacts directly or","page_number":175,"box":{"x":397,"y":165,"width":442,"height":12}},{"id":"228c44a3-9204-4ef0-b378-dfefa0555df0","block_type":"box","text":"indirectly are susceptible to operational and technology risks, including those related to human errors,","page_number":175,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"d733d3fc-e5ee-4cbb-9429-9014463eb8ef","block_type":"box","text":"processing errors, communication errors, systems failures, cybersecurity incidents, and the use of","page_number":175,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"2034edd0-1a56-439a-b7b4-66230c6bda8f","block_type":"box","text":"artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its","page_number":175,"box":{"x":116,"y":211,"width":713,"height":12}},{"id":"386b5cc8-fea5-471f-bb9e-c81c53510f2b","block_type":"box","text":"shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s","page_number":175,"box":{"x":116,"y":227,"width":760,"height":11}},{"id":"8bcb9bb8-2d80-4d07-bf38-6d5ad7ce45aa","block_type":"box","text":"adviser, administrator, distributor, other service providers (e.g., index and benchmark providers,","page_number":175,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"d436fcda-dcd4-443f-9f34-2f52b47183e6","block_type":"box","text":"accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers,","page_number":175,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"fb413f4a-c86a-4714-9c1f-a0c0ede59100","block_type":"box","text":"Authorized Participants, listing exchanges, other financial market operators, and governmental","page_number":175,"box":{"x":116,"y":273,"width":706,"height":12}},{"id":"f98d27a7-5290-476e-ba7f-91ff858f251b","block_type":"box","text":"authorities, as applicable. Operational and technology risks for the issuers in which the Fund invests","page_number":175,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"dd5279ac-e4bd-44a7-9a88-d7d1b5bfe086","block_type":"box","text":"could also result in material adverse consequences for such issuers and may cause the Fund’s","page_number":175,"box":{"x":116,"y":304,"width":711,"height":12}},{"id":"5742af62-5b8b-4109-b90f-1c2cda84150b","block_type":"box","text":"investments in such issuers to lose value. The Fund may incur substantial costs in order to mitigate","page_number":175,"box":{"x":117,"y":320,"width":741,"height":12}},{"id":"351126d0-f444-4168-9b46-5d1607f77126","block_type":"box","text":"operational and technology risks.","page_number":175,"box":{"x":116,"y":335,"width":250,"height":12}},{"id":"ac9b109d-4d7e-43aa-82bd-b5b8b18bca7c","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in","page_number":175,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"fc32e6b2-faec-463c-896f-220120d9dfe5","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":175,"box":{"x":116,"y":382,"width":746,"height":12}},{"id":"05ae45bb-483f-456d-9bd2-5a81a883b326","block_type":"box","text":"gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or","page_number":175,"box":{"x":116,"y":397,"width":772,"height":12}},{"id":"d335d054-d96f-47f3-bdf3-90726eec2b49","block_type":"box","text":"destroying data, and causing operational disruption. Geopolitical tension may increase the scale and","page_number":175,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"4dbcce53-0694-4284-b319-b9d6391dd138","block_type":"box","text":"sophistication of deliberate attacks, particularly those from nation states or from entities with nation","page_number":175,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"6bcc9dec-8a9f-42e8-bfba-fd51e11249d6","block_type":"box","text":"state backing. 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Furthermore, cybersecurity incidents may render","page_number":175,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"e4efbcb1-e407-478f-8ff8-5c9330354de8","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of","page_number":175,"box":{"x":117,"y":537,"width":766,"height":12}},{"id":"43e89d54-e6c6-4992-b84d-eb000e8557dd","block_type":"box","text":"Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete.","page_number":175,"box":{"x":117,"y":552,"width":761,"height":12}},{"id":"906f34fb-2f3a-4844-ae4d-44c467c50e97","block_type":"box","text":"Power outages, natural disasters, equipment malfunctions and processing errors that threaten","page_number":175,"box":{"x":117,"y":568,"width":702,"height":12}},{"id":"7ba79acb-2428-4da9-b1a6-f13876f98c18","block_type":"box","text":"information and technology systems relied upon by the Fund or its service providers, as well as market","page_number":175,"box":{"x":117,"y":583,"width":766,"height":12}},{"id":"7c886c50-9721-444b-8bd4-c83eee137112","block_type":"box","text":"events that occur at a pace that overloads these systems, may also disrupt business operations or","page_number":175,"box":{"x":116,"y":599,"width":735,"height":12}},{"id":"b08d1339-3dfa-4286-8c5f-38c00d4edf0f","block_type":"box","text":"impact critical data. Recent advances in AI technology pose risks to the Fund and its portfolio","page_number":175,"box":{"x":117,"y":614,"width":696,"height":12}},{"id":"177a21fe-1df1-4a64-b971-8a2e3b17c86e","block_type":"box","text":"investments. These advancements could harm the Fund and its portfolio investments by reducing the","page_number":175,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"897e705f-88f7-4d79-99e7-6dbc4f8fb472","block_type":"box","text":"demand for both the technology and software offerings of the Fund’s portfolio investments.","page_number":175,"box":{"x":116,"y":645,"width":677,"height":12}},{"id":"ee1f4b21-6ef2-46a0-ab86-f050ccbd3a8c","block_type":"box","text":"Additionally, these advancements could significantly disrupt the Fund’s portfolio investments and","page_number":175,"box":{"x":116,"y":661,"width":716,"height":12}},{"id":"b5b9a9f9-f9ac-440c-ad30-350344b47ad1","block_type":"box","text":"subject them to increased competition, which could have a material adverse effect on business,","page_number":175,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"19be1f67-02bf-497e-97e9-3d324926e335","block_type":"box","text":"financial condition, and results of operations. AI technology advancements, including efficiency","page_number":175,"box":{"x":116,"y":692,"width":703,"height":12}},{"id":"46f75604-0ab2-4dfc-87c6-62a0453e1d3c","block_type":"box","text":"improvements, without related increases in the adoption and development of such technologies, could","page_number":175,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"9da2c76b-c1fc-423c-ad3d-e9e01a8dff1e","block_type":"box","text":"also negatively impact demand for, and the valuation of, digital infrastructure assets.","page_number":175,"box":{"x":116,"y":723,"width":624,"height":12}},{"id":"6eb63c36-28ec-45d4-a2f3-94ad7ea9f542","block_type":"box","text":"The Fund and its portfolio investments could be exposed to the risks of AI technology if third-party","page_number":175,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"22f28856-7b3d-4402-b953-9f739d7d8e59","block_type":"box","text":"service providers or any counterparties, whether or not known to the Fund, also use AI technology in","page_number":175,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"d1e6009c-2fa0-4875-ae85-d8af90ee16a7","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":175,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"589eef93-b11d-46c8-9b2b-133186ce9b3a","block_type":"box","text":"of AI technology in third-party products or services.","page_number":175,"box":{"x":116,"y":800,"width":377,"height":12}},{"id":"1679769a-8620-4bf8-b914-a390629fe3c5","block_type":"box","text":"Use of AI technology could include the input of confidential information in contravention of applicable","page_number":175,"box":{"x":117,"y":831,"width":750,"height":12}},{"id":"6d15736a-891b-4d54-8fdc-a2a065ba2310","block_type":"box","text":"policies, contractual or other obligations or restrictions, resulting in such confidential information","page_number":175,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"17e84e33-3029-4284-9bf5-be4c0efd12e9","block_type":"box","text":"becoming accessible by other third-party AI technology applications and users.","page_number":175,"box":{"x":117,"y":862,"width":589,"height":12}},{"id":"af2711a2-b608-41e6-876d-3b857635b1b4","block_type":"box","text":"II-81","page_number":175,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"cbf1ad8e-fbfc-4155-90f0-f3851d09ebf9","block_type":"box","text":"NM1026U-6004408-175/267","page_number":175,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"614b076e-0a00-4898-beef-f8f2cd71602c","block_type":"box","text":"Independent of its context of use, AI technology is generally highly reliant on the collection and","page_number":176,"box":{"x":117,"y":87,"width":706,"height":12}},{"id":"2a744c2a-0c16-4a75-84cf-a2f29486b2c8","block_type":"box","text":"analysis of large amounts of data, may incorporate biased or inaccurate data, and it is not possible or","page_number":176,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"d7642228-0a1f-4494-8d80-9c55923c9b17","block_type":"box","text":"practicable to incorporate all relevant data into the models that AI technology utilizes to operate.","page_number":176,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"548fcdca-430e-40bb-be9b-7b9971ca6afa","block_type":"box","text":"Certain data in such models will inevitably contain a degree of inaccuracy and error, or could otherwise","page_number":176,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"a7c98f8e-5026-461b-baab-41ecdcd5f0fe","block_type":"box","text":"be inadequate or flawed, which would be likely to degrade the effectiveness of AI technology. The","page_number":176,"box":{"x":117,"y":149,"width":729,"height":12}},{"id":"c85facce-fcdb-4342-9c90-928396a96777","block_type":"box","text":"output or results of any such AI technologies may therefore be incomplete, erroneous, distorted or","page_number":176,"box":{"x":116,"y":165,"width":733,"height":12}},{"id":"305ba48f-c107-4868-97fd-d6fbb2358a42","block_type":"box","text":"misleading. Further, AI tools may lack transparency as to how data is utilized and how outputs are","page_number":176,"box":{"x":117,"y":180,"width":731,"height":12}},{"id":"409ef9fc-73bf-43dc-8dad-1086c3e7666e","block_type":"box","text":"generated. AI technologies may also allow the unintended introduction of vulnerabilities into","page_number":176,"box":{"x":116,"y":196,"width":684,"height":12}},{"id":"9b698b13-ee18-4dc3-be5b-4e787439f102","block_type":"box","text":"infrastructures and applications. To the extent that the Fund or its portfolio investments are exposed to","page_number":176,"box":{"x":117,"y":211,"width":764,"height":12}},{"id":"0cbf84a2-05d2-4516-aaaa-0990fe76a516","block_type":"box","text":"the risks of AI technology use, any such inaccuracies or errors could have adverse impacts on the","page_number":176,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"cf0a6e02-d9c3-4355-974e-c2d5b80e419a","block_type":"box","text":"Fund or its investments.","page_number":176,"box":{"x":117,"y":242,"width":182,"height":10}},{"id":"438cab94-adb5-4a55-9cc6-2c1d92c72af7","block_type":"box","text":"Regulations related to AI technology could also impose certain obligations and costs related to","page_number":176,"box":{"x":117,"y":273,"width":705,"height":12}},{"id":"e3ee2068-5944-459d-a18c-3553fef92d6a","block_type":"box","text":"monitoring and compliance. For example, in April 2023, the Federal Trade Commission, U.S.","page_number":176,"box":{"x":117,"y":289,"width":693,"height":12}},{"id":"25c1cd66-148a-4544-906c-c532b4bb0a10","block_type":"box","text":"Department of Justice, Consumer Financial Protection Bureau, and U.S. Equal Employment","page_number":176,"box":{"x":117,"y":304,"width":686,"height":12}},{"id":"08c7745b-afeb-4bf7-a01a-7feab1952aa6","block_type":"box","text":"Opportunity Commission released a joint statement on artificial intelligence demonstrating interest in","page_number":176,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"3eaac8b0-75fd-4fbd-ae21-9d4dd9abd1f5","block_type":"box","text":"monitoring the development and use of automated systems and enforcement of their respective laws","page_number":176,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"12d7ba0f-37f0-4187-999f-f65aaf8830eb","block_type":"box","text":"and regulations. In October 2023, an executive order established new standards for AI safety and","page_number":176,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"d63c58b8-775d-4f77-b341-755061d5bacf","block_type":"box","text":"security. In addition to the U.S. regulatory framework, in 2024, the EU adopted the Artificial Intelligence","page_number":176,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"49c63b29-d2f9-4fe3-9970-5e7a846025dd","block_type":"box","text":"Act, which applies to certain AI technology and the","page_number":176,"box":{"x":116,"y":382,"width":380,"height":12}},{"id":"d1aad485-9ea8-4bd7-9f5c-6ec4cfd9ba0f","block_type":"box","text":"data used to train, test, and deploy them, which","page_number":176,"box":{"x":497,"y":382,"width":357,"height":12}},{"id":"423ae7ec-d858-4f7a-8c54-5e6e0e449d00","block_type":"box","text":"may create additional compliance burdens, higher administrative costs, and significant penalties should","page_number":176,"box":{"x":117,"y":397,"width":770,"height":12}},{"id":"41cabc4f-0fe0-49fe-afef-da44218289ec","block_type":"box","text":"the Fund, the adviser, or the Fund’s portfolio investments fail to comply.","page_number":176,"box":{"x":116,"y":413,"width":537,"height":12}},{"id":"83bfe9ac-fa0d-4b7f-a8c9-031dbec911bf","block_type":"box","text":"AI technology and its applications, including in the investment and financial sectors, continue to","page_number":176,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"e2fce890-c516-4330-ba1d-14aca179588c","block_type":"box","text":"develop rapidly, and it is impossible to predict the future risks that may arise from such developments.","page_number":176,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"3068e16a-45d4-48d5-b057-5b2207870fcf","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":176,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"9f0ec194-fc68-4786-b4b4-4ce22fdcdd3d","block_type":"box","text":"be able to anticipate, prevent, mitigate, or remediate all of the potential risks, challenges, or impacts of","page_number":176,"box":{"x":117,"y":490,"width":763,"height":12}},{"id":"631fcfcc-2396-4d8e-98d5-807a8b31c45c","block_type":"box","text":"such changes.","page_number":176,"box":{"x":116,"y":506,"width":113,"height":12}},{"id":"1e9297a5-e601-47d8-8eb4-f610fe21e50b","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security","page_number":176,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"20ecc7fb-90ba-4215-896b-ed5a5a36634b","block_type":"box","text":"and cybersecurity risk management policies and procedures, their methods of risk management may","page_number":176,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"f88256f9-0b3e-4b47-86b7-28dd534a7687","block_type":"box","text":"differ from those of the Fund in the setting of priorities, the personnel and resources available or the","page_number":176,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"5c999aa4-203f-4a83-a638-c6cd30ba6484","block_type":"box","text":"effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through","page_number":176,"box":{"x":116,"y":583,"width":706,"height":12}},{"id":"cb9d706a-55be-45da-99fa-9534bdbddded","block_type":"box","text":"controls, procedures and oversight, including establishing business continuity plans and risk","page_number":176,"box":{"x":116,"y":599,"width":687,"height":12}},{"id":"74c15524-923d-439e-91a0-836274126a3f","block_type":"box","text":"management systems. However, there are inherent limitations in such plans and systems, including","page_number":176,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"ee5cfa81-637c-4f7a-9431-9f198047e84e","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":176,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"f0aae59c-00e6-40c2-a333-5296c315cf29","block_type":"box","text":"future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":176,"box":{"x":116,"y":645,"width":719,"height":12}},{"id":"59e35a9e-141a-4096-a3e0-bfaa92631268","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that","page_number":176,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"bc072307-892e-4cd3-8351-61786cae0501","block_type":"box","text":"prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund","page_number":176,"box":{"x":117,"y":676,"width":760,"height":12}},{"id":"0280ba49-53e6-48b0-8e42-2cd6ce65cc07","block_type":"box","text":"cannot control the systems, information security or other cybersecurity of the issuers in which it invests","page_number":176,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"8752eb64-38aa-4725-93c6-e39efea9b19b","block_type":"box","text":"or its service providers, counterparties, and other third parties whose activities affect the Fund.","page_number":176,"box":{"x":116,"y":707,"width":700,"height":12}},{"id":"11db782c-98bb-45a5-b037-85822506844c","block_type":"box","text":"Lastly, the regulatory climate governing cybersecurity and data protection is developing quickly and","page_number":176,"box":{"x":117,"y":738,"width":735,"height":12}},{"id":"b34f4917-9b3b-4202-9de3-29deb6aa5f1a","block_type":"box","text":"may vary considerably across jurisdictions. Regulators continue to develop new rules and standards","page_number":176,"box":{"x":117,"y":754,"width":742,"height":12}},{"id":"2a651d0d-ee40-43f3-86af-de0ac63ae275","block_type":"box","text":"related to cybersecurity and data protection. Compliance with evolving regulations can be demanding","page_number":176,"box":{"x":117,"y":769,"width":750,"height":12}},{"id":"f0134e9d-2d44-4e0a-8db0-b163284cf5ed","block_type":"box","text":"and costly, requiring substantial resources to monitor and implement required changes.","page_number":176,"box":{"x":116,"y":785,"width":647,"height":12}},{"id":"4cba1bf9-85ce-4c73-ae5c-d1ccbd38b30d","block_type":"box","text":"Participation Notes.","page_number":176,"box":{"x":116,"y":816,"width":157,"height":12}},{"id":"74a04e13-d8a9-4628-90df-8076620afe15","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that","page_number":176,"box":{"x":279,"y":816,"width":586,"height":12}},{"id":"8b72bb8e-51dc-44ec-91f0-00eb7fb852ca","block_type":"box","text":"entitle the Fund to a return measured by the change in value of an identified underlying security or","page_number":176,"box":{"x":116,"y":831,"width":733,"height":12}},{"id":"d7004d9f-d619-4490-b9b9-ec8309f7a9e3","block_type":"box","text":"basket of securities (collectively, the “underlying security”). Participation notes are typically used when","page_number":176,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"3da362ae-bd18-4a3c-ab0f-629666e4b250","block_type":"box","text":"a direct investment in the underlying security is restricted due to country-specific regulations.","page_number":176,"box":{"x":116,"y":862,"width":692,"height":12}},{"id":"bc70ea57-d549-46fd-8cbe-2d723ea9467d","block_type":"box","text":"II-82","page_number":176,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"50a7e724-cad3-4798-b218-3679addd451e","block_type":"box","text":"NM1026U-6004408-176/267","page_number":176,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1edcee32-89f4-4793-82cc-033b0dd8a8cc","block_type":"box","text":"The Fund is subject to counterparty risk associated with each issuer. Investment in a participation note","page_number":177,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"fe64be9c-a1bd-46e8-a725-8dbe97f36572","block_type":"box","text":"is not the same as investment in the constituent shares of the company. A participation note represents","page_number":177,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"fb903381-db0c-4529-90d9-019ae8a7730c","block_type":"box","text":"only an obligation of the issuer to provide the Fund the economic performance equivalent to holding","page_number":177,"box":{"x":116,"y":118,"width":744,"height":12}},{"id":"7c568ff5-869c-417f-ab77-701560902a7f","block_type":"box","text":"shares of an underlying security. A participation note does not provide any beneficial or equitable","page_number":177,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"e2a686b5-aedb-45c9-b906-7bfe6942b538","block_type":"box","text":"entitlement or interest in the relevant underlying security. In other words, shares of the underlying","page_number":177,"box":{"x":116,"y":149,"width":727,"height":12}},{"id":"da313355-a3d4-4b50-bdb5-6962decaf8a8","block_type":"box","text":"security are not in any way owned by the Fund. However, each participation note synthetically","page_number":177,"box":{"x":116,"y":165,"width":702,"height":12}},{"id":"c17da086-80bb-424c-828b-f9b59e50876a","block_type":"box","text":"replicates the economic benefit of holding shares in the underlying security. Because a participation","page_number":177,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"222a36d5-78cc-48b0-b4ba-7a580bdc51c7","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":177,"box":{"x":117,"y":196,"width":770,"height":12}},{"id":"eff2369c-3a93-4f40-9d4d-8eda3cc2ac40","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":177,"box":{"x":117,"y":211,"width":745,"height":12}},{"id":"dc839690-0064-420b-aea5-ffeafd1ca1ce","block_type":"box","text":"perform its obligations. A Fund attempts to mitigate that risk by purchasing only from issuers","page_number":177,"box":{"x":117,"y":227,"width":689,"height":12}},{"id":"1e2a3dff-3d53-4866-9ffd-723daf069203","block_type":"box","text":"determined to be creditworthy.","page_number":177,"box":{"x":116,"y":242,"width":231,"height":12}},{"id":"f188cb0d-5d4b-4eeb-a471-8db4cdc1b738","block_type":"box","text":"The counterparty may, but is not required to, purchase the shares of the underlying security to hedge","page_number":177,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"c0313e7a-69b5-4fac-8862-b10ba826544b","block_type":"box","text":"its obligation. A Fund may, but is not required to, purchase credit protection against the default of the","page_number":177,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"e931cae0-ea3e-4d5f-b797-4bd34ccc59e2","block_type":"box","text":"issuer. When the participation note expires or a Fund exercises the participation note and closes its","page_number":177,"box":{"x":117,"y":304,"width":742,"height":12}},{"id":"0c9c9f19-cd08-4e4e-9619-34eb03d73fbc","block_type":"box","text":"position, the Fund receives a payment that is based upon the then-current value of the underlying","page_number":177,"box":{"x":117,"y":320,"width":728,"height":12}},{"id":"d0333c1e-d3db-4837-94fc-33a82fae1550","block_type":"box","text":"security converted into U.S. dollars (less transaction costs). The price, performance and liquidity of a","page_number":177,"box":{"x":116,"y":335,"width":751,"height":12}},{"id":"854e9386-dfe4-4824-af6c-20f84fbe2c81","block_type":"box","text":"participation note are all linked directly to the underlying security. A Fund’s ability to redeem or","page_number":177,"box":{"x":117,"y":351,"width":704,"height":12}},{"id":"629bad8d-5eb9-4efc-b575-804922e93234","block_type":"box","text":"exercise a participation note generally is dependent on the liquidity in the local trading market for the","page_number":177,"box":{"x":116,"y":366,"width":750,"height":12}},{"id":"81c4ff3c-9b51-4cf0-ac50-5982119a80e5","block_type":"box","text":"security underlying the participation note.","page_number":177,"box":{"x":116,"y":382,"width":310,"height":12}},{"id":"f816ae8a-ce25-4e1e-9f7d-527035c52e72","block_type":"box","text":"Portfolio Turnover Rates.","page_number":177,"box":{"x":116,"y":413,"width":201,"height":9}},{"id":"2599c170-30a8-4732-901f-cbd887357bab","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale","page_number":177,"box":{"x":318,"y":413,"width":569,"height":12}},{"id":"be5cc214-ad0c-4bd7-ac77-38718fe42dd2","block_type":"box","text":"or purchase when the Manager believes investment considerations warrant such sale or purchase.","page_number":177,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"c52cf09b-8b0b-4a1b-ab25-38e6d53f4eb7","block_type":"box","text":"Although certain Funds will use an approach to investing that is largely a passive, indexing approach,","page_number":177,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"b9529981-46a8-4f53-8069-ef026fe2aee2","block_type":"box","text":"such Funds may engage in a substantial number of portfolio transactions. With respect to these Funds,","page_number":177,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"fbe206bd-03ad-46a7-99f9-788ba61cfb0a","block_type":"box","text":"the rate of portfolio turnover will be a limiting factor when the Manager considers whether to purchase","page_number":177,"box":{"x":116,"y":475,"width":759,"height":12}},{"id":"93b82eff-8950-4e72-b810-20897541218a","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":177,"box":{"x":116,"y":490,"width":756,"height":12}},{"id":"93a87408-e27b-4e9e-8104-39750ccb0cf5","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":177,"box":{"x":116,"y":506,"width":765,"height":12}},{"id":"847530a6-f041-44d2-8988-e1c15836479a","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":177,"box":{"x":116,"y":521,"width":305,"height":12}},{"id":"63614909-da92-4de9-a996-7226a4b8b70e","block_type":"box","text":"i.e.","page_number":177,"box":{"x":422,"y":521,"width":21,"height":10}},{"id":"2007e5e6-72a9-493a-977d-84437fa7e734","block_type":"box","text":", 100% or more) may result in increased transaction costs","page_number":177,"box":{"x":446,"y":521,"width":433,"height":12}},{"id":"c6d415b5-e49a-4741-a071-6f41a2b749a7","block_type":"box","text":"to a Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale","page_number":177,"box":{"x":116,"y":537,"width":759,"height":12}},{"id":"0b0f98e8-2d03-4bcd-a067-7d403f1e868f","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":177,"box":{"x":116,"y":552,"width":759,"height":12}},{"id":"956f442f-a25e-42af-ba3d-9da47bbab664","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":177,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"ae80347a-57cd-4aef-ae4a-7d219c74ff48","block_type":"box","text":"term capital gain or loss. These effects of higher than normal portfolio turnover may adversely affect a","page_number":177,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"6d335bf8-d713-4875-b2ed-e2a904f5b033","block_type":"box","text":"Fund’s performance.","page_number":177,"box":{"x":117,"y":599,"width":158,"height":12}},{"id":"2a5eeb2d-61f2-46f4-95e1-eacf203f085b","block_type":"box","text":"Preferred Stock.","page_number":177,"box":{"x":116,"y":630,"width":129,"height":9}},{"id":"841aa554-ba4c-4c7b-97a7-84079c7dbd26","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over","page_number":177,"box":{"x":246,"y":630,"width":635,"height":12}},{"id":"10025464-9d36-482b-8af0-c85bf24c1d27","block_type":"box","text":"common stock in liquidation (and generally dividends as well) but is subordinated to bond holders and","page_number":177,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"b93f4cad-d24c-447b-9ec9-6a267cbd336e","block_type":"box","text":"other creditors in all respects. As a general rule,","page_number":177,"box":{"x":116,"y":661,"width":355,"height":12}},{"id":"0305d599-1f10-4d32-9169-71b11874e12b","block_type":"box","text":"the market value of preferred stock with a fixed","page_number":177,"box":{"x":477,"y":661,"width":348,"height":12}},{"id":"7d671f96-6ea3-4b07-8139-21ddc320ebe1","block_type":"box","text":"dividend rate and no conversion element varies inversely with interest rates and perceived credit risk,","page_number":177,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"dc8428ba-99a3-4f8a-87b6-c9376c5a1784","block_type":"box","text":"while the market price of convertible preferred stock generally also reflects some element of","page_number":177,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"271cde94-b74c-4013-b32c-a43c08fc3ddd","block_type":"box","text":"conversion value. Because preferred stock is junior to debt securities and other obligations of the","page_number":177,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"01265e5e-51d8-4f7b-9fdc-0267bf2c7781","block_type":"box","text":"issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a","page_number":177,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"6709d5f2-c5a5-4441-88e6-318f6c1dbaed","block_type":"box","text":"preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike","page_number":177,"box":{"x":117,"y":738,"width":720,"height":12}},{"id":"14af951f-a544-4bd9-a1e7-dfa3d00875e0","block_type":"box","text":"interest payments on debt securities, preferred stock dividends are payable only if declared by the","page_number":177,"box":{"x":117,"y":754,"width":726,"height":12}},{"id":"1f4cbc54-58cb-4629-a959-9e2f45c5161d","block_type":"box","text":"issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption","page_number":177,"box":{"x":117,"y":769,"width":743,"height":12}},{"id":"378c6b08-d55c-414d-a059-af27b43b61c8","block_type":"box","text":"provisions.","page_number":177,"box":{"x":117,"y":785,"width":78,"height":12}},{"id":"6f3c5b11-b731-45f1-8de2-b36c935143bc","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":177,"box":{"x":118,"y":816,"width":224,"height":12}},{"id":"d9ad14c1-005c-48fa-994c-cda2a7b7a0ba","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment","page_number":177,"box":{"x":350,"y":816,"width":497,"height":12}},{"id":"6f3527d4-0fb4-4342-839b-b97823a6345c","block_type":"box","text":"funds that pay dividends that are exempt from regular U.S. federal income tax. Such funds in turn","page_number":177,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"b8229e21-2a45-476d-866d-691ea45486cd","block_type":"box","text":"invest in municipal bonds and other assets that pay interest or make distributions that are exempt from","page_number":177,"box":{"x":117,"y":847,"width":765,"height":12}},{"id":"8f72a6f6-72ae-4fc4-a677-0bbc41f3fa07","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":177,"box":{"x":117,"y":862,"width":751,"height":12}},{"id":"10015289-4166-4c30-8318-673a69176b17","block_type":"box","text":"development of low-income, multi-family housing. Investment in such tax-exempt preferred shares","page_number":177,"box":{"x":116,"y":878,"width":733,"height":12}},{"id":"39135a3f-4596-4cb4-84f0-3ccd19d59306","block_type":"box","text":"II-83","page_number":177,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fc719141-326a-4c3c-8ad0-9b8af0625c78","block_type":"box","text":"NM1026U-6004408-177/267","page_number":177,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8a1beedf-2f46-42ff-90cd-caf0534efb56","block_type":"box","text":"involves many of the same issues as investing in other investment companies. These investments also","page_number":178,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"8d43e9b1-52ff-4b2b-918a-be5120ae0152","block_type":"box","text":"have additional risks, including illiquid investments risk, the absence of regulation governing","page_number":178,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"01644a63-1ece-42c9-8117-be0d16fe9f62","block_type":"box","text":"investment practices, capital structure and leverage, affiliated transactions and other matters, and","page_number":178,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"846a7b71-a6df-416d-b2aa-4afc5a43f368","block_type":"box","text":"concentration of investments in particular issuers or industries. The Municipal Bond Funds will treat","page_number":178,"box":{"x":116,"y":134,"width":740,"height":11}},{"id":"fd25bde5-da1f-4bd5-8f75-fa67dede05c8","block_type":"box","text":"investments in tax-exempt preferred shares as investments in municipal bonds.","page_number":178,"box":{"x":117,"y":149,"width":593,"height":12}},{"id":"ec1de3bd-2c9f-4abd-bacd-3e1d07a3a147","block_type":"box","text":"Trust Preferred Securities.","page_number":178,"box":{"x":118,"y":180,"width":193,"height":10}},{"id":"0ed56a03-cdd6-41b5-b62c-16c559d61d61","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred","page_number":178,"box":{"x":312,"y":180,"width":525,"height":12}},{"id":"d077a15c-036c-47ba-b6e9-e506427f0a02","block_type":"box","text":"securities are typically issued by corporations, generally in the form of interest bearing notes with","page_number":178,"box":{"x":116,"y":196,"width":724,"height":12}},{"id":"17d72add-4703-4689-9438-b99308b0a27a","block_type":"box","text":"preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the","page_number":178,"box":{"x":117,"y":211,"width":751,"height":12}},{"id":"33e2b333-eceb-4e97-9991-2bf02ab5b6b9","block_type":"box","text":"form of beneficial interests in subordinated debentures or similarly structured securities. The trust","page_number":178,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"7b19c759-c25a-474f-9a67-d77678262070","block_type":"box","text":"preferred securities market consists of both fixed and adjustable coupon rate securities that are either","page_number":178,"box":{"x":117,"y":242,"width":758,"height":12}},{"id":"d2697c34-ec75-498d-a70c-5cc4febf1c63","block_type":"box","text":"perpetual in nature or have stated maturity dates.","page_number":178,"box":{"x":117,"y":258,"width":370,"height":12}},{"id":"dc0e1126-87a2-448d-9894-4c4acb5a9d50","block_type":"box","text":"Trust preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit","page_number":178,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"a28c9e7b-3c54-4bb1-a8bc-e54dce90aaa2","block_type":"box","text":"from a guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition,","page_number":178,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"42d25c70-32f0-430a-af4b-503857d9fd0c","block_type":"box","text":"trust preferred securities typically permit an issuer to defer the payment of income for five years or","page_number":178,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"aa095d3c-e619-424e-b87f-44ce6391a4ed","block_type":"box","text":"more without triggering an event of default. Because of their subordinated position in the capital","page_number":178,"box":{"x":117,"y":335,"width":713,"height":12}},{"id":"83b75faf-d29c-4b78-8985-5126b952c1f0","block_type":"box","text":"structure of an issuer, the ability to defer payments for extended periods of time without default","page_number":178,"box":{"x":116,"y":351,"width":708,"height":12}},{"id":"25b97078-bf64-474c-b1d9-3de5409b8dea","block_type":"box","text":"consequences to the issuer, and certain other features (such as restrictions on common dividend","page_number":178,"box":{"x":116,"y":366,"width":725,"height":12}},{"id":"69b7381e-97c8-4580-8067-f4435614c18b","block_type":"box","text":"payments by the issuer or ultimate guarantor when full cumulative payments on the trust preferred","page_number":178,"box":{"x":117,"y":382,"width":733,"height":12}},{"id":"4a7ab0c9-5ee6-4bb0-975a-11939667f1f3","block_type":"box","text":"securities have not been made), these trust preferred securities are often treated as close substitutes","page_number":178,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"4f3486d4-5023-4541-bdb5-ab0aafd3abd9","block_type":"box","text":"for traditional preferred securities, both by issuers and investors.","page_number":178,"box":{"x":116,"y":413,"width":483,"height":12}},{"id":"611c7bdb-9356-4315-b7e9-f464898b3960","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":178,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"4aeed1ef-699f-4758-b3ec-d4a4a6a44299","block_type":"box","text":"®","page_number":178,"box":{"x":857,"y":443,"width":9,"height":7}},{"id":"f85483ac-bafb-48ef-b91e-1ada9f7f2391","block_type":"box","text":"”);","page_number":178,"box":{"x":867,"y":444,"width":20,"height":12}},{"id":"f8eb8e76-d052-4f42-97f7-218b1d16d88a","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":178,"box":{"x":117,"y":459,"width":322,"height":12}},{"id":"d6ce375b-6638-4ce1-81cf-d6edf242fc3b","block_type":"box","text":"®","page_number":178,"box":{"x":439,"y":458,"width":10,"height":7}},{"id":"ebdce3d2-bb35-4f94-ad09-2bee1335af64","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":178,"box":{"x":449,"y":459,"width":330,"height":12}},{"id":"c0a67c0c-b805-441c-9263-1799cc15a7eb","block_type":"box","text":"®","page_number":178,"box":{"x":780,"y":458,"width":9,"height":7}},{"id":"7524ef9b-86ef-4fda-bfb0-49e7405713a1","block_type":"box","text":"” ); quarterly","page_number":178,"box":{"x":790,"y":459,"width":95,"height":12}},{"id":"8f188902-37a0-4aa6-a473-11c62fb5bb4c","block_type":"box","text":"income debt securities (“QUIDS","page_number":178,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"6f814b35-a732-4c8d-8005-f734ce5dc293","block_type":"box","text":"®","page_number":178,"box":{"x":352,"y":474,"width":10,"height":7}},{"id":"256a0710-4402-402d-b74d-40f7dd454919","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":178,"box":{"x":362,"y":475,"width":361,"height":12}},{"id":"b125b758-df66-4a0a-b23d-9fbf3b043d90","block_type":"box","text":"SM","page_number":178,"box":{"x":724,"y":475,"width":16,"height":6}},{"id":"645b8a0c-12e6-4647-83b9-52edfef79c65","block_type":"box","text":"”); corporate trust","page_number":178,"box":{"x":741,"y":475,"width":133,"height":12}},{"id":"9a5cb818-30eb-44bd-829e-154caa0b0c74","block_type":"box","text":"securities (“CORTS","page_number":178,"box":{"x":116,"y":490,"width":145,"height":12}},{"id":"d5234b24-8276-4f3a-bfcb-cc32a1794ef9","block_type":"box","text":"®","page_number":178,"box":{"x":262,"y":489,"width":9,"height":7}},{"id":"62318073-798b-4013-98c9-61956ca90ca8","block_type":"box","text":"”); public income notes (“PINES","page_number":178,"box":{"x":271,"y":490,"width":235,"height":12}},{"id":"e64fffbe-7bcc-4614-9fd5-307667929872","block_type":"box","text":"®","page_number":178,"box":{"x":507,"y":489,"width":9,"height":7}},{"id":"50001e6b-cd0c-45de-81a3-17148c446fe5","block_type":"box","text":"”); and other trust preferred securities.","page_number":178,"box":{"x":517,"y":490,"width":287,"height":12}},{"id":"7208f6db-01bb-4c4e-9a6d-a31ffcb1ffb7","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in","page_number":178,"box":{"x":116,"y":521,"width":766,"height":12}},{"id":"4dd03680-6913-4a06-b4a9-5ce26323de51","block_type":"box","text":"nature. In certain instances, a final maturity date may be extended and/or the final payment of principal","page_number":178,"box":{"x":117,"y":537,"width":767,"height":12}},{"id":"c2d472ce-4f5c-420e-a812-8ddd753ab79f","block_type":"box","text":"may be deferred at the issuer’s option for a specified time without default. No redemption can typically","page_number":178,"box":{"x":117,"y":552,"width":760,"height":12}},{"id":"7631bfde-b998-4dd9-87fb-2d938e8f0a0f","block_type":"box","text":"take place unless all cumulative payment obligations have been met, although issuers may be able to","page_number":178,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"2ad71cf0-9567-46d0-b4fb-88afd50c7ddb","block_type":"box","text":"engage in open-market repurchases without regard to whether all payments have been paid.","page_number":178,"box":{"x":116,"y":583,"width":693,"height":12}},{"id":"c49c38a9-c0a5-4b71-b7ce-964ddc25b092","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by","page_number":178,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"339a4424-395c-4680-b291-65000a3e944e","block_type":"box","text":"operating companies and are not a direct obligation of an operating company. At the time the trust or","page_number":178,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"fa2d175f-1cfd-4e67-9843-8585a3378f72","block_type":"box","text":"special purpose entity sells such preferred securities to investors, it purchases debt of the operating","page_number":178,"box":{"x":116,"y":645,"width":745,"height":12}},{"id":"4f400a56-f7ac-4e5a-ab0c-9360d25e4499","block_type":"box","text":"company (with terms comparable to those of the trust or special purpose entity securities), which","page_number":178,"box":{"x":116,"y":661,"width":717,"height":12}},{"id":"733b49ea-5caa-495c-b11a-628701102c15","block_type":"box","text":"enables the operating company to deduct for tax purposes the interest paid on the debt held by the","page_number":178,"box":{"x":116,"y":676,"width":734,"height":12}},{"id":"3f1d9985-37af-4270-ae47-42b643faaf21","block_type":"box","text":"trust or special purpose entity. The trust or special purpose entity is generally required to be treated as","page_number":178,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"bcbb364f-67c1-4906-b85e-298e4b6a7746","block_type":"box","text":"transparent for U.S. federal income tax purposes such that the holders of the trust preferred securities","page_number":178,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"f8c3a20e-a602-4122-96a3-0ed7dacd3d2b","block_type":"box","text":"are treated as owning beneficial interests in the underlying debt of the operating company. Accordingly,","page_number":178,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"8008ab5e-b0f8-48b0-9e2c-45eb9ce7330b","block_type":"box","text":"payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":178,"box":{"x":117,"y":738,"width":757,"height":12}},{"id":"757a5620-5b70-45fb-a83e-626abb27776a","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating","page_number":178,"box":{"x":117,"y":754,"width":727,"height":12}},{"id":"67b1b7bc-a157-4a51-a0a4-7d168df7c5b6","block_type":"box","text":"company’s debt and would have priority with respect to the operating company’s earnings and profits","page_number":178,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"56d07038-ad7b-4629-9512-acb43ef084a3","block_type":"box","text":"over the operating company’s common shareholders, but would typically be subordinated to other","page_number":178,"box":{"x":116,"y":785,"width":725,"height":12}},{"id":"07211880-c332-473c-ad9d-b61d347e5c82","block_type":"box","text":"classes of the operating company’s debt. Typically a preferred share has a rating that is slightly below","page_number":178,"box":{"x":116,"y":800,"width":756,"height":12}},{"id":"1fc500dc-ef0c-406d-8e18-1237905cc6a2","block_type":"box","text":"that of its corresponding operating company’s senior debt securities.","page_number":178,"box":{"x":116,"y":816,"width":506,"height":12}},{"id":"c704051d-6446-40ed-bbb5-b5766258029c","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":178,"box":{"x":116,"y":847,"width":324,"height":12}},{"id":"35a4dcfd-a62c-44d5-9228-98abd29939d0","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in","page_number":178,"box":{"x":441,"y":847,"width":430,"height":12}},{"id":"f091a9cd-6437-4a04-92b1-71103e74525b","block_type":"box","text":"shares of REITs. REITs possess certain risks which differ from an investment in common stocks.","page_number":178,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"1c78da6a-4a68-4cc1-a32f-3bb892abaedd","block_type":"box","text":"REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may","page_number":178,"box":{"x":117,"y":878,"width":756,"height":12}},{"id":"03b33e80-4469-4458-97b4-276961a2e38f","block_type":"box","text":"II-84","page_number":178,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1404d417-72d3-47a2-baa2-9c2cd12c49bd","block_type":"box","text":"NM1026U-6004408-178/267","page_number":178,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e9875e7c-f83e-4fa0-9b00-4f22e5ac7852","block_type":"box","text":"concentrate their investments in specific geographic areas or in specific property types,","page_number":179,"box":{"x":116,"y":87,"width":652,"height":12}},{"id":"3dfcca4b-d84c-4d74-abf4-4a698f0c896d","block_type":"box","text":"i.e.","page_number":179,"box":{"x":768,"y":87,"width":21,"height":10}},{"id":"f1138d0a-01dd-4e05-964e-902c459e1035","block_type":"box","text":", hotels,","page_number":179,"box":{"x":792,"y":87,"width":62,"height":11}},{"id":"c9c9d7cb-4a2f-4a56-b794-ea845b115027","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":179,"box":{"x":116,"y":102,"width":441,"height":13}},{"id":"8118ac64-42c4-4585-ba82-eaba2cc4df6d","block_type":"box","text":"REITs are subject to management fees and other expenses, and so a Fund that invests in REITs will","page_number":179,"box":{"x":117,"y":134,"width":752,"height":12}},{"id":"b3a80abc-30ee-404d-8860-37078001354d","block_type":"box","text":"bear its proportionate share of the costs of the REITs’ operations. There are three general categories","page_number":179,"box":{"x":117,"y":149,"width":754,"height":12}},{"id":"ca1741de-5a8b-4d41-b56d-19218545809c","block_type":"box","text":"of REITs: Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest primarily in direct fee","page_number":179,"box":{"x":116,"y":165,"width":763,"height":12}},{"id":"e7ed5be3-d25a-479f-bece-e7838a023f16","block_type":"box","text":"ownership or leasehold ownership of real property, which derive most of their income from rents.","page_number":179,"box":{"x":116,"y":180,"width":721,"height":12}},{"id":"51bb9506-8797-449b-95c8-c9e418642f87","block_type":"box","text":"Mortgage REITs invest mostly in mortgages on real estate, which may secure construction,","page_number":179,"box":{"x":117,"y":196,"width":681,"height":12}},{"id":"24a2b626-31da-48ee-9694-f20a82fee838","block_type":"box","text":"development or long-term loans; the main source of their income is mortgage interest payments.","page_number":179,"box":{"x":116,"y":211,"width":720,"height":12}},{"id":"ea00fc64-150c-48a6-85af-838d4966ba9e","block_type":"box","text":"Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":179,"box":{"x":117,"y":227,"width":541,"height":12}},{"id":"d9c96380-b328-4b5e-b841-baaa15e17c5e","block_type":"box","text":"Investing in REITs involves certain unique risks in addition to those risks associated with investing in","page_number":179,"box":{"x":117,"y":258,"width":749,"height":12}},{"id":"36c08db4-e81e-424d-836d-dff2922bfd3e","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":179,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"e1df1e05-1bff-466e-bdbe-ad0a1258e413","block_type":"box","text":"distribute income may be adversely affected by several factors, including rising interest rates, changes","page_number":179,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"0b1dbc16-70af-445a-8c33-17820b218f66","block_type":"box","text":"in the national, state and local economic climate and real estate conditions, occupancy and rental","page_number":179,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"1b1fa3bf-96eb-40b9-858a-519a3c2cf6cc","block_type":"box","text":"rates, perceptions of prospective tenants of the safety, convenience and attractiveness of the","page_number":179,"box":{"x":117,"y":320,"width":695,"height":12}},{"id":"92aafca5-f6a1-474c-94a2-6048de8f46d9","block_type":"box","text":"properties, the ability of the owners to provide adequate management, maintenance and insurance, the","page_number":179,"box":{"x":117,"y":335,"width":770,"height":12}},{"id":"ea1e62c7-e0d7-468c-b523-f93e04c4edaf","block_type":"box","text":"cost of complying with the Americans with Disabilities Act, increased competition from new properties,","page_number":179,"box":{"x":116,"y":351,"width":761,"height":12}},{"id":"f754cad9-e3ee-489d-b024-37c1e9377a59","block_type":"box","text":"the impact of present or future environmental legislation and compliance with environmental laws,","page_number":179,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"e21f1bbf-cafa-4504-ac76-d665daa3e23f","block_type":"box","text":"failing to maintain their exemptions from registration under the Investment Company Act, changes in","page_number":179,"box":{"x":116,"y":382,"width":749,"height":12}},{"id":"1204df27-c9bd-4955-89b1-be9aa8deb6cd","block_type":"box","text":"real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal","page_number":179,"box":{"x":117,"y":397,"width":733,"height":12}},{"id":"ffedfef6-8dd0-4596-a3f2-69ee276b83b2","block_type":"box","text":"policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the","page_number":179,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"8d692efc-2bc4-49b8-a0e3-67ca06b73a2f","block_type":"box","text":"REITs. To the extent that assets underlying a REIT are concentrated geographically, by property type,","page_number":179,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"081be6eb-b0c1-45b3-afff-64bc07b623e5","block_type":"box","text":"or in certain other respects, these risks may be heightened.","page_number":179,"box":{"x":116,"y":444,"width":446,"height":12}},{"id":"eafc681f-7510-4aed-8b4a-1e00e8d20c87","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or","page_number":179,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"d1da4914-e9dd-4d56-8151-eae93580ef65","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":179,"box":{"x":117,"y":490,"width":760,"height":12}},{"id":"b4b197c1-2ded-4dd9-83f9-bf8e2e4e37e2","block_type":"box","text":"companies, to the extent application of the Fund’s investment strategy results in the Fund investing in","page_number":179,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"b9ce4cd1-f63c-4cd2-9e97-18ea43e23ca3","block_type":"box","text":"REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely","page_number":179,"box":{"x":117,"y":521,"width":722,"height":12}},{"id":"972675a8-42f5-4607-b0ce-185c04969cf9","block_type":"box","text":"exceed the percentage of the Fund’s portfolio which is comprised of REIT shares. Ordinary REIT","page_number":179,"box":{"x":116,"y":537,"width":723,"height":12}},{"id":"2191d37f-a6cb-4d9e-96b8-8dade3100c86","block_type":"box","text":"dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as","page_number":179,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"d72f2aab-c934-43aa-bc09-ee77ff232341","block_type":"box","text":"ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer","page_number":179,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"c7972d0c-3367-4a09-ac7f-4fa4073273af","block_type":"box","text":"who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary","page_number":179,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"52df3a3a-0391-4866-b17f-d49c7088a189","block_type":"box","text":"REIT dividends, and a regulated investment company may report dividends as eligible for this","page_number":179,"box":{"x":117,"y":599,"width":698,"height":12}},{"id":"69cd65f5-71a6-4217-ba4d-2b9fb8b505ee","block_type":"box","text":"deduction to the extent the regulated investment company’s income is derived from ordinary REIT","page_number":179,"box":{"x":116,"y":614,"width":731,"height":12}},{"id":"bea4fa8d-3f63-4c2f-89bf-c7a112be88b2","block_type":"box","text":"dividends (reduced by allocable regulated investment company expenses). A shareholder may treat","page_number":179,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"5925907f-0ac5-4c77-843e-a73c0084c621","block_type":"box","text":"the dividends as such provided the regulated investment company and the shareholder satisfy","page_number":179,"box":{"x":116,"y":645,"width":704,"height":12}},{"id":"15e32764-9e16-4566-a017-6da0b7a98ee0","block_type":"box","text":"applicable holding period requirements.","page_number":179,"box":{"x":116,"y":661,"width":292,"height":12}},{"id":"c0471c1e-9388-4eb8-bbdb-8a4ce4185d52","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may","page_number":179,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"bd184a98-e325-49ce-9c6b-1cecd7ddffad","block_type":"box","text":"cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the","page_number":179,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"6ad03301-7e59-4e56-860e-ad38e3434122","block_type":"box","text":"market price of the equity securities issued by a REIT. Rising interest rates also generally increase the","page_number":179,"box":{"x":117,"y":723,"width":759,"height":12}},{"id":"f7a943b5-a788-43a0-9eef-b6ab457446b2","block_type":"box","text":"costs of obtaining financing, which could cause the value of a Fund’s REIT investments to decline.","page_number":179,"box":{"x":116,"y":738,"width":728,"height":12}},{"id":"50d1cce1-b69a-4205-a789-4724bb2fea4d","block_type":"box","text":"During periods when interest rates are declining, mortgages are often refinanced. Refinancing may","page_number":179,"box":{"x":117,"y":754,"width":733,"height":12}},{"id":"b5f314ba-b3c0-4c79-be5c-0626c2f5f6e1","block_type":"box","text":"reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment","page_number":179,"box":{"x":117,"y":769,"width":721,"height":12}},{"id":"6d8b2220-064b-4155-ad5a-be1df6e5c773","block_type":"box","text":"under their mortgage loans and leases to generate cash to make distributions to their shareholders,","page_number":179,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"506fa40d-587d-4195-a9eb-339a5b4c0e03","block_type":"box","text":"investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":179,"box":{"x":117,"y":800,"width":706,"height":12}},{"id":"b127b3c9-997b-4879-83a3-87e08c75f136","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same","page_number":179,"box":{"x":117,"y":831,"width":741,"height":12}},{"id":"68747feb-e6f5-4c9e-abe4-7037e9cf70b9","block_type":"box","text":"risks as investing in other small capitalization companies. REITs may have limited financial resources","page_number":179,"box":{"x":117,"y":847,"width":749,"height":12}},{"id":"2d5d7162-30c0-46e2-a728-e3479cef0e94","block_type":"box","text":"and their securities may trade less frequently and in limited volume and may be subject to more abrupt","page_number":179,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"ddff22ca-647f-4099-9182-aedc42ee7a24","block_type":"box","text":"or erratic price movements than larger company securities. Historically, small capitalization stocks, such","page_number":179,"box":{"x":116,"y":878,"width":768,"height":12}},{"id":"d99d8241-d941-43cd-98a3-c20d4db7e9cf","block_type":"box","text":"II-85","page_number":179,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"92040789-6786-4d8b-aad1-1f011bb394ac","block_type":"box","text":"NM1026U-6004408-179/267","page_number":179,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fdb23f54-33db-4d0c-8adc-d8404432c68c","block_type":"box","text":"as REITs, have been more volatile in price than the larger capitalization stocks such as those included","page_number":180,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"6a328a46-9919-4e2a-a8d5-61ba34498f76","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":180,"box":{"x":117,"y":102,"width":764,"height":13}},{"id":"383114fe-93ac-4bc2-a148-826c15de5752","block_type":"box","text":"the operation of the business of the REIT and may be involved in real estate activities competitive with","page_number":180,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"7e1decd2-3845-4028-8a4c-75dd858b19f3","block_type":"box","text":"the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT","page_number":180,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"8aa74b85-77b9-4c75-96f0-2dfe7106b430","block_type":"box","text":"may not have control over its investments. REITs may incur significant amounts of leverage.","page_number":180,"box":{"x":117,"y":149,"width":681,"height":12}},{"id":"37e306a2-d8e5-4dd5-80f9-d7d1928d1213","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":180,"box":{"x":116,"y":180,"width":293,"height":10}},{"id":"cb120c4a-0fa9-432b-a7c4-0fe980dc0316","block_type":"box","text":"Securities may decline in value due to factors affecting","page_number":180,"box":{"x":409,"y":180,"width":410,"height":12}},{"id":"fb70cf86-ce7a-485b-9a1a-478a5595a361","block_type":"box","text":"securities markets generally or particular industries represented in the markets. The value of a security","page_number":180,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"fa191d47-23f8-4fb9-adeb-c1af36a0f441","block_type":"box","text":"may decline due to general market conditions, economic trends or events that are not specifically","page_number":180,"box":{"x":117,"y":211,"width":725,"height":12}},{"id":"e2340497-1af4-44bb-ba5f-56a4d52b490c","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":180,"box":{"x":117,"y":227,"width":754,"height":12}},{"id":"c34cd43e-5cd9-4610-9617-767ba2ab7e4a","block_type":"box","text":"particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of","page_number":180,"box":{"x":117,"y":242,"width":748,"height":12}},{"id":"998b2a73-3c34-44bf-9f1d-403e1ff757da","block_type":"box","text":"industries, sector or asset class. The success of a Fund’s activities could be affected by interest rates,","page_number":180,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"d13cb007-a70e-49b4-aac1-b8a82918a272","block_type":"box","text":"availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, economic","page_number":180,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"289ce906-eb3a-4f6c-b235-2708832054b5","block_type":"box","text":"sanctions, currency exchange controls, and local, regional or global events such as war, acts of","page_number":180,"box":{"x":116,"y":289,"width":714,"height":12}},{"id":"cf2027ad-2667-44aa-b3c9-f79fbfdd64c8","block_type":"box","text":"terrorism, natural and environmental disasters, the spread of infectious illness or other public health","page_number":180,"box":{"x":116,"y":304,"width":744,"height":12}},{"id":"e8397ea6-135e-4d0e-b91f-7192ad21ac22","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments.","page_number":180,"box":{"x":117,"y":320,"width":730,"height":12}},{"id":"6b54f1ad-07d9-48dd-b292-b62295b1f4ce","block_type":"box","text":"During a general economic downturn in the securities markets, multiple asset classes may be","page_number":180,"box":{"x":117,"y":335,"width":698,"height":12}},{"id":"638c7e96-d31b-4fd5-bb9a-08f031953b11","block_type":"box","text":"negatively affected. These factors may affect the level and volatility of securities prices and the liquidity","page_number":180,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"58145a6e-1ec0-4bc1-b5f9-a72acfadc1dc","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":180,"box":{"x":116,"y":366,"width":734,"height":12}},{"id":"e7d64c6f-c7d7-4e8f-b68f-a6b91b8e94c6","block_type":"box","text":"maintain substantial trading positions that can be adversely affected by the level of volatility in the","page_number":180,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"7ace6fe6-b630-49af-84e1-6e27bc94f671","block_type":"box","text":"financial markets; the larger the positions, the greater the potential for loss. Unpredictable or unstable","page_number":180,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"2a9b16c0-8540-4f45-85ff-018183bd8809","block_type":"box","text":"market conditions may result in reduced opportunities to find suitable investments to deploy capital or","page_number":180,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"1e94f59c-7f23-47e4-929a-26bf99c28807","block_type":"box","text":"make it more difficult to exit and realize value","page_number":180,"box":{"x":117,"y":428,"width":339,"height":10}},{"id":"c27f771b-539a-4312-8b99-5f241f56adfe","block_type":"box","text":"from a Fund’s existing investments. It is important to","page_number":180,"box":{"x":456,"y":428,"width":394,"height":12}},{"id":"a43a9f78-2b12-4ecb-9ea4-78a49db99ceb","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions","page_number":180,"box":{"x":117,"y":444,"width":754,"height":12}},{"id":"7da2514d-e545-4cb3-adff-b4000eed0eea","block_type":"box","text":"and there can be no assurance that a Fund will not suffer material adverse effects from broad and","page_number":180,"box":{"x":116,"y":459,"width":732,"height":10}},{"id":"0ce081a2-f8fd-4fe7-82ef-a7a3b196e298","block_type":"box","text":"rapid changes in market conditions.","page_number":180,"box":{"x":117,"y":475,"width":268,"height":12}},{"id":"f8c8f643-8d62-4bcf-b9c6-a938d878a84b","block_type":"box","text":"Periods of unusually high volatility in the financial","page_number":180,"box":{"x":117,"y":506,"width":359,"height":12}},{"id":"05e68ed0-2759-40d6-b152-015c35742db6","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":180,"box":{"x":477,"y":506,"width":381,"height":11}},{"id":"80f0e998-bf5c-44f5-9396-e0080f64170a","block_type":"box","text":"limited to a particular sector or a geography, can o","page_number":180,"box":{"x":117,"y":521,"width":364,"height":12}},{"id":"eac87abf-8b81-4a3e-be7f-f07e10119cae","block_type":"box","text":"ccur. 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The exact shape of these","page_number":180,"box":{"x":117,"y":568,"width":379,"height":12}},{"id":"1c5a6f50-a894-4e69-9686-1cc53d0fb7d5","block_type":"box","text":"policies is still being considered, but the equity and","page_number":180,"box":{"x":497,"y":568,"width":372,"height":12}},{"id":"ce4838b5-dd56-4324-9637-c801414dd9ae","block_type":"box","text":"debt markets may react strongly to expectations of c","page_number":180,"box":{"x":116,"y":583,"width":381,"height":12}},{"id":"66069327-2615-440f-8a88-84689c1ee5f2","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":180,"box":{"x":498,"y":583,"width":367,"height":12}},{"id":"074c767d-915b-4c3a-9cf4-422f1a04a02c","block_type":"box","text":"the market’s expectations are not borne out. 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A downgrade of the ratings of U.S. Government debt obligations, or concerns about","page_number":181,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"1d596db3-5b03-472a-b034-5eb9f62662ae","block_type":"box","text":"the U.S. Government’s credit quality in general, could have a substantial negative effect on the U.S. and","page_number":181,"box":{"x":116,"y":196,"width":770,"height":12}},{"id":"ebf9ebb6-0bf6-4501-a319-1bb595ff521b","block_type":"box","text":"global economies. 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The impact of this coronavirus, and other","page_number":181,"box":{"x":116,"y":366,"width":727,"height":12}},{"id":"a574876c-baab-445d-9016-897751a3da8d","block_type":"box","text":"epidemics and pandemics that may arise in the future, could affect the economies of many nations,","page_number":181,"box":{"x":116,"y":382,"width":741,"height":12}},{"id":"7f0e7ac3-bea4-40b0-9a87-80d2676d0ba0","block_type":"box","text":"individual companies and the market in general in ways that cannot necessarily be foreseen at the","page_number":181,"box":{"x":117,"y":397,"width":733,"height":12}},{"id":"f474f5fd-8c03-4f4e-8d95-132a8b8be686","block_type":"box","text":"present time. These health crises may be short term or long term, and may exacerbate other pre","page_number":181,"box":{"x":117,"y":413,"width":721,"height":12}},{"id":"c203ae07-fa55-4069-be45-b7120c9b756e","block_type":"box","text":"existing political, social and economic risks, disrupt normal market conditions and operations, and","page_number":181,"box":{"x":116,"y":428,"width":729,"height":12}},{"id":"a1f2693e-6440-4701-a958-14efc586c181","block_type":"box","text":"negatively impact performance. 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The implementation of changes to comply","page_number":181,"box":{"x":116,"y":599,"width":742,"height":12}},{"id":"a55455a2-e037-4802-a30c-5748b0109cad","block_type":"box","text":"with current and/or new regulations applicable to the Funds and/or the Manager could have a material","page_number":181,"box":{"x":116,"y":614,"width":761,"height":12}},{"id":"f48b4602-1806-4433-ae1e-f457c92d0b8a","block_type":"box","text":"adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit","page_number":181,"box":{"x":116,"y":630,"width":712,"height":12}},{"id":"7f413fed-d510-4a1a-9806-6f03caf04af2","block_type":"box","text":"margins, reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":181,"box":{"x":117,"y":645,"width":762,"height":12}},{"id":"5ac6e43b-7d25-424d-85aa-625fdb0d94be","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":181,"box":{"x":118,"y":676,"width":213,"height":12}},{"id":"2b7aafa4-ae3c-4cb0-bd81-47e582e52493","block_type":"box","text":".","page_number":181,"box":{"x":331,"y":684,"width":3,"height":2}},{"id":"b7aded9e-e0c2-4979-9734-519aace6553e","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist","page_number":181,"box":{"x":341,"y":676,"width":507,"height":12}},{"id":"365da642-fe06-444b-b574-11eabf2f4eee","block_type":"box","text":"trade policies. 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Some of the companies in which the Fund invests may be located in, or otherwise","page_number":182,"box":{"x":250,"y":149,"width":621,"height":12}},{"id":"6015219a-5651-4eb8-a169-1dcfb3047ba1","block_type":"box","text":"connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,","page_number":182,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"79b55f47-759d-4004-86b7-0d7e1c617754","block_type":"box","text":"tornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically","page_number":182,"box":{"x":116,"y":180,"width":771,"height":12}},{"id":"6c900b5d-df9e-456d-a8a1-881b30a2ebea","block_type":"box","text":"sensitive to environmental events. In addition, issuers may be impacted by security concerns with","page_number":182,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"2004fa52-b397-42af-8a86-cba2d79f2522","block_type":"box","text":"respect to a country or region, such as war and other types of conflict, terrorism, strained international","page_number":182,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"09f2f70e-3d25-4982-9a55-ce22ff6236c9","block_type":"box","text":"relations and territorial disputes. Any of these events may adversely affect the issuers, markets and","page_number":182,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"ed44a131-a7d2-41ba-8efe-874e57b04af2","block_type":"box","text":"economies to which a Fund is exposed, which may adversely affect the value of the Fund.","page_number":182,"box":{"x":116,"y":242,"width":673,"height":12}},{"id":"8c3020cd-1dbe-4f77-9888-17d88f7dd74b","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":182,"box":{"x":116,"y":273,"width":275,"height":12}},{"id":"d2e79851-382e-4f34-8c83-cb7ae72e41f2","block_type":"box","text":"A Fund’s investments, payment obligations and financing terms","page_number":182,"box":{"x":393,"y":273,"width":480,"height":12}},{"id":"1ff1485d-446b-4f66-abc2-e440320eee1d","block_type":"box","text":"may be based on floating rates, such as the Secured Overnight Financing Rate (“SOFR”), Sterling","page_number":182,"box":{"x":117,"y":289,"width":732,"height":12}},{"id":"186c778f-2986-46c3-8405-77a8439a85d5","block_type":"box","text":"Overnight Interbank Average Rate (“SONIA”), and other similar types of reference rates (“Reference","page_number":182,"box":{"x":116,"y":304,"width":749,"height":12}},{"id":"14383835-fd8c-44b8-b52c-ea15d3967f82","block_type":"box","text":"Rates”). The elimination of a Reference Rate or any other changes or reforms to the determination or","page_number":182,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"86b80a2f-728e-4ad7-8310-8688ddfe561e","block_type":"box","text":"supervision of a Reference Rate could have an adverse impact on the market for, or value of, any","page_number":182,"box":{"x":116,"y":335,"width":730,"height":12}},{"id":"1c5f80fc-f41f-49ff-89eb-2c457ad50d72","block_type":"box","text":"instruments (including debt instruments and certain derivative instruments) or payments linked to those","page_number":182,"box":{"x":117,"y":351,"width":769,"height":12}},{"id":"c85b789c-6084-42e6-a092-2939220188e3","block_type":"box","text":"Reference Rates. In addition, any substitute Reference Rate and any pricing adjustments imposed by","page_number":182,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"8cac1a08-492c-43d2-84ab-3f045a88dc94","block_type":"box","text":"a regulator or by counterparties or otherwise may adversely affect a Fund’s performance and/or net","page_number":182,"box":{"x":116,"y":382,"width":743,"height":12}},{"id":"d831625a-e984-487d-aa49-02d1f5508beb","block_type":"box","text":"asset value.","page_number":182,"box":{"x":116,"y":397,"width":94,"height":10}},{"id":"9d6ef415-9638-4261-9715-b39c3add7ba3","block_type":"box","text":"The London Interbank Offered Rate (“LIBOR”) had historically been used extensively in the U.S. and","page_number":182,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"84daa246-bed4-496a-a4e2-73f81c0364d6","block_type":"box","text":"globally as a “benchmark” or “reference rate” for various commercial and financial contracts, including","page_number":182,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"82605bc6-8bcd-4a16-94a1-89ecd2c582d9","block_type":"box","text":"corporate and municipal bonds, bank loans, asset-backed and mortgage-related securities, interest","page_number":182,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"ce3a62a3-5ed4-4151-9721-1f0ea3c65c78","block_type":"box","text":"rate swaps and other derivatives. Instruments in which a Fund may have historically paid interest at","page_number":182,"box":{"x":117,"y":475,"width":742,"height":12}},{"id":"da42b8a3-375a-4f6e-9490-5b83c0a6e5c1","block_type":"box","text":"floating rates based on LIBOR or may have been subject to interest caps or floors based on LIBOR.","page_number":182,"box":{"x":116,"y":490,"width":746,"height":12}},{"id":"0b59f5ef-9834-401a-9594-feac286a8a62","block_type":"box","text":"The Funds and issuers of instruments in which a Fund invests may have also historically obtained","page_number":182,"box":{"x":116,"y":506,"width":731,"height":12}},{"id":"5451ac81-81bd-48fe-af0c-1668b69a87f7","block_type":"box","text":"financing at floating rates based on LIBOR. In connection with the global transition away from LIBOR","page_number":182,"box":{"x":116,"y":521,"width":753,"height":12}},{"id":"dfb2574e-fff2-4f75-a885-024eea719fdb","block_type":"box","text":"led by regulators and market participants as a result of benchmark reforms, LIBOR was last published","page_number":182,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"8d79ff37-46ba-4a51-9763-f1600ba28280","block_type":"box","text":"on a representative basis at the end of June 2023. Alternative Reference Rates to LIBOR have been","page_number":182,"box":{"x":116,"y":552,"width":751,"height":12}},{"id":"4bf55b36-cc82-44f5-b62a-15bec224ef78","block_type":"box","text":"established in most major currencies and markets in these alternative rates are continuing to develop","page_number":182,"box":{"x":116,"y":568,"width":756,"height":12}},{"id":"c61d33b6-7417-422f-8e9e-3163b3b111b7","block_type":"box","text":"(","page_number":182,"box":{"x":117,"y":583,"width":4,"height":12}},{"id":"15dc6918-c611-4ca6-9a31-ec4a368bc9d1","block_type":"box","text":"e.g.","page_number":182,"box":{"x":122,"y":586,"width":26,"height":9}},{"id":"3b5f50c9-a4de-492c-99ca-1d812c72c6aa","block_type":"box","text":", SOFR for USD-LIBOR and SONIA for GBP-LIBOR). While the transition from LIBOR has gone","page_number":182,"box":{"x":151,"y":583,"width":716,"height":12}},{"id":"75ae2aab-a337-4a80-9429-30ef625492ad","block_type":"box","text":"relatively smoothly, residual risks associated with the transition may remain that may impact markets or","page_number":182,"box":{"x":117,"y":599,"width":771,"height":12}},{"id":"ecdf04bc-be43-4594-8dbc-f8fd1092ef46","block_type":"box","text":"particular investments and, as such, the full impact of the transition on the Funds or the financial","page_number":182,"box":{"x":117,"y":614,"width":718,"height":12}},{"id":"aa78a0cc-3912-449d-9766-d7a5acec3c91","block_type":"box","text":"instruments in which the Funds invest cannot yet be fully determined.","page_number":182,"box":{"x":117,"y":630,"width":518,"height":12}},{"id":"ba54fbb5-dacb-4f5e-b5d3-3c5241332072","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that","page_number":182,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"6a991f72-4f5d-4c3d-96ce-4932aa2d85a7","block_type":"box","text":"are collateralized by U.S. Treasury securities . SOFR is calculated based on transaction-level repo","page_number":182,"box":{"x":116,"y":676,"width":731,"height":12}},{"id":"25f52fa5-c90d-4588-88e8-13615d9f904a","block_type":"box","text":"data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted","page_number":182,"box":{"x":116,"y":692,"width":749,"height":12}},{"id":"61b8c046-6716-4dc8-a158-ba34dda891e7","block_type":"box","text":"median rate derived from such data. Because SOFR is a financing rate based on overnight secured","page_number":182,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"98fcbe31-7ec4-4722-946e-5f4ece9d9632","block_type":"box","text":"funding transactions, it differs fundamentally from LIBOR. LIBOR is intended to be an unsecured rate","page_number":182,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"844d9ab3-6d1b-476e-a5a2-bb03090b58a1","block_type":"box","text":"that represents interbank funding costs for different short-term maturities or tenors. It is a forward","page_number":182,"box":{"x":116,"y":738,"width":726,"height":12}},{"id":"33c4ab79-7a8a-4931-9dfb-c451c79fe3da","block_type":"box","text":"looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is","page_number":182,"box":{"x":117,"y":754,"width":734,"height":12}},{"id":"73b55af7-b157-4340-9d98-2d9fd992d095","block_type":"box","text":"intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk. In","page_number":182,"box":{"x":117,"y":769,"width":700,"height":12}},{"id":"364c8632-e3bd-4916-9e24-125bb9156d7c","block_type":"box","text":"contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as","page_number":182,"box":{"x":116,"y":785,"width":691,"height":12}},{"id":"c26067bc-a9ed-49fb-8dd9-383129d9105b","block_type":"box","text":"collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term interest rate risks.","page_number":182,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"1ce60570-3202-464e-a793-8251ad14ce11","block_type":"box","text":"SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates,","page_number":182,"box":{"x":116,"y":816,"width":764,"height":11}},{"id":"52b57bde-fce7-4e81-b43d-37d43cc9f57d","block_type":"box","text":"such as three-month LIBOR, during certain periods. For these reasons, among others, there is no","page_number":182,"box":{"x":116,"y":831,"width":730,"height":12}},{"id":"71ce3892-359f-4ffa-bb95-7cd2b7170660","block_type":"box","text":"assurance that SOFR, or rates derived from SOFR, will perform in the same or similar way as LIBOR","page_number":182,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"bd33399f-b2c5-4e3c-97bd-65cc5e299cdb","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":182,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"4b95c762-d257-463d-8684-5f3d709ead2c","block_type":"box","text":"substitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018.","page_number":182,"box":{"x":116,"y":878,"width":749,"height":12}},{"id":"d70be182-2cce-47b3-899e-e17a2d93c85f","block_type":"box","text":"II-88","page_number":182,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"18f4f9b2-1656-49c7-b4ba-322595ffc083","block_type":"box","text":"NM1026U-6004408-182/267","page_number":182,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"31a450c0-293c-4559-ae0e-990023c567ad","block_type":"box","text":"The future performance of SOFR, and SOFR-based","page_number":183,"box":{"x":116,"y":87,"width":383,"height":12}},{"id":"f919b719-11f9-41e4-a454-8bacfa5fa7e6","block_type":"box","text":"Reference Rates, cannot be predicted based on","page_number":183,"box":{"x":501,"y":87,"width":353,"height":12}},{"id":"b607885a-f21f-4735-b5c1-2cee79d70807","block_type":"box","text":"SOFR’s history or otherwise. Levels of SOFR in the futu","page_number":183,"box":{"x":116,"y":102,"width":406,"height":13}},{"id":"c528c36d-0b5c-4164-94ed-a4aba699c34a","block_type":"box","text":"re may bear little or no relation to historical levels","page_number":183,"box":{"x":524,"y":103,"width":359,"height":12}},{"id":"4f0ace83-8d26-484d-bf11-c941a673f42d","block_type":"box","text":"of SOFR, LIBOR or other rates. There can also","page_number":183,"box":{"x":116,"y":118,"width":348,"height":11}},{"id":"03fae53b-21ae-418b-867c-9e3e640f961b","block_type":"box","text":"be no assurance that SOFR will not be discontinued or","page_number":183,"box":{"x":465,"y":118,"width":401,"height":10}},{"id":"07b94f8d-a4fc-4a1b-ab10-3ef8faf0d7d8","block_type":"box","text":"fundamentally altered in a manner that is mate","page_number":183,"box":{"x":116,"y":134,"width":338,"height":12}},{"id":"1bedc9fa-424b-465f-a504-6e1d0de7b763","block_type":"box","text":"rially adverse to the interests of the Fund.","page_number":183,"box":{"x":455,"y":134,"width":306,"height":12}},{"id":"9ac65811-3e2c-4923-a44f-6c207b221898","block_type":"box","text":"In addition, interest rates or other types of rates and indices which are classified as “benchmarks” have","page_number":183,"box":{"x":117,"y":161,"width":768,"height":13}},{"id":"30073e2a-758b-4cb3-ac1d-a9ae600987a7","block_type":"box","text":"been the subject of ongoing national and international regulatory reform, including under the European","page_number":183,"box":{"x":117,"y":177,"width":765,"height":12}},{"id":"b9298f2a-5962-41be-9997-d092e04a1c64","block_type":"box","text":"Union (“EU”) regulation on indices used as benchmarks in financial instruments and financial contracts","page_number":183,"box":{"x":117,"y":192,"width":765,"height":13}},{"id":"c50bd8cc-977e-4e5e-ac40-55c65636de98","block_type":"box","text":"(known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United","page_number":183,"box":{"x":117,"y":208,"width":754,"height":12}},{"id":"3112dc2a-bea3-45ea-96b1-b7b03a935b83","block_type":"box","text":"Kingdom (“UK”) law by virtue of the EU (Withdrawal) Act 2018 (as amended), subject to amendments","page_number":183,"box":{"x":117,"y":223,"width":756,"height":13}},{"id":"72f208cf-552c-4bf1-ab7d-2198ec40516c","block_type":"box","text":"made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI","page_number":183,"box":{"x":117,"y":239,"width":733,"height":12}},{"id":"48c9da34-7704-46ce-a2f0-7df2b8b21045","block_type":"box","text":"2019/657) and other statutory instruments. Following the implementation of these reforms, the manner","page_number":183,"box":{"x":116,"y":254,"width":765,"height":13}},{"id":"4e2a9776-43fd-4d58-9b67-b202a712fde1","block_type":"box","text":"of administration of benchmarks has changed and may further change in the future, with the result that","page_number":183,"box":{"x":116,"y":270,"width":766,"height":12}},{"id":"fb2088e8-c443-42c2-b530-ba3d6c035a19","block_type":"box","text":"relevant benchmarks may perform differently than in the past, the use of benchmarks that are not","page_number":183,"box":{"x":117,"y":285,"width":726,"height":13}},{"id":"7dc512da-960e-4a24-ab84-16dc5416f6cf","block_type":"box","text":"compliant with the new standards by certain supervised entities may be restricted, and certain","page_number":183,"box":{"x":116,"y":301,"width":702,"height":12}},{"id":"9fdc4fdf-bc10-4550-9b4c-8c07ac271d93","block_type":"box","text":"benchmarks may be eliminated entirely. Such changes could cause increased market volatility and","page_number":183,"box":{"x":117,"y":316,"width":737,"height":13}},{"id":"115a233d-dd9a-4a8a-a12c-5e5fd26c5674","block_type":"box","text":"disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally,","page_number":183,"box":{"x":116,"y":332,"width":749,"height":12}},{"id":"e3a79962-9c64-48d8-81c3-79f8a6b34a68","block_type":"box","text":"there could be other consequences which cannot be predicted.","page_number":183,"box":{"x":116,"y":348,"width":472,"height":11}},{"id":"612596b9-de3a-43be-8f9c-4ba0eef763be","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":183,"box":{"x":116,"y":375,"width":479,"height":12}},{"id":"80d8f48d-049e-477f-9128-29cdacbf88cc","block_type":"box","text":"Under repurchase agreements and","page_number":183,"box":{"x":597,"y":376,"width":264,"height":11}},{"id":"0d5c8b44-8c34-43f3-ba82-2d0c7a8d3c2f","block_type":"box","text":"purchase and sale contracts, the other party agrees, upon entering into the contract with a Fund, to","page_number":183,"box":{"x":117,"y":391,"width":740,"height":12}},{"id":"e599ffe9-a8f5-4a6d-ada7-8021e4b72457","block_type":"box","text":"repurchase a security sold to the Fund at a mutually agreed-upon time and price in a