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Capitalized terms used herein that are not defined have the same meaning as in the","page_number":1,"box":{"x":116,"y":389,"width":686,"height":12}},{"id":"31ad2370-7a8f-4053-aa48-267ca874f3c0","block_type":"box","text":"Prospectus, unless otherwise noted. Part I of this SAI and the portions of Part II of this SAI that relate","page_number":1,"box":{"x":117,"y":405,"width":755,"height":12}},{"id":"9cdd1ed3-f936-4866-82df-f192b7c34aaa","block_type":"box","text":"to the Fund have been incorporated by reference into the Fund’s Prospectus. 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":221,"y":428,"width":654,"height":10}},{"id":"16276624-6832-4481-b3d7-7e7cec4c3e0c","block_type":"box","text":"Independent Registered Public Accounting Firm","page_number":3,"box":{"x":151,"y":444,"width":359,"height":12}},{"id":"80264f33-9f1f-4ae3-9a67-cfa3980a9457","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":515,"y":444,"width":360,"height":9}},{"id":"07fb5b4c-bcf9-4a11-b590-23895df5e346","block_type":"box","text":"Investors’ Rights","page_number":3,"box":{"x":151,"y":459,"width":127,"height":12}},{"id":"a99b95da-6f15-458f-8e43-11209d7cfdf3","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":283,"y":459,"width":592,"height":10}},{"id":"b52cc92d-9f94-4e26-a767-6a5aa15f9732","block_type":"box","text":"Financial Statements","page_number":3,"box":{"x":117,"y":475,"width":160,"height":9}},{"id":"167e5bf3-6bc2-4a17-9655-a285993c2a26","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":283,"y":475,"width":592,"height":9}},{"id":"30ad5212-2c26-4cba-b819-2ec071a3cd98","block_type":"box","text":"PART II","page_number":3,"box":{"x":117,"y":490,"width":62,"height":10}},{"id":"a712ac86-aa21-4de4-a5fe-4b2a442a6146","block_type":"box","text":"Investment Risks and Considerations","page_number":3,"box":{"x":117,"y":506,"width":281,"height":9}},{"id":"2b9f1732-1fc4-4e32-9fe5-a56aaeb757e8","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1","page_number":3,"box":{"x":399,"y":506,"width":476,"height":9}},{"id":"52d7a59a-0fcc-4972-83fb-18e8b449a4b4","block_type":"box","text":"Appendix A – Description of Bond Ratings","page_number":3,"box":{"x":116,"y":521,"width":318,"height":12}},{"id":"9cc46166-c604-4ca8-9fd0-0d146001b664","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1","page_number":3,"box":{"x":435,"y":521,"width":440,"height":10}},{"id":"a7795dd9-51e8-448f-af8d-6248c6173264","block_type":"box","text":"Appendix B – Proxy Voting Policies","page_number":3,"box":{"x":116,"y":537,"width":267,"height":12}},{"id":"831dc93c-5483-481b-a474-5cc5dab86858","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1","page_number":3,"box":{"x":390,"y":537,"width":485,"height":9}},{"id":"29dcd8cd-7372-466f-8c57-91160da0579b","block_type":"box","text":"ii","page_number":3,"box":{"x":497,"y":909,"width":5,"height":9}},{"id":"79f20f47-e28a-4e48-ac45-ec99e7f7559d","block_type":"box","text":"NM1026U-6042785-3/259","page_number":3,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"892c5b80-9963-4460-8a47-118712880485","block_type":"box","text":"PART I: INFORMATION ABOUT","page_number":4,"box":{"x":119,"y":92,"width":594,"height":23}},{"id":"aa20bf68-f897-4ded-af03-90dec52491a7","block_type":"box","text":"ISHARES MACRO ALPHABETA ACTIVE","page_number":4,"box":{"x":119,"y":126,"width":753,"height":22}},{"id":"2e7803a7-8af8-4687-8309-b16ce60a76bf","block_type":"box","text":"ETF","page_number":4,"box":{"x":119,"y":159,"width":84,"height":23}},{"id":"6aedb20b-d0b4-4374-b840-e50a73649e80","block_type":"box","text":"Part I of this Statement of Additional Information (“SAI”) sets forth information about iShares Macro","page_number":4,"box":{"x":117,"y":211,"width":737,"height":12}},{"id":"3ba4000e-15db-4327-a32f-20e718ae5ebb","block_type":"box","text":"AlphaBeta Active ETF (the “Fund”), a series of BlackRock ETF Trust (the “Trust”). It includes","page_number":4,"box":{"x":116,"y":227,"width":692,"height":12}},{"id":"669b53d6-8fb7-4166-9cbb-80bf1ba4f771","block_type":"box","text":"information about the Trust’s Board of Trustees (the “Board”), the advisory and management","page_number":4,"box":{"x":117,"y":242,"width":691,"height":12}},{"id":"ad3662ac-4d22-49c1-9e21-047d4afb8c00","block_type":"box","text":"services provided to and the management fees paid by the Fund and information about other fees","page_number":4,"box":{"x":116,"y":258,"width":732,"height":12}},{"id":"fbb1e154-067f-44ba-8ffa-9111eee1c762","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":4,"box":{"x":116,"y":273,"width":748,"height":12}},{"id":"3be15160-278b-4532-9368-02d5e4ebeb83","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":4,"box":{"x":116,"y":289,"width":683,"height":12}},{"id":"b77529fa-ebb5-4540-9604-d0586d2fc554","block_type":"box","text":"General Description of the Fund","page_number":4,"box":{"x":118,"y":340,"width":582,"height":29}},{"id":"5dfcd877-f5b0-4f9b-88f6-1c276496fe57","block_type":"box","text":"The Fund is managed by BlackRock Fund Advisors (“BFA”), an indirect majority-owned subsidiary of","page_number":4,"box":{"x":116,"y":392,"width":752,"height":12}},{"id":"228a6f59-9a68-4d49-b595-38f2974734d5","block_type":"box","text":"BlackRock, Inc. BlackRock Asset Management North Asia Limited and BlackRock (Singapore) Limited","page_number":4,"box":{"x":117,"y":407,"width":764,"height":13}},{"id":"61f7c64e-af18-4a8d-b1fc-d2aad6a8c773","block_type":"box","text":"(the “Sub-Advisers”), each an affiliate of BFA, serves as the sub-advisers to the Fund.","page_number":4,"box":{"x":117,"y":423,"width":642,"height":12}},{"id":"64bc0563-a68c-41f1-a39c-e1858def452b","block_type":"box","text":"The Fund offers and issues shares at their net asset value per share (“NAV”) only in aggregations of","page_number":4,"box":{"x":116,"y":454,"width":749,"height":12}},{"id":"91764c91-1303-4a2a-997d-d63282345149","block_type":"box","text":"a specified number of shares (each, a “Creation Unit”), generally in exchange for a designated","page_number":4,"box":{"x":116,"y":469,"width":704,"height":13}},{"id":"d074d015-f5fa-4dc3-aa6f-fee8b25f6758","block_type":"box","text":"portfolio of securities (including any portion of such securities for which cash may be substituted)","page_number":4,"box":{"x":117,"y":485,"width":721,"height":12}},{"id":"6134c51b-1a4f-4ccf-9a0a-5b03057ca707","block_type":"box","text":"(the “Deposit Securities” or “Creation Basket”), together with the deposit of a specified cash payment","page_number":4,"box":{"x":117,"y":500,"width":751,"height":13}},{"id":"a8ac5a79-e143-4565-9291-cc7e66a082c7","block_type":"box","text":"(the “Cash Component”). Shares of the Fund are listed for trading on NYSE Arca, Inc. (the “Listing","page_number":4,"box":{"x":117,"y":516,"width":734,"height":12}},{"id":"33e97413-f0aa-464e-a14a-7468ba68ef25","block_type":"box","text":"Exchange” or “NYSE Arca”), a national securities exchange. Shares of the Fund are traded in the","page_number":4,"box":{"x":117,"y":531,"width":726,"height":13}},{"id":"18403b71-1037-4c50-bff9-78c3bbbeb895","block_type":"box","text":"secondary market and elsewhere at market prices that may be at, above or below the Fund’s NAV.","page_number":4,"box":{"x":116,"y":547,"width":739,"height":12}},{"id":"2f4f2b64-0126-4a66-9d36-33e64704afd3","block_type":"box","text":"Shares are redeemable by the Fund only in Creation Units by Authorized Participants (as defined in","page_number":4,"box":{"x":116,"y":562,"width":744,"height":13}},{"id":"c5fb5583-bd29-43e6-b86f-f2b9fee7786c","block_type":"box","text":"the","page_number":4,"box":{"x":116,"y":578,"width":28,"height":9}},{"id":"44d7b455-ee69-4882-a11c-6dd7def5949b","block_type":"box","text":"Procedures for Creation of Creation Units","page_number":4,"box":{"x":144,"y":578,"width":313,"height":9}},{"id":"5e8de725-622a-469f-8622-6ffa584ce236","block_type":"box","text":"section of this SAI), and, generally, in exchange for","page_number":4,"box":{"x":458,"y":578,"width":384,"height":12}},{"id":"9227035a-e3cc-4c71-aadd-2361c4f254c4","block_type":"box","text":"portfolio securities and a Cash Amount (as defined in the","page_number":4,"box":{"x":117,"y":593,"width":426,"height":13}},{"id":"f56147f7-bfa6-4000-9bbf-68acc7936303","block_type":"box","text":"Redemption of Creation Units","page_number":4,"box":{"x":544,"y":593,"width":225,"height":12}},{"id":"b1e233fa-466a-41aa-bd29-323cab950ad9","block_type":"box","text":"section of this","page_number":4,"box":{"x":769,"y":593,"width":107,"height":10}},{"id":"0363ea2c-a019-4ec5-8dc9-7ffd8f0d8050","block_type":"box","text":"SAI). Creation Units typically are a specified number of shares, generally 20,000 shares or multiples","page_number":4,"box":{"x":116,"y":609,"width":747,"height":12}},{"id":"69824f20-3bb6-4424-9b7d-3c79a908d808","block_type":"box","text":"thereof.","page_number":4,"box":{"x":116,"y":624,"width":61,"height":10}},{"id":"95144494-ed7b-4333-8d3e-203af0180efe","block_type":"box","text":"The Trust reserves the right to permit or require that creations and redemptions of shares are effected","page_number":4,"box":{"x":116,"y":655,"width":762,"height":13}},{"id":"2b46e665-f6c8-48b7-a784-9c4f7029fb90","block_type":"box","text":"fully or partially in cash and reserves the right to permit or require the substitution of Deposit Securities","page_number":4,"box":{"x":116,"y":671,"width":761,"height":12}},{"id":"cae860e5-8d3d-4ccd-b568-d493f0814e59","block_type":"box","text":"in lieu of cash. Shares may be issued in advance of receipt of Deposit Securities, subject to various","page_number":4,"box":{"x":117,"y":686,"width":736,"height":13}},{"id":"75149d39-22a2-4672-abda-8131e9a3314b","block_type":"box","text":"conditions, including a requirement that the Authorized Participant maintain with the Trust collateral as","page_number":4,"box":{"x":116,"y":702,"width":758,"height":12}},{"id":"8b3ea708-14bd-40dc-8adc-355fd5aeb6d7","block_type":"box","text":"set forth in the handbook for Authorized Participants. The Trust may use such collateral at any time to","page_number":4,"box":{"x":116,"y":717,"width":754,"height":13}},{"id":"edac4186-64a6-43c9-8ca9-c1f1500a5b10","block_type":"box","text":"purchase Deposit Securities. See the","page_number":4,"box":{"x":117,"y":733,"width":275,"height":12}},{"id":"db85475d-a29b-4d45-a997-a45177c7824e","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":4,"box":{"x":399,"y":733,"width":320,"height":12}},{"id":"994facc8-2edc-4f04-b209-f021d3aae09b","block_type":"box","text":"section of this SAI.","page_number":4,"box":{"x":724,"y":733,"width":138,"height":10}},{"id":"2c2c919d-fb43-4573-87e6-778434f6f072","block_type":"box","text":"Transaction fees and other costs associated with creations or redemptions that include a cash portion","page_number":4,"box":{"x":116,"y":748,"width":754,"height":12}},{"id":"fae2c5ad-20b6-4aec-af1a-eb7a9cc58a8c","block_type":"box","text":"may be higher than the transaction fees and other costs associated with in-kind creations or","page_number":4,"box":{"x":117,"y":764,"width":681,"height":12}},{"id":"462f6b9c-4645-4675-832f-d4616365a220","block_type":"box","text":"redemptions. In all cases, conditions with respect to creations and redemptions of shares and fees will","page_number":4,"box":{"x":117,"y":780,"width":757,"height":11}},{"id":"de3425ad-7653-4a7b-8ea1-cda2f4397edf","block_type":"box","text":"be limited in accordance with the requirements of SEC rules and regulations applicable to","page_number":4,"box":{"x":117,"y":795,"width":663,"height":12}},{"id":"4abea5d8-4b0f-4371-a8ad-fa6dc015daa8","block_type":"box","text":"management investment companies offering redeemable securities.","page_number":4,"box":{"x":117,"y":811,"width":502,"height":12}},{"id":"32eb1491-80b5-40a6-86e9-e3d562009634","block_type":"box","text":"1","page_number":4,"box":{"x":497,"y":909,"width":4,"height":9}},{"id":"50cd8a60-9d2c-4891-bdcb-6345a1e72f93","block_type":"box","text":"NM1026U-6042785-4/259","page_number":4,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"eb21aacc-a1da-4dc2-8fd1-d345c18e1020","block_type":"box","text":"Exchange Listing and Trading","page_number":5,"box":{"x":119,"y":92,"width":542,"height":29}},{"id":"18c26d97-e6ce-4593-bcf2-aa761d5978ad","block_type":"box","text":"A discussion of exchange listing and trading matters associated with an investment in the Fund is","page_number":5,"box":{"x":116,"y":144,"width":728,"height":12}},{"id":"67dd92dc-9b25-401a-841f-c66f18ed2955","block_type":"box","text":"contained in the","page_number":5,"box":{"x":116,"y":160,"width":123,"height":9}},{"id":"b8bb5d1f-40c1-4a4c-a8e6-c029c7f5242b","block_type":"box","text":"Shareholder Information","page_number":5,"box":{"x":240,"y":159,"width":179,"height":10}},{"id":"b22b2ce6-b575-4597-8fcb-161ffadbab00","block_type":"box","text":"section of the Fund’s Prospectus. The discussion below","page_number":5,"box":{"x":420,"y":159,"width":424,"height":12}},{"id":"431f071f-11b5-4d94-817b-1045b37aad02","block_type":"box","text":"supplements, and should be read in conjunction with, that section of the Prospectus.","page_number":5,"box":{"x":116,"y":175,"width":631,"height":12}},{"id":"dde2119d-8e1d-4f36-8afb-dfe4ba084a78","block_type":"box","text":"Shares of the Fund are listed for trading, and trade throughout the day, on the Listing Exchange and in","page_number":5,"box":{"x":116,"y":206,"width":766,"height":12}},{"id":"1e17f7c1-2de3-4add-a598-2cb4634a17e8","block_type":"box","text":"other secondary markets. Shares of the Fund may also be listed on certain non-U.S. exchanges. There","page_number":5,"box":{"x":116,"y":221,"width":771,"height":12}},{"id":"893ad5c5-9833-4302-82e0-13023dd905b6","block_type":"box","text":"can be no assurance that the requirements of the Listing Exchange necessary to maintain the listing of","page_number":5,"box":{"x":116,"y":237,"width":767,"height":12}},{"id":"aa9681ac-92d3-4aaa-a120-b0c11e2d65af","block_type":"box","text":"shares of the Fund will continue to be met. 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The Fund is the sole shareholder of the","page_number":11,"box":{"x":117,"y":102,"width":747,"height":12}},{"id":"2083cf97-5aa2-4702-a1c6-2e884d43f06c","block_type":"box","text":"Subsidiary, and shares of the Subsidiary will not be sold or offered to other investors.","page_number":11,"box":{"x":116,"y":118,"width":636,"height":12}},{"id":"3bc21576-75cf-4708-9378-a1cb15fa7b22","block_type":"box","text":"The Subsidiary invests primarily in commodity-related instruments. Although the Fund may enter into","page_number":11,"box":{"x":116,"y":149,"width":753,"height":12}},{"id":"4daad42f-e033-498c-99d5-41242094b418","block_type":"box","text":"these commodity-related instruments directly, the Fund will likely gain exposure to these commodity","page_number":11,"box":{"x":116,"y":165,"width":746,"height":12}},{"id":"9908bbb7-d73c-4d0e-89ac-c58ead45f918","block_type":"box","text":"related instruments indirectly by investing in the Subsidiary. To the extent that BFA believes that these","page_number":11,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"f38354b9-2457-4ab8-9a0d-6d553e298fc9","block_type":"box","text":"commodity-related instruments provide suitable exposure to the commodities market, the Fund’s","page_number":11,"box":{"x":116,"y":196,"width":721,"height":12}},{"id":"4c067d3a-2ba5-42df-b213-83ad095a67d2","block_type":"box","text":"investment in the Subsidiary will likely increase. The Subsidiary may also hold cash and invest in other","page_number":11,"box":{"x":117,"y":211,"width":765,"height":12}},{"id":"d4a72203-eb7d-4fd5-9899-ec1e880dde98","block_type":"box","text":"instruments, including fixed-income securities, either as investments or to serve as margin or collateral","page_number":11,"box":{"x":117,"y":227,"width":765,"height":12}},{"id":"5d69d8bc-d3d5-4452-8fb3-66e45806c3f8","block_type":"box","text":"for the Subsidiary’s derivative positions.","page_number":11,"box":{"x":116,"y":242,"width":300,"height":12}},{"id":"0a1d18f9-c7fc-495b-ab08-a5c8b8e21bbb","block_type":"box","text":"BFA manages the assets of the Subsidiary pursuant to an Investment Advisory Agreement between","page_number":11,"box":{"x":117,"y":273,"width":746,"height":12}},{"id":"8e629db1-a619-4390-abbd-c1964b597aab","block_type":"box","text":"BFA and the Subsidiary, but receives no additional compensation for doing so. The Manager has","page_number":11,"box":{"x":117,"y":289,"width":724,"height":12}},{"id":"8c6501fa-1f6b-45d1-a7ec-44a11ae1886c","block_type":"box","text":"entered into sub-advisory agreements with each Sub-Adviser with respect to the Subsidiary. BFA also","page_number":11,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"ad57556e-bb05-4e4b-87ec-eb3a75fcd440","block_type":"box","text":"provides certain administrative services for the Subsidiary, but receives no additional compensation for","page_number":11,"box":{"x":117,"y":320,"width":767,"height":12}},{"id":"d400afe8-12f0-4f9d-befd-3a6feb9d2344","block_type":"box","text":"doing so. The Subsidiary will also enter into separate contracts for the provision of custody and","page_number":11,"box":{"x":116,"y":335,"width":710,"height":12}},{"id":"7a7320ad-9931-493f-a946-ba9d5b76477f","block_type":"box","text":"accounting agent services with the same or with affiliates of the same service providers that provide","page_number":11,"box":{"x":116,"y":351,"width":746,"height":12}},{"id":"86225344-e994-458c-94e6-34c574e92981","block_type":"box","text":"those services to the Fund.","page_number":11,"box":{"x":116,"y":366,"width":207,"height":10}},{"id":"1861d538-833d-49a0-92f5-d1b4c3ca5e5a","block_type":"box","text":"The financial statements of the Subsidiary will be consolidated with the Fund’s financial statements in","page_number":11,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"9d585260-4e97-437d-b583-28011b007d79","block_type":"box","text":"the Fund’s Annual and Semi-Annual Financial Statements and Additional Information. The Fund’s","page_number":11,"box":{"x":116,"y":413,"width":729,"height":9}},{"id":"2227ffba-e441-4219-849e-d574f06852bb","block_type":"box","text":"Annual and Semi-Annual Financial Statements and Additional Information will be able to be obtained at","page_number":11,"box":{"x":116,"y":428,"width":770,"height":10}},{"id":"d0194402-a531-4fcd-a704-d412fd86b184","block_type":"box","text":"no charge by telephoning the Distributor at the telephone number appearing on the front page of this","page_number":11,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"019b1b8e-b76a-4c70-82b5-d7715df8b2dc","block_type":"box","text":"SAI.","page_number":11,"box":{"x":116,"y":459,"width":36,"height":10}},{"id":"2bef64f5-aa6c-46ea-9324-35ca392531d7","block_type":"box","text":"The Subsidiary is not registered under the Investment Company Act, and, unless otherwise noted in","page_number":11,"box":{"x":116,"y":490,"width":746,"height":12}},{"id":"6f814d21-3fad-4cad-ada5-368fb7ea0c08","block_type":"box","text":"the Fund’s Prospectus or this SAI, is not subject to all the investor protections of the Investment","page_number":11,"box":{"x":116,"y":506,"width":715,"height":12}},{"id":"771cbfd7-f183-43ff-bd50-cb0850291239","block_type":"box","text":"Company Act. However, the Fund wholly owns and controls the Subsidiary, and the Fund and the","page_number":11,"box":{"x":117,"y":521,"width":728,"height":12}},{"id":"b936bc05-fcbd-4083-a699-4296d8ddb990","block_type":"box","text":"Subsidiary are both managed by BFA, making it unlikely that the Subsidiary will take action contrary to","page_number":11,"box":{"x":116,"y":537,"width":764,"height":12}},{"id":"86d03fdc-62e3-44f0-8a1e-29ec1d040f3a","block_type":"box","text":"the interests of the Fund and its shareholders. The Fund’s Board of Trustees has oversight","page_number":11,"box":{"x":116,"y":552,"width":679,"height":12}},{"id":"1e4524cf-da28-4a65-ba57-4ec55f34532b","block_type":"box","text":"responsibility for the investment activities of the Fund, including its investment in the Subsidiary, and","page_number":11,"box":{"x":117,"y":568,"width":748,"height":12}},{"id":"ee9f6676-bf61-4d19-9f13-26c35d468595","block_type":"box","text":"the Fund’s role as sole shareholder of the Subsidiary. Except as noted above, the Subsidiary will be","page_number":11,"box":{"x":116,"y":583,"width":745,"height":12}},{"id":"1f8fa5ef-5b3e-4bb2-ae03-d3d7755040fd","block_type":"box","text":"subject to the same investment restrictions and limitations, and follow the same compliance policies","page_number":11,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"f5be3ea5-f97d-402e-af4b-2ef123a56f28","block_type":"box","text":"and procedures, as the Fund. In addition, changes in the laws of the United States and/or the Cayman","page_number":11,"box":{"x":116,"y":614,"width":764,"height":12}},{"id":"a37f1de2-57da-4a64-a010-9a6981ef2775","block_type":"box","text":"Islands could result in the inability of the Fund and/or the Subsidiary to operate as described in the","page_number":11,"box":{"x":117,"y":630,"width":734,"height":12}},{"id":"93b23322-132d-4f06-b538-a706157ef9fc","block_type":"box","text":"Fund’s Prospectus and this SAI and could adversely affect the Fund. For example, the Cayman Islands","page_number":11,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"ce622959-3492-4308-aa1b-c2a1cbe18801","block_type":"box","text":"does not currently impose any income, corporate or capital gains tax, estate duty, inheritance tax, gift","page_number":11,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"9bbe339f-95ba-4fd7-bdb3-de8852cc3cb5","block_type":"box","text":"tax or withholding tax on the Subsidiary. If Cayman Islands law changes such that the Subsidiary must","page_number":11,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"0ab10cff-0dfa-42e0-904c-3c05632266ac","block_type":"box","text":"pay Cayman Islands taxes, the Fund shareholders would likely suffer decreased investment returns.","page_number":11,"box":{"x":117,"y":692,"width":741,"height":12}},{"id":"fa51de8b-6e03-490a-9371-0431939f843a","block_type":"box","text":"The Fund, as a “regulated investment company” under the tax rules, is required to realize at least","page_number":11,"box":{"x":116,"y":723,"width":722,"height":12}},{"id":"e1ed55dc-2ba6-495d-a8f9-e752d9208c60","block_type":"box","text":"90 percent of its annual gross income from investment-related sources, specifically from dividends,","page_number":11,"box":{"x":116,"y":738,"width":733,"height":12}},{"id":"26dd7c27-e25b-460f-8d5d-aa8dd0173af5","block_type":"box","text":"interest, proceeds from securities lending, gains from the sales of stocks, securities and foreign","page_number":11,"box":{"x":117,"y":754,"width":705,"height":12}},{"id":"5453ff89-2110-4cb5-b3da-4506c0615e2f","block_type":"box","text":"currencies, other income (including, but not limited to, gains from options, futures or forward contracts)","page_number":11,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"12905466-6fb7-4b98-953f-71adb2a6432a","block_type":"box","text":"derived with respect to its business of investing in such stock, securities or currencies, or certain types","page_number":11,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"0dc6a1df-dbb1-4182-b551-8d54da7292e1","block_type":"box","text":"of publicly traded partnerships (referred to as qualifying income). The Fund invests in commodity","page_number":11,"box":{"x":116,"y":800,"width":722,"height":12}},{"id":"984b2478-08e8-48aa-8f60-e8a6e579573a","block_type":"box","text":"related instruments indirectly through the Subsidiary because direct investments by a regulated","page_number":11,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"145e8aaf-669f-4b33-b7c5-efc12636871e","block_type":"box","text":"investment company in commodity-related instruments generally do not produce qualifying income.","page_number":11,"box":{"x":117,"y":831,"width":740,"height":12}},{"id":"22ac1b45-1f74-4075-b5d4-3b03d4b320fa","block_type":"box","text":"The Fund expects its income with respect to the Subsidiary to be qualifying income. However, in the","page_number":11,"box":{"x":116,"y":847,"width":747,"height":12}},{"id":"d728b666-4710-44ee-8d4e-f9970b2c4519","block_type":"box","text":"future, if the IRS issues regulations or other guidance, or Congress enacts legislation limiting the","page_number":11,"box":{"x":116,"y":862,"width":721,"height":12}},{"id":"22eb5b9b-e57d-4677-a785-aa1bba6b4c96","block_type":"box","text":"circumstances in which the Fund’s income with respect to the Subsidiary will be considered “qualifying","page_number":11,"box":{"x":116,"y":878,"width":764,"height":12}},{"id":"4447f50a-4b79-4132-98ec-2232140f6198","block_type":"box","text":"8","page_number":11,"box":{"x":495,"y":909,"width":8,"height":9}},{"id":"ffac633e-36c0-4d5c-8a58-c48082860325","block_type":"box","text":"NM1026U-6042785-11/259","page_number":11,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"028322de-d8af-4d75-a81e-944436b7dfb9","block_type":"box","text":"income,” the Fund might be required to make changes to its operations, which may reduce the Fund’s","page_number":12,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"74b7e308-7faa-4b05-bd50-c5632abccec3","block_type":"box","text":"ability to gain investment exposure to commodities. Fund shareholders may also experience adverse","page_number":12,"box":{"x":116,"y":103,"width":754,"height":12}},{"id":"a7d7db21-5f62-4036-91fe-8f21108db7da","block_type":"box","text":"tax consequences in such circumstances.","page_number":12,"box":{"x":116,"y":118,"width":315,"height":12}},{"id":"d05e3f7b-1861-4acd-b814-95057f4fffe5","block_type":"box","text":"The Subsidiary itself is not expected to be subject to U.S. federal income tax. It will, however, be","page_number":12,"box":{"x":116,"y":146,"width":720,"height":12}},{"id":"d13fcfe3-ddb2-4445-bc8a-01b1fdef4508","block_type":"box","text":"considered a controlled foreign corporation, and the Fund will be required to include as income","page_number":12,"box":{"x":116,"y":162,"width":708,"height":12}},{"id":"ee1920cb-9d91-4aec-8fca-1c04eaf1facc","block_type":"box","text":"annually amounts earned by the Subsidiary during that year, whether or not the Subsidiary distributes","page_number":12,"box":{"x":116,"y":177,"width":758,"height":12}},{"id":"035e01e1-7174-44cd-8eb9-9be1136c602a","block_type":"box","text":"such amounts to the Fund. (Previously taxed income will not, however, be taxable again when","page_number":12,"box":{"x":116,"y":193,"width":703,"height":12}},{"id":"fa1d8c1a-0689-4d60-aaa9-0a4f64ee30e4","block_type":"box","text":"distributed.) Furthermore, the requirement for the Fund to distribute net investment income, if any, and","page_number":12,"box":{"x":116,"y":208,"width":765,"height":12}},{"id":"8963dbdc-77c1-4c19-a4a6-550c59b6c4c2","block_type":"box","text":"net realized capital gain, if any, at least annually, will apply to such Subsidiary income, whether or not","page_number":12,"box":{"x":117,"y":224,"width":756,"height":12}},{"id":"c8a13529-b3a0-4f79-8c72-222298ea5860","block_type":"box","text":"the Subsidiary makes a distribution to the Fund during the taxable year. If the Subsidiary incurs net","page_number":12,"box":{"x":116,"y":239,"width":739,"height":12}},{"id":"e9324229-fe8d-4e07-a517-4dc91b6e8186","block_type":"box","text":"losses in any year, such losses will not offset the Fund’s income or gains nor carryforward to future","page_number":12,"box":{"x":117,"y":255,"width":738,"height":12}},{"id":"1521cc91-6f1a-4678-9210-461b57e0044b","block_type":"box","text":"years.","page_number":12,"box":{"x":116,"y":273,"width":50,"height":9}},{"id":"42730e8f-a036-472c-bbaa-88fab24d842f","block_type":"box","text":"Proxy Voting Policy","page_number":12,"box":{"x":119,"y":317,"width":356,"height":28}},{"id":"e6df0879-8fb7-44f5-9da0-bb0ce4161380","block_type":"box","text":"The Board has delegated the voting of proxies for the Fund’s securities to BFA pursuant to (i) the","page_number":12,"box":{"x":116,"y":364,"width":725,"height":12}},{"id":"5bbb3f6d-8fbb-4873-b573-6f95ea2313d6","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting Policy (the “Active Fund Proxy Voting","page_number":12,"box":{"x":116,"y":379,"width":742,"height":13}},{"id":"73a6c6fd-ae8d-4727-9fe0-55b507390f2f","block_type":"box","text":"Policy”) or (ii) the Index Equity Fund Proxy Voting Policy, as applicable. Please refer to the grid above","page_number":12,"box":{"x":117,"y":395,"width":758,"height":12}},{"id":"c92b8350-e209-4961-a078-acfd896f798d","block_type":"box","text":"in this SAI for the policy applicable to the Fund.","page_number":12,"box":{"x":117,"y":411,"width":354,"height":12}},{"id":"34a9f34d-83e0-4b5a-9fe9-342835e50fab","block_type":"box","text":"With respect to funds covered by the Active Fund Proxy Voting Policy, BFA has adopted the","page_number":12,"box":{"x":116,"y":439,"width":688,"height":12}},{"id":"9f9af9ed-213c-491e-9755-8b6d31664f21","block_type":"box","text":"BlackRock Active Investment Stewardship—Global Engagement and Voting Guidelines (the “BAIS","page_number":12,"box":{"x":117,"y":454,"width":735,"height":12}},{"id":"b9cdcaf6-d96e-46b4-81ce-0bed61f59cbe","block_type":"box","text":"Guidelines”). Certain of such funds, as listed within the Active Fund Proxy Voting Policy and as","page_number":12,"box":{"x":117,"y":470,"width":708,"height":12}},{"id":"ab1c921f-a9c3-404b-82b9-4f8dac3b2168","block_type":"box","text":"disclosed in the grid above in this SAI, follow supplemental guidelines within the BAIS Guidelines that","page_number":12,"box":{"x":116,"y":485,"width":757,"height":12}},{"id":"18b33c8f-8fc4-45f4-9f4c-545551970ba5","block_type":"box","text":"are applicable to certain climate and decarbonization issues (the “BAIS Climate and Decarbonization","page_number":12,"box":{"x":116,"y":501,"width":753,"height":12}},{"id":"f4bc767e-a92e-4d27-b6af-233cb13f2fdd","block_type":"box","text":"Stewardship Guidelines”).","page_number":12,"box":{"x":116,"y":516,"width":197,"height":12}},{"id":"fbb20103-e753-4688-8506-c3b783449845","block_type":"box","text":"With respect to funds covered by the Index Equity Fund Proxy Voting Policy, BFA has adopted the","page_number":12,"box":{"x":116,"y":544,"width":735,"height":13}},{"id":"99232c40-92de-4ca3-8598-995ccce253f4","block_type":"box","text":"BlackRock Investment Stewardship (“BIS”) Global Benchmark Policy, comprised of the Global","page_number":12,"box":{"x":117,"y":560,"width":701,"height":12}},{"id":"d0e62d85-d72f-4a08-943f-446d84c41109","block_type":"box","text":"Principles for Benchmark Policies, regional voting guidelines, and engagement priorities, which are","page_number":12,"box":{"x":117,"y":575,"width":737,"height":13}},{"id":"0ed5dc7b-ae7f-4ab7-8174-87dd261f80dc","block_type":"box","text":"each available upon request. In addition, certain of such funds, as listed within the Index Equity Fund","page_number":12,"box":{"x":116,"y":591,"width":754,"height":12}},{"id":"b3199aad-9510-4781-8a57-d70baaaaec55","block_type":"box","text":"Proxy Voting Policy and as disclosed in the grid above in this SAI, follow supplemental guidelines that","page_number":12,"box":{"x":117,"y":607,"width":758,"height":12}},{"id":"40799a1e-691d-4723-874f-e6294a2bb378","block_type":"box","text":"are applicable to certain climate and decarbonization issues (the “BIS Climate and Decarbonization","page_number":12,"box":{"x":116,"y":622,"width":741,"height":12}},{"id":"d56d6619-7fcf-4bca-873b-dc00b82eaf0d","block_type":"box","text":"Stewardship Guidelines”).","page_number":12,"box":{"x":116,"y":638,"width":197,"height":12}},{"id":"d12a0a2f-dea1-4f27-85ce-abf074d572d6","block_type":"box","text":"If the Fund invests in an underlying fund managed by BlackRock, the Fund will use its proxy voting","page_number":12,"box":{"x":117,"y":666,"width":730,"height":12}},{"id":"d3271dd6-615f-4843-8941-fd07f1bc8e22","block_type":"box","text":"policy when voting on proxies for the underlying fund while the underlying fund will use its proxy voting","page_number":12,"box":{"x":117,"y":681,"width":757,"height":12}},{"id":"f1a1b256-a5cd-425b-8fa4-d69484dc979a","block_type":"box","text":"policy when voting proxies on investments the underlying fund holds. Therefore, the Fund may use the","page_number":12,"box":{"x":117,"y":697,"width":760,"height":12}},{"id":"2293ca2f-a9bf-489e-9fda-975eb59a9154","block_type":"box","text":"Active Fund Proxy Voting Policy while an underlying fund may use the Index Equity Fund Proxy Voting","page_number":12,"box":{"x":116,"y":712,"width":760,"height":12}},{"id":"261d78dd-db35-4389-9db4-bfb8d5998db9","block_type":"box","text":"Policy, and the opposite is also true.","page_number":12,"box":{"x":117,"y":728,"width":267,"height":12}},{"id":"aaeb42e9-d8f4-4faa-b615-6e81a67b20e9","block_type":"box","text":"Copies of the Active Fund Proxy Voting Policy, Index Equity Fund Proxy Voting Policy, the BAIS","page_number":12,"box":{"x":117,"y":756,"width":711,"height":12}},{"id":"7ae31866-ab8c-44cf-a0b1-ce213e8c8099","block_type":"box","text":"Guidelines, the Global Principles for Benchmark Policies and the BIS Climate and Decarbonization","page_number":12,"box":{"x":117,"y":771,"width":731,"height":12}},{"id":"eb21d8ce-5b18-4964-aa55-699689d52c33","block_type":"box","text":"Stewardship Guidelines are attached as an appendix to this SAI. 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Purchase or hold real estate, except the Fund may purchase and hold securities or other","page_number":14,"box":{"x":116,"y":715,"width":692,"height":12}},{"id":"5e8305ab-f788-4b10-9714-8b52c63dcb7d","block_type":"box","text":"instruments that are secured by, or linked to, real estate or interests therein, securities of real","page_number":14,"box":{"x":150,"y":730,"width":690,"height":12}},{"id":"de4dd3c0-318d-41ef-a138-30547cb64e45","block_type":"box","text":"estate investment trusts (“REITs”), mortgage-related securities and securities of issuers engaged","page_number":14,"box":{"x":150,"y":746,"width":719,"height":12}},{"id":"63207e15-b7d4-49b1-b3fe-4e53dd7fd8ab","block_type":"box","text":"in the real estate business, and the Fund may purchase and hold real estate as a result of the","page_number":14,"box":{"x":150,"y":761,"width":695,"height":12}},{"id":"c46bad61-1080-4628-a061-982bc437b22e","block_type":"box","text":"ownership of securities or other instruments.","page_number":14,"box":{"x":150,"y":777,"width":328,"height":12}},{"id":"3b55f634-0898-492f-9016-b1be78e19cfa","block_type":"box","text":"5. Underwrite securities issued by others, except to the extent that the sale of portfolio securities by","page_number":14,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"fb0d87fb-0904-4916-ae04-4139e15f1ff0","block_type":"box","text":"the Fund may be deemed to be an underwriting or as otherwise permitted by applicable law.","page_number":14,"box":{"x":150,"y":815,"width":683,"height":12}},{"id":"e0199217-faa5-4355-a989-57064c6d77a3","block_type":"box","text":"6. Purchase or sell commodities or commodity contracts, except as permitted by the Investment","page_number":14,"box":{"x":116,"y":838,"width":731,"height":12}},{"id":"be277e64-ecad-4eb0-bc6c-c22e0b16fb51","block_type":"box","text":"Company Act.","page_number":14,"box":{"x":150,"y":854,"width":110,"height":12}},{"id":"dcd5bb92-ffb1-434e-8b9a-f9851bb8fc94","block_type":"box","text":"7. Make loans to the extent prohibited by the Investment Company Act.","page_number":14,"box":{"x":116,"y":877,"width":548,"height":12}},{"id":"11f44ac9-1dfb-4258-9b3f-7c9ef3e366f5","block_type":"box","text":"11","page_number":14,"box":{"x":492,"y":909,"width":14,"height":9}},{"id":"37ae1de6-31cb-4e22-91b3-f1db0cd87fd6","block_type":"box","text":"NM1026U-6042785-14/259","page_number":14,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"38f8a6bf-74da-4639-b816-2ac66d8c01b8","block_type":"box","text":"Notations Regarding the Fund’s Fundamental Investment Policies","page_number":15,"box":{"x":116,"y":87,"width":531,"height":12}},{"id":"6b241c67-59b8-4fc7-98d5-b523ce2c468a","block_type":"box","text":"The following notations are not considered to be part of the Fund’s fundamental investment policies","page_number":15,"box":{"x":116,"y":110,"width":743,"height":12}},{"id":"fccfeb9d-8962-4c4a-9bd8-2ded104e12d0","block_type":"box","text":"and are subject to change without shareholder approval.","page_number":15,"box":{"x":116,"y":126,"width":424,"height":12}},{"id":"42f52758-31e9-463b-9252-e0822329f756","block_type":"box","text":"With respect to the fundamental policy relating to concentration set forth in (1) above, the Investment","page_number":15,"box":{"x":116,"y":157,"width":753,"height":12}},{"id":"924e6cc9-aa8f-4824-8a4e-7b86dc54b10d","block_type":"box","text":"Company Act does not define what constitutes “concentration” in an industry. The SEC staff has taken","page_number":15,"box":{"x":117,"y":172,"width":763,"height":12}},{"id":"1a738a54-e4f4-4811-b7f6-e7c1718f5781","block_type":"box","text":"the position that investment of 25% or more of a fund’s total assets in one or more issuers conducting","page_number":15,"box":{"x":116,"y":188,"width":759,"height":12}},{"id":"751b6593-787f-4a1d-9987-7b2386001007","block_type":"box","text":"their principal activities in the same industry or group of industries constitutes concentration. It is","page_number":15,"box":{"x":116,"y":203,"width":718,"height":12}},{"id":"1c0b6fbb-7a6e-4b61-bdcc-bfbced00a1c5","block_type":"box","text":"possible that interpretations of concentration could change in the future. The policy in (1) above will be","page_number":15,"box":{"x":117,"y":219,"width":763,"height":12}},{"id":"5c7b8fda-305d-435a-b873-7132f6a6d9b5","block_type":"box","text":"interpreted to refer to concentration as that term may be interpreted from time to time. The policy also","page_number":15,"box":{"x":117,"y":234,"width":757,"height":12}},{"id":"27621262-38c3-4a15-a413-c784f1948ebc","block_type":"box","text":"will be interpreted to permit investment without limit in the following: securities of the U.S. government","page_number":15,"box":{"x":116,"y":250,"width":759,"height":12}},{"id":"65c35adc-ea1c-44bd-ab29-4c8d99fadcf7","block_type":"box","text":"and its agencies or instrumentalities; securities of state, territory, possession or municipal governments","page_number":15,"box":{"x":116,"y":265,"width":770,"height":12}},{"id":"e97b17c5-ad22-4519-8afe-d3a79b1ebbbc","block_type":"box","text":"and their authorities, agencies, instrumentalities or political subdivisions; and repurchase agreements","page_number":15,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"70ff80b6-c09e-4871-b6d9-862c9f7351a8","block_type":"box","text":"collateralized by any such obligations. Accordingly, issuers of the foregoing securities will not be","page_number":15,"box":{"x":116,"y":296,"width":718,"height":12}},{"id":"070edb90-ad9c-4151-83d5-8181b6da1031","block_type":"box","text":"considered to be members of any industry. There also will be no limit on investment in issuers","page_number":15,"box":{"x":116,"y":312,"width":701,"height":12}},{"id":"45c1b6f5-052c-472d-b182-b38f4a674d90","block_type":"box","text":"domiciled in a single jurisdiction or country. Finance companies will be considered to be in the","page_number":15,"box":{"x":116,"y":327,"width":701,"height":12}},{"id":"e2bb2875-c4ec-4e13-96d6-77b1b9835ce8","block_type":"box","text":"industries of their parents if their activities are primarily related to financing the activities of the parents.","page_number":15,"box":{"x":117,"y":343,"width":766,"height":12}},{"id":"04aa0026-3582-46a2-acbe-40c3851e4727","block_type":"box","text":"Each foreign government will be considered to be a member of a separate industry. With respect to the","page_number":15,"box":{"x":117,"y":358,"width":769,"height":12}},{"id":"3d77cdb8-a722-40a2-b5f5-72442f1f66f3","block_type":"box","text":"Fund’s industry classifications, the Fund currently utilizes any one or more of the industry","page_number":15,"box":{"x":117,"y":374,"width":665,"height":12}},{"id":"59d0f26e-53a8-42bf-b5e6-1e9ccdd5082c","block_type":"box","text":"sub-classifications used by one or more widely recognized market indexes or rating group indexes,","page_number":15,"box":{"x":116,"y":389,"width":739,"height":12}},{"id":"182e403c-6e45-431a-b68d-80aef91df5dd","block_type":"box","text":"and/or as defined by Fund management. The policy also will be interpreted to give broad authority to","page_number":15,"box":{"x":116,"y":405,"width":751,"height":12}},{"id":"71545cac-d8c2-49d9-9b06-6f8aafb68043","block_type":"box","text":"the Fund as to how to classify issuers within or among industries.","page_number":15,"box":{"x":116,"y":420,"width":489,"height":12}},{"id":"c8dc3cb7-ad5a-4749-861f-eb745894a84a","block_type":"box","text":"With respect to the fundamental policy relating to borrowing money set forth in (2) above, the","page_number":15,"box":{"x":116,"y":451,"width":694,"height":12}},{"id":"9a3c52c0-ab7e-454a-b56e-9d0c520c2576","block_type":"box","text":"Investment Company Act permits the Fund to borrow money in amounts of up to one-third of the","page_number":15,"box":{"x":117,"y":467,"width":719,"height":12}},{"id":"eef7126b-638d-4d0a-bf01-e310079fccae","block_type":"box","text":"Fund’s total assets from banks for any purpose, and to borrow up to 5% of the Fund’s total assets from","page_number":15,"box":{"x":117,"y":482,"width":767,"height":12}},{"id":"5d1add44-87f3-4114-9556-478cad7196b7","block_type":"box","text":"banks or other lenders for temporary purposes. (The Fund’s total assets include the amounts being","page_number":15,"box":{"x":117,"y":498,"width":740,"height":12}},{"id":"081c6e7a-39e3-4180-9795-659832977321","block_type":"box","text":"borrowed.) To limit the risks attendant to borrowing, the Investment Company Act requires the Fund to","page_number":15,"box":{"x":117,"y":513,"width":763,"height":12}},{"id":"a66a2ff2-fe8b-4201-9a93-06a2ec6e7283","block_type":"box","text":"maintain at all times an “asset coverage” of at least 300% of the amount of its borrowings. Asset","page_number":15,"box":{"x":117,"y":529,"width":718,"height":12}},{"id":"67aaa680-717d-4ccd-be0a-6d81bea93744","block_type":"box","text":"coverage means the ratio that the value of the Fund’s total assets (including amounts borrowed),","page_number":15,"box":{"x":116,"y":544,"width":723,"height":12}},{"id":"af549bc9-733e-4fae-8e0b-6e25c4857e46","block_type":"box","text":"minus liabilities other than borrowings, bears to the aggregate amount of all borrowings. Borrowing","page_number":15,"box":{"x":117,"y":560,"width":736,"height":12}},{"id":"6a702669-0599-41f4-a1a5-32cc3d75df4e","block_type":"box","text":"money to increase portfolio holdings is known as “leveraging.” Certain trading practices and","page_number":15,"box":{"x":117,"y":575,"width":683,"height":12}},{"id":"e81abfc8-7696-41dd-8aec-c54810e489d6","block_type":"box","text":"investments, such as reverse repurchase agreements, may be considered to be borrowings or involve","page_number":15,"box":{"x":117,"y":591,"width":761,"height":12}},{"id":"76d7344b-061d-4d3d-87a5-f0a9c0086896","block_type":"box","text":"leverage and thus are subject to the Investment Company Act restrictions. In accordance with Rule","page_number":15,"box":{"x":117,"y":606,"width":739,"height":12}},{"id":"d1054244-57af-42b5-8a77-6a49f2098921","block_type":"box","text":"18f-4 under the Investment Company Act, when the Fund engages in reverse repurchase agreements","page_number":15,"box":{"x":118,"y":622,"width":760,"height":12}},{"id":"5753d6a7-33f0-4502-aa84-5269b485c7d1","block_type":"box","text":"and similar financing transactions, the Fund may either (i) maintain asset coverage of at least 300%","page_number":15,"box":{"x":116,"y":637,"width":745,"height":12}},{"id":"0af26322-8c49-4ef1-8987-277166e89256","block_type":"box","text":"with respect to such transactions and any other borrowings in the aggregate, or (ii) treat such","page_number":15,"box":{"x":116,"y":653,"width":696,"height":12}},{"id":"b50b385a-53db-40bb-b7e1-6bf8f4d23b4d","block_type":"box","text":"transactions as “derivatives transactions” and comply with Rule 18f-4 with respect to such transactions.","page_number":15,"box":{"x":116,"y":668,"width":765,"height":12}},{"id":"3a9c5aef-e070-42f7-84e8-db9f7f692ee3","block_type":"box","text":"Short-term credits necessary for the settlement of securities transactions and arrangements with","page_number":15,"box":{"x":116,"y":684,"width":715,"height":12}},{"id":"9e14949d-bdff-4d09-8336-4ea4cd6ee27e","block_type":"box","text":"respect to securities lending will not be considered to be borrowings under the policy. Practices and","page_number":15,"box":{"x":117,"y":700,"width":737,"height":12}},{"id":"874d0325-ce27-43ef-8048-f02f3624675f","block_type":"box","text":"investments that may involve leverage but are not considered to be borrowings are not subject to the","page_number":15,"box":{"x":117,"y":715,"width":747,"height":12}},{"id":"c2cf7d10-816f-4627-a1ee-9ecaf6ebd0ff","block_type":"box","text":"policy.","page_number":15,"box":{"x":117,"y":731,"width":45,"height":12}},{"id":"8146d212-4ea9-49df-8eb3-e73802974ff2","block_type":"box","text":"With respect to the fundamental policy relating to underwriting set forth in (5) above, the Investment","page_number":15,"box":{"x":116,"y":761,"width":739,"height":13}},{"id":"cc6d928f-d4c8-4a39-8a38-95d122934e2f","block_type":"box","text":"Company Act does not prohibit the Fund from engaging in the underwriting business or from","page_number":15,"box":{"x":117,"y":777,"width":682,"height":12}},{"id":"eb118921-2fbc-45df-a8a9-991c8af22454","block_type":"box","text":"underwriting the securities of other issuers; in fact, in the case of diversified funds, the Investment","page_number":15,"box":{"x":117,"y":792,"width":724,"height":13}},{"id":"7cea3b91-2f86-4cb1-bf23-a875207ebfbf","block_type":"box","text":"Company Act permits the Fund to have underwriting commitments of up to 25% of its assets under","page_number":15,"box":{"x":117,"y":808,"width":733,"height":12}},{"id":"a321623c-041b-4996-a69e-41bd8eb0890a","block_type":"box","text":"certain circumstances. Those circumstances currently are that the amount of the Fund’s underwriting","page_number":15,"box":{"x":116,"y":823,"width":748,"height":13}},{"id":"204833d1-1744-48e1-be5a-8eb568543241","block_type":"box","text":"commitments, when added to the value of the Fund’s investments in issuers where the Fund owns","page_number":15,"box":{"x":116,"y":839,"width":735,"height":11}},{"id":"0c301a42-1a73-4797-9ea6-e66dd3d2e4e2","block_type":"box","text":"more than 10% of the outstanding voting securities of those issuers, cannot exceed the 25% cap. A","page_number":15,"box":{"x":117,"y":854,"width":742,"height":13}},{"id":"cf4793a9-3f3a-4900-9737-98de8985b086","block_type":"box","text":"fund engaging in transactions involving the acquisition or disposition of portfolio securities may be","page_number":15,"box":{"x":116,"y":870,"width":729,"height":12}},{"id":"8dab86a2-6a45-4b08-b556-7f35b8765b15","block_type":"box","text":"12","page_number":15,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"b8f78723-e865-498e-924e-cea7b93d61d2","block_type":"box","text":"NM1026U-6042785-15/259","page_number":15,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"fb264b9c-4ace-4c41-9f40-90f10d4232ee","block_type":"box","text":"considered to be an underwriter under the Securities Act of 1933, as amended (the “1933 Act”).","page_number":16,"box":{"x":116,"y":87,"width":714,"height":12}},{"id":"a5f38074-5018-48e8-b996-aefda281ac2c","block_type":"box","text":"Although it is not believed that the application of the 1933 Act provisions described above would cause","page_number":16,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"ecac66ba-5b47-407b-9075-761068f3ab7e","block_type":"box","text":"the Fund to be engaged in the business of underwriting, the policy in (5) above will be interpreted not","page_number":16,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"67db893a-a34b-4ede-9921-bb1c247aaaa3","block_type":"box","text":"to prevent the Fund from engaging in transactions involving the acquisition or disposition of portfolio","page_number":16,"box":{"x":116,"y":134,"width":745,"height":12}},{"id":"e0db3e9f-a967-41fd-9fc6-0c2cc39ebc5b","block_type":"box","text":"securities, regardless of whether the Fund may be considered to be an underwriter under the 1933 Act","page_number":16,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"8f6a30a8-d25a-47bf-99ff-a41621351203","block_type":"box","text":"or is otherwise engaged in the underwriting business to the extent permitted by applicable law.","page_number":16,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"22aaf22a-d026-45e5-ba8c-def289fc326a","block_type":"box","text":"With respect to the fundamental policy relating to lending set forth in (7) above, the Investment","page_number":16,"box":{"x":116,"y":196,"width":706,"height":12}},{"id":"0eb4fd59-9770-4dd8-8b45-38a518e004b8","block_type":"box","text":"Company Act does not prohibit the Fund from making loans (including lending its securities); however,","page_number":16,"box":{"x":117,"y":212,"width":763,"height":12}},{"id":"799c36a5-5bfb-4fc8-8fe0-034eb4238832","block_type":"box","text":"SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets","page_number":16,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"a5c32fdd-8c2d-49a5-abb7-ac5d3af627c3","block_type":"box","text":"(including lending its securities), except through the purchase of debt obligations or the use of","page_number":16,"box":{"x":117,"y":243,"width":699,"height":12}},{"id":"e990bc81-28b5-48ad-8390-5c1051ee7cc7","block_type":"box","text":"repurchase agreements. In addition, collateral arrangements with respect to options, forward currency","page_number":16,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"c5a84190-c260-40b0-bcbe-c0f1d5690b4b","block_type":"box","text":"and futures transactions and other derivative instruments (as applicable), as well as delays in the","page_number":16,"box":{"x":116,"y":274,"width":725,"height":12}},{"id":"c0ba5c8b-6554-46e2-ba96-b3de4bbc3ad3","block_type":"box","text":"settlement of securities transactions, will not be considered loans.","page_number":16,"box":{"x":116,"y":289,"width":493,"height":11}},{"id":"34fb0429-5001-42fe-9cbc-463769a999ab","block_type":"box","text":"Non-Fundamental Investment Policies","page_number":16,"box":{"x":117,"y":321,"width":308,"height":9}},{"id":"409eaa06-acc7-4ef9-bdc2-3f257fee2f9b","block_type":"box","text":"Under its non-fundamental investment policies, which may be changed by the Board without","page_number":16,"box":{"x":117,"y":344,"width":688,"height":12}},{"id":"79fd840d-584e-49a6-9986-cc6492e0d286","block_type":"box","text":"shareholder approval, the Fund may not:","page_number":16,"box":{"x":116,"y":360,"width":308,"height":12}},{"id":"de3e3fff-09d9-424c-b21f-05177e4c2199","block_type":"box","text":"a. Purchase securities of other investment companies, except to the extent permitted by the","page_number":16,"box":{"x":116,"y":391,"width":701,"height":12}},{"id":"05ec4aaa-bbf2-4077-b0a6-6234a8d6316e","block_type":"box","text":"Investment Company Act. As a matter of policy, however, the Fund will not purchase shares of","page_number":16,"box":{"x":151,"y":407,"width":706,"height":12}},{"id":"4b18165d-992d-4daf-828e-485ae773a5b9","block_type":"box","text":"any registered open-end investment company or registered unit investment trust, in reliance on","page_number":16,"box":{"x":150,"y":422,"width":710,"height":12}},{"id":"6ff77090-59c4-49d4-bc3b-80e81f9ad795","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":16,"box":{"x":150,"y":438,"width":723,"height":12}},{"id":"7bab1ddc-f08e-4002-9b8e-89b4536c74fa","block_type":"box","text":"time the Fund has knowledge that its shares are purchased by another investment company","page_number":16,"box":{"x":150,"y":453,"width":689,"height":12}},{"id":"efc16b8e-fd53-44fd-addf-2d0bd3dad31d","block_type":"box","text":"investor in reliance on the provisions of subparagraph (G) of Section 12(d)(1).","page_number":16,"box":{"x":150,"y":469,"width":581,"height":12}},{"id":"928d723f-91fd-4388-8efd-94d9ce52c411","block_type":"box","text":"b. 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In particular, Mr. Fairbairn’s positions as Vice Chairman","page_number":25,"box":{"x":116,"y":831,"width":767,"height":12}},{"id":"e882dcaa-1f9b-4704-8a2a-491a4a86209f","block_type":"box","text":"of BlackRock, Inc., Member of BlackRock’s Global Operating Committee and Co-Chair of BlackRock’s","page_number":25,"box":{"x":116,"y":846,"width":763,"height":12}},{"id":"c3d141f9-cc8c-486b-8921-a88c3bf741b7","block_type":"box","text":"Human Capital Committee provide the Board with a wealth of practical business knowledge and","page_number":25,"box":{"x":117,"y":862,"width":715,"height":12}},{"id":"abe42725-b399-45b4-a55f-122c4019d059","block_type":"box","text":"leadership. In addition, Mr. Fairbairn has global investment management and oversight experience","page_number":25,"box":{"x":117,"y":877,"width":736,"height":12}},{"id":"58531b99-fae0-4dbc-9899-465a5cfe5739","block_type":"box","text":"22","page_number":25,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"e8342799-8168-4f41-9ee9-89a2ad252603","block_type":"box","text":"NM1026U-6042785-25/259","page_number":25,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4c82114e-e803-4804-8723-ec7c6fe6e8a1","block_type":"box","text":"through his former positions as Member of BlackRock’s Global Executive Committee, Global Head of","page_number":26,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"ffcb5239-1b9c-42db-b7cc-783224c03c48","block_type":"box","text":"BlackRock’s Retail and iShares","page_number":26,"box":{"x":117,"y":102,"width":232,"height":10}},{"id":"28c6dbcd-d586-4a36-aa34-a040a5b833c0","block_type":"box","text":"®","page_number":26,"box":{"x":349,"y":102,"width":10,"height":7}},{"id":"f5401415-d2c5-40d2-a5cf-22ef4a21a9e5","block_type":"box","text":"businesses, Head of BlackRock’s Global Client Group, Chairman of","page_number":26,"box":{"x":359,"y":102,"width":511,"height":12}},{"id":"af57148e-e92f-4cfb-b0c1-825a170b21e9","block_type":"box","text":"BlackRock’s international businesses and his previous oversight over BlackRock’s Strategic Partner","page_number":26,"box":{"x":117,"y":118,"width":745,"height":12}},{"id":"c18dbafe-d171-4091-a1a8-a5d294260ca5","block_type":"box","text":"Program and Strategic Product Management Group. 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Perlowski’s experience as Senior Managing Director of BlackRock, Inc. since 2026, Managing","page_number":26,"box":{"x":116,"y":180,"width":767,"height":12}},{"id":"6b88d99c-ba07-4ba8-a1ff-58244a139e77","block_type":"box","text":"Director of BlackRock, Inc. from 2009 to 2025, as the Head of BlackRock Global Business Operations","page_number":26,"box":{"x":117,"y":196,"width":759,"height":11}},{"id":"ccb1718c-ceff-4ddc-927f-0d85b13c957e","block_type":"box","text":"Services since 2009, and as President and Chief Executive Officer of the BlackRock-advised Funds","page_number":26,"box":{"x":116,"y":211,"width":745,"height":11}},{"id":"a702bf76-029f-4e31-8e16-2176d6423c05","block_type":"box","text":"provides him with a strong understanding of the BlackRock-advised Funds, their operations, and the","page_number":26,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"bd805ebe-9388-43d1-b998-aab9100c3d03","block_type":"box","text":"business and regulatory issues facing the BlackRock-advised Funds. Mr. Perlowski’s prior position as","page_number":26,"box":{"x":117,"y":242,"width":757,"height":12}},{"id":"0c7a1967-dec0-4ca5-bcdf-dabc8da5bc10","block_type":"box","text":"Managing Director and Chief Operating Officer of the Global Product Group at Goldman Sachs Asset","page_number":26,"box":{"x":117,"y":258,"width":755,"height":12}},{"id":"d4891944-857c-46a9-a996-2f12af4dc1ee","block_type":"box","text":"Management, and his former service as Treasurer and Senior Vice President of the Goldman Sachs","page_number":26,"box":{"x":117,"y":273,"width":747,"height":12}},{"id":"a35a207b-79b0-4573-93c9-052bd8620356","block_type":"box","text":"Mutual Funds and as Director of the Goldman Sachs Offshore Funds provides the Board with the","page_number":26,"box":{"x":117,"y":289,"width":725,"height":12}},{"id":"470926b6-ec41-45d4-b4d3-3e1ebdcc1b3d","block_type":"box","text":"benefit of his experience with the management practices of other financial companies. 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Ms. Carter also served as director of the Pacific Pension","page_number":26,"box":{"x":116,"y":637,"width":730,"height":10}},{"id":"cf1ba753-7051-4972-a121-ff6ff52298f5","block_type":"box","text":"Institute from 2014 to 2018, trustee to the Financial Accounting Foundation from 2017 to 2021,","page_number":26,"box":{"x":117,"y":653,"width":706,"height":12}},{"id":"3328e671-e128-4353-9e76-495aafec8255","block_type":"box","text":"Advisory Board Member for the Center for Private Equity and Entrepreneurship at Tuck School of","page_number":26,"box":{"x":116,"y":668,"width":723,"height":12}},{"id":"57359971-ec83-4bec-904f-a73679a3d29c","block_type":"box","text":"Business from 1997 to 2021, Advisory Board Member for Bridges Fund Management from 2016 to","page_number":26,"box":{"x":117,"y":684,"width":729,"height":12}},{"id":"14d4b2cc-bcf5-4f0d-8516-55a890ebe52f","block_type":"box","text":"2018, Advisory Board Member for Girls Who Invest from 2015 to 2018 and Board Member thereof from","page_number":26,"box":{"x":116,"y":699,"width":764,"height":13}},{"id":"23e2b693-3891-48dc-896f-368036b044e6","block_type":"box","text":"2018 to 2022, and Practitioner Advisory Board Member for Private Capital Research Institute (“PCRI”)","page_number":26,"box":{"x":116,"y":715,"width":756,"height":12}},{"id":"0aa0786d-9ef8-4b9e-84fb-c7b9d6983bfd","block_type":"box","text":"from 2017 to 2024. She currently serves as Member of the President’s Counsel for Commonfund.","page_number":26,"box":{"x":116,"y":730,"width":723,"height":13}},{"id":"bd84073e-8182-4920-91c0-3263cd109689","block_type":"box","text":"These positions have provided her with insight and perspective on the markets and the economy.","page_number":26,"box":{"x":116,"y":746,"width":721,"height":12}},{"id":"7fea51bd-ea9c-4935-98e1-ea0f47bdecc5","block_type":"box","text":"Collette Chilton has over 20 years of experience in investment management. She held the position of","page_number":26,"box":{"x":117,"y":777,"width":750,"height":12}},{"id":"7deea108-6f04-4965-8042-7d05f93fd61b","block_type":"box","text":"Chief Investment Officer of Williams College from October 2006 to June 2023. 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These positions","page_number":26,"box":{"x":116,"y":823,"width":747,"height":13}},{"id":"711ab778-7785-4368-bf10-1036af04a74c","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy.","page_number":26,"box":{"x":117,"y":839,"width":604,"height":12}},{"id":"b858e306-2faa-418b-94d1-9c8584c44776","block_type":"box","text":"23","page_number":26,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"14d02c78-0efb-4870-be91-ad6c0be4d3c0","block_type":"box","text":"NM1026U-6042785-26/259","page_number":26,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3cb76047-343a-4e71-81ad-b33b6a0e46d4","block_type":"box","text":"Neil A. Cotty has more than 30 years of experience in the financial services industry, including","page_number":27,"box":{"x":117,"y":87,"width":702,"height":12}},{"id":"33312ea0-1cd2-49d0-b53c-79c773ff1e69","block_type":"box","text":"19 years at Bank of America Corporation and its affiliates, where he served, at different times, as the","page_number":27,"box":{"x":118,"y":102,"width":750,"height":13}},{"id":"72802529-5ffe-41a8-ae8c-702a83b29d9c","block_type":"box","text":"Chief Financial Officer of various businesses including Investment Banking, Global Markets, Wealth","page_number":27,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"a785e4a5-5fcd-4108-a088-ed8d32bba4b6","block_type":"box","text":"Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of","page_number":27,"box":{"x":117,"y":134,"width":737,"height":12}},{"id":"9d0f8866-1648-4eda-b34d-dd65e199d149","block_type":"box","text":"America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee","page_number":27,"box":{"x":116,"y":149,"width":768,"height":12}},{"id":"030db786-f4f8-4aff-93c6-c0ad4ef11e5c","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":27,"box":{"x":116,"y":165,"width":569,"height":11}},{"id":"2d2846c7-f9b0-4631-a7cd-a23fdd373910","block_type":"box","text":"Jeffrey Jarczyk is a CPA and has more than 30 years of experience in the financial services industry,","page_number":27,"box":{"x":116,"y":196,"width":754,"height":12}},{"id":"aa07dae1-e569-4afa-a963-567221bfc89d","block_type":"box","text":"including over 19 years at Fidelity Investments, where he served, at different times, as the Chief","page_number":27,"box":{"x":117,"y":211,"width":716,"height":12}},{"id":"78eadc7b-f4ba-45a9-83bb-99dd415680ee","block_type":"box","text":"Auditor and the Chief Accounting Officer of Fidelity Investments’ parent company, FMR LLC. Prior to","page_number":27,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"1a1f0d99-a5db-4a1a-b4a2-e9214c91ae81","block_type":"box","text":"working at Fidelity, Mr. Jarczyk was a partner at Deloitte and Arthur Andersen for approximately","page_number":27,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"a0d4c188-5186-4fcc-88fd-ca0c6de0262d","block_type":"box","text":"seventeen years. These positions have allowed him to work extensively with audit and risk committees","page_number":27,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"1094c508-95f3-4b2e-8ff6-ef32bcef3733","block_type":"box","text":"and company executives helping to identify, manage and mitigate risks for financial services","page_number":27,"box":{"x":116,"y":273,"width":688,"height":12}},{"id":"f1c2765a-7201-4e7c-8fef-615985ed59e6","block_type":"box","text":"companies. Mr. Jarczyk also served as consultant to the Independent Trustees prior to becoming an","page_number":27,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"bb3dc752-8489-4650-9b76-55b2f23e3e9f","block_type":"box","text":"Independent Trustee. Mr. Jarcyzk has been determined by the Audit Committee to be an audit","page_number":27,"box":{"x":117,"y":304,"width":704,"height":12}},{"id":"774a277c-2aa6-4246-9e18-58cd1f1c7e7a","block_type":"box","text":"committee financial expert, as such term is defined in the applicable Commission rules.","page_number":27,"box":{"x":116,"y":320,"width":652,"height":12}},{"id":"fc5b853b-995a-458b-9d2b-7f3db58db198","block_type":"box","text":"Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise","page_number":27,"box":{"x":117,"y":351,"width":766,"height":12}},{"id":"c00fe2ca-c6d4-4eb1-98c2-60f56bbd6bc9","block_type":"box","text":"gained through his 35 year career at KPMG, a global professional services organization and by his","page_number":27,"box":{"x":116,"y":366,"width":737,"height":12}},{"id":"8068a9cd-9f48-4d95-87b5-74a4b0ffdc74","block_type":"box","text":"service as a director to both publicly and privately held organizations. He has extensive experience","page_number":27,"box":{"x":116,"y":382,"width":739,"height":12}},{"id":"9006d4fe-d8fd-4178-abf2-9f9eead46fbb","block_type":"box","text":"with issues facing complex, global companies and expertise in financial reporting, accounting, auditing,","page_number":27,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"59d88cff-12c8-4001-9d39-730da3e6a586","block_type":"box","text":"risk management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes","page_number":27,"box":{"x":117,"y":413,"width":738,"height":12}},{"id":"5673bc17-96a3-4c15-b998-8429850f12af","block_type":"box","text":"service as an audit committee chair to both publicly and privately held organizations across numerous","page_number":27,"box":{"x":116,"y":428,"width":760,"height":12}},{"id":"94a81846-525f-4417-b14c-85a966c698f2","block_type":"box","text":"industries including professional services, property and casualty reinsurance, insurance, diversified","page_number":27,"box":{"x":117,"y":444,"width":739,"height":12}},{"id":"e32e2f37-38a4-4b9c-9009-bad081e51102","block_type":"box","text":"financial services, banking, direct to consumer, business to business and technology. Mr. Keizer is a","page_number":27,"box":{"x":116,"y":459,"width":750,"height":12}},{"id":"d8a56366-bec6-4ec4-a7cc-3e7da208f3ec","block_type":"box","text":"certified public accountant and also served on the board of the American Institute of Certified Public","page_number":27,"box":{"x":116,"y":475,"width":745,"height":12}},{"id":"bb91ca33-ff63-497f-8cd2-99760aa593d6","block_type":"box","text":"Accountants. Mr. Keizer has been determined by the Audit Committee to be an audit committee","page_number":27,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"687936f8-2e15-4f1f-ac96-c33557c71e44","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":27,"box":{"x":116,"y":506,"width":569,"height":12}},{"id":"311fcc54-7ca1-4ccf-a7d0-8596b6b7a865","block_type":"box","text":"Cynthia A. Montgomery has served for over 20 years on the boards of registered investment","page_number":27,"box":{"x":117,"y":537,"width":690,"height":12}},{"id":"e89fb035-ec27-4592-88b1-1c7528153c78","block_type":"box","text":"companies, most recently as a member of the boards of certain BlackRock-advised Funds and","page_number":27,"box":{"x":116,"y":552,"width":707,"height":12}},{"id":"b5f3d3ee-9f25-4d74-975f-80d45555151a","block_type":"box","text":"predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. The","page_number":27,"box":{"x":117,"y":568,"width":759,"height":12}},{"id":"4708fca8-95f4-422f-aa27-d861d814efd8","block_type":"box","text":"Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at","page_number":27,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"0bb9a62c-e79f-4c73-8d31-48190f55966a","block_type":"box","text":"Harvard Business School where she taught courses on corporate strategy and corporate governance.","page_number":27,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"d2ca3fa4-3dee-4b7b-bcb9-160aedc6e98b","block_type":"box","text":"Ms. Montgomery also has business management and corporate governance experience through her","page_number":27,"box":{"x":117,"y":614,"width":749,"height":12}},{"id":"beeee85f-7b1c-4960-8e46-b09f5410f623","block_type":"box","text":"service on the corporate boards of a variety of public companies. She has also authored numerous","page_number":27,"box":{"x":116,"y":630,"width":739,"height":12}},{"id":"156f55d4-882f-41ba-8087-a9773663933e","block_type":"box","text":"articles and books on these topics.","page_number":27,"box":{"x":116,"y":645,"width":263,"height":12}},{"id":"6ae42747-7d24-4756-8195-75eaa1cc2e13","block_type":"box","text":"Donald C. Opatrny has more than 40 years of business, oversight and executive experience, including","page_number":27,"box":{"x":117,"y":676,"width":757,"height":12}},{"id":"8c989429-2520-4e68-9582-4cd168687009","block_type":"box","text":"through his service as president, director and investment committee chair for academic and","page_number":27,"box":{"x":116,"y":692,"width":678,"height":12}},{"id":"d60ad4dd-7e2d-43fe-877e-26aca71f9062","block_type":"box","text":"not-for-profit organizations, and his experience as a partner, managing director and advisory director at","page_number":27,"box":{"x":117,"y":707,"width":764,"height":12}},{"id":"bd4e15f3-ef06-4de8-b339-472215de13f6","block_type":"box","text":"Goldman Sachs for 32 years. He also has investment management experience as a board member of","page_number":27,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"2f0b0b53-9dca-4082-9444-52cddc427ce1","block_type":"box","text":"Athena Capital Advisors LLC.","page_number":27,"box":{"x":116,"y":738,"width":218,"height":12}},{"id":"f8e6aa0d-f79d-4a2f-894e-c68e3f6761cc","block_type":"box","text":"Lori Richards has more than 30 years of experience in the financial services industry, most notably as","page_number":27,"box":{"x":117,"y":769,"width":754,"height":12}},{"id":"ee18a7be-7e72-46ed-92ee-9452057fecb3","block_type":"box","text":"the first Director of the Office of Compliance Inspections and Examinations (“OCIE”) of the Securities","page_number":27,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"9b0d1e58-2cde-40c4-bebf-da7443e3299e","block_type":"box","text":"and Exchange Commission (“SEC”) from 1995 to 2009. During 14 years as the Director of OCIE, she","page_number":27,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"5058ff8f-be5b-46ee-86aa-ae91e073d80f","block_type":"box","text":"led the SEC’s nationwide examination oversight program for advisers, mutual funds, hedge funds,","page_number":27,"box":{"x":117,"y":816,"width":724,"height":12}},{"id":"4a45babe-d0a2-492f-8d3a-4d7de55cf479","block_type":"box","text":"broker-dealers, stock exchanges, and other industry firms. Prior to that, from 1985 to 1995, she held","page_number":27,"box":{"x":117,"y":831,"width":748,"height":12}},{"id":"5b43977d-19ea-4b1a-af6f-7b867c364508","block_type":"box","text":"various roles at the SEC, including Associate Director for Enforcement for the SEC’s Pacific Regional","page_number":27,"box":{"x":116,"y":847,"width":757,"height":12}},{"id":"b098664b-c038-418e-937a-e514c4541a9d","block_type":"box","text":"Office and executive assistant and senior advisor to then SEC Chairman Arthur Levitt. More recently,","page_number":27,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"d9a3c85f-b227-401d-ab05-c1994a5f2deb","block_type":"box","text":"Ms. Richards served as Chief Compliance Officer of the Asset and Wealth Management global lines of","page_number":27,"box":{"x":117,"y":878,"width":765,"height":12}},{"id":"37102f85-209b-4eb1-8d73-b257e3824439","block_type":"box","text":"24","page_number":27,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"fa9a6362-fe8d-4494-984b-49486fde06d0","block_type":"box","text":"NM1026U-6042785-27/259","page_number":27,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2de730ec-72d2-4648-8ef3-94ded97210fe","block_type":"box","text":"business at JPMorgan Chase & Co. from 2013 to 2018 where she led its global compliance program,","page_number":28,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"4cfa8b77-d955-4021-854f-3a2a1f0b4c6e","block_type":"box","text":"advised business leaders on compliance issues, oversaw risk assessment, monitoring, testing and","page_number":28,"box":{"x":116,"y":103,"width":736,"height":12}},{"id":"163b4fab-fd7d-4fcc-a393-3146d9bc19ef","block_type":"box","text":"training, and maintained relationships with regulators. In addition, Ms. Richards served as a member of","page_number":28,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"f3e6db9a-784a-4f06-b24a-4f919e72db82","block_type":"box","text":"the National Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA) from 2019 to","page_number":28,"box":{"x":116,"y":134,"width":758,"height":12}},{"id":"875a1679-97b3-481b-b5dd-e6c7ebdec047","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":28,"box":{"x":116,"y":149,"width":751,"height":12}},{"id":"c79837ae-d46d-4d3d-9013-8258e59e99f1","block_type":"box","text":"was a Principal at PricewaterhouseCoopers LLP (“PwC”) and co-leader of its Asset Management","page_number":28,"box":{"x":116,"y":165,"width":725,"height":12}},{"id":"3aff5b97-c6e7-4310-af0d-48decfeb17d1","block_type":"box","text":"Regulatory group. At PwC, she assisted a broad range of financial services clients in designing and","page_number":28,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"a1b54c41-28ce-43e4-a4b8-04959eb0d5a1","block_type":"box","text":"implementing risk management and compliance programs, and preparing for new regulatory","page_number":28,"box":{"x":117,"y":196,"width":688,"height":12}},{"id":"42fb4ce4-6acb-473f-b95b-c7077cfe2118","block_type":"box","text":"expectations. These positions have provided her with insight and perspective on the markets and the","page_number":28,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"b54544bd-8192-4e74-af93-780272135617","block_type":"box","text":"economy, as well as asset management regulation and compliance. In addition, Ms. Richards serves","page_number":28,"box":{"x":116,"y":227,"width":754,"height":12}},{"id":"867d0c3c-bf91-404f-9523-4564627fa342","block_type":"box","text":"as a member of the Audit Committee and the Compliance Committee.","page_number":28,"box":{"x":116,"y":242,"width":524,"height":12}},{"id":"5163da6c-c100-43be-b3f9-d91d0a103b8c","block_type":"box","text":"Mark Stalnecker has gained a wealth of experience in investing and asset management from his over","page_number":28,"box":{"x":117,"y":274,"width":757,"height":13}},{"id":"6be8cf5a-bd15-4c5f-b5d0-d18b791b1ed4","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":28,"box":{"x":118,"y":290,"width":743,"height":12}},{"id":"3609b8de-c6b5-405d-ab74-454fb2465425","block_type":"box","text":"various positions with First Union Corporation, including Senior Vice President and State Investment","page_number":28,"box":{"x":116,"y":305,"width":749,"height":13}},{"id":"9ee8761e-81a1-4414-a86b-dc799a9582df","block_type":"box","text":"Director of First Investment Advisors. The Board benefits from his experience and perspective as the","page_number":28,"box":{"x":117,"y":321,"width":752,"height":12}},{"id":"d2e04a32-c707-4165-9316-da216d0c928b","block_type":"box","text":"Chief Investment Officer of a university endowment and from the oversight experience he gained from","page_number":28,"box":{"x":117,"y":336,"width":761,"height":13}},{"id":"4034d111-f424-477b-97de-e0b97cd79469","block_type":"box","text":"service on various private and non-profit boards.","page_number":28,"box":{"x":116,"y":352,"width":365,"height":12}},{"id":"2a63bd2b-a77f-4fca-aa6d-2d84679f6d57","block_type":"box","text":"Marc D. Stern has more than 30 years of experience in investing and asset management. Mr. Stern","page_number":28,"box":{"x":117,"y":384,"width":743,"height":12}},{"id":"833941c2-4a1f-49d8-8899-b3f75652e726","block_type":"box","text":"served as the Chief Executive Officer at Bessemer Trust, a wealth management business, for","page_number":28,"box":{"x":116,"y":400,"width":699,"height":12}},{"id":"4aaa87ae-e250-4395-82c2-eefca65795dc","block_type":"box","text":"13 years. During his tenure at Bessemer Trust, Mr. Stern served on the firm’s board of directors,","page_number":28,"box":{"x":118,"y":415,"width":718,"height":12}},{"id":"894ca9ba-5d29-42f8-9b69-17f63b5617bc","block_type":"box","text":"chaired the board’s trust and investment committee, and led the firm’s executive committee. He also","page_number":28,"box":{"x":116,"y":431,"width":749,"height":11}},{"id":"1a111ca0-3f85-49f3-8681-41868905d1c8","block_type":"box","text":"served as Bessemer’s Chief Investment Officer for 8 years, where he was Chair of the Investment","page_number":28,"box":{"x":116,"y":446,"width":732,"height":12}},{"id":"4617db21-a827-494f-a281-f07b481a6b28","block_type":"box","text":"Policy and Strategy Committee with responsibility for overall asset allocation and investment strategy.","page_number":28,"box":{"x":117,"y":462,"width":758,"height":12}},{"id":"e64429aa-4fff-4094-b7b8-9761fc4cd00f","block_type":"box","text":"Mr. Stern also served as Chair of the Private Clients Investment group at AllianceBernstein. These","page_number":28,"box":{"x":117,"y":477,"width":735,"height":12}},{"id":"82699a9c-2946-4b20-aba8-6aacc3fe2357","block_type":"box","text":"positions provide Mr. Stern with insight and perspective into investment management, the economy,","page_number":28,"box":{"x":117,"y":493,"width":746,"height":12}},{"id":"fe37ded8-d172-4a45-b010-c1486e5a20ed","block_type":"box","text":"and fiduciary governance. Mr. Stern also served as consultant to the Independent Trustees prior to","page_number":28,"box":{"x":116,"y":508,"width":738,"height":12}},{"id":"a3ab9935-6fdb-406c-8560-55ac9a7f1085","block_type":"box","text":"becoming an Independent Trustee.","page_number":28,"box":{"x":117,"y":524,"width":264,"height":12}},{"id":"27b7b697-6c72-421e-bc08-7c8ef470530c","block_type":"box","text":"Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most","page_number":28,"box":{"x":117,"y":556,"width":771,"height":12}},{"id":"f9840c1d-2050-4dd6-aefd-8ca0f528fd02","block_type":"box","text":"recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds,","page_number":28,"box":{"x":117,"y":572,"width":722,"height":12}},{"id":"e60d7594-3587-4107-98d3-5f5b5d173b9c","block_type":"box","text":"including the legacy BlackRock funds. He has over 30 years of experience in public accounting.","page_number":28,"box":{"x":117,"y":587,"width":713,"height":12}},{"id":"198262bd-c558-4ede-9f39-c7d7142fa58c","block_type":"box","text":"Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been","page_number":28,"box":{"x":117,"y":603,"width":766,"height":12}},{"id":"acc0303f-6968-4cdf-8f4c-a989db30579b","block_type":"box","text":"determined by the Audit Committee to be an audit committee financial expert, as such term is defined","page_number":28,"box":{"x":116,"y":618,"width":758,"height":12}},{"id":"8d05b8c7-a10c-4576-8d82-a9fdbc4167b4","block_type":"box","text":"in the applicable Commission rules.","page_number":28,"box":{"x":117,"y":634,"width":268,"height":12}},{"id":"29dc625f-ce69-449f-93a1-86939c6bb4f3","block_type":"box","text":"Claire A. Walton has over 25 years of experience in investment management. She has served as the","page_number":28,"box":{"x":117,"y":666,"width":748,"height":12}},{"id":"be3f1ef8-e4ed-4b30-8bee-a25100706444","block_type":"box","text":"Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP/ Steel","page_number":28,"box":{"x":117,"y":682,"width":733,"height":12}},{"id":"00f32e84-09f5-412c-b7c3-fd1476097831","block_type":"box","text":"Partners Japan Asset Management, LP from 1998 to 2015, an investment manager that specialized in","page_number":28,"box":{"x":117,"y":697,"width":757,"height":12}},{"id":"4ba0da5b-7bc3-4c1c-aecf-1070bff47a25","block_type":"box","text":"long/short non-U.S. equity investments, and was an owner and General Partner of Neon Liberty","page_number":28,"box":{"x":117,"y":713,"width":710,"height":12}},{"id":"b797de0f-cd43-4ee2-ab07-4775c8ba250c","block_type":"box","text":"Capital Management, LLC from 2003 to 2023, a firm focusing on long/short equities in global emerging","page_number":28,"box":{"x":117,"y":728,"width":760,"height":12}},{"id":"f1208f4d-7f33-4e4e-9475-7e32558d15ff","block_type":"box","text":"and frontier markets. These positions have provided her with insight and perspective on the markets","page_number":28,"box":{"x":116,"y":744,"width":743,"height":12}},{"id":"dc2e8045-c71f-479e-bce3-0710b7c27f62","block_type":"box","text":"and the economy. Ms. Walton has been determined by the Audit Committee to be an audit committee","page_number":28,"box":{"x":116,"y":759,"width":754,"height":12}},{"id":"64fec8f2-0899-4dac-8fd4-9be5d78fdc76","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":28,"box":{"x":116,"y":775,"width":563,"height":12}},{"id":"8f2b4eab-2e85-429f-ad28-f0e2fbdc771b","block_type":"box","text":"Board – Leadership Structure and Oversight Responsibilities","page_number":28,"box":{"x":117,"y":807,"width":449,"height":12}},{"id":"1bbacc7a-977b-4853-899a-b92d615ad396","block_type":"box","text":"The Board has overall responsibility for the oversight of the Trust and the Fund. The Chair of the Board","page_number":28,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"ebf8c46f-4754-4869-9377-1b5236b414bb","block_type":"box","text":"is an Independent Trustee, and the Chair of each Committee is an Independent Trustee. The Board","page_number":28,"box":{"x":117,"y":846,"width":744,"height":12}},{"id":"7899901f-28da-46a5-8328-159c9bd997d9","block_type":"box","text":"has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a","page_number":28,"box":{"x":117,"y":862,"width":724,"height":12}},{"id":"25b1bb7e-575f-42df-9102-7f4e5f9c7d5c","block_type":"box","text":"Compliance Committee, a Performance Oversight Committee and an Ad Hoc Topics Committee. The","page_number":28,"box":{"x":117,"y":877,"width":756,"height":12}},{"id":"de9fe8c5-b03a-480e-a194-b2f620f1ae01","block_type":"box","text":"25","page_number":28,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"acda4f40-9831-4bba-9498-c35698051797","block_type":"box","text":"NM1026U-6042785-28/259","page_number":28,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ede789c4-5d6e-4ff2-abe5-185962484213","block_type":"box","text":"role of the Chair of the Board is to preside at all meetings of the Board and to act as a liaison with","page_number":29,"box":{"x":117,"y":87,"width":727,"height":12}},{"id":"3690d3a7-498c-4cbf-9472-02c2e1758d77","block_type":"box","text":"service providers, officers, attorneys and other Trustees generally between meetings. The Chair of","page_number":29,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"7a60c99e-48ca-4d86-aa09-1277a30e44ba","block_type":"box","text":"each Committee performs a similar role with respect to the Committee. The Chair of the Board or the","page_number":29,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"885fc25c-561a-4c7a-ba6c-c828ecd300a2","block_type":"box","text":"Chair of a Committee may also perform such other functions as may be delegated by the Board or the","page_number":29,"box":{"x":117,"y":134,"width":762,"height":12}},{"id":"1b8f3862-52b7-4478-b5cd-200ce712834c","block_type":"box","text":"Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund","page_number":29,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"efe51d09-03f7-407f-91d4-e294464b5693","block_type":"box","text":"management, in executive session or with other service providers to the Fund. The Board has regular","page_number":29,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"a8b0e400-3c12-47e7-8e97-cdf2cf45eab7","block_type":"box","text":"meetings five times a year, and may hold special meetings if required before its next regular meeting.","page_number":29,"box":{"x":117,"y":180,"width":756,"height":12}},{"id":"7cc19369-1bb4-4708-a510-55fa7fef647b","block_type":"box","text":"Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the","page_number":29,"box":{"x":117,"y":196,"width":770,"height":12}},{"id":"d265bec1-b51e-486f-b3b0-15a502a56ed7","block_type":"box","text":"Board and reports its findings to the Board. The Board and each standing Committee conduct annual","page_number":29,"box":{"x":117,"y":211,"width":754,"height":12}},{"id":"93dd1b07-b59d-4156-8894-cef01bc3373e","block_type":"box","text":"assessments of their oversight function and structure. The Board has determined that the Board’s","page_number":29,"box":{"x":116,"y":227,"width":730,"height":12}},{"id":"bb22bf82-eec8-4990-82b9-f0f4c2d03d4d","block_type":"box","text":"leadership structure is appropriate because it allows the Board to exercise independent judgment over","page_number":29,"box":{"x":117,"y":242,"width":763,"height":12}},{"id":"7412794b-f6ce-4f85-8878-9ebe25ef1d86","block_type":"box","text":"management and to allocate areas of responsibility among Committees and the full Board to enhance","page_number":29,"box":{"x":117,"y":258,"width":758,"height":12}},{"id":"d92abac2-da5c-4af5-bd2e-6552edbdda7a","block_type":"box","text":"effective oversight.","page_number":29,"box":{"x":116,"y":273,"width":145,"height":12}},{"id":"2b9389ea-825c-4902-b1c1-dc998d9b77a5","block_type":"box","text":"The Board has engaged BFA to manage the Fund on a day-to-day basis. The Board is responsible for","page_number":29,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"ddac48ba-0d64-4ff3-83c7-05e86474ec64","block_type":"box","text":"overseeing BFA, other service providers, the operations of the Fund and associated risks in","page_number":29,"box":{"x":116,"y":320,"width":685,"height":12}},{"id":"ce887f34-7292-48d7-83b1-418649edf7f6","block_type":"box","text":"accordance with the provisions of the 1940 Act, state law, other applicable laws, the Trust’s charter,","page_number":29,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"1ecb27df-7ba0-4fe0-b740-8a318673237f","block_type":"box","text":"and the Fund’s investment objective and strategies. The Board reviews, on an ongoing basis, the","page_number":29,"box":{"x":116,"y":351,"width":726,"height":12}},{"id":"ce6d49c1-b91c-4f0e-9f24-8c043146338e","block_type":"box","text":"Fund’s performance, operations and investment strategies and techniques. The Board also conducts","page_number":29,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"53adc234-1cae-4913-b0d6-9e58a485ea2c","block_type":"box","text":"reviews of BFA and its role in running the operations of the Fund.","page_number":29,"box":{"x":117,"y":382,"width":488,"height":12}},{"id":"ca0decf6-5c73-44d7-af15-d87f14ebd95e","block_type":"box","text":"Day-to-day risk management with respect to the Fund is the responsibility of BFA or of sub-advisers or","page_number":29,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"a4f35430-ee8f-449f-839a-3e3a0741a78c","block_type":"box","text":"other service providers (depending on the nature of the risk), subject to the supervision of BFA. The","page_number":29,"box":{"x":116,"y":428,"width":745,"height":12}},{"id":"233c66a6-30a2-417e-aaea-d3876fe777a6","block_type":"box","text":"Fund is subject to a number of risks, including investment, compliance, operational and valuation risks,","page_number":29,"box":{"x":117,"y":444,"width":767,"height":12}},{"id":"73db79be-5ddd-4f20-a701-b20751045c0a","block_type":"box","text":"among others. While there are a number of risk management functions performed by BFA and the","page_number":29,"box":{"x":116,"y":459,"width":734,"height":12}},{"id":"363b5e2b-82f7-4795-bac9-541fe4330021","block_type":"box","text":"sub-advisers or other service providers, as applicable, it is not possible to eliminate all of the risks","page_number":29,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"cf1512c7-d53c-473b-9c16-5f9bc3e7c7ee","block_type":"box","text":"applicable to the Fund. Risk oversight forms part of the Board’s general oversight of the Fund and is","page_number":29,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"0bc51c0e-4abc-4006-bace-5522ddc69c60","block_type":"box","text":"addressed as part of various Board and Committee activities. The Board, directly or through a","page_number":29,"box":{"x":116,"y":506,"width":701,"height":12}},{"id":"fc9d4783-a22b-4835-8364-2b6f9252db9c","block_type":"box","text":"Committee, also reviews reports from, among others, management, the independent registered public","page_number":29,"box":{"x":117,"y":521,"width":761,"height":12}},{"id":"dd603ff3-7cc4-4831-a853-376c95a11d2b","block_type":"box","text":"accounting firm for the Fund, sub-advisers and internal auditors for BFA or its affiliates, as appropriate,","page_number":29,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"5aa15e75-0279-451c-b440-5d915f0ed26a","block_type":"box","text":"regarding risks faced by the Fund and management’s or the service provider’s risk functions. The","page_number":29,"box":{"x":117,"y":552,"width":726,"height":12}},{"id":"b3ef37f2-d786-45c5-8604-e71e49f4f09c","block_type":"box","text":"Committee system facilitates the timely and efficient consideration of matters by the Trustees, and","page_number":29,"box":{"x":117,"y":568,"width":733,"height":12}},{"id":"d5bcdd7e-2b25-44b0-b831-74e8ded39f38","block_type":"box","text":"facilitates effective oversight of compliance with legal and regulatory requirements and of the Fund’s","page_number":29,"box":{"x":116,"y":583,"width":748,"height":12}},{"id":"f9dfbaaa-274f-4d9c-944a-e3e8f4f5c246","block_type":"box","text":"activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the","page_number":29,"box":{"x":116,"y":599,"width":771,"height":12}},{"id":"c4369b2a-cca7-4613-91ac-b247349e3cc1","block_type":"box","text":"implementation and testing of the Trust’s compliance program and reports to the Board regarding","page_number":29,"box":{"x":117,"y":614,"width":726,"height":12}},{"id":"b6579767-66c1-456c-9c50-54e5062ee03d","block_type":"box","text":"compliance matters for the Fund and its service providers. The Independent Trustees have engaged","page_number":29,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"656acb21-a2b2-4dcc-814b-db4900a7d727","block_type":"box","text":"independent legal counsel to assist them in performing their oversight responsibilities.","page_number":29,"box":{"x":117,"y":645,"width":640,"height":12}},{"id":"fb24ce29-4a28-48c2-892a-abc2943a3eb3","block_type":"box","text":"Committees of the Board of Trustees.","page_number":29,"box":{"x":116,"y":676,"width":299,"height":10}},{"id":"4c3a54f0-e089-4414-8a73-b795019ab64e","block_type":"box","text":"The members of the Audit Committee (the “Audit Committee”)","page_number":29,"box":{"x":421,"y":676,"width":458,"height":12}},{"id":"741b2264-1016-4baa-a5fe-5e24c13438de","block_type":"box","text":"are Henry R. Keizer (Chair), Neil A. Cotty, Jeffrey Jarczyk, Lori Richards, Kenneth L. Urish and Claire","page_number":29,"box":{"x":116,"y":692,"width":753,"height":12}},{"id":"1a2b110f-af9d-46f7-87ca-bd64ea443c44","block_type":"box","text":"A. Walton, all of whom are Independent Trustees. The principal responsibilities of the Audit Committee","page_number":29,"box":{"x":116,"y":707,"width":761,"height":12}},{"id":"dd7e87d6-b704-42b9-8617-fa27c0d016bf","block_type":"box","text":"are to approve, and recommend to the full Board for approval, the selection, retention, termination and","page_number":29,"box":{"x":116,"y":723,"width":759,"height":12}},{"id":"f58843b5-1dda-4109-bfdc-ca0efc6f5221","block_type":"box","text":"compensation of the Fund’s independent registered public accounting firm (the “Independent","page_number":29,"box":{"x":116,"y":738,"width":688,"height":12}},{"id":"bd9a9a17-bcb6-4a1b-859d-840c2e2fa2bf","block_type":"box","text":"Registered Public Accounting Firm”) and to oversee the Independent Registered Public Accounting","page_number":29,"box":{"x":117,"y":754,"width":734,"height":12}},{"id":"3f26340f-ad40-4e62-9803-74f645e429f2","block_type":"box","text":"Firm’s work. The Audit Committee’s responsibilities include, without limitation, to (1) evaluate the","page_number":29,"box":{"x":117,"y":769,"width":716,"height":12}},{"id":"63b4e2a4-bc83-44ce-87c3-99af7c375287","block_type":"box","text":"qualifications and independence of the Independent Registered Public Accounting Firm; (2) approve all","page_number":29,"box":{"x":116,"y":785,"width":764,"height":12}},{"id":"2e886e82-bf2f-4bee-8952-cfc49068069d","block_type":"box","text":"audit engagement terms and fees for the Fund; (3) review the conduct and results of each independent","page_number":29,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"407c0c49-4584-4f8f-b263-6220b2ddefb3","block_type":"box","text":"audit of the Fund’s annual financial statements; (4) review any issues raised by the Independent","page_number":29,"box":{"x":116,"y":816,"width":714,"height":12}},{"id":"9770f64d-bb54-47b0-804b-b74e947c5748","block_type":"box","text":"Registered Public Accounting Firm or Fund management regarding the accounting or financial","page_number":29,"box":{"x":117,"y":831,"width":703,"height":12}},{"id":"6e70ec64-7ddb-4b13-8ec1-1a302de84922","block_type":"box","text":"reporting policies and practices of the Fund and the internal controls of the Fund and certain service","page_number":29,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"da6495bc-dff1-4f91-be2e-c61f412c864a","block_type":"box","text":"providers; (5) oversee the performance of the Fund’s Independent Registered Public Accounting Firm;","page_number":29,"box":{"x":117,"y":862,"width":762,"height":12}},{"id":"8a202c19-0e0a-42ae-828f-ae19c3655d05","block_type":"box","text":"(6) review and discuss with management and the Fund’s Independent Registered Public Accounting","page_number":29,"box":{"x":117,"y":878,"width":747,"height":12}},{"id":"c4402aef-1615-448b-9760-27352af57bb8","block_type":"box","text":"26","page_number":29,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d7d07ba0-3f85-49e8-ae3f-68449e8eca84","block_type":"box","text":"NM1026U-6042785-29/259","page_number":29,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"bd5c8157-4307-4e8c-859d-e29490c53122","block_type":"box","text":"Firm the performance and findings of the Fund’s internal auditors; (7) discuss with Fund management","page_number":30,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"8923eb48-f8d4-4eb5-8fad-95eda93e6513","block_type":"box","text":"its policies regarding risk assessment and risk management as such matters relate to the Fund’s","page_number":30,"box":{"x":117,"y":103,"width":721,"height":12}},{"id":"d2fe82ac-0f01-443d-8870-cf0a3af6cae2","block_type":"box","text":"financial reporting and controls; (8) resolve any disagreements between Fund management and the","page_number":30,"box":{"x":116,"y":118,"width":744,"height":12}},{"id":"6d57cab6-ac8f-4e6c-a409-c51acae7f799","block_type":"box","text":"Independent Registered Public Accounting Firm regarding financial reporting; and (9) undertake such","page_number":30,"box":{"x":117,"y":134,"width":755,"height":12}},{"id":"f9c21002-2d80-4a03-828c-0e6baa1f8bd0","block_type":"box","text":"other duties and responsibilities as may from time to time be delegated by the Board to the Audit","page_number":30,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"be2e8381-a43f-4612-bdf1-bece80ed528c","block_type":"box","text":"Committee. The Board has adopted a written charter for the Audit Committee. During the twelve","page_number":30,"box":{"x":117,"y":165,"width":717,"height":12}},{"id":"56483ec5-15c7-49a3-a18a-a57acaacaef8","block_type":"box","text":"months ended April 30, 2026, the Audit Committee met four times.","page_number":30,"box":{"x":117,"y":180,"width":497,"height":12}},{"id":"3ada63a3-2220-4931-b515-24c0c0da8837","block_type":"box","text":"The members of the Governance and Nominating Committee (the “Governance Committee”) are","page_number":30,"box":{"x":116,"y":211,"width":722,"height":12}},{"id":"4f15f8b5-09d3-465b-878f-17379d6ccd4b","block_type":"box","text":"Cynthia A. Montgomery (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Henry R.","page_number":30,"box":{"x":117,"y":227,"width":731,"height":12}},{"id":"748562c5-d362-4ea3-9ec9-dbd73c38d061","block_type":"box","text":"Keizer, and Marc D. Stern, all of whom are Independent Trustees. The principal responsibilities of the","page_number":30,"box":{"x":117,"y":242,"width":757,"height":12}},{"id":"c7ae4115-dcf9-4850-90b2-f8ea61de9e83","block_type":"box","text":"Governance Committee are to (1) identify individuals qualified to serve as Independent Trustees of the","page_number":30,"box":{"x":117,"y":258,"width":765,"height":12}},{"id":"cc480697-81a5-4ec0-b59b-32d5fbfb59f7","block_type":"box","text":"Trust and recommend Independent Trustee nominees for election by shareholders or appointment by","page_number":30,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"38952093-ba66-4d61-a12c-18f397136fa5","block_type":"box","text":"the Board; (2) advise the Board with respect to Board composition, procedures and committees (other","page_number":30,"box":{"x":116,"y":289,"width":762,"height":12}},{"id":"c8969bfd-b16c-4118-bf7e-6720feb798cc","block_type":"box","text":"than the Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the","page_number":30,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"7518ca8f-d787-43f5-b676-550afb90f002","block_type":"box","text":"Board (other than the Audit Committee); (4) review and make recommendations regarding","page_number":30,"box":{"x":117,"y":320,"width":674,"height":12}},{"id":"f3875db7-8fad-47eb-8f32-460d28699899","block_type":"box","text":"Independent Trustee compensation; (5) monitor corporate governance matters and develop","page_number":30,"box":{"x":117,"y":335,"width":685,"height":12}},{"id":"79126066-03f5-44d9-97df-572cc53c2912","block_type":"box","text":"appropriate recommendations to the Board; (6) act as the administrative committee with respect to","page_number":30,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"ffc380a5-b447-4585-bd5e-1bdf2b727ad5","block_type":"box","text":"Board policies and procedures, committee policies and procedures (other than the Audit Committee)","page_number":30,"box":{"x":117,"y":366,"width":749,"height":12}},{"id":"e7fd1a4c-585c-4cb9-9c2c-dca7f78ba377","block_type":"box","text":"and codes of ethics as they relate to Independent Trustees; and (7) undertake such other duties and","page_number":30,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"e804624d-6077-4008-b27c-3e1b28581e01","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Governance Committee.","page_number":30,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"d3e20263-c1dd-4ea2-baeb-2ab53bf027ac","block_type":"box","text":"The Governance Committee may consider nominations for Trustees made by the Fund’s shareholders","page_number":30,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"b3f9ec67-7e39-483d-9823-f9e042fa2528","block_type":"box","text":"as it deems appropriate. Under the Trust’s Bylaws, shareholders must follow certain procedures to","page_number":30,"box":{"x":116,"y":428,"width":735,"height":12}},{"id":"b508e656-a7f0-486b-916c-1eb3da720357","block_type":"box","text":"nominate a person for election as a Trustee at a shareholder meeting at which Trustees are to be","page_number":30,"box":{"x":117,"y":444,"width":727,"height":12}},{"id":"d1be1c94-16b7-4fa2-9cf4-fe1aca3b7bc0","block_type":"box","text":"elected. Under these advance notice procedures, shareholders must submit the proposed nominee by","page_number":30,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"c5712327-d9a2-4651-adaa-b72ed20cdde5","block_type":"box","text":"delivering a notice to the Secretary of the Trust at its principal executive offices no earlier than the","page_number":30,"box":{"x":116,"y":475,"width":731,"height":12}},{"id":"603c8bc5-4a1a-4519-b517-fca32447f3eb","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","page_number":30,"box":{"x":118,"y":490,"width":699,"height":12}},{"id":"404d8668-4ad2-404c-b452-c27867a968b5","block_type":"box","text":"120th day prior to such meeting or the tenth day following the day on which public announcement is","page_number":30,"box":{"x":118,"y":506,"width":742,"height":12}},{"id":"c8aec79e-19e2-43a3-893f-c84b06f28e19","block_type":"box","text":"first made of the date of such meeting. The Trust’s Bylaws provide that notice of a proposed","page_number":30,"box":{"x":116,"y":521,"width":688,"height":12}},{"id":"451d377e-7961-42db-976d-8f78de4bbb9d","block_type":"box","text":"nomination must include certain information about the shareholder and the nominee, as well as certain","page_number":30,"box":{"x":117,"y":537,"width":765,"height":11}},{"id":"d8276496-d4a0-4979-8796-d2ac8f688402","block_type":"box","text":"other information, including a written consent of the proposed nominee to serve if elected. Reference is","page_number":30,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"9743f6b7-0a3b-4e5a-ac8d-fd0ea5ed6349","block_type":"box","text":"made to the Trust’s Bylaws for more details. The Board has adopted a written charter for the","page_number":30,"box":{"x":117,"y":568,"width":690,"height":12}},{"id":"f52d2d7c-48f2-4aec-8876-40324150e301","block_type":"box","text":"Governance Committee. During the twelve months ended April 30, 2026, the Governance Committee","page_number":30,"box":{"x":117,"y":583,"width":756,"height":12}},{"id":"22d71c0e-93df-406e-87e7-ff4cc7aab172","block_type":"box","text":"met eleven times.","page_number":30,"box":{"x":117,"y":599,"width":135,"height":9}},{"id":"0eb8d4fa-4014-4662-a3aa-2814d25de8d7","block_type":"box","text":"The members of the Compliance Committee (the “Compliance Committee”) are Claire A. Walton","page_number":30,"box":{"x":116,"y":630,"width":720,"height":12}},{"id":"cf44514b-a3c6-4864-a050-797fb982d4fa","block_type":"box","text":"(Chair), Jeffrey Jarczyk, Cynthia A. Montgomery, Donald C. Opatrny, Lori Richards and Kenneth","page_number":30,"box":{"x":117,"y":645,"width":719,"height":12}},{"id":"d42f24aa-cb88-4b07-b986-83e3db499898","block_type":"box","text":"L. Urish, all of whom are Independent Trustees. The Compliance Committee’s purpose is to assist the","page_number":30,"box":{"x":117,"y":661,"width":755,"height":12}},{"id":"9929d146-0867-43a0-b76b-cea060bc6465","block_type":"box","text":"Board in fulfilling its responsibility to oversee regulatory and fiduciary compliance matters involving the","page_number":30,"box":{"x":117,"y":676,"width":757,"height":12}},{"id":"864c1e9f-84d1-43e7-986c-f4aa7520c9fa","block_type":"box","text":"Trust, the fund-related activities of BFA and any sub-adviser and the Trust’s third-party service","page_number":30,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"737bf8a4-83b8-41de-a18a-47d5fef76e4c","block_type":"box","text":"providers. The Compliance Committee’s responsibilities include, without limitation, to (1) oversee the","page_number":30,"box":{"x":117,"y":707,"width":745,"height":12}},{"id":"df971625-28a7-454b-b67e-7fad24bde599","block_type":"box","text":"compliance policies and procedures of the Trust and its service providers and recommend changes or","page_number":30,"box":{"x":116,"y":723,"width":758,"height":12}},{"id":"fa883a0e-fd5c-4989-94a8-700771338b7b","block_type":"box","text":"additions to such policies and procedures; (2) review information on and, where appropriate,","page_number":30,"box":{"x":116,"y":738,"width":684,"height":12}},{"id":"cc04f090-3006-4d64-beb9-4e4645f7eca1","block_type":"box","text":"recommend policies concerning the Trust’s compliance with applicable law; (3) review reports from,","page_number":30,"box":{"x":117,"y":754,"width":735,"height":12}},{"id":"6097d6ed-4051-41f6-8378-a5ba3e801aae","block_type":"box","text":"oversee the annual performance review of, and make certain recommendations and determinations","page_number":30,"box":{"x":116,"y":769,"width":738,"height":12}},{"id":"6656543e-5c6a-4aef-aefb-b21c56b3876f","block_type":"box","text":"regarding the Trust’s Chief Compliance Officer (the “CCO”), including determining the amount and","page_number":30,"box":{"x":117,"y":785,"width":726,"height":12}},{"id":"6587947f-cef7-4904-a74e-5e5746ef2b6f","block_type":"box","text":"structure of the CCO’s compensation and recommending such amount and structure to the full Board","page_number":30,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"3c370981-f6b2-4994-891a-6a5f371e8a8a","block_type":"box","text":"for approval and ratification; and (4) undertake such other duties and responsibilities as may from time","page_number":30,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"5c955181-34c1-4f05-b87a-b67835ecaf46","block_type":"box","text":"to time be delegated by the Board to the Compliance Committee. The Board has adopted a written","page_number":30,"box":{"x":116,"y":831,"width":737,"height":12}},{"id":"a4fe0bff-17fa-4410-a0ef-607ca9ed10e4","block_type":"box","text":"charter for the Compliance Committee. During the twelve months ended April 30, 2026, the","page_number":30,"box":{"x":116,"y":847,"width":681,"height":12}},{"id":"61122a91-0267-4059-8c8f-ba203f671eb8","block_type":"box","text":"Compliance Committee met four times.","page_number":30,"box":{"x":117,"y":862,"width":294,"height":12}},{"id":"64fd01c6-cb08-4d27-ac11-199d7c126128","block_type":"box","text":"27","page_number":30,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"3921d493-fce6-49a2-868b-99c47d2a9c63","block_type":"box","text":"NM1026U-6042785-30/259","page_number":30,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"476b6d92-d618-4b24-8ea1-d11e28604ec7","block_type":"box","text":"The members of the Performance Oversight Committee (the “Performance Oversight Committee”) are","page_number":31,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"94361935-fae0-462e-b6b3-9a5354b09a16","block_type":"box","text":"Donald C. Opatrny (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton, Neil A. Cotty, and","page_number":31,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"5914fe70-eee8-4e9e-97b8-3d211e20784a","block_type":"box","text":"Marc D. Stern, all of whom are Independent Trustees. The Performance Oversight Committee’s","page_number":31,"box":{"x":117,"y":118,"width":714,"height":12}},{"id":"f99924ce-0ffe-4c46-9da4-cf5d14ae9112","block_type":"box","text":"purpose is to assist the Board in fulfilling its responsibility to oversee the Fund’s investment","page_number":31,"box":{"x":117,"y":134,"width":680,"height":12}},{"id":"59d03a58-1b25-462d-9148-99cb45bf8e27","block_type":"box","text":"performance relative to its agreed-upon performance objectives and to assist the Independent","page_number":31,"box":{"x":117,"y":149,"width":702,"height":12}},{"id":"d12e1569-7e9e-4819-a04c-4265c34c92d7","block_type":"box","text":"Trustees in their consideration of investment advisory agreements. The Performance Oversight","page_number":31,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"3920ae57-f819-47b9-b076-5fc159c68b13","block_type":"box","text":"Committee’s responsibilities include, without limitation, to (1) review information on, and make","page_number":31,"box":{"x":117,"y":180,"width":700,"height":12}},{"id":"966c1828-0b0d-46f5-a46e-56615f2611ea","block_type":"box","text":"recommendations to the full Board in respect of, the Fund’s investment objective, policies and","page_number":31,"box":{"x":117,"y":196,"width":700,"height":12}},{"id":"0a1877f5-a585-40b0-9a7e-22c3d36161a8","block_type":"box","text":"practices; (2) review information on the Fund’s investment performance; (3) review information on","page_number":31,"box":{"x":117,"y":211,"width":729,"height":12}},{"id":"c9d3b8a8-3bc5-406a-b0e1-196b4f049c73","block_type":"box","text":"appropriate benchmarks and competitive universes and unusual or exceptional investment matters;","page_number":31,"box":{"x":116,"y":227,"width":742,"height":11}},{"id":"9bc784e2-7941-42a9-a31e-5dd440a27a59","block_type":"box","text":"(4) review personnel and other resources devoted to management of the Fund and evaluate the nature","page_number":31,"box":{"x":117,"y":242,"width":768,"height":12}},{"id":"eb21e19f-8637-40a1-8867-8306273c20ec","block_type":"box","text":"and quality of information furnished to the Performance Oversight Committee; (5) recommend any","page_number":31,"box":{"x":116,"y":258,"width":733,"height":12}},{"id":"2054e4bf-e5fb-46d8-a49e-112bfae0925c","block_type":"box","text":"required action regarding changes in fundamental and non-fundamental investment policies and","page_number":31,"box":{"x":117,"y":273,"width":717,"height":12}},{"id":"67489a03-a80a-4a26-a7fc-70dc4c7443de","block_type":"box","text":"restrictions, fund mergers or liquidations; (6) request and review information on the nature, extent and","page_number":31,"box":{"x":117,"y":289,"width":759,"height":12}},{"id":"023bfcde-43c0-40b5-a6c2-bef678e1a5c8","block_type":"box","text":"quality of services provided to the shareholders; (7) make recommendations to the Board concerning","page_number":31,"box":{"x":116,"y":304,"width":754,"height":12}},{"id":"79367706-41b9-46e2-b8fb-560a54f0949b","block_type":"box","text":"the approval or renewal of investment advisory agreements; and (8) undertake such other duties and","page_number":31,"box":{"x":116,"y":320,"width":754,"height":12}},{"id":"97e76a84-befe-4a4b-9391-f2aafd465415","block_type":"box","text":"responsibilities as may from time to time be delegated by the Board to the Performance Oversight","page_number":31,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"40fab957-d22b-4e14-9ef5-b1e7182e1a89","block_type":"box","text":"Committee. The Board has adopted a written charter for the Performance Oversight Committee. During","page_number":31,"box":{"x":117,"y":351,"width":771,"height":12}},{"id":"a1ced852-77aa-452f-8042-b67553172bc5","block_type":"box","text":"the twelve months ended April 30, 2026, the Performance Oversight Committee met five times.","page_number":31,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"68a7d699-a9a3-42e9-b6c7-6413a0051c29","block_type":"box","text":"The members of the Ad Hoc Topics Committee (the “Ad Hoc Topics Committee”) are Mark Stalnecker","page_number":31,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"a872262d-9e45-41df-abd6-a7339ccab2df","block_type":"box","text":"(Chair) and Claire A. Walton, both of whom are Independent Trustees, and John M. Perlowski, who","page_number":31,"box":{"x":117,"y":413,"width":741,"height":12}},{"id":"779d6550-cf92-41ea-a409-63b7bc3683d4","block_type":"box","text":"serves as an interested Trustee. The principal responsibilities of the Ad Hoc Topics Committee are to","page_number":31,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"c9390376-9a68-4015-ab44-96abd5a31bc8","block_type":"box","text":"(1) act on routine matters between meetings of the Board; (2) act on such matters as may require","page_number":31,"box":{"x":117,"y":444,"width":727,"height":12}},{"id":"5c978bf1-019c-4323-b8e0-2ba45563982e","block_type":"box","text":"urgent action between meetings of the Board; and (3) exercise such other authority as may from time","page_number":31,"box":{"x":117,"y":459,"width":755,"height":12}},{"id":"28882cd8-60a0-46b5-ad30-3920707848bf","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":31,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"438866b8-77e9-49f1-a0eb-6684772eef3a","block_type":"box","text":"charter for the Ad Hoc Topics Committee. During the twelve months ended April 30, 2026, the Ad Hoc","page_number":31,"box":{"x":116,"y":490,"width":761,"height":12}},{"id":"905ed55d-e53c-43f9-82c1-884dd81e9e1c","block_type":"box","text":"Topics Committee did not meet.","page_number":31,"box":{"x":116,"y":506,"width":242,"height":12}},{"id":"82320b13-0b5a-4d0e-a158-4853265fae5b","block_type":"box","text":"The Governance Committee has adopted a statement of policy that describes the experience,","page_number":31,"box":{"x":116,"y":537,"width":702,"height":12}},{"id":"7c8ae222-3db6-46d7-be51-1d25291d7c18","block_type":"box","text":"qualifications, skills and attributes that are necessary and desirable for potential Independent Trustee","page_number":31,"box":{"x":116,"y":552,"width":756,"height":12}},{"id":"b4de4e73-ae1d-44f2-bef7-6f40156099f7","block_type":"box","text":"candidates (the “Statement of Policy”). The Board believes that each Independent Trustee satisfied, at","page_number":31,"box":{"x":116,"y":568,"width":764,"height":12}},{"id":"0e1efb47-aea7-428c-bec5-c9f91c76d1cf","block_type":"box","text":"the time he or she was initially elected or appointed a Trustee, and continues to satisfy, the standards","page_number":31,"box":{"x":116,"y":583,"width":759,"height":12}},{"id":"3511a8d1-5bd8-4e35-bd49-9fedd9c454b0","block_type":"box","text":"contemplated by the Statement of Policy. Furthermore, in determining that a particular Independent","page_number":31,"box":{"x":116,"y":599,"width":742,"height":12}},{"id":"6005e7e4-3dc2-453a-9377-8005aff17c09","block_type":"box","text":"Trustee was and continues to be qualified to serve as a Trustee, the Board has considered a variety of","page_number":31,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"9cfb65ed-d0c5-4bfa-aea6-facca32a7796","block_type":"box","text":"criteria, none of which, in isolation, was controlling. The Board believes that, collectively, the","page_number":31,"box":{"x":116,"y":630,"width":688,"height":12}},{"id":"206190d3-3703-4517-896b-05c3a700ac28","block_type":"box","text":"Independent Trustees have balanced and diverse experience, skills, attributes and qualifications,","page_number":31,"box":{"x":117,"y":645,"width":724,"height":12}},{"id":"87510d18-01e1-4787-9cee-fda95fb0f441","block_type":"box","text":"which allow the Board to operate effectively in governing the Trust and protecting the interests of","page_number":31,"box":{"x":116,"y":661,"width":718,"height":12}},{"id":"df9a1a55-561a-4137-a821-bcc1738151eb","block_type":"box","text":"shareholders. Among the attributes common to all Independent Trustees are their ability to review","page_number":31,"box":{"x":116,"y":676,"width":726,"height":12}},{"id":"133886fa-5b38-49e3-b72c-4a017fd7d549","block_type":"box","text":"critically, evaluate, question and discuss information provided to them, to interact effectively with the","page_number":31,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"2af3c0f3-37d2-49d2-9d4e-55daa61c97db","block_type":"box","text":"Fund’s investment adviser, sub-advisers, other service providers, counsel and the Independent","page_number":31,"box":{"x":117,"y":707,"width":705,"height":12}},{"id":"d0f3ca60-8bf9-46db-a958-bc6a7b534509","block_type":"box","text":"Registered Public Accounting Firm, and to exercise effective business judgment in the performance of","page_number":31,"box":{"x":117,"y":723,"width":757,"height":12}},{"id":"6c24a4ba-b6ef-4504-b4c6-c8353abfe0e3","block_type":"box","text":"their duties as Trustees.","page_number":31,"box":{"x":116,"y":738,"width":178,"height":10}},{"id":"03ee01f0-8509-4980-9e96-d36f77b706b7","block_type":"box","text":"28","page_number":31,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"1c005fcd-efce-499b-a507-5a53fcb21683","block_type":"box","text":"NM1026U-6042785-31/259","page_number":31,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"32f0e291-5d74-45a7-b778-c8cdd010d049","block_type":"box","text":"Information relating to each Trustee’s share ownership in all BlackRock-advised Funds that are","page_number":32,"box":{"x":117,"y":87,"width":710,"height":12}},{"id":"7f940246-97c0-484f-a916-65303eb23d66","block_type":"box","text":"currently overseen by the respective Trustee (“Supervised Funds”) as of December 31, 2025, except","page_number":32,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"5ce6be53-abec-4d83-b4ec-fc9d6db839ff","block_type":"box","text":"as otherwise noted, is set forth in the chart below. Amounts shown may include shares as to which a","page_number":32,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"9d19fa69-efc8-4162-933e-36b19ea50eec","block_type":"box","text":"Trustee has indirect beneficial ownership, such as through participation in certain family accounts,","page_number":32,"box":{"x":116,"y":134,"width":732,"height":12}},{"id":"2afc3696-fd69-4a3c-bde6-436c56113966","block_type":"box","text":"529 college savings plan interests, or similar arrangements where the Trustee has beneficial economic","page_number":32,"box":{"x":116,"y":149,"width":768,"height":12}},{"id":"cdbe7e4e-06b5-4b89-b931-f836ca890030","block_type":"box","text":"interest but not a direct ownership interest.","page_number":32,"box":{"x":117,"y":165,"width":321,"height":11}},{"id":"68d73591-3da6-433a-90d6-a9e85cfa33ac","block_type":"box","text":"Name","page_number":32,"box":{"x":261,"y":223,"width":35,"height":8}},{"id":"3714bf69-e167-4dad-9eec-5946a8557d46","block_type":"box","text":"Aggregate Dollar","page_number":32,"box":{"x":667,"y":192,"width":108,"height":10}},{"id":"61fd1861-46c2-439c-96f7-96af193612b2","block_type":"box","text":"Range of Equity","page_number":32,"box":{"x":671,"y":203,"width":101,"height":9}},{"id":"1ecdffd8-7f9f-4d6e-bbd8-84ed8406c3f0","block_type":"box","text":"Securities in","page_number":32,"box":{"x":681,"y":213,"width":79,"height":8}},{"id":"6916e94b-c94a-4c58-b96b-381fdacac645","block_type":"box","text":"Supervised Funds","page_number":32,"box":{"x":663,"y":223,"width":116,"height":10}},{"id":"01487663-b8dc-4889-965f-614c0a5e2d84","block_type":"box","text":"Interested Trustees","page_number":32,"box":{"x":117,"y":242,"width":148,"height":10}},{"id":"54467ff8-463c-4fff-bf0d-155d5bb1e2ec","block_type":"box","text":"Robert Fairbairn Over $100,000","page_number":32,"box":{"x":117,"y":257,"width":664,"height":12}},{"id":"6ec2358d-c6f1-4185-b878-2b0cdf9e03ac","block_type":"box","text":"John M. Perlowski Over $100,000","page_number":32,"box":{"x":116,"y":272,"width":665,"height":12}},{"id":"be0be830-2e2e-467e-b121-d843aa4ae9d4","block_type":"box","text":"Independent Trustees","page_number":32,"box":{"x":117,"y":296,"width":162,"height":12}},{"id":"a66b9d31-336d-4603-8528-963cd73f2197","block_type":"box","text":"Christopher J. Ailman Over $100,000","page_number":32,"box":{"x":117,"y":311,"width":664,"height":13}},{"id":"c41335b9-5b53-47c8-88ff-568ae7a5cb80","block_type":"box","text":"Susan J. Carter Over $100,000","page_number":32,"box":{"x":116,"y":327,"width":665,"height":12}},{"id":"1c01cca3-d5e7-40bd-a01c-62c592039374","block_type":"box","text":"Collette Chilton Over $100,000","page_number":32,"box":{"x":117,"y":342,"width":664,"height":12}},{"id":"a4d45dce-fd05-4cac-99c0-445d8c462d74","block_type":"box","text":"Neil A. Cotty Over $100,000","page_number":32,"box":{"x":117,"y":358,"width":664,"height":12}},{"id":"cf10b4bb-dbf5-463e-9624-e06e103db9f5","block_type":"box","text":"Jeffrey Jarczyk* None","page_number":32,"box":{"x":116,"y":374,"width":630,"height":12}},{"id":"89c12f25-eea6-440c-8f4f-7dda9752c7ba","block_type":"box","text":"Henry R. Keizer Over $100,000","page_number":32,"box":{"x":117,"y":389,"width":664,"height":12}},{"id":"c2656930-2f5b-42d7-a231-a31fc1cc424b","block_type":"box","text":"Cynthia A. Montgomery Over $100,000","page_number":32,"box":{"x":117,"y":404,"width":664,"height":13}},{"id":"fc545d5e-3738-43b7-9896-64e8d188a7bc","block_type":"box","text":"Donald C. Opatrny Over $100,000","page_number":32,"box":{"x":117,"y":420,"width":664,"height":12}},{"id":"7815d161-37e6-4eda-8f9b-dc326f958472","block_type":"box","text":"Lori Richards None","page_number":32,"box":{"x":117,"y":436,"width":629,"height":9}},{"id":"2a94d638-836f-4082-9b50-0fc67ba26e89","block_type":"box","text":"Mark Stalnecker Over $100,000","page_number":32,"box":{"x":117,"y":451,"width":664,"height":12}},{"id":"14c01c4c-a1c2-4d43-94ac-befefc11bcea","block_type":"box","text":"Marc D. Stern* None","page_number":32,"box":{"x":117,"y":467,"width":629,"height":9}},{"id":"d3b20e90-9d02-459a-9340-47e33f8b0aef","block_type":"box","text":"Kenneth L. Urish Over $100,000","page_number":32,"box":{"x":117,"y":482,"width":664,"height":12}},{"id":"29bb1de4-b79a-4ef8-9e07-b771829326aa","block_type":"box","text":"Claire A. Walton Over $100,000","page_number":32,"box":{"x":117,"y":497,"width":664,"height":12}},{"id":"2de5cee6-9ede-4fac-9676-87846154f807","block_type":"box","text":"* Information is provided as of April 1, 2026, the date Mr. Jarczyk and Mr. Stern first served as consultants to the","page_number":32,"box":{"x":143,"y":548,"width":684,"height":9}},{"id":"bd28816f-9978-4d2a-9214-911ef4aee852","block_type":"box","text":"Independent Trustees.","page_number":32,"box":{"x":171,"y":561,"width":132,"height":9}},{"id":"874f100d-60fc-4d6b-9bc0-ce9767de1b8c","block_type":"box","text":"As of December 31, 2025 (and, with respect to Mr. Jarczyk","page_number":32,"box":{"x":116,"y":590,"width":443,"height":12}},{"id":"a2e18c1a-7c0e-4b84-b7c5-2b28aa740e7d","block_type":"box","text":"and Mr. Stern, as of April 1, 2026), none of","page_number":32,"box":{"x":559,"y":590,"width":323,"height":12}},{"id":"3c1299a1-4b31-4922-97fe-aa7eae9db072","block_type":"box","text":"the Independent Trustees of the Trust or their immediate family members owned directly or indirectly","page_number":32,"box":{"x":116,"y":605,"width":752,"height":12}},{"id":"bc68adaa-0188-47d1-b3da-b96e4a8750f2","block_type":"box","text":"beneficially or of record any securities of the Fund’s investment adviser, sub-advisers, principal","page_number":32,"box":{"x":117,"y":621,"width":709,"height":12}},{"id":"d2fad732-2f88-43f5-bedd-d218cd1eef2c","block_type":"box","text":"underwriter, or any person directly or indirectly controlling, controlled by, or under common control with","page_number":32,"box":{"x":117,"y":636,"width":766,"height":12}},{"id":"72334d5e-ca07-4511-8251-d94fee09bb6f","block_type":"box","text":"such entities.","page_number":32,"box":{"x":116,"y":652,"width":103,"height":9}},{"id":"008a854e-dfb5-4735-8e10-4796233d1efb","block_type":"box","text":"Remuneration of Trustees.","page_number":32,"box":{"x":117,"y":683,"width":211,"height":9}},{"id":"ce1fa37f-0857-4fb5-954c-dcd2ae34d44f","block_type":"box","text":"Each Trustee who is an Independent Trustee is paid as compensation an","page_number":32,"box":{"x":335,"y":683,"width":542,"height":12}},{"id":"e97fbfd8-7546-4310-b0b0-0cd2c56b0394","block_type":"box","text":"annual retainer of $375,000 per year for his or her services as a board member of the BlackRock","page_number":32,"box":{"x":116,"y":697,"width":725,"height":13}},{"id":"c4a0cb63-02e5-4513-9059-31fdb5b14e99","block_type":"box","text":"advised Funds in the BlackRock Multi-Asset Complex, including the Trust, and a $20,000 board","page_number":32,"box":{"x":116,"y":713,"width":708,"height":13}},{"id":"b8fa8bcb-be28-472c-ba88-e1156d555a98","block_type":"box","text":"meeting fee to be paid for each in-person board meeting attended (and may receive a board meeting","page_number":32,"box":{"x":117,"y":729,"width":747,"height":12}},{"id":"1dd68b3e-183a-4dca-bf1e-3742d0b6862a","block_type":"box","text":"fee for telephonic attendance at board meetings), for up to five board meetings held in a calendar year","page_number":32,"box":{"x":116,"y":745,"width":760,"height":12}},{"id":"0d1557ae-dd68-4d4b-a590-7129015287be","block_type":"box","text":"(compensation for meetings in excess of this number to be determined on a case-by-case basis),","page_number":32,"box":{"x":117,"y":760,"width":719,"height":12}},{"id":"0c8b9b72-d975-4ad6-91e1-4457aa062110","block_type":"box","text":"together with out-of-pocket expenses in accordance with a board policy on travel and other business","page_number":32,"box":{"x":116,"y":776,"width":745,"height":12}},{"id":"ca15e9fa-ed17-4a53-bfbf-6e34de48602e","block_type":"box","text":"expenses relating to attendance at meetings. The Chairs of the Audit Committee, Compliance","page_number":32,"box":{"x":116,"y":791,"width":695,"height":12}},{"id":"04e822a2-176e-4234-b218-dcd12ab256a8","block_type":"box","text":"Committee, Governance Committee and Performance Oversight Committee are paid as compensation","page_number":32,"box":{"x":117,"y":807,"width":760,"height":12}},{"id":"f168d863-d4ec-4aea-99ad-8a24f682ef8c","block_type":"box","text":"an additional annual retainer of $45,000, respectively. The Chair of the Board is paid an additional","page_number":32,"box":{"x":116,"y":821,"width":726,"height":13}},{"id":"d8646064-d490-4b36-bcf4-62433dd9e79f","block_type":"box","text":"annual retainer of $150,000.","page_number":32,"box":{"x":116,"y":837,"width":215,"height":12}},{"id":"edf5c1dc-2c92-4c9b-92bb-002e91cfd4d5","block_type":"box","text":"29","page_number":32,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"21e54eda-5148-4389-8e7d-56b2a846cf73","block_type":"box","text":"NM1026U-6042785-32/259","page_number":32,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"42629f32-6bc9-43c6-9b08-0f72f78503c8","block_type":"box","text":"The following table sets forth the estimated compensation the Trust expects to pay the Trustees, on","page_number":33,"box":{"x":116,"y":87,"width":745,"height":12}},{"id":"61fc8620-74c9-4ed8-b51a-586f474724c8","block_type":"box","text":"behalf of the Fund, for the fiscal year ending April 30. 2027 and the aggregate compensation paid to","page_number":33,"box":{"x":117,"y":102,"width":746,"height":13}},{"id":"28d08b2f-8f4c-4bdf-bfb0-4c38837bf30a","block_type":"box","text":"them by all BlackRock-advised Funds for the calendar year ended December 31, 2025.","page_number":33,"box":{"x":116,"y":118,"width":653,"height":12}},{"id":"e6d5c456-70e7-4349-8f45-67aed8007b51","block_type":"box","text":"Name","page_number":33,"box":{"x":284,"y":187,"width":35,"height":8}},{"id":"35e6333e-ac52-40b6-b778-895a1bdc54a5","block_type":"box","text":"Estimated","page_number":33,"box":{"x":520,"y":167,"width":62,"height":7}},{"id":"1e249855-9fb1-44a4-89ff-964818f87478","block_type":"box","text":"Compensation","page_number":33,"box":{"x":505,"y":177,"width":91,"height":9}},{"id":"d81d454c-cbb0-4d59-bbcd-7ffdabaaf9ad","block_type":"box","text":"from the Fund","page_number":33,"box":{"x":506,"y":187,"width":89,"height":8}},{"id":"e2d5c950-4741-432f-b34f-4f3e631be6fe","block_type":"box","text":"Estimated","page_number":33,"box":{"x":646,"y":156,"width":62,"height":8}},{"id":"5a78e1c2-b137-4000-a5bc-4eea75389050","block_type":"box","text":"Annual","page_number":33,"box":{"x":654,"y":167,"width":45,"height":7}},{"id":"f0de4251-092f-4c4b-a5c5-c43e0dfb2f8e","block_type":"box","text":"Benefits Upon","page_number":33,"box":{"x":632,"y":177,"width":89,"height":9}},{"id":"f994bfb1-706b-47d1-8826-d26b32cc0b28","block_type":"box","text":"Retirement","page_number":33,"box":{"x":643,"y":187,"width":69,"height":8}},{"id":"bf015b1e-1a4d-421e-9aba-7d6f267c6e75","block_type":"box","text":"Aggregate","page_number":33,"box":{"x":786,"y":146,"width":66,"height":10}},{"id":"9187c8d1-645a-4da3-8119-b77eba33ab52","block_type":"box","text":"Compensation from","page_number":33,"box":{"x":757,"y":156,"width":126,"height":10}},{"id":"7977fa5d-eede-4882-86a7-5e0f590a9b80","block_type":"box","text":"the Fund and","page_number":33,"box":{"x":778,"y":167,"width":83,"height":7}},{"id":"d4b3c940-c23b-4a5c-9708-9cf71e2eba1e","block_type":"box","text":"Other BlackRock","page_number":33,"box":{"x":764,"y":177,"width":112,"height":7}},{"id":"ac9f15d4-e1d5-4234-816c-209337208728","block_type":"box","text":"Advised Funds","page_number":33,"box":{"x":769,"y":187,"width":96,"height":8}},{"id":"938108a7-ad27-4766-b062-dca05ed1f79a","block_type":"box","text":"1","page_number":33,"box":{"x":866,"y":187,"width":3,"height":5}},{"id":"62bd9577-31b8-4a7f-924c-8e058cb33ca9","block_type":"box","text":"Interested Trustees","page_number":33,"box":{"x":117,"y":206,"width":144,"height":10}},{"id":"53e1c5ed-99dc-4cf9-91c9-ee68c4d1394d","block_type":"box","text":"Robert Fairbairn None None None","page_number":33,"box":{"x":117,"y":222,"width":728,"height":9}},{"id":"d5478d9e-20ee-44f5-8e5e-26c5bbb89f4a","block_type":"box","text":"John M. Perlowski None None None","page_number":33,"box":{"x":116,"y":237,"width":729,"height":10}},{"id":"7f276288-e5e2-4afd-895d-b7a68f36b003","block_type":"box","text":"Independent Trustees","page_number":33,"box":{"x":117,"y":260,"width":162,"height":12}},{"id":"03093770-4a58-43bc-8a4e-12142fff04aa","block_type":"box","text":"Christopher J. Ailman $633 None $445,000","page_number":33,"box":{"x":117,"y":275,"width":743,"height":13}},{"id":"9c51692c-11f3-47ed-8b61-6e31b471753f","block_type":"box","text":"Susan J. Carter $633 None $445,000","page_number":33,"box":{"x":116,"y":291,"width":744,"height":11}},{"id":"d827e627-9a07-4cbe-be78-2f20360ec181","block_type":"box","text":"Collette Chilton $633 None $445,000","page_number":33,"box":{"x":117,"y":306,"width":743,"height":12}},{"id":"47bbecd7-fe70-4607-b90a-0a4bb01b4713","block_type":"box","text":"Neil A. Cotty $634 None $467,500","page_number":33,"box":{"x":117,"y":322,"width":743,"height":12}},{"id":"e2237aa1-3d78-4d5e-b241-916b777a0c2b","block_type":"box","text":"Jeffrey Jarczyk","page_number":33,"box":{"x":116,"y":338,"width":112,"height":12}},{"id":"97a2840b-7126-4281-9359-16c8a49af6a7","block_type":"box","text":"2","page_number":33,"box":{"x":228,"y":338,"width":6,"height":6}},{"id":"f5324c1d-8db9-4b5e-8268-c86f78198c5c","block_type":"box","text":"$633 None None","page_number":33,"box":{"x":234,"y":337,"width":611,"height":11}},{"id":"eab78639-87a3-4c6c-9703-b704084b7de3","block_type":"box","text":"Henry R. Keizer","page_number":33,"box":{"x":117,"y":353,"width":118,"height":12}},{"id":"8100612f-c447-4c47-8e05-66e3c9a533f9","block_type":"box","text":"3","page_number":33,"box":{"x":235,"y":353,"width":5,"height":7}},{"id":"c11855d1-263b-4869-8b9a-33e1a3b164e4","block_type":"box","text":"$636 None $490,000","page_number":33,"box":{"x":240,"y":353,"width":620,"height":11}},{"id":"23eefc32-aa8e-47a8-ba7e-35ef0141da75","block_type":"box","text":"Cynthia A. Montgomery","page_number":33,"box":{"x":117,"y":369,"width":174,"height":12}},{"id":"9095f6a6-0073-4386-bfd3-9ab66da5f38e","block_type":"box","text":"4","page_number":33,"box":{"x":292,"y":369,"width":5,"height":6}},{"id":"ea1b5910-77e3-48ae-a0c3-3bcf254a0f15","block_type":"box","text":"$635 None $490,000","page_number":33,"box":{"x":298,"y":368,"width":562,"height":12}},{"id":"7e74c19a-9e8c-4082-b4b3-15d39bb023ac","block_type":"box","text":"Donald C. Opatrny","page_number":33,"box":{"x":117,"y":384,"width":138,"height":12}},{"id":"4957a136-5424-4a63-aefc-ea249e7ad2d9","block_type":"box","text":"5","page_number":33,"box":{"x":256,"y":385,"width":5,"height":6}},{"id":"65c915f0-a9b2-42ca-a89d-5c6eb25976ca","block_type":"box","text":"$635 None $490,000","page_number":33,"box":{"x":261,"y":384,"width":599,"height":11}},{"id":"37b54b1c-2b47-429d-9fce-383f6a6ebe8d","block_type":"box","text":"Lori Richards $633 None $445,000","page_number":33,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"bf5bb9a1-6667-44ab-9d1d-1498954a721c","block_type":"box","text":"Mark Stalnecker","page_number":33,"box":{"x":117,"y":415,"width":121,"height":10}},{"id":"ed157cf2-b880-44e9-a2f0-23289d713770","block_type":"box","text":"6","page_number":33,"box":{"x":238,"y":415,"width":5,"height":7}},{"id":"3926b9b9-29a4-48da-96ae-a265ec4b1258","block_type":"box","text":"$425 None $595,000","page_number":33,"box":{"x":243,"y":415,"width":617,"height":12}},{"id":"4b2fcf96-e210-4834-b3c3-3b5db0dfd520","block_type":"box","text":"Marc D. Stern $633 None None","page_number":33,"box":{"x":117,"y":430,"width":728,"height":12}},{"id":"9a5d6a19-9edd-4031-89bb-df1ee364baae","block_type":"box","text":"Kenneth L. Urish $422 None $445,000","page_number":33,"box":{"x":117,"y":446,"width":743,"height":12}},{"id":"bf432f82-c3d5-4cec-9823-a83739d01b0b","block_type":"box","text":"Claire A. 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(collectively referred to in this section as “BlackRock”) and their respective directors,","page_number":33,"box":{"x":117,"y":753,"width":743,"height":12}},{"id":"a726b38d-01c4-4f60-8842-77fb5f7fa0b0","block_type":"box","text":"officers or employees, with respect to the Fund and/or other accounts managed by BlackRock, may","page_number":33,"box":{"x":116,"y":769,"width":739,"height":12}},{"id":"fefd7fb7-9e49-476d-b639-cf5d0ebb58ef","block_type":"box","text":"give rise to actual or perceived conflicts of interest such as those described below.","page_number":33,"box":{"x":116,"y":784,"width":610,"height":12}},{"id":"f87e7036-2524-4bfc-95b4-05b14c5300c3","block_type":"box","text":"BlackRock is one of the world’s largest asset management firms. 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This may occur with respect to BlackRock","page_number":34,"box":{"x":116,"y":537,"width":735,"height":12}},{"id":"5f2a73cb-7c84-4178-a3cb-509d514ac1be","block_type":"box","text":"advised accounts when investment decisions regarding the Fund are based on research or other","page_number":34,"box":{"x":116,"y":552,"width":723,"height":12}},{"id":"bba002fa-3a71-4d87-a278-5efea38a1d78","block_type":"box","text":"information that is also used to support decisions for other accounts. 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BlackRock may, in","page_number":34,"box":{"x":116,"y":630,"width":721,"height":12}},{"id":"7ad82d45-6e14-41b5-aa81-0e3714b5346d","block_type":"box","text":"certain cases, elect to implement internal policies and procedures designed to limit such","page_number":34,"box":{"x":116,"y":645,"width":658,"height":12}},{"id":"4b052dbe-574a-4488-b911-4b944bc7cad4","block_type":"box","text":"consequences, which may cause the Fund to be unable to engage in certain activities, including","page_number":34,"box":{"x":116,"y":661,"width":711,"height":12}},{"id":"f7f8364c-ace6-43e1-99a6-0478610ea438","block_type":"box","text":"purchasing or disposing of securities, when it might otherwise be desirable for it to do so. 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BlackRock may","page_number":34,"box":{"x":117,"y":816,"width":734,"height":12}},{"id":"cd141d90-6945-4605-9364-308acdfc6e6a","block_type":"box","text":"pursue rights, provide advice or engage in other activities, or refrain from pursuing rights, providing","page_number":34,"box":{"x":117,"y":831,"width":737,"height":12}},{"id":"59010fcf-42c8-472a-888e-04114b409f7f","block_type":"box","text":"advice or engaging in other activities, on behalf of other clients with respect to an issuer in which the","page_number":34,"box":{"x":116,"y":847,"width":749,"height":12}},{"id":"2a8afab6-fb0b-4014-9750-1c55285bc277","block_type":"box","text":"Fund has invested, and such actions (or refraining from action) may have a material adverse effect on","page_number":34,"box":{"x":117,"y":862,"width":761,"height":12}},{"id":"88849620-e97b-4363-b086-316b54ea3aa0","block_type":"box","text":"the Fund. In situations in which clients of BlackRock (including the Fund) hold positions in multiple","page_number":34,"box":{"x":116,"y":878,"width":732,"height":12}},{"id":"dbd4aee7-0084-455a-8e58-e6bc51008bc3","block_type":"box","text":"31","page_number":34,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"c3aa5e61-66f4-48d9-b33f-178c4a81f013","block_type":"box","text":"NM1026U-6042785-34/259","page_number":34,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"78ad05fd-9c20-4749-a66f-a2b5afcd7a0a","block_type":"box","text":"parts of the capital structure of an issuer, BlackRock may not pursue certain actions or remedies that","page_number":35,"box":{"x":117,"y":87,"width":752,"height":12}},{"id":"ce8a278a-0aa3-4c6c-aae1-c9fae533d035","block_type":"box","text":"may be available to the Fund, as a result of legal and regulatory requirements or otherwise. BlackRock","page_number":35,"box":{"x":117,"y":102,"width":766,"height":13}},{"id":"32a6bcd9-3956-4a33-aa68-6c59c1c9ca7a","block_type":"box","text":"addresses these and other potential conflicts of interest based on the facts and circumstances of","page_number":35,"box":{"x":116,"y":118,"width":722,"height":12}},{"id":"4de380fc-98b0-47a8-8e28-a728cee69812","block_type":"box","text":"particular situations. For example, BlackRock may determine to rely on information barriers between","page_number":35,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"c49fd033-42c4-414d-992e-23fc5382b91b","block_type":"box","text":"different business units or portfolio management teams. BlackRock may also determine to rely on the","page_number":35,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"87458323-ca05-4e49-ab18-293b7b750b4d","block_type":"box","text":"actions of similarly situated holders of loans or securities rather than, or in connection with, taking such","page_number":35,"box":{"x":116,"y":165,"width":768,"height":12}},{"id":"4ce7e8a0-f373-4b96-9a19-54bcdc11f4d2","block_type":"box","text":"actions itself on behalf of the Fund.","page_number":35,"box":{"x":116,"y":180,"width":265,"height":10}},{"id":"d6a605cc-02f3-4171-adf1-7c16ca3b69e8","block_type":"box","text":"In addition, to the extent permitted by applicable law, the Fund may invest its assets in other funds","page_number":35,"box":{"x":117,"y":211,"width":733,"height":12}},{"id":"bd39b901-b73d-4d60-a072-a58653cfee9c","block_type":"box","text":"advised by BlackRock, including funds that are managed by one or more of the same portfolio","page_number":35,"box":{"x":116,"y":227,"width":702,"height":12}},{"id":"a24341c2-8711-47c2-b344-0688d34e54e0","block_type":"box","text":"managers, which could result in conflicts of interest relating to asset allocation, timing of Fund","page_number":35,"box":{"x":117,"y":242,"width":699,"height":12}},{"id":"a9cfb789-4097-434b-a1d1-5d1e06769ac7","block_type":"box","text":"purchases and redemptions, and increased remuneration and profitability for BlackRock and/or its","page_number":35,"box":{"x":117,"y":258,"width":730,"height":12}},{"id":"bc36c32f-51a6-4fa5-81a7-320507d31f88","block_type":"box","text":"personnel, including portfolio managers.","page_number":35,"box":{"x":117,"y":273,"width":302,"height":12}},{"id":"3327b824-8c9b-4e99-9728-9c05b58f60b1","block_type":"box","text":"Third parties, including service providers to BlackRock or the Fund, may sponsor events (including, but","page_number":35,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"2203d501-199f-49a3-b35c-7f5d4428ffe8","block_type":"box","text":"not limited to, marketing and promotional activities and presentations, educational training programs","page_number":35,"box":{"x":117,"y":320,"width":746,"height":12}},{"id":"72984209-168f-4eca-9a66-1bf8cfb7fdd5","block_type":"box","text":"and conferences) for registered representatives, other professionals and individual investors. There is","page_number":35,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"f8142135-0934-472a-9e5b-4e86cd5275d6","block_type":"box","text":"a potential conflict of interest as such sponsorships may defray the costs of such activities to","page_number":35,"box":{"x":116,"y":351,"width":691,"height":12}},{"id":"a129d7f5-3159-439e-982f-3e625366725d","block_type":"box","text":"BlackRock, and may provide an incentive to BlackRock to retain such third parties to provide services","page_number":35,"box":{"x":117,"y":366,"width":757,"height":12}},{"id":"43835215-bb9a-41fd-8e39-edc6f1a5f8a4","block_type":"box","text":"to the Fund.","page_number":35,"box":{"x":116,"y":382,"width":94,"height":9}},{"id":"32a6b133-3896-4ad5-9253-0c5e554e4e8b","block_type":"box","text":"In certain circumstances, BlackRock, on behalf of the Fund, may seek to buy from or sell securities to","page_number":35,"box":{"x":117,"y":413,"width":757,"height":12}},{"id":"6e8d90a2-ba5c-4bff-b169-4061f64da62f","block_type":"box","text":"another fund or account advised by BlackRock. BlackRock may (but is not required to) effect","page_number":35,"box":{"x":116,"y":428,"width":692,"height":12}},{"id":"6d77de33-9895-4c44-8a5f-abcda381b672","block_type":"box","text":"purchases and sales between BlackRock clients (“cross trades”), including the Fund, if BlackRock","page_number":35,"box":{"x":117,"y":444,"width":730,"height":12}},{"id":"7d8d05e8-b3ed-4b1c-b7c3-8089f6799d32","block_type":"box","text":"believes such transactions are appropriate based on each party’s investment objectives and","page_number":35,"box":{"x":117,"y":459,"width":687,"height":12}},{"id":"23de7aaf-92f1-44da-8c97-0fb1419b270d","block_type":"box","text":"guidelines, subject to applicable law and regulation. There may be potential conflicts of interest or","page_number":35,"box":{"x":116,"y":475,"width":728,"height":12}},{"id":"40f88d75-58fb-4327-af74-c272f6ceaf82","block_type":"box","text":"regulatory issues relating to these transactions which could limit BlackRock’s decision to engage in","page_number":35,"box":{"x":117,"y":490,"width":738,"height":12}},{"id":"077b69ed-61db-41cd-8c77-70809054da94","block_type":"box","text":"these transactions for the Fund. BlackRock may have a potentially conflicting division of loyalties and","page_number":35,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"b55e611f-04bc-4193-aa71-a356b8306158","block_type":"box","text":"responsibilities to the parties in such transactions.","page_number":35,"box":{"x":117,"y":521,"width":374,"height":12}},{"id":"c4422c23-ea38-4f64-a67c-5e03c8dc21eb","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":35,"box":{"x":117,"y":552,"width":763,"height":12}},{"id":"05b5e819-c6fd-47e1-a941-02e212be5fb6","block_type":"box","text":"invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability,","page_number":35,"box":{"x":117,"y":568,"width":760,"height":12}},{"id":"12aa6c30-a316-4569-8ec6-769dd4434c16","block_type":"box","text":"liquidity and terms of the Fund’s investments may be negatively impacted by the activities of","page_number":35,"box":{"x":117,"y":583,"width":687,"height":12}},{"id":"57ed4da1-c61b-4a29-8d76-8d71ac653d70","block_type":"box","text":"BlackRock or its clients, and transactions for the Fund may be impaired or effected at prices or terms","page_number":35,"box":{"x":117,"y":599,"width":753,"height":12}},{"id":"f782944a-2cfc-46de-94d2-8a12d7a712af","block_type":"box","text":"that may be less favorable than would otherwise have been the case.","page_number":35,"box":{"x":116,"y":614,"width":520,"height":12}},{"id":"9d53017c-6324-49ac-9a56-8b06a1955446","block_type":"box","text":"The results of the Fund’s investment activities may differ significantly from the results achieved by","page_number":35,"box":{"x":116,"y":645,"width":731,"height":12}},{"id":"c7c3aad8-791c-41ab-b928-01938c0917e7","block_type":"box","text":"BlackRock for its proprietary accounts or other accounts (including investment companies or collective","page_number":35,"box":{"x":117,"y":661,"width":758,"height":12}},{"id":"a4f18316-d2cb-471e-8e59-ef3d92fce880","block_type":"box","text":"investment vehicles) that it manages or advises. It is possible that one or more accounts managed or","page_number":35,"box":{"x":117,"y":676,"width":750,"height":12}},{"id":"060ebdb2-bef2-4372-8a47-fb0643043f8b","block_type":"box","text":"advised by BlackRock and such other accounts will achieve investment results that are substantially","page_number":35,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"cf29f1bc-a3d8-49cd-b87e-25a4a27d21e8","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":35,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"40923691-9513-4ccc-b92e-ccdbd38e1e3d","block_type":"box","text":"sustain losses during periods in which one or more proprietary or other accounts managed or advised","page_number":35,"box":{"x":116,"y":723,"width":754,"height":12}},{"id":"0c766964-2266-41dd-a2de-1879625f930d","block_type":"box","text":"by BlackRock achieve significant profits. The opposite result is also possible.","page_number":35,"box":{"x":117,"y":738,"width":568,"height":12}},{"id":"50d0a2d2-71c4-45a4-9c04-9b86b6b15b91","block_type":"box","text":"From time to time, the Fund may be restricted from purchasing or selling securities, or from engaging","page_number":35,"box":{"x":117,"y":769,"width":748,"height":12}},{"id":"ab0a2bbf-c039-413e-afa6-208215ea909c","block_type":"box","text":"in other investment activities because of regulatory, legal or contractual requirements applicable to","page_number":35,"box":{"x":117,"y":785,"width":730,"height":12}},{"id":"34654e61-83f9-4b3c-9c2b-5c9d1bd4eded","block_type":"box","text":"BlackRock or other accounts managed or advised by BlackRock, and/or the internal policies of","page_number":35,"box":{"x":117,"y":800,"width":702,"height":12}},{"id":"bd5ffee1-ad84-400d-9f94-9293b3907a6b","block_type":"box","text":"BlackRock designed to comply with such requirements. As a result, there may be periods, for example,","page_number":35,"box":{"x":117,"y":816,"width":763,"height":12}},{"id":"75963a7f-6203-47a3-92f2-3873645c559d","block_type":"box","text":"when BlackRock will not initiate or recommend certain types of transactions in certain securities or","page_number":35,"box":{"x":116,"y":831,"width":734,"height":12}},{"id":"15ffceae-c046-4da4-94cd-63e33a1b3453","block_type":"box","text":"instruments with respect to which BlackRock is performing services or when position limits have been","page_number":35,"box":{"x":117,"y":847,"width":757,"height":12}},{"id":"3d095a89-84aa-4b9f-8053-f64f396a6ec3","block_type":"box","text":"reached. For example, the investment activities of BlackRock for its proprietary accounts and accounts","page_number":35,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"94b4ef60-38ca-43b7-97a1-162480cef2ac","block_type":"box","text":"under its management may limit the investment opportunities for the Fund in certain emerging and","page_number":35,"box":{"x":117,"y":878,"width":733,"height":12}},{"id":"7a81ff56-6c05-416d-8845-171560e2bc0a","block_type":"box","text":"32","page_number":35,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d1bb4905-e44a-4781-b70f-c86e404a8eb9","block_type":"box","text":"NM1026U-6042785-35/259","page_number":35,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3bba6058-0037-4733-8519-31319f351703","block_type":"box","text":"other markets in which limitations are imposed upon the amount of investment, in the aggregate or in","page_number":36,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"ba5d2596-5b7f-4807-b1d2-985cfc59b148","block_type":"box","text":"individual issuers, by affiliated foreign investors.","page_number":36,"box":{"x":117,"y":102,"width":359,"height":13}},{"id":"533fbc4d-4011-4c42-9f52-16a127561fb4","block_type":"box","text":"In connection with its management of the Fund, BlackRock may have access to certain fundamental","page_number":36,"box":{"x":117,"y":134,"width":747,"height":12}},{"id":"58d509f9-923b-428f-8d9a-d8d765e3220c","block_type":"box","text":"analysis and proprietary technical models developed by BlackRock. BlackRock will not be under any","page_number":36,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"20615dae-c860-4da9-afef-4145aca4d6da","block_type":"box","text":"obligation, however, to effect transactions on behalf of the Fund in accordance with such analysis and","page_number":36,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"3e5fdc57-9179-46d4-b4dc-d9ca266e5b98","block_type":"box","text":"models. In addition, BlackRock will not have any obligation to make available any information regarding","page_number":36,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"b1f90b3e-3a2f-4031-ac53-4fb23e45e054","block_type":"box","text":"its proprietary activities or strategies, or the activities or strategies used for other accounts managed by","page_number":36,"box":{"x":117,"y":196,"width":769,"height":12}},{"id":"33b219e9-cff7-4dd2-b754-eadbaf855b56","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":36,"box":{"x":116,"y":211,"width":757,"height":12}},{"id":"69ef6274-bcf9-49d7-8957-a7cb4dd98f5b","block_type":"box","text":"access to such information for the purpose of managing the Fund. The proprietary activities or portfolio","page_number":36,"box":{"x":116,"y":227,"width":767,"height":12}},{"id":"5559be2d-743d-4644-abf4-012a165b5db7","block_type":"box","text":"strategies of BlackRock, or the activities or strategies used for accounts managed by BlackRock or","page_number":36,"box":{"x":116,"y":242,"width":738,"height":12}},{"id":"2806739d-d286-4e36-8493-f1570df598c7","block_type":"box","text":"other client accounts could conflict with the transactions and strategies employed by BlackRock in","page_number":36,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"1f23c318-6169-4f25-80ae-eb983af7a686","block_type":"box","text":"managing the Fund.","page_number":36,"box":{"x":117,"y":273,"width":153,"height":12}},{"id":"f495e418-d206-4bc5-898b-036865fc8686","block_type":"box","text":"The Fund may be included in investment models developed by BlackRock for use by clients and","page_number":36,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"8dd56fa0-6755-4f22-a662-8ed436647cd1","block_type":"box","text":"financial advisors. To the extent clients invest in these investment models and increase the assets","page_number":36,"box":{"x":116,"y":320,"width":733,"height":9}},{"id":"bf10ae89-77fc-4cdb-a084-41033dec8496","block_type":"box","text":"under management of the Fund, the investment management fee amounts paid by the Fund to","page_number":36,"box":{"x":117,"y":335,"width":707,"height":12}},{"id":"79d74b67-a6b0-4e7d-8910-0ae2ec19f882","block_type":"box","text":"BlackRock may also increase. The net asset value and liquidity of the Fund may be impacted by","page_number":36,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"03949c5a-457f-4eae-9f84-4b8f3993e19d","block_type":"box","text":"purchases and sales of the Fund by model-driven investment portfolios, as well as by BlackRock itself","page_number":36,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"58cce4eb-a260-442a-84e7-1729ca7e4d51","block_type":"box","text":"and by its advisory clients.","page_number":36,"box":{"x":116,"y":382,"width":201,"height":12}},{"id":"008fefee-5ff2-4f6a-8c10-d47645902a32","block_type":"box","text":"In addition, certain principals and certain employees of the Fund’s investment adviser are also","page_number":36,"box":{"x":117,"y":413,"width":702,"height":12}},{"id":"897c0f2c-ff9e-4c3c-9a79-4981d372b534","block_type":"box","text":"principals or employees of other business units or entities within BlackRock. As a result, these","page_number":36,"box":{"x":117,"y":428,"width":702,"height":12}},{"id":"5b7f8076-3a45-4aec-b046-da56ef0204fe","block_type":"box","text":"principals and employees may have obligations to such other business units or entities or their clients","page_number":36,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"21297261-a17c-4cd2-81cc-91dd4c98c5a1","block_type":"box","text":"and such obligations to other business units or entities or their clients may be a consideration of which","page_number":36,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"5818e970-8d40-4b03-b1fc-5cb1c7f72162","block_type":"box","text":"investors in the Fund should be aware.","page_number":36,"box":{"x":117,"y":475,"width":292,"height":9}},{"id":"e789fb5e-7ddb-497c-9231-d49f99150120","block_type":"box","text":"BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of","page_number":36,"box":{"x":117,"y":506,"width":769,"height":12}},{"id":"f44a1868-c2fe-416f-af74-9d32e9aabc4f","block_type":"box","text":"the Fund in which clients of BlackRock, or, to the extent permitted by the Commission and applicable","page_number":36,"box":{"x":116,"y":521,"width":754,"height":12}},{"id":"f8a55125-c061-4d36-8739-fc800ffe7c97","block_type":"box","text":"law, BlackRock, serves as the counterparty, principal or issuer. In such cases, such party’s interests in","page_number":36,"box":{"x":117,"y":537,"width":764,"height":12}},{"id":"aa69e93b-9fcf-49e0-99c0-60f09166048a","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":36,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"39a87a24-e871-41fb-ba23-522cff121c79","block_type":"box","text":"assure that the Fund obtains the best possible prices or terms in connection with the transactions. In","page_number":36,"box":{"x":116,"y":568,"width":750,"height":12}},{"id":"65802bc3-1d11-4fc7-81ae-72537c1adcfd","block_type":"box","text":"addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability","page_number":36,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"1173c354-336a-4ee5-a587-24319938078f","block_type":"box","text":"of BlackRock.","page_number":36,"box":{"x":116,"y":599,"width":107,"height":9}},{"id":"d7566afb-c725-4ae5-9505-7c7e406cd3fc","block_type":"box","text":"BlackRock may also create, write or issue derivatives for clients, the underlying securities, currencies","page_number":36,"box":{"x":117,"y":630,"width":755,"height":12}},{"id":"a0554c6a-8d27-41d0-9b8a-02ddeceafad0","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":36,"box":{"x":116,"y":645,"width":706,"height":12}},{"id":"a41dc2fa-a9ea-479c-82cf-033399c54fb6","block_type":"box","text":"performance of the Fund. Additionally, an affiliate of BlackRock will create, write or issue options,","page_number":36,"box":{"x":117,"y":661,"width":718,"height":12}},{"id":"f2a8daf6-9c7c-43b2-a243-f377f965363e","block_type":"box","text":"which may be based on the performance of the Fund. BlackRock has entered into an arrangement with","page_number":36,"box":{"x":116,"y":676,"width":765,"height":12}},{"id":"87f8e898-ae61-4ffd-abbf-a2548549bb88","block_type":"box","text":"Markit Indices Limited, the index provider for underlying fixed-income indexes used by certain iShares","page_number":36,"box":{"x":117,"y":692,"width":754,"height":12}},{"id":"ffff3a42-a632-4acf-a274-5aa2905ed519","block_type":"box","text":"ETFs, related to derivative fixed-income products that are based on such iShares ETFs.. Trading","page_number":36,"box":{"x":117,"y":707,"width":717,"height":12}},{"id":"376b5214-09a7-48c4-aa05-fed146bb16d0","block_type":"box","text":"activity in these derivative products could also potentially lead to greater liquidity for such products,","page_number":36,"box":{"x":116,"y":723,"width":733,"height":12}},{"id":"1f24be7b-7523-4561-8bc9-456cf9dcf727","block_type":"box","text":"increased purchase activity with respect to these iShares ETFs and increased assets under","page_number":36,"box":{"x":117,"y":738,"width":679,"height":12}},{"id":"fffe689d-b102-4dbb-84fd-1c6b62e3dd15","block_type":"box","text":"management for BlackRock.","page_number":36,"box":{"x":117,"y":754,"width":209,"height":12}},{"id":"892511f7-c1ba-4264-b496-3f024638d9fa","block_type":"box","text":"The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting","page_number":36,"box":{"x":116,"y":785,"width":758,"height":12}},{"id":"6dc99b36-27b9-4489-97b0-869ab7c8c5b4","block_type":"box","text":"or other distribution by BlackRock and may also enter into transactions with other clients of BlackRock","page_number":36,"box":{"x":116,"y":800,"width":758,"height":12}},{"id":"7ede5d34-a514-44fd-9364-92cacb542151","block_type":"box","text":"where such other clients have interests adverse to those of the Fund. At times, these activities may","page_number":36,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"e22a85ed-9d7e-4aaf-a164-372abeadaabf","block_type":"box","text":"cause business units or entities within BlackRock to give advice to clients that may cause these clients","page_number":36,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"55e94f9d-f9ef-42b5-83ce-6d7082ab3b5b","block_type":"box","text":"to take actions adverse to the interests of the Fund. To the extent such transactions are permitted, the","page_number":36,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"f0da87f9-cce7-4f97-9d83-851d7efe9938","block_type":"box","text":"Fund will deal with BlackRock on an arms-length basis.","page_number":36,"box":{"x":117,"y":862,"width":414,"height":12}},{"id":"2f75dcb0-08f8-4103-bbf7-72e0f74733c8","block_type":"box","text":"33","page_number":36,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"3542cf16-7691-42b9-b3ec-834f760d0f00","block_type":"box","text":"NM1026U-6042785-36/259","page_number":36,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5a5cf572-cce2-4ad3-b76c-659ad113bb5a","block_type":"box","text":"To the extent authorized by applicable law, BlackRock may act as broker, dealer, agent, lender or","page_number":37,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"a391ee73-4bbc-45ac-a23d-bc942f5b654f","block_type":"box","text":"adviser or in other commercial capacities for the Fund. It is anticipated that the commissions,","page_number":37,"box":{"x":116,"y":102,"width":694,"height":12}},{"id":"1daae716-cd74-4001-9264-531096b0442e","block_type":"box","text":"mark-ups, mark-downs, financial advisory fees, underwriting and placement fees, sales fees, financing","page_number":37,"box":{"x":117,"y":118,"width":764,"height":12}},{"id":"6b9d8fc7-46ee-494f-b08b-d1090c48746b","block_type":"box","text":"and commitment fees, brokerage fees, other fees, compensation or profits, rates, terms and conditions","page_number":37,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"bbbaefbd-9847-440b-bdf4-b9a0ecf64d2d","block_type":"box","text":"charged by BlackRock will be in its view commercially reasonable, although BlackRock, including its","page_number":37,"box":{"x":116,"y":149,"width":747,"height":12}},{"id":"1d3aaca6-caf5-4788-976e-41691ddae554","block_type":"box","text":"sales personnel, will have an interest in obtaining fees and other amounts that are favorable to","page_number":37,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"4e39357c-731c-4b7f-bbcc-df603ee8d6e0","block_type":"box","text":"BlackRock and such sales personnel, which may have an adverse effect on the Fund. Index based","page_number":37,"box":{"x":117,"y":180,"width":738,"height":12}},{"id":"fc44476d-e27f-4b1d-934b-156257270fc5","block_type":"box","text":"funds may use an index provider that is affiliated with another service provider of the Fund or","page_number":37,"box":{"x":116,"y":196,"width":694,"height":12}},{"id":"39e0e30f-2771-4d0a-943e-81e6ba4ab4c5","block_type":"box","text":"BlackRock that acts as a broker, dealer, agent, lender or in other commercial capacities for the Fund or","page_number":37,"box":{"x":117,"y":211,"width":770,"height":12}},{"id":"533c72b9-abf9-4535-959e-9a560140d8f4","block_type":"box","text":"BlackRock.","page_number":37,"box":{"x":117,"y":227,"width":88,"height":9}},{"id":"6e705c17-ef2b-49fa-8fd1-22328d3954a1","block_type":"box","text":"Subject to applicable law, BlackRock (and its personnel and other distributors) will be entitled to retain","page_number":37,"box":{"x":116,"y":255,"width":761,"height":12}},{"id":"eac82fee-8d78-455b-afa1-e26cacbb2d20","block_type":"box","text":"fees and other amounts that they receive in connection with their service to the Fund as broker, dealer,","page_number":37,"box":{"x":116,"y":270,"width":769,"height":12}},{"id":"15eaa20d-c00d-4c1a-a52c-cd1ad84d5980","block_type":"box","text":"agent, lender, adviser or in other commercial capacities. No accounting to the Fund or its shareholders","page_number":37,"box":{"x":116,"y":286,"width":767,"height":12}},{"id":"699fa6a0-eb4c-415f-8774-75578967f93e","block_type":"box","text":"will be required, and no fees or other compensation payable by the Fund or its shareholders will be","page_number":37,"box":{"x":116,"y":301,"width":739,"height":13}},{"id":"7e686b25-14fa-4b66-ac70-ce1d3002bb3a","block_type":"box","text":"reduced by reason of receipt by BlackRock of any such fees or other amounts.","page_number":37,"box":{"x":117,"y":317,"width":587,"height":12}},{"id":"43d9e33f-64f0-499a-a172-5c7e496234a5","block_type":"box","text":"When BlackRock acts as broker, dealer, agent, adviser or in other commercial capacities in relation to","page_number":37,"box":{"x":116,"y":345,"width":761,"height":12}},{"id":"6db7f034-1581-46a6-93f9-a51fa9fad273","block_type":"box","text":"the Fund, BlackRock may take commercial steps in its own interests, which may have an adverse","page_number":37,"box":{"x":116,"y":361,"width":730,"height":12}},{"id":"0451df05-84df-485e-b8d5-7f24cb545c06","block_type":"box","text":"effect on the Fund.","page_number":37,"box":{"x":116,"y":376,"width":145,"height":10}},{"id":"42afa647-cad4-4712-926e-08a02cbd0995","block_type":"box","text":"The Fund will be required to establish business relationships with its counterparties based on the","page_number":37,"box":{"x":116,"y":405,"width":724,"height":12}},{"id":"321d6063-10a3-4119-b7b6-df61574930af","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":37,"box":{"x":117,"y":420,"width":728,"height":12}},{"id":"473320e0-aaa2-4d44-83d2-e728d9a67b5f","block_type":"box","text":"connection with the Fund’s establishment of its business relationships, nor is it expected that the","page_number":37,"box":{"x":116,"y":436,"width":720,"height":12}},{"id":"80aba051-6e03-4f9d-a6d7-d8ff645ae3a5","block_type":"box","text":"Fund’s counterparties will rely on the credit of BlackRock in evaluating the Fund’s creditworthiness.","page_number":37,"box":{"x":117,"y":451,"width":738,"height":12}},{"id":"ec8211d9-27a3-4f4d-a4d6-b199a16f3834","block_type":"box","text":"BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, pursuant to SEC exemptive","page_number":37,"box":{"x":117,"y":480,"width":752,"height":12}},{"id":"6ffddae2-e749-470b-bfc6-43b43e2ebe09","block_type":"box","text":"relief, acts as securities lending agent to, and receives a share of securities lending revenues from, the","page_number":37,"box":{"x":117,"y":495,"width":767,"height":12}},{"id":"5515ee0e-bdcc-4f1e-b3a7-4ca98f1534b8","block_type":"box","text":"Fund. BlackRock will also receive compensation for managing the reinvestment of the cash collateral","page_number":37,"box":{"x":117,"y":511,"width":754,"height":12}},{"id":"b24e860c-b3fc-4d34-afa8-05b290ff4cb9","block_type":"box","text":"from securities lending. There are potential conflicts of interests in managing a securities lending","page_number":37,"box":{"x":116,"y":526,"width":721,"height":12}},{"id":"7503965c-75d6-4dc7-baf9-c1670c74a7cb","block_type":"box","text":"program, including but not limited to: (i) BlackRock as securities lending agent may have an incentive","page_number":37,"box":{"x":117,"y":542,"width":755,"height":12}},{"id":"bb470690-8d6f-4d95-8105-311e6bbdac59","block_type":"box","text":"to, among other things, increase or decrease the amount of securities on loan or to lend particular","page_number":37,"box":{"x":116,"y":557,"width":731,"height":12}},{"id":"6ee1a131-ca6d-4730-a744-51feb9a6eda8","block_type":"box","text":"securities in order to generate additional risk-adjusted revenue for BlackRock and its affiliates; and","page_number":37,"box":{"x":116,"y":573,"width":736,"height":12}},{"id":"0ef75df8-d8d2-4184-807c-e6d98cda1715","block_type":"box","text":"(ii) BlackRock as securities lending agent may have an incentive to allocate loans to clients that would","page_number":37,"box":{"x":117,"y":588,"width":761,"height":12}},{"id":"d9e3df17-700e-4b6d-b667-16378de4c7f4","block_type":"box","text":"provide more revenue to BlackRock. As described further below, BlackRock seeks to mitigate this","page_number":37,"box":{"x":117,"y":604,"width":729,"height":12}},{"id":"a4dca222-fcd6-4703-8351-6ea3cab781ee","block_type":"box","text":"conflict by providing its securities lending clients with equal lending opportunities over time in order to","page_number":37,"box":{"x":116,"y":619,"width":755,"height":12}},{"id":"7dd0e619-a60c-4211-92cb-2d5c58a31647","block_type":"box","text":"approximate pro rata allocation.","page_number":37,"box":{"x":116,"y":635,"width":240,"height":12}},{"id":"1d117709-7cdd-4dfa-a63f-74b7efbd327d","block_type":"box","text":"As part of its securities lending program, BlackRock indemnifies the Fund and certain other clients and/","page_number":37,"box":{"x":116,"y":663,"width":766,"height":12}},{"id":"0a18a686-a5a9-41f5-85fc-02f49f5d6db0","block_type":"box","text":"or funds against a shortfall in collateral in the event of borrower default. On a regular basis, BlackRock","page_number":37,"box":{"x":116,"y":678,"width":760,"height":13}},{"id":"a3136deb-efb6-4228-aad7-2edf90e02199","block_type":"box","text":"calculates the potential dollar exposure of collateral shortfall resulting from a borrower default (“shortfall","page_number":37,"box":{"x":116,"y":694,"width":766,"height":12}},{"id":"16183b61-5dec-4cad-9d1a-75a131390189","block_type":"box","text":"risk”) in