specified","page_number":183,"box":{"x":117,"y":406,"width":703,"height":12}},{"id":"3f0ae83b-647b-4163-aa5d-a0f236d505f0","block_type":"box","text":"currency, thereby determining the yield during the term of the agreement.","page_number":183,"box":{"x":116,"y":422,"width":549,"height":12}},{"id":"ce241f08-68b1-4502-8c7e-d8e7689df6c2","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements","page_number":183,"box":{"x":116,"y":450,"width":751,"height":12}},{"id":"543703f9-4bdf-4b2c-a8d1-285ec0360d70","block_type":"box","text":"stipulate that securities are owned by the Fund and the purchaser receives any interest on the security","page_number":183,"box":{"x":116,"y":465,"width":766,"height":12}},{"id":"a8d693a4-0605-4218-a0a1-e41867345a27","block_type":"box","text":"paid during the period. In the case of repurchase agreements, the prices at which the trades are","page_number":183,"box":{"x":117,"y":481,"width":717,"height":12}},{"id":"01a60d16-44e9-46da-93f8-a5bf067d52d3","block_type":"box","text":"conducted do not reflect accrued interest on the underlying obligation; whereas, in the case of","page_number":183,"box":{"x":116,"y":496,"width":701,"height":12}},{"id":"a71c9d53-2e74-4ead-9d2b-1b10a47a5a8e","block_type":"box","text":"purchase and sale contracts, the prices take into account accrued interest. A Fund may enter into","page_number":183,"box":{"x":117,"y":512,"width":728,"height":12}},{"id":"98367a33-4147-491b-b9cb-117ead85bdee","block_type":"box","text":"“tri-party” repurchase agreements. In “tri-party” repurchase agreements, an unaffiliated third-party","page_number":183,"box":{"x":116,"y":527,"width":729,"height":12}},{"id":"3f813df4-debd-4812-89b2-69ff5ca5d2de","block_type":"box","text":"custodian maintains accounts to hold collateral for the Fund and its counterparties and, therefore, the","page_number":183,"box":{"x":116,"y":543,"width":756,"height":12}},{"id":"2b9e5e62-4a44-4bc1-a834-1f2b89407a77","block_type":"box","text":"Fund may be subject to the credit risk of those custodians.","page_number":183,"box":{"x":117,"y":558,"width":438,"height":12}},{"id":"aa7de4ef-89f2-4eef-8360-e750b59828aa","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate","page_number":183,"box":{"x":116,"y":586,"width":758,"height":12}},{"id":"6687bd04-3640-418d-837e-b3727435ce51","block_type":"box","text":"of return insulated from market fluctuations during the term of the agreement, although such return","page_number":183,"box":{"x":116,"y":602,"width":737,"height":12}},{"id":"6d9e7e2c-9d20-4659-be67-780f78202b01","block_type":"box","text":"may be affected by currency fluctuations. However, in the event of a default under a repurchase","page_number":183,"box":{"x":117,"y":617,"width":716,"height":12}},{"id":"449f889c-1c10-40de-aab7-9ded6a478c7d","block_type":"box","text":"agreement or under a purchase and sale contract, instead of the contractual fixed rate, the rate of","page_number":183,"box":{"x":116,"y":633,"width":730,"height":12}},{"id":"97971435-3052-48e5-ae55-187d87bffe00","block_type":"box","text":"return to the Fund would be dependent upon intervening fluctuations of the market values of the","page_number":183,"box":{"x":117,"y":648,"width":716,"height":12}},{"id":"cc254d32-8a22-47c6-bd55-ce1ae62268eb","block_type":"box","text":"securities underlying the contract and the accrued interest on those securities. In such event, the Fund","page_number":183,"box":{"x":116,"y":664,"width":760,"height":12}},{"id":"5261b070-d903-4c6e-aafa-c35d14949484","block_type":"box","text":"would have rights against the seller for breach of contract with respect to any losses arising from","page_number":183,"box":{"x":116,"y":679,"width":715,"height":12}},{"id":"17a3a442-e15e-4fe5-b8c0-21758ea55759","block_type":"box","text":"market fluctuations following the default.","page_number":183,"box":{"x":117,"y":695,"width":297,"height":12}},{"id":"356b01d1-49fd-4c1e-9484-353a6edf262c","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may","page_number":183,"box":{"x":117,"y":723,"width":742,"height":12}},{"id":"9e3f1536-d46b-4ffb-af6c-0d84fa5486ab","block_type":"box","text":"have longer terms, and may be construed to be collateralized loans by the purchaser to the seller","page_number":183,"box":{"x":117,"y":738,"width":714,"height":12}},{"id":"aee1af74-9a8b-408b-9e08-bf942d406176","block_type":"box","text":"secured by the securities transferred to the purchaser. In the case of a repurchase agreement, as a","page_number":183,"box":{"x":116,"y":754,"width":730,"height":12}},{"id":"d28144db-4dd6-4f12-af17-4b092d5ef5e0","block_type":"box","text":"purchaser, a Fund’s Manager or sub-adviser will monitor the creditworthiness of the seller, and a Fund","page_number":183,"box":{"x":117,"y":769,"width":750,"height":12}},{"id":"489a00ca-856e-4ee5-9c10-89eaec95c71c","block_type":"box","text":"will require the seller to provide additional collateral if the market value of the securities falls below the","page_number":183,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"b9c69b35-7a35-4ed5-a6bf-a98d5452e8dc","block_type":"box","text":"repurchase price at any time during the term of the repurchase agreement. The Fund does not have this","page_number":183,"box":{"x":117,"y":800,"width":764,"height":12}},{"id":"37637388-5239-4d60-8709-51827321cf78","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":183,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"7e1856a8-2fc0-49ad-b71f-492b2bde2d7b","block_type":"box","text":"Manager or sub-adviser will mark-to-market daily the value of the securities. Securities subject to","page_number":183,"box":{"x":117,"y":831,"width":715,"height":12}},{"id":"37073d0d-fda2-4122-9cc5-e2ff590f8f4b","block_type":"box","text":"repurchase agreements (other than tri-party repurchase agreements) and purchase and sale contracts","page_number":183,"box":{"x":117,"y":847,"width":757,"height":12}},{"id":"c7a49faa-4d6d-4e7b-88bb-03fd0d39ae76","block_type":"box","text":"will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry","page_number":183,"box":{"x":116,"y":862,"width":733,"height":12}},{"id":"af899589-b765-473b-928f-e6e06b00783d","block_type":"box","text":"system or by another authorized securities depository.","page_number":183,"box":{"x":116,"y":878,"width":403,"height":12}},{"id":"9caf4cb3-b2ab-4520-8b3f-8b15cb612e2c","block_type":"box","text":"II-89","page_number":183,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3a2a4824-0911-4679-981f-ad68c6c83d7d","block_type":"box","text":"NM1026U-6004408-183/267","page_number":183,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"85890e3c-d4be-4de2-ab92-07205b6cf092","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan,","page_number":184,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"79565db3-0e02-4a6d-b4e6-e88627e99eaa","block_type":"box","text":"the underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation","page_number":184,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"86b38b9c-9394-44c3-b074-60450baf07a5","block_type":"box","text":"to pay the repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses","page_number":184,"box":{"x":116,"y":118,"width":770,"height":12}},{"id":"6f97cd50-0b61-4520-b282-dca8a1d47ebe","block_type":"box","text":"in connection with disposition of the collateral. If the seller becomes insolvent and subject to liquidation or","page_number":184,"box":{"x":117,"y":134,"width":759,"height":12}},{"id":"e27efb0c-d00c-4407-b0f9-9888a70664e9","block_type":"box","text":"reorganization under applicable bankruptcy or other laws, a Fund’s ability to dispose of the underlying","page_number":184,"box":{"x":117,"y":149,"width":733,"height":12}},{"id":"5067478e-3ab7-457b-82e7-66efd2b96428","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":184,"box":{"x":116,"y":165,"width":769,"height":12}},{"id":"5c6853e7-6b97-4e14-b921-cc11be1dee43","block_type":"box","text":"the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be","page_number":184,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"6c1228f7-f5bf-480f-9928-26a68033944b","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":184,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"a23ba0e8-5f06-456c-81ac-9beeda1746e5","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":184,"box":{"x":116,"y":211,"width":727,"height":12}},{"id":"ba9e2ef4-8ea0-485b-ad8f-4428196841a9","block_type":"box","text":"proceeds from the sale of the underlying securities are less than the repurchase price.","page_number":184,"box":{"x":117,"y":227,"width":622,"height":12}},{"id":"14671007-97c9-447d-a83b-6ec1aedb534c","block_type":"box","text":"In any repurchase transaction to which a Fund is a party, collateral for a repurchase agreement may","page_number":184,"box":{"x":117,"y":258,"width":747,"height":12}},{"id":"01fb992d-07f0-45e9-b033-be0c53110d34","block_type":"box","text":"include cash items and obligations issued by the U.S. Government or its agencies or instrumentalities.","page_number":184,"box":{"x":117,"y":273,"width":762,"height":12}},{"id":"996f51ca-07da-4b5b-a98d-0c8465f6ee69","block_type":"box","text":"For certain Funds, however, collateral may include instruments other than cash items and obligations","page_number":184,"box":{"x":117,"y":289,"width":755,"height":12}},{"id":"0b714521-2269-40ea-8c74-85191986c13d","block_type":"box","text":"issued by the U.S. Government or its agencies or instrumentalities, including securities that the Fund","page_number":184,"box":{"x":117,"y":304,"width":752,"height":12}},{"id":"f35d4a7e-23ef-43e8-9ebf-2a04375636e5","block_type":"box","text":"could not hold directly under its investment strategies without the repurchase obligation.","page_number":184,"box":{"x":116,"y":320,"width":657,"height":12}},{"id":"c1ef385f-86ce-41e8-a428-3f0c7fa7b16a","block_type":"box","text":"The type of collateral underlying repurchase agreements may also pose certain risks for a Fund. Lower","page_number":184,"box":{"x":116,"y":351,"width":770,"height":12}},{"id":"0483217a-dbd3-48e2-a923-e9aaba6713ac","block_type":"box","text":"quality collateral and collateral with longer maturities may be subject to greater price fluctuations than","page_number":184,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"368dc6bf-e7dd-4ce0-a980-124a6cf002c9","block_type":"box","text":"higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty","page_number":184,"box":{"x":117,"y":382,"width":769,"height":12}},{"id":"f45c5609-cca0-414b-b74e-5c7d96870a95","block_type":"box","text":"were to default, lower quality collateral may be more difficult to liquidate than higher quality collateral.","page_number":184,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"c3548bba-6045-45e1-b04a-0d6b005fd385","block_type":"box","text":"Should the counterparty default and the amount of collateral not be sufficient to cover the","page_number":184,"box":{"x":116,"y":413,"width":666,"height":12}},{"id":"0c254db2-a25d-4daa-8d19-ff006858845a","block_type":"box","text":"counterparty’s repurchase obligation, a Fund would retain the status of an unsecured creditor of the","page_number":184,"box":{"x":116,"y":428,"width":744,"height":12}},{"id":"580f60ac-226a-4bc2-beeb-25bc893af18b","block_type":"box","text":"counterparty (","page_number":184,"box":{"x":116,"y":444,"width":103,"height":12}},{"id":"39b96101-5d93-446c-b766-a020ce37973a","block_type":"box","text":"i.e.","page_number":184,"box":{"x":220,"y":444,"width":20,"height":9}},{"id":"8de2fa64-a0c9-4cb5-84a2-b62ccc72e9ac","block_type":"box","text":", the position the Fund would normally be in if it were to hold, pursuant to its","page_number":184,"box":{"x":244,"y":444,"width":565,"height":12}},{"id":"f9806b1d-c474-4d65-8613-6476939c46a9","block_type":"box","text":"investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the","page_number":184,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"7836719e-84e1-4dc5-9a9a-381db33a17ec","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":184,"box":{"x":116,"y":475,"width":752,"height":12}},{"id":"3c881f79-42c5-4df9-911d-a73b08c1d4d1","block_type":"box","text":"principal and income involved in the transaction.","page_number":184,"box":{"x":117,"y":490,"width":361,"height":12}},{"id":"28a29c8c-fdd0-458e-8110-b16e72f5a680","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":184,"box":{"x":117,"y":521,"width":761,"height":12}},{"id":"04658f2b-7194-4732-b9e8-cb58b70ab181","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many repurchase agreements","page_number":184,"box":{"x":116,"y":537,"width":771,"height":12}},{"id":"352748be-26c7-4ec1-ba38-c5967186e309","block_type":"box","text":"and purchase and sale contracts, terms that delay or restrict the rights of counterparties, such as a","page_number":184,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"74f5bb2f-2f7e-4001-9007-fad8c2c58ddb","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":184,"box":{"x":117,"y":568,"width":744,"height":12}},{"id":"cad7bd50-1e38-452f-abfb-8fad8e12e69f","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":184,"box":{"x":116,"y":583,"width":748,"height":12}},{"id":"067c0dc4-3af1-4b5f-80f8-1cdb7dc296b6","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":184,"box":{"x":116,"y":599,"width":707,"height":12}},{"id":"f5112d55-bb87-4aea-8511-af289463468f","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":184,"box":{"x":117,"y":614,"width":729,"height":12}},{"id":"6c1367c6-67e9-423d-b1c1-25545883db1c","block_type":"box","text":"affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale contracts or","page_number":184,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"90f8775f-6fee-46ef-a5cb-5431e2b4b93b","block_type":"box","text":"to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":184,"box":{"x":116,"y":645,"width":747,"height":12}},{"id":"13a474ae-4481-4e9a-8af7-561c3d0ed162","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally","page_number":184,"box":{"x":117,"y":661,"width":766,"height":12}},{"id":"51259b02-3e66-4493-8c3f-b647e0c88b26","block_type":"box","text":"cleared. Compliance with these rules is expected to be required by the middle of 2027. Although the","page_number":184,"box":{"x":116,"y":676,"width":742,"height":12}},{"id":"bcaed644-1cfa-44a1-bc90-f5febcca2e9e","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":184,"box":{"x":117,"y":692,"width":765,"height":12}},{"id":"070b800e-2762-4f1a-b66d-4d90a6b5fa60","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":184,"box":{"x":116,"y":707,"width":557,"height":12}},{"id":"3fe1f3ae-3d85-48a6-b0fa-4cea763d6b38","block_type":"box","text":"Restricted Securities.","page_number":184,"box":{"x":116,"y":738,"width":171,"height":10}},{"id":"940504c1-d1a9-40a7-a0ed-7fa0ec0158b7","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the","page_number":184,"box":{"x":293,"y":738,"width":533,"height":12}},{"id":"82d49a9b-4ae5-4fe9-9313-3a3e52844211","block_type":"box","text":"Securities Act (“restricted securities”), which may include securities in private companies and Rule","page_number":184,"box":{"x":116,"y":754,"width":728,"height":12}},{"id":"ee0dac44-4aa9-4c34-ab53-6117c75b9e37","block_type":"box","text":"144A Securities. Restricted securities may be sold in private placement transactions between issuers","page_number":184,"box":{"x":118,"y":769,"width":748,"height":12}},{"id":"f5748d05-b387-446d-9748-cf1763bcf9e4","block_type":"box","text":"and their purchasers, including through private negotiated transactions between the issuer and their","page_number":184,"box":{"x":116,"y":785,"width":741,"height":12}},{"id":"85ed9923-73c9-420f-b17d-1f71c710b72c","block_type":"box","text":"purchasers, such as the Funds, and may be neither listed on an exchange nor traded in other","page_number":184,"box":{"x":117,"y":800,"width":693,"height":12}},{"id":"0c7359cf-570a-4c3a-b513-0386ee2aa1ea","block_type":"box","text":"established markets. In many cases, privately placed securities may not be freely transferable under","page_number":184,"box":{"x":116,"y":816,"width":745,"height":12}},{"id":"a7be5c5b-569e-4091-866a-48f23dcae60d","block_type":"box","text":"the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of these","page_number":184,"box":{"x":116,"y":831,"width":714,"height":12}},{"id":"20ee3f8c-7494-48f7-90a1-2c7f5527234e","block_type":"box","text":"securities are new and complex, and trade only among institutions; the markets for these securities are","page_number":184,"box":{"x":116,"y":847,"width":769,"height":12}},{"id":"f646827b-c01a-495c-8ad1-1a5c165008fc","block_type":"box","text":"still developing and may not function as efficiently as established markets. Typically, investments in","page_number":184,"box":{"x":116,"y":862,"width":742,"height":12}},{"id":"601cc326-24c4-475b-a27b-b7d9a82f0cc4","block_type":"box","text":"private companies are in restricted securities that are not traded in public markets and subject to","page_number":184,"box":{"x":117,"y":878,"width":719,"height":12}},{"id":"ebb35cc8-e52d-492a-994c-d7775dc0f60d","block_type":"box","text":"II-90","page_number":184,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"03471f89-9a03-4cb9-b051-5447339b551d","block_type":"box","text":"NM1026U-6004408-184/267","page_number":184,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"44e11d22-4819-4477-92fc-e4d816957347","block_type":"box","text":"substantial holding periods, so that a Fund may not","page_number":185,"box":{"x":116,"y":87,"width":377,"height":12}},{"id":"ee5b1806-c590-4375-a732-3bf63d508d3d","block_type":"box","text":"be able to resell some of its holdings for extended","page_number":185,"box":{"x":494,"y":87,"width":365,"height":12}},{"id":"053248ea-1d08-4d28-8ae0-3b3ac076f51c","block_type":"box","text":"periods, which may be several years. There can be","page_number":185,"box":{"x":117,"y":103,"width":376,"height":12}},{"id":"c5bec6f2-ba4b-4b4f-8c3b-1cb08d6851d3","block_type":"box","text":"no assurance that a Fund will be able to realize the","page_number":185,"box":{"x":494,"y":103,"width":375,"height":9}},{"id":"3cde9567-197c-445c-a037-8b33aed6c111","block_type":"box","text":"value of such restricted securities in a timely manner","page_number":185,"box":{"x":116,"y":118,"width":382,"height":12}},{"id":"aef74a8b-6c80-48d4-a482-b04a097d49ff","block_type":"box","text":"r or at all. As a result of the absence of a public","page_number":185,"box":{"x":498,"y":118,"width":342,"height":12}},{"id":"089cafad-21a5-420a-9b9f-4b2561c6c619","block_type":"box","text":"trading market and the potential bespoke nature on certa","page_number":185,"box":{"x":116,"y":134,"width":413,"height":12}},{"id":"7d8da8dd-7071-4355-830f-796c6bf5f97b","block_type":"box","text":"in transactions, restricted securities may be","page_number":185,"box":{"x":530,"y":134,"width":319,"height":12}},{"id":"5e048ab4-5ae3-4e6c-b6df-be4e2c3fac98","block_type":"box","text":"deemed to be illiquid investments or less liquid inve","page_number":185,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"bfc9e2cf-9bc2-4dc1-8149-c59726e9c2a8","block_type":"box","text":"stments and may be more difficult to value than","page_number":185,"box":{"x":490,"y":149,"width":349,"height":12}},{"id":"a8e020c8-e2b4-44a8-a678-ac6e7054a722","block_type":"box","text":"publicly traded securities. To the extent that restrict","page_number":185,"box":{"x":117,"y":165,"width":369,"height":12}},{"id":"0331b0be-c2a3-4156-9926-cfc823426aa2","block_type":"box","text":"ed securities may be resold in privately negotiated","page_number":185,"box":{"x":487,"y":165,"width":369,"height":12}},{"id":"9a331ee2-846a-4104-9475-e301b39c9838","block_type":"box","text":"transactions, the prices realized from the sales, due to","page_number":185,"box":{"x":116,"y":180,"width":398,"height":12}},{"id":"9009968a-410e-4315-81b4-1eb798d8b061","block_type":"box","text":"lack of liquidity, could be less than those originally","page_number":185,"box":{"x":515,"y":180,"width":366,"height":12}},{"id":"c8c080ad-3e14-418e-84c5-1cae1755877f","block_type":"box","text":"paid by the Fund or less than their fair market va","page_number":185,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"3604e3ec-171e-47cf-b46e-269294f940d6","block_type":"box","text":"lue. The amount of any discount may vary depending on","page_number":185,"box":{"x":470,"y":196,"width":414,"height":12}},{"id":"b2f99157-aba1-4aef-bd60-fd52425a4bad","block_type":"box","text":"the security type, the character of the issuer, whic","page_number":185,"box":{"x":116,"y":211,"width":361,"height":12}},{"id":"a24e5762-25a5-4880-8d1c-57e6612a4193","block_type":"box","text":"h party (if any) will bear the expenses of registering the","page_number":185,"box":{"x":478,"y":211,"width":403,"height":12}},{"id":"947a9561-7de4-4686-8530-6f967a871f75","block_type":"box","text":"restricted security, and prevailing market conditions. In","page_number":185,"box":{"x":117,"y":227,"width":394,"height":12}},{"id":"925a05da-2ee1-4ced-bf5a-d5242bd1c7da","block_type":"box","text":"addition, issuers whose securities are not publicly","page_number":185,"box":{"x":512,"y":227,"width":369,"height":12}},{"id":"17464977-818f-4700-907a-fd2ad5faeb41","block_type":"box","text":"traded or who are not otherwise publicly listed may not","page_number":185,"box":{"x":116,"y":242,"width":397,"height":12}},{"id":"96ab3538-2bc0-4885-91d9-e6926d2c7a14","block_type":"box","text":"t be subject to the disclosure and other investor","page_number":185,"box":{"x":512,"y":242,"width":345,"height":12}},{"id":"b0b3d5b2-3292-4603-b72d-b274673dfd97","block_type":"box","text":"protection requirements that may be","page_number":185,"box":{"x":117,"y":258,"width":267,"height":12}},{"id":"2a78fa4a-8a77-4390-b372-7a38ceaa86ee","block_type":"box","text":"applicable if their securities were publicly traded. If any privately","page_number":185,"box":{"x":385,"y":258,"width":467,"height":12}},{"id":"c31e5979-bbdd-4034-abbf-26b96ef91f79","block_type":"box","text":"placed securities held by a Fund are required to be r","page_number":185,"box":{"x":117,"y":273,"width":379,"height":12}},{"id":"ef6c8345-a51f-4c70-95c2-a93b0f7a1199","block_type":"box","text":"egistered under the securities laws of one or more","page_number":185,"box":{"x":497,"y":273,"width":369,"height":12}},{"id":"5f7988d9-0828-4a04-b7c6-6d67db979940","block_type":"box","text":"jurisdictions before being resold, the Fund may be requi","page_number":185,"box":{"x":115,"y":289,"width":405,"height":12}},{"id":"889a17a3-eaca-4963-ada4-e2cfc0509126","block_type":"box","text":"red to bear the expenses of registration. Where","page_number":185,"box":{"x":522,"y":289,"width":348,"height":12}},{"id":"4712e706-779c-4df6-9e27-7c7d52eb8b92","block_type":"box","text":"registration is required for restricted securities, a","page_number":185,"box":{"x":117,"y":304,"width":354,"height":12}},{"id":"704b512a-bef2-4b86-b72f-b1b685fbfd46","block_type":"box","text":"considerable time period may elapse between the time","page_number":185,"box":{"x":471,"y":304,"width":403,"height":12}},{"id":"16144d28-8dc9-476a-8424-58af7ca83a19","block_type":"box","text":"the Fund decides to sell the security and the time it is actually permitted to sell the security under an","page_number":185,"box":{"x":116,"y":320,"width":730,"height":12}},{"id":"51e8f301-0d25-4523-b2b2-37d4a8b57a49","block_type":"box","text":"effective registration statement. If during such period,","page_number":185,"box":{"x":116,"y":335,"width":385,"height":12}},{"id":"961b7cc6-c856-4528-a464-b6eae3d5bf0a","block_type":"box","text":"adverse market conditions were to develop, the","page_number":185,"box":{"x":502,"y":335,"width":355,"height":12}},{"id":"0e60cd8f-6cab-4683-b03d-993a15114d4a","block_type":"box","text":"Fund might obtain less favorable pricing terms than when","page_number":185,"box":{"x":117,"y":351,"width":421,"height":12}},{"id":"0a91c365-b681-42d9-a1e0-a714eb055c6c","block_type":"box","text":"it decided to sell the security. In addition, the","page_number":185,"box":{"x":539,"y":351,"width":326,"height":12}},{"id":"4a5c03f0-88c4-4a81-9ecc-4c2d295410a7","block_type":"box","text":"Fund may be deemed to be an “underwriter” for purposes","page_number":185,"box":{"x":117,"y":366,"width":422,"height":12}},{"id":"f231130b-641e-4950-bec0-b4e19bf98b69","block_type":"box","text":"of the Securities Act when selling restricted","page_number":185,"box":{"x":539,"y":366,"width":318,"height":12}},{"id":"16fed675-4c79-4d0f-bb12-2667519753fe","block_type":"box","text":"securities. If so, the Fund may be liable to purchasers","page_number":185,"box":{"x":116,"y":382,"width":394,"height":12}},{"id":"31ab1c19-2f32-4fff-bd54-a1112c80be49","block_type":"box","text":"of the restricted securities if the registration","page_number":185,"box":{"x":510,"y":382,"width":317,"height":12}},{"id":"07be99de-8a50-47a6-9931-bca442462c93","block_type":"box","text":"statement prepared by the issuer, or the correspondi","page_number":185,"box":{"x":116,"y":397,"width":381,"height":12}},{"id":"0f4386ed-9d91-41b5-be7e-ac4de160a815","block_type":"box","text":"ng prospectus, is materially inaccurate or","page_number":185,"box":{"x":499,"y":397,"width":303,"height":12}},{"id":"1030e604-7b78-4b36-9601-075ef38b5853","block_type":"box","text":"misleading. Transactions in restricted securities ma","page_number":185,"box":{"x":117,"y":413,"width":371,"height":12}},{"id":"706026b4-75db-4e25-b8ee-a804a5ce4159","block_type":"box","text":"y entail other transaction co","page_number":185,"box":{"x":489,"y":413,"width":200,"height":12}},{"id":"a5adce24-2a0a-4464-8570-73f81ab1b92f","block_type":"box","text":"sts that are higher than","page_number":185,"box":{"x":690,"y":413,"width":173,"height":12}},{"id":"74376b11-17f7-40e9-ab0f-346f4b522c45","block_type":"box","text":"those for transactions in unrestricted securities. Certa","page_number":185,"box":{"x":116,"y":428,"width":388,"height":10}},{"id":"6323a5ff-cf31-40c1-a4af-b90357d4ff83","block_type":"box","text":"in of the Fund’s investments in private placements","page_number":185,"box":{"x":505,"y":428,"width":369,"height":12}},{"id":"23382628-846f-4697-a96c-a916b588c251","block_type":"box","text":"may consist of direct investments and may include in","page_number":185,"box":{"x":117,"y":444,"width":382,"height":12}},{"id":"d9b61c5e-1223-4f2a-a822-7367cd82e249","block_type":"box","text":"vestments in smaller, less seasoned issuers, which","page_number":185,"box":{"x":500,"y":444,"width":377,"height":11}},{"id":"b7fcfada-ecf5-4295-bd30-032831273bfe","block_type":"box","text":"may involve greater risks. Issuers of restrict","page_number":185,"box":{"x":117,"y":459,"width":315,"height":12}},{"id":"6f05d17f-3610-49c6-a00c-4ca29b7726b8","block_type":"box","text":"ed securities may not be subject to SEC reporting","page_number":185,"box":{"x":433,"y":459,"width":365,"height":12}},{"id":"1f3efc29-18da-4910-815c-9e22c71fdf36","block_type":"box","text":"requirements, may not be required to maintain t","page_number":185,"box":{"x":117,"y":475,"width":345,"height":12}},{"id":"5de85be2-d5bf-4a99-9259-282bba8b7592","block_type":"box","text":"heir accounting records in accordance with generally","page_number":185,"box":{"x":463,"y":475,"width":386,"height":12}},{"id":"ad532800-3b90-453f-a112-d274bcd82281","block_type":"box","text":"accepted accounting principles, and may not be required","page_number":185,"box":{"x":116,"y":490,"width":417,"height":12}},{"id":"ae09a1ec-cc99-4a3d-b06e-f7707a602e38","block_type":"box","text":"to maintain effective internal controls over","page_number":185,"box":{"x":533,"y":490,"width":308,"height":10}},{"id":"a91956b3-7b38-4920-b74f-18498bf7826b","block_type":"box","text":"financial reporting. As a result, BlackRock may not","page_number":185,"box":{"x":116,"y":506,"width":366,"height":12}},{"id":"b8cfc57c-639e-4af8-b6d4-978de6a852ea","block_type":"box","text":"t have timely or accurate information about the","page_number":185,"box":{"x":482,"y":506,"width":339,"height":12}},{"id":"50bafc22-be2c-41d4-92e1-2f197be9de56","block_type":"box","text":"business, financial condition and results of operations of","page_number":185,"box":{"x":117,"y":521,"width":407,"height":12}},{"id":"3c9710f2-8949-45f1-8205-cc5a96385571","block_type":"box","text":"f such issuers, and investments in securities of","page_number":185,"box":{"x":523,"y":521,"width":340,"height":11}},{"id":"3ab391e5-7c04-489c-b3f2-5417841cc869","block_type":"box","text":"such issuers may involve a high degree of business and financial risk and may result in substantial losses","page_number":185,"box":{"x":116,"y":537,"width":771,"height":12}},{"id":"95e0e128-07bb-4c93-b815-01471564c784","block_type":"box","text":"to the Fund. Such issuers may also have limited produc","page_number":185,"box":{"x":116,"y":552,"width":404,"height":12}},{"id":"c4b5eb8e-3940-4a2d-a28e-1b3136782f41","block_type":"box","text":"t lines, markets or financial resources, or they","page_number":185,"box":{"x":520,"y":552,"width":336,"height":12}},{"id":"d4927580-c189-4233-8f2d-a96043849cc6","block_type":"box","text":"may be dependent on a limited management group.","page_number":185,"box":{"x":117,"y":568,"width":381,"height":12}},{"id":"ffad1de8-1367-4c30-991b-0ac72c67a06c","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":185,"box":{"x":117,"y":599,"width":740,"height":12}},{"id":"58708e0c-68c3-47ed-a8e6-645e8ec15f9a","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced","page_number":185,"box":{"x":117,"y":614,"width":687,"height":12}},{"id":"b74f9fb0-d42a-4a2c-bcfe-b19d7f1d0677","block_type":"box","text":"proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by","page_number":185,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"1926f420-c64c-470e-9373-a3ec7a75d778","block_type":"box","text":"other shareholders. The issuer of a private placement may later register those shares for public sale in","page_number":185,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"5ae67bde-d3c7-4d96-98b4-ee5db45dc5d6","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":185,"box":{"x":116,"y":661,"width":760,"height":12}},{"id":"66f71b3f-326e-4345-b1c0-8468fc33ba0d","block_type":"box","text":"a limited trading market for securities of that issuer, including any direct investment by a Fund, or the","page_number":185,"box":{"x":116,"y":676,"width":747,"height":12}},{"id":"18be24a6-1165-4e7e-97a8-53461fdacb3a","block_type":"box","text":"Fund may be subject to contractual limitations on its ability to resell its existing securities following an","page_number":185,"box":{"x":117,"y":692,"width":748,"height":12}},{"id":"4e8094ff-9a08-41d0-8e29-fe8b03c3929f","block_type":"box","text":"IPO. The inability of an applicable issuer of a restricted security to complete an IPO or offer other","page_number":185,"box":{"x":117,"y":707,"width":719,"height":12}},{"id":"0202fdb3-5913-4d36-8f09-389fe7eee74b","block_type":"box","text":"liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":185,"box":{"x":117,"y":723,"width":702,"height":12}},{"id":"0ece0206-09d0-486c-8c61-48e6c30d0680","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making","page_number":185,"box":{"x":117,"y":738,"width":750,"height":12}},{"id":"6fef7411-210e-4b32-9efa-5c1b96ed7870","block_type":"box","text":"investments in such securities, a Fund may obtain access to material nonpublic information, which may","page_number":185,"box":{"x":117,"y":754,"width":765,"height":12}},{"id":"bd6fc734-1319-4fa7-9b67-8552b68758c1","block_type":"box","text":"restrict the Fund’s ability to conduct portfolio transactions in such securities. The activity of identifying,","page_number":185,"box":{"x":117,"y":769,"width":753,"height":12}},{"id":"9d72ea71-9ea9-40cb-92e3-1c04cebaab1e","block_type":"box","text":"completing, and realizing upon attractive investments in restricted securities is highly competitive and","page_number":185,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"db46b121-42fa-46f2-90a2-c4c22f709872","block_type":"box","text":"involves a high degree of uncertainty. A Fund will be competing for investments against other similarly","page_number":185,"box":{"x":117,"y":800,"width":756,"height":12}},{"id":"b165d1e0-d829-4d7b-8f7e-ebd96481a48c","block_type":"box","text":"situated investors. It is possible that competition for appropriate investment opportunities may increase,","page_number":185,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"dfc13259-b011-4ea3-9574-212dc468bde8","block_type":"box","text":"thus potentially reducing the number of investment opportunities available to a Fund and adversely","page_number":185,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"cc2d755b-341e-416f-a7a6-0d8c27e574c3","block_type":"box","text":"affecting the terms upon which investments can be made. There is no assurance that investment","page_number":185,"box":{"x":116,"y":847,"width":724,"height":12}},{"id":"4286e0b9-13c4-4ca8-aa74-769fa74e5340","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":185,"box":{"x":116,"y":862,"width":765,"height":12}},{"id":"76978bb2-81eb-4dd8-b54c-25bd52e5eaaf","block_type":"box","text":"especially as that Fund grows in size.","page_number":185,"box":{"x":116,"y":878,"width":283,"height":12}},{"id":"d96072d7-5669-48ef-ba60-3542cacd2c16","block_type":"box","text":"II-91","page_number":185,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"0fb4c867-1f60-4ff8-9282-47294fdf878c","block_type":"box","text":"NM1026U-6004408-185/267","page_number":185,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e9e61dbe-7d25-4a26-9679-61eeb00dca8d","block_type":"box","text":"There may not be a readily available market value for a Fund’s restricted securities (in particular,","page_number":186,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"911b8db6-a0af-460b-98e3-54cce8b8bf2a","block_type":"box","text":"restricted securities issued by private companies), and thus may be considered “illiquid.” Each Fund","page_number":186,"box":{"x":117,"y":102,"width":745,"height":13}},{"id":"9e7c2398-f2c4-4a3f-9a81-188e3cd5d681","block_type":"box","text":"values restricted securities in accordance with BlackRock’s valuation policies and procedures, which","page_number":186,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"6c3362bd-8656-4812-80e5-89e4be55e72c","block_type":"box","text":"are designed to value investments such that they accurately reflect fair value. Due to the inherent","page_number":186,"box":{"x":116,"y":134,"width":727,"height":12}},{"id":"a8ac233a-bf3d-4f7f-baee-80c8b1ebe63d","block_type":"box","text":"uncertainty and subjectivity of determining the fair value of investments that do not have a readily","page_number":186,"box":{"x":117,"y":149,"width":725,"height":12}},{"id":"0662f571-7d66-42fe-a421-0225a3832028","block_type":"box","text":"available market value, the fair value of a Fund’s private investments may differ significantly from the","page_number":186,"box":{"x":116,"y":165,"width":752,"height":12}},{"id":"f0d489cc-c684-4452-a5a0-77cda2b8d4b5","block_type":"box","text":"values that would have been used had a readily available market value existed for such investments","page_number":186,"box":{"x":116,"y":180,"width":749,"height":12}},{"id":"7deef173-7fda-402c-9b3e-d47cb3bc000b","block_type":"box","text":"and may differ materially from the amounts the Fund may realize on any dispositions of such","page_number":186,"box":{"x":116,"y":196,"width":692,"height":12}},{"id":"d1e5cad8-ac0f-4632-a62f-138ca84d67ac","block_type":"box","text":"investments. Differences in the value of the Fund’s private investments could result in the Fund’s","page_number":186,"box":{"x":117,"y":211,"width":722,"height":12}},{"id":"c88e174d-8837-43c8-9eb6-4e718f1ed5b0","block_type":"box","text":"shareholder transactions being effected at a NAV that does not accurately reflect the underlying value","page_number":186,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"d8f57145-67c1-4380-9463-9b5a23640b80","block_type":"box","text":"of the Fund’s portfolio, potentially resulting in the dilution of shareholder interests and increasing","page_number":186,"box":{"x":116,"y":242,"width":718,"height":12}},{"id":"0e3961c5-7c48-49e9-85d1-f83a8393e847","block_type":"box","text":"opportunities for shareholder arbitrage. The values used by the Fund to price its restricted securities","page_number":186,"box":{"x":116,"y":258,"width":747,"height":12}},{"id":"f2c71325-8499-457d-a887-a71b1ea99370","block_type":"box","text":"may also differ from those used by other investment companies and investors to price the same","page_number":186,"box":{"x":117,"y":273,"width":715,"height":12}},{"id":"cbba7e9e-658b-4cd7-ac95-475e589175f9","block_type":"box","text":"restricted securities. In addition, the impact of changes in the market environment and other events on","page_number":186,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"e78300e9-0c0a-4f1c-8f37-7a8e75045e6b","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":186,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"eaf2c46d-3e29-41e6-90e4-1c6c64b8710f","block_type":"box","text":"impact of such changes on the readily available market values for the Fund’s other investments. A","page_number":186,"box":{"x":117,"y":320,"width":732,"height":12}},{"id":"885bc2fd-565d-430c-8a91-c27d8f2dcf89","block_type":"box","text":"Fund’s NAV could be adversely affected if the Fund’s determinations regarding the fair value of the","page_number":186,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"7d030566-ca22-4821-8e1d-c0851e0fced0","block_type":"box","text":"Fund’s investments were materially higher than the investment’s actual market or fair value or the","page_number":186,"box":{"x":117,"y":351,"width":728,"height":12}},{"id":"737f0ff1-d86c-4c4b-837a-e887c5169235","block_type":"box","text":"values that the Fund ultimately realizes upon the disposal of such investments.","page_number":186,"box":{"x":116,"y":366,"width":590,"height":12}},{"id":"dddb1474-27ce-4971-b00e-34a034025dab","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":186,"box":{"x":116,"y":394,"width":400,"height":12}},{"id":"d717900d-deb1-44e5-96a2-155490af84ee","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":186,"box":{"x":116,"y":422,"width":271,"height":12}},{"id":"d205b141-8515-4e01-8a30-17b3a27766bf","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the","page_number":186,"box":{"x":389,"y":422,"width":481,"height":12}},{"id":"1590dba4-4911-43c2-9cb3-39e018685e01","block_type":"box","text":"same parties with whom it may enter into repurchase agreements. Under a reverse repurchase","page_number":186,"box":{"x":116,"y":438,"width":711,"height":11}},{"id":"040cb688-f6a2-4c1f-a70d-fe7d7df4df99","block_type":"box","text":"agreement, a Fund sells securities to another party and agrees to repurchase them at a particular date","page_number":186,"box":{"x":116,"y":453,"width":766,"height":12}},{"id":"7d394ee3-7ae7-4214-a73b-b483f62d790d","block_type":"box","text":"and price. A Fund may enter into a reverse repurchase agreement when it is anticipated that the","page_number":186,"box":{"x":116,"y":469,"width":719,"height":11}},{"id":"aefd489b-1de2-43f3-8352-d47e4797adb7","block_type":"box","text":"interest income to be earned from the investment of the proceeds of the transaction is greater than the","page_number":186,"box":{"x":117,"y":484,"width":765,"height":12}},{"id":"e7d860d9-9ec9-4d46-ae53-070a9171bb9f","block_type":"box","text":"interest expense of the transaction.","page_number":186,"box":{"x":117,"y":499,"width":265,"height":12}},{"id":"96545947-aa48-4a1a-999c-d1ef35ef4a39","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":186,"box":{"x":116,"y":527,"width":772,"height":12}},{"id":"dbdfe966-dd23-48c7-b22b-aadf5d03a6ac","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the","page_number":186,"box":{"x":117,"y":543,"width":771,"height":12}},{"id":"7886e725-0178-45c3-8ddc-8e876bcae764","block_type":"box","text":"investment of the proceeds will be less than the interest expense, (ii) the market value of the securities","page_number":186,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"79c6c221-a0b8-4adc-93f3-97b386648041","block_type":"box","text":"retained in lieu of sale by a Fund may decline below","page_number":186,"box":{"x":117,"y":574,"width":390,"height":12}},{"id":"20059735-7320-4640-9ff6-8b7386a97fa2","block_type":"box","text":"the price of the securities the Fund has sold but is","page_number":186,"box":{"x":507,"y":574,"width":375,"height":12}},{"id":"4a6f6f8b-7d81-4376-a69d-a4cb3cc071ca","block_type":"box","text":"obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which","page_number":186,"box":{"x":116,"y":589,"width":770,"height":12}},{"id":"bbfd1675-bd0c-4d2d-8d8e-00d34962ad2e","block_type":"box","text":"the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.","page_number":186,"box":{"x":116,"y":605,"width":710,"height":12}},{"id":"776f995d-6718-4e74-ac3b-a1f32246fb6b","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or","page_number":186,"box":{"x":117,"y":633,"width":731,"height":12}},{"id":"8a89ebc4-8682-4826-be02-14d6494742b9","block_type":"box","text":"becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine","page_number":186,"box":{"x":117,"y":648,"width":765,"height":12}},{"id":"abd87a89-9687-4fbb-a24c-97b8ec939758","block_type":"box","text":"whether to enforce a Fund’s obligations to repurchase the securities and the Fund’s use of the","page_number":186,"box":{"x":116,"y":664,"width":699,"height":12}},{"id":"5c22c0f9-18d5-408e-9806-f9746f0b74f7","block_type":"box","text":"proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.","page_number":186,"box":{"x":117,"y":679,"width":737,"height":12}},{"id":"be1ee47b-cde0-402a-9114-2e23fd505641","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase","page_number":186,"box":{"x":117,"y":707,"width":705,"height":12}},{"id":"78f27ada-0c42-4014-a4ce-1ba0d4cb598f","block_type":"box","text":"agreements and similar financing transactions (e.g., recourse and non-recourse tender option bonds,","page_number":186,"box":{"x":116,"y":723,"width":749,"height":12}},{"id":"f52d57d2-5e22-4aa8-92a3-2729f4e9aa0d","block_type":"box","text":"borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":186,"box":{"x":117,"y":738,"width":762,"height":12}},{"id":"467643be-7b00-4c8b-b536-ffc7acd60c14","block_type":"box","text":"Investment Company Act, provided that the Fund either (i) complies with the 300% asset coverage","page_number":186,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"af7e338c-1d0a-478c-b9ca-3c53cf0925a1","block_type":"box","text":"ratio with respect to all such transactions and any","page_number":186,"box":{"x":117,"y":769,"width":366,"height":12}},{"id":"0caaeabe-8a7d-4711-b777-c14db37f58ac","block_type":"box","text":"other borrowings in the aggregate, or (ii) treats all","page_number":186,"box":{"x":489,"y":769,"width":366,"height":12}},{"id":"33eaaac8-053e-493a-a996-dd70727cfa5d","block_type":"box","text":"such transactions as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of","page_number":186,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"029db028-d9d3-4654-a8cd-b4ff8abea1c5","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also finalized rules","page_number":186,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"a2c3ae2f-38f6-4683-b899-afef41e4b28c","block_type":"box","text":"that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":186,"box":{"x":116,"y":816,"width":680,"height":12}},{"id":"8872d73b-8d23-4568-90fb-dd8400469e8a","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the","page_number":186,"box":{"x":116,"y":831,"width":736,"height":12}},{"id":"3479920f-a1d2-48ee-876a-db1a450c2d47","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":186,"box":{"x":117,"y":847,"width":762,"height":12}},{"id":"177eac35-3ef3-4de4-9733-ab66680f28e0","block_type":"box","text":"the availability or increase the costs of such transactions and may adversely affect a Fund’s","page_number":186,"box":{"x":116,"y":862,"width":686,"height":12}},{"id":"deac5b02-85a0-43a6-97f9-bc5b4329c67e","block_type":"box","text":"performance.","page_number":186,"box":{"x":117,"y":878,"width":103,"height":12}},{"id":"346b13e7-2b7d-4500-a485-1a11e4032989","block_type":"box","text":"II-92","page_number":186,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"5a819748-e82b-4d0d-8afb-a634f4cf8fcc","block_type":"box","text":"NM1026U-6004408-186/267","page_number":186,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"334da59d-d561-49d4-86cb-05ee34b1e15c","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated","page_number":187,"box":{"x":116,"y":87,"width":707,"height":12}},{"id":"0363ffec-7d8e-478b-83b9-8de19420e9bc","block_type":"box","text":"counterparties and certain of their affiliates to include in certain financial contracts, including many","page_number":187,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"f811cfd8-a735-4b2a-8495-443ddc5250dc","block_type":"box","text":"reverse repurchase agreements, terms that delay or restrict the rights of counterparties, such as a","page_number":187,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"87d4c27b-1d79-4679-8180-422f3e60f7fa","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":187,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"f5afe0c1-7c2a-4c60-8b64-a0fff8f8abfb","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":187,"box":{"x":116,"y":149,"width":748,"height":12}},{"id":"4a7e75cb-d233-4bab-a343-267f6aeb546c","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":187,"box":{"x":116,"y":165,"width":707,"height":12}},{"id":"df1d5bf7-b03c-4e34-8de3-c588083e526b","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":187,"box":{"x":117,"y":180,"width":729,"height":12}},{"id":"aa19e5a8-00a6-4068-9786-2f8c8ca3ae1a","block_type":"box","text":"affect a Fund’s ability to terminate existing reverse repurchase agreements or to realize amounts to be","page_number":187,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"111e3c4a-3838-4361-b9ec-a87bfa519aa6","block_type":"box","text":"received under such agreements.","page_number":187,"box":{"x":117,"y":211,"width":253,"height":12}},{"id":"3384c2e7-687a-4cc4-98fb-6cdf3d4354b4","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":187,"box":{"x":116,"y":242,"width":349,"height":12}},{"id":"90c15071-21bc-4ae5-85b0-0d1b8d59a5e1","block_type":"box","text":"Certain Funds may participate in rights offerings and","page_number":187,"box":{"x":466,"y":242,"width":399,"height":12}},{"id":"9b0bd981-c89e-4729-bc30-4522fb8a0dcb","block_type":"box","text":"may purchase warrants, which are privileges issued by corporations enabling the owners to subscribe","page_number":187,"box":{"x":117,"y":258,"width":759,"height":12}},{"id":"e233f332-5ad9-4bde-a451-fe8a244f710f","block_type":"box","text":"to and purchase a specified number of shares of the corporation at a specified price during a specified","page_number":187,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"5f5a43fe-9faf-4e37-8865-1927ab564763","block_type":"box","text":"period of time. Subscription rights normally have a short life span to expiration. The purchase of rights","page_number":187,"box":{"x":117,"y":289,"width":759,"height":12}},{"id":"2d2840ed-ff4b-4d91-8623-fc47e511fcec","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":187,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"3ee4efa7-d2ac-4060-973d-e014db1abf07","block_type":"box","text":"to subscribe to additional shares is not exercised prior to the rights’ and warrants’ expiration. Also, the","page_number":187,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"a6741a5d-8141-402b-8a4a-35afacb83977","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":187,"box":{"x":117,"y":335,"width":732,"height":12}},{"id":"b4c743a9-048c-49e2-a250-9fb86d780ca6","block_type":"box","text":"warrant added to the subscription price of the related security may exceed the value of the subscribed","page_number":187,"box":{"x":116,"y":351,"width":762,"height":12}},{"id":"7a276bc8-3281-46bc-905c-38b0f16ed94d","block_type":"box","text":"security’s market price such as when there is no movement in the level of the underlying security.","page_number":187,"box":{"x":116,"y":366,"width":728,"height":12}},{"id":"16dffa9e-948c-47de-8203-2dc78e300ba5","block_type":"box","text":"Buying a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder","page_number":187,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"beb78708-64bb-418f-bf11-161a73892ed9","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":187,"box":{"x":117,"y":397,"width":766,"height":12}},{"id":"00b47175-05e6-433b-bcd1-d661d945b108","block_type":"box","text":"to assets of the issuer, and for this reason investments in warrants may be more speculative than other","page_number":187,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"b69009fe-d0e3-47d2-9025-e0015fa0185e","block_type":"box","text":"equity-based investments.","page_number":187,"box":{"x":116,"y":428,"width":200,"height":12}},{"id":"7e1d3fc7-2913-42f0-aafb-1cef978cf020","block_type":"box","text":"Rule 144A Securities.","page_number":187,"box":{"x":116,"y":459,"width":170,"height":10}},{"id":"279854ea-a422-416b-9609-d2367de00b67","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":187,"box":{"x":287,"y":459,"width":590,"height":12}},{"id":"90e16b5e-c1d1-4eb7-817d-0ca46f6aed01","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":187,"box":{"x":117,"y":475,"width":769,"height":12}},{"id":"fbfee269-9ed6-4283-98a9-48571a64f25c","block_type":"box","text":"Securities Lending.","page_number":187,"box":{"x":117,"y":506,"width":153,"height":12}},{"id":"dc90a416-1ba9-4d39-87c1-e2390e8ffaae","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock","page_number":187,"box":{"x":271,"y":506,"width":575,"height":12}},{"id":"07bcf450-4c34-4480-9aa0-9e182bf27e13","block_type":"box","text":"determines to be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide","page_number":187,"box":{"x":116,"y":521,"width":744,"height":12}},{"id":"5486bbc7-c90e-4089-be14-de4a5d08ef9a","block_type":"box","text":"collateral that is maintained in an amount at least","page_number":187,"box":{"x":116,"y":537,"width":369,"height":9}},{"id":"81e7f530-42c5-44c0-ba4f-03bbccd26080","block_type":"box","text":"equal to the current market value of the securities","page_number":187,"box":{"x":486,"y":537,"width":373,"height":12}},{"id":"ea6f96ce-8cf1-44f2-9c51-d81a7c8c3f1f","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":187,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"01a96753-f7bf-4a4c-8fc1-300b3ae3e055","block_type":"box","text":"securities loans of the particular Fund exceeds one-third of the value of such Fund’s total assets","page_number":187,"box":{"x":116,"y":568,"width":718,"height":12}},{"id":"b9905ba1-6269-4c37-a1ba-dc3eac93b5cf","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":187,"box":{"x":117,"y":583,"width":765,"height":12}},{"id":"c1a1b70e-23da-45b9-838c-98fb9ae46db0","block_type":"box","text":"return of the securities loaned. Each Fund receives, by way of substitute payment, the value of any","page_number":187,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"bf0f934f-18bc-4483-ac38-78254fed46b6","block_type":"box","text":"interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise","page_number":187,"box":{"x":117,"y":614,"width":738,"height":12}},{"id":"959289b3-f92b-4b30-a933-e736ac4316c6","block_type":"box","text":"received if the securities were not on loan.","page_number":187,"box":{"x":117,"y":630,"width":318,"height":9}},{"id":"46e3ba0a-f0e6-42ff-853f-0e00ec2a70d1","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee","page_number":187,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"7d282ac2-1abd-433f-85df-47d45c2b28ff","block_type":"box","text":"based on the amount of cash collateral. The Funds are compensated by any positive difference","page_number":187,"box":{"x":117,"y":676,"width":707,"height":12}},{"id":"f22ad423-dc92-44f5-aafc-8ae46303f9b5","block_type":"box","text":"between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In","page_number":187,"box":{"x":117,"y":692,"width":758,"height":12}},{"id":"593b30e9-0dbf-4355-b0c7-84949330db5e","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":187,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"baafdb9b-03e2-4e9f-b1cf-496480cb1a72","block_type":"box","text":"percentage of the market value of the loaned securities. Any cash collateral received by the Fund for","page_number":187,"box":{"x":117,"y":723,"width":746,"height":12}},{"id":"2c5774a9-166c-493d-a2eb-4e9e7dc312c6","block_type":"box","text":"such loans, and uninvested cash, may be reinvested in certain short-term instruments either directly on","page_number":187,"box":{"x":116,"y":738,"width":764,"height":12}},{"id":"4925ad11-ce11-41ce-8dac-fdf464b48976","block_type":"box","text":"behalf of the Fund or through one or more joint accounts or money market funds, including those","page_number":187,"box":{"x":117,"y":754,"width":717,"height":12}},{"id":"619bc066-f440-4dbb-8b7e-bf758c8b0c1d","block_type":"box","text":"affiliated with BlackRock; such investments are subject to investment risk.","page_number":187,"box":{"x":116,"y":769,"width":546,"height":12}},{"id":"8de37da4-7c9e-495c-8c96-ae98179e6840","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":187,"box":{"x":116,"y":800,"width":589,"height":12}},{"id":"76347e8e-6c0c-4ce9-8718-ef050ab5ceaf","block_type":"box","text":"i.e.","page_number":187,"box":{"x":706,"y":800,"width":21,"height":10}},{"id":"d87e0427-6c34-4b96-8a99-e7515061daa0","block_type":"box","text":", the risk of losses","page_number":187,"box":{"x":730,"y":800,"width":132,"height":11}},{"id":"91f29a61-2ad6-4b9f-ac9c-2634fdaa5715","block_type":"box","text":"resulting from problems in the settlement and accounting process), “gap” risk (","page_number":187,"box":{"x":117,"y":816,"width":580,"height":12}},{"id":"addc2065-28da-4539-b6cd-7cb7bb659018","block_type":"box","text":"i.e.","page_number":187,"box":{"x":698,"y":816,"width":21,"height":9}},{"id":"f3e9c12b-cdb0-430c-9b52-a13276ba94fb","block_type":"box","text":", the risk of a","page_number":187,"box":{"x":722,"y":816,"width":94,"height":11}},{"id":"56fa10d0-dc32-4852-b737-d91df1b86fd5","block_type":"box","text":"mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to","page_number":187,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"18b4780c-517f-4b80-8b7e-23d4b475eafa","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":187,"box":{"x":117,"y":847,"width":296,"height":12}},{"id":"e5f814ae-8c70-4880-b138-2bc4972f4625","block_type":"box","text":"i.e.","page_number":187,"box":{"x":414,"y":847,"width":20,"height":9}},{"id":"5e9eed67-bb1a-4b5b-8eb5-e38395c8cb97","block_type":"box","text":", the risk of a shortfall at default when a cash collateral","page_number":187,"box":{"x":437,"y":847,"width":409,"height":11}},{"id":"db40dc26-f679-4174-83a7-af7bae08a2d3","block_type":"box","text":"investment is denominated in a currency other than the currency of the assets being loaned due to","page_number":187,"box":{"x":117,"y":862,"width":735,"height":12}},{"id":"a14e6898-9220-4f9b-b62a-b643d8fdbfa2","block_type":"box","text":"movements in foreign exchange rates), and credit, legal, counterparty and market risks (including the","page_number":187,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"e2330597-8786-4d88-a6b9-f7b13c16aa60","block_type":"box","text":"II-93","page_number":187,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"67c969c2-660e-44fb-8241-8362672fc143","block_type":"box","text":"NM1026U-6004408-187/267","page_number":187,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7a4b38b1-24d3-4438-9935-f9dc104b2b43","block_type":"box","text":"risk that market events, including but not limited to corporate actions, could lead a Fund to lend","page_number":188,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"f65650a4-c67e-4bda-acf2-a40dc5e47f2a","block_type":"box","text":"securities that are trading at a premium due to increased demand, or to recall loaned securities or to","page_number":188,"box":{"x":116,"y":103,"width":748,"height":12}},{"id":"7ec127d1-8538-4335-9b1e-263b60304c98","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":188,"box":{"x":117,"y":118,"width":754,"height":12}},{"id":"ef96f92d-611b-4d3e-968a-83461d308750","block_type":"box","text":"out securities that are subject to a corporate action and commit to the borrower a particular election as","page_number":188,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"fbce063a-2a1e-4f2a-8e26-4f27a6e270b5","block_type":"box","text":"determined by the Fund’s investment adviser, the benefit the Fund would receive in respect of","page_number":188,"box":{"x":116,"y":149,"width":702,"height":12}},{"id":"bc0c2056-b617-47d4-8197-51c33c3e91e2","block_type":"box","text":"committing to such election may or may not be less than the benefit the Fund would have received","page_number":188,"box":{"x":116,"y":165,"width":736,"height":12}},{"id":"3ba2450d-b00c-484e-a9f2-1cf4d3ecf61e","block_type":"box","text":"from making a different election in such corporate action. If a securities lending counterparty were to","page_number":188,"box":{"x":116,"y":180,"width":748,"height":12}},{"id":"a2b78750-78fe-4182-96a7-1fcafe2b7be0","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":188,"box":{"x":116,"y":196,"width":751,"height":12}},{"id":"14820cbc-3274-437f-bbe1-c43ddcdb0c76","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":188,"box":{"x":116,"y":211,"width":751,"height":12}},{"id":"2e876a1b-aa87-4a34-8dc3-0c9554687b3a","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":188,"box":{"x":117,"y":227,"width":748,"height":12}},{"id":"619ba847-de46-42a5-bf1c-2216b3d27ab2","block_type":"box","text":"be impacted, or the Fund may experience losses if the proceeds received from liquidating the collateral","page_number":188,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"b6e56717-a5dc-4759-8d40-b159c62c777a","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":188,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"467bba6a-b045-467b-af00-23e0a44988e2","block_type":"box","text":"transaction costs incurred in purchasing replacement securities. This latter event could trigger adverse","page_number":188,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"e62df3fa-4641-4e4b-9947-0d0399a7a490","block_type":"box","text":"tax consequences for a Fund. A Fund could lose money if its short-term investment of the collateral","page_number":188,"box":{"x":116,"y":289,"width":742,"height":12}},{"id":"b0a87de0-a826-47ee-92b3-5ed809ffa07a","block_type":"box","text":"declines in value over the period of the loan. Substitute payments received by a Fund representing","page_number":188,"box":{"x":116,"y":304,"width":737,"height":12}},{"id":"3149d664-5174-4bde-8b1d-5742282f5e13","block_type":"box","text":"dividends paid on securities loaned out by the Fund will not be considered qualified dividend income,","page_number":188,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"4bd56e1a-58e5-4d0c-8fa1-0e0278b12d4d","block_type":"box","text":"and distributions by the Fund of such substitute payments will not constitute qualified dividend income.","page_number":188,"box":{"x":116,"y":335,"width":765,"height":12}},{"id":"82a2ad1d-0003-47a3-8c4b-54f5299e0484","block_type":"box","text":"Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":188,"box":{"x":116,"y":351,"width":741,"height":12}},{"id":"16f4883a-a945-40ea-b9a7-d9218d82e032","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and","page_number":188,"box":{"x":117,"y":366,"width":684,"height":12}},{"id":"1af8786a-3df8-4da8-a204-634ebcb2c7ca","block_type":"box","text":"distributions by the Fund of such substitute payments will not be eligible for a 20% deduction currently","page_number":188,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"5f3c8f10-0dd7-4bf9-9a95-477bb2dcadd4","block_type":"box","text":"available for ordinary REIT dividends paid to non-corporate shareholders provided certain other","page_number":188,"box":{"x":116,"y":397,"width":713,"height":12}},{"id":"db9c51d4-6c72-4838-9466-8da612599174","block_type":"box","text":"requirements are satisfied. The securities lending agent will take into account the tax effects on","page_number":188,"box":{"x":117,"y":413,"width":710,"height":12}},{"id":"275196da-fa5b-43a8-b61d-3ced6ca3e2ed","block_type":"box","text":"shareholders caused by these differences in connection with a Fund’s securities lending program.","page_number":188,"box":{"x":116,"y":428,"width":730,"height":12}},{"id":"836e5eff-2ced-4aa6-add1-0351fb58ad5d","block_type":"box","text":"Substitute payments received on tax-exempt securities loaned out will not be tax-exempt income.","page_number":188,"box":{"x":116,"y":444,"width":727,"height":12}},{"id":"3f6e52d7-d92a-4ad7-bf33-0fad5ef3c293","block_type":"box","text":"There could also be changes in the status of issuers under applicable laws and regulations, including","page_number":188,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"c216f3f2-135f-4a87-8814-856cf6c199fe","block_type":"box","text":"tax regulations, that may impact the regulatory or tax treatment of loaned securities and could, for","page_number":188,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"2582dbdb-574d-4c21-83b5-ffd8cf6a5ff0","block_type":"box","text":"example, result in a delay in the payment of dividend equivalent payments owed to a Fund (as","page_number":188,"box":{"x":116,"y":490,"width":704,"height":12}},{"id":"b4d396cb-b2b4-4a47-8f7d-f22f364c4df9","block_type":"box","text":"permitted by applicable law).","page_number":188,"box":{"x":117,"y":506,"width":217,"height":12}},{"id":"625b23e7-e5ff-4cf7-99f8-b74ead70d8b7","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":188,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"7b057da9-f1f0-46db-9db8-f584d957c12a","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many securities lending","page_number":188,"box":{"x":116,"y":552,"width":723,"height":12}},{"id":"448dc5be-c29d-4e44-b82c-d055ed80aa20","block_type":"box","text":"agreements, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate","page_number":188,"box":{"x":116,"y":568,"width":739,"height":12}},{"id":"4a9f69a2-30b5-4f69-b5a1-42a1eb32299b","block_type":"box","text":"such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":188,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"7d26aa57-cc10-44d7-bc36-c018a854a9a5","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution","page_number":188,"box":{"x":116,"y":599,"width":754,"height":12}},{"id":"678df6c4-dbb6-4483-a062-39ba5eae0ecd","block_type":"box","text":"or insolvency proceedings. It is possible that these requirements, as well as potential additional","page_number":188,"box":{"x":116,"y":614,"width":711,"height":12}},{"id":"d81ce607-318a-4188-a62c-2af5bede4a7e","block_type":"box","text":"government regulation and other developments in the market, could adversely affect the Fund’s ability","page_number":188,"box":{"x":116,"y":630,"width":762,"height":12}},{"id":"7b46c7a7-5b0f-4cf8-b439-9a4ca62e0dea","block_type":"box","text":"to terminate existing securities lending agreements or to realize amounts to be received under such","page_number":188,"box":{"x":116,"y":645,"width":744,"height":12}},{"id":"145271f5-5a91-488d-ae5b-2ef4442d2959","block_type":"box","text":"agreements. Prudential regulation may also favor lenders that can provide additional protections, such","page_number":188,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"be761a25-64e7-4304-9f68-a3d9f9fb6d0a","block_type":"box","text":"as liens that are exercisable upon lender default, to bank borrowers. Certain Funds expect to provide","page_number":188,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"22ad088b-951d-448d-a692-12f4a73b7041","block_type":"box","text":"additional protections to bank borrowers, where permitted pursuant to a Fund’s investment policies and","page_number":188,"box":{"x":116,"y":692,"width":765,"height":12}},{"id":"c4bdd7d2-0ad9-412b-8846-6eacde7a64eb","block_type":"box","text":"if BlackRock believes doing so is in the best interest of the Fund.","page_number":188,"box":{"x":117,"y":707,"width":478,"height":12}},{"id":"8682be2e-da12-4938-94a5-a59e46aa2372","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan","page_number":188,"box":{"x":116,"y":738,"width":693,"height":12}},{"id":"b6202914-0ddd-49c5-9f7e-739cebbd7d79","block_type":"box","text":"transaction","page_number":188,"box":{"x":116,"y":754,"width":81,"height":9}},{"id":"92de1ec3-870b-4a71-84c2-08e649eba3ab","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information","page_number":188,"box":{"x":204,"y":754,"width":661,"height":12}},{"id":"37555cc0-0702-448e-add7-e361acf6ff5c","block_type":"box","text":"about securities","page_number":188,"box":{"x":116,"y":769,"width":117,"height":10}},{"id":"770dfd6a-f1d0-4b83-b480-f3c910c0a574","block_type":"box","text":"loans entered into in connection with short sales. Compliance with this rule is expected","page_number":188,"box":{"x":239,"y":769,"width":643,"height":12}},{"id":"15ca2e49-ce2d-4aac-87e3-b18b148533c1","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":188,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"e94d1a53-2d3b-4220-9de5-1397fd96d47d","block_type":"box","text":"the SEC may amend the rule and/or delay the current expected compliance date.","page_number":188,"box":{"x":116,"y":800,"width":602,"height":12}},{"id":"36543a25-4b2f-4012-bb90-0deaf67c8123","block_type":"box","text":"Short Sales.","page_number":188,"box":{"x":117,"y":831,"width":95,"height":10}},{"id":"3e0cd49a-3137-4a56-81a3-a630c509ea18","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential","page_number":188,"box":{"x":213,"y":831,"width":645,"height":12}},{"id":"1cd29a12-2fef-400e-b76d-51ee25a3ff82","block_type":"box","text":"declines in value of a portfolio security or to realize appreciation when a security that the Fund does","page_number":188,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"a48c5acd-04df-4657-9444-4b67670fea97","block_type":"box","text":"not own declines in value. Certain Funds have a fundamental investment restriction prohibiting short","page_number":188,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"6166789b-465c-4300-8c04-e46b6c2f2978","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":188,"box":{"x":116,"y":878,"width":771,"height":12}},{"id":"61e37522-5c28-4178-9257-82f42cdff511","block_type":"box","text":"II-94","page_number":188,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1e94a833-7671-4359-95eb-6d7f7dafa899","block_type":"box","text":"NM1026U-6004408-188/267","page_number":188,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"15bed6d2-cf75-4699-9df3-e4179d393a60","block_type":"box","text":"sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no","page_number":189,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"6e7c489b-2491-4a3b-8f03-022495d25c6a","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":189,"box":{"x":116,"y":103,"width":746,"height":12}},{"id":"2c8dfa08-21fa-43b7-8dfd-0efc1720bbab","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":189,"box":{"x":116,"y":118,"width":717,"height":12}},{"id":"b6c1b428-23b5-4fc4-88c3-c78f22d0ee49","block_type":"box","text":"particular securities and is often obligated to turn over any payments received on such borrowed","page_number":189,"box":{"x":117,"y":134,"width":719,"height":12}},{"id":"2aeccd1f-8774-4d6b-9f8d-75413a5dab58","block_type":"box","text":"securities to the lender of the securities.","page_number":189,"box":{"x":116,"y":149,"width":301,"height":10}},{"id":"00b2bcef-b001-4e43-aa97-98d4b01f865f","block_type":"box","text":"A Fund secures its obligation to replace the borrowed security by depositing collateral with the broker","page_number":189,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"7de5955e-5c08-4354-85d1-9a245e0d1263","block_type":"box","text":"dealer, usually in cash, U.S. Government Securities or other liquid securities similar to those borrowed.","page_number":189,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"761d840f-5be3-4fde-a7da-d19da6f02bc4","block_type":"box","text":"With respect to uncovered short positions, a Fund is required to deposit similar collateral with its","page_number":189,"box":{"x":116,"y":211,"width":717,"height":12}},{"id":"94c60c1e-0f7c-4aed-9716-3eb3fa662879","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":189,"box":{"x":116,"y":227,"width":763,"height":12}},{"id":"689e5ec1-b038-4728-ab60-2b99d9eeb489","block_type":"box","text":"times equal to at least 100% of the current market value of the security sold short. Depending on","page_number":189,"box":{"x":116,"y":242,"width":722,"height":12}},{"id":"cecd33f7-e689-4e18-8204-7cd05780c625","block_type":"box","text":"arrangements made with the broker-dealer from which the Fund borrowed the security, regarding","page_number":189,"box":{"x":116,"y":258,"width":726,"height":12}},{"id":"37ec09a4-9576-4aea-aac4-a69b4c049157","block_type":"box","text":"payment received by the Fund on such security, a Fund may not receive any payments (including","page_number":189,"box":{"x":117,"y":273,"width":728,"height":12}},{"id":"19454aff-b61e-4858-badb-104c158c8183","block_type":"box","text":"interest) on its collateral deposited with such broker-dealer.","page_number":189,"box":{"x":117,"y":289,"width":443,"height":12}},{"id":"93d4655e-be6d-455b-abe5-e361ba3bf082","block_type":"box","text":"Because making short sales in securities that it does not own exposes a Fund to the risks associated","page_number":189,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"e3620c5a-b132-478e-af67-fef38f17c0ee","block_type":"box","text":"with those securities, such short sales involve speculative exposure risk. A Fund will incur a loss as a","page_number":189,"box":{"x":116,"y":335,"width":755,"height":12}},{"id":"fefef214-356d-4236-aac0-14e10a0d66d6","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":189,"box":{"x":117,"y":351,"width":743,"height":12}},{"id":"47c2ece4-68d2-45e4-ab20-4df559e85988","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":189,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"06de0319-01a3-496b-bc1a-a339d1dcee3f","block_type":"box","text":"securities that increase in value, it will likely underperform similar mutual funds that do not make short","page_number":189,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"b3d42bb1-ed80-4a10-a760-93340d596d62","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":189,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"f6de2e00-04be-4494-90e1-d793009b24cb","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":189,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"28937bf3-a070-4cd9-a689-d838cd92b0c3","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":189,"box":{"x":116,"y":428,"width":750,"height":12}},{"id":"953b40de-320e-4edb-b8cd-053d5c2e950f","block_type":"box","text":"sold the security short, its potential loss is limited only by the maximum attainable price of the security,","page_number":189,"box":{"x":116,"y":444,"width":764,"height":12}},{"id":"31960bab-e55c-4960-935e-ad9b1e3d7768","block_type":"box","text":"less the price at which the security was sold and may, theoretically, be unlimited.","page_number":189,"box":{"x":117,"y":459,"width":603,"height":12}},{"id":"999dbd66-d373-4d58-abc2-860bdb6726f6","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":189,"box":{"x":116,"y":490,"width":698,"height":12}},{"id":"dff2118f-56cb-4034-a643-78bfc23eaa17","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":189,"box":{"x":116,"y":521,"width":756,"height":12}},{"id":"1e43d560-fd8e-49c8-ac87-427c5d1e9b87","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “— Derivatives —","page_number":189,"box":{"x":117,"y":537,"width":734,"height":12}},{"id":"2c73434c-f1cd-46a9-81f0-5d960cdc665c","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":189,"box":{"x":117,"y":552,"width":624,"height":12}},{"id":"d5ebe7c1-20bb-4e7f-aa2c-c280a3085a4a","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United","page_number":189,"box":{"x":116,"y":583,"width":712,"height":12}},{"id":"0c264bf4-d7bc-437d-b439-d2945dfc4c6b","block_type":"box","text":"Kingdom regulations (under which there are restrictions on net short sales in certain securities). If the","page_number":189,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"8ca14f20-9583-48bb-a81c-979288cf2dac","block_type":"box","text":"SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding short","page_number":189,"box":{"x":116,"y":614,"width":761,"height":12}},{"id":"4abbc09e-a3b2-4eef-aeb3-64831a0d7633","block_type":"box","text":"sales, they could restrict a Fund’s ability to engage in short sales in certain circumstances, and the","page_number":189,"box":{"x":116,"y":630,"width":736,"height":12}},{"id":"e538c565-af8d-47ac-a603-7ee436d4da9f","block_type":"box","text":"Fund may be unable to execute its investment strategy as a result. In response to market events, the","page_number":189,"box":{"x":117,"y":645,"width":753,"height":12}},{"id":"39e41bf0-a127-49ac-80f3-9e21cae778c2","block_type":"box","text":"SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted)","page_number":189,"box":{"x":116,"y":661,"width":742,"height":12}},{"id":"0120020a-3981-4962-b13c-03c074a3dd9b","block_type":"box","text":"bans or other restrictions on short sales of certain securities or on derivatives and other hedging","page_number":189,"box":{"x":117,"y":676,"width":711,"height":12}},{"id":"7350931e-e303-473d-8a48-7978b4a51aec","block_type":"box","text":"instruments used to achieve a similar economic effect. Such bans or other restrictions may make it","page_number":189,"box":{"x":117,"y":692,"width":731,"height":12}},{"id":"6982b5ca-945c-4f6d-b363-67730de6e516","block_type":"box","text":"impossible for a Fund to execute certain investment strategies and may have a material adverse effect","page_number":189,"box":{"x":117,"y":707,"width":760,"height":12}},{"id":"49e8f08a-b1f1-4ad2-8f7b-e15bc7eab0dc","block_type":"box","text":"on the Fund’s ability to generate returns.","page_number":189,"box":{"x":116,"y":723,"width":299,"height":12}},{"id":"06227665-dca2-4cc5-85f2-868e61f6657e","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":189,"box":{"x":117,"y":754,"width":325,"height":12}},{"id":"eacf9d70-faaf-4dfd-93b2-dd867ff77a73","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other","page_number":189,"box":{"x":448,"y":754,"width":402,"height":12}},{"id":"ba947dc1-a268-44ae-a582-02c13cbc9077","block_type":"box","text":"interests issued by special purpose acquisition companies (“SPACs”) or similar special purpose entities","page_number":189,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"e84b899f-dec5-4232-991f-ac958bb200d1","block_type":"box","text":"that pool funds to seek potential acquisition opportunities, including the “founder’s” shares and","page_number":189,"box":{"x":116,"y":785,"width":698,"height":12}},{"id":"9339c248-84d6-45b8-a912-2d900cf7770f","block_type":"box","text":"warrants described below. A SPAC is a publicly traded company that raises investment capital via an","page_number":189,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"7204570c-4228-4fbd-af1b-d871d1f85e52","block_type":"box","text":"IPO for the purpose of identifying and acquiring one or more operating businesses or assets. In","page_number":189,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"a27cf6af-2aeb-4222-b2ad-971f16dbca8d","block_type":"box","text":"connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s” shares, generally for","page_number":189,"box":{"x":116,"y":831,"width":716,"height":12}},{"id":"530aa661-6b49-444e-9ac0-c960e099e70b","block_type":"box","text":"nominal consideration, and warrants that will result in the sponsors owning a specified percentage","page_number":189,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"7eed9e38-e845-4801-9266-a62de3e45438","block_type":"box","text":"(typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a","page_number":189,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"326ece1d-21f5-4926-a57a-a1fb9a78f3e8","block_type":"box","text":"SPAC conducts an IPO, it has selected a management team but has not yet identified a specific","page_number":189,"box":{"x":116,"y":878,"width":718,"height":12}},{"id":"336e54b0-7ade-4b6a-a505-a45d2a450c9b","block_type":"box","text":"II-95","page_number":189,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d5e4b41b-2616-4a05-8d70-fda8b8ced35a","block_type":"box","text":"NM1026U-6004408-189/267","page_number":189,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c6f66240-5fe0-4ae0-a2c4-275696e02814","block_type":"box","text":"acquisition opportunity. Unless and until an acquisition is completed, a SPAC generally invests its","page_number":190,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"56e81087-1bb6-422b-8dce-fc147aa7aefc","block_type":"box","text":"assets in U.S. Government securities, money market securities and cash. If an acquisition that meets","page_number":190,"box":{"x":116,"y":102,"width":756,"height":13}},{"id":"027a563b-76ed-426f-9d7e-f307d4ecdae7","block_type":"box","text":"the requirements for the SPAC is not completed within a pre-established period of time, the invested","page_number":190,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"878fb388-363f-4f1a-84d4-a1f19ef896b9","block_type":"box","text":"funds are returned to the SPAC’s public shareholders, the warrants expire, and the “founder’s” shares","page_number":190,"box":{"x":116,"y":134,"width":761,"height":11}},{"id":"66011074-a361-4791-9985-dc1c219c27f1","block_type":"box","text":"and such warrants become worthless. Because SPACs and similar entities are in essence “blank","page_number":190,"box":{"x":116,"y":149,"width":725,"height":10}},{"id":"dab6122e-30ed-45e2-a609-a0ce74259ecb","block_type":"box","text":"check” companies without operating histories or ongoing business operations (other than identifying","page_number":190,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"c9a34820-cc8c-42e6-b92c-c1ac06d9bf0f","block_type":"box","text":"and pursuing acquisitions), the potential for the long-term capital appreciation of their securities is","page_number":190,"box":{"x":116,"y":180,"width":728,"height":12}},{"id":"ed62448a-b251-463c-9c98-5a4cbc1c099c","block_type":"box","text":"particularly dependent on the ability of the SPAC’s management to identify and complete a profitable","page_number":190,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"8ff243f9-6daa-4a4d-b72b-5abb90610703","block_type":"box","text":"acquisition. There is no guarantee that the SPACs in which a Fund invests will complete an acquisition","page_number":190,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"e342dc62-6101-43a3-a1be-c586817796bf","block_type":"box","text":"or that any acquisitions completed by the SPACs in which the Fund invests will be profitable. Some","page_number":190,"box":{"x":116,"y":227,"width":740,"height":12}},{"id":"66877677-a511-40df-ae32-20c949b7192d","block_type":"box","text":"SPACs may pursue acquisitions only within certain industries or regions, which may ultimately lead to","page_number":190,"box":{"x":116,"y":242,"width":758,"height":12}},{"id":"8483fbb6-2db6-419c-abec-963cecb71d97","block_type":"box","text":"an increase in the volatility of their prices following the acquisition. In addition, some of these securities","page_number":190,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"e95ebc7e-bd35-4a0a-9941-157c830d1983","block_type":"box","text":"may be considered illiquid and/or subject to restrictions on resale.","page_number":190,"box":{"x":117,"y":273,"width":491,"height":12}},{"id":"929b51ed-d194-42ec-a035-0ee8260fe2f8","block_type":"box","text":"Standby Commitment Agreements.","page_number":190,"box":{"x":117,"y":301,"width":278,"height":12}},{"id":"f188edc1-1991-4aea-aab1-76b3838e6c1a","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated","page_number":190,"box":{"x":396,"y":301,"width":471,"height":12}},{"id":"0dd9d75a-e94b-415d-86c4-649e9bb6f303","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":190,"box":{"x":117,"y":316,"width":750,"height":13}},{"id":"103e6e27-3d5d-4b7f-8e34-1af0314ae273","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":190,"box":{"x":116,"y":332,"width":756,"height":12}},{"id":"4d855679-9fde-466b-ba8f-1aa7a88118bd","block_type":"box","text":"entering into the agreement, a Fund is paid a commitment fee, regardless of whether or not the","page_number":190,"box":{"x":116,"y":347,"width":711,"height":13}},{"id":"fe732208-9693-48ce-9ea5-5704fb04406f","block_type":"box","text":"security is ultimately issued. A Fund will enter into such agreements for the purpose of investing in the","page_number":190,"box":{"x":116,"y":363,"width":762,"height":12}},{"id":"6c7d8a5c-b883-45de-b2c4-10273e400619","block_type":"box","text":"security underlying the commitment at a price that is considered advantageous to the Fund.","page_number":190,"box":{"x":116,"y":379,"width":685,"height":12}},{"id":"1ed97066-1ebd-43b2-b71e-b6b2df7d4fc8","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the","page_number":190,"box":{"x":116,"y":407,"width":767,"height":11}},{"id":"a00e858d-5920-4c66-81ad-e1c697090965","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":190,"box":{"x":116,"y":422,"width":764,"height":12}},{"id":"338232c7-1ff7-46d7-aa0d-dc1bea5c76cb","block_type":"box","text":"the issuance of the security underlying the commitment is at the option of the issuer, the Fund may","page_number":190,"box":{"x":116,"y":437,"width":738,"height":12}},{"id":"47bc44f8-adb8-4cda-974b-ba2548b34298","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":190,"box":{"x":117,"y":453,"width":756,"height":12}},{"id":"875f6258-8437-455f-a4f0-274888b8a53f","block_type":"box","text":"value of the security during the commitment period.","page_number":190,"box":{"x":116,"y":468,"width":386,"height":12}},{"id":"d8c25303-26af-4d3e-9723-fd0ea234a3fa","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment","page_number":190,"box":{"x":116,"y":496,"width":756,"height":12}},{"id":"bc9757f2-d289-40c7-8b90-7287f7ec4639","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":190,"box":{"x":116,"y":512,"width":769,"height":12}},{"id":"0544da34-8cd0-4769-bf3b-eae0353ea20e","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":190,"box":{"x":116,"y":527,"width":765,"height":12}},{"id":"a1518543-3b5f-49f0-9ee0-fc667fa53c70","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":190,"box":{"x":116,"y":543,"width":748,"height":12}},{"id":"209777cc-79d3-4e20-b812-211574d3d41d","block_type":"box","text":"the commitment fee will be recorded as income on the expiration date of the standby commitment.","page_number":190,"box":{"x":116,"y":558,"width":727,"height":12}},{"id":"eaf67d46-6ed1-4e8a-a906-852548ae5086","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the","page_number":190,"box":{"x":116,"y":586,"width":744,"height":12}},{"id":"576d64af-31af-4739-9db3-c97cc2efd5b0","block_type":"box","text":"Manager’s or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby","page_number":190,"box":{"x":117,"y":602,"width":693,"height":12}},{"id":"9e2999f5-362b-43f3-a8b0-eebbfd042497","block_type":"box","text":"commitments solely to facilitate portfolio liquidity and not to exercise its rights thereunder for trading","page_number":190,"box":{"x":116,"y":617,"width":744,"height":12}},{"id":"a07f3147-2839-41ef-8d06-001ead2efa74","block_type":"box","text":"purposes. Standby commitments will be valued at zero in determining NAV. Accordingly, where a Fund","page_number":190,"box":{"x":117,"y":633,"width":769,"height":12}},{"id":"48a5ef2f-91fe-4508-9666-dfd81abad328","block_type":"box","text":"pays directly or indirectly for a standby commitment, its cost will be reflected as an unrealized loss for","page_number":190,"box":{"x":117,"y":648,"width":756,"height":12}},{"id":"aa4beeef-643d-4dd5-8964-19fdf82a394f","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":190,"box":{"x":116,"y":664,"width":767,"height":12}},{"id":"2c380e60-641f-4da7-bc85-4f845e79b7af","block_type":"box","text":"loss when the commitment is exercised or expires.","page_number":190,"box":{"x":117,"y":679,"width":373,"height":12}},{"id":"53641fe8-e809-4915-bbb2-b6a2fee157b8","block_type":"box","text":"Stripped Securities.","page_number":190,"box":{"x":117,"y":707,"width":156,"height":12}},{"id":"daaeff4f-65c7-44f9-baf5-044988c5eb73","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and","page_number":190,"box":{"x":279,"y":707,"width":549,"height":12}},{"id":"c6c675af-634f-401b-be0f-83fb916f8c03","block_type":"box","text":"principal components of an instrument and sells them as separate securities. In general, one security is","page_number":190,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"2ac62a4f-156d-43e1-ba40-1fbcc4deda30","block_type":"box","text":"entitled to receive the interest payments on the underlying assets (the interest only or “IO” security)","page_number":190,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"ac2f259a-82ad-4b7c-bc6e-252c6b484236","block_type":"box","text":"and the other to receive the principal payments (the principal only or “PO” security). Some stripped","page_number":190,"box":{"x":116,"y":754,"width":731,"height":12}},{"id":"fd265eac-6915-486c-9629-4d054939d0ac","block_type":"box","text":"securities may receive a combination of interest and principal payments. The yields to maturity on IOs","page_number":190,"box":{"x":116,"y":769,"width":755,"height":12}},{"id":"61018299-7162-40c6-abff-a9074cff31a0","block_type":"box","text":"and POs are sensitive to the expected or anticipated rate of principal payments (including","page_number":190,"box":{"x":116,"y":785,"width":663,"height":12}},{"id":"947d8298-4d31-4395-a03d-ef4d466e41d5","block_type":"box","text":"prepayments) on the related underlying assets, and principal payments may have a material effect on","page_number":190,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"4ddbc2eb-ee2f-4d55-a226-293b93ae687a","block_type":"box","text":"yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal,","page_number":190,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"a3a9cc36-1d95-4438-89bc-ea5af55b3185","block_type":"box","text":"a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets","page_number":190,"box":{"x":116,"y":831,"width":686,"height":12}},{"id":"b904b481-2098-4b56-ac15-ade3d8231052","block_type":"box","text":"experience less than anticipated prepayments of principal, the yield on POs could be adversely","page_number":190,"box":{"x":116,"y":847,"width":711,"height":12}},{"id":"4f1d18eb-d8e9-448d-bb0d-f6fd2a31bb13","block_type":"box","text":"affected. Stripped securities may be highly sensitive to changes in interest rates and rates of","page_number":190,"box":{"x":116,"y":862,"width":691,"height":12}},{"id":"327973c6-28d3-4c0d-a3c1-abdf02ef8b4b","block_type":"box","text":"prepayment.","page_number":190,"box":{"x":117,"y":878,"width":97,"height":12}},{"id":"ef31cbbe-0349-4c31-9fcc-c56b2b6e7850","block_type":"box","text":"II-96","page_number":190,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"073ebe46-8600-4541-b3c8-ad314dd7db0e","block_type":"box","text":"NM1026U-6004408-190/267","page_number":190,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e1f28c7a-46e4-4884-867d-a22c1faa853f","block_type":"box","text":"Structured Notes.","page_number":191,"box":{"x":117,"y":87,"width":139,"height":10}},{"id":"44e03bbf-3774-4ad9-9506-a180e0cd6a4a","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally","page_number":191,"box":{"x":257,"y":87,"width":621,"height":12}},{"id":"e943a090-dde5-4e73-babe-6fddba0e375d","block_type":"box","text":"privately negotiated debt obligations where the principal and/or interest is determined by reference to","page_number":191,"box":{"x":117,"y":102,"width":753,"height":13}},{"id":"842ddcdb-733e-45e6-972e-333788871957","block_type":"box","text":"the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”).","page_number":191,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"9f1155cc-7512-4c12-b8d2-4774a1e143c5","block_type":"box","text":"Issuers of structured notes generally include corporations and banks. The interest rate or the principal","page_number":191,"box":{"x":117,"y":134,"width":760,"height":12}},{"id":"fa7f2bb5-d11d-490f-8fdc-77316118a03b","block_type":"box","text":"amount payable upon maturity or redemption may increase or decrease, depending upon changes in","page_number":191,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"5faced67-b4b7-4a0b-89e6-6fc5d0b07b99","block_type":"box","text":"the value of the reference measure. The terms of a structured note may provide that, in certain","page_number":191,"box":{"x":116,"y":165,"width":708,"height":12}},{"id":"7b835dec-3a6b-4761-baa3-7025c9e8c42e","block_type":"box","text":"circumstances, no principal is due at maturity and, therefore, may result in a loss of invested capital by","page_number":191,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"a16eecd3-6cf8-4e35-94a8-380f0860298c","block_type":"box","text":"a Fund. The interest and/or principal payments that may be made on a structured product may vary","page_number":191,"box":{"x":116,"y":196,"width":743,"height":12}},{"id":"d81b34d1-a49d-4186-bd30-c645026a7266","block_type":"box","text":"widely, depending on a variety of factors, including the volatility of the reference measure.","page_number":191,"box":{"x":116,"y":211,"width":671,"height":12}},{"id":"d7000355-1658-413f-9955-2b18377542aa","block_type":"box","text":"Structured notes may be positively or negatively indexed, so the appreciation of the reference measure","page_number":191,"box":{"x":116,"y":242,"width":770,"height":12}},{"id":"4399b975-640e-4485-8d98-8427c9df629e","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":191,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"e17a932d-fb1e-42bb-82aa-985d43a5220d","block_type":"box","text":"rate of return on structured notes may be determined by applying a multiplier to the performance or","page_number":191,"box":{"x":117,"y":273,"width":739,"height":12}},{"id":"f356e12f-56d4-4a55-adc6-00b670dab5eb","block_type":"box","text":"differential performance of reference measures. Application of a multiplier involves leverage that will","page_number":191,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"71ac2de2-04e9-45e0-8451-cd8ebfb426a3","block_type":"box","text":"serve to magnify the potential for gain and the risk of loss.","page_number":191,"box":{"x":116,"y":304,"width":435,"height":12}},{"id":"67c0c0e1-6efe-46a7-b522-2112e37588c6","block_type":"box","text":"The purchase of structured notes exposes a Fund to the credit risk of the issuer of the structured","page_number":191,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"63fe9f45-f28a-43ea-a035-632159ab805a","block_type":"box","text":"product. Structured notes may also be more volatile, less liquid, and more difficult to price accurately","page_number":191,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"3584605d-d5fb-48ed-9dfc-42353d8d4c7a","block_type":"box","text":"than less complex securities and instruments or more traditional debt securities. The secondary market","page_number":191,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"9879c086-ecc5-4202-9fca-ada296f08f4e","block_type":"box","text":"for structured notes could be illiquid making them difficult to sell when the Fund determines to sell","page_number":191,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"e98aa682-c195-4eb0-a03c-7d6b7c853a7c","block_type":"box","text":"them. The possible lack of a liquid secondary market for structured notes and the resulting inability of","page_number":191,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"4e32899d-3a50-42e1-a529-8ca62a10e8aa","block_type":"box","text":"the Fund to sell a structured note could expose the Fund to losses and could make structured notes","page_number":191,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"5b1fba3d-b0a0-42f1-b2de-cd1acf4595ad","block_type":"box","text":"more difficult for the Fund to value accurately.","page_number":191,"box":{"x":117,"y":428,"width":344,"height":12}},{"id":"18e80e58-9bb1-461f-a369-569a44c8fa97","block_type":"box","text":"Taxability Risk.","page_number":191,"box":{"x":118,"y":459,"width":119,"height":12}},{"id":"e5b54851-5d44-4a12-b818-21d5b2b9b4bb","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to","page_number":191,"box":{"x":238,"y":459,"width":555,"height":12}},{"id":"7c647908-f382-49b2-bab2-04e9050a222f","block_type":"box","text":"shareholders by investing in tax-exempt or municipal securities in reliance at the time of purchase on","page_number":191,"box":{"x":116,"y":475,"width":753,"height":12}},{"id":"ec0b34a0-6d8f-4645-ba5d-3b7dc88c67d9","block_type":"box","text":"an opinion of bond counsel to the issuer and, in the case of derivative securities, sponsors’ counsel,","page_number":191,"box":{"x":116,"y":490,"width":745,"height":12}},{"id":"82c0bfbd-0c6e-4025-bb0c-75e99869e68b","block_type":"box","text":"that the interest paid on those securities will be excludable from gross income for U.S. federal income","page_number":191,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"28dcf8c7-e7fd-4808-9b3a-abb50fe88c60","block_type":"box","text":"tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income","page_number":191,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"ba56993e-3e07-4eff-8afb-47905eb8e90e","block_type":"box","text":"subsequent to the Fund’s acquisition of the securities. In that event, the IRS may demand that the","page_number":191,"box":{"x":116,"y":537,"width":731,"height":12}},{"id":"ec43d938-6fce-4dcd-ad89-9b8213318dc3","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":191,"box":{"x":117,"y":552,"width":758,"height":12}},{"id":"23691bf5-0751-432e-9626-6dcb12aa378e","block_type":"box","text":"the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or","page_number":191,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"1dbbdcbb-a00b-4ab1-924d-33e6c8049339","block_type":"box","text":"to be paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the","page_number":191,"box":{"x":116,"y":583,"width":724,"height":12}},{"id":"59a34d70-6af2-4a3d-a5a6-585622ecb679","block_type":"box","text":"Fund’s shareholders to increased U.S. federal income tax liabilities. If the interest paid on any","page_number":191,"box":{"x":117,"y":599,"width":699,"height":12}},{"id":"ec23ede9-1e4e-49b4-9568-3cbb8018d595","block_type":"box","text":"tax-exempt or municipal security held by the Fund is subsequently determined to be taxable, the Fund","page_number":191,"box":{"x":116,"y":614,"width":762,"height":12}},{"id":"e2bbb8ea-5075-4419-9288-26b62607a4ff","block_type":"box","text":"will dispose of that security as soon as reasonably practicable. In addition, future laws, regulations,","page_number":191,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"cb87ca80-ffa1-48eb-bfe4-7bff794f2ff0","block_type":"box","text":"rulings or court decisions may cause interest on municipal securities to be subject, directly or indirectly,","page_number":191,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"2e5ddd54-7f5f-4faf-ad79-cd45ff617989","block_type":"box","text":"to U.S. federal income taxation or interest on state municipal securities to be subject to state or local","page_number":191,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"43efc4b6-e7ef-4176-bb44-6b1791fa6bac","block_type":"box","text":"income taxation, or the value of state municipal securities to be subject to state or local intangible","page_number":191,"box":{"x":117,"y":676,"width":721,"height":12}},{"id":"a85fa6ef-6d17-4867-8b69-1eab1bde4da6","block_type":"box","text":"personal property tax, or may otherwise prevent the Fund from realizing the full current benefit of the","page_number":191,"box":{"x":117,"y":692,"width":745,"height":12}},{"id":"fbcdd146-d3ee-4127-9494-6e4f3bb6d78e","block_type":"box","text":"tax-exempt status of such securities. Any such change could also affect the market price of such","page_number":191,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"e3bc29c9-120a-455d-8350-4de0c4a5cf4c","block_type":"box","text":"securities, and thus the value of an investment in the Fund.","page_number":191,"box":{"x":116,"y":723,"width":438,"height":11}},{"id":"9cc8d780-3100-4a9b-8a20-76b5f431352f","block_type":"box","text":"Temporary Defensive Measures.","page_number":191,"box":{"x":118,"y":754,"width":255,"height":12}},{"id":"2f1e60e5-02fc-490b-b324-285b4ce65497","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse","page_number":191,"box":{"x":379,"y":754,"width":503,"height":12}},{"id":"786c1bfa-7079-469c-8eeb-5c61620634f6","block_type":"box","text":"market, economic, political or other conditions, a Fund may depart from its principal investment","page_number":191,"box":{"x":117,"y":769,"width":704,"height":12}},{"id":"24c810a9-480e-4b7a-9b3b-7568b872e81a","block_type":"box","text":"strategies and may invest without limitation in cash, high quality money market instruments, or other","page_number":191,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"2d622556-a3b1-4113-8b71-8e6bee72656b","block_type":"box","text":"short term investments. Certain Funds may also invest in cash and other such instruments pending","page_number":191,"box":{"x":116,"y":800,"width":735,"height":12}},{"id":"3db078c4-39e0-4186-a786-cc4fb2659b7f","block_type":"box","text":"investment or to meet anticipated redemption requests. High quality money market instruments include","page_number":191,"box":{"x":117,"y":816,"width":763,"height":12}},{"id":"195fc99c-6167-409d-bf45-ff73a716abc3","block_type":"box","text":"U.S. Government obligations, U.S. Government agency obligations, dollar denominated obligations of","page_number":191,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"b83f607c-91bc-4051-9de5-83814e4195fc","block_type":"box","text":"foreign issuers, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate","page_number":191,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"621cee05-a134-487c-94fb-2e4870cb56a9","block_type":"box","text":"obligations, commercial paper, repurchase agreements and obligations of supranational organizations.","page_number":191,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"ac16e720-4674-4a9c-bced-de8094744804","block_type":"box","text":"Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":191,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"1b9e06e7-9ee8-4e64-a716-a6dcf92bee35","block_type":"box","text":"II-97","page_number":191,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"02ae91e8-c975-461d-befa-bdd001718ce1","block_type":"box","text":"NM1026U-6004408-191/267","page_number":191,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e8d8617e-0b7c-488f-bbb9-11f39264ca53","block_type":"box","text":"within two years from the date of settlement. Temporary defensive measures may affect a Fund’s","page_number":192,"box":{"x":116,"y":87,"width":727,"height":12}},{"id":"ed642f68-ddf5-4eb9-a19e-82fe070053c0","block_type":"box","text":"ability to achieve its investment objective.","page_number":192,"box":{"x":116,"y":103,"width":312,"height":12}},{"id":"3fda6546-128f-4303-9a32-1eb526a8326f","block_type":"box","text":"U.S. Government Obligations.","page_number":192,"box":{"x":117,"y":134,"width":236,"height":12}},{"id":"c1f35236-4444-4623-a634-b525b035f5bd","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S.","page_number":192,"box":{"x":354,"y":134,"width":510,"height":12}},{"id":"2b3aff52-011f-4fe5-b69f-3aba30e6d45b","block_type":"box","text":"Government and U.S. Government agencies and instrumentalities. Obligations of certain agencies and","page_number":192,"box":{"x":117,"y":149,"width":767,"height":12}},{"id":"0625be85-81ce-4541-989e-912b3d9754ab","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":192,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"e0c1eebb-69a2-4d27-897a-d392abab8ad5","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":192,"box":{"x":116,"y":180,"width":745,"height":12}},{"id":"e527bcf2-cf4b-4136-8812-19cfac335bba","block_type":"box","text":"supported only by the credit of the agency or instrumentality issuing the obligation. No assurance can","page_number":192,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"8bd873b5-46a7-4f73-bba8-90ea3d820c26","block_type":"box","text":"be given that the U.S. Government will provide financial support to U.S. Government-sponsored","page_number":192,"box":{"x":117,"y":211,"width":715,"height":12}},{"id":"c0a96789-4f0f-45ae-9684-635ab99f23b8","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":192,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"bfcf1c1b-1646-4efd-aacb-38d9b9298d32","block_type":"box","text":"be held by trusts that issue participation certificates (such as Treasury income growth receipts and","page_number":192,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"0b2d6328-244e-4f26-a1ff-454e578d57cb","block_type":"box","text":"certificates of accrual on Treasury certificates). These certificates, as well as Treasury receipts and","page_number":192,"box":{"x":116,"y":258,"width":740,"height":12}},{"id":"b254beff-8093-43a3-a79a-356306b397d3","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or","page_number":192,"box":{"x":116,"y":273,"width":759,"height":12}},{"id":"f31807ae-20c2-420c-b73e-d5fdef904407","block_type":"box","text":"the future principal payments on U.S. Government obligations. 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Armory Board. The","page_number":192,"box":{"x":116,"y":459,"width":772,"height":12}},{"id":"1325a72a-7243-4fb7-971a-6d821cfdab4e","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government","page_number":192,"box":{"x":117,"y":475,"width":717,"height":12}},{"id":"01947396-bca8-4bf2-8eff-f8596f50bee3","block_type":"box","text":"agencies and instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae","page_number":192,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"fb2ce514-5332-4bb2-9069-83ebdcaf84da","block_type":"box","text":"and Freddie Mac.","page_number":192,"box":{"x":116,"y":506,"width":135,"height":9}},{"id":"e1fb3cbf-0c57-4d2f-bf94-04b0b2f71fd9","block_type":"box","text":"U.S. Treasury Obligations.","page_number":192,"box":{"x":117,"y":537,"width":194,"height":12}},{"id":"b9ead51d-63d1-4ce9-ac58-ed213edcc38c","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of","page_number":192,"box":{"x":313,"y":537,"width":548,"height":12}},{"id":"df0f3362-ce7d-403d-818a-a111e20dfd9b","block_type":"box","text":"issuance and other characteristics. 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No assurance can be given that the U.S. Government will provide financial support","page_number":192,"box":{"x":117,"y":583,"width":758,"height":12}},{"id":"cd9dfe12-c78a-483f-a1fe-5284cc8429bc","block_type":"box","text":"to its agencies and authorities if it is not obligated by law to do so.","page_number":192,"box":{"x":116,"y":599,"width":493,"height":12}},{"id":"73772810-96ec-4c9f-b272-70b72439e249","block_type":"box","text":"U.S. Treasury Rolls.","page_number":192,"box":{"x":117,"y":630,"width":153,"height":12}},{"id":"a251902f-1f79-45cf-9c7b-000540059237","block_type":"box","text":"Certain Funds may invest in U.S. Treasury","page_number":192,"box":{"x":271,"y":630,"width":320,"height":12}},{"id":"a4e5bc02-c265-488c-908f-ae5bf3b4a452","block_type":"box","text":"rolls. In a U.S. Treasury roll transaction,","page_number":192,"box":{"x":592,"y":630,"width":292,"height":12}},{"id":"c7a88fc0-6a0d-470e-b642-426bb958f64f","block_type":"box","text":"the Fund sells a treasury security to a counterpa","page_number":192,"box":{"x":116,"y":645,"width":350,"height":12}},{"id":"e23a42d6-5a53-4683-9de1-53218b46c063","block_type":"box","text":"rty with a simultaneous agreement to repurchase the","page_number":192,"box":{"x":468,"y":645,"width":387,"height":12}},{"id":"6bff1604-e0e5-4b7b-9e68-e7393560c6ff","block_type":"box","text":"same security at an agreed upon price and future settl","page_number":192,"box":{"x":116,"y":661,"width":392,"height":12}},{"id":"abaddc11-c8db-48b9-bad0-ccdd947dc4c0","block_type":"box","text":"ement date. U.S. Treasury roll transactions may","page_number":192,"box":{"x":510,"y":661,"width":348,"height":12}},{"id":"6e6b4310-74d1-4ec0-9b63-db0c20cb7c1b","block_type":"box","text":"incrementally adjust the average maturity of a Fund’","page_number":192,"box":{"x":117,"y":676,"width":376,"height":12}},{"id":"6ec68258-6d04-4041-bd3a-07855b923f9e","block_type":"box","text":"s portfolio and increase the interest yield on the","page_number":192,"box":{"x":494,"y":676,"width":343,"height":12}},{"id":"29b5d850-8084-4146-b7a7-5556e0f7f294","block_type":"box","text":"Fund’s portfolio by extending the average maturity of the portfolio in a normal yield curve environment.","page_number":192,"box":{"x":117,"y":692,"width":740,"height":12}},{"id":"6803303f-72a0-4fd8-a091-73146ed6f234","block_type":"box","text":"During the period before the settlement","page_number":192,"box":{"x":117,"y":707,"width":284,"height":12}},{"id":"d59e395e-330a-4752-a814-f4079ac8c02f","block_type":"box","text":"date of a U.S. Treasury roll, a","page_number":192,"box":{"x":406,"y":707,"width":214,"height":12}},{"id":"5a155136-79ee-4b81-9186-2c71b20dc026","block_type":"box","text":"Fund continues to earn interest on","page_number":192,"box":{"x":626,"y":707,"width":248,"height":10}},{"id":"42e42bb9-6b40-4725-a508-82fc71a9b645","block_type":"box","text":"the securities it is selling; however, it does not earn in","page_number":192,"box":{"x":116,"y":723,"width":387,"height":12}},{"id":"66df3709-9d39-42ac-83ee-31576c18f3a5","block_type":"box","text":"terest on the securities it is purchasing until after the","page_number":192,"box":{"x":504,"y":723,"width":378,"height":12}},{"id":"1d6e8bad-53f9-486d-8f03-db9c96a3e616","block_type":"box","text":"settlement date. A Fund could suffer an opportunity loss","page_number":192,"box":{"x":116,"y":738,"width":406,"height":12}},{"id":"05a949ec-390f-4967-a008-f4e775c12a47","block_type":"box","text":"if the counterparty to the U.S. Treasury roll","page_number":192,"box":{"x":528,"y":738,"width":308,"height":12}},{"id":"8b874192-78e6-4169-b577-7eb3f622505c","block_type":"box","text":"transaction failed to perform its obligations on the settlement date.","page_number":192,"box":{"x":116,"y":754,"width":478,"height":12}},{"id":"437547f7-e67f-4b5d-ac18-9f71575756a5","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed","page_number":192,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"951dbe86-b6bb-4206-8568-afa485bbbaf1","block_type":"box","text":"upon purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be","page_number":192,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"41dc218c-2b21-4246-96d9-989aa2f8e94a","block_type":"box","text":"deemed to involve leverage. There is no assurance that U.S. Treasury rolls can be successfully","page_number":192,"box":{"x":116,"y":816,"width":709,"height":12}},{"id":"fc257273-fe23-4574-a786-7c7b555a2ece","block_type":"box","text":"employed.","page_number":192,"box":{"x":116,"y":831,"width":82,"height":12}},{"id":"a557e7d2-5f3d-421f-abb4-525b2a4deb7a","block_type":"box","text":"Utility Industries.","page_number":192,"box":{"x":117,"y":862,"width":140,"height":12}},{"id":"5316fd3d-fd48-45d0-b0b7-0a6b031df251","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an","page_number":192,"box":{"x":259,"y":862,"width":572,"height":12}},{"id":"a3026bdf-cd5a-4a02-975d-4230449af4ce","block_type":"box","text":"adequate return on invested capital, difficulty in financing large construction programs during an","page_number":192,"box":{"x":116,"y":878,"width":715,"height":12}},{"id":"c5fd6dfd-9939-4ce6-a8f5-106a9b2e3750","block_type":"box","text":"II-98","page_number":192,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d87ebd95-df5c-4c67-9097-b2c2e04bd165","block_type":"box","text":"NM1026U-6004408-192/267","page_number":192,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dbb72f69-3180-46a7-b49c-cc12d3919677","block_type":"box","text":"inflationary period, restrictions on operations and increased cost and delays attributable to","page_number":193,"box":{"x":117,"y":87,"width":672,"height":12}},{"id":"c61f6ba9-ba81-4c77-9407-0e8dfc427ca7","block_type":"box","text":"environmental considerations and regulation, difficulty in raising capital in adequate amounts on","page_number":193,"box":{"x":116,"y":102,"width":715,"height":13}},{"id":"b74d695f-8d79-46e0-a460-2c3162ab64be","block_type":"box","text":"reasonable terms in periods of high inflation and unsettled capital markets, technological innovations","page_number":193,"box":{"x":117,"y":118,"width":750,"height":12}},{"id":"ad8defc9-4ed9-4fd9-bed9-9e508a55f5c3","block_type":"box","text":"that may render existing plants, equipment or products obsolete, the potential impact of natural or","page_number":193,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"fa4ed4d0-a6cb-4e34-9ed8-6e8e8eda57da","block_type":"box","text":"man-made disasters, increased costs and reduced availability of certain types of fuel, occasional","page_number":193,"box":{"x":117,"y":149,"width":721,"height":12}},{"id":"b630b642-7c8c-4337-94d0-800a545122a5","block_type":"box","text":"reduced availability and high costs of natural gas for resale, the effects of energy conservation, the","page_number":193,"box":{"x":117,"y":165,"width":736,"height":12}},{"id":"bf78db5d-b995-4389-a825-4908faa00587","block_type":"box","text":"effects of a national energy policy and lengthy delays and greatly increased costs and other problems","page_number":193,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"ab63aaa2-ccc6-4184-a7f2-8037ef03cf63","block_type":"box","text":"associated with the design, construction, licensing, regulation and operation of nuclear facilities for","page_number":193,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"e96c7bb4-d41e-49bb-9cc4-444ad3275b5f","block_type":"box","text":"electric generation, including, among other considerations, the problems associated with the use of","page_number":193,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"044a2fde-d853-455c-99f2-598f3807aa69","block_type":"box","text":"radioactive materials and the disposal of radioactive wastes. There are substantial differences among","page_number":193,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"6d8d1a79-aee5-456a-8e4a-9e255a8eb195","block_type":"box","text":"the regulatory practices and policies of various jurisdictions, and any given regulatory agency may","page_number":193,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"ff7c7c77-ccaa-4b0f-a9c2-9c85fc45e42f","block_type":"box","text":"make major shifts in policy from time to time. There is no assurance that regulatory authorities will, in","page_number":193,"box":{"x":117,"y":258,"width":752,"height":12}},{"id":"b8b831c0-a683-47d3-8575-dbe6253a2367","block_type":"box","text":"the future, grant rate increases or that such increases will be adequate to permit the payment of","page_number":193,"box":{"x":116,"y":273,"width":716,"height":12}},{"id":"98ecfabd-6c42-4332-b81c-bee5a59b27d2","block_type":"box","text":"dividends on common stocks issued by a utility company. Additionally, existing and possible future","page_number":193,"box":{"x":116,"y":289,"width":735,"height":12}},{"id":"9a0276a0-f101-4174-8cb9-23d05e3d937d","block_type":"box","text":"regulatory legislation may make it even more difficult for utilities to obtain adequate relief. Certain of the","page_number":193,"box":{"x":117,"y":304,"width":771,"height":12}},{"id":"95b395fa-3c15-434b-bf7b-0f5108586052","block_type":"box","text":"issuers of securities held in the Fund’s portfolio may own or operate nuclear generating facilities.","page_number":193,"box":{"x":117,"y":320,"width":720,"height":12}},{"id":"4fb07ba6-20bb-42d9-91a3-7909828186ba","block_type":"box","text":"Governmental authorities may from time to time review existing policies and impose additional","page_number":193,"box":{"x":117,"y":335,"width":702,"height":12}},{"id":"eded5ca2-00ec-42a6-9128-977aa49dd7f4","block_type":"box","text":"requirements governing the licensing, construction and operation of nuclear power plants. 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Such regulation","page_number":193,"box":{"x":117,"y":506,"width":764,"height":12}},{"id":"24face47-faea-4809-a044-a76a57999700","block_type":"box","text":"is intended to ensure appropriate standards of service and adequate capacity to meet public demand.","page_number":193,"box":{"x":117,"y":521,"width":759,"height":12}},{"id":"ac1f880c-5c98-4038-abdd-c3593f2ee3f9","block_type":"box","text":"Generally, prices are also regulated in the United States and in foreign countries with the intention of","page_number":193,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"f2651a42-2c3a-4b44-a7c1-ef85812c04df","block_type":"box","text":"protecting the public while ensuring that the rate of return earned by utility companies is sufficient to","page_number":193,"box":{"x":117,"y":552,"width":744,"height":12}},{"id":"5312752e-27d5-4b3c-8a68-0f3eb4bebaea","block_type":"box","text":"allow them to attract capital in order to grow and continue to provide appropriate services. There can","page_number":193,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"aa15682f-b4c4-4472-a38c-564489a33eff","block_type":"box","text":"be no assurance that such pricing policies or rates of return will continue in the future.","page_number":193,"box":{"x":117,"y":583,"width":640,"height":12}},{"id":"98424b50-0240-4af4-80d8-73e53f797319","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in","page_number":193,"box":{"x":116,"y":614,"width":738,"height":12}},{"id":"6d2d98aa-5708-4ff3-8858-3d6a60cfe99c","block_type":"box","text":"foreign countries. In recent years, changes in regulation in the United States increasingly have allowed","page_number":193,"box":{"x":116,"y":630,"width":767,"height":12}},{"id":"b80fd110-9df8-4d50-88e4-af0f82fb00ef","block_type":"box","text":"utility companies to provide services and products outside their traditional geographic areas and lines","page_number":193,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"57ff5d03-c005-4a04-8b75-62fe95c88966","block_type":"box","text":"of business, creating new areas of competition within the industries. In some instances, utility","page_number":193,"box":{"x":116,"y":661,"width":691,"height":12}},{"id":"85febf27-dae6-4512-a4bf-001dfdef9b8b","block_type":"box","text":"companies are operating on an unregulated basis. Because of trends toward deregulation and the","page_number":193,"box":{"x":116,"y":676,"width":727,"height":12}},{"id":"ffb7e156-9408-46dd-8c58-02f0d4c4b38d","block_type":"box","text":"evolution of independent power producers as well as new entrants to the field of telecommunications,","page_number":193,"box":{"x":116,"y":692,"width":750,"height":12}},{"id":"686a28d0-26da-430b-aa17-657799f4b336","block_type":"box","text":"non-regulated providers of utility services have become a significant part of their respective industries.","page_number":193,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"abc6b053-9a50-4f47-b796-2d372a1db39b","block_type":"box","text":"The Manager believes that the emergence of competition and deregulation will result in certain utility","page_number":193,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"25e5adf1-a980-480b-bd39-831596b8d2d7","block_type":"box","text":"companies being able to earn more than their traditional regulated rates of return, while others may be","page_number":193,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"1c429d91-d89d-455f-be62-b4dcc0eae83f","block_type":"box","text":"forced to defend their core business from increased competition and may be less profitable. Reduced","page_number":193,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"40043150-cb28-4e41-aa7d-0088b9d39cb7","block_type":"box","text":"profitability, as well as new uses of funds (such as for expansion, operations or stock buybacks) could","page_number":193,"box":{"x":117,"y":769,"width":754,"height":12}},{"id":"fdb4884e-1057-4231-a790-52289954abf8","block_type":"box","text":"result in cuts in dividend payout rates. As deregulation allows utility companies to diversify outside of","page_number":193,"box":{"x":117,"y":785,"width":746,"height":12}},{"id":"6f2409f5-e774-4cda-9727-0860f51daf24","block_type":"box","text":"their original geographic regions and their traditional lines of business, utilities companies may engage","page_number":193,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"c17be731-7ce3-4792-85cb-d15cb743eb65","block_type":"box","text":"in riskier ventures. Therefore, deregulation may eliminate restrictions on the maximum level of profits of","page_number":193,"box":{"x":117,"y":816,"width":767,"height":12}},{"id":"4ee73c29-7d34-4932-8961-7836899ebeb2","block_type":"box","text":"certain utility companies, but may also subject these companies to greater risk of loss. The Manager","page_number":193,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"88b9b00a-6203-4d1a-af81-e35a0b9d7f93","block_type":"box","text":"seeks to take advantage of favorable investment opportunities that may arise from these structural","page_number":193,"box":{"x":116,"y":847,"width":735,"height":12}},{"id":"7fff869a-5515-4cd9-85d4-f34f563a289d","block_type":"box","text":"changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":193,"box":{"x":116,"y":862,"width":747,"height":12}},{"id":"e3d6dd0a-4efc-48d3-80a1-276b28a1c0a3","block_type":"box","text":"II-99","page_number":193,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3dbd727f-3c6a-4ab0-8e0e-adc0e7f361df","block_type":"box","text":"NM1026U-6004408-193/267","page_number":193,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e40967fc-a1fb-41f8-804f-d5c67108b106","block_type":"box","text":"Foreign utility companies are also subject to regulation, although such regulations may or may not be","page_number":194,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"11232b78-ff36-4502-a9f8-f08372607d3f","block_type":"box","text":"comparable to those in the United States. Foreign utility companies may be more heavily regulated by","page_number":194,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"46b80ec5-4696-4292-8117-ae77ca52fa1d","block_type":"box","text":"their respective governments than utilities in the United States and, as in the United States, generally","page_number":194,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"09286744-9a6d-4e3d-9564-f6e840df4bfb","block_type":"box","text":"are required to seek government approval for rate increases. In addition, many foreign utilities use","page_number":194,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"5cf357f8-31ba-4029-97a2-99a3326625b5","block_type":"box","text":"fuels that may cause more pollution than those used in the United States, which may require such","page_number":194,"box":{"x":116,"y":149,"width":731,"height":12}},{"id":"ec0faf74-3e14-4062-9308-0cf700de9d92","block_type":"box","text":"utilities to invest in pollution control equipment to meet any proposed pollution restrictions. Foreign","page_number":194,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"36db86d5-71b1-4cf3-9d1d-f4c23edaf99e","block_type":"box","text":"regulatory systems vary from country to country and may evolve in ways different from regulation in the","page_number":194,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"ec433622-7b28-4627-8fe3-a81421ffa335","block_type":"box","text":"United States.","page_number":194,"box":{"x":117,"y":196,"width":109,"height":9}},{"id":"ba6a6730-d7be-47d6-a7df-4bfadd29f0c0","block_type":"box","text":"A Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities","page_number":194,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"ec77470e-6fb3-45a8-8271-036f19e51db9","block_type":"box","text":"throughout the world. For example, the rapid growth of certain foreign economies will necessitate","page_number":194,"box":{"x":116,"y":242,"width":717,"height":12}},{"id":"5d88a62f-a691-4515-bc6c-ba7c482ebdf7","block_type":"box","text":"expansion of capacity in the utility industries in those countries. Although many foreign utility companies","page_number":194,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"00cabe34-b79b-4401-8c3f-a501f8d15225","block_type":"box","text":"currently are government-owned, thereby limiting current investment opportunities for a Fund, the","page_number":194,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"50fbf33a-2507-4b99-b5c4-9a5b0a80a7a1","block_type":"box","text":"Manager believes that, in order to attract significant capital for growth, foreign governments are likely to","page_number":194,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"b338d61d-a7d1-4aeb-ac77-cf7acaaea93f","block_type":"box","text":"seek global investors through the privatization of their utility industries. Privatization, which refers to the","page_number":194,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"f1169a8d-89fe-4a2d-a1f6-912bcc1698eb","block_type":"box","text":"trend toward investor ownership of assets rather than government ownership, is expected to occur in","page_number":194,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"b4c412f2-003b-4723-bbf7-963f5dbb2649","block_type":"box","text":"newer, faster-growing economies and in mature economies. Of course, there is no assurance that such","page_number":194,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"73d7b035-4a71-4c6c-86bd-54ec7f1f41f6","block_type":"box","text":"favorable developments will occur or that investment opportunities in foreign markets will increase.","page_number":194,"box":{"x":116,"y":351,"width":728,"height":12}},{"id":"435d0d4a-d85c-4393-8afd-b281b29808f3","block_type":"box","text":"The revenues of domestic and foreign utility companies generally reflect the economic growth and","page_number":194,"box":{"x":116,"y":382,"width":732,"height":12}},{"id":"5dbc344a-4cdc-4ea2-94ac-eb0fe1160818","block_type":"box","text":"development in the geographic areas in which they do business. The Manager will take into account","page_number":194,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"38bfe4d4-9d59-4ab7-8598-a61d0da63296","block_type":"box","text":"anticipated economic growth rates and other economic developments when selecting securities of","page_number":194,"box":{"x":116,"y":413,"width":732,"height":12}},{"id":"0cba8087-b8ed-46da-8731-9f6f047173ac","block_type":"box","text":"utility companies.","page_number":194,"box":{"x":117,"y":428,"width":132,"height":12}},{"id":"8388f38b-d110-4888-b348-f18b1ebe3a0f","block_type":"box","text":"Electric.","page_number":194,"box":{"x":116,"y":459,"width":58,"height":10}},{"id":"14b0c2cb-76a8-4ac1-972c-04d04f0ecfa5","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the","page_number":194,"box":{"x":176,"y":459,"width":630,"height":12}},{"id":"fd66ad83-00c4-4007-98f2-a3b5f2d0c327","block_type":"box","text":"generation, transmission and sale of electric energy, although many also provide other energy-related","page_number":194,"box":{"x":116,"y":475,"width":760,"height":12}},{"id":"07b6125f-4d94-48e1-903a-1449ee2450f1","block_type":"box","text":"services. In the past, electric utility companies, in general, have been favorably affected by lower fuel","page_number":194,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"a63646e7-d0d1-49b4-aad0-1c8de58a5bb1","block_type":"box","text":"and financing costs and the full or near completion of major construction programs. In addition, many","page_number":194,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"72227159-d8e0-40de-84ad-11bb60a5e0b5","block_type":"box","text":"of these companies have generated cash flows in excess of current operating expenses and","page_number":194,"box":{"x":116,"y":521,"width":690,"height":12}},{"id":"ab89e07a-3da6-4412-8435-f3f31c2e9c8e","block_type":"box","text":"construction expenditures, permitting some degree of diversification into unregulated businesses.","page_number":194,"box":{"x":116,"y":537,"width":727,"height":12}},{"id":"63472823-e915-4ba8-abaf-aa4226f9c817","block_type":"box","text":"Some electric utilities have also taken advantage of the right to sell power outside of their traditional","page_number":194,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"45c0e31b-c448-4522-b46e-059a126d814b","block_type":"box","text":"geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":194,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"93db24ee-3476-492e-bccb-656a13af9c14","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital","page_number":194,"box":{"x":117,"y":583,"width":714,"height":12}},{"id":"f5f6d2e9-e00e-4513-ab0c-4730d7c5accd","block_type":"box","text":"construction programs, costs associated with compliance with environmental and safety regulations","page_number":194,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"88f975be-81cc-4294-9cac-b076edcb1969","block_type":"box","text":"and changes in the regulatory climate. As interest rates declined, many utilities refinanced high cost","page_number":194,"box":{"x":116,"y":614,"width":744,"height":12}},{"id":"06d156c2-cc58-4c79-96c3-5268063ea11d","block_type":"box","text":"debt and in doing so improved their fixed charges coverage. Regulators, however, lowered allowed","page_number":194,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"6f7758fd-40b9-4980-bf39-dfe82b0b1938","block_type":"box","text":"rates of return as interest rates declined and thereby caused the benefits of the rate declines to be","page_number":194,"box":{"x":117,"y":645,"width":734,"height":12}},{"id":"0ec8e773-4810-40fc-870b-5a30b7e8bf9b","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":194,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"193e6493-f36d-449f-b92d-c0052cb6f5ff","block_type":"box","text":"may not keep pace with the utilities’ increased costs. The construction and operation of nuclear power","page_number":194,"box":{"x":117,"y":676,"width":756,"height":12}},{"id":"75d25d50-0d04-4f9e-9c3a-2f30d09cbe2f","block_type":"box","text":"facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear Regulatory","page_number":194,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"cdbda644-cfc9-49f5-bf45-12908170b0b2","block_type":"box","text":"Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in","page_number":194,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"af6e0345-ce9d-4884-beb5-c39150e94d73","block_type":"box","text":"higher operating costs and higher capital expenditures, with the risk that the regulators may disallow","page_number":194,"box":{"x":117,"y":723,"width":743,"height":12}},{"id":"5cebd38d-b73a-425a-b53b-bcb007211e26","block_type":"box","text":"inclusion of these costs in rate authorizations or the risk that a company may not be permitted to","page_number":194,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"23125af7-b09a-4f11-9525-b4ac5a503918","block_type":"box","text":"operate or complete construction of a facility. In addition, operators of nuclear power plants may be","page_number":194,"box":{"x":116,"y":754,"width":735,"height":12}},{"id":"25dc732c-7967-4e1d-9c47-1cbd48a7fd9a","block_type":"box","text":"subject to significant costs for disposal of nuclear fuel and for decommissioning such plants.","page_number":194,"box":{"x":116,"y":769,"width":681,"height":12}},{"id":"e8df0bf4-0a51-4908-9c10-a5a3233d6f32","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected","page_number":194,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"e284b12a-be79-4797-8a8e-f555c152e1fc","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":194,"box":{"x":116,"y":816,"width":706,"height":12}},{"id":"2efc8780-4382-413e-bc42-5c4e7d628815","block_type":"box","text":"companies that focus more on the generation of electricity may be assigned less favorable ratings as","page_number":194,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"0d95cde4-8b76-476b-aefc-9342880ef530","block_type":"box","text":"this business is expected to be competitive and the least regulated. On the other hand, companies that","page_number":194,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"90818abf-54f5-419d-adc8-a64137c1f11c","block_type":"box","text":"focus on transmission and distribution, which is expected to be the least competitive and the more","page_number":194,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"842c5521-7391-4df8-a321-0865104adf9d","block_type":"box","text":"regulated part of the business, may see higher ratings given the greater predictability of cash flow.","page_number":194,"box":{"x":117,"y":878,"width":732,"height":12}},{"id":"e53c0ee3-95b7-41e5-a7b2-701f288b358a","block_type":"box","text":"II-100","page_number":194,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"3be07114-86ea-450a-88d0-42fa026c8e95","block_type":"box","text":"NM1026U-6004408-194/267","page_number":194,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b2f5af14-839c-4963-8615-f86715078fec","block_type":"box","text":"A number of states are considering or have enacted deregulation proposals. The introduction of","page_number":195,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"86de2edd-a7b2-43a7-9593-58eebc6a278b","block_type":"box","text":"competition into the industry as a result of such deregulation has at times resulted in lower revenue,","page_number":195,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"5cac5c8b-8c4f-4fe5-a5f3-e19d51113724","block_type":"box","text":"lower credit ratings, increased default risk, and lower electric utility security prices. Such increased","page_number":195,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"4ad0f2dc-aa7b-4716-a59d-bfcd4059ea4d","block_type":"box","text":"competition may also cause long-term contracts, which electric utilities previously entered into to buy","page_number":195,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"1569da3e-31d0-40de-8d18-9bab2e0d094d","block_type":"box","text":"power, to become “stranded assets” which have no economic value. Any loss associated with such","page_number":195,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"2fbe3a16-ee64-4b9d-9d18-2969e1a8a539","block_type":"box","text":"contracts must be absorbed by ratepayers and investors. In addition, some electric utilities have","page_number":195,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"c21752df-6929-42c1-b14b-66651e38c0b7","block_type":"box","text":"acquired electric utilities overseas to diversify, enhance earnings and gain experience in operating in a","page_number":195,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"13f6f15d-cbd2-44a9-ad2f-18d809f0fb5d","block_type":"box","text":"deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":195,"box":{"x":116,"y":196,"width":752,"height":12}},{"id":"9bed61fd-aebf-4433-b317-9b1f9159f6fb","block_type":"box","text":"which have burdened the acquirer’s balance sheet. There is no assurance that current deregulation","page_number":195,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"9286c3f3-a7a2-4757-b3f6-c5fd23813396","block_type":"box","text":"proposals will be adopted. However, deregulation in any form could significantly impact the electric","page_number":195,"box":{"x":117,"y":227,"width":736,"height":12}},{"id":"f09cb745-8e75-4a0a-acb6-bff622083800","block_type":"box","text":"utilities industry.","page_number":195,"box":{"x":117,"y":242,"width":123,"height":12}},{"id":"c789ff4c-43a2-46aa-a012-255948ea438d","block_type":"box","text":"Telecommunications.","page_number":195,"box":{"x":118,"y":273,"width":155,"height":10}},{"id":"8a4d435d-8617-480f-b994-65ef0176437b","block_type":"box","text":"The telecommunications industry today includes both traditional telephone","page_number":195,"box":{"x":275,"y":273,"width":561,"height":12}},{"id":"66596fbc-1591-4ade-8c44-c17a4b1cb00a","block_type":"box","text":"companies, with a history of broad market coverage and highly regulated businesses, and cable","page_number":195,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"e630e125-419a-413d-bd63-a8c8b17cfcf4","block_type":"box","text":"companies, which began as small, lightly regulated businesses focused on limited markets. Today","page_number":195,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"8ff5cc47-cfe2-410f-9664-14157f08605e","block_type":"box","text":"these two historically different businesses are converging in an industry that is trending toward larger,","page_number":195,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"472a558f-7243-4b53-8cf1-87ef9351ecfc","block_type":"box","text":"competitive national and international markets with an emphasis on deregulation. Companies that","page_number":195,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"d388c09f-cf16-4bbd-ac22-7b2296db3b89","block_type":"box","text":"distribute telephone services and provide access to the telephone networks still comprise the greatest","page_number":195,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"b88452aa-1605-4d00-bc02-8543e2310c1a","block_type":"box","text":"portion of this segment, but non-regulated activities such as wireless telephone services, paging, data","page_number":195,"box":{"x":117,"y":366,"width":759,"height":12}},{"id":"8f0a9f67-61d1-451d-8882-fd49bd843443","block_type":"box","text":"transmission and processing, equipment retailing, computer software and hardware and internet","page_number":195,"box":{"x":116,"y":382,"width":718,"height":12}},{"id":"d1f922a6-5878-428e-a5aa-6dd3535ab71b","block_type":"box","text":"services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":195,"box":{"x":116,"y":397,"width":759,"height":12}},{"id":"06ce3241-d6fc-42f3-ad65-6878eef5291a","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies.","page_number":195,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"5c5ada38-6049-453f-a19b-eddfbd1e4c83","block_type":"box","text":"The presence of unregulated companies in this industry and the entry of traditional telephone","page_number":195,"box":{"x":116,"y":428,"width":696,"height":12}},{"id":"9660d207-a1a0-41b0-aa85-33c7ac505ca9","block_type":"box","text":"companies into unregulated or less regulated businesses provide significant investment opportunities","page_number":195,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"5c91ebe6-e540-4de8-bfd4-e7b02c4ce661","block_type":"box","text":"with companies that may increase their earnings at faster rates than had been allowed in traditional","page_number":195,"box":{"x":116,"y":459,"width":742,"height":12}},{"id":"7a2621a2-5c20-40ef-a9e4-98a7b8fb182d","block_type":"box","text":"regulated businesses. Still, increasing competition, technological innovations and other structural","page_number":195,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"39718896-fa50-4577-87a5-bfef205d9aa1","block_type":"box","text":"changes could adversely affect the profitability of such utilities and the growth rate of their dividends.","page_number":195,"box":{"x":116,"y":490,"width":750,"height":12}},{"id":"a368b1e3-e26c-4e35-b871-710ea6357e29","block_type":"box","text":"Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":195,"box":{"x":117,"y":506,"width":725,"height":12}},{"id":"bd9c3761-34fb-4694-b0ca-3ea1d02e8803","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility","page_number":195,"box":{"x":116,"y":521,"width":718,"height":12}},{"id":"87da3ca2-efb9-41cc-adf7-04321901a96a","block_type":"box","text":"services to both residential, corporate and governmental customers.","page_number":195,"box":{"x":116,"y":537,"width":511,"height":12}},{"id":"77b92f5f-20c9-47d6-a457-c8f0b6251521","block_type":"box","text":"Gas.","page_number":195,"box":{"x":117,"y":568,"width":33,"height":9}},{"id":"10c41ce1-5a50-42ab-aa04-af79eb438c20","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes.","page_number":195,"box":{"x":151,"y":568,"width":733,"height":12}},{"id":"51f08f8f-8c38-4258-9a14-35dcd46bc7e5","block_type":"box","text":"In the United States, interstate transmission companies are regulated by the Federal Energy","page_number":195,"box":{"x":117,"y":583,"width":689,"height":12}},{"id":"5c56db25-b101-4df1-828f-f32c8d640c98","block_type":"box","text":"Regulatory Commission, which is reducing its regulation of the industry. Many companies have","page_number":195,"box":{"x":117,"y":599,"width":709,"height":12}},{"id":"dbf70043-6fc3-44dc-8b4d-363533ea8831","block_type":"box","text":"diversified into oil and gas exploration and development, making returns more sensitive to energy","page_number":195,"box":{"x":116,"y":614,"width":728,"height":12}},{"id":"58be9d5a-dfb6-4e27-8578-7eee799d062e","block_type":"box","text":"prices. In the recent decade, gas utility companies have been adversely affected by disruptions in the","page_number":195,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"96eb8bf4-eb14-45e2-b123-b3eafbf57590","block_type":"box","text":"oil industry and have also been affected by increased concentration and competition. In the opinion of","page_number":195,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"7c183b6b-1fc6-45ee-b567-d8c563923389","block_type":"box","text":"the Manager, however, environmental considerations could improve the gas industry outlook in the","page_number":195,"box":{"x":116,"y":661,"width":733,"height":12}},{"id":"ca5e5161-1f91-45dd-a031-b649375284f9","block_type":"box","text":"future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":195,"box":{"x":116,"y":676,"width":703,"height":12}},{"id":"b917298f-4f11-4559-bab7-b1e65fd150b9","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for","page_number":195,"box":{"x":117,"y":692,"width":698,"height":12}},{"id":"b45ef262-34f7-43d6-bd1c-42fc19c3fcca","block_type":"box","text":"electricity generation. However, technological or regulatory changes within the industry may delay or","page_number":195,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"140d57a0-4650-42ea-8f44-bfcfb7f56ef0","block_type":"box","text":"prevent this result.","page_number":195,"box":{"x":117,"y":723,"width":135,"height":12}},{"id":"bc40d2f4-ba75-4040-a2ef-756356aea531","block_type":"box","text":"Water.","page_number":195,"box":{"x":118,"y":754,"width":46,"height":9}},{"id":"940609b8-de18-4b8d-b4fb-243baf174253","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United","page_number":195,"box":{"x":170,"y":754,"width":695,"height":12}},{"id":"f823a3ea-3dc9-41e5-ac5b-8b2f8e9bf882","block_type":"box","text":"States and around the world the industry is highly fragmented because most of the supplies are owned","page_number":195,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"907a8919-baf0-4f98-b175-f138113ff938","block_type":"box","text":"by local authorities. Companies in this industry are generally mature and are experiencing little or no","page_number":195,"box":{"x":117,"y":785,"width":743,"height":12}},{"id":"760a57aa-159d-4920-9305-ce4239710d7a","block_type":"box","text":"per capita volume growth. In the opinion of the Manager, there may be opportunities for certain","page_number":195,"box":{"x":117,"y":800,"width":702,"height":12}},{"id":"9a6aad2c-3dab-44e9-95f6-75fed2ff6fec","block_type":"box","text":"companies to acquire other water utility companies and for foreign acquisition of domestic companies.","page_number":195,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"532f675b-ce7f-487e-a1ad-00efdd887943","block_type":"box","text":"The Manager believes that favorable investment opportunities may result from consolidation of this","page_number":195,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"1a95cd60-475f-476b-b679-4b85425e8f40","block_type":"box","text":"segment. As with other utilities, however, increased regulation, increased costs and potential","page_number":195,"box":{"x":116,"y":847,"width":693,"height":12}},{"id":"49b59dae-3266-4547-894f-f6c919ba1156","block_type":"box","text":"disruptions in supply may adversely affect investments in water supply utilities.","page_number":195,"box":{"x":116,"y":862,"width":588,"height":12}},{"id":"e62e00c3-c71e-4a77-9b94-9ad7840bf34f","block_type":"box","text":"II-101","page_number":195,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"ea3d8ef8-22ae-439d-bb0c-8861d4ade79e","block_type":"box","text":"NM1026U-6004408-195/267","page_number":195,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f9558e5-4611-4ac5-8bab-df1f3c2b14e4","block_type":"box","text":"Utility Industries Generally.","page_number":196,"box":{"x":117,"y":87,"width":197,"height":12}},{"id":"b39a4872-aabb-4fea-b268-0cae8e761e73","block_type":"box","text":"There can be no assurance that the positive developments noted above,","page_number":196,"box":{"x":316,"y":87,"width":548,"height":12}},{"id":"1b34fc10-dd8a-47a4-a14f-e53d603c437e","block_type":"box","text":"including those relating to privatization and changing regulation, will occur or that risk factors other than","page_number":196,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"de3881d6-76ef-40fa-9cbf-61817b31c820","block_type":"box","text":"those noted above will not develop in the future.","page_number":196,"box":{"x":116,"y":118,"width":361,"height":12}},{"id":"13657cc7-2964-49c0-88fb-ca26adccf447","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":196,"box":{"x":118,"y":149,"width":643,"height":12}},{"id":"9668fbee-eedd-424f-a3c1-cf97f5ef92aa","block_type":"box","text":"A Fund may","page_number":196,"box":{"x":762,"y":149,"width":100,"height":12}},{"id":"cbd5400d-2ef7-4970-9118-20be3b78eeba","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":196,"box":{"x":117,"y":165,"width":713,"height":12}},{"id":"dc0ed617-a968-4563-92af-5cb3393491af","block_type":"box","text":"purchase or sell securities on a delayed delivery basis or through a forward commitment (including on","page_number":196,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"90795c38-5b8d-4104-a7d1-5696333d29fc","block_type":"box","text":"a TBA (to be announced) basis). These transactions involve the purchase or sale of securities by a","page_number":196,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"eaeae1f0-c260-4768-a099-43f48859bf61","block_type":"box","text":"Fund at an established price with payment and delivery taking place in the future. The Fund enters into","page_number":196,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"802f9547-4a00-46c1-9fa3-16c87f3f922a","block_type":"box","text":"these transactions to obtain what is considered an advantageous price to the Fund at the time of","page_number":196,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"0da1a2e3-8d07-4e7c-8915-309d9f24b3ff","block_type":"box","text":"entering into the transaction.","page_number":196,"box":{"x":116,"y":242,"width":217,"height":12}},{"id":"ef9dea7d-3b27-4116-adbd-93b5ecec1b8a","block_type":"box","text":"Pursuant to recommendations of the Treasury Market Practices Group, which is sponsored by the","page_number":196,"box":{"x":117,"y":273,"width":731,"height":12}},{"id":"58cc83d0-ffd9-4a2a-ad78-be3f7f695ad2","block_type":"box","text":"Federal Reserve Bank of New York, a Fund or its counterparty generally will be required to post","page_number":196,"box":{"x":117,"y":289,"width":714,"height":12}},{"id":"87153af6-2506-4aae-a380-235a565e25d0","block_type":"box","text":"collateral when entering into certain forward-settling transactions, including without limitation TBA","page_number":196,"box":{"x":116,"y":304,"width":726,"height":12}},{"id":"e977d719-9137-4ad7-8447-53ef1af89c66","block_type":"box","text":"transactions. FINRA rules have also been implemented that include mandatory margin requirements","page_number":196,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"76b83ba9-ee1a-4a5c-8999-c6c470ea7ba6","block_type":"box","text":"for the TBA market with limited exceptions. The collateralization of TBA trades is intended to mitigate","page_number":196,"box":{"x":116,"y":335,"width":754,"height":12}},{"id":"70873e26-dce9-4398-ba98-5b95b18363f8","block_type":"box","text":"counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions","page_number":196,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"525af9e3-f9b5-4805-9e7a-d876a6c3fed7","block_type":"box","text":"and impose added operational complexity.","page_number":196,"box":{"x":116,"y":366,"width":320,"height":12}},{"id":"aa3d8dee-8258-4c4a-aef6-f65c3c4393a9","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":196,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"15228a54-fd16-49a7-9aec-fd735e3c1335","block_type":"box","text":"security purchased or sold on a delayed delivery basis or through a forward commitment will be","page_number":196,"box":{"x":116,"y":413,"width":713,"height":12}},{"id":"563813ae-c201-4f56-a484-561f29450e27","block_type":"box","text":"delivered. Also, the value of securities in these transactions on the delivery date may be more or less","page_number":196,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"be972491-2fb9-4916-926c-4298ae9d4ddc","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":196,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"f3af5a25-b7f1-4db5-9d7f-7daaa4c09cfd","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":196,"box":{"x":116,"y":459,"width":757,"height":12}},{"id":"59479cbb-fb84-40a9-8145-27dff4a5277d","block_type":"box","text":"security appreciates above the sale price during the commitment period.","page_number":196,"box":{"x":116,"y":475,"width":542,"height":12}},{"id":"6997e53d-4c90-43e2-8a50-79b8301ff236","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a","page_number":196,"box":{"x":117,"y":506,"width":715,"height":12}},{"id":"7e767690-fa61-4875-b722-300d0a10658d","block_type":"box","text":"commitment after it has been entered into, and may sell securities it has committed to purchase before","page_number":196,"box":{"x":116,"y":521,"width":767,"height":12}},{"id":"9828fea3-1d85-448b-8e79-77393f602aee","block_type":"box","text":"those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize","page_number":196,"box":{"x":116,"y":537,"width":764,"height":12}},{"id":"f4e20806-86a5-470c-9b71-044b45156e5e","block_type":"box","text":"a taxable capital gain or loss.","page_number":196,"box":{"x":116,"y":552,"width":221,"height":12}},{"id":"f065dcb4-7e26-4026-80a7-8c8bbd3f0e6f","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other","page_number":196,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"fad4afde-8f00-4e42-9463-4483b69bf3cb","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":196,"box":{"x":117,"y":599,"width":760,"height":12}},{"id":"16ea372b-cdbc-4033-bffb-3e58dc5500e2","block_type":"box","text":"or missing an opportunity to obtain a price considered to be advantageous.","page_number":196,"box":{"x":116,"y":614,"width":561,"height":12}},{"id":"ffc8101e-97c1-45c6-859a-fe0a21f3e784","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any","page_number":196,"box":{"x":116,"y":645,"width":688,"height":12}},{"id":"3f2cbf1b-5b7f-4efe-8d33-bae3acd6d659","block_type":"box","text":"subsequent fluctuations in their market value, is taken into account when determining the market value","page_number":196,"box":{"x":116,"y":661,"width":762,"height":12}},{"id":"47558c27-4f92-4f17-921b-a72da247ef65","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":196,"box":{"x":116,"y":676,"width":726,"height":12}},{"id":"26776600-6720-4dab-ae00-39ccc9a4058f","block_type":"box","text":"interest on the securities it has committed to purchase until they are paid for and delivered on the","page_number":196,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"c3d95e52-14bd-40cd-983e-cd8d27a77999","block_type":"box","text":"settlement date.","page_number":196,"box":{"x":116,"y":707,"width":118,"height":10}},{"id":"a77b1198-d649-4e7d-b9c6-200944652eef","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":196,"box":{"x":117,"y":738,"width":740,"height":12}},{"id":"95fd625d-3abd-48da-a08a-c40862268801","block_type":"box","text":"settling securities (e.g., firm and standby commitments, including TBA commitments, and dollar rolls)","page_number":196,"box":{"x":116,"y":754,"width":747,"height":12}},{"id":"0388d026-f1d6-4fea-b5b7-8953329fd523","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":196,"box":{"x":116,"y":769,"width":746,"height":12}},{"id":"fe193e9a-207f-45df-871d-29e8d2f03859","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the Fund intends to physically","page_number":196,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"cd10a4d5-3214-4036-99fc-c930a4329e4f","block_type":"box","text":"settle the transaction and the transaction will settle within 35 days of its trade date (the “Delayed","page_number":196,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"aa265925-3457-4cf9-8d63-a3fbe398626e","block_type":"box","text":"Settlement Securities Provision”). If a when-issued, forward-settling or non-standard settlement cycle","page_number":196,"box":{"x":116,"y":816,"width":749,"height":12}},{"id":"cc982419-6452-499b-81d8-45d32fefe7d9","block_type":"box","text":"security does not satisfy the Delayed-Settlement Securities Provision, then it is treated as a Derivatives","page_number":196,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"9cd75672-c876-4f2c-b72a-a380f7833da9","block_type":"box","text":"Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives — Rule 18f-4 under the","page_number":196,"box":{"x":116,"y":847,"width":770,"height":12}},{"id":"6284b5a8-8050-4c61-b497-73251e921ca4","block_type":"box","text":"Investment Company Act” above.","page_number":196,"box":{"x":117,"y":862,"width":252,"height":12}},{"id":"e202daa9-fcc1-4aed-a966-d2935b817b52","block_type":"box","text":"II-102","page_number":196,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"dca304cc-af14-4218-a67a-3d33535f900e","block_type":"box","text":"NM1026U-6004408-196/267","page_number":196,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8f8159cb-f4a0-403d-bef7-908c4a7b3111","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":197,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"8d9817f1-db68-4ae4-8280-f2a932bfa134","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many agreements with","page_number":197,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"bc4ced94-e1ca-420c-86e0-1f7ddc7b6ef6","block_type":"box","text":"respect to when-issued, TBA and forward commitment transactions, terms that delay or restrict the","page_number":197,"box":{"x":117,"y":118,"width":736,"height":12}},{"id":"ab6c2ee0-adae-4538-9a0f-3a76ae6cb96f","block_type":"box","text":"rights of counterparties, such as a Fund, to terminate such agreements, foreclose upon collateral,","page_number":197,"box":{"x":117,"y":134,"width":728,"height":12}},{"id":"8bef5f68-5b61-4452-8e04-86509d7d1f74","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the counterparty and/","page_number":197,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"79ac40c6-f243-4761-83cb-c416846ae264","block_type":"box","text":"or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that","page_number":197,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"f69d6a88-3725-49d6-8a72-839c77368f92","block_type":"box","text":"these requirements, as well as potential additional government regulation and other developments in","page_number":197,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"2dd2c674-3235-47d2-b362-ba413b3dffb5","block_type":"box","text":"the market, could adversely affect a Fund’s ability to terminate existing agreements with respect to","page_number":197,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"a4e9354c-2431-45d7-a8cc-73244244975d","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":197,"box":{"x":116,"y":211,"width":600,"height":12}},{"id":"1677fc31-2ff2-4e65-a032-cff9ae02b241","block_type":"box","text":"Yields and Ratings.","page_number":197,"box":{"x":118,"y":242,"width":152,"height":12}},{"id":"b7384a5f-53f8-45bc-afa5-c4f32cf2111b","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including","page_number":197,"box":{"x":271,"y":242,"width":604,"height":12}},{"id":"3b3f240a-581b-4218-ad8a-44b25cdcc61c","block_type":"box","text":"general market conditions, conditions in the particular market for the obligation, the financial condition","page_number":197,"box":{"x":116,"y":258,"width":759,"height":12}},{"id":"cc1084c2-dbd9-45e9-a43f-c53ffac370a5","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":197,"box":{"x":116,"y":273,"width":738,"height":12}},{"id":"0a3a7d4a-ab91-4752-8e5e-e0fc861d5428","block_type":"box","text":"ratings of Moody’s, Fitch and S&P represent their respective opinions as to the quality of the","page_number":197,"box":{"x":117,"y":289,"width":688,"height":12}},{"id":"1a048fdb-ff90-4911-bb34-b8569a88c746","block_type":"box","text":"obligations they undertake to rate. Ratings, however, are general and are not absolute standards of","page_number":197,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"2a457a31-f584-45ac-9b16-e7e1324f438f","block_type":"box","text":"quality. Consequently, obligations with the same rating, maturity and interest rate may have different","page_number":197,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"e44862de-2e0e-4490-9e0b-96b117bf0822","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":197,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"a39e4ec1-0038-4fa9-bc71-7445bcde40a2","block_type":"box","text":"Manager or sub-adviser will consider such an event in determining whether the Fund should continue","page_number":197,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"b28e8eba-0a8f-43e6-b420-1d186a099d35","block_type":"box","text":"to hold the security.","page_number":197,"box":{"x":116,"y":366,"width":150,"height":12}},{"id":"9266b67b-fc54-4b22-bafd-cc4377d13628","block_type":"box","text":"Zero Coupon Securities.","page_number":197,"box":{"x":116,"y":397,"width":193,"height":12}},{"id":"1e37b471-57f7-4d63-a374-dd1aa3d1789d","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value","page_number":197,"box":{"x":310,"y":397,"width":575,"height":12}},{"id":"ee7f6fb4-1290-4b15-9447-a221edf7089d","block_type":"box","text":"and do not pay interest during the life of the security. The discount approximates the total amount of","page_number":197,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"45fd9b48-3c78-45a7-a828-059f2688db3d","block_type":"box","text":"interest the security will accrue and compound over the period until maturity at a rate of interest","page_number":197,"box":{"x":117,"y":428,"width":711,"height":12}},{"id":"14ae6ca7-7522-49fe-9fc0-b145dec64b0e","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":197,"box":{"x":117,"y":444,"width":741,"height":12}},{"id":"e838e530-f0c8-4151-b07a-eb9a95e743e6","block_type":"box","text":"coupon security is entitled to receive the par value of the security.","page_number":197,"box":{"x":116,"y":459,"width":492,"height":12}},{"id":"2e8cd05c-4f2e-4441-bd1f-f4bf88c1e498","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to","page_number":197,"box":{"x":116,"y":490,"width":740,"height":12}},{"id":"af16ab4c-d3c5-4a9d-bcd1-03ce83f0bf35","block_type":"box","text":"have received income (“phantom income”) annually, notwithstanding that cash may not be received","page_number":197,"box":{"x":117,"y":506,"width":742,"height":12}},{"id":"480df6b3-1780-4be6-9551-f8b064d49f57","block_type":"box","text":"currently. The effect of owning instruments that do not make current interest payments is that a fixed","page_number":197,"box":{"x":116,"y":521,"width":751,"height":12}},{"id":"015b66ee-6b0e-49b2-8220-b6314226789c","block_type":"box","text":"yield is earned not only on the original investment but also, in effect, on all discount accretion during","page_number":197,"box":{"x":116,"y":537,"width":746,"height":12}},{"id":"ad3157fa-a3d0-4023-8ca6-b22063c9e461","block_type":"box","text":"the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of","page_number":197,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"023a4560-05ff-4a14-a24a-c89dc8526a8f","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":197,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"7ce9438f-4330-4901-8da4-cb522c74b56e","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":197,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"7e86cdff-6c3d-49c1-88dd-ba1725d92373","block_type":"box","text":"some of these securities may be subject to substantially greater price fluctuations during periods of","page_number":197,"box":{"x":116,"y":599,"width":739,"height":12}},{"id":"dec675ec-7f44-4e07-a552-640107a13b21","block_type":"box","text":"changing market interest rates than are comparable securities that pay interest currently. Longer term","page_number":197,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"ba5743f9-7b32-46d5-a2a0-7496ab62120a","block_type":"box","text":"zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These","page_number":197,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"95e48f6c-2140-42eb-81d4-fd29338ea8b9","block_type":"box","text":"investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a","page_number":197,"box":{"x":117,"y":645,"width":749,"height":12}},{"id":"acb8cf3d-0968-40d7-bc16-17dd3ebf5e36","block_type":"box","text":"higher rate of return to attract investors who are willing to defer receipt of cash.","page_number":197,"box":{"x":117,"y":661,"width":583,"height":12}},{"id":"a0e4b1a4-4c33-4c84-b56a-d44e386111b5","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting","page_number":197,"box":{"x":116,"y":692,"width":733,"height":12}},{"id":"55beafb3-da64-46c3-9588-7b957d88353a","block_type":"box","text":"purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater","page_number":197,"box":{"x":117,"y":707,"width":720,"height":12}},{"id":"48e02c41-49f9-4fdd-94a3-a50bebaa6ce5","block_type":"box","text":"fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated","page_number":197,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"ab8cd536-45c1-4045-825c-ca45a2f2a439","block_type":"box","text":"securities that pay cash interest at regular intervals.","page_number":197,"box":{"x":116,"y":738,"width":382,"height":12}},{"id":"2bc554d6-fb2d-41af-85f0-788b051fd7b6","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund","page_number":197,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"7a4bf3aa-1be9-4fcd-b3db-4a5990e6cd1f","block_type":"box","text":"is required to distribute income to its shareholders and, consequently, may have to dispose of other,","page_number":197,"box":{"x":117,"y":785,"width":740,"height":12}},{"id":"7eae0fe9-27ac-435f-9ee5-5f32a407a36f","block_type":"box","text":"more liquid portfolio securities under disadvantageous circumstances or may have to leverage itself by","page_number":197,"box":{"x":117,"y":800,"width":760,"height":12}},{"id":"f7be5721-cf44-475f-bd56-bf368cb041b2","block_type":"box","text":"borrowing in order to generate the cash to satisfy these distributions. The required distributions may","page_number":197,"box":{"x":117,"y":816,"width":740,"height":12}},{"id":"ce660aaa-e0b3-4e08-886d-1a713c1f22b2","block_type":"box","text":"result in an increase in a Fund’s exposure to zero coupon securities.","page_number":197,"box":{"x":117,"y":831,"width":511,"height":12}},{"id":"6b2b2279-f00d-4b67-b4e6-c94b996f8dac","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero","page_number":197,"box":{"x":117,"y":862,"width":712,"height":12}},{"id":"40a814dd-f4a0-40da-8cbf-1cd5840d8e99","block_type":"box","text":"coupon securities. During a period of severe market conditions, the market for such securities may","page_number":197,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"2e2debb2-1b0d-4605-875a-f81f6b513dd8","block_type":"box","text":"II-103","page_number":197,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"bb01d8f7-26b6-43cf-8ac5-140091d3709b","block_type":"box","text":"NM1026U-6004408-197/267","page_number":197,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ad0d3b3d-a899-4790-972b-0b5001c0cc6b","block_type":"box","text":"become even less liquid. In addition, as these securities do not pay cash interest, a Fund’s investment","page_number":198,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"a89f9c90-bb9b-42a9-848a-a19197645d42","block_type":"box","text":"exposure to these securities and their risks, including credit risk, will increase during the time these","page_number":198,"box":{"x":116,"y":103,"width":739,"height":12}},{"id":"a0462ceb-9651-4589-9138-1296f0b3c822","block_type":"box","text":"securities