the securities lending program. BlackRock establishes program-wide borrower limits (“credit","page_number":37,"box":{"x":117,"y":709,"width":740,"height":13}},{"id":"6d0bda0e-c16c-4602-bcea-5e8b9ccfb789","block_type":"box","text":"limits”) to actively manage borrower-specific credit exposure. BlackRock oversees the risk model that","page_number":37,"box":{"x":117,"y":725,"width":750,"height":12}},{"id":"24b4ce07-bc9b-49df-8107-7859ffa9c66a","block_type":"box","text":"calculates projected collateral shortfall values using loan-level factors such as loan and collateral type","page_number":37,"box":{"x":116,"y":740,"width":754,"height":13}},{"id":"9627ef6d-043f-457f-8263-dcc2d3c24038","block_type":"box","text":"and market value as well as specific borrower credit characteristics. When necessary, BlackRock may","page_number":37,"box":{"x":116,"y":756,"width":757,"height":12}},{"id":"36372557-9e3d-4288-b2a3-bc0c5c387bf2","block_type":"box","text":"adjust securities lending program attributes by restricting eligible collateral or reducing borrower credit","page_number":37,"box":{"x":116,"y":772,"width":755,"height":12}},{"id":"3d12744c-dc85-4105-bc8b-39ba0855b203","block_type":"box","text":"limits. As a result, the management of program-wide exposure as well as BlackRock-specific","page_number":37,"box":{"x":117,"y":787,"width":686,"height":12}},{"id":"e2cfb98d-cb6c-40e7-9d98-f7b70cd8e86d","block_type":"box","text":"indemnification exposure may affect the amount of securities lending activity BlackRock may conduct","page_number":37,"box":{"x":117,"y":802,"width":750,"height":13}},{"id":"1dbc93b3-2e18-4d74-8665-38ed86179c2e","block_type":"box","text":"at any given point in time by reducing the volume of lending opportunities for certain loans (including by","page_number":37,"box":{"x":116,"y":818,"width":767,"height":12}},{"id":"3de9825a-50b9-4c7a-951c-8ecfecc53a92","block_type":"box","text":"asset type, collateral type and/or revenue profile).","page_number":37,"box":{"x":116,"y":833,"width":373,"height":13}},{"id":"4e9de4ca-70ca-404d-b379-ffd2127ca1f9","block_type":"box","text":"BlackRock may decline to make a securities loan on behalf of the Fund, discontinue lending on behalf","page_number":37,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"e4b16710-8ef9-4e02-9e57-4d6da11c9c3d","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":37,"box":{"x":116,"y":877,"width":772,"height":12}},{"id":"daa2e16d-a4ec-4f34-bf46-a57c408f5301","block_type":"box","text":"34","page_number":37,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"262fc659-f141-4e5c-bea4-d3161db50a24","block_type":"box","text":"NM1026U-6042785-37/259","page_number":37,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9d597346-1cd9-4fc0-b7f0-d75cd5a1b883","block_type":"box","text":"to regulatory requirements and/or market rules, liquidity considerations, or credit considerations, which","page_number":38,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"c9dda722-4fd3-4ae1-ad31-c99dc7829c50","block_type":"box","text":"may impact the Fund by reducing or eliminating the volume of lending opportunities for certain types of","page_number":38,"box":{"x":117,"y":102,"width":766,"height":13}},{"id":"70fc9093-9646-447a-b20a-98c03802b96b","block_type":"box","text":"loans, loans in particular markets, loans of particular securities or types of securities, or for loans","page_number":38,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"621230c3-3018-45bd-bfa6-9984830db9bc","block_type":"box","text":"overall. In addition, some borrowers may prefer certain BlackRock lenders that provide additional","page_number":38,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"1f7f1647-7bb1-4d5b-b997-3daa60f62858","block_type":"box","text":"protections against lender default that are favored by their prudential regulation.","page_number":38,"box":{"x":117,"y":149,"width":596,"height":12}},{"id":"b8915af7-745e-4a65-ab79-81cff17c7609","block_type":"box","text":"BlackRock uses a predetermined systematic process in order to approximate pro rata allocation over","page_number":38,"box":{"x":117,"y":183,"width":752,"height":12}},{"id":"7e28b496-7aba-4858-bef0-ebff934403ed","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":38,"box":{"x":116,"y":198,"width":739,"height":12}},{"id":"274b54db-1fe0-4aa9-b893-f0797a4611bd","block_type":"box","text":"capacity pursuant to the various program limits (","page_number":38,"box":{"x":116,"y":214,"width":358,"height":12}},{"id":"ca1c890f-c6d3-45de-b9ff-f0aa3da3ba39","block_type":"box","text":"i.e.","page_number":38,"box":{"x":475,"y":214,"width":20,"height":9}},{"id":"d4d448e2-e823-42a2-9f5b-f5956afdd26f","block_type":"box","text":"indemnification exposure limit and borrower credit","page_number":38,"box":{"x":497,"y":214,"width":379,"height":12}},{"id":"ec8ff124-915b-4d51-ba07-322d8525a9f6","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":38,"box":{"x":117,"y":229,"width":747,"height":12}},{"id":"c8634e1b-ba27-436d-b803-69ad1bca9192","block_type":"box","text":"lending portfolio must also have enough inventory, either on its own or when aggregated with other","page_number":38,"box":{"x":117,"y":245,"width":738,"height":12}},{"id":"8e7dde9e-75c9-43ca-89bb-3c7d1ed1d38e","block_type":"box","text":"portfolios into one single market delivery, to satisfy the loan request. In doing so, BlackRock seeks to","page_number":38,"box":{"x":117,"y":260,"width":753,"height":12}},{"id":"68fa1af2-47de-433c-a49f-f298e684250c","block_type":"box","text":"provide equal lending opportunities for all portfolios, independent of whether BlackRock indemnifies the","page_number":38,"box":{"x":117,"y":276,"width":770,"height":12}},{"id":"c765e4fd-83bc-4802-bca7-2835722d3916","block_type":"box","text":"portfolio. Equal opportunities for lending portfolios does not guarantee equal outcomes. Specifically,","page_number":38,"box":{"x":117,"y":291,"width":744,"height":12}},{"id":"2099614d-dd58-464e-a767-d458a11ba5bb","block_type":"box","text":"short and long-term outcomes for individual clients may vary due to asset mix, asset/liability spreads","page_number":38,"box":{"x":116,"y":307,"width":749,"height":12}},{"id":"192c88dc-6468-49b6-82fe-8109d1a862c6","block_type":"box","text":"on different securities, and the overall limits imposed by the firm.","page_number":38,"box":{"x":116,"y":322,"width":483,"height":12}},{"id":"76967595-54ca-464d-bd0f-7960a338e11f","block_type":"box","text":"Purchases and sales of securities and other assets for the Fund may be aggregated with orders for","page_number":38,"box":{"x":117,"y":356,"width":740,"height":12}},{"id":"ac3c086e-0902-4970-8c06-0c58c16ec7a0","block_type":"box","text":"other BlackRock client accounts, including with accounts that pay different transaction costs solely due","page_number":38,"box":{"x":116,"y":371,"width":767,"height":12}},{"id":"54ddd409-dac9-418e-b5dc-36c030f4f86f","block_type":"box","text":"to the fact that they have different research payment arrangements. BlackRock, however, is not","page_number":38,"box":{"x":116,"y":387,"width":714,"height":12}},{"id":"63f237f4-c572-4db6-b9a6-e81b0709b4a6","block_type":"box","text":"required to aggregate orders if portfolio management decisions for different accounts are made","page_number":38,"box":{"x":117,"y":402,"width":710,"height":12}},{"id":"183e5b41-bb95-4554-bfac-90e89eef2bf1","block_type":"box","text":"separately, or if they determine that aggregating is not practicable or required, or in cases involving","page_number":38,"box":{"x":116,"y":418,"width":740,"height":12}},{"id":"d5b7ad44-4aa2-4457-9b3e-efbd0420c31c","block_type":"box","text":"client direction.","page_number":38,"box":{"x":116,"y":433,"width":117,"height":10}},{"id":"7e0b40f3-9fea-466c-a300-849d2b8f6b85","block_type":"box","text":"Prevailing trading activity frequently may make impossible the receipt of the same price or execution","page_number":38,"box":{"x":117,"y":467,"width":748,"height":12}},{"id":"45573248-1173-4c33-939a-82306e56b322","block_type":"box","text":"on the entire volume of securities purchased or sold. When this occurs, the various prices may be","page_number":38,"box":{"x":116,"y":482,"width":730,"height":12}},{"id":"e2b49b59-190b-457a-97bb-a7e365ef94e3","block_type":"box","text":"averaged, and the Fund will be charged or credited with the average price. Thus, the effect of the","page_number":38,"box":{"x":116,"y":498,"width":726,"height":12}},{"id":"ba247e8b-d21b-413e-ba19-f4c5fc76b30e","block_type":"box","text":"aggregation may operate on some occasions to the disadvantage of the Fund. In addition, under","page_number":38,"box":{"x":116,"y":513,"width":721,"height":12}},{"id":"378006e7-5244-4ba4-ab5d-ed25a0984606","block_type":"box","text":"certain circumstances, the Fund will not be charged the same commission or commission equivalent","page_number":38,"box":{"x":116,"y":529,"width":750,"height":12}},{"id":"da942fa8-8d41-45ec-a684-064f5a768ae8","block_type":"box","text":"rates in connection with an aggregated order.","page_number":38,"box":{"x":117,"y":544,"width":341,"height":12}},{"id":"063e3515-01b9-4121-9f0f-d1a840397730","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may cause the Fund or account to pay a broker or","page_number":38,"box":{"x":117,"y":578,"width":734,"height":12}},{"id":"04ac85d1-14f7-4bea-b674-c16fcb548f74","block_type":"box","text":"dealer a commission for effecting a transaction that exceeds the amount another broker or dealer","page_number":38,"box":{"x":116,"y":593,"width":727,"height":12}},{"id":"6265bd97-f653-4f89-9e3e-5fe04d526b75","block_type":"box","text":"would have charged for effecting the same transaction in recognition of the value of brokerage and","page_number":38,"box":{"x":116,"y":609,"width":737,"height":12}},{"id":"e8ef2f8d-9ee5-4fa6-bd32-eac16697e030","block_type":"box","text":"research services provided by that broker or dealer.","page_number":38,"box":{"x":117,"y":624,"width":388,"height":12}},{"id":"7437070e-9521-4b95-9fef-8cbe7f6e7ddd","block_type":"box","text":"Subject to applicable law, BlackRock may select brokers that furnish BlackRock, the Fund, other","page_number":38,"box":{"x":116,"y":658,"width":720,"height":12}},{"id":"afbf0c61-b9dc-42fd-be2a-568c31d32983","block_type":"box","text":"BlackRock client accounts or personnel, directly or through correspondent relationships, with research","page_number":38,"box":{"x":117,"y":673,"width":756,"height":12}},{"id":"ea9de04c-0570-47f3-a91a-56f82436df9c","block_type":"box","text":"or other appropriate services which provide, in BlackRock’s view, appropriate assistance to BlackRock","page_number":38,"box":{"x":116,"y":689,"width":760,"height":12}},{"id":"451a9512-3e25-4d44-91bb-d04a056b962d","block_type":"box","text":"in the investment decision-making process (including with respect to futures, fixed-price offerings and","page_number":38,"box":{"x":117,"y":704,"width":750,"height":12}},{"id":"1e02d5ce-93ad-4641-b9f0-1d0847852142","block_type":"box","text":"OTC transactions). Such research or other services may include, to the extent permitted by law,","page_number":38,"box":{"x":116,"y":720,"width":711,"height":12}},{"id":"aec7c5c2-55e9-4172-82a3-099ced703bbe","block_type":"box","text":"research reports on companies, industries and securities; economic and financial data; financial","page_number":38,"box":{"x":117,"y":735,"width":709,"height":12}},{"id":"bd9e5901-fbaf-462c-b71e-de3184778f80","block_type":"box","text":"publications; proxy analysis; trade industry seminars; computer data bases; research-oriented software","page_number":38,"box":{"x":117,"y":751,"width":764,"height":12}},{"id":"13c83071-c7ea-4cc3-8078-c1d0d9847b7f","block_type":"box","text":"and other services and products.","page_number":38,"box":{"x":116,"y":766,"width":242,"height":12}},{"id":"702ce6a7-a71d-4075-9de6-993ac23fb082","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":38,"box":{"x":117,"y":800,"width":764,"height":12}},{"id":"b09b65b9-9c39-4072-bdce-8fa03bbd4678","block_type":"box","text":"other BlackRock client accounts, including in connection with BlackRock client accounts other than","page_number":38,"box":{"x":116,"y":815,"width":732,"height":12}},{"id":"47694b0f-8f5d-4fb2-b0f2-1eb5f078cca1","block_type":"box","text":"those that pay commissions to the broker relating to the research or other service arrangements. Such","page_number":38,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"50da0f1e-22ba-47de-857d-f4e5ca6ae60a","block_type":"box","text":"products and services may disproportionately benefit other BlackRock client accounts relative to the","page_number":38,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"72afa4a1-6b54-46bf-a90d-c88ce1e64fca","block_type":"box","text":"Fund based on the amount of brokerage commissions paid by the Fund and such other BlackRock","page_number":38,"box":{"x":117,"y":862,"width":736,"height":12}},{"id":"eeba858b-a13b-418f-ae25-9d66c6d571ec","block_type":"box","text":"client accounts. For example, research or other services that are paid for through one client’s","page_number":38,"box":{"x":116,"y":877,"width":696,"height":12}},{"id":"f39206c6-7d0b-4c20-8c46-4a0ec325fe47","block_type":"box","text":"35","page_number":38,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"91a409d0-8d17-4f90-ae8b-153de7375194","block_type":"box","text":"NM1026U-6042785-38/259","page_number":38,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"dd7adf4a-47d2-4040-860e-51027c23d075","block_type":"box","text":"commissions may not be used in managing that client’s account. In addition, other BlackRock client","page_number":39,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"db80d05a-bf0f-4372-9ee1-b06011d17296","block_type":"box","text":"accounts may receive the benefit, including disproportionate benefits, of economies of scale or price","page_number":39,"box":{"x":116,"y":102,"width":748,"height":13}},{"id":"3386dc42-94da-4c25-b213-28d34d3a67fb","block_type":"box","text":"discounts in connection with products and services that may be provided to the Fund and to such other","page_number":39,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"d5d7123f-0000-43cb-bca1-bf0a10bf0e2e","block_type":"box","text":"BlackRock client accounts. To the extent that BlackRock uses soft dollars, it will not have to pay for","page_number":39,"box":{"x":117,"y":134,"width":740,"height":12}},{"id":"ecc71fe0-b790-4035-bfd5-ec9b4b09acb3","block_type":"box","text":"those products and services itself.","page_number":39,"box":{"x":116,"y":149,"width":258,"height":12}},{"id":"87325d7d-b402-473b-a7e1-148561cf08e9","block_type":"box","text":"The Fund does participate in a Commission Sharing Arrangement or Client Commission Arrangement","page_number":39,"box":{"x":116,"y":183,"width":760,"height":12}},{"id":"f2e7dc70-8a85-44cf-936e-8e1d781be48d","block_type":"box","text":"which utilizes the Fund’s assets in the form of brokerage commissions to receive eligible brokerage","page_number":39,"box":{"x":116,"y":199,"width":741,"height":12}},{"id":"b0827e9c-cadd-4a8b-9e35-335562182161","block_type":"box","text":"and research services (collectively “eligible services”) as permitted under Section 28(e) of the 1934","page_number":39,"box":{"x":116,"y":214,"width":740,"height":12}},{"id":"70ba9fd9-f349-4758-9db9-8409b180c4b6","block_type":"box","text":"Act, generally referred to as “soft dollars”. Commissions paid as soft dollars that consider the full array","page_number":39,"box":{"x":116,"y":230,"width":762,"height":12}},{"id":"cbd7a9af-c1dd-41e1-a0aa-c0ead6d64318","block_type":"box","text":"of eligible services may be higher than commissions paid for “execution only” services and may include","page_number":39,"box":{"x":116,"y":245,"width":771,"height":12}},{"id":"122470b2-7625-4cba-989d-73e2dfca3224","block_type":"box","text":"services provided by third parties where the executing broker-dealer shares a portion of the","page_number":39,"box":{"x":116,"y":261,"width":683,"height":12}},{"id":"186fbfe2-8b29-400f-aa46-117dd7b55162","block_type":"box","text":"commissions received with that third-party. A potential conflict exists when eligible services are paid for","page_number":39,"box":{"x":116,"y":276,"width":770,"height":12}},{"id":"6581f1be-257f-4614-96d2-6d835ce34683","block_type":"box","text":"through soft dollars using fund assets as they are not paid by BlackRock using its own assets.","page_number":39,"box":{"x":116,"y":292,"width":702,"height":12}},{"id":"ea2b05b6-76e7-4aaf-b12a-9c73ba1c3c5a","block_type":"box","text":"BlackRock believes eligible services obtained through soft dollars enhance its investment decision","page_number":39,"box":{"x":117,"y":307,"width":733,"height":12}},{"id":"b6d78fff-b258-4720-8c49-db8a911ffc2b","block_type":"box","text":"making capabilities, thereby increasing the prospects for higher investment returns, and recognizes","page_number":39,"box":{"x":117,"y":323,"width":741,"height":12}},{"id":"3ed14c37-f7e4-4045-ac09-56e58da1abf2","block_type":"box","text":"certain eligible services may only be made available to BlackRock through the use of soft dollars.","page_number":39,"box":{"x":116,"y":338,"width":726,"height":12}},{"id":"e59f7e8a-ed2a-4b4e-861b-0b9952bee008","block_type":"box","text":"BlackRock only engages in soft dollar transactions that comply with applicable regulatory requirements","page_number":39,"box":{"x":117,"y":354,"width":767,"height":12}},{"id":"08970017-be3f-4fbc-962c-b4e11e70d3c6","block_type":"box","text":"and guidance which includes its requirement to seek best execution.","page_number":39,"box":{"x":116,"y":369,"width":512,"height":12}},{"id":"a8f6ffb7-6d00-4cf6-8baf-86268528736d","block_type":"box","text":"BlackRock may utilize certain electronic crossing networks (“ECNs”) (including, without limitation,","page_number":39,"box":{"x":117,"y":403,"width":724,"height":12}},{"id":"152b57bb-12d1-4d13-8ed1-8f1fbf5599a8","block_type":"box","text":"ECNs in which BlackRock has an investment or other interest, to the extent permitted by applicable","page_number":39,"box":{"x":117,"y":419,"width":741,"height":12}},{"id":"1ae6490a-c1de-4b26-94b2-7215037c470a","block_type":"box","text":"law) in executing client securities transactions for certain types of securities. These ECNs may charge","page_number":39,"box":{"x":117,"y":434,"width":760,"height":12}},{"id":"97572bc0-ad94-4a28-badd-ef086099ce0c","block_type":"box","text":"fees for their services, including access fees and transaction fees. The transaction fees, which are","page_number":39,"box":{"x":116,"y":450,"width":733,"height":12}},{"id":"08410fb9-17e0-4e4a-9419-24ed069d97e5","block_type":"box","text":"similar to commissions or markups/markdowns, will generally be charged to clients and, like","page_number":39,"box":{"x":116,"y":465,"width":686,"height":12}},{"id":"827f788a-318a-4351-9def-03d192d18234","block_type":"box","text":"commissions and markups/markdowns, would generally be included in the cost of the securities","page_number":39,"box":{"x":116,"y":481,"width":715,"height":12}},{"id":"2633bf18-d9dd-4720-90f2-6ee3d53dc7e4","block_type":"box","text":"purchased. Access fees may be paid by BlackRock even though incurred in connection with executing","page_number":39,"box":{"x":117,"y":496,"width":763,"height":12}},{"id":"92487195-a561-4feb-a2b0-67cc7ab9c2ae","block_type":"box","text":"transactions on behalf of clients, including the Fund. In certain circumstances, ECNs may offer volume","page_number":39,"box":{"x":116,"y":512,"width":765,"height":12}},{"id":"c6cf80e8-8039-42a8-b405-86e7478886fa","block_type":"box","text":"discounts that will reduce the access fees typically paid by BlackRock. BlackRock will only utilize ECNs","page_number":39,"box":{"x":116,"y":527,"width":770,"height":12}},{"id":"dded5483-b381-4d50-8442-5e9358d584ab","block_type":"box","text":"consistent with its obligation to seek to obtain best execution in client transactions.","page_number":39,"box":{"x":116,"y":543,"width":616,"height":12}},{"id":"195d288e-d59f-42ce-8bba-75a360e82d59","block_type":"box","text":"BlackRock owns a minority interest in, and is a member of, Members Exchange (“MEMX”), a newly","page_number":39,"box":{"x":117,"y":577,"width":739,"height":12}},{"id":"751b7f7b-08d7-468c-95d1-1b1ff1705544","block_type":"box","text":"created U.S. stock exchange. Transactions for the Fund may be executed on MEMX if third party","page_number":39,"box":{"x":116,"y":592,"width":725,"height":13}},{"id":"fe7daa99-10a3-4508-aee3-6ab06220c0b5","block_type":"box","text":"brokers select MEMX as the appropriate venue for execution of orders placed by BlackRock traders on","page_number":39,"box":{"x":117,"y":608,"width":768,"height":12}},{"id":"b97b31e6-a000-4618-9ca6-880b4d6b2e4d","block_type":"box","text":"behalf of the Fund. In addition, transactions in Fund shares may be executed on MEMX if third party","page_number":39,"box":{"x":117,"y":623,"width":746,"height":13}},{"id":"42fab6a0-f6c8-4ea9-ba40-8e3dbe67612d","block_type":"box","text":"brokers select MEMX as the appropriate venue for the execution of such orders.","page_number":39,"box":{"x":117,"y":639,"width":600,"height":12}},{"id":"6b65e017-521f-43bb-817c-82c7e51f5bb2","block_type":"box","text":"BlackRock has adopted policies and procedures designed to prevent conflicts of interest from","page_number":39,"box":{"x":117,"y":673,"width":692,"height":12}},{"id":"6f967c27-28dc-4ca1-905c-6b03277a69ea","block_type":"box","text":"influencing proxy voting decisions that it makes on behalf of advisory clients, including the Fund, and to","page_number":39,"box":{"x":117,"y":689,"width":764,"height":12}},{"id":"2b64de15-e272-4767-bdca-94eff5dfd6a6","block_type":"box","text":"help ensure that such decisions are made in accordance with BlackRock’s fiduciary obligations to its","page_number":39,"box":{"x":117,"y":704,"width":742,"height":12}},{"id":"63f2a0da-fae3-4e2e-bbe5-47a532d999c8","block_type":"box","text":"clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting","page_number":39,"box":{"x":116,"y":720,"width":748,"height":12}},{"id":"cc56622f-c14b-464e-bca5-f94b499068ad","block_type":"box","text":"decisions of BlackRock may have the effect of favoring the interests of other clients or businesses of","page_number":39,"box":{"x":116,"y":735,"width":746,"height":12}},{"id":"e1452cad-f670-4f70-8037-7960e4563755","block_type":"box","text":"other divisions or units of BlackRock, provided that BlackRock believes such voting decisions to be in","page_number":39,"box":{"x":116,"y":751,"width":751,"height":12}},{"id":"d8d26154-6ae2-4033-ad17-4d584457558f","block_type":"box","text":"accordance with its fiduciary obligations. For a more detailed discussion of these policies and","page_number":39,"box":{"x":116,"y":766,"width":691,"height":12}},{"id":"0b55c6de-3d93-4aa1-ba8d-be79debced71","block_type":"box","text":"procedures, see the","page_number":39,"box":{"x":117,"y":782,"width":147,"height":12}},{"id":"121f1421-9694-4b80-9a1c-9a5b34466794","block_type":"box","text":"Proxy Voting Policy","page_number":39,"box":{"x":270,"y":782,"width":145,"height":12}},{"id":"5141ffd9-08a2-4f82-a7d9-244734c1e31c","block_type":"box","text":"section in this SAI.","page_number":39,"box":{"x":419,"y":782,"width":137,"height":9}},{"id":"4beff56a-69ba-485f-a305-9ed6bbda8b0b","block_type":"box","text":"It is also possible that, from time to time, BlackRock and/or its advisory clients (including other funds","page_number":39,"box":{"x":117,"y":816,"width":742,"height":12}},{"id":"61319aab-a542-44f8-af89-9f4827910533","block_type":"box","text":"and separately managed accounts) may, subject to compliance with applicable law, purchase and hold","page_number":39,"box":{"x":116,"y":831,"width":768,"height":12}},{"id":"e89a69c3-2747-4813-a65a-7fa161625924","block_type":"box","text":"shares of the Fund. Increasing the Fund’s assets may enhance investment flexibility and diversification","page_number":39,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"d5c21031-fd34-44ec-9b1a-1b391ccfe7a7","block_type":"box","text":"and may contribute to economies of scale that tend to reduce the Fund’s expense ratio. BlackRock","page_number":39,"box":{"x":116,"y":862,"width":738,"height":12}},{"id":"25620846-2c12-476d-a2b9-a11f60d470fc","block_type":"box","text":"reserves the right, subject to compliance with applicable law, to sell into the market or redeem in","page_number":39,"box":{"x":117,"y":878,"width":718,"height":12}},{"id":"5ae567a0-774f-40a2-a325-762ab5d5fff1","block_type":"box","text":"36","page_number":39,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"90b2dd0e-904e-46a7-b9c9-abbd5274cd67","block_type":"box","text":"NM1026U-6042785-39/259","page_number":39,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1dffb14d-a631-4a9f-8b76-de2f19ed8374","block_type":"box","text":"Creation Units through an Authorized Participant at any time some or all of the shares of the Fund","page_number":40,"box":{"x":117,"y":87,"width":731,"height":12}},{"id":"1d6d072a-30a3-41de-a4f4-5a61d5d4bd22","block_type":"box","text":"acquired for its own accounts or the account of a BlackRock advisory client. A large sale or redemption","page_number":40,"box":{"x":116,"y":102,"width":769,"height":13}},{"id":"72f27c25-b284-4ad1-a68d-49d23d57c7c9","block_type":"box","text":"of shares of the Fund by BlackRock itself or a BlackRock advisory client could significantly reduce the","page_number":40,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"440e1b21-3392-4ca2-a92a-41f47bf5f382","block_type":"box","text":"asset size of the Fund, which might have an adverse effect on the Fund’s liquidity, investment","page_number":40,"box":{"x":116,"y":134,"width":701,"height":12}},{"id":"9f869944-39f8-4d93-9956-eb50a6fbe52c","block_type":"box","text":"flexibility, portfolio diversification, expense ratio or ability to comply with the listing requirements for the","page_number":40,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"0233e3e5-a1c8-405c-8515-b58362c7c20a","block_type":"box","text":"Fund.","page_number":40,"box":{"x":117,"y":165,"width":46,"height":9}},{"id":"3c555df1-334f-4553-be2d-45386c5bf0d0","block_type":"box","text":"It is possible that the Fund may invest in securities of, or engage in transactions with, companies in","page_number":40,"box":{"x":117,"y":196,"width":739,"height":12}},{"id":"690074a4-f40e-4004-851c-c920df52aed2","block_type":"box","text":"which BlackRock has significant debt or equity investments or other interests. The Fund may also","page_number":40,"box":{"x":116,"y":211,"width":729,"height":12}},{"id":"0cda2986-cb1c-4b30-8694-1862f533de30","block_type":"box","text":"invest in issuances (such as structured notes) by entities for which BlackRock provides and is","page_number":40,"box":{"x":117,"y":227,"width":699,"height":12}},{"id":"a0947d32-3dbc-4c2a-9b40-3eb04a88d23c","block_type":"box","text":"compensated for cash management services relating to the proceeds from the sale of such issuances.","page_number":40,"box":{"x":116,"y":242,"width":765,"height":12}},{"id":"71b6c4a5-b6b7-4f50-a4bc-d0bfa5370e18","block_type":"box","text":"In making investment decisions for the Fund, BlackRock is not permitted to obtain or use material","page_number":40,"box":{"x":117,"y":258,"width":727,"height":12}},{"id":"30dc38fa-2c03-4fdf-b82e-a2ec966828d7","block_type":"box","text":"non-public information acquired by any unit of BlackRock, in the course of these activities. In addition,","page_number":40,"box":{"x":117,"y":273,"width":758,"height":12}},{"id":"791b7947-3c20-49dc-b3ab-4ee84ef6796b","block_type":"box","text":"from time to time, the activities of BlackRock may limit the Fund’s flexibility in purchases and sales of","page_number":40,"box":{"x":116,"y":289,"width":753,"height":12}},{"id":"5e827902-6ca2-411a-ac69-d9c6e48a8eb1","block_type":"box","text":"securities. As indicated below, BlackRock may engage in transactions with companies in which","page_number":40,"box":{"x":116,"y":304,"width":710,"height":12}},{"id":"28acff8c-4c24-4b91-816c-69743953f026","block_type":"box","text":"BlackRock-advised funds or other clients of BlackRock have an investment.","page_number":40,"box":{"x":117,"y":320,"width":566,"height":9}},{"id":"cc337af8-53ea-4dee-9316-527c22371f2b","block_type":"box","text":"BlackRock and its personnel and other financial service providers may have interests in promoting","page_number":40,"box":{"x":117,"y":351,"width":733,"height":12}},{"id":"b04d7674-6f0a-4333-9f6f-6cec5fb9f7fd","block_type":"box","text":"sales of the Fund. With respect to BlackRock and its personnel, the remuneration and profitability","page_number":40,"box":{"x":116,"y":366,"width":727,"height":12}},{"id":"58629bdf-a009-4305-a7ad-53c00815b933","block_type":"box","text":"relating to services to and sales of the Fund or other products may be greater than remuneration and","page_number":40,"box":{"x":117,"y":382,"width":753,"height":12}},{"id":"2a234995-e817-4f2a-8054-df6c50f02638","block_type":"box","text":"profitability relating to services to and sales of certain funds or other products that might be provided or","page_number":40,"box":{"x":117,"y":397,"width":767,"height":12}},{"id":"2fea3e8a-d1db-49f4-b92d-5dbc43f3541a","block_type":"box","text":"offered. BlackRock and its sales personnel may directly or indirectly receive a portion of the fees and","page_number":40,"box":{"x":116,"y":413,"width":753,"height":12}},{"id":"f0261913-fdcb-4e18-857b-a95e10dcc2d2","block_type":"box","text":"commissions charged to the Fund or its shareholders. BlackRock and its advisory or other personnel","page_number":40,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"d8718f15-1cb8-4a33-bfae-363a125f3be9","block_type":"box","text":"may also benefit from increased amounts of assets under management. Fees and commissions may","page_number":40,"box":{"x":117,"y":444,"width":752,"height":12}},{"id":"ffb4294b-73d7-45ae-8586-d3396636526d","block_type":"box","text":"also be higher than for other products or services, and the remuneration and profitability to BlackRock","page_number":40,"box":{"x":116,"y":459,"width":761,"height":12}},{"id":"73950af3-4bc4-49de-a76a-4abc523c3f8a","block_type":"box","text":"and such personnel resulting from transactions on behalf of or management of the Fund may be","page_number":40,"box":{"x":116,"y":475,"width":719,"height":12}},{"id":"c3f89423-0dc6-4c50-bc7c-eeb8a1d59b19","block_type":"box","text":"greater than the remuneration and profitability resulting from other funds or products.","page_number":40,"box":{"x":116,"y":490,"width":634,"height":12}},{"id":"04b88905-7a43-406a-a879-9025039dca8e","block_type":"box","text":"BlackRock may provide valuation assistance to certain clients with respect to certain securities or other","page_number":40,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"d2d2d067-a6d2-4718-8354-d83a171900ce","block_type":"box","text":"investments and the valuation recommendations made for such clients’ accounts may differ from the","page_number":40,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"39f8b30a-3e1d-4532-8521-e0a31bdcd47b","block_type":"box","text":"valuations for the same securities or investments assigned by the Fund’s pricing vendors, especially if","page_number":40,"box":{"x":116,"y":552,"width":761,"height":12}},{"id":"23227b15-2ea2-4c12-a00b-54367830a05a","block_type":"box","text":"such valuations are based on broker-dealer quotes or other data sources unavailable to the Fund’s","page_number":40,"box":{"x":116,"y":568,"width":739,"height":12}},{"id":"7c11fda6-3174-439c-84a1-5cef6cfa9f3b","block_type":"box","text":"pricing vendors. While BlackRock will generally communicate its valuation information or","page_number":40,"box":{"x":117,"y":583,"width":660,"height":12}},{"id":"f376f56f-7f76-4990-8482-dc2e6c175570","block_type":"box","text":"determinations to the Fund’s pricing vendors and/or fund accountants, there may be instances where","page_number":40,"box":{"x":116,"y":599,"width":755,"height":12}},{"id":"69bf9158-0664-4eee-aba8-5267c4170c50","block_type":"box","text":"the Fund’s pricing vendors or fund accountants assign a different valuation to a security or other","page_number":40,"box":{"x":116,"y":614,"width":717,"height":12}},{"id":"a95e1d48-a5af-40c6-ad93-ac95a60d01f1","block_type":"box","text":"investment than the valuation for such security or investment determined or recommended by","page_number":40,"box":{"x":117,"y":630,"width":699,"height":12}},{"id":"50cb47b8-52f7-4c22-a69e-4d46882147de","block_type":"box","text":"BlackRock.","page_number":40,"box":{"x":117,"y":645,"width":88,"height":10}},{"id":"9b2d2a51-68b8-47ec-9923-29cedd48cd1b","block_type":"box","text":"As disclosed in more detail in the","page_number":40,"box":{"x":116,"y":676,"width":245,"height":10}},{"id":"083e3ea1-fa8a-4094-a739-ea91e68bcab7","block_type":"box","text":"Determination of Net Asset Value","page_number":40,"box":{"x":367,"y":676,"width":248,"height":10}},{"id":"74189ffb-b6f7-4019-9c59-6fd95124e88d","block_type":"box","text":"section in this SAI, when market","page_number":40,"box":{"x":620,"y":676,"width":239,"height":11}},{"id":"e6f9fd77-ef73-4971-99c8-ba46a1948d2a","block_type":"box","text":"quotations are not readily available or are believed by BFA to be unreliable, the Fund’s investments are","page_number":40,"box":{"x":116,"y":692,"width":766,"height":12}},{"id":"d0d949b6-c7e4-4266-9dd0-a488a8a57817","block_type":"box","text":"valued at fair value by BFA. BFA has been designated as the Fund’s valuation designee pursuant to","page_number":40,"box":{"x":116,"y":707,"width":743,"height":12}},{"id":"c0853d84-4a66-4932-8a8b-ad22f7fa4e57","block_type":"box","text":"Rule 2a-5 under the Investment Company Act and acts through BFA’s Rule 2a-5 Committee (the","page_number":40,"box":{"x":117,"y":723,"width":717,"height":12}},{"id":"f59f651d-a0eb-4e2d-b139-a91c78dd35ec","block_type":"box","text":"“2a-5 Committee”), with assistance from other BFA pricing committees and in accordance with BFA’s","page_number":40,"box":{"x":116,"y":738,"width":750,"height":12}},{"id":"7d22ccd6-cbd6-4cb2-8b9a-a7fe57d222ee","block_type":"box","text":"policies and procedures (the “Valuation Procedures”). When determining a “fair value price,” the","page_number":40,"box":{"x":117,"y":754,"width":710,"height":12}},{"id":"5499a82f-a311-464f-adae-389139633f56","block_type":"box","text":"2a-5 Committee seeks to determine the price that the Fund might reasonably expect to receive from","page_number":40,"box":{"x":116,"y":769,"width":742,"height":12}},{"id":"93126b81-0319-45f5-8e3f-ccd9ce654462","block_type":"box","text":"the current sale of that asset or liability in an arm’s-length transaction. The price generally may not be","page_number":40,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"c85396d5-eac1-46e3-b860-a94d1e2d6ecb","block_type":"box","text":"determined based on what the Fund might reasonably expect to receive for selling an asset or liability","page_number":40,"box":{"x":116,"y":800,"width":754,"height":12}},{"id":"82b10773-bcf9-4c85-a8dd-8cc3148bd456","block_type":"box","text":"at a later time or if it holds the asset or liability to maturity. While fair value determinations will be based","page_number":40,"box":{"x":116,"y":816,"width":764,"height":12}},{"id":"82d3fd7e-6660-4e2e-a26a-d1aed377006f","block_type":"box","text":"upon all available factors that BFA deems relevant at the time of the determination, and may be based","page_number":40,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"f85a3112-40fd-4638-8aa3-65d24ac5f67e","block_type":"box","text":"on analytical values determined by BFA using proprietary or third party valuation models, fair value","page_number":40,"box":{"x":116,"y":847,"width":738,"height":12}},{"id":"de07ef4d-332c-45e7-b8a7-7c2143ef6a33","block_type":"box","text":"represents only a good faith approximation of the value of an asset or liability. The fair value of one or","page_number":40,"box":{"x":117,"y":862,"width":758,"height":12}},{"id":"fe3970a0-35b6-4b88-8eb8-9ce02bee04ff","block_type":"box","text":"more assets or liabilities may not, in retrospect, be the price at which those assets or liabilities could","page_number":40,"box":{"x":117,"y":878,"width":745,"height":12}},{"id":"797c2301-250c-4c66-a254-78fa3dc93a83","block_type":"box","text":"37","page_number":40,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"06195b88-fbd2-441e-b865-315d340ffc69","block_type":"box","text":"NM1026U-6042785-40/259","page_number":40,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"70be9428-d415-4095-b61c-a4baae0b5aa1","block_type":"box","text":"have been sold during the period in which the particular fair values were used in determining the","page_number":41,"box":{"x":117,"y":87,"width":718,"height":12}},{"id":"10b2802c-8d30-457d-b6bd-8ef93c3a758f","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":41,"box":{"x":117,"y":102,"width":760,"height":13}},{"id":"ddce1f13-2b73-4c61-93b9-e2afa12c3c04","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":41,"box":{"x":116,"y":118,"width":771,"height":12}},{"id":"5a3d3093-7d49-480a-8784-2a42b565113d","block_type":"box","text":"the economic interest of existing shareholders and may affect the amount of revenue received by BFA","page_number":41,"box":{"x":116,"y":134,"width":763,"height":12}},{"id":"f5d999c5-4050-469c-9cd5-9cf959d1bb21","block_type":"box","text":"with respect to services for which it receives an asset-based fee.","page_number":41,"box":{"x":116,"y":149,"width":484,"height":12}},{"id":"5f2bbfef-616a-4c18-87b9-9f46046b9d53","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":41,"box":{"x":116,"y":180,"width":720,"height":12}},{"id":"eead25c7-8036-469e-a7f8-03e9af0ecf58","block_type":"box","text":"investments in any money market fund or similarly-managed private fund advised or managed by","page_number":41,"box":{"x":117,"y":196,"width":725,"height":12}},{"id":"0d057e6f-698d-476b-b2a9-2c49a241678b","block_type":"box","text":"BlackRock. In connection with any such investments, the Fund, to the extent permitted by the","page_number":41,"box":{"x":117,"y":211,"width":697,"height":12}},{"id":"829a3a59-6a95-455f-b151-742ff5cc682b","block_type":"box","text":"Investment Company Act, may pay its share of expenses of a money market fund or other similarly","page_number":41,"box":{"x":117,"y":227,"width":739,"height":12}},{"id":"00595ba4-687f-497d-93c4-3864b3c63b1c","block_type":"box","text":"managed private fund in which it invests, which may result in the Fund bearing some additional","page_number":41,"box":{"x":117,"y":242,"width":709,"height":12}},{"id":"96df3f3c-0225-45fb-abcb-bc7ba02e8957","block_type":"box","text":"expenses.","page_number":41,"box":{"x":116,"y":260,"width":81,"height":9}},{"id":"78c8e200-3a8d-46f8-8c8c-4f62d6c4af7b","block_type":"box","text":"BlackRock and its directors, officers and employees, may buy and sell securities or other investments","page_number":41,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"038011eb-30f8-4a76-9d75-2c29d8afda92","block_type":"box","text":"for their own accounts and may have conflicts of interest with respect to investments made on behalf of","page_number":41,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"c6f6a934-484e-4387-ba2b-b97f79dc8b64","block_type":"box","text":"the Fund. As a result of differing trading and investment strategies or constraints, positions may be","page_number":41,"box":{"x":116,"y":320,"width":737,"height":12}},{"id":"cf283591-501d-4e9d-b720-ff90c749e8d1","block_type":"box","text":"taken by directors, officers and employees of BlackRock that are the same, different from or made at","page_number":41,"box":{"x":116,"y":335,"width":752,"height":12}},{"id":"e2e2b2aa-b740-42fd-9c73-e0f8b3fdf046","block_type":"box","text":"different times than positions taken for the Fund. To lessen the possibility that the Fund will be","page_number":41,"box":{"x":116,"y":351,"width":703,"height":12}},{"id":"3944f8ef-0d8f-470a-bc59-966806b80536","block_type":"box","text":"adversely affected by this personal trading, the Fund, BFA and BlackRock each have adopted a Code","page_number":41,"box":{"x":116,"y":366,"width":761,"height":12}},{"id":"bc01e3c1-2373-49cf-8710-6765010a23da","block_type":"box","text":"of Ethics in compliance with Section 17(j) of the Investment Company Act that restricts securities","page_number":41,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"c3926233-3a70-4f8f-9a66-a8f3c3084bcc","block_type":"box","text":"trading in the personal accounts of investment professionals and others who normally come into","page_number":41,"box":{"x":116,"y":397,"width":717,"height":12}},{"id":"d96332b5-cb63-47aa-8c7f-a144ce261432","block_type":"box","text":"possession of information regarding the Fund’s portfolio transactions. Each Code of Ethics is also","page_number":41,"box":{"x":117,"y":413,"width":727,"height":12}},{"id":"daa71e0b-7304-445a-9958-3cfa5cf23c08","block_type":"box","text":"available on the EDGAR Database on the Commission’s Internet site at http://www.sec.gov, and","page_number":41,"box":{"x":116,"y":428,"width":719,"height":12}},{"id":"29879f05-6a15-47f9-bc80-041cb188813f","block_type":"box","text":"copies may be obtained, after paying a duplicating fee, by e-mail at publicinfo@sec.gov.","page_number":41,"box":{"x":116,"y":444,"width":659,"height":12}},{"id":"1247c07b-7c25-4268-8c80-d86a29b87d10","block_type":"box","text":"BlackRock will not purchase securities or other property from, or sell securities or other property to, the","page_number":41,"box":{"x":117,"y":475,"width":767,"height":12}},{"id":"ecf8bb20-b927-4dbf-9f5a-923482f9327c","block_type":"box","text":"Fund, except that the Fund may in accordance with rules or guidance adopted under the Investment","page_number":41,"box":{"x":117,"y":490,"width":747,"height":12}},{"id":"b447d556-e0b9-43b1-aaf1-41f4332037a7","block_type":"box","text":"Company Act engage in transactions with another fund or accounts that are affiliated with the Fund as","page_number":41,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"219e2666-50c7-4762-9318-d1f50ae6130e","block_type":"box","text":"a result of common officers, directors, or investment advisers or pursuant to exemptive orders granted","page_number":41,"box":{"x":116,"y":521,"width":763,"height":12}},{"id":"e902e696-1147-402c-9b55-37b9a8565eb0","block_type":"box","text":"to the Fund and/or BlackRock by the Commission. These transactions would be effected in","page_number":41,"box":{"x":116,"y":537,"width":680,"height":12}},{"id":"bb262382-d93f-4f14-b567-0e1f041bee5e","block_type":"box","text":"circumstances in which BlackRock determined that it would be appropriate for the Fund to purchase","page_number":41,"box":{"x":116,"y":552,"width":746,"height":12}},{"id":"42e0f2b9-3d8d-4712-8d69-0ec047f10979","block_type":"box","text":"and another client of BlackRock to sell, or the Fund to sell and another client of BlackRock to","page_number":41,"box":{"x":116,"y":568,"width":694,"height":11}},{"id":"45e819d9-521c-4f98-8a1c-219f6496fd7d","block_type":"box","text":"purchase, the same security or instrument on the same day. From time to time, the activities of the","page_number":41,"box":{"x":117,"y":583,"width":736,"height":12}},{"id":"85c05273-8c68-4ac6-b715-7c51392af639","block_type":"box","text":"Fund may be restricted because of regulatory requirements applicable to BlackRock and/or","page_number":41,"box":{"x":117,"y":599,"width":681,"height":12}},{"id":"8ff88989-f3a0-46ce-ac97-082205bcf965","block_type":"box","text":"BlackRock’s internal policies designed to comply with, limit the applicability of, or otherwise relate to","page_number":41,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"b41a11e0-cf1e-4194-aace-307f1178edd6","block_type":"box","text":"such requirements. A client not advised by BlackRock would not be subject to some of those","page_number":41,"box":{"x":116,"y":630,"width":692,"height":12}},{"id":"a9168a4d-e909-42bb-a747-043a8c1fdf9c","block_type":"box","text":"considerations. There may be periods when BlackRock may not initiate or recommend certain types of","page_number":41,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"4b12fe87-b69a-4129-8c1d-b82b5d72ff21","block_type":"box","text":"transactions, or may otherwise restrict or limit its advice in certain securities or instruments issued by","page_number":41,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"4e2b08ab-23fc-4086-9f1f-13d87a53a38c","block_type":"box","text":"or related to companies for which BlackRock is performing advisory or other services or has proprietary","page_number":41,"box":{"x":116,"y":676,"width":767,"height":12}},{"id":"2efc137f-9f5f-4886-8350-955bea111ad8","block_type":"box","text":"positions. For example, when BlackRock is engaged to provide advisory or risk management services","page_number":41,"box":{"x":117,"y":692,"width":754,"height":12}},{"id":"a5e480d0-65fe-4803-8b01-76d353df8a23","block_type":"box","text":"for a company, BlackRock may be prohibited from or limited in purchasing or selling securities of that","page_number":41,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"3dfb556d-8913-4665-a660-de7a581432b3","block_type":"box","text":"company on behalf of the Fund, particularly where such services result in BlackRock obtaining material","page_number":41,"box":{"x":116,"y":723,"width":764,"height":12}},{"id":"9b54c579-0fd6-49a1-97fa-cd9a839d6230","block_type":"box","text":"non-public information about the company (e.g., in connection with participation in a creditors’","page_number":41,"box":{"x":117,"y":738,"width":693,"height":12}},{"id":"31e41d31-9d35-45be-9d53-cab3ccd5e9c8","block_type":"box","text":"committee). Similar situations could arise if personnel of BlackRock serve as directors of companies","page_number":41,"box":{"x":116,"y":754,"width":742,"height":12}},{"id":"80f4f781-1e7c-4036-b264-4f7baa0c941d","block_type":"box","text":"the securities of which the Fund wishes to purchase or sell. However, if permitted by applicable law,","page_number":41,"box":{"x":116,"y":769,"width":739,"height":12}},{"id":"b43c67de-143f-40fc-85f4-058cb62494ef","block_type":"box","text":"and where consistent with BlackRock’s policies and procedures (including the necessary","page_number":41,"box":{"x":116,"y":785,"width":658,"height":12}},{"id":"e6f98bf2-39c5-4b1e-9c57-847849c6b227","block_type":"box","text":"implementation of appropriate information barriers), the Fund may purchase securities or instruments","page_number":41,"box":{"x":117,"y":800,"width":749,"height":12}},{"id":"11b07aa3-8b5d-43a3-936b-8df3028da8fb","block_type":"box","text":"that are issued by such companies, are the subject of an advisory or risk management assignment by","page_number":41,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"01dd66d7-7cc1-42ee-82d8-81c34edf65b9","block_type":"box","text":"BlackRock, or where personnel of BlackRock are directors or officers of the issuer.","page_number":41,"box":{"x":117,"y":831,"width":617,"height":12}},{"id":"4c101f29-b37f-4b85-8c94-024657415d14","block_type":"box","text":"BlackRock has adopted and implemented policies and procedures that are designed to address","page_number":41,"box":{"x":117,"y":862,"width":714,"height":12}},{"id":"3c81b4f3-2961-4bfa-8280-ecb9c059a273","block_type":"box","text":"potential conflicts that arise in connection with the advisory services BlackRock provides to the Fund","page_number":41,"box":{"x":117,"y":878,"width":749,"height":12}},{"id":"49c64ed4-d2fd-4ed8-8d06-e032bb461de2","block_type":"box","text":"38","page_number":41,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"577344aa-9bee-4370-b249-348706ecfa03","block_type":"box","text":"NM1026U-6042785-41/259","page_number":41,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a82e77aa-6efe-48dc-81fe-5f9fdc96532f","block_type":"box","text":"and other clients. Certain BlackRock advisory personnel may take views, and make decisions or","page_number":42,"box":{"x":116,"y":87,"width":719,"height":12}},{"id":"f4dca8f3-cdaf-4560-adc5-eb5576ee2a7e","block_type":"box","text":"recommendations, that are different than or opposite those of other BlackRock advisory personnel.","page_number":42,"box":{"x":117,"y":102,"width":737,"height":13}},{"id":"e336000b-bcde-4e29-8e72-8bd650432dae","block_type":"box","text":"Certain portfolio management teams within BlackRock may make decisions or take (or refrain from","page_number":42,"box":{"x":117,"y":118,"width":737,"height":12}},{"id":"b54a6490-b7de-4378-8d4e-e409f0a06f70","block_type":"box","text":"taking) actions with respect to clients they advise in a manner different than or adverse to the decisions","page_number":42,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"a7142da9-1839-4d90-b2d4-5ee93e5b1d63","block_type":"box","text":"made or the actions taken (or not taken) by the Fund’s portfolio management teams. The various","page_number":42,"box":{"x":117,"y":149,"width":723,"height":12}},{"id":"c26a4311-4c8c-477e-82cc-568580bf787a","block_type":"box","text":"portfolio management teams may not share information with each other, including as a result of certain","page_number":42,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"bb26c735-3043-40bd-a1bc-628df5f0f790","block_type":"box","text":"information barriers and other policies, and will not have any obligation or other duty to do so.","page_number":42,"box":{"x":117,"y":180,"width":697,"height":12}},{"id":"0ca72bba-d980-4d30-adf9-9420167e4a18","block_type":"box","text":"BlackRock has established certain information barriers and other policies to address the sharing of","page_number":42,"box":{"x":117,"y":211,"width":736,"height":12}},{"id":"56eb24fa-3a23-4c1d-a7d4-1c373f9e506d","block_type":"box","text":"information between different businesses within BlackRock, including with respect to personnel","page_number":42,"box":{"x":117,"y":227,"width":709,"height":12}},{"id":"55d13e33-acc7-4857-a9cb-7a98486fbb6b","block_type":"box","text":"responsible with managing portfolios and voting proxies with respect to certain index equity portfolios","page_number":42,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"3755d022-2b59-47b0-bad8-783c2bcfd230","block_type":"box","text":"versus those responsible for managing portfolios and voting proxies with respect to all other portfolios.","page_number":42,"box":{"x":116,"y":258,"width":763,"height":12}},{"id":"681bdb6e-b4f3-4a43-bea0-3fb70dc4b9bb","block_type":"box","text":"As a result of information barriers, certain units of BlackRock generally will not have access, or will","page_number":42,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"cee282f0-af5c-42c1-82ff-ecbb311ae76a","block_type":"box","text":"have limited access, to certain information and personnel, including senior personnel, in other units of","page_number":42,"box":{"x":117,"y":289,"width":757,"height":12}},{"id":"b8ed33ed-bcb3-4700-a08c-3836e1f479bc","block_type":"box","text":"BlackRock, and generally will not manage the funds with the benefit of information possessed by such","page_number":42,"box":{"x":117,"y":304,"width":761,"height":12}},{"id":"17107a6a-976c-48a4-823c-e1c28e41a586","block_type":"box","text":"other units. Therefore, BlackRock may not be able to review potential investments for the Fund with the","page_number":42,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"e7d8e510-c93e-496b-8d15-4dd4a3f2c39c","block_type":"box","text":"benefit of information held by certain areas of BlackRock.","page_number":42,"box":{"x":117,"y":335,"width":429,"height":12}},{"id":"f8efcf14-96cd-41bb-8904-387702d6410a","block_type":"box","text":"BlackRock may determine to move certain personnel, businesses, or business units from one side of","page_number":42,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"82a59702-1210-403d-81bf-274e0cedbab9","block_type":"box","text":"an information barrier to the other side of the information barrier. In connection therewith, BlackRock","page_number":42,"box":{"x":116,"y":382,"width":750,"height":11}},{"id":"0fca07e3-e78b-4e39-8b2b-79d93cc0bbba","block_type":"box","text":"personnel, businesses, and business units that were moved will no longer have access to the","page_number":42,"box":{"x":117,"y":397,"width":697,"height":12}},{"id":"e68f668f-f642-429d-8370-7b7cddb34fc6","block_type":"box","text":"information and personnel from the side of the information barrier from which they were moved.","page_number":42,"box":{"x":117,"y":413,"width":712,"height":12}},{"id":"84aa1124-5ed6-4d8e-878b-17015a78cd14","block_type":"box","text":"Information obtained in connection with such changes to information barriers may limit or restrict the","page_number":42,"box":{"x":117,"y":428,"width":746,"height":12}},{"id":"316cd234-10af-475c-878e-a5ac22e5bdc6","block_type":"box","text":"ability of BlackRock to engage in or otherwise effect transactions on behalf of the Fund (including","page_number":42,"box":{"x":116,"y":444,"width":726,"height":12}},{"id":"aed8c429-67a0-48dc-8648-703a1d068e2f","block_type":"box","text":"purchasing or selling securities that BlackRock may otherwise have purchased or sold for a client in","page_number":42,"box":{"x":117,"y":459,"width":743,"height":12}},{"id":"6ffc2ba7-aa3a-440c-ba1f-df33dd44a09b","block_type":"box","text":"the absence of a change to an information barrier). Information barriers may not have their intended","page_number":42,"box":{"x":116,"y":475,"width":746,"height":12}},{"id":"3f8d535c-a17f-4cf0-98e6-60dba33ddcd0","block_type":"box","text":"impact due to, for example, changes in applicable law or inadvertent crossings of the barriers, and","page_number":42,"box":{"x":117,"y":490,"width":732,"height":12}},{"id":"b736cc77-5bb8-4b86-823e-e03d059e02e1","block_type":"box","text":"actions by personnel on one side of a barrier may impact the potential actions of personnel on the","page_number":42,"box":{"x":116,"y":506,"width":731,"height":12}},{"id":"67601481-7230-4526-9cc5-1c3f7b1d5f54","block_type":"box","text":"other side of a barrier.","page_number":42,"box":{"x":116,"y":521,"width":169,"height":10}},{"id":"11b99211-fc67-4ff0-b1ea-1fc01a1cb18d","block_type":"box","text":"Although the information barriers are intended to allow for independent portfolio management decision","page_number":42,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"1ec6ada9-aec7-43cf-90ae-35605dbe1e95","block_type":"box","text":"making and proxy voting among certain BlackRock businesses, the investment activities of BlackRock","page_number":42,"box":{"x":117,"y":568,"width":761,"height":12}},{"id":"60a78965-5ec8-4cb3-9f67-bd718021ead8","block_type":"box","text":"for BlackRock clients, as well as BlackRock’s proprietary accounts, may nonetheless limit the","page_number":42,"box":{"x":116,"y":583,"width":697,"height":12}},{"id":"efb58ef2-06d4-48ed-920a-586d7326b767","block_type":"box","text":"investment strategies and rights of other clients (including the Fund). As BlackRock’s assets under","page_number":42,"box":{"x":117,"y":599,"width":735,"height":12}},{"id":"17158c65-96f5-4460-9936-a064bbd2ded7","block_type":"box","text":"management increases, BlackRock clients may face greater negative impacts due to ownership","page_number":42,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"f3fd13b0-9f74-4b13-b9f5-7dd300f378ab","block_type":"box","text":"restrictions and limitations imposed by laws, regulations, rules, regulators, or issuers. 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BlackRock clients can be subject to more than one ownership limitation","page_number":42,"box":{"x":116,"y":862,"width":698,"height":12}},{"id":"3bff3a83-e8eb-4607-a00e-bd30275cd5d6","block_type":"box","text":"39","page_number":42,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e9a39e22-b21e-4557-9332-14370149ae3e","block_type":"box","text":"NM1026U-6042785-42/259","page_number":42,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"79f83355-3ad6-4a6f-9595-13e12d700df8","block_type":"box","text":"depending on each client’s holdings, and each ownership limitation can impact multiple securities held","page_number":43,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"7fea112f-8821-4183-a635-b9834e425658","block_type":"box","text":"by the client. Certain clients or shareholders may have their own overlapping obligations to monitor","page_number":43,"box":{"x":117,"y":102,"width":738,"height":13}},{"id":"2f788b89-2e48-41f1-ad1c-b92fd0e733dc","block_type":"box","text":"their compliance with ownership limitations across their investments.","page_number":43,"box":{"x":116,"y":118,"width":513,"height":12}},{"id":"6c67f377-4c4d-4d2a-a541-1aa081cf9b8c","block_type":"box","text":"If certain aggregate ownership thresholds are reached either through the actions of BlackRock or a","page_number":43,"box":{"x":117,"y":152,"width":738,"height":12}},{"id":"b3ba060b-e290-4994-b16a-ff87454ee264","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":43,"box":{"x":117,"y":168,"width":758,"height":12}},{"id":"e370eaf1-5475-4150-b0f4-1c49983319b6","block_type":"box","text":"clients to purchase or dispose of investments, or exercise rights (including voting) or undertake","page_number":43,"box":{"x":116,"y":183,"width":709,"height":12}},{"id":"efbd17af-f188-4ef6-a2e9-d0fe5b6fdc51","block_type":"box","text":"business transactions, may be restricted by law, regulation, rule, or organizational documents or","page_number":43,"box":{"x":117,"y":199,"width":717,"height":12}},{"id":"1a69cad8-9ade-47b7-b0f1-2dca913f3a11","block_type":"box","text":"otherwise impaired. For example, to meet the requirements of an ownership limitation or restriction, a","page_number":43,"box":{"x":116,"y":214,"width":756,"height":12}},{"id":"1faba55b-e609-4665-b4f0-ee6e8eb38f74","block_type":"box","text":"client may be unable to purchase or directly hold a security the client would otherwise purchase or","page_number":43,"box":{"x":116,"y":230,"width":733,"height":12}},{"id":"fdd6a49d-ced1-4656-a270-eced103c3401","block_type":"box","text":"hold. The limitation or restriction may be based on the holdings of other BlackRock clients instead of","page_number":43,"box":{"x":117,"y":245,"width":747,"height":12}},{"id":"9546df67-81c2-4b7e-a53f-856f55545414","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":43,"box":{"x":116,"y":261,"width":771,"height":12}},{"id":"89c02e4e-5a8a-4e96-b85d-c6c0d3b92c2d","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":43,"box":{"x":116,"y":276,"width":735,"height":12}},{"id":"d8626ff8-9a48-417a-bbb7-3954fdec24ca","block_type":"box","text":"cannot acquire the amount of the impacted security included in its index. BlackRock on behalf of its","page_number":43,"box":{"x":116,"y":292,"width":741,"height":12}},{"id":"01108996-a30a-412c-94a8-aa1cc415b3f9","block_type":"box","text":"clients may limit purchases, sell existing investments, utilize indirect investments, utilize information","page_number":43,"box":{"x":116,"y":307,"width":742,"height":12}},{"id":"aa3dbfae-62c6-4be7-aa97-9bdb45f7ea4e","block_type":"box","text":"barriers, or otherwise restrict, forgo, or limit the exercise of rights (including transferring, outsourcing, or","page_number":43,"box":{"x":117,"y":323,"width":771,"height":12}},{"id":"52d25b7f-c072-415c-ac48-caf879c55e94","block_type":"box","text":"limiting voting rights or forgoing the right to receive dividends) when BlackRock, in its sole discretion,","page_number":43,"box":{"x":117,"y":338,"width":751,"height":12}},{"id":"8495f712-6ce3-4423-be84-1f36d43b7652","block_type":"box","text":"deems it appropriate in light of potential regulatory or other restrictions on ownership or other","page_number":43,"box":{"x":116,"y":354,"width":694,"height":12}},{"id":"c2da7e82-5222-4767-9fe6-55f0683d5b12","block_type":"box","text":"consequences resulting from reaching investment thresholds. These types of restrictions could","page_number":43,"box":{"x":116,"y":369,"width":708,"height":12}},{"id":"fe304f90-d000-4a46-89b1-e7072dc868b2","block_type":"box","text":"negatively impact a client’s performance or ability to meet its investment objective.","page_number":43,"box":{"x":117,"y":385,"width":614,"height":12}},{"id":"6b37b807-3a16-4ac5-845e-e868e3a4c421","block_type":"box","text":"When BlackRock or a BlackRock client is subject to an ownership limitation, BlackRock may in its","page_number":43,"box":{"x":116,"y":419,"width":728,"height":12}},{"id":"3d7e8aec-9f36-4ea5-b0f4-e505f3f8ad04","block_type":"box","text":"discretion seek permission from the applicable issuers or regulators to exceed the limitation. However,","page_number":43,"box":{"x":116,"y":434,"width":764,"height":12}},{"id":"464deec3-94f7-4881-a2fd-1cb33048a2bb","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":43,"box":{"x":116,"y":450,"width":746,"height":12}},{"id":"b45270a2-883c-483e-9376-8e915ef0143e","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":43,"box":{"x":117,"y":465,"width":734,"height":12}},{"id":"43a0effe-9035-450d-b8d8-8aa8702b31c3","block_type":"box","text":"BlackRock on behalf of itself and its clients take or refrain from taking certain actions in connection with","page_number":43,"box":{"x":117,"y":481,"width":770,"height":12}},{"id":"f61ba38a-eaac-4ba6-84a9-55b630a52725","block_type":"box","text":"the approval, order, consent, relief or non-disapproval, which BlackRock may accept if it believes the","page_number":43,"box":{"x":116,"y":496,"width":752,"height":12}},{"id":"3b19185a-6e9c-4d84-90f4-4fca84ccf6e1","block_type":"box","text":"benefits outweigh the costs and may limit BlackRock from taking actions that it otherwise would take.","page_number":43,"box":{"x":117,"y":512,"width":753,"height":12}},{"id":"18b404cf-1b1c-449a-b5ba-6857152c811a","block_type":"box","text":"In those circumstances where ownership thresholds or limitations must be observed, BlackRock seeks","page_number":43,"box":{"x":117,"y":527,"width":765,"height":12}},{"id":"1c9c7cd5-1d4a-4eca-8607-9adaab5d499b","block_type":"box","text":"to allocate limited investment opportunities equitably among clients, taking into consideration","page_number":43,"box":{"x":116,"y":543,"width":693,"height":12}},{"id":"02adff02-0b2f-4034-9685-4350393201e5","block_type":"box","text":"benchmark weight and investment strategy. BlackRock may adopt certain controls designed to prevent","page_number":43,"box":{"x":117,"y":558,"width":767,"height":12}},{"id":"6e1813e0-76ea-44d0-8f79-62fcb211a9d6","block_type":"box","text":"the occurrence of a breach of any applicable ownership threshold or limits, including, for example,","page_number":43,"box":{"x":116,"y":574,"width":731,"height":12}},{"id":"6c1a00f3-8c41-4d04-8896-ab916e6c8a53","block_type":"box","text":"when ownership in certain securities nears an applicable threshold, BlackRock may limit additional","page_number":43,"box":{"x":116,"y":589,"width":736,"height":12}},{"id":"5be3bb17-df0e-411e-a5c6-5197c1f173b8","block_type":"box","text":"purchases in such securities or remove such securities from the list of Deposit Securities to be","page_number":43,"box":{"x":117,"y":605,"width":704,"height":12}},{"id":"232c0451-5846-4f8d-b526-e27333209559","block_type":"box","text":"delivered to the Fund in connection with purchases of Creation Units of the Fund. If client holdings of","page_number":43,"box":{"x":116,"y":620,"width":752,"height":12}},{"id":"9b398f97-d164-4cc1-be23-a52e07df2964","block_type":"box","text":"an issuer exceed an applicable threshold and BlackRock is unable to obtain relief to enable the","page_number":43,"box":{"x":116,"y":636,"width":710,"height":12}},{"id":"59ccd26b-f05a-48d8-bf63-1e2286d43829","block_type":"box","text":"continued holding of such investments, it may be necessary to reduce these positions to meet the","page_number":43,"box":{"x":116,"y":651,"width":730,"height":12}},{"id":"40f04a63-2410-4098-9313-b70112dde9d0","block_type":"box","text":"applicable limitations and BlackRock or such client may be subject to regulatory actions. In these","page_number":43,"box":{"x":116,"y":667,"width":719,"height":12}},{"id":"39948c7a-b8cd-4fa0-b291-ad05fae3e108","block_type":"box","text":"cases, the investments will be sold in a manner that BlackRock deems fair and equitable over time.","page_number":43,"box":{"x":116,"y":682,"width":734,"height":12}},{"id":"d0ffae32-c4f9-4603-b31b-03a14dec28ee","block_type":"box","text":"Ownership limitations are highly complex. It is possible that, despite BlackRock’s intent to either","page_number":43,"box":{"x":116,"y":716,"width":711,"height":13}},{"id":"f5bfc140-844d-460e-8903-64f284c14e90","block_type":"box","text":"comply with or be granted permission to exceed ownership limitations, it may inadvertently breach a","page_number":43,"box":{"x":116,"y":732,"width":741,"height":12}},{"id":"c42da543-934c-4d7c-be21-ebf6b84ddd76","block_type":"box","text":"limit or violate the corporate or regulatory approval, order, consent, relief or non-disapproval that was","page_number":43,"box":{"x":117,"y":747,"width":748,"height":13}},{"id":"3f637dcb-07da-4cfb-94d8-c9a28fc9037a","block_type":"box","text":"obtained.","page_number":43,"box":{"x":116,"y":763,"width":67,"height":10}},{"id":"facd70f6-2c94-4b86-a581-2ec989f68ac0","block_type":"box","text":"In addition to the foregoing, other ownership thresholds may trigger reporting requirements to","page_number":43,"box":{"x":117,"y":797,"width":691,"height":12}},{"id":"7c84e5a4-fad3-4c21-868c-23b4c5bad7f3","block_type":"box","text":"governmental and regulatory authorities, and such reports may entail the disclosure of the identity of a","page_number":43,"box":{"x":116,"y":813,"width":758,"height":12}},{"id":"48d133f7-51a1-4320-8899-4f4bad0a3104","block_type":"box","text":"client or BlackRock’s intended strategy with respect to such security or asset.","page_number":43,"box":{"x":116,"y":828,"width":579,"height":12}},{"id":"89e91b24-95a3-4b91-bd60-13370bfe951c","block_type":"box","text":"BlackRock may not serve as an Authorized Participant in the creation and redemption of the Fund and","page_number":43,"box":{"x":117,"y":862,"width":763,"height":12}},{"id":"fabe077d-a769-4de9-b40a-f1c919c21339","block_type":"box","text":"other BFA-advised ETFs.","page_number":43,"box":{"x":116,"y":878,"width":193,"height":9}},{"id":"2cc294b8-7afb-4e91-bb47-d941f4bc657d","block_type":"box","text":"40","page_number":43,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"a5dfd157-cad9-4393-8079-9294c1152be6","block_type":"box","text":"NM1026U-6042785-43/259","page_number":43,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e35a3d1a-5899-473b-9ce8-1acf85b2bca4","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain","page_number":44,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"90bb54c2-1c4d-436e-96f9-b3e1a48a3c70","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":44,"box":{"x":116,"y":103,"width":756,"height":12}},{"id":"34099e50-5947-46c9-959e-c61a439d0cd6","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL has engaged Citibank, N.A.","page_number":44,"box":{"x":117,"y":118,"width":706,"height":12}},{"id":"ec0b22e7-70bd-4382-b1c2-1144dde5b392","block_type":"box","text":"(“Citibank”) as a subcontractor to provide certain ETF Services. BRIL retains a portion of the standard","page_number":44,"box":{"x":117,"y":134,"width":759,"height":12}},{"id":"645d4b1c-70cb-4294-8ef4-fa7163a79d64","block_type":"box","text":"transaction fee received from Authorized Participants on each creation or redemption order from the","page_number":44,"box":{"x":116,"y":149,"width":748,"height":12}},{"id":"f2bcfb83-ae3c-4e26-8266-d6ea487d7c31","block_type":"box","text":"Authorized Participant for the ETF Services provided. BlackRock collaborated with, and received","page_number":44,"box":{"x":116,"y":165,"width":722,"height":11}},{"id":"85507807-5ef3-44e6-9050-56970e47df80","block_type":"box","text":"payment from, Citibank on the design and development of the ETF Services platform. Citibank has,","page_number":44,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"7453b13e-7eed-4dac-a39a-e753c1be7c0c","block_type":"box","text":"and may, from time to time, develop additional relationships with BlackRock or funds managed by BFA","page_number":44,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"b2b3c4c7-e809-4a73-b9e9-c9c5ab38aa32","block_type":"box","text":"and its affiliates.","page_number":44,"box":{"x":116,"y":211,"width":125,"height":10}},{"id":"bb499c8e-354f-4611-ac89-b5d22eabeef1","block_type":"box","text":"In order to defray transaction expenses and protect against possible shareholder dilution, the Fund","page_number":44,"box":{"x":117,"y":239,"width":737,"height":12}},{"id":"ed31d9c9-1e61-4604-ab2a-146344da5177","block_type":"box","text":"may collect certain fees from Authorized Participants in connection with cash substitutions for creation","page_number":44,"box":{"x":117,"y":254,"width":761,"height":13}},{"id":"d90e466f-3231-4b42-8450-a66cd682f9a1","block_type":"box","text":"and redemption transactions. While BlackRock uses good faith estimates of the expected costs to the","page_number":44,"box":{"x":116,"y":270,"width":759,"height":12}},{"id":"5786e49c-156e-40b0-973d-b9d178a505cd","block_type":"box","text":"Fund in determining the rates for fees collected by the Fund related to creation and redemption activity,","page_number":44,"box":{"x":117,"y":285,"width":770,"height":13}},{"id":"93000b5e-c7b1-4d40-8e18-50b99980009a","block_type":"box","text":"BlackRock may have incentives to improve Fund performance through the collection of these fees. As","page_number":44,"box":{"x":117,"y":301,"width":760,"height":12}},{"id":"1d4a0c54-8ceb-4b40-aea1-b345ca58d61c","block_type":"box","text":"these charges are based on estimates, where the charges exceed actual transaction costs incurred by","page_number":44,"box":{"x":116,"y":317,"width":765,"height":12}},{"id":"4e662fcd-ae12-4dfa-8f4e-5a6216749a5f","block_type":"box","text":"the Fund, Fund performance could improve as a result. BlackRock has established processes to","page_number":44,"box":{"x":116,"y":332,"width":720,"height":12}},{"id":"c858f19e-2d7e-4f47-afa2-38e5c12d9cee","block_type":"box","text":"oversee the determination of these estimates in an effort to mitigate this conflict.","page_number":44,"box":{"x":116,"y":347,"width":600,"height":13}},{"id":"ba932bf1-cdaa-49df-b18e-637005b4e1a4","block_type":"box","text":"BlackRock may maintain securities indices. To the extent permitted by applicable laws, the Fund may","page_number":44,"box":{"x":117,"y":376,"width":756,"height":11}},{"id":"24d38dcc-df4d-448f-a63d-ef266a2938ec","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":44,"box":{"x":116,"y":391,"width":763,"height":12}},{"id":"da643ea3-c01d-4827-8e95-4e170962c21d","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":44,"box":{"x":116,"y":406,"width":766,"height":12}},{"id":"80eb0543-44f6-44ec-bb8b-9d1bd01b5eef","block_type":"box","text":"fund name. Index providers, including BlackRock (to the extent permitted by applicable law), may be","page_number":44,"box":{"x":116,"y":422,"width":749,"height":12}},{"id":"ba524196-42fc-44ca-83ed-fe441625298f","block_type":"box","text":"paid licensing fees for use of their index or index name. In instances where BlackRock charges a","page_number":44,"box":{"x":117,"y":437,"width":723,"height":12}},{"id":"f6641f55-b24d-482c-ae29-95612d1e2772","block_type":"box","text":"unitary management fee, BlackRock may have a financial incentive to use a BlackRock index that is","page_number":44,"box":{"x":117,"y":453,"width":746,"height":12}},{"id":"7fc3395f-6159-421b-b558-fff5e5f3583d","block_type":"box","text":"less costly to BlackRock than a third party index. BlackRock may benefit from the Fund using","page_number":44,"box":{"x":117,"y":468,"width":695,"height":12}},{"id":"8c1ec384-b458-4754-8e53-9b1d03da5a4a","block_type":"box","text":"BlackRock indices by creating increasing acceptance in the marketplace for such indices. BlackRock is","page_number":44,"box":{"x":117,"y":484,"width":768,"height":12}},{"id":"79a4b5e4-f5f0-42c8-9d42-4778f4e7ad31","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":44,"box":{"x":117,"y":500,"width":747,"height":12}},{"id":"938971e8-6359-439f-ba33-843a94c092e9","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":44,"box":{"x":117,"y":515,"width":756,"height":12}},{"id":"d1086754-d117-4381-a20b-fc1f5a330e1e","block_type":"box","text":"any index licensing agreement with BlackRock will be as favorable as those terms offered to other","page_number":44,"box":{"x":116,"y":530,"width":732,"height":13}},{"id":"f4334835-5f6e-4820-ab9d-922e65ec997d","block_type":"box","text":"licensees.","page_number":44,"box":{"x":117,"y":546,"width":78,"height":9}},{"id":"0f6e5dc9-ed55-4568-8c04-bab962e5add8","block_type":"box","text":"BlackRock may enter into contractual arrangements with third-party service providers to the Fund (e.g.,","page_number":44,"box":{"x":117,"y":574,"width":770,"height":12}},{"id":"19d13888-35fd-4e19-8a1c-7a3018db6cac","block_type":"box","text":"custodians, administrators and index providers) pursuant to which BlackRock receives fee discounts or","page_number":44,"box":{"x":116,"y":589,"width":769,"height":12}},{"id":"981f99eb-eefb-43a2-90c8-b24c78b8b8b5","block_type":"box","text":"concessions in recognition of BlackRock’s overall relationship with such service providers. BlackRock","page_number":44,"box":{"x":116,"y":605,"width":757,"height":12}},{"id":"24f7897c-81ee-4fb8-93b0-2d63b55f126a","block_type":"box","text":"may also enter into contractual arrangements with such service providers pursuant to which BlackRock","page_number":44,"box":{"x":117,"y":620,"width":769,"height":12}},{"id":"55d0962f-be87-485b-b0bf-52f5c4ff0799","block_type":"box","text":"incurs additional costs if the service provider’s services are terminated with respect to the Fund. To the","page_number":44,"box":{"x":117,"y":636,"width":767,"height":12}},{"id":"c26f4b26-d9b2-483f-894c-14ec3146f4d2","block_type":"box","text":"extent that BlackRock is responsible for paying service providers out of its fees that it receives from the","page_number":44,"box":{"x":116,"y":651,"width":770,"height":12}},{"id":"e7db2936-4370-4654-a81e-b731192c45f9","block_type":"box","text":"Fund, the benefits of lower fees, including any fee discounts or concessions, or any additional savings,","page_number":44,"box":{"x":117,"y":667,"width":760,"height":12}},{"id":"608f6ab6-9c2b-4d77-92f8-da22cb97e898","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":44,"box":{"x":117,"y":682,"width":747,"height":12}},{"id":"55d54aea-8f0f-43b5-b813-c37afecd65c2","block_type":"box","text":"use or termination of service providers to the Fund. In addition, conflicts of interest may arise with","page_number":44,"box":{"x":117,"y":698,"width":721,"height":12}},{"id":"014527f7-124f-4c9a-a83d-20fbde4d37ef","block_type":"box","text":"respect to contractual arrangements with third-party service providers to the Fund, or the selection of","page_number":44,"box":{"x":117,"y":713,"width":748,"height":12}},{"id":"f95f7ed3-9167-4351-9695-a46cc5794bd1","block_type":"box","text":"such providers, particularly in circumstances where BlackRock is negotiating on behalf of both funds","page_number":44,"box":{"x":116,"y":729,"width":744,"height":12}},{"id":"b571cedf-6340-403e-af95-386bad3362f0","block_type":"box","text":"that have a unitary management fee and those that do not or different service providers have different","page_number":44,"box":{"x":116,"y":744,"width":756,"height":12}},{"id":"266db2ed-da5e-4889-bb14-4a4163dc7ecb","block_type":"box","text":"fee structures.","page_number":44,"box":{"x":116,"y":760,"width":105,"height":9}},{"id":"776d515b-32b7-4af3-ad76-abc202721436","block_type":"box","text":"Conflicts of interest may arise as a result of simultaneous investment management of multiple client","page_number":44,"box":{"x":117,"y":788,"width":739,"height":12}},{"id":"6d44aa12-cb4b-4598-a826-3e5fb2729b86","block_type":"box","text":"accounts by BlackRock’s investment professionals. For example, differences in the advisory fee","page_number":44,"box":{"x":116,"y":803,"width":711,"height":12}},{"id":"80ecf4d3-2938-4c28-902c-a42b1a0c88e8","block_type":"box","text":"structure may create the appearance of actual or potential conflicts of interest because such","page_number":44,"box":{"x":116,"y":819,"width":683,"height":12}},{"id":"25a8ea76-70b9-4262-86f5-8d495f4ba818","block_type":"box","text":"differences could create pecuniary incentives for BlackRock to favor one client account over another.","page_number":44,"box":{"x":116,"y":834,"width":754,"height":12}},{"id":"cbb4ce12-d6b0-429d-8770-c7f7f3d62b28","block_type":"box","text":"BlackRock owns or has an ownership interest in certain trading, portfolio management, operations and/","page_number":44,"box":{"x":117,"y":862,"width":765,"height":12}},{"id":"29ceb0b3-106e-40b7-ace4-a5caebdd2cba","block_type":"box","text":"or information systems used by Fund service providers. These systems are, or will be, used by the","page_number":44,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"6a186894-c39c-41f4-be8a-2fa8daf2f7d7","block_type":"box","text":"41","page_number":44,"box":{"x":490,"y":909,"width":16,"height":9}},{"id":"1b3907ad-b6cd-45ba-be8e-0bc03cd2e31b","block_type":"box","text":"NM1026U-6042785-44/259","page_number":44,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"fb25c4da-a602-4fc7-9eeb-87b85bca67aa","block_type":"box","text":"Fund service provider in connection with the provision of services to accounts managed by BlackRock","page_number":45,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"1fb1d906-73b1-47e8-ba90-6e91583ae44d","block_type":"box","text":"and funds managed and sponsored by BlackRock, including the Fund, that engage the service","page_number":45,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"14fe4bd4-dd25-4540-ae93-55da5df618c4","block_type":"box","text":"provider (typically the custodian). The Fund’s service provider remunerates BlackRock for the use of","page_number":45,"box":{"x":117,"y":118,"width":748,"height":12}},{"id":"55afa4e5-2d9c-4bda-b98f-b5f9f43126c4","block_type":"box","text":"the systems. The Fund service provider’s payments to BlackRock for the use of these systems may","page_number":45,"box":{"x":116,"y":134,"width":744,"height":12}},{"id":"a8d63db9-2470-4dbe-9e15-561875ec39a1","block_type":"box","text":"enhance the profitability of BlackRock.","page_number":45,"box":{"x":116,"y":149,"width":290,"height":12}},{"id":"cfcdcede-227f-4dda-b3a5-5ea2a9765e14","block_type":"box","text":"BlackRock’s receipt of fees from a service provider in connection with the use of systems provided by","page_number":45,"box":{"x":117,"y":182,"width":757,"height":12}},{"id":"d282ac84-3d0a-4000-8ab5-3ea4aab0fbb0","block_type":"box","text":"BlackRock may create an incentive for BlackRock to recommend that the Fund enter into or renew an","page_number":45,"box":{"x":117,"y":197,"width":759,"height":13}},{"id":"abcf4a35-4b42-49d5-b22a-f6fa56cea7e8","block_type":"box","text":"arrangement with the service provider.","page_number":45,"box":{"x":116,"y":213,"width":291,"height":12}},{"id":"4a28bce1-cef9-43cc-98fa-64149f014f78","block_type":"box","text":"In recognition of a BlackRock client’s overall relationship with BlackRock, BlackRock may offer special","page_number":45,"box":{"x":117,"y":246,"width":762,"height":12}},{"id":"906c5769-7cf8-4be6-b901-ac4b7d27c6a1","block_type":"box","text":"pricing arrangements for certain services provided by BlackRock. Any such special pricing","page_number":45,"box":{"x":117,"y":261,"width":673,"height":12}},{"id":"6a66d6de-4365-446e-8925-38716969c0b5","block_type":"box","text":"arrangements will not affect Fund fees and expenses applicable to such client’s investment in the","page_number":45,"box":{"x":116,"y":277,"width":727,"height":12}},{"id":"64dc7e8c-206c-4edc-8b76-8e117932906c","block_type":"box","text":"Fund.","page_number":45,"box":{"x":117,"y":292,"width":46,"height":10}},{"id":"57789537-c104-4c10-b9aa-b98926aef86f","block_type":"box","text":"Present and future activities of BlackRock and its directors, officers and employees, in addition to those","page_number":45,"box":{"x":117,"y":325,"width":771,"height":12}},{"id":"5c423c8a-3193-48c8-8d6b-d4b4d1981b3f","block_type":"box","text":"described in this section, may give rise to additional conflicts of interest.","page_number":45,"box":{"x":116,"y":341,"width":537,"height":12}},{"id":"70dc6cbf-48f8-43ae-a04a-cbba4ac17080","block_type":"box","text":"Investment Advisory, Administrative and","page_number":45,"box":{"x":119,"y":396,"width":726,"height":29}},{"id":"a7eede12-2f67-49f7-9bf2-e708383ffbb4","block_type":"box","text":"Distribution Services","page_number":45,"box":{"x":119,"y":429,"width":376,"height":23}},{"id":"f39ce1c1-7912-4cd5-a487-8130ec8c2a45","block_type":"box","text":"Investment Adviser.","page_number":45,"box":{"x":117,"y":484,"width":163,"height":10}},{"id":"e18265e4-e0b1-4825-8893-38c15399e0d0","block_type":"box","text":"BFA serves as investment adviser to the Fund pursuant to an investment","page_number":45,"box":{"x":282,"y":484,"width":546,"height":12}},{"id":"31af7494-5f16-4f4c-93b7-fb665a925f01","block_type":"box","text":"advisory agreement between the Trust, on behalf of the Fund, and BFA (the “Investment