are held in the Fund’s portfolio.","page_number":198,"box":{"x":116,"y":118,"width":311,"height":12}},{"id":"65f27398-1e1c-4db2-b1a1-63a401a1cda6","block_type":"box","text":"Suitability. (All Funds)","page_number":198,"box":{"x":117,"y":149,"width":181,"height":12}},{"id":"7eaccc94-aea4-4e94-a11f-9727237e1e43","block_type":"box","text":"The economic benefit of an investment in any Fund depends upon many factors beyond the control of","page_number":198,"box":{"x":116,"y":172,"width":760,"height":12}},{"id":"aa8afe9d-d09c-43da-99c8-cbc2b0ffa3a9","block_type":"box","text":"the Fund, the Manager and its affiliates. Each Fund should be considered a vehicle for diversification","page_number":198,"box":{"x":116,"y":188,"width":753,"height":12}},{"id":"266fd0c3-df2e-40e6-b900-297bfe3c13aa","block_type":"box","text":"and not as a balanced investment program. The suitability for any particular investor of a purchase of","page_number":198,"box":{"x":116,"y":203,"width":755,"height":12}},{"id":"c72047a8-6cd8-4962-87a3-a01dd5cd29a5","block_type":"box","text":"shares in a Fund will depend upon, among other things, such investor’s investment objectives and","page_number":198,"box":{"x":116,"y":219,"width":733,"height":12}},{"id":"9caa0e4f-5829-4929-8e52-153213ca9264","block_type":"box","text":"such investor’s ability to accept the risks associated with investing in securities, including the risk of","page_number":198,"box":{"x":116,"y":234,"width":741,"height":12}},{"id":"5f475f7c-8aa1-4f97-bb96-1639a6c3eb0b","block_type":"box","text":"loss of principal.","page_number":198,"box":{"x":117,"y":250,"width":124,"height":12}},{"id":"461d2569-5fcc-4db0-9bd7-a935dce437c2","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":198,"box":{"x":116,"y":281,"width":293,"height":12}},{"id":"7fddbf92-39c1-4e00-bfb7-38c5d32ef9e3","block_type":"box","text":"See “Investment Restrictions” or “Investment Policies,” as applicable in each Fund’s SAI for the","page_number":198,"box":{"x":116,"y":304,"width":712,"height":12}},{"id":"f05ab316-6673-4d92-bfce-f83197d4bb57","block_type":"box","text":"specific fundamental and non-fundamental investment restrictions adopted by each Fund. In addition to","page_number":198,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"0c994a4c-ef9a-42d5-b5bc-8b78e2c11c0c","block_type":"box","text":"those investment restrictions, each Fund is also subject to the restrictions discussed below.","page_number":198,"box":{"x":116,"y":335,"width":683,"height":12}},{"id":"b4a41bd8-1645-4e3e-887b-13e7649fbe21","block_type":"box","text":"Each Fund’s investments will be limited in order to","page_number":198,"box":{"x":117,"y":366,"width":376,"height":10}},{"id":"9e1db161-e4f2-4e7b-9865-d75924f26ca1","block_type":"box","text":"allow the Fund to qualify as a “regulated investment","page_number":198,"box":{"x":494,"y":366,"width":389,"height":12}},{"id":"f6b3aea7-4d9f-4619-9e3a-282b73c72ed2","block_type":"box","text":"company” for purposes of the Code. See “Dividends and Taxes — Taxes” or “Taxes.” To qualify,","page_number":198,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"ce86053a-41e9-49f0-89ac-f374570b7c6c","block_type":"box","text":"among other requirements, each Fund will limit its investments so that, at the close of each quarter of","page_number":198,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"a07e539a-673d-4dc8-8db4-0da609fad998","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":198,"box":{"x":116,"y":413,"width":741,"height":12}},{"id":"8ef3f203-7017-4efe-af13-163fc839887c","block_type":"box","text":"securities of other regulated investment companies, U.S. Government Securities and other securities,","page_number":198,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"b378b70a-3fbf-4649-af11-d9772449b10f","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":198,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"1e97302d-bfb3-4dcf-8f04-c6983b91f723","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":198,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"c67eb845-fd0b-4e99-aeba-f748113b3d83","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":198,"box":{"x":116,"y":475,"width":718,"height":12}},{"id":"9abdce08-157a-4a74-9fc7-afeafa90193d","block_type":"box","text":"Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":198,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"585ebeb8-7aee-4184-a305-902331bf160d","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":198,"box":{"x":116,"y":506,"width":726,"height":12}},{"id":"450260f7-8f24-48ba-8fac-954d375ba257","block_type":"box","text":"similar trades or businesses or related trades or businesses or in the securities of one or more qualified","page_number":198,"box":{"x":116,"y":521,"width":772,"height":12}},{"id":"e0126ff3-6e25-407e-99d3-f8ab3bb811c8","block_type":"box","text":"publicly traded partnerships (","page_number":198,"box":{"x":117,"y":537,"width":214,"height":12}},{"id":"279c8472-71f5-43a6-a402-a8a48f9e178f","block_type":"box","text":"i.e.","page_number":198,"box":{"x":332,"y":537,"width":21,"height":9}},{"id":"685133c2-10dd-49fc-a1a6-52092a517aed","block_type":"box","text":", partnerships that are traded on an established securities market or","page_number":198,"box":{"x":356,"y":537,"width":507,"height":12}},{"id":"8b9f6c77-47bd-4040-8102-9bf7f1bc252c","block_type":"box","text":"tradable on a secondary market, other than partnerships that derive 90% of their income from interest,","page_number":198,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"b30a2fa1-2dc6-49bc-bc19-e9e0035f001b","block_type":"box","text":"dividends, capital gains and other traditionally permitted mutual fund income). For purposes of this","page_number":198,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"f9c23a1e-e798-4893-bd1e-4ff700c12cd3","block_type":"box","text":"restriction, the Municipal Funds generally will regard each state and each of its political subdivisions,","page_number":198,"box":{"x":117,"y":583,"width":749,"height":12}},{"id":"e8088512-5ae3-49e3-a611-46316b112adb","block_type":"box","text":"agencies or instrumentalities and each multi-state agency of which the state is a member as a","page_number":198,"box":{"x":116,"y":599,"width":703,"height":12}},{"id":"57e97dac-11eb-413e-b1ae-6588be1227ae","block_type":"box","text":"separate issuer. Each public authority that issues securities on behalf of a private entity generally will","page_number":198,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"2d3d21db-25c3-4a45-950b-d26d659c5b01","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":198,"box":{"x":116,"y":630,"width":731,"height":12}},{"id":"dd248619-3e3a-4c9e-a430-1178b025a8d2","block_type":"box","text":"revenues of a non-government entity, then the entity with the ultimate responsibility for the payment of","page_number":198,"box":{"x":117,"y":645,"width":762,"height":12}},{"id":"9dcb3157-3e4d-443b-ab45-d152126ef9e0","block_type":"box","text":"interest and principal may be regarded as the sole issuer.","page_number":198,"box":{"x":117,"y":661,"width":425,"height":12}},{"id":"4416e3a5-8bc2-4bf9-9054-ed18169c571f","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10%","page_number":198,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"1d4e43f3-daff-4bfb-a8c6-ce4a05bf07dd","block_type":"box","text":"and 25% diversification requirements of the Code discussed above and the securities of each foreign","page_number":198,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"aa05a5e0-df18-4a01-9764-18a9e46ff3c8","block_type":"box","text":"government issuer are considered to be obligations of a single issuer. These tax-related limitations","page_number":198,"box":{"x":116,"y":723,"width":732,"height":12}},{"id":"9d1f11fc-04e1-4922-be0f-790756338057","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":198,"box":{"x":117,"y":738,"width":763,"height":12}},{"id":"dfc1b43e-e838-453e-8b80-e45b8f4f58c2","block_type":"box","text":"federal tax requirements. A Fund that is “diversified” under the Investment Company Act must satisfy","page_number":198,"box":{"x":116,"y":754,"width":748,"height":12}},{"id":"38fc2e85-0c35-4e9d-ba75-2261d99eab6b","block_type":"box","text":"the foregoing 5% and 10% requirements with respect to 75% of its total assets.","page_number":198,"box":{"x":116,"y":769,"width":586,"height":12}},{"id":"7cfe3936-a5ee-4ab0-b339-6c9222aeab40","block_type":"box","text":"II-104","page_number":198,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"0283d3ed-7444-4794-80cc-fa0ee1acc245","block_type":"box","text":"NM1026U-6004408-198/267","page_number":198,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1702b074-2ea5-4a7a-bf6f-9d157c26b150","block_type":"box","text":"APPENDIX A","page_number":199,"box":{"x":448,"y":87,"width":108,"height":9}},{"id":"c09b6858-164b-469e-b18d-435f7f2b8c50","block_type":"box","text":"Description of Bond Ratings","page_number":199,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"243bf69c-c4ea-4c67-ad27-b1f93e099aca","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":199,"box":{"x":116,"y":154,"width":722,"height":12}},{"id":"b021516f-1861-4a41-8655-8ef36ae5026b","block_type":"box","text":"agency designated as a nationally recognized statistical rating organization (“NRSRO”) by the","page_number":199,"box":{"x":116,"y":170,"width":700,"height":12}},{"id":"3ccae11f-4b44-48cc-82e4-557063dbe65f","block_type":"box","text":"Securities and Exchange Commission (“SEC”). While NRSROs may from time to time revise such","page_number":199,"box":{"x":116,"y":185,"width":731,"height":12}},{"id":"bae54b23-56a9-40c4-a214-8fd329b188ff","block_type":"box","text":"ratings, they undertake no obligation to do so, and the ratings given to securities at issuance do not","page_number":199,"box":{"x":117,"y":201,"width":741,"height":12}},{"id":"fb5dcdf8-5264-4b83-9d66-f51a0f705101","block_type":"box","text":"necessarily represent ratings which would be given to these securities on a particular subsequent date.","page_number":199,"box":{"x":117,"y":216,"width":769,"height":12}},{"id":"99c3844d-97d8-43da-8f1c-ebc9c901e0db","block_type":"box","text":"NRSROs may rate specific investments (e.g., bonds), issuers (e.g., corporations, governments and","page_number":199,"box":{"x":117,"y":246,"width":740,"height":12}},{"id":"984b13b9-f03e-4d8a-89d6-818bf19844a1","block_type":"box","text":"financial institutions) and/or programs (e.g., commercial paper programs). However, certain types of","page_number":199,"box":{"x":116,"y":261,"width":747,"height":13}},{"id":"c73c25aa-c44f-4c33-80ec-4bb84f3c30f2","block_type":"box","text":"investments may not be rated by NRSROs, such as certain government/sovereign obligations, US","page_number":199,"box":{"x":117,"y":277,"width":732,"height":12}},{"id":"88d3742d-91cb-4ba3-8e3a-5fdd4ae99aab","block_type":"box","text":"agency securities, commercial paper, time deposits at financial institutions, and derivative instruments","page_number":199,"box":{"x":116,"y":292,"width":761,"height":13}},{"id":"7af3a839-90d5-4634-80f5-1d2e9b93ab88","block_type":"box","text":"such as credit default swaps. For these types of investments, as well as US Treasury securities (some","page_number":199,"box":{"x":116,"y":308,"width":764,"height":12}},{"id":"92f0ccc1-af09-4bef-8067-03751c008406","block_type":"box","text":"of which are not rated), where an NRSRO has not rated the specific investment but has rated the","page_number":199,"box":{"x":116,"y":323,"width":725,"height":13}},{"id":"f01a6285-43a1-431e-afcd-ec46f4f5805c","block_type":"box","text":"investment’s issuer, program, financial institution or underlying reference asset, BlackRock Advisors,","page_number":199,"box":{"x":117,"y":339,"width":751,"height":12}},{"id":"dfbde267-1760-48db-b035-ac2a0f1d5010","block_type":"box","text":"LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider the investment","page_number":199,"box":{"x":117,"y":355,"width":766,"height":12}},{"id":"19ed5bdf-9888-4e7c-bb58-8c51488336b8","block_type":"box","text":"to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":199,"box":{"x":116,"y":370,"width":736,"height":12}},{"id":"76d1f943-b3a3-44d7-90f8-9a11eb449303","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings","page_number":199,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"c6cd84c2-6f35-4853-a134-6e75590b9263","block_type":"box","text":"for the same security (e.g., “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider","page_number":199,"box":{"x":116,"y":401,"width":770,"height":12}},{"id":"2b0a634e-bcc5-4521-8d8f-99a835e6e542","block_type":"box","text":"the security to have the highest of the multiple ratings.","page_number":199,"box":{"x":116,"y":417,"width":407,"height":12}},{"id":"e0fa2988-131f-4551-87a3-680d530f2d13","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":199,"box":{"x":117,"y":446,"width":732,"height":13}},{"id":"fdf04cb8-89b1-422a-936e-f47008902d81","block_type":"box","text":"offering. Preliminary prospectuses or term sheets for new issue securities may include an expected","page_number":199,"box":{"x":116,"y":462,"width":742,"height":12}},{"id":"495a52d1-8639-4749-8ec5-19c5d6aca70b","block_type":"box","text":"rating for the security (as determined by the underwriter and/or issuer) or an NRSRO rating for the","page_number":199,"box":{"x":117,"y":477,"width":733,"height":13}},{"id":"ae7f898d-3825-4d34-84f5-60ce36915e0f","block_type":"box","text":"issuer of the security. If applicable, when deciding whether to purchase a new issue security that has","page_number":199,"box":{"x":117,"y":493,"width":752,"height":12}},{"id":"9ce1858c-e5fb-492c-81ad-77089a1ddaa0","block_type":"box","text":"not yet been rated by an NRSRO, BlackRock may attribute an expected rating to the security based","page_number":199,"box":{"x":117,"y":508,"width":745,"height":13}},{"id":"57aa1f05-b3f3-401a-8c03-10559b9013ae","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":199,"box":{"x":116,"y":524,"width":747,"height":12}},{"id":"7016aa99-a224-4edf-b960-9336788395ca","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":199,"box":{"x":116,"y":539,"width":760,"height":13}},{"id":"72e36b7c-23da-4e2c-80f3-fb0413cedc34","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":199,"box":{"x":116,"y":555,"width":767,"height":12}},{"id":"ad80f53c-0a26-487f-be68-85db2ede43d4","block_type":"box","text":"having a similar structure or the same sponsor.","page_number":199,"box":{"x":117,"y":571,"width":353,"height":12}},{"id":"3fccdd6e-4ab9-4f4a-aca0-a4fd2f0be3ce","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit","page_number":199,"box":{"x":116,"y":600,"width":746,"height":12}},{"id":"b14b8342-040b-4878-970b-a67474a6b0e5","block_type":"box","text":"ratings eligibility criteria as part of its index methodology, the fund may purchase any security within the","page_number":199,"box":{"x":117,"y":616,"width":771,"height":12}},{"id":"d39c8f62-9589-4053-8cfa-876a2ad1030c","block_type":"box","text":"index, such security having been determined by the index provider as meeting its credit ratings","page_number":199,"box":{"x":117,"y":632,"width":707,"height":11}},{"id":"7cebdd5f-487a-4797-b377-7330fa1338c5","block_type":"box","text":"eligibility criteria. The credit ratings practices of an index provider may differ from BlackRock’s","page_number":199,"box":{"x":116,"y":647,"width":701,"height":12}},{"id":"6c97eaab-b179-4ae9-a243-5f92aaef53be","block_type":"box","text":"practices, as described above. Further, the fund may invest, directly or indirectly, in securities that are","page_number":199,"box":{"x":117,"y":662,"width":754,"height":12}},{"id":"ff969783-81d8-4c17-a905-b120c5eab3e1","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":199,"box":{"x":117,"y":678,"width":757,"height":12}},{"id":"c8943044-1580-4c33-b40b-f25893fe5a6a","block_type":"box","text":"in its index methodology in various circumstances, including where a security is downgraded but not","page_number":199,"box":{"x":117,"y":694,"width":741,"height":11}},{"id":"5c5f8098-e760-4794-9df3-c98353d73b4c","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":199,"box":{"x":116,"y":709,"width":733,"height":12}},{"id":"388e7554-8bcf-42e6-bd36-b40ca2701caf","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":199,"box":{"x":116,"y":724,"width":734,"height":13}},{"id":"d661192f-7b83-4fdc-a31b-b256ca68e448","block_type":"box","text":"fund.","page_number":199,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"7a64c4b9-b548-4d3a-bcbd-390ead354314","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to","page_number":199,"box":{"x":117,"y":770,"width":757,"height":12}},{"id":"70d7daa3-3845-4fcb-a225-6ac1b0fc4b4e","block_type":"box","text":"pay interest or repay principal which are similar to the risks of lower-rated speculative bonds (although","page_number":199,"box":{"x":117,"y":785,"width":756,"height":12}},{"id":"825f4c6a-836e-483c-8573-d70dad339bca","block_type":"box","text":"BlackRock may deem such unrated securities to be of higher quality). Evaluation of these securities is","page_number":199,"box":{"x":117,"y":801,"width":755,"height":12}},{"id":"ea1ac931-86d2-4bed-aad3-af46f94027ae","block_type":"box","text":"dependent on BlackRock’s judgment, analysis and experience in the evaluation of such securities.","page_number":199,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"9b007698-bef8-4582-ad33-3db9c6ac71f3","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":199,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"a63445bb-e49b-460e-a689-a08403b41129","block_type":"box","text":"effect of recent developments on the issuer’s ability to make interest and principal payments or on the","page_number":199,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"60e7dafc-da7e-4f07-92d9-37f8c60146b2","block_type":"box","text":"likelihood of default.","page_number":199,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"42a8ef4e-7eb4-4cbf-98e3-8ebe0f185ee2","block_type":"box","text":"A-1","page_number":199,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"112aeab5-4ead-4453-96e5-4ab3fe1349a8","block_type":"box","text":"NM1026U-6004408-199/267","page_number":199,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b18f0088-fe1c-4e9e-9f97-7c59b1d1391d","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":200,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"2d4109bb-3b3e-4a05-b568-feb13c3da81d","block_type":"box","text":"Ratings and Fitch. Other terms used to describe such securities include “lower rated bonds,” “non","page_number":200,"box":{"x":117,"y":102,"width":728,"height":13}},{"id":"334ea7c5-d008-40de-b1b4-881e615b4163","block_type":"box","text":"investment grade bonds,” “below investment grade bonds,” and “junk bonds.”","page_number":200,"box":{"x":117,"y":118,"width":577,"height":12}},{"id":"43b8de9e-c820-4d76-b92c-2c756e1a8b08","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":200,"box":{"x":116,"y":148,"width":674,"height":12}},{"id":"4ac6f0b0-9206-4bf9-bef6-38ae563c5dbf","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":200,"box":{"x":116,"y":177,"width":677,"height":12}},{"id":"5d18a952-466b-4ecf-926a-d1fb182fd226","block_type":"box","text":"Credit ratings are assigned on Moody’s global long-term and short-term rating scales and are forward","page_number":200,"box":{"x":117,"y":207,"width":757,"height":12}},{"id":"d81115cf-506d-4cba-bc68-a5d2d5f290b3","block_type":"box","text":"looking opinions of the relative credit risks of financial obligations issued by non-financial corporates,","page_number":200,"box":{"x":117,"y":222,"width":750,"height":13}},{"id":"4153a698-267e-4b35-9690-13483353eb98","block_type":"box","text":"financial institutions, structured finance vehicles, project finance vehicles, and public sector entities.","page_number":200,"box":{"x":116,"y":238,"width":742,"height":12}},{"id":"1cb364a7-988b-485f-84a6-f89348c18a85","block_type":"box","text":"Moody’s defines credit risk as the risk that an entity may not meet its contractual financial obligations","page_number":200,"box":{"x":117,"y":253,"width":751,"height":13}},{"id":"de371a24-2690-4498-b74b-da57466af27f","block_type":"box","text":"as they come due and any estimated financial loss in the event of default or impairment. The","page_number":200,"box":{"x":116,"y":269,"width":692,"height":12}},{"id":"3e40d781-bdaa-4766-8917-f628fec7a301","block_type":"box","text":"contractual financial obligations addressed by Moody’s ratings are those that call for, without regard to","page_number":200,"box":{"x":116,"y":284,"width":763,"height":13}},{"id":"d26bf0d3-4f44-4c99-b207-50198ac0602f","block_type":"box","text":"enforceability, the payment of an ascertainable amount, which may vary based upon standard sources","page_number":200,"box":{"x":116,"y":300,"width":765,"height":12}},{"id":"054fa0f5-e952-4932-ad2b-8a1627e07155","block_type":"box","text":"of variation (e.g., floating interest rates), by an ascertainable date. Moody’s rating addresses the","page_number":200,"box":{"x":116,"y":315,"width":719,"height":13}},{"id":"33682c85-24bd-431a-8d11-9b8683e4534d","block_type":"box","text":"issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s","page_number":200,"box":{"x":117,"y":331,"width":738,"height":12}},{"id":"3da45300-6011-42a5-8469-7d3adda576d9","block_type":"box","text":"ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g.,","page_number":200,"box":{"x":117,"y":346,"width":765,"height":13}},{"id":"52b289d1-6278-4943-9872-919c7b941a80","block_type":"box","text":"equity indexed), absent an express statement to the contrary in a press release accompanying an","page_number":200,"box":{"x":116,"y":362,"width":731,"height":12}},{"id":"dcf13dbf-c589-437a-ba41-f8f92f9fe98d","block_type":"box","text":"initial rating. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven","page_number":200,"box":{"x":117,"y":377,"width":767,"height":13}},{"id":"2dd30bdb-b5c3-4a5b-9c29-cc8869506d32","block_type":"box","text":"months or more and reflect both on the likelihood of a default or impairment on contractual financial","page_number":200,"box":{"x":117,"y":393,"width":741,"height":12}},{"id":"9a01d967-28cd-46dd-94d7-d8e999e98e98","block_type":"box","text":"obligations and the expected financial loss suffered in the event of default or impairment. Short-term","page_number":200,"box":{"x":116,"y":409,"width":747,"height":12}},{"id":"4f597283-85ea-43a9-8666-d5a427bcfdaf","block_type":"box","text":"ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both","page_number":200,"box":{"x":117,"y":424,"width":760,"height":12}},{"id":"105d94e9-32a1-44f0-8dfa-8b2ec35b72b6","block_type":"box","text":"on the likelihood of a default or impairment on contractual financial obligations and the expected","page_number":200,"box":{"x":116,"y":440,"width":717,"height":12}},{"id":"5767f993-ce63-43c1-bf99-6ba97a586fb6","block_type":"box","text":"financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":200,"box":{"x":116,"y":455,"width":755,"height":12}},{"id":"c59f64fc-f181-491b-a06b-3a9ca7e89311","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made","page_number":200,"box":{"x":116,"y":471,"width":761,"height":12}},{"id":"034949db-c509-455b-a20e-dc4446fb5a35","block_type":"box","text":"publicly available although private and unpublished ratings may also be assigned.","page_number":200,"box":{"x":117,"y":486,"width":610,"height":12}},{"id":"9a004f8b-9fe0-4081-9e9f-3d0237ef6881","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial","page_number":200,"box":{"x":117,"y":516,"width":763,"height":12}},{"id":"fa8f200e-239e-4c4e-ac46-f54d41fb3e0e","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to","page_number":200,"box":{"x":116,"y":531,"width":769,"height":12}},{"id":"0f0691f6-82a8-410c-8ec6-11526a462bf6","block_type":"box","text":"all structured finance ratings. The addition of (sf) to structured finance ratings should eliminate any","page_number":200,"box":{"x":116,"y":547,"width":735,"height":12}},{"id":"2c8eeaa2-d7f3-492c-a1b4-496edb599c4b","block_type":"box","text":"presumption that such ratings and fundamental ratings at the same letter grade level will behave the","page_number":200,"box":{"x":117,"y":562,"width":747,"height":12}},{"id":"b7ed4705-a88a-4478-8996-c2e6b03ad414","block_type":"box","text":"same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated","page_number":200,"box":{"x":116,"y":578,"width":751,"height":12}},{"id":"86c0ab96-cff4-43f9-a557-fd27216f81f9","block_type":"box","text":"structured finance and fundamental securities may have different risk characteristics. Through its","page_number":200,"box":{"x":116,"y":593,"width":724,"height":12}},{"id":"dae72621-779d-4138-99fd-99cdb123262e","block_type":"box","text":"current methodologies, however, Moody’s aspires to achieve broad expected equivalence in structured","page_number":200,"box":{"x":116,"y":609,"width":769,"height":12}},{"id":"1fe6e76b-0631-40e6-9357-13ebcfa56b13","block_type":"box","text":"finance and fundamental rating performance when measured over a long period of time.","page_number":200,"box":{"x":116,"y":624,"width":658,"height":12}},{"id":"5b68350f-1513-4f5b-8230-d121cfa780c2","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":200,"box":{"x":117,"y":654,"width":445,"height":12}},{"id":"89a54501-f182-4fc2-a891-97c386be1814","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level","page_number":200,"box":{"x":116,"y":684,"width":756,"height":12}},{"id":"d66cb425-bb9a-41d6-a2ee-be37f88f2615","block_type":"box","text":"of credit risk.","page_number":200,"box":{"x":226,"y":699,"width":93,"height":10}},{"id":"92451f44-2ef3-4e5b-9826-14050e8414a6","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit","page_number":200,"box":{"x":116,"y":722,"width":747,"height":12}},{"id":"18dae6b1-a878-4661-9cf7-3c1e445af7c8","block_type":"box","text":"risk.","page_number":200,"box":{"x":226,"y":738,"width":28,"height":9}},{"id":"c47a78fd-7c12-4363-b96d-7c975fadab0c","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit","page_number":200,"box":{"x":116,"y":761,"width":754,"height":12}},{"id":"daa15de5-710d-4bd6-a8d6-f3510008dd47","block_type":"box","text":"risk.","page_number":200,"box":{"x":226,"y":777,"width":28,"height":9}},{"id":"a067dff7-76b8-4ace-890a-a2149dbf310c","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit","page_number":200,"box":{"x":117,"y":800,"width":741,"height":12}},{"id":"1a78292b-5b68-45e8-8044-68687cb09034","block_type":"box","text":"risk and as such may possess certain speculative characteristics.","page_number":200,"box":{"x":226,"y":815,"width":483,"height":12}},{"id":"013ea1af-5e09-4f4a-b774-f06d816b2fb1","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit","page_number":200,"box":{"x":117,"y":839,"width":750,"height":12}},{"id":"72213937-8bf3-4fa2-a93c-2704dcefc28c","block_type":"box","text":"risk.","page_number":200,"box":{"x":226,"y":854,"width":35,"height":10}},{"id":"980e1056-456f-4f21-b1a0-23fe7480778d","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":200,"box":{"x":117,"y":877,"width":717,"height":12}},{"id":"19d5b4d8-90d7-440a-89e9-924657edc7f7","block_type":"box","text":"A-2","page_number":200,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"fdd4d54b-7957-4eec-b731-81d921ff93bb","block_type":"box","text":"NM1026U-6004408-200/267","page_number":200,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"40312b2a-74b1-408e-b524-560a5e0632a9","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to","page_number":201,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"6444b24d-aa8a-415e-83c0-578779f9e1a8","block_type":"box","text":"very high credit risk.","page_number":201,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"ea41ca41-6e6a-4b0e-b7a8-643d54867212","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with","page_number":201,"box":{"x":117,"y":126,"width":753,"height":12}},{"id":"8f9d9413-9c65-45a1-ad66-acdfde2fd2bc","block_type":"box","text":"some prospect of recovery of principal and interest.","page_number":201,"box":{"x":226,"y":141,"width":386,"height":12}},{"id":"fbd05a8f-9085-48dc-ace7-cd9b97331940","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect","page_number":201,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"ac45fa11-5e2f-48d0-beeb-ba407aee1574","block_type":"box","text":"for recovery of principal or interest.","page_number":201,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"67cee427-a76f-46df-b2e4-35a877265a69","block_type":"box","text":"Note:","page_number":201,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"062a3196-ac12-439d-ae40-f3cdac3d1a23","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa","page_number":201,"box":{"x":156,"y":210,"width":706,"height":12}},{"id":"e239b302-e1c1-43d0-8798-9ff07fa06514","block_type":"box","text":"through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating","page_number":201,"box":{"x":116,"y":225,"width":745,"height":12}},{"id":"c0f11711-988c-4f70-aba8-6d8bd5a56c56","block_type":"box","text":"category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the","page_number":201,"box":{"x":116,"y":241,"width":741,"height":12}},{"id":"b4542d3b-b361-4e3d-a8f2-745287dc7579","block_type":"box","text":"lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of","page_number":201,"box":{"x":117,"y":256,"width":751,"height":12}},{"id":"a4b31af3-720e-4c1d-8d10-feedc8bcca28","block_type":"box","text":"hybrid securities issued by banks, insurers, finance companies, and securities firms.","page_number":201,"box":{"x":117,"y":272,"width":628,"height":12}},{"id":"cdd6495b-9e76-4c37-9171-c5d5ef486ba2","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal","page_number":201,"box":{"x":117,"y":301,"width":737,"height":12}},{"id":"d57ed17c-563f-4049-9613-18ae84978d5e","block_type":"box","text":"payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may","page_number":201,"box":{"x":117,"y":317,"width":765,"height":12}},{"id":"a5553123-2cb9-46af-b05f-d237251cddf6","block_type":"box","text":"also be subject to contractually allowable write-downs of principal that could result in impairment.","page_number":201,"box":{"x":116,"y":332,"width":724,"height":12}},{"id":"336ac7c1-44c5-4be4-b379-fbb98a8cc59f","block_type":"box","text":"Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an","page_number":201,"box":{"x":116,"y":348,"width":744,"height":12}},{"id":"0964354d-597f-493b-840d-9e73db07879e","block_type":"box","text":"expression of the relative credit risk associated with that security.","page_number":201,"box":{"x":116,"y":363,"width":488,"height":12}},{"id":"1f10c53c-859b-4aef-a847-ed10d3f175ce","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":201,"box":{"x":117,"y":393,"width":448,"height":12}},{"id":"e8589019-f9d7-4911-bda7-41c4b635b859","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":201,"box":{"x":117,"y":422,"width":667,"height":13}},{"id":"52781b42-0f31-43d4-a265-096b53039356","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":201,"box":{"x":117,"y":446,"width":653,"height":12}},{"id":"5597b398-9d9c-4b9f-8d37-92e20f13c41d","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":201,"box":{"x":117,"y":469,"width":697,"height":12}},{"id":"7c15e86b-c5b1-4762-8971-14162e110b30","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime","page_number":201,"box":{"x":117,"y":492,"width":741,"height":12}},{"id":"c338db96-962e-433f-bfe8-450d9fc42dff","block_type":"box","text":"rating categories.","page_number":201,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"973111ee-97d7-4a23-8505-0a0bbb28f058","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":201,"box":{"x":117,"y":537,"width":707,"height":12}},{"id":"25fff48b-3edd-4c4b-a374-d3a0a66151dc","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S.","page_number":201,"box":{"x":117,"y":567,"width":681,"height":12}},{"id":"c65f5d51-5224-4e55-91bc-415d11c68ec5","block_type":"box","text":"municipalities and nonprofits. These commercial paper programs may be backed by external letters of","page_number":201,"box":{"x":117,"y":582,"width":761,"height":12}},{"id":"339afd7f-9acd-4191-9fb5-618d51256fba","block_type":"box","text":"credit or liquidity facilities, or by an issuer’s self-liquidity.","page_number":201,"box":{"x":116,"y":598,"width":420,"height":12}},{"id":"df537551-2a16-4579-ac44-6ce99ddfc5a6","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":201,"box":{"x":117,"y":627,"width":765,"height":13}},{"id":"78da6fef-c84f-4732-9195-482773e4b0fe","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales","page_number":201,"box":{"x":117,"y":643,"width":708,"height":12}},{"id":"db6aa789-388f-454e-be84-2256e2c9c2f2","block_type":"box","text":"discussed below.","page_number":201,"box":{"x":116,"y":659,"width":132,"height":9}},{"id":"ac7eab65-ab5f-45c0-9c2c-4eb27436ef2c","block_type":"box","text":"MIG Ratings","page_number":201,"box":{"x":117,"y":688,"width":96,"height":12}},{"id":"22fd6cd1-470c-423d-90e4-68f73bf1a291","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain","page_number":201,"box":{"x":117,"y":718,"width":738,"height":12}},{"id":"cd34fbcb-21d6-4f7b-aa41-3e4b7ec584e1","block_type":"box","text":"other short-term obligations, which typically mature in three years or less. Under certain circumstances,","page_number":201,"box":{"x":116,"y":733,"width":766,"height":12}},{"id":"f8939bda-edac-459a-8857-085a3f6e0214","block_type":"box","text":"Moody’s uses the MIG scale for bond anticipation notes with maturities of up to five years.","page_number":201,"box":{"x":117,"y":749,"width":665,"height":12}},{"id":"30af6348-d2d7-4cfe-a90f-89200c460a3e","block_type":"box","text":"MIG Scale","page_number":201,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"d88d4da5-215e-4433-9115-33bb7046adaf","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by","page_number":201,"box":{"x":117,"y":808,"width":722,"height":12}},{"id":"7c094ac3-6fcb-451a-a642-42907b1321d8","block_type":"box","text":"established cash flows, highly reliable liquidity support, or demonstrated broad-based","page_number":201,"box":{"x":226,"y":823,"width":631,"height":12}},{"id":"1068645b-5aad-44f9-9d09-2070059aa125","block_type":"box","text":"access to the market for refinancing.","page_number":201,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"a7409ded-2217-4e90-9c6d-f0a8ea158b81","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although","page_number":201,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"991d59c4-c419-4a37-a60a-070a40c18c44","block_type":"box","text":"not as large as in the preceding group.","page_number":201,"box":{"x":226,"y":878,"width":291,"height":12}},{"id":"49381d29-643b-4bd2-9774-26216b4d8c99","block_type":"box","text":"A-3","page_number":201,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"b961db2e-9ecf-4638-806f-d77adcb39816","block_type":"box","text":"NM1026U-6004408-201/267","page_number":201,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9a451c97-5fac-40f1-8b8e-716f401ed5b3","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection","page_number":202,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"9ef14ba9-1d2b-4e6f-b54c-fc962968e684","block_type":"box","text":"may be narrow, and market access for refinancing is likely to be less well-established.","page_number":202,"box":{"x":226,"y":102,"width":642,"height":13}},{"id":"029dc077-3f95-4e17-a5ba-3770a5255762","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this","page_number":202,"box":{"x":116,"y":126,"width":723,"height":12}},{"id":"ddd60ee6-4384-4745-9dcf-f047581f546e","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":202,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"5a458d49-9399-4523-9b15-59e130cec431","block_type":"box","text":"VMIG Ratings","page_number":202,"box":{"x":116,"y":168,"width":114,"height":12}},{"id":"58f7cbb3-7d1b-4547-a314-675527a33be0","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The","page_number":202,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"e3033913-b7ac-4966-80d0-64157b4560b5","block_type":"box","text":"components are a long-term rating and a short-term payment obligation rating. The long-term rating","page_number":202,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"f974c5c3-c7fe-4e06-99d4-da45c2ad30e2","block_type":"box","text":"addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term","page_number":202,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"d03a2422-4df2-4a40-a93c-ac9b137d0333","block_type":"box","text":"payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any","page_number":202,"box":{"x":117,"y":242,"width":713,"height":12}},{"id":"5ac7402f-65c3-46c2-9f7c-737789880cc5","block_type":"box","text":"purchase-price payment obligation resulting from optional tenders (“on demand”) and/or mandatory","page_number":202,"box":{"x":117,"y":258,"width":740,"height":12}},{"id":"8ca9ce62-e596-4224-b490-576d12bee79b","block_type":"box","text":"tenders of the VRDO. The short-term demand obligation rating uses the VMIG scale. VMIG ratings with","page_number":202,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"7a3c12ff-4ac2-4179-8a77-b0ec14f0120d","block_type":"box","text":"liquidity support use as an input the short-term Counterparty Risk Assessment of the support provider,","page_number":202,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"85125355-2c35-4d32-93c1-09932cc1ca8f","block_type":"box","text":"or the long-term rating of the underlying obligor in the absence of third party liquidity support.","page_number":202,"box":{"x":116,"y":304,"width":693,"height":12}},{"id":"3635c38e-0c83-44a6-9e13-b46c82c114df","block_type":"box","text":"Transitions of VMIG ratings of demand obligations with conditional liquidity support differ from","page_number":202,"box":{"x":116,"y":320,"width":699,"height":12}},{"id":"ccd8bf9b-d203-4bfc-98d6-e9b4a50951c3","block_type":"box","text":"transitions on the Prime scale to reflect the risk that external liquidity support will terminate if the","page_number":202,"box":{"x":116,"y":335,"width":717,"height":12}},{"id":"0663740a-51b7-4888-baf0-bc6b12eb5ed4","block_type":"box","text":"issuer’s long-term rating drops below investment grade.","page_number":202,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"e3ff81ec-7b38-4b22-b3a1-a4326b741bc1","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand","page_number":202,"box":{"x":117,"y":378,"width":771,"height":12}},{"id":"35ed4c7f-f1c9-40a1-9322-7e7f143a4fdf","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":202,"box":{"x":116,"y":393,"width":753,"height":12}},{"id":"9b786911-e7f8-41da-95ae-7363c00d3f98","block_type":"box","text":"but the purchase price is payable only with remarketing proceeds, the short-term demand obligation","page_number":202,"box":{"x":117,"y":409,"width":745,"height":12}},{"id":"a1b88eda-ef10-4116-9bfa-86e6079dcd86","block_type":"box","text":"rating is “NR”.","page_number":202,"box":{"x":117,"y":424,"width":107,"height":12}},{"id":"feabe9f4-392a-4b8b-a8df-2da340d9a999","block_type":"box","text":"Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that","page_number":202,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"cb799657-2b2d-4596-bded-275f7e8f4356","block_type":"box","text":"reflects Moody’s view of the relative likelihood of default and loss. In these cases, liquidity assessment","page_number":202,"box":{"x":117,"y":467,"width":763,"height":12}},{"id":"222f87e9-0488-4548-a635-e520156f1923","block_type":"box","text":"is based on the liquidity of the corporate obligor.","page_number":202,"box":{"x":117,"y":482,"width":361,"height":12}},{"id":"93a5870f-0673-4265-b887-0130aa7af3b2","block_type":"box","text":"VMIG Scale","page_number":202,"box":{"x":116,"y":509,"width":94,"height":10}},{"id":"5dbb72df-5770-45ca-ad1a-41f216bdf58d","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the","page_number":202,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"6940311f-dfa8-4894-ac93-388015d17c6f","block_type":"box","text":"superior short-term credit strength of the liquidity provider and structural and legal","page_number":202,"box":{"x":226,"y":552,"width":610,"height":12}},{"id":"4c0a7685-cd9d-4bb4-9ecc-4520dd88765d","block_type":"box","text":"protections.","page_number":202,"box":{"x":226,"y":568,"width":91,"height":12}},{"id":"c6394835-1696-4acc-a059-82b843de7347","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong","page_number":202,"box":{"x":116,"y":591,"width":766,"height":12}},{"id":"f6010de9-0998-414a-bd45-6d24e08f6d41","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections.","page_number":202,"box":{"x":226,"y":606,"width":636,"height":12}},{"id":"0b2b2354-1921-4d1a-a7fc-86410e190196","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by","page_number":202,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"176ef2f6-3d78-4341-b6ba-3fc940817c9c","block_type":"box","text":"the satisfactory short-term credit strength of the liquidity provider and structural and","page_number":202,"box":{"x":225,"y":645,"width":624,"height":12}},{"id":"320ef97e-e5b8-49c5-9520-03cd873c39a3","block_type":"box","text":"legal protections.","page_number":202,"box":{"x":226,"y":661,"width":125,"height":12}},{"id":"99e29983-1736-4b6c-8cee-a45e01a6db2c","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this","page_number":202,"box":{"x":116,"y":684,"width":762,"height":12}},{"id":"0f9e30c3-0932-4f5d-9dba-63012060c1b0","block_type":"box","text":"category may be supported by a liquidity provider that does not have a sufficiently","page_number":202,"box":{"x":226,"y":699,"width":606,"height":13}},{"id":"c865116a-71c2-487d-82ad-93256183e556","block_type":"box","text":"strong short-term rating or may lack the structural or legal protections.","page_number":202,"box":{"x":226,"y":715,"width":517,"height":12}},{"id":"c03d969a-a8a9-45e3-b2c3-140d4ff3268d","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":202,"box":{"x":117,"y":742,"width":753,"height":12}},{"id":"4ca1fb1e-357e-46e4-a529-772963021e54","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with","page_number":202,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"f28ed97f-40a6-4ce6-b037-03bb0877e1a6","block_type":"box","text":"respect to a specific financial obligation, a specific class of financial obligations, or a specific financial","page_number":202,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"43a511b9-5f8c-47ef-9dc6-378098a7e8ca","block_type":"box","text":"program (including ratings on medium-term note programs and commercial paper programs). It takes","page_number":202,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"d6f6d8ce-a02d-4352-9206-2019cdf9b67e","block_type":"box","text":"into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement","page_number":202,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"7e8e731b-7f0c-4df5-a65f-f36dff945215","block_type":"box","text":"on the obligation and takes into account the currency in which the obligation is denominated. The","page_number":202,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"ea8f1753-7e5e-4301-8528-32378ad1b9e4","block_type":"box","text":"opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments","page_number":202,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"1efc4898-a2d7-4fe6-b94f-7a802a811357","block_type":"box","text":"as they come due, and this opinion may assess terms, such as collateral security and subordination,","page_number":202,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"279aacfc-7db9-4c28-9b70-66d7c61a58f4","block_type":"box","text":"which could affect ultimate payment in the event of default.","page_number":202,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"91be3c02-c033-4bcc-8d35-1a6214ade7a7","block_type":"box","text":"A-4","page_number":202,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"619b7474-c60f-4862-98d5-682703ac7e45","block_type":"box","text":"NM1026U-6004408-202/267","page_number":202,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8cf256d7-39fc-4f42-a325-1b7b43cc65ad","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally","page_number":203,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"6832fabc-d901-490a-837a-956ce111e7c2","block_type":"box","text":"assigned to those obligations considered short-term in the relevant market, typically with an original","page_number":203,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"d6cb8be7-3610-452a-aaa4-63db7a2eb157","block_type":"box","text":"maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the","page_number":203,"box":{"x":117,"y":118,"width":708,"height":12}},{"id":"4d7362d1-2baf-4b82-a167-5ccad1fe7667","block_type":"box","text":"creditworthiness of an obligor with respect to put features on long-term obligations. S&P would typically","page_number":203,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"82853ec9-f35a-429f-b6ad-099e0baa1b05","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":203,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"80a1b262-a0de-47d2-8a94-9a30d27ad7ef","block_type":"box","text":"However, the ratings S&P assigns to certain instruments may diverge from these guidelines based on","page_number":203,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"63bbe03d-88c3-44de-9ce3-1387e501f265","block_type":"box","text":"market practices.","page_number":203,"box":{"x":117,"y":180,"width":132,"height":12}},{"id":"0204af45-74e1-4aff-9237-b7d26b3076bf","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":203,"box":{"x":117,"y":208,"width":750,"height":12}},{"id":"fef861c8-3be8-4112-9aa8-4a23142f7446","block_type":"box","text":"• The likelihood of payment — the capacity and willingness of the obligor to meet its financial","page_number":203,"box":{"x":117,"y":237,"width":714,"height":12}},{"id":"9fe0af23-80e8-4018-9776-8586c9ded9b5","block_type":"box","text":"commitments on an obligation in accordance with the terms of the obligation;","page_number":203,"box":{"x":150,"y":252,"width":575,"height":12}},{"id":"3764d819-59d1-4ff4-b3f0-bf3cb0e016b2","block_type":"box","text":"• The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":203,"box":{"x":117,"y":274,"width":691,"height":12}},{"id":"708487d1-dab0-4ab0-ad7f-d148463b154e","block_type":"box","text":"• The protection afforded by, and relative position of, the financial obligation in the event of a","page_number":203,"box":{"x":117,"y":296,"width":712,"height":12}},{"id":"3f41d41d-55ca-4f42-8e89-f6127b2b557d","block_type":"box","text":"bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws","page_number":203,"box":{"x":150,"y":312,"width":704,"height":12}},{"id":"a53318cc-2435-492a-be44-0a95a5be25a6","block_type":"box","text":"affecting creditors’ rights.","page_number":203,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"9a47e8d6-df83-4049-8419-9eb8536585f3","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority","page_number":203,"box":{"x":116,"y":355,"width":772,"height":13}},{"id":"0e2a27df-7f67-41cb-b336-9df437dc7502","block_type":"box","text":"or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior","page_number":203,"box":{"x":116,"y":371,"width":728,"height":12}},{"id":"fc7af249-3991-4a68-98e7-b803bcaf4fb3","block_type":"box","text":"obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply","page_number":203,"box":{"x":116,"y":386,"width":729,"height":13}},{"id":"31626673-b377-4382-8c3e-7a839adb93dc","block_type":"box","text":"when an entity has both senior and subordinated obligations, secured and unsecured obligations, or","page_number":203,"box":{"x":116,"y":402,"width":747,"height":12}},{"id":"759722ef-9548-4b22-8036-27a4dd086658","block_type":"box","text":"operating company and holding company obligations.)","page_number":203,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"5a971d5a-bed4-4628-b531-e20f885288d0","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":203,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"c9a1427b-db76-4a08-9240-f75cb96e5d07","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity","page_number":203,"box":{"x":116,"y":474,"width":770,"height":12}},{"id":"36de14e7-d010-49ec-b728-33fd5ad0cd11","block_type":"box","text":"to meet its financial commitments on the obligation is extremely strong.","page_number":203,"box":{"x":225,"y":490,"width":533,"height":12}},{"id":"d4219e62-2344-4cc4-bf1a-8e5674974258","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree.","page_number":203,"box":{"x":116,"y":513,"width":768,"height":12}},{"id":"497769a0-ce8f-4c00-a5be-110e2fd21b88","block_type":"box","text":"The obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":203,"box":{"x":225,"y":528,"width":659,"height":13}},{"id":"51a54dc0-669f-4c99-8b1f-e218647cc289","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes","page_number":203,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"41eac6bd-977d-4301-80c8-69ccd44f953c","block_type":"box","text":"in circumstances and economic conditions than obligations in higher-rated categories.","page_number":203,"box":{"x":226,"y":567,"width":642,"height":12}},{"id":"7343a12d-af92-4602-883c-5ffea71c784b","block_type":"box","text":"However, the obligor’s capacity to meet its financial commitments on the obligation is","page_number":203,"box":{"x":226,"y":583,"width":635,"height":12}},{"id":"29e12975-1a6c-446f-9799-5847a0bc4f0e","block_type":"box","text":"still strong.","page_number":203,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"af2a9662-bfe8-43d7-a6c1-cafee6ae6728","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse","page_number":203,"box":{"x":117,"y":621,"width":749,"height":13}},{"id":"5872cc83-cf79-423a-b8f7-e6b20c467f6b","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken the obligor’s","page_number":203,"box":{"x":226,"y":637,"width":652,"height":12}},{"id":"9669b94a-43a6-4de0-9d22-dcda5b5e187e","block_type":"box","text":"capacity to meet its financial commitments on the obligation.","page_number":203,"box":{"x":226,"y":652,"width":452,"height":13}},{"id":"9ee218bc-eb51-4e29-a412-67f1c50281d0","block_type":"box","text":"BB, B,","page_number":203,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"02774e90-3695-499a-a2d5-2381c2f23fc6","block_type":"box","text":"CCC, CC,","page_number":203,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"f41cbd1e-bd03-4d85-8b57-15f537e99265","block_type":"box","text":"and C","page_number":203,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"87accec2-0762-4974-bab2-986424edc1d1","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant","page_number":203,"box":{"x":226,"y":676,"width":602,"height":12}},{"id":"c1a47e61-dfff-45eb-a43f-9ae7f9feecc0","block_type":"box","text":"speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the","page_number":203,"box":{"x":226,"y":691,"width":624,"height":12}},{"id":"a9115d40-aec3-48c9-9916-dacc1dfdfe25","block_type":"box","text":"highest. While such obligations will likely have some quality and protective","page_number":203,"box":{"x":226,"y":707,"width":550,"height":12}},{"id":"979bf951-1564-43c8-a863-55decd594db8","block_type":"box","text":"characteristics, these may be outweighed by large uncertainties or major exposure to","page_number":203,"box":{"x":226,"y":722,"width":631,"height":12}},{"id":"71585df5-9203-4de4-916d-33434f076c12","block_type":"box","text":"adverse conditions.","page_number":203,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"f6ce2c37-ba54-4623-9b8c-e8e6e3ea4e11","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues.","page_number":203,"box":{"x":117,"y":761,"width":758,"height":12}},{"id":"2e7d1b4e-fe52-4e36-9771-08bff6938ecb","block_type":"box","text":"However, it faces major ongoing uncertainties or exposure to adverse business,","page_number":203,"box":{"x":226,"y":776,"width":591,"height":13}},{"id":"45131ef7-8d99-4870-a61d-bb1efc92b21a","block_type":"box","text":"financial, or economic conditions that could lead to the obligor’s inadequate capacity to","page_number":203,"box":{"x":225,"y":792,"width":644,"height":12}},{"id":"30c0a64c-6ff0-4b69-b984-d92f8c88090b","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":203,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"0239b84c-fed8-4c62-b24c-245a1e3febe4","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but","page_number":203,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"10aa668c-b009-4dcb-8e9f-2f0f387d9ff4","block_type":"box","text":"the obligor currently has the capacity to meet its financial commitments on the","page_number":203,"box":{"x":225,"y":846,"width":584,"height":12}},{"id":"2345df27-374f-4470-b9ad-fa121cdc1724","block_type":"box","text":"obligation. Adverse business, financial, or economic conditions will likely impair the","page_number":203,"box":{"x":226,"y":862,"width":619,"height":12}},{"id":"a3391df9-ffb6-498b-86ee-11718813a812","block_type":"box","text":"obligor’s capacity or willingness to meet its financial commitments on the obligation.","page_number":203,"box":{"x":226,"y":877,"width":625,"height":12}},{"id":"614ef59d-db9e-4a2d-8ef1-c53486fac358","block_type":"box","text":"A-5","page_number":203,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"7f595874-76ba-42cc-a93d-28acad92ba59","block_type":"box","text":"NM1026U-6004408-203/267","page_number":203,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c585c804-705e-4df1-9ca6-0fd6b5aac75b","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon","page_number":204,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"70fe27c6-7adf-4a6c-b8e3-2e5e3b2a217a","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its","page_number":204,"box":{"x":225,"y":102,"width":601,"height":13}},{"id":"08c44058-6de8-487a-8c63-2832f7e39300","block_type":"box","text":"financial commitments on the obligation. In the event of adverse business, financial, or","page_number":204,"box":{"x":225,"y":118,"width":647,"height":12}},{"id":"2a426964-9dd2-4db5-a03c-58680162ecf2","block_type":"box","text":"economic conditions, the obligor is not likely to have the capacity to meet its financial","page_number":204,"box":{"x":226,"y":134,"width":634,"height":12}},{"id":"48a85e67-872c-40ec-b97e-7f0b07e6d5ad","block_type":"box","text":"commitments on the obligation.","page_number":204,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"6bea9b7a-42ee-4ea5-9e52-15bf05ee805b","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is","page_number":204,"box":{"x":117,"y":172,"width":761,"height":12}},{"id":"79834d16-fecb-4e36-b9ab-6732fe1361c0","block_type":"box","text":"used when a default has not yet occurred but S&P expects default to be a virtual","page_number":204,"box":{"x":226,"y":188,"width":602,"height":12}},{"id":"6b554949-0a7b-4ae2-8da1-0d9a65f4f024","block_type":"box","text":"certainty, regardless of the anticipated time to default.","page_number":204,"box":{"x":226,"y":203,"width":404,"height":12}},{"id":"7f04ea77-8242-4271-b0ed-0581ae7ee520","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is","page_number":204,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"6c999901-0285-47e6-87b7-3166101c996e","block_type":"box","text":"expected to have lower relative seniority or lower ultimate recovery compared with","page_number":204,"box":{"x":226,"y":242,"width":615,"height":12}},{"id":"7d901c5c-0953-4914-ab1e-8c290e62f188","block_type":"box","text":"obligations that are rated higher.","page_number":204,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"6c3e9065-8681-4a28-925d-a12a38bd690d","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":204,"box":{"x":117,"y":281,"width":751,"height":12}},{"id":"18860b91-736b-482e-8252-3af3435b808c","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are","page_number":204,"box":{"x":226,"y":296,"width":650,"height":12}},{"id":"779e22fd-7712-43cb-90fb-ec825331b8af","block_type":"box","text":"not made on the date due, unless S&P believes that such payments will be made within","page_number":204,"box":{"x":226,"y":312,"width":655,"height":12}},{"id":"cdc0dcb3-8cd3-4078-a19f-ba955c49c14d","block_type":"box","text":"five business days in the absence of a stated grace period or within the earlier of the","page_number":204,"box":{"x":225,"y":327,"width":632,"height":12}},{"id":"77f10f26-5f19-4caa-b63e-1f24d3d7d967","block_type":"box","text":"stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing","page_number":204,"box":{"x":226,"y":343,"width":647,"height":12}},{"id":"62ea42c6-182f-497e-ab89-40984aacc69e","block_type":"box","text":"of a bankruptcy petition or the taking of similar action and where default on an obligation","page_number":204,"box":{"x":226,"y":358,"width":659,"height":12}},{"id":"42b9d42e-8b6d-4b28-84d9-deb81e28c899","block_type":"box","text":"is a virtual certainty, for example due to automatic stay provisions. A rating on an","page_number":204,"box":{"x":226,"y":374,"width":605,"height":12}},{"id":"f6a5f2cd-1326-480b-b35b-239cf3d2a88d","block_type":"box","text":"obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":204,"box":{"x":226,"y":389,"width":555,"height":12}},{"id":"06091d96-9105-4364-becb-5605185cf695","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":204,"box":{"x":143,"y":420,"width":705,"height":9}},{"id":"f81495ee-6a4e-43cc-86d3-b556eb17462a","block_type":"box","text":"within the rating categories.","page_number":204,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"ccd1e8f2-1469-43a1-b7d8-f8c9c417a0ab","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":204,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"064d4374-1313-44ac-8f93-b16118b4d8c2","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":204,"box":{"x":116,"y":493,"width":765,"height":12}},{"id":"c2539398-30e4-48c7-902d-b232ee0c5068","block_type":"box","text":"capacity to meet its financial commitments on the obligation is strong. Within this","page_number":204,"box":{"x":226,"y":508,"width":603,"height":12}},{"id":"2e3388dc-bdf1-4b15-9bb8-9fa5b58948ff","block_type":"box","text":"category, certain obligations are designated with a plus sign (+). This indicates that the","page_number":204,"box":{"x":226,"y":524,"width":648,"height":12}},{"id":"633766ce-759c-41f6-9bac-75bc4dc88ed5","block_type":"box","text":"obligor’s capacity to meet its financial commitments on these obligations is extremely","page_number":204,"box":{"x":226,"y":539,"width":635,"height":12}},{"id":"7caf7da9-81b5-4ee4-834c-178fe3f6bac0","block_type":"box","text":"strong.","page_number":204,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"8200d67e-7c1e-442d-a672-3c19dc2c33ca","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects","page_number":204,"box":{"x":116,"y":578,"width":760,"height":12}},{"id":"fad71671-e6c2-45fa-86e4-b4ce8fde9515","block_type":"box","text":"of changes in circumstances and economic conditions than obligations in higher rating","page_number":204,"box":{"x":226,"y":593,"width":644,"height":13}},{"id":"a6abfc83-ec61-45f7-912c-ab4cf2a22c12","block_type":"box","text":"categories. However, the obligor’s capacity to meet its financial commitments on the","page_number":204,"box":{"x":226,"y":609,"width":629,"height":12}},{"id":"bb37a30b-0989-4fa1-98b0-8bdbb208fef6","block_type":"box","text":"obligation is satisfactory.","page_number":204,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"b9739033-3ba3-46c6-aeb8-9b7b387a65ca","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However,","page_number":204,"box":{"x":116,"y":648,"width":750,"height":12}},{"id":"9ed06190-006b-49d2-825b-273679f32065","block_type":"box","text":"adverse economic conditions or changing circumstances are more likely to weaken an","page_number":204,"box":{"x":226,"y":663,"width":639,"height":12}},{"id":"750aa345-fbaa-409c-8962-ccfeea3a9323","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation.","page_number":204,"box":{"x":226,"y":679,"width":513,"height":12}},{"id":"f8ab41af-ff01-4ac6-bab7-f114783e47b4","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant","page_number":204,"box":{"x":117,"y":702,"width":681,"height":12}},{"id":"3eb3435e-0a91-4021-b733-7bb453b41946","block_type":"box","text":"speculative characteristics. The obligor currently has the capacity to meet its financial","page_number":204,"box":{"x":226,"y":717,"width":632,"height":13}},{"id":"3c095464-9b01-4abb-9e4b-8a0afe24a19b","block_type":"box","text":"commitments; however, it faces major ongoing uncertainties that could lead to the","page_number":204,"box":{"x":226,"y":733,"width":607,"height":12}},{"id":"1ff0361a-1b84-4189-85aa-bd208d4f29cd","block_type":"box","text":"obligor’s inadequate capacity to meet its financial commitments.","page_number":204,"box":{"x":226,"y":748,"width":473,"height":13}},{"id":"d7231282-1100-4ce6-a322-542780dd0a86","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent","page_number":204,"box":{"x":117,"y":772,"width":763,"height":12}},{"id":"762ecf38-bdd5-47ba-9389-6df43379310a","block_type":"box","text":"upon favorable business, financial, and economic conditions for the obligor to meet its","page_number":204,"box":{"x":226,"y":787,"width":636,"height":12}},{"id":"60f82024-08e6-479b-bb2b-4dbdea3c5636","block_type":"box","text":"financial commitments on the obligation.","page_number":204,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"b36c1ce8-301b-418f-befd-0d69c41a59aa","block_type":"box","text":"A-6","page_number":204,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"8705eda0-6f1b-405f-9748-f91453764142","block_type":"box","text":"NM1026U-6004408-204/267","page_number":204,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1abef069-617c-4a8c-a04e-79cbd33f85c1","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For","page_number":205,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"367eda40-0945-4715-b476-d7ffc40bdc03","block_type":"box","text":"non-hybrid capital instruments, the ‘D’ rating category is used when payments on an","page_number":205,"box":{"x":226,"y":102,"width":629,"height":13}},{"id":"c6ba0d70-4cec-42eb-952d-90604280bae5","block_type":"box","text":"obligation are not made on the date due, unless S&P believes that such payments will","page_number":205,"box":{"x":226,"y":118,"width":643,"height":12}},{"id":"49d5ca64-6d80-4322-89d9-c9d25ae519dd","block_type":"box","text":"be made within any stated grace period. However, any stated grace period longer than","page_number":205,"box":{"x":226,"y":134,"width":648,"height":12}},{"id":"f0faa4f6-1591-4f70-9067-47fa33e8b9f3","block_type":"box","text":"five business days will be treated as five business days. The ‘D’ rating also will be used","page_number":205,"box":{"x":225,"y":149,"width":653,"height":12}},{"id":"50697fe2-1219-406e-9228-bbe4cd00ef2e","block_type":"box","text":"upon the filing of a bankruptcy petition or the taking of a similar action and where default","page_number":205,"box":{"x":226,"y":165,"width":659,"height":12}},{"id":"20a93b97-4bad-40a7-ba7f-c73ff5f60ded","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions. A","page_number":205,"box":{"x":226,"y":180,"width":635,"height":12}},{"id":"b9aad748-2062-4474-ad91-d73ff213cb38","block_type":"box","text":"rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":205,"box":{"x":226,"y":196,"width":648,"height":12}},{"id":"177ad4ff-8e4f-477f-8c0f-580281366d7a","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":205,"box":{"x":117,"y":223,"width":456,"height":12}},{"id":"afc268ac-7dc2-4a99-84a8-a5f546fe93ea","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":205,"box":{"x":116,"y":250,"width":766,"height":12}},{"id":"7cf871d5-b588-499b-b8b3-e932cb00170e","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":205,"box":{"x":117,"y":265,"width":748,"height":12}},{"id":"d7b84968-a9dc-4b18-866a-3be52e4d2c39","block_type":"box","text":"an original maturity of more than three years will most likely receive a long-term debt rating. In","page_number":205,"box":{"x":116,"y":281,"width":703,"height":12}},{"id":"18a793ab-bfb0-4541-9b8d-3b36d6f850fa","block_type":"box","text":"determining which type of rating, if any, to assign, S&P’s analysis will review the following","page_number":205,"box":{"x":116,"y":296,"width":668,"height":12}},{"id":"d680e879-ebcb-45f1-b710-5e731b85bfe5","block_type":"box","text":"considerations:","page_number":205,"box":{"x":116,"y":312,"width":118,"height":9}},{"id":"a2f8a257-1a38-4c59-97c2-9a0f3e351aae","block_type":"box","text":"• Amortization schedule — the larger the final maturity relative to other maturities, the more likely it","page_number":205,"box":{"x":125,"y":339,"width":750,"height":12}},{"id":"41f0b155-1d9b-4162-b876-6a7752b435a5","block_type":"box","text":"will be treated as a note; and","page_number":205,"box":{"x":149,"y":355,"width":220,"height":11}},{"id":"b174ea47-622f-49c0-b1a2-2b0fd50ec937","block_type":"box","text":"• Source of payment — the more dependent the issue is on the market for its refinancing, the more","page_number":205,"box":{"x":125,"y":376,"width":753,"height":12}},{"id":"6f62b472-7793-424d-a99c-2e860b91ef67","block_type":"box","text":"likely it will be treated as a note.","page_number":205,"box":{"x":150,"y":391,"width":242,"height":12}},{"id":"c6e5631b-2204-4c36-a259-6e5da59305ce","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":205,"box":{"x":116,"y":418,"width":470,"height":12}},{"id":"d30eb58b-c661-4435-998a-3833f4181855","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very","page_number":205,"box":{"x":116,"y":444,"width":739,"height":12}},{"id":"baf77161-99b4-4254-b2dc-c67a4b87a564","block_type":"box","text":"strong capacity to pay debt service is given a plus (+) designation.","page_number":205,"box":{"x":226,"y":458,"width":496,"height":12}},{"id":"dd62fca2-b47e-4d6f-bb26-04b4c96cab8f","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse","page_number":205,"box":{"x":116,"y":480,"width":741,"height":12}},{"id":"1dc6b39b-61d1-4e72-8fd2-738589cb3ecb","block_type":"box","text":"financial and economic changes over the term of the notes.","page_number":205,"box":{"x":225,"y":494,"width":446,"height":12}},{"id":"ff4443a2-0ada-4167-a057-0582816cfb0c","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":205,"box":{"x":116,"y":515,"width":482,"height":12}},{"id":"3eedf4d8-aa44-461b-9eae-5bd19819c4ce","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":205,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"109342f4-2837-4662-88db-08e098cf95aa","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and","page_number":205,"box":{"x":226,"y":551,"width":620,"height":12}},{"id":"b673d273-6173-45d5-a425-2719332c2289","block_type":"box","text":"where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":205,"box":{"x":225,"y":565,"width":640,"height":12}},{"id":"3d9a94b6-9c71-45b4-9735-503a9e9edcb7","block_type":"box","text":"provisions.","page_number":205,"box":{"x":226,"y":579,"width":84,"height":12}},{"id":"c6b301d6-d39d-42ab-8c16-e5795ea985f5","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch”) Credit Ratings Scales","page_number":205,"box":{"x":117,"y":606,"width":483,"height":12}},{"id":"426dc7b8-23a6-48fe-86c9-1eb27776e16f","block_type":"box","text":"Fitch publishes credit ratings that are forward-looking opinions on the relative ability of an entity or","page_number":205,"box":{"x":117,"y":633,"width":730,"height":12}},{"id":"500e9e09-4e60-4594-9879-c56b5f39e2f6","block_type":"box","text":"obligation to meet financial commitments. Issuer default ratings (IDRs) are assigned to corporations,","page_number":205,"box":{"x":116,"y":649,"width":749,"height":12}},{"id":"80877527-93f5-430f-811f-193028142bb6","block_type":"box","text":"sovereign entities, financial institutions such as banks, leasing companies and insurers, and public","page_number":205,"box":{"x":116,"y":664,"width":730,"height":12}},{"id":"102a79dc-c952-40be-ab46-6f5d29386d07","block_type":"box","text":"finance entities (local and regional governments). Issue level ratings are also assigned, often include","page_number":205,"box":{"x":116,"y":680,"width":747,"height":12}},{"id":"a7778ac5-b4b5-47a0-b245-81c3c7a55e71","block_type":"box","text":"an expectation of recovery and may be notched above or below the issuer level rating. Issue ratings","page_number":205,"box":{"x":116,"y":695,"width":741,"height":12}},{"id":"59c959bd-fa6c-4085-b1b1-7de76eaa8eef","block_type":"box","text":"are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments,","page_number":205,"box":{"x":116,"y":711,"width":751,"height":12}},{"id":"5dee96d1-d2c8-406d-b179-139cd5eae24a","block_type":"box","text":"Structured finance ratings are issue ratings to securities backed by receivables or other financial","page_number":205,"box":{"x":116,"y":726,"width":713,"height":12}},{"id":"9c491ffc-1ad2-4ff0-a22d-ecad1b14a3a5","block_type":"box","text":"assets that consider the obligations’ relative vulnerability to default.","page_number":205,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"f200dff0-7d1d-4c30-8466-227b9a02c5e2","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":205,"box":{"x":117,"y":769,"width":702,"height":12}},{"id":"8358fbeb-111b-441a-8400-58f645bf05cb","block_type":"box","text":"financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims","page_number":205,"box":{"x":116,"y":784,"width":756,"height":12}},{"id":"25e570f9-b444-4006-a7d9-f5523ca41c77","block_type":"box","text":"or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include","page_number":205,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"654eb220-3169-43a2-bfb6-7a28fdc9a2b1","block_type":"box","text":"a recovery expectation. Credit ratings are used by investors as indications of the likelihood of receiving","page_number":205,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"fc5a29a6-a968-4491-8a33-24494c7237f2","block_type":"box","text":"the money owed to them in accordance with the terms on which they invested. The agency’s credit","page_number":205,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"30df3299-2cc8-4eeb-92ba-4cbbd2b2297a","block_type":"box","text":"ratings cover the global spectrum of corporate, sovereign financial, bank, insurance, and public finance","page_number":205,"box":{"x":117,"y":846,"width":768,"height":12}},{"id":"0f685385-6b77-4fbd-9880-2905a4806e92","block_type":"box","text":"entities (including supranational and sub-national entities) and the securities or other obligations they","page_number":205,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"a8620be1-203a-41bc-bb5c-dd0533b4ef69","block_type":"box","text":"issue, as well as structured finance securities backed by receivables or other financial assets.","page_number":205,"box":{"x":117,"y":877,"width":698,"height":12}},{"id":"17b4a944-fcdc-4ceb-be27-c8d84cbc940c","block_type":"box","text":"A-7","page_number":205,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"16fd3046-a593-4dd9-becb-4f5e683a21c9","block_type":"box","text":"NM1026U-6004408-205/267","page_number":205,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"69864932-a88b-4225-8c67-0335f814e673","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as","page_number":206,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"a59d8936-14ae-4bfb-af17-dc9298f2b840","block_type":"box","text":"shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative","page_number":206,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"37ff67c8-69c2-4d84-add0-76025c575225","block_type":"box","text":"grade). The terms investment grade and speculative grade are market conventions and do not imply","page_number":206,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"50ea2ec7-d86a-4a03-a8ae-785a801f16af","block_type":"box","text":"any recommendation or endorsement of a specific security for investment purposes. Investment grade","page_number":206,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"93b3c4b4-c973-41d2-999c-a3b4cfd387ac","block_type":"box","text":"categories indicate relatively low to moderate credit risk, while ratings in the speculative categories","page_number":206,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"8ffc2eaa-ff14-4f7b-ba42-740555e7b57a","block_type":"box","text":"either signal a higher level of credit risk or that a default has already occurred.","page_number":206,"box":{"x":116,"y":165,"width":584,"height":12}},{"id":"f08c7d98-1bf0-401b-9ce0-adffb2f2ac82","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":206,"box":{"x":117,"y":196,"width":765,"height":12}},{"id":"ab66b82b-f7f0-4243-b1e9-0cbbf3d4eb1c","block_type":"box","text":"page. Such issues are also denoted as ‘NR’.","page_number":206,"box":{"x":117,"y":211,"width":335,"height":12}},{"id":"5e7a5abf-3d75-47b3-b581-09aab47f3b7f","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":206,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"0a0168f9-9786-4d59-ac1c-5eb03f68668b","block_type":"box","text":"and are not predictive of a specific frequency of default or loss.","page_number":206,"box":{"x":116,"y":258,"width":471,"height":12}},{"id":"43c87690-f4ef-4925-9e62-8e3ba848a957","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":206,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"915c8fe5-bc86-45c2-9138-5673f37d2fe5","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":206,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"09f2bde1-d651-4aab-8610-e3649fea1ff9","block_type":"box","text":"and other market considerations. However, in terms of payment obligation on the rated liability, market","page_number":206,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"05ef9d80-6003-4d60-a5f6-fe2b8343121d","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":206,"box":{"x":117,"y":335,"width":674,"height":12}},{"id":"28f5a6ee-acbf-41e5-a886-e7f05f5bbaed","block_type":"box","text":"commitment.","page_number":206,"box":{"x":116,"y":351,"width":101,"height":9}},{"id":"def65ec8-e424-4acf-9037-10ad74997987","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other","page_number":206,"box":{"x":117,"y":382,"width":709,"height":12}},{"id":"1547ae12-c9d0-4cf4-95a7-85a649337711","block_type":"box","text":"conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked","page_number":206,"box":{"x":116,"y":397,"width":731,"height":12}},{"id":"516a505d-587c-449f-b370-aa9921e4efe0","block_type":"box","text":"bonds).","page_number":206,"box":{"x":117,"y":413,"width":59,"height":12}},{"id":"286da6e6-043a-43c7-866b-7c99c8041281","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency","page_number":206,"box":{"x":117,"y":444,"width":725,"height":12}},{"id":"eecaba26-b859-408f-aa2d-6f52998b1bca","block_type":"box","text":"typically rates to the likelihood of non-payment or default in accordance with the terms of that","page_number":206,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"b42e5fb6-3e2f-4794-a43b-6e39141c24fb","block_type":"box","text":"instrument’s documentation. In limited cases, Fitch may include additional considerations (","page_number":206,"box":{"x":117,"y":475,"width":670,"height":12}},{"id":"3a8ca724-e0b3-406f-8bc9-bd79b746a180","block_type":"box","text":"i.e.","page_number":206,"box":{"x":788,"y":475,"width":20,"height":9}},{"id":"350eb468-54ab-4d90-b03c-282275091e57","block_type":"box","text":"rate to a","page_number":206,"box":{"x":810,"y":475,"width":71,"height":9}},{"id":"17733f12-2f41-4504-86dc-68798fc8c156","block_type":"box","text":"higher or lower standard than that implied in the obligation’s documentation).","page_number":206,"box":{"x":117,"y":490,"width":573,"height":12}},{"id":"f7622005-9443-4615-b133-98c8415251a5","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or","page_number":206,"box":{"x":116,"y":521,"width":719,"height":12}},{"id":"8709d126-d3d5-4de8-85f9-c7bd47fbbb9c","block_type":"box","text":"certain note issuance programs or for private ratings. In this case the rating is not published, but only","page_number":206,"box":{"x":116,"y":537,"width":753,"height":12}},{"id":"24ced761-bc63-4f18-9f2b-c5432e44fdc7","block_type":"box","text":"provided to the issuer or its agents in the form of a rating letter.","page_number":206,"box":{"x":117,"y":552,"width":472,"height":12}},{"id":"a555807d-ac47-4f1a-8b37-005fadab1b20","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope,","page_number":206,"box":{"x":116,"y":583,"width":702,"height":12}},{"id":"ce495506-3c71-4620-ac37-682acf6c671d","block_type":"box","text":"including interest strips and return of principal or in other forms of opinions such as credit opinions or","page_number":206,"box":{"x":117,"y":599,"width":751,"height":12}},{"id":"eb68d1dc-f374-45b3-b3ad-17aa490c6cce","block_type":"box","text":"rating assessment services. Credit opinions are either a notch- or category-specific view using the","page_number":206,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"fb42b1af-9d37-4230-ac6a-c80de0431dc0","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":206,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"5a69a8a9-038e-44e3-ad3e-6d189f5c34c7","block_type":"box","text":"standard. Credit opinions will be indicated using a lower case letter symbol combined with either an ‘*’","page_number":206,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"0493f273-42b6-414b-be18-eb797742b94b","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":206,"box":{"x":117,"y":661,"width":743,"height":12}},{"id":"c91e2e9b-4065-4e07-ae98-48a174109da0","block_type":"box","text":"but may be monitored if the analytical group believes information will be sufficiently available. Rating","page_number":206,"box":{"x":117,"y":676,"width":742,"height":12}},{"id":"564f6f3d-ce3a-41d1-94e0-f6c12e5c4df6","block_type":"box","text":"assessment services are a notch-specific view using the primary rating scale of how an existing or","page_number":206,"box":{"x":116,"y":692,"width":729,"height":12}},{"id":"3991eacd-edee-4d0a-9913-1bc18fbbb248","block_type":"box","text":"potential rating may be changed by a given set of hypothetical circumstances. While credit opinions","page_number":206,"box":{"x":117,"y":707,"width":736,"height":12}},{"id":"933877b7-b018-4100-b915-6163f271c249","block_type":"box","text":"and rating assessment services are point-in-time and are not monitored, they may have a directional","page_number":206,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"31e6a490-33bd-4367-9ddc-6b3e79e6deec","block_type":"box","text":"watch or outlook assigned, which can signify the trajectory of the credit profile.","page_number":206,"box":{"x":116,"y":738,"width":579,"height":12}},{"id":"fed8b4c4-386c-42e9-aeb8-6e014e185e15","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":206,"box":{"x":117,"y":769,"width":629,"height":12}},{"id":"fca305a0-b881-4395-b066-668c54de4109","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative","page_number":206,"box":{"x":117,"y":800,"width":677,"height":12}},{"id":"991bd29c-6780-4668-8bbf-c5fac81f1611","block_type":"box","text":"vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, a","page_number":206,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"7a58615f-1ce7-498f-96e2-abeef8501108","block_type":"box","text":"measure of recovery given default on that liability is also included in the rating assessment. This","page_number":206,"box":{"x":117,"y":831,"width":716,"height":12}},{"id":"7c1c5484-40e1-422f-acd1-1966d771a029","block_type":"box","text":"notably applies to covered bonds ratings, which incorporate both an indication of the probability of","page_number":206,"box":{"x":117,"y":847,"width":729,"height":12}},{"id":"0ba4e5f6-3415-453b-b436-c10646ed538a","block_type":"box","text":"default and of the recovery given a default of this debt instrument. On the contrary, Ratings of","page_number":206,"box":{"x":116,"y":862,"width":699,"height":12}},{"id":"ad2aec8f-9ab1-4558-8bf7-82cc7b8a03c3","block_type":"box","text":"debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":206,"box":{"x":116,"y":878,"width":642,"height":12}},{"id":"94b8b9df-2088-4b82-9b86-9a357d559908","block_type":"box","text":"A-8","page_number":206,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"c76f8252-87ba-483f-9aca-18f61ecdfdbf","block_type":"box","text":"NM1026U-6004408-206/267","page_number":206,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"952b5d12-1ebf-479b-9573-20314a32257d","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average","page_number":207,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"e52070b2-eb32-4512-bec8-ffb40c03dcc7","block_type":"box","text":"recovery. Individual obligations can be assigned ratings higher, lower, or the same as that entity’s","page_number":207,"box":{"x":117,"y":103,"width":728,"height":12}},{"id":"4412f129-a790-47ae-a5c1-3976541fde92","block_type":"box","text":"issuer rating or issuer default rating (“IDR”), based on their relative ranking, relative vulnerability to","page_number":207,"box":{"x":117,"y":118,"width":733,"height":12}},{"id":"32beb6fb-0acf-4986-b56d-65ffd1152034","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":207,"box":{"x":116,"y":134,"width":347,"height":12}},{"id":"5a2f72ad-ffbf-4211-877c-803360ed172d","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower,","page_number":207,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"1c9bfe19-2bb2-4d3e-a167-3913636a2fd7","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":207,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"9149349c-6f49-416d-81fd-c79f2eea4eaf","block_type":"box","text":"IDR. At the lower end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to","page_number":207,"box":{"x":117,"y":196,"width":756,"height":12}},{"id":"7561279f-9c98-4c22-b37f-328fdd96248e","block_type":"box","text":"complement issuer and obligation ratings.","page_number":207,"box":{"x":116,"y":211,"width":315,"height":12}},{"id":"3be915c9-54f2-4058-b159-3a1525fc4c72","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":207,"box":{"x":117,"y":242,"width":412,"height":12}},{"id":"81211b55-019b-4a6e-9403-174177cf73cb","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of default risk. They","page_number":207,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"9351ba83-d46c-4bf2-95ed-d9e0f8c89606","block_type":"box","text":"are assigned only in cases of exceptionally strong capacity for payment of financial","page_number":207,"box":{"x":226,"y":288,"width":619,"height":12}},{"id":"e03e2ed3-4a2b-4660-b18f-b66abe533e29","block_type":"box","text":"commitments. This capacity is highly unlikely to be adversely affected by foreseeable","page_number":207,"box":{"x":226,"y":302,"width":636,"height":13}},{"id":"28d65d4e-9aa5-4abc-a33b-96c50c3bff2f","block_type":"box","text":"events.","page_number":207,"box":{"x":226,"y":318,"width":58,"height":9}},{"id":"015b78ac-1076-4197-b836-feeb9bda894e","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low default risk. They","page_number":207,"box":{"x":116,"y":340,"width":762,"height":13}},{"id":"ab33d589-63ff-4714-9c4b-1e5e40b3769a","block_type":"box","text":"indicate very strong capacity for payment of financial commitments. This capacity is not","page_number":207,"box":{"x":226,"y":355,"width":652,"height":13}},{"id":"b7fa5994-ab3b-44b1-ab9d-a51044b36b02","block_type":"box","text":"significantly vulnerable to foreseeable events.","page_number":207,"box":{"x":226,"y":370,"width":343,"height":12}},{"id":"d91665f8-3de6-469c-8119-f0eaea9b2f13","block_type":"box","text":"A High Credit Quality. ‘A’ ratings denote expectations of low default risk. The capacity for","page_number":207,"box":{"x":116,"y":393,"width":757,"height":12}},{"id":"1bb2b61f-d9da-4b4f-8180-e4a3e12efb95","block_type":"box","text":"payment of financial commitments is considered strong. This capacity may,","page_number":207,"box":{"x":226,"y":408,"width":562,"height":12}},{"id":"c2016c93-12e5-43b4-9bef-e2f55617fb9b","block_type":"box","text":"nevertheless, be more vulnerable to adverse business or economic conditions than is","page_number":207,"box":{"x":226,"y":423,"width":638,"height":11}},{"id":"cc14c873-3c75-49ed-b483-d028001fe96e","block_type":"box","text":"the case for higher ratings.","page_number":207,"box":{"x":225,"y":438,"width":204,"height":12}},{"id":"b46da602-e0a8-4d07-a326-81ddb829ee40","block_type":"box","text":"BBB Good Credit Quality. ‘BBB’ ratings indicate that expectations of default risk are currently","page_number":207,"box":{"x":117,"y":461,"width":764,"height":12}},{"id":"8e0fb855-0189-463e-a739-abc65eef697d","block_type":"box","text":"low. 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Indicates the strongest intrinsic capacity for timely","page_number":208,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"47a65d91-a836-4acb-86c4-2a9691cf4109","block_type":"box","text":"payment of financial commitments; may have an added “+” to denote any exceptionally","page_number":208,"box":{"x":226,"y":382,"width":650,"height":12}},{"id":"60bdc156-7037-43bc-8dac-e8be45c7167a","block_type":"box","text":"strong credit feature.","page_number":208,"box":{"x":226,"y":397,"width":158,"height":12}},{"id":"fdf33814-c899-48db-adec-cea67c6a0eb5","block_type":"box","text":"F2 Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial","page_number":208,"box":{"x":117,"y":420,"width":757,"height":12}},{"id":"32399760-37df-438e-ac40-a412125af774","block_type":"box","text":"commitments.","page_number":208,"box":{"x":226,"y":436,"width":109,"height":9}},{"id":"7162f869-7f24-429f-90fc-e0cf31e52cb4","block_type":"box","text":"F3 Fair Short-Term Credit Quality. 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in","page_number":209,"box":{"x":116,"y":473,"width":765,"height":12}},{"id":"713a6920-2731-48c2-a81f-e7b49c54c06b","block_type":"box","text":"the best interests of the Funds and their shareholders to delegate the responsibility to vote proxies to","page_number":209,"box":{"x":116,"y":488,"width":754,"height":13}},{"id":"a7e22a8c-f480-455e-aed9-495d0451e4c5","block_type":"box","text":"BlackRock, subject to the principles outlined in this Policy, as part of BlackRock’s authority to manage,","page_number":209,"box":{"x":117,"y":504,"width":764,"height":12}},{"id":"bdc0fceb-7190-41ec-a351-83e4b7976863","block_type":"box","text":"acquire and dispose of account assets, all as contemplated by the Funds’ respective investment","page_number":209,"box":{"x":116,"y":519,"width":718,"height":13}},{"id":"81a646d6-36ee-4886-af3d-9183292e2cd5","block_type":"box","text":"management 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The team is responsible for establishing","page_number":214,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"9762dd2f-e61b-404f-83b2-a5bacaf61ae3","block_type":"box","text":"voting guidelines for the active equity platform, providing vote recommendations and operationalizing","page_number":214,"box":{"x":116,"y":196,"width":754,"height":12}},{"id":"b2714463-977f-4cc0-bfaa-bdf55d700feb","block_type":"box","text":"voting decisions. The guidance informs the voting recommendations BAIS makes to BlackRock’s","page_number":214,"box":{"x":116,"y":211,"width":724,"height":12}},{"id":"be27dbfc-ec36-422b-a942-e6110c285496","block_type":"box","text":"active portfolio managers. It applies to active equity holdings in BlackRock’s fundamental equity,","page_number":214,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"1aeb46ad-79e6-47b6-8ce6-5658ddd57dc2","block_type":"box","text":"systematic equity and multi-asset solutions strategies. It also may apply to holdings in BlackRock’s","page_number":214,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"f417975f-be13-4aed-94cd-5afeace960e2","block_type":"box","text":"index and active fixed income strategies, to the extent those strategies hold voting securities or","page_number":214,"box":{"x":117,"y":258,"width":709,"height":12}},{"id":"c1681b2c-4368-4fd7-a36e-188059cee149","block_type":"box","text":"conduct issuer engagements. The guidelines are not prescriptive as active portfolio managers have","page_number":214,"box":{"x":116,"y":273,"width":742,"height":12}},{"id":"68e6566c-997d-4eff-bc1f-2e3fd31b25cd","block_type":"box","text":"discretion as to how they integrate these guidelines within their investment processes in light of their","page_number":214,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"cde485b8-a76f-48df-959e-c0d75ebaf90f","block_type":"box","text":"clients’ or funds’ investment objectives. There are separate, independently developed principles and","page_number":214,"box":{"x":116,"y":304,"width":748,"height":12}},{"id":"7dab3a44-819c-4c2a-8535-036d1039140f","block_type":"box","text":"voting policies that are applied to BlackRock’s index equity investments by a distinct and independent","page_number":214,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"c1df6542-9014-4902-9769-ee9fb6844a80","block_type":"box","text":"function, BlackRock Investment Stewardship.","page_number":214,"box":{"x":116,"y":335,"width":341,"height":12}},{"id":"20bbfbce-c728-4f7c-aff1-7b1940fc9068","block_type":"box","text":"1","page_number":214,"box":{"x":144,"y":789,"width":2,"height":5}},{"id":"4941f27b-f336-4f27-bdb4-3403a47eeeb5","block_type":"box","text":"This document includes BAIS’ benchmark policy, which covers nearly all active equity holdings in BlackRock’s","page_number":214,"box":{"x":170,"y":789,"width":653,"height":10}},{"id":"41488fad-4ebe-4a42-9d07-06b4a3074337","block_type":"box","text":"fundamental equity, systematic equity and multi-asset solutions strategies. The benchmark policy also may apply to","page_number":214,"box":{"x":170,"y":802,"width":685,"height":10}},{"id":"9a07da9d-96ae-4554-abb3-dc3722646ecc","block_type":"box","text":"holdings in BlackRock’s index and active fixed income strategies, to the extent those strategies hold voting securities or","page_number":214,"box":{"x":170,"y":815,"width":709,"height":10}},{"id":"77e00c88-8de8-49e0-ba82-e1c360f1ae0e","block_type":"box","text":"conduct issuer engagements. This document also includes BAIS’ decarbonization policy, which covers holdings in","page_number":214,"box":{"x":170,"y":828,"width":676,"height":10}},{"id":"9ea35920-3367-4ce9-ac12-3297b5e29cf3","block_type":"box","text":"BlackRock active funds that have climate and decarbonization objectives in addition to financial objectives.","page_number":214,"box":{"x":171,"y":841,"width":631,"height":9}},{"id":"4cc15517-c61a-469d-b63b-097d7552e588","block_type":"box","text":"2","page_number":214,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"d9160e5b-9cf5-440d-880a-afdd2efa2680","block_type":"box","text":"BlackRock segmented active and index equity investment functions, including stewardship, in January 2025 as part of a","page_number":214,"box":{"x":171,"y":854,"width":709,"height":9}},{"id":"b3ccd498-dc8c-4d33-82b9-97133b89015b","block_type":"box","text":"strategic initiative to unlock the full breadth of the firm’s active and private markets capabilities for clients. As a result,","page_number":214,"box":{"x":170,"y":867,"width":692,"height":9}},{"id":"8f6f0d5c-9917-427f-8831-f8ba0cf9156d","block_type":"box","text":"there are two stewardship teams, which operate independently of one another and have separate voting policies.","page_number":214,"box":{"x":170,"y":880,"width":669,"height":9}},{"id":"4fb0bb2b-ffa7-4639-b312-8bc45c60d830","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ca39c89b-4ca7-459a-9161-2c21a8ac5bb5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":214,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"9c3d1b68-6d5b-4d2d-bd35-251ecbde1e1d","block_type":"box","text":"3","page_number":214,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"13155e59-cd3e-4af9-9d12-d66ff81d08c4","block_type":"box","text":"NM1026U-6004408-214/267","page_number":214,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ac7a7fb9-e56a-4976-96b7-9d8dbbafc4ea","block_type":"box","text":"Introduction to BlackRock","page_number":215,"box":{"x":396,"y":87,"width":213,"height":10}},{"id":"5c7d9526-b281-4e38-ace0-658c44ff4f5b","block_type":"box","text":"BlackRock’s mission is to help more people invest","page_number":215,"box":{"x":117,"y":118,"width":367,"height":12}},{"id":"0bea6486-81cf-48c3-91ee-4a127beb6957","block_type":"box","text":"better. The money BlackRock manages is not its own","page_number":215,"box":{"x":485,"y":118,"width":392,"height":12}},{"id":"8c8b16aa-fec1-4ce8-9675-1dd3c33ff6ab","block_type":"box","text":"— it belongs to BlackRock’s clients, many of w","page_number":215,"box":{"x":116,"y":133,"width":339,"height":12}},{"id":"1b09a9f6-7f8a-4373-9c38-5be99f025a20","block_type":"box","text":"hom make their own asset allocation and portfolio","page_number":215,"box":{"x":456,"y":133,"width":365,"height":12}},{"id":"99254a44-4995-4529-8efd-21a1a8fbb9fb","block_type":"box","text":"construction decisions. As a fiduciary, BlackRock in","page_number":215,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"4cdb88e2-5b68-4db3-9010-d94fae379133","block_type":"box","text":"vests on clients’ behalf to help them meet their","page_number":215,"box":{"x":490,"y":149,"width":342,"height":12}},{"id":"aa4edc2a-c97b-4373-8ed5-7ba6f6fab3b3","block_type":"box","text":"investment objectives. The firm does this by underst","page_number":215,"box":{"x":117,"y":164,"width":378,"height":12}},{"id":"a53a2d93-2705-4265-ace1-4e7da41a29ee","block_type":"box","text":"anding clients’ long-term investment objectives and","page_number":215,"box":{"x":495,"y":164,"width":376,"height":12}},{"id":"62b25bba-4d56-4312-aeb1-589c3c0acf9a","block_type":"box","text":"offering choice on how and where they wish to invest","page_number":215,"box":{"x":116,"y":180,"width":385,"height":12}},{"id":"44f311ee-d9f5-4b6d-b74c-edee312002f6","block_type":"box","text":"t their money. BlackRock then helps clients seek the","page_number":215,"box":{"x":501,"y":180,"width":380,"height":12}},{"id":"863d7aea-d0fa-4b49-a3b1-7cd06901d23d","block_type":"box","text":"best risk-adjusted returns based on those choices,","page_number":215,"box":{"x":117,"y":195,"width":364,"height":12}},{"id":"a2751eb4-8083-4715-9890-47644a5cb9aa","block_type":"box","text":"underpinning this work with research, data and","page_number":215,"box":{"x":482,"y":195,"width":350,"height":12}},{"id":"56bbba7d-7a1c-4692-a430-e14d35ef4ddf","block_type":"box","text":"analytics.","page_number":215,"box":{"x":116,"y":211,"width":73,"height":12}},{"id":"ed9740b1-d536-41bf-85bc-a2660fa2535b","block_type":"box","text":"At BlackRock, investment stewardship is core to our role as an asset manager and a fiduciary to our","page_number":215,"box":{"x":116,"y":241,"width":748,"height":12}},{"id":"cfdf08cc-d1df-4c06-bf8c-298342abb11b","block_type":"box","text":"clients. As stewards of our clients’ assets, we engage with companies to discuss the corporate","page_number":215,"box":{"x":116,"y":257,"width":706,"height":12}},{"id":"f233e0c6-fd52-4f84-9208-89b63f7a3eaf","block_type":"box","text":"governance and business practices that, in our experience, support companies in delivering durable,","page_number":215,"box":{"x":116,"y":272,"width":751,"height":12}},{"id":"527f1a4e-9789-46f4-9971-ec472a72c3e8","block_type":"box","text":"risk-adjusted financial returns over time. We are committed to building strong relationships through","page_number":215,"box":{"x":117,"y":288,"width":736,"height":12}},{"id":"c3c60639-49a0-4bb8-b531-cc73bc1ec115","block_type":"box","text":"constructive, ongoing dialogue with the boards and executive management of the companies in which","page_number":215,"box":{"x":116,"y":303,"width":760,"height":12}},{"id":"ba4d1e34-ef14-45c4-b7f7-4a0a98640a8f","block_type":"box","text":"our clients are invested.","page_number":215,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"704cd027-3c8f-4156-944b-52ec2fc87f77","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":215,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"49eb20e0-8e9f-4c53-9a85-c7c9f2bddd52","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management","page_number":215,"box":{"x":117,"y":388,"width":764,"height":12}},{"id":"37d7587f-e147-435b-a0cb-18d347457474","block_type":"box","text":"Group and manages BlackRock’s stewardship engagement and voting on behalf of clients invested in","page_number":215,"box":{"x":117,"y":403,"width":758,"height":12}},{"id":"99b2ec8c-e2ff-4d47-bddf-807ca9a9666b","block_type":"box","text":"active strategies globally. BAIS is also responsible for engagement with issuers in index fixed income","page_number":215,"box":{"x":116,"y":419,"width":755,"height":12}},{"id":"751793c3-cc11-4bf2-9376-c48c2d6af758","block_type":"box","text":"strategies, where appropriate. Our activities are informed by these Global Engagement and Voting","page_number":215,"box":{"x":116,"y":434,"width":735,"height":12}},{"id":"a73c9c0c-b147-4836-85c7-7b99284a8376","block_type":"box","text":"Guidelines (the “Guidelines”) and insights from active investment analysts and portfolio managers, with","page_number":215,"box":{"x":117,"y":450,"width":768,"height":12}},{"id":"631bbc85-4a8e-460b-b002-1d175c679c68","block_type":"box","text":"whom we work closely in engaging companies and voting at shareholder meetings.","page_number":215,"box":{"x":116,"y":465,"width":622,"height":12}},{"id":"583ca213-6f92-4071-8185-6b964f9f161a","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within","page_number":215,"box":{"x":117,"y":496,"width":680,"height":12}},{"id":"5ec59d96-1752-4db3-950a-53a1dce3b9cc","block_type":"box","text":"fundamental active investing.","page_number":215,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"e2dca01e-0669-40c9-81e0-3e1853c9c1c4","block_type":"box","text":"3","page_number":215,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"f0647eeb-f6e1-4179-bdce-cc1d82f0a6a7","block_type":"box","text":"Through direct dialogue with company leadership, we seek to","page_number":215,"box":{"x":339,"y":511,"width":466,"height":12}},{"id":"476265a1-c0f7-45d4-a922-646cbe4328f3","block_type":"box","text":"understand their businesses and how they manage risks and opportunities to deliver durable, risk","page_number":215,"box":{"x":117,"y":527,"width":727,"height":12}},{"id":"a71f1b88-65f8-45e9-a072-0f5b8059b2d7","block_type":"box","text":"adjusted financial returns. Portfolio managers and stewardship specialists may engage jointly or","page_number":215,"box":{"x":116,"y":542,"width":716,"height":12}},{"id":"4f6df84e-e617-4df6-8b99-fdf0c8480945","block_type":"box","text":"independently on material corporate governance matters. Our discussions focus on topics relevant to a","page_number":215,"box":{"x":117,"y":558,"width":769,"height":12}},{"id":"b28c8ca6-beee-4e7d-8c9d-5e37191753cf","block_type":"box","text":"company’s success over time, including governance and leadership, corporate strategy, capital","page_number":215,"box":{"x":116,"y":573,"width":711,"height":12}},{"id":"2fbbe692-f06d-49cf-92d8-caf813674f28","block_type":"box","text":"structure and financial performance, operations and material sustainability-related risks, as well as","page_number":215,"box":{"x":116,"y":589,"width":734,"height":12}},{"id":"2007c054-f34d-42fe-b640-62899a8698c6","block_type":"box","text":"macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are","page_number":215,"box":{"x":117,"y":604,"width":717,"height":12}},{"id":"aa075542-55df-4c4b-ba7c-0f318f2cea52","block_type":"box","text":"generally supportive of management teams that have a track record of financial value creation. We aim","page_number":215,"box":{"x":116,"y":620,"width":770,"height":12}},{"id":"e0d1a5b6-bcaf-4143-8998-e16dea18d966","block_type":"box","text":"to build and maintain strong relationships with company leadership based on open dialogue and","page_number":215,"box":{"x":116,"y":635,"width":717,"height":12}},{"id":"5cead48e-97e4-411e-b65c-026ae1a6703f","block_type":"box","text":"mutual respect.","page_number":215,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"1f9893dc-f329-4697-9699-b9792ad49d71","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the","page_number":215,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"c86d48ad-469f-4763-a9d0-b8211e71c185","block_type":"box","text":"latitude each portfolio manager has to make independent voting decisions on their holdings. For","page_number":215,"box":{"x":117,"y":697,"width":711,"height":12}},{"id":"8e5cf79d-536d-4607-8b6b-2ee7b4757560","block_type":"box","text":"example, BAIS will generally vote the holdings in Systematic Active Equity portfolios in accordance","page_number":215,"box":{"x":116,"y":712,"width":732,"height":12}},{"id":"d9d6864f-2be7-4eeb-a537-d4a071830198","block_type":"box","text":"with these guidelines. We provide voting recommendations to fundamental equity portfolio managers,","page_number":215,"box":{"x":116,"y":728,"width":751,"height":12}},{"id":"61cf9882-e523-46e8-8791-6997d1bbe73c","block_type":"box","text":"who may determine to vote differently based on each portfolio’s investment objectives and strategy.","page_number":215,"box":{"x":116,"y":743,"width":737,"height":12}},{"id":"262fde6f-9a85-4e19-af5c-a795224fc6fd","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":215,"box":{"x":116,"y":774,"width":749,"height":12}},{"id":"eb506303-9105-42a1-8c30-b9f12440df89","block_type":"box","text":"management teams and board directors","page_number":215,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"951f6644-32e5-4cc7-8b0b-9533651df333","block_type":"box","text":"4","page_number":215,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"4f34391e-39bd-4fd7-b0a0-4b4a3321ea5c","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We","page_number":215,"box":{"x":424,"y":790,"width":456,"height":12}},{"id":"34cc37ec-58fc-4027-b91f-abc96f7f66cd","block_type":"box","text":"3","page_number":215,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"34263fc1-be96-414b-9dce-f29cabc741f6","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":215,"box":{"x":170,"y":815,"width":660,"height":9}},{"id":"c007a3bc-f81f-405e-994f-84827c884b14","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":215,"box":{"x":170,"y":828,"width":695,"height":9}},{"id":"ee4078c9-6770-43c7-8ea6-6c67d2840133","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":215,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"a4c2c561-d2d1-4aa1-b5b4-c2b7f495e275","block_type":"box","text":"of changing or influencing control of the company.","page_number":215,"box":{"x":170,"y":853,"width":295,"height":10}},{"id":"114d4635-8c34-4f9a-a419-e7e2e8f4d19e","block_type":"box","text":"4","page_number":215,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"66142d51-8d25-4bd1-be00-8425de904ab2","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory boards","page_number":215,"box":{"x":171,"y":866,"width":710,"height":10}},{"id":"2df5e862-3e70-4137-bd91-28c72f7cfcfb","block_type":"box","text":"and their members, where relevant.","page_number":215,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"09a7fec5-fa28-4583-99cc-d682b9ea9157","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"1c11908d-5dd4-4fac-812b-3fed97621df7","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":215,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"9243eb7c-52c7-4705-b7a4-3f1bbe808532","block_type":"box","text":"4","page_number":215,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"e04b2b57-c367-4a53-8121-acb4f8090512","block_type":"box","text":"NM1026U-6004408-215/267","page_number":215,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b3f9a7f7-4a3d-4aff-b724-263230a639b5","block_type":"box","text":"recognize that accepted corporate governance norms can differ across markets, and believe these","page_number":216,"box":{"x":117,"y":87,"width":736,"height":12}},{"id":"e8f9d6f4-8059-434a-97f5-9dabef89ec4a","block_type":"box","text":"guidelines represent globally applicable elements of governance that support a company’s ability to","page_number":216,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"e09fbd4d-bd18-452e-b65c-b95966231ed3","block_type":"box","text":"manage material risks and opportunities and deliver financial returns to investors. Generally, we","page_number":216,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"3fd2c73a-8f0b-482c-8b17-0936aae9d666","block_type":"box","text":"believe companies should observe accepted corporate governance norms within their local markets or,","page_number":216,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"d757a77d-afab-4e86-8f13-9a389b15d2c9","block_type":"box","text":"particularly in markets without well-established norms, aspire to widely recognized international best","page_number":216,"box":{"x":117,"y":149,"width":746,"height":12}},{"id":"aa5216ef-ea86-463f-9519-34beca239cd3","block_type":"box","text":"practices. As one of many minority shareholders, BlackRock cannot – and does not try to – direct a","page_number":216,"box":{"x":117,"y":165,"width":739,"height":12}},{"id":"d3b530b6-6d82-4162-861e-0d394d522a4f","block_type":"box","text":"company’s strategy or its implementation. We look to companies to provide disclosures that explain","page_number":216,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"b47d07cc-93ab-4157-8118-c2fad76b6158","block_type":"box","text":"how their approach to corporate governance best aligns with the financial interests of their investors.","page_number":216,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"758a86c0-7312-43c3-8eb4-9f07f22f368b","block_type":"box","text":"Our approach to stewardship within active equities","page_number":216,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"5a8c7c98-c6e8-4385-8ee4-f19a940d22f8","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":216,"box":{"x":116,"y":265,"width":713,"height":12}},{"id":"053d2f65-7f11-419c-97a0-6d1580043f7a","block_type":"box","text":"corporate governance. The voting rights attached to clients’ holdings are an important mechanism for","page_number":216,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"e762b04c-bd68-42e9-a996-c69ec300bd47","block_type":"box","text":"investors to express support for, or concern about, a company’s performance. As a fiduciary,","page_number":216,"box":{"x":117,"y":296,"width":692,"height":12}},{"id":"04b863ee-7833-42d4-92a1-c8bdd184c250","block_type":"box","text":"BlackRock is legally required to make proxy voting determinations, on behalf of clients who have","page_number":216,"box":{"x":117,"y":312,"width":720,"height":12}},{"id":"5b70a067-739e-4b5b-9470-f11cec4a0018","block_type":"box","text":"delegated voting authority to us, in a manner consistent with BlackRock’s contractual arrangements","page_number":216,"box":{"x":116,"y":327,"width":743,"height":12}},{"id":"00b1eef1-c534-4a75-bdc7-b32112d6da4a","block_type":"box","text":"with clients and funds.","page_number":216,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"6ef26c7b-0071-4a54-93ab-6e4ba5c0f705","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As","page_number":216,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"f376e1d4-33cd-44d5-afea-52ed8aef1216","block_type":"box","text":"indicated below, we may vote against management recommendations when we have concerns about","page_number":216,"box":{"x":117,"y":389,"width":755,"height":12}},{"id":"5f6732f5-5b63-4385-bcb3-fb4bf793ee30","block_type":"box","text":"how companies are serving the financial interests of our clients as their shareholders. BAIS takes a","page_number":216,"box":{"x":117,"y":405,"width":740,"height":12}},{"id":"41b22d87-0284-41a7-85e0-71fc09fa279c","block_type":"box","text":"globally consistent approach to voting but considers the different corporate governance regulations and","page_number":216,"box":{"x":116,"y":420,"width":772,"height":12}},{"id":"83b50106-f742-4679-a347-019b0aa69a44","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":216,"box":{"x":117,"y":436,"width":753,"height":12}},{"id":"47dca086-2105-4c9e-8482-b145471f5c66","block_type":"box","text":"situation and the investment mandate we have from clients. Please see page 19 for more information","page_number":216,"box":{"x":116,"y":451,"width":756,"height":12}},{"id":"1974c9a8-7253-46ed-a362-0db55ce5c969","block_type":"box","text":"about how we fulfill and oversee our investment stewardship responsibilities for BlackRock’s non-index","page_number":216,"box":{"x":116,"y":467,"width":768,"height":12}},{"id":"d6980969-8e45-4d70-bf50-d42bd9894ed5","block_type":"box","text":"equity strategies.","page_number":216,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"962f0b4d-f94e-4db4-95fa-d460201d444b","block_type":"box","text":"5","page_number":216,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"a9487e60-703b-41d4-9cae-f3e07c0cf41a","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":216,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"9540bbe7-f112-4a05-9e87-ed2b996761df","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer","page_number":216,"box":{"x":116,"y":552,"width":695,"height":12}},{"id":"43a1f8f9-9db6-436a-943e-5062870efaa6","block_type":"box","text":"engagement is a component of fixed income investment strategies at BlackRock, particularly for those","page_number":216,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"de625f43-6535-4da7-9736-75bf340e8848","block_type":"box","text":"with sustainability objectives in addition to financial objectives. Most corporate governance-related","page_number":216,"box":{"x":116,"y":583,"width":732,"height":12}},{"id":"2ec6d6ba-41a2-4a8d-acf3-84b8d0231f2f","block_type":"box","text":"fixed income engagements are undertaken in conjunction with the active investment stewardship team,","page_number":216,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"363f1948-6570-483b-baef-5619ad9ff63a","block_type":"box","text":"and often active equity investors. In addition to the topics listed below, engagement with fixed income","page_number":216,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"f86b22b3-65fb-4e75-b33f-cd4edbcfbede","block_type":"box","text":"investment teams may help inform an issuer’s approach to structuring specialist issuances and the","page_number":216,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"b6644b7c-99b8-4d7c-90a6-e76ce818f119","block_type":"box","text":"standard terms and information in bond documentation.","page_number":216,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"1ef9c04f-f7cb-4f9d-894f-fc2d95cc4db9","block_type":"box","text":"5","page_number":216,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"a03ad9e2-e8c0-4074-bbf3-b7802959b91f","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":216,"box":{"x":171,"y":854,"width":685,"height":9}},{"id":"4090b7d9-9947-4ece-afea-d07804d92887","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":216,"box":{"x":170,"y":867,"width":678,"height":9}},{"id":"329175b2-fcf2-4886-a29e-e7ffb82e6209","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":216,"box":{"x":170,"y":880,"width":458,"height":9}},{"id":"1ef55af1-cc76-4d07-b3b2-5565ac7a4e69","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":216,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6f72007a-a02d-48df-9a9a-d771f513aca6","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":216,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"e63dbca6-05ea-4053-9e0d-b2cb38c1ef58","block_type":"box","text":"5","page_number":216,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"46e7f7bd-0e47-496e-bf22-701ce3a8d03b","block_type":"box","text":"NM1026U-6004408-216/267","page_number":216,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4a841645-b3cc-4652-8799-cd5bed0c4a92","block_type":"box","text":"Boards of Directors","page_number":217,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"c5c8076e-df14-4dbb-95f9-d9625b8fdf33","block_type":"box","text":"Roles and responsibilities","page_number":217,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"8331aea3-f113-4c3e-b947-44d465ee334f","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board","page_number":217,"box":{"x":116,"y":178,"width":770,"height":12}},{"id":"2aa1abf8-9c52-4837-a7f0-8c5983facb0e","block_type":"box","text":"of directors that is able to advise and supervise management in an independent and objective","page_number":217,"box":{"x":116,"y":194,"width":700,"height":12}},{"id":"ab69a14e-012a-472c-ba19-9cfa1bc03352","block_type":"box","text":"manner.","page_number":217,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"5d7ee600-0155-4e39-9dbf-660a31ddc567","block_type":"box","text":"6","page_number":217,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"535c810d-b7ff-43bc-8f4a-0ba460ddef4e","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment","page_number":217,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"46206a7e-5634-45f3-9c02-463a8d502bd4","block_type":"box","text":"and realization of a company’s strategy, purpose and culture. These constructs are interdependent","page_number":217,"box":{"x":116,"y":257,"width":738,"height":12}},{"id":"250058b7-6041-4d3f-944b-5eea57f11a74","block_type":"box","text":"and, when aligned, can better position a company to be resilient in the face of a changing business","page_number":217,"box":{"x":116,"y":273,"width":739,"height":12}},{"id":"25e430ce-6325-487d-a02e-2175c603d430","block_type":"box","text":"environment, help reduce the risks of corporate or employee misconduct, and attract and retain the","page_number":217,"box":{"x":116,"y":288,"width":740,"height":12}},{"id":"fdfc7c3d-8489-416e-90ea-43e94f1929d4","block_type":"box","text":"caliber of workers necessary to deliver financial performance over time.","page_number":217,"box":{"x":116,"y":304,"width":535,"height":12}},{"id":"2a3d26c5-9ab5-4a5f-9c4d-935d25b3d789","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies","page_number":217,"box":{"x":117,"y":337,"width":754,"height":12}},{"id":"b9fa5598-939f-46c9-8f50-ca4ea215cfc0","block_type":"box","text":"and procedures are in place to help management meet its strategic objectives within an agreed risk","page_number":217,"box":{"x":116,"y":352,"width":742,"height":12}},{"id":"98b28356-e1bc-4142-9949-2c799f3c7ba2","block_type":"box","text":"tolerance.","page_number":217,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"153dab64-3ddb-48f7-9eb5-b44a56939d35","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the","page_number":217,"box":{"x":116,"y":400,"width":739,"height":12}},{"id":"59158272-ebfe-4047-9312-a5d94e9bad9b","block_type":"box","text":"chief executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the","page_number":217,"box":{"x":116,"y":416,"width":704,"height":12}},{"id":"e9446c70-594d-4e67-97d1-c7a6b4f87146","block_type":"box","text":"performance of the CEO and other key executives, determining executive compensation, ensuring a","page_number":217,"box":{"x":117,"y":431,"width":747,"height":12}},{"id":"0fac8399-296c-4d72-aa93-d324180b8f3b","block_type":"box","text":"rigorous audit, overseeing strategy execution and risk management and engaging with shareholders,","page_number":217,"box":{"x":117,"y":447,"width":753,"height":12}},{"id":"1cd245b5-2a0e-436c-98cb-c16be21ed078","block_type":"box","text":"and other stakeholders, as necessary.","page_number":217,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"6d18c937-a74c-4278-9862-9fb69af16a55","block_type":"box","text":"Composition and effectiveness","page_number":217,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"c497c09a-57c7-44d9-a4bb-656b12559a0d","block_type":"box","text":"Appointment process","page_number":217,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"eb560e44-00c1-43ce-a4c1-58c1b1504c2e","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to","page_number":217,"box":{"x":116,"y":560,"width":708,"height":12}},{"id":"67058626-8b6b-4057-a732-e63f49ac9c4a","block_type":"box","text":"ensuring the board is composed of directors with the appropriate mix of skills and experience.","page_number":217,"box":{"x":116,"y":576,"width":700,"height":12}},{"id":"bf95d999-5ff4-422d-9ebf-c0502b26787f","block_type":"box","text":"Generally, the board or a sub-committee determines the general criteria given the company’s","page_number":217,"box":{"x":117,"y":591,"width":695,"height":12}},{"id":"99208a06-1b2d-4c3b-a883-e3eddac92a19","block_type":"box","text":"circumstances (e.g., sector, maturity, geographic footprint) and any additional criteria for a specific role","page_number":217,"box":{"x":116,"y":607,"width":767,"height":12}},{"id":"924c2bea-3169-432f-bb60-90df5c8ed0ab","block_type":"box","text":"being filled (e.g., financial expertise, industry track record). To inform the process, we encourage","page_number":217,"box":{"x":117,"y":622,"width":721,"height":12}},{"id":"07920211-f6f7-4cc2-9067-3014ccb6680c","block_type":"box","text":"companies to review the skills and experience of incumbent directors to identify any gaps and whether","page_number":217,"box":{"x":116,"y":638,"width":764,"height":12}},{"id":"32522007-84b6-42a5-a57a-f27d106e3c37","block_type":"box","text":"the skills and experience of a director candidate would be additive. We welcome disclosures that","page_number":217,"box":{"x":116,"y":653,"width":722,"height":12}},{"id":"a2d696a8-a3bf-4c73-84ac-2f1eb6436f2e","block_type":"box","text":"explain how the board considered different skills and experience to ensure that the directors","page_number":217,"box":{"x":116,"y":669,"width":682,"height":12}},{"id":"261b9be2-ea09-444d-b552-9ab9c9d4e6cd","block_type":"box","text":"collectively can be effective in fulfilling their responsibilities. We assess a company’s board","page_number":217,"box":{"x":116,"y":684,"width":672,"height":12}},{"id":"8dc77210-5ffb-44b1-83b7-63c8f55f2a1f","block_type":"box","text":"composition against that of its peer group and local market requirements.","page_number":217,"box":{"x":116,"y":700,"width":542,"height":12}},{"id":"037c542d-a5fc-40a5-ac5f-f862f1feed0b","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any","page_number":217,"box":{"x":116,"y":733,"width":709,"height":12}},{"id":"1e0d3f1c-bfa6-471b-a282-7031251dffb1","block_type":"box","text":"particular board composition in our engagements or voting but seek to understand how well placed a","page_number":217,"box":{"x":117,"y":748,"width":746,"height":12}},{"id":"571b52f5-be83-40d3-a281-2db22761eba7","block_type":"box","text":"board is to act in investors’ interests. We may vote against the election of the most senior independent","page_number":217,"box":{"x":117,"y":764,"width":760,"height":12}},{"id":"2482cbd4-d367-4b62-8747-d715b2746ef6","block_type":"box","text":"director, or the chair of the relevant committee, where a company has not demonstrated it has an","page_number":217,"box":{"x":116,"y":779,"width":720,"height":12}},{"id":"28dd304c-c02a-4854-8098-5854fd20101d","block_type":"box","text":"appointment process that results in a high functioning board with the appropriate complement of skills","page_number":217,"box":{"x":116,"y":795,"width":753,"height":12}},{"id":"5f611228-7e5b-4dee-886a-41653c1f873a","block_type":"box","text":"and experience amongst the directors to support strong financial performance over time. We may vote","page_number":217,"box":{"x":116,"y":810,"width":759,"height":12}},{"id":"9eda8735-69a0-4bd7-b211-5cbb3f96c0b5","block_type":"box","text":"against newly nominated directors who do not seem to have the appropriate skills or experience to","page_number":217,"box":{"x":116,"y":826,"width":736,"height":12}},{"id":"cae74ab4-5656-422a-b69f-b1c654eaf035","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":217,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"dd008fd1-5953-4d1b-8878-1357090bd6b2","block_type":"box","text":"6","page_number":217,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"85e15f9f-efe2-4c04-80bd-4eaf11533fd5","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance principles","page_number":217,"box":{"x":170,"y":866,"width":706,"height":10}},{"id":"e8aa8830-6a22-4d56-bf8d-6deb63c69e44","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":217,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"4f96a96f-9108-4c3a-aff9-9284593e2223","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"fec780e3-1fdf-4adb-92f5-e7cb8a7a65f4","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":217,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"947f22e9-cebe-4f24-a4e8-3488bd0c3e8c","block_type":"box","text":"6","page_number":217,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"174a3d29-eddd-404f-a43f-faa1285afb6e","block_type":"box","text":"NM1026U-6004408-217/267","page_number":217,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ac93f0e5-c58b-44d9-a35a-a85ba54b9fba","block_type":"box","text":"Independence","page_number":218,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"c8e82d16-c5b4-405e-b5b8-94676a6358e9","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (e.g.,","page_number":218,"box":{"x":117,"y":116,"width":706,"height":12}},{"id":"b701f0e4-29c9-4896-b68a-404e0129e2e4","block_type":"box","text":"government or employees) is of paramount importance to the protection of the interests of minority","page_number":218,"box":{"x":116,"y":132,"width":736,"height":12}},{"id":"f159c3e1-4004-4f04-acea-86dfedc437fb","block_type":"box","text":"shareholders such as BlackRock’s clients. We consider it good practice for at least half the directors to","page_number":218,"box":{"x":116,"y":147,"width":766,"height":12}},{"id":"e355d42d-49e4-4cee-a65a-50b74dfcb32f","block_type":"box","text":"be independent and free from conflicts of interest or undue influence.","page_number":218,"box":{"x":117,"y":163,"width":510,"height":12}},{"id":"eccb8fc9-0abe-4fbe-b977-407e231b82a2","block_type":"box","text":"7","page_number":218,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"27682fa3-82e8-4ca5-b619-82887024dd4c","block_type":"box","text":"This also helps to ensure that","page_number":218,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"e9daaebd-ac30-4da3-9636-09624ffb6875","block_type":"box","text":"board committees are composed of a sufficient number of independent directors. Companies domiciled","page_number":218,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"bbda7119-e0d7-4fa3-8a6f-b67df1e6030c","block_type":"box","text":"in markets with a higher threshold for board independence should meet those local requirements.","page_number":218,"box":{"x":117,"y":194,"width":727,"height":12}},{"id":"04a8bd6d-bef7-4419-a5f7-ebc5103269b4","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient","page_number":218,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"42f5adde-f343-4c16-921f-a86c44106cba","block_type":"box","text":"balance of independence. We may also vote against the election of the chair of the committee","page_number":218,"box":{"x":117,"y":239,"width":701,"height":12}},{"id":"31c0d2c9-fada-477f-80bf-fb1c2dad6a5b","block_type":"box","text":"responsible for board composition if this is a perennial issue.","page_number":218,"box":{"x":117,"y":254,"width":453,"height":12}},{"id":"c9cab5fb-db9b-4350-aea7-13c0374953ba","block_type":"box","text":"Independent board leadership","page_number":218,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"75e43506-b2a5-47c8-8b10-ca6e470585c6","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to","page_number":218,"box":{"x":117,"y":312,"width":718,"height":12}},{"id":"5a680ae9-6ab9-4cf4-a098-d8d91531a46a","block_type":"box","text":"independent board leadership. One is a non-executive, independent chair of the board who is","page_number":218,"box":{"x":117,"y":327,"width":697,"height":12}},{"id":"798e9692-0784-44e5-922a-fbfda95606db","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":218,"box":{"x":117,"y":342,"width":738,"height":12}},{"id":"d027a58f-c116-457c-89d7-7618066ca371","block_type":"box","text":"independent director, who is responsible for coordinating with the other non-executive directors and","page_number":218,"box":{"x":117,"y":357,"width":742,"height":12}},{"id":"6d30b45a-a6f2-40b1-a9b2-1aadb745179e","block_type":"box","text":"working closely with the executive chair on the board agenda and other board procedures. In this case,","page_number":218,"box":{"x":116,"y":372,"width":770,"height":11}},{"id":"a72a89ae-2500-4a3b-9ff6-5f89b9165daf","block_type":"box","text":"the executive chair and the lead independent director work together to ensure the board is effectively","page_number":218,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"342797f6-dfe0-4e19-978c-ae64725c1090","block_type":"box","text":"fulfilling its responsibilities. In our view, the independent leader of the board, and/or the chair of a","page_number":218,"box":{"x":116,"y":401,"width":723,"height":12}},{"id":"6d25bec3-4c2f-4145-8fff-3fa133c1e8c9","block_type":"box","text":"relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":218,"box":{"x":117,"y":416,"width":727,"height":12}},{"id":"f6c57f33-8a00-4d62-8102-bd06e030b7ca","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board","page_number":218,"box":{"x":116,"y":431,"width":691,"height":12}},{"id":"b851f396-1df1-42de-8e49-a493365297fd","block_type":"box","text":"leadership model and how it serves the interests of shareholders.","page_number":218,"box":{"x":117,"y":446,"width":489,"height":12}},{"id":"2cfa6478-5bac-4dce-9b81-50900228489c","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if","page_number":218,"box":{"x":116,"y":475,"width":740,"height":12}},{"id":"b11fe6d8-aee4-43ff-bfc6-edb5cae12f7d","block_type":"box","text":"there is not an identified independent leader of the board with clear responsibilities for board","page_number":218,"box":{"x":116,"y":490,"width":689,"height":12}},{"id":"8508ee71-4506-45ec-8303-fdfd09272bf8","block_type":"box","text":"performance. We may vote against the most senior independent director if the board has a policy of","page_number":218,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"cd0744bd-b2ba-4266-9d65-054028e7186e","block_type":"box","text":"not engaging with shareholders.","page_number":218,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"5aad7ac7-81e0-4eb2-8257-eaaf6f12712c","block_type":"box","text":"Tenure and succession","page_number":218,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"ecaab6e6-5101-4228-b721-2ab57992bfed","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":218,"box":{"x":117,"y":580,"width":745,"height":12}},{"id":"f82a8aee-743d-404c-9dee-e50baa42ef1d","block_type":"box","text":"expected to serve, in line with market norms where those exist. We find it helpful when companies","page_number":218,"box":{"x":116,"y":595,"width":733,"height":12}},{"id":"dd753410-81f3-458b-b0cf-2a3a059c5f99","block_type":"box","text":"disclose their approach to director tenure particularly around the contributions of directors who have","page_number":218,"box":{"x":116,"y":611,"width":745,"height":12}},{"id":"21f27244-288f-412a-a327-569c79b2c034","block_type":"box","text":"served for longer periods than typically provided for under local practice. In our experience, long","page_number":218,"box":{"x":116,"y":626,"width":718,"height":13}},{"id":"2cdcdeb3-f135-4049-9b50-2e53d2d8917e","block_type":"box","text":"serving directors could become less independent given their long-term relationship with management","page_number":218,"box":{"x":116,"y":642,"width":755,"height":12}},{"id":"c0ebf917-8485-423e-93fb-1acb59fedb77","block_type":"box","text":"and involvement in past board decisions.","page_number":218,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"00f55c65-2413-4890-9d2e-2b075825f8ec","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances","page_number":218,"box":{"x":116,"y":687,"width":750,"height":12}},{"id":"33f6e580-32bd-4029-adc6-f7502d3df9f8","block_type":"box","text":"renewal through the regular introduction of directors with fresh perspectives and expertise with","page_number":218,"box":{"x":117,"y":702,"width":699,"height":12}},{"id":"a102be4a-d031-469a-a542-766e14d0d81a","block_type":"box","text":"continuity through the retention of directors with long-term knowledge of the board and company.","page_number":218,"box":{"x":116,"y":718,"width":718,"height":12}},{"id":"91e36bd4-011c-491c-a325-6def04668340","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate","page_number":218,"box":{"x":117,"y":746,"width":675,"height":12}},{"id":"fee38b8e-60f8-4302-8f8f-df41b27e37b8","block_type":"box","text":"governance best practices, we may vote against the election of the chair of the committee responsible","page_number":218,"box":{"x":116,"y":760,"width":757,"height":12}},{"id":"01cab991-3e54-4e25-beb3-e66680c818f2","block_type":"box","text":"for board composition if a company does not clearly disclose its approach to director tenure and board","page_number":218,"box":{"x":116,"y":774,"width":757,"height":12}},{"id":"99209137-b347-402f-8b3c-778e1a85c540","block_type":"box","text":"renewal. We may vote against the election of directors who have served for more years than is typical","page_number":218,"box":{"x":117,"y":788,"width":754,"height":12}},{"id":"b41020af-8fca-4df5-8bf5-04c62b4d1123","block_type":"box","text":"in markets with specific guidance, where the case for their continued service is not evident.","page_number":218,"box":{"x":117,"y":803,"width":673,"height":12}},{"id":"14dcdd7f-8d16-4c50-b350-ea9b6d3b4cad","block_type":"box","text":"7","page_number":218,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"66b59774-5e9f-4d01-a964-0471446cbc2e","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":218,"box":{"x":170,"y":828,"width":659,"height":9}},{"id":"f4d3a203-e7d3-4d86-952a-2aad8f710b4f","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":218,"box":{"x":170,"y":841,"width":659,"height":9}},{"id":"ed6c1a37-3da6-4f72-8bae-074de3f0f16d","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which could, or","page_number":218,"box":{"x":170,"y":854,"width":702,"height":9}},{"id":"0a5647de-b989-4542-84bd-83db54b9ccb0","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":218,"box":{"x":170,"y":866,"width":703,"height":10}},{"id":"19a6b40a-ee42-4493-9d13-e8610441cf51","block_type":"box","text":"and shareholders.","page_number":218,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"e76b1a1a-dac1-495c-b08c-7f525c1821c7","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b52a2b32-a8b6-4371-ac20-278a39f8de14","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":218,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"88d9a5ab-d21c-47d7-b84a-5dc5591e2ebb","block_type":"box","text":"7","page_number":218,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"2ef3e011-6e2f-49f4-8320-ff63faaa9684","block_type":"box","text":"NM1026U-6004408-218/267","page_number":218,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"87a585d5-8126-4790-ad73-8a545c624bf3","block_type":"box","text":"Capacity","page_number":219,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"560e9f41-1161-4066-b74d-560b8bda71a7","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":219,"box":{"x":116,"y":118,"width":757,"height":13}},{"id":"c8f70981-d63d-48b6-a11a-e4614265593f","block_type":"box","text":"view, an effective board will assess the ability of its members to maintain an appropriate focus on","page_number":219,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"56923a04-70f4-4f8b-b2e4-5be3efa7fa63","block_type":"box","text":"board matters and the company taking into consideration competing responsibilities. We recognize that","page_number":219,"box":{"x":117,"y":150,"width":770,"height":12}},{"id":"0a88cee4-a641-49fd-88f2-a8c1ebf99588","block_type":"box","text":"board leadership roles vary across markets in responsibilities and required time commitment but note","page_number":219,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"a19d0820-fd5b-410a-a752-37eb7d99ab9d","block_type":"box","text":"that they are generally more intensive than a standard directorship. We will take local norms and","page_number":219,"box":{"x":116,"y":181,"width":721,"height":12}},{"id":"ac43bb07-7d10-414f-b95a-675133c43515","block_type":"box","text":"practices into consideration when making our voting determinations across markets.","page_number":219,"box":{"x":117,"y":196,"width":628,"height":12}},{"id":"28c29315-929a-4bec-bfeb-1ca2f04a7c0d","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively","page_number":219,"box":{"x":116,"y":227,"width":769,"height":13}},{"id":"f7805525-a05a-4286-94b0-706278be8e4e","block_type":"box","text":"fulfil their duties to the board and company.","page_number":219,"box":{"x":116,"y":243,"width":326,"height":12}},{"id":"488e3e01-7c33-4f62-a165-837b4a94fd0f","block_type":"box","text":"Director elections","page_number":219,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"ae890fe7-3437-4d13-b667-db4656c2c40a","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A","page_number":219,"box":{"x":117,"y":306,"width":720,"height":12}},{"id":"06ce86eb-390d-446a-8af4-57c1832ed221","block_type":"box","text":"classified board structure","page_number":219,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"f0759aa2-f812-45d5-9fca-ddccb7f8e3a8","block_type":"box","text":"8","page_number":219,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"52308659-8f39-41b5-849b-f44203212f1d","block_type":"box","text":"may be justified by a company when it needs consistency and stability","page_number":219,"box":{"x":309,"y":321,"width":530,"height":12}},{"id":"d6d71596-3474-44ad-8dbd-e571aab31808","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":219,"box":{"x":116,"y":337,"width":754,"height":12}},{"id":"c55b8758-b054-401a-82b1-48efcf1fad95","block_type":"box","text":"as closed-end funds).","page_number":219,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"761877ab-84e2-499e-8fe9-89958ed12dd0","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in","page_number":219,"box":{"x":116,"y":384,"width":746,"height":12}},{"id":"9d5478d9-2d93-4f7c-9144-727181c17f6b","block_type":"box","text":"bundled slates. We look to companies to provide sufficient information on each director standing for","page_number":219,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"31b3e4be-6344-42c5-b7d8-8fa5ae81de6d","block_type":"box","text":"election so that shareholders can assess their capabilities and suitability. We will generally not support","page_number":219,"box":{"x":116,"y":415,"width":765,"height":12}},{"id":"e8dfbe23-10ba-4210-815d-6298d4acc776","block_type":"box","text":"the election of directors whose names and biographical details have not been disclosed sufficiently in","page_number":219,"box":{"x":116,"y":430,"width":755,"height":12}},{"id":"19779b66-54d7-41f9-a7a8-169e834fc439","block_type":"box","text":"advance of the shareholder meeting.","page_number":219,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"43edcc4b-7b4d-4404-a9b1-60d1b0affc3d","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at","page_number":219,"box":{"x":117,"y":477,"width":746,"height":12}},{"id":"f0337d3c-ebb3-4a08-a7c5-94e453ebad52","block_type":"box","text":"the shareholder meeting. Where a company’s practices differ, we look to the board to provide a","page_number":219,"box":{"x":116,"y":493,"width":712,"height":12}},{"id":"2e7c284a-6412-4fbd-9a6a-1c5d5612c81f","block_type":"box","text":"detailed explanation as to how its approach best serves investors’ interests.","page_number":219,"box":{"x":116,"y":508,"width":567,"height":12}},{"id":"20a78ea7-afe3-4317-9463-2f971ca777c5","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of","page_number":219,"box":{"x":116,"y":540,"width":710,"height":12}},{"id":"c7f68108-df93-477d-913c-6d56c47bd526","block_type":"box","text":"directors and/or a simple majority vote standard for director elections. We may vote against all the","page_number":219,"box":{"x":116,"y":555,"width":732,"height":12}},{"id":"f61b455b-f877-4ee7-b9c5-b9a82910bb10","block_type":"box","text":"directors standing for election as part of a single slate if we have concerns about the profile or","page_number":219,"box":{"x":116,"y":571,"width":701,"height":12}},{"id":"93d422a1-3d86-4a54-8d16-54073227a89d","block_type":"box","text":"performance of an individual director.","page_number":219,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"c44cfe38-2b9f-41a3-ad83-a2f1a7aeb3f6","block_type":"box","text":"Committees","page_number":219,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"cedaa651-6cf9-4588-bfcd-de348978a3c9","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and","page_number":219,"box":{"x":117,"y":649,"width":757,"height":12}},{"id":"c1528183-ed72-4d42-bf4a-bddb53bb505d","block_type":"box","text":"risk, governance and human capital, and executive compensation, amongst other matters. We do not","page_number":219,"box":{"x":117,"y":665,"width":751,"height":12}},{"id":"6aba5d68-b68f-499b-be10-c8fe8cb0860d","block_type":"box","text":"prescribe to companies what committees they should establish, but we seek to understand the board’s","page_number":219,"box":{"x":117,"y":680,"width":760,"height":12}},{"id":"26ab44b0-408f-4717-857c-eec73afa14d8","block_type":"box","text":"rationale for the committee structure it determines is appropriate. We note that, in some markets,","page_number":219,"box":{"x":117,"y":696,"width":717,"height":12}},{"id":"36ac4748-fdbb-48ea-ba52-e2691d264892","block_type":"box","text":"regulation requires such committees. The responsibilities of each committee should be clear, and the","page_number":219,"box":{"x":117,"y":711,"width":748,"height":12}},{"id":"9493a958-fc6c-48fa-8c80-4e440fb9848b","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":219,"box":{"x":117,"y":727,"width":706,"height":12}},{"id":"9bb0aa5c-79a8-4099-a46b-22ca9d990bb3","block_type":"box","text":"committees. It is helpful to investor understanding when the board discloses the structure,","page_number":219,"box":{"x":116,"y":742,"width":665,"height":12}},{"id":"8a88b89a-0a22-4279-a178-26c08a0e6cb2","block_type":"box","text":"membership, proportion of independent directors, and responsibilities of each committee. The","page_number":219,"box":{"x":117,"y":758,"width":694,"height":12}},{"id":"e7d819ff-00c9-4566-84d0-ef4c89f16013","block_type":"box","text":"responsibilities we typically see assigned to the three most common committees include:","page_number":219,"box":{"x":117,"y":773,"width":656,"height":12}},{"id":"e004622a-c006-41ad-839f-8a1f3e40d0fc","block_type":"box","text":"• Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management","page_number":219,"box":{"x":117,"y":805,"width":747,"height":12}},{"id":"06c7bb63-f056-412a-a7f5-7613189cdba7","block_type":"box","text":"and compliance with legal and regulatory requirements; may also play an oversight role in relation","page_number":219,"box":{"x":150,"y":820,"width":725,"height":12}},{"id":"d9fcd97d-1b0c-46e1-87ee-5511f5bc9295","block_type":"box","text":"to the internal audit function and whistleblowing mechanisms.","page_number":219,"box":{"x":150,"y":836,"width":460,"height":12}},{"id":"100917c0-0077-4cd6-aa19-137ad9e64e11","block_type":"box","text":"8","page_number":219,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"f4703490-4825-4f46-a715-8e8280020915","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result,","page_number":219,"box":{"x":122,"y":862,"width":744,"height":12}},{"id":"3373032a-798c-4977-ad9e-1861f88eeae9","block_type":"box","text":"only one class of directors stands for election in any one year.","page_number":219,"box":{"x":150,"y":877,"width":464,"height":12}},{"id":"8f2222b8-a7bf-4db1-bb9a-7ff4f9bb01f3","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":219,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f9733dfe-baa1-45d7-9f52-b18fbc6c6423","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":219,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"45cb2657-a32a-4572-97f4-201148e591eb","block_type":"box","text":"8","page_number":219,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"235f65cd-4e74-419c-b501-368bd688146f","block_type":"box","text":"NM1026U-6004408-219/267","page_number":219,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"09f94cd6-9995-4e59-8ab5-005dd8d68241","block_type":"box","text":"• Nominating, governance and human capital – oversight responsibilities for corporate governance","page_number":220,"box":{"x":117,"y":87,"width":756,"height":12}},{"id":"5f3131c6-417d-45fc-9636-90a53b4d3580","block_type":"box","text":"principles and practices of the company, including the periodic review of board performance;","page_number":220,"box":{"x":150,"y":102,"width":691,"height":13}},{"id":"45989d08-3272-46d1-8f32-6e0623b9b4e1","block_type":"box","text":"responsibility for succession planning for CEO and key board roles, as well as the director","page_number":220,"box":{"x":150,"y":118,"width":672,"height":12}},{"id":"1fc9f2ed-5cc1-4a98-8108-fc548ae3aae7","block_type":"box","text":"appointment process; may also have oversight responsibilities for human capital management","page_number":220,"box":{"x":150,"y":134,"width":703,"height":12}},{"id":"a4ad3108-b43f-4554-8182-4c8213a31be7","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":220,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"8c9163d7-6dcb-499c-b4bc-f336dca76ac5","block_type":"box","text":"• Executive compensation – determines the compensation policies and programs for the CEO and","page_number":220,"box":{"x":117,"y":174,"width":755,"height":12}},{"id":"67263c7c-b71b-4341-bcdc-c570a24a69bf","block_type":"box","text":"other executive officers, approves annual awards and payments under the policies; may also have","page_number":220,"box":{"x":150,"y":189,"width":735,"height":12}},{"id":"2fde7997-d8a2-4162-95f1-a5c94c1fea67","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":220,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"c3154471-7140-4117-9dad-60a207279b19","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee","page_number":220,"box":{"x":116,"y":239,"width":765,"height":12}},{"id":"f0ccd34a-52bc-4688-af8b-e90e92f2d5cb","block_type":"box","text":"members to convey concerns about how a committee has undertaken its responsibilities. We may vote","page_number":220,"box":{"x":117,"y":255,"width":767,"height":12}},{"id":"fa42d1c8-592c-4be6-bdaf-27e8d96c389e","block_type":"box","text":"against the election of the most senior non-executive director if there is not a clearly disclosed","page_number":220,"box":{"x":116,"y":270,"width":702,"height":12}},{"id":"3a259d2b-0537-4048-a727-437c1865f5f9","block_type":"box","text":"approach to board committees.","page_number":220,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"75474e41-c6a0-4b6f-a5c0-80ed22aeddd0","block_type":"box","text":"Board and director evaluation","page_number":220,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"6e5232e7-6af0-41dc-925b-692d8ca5cf9b","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the","page_number":220,"box":{"x":116,"y":354,"width":729,"height":12}},{"id":"0fc019f1-0e66-48c8-9493-84f267c052f6","block_type":"box","text":"board, the committees, the chair and individual directors. Periodically, this review could be undertaken","page_number":220,"box":{"x":117,"y":369,"width":762,"height":12}},{"id":"1690e083-ece3-4710-a3e1-09fd1a410c63","block_type":"box","text":"by an independent third party able to bring objective perspectives to the board on governance and","page_number":220,"box":{"x":117,"y":385,"width":732,"height":12}},{"id":"995b7831-45bd-4931-957b-b9e62e8a405a","block_type":"box","text":"performance. We encourage companies to disclose their approach to and the objectives of","page_number":220,"box":{"x":117,"y":400,"width":677,"height":12}},{"id":"10bab301-13f9-445e-94ac-7dd4d6c712e2","block_type":"box","text":"evaluations, including any changes made to the board’s approach as a result.","page_number":220,"box":{"x":116,"y":416,"width":581,"height":12}},{"id":"0c9fd0f6-09e4-4482-a7fd-cf19025a1bfb","block_type":"box","text":"Access to independent advice","page_number":220,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"ce7057c3-593f-4d57-bacc-a18ec5655efe","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they","page_number":220,"box":{"x":116,"y":484,"width":723,"height":12}},{"id":"610a1559-9d2f-4166-99ec-47fc3e997ddc","block_type":"box","text":"should have access to independent advice. In certain circumstances, it may be helpful to boards to","page_number":220,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"ab301743-c947-4df1-8625-72a114968ff6","block_type":"box","text":"retain independent third parties to advise on critical matters. These might include new industry","page_number":220,"box":{"x":117,"y":515,"width":703,"height":12}},{"id":"ae6cde16-b0f8-43a1-ac76-e0dc06e4e186","block_type":"box","text":"developments such as emergent and disruptive technology, operating events with material","page_number":220,"box":{"x":116,"y":531,"width":676,"height":12}},{"id":"a04d262d-7bf1-4111-a879-b6cffc136dd5","block_type":"box","text":"consequences for the company’s reputation and/or performance, or significant transactions. Board","page_number":220,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"03dc87f8-ac36-4481-9c2d-ea069dfc11f2","block_type":"box","text":"committees may similarly retain third parties to advise them on specialist matters such as audit,","page_number":220,"box":{"x":116,"y":562,"width":713,"height":12}},{"id":"0895f3dc-1232-4db3-a56f-564938b8a737","block_type":"box","text":"compensation and succession planning.","page_number":220,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"7766c964-dd45-4555-b52b-b1ee586d37d9","block_type":"box","text":"Executive compensation","page_number":220,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"031a4070-e6de-4bdb-b77c-e2b4bc2ca3be","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to","page_number":220,"box":{"x":117,"y":655,"width":760,"height":12}},{"id":"6e23a5fc-5e90-4aef-a3e2-41eb1ca0a76e","block_type":"box","text":"recruit, retain and reward the caliber of executive management necessary to lead and operate the","page_number":220,"box":{"x":117,"y":670,"width":724,"height":12}},{"id":"7ef5f8dc-386d-420a-95b1-d5467ebeac6c","block_type":"box","text":"company to deliver superior financial returns over time. We focus on alignment between variable pay","page_number":220,"box":{"x":116,"y":685,"width":748,"height":13}},{"id":"bfbce3db-88d1-4c77-b0ad-9e2962ac9a76","block_type":"box","text":"and a company’s financial performance.","page_number":220,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"03d76dbd-fb07-4dc1-8d10-ffe7cc7dae1e","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus","page_number":220,"box":{"x":117,"y":735,"width":746,"height":12}},{"id":"dee15f92-9ae1-460a-b04d-799f90bbd638","block_type":"box","text":"that rewards performance against short-term metrics, incentives—most often share-based- that reward","page_number":220,"box":{"x":116,"y":751,"width":762,"height":12}},{"id":"cb835e96-27d0-4eba-93cc-aa99557a3033","block_type":"box","text":"performance against long-term metrics, and pensions and benefits. In our observation, base salary,","page_number":220,"box":{"x":117,"y":766,"width":736,"height":12}},{"id":"0104da74-d47f-40fe-bf73-b2ba79297e88","block_type":"box","text":"pensions and benefits are largely set relative to market norms and benchmarks. The annual bonus and","page_number":220,"box":{"x":117,"y":782,"width":763,"height":12}},{"id":"10fe9cad-f5a9-4b23-9e7b-98975ae6e9e0","block_type":"box","text":"share-based incentive, or variable pay plans, tend to be tailored to the company, its sector and long","page_number":220,"box":{"x":116,"y":797,"width":744,"height":12}},{"id":"4a8fcba0-7ce0-4929-9579-653cde78dc36","block_type":"box","text":"term strategy, as well as the individuals the board is seeking to recruit and motivate.","page_number":220,"box":{"x":116,"y":813,"width":622,"height":12}},{"id":"bacdf549-c7bf-4b30-9c73-dbc9edbdcadc","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a","page_number":220,"box":{"x":117,"y":847,"width":693,"height":12}},{"id":"d3f6e7ce-4165-4ad4-a4d5-8f81a9c91898","block_type":"box","text":"company’s approach to executive compensation on a case-by-case basis. We rely on companies","page_number":220,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"5bf8d278-ec21-423b-9d93-e9f7eca9e7ac","block_type":"box","text":"providing sufficient quantitative and qualitative information in their disclosures to enable shareholders","page_number":220,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"18f35563-8a28-473c-818e-6b29f06ef71f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":220,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"e1341198-3b1a-4424-9b75-77e68e901edc","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":220,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"e285e7ad-0bd4-4a5b-9f5f-d8eb8df4e0c9","block_type":"box","text":"9","page_number":220,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"6f8beaff-5062-4bb5-a400-d9652d1d666d","block_type":"box","text":"NM1026U-6004408-220/267","page_number":220,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"39d2e7d3-755a-47cb-ba0a-686ce638548b","block_type":"box","text":"to understand the compensation arrangements and assess the alignment with investors’ interests.","page_number":221,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"0a0a293d-30f1-4cd7-8463-c7a37bf1c74f","block_type":"box","text":"Features we look for in compensation arrangements include:","page_number":221,"box":{"x":117,"y":102,"width":454,"height":13}},{"id":"a32a60c4-4558-4972-bdfb-0276f070287a","block_type":"box","text":"• Fixed pay components, including base salary, benefits and prerequisites that are appropriate in","page_number":221,"box":{"x":117,"y":133,"width":744,"height":12}},{"id":"570144c8-17e3-48a0-9b9b-f903218ac97e","block_type":"box","text":"the context of the company’s size, sector and market.","page_number":221,"box":{"x":150,"y":148,"width":402,"height":12}},{"id":"e6abf698-6fba-40fe-9659-87282332ac54","block_type":"box","text":"• Variable pay subject to performance metrics that are closely linked to the company’s short- and","page_number":221,"box":{"x":117,"y":171,"width":745,"height":12}},{"id":"954d908f-5ba6-4fe1-a47e-7384e765766a","block_type":"box","text":"long-term strategic objectives.","page_number":221,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"bd9b5c14-136f-436b-b49e-da918f6f0bd4","block_type":"box","text":"• Long-term incentives that motivate sustained performance across a multi-year period.","page_number":221,"box":{"x":117,"y":210,"width":674,"height":12}},{"id":"3c61f69e-9bd0-4fce-9772-365c0d85e197","block_type":"box","text":"• A balance between fixed and variable pay, short- and long-term incentives, and specific","page_number":221,"box":{"x":117,"y":233,"width":687,"height":12}},{"id":"fc9345d8-3ca4-48ce-85bf-2fd265133fd5","block_type":"box","text":"instruments (cash and equity awards) that promotes pay program durability and seldom","page_number":221,"box":{"x":150,"y":248,"width":654,"height":12}},{"id":"82536aea-54cd-443b-8036-4cbf9569cf92","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":221,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"1ae65564-173e-4973-96e4-4b8ec9e7de7e","block_type":"box","text":"• Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":221,"box":{"x":117,"y":287,"width":720,"height":12}},{"id":"e09dc3cd-599a-460e-a018-42c97a37c614","block_type":"box","text":"• Board discretion, if allowed within the variable pay arrangements, to be used sparingly,","page_number":221,"box":{"x":117,"y":310,"width":683,"height":12}},{"id":"86a98eb3-d07e-4967-b5ba-bb0216c02aa0","block_type":"box","text":"responsibly and transparently.","page_number":221,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"d9de8805-f9b3-4fcf-85d7-ccdffa66f920","block_type":"box","text":"• A requirement, that participants in long-term share-based incentive plans build a meaningful","page_number":221,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"21fa4313-93a6-4b18-a69e-77a81131c2c9","block_type":"box","text":"shareholding in the company within a defined time period, as determined by the board or relevant","page_number":221,"box":{"x":150,"y":363,"width":727,"height":13}},{"id":"31f69c65-fe88-4045-a1d5-b484210c17ff","block_type":"box","text":"board committee.","page_number":221,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"b2c36699-7c65-409a-b402-f5160c135fca","block_type":"box","text":"• Change of control provisions that appropriately balance the interests of executives and","page_number":221,"box":{"x":117,"y":402,"width":681,"height":12}},{"id":"8fb4ef7b-7532-480c-aaa3-a0831b43d426","block_type":"box","text":"shareholders.","page_number":221,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"d6e4e33c-e67b-40a1-ae08-4a4770d3caa5","block_type":"box","text":"• Clawback or malus provisions that allow the company to recoup or hold back variable","page_number":221,"box":{"x":117,"y":440,"width":671,"height":12}},{"id":"e83eb271-4693-43bd-b030-15249a2059a6","block_type":"box","text":"compensation from individuals whose awards were based on fraudulent activities, misstated","page_number":221,"box":{"x":150,"y":456,"width":688,"height":12}},{"id":"329fc435-7278-43f2-bf01-2a5744e3070c","block_type":"box","text":"financial reports, or executive misconduct.","page_number":221,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"d14ca774-cb2b-45bd-8e14-5305e4845a82","block_type":"box","text":"• Severance arrangements that protect the company’s interests but do not cost more than is","page_number":221,"box":{"x":117,"y":494,"width":709,"height":12}},{"id":"0f4da7b9-7cf7-45fc-912f-5cc49713d839","block_type":"box","text":"contractual.","page_number":221,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"978df0fc-eef1-4a48-a49b-3b61a0c05e31","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or","page_number":221,"box":{"x":116,"y":540,"width":757,"height":12}},{"id":"e6ff263d-5e1e-48a1-a355-053020c3f226","block_type":"box","text":"plans, or approve the compensation report where we do not see alignment between executive","page_number":221,"box":{"x":117,"y":556,"width":701,"height":12}},{"id":"96549d4f-4bd0-4c98-9d52-5554bd36b7e6","block_type":"box","text":"compensation arrangements and our clients’ financial interests. When there is not an alternative, or","page_number":221,"box":{"x":116,"y":571,"width":742,"height":12}},{"id":"e608ea31-1420-4e41-bc73-c3773a323260","block_type":"box","text":"where there have been multi-year issues with compensation misaligned with performance, we may","page_number":221,"box":{"x":116,"y":587,"width":738,"height":12}},{"id":"cab19709-8455-482f-8831-f54353858108","block_type":"box","text":"vote against the election of the chair of the responsible committee, or the most senior independent","page_number":221,"box":{"x":116,"y":602,"width":735,"height":12}},{"id":"41a77618-5f9f-4cc0-9fac-b6b60bae06b0","block_type":"box","text":"director.","page_number":221,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"c1eee0fe-3c33-416c-9222-4cf888b32635","block_type":"box","text":"Non-executive director compensation","page_number":221,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"24f26563-e81a-464a-a5cb-d85aab886d3d","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a","page_number":221,"box":{"x":117,"y":686,"width":706,"height":12}},{"id":"f728a8a6-0259-4d71-aa3b-351dd0eee259","block_type":"box","text":"combination of the two. Some companies also pay additional fees for service on board committees or","page_number":221,"box":{"x":116,"y":701,"width":752,"height":12}},{"id":"5905ed3d-2fa7-42d3-8787-915151dc9351","block_type":"box","text":"in board leadership roles. We do not support non-executive directors participating in performance","page_number":221,"box":{"x":117,"y":717,"width":726,"height":12}},{"id":"7e53b55d-7175-40af-8c62-ced674768007","block_type":"box","text":"based incentive plans as doing so may create a conflict of interest and undermine their independence","page_number":221,"box":{"x":117,"y":732,"width":753,"height":12}},{"id":"f4ea1bb2-5ed8-47e3-bc31-5c58de167ce2","block_type":"box","text":"from management, whom they oversee.","page_number":221,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"a85a9053-325a-4b22-920f-5ca415b4bd82","block_type":"box","text":"Capital structure","page_number":221,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"04e7695a-2653-40db-97bf-b8a50497c2a1","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that","page_number":221,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"bffdc669-fa88-4e74-ac8b-167506384aa4","block_type":"box","text":"achieves appropriate capital allocation in support of long-term financial resilience.","page_number":221,"box":{"x":116,"y":832,"width":610,"height":12}},{"id":"d809dcda-5931-4129-89e5-0d4c7e6a99a4","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why","page_number":221,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"8dbafe78-aab2-4ced-a188-b9c0edc91420","block_type":"box","text":"they view these practices to be aligned with shareholders’ interests. We may vote against management","page_number":221,"box":{"x":116,"y":878,"width":772,"height":11}},{"id":"92bcb113-8b1d-41c2-98d9-36097ddcafd8","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":221,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a3cf2d48-4f72-40b7-9ba5-be24bedcbc98","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":221,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"f5fe69aa-727c-41ab-ae19-a944f2ec7be5","block_type":"box","text":"10","page_number":221,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"f6471146-f7eb-4757-90ca-e5be70529ff2","block_type":"box","text":"NM1026U-6004408-221/267","page_number":221,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2264908b-b468-4662-a28e-61cbb176f780","block_type":"box","text":"proposals seeking capital-related authorities, or the election of the most senior independent director, if","page_number":222,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"8c9abb3d-d8aa-4c81-b985-96390f0375b6","block_type":"box","text":"we have concerns about a company’s approach. We may also support a shareholder proposal seeking","page_number":222,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"d6d81f65-06f6-4195-9941-513acba5f9fd","block_type":"box","text":"conversion of shares with differentiated voting rights to a one-share, one-vote standard.","page_number":222,"box":{"x":116,"y":118,"width":655,"height":12}},{"id":"56f76c56-1547-408c-a9dd-feea23cae989","block_type":"box","text":"Share","page_number":222,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"d9756cef-ef48-42cd-bf08-0465e170ee6d","block_type":"box","text":"issuance","page_number":222,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"1d395e1e-0670-4bd9-812b-a63ae37b5bde","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will","page_number":222,"box":{"x":116,"y":179,"width":741,"height":12}},{"id":"0bea2b17-c1b1-4b0c-b26a-97ad8e104b3c","block_type":"box","text":"generally support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent","page_number":222,"box":{"x":116,"y":194,"width":768,"height":12}},{"id":"1626d8bb-6823-41cc-be15-bad58212e67c","block_type":"box","text":"pre-emptive rights. We consider it good practice for companies to seek regular approval of these","page_number":222,"box":{"x":117,"y":210,"width":720,"height":12}},{"id":"ab39050f-7317-4be3-ae0b-eb22f0739d81","block_type":"box","text":"authorities to allow shareholders to take into consideration how prior authorities were used, as well as","page_number":222,"box":{"x":116,"y":226,"width":759,"height":11}},{"id":"63f74684-e82a-486e-8ac1-30dd7ef8a120","block_type":"box","text":"the current circumstances of the company and the market environment.","page_number":222,"box":{"x":116,"y":241,"width":536,"height":12}},{"id":"37c1aea3-f27b-4a75-8039-24b79dd075eb","block_type":"box","text":"Share buybacks","page_number":222,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"9497537c-9a2a-478d-80ca-7f58a603c241","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management","page_number":222,"box":{"x":116,"y":302,"width":746,"height":12}},{"id":"faf9b85b-5fee-477c-9811-31d6b1172f57","block_type":"box","text":"strategy and management’s determination of the appropriate balance between investment that","page_number":222,"box":{"x":116,"y":317,"width":706,"height":12}},{"id":"b5373897-8d88-43d3-8a31-c68d5f82987c","block_type":"box","text":"supports the long-term growth of the company and returning cash to investors. We also take into","page_number":222,"box":{"x":116,"y":333,"width":721,"height":12}},{"id":"e870f86e-6a38-487e-b212-829509f4bbb7","block_type":"box","text":"consideration the effect of a buyback program on the company’s balance sheet and executive","page_number":222,"box":{"x":116,"y":348,"width":701,"height":12}},{"id":"d13961ee-ac4e-41f4-8715-571bbd479a64","block_type":"box","text":"compensation