Advisory","page_number":45,"box":{"x":116,"y":500,"width":731,"height":12}},{"id":"4f9c6877-77b6-4cb1-8062-1b889f4c43d1","block_type":"box","text":"Agreement”). BFA is a California corporation indirectly owned by BlackRock, Inc. and is registered as","page_number":45,"box":{"x":116,"y":515,"width":756,"height":12}},{"id":"00f05284-c181-4d85-af8c-3d376b86b9a6","block_type":"box","text":"an investment adviser under the Investment Advisers Act of 1940, as amended. Under the Investment","page_number":45,"box":{"x":116,"y":531,"width":763,"height":11}},{"id":"d6b02cbd-f64b-4bba-a7c9-57fff5785597","block_type":"box","text":"Advisory Agreement, BFA, subject to the supervision of the Board and in conformity with the stated","page_number":45,"box":{"x":116,"y":546,"width":740,"height":12}},{"id":"e94bd6fb-c002-4c9a-90ef-95e9d4fb2066","block_type":"box","text":"investment policies of the Fund, manages and administers the Trust and the investment of the Fund’s","page_number":45,"box":{"x":117,"y":562,"width":758,"height":12}},{"id":"c9691d57-0a44-4f24-8f68-ae708ad70d1e","block_type":"box","text":"assets. BFA is responsible for making investment decisions for the Fund.","page_number":45,"box":{"x":116,"y":577,"width":547,"height":12}},{"id":"f3b6ff29-60d7-4085-a8ae-0a216f588205","block_type":"box","text":"Pursuant to the Investment Advisory Agreement, BFA may, from time to time, in its sole discretion and","page_number":45,"box":{"x":117,"y":610,"width":764,"height":12}},{"id":"fb7b88d3-c9f2-4963-8c49-4b29d62c9b9e","block_type":"box","text":"to the extent permitted by applicable law, appoint one or more sub-advisers, including, without","page_number":45,"box":{"x":116,"y":626,"width":703,"height":12}},{"id":"9c5dd9e2-51db-4ec4-bf42-745077f8554c","block_type":"box","text":"limitation, affiliates of BFA, to perform investment advisory or other services with respect to the Fund.","page_number":45,"box":{"x":117,"y":641,"width":755,"height":12}},{"id":"f5cf8001-1fde-4287-b0bc-73bf0984fda0","block_type":"box","text":"In addition, BFA may delegate certain of its investment advisory functions under the Investment","page_number":45,"box":{"x":117,"y":657,"width":713,"height":12}},{"id":"0038ac29-92a6-457f-a3cf-882dfa901141","block_type":"box","text":"Advisory Agreement to one or more of its affiliates to the extent permitted by applicable law. BFA may","page_number":45,"box":{"x":116,"y":672,"width":756,"height":12}},{"id":"a5e72333-ad5c-4312-b5a8-b59074637930","block_type":"box","text":"terminate any or all sub-advisers or such delegation arrangements in its sole discretion upon","page_number":45,"box":{"x":116,"y":688,"width":686,"height":12}},{"id":"75c92d5b-ba76-4d93-b939-76f496cba920","block_type":"box","text":"appropriate notice at any time to the extent permitted by applicable law.","page_number":45,"box":{"x":116,"y":703,"width":530,"height":12}},{"id":"31242b62-966b-4a52-9fc0-f4d808df7a2d","block_type":"box","text":"BFA is responsible, under the Investment Advisory Agreement, for substantially all expenses of the","page_number":45,"box":{"x":117,"y":736,"width":734,"height":12}},{"id":"960d4f00-97b4-4b0f-85f3-10b04de53532","block_type":"box","text":"Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other","page_number":45,"box":{"x":117,"y":752,"width":702,"height":12}},{"id":"ea7d4cff-8626-48de-825d-696e6ad6a69c","block_type":"box","text":"services. BFA is not responsible for, and the Fund will bear the cost of, the management fees, interest","page_number":45,"box":{"x":116,"y":767,"width":758,"height":12}},{"id":"a83f2f30-8dd5-4d36-a434-a6f57ee49d84","block_type":"box","text":"expenses, taxes, expenses incurred with respect to the acquisition and disposition of portfolio","page_number":45,"box":{"x":116,"y":783,"width":693,"height":12}},{"id":"aee8a7a1-af88-482d-82f1-f5741e6db07e","block_type":"box","text":"securities and the execution of portfolio transactions, including brokerage commissions, distribution","page_number":45,"box":{"x":116,"y":798,"width":735,"height":12}},{"id":"fd554554-330f-45c7-8f08-9d5a5aec3ce5","block_type":"box","text":"fees or expenses, litigation expenses and any extraordinary expenses (as determined by a majority of","page_number":45,"box":{"x":116,"y":814,"width":756,"height":12}},{"id":"741244b3-49c7-4c2c-8ec4-cfdf0c22a773","block_type":"box","text":"the Independent Trustees).","page_number":45,"box":{"x":116,"y":829,"width":206,"height":12}},{"id":"36b24cab-d38e-4a4a-bedf-d7e15db879cb","block_type":"box","text":"For its investment advisory services to the Fund, BFA will be paid a management fee by the Fund,","page_number":45,"box":{"x":117,"y":862,"width":733,"height":12}},{"id":"384872f7-02a6-413d-88db-a918c02e6b94","block_type":"box","text":"based on a percentage of the Fund’s average daily net assets, at an annual rate of 0.85%.","page_number":45,"box":{"x":117,"y":877,"width":675,"height":13}},{"id":"2b1bace3-abd3-42d7-b479-a0928e279fa6","block_type":"box","text":"42","page_number":45,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"f91d04ad-3cd3-41fd-9c10-decd356fdf82","block_type":"box","text":"NM1026U-6042785-45/259","page_number":45,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c504e8c5-8bc0-4c31-a094-6ffacdcfbaf7","block_type":"box","text":"BFA has contractually agreed to waive a portion of its management fees in an amount equal to the","page_number":46,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"49bf83ca-c1c4-4c99-9f68-5d7df4b51a56","block_type":"box","text":"aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in other","page_number":46,"box":{"x":116,"y":102,"width":758,"height":13}},{"id":"3683867b-2c52-47f2-8dbe-38142a72aa94","block_type":"box","text":"equity and fixed-income mutual funds and ETFs advised by BFA or its affiliates through June 30, 2028.","page_number":46,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"079c0a25-8646-498f-8ccf-2a98cf59b3aa","block_type":"box","text":"BFA has also contractually agreed to waive a portion of its management fees by an amount equal to","page_number":46,"box":{"x":117,"y":134,"width":747,"height":12}},{"id":"85426e6a-33c6-4ac7-8c21-e7b24f5ab60d","block_type":"box","text":"the aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in","page_number":46,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"8e072d3b-8165-4f7d-b2c6-73b1f31855bf","block_type":"box","text":"money market funds advised by BFA or its affiliates through June 30, 2028. The agreement (with","page_number":46,"box":{"x":117,"y":165,"width":723,"height":12}},{"id":"3e2ed3a9-a536-4e9f-97a4-b7fccfda8210","block_type":"box","text":"respect to either waiver) may be terminated upon 90 days’ notice by a majority of the non-interested","page_number":46,"box":{"x":117,"y":180,"width":746,"height":12}},{"id":"d43b7ffb-f63b-40e7-bd2d-92843835db97","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":46,"box":{"x":116,"y":196,"width":702,"height":12}},{"id":"2e5d1ade-7bb2-4056-95c2-e5791189b162","block_type":"box","text":"BFA may also from time to time voluntarily waive and/or reimburse other fees or expenses in order to","page_number":46,"box":{"x":117,"y":225,"width":755,"height":12}},{"id":"a3fbfabf-a9bc-40c7-a97d-69f081e1cd47","block_type":"box","text":"limit total annual fund operating expenses (excluding acquired fund fees and expenses, if any). Any","page_number":46,"box":{"x":117,"y":240,"width":742,"height":12}},{"id":"69f7aa12-63e3-46cb-9bb6-18e18f4930dc","block_type":"box","text":"such voluntary waiver or reimbursement may be eliminated by BFA at any time.","page_number":46,"box":{"x":116,"y":256,"width":596,"height":12}},{"id":"8718eaee-5288-49f3-bd0d-e9474c6678fc","block_type":"box","text":"As of the date of this SAI, the Fund has not made any payments to BFA for investment advisory","page_number":46,"box":{"x":116,"y":285,"width":716,"height":12}},{"id":"33e07e73-e125-4321-b02f-9b555d2d1dc6","block_type":"box","text":"services because the Fund has not yet commenced operations.","page_number":46,"box":{"x":116,"y":301,"width":477,"height":12}},{"id":"f0c0fdc1-54be-45a2-9401-61f6d5628a68","block_type":"box","text":"The Investment Advisory Agreement with respect to the Fund continues in effect for two years from its","page_number":46,"box":{"x":116,"y":330,"width":763,"height":12}},{"id":"db263352-dcc2-4fcc-9740-8d6ac3ea7e00","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":46,"box":{"x":116,"y":345,"width":766,"height":12}},{"id":"06cecdf1-5d45-4098-9749-32803c07dd35","block_type":"box","text":"of the outstanding voting securities (as defined in the 1940 Act) of the Fund, provided that in either","page_number":46,"box":{"x":116,"y":361,"width":735,"height":12}},{"id":"fb320e01-7502-480e-bc71-9f761f870ac1","block_type":"box","text":"event such continuance also is approved by a majority of the Board members who are not interested","page_number":46,"box":{"x":116,"y":376,"width":751,"height":12}},{"id":"09e0c76c-2b79-4b8c-bc63-d166cf20320f","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":46,"box":{"x":117,"y":392,"width":749,"height":12}},{"id":"f19b1e43-5e15-4f7d-a4b3-77f474142e5e","block_type":"box","text":"purpose of voting on such approval.","page_number":46,"box":{"x":117,"y":407,"width":270,"height":12}},{"id":"d9898075-9647-48d2-8b19-66b2388cb8fb","block_type":"box","text":"The Investment Advisory Agreement with respect to the Fund is terminable without penalty, on","page_number":46,"box":{"x":116,"y":437,"width":706,"height":12}},{"id":"2c96e7bc-d271-4516-b2c9-73e20a71a579","block_type":"box","text":"60 days’ notice, by the Board or by a vote of the holders of a majority of the Fund’s outstanding voting","page_number":46,"box":{"x":116,"y":452,"width":761,"height":12}},{"id":"f8171318-114a-4911-93bd-9b0e31eff5ac","block_type":"box","text":"securities (as defined in the 1940 Act). The Investment Advisory Agreement is also terminable upon","page_number":46,"box":{"x":116,"y":468,"width":746,"height":12}},{"id":"4273ad8a-c745-4ce2-9a04-c45725cbae6f","block_type":"box","text":"60 days’ notice by BFA and will terminate automatically in the event of its assignment (as defined in the","page_number":46,"box":{"x":116,"y":483,"width":772,"height":12}},{"id":"68824ff6-b19b-4d90-937a-9f485a1f96d2","block_type":"box","text":"1940 Act).","page_number":46,"box":{"x":118,"y":499,"width":79,"height":12}},{"id":"c43d4460-1f78-410d-b732-ae08370512d7","block_type":"box","text":"Investment Sub-Advisers.","page_number":46,"box":{"x":117,"y":528,"width":204,"height":9}},{"id":"b5d4cba8-9b73-4b83-8b69-1a4619fd339f","block_type":"box","text":"Pursuant to the Investment Advisory Agreement between BFA and the","page_number":46,"box":{"x":322,"y":528,"width":534,"height":12}},{"id":"ee9a081c-ee8c-466e-b311-ca7ad73e6beb","block_type":"box","text":"Trust entered into on behalf of the Fund, BFA may from time to time, in its sole discretion, to the extent","page_number":46,"box":{"x":116,"y":543,"width":767,"height":12}},{"id":"1e8a056c-079c-4d18-a711-acbea4fd6b65","block_type":"box","text":"permitted by applicable law, appoint one or more sub-advisers, including, without limitation, affiliates of","page_number":46,"box":{"x":117,"y":559,"width":766,"height":12}},{"id":"6a3460b8-b0b0-4f53-8e73-85c7efa575cd","block_type":"box","text":"BFA, to perform investment advisory services with respect to the Fund. In addition, BFA may delegate","page_number":46,"box":{"x":117,"y":574,"width":762,"height":13}},{"id":"d3bbc93d-fbae-4c0e-b9aa-88718fb04d2f","block_type":"box","text":"certain of its investment advisory functions under the Investment Advisory Agreement to one or more","page_number":46,"box":{"x":116,"y":590,"width":754,"height":12}},{"id":"b39f001d-1447-42b6-93d5-1e87e018b347","block_type":"box","text":"of its affiliates to the extent permitted by applicable law. BFA may terminate any or all sub-advisers or","page_number":46,"box":{"x":116,"y":605,"width":758,"height":13}},{"id":"632c0f76-49b2-4bbe-8a05-40c8498e0c74","block_type":"box","text":"such delegation arrangements in its sole discretion at any time to the extent permitted by applicable","page_number":46,"box":{"x":116,"y":621,"width":745,"height":12}},{"id":"e5749817-d8b0-4cf4-9258-0c08ba2ae910","block_type":"box","text":"law.","page_number":46,"box":{"x":117,"y":637,"width":33,"height":9}},{"id":"a33dafbb-43a1-438f-b28d-6d2aac7476d8","block_type":"box","text":"BFA has entered into separate sub-advisory agreements (the “Sub-Advisory Agreements”) with each","page_number":46,"box":{"x":117,"y":666,"width":746,"height":12}},{"id":"2ffec098-7462-4533-bc12-3105a2b437d7","block_type":"box","text":"Sub-Adviser, each an affiliate of BFA, with respect to the Fund. BlackRock Asset Management North","page_number":46,"box":{"x":116,"y":681,"width":747,"height":12}},{"id":"f42afe24-a074-43e3-b704-6efab422400a","block_type":"box","text":"Asia Limited is a registered investment adviser, organized in 1988, located in Hong Kong. BlackRock","page_number":46,"box":{"x":116,"y":697,"width":749,"height":12}},{"id":"0be779dc-6990-41ef-aed2-ea8d56789597","block_type":"box","text":"(Singapore) Limited is a registered investment adviser, organized in 2000, located in Singapore.","page_number":46,"box":{"x":117,"y":712,"width":710,"height":12}},{"id":"c7d080dc-dc61-4390-a02d-54e6320e7c87","block_type":"box","text":"Subject to the supervision and oversight of the Board and BFA, the Sub-Advisers are primarily","page_number":46,"box":{"x":116,"y":741,"width":699,"height":13}},{"id":"8fdcaa54-683e-45f6-8a90-bda92296f4db","block_type":"box","text":"responsible for execution of securities transactions and the management of specified assets outside","page_number":46,"box":{"x":117,"y":757,"width":741,"height":12}},{"id":"4b40748d-2e9c-4015-8076-00bfc7c25ba1","block_type":"box","text":"the U.S. and Canada in the Fund’s portfolio.","page_number":46,"box":{"x":116,"y":772,"width":326,"height":12}},{"id":"3612ffe3-3e46-4c15-8b51-dfa3b3cbcb1e","block_type":"box","text":"Pursuant to the Sub-Advisory Agreements, BFA pays each Sub-Adviser for services it provides for that","page_number":46,"box":{"x":117,"y":802,"width":762,"height":12}},{"id":"d56b8d17-70bf-455d-9bb6-1f45baa2163c","block_type":"box","text":"portion of the Fund for which it acts as sub-adviser a monthly fee at an annual rate equal to a","page_number":46,"box":{"x":117,"y":817,"width":690,"height":12}},{"id":"15b7e3af-5d31-4350-8d9c-537271b39683","block_type":"box","text":"percentage of the management fee paid to BFA under the Investment Advisory Agreement.","page_number":46,"box":{"x":117,"y":833,"width":682,"height":12}},{"id":"4a6057e8-a826-41fb-83ca-be608cbbcd8a","block_type":"box","text":"Unless earlier terminated as described below, the Sub-Advisory Agreements will remain in effect for an","page_number":46,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"fabf64e8-9975-4aa0-a6ee-0a0e0bbd4e05","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":46,"box":{"x":117,"y":877,"width":727,"height":13}},{"id":"58d327eb-b541-459d-8310-c633e7ffeb0a","block_type":"box","text":"43","page_number":46,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5d6b1bd5-679a-4053-b186-12b6e656333c","block_type":"box","text":"NM1026U-6042785-46/259","page_number":46,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3ea76e5c-f84f-4616-8000-672606fb3cbd","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":47,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"12a1c9bd-df57-432f-9fd5-6f73369fabd2","block_type":"box","text":"parties to such agreement or interested persons (as defined in the 1940 Act) of any such party.","page_number":47,"box":{"x":117,"y":102,"width":709,"height":13}},{"id":"7b5f07ca-fc7c-48f0-8d96-2f362cfbfacd","block_type":"box","text":"The Sub-Advisory Agreements are terminable without penalty, on 60 days’ notice, by the Board or by a","page_number":47,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"0b13d31a-d027-46cb-a551-786dfbe6adbd","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":47,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"e9f0b234-7d6c-49ed-b7cd-5c3432da4fcf","block_type":"box","text":"and will terminate automatically in the event of its assignment (as defined in the 1940 Act).","page_number":47,"box":{"x":116,"y":165,"width":676,"height":12}},{"id":"79b3997b-4ccf-4cbe-a142-7fc1179e0af8","block_type":"box","text":"Portfolio Managers.","page_number":47,"box":{"x":117,"y":196,"width":155,"height":12}},{"id":"59228a77-c08c-40ff-b07b-afcefce9d15d","block_type":"box","text":"As of August 31, 2026, the individuals named as Portfolio Managers in the","page_number":47,"box":{"x":273,"y":196,"width":561,"height":12}},{"id":"f48e293d-3035-46e8-a5c8-c37328746144","block_type":"box","text":"Fund’s Prospectus were also primarily responsible for the day-to-day management of other BlackRock","page_number":47,"box":{"x":117,"y":211,"width":764,"height":12}},{"id":"432c077b-5de6-46f6-8d6a-ee480dc1c8ad","block_type":"box","text":"funds and certain other types of portfolios and/or accounts as follows:","page_number":47,"box":{"x":116,"y":227,"width":521,"height":12}},{"id":"fd0a6022-8ef1-4cca-8653-d8515944a25b","block_type":"box","text":"Philip Green","page_number":47,"box":{"x":117,"y":258,"width":92,"height":11}},{"id":"dd8d7cac-f1cf-4341-913f-a4c1705ef073","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":278,"width":120,"height":9}},{"id":"a6a63198-ad5c-4d55-a661-1b6f066b76ba","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":278,"width":50,"height":7}},{"id":"207ff614-36e2-4859-abd3-89e3e64ccfa4","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":278,"width":79,"height":7}},{"id":"608363ae-4e7d-4c8f-9d0a-745f29f7cd9b","block_type":"box","text":"Registered Investment Companies 28 $23.12 Billion","page_number":47,"box":{"x":117,"y":296,"width":771,"height":12}},{"id":"5a011413-f4ba-427a-b7c7-065adbdbbf00","block_type":"box","text":"Other Pooled Investment Vehicles 61 40.25 Billion","page_number":47,"box":{"x":116,"y":312,"width":772,"height":9}},{"id":"e70310a3-bfa3-459c-9093-3ea5a0c0e5c7","block_type":"box","text":"Other Accounts 14 10.56 Billion","page_number":47,"box":{"x":116,"y":327,"width":772,"height":10}},{"id":"923621e3-f8d6-4320-ae20-f590680b9e4e","block_type":"box","text":"Thomas Becker","page_number":47,"box":{"x":116,"y":359,"width":119,"height":9}},{"id":"231f566d-0e0a-4fc8-ba52-709080da6b1d","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":378,"width":120,"height":10}},{"id":"96e43cc0-116d-40e8-824b-77b7df52b308","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":378,"width":50,"height":8}},{"id":"b0451c5d-ed94-4886-b71d-c8155fe8f32e","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":378,"width":79,"height":8}},{"id":"a375a9c2-61fb-43f6-8f0c-46dd2858f132","block_type":"box","text":"Registered Investment Companies 13 $13.82 Billion","page_number":47,"box":{"x":117,"y":396,"width":771,"height":13}},{"id":"cc5018fc-12a1-4f76-b229-9d311c34bf49","block_type":"box","text":"Other Pooled Investment Vehicles 36 13.43 Billion","page_number":47,"box":{"x":116,"y":413,"width":772,"height":9}},{"id":"69052088-942f-4ac5-b94d-aa6f13c1234b","block_type":"box","text":"Other Accounts 2 961.6 Million","page_number":47,"box":{"x":116,"y":428,"width":772,"height":10}},{"id":"98298594-58cb-4482-a567-65fe23326eb6","block_type":"box","text":"Michael Pensky, CFA","page_number":47,"box":{"x":117,"y":460,"width":160,"height":11}},{"id":"ad150973-311f-48b6-8179-0df1a4c24dc7","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":479,"width":120,"height":10}},{"id":"40c16c02-babd-43a2-90ca-ac6a5ebf8171","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":479,"width":50,"height":8}},{"id":"b4bc2b29-5644-44e7-866a-e6a07df7c7ea","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":479,"width":79,"height":8}},{"id":"7428161b-0cfd-489e-b7f2-f90453a09356","block_type":"box","text":"Registered Investment Companies 28 $22.93 Billion","page_number":47,"box":{"x":117,"y":497,"width":771,"height":13}},{"id":"b598f82b-0afe-4568-957b-3ad2781550bd","block_type":"box","text":"Other Pooled Investment Vehicles 67 30.25 Billion","page_number":47,"box":{"x":116,"y":513,"width":772,"height":10}},{"id":"98eddc32-f365-467b-9adb-c11509e64c19","block_type":"box","text":"Other Accounts 6 1.27 Billion","page_number":47,"box":{"x":116,"y":529,"width":772,"height":9}},{"id":"9e1a67b6-6a54-4792-9d97-4850db2a646a","block_type":"box","text":"Richard Murrall, CFA","page_number":47,"box":{"x":117,"y":560,"width":158,"height":11}},{"id":"784ab90a-e74c-4dfa-ade7-71f1bb3331d3","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":580,"width":120,"height":10}},{"id":"f03e6edd-e5b7-410a-9b69-4d15f279b126","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":580,"width":50,"height":7}},{"id":"465f9c08-1f2d-4064-9ac4-b80056a5f9ab","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":580,"width":79,"height":7}},{"id":"72a0e361-b0dd-4b52-907b-35c3f87a5975","block_type":"box","text":"Registered Investment Companies 3 $ 6.62 Billion","page_number":47,"box":{"x":117,"y":598,"width":771,"height":13}},{"id":"eeae5e4a-6051-4b8c-ab3f-dd5a86d875db","block_type":"box","text":"Other Pooled Investment Vehicles 24 23.44 Billion","page_number":47,"box":{"x":116,"y":614,"width":772,"height":10}},{"id":"da1487ee-e5d7-4a61-bd74-89429212dd39","block_type":"box","text":"Other Accounts 5 7.14 Billion","page_number":47,"box":{"x":116,"y":630,"width":772,"height":9}},{"id":"9789f96b-8f59-4b38-8c6b-22f48606643f","block_type":"box","text":"Pursuant to BFA’s policy, investment opportunities are allocated equitably among the Fund and other","page_number":47,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"6d9f015a-a61e-468c-85b7-0ecda38d6eb0","block_type":"box","text":"portfolios and accounts. For example, under certain circumstances, an investment opportunity may be","page_number":47,"box":{"x":117,"y":676,"width":756,"height":12}},{"id":"84b79e1f-1b77-494a-9be8-036ab84ea9df","block_type":"box","text":"restricted due to","page_number":47,"box":{"x":117,"y":692,"width":119,"height":9}},{"id":"3a9862c1-6b78-4e4d-b300-25a99488a856","block_type":"box","text":"limited supply in the market, legal constraints or other factors, in which event the investment","page_number":47,"box":{"x":117,"y":723,"width":682,"height":12}},{"id":"c131f5c2-b4b0-4349-879f-984ecd5f929e","block_type":"box","text":"opportunity will be allocated equitably among those portfolios and accounts, including the Fund,","page_number":47,"box":{"x":116,"y":738,"width":708,"height":12}},{"id":"46dc4da7-303a-473d-a829-6cfb7023b4cd","block_type":"box","text":"seeking such investment opportunity. As a consequence, from time to time the Fund may receive a","page_number":47,"box":{"x":116,"y":754,"width":735,"height":12}},{"id":"c49fcb94-ffd4-43ae-901c-a512033bfef3","block_type":"box","text":"smaller allocation of an investment opportunity than it would have if the Portfolio Managers and BFA","page_number":47,"box":{"x":116,"y":769,"width":744,"height":12}},{"id":"4da6c140-4ba2-40b7-b4b0-d061292fd2e0","block_type":"box","text":"and its affiliates did not manage other portfolios or accounts.","page_number":47,"box":{"x":116,"y":785,"width":447,"height":12}},{"id":"581fa563-6c3c-4d23-9ce5-fcf8fe27f36f","block_type":"box","text":"Like the Fund, the other portfolios or accounts for which the Portfolio Managers are primarily","page_number":47,"box":{"x":117,"y":816,"width":685,"height":12}},{"id":"9e9ca734-2c69-4c16-bf83-04e6ee86c586","block_type":"box","text":"responsible for the day-to-day portfolio management generally pay an asset-based fee to BFA or its","page_number":47,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"e6d4d6c8-a1ab-4714-8230-83fcc6d4bc09","block_type":"box","text":"affiliates, as applicable, for its advisory services. One or more of those other portfolios or accounts,","page_number":47,"box":{"x":116,"y":847,"width":739,"height":12}},{"id":"0b0f5b1d-1b06-4407-8480-349fc7eb36df","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":47,"box":{"x":117,"y":862,"width":743,"height":12}},{"id":"7b2ce0c8-b0f3-4d7f-a2c6-8a84386f8271","block_type":"box","text":"based fee for its advisory services. A portfolio or account with a performance-based fee would pay BFA","page_number":47,"box":{"x":117,"y":878,"width":771,"height":12}},{"id":"4eace2c7-fa9a-45ca-bb99-0fcf09f60b2b","block_type":"box","text":"44","page_number":47,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"b5e26391-ca25-4037-b54e-b6894199e47a","block_type":"box","text":"NM1026U-6042785-47/259","page_number":47,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"481b1202-520a-4175-ad04-6ff5fc2a1ee7","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":48,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"b9f9317f-c12f-4969-8c17-19e27ed84660","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":48,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"69833cf1-9003-4ad3-b000-b2affd9cbd6f","block_type":"box","text":"performance targets. Performance-based fee arrangements could present an incentive for BFA or its","page_number":48,"box":{"x":117,"y":118,"width":751,"height":12}},{"id":"d778887e-9142-446a-b0f8-c787f7120ed7","block_type":"box","text":"affiliates to devote greater resources, and allocate more investment opportunities, to the portfolios or","page_number":48,"box":{"x":116,"y":134,"width":751,"height":12}},{"id":"3aa34d80-35f4-4164-8075-cbda4a53a8ab","block_type":"box","text":"accounts that have those fee arrangements, relative to other portfolios or accounts, in order to earn","page_number":48,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"574a7e72-778b-4551-86f8-ac444f680d9c","block_type":"box","text":"larger fees. Although BFA and each of its affiliates have an obligation to allocate resources and","page_number":48,"box":{"x":117,"y":165,"width":711,"height":12}},{"id":"40e08631-001a-4f63-ae34-4146fc53d9eb","block_type":"box","text":"opportunities equitably among portfolios and accounts and intend to do so, shareholders of the Fund","page_number":48,"box":{"x":116,"y":180,"width":751,"height":12}},{"id":"060d10fb-bdaf-42de-bbd5-bb2188dd2ef7","block_type":"box","text":"should be aware that, as with any group of portfolios and accounts managed by an investment adviser","page_number":48,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"98e2a4d0-bfc6-4b23-98c6-83915d2f0040","block_type":"box","text":"and/or its affiliates pursuant to varying fee arrangements, including performance-based fee","page_number":48,"box":{"x":116,"y":211,"width":679,"height":12}},{"id":"605af965-0c66-4c0d-aad4-7e242d97803c","block_type":"box","text":"arrangements, there is the potential for a conflict of interest, which may result in the Portfolio Managers","page_number":48,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"8a696d09-4a45-48b9-8724-55ebf09bc8e4","block_type":"box","text":"favoring those portfolios or accounts with performance-based fee arrangements.","page_number":48,"box":{"x":116,"y":242,"width":601,"height":12}},{"id":"7e5c84af-dcf6-411e-8ca1-5b09bc6fd812","block_type":"box","text":"The tables below show, for each Portfolio Manager, the number of portfolios or accounts of the types","page_number":48,"box":{"x":116,"y":272,"width":753,"height":12}},{"id":"ce43735f-0d22-46de-8b55-c02cbbdee60e","block_type":"box","text":"set forth in the above tables and the aggregate of total assets in those portfolios or accounts with","page_number":48,"box":{"x":116,"y":287,"width":724,"height":12}},{"id":"ca233e1b-d737-4752-8237-3f97cde78759","block_type":"box","text":"respect to which the investment management fees are based on the performance of those portfolios or","page_number":48,"box":{"x":117,"y":303,"width":766,"height":12}},{"id":"43e5f418-c4dc-44ba-93da-769fc088de8c","block_type":"box","text":"accounts as of August 31, 2026:","page_number":48,"box":{"x":116,"y":318,"width":245,"height":12}},{"id":"a7c4b19a-7a45-4a11-87d3-d2e2ddc571c7","block_type":"box","text":"Philip Green","page_number":48,"box":{"x":117,"y":348,"width":92,"height":11}},{"id":"6dbbbd04-96a5-4ccc-9dde-e830d3ac4315","block_type":"box","text":"Types of Accounts","page_number":48,"box":{"x":116,"y":408,"width":120,"height":10}},{"id":"07f82372-976c-4c1d-909f-84c3bea553c9","block_type":"box","text":"Number of Other","page_number":48,"box":{"x":623,"y":367,"width":107,"height":7}},{"id":"f4dd9099-00f7-4cca-9423-7da537c322e3","block_type":"box","text":"Accounts","page_number":48,"box":{"x":645,"y":377,"width":61,"height":8}},{"id":"ee807a07-9311-4df0-8dda-5ab2c41a7693","block_type":"box","text":"with Performance 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Commercial and investment performance is generally","page_number":49,"box":{"x":117,"y":349,"width":759,"height":12}},{"id":"915212bc-b71f-4182-adad-b5a95d13f150","block_type":"box","text":"assessed over trailing 1-,3-, and 5-year periods. The relative benchmarks for these portfolio managers","page_number":49,"box":{"x":116,"y":364,"width":764,"height":12}},{"id":"2a2c66aa-5498-48af-b2d4-7c1bec46e238","block_type":"box","text":"are: A combination of market based indices (Russell 1000, MSCI All Country World Index, Bloomberg","page_number":49,"box":{"x":116,"y":380,"width":758,"height":12}},{"id":"8742fa67-5538-4590-8098-70656ae5f521","block_type":"box","text":"Global Agg Treasury Index, Bloomberg US Agg Index, ICE BofA 3-Month US T Bill), certain custom","page_number":49,"box":{"x":117,"y":395,"width":742,"height":12}},{"id":"bc424ff4-d0d1-47bd-b037-4db2a2b18f97","block_type":"box","text":"indices and certain fund industry peer groups.","page_number":49,"box":{"x":117,"y":411,"width":344,"height":12}},{"id":"c8d9a706-31ca-4e0e-b2f9-3337aa1099c2","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":49,"box":{"x":117,"y":439,"width":429,"height":12}},{"id":"2b29149b-a7d7-4821-9645-bb8ba91b2f47","block_type":"box","text":"Discretionary incentive compensation is","page_number":49,"box":{"x":547,"y":439,"width":305,"height":12}},{"id":"6fd3768c-6f25-42a6-b814-fe8b618b3b87","block_type":"box","text":"distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/","page_number":49,"box":{"x":116,"y":454,"width":764,"height":12}},{"id":"224f5e8f-2ed7-4834-8525-f054e4472add","block_type":"box","text":"or deferred cash awards that notionally track the return of certain BlackRock investment products.","page_number":49,"box":{"x":116,"y":470,"width":731,"height":12}},{"id":"6d64f410-2144-4f6f-be3d-9eb2333a3f09","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash.","page_number":49,"box":{"x":117,"y":498,"width":725,"height":12}},{"id":"65682a87-14e1-4260-8b40-4704342f8b99","block_type":"box","text":"Portfolio managers whose total compensation is above a specified threshold also receive deferred","page_number":49,"box":{"x":117,"y":514,"width":732,"height":12}},{"id":"bd2aaec9-928e-4484-82b9-0fc57401e8a4","block_type":"box","text":"BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a","page_number":49,"box":{"x":117,"y":529,"width":757,"height":12}},{"id":"c5e5fef2-ad4f-4e2e-902e-5e1cf0a08260","block_type":"box","text":"portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts","page_number":49,"box":{"x":117,"y":545,"width":726,"height":12}},{"id":"4a77cbda-2a43-4144-abfc-25ff89a72db5","block_type":"box","text":"compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to","page_number":49,"box":{"x":116,"y":560,"width":757,"height":12}},{"id":"04e79b52-2c59-45d5-93f8-4c12a09cb325","block_type":"box","text":"sustain and improve its performance over future periods. In some cases, additional deferred","page_number":49,"box":{"x":116,"y":576,"width":688,"height":12}},{"id":"697b749b-2d09-4ed6-b87f-2bdd973c908f","block_type":"box","text":"BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award","page_number":49,"box":{"x":117,"y":591,"width":762,"height":12}},{"id":"28db7aef-e42d-4439-9f39-5ee225306991","block_type":"box","text":"to aid in retention, align interests with long-term shareholders and motivate performance. Deferred","page_number":49,"box":{"x":116,"y":607,"width":734,"height":12}},{"id":"457c122a-4c6c-40ec-b0d3-7f223ae84755","block_type":"box","text":"BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units","page_number":49,"box":{"x":117,"y":622,"width":768,"height":12}},{"id":"93e1b585-b9ab-4dbe-a506-cc0afcb6fb42","block_type":"box","text":"that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc.","page_number":49,"box":{"x":116,"y":638,"width":717,"height":12}},{"id":"3222b9a8-7f46-4129-a382-f127b35ca81e","block_type":"box","text":"common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.","page_number":49,"box":{"x":116,"y":653,"width":725,"height":12}},{"id":"48974112-7ef4-4fcc-95fb-5ba8750c971b","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed","page_number":49,"box":{"x":117,"y":681,"width":759,"height":12}},{"id":"03d413f2-adfa-4bb0-8ab2-5b36c4364798","block_type":"box","text":"in the form of deferred cash awards that notionally track the returns of select BlackRock investment","page_number":49,"box":{"x":117,"y":697,"width":736,"height":12}},{"id":"3587be44-98f9-4dfa-8fbb-e64458c18413","block_type":"box","text":"products they manage, which provides direct alignment of portfolio manager discretionary incentive","page_number":49,"box":{"x":117,"y":712,"width":735,"height":12}},{"id":"43c453f1-4ea5-47be-8f11-54f7f8ab5a1a","block_type":"box","text":"compensation with investment product results. Deferred cash awards vest ratably over a number of","page_number":49,"box":{"x":116,"y":728,"width":738,"height":12}},{"id":"25620ca3-3cd4-4c8a-9030-9869f984b94b","block_type":"box","text":"years and, once vested, settle in the form of cash. Only portfolio managers who manage specified","page_number":49,"box":{"x":116,"y":743,"width":726,"height":12}},{"id":"22f7db81-54d5-419c-872b-1bcef186787a","block_type":"box","text":"products and whose total compensation is above a specified threshold are eligible to participate in the","page_number":49,"box":{"x":117,"y":759,"width":754,"height":12}},{"id":"fc62dcba-c2b6-4d65-8167-af1efd088a5d","block_type":"box","text":"deferred cash award program.","page_number":49,"box":{"x":116,"y":774,"width":224,"height":12}},{"id":"8c20f9bf-61d9-48cd-88cb-a434447af481","block_type":"box","text":"Other Compensation Benefits.","page_number":49,"box":{"x":116,"y":803,"width":241,"height":12}},{"id":"8d513444-b701-43d3-b695-ef21e2fd8e2a","block_type":"box","text":"In addition to base compensation and discretionary incentive","page_number":49,"box":{"x":364,"y":803,"width":449,"height":12}},{"id":"e3a78d1e-1b0e-4262-9c47-8b7be3b1d105","block_type":"box","text":"compensation, portfolio managers may be eligible to receive or participate in one or more of the","page_number":49,"box":{"x":116,"y":818,"width":709,"height":12}},{"id":"0aaf41c6-842b-431d-9cd1-a7beaa7924a6","block_type":"box","text":"following:","page_number":49,"box":{"x":116,"y":834,"width":75,"height":12}},{"id":"222c403f-84d7-4a34-9750-5aaab72d32d7","block_type":"box","text":"Incentive Savings Plans","page_number":49,"box":{"x":117,"y":862,"width":177,"height":12}},{"id":"dab8184f-3959-46ed-8038-a4dd4b86628b","block_type":"box","text":"s — BlackRock, Inc. has created a variety of incentive savings plans in which","page_number":49,"box":{"x":294,"y":862,"width":570,"height":12}},{"id":"6fbcdcff-f8f9-4f33-b6ec-d85484eeea69","block_type":"box","text":"BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock","page_number":49,"box":{"x":117,"y":877,"width":688,"height":12}},{"id":"21f3c478-f62e-44e7-9dd4-d79f57dc6b99","block_type":"box","text":"46","page_number":49,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e3404f4c-c7ea-4338-b219-93375d82c634","block_type":"box","text":"NM1026U-6042785-49/259","page_number":49,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"cde54da4-7754-4530-a2aa-d33f39177a33","block_type":"box","text":"Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The","page_number":50,"box":{"x":117,"y":87,"width":728,"height":12}},{"id":"a6e705c1-409a-43b8-be05-226e2c77cbed","block_type":"box","text":"employer contribution components of the RSP include a company match equal to 50% of the first","page_number":50,"box":{"x":116,"y":102,"width":725,"height":13}},{"id":"fc217faf-78d2-489d-9f55-1151509d943f","block_type":"box","text":"8% of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement","page_number":50,"box":{"x":116,"y":117,"width":714,"height":13}},{"id":"90a0452f-c6f7-411e-94a3-7084886706a5","block_type":"box","text":"contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit","page_number":50,"box":{"x":116,"y":134,"width":684,"height":12}},{"id":"c4c3512a-5f74-49ee-b7a7-b7df9c202a37","block_type":"box","text":"($360,000 for 2026). The RSP offers a range of investment options, including registered investment","page_number":50,"box":{"x":117,"y":148,"width":743,"height":13}},{"id":"99da94c6-9f3f-4fe0-a28a-efbd011a74fc","block_type":"box","text":"companies and collective investment funds managed by the firm. BlackRock, Inc. contributions follow","page_number":50,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"31de68ca-e545-46b0-a24a-7a7b27472dbd","block_type":"box","text":"the investment direction set by participants for their own contributions or, absent participant investment","page_number":50,"box":{"x":116,"y":180,"width":768,"height":12}},{"id":"bfe60416-4f7a-4db4-97b1-c1f98adb2787","block_type":"box","text":"direction, are invested into a target date fund that corresponds to, or is closest to, the year in which the","page_number":50,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"e128d170-a7c5-4963-8da7-613fecca82d9","block_type":"box","text":"participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a","page_number":50,"box":{"x":117,"y":211,"width":726,"height":12}},{"id":"630d0853-876b-4308-bc80-c7991d19fa7c","block_type":"box","text":"5% discount on the fair market value of the stock on the purchase date. Annual participation in the","page_number":50,"box":{"x":116,"y":227,"width":733,"height":11}},{"id":"80f4b8a0-c72f-44db-83d4-3b680ce17b6f","block_type":"box","text":"ESPP is limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based","page_number":50,"box":{"x":117,"y":241,"width":751,"height":13}},{"id":"7707f6a9-92e7-40fb-a64c-ef8d8058e402","block_type":"box","text":"on its fair market value on the purchase date. All of the eligible portfolio managers are eligible to","page_number":50,"box":{"x":116,"y":258,"width":717,"height":12}},{"id":"a89694c9-bbd8-4c10-b647-4088f2d0feb5","block_type":"box","text":"participate in these plans.","page_number":50,"box":{"x":117,"y":273,"width":194,"height":12}},{"id":"13bb6c65-f082-4162-a18f-7a5a7b49f658","block_type":"box","text":"As of the date of this SAI, the Portfolio Managers did not beneficially own shares of the Fund.","page_number":50,"box":{"x":116,"y":304,"width":697,"height":12}},{"id":"fec0b24c-80f3-4f93-bd84-193295481caa","block_type":"box","text":"Codes of Ethics.","page_number":50,"box":{"x":116,"y":335,"width":130,"height":10}},{"id":"d7cbcc95-8dd2-4472-971b-97bd0a6f558a","block_type":"box","text":"The Trust, BFA, the Sub-Advisers and the Distributor have adopted codes of ethics","page_number":50,"box":{"x":248,"y":335,"width":627,"height":12}},{"id":"473df8ba-01d8-4d5f-b0f7-462564783611","block_type":"box","text":"pursuant to Rule 17j-1 under the 1940 Act. The codes of ethics permit personnel subject to the codes","page_number":50,"box":{"x":117,"y":351,"width":756,"height":12}},{"id":"6a7bee06-e8f4-4f73-955a-babaf8d24663","block_type":"box","text":"of ethics to invest in securities, subject to certain limitations, including securities that may be purchased","page_number":50,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"013316e9-862d-4b7c-bf1c-00f28b5cfeee","block_type":"box","text":"or held by the Fund. Each code of ethics is available by contacting BlackRock at the telephone number","page_number":50,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"6e93bc08-239c-4dbb-84e2-7f1f17fba4da","block_type":"box","text":"on the back cover of the Fund’s Prospectus or by accessing the EDGAR Database on the SEC’s","page_number":50,"box":{"x":116,"y":397,"width":722,"height":12}},{"id":"bb18502f-9fac-4e12-ae81-42a715ef4545","block_type":"box","text":"Internet site at http://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by","page_number":50,"box":{"x":117,"y":413,"width":728,"height":12}},{"id":"a25cde42-2dca-411c-93df-acf2dd4c62db","block_type":"box","text":"e-mail at publicinfo@sec.gov.","page_number":50,"box":{"x":116,"y":428,"width":225,"height":12}},{"id":"73eb3cee-7ee2-4f9b-91d8-c6c2a320a80e","block_type":"box","text":"Anti-Money Laundering Requirements.","page_number":50,"box":{"x":116,"y":459,"width":308,"height":12}},{"id":"91cadf46-a7c6-47a2-a1db-3bec4e1f1a4e","block_type":"box","text":"The Fund is subject to the USA PATRIOT Act (the “Patriot","page_number":50,"box":{"x":425,"y":459,"width":442,"height":12}},{"id":"ebdb0a66-96c9-482b-bab7-96f8610a2a9a","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":50,"box":{"x":116,"y":475,"width":722,"height":12}},{"id":"6b490d4f-fad5-480c-9ba4-ef815f3911d8","block_type":"box","text":"money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the","page_number":50,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"2e7f0199-c320-4f8f-88ab-585d1dd16ce7","block_type":"box","text":"Fund may request information from Authorized Participants to enable it to form a reasonable belief that","page_number":50,"box":{"x":117,"y":506,"width":767,"height":12}},{"id":"843b1c74-a4d7-4df8-b954-863a3803f6e6","block_type":"box","text":"it knows the true identity of its Authorized Participants. This information will be used to verify the","page_number":50,"box":{"x":117,"y":521,"width":715,"height":12}},{"id":"5dfe223e-7fc2-4bd0-835c-dbbdfbe03ee8","block_type":"box","text":"identity of Authorized Participants or, in some cases, the status of financial professionals; it will be","page_number":50,"box":{"x":117,"y":537,"width":730,"height":12}},{"id":"dbc1126f-0ede-46f0-b9af-7d9efb2a5f08","block_type":"box","text":"used only for compliance with the requirements of the Patriot Act.","page_number":50,"box":{"x":117,"y":552,"width":489,"height":12}},{"id":"dd15fe59-88b7-4a9b-9355-d3850f5839e2","block_type":"box","text":"The Fund reserves the right to reject purchase orders from persons who have not submitted","page_number":50,"box":{"x":116,"y":583,"width":688,"height":12}},{"id":"89d34124-016f-40d2-8051-ba20871a9e3b","block_type":"box","text":"information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to","page_number":50,"box":{"x":117,"y":599,"width":720,"height":12}},{"id":"a4f62956-8335-4962-bc2e-6f7085c922df","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":50,"box":{"x":117,"y":614,"width":762,"height":12}},{"id":"9d10e33d-ea2f-4118-a4d6-0dae1e4f9ece","block_type":"box","text":"is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with","page_number":50,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"28281830-a599-478a-90ea-023e64651077","block_type":"box","text":"respect to potential money laundering, terrorism or other illicit activities.","page_number":50,"box":{"x":117,"y":645,"width":533,"height":12}},{"id":"69946969-e60d-4ec2-a42d-3511627806d7","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":50,"box":{"x":116,"y":676,"width":364,"height":12}},{"id":"c2634c6a-d83c-4456-9e89-bb95bfcda5df","block_type":"box","text":"State Street Bank and Trust Company (“State","page_number":50,"box":{"x":487,"y":676,"width":338,"height":12}},{"id":"34f04830-babd-41a3-aa75-709a3757cdeb","block_type":"box","text":"Street”) serves as administrator, custodian and transfer agent for the Fund under the Master Services","page_number":50,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"dcbe01f6-cb53-4fbf-9466-99d4f96b8904","block_type":"box","text":"Agreement and related Service Schedule (the “Service Module”). State Street’s principal address is","page_number":50,"box":{"x":116,"y":707,"width":736,"height":12}},{"id":"199d9682-e146-4a09-8ad3-7af4ca481407","block_type":"box","text":"One Congress Street, Suite 1, Boston, MA 02114. Pursuant to the Service Module for Fund","page_number":50,"box":{"x":116,"y":723,"width":678,"height":12}},{"id":"d7cf9ef3-8c11-4d78-b3b4-09d10cf7dd44","block_type":"box","text":"Administration and Accounting Services with the Trust, State Street provides necessary administrative,","page_number":50,"box":{"x":116,"y":738,"width":762,"height":12}},{"id":"2ba6256d-2c7d-47b4-a394-72905a6263a4","block_type":"box","text":"legal, tax and accounting and financial reporting services for the maintenance and operations of the","page_number":50,"box":{"x":117,"y":754,"width":737,"height":12}},{"id":"6e84cbd1-d2dd-412d-9446-395213efbb78","block_type":"box","text":"Trust and the Fund. In addition, State Street makes available the office space, equipment, personnel","page_number":50,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"2fdc754e-9303-4d50-ac00-4af9de128fb5","block_type":"box","text":"and facilities required to provide such services. Pursuant to the Service Module for Custodial Services","page_number":50,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"ed064aa6-ca35-4900-9181-2698053bec18","block_type":"box","text":"with the Trust, State Street maintains, in separate accounts, cash, securities and other assets of the","page_number":50,"box":{"x":116,"y":800,"width":742,"height":12}},{"id":"ecd1b0fe-ea98-4aed-9f77-787188c1998c","block_type":"box","text":"Trust and the Fund, keeps all necessary accounts and records and provides other services. State","page_number":50,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"774c27c5-963f-4a0a-88b4-03afc8725c4d","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":50,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"4dcd728b-3cfc-4260-b3aa-ec62f81e90ec","block_type":"box","text":"payments for securities purchased by the Trust for the Fund. State Street is authorized to appoint","page_number":50,"box":{"x":117,"y":847,"width":726,"height":12}},{"id":"8d51a00a-52aa-477b-b8b6-6a4eecbb728c","block_type":"box","text":"certain foreign custodians or foreign custody managers for Fund investments outside the U.S.","page_number":50,"box":{"x":116,"y":862,"width":701,"height":12}},{"id":"59eb12a3-8ab9-4e4f-a215-cd2508ff9771","block_type":"box","text":"Pursuant to the Service Module for Transfer Agency Services","page_number":50,"box":{"x":117,"y":878,"width":455,"height":12}},{"id":"dfe1821f-0e9f-4d0b-864f-ec860eca498b","block_type":"box","text":"with the Trust, State Street acts as a","page_number":50,"box":{"x":572,"y":878,"width":281,"height":11}},{"id":"7c5e8702-d851-43e2-b957-498f52796fe8","block_type":"box","text":"47","page_number":50,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"822b7348-1848-4a12-a809-aa17dbae6b8d","block_type":"box","text":"NM1026U-6042785-50/259","page_number":50,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7f1fa454-fbc4-4ab2-a3ac-a5095b2e9fe6","block_type":"box","text":"transfer agent for the Fund’s authorized and issued shares of beneficial interest, and as dividend","page_number":51,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"51ac2c0f-090a-4216-a5f4-0d2efc3c40b4","block_type":"box","text":"disbursing agent of the Trust. As compensation for these services, State Street receives certain","page_number":51,"box":{"x":116,"y":102,"width":714,"height":13}},{"id":"3fd932d3-b06a-4144-8fa2-2655024c52b3","block_type":"box","text":"out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid monthly","page_number":51,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"342fe5cd-c24a-4738-91ba-4dc74556cccc","block_type":"box","text":"by BFA. BFA pays the compensation because it has agreed to pay these operating expenses under","page_number":51,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"ba5677f9-e90a-45f9-a1ad-d951461e5135","block_type":"box","text":"the Investment Advisory Agreement as described therein.","page_number":51,"box":{"x":116,"y":149,"width":432,"height":12}},{"id":"389df537-9a50-4188-96c4-951d203412a6","block_type":"box","text":"Credit Agreement.","page_number":51,"box":{"x":116,"y":180,"width":142,"height":12}},{"id":"8bf5fcd6-c12a-4bd8-ba94-97a483fd660e","block_type":"box","text":"It is expected that the Trust, on behalf of the Fund, will become a party to a 364-day,","page_number":51,"box":{"x":259,"y":180,"width":623,"height":12}},{"id":"aa2ad440-dbb0-4232-8f4e-ab230413f1ea","block_type":"box","text":"$2.4 billion credit agreement, along with certain","page_number":51,"box":{"x":116,"y":195,"width":348,"height":13}},{"id":"bd975350-cb75-4669-8d01-dbbba97858f9","block_type":"box","text":"other funds managed by BFA and its affiliates","page_number":51,"box":{"x":464,"y":196,"width":336,"height":12}},{"id":"322687fe-f0ca-40a1-8ffd-4fad029c6156","block_type":"box","text":"(“Participating Funds”) with a group of lenders, which fa","page_number":51,"box":{"x":117,"y":211,"width":401,"height":12}},{"id":"ecec3050-0554-4c00-b529-6a9f0c4dbedf","block_type":"box","text":"cility terminates on April 8, 2027, unless otherwise","page_number":51,"box":{"x":519,"y":211,"width":369,"height":12}},{"id":"56d811c7-9670-4c4f-a2b1-7cb40b888fa6","block_type":"box","text":"extended or renewed (the “Credit Agreement”).","page_number":51,"box":{"x":116,"y":227,"width":347,"height":12}},{"id":"d114f8d8-4402-4679-b24d-c6a7f8fc52bc","block_type":"box","text":"Excluding commitments designated for certain","page_number":51,"box":{"x":464,"y":227,"width":340,"height":12}},{"id":"4d666c60-b863-4d9b-a7c3-8d1b005e5a7c","block_type":"box","text":"Participating Funds, the Participating Funds, including the Fund, can borrow up to an aggregate","page_number":51,"box":{"x":117,"y":242,"width":698,"height":12}},{"id":"51713519-8ff9-413d-96b0-53a6dd22706d","block_type":"box","text":"commitment amount of $1.75 billion at any time","page_number":51,"box":{"x":116,"y":257,"width":350,"height":13}},{"id":"a0c18cff-1152-4c67-8883-94fc987ff2ba","block_type":"box","text":"outstanding, subject to asset coverage and other","page_number":51,"box":{"x":466,"y":258,"width":359,"height":12}},{"id":"7f6d440e-1e14-4fbb-bf8f-72af985faa33","block_type":"box","text":"limitations as specified in the Credit Agreem","page_number":51,"box":{"x":117,"y":273,"width":318,"height":12}},{"id":"0b48aabf-dd42-4332-b357-48aba68bf9f6","block_type":"box","text":"ent. The Fund may borrow under the Credit Agreement to","page_number":51,"box":{"x":436,"y":273,"width":424,"height":12}},{"id":"4a067dd2-a4ca-481c-adaa-ea4e8eead31e","block_type":"box","text":"meet shareholder redemptions and for other lawf","page_number":51,"box":{"x":117,"y":289,"width":355,"height":12}},{"id":"d88bb00b-b8ea-4850-a087-c8abca45e3c4","block_type":"box","text":"ul purposes. However, the Fund may not borrow under","page_number":51,"box":{"x":472,"y":289,"width":402,"height":12}},{"id":"c651fe35-e8e5-4ed9-ac8e-d4254eb9abbd","block_type":"box","text":"the Credit Agreement for leverage. The Fund may borro","page_number":51,"box":{"x":116,"y":304,"width":406,"height":12}},{"id":"3ff8c174-54dd-46e0-9f39-df7d7baf9257","block_type":"box","text":"w up to the maximum amount allowable under its","page_number":51,"box":{"x":522,"y":304,"width":362,"height":12}},{"id":"705b4b63-366e-417f-b69c-082f3aced805","block_type":"box","text":"current Prospectus and SAI, subject to various other","page_number":51,"box":{"x":116,"y":320,"width":385,"height":12}},{"id":"0e210c5f-64b9-48fa-bc78-183971fc6155","block_type":"box","text":"legal, regulatory or contractual limits. Borrowing","page_number":51,"box":{"x":502,"y":320,"width":350,"height":12}},{"id":"3919efd0-3868-4b9b-b8ac-266a1e679497","block_type":"box","text":"results in interest expense and other fees and ex","page_number":51,"box":{"x":117,"y":335,"width":354,"height":12}},{"id":"bab304ed-418a-48e0-9da7-cb3ea0610718","block_type":"box","text":"penses for the Fund which may impact the Fund’s net","page_number":51,"box":{"x":472,"y":335,"width":394,"height":12}},{"id":"62b1b622-cb9f-4b4c-8014-2934b0a99858","block_type":"box","text":"expenses. The costs of borrowing may reduce the Fund’s return. The Fund is charged its pro rata share","page_number":51,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"19fa1057-9d38-4ffb-b915-47db0956742b","block_type":"box","text":"of upfront fees and commitment fees on the aggr","page_number":51,"box":{"x":116,"y":366,"width":356,"height":12}},{"id":"202fa3b1-fbb6-44b8-9ef1-831ee5668421","block_type":"box","text":"egate commitment amount based on its net assets. If","page_number":51,"box":{"x":472,"y":366,"width":390,"height":12}},{"id":"fb069c8c-409b-4402-b8da-49a9bd33a1d4","block_type":"box","text":"the Fund borrows pursuant to the Credit Agreement, t","page_number":51,"box":{"x":116,"y":382,"width":386,"height":12}},{"id":"3a94aba0-41fc-496d-948e-0106e7e63ee9","block_type":"box","text":"the Fund will be charged interest at a variable rate.","page_number":51,"box":{"x":501,"y":382,"width":374,"height":12}},{"id":"dcfcc0c0-cd6c-427d-a1bb-069cd6335a20","block_type":"box","text":"Distributor.","page_number":51,"box":{"x":117,"y":413,"width":88,"height":9}},{"id":"9939361d-5cf1-4e2c-8482-40fda4f77f76","block_type":"box","text":"The Distributor’s principal address is 50 Hudson Yards, New York, NY 10001. Shares are","page_number":51,"box":{"x":206,"y":413,"width":674,"height":12}},{"id":"dbd11ccd-6c73-421c-932b-065f77c4550d","block_type":"box","text":"continuously offered for sale by the Fund through the Distributor or its agent only in Creation Units, as","page_number":51,"box":{"x":116,"y":428,"width":760,"height":12}},{"id":"35f10605-779e-4d0a-a8b4-2f3676063e73","block_type":"box","text":"described in the Prospectus and below in the","page_number":51,"box":{"x":116,"y":444,"width":334,"height":12}},{"id":"fb1b3167-0578-45b3-8cb0-5b143d7a3a9a","block_type":"box","text":"Creation","page_number":51,"box":{"x":451,"y":444,"width":67,"height":9}},{"id":"d5f7a006-34f0-440f-a512-24cf6457c5ec","block_type":"box","text":"and Redemption of Creation Units","page_number":51,"box":{"x":524,"y":444,"width":258,"height":12}},{"id":"cc32900d-ce7c-4d29-96ee-56d1d443fa85","block_type":"box","text":"section of","page_number":51,"box":{"x":782,"y":444,"width":76,"height":9}},{"id":"1088e186-20e5-45e7-a2c5-5870025ba5d1","block_type":"box","text":"this SAI. Fund shares in amounts less than Creation Units are generally not distributed by the","page_number":51,"box":{"x":116,"y":459,"width":699,"height":12}},{"id":"5f4fd9ea-f4b3-4fc0-b4eb-84eedd8d9b60","block_type":"box","text":"Distributor or its agent. The Distributor or its agent will arrange for the delivery of the Prospectus and,","page_number":51,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"faac7483-7784-4da6-a781-be286ac8172c","block_type":"box","text":"upon request, this SAI to persons purchasing Creation Units and will maintain records of both orders","page_number":51,"box":{"x":117,"y":490,"width":749,"height":12}},{"id":"8bfdeac4-bf23-42f3-944e-acf9c278b47a","block_type":"box","text":"placed with it or its agents and confirmations of acceptance furnished by it or its agents. The Distributor","page_number":51,"box":{"x":117,"y":506,"width":770,"height":12}},{"id":"2bd6f737-03e0-410e-8995-adfc1b7fca56","block_type":"box","text":"is a broker-dealer registered under the Securities Exchange Act of 1934, as amended (the “1934 Act”),","page_number":51,"box":{"x":117,"y":521,"width":766,"height":12}},{"id":"e0fec9b8-8dbd-4512-b08e-769ee40a8964","block_type":"box","text":"and a member of the Financial Industry Regulatory Authority, Inc. (“FINRA”). The Distributor is also","page_number":51,"box":{"x":116,"y":537,"width":740,"height":12}},{"id":"96b085ed-9827-467d-b9c0-f7bbcb562cd5","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":51,"box":{"x":117,"y":552,"width":758,"height":12}},{"id":"e74f3e4b-fd41-4803-bed2-f48d5515bcb6","block_type":"box","text":"the District of Columbia.","page_number":51,"box":{"x":116,"y":568,"width":183,"height":9}},{"id":"56caa881-d745-45cc-9789-32f1a4b1d034","block_type":"box","text":"The Distribution Agreement for the Fund provides that it may be terminated at any time, without the","page_number":51,"box":{"x":116,"y":599,"width":741,"height":12}},{"id":"53d78e39-294d-4999-a649-00c7b27cd91b","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":51,"box":{"x":117,"y":614,"width":761,"height":12}},{"id":"3f18d774-1ea1-41be-aa23-7aae6feec838","block_type":"box","text":"of a majority of the Independent Trustees, or (ii) the vote of a majority of the outstanding voting","page_number":51,"box":{"x":116,"y":630,"width":709,"height":12}},{"id":"40748316-8118-4f6b-a4d7-ab23d6f47499","block_type":"box","text":"securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate","page_number":51,"box":{"x":116,"y":645,"width":693,"height":12}},{"id":"7e6c16d8-c941-4822-b3e1-a6ee446941d0","block_type":"box","text":"automatically in the event of its assignment (as defined in the 1940 Act).","page_number":51,"box":{"x":116,"y":661,"width":534,"height":12}},{"id":"82645e9e-7e70-4f9d-aaa3-b17e869f4fca","block_type":"box","text":"The Distributor may also enter into agreements with securities dealers (“Soliciting Dealers”) who will","page_number":51,"box":{"x":116,"y":692,"width":740,"height":12}},{"id":"b0e6911e-49e4-44c5-b824-7b41cab720c2","block_type":"box","text":"solicit purchases of Creation Units of Fund shares. Such Soliciting Dealers may also be Authorized","page_number":51,"box":{"x":116,"y":707,"width":733,"height":12}},{"id":"c8a7bce3-56dc-4925-a1f2-f613b0384c70","block_type":"box","text":"Participants (as described below), Depository Trust Company (“DTC”) participants and/or investor","page_number":51,"box":{"x":117,"y":723,"width":725,"height":12}},{"id":"f1788d1e-d6c0-43f3-9baa-9ddc73e19105","block_type":"box","text":"services organizations.","page_number":51,"box":{"x":116,"y":738,"width":169,"height":12}},{"id":"8d347fb6-59b5-492c-831e-6c1114f01ab7","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":51,"box":{"x":117,"y":769,"width":729,"height":12}},{"id":"6a6ea9c7-42f2-489a-8f32-e17b73fb2183","block_type":"box","text":"relating to distribution, including payments out of its own resources to the Distributor, or to otherwise","page_number":51,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"be95d2ce-269f-4d27-b717-55f2e02deb3d","block_type":"box","text":"promote the sale of shares.","page_number":51,"box":{"x":117,"y":800,"width":201,"height":12}},{"id":"d83f30ea-b3ed-49b7-87de-572b8bb64e96","block_type":"box","text":"Securities Lending.","page_number":51,"box":{"x":116,"y":831,"width":154,"height":12}},{"id":"3394d226-6b54-41c3-9447-1fce8e8bf426","block_type":"box","text":"To the extent that the Fund engages in securities lending, the Fund conducts its","page_number":51,"box":{"x":271,"y":831,"width":603,"height":12}},{"id":"23d77840-d920-417b-8b63-41712097c354","block_type":"box","text":"securities lending pursuant to an exemptive order from the Commission permitting it to lend portfolio","page_number":51,"box":{"x":116,"y":847,"width":747,"height":12}},{"id":"64e176c2-a75b-4ba9-b32c-b397d69f71d9","block_type":"box","text":"securities to borrowers affiliated with the Fund and to retain an affiliate of the Fund as securities","page_number":51,"box":{"x":116,"y":862,"width":715,"height":10}},{"id":"8d48c329-792a-4de9-9a99-02909a09bd7b","block_type":"box","text":"lending agent. To the extent that the Fund engages in securities lending, BTC acts as securities","page_number":51,"box":{"x":117,"y":878,"width":714,"height":12}},{"id":"dadb67a6-5476-4d29-911c-2546f28200a3","block_type":"box","text":"48","page_number":51,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"b9c6c312-c05d-43b3-8a24-8c943c0d398b","block_type":"box","text":"NM1026U-6042785-51/259","page_number":51,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e8f27b50-561d-4044-a884-37eb7e400d97","block_type":"box","text":"lending agent for the Fund, subject to the overall supervision of BFA, pursuant to a written agreement","page_number":52,"box":{"x":117,"y":87,"width":757,"height":12}},{"id":"e4d6ef17-b317-4f06-96f6-6b4e8c26e56d","block_type":"box","text":"(the “Securities Lending Agency Agreement”). BTC administers the lending program in accordance","page_number":52,"box":{"x":117,"y":102,"width":738,"height":13}},{"id":"8e5b99b2-48a7-4b2d-911b-848c123de483","block_type":"box","text":"with guidelines approved by the Board.","page_number":52,"box":{"x":116,"y":118,"width":294,"height":12}},{"id":"3525ed65-f584-4342-9375-1cc2219f537c","block_type":"box","text":"The Fund retains a portion of the securities lending income and remits the remaining portion to BTC as","page_number":52,"box":{"x":116,"y":147,"width":768,"height":12}},{"id":"13dfa18a-e7d3-41de-bf95-e0ddf5c5350c","block_type":"box","text":"compensation for its services as securities lending agent. Securities lending income is generally equal","page_number":52,"box":{"x":116,"y":162,"width":762,"height":12}},{"id":"32b981fb-b8f9-4559-9dc8-a28f5eb541e1","block_type":"box","text":"to the total of income earned from the reinvestment of cash collateral (and excludes collateral","page_number":52,"box":{"x":116,"y":178,"width":698,"height":12}},{"id":"fdfda9b3-b3dc-424c-b1cc-31bb9d62e17e","block_type":"box","text":"investment fees as defined below), and any fees or other payments to and from borrowers of","page_number":52,"box":{"x":117,"y":193,"width":692,"height":12}},{"id":"dd076e0b-8423-4f3c-aad2-6206f7c6862f","block_type":"box","text":"securities. As securities lending agent, BTC bears all operational costs directly related to securities","page_number":52,"box":{"x":116,"y":209,"width":738,"height":12}},{"id":"71bd830f-b1ab-4ac0-b24d-29c2c21c994d","block_type":"box","text":"lending. The Fund is responsible for fees in connection with the investment of cash collateral received","page_number":52,"box":{"x":117,"y":224,"width":759,"height":12}},{"id":"4a550250-f7ff-4045-b1d4-f89b0e807527","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":52,"box":{"x":116,"y":240,"width":759,"height":12}},{"id":"8e5fa150-bbfb-4019-bd6c-a49dee0210eb","block_type":"box","text":"subject to any waivers (the “collateral investment fees”); however, BTC has agreed to reduce the","page_number":52,"box":{"x":116,"y":255,"width":723,"height":12}},{"id":"5c16d1fb-415c-4afa-b709-98aeae7a3255","block_type":"box","text":"amount of securities lending income it receives in order to effectively limit the collateral investment fees","page_number":52,"box":{"x":116,"y":271,"width":771,"height":12}},{"id":"8cdc9110-d934-4c4a-8d40-d7c77604927f","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":52,"box":{"x":116,"y":286,"width":742,"height":12}},{"id":"84d20db2-34de-4fc7-86d2-550119056f72","block_type":"box","text":"sales load, distribution fee or service fee.","page_number":52,"box":{"x":116,"y":302,"width":309,"height":11}},{"id":"b519fcf0-a52c-426a-9d61-7c6ebd8644a2","block_type":"box","text":"To the extent that the Fund invests cash collateral in a non-government money market fund, the Fund","page_number":52,"box":{"x":116,"y":331,"width":760,"height":12}},{"id":"1c09c7f8-b743-45cb-a594-0e6c3850024e","block_type":"box","text":"may be subject to a discretionary liquidity fee of up to 2% on all redemptions. Discretionary liquidity","page_number":52,"box":{"x":117,"y":346,"width":739,"height":12}},{"id":"444ac783-667f-4487-800f-c5e3eb523619","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":52,"box":{"x":116,"y":362,"width":764,"height":12}},{"id":"531d2b7c-b5c8-46cc-8b61-90497beb7234","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":52,"box":{"x":117,"y":377,"width":763,"height":12}},{"id":"25f090cd-0951-496f-b068-1f4989d53d66","block_type":"box","text":"the best interest of the money market fund. Additionally, the Fund will be subject to a mandatory","page_number":52,"box":{"x":116,"y":393,"width":718,"height":12}},{"id":"a5d55cdf-504c-4964-9efe-766604a7cbb3","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":52,"box":{"x":117,"y":408,"width":760,"height":12}},{"id":"e8044238-4fa1-468c-804e-060c30e4a0d6","block_type":"box","text":"market fund’s net assets, unless the liquidity costs are de minimis (","page_number":52,"box":{"x":117,"y":424,"width":496,"height":12}},{"id":"4bf2c0a9-fc52-4ba1-9e4c-57d8deade22a","block_type":"box","text":"i.e.","page_number":52,"box":{"x":614,"y":424,"width":20,"height":9}},{"id":"f37e11f0-8d22-461a-b9d8-e8370f1227f3","block_type":"box","text":", less than one basis point","page_number":52,"box":{"x":637,"y":424,"width":198,"height":12}},{"id":"63bea03f-6bd6-4306-9d49-a728da70a424","block_type":"box","text":"(0.01%)). The money market fund will determine the size of the mandatory liquidity fee by making a","page_number":52,"box":{"x":117,"y":439,"width":741,"height":12}},{"id":"6c05357a-b6b8-4c37-ac96-5074160774d5","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":52,"box":{"x":116,"y":455,"width":724,"height":12}},{"id":"5a8a5eef-39e0-48a5-91cb-841684ee0dc3","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":52,"box":{"x":116,"y":470,"width":756,"height":12}},{"id":"1f5a30f7-3290-42bd-b3c8-e825292ce25c","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":52,"box":{"x":117,"y":486,"width":754,"height":12}},{"id":"46b41148-c5aa-47c4-9486-421f16762fb9","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":52,"box":{"x":116,"y":501,"width":765,"height":12}},{"id":"823f87f9-0752-4bc0-b166-71610e348204","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":52,"box":{"x":116,"y":517,"width":759,"height":12}},{"id":"d8c7df14-38c1-4d2c-9861-37b198ea1625","block_type":"box","text":"such discretionary or mandatory liquidity fee would reduce the Fund’s returns on securities lending.","page_number":52,"box":{"x":116,"y":532,"width":741,"height":12}},{"id":"6b92906d-d2ea-44d3-89b2-b82e187cdd47","block_type":"box","text":"Under the securities lending program, the Fund is categorized into one of several specific asset","page_number":52,"box":{"x":117,"y":561,"width":712,"height":12}},{"id":"c9daa005-80f1-4342-a098-8f24f60d1824","block_type":"box","text":"classes. The determination of the Fund’s asset class category (fixed-income, domestic equity,","page_number":52,"box":{"x":116,"y":576,"width":701,"height":12}},{"id":"6671c41f-2e2f-430b-9a22-000b04cb427a","block_type":"box","text":"international equity or fund of funds), each of which may be subject to a different fee arrangement, is","page_number":52,"box":{"x":117,"y":592,"width":750,"height":12}},{"id":"4ca87dd5-4750-41ba-ad7d-368f15738874","block_type":"box","text":"based on a methodology agreed to by the Trust and BTC.","page_number":52,"box":{"x":117,"y":607,"width":433,"height":12}},{"id":"74e0fcc8-2855-42ce-b206-6849f6a51103","block_type":"box","text":"Pursuant to the securities lending agreement effective January 1, 2026: (i) the Fund retains 81% of","page_number":52,"box":{"x":117,"y":636,"width":738,"height":12}},{"id":"1f40577f-6af7-43ad-9c18-7f8ee39aa57c","block_type":"box","text":"securities lending income (which excludes collateral investment fees); and (ii) this amount can never","page_number":52,"box":{"x":116,"y":652,"width":749,"height":12}},{"id":"a05d3e5e-decd-49ad-bde4-f9739ac6ef24","block_type":"box","text":"be less than 70% of the sum of securities lending income plus collateral investment fees.","page_number":52,"box":{"x":117,"y":667,"width":657,"height":12}},{"id":"757a6eca-9ca9-4f31-9b12-ef68f357e3e8","block_type":"box","text":"In addition, commencing the business day following the date that the aggregate securities lending","page_number":52,"box":{"x":117,"y":696,"width":723,"height":12}},{"id":"07ea2df1-a7fb-415d-ba4d-4c6eda1486f7","block_type":"box","text":"income earned across the BlackRock Multi-Asset Complex in a calendar year exceeds specified","page_number":52,"box":{"x":117,"y":711,"width":711,"height":12}},{"id":"a1021380-8a8e-4d1e-b158-f3ead58cf185","block_type":"box","text":"thresholds, the Fund, pursuant to the current securities lending agreement, will receive for the","page_number":52,"box":{"x":116,"y":727,"width":695,"height":12}},{"id":"9ed59c23-3e64-43c2-90ac-707189b815b1","block_type":"box","text":"remainder of that calendar year securities lending income as follows: (i) 84% of securities lending","page_number":52,"box":{"x":117,"y":742,"width":720,"height":12}},{"id":"3992a762-0bf1-4e77-989f-558be2a9f612","block_type":"box","text":"income (which excludes collateral investment fees); and (ii) this amount can never be less than 70% of","page_number":52,"box":{"x":117,"y":758,"width":762,"height":12}},{"id":"b832f85c-458e-4bb8-89df-ea4b7a4d68a5","block_type":"box","text":"the sum of securities lending income plus collateral investment fees.","page_number":52,"box":{"x":116,"y":773,"width":505,"height":12}},{"id":"e625df60-d154-4e6f-bd8f-2e00d741aba4","block_type":"box","text":"Because the Fund is newly launched, no services have been provided by BTC as the Fund’s securities","page_number":52,"box":{"x":117,"y":802,"width":761,"height":12}},{"id":"2a300369-3c7f-4674-8c6c-2c26916847b3","block_type":"box","text":"lending agent, and the Fund had no income and fees/compensation related to its securities lending","page_number":52,"box":{"x":117,"y":818,"width":732,"height":12}},{"id":"3d46a4e5-7ce6-4a4b-bd43-999718b0329d","block_type":"box","text":"activities as of the date of this SAI.","page_number":52,"box":{"x":116,"y":833,"width":262,"height":10}},{"id":"f21222f5-1f9d-49bc-b79d-9a8e7e94ef46","block_type":"box","text":"Payments by BFA and its Affiliates.","page_number":52,"box":{"x":117,"y":862,"width":280,"height":12}},{"id":"754014af-bdce-4f11-8075-855958bcda45","block_type":"box","text":"BFA and/or its affiliates (“BFA Entities”) pay certain broker","page_number":52,"box":{"x":398,"y":862,"width":442,"height":12}},{"id":"3e57d0bc-e463-4642-9a0f-255783c60174","block_type":"box","text":"dealers, registered investment advisers, banks and other financial intermediaries (“Intermediaries”) for","page_number":52,"box":{"x":116,"y":877,"width":762,"height":12}},{"id":"fbc25c13-559f-4e8d-92bc-2c0b7ae492bb","block_type":"box","text":"49","page_number":52,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"378f2fe6-7815-44c0-988a-fb273354d142","block_type":"box","text":"NM1026U-6042785-52/259","page_number":52,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"135b45dd-adb3-4742-96c5-e6abdab7a579","block_type":"box","text":"certain activities related to the Fund and other funds or products sponsored and/or advised by BFA","page_number":53,"box":{"x":116,"y":87,"width":739,"height":12}},{"id":"ca0ccf90-adad-4b92-a05b-c212cd2927bd","block_type":"box","text":"Entities (collectively for purposes of this section, the “Products”). BFA Entities make these payments","page_number":53,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"04b4d61a-dd76-4d69-9fce-713c20217c3b","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":53,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"fef3f391-d307-4637-88a8-e7fa09062c1f","block_type":"box","text":"comes directly or indirectly in part from fees paid by the Fund or other Products (including, if","page_number":53,"box":{"x":116,"y":134,"width":688,"height":12}},{"id":"134c1f47-fdbf-455e-9a65-ae64ed93c682","block_type":"box","text":"applicable, any underlying Products held by the Fund), these payments do not increase the price paid","page_number":53,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"7cd97e85-7aa1-482c-85c1-1064d89efac0","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":53,"box":{"x":117,"y":165,"width":729,"height":12}},{"id":"eb776b3a-cfa7-49d7-b8d9-2c4ee5e3e41d","block_type":"box","text":"Entities make payments for Intermediaries’ participation in activities that are designed to make","page_number":53,"box":{"x":117,"y":180,"width":703,"height":12}},{"id":"b30094ce-38ec-430a-ae92-e4cf51ce81d8","block_type":"box","text":"registered representatives, other professionals and individual investors more knowledgeable about","page_number":53,"box":{"x":117,"y":196,"width":736,"height":12}},{"id":"d9aa6d6d-4adc-4420-877c-07b47761001c","block_type":"box","text":"exchange-traded products, including the Fund and other Products, or for other activities, such as","page_number":53,"box":{"x":116,"y":211,"width":722,"height":12}},{"id":"15bed670-237b-4c4a-8d6e-0900d324200b","block_type":"box","text":"participation in marketing activities and presentations, educational training programs, conferences, the","page_number":53,"box":{"x":117,"y":227,"width":763,"height":12}},{"id":"27e33d9a-72b0-494f-803d-32f2358f1ab2","block_type":"box","text":"development of technology platforms and reporting systems (“Education Costs”). BFA Entities also","page_number":53,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"fc3ace96-4a97-4b17-abd9-cc064b290d00","block_type":"box","text":"make payments to Intermediaries for certain printing, publishing and mailing costs or materials relating","page_number":53,"box":{"x":117,"y":258,"width":764,"height":12}},{"id":"3f2eb3cf-abb4-47b3-8127-17392256baf8","block_type":"box","text":"to the Fund or other Products (“Publishing Costs”). In addition, BFA Entities make payments to","page_number":53,"box":{"x":116,"y":273,"width":707,"height":12}},{"id":"21788053-faae-4dc1-a46a-3e20f5e2e08d","block_type":"box","text":"Intermediaries that make shares of the Fund or other Products available to their clients, in some cases","page_number":53,"box":{"x":117,"y":289,"width":764,"height":11}},{"id":"03bc2574-06d0-4ac6-a6e2-ac8f601216c9","block_type":"box","text":"at a waived or reduced commission rate or ticket charge, develop new products that feature iShares,","page_number":53,"box":{"x":116,"y":304,"width":751,"height":12}},{"id":"04bb6734-f25b-479a-8ed0-127796500ead","block_type":"box","text":"create educational content about the Fund or other Products that is featured on an Intermediary’s","page_number":53,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"47a8a2db-140a-4cbe-823a-69427d129eee","block_type":"box","text":"platform, or otherwise promote the Fund or other Products. BFA Entities may also reimburse expenses","page_number":53,"box":{"x":117,"y":335,"width":767,"height":12}},{"id":"fdd591d8-aafa-429a-8080-b5dc5b624fe6","block_type":"box","text":"or make payments from their own assets to Intermediaries or other persons in consideration of","page_number":53,"box":{"x":116,"y":351,"width":706,"height":12}},{"id":"fae954fd-b0d0-4eaf-bc33-4ed6c32402ce","block_type":"box","text":"services or other activities that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":53,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"403f74c7-b02d-4bfe-9a3b-b6ba5eea6258","block_type":"box","text":"facilitate investment in the Fund or other Products. Payments of the type described above are","page_number":53,"box":{"x":116,"y":382,"width":700,"height":12}},{"id":"87ba62df-3a8f-431f-9182-6894603d3da1","block_type":"box","text":"sometimes referred to as revenue-sharing payments.","page_number":53,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"f5f120b4-cd58-4011-9f63-728d86073deb","block_type":"box","text":"Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries","page_number":53,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"e822fc41-6e02-4706-890b-daa12fb26b99","block_type":"box","text":"pay to your salesperson or other investment professional may also be significant for your salesperson","page_number":53,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"6a2ea473-a3c2-4aa2-85dc-1ce33a8600f0","block_type":"box","text":"or other investment professional. Because an Intermediary may make decisions about which","page_number":53,"box":{"x":116,"y":459,"width":692,"height":12}},{"id":"6e96e0cb-075e-47ea-a5b4-43bfa0eda358","block_type":"box","text":"investment options it will recommend or make available to its clients, what services to provide for","page_number":53,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"caca1f85-c7cc-4e17-ae34-725cf7fc3f29","block_type":"box","text":"various products or what marketing content to make available to its clients based on payments it","page_number":53,"box":{"x":116,"y":490,"width":719,"height":12}},{"id":"6495d5fa-ddb3-4893-bd37-b78222fbbe81","block_type":"box","text":"receives or is eligible to receive, such payments may create conflicts of interest between the","page_number":53,"box":{"x":117,"y":506,"width":688,"height":12}},{"id":"d460f06e-ab0b-453a-848c-21aaa24c5a93","block_type":"box","text":"Intermediary and its clients. These financial incentives may cause the Intermediary to recommend the","page_number":53,"box":{"x":117,"y":521,"width":759,"height":12}},{"id":"e99e0a73-a36a-4c58-b9d7-34e0287bd495","block_type":"box","text":"Fund or other Products or otherwise promote the Fund or other Products over other investments. The","page_number":53,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"a13964b4-9311-42ff-bbd2-751d8f5cc5d5","block_type":"box","text":"same conflicts of interest and financial incentives exist with respect to your salesperson or other","page_number":53,"box":{"x":116,"y":552,"width":716,"height":12}},{"id":"c0c735c8-c40b-4ca4-8d79-f01139dd4fae","block_type":"box","text":"investment professional if he or she receives similar payments from his or her Intermediary firm.","page_number":53,"box":{"x":117,"y":568,"width":716,"height":12}},{"id":"8f56cdf6-3888-4d4d-94b3-14cc943fcabd","block_type":"box","text":"In addition to the payments described above, BFA Entities have developed proprietary tools,","page_number":53,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"e331009e-6522-4036-99e0-1c478791150f","block_type":"box","text":"calculators and related interactive or digital content that is made available through the","page_number":53,"box":{"x":116,"y":614,"width":641,"height":12}},{"id":"484e69e8-86d0-4e6c-9e4f-ce01e35bd5d0","block_type":"box","text":"www.blackrock.com website at no additional cost to Intermediaries. BlackRock may configure these","page_number":53,"box":{"x":116,"y":630,"width":744,"height":12}},{"id":"59859148-a8f6-4ef4-b39f-cb9c461b726f","block_type":"box","text":"tools and calculators and localize the content for Intermediaries as part of its customary digital","page_number":53,"box":{"x":116,"y":645,"width":703,"height":12}},{"id":"b2ab9a3e-e231-4929-991e-7a1762b98e34","block_type":"box","text":"marketing support and promotion of the Fund or other Products.","page_number":53,"box":{"x":117,"y":661,"width":473,"height":12}},{"id":"9f097e0a-2e39-493a-be5e-cac160973fce","block_type":"box","text":"As of March 1, 2013, BFA Entities have contractual arrangements to make payments (in addition to","page_number":53,"box":{"x":116,"y":692,"width":737,"height":12}},{"id":"620040d6-34fc-4806-9226-9967d1e6cca3","block_type":"box","text":"payments for Education Costs or Publishing Costs) to one Intermediary, Fidelity Brokerage Services","page_number":53,"box":{"x":117,"y":707,"width":742,"height":12}},{"id":"0b048292-4b25-4314-b0a8-0ad0caf5f1ed","block_type":"box","text":"LLC (“FBS”). Effective June 4, 2016, this relationship was expanded to include National Financial","page_number":53,"box":{"x":117,"y":723,"width":719,"height":12}},{"id":"99701f50-0391-4bd4-8f73-880b21db873b","block_type":"box","text":"Services, LLC (“NFS”), an affiliate of FBS. Pursuant to this special, long-term and significant","page_number":53,"box":{"x":116,"y":738,"width":684,"height":12}},{"id":"8c30515b-1f49-4446-a807-0f5aa710bbfb","block_type":"box","text":"arrangement (the “Marketing Program”), FBS, NFS and certain of their affiliates (collectively “Fidelity”)","page_number":53,"box":{"x":116,"y":754,"width":755,"height":12}},{"id":"a4d5a751-3d36-4f65-8983-0d5b4b7fbdae","block_type":"box","text":"have agreed, among other things, to actively promote certain funds and Products to customers,","page_number":53,"box":{"x":117,"y":769,"width":706,"height":12}},{"id":"5cbfa61a-e19c-4917-b011-62229e239b3f","block_type":"box","text":"investment professionals and other intermediaries and in advertising campaigns as the preferred","page_number":53,"box":{"x":117,"y":785,"width":715,"height":12}},{"id":"758588f1-e1dd-44c1-806e-2d6758dc5c67","block_type":"box","text":"exchange-traded product, to offer certain funds and Products in certain Fidelity platforms and","page_number":53,"box":{"x":116,"y":800,"width":690,"height":12}},{"id":"48228714-8f45-4590-9cbd-a4e1aad14cc3","block_type":"box","text":"investment programs, in some cases at a waived or reduced commission rate or ticket charge, and to","page_number":53,"box":{"x":117,"y":816,"width":751,"height":12}},{"id":"490c134c-a098-49c1-a1c3-0f9a008e98b5","block_type":"box","text":"provide marketing data to BFA Entities. BFA Entities have agreed to facilitate the Marketing Program","page_number":53,"box":{"x":117,"y":831,"width":752,"height":12}},{"id":"5d064ae4-32f6-4520-af48-dc988738b103","block_type":"box","text":"by, among other things, making certain payments to FBS and NFS for marketing and implementing","page_number":53,"box":{"x":117,"y":847,"width":739,"height":12}},{"id":"f8b1ba63-f035-4300-825f-9fa00d79d1df","block_type":"box","text":"certain brokerage and