arrangements and the price at which shares are repurchased relative to market price.","page_number":222,"box":{"x":116,"y":364,"width":748,"height":12}},{"id":"68d04405-938a-40d0-a728-18ed3ffb2f10","block_type":"box","text":"We consider it good practice for companies to seek regular approval of these authorities to allow","page_number":222,"box":{"x":116,"y":379,"width":721,"height":12}},{"id":"49d13e9e-76b2-4780-bc09-99a62c465bf1","block_type":"box","text":"shareholders to take into consideration how prior authorities were used, as well as the current","page_number":222,"box":{"x":116,"y":395,"width":700,"height":12}},{"id":"41452dfd-0e33-4529-9873-07d11dd60891","block_type":"box","text":"circumstances of the company and the market environment.","page_number":222,"box":{"x":116,"y":410,"width":451,"height":12}},{"id":"2409107d-ccaf-4217-ad5e-c2e188e83f57","block_type":"box","text":"Dividends","page_number":222,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"64eb392c-ce90-439d-934b-4e67e442ac7b","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further","page_number":222,"box":{"x":116,"y":471,"width":752,"height":12}},{"id":"d6ba4f1b-8c71-47ab-a1e7-44c3116dbccc","block_type":"box","text":"clarification where a proposed dividend appears out of line with the company’s financial position.","page_number":222,"box":{"x":116,"y":487,"width":720,"height":12}},{"id":"77e230be-c4e7-4ca3-94bb-25534653fb98","block_type":"box","text":"Differentiated voting rights","page_number":222,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"60f2ba00-cf58-4f69-9d67-8289f4ca1941","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same","page_number":222,"box":{"x":116,"y":547,"width":710,"height":12}},{"id":"5f43b17f-bbe1-4a37-aabe-e8969ba1bda8","block_type":"box","text":"economic exposure. Certain companies, particularly those new to public markets, could make the case","page_number":222,"box":{"x":116,"y":563,"width":768,"height":12}},{"id":"4bdbd03b-c0ba-4974-a139-1dc6e4875ae3","block_type":"box","text":"to adopt a differentiated voting rights structure, or dual class stock. In those situations, we encourage","page_number":222,"box":{"x":116,"y":578,"width":755,"height":13}},{"id":"9e0a71f5-2efb-47e3-ab5a-8f27de9de7db","block_type":"box","text":"companies to evaluate and seek approval for their capital structure on a periodic basis.","page_number":222,"box":{"x":116,"y":594,"width":650,"height":12}},{"id":"43cffe46-c6bc-48b7-bc21-7c6d699a7680","block_type":"box","text":"Transactions and special situations","page_number":222,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"8bf9c7cc-f634-442a-9409-e551d39b6b9f","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own","page_number":222,"box":{"x":116,"y":662,"width":706,"height":12}},{"id":"d86f3ba8-5052-48dc-b108-1c896e03cabd","block_type":"box","text":"detailed analyses of proposals.","page_number":222,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"934ef21e-e320-4686-9435-6fe2119a8986","block_type":"box","text":"Mergers and acquisitions","page_number":222,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"d2921e6e-05bd-4a84-b370-0b38ef51c4e0","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as","page_number":222,"box":{"x":116,"y":739,"width":740,"height":12}},{"id":"854eace3-cc54-4589-9bcf-983e1394fe63","block_type":"box","text":"minority shareholders. Management should provide an assessment of the proposed transaction’s","page_number":222,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"5ec7a285-75b2-42a7-8075-e022e4a0ebf6","block_type":"box","text":"strategic and financial rationale, along with its execution and operational risks. We review each","page_number":222,"box":{"x":116,"y":770,"width":703,"height":12}},{"id":"a8009d98-a62d-4bc5-9bcf-ba687c3caf74","block_type":"box","text":"transaction independently based on these factors and the degree to which the transaction enhances","page_number":222,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"917446dd-c379-4c96-bcbd-39dc3b2321a2","block_type":"box","text":"shareholder value. The board might consider establishing an ad hoc transaction committee to","page_number":222,"box":{"x":116,"y":801,"width":693,"height":12}},{"id":"abf4014b-9482-4464-ab30-7f1e9d8a560c","block_type":"box","text":"undertake an independent assessment of a significant merger or acquisition, in advance of making its","page_number":222,"box":{"x":117,"y":816,"width":752,"height":12}},{"id":"7897df7a-d2fd-4995-b5de-304f7fc46eb4","block_type":"box","text":"recommendation to shareholders.","page_number":222,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"31783024-1671-4fce-875b-04d32b3a1d43","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial","page_number":222,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"94da0c82-0433-4987-ab7b-1f9ad79539ab","block_type":"box","text":"interests.","page_number":222,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"59c2afed-568f-468c-8184-b03b7aa5b470","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":222,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"c8694382-85ad-4fa9-8dd7-b9ec1ad00c8b","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":222,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"3bf3c8c1-7e89-4ad6-b0aa-b2a8c3f05891","block_type":"box","text":"11","page_number":222,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"7db9e843-3756-489b-b9bd-ba35076e1b58","block_type":"box","text":"NM1026U-6004408-222/267","page_number":222,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b7e6f2dd-08c2-45b4-b8f5-f23ebdaff9d2","block_type":"box","text":"Anti-takeover defenses","page_number":223,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"3e602af9-7f41-4e1a-bcef-428689645f68","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":223,"box":{"x":117,"y":119,"width":757,"height":12}},{"id":"31520bf1-561b-4394-9b54-c8cdf2c33e12","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered","page_number":223,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"b002bb6f-9b75-4eae-8544-35fd0787ebc0","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":223,"box":{"x":117,"y":150,"width":751,"height":12}},{"id":"af8355c1-9eb2-4a2e-87e7-24a0b03e90cc","block_type":"box","text":"takeover that is considered sub-optimal and enable management to seek an improved offer. Similarly,","page_number":223,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"fbaf8f8d-8e49-47ca-b98f-db84a7655dc8","block_type":"box","text":"management could make the case to use a poison pill to block a shareholder activism campaign that","page_number":223,"box":{"x":117,"y":181,"width":751,"height":12}},{"id":"8e5dfb35-279d-4c49-bb77-f7a75716f5c7","block_type":"box","text":"may be counter to the interests of other investors. Defense mechanisms introduced in these","page_number":223,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"47f13621-ce8a-4892-81bd-6a4493295d01","block_type":"box","text":"circumstances should be limited in term and threshold, and also be closely monitored by the","page_number":223,"box":{"x":116,"y":212,"width":688,"height":12}},{"id":"fc101459-581c-48a9-a4fd-24f55e3782e1","block_type":"box","text":"independent members of the board. We consider it good practice for companies to put to a shareholder","page_number":223,"box":{"x":117,"y":227,"width":771,"height":12}},{"id":"72190b2a-0e79-471f-b755-bc4569fc2cb8","block_type":"box","text":"vote any mechanisms expected to be in place for more than 12 months.","page_number":223,"box":{"x":116,"y":243,"width":538,"height":12}},{"id":"8e15bba3-0e96-447c-be33-40a0a4fb3f79","block_type":"box","text":"Shareholder activism","page_number":223,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"a7edbd05-80f5-48c9-8f79-88e46e3e1d9d","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to","page_number":223,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"3b37ee15-5858-461f-9f09-5ed20d243805","block_type":"box","text":"understand their analysis and objectives, once they have publicly disclosed their campaign. We may","page_number":223,"box":{"x":117,"y":322,"width":748,"height":12}},{"id":"2731b9c4-514e-44b3-8bae-e7b23fecff55","block_type":"box","text":"also engage with company management and possibly board members, especially those the activist","page_number":223,"box":{"x":116,"y":337,"width":741,"height":12}},{"id":"b4212ca8-e726-4033-8296-7c9b2cbb9aff","block_type":"box","text":"may be seeking to replace. In our assessment, we evaluate various factors, including the concerns","page_number":223,"box":{"x":117,"y":353,"width":737,"height":12}},{"id":"b0bb8972-4e0e-4fd0-9a87-c0b563b36af3","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":223,"box":{"x":117,"y":368,"width":728,"height":12}},{"id":"758c8cb6-f261-4f2d-a240-12f47b47816d","block_type":"box","text":"plans; and the qualifications of each party’s candidates. We evaluate each contested situation by","page_number":223,"box":{"x":117,"y":384,"width":723,"height":12}},{"id":"6df96716-48a0-4cad-96f5-08f65b26a629","block_type":"box","text":"assessing the potential financial outcome for our clients as minority shareholders.","page_number":223,"box":{"x":116,"y":399,"width":610,"height":12}},{"id":"00901254-1a9f-4d69-b1f3-e29d267fac3c","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent","page_number":223,"box":{"x":116,"y":431,"width":728,"height":12}},{"id":"de92d267-4875-4d16-86ce-fa09cc873dec","block_type":"box","text":"judgment, or the relevant portfolio manager has determined that there is a case for change to enhance","page_number":223,"box":{"x":115,"y":446,"width":767,"height":13}},{"id":"f3a2381d-7b4a-4b3c-8115-d9c9c35d89a8","block_type":"box","text":"shareholder value, or if the incumbent board members do not demonstrate the relevant skills and","page_number":223,"box":{"x":116,"y":462,"width":725,"height":11}},{"id":"9dc0600c-e70d-44f6-9f79-2add8b816472","block_type":"box","text":"expertise or have a poor track record of protecting shareholders’ interests.","page_number":223,"box":{"x":116,"y":477,"width":556,"height":13}},{"id":"ac0a0b85-edf1-44ad-ba37-b50ef0da4aca","block_type":"box","text":"Significant shareholders and related party transactions","page_number":223,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"b106cc07-66d3-4b47-a5cc-d7826ef30baa","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":223,"box":{"x":117,"y":541,"width":768,"height":12}},{"id":"bd6b2aef-e4df-4f42-ae49-15044ec83244","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":223,"box":{"x":117,"y":556,"width":534,"height":12}},{"id":"dc04bbe5-3bd0-4d94-acc9-d6c435089392","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or","page_number":223,"box":{"x":116,"y":588,"width":751,"height":12}},{"id":"2f2ef7ba-d870-4662-a683-ff7fd6ff03bd","block_type":"box","text":"companies affiliated with the public company, to be disclosed in detail and conducted on terms similar","page_number":223,"box":{"x":116,"y":604,"width":760,"height":12}},{"id":"49fbab27-9b44-4dc0-9e46-62141802f95a","block_type":"box","text":"to what would objectively have been agreed with a non-related party. In our view, such transactions","page_number":223,"box":{"x":116,"y":619,"width":743,"height":12}},{"id":"b8711c37-ba6b-4c30-81c1-e904a04f17a2","block_type":"box","text":"should be reviewed and approved by the independent members of the board, and if voted on, only","page_number":223,"box":{"x":116,"y":635,"width":734,"height":12}},{"id":"0d71ceba-ef81-407b-982a-d3dd1f1cbde9","block_type":"box","text":"disinterested shareholders should vote.","page_number":223,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"118a191a-46f6-4260-9158-9600dd647ba3","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":223,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"3918080e-5f97-4e41-b68d-d8c9e275cc62","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s","page_number":223,"box":{"x":117,"y":722,"width":737,"height":12}},{"id":"59379849-6877-4e79-84cc-c6f6624da435","block_type":"box","text":"strategy, its implementation and financial performance, as well as to assess the quality of management","page_number":223,"box":{"x":116,"y":737,"width":765,"height":12}},{"id":"247658ee-a49f-4d0d-81e8-ffc184ce9e62","block_type":"box","text":"and operations and potential for the company to create shareholder value over time. We consider it","page_number":223,"box":{"x":116,"y":753,"width":736,"height":12}},{"id":"f7555716-2337-4501-9814-4433e83e2b57","block_type":"box","text":"good practice for the board to oversee corporate reporting and the policies and procedures","page_number":223,"box":{"x":116,"y":768,"width":674,"height":12}},{"id":"5f962015-53f4-46c1-b999-0fa4d2b87daa","block_type":"box","text":"underpinning the internal audit function and external audit.","page_number":223,"box":{"x":117,"y":784,"width":430,"height":12}},{"id":"a6a9414a-eb83-4ab7-8000-cdad812e9bb7","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other","page_number":223,"box":{"x":116,"y":815,"width":730,"height":13}},{"id":"78c703bc-de85-4659-91fb-5f139688cb90","block_type":"box","text":"stakeholders, on its financial performance and position. It should provide an accurate and balanced","page_number":223,"box":{"x":116,"y":831,"width":742,"height":12}},{"id":"4b692274-3ede-4e20-bc00-e6a49dd5649a","block_type":"box","text":"assessment of the risks and opportunities the company faces in realizing its long-term strategy.","page_number":223,"box":{"x":116,"y":846,"width":712,"height":13}},{"id":"f75c504a-28b0-48e5-9d0b-1f424ba81d94","block_type":"box","text":"Accordingly, the assumptions made by management and reviewed by the auditor in preparing the","page_number":223,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"c69cc4be-279e-4e9b-88a9-623f60652bfc","block_type":"box","text":"financial statements should be reasonable and justified. Financial statements should be prepared in","page_number":223,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"03c3d848-12be-4e72-8b83-d77c65057be0","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":223,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"8a15b995-54f6-4815-9244-6627c093517a","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":223,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"41ba5f83-60f5-49b9-ad70-643edd6eb139","block_type":"box","text":"12","page_number":223,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"bbf7c900-b967-46c0-9226-0d339379083a","block_type":"box","text":"NM1026U-6004408-223/267","page_number":223,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c2a5214f-81c7-40bb-8f5b-f62538eeb92f","block_type":"box","text":"accordance with globally developed reporting standards and any divergence from generally accepted","page_number":224,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"b868b380-2820-4bb9-8838-332c47ce60d8","block_type":"box","text":"accounting principles should be explained in detail and justified. Accounting restatements should be","page_number":224,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"4c6ab919-dca1-458c-9cf3-96219ca8b187","block_type":"box","text":"explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":224,"box":{"x":116,"y":118,"width":638,"height":12}},{"id":"9255f6f0-551a-48a1-8737-b4c3580f6f29","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":224,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"d6dd621a-99ea-492e-b07b-093afee7d08a","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction,","page_number":224,"box":{"x":117,"y":165,"width":737,"height":12}},{"id":"7b9b9021-e09c-41c2-9a6c-b2411e0d04c3","block_type":"box","text":"non-financial information, internal control frameworks and Enterprise Risk Management systems. In","page_number":224,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"c366b882-794d-4985-b1ce-388d4b1bf4b6","block_type":"box","text":"our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":224,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"c9fe049e-638e-465f-83a1-f31730540f33","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders. Audit committees","page_number":224,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"923e94d6-06d6-4831-b9c3-930e0da70b92","block_type":"box","text":"should have a procedure in place for assessing the independence of the auditor and the quality of the","page_number":224,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"cc3a5314-93c6-420c-98c1-bb74666080c5","block_type":"box","text":"external audit process annually.","page_number":224,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"867444f2-655c-4551-a46c-7d437df2f449","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to","page_number":224,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"fba10a05-66fc-444c-bb44-01aed97dc478","block_type":"box","text":"how a company manages risks or generates revenue. BAIS finds it helpful to our understanding when","page_number":224,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"e09f18d0-1831-4aab-bf77-d3b0e868e0bd","block_type":"box","text":"companies provide robust, standardized disclosures on their material sustainability-related risks and","page_number":224,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"b7b8f18b-2a30-4df4-9244-fe092a9979a8","block_type":"box","text":"opportunities. The International Sustainability Standards Board (ISSB) is one entity working to meet","page_number":224,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"cacb0a1e-99fd-4416-b873-5e067462af90","block_type":"box","text":"these objectives through its reporting standards, which may be helpful to companies in preparing such","page_number":224,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"1d379f2a-c1f3-4eb2-8573-47d76d5d73f5","block_type":"box","text":"reports.","page_number":224,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"2b8fdc64-a7ac-4609-a943-5f85270e6386","block_type":"box","text":"9","page_number":224,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"30a6292b-a35d-4209-ab85-270d0b1b172a","block_type":"box","text":"However, we do not mandate any specific disclosure framework, and note that companies in","page_number":224,"box":{"x":179,"y":351,"width":696,"height":12}},{"id":"bb568bfb-dda0-41e3-88b4-ca3cd6897dc8","block_type":"box","text":"certain jurisdictions are subject to mandatory reporting requirements under standards specified by","page_number":224,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"b284cc53-4077-40a4-bafc-10e78a784919","block_type":"box","text":"policy makers.","page_number":224,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"fa6d23a7-975a-4c28-833f-da9bc7b434a2","block_type":"box","text":"10","page_number":224,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"53d9287a-b6d6-4860-8486-16f23514fc23","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":224,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"0b263372-55e1-4310-b671-1e95abfdeadd","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for","page_number":224,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"ccc985d1-e157-4a69-8dfb-709dc818db84","block_type":"box","text":"employees, and potentially other stakeholders, can be a useful mechanism for ensuring that senior","page_number":224,"box":{"x":116,"y":444,"width":738,"height":12}},{"id":"f23f893c-5eac-412e-aac4-5aacd9af020d","block_type":"box","text":"management and the board are aware of potential misconduct or breaches in risk management and","page_number":224,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"d2e056c3-6aef-4f36-af3f-95b2451a3b61","block_type":"box","text":"internal control processes.","page_number":224,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"78980bde-e2af-47a8-95ff-de43224705ed","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in","page_number":224,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"0b10d27b-4a56-41af-9d7a-a5bef39837b8","block_type":"box","text":"the quality of corporate reporting. It is helpful when the audit report gives some insight into the scope","page_number":224,"box":{"x":116,"y":521,"width":752,"height":12}},{"id":"85b33bfd-3410-4694-b28b-dc564a396444","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":224,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"cb6da66a-d1e2-4be0-bfdd-73de359e28a9","block_type":"box","text":"comprehensive and effective audit is time and resource intensive, and the audit fee should be","page_number":224,"box":{"x":116,"y":552,"width":700,"height":12}},{"id":"c8cb09ef-9ecd-40b2-b6f3-e73de41c17ce","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":224,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"c6a0bd3a-11be-4045-995b-ef3db9586a79","block_type":"box","text":"degree that may prompt concerns about the independence of the audit. The audit committee should","page_number":224,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"1ec89460-c4a5-4bce-a347-716f889af056","block_type":"box","text":"explain its position on auditor tenure and how it confirmed that the auditor remained independent.","page_number":224,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"c7f1c42c-c326-44c2-b260-9e4b84d6ac2c","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or","page_number":224,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"01c924a8-0529-4796-9ab1-3fbae4b1805e","block_type":"box","text":"there are material misstatements in financial reports. In markets where relevant, we may vote against a","page_number":224,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"ae09c43d-24f0-49df-87e0-503e7558d5c3","block_type":"box","text":"proposal to approve the financial statements or the discharge of the board when we are concerned","page_number":224,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"ad441b68-d905-48e0-885a-c1e880a16537","block_type":"box","text":"about the quality of corporate reporting or the audit. We may vote against proposals to appoint the","page_number":224,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"8934367e-da7e-437c-b890-47b95689ff5b","block_type":"box","text":"auditor, ratify the audit report, or approve the audit fee if we are concerned about the auditor’s","page_number":224,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"419f95dd-fbeb-4cc1-8b79-96fecfd175ac","block_type":"box","text":"independence, the quality of the audit, or there are material misstatements in financial reports and the","page_number":224,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"5daf5d72-9553-4523-a0b6-20c22def5f68","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":224,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"db3f6473-05e0-4a64-bbf4-1a51b1dbadef","block_type":"box","text":"9","page_number":224,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"5a653e9e-3ab8-4629-949b-ba11a491d992","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":224,"box":{"x":170,"y":815,"width":666,"height":10}},{"id":"2ba2f146-f859-43ac-830f-0cfcbc46a007","block_type":"box","text":"Foundation. Please refer to the IFRS website to learn more about the framework and standards S1 “General","page_number":224,"box":{"x":171,"y":828,"width":641,"height":8}},{"id":"0a4eb71f-4719-46ae-a05d-7e5eb020f4d7","block_type":"box","text":"Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related Disclosures.”","page_number":224,"box":{"x":171,"y":841,"width":672,"height":9}},{"id":"6d9b5027-6d23-4534-b795-3d690042c6dc","block_type":"box","text":"10","page_number":224,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"a42d8cbd-daee-4f6a-9657-0d80951687fa","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional-profiles","page_number":224,"box":{"x":170,"y":854,"width":705,"height":9}},{"id":"681de666-53b1-46a7-ab97-e248b555b9f4","block_type":"box","text":"issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company","page_number":224,"box":{"x":170,"y":867,"width":615,"height":9}},{"id":"d0ca6113-f2db-4f7e-83c0-edc38615c2db","block_type":"box","text":"reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en","page_number":224,"box":{"x":170,"y":880,"width":468,"height":9}},{"id":"aef99a6d-205f-44ad-bc8c-699f8cca569c","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":224,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6d98746a-5c5c-4fe0-8600-bf866b36fae5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":224,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"7886167e-ae6f-4b71-b3ae-db52ef06680d","block_type":"box","text":"13","page_number":224,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"02116d99-a876-405f-8345-7f8ea5479078","block_type":"box","text":"NM1026U-6004408-224/267","page_number":224,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7f0fbbfb-0119-44fa-9981-3e0db794c3c9","block_type":"box","text":"Shareholder rights and protections","page_number":225,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"fa806d71-3d80-40b0-ad42-14aed9bfe070","block_type":"box","text":"General shareholder meetings","page_number":225,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"d5392efd-cdc4-4376-8cec-c779850c6328","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine","page_number":225,"box":{"x":117,"y":144,"width":768,"height":13}},{"id":"d4a83ee4-b266-44b1-a86b-40584ebd566e","block_type":"box","text":"items of business are discussed and voted on by shareholders in attendance or submitting proxy votes.","page_number":225,"box":{"x":117,"y":160,"width":771,"height":12}},{"id":"a0d0682f-918b-4fd4-b88f-5b6d99a865f5","block_type":"box","text":"Companies should disclose materials relevant to the shareholder meeting sufficiently in advance so","page_number":225,"box":{"x":117,"y":175,"width":742,"height":13}},{"id":"98d3e574-3111-45bb-8ff7-88d22ae1fd27","block_type":"box","text":"that shareholders can take them into consideration in their voting decisions. Many companies offer","page_number":225,"box":{"x":116,"y":191,"width":736,"height":12}},{"id":"2ec39779-044f-46e5-bcdf-7d40d8fed1a7","block_type":"box","text":"shareholders the option of participating in the meeting virtually which, whilst welcome, should not limit","page_number":225,"box":{"x":116,"y":207,"width":758,"height":12}},{"id":"0613b71c-d5eb-4563-963b-0f172428aff5","block_type":"box","text":"the rights of shareholders to participate as they would during an in-person meeting.","page_number":225,"box":{"x":116,"y":222,"width":622,"height":12}},{"id":"f85c69c7-261f-4ae3-ad9a-21a1149a1e30","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are","page_number":225,"box":{"x":116,"y":251,"width":757,"height":12}},{"id":"8046903c-f5f9-4c36-91de-87b618dd97ee","block_type":"box","text":"not provided in a timely manner or do not provide sufficient information for us to make an informed","page_number":225,"box":{"x":117,"y":266,"width":733,"height":12}},{"id":"28e27896-1d59-4dd6-8de9-22d334c7eb5a","block_type":"box","text":"voting decision. We may vote against directors if the format of the shareholder meeting does not","page_number":225,"box":{"x":116,"y":282,"width":719,"height":12}},{"id":"dadd3058-46e7-4260-8499-c17758d88a7d","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":225,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"ff746f49-cfd5-4604-a3d4-660adf7ff5dd","block_type":"box","text":"Bylaw amendments","page_number":225,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"dcb2655e-9f5a-4014-903e-2d1a46a09135","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally","page_number":225,"box":{"x":116,"y":355,"width":753,"height":12}},{"id":"88b6c870-f729-4bb2-9391-da404a79ccf7","block_type":"box","text":"support those that are aligned with the interests of minority shareholders. Any material changes to the","page_number":225,"box":{"x":116,"y":370,"width":761,"height":12}},{"id":"45fedf4c-5faf-47a7-8c3d-b79ec2f72e3a","block_type":"box","text":"bylaws should be explained in detail and put to a shareholder vote.","page_number":225,"box":{"x":117,"y":386,"width":500,"height":12}},{"id":"9c3e090b-8e7f-4250-85b3-104fd892d165","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce","page_number":225,"box":{"x":116,"y":415,"width":753,"height":12}},{"id":"8bf5b219-efd9-40f9-92db-c8ab4e354f89","block_type":"box","text":"additional burdens. We may vote against directors if material changes are made to the bylaws without","page_number":225,"box":{"x":116,"y":430,"width":760,"height":12}},{"id":"0a96d650-9145-4b3c-9965-f8d9766e0122","block_type":"box","text":"shareholder approval.","page_number":225,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"b2798bd1-5351-4a30-9065-fc66df9497b8","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":225,"box":{"x":117,"y":474,"width":688,"height":12}},{"id":"b50f29f0-88f1-49ec-a652-548fb6c9988f","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to call a special meeting of","page_number":225,"box":{"x":117,"y":490,"width":704,"height":12}},{"id":"28a41200-7895-4a27-844b-63a44202fbd6","block_type":"box","text":"shareholders. The shareholding required to exercise this right should balance its utility with the cost to","page_number":225,"box":{"x":116,"y":505,"width":761,"height":12}},{"id":"311a6b72-41f1-44a2-b997-7088d3f8dc7e","block_type":"box","text":"the company of holding special meetings.","page_number":225,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"90b9ab0b-2e46-403f-bb5b-32c6c3d646c2","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":225,"box":{"x":117,"y":550,"width":688,"height":12}},{"id":"62298a33-6bb3-41f2-8cf7-38ff30a639d6","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to nominate directors to the","page_number":225,"box":{"x":117,"y":565,"width":710,"height":12}},{"id":"01ae0bca-79a4-4510-91cb-d44fa12728b6","block_type":"box","text":"company’s board. The threshold for this right should be set so that shareholders can exercise it without","page_number":225,"box":{"x":116,"y":581,"width":770,"height":12}},{"id":"3062ae2e-68ee-48ae-bbc2-9681887ff110","block_type":"box","text":"being unduly disruptive to the board’s own nomination process.","page_number":225,"box":{"x":117,"y":596,"width":473,"height":12}},{"id":"d1593830-257b-4bcb-a75e-5e6d5c947a0e","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability","page_number":225,"box":{"x":116,"y":625,"width":728,"height":12}},{"id":"da150e91-e689-42f6-ad82-bf43d12d6be2","block_type":"box","text":"mechanisms. We may vote for a shareholder proposal seeking the addition of either of these","page_number":225,"box":{"x":117,"y":640,"width":691,"height":12}},{"id":"3cee8028-c54c-433b-a547-0bd11ea41b5a","block_type":"box","text":"provisions to a company’s bylaws.","page_number":225,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"819894fc-5b1d-4c09-a7b6-0063dece15c2","block_type":"box","text":"Change of domicile","page_number":225,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"26281bb1-84ea-47f9-901b-3b609d46a0be","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the","page_number":225,"box":{"x":116,"y":713,"width":717,"height":12}},{"id":"142c1369-6cc4-4183-a0b3-2aaffcb3f21c","block_type":"box","text":"rationale for doing so is consistent with the company’s long-term strategy and business model and the","page_number":225,"box":{"x":117,"y":729,"width":756,"height":12}},{"id":"6985b35b-690d-46b8-bf60-af3dee922708","block_type":"box","text":"related costs are immaterial.","page_number":225,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"d016da4c-8873-4e7e-92e5-20b0bd825c25","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":225,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"1aab153d-ca9b-4a78-be88-6532f8af5d21","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":225,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"7d4e57de-d029-4be4-ba2c-84326d329f42","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":225,"box":{"x":116,"y":817,"width":499,"height":12}},{"id":"c958457a-6880-4e87-a5f8-fc3a4f8c2b7c","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and","page_number":225,"box":{"x":117,"y":846,"width":762,"height":12}},{"id":"1e106387-f416-46ec-be9c-1ae2c3f558bb","block_type":"box","text":"explained in the context of long-term strategy and business dynamics. Such changes may significantly","page_number":225,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"5926e7e4-e0a3-4834-9844-d0e48067c7a8","block_type":"box","text":"alter an investor’s views on the suitability of a company for their investment strategy or portfolio.","page_number":225,"box":{"x":116,"y":877,"width":716,"height":12}},{"id":"95e1e071-20f8-4bfe-8676-63c4f5864180","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":225,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f6dc70d4-a0e7-40fe-87f9-9ae745fb37bc","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":225,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"59a01d70-fefc-4bfd-bafd-85112d213377","block_type":"box","text":"14","page_number":225,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"5a3acd16-8ad8-4403-8c99-ea2d256ba781","block_type":"box","text":"NM1026U-6004408-225/267","page_number":225,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"80bd866c-f2b7-4c5c-a516-17f984a8616b","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its","page_number":226,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"b80261ac-5639-4620-b85d-35ee1da485c5","block_type":"box","text":"business if the board has not provided a credible argument for change.","page_number":226,"box":{"x":117,"y":102,"width":530,"height":13}},{"id":"7f5dd1e0-7029-4133-b16d-4fdf228b1e07","block_type":"box","text":"Shareholder proposals","page_number":226,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"5b8cbf9c-f28e-4027-8c67-2ce293a713d0","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals","page_number":226,"box":{"x":116,"y":172,"width":756,"height":12}},{"id":"3edc3d7b-f60c-4989-bd9a-9fece42bcca5","block_type":"box","text":"to the general shareholder meeting asking a company to take a particular course of action subject to","page_number":226,"box":{"x":116,"y":188,"width":749,"height":12}},{"id":"3aeacc83-b5ab-4d4d-9e67-379a21a448b1","block_type":"box","text":"the proposal being supported by a majority of votes cast at the meeting. The topics raised can address","page_number":226,"box":{"x":116,"y":203,"width":767,"height":12}},{"id":"ae2059bc-4541-4583-bf80-785535bb8f72","block_type":"box","text":"a range of matters that may be relevant to a company’s business.","page_number":226,"box":{"x":116,"y":219,"width":492,"height":12}},{"id":"08c5e80f-44c5-4d2b-85af-e23c8d8fa929","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":226,"box":{"x":116,"y":250,"width":767,"height":12}},{"id":"b3f7159a-51a9-43cf-9531-b2bc96454c08","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with","page_number":226,"box":{"x":116,"y":265,"width":697,"height":12}},{"id":"3774d29f-5822-45a9-a540-6d7cb6031f12","block_type":"box","text":"shareholders’ interests, and what impact the proposal being acted upon might have on financial","page_number":226,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"747d6e0e-2e43-4bc7-ab48-49c9d788a290","block_type":"box","text":"performance.","page_number":226,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"5bb473bf-cebb-4cbf-9a56-12eec6b137bb","block_type":"box","text":"Our general approach where we have concerns about","page_number":226,"box":{"x":116,"y":327,"width":393,"height":12}},{"id":"78f85263-78f1-45ec-9a74-5a5ab956e809","block_type":"box","text":"t a company’s governance, disclosures or","page_number":226,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"da0d4ab3-de33-44cb-8ef5-057cc0033894","block_type":"box","text":"performance is to engage to understand the apparent diffe","page_number":226,"box":{"x":117,"y":343,"width":423,"height":12}},{"id":"691f9ac2-c20c-41b0-8e9e-e36cf9d4df36","block_type":"box","text":"rence in perspective. If we are concerned a","page_number":226,"box":{"x":541,"y":343,"width":319,"height":12}},{"id":"e81bca34-6b6c-498e-a314-47f5985879a9","block_type":"box","text":"company is not acting in shareholders’ financial interest","page_number":226,"box":{"x":116,"y":358,"width":403,"height":12}},{"id":"64dbdf93-fd2d-4422-82e0-e632a7ea91a9","block_type":"box","text":"s, we may vote against the election of directors.","page_number":226,"box":{"x":519,"y":358,"width":351,"height":12}},{"id":"3d364d19-ec07-4342-a440-86f4d059c426","block_type":"box","text":"We may support a relevant shareholder proposal if doing","page_number":226,"box":{"x":116,"y":374,"width":418,"height":12}},{"id":"eb0269f2-2175-4f2a-b832-ab4743ac56b8","block_type":"box","text":"so is aligned with our clients’ financial interests.","page_number":226,"box":{"x":534,"y":374,"width":348,"height":12}},{"id":"e1ac23c5-9814-4fd6-b954-002bf33bd76f","block_type":"box","text":"We generally do not support shareholder proposals that","page_number":226,"box":{"x":116,"y":389,"width":410,"height":12}},{"id":"1db0c713-50a1-45fb-93f4-793c387e2534","block_type":"box","text":"are legally binding on the company, seek to alter","page_number":226,"box":{"x":526,"y":389,"width":357,"height":12}},{"id":"c66ff714-31ee-4f25-8dda-a0ea8fb0110c","block_type":"box","text":"a company’s strategy or direct its operations,","page_number":226,"box":{"x":116,"y":405,"width":331,"height":12}},{"id":"18ebdd05-cf75-4a36-bbc7-b83efb324065","block_type":"box","text":"or are unrelated to how a company manages risk or","page_number":226,"box":{"x":447,"y":405,"width":381,"height":12}},{"id":"773413ba-f8eb-4ec2-9d9c-a36424c751a1","block_type":"box","text":"generates financial returns.","page_number":226,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"b5cea37e-4ca6-425e-8d3b-95d6f8db3f1c","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place","page_number":226,"box":{"x":117,"y":451,"width":737,"height":12}},{"id":"1381a288-2f2d-4bd2-a047-8006ab62c7b6","block_type":"box","text":"restrictions and limitations on how we can interact with the companies in which we invest on behalf of","page_number":226,"box":{"x":117,"y":467,"width":755,"height":12}},{"id":"bbc71abd-5e61-4ad0-b53e-3c846fcc6dc5","block_type":"box","text":"our clients, including our ability to submit shareholder proposals. We do not submit shareholder","page_number":226,"box":{"x":116,"y":482,"width":712,"height":12}},{"id":"00748d61-4692-4673-ad5b-b02ee5c2df37","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":226,"box":{"x":117,"y":498,"width":770,"height":12}},{"id":"39e8f43a-d63b-420f-aa66-63d09c4f0b7e","block_type":"box","text":"Corporate political activities","page_number":226,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"9b7925ff-600d-4d8e-82c5-c60e7e409aed","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":226,"box":{"x":116,"y":568,"width":733,"height":12}},{"id":"49a4b3b7-451b-49fe-b37a-bcd378e9a1d7","block_type":"box","text":"jurisdictions in which they engage. When a corporation reports material financial risk related to policy","page_number":226,"box":{"x":115,"y":583,"width":754,"height":12}},{"id":"a69dc1bb-9501-40db-b2b1-cb3088acaae7","block_type":"box","text":"and or regulatory changes, BAIS may seek to understand how it is addressing the material risk","page_number":226,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"bd6a5ef4-f35e-43ad-896a-d375b6066d75","block_type":"box","text":"identified. We seek to understand how companies engage in corporate political activities and ensure","page_number":226,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"6414ba54-17c6-4d64-9feb-b8b877a227c7","block_type":"box","text":"that their participation is consistent with their public statements on policy matters material to the","page_number":226,"box":{"x":116,"y":630,"width":714,"height":12}},{"id":"24380fb0-5afc-456d-a2c3-9617c08e92e2","block_type":"box","text":"company’s long-term strategy. The board should be aware of the approach taken by management on","page_number":226,"box":{"x":116,"y":645,"width":756,"height":12}},{"id":"b2f67644-4d32-42d9-acaf-9de54a72e3c6","block_type":"box","text":"corporate political activities as there can be reputational risks arising from inconsistencies between a","page_number":226,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"94880008-57ad-4f3f-9db2-cf2be13b64e6","block_type":"box","text":"company’s policy engagement and stated policy positions. Companies should, as a minimum, meet all","page_number":226,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"c97371dc-4a05-4f44-974d-cdddbfb5e7d7","block_type":"box","text":"regulatory disclosure requirements on political activities. We may engage a company where we would","page_number":226,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"8a55ca5c-3206-4384-81fd-4d47e95cf143","block_type":"box","text":"like to better understand its approach to policy engagement, where relevant.","page_number":226,"box":{"x":117,"y":707,"width":563,"height":12}},{"id":"851e2fc4-0a02-43de-a74b-97d7f69f8a74","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their","page_number":226,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"68997d5e-76a8-4e97-b2a6-48ec7a3be6bd","block_type":"box","text":"policy priorities and the policy positions of the trade associations of which they are active members and","page_number":226,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"4bd234cf-b830-45de-aa60-dbbe62bff9bf","block_type":"box","text":"any engagements undertaken by trade associations on behalf of members.","page_number":226,"box":{"x":116,"y":769,"width":556,"height":12}},{"id":"afcbb534-93a4-4913-89d1-2663a60f3d9a","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s","page_number":226,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"a6f1d2b0-cb90-4cf6-bfec-19dffd7569fe","block_type":"box","text":"disclosures are insufficient to address the material risk it has identified.","page_number":226,"box":{"x":116,"y":816,"width":524,"height":9}},{"id":"886d68ba-960a-4ac8-aeb4-7f1d1de205b6","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":226,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"10226f68-e1fc-4f05-a48e-1e87845de676","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":226,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"3ddecd31-f876-49e0-befd-d6e1be80dd21","block_type":"box","text":"15","page_number":226,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"8e6977ed-cd2a-4b18-8396-1473198920df","block_type":"box","text":"NM1026U-6004408-226/267","page_number":226,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9a70e62-5913-487f-a2a3-885b7c5862b2","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":227,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"b22f6394-de2a-4123-b7e7-6389e2ee7f1b","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their","page_number":227,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"c25b68d1-57f9-452d-89fe-864bc787b1ef","block_type":"box","text":"business operations. In our experience, sustainability-related factors","page_number":227,"box":{"x":117,"y":133,"width":505,"height":12}},{"id":"5b9826b5-7092-4712-9991-34dc7764cffd","block_type":"box","text":"11","page_number":227,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"71da7275-d9b3-4e41-ac77-df08db7d661f","block_type":"box","text":"that are relevant to a company’s","page_number":227,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"dae0bc8d-964c-492e-8f00-17acba193658","block_type":"box","text":"business or material to its financial performance, are generally operational considerations embedded","page_number":227,"box":{"x":117,"y":149,"width":752,"height":12}},{"id":"8b6cfb2c-6d95-491c-ac6c-744c1b8a2e97","block_type":"box","text":"into day-to-day management systems. Certain sustainability issues may also inform long-term strategic","page_number":227,"box":{"x":117,"y":164,"width":769,"height":12}},{"id":"cd563a95-1d78-42b0-8757-6ead55f1b763","block_type":"box","text":"planning, for example, investing in product innovation in anticipation of changing consumer demand or","page_number":227,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"bf4b3f94-9ae0-4ab4-80ae-012a64a7c54a","block_type":"box","text":"adapting supply chains in response to changing regulatory requirements.","page_number":227,"box":{"x":116,"y":195,"width":546,"height":12}},{"id":"ca85d26b-da78-44d5-baf6-bec1b8bb90b8","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business","page_number":227,"box":{"x":116,"y":226,"width":769,"height":12}},{"id":"38d738ef-28c2-4642-9676-7b74715f0aa3","block_type":"box","text":"relevant will vary by company business model, sector, key markets, and time horizon, amongst other","page_number":227,"box":{"x":117,"y":241,"width":751,"height":12}},{"id":"a054e9f0-e396-4f22-a315-fef1f231060b","block_type":"box","text":"considerations. From company disclosures and our engagement, we aim to understand how","page_number":227,"box":{"x":116,"y":257,"width":689,"height":12}},{"id":"ba2b8d63-6854-421b-bc5e-086862d939a5","block_type":"box","text":"management is identifying, assessing and integrating material sustainability-related risks and","page_number":227,"box":{"x":117,"y":272,"width":694,"height":12}},{"id":"552724be-4309-4434-92c1-f87c60661642","block_type":"box","text":"opportunities into their business decision-making and practices. Doing so helps us undertake a more","page_number":227,"box":{"x":116,"y":288,"width":752,"height":12}},{"id":"dc8ad897-6a22-4b64-a102-3ec59e7c59de","block_type":"box","text":"holistic assessment of a company’s potential financial performance and the likely risk-adjusted returns","page_number":227,"box":{"x":117,"y":303,"width":761,"height":12}},{"id":"b1c46e30-b68f-46a2-979e-845815da83a8","block_type":"box","text":"of an investment.","page_number":227,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"d6d43fef-fe22-48af-a35c-20975b8a01ae","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about","page_number":227,"box":{"x":116,"y":349,"width":753,"height":13}},{"id":"e92dbc2e-e745-457c-b160-f6fa03483edc","block_type":"box","text":"how a company is managing or disclosing its approach to material sustainability-related risks that may","page_number":227,"box":{"x":117,"y":365,"width":761,"height":12}},{"id":"06e7ab35-af3d-4954-959c-8b635a19b385","block_type":"box","text":"impact financial returns.","page_number":227,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"a1b9d296-0a66-492b-9b99-3344db3edcef","block_type":"box","text":"Key stakeholders","page_number":227,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"ce4e8cfa-27d9-4ebd-8a2f-d1210936c2ca","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various","page_number":227,"box":{"x":117,"y":449,"width":727,"height":12}},{"id":"1f3e9759-055c-463c-865d-057a39e69772","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":227,"box":{"x":117,"y":465,"width":766,"height":12}},{"id":"58722a2a-5c30-4152-8be4-e8dcf20f8353","block_type":"box","text":"stakeholders based on what is material to their business and long-term financial performance. For","page_number":227,"box":{"x":116,"y":480,"width":731,"height":12}},{"id":"8e04c90e-6ea0-4da5-8418-e04d1b109bdf","block_type":"box","text":"many companies, key stakeholders include employees, business partners (such as suppliers and","page_number":227,"box":{"x":117,"y":496,"width":726,"height":12}},{"id":"09564b2a-d428-4acb-bc67-2147325ffb60","block_type":"box","text":"distributors), clients and consumers, regulators, and the communities in which they operate.","page_number":227,"box":{"x":116,"y":511,"width":687,"height":12}},{"id":"e0cef8c5-49b9-45be-b74c-e0831758dedc","block_type":"box","text":"Companies that appropriately balance the interests of investors and other stakeholders are, in our","page_number":227,"box":{"x":117,"y":527,"width":730,"height":12}},{"id":"660580f1-0061-4168-81a5-8509db9345a0","block_type":"box","text":"experience, more likely to be financially resilient over time.","page_number":227,"box":{"x":116,"y":542,"width":438,"height":12}},{"id":"5c2884dd-ecd5-427a-87a9-35fda4657f95","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":227,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"0db1d9f3-c749-43d6-81b1-87d4631a1206","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial","page_number":227,"box":{"x":117,"y":611,"width":737,"height":12}},{"id":"f4d3029b-0a4b-4562-adfa-570b6182435c","block_type":"box","text":"objectives. Consistent with the objectives of those investment strategies, our stewardship activity in","page_number":227,"box":{"x":116,"y":627,"width":741,"height":12}},{"id":"a8ee3fee-c6b3-491c-8397-3feaa1accfe2","block_type":"box","text":"relation to the holdings in those funds differs in some respects from BAIS’ benchmark guidelines, which","page_number":227,"box":{"x":117,"y":642,"width":771,"height":12}},{"id":"4497fe8b-1cd8-432f-8ab5-bfae7510a47e","block_type":"box","text":"are described above. Specifically, for those funds’ holdings, we look to investee companies to","page_number":227,"box":{"x":116,"y":658,"width":699,"height":12}},{"id":"5e029b7f-dc8c-41e4-be13-3c2dc87915f3","block_type":"box","text":"demonstrate that they are aligned with a decarbonization pathway that means their business model","page_number":227,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"3cfae911-ede7-4482-9eb8-5485d02a359d","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":227,"box":{"x":116,"y":689,"width":754,"height":12}},{"id":"22225642-f643-44f5-a46f-6947cacfec3b","block_type":"box","text":"above pre-industrial levels. In addition, clients in separately managed accounts may instruct BlackRock","page_number":227,"box":{"x":116,"y":704,"width":766,"height":12}},{"id":"85799fc2-a519-4ecc-a2a7-7e0ab8a29925","block_type":"box","text":"to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":227,"box":{"x":116,"y":720,"width":692,"height":12}},{"id":"61565049-3ebb-4476-a6ac-123ce2ce89c9","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable","page_number":227,"box":{"x":116,"y":735,"width":765,"height":12}},{"id":"26db77cb-2bbc-4848-a3ae-0e9a7eff7a9a","block_type":"box","text":"fund board or client.","page_number":227,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"3f754db6-5130-4cbc-bb13-3000cbd7b5e5","block_type":"box","text":"11","page_number":227,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"0abc7e20-6344-4610-b211-b0133db170a2","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":227,"box":{"x":171,"y":776,"width":691,"height":10}},{"id":"2ce240e1-9fb3-4a7b-8a94-02575317c2c7","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":227,"box":{"x":170,"y":789,"width":686,"height":9}},{"id":"69d8be0b-71bf-4980-8c17-2f5e40ff3c40","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":227,"box":{"x":170,"y":802,"width":682,"height":9}},{"id":"0105a5a9-2dbd-4e23-a2a0-34972ccb2f3a","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":227,"box":{"x":170,"y":815,"width":683,"height":9}},{"id":"fc2b2e9b-18ad-4d2b-a50f-fe3981c8774e","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will effectively","page_number":227,"box":{"x":170,"y":828,"width":708,"height":9}},{"id":"3df36b27-c8cb-4d6d-8ee2-fe3b7f9d3059","block_type":"box","text":"evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Governance is","page_number":227,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"0498baba-7f77-4e5c-8afb-f093184f1fd8","block_type":"box","text":"the core means by which boards can oversee the creation of durable financial value over time. Appropriate risk","page_number":227,"box":{"x":170,"y":853,"width":658,"height":10}},{"id":"8cb3f004-1ecb-492e-88b3-f241f48fef71","block_type":"box","text":"oversight of business-relevant and material sustainability-related considerations is a component of a sound governance","page_number":227,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"e64e335c-63e8-4280-af77-4d89998414f4","block_type":"box","text":"framework.","page_number":227,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"761c353f-869e-439c-bce0-2da11496bd31","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":227,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b0f27385-ae17-4877-a79c-accd91c19c87","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":227,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"6c752d11-8a5f-41a0-ab8e-a5c33936519c","block_type":"box","text":"16","page_number":227,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"2d7b228f-fe6d-4d81-9be0-bb8397763bd4","block_type":"box","text":"NM1026U-6004408-227/267","page_number":227,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"58971bf2-6f62-4860-ba4f-0f9c96f52531","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services","page_number":228,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"1d790bde-53e4-4613-87ae-1282bdd18053","block_type":"box","text":"that contribute to real world decarbonization or have a carbon intensive business model and face","page_number":228,"box":{"x":116,"y":102,"width":724,"height":10}},{"id":"ee8f9669-c09b-48cc-9114-39f9d104a797","block_type":"box","text":"outsized impacts from the low carbon transition, based on reported and estimated scopes 1, 2, and 3","page_number":228,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"4b595ae8-006d-46a3-9656-1a2de420080a","block_type":"box","text":"greenhouse gas emissions. These companies should provide disclosures that set out their","page_number":228,"box":{"x":116,"y":134,"width":675,"height":12}},{"id":"a644d00d-a8d8-4127-9e92-64937cb2c40a","block_type":"box","text":"governance, strategy, risk management processes and metrics and targets relevant to","page_number":228,"box":{"x":116,"y":149,"width":646,"height":12}},{"id":"166898d1-019e-4abc-aa03-14719547035f","block_type":"box","text":"decarbonization. It is helpful to investors’ understanding when these disclosures include an explanation","page_number":228,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"5bff6d75-c2ba-47bf-b5ab-2e5cdbfa3aab","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":228,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"90a20729-c2f9-4b31-a223-81643537a821","block_type":"box","text":"scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for","page_number":228,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"c2217801-d1c5-4930-ba26-a8708e1b416b","block_type":"box","text":"scope 1 and 2 emissions.","page_number":228,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"27ae6eca-6723-4534-8d43-92fbe0d63eb0","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against","page_number":228,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"a7555104-c9db-41a4-9825-a957016ff82c","block_type":"box","text":"directors or support for a relevant shareholder proposal if a company does not appear to be adequately","page_number":228,"box":{"x":116,"y":258,"width":771,"height":12}},{"id":"1399629b-5fe7-4b07-99a9-4b62d34c86ba","block_type":"box","text":"acting to address or disclosing material climate-related risks, consistent with the parameters set out in","page_number":228,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"732af5cc-bcdf-42b9-b82b-965e6ee3ceeb","block_type":"box","text":"these climate- and decarbonization-specific guidelines. We may recommend supporting shareholder","page_number":228,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"ca5e06f2-5468-4afe-9825-0a3477a41b17","block_type":"box","text":"proposals seeking information relevant to a company’s stated low-carbon transition strategy or targets","page_number":228,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"79a56000-b149-4c06-a650-50799e009b04","block_type":"box","text":"that the company does not currently provide and that would be helpful to investment decision-making.","page_number":228,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"f0c1f1ec-9d84-4164-afc0-74ac40c26fcb","block_type":"box","text":"We would not recommend support for shareholder proposals that seek to constrain board or","page_number":228,"box":{"x":116,"y":335,"width":689,"height":12}},{"id":"780e3405-1de7-49a2-9071-d81e0f2fc6b0","block_type":"box","text":"management decision-making or direct specific business or strategic decisions. As under the BAIS","page_number":228,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"35fcd4e9-2a72-4b6c-882c-7bfbf6a908a9","block_type":"box","text":"benchmark approach, the active portfolio managers are ultimately responsible for voting consistent","page_number":228,"box":{"x":117,"y":366,"width":737,"height":12}},{"id":"d42e55ae-bd64-40ac-9506-6d2de77d5c73","block_type":"box","text":"with their investment mandate and fund objectives. For the funds and accounts in scope, voting on","page_number":228,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"039115bf-c41b-46eb-ab24-97b64941480a","block_type":"box","text":"matters not related to climate risk and the energy transition is undertaken in line with BAIS’ benchmark","page_number":228,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"6bd99e0d-2a57-4a39-a876-0964c4298276","block_type":"box","text":"guidelines.","page_number":228,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"269c8ff0-eba9-4c2f-a0bc-5ade4fb679f0","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":228,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"5bf05251-fe94-41c0-8a9a-dfd16473db02","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":228,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"4ecd053e-3679-4b3e-bed4-e50db8745463","block_type":"box","text":"17","page_number":228,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"cca45a1c-a271-4524-ba67-8c1dab050d58","block_type":"box","text":"NM1026U-6004408-228/267","page_number":228,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6e98870b-4c6b-4dd9-a018-accf8062bbc4","block_type":"box","text":"Appendix 1: How we fulfil and oversee our investment stewardship responsibilities","page_number":229,"box":{"x":168,"y":87,"width":668,"height":12}},{"id":"f0b029ac-6d0b-4a51-8c05-3f25727d1c18","block_type":"box","text":"Oversight","page_number":229,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"d8e5905e-18e5-4100-bbb3-4fad55b5818d","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including","page_number":229,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"3c309bc0-f213-4080-af1d-d97dc272afcd","block_type":"box","text":"voting in accordance with the BlackRock Active Investment Stewardship Global Engagement and","page_number":229,"box":{"x":116,"y":165,"width":726,"height":12}},{"id":"9add7894-59f3-4471-baff-f9eb31c57fa3","block_type":"box","text":"Voting Guidelines (the “Guidelines”), which require the application of professional judgment and","page_number":229,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"4b73af61-cd0e-4247-9e05-944677b9c19f","block_type":"box","text":"consideration of each company’s unique circumstances, as well as input from active investors. BAIS is","page_number":229,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"b70aef22-bee4-4a1e-a28b-9ae9c386333a","block_type":"box","text":"independent from BlackRock Investment Stewardship in our engagement and voting activities,","page_number":229,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"5d45ffb0-07d1-4eee-8274-b2b17e658c07","block_type":"box","text":"reporting lines, and oversight.","page_number":229,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"97f83618-6012-4c22-8e9b-f9022807a728","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders","page_number":229,"box":{"x":116,"y":258,"width":765,"height":11}},{"id":"f34598e0-9b0d-497f-a302-10c66a39241a","block_type":"box","text":"in BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s","page_number":229,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"34a271fa-ce7e-4671-abec-9e939c8b1cef","block_type":"box","text":"approach to investment stewardship on non-index equity investment strategies. The Group may advise","page_number":229,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"3f541e07-ffaa-4d72-b3c2-fa0514e68807","block_type":"box","text":"on and review amendments to BAIS’ policies and practices. It does not determine voting decisions,","page_number":229,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"0a5a4c25-f06d-4b4a-a168-9a4fe81e19c4","block_type":"box","text":"which are the responsibility of BAIS and the relevant active equity investors.","page_number":229,"box":{"x":116,"y":320,"width":568,"height":12}},{"id":"58030f85-9e4d-4352-97fa-bd94e424fccb","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues,","page_number":229,"box":{"x":117,"y":351,"width":721,"height":12}},{"id":"2ba2d484-9f06-4d36-908d-955a1c082657","block_type":"box","text":"executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a","page_number":229,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"9765a56e-70d3-4a1e-8e7f-66f316d78c30","block_type":"box","text":"manner consistent with the Guidelines. BAIS also conducts research on corporate governance issues","page_number":229,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"8f25ecba-51be-4263-b908-fd749d2bd600","block_type":"box","text":"and participates in industry discussions to contribute to and keep abreast of important developments in","page_number":229,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"a292e2bf-045d-496c-ad9a-f200dfb5bd9a","block_type":"box","text":"the corporate governance field. BAIS may use third parties for certain of the foregoing activities and","page_number":229,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"8f9e4fb0-1544-4408-b5db-8ced486d1514","block_type":"box","text":"performs oversight of those third parties (see “Use and oversight of third-party vote services providers”","page_number":229,"box":{"x":117,"y":428,"width":765,"height":12}},{"id":"ae28531c-2ebe-48e0-b390-39983616f3ef","block_type":"box","text":"below).","page_number":229,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"d5461939-5797-44b6-b160-2c43d4463d8b","block_type":"box","text":"Voting guidelines and vote execution","page_number":229,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"0f9286e9-fb60-4921-8516-14f2ffb891b3","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the","page_number":229,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"ff063a96-06ab-4fbd-af77-6600a9907ce8","block_type":"box","text":"voting items submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have","page_number":229,"box":{"x":116,"y":521,"width":728,"height":12}},{"id":"540613d9-1b24-4d5a-a8bb-facf3aec687e","block_type":"box","text":"voting authority. BlackRock votes (or refrains from voting) for each Fund for which we have voting","page_number":229,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"226d2f13-77a1-4d1f-afbe-824ac0b35e06","block_type":"box","text":"authority based on our evaluation of the alignment of the voting items with the long-term economic","page_number":229,"box":{"x":116,"y":552,"width":734,"height":12}},{"id":"9a11e609-89a1-421e-a679-8f0e6d873550","block_type":"box","text":"interests of our clients, in the exercise of our independent business judgment, and without regard to the","page_number":229,"box":{"x":117,"y":568,"width":771,"height":12}},{"id":"3b55e4fe-0778-49cb-8877-1ed136e85274","block_type":"box","text":"relationship of the issuer (or any shareholder proponent or dissident shareholder) to the Fund, the","page_number":229,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"138b9de8-a115-4f31-8a45-1557a5185137","block_type":"box","text":"Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":229,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"45dfed38-b06c-4f2b-9526-afb1341adfc5","block_type":"box","text":"management policies and procedures,” below).","page_number":229,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"1e8722bc-84ad-4509-b1f5-3612522e0c7c","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the","page_number":229,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"f0fe313f-74b1-411a-9058-3e06f3b68077","block_type":"box","text":"Guidelines, although portfolio managers have the right to vote differently on their holdings if they","page_number":229,"box":{"x":117,"y":661,"width":713,"height":12}},{"id":"b6a9d42f-687a-46f6-8cb0-7a8838129a46","block_type":"box","text":"determine doing so is more aligned with the investment objective and financial interests of clients","page_number":229,"box":{"x":116,"y":676,"width":719,"height":12}},{"id":"87fb5b59-71c3-4789-9b4d-865bb398b34a","block_type":"box","text":"invested in the funds they manage.","page_number":229,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"8d1e5cdd-837c-463a-8ee4-8a665789ba01","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case","page_number":229,"box":{"x":116,"y":723,"width":726,"height":12}},{"id":"b25a10df-0663-4070-866e-64f2d5f0b09f","block_type":"box","text":"basis, in the context of the individual circumstances of each company and the specific issue under","page_number":229,"box":{"x":117,"y":738,"width":728,"height":12}},{"id":"5d948108-6208-40f0-9334-a9294ad12fd7","block_type":"box","text":"review. As such, the Guidelines do not indicate how BAIS will vote in every instance. Rather, they","page_number":229,"box":{"x":117,"y":754,"width":723,"height":12}},{"id":"0d6166c4-891c-499d-9980-f3b7581bc7ec","block_type":"box","text":"reflect our view about corporate governance issues generally, and provide insight into how we typically","page_number":229,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"c749c8eb-5861-4299-8b55-df829030927c","block_type":"box","text":"approach issues that are commonly put to a shareholder vote. The Guidelines are reviewed annually","page_number":229,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"816dd983-2936-4ec7-a380-f0d34faae02d","block_type":"box","text":"and updated as necessary to reflect changes in market practices, developments in corporate","page_number":229,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"b0ecf1a3-e0dc-48f1-82a6-a4344def4416","block_type":"box","text":"governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":229,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"6a0b2dbf-ce60-4c14-b136-4ee69e06c1ef","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":229,"box":{"x":116,"y":831,"width":751,"height":12}},{"id":"096ae2d8-9625-4710-975a-021af13dc3f0","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such","page_number":229,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"21ecfa91-d379-4608-bd98-be00ed7208f0","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":229,"box":{"x":117,"y":878,"width":768,"height":12}},{"id":"089be2f9-552a-487b-9851-962060c7b54f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":229,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"28592868-313e-48a2-b6fa-59901b888c5f","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":229,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"c3f06068-68fc-4d2f-9305-aa05f6916e92","block_type":"box","text":"18","page_number":229,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"c9667bed-14dc-4af8-b12a-9afabda9a46c","block_type":"box","text":"NM1026U-6004408-229/267","page_number":229,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"356deff0-6bd8-444d-9cd1-5252352f2cc6","block_type":"box","text":"untimely notice of shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii)","page_number":230,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"275fab2b-19e8-404d-9d52-b992fb4a0a00","block_type":"box","text":"requirements to vote proxies in person; iv) “share-blocking” (requirements that investors who exercise","page_number":230,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"4e21a21d-adab-4603-84e3-62290ced0211","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":230,"box":{"x":116,"y":118,"width":728,"height":12}},{"id":"76c878b1-01cb-44b2-8eaa-e48d6b4da4aa","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); v) potential difficulties in","page_number":230,"box":{"x":116,"y":134,"width":700,"height":12}},{"id":"fc956d0b-e07d-4df4-96fa-6e26dde9b634","block_type":"box","text":"translating the proxy; vi) regulatory constraints; and vii) requirements to provide local agents with","page_number":230,"box":{"x":116,"y":149,"width":723,"height":12}},{"id":"e47b6a45-b856-4a65-b38e-2a6a630ad3f0","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":230,"box":{"x":117,"y":165,"width":706,"height":12}},{"id":"d8b1f88a-ccfb-41bc-8c77-2ad4c5bf7230","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":230,"box":{"x":116,"y":180,"width":742,"height":12}},{"id":"76f011db-c0ba-4349-b146-694e8bef0ad5","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine","page_number":230,"box":{"x":117,"y":211,"width":759,"height":12}},{"id":"4964f0ad-4e32-4722-9653-553d2e67a4dd","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":230,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"4e0e5503-5306-4cc4-8edd-2d57a74f496b","block_type":"box","text":"allocation) if the costs (including but not limited to opportunity costs associated with share-blocking","page_number":230,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"6e7e622c-fbf0-4998-932e-b95c7729451c","block_type":"box","text":"constraints) associated with exercising a vote are expected to outweigh the benefit the client would","page_number":230,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"f889edea-67eb-4a85-8207-190088fa3f8d","block_type":"box","text":"derive by voting on the proposal.","page_number":230,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"27fbc6e9-9977-4b89-94c0-ed7d114e6b3e","block_type":"box","text":"Voting Choice","page_number":230,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"e902602d-2d8c-49b3-ab65-5047837fb67e","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to","page_number":230,"box":{"x":117,"y":335,"width":733,"height":12}},{"id":"7b97c4e4-c529-4695-a2c0-6b6a2221ead4","block_type":"box","text":"participate in the proxy voting process where legally and operationally viable.","page_number":230,"box":{"x":117,"y":351,"width":575,"height":12}},{"id":"9671bec4-3a90-4c55-b4ca-d3aacd7336e6","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in","page_number":230,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"80c8c32e-7215-499b-abfd-500ce914935b","block_type":"box","text":"the U.S., UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In","page_number":230,"box":{"x":116,"y":397,"width":716,"height":12}},{"id":"4d75f3fb-6055-4411-90fd-06ffbb86947b","block_type":"box","text":"addition, institutional clients in separately managed accounts (SMAs) are eligible for BlackRock Voting","page_number":230,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"aea537a7-d245-4e2c-949b-db3263a4e10a","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":230,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"71f103af-dd97-40f5-8a41-7f892e33a3e7","block_type":"box","text":"12","page_number":230,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"d6e37cb4-18bb-4718-b720-43af4ae441a6","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently","page_number":230,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"159a73e1-cc5c-4d4d-ad8f-8cc4ee405d1e","block_type":"box","text":"depending on whether our clients have authorized BAIS to vote on their behalf, have authorized","page_number":230,"box":{"x":116,"y":475,"width":715,"height":12}},{"id":"3c57a849-4202-4de5-b7eb-7042c0540206","block_type":"box","text":"BlackRock to vote in accordance with a third-party policy, or have elected to vote shares in accordance","page_number":230,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"b2a5c294-9647-4a95-9f82-c85e81173a2a","block_type":"box","text":"with their own policy. Our clients have greater control over proxy voting because of Voting Choice.","page_number":230,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"26eb1aa6-4a86-44cd-ae89-cd7bdbd72388","block_type":"box","text":"13","page_number":230,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"2870b50e-211a-45ef-b876-3ba2dbb68582","block_type":"box","text":"Use and oversight of third-party vote services providers","page_number":230,"box":{"x":117,"y":537,"width":452,"height":12}},{"id":"14a36f88-caee-4e16-bd22-9a2daaaeccbb","block_type":"box","text":"Third-party vote services providers – or proxy research firms—provide research and recommendations","page_number":230,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"134a441a-fd8d-449b-9b11-ab2546616673","block_type":"box","text":"on proxy votes, as well as voting infrastructure. BlackRock contracts primarily with the vote services","page_number":230,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"24ca3094-f9d8-4ca5-bd95-87eb61e65820","block_type":"box","text":"provider ISS and leverages its online platform to supply research and support voting, record keeping,","page_number":230,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"c68603be-9155-49d7-a701-2ee2aa99db2b","block_type":"box","text":"and reporting processes. We also use Glass Lewis’ research and analysis as an input into our voting","page_number":230,"box":{"x":116,"y":614,"width":752,"height":12}},{"id":"2303087b-cf39-4fee-ac24-c13dfa66d7f2","block_type":"box","text":"process. It is important to note that, although proxy research firms provide important data and analysis,","page_number":230,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"2599a2de-edba-4c04-9c39-4d177155ef19","block_type":"box","text":"BAIS does not rely solely on their information or follow their voting recommendations. A company’s","page_number":230,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"dd4c17f8-56ad-4170-b097-2d76ac5c4301","block_type":"box","text":"disclosures, our engagements and voting, investment colleagues’ insights and our Guidelines are","page_number":230,"box":{"x":116,"y":661,"width":722,"height":12}},{"id":"e777ffe1-0b01-4a53-8ce4-8a0cd7c3e314","block_type":"box","text":"important inputs into our voting decisions on behalf of clients.","page_number":230,"box":{"x":117,"y":676,"width":452,"height":12}},{"id":"7cb96406-6f1e-4fd1-8c40-2f7cc3e9e382","block_type":"box","text":"Given the large universe of actively held companies, BAIS employs the proxy services provider to","page_number":230,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"c1a96d36-6673-4d22-b6c7-5b68107a2d78","block_type":"box","text":"streamline the voting process by making voting recommendations based on BAIS’ Guidelines when the","page_number":230,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"b7fa46c5-7a53-45db-a81a-6e3952767616","block_type":"box","text":"items on a shareholder meeting agenda are routine. Agenda items that are not routine are referred","page_number":230,"box":{"x":117,"y":738,"width":730,"height":12}},{"id":"c7cd8893-0918-420f-b180-c96da23a468e","block_type":"box","text":"back to BAIS to assess, escalate as necessary to the relevant portfolio managers and vote. BAIS","page_number":230,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"d824483f-7c86-42b6-8416-1bf04551a082","block_type":"box","text":"reviews and can override the recommendations of the vote services provider at any time prior to the","page_number":230,"box":{"x":117,"y":769,"width":739,"height":12}},{"id":"32f9f3f7-d058-4cd9-9db1-66de9b0c7bf0","block_type":"box","text":"vote deadline. Both BAIS and the vote services provider actively monitor securities filings, research","page_number":230,"box":{"x":116,"y":785,"width":735,"height":12}},{"id":"e9b44ab5-de94-437b-aa3a-594d657035d3","block_type":"box","text":"reports, company announcements, and direct communications from companies to ensure awareness","page_number":230,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"c6641f94-b4b2-4ea8-9d89-f7d7c673ad44","block_type":"box","text":"of supplemental disclosures and proxy materials that may require a modification of votes.","page_number":230,"box":{"x":116,"y":816,"width":661,"height":12}},{"id":"6fc73ee9-d7a9-4b76-a57d-0eb58d83110b","block_type":"box","text":"12","page_number":230,"box":{"x":144,"y":841,"width":8,"height":5}},{"id":"d7ceecb0-6b77-4cd0-8ed5-7537afef9e51","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":230,"box":{"x":170,"y":841,"width":679,"height":9}},{"id":"7e8245cb-746b-469b-8bbb-af642eb12974","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":230,"box":{"x":170,"y":854,"width":695,"height":9}},{"id":"82301929-db67-4847-9c0f-919c4fc6575c","block_type":"box","text":"votes based on the client’s selected voting policy.","page_number":230,"box":{"x":170,"y":867,"width":292,"height":9}},{"id":"6d76d211-b089-4c3a-9230-0c87a05b96ff","block_type":"box","text":"13","page_number":230,"box":{"x":144,"y":880,"width":8,"height":5}},{"id":"92ad5647-bb1c-4215-9825-0b56f92dd370","block_type":"box","text":"BlackRock does not disclose client information, including a client’s selection of proxy policy, without client consent.","page_number":230,"box":{"x":171,"y":880,"width":678,"height":9}},{"id":"bdaf3428-9ce6-42d3-91fa-772b2ab58a84","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":230,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"0e873119-1914-467c-a8fb-a3904203933f","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":230,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"5451f47d-9931-4aba-ba4d-df96aabfd3ec","block_type":"box","text":"19","page_number":230,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"54516cb9-73cd-4071-8e86-858992a21dc3","block_type":"box","text":"NM1026U-6004408-230/267","page_number":230,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8b741679-7e9e-4264-adb1-511576bffa21","block_type":"box","text":"BAIS closely monitors the third-party vote services providers we contract with to ensure that they are","page_number":231,"box":{"x":117,"y":87,"width":751,"height":12}},{"id":"a4311a72-ba9b-4b2a-bfec-825e1b0b9e62","block_type":"box","text":"meeting our service level expectations and have effective policies and procedures in place to manage","page_number":231,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"8094c18a-6e54-4289-8ad2-5774f9b7df4e","block_type":"box","text":"potential conflicts of interest. Our oversight of service providers includes regular meetings with client","page_number":231,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"1a50e437-c974-4f5d-9ae1-c91521df14eb","block_type":"box","text":"service teams, systematic monitoring of vendor operations, as well as annual due diligence meetings in","page_number":231,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"c5e34503-13a7-4aa6-baf7-944aa7855e1d","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":231,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"d9f7a9ab-c989-4d0b-83c5-0285738d283e","block_type":"box","text":"Conflicts management policies and procedures","page_number":231,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"e2408201-ce41-4150-afa3-96fd8642becb","block_type":"box","text":"BlackRock maintains policies and procedures that seek to prevent undue influence on BAIS’ proxy","page_number":231,"box":{"x":117,"y":213,"width":734,"height":12}},{"id":"b13c5ba8-73d5-4f6a-8943-c436755986a2","block_type":"box","text":"voting activity. Such influence might stem from any relationship between the investee company (or any","page_number":231,"box":{"x":116,"y":228,"width":767,"height":12}},{"id":"8f76edcd-d9f0-4742-babd-3141ff016e7a","block_type":"box","text":"shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a","page_number":231,"box":{"x":116,"y":244,"width":743,"height":12}},{"id":"a2bd4b47-b334-4c4a-843e-ff2d04a4f966","block_type":"box","text":"Fund’s affiliates, or BlackRock employees. 