investment programs. Upon termination of the arrangement, the BFA Entities","page_number":53,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"9d6fb21c-afe1-433e-8e1b-47250238c357","block_type":"box","text":"50","page_number":53,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"f31ab2b7-a2bd-49cc-9ac3-40ad8eb2d5ad","block_type":"box","text":"NM1026U-6042785-53/259","page_number":53,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"abd2fe38-9105-4252-bb0f-163f1b6df966","block_type":"box","text":"will make additional payments to FBS and/or NFS based upon a number of criteria, including the","page_number":54,"box":{"x":116,"y":87,"width":721,"height":12}},{"id":"6dea1cea-a863-4f78-b369-9aec773ae630","block_type":"box","text":"overall success of the Marketing Program and the level of services provided by FBS and NFS during","page_number":54,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"a85b43b7-ce7e-423a-951c-49aaffc4eff5","block_type":"box","text":"the wind-down period.","page_number":54,"box":{"x":116,"y":118,"width":169,"height":12}},{"id":"0a1c9992-1abc-4968-9a55-46c8cecf7c30","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and","page_number":54,"box":{"x":117,"y":149,"width":735,"height":12}},{"id":"dcdc5586-66ca-4492-a6e1-2957bbae90e2","block_type":"box","text":"certain other third parties that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":54,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"c480a355-8207-41ee-aa54-54b78564e2e7","block_type":"box","text":"facilitate investment in the Fund or certain Products. Such agreements can include payments by BFA","page_number":54,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"ba9069a4-1de7-46d5-aefc-bb34b4fb6ed7","block_type":"box","text":"Entities to such Intermediaries and third parties for data collection and provision, technology support,","page_number":54,"box":{"x":117,"y":196,"width":752,"height":12}},{"id":"95e9a852-ccd7-4074-9e0b-6d7114497b8d","block_type":"box","text":"platform enhancement, or educational content, co-marketing and cross-promotional efforts. In certain","page_number":54,"box":{"x":117,"y":211,"width":754,"height":12}},{"id":"8d726914-4853-44e8-8d9e-202805e4c734","block_type":"box","text":"cases, such payments to Intermediaries are subject to certain minimum payment levels or tiered","page_number":54,"box":{"x":116,"y":227,"width":718,"height":12}},{"id":"0c19efe9-64d9-4f48-82dc-d691135361cb","block_type":"box","text":"payments. With respect to certain funds and Products, payments by the BFA Entities may take the","page_number":54,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"4e4acbba-e142-4af1-90c4-58fb309cb8a3","block_type":"box","text":"form of, among other things, “due diligence” payments for an Intermediary’s review of such funds and","page_number":54,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"5c3d5ad6-48ca-4d2e-8c30-14b243dfba2f","block_type":"box","text":"Products; payment for providing employee training and information relating to such funds and","page_number":54,"box":{"x":117,"y":273,"width":697,"height":12}},{"id":"1f04d0f0-11a2-4fe8-b6f5-26f35a5316c7","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered","page_number":54,"box":{"x":117,"y":289,"width":719,"height":12}},{"id":"346c2754-a7ed-48d9-b9c8-e5a8e866cc87","block_type":"box","text":"representatives, salespersons or other personnel, fees for maintaining an Intermediary’s investor","page_number":54,"box":{"x":117,"y":304,"width":722,"height":12}},{"id":"869b0161-c805-4cc5-b046-4cbbd63578b5","block_type":"box","text":"platform, “shelf space” payments for making such funds and Products available on the Intermediary’s","page_number":54,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"0ae1bee8-6248-4e36-9422-f62b95f1426a","block_type":"box","text":"platform or fees for providing assistance in promoting the sale of such funds and Products. In such","page_number":54,"box":{"x":117,"y":335,"width":735,"height":12}},{"id":"6b88585e-8e9f-441b-bba6-78a78fd255c3","block_type":"box","text":"cases, the payments to Intermediaries may be tiered or based on a percentage of the value of the","page_number":54,"box":{"x":116,"y":351,"width":731,"height":12}},{"id":"f3c5d99a-58f9-4a4c-afe3-a87062f973ac","block_type":"box","text":"funds and Products held by customers of the applicable Intermediary and may also be subject to","page_number":54,"box":{"x":116,"y":366,"width":721,"height":12}},{"id":"f29286fb-2f0c-47ed-9045-e6c4c050d2b6","block_type":"box","text":"minimum payment levels. Payments made pursuant to such arrangements may vary in any year and","page_number":54,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"4a8c732d-54e4-4349-85b8-ca5486e988e6","block_type":"box","text":"may be different for different Intermediaries and third parties and may reflect different services","page_number":54,"box":{"x":117,"y":397,"width":703,"height":12}},{"id":"01e34d97-acf8-46bb-8e29-95f1481c4486","block_type":"box","text":"provided. As of the date of this SAI, the Intermediaries and other third parties (or their respective","page_number":54,"box":{"x":117,"y":413,"width":720,"height":12}},{"id":"d1b98b8e-567c-4102-90d5-3ba76c9751c5","block_type":"box","text":"affiliates) receiving one or more types of the contractual payments described above include (in addition","page_number":54,"box":{"x":116,"y":428,"width":769,"height":12}},{"id":"0405d674-bf49-4dc7-92a9-950402902d19","block_type":"box","text":"to FBS and NFS): &Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American","page_number":54,"box":{"x":116,"y":444,"width":724,"height":12}},{"id":"fe5f2737-43e5-4177-80c8-1de3d858f354","block_type":"box","text":"Enterprise Investment Services, Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets,","page_number":54,"box":{"x":117,"y":459,"width":761,"height":12}},{"id":"8955bed6-a482-4be6-aab3-c036b5c1fc79","block_type":"box","text":"LLC, BNY Mellon Performance & Risk Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab &","page_number":54,"box":{"x":117,"y":475,"width":767,"height":12}},{"id":"95162895-b560-495d-9805-199cf38c79ca","block_type":"box","text":"Co., Inc., Clearstream Fund Centre AG, Commonwealth Equity Services, LLC, Dorsey Wright and","page_number":54,"box":{"x":117,"y":490,"width":730,"height":12}},{"id":"84e81202-75a3-4af3-811f-242b889474b3","block_type":"box","text":"Associates, LLC, Dynasty Financial Partners LLC, E*Trade Securities LLC, Envestnet Asset","page_number":54,"box":{"x":116,"y":506,"width":688,"height":12}},{"id":"af3126f9-2252-4ca2-93c8-3aa35390ac68","block_type":"box","text":"Management, Inc., iCapital Markets LLC, Interactive Brokers LLC, LPL Financial LLC, Merrill Lynch,","page_number":54,"box":{"x":117,"y":521,"width":745,"height":12}},{"id":"7f99657a-3d08-40a4-a511-0d614bf84c64","block_type":"box","text":"Pierce, Fenner & Smith Incorporated, MML Investors Services, LLC, Morgan Stanley Smith Barney","page_number":54,"box":{"x":117,"y":537,"width":739,"height":12}},{"id":"77a63bbe-3a16-436e-b082-3cbac102153c","block_type":"box","text":"LLC, Northwestern Mutual Investment Services, LLC, Orion Portfolio Solutions, LLC, Pershing LLC,","page_number":54,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"cedf1759-9991-4874-994c-19daca38c388","block_type":"box","text":"Raymond James Financial Services, Inc., Riskalyze, Inc., Rockefeller Financial LLC, Sanctuary Wealth","page_number":54,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"9982efee-b46d-4f31-96d1-cef72b843d16","block_type":"box","text":"Group, LLC, UBS Financial Services Inc., Wells Fargo Clearing Services, LLC and Wells Fargo","page_number":54,"box":{"x":117,"y":583,"width":710,"height":12}},{"id":"10151ab7-1c3d-4f4c-be4e-7bf6a4f22bbd","block_type":"box","text":"Advisors Financial Network, LLC. Any additions, modifications, or deletions to Intermediaries and other","page_number":54,"box":{"x":116,"y":599,"width":768,"height":12}},{"id":"f31c2d52-05e6-4dd7-8243-428d3b28de84","block_type":"box","text":"third parties listed above that have occurred since the date of this SAI are not included in the list.","page_number":54,"box":{"x":116,"y":614,"width":722,"height":12}},{"id":"e4793389-8615-4672-b57f-4c87089550cc","block_type":"box","text":"Further, BFA Entities make Education Costs and Publishing Costs payments to other Intermediaries","page_number":54,"box":{"x":117,"y":645,"width":746,"height":12}},{"id":"42e9bfe8-e16b-4e28-9587-d0203deba2e7","block_type":"box","text":"that are not listed in the immediately preceding paragraph. BFA Entities may determine to make such","page_number":54,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"af2aaf9f-d00d-46d7-9239-8f03eb4804d4","block_type":"box","text":"payments based on any number of metrics. For example, BFA Entities may make payments at","page_number":54,"box":{"x":117,"y":676,"width":700,"height":12}},{"id":"69b7645a-96d0-4664-89e5-504a0ecf9137","block_type":"box","text":"year-end or other intervals in a fixed amount, an amount based upon an Intermediary’s services at","page_number":54,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"09ed49a4-f655-4060-a3ec-d1eaae85bf88","block_type":"box","text":"defined levels or an amount based on the Intermediary’s net sales of one or more Products, including","page_number":54,"box":{"x":116,"y":707,"width":751,"height":12}},{"id":"37a3daeb-2aa4-4917-99f5-3aade972cdde","block_type":"box","text":"the Fund, in a year or other period, any of which arrangements may include an agreed-upon minimum","page_number":54,"box":{"x":116,"y":723,"width":756,"height":12}},{"id":"604dd4df-a5fa-43e9-a12f-e7007efe09ee","block_type":"box","text":"or maximum payment, or any combination of the foregoing.","page_number":54,"box":{"x":116,"y":738,"width":438,"height":12}},{"id":"a65be528-5d50-403e-97e1-afda5c49be1f","block_type":"box","text":"Please contact your salesperson or","page_number":54,"box":{"x":562,"y":738,"width":282,"height":12}},{"id":"1ea2a362-0b3f-4553-8c66-d6bd6fa6bd05","block_type":"box","text":"other investment professional for more information regarding any such payments or financial","page_number":54,"box":{"x":116,"y":754,"width":747,"height":12}},{"id":"17850cdf-2e71-4c2f-bf93-c2df948170f7","block_type":"box","text":"incentives his or her Intermediary firm may receive. Any payments made, or financial incentives","page_number":54,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"4f321ce3-75b2-46e3-a19e-58f760759789","block_type":"box","text":"offered, by the BFA Entities to an Intermediary may create the incentive for the Intermediary to","page_number":54,"box":{"x":116,"y":785,"width":755,"height":12}},{"id":"64016089-05fc-4c6f-bb9a-14ca510f3cef","block_type":"box","text":"encourage customers to buy shares of the Fund or other Products.","page_number":54,"box":{"x":116,"y":800,"width":535,"height":12}},{"id":"a09ada45-c9ad-493f-87b6-664f0abd0cad","block_type":"box","text":"The Fund may participate in certain market maker incentive programs of a national securities","page_number":54,"box":{"x":116,"y":831,"width":695,"height":12}},{"id":"1cc0f7c0-864c-449f-b4e7-5ee59ebe18f8","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":54,"box":{"x":116,"y":847,"width":739,"height":12}},{"id":"9ec55e75-165e-4656-8c19-bb8247e26f4f","block_type":"box","text":"incentivizing one or more market makers in the securities of the Fund to enhance the liquidity and","page_number":54,"box":{"x":117,"y":862,"width":728,"height":12}},{"id":"5e8b3d13-3fe5-4bd6-8c89-53187f87cd65","block_type":"box","text":"quality of the secondary market of securities of the Fund. The fee would then be credited by the","page_number":54,"box":{"x":116,"y":878,"width":714,"height":12}},{"id":"98e6117b-faee-4f8e-b808-38f02b5a3e03","block_type":"box","text":"51","page_number":54,"box":{"x":491,"y":909,"width":14,"height":9}},{"id":"bede205c-ed6c-404f-861b-ba2a1634b3bf","block_type":"box","text":"NM1026U-6042785-54/259","page_number":54,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"24a8ec13-90ca-42dd-84fe-dec90d764c8b","block_type":"box","text":"exchange to one or more market makers that meet or exceed liquidity and market quality standards","page_number":55,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"f1832173-0b88-4051-b75b-4acaa3e87304","block_type":"box","text":"with respect to the securities of the Fund. Each market maker incentive program is subject to approval","page_number":55,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"303e1789-4eb2-4290-b763-0af6a2aa9148","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":55,"box":{"x":116,"y":118,"width":748,"height":12}},{"id":"e933cdc6-25c9-4b5e-b84f-0d09d3d62684","block_type":"box","text":"solely for the benefit of the Fund and will not","page_number":55,"box":{"x":116,"y":134,"width":334,"height":12}},{"id":"42ff81c4-6542-49a7-873d-9aa54e9b01d2","block_type":"box","text":"be paid from any Fund assets. Other funds managed by","page_number":55,"box":{"x":451,"y":134,"width":420,"height":12}},{"id":"f77ffa2d-01b1-434c-981d-1233f611db8e","block_type":"box","text":"BFA may also participate in such programs.","page_number":55,"box":{"x":117,"y":149,"width":329,"height":12}},{"id":"4d2bb850-aa53-4cc6-bb82-226f4d72c1b1","block_type":"box","text":"Determination of Net Asset Value","page_number":55,"box":{"x":119,"y":202,"width":605,"height":23}},{"id":"9ed538f0-004f-4e0a-97ec-126f9f96bcdf","block_type":"box","text":"Valuation of Shares.","page_number":55,"box":{"x":116,"y":255,"width":166,"height":9}},{"id":"72ee7744-c17e-4bf2-a626-47e8fe8d77e2","block_type":"box","text":"The NAV for the Fund is generally calculated as of the close of regular trading","page_number":55,"box":{"x":283,"y":255,"width":583,"height":12}},{"id":"dfa793c0-ceee-4734-905a-ab1871bc61ce","block_type":"box","text":"hours on the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) on each business","page_number":55,"box":{"x":117,"y":270,"width":769,"height":12}},{"id":"b4a9bf5d-025c-4f8c-9494-f89f1bad034d","block_type":"box","text":"day the NYSE is open. Valuation of assets held by the Fund is as follows:","page_number":55,"box":{"x":116,"y":286,"width":551,"height":12}},{"id":"a8f74034-cba9-4480-a7a6-c0340fc69919","block_type":"box","text":"Equity Investments.","page_number":55,"box":{"x":117,"y":318,"width":162,"height":11}},{"id":"3b5f7dbe-bb0e-49b5-96c4-2ba45a2f55a9","block_type":"box","text":"Equity securities traded on a recognized securities exchange (e.g., NYSE), on","page_number":55,"box":{"x":281,"y":317,"width":583,"height":12}},{"id":"992be24a-2a94-4c21-9a7c-b11368640152","block_type":"box","text":"separate trading boards of a securities exchange or through a market system that provides","page_number":55,"box":{"x":116,"y":333,"width":679,"height":12}},{"id":"5d41c959-5d44-4a39-a252-52aa7dcff117","block_type":"box","text":"contemporaneous transaction pricing information (each, an “Exchange”) are valued using information","page_number":55,"box":{"x":116,"y":348,"width":756,"height":12}},{"id":"7e5f89ec-7605-43da-8ef6-b7cae1c007e4","block_type":"box","text":"obtained via independent pricing services, generally at the Exchange closing price or if an Exchange","page_number":55,"box":{"x":116,"y":364,"width":751,"height":12}},{"id":"5c485ea9-767e-498d-8f33-bc6188e16fc4","block_type":"box","text":"closing price is not available, the last traded price on that Exchange prior to the time as of which the","page_number":55,"box":{"x":116,"y":379,"width":745,"height":12}},{"id":"c739f5bb-f7e2-4116-b05b-03d0d8e0a455","block_type":"box","text":"assets or liabilities are valued. However, under certain circumstances, other means of determining","page_number":55,"box":{"x":116,"y":395,"width":734,"height":12}},{"id":"b97ea46b-1d8f-4f18-ac32-7d6328db60bd","block_type":"box","text":"current market value may be used. If an equity security is traded on","page_number":55,"box":{"x":116,"y":410,"width":506,"height":12}},{"id":"b7ef1ccd-07d7-4b50-917f-006093869180","block_type":"box","text":"more than one Exchange, the current market value of the security where it is primarily traded generally","page_number":55,"box":{"x":117,"y":442,"width":766,"height":12}},{"id":"36a91e42-b4a5-4447-804c-28014192aaf6","block_type":"box","text":"will be used. In the event that there are no sales involving an equity security held by the Fund on a day","page_number":55,"box":{"x":116,"y":458,"width":767,"height":12}},{"id":"9084e51c-1739-449a-9fd8-4f5107ef6846","block_type":"box","text":"on which the Fund values such security, the prior day’s price will be used, unless BFA determines that","page_number":55,"box":{"x":116,"y":473,"width":763,"height":12}},{"id":"b4b572db-a694-4bad-a0f2-9e2b7e5e6c72","block_type":"box","text":"such prior day’s price no longer reflects the fair value of the security, in which case such asset would","page_number":55,"box":{"x":116,"y":489,"width":752,"height":12}},{"id":"54df37e4-834a-4516-b89d-1ab520fbb897","block_type":"box","text":"be treated as a Fair Value Asset (as defined below).","page_number":55,"box":{"x":117,"y":504,"width":391,"height":12}},{"id":"48e273bd-2dfb-4c48-b62b-2046b8709457","block_type":"box","text":"Fixed-Income Investments.","page_number":55,"box":{"x":117,"y":536,"width":214,"height":9}},{"id":"87a43586-5f53-487e-a2ef-c0791da7574d","block_type":"box","text":"Fixed-income securities are generally valued using prices provided by","page_number":55,"box":{"x":332,"y":536,"width":528,"height":12}},{"id":"0578514d-ac3c-4c26-a0a2-dcfc52cc8459","block_type":"box","text":"dealers or prices (including evaluated prices) supplied by the Fund’s approved independent third-party","page_number":55,"box":{"x":116,"y":551,"width":764,"height":12}},{"id":"7481ea02-9668-44a5-9b48-0b10d165ccda","block_type":"box","text":"pricing services, each in accordance with the Valuation Procedures. The pricing services may use","page_number":55,"box":{"x":117,"y":567,"width":730,"height":12}},{"id":"1dcc2b06-ac96-4e0e-ab2c-bddbea46fa49","block_type":"box","text":"valuation models that utilize certain inputs and assumptions to derive values, including transaction data","page_number":55,"box":{"x":116,"y":582,"width":770,"height":12}},{"id":"51163632-5699-47d0-aa46-0c2a91476ae0","block_type":"box","text":"(e.g., recent representative bids and offers), credit quality information, perceived market movements,","page_number":55,"box":{"x":117,"y":598,"width":752,"height":12}},{"id":"5d67a891-307b-4ff7-8407-3c319338d659","block_type":"box","text":"news, and other relevant information and by other methods, which may include consideration of: yields","page_number":55,"box":{"x":117,"y":613,"width":766,"height":12}},{"id":"dc7ccbd5-0395-4202-a79e-fe4bb03d35a9","block_type":"box","text":"or prices of securities of comparable quality, coupon, maturity and type; indications as to values from","page_number":55,"box":{"x":116,"y":629,"width":753,"height":12}},{"id":"6e60abe1-ac06-4a04-b17a-360c70d7ecef","block_type":"box","text":"dealers; general market conditions; and/or other factors and assumptions. Pricing services generally","page_number":55,"box":{"x":116,"y":644,"width":749,"height":12}},{"id":"941e441c-e2ea-4e3c-9f7b-0e6214f325a1","block_type":"box","text":"value fixed-income securities assuming orderly transactions of an institutional round lot size, but the","page_number":55,"box":{"x":116,"y":660,"width":740,"height":12}},{"id":"a290e45b-083e-4086-a627-c31768ee7109","block_type":"box","text":"Fund may hold or transact in such securities in smaller, odd lot sizes. Odd lots of securities in certain","page_number":55,"box":{"x":117,"y":675,"width":746,"height":12}},{"id":"223d879d-f016-4966-b62a-50d9d659e136","block_type":"box","text":"asset classes may trade at lower prices than institutional round lots, and the value ultimately realized","page_number":55,"box":{"x":116,"y":691,"width":747,"height":12}},{"id":"7460f05f-06e0-40ef-9782-e78fb60d6e39","block_type":"box","text":"when the securities are sold could differ from the prices used by the Fund. The amortized cost method","page_number":55,"box":{"x":116,"y":706,"width":758,"height":12}},{"id":"42a22884-cede-4939-89fa-001aba374008","block_type":"box","text":"of valuation may be used with respect to debt obligations with 60 days or less remaining to maturity","page_number":55,"box":{"x":116,"y":722,"width":737,"height":12}},{"id":"396e6ee2-e17f-457b-a4ca-a6faebe537c4","block_type":"box","text":"unless such method does not represent fair value. Certain fixed-income investments, including asset","page_number":55,"box":{"x":117,"y":737,"width":750,"height":12}},{"id":"531b6c43-96eb-40aa-be2f-879b6f939853","block_type":"box","text":"backed and mortgage related securities, may be valued based on valuation models that consider the","page_number":55,"box":{"x":117,"y":753,"width":746,"height":12}},{"id":"c4c1a914-ed51-4cc1-9c7a-2d2333b7e858","block_type":"box","text":"estimated cash flows of each tranche of the issuer, establish a benchmark yield and develop an","page_number":55,"box":{"x":116,"y":768,"width":709,"height":12}},{"id":"ce3c1778-f020-42be-bbdf-6f2cc9d7fabb","block_type":"box","text":"estimated tranche specific spread to the benchmark yield based on the unique attributes of the","page_number":55,"box":{"x":116,"y":784,"width":702,"height":12}},{"id":"a8bcb70f-5a85-4707-b8e0-ff4e6b9b4e0b","block_type":"box","text":"tranche.","page_number":55,"box":{"x":116,"y":799,"width":59,"height":10}},{"id":"b28ef3d6-1719-4417-a965-7356fd590635","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":55,"box":{"x":116,"y":831,"width":379,"height":12}},{"id":"2f73bc92-2a11-4c57-86a6-c3583c8be950","block_type":"box","text":"Exchange-traded equity options (except ETF","page_number":55,"box":{"x":497,"y":831,"width":342,"height":12}},{"id":"30c00666-bcf6-4127-879d-9a9c3504d080","block_type":"box","text":"options, equity index options or those that are customized) for which market quotations are readily","page_number":55,"box":{"x":116,"y":846,"width":733,"height":13}},{"id":"ffe7a682-7fc6-4240-a0dc-757bae0ae517","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":55,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"593fdc1b-5e78-4a10-8a4e-9c2c3842efdb","block_type":"box","text":"of trade on which such options are traded. In the event that there is no mean price available for an","page_number":55,"box":{"x":116,"y":877,"width":734,"height":12}},{"id":"00cbe1b0-9bf5-49ec-809a-7255a3a3d68e","block_type":"box","text":"52","page_number":55,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"909d6b83-8997-4f63-8cef-ebbed9fb832a","block_type":"box","text":"NM1026U-6042785-55/259","page_number":55,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c59c8501-9cf1-4742-b8ca-b72c6ee2be83","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":56,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"33905fd8-8229-4f3d-8383-8fd7f6a543cf","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":56,"box":{"x":117,"y":102,"width":732,"height":13}},{"id":"5bea84c4-9de4-4bdb-9979-8070c91c9911","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":56,"box":{"x":116,"y":118,"width":770,"height":12}},{"id":"d4837f31-a896-430b-bedd-e0ddf5233f74","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":56,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"760a8dcd-9e12-46ff-942d-fe7d28ed317b","block_type":"box","text":"the option, in which case such option will be treated as a Fair Value Asset. Customized exchange","page_number":56,"box":{"x":116,"y":149,"width":729,"height":12}},{"id":"ef18b1b7-b84e-44bf-a5cf-5eef820125d4","block_type":"box","text":"traded equity options, ETF options, equity index options and OTC derivatives, may be valued using a","page_number":56,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"d13b9bcf-918f-4603-bb60-97c4c7bf11aa","block_type":"box","text":"mathematical model which may incorporate a number of market data factors. Financial futures","page_number":56,"box":{"x":117,"y":180,"width":703,"height":12}},{"id":"e4d8a3e9-c209-44a4-a7bb-8f5398814461","block_type":"box","text":"contracts and options thereon, which are traded on exchanges, are valued at their last sale price or","page_number":56,"box":{"x":116,"y":196,"width":741,"height":12}},{"id":"640a3255-0664-4349-b40b-bd8e35bfa720","block_type":"box","text":"settle price as of the close of such exchanges. Swap agreements and other derivatives are generally","page_number":56,"box":{"x":116,"y":211,"width":752,"height":12}},{"id":"b4dd087c-ffe4-4986-a9f6-3824b7762231","block_type":"box","text":"valued daily based upon quotations from market makers or by a pricing service in accordance with the","page_number":56,"box":{"x":116,"y":227,"width":763,"height":12}},{"id":"f2311144-41ad-4f87-9096-7635ae126d20","block_type":"box","text":"Valuation Procedures.","page_number":56,"box":{"x":116,"y":242,"width":170,"height":10}},{"id":"a867eadb-9bbc-43c2-8f49-7054c9c52d43","block_type":"box","text":"Underlying Funds.","page_number":56,"box":{"x":117,"y":273,"width":145,"height":12}},{"id":"e097ec74-4d40-4e54-85cc-4d7e152ee2ef","block_type":"box","text":"Shares of underlying open-end funds that are not traded on an exchange","page_number":56,"box":{"x":263,"y":273,"width":553,"height":12}},{"id":"e7560c4f-07c8-4039-96ea-8aa46650dc72","block_type":"box","text":"(including money market funds) are valued at NAV. Shares of underlying exchange-traded closed-end","page_number":56,"box":{"x":117,"y":289,"width":761,"height":12}},{"id":"4f134eda-f0f4-46d5-951a-bce26553d301","block_type":"box","text":"funds or other ETFs will be valued at their most recent closing price.","page_number":56,"box":{"x":116,"y":304,"width":511,"height":12}},{"id":"01241f4b-2715-4887-8792-bc31408b8567","block_type":"box","text":"General Valuation Information.","page_number":56,"box":{"x":116,"y":335,"width":244,"height":10}},{"id":"d5997e8b-5e2a-47c0-89b5-7974b36fe039","block_type":"box","text":"Prices obtained from independent third-party pricing services, broker","page_number":56,"box":{"x":361,"y":335,"width":520,"height":12}},{"id":"285a3d95-eb71-4995-a360-ba9ed6592e4c","block_type":"box","text":"dealers or market makers to value the Fund’s securities and other assets and liabilities are based on","page_number":56,"box":{"x":116,"y":351,"width":751,"height":9}},{"id":"01cebbee-ac42-4ae5-a370-7370d0108a81","block_type":"box","text":"information available at the time the Fund values its assets and liabilities. In the event that a pricing","page_number":56,"box":{"x":117,"y":366,"width":740,"height":12}},{"id":"dd28b0b8-19e0-410b-948d-c2b4397d4ca1","block_type":"box","text":"service quotation is revised or updated subsequent to the day on which the Fund valued such security,","page_number":56,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"e50fca43-98e5-41ad-8f45-ce3a26b7aa13","block_type":"box","text":"the revised pricing service quotation generally will be applied prospectively. Such determination will be","page_number":56,"box":{"x":116,"y":397,"width":764,"height":12}},{"id":"f35ed696-81fa-4f99-9a65-13ba94c659c2","block_type":"box","text":"made considering pertinent facts and circumstances surrounding the revision.","page_number":56,"box":{"x":117,"y":413,"width":581,"height":12}},{"id":"098dcbf1-630e-47ee-9d15-7337fcc6bc90","block_type":"box","text":"The price the Fund could receive upon the sale of any particular portfolio investment may differ from","page_number":56,"box":{"x":116,"y":444,"width":747,"height":12}},{"id":"5e0dd6a4-6e99-4278-bae9-54e99a3ef08c","block_type":"box","text":"the Fund’s valuation of the investment, particularly for assets that trade in thin or volatile markets or","page_number":56,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"4669638b-1f5a-4cf9-b956-832b6387424c","block_type":"box","text":"that are valued using a fair valuation methodology or a price provided by an independent pricing","page_number":56,"box":{"x":116,"y":475,"width":717,"height":12}},{"id":"265abb7e-e0f7-46f4-9d65-e03f61dda46e","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":56,"box":{"x":116,"y":490,"width":728,"height":12}},{"id":"a86d64ad-1597-4937-b149-e1704016ce11","block_type":"box","text":"ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected","page_number":56,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"3b637047-a86d-439e-9c62-608036d38d0a","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":56,"box":{"x":116,"y":521,"width":756,"height":12}},{"id":"282a9390-3f32-4d24-8ded-efd8f5f7bdf0","block_type":"box","text":"by technological issues and/or errors by pricing services or other third-party service providers.","page_number":56,"box":{"x":117,"y":537,"width":700,"height":12}},{"id":"6607375a-ba32-436e-a07f-89810b49fc53","block_type":"box","text":"In the event that application of the methods of valuation discussed above result in a price for a security","page_number":56,"box":{"x":117,"y":568,"width":766,"height":12}},{"id":"85026a80-f748-4b6c-99f7-cb5dd4cd3243","block_type":"box","text":"which is deemed not to be representative of the fair market value of such security, the security will be","page_number":56,"box":{"x":116,"y":583,"width":756,"height":12}},{"id":"9e5b6c26-1738-40cb-9d8a-f5cc340b5a40","block_type":"box","text":"valued by, under the direction of or in accordance with a method approved by BFA, the Fund’s","page_number":56,"box":{"x":116,"y":599,"width":705,"height":12}},{"id":"45c9f2e6-a707-4a54-800b-7e241c3a443b","block_type":"box","text":"valuation designee, as reflecting fair value. All other assets and liabilities (including securities for which","page_number":56,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"06acb1c4-4fec-452d-a521-ac90f3106e6b","block_type":"box","text":"market quotations are not readily available) held by the Fund (including restricted securities and private","page_number":56,"box":{"x":117,"y":630,"width":770,"height":12}},{"id":"f4780444-a746-4fd4-9d0b-61de88e6ceaa","block_type":"box","text":"market investments, as applicable) are valued at fair value as determined in good faith by BFA","page_number":56,"box":{"x":117,"y":645,"width":705,"height":12}},{"id":"ee3c9eee-8120-4d39-b0b0-42d8a472d44c","block_type":"box","text":"pursuant to the Valuation Procedures. Any assets and liabilities which are denominated in a foreign","page_number":56,"box":{"x":117,"y":661,"width":735,"height":12}},{"id":"b90f61c6-db1c-4ffe-a4d7-6f528d193b01","block_type":"box","text":"currency are translated into U.S. dollars at the prevailing market rates.","page_number":56,"box":{"x":116,"y":676,"width":520,"height":12}},{"id":"923d48dd-bd14-4145-860c-93825fd1ff5c","block_type":"box","text":"Fair Value.","page_number":56,"box":{"x":117,"y":707,"width":83,"height":10}},{"id":"1e35d783-1a21-4775-9bca-183f05a065d0","block_type":"box","text":"When market quotations are not readily available or are believed by BFA to be unreliable,","page_number":56,"box":{"x":206,"y":707,"width":663,"height":12}},{"id":"e640d521-2c97-4f93-aa63-07d7e3387660","block_type":"box","text":"the Fund’s investments are valued at fair value (“Fair Value Assets”). Fair Value Assets are valued by","page_number":56,"box":{"x":116,"y":723,"width":754,"height":12}},{"id":"2ea79b1d-e0bb-4044-ad07-f22cd308f4dc","block_type":"box","text":"BFA in accordance","page_number":56,"box":{"x":117,"y":738,"width":140,"height":10}},{"id":"65f1b608-b60c-497b-bc20-46fd23f9d87a","block_type":"box","text":"with the Valuation Procedures. Pursuant to Rule 2a-5 under the Investment Company Act, the Board","page_number":56,"box":{"x":116,"y":769,"width":746,"height":12}},{"id":"729a5749-34d5-4bb1-9d63-eeaeeeb75ba5","block_type":"box","text":"has designated BFA as the valuation designee for the Fund. BFA may reasonably conclude that a","page_number":56,"box":{"x":117,"y":785,"width":725,"height":12}},{"id":"0283599c-43ec-452e-9409-17d3cad70f90","block_type":"box","text":"market quotation is not readily available or is unreliable if, among other things, a security or other asset","page_number":56,"box":{"x":117,"y":800,"width":764,"height":12}},{"id":"9f2135ce-c796-4455-ab5c-a78e9c3ed24d","block_type":"box","text":"or liability does not have a price source due to its complete lack of trading, if BFA believes a market","page_number":56,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"9aeaa602-8678-44dd-a45f-0e6b870f99aa","block_type":"box","text":"quotation from a broker-dealer or other source is unreliable (e.g., where it varies significantly from a","page_number":56,"box":{"x":116,"y":831,"width":744,"height":12}},{"id":"f5b4b294-f3ac-436e-a0cc-f460897bdc78","block_type":"box","text":"recent trade, or no longer reflects the fair value of the security or other asset or liability subsequent to","page_number":56,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"2d0d243f-e44a-4b4d-b1e8-819937de95c6","block_type":"box","text":"the most recent market quotation), or where the security or other asset or liability is only thinly traded","page_number":56,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"bfede0e6-3c0c-4745-9a06-0aabc1b680ad","block_type":"box","text":"or due to the occurrence of a significant event subsequent to the most recent market quotation. For","page_number":56,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"99fa09cb-fc90-4943-93ec-22bb3e9780f5","block_type":"box","text":"53","page_number":56,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"27f53d9d-1271-418f-a250-094e32f22014","block_type":"box","text":"NM1026U-6042785-56/259","page_number":56,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"bb9d9e28-8909-47d4-87bb-17f9da7e325c","block_type":"box","text":"this purpose, a “significant event” is deemed to occur if BFA determines, in its reasonable business","page_number":57,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"1231e7f4-f36c-468b-96d0-a9279bbbe6d9","block_type":"box","text":"judgment, that an event has occurred after the close of trading for an asset or liability but prior to or at","page_number":57,"box":{"x":115,"y":102,"width":760,"height":13}},{"id":"89126e06-85c8-49c4-a932-a4eafe7b98b0","block_type":"box","text":"the time of pricing the Fund’s assets or liabilities, is likely to cause a material change to the last","page_number":57,"box":{"x":116,"y":118,"width":710,"height":12}},{"id":"d2cde9d9-286c-4806-ab5a-8984362a4050","block_type":"box","text":"exchange closing price or closing market price of one or more assets held by, or liabilities of, the Fund.","page_number":57,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"ea94e746-d206-4122-a57d-1c30df0fffd3","block_type":"box","text":"On any day the NYSE is open and a foreign market or the primary exchange on which a foreign asset","page_number":57,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"438adde8-72b3-42b3-9467-71efd933fcc8","block_type":"box","text":"or liability is traded is closed, such asset or liability will be valued using the prior day’s price, provided","page_number":57,"box":{"x":116,"y":165,"width":754,"height":12}},{"id":"95014ddb-9fa1-48f5-b146-c14c4faa462d","block_type":"box","text":"that BFA is not aware of any significant event or other information that would cause such price to no","page_number":57,"box":{"x":116,"y":180,"width":747,"height":12}},{"id":"920f3a67-2c87-4489-819a-b20c2c674e2c","block_type":"box","text":"longer reflect the fair value of the asset or liability, in which case such asset or liability would be treated","page_number":57,"box":{"x":117,"y":196,"width":768,"height":12}},{"id":"77af7614-968a-4f1d-aa43-99b9f9a374fe","block_type":"box","text":"as a Fair Value Asset. For certain foreign assets, a third-party vendor supplies evaluated, systematic","page_number":57,"box":{"x":116,"y":211,"width":752,"height":12}},{"id":"725f8a79-6c48-4d31-991b-64c0f130f0f3","block_type":"box","text":"fair value pricing based upon the movement of a proprietary multi-factor model after the relevant","page_number":57,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"b60e7e63-9c6e-4511-a2c3-66250e88d445","block_type":"box","text":"foreign markets have closed. This systematic fair value pricing methodology is designed to correlate","page_number":57,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"881f9bfd-218b-4953-9f01-12e6aa9f352d","block_type":"box","text":"the prices of foreign assets in one or more non-U.S. markets following the close of the local markets to","page_number":57,"box":{"x":116,"y":258,"width":766,"height":12}},{"id":"ab3e8631-14cf-4aab-b655-1fcb9f55cb6c","block_type":"box","text":"the prices that might have prevailed as of the Fund’s pricing time.","page_number":57,"box":{"x":116,"y":273,"width":490,"height":12}},{"id":"e7628753-6d2c-4542-b1a3-96a16212affd","block_type":"box","text":"BFA’s Rule 2a-5 Committee is responsible for reviewing and approving methodologies by investment","page_number":57,"box":{"x":117,"y":304,"width":753,"height":12}},{"id":"9eda7b81-17b3-45c0-bfe8-f8cd2e643291","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":57,"box":{"x":116,"y":320,"width":763,"height":12}},{"id":"61ca1187-0873-41f0-ac9d-4afac56a6914","block_type":"box","text":"accounting agent assists BFA by periodically endeavoring to confirm the prices it receives from all","page_number":57,"box":{"x":116,"y":335,"width":731,"height":12}},{"id":"1e54a9cf-4195-49f8-85db-458ada9a4230","block_type":"box","text":"third-party pricing services, index providers and broker-dealers. BFA regularly evaluates the values","page_number":57,"box":{"x":116,"y":351,"width":740,"height":12}},{"id":"aaad47f2-aa12-452f-b497-7fff96e7cbfe","block_type":"box","text":"assigned to the securities and other assets and liabilities of the Fund.","page_number":57,"box":{"x":116,"y":366,"width":519,"height":12}},{"id":"2cb1a9c0-9a4e-4a72-9358-b4c5d68e1945","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":57,"box":{"x":116,"y":397,"width":759,"height":12}},{"id":"35688426-2a6b-442c-9a82-1c4009063a12","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":57,"box":{"x":117,"y":413,"width":732,"height":12}},{"id":"c25fb4e0-5b17-42b2-9162-4bd752310469","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":57,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"71949ccf-233d-4850-ad9a-580ee7b1d532","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":57,"box":{"x":116,"y":444,"width":764,"height":12}},{"id":"050e4b95-b898-4c5d-867b-f19de3a0a22c","block_type":"box","text":"it holds the asset or liability to maturity. Fair value determinations will be based upon all available","page_number":57,"box":{"x":117,"y":459,"width":723,"height":12}},{"id":"b1d4df60-8ff3-4aeb-9da8-30b39acd09a9","block_type":"box","text":"factors that BFA deems relevant at the time of the determination, and may be based on analytical","page_number":57,"box":{"x":116,"y":475,"width":728,"height":12}},{"id":"8a94a00c-e79b-41df-b87b-7db10ccd0155","block_type":"box","text":"values determined by BFA using proprietary or third-party valuation models.","page_number":57,"box":{"x":116,"y":490,"width":568,"height":12}},{"id":"0ced6fb6-ca07-4d2a-b27e-c8ba7bd0845c","block_type":"box","text":"Fair value represents a good faith approximation of the value of an asset or liability. When determining","page_number":57,"box":{"x":117,"y":521,"width":764,"height":12}},{"id":"05d260ea-1045-43c0-a693-8d6facad7cf9","block_type":"box","text":"the fair value of an investment, one or more fair value methodologies may be used (depending on","page_number":57,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"fd9c6ac4-86ba-45ff-87f8-3339a440a1d9","block_type":"box","text":"certain factors, including the asset type). For example, the investment may be initially priced based on","page_number":57,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"c5ac866b-c1c8-4d29-9430-2841549fdb26","block_type":"box","text":"the original cost of the investment or, alternatively, using proprietary or third-party models that may rely","page_number":57,"box":{"x":116,"y":568,"width":769,"height":12}},{"id":"ea5e3263-7f35-4740-b33d-6bc690d70057","block_type":"box","text":"upon one or more unobservable inputs. Prices of actual, executed or historical transactions in the","page_number":57,"box":{"x":117,"y":583,"width":726,"height":12}},{"id":"58680dcd-f753-4b40-b13b-03f2f1af4648","block_type":"box","text":"relevant investment (or comparable instruments) or, where appropriate, an appraisal by a third-party","page_number":57,"box":{"x":117,"y":599,"width":747,"height":12}},{"id":"bf9df741-1bc1-4c32-b08c-039204fa8e6d","block_type":"box","text":"experienced in the valuation of similar instruments, may also be used as a basis for establishing the","page_number":57,"box":{"x":116,"y":614,"width":745,"height":12}},{"id":"e132b390-53f9-425e-b302-941e38669d7a","block_type":"box","text":"fair value of an investment.","page_number":57,"box":{"x":116,"y":630,"width":206,"height":9}},{"id":"268da400-0812-404d-bc0d-4df109df7159","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":57,"box":{"x":116,"y":661,"width":733,"height":12}},{"id":"6dd84499-4943-4818-9cad-903881a5d28b","block_type":"box","text":"assets or liabilities could have been sold during the period in which the particular fair values were used","page_number":57,"box":{"x":116,"y":676,"width":761,"height":12}},{"id":"ca986886-83e4-4cad-95d1-7491e484bf6f","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":57,"box":{"x":117,"y":692,"width":738,"height":12}},{"id":"c59d5815-9c5a-4199-b6f1-d99fbe99950c","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":57,"box":{"x":116,"y":707,"width":744,"height":12}},{"id":"ed8ca60d-6311-4530-b5d5-d3671d7fc4a9","block_type":"box","text":"the economic interest of existing shareholders.","page_number":57,"box":{"x":116,"y":723,"width":345,"height":12}},{"id":"e93fe628-9678-4aec-b3ad-434f4f910036","block_type":"box","text":"The Fund’s annual audited financial statements, which are prepared in accordance with accounting","page_number":57,"box":{"x":116,"y":754,"width":735,"height":12}},{"id":"504ac336-03d4-4aac-aec4-c9092e87e512","block_type":"box","text":"principles generally accepted in the United States of America (“US GAAP”), follow the requirements for","page_number":57,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"1a862cde-00c5-4a7f-8d9e-d55e380318aa","block_type":"box","text":"valuation set forth in Financial Accounting Standards Board Accounting Standards Codification","page_number":57,"box":{"x":116,"y":785,"width":702,"height":12}},{"id":"105c07ea-b089-4739-9468-a1accd1a3d76","block_type":"box","text":"Topic 820, “Fair Value Measurements and Disclosures” (“ASC 820”), which defines and establishes a","page_number":57,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"b4527754-39e3-4302-83d7-979c2df32c4a","block_type":"box","text":"framework for measuring fair value under US GAAP and expands financial statement disclosure","page_number":57,"box":{"x":116,"y":816,"width":712,"height":12}},{"id":"a67a85a3-6cf9-499f-8a85-37996bc60f2e","block_type":"box","text":"requirements relating to fair value measurements.","page_number":57,"box":{"x":117,"y":831,"width":374,"height":12}},{"id":"81466b21-ab3f-4257-8aa7-bdc41d79fb41","block_type":"box","text":"Generally, ASC 820 and other accounting rules applicable to funds and various assets in which they","page_number":57,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"0ff440c2-83ff-47be-ae5a-a84a9519685b","block_type":"box","text":"invest are evolving. Such changes may adversely affect the Fund. For example, the evolution of rules","page_number":57,"box":{"x":117,"y":878,"width":757,"height":12}},{"id":"38370f95-de8d-465b-b8da-6c48ae8cb585","block_type":"box","text":"54","page_number":57,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0cb42352-b683-4f9e-bc7f-a8c06406049e","block_type":"box","text":"NM1026U-6042785-57/259","page_number":57,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2a580eba-168c-4879-8684-a05f850dd19d","block_type":"box","text":"governing the determination of the fair market value of assets or liabilities, to the extent such rules","page_number":58,"box":{"x":116,"y":87,"width":733,"height":12}},{"id":"cca9151f-a1cf-45d0-98cc-02c3d08879b9","block_type":"box","text":"become more stringent, would tend to increase the cost and/or reduce the availability of third-party","page_number":58,"box":{"x":117,"y":102,"width":735,"height":13}},{"id":"a4913d88-bd27-4415-a928-b0cbd568428e","block_type":"box","text":"determinations of fair market value. This may in turn increase the costs associated with selling assets","page_number":58,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"f70f3309-e597-4018-b9a1-aff4255adf7c","block_type":"box","text":"or affect their liquidity due to the Fund’s inability to obtain a third-party determination of fair market","page_number":58,"box":{"x":116,"y":134,"width":732,"height":12}},{"id":"44960f99-4d77-449a-ad0e-3503f8905c65","block_type":"box","text":"value.","page_number":58,"box":{"x":116,"y":149,"width":49,"height":10}},{"id":"9fe90c18-8af4-4172-b88d-863c39157ba3","block_type":"box","text":"Brokerage Transactions","page_number":58,"box":{"x":119,"y":202,"width":437,"height":29}},{"id":"66013ba6-03cd-4270-b728-d5892d28d4e6","block_type":"box","text":"Subject to policies established by the Board, BFA is primarily responsible for the execution of the","page_number":58,"box":{"x":116,"y":255,"width":724,"height":12}},{"id":"d28dd3fa-a0a2-42b2-90c9-510aae437296","block_type":"box","text":"Fund’s portfolio transactions and the allocation of brokerage. BFA does not execute transactions","page_number":58,"box":{"x":117,"y":270,"width":720,"height":12}},{"id":"891defde-14dc-4e4c-b27f-9fdb8b3ecb36","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":58,"box":{"x":116,"y":286,"width":770,"height":12}},{"id":"bae20950-64ff-4ef7-9bfa-7b794d004dfc","block_type":"box","text":"account certain factors set out below.","page_number":58,"box":{"x":116,"y":301,"width":282,"height":10}},{"id":"7df5f562-36d9-4f0f-9b57-e506e659a023","block_type":"box","text":"While BFA generally seeks reasonable trade execution costs, the Fund does not necessarily pay the","page_number":58,"box":{"x":116,"y":333,"width":751,"height":12}},{"id":"8285e6de-6079-4f05-aaf6-51fc7a106700","block_type":"box","text":"lowest spread or commission available, and payment of the lowest commission or spread is not","page_number":58,"box":{"x":117,"y":348,"width":712,"height":12}},{"id":"09bbb948-f0ce-4f1a-a707-38f9e847e67c","block_type":"box","text":"necessarily consistent with obtaining the best price and execution in particular transactions. Subject to","page_number":58,"box":{"x":117,"y":364,"width":762,"height":12}},{"id":"99497055-e32b-402a-bec9-9bd7d836e6e4","block_type":"box","text":"applicable legal requirements, BFA may select a broker based partly upon brokerage or research","page_number":58,"box":{"x":116,"y":380,"width":726,"height":11}},{"id":"ec415be4-d456-44e8-b4b5-1367dd87f108","block_type":"box","text":"services provided to BFA and its clients, including the Fund. In return for such services, BFA may","page_number":58,"box":{"x":116,"y":395,"width":727,"height":12}},{"id":"8c39d426-289d-49a1-8348-ae79dbf87af1","block_type":"box","text":"cause the Fund to pay a higher commission than other brokers would charge if BFA determines in","page_number":58,"box":{"x":116,"y":410,"width":732,"height":12}},{"id":"41549aaf-4df5-436d-90e2-e95f464b1b0d","block_type":"box","text":"good faith that the commission is reasonable in relation to the services provided.","page_number":58,"box":{"x":116,"y":426,"width":602,"height":12}},{"id":"7dd04dec-fd1b-45da-9d3f-639cff838ead","block_type":"box","text":"In selecting brokers or dealers to execute portfolio transactions, BFA and the Sub-Advisers seek to","page_number":58,"box":{"x":117,"y":458,"width":738,"height":12}},{"id":"b356a5cd-eec0-424b-b8de-61b07087ff72","block_type":"box","text":"obtain the best price and most favorable execution for the Fund, taking into account a variety of factors","page_number":58,"box":{"x":116,"y":473,"width":768,"height":12}},{"id":"02a17a3d-84e1-4f47-9c6c-29e474de8efe","block_type":"box","text":"including: (i) the size, nature and character of the security or instrument being traded and the markets","page_number":58,"box":{"x":117,"y":489,"width":758,"height":12}},{"id":"045a6917-b8bb-49ba-88ff-0586d0117e62","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":58,"box":{"x":117,"y":504,"width":745,"height":12}},{"id":"a66d38f6-621a-43d8-92bd-24b81e0095a5","block_type":"box","text":"expected commission rates and spreads currently available; (iv) the activity existing and expected in","page_number":58,"box":{"x":116,"y":520,"width":748,"height":12}},{"id":"1df39078-a842-4610-8873-bd2c08b24fe8","block_type":"box","text":"the market for the particular security or instrument, including any anticipated execution difficulties;","page_number":58,"box":{"x":116,"y":535,"width":730,"height":12}},{"id":"42f3a1aa-8eb8-4ac8-a95e-207059eae3b0","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":58,"box":{"x":117,"y":551,"width":759,"height":12}},{"id":"b6d81f5a-4214-4dc0-bdb3-dfd1beb1c523","block_type":"box","text":"research and research services provided; (viii) the reasonableness of the commission, dealer spread","page_number":58,"box":{"x":117,"y":566,"width":752,"height":12}},{"id":"3f595ece-e19c-4fd3-871d-64302dc2dba8","block_type":"box","text":"or its equivalent for the specific transaction; and (ix) BFA’s knowledge of any actual or apparent","page_number":58,"box":{"x":116,"y":582,"width":714,"height":12}},{"id":"09a021ab-04eb-4bba-b78b-b71c7041b622","block_type":"box","text":"operational problems of a broker or dealer.","page_number":58,"box":{"x":116,"y":597,"width":323,"height":12}},{"id":"ed9c9dc1-cc9d-40b5-aae9-17f85fc8b391","block_type":"box","text":"Section 28(e) of the 1934 Act (“Section 28(e)”) permits an investment adviser, under certain","page_number":58,"box":{"x":116,"y":629,"width":686,"height":12}},{"id":"d532fcdb-418b-4c98-8652-171ff3a981a2","block_type":"box","text":"circumstances, to cause an account to pay a broker or dealer a commission for effecting a transaction","page_number":58,"box":{"x":116,"y":644,"width":762,"height":12}},{"id":"920102e0-a355-4cb3-b6f8-61d1148fefe2","block_type":"box","text":"that exceeds the amount another broker or dealer would have charged for effecting the same","page_number":58,"box":{"x":116,"y":660,"width":691,"height":12}},{"id":"18c4f6bc-128b-44c1-9ff7-5eabc2041a1e","block_type":"box","text":"transaction in recognition of the value of brokerage and research services provided by that broker or","page_number":58,"box":{"x":116,"y":675,"width":744,"height":12}},{"id":"6eaa353f-b920-44aa-9c19-c707b538df0c","block_type":"box","text":"dealer. This includes commissions paid on riskless principal transactions under certain conditions.","page_number":58,"box":{"x":116,"y":691,"width":726,"height":12}},{"id":"49251802-f7ff-4283-8f30-ceb6b73ec8a9","block_type":"box","text":"Brokerage and research services include: (1) furnishing advice as to the value of securities, including","page_number":58,"box":{"x":117,"y":706,"width":748,"height":12}},{"id":"e23a4515-86cf-4d3f-bcf5-b6cc6e5e4b7d","block_type":"box","text":"pricing and appraisal advice, credit analysis, risk measurement analysis, performance and other","page_number":58,"box":{"x":117,"y":722,"width":712,"height":12}},{"id":"db319387-a387-4eee-a1f3-51585701e86d","block_type":"box","text":"analysis, as well as the advisability of investing in, purchasing or selling securities, and the availability","page_number":58,"box":{"x":116,"y":737,"width":753,"height":12}},{"id":"0024ff7c-b72c-46cd-9fea-615d02d2b5d3","block_type":"box","text":"of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning","page_number":58,"box":{"x":116,"y":753,"width":719,"height":12}},{"id":"e57da3a1-5df2-4d60-97d9-37c1e0838ab2","block_type":"box","text":"issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of","page_number":58,"box":{"x":117,"y":768,"width":753,"height":12}},{"id":"64304231-4055-4670-879a-114be739b196","block_type":"box","text":"accounts; and (3) effecting securities transactions and performing functions incidental to securities","page_number":58,"box":{"x":116,"y":784,"width":729,"height":12}},{"id":"c95d9eea-0599-47fd-bdfd-202a13c5d468","block_type":"box","text":"transactions (such as clearance, settlement, and custody). BFA believes that access to independent","page_number":58,"box":{"x":116,"y":799,"width":744,"height":12}},{"id":"3514ae6d-f885-43ee-b3f8-4addcf1889a3","block_type":"box","text":"investment research is beneficial to its investment decision-making processes and, therefore, to the","page_number":58,"box":{"x":117,"y":815,"width":737,"height":12}},{"id":"76076561-1876-48be-bc0c-f6a49d43a0fd","block_type":"box","text":"Fund.","page_number":58,"box":{"x":117,"y":830,"width":46,"height":10}},{"id":"d7935060-f6a6-4309-bdb5-c6423f1bb5d7","block_type":"box","text":"BFA, unless prohibited by applicable law, may participate in client commission arrangements under","page_number":58,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"c29553ce-b2e4-431d-8b6b-4984d72fa00f","block_type":"box","text":"which BFA may execute transactions through a broker-dealer and request that the broker-dealer","page_number":58,"box":{"x":116,"y":878,"width":720,"height":12}},{"id":"ff431189-8222-49fd-831a-119503e64c8a","block_type":"box","text":"55","page_number":58,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b7105dd9-ad12-4628-9859-9a054587180c","block_type":"box","text":"NM1026U-6042785-58/259","page_number":58,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"15c463bb-1025-4ddf-9887-ef9199bdffe9","block_type":"box","text":"allocate a portion of the commissions or commission credits to another firm that provides research to","page_number":59,"box":{"x":116,"y":87,"width":752,"height":12}},{"id":"06caaa38-25ea-4419-80ce-57e1c58e4745","block_type":"box","text":"BFA. BFA believes that research services obtained through soft dollar or commission sharing","page_number":59,"box":{"x":117,"y":102,"width":696,"height":13}},{"id":"9207a28a-b1f3-415a-8c6b-a9548d5b316a","block_type":"box","text":"arrangements enhance its investment decision-making capabilities, thereby increasing the prospects","page_number":59,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"2e57670e-a81f-4dd1-8a3f-dc35fc15b96a","block_type":"box","text":"for higher investment returns. BFA will engage only in soft dollar or commission sharing transactions","page_number":59,"box":{"x":116,"y":134,"width":749,"height":12}},{"id":"3b3b61e3-a8d0-4a9d-8607-ddb01bbe7495","block_type":"box","text":"that comply with the requirements of Section 28(e).","page_number":59,"box":{"x":116,"y":149,"width":384,"height":12}},{"id":"2b1f040f-f2d2-4951-82f2-a921a47d6ee8","block_type":"box","text":"BFA regularly evaluates the soft dollar products and services utilized, as well as the overall soft dollar","page_number":59,"box":{"x":117,"y":180,"width":756,"height":12}},{"id":"5efa2896-d992-4b3c-8614-1da8a3a9f676","block_type":"box","text":"and commission sharing arrangements to ensure that trades are executed by firms that are regarded","page_number":59,"box":{"x":116,"y":196,"width":753,"height":12}},{"id":"5daf2023-7b96-48b3-ab99-6ca8692478e9","block_type":"box","text":"as best able to execute trades for client accounts, while at the same time providing access to the","page_number":59,"box":{"x":116,"y":211,"width":723,"height":12}},{"id":"2cbbcf6b-e4d8-4b4c-9f56-652a85fa702f","block_type":"box","text":"research and other services BFA views as impactful to its trading results.","page_number":59,"box":{"x":117,"y":227,"width":545,"height":12}},{"id":"a0145193-5612-4934-b1bf-9ae1899454ef","block_type":"box","text":"BFA, unless prohibited by applicable law, may utilize soft dollars and related services, including","page_number":59,"box":{"x":117,"y":258,"width":711,"height":12}},{"id":"848e29b3-7d1a-4382-a15f-1a1d9e390e50","block_type":"box","text":"research (whether prepared by the broker-dealer or prepared by a third-party and provided to BFA by","page_number":59,"box":{"x":117,"y":273,"width":756,"height":12}},{"id":"daee38c8-0ee6-47a6-b0eb-96555964fd89","block_type":"box","text":"the broker-dealer) and execution or brokerage services within applicable rules and BFA’s policies to","page_number":59,"box":{"x":116,"y":289,"width":745,"height":12}},{"id":"d59b03fa-37da-49f4-aaf4-8386f25c62b6","block_type":"box","text":"the extent that such permitted services do not compromise BFA’s ability to seek to obtain best","page_number":59,"box":{"x":116,"y":304,"width":703,"height":12}},{"id":"1f5a1bda-e9cd-4d91-93ec-9e8f22be20ba","block_type":"box","text":"execution. In this regard, the portfolio management investment and/or trading teams may consider a","page_number":59,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"2d3261f2-8bb5-49a1-ad81-47b7eae3faca","block_type":"box","text":"variety of factors, including the degree to which the broker-dealer: (a) provides access to company","page_number":59,"box":{"x":116,"y":335,"width":735,"height":12}},{"id":"36faac0f-abd6-426d-8b0a-672b99efd923","block_type":"box","text":"management; (b) provides access to their analysts; (c) provides meaningful/insightful research notes","page_number":59,"box":{"x":117,"y":351,"width":751,"height":12}},{"id":"f2f7bb18-8855-4a19-90f2-2e9f763f616f","block_type":"box","text":"on companies or other potential investments; (d) facilitates calls on which meaningful or insightful ideas","page_number":59,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"bbb4fa6f-e402-4ea3-b585-37990ed20548","block_type":"box","text":"about companies or potential investments are discussed; (e) facilitates conferences at which","page_number":59,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"09287b1c-b832-4333-b251-ae9bb8d1f680","block_type":"box","text":"meaningful or insightful ideas about companies or potential investments are discussed; or (f) provides","page_number":59,"box":{"x":117,"y":397,"width":758,"height":12}},{"id":"2f9cc9ee-2234-4df2-b0fe-07cfb5b51a39","block_type":"box","text":"research tools such as market data, financial analysis, and other third-party related research and","page_number":59,"box":{"x":117,"y":413,"width":722,"height":12}},{"id":"d60ee76e-eeea-473e-9dd4-53012036ae44","block_type":"box","text":"brokerage tools that aid in the investment process.","page_number":59,"box":{"x":117,"y":428,"width":380,"height":12}},{"id":"c7ce902f-c22b-4c2c-b0ed-d1ee646ca4ef","block_type":"box","text":"Research-oriented services for which BFA, unless prohibited by applicable law, might pay with Fund","page_number":59,"box":{"x":117,"y":459,"width":747,"height":12}},{"id":"09f22280-75ee-4966-9880-cb61a27fdc14","block_type":"box","text":"commissions may be in written form or through direct contact with individuals and may include","page_number":59,"box":{"x":116,"y":475,"width":703,"height":12}},{"id":"5f53c5c4-f869-434d-8fa1-e25883275966","block_type":"box","text":"information as to particular companies or industries and securities or groups of securities, as well as","page_number":59,"box":{"x":117,"y":490,"width":746,"height":12}},{"id":"87dbaa9f-763a-45ef-914c-d438b9aff6cf","block_type":"box","text":"market, economic, or institutional advice and statistical information, political developments and","page_number":59,"box":{"x":117,"y":506,"width":705,"height":12}},{"id":"9f658194-c116-48fd-81a4-a5dc9590a9cc","block_type":"box","text":"technical market information that assists in the valuation of investments. Research services furnished","page_number":59,"box":{"x":116,"y":521,"width":757,"height":10}},{"id":"02db1614-aa6b-4560-be19-0f06fb10f2aa","block_type":"box","text":"by brokers may be used in servicing some or all client accounts and not all services may be used in","page_number":59,"box":{"x":117,"y":537,"width":743,"height":12}},{"id":"0bdb0f14-94ce-4e15-b2e8-bd30798f26e9","block_type":"box","text":"connection with the fund or account that paid commissions to the broker providing such services. In","page_number":59,"box":{"x":116,"y":552,"width":743,"height":12}},{"id":"b1cf17dd-b7ec-47a9-b92a-0eb2d546d0b8","block_type":"box","text":"some cases, research information received from brokers by mutual fund management personnel, or","page_number":59,"box":{"x":116,"y":568,"width":746,"height":12}},{"id":"647eada7-6724-4bab-9a93-57adf3943c57","block_type":"box","text":"personnel principally responsible for BFA’s individually managed portfolios, is not necessarily shared","page_number":59,"box":{"x":117,"y":583,"width":750,"height":12}},{"id":"371ab9bd-0fa1-4088-bcf3-7e30bf93d6d8","block_type":"box","text":"by and between such personnel. Any investment advisory or other fees paid by the Fund to BFA are","page_number":59,"box":{"x":117,"y":599,"width":747,"height":12}},{"id":"6a895fb7-a4d9-433d-b04e-4e62ac2ffce7","block_type":"box","text":"not reduced as a result of BFA’s receipt of research services.","page_number":59,"box":{"x":117,"y":614,"width":458,"height":12}},{"id":"faa8f0db-5a05-4bf4-b772-2b540e9f3b9c","block_type":"box","text":"In some cases, BFA may receive a service from a broker that has both a “research” and a","page_number":59,"box":{"x":117,"y":645,"width":671,"height":12}},{"id":"b1b37125-d7d6-4d85-9f65-5891df9da650","block_type":"box","text":"“non-research” use. When this occurs BFA makes a good faith allocation, under all the circumstances,","page_number":59,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"4eac4126-197b-4fe7-8e8c-6dcaa88f49a7","block_type":"box","text":"between the research and non-research uses of the service. The percentage of the service that is used","page_number":59,"box":{"x":117,"y":676,"width":764,"height":12}},{"id":"2b3e1095-3c2d-4224-8d99-e34b9c8b9f03","block_type":"box","text":"for research purposes may be paid for with client commissions, while BFA will use its own funds to pay","page_number":59,"box":{"x":116,"y":692,"width":763,"height":12}},{"id":"7aecf4a9-5a8e-4d47-b9e9-255184aa350b","block_type":"box","text":"for the percentage of the service that is used for non-research purposes. In making this good faith","page_number":59,"box":{"x":116,"y":707,"width":725,"height":12}},{"id":"2ac5a2a5-02f4-449a-a1e3-5c100484c641","block_type":"box","text":"allocation, BFA faces a potential conflict of interest, but BFA believes that its allocation procedures are","page_number":59,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"7a02cf1d-156b-4cb4-88ce-726605e39111","block_type":"box","text":"reasonably designed to ensure that it appropriately allocates the anticipated use of such services to","page_number":59,"box":{"x":117,"y":738,"width":737,"height":12}},{"id":"7261e9dc-839c-46d5-a6b9-4b7371290150","block_type":"box","text":"their research and non-research uses.","page_number":59,"box":{"x":116,"y":754,"width":283,"height":9}},{"id":"8f53de63-0cbc-4068-9163-441897b8bb18","block_type":"box","text":"Payments of commissions to brokers who are affiliated persons of the Fund will be made in","page_number":59,"box":{"x":117,"y":785,"width":675,"height":12}},{"id":"aa0a198c-4164-47f0-ba8b-9727e55046ce","block_type":"box","text":"accordance with Rule 17e-1 under the Investment Company Act.","page_number":59,"box":{"x":116,"y":800,"width":480,"height":12}},{"id":"58652e50-f868-44b5-a0bd-cd3e6f991411","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":59,"box":{"x":117,"y":831,"width":747,"height":12}},{"id":"c0a8dfd9-ce45-4db0-a6e8-94f9e4f18382","block_type":"box","text":"situations, the broker may be a member of the selling group that will, in addition to selling securities,","page_number":59,"box":{"x":116,"y":847,"width":746,"height":12}},{"id":"1816a61d-36d2-4f94-b6f5-d68f2b3f81b3","block_type":"box","text":"provide BFA with research services. FINRA has adopted rules expressly permitting these types of","page_number":59,"box":{"x":117,"y":862,"width":729,"height":12}},{"id":"c169241a-8283-4108-ad26-21ebda07ee16","block_type":"box","text":"arrangements under certain circumstances. Generally, the broker will provide research “credits” in","page_number":59,"box":{"x":116,"y":878,"width":731,"height":12}},{"id":"e0366bcb-0525-4080-a61a-0d594b74b189","block_type":"box","text":"56","page_number":59,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"153fcfcb-f74b-4883-b9af-18cdf7b6245e","block_type":"box","text":"NM1026U-6042785-59/259","page_number":59,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4aab31c1-8582-4597-8194-19c3a25f1a62","block_type":"box","text":"these situations at a rate that is higher than that available for typical secondary market transactions.","page_number":60,"box":{"x":116,"y":87,"width":746,"height":12}},{"id":"d5558283-e209-4521-95f9-80ecb62efe3d","block_type":"box","text":"These arrangements may not fall within the safe harbor of Section 28(e).","page_number":60,"box":{"x":116,"y":102,"width":544,"height":13}},{"id":"5fa6ba4d-48e9-4b1a-8bd3-3a84fc4955ac","block_type":"box","text":"The Fund anticipates that its brokerage transactions involving foreign securities generally will be","page_number":60,"box":{"x":116,"y":131,"width":718,"height":12}},{"id":"768daa92-f455-4562-a172-85f798e8ac24","block_type":"box","text":"conducted primarily on the principal stock exchanges of the applicable country. Foreign equity","page_number":60,"box":{"x":116,"y":147,"width":702,"height":12}},{"id":"7cff5657-5898-47e3-8230-d3336023b095","block_type":"box","text":"securities may be held by the Fund in the form of depositary receipts, or other securities convertible","page_number":60,"box":{"x":116,"y":162,"width":744,"height":12}},{"id":"633c636d-4fed-4f34-a5b9-c57fcdee5c06","block_type":"box","text":"into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in OTC","page_number":60,"box":{"x":117,"y":178,"width":758,"height":12}},{"id":"1470b3f8-1a8b-4cd4-aa27-4d86d6675dfc","block_type":"box","text":"markets in the United States or Europe, as the case may be. American Depositary Receipts, like other","page_number":60,"box":{"x":117,"y":193,"width":762,"height":12}},{"id":"a5625c7f-4e46-4143-bb55-31e111736fa0","block_type":"box","text":"securities traded in the United States, will be subject to negotiated commission rates.","page_number":60,"box":{"x":116,"y":209,"width":636,"height":12}},{"id":"308f8988-1363-4dee-b80f-b18baef609e4","block_type":"box","text":"The Fund may invest in certain securities traded in the OTC market and intends to deal directly with","page_number":60,"box":{"x":116,"y":238,"width":745,"height":12}},{"id":"217bf055-9329-4252-aa4c-5a73df4faf2b","block_type":"box","text":"the dealers who make a market in the particular securities, except in those circumstances in which","page_number":60,"box":{"x":116,"y":253,"width":735,"height":12}},{"id":"cec0836f-83e1-4373-95db-0a121c815bef","block_type":"box","text":"better prices and execution are available elsewhere. Under the Investment Company Act, persons","page_number":60,"box":{"x":117,"y":269,"width":732,"height":12}},{"id":"8dd83ddf-67fd-45eb-85d5-1dc17f309cde","block_type":"box","text":"affiliated with the Fund and persons who are affiliated with such affiliated persons are prohibited from","page_number":60,"box":{"x":116,"y":284,"width":755,"height":12}},{"id":"98d46e75-385a-4b8b-8371-f9ccdb1a15e8","block_type":"box","text":"dealing with the Fund as principal in the purchase and sale of securities unless a permissive order","page_number":60,"box":{"x":116,"y":300,"width":733,"height":12}},{"id":"55e3ede6-7b51-4875-99c1-b4004808f368","block_type":"box","text":"allowing such transactions is obtained from the Commission. Since transactions in the OTC market","page_number":60,"box":{"x":116,"y":315,"width":740,"height":12}},{"id":"7e4bdd97-f7a6-49a7-b452-400bae0e61a3","block_type":"box","text":"usually involve transactions with the dealers acting as principal for their own accounts, the Fund will","page_number":60,"box":{"x":117,"y":331,"width":743,"height":12}},{"id":"fdafbb0c-97bd-4e8c-9c7b-905aea268435","block_type":"box","text":"not deal with affiliated persons in connection with such transactions. However, an affiliated person of","page_number":60,"box":{"x":117,"y":346,"width":750,"height":12}},{"id":"dbc40b3c-08a8-4b00-852c-9b817e822330","block_type":"box","text":"the Fund may serve as its broker in OTC transactions conducted on an agency basis provided that,","page_number":60,"box":{"x":116,"y":362,"width":742,"height":12}},{"id":"b0f0ad15-dc3a-4c81-b7fd-b13afc434cc2","block_type":"box","text":"among other things, the fee or commission received by such affiliated broker is reasonable and fair","page_number":60,"box":{"x":116,"y":377,"width":739,"height":12}},{"id":"809a79f1-50c1-4b64-b1e9-a8035b8017eb","block_type":"box","text":"compared to the fee or commission received by non-affiliated brokers in connection with comparable","page_number":60,"box":{"x":116,"y":393,"width":751,"height":12}},{"id":"d19741df-13ac-43a5-ba10-27bb4c3c5701","block_type":"box","text":"transactions.","page_number":60,"box":{"x":116,"y":408,"width":100,"height":10}},{"id":"afc341ef-19e3-4413-8ea8-19aedb3a8ea6","block_type":"box","text":"OTC issues, including most fixed-income securities such as corporate debt and U.S. Government","page_number":60,"box":{"x":116,"y":437,"width":729,"height":12}},{"id":"f8914c5d-3159-4711-89ce-f7c42001a0a4","block_type":"box","text":"securities, are normally traded on a “net” basis without a stated commission, through dealers acting for","page_number":60,"box":{"x":116,"y":452,"width":767,"height":12}},{"id":"7ae9d08c-3ffe-4882-ba04-280af3df2bba","block_type":"box","text":"their own account and not as brokers. The Fund will primarily engage in transactions with these","page_number":60,"box":{"x":116,"y":468,"width":713,"height":12}},{"id":"35b07267-6f8e-4faf-9ec9-36f1196c9077","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":60,"box":{"x":116,"y":483,"width":757,"height":12}},{"id":"c023eef3-6845-4ee5-8ec6-e40cef03d2f9","block_type":"box","text":"broker. Prices paid to a dealer with respect to both foreign and domestic securities will generally","page_number":60,"box":{"x":117,"y":499,"width":716,"height":12}},{"id":"0d8ea0ff-a859-449e-976e-ddf13ec0e3b9","block_type":"box","text":"include a “spread,” which is the difference between the prices at which the dealer is willing to purchase","page_number":60,"box":{"x":117,"y":514,"width":766,"height":12}},{"id":"57e1cca2-1379-4aea-96c1-1e21e350fe56","block_type":"box","text":"and sell the specific security at the time, and includes the dealer’s normal profit.","page_number":60,"box":{"x":116,"y":530,"width":596,"height":12}},{"id":"71f289d8-7e74-4214-b137-aa6b25fa0ac3","block_type":"box","text":"Purchases of money market instruments by the Fund are made from dealers, underwriters and issuers.","page_number":60,"box":{"x":117,"y":559,"width":770,"height":12}},{"id":"e51467b4-a852-4a64-9adb-36ae9be292c8","block_type":"box","text":"The Fund does not currently expect to incur any brokerage commission expense on such transactions","page_number":60,"box":{"x":116,"y":574,"width":762,"height":12}},{"id":"73ad8d94-7897-4989-86a0-971627743954","block_type":"box","text":"because money market instruments are generally traded on a “net” basis with dealers acting as","page_number":60,"box":{"x":117,"y":590,"width":712,"height":12}},{"id":"88e3213d-e5de-4211-8bc4-6aefeac19cbe","block_type":"box","text":"principal for their own accounts without a stated commission. The price of the security, however,","page_number":60,"box":{"x":117,"y":605,"width":718,"height":12}},{"id":"c39ca6d2-7fbf-4686-80fd-ec01d9b91342","block_type":"box","text":"usually includes a profit to the dealer.","page_number":60,"box":{"x":117,"y":621,"width":281,"height":12}},{"id":"ac8e3b96-2498-437c-bd56-15f374308e80","block_type":"box","text":"Securities purchased in underwritten offerings include a fixed amount of compensation to the","page_number":60,"box":{"x":116,"y":649,"width":694,"height":12}},{"id":"791ba27a-22e8-4d9e-a4aa-9e2a3c9a00c6","block_type":"box","text":"underwriter, generally referred to as the underwriter’s concession or discount. When offered securities","page_number":60,"box":{"x":117,"y":665,"width":756,"height":12}},{"id":"5e1f5eb9-82b5-4f78-8df8-b8dea73bbdc0","block_type":"box","text":"are purchased or sold directly from or to an issuer, no commissions or discounts are paid except where","page_number":60,"box":{"x":116,"y":680,"width":766,"height":12}},{"id":"c37fa3be-bca7-40eb-b77d-c3624e7ab4ef","block_type":"box","text":"required by local markets.","page_number":60,"box":{"x":117,"y":696,"width":190,"height":12}},{"id":"22d6cf06-55da-4ee0-af9e-8d919ecca11c","block_type":"box","text":"BFA or the Sub-Advisers may seek to obtain an undertaking from issuers of commercial paper or","page_number":60,"box":{"x":117,"y":725,"width":719,"height":12}},{"id":"ebd29d56-c039-4684-9ad2-a933d7060825","block_type":"box","text":"dealers selling commercial paper to consider the repurchase of such securities from the Fund prior to","page_number":60,"box":{"x":116,"y":740,"width":750,"height":12}},{"id":"6316fec1-8a7a-43b6-a6d9-f9c2c8f0640b","block_type":"box","text":"maturity at their original cost plus interest (sometimes adjusted to reflect the actual maturity of the","page_number":60,"box":{"x":117,"y":756,"width":723,"height":12}},{"id":"b296c5c4-784d-4419-b46f-4c3a18148690","block_type":"box","text":"securities), if it believes that the Fund’s anticipated need for liquidity makes such action desirable. Any","page_number":60,"box":{"x":116,"y":771,"width":758,"height":12}},{"id":"e18c78d0-4cd7-476b-ac46-1bf732aaa7d5","block_type":"box","text":"such repurchase prior to maturity reduces the possibility that the Fund would incur a capital loss in","page_number":60,"box":{"x":116,"y":787,"width":728,"height":12}},{"id":"3ea432f3-1457-4d04-869e-b6230bd91504","block_type":"box","text":"liquidating commercial paper, especially if interest rates have risen since acquisition of such","page_number":60,"box":{"x":117,"y":802,"width":679,"height":12}},{"id":"2eb22fcf-09c4-4198-b75b-d5c457dee0a6","block_type":"box","text":"commercial paper.","page_number":60,"box":{"x":116,"y":818,"width":137,"height":12}},{"id":"b75aa753-c61c-4ae1-8c99-2cfc1347dba7","block_type":"box","text":"Investment decisions for the Fund and for other investment accounts managed by BFA and the other","page_number":60,"box":{"x":117,"y":846,"width":753,"height":12}},{"id":"e744e1d6-6c5a-4403-8511-e093d0a25f42","block_type":"box","text":"Affiliates are made independently of each other in light of differing conditions. BFA allocates","page_number":60,"box":{"x":116,"y":862,"width":686,"height":12}},{"id":"b1e03ecc-c3ca-46ed-a1d0-7fac537b5f85","block_type":"box","text":"investments among client accounts in a fair and equitable manner over time. A variety of factors will be","page_number":60,"box":{"x":117,"y":877,"width":767,"height":12}},{"id":"ea62e506-20ce-401b-9d89-8164a9d17a1e","block_type":"box","text":"57","page_number":60,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"8e5d7223-3132-43ed-b5d8-f4c0ed3d8852","block_type":"box","text":"NM1026U-6042785-60/259","page_number":60,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d4b8eff0-31a2-4f97-bfac-0d7927ab63c0","block_type":"box","text":"considered in making such allocations. These factors include: (i) investment objectives or strategies for","page_number":61,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"51d7606c-6ec9-4271-bcc1-7cb309854783","block_type":"box","text":"particular accounts, including sector, industry, country or region and capitalization weightings; (ii) tax","page_number":61,"box":{"x":117,"y":102,"width":749,"height":13}},{"id":"6255bb6d-209a-4ebf-885c-142f4252314f","block_type":"box","text":"considerations of an account; (iii) risk or investment concentration parameters for an account;","page_number":61,"box":{"x":116,"y":118,"width":699,"height":12}},{"id":"11677497-4e26-44e1-a998-a95de1847d02","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":61,"box":{"x":117,"y":134,"width":737,"height":12}},{"id":"2ee37af6-db26-4eed-948a-4403ca85c157","block_type":"box","text":"availability and liquidity requirements for accounts; (vii) regulatory restrictions; (viii) minimum","page_number":61,"box":{"x":116,"y":149,"width":690,"height":12}},{"id":"bd5c652b-afba-40d2-85dc-8024cce6080a","block_type":"box","text":"investment size of an account; (ix) relative size of account; and (x) such other factors as may be","page_number":61,"box":{"x":117,"y":165,"width":717,"height":12}},{"id":"45535e59-f9d1-4775-b46e-522ff25ab00d","block_type":"box","text":"approved by BlackRock’s general counsel. Moreover, investments may not be allocated to one client","page_number":61,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"84128aa8-dff2-489f-9205-166914f8877a","block_type":"box","text":"account over another based on any of the following considerations: (i) to favor one client account at the","page_number":61,"box":{"x":116,"y":196,"width":771,"height":12}},{"id":"b1d5f8eb-983b-4010-a26e-459f5692b450","block_type":"box","text":"expense of another; (ii) to generate higher fees paid by one client account over another or to produce","page_number":61,"box":{"x":116,"y":211,"width":757,"height":12}},{"id":"1eb0b500-9737-4bc9-9c84-d70a32a20553","block_type":"box","text":"greater performance compensation to BlackRock; (iii) to develop or enhance a relationship with a client","page_number":61,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"9bd3d3ab-1277-4173-9a9f-8f325718a6f8","block_type":"box","text":"or prospective client; (iv) to compensate a client for past services or benefits rendered to BlackRock or","page_number":61,"box":{"x":116,"y":242,"width":765,"height":12}},{"id":"64872b85-df52-4e05-88af-8046d0f70174","block_type":"box","text":"to induce future services or benefits to be rendered to BlackRock; or (v) to manage or equalize","page_number":61,"box":{"x":116,"y":258,"width":707,"height":12}},{"id":"6986d906-1b7b-495c-ab62-1d24e13a258b","block_type":"box","text":"investment performance among different client accounts.","page_number":61,"box":{"x":117,"y":273,"width":426,"height":12}},{"id":"c80f62a9-ac99-4dc5-9837-fac678241c8d","block_type":"box","text":"Equity securities will generally be allocated among client accounts within the same investment","page_number":61,"box":{"x":117,"y":304,"width":702,"height":12}},{"id":"e0342116-6384-4358-baed-c527b879455b","block_type":"box","text":"mandate on a pro rata basis. All allocations of equity securities will be subject, where relevant, to share","page_number":61,"box":{"x":117,"y":320,"width":769,"height":12}},{"id":"700f8120-6b11-470d-8a94-afc3aa2f8a99","block_type":"box","text":"minimums established for accounts and compliance constraints.","page_number":61,"box":{"x":117,"y":335,"width":479,"height":12}},{"id":"89a21038-215d-4aa2-ad38-900e307546f7","block_type":"box","text":"Initial public offerings (“IPOs”) of securities may be over-subscribed and subsequently trade at a","page_number":61,"box":{"x":117,"y":366,"width":716,"height":12}},{"id":"99f41c94-4a1e-4774-b4c9-9872b3135bcc","block_type":"box","text":"premium in the secondary market. In these situations, the supply of securities available for client","page_number":61,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"4af6f74c-fcbe-4608-a8e6-69a469b15477","block_type":"box","text":"accounts is often less than the amount of securities the accounts would otherwise take. In order to","page_number":61,"box":{"x":116,"y":397,"width":734,"height":10}},{"id":"0b94cb3b-7aee-4ca7-a5bf-19823a40a2f7","block_type":"box","text":"allocate these investments fairly and equitably among client accounts over time, each portfolio","page_number":61,"box":{"x":116,"y":413,"width":704,"height":12}},{"id":"91b3b8cd-0db6-4759-8ab5-ec1003364496","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":61,"box":{"x":117,"y":428,"width":766,"height":12}},{"id":"69d3088d-c004-43dc-b4b4-04b5f4e3ee14","block_type":"box","text":"level of interest in a particular offering with respect to eligible client accounts for which that team is","page_number":61,"box":{"x":117,"y":444,"width":733,"height":12}},{"id":"a5352bf5-efef-44b5-a0d6-65c5d0e0b62e","block_type":"box","text":"responsible. IPOs of U.S. equity securities will be identified as eligible for particular client accounts that","page_number":61,"box":{"x":117,"y":459,"width":768,"height":12}},{"id":"9cb23d09-0d24-4c1b-aab5-2bdf9e6a2363","block_type":"box","text":"are managed by portfolio teams who have indicated interest in the offering based on market","page_number":61,"box":{"x":116,"y":475,"width":687,"height":12}},{"id":"26cfbb42-a265-4345-a3b6-830a5eece0c4","block_type":"box","text":"capitalization of the issuer of the security and the investment mandate of the client account and in the","page_number":61,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"9b1474ad-59e9-41d8-9903-9510dc9c30b3","block_type":"box","text":"case of international equity securities, the country where the offering is taking place and the investment","page_number":61,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"463f2f71-be05-4711-aa96-e05d3b019184","block_type":"box","text":"mandate of the client account. Generally, shares received during the IPO will be allocated among","page_number":61,"box":{"x":117,"y":521,"width":726,"height":12}},{"id":"b4832b91-cfa9-47a6-ab9a-e7c78ba47921","block_type":"box","text":"participating client accounts within each investment mandate on a pro rata basis. In situations where","page_number":61,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"1bc08afe-abd7-4636-a5db-5e74a52fb42a","block_type":"box","text":"supply is too limited to be allocated among all accounts for which the investment is eligible, portfolio","page_number":61,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"6b9dbbcb-cc9f-4aeb-b87b-7bc41effdcd3","block_type":"box","text":"managers may rotate such investment opportunities among one or more accounts so long as the","page_number":61,"box":{"x":117,"y":568,"width":723,"height":12}},{"id":"42addd87-7948-4140-a679-61401f42f79f","block_type":"box","text":"rotation system provides for fair access for all client accounts over time. Other allocation","page_number":61,"box":{"x":117,"y":583,"width":659,"height":12}},{"id":"6d8d47f6-2b6e-494d-8db7-d71752a42e9e","block_type":"box","text":"methodologies that are considered by BFA to be fair and equitable to clients may be used as well.","page_number":61,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"bc076030-f8dd-451e-a17e-9557a60d94a6","block_type":"box","text":"Because different accounts may have differing investment objectives and policies, BFA may buy and","page_number":61,"box":{"x":117,"y":630,"width":751,"height":12}},{"id":"a15b17a6-6e27-4999-8406-11945cfc05ea","block_type":"box","text":"sell the same securities at the same time for different clients based on the particular investment","page_number":61,"box":{"x":116,"y":645,"width":713,"height":12}},{"id":"3e2e6a9f-4a3b-4b78-a5b6-4d18bb769710","block_type":"box","text":"objective, guidelines and strategies of those accounts. For example, BFA may decide that it may be","page_number":61,"box":{"x":116,"y":661,"width":739,"height":12}},{"id":"a05acc90-a30f-47a6-98fb-3e5fd90b9bb2","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":61,"box":{"x":116,"y":676,"width":730,"height":12}},{"id":"f42575e9-e153-4037-8d1b-ab9367fc8e3a","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":61,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"bc32e621-9264-4642-ae49-2968fe3ea6b0","block_type":"box","text":"during the same period increase the demand for securities being purchased or the supply of securities","page_number":61,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"05436ad8-b753-4a47-9e87-179dbab3118e","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":61,"box":{"x":117,"y":723,"width":758,"height":12}},{"id":"a3bd9474-0b76-4631-9317-32e938c1ee61","block_type":"box","text":"behalf of one or more of its clients may decrease the market price of such security, adversely","page_number":61,"box":{"x":117,"y":738,"width":690,"height":12}},{"id":"9ffd0599-3842-40b6-8743-3e7915ee4936","block_type":"box","text":"impacting other BlackRock clients that still hold the security. If purchases or sales of securities arise for","page_number":61,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"007e4a18-fde9-4ea1-b308-446e18d6e92f","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":61,"box":{"x":116,"y":769,"width":757,"height":10}},{"id":"2f383d78-375d-42f3-a002-e48251368ab2","block_type":"box","text":"BFA or another Affiliate act as investment manager, transactions in such securities will be made,","page_number":61,"box":{"x":117,"y":785,"width":715,"height":12}},{"id":"82c36b2b-f723-4d3c-a08a-69fe2df833fc","block_type":"box","text":"insofar as feasible, for the respective funds and clients in a manner deemed equitable to all.","page_number":61,"box":{"x":117,"y":800,"width":679,"height":12}},{"id":"49f7b471-9edb-4b19-8878-18c13a371efa","block_type":"box","text":"In certain instances, BFA may find it efficient for purposes of seeking to obtain best execution, to","page_number":61,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"d729cf89-1496-49bb-ac66-0a7bb1bc5185","block_type":"box","text":"aggregate certain contemporaneous purchases or sale orders of its advisory accounts and advisory","page_number":61,"box":{"x":116,"y":847,"width":745,"height":12}},{"id":"8bbb540e-a8e2-4a8d-a126-5291206b2bd7","block_type":"box","text":"accounts of affiliates. In general, all contemporaneous trades for client accounts under management by","page_number":61,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"5fd8a495-8710-4eef-ad08-88c7a26475f0","block_type":"box","text":"the same portfolio manager or investment team will be aggregated in a single order if the trader","page_number":61,"box":{"x":116,"y":878,"width":713,"height":12}},{"id":"185610a4-b6e6-4f22-b11c-acd268b21712","block_type":"box","text":"58","page_number":61,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b889f7f9-dd40-445a-80ee-6645b719ebfe","block_type":"box","text":"NM1026U-6042785-61/259","page_number":61,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6469504b-d21a-4d19-9b3d-221c3893338b","block_type":"box","text":"believes the aggregated trade would provide each client with an opportunity to achieve a more","page_number":62,"box":{"x":117,"y":87,"width":704,"height":12}},{"id":"5699ff81-3b5b-4559-b8fc-25b812f212ee","block_type":"box","text":"favorable execution at a potentially lower execution cost. The costs associated with an aggregated","page_number":62,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"e471a876-336a-492f-9f1c-c1ca4e35bce9","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":62,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"c7176c85-5294-4b57-8a1b-9250f158048b","block_type":"box","text":"particular portfolio manager or management team is filled at several different prices through multiple","page_number":62,"box":{"x":117,"y":134,"width":746,"height":12}},{"id":"490a6b66-37b6-4f81-81a8-ebecdce0858f","block_type":"box","text":"trades, all accounts participating in the order will receive the average price except in the case of certain","page_number":62,"box":{"x":116,"y":149,"width":771,"height":12}},{"id":"31a2d4af-dbc0-4692-8479-13f4bd78a09e","block_type":"box","text":"international markets where average pricing is not permitted. While in some cases this practice could","page_number":62,"box":{"x":117,"y":165,"width":753,"height":12}},{"id":"f051d9e1-8478-4b8a-8d81-b7f46381ef30","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":62,"box":{"x":117,"y":180,"width":736,"height":12}},{"id":"b262c1f9-bbd1-4e1b-8874-34e162147c3f","block_type":"box","text":"other cases it could be beneficial to the Fund. Transactions effected by BFA or the other Affiliates on","page_number":62,"box":{"x":116,"y":196,"width":751,"height":12}},{"id":"516838ee-7ec0-495f-b80d-cc3a69f02780","block_type":"box","text":"behalf of more than one of its clients during the same period may increase the demand for securities","page_number":62,"box":{"x":117,"y":211,"width":749,"height":12}},{"id":"c04380a4-01bd-43e2-9cb3-32fa94ac9b19","block_type":"box","text":"being purchased or the supply of securities being sold, causing an adverse effect on price. The trader","page_number":62,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"48f8afd6-de15-4946-b382-f14edd8ecb01","block_type":"box","text":"will give the aggregated order to the broker-dealer that the trader has identified as being able to","page_number":62,"box":{"x":116,"y":242,"width":714,"height":12}},{"id":"902b5303-6c6c-400e-9b18-b58c442c382c","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":62,"box":{"x":117,"y":258,"width":767,"height":11}},{"id":"58500557-b83e-45bb-a521-60ecd40689df","block_type":"box","text":"reasonable amount of time of the order receipt and aggregated orders will be kept aggregated only","page_number":62,"box":{"x":117,"y":273,"width":737,"height":12}},{"id":"59af7ea1-01e2-4460-8348-6f035f00ea47","block_type":"box","text":"long enough to execute the order.","page_number":62,"box":{"x":117,"y":289,"width":255,"height":12}},{"id":"4da1a681-a455-47b1-bfbd-4b37e2de8456","block_type":"box","text":"The Fund will not purchase securities during the existence of any underwriting or selling group relating","page_number":62,"box":{"x":116,"y":320,"width":764,"height":12}},{"id":"7f6a75f3-a90f-47e5-b472-075e881acb96","block_type":"box","text":"to such securities of which BFA, BRIL or any affiliated person (as defined in the Investment Company","page_number":62,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"6b605c53-18c4-4442-ba8f-1fc7b0ef06bb","block_type":"box","text":"Act) thereof is a member except pursuant to procedures adopted by the Board in accordance with","page_number":62,"box":{"x":116,"y":351,"width":731,"height":12}},{"id":"47a81e5e-29fc-417a-8049-8c4cc10e985d","block_type":"box","text":"Rule 10f-3 under the Investment Company Act. In no instance will portfolio securities be purchased","page_number":62,"box":{"x":117,"y":366,"width":739,"height":12}},{"id":"03ffd1ed-81a3-4b09-87ed-760b18893569","block_type":"box","text":"from or sold to BFA, BRIL or any affiliated person of the foregoing entities except as permitted by","page_number":62,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"775770c0-fdb7-4656-bca2-7b4411df128f","block_type":"box","text":"Commission exemptive order or by applicable law.","page_number":62,"box":{"x":117,"y":397,"width":378,"height":12}},{"id":"119c68e3-1bbf-46ef-9915-42d87542eda5","block_type":"box","text":"As of the date of this SAI, the Fund has not paid any brokerage commissions because the Fund has","page_number":62,"box":{"x":116,"y":428,"width":747,"height":12}},{"id":"5619a261-ef6b-4490-8299-aa98ab130635","block_type":"box","text":"not yet commenced operations.","page_number":62,"box":{"x":117,"y":444,"width":238,"height":12}},{"id":"698b3d09-d159-4262-a6c5-58594ac6fe8f","block_type":"box","text":"As of the date of this SAI, the Fund has not held any securities of its regular broker-dealers (as defined","page_number":62,"box":{"x":116,"y":475,"width":768,"height":12}},{"id":"0a26e87a-c871-4b56-b4ec-91bfb7f0cc6d","block_type":"box","text":"in Rule 10b-1 under the 1940 Act) or their parent entities because the Fund has not yet commenced","page_number":62,"box":{"x":117,"y":490,"width":746,"height":12}},{"id":"051a3e18-5c44-42a6-a041-6020fffbb485","block_type":"box","text":"operations.","page_number":62,"box":{"x":116,"y":506,"width":88,"height":12}},{"id":"424197c2-804e-4a9d-ad0f-5f84e8a6076a","block_type":"box","text":"The Fund’s purchase and sale orders for securities may be combined with those of other investment","page_number":62,"box":{"x":116,"y":537,"width":749,"height":12}},{"id":"0bc68a6a-7bd6-4b1e-93f2-829c6710ffdf","block_type":"box","text":"companies, clients or accounts that BlackRock manages or advises. If purchases or sales of portfolio","page_number":62,"box":{"x":116,"y":552,"width":755,"height":12}},{"id":"f8013543-7e09-4cec-bafd-e841452b53cc","block_type":"box","text":"securities of the Fund and one or more other accounts managed or advised by BlackRock are","page_number":62,"box":{"x":116,"y":568,"width":701,"height":12}},{"id":"0f2e4cb4-915a-4f71-86ba-fe8bb5ba6b43","block_type":"box","text":"considered at or about the same time, transactions in such securities are allocated among the Fund","page_number":62,"box":{"x":116,"y":583,"width":745,"height":12}},{"id":"ed4c8c67-698e-463e-ba73-ece931da6e35","block_type":"box","text":"and the other accounts in a manner deemed equitable to all by BlackRock. In some cases, this","page_number":62,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"d7f38e23-3a0c-40fb-855f-7002950265fa","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":62,"box":{"x":117,"y":614,"width":751,"height":12}},{"id":"4b7281c3-5b3c-4a79-8698-e8a7982cdf44","block_type":"box","text":"concerned. However, in other cases, it is possible that the ability to participate in volume transactions","page_number":62,"box":{"x":116,"y":630,"width":756,"height":12}},{"id":"8695ae2b-0827-4b75-ac2b-d5ef219be426","block_type":"box","text":"and to negotiate lower transaction costs will be beneficial to the Fund. BlackRock may deal, trade and","page_number":62,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"f9443326-f6d0-492f-a43e-e34dfc583c6d","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":62,"box":{"x":117,"y":661,"width":762,"height":12}},{"id":"a62f9298-45d9-4477-803e-1331225e2a7f","block_type":"box","text":"time to time, effect trades on behalf of and for the","page_number":62,"box":{"x":116,"y":676,"width":366,"height":11}},{"id":"b31780b1-5133-454c-b6cd-de577abbe217","block_type":"box","text":"account of the Fund with brokers or dealers that are","page_number":62,"box":{"x":488,"y":676,"width":385,"height":10}},{"id":"bfa8322a-2321-45de-a1ec-fc847242a371","block_type":"box","text":"affiliated with BFA, in conformity with the 1940 Act and SEC rules and regulations. Under these","page_number":62,"box":{"x":116,"y":692,"width":706,"height":12}},{"id":"14a77955-d945-4403-a821-9b6abb44c502","block_type":"box","text":"provisions, any commissions paid to affiliated brokers or dealers must be reasonable and fair","page_number":62,"box":{"x":117,"y":707,"width":689,"height":12}},{"id":"9466514e-7107-430a-b6e5-be4829e43340","block_type":"box","text":"compared to the commissions charged by other brokers or dealers in comparable transactions. The","page_number":62,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"da0ec728-845c-4a13-b1a1-1b72433aad84","block_type":"box","text":"Fund will not deal with affiliates in principal transactions unless permitted by applicable SEC rules or","page_number":62,"box":{"x":117,"y":738,"width":742,"height":12}},{"id":"26c229bb-ec9a-4fa0-8a87-eb1a1d85cc73","block_type":"box","text":"regulations, or by SEC exemptive order.","page_number":62,"box":{"x":117,"y":754,"width":296,"height":12}},{"id":"83199aea-b618-4e89-871d-b3bbfedf1edd","block_type":"box","text":"While the Fund generally does not expect to engage in trading for short-term gains, it will effect","page_number":62,"box":{"x":116,"y":785,"width":705,"height":12}},{"id":"06f397a5-fd11-4bf1-b4e0-52395a36a8a3","block_type":"box","text":"portfolio transactions without regard to any holding period if, in Fund management’s judgment, such","page_number":62,"box":{"x":117,"y":800,"width":738,"height":12}},{"id":"7c362270-c886-412a-beb9-d2e1a7dc3cd7","block_type":"box","text":"transactions are advisable in light of a change in circumstances of a particular company or within a","page_number":62,"box":{"x":116,"y":816,"width":732,"height":12}},{"id":"3f8cbd12-a1a6-4648-8cc6-d2f161c36d14","block_type":"box","text":"particular industry or in general market, economic or financial conditions. The portfolio turnover rate is","page_number":62,"box":{"x":117,"y":831,"width":759,"height":12}},{"id":"660f738e-1227-4891-8d8c-d0d41f7cce47","block_type":"box","text":"calculated by dividing the lesser of the Fund’s annual sales or purchases of portfolio securities","page_number":62,"box":{"x":116,"y":847,"width":704,"height":12}},{"id":"3177b2ba-3eda-49b5-a037-4d1995c73f1a","block_type":"box","text":"(exclusive of purchases or sales of U.S. Government securities and all other securities whose","page_number":62,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"54ce9ab4-b65c-417f-92ee-e52f943a14bb","block_type":"box","text":"maturities at the time of acquisition were one year or less) by the monthly average value of the","page_number":62,"box":{"x":117,"y":878,"width":705,"height":12}},{"id":"1bce372a-dc98-4475-a59d-98d55c09d5b1","block_type":"box","text":"59","page_number":62,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"7d1eec01-3d06-49b5-a92d-4881bfd2d53e","block_type":"box","text":"NM1026U-6042785-62/259","page_number":62,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d69cc6e9-d727-42b9-97e1-58bd441b7caf","block_type":"box","text":"securities in the portfolio during the year. A high rate of portfolio turnover results in certain tax","page_number":63,"box":{"x":116,"y":87,"width":698,"height":12}},{"id":"d0c23958-9915-40b3-bfe0-96cd58bbfd78","block_type":"box","text":"consequences, such as increased capital gain dividends and/or ordinary income dividends, and in","page_number":63,"box":{"x":116,"y":103,"width":731,"height":12}},{"id":"45154ba3-e059-4ec1-8647-30966c012547","block_type":"box","text":"correspondingly greater transaction costs in the form of dealer spreads and brokerage commissions,","page_number":63,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"3b9e6f0a-ce0b-4211-b982-6886f53f29e0","block_type":"box","text":"which are borne directly by the Fund.","page_number":63,"box":{"x":116,"y":134,"width":280,"height":12}},{"id":"f636d5ed-471c-4492-b5d9-57c1fb26beb4","block_type":"box","text":"Additional Information Concerning the","page_number":63,"box":{"x":116,"y":185,"width":687,"height":29}},{"id":"b206ffd6-42d0-4b21-b971-5656ea0ecac5","block_type":"box","text":"Trust","page_number":63,"box":{"x":117,"y":219,"width":102,"height":23}},{"id":"12b23e32-775a-41b8-a209-7e2c62f1bd7b","block_type":"box","text":"Shares.","page_number":63,"box":{"x":116,"y":271,"width":59,"height":10}},{"id":"0dd80b69-8312-4846-a553-8f61abb84825","block_type":"box","text":"The Trust is an open-end management investment company registered with the SEC under","page_number":63,"box":{"x":176,"y":271,"width":689,"height":12}},{"id":"cce59604-3af0-428a-bd2c-5bfb6d70e6f0","block_type":"box","text":"the 1940 Act. The offering of the Trust’s shares is registered under the 1933 Act.","page_number":63,"box":{"x":116,"y":287,"width":603,"height":12}},{"id":"fd278307-fccb-476d-a052-b48aec7a1007","block_type":"box","text":"The Trust was organized as a Delaware statutory trust on October 31, 2018 and is authorized to have","page_number":63,"box":{"x":116,"y":318,"width":760,"height":12}},{"id":"06d86784-4f9e-4701-9b33-8267abec93f3","block_type":"box","text":"multiple series or portfolios, each called a fund. The Trust issues shares of beneficial interests in each","page_number":63,"box":{"x":117,"y":333,"width":760,"height":12}},{"id":"7219852f-f21f-4fb4-a022-079894856ef9","block_type":"box","text":"fund with no par value. The Board may establish and designate additional funds. This SAI relates","page_number":63,"box":{"x":116,"y":349,"width":726,"height":12}},{"id":"f84fab3b-bd7a-409a-9395-3f6c85d4efc2","block_type":"box","text":"solely to the Fund.","page_number":63,"box":{"x":116,"y":365,"width":142,"height":12}},{"id":"dec7b08f-cd99-4101-b6f7-a2e9b393c542","block_type":"box","text":"Each whole share issued by a fund has a pro rata interest in the assets of that fund. Shares have no","page_number":63,"box":{"x":117,"y":396,"width":748,"height":12}},{"id":"5789f44c-b7ab-4dd9-9ab1-edd3f302651f","block_type":"box","text":"preemptive, exchange, subscription or conversion rights and are freely transferable. Each share is","page_number":63,"box":{"x":117,"y":411,"width":732,"height":12}},{"id":"bcfba217-34f1-4b26-9ba7-180dfe394ecd","block_type":"box","text":"entitled to participate equally in dividends and distributions declared by the Board with respect to the","page_number":63,"box":{"x":116,"y":427,"width":749,"height":12}},{"id":"0810b509-b549-44e2-a26d-144fc5e5f67b","block_type":"box","text":"relevant fund, and in the net distributable assets of such fund on liquidation.","page_number":63,"box":{"x":117,"y":442,"width":566,"height":12}},{"id":"3a3f992f-40b0-471e-bdec-8af6b3b77c37","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":63,"box":{"x":117,"y":474,"width":762,"height":11}},{"id":"d0dddc32-bfbf-4e3d-b150-b81f38bbc02e","block_type":"box","text":"matter submitted to shareholders for a vote, each fund shall hold a separate vote, provided that","page_number":63,"box":{"x":117,"y":489,"width":711,"height":12}},{"id":"678a8186-7af7-4a70-b439-1c51e0cbb4e1","block_type":"box","text":"shareholders of all affected funds will vote together when: (i) required by the 1940 Act, or (ii) the","page_number":63,"box":{"x":116,"y":504,"width":717,"height":12}},{"id":"64621a80-1e31-4cf8-9f33-de9a654d7073","block_type":"box","text":"Trustees determine that the matter affects the interests of more than one fund.","page_number":63,"box":{"x":116,"y":520,"width":588,"height":9}},{"id":"43956de0-de17-41d0-a707-a0b2b812885f","block_type":"box","text":"Under Delaware law, the Trust is not required to hold an annual meeting of shareholders unless","page_number":63,"box":{"x":117,"y":551,"width":714,"height":12}},{"id":"5fd3b95f-797e-4026-a5e6-10628f93fdc0","block_type":"box","text":"required to do so under the 1940 Act. The policy of","page_number":63,"box":{"x":117,"y":567,"width":381,"height":12}},{"id":"c0e40f68-a329-4a0e-b3e0-c55b950c983e","block_type":"box","text":"the Trust is not to hold an annual meeting of","page_number":63,"box":{"x":499,"y":567,"width":333,"height":12}},{"id":"a12e0660-dae3-4098-ae21-6679bcbd7033","block_type":"box","text":"shareholders unless required to do so under the 1940 Act. All shares (regardless of the fund) have","page_number":63,"box":{"x":116,"y":582,"width":736,"height":12}},{"id":"f33c684a-407c-403d-bb20-572ba9747bf7","block_type":"box","text":"noncumulative voting rights in the election of members of the Board. Under Delaware law, Trustees of","page_number":63,"box":{"x":117,"y":598,"width":760,"height":12}},{"id":"aec02a1a-0642-48cd-b0fb-2632047bc908","block_type":"box","text":"the Trust may be removed by vote of the shareholders.","page_number":63,"box":{"x":116,"y":613,"width":414,"height":12}},{"id":"82c91f5a-0f2c-424d-bc8b-b5c3ee4b32d2","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":63,"box":{"x":117,"y":644,"width":736,"height":12}},{"id":"0b0fd22a-58b2-4be1-82ad-af163d661b62","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":63,"box":{"x":116,"y":660,"width":744,"height":12}},{"id":"18c00a72-03b7-475a-ac70-c2bc20176e17","block_type":"box","text":"fund, as defined in Rule 0-1 under the 1940 Act. A","page_number":63,"box":{"x":116,"y":675,"width":373,"height":12}},{"id":"d7e8e613-44d9-4b98-bf51-f3a032815176","block_type":"box","text":"fund cannot predict the length of time for which one","page_number":63,"box":{"x":494,"y":675,"width":381,"height":12}},{"id":"239aaafe-d4af-475c-acc2-42d920ab4f0d","block_type":"box","text":"or more shareholders may remain a control person of the fund.","page_number":63,"box":{"x":116,"y":691,"width":465,"height":12}},{"id":"4b8b3be6-2941-4ce8-9367-0994b582ba80","block_type":"box","text":"Shareholders may make inquiries by writing to BlackRock ETF Trust, c/o BlackRock Investments, LLC,","page_number":63,"box":{"x":116,"y":722,"width":763,"height":12}},{"id":"3c54c9c4-dced-4551-9005-cdfc041c7f09","block_type":"box","text":"1 University Square Drive, Princeton, NJ 08540.","page_number":63,"box":{"x":118,"y":738,"width":354,"height":12}},{"id":"419e197d-ac70-4a46-8b6c-68af11e6b3f9","block_type":"box","text":"Absent an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than","page_number":63,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"ea57a8b4-de66-4bd9-b4fc-a6e3415859d8","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":63,"box":{"x":116,"y":784,"width":765,"height":12}},{"id":"975e070c-1834-4a9e-978e-0b978e4f1590","block_type":"box","text":"the SEC’s rules promulgated thereunder. In addition, absent an applicable exemption or other relief","page_number":63,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"21914319-0a8f-41a8-b64d-e9450e89ddca","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":63,"box":{"x":116,"y":815,"width":756,"height":11}},{"id":"2ba4add8-c55d-402b-ada5-b6b8cf6471df","block_type":"box","text":"a fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short sale provisions","page_number":63,"box":{"x":116,"y":831,"width":756,"height":12}},{"id":"30734fa9-9e73-422f-945f-b62b8a55b8a4","block_type":"box","text":"of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and","page_number":63,"box":{"x":116,"y":846,"width":732,"height":12}},{"id":"4d6d1b12-c981-4197-a5af-d45e7c030e8d","block_type":"box","text":"Insiders should consult with their own legal counsel concerning their obligations under Sections 13 and","page_number":63,"box":{"x":117,"y":862,"width":767,"height":12}},{"id":"7f36b59b-ee4e-47f4-b38e-6bf8fc890693","block_type":"box","text":"16 of the 1934 Act and existing guidance provided by the SEC staff.","page_number":63,"box":{"x":118,"y":877,"width":507,"height":12}},{"id":"1ec61ea4-294c-4c62-9e45-db8e34dffddb","block_type":"box","text":"60","page_number":63,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"50c09672-4e64-4c40-8a4f-6399316ac00c","block_type":"box","text":"NM1026U-6042785-63/259","page_number":63,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"13710508-d061-4f07-9830-f38da61c2c61","block_type":"box","text":"In accordance with the Trust’s current Agreement and Declaration of Trust (the “Declaration of Trust”),","page_number":64,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"0491f641-087c-43f3-9adc-ce31dc69e215","block_type":"box","text":"the Board may, without shareholder approval (unless such shareholder approval is required by","page_number":64,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"97235202-08d4-42a1-b675-07c68d94af6f","block_type":"box","text":"applicable law, including the 1940 Act), authorize certain funds to merge, reorganize, consolidate, sell","page_number":64,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"565697a9-e139-4d57-be75-5e2e88b9e127","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":64,"box":{"x":116,"y":134,"width":732,"height":12}},{"id":"32a8ce69-aa43-44ae-ae90-ceb3275a4af8","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":64,"box":{"x":116,"y":149,"width":708,"height":12}},{"id":"a1432fd4-25a2-4207-a9a8-7f2166b24069","block_type":"box","text":"automatically redeemable upon the occurrence of any specific event, the Declaration of Trust provides","page_number":64,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"a24ad97d-cc64-44ec-a3e5-f7b5283fc177","block_type":"box","text":"that the Board will have the unrestricted power to alter the number of shares in a Creation Unit.","page_number":64,"box":{"x":116,"y":180,"width":710,"height":12}},{"id":"00867e81-1514-4894-8046-d8434a88a00a","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":64,"box":{"x":116,"y":196,"width":744,"height":11}},{"id":"f1a4d536-ee59-4f5c-a562-c9cfe2a2cfd0","block_type":"box","text":"determine to permit the shares to be redeemable in aggregations smaller than Creation Units or to be","page_number":64,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"4b80f370-2414-4a51-86ca-f67dd6cf0ff4","block_type":"box","text":"individually redeemable. In such circumstance, the Trust or a fund may make redemptions, for cash or","page_number":64,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"53deef4f-5b7b-4eb2-936d-6d9895ce3dd8","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":64,"box":{"x":116,"y":242,"width":748,"height":11}},{"id":"be7e7ea4-3732-40cd-ae8b-194268a89962","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":64,"box":{"x":116,"y":258,"width":762,"height":12}},{"id":"a58370ee-5b9a-408b-b7cc-26bf36ac515c","block_type":"box","text":"shareholders owning in excess of a certain stated minimum amount.","page_number":64,"box":{"x":116,"y":273,"width":511,"height":12}},{"id":"7cd9f26a-182f-4b98-a096-0257119fdbe5","block_type":"box","text":"DTC as Securities Depository for Shares of the Fund.","page_number":64,"box":{"x":117,"y":301,"width":428,"height":12}},{"id":"84d746a5-b4b2-4255-a09f-5465102b8009","block_type":"box","text":"Shares of the Fund are represented by","page_number":64,"box":{"x":546,"y":301,"width":293,"height":12}},{"id":"0032e69d-09df-4dea-93bc-8cccd70f5443","block_type":"box","text":"securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.","page_number":64,"box":{"x":116,"y":316,"width":727,"height":13}},{"id":"92a5ce44-2927-4a4b-9410-a788bc7034b9","block_type":"box","text":"DTC was created in 1973 to enable electronic movement of securities between its participants (“DTC","page_number":64,"box":{"x":117,"y":344,"width":753,"height":12}},{"id":"bf53655b-54ee-427d-b583-362aafb0b46a","block_type":"box","text":"Participants”), and NSCC was established in 1976 to provide a single settlement system for securities","page_number":64,"box":{"x":117,"y":360,"width":758,"height":12}},{"id":"4b979c92-3679-4945-822e-bc39de808fd4","block_type":"box","text":"clearing and to serve as central counterparty for securities trades among DTC Participants. In 1999,","page_number":64,"box":{"x":116,"y":375,"width":747,"height":12}},{"id":"d02cb7ff-2071-4210-bec7-244a3808616d","block_type":"box","text":"DTC and NSCC were consolidated within the Depository Trust & Clearing Corporation (“DTCC”) and","page_number":64,"box":{"x":117,"y":391,"width":750,"height":12}},{"id":"61f5347b-c7a7-485f-a2eb-e77f3cd1bf0e","block_type":"box","text":"became wholly-owned subsidiaries of DTCC. The common stock of DTCC is owned by the DTC","page_number":64,"box":{"x":117,"y":406,"width":716,"height":12}},{"id":"88386f24-b8fc-41e8-a3a5-4e0b52ad5842","block_type":"box","text":"Participants, but NYSE and FINRA, through subsidiaries, hold preferred shares in DTCC that provide","page_number":64,"box":{"x":117,"y":422,"width":754,"height":12}},{"id":"ba1e3743-2016-4688-b542-c61f40b234f0","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":64,"box":{"x":116,"y":437,"width":725,"height":12}},{"id":"b914f6b6-45c0-40ce-98fc-1cd5f32a701a","block_type":"box","text":"system is available to entities, such as banks, brokers, dealers and trust companies, that clear through","page_number":64,"box":{"x":116,"y":453,"width":766,"height":12}},{"id":"37677b62-12f8-4def-a3db-9c3914cb4135","block_type":"box","text":"or maintain a custodial relationship with a DTC Participant, either directly or indirectly (“Indirect","page_number":64,"box":{"x":116,"y":468,"width":707,"height":12}},{"id":"b45692ee-611f-4ec4-9a5d-ae3a3d97da2a","block_type":"box","text":"Participants”).","page_number":64,"box":{"x":117,"y":484,"width":107,"height":12}},{"id":"66675726-4205-4ca4-83b9-910647a952f9","block_type":"box","text":"Beneficial ownership of shares is limited to DTC Participants, Indirect Participants and persons holding","page_number":64,"box":{"x":117,"y":512,"width":766,"height":12}},{"id":"032bae7b-349b-4b3e-8bce-38c771692d82","block_type":"box","text":"interests through DTC Participants and Indirect Participants. Ownership of beneficial interests in","page_number":64,"box":{"x":117,"y":527,"width":716,"height":12}},{"id":"10b07a71-650a-4f06-b47b-410ed444e30f","block_type":"box","text":"shares (owners of such beneficial interests are referred to herein as “Beneficial Owners”) is shown on,","page_number":64,"box":{"x":116,"y":543,"width":763,"height":12}},{"id":"28e0183a-5da6-4abe-8d01-98d4eb58328f","block_type":"box","text":"and the transfer of ownership is effected only through, records maintained by DTC (with respect to","page_number":64,"box":{"x":116,"y":558,"width":734,"height":12}},{"id":"c05cc01e-cad4-4772-a2fb-7ed598f63187","block_type":"box","text":"DTC Participants) and on the records of DTC Participants (with respect to Indirect Participants and","page_number":64,"box":{"x":117,"y":574,"width":736,"height":12}},{"id":"26f8dc88-3a30-492e-a2f6-8a19144734f6","block_type":"box","text":"Beneficial Owners that are not DTC Participants). Beneficial Owners will receive from or through the","page_number":64,"box":{"x":117,"y":589,"width":746,"height":12}},{"id":"045ed6e7-7322-4e8d-9320-94ae9e890ede","block_type":"box","text":"DTC Participant a written confirmation relating to their purchase of shares. The laws of some","page_number":64,"box":{"x":117,"y":605,"width":692,"height":12}},{"id":"30d1b4be-37ab-42a5-b133-9df57807757a","block_type":"box","text":"jurisdictions may require that certain purchasers of securities take physical delivery of such securities","page_number":64,"box":{"x":115,"y":620,"width":757,"height":12}},{"id":"c5ec3bb0-d0fd-4ecf-810a-39dbade7cff8","block_type":"box","text":"in definitive form. Such laws may impair the ability of certain investors to acquire beneficial interests in","page_number":64,"box":{"x":117,"y":636,"width":761,"height":12}},{"id":"7347659f-3422-438d-859f-36a615d7a0fa","block_type":"box","text":"shares of the Fund.","page_number":64,"box":{"x":116,"y":651,"width":149,"height":10}},{"id":"7efe0717-20e8-4112-b1ad-e0f192764cf6","block_type":"box","text":"Conveyance of all notices, statements and other communications to Beneficial Owners is effected as","page_number":64,"box":{"x":117,"y":679,"width":747,"height":12}},{"id":"62e1e039-adcf-4200-812e-8dc32a5a68a1","block_type":"box","text":"follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make","page_number":64,"box":{"x":116,"y":695,"width":750,"height":12}},{"id":"6f96744c-2bb6-4636-88f9-557ff3088894","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":64,"box":{"x":116,"y":710,"width":766,"height":12}},{"id":"a93c6b6e-7337-4d39-9f04-a9a0b236d5a1","block_type":"box","text":"Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the","page_number":64,"box":{"x":117,"y":726,"width":729,"height":12}},{"id":"cfa04564-db41-4484-904f-f42e4b24774b","block_type":"box","text":"number of Beneficial Owners holding shares, directly or indirectly, through such DTC Participant. The","page_number":64,"box":{"x":117,"y":741,"width":750,"height":12}},{"id":"cc93f0e9-9edd-44a6-bcae-d153fb617534","block_type":"box","text":"Trust shall provide each such DTC Participant with copies of such notice, statement or other","page_number":64,"box":{"x":116,"y":757,"width":685,"height":12}},{"id":"638799a6-758e-46ce-a598-e7adbb187eed","block_type":"box","text":"communication, in such form, number and at such place as such DTC Participant may reasonably","page_number":64,"box":{"x":116,"y":772,"width":727,"height":12}},{"id":"1d02fc80-2345-4fc9-b13e-bd76206e8f2c","block_type":"box","text":"request, in order that such notice, statement or communication may be transmitted by such DTC","page_number":64,"box":{"x":117,"y":788,"width":714,"height":12}},{"id":"23d6d39e-8f01-462f-a3d8-8440f55828c7","block_type":"box","text":"Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each","page_number":64,"box":{"x":117,"y":803,"width":728,"height":12}},{"id":"20c74b0e-ecb3-4f51-9848-89a12c586738","block_type":"box","text":"such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to","page_number":64,"box":{"x":116,"y":819,"width":744,"height":12}},{"id":"8e812ce8-d65c-41a2-bee9-d774f216fb9d","block_type":"box","text":"such transmittal, all subject to applicable statutory and regulatory requirements.","page_number":64,"box":{"x":116,"y":834,"width":595,"height":12}},{"id":"54575b4e-bc2c-4ac3-8f52-d1a9f0711f20","block_type":"box","text":"Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all","page_number":64,"box":{"x":116,"y":862,"width":744,"height":12}},{"id":"ad0e0d25-f1cd-4c84-af9f-5105efc1e5d4","block_type":"box","text":"shares of the Trust. DTC or its nominee, upon receipt of any such distributions, shall credit immediately","page_number":64,"box":{"x":116,"y":878,"width":771,"height":12}},{"id":"83a2056f-f749-4905-aa3a-feddebfc519e","block_type":"box","text":"61","page_number":64,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"2dbb9d0e-7ace-4f43-b4e8-d2e0c51d6779","block_type":"box","text":"NM1026U-6042785-64/259","page_number":64,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7c578ccc-87c0-4b44-b3b7-00773b9d4219","block_type":"box","text":"DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial","page_number":65,"box":{"x":117,"y":87,"width":723,"height":12}},{"id":"1028f080-b849-4b28-8349-48f5db9b37ac","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":65,"box":{"x":117,"y":102,"width":732,"height":13}},{"id":"9bf90c07-f064-4763-bd96-cc452cd8acc4","block_type":"box","text":"Participants to Indirect Participants and Beneficial Owners of shares held through such DTC","page_number":65,"box":{"x":117,"y":118,"width":687,"height":12}},{"id":"4ea7c73e-bc59-48de-9a5a-fdcca73cad78","block_type":"box","text":"Participants will be governed by standing instructions and customary practices, as is now the case with","page_number":65,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"5aa1a2cc-3f53-4608-a234-189487617bc5","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":65,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"8b11fc90-4882-4131-b56c-dd4699c434d6","block_type":"box","text":"the responsibility of such DTC Participants.","page_number":65,"box":{"x":116,"y":165,"width":325,"height":12}},{"id":"91b50f9d-0b0a-4a1b-8ed2-fa2e85b87d01","block_type":"box","text":"The Trust has no responsibility or liability for any aspect of the records relating to or notices to","page_number":65,"box":{"x":116,"y":194,"width":702,"height":12}},{"id":"8b95c85b-1403-47a1-83dd-f6ff1677de94","block_type":"box","text":"Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or","page_number":65,"box":{"x":117,"y":209,"width":756,"height":13}},{"id":"dea44b3b-ca93-45b0-af70-8ef149717226","block_type":"box","text":"for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or","page_number":65,"box":{"x":116,"y":225,"width":766,"height":12}},{"id":"ae4e36fd-5ac3-454a-bc82-23ee2f473911","block_type":"box","text":"for any other aspect of the relationship between DTC and the DTC Participants or the relationship","page_number":65,"box":{"x":116,"y":240,"width":730,"height":13}},{"id":"74c83be8-09b2-4237-9be7-6c92f29a7458","block_type":"box","text":"between such DTC Participants and the Indirect Participants and Beneficial Owners owning through","page_number":65,"box":{"x":117,"y":256,"width":745,"height":12}},{"id":"310e038e-bef9-49b7-970e-84fd0e9ab784","block_type":"box","text":"such DTC Participants. DTC may decide to discontinue providing its service with respect to shares of","page_number":65,"box":{"x":116,"y":271,"width":755,"height":13}},{"id":"c4c8c9b6-b61a-41ed-b060-ebbda289e4a7","block_type":"box","text":"the Trust at any time by giving reasonable notice to the Trust and discharging its responsibilities with","page_number":65,"box":{"x":116,"y":287,"width":751,"height":12}},{"id":"48afb29b-50ba-40cd-ab5d-695513ebb4b2","block_type":"box","text":"respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a","page_number":65,"box":{"x":117,"y":302,"width":747,"height":12}},{"id":"9c4ec0ba-b6c3-4ad9-b376-df93b7dba880","block_type":"box","text":"replacement for DTC to perform its functions at a comparable cost.","page_number":65,"box":{"x":117,"y":318,"width":500,"height":12}},{"id":"761b5184-9c31-4ec8-8f4b-bebc2268953b","block_type":"box","text":"Distribution of Shares.","page_number":65,"box":{"x":117,"y":347,"width":184,"height":10}},{"id":"24919fcb-2723-4011-a694-6b417fa7506b","block_type":"box","text":"In connection with the Fund’s launch, the Fund will be seeded through the","page_number":65,"box":{"x":303,"y":348,"width":552,"height":12}},{"id":"480580c1-a155-424e-8d9c-5eb334d859db","block_type":"box","text":"sale of one or more Creation Units by the Fund to one or more initial investors. Initial investors","page_number":65,"box":{"x":116,"y":363,"width":704,"height":12}},{"id":"4e4820c2-24c0-47fd-8ac8-163dbc94068e","block_type":"box","text":"participating in the seeding may be Authorized Participants, a lead market maker or other third party","page_number":65,"box":{"x":117,"y":379,"width":746,"height":12}},{"id":"1f3288a5-eb31-4c39-94f5-95a1c866595a","block_type":"box","text":"investor or an affiliate of the Fund or the Fund’s adviser. Each such initial investor may sell some or all","page_number":65,"box":{"x":117,"y":394,"width":763,"height":12}},{"id":"8a4116d8-f171-4279-b404-c4d46c6f519a","block_type":"box","text":"of the shares underlying the Creation Unit(s) held by them pursuant to the registration statement for the","page_number":65,"box":{"x":116,"y":409,"width":772,"height":13}},{"id":"6f09b0ca-24ac-45aa-87f3-3eec2f2ad873","block_type":"box","text":"Fund (each, a “Selling Shareholder”), which shares have been registered to permit the resale from time","page_number":65,"box":{"x":117,"y":425,"width":770,"height":12}},{"id":"186c2e18-60e6-4242-a521-7b020808ebf7","block_type":"box","text":"to time after purchase. The Fund will not receive any of the proceeds from the resale by the Selling","page_number":65,"box":{"x":116,"y":440,"width":739,"height":13}},{"id":"ab0d5b3d-9721-4886-9518-f09b72e1265b","block_type":"box","text":"Shareholders of these shares.","page_number":65,"box":{"x":116,"y":456,"width":229,"height":10}},{"id":"b6039f0b-c125-42ff-8ad0-8b2379f55e3c","block_type":"box","text":"Selling Shareholders may sell shares owned by them directly or through broker-dealers, in accordance","page_number":65,"box":{"x":116,"y":485,"width":767,"height":13}},{"id":"3e340f51-dab3-415d-a243-c12e34fb3664","block_type":"box","text":"with applicable law, on any national securities exchange on which the shares may be listed or quoted","page_number":65,"box":{"x":116,"y":501,"width":755,"height":12}},{"id":"db6c9f63-cf20-4822-a0a6-58b6d1dd64d4","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":65,"box":{"x":116,"y":516,"width":756,"height":13}},{"id":"188714ae-c6ae-4a10-be0a-b6e95aaf4207","block_type":"box","text":"exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying","page_number":65,"box":{"x":116,"y":532,"width":735,"height":12}},{"id":"af671827-04eb-45c8-b193-1b239a8a139e","block_type":"box","text":"prices determined at the time of sale, or at negotiated prices. These sales may be effected through","page_number":65,"box":{"x":117,"y":547,"width":737,"height":13}},{"id":"6e1250d6-9291-4ab7-ae24-19c5bc40326d","block_type":"box","text":"brokerage transactions, privately negotiated trades, block sales, entry into options or other derivatives","page_number":65,"box":{"x":117,"y":563,"width":760,"height":12}},{"id":"44bb6761-822a-4d9f-b68d-9f5007c7f9f4","block_type":"box","text":"transactions or through any other means authorized by applicable law. Selling Shareholders may","page_number":65,"box":{"x":116,"y":578,"width":724,"height":13}},{"id":"3120b365-9da2-41bb-8d58-46a627d3c88b","block_type":"box","text":"redeem the shares held in Creation Unit size by them through an Authorized Participant.","page_number":65,"box":{"x":117,"y":594,"width":659,"height":12}},{"id":"38026a59-1087-4148-a2e2-4b9e30ae2be9","block_type":"box","text":"Any Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may","page_number":65,"box":{"x":116,"y":623,"width":767,"height":13}},{"id":"4fd4fe24-2d37-4d0d-b1d3-51d58af03d5b","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":65,"box":{"x":117,"y":639,"width":754,"height":12}},{"id":"f86223a0-333c-4d4d-b621-6095524a017f","block_type":"box","text":"with such sales.","page_number":65,"box":{"x":116,"y":655,"width":123,"height":9}},{"id":"a061c872-c4ec-44d6-97d5-1099116fe74a","block_type":"box","text":"Any Selling Shareholder and any other person participating in such distribution will be subject to","page_number":65,"box":{"x":116,"y":684,"width":711,"height":12}},{"id":"6623133e-f966-4fff-9e05-73231e6afbe7","block_type":"box","text":"applicable provisions of the 1934 Act and the rules and regulations thereunder.","page_number":65,"box":{"x":116,"y":699,"width":585,"height":13}},{"id":"66d624a7-cac5-4d4e-ad2c-9193270c3b09","block_type":"box","text":"Creation and Redemption of Creation","page_number":65,"box":{"x":118,"y":748,"width":678,"height":28}},{"id":"09a886e7-862b-4901-b220-53b1710f1c61","block_type":"box","text":"Units","page_number":65,"box":{"x":119,"y":782,"width":100,"height":22}},{"id":"b792ab3a-50a7-420f-ab15-a270a2b48882","block_type":"box","text":"General.","page_number":65,"box":{"x":116,"y":831,"width":66,"height":9}},{"id":"76e7195b-6b13-4c5a-92af-a30499744b4a","block_type":"box","text":"The Trust issues and sells shares of the Fund only in Creation Units on a continuous basis","page_number":65,"box":{"x":183,"y":831,"width":682,"height":12}},{"id":"548e7499-909d-4f63-96fd-e71e4fda4ef4","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":65,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"1e41d59d-81a5-4e0f-9bf8-3d865c7e0946","block_type":"box","text":"determined after receipt, on any Business Day (as defined below), of an order received by the","page_number":65,"box":{"x":116,"y":862,"width":702,"height":12}},{"id":"3fe12cca-0809-42cb-b4c0-dff4681224f2","block_type":"box","text":"Distributor or its agent in proper form. On days when the Listing Exchange closes earlier than normal,","page_number":65,"box":{"x":117,"y":877,"width":758,"height":13}},{"id":"688ec3c2-77b1-4561-aca0-cd0ed9cb6826","block_type":"box","text":"62","page_number":65,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"214299a7-5e76-425e-9571-9e638e9cad65","block_type":"box","text":"NM1026U-6042785-65/259","page_number":65,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8cb4e905-6b7a-4261-82f3-6b5887ce4262","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":66,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"23acf011-a7d9-4982-a863-b159730d5970","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":66,"box":{"x":116,"y":102,"width":748,"height":12}},{"id":"0dfb5e96-4def-4f67-8476-f8691137f05e","block_type":"box","text":"Creation Unit as of October 1, 2026:","page_number":66,"box":{"x":117,"y":118,"width":273,"height":11}},{"id":"02c5ac75-79ae-4f04-bdbb-76a06f532bf3","block_type":"box","text":"Shares Per","page_number":66,"box":{"x":331,"y":156,"width":70,"height":8}},{"id":"7dd2e3e2-718f-4b19-ab27-8dcdb0c689ee","block_type":"box","text":"Creation","page_number":66,"box":{"x":339,"y":166,"width":53,"height":8}},{"id":"86b77b50-7f57-4c85-9e6c-50b4eb4d4aa4","block_type":"box","text":"Unit","page_number":66,"box":{"x":354,"y":177,"width":25,"height":7}},{"id":"689fcbfd-fe1e-496d-87de-95db99898c22","block_type":"box","text":"Approximate","page_number":66,"box":{"x":587,"y":146,"width":82,"height":9}},{"id":"d0c43d33-d9c8-4e0e-a886-70064798d409","block_type":"box","text":"Value Per","page_number":66,"box":{"x":598,"y":156,"width":61,"height":8}},{"id":"e81dfb56-1101-4bb3-991d-aaa09e668139","block_type":"box","text":"Creation","page_number":66,"box":{"x":602,"y":166,"width":53,"height":8}},{"id":"b4bce5e0-b8dc-4e7c-b271-13408291145e","block_type":"box","text":"Unit (U.S.$)","page_number":66,"box":{"x":592,"y":176,"width":70,"height":10}},{"id":"fc913784-79f7-4e8a-b91b-cf2b9f61d731","block_type":"box","text":"20,000 $500,000","page_number":66,"box":{"x":341,"y":195,"width":327,"height":12}},{"id":"6defaeff-82de-4b20-99a8-8f0019cd0e8a","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":66,"box":{"x":117,"y":227,"width":754,"height":12}},{"id":"8d4f54ee-17a7-415c-b90e-e329af2bab67","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":66,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"b01b0444-4fb6-45c0-8387-1ba98cf8616c","block_type":"box","text":"number of shares outstanding of the Fund, and to make a corresponding change in the number of","page_number":66,"box":{"x":117,"y":258,"width":730,"height":12}},{"id":"2913f924-3b6b-409a-99f7-adad8dbaad67","block_type":"box","text":"shares constituting a Creation Unit, in the event that the per share price in the secondary market rises","page_number":66,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"c0ff1dcf-e163-4d4a-a960-36482e832ce2","block_type":"box","text":"(or declines) to an amount that falls outside the range deemed desirable by the Board.","page_number":66,"box":{"x":117,"y":289,"width":644,"height":12}},{"id":"b4592978-64c5-4a5e-87dc-93e04ab07617","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":66,"box":{"x":116,"y":320,"width":764,"height":12}},{"id":"820974b1-55d3-4bb9-a1da-fd89e31749c0","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":66,"box":{"x":116,"y":335,"width":753,"height":12}},{"id":"162938b5-f142-44d6-83fb-c77749a57965","block_type":"box","text":"for business any day on which the Listing Exchange on","page_number":66,"box":{"x":116,"y":351,"width":414,"height":12}},{"id":"5eddd272-9621-4561-ab89-3b92020b7bfc","block_type":"box","text":"which the Fund is listed for trading is open for","page_number":66,"box":{"x":530,"y":351,"width":343,"height":12}},{"id":"7f492720-be93-4e7d-b7c9-9eb1d33d8c6f","block_type":"box","text":"business. As of the date of this SAI, the Listing Exchange observes the following holidays, as","page_number":66,"box":{"x":117,"y":366,"width":695,"height":12}},{"id":"b33596f7-c08a-4620-aa6d-1908d27aff8b","block_type":"box","text":"observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,","page_number":66,"box":{"x":116,"y":382,"width":760,"height":12}},{"id":"e01664f5-f454-4aed-a8f8-2f3b84882135","block_type":"box","text":"Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.","page_number":66,"box":{"x":116,"y":397,"width":621,"height":12}},{"id":"12c86c7b-4bd5-4ee1-94d4-2e305ac5cc1f","block_type":"box","text":"Fund Deposit.","page_number":66,"box":{"x":117,"y":428,"width":110,"height":12}},{"id":"3527f2ea-21e5-4440-92ab-a497c4c1af2f","block_type":"box","text":"The consideration for purchase of Creation Units of the Fund generally consists of","page_number":66,"box":{"x":228,"y":428,"width":618,"height":12}},{"id":"be1dc0b1-0faf-4e6a-abe6-d54a0b3fffbd","block_type":"box","text":"Deposit Securities and the Cash Component computed as described below. Together, the Deposit","page_number":66,"box":{"x":117,"y":444,"width":734,"height":12}},{"id":"b534764a-48db-4202-8363-0a57b03d2249","block_type":"box","text":"Securities and the Cash Component constitute the “Fund Deposit,” which will be applicable (subject to","page_number":66,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"6eeda477-15b0-4efc-a542-07a2c0446dd3","block_type":"box","text":"possible amendment or correction) to creation requests received in proper form. The Fund Deposit","page_number":66,"box":{"x":117,"y":475,"width":736,"height":12}},{"id":"1539cfe6-a3f0-4137-9243-80276b1b5477","block_type":"box","text":"represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund.","page_number":66,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"f3cf9db9-0742-4957-922f-8d84a9765499","block_type":"box","text":"Such Fund Deposit is applicable, subject to any adjustments as described below, to purchases of","page_number":66,"box":{"x":116,"y":506,"width":726,"height":12}},{"id":"9c02c6fb-6c8d-4cd0-8382-1045c5e10f6c","block_type":"box","text":"Creation Units of shares of the Fund until such time as the next-announced Fund Deposit is made","page_number":66,"box":{"x":117,"y":521,"width":730,"height":12}},{"id":"db98cb7e-b8f4-4aa0-8101-c246f38968e6","block_type":"box","text":"available.","page_number":66,"box":{"x":116,"y":537,"width":75,"height":9}},{"id":"91b4307d-8a52-4e3b-a80b-0f5f86969c33","block_type":"box","text":"The Cash Component is an amount equal to the difference between the NAV of the shares (per","page_number":66,"box":{"x":116,"y":568,"width":714,"height":12}},{"id":"ef228c77-1710-4542-a3df-03511f933a90","block_type":"box","text":"Creation Unit) and the “Deposit Amount,” which is an amount equal to the market value of the Deposit","page_number":66,"box":{"x":117,"y":583,"width":760,"height":12}},{"id":"63f35787-3744-4f35-9a3a-92c5ab168b9d","block_type":"box","text":"Securities, and serves to compensate for any differences between the NAV per Creation Unit and the","page_number":66,"box":{"x":116,"y":599,"width":757,"height":12}},{"id":"a2e35a12-42b7-4c92-8aa1-5e5198190cae","block_type":"box","text":"Deposit Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer","page_number":66,"box":{"x":117,"y":614,"width":766,"height":12}},{"id":"e2c292b1-99a4-4df7-9595-df37324cc1c1","block_type":"box","text":"of beneficial ownership of the Deposit Securities are the sole responsibility of the Authorized","page_number":66,"box":{"x":116,"y":630,"width":689,"height":12}},{"id":"130b7d6d-c17e-4c38-8fda-6966b0e0e825","block_type":"box","text":"Participant purchasing the Creation Unit. The Fund generally offers Creation Units partially for cash,","page_number":66,"box":{"x":117,"y":645,"width":745,"height":12}},{"id":"64bf2cac-a8e7-42ef-a9ce-256ee52acc9b","block_type":"box","text":"but may, in certain circumstances, offer Creation Units solely for cash or solely in-kind. Please see the","page_number":66,"box":{"x":117,"y":661,"width":757,"height":12}},{"id":"c2d457f7-f9cc-4721-acd5-0e9135ac8e17","block_type":"box","text":"Cash Purchase Method","page_number":66,"box":{"x":117,"y":676,"width":175,"height":10}},{"id":"8a38ff72-20bd-47b6-a11d-10b0cf0e294e","block_type":"box","text":"section below and the following discussion summarizing the Deposit Security","page_number":66,"box":{"x":297,"y":676,"width":570,"height":12}},{"id":"0dacbd85-672d-48ca-862d-203704903bc4","block_type":"box","text":"method for further information on purchasing Creation Units of the Fund.","page_number":66,"box":{"x":117,"y":692,"width":535,"height":12}},{"id":"a468129f-706b-4c2e-a4d6-d82d1052dba6","block_type":"box","text":"The identity and number or par value of the Deposit Securities change pursuant to changes in the","page_number":66,"box":{"x":116,"y":723,"width":724,"height":12}},{"id":"5dfb3dfc-516f-4203-89ae-c13d3fe9e7ca","block_type":"box","text":"composition of the Fund’s portfolio and as rebalancing adjustments and corporate action events are","page_number":66,"box":{"x":116,"y":738,"width":739,"height":12}},{"id":"aff9543d-36cc-4bc0-8784-2d138a69cc85","block_type":"box","text":"reflected from time to time by BFA with a view to the investment objective of the Fund. The","page_number":66,"box":{"x":117,"y":754,"width":672,"height":12}},{"id":"3c2a53e1-c930-4623-8b3a-141ef2a04ff2","block_type":"box","text":"composition of the Deposit Securities may also change in response to adjustments to the weighting or","page_number":66,"box":{"x":116,"y":769,"width":757,"height":12}},{"id":"5160da1c-fa6e-42d6-a8ef-3a9304d58e6a","block_type":"box","text":"composition of the component securities constituting the Fund’s portfolio.","page_number":66,"box":{"x":116,"y":785,"width":541,"height":12}},{"id":"01c8c52b-030b-4f63-a13a-9e6409058f59","block_type":"box","text":"The Fund Deposit may also be modified to minimize the Cash Component by redistributing the cash to","page_number":66,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"64bc3ada-6c78-40a0-9f07-afa2ef59a5c2","block_type":"box","text":"the Deposit Securities portion of the Fund Deposit through “systematic rounding.” The rounding","page_number":66,"box":{"x":116,"y":831,"width":712,"height":12}},{"id":"609188e4-d244-45dc-b94f-97a8b7cb30ba","block_type":"box","text":"methodology “rounds up” position sizes of securities in the Deposit Securities (which in turn reduces","page_number":66,"box":{"x":117,"y":847,"width":746,"height":12}},{"id":"b3e5ae09-2594-418c-9e04-48242d26ed8f","block_type":"box","text":"the cash portion). However, the methodology limits the maximum allowed percentage change in weight","page_number":66,"box":{"x":116,"y":862,"width":770,"height":12}},{"id":"e7beeea3-8a4d-4744-ae47-b521e2640735","block_type":"box","text":"and share quantity of any given security in the Fund Deposit.","page_number":66,"box":{"x":116,"y":878,"width":456,"height":12}},{"id":"5694480a-8582-4d9b-860c-37f229830e72","block_type":"box","text":"63","page_number":66,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b4354674-2a16-4fbe-a788-cdc977956ccf","block_type":"box","text":"NM1026U-6042785-66/259","page_number":66,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f247a45f-e0f0-4226-8f67-b2a13d59ad90","block_type":"box","text":"Fund Deposits may also be modified to position a fund towards a forward index rebalance to reflect","page_number":67,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"2b866f78-de30-47e4-8a8a-f233cb4c466c","block_type":"box","text":"revisions that account for index additions, deletions, and re-weights.","page_number":67,"box":{"x":117,"y":102,"width":509,"height":13}},{"id":"9930a985-7c41-4f94-aef0-bf157f233b41","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":67,"box":{"x":116,"y":130,"width":710,"height":12}},{"id":"4127d5d5-95b6-4dd7-abbe-4f636ba0e9eb","block_type":"box","text":"Component to replace any Deposit Security in certain circumstances, including: (i) when instruments","page_number":67,"box":{"x":117,"y":145,"width":750,"height":12}},{"id":"f3486d71-72f7-45a9-80d1-a79b48507871","block_type":"box","text":"are not available in sufficient quantity for delivery, (ii) when instruments are not eligible for transfer","page_number":67,"box":{"x":116,"y":161,"width":732,"height":12}},{"id":"d663b388-9fc9-4012-8b96-2555b5bd0f5d","block_type":"box","text":"through DTC or the clearing process (as discussed below), (iii) when instruments that the Authorized","page_number":67,"box":{"x":116,"y":176,"width":752,"height":12}},{"id":"5bc42d6e-342d-41d8-9a00-c365e9882535","block_type":"box","text":"Participant (or an investor on whose behalf the Authorized Participant is acting) are not able to be","page_number":67,"box":{"x":117,"y":192,"width":728,"height":12}},{"id":"a985a71d-b8d5-4c5d-b355-f1185e09891e","block_type":"box","text":"traded due to a trading restriction, (iv) when delivery of the Deposit Security by the Authorized","page_number":67,"box":{"x":116,"y":207,"width":702,"height":12}},{"id":"70cfa4a4-8e1a-46e3-b94b-c5d62f7311f0","block_type":"box","text":"Participant (or by an investor on whose behalf the Authorized Participant is acting) would be restricted","page_number":67,"box":{"x":117,"y":223,"width":760,"height":12}},{"id":"185ef48f-0a92-45fd-8a4c-c08d51228fe4","block_type":"box","text":"under applicable securities or other local laws, (v) in connection with distribution payments to be made","page_number":67,"box":{"x":117,"y":238,"width":763,"height":12}},{"id":"3521b0aa-bebb-4798-8c86-ee097c52acdf","block_type":"box","text":"by the Fund, or (vi) in certain other situations.","page_number":67,"box":{"x":117,"y":254,"width":341,"height":12}},{"id":"f37f0aa8-f882-4108-892d-b322a1c65bd5","block_type":"box","text":"Cash Purchase Method.","page_number":67,"box":{"x":116,"y":281,"width":195,"height":9}},{"id":"5259fa94-312c-4b78-be71-f0cac6d3969d","block_type":"box","text":"Although the Trust does not generally permit full cash purchases of Creation","page_number":67,"box":{"x":311,"y":281,"width":572,"height":12}},{"id":"65df9f4a-eec9-4bb2-8a1b-1e7319f5447f","block_type":"box","text":"Units of its funds, when partial or full cash purchases of Creation Units are available or specified for the","page_number":67,"box":{"x":117,"y":296,"width":770,"height":12}},{"id":"c135e3dc-e021-4376-a0da-5ad4f6c7062b","block_type":"box","text":"Fund, they will be effected in essentially the same manner as in-kind purchases thereof. In the case of","page_number":67,"box":{"x":117,"y":312,"width":762,"height":12}},{"id":"04b9fcf1-20b2-4f2c-91b8-130f177e5ec6","block_type":"box","text":"a partial or full cash purchase, the Authorized Participant must pay the cash equivalent of the Deposit","page_number":67,"box":{"x":116,"y":327,"width":758,"height":12}},{"id":"85b950c0-e962-4e52-b806-c2e2d0201cd4","block_type":"box","text":"Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash","page_number":67,"box":{"x":116,"y":343,"width":757,"height":12}},{"id":"85cbb0b9-41df-49a4-8382-b9d88cef18ad","block_type":"box","text":"Component required to be paid by an in-kind purchaser.","page_number":67,"box":{"x":117,"y":358,"width":420,"height":12}},{"id":"7dc993d7-d722-4ff8-a392-cd13fda6538c","block_type":"box","text":"Procedures for Creation of Creation Units.","page_number":67,"box":{"x":117,"y":385,"width":335,"height":10}},{"id":"75e7be14-e252-4f8f-a3d8-da207bd4549c","block_type":"box","text":"To be eligible to place orders with the Distributor and to","page_number":67,"box":{"x":453,"y":386,"width":421,"height":12}},{"id":"d4d0c78a-27d9-434a-9325-38f0cc2a0fd3","block_type":"box","text":"create a Creation Unit of the Fund, an entity must be: (i) a “Participating Party,”","page_number":67,"box":{"x":116,"y":401,"width":591,"height":12}},{"id":"cfc6ca17-1ac5-4abe-8776-661610f1f517","block_type":"box","text":"i.e.","page_number":67,"box":{"x":708,"y":401,"width":20,"height":9}},{"id":"8f78258c-8c56-49b5-ae84-fd27ac9c474e","block_type":"box","text":", a broker-dealer or","page_number":67,"box":{"x":731,"y":401,"width":147,"height":11}},{"id":"4c1ad9be-588f-4a8a-a6eb-def68e44c5b2","block_type":"box","text":"other participant in the clearing process through the Continuous Net Settlement System of the NSCC","page_number":67,"box":{"x":116,"y":416,"width":754,"height":13}},{"id":"886898fb-a65f-4872-85b6-c06770450b81","block_type":"box","text":"(the “Clearing Process”), a clearing agency that is registered with the SEC, or (ii) a DTC Participant,","page_number":67,"box":{"x":117,"y":432,"width":744,"height":12}},{"id":"61ef2f3f-8ed4-4927-9879-c66cc8598c9e","block_type":"box","text":"and must have executed an agreement with the Distributor, with respect to creations and redemptions","page_number":67,"box":{"x":116,"y":448,"width":762,"height":12}},{"id":"155a04a9-f59e-49a5-953a-c889f7096a3c","block_type":"box","text":"of Creation Units (“Authorized Participant Agreement”) (discussed below). A member or participant of a","page_number":67,"box":{"x":116,"y":463,"width":770,"height":12}},{"id":"177e31eb-fd66-4d48-805a-0757261b533f","block_type":"box","text":"clearing agency registered with the SEC which has a written agreement with the Fund or one of its","page_number":67,"box":{"x":116,"y":478,"width":735,"height":13}},{"id":"05d0ba2f-dc08-42b6-ac4c-6df10562a02f","block_type":"box","text":"service providers that allows such member or participant to place orders for the purchase and","page_number":67,"box":{"x":116,"y":494,"width":700,"height":12}},{"id":"19272c55-1303-46cb-8150-80a18b5b3608","block_type":"box","text":"redemption of Creation Units is referred to as an “Authorized Participant.” All shares of the Fund,","page_number":67,"box":{"x":117,"y":509,"width":721,"height":12}},{"id":"b7a0a72c-7597-41d6-84cc-d04fc919268f","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":67,"box":{"x":117,"y":525,"width":768,"height":11}},{"id":"a5055473-a4b6-4f2c-89c6-0110e80e853c","block_type":"box","text":"DTC Participant.","page_number":67,"box":{"x":117,"y":540,"width":127,"height":12}},{"id":"cf2aef8c-6955-42ed-a19c-6d9cc3e16fc5","block_type":"box","text":"Role of the Authorized Participant.","page_number":67,"box":{"x":117,"y":568,"width":273,"height":12}},{"id":"6c34f219-410c-4e6c-9611-3114e86f2d6b","block_type":"box","text":"Creation Units may be purchased only by or through a member","page_number":67,"box":{"x":392,"y":568,"width":479,"height":12}},{"id":"b370ab89-5fc1-4f5a-b054-fe52c4334b0b","block_type":"box","text":"or participant of a clearing agency registered with the SEC, which has a written agreement with the","page_number":67,"box":{"x":116,"y":583,"width":739,"height":12}},{"id":"9353ddcf-d428-4c2c-8ca0-98af0a42cb9c","block_type":"box","text":"Fund or one of its service providers that allows such member or participant to place orders for the","page_number":67,"box":{"x":117,"y":599,"width":728,"height":12}},{"id":"b76bde78-3145-454c-9db1-cc936b1bd1f8","block_type":"box","text":"purchase and redemption of Creation Units. Such Authorized Participant will agree, pursuant to the","page_number":67,"box":{"x":117,"y":614,"width":739,"height":12}},{"id":"939aae71-4bdd-429a-bb53-9eb0906a1565","block_type":"box","text":"terms of such Authorized Participant Agreement and on behalf of itself or any investor on whose behalf","page_number":67,"box":{"x":116,"y":630,"width":769,"height":12}},{"id":"3e53b760-c620-4a3d-90cf-d5f47bb26724","block_type":"box","text":"it will act, to certain conditions, including that such Authorized Participant will make available in","page_number":67,"box":{"x":117,"y":645,"width":707,"height":12}},{"id":"cf2a383c-7b3d-47fe-ab53-e56ea67bfb11","block_type":"box","text":"advance of each purchase of shares an amount of cash sufficient to pay the Cash Component, once","page_number":67,"box":{"x":116,"y":661,"width":745,"height":12}},{"id":"2971d5cf-d273-4a77-8f02-9bd744c1cf7f","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":67,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"25166d76-334d-423f-9aad-2597bc1aeed3","block_type":"box","text":"form, together with the transaction fees described below. An Authorized Participant, acting on behalf of","page_number":67,"box":{"x":116,"y":692,"width":764,"height":12}},{"id":"74cd6b9d-2585-4adf-8228-e2cd5d6b970f","block_type":"box","text":"an investor, may require the investor to enter into an agreement with such Authorized Participant with","page_number":67,"box":{"x":116,"y":707,"width":752,"height":12}},{"id":"06c0489b-a0c3-488f-9d7d-917eb2a8337a","block_type":"box","text":"respect to certain matters, including payment of the Cash Component. Investors who are not","page_number":67,"box":{"x":117,"y":723,"width":687,"height":12}},{"id":"56a37fa5-63ca-405c-bc7b-0fc89264bd8d","block_type":"box","text":"Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors","page_number":67,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"902b04d0-dd60-4622-b13e-751ff3ea13ac","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":67,"box":{"x":116,"y":754,"width":766,"height":12}},{"id":"c9eee61f-7a62-407b-93b6-67026c1de858","block_type":"box","text":"Authorized Participant Agreement and that orders to purchase Creation Units may have to be placed","page_number":67,"box":{"x":116,"y":769,"width":746,"height":12}},{"id":"293e4b13-3ea3-4a9f-879a-987757772d93","block_type":"box","text":"by the investor’s broker through an Authorized Participant. As a result, purchase orders placed through","page_number":67,"box":{"x":117,"y":785,"width":762,"height":12}},{"id":"9668994e-c445-4d37-8d10-19edcd113cc2","block_type":"box","text":"an Authorized Participant may result in additional charges to such investor. The Trust does not expect","page_number":67,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"9033ae65-5479-4333-9854-63701686b04a","block_type":"box","text":"to enter into an Authorized Participant Agreement with more than a small number of DTC Participants.","page_number":67,"box":{"x":116,"y":816,"width":757,"height":12}},{"id":"a4b908ca-b795-481a-bcef-064f6088bd93","block_type":"box","text":"A list of current Authorized Participants may be obtained from the Distributor. The Distributor has","page_number":67,"box":{"x":116,"y":831,"width":723,"height":12}},{"id":"fab83f96-b392-45c2-aed8-5d716a8e7c17","block_type":"box","text":"adopted guidelines regarding Authorized Participants’ transactions in Creation Units that are made","page_number":67,"box":{"x":116,"y":847,"width":736,"height":12}},{"id":"25f672a1-8388-40c5-bdf1-7d2fd5e33bfa","block_type":"box","text":"available to all Authorized Participants. These guidelines set forth the processes and standards for","page_number":67,"box":{"x":116,"y":862,"width":736,"height":12}},{"id":"b2f3c879-feac-4d6a-b856-9d0f3ca341e0","block_type":"box","text":"Authorized Participants to transact with the Distributor and its agents in connection with creation and","page_number":67,"box":{"x":116,"y":878,"width":750,"height":12}},{"id":"6f1c6241-8c3c-4469-b0d3-4296b72fe210","block_type":"box","text":"64","page_number":67,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b575c5c0-53eb-47d0-98a9-584bec03950d","block_type":"box","text":"NM1026U-6042785-67/259","page_number":67,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f8e8185b-6a8e-4e68-a11d-d3a07f6553ac","block_type":"box","text":"redemption transactions. In addition, the Distributor may be appointed as the proxy of the Authorized","page_number":68,"box":{"x":117,"y":87,"width":751,"height":12}},{"id":"e6103ca0-2196-4c20-ad45-0217cb941aa1","block_type":"box","text":"Participant and may be granted a power of attorney under its Authorized Participant Agreement.","page_number":68,"box":{"x":117,"y":102,"width":716,"height":13}},{"id":"5a13d3bd-35a9-4797-9f30-1280e8d95d38","block_type":"box","text":"Purchase Orders.","page_number":68,"box":{"x":117,"y":137,"width":144,"height":9}},{"id":"389340ac-3c55-483c-8861-6c6300937d68","block_type":"box","text":"To initiate an order for a Creation Unit, an Authorized Participant must submit to the","page_number":68,"box":{"x":261,"y":137,"width":626,"height":12}},{"id":"02f50210-16e2-41f9-a0dd-098634dd69a1","block_type":"box","text":"Distributor or its agent an irrevocable order to purchase shares of the Fund, in proper form, generally","page_number":68,"box":{"x":117,"y":152,"width":752,"height":12}},{"id":"5a004f9c-fb6a-42b4-ad3d-9477c08cf420","block_type":"box","text":"before 4:00 p.m., Eastern time on any Business Day to receive that day’s NAV. The Distributor or its","page_number":68,"box":{"x":117,"y":168,"width":747,"height":12}},{"id":"7797be9d-0a37-4a54-9c9d-ac63236ed205","block_type":"box","text":"agent will notify BFA and the custodian of such order. The custodian will then provide such information","page_number":68,"box":{"x":116,"y":183,"width":766,"height":12}},{"id":"5874e4e7-23aa-492d-83fb-c5f6389402e9","block_type":"box","text":"to any appropriate sub-custodian. Procedures and requirements governing the delivery of the Fund","page_number":68,"box":{"x":116,"y":199,"width":740,"height":12}},{"id":"0a8b7165-240c-411c-86d4-265c20cc91cd","block_type":"box","text":"Deposit are set forth in the procedures handbook for Authorized Participants and may change from","page_number":68,"box":{"x":117,"y":214,"width":738,"height":12}},{"id":"bd056d24-a70f-46eb-bed0-1cee294c0c3b","block_type":"box","text":"time to time. Investors, other than Authorized Participants, are responsible for making arrangements","page_number":68,"box":{"x":116,"y":230,"width":749,"height":12}},{"id":"a83e5c3a-c19f-453e-bdab-65e98990bb2c","block_type":"box","text":"for a creation request to be made through an Authorized Participant. The Distributor or its agent will","page_number":68,"box":{"x":116,"y":245,"width":743,"height":12}},{"id":"1a6d17a6-3753-4809-88cd-a9d19f8351b0","block_type":"box","text":"provide a list of current Authorized Participants upon request. Those placing orders to purchase","page_number":68,"box":{"x":117,"y":261,"width":714,"height":12}},{"id":"5972494d-47b1-4c37-bff9-5000f362d571","block_type":"box","text":"Creation Units through an Authorized Participant should allow sufficient time to permit proper","page_number":68,"box":{"x":117,"y":276,"width":693,"height":12}},{"id":"78ea69ac-570e-40d8-9c29-3d619e199dea","block_type":"box","text":"submission of the purchase order to the Distributor or its agent by the Cutoff Time (as defined below)","page_number":68,"box":{"x":116,"y":292,"width":754,"height":12}},{"id":"89e27dac-47cc-4907-86f6-cf6a5fd091cd","block_type":"box","text":"on such Business Day.","page_number":68,"box":{"x":116,"y":307,"width":175,"height":12}},{"id":"de874702-5a00-4baa-bd26-7914a6bdc097","block_type":"box","text":"The Authorized Participant must also make available on or before the contractual settlement date, by","page_number":68,"box":{"x":116,"y":341,"width":754,"height":12}},{"id":"7b368319-25d5-434c-b39a-8de1a67d2d11","block_type":"box","text":"means satisfactory to the Fund, immediately available or same day funds estimated by the Fund to be","page_number":68,"box":{"x":117,"y":357,"width":761,"height":12}},{"id":"93eb4742-2c5e-4226-a069-f192580b7c80","block_type":"box","text":"sufficient to pay the Cash Component next determined after acceptance of the purchase order,","page_number":68,"box":{"x":116,"y":372,"width":709,"height":12}},{"id":"f4c9a248-77e0-4888-8bb2-30ffd44e8666","block_type":"box","text":"together with the applicable purchase transaction fees. Those placing orders should ascertain the","page_number":68,"box":{"x":116,"y":388,"width":728,"height":12}},{"id":"2f97babd-24df-4f77-b569-8158c160ad9f","block_type":"box","text":"deadline for cash transfers by contacting the operations department of the broker or depositary","page_number":68,"box":{"x":116,"y":403,"width":709,"height":12}},{"id":"56485e8b-e265-4f3a-b626-1666a358bc7a","block_type":"box","text":"institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly","page_number":68,"box":{"x":117,"y":419,"width":741,"height":12}},{"id":"cd907e01-275f-4f71-9d55-7f2d74828c48","block_type":"box","text":"earlier than the Cutoff Time of the Fund. Investors should be aware that an Authorized Participant may","page_number":68,"box":{"x":116,"y":434,"width":766,"height":12}},{"id":"aa02fa4d-9b94-47b9-9181-1b31ae2a2065","block_type":"box","text":"require orders for purchases of shares placed with it to be in the particular form required by the","page_number":68,"box":{"x":117,"y":450,"width":708,"height":12}},{"id":"041c2223-1419-40d1-a28c-2139d2801398","block_type":"box","text":"individual Authorized Participant.","page_number":68,"box":{"x":117,"y":465,"width":247,"height":12}},{"id":"a163d2f2-7964-4e60-8aa3-2141ceae0a76","block_type":"box","text":"The Authorized Participant is responsible for any and all expenses and costs incurred by the Fund,","page_number":68,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"3c731f98-88e8-4f5c-a39d-27984860a0ef","block_type":"box","text":"including any applicable cash amounts, in connection with any purchase order.","page_number":68,"box":{"x":117,"y":515,"width":589,"height":12}},{"id":"52716b80-9237-4270-bf92-310f22cde0c7","block_type":"box","text":"Timing of Submission of Purchase Orders.","page_number":68,"box":{"x":116,"y":549,"width":340,"height":12}},{"id":"167fa1f1-c26b-4afc-948b-78f531e3e9f8","block_type":"box","text":"An Authorized Participant must submit an irrevocable","page_number":68,"box":{"x":457,"y":549,"width":405,"height":12}},{"id":"5bc1d6b3-d01b-404d-9bf4-aa82ac6a3bc4","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":68,"box":{"x":116,"y":565,"width":766,"height":12}},{"id":"13cbf6de-c2c6-4326-9461-77919f57af71","block_type":"box","text":"order to receive that day’s NAV. Creation Orders must be transmitted by an Authorized Participant in","page_number":68,"box":{"x":116,"y":580,"width":752,"height":12}},{"id":"ffbae24d-cdef-460f-a212-548a3d5ae357","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":68,"box":{"x":116,"y":596,"width":732,"height":12}},{"id":"c0b2f9ae-6059-4557-8eb2-0997e90e3b5e","block_type":"box","text":"Authorized Participant Agreement. Economic or market disruptions or changes, or telephone or other","page_number":68,"box":{"x":116,"y":611,"width":755,"height":12}},{"id":"f544f637-fd55-43bc-83af-b8abd3d7da52","block_type":"box","text":"communication failure, may impede the ability to reach the Distributor or its agent or an Authorized","page_number":68,"box":{"x":116,"y":627,"width":736,"height":12}},{"id":"0493b430-e260-4535-8988-81e2338e5bee","block_type":"box","text":"Participant. Orders to create shares of the Fund that are submitted on the Business Day immediately","page_number":68,"box":{"x":117,"y":642,"width":752,"height":12}},{"id":"fd395ad9-c526-422f-981b-a2c289138284","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":68,"box":{"x":117,"y":658,"width":761,"height":12}},{"id":"331b0152-3f06-41ef-a308-d21cc15ca550","block_type":"box","text":"market are closed may not be accepted. The Fund’s deadline specified above for the submission of","page_number":68,"box":{"x":117,"y":673,"width":737,"height":12}},{"id":"b2aad064-1a77-484c-9226-9ad3f84647f0","block_type":"box","text":"purchase orders is referred to as the Fund’s “Cutoff Time.” The Distributor or its agent, in their","page_number":68,"box":{"x":117,"y":689,"width":696,"height":12}},{"id":"3c26092e-79da-4899-860f-45bb35127e59","block_type":"box","text":"discretion, may permit the submission of such orders and requests by or through an Authorized","page_number":68,"box":{"x":116,"y":704,"width":706,"height":12}},{"id":"254cca96-c543-406d-bd9c-801f2250428d","block_type":"box","text":"Participant at any time (including on days on which the Listing Exchange is not open for business) via","page_number":68,"box":{"x":117,"y":720,"width":751,"height":12}},{"id":"460b29f9-b872-4857-ae75-cb643171f811","block_type":"box","text":"communication through the facilities of the Distributor’s or its agent’s proprietary website maintained for","page_number":68,"box":{"x":116,"y":735,"width":766,"height":12}},{"id":"451f8db6-a1c7-46f0-a1cd-484b97f74b19","block_type":"box","text":"this purpose. Purchase orders and redemption requests, if accepted by the Trust, will be processed","page_number":68,"box":{"x":116,"y":751,"width":737,"height":12}},{"id":"277bdd9b-fa44-4445-947a-0fe5c4df6ee8","block_type":"box","text":"based on the NAV next determined after such acceptance in accordance with the Fund’s Cutoff Times","page_number":68,"box":{"x":117,"y":766,"width":757,"height":12}},{"id":"8a166bd6-1c5b-4bd2-989b-dedc197f4640","block_type":"box","text":"as provided in the Authorized Participant Agreement and disclosed in this SAI.","page_number":68,"box":{"x":116,"y":782,"width":580,"height":12}},{"id":"04795807-cad1-4f48-9798-cfc2f3235ad5","block_type":"box","text":"Acceptance of Orders for Creation Units.","page_number":68,"box":{"x":116,"y":816,"width":325,"height":12}},{"id":"03a9a2d3-7bc6-431e-bd6e-90e3d4c0f393","block_type":"box","text":"Subject to the conditions that (i) an irrevocable purchase","page_number":68,"box":{"x":448,"y":816,"width":419,"height":12}},{"id":"1bed8ce4-2fbe-4819-b00f-881bc903e08e","block_type":"box","text":"order has been submitted by the Authorized Participant (either on its own or another investor’s behalf)","page_number":68,"box":{"x":116,"y":831,"width":761,"height":12}},{"id":"545bb3fe-0572-4704-aba3-8cae0bbb74ae","block_type":"box","text":"and (ii) arrangements satisfactory to the Fund are in place for payment of the Cash Component and","page_number":68,"box":{"x":116,"y":847,"width":745,"height":12}},{"id":"46f3f8f9-5981-43d8-b25b-03c29ed1baa1","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":68,"box":{"x":116,"y":862,"width":757,"height":12}},{"id":"6c6a8cff-9206-4b38-aeab-135bfe800447","block_type":"box","text":"(and the right of the Distributor and BFA) to reject any order until acceptance, as set forth below.","page_number":68,"box":{"x":117,"y":878,"width":720,"height":12}},{"id":"181c3090-1b32-4f0c-af9d-b08ca81ada33","block_type":"box","text":"65","page_number":68,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"8a7570b4-eed9-4be3-82d9-0f045972100c","block_type":"box","text":"NM1026U-6042785-68/259","page_number":68,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1534063d-eaaf-4303-9040-495a77e16a89","block_type":"box","text":"Once the Fund has accepted an order, upon the next determination of the net asset value of the","page_number":69,"box":{"x":116,"y":87,"width":718,"height":12}},{"id":"de56ed0a-fa4d-4918-a6e4-ffea1969f8b3","block_type":"box","text":"shares, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such net","page_number":69,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"c58e0a18-c9fc-4ffa-a2a1-0928745390db","block_type":"box","text":"asset value. The Distributor or its agent will then transmit a confirmation of acceptance to the","page_number":69,"box":{"x":116,"y":118,"width":694,"height":12}},{"id":"df68eafb-27e9-450c-814c-b82f6f0563c1","block_type":"box","text":"Authorized Participant that placed the order.","page_number":69,"box":{"x":116,"y":134,"width":333,"height":11}},{"id":"a28bd3a4-b6b5-430b-864e-8072cce17326","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":69,"box":{"x":116,"y":162,"width":767,"height":12}},{"id":"a7c8249d-4372-4ce8-85c8-2de22eab35ee","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":69,"box":{"x":116,"y":177,"width":759,"height":12}},{"id":"d3681e10-087d-42d0-bf5d-5375d1b7da2d","block_type":"box","text":"Investment Company Act. For example, the Fund may reject or revoke a creation order transmitted to it","page_number":69,"box":{"x":117,"y":192,"width":770,"height":13}},{"id":"87f821c8-4484-45a9-812d-63f52d567420","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":69,"box":{"x":117,"y":208,"width":766,"height":12}},{"id":"142360e6-f1dd-48b4-8152-42a82157187a","block_type":"box","text":"shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (iii) the","page_number":69,"box":{"x":116,"y":223,"width":720,"height":13}},{"id":"b9365528-e39d-40e7-a374-965295bceeac","block_type":"box","text":"Deposit Securities delivered do not conform to the identity and number of shares specified, as","page_number":69,"box":{"x":117,"y":239,"width":700,"height":12}},{"id":"6357c7ef-7759-45fa-baa6-761b706c3592","block_type":"box","text":"described above; (iv) acceptance of the Deposit Securities is not legally required or would, in the","page_number":69,"box":{"x":116,"y":254,"width":721,"height":13}},{"id":"aeb2f8e8-15cf-4e09-ae89-92095749480a","block_type":"box","text":"opinion of counsel, be unlawful; or (v) circumstances outside the control of the Fund, the Distributor