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Within the normal course of business, BAIS may","page_number":231,"box":{"x":149,"y":730,"width":681,"height":12}},{"id":"c9d41df4-5806-4985-a8b7-6db9eb5c7783","block_type":"box","text":"engage directly with BlackRock clients, business partners and/or third parties, and/or with","page_number":231,"box":{"x":150,"y":746,"width":663,"height":11}},{"id":"27ee4200-9502-46bb-86a9-0c5aca8cd6df","block_type":"box","text":"employees with sales, vendor management, or business partnership roles, in discussions","page_number":231,"box":{"x":150,"y":761,"width":662,"height":12}},{"id":"68662241-15b5-4a70-be49-e750045895e0","block_type":"box","text":"regarding our approach to stewardship, general corporate governance matters, client reporting","page_number":231,"box":{"x":150,"y":777,"width":701,"height":12}},{"id":"50c43a82-900d-49c2-a068-317f39c1fc80","block_type":"box","text":"needs, and/or to otherwise ensure that proxy-related client service levels are met","page_number":231,"box":{"x":150,"y":792,"width":601,"height":12}},{"id":"f04fd9de-6b04-4897-8b61-c0ef8aed94aa","block_type":"box","text":"• Determined to engage, in certain instances, an independent third-party voting service provider to","page_number":231,"box":{"x":117,"y":816,"width":749,"height":12}},{"id":"4dfce671-69de-4608-8309-9f148d6e488d","block_type":"box","text":"make proxy voting recommendations as a further safeguard to avoid perceived or potential","page_number":231,"box":{"x":150,"y":831,"width":678,"height":12}},{"id":"1b59b6cc-67c7-45ef-ac07-a80080fbd1b6","block_type":"box","text":"conflicts of interest, to satisfy regulatory requirements, or as may be otherwise required by","page_number":231,"box":{"x":150,"y":847,"width":674,"height":12}},{"id":"20cf6b55-f185-4090-bac6-9127c3f658bb","block_type":"box","text":"applicable law. 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BlackRock uses an independent third-party voting service provider to make proxy voting","page_number":232,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"0043c084-41a6-4b71-a6e1-a854e2384f0f","block_type":"box","text":"recommendations for shares of BlackRock, Inc. and companies affiliated with BlackRock, Inc.","page_number":232,"box":{"x":150,"y":102,"width":698,"height":12}},{"id":"83d67ef2-8fd9-4359-819b-4cb5d047149c","block_type":"box","text":"BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":232,"box":{"x":151,"y":118,"width":721,"height":12}},{"id":"b0142ade-37f2-40bb-b7be-f847b1a73038","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":232,"box":{"x":150,"y":134,"width":608,"height":12}},{"id":"672414d0-59ef-4603-a7b9-efce2e2998b8","block_type":"box","text":"• public companies that include BlackRock employees on their boards of directors","page_number":232,"box":{"x":159,"y":156,"width":624,"height":12}},{"id":"efa2fcb1-8ec5-424d-8465-a149c721fc05","block_type":"box","text":"• public companies of which a BlackRock, Inc. board member serves as a senior executive or a","page_number":232,"box":{"x":159,"y":178,"width":725,"height":12}},{"id":"113abbe0-ef20-485b-ab67-6a845fa381fd","block_type":"box","text":"member of the board of directors","page_number":232,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"7e6e9712-4922-409c-b6b8-e7e503ed2905","block_type":"box","text":"• public companies that are the subject of certain transactions involving BlackRock Funds","page_number":232,"box":{"x":159,"y":215,"width":682,"height":12}},{"id":"2a2275c0-fafc-4a60-9894-b3244fc9f4dc","block_type":"box","text":"• public companies that are joint venture partners with BlackRock, and","page_number":232,"box":{"x":159,"y":238,"width":540,"height":11}},{"id":"90296596-3c9d-46bb-bb17-226022fdc806","block_type":"box","text":"• public companies when legal or regulatory requirements compel BlackRock to use an","page_number":232,"box":{"x":159,"y":260,"width":663,"height":12}},{"id":"819469c6-ea03-4d0b-b980-c86a5aaae161","block_type":"box","text":"independent third-party voting service provider","page_number":232,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"dd539e05-7848-4364-8079-090d68c7e1fd","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics,","page_number":232,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"367cf0a7-1945-4ccc-8794-578c67806ec0","block_type":"box","text":"including but not limited to: independence, an ability to analyze proxy issues and make","page_number":232,"box":{"x":117,"y":319,"width":647,"height":12}},{"id":"d4b23b4b-d628-4c59-bcd6-1bceb7710e91","block_type":"box","text":"recommendations in the economic interest of our clients in accordance with the Guidelines, reputation","page_number":232,"box":{"x":117,"y":335,"width":760,"height":12}},{"id":"82bf15ee-cc79-4368-85b1-ed0a7d33107c","block_type":"box","text":"for reliability and integrity, and operational capacity to accurately deliver the assigned","page_number":232,"box":{"x":116,"y":350,"width":637,"height":12}},{"id":"d1631abf-c501-4384-b11c-43c5d32b246a","block_type":"box","text":"recommendations in a timely manner. 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Our vote decisions are often informed by several factors, including in-depth","page_number":240,"box":{"x":117,"y":375,"width":706,"height":12}},{"id":"1e99acee-5093-4807-bc84-1dca720e076f","block_type":"box","text":"analysis of company disclosures, comparisons against industry peers, third-party research, and, where","page_number":240,"box":{"x":116,"y":391,"width":768,"height":12}},{"id":"0bbf2dfd-c664-45d9-b3ae-edb5e4c699b2","block_type":"box","text":"appropriate, engagement with companies.","page_number":240,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"b530cee0-4379-4b85-b2cc-0fa8a824e5ea","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at","page_number":240,"box":{"x":117,"y":434,"width":721,"height":12}},{"id":"d078daeb-c96d-4d73-b08e-73909c810b29","block_type":"box","text":"companies which have sound corporate governance and deliver strong financial returns over time.","page_number":240,"box":{"x":116,"y":450,"width":734,"height":12}},{"id":"55b7d927-3ada-4ec0-87ed-173675e2ff7d","block_type":"box","text":"When we determine it is in our clients’ financial interests to convey concern to companies through","page_number":240,"box":{"x":116,"y":465,"width":729,"height":12}},{"id":"8c8a6bd7-5fa7-4918-b3da-d14c441412d0","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":240,"box":{"x":116,"y":481,"width":768,"height":12}},{"id":"a4706139-a342-4c9c-82a4-1a870802f3b8","block_type":"box","text":"proposals, or we might not support management’s voting recommendation on a shareholder proposal.","page_number":240,"box":{"x":117,"y":496,"width":761,"height":12}},{"id":"029d3476-bac3-4033-86f8-5216c6d9d3d6","block_type":"box","text":"Shareholder rights","page_number":240,"box":{"x":425,"y":530,"width":154,"height":13}},{"id":"26716827-5ff8-452a-be06-a34e96498b81","block_type":"box","text":"BlackRock’s global approach as a shareholder on behalf of our clients is underpinned by certain rights","page_number":240,"box":{"x":117,"y":558,"width":762,"height":12}},{"id":"a480f2a6-038f-4e6b-8602-1a5446772e84","block_type":"box","text":"attached to shareholding in most markets, as established by corporate laws, regulations, and listing","page_number":240,"box":{"x":116,"y":574,"width":743,"height":12}},{"id":"584963c0-479f-4f9a-9d29-b77146d40d0c","block_type":"box","text":"rules.","page_number":240,"box":{"x":117,"y":590,"width":38,"height":9}},{"id":"e58cce04-62ea-4b4e-a0d1-2fbefab4e062","block_type":"box","text":"3","page_number":240,"box":{"x":157,"y":590,"width":5,"height":6}},{"id":"1eca4b76-4f5b-4bc3-8390-454d58073a72","block_type":"box","text":"For example, in most markets, shareholders have the right to:","page_number":240,"box":{"x":163,"y":590,"width":468,"height":11}},{"id":"d1305abc-ab0b-409d-a1b8-22c0d4d4d0c0","block_type":"box","text":"• Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and","page_number":240,"box":{"x":159,"y":617,"width":705,"height":12}},{"id":"f1b83bc3-e92a-410a-9477-e28568757ba7","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":240,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"ec85a8b9-0ef0-4463-8cbf-11b20e40627f","block_type":"box","text":"• Vote on key board decisions that are material to","page_number":240,"box":{"x":159,"y":655,"width":377,"height":12}},{"id":"7c6ee6dc-0d75-478d-96e4-0f91b0c5ac97","block_type":"box","text":"the protection of their investment, including but","page_number":240,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"efdd9fdb-05d3-4bbb-aa46-ccfb76e865c1","block_type":"box","text":"not limited to, changes to the purpose of the busi","page_number":240,"box":{"x":184,"y":670,"width":353,"height":12}},{"id":"928f3b38-79fe-4490-8e89-ed804914f32a","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":240,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"b6cd8932-90f0-43a9-b35e-2a7f1af048ef","block_type":"box","text":"• Access sufficient and timely information on governance, strategic, and business matters –","page_number":240,"box":{"x":159,"y":692,"width":691,"height":12}},{"id":"85f5e504-e23e-41b1-8682-0b6f6b3724d6","block_type":"box","text":"where such matters are material – to make informed decisions.","page_number":240,"box":{"x":183,"y":707,"width":468,"height":10}},{"id":"118008a5-3a04-417f-9c3a-c8ad3237d6f8","block_type":"box","text":"Key governance topics","page_number":240,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"f2ab2734-66b1-489e-983b-617b6c18799f","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that","page_number":240,"box":{"x":117,"y":769,"width":696,"height":12}},{"id":"3de6e398-5872-4925-a710-3a2b1ea71ff5","block_type":"box","text":"contribute to a company’s ability to create long-term financial value for shareholders. These are topics","page_number":240,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"e425a33b-f148-467d-bf1e-813bc633f340","block_type":"box","text":"that shareholders may have the ability to vote on at shareholder meetings. These areas include:","page_number":240,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"b6b54856-0428-4578-8bd6-7aa9309d1505","block_type":"box","text":"• Boards and directors","page_number":240,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"e6a136a4-9b50-4611-97ba-217be359d0e4","block_type":"box","text":"3","page_number":240,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"92d61258-6409-4441-97c1-1a97ff0e9cf3","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":240,"box":{"x":171,"y":853,"width":682,"height":10}},{"id":"7bb83377-a016-47b8-ba8d-4f38917ad165","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":240,"box":{"x":170,"y":866,"width":651,"height":10}},{"id":"ec9bd903-89da-4561-b967-d420121148c5","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":240,"box":{"x":170,"y":879,"width":538,"height":10}},{"id":"f8492076-9117-4abd-b87d-b90cbb24c1e9","block_type":"box","text":"BlackRock Investment Stewardship","page_number":240,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"de9b4df7-0633-4cc4-bd87-d0a10ae8e220","block_type":"box","text":"Global Principles |","page_number":240,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"88752d46-e760-495b-8dd6-b35def190b11","block_type":"box","text":"4","page_number":240,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"5b418f62-699c-47a6-a693-34077d1c633a","block_type":"box","text":"NM1026U-6004408-240/267","page_number":240,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ed229b0d-3b73-47f4-ac53-43f03aaa0575","block_type":"box","text":"• Auditors and audit-related issues","page_number":241,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"90025cab-8646-4204-adda-5e8cc588c4eb","block_type":"box","text":"• Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":241,"box":{"x":117,"y":109,"width":635,"height":12}},{"id":"3839a2fd-0f05-45c3-8e1e-9beebbd714fa","block_type":"box","text":"• Executive compensation","page_number":241,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"f3609c0e-1a3e-4bac-b178-a4f9aa2f176f","block_type":"box","text":"• Shareholder protections and other significant corporate governance matters","page_number":241,"box":{"x":117,"y":152,"width":600,"height":12}},{"id":"cb4f26b4-9144-4d42-8206-8f4c24c00a40","block_type":"box","text":"• Shareholder proposals","page_number":241,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"13211f6e-5a8a-48f6-a59e-f05acac99b56","block_type":"box","text":"The BIS Benchmark Policies are not prescriptive but rather are applied on a pragmatic basis, taking","page_number":241,"box":{"x":116,"y":201,"width":744,"height":12}},{"id":"223d91dc-1e98-44e3-aabf-675220749783","block_type":"box","text":"into consideration a number of company-specific factors, including the sector, market, and business","page_number":241,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"4e364da6-a3af-452a-88e3-76c352b7fad0","block_type":"box","text":"environment within which companies operate.","page_number":241,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"5dbad879-a5f4-4565-8c8b-5c60c737d34c","block_type":"box","text":"At the regional level, it is our view that companies should observe the accepted corporate governance","page_number":241,"box":{"x":116,"y":259,"width":761,"height":12}},{"id":"28bb6a04-15c3-41e5-9059-a092156afded","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":241,"box":{"x":116,"y":275,"width":736,"height":12}},{"id":"3012807e-c5f6-4cc8-a239-dad0307ece5b","block_type":"box","text":"their approach better supports durable, long-term financial value creation. Our regional voting","page_number":241,"box":{"x":116,"y":290,"width":698,"height":12}},{"id":"1a5aec2a-779b-4393-9063-c46107ecf9a2","block_type":"box","text":"guidelines explain how the BIS Global Principles inform our voting decisions in relation to common","page_number":241,"box":{"x":116,"y":306,"width":735,"height":12}},{"id":"49aa065c-bfe9-42ef-9bd4-3d704c6e6f77","block_type":"box","text":"ballot items for shareholder meetings in those markets.","page_number":241,"box":{"x":117,"y":321,"width":406,"height":12}},{"id":"01990830-1de0-40cc-af50-396133357c05","block_type":"box","text":"4","page_number":241,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"f6de9be2-1a7e-4ea8-9e91-90ceb1826701","block_type":"box","text":"Boards and directors","page_number":241,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"9ee212e4-6dc8-46e4-9e84-0431f8b1d030","block_type":"box","text":"Oversight role of the board","page_number":241,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"fd242d75-62cc-4723-9e6c-127f8e39cafb","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with","page_number":241,"box":{"x":117,"y":410,"width":676,"height":12}},{"id":"ae5b593a-11e6-45a0-9d25-ae12a737b455","block_type":"box","text":"professional characteristics relevant to a company’s business enhance the board’s ability to add long","page_number":241,"box":{"x":117,"y":426,"width":753,"height":12}},{"id":"0dff077e-e855-41bc-83af-b89adf158d6f","block_type":"box","text":"term financial value and serve as the voice of shareholders in board discussions. In our view, a strong","page_number":241,"box":{"x":116,"y":441,"width":761,"height":12}},{"id":"746f0674-b285-49da-bb10-afb3103d90a9","block_type":"box","text":"board gives a company a competitive advantage, providing valuable oversight and contributing to the","page_number":241,"box":{"x":117,"y":457,"width":754,"height":12}},{"id":"c774fca5-d07c-4fb2-963b-06bd612b74d0","block_type":"box","text":"most important management decisions that support long-term financial performance.","page_number":241,"box":{"x":117,"y":472,"width":632,"height":12}},{"id":"b80cf7c9-8b30-4ace-a3bf-7b13f7a40598","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors.","page_number":241,"box":{"x":117,"y":500,"width":768,"height":12}},{"id":"661cacc5-4e50-4a39-a536-242b0105befd","block_type":"box","text":"We engage, as necessary, with members of the board’s nominating and/or governance committee to","page_number":241,"box":{"x":116,"y":515,"width":753,"height":12}},{"id":"1f5fda87-ac2f-42c2-86af-4dfd8c118f8e","block_type":"box","text":"assess whether governance practices and board composition are effective given a company’s","page_number":241,"box":{"x":116,"y":531,"width":701,"height":12}},{"id":"ab6899d4-57c2-4c1b-88dd-470fc6f479a2","block_type":"box","text":"business model, sector, market, and the business environment in which a company is operating.","page_number":241,"box":{"x":117,"y":546,"width":719,"height":12}},{"id":"2c5a27be-3080-4959-90bd-f5f9f46b0c5f","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and","page_number":241,"box":{"x":116,"y":574,"width":736,"height":12}},{"id":"1027ca2e-542b-45a1-bf7a-e1e23a830f76","block_type":"box","text":"effective governance mechanisms that supports its oversight of the company’s strategy and","page_number":241,"box":{"x":116,"y":589,"width":685,"height":12}},{"id":"dfbbbd5d-f89f-48d0-94b4-b3306daed5a6","block_type":"box","text":"operations, consistent with the long-term financial interests of investors. This includes having clear","page_number":241,"box":{"x":116,"y":605,"width":735,"height":12}},{"id":"b8e54f4d-4436-484a-8695-2d6cca412927","block_type":"box","text":"descriptions of the role of the board and the committees of the board and how directors engage with","page_number":241,"box":{"x":116,"y":620,"width":748,"height":12}},{"id":"6be89424-f4d9-4f0b-9c88-d07646bbd5c1","block_type":"box","text":"and oversee management, as well as disclosure of material risks that may affect a company’s long","page_number":241,"box":{"x":116,"y":636,"width":738,"height":12}},{"id":"c451e3d6-f97f-4670-b853-97e1c038b488","block_type":"box","text":"term strategy and how management is effectively identifying, managing, and mitigating such risks.","page_number":241,"box":{"x":116,"y":651,"width":732,"height":12}},{"id":"e7334d85-7ac9-4b66-b268-8ff5dbb60165","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should","page_number":241,"box":{"x":117,"y":679,"width":741,"height":12}},{"id":"b51c0da3-50fb-49d5-ade0-f335807e01ca","block_type":"box","text":"assess its implementation is central to our approach. If any strategic targets are significantly missed or","page_number":241,"box":{"x":116,"y":694,"width":761,"height":12}},{"id":"82ca171c-d879-4659-b6d2-9483ecd8fe78","block_type":"box","text":"materially restated, we find it helpful when company disclosures provide a detailed explanation of the","page_number":241,"box":{"x":117,"y":710,"width":747,"height":12}},{"id":"6af1addb-5426-4a41-9d20-f037758a388e","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":241,"box":{"x":116,"y":725,"width":754,"height":12}},{"id":"d7a4c2d5-af90-4209-b9a0-140928a02bfc","block_type":"box","text":"articulate the effectiveness of these mechanisms in overseeing the management of business risks and","page_number":241,"box":{"x":116,"y":741,"width":759,"height":12}},{"id":"8da21369-a1cc-4190-8568-938190434b3f","block_type":"box","text":"opportunities and the fulfillment of the company’s strategy.","page_number":241,"box":{"x":116,"y":756,"width":432,"height":12}},{"id":"ffb05900-8c89-4f3e-b301-89a85e4b0ee7","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these","page_number":241,"box":{"x":116,"y":784,"width":722,"height":12}},{"id":"0916c131-d2af-4de1-8710-b22632f32785","block_type":"box","text":"corporate governance and risk oversight responsibilities, we may consider not supporting the election","page_number":241,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"829d775a-f19f-40ce-a467-4dae0197f704","block_type":"box","text":"of directors who, in our assessment, have particular responsibility for the issues.","page_number":241,"box":{"x":116,"y":815,"width":594,"height":12}},{"id":"393e01bf-f047-4090-9430-8f28a2943034","block_type":"box","text":"4","page_number":241,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"2cb0fe0c-9629-4988-98e2-4bd349d06b28","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market, generally","page_number":241,"box":{"x":170,"y":840,"width":702,"height":10}},{"id":"7ea8914e-4910-4172-ad8f-3e83e0c55dd8","block_type":"box","text":"accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives, amongst other","page_number":241,"box":{"x":170,"y":853,"width":712,"height":10}},{"id":"cb26bacb-64da-42a9-8c03-01d76464d355","block_type":"box","text":"factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote operations (including","page_number":241,"box":{"x":170,"y":866,"width":688,"height":10}},{"id":"92383409-de1e-4eeb-ab20-25e25da0219d","block_type":"box","text":"maintaining records of votes cast) in a manner consistent with the relevant regional voting guidelines.","page_number":241,"box":{"x":170,"y":879,"width":600,"height":10}},{"id":"909b59f0-975f-4c55-ae04-52775b9a3d85","block_type":"box","text":"BlackRock Investment Stewardship","page_number":241,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"ae0d26cf-ff16-4809-b0dc-0207b6b5518d","block_type":"box","text":"Global Principles |","page_number":241,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"01c8d5c5-2935-4988-89d9-14d17ef8deae","block_type":"box","text":"5","page_number":241,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"001fe1bd-503e-4118-ad94-c45b7bfa975e","block_type":"box","text":"NM1026U-6004408-241/267","page_number":241,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"190b4665-17b5-4731-be24-42194caaebe4","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that","page_number":242,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"f3eb0e6b-2b4f-4bba-8951-42bc832e2f57","block_type":"box","text":"speak to the board’s effectiveness as a group include the relevance of individual directors’","page_number":242,"box":{"x":116,"y":102,"width":673,"height":13}},{"id":"f76afaef-4ce3-465a-b2e7-bf0a2bde3f25","block_type":"box","text":"qualifications and skillsets, as well as directors’ capacity and other time commitments, and how these","page_number":242,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"89da5d02-073a-4f4e-951c-e6a44d633ebd","block_type":"box","text":"factors may contribute to the company’s financial performance. We look to boards to establish formal","page_number":242,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"adc68e98-cc2f-40a1-a583-d680c879f0cd","block_type":"box","text":"and transparent processes for nominating directors that reflect the company’s long-term strategy and","page_number":242,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"63b8b6af-03af-417e-9eb6-67a27cc8d54b","block_type":"box","text":"business model.","page_number":242,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"39506345-0912-4ead-b8ee-7a88c6d5aa7d","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our","page_number":242,"box":{"x":117,"y":193,"width":697,"height":12}},{"id":"b11106a7-5520-49cb-adeb-84dac390a543","block_type":"box","text":"approach to board composition and how it underpins board effectiveness and long-term financial value","page_number":242,"box":{"x":116,"y":209,"width":766,"height":12}},{"id":"0ca2029f-0ee6-48c6-b320-6a6575066983","block_type":"box","text":"creation.","page_number":242,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"7109baeb-57ed-4324-8b78-18d2d730e9ef","block_type":"box","text":"Regular accountability through director elections","page_number":242,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"18f169a1-9da4-410a-ab57-49fbe70a3fda","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":242,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"d17b9f07-abb0-4a48-b2c0-fc870fc0afaa","block_type":"box","text":"or concern about, the performance of the board in overseeing and advising management. To ensure","page_number":242,"box":{"x":116,"y":297,"width":749,"height":12}},{"id":"bae3a452-3e62-41e6-bd8d-54b4443ff63b","block_type":"box","text":"accountability for their decisions on behalf of shareholders, directors should stand for election on a","page_number":242,"box":{"x":116,"y":312,"width":736,"height":12}},{"id":"08783074-9992-451a-a9d9-8d21b2fb4823","block_type":"box","text":"regular basis, ideally annually.","page_number":242,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"0aa014ff-e7c1-4d78-b483-066a10fd5ec6","block_type":"box","text":"5","page_number":242,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"3d940011-000b-4611-9d2e-2810f27a978c","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support","page_number":242,"box":{"x":347,"y":328,"width":517,"height":12}},{"id":"58123621-d7b2-432c-9aca-b2f463567e97","block_type":"box","text":"for, or concerns about, board members’ decisions in a timely manner. When board members are not","page_number":242,"box":{"x":116,"y":343,"width":749,"height":12}},{"id":"ba0f61d1-9995-4052-b507-a03dca49f397","block_type":"box","text":"elected annually, we consider it good practice for boards to have a rotation policy to ensure that,","page_number":242,"box":{"x":116,"y":359,"width":719,"height":12}},{"id":"81d04707-49cb-41f8-b3bb-2e9e423d35d1","block_type":"box","text":"through a board cycle, all directors have had their appointment re-confirmed, with a proportion of","page_number":242,"box":{"x":116,"y":374,"width":722,"height":12}},{"id":"364f0578-b00e-4775-b06e-6a791408d6a2","block_type":"box","text":"directors being put forward for election at each shareholder meeting.","page_number":242,"box":{"x":116,"y":390,"width":513,"height":12}},{"id":"f4538626-9e74-427a-975f-09277a00151b","block_type":"box","text":"Board quality and effectiveness","page_number":242,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"56cdc5b4-0301-4ecc-bae1-b6c9a2f73598","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way","page_number":242,"box":{"x":117,"y":447,"width":770,"height":12}},{"id":"08122015-6ef2-4067-becd-94551ce8a794","block_type":"box","text":"to reflect developments in the company’s strategy and the market environment. In our view, it is","page_number":242,"box":{"x":116,"y":462,"width":714,"height":12}},{"id":"25cb4477-fc89-4413-af3d-cdc6c495f239","block_type":"box","text":"beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking,","page_number":242,"box":{"x":117,"y":478,"width":741,"height":12}},{"id":"a6991e1f-1355-4c31-a1a5-fccdab2af661","block_type":"box","text":"while supporting both continuity and appropriate succession planning. We consider the average overall","page_number":242,"box":{"x":116,"y":493,"width":768,"height":12}},{"id":"72c15531-8dbc-4cb8-9b34-f5dd54fb5941","block_type":"box","text":"tenure of the board and seek a balance between the knowledge and experience of longer-serving","page_number":242,"box":{"x":116,"y":509,"width":728,"height":12}},{"id":"1be810ca-fcbb-4d1e-a73a-b3dab34e33e3","block_type":"box","text":"directors and the fresh perspectives of directors who joined more recently.","page_number":242,"box":{"x":116,"y":524,"width":556,"height":12}},{"id":"d3f2ea14-2cd3-4beb-9502-f69f7a4c5973","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election","page_number":242,"box":{"x":116,"y":553,"width":731,"height":12}},{"id":"f2736f4e-19f7-4e33-8556-76e0f7db97e9","block_type":"box","text":"contribute to the effectiveness of the board. In our view, the company’s assessment should consider a","page_number":242,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"3c38d61f-1baf-4b96-82e9-f52cbf16a261","block_type":"box","text":"number of factors, including each director’s independence and time commitments, as well as the","page_number":242,"box":{"x":117,"y":584,"width":720,"height":12}},{"id":"327bbadf-cac6-4a6a-be27-9e73b7fddb13","block_type":"box","text":"breadth and relevance of director experiences and skillsets, and how these collectively contribute to","page_number":242,"box":{"x":117,"y":599,"width":744,"height":13}},{"id":"1c624a5d-b0a6-4b8f-be0f-0f2621313a26","block_type":"box","text":"the board’s effectiveness in advising and overseeing management in delivering long-term financial","page_number":242,"box":{"x":116,"y":615,"width":734,"height":12}},{"id":"47223b3a-a39a-4fc6-b4c6-25c9de762d78","block_type":"box","text":"returns.","page_number":242,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"1a1b18c8-00d4-4859-a9b3-76ba44631be9","block_type":"box","text":"Director independence","page_number":242,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"1bce55b2-a7ba-4b56-8b72-5bedf8738dc0","block_type":"box","text":"Director independence – from management, significant shareholders, or other related parties – is a","page_number":242,"box":{"x":117,"y":688,"width":733,"height":12}},{"id":"1eb414ef-9fce-43c0-a3f8-ba24be314d3e","block_type":"box","text":"central tenet of sound corporate governance across markets.","page_number":242,"box":{"x":116,"y":703,"width":452,"height":12}},{"id":"c46a0f50-562f-4135-b2e5-9d392eed2ac7","block_type":"box","text":"6","page_number":242,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"13227903-f3ac-460d-9b63-ef7858e03a22","block_type":"box","text":"We look to boards to have a sufficient","page_number":242,"box":{"x":581,"y":703,"width":280,"height":10}},{"id":"86145631-549c-4076-b810-d5ea82e79af6","block_type":"box","text":"number of independent directors, free from conflicts of interest or undue influence, to ensure objectivity","page_number":242,"box":{"x":117,"y":719,"width":763,"height":12}},{"id":"4f0ea958-5927-4acd-8a76-a1ce84aa3f12","block_type":"box","text":"in the decision-making of the board and its ability to oversee management. We generally consider it","page_number":242,"box":{"x":117,"y":734,"width":738,"height":12}},{"id":"a5372528-0408-41a7-8585-3d6b1ab555d9","block_type":"box","text":"good practice for independent directors to make a majority of the board, or in the case of controlled","page_number":242,"box":{"x":116,"y":750,"width":734,"height":12}},{"id":"a78097d1-b73e-4f8c-8071-d45669604c8f","block_type":"box","text":"companies, at least one-third.","page_number":242,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"3a6486ea-c7be-4b84-8e84-5a39d889cc0d","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":242,"box":{"x":117,"y":794,"width":551,"height":12}},{"id":"e1588df9-fa1d-405d-be90-8e98f8f010da","block_type":"box","text":"• Current or recent employment at the company or a subsidiary","page_number":242,"box":{"x":117,"y":816,"width":490,"height":12}},{"id":"56e9ffb3-d4e3-4090-add3-d85a1dc0d6ca","block_type":"box","text":"5","page_number":242,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"d9bd59a4-9289-4086-8bd3-b2fd11c4ba96","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":242,"box":{"x":171,"y":841,"width":703,"height":9}},{"id":"773b8fe1-651c-469d-8907-05acf850b169","block_type":"box","text":"regulation or voluntary best practice.","page_number":242,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"e2827884-95e4-4c69-bad5-dfc77a113cac","block_type":"box","text":"6","page_number":242,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"93e0b0ad-0635-4302-a056-e9911625077f","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":242,"box":{"x":171,"y":867,"width":683,"height":9}},{"id":"e11fd5bd-277a-4d07-b83c-b4c68e76f99b","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":242,"box":{"x":171,"y":880,"width":587,"height":9}},{"id":"f5800e7d-2349-4b74-adab-699f6a2ef78f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":242,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"f807855a-3a6f-4ced-9f81-d031305caec1","block_type":"box","text":"Global Principles |","page_number":242,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"151a88cd-c710-4200-8bb5-75a3e722d353","block_type":"box","text":"6","page_number":242,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"6d535520-5ca3-4540-8dca-34b2ef0ae6ab","block_type":"box","text":"NM1026U-6004408-242/267","page_number":242,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a7e7f9b1-04de-46bc-9de6-d5d78dc8d728","block_type":"box","text":"• Being, or representing, a shareholder with a substantial shareholding in the company","page_number":243,"box":{"x":117,"y":87,"width":668,"height":12}},{"id":"8d192c98-7504-478d-bac8-111598542cea","block_type":"box","text":"• Interlocking directorates","page_number":243,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"a5b81773-8229-45c1-9742-07b1e82225bc","block_type":"box","text":"• Having any other interest, business, or other relationship which could, or could reasonably be","page_number":243,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"251d796c-cb94-4525-8775-4bb49ccc4627","block_type":"box","text":"perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":243,"box":{"x":150,"y":149,"width":729,"height":12}},{"id":"ce791725-55de-4fc8-813e-fb0c013e8f3c","block_type":"box","text":"and shareholders","page_number":243,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"efc57d8a-a2db-44f5-ab1f-9936d2c4fef9","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a","page_number":243,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"eb162223-1e1e-4b3b-b8e2-8e691f947bf2","block_type":"box","text":"senior, independent board leader. This director may chair the board, or, where the chair is also the","page_number":243,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"9d1e97d9-45c9-45e6-b4b0-8cc6afa694b7","block_type":"box","text":"CEO (or is otherwise not independent), be designated as a lead independent director. The role of this","page_number":243,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"2e0ae5ed-a9ec-4309-9f05-fcc2d64c4dc9","block_type":"box","text":"director is to support independent board members in fulfilling their oversight responsibilities effectively","page_number":243,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"8c7d8449-3070-4182-8e39-9842ad6c734c","block_type":"box","text":"by shaping the agenda, ensuring adequate information is provided to the board, and encouraging","page_number":243,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"6ab65726-d5e5-4a22-9e36-b638a6925c9c","block_type":"box","text":"independent director participation in board deliberations. We appreciate when the lead independent","page_number":243,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"4231e882-1e55-4a70-b632-9e4e8ff42dc5","block_type":"box","text":"director or another appropriate director is available to meet with shareholders to explain and","page_number":243,"box":{"x":116,"y":289,"width":687,"height":12}},{"id":"9c5d6e17-bcea-4bfa-94d2-5eb390b46f6f","block_type":"box","text":"contextualize a company’s approach as a situation warrants.","page_number":243,"box":{"x":116,"y":304,"width":454,"height":12}},{"id":"1961c763-0101-4df6-8031-11dde8adc501","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or","page_number":243,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"9fdd8e4a-519d-48e1-bf73-bf91ce148249","block_type":"box","text":"that require additional focus. It is our view that objective oversight of such matters is best achieved","page_number":243,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"744af3f0-80c9-4ae0-923f-1f88de3694ba","block_type":"box","text":"when the board forms committees with a majority of independent directors, depending on market","page_number":243,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"93411f18-72f4-4188-bb4d-91dfda5703eb","block_type":"box","text":"norms and a company’s ownership structure. In many markets, these committees of the board","page_number":243,"box":{"x":117,"y":382,"width":704,"height":12}},{"id":"c2d608a6-0cc9-412b-ab4a-b82333ee18d5","block_type":"box","text":"specialize in audit, director nominations, and compensation matters, among others. An ad hoc","page_number":243,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"8960f49d-9de3-485f-9e7b-c2325be38ea5","block_type":"box","text":"committee might also be formed to decide on a special transaction, particularly one involving a related","page_number":243,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"cda814f7-afb3-471e-8fcc-df5907229ccf","block_type":"box","text":"party, or to investigate a significant adverse event.","page_number":243,"box":{"x":117,"y":428,"width":378,"height":12}},{"id":"d0397298-a6d2-4ae5-8079-3e3e145535e6","block_type":"box","text":"Sufficient capacity","page_number":243,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"6e1c1568-a725-47c6-9dfa-6e24876f2617","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to","page_number":243,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"72b30c8e-0806-4ddb-9ce5-40fa7e62837a","block_type":"box","text":"commit an appropriate amount of time to board and committee matters. It is important that directors","page_number":243,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"a4683c47-5315-4d56-a2a1-6e4672189141","block_type":"box","text":"have the capacity to meet all of their responsibilities – including when there are unforeseen events –","page_number":243,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"00a2d1cd-85b1-49c5-bf5b-7f9b01b319f5","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":243,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"9d2540cc-6968-474c-9267-7d16cc475a08","block_type":"box","text":"would impair their ability to fulfill their duties.","page_number":243,"box":{"x":116,"y":552,"width":333,"height":12}},{"id":"e3f9b4be-f080-4e47-9066-fdc132aeaa5b","block_type":"box","text":"Board composition","page_number":243,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"94318ea1-fdd7-418b-8eca-2d6c078f11ea","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model,","page_number":243,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"accf3934-a622-4583-a2b4-b7039c2979ae","block_type":"box","text":"strategy, market capitalization, and ownership structure, as well as the market in which the company","page_number":243,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"5a7dcf74-0892-4689-8fec-11f10ab0cfb6","block_type":"box","text":"operates. We find it helpful when companies explain how their approach to board composition supports","page_number":243,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"03a81931-a299-4318-a2cf-16c142e5558f","block_type":"box","text":"the company’s governance practices.","page_number":243,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"b30c3170-9778-43e9-8a90-cbf505941fa8","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the","page_number":243,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"cff6c164-007c-464a-81f3-a3808c019685","block_type":"box","text":"individual candidates so that shareholders can assess the capabilities and suitability of each individual","page_number":243,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"a4cc7207-7def-42e3-8ef1-0d12314f830b","block_type":"box","text":"nominee and their fit within overall board composition. These disclosures should explain how the","page_number":243,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"afc5b81d-c09a-4c84-baf1-8e4955dcd258","block_type":"box","text":"collective experience and expertise of the board, as well as the particular skillsets of individual","page_number":243,"box":{"x":116,"y":738,"width":697,"height":12}},{"id":"b1efcf98-bac7-412c-b010-8e6fce5f66f5","block_type":"box","text":"directors, aligns with the company’s long-term strategy. Highly qualified, engaged directors with","page_number":243,"box":{"x":116,"y":754,"width":707,"height":12}},{"id":"fe922f5c-fdc8-4e4d-8915-2072a49d5755","block_type":"box","text":"professional characteristics relevant to a company’s business and strategy enhance the ability of the","page_number":243,"box":{"x":117,"y":769,"width":744,"height":12}},{"id":"90b23c57-3ff6-4d43-b94b-48913b9b00a9","block_type":"box","text":"board to add value and be the voice of shareholders in board discussions.","page_number":243,"box":{"x":117,"y":785,"width":547,"height":9}},{"id":"265189b2-ddaa-4079-a7d7-f91e4bf3406c","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":243,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"c28332b6-2dbe-4151-af49-60f351166993","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":243,"box":{"x":117,"y":831,"width":659,"height":12}},{"id":"53dd374e-c069-40aa-807e-be409d9091aa","block_type":"box","text":"responsibilities to advise and oversee management. We note that in many markets, policymakers have","page_number":243,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"097ca8e1-eafd-4299-a4c3-7aec882dd42d","block_type":"box","text":"set board gender diversity goals which we may discuss with companies, particularly if there is a risk","page_number":243,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"c5358cea-7142-4dd9-bba3-cf4b7beb8c17","block_type":"box","text":"their board composition may be misaligned.","page_number":243,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"06c97ad3-cfd9-40f8-a19f-b6ef702d080b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":243,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"0aebacec-8fc4-4b1d-932e-644d1943bf01","block_type":"box","text":"Global Principles |","page_number":243,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"c08d7cec-52f0-4faa-bf64-5b61ab7ada60","block_type":"box","text":"7","page_number":243,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"d7dcb55b-60a2-41c4-9463-64bf57071802","block_type":"box","text":"NM1026U-6004408-243/267","page_number":243,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9dce324b-9e8c-4ef4-bdb1-2ae5f465c372","block_type":"box","text":"Auditors and audit-related issues","page_number":244,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"70ea6a9b-5d4f-4e18-aa85-14562702968e","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate","page_number":244,"box":{"x":117,"y":117,"width":725,"height":12}},{"id":"5a07c6fe-283c-4755-b426-81cc5bc10f1a","block_type":"box","text":"portrayal of a company’s financial condition. Accordingly, we look for the assumptions made by","page_number":244,"box":{"x":117,"y":133,"width":709,"height":12}},{"id":"1a0f97cd-d3ac-4b6f-b56c-94868f8881d1","block_type":"box","text":"management, and reviewed by the auditor in preparing the financial statements, to be reasonable and","page_number":244,"box":{"x":117,"y":148,"width":760,"height":12}},{"id":"b1c86a0f-6cea-48e2-9a97-7711afd14fe9","block_type":"box","text":"justified.","page_number":244,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"5f3aec4f-b828-4c8a-ae96-97a1b12489b3","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":244,"box":{"x":116,"y":194,"width":754,"height":12}},{"id":"d980897e-75d4-47f8-9756-25ad7a7ce6c0","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important","page_number":244,"box":{"x":117,"y":210,"width":746,"height":12}},{"id":"0966a2c5-53d9-4c79-8674-bcb8f1ca8b8c","block_type":"box","text":"role in a company’s financial reporting system by providing independent oversight of the accounts,","page_number":244,"box":{"x":117,"y":225,"width":733,"height":12}},{"id":"4535e647-47d9-451f-850b-0b5811993fe2","block_type":"box","text":"material financial, and, where appropriate to the jurisdiction, non-financial information and internal","page_number":244,"box":{"x":117,"y":241,"width":728,"height":12}},{"id":"7835862d-96f0-4d6d-b131-84cafccebccb","block_type":"box","text":"control frameworks. Moreover, in the absence of a dedicated risk committee, these committees can","page_number":244,"box":{"x":116,"y":256,"width":743,"height":11}},{"id":"f6dbf722-c36f-4f78-80b9-e717733262d7","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":244,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"bd3235ad-66a3-480f-ba4d-88503f7e74e5","block_type":"box","text":"7","page_number":244,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"88f3d86c-fff4-4f35-b40c-42abcd619f32","block_type":"box","text":"In our view, effective audit committee","page_number":244,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"93a6ffce-df12-440f-98cb-aa4fb4c240f5","block_type":"box","text":"oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":244,"box":{"x":116,"y":287,"width":745,"height":12}},{"id":"df0b9f4b-dac3-4d74-8086-359e27d2fea7","block_type":"box","text":"important level of reassurance to shareholders.","page_number":244,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"6cf71c68-1f16-42cc-97b8-5ef34ecbba22","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":244,"box":{"x":116,"y":333,"width":750,"height":12}},{"id":"aae28407-a366-4b0c-b0e3-1285303361be","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership","page_number":244,"box":{"x":117,"y":349,"width":765,"height":12}},{"id":"b2277e48-3da8-4b5b-b8d9-9b73813479ab","block_type":"box","text":"and introduce new perspectives. We recognize that audit committees will rely on management, internal","page_number":244,"box":{"x":116,"y":364,"width":769,"height":12}},{"id":"8576e4b3-6436-4d66-9cf0-1a92059a4892","block_type":"box","text":"audit, and the independent auditor to fulfill their responsibilities. However, we look to committee","page_number":244,"box":{"x":116,"y":380,"width":712,"height":12}},{"id":"cb943cf3-713e-49ba-8ffb-01a1a9413499","block_type":"box","text":"members to demonstrate they have relevant expertise to monitor and oversee the audit process and","page_number":244,"box":{"x":117,"y":395,"width":749,"height":12}},{"id":"f7ee7246-cf45-4cc5-b8d8-e788fc11ebe4","block_type":"box","text":"related activities.","page_number":244,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"0e50a520-ffa7-4602-861d-33e57bbf1673","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant","page_number":244,"box":{"x":116,"y":441,"width":753,"height":12}},{"id":"8d1f93ab-1faf-4077-b549-cf69c3c776e6","block_type":"box","text":"financial restatements, or ad hoc notifications of material financial weakness. In this respect, we look to","page_number":244,"box":{"x":116,"y":457,"width":770,"height":11}},{"id":"55571ded-596b-4991-ab48-441f1ad0d0c8","block_type":"box","text":"audit committees to provide timely disclosure on the remediation of key and critical audit matters","page_number":244,"box":{"x":116,"y":472,"width":720,"height":12}},{"id":"eed7422e-2187-45a9-b749-015923ddc0c5","block_type":"box","text":"identified either by the external auditor or internal audit function.","page_number":244,"box":{"x":117,"y":488,"width":478,"height":12}},{"id":"8a2a7f13-eb90-46d4-acb4-192be8e1ad93","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":244,"box":{"x":116,"y":518,"width":754,"height":12}},{"id":"6b82d3a5-c58b-4ca4-b368-6385cecaf5a4","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that","page_number":244,"box":{"x":116,"y":533,"width":755,"height":12}},{"id":"969d15f0-b8cb-46f1-935c-d24f5d6bc224","block_type":"box","text":"auditors are, and are seen to be, independent. Where an audit firm provides services to the company","page_number":244,"box":{"x":116,"y":549,"width":756,"height":12}},{"id":"86a40231-3980-4190-ac3c-b56ba3b5f4ed","block_type":"box","text":"in addition to the audit, we look for the fees","page_number":244,"box":{"x":117,"y":564,"width":323,"height":12}},{"id":"46e11068-6f54-44c2-b7d5-db431ecab959","block_type":"box","text":"earned to be disclosed and explained. We look for audit","page_number":244,"box":{"x":441,"y":564,"width":419,"height":12}},{"id":"a60719b3-9826-4482-8c90-e4876183031f","block_type":"box","text":"committees to have in place a procedure for assessing the independence of the auditor and the quality","page_number":244,"box":{"x":116,"y":580,"width":767,"height":12}},{"id":"ef0ab4c3-0ad2-4703-9fa4-25b2cfe9a4aa","block_type":"box","text":"of the external audit process on an annual basis.","page_number":244,"box":{"x":116,"y":595,"width":366,"height":12}},{"id":"21851b69-a45b-45b9-8df2-eb2716ffa610","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term","page_number":244,"box":{"x":117,"y":626,"width":719,"height":12}},{"id":"21dd6d4c-ece3-4a8f-b0c2-2f6ca5537896","block_type":"box","text":"operational risk management practices and, more broadly, the quality of the board’s oversight. We look","page_number":244,"box":{"x":116,"y":641,"width":770,"height":12}},{"id":"0ff2e331-20a1-4880-879e-29ce57889e96","block_type":"box","text":"to the audit or risk committee to periodically review the company’s risk assessment and risk","page_number":244,"box":{"x":116,"y":657,"width":684,"height":12}},{"id":"382e5558-4f72-4a49-b3c0-f79bc5fd5cb2","block_type":"box","text":"management policies and the significant risks and exposures identified by management, the internal","page_number":244,"box":{"x":117,"y":672,"width":741,"height":12}},{"id":"e98950c0-d379-4fab-87e8-396211e3fc3b","block_type":"box","text":"auditors or the independent auditors, and management’s steps to address them. In the absence of","page_number":244,"box":{"x":116,"y":688,"width":731,"height":12}},{"id":"d13b76aa-d2e1-4f31-ad28-6fb786e788b3","block_type":"box","text":"detailed disclosures, we may conclude that companies are not adequately managing risk.","page_number":244,"box":{"x":116,"y":703,"width":662,"height":12}},{"id":"e059414c-5865-4b10-af21-8f7f81491451","block_type":"box","text":"Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":244,"box":{"x":176,"y":741,"width":647,"height":12}},{"id":"9d10c11c-17bb-49ab-a34e-719ebffc3f2f","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment","page_number":244,"box":{"x":116,"y":771,"width":761,"height":13}},{"id":"be8c72cc-b9c1-4552-a210-41a88e578ea9","block_type":"box","text":"and the priority of their interest in the company relative to that of other equity or debt investors.","page_number":244,"box":{"x":116,"y":787,"width":700,"height":12}},{"id":"99882e1c-d107-4a6a-82b7-c2a1ef326ee7","block_type":"box","text":"Pre-emptive rights are a key protection for shareholders against the dilution of their interests.","page_number":244,"box":{"x":117,"y":802,"width":687,"height":13}},{"id":"d358fb87-e176-4d5f-a040-1194f7296e0e","block_type":"box","text":"7","page_number":244,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"38a19b8e-d893-4a73-a52a-9e719e137a91","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":244,"box":{"x":171,"y":828,"width":648,"height":9}},{"id":"5cd27b9c-17a7-4551-8cd4-7631a3957014","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the","page_number":244,"box":{"x":170,"y":840,"width":709,"height":10}},{"id":"511d1752-92eb-4b2b-b739-ae1963bdd443","block_type":"box","text":"entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of","page_number":244,"box":{"x":170,"y":853,"width":690,"height":10}},{"id":"bef3599e-52ca-4c31-92e3-231f97d23ffe","block_type":"box","text":"objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Enterprise","page_number":244,"box":{"x":170,"y":866,"width":710,"height":10}},{"id":"15b74c16-bdd9-4917-8e04-742bf1ab3be5","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":244,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"f701b056-0eb1-46da-8549-b46c30dee07b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":244,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"e61c540a-8284-4d92-b847-a4ee1223fb3f","block_type":"box","text":"Global Principles |","page_number":244,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"a02aadd9-5020-4f8e-a02d-c8ee379ee24c","block_type":"box","text":"8","page_number":244,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"8c76803d-0859-4df5-ac60-e04f3a2ea207","block_type":"box","text":"NM1026U-6004408-244/267","page_number":244,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"820fba39-4cad-45b8-96e7-6c7b4b30ee64","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure","page_number":245,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"2e78b228-48d9-4d88-8b87-0726336a733b","block_type":"box","text":"and differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce","page_number":245,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"654dbb71-abd4-4b32-ad0d-927f7a3c463d","block_type":"box","text":"the adoption of “one share, one vote” for registered shareholders.","page_number":245,"box":{"x":116,"y":118,"width":491,"height":12}},{"id":"09b24402-1fff-49a9-bbae-27a83c3e78e5","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a","page_number":245,"box":{"x":117,"y":149,"width":740,"height":13}},{"id":"20820900-6a1f-4716-a80e-5a4a8c52f6d9","block_type":"box","text":"valid reason for listing dual classes of shares with differentiated voting rights. In our view, such","page_number":245,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"c475fdaa-46a7-484a-aa28-a9852948c504","block_type":"box","text":"companies should review these share class structures on a regular basis or as company","page_number":245,"box":{"x":116,"y":181,"width":661,"height":12}},{"id":"19eb2e42-7508-4c5f-8687-d9bed7c9fba8","block_type":"box","text":"circumstances change. Additionally, they should seek shareholder approval of their capital structure on","page_number":245,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"d542f204-71f1-472d-b5a3-7d11789dd01c","block_type":"box","text":"a periodic basis via a management proposal at the company’s shareholder meeting. The proposal","page_number":245,"box":{"x":116,"y":212,"width":731,"height":12}},{"id":"67e57b57-3fc8-4dd5-8b9a-b2275e03faba","block_type":"box","text":"should give unaffiliated shareholders the opportunity to affirm the current structure or establish","page_number":245,"box":{"x":116,"y":227,"width":705,"height":12}},{"id":"eefa2fd6-7476-491e-a177-737ff42f0a84","block_type":"box","text":"mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs","page_number":245,"box":{"x":117,"y":243,"width":757,"height":12}},{"id":"33213ac9-b3a4-4ec7-95f7-374137e157f6","block_type":"box","text":"to shareholders.","page_number":245,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"716bc5d7-a2db-4ee4-9db8-4ea224396eff","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long","page_number":245,"box":{"x":117,"y":289,"width":745,"height":12}},{"id":"c0dcde08-d3f5-460b-88e8-2b1a81fea8b6","block_type":"box","text":"term financial interests of our clients as shareholders, and so we will review any proposed transaction","page_number":245,"box":{"x":116,"y":305,"width":758,"height":12}},{"id":"ce0985bd-cc7d-4f9f-a46c-edc077b9d839","block_type":"box","text":"with that objective in mind. Typically, we review factors such as whether the proposed transaction has","page_number":245,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"ec8a102d-ac43-4d4e-b2d1-742a6de23b49","block_type":"box","text":"the unanimous support of the board and has been negotiated at arm’s length, and whether the board","page_number":245,"box":{"x":116,"y":336,"width":753,"height":12}},{"id":"1b807a6c-ade9-4520-90d6-3e0bbb95538b","block_type":"box","text":"or management has clearly explained its economic and strategic rationale. We may also seek","page_number":245,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"aecc2624-267a-409e-91b5-619fe173c42a","block_type":"box","text":"reassurance from the board that the financial interests of executives and/or board members in a given","page_number":245,"box":{"x":117,"y":367,"width":761,"height":12}},{"id":"db36fe45-a526-4f65-8ade-261987658942","block_type":"box","text":"transaction have not adversely affected their ability to place shareholders’ interests before their own.","page_number":245,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"b9a7c418-8e93-4695-a2ca-315890e76ac7","block_type":"box","text":"Where the transaction involves related parties, the recommendation to support should come from the","page_number":245,"box":{"x":116,"y":398,"width":755,"height":12}},{"id":"82e25308-9595-4689-ad4a-fc06c751f3d0","block_type":"box","text":"independent directors, a best practice in most markets, and ideally, the terms should have been","page_number":245,"box":{"x":117,"y":414,"width":715,"height":11}},{"id":"75b9455c-88d5-46f7-9f2e-0886d811d1b2","block_type":"box","text":"assessed through an independent appraisal process. In addition, it is good practice that it be approved","page_number":245,"box":{"x":116,"y":429,"width":766,"height":12}},{"id":"a4f6e9ac-03e6-4848-933a-0b8f7cab57d6","block_type":"box","text":"by a separate vote of the non-conflicted parties.","page_number":245,"box":{"x":117,"y":444,"width":358,"height":12}},{"id":"f7c9497b-7514-4296-91f2-96eef7ccdffe","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company","page_number":245,"box":{"x":116,"y":476,"width":743,"height":12}},{"id":"bb62b9f7-53b3-42be-b43d-d44432be0098","block_type":"box","text":"shares in the open market without unnecessary restriction. In our view, corporate mechanisms","page_number":245,"box":{"x":116,"y":491,"width":705,"height":12}},{"id":"3b4917d1-257b-40c4-8f21-0a57426aa908","block_type":"box","text":"designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such","page_number":245,"box":{"x":116,"y":507,"width":738,"height":12}},{"id":"8ac3be8e-1e73-424e-9c7b-8370b4151671","block_type":"box","text":"mechanisms can serve to protect and entrench interests other than those of the shareholders. In our","page_number":245,"box":{"x":117,"y":522,"width":750,"height":12}},{"id":"7b29e635-1fa2-4616-aade-03f7309a5a73","block_type":"box","text":"view, shareholders are broadly capable of making decisions in their own best interests. We encourage","page_number":245,"box":{"x":116,"y":538,"width":764,"height":12}},{"id":"7e70455d-49c7-4d41-811b-a4ebb7db4be3","block_type":"box","text":"any shareholder rights plans proposed by a board to be subject to shareholder approval upon","page_number":245,"box":{"x":116,"y":553,"width":699,"height":12}},{"id":"2f092362-8759-4e25-89f6-b198add52722","block_type":"box","text":"introduction and periodically thereafter.","page_number":245,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"b7108fb1-e05c-496f-b2e1-ebcff4226030","block_type":"box","text":"Executive compensation and benefits","page_number":245,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"9af78a80-dc47-407e-9fe1-9d2a42a96116","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value","page_number":245,"box":{"x":117,"y":640,"width":749,"height":12}},{"id":"8c58e750-89aa-4d98-a2f5-0465c7b4e20f","block_type":"box","text":"creation. A well-structured compensation policy rewards the successful delivery of strategic,","page_number":245,"box":{"x":116,"y":655,"width":686,"height":12}},{"id":"00f5441b-1d51-4927-9223-16a19f7213b8","block_type":"box","text":"operational, and/or financial goals; encourages an appropriate risk appetite; and aligns the interests of","page_number":245,"box":{"x":116,"y":671,"width":759,"height":12}},{"id":"6a36368d-98b3-4350-902a-9dc8459678fc","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":245,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"a71566f9-578d-43ee-b329-2c8510197b95","block_type":"box","text":"8","page_number":245,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"9f4b5af9-4684-4b80-b1f3-d38a4b854974","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support","page_number":245,"box":{"x":116,"y":717,"width":746,"height":13}},{"id":"94717cc2-f73b-4821-9eed-1ca56823e6fe","block_type":"box","text":"sustained financial value creation for our clients as shareholders. We appreciate when performance","page_number":245,"box":{"x":116,"y":733,"width":739,"height":12}},{"id":"2eb1a50f-0dc3-4c7e-b060-1a663aa7d1f2","block_type":"box","text":"targets incorporate ambitious objectives, and the corresponding metrics are aligned with the","page_number":245,"box":{"x":116,"y":749,"width":682,"height":12}},{"id":"d710455e-bc02-4ec1-85f7-0f8682048de7","block_type":"box","text":"company’s strategy and business model. BIS does not have a position on whether companies choose","page_number":245,"box":{"x":116,"y":764,"width":755,"height":12}},{"id":"de1b4f2c-7602-49c4-a6c7-b47728fe39a5","block_type":"box","text":"to use sustainability-related criteria in compensation structures, but, where they are included, we look","page_number":245,"box":{"x":116,"y":780,"width":752,"height":12}},{"id":"96d49a83-bcc4-4236-9a0d-c1661d326996","block_type":"box","text":"to companies to be as rigorous as they would be in setting other financial or operational targets. We","page_number":245,"box":{"x":116,"y":795,"width":740,"height":12}},{"id":"36d8ec91-a82c-4568-a86a-e0f7b639c0f6","block_type":"box","text":"appreciate when long-term incentive plans encompass timeframes that: 1) are distinct from annual","page_number":245,"box":{"x":116,"y":810,"width":730,"height":13}},{"id":"faabdaa2-1c2f-4357-a3d8-486abd2b4c8f","block_type":"box","text":"executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":245,"box":{"x":116,"y":826,"width":724,"height":12}},{"id":"8da23f65-f955-4562-bd96-b3e2de6b252c","block_type":"box","text":"results over a period of years.","page_number":245,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"cfd8ee7e-fd44-415d-9812-abd4d72e9fa4","block_type":"box","text":"8","page_number":245,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"4de1d448-e067-4cda-b624-b4a169244f05","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":245,"box":{"x":170,"y":867,"width":664,"height":9}},{"id":"276a1b42-66b7-4be9-aa84-ee7d7a80105e","block_type":"box","text":"different markets.","page_number":245,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"163df657-0d59-45a3-b19b-0b728c251343","block_type":"box","text":"BlackRock Investment Stewardship","page_number":245,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"372b5037-82ad-4506-954c-b1407332f8c6","block_type":"box","text":"Global Principles |","page_number":245,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"56e15c71-f79f-46c7-8962-311b188416db","block_type":"box","text":"9","page_number":245,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"322a4e55-d8dc-440a-af89-437cd2d60594","block_type":"box","text":"NM1026U-6004408-245/267","page_number":245,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f5e616f1-5a64-4e7c-a365-87929c62f057","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":246,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"80c06813-9d28-4a31-8414-e096ad0b04df","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may","page_number":246,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"01e64180-9e3b-43c4-8213-1101ca1f4ff4","block_type":"box","text":"include the company’s risk profile, the environment it operates in, and the individuals the board is trying","page_number":246,"box":{"x":117,"y":118,"width":770,"height":12}},{"id":"b162fdcb-2b12-4fe6-a0eb-04395838937c","block_type":"box","text":"to attract and retain. We look to the compensation committees to guard against contractual","page_number":246,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"9b633cee-45ef-4adc-8e45-dd18d4869d9e","block_type":"box","text":"arrangements that would entitle executives to material compensation for early termination of their","page_number":246,"box":{"x":116,"y":149,"width":726,"height":12}},{"id":"e7b80f49-9686-4470-8689-b14a6aa1c4e7","block_type":"box","text":"employment. Finally, we look for pension contributions and other deferred compensation arrangements","page_number":246,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"ec09d2c9-db27-4a18-9698-13234c421ce7","block_type":"box","text":"to be reasonable in light of market practices or the company’s business and executive compensation","page_number":246,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"9e1d5f00-60d2-49bf-88ef-6e62298409bc","block_type":"box","text":"strategies.","page_number":246,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"473037ff-4cdf-4d4f-ae57-3382fee0db52","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance.","page_number":246,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"ced57e89-1081-45c1-811f-0bdbccde0400","block_type":"box","text":"Where discretion has been used by the compensation committee, or its equivalent, we appreciate","page_number":246,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"e783542a-9778-4994-9a5f-c29c0fa32e8a","block_type":"box","text":"disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned","page_number":246,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"77d9fc7b-6193-477e-8f72-2187704d58df","block_type":"box","text":"with the interests of shareholders. In addition, we acknowledge that the use of peer group evaluation","page_number":246,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"4b40d6e1-9e7b-4f17-8dc9-7679c8732dd6","block_type":"box","text":"by compensation committees can help ensure competitive pay. However, we encourage companies to","page_number":246,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"4869ffa7-272f-4086-9224-54c3a80ff731","block_type":"box","text":"clearly explain how compensation outcomes have rewarded performance rather than solely base","page_number":246,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"276608cd-fad4-4aab-afbb-8c4d77e152e0","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":246,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"ab7c7a6b-6d70-4961-ad94-bd6fd38d92d8","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such","page_number":246,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"90c382e9-6dba-4038-bb16-7df6b17d2459","block_type":"box","text":"provisions could require executives to forgo awards when compensation was based on faulty financial","page_number":246,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"c1eeeb3a-d519-4750-ab0a-7766922d7937","block_type":"box","text":"statements or deceptive business practices, or when their behavior caused material financial harm to","page_number":246,"box":{"x":116,"y":382,"width":754,"height":12}},{"id":"50406f72-668d-463e-9ebf-09bec4515e62","block_type":"box","text":"shareholders, material reputational risk to the company, or resulted in a criminal investigation.","page_number":246,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"f3f979d6-9b2e-4d8c-b242-12fc429b7114","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with","page_number":246,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"be1dd391-a181-4bff-aab9-6ec2b3f0a2b0","block_type":"box","text":"the time and effort expended in fulfilling their professional responsibilities. Additionally, these","page_number":246,"box":{"x":116,"y":444,"width":691,"height":12}},{"id":"2bbb87fc-5026-42bd-b037-b11c4dd3767c","block_type":"box","text":"compensation arrangements should not risk compromising directors’ independence or aligning their","page_number":246,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"5afe859b-49cf-4671-8290-b7566eb42c14","block_type":"box","text":"interests too closely with those of the management, whom they are charged with overseeing.","page_number":246,"box":{"x":117,"y":475,"width":693,"height":12}},{"id":"48038ced-d619-4dfb-8cef-0009019153d9","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether","page_number":246,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"eb5a98df-fcb2-49ee-97ce-f11c6831ef9a","block_type":"box","text":"the board’s approach to executive compensation is rigorous in light of the company’s stated long-term","page_number":246,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"08e0d378-ad51-4b51-b3f2-84e7d4cdef18","block_type":"box","text":"corporate strategy and specific circumstances, as well as local market and policy developments.","page_number":246,"box":{"x":116,"y":537,"width":719,"height":12}},{"id":"eb3f2003-eb61-4488-8497-d148e06a7058","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance,","page_number":246,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"e02b6a4b-97ce-4d09-a476-bef9af848bc9","block_type":"box","text":"BIS may not support management’s proposals to approve compensation, where they are on the","page_number":246,"box":{"x":117,"y":583,"width":715,"height":12}},{"id":"8feab38b-aa53-4644-86df-683dd84aadc9","block_type":"box","text":"agenda. We may also not support members of the compensation committee or equivalent board","page_number":246,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"71254acd-e1d1-4a85-82ad-7968bf25943b","block_type":"box","text":"members for poor compensation practices or structures.","page_number":246,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"023b1eb5-317d-4c55-965f-f61f73fdfe2b","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":246,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"93d8032f-6ff4-4f47-b34e-68598bb4304d","block_type":"box","text":"Corporate form","page_number":246,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"5d423a98-32e9-4be3-93ee-7304c7d630e7","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":246,"box":{"x":117,"y":715,"width":760,"height":12}},{"id":"c4900376-cde9-4389-8f41-fdeb7ebaf500","block_type":"box","text":"given the company’s purpose and business model.","page_number":246,"box":{"x":116,"y":731,"width":376,"height":12}},{"id":"5e41a595-4157-4d84-858f-bee20bf4aa8e","block_type":"box","text":"9","page_number":246,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"4344d2be-b32b-41be-b4b2-08235cc22ae5","block_type":"box","text":"We look to companies proposing to change their","page_number":246,"box":{"x":504,"y":731,"width":361,"height":12}},{"id":"43591ebb-e08c-411a-bf01-a81fa987e3fa","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":246,"box":{"x":116,"y":746,"width":726,"height":12}},{"id":"115be922-c188-431d-b5e2-456f50af8249","block_type":"box","text":"already required to do so under applicable law. We appreciate when supporting documentation from","page_number":246,"box":{"x":116,"y":761,"width":742,"height":13}},{"id":"be48e194-247e-4cca-82bc-9576ac3c049d","block_type":"box","text":"companies or shareholders proposing to alter the corporate form clearly explains how the interests of","page_number":246,"box":{"x":116,"y":777,"width":751,"height":12}},{"id":"fccf1664-2315-4e6b-a97b-61f112fa1ce6","block_type":"box","text":"shareholders and different stakeholders would be impacted as well as the accountability and voting","page_number":246,"box":{"x":116,"y":792,"width":735,"height":13}},{"id":"b2b0a171-c800-4e72-817d-dfa689001fd4","block_type":"box","text":"mechanisms that would be available to shareholders. We generally support management proposals if","page_number":246,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"2408f4e4-838d-4a36-8c62-04746411c230","block_type":"box","text":"our analysis indicates that shareholders’ financial interests are adequately protected. Corporate form","page_number":246,"box":{"x":116,"y":823,"width":746,"height":13}},{"id":"7d8ddbb2-24ae-4231-9358-086db49fa5ed","block_type":"box","text":"shareholder proposals are evaluated on a case-by-case basis.","page_number":246,"box":{"x":116,"y":839,"width":468,"height":12}},{"id":"9f6b7f54-d005-4541-b3d7-9eea41cae15b","block_type":"box","text":"9","page_number":246,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"89d558ad-3870-493e-8304-03edc09ccc70","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":246,"box":{"x":170,"y":880,"width":457,"height":9}},{"id":"eabef423-1a53-4bd9-a5f5-3857b9b8041e","block_type":"box","text":"BlackRock Investment Stewardship","page_number":246,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"340f7cee-450a-42bf-8c3c-75f9ac5cb7c9","block_type":"box","text":"Global Principles |","page_number":246,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"715ea0ba-8561-4855-ba97-98950208eb09","block_type":"box","text":"10","page_number":246,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"e38f95d6-669b-4a11-b514-ec169b1e039f","block_type":"box","text":"NM1026U-6004408-246/267","page_number":246,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"eb5804d2-44c1-4e49-86ac-2bfcbe34c57f","block_type":"box","text":"Shareholder proposals","page_number":247,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"844eebff-d02c-4003-b27c-d53ae9f45815","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":247,"box":{"x":117,"y":120,"width":717,"height":11}},{"id":"e261cc30-f538-4a0b-984d-e23decb32b32","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics,","page_number":247,"box":{"x":117,"y":135,"width":762,"height":12}},{"id":"1fc77bcc-2955-4790-b2a2-c6e49fb4ebae","block_type":"box","text":"including governance reforms, capital management, and changes in the management or disclosure of","page_number":247,"box":{"x":117,"y":150,"width":758,"height":12}},{"id":"a3c09006-88c1-448e-8c30-e1474a87d235","block_type":"box","text":"sustainability-related risks. These proposals have a varying degree of relevance for companies across","page_number":247,"box":{"x":116,"y":166,"width":763,"height":12}},{"id":"ba57c1cf-0377-4ea2-b6d9-1048d4dfcf46","block_type":"box","text":"sectors, locations, and business models.","page_number":247,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"b53bb3a2-03f6-4755-a879-36b6fc76ffdb","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus","page_number":247,"box":{"x":117,"y":214,"width":764,"height":12}},{"id":"33fcc674-a0b7-40cc-bd62-526f24eac6ac","block_type":"box","text":"on the proposal’s implications for long-term financial value creation for shareholders. Our analysis","page_number":247,"box":{"x":116,"y":229,"width":730,"height":12}},{"id":"555c796c-d34d-4eb3-942d-cdde0527df6b","block_type":"box","text":"considers whether a shareholder proposal addresses a material risk that may impact a company’s","page_number":247,"box":{"x":116,"y":245,"width":732,"height":12}},{"id":"c61309e2-ba3f-4ec1-bd0c-8d27564f6680","block_type":"box","text":"long-term financial performance. BIS may support shareholder proposals that request disclosures that","page_number":247,"box":{"x":117,"y":260,"width":760,"height":12}},{"id":"221d9b47-a1e6-4a5e-acb6-52dd899d2f7b","block_type":"box","text":"help us, as long-term investors on behalf of our clients, better understand the material risks and","page_number":247,"box":{"x":117,"y":276,"width":713,"height":12}},{"id":"0f40746b-7709-4a3a-a805-c931802b789d","block_type":"box","text":"opportunities companies face and how they are managing them, especially where this information is","page_number":247,"box":{"x":116,"y":291,"width":747,"height":12}},{"id":"d064a0c8-b178-499c-9063-eaca01c69516","block_type":"box","text":"additive given the company’s existing disclosures. We look for consistency between the specific","page_number":247,"box":{"x":116,"y":307,"width":715,"height":12}},{"id":"891673f3-6b96-497a-8d8c-513f8c3466be","block_type":"box","text":"request formally made in the proposal, the supporting documentation, and the proponents’ other","page_number":247,"box":{"x":117,"y":322,"width":717,"height":12}},{"id":"08417ecb-0282-4f8d-843e-2658d0e3afb1","block_type":"box","text":"communications on the issues. We also assess the company’s practices and disclosures and the costs","page_number":247,"box":{"x":116,"y":338,"width":769,"height":12}},{"id":"a7b7c9f9-df28-4622-80a5-cb5af7efb274","block_type":"box","text":"and benefits to the company of meeting the request made in the proposal. We take into consideration a","page_number":247,"box":{"x":116,"y":353,"width":772,"height":12}},{"id":"b959802a-9bbd-40db-b60f-16734fd91766","block_type":"box","text":"company’s governance practices and disclosures against those of their peers.","page_number":247,"box":{"x":116,"y":369,"width":583,"height":12}},{"id":"a8fddc31-ade0-432a-bc7b-2a76306797a3","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value","page_number":247,"box":{"x":117,"y":401,"width":767,"height":12}},{"id":"61a76ba2-f5e4-4a14-9e40-2d016e192932","block_type":"box","text":"or that seek to micromanage companies. We take into consideration the legal effect of the proposal, as","page_number":247,"box":{"x":116,"y":417,"width":769,"height":12}},{"id":"bef0f39b-2fc8-4eff-932a-74b97e9e26c1","block_type":"box","text":"shareholder proposals may be advisory or legally binding depending on the jurisdiction, while others","page_number":247,"box":{"x":116,"y":432,"width":747,"height":12}},{"id":"c4515f9c-2408-4501-bd91-63cbbf3694f1","block_type":"box","text":"may make requests that would be deemed illegal in a given jurisdiction.","page_number":247,"box":{"x":117,"y":448,"width":534,"height":12}},{"id":"57247569-d7a5-4e1a-9c5b-36ff64b85e6f","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization","page_number":247,"box":{"x":117,"y":480,"width":745,"height":12}},{"id":"a5de9fb3-3d7f-4058-9a7f-43cbc9137880","block_type":"box","text":"that has submitted or advised on the proposal. We recognize that some shareholder proposals bundle","page_number":247,"box":{"x":116,"y":496,"width":762,"height":12}},{"id":"3f8bedf2-de3c-4052-a589-32dd03ec13df","block_type":"box","text":"topics and/or specific requests. Further, the proponent’s supporting statement may refer to topics that","page_number":247,"box":{"x":116,"y":511,"width":758,"height":12}},{"id":"e9d92f7b-f4e0-4161-b0eb-3f73bdc0f9dc","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":247,"box":{"x":116,"y":527,"width":767,"height":12}},{"id":"e80951c8-9d24-4d5a-b4c4-311a17838699","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":247,"box":{"x":116,"y":542,"width":720,"height":12}},{"id":"23170c79-6836-41c0-9014-679a63c031d9","block_type":"box","text":"proposal, we are not necessarily endorsing every element of the proposal or the reasoning, objectives,","page_number":247,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"b2c24121-8935-4da1-bab6-5f9a72891c3c","block_type":"box","text":"or supporting statement of the proponent. We may support a proposal for different reasons than those","page_number":247,"box":{"x":116,"y":573,"width":762,"height":12}},{"id":"204e6c3d-8263-4088-987d-6a63a50b24c7","block_type":"box","text":"put forth by the proponent, when we believe that overall it may advance our clients’ long-term financial","page_number":247,"box":{"x":117,"y":589,"width":762,"height":12}},{"id":"20970d5e-9fda-4a9f-b605-09425926835c","block_type":"box","text":"interests.","page_number":247,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"e7866ea4-3507-41e8-af02-1c895ae8cce8","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that","page_number":247,"box":{"x":117,"y":637,"width":752,"height":12}},{"id":"b2bbc586-05f4-457a-b226-036c70bafe56","block_type":"box","text":"place restrictions and limitations on how BlackRock can interact with the companies in which we invest","page_number":247,"box":{"x":117,"y":652,"width":766,"height":12}},{"id":"81ae8e90-f3c4-45fd-a140-b8d32ebf5e09","block_type":"box","text":"on behalf of our clients. BlackRock does not nominate directors for board elections or submit","page_number":247,"box":{"x":116,"y":667,"width":687,"height":10}},{"id":"1a667369-528a-4677-bbc8-b8412ac09d57","block_type":"box","text":"shareholder proposals to companies. Non-compliance with these requirements could adversely affect","page_number":247,"box":{"x":116,"y":683,"width":752,"height":12}},{"id":"b3be91dc-d3ae-4767-be49-2e3ac404d026","block_type":"box","text":"BlackRock’s ability to serve its clients’ interests.","page_number":247,"box":{"x":117,"y":699,"width":352,"height":12}},{"id":"5eb118c5-210c-42e8-9890-2174fbebb2b7","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":247,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"50e2416e-e046-41eb-b8c2-6862dc324eb5","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks","page_number":247,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"763aa7be-1812-4b1d-b138-c48caedc3fa6","block_type":"box","text":"and opportunities, is an important component of having an effective governance framework that","page_number":247,"box":{"x":116,"y":787,"width":709,"height":12}},{"id":"26fba994-2a6d-4d4d-bab7-58afc60a91a4","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":247,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"e9450cba-65f9-4d92-97d5-f5c4c19d2d50","block_type":"box","text":"10","page_number":247,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"583a5b97-473a-4659-9de5-37349cb0c69b","block_type":"box","text":"10","page_number":247,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"8718d4be-8609-4591-b0bf-f5feb237bfd2","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":247,"box":{"x":171,"y":828,"width":691,"height":9}},{"id":"d0800d6f-fd0b-4108-94d8-9245caeb5468","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":247,"box":{"x":170,"y":841,"width":686,"height":9}},{"id":"3a08780e-0b0e-4cca-ae54-7f3f7d437958","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":247,"box":{"x":170,"y":854,"width":682,"height":9}},{"id":"e93475a4-ae1c-45d8-9dab-9f76be4707a6","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":247,"box":{"x":170,"y":867,"width":683,"height":9}},{"id":"fda0f249-ff15-4152-83d6-39196a5eda88","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":247,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"8057cc22-3d73-49fd-8fd2-69639701a74d","block_type":"box","text":"BlackRock Investment Stewardship","page_number":247,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"2e87cd85-f56a-4e10-b826-b13ef533f520","block_type":"box","text":"Global