or","page_number":69,"box":{"x":116,"y":270,"width":761,"height":12}},{"id":"5079eb61-20a2-4bc3-8b16-139f1e96981d","block_type":"box","text":"its agent and BFA make it impracticable to process purchase orders. The Distributor or its agent shall","page_number":69,"box":{"x":117,"y":286,"width":756,"height":12}},{"id":"24796434-0c9a-426d-b835-d8863117848f","block_type":"box","text":"notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on behalf of","page_number":69,"box":{"x":117,"y":301,"width":756,"height":12}},{"id":"8d57cd9d-c47f-4341-a020-ae4e07233670","block_type":"box","text":"such purchaser of its rejection of such order. The Fund, State Street, the sub-custodian and the","page_number":69,"box":{"x":116,"y":316,"width":714,"height":13}},{"id":"c71b01c4-c4d4-450f-ae54-85ffd32d2073","block_type":"box","text":"Distributor or its agent are under no duty, however, to give notification of any defects or irregularities in","page_number":69,"box":{"x":117,"y":332,"width":765,"height":12}},{"id":"682af7ff-29bd-4501-b009-963e28de2634","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":69,"box":{"x":116,"y":347,"width":771,"height":13}},{"id":"e4040dbb-4914-47d4-a670-ea14250e8bfa","block_type":"box","text":"Issuance of a Creation Unit.","page_number":69,"box":{"x":117,"y":375,"width":225,"height":10}},{"id":"a2118d6d-01f5-4cdb-b165-024089b9c78f","block_type":"box","text":"Except as provided herein, a Creation Unit will not be issued until the","page_number":69,"box":{"x":344,"y":375,"width":515,"height":12}},{"id":"dde4e946-db14-4603-b6d8-1c6b2ad850e7","block_type":"box","text":"transfer of good title to the Fund of the Deposit Securities and the payment of the Cash Component","page_number":69,"box":{"x":116,"y":391,"width":743,"height":12}},{"id":"637ef2e7-7187-4e50-b457-4be47477676d","block_type":"box","text":"have been completed. When the sub-custodian has confirmed to the custodian that the securities","page_number":69,"box":{"x":117,"y":406,"width":726,"height":12}},{"id":"04cf0f1c-ac5e-46c7-97fd-d5d5e85f4fc4","block_type":"box","text":"included in the Fund Deposit (or the cash value thereof) have been delivered to the account of the","page_number":69,"box":{"x":117,"y":422,"width":731,"height":12}},{"id":"1e4e3aac-f87b-49ee-92c5-62d56964c762","block_type":"box","text":"relevant sub-custodian or sub-custodians, the Distributor or its agent and BFA shall be notified of such","page_number":69,"box":{"x":117,"y":437,"width":763,"height":12}},{"id":"6581e65c-1f19-4e9c-9faa-29ea4f19855b","block_type":"box","text":"delivery and the Fund will issue and cause the delivery of the Creation Unit.","page_number":69,"box":{"x":116,"y":453,"width":566,"height":12}},{"id":"6ad232c4-0e59-4eb3-a2aa-6ab40081c06f","block_type":"box","text":"Creation Units are generally issued on a “T+1 basis” (","page_number":69,"box":{"x":117,"y":481,"width":397,"height":12}},{"id":"d67ebd86-d1da-4890-b610-c4d1efebe661","block_type":"box","text":"i.e.","page_number":69,"box":{"x":515,"y":481,"width":20,"height":9}},{"id":"dd426ef7-d4bb-4d08-9243-685e074209d7","block_type":"box","text":", one Business Day after trade date). The","page_number":69,"box":{"x":539,"y":481,"width":311,"height":12}},{"id":"23739b46-bc71-4db3-93d9-b137db86c0ca","block_type":"box","text":"Fund reserves the right to settle Creation Unit transactions on a basis other than T+1, as applicable.","page_number":69,"box":{"x":117,"y":496,"width":747,"height":12}},{"id":"8bce9e4c-ccd6-472f-bee8-8f95fdcfef8d","block_type":"box","text":"For example, the Fund reserves the right to settle Creation Unit transactions on a basis other than T+1","page_number":69,"box":{"x":117,"y":512,"width":766,"height":12}},{"id":"4f7de517-0c4f-41a7-9259-9fc221c5a285","block_type":"box","text":"in order to accommodate non-U.S. market holiday schedules, the occurrence of a holiday in the U.S.","page_number":69,"box":{"x":117,"y":527,"width":750,"height":12}},{"id":"ae43b58e-5c2a-4a76-91fc-be96d92fe2e7","block_type":"box","text":"bond market that is not a holiday observed in the U.S. equity market, to account for different treatment","page_number":69,"box":{"x":117,"y":543,"width":763,"height":12}},{"id":"1e79d6c7-50d4-4909-a390-1772aa8309af","block_type":"box","text":"among non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (","page_number":69,"box":{"x":116,"y":558,"width":620,"height":12}},{"id":"b86922a0-fe3a-4dbf-bff2-fb5852e66154","block_type":"box","text":"i.e.","page_number":69,"box":{"x":738,"y":558,"width":20,"height":10}},{"id":"bc68f47b-74f8-4b69-adea-5daf15bf6e6e","block_type":"box","text":", the last date","page_number":69,"box":{"x":761,"y":558,"width":104,"height":12}},{"id":"4be606cb-eca6-424b-8d2a-b998bd3ba2ed","block_type":"box","text":"the holder of a security can sell the security and still receive dividends payable on the security sold)","page_number":69,"box":{"x":116,"y":574,"width":742,"height":12}},{"id":"756d94c2-12f0-470b-a5fb-764ed8ba03e2","block_type":"box","text":"and in certain other circumstances consistent with applicable law.","page_number":69,"box":{"x":116,"y":589,"width":491,"height":12}},{"id":"91354d5c-2a10-4a53-8fe4-2ab8f0b07973","block_type":"box","text":"To the extent contemplated by an Authorized Participant Agreement with the Distributor, the Fund will","page_number":69,"box":{"x":116,"y":617,"width":759,"height":12}},{"id":"32e3b7af-5b80-40b0-b739-0bdb6a6665de","block_type":"box","text":"issue Creation Units to such Authorized Participant, notwithstanding the fact that the corresponding","page_number":69,"box":{"x":117,"y":633,"width":741,"height":12}},{"id":"608c29a4-b594-4728-a15b-5e778a6881ed","block_type":"box","text":"Fund Deposits have not been received in part or in whole, in reliance on the undertaking of the","page_number":69,"box":{"x":117,"y":648,"width":706,"height":12}},{"id":"b7f93f58-f743-4491-bc83-98572d545d49","block_type":"box","text":"Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking","page_number":69,"box":{"x":116,"y":664,"width":764,"height":12}},{"id":"3d88846b-b414-40e0-96b4-70b359072a4f","block_type":"box","text":"shall be secured by such Authorized Participant’s delivery and maintenance of collateral as set forth in","page_number":69,"box":{"x":116,"y":679,"width":758,"height":12}},{"id":"0afd17f8-b9bb-4bc0-bc26-de4024b01824","block_type":"box","text":"the handbook for Authorized Participants. The Trust may use such collateral at any time to buy Deposit","page_number":69,"box":{"x":116,"y":695,"width":765,"height":12}},{"id":"41999339-6f43-46a8-b59e-8738d3720ab6","block_type":"box","text":"Securities for the Fund. Such collateral must be delivered no later than the time specified by the Fund","page_number":69,"box":{"x":116,"y":710,"width":753,"height":12}},{"id":"ba7082af-9130-4637-a872-61ef9b77b61e","block_type":"box","text":"or its custodian on the contractual settlement date. Information concerning the Fund’s current","page_number":69,"box":{"x":116,"y":726,"width":692,"height":12}},{"id":"dad43a19-fa89-4d57-b7ec-e2e5a2fd8122","block_type":"box","text":"procedures for collateralization of missing Deposit Securities is available from the Distributor or its","page_number":69,"box":{"x":117,"y":741,"width":725,"height":12}},{"id":"da658b3c-1dad-4792-b60b-18d8d0cd32eb","block_type":"box","text":"agent. The Authorized Participant Agreement will permit the Fund to buy the missing Deposit","page_number":69,"box":{"x":116,"y":757,"width":689,"height":12}},{"id":"0691d0bc-1024-4133-8c40-432f40786336","block_type":"box","text":"Securities at any time and will subject the Authorized Participant to liability for any shortfall between the","page_number":69,"box":{"x":116,"y":772,"width":766,"height":12}},{"id":"0fe856de-276e-42e7-b957-313849fe3813","block_type":"box","text":"cost to the Fund of purchasing such securities and the collateral including, without limitation, liability for","page_number":69,"box":{"x":116,"y":788,"width":764,"height":12}},{"id":"883530ad-0833-4722-b7c3-3b85aa36f6c1","block_type":"box","text":"related brokerage, borrowings and other charges.","page_number":69,"box":{"x":117,"y":803,"width":366,"height":12}},{"id":"f6253500-4db6-4b4b-a445-c636dcd4ce0b","block_type":"box","text":"In certain cases, Authorized Participants may create and redeem Creation Units on the same trade","page_number":69,"box":{"x":117,"y":831,"width":738,"height":12}},{"id":"491ff092-094f-495d-b8aa-a9aabbce1456","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":69,"box":{"x":116,"y":847,"width":754,"height":12}},{"id":"839d3e3c-d925-4058-9bde-08f23f1e5f4e","block_type":"box","text":"require a representation from the Authorized Participants that the creation and redemption transactions","page_number":69,"box":{"x":117,"y":862,"width":769,"height":12}},{"id":"af7fd31d-1c46-44f5-a186-8b6ee90ed9d9","block_type":"box","text":"are for separate beneficial owners. All questions as to the number of shares of each security in the","page_number":69,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"4abe2d8f-bc43-434b-be1b-3e3ad62d8a64","block_type":"box","text":"66","page_number":69,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d60b662e-97ee-4fbc-b4c7-ef40feafccff","block_type":"box","text":"NM1026U-6042785-69/259","page_number":69,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"89d5e31f-9e78-4e4b-857d-9207b7e7e812","block_type":"box","text":"Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be","page_number":70,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"34a9ae9c-ca70-4306-82f3-cc11bb248943","block_type":"box","text":"delivered shall be determined by the Fund and the Fund’s determination shall be final and binding.","page_number":70,"box":{"x":116,"y":102,"width":735,"height":13}},{"id":"60437485-15d9-47fb-9ad0-d2b06a2a185f","block_type":"box","text":"Costs Associated with Creation Transactions. A","page_number":70,"box":{"x":116,"y":134,"width":371,"height":10}},{"id":"233f3dc5-0a04-4321-86b8-13090471a852","block_type":"box","text":"A standard creation transaction fee is imposed to","page_number":70,"box":{"x":487,"y":134,"width":370,"height":12}},{"id":"2d2b5907-8d10-45ce-8f0a-ba6284bc384d","block_type":"box","text":"offset the transfer and other transaction costs associated with the issuance of Creation Units.","page_number":70,"box":{"x":116,"y":150,"width":696,"height":9}},{"id":"db846c10-606a-4d95-9e11-12ad7706c47f","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain","page_number":70,"box":{"x":117,"y":182,"width":764,"height":12}},{"id":"f54f0338-d959-4529-b75a-f4a570ed6573","block_type":"box","text":"order processing, Authorized Participant communications, and related services in connection with the","page_number":70,"box":{"x":116,"y":197,"width":756,"height":12}},{"id":"be5599f2-ec16-4c6c-b399-91e2a4ac2c88","block_type":"box","text":"issuance and redemption of Creation Units (“ETF Services”). BRIL will receive from an Authorized","page_number":70,"box":{"x":117,"y":213,"width":730,"height":12}},{"id":"6b8a0743-fabe-4479-9252-de7cfb975792","block_type":"box","text":"Participant a standard transaction fee on each creation order, which consists of (1) a fee for providing","page_number":70,"box":{"x":117,"y":228,"width":757,"height":12}},{"id":"f6d4425e-d661-449e-aaeb-3a3b43451bbd","block_type":"box","text":"the ETF Services (the “ETF Servicing Fee”) and (2) transfer, processing and other transaction costs","page_number":70,"box":{"x":116,"y":244,"width":746,"height":12}},{"id":"7199d3b6-63a1-4cd6-91d1-bc964dc4271f","block_type":"box","text":"charged by the Fund custodian in connection with the issuance of Creation Units for such creation","page_number":70,"box":{"x":116,"y":259,"width":732,"height":12}},{"id":"8d8fa71f-f050-4ff0-a06a-4fa9ad2438f3","block_type":"box","text":"order (“Custody Transaction Costs”). BRIL is entitled to retain the ETF Servicing Fee pursuant to the","page_number":70,"box":{"x":116,"y":275,"width":750,"height":12}},{"id":"be0ba002-ee1e-4b07-be17-aa5928f1f65f","block_type":"box","text":"ETF Services Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund","page_number":70,"box":{"x":117,"y":290,"width":702,"height":12}},{"id":"c453463a-4105-46d2-a1ff-a2d7b0fdb978","block_type":"box","text":"custodian according to the amounts invoiced by such custodian.","page_number":70,"box":{"x":116,"y":306,"width":481,"height":12}},{"id":"877becd9-049c-4d4e-afbb-f762e6ee34ff","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":70,"box":{"x":116,"y":337,"width":704,"height":12}},{"id":"06b82073-b350-43e8-a91b-b6514c1e53c4","block_type":"box","text":"purchased, which amount will vary among different BlackRock-advised funds based on a number of","page_number":70,"box":{"x":117,"y":353,"width":743,"height":12}},{"id":"fc07ce46-182c-4767-9001-f251a6b523dc","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":70,"box":{"x":116,"y":368,"width":745,"height":12}},{"id":"0e94dc53-1677-44f2-9bc4-4fdb314da29a","block_type":"box","text":"fund’s Creation Basket, among other variables. The ETF Servicing Fee may be equal to zero in certain","page_number":70,"box":{"x":116,"y":384,"width":767,"height":12}},{"id":"1653ad69-4a5a-48cd-a76a-34d029e5aeaa","block_type":"box","text":"instances, such as for creation transactions that consist solely of cash. The actual Custody Transaction","page_number":70,"box":{"x":117,"y":399,"width":770,"height":13}},{"id":"0cb49638-4268-4727-b7d1-4e58ebb139e0","block_type":"box","text":"Costs vary per order based on the number of trades, underlying markets and settlement locations","page_number":70,"box":{"x":117,"y":415,"width":728,"height":12}},{"id":"cf296bb5-337f-4f7a-b9ac-bd86a90e202a","block_type":"box","text":"associated with the issuance of a Creation Unit. The following table sets forth the Fund’s standard","page_number":70,"box":{"x":116,"y":430,"width":731,"height":13}},{"id":"64253ddf-3d6e-4994-b551-c57d4cb022ed","block_type":"box","text":"creation transaction fee that would have been charged as of October 1, 2026, although the actual fee","page_number":70,"box":{"x":116,"y":446,"width":756,"height":12}},{"id":"9e347f8e-aaeb-4a54-b28c-1cc5443cd21b","block_type":"box","text":"charged to an Authorized Participant in connection with a creation order will vary over time depending","page_number":70,"box":{"x":116,"y":462,"width":759,"height":12}},{"id":"748dc7f0-07de-44b6-8c18-65ab4b7ec924","block_type":"box","text":"on the factors discussed above, and may be higher than the fee set forth below.","page_number":70,"box":{"x":116,"y":477,"width":598,"height":12}},{"id":"cdf2524d-0845-4adc-aca9-6df9f9f092d1","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":70,"box":{"x":117,"y":509,"width":761,"height":12}},{"id":"986af226-7533-47ab-ba65-c01869593ebc","block_type":"box","text":"if a creation transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":70,"box":{"x":117,"y":524,"width":729,"height":12}},{"id":"342ce32c-b346-4eb6-8ca7-147e64d87ffb","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":70,"box":{"x":117,"y":540,"width":762,"height":12}},{"id":"e212500c-545a-4916-8fc5-1fd4e4be3fea","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":70,"box":{"x":116,"y":555,"width":703,"height":12}},{"id":"f0880a2e-21db-48cf-883a-46304eeb6738","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":70,"box":{"x":116,"y":571,"width":743,"height":12}},{"id":"b73f4b34-a7c0-4a9b-84da-cfe4d1bdde9e","block_type":"box","text":"based on historical data or other inputs, at BlackRock’s discretion, and may include part or all of the","page_number":70,"box":{"x":117,"y":586,"width":743,"height":12}},{"id":"f73669a4-a971-499f-b761-3427fd3a75b5","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":70,"box":{"x":116,"y":602,"width":702,"height":12}},{"id":"3bb8387a-2656-4606-9b42-4242c0494399","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":70,"box":{"x":117,"y":617,"width":769,"height":12}},{"id":"f1398c51-729e-42a1-bf8a-ff935f573079","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":70,"box":{"x":117,"y":633,"width":719,"height":12}},{"id":"5fe4e945-1e79-4228-b959-c6dffe50d3fc","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":70,"box":{"x":116,"y":648,"width":734,"height":12}},{"id":"5023f8e4-184c-4368-b3a3-ef339988c46c","block_type":"box","text":"amounts shown below.","page_number":70,"box":{"x":116,"y":664,"width":169,"height":9}},{"id":"b8a51fe4-0684-435a-815a-fb90a9e8fc8c","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Deposit Securities to the Fund.","page_number":70,"box":{"x":116,"y":696,"width":717,"height":12}},{"id":"8d65d4d5-16b6-4783-b862-6e8af332dc51","block_type":"box","text":"Certain fees/costs associated with creation transactions may be waived in certain circumstances.","page_number":70,"box":{"x":117,"y":711,"width":719,"height":12}},{"id":"3ad0f741-86dd-45cb-ab02-2acfa99f8c27","block_type":"box","text":"Investors who use the services of a broker or other financial intermediary to acquire Fund shares may","page_number":70,"box":{"x":117,"y":727,"width":754,"height":12}},{"id":"d6814326-4628-422a-ab5e-6a3abb307b56","block_type":"box","text":"be charged a fee for such services.","page_number":70,"box":{"x":117,"y":742,"width":259,"height":12}},{"id":"a49ac200-eb50-4d59-ba47-46ca7e09b6b1","block_type":"box","text":"The following table sets forth the Fund’s standard creation transaction fee that would have been","page_number":70,"box":{"x":116,"y":774,"width":711,"height":12}},{"id":"ca7449c9-a02c-4a21-8d65-1b6d7973f0ac","block_type":"box","text":"charged as of October 1, 2026 and maximum additional charge (as described above):","page_number":70,"box":{"x":116,"y":789,"width":636,"height":12}},{"id":"560627ea-88df-4c5e-9b07-89fc2df8357f","block_type":"box","text":"Standard","page_number":70,"box":{"x":334,"y":818,"width":57,"height":7}},{"id":"e3d2c8c0-cae6-48c6-99b5-158e3d25c0c2","block_type":"box","text":"Creation","page_number":70,"box":{"x":336,"y":828,"width":53,"height":8}},{"id":"42c880b9-9f45-41eb-a726-c527eda6bc12","block_type":"box","text":"Transaction Fee*","page_number":70,"box":{"x":308,"y":838,"width":108,"height":8}},{"id":"04575279-6238-40d4-bdd6-8a64c62fc614","block_type":"box","text":"Maximum Additional","page_number":70,"box":{"x":560,"y":828,"width":130,"height":8}},{"id":"8e83e980-44c1-44c2-b554-dead2c3461c8","block_type":"box","text":"Charge**","page_number":70,"box":{"x":597,"y":838,"width":56,"height":10}},{"id":"f9257c7c-21dd-4643-a1d9-39e131dbda3f","block_type":"box","text":"$567.50 3%","page_number":70,"box":{"x":333,"y":857,"width":309,"height":11}},{"id":"c4103568-c6b7-409c-8b39-cbbfaf2444dc","block_type":"box","text":"67","page_number":70,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0b92a574-47b9-412a-b76c-fde655987079","block_type":"box","text":"NM1026U-6042785-70/259","page_number":70,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"04784084-6f55-4887-9169-0d6572187d28","block_type":"box","text":"* The standard creation transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The standard","page_number":71,"box":{"x":143,"y":86,"width":732,"height":10}},{"id":"60ed22e2-8fac-4fff-94b2-039ac0ed9ec4","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":71,"box":{"x":170,"y":99,"width":706,"height":10}},{"id":"f0feb9f4-132b-4ff4-a18e-0af46c63af75","block_type":"box","text":"set forth above.","page_number":71,"box":{"x":170,"y":112,"width":91,"height":8}},{"id":"05cc4e1e-b60c-4bd9-bf27-f1f7502ed098","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":71,"box":{"x":143,"y":125,"width":364,"height":10}},{"id":"fe2a2d3a-64b2-4e3d-9050-44f9a706540f","block_type":"box","text":"Redemption of Creation Units.","page_number":71,"box":{"x":117,"y":156,"width":240,"height":12}},{"id":"0219772d-8ae0-4e47-bd60-33305b990070","block_type":"box","text":"Shares of the Fund may be redeemed by Authorized Participants only","page_number":71,"box":{"x":358,"y":156,"width":529,"height":12}},{"id":"761cbd9f-c225-4322-8981-5ca950fdfea7","block_type":"box","text":"in Creation Units at their NAV next determined after receipt of a redemption request in proper form by","page_number":71,"box":{"x":117,"y":172,"width":757,"height":12}},{"id":"e0583792-5cf1-4b62-8596-153b72cf3867","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":71,"box":{"x":116,"y":187,"width":752,"height":12}},{"id":"02c2a844-c62b-4926-a17e-a86edd1b35c3","block_type":"box","text":"less than Creation Units. There can be no assurance, however, that there will be sufficient liquidity in","page_number":71,"box":{"x":117,"y":203,"width":751,"height":12}},{"id":"69851d8f-e40e-45e4-9413-926952ad5bdf","block_type":"box","text":"the secondary market at any time to permit assembly of a Creation Unit. Investors should expect to","page_number":71,"box":{"x":116,"y":218,"width":740,"height":12}},{"id":"cd180422-7a4d-48c1-808c-66d930e61e90","block_type":"box","text":"incur brokerage and other costs in connection with assembling a sufficient number of shares to","page_number":71,"box":{"x":117,"y":234,"width":708,"height":12}},{"id":"5706315d-e6f3-4e0d-b81e-294b18937982","block_type":"box","text":"constitute a Creation Unit that could be redeemed by an Authorized Participant. Beneficial owners also","page_number":71,"box":{"x":116,"y":249,"width":767,"height":12}},{"id":"23be5401-38f9-440e-8224-0aea8ed92b40","block_type":"box","text":"may sell shares in the secondary market.","page_number":71,"box":{"x":117,"y":265,"width":309,"height":12}},{"id":"810c4f6b-799c-49e1-9a70-a2c572dd51d9","block_type":"box","text":"The Fund generally redeems Creation Units for Fund Securities. Please see the","page_number":71,"box":{"x":116,"y":298,"width":597,"height":12}},{"id":"15df0cd3-2a87-4ee5-9f92-e42b3e6b7a52","block_type":"box","text":"Cash Redemption","page_number":71,"box":{"x":715,"y":298,"width":138,"height":12}},{"id":"4fc3e66c-22ed-4ea6-8220-40cd3a6639bd","block_type":"box","text":"Method","page_number":71,"box":{"x":116,"y":313,"width":57,"height":10}},{"id":"321a2275-52a8-4d77-ba38-5b14160d9143","block_type":"box","text":"d section below and the following discussion summarizing the in-kind method for further","page_number":71,"box":{"x":172,"y":313,"width":646,"height":12}},{"id":"c9d9eca5-eb23-40fc-9e89-86970a250d21","block_type":"box","text":"information on redeeming Creation Units of the Fund.","page_number":71,"box":{"x":117,"y":329,"width":400,"height":12}},{"id":"eb8eb659-ce8f-49f5-8299-aa4daf1810a4","block_type":"box","text":"The Fund publishes the designated portfolio of securities (including any portion of such securities for","page_number":71,"box":{"x":116,"y":362,"width":750,"height":12}},{"id":"cf197ab5-bdcf-4eb1-bf30-fec474bd2881","block_type":"box","text":"which cash may be substituted) that will be applicable to redemption requests received in proper form","page_number":71,"box":{"x":116,"y":377,"width":758,"height":12}},{"id":"b2b218e8-348f-43a7-a733-98ae29c57bed","block_type":"box","text":"(as defined below) on that day (“Fund Securities” or “Redemption Basket”), and an amount of cash (the","page_number":71,"box":{"x":117,"y":393,"width":770,"height":12}},{"id":"b0968f98-3a61-44a3-abc3-14fc58965696","block_type":"box","text":"“Cash Amount,” as described below) in order to effect redemptions of Creation Units of the Fund. Such","page_number":71,"box":{"x":116,"y":408,"width":768,"height":12}},{"id":"75a44050-780e-4295-86b1-b15d88067dd1","block_type":"box","text":"Fund Securities and Cash Amount will remain in effect until such time as the next announced","page_number":71,"box":{"x":117,"y":424,"width":695,"height":9}},{"id":"f3aa70a5-0cdf-49b3-bb74-3a0c46cf6d5c","block_type":"box","text":"composition of the Fund Securities and Cash Amount is made available. The Fund Securities and","page_number":71,"box":{"x":116,"y":439,"width":729,"height":12}},{"id":"935707ce-771f-4c7f-a430-96e28b04015c","block_type":"box","text":"Cash Amount are subject to possible amendment or correction. Fund Securities received on","page_number":71,"box":{"x":117,"y":455,"width":687,"height":12}},{"id":"bc3b638c-e807-490a-acc3-dcf4ca6d29ef","block_type":"box","text":"redemption may not be identical to Deposit Securities that are applicable to creations of Creation Units.","page_number":71,"box":{"x":117,"y":470,"width":770,"height":12}},{"id":"5ab83793-2f27-4995-9df5-ee97823f4b76","block_type":"box","text":"Procedures and requirements governing redemption transactions are set forth in the handbook for","page_number":71,"box":{"x":117,"y":486,"width":731,"height":12}},{"id":"a9259337-a400-405b-8971-1c3510565740","block_type":"box","text":"Authorized Participants and may change from time to time.","page_number":71,"box":{"x":116,"y":501,"width":441,"height":12}},{"id":"2235f2aa-1d8a-4350-877f-d48503308b8f","block_type":"box","text":"Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a","page_number":71,"box":{"x":117,"y":534,"width":713,"height":12}},{"id":"fd77d07e-9fc5-4a04-b3bd-ab857c34f958","block_type":"box","text":"Creation Unit generally consist of Fund Securities, plus the Cash Amount, which is an amount equal to","page_number":71,"box":{"x":117,"y":550,"width":765,"height":12}},{"id":"c3521057-335c-4228-8d87-cbb9e367cead","block_type":"box","text":"the difference between the net asset value of the shares being redeemed, as next determined after the","page_number":71,"box":{"x":116,"y":565,"width":768,"height":12}},{"id":"980d7293-5441-417f-9b00-725572325d38","block_type":"box","text":"receipt of a redemption request in proper form, and the value of Fund Securities, less a redemption","page_number":71,"box":{"x":117,"y":581,"width":739,"height":12}},{"id":"29e2e720-5a04-48ef-bf8a-33c1fb98f9d4","block_type":"box","text":"transaction fee (as described below).","page_number":71,"box":{"x":116,"y":596,"width":279,"height":12}},{"id":"52da44ca-ef32-405b-9679-dfc9f626d341","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":71,"box":{"x":116,"y":629,"width":762,"height":12}},{"id":"6e273daf-b50c-41f4-ac9c-713f94575810","block_type":"box","text":"certain circumstances, including: (i) when the delivery of a Fund Security to the Authorized Participant","page_number":71,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"ee11aa93-2f28-4f3d-8e7b-231afa4ab607","block_type":"box","text":"(or to an investor on whose behalf the Authorized Participant is acting) would be restricted under","page_number":71,"box":{"x":117,"y":660,"width":716,"height":12}},{"id":"d01cb958-3c02-4464-b562-5d78a76ef943","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":71,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"02a1f95f-91ed-401c-adc7-d2ac63496843","block_type":"box","text":"Security to the Authorized Participant would result in the disposition of the Fund Security by the","page_number":71,"box":{"x":116,"y":691,"width":706,"height":12}},{"id":"e3e14700-78a2-431c-9a13-e0bed7acee8b","block_type":"box","text":"Authorized Participant due to restrictions under applicable securities or other local laws, (iii) when the","page_number":71,"box":{"x":116,"y":707,"width":750,"height":12}},{"id":"acdbb48a-d0ae-4f51-89b5-bd3617248866","block_type":"box","text":"delivery of a Fund Security to the Authorized Participant would result in unfavorable tax treatment,","page_number":71,"box":{"x":116,"y":722,"width":726,"height":12}},{"id":"bf587596-8f77-4c94-b78d-0cb1749f59a1","block_type":"box","text":"(iv) when a Fund Security cannot be settled or otherwise delivered in time to facilitate an in-kind","page_number":71,"box":{"x":117,"y":738,"width":708,"height":12}},{"id":"e291052b-96c5-49de-b91e-bda778188e68","block_type":"box","text":"redemption, or (v) in certain other situations. The amount of cash paid out in such cases will be","page_number":71,"box":{"x":117,"y":753,"width":704,"height":12}},{"id":"6357c62e-e944-4916-9ac3-46ffd0449b98","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":71,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"06f3799c-33a4-40d8-be4e-18a69ff9f590","block_type":"box","text":"Securities have a value greater than the NAV of the shares, a compensating cash payment equal to","page_number":71,"box":{"x":116,"y":784,"width":740,"height":12}},{"id":"f196be35-d83b-4e81-8d8b-09ed68ce90cf","block_type":"box","text":"the difference is required to be made by or through an Authorized Participant by the redeeming","page_number":71,"box":{"x":116,"y":800,"width":704,"height":12}},{"id":"2cc0c0b8-74cc-40ee-9cbe-70496fb82693","block_type":"box","text":"shareholder. The Fund generally redeems Creation Units for Fund Securities, but the Fund reserves","page_number":71,"box":{"x":116,"y":815,"width":743,"height":12}},{"id":"ae3b06cc-3f09-4a01-9606-f5d2d340d195","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":71,"box":{"x":116,"y":831,"width":759,"height":12}},{"id":"00f4b7ba-d28c-43ec-b6b7-61db7d409bb9","block_type":"box","text":"provide such redeeming Authorized Participant a portfolio of securities that differs from the exact","page_number":71,"box":{"x":117,"y":846,"width":720,"height":12}},{"id":"92f617af-312d-48a0-9ff5-fd95e2ffb670","block_type":"box","text":"composition of the Fund Securities, but does not differ in NAV. The Redemption Basket may also be","page_number":71,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"5f6be664-fdd9-4923-8a78-bdd621cc2d81","block_type":"box","text":"modified to minimize the Cash Component by redistributing the cash to the Fund Securities portion of","page_number":71,"box":{"x":117,"y":877,"width":756,"height":12}},{"id":"a844a5fd-3ba7-4470-9308-e4f8f668c76c","block_type":"box","text":"68","page_number":71,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"64f6de34-524f-40b0-ae16-e4303e4d7a87","block_type":"box","text":"NM1026U-6042785-71/259","page_number":71,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0e92ed19-1515-49a4-8c6a-501e560811d2","block_type":"box","text":"the Redemption Basket through systematically rounding. The rounding methodology allows position","page_number":72,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"731a2afd-6ed2-4447-8e6c-b91370fdc625","block_type":"box","text":"sizes of securities in the Fund Securities to be “rounded up,” while limiting the maximum allowed","page_number":72,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"04d1af0b-a90e-48bb-aa37-9aa40ba849f2","block_type":"box","text":"percentage change in weight and share quantity of any given security in the Redemption Basket.","page_number":72,"box":{"x":117,"y":118,"width":722,"height":12}},{"id":"4dab5884-ac30-4f1b-b0a3-9e8a52e75a84","block_type":"box","text":"Redemption Baskets may also be modified to position a fund towards a forward index rebalance to","page_number":72,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"0b12f7b1-849d-4b8b-b5c2-ac280beb0afb","block_type":"box","text":"reflect revisions that account for index additions, deletions, and re-weights.","page_number":72,"box":{"x":117,"y":149,"width":559,"height":12}},{"id":"6060d625-6879-4888-8dcb-91348fc14bec","block_type":"box","text":"Cash Redemption Method.","page_number":72,"box":{"x":116,"y":180,"width":211,"height":12}},{"id":"b8b2ce49-d0ea-40c3-9236-be342170daa2","block_type":"box","text":"Although the Trust does not generally permit full cash redemptions of","page_number":72,"box":{"x":328,"y":180,"width":523,"height":12}},{"id":"484635b8-a159-4f37-b40e-6622b96cf66c","block_type":"box","text":"Creation Units of its funds, when partial or full cash redemptions of Creation Units are available or","page_number":72,"box":{"x":117,"y":196,"width":729,"height":11}},{"id":"0b9d0f6a-4a33-43d3-8cd9-f8c1b542ec9d","block_type":"box","text":"specified for the Fund, they will be effected in essentially the same manner as in-kind redemptions","page_number":72,"box":{"x":116,"y":211,"width":734,"height":12}},{"id":"4f9fc7dc-e095-4c6a-98fc-e492120624ee","block_type":"box","text":"thereof. In the case of partial or full cash redemption, the Authorized Participant receives the cash","page_number":72,"box":{"x":116,"y":227,"width":731,"height":11}},{"id":"52bcc210-f8dd-489f-8a94-f7c8d46a3e92","block_type":"box","text":"equivalent of the Fund Securities it would otherwise receive through an in-kind redemption, plus the","page_number":72,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"a3a6be90-2585-45aa-86bf-18ec0b140978","block_type":"box","text":"same Cash Amount to be paid to an in-kind redeemer.","page_number":72,"box":{"x":116,"y":258,"width":409,"height":11}},{"id":"1a8faa1b-c860-4fad-aa6e-46f48b4c38c8","block_type":"box","text":"Costs Associated with Redemption Transactions. A","page_number":72,"box":{"x":116,"y":289,"width":400,"height":11}},{"id":"5b71830f-1fdf-4b11-95cf-82e9b48ba8bc","block_type":"box","text":"A standard redemption transaction fee is","page_number":72,"box":{"x":516,"y":289,"width":307,"height":12}},{"id":"efbd4dab-d8ba-4af1-a963-a236c34491ce","block_type":"box","text":"imposed to offset transfer and other transaction costs that may be incurred by the Fund.","page_number":72,"box":{"x":117,"y":304,"width":657,"height":12}},{"id":"b083a4a4-7dc6-4f1e-a202-aa30e9d89d81","block_type":"box","text":"As described above, under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of","page_number":72,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"f61e311a-6f6e-4a30-abeb-7ec452dcf79e","block_type":"box","text":"BFA, to perform certain ETF Services. BRIL will receive from an Authorized Participant a standard","page_number":72,"box":{"x":117,"y":351,"width":732,"height":12}},{"id":"82dab340-1578-4457-bf2e-b76fd9e98938","block_type":"box","text":"transaction fee on each redemption order, which consists of (1) the ETF Servicing Fee and (2) Custody","page_number":72,"box":{"x":116,"y":366,"width":771,"height":12}},{"id":"d04f60e4-ac22-4176-81ac-3cc1c3eb3bbf","block_type":"box","text":"Transaction Costs. BRIL is entitled to retain the ETF Servicing Fee pursuant to the ETF Services","page_number":72,"box":{"x":116,"y":382,"width":723,"height":12}},{"id":"79b26eb4-47d7-41d3-a9f0-306d511e79db","block_type":"box","text":"Agreement, but BRIL will reimburse any Custody Transaction Costs to the Fund custodian according to","page_number":72,"box":{"x":116,"y":397,"width":771,"height":12}},{"id":"42c7b9a0-0f1e-4d20-baab-96d5e1140611","block_type":"box","text":"the amounts invoiced by such custodian.","page_number":72,"box":{"x":116,"y":413,"width":308,"height":12}},{"id":"a69b0e06-48aa-490b-bd0b-9d8a8802d6c3","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being","page_number":72,"box":{"x":116,"y":444,"width":704,"height":12}},{"id":"e123e022-37a5-4656-bd3a-fe07244de630","block_type":"box","text":"redeemed, which amount will vary among different BlackRock-advised funds based on a number of","page_number":72,"box":{"x":117,"y":459,"width":741,"height":12}},{"id":"0acba66f-fea5-40f0-9cc0-988808774479","block_type":"box","text":"factors, including the complexity of the order and the types of securities or instruments included in a","page_number":72,"box":{"x":116,"y":475,"width":745,"height":12}},{"id":"40106679-33ad-4b80-9571-8c682554b76f","block_type":"box","text":"fund’s Redemption Basket, among other variables. The ETF Servicing Fee may be equal to zero in","page_number":72,"box":{"x":116,"y":490,"width":739,"height":12}},{"id":"71e6479f-b56d-46dc-ab71-e88ef5dd1391","block_type":"box","text":"certain instances, such as for redemption transactions that consist solely of cash. The actual Custody","page_number":72,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"200aab32-276a-4837-9d5c-9c41773cc413","block_type":"box","text":"Transaction Costs vary per order based on the number of trades, underlying markets, and settlement","page_number":72,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"43e1226e-0962-40bf-9cd5-d1ce61d4899b","block_type":"box","text":"locations associated with the redemption of a Creation Unit. The following table sets forth the Fund’s","page_number":72,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"f4bf1b2e-d547-40af-aa07-ba79c7842a0d","block_type":"box","text":"standard redemption transaction fee that would have been charged as of October 1, 2026, although","page_number":72,"box":{"x":116,"y":552,"width":745,"height":12}},{"id":"65b6ad92-89c8-42bc-b9b6-1624a0dfdedd","block_type":"box","text":"the actual fee charged to an Authorized Participant in connection with a redemption order will vary over","page_number":72,"box":{"x":116,"y":568,"width":770,"height":12}},{"id":"254eba18-a285-4342-8e8b-bde90e92ad03","block_type":"box","text":"time depending on the factors discussed above, and may be higher than the fee set forth below.","page_number":72,"box":{"x":116,"y":583,"width":718,"height":12}},{"id":"dcbedea6-9fa6-4e0a-bd2a-c01bc9dce591","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":72,"box":{"x":117,"y":614,"width":761,"height":12}},{"id":"96631320-98a6-44db-a703-04c85df7bf59","block_type":"box","text":"if a redemption transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":72,"box":{"x":117,"y":630,"width":754,"height":12}},{"id":"0cf941a1-ecef-4d59-ad48-5fd9f0819a1c","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":72,"box":{"x":117,"y":645,"width":762,"height":12}},{"id":"e1ee554a-dae2-4071-99ab-8340adb478d2","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":72,"box":{"x":116,"y":661,"width":697,"height":12}},{"id":"25cd6bf7-bbfe-458d-972c-d746893f6dd5","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":72,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"366c32c3-d947-4fc8-9031-8d90e2beb68b","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":72,"box":{"x":117,"y":692,"width":738,"height":12}},{"id":"52ca9b39-64f2-4f20-a0e4-502ab656526b","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":72,"box":{"x":116,"y":707,"width":695,"height":12}},{"id":"ae48f722-571e-4610-aa43-611390ee1bb5","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":72,"box":{"x":117,"y":723,"width":764,"height":12}},{"id":"f94a5716-44b3-4c5d-9070-a241a0c35d11","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":72,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"7b9442c7-a4d0-4480-8d22-4663d43a07b9","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":72,"box":{"x":116,"y":754,"width":729,"height":12}},{"id":"725a1968-c633-4919-b3b1-a30dddd479c8","block_type":"box","text":"amounts shown below.","page_number":72,"box":{"x":116,"y":769,"width":169,"height":10}},{"id":"340bf8a8-1e6b-4006-85ad-a33bfc4bb936","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Fund Securities from the Fund to","page_number":72,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"d3a92578-4775-4cae-afbe-8085652763f3","block_type":"box","text":"their account on their order. Certain fees/costs associated with redemption transactions may be waived","page_number":72,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"2155e19c-371b-42cd-b12d-dcaa23ac58f3","block_type":"box","text":"in certain circumstances. Investors who use the services of a broker or other financial intermediary to","page_number":72,"box":{"x":117,"y":831,"width":754,"height":12}},{"id":"ce7287d9-aff8-4ef0-85d6-44be25478245","block_type":"box","text":"dispose of Fund shares may be charged a fee for such services.","page_number":72,"box":{"x":116,"y":847,"width":483,"height":12}},{"id":"3453f51b-b803-4fdf-9e25-fb52dede478d","block_type":"box","text":"69","page_number":72,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"939256f1-a47c-4d19-8c3f-6341020120c7","block_type":"box","text":"NM1026U-6042785-72/259","page_number":72,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"393e1446-a2ac-4e6e-8324-d4a403892658","block_type":"box","text":"The following table sets forth the Fund’s standard redemption transaction fee that would have been","page_number":73,"box":{"x":116,"y":87,"width":741,"height":12}},{"id":"32e89f16-c9b5-41e2-a537-32c05008785c","block_type":"box","text":"charged as of October 1, 2026 and maximum additional charge (as described above):","page_number":73,"box":{"x":116,"y":102,"width":642,"height":13}},{"id":"4909bf60-cd85-4298-a3f8-b54cba2a33e4","block_type":"box","text":"Standard","page_number":73,"box":{"x":334,"y":130,"width":57,"height":8}},{"id":"db0d601c-f880-4522-a8de-e13fca339ca4","block_type":"box","text":"Redemption","page_number":73,"box":{"x":324,"y":141,"width":76,"height":9}},{"id":"4047d571-3c30-46af-a121-5ce75359f00e","block_type":"box","text":"Transaction Fee*","page_number":73,"box":{"x":308,"y":151,"width":108,"height":8}},{"id":"073e625a-5375-4f7f-943d-fc4693079f18","block_type":"box","text":"Maximum Additional","page_number":73,"box":{"x":560,"y":141,"width":130,"height":7}},{"id":"f77e1fc8-80dc-4434-883a-a34fd5b05104","block_type":"box","text":"Charge**","page_number":73,"box":{"x":597,"y":151,"width":56,"height":10}},{"id":"1686fd26-49c3-4c29-b03b-f674120f8d62","block_type":"box","text":"$567.50 2%","page_number":73,"box":{"x":333,"y":169,"width":309,"height":11}},{"id":"52056aca-aca8-4617-91cd-741ea2edb6b6","block_type":"box","text":"* The standard redemption transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The","page_number":73,"box":{"x":143,"y":219,"width":695,"height":10}},{"id":"7c574853-c9f9-473d-9644-e88eb97b073b","block_type":"box","text":"standard redemption transaction fee may vary over time depending on the factors discussed above, and may be higher","page_number":73,"box":{"x":170,"y":232,"width":707,"height":10}},{"id":"1d6087c0-9d2f-45fd-95b7-f834dc8e6423","block_type":"box","text":"than the fee set forth above.","page_number":73,"box":{"x":170,"y":245,"width":166,"height":8}},{"id":"02c0422a-51f9-4295-a72d-966fd92a5545","block_type":"box","text":"**","page_number":73,"box":{"x":143,"y":258,"width":6,"height":2}},{"id":"5b417ee9-d878-4e67-875d-01265c99c250","block_type":"box","text":"As a percentage of the net asset value per Creation Unit.","page_number":73,"box":{"x":170,"y":258,"width":337,"height":10}},{"id":"a01995b7-e8e7-4198-a0c1-70ceadd2a97a","block_type":"box","text":"Placement of Redemption Orders.","page_number":73,"box":{"x":117,"y":287,"width":269,"height":12}},{"id":"13d9fc8a-a826-4aa5-8c55-17e4f81548e9","block_type":"box","text":"Redemption requests for Creation Units of the Fund must be","page_number":73,"box":{"x":387,"y":287,"width":460,"height":12}},{"id":"1cf8ff40-29aa-4e36-9ae2-e9b4e225165d","block_type":"box","text":"submitted to the Distributor or its agent by or through an Authorized Participant. An Authorized","page_number":73,"box":{"x":116,"y":303,"width":705,"height":12}},{"id":"c502ff02-cf75-496d-9795-6ea9e42f1eae","block_type":"box","text":"Participant must submit an irrevocable request to redeem shares of the Fund generally before","page_number":73,"box":{"x":117,"y":318,"width":701,"height":12}},{"id":"626ab2d7-1240-40a8-94cb-83d6adcfbad0","block_type":"box","text":"4:00 p.m., Eastern time on any Business Day in order to receive that day’s NAV. On days when the","page_number":73,"box":{"x":116,"y":334,"width":742,"height":12}},{"id":"af99fb66-d622-41ce-acba-2e302b4947f1","block_type":"box","text":"Listing Exchange closes earlier than normal, the Fund may require orders to redeem Creation Units to","page_number":73,"box":{"x":117,"y":349,"width":761,"height":12}},{"id":"7916cd60-b9ce-4b1b-80fd-4cf883c4c971","block_type":"box","text":"be placed earlier that day. Investors, other than Authorized Participants, are responsible for making","page_number":73,"box":{"x":117,"y":365,"width":741,"height":12}},{"id":"cd8df019-4fbb-4b33-8fea-81d542e5e873","block_type":"box","text":"arrangements for a redemption request to be made through an Authorized Participant. The Distributor","page_number":73,"box":{"x":116,"y":380,"width":760,"height":12}},{"id":"d17eb24a-1417-4bb1-86db-4f4b211ef5d9","block_type":"box","text":"or its agent will provide a list of current Authorized Participants upon request.","page_number":73,"box":{"x":116,"y":396,"width":576,"height":12}},{"id":"4f80da22-0bb2-41c7-9a9d-22513d5737c1","block_type":"box","text":"The Authorized Participant must transmit the request for redemption in the form required by the Fund","page_number":73,"box":{"x":116,"y":427,"width":755,"height":12}},{"id":"8ff7818a-96eb-4205-a292-989d78aebeed","block_type":"box","text":"to the Distributor or its agent in accordance with procedures set forth in the Authorized Participant","page_number":73,"box":{"x":116,"y":442,"width":730,"height":12}},{"id":"c2949f5c-5c89-4f1e-89b3-1fc0119ca832","block_type":"box","text":"Agreement. Investors should be aware that their particular broker may not have executed an","page_number":73,"box":{"x":116,"y":458,"width":691,"height":12}},{"id":"8cf7f539-a0b8-4e08-be2c-fa7bf20bc098","block_type":"box","text":"Authorized Participant Agreement and that, therefore, requests to redeem Creation Units may have to","page_number":73,"box":{"x":116,"y":473,"width":761,"height":12}},{"id":"394ea038-eaed-4b5d-afe8-1c77949077d2","block_type":"box","text":"be placed by the investor’s broker through an Authorized Participant who has executed an Authorized","page_number":73,"box":{"x":117,"y":489,"width":758,"height":12}},{"id":"1b0a6610-9b23-4ecc-8f27-1514cfa3ec63","block_type":"box","text":"Participant Agreement. At any time, only a limited number of broker-dealers will have an Authorized","page_number":73,"box":{"x":117,"y":504,"width":743,"height":12}},{"id":"a99faace-1ef8-4e0b-820e-5846bacc1567","block_type":"box","text":"Participant Agreement in effect. Investors making a redemption request should be aware that such","page_number":73,"box":{"x":117,"y":520,"width":735,"height":12}},{"id":"a7bc3b93-fa34-4391-940d-03d2467fa3f9","block_type":"box","text":"request must be in the form specified by such Authorized Participant. Investors making a request to","page_number":73,"box":{"x":117,"y":535,"width":742,"height":12}},{"id":"9b0736c9-9f7a-4d5e-b306-27bf62158d69","block_type":"box","text":"redeem Creation Units should allow sufficient time to permit proper submission of the request by an","page_number":73,"box":{"x":117,"y":551,"width":743,"height":12}},{"id":"74df2306-46d5-4ed6-af8f-6fc4f3916bba","block_type":"box","text":"Authorized Participant and transfer of the shares to the Fund’s transfer agent; such investors should","page_number":73,"box":{"x":116,"y":566,"width":748,"height":12}},{"id":"ffec12bb-e6fd-45f2-9c1b-90f91b5a2cbc","block_type":"box","text":"allow for the additional time that may be required to effect redemptions through their banks, brokers or","page_number":73,"box":{"x":116,"y":582,"width":764,"height":12}},{"id":"592ff795-1732-43fc-a310-918cebd7a7f6","block_type":"box","text":"other financial intermediaries if such intermediaries are not Authorized Participants.","page_number":73,"box":{"x":116,"y":597,"width":623,"height":12}},{"id":"488d3ecd-5b39-46c8-9a17-b74f3a7c8f93","block_type":"box","text":"A redemption request is considered to be in “proper form” if: (i) an Authorized Participant has","page_number":73,"box":{"x":116,"y":628,"width":694,"height":12}},{"id":"524bf13c-bcde-4159-a2ef-e21df33a8121","block_type":"box","text":"transferred or caused to be transferred to the Fund’s transfer agent the Creation Unit redeemed","page_number":73,"box":{"x":116,"y":644,"width":715,"height":12}},{"id":"a5d9ccf4-fc54-4cb0-b500-3283af832621","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":73,"box":{"x":116,"y":659,"width":745,"height":12}},{"id":"994d62a7-e741-45a4-9e05-17cb983143ff","block_type":"box","text":"any Business Day on which the redemption request is submitted; (ii) a request in form satisfactory to","page_number":73,"box":{"x":116,"y":675,"width":745,"height":12}},{"id":"c730b78f-370e-4c72-91f3-7ea8fd808ab4","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":73,"box":{"x":116,"y":690,"width":759,"height":12}},{"id":"aea1a941-27ca-4cde-b7c5-e3d5196ffcf3","block_type":"box","text":"another redeeming investor within the time periods specified above; and (iii) all other procedures set","page_number":73,"box":{"x":116,"y":706,"width":743,"height":12}},{"id":"b71edf72-b3af-4522-9dde-c305ad8279a9","block_type":"box","text":"forth in the Authorized Participant Agreement are properly followed.","page_number":73,"box":{"x":116,"y":721,"width":500,"height":12}},{"id":"eddaf3e2-c4a8-452d-8cef-6f64b92bdcfe","block_type":"box","text":"Upon receiving a redemption request, the Distributor or its agent shall notify the Fund and the Fund’s","page_number":73,"box":{"x":117,"y":752,"width":748,"height":12}},{"id":"c926284e-bf8f-4a2b-a18a-e66198178eaa","block_type":"box","text":"transfer agent of such redemption request. The tender of an investor’s shares for redemption and the","page_number":73,"box":{"x":116,"y":768,"width":750,"height":12}},{"id":"a342f61c-d127-446c-9b3f-cc041c5a83f3","block_type":"box","text":"distribution of the securities and/or cash included in the redemption payment made in respect of","page_number":73,"box":{"x":116,"y":783,"width":711,"height":12}},{"id":"bf477e59-4ed2-446e-82e0-ef3bb311a07c","block_type":"box","text":"Creation Units redeemed will be made through DTC and the relevant Authorized Participant to the","page_number":73,"box":{"x":117,"y":799,"width":726,"height":12}},{"id":"37ba2918-2c96-4a84-af52-32317b54dc20","block_type":"box","text":"Beneficial Owner thereof as recorded on the book-entry system of DTC or the DTC Participant through","page_number":73,"box":{"x":117,"y":814,"width":760,"height":12}},{"id":"ef32977c-a47d-45cf-8c94-d960a74994c6","block_type":"box","text":"which such investor holds, as the case may be, or by such other means specified by the Authorized","page_number":73,"box":{"x":116,"y":830,"width":744,"height":12}},{"id":"c5890fdd-7eb6-4848-8318-41124c02919d","block_type":"box","text":"Participant submitting the redemption request.","page_number":73,"box":{"x":117,"y":846,"width":347,"height":11}},{"id":"41fb1522-6651-439e-840a-fd6be36539d6","block_type":"box","text":"70","page_number":73,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"461baeb0-bdac-4761-b153-9d337531818d","block_type":"box","text":"NM1026U-6042785-73/259","page_number":73,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"56b9d85b-d26b-4385-bc04-9a18220b6f2b","block_type":"box","text":"A redeeming Authorized Participant, whether on its own account or acting on behalf of a Beneficial","page_number":74,"box":{"x":116,"y":87,"width":736,"height":12}},{"id":"48bf26ea-6e62-4a98-983c-85659762fbf7","block_type":"box","text":"Owner, must maintain appropriate security arrangements with a qualified broker-dealer, bank or other","page_number":74,"box":{"x":116,"y":102,"width":759,"height":13}},{"id":"a227654e-00e4-4bbd-9a2e-dbaf64baec2d","block_type":"box","text":"custody providers in each jurisdiction in which any of the portfolio securities are customarily traded, to","page_number":74,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"a6c0d3b9-eb19-4146-aca3-3ba53b11228c","block_type":"box","text":"which account such portfolio securities will be delivered.","page_number":74,"box":{"x":116,"y":134,"width":421,"height":11}},{"id":"23e30ae3-42be-4962-bf61-bcd1c1e745a2","block_type":"box","text":"Deliveries of redemption proceeds by the Fund are generally made within one Business Day (","page_number":74,"box":{"x":117,"y":165,"width":694,"height":12}},{"id":"6c96257c-d9e9-4312-a2c5-03ab2bd88cd7","block_type":"box","text":"i.e.","page_number":74,"box":{"x":812,"y":165,"width":20,"height":9}},{"id":"fe1e9a1c-ce4b-4626-8e2c-8696674aacfd","block_type":"box","text":",","page_number":74,"box":{"x":835,"y":173,"width":8,"height":3}},{"id":"757ffe86-a2dc-4d43-85d1-c18cc87fcf9e","block_type":"box","text":"“T+1”). However, the Fund reserves the right to settle redemption transactions on a basis other than","page_number":74,"box":{"x":116,"y":180,"width":747,"height":12}},{"id":"185d9bec-5b23-46a8-b2ac-5fc4300b6c4a","block_type":"box","text":"T+1, including a shorter settlement period, if necessary or appropriate under the circumstances and","page_number":74,"box":{"x":116,"y":196,"width":744,"height":12}},{"id":"ec1e14ec-6768-4888-a108-7bae6691c231","block_type":"box","text":"compliant with applicable law. Delayed settlement may occur due to a number of different reasons,","page_number":74,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"f7b9085d-d92c-47a3-ad95-a3806ee31bad","block_type":"box","text":"including, without limitation, settlement cycles for the underlying securities, unscheduled market","page_number":74,"box":{"x":117,"y":227,"width":713,"height":12}},{"id":"66cc3d05-a16c-40c0-b77d-b01609d0ca4e","block_type":"box","text":"closings, an effort to link distribution to dividend record dates and ex-dates and newly announced","page_number":74,"box":{"x":116,"y":242,"width":726,"height":12}},{"id":"13a40ca9-c75c-4952-be11-af657ea4a4fb","block_type":"box","text":"holidays. For example, the Fund reserves the right to settle redemption transactions on a basis other","page_number":74,"box":{"x":117,"y":258,"width":751,"height":12}},{"id":"6bb8ce4f-0fb8-44cb-ac82-42ec73c49a02","block_type":"box","text":"than T+1 in order to accommodate non-U.S. market holiday schedules, the occurrence of a holiday in","page_number":74,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"289ada18-8f29-4439-8931-a765a4debc74","block_type":"box","text":"the U.S. bond market that is not a holiday observed in the U.S. equity market, to account for different","page_number":74,"box":{"x":116,"y":289,"width":753,"height":12}},{"id":"36efa1c9-6ba8-4d37-a77c-534c785b93b7","block_type":"box","text":"treatment among non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (","page_number":74,"box":{"x":116,"y":304,"width":696,"height":12}},{"id":"e50fcdd2-01c3-415a-947c-1fba43123a2d","block_type":"box","text":"i.e.","page_number":74,"box":{"x":813,"y":304,"width":21,"height":10}},{"id":"1a101eba-6806-4577-8c02-d2d4c7e8e50c","block_type":"box","text":", the","page_number":74,"box":{"x":837,"y":304,"width":36,"height":11}},{"id":"7bf16ae0-8878-4348-abf6-86addb108799","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":74,"box":{"x":117,"y":320,"width":769,"height":12}},{"id":"620be1a9-2c23-4f67-a948-8004f0713a3f","block_type":"box","text":"sold) and in certain other circumstances consistent with applicable law.","page_number":74,"box":{"x":116,"y":335,"width":532,"height":12}},{"id":"9dabcc80-cea8-4230-b499-2ace18857ee3","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":74,"box":{"x":117,"y":366,"width":711,"height":12}},{"id":"5d44915e-cc17-4c24-8c93-ac9daab2e73e","block_type":"box","text":"consecutive holidays, or the extended delivery cycles for transferring foreign investments to redeeming","page_number":74,"box":{"x":116,"y":382,"width":768,"height":12}},{"id":"c8b56742-7014-4d18-aeab-f921ee64393d","block_type":"box","text":"Authorized Participants prevents timely delivery of the foreign investment in response to a redemption","page_number":74,"box":{"x":116,"y":397,"width":760,"height":12}},{"id":"85c5b3b0-f642-4d26-85b4-5d5700474816","block_type":"box","text":"request, the Fund may delay delivery of the foreign investment more than seven days if the Fund","page_number":74,"box":{"x":117,"y":413,"width":723,"height":12}},{"id":"a4890db3-43bb-4083-8af9-118e9956d498","block_type":"box","text":"delivers the foreign investment as soon as practicable, but in no event later than 15 days.","page_number":74,"box":{"x":116,"y":428,"width":668,"height":12}},{"id":"bdb07e0f-a699-478e-ab04-8130cd43a6a3","block_type":"box","text":"If neither the Authorized Participant nor the Beneficial Owner on whose behalf the Authorized","page_number":74,"box":{"x":117,"y":459,"width":696,"height":12}},{"id":"10b40a45-bfe1-4342-acdc-a28a82f05a24","block_type":"box","text":"Participant is acting has appropriate arrangements to take delivery of Fund Securities in the applicable","page_number":74,"box":{"x":117,"y":475,"width":764,"height":12}},{"id":"ad2e52b3-d2fc-42b7-86e5-7100357e3a25","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":74,"box":{"x":117,"y":490,"width":748,"height":12}},{"id":"9be51ac3-d545-444b-9d94-6ace270f93da","block_type":"box","text":"effect deliveries of Fund Securities in such jurisdiction, the Fund may in its discretion exercise its option","page_number":74,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"f31139c8-6548-4b03-8270-9a3f429b25cb","block_type":"box","text":"to redeem such shares in cash, and the Beneficial Owner will be required to receive its redemption","page_number":74,"box":{"x":116,"y":521,"width":737,"height":12}},{"id":"4f33e618-82f8-4b2c-a11b-31f9e3cdfefe","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":74,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"19dacd70-4a23-4af4-9c97-3563cfc957cc","block_type":"box","text":"its shares based on the NAV of the Fund next determined after the redemption request is received in","page_number":74,"box":{"x":117,"y":552,"width":751,"height":12}},{"id":"bb0f56e7-3da0-4c03-a672-b2d907227689","block_type":"box","text":"proper form (minus a redemption transaction fee and additional charges specified above to offset the","page_number":74,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"e8666e4d-35d6-487e-af01-6410270749af","block_type":"box","text":"Fund’s brokerage and other transaction costs associated with the disposition of Fund Securities).","page_number":74,"box":{"x":117,"y":583,"width":724,"height":12}},{"id":"9d7bb516-4f97-450d-b214-4d2fd23203de","block_type":"box","text":"Redemptions of shares for Fund Securities will be subject to compliance with applicable U.S. federal","page_number":74,"box":{"x":117,"y":599,"width":749,"height":12}},{"id":"84b43bf3-c70f-4bfc-9e93-654c01c2aa2e","block_type":"box","text":"and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves","page_number":74,"box":{"x":116,"y":614,"width":772,"height":12}},{"id":"dec6fa2e-51ab-46db-b8a7-287eeaa9003d","block_type":"box","text":"the right to redeem Creation Units for cash to the extent that the Fund cannot lawfully deliver specific","page_number":74,"box":{"x":116,"y":630,"width":753,"height":12}},{"id":"3ffdfd33-6a9d-4c4c-924a-961b17004a61","block_type":"box","text":"Fund Securities upon redemptions or cannot do so without first registering the Fund Securities under","page_number":74,"box":{"x":117,"y":645,"width":751,"height":12}},{"id":"dd0f36d4-6aaf-491d-bb67-4a41498763b3","block_type":"box","text":"such laws.","page_number":74,"box":{"x":116,"y":661,"width":77,"height":9}},{"id":"062ea123-2a65-4a4e-8188-0ed824f58e85","block_type":"box","text":"To the extent contemplated by an Authorized Participant’s agreement with the Distributor or its agent,","page_number":74,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"470d5854-6f73-4d80-8619-09dcba6b461a","block_type":"box","text":"in the event an Authorized Participant has submitted a redemption request in proper form but is unable","page_number":74,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"4b112cdc-9def-492d-829f-fa4f9f2ba565","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":74,"box":{"x":116,"y":723,"width":748,"height":12}},{"id":"3a088c89-0a0b-4713-850c-8bbbc0c21b6a","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":74,"box":{"x":117,"y":738,"width":723,"height":12}},{"id":"e6591349-cc1a-4299-9196-2447040dbd71","block_type":"box","text":"request, the Distributor or its agent will accept the redemption request in reliance on the undertaking by","page_number":74,"box":{"x":117,"y":754,"width":765,"height":12}},{"id":"ea537f28-5ad9-4f67-9a6d-538afe318e12","block_type":"box","text":"the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be","page_number":74,"box":{"x":116,"y":769,"width":765,"height":12}},{"id":"6a02ebaa-3795-4e37-b21c-d07b53ed6256","block_type":"box","text":"secured by the Authorized Participant’s delivery and maintenance of collateral as set forth in the","page_number":74,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"9c3f2f26-c036-4b49-bdab-ae1074abf484","block_type":"box","text":"handbook for Authorized Participants. Such collateral must be delivered no later than the time specified","page_number":74,"box":{"x":117,"y":800,"width":765,"height":12}},{"id":"333ac614-a476-4d8c-8bf1-c9cb374f970c","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":74,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"43f96b3f-902c-4272-89e7-a465bf7b3d5f","block_type":"box","text":"request and shall be held by State Street and marked-to-market daily. The fees of State Street and any","page_number":74,"box":{"x":117,"y":831,"width":769,"height":12}},{"id":"3dbcf9e2-9ea7-4c9f-baa8-57edd61cd276","block_type":"box","text":"sub-custodians in respect of the delivery, maintenance and redelivery of the collateral shall be payable","page_number":74,"box":{"x":116,"y":847,"width":766,"height":12}},{"id":"04675750-cf23-4778-b459-bd08b96afd0a","block_type":"box","text":"by the Authorized Participant. The Authorized Participant Agreement permits the Fund to acquire","page_number":74,"box":{"x":117,"y":862,"width":723,"height":12}},{"id":"afc522bb-b188-408e-8490-bc8ca4728343","block_type":"box","text":"shares of the Fund at any time and subjects the Authorized Participant to liability for any shortfall","page_number":74,"box":{"x":116,"y":878,"width":722,"height":12}},{"id":"1d6b6d75-ce5c-484f-abea-47375013d134","block_type":"box","text":"71","page_number":74,"box":{"x":491,"y":909,"width":14,"height":8}},{"id":"9d68204a-1031-46b0-bca7-84ae29b14874","block_type":"box","text":"NM1026U-6042785-74/259","page_number":74,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"02871e63-7c6b-4b33-bf9f-3fe11bc3f98d","block_type":"box","text":"between the aggregate of the cost to the Fund of purchasing such shares, plus the value of the Cash","page_number":75,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"0dfea55b-3563-4967-85c3-03b092e4518a","block_type":"box","text":"Amount, and the value of the collateral together with liability for related brokerage and other charges.","page_number":75,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"ed40503d-7019-4112-ad62-f5c69e58a918","block_type":"box","text":"Because the portfolio securities of the Fund may trade on exchange(s) on days that the Listing","page_number":75,"box":{"x":117,"y":134,"width":705,"height":12}},{"id":"a97a2dee-e157-461e-8080-1d80830634af","block_type":"box","text":"Exchange is closed or are otherwise not Business Days for the Fund, shareholders may not be able to","page_number":75,"box":{"x":117,"y":149,"width":763,"height":12}},{"id":"6f727c6b-8d34-40de-816c-369986b3e271","block_type":"box","text":"redeem their shares of the Fund, or purchase or sell shares of the Fund on the Listing Exchange on","page_number":75,"box":{"x":117,"y":165,"width":744,"height":12}},{"id":"3728aa36-0d41-4b8b-a1c5-d4d2756ce13d","block_type":"box","text":"days when the NAV of the Fund could be significantly affected by events in the relevant non-U.S.","page_number":75,"box":{"x":116,"y":180,"width":725,"height":12}},{"id":"2db79c91-feed-4832-b422-7a9dc09cab9a","block_type":"box","text":"markets.","page_number":75,"box":{"x":117,"y":196,"width":68,"height":9}},{"id":"303ecd5f-6d98-41e0-b6cb-50f21ba4b2b9","block_type":"box","text":"The right of redemption may be suspended or the date of payment postponed with respect to the Fund:","page_number":75,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"23e6e4f2-f485-497b-85eb-cd1f062a8578","block_type":"box","text":"(i) for any period during which the Listing Exchange is closed (other than customary weekend and","page_number":75,"box":{"x":117,"y":242,"width":729,"height":12}},{"id":"86c08cc1-8baa-4b8a-af82-4778fae93fc5","block_type":"box","text":"holiday closings); (ii) for any period during which trading on the Listing Exchange is suspended or","page_number":75,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"90d96d27-6c5d-4d35-9d51-f107072b2def","block_type":"box","text":"restricted; (iii) for any period during which an emergency exists as a result of which disposal of the","page_number":75,"box":{"x":117,"y":273,"width":732,"height":12}},{"id":"02c87100-1053-49fc-9d0b-b9604a2f74f2","block_type":"box","text":"shares of the Fund’s portfolio securities or determination of its net asset value is not reasonably","page_number":75,"box":{"x":116,"y":289,"width":714,"height":12}},{"id":"72eb9445-72fb-467a-abbd-056ce767f6de","block_type":"box","text":"practicable; or (iv) in such other circumstance as is permitted by the SEC.","page_number":75,"box":{"x":117,"y":304,"width":551,"height":12}},{"id":"16612dc8-edbc-47c6-85f7-5d0cb46b136d","block_type":"box","text":"Custom Baskets.","page_number":75,"box":{"x":116,"y":335,"width":135,"height":10}},{"id":"4ff13093-3168-4593-a6fd-2a2d1e404a90","block_type":"box","text":"Creation and redemption baskets may differ and the Fund may accept “custom","page_number":75,"box":{"x":252,"y":335,"width":595,"height":12}},{"id":"8bdd5e18-121e-4b54-9dd1-ca6db4d9765a","block_type":"box","text":"baskets.” A custom basket may include any of the following: (i) a basket that is composed of a","page_number":75,"box":{"x":117,"y":351,"width":702,"height":12}},{"id":"b189265c-5ea0-4b01-b5ac-f0e0a8b4691c","block_type":"box","text":"non-representative selection of the Fund’s portfolio holdings; (ii) a representative basket that is","page_number":75,"box":{"x":117,"y":366,"width":706,"height":12}},{"id":"dd6b0aa6-9463-4389-8c28-223d953b529d","block_type":"box","text":"different from the initial basket used in transactions on the same business day; or (iii) a basket that","page_number":75,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"7df76d43-7cd9-4a42-bc41-ab07136e34e8","block_type":"box","text":"contains bespoke cash substitutions for a single","page_number":75,"box":{"x":116,"y":397,"width":361,"height":12}},{"id":"7304bdaf-f823-4e85-ba13-b57d35dc5b15","block_type":"box","text":"Authorized Participant. The Fund has adopted policies and procedures that govern the construction","page_number":75,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"3693224f-83b4-4388-99a7-1d020bae3ea2","block_type":"box","text":"and acceptance of baskets, including heightened requirements for certain types of custom baskets.","page_number":75,"box":{"x":116,"y":444,"width":741,"height":12}},{"id":"963dc65d-e288-4a08-a1ba-2f146d7b8ec9","block_type":"box","text":"Such policies and procedures provide the parameters for the construction and acceptance of custom","page_number":75,"box":{"x":116,"y":459,"width":752,"height":12}},{"id":"16f99f75-359d-4c70-bcf8-389ae2a47c33","block_type":"box","text":"baskets that are in the best interests of the Fund and its shareholders, establish processes for","page_number":75,"box":{"x":117,"y":475,"width":702,"height":12}},{"id":"a74f8e9c-ce61-42c4-97a9-8460a094ff69","block_type":"box","text":"revisions to, or deviations from, such parameters, and specify the titles and roles of the employees of","page_number":75,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"37784aa5-7f56-4a59-81b0-a9d78844f2ea","block_type":"box","text":"BFA who are required to review each custom basket for compliance with those parameters. In addition,","page_number":75,"box":{"x":117,"y":506,"width":770,"height":12}},{"id":"77fc71b1-06e2-46e7-ae31-393ecfc5537d","block_type":"box","text":"when constructing custom baskets for redemptions, the tax efficiency of the Fund may be taken into","page_number":75,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"e45c2557-fc27-44c6-b6de-17aad1085fd7","block_type":"box","text":"account. The policies and procedures distinguish among different types of custom baskets that may be","page_number":75,"box":{"x":116,"y":537,"width":768,"height":12}},{"id":"f96e4ef7-4238-44c5-a1bd-2dbbc300f45c","block_type":"box","text":"used and impose different requirements for different types of custom baskets in order to seek to","page_number":75,"box":{"x":117,"y":552,"width":715,"height":12}},{"id":"846a0571-5f63-4f10-8900-ccdc1ff54cbf","block_type":"box","text":"mitigate against potential risks of conflicts and/or overreaching by an Authorized Participant.","page_number":75,"box":{"x":117,"y":568,"width":687,"height":12}},{"id":"d5a71711-ca1e-4c76-a4a5-bb9c386f4cbb","block_type":"box","text":"BlackRock has established a governance process to oversee basket compliance for the Fund, as set","page_number":75,"box":{"x":117,"y":583,"width":752,"height":12}},{"id":"fe8be430-84d6-4eb7-8e64-029ae4c716c4","block_type":"box","text":"forth in the Fund’s policies and procedures.","page_number":75,"box":{"x":116,"y":599,"width":326,"height":12}},{"id":"6924393d-fc2f-41c8-8e46-0b09d0b9fa0d","block_type":"box","text":"Taxation on Creations and Redemptions of Creation Units.","page_number":75,"box":{"x":116,"y":630,"width":472,"height":12}},{"id":"574c7c2d-fb2e-4a85-bbe6-59ffcca5e924","block_type":"box","text":"An Authorized Participant generally will","page_number":75,"box":{"x":588,"y":630,"width":296,"height":12}},{"id":"0ac269e3-4e81-46ce-a7ca-7bba503b11a6","block_type":"box","text":"recognize either gain or loss upon the exchange of Deposit Securities for Creation Units. This gain or","page_number":75,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"2f03004b-9a51-44e4-9178-6491ae2c7a95","block_type":"box","text":"loss is calculated by taking the market value of the Creation Units purchased over the Authorized","page_number":75,"box":{"x":117,"y":661,"width":718,"height":12}},{"id":"e4d72d36-76a4-4fcd-bcae-d1d016244c01","block_type":"box","text":"Participant’s aggregate basis in the Deposit Securities exchanged therefor. However, the IRS may","page_number":75,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"fb7b2bb4-85dc-4e37-a69b-979a7f5d2df3","block_type":"box","text":"apply the wash sales rules to determine that any loss realized upon the exchange of Deposit Securities","page_number":75,"box":{"x":116,"y":692,"width":764,"height":12}},{"id":"c25965c2-d0e0-4fb9-a6a7-20d6263a2a1c","block_type":"box","text":"for Creation Units is not currently deductible. Authorized Participants should consult their own tax","page_number":75,"box":{"x":116,"y":707,"width":721,"height":12}},{"id":"06ae2219-3827-438e-af28-7017b13529d7","block_type":"box","text":"advisors.","page_number":75,"box":{"x":116,"y":723,"width":66,"height":9}},{"id":"9ba2ce67-1786-4fee-9311-fcea32cb9adc","block_type":"box","text":"Similarly, an Authorized Participant generally will recognize either gain or loss upon the redemption of","page_number":75,"box":{"x":116,"y":754,"width":755,"height":12}},{"id":"0af36003-ef05-494f-95db-ca7a5e1fddb6","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":75,"box":{"x":116,"y":769,"width":767,"height":12}},{"id":"126c7dac-d011-4bdf-959d-1bf721115c48","block_type":"box","text":"dictate that capital gain or loss realized from the redemption of the Creation Units will generally create","page_number":75,"box":{"x":116,"y":785,"width":755,"height":12}},{"id":"1caca507-05ad-45c5-887c-4d8b08c5919b","block_type":"box","text":"long-term capital gain or loss if the Authorized Participant held the Creation Units for more than one","page_number":75,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"a819a98a-acb8-432d-b416-cbfd45f715a7","block_type":"box","text":"year and short-term capital gain or loss if the Authorized Participant held the Creation Units for one","page_number":75,"box":{"x":116,"y":816,"width":734,"height":12}},{"id":"ed2a5aa5-4f26-4b15-85be-be8f4fceb05d","block_type":"box","text":"year or less.","page_number":75,"box":{"x":116,"y":831,"width":96,"height":12}},{"id":"95cdd631-7de2-4e23-a48e-98a651521e25","block_type":"box","text":"72","page_number":75,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"68a30623-61cd-426f-9e6c-1cda8dd3de4d","block_type":"box","text":"NM1026U-6042785-75/259","page_number":75,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"71b33d20-d354-47ae-8943-775095a47a37","block_type":"box","text":"Taxes","page_number":76,"box":{"x":117,"y":92,"width":120,"height":23}},{"id":"17c14c79-17c2-4e9a-bf9e-67000902dbbf","block_type":"box","text":"The following is a summary of certain material U.S. federal income tax considerations regarding the","page_number":76,"box":{"x":116,"y":141,"width":743,"height":12}},{"id":"e8228fd6-5ce6-438b-9911-c4490eaedbc4","block_type":"box","text":"purchase, ownership and disposition of shares of the Fund. This summary does not address all of the","page_number":76,"box":{"x":117,"y":157,"width":757,"height":12}},{"id":"49b4e6bf-885f-4896-adb9-8b15b47c6a31","block_type":"box","text":"potential U.S. federal income tax consequences that may be applicable to the Fund or to all categories","page_number":76,"box":{"x":117,"y":172,"width":765,"height":12}},{"id":"02f75962-8ed6-4f55-8ba0-b9475b7fa1fe","block_type":"box","text":"of investors, some of which may be subject to special tax rules. Current and prospective shareholders","page_number":76,"box":{"x":116,"y":188,"width":761,"height":12}},{"id":"b4a5547b-7556-46d7-bb66-e130436e9a19","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":76,"box":{"x":116,"y":203,"width":739,"height":12}},{"id":"3ad4f9a8-480e-48c4-81e4-59ac3cddbb63","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":76,"box":{"x":117,"y":219,"width":747,"height":12}},{"id":"c63d5e8a-7f84-40aa-b4c2-4840be532ae8","block_type":"box","text":"and administrative interpretations thereof in effect on the date of this SAI, all of which are subject to","page_number":76,"box":{"x":116,"y":234,"width":742,"height":12}},{"id":"6506f23c-8664-4463-bcf9-2e33561d5ae9","block_type":"box","text":"change, possibly with retroactive effect.","page_number":76,"box":{"x":116,"y":250,"width":298,"height":12}},{"id":"85687f4e-041d-4a3e-84b6-f44b8931bdd8","block_type":"box","text":"Regulated Investment Company Qualifications.","page_number":76,"box":{"x":117,"y":279,"width":374,"height":12}},{"id":"7f6cda16-abf4-4411-a089-6eddf0cee554","block_type":"box","text":"The Fund intends to qualify for treatment as a","page_number":76,"box":{"x":493,"y":279,"width":349,"height":12}},{"id":"440c9789-fb2d-4d15-82ab-db75dd655231","block_type":"box","text":"separate RIC under Subchapter M of the Internal Revenue Code. To qualify for treatment as a RIC, the","page_number":76,"box":{"x":116,"y":294,"width":771,"height":12}},{"id":"f464a86c-985c-4e03-b93b-72d3e936065c","block_type":"box","text":"Fund must annually distribute at least 90% of its investment company taxable income (which includes","page_number":76,"box":{"x":117,"y":310,"width":757,"height":12}},{"id":"d0a95743-47d8-4ebb-aa7b-97b32e3390d7","block_type":"box","text":"dividends, interest and net short-term capital gains) and meet several other requirements. Among such","page_number":76,"box":{"x":116,"y":325,"width":769,"height":12}},{"id":"2d2be34e-562e-42eb-8017-459c65e79926","block_type":"box","text":"other requirements are the following: (i) at least 90% of the Fund’s annual gross income must be","page_number":76,"box":{"x":116,"y":341,"width":721,"height":12}},{"id":"ffcd7f86-1712-49a6-a797-56601ef59a30","block_type":"box","text":"derived from dividends, interest, payments with respect to securities loans, gains from the sale or other","page_number":76,"box":{"x":116,"y":356,"width":769,"height":12}},{"id":"04847d4a-319d-4c11-ae7f-75c60a9116d1","block_type":"box","text":"disposition of stock or securities or non-U.S. currencies, other income (including, but not limited to,","page_number":76,"box":{"x":116,"y":372,"width":736,"height":12}},{"id":"31a598c1-0ed1-426a-9931-69dae188c6f9","block_type":"box","text":"gains from options, futures or forward contracts) derived with respect to its business of investing in","page_number":76,"box":{"x":116,"y":387,"width":735,"height":12}},{"id":"57259241-a3e1-4ccf-9ce2-5adcb2f3c1e0","block_type":"box","text":"such stock, securities or currencies, and net income derived from interests in qualified publicly-traded","page_number":76,"box":{"x":116,"y":403,"width":757,"height":12}},{"id":"58573bca-457f-486a-8f82-de6ba1dcd69f","block_type":"box","text":"partnerships (","page_number":76,"box":{"x":117,"y":418,"width":101,"height":12}},{"id":"120857eb-c8d2-4f37-a284-b21728325a8c","block_type":"box","text":"i.e.,","page_number":76,"box":{"x":219,"y":418,"width":25,"height":11}},{"id":"1d5c2459-825f-4df3-9c6b-83e3a9e1ce10","block_type":"box","text":"partnerships that are traded on an established securities market or tradable on a","page_number":76,"box":{"x":246,"y":418,"width":607,"height":12}},{"id":"0e9c9736-67e7-4175-97be-92426afada21","block_type":"box","text":"secondary market, other than partnerships that derive at least 90% of their income from interest,","page_number":76,"box":{"x":116,"y":434,"width":720,"height":12}},{"id":"e9d4be8b-3a88-4e41-b684-52a6cc0eb263","block_type":"box","text":"dividends, capital gains and other traditionally permitted RIC income); and (ii) at the close of each","page_number":76,"box":{"x":116,"y":449,"width":729,"height":12}},{"id":"bff86ba6-7112-4262-9db5-11f81949f560","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":76,"box":{"x":116,"y":465,"width":765,"height":12}},{"id":"bda20bc3-b483-41b1-81f9-eb6d41d38660","block_type":"box","text":"be represented by cash and cash items, U.S. government securities, securities of other RICs and other","page_number":76,"box":{"x":117,"y":480,"width":769,"height":12}},{"id":"774b30ad-3d50-4d31-a354-a4e847168fd7","block_type":"box","text":"securities, with such other securities limited for purposes of this calculation in respect of any one issuer","page_number":76,"box":{"x":116,"y":496,"width":770,"height":12}},{"id":"1113def6-715c-4127-8f42-5779abd979f5","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":76,"box":{"x":116,"y":511,"width":744,"height":12}},{"id":"5aeeeb43-4563-46de-9d58-ec90deea6b0b","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":76,"box":{"x":116,"y":527,"width":765,"height":12}},{"id":"d5d7bc9f-b1b5-4845-b0da-630f05798fae","block_type":"box","text":"assets may be invested in the securities (other than U.S. government securities or the securities of","page_number":76,"box":{"x":116,"y":542,"width":737,"height":12}},{"id":"d989c40b-8c3b-4b9b-8c5c-a8bc144be348","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":76,"box":{"x":116,"y":558,"width":760,"height":12}},{"id":"fb95b3eb-0d84-4449-9966-4894667fccf2","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":76,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"0fe929c1-3257-4d38-8e65-8bd39b4d97a1","block_type":"box","text":"businesses, or the securities of one or more qualified publicly-traded partnerships.","page_number":76,"box":{"x":117,"y":589,"width":613,"height":12}},{"id":"55684e7b-0006-439f-a715-33b200d5cf82","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":76,"box":{"x":116,"y":618,"width":761,"height":12}},{"id":"96d8866e-f166-459a-93ed-139f6a9dd11d","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":76,"box":{"x":116,"y":633,"width":737,"height":12}},{"id":"9a54ed8f-92f5-4524-bd9a-9e7583535c68","block_type":"box","text":"disposing of certain assets. If, in any taxable year, the Fund fails one of these tests and does not timely","page_number":76,"box":{"x":116,"y":649,"width":771,"height":12}},{"id":"87ac6c84-59c3-4618-8bb9-57140c7968d0","block_type":"box","text":"cure the failure, the Fund will be taxed in the same manner as an ordinary corporation and distributions","page_number":76,"box":{"x":116,"y":664,"width":764,"height":12}},{"id":"628b7a44-2cb2-41d2-80d5-7be87f210169","block_type":"box","text":"to its shareholders will not be deductible by the Fund in computing its taxable income.","page_number":76,"box":{"x":116,"y":680,"width":634,"height":12}},{"id":"386cf646-b5b3-4c73-80a8-090b4eb31c6c","block_type":"box","text":"Although, in general, the passive loss rules of the Internal Revenue Code do not apply to RICs, such","page_number":76,"box":{"x":116,"y":709,"width":745,"height":12}},{"id":"5aff3b8d-98dd-4977-893b-15b5fc58b227","block_type":"box","text":"rules do apply to a RIC with respect to items attributable to interests in qualified publicly-traded","page_number":76,"box":{"x":117,"y":724,"width":701,"height":12}},{"id":"87bf4e9a-10b3-4aa5-b925-20637044ac55","block_type":"box","text":"partnerships. The Fund’s investments in partnerships, including in qualified publicly-traded","page_number":76,"box":{"x":117,"y":740,"width":668,"height":12}},{"id":"19ff9728-75f7-4c01-b116-f8c94795b006","block_type":"box","text":"partnerships, may result in the Fund being subject to state, local, or non-U.S. income, franchise or","page_number":76,"box":{"x":117,"y":755,"width":727,"height":12}},{"id":"06c56336-2264-4c57-af23-8fbb32b57050","block_type":"box","text":"withholding tax liabilities.","page_number":76,"box":{"x":116,"y":771,"width":182,"height":12}},{"id":"953ecb3a-b65c-479e-8905-78849ad2f129","block_type":"box","text":"Taxation of RICs.","page_number":76,"box":{"x":116,"y":800,"width":136,"height":9}},{"id":"4b2bbba3-7c20-42e1-9f43-2b0b8289d157","block_type":"box","text":"As a RIC, the Fund will not be subject to U.S. federal income tax on the portion of","page_number":76,"box":{"x":258,"y":800,"width":606,"height":12}},{"id":"4e37f882-dec9-4f33-a0a4-f648113b046a","block_type":"box","text":"its taxable investment income and capital gains that it distributes to its shareholders, provided that