Principles |","page_number":247,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"0bdf5f60-b396-434d-b7ca-d9e25256fd64","block_type":"box","text":"11","page_number":247,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"674f7d39-e9de-4a77-8833-1cf0f5e11959","block_type":"box","text":"NM1026U-6004408-247/267","page_number":247,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d80e0677-f5e2-4ece-83ff-5003cb146a19","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate","page_number":248,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"20b4118e-34ec-43ed-913f-310fd80b28b0","block_type":"box","text":"companies’ strategy and business practices related to material sustainability-related risks and","page_number":248,"box":{"x":116,"y":103,"width":699,"height":12}},{"id":"5e345dc7-2988-41e5-9b5f-9aae09800d7b","block_type":"box","text":"opportunities. We find it helpful when companies’ disclosures demonstrate that they have a resilient","page_number":248,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"70b9aee7-49e9-43bc-82c2-798be9da515a","block_type":"box","text":"business model that integrates material sustainability-related risks and opportunities into their strategy,","page_number":248,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"279fca75-ac7a-4ad2-92bd-5cd7b2622d06","block_type":"box","text":"risk management, and metrics and targets, including industry-specific metrics.","page_number":248,"box":{"x":117,"y":149,"width":583,"height":12}},{"id":"09df3e8d-2c41-4b90-909e-f1be8d51dd13","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions.","page_number":248,"box":{"x":116,"y":177,"width":766,"height":12}},{"id":"5a92a244-f06f-42f0-8eee-c57cbd41c9b0","block_type":"box","text":"The International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one","page_number":248,"box":{"x":116,"y":193,"width":743,"height":12}},{"id":"37e491a3-9bf4-41dc-86f6-e7131d2b2b6d","block_type":"box","text":"such approach to standardization that we find useful in our analysis.","page_number":248,"box":{"x":116,"y":208,"width":503,"height":12}},{"id":"11b50a6c-b280-44c7-9e2a-f970f54beb6c","block_type":"box","text":"11","page_number":248,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"dad7426f-68f4-48a2-87ec-ba55be4f8fa1","block_type":"box","text":"However, we do not mandate","page_number":248,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"58d22733-5dc6-464d-a4af-f325e2733276","block_type":"box","text":"any specific disclosure framework companies should use, and recognize that companies may report","page_number":248,"box":{"x":116,"y":224,"width":747,"height":12}},{"id":"bf6c0ca1-cf66-47c9-892a-f8f50cfbe18a","block_type":"box","text":"using different standards, some of which may be required by regulation. In such cases, we ask that","page_number":248,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"1abd05cf-ba27-419e-8154-1f62b3614515","block_type":"box","text":"companies highlight the metrics that are industry- or company-specific.","page_number":248,"box":{"x":116,"y":255,"width":530,"height":12}},{"id":"ef17ed4c-8704-405f-b1f7-bf36170ac761","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not","page_number":248,"box":{"x":116,"y":283,"width":702,"height":12}},{"id":"16b6e212-11fb-4a42-8d3a-bd652161f1f7","block_type":"box","text":"prescribe timelines regarding when companies should make sustainability-related disclosures but","page_number":248,"box":{"x":117,"y":299,"width":725,"height":12}},{"id":"492b00af-1dab-49e1-af5e-6ffe204ac6d1","block_type":"box","text":"appreciate it when companies produce them sufficiently in advance of their shareholder meeting, to the","page_number":248,"box":{"x":116,"y":314,"width":770,"height":12}},{"id":"7c707f17-e41f-4405-9d6b-e3627572fd9c","block_type":"box","text":"best of their abilities, to provide investors with time to assess the data and make informed voting","page_number":248,"box":{"x":117,"y":330,"width":718,"height":12}},{"id":"0f6aa8fe-edb4-4c45-8032-9fc04f9e1bb0","block_type":"box","text":"decisions.","page_number":248,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"deaf2666-4557-430d-bc75-6788dc89737b","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to","page_number":248,"box":{"x":117,"y":374,"width":700,"height":12}},{"id":"cb3c7d51-0895-4b5e-aa4a-a163834e239c","block_type":"box","text":"companies on best practices and disclosures. While not a voting item, we find it helpful to our","page_number":248,"box":{"x":116,"y":389,"width":697,"height":12}},{"id":"7910da49-6b6c-491b-b43c-7449450bfb16","block_type":"box","text":"understanding of investment risk when companies disclose any relevant global sustainability-related","page_number":248,"box":{"x":117,"y":405,"width":746,"height":12}},{"id":"a7792b36-262d-464d-87bc-14093f68623f","block_type":"box","text":"standards adopted, the industry initiatives in which they participate, any peer group benchmarking","page_number":248,"box":{"x":116,"y":420,"width":731,"height":12}},{"id":"87d3211f-b4db-4911-8a1d-31c179eb2419","block_type":"box","text":"undertaken, and any assurance processes to help investors understand their approach to sustainable","page_number":248,"box":{"x":117,"y":436,"width":758,"height":12}},{"id":"05476454-b134-45b1-a870-46d89ee5fda5","block_type":"box","text":"and responsible business practices.","page_number":248,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"ac933252-ebdf-4e00-8589-6434ebcfc82a","block_type":"box","text":"Climate and nature-related risk","page_number":248,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"263ca85e-e91e-4fca-b24d-ae57a56c9f09","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term","page_number":248,"box":{"x":117,"y":508,"width":745,"height":12}},{"id":"bc93d6a4-5d1a-43e9-87af-349626a09b12","block_type":"box","text":"financial value to investors. For companies facing material climate-related risks, we find it helpful when","page_number":248,"box":{"x":116,"y":523,"width":766,"height":12}},{"id":"40de545f-f91f-423d-894d-fe09a335ba9b","block_type":"box","text":"they publicly disclose, consistent with their business model and sector, how they intend to deliver long","page_number":248,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"9e2560a1-54c2-45bb-bde3-1749fb119edd","block_type":"box","text":"term financial performance through the low-carbon transition, including where available, their transition","page_number":248,"box":{"x":116,"y":554,"width":766,"height":12}},{"id":"23b8bef3-c937-4aac-81ed-57eab024e072","block_type":"box","text":"plan.","page_number":248,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"65e1a390-6a85-4154-b803-5793c663b9b1","block_type":"box","text":"12, 13","page_number":248,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"f48759fa-9cb5-4d85-aaed-a4ac265a52cf","block_type":"box","text":"From company disclosures and engagement, we seek to understand the strategies","page_number":248,"box":{"x":182,"y":570,"width":626,"height":12}},{"id":"f60285e3-a6b7-404e-bcf3-743fee7302ca","block_type":"box","text":"companies have in place to manage material risks to, and opportunities for, their long-term business","page_number":248,"box":{"x":116,"y":585,"width":748,"height":12}},{"id":"da7f18fa-d58e-498d-abe7-19db9c5d55d7","block_type":"box","text":"model associated with a range of climate-related scenarios.","page_number":248,"box":{"x":117,"y":601,"width":446,"height":12}},{"id":"9ad18aa0-dc08-49ec-a36c-04f732696f9e","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate","page_number":248,"box":{"x":117,"y":629,"width":734,"height":12}},{"id":"d9657328-236a-46c1-9fcb-3e546e516584","block_type":"box","text":"large companies to disclose such climate-related financial information, while in other jurisdictions these","page_number":248,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"5af27e29-a688-44f1-88ed-c51b34650d73","block_type":"box","text":"disclosures are viewed as best practice in the market.","page_number":248,"box":{"x":116,"y":660,"width":398,"height":12}},{"id":"4acc430c-d3cd-4203-8580-85ee07f56df0","block_type":"box","text":"11","page_number":248,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"83c86021-7e68-425b-a834-ee21ad02728b","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":685,"width":666,"height":10}},{"id":"a9564782-dd3a-4215-bbf7-58daa804ab5b","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":698,"width":712,"height":10}},{"id":"4df26279-dbc0-4e69-966d-734d64f69f4c","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":711,"width":649,"height":10}},{"id":"a797657f-75e3-433a-a152-56a32dcc9d47","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":724,"width":674,"height":10}},{"id":"355f066e-abd7-49cb-9706-484585f9ae7a","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":248,"box":{"x":170,"y":737,"width":647,"height":10}},{"id":"2e6c254e-ca9c-4b0b-8812-28ca058b85b8","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":248,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"91784680-f9ea-441d-85f6-da96cf0db5d8","block_type":"box","text":"12","page_number":248,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"7c41e876-e45b-4ff0-870c-96485e309de9","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":248,"box":{"x":170,"y":763,"width":685,"height":10}},{"id":"d9cb22ec-20d9-4142-bc3f-ac6b35d07059","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":248,"box":{"x":170,"y":776,"width":670,"height":10}},{"id":"8972d617-5da2-4f46-9e4f-7645d4089c5f","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":248,"box":{"x":171,"y":789,"width":691,"height":9}},{"id":"74ccff45-3ab0-4312-b476-07350c6a0988","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives,","page_number":248,"box":{"x":170,"y":802,"width":710,"height":9}},{"id":"d5ce1522-9574-4089-9536-bc852162b9c1","block_type":"box","text":"and actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":248,"box":{"x":170,"y":815,"width":709,"height":9}},{"id":"ade3ded0-28df-4997-8f58-6b1d091dfbec","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":248,"box":{"x":170,"y":828,"width":710,"height":9}},{"id":"9ab95d0a-b9a6-447b-9f79-6ddff1645ed5","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":248,"box":{"x":170,"y":840,"width":684,"height":10}},{"id":"571644cf-df8c-4d06-8afe-5e74f9acd88b","block_type":"box","text":"engage companies that have chosen to publish a transition plan to understand their planned actions and resource","page_number":248,"box":{"x":170,"y":853,"width":675,"height":10}},{"id":"54b3fd79-aa97-4969-a7a6-49d24398318f","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":248,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"12a66863-6d9f-4bf9-b220-293e8f17cd6f","block_type":"box","text":"13","page_number":248,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"99398a3e-251a-4e58-a607-69063fb0be12","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December 2025.","page_number":248,"box":{"x":171,"y":879,"width":703,"height":10}},{"id":"02b78f23-08e3-451a-ae2e-a8e516e086c1","block_type":"box","text":"BlackRock Investment Stewardship","page_number":248,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7f08c7b8-54cf-43fc-a23c-8d7f02fe1366","block_type":"box","text":"Global Principles |","page_number":248,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"ba46cd86-2710-4fe4-a02e-835ff2b450bd","block_type":"box","text":"12","page_number":248,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"6a903c9a-24c0-4000-bf96-9173f9adc25f","block_type":"box","text":"NM1026U-6004408-248/267","page_number":248,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"234e5623-c46a-4fc0-9db2-ea1942519978","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company","page_number":249,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"408507b7-bf1a-4911-a0fc-f685ca0eb262","block_type":"box","text":"specific climate-related risks and opportunities, and informing investment decisions. Such disclosures","page_number":249,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"533185dd-1f64-4521-a28f-cbba7fc09d50","block_type":"box","text":"also provide investors with insights into how companies are managing the risks associated with a","page_number":249,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"6f50eb72-b7fc-4081-85ff-e0094d9fa24f","block_type":"box","text":"transition to a low-carbon economy by managing their own carbon emissions or emissions intensities","page_number":249,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"719e5236-11aa-415a-b35a-45109837649f","block_type":"box","text":"to the extent financially practicable.","page_number":249,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"3a38c1f6-534b-4606-9eec-11d236ed3f82","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-,","page_number":249,"box":{"x":116,"y":177,"width":723,"height":12}},{"id":"be26ba4f-627c-46d8-b5a5-db1d4697834a","block_type":"box","text":"medium- and long-term targets, ideally science-based where these are available for their sector, for","page_number":249,"box":{"x":117,"y":193,"width":742,"height":12}},{"id":"8b706f92-710a-4e2f-a594-8c5e9b79aac4","block_type":"box","text":"scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are","page_number":249,"box":{"x":116,"y":208,"width":760,"height":12}},{"id":"a49add75-71c3-483a-944f-369e292598f5","block_type":"box","text":"consistent with the long-term financial interests of their investors.","page_number":249,"box":{"x":116,"y":224,"width":486,"height":12}},{"id":"28d1dee9-df24-4dde-afba-d5e8769dfa42","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this","page_number":249,"box":{"x":116,"y":252,"width":766,"height":12}},{"id":"79cedeb9-3276-41e6-a7c0-fedf6813ce55","block_type":"box","text":"stage, we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity,","page_number":249,"box":{"x":116,"y":268,"width":749,"height":12}},{"id":"b9d92943-86ca-4b96-8546-fc5df71e76f4","block_type":"box","text":"regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We","page_number":249,"box":{"x":117,"y":283,"width":749,"height":12}},{"id":"612ff2ca-2ef7-439f-816c-87b6b529d415","block_type":"box","text":"welcome disclosures and commitments that companies choose to make regarding material scope 3","page_number":249,"box":{"x":116,"y":299,"width":744,"height":12}},{"id":"82dba785-fac5-4ac7-a6ed-9f8a8bfc1fdf","block_type":"box","text":"emissions and recognize that these are provided on a good-faith basis as methodology develops.","page_number":249,"box":{"x":116,"y":314,"width":728,"height":12}},{"id":"1f25da0b-d085-4108-9a8e-e391ab6f561e","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or","page_number":249,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"6a9746c2-1768-4178-a612-3d8483b82271","block_type":"box","text":"supply chains are materially reliant on natural capital, nature-related risks and opportunities may affect","page_number":249,"box":{"x":116,"y":358,"width":765,"height":12}},{"id":"179cafbf-6b5a-4e85-b589-2c489f25c31c","block_type":"box","text":"their ability to generate long-term financial returns.","page_number":249,"box":{"x":116,"y":374,"width":372,"height":12}},{"id":"72fccb87-e50b-4009-8877-5b8b0879977c","block_type":"box","text":"14","page_number":249,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"97f403ba-ea74-4f15-923d-8ecd6c796f4a","block_type":"box","text":"For these companies, we rely on disclosures to","page_number":249,"box":{"x":502,"y":374,"width":360,"height":12}},{"id":"ef90f8b5-0c05-4f04-8b39-13bd99ab110c","block_type":"box","text":"understand how their strategies consider nature-related impacts and dependencies and to assess how","page_number":249,"box":{"x":117,"y":389,"width":765,"height":12}},{"id":"83158be7-0745-4431-a248-ed159bffe6f5","block_type":"box","text":"the board oversees these risks.","page_number":249,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"228aba1d-0eb1-430c-a55b-1347ab05278f","block_type":"box","text":"15","page_number":249,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"2ee221ed-4b25-4959-b314-c84162962260","block_type":"box","text":"Companies’ impact on their workforce, supply chains, and communities","page_number":249,"box":{"x":117,"y":433,"width":579,"height":12}},{"id":"065ede16-133b-4bf6-99ce-1b5a70bad141","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term","page_number":249,"box":{"x":117,"y":461,"width":768,"height":12}},{"id":"37395bd3-e82e-4c54-91de-62a02b3a88e3","block_type":"box","text":"financial performance. For many companies, key stakeholders include employees, business supply","page_number":249,"box":{"x":116,"y":477,"width":741,"height":12}},{"id":"98472e81-6548-48ef-8173-e5f6b6bd76de","block_type":"box","text":"chains, clients and consumers, regulators, and the communities in which they operate.","page_number":249,"box":{"x":116,"y":493,"width":647,"height":11}},{"id":"9e5b5a1b-a208-4ff2-8ea2-7d05f06f2c09","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives","page_number":249,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"cc27f239-346a-499a-98c0-90de25f66434","block_type":"box","text":"are more likely to deliver durable, long-term financial performance. By contrast, we have found that","page_number":249,"box":{"x":116,"y":536,"width":739,"height":12}},{"id":"34f74abc-017d-4490-9010-b25e77c0cc6f","block_type":"box","text":"poor relationships may create adverse impacts that could expose companies to legal, regulatory,","page_number":249,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"223730b5-61dd-432e-bc5c-057b4aae77b0","block_type":"box","text":"operational, and reputational risks. This is particularly relevant to a company’s workforce, which is","page_number":249,"box":{"x":116,"y":567,"width":730,"height":12}},{"id":"d8223393-cd36-4762-82ee-abcc77dc6c8e","block_type":"box","text":"central to long-term financial value creation.","page_number":249,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"54ce221b-178b-4972-9f86-958f713939fb","block_type":"box","text":"16","page_number":249,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"873d6d4a-31e2-471c-8779-3bcb15870166","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how","page_number":249,"box":{"x":116,"y":611,"width":743,"height":12}},{"id":"7ce051a1-27b7-4060-b927-0a36e306da7e","block_type":"box","text":"they have identified their key stakeholders and considered their interests in business decision-making.","page_number":249,"box":{"x":116,"y":627,"width":763,"height":12}},{"id":"8653de35-f766-48b0-ad56-521c4791d859","block_type":"box","text":"In addition to understanding broader stakeholder relationships, BIS finds it helpful when companies","page_number":249,"box":{"x":117,"y":642,"width":740,"height":12}},{"id":"533f7824-0946-480f-9dbc-5edc27aa396d","block_type":"box","text":"discuss how they consider the needs of their workforce today, and the skills required for their future","page_number":249,"box":{"x":116,"y":658,"width":742,"height":12}},{"id":"8fb7ee84-405f-46cf-b6fc-e0ee3a7f59eb","block_type":"box","text":"business strategy. We are also interested in understanding how the board monitors and engages on","page_number":249,"box":{"x":117,"y":673,"width":741,"height":12}},{"id":"a0553be5-bc82-47e8-a67a-9c6778bc21a4","block_type":"box","text":"these matters, given it is well positioned to ensure that the approach taken by management is informed","page_number":249,"box":{"x":116,"y":689,"width":764,"height":12}},{"id":"255dba9a-543b-48b4-b949-f9068b209c64","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":249,"box":{"x":117,"y":704,"width":765,"height":12}},{"id":"bd3ea31c-4c15-4ae2-9e7a-e4ae44b62109","block_type":"box","text":"are the responsibility of management and the board.","page_number":249,"box":{"x":116,"y":720,"width":387,"height":12}},{"id":"4ef42f05-5782-4d35-aa7a-b95f45b8b9fb","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse","page_number":249,"box":{"x":117,"y":748,"width":749,"height":12}},{"id":"784f8dd6-1de8-4e21-95af-e428ed965b8c","block_type":"box","text":"impacts that could arise from their business practices and affect critical relationships with their","page_number":249,"box":{"x":117,"y":763,"width":697,"height":12}},{"id":"95c2968e-4b48-401a-9a82-4d627e98b54e","block_type":"box","text":"14","page_number":249,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"60e84d03-a021-4b2e-8b68-c821c9566854","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December 2025.","page_number":249,"box":{"x":171,"y":789,"width":697,"height":9}},{"id":"dce58d9b-668f-4757-bffe-8978f556eb56","block_type":"box","text":"15","page_number":249,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"a6fdaf73-1e54-49b2-a69f-d3e7684ac1dd","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":249,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"26c13bc4-6dea-4a51-b2be-713711b76ae5","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of the","page_number":249,"box":{"x":170,"y":814,"width":704,"height":10}},{"id":"17a7e30f-dcdc-443f-b910-817705e007fe","block_type":"box","text":"Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":249,"box":{"x":170,"y":827,"width":689,"height":10}},{"id":"5547f282-5974-4350-ac31-834b4481f310","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":249,"box":{"x":170,"y":840,"width":680,"height":10}},{"id":"cf08b5a7-72df-435f-bfcc-cb3880ecf48e","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":249,"box":{"x":170,"y":853,"width":680,"height":10}},{"id":"43c388e5-c247-491b-b8c8-2f7fefdd236c","block_type":"box","text":"16","page_number":249,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"ebc363a2-b712-4f5c-863e-21ae5956dd60","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":249,"box":{"x":171,"y":866,"width":677,"height":10}},{"id":"ad9249f6-63c0-4213-8439-0a9b7560fb07","block_type":"box","text":"December 2025.","page_number":249,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"821237aa-0c77-419d-b802-79ae2d91b126","block_type":"box","text":"BlackRock Investment Stewardship","page_number":249,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"81985aa9-2d34-45ad-af46-614f14cbff38","block_type":"box","text":"Global Principles |","page_number":249,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"9b019888-75ad-455c-b311-6768bb33a9c3","block_type":"box","text":"13","page_number":249,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"80d51dda-4793-446b-b41a-e968f64311c7","block_type":"box","text":"NM1026U-6004408-249/267","page_number":249,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e695c878-2b7b-4256-9088-d49b26dfd294","block_type":"box","text":"stakeholders. We encourage companies to implement, to the extent appropriate, monitoring processes","page_number":250,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"c7acd070-84e4-461f-97fc-33ec3ad69e85","block_type":"box","text":"(often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance","page_number":250,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"701d3f2d-5d6b-4d78-b610-24caa0b1746f","block_type":"box","text":"mechanisms to remediate any actual adverse material impacts.","page_number":250,"box":{"x":117,"y":118,"width":474,"height":12}},{"id":"55198d77-09b7-449d-8c97-6f03873d5350","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key","page_number":250,"box":{"x":116,"y":148,"width":729,"height":12}},{"id":"19fa419a-01e2-4202-bfee-467c528585fc","block_type":"box","text":"stakeholders and may convey concerns about board oversight in our voting on director elections or","page_number":250,"box":{"x":116,"y":164,"width":739,"height":12}},{"id":"2785e9ba-1505-4da3-81d6-e2992391f4e3","block_type":"box","text":"supporting a business relevant shareholder proposal when, in our assessment, the board is not acting","page_number":250,"box":{"x":116,"y":179,"width":761,"height":12}},{"id":"dc65dc27-45f8-44b1-ad40-e030fb0f6e00","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":250,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"ce59c82f-8bbf-47ed-9658-13ee7f87946b","block_type":"box","text":"BlackRock’s oversight of its investment stewardship activities","page_number":250,"box":{"x":251,"y":232,"width":503,"height":12}},{"id":"941b44d0-0f1f-4429-b51e-58905844d228","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on","page_number":250,"box":{"x":117,"y":262,"width":742,"height":12}},{"id":"ffcb2819-d33a-44eb-b83c-02defb7ab8fa","block_type":"box","text":"behalf of clients at the global and regional level.","page_number":250,"box":{"x":117,"y":278,"width":358,"height":12}},{"id":"3abc28fe-c51a-4072-a1c0-1dc33dbe58c7","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the","page_number":250,"box":{"x":116,"y":308,"width":699,"height":12}},{"id":"95565b1f-b02c-4947-a265-5439eed38f2f","block_type":"box","text":"Committee) supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to","page_number":250,"box":{"x":117,"y":324,"width":760,"height":12}},{"id":"299c39ad-7c53-4c2d-843f-a8baf328e3b8","block_type":"box","text":"policies and procedures as well as market-level stewardship requirements. The Committee reviews","page_number":250,"box":{"x":117,"y":339,"width":740,"height":12}},{"id":"e661e288-d580-454a-b46f-a9aef0c423f9","block_type":"box","text":"and approves amendments to the Global Principles and regional voting guidelines. The Committee","page_number":250,"box":{"x":116,"y":355,"width":738,"height":12}},{"id":"ca7620bd-0fd3-4322-a75f-94d1650d391a","block_type":"box","text":"also reviews periodic reports regarding the votes cast by BIS on behalf of clients, as well as updates","page_number":250,"box":{"x":116,"y":370,"width":749,"height":12}},{"id":"3335cc51-3ea9-49f9-8ea2-c98f573cedda","block_type":"box","text":"on material process issues, procedural changes, and other risk oversight considerations. The","page_number":250,"box":{"x":116,"y":386,"width":697,"height":12}},{"id":"26eee6f8-a5f4-4598-b60e-ea333e425a17","block_type":"box","text":"Committee is chaired by the Global Heads of the Investment Stewardship function and its members","page_number":250,"box":{"x":117,"y":401,"width":743,"height":12}},{"id":"464ada6d-15fb-4e1c-b67e-c86dea8eb413","block_type":"box","text":"include senior BlackRock executives with legal, risk, and other experience relevant to team oversight","page_number":250,"box":{"x":117,"y":417,"width":752,"height":12}},{"id":"49054678-d507-4bc5-878b-3b244cb7a2bd","block_type":"box","text":"who are independent from the investment stewardship function.","page_number":250,"box":{"x":116,"y":432,"width":477,"height":12}},{"id":"e5a6bb57-1459-4aba-b614-5e755c66a3ea","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with","page_number":250,"box":{"x":116,"y":462,"width":769,"height":12}},{"id":"02f88c73-1f2c-45d4-bfa8-e201810f9daa","block_type":"box","text":"the Global Principles and regional voting guidelines. At the regional level, three regional Heads for the","page_number":250,"box":{"x":116,"y":478,"width":761,"height":12}},{"id":"3d2f3fd1-1d45-437c-a1e4-c505fd6eba97","block_type":"box","text":"Americas, APAC, and EMEA oversee BIS’ activities for their specific markets.","page_number":250,"box":{"x":116,"y":493,"width":581,"height":12}},{"id":"21593755-c301-43f3-8dd3-052633fff316","block_type":"box","text":"Vote execution","page_number":250,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"d747901c-d806-46a1-994c-dce6d783d2ae","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We","page_number":250,"box":{"x":117,"y":554,"width":739,"height":12}},{"id":"839eb5e9-30dc-4b4a-829a-2f9fe5abe186","block_type":"box","text":"have processes in place to consider all proxies for which we have voting authority, and submit voting","page_number":250,"box":{"x":117,"y":569,"width":751,"height":12}},{"id":"f6ac12c0-28cc-42f7-ba05-131209ff26d7","block_type":"box","text":"decisions, or refrain from voting when logistical issues arise (see below). The BIS Benchmark","page_number":250,"box":{"x":116,"y":585,"width":698,"height":12}},{"id":"2c8ef01d-3162-46eb-98d3-202d2901d6e2","block_type":"box","text":"Policies – and the vote decisions made consistent with those policies – reflect our reasonable and","page_number":250,"box":{"x":117,"y":600,"width":730,"height":12}},{"id":"31462ff5-3ba0-4c48-9f64-6486c2fa3822","block_type":"box","text":"independent judgment and are made without regard to the relationship between the issuer of the proxy","page_number":250,"box":{"x":117,"y":616,"width":766,"height":12}},{"id":"86f8859a-62f8-4d2b-9833-08e49c611c12","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and the Fund, the Fund’s affiliates (if any),","page_number":250,"box":{"x":117,"y":631,"width":739,"height":12}},{"id":"d1a77428-e33b-4963-b354-944b68845e86","block_type":"box","text":"BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts management policies and","page_number":250,"box":{"x":117,"y":647,"width":768,"height":12}},{"id":"a38943ff-c41c-4025-8bf3-7a8a766a007f","block_type":"box","text":"procedures,” below).","page_number":250,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"a774f175-6adb-4fb6-b2ea-3ebfc08a9eff","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well","page_number":250,"box":{"x":117,"y":692,"width":743,"height":12}},{"id":"16a48d33-531b-4e33-8845-cfed0a21333e","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":250,"box":{"x":116,"y":708,"width":754,"height":12}},{"id":"ae839b7f-57d5-452e-8f01-9441df7afc7b","block_type":"box","text":"1) untimely notice of shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3)","page_number":250,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"6713e5f5-b0ce-402c-9996-9bdb5e32d351","block_type":"box","text":"requirements to vote proxies in person; 4) “share-blocking” (requirements that investors who exercise","page_number":250,"box":{"x":117,"y":739,"width":751,"height":12}},{"id":"afa79148-b01e-4839-96b8-0ee1eaa746e2","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":250,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"8077a26f-05f2-44d5-a7a2-7526c7aff48b","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); 5) potential difficulties in","page_number":250,"box":{"x":116,"y":770,"width":695,"height":12}},{"id":"377b4425-2802-43d0-8526-89e88bce99e7","block_type":"box","text":"translating the proxy; 6) regulatory constraints; and 7) requirements to provide local agents with","page_number":250,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"f3ed8515-3226-4fc9-a96b-e02cca64d79f","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":250,"box":{"x":117,"y":801,"width":701,"height":12}},{"id":"b05d1405-79e4-4945-b1b3-3813ef859c86","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":250,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"44a2cff1-d7a3-4ec0-9075-6731837d8ce9","block_type":"box","text":"BIS votes proxies in these situations on a “best-efforts” basis. 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Our clients have greater control over proxy voting because of Voting","page_number":252,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"480aa003-9b36-4923-ab9f-1b1974695b61","block_type":"box","text":"Choice.","page_number":252,"box":{"x":117,"y":351,"width":54,"height":9}},{"id":"e2f41819-4989-4a6c-9323-7b2d629593f9","block_type":"box","text":"21","page_number":252,"box":{"x":173,"y":351,"width":10,"height":6}},{"id":"fe9861b0-65fd-4460-b63f-b82dc3576c6a","block_type":"box","text":"Reporting and vote transparency","page_number":252,"box":{"x":369,"y":389,"width":267,"height":12}},{"id":"f50f2bc8-836f-4eed-a74d-70a2886b803f","block_type":"box","text":"We are committed to transparency of the stewardship work we do on behalf of clients. 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Under the Guidelines, the dedicated team makes decisions on how to","page_number":258,"box":{"x":184,"y":552,"width":644,"height":12}},{"id":"7d8bab63-b481-4f64-948b-2313162e2c0e","block_type":"box","text":"engage companies and vote proxies independently, based on its professional judgment of the","page_number":258,"box":{"x":184,"y":568,"width":700,"height":12}},{"id":"8a29abdd-ec4c-42d7-86d6-7f81856725b8","block_type":"box","text":"priorities and outcomes most aligned with participating clients’ investment objectives.","page_number":258,"box":{"x":184,"y":583,"width":634,"height":12}},{"id":"86a28a9d-6334-44f7-85cc-f55a9765883e","block_type":"box","text":"Voting approach under the Guidelines","page_number":258,"box":{"x":341,"y":622,"width":304,"height":12}},{"id":"4370fec9-7c4b-4423-a22d-b8bf50cb482b","block_type":"box","text":"12","page_number":258,"box":{"x":647,"y":622,"width":11,"height":6}},{"id":"3a8cb592-f977-485e-b602-52db219a15c7","block_type":"box","text":"When evaluating each voting item across management or shareholder proposals, the dedicated team","page_number":258,"box":{"x":116,"y":653,"width":758,"height":12}},{"id":"642ca2c9-7f9b-4c52-b900-305ce2a1e0b1","block_type":"box","text":"applies a case-by-case approach that reflects the uneven pace of the low-carbon transition across","page_number":258,"box":{"x":116,"y":668,"width":728,"height":12}},{"id":"bb03adb2-1a50-49f8-8038-9f47b89e8c42","block_type":"box","text":"sectors and markets, and acknowledges the distinction between what company management can","page_number":258,"box":{"x":116,"y":684,"width":723,"height":12}},{"id":"f5d378c5-5b59-4b1b-841a-221bb6df29cb","block_type":"box","text":"influence and what lies beyond its control. 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In addition, certain disclosures related to a company’s plans for adapting their business","page_number":259,"box":{"x":170,"y":531,"width":686,"height":9}},{"id":"de6b188b-b380-45e0-8f1c-6a08525b8a2f","block_type":"box","text":"models through the low-carbon transition may require forward-looking statements.","page_number":259,"box":{"x":170,"y":544,"width":485,"height":9}},{"id":"eace6cff-2338-468e-8dcc-8bea78534ba2","block_type":"box","text":"14","page_number":259,"box":{"x":144,"y":557,"width":8,"height":4}},{"id":"ffde1044-2ac9-4736-a6e6-c0307df40bec","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":259,"box":{"x":170,"y":556,"width":666,"height":10}},{"id":"29066be3-4612-4492-bb72-b0ae2d3d86de","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":259,"box":{"x":171,"y":569,"width":712,"height":10}},{"id":"365bdff6-29fa-414a-81bd-7a71e0748533","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":259,"box":{"x":170,"y":582,"width":649,"height":10}},{"id":"53d752d7-8613-4917-96a8-1f1aeb25b6ac","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":259,"box":{"x":170,"y":595,"width":674,"height":10}},{"id":"2dbd1b8a-35b8-46f6-9a7a-b55c409104a5","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":259,"box":{"x":170,"y":608,"width":647,"height":10}},{"id":"76903aaf-8b03-43b8-9fc4-8a891827def8","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":259,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"6db9008e-59be-4b7b-bcb9-abf92e2ac20c","block_type":"box","text":"15","page_number":259,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"fa5e5031-9c14-477a-9c69-85dac1118b4c","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":259,"box":{"x":170,"y":634,"width":694,"height":10}},{"id":"3a4b9682-8a11-4e8f-bb5c-1dbd5b5354ed","block_type":"box","text":"so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":259,"box":{"x":170,"y":647,"width":651,"height":10}},{"id":"835308a9-3ac8-45b5-b7d9-569560059b5f","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":259,"box":{"x":170,"y":660,"width":698,"height":9}},{"id":"d74e5609-2532-455b-a4da-3cb1095b3ebc","block_type":"box","text":"that companies highlight the metrics that are industry- or company-specific. We also recognize that companies may be","page_number":259,"box":{"x":170,"y":673,"width":703,"height":9}},{"id":"8e8fc05d-9078-48c4-bdc6-40a6283898d1","block_type":"box","text":"phasing in reporting over several years. We do not prescribe timelines regarding when companies should make","page_number":259,"box":{"x":170,"y":686,"width":661,"height":9}},{"id":"c40836fc-ba52-441f-81d7-ea412b7b1f7c","block_type":"box","text":"sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of their","page_number":259,"box":{"x":170,"y":699,"width":664,"height":9}},{"id":"f8306006-037a-42d3-b568-7d58fbc588c6","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":259,"box":{"x":170,"y":711,"width":698,"height":10}},{"id":"0c24864f-0681-4307-ba75-c19b9477e7ef","block_type":"box","text":"voting decisions.","page_number":259,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"c5198879-7e32-4bee-8a45-c9b0f94bb703","block_type":"box","text":"16","page_number":259,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"276ae2c3-a250-43a3-9543-5b300734b054","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":259,"box":{"x":171,"y":737,"width":685,"height":10}},{"id":"2275dbe5-3f18-42ae-842c-f60a8ce06741","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in December","page_number":259,"box":{"x":170,"y":750,"width":708,"height":10}},{"id":"017d7139-3dec-4e1f-a98e-cf1f5d40c7ea","block_type":"box","text":"2025.","page_number":259,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"cfb6cdba-8c7c-439d-ba68-e4fe0217042b","block_type":"box","text":"17","page_number":259,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"37d1842d-c02f-43f7-bf9b-3efcf637df3c","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":259,"box":{"x":171,"y":776,"width":680,"height":10}},{"id":"a41d88f2-7f60-49ad-8480-e597871ff5e7","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":259,"box":{"x":171,"y":789,"width":706,"height":10}},{"id":"39e129bf-1dc0-4242-9afe-c89f1b6ed35c","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":259,"box":{"x":170,"y":802,"width":677,"height":10}},{"id":"43aa065e-399f-4a89-b7b9-3b0d180b3c0b","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":259,"box":{"x":170,"y":815,"width":650,"height":10}},{"id":"07c413d5-19de-4b62-a854-5fd641040810","block_type":"box","text":"18","page_number":259,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"e8042fbe-3cca-4339-8c8e-b20d440e7a6c","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":259,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"6f0705f3-1892-4405-8d62-a3ce3baf7d23","block_type":"box","text":"companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":259,"box":{"x":170,"y":841,"width":645,"height":9}},{"id":"58d58b9d-9b5d-4451-9782-49b13b4d185f","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":259,"box":{"x":170,"y":854,"width":686,"height":9}},{"id":"f265a92a-a916-4744-8e4b-0ad4aa41569a","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":259,"box":{"x":170,"y":867,"width":663,"height":9}},{"id":"9a9b3a13-efb6-4115-86aa-c81a3c2de439","block_type":"box","text":"material to their business models.","page_number":259,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"05ee3990-2f19-4d19-a070-4e5055ebb18d","block_type":"box","text":"BlackRock Investment Stewardship","page_number":259,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"5c738d7c-c6e9-4870-960c-4d4f223b706d","block_type":"box","text":"Climate and Decarbonization St","page_number":259,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"3e91cedd-59b0-449e-87b1-bc2035668458","block_type":"box","text":"ewardship Guidelines |","page_number":259,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"513e68ca-1522-4baf-86c0-6a173f0b758d","block_type":"box","text":"6","page_number":259,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"df7ccf49-42e2-49bf-ae3a-f0940a4b1c84","block_type":"box","text":"NM1026U-6004408-259/267","page_number":259,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b8f43f8d-38bd-43d4-adb8-d97cbc73e78a","block_type":"box","text":"However, the team recognizes that companies have varying ability to influence the emissions","page_number":260,"box":{"x":184,"y":87,"width":696,"height":12}},{"id":"744bc13c-74f3-441c-8d61-d7ec9d2b4732","block_type":"box","text":"across the different parts of their value chain and, therefore, it is helpful when disclosures","page_number":260,"box":{"x":184,"y":102,"width":667,"height":12}},{"id":"9210ae05-624e-4a6f-abde-0121c34c0bf4","block_type":"box","text":"explain the implications for the achievement of their decarbonization targets. For some","page_number":260,"box":{"x":184,"y":118,"width":647,"height":12}},{"id":"eae587c3-1a29-426b-be7d-2c7ba67a2911","block_type":"box","text":"companies that play an important role in the low-carbon transition, scope 3 may represent","page_number":260,"box":{"x":184,"y":134,"width":671,"height":12}},{"id":"af089809-83ae-4cec-a41c-7c24f0f0a7c2","block_type":"box","text":"their only significant source of GHG emissions in the value chain. While we do not believe","page_number":260,"box":{"x":183,"y":149,"width":672,"height":12}},{"id":"70c1adf3-c39a-4e27-afb8-15920ec78605","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control,","page_number":260,"box":{"x":184,"y":165,"width":693,"height":12}},{"id":"f35ac89c-2cac-4527-bcd9-79002f57121a","block_type":"box","text":"where relevant, we look for disclosures on how the company approaches the low-carbon","page_number":260,"box":{"x":183,"y":180,"width":662,"height":12}},{"id":"81009305-699d-4a82-95b4-2a7e1a8a48dc","block_type":"box","text":"transition in these cases. This may include plans and targets to grow businesses that","page_number":260,"box":{"x":183,"y":196,"width":636,"height":12}},{"id":"666bfeb3-91f1-4b75-8302-76f7d2254b56","block_type":"box","text":"contribute to real world decarbonization, forward-looking capital or procurement allocation","page_number":260,"box":{"x":184,"y":211,"width":670,"height":12}},{"id":"048798ae-d103-4e4c-a653-0a89d97bce9c","block_type":"box","text":"plans to net-zero aligned activities or suppliers, and strategies to mitigate material transition","page_number":260,"box":{"x":184,"y":227,"width":684,"height":12}},{"id":"0d787acb-7a69-4f42-9ebc-78f8a77b90e4","block_type":"box","text":"risks.","page_number":260,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"f2bae126-8041-48d7-a7d0-c41d1059f404","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical","page_number":260,"box":{"x":150,"y":265,"width":729,"height":12}},{"id":"1835b07c-8dfb-4bf1-bc6e-4684a0ef7b2f","block_type":"box","text":"risks – such as acute risks from extreme weather events or chronic risks from long-term shifts","page_number":260,"box":{"x":184,"y":280,"width":699,"height":13}},{"id":"79d9940f-01fd-4587-88ac-1515ffcfe6de","block_type":"box","text":"in climate patterns – and how these risks could reasonably be expected to affect the","page_number":260,"box":{"x":184,"y":296,"width":629,"height":12}},{"id":"85182845-a0cf-46da-bf76-e2960601e509","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":260,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"7e380314-136d-4308-88f0-f71538959206","block_type":"box","text":"Transition plans","page_number":260,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"be36a348-12a4-4406-95a6-d054d0e081b0","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their","page_number":260,"box":{"x":150,"y":372,"width":698,"height":12}},{"id":"1cada444-6d0e-461f-aa01-759350ae5bfe","block_type":"box","text":"low-carbon transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s","page_number":260,"box":{"x":150,"y":387,"width":701,"height":12}},{"id":"d6e503cc-cf25-4be3-a1c8-50077ded3cd8","block_type":"box","text":"targets, actions or resources for its transition towards a lower-carbon economy, including actions","page_number":260,"box":{"x":150,"y":403,"width":722,"height":12}},{"id":"63194f8f-3824-482d-9478-cb5ded28ad69","block_type":"box","text":"such as reducing its greenhouse gas emissions” (see Appendix 1).","page_number":260,"box":{"x":150,"y":418,"width":494,"height":12}},{"id":"c5b6b85a-ddd2-4638-b26e-9c56265338fc","block_type":"box","text":"19","page_number":260,"box":{"x":646,"y":419,"width":11,"height":6}},{"id":"5b951385-d06d-4bf5-9c83-fa6f101f9242","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a","page_number":260,"box":{"x":150,"y":441,"width":685,"height":12}},{"id":"a57afca1-6d08-42da-ba40-e615c4918713","block_type":"box","text":"market to corporate transition plans.","page_number":260,"box":{"x":150,"y":457,"width":267,"height":12}},{"id":"12b5d0b8-1547-4ef5-8cd1-315d6f07c3c6","block_type":"box","text":"20","page_number":260,"box":{"x":418,"y":457,"width":12,"height":6}},{"id":"7246c99c-3adb-4fbe-b10d-c7e772677a49","block_type":"box","text":"Recent guidance from the ISSB on disclosures about","page_number":260,"box":{"x":430,"y":457,"width":404,"height":12}},{"id":"003ebf9b-77ca-48f3-ac47-e15c21cd4079","block_type":"box","text":"transition plans highlights the convergence of reporting approaches.","page_number":260,"box":{"x":150,"y":472,"width":509,"height":12}},{"id":"8cb229bb-4a13-45f2-a8bc-e6ac412145c9","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these","page_number":260,"box":{"x":150,"y":495,"width":697,"height":12}},{"id":"9ce0bbaa-df9a-4ff8-bdf4-7b1f954b0506","block_type":"box","text":"disclosures typically provide valuable insights that inform the dedicated team’s approach to","page_number":260,"box":{"x":150,"y":511,"width":679,"height":12}},{"id":"523bab26-000a-4618-aaef-83141fac9090","block_type":"box","text":"engaging and voting on matters related to climate and transition risks on behalf of in-scope funds","page_number":260,"box":{"x":150,"y":526,"width":725,"height":12}},{"id":"60057e5d-1000-4206-b895-35400e0cfa1b","block_type":"box","text":"and accounts.","page_number":260,"box":{"x":150,"y":542,"width":109,"height":9}},{"id":"819a88c6-3988-4b52-9bdf-1bbfb3b48938","block_type":"box","text":"Boards and directors","page_number":260,"box":{"x":116,"y":572,"width":174,"height":9}},{"id":"dbd8f30e-6ba6-4407-9ec2-fadf3d45c24e","block_type":"box","text":"An effective and well-functioning board that has appropriate governance structures to facilitate","page_number":260,"box":{"x":116,"y":602,"width":704,"height":12}},{"id":"72ff836b-c6c6-466c-8de9-b3a8cc3923f1","block_type":"box","text":"oversight of a company’s management and strategic initiatives is critical to the company’s ability to","page_number":260,"box":{"x":116,"y":618,"width":736,"height":12}},{"id":"b9ebea66-3879-4752-ac32-b13de98b0abf","block_type":"box","text":"deliver on its low-carbon transition strategy. In assessing the role and effectiveness of the board in this","page_number":260,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"b4a42ca3-279a-4b3f-acb2-ce43fb781b38","block_type":"box","text":"regard, the dedicated team seeks to understand whether:","page_number":260,"box":{"x":117,"y":649,"width":430,"height":12}},{"id":"4ab9722c-69b9-47fb-80f5-7abc5966f572","block_type":"box","text":"• The board has clear oversight responsibilities for climate and low-carbon transition-related","page_number":260,"box":{"x":150,"y":679,"width":702,"height":12}},{"id":"3a7aabdc-d7f4-4159-bc4c-45cb44dd42e1","block_type":"box","text":"risks and opportunities in the company’s business model. The Guidelines consider the whole","page_number":260,"box":{"x":184,"y":694,"width":687,"height":12}},{"id":"336f8929-d70d-48f5-bccf-1a1715a770eb","block_type":"box","text":"board to have responsibility for oversight of the company’s long-term strategy, including those","page_number":260,"box":{"x":184,"y":710,"width":695,"height":12}},{"id":"ea22ee1c-c8a5-441b-ae09-e98eafa33575","block_type":"box","text":"aspects related to the transition to a low-carbon economy.","page_number":260,"box":{"x":184,"y":726,"width":429,"height":11}},{"id":"0e606578-d989-459e-bb70-39dc5455429f","block_type":"box","text":"• Management has established a robust low-carbon transition framework and long-term","page_number":260,"box":{"x":150,"y":748,"width":669,"height":12}},{"id":"6a3e5adf-05ff-484c-9583-ffb00e95e02b","block_type":"box","text":"strategy, with clear accountability for delivery by senior executives.","page_number":260,"box":{"x":184,"y":764,"width":493,"height":12}},{"id":"db8f9b00-be6b-4573-9405-b060fd56e966","block_type":"box","text":"19","page_number":260,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"af77b015-5f25-4f91-a8ee-10a9df5859ac","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in December","page_number":260,"box":{"x":171,"y":789,"width":712,"height":10}},{"id":"c6e0796b-0257-4fe8-8e97-be13757f5d60","block_type":"box","text":"2025.","page_number":260,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"041311c0-cec9-4c8b-b142-450e8b8c930e","block_type":"box","text":"20","page_number":260,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"c13ff57a-a0dd-439e-ba72-342ae0fdc02b","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their intentions to","page_number":260,"box":{"x":171,"y":815,"width":705,"height":9}},{"id":"b2c4434d-4217-4935-88ed-d864c9039196","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":260,"box":{"x":170,"y":828,"width":704,"height":9}},{"id":"a98b6b94-16f7-4748-a6ad-e529b2f49af0","block_type":"box","text":"International Transition Plan Network for information). 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Website accessed in December 2025.","page_number":260,"box":{"x":170,"y":879,"width":697,"height":10}},{"id":"aa5218ef-7451-4c5e-a2b3-f43e45ece84e","block_type":"box","text":"BlackRock Investment Stewardship","page_number":260,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"84f3a99c-9daa-4746-a216-08f863bc6f55","block_type":"box","text":"Climate and Decarbonization St","page_number":260,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"6b249468-24a8-444f-b624-cf407c7f2199","block_type":"box","text":"ewardship Guidelines |","page_number":260,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"d2fa6f2d-464e-458d-98e3-63b5b8ef69c4","block_type":"box","text":"7","page_number":260,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"e8f70714-ddac-4dd8-9e76-cb5146fbe42e","block_type":"box","text":"NM1026U-6004408-260/267","page_number":260,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"eab65168-dab8-4f3a-aa52-ff95d0f892c0","block_type":"box","text":"• The capital management strategy explains how the company allocates investments to","page_number":261,"box":{"x":150,"y":87,"width":675,"height":12}},{"id":"238dc85a-5f64-4add-996d-e19c670022f7","block_type":"box","text":"(traditional and next generation) business lines and innovation, and returns cash to","page_number":261,"box":{"x":184,"y":102,"width":619,"height":13}},{"id":"a4e218e6-5e0f-4909-be55-8988b635583d","block_type":"box","text":"shareholders, consistent with the company’s stated low-carbon transition strategy.","page_number":261,"box":{"x":184,"y":118,"width":614,"height":12}},{"id":"9fe609c2-fdd6-4040-859e-191195a64dcb","block_type":"box","text":"• The climate and low-carbon transition risks most likely to significantly impact the business are","page_number":261,"box":{"x":150,"y":140,"width":733,"height":12}},{"id":"5f59c066-a0c8-408c-a1ca-e3916186937b","block_type":"box","text":"integrated into the company’s enterprise risk management processes and reporting.","page_number":261,"box":{"x":184,"y":156,"width":627,"height":12}},{"id":"972e08df-efb4-4410-8c44-8e37e8d1b69a","block_type":"box","text":"• The company has set scope 1 and 2 GHG emissions reduction targets, science-based and","page_number":261,"box":{"x":150,"y":178,"width":712,"height":12}},{"id":"7524a207-9180-4e51-b6cc-f5062671a8f1","block_type":"box","text":"independently verified where possible, against a baseline, that are consistent with the","page_number":261,"box":{"x":184,"y":193,"width":639,"height":12}},{"id":"496930c8-e38b-4ed3-93c7-4d099d3ed516","block_type":"box","text":"ambition to limit average global temperature rise to no more than 1.5°C above pre-industrial","page_number":261,"box":{"x":184,"y":209,"width":685,"height":12}},{"id":"5ce8ccf9-146a-4887-9ddc-2caf0276e0fc","block_type":"box","text":"levels.","page_number":261,"box":{"x":184,"y":224,"width":51,"height":10}},{"id":"944f3923-98e3-4000-b28e-cc03e94457ae","block_type":"box","text":"• There is a clear link between the company’s scope 1 and 2 GHG emissions reduction targets","page_number":261,"box":{"x":150,"y":246,"width":728,"height":12}},{"id":"df6e2e26-b6b7-471d-b136-8d3af5ce624e","block_type":"box","text":"over time and its long-term low-carbon transition strategy.","page_number":261,"box":{"x":184,"y":262,"width":432,"height":12}},{"id":"497249b6-6593-4300-9811-cb6e5e9f0d0e","block_type":"box","text":"• The company is monitoring its most significant scope 3 emissions and disclosing these where","page_number":261,"box":{"x":150,"y":284,"width":733,"height":12}},{"id":"faf0a350-8489-4bcf-bc9c-539fb1008acd","block_type":"box","text":"it is confident in the data. Given forthcoming regulatory requirements in certain jurisdictions,","page_number":261,"box":{"x":184,"y":299,"width":684,"height":12}},{"id":"54ea8b2c-3033-4be5-9037-b925439de3cd","block_type":"box","text":"some companies are voluntarily disclosing scope 3 emissions reductions targets and plans,","page_number":261,"box":{"x":184,"y":315,"width":683,"height":12}},{"id":"ee30ca4d-b6f1-4fcb-880d-22e12236e2d9","block_type":"box","text":"setting out how they are working on decarbonization with the different constituents in their","page_number":261,"box":{"x":184,"y":330,"width":670,"height":12}},{"id":"0c231205-a54a-43bb-8d25-aeb12180b9aa","block_type":"box","text":"value chain.","page_number":261,"box":{"x":183,"y":346,"width":94,"height":9}},{"id":"2ab59c71-ef6c-45e9-970b-fc0b6e4b3ad8","block_type":"box","text":"21","page_number":261,"box":{"x":278,"y":346,"width":10,"height":6}},{"id":"5624eb29-b251-413e-848c-cbe9026caafd","block_type":"box","text":"• The company’s governance and oversight processes for managing material risks associated","page_number":261,"box":{"x":150,"y":368,"width":723,"height":12}},{"id":"fdba47c0-727a-4c0b-98b6-8abc71a62edc","block_type":"box","text":"with corporate political activities including applicable policies and procedures where","page_number":261,"box":{"x":183,"y":383,"width":624,"height":12}},{"id":"7c053da8-a88a-4268-9186-ebceeada49e1","block_type":"box","text":"relevant.","page_number":261,"box":{"x":184,"y":399,"width":62,"height":9}},{"id":"b71889dc-8ad1-4ca1-a609-9153cc0fdf8e","block_type":"box","text":"22","page_number":261,"box":{"x":248,"y":399,"width":11,"height":6}},{"id":"ac64d67d-45b4-4967-91be-45bfb1eee892","block_type":"box","text":"The dedicated team looks for public policy engagement to be consistent with a","page_number":261,"box":{"x":260,"y":399,"width":592,"height":12}},{"id":"3d73e181-c0a7-420b-899d-e4dea85b0a0a","block_type":"box","text":"company’s stated strategic policy objectives, including those related to the low-carbon","page_number":261,"box":{"x":184,"y":414,"width":642,"height":12}},{"id":"8a56e748-ace3-4480-b71d-5397d00c55c0","block_type":"box","text":"transition.","page_number":261,"box":{"x":183,"y":430,"width":78,"height":9}},{"id":"cfa6f14f-ac21-4ebb-b6cc-1219c62be5d7","block_type":"box","text":"Voting against directors over concerns about climate risk","page_number":261,"box":{"x":118,"y":458,"width":424,"height":12}},{"id":"f5a2f2bc-469c-4bfa-b7ab-666074ca3eb9","block_type":"box","text":"In implementing these Guidelines, the dedicated team generally supports non-executive directors","page_number":261,"box":{"x":117,"y":487,"width":726,"height":12}},{"id":"69b879e6-c01f-4868-a456-5bc68a525522","block_type":"box","text":"standing for election where, in its assessment based on company disclosures and engagement, a","page_number":261,"box":{"x":116,"y":502,"width":729,"height":13}},{"id":"e33376ed-6179-4f97-90ef-568d19c13f6c","block_type":"box","text":"company is executing on its commitment to align with the transition to a low-carbon economy, as","page_number":261,"box":{"x":116,"y":518,"width":722,"height":12}},{"id":"5111003a-1986-4d77-8dc7-45a3ce11ad73","block_type":"box","text":"defined above. Where the dedicated team determines this is not the case, it may vote against the","page_number":261,"box":{"x":116,"y":533,"width":727,"height":13}},{"id":"39884146-0c0b-4b39-90cb-238a3ca5b3ab","block_type":"box","text":"election of one or more directors who the team identifies as having the most responsibility for the issue.","page_number":261,"box":{"x":116,"y":549,"width":772,"height":12}},{"id":"b2ea1c7e-1a3f-4856-8aab-211ced6b7661","block_type":"box","text":"The directors most likely to be in focus are the chair of the board committee with low-carbon transition,","page_number":261,"box":{"x":116,"y":564,"width":765,"height":13}},{"id":"cbf24e54-d6ba-46bf-a895-74f7839a0ef3","block_type":"box","text":"climate or sustainability risk oversight responsibilities, other members of the relevant committee, the","page_number":261,"box":{"x":116,"y":580,"width":746,"height":12}},{"id":"5d3604eb-e2d8-4417-a6cb-813d68cd7167","block_type":"box","text":"lead independent director or the non-executive chair of the board. In certain markets, the team may","page_number":261,"box":{"x":117,"y":595,"width":741,"height":13}},{"id":"ffa0f8aa-46c2-495b-b5e4-62d12b49e835","block_type":"box","text":"withhold support for the discharge of the supervisory board or equivalent and/or board reports.","page_number":261,"box":{"x":116,"y":611,"width":699,"height":12}},{"id":"f38a0b36-fe0d-465d-9085-255043aedc22","block_type":"box","text":"23","page_number":261,"box":{"x":817,"y":611,"width":11,"height":6}},{"id":"90e7152b-143e-4cad-b8cb-b331c2a01076","block_type":"box","text":"Where the dedicated team has not supported director elections over climate concerns in a prior year,","page_number":261,"box":{"x":116,"y":640,"width":754,"height":12}},{"id":"9ab0eaee-e861-4626-b913-78dc4341f688","block_type":"box","text":"and the company has not subsequently made progress towards aligning with the transition to a","page_number":261,"box":{"x":116,"y":655,"width":709,"height":12}},{"id":"ac1fbeab-077a-47dc-9831-f0690401e984","block_type":"box","text":"low-carbon economy, the team may escalate by not supporting the re-election of additional responsible","page_number":261,"box":{"x":117,"y":671,"width":764,"height":12}},{"id":"a6d6b7ab-abdd-4dae-8ae5-2cbaa971519e","block_type":"box","text":"directors.","page_number":261,"box":{"x":116,"y":686,"width":67,"height":10}},{"id":"213bcd20-7552-4333-9030-075eeab79877","block_type":"box","text":"24","page_number":261,"box":{"x":185,"y":686,"width":12,"height":6}},{"id":"f58372c1-6809-42d2-b85e-ac54e85c727d","block_type":"box","text":"21","page_number":261,"box":{"x":143,"y":711,"width":8,"height":5}},{"id":"572d68cf-6302-49b4-8431-919b278ec2c7","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":261,"box":{"x":171,"y":711,"width":685,"height":10}},{"id":"18e419fd-6104-4e16-b480-9e4c65440b91","block_type":"box","text":"paper “Scope for improvement: Solving the Scope 3 conundrum.” Their research indicates that there are 2-3 material","page_number":261,"box":{"x":170,"y":724,"width":692,"height":10}},{"id":"d1285890-5e9f-4f9c-b389-d1fef2dc245a","block_type":"box","text":"scope 3 GHG emissions categories by sector. The research uses a definition of materiality from the GHG Protocol,","page_number":261,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"6f0b03fe-8af6-4cfa-942e-c3a24d869e6a","block_type":"box","text":"which “encourages companies to maintain a representative inventory of the “most significant GHG emissions, [that]","page_number":261,"box":{"x":170,"y":750,"width":682,"height":10}},{"id":"9ea0c3a6-a3e4-4545-8aaf-f39fa427b6f3","block_type":"box","text":"offer the most significant GHG reduction opportunities and are most relevant to the company’s business goals.” Website","page_number":261,"box":{"x":170,"y":763,"width":712,"height":10}},{"id":"439f8973-18ef-4848-ab98-8ee55fe90ddc","block_type":"box","text":"accessed in December 2025.","page_number":261,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"e2b60814-9166-4302-b7ad-c4ae20fa0aa3","block_type":"box","text":"22","page_number":261,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"b9c46915-5bfb-4ac1-92ea-d8d4dc6ebe96","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":261,"box":{"x":170,"y":789,"width":694,"height":9}},{"id":"5bfb39fc-d1e5-4b2e-87ee-474d89040999","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":261,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"3e2f4bdf-0507-40cf-bd36-945b3255a7ff","block_type":"box","text":"23","page_number":261,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"90285a0b-aaef-4691-bc86-9941bb98c1dc","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":261,"box":{"x":171,"y":815,"width":661,"height":9}},{"id":"dc2b25dc-db6e-4ffa-931d-6b92b925704e","block_type":"box","text":"information on a company’s sustainability efforts, operational resilience, or financial condition, among others.","page_number":261,"box":{"x":170,"y":828,"width":643,"height":9}},{"id":"2ca073a9-7d2d-47a7-b94b-f58d22fa3ee4","block_type":"box","text":"24","page_number":261,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"2ea0462d-6057-4402-908e-9aa6415c1e92","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally director","page_number":261,"box":{"x":170,"y":841,"width":703,"height":9}},{"id":"af01c72e-3bd1-4715-be97-bffb359dd42a","block_type":"box","text":"elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using the media","page_number":261,"box":{"x":170,"y":853,"width":702,"height":10}},{"id":"accf930d-0516-4b05-9c17-bc6a3528a21d","block_type":"box","text":"to amplify concerns as appropriate courses of action. The dedicated team will continue to take a constructive, long-term","page_number":261,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"7dbc5cb1-3586-4f35-874d-d9ac879bcc9b","block_type":"box","text":"focused approach, to engagement and voting on behalf of clients under these Guidelines.","page_number":261,"box":{"x":170,"y":879,"width":530,"height":10}},{"id":"6939afa5-b45c-414b-9f6c-cea9d0f9edb2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":261,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"eee385ac-92e5-4d5f-b38d-eb69e624c105","block_type":"box","text":"Climate and Decarbonization St","page_number":261,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"a57eface-8417-4c48-b5e6-62006b40aa40","block_type":"box","text":"ewardship Guidelines |","page_number":261,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"031f4a14-d439-4316-aba5-266872abad75","block_type":"box","text":"8","page_number":261,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"a5c28be2-b653-4898-973c-4a9f4e2141ee","block_type":"box","text":"NM1026U-6004408-261/267","page_number":261,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fa751351-aa74-4f52-926a-06a1365d3ca8","block_type":"box","text":"Management proposals to approve a climate strategy or progress report","page_number":262,"box":{"x":116,"y":87,"width":582,"height":12}},{"id":"6e61fdba-def9-4618-bbdb-8151a9c22b48","block_type":"box","text":"In certain markets, company management may submit proposals – commonly referred to as “Say on","page_number":262,"box":{"x":117,"y":120,"width":749,"height":12}},{"id":"c0695e17-91e9-41f4-b48d-40c156e62102","block_type":"box","text":"Climate” – seeking shareholder approval of their climate action plans or progress reports. The","page_number":262,"box":{"x":117,"y":136,"width":700,"height":12}},{"id":"434c3456-32e8-4c9f-b0e4-8186e61dbd97","block_type":"box","text":"Guidelines consider these proposals as a valuable governance mechanism that can enhance","page_number":262,"box":{"x":117,"y":151,"width":696,"height":12}},{"id":"781d9f11-47b5-4f52-8f42-c84d8bfd3c24","block_type":"box","text":"transparency, accountability, and investors’ understanding of a company’s climate strategy. The","page_number":262,"box":{"x":116,"y":167,"width":716,"height":12}},{"id":"cd68397c-7ce8-4a64-a820-55947c53cf38","block_type":"box","text":"dedicated team generally supports management’s climate strategy proposal if, in the team’s","page_number":262,"box":{"x":116,"y":182,"width":687,"height":12}},{"id":"11238925-6279-4f8e-a5f9-2d81db012061","block_type":"box","text":"assessment based on these Guidelines, the strategy is aligned with the low-carbon transition. Similarly,","page_number":262,"box":{"x":116,"y":198,"width":772,"height":12}},{"id":"cb566b6b-c110-4bce-bb04-60d97073332e","block_type":"box","text":"the dedicated team generally supports management’s proposal on a progress report if the company","page_number":262,"box":{"x":116,"y":213,"width":745,"height":12}},{"id":"732fd662-ef41-4569-8989-89134d7046fb","block_type":"box","text":"has clearly explained its progress against, and any deviations from or changes to, its stated low-carbon","page_number":262,"box":{"x":117,"y":229,"width":770,"height":12}},{"id":"5f704f8a-4ac4-40e3-b6b0-7119cefcfd57","block_type":"box","text":"transition plan and targets.","page_number":262,"box":{"x":116,"y":245,"width":203,"height":11}},{"id":"189feeb8-0ca5-4c74-8b73-4690d39698a8","block_type":"box","text":"Shareholder proposals on climate and low-carbon transition matters","page_number":262,"box":{"x":117,"y":278,"width":551,"height":12}},{"id":"79708d41-6aec-4407-b459-dd53d862c097","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":262,"box":{"x":117,"y":311,"width":717,"height":12}},{"id":"9f49ca7c-c156-4774-8d06-3c2cbda1ea8f","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics","page_number":262,"box":{"x":117,"y":327,"width":758,"height":12}},{"id":"38f38154-4a5a-45c7-8d1d-03f5dccff6d2","block_type":"box","text":"and have varying degrees of relevance for companies across sectors, locations, and business models.","page_number":262,"box":{"x":116,"y":342,"width":766,"height":12}},{"id":"c3e78e3e-4b79-4aa2-aeef-794251397e39","block_type":"box","text":"Each shareholder proposal is evaluated on a case-by-case basis, focusing on its merit while","page_number":262,"box":{"x":117,"y":375,"width":687,"height":12}},{"id":"d95854e9-5182-49d1-9794-639d8271352c","block_type":"box","text":"considering the company’s individual circumstances. When the dedicated team votes in support of a","page_number":262,"box":{"x":116,"y":391,"width":748,"height":12}},{"id":"ee5dfcea-eb99-47b8-8b6a-efcab574435d","block_type":"box","text":"proposal, it is not necessarily endorsing every element of the proposal or the reasoning, objectives, or","page_number":262,"box":{"x":117,"y":406,"width":759,"height":12}},{"id":"89e7a12d-c23a-431c-a967-4252dc55d9cc","block_type":"box","text":"supporting statement of the proponent.","page_number":262,"box":{"x":116,"y":422,"width":294,"height":12}},{"id":"637ea68e-0109-4cc5-a0f2-97ce703c5770","block_type":"box","text":"In addition to financial materiality, the Guidelines consider the proposal’s relevance to the company’s","page_number":262,"box":{"x":117,"y":455,"width":752,"height":12}},{"id":"0a07e1be-91d9-40bf-a129-5894759d1929","block_type":"box","text":"low-carbon transition strategy and targets. 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Under these Guidelines, the","page_number":262,"box":{"x":116,"y":810,"width":715,"height":12}},{"id":"e3e35643-f6e9-4dc4-8501-6bcef1f41363","block_type":"box","text":"dedicated team engages, where appropriate, to enhance its understanding of a company’s approach.","page_number":262,"box":{"x":116,"y":826,"width":757,"height":12}},{"id":"678c3859-7ddc-42eb-b446-d12b1ada4809","block_type":"box","text":"Generally, voting on these matters would be covered by BIS’ Benchmark Policies.","page_number":262,"box":{"x":117,"y":841,"width":612,"height":12}},{"id":"aade9595-dbe1-41c0-85ab-65c1ded24780","block_type":"box","text":"25","page_number":262,"box":{"x":143,"y":867,"width":9,"height":4}},{"id":"c9a5dd23-37ed-4bd9-82ca-73db78102a8f","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":262,"box":{"x":170,"y":866,"width":694,"height":10}},{"id":"bd9d00c3-78e7-4aab-908d-a45eacc83a6d","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":262,"box":{"x":170,"y":879,"width":378,"height":10}},{"id":"f6de38a7-88db-4219-9777-7cddb7d660ee","block_type":"box","text":"BlackRock Investment Stewardship","page_number":262,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"3527af23-f2f6-4547-94de-8975e4c44a1f","block_type":"box","text":"Climate and Decarbonization St","page_number":262,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"722adc1d-e603-4fa3-a463-ff195ebf7d81","block_type":"box","text":"ewardship Guidelines |","page_number":262,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"76ce3932-b13f-4429-8b58-9384b18e9d88","block_type":"box","text":"9","page_number":262,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"f534e93b-328f-4a46-8db3-7e7e6b181b58","block_type":"box","text":"NM1026U-6004408-262/267","page_number":262,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"75072c5a-09ac-418f-93b7-ae5a72bed0c3","block_type":"box","text":"Executive compensation","page_number":263,"box":{"x":116,"y":87,"width":202,"height":12}},{"id":"6aac753d-f496-4670-af8d-0b55ddcfe85f","block_type":"box","text":"The dedicated team looks to company boards to put in place a compensation structure that","page_number":263,"box":{"x":116,"y":118,"width":681,"height":12}},{"id":"30669e38-dd9e-4170-98b5-48c5095581a6","block_type":"box","text":"incentivizes and rewards executives appropriately. Some companies, in light of their long-term","page_number":263,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"6744e03a-bf39-45b4-8ceb-8c2bde5f1eab","block_type":"box","text":"strategy, may decide to include relevant GHG emissions reduction targets or low-carbon transition","page_number":263,"box":{"x":116,"y":149,"width":734,"height":12}},{"id":"f9808b94-3f8e-45b5-a8ab-034117fbf88d","block_type":"box","text":"related metrics in their incentive plans. In such cases, the dedicated team would engage to understand","page_number":263,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"bee28acc-a192-4ecc-a1d9-6994ceb99879","block_type":"box","text":"the alignment between those metrics and the company’s stated climate strategy. Clear disclosure also","page_number":263,"box":{"x":116,"y":180,"width":763,"height":12}},{"id":"a6a93626-8e5d-444d-8a89-d0a5fe58016e","block_type":"box","text":"helps investors assess whether pay structures are consistent with long-term climate strategy and risk","page_number":263,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"af25d4d8-e53a-40a9-add4-5d5a0350ac96","block_type":"box","text":"management.","page_number":263,"box":{"x":117,"y":211,"width":106,"height":12}},{"id":"500a201e-b736-40f4-8802-74e15cd86e51","block_type":"box","text":"Auditors and audit-related issues","page_number":263,"box":{"x":116,"y":242,"width":271,"height":10}},{"id":"3630f43f-9ed6-48dc-a8b5-d2c2bbe753bc","block_type":"box","text":"For companies with material climate or transition risks or opportunities in their business models, the","page_number":263,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"6827c12a-1f8d-4c76-8488-91d24ea5f8c5","block_type":"box","text":"dedicated team is interested in understanding whether the company considers and, if relevant,","page_number":263,"box":{"x":116,"y":289,"width":706,"height":12}},{"id":"01dbc758-862a-477b-bdfe-4fdde518e11a","block_type":"box","text":"quantifies, and accounts for material climate-related risks in its financial statements, including if the","page_number":263,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"262d8bde-a24f-4c69-8119-781ea75d684b","block_type":"box","text":"company explains such risks within the context of its audit report. The team notes that assurance of","page_number":263,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"2790c131-fccf-4617-83bc-079d7710b6a5","block_type":"box","text":"corporate disclosures related to climate risk and the transition to a low-carbon economy is still nascent.","page_number":263,"box":{"x":116,"y":335,"width":769,"height":12}},{"id":"ebad998a-4b6e-4dc5-b67d-fb4c2c62357c","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":263,"box":{"x":116,"y":366,"width":509,"height":12}},{"id":"f470258b-31fd-475f-b0bf-915085abb071","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on","page_number":263,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"1168bbe6-6d70-4512-ba10-b0a0641ca04b","block_type":"box","text":"climate-related factors under these Guidelines where a transaction may significantly alter a company’s","page_number":263,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"2e58b63a-5a1d-4cfc-a6b4-263ab9a76d78","block_type":"box","text":"climate strategy or a shareholder activist has proposed governance, strategic or operational changes","page_number":263,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"ced9b0bf-047f-423f-aee7-2aea63e1cb44","block_type":"box","text":"that may impact its climate strategy. The dedicated team does not promote changes in corporate","page_number":263,"box":{"x":116,"y":444,"width":723,"height":12}},{"id":"d1b23592-f248-4754-837b-7d69760cd2ec","block_type":"box","text":"control or engage in shareholder activism.","page_number":263,"box":{"x":116,"y":459,"width":317,"height":12}},{"id":"bec969f8-b406-4092-a576-fa1b3a6651cb","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":263,"box":{"x":117,"y":490,"width":559,"height":12}},{"id":"5d28ee40-2f1c-454b-b46e-d6fecceeada6","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other","page_number":263,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"d173a087-ff07-45fe-be90-0b467dc695a7","block_type":"box","text":"material sustainability-related risks and opportunities that may be relevant to a company’s business","page_number":263,"box":{"x":117,"y":537,"width":741,"height":12}},{"id":"9c680650-6805-4694-acb1-469d3318b732","block_type":"box","text":"model and long-term financial performance. These include a company’s impacts or dependencies on","page_number":263,"box":{"x":117,"y":552,"width":752,"height":12}},{"id":"49a14725-78d9-430f-a8b8-000a635f74f1","block_type":"box","text":"natural capital and key stakeholders.","page_number":263,"box":{"x":117,"y":568,"width":270,"height":12}},{"id":"4a012ce9-d98a-4e8a-9463-fb771af2be46","block_type":"box","text":"26","page_number":263,"box":{"x":389,"y":568,"width":12,"height":6}},{"id":"537b678b-3713-4d37-8410-316e725d91ca","block_type":"box","text":"In the context of these Guidelines, the dedicated team may","page_number":263,"box":{"x":401,"y":568,"width":448,"height":12}},{"id":"de562684-a520-43fd-ab78-487cf315dc7a","block_type":"box","text":"engage companies to better understand how they are managing the impact on people (e.g.,","page_number":263,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"9586157b-9228-422d-8a36-95e51a3ea7e2","block_type":"box","text":"employees, suppliers, customers and communities) of any strategic or operational changes they are","page_number":263,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"e092193f-9f10-4613-8ebf-b09b2d47fad9","block_type":"box","text":"making in relation to their transition to a low-carbon economy. Similarly, the team may engage","page_number":263,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"745c696b-cae8-4f90-b373-25e8cf6b19d0","block_type":"box","text":"companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":263,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"252d1b09-5eda-4435-a7ba-e25c1792b80f","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":263,"box":{"x":116,"y":645,"width":722,"height":12}},{"id":"3e04b726-d272-49eb-99f9-60b4b32f3dbf","block_type":"box","text":"26","page_number":263,"box":{"x":143,"y":867,"width":9,"height":5}},{"id":"7c81adee-c698-4a7d-9557-5f4befc4708d","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":263,"box":{"x":171,"y":867,"width":669,"height":9}},{"id":"ca3e9cf8-68a5-49b5-ae5b-fdff304a8cb1","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":263,"box":{"x":170,"y":880,"width":387,"height":9}},{"id":"e8afd3be-3bbf-485c-bff4-b55070076865","block_type":"box","text":"BlackRock Investment Stewardship","page_number":263,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"c9335a3d-c8d4-4139-bc53-e007d08bf45f","block_type":"box","text":"Climate and Decarbonization St","page_number":263,"box":{"x":496,"y":909,"width":212,"height":9}},{"id":"6b20af00-277d-47c7-9e39-9c178d0d1fbd","block_type":"box","text":"ewardship Guidelines |","page_number":263,"box":{"x":709,"y":909,"width":152,"height":12}},{"id":"af82d3f5-be7a-4427-92ff-be0557164eb5","block_type":"box","text":"10","page_number":263,"box":{"x":867,"y":909,"width":16,"height":9}},{"id":"138d5c8a-cadd-4e52-9d33-06217ed4b58d","block_type":"box","text":"NM1026U-6004408-263/267","page_number":263,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"90b45180-0887-42c1-9cca-299c6326ce13","block_type":"box","text":"Appendix 1","page_number":264,"box":{"x":116,"y":87,"width":95,"height":12}},{"id":"692286e7-6ee7-4fb7-9777-c073a943d2cd","block_type":"box","text":"Terminology","page_number":264,"box":{"x":449,"y":117,"width":106,"height":12}},{"id":"1fbbaeb8-d093-4485-a79e-6ead57a7d4bd","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":264,"box":{"x":116,"y":147,"width":593,"height":12}},{"id":"97efb423-2869-4582-801a-5c80527be0d5","block_type":"box","text":"Climate risk","page_number":264,"box":{"x":116,"y":170,"width":95,"height":10}},{"id":"c07db7da-1534-4b94-acd0-dcbf4de2813c","block_type":"box","text":": Includes physical risk, the increased risk to companies’ assets and activities caused by","page_number":264,"box":{"x":213,"y":170,"width":658,"height":12}},{"id":"4fac944c-1a40-4ea3-8584-60cd7024b311","block_type":"box","text":"the direct impact of changing weather patterns and natural catastrophes, and transition risk, the impact","page_number":264,"box":{"x":116,"y":186,"width":768,"height":12}},{"id":"ab151760-f4eb-4175-a27e-5f4949f1b1c7","block_type":"box","text":"of the transition to a low-carbon economy on a company’s long-term profitability.","page_number":264,"box":{"x":116,"y":201,"width":601,"height":12}},{"id":"684f1cb3-c210-40b5-8bba-3071c4704c85","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”)","page_number":264,"box":{"x":116,"y":224,"width":492,"height":12}},{"id":"2496f961-054f-4896-b08b-1586daf5b35a","block_type":"box","text":": The global economic shift toward","page_number":264,"box":{"x":610,"y":224,"width":259,"height":12}},{"id":"1ed890da-08dd-4bc9-b542-ac5866c451e0","block_type":"box","text":"lower emissions across many sectors and business models. The economic transformation is being","page_number":264,"box":{"x":117,"y":239,"width":735,"height":13}},{"id":"c525f1e7-2c18-449f-a3a9-07a590fbd1a0","block_type":"box","text":"driven by changes in government policy, technology, and consumer and investor preferences, as well","page_number":264,"box":{"x":116,"y":255,"width":758,"height":12}},{"id":"b32ffc18-fc33-44ca-b9fc-d0780f1fd7c8","block_type":"box","text":"as the physical effects of climate change (e.g., extreme weather), and can potentially have a material","page_number":264,"box":{"x":116,"y":270,"width":755,"height":13}},{"id":"fa71d350-5d3a-402b-b8be-72cf754485c1","block_type":"box","text":"impact on clients’ investments and portfolios.","page_number":264,"box":{"x":117,"y":286,"width":337,"height":12}},{"id":"727310df-56bf-4d18-95b4-6800e13a1f6c","block_type":"box","text":"Decarbonization","page_number":264,"box":{"x":117,"y":309,"width":128,"height":9}},{"id":"f99b10b9-68dd-4ccd-a6c1-009628408775","block_type":"box","text":": the process of reducing or eliminating emissions of carbon dioxide (CO","page_number":264,"box":{"x":248,"y":309,"width":535,"height":12}},{"id":"4dadb2f9-570a-4773-9837-5a0b0ea295b7","block_type":"box","text":"2","page_number":264,"box":{"x":784,"y":315,"width":5,"height":6}},{"id":"e9cf0f30-beb8-447d-ba1a-2bddfd4d2c19","block_type":"box","text":") from","page_number":264,"box":{"x":790,"y":309,"width":48,"height":12}},{"id":"464a1caf-747f-41b9-ac55-bd4e29a91592","block_type":"box","text":"human activity and removing carbon currently in the atmosphere. This can be carried out by countries,","page_number":264,"box":{"x":117,"y":324,"width":763,"height":12}},{"id":"3a1ba808-f679-4c93-be9d-f4434dbb742d","block_type":"box","text":"companies and even individual consumers. 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