it","page_number":76,"box":{"x":117,"y":816,"width":740,"height":12}},{"id":"4cc911a0-e0cf-4945-bca1-bae021be17db","block_type":"box","text":"satisfies a minimum distribution requirement. To satisfy the minimum distribution requirement, the Fund","page_number":76,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"3d4c829f-10af-4d7f-986b-4c3140b98325","block_type":"box","text":"must distribute to its shareholders at least the sum of (i) 90% of its “investment company taxable","page_number":76,"box":{"x":117,"y":846,"width":720,"height":13}},{"id":"61490a66-40f3-4370-b2b6-85e943d24a57","block_type":"box","text":"income” (","page_number":76,"box":{"x":117,"y":862,"width":68,"height":12}},{"id":"c2acc3f2-9b88-4e7d-bcab-14e938383787","block_type":"box","text":"i.e.","page_number":76,"box":{"x":186,"y":862,"width":21,"height":9}},{"id":"9bdbedc8-8df9-4331-ad80-33e8786d404c","block_type":"box","text":", income other than the excess of its net realized long-term capital gain over its net","page_number":76,"box":{"x":210,"y":862,"width":617,"height":12}},{"id":"2cbe367c-9bf6-407d-b4fe-48708c2f5b01","block_type":"box","text":"realized short-term capital loss), plus or minus certain adjustments, and (ii) 90% of its net tax-exempt","page_number":76,"box":{"x":117,"y":877,"width":753,"height":13}},{"id":"57ceca8a-52a4-4746-b2cb-c40324b0fe39","block_type":"box","text":"73","page_number":76,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"30200c3c-7ec1-4baf-adc1-8902f23b169d","block_type":"box","text":"NM1026U-6042785-76/259","page_number":76,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5434f6d7-7260-4d99-af6e-fb3dad44e253","block_type":"box","text":"income for the taxable year. The Fund will be subject to income tax at regular corporate rates on any","page_number":77,"box":{"x":117,"y":87,"width":751,"height":12}},{"id":"76f36656-1806-4492-9144-3454aa95ab69","block_type":"box","text":"taxable income or gains that it does not distribute to","page_number":77,"box":{"x":116,"y":103,"width":389,"height":12}},{"id":"607dea12-4d23-4e1c-a864-ff92f73902e1","block_type":"box","text":"its shareholders. If the Fund fails to qualify for any","page_number":77,"box":{"x":506,"y":102,"width":375,"height":13}},{"id":"a4cfd0a4-6b83-4429-b59b-4d2e9ab9cb6d","block_type":"box","text":"taxable year as a RIC or fails to meet the distribution requirement, all of its taxable income will be","page_number":77,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"c269eea3-9318-4eb6-b260-2aa61e945a71","block_type":"box","text":"subject to tax at regular corporate income tax rates without any deduction for distributions to","page_number":77,"box":{"x":116,"y":134,"width":689,"height":12}},{"id":"4dc1e833-b875-4587-a0ec-bb0c59a24255","block_type":"box","text":"shareholders, and such distributions generally will be taxable to shareholders as ordinary dividends to","page_number":77,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"417451ba-f407-47fc-aa18-56825a3d8a33","block_type":"box","text":"the extent of the Fund’s current and accumulated earnings and profits. In such event, distributions to","page_number":77,"box":{"x":116,"y":165,"width":750,"height":12}},{"id":"4e3a4a9b-07d4-46fd-8dc8-0635e24ad901","block_type":"box","text":"individuals should be eligible to be treated as qualified dividend income and distributions to corporate","page_number":77,"box":{"x":117,"y":180,"width":753,"height":12}},{"id":"ddb4825a-c5e1-4c40-9102-954d5ede86ab","block_type":"box","text":"shareholders generally should be eligible for the dividends received deduction. Although the Fund","page_number":77,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"e7a24702-6cbb-4c5f-bdd6-664dab1cf4f0","block_type":"box","text":"intends to distribute substantially all of its net investment income and its capital gains for each taxable","page_number":77,"box":{"x":117,"y":211,"width":758,"height":12}},{"id":"a15c101e-872d-4764-b19d-f45b5b34f512","block_type":"box","text":"year, the Fund may decide to retain a portion of its income or gains. The Fund will be subject to U.S.","page_number":77,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"68e2717c-b80d-4ad7-82f6-fe734de2ce83","block_type":"box","text":"federal income taxation and excise taxation (as described below) to the extent it does not distribute all","page_number":77,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"22c3415e-56ef-4da4-b418-6f165769e3d2","block_type":"box","text":"(or, in the case of the excise tax, substantially all) of such income or gains. In certain circumstances,","page_number":77,"box":{"x":117,"y":258,"width":748,"height":12}},{"id":"18815a02-a179-4dca-9f7b-9c01874d224a","block_type":"box","text":"including in instances where the operational cost of the distribution would exceed the amount of the","page_number":77,"box":{"x":117,"y":273,"width":741,"height":12}},{"id":"762196ef-92ee-4dbf-8ed6-2003d1ccea0d","block_type":"box","text":"income or excise tax, BFA or an affiliate may voluntarily pay the tax on behalf of the Fund or reimburse","page_number":77,"box":{"x":117,"y":289,"width":767,"height":12}},{"id":"28bd1600-d44e-47db-821d-dfc9de6013af","block_type":"box","text":"the Fund for the tax. If the Fund fails to qualify as","page_number":77,"box":{"x":116,"y":304,"width":370,"height":12}},{"id":"6d70cb04-15cd-461e-b124-48ad3c3bd0e0","block_type":"box","text":"a RIC in any year, it must pay out its earnings and","page_number":77,"box":{"x":486,"y":304,"width":377,"height":12}},{"id":"282abaf7-9d46-480f-b5be-2829cce6a3fa","block_type":"box","text":"profits accumulated in that year in order to qualify again as","page_number":77,"box":{"x":117,"y":320,"width":439,"height":12}},{"id":"9e879807-9c56-46a3-b00c-7ecbbbc51b17","block_type":"box","text":"a RIC. If the Fund fails to qualify as a RIC","page_number":77,"box":{"x":557,"y":320,"width":314,"height":12}},{"id":"23eca862-615e-4280-9157-a05c7e78a2cd","block_type":"box","text":"for a period greater than two taxable years, the Fund may be required to recognize any net built-in","page_number":77,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"26f4375e-bb46-491d-836a-88ba2ef6dabe","block_type":"box","text":"gains with respect to certain of its assets (","page_number":77,"box":{"x":116,"y":351,"width":312,"height":12}},{"id":"f820ceae-78af-4415-98db-85de8d0e169f","block_type":"box","text":"i.e.","page_number":77,"box":{"x":429,"y":351,"width":20,"height":9}},{"id":"8b8e00b9-0c60-4e33-bd4f-3387243081d1","block_type":"box","text":", the excess of the aggregate gains, including items of","page_number":77,"box":{"x":452,"y":351,"width":405,"height":12}},{"id":"eafca63d-dc0e-446b-99c2-f3778a5956fd","block_type":"box","text":"income, over aggregate losses that would have been realized with respect to such assets if the Fund","page_number":77,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"595e62af-09e0-4077-a263-82a94d3758aa","block_type":"box","text":"had been liquidated) if it qualifies as a RIC in a subsequent year.","page_number":77,"box":{"x":117,"y":382,"width":484,"height":12}},{"id":"20f57a61-020f-44a2-b8a8-b4329fb28a92","block_type":"box","text":"Excise Tax.","page_number":77,"box":{"x":117,"y":410,"width":89,"height":9}},{"id":"ecd9e3c1-db94-47a9-8f80-74ef661a24ce","block_type":"box","text":"The Fund will be subject to a 4% excise tax on certain undistributed income if it does not","page_number":77,"box":{"x":207,"y":409,"width":667,"height":13}},{"id":"9d939c8c-1e15-4cea-8ca7-7af5c8342e86","block_type":"box","text":"distribute to its shareholders in each calendar year at least 98% of its ordinary income for the calendar","page_number":77,"box":{"x":116,"y":425,"width":764,"height":12}},{"id":"33b8b98f-a6b7-4733-b331-5117501dbc50","block_type":"box","text":"year plus at least 98.2% of its capital gain net","page_number":77,"box":{"x":116,"y":440,"width":342,"height":13}},{"id":"e19ec64c-0bad-4b50-9892-0e998e3b035f","block_type":"box","text":"income for the 12 months ended October 31 of such","page_number":77,"box":{"x":459,"y":440,"width":393,"height":10}},{"id":"5eeac78b-cfe7-4dee-a8ed-11c5d63c344a","block_type":"box","text":"year. For this purpose, however, any ordinary income or capital gain net income retained by the Fund","page_number":77,"box":{"x":116,"y":456,"width":758,"height":12}},{"id":"cea6f400-f516-44dc-af99-a0a8edf8f65b","block_type":"box","text":"that is subject to corporate income tax will be considered to have been distributed by year-end. In","page_number":77,"box":{"x":116,"y":472,"width":728,"height":12}},{"id":"ce235911-38d4-4132-9077-c424e1584cd3","block_type":"box","text":"addition, the minimum amounts that must be distributed in any year to avoid the excise tax will be","page_number":77,"box":{"x":116,"y":487,"width":728,"height":12}},{"id":"a3be79a9-e06c-4d37-8ab3-b121f08c7954","block_type":"box","text":"increased or decreased to reflect any underdistribution or overdistribution, as the case may be, from","page_number":77,"box":{"x":117,"y":502,"width":746,"height":13}},{"id":"10857f6c-ac80-4a3a-b659-dafb23eb7da7","block_type":"box","text":"the previous year.","page_number":77,"box":{"x":116,"y":518,"width":138,"height":12}},{"id":"baeef15d-e3d8-4316-a30d-80dc926a86dc","block_type":"box","text":"Net Capital Loss Carryforwards.","page_number":77,"box":{"x":117,"y":546,"width":254,"height":12}},{"id":"475633a2-cbec-4ea7-ae24-1c12db177e07","block_type":"box","text":"Net capital loss carryforwards may be applied against any net","page_number":77,"box":{"x":372,"y":546,"width":468,"height":12}},{"id":"050d0373-ee23-47af-950d-ec8f4a5da515","block_type":"box","text":"realized capital gains in each succeeding year, until they have been reduced to zero.","page_number":77,"box":{"x":117,"y":562,"width":633,"height":12}},{"id":"20f8e399-6cc9-4ab6-88e6-39b464f42056","block_type":"box","text":"In the event that the Fund were to experience an ownership change as defined under the Internal","page_number":77,"box":{"x":117,"y":589,"width":726,"height":12}},{"id":"ec7b93b8-6d4f-4ca0-9be9-92e88f95fb90","block_type":"box","text":"Revenue Code, the loss carryforwards and other favorable tax attributes of the Fund, if any, may be","page_number":77,"box":{"x":117,"y":605,"width":745,"height":12}},{"id":"2a11e0d2-9035-4086-8d8a-74abc048fdd6","block_type":"box","text":"subject to limitation.","page_number":77,"box":{"x":116,"y":620,"width":152,"height":12}},{"id":"5442c52b-0c54-4fa0-bf4b-140ae4ff409d","block_type":"box","text":"Taxation of U.S. Shareholders.","page_number":77,"box":{"x":116,"y":648,"width":249,"height":10}},{"id":"a22ee9bb-f6b5-4f7e-89c5-eccbfde6a0c6","block_type":"box","text":"Dividends and other distributions by the Fund are generally treated","page_number":77,"box":{"x":366,"y":648,"width":500,"height":12}},{"id":"8195b132-4c44-4dcf-a628-422e95c4a477","block_type":"box","text":"under the Internal Revenue Code as received by the shareholders at the time the dividend or","page_number":77,"box":{"x":117,"y":664,"width":689,"height":12}},{"id":"e27ef4a5-5dd7-4d17-9af0-6f03e83ea7c0","block_type":"box","text":"distribution is made. However, any dividend or distribution declared by the Fund in October, November","page_number":77,"box":{"x":116,"y":679,"width":762,"height":12}},{"id":"3498daee-b867-435c-b45c-5fe027ae10a3","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":77,"box":{"x":116,"y":695,"width":760,"height":12}},{"id":"c86bf211-63dc-44de-afd4-1d14b5625062","block_type":"box","text":"month shall be deemed to have been received by each shareholder on December 31 of such calendar","page_number":77,"box":{"x":117,"y":710,"width":759,"height":12}},{"id":"d32a856e-38fb-4292-8263-46cf49bfe7d5","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":77,"box":{"x":116,"y":726,"width":744,"height":12}},{"id":"e4e4fa07-2b69-49a0-a759-4cbe31b60c25","block_type":"box","text":"actually paid by the Fund during January of the following calendar year.","page_number":77,"box":{"x":116,"y":741,"width":529,"height":12}},{"id":"2ca4d40f-7dbe-4a81-b0ca-bc9591ead61f","block_type":"box","text":"The Fund intends to distribute annually to its shareholders substantially all of its investment company","page_number":77,"box":{"x":116,"y":769,"width":750,"height":12}},{"id":"8d6a2fa3-9321-4c3e-befe-c49ee106b85f","block_type":"box","text":"taxable income and any net realized long-term capital gains in excess of net realized short-term capital","page_number":77,"box":{"x":116,"y":785,"width":762,"height":12}},{"id":"4628fd71-e050-4569-a5e7-3056d152b1ad","block_type":"box","text":"losses (including any capital loss carryovers). However, if the Fund retains for investment an amount","page_number":77,"box":{"x":117,"y":800,"width":746,"height":12}},{"id":"6fedb065-1a56-4dab-bfb2-5e493d19f59b","block_type":"box","text":"equal to all or a portion of its net long-term capital gains in excess of its net short-term capital losses","page_number":77,"box":{"x":116,"y":816,"width":743,"height":12}},{"id":"52fb28fb-4ec9-44e8-a6cb-6cd5911acbb4","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":77,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"8dc2962a-407f-41d7-a4c7-22a495b73041","block_type":"box","text":"amount retained. In that event, unless the retained amount is deemed to be de minimis or the","page_number":77,"box":{"x":116,"y":847,"width":698,"height":11}},{"id":"f73d72b0-c85a-45e5-84b0-12891af2ddf1","block_type":"box","text":"applicable tax is otherwise reimbursed by BFA or an affiliate, the Fund will generally designate such","page_number":77,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"3a651010-4121-41cf-a3ba-d5042a1267c3","block_type":"box","text":"retained amounts as undistributed capital gains in a notice to its shareholders who (a) will be required","page_number":77,"box":{"x":117,"y":878,"width":757,"height":12}},{"id":"eee88a68-ed28-4422-8b16-a95968f57af8","block_type":"box","text":"74","page_number":77,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"678efe51-af8e-4dec-8b64-89f3ecafda9c","block_type":"box","text":"NM1026U-6042785-77/259","page_number":77,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5883b316-51df-4084-bbae-bff5b2cdfcd2","block_type":"box","text":"to include in income for U.S. federal income tax purposes, as long-term capital gains, their","page_number":78,"box":{"x":116,"y":87,"width":674,"height":12}},{"id":"8fdc200f-a6bd-46f7-931f-b52141315d1e","block_type":"box","text":"proportionate shares of the undistributed amount, (b) will be entitled to credit their proportionate shares","page_number":78,"box":{"x":117,"y":102,"width":768,"height":13}},{"id":"710fc495-1675-480a-b195-5fda65ce4101","block_type":"box","text":"of the tax paid by the Fund on the undistributed amount against their U.S. federal income tax liabilities,","page_number":78,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"b63e5f77-09c8-4aa5-aa56-3a67d8fdb233","block_type":"box","text":"if any, and to claim refunds to the extent their credits exceed their liabilities, if any, and (c) will be","page_number":78,"box":{"x":117,"y":134,"width":721,"height":12}},{"id":"b754e945-dca1-47a0-a63b-e42040e0a2f2","block_type":"box","text":"entitled to increase their tax basis, for U.S. federal income tax purposes, in their shares by an amount","page_number":78,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"3aa20f72-cb34-451d-9cee-c0161772c028","block_type":"box","text":"equal to the excess of the amount in clause (a) over the amount in clause (b). Organizations or","page_number":78,"box":{"x":116,"y":165,"width":709,"height":12}},{"id":"042311f6-c629-465d-afce-e9c0ffe15ab4","block_type":"box","text":"persons not subject to U.S. federal income tax on such capital gains will be entitled to a refund of their","page_number":78,"box":{"x":117,"y":180,"width":761,"height":12}},{"id":"358bc018-f52e-4cc1-91e3-2eab83dece5a","block_type":"box","text":"pro rata share of such taxes paid by the Fund upon filing appropriate returns or claims for refund with","page_number":78,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"38182171-4c92-44f0-83af-e881893d723e","block_type":"box","text":"the IRS.","page_number":78,"box":{"x":116,"y":211,"width":65,"height":10}},{"id":"2ec7135e-7419-4ee0-a0c6-8d1a3c79d290","block_type":"box","text":"Distributions of net long-term capital gains, if any, that the Fund reports as capital gains dividends are","page_number":78,"box":{"x":117,"y":239,"width":758,"height":12}},{"id":"0395f589-fbd8-47e6-99bb-723dbd502513","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":78,"box":{"x":116,"y":255,"width":732,"height":12}},{"id":"5acbb281-b8e3-4124-8966-c723fc073533","block_type":"box","text":"shareholder has held shares of the Fund. All other dividends of the Fund (including dividends from","page_number":78,"box":{"x":116,"y":270,"width":734,"height":12}},{"id":"399aae0d-ac79-48ac-a0b8-375421a4f410","block_type":"box","text":"short-term capital gains) from its","page_number":78,"box":{"x":116,"y":286,"width":245,"height":12}},{"id":"3bfdf403-ff88-40cb-b931-a12d1cfcd79f","block_type":"box","text":"current and accumulated earnings and profits (“regular dividends”) are generally subject to tax as","page_number":78,"box":{"x":116,"y":314,"width":726,"height":12}},{"id":"76d59a35-ef35-4238-87d1-1c35133ff634","block_type":"box","text":"ordinary income, subject to the discussion of qualified dividend income below. Long-term capital gains","page_number":78,"box":{"x":116,"y":330,"width":762,"height":12}},{"id":"a0bb7ee1-9ff1-4d7c-9bc5-e53f48af641c","block_type":"box","text":"are eligible for taxation at a maximum rate of 15% or 20% for non-corporate shareholders, depending","page_number":78,"box":{"x":116,"y":345,"width":757,"height":12}},{"id":"2e8db74c-f918-44e3-9419-22048a8c59d9","block_type":"box","text":"on whether their income exceeds certain threshold amounts.","page_number":78,"box":{"x":116,"y":361,"width":454,"height":9}},{"id":"ba284ad9-03bb-4d44-8d6f-1cd4d624514f","block_type":"box","text":"If an individual receives a regular dividend qualifying for the long-term capital gains rates and such","page_number":78,"box":{"x":117,"y":389,"width":734,"height":12}},{"id":"17b3baa8-5dfb-42be-b609-b6065146944b","block_type":"box","text":"dividend constitutes an “extraordinary dividend,” and the individual subsequently recognizes a loss on","page_number":78,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"610ebe01-8b9f-4a0e-b808-b515397ca21b","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":78,"box":{"x":116,"y":420,"width":770,"height":12}},{"id":"0b12d571-db67-40a0-b4e7-4da50cf9329e","block_type":"box","text":"be long-term capital loss to the extent of such extraordinary dividend. An “extraordinary dividend” on","page_number":78,"box":{"x":117,"y":436,"width":747,"height":12}},{"id":"5bfc4c08-42fb-449d-9fc9-f68483da9bfa","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":78,"box":{"x":116,"y":451,"width":763,"height":12}},{"id":"0942b553-167a-4474-9bcb-923dd7795723","block_type":"box","text":"the taxpayer’s tax basis (or trading value) in a share of stock, aggregating dividends with ex-dividend","page_number":78,"box":{"x":116,"y":467,"width":753,"height":12}},{"id":"166d12e3-a962-4315-b5d2-c9d7fc6d129c","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":78,"box":{"x":116,"y":482,"width":733,"height":12}},{"id":"badf01be-7db6-4a8c-9b57-cced1b6f4b58","block_type":"box","text":"trading value) in a share of stock, aggregating dividends with ex-dividend dates within a 365-day","page_number":78,"box":{"x":116,"y":498,"width":720,"height":12}},{"id":"09e8a6d8-4787-4445-8dd2-520b41952cf4","block_type":"box","text":"period.","page_number":78,"box":{"x":117,"y":513,"width":55,"height":12}},{"id":"6a3944a8-a97b-4001-8908-9b984e352350","block_type":"box","text":"Distributions in excess of the Fund’s current and accumulated earnings and profits will, as to each","page_number":78,"box":{"x":117,"y":542,"width":730,"height":12}},{"id":"ce09a8ef-42cd-4f27-8166-4500f219f66e","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":78,"box":{"x":116,"y":557,"width":769,"height":12}},{"id":"6329050e-22d3-494b-ae5e-fec05462739a","block_type":"box","text":"the Fund, and as a capital gain thereafter (if the shareholder holds shares of the Fund as capital","page_number":78,"box":{"x":116,"y":573,"width":718,"height":12}},{"id":"212944e2-b17f-46c7-b0e8-ed2b481ca6d2","block_type":"box","text":"assets). Distributions in excess of the Fund’s minimum distribution requirements, but not in excess of","page_number":78,"box":{"x":116,"y":588,"width":754,"height":12}},{"id":"30d0bae1-2ca8-4059-b7c5-c9ec25d48b1e","block_type":"box","text":"the Fund’s current and accumulated earnings and profits, will be taxable to shareholders and will not","page_number":78,"box":{"x":116,"y":604,"width":750,"height":12}},{"id":"bda6c4ee-f748-487e-9e6a-bf39842ac5af","block_type":"box","text":"constitute nontaxable returns of capital. Shareholders receiving dividends or distributions in the form of","page_number":78,"box":{"x":116,"y":619,"width":767,"height":12}},{"id":"f0ddf6c6-5a8b-4ea5-8333-3e1567c6c407","block_type":"box","text":"additional shares should be treated for U.S. federal income tax purposes as receiving a distribution in","page_number":78,"box":{"x":116,"y":635,"width":757,"height":12}},{"id":"ec83647a-d605-461a-9cd2-857c8960fb76","block_type":"box","text":"an amount equal to the amount of money that the shareholders receiving cash dividends or","page_number":78,"box":{"x":116,"y":650,"width":682,"height":12}},{"id":"e8519aaf-367b-4270-b76a-a55594ae51a5","block_type":"box","text":"distributions will receive and should have a cost basis in the shares received equal to such amount.","page_number":78,"box":{"x":116,"y":666,"width":736,"height":12}},{"id":"2ff162c9-9470-4ad9-bee4-24543f26a579","block_type":"box","text":"A 3.8% U.S. federal Medicare contribution tax is imposed on net investment income, including, but not","page_number":78,"box":{"x":116,"y":694,"width":758,"height":12}},{"id":"5574aa09-f724-4c5f-84be-354a846c6be2","block_type":"box","text":"limited to, interest, dividends, and net gain from investments, of U.S. individuals with income exceeding","page_number":78,"box":{"x":117,"y":709,"width":764,"height":13}},{"id":"38bb759f-b13a-4bee-8d71-df50c3d59d60","block_type":"box","text":"$200,000 (or $250,000 if married and filing jointly) and of estates and trusts to the extent their income","page_number":78,"box":{"x":116,"y":724,"width":753,"height":13}},{"id":"f712e9f5-3e72-47b7-85e6-685fb19fb944","block_type":"box","text":"exceeds certain threshold amounts.","page_number":78,"box":{"x":116,"y":741,"width":264,"height":9}},{"id":"69a2423d-e665-4dae-a343-f52fe0759275","block_type":"box","text":"Investors considering buying shares just prior to a dividend or capital gain distribution should be aware","page_number":78,"box":{"x":117,"y":769,"width":760,"height":12}},{"id":"062a493a-b4dd-43bd-a1d9-d264ae5fd9b5","block_type":"box","text":"that, although the price of shares purchased at that time may reflect the amount of the forthcoming","page_number":78,"box":{"x":116,"y":784,"width":731,"height":12}},{"id":"3818c728-2891-44b9-bc1a-9df6d286ed14","block_type":"box","text":"distribution, such dividend or distribution may nevertheless be taxable to them. If the Fund is the holder","page_number":78,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"066f5bd0-2923-46fe-b5f4-2048e4e88326","block_type":"box","text":"of record of any security on the record date for any dividends payable with respect to such security,","page_number":78,"box":{"x":116,"y":815,"width":736,"height":12}},{"id":"e9b9b73f-54ab-4f34-be8c-e8bc63742d12","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":78,"box":{"x":116,"y":831,"width":741,"height":12}},{"id":"936bf6fb-89cf-41b0-a802-cecf6db53f65","block_type":"box","text":"later of (a) the date such security became ex-dividend with respect to such dividends (","page_number":78,"box":{"x":117,"y":846,"width":638,"height":12}},{"id":"1c979917-b73e-40a9-ba66-1a76217615b1","block_type":"box","text":"i.e.","page_number":78,"box":{"x":756,"y":846,"width":21,"height":10}},{"id":"f26b031f-8419-4121-9e1a-7c785eef52ab","block_type":"box","text":", the date on","page_number":78,"box":{"x":780,"y":846,"width":97,"height":12}},{"id":"cce37a38-d1f0-4ed9-a140-bfffe8f8bd0b","block_type":"box","text":"which a buyer of the security would not be entitled to receive the declared, but unpaid, dividends); or","page_number":78,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"64950050-8cd4-4e3a-bc9d-b49cda583ccd","block_type":"box","text":"(b) the date the Fund acquired such security. Accordingly, in order to satisfy its income distribution","page_number":78,"box":{"x":117,"y":877,"width":733,"height":12}},{"id":"eca28fca-c557-429f-9315-d0de78f935cf","block_type":"box","text":"75","page_number":78,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"10a13e98-8806-45a5-9f94-d3a164b509c6","block_type":"box","text":"NM1026U-6042785-78/259","page_number":78,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"63175ab3-98f6-4406-bee8-b633a8a54eaa","block_type":"box","text":"requirements, the Fund may be required to pay dividends based on anticipated earnings, and","page_number":79,"box":{"x":117,"y":87,"width":697,"height":12}},{"id":"eaeec843-205e-4e8a-81e3-8536a905cacc","block_type":"box","text":"shareholders may receive dividends in an earlier year than would otherwise be the case.","page_number":79,"box":{"x":116,"y":103,"width":662,"height":12}},{"id":"e3d5a7ec-0637-461c-a832-fcf6b50d1212","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":79,"box":{"x":117,"y":131,"width":754,"height":12}},{"id":"1b2c7e4e-30e8-4dd9-af6b-458811bf2946","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":79,"box":{"x":116,"y":146,"width":771,"height":12}},{"id":"96396afe-f740-4941-b1c7-49a01d10be79","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":79,"box":{"x":117,"y":162,"width":746,"height":12}},{"id":"27a65ba9-2030-4dab-95ad-f5ee015fbb7d","block_type":"box","text":"passive foreign investment company (“PFIC”) losses over post-October foreign currency and PFIC","page_number":79,"box":{"x":117,"y":177,"width":734,"height":12}},{"id":"a8704885-9326-487a-aea6-6c14ed995921","block_type":"box","text":"gains and (ii) the excess of post-December ordinary losses over post-December ordinary income) until","page_number":79,"box":{"x":116,"y":193,"width":765,"height":12}},{"id":"d6da98ed-5699-4304-aeec-dd5325dd3f3c","block_type":"box","text":"the next taxable year in computing its investment company taxable income and net capital gain, which","page_number":79,"box":{"x":116,"y":209,"width":762,"height":11}},{"id":"f73e3113-fb11-4626-8f9a-2f9fe2c844b8","block_type":"box","text":"will defer the recognition of such realized losses. Such deferrals and other rules regarding gains and","page_number":79,"box":{"x":116,"y":224,"width":749,"height":12}},{"id":"ff0da9ab-740f-47a8-8b29-17793580d382","block_type":"box","text":"losses realized after October (or December) may affect the tax character of shareholder distributions.","page_number":79,"box":{"x":117,"y":239,"width":755,"height":12}},{"id":"9b1e6617-bf25-431d-8469-023e528228cf","block_type":"box","text":"Sales of Shares.","page_number":79,"box":{"x":116,"y":268,"width":129,"height":9}},{"id":"ccf8e615-c53b-4238-a680-965a52f9d7de","block_type":"box","text":"Upon the sale or exchange of shares of the Fund, a shareholder will realize a taxable","page_number":79,"box":{"x":246,"y":268,"width":642,"height":12}},{"id":"c4864d1e-5d54-4cd8-8f66-b1071446a939","block_type":"box","text":"gain or loss equal to the difference between the amount realized and the shareholder’s basis in shares","page_number":79,"box":{"x":116,"y":283,"width":766,"height":12}},{"id":"3afefeba-b8a8-4c3c-b04d-5cda4218808b","block_type":"box","text":"of the Fund. A redemption of shares by the Fund will be treated as a sale for this purpose. Such gain or","page_number":79,"box":{"x":116,"y":299,"width":772,"height":12}},{"id":"e88b59c2-74b8-4aa6-9c64-0f494d60c635","block_type":"box","text":"loss will be treated as capital gain or loss if the shares are capital assets in the shareholder’s hands","page_number":79,"box":{"x":117,"y":314,"width":742,"height":12}},{"id":"205b759e-5332-40c6-ba77-76657e7e9c84","block_type":"box","text":"and will be long-term capital gain or loss if the shares are held for more than one year and short-term","page_number":79,"box":{"x":116,"y":330,"width":755,"height":12}},{"id":"6e270840-d6fb-4b71-8586-49acc2dd9f3c","block_type":"box","text":"capital gain or loss if the shares are held for one year or less. Any loss realized on a sale or exchange","page_number":79,"box":{"x":116,"y":345,"width":761,"height":12}},{"id":"a711d195-2217-4028-b804-1e90f1df0211","block_type":"box","text":"will be disallowed to the extent the shares disposed of are replaced, including replacement through the","page_number":79,"box":{"x":116,"y":361,"width":767,"height":12}},{"id":"b5ad319e-24e4-484e-bf24-7ff2152a4e3d","block_type":"box","text":"reinvesting of dividends or capital gains distributions, or by an option or contract to acquire","page_number":79,"box":{"x":117,"y":376,"width":675,"height":12}},{"id":"d6a2869a-b22e-49c0-9e2b-bf9ea420435a","block_type":"box","text":"substantially identical shares, within a 61-day period beginning 30 days before and ending 30 days","page_number":79,"box":{"x":116,"y":392,"width":738,"height":12}},{"id":"f590e528-a98a-422e-9a4a-c2c21d8baae5","block_type":"box","text":"after the disposition of the shares. In such a case, the basis of the shares acquired will be increased to","page_number":79,"box":{"x":116,"y":407,"width":766,"height":12}},{"id":"3e453674-a147-4f61-b70e-64254bd82a10","block_type":"box","text":"reflect the disallowed loss. Any loss realized by a shareholder on the sale of Fund shares held by the","page_number":79,"box":{"x":117,"y":423,"width":753,"height":12}},{"id":"8b87a5a0-0cbb-4939-b0b6-ce068d7ef68a","block_type":"box","text":"shareholder for six months or less will be treated for U.S. federal income tax purposes as a long-term","page_number":79,"box":{"x":116,"y":438,"width":756,"height":12}},{"id":"e57a7310-cb8b-4d93-a954-26771b05ecfb","block_type":"box","text":"capital loss to the extent of any distributions or deemed distributions of long-term capital gains received","page_number":79,"box":{"x":116,"y":454,"width":771,"height":12}},{"id":"a7420a78-c055-46cd-9b21-e5e5936351a1","block_type":"box","text":"by the shareholder with respect to such share. The Medicare contribution tax described above will","page_number":79,"box":{"x":117,"y":469,"width":730,"height":12}},{"id":"8f716bd8-0fad-49b8-a2cf-4db21bdaa011","block_type":"box","text":"apply to the sale of Fund shares.","page_number":79,"box":{"x":116,"y":485,"width":249,"height":12}},{"id":"84b8377d-8f52-48b2-97cb-22e08d0841ee","block_type":"box","text":"If a shareholder incurs a sales charge in acquiring shares of the Fund, disposes of those shares within","page_number":79,"box":{"x":117,"y":513,"width":763,"height":12}},{"id":"d6ee3049-08f0-4aad-9cc8-7ea88c45f979","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":79,"box":{"x":116,"y":529,"width":761,"height":12}},{"id":"970883ce-0fe5-4f3e-82d5-0852598bdfc6","block_type":"box","text":"fund for which the otherwise applicable sales charge is reduced by reason of a reinvestment right (","page_number":79,"box":{"x":116,"y":544,"width":732,"height":12}},{"id":"dbd4f925-315b-4357-b14f-dc2463936bea","block_type":"box","text":"e.g.","page_number":79,"box":{"x":849,"y":547,"width":26,"height":9}},{"id":"3783a34a-8022-451f-9508-9ded1d477c51","block_type":"box","text":",","page_number":79,"box":{"x":878,"y":552,"width":8,"height":3}},{"id":"58607547-cdd0-4774-a8ea-7bc42cf239d4","block_type":"box","text":"an exchange privilege), the original sales charge will not be taken into account in computing gain or","page_number":79,"box":{"x":116,"y":560,"width":742,"height":12}},{"id":"24b1584a-5e6b-4f66-9e1d-044e8d5693d8","block_type":"box","text":"loss on the disposition of the original","page_number":79,"box":{"x":117,"y":575,"width":275,"height":12}},{"id":"e2bdf0b6-c23c-471e-9e0c-68a49609435e","block_type":"box","text":"shares to the extent the subsequent sales charge is reduced. Instead, the disregarded portion of the","page_number":79,"box":{"x":116,"y":604,"width":749,"height":12}},{"id":"38337b0c-e56d-4db1-9b9b-8fed36624bf6","block_type":"box","text":"original sales charge will be added to the tax basis of the newly acquired shares. Furthermore, the","page_number":79,"box":{"x":116,"y":619,"width":733,"height":12}},{"id":"12bc779c-fc4e-4f83-99fe-827ed8ea6021","block_type":"box","text":"same rule also applies to a disposition of the newly acquired shares made within 90 days of the second","page_number":79,"box":{"x":116,"y":635,"width":771,"height":12}},{"id":"c5a79ccb-addc-49a8-b197-6e1e1c294cf2","block_type":"box","text":"acquisition. This provision prevents shareholders from immediately deducting the sales charge by","page_number":79,"box":{"x":116,"y":650,"width":729,"height":12}},{"id":"c9c2615a-abd9-44ed-8fb4-aa88414cf8b5","block_type":"box","text":"shifting their investments within a family of mutual funds.","page_number":79,"box":{"x":116,"y":666,"width":418,"height":12}},{"id":"2c63d244-4950-422d-b8ed-2a9cc32123a4","block_type":"box","text":"Backup Withholding.","page_number":79,"box":{"x":117,"y":694,"width":165,"height":12}},{"id":"8c2c3387-24bc-4377-a60c-3bf4146153b1","block_type":"box","text":"In certain cases, the Fund will be required to withhold at a 24% rate and remit to","page_number":79,"box":{"x":289,"y":694,"width":593,"height":12}},{"id":"2ec5ea17-ce52-42fd-9934-07f69f63568f","block_type":"box","text":"the U.S. Treasury such amounts withheld from any distributions paid to a shareholder who: (i) has","page_number":79,"box":{"x":116,"y":709,"width":726,"height":13}},{"id":"3e12248b-306d-47a4-b7fb-2cfa801c1952","block_type":"box","text":"failed to provide a correct taxpayer identification number; (ii) is subject to backup withholding by the","page_number":79,"box":{"x":116,"y":725,"width":737,"height":12}},{"id":"155ca832-1309-4648-a1ad-36eeab1b3cfb","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":79,"box":{"x":117,"y":740,"width":754,"height":13}},{"id":"201d2179-80f0-4e0c-afc6-57e2798c9b95","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":79,"box":{"x":117,"y":756,"width":740,"height":12}},{"id":"0dc786c6-cb14-4503-a360-668e19e63526","block_type":"box","text":"withholding is not an additional tax and any amount withheld may be credited against a shareholder’s","page_number":79,"box":{"x":116,"y":772,"width":750,"height":12}},{"id":"f6b84a86-c29f-43f6-b79c-9afd6cc067e1","block_type":"box","text":"U.S. federal income tax liability.","page_number":79,"box":{"x":117,"y":787,"width":232,"height":12}},{"id":"03f3a1f5-b6ce-49d0-b0ba-f244aefc5fe9","block_type":"box","text":"Sections 351 and 362.","page_number":79,"box":{"x":116,"y":815,"width":173,"height":10}},{"id":"17e7f0c8-0dcd-474b-8222-0ae1448f0815","block_type":"box","text":"The Trust, on behalf of the Fund, has the right to reject an order to create","page_number":79,"box":{"x":296,"y":815,"width":544,"height":12}},{"id":"8b91fc54-7cbb-4c5e-94d8-fc2e2b7f8468","block_type":"box","text":"Creation Units of the Fund if the Authorized Participant (or group of Authorized Participants) would,","page_number":79,"box":{"x":117,"y":831,"width":739,"height":12}},{"id":"67a8da9e-1cd1-4ae9-982d-7c44a8708e8c","block_type":"box","text":"upon obtaining the Creation Units, own 80% or more of the outstanding shares of the Fund and if,","page_number":79,"box":{"x":117,"y":846,"width":729,"height":12}},{"id":"e3b2bb61-ffb1-4c21-8623-023b3339648f","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":79,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"88165a8b-e4fd-4b27-8223-73d5417ede69","block_type":"box","text":"Deposit Securities different from the market value of such Deposit Securities on the date of deposit. If","page_number":79,"box":{"x":117,"y":877,"width":757,"height":12}},{"id":"f0da4695-29d4-45a4-bc6a-77615cb4e64c","block_type":"box","text":"76","page_number":79,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5f7cd2cc-68a0-4c4e-8a02-4f7d1e1f21fb","block_type":"box","text":"NM1026U-6042785-79/259","page_number":79,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"aad2c56b-83e3-4a48-907b-e90165ea5aa3","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":80,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"6e56b606-3b8e-4a93-b8f9-716f330d5be3","block_type":"box","text":"date, the Fund, upon disposition of the Deposit Securities, would recognize more taxable gain or less","page_number":80,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"523a3619-fc85-43cf-a66d-fd75c9883234","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":80,"box":{"x":116,"y":118,"width":700,"height":12}},{"id":"aa3e3e45-d0b0-4520-bab9-d848ecc0dd10","block_type":"box","text":"anticipated that the Trust will exercise the right of rejection except in a case where the Trust","page_number":80,"box":{"x":116,"y":134,"width":686,"height":12}},{"id":"5fd2ea8f-cedc-4733-9d6d-2a4f75f7cb31","block_type":"box","text":"determines that accepting the order could result in material adverse tax consequences to the Fund or","page_number":80,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"4ebf9c87-f1c2-47a0-afe3-490c746fb8ce","block_type":"box","text":"its shareholders. The Trust also has the right to require information necessary to determine beneficial","page_number":80,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"fb4448d6-672b-4d74-b062-4f4154d915b6","block_type":"box","text":"share ownership for purposes of the 80% determination.","page_number":80,"box":{"x":116,"y":180,"width":423,"height":12}},{"id":"52a79007-5410-48c6-a5d2-7a6e8a8b3d15","block_type":"box","text":"Taxation of Certain Derivatives.","page_number":80,"box":{"x":116,"y":211,"width":256,"height":10}},{"id":"da33c7e0-94a6-4af7-a965-21f641bdb3ea","block_type":"box","text":"The Fund’s transactions in zero coupon securities, non-U.S.","page_number":80,"box":{"x":373,"y":211,"width":450,"height":12}},{"id":"26eb9510-5308-468d-8e91-c5dc7b586e88","block_type":"box","text":"currencies, forward contracts, swaps, options and futures contracts (including swaps, options and","page_number":80,"box":{"x":116,"y":227,"width":729,"height":12}},{"id":"27184052-578f-4971-ad22-d0392248ba48","block_type":"box","text":"futures contracts on non-U.S. currencies) and other derivatives, to the extent permitted, will be subject","page_number":80,"box":{"x":116,"y":242,"width":764,"height":12}},{"id":"9a3b4bf5-7c19-493d-aad8-1f9ed8614022","block_type":"box","text":"to special provisions of the Internal Revenue Code (including provisions relating to “hedging","page_number":80,"box":{"x":116,"y":258,"width":686,"height":12}},{"id":"a054b39e-ea22-4b71-9e0e-463c597212e1","block_type":"box","text":"transactions” and “straddles”) that, among other consequences, may affect the character of gains and","page_number":80,"box":{"x":116,"y":273,"width":760,"height":12}},{"id":"8a3afa57-c6b2-4fd3-b95b-cd08b2ebc417","block_type":"box","text":"losses realized by the Fund (","page_number":80,"box":{"x":117,"y":289,"width":213,"height":12}},{"id":"77e76af6-eb8f-4c48-aed0-b738120c6bb2","block_type":"box","text":"i.e.","page_number":80,"box":{"x":331,"y":289,"width":21,"height":9}},{"id":"e4b88a00-5b7a-4904-ac83-43342d015040","block_type":"box","text":", may affect whether gains or losses are ordinary or capital), accelerate","page_number":80,"box":{"x":355,"y":289,"width":532,"height":12}},{"id":"7478c358-d4ca-4d9e-b17f-b9db39b57e19","block_type":"box","text":"recognition of income to the Fund and defer Fund losses. These rules could therefore affect the","page_number":80,"box":{"x":117,"y":304,"width":713,"height":12}},{"id":"6283e42e-0a1f-4095-8648-afa22ca8393a","block_type":"box","text":"character, amount and timing of distributions to shareholders. These provisions also (a) may require","page_number":80,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"9b94854b-bacc-4393-b372-79827d283b33","block_type":"box","text":"the Fund to mark-to-market certain types of the positions in its portfolio (","page_number":80,"box":{"x":116,"y":335,"width":536,"height":12}},{"id":"d502fda1-ce91-4111-b741-6e5e2c0c068a","block_type":"box","text":"i.e.","page_number":80,"box":{"x":653,"y":335,"width":20,"height":10}},{"id":"8e6daa5a-1c8e-42f2-a433-fa4505451fc5","block_type":"box","text":", treat them as if they were","page_number":80,"box":{"x":676,"y":335,"width":202,"height":12}},{"id":"e4073de0-7714-4f26-9c74-69b7e2523df1","block_type":"box","text":"closed out at the end of each year) and (b) may cause the Fund to recognize income without receiving","page_number":80,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"fac9277e-9391-457a-9d3b-cc80ed0df1e1","block_type":"box","text":"cash with which to pay dividends or make distributions in amounts necessary to satisfy the distribution","page_number":80,"box":{"x":116,"y":366,"width":762,"height":12}},{"id":"0e576c62-dc0e-4557-8f1f-a0b2d6617a54","block_type":"box","text":"requirements for avoiding income and excise taxes. The Fund will monitor its transactions, will make","page_number":80,"box":{"x":117,"y":382,"width":748,"height":12}},{"id":"13f6fec5-8fab-4dc6-af79-3f1b7601c309","block_type":"box","text":"the appropriate tax elections and will make the appropriate entries in its books and records in order to","page_number":80,"box":{"x":116,"y":397,"width":759,"height":12}},{"id":"ed76c965-4095-4d52-a5a1-4da2d633ca34","block_type":"box","text":"mitigate the effect of these rules and prevent disqualification of the Fund as a RIC.","page_number":80,"box":{"x":117,"y":413,"width":615,"height":12}},{"id":"91faf23c-8a86-4bca-9fdb-d21a43cd71d6","block_type":"box","text":"The Fund’s investments in so-called “Section 1256 contracts,” such as regulated futures contracts,","page_number":80,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"0e64d9b6-39c0-478d-8b8b-4318d21388e1","block_type":"box","text":"most non-U.S. currency forward contracts traded in the interbank market and options on most security","page_number":80,"box":{"x":117,"y":459,"width":762,"height":12}},{"id":"345cc87c-4f3f-4b4b-bfac-be7f9fc3c6e9","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":80,"box":{"x":117,"y":475,"width":751,"height":12}},{"id":"4ace345d-7f08-4ef4-873f-5b4723795265","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":80,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"5461062b-f3fd-4a11-9226-fc8853314872","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":80,"box":{"x":117,"y":506,"width":728,"height":12}},{"id":"c849a022-6a7c-42df-9e6c-c174c6e4b3b5","block_type":"box","text":"value at the end of the taxable year. The resulting gain","page_number":80,"box":{"x":116,"y":521,"width":411,"height":12}},{"id":"873b4066-100e-4504-9f41-9e5807621ed9","block_type":"box","text":"or loss will be combined with any gain or loss","page_number":80,"box":{"x":527,"y":521,"width":340,"height":12}},{"id":"28520388-6fcf-4e0c-bf30-26fdfc5ea2bb","block_type":"box","text":"realized by the Fund from positions in Section 1256 contracts closed during the taxable year. Provided","page_number":80,"box":{"x":117,"y":537,"width":764,"height":12}},{"id":"b0d96206-8c07-41e9-8dad-69a8296abb24","block_type":"box","text":"such positions were held as capital assets and were not","page_number":80,"box":{"x":116,"y":552,"width":420,"height":12}},{"id":"5de1d6c5-193a-4b79-b3d7-61e86be5590d","block_type":"box","text":"part of a “hedging transaction” nor part of a","page_number":80,"box":{"x":537,"y":552,"width":324,"height":12}},{"id":"6233ea99-f1d7-45cf-b484-746be9eb7e0c","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":80,"box":{"x":116,"y":568,"width":741,"height":12}},{"id":"889f757b-2880-449f-8cfd-fe2596053dfe","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":80,"box":{"x":116,"y":583,"width":759,"height":12}},{"id":"072dac29-9d46-4782-8039-76eef170f455","block_type":"box","text":"of time the positions were actually held by the Fund.","page_number":80,"box":{"x":116,"y":599,"width":392,"height":12}},{"id":"8c09ed8a-6fc6-42e3-aa84-453164d6a469","block_type":"box","text":"As a result of entering into swap contracts, the Fund may make or receive periodic net payments. The","page_number":80,"box":{"x":116,"y":630,"width":762,"height":12}},{"id":"b2d44214-0512-48b8-bb82-0e603bf810d1","block_type":"box","text":"Fund may also make or receive a payment when a swap is terminated prior to maturity through an","page_number":80,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"954f4199-3de9-404b-bcb4-e8ec11f4ecb8","block_type":"box","text":"assignment of the swap or other closing transaction. Periodic net payments will generally constitute","page_number":80,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"5a9bdec8-c775-4754-b56b-61cab7c4bb6d","block_type":"box","text":"ordinary income or deductions, while termination of a swap will generally result in capital gain or loss","page_number":80,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"6d3d036c-b468-4379-9516-64951cda6730","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":80,"box":{"x":117,"y":692,"width":742,"height":12}},{"id":"38cb2a01-7bd1-4196-b884-60c4f904c9b5","block_type":"box","text":"one year). With respect to certain types of swaps, the Fund may be required to currently recognize","page_number":80,"box":{"x":116,"y":707,"width":731,"height":12}},{"id":"9f1f75f4-86ae-492a-966a-06ba1ae9a7ca","block_type":"box","text":"income or loss with respect to future payments on such swaps or may elect under certain","page_number":80,"box":{"x":117,"y":723,"width":660,"height":12}},{"id":"f18da107-ec4c-4a8d-8d61-83f20e9bcee8","block_type":"box","text":"circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.","page_number":80,"box":{"x":116,"y":738,"width":733,"height":12}},{"id":"734be7e5-ef2e-4ea5-9bb1-5bf0b7c0a23d","block_type":"box","text":"Qualified Dividend Income and Qualified REIT Dividends.","page_number":80,"box":{"x":116,"y":769,"width":454,"height":10}},{"id":"81c1172b-bea4-4b15-802f-8ad1147c24dc","block_type":"box","text":"For non-corporate shareholders,","page_number":80,"box":{"x":578,"y":769,"width":238,"height":12}},{"id":"83a8cbc8-e5d6-4045-bc8a-6f5da627846f","block_type":"box","text":"distributions by the Fund of investment company taxable income (including any short-term capital","page_number":80,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"68147652-73ee-4458-87c5-67881331a5bf","block_type":"box","text":"gains), whether received in cash or shares, will be taxable either as ordinary income or as qualified","page_number":80,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"0092d03c-c326-43b7-a14d-1377fe103c5a","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":80,"box":{"x":116,"y":816,"width":729,"height":12}},{"id":"4bff2b28-c311-462f-b154-84df840438fb","block_type":"box","text":"receives qualified dividend income on the securities it holds and the Fund reports the distribution as","page_number":80,"box":{"x":117,"y":831,"width":742,"height":12}},{"id":"b0347030-2987-4855-acaa-14e0d510971d","block_type":"box","text":"qualified dividend income. Qualified dividend income is, in general, dividend income from taxable U.S.","page_number":80,"box":{"x":116,"y":847,"width":761,"height":12}},{"id":"fd880ef7-959f-4384-8ef3-984986849324","block_type":"box","text":"corporations and certain non-U.S. corporations (","page_number":80,"box":{"x":116,"y":862,"width":358,"height":12}},{"id":"1e504f3d-6ace-4d9b-8b7a-20c506d816c8","block_type":"box","text":"e.g.","page_number":80,"box":{"x":476,"y":865,"width":25,"height":9}},{"id":"c8b1d796-03c0-4d6c-8771-d2d76a6e29a4","block_type":"box","text":", non-U.S. corporations","page_number":80,"box":{"x":505,"y":862,"width":176,"height":12}},{"id":"94986a50-058b-46ad-adb1-2364006e0df6","block_type":"box","text":"77","page_number":80,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"655ac3fb-df2e-462d-8562-9b080f081015","block_type":"box","text":"NM1026U-6042785-80/259","page_number":80,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e6fbcf32-6295-4980-89d6-534fc444c26e","block_type":"box","text":"that are not PFICs and which are incorporated in a possession of the U.S. or in certain countries with a","page_number":81,"box":{"x":116,"y":87,"width":768,"height":12}},{"id":"eefad8e2-17cd-4c71-82ba-a9e45217a4ef","block_type":"box","text":"comprehensive tax treaty with the U.S., or the stock of which is readily tradable on an established","page_number":81,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"5ed99f25-ee4a-46fb-a162-189745afadca","block_type":"box","text":"securities market in the U.S. (where the dividends are paid with respect to such stock)). Substitute","page_number":81,"box":{"x":116,"y":118,"width":733,"height":12}},{"id":"ecfcf55c-9aaf-4801-9a1b-a5b49d9825ef","block_type":"box","text":"payments received by the Fund with respect to dividends paid on securities lent out will not be qualified","page_number":81,"box":{"x":117,"y":134,"width":770,"height":12}},{"id":"b09aa63e-4c34-4034-9ff8-dd18d759aa4c","block_type":"box","text":"dividend income.","page_number":81,"box":{"x":116,"y":149,"width":131,"height":10}},{"id":"b40b9625-a5b1-473a-b076-284fe1c39b1f","block_type":"box","text":"A dividend from the Fund will not be treated as qualified","page_number":81,"box":{"x":116,"y":176,"width":409,"height":12}},{"id":"66d6617c-b456-49b5-8471-14df96856098","block_type":"box","text":"dividend income to the extent that: (i) the","page_number":81,"box":{"x":526,"y":176,"width":301,"height":12}},{"id":"690b2394-05b1-4c3f-bf62-a7e20ee7f11c","block_type":"box","text":"shareholder has not held the shares on which t","page_number":81,"box":{"x":116,"y":192,"width":341,"height":9}},{"id":"67a02c18-2e55-4042-80dd-a78939866ac3","block_type":"box","text":"he dividend was paid for 61 days during the 121-day","page_number":81,"box":{"x":458,"y":192,"width":385,"height":12}},{"id":"ee37fd20-7e44-4450-959f-9ff9ebde1d7a","block_type":"box","text":"period that begins on the date that is 60 days befor","page_number":81,"box":{"x":117,"y":207,"width":369,"height":12}},{"id":"c31a9b3a-e42b-44d0-a359-119e8f57547b","block_type":"box","text":"e the date on which the shares become ex-dividend","page_number":81,"box":{"x":487,"y":207,"width":380,"height":10}},{"id":"47422605-68dc-40a8-ac2f-d23223d27c3f","block_type":"box","text":"with respect to such dividend or the Fund fails to sati","page_number":81,"box":{"x":116,"y":223,"width":381,"height":12}},{"id":"183e83cd-b20e-41fc-8c79-964cb041aee3","block_type":"box","text":"sfy those holding period requirements with respect to","page_number":81,"box":{"x":498,"y":223,"width":389,"height":12}},{"id":"f62fea81-dbec-4539-a8bd-9d071aadeecc","block_type":"box","text":"the securities it holds that paid the dividends distri","page_number":81,"box":{"x":116,"y":238,"width":360,"height":12}},{"id":"1752f584-0f91-4e16-8a7f-4018f36c744f","block_type":"box","text":"buted to the shareholder (or, in the case of certain","page_number":81,"box":{"x":478,"y":238,"width":368,"height":12}},{"id":"18ae15a8-f7b1-46c8-9223-4002b00b1c72","block_type":"box","text":"preferred stocks, the holding requi","page_number":81,"box":{"x":117,"y":254,"width":246,"height":12}},{"id":"bc72c6df-995e-4e9a-9e18-4c387f180b39","block_type":"box","text":"rement of 91 days during the 181-day","page_number":81,"box":{"x":365,"y":254,"width":273,"height":12}},{"id":"2b706885-b8b8-4c82-bc2d-5ea146b7210a","block_type":"box","text":"y period beginning on the date that","page_number":81,"box":{"x":638,"y":254,"width":250,"height":12}},{"id":"8e275ef7-be6f-4ea3-8223-67f16a1c3871","block_type":"box","text":"is 90 days before the date on which the stock becomes","page_number":81,"box":{"x":117,"y":269,"width":404,"height":12}},{"id":"4f152f3b-e7e7-44bc-b9b2-fe47307b3304","block_type":"box","text":"ex-dividend with respect to such dividend); (ii) the","page_number":81,"box":{"x":522,"y":269,"width":364,"height":12}},{"id":"f51f8a9e-d45d-4479-80cd-fda64991a20e","block_type":"box","text":"Fund or the shareholder is under an obligation (whether pur","page_number":81,"box":{"x":117,"y":285,"width":433,"height":12}},{"id":"4b9d3e82-0730-4505-ac3b-8543cfed915a","block_type":"box","text":"suant to a short sale or otherwise) to make","page_number":81,"box":{"x":550,"y":285,"width":315,"height":12}},{"id":"4954591e-d7c0-4679-9a67-3621014d871f","block_type":"box","text":"related payments with respect to substantially similar or","page_number":81,"box":{"x":117,"y":300,"width":402,"height":12}},{"id":"0dbb90f1-9853-4c5b-949c-8bb5cf8cf9c2","block_type":"box","text":"r related property; or (iii) the shareholder elects to","page_number":81,"box":{"x":519,"y":300,"width":359,"height":12}},{"id":"a3012591-6cd5-41b8-9564-d4ea8c12389f","block_type":"box","text":"treat such dividend as investment income under Se","page_number":81,"box":{"x":116,"y":316,"width":373,"height":9}},{"id":"5b9099e7-850d-4004-b4a0-4df6562641f4","block_type":"box","text":"ction 163(d)(4)(B) of the Internal Revenue Code.","page_number":81,"box":{"x":490,"y":316,"width":357,"height":12}},{"id":"4839d31a-1fde-4724-9085-7f8f0b64c766","block_type":"box","text":"Dividends received by the Fund from a REIT or another RIC may be treated as qualified dividend","page_number":81,"box":{"x":117,"y":343,"width":724,"height":12}},{"id":"19fe02f8-c4e4-47a1-94e2-e93b6f6aa257","block_type":"box","text":"income only to the extent the dividend distributions are attributable to qualified dividend income","page_number":81,"box":{"x":117,"y":358,"width":710,"height":12}},{"id":"1f51b88d-fa7f-46a0-946c-bbde7f50bda5","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":81,"box":{"x":117,"y":374,"width":744,"height":12}},{"id":"8275fe14-0b5b-4e4b-bbc4-4e3a047dc505","block_type":"box","text":"and distributed to a shareholder generally will be taxable to the shareholder as ordinary income.","page_number":81,"box":{"x":116,"y":389,"width":716,"height":12}},{"id":"7f1286da-1880-4d72-b6ce-c84e354d5943","block_type":"box","text":"However, a non-corporate taxpayer who is a direct REIT shareholder may claim a 20% “qualified","page_number":81,"box":{"x":117,"y":405,"width":722,"height":12}},{"id":"3a204c7e-0cbc-40b5-a71d-e02ddec3a1a2","block_type":"box","text":"business income” deduction for ordinary REIT dividends, and a RIC may report dividends as eligible for","page_number":81,"box":{"x":117,"y":420,"width":770,"height":12}},{"id":"42f14d9a-1b41-43b9-884c-37c77ffb6409","block_type":"box","text":"this deduction to the extent the RIC’s income is derived from ordinary REIT dividends (reduced by","page_number":81,"box":{"x":116,"y":436,"width":731,"height":12}},{"id":"0a24cb6f-5550-498c-96e5-2cffd44ae453","block_type":"box","text":"allocable RIC expenses). A shareholder may treat the dividends as such provided the RIC and the","page_number":81,"box":{"x":116,"y":451,"width":734,"height":12}},{"id":"8206c6a6-7d47-4c31-9270-7bd54f92839d","block_type":"box","text":"shareholder satisfy applicable holding period requirements. A dividend from the Fund will not be","page_number":81,"box":{"x":116,"y":467,"width":716,"height":12}},{"id":"2dbc377b-35f2-4604-b669-13bb2d295335","block_type":"box","text":"treated as qualified REIT dividend income to the extent that: (i) the shareholder has not held the shares","page_number":81,"box":{"x":116,"y":482,"width":772,"height":12}},{"id":"bbd2ff67-0700-48d6-a2b3-987a0643ce96","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":81,"box":{"x":116,"y":498,"width":747,"height":12}},{"id":"1f6d9055-f60f-4c2b-ad59-310559fc4aab","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":81,"box":{"x":116,"y":513,"width":761,"height":12}},{"id":"48d8064e-1c8c-4c5c-be29-7cfaca8d5829","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":81,"box":{"x":116,"y":529,"width":763,"height":12}},{"id":"10058200-9840-4bc6-9109-75fbf09db982","block_type":"box","text":"holds that paid the dividends distributed to the shareholder; or (ii) the Fund or the shareholder is under","page_number":81,"box":{"x":117,"y":544,"width":764,"height":12}},{"id":"4610c5a3-00f9-42c9-bb0e-a1f62d67c9fc","block_type":"box","text":"an obligation (whether pursuant to a short sale or otherwise) to make related payments with respect to","page_number":81,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"f0ff9eaa-9056-4c79-b6c5-7d639f2ec74e","block_type":"box","text":"substantially similar or related property. Distributions by the Fund of its net short-term capital gains will","page_number":81,"box":{"x":116,"y":575,"width":764,"height":12}},{"id":"cc5d22b2-bf6b-4906-bcf8-0f591e1c3b39","block_type":"box","text":"be taxable as ordinary income.","page_number":81,"box":{"x":117,"y":591,"width":226,"height":12}},{"id":"d900b32f-6516-44b2-9554-f398a7f684ed","block_type":"box","text":"Constructive Sales.","page_number":81,"box":{"x":116,"y":618,"width":155,"height":10}},{"id":"56000595-c3ca-470d-ae23-95828c80172b","block_type":"box","text":"If the Fund enters into a “constructive sale” of any appreciated financial position","page_number":81,"box":{"x":272,"y":618,"width":601,"height":12}},{"id":"65af66b2-29b0-434b-879b-7cd00e48bdf5","block_type":"box","text":"in stock, a partnership interest, or certain debt instruments, the Fund will be treated as if it had sold and","page_number":81,"box":{"x":117,"y":634,"width":771,"height":11}},{"id":"b5f6cd80-c83c-4154-a44f-a87fab418656","block_type":"box","text":"immediately repurchased the property and must recognize gain (but not loss) with respect to that","page_number":81,"box":{"x":117,"y":649,"width":722,"height":12}},{"id":"ad671bdf-960f-4a68-9a88-9780e19dd3e9","block_type":"box","text":"position. A constructive sale occurs when the Fund enters into one of the following transactions with","page_number":81,"box":{"x":117,"y":665,"width":740,"height":12}},{"id":"0f44502e-3a75-45a4-94fc-caa4bd28dcb8","block_type":"box","text":"respect to the same or substantially identical property: (i) a short sale; (ii) an offsetting notional","page_number":81,"box":{"x":117,"y":680,"width":700,"height":12}},{"id":"386ba536-16f3-4b85-8abf-e4f7e1b555a2","block_type":"box","text":"principal contract; (iii) a futures or forward contract; or (iv) other transactions identified in Treasury","page_number":81,"box":{"x":117,"y":696,"width":725,"height":12}},{"id":"11dfcc5e-eaab-4736-992d-f86077fa94bb","block_type":"box","text":"Regulations that may be promulgated in the future. The character of the gain from constructive sales","page_number":81,"box":{"x":117,"y":711,"width":745,"height":12}},{"id":"3ac1a029-8c79-4e39-9a3f-27230140a2cd","block_type":"box","text":"will depend upon the Fund’s holding period in the property. Losses from a constructive sale of property","page_number":81,"box":{"x":116,"y":727,"width":762,"height":12}},{"id":"e4175f29-3063-4d88-a3dc-3084eb63ab03","block_type":"box","text":"will be recognized when the property is subsequently disposed of. The character of such losses will","page_number":81,"box":{"x":116,"y":742,"width":736,"height":12}},{"id":"f08a2931-e3c5-47fa-890f-31dce16133e2","block_type":"box","text":"depend upon the Fund’s holding period in the property and the application of various loss deferral","page_number":81,"box":{"x":116,"y":758,"width":723,"height":12}},{"id":"595effaa-f24f-4699-8420-b2b270b1fe05","block_type":"box","text":"provisions in the Code. Constructive sale treatment does not apply to a transaction if such transaction","page_number":81,"box":{"x":117,"y":773,"width":753,"height":12}},{"id":"51208932-fed2-4ef9-92dc-227cb58f468a","block_type":"box","text":"is closed before the end of the 30th day after the","page_number":81,"box":{"x":117,"y":789,"width":360,"height":12}},{"id":"33d940f4-27f6-4d61-9421-5cc862478db5","block_type":"box","text":"close of the Fund’s taxable year, the Fund holds the","page_number":81,"box":{"x":482,"y":789,"width":386,"height":12}},{"id":"959c4966-1868-4d8f-b342-12ee32ed384c","block_type":"box","text":"appreciated financial position throughout the 60-day period beginning with the day such transaction","page_number":81,"box":{"x":116,"y":804,"width":736,"height":12}},{"id":"aa4429a1-1328-4873-85f8-0675520b1284","block_type":"box","text":"was closed, and the Fund’s risk of loss with respect to such position is not reduced at any time during","page_number":81,"box":{"x":116,"y":820,"width":752,"height":12}},{"id":"f74f1c6b-24ce-412c-819a-90d493ee022c","block_type":"box","text":"such 60-day period.","page_number":81,"box":{"x":116,"y":835,"width":152,"height":12}},{"id":"97e47097-ac61-4da0-bec4-fbdd7bbbabe3","block_type":"box","text":"Corporate Dividends Received Deduction.","page_number":81,"box":{"x":116,"y":862,"width":334,"height":12}},{"id":"2629c729-c2de-4da5-995f-193795882842","block_type":"box","text":"For corporate shareholders, dividends paid by the Fund","page_number":81,"box":{"x":451,"y":862,"width":423,"height":12}},{"id":"6a731c26-864c-4f8a-bfe4-883ed920284a","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":81,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"bbf359e3-0f24-4588-a243-b276e73bc570","block_type":"box","text":"78","page_number":81,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9c924cf7-bf0d-4e34-8f72-2f6a3d72a3d4","block_type":"box","text":"NM1026U-6042785-81/259","page_number":81,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9592bd16-d5f2-46c6-a754-27c553095cee","block_type":"box","text":"federal dividends received deduction and the Fund reports the distribution as eligible for such","page_number":82,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"4cf94c2e-4218-48c6-a44a-332188e8e0ee","block_type":"box","text":"deduction. A 46-day minimum holding period during the 90-day period that begins 45 days prior to","page_number":82,"box":{"x":116,"y":103,"width":732,"height":12}},{"id":"ec54e976-29f0-43ad-a3be-059dd73917a1","block_type":"box","text":"ex-dividend date (or 91-day minimum holding period during the 180-day period beginning 90 days prior","page_number":82,"box":{"x":116,"y":118,"width":768,"height":12}},{"id":"913678bb-2e2a-4c30-a36e-2c2afabd1c45","block_type":"box","text":"to ex-dividend date for certain preference dividends) during which risk of loss may not be diminished is","page_number":82,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"d721fc99-4250-4002-8829-3ee331699497","block_type":"box","text":"required for the applicable shares, at both the Fund and shareholder level, for a dividend to be eligible","page_number":82,"box":{"x":117,"y":149,"width":760,"height":12}},{"id":"e550f8b5-fdf4-4c6e-a3b5-2bffb91f1f87","block_type":"box","text":"for the dividends received deduction. Dividends received by the Fund from a REIT are not eligible for","page_number":82,"box":{"x":116,"y":165,"width":753,"height":12}},{"id":"02bbd441-a6a6-4909-8dd1-48ea239ac427","block_type":"box","text":"the dividends received deduction. In addition, dividends received by the Fund from another RIC may","page_number":82,"box":{"x":116,"y":180,"width":749,"height":12}},{"id":"939481e2-efc4-4ccd-9418-d6388b2481b5","block_type":"box","text":"be eligible for such deduction only to the extent the dividends received from such RIC would","page_number":82,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"3c2f48ac-78e2-4c10-a011-e97c8bef38d1","block_type":"box","text":"themselves qualify for the dividends received deduction.","page_number":82,"box":{"x":116,"y":211,"width":422,"height":12}},{"id":"78ff3806-ccd2-42da-836c-95e2427a6c13","block_type":"box","text":"Tax-Exempt Investors and Excess Inclusion Income.","page_number":82,"box":{"x":116,"y":239,"width":423,"height":12}},{"id":"a19e3d0a-fadb-4192-b83d-da4094ca3fe2","block_type":"box","text":"Under current law, the Fund serves to block","page_number":82,"box":{"x":541,"y":239,"width":329,"height":11}},{"id":"054eaa83-0f7f-42ce-8d74-19ad634abb4a","block_type":"box","text":"unrelated business taxable income (“UBTI”) from being realized by its tax-exempt shareholders. UBTI","page_number":82,"box":{"x":117,"y":254,"width":758,"height":13}},{"id":"9e63e94f-9932-4c90-a921-9bcddb24e5de","block_type":"box","text":"includes unrelated debt-financed income, which generally consists of income and gains derived by a","page_number":82,"box":{"x":117,"y":270,"width":748,"height":12}},{"id":"ddd368dd-45ec-46d9-bab4-9d2df20cd844","block_type":"box","text":"tax-exempt investor from the disposition of property that has been acquired with borrowed money. A","page_number":82,"box":{"x":116,"y":285,"width":748,"height":13}},{"id":"f7a2a349-3c4e-4ec7-aa33-910248f91fa1","block_type":"box","text":"tax-exempt shareholder could realize UBTI by virtue of its investment in the Fund if the shareholder","page_number":82,"box":{"x":116,"y":301,"width":742,"height":12}},{"id":"68ae269c-b25c-41c7-9abb-7bd55e643dc2","block_type":"box","text":"borrows money to acquire its shares of the Fund.","page_number":82,"box":{"x":117,"y":316,"width":368,"height":13}},{"id":"b1e7ac89-1243-438a-96a4-a8b5928bb65d","block_type":"box","text":"Certain types of income received by the Fund from REITs, real estate mortgage investment conduits,","page_number":82,"box":{"x":117,"y":344,"width":754,"height":12}},{"id":"e064c3e9-f9ea-4c73-b65b-398794913fdc","block_type":"box","text":"taxable mortgage pools or other investments may cause the Fund to report some or all of its","page_number":82,"box":{"x":116,"y":360,"width":689,"height":12}},{"id":"54a8aebe-531c-44fa-872e-1b375c4f2b0a","block_type":"box","text":"distributions as “excess inclusion income.” To Fund shareholders, such excess inclusion income may:","page_number":82,"box":{"x":116,"y":375,"width":760,"height":12}},{"id":"9163ba8e-9eaa-4670-9066-2ae86e28debb","block_type":"box","text":"(i) constitute taxable income, as UBTI for those shareholders who would otherwise be tax-exempt such","page_number":82,"box":{"x":117,"y":391,"width":768,"height":12}},{"id":"7a5c3989-944b-415d-94ee-1a115acee961","block_type":"box","text":"as individual retirement accounts, 401(k) accounts, Keogh plans, pension plans and certain charitable","page_number":82,"box":{"x":116,"y":406,"width":760,"height":12}},{"id":"c97e5f6a-a51d-469f-b855-2557c4800ef0","block_type":"box","text":"entities; (ii) not be offset by otherwise allowable deductions for tax purposes; (iii) not be eligible for","page_number":82,"box":{"x":116,"y":422,"width":733,"height":12}},{"id":"09c941f2-e76d-4df0-91f7-7235de4d4c89","block_type":"box","text":"reduced U.S. withholding for non-U.S. shareholders even from tax treaty countries; and (iv) cause the","page_number":82,"box":{"x":117,"y":437,"width":758,"height":12}},{"id":"78b1661e-bd81-4e28-954e-11d9b311f3dc","block_type":"box","text":"Fund to be subject to tax if certain “disqualified organizations,” as defined by the Internal Revenue","page_number":82,"box":{"x":117,"y":453,"width":731,"height":12}},{"id":"df9a59cd-ef89-40bb-a132-d5b7d39321fb","block_type":"box","text":"Code, are Fund shareholders. If a charitable remainder annuity trust or a charitable remainder unitrust","page_number":82,"box":{"x":117,"y":468,"width":761,"height":12}},{"id":"1139eaf0-c41f-4ef9-8a0c-6ae8a3fe415d","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":82,"box":{"x":117,"y":484,"width":745,"height":12}},{"id":"1f128c8d-e34e-418b-a860-9c26ebef8950","block_type":"box","text":"excise tax on the UBTI is imposed on the trust.","page_number":82,"box":{"x":116,"y":500,"width":352,"height":11}},{"id":"cc1caa3f-019c-4ff8-86f7-eef313053d64","block_type":"box","text":"The Fund tries to avoid investing in REITs that are expected to generate excess inclusion income, but","page_number":82,"box":{"x":116,"y":527,"width":760,"height":12}},{"id":"f1a0d5f1-bd61-42cb-b7a5-90cda7ec88ef","block_type":"box","text":"the Fund may not always be successful in doing so. Because information about a REIT’s investments","page_number":82,"box":{"x":116,"y":543,"width":757,"height":12}},{"id":"8e4a7366-e25b-46e7-a57e-2178a77c8030","block_type":"box","text":"may be inadequate or inaccurate, or because a REIT may change its investment program, the Fund","page_number":82,"box":{"x":117,"y":558,"width":746,"height":12}},{"id":"02928458-9c26-40da-8b76-545150d664d0","block_type":"box","text":"may not be successful in avoiding the consequences described above. Avoidance of investments in","page_number":82,"box":{"x":117,"y":574,"width":743,"height":12}},{"id":"21da773a-c523-45cc-bb8a-42ab1f79d5ba","block_type":"box","text":"REITs that generate excess inclusion income may require the Fund to forego otherwise attractive","page_number":82,"box":{"x":117,"y":589,"width":726,"height":12}},{"id":"0ffaf705-0a79-49b2-b161-28c0fb42b723","block_type":"box","text":"investment opportunities.","page_number":82,"box":{"x":117,"y":605,"width":191,"height":12}},{"id":"16df8e15-6a75-42fc-9d71-de1b5816696f","block_type":"box","text":"Non-U.S. Investments.","page_number":82,"box":{"x":117,"y":633,"width":182,"height":9}},{"id":"7fbec9e1-92de-43d5-9828-4bb4ac2c4eaa","block_type":"box","text":"Under Section 988 of the Internal Revenue Code, gains or losses attributable","page_number":82,"box":{"x":300,"y":633,"width":577,"height":12}},{"id":"29cdf0ee-a326-434d-af5c-a05aa6f5a2a6","block_type":"box","text":"to fluctuations in exchange rates between the time the Fund accrues income or receivables or","page_number":82,"box":{"x":116,"y":648,"width":701,"height":12}},{"id":"4479c212-adf5-4534-ab52-ecc3f654a951","block_type":"box","text":"expenses or other liabilities denominated in a non-U.S. currency and the time the Fund actually","page_number":82,"box":{"x":116,"y":664,"width":707,"height":12}},{"id":"6d0ffe6a-8a3b-4ccc-8589-4004bb7b2f10","block_type":"box","text":"collects such income or pays such liabilities are generally treated as ordinary income or ordinary loss.","page_number":82,"box":{"x":116,"y":679,"width":752,"height":12}},{"id":"94a8de1c-cf48-4bd7-9106-ed45ea71ddc5","block_type":"box","text":"In general, gains (and losses) realized on debt instruments will be treated as Section 988 gain (or loss)","page_number":82,"box":{"x":117,"y":695,"width":761,"height":12}},{"id":"03533fce-5333-443c-ba1d-96e5bf4b6f35","block_type":"box","text":"to the extent attributable to changes in exchange rates between the U.S. dollar and the currencies in","page_number":82,"box":{"x":116,"y":710,"width":744,"height":12}},{"id":"ce59dc1b-c8d8-4f7b-bd58-48e95095bc36","block_type":"box","text":"which the instruments are denominated. Similarly, gains or losses on non-U.S. currency, non-U.S.","page_number":82,"box":{"x":116,"y":726,"width":726,"height":12}},{"id":"511b4485-b5e5-4ded-8795-04d1e56c5260","block_type":"box","text":"currency forward contracts and certain non-U.S. currency options or futures contracts denominated in","page_number":82,"box":{"x":116,"y":741,"width":753,"height":12}},{"id":"557e691c-e082-48e9-be34-8277b72f4dac","block_type":"box","text":"non-U.S. currency, to the extent attributable to fluctuations in exchange rates between the acquisition","page_number":82,"box":{"x":117,"y":757,"width":750,"height":12}},{"id":"e6f329f4-5018-4864-b251-89318524958c","block_type":"box","text":"and disposition dates, are also treated as ordinary income or loss unless the Fund were to elect","page_number":82,"box":{"x":116,"y":772,"width":710,"height":12}},{"id":"aff7e8a8-cb57-4234-849b-93b87857a78d","block_type":"box","text":"otherwise.","page_number":82,"box":{"x":116,"y":788,"width":75,"height":9}},{"id":"660eca4e-5bea-41e4-9b14-543505a7e06c","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":82,"box":{"x":116,"y":816,"width":744,"height":12}},{"id":"85053e8b-22f2-4b54-8f30-370c247e151b","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":82,"box":{"x":116,"y":831,"width":741,"height":12}},{"id":"b772e54e-7dad-4ba8-84ba-2fcd3dee0f51","block_type":"box","text":"Fund provided that the Fund held the security on the dividend settlement date and for at least","page_number":82,"box":{"x":117,"y":847,"width":697,"height":12}},{"id":"fe2b8a4b-f519-4db0-96d9-9e6db5bca275","block_type":"box","text":"15 additional days immediately before and/or thereafter, with the result that each investor with respect","page_number":82,"box":{"x":118,"y":862,"width":759,"height":12}},{"id":"d6a31938-7e18-40f5-8860-b14b08eb927f","block_type":"box","text":"to shares of the Fund held for a minimum 16-day holding period at the time of deemed distribution will","page_number":82,"box":{"x":116,"y":878,"width":760,"height":12}},{"id":"a5144938-cdd9-42b5-9293-a9bc9767adfc","block_type":"box","text":"79","page_number":82,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"24563681-c5d3-4781-9a8e-cbdd91573b51","block_type":"box","text":"NM1026U-6042785-82/259","page_number":82,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"4e07758f-7541-4270-8ae0-b31ff094be42","block_type":"box","text":"(i) include in gross income, even though not actually received, the investor’s pro rata share of the","page_number":83,"box":{"x":117,"y":87,"width":724,"height":12}},{"id":"6609f208-a81b-445c-b6fb-a5690142d4ac","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":83,"box":{"x":117,"y":102,"width":747,"height":13}},{"id":"3053abff-ec16-436b-b5d4-2e0cb0af6f38","block_type":"box","text":"investors who itemize their deductions on their personal tax returns) or credit (in calculating U.S.","page_number":83,"box":{"x":117,"y":118,"width":718,"height":12}},{"id":"05fd0241-0c80-4fbc-9bbe-36426603ec96","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":83,"box":{"x":116,"y":134,"width":735,"height":12}},{"id":"c219226b-400f-43c0-8802-08a4ee1ac550","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":83,"box":{"x":116,"y":149,"width":770,"height":12}},{"id":"013cc249-633f-4fd0-810f-506ffbf5de6a","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":83,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"7e1fe0e1-cc36-4c04-afaf-52920d56db30","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":83,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"d990d198-9525-4772-ba6f-1291e7b88d65","block_type":"box","text":"the Fund elects to “pass through” its non-U.S. taxes may be treated as receiving additional dividend","page_number":83,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"c43a3739-669c-449a-b76e-04724894cc44","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":83,"box":{"x":117,"y":211,"width":717,"height":12}},{"id":"cd826949-ec75-490f-9f6c-eaa0e698dda5","block_type":"box","text":"federal income tax otherwise payable with respect to the investor’s non-U.S. source income. For this","page_number":83,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"08e59e53-a020-455d-9ad2-1cac72893b1e","block_type":"box","text":"purpose, shareholders must treat as non-U.S. source gross income (i) their proportionate shares of","page_number":83,"box":{"x":117,"y":242,"width":739,"height":12}},{"id":"672debaa-efb5-4152-bb8d-17f00dd7ee44","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":83,"box":{"x":117,"y":258,"width":750,"height":12}},{"id":"525694b2-bb6d-4793-b069-51fb768048f3","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":83,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"6f2be8c2-6053-4a9a-9a7f-466063bce191","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":83,"box":{"x":116,"y":289,"width":758,"height":12}},{"id":"f79817f6-c69b-47b0-8b72-2f00ffbfbee7","block_type":"box","text":"tax credit may be claimed. If your Fund shares are loaned pursuant to securities lending arrangements,","page_number":83,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"e75458fd-68f1-4053-9e48-4a2fec83c645","block_type":"box","text":"you may lose the ability to use any non-U.S. tax credits passed through by the","page_number":83,"box":{"x":116,"y":320,"width":580,"height":12}},{"id":"d8858b39-cb75-4373-a03b-2121f72cb5b1","block_type":"box","text":"Fund or to treat Fund","page_number":83,"box":{"x":703,"y":320,"width":162,"height":9}},{"id":"cf0fedd5-67fe-4697-a567-de2034063031","block_type":"box","text":"dividends (paid while the shares are held by the borrower) as qualified dividends. Regarding a short","page_number":83,"box":{"x":116,"y":335,"width":745,"height":12}},{"id":"93927dc5-0eac-4ae2-bb3a-6eccc3c0ca35","block_type":"box","text":"sale with respect to shares of the Fund, substitute payments made to the lender of such shares may","page_number":83,"box":{"x":116,"y":351,"width":749,"height":12}},{"id":"ebf30742-14fc-432c-9192-1c584b3ce0db","block_type":"box","text":"not be deductible under certain circumstances. Consult your financial intermediary or tax advisor.","page_number":83,"box":{"x":117,"y":366,"width":725,"height":12}},{"id":"7e4be217-12c1-4356-a107-b2a7ee860c35","block_type":"box","text":"The Fund may file refund claims in various countries to recover taxes withheld on dividend income.","page_number":83,"box":{"x":116,"y":394,"width":739,"height":12}},{"id":"3c7b413d-5fe5-4e62-baaf-8a40ab8c0097","block_type":"box","text":"Whether or when the Fund will receive a tax refund is within the control of the individual country.","page_number":83,"box":{"x":116,"y":409,"width":718,"height":13}},{"id":"c33682dc-3f35-4ed0-8005-21d7db6f3f80","block_type":"box","text":"Pending confirmatory guidance from the IRS, the refunds received may reduce the Fund’s pass","page_number":83,"box":{"x":117,"y":425,"width":713,"height":12}},{"id":"fb78e50c-c204-44d3-a795-8069744e000c","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":83,"box":{"x":116,"y":440,"width":765,"height":13}},{"id":"2c7ac737-570f-466d-9dfb-ee5edd76a5d5","block_type":"box","text":"an IRS compliance fee to cover the effect of the tax credits previously passed through to shareholders","page_number":83,"box":{"x":116,"y":456,"width":763,"height":12}},{"id":"926add8c-2f97-4daa-bf63-16e343a9bfed","block_type":"box","text":"on refunded foreign taxes.","page_number":83,"box":{"x":116,"y":471,"width":194,"height":13}},{"id":"c49920b6-3dce-438f-b1eb-3739ac3dcde9","block_type":"box","text":"Controlled Foreign Corporations.","page_number":83,"box":{"x":116,"y":499,"width":264,"height":13}},{"id":"5ece933e-7e1e-40ef-9a4e-fcce6b6b9a3f","block_type":"box","text":"The Fund may take certain positions through the Subsidiary. It is","page_number":83,"box":{"x":381,"y":499,"width":490,"height":13}},{"id":"a7a72ad8-1fd2-4c9e-b380-fc705a6c2ef8","block_type":"box","text":"expected that the Subsidiary will be a “controlled foreign corporation” and that all of its net income will","page_number":83,"box":{"x":116,"y":515,"width":759,"height":12}},{"id":"8aa21873-a837-45fa-9c3d-89089c24a190","block_type":"box","text":"be “subpart F income” for U.S. federal income tax purposes. If that is the case, the Fund will be","page_number":83,"box":{"x":117,"y":530,"width":710,"height":12}},{"id":"5616bc56-b01b-40ed-87c4-5a29321c9928","block_type":"box","text":"required to report all of the Subsidiary’s net income as ordinary income regardless of whether that","page_number":83,"box":{"x":117,"y":546,"width":729,"height":12}},{"id":"9df6688c-e709-472a-b2c7-8341442663f2","block_type":"box","text":"income would be treated differently (for example, as capital gain) at the Subsidiary level and regardless","page_number":83,"box":{"x":117,"y":561,"width":771,"height":13}},{"id":"892129e6-168c-44dc-9be2-74e9adc18d75","block_type":"box","text":"of whether that income is distributed to the Fund. (Previously taxed income will not, however, be","page_number":83,"box":{"x":116,"y":577,"width":718,"height":12}},{"id":"470edc6c-075d-4ce7-8d20-208b1ace3abb","block_type":"box","text":"taxable again when distributed.) If a net loss is realized by the Subsidiary in any taxable year, the loss","page_number":83,"box":{"x":116,"y":592,"width":760,"height":13}},{"id":"86328e59-f952-4fa0-b0ea-e2460d0fff9a","block_type":"box","text":"will generally not be available to offset the Fund’s other income. It is not expected that the Subsidiary","page_number":83,"box":{"x":116,"y":608,"width":754,"height":12}},{"id":"018bd0e4-45df-4d5a-8f9b-1549618668e2","block_type":"box","text":"will be subject to an entity-level federal tax.","page_number":83,"box":{"x":116,"y":623,"width":324,"height":13}},{"id":"05a447bc-a6d5-4aef-a141-5d9a282bdc21","block_type":"box","text":"Passive Foreign Investment Companies.","page_number":83,"box":{"x":117,"y":651,"width":326,"height":12}},{"id":"a3f8233d-6443-4059-b667-c6dadae262a1","block_type":"box","text":"If the Fund purchases shares in PFICs, it may be subject","page_number":83,"box":{"x":445,"y":651,"width":426,"height":12}},{"id":"26d8805f-08d9-4097-8715-0bd27be262f7","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":83,"box":{"x":116,"y":667,"width":757,"height":12}},{"id":"504aaeb0-c1d4-408b-8df0-ff4980d11599","block_type":"box","text":"shares even if such income is distributed as a taxable dividend by the Fund to its shareholders.","page_number":83,"box":{"x":116,"y":682,"width":705,"height":12}},{"id":"63eb053b-6577-43cf-a10e-7d3501f8b748","block_type":"box","text":"Additional charges in the nature of interest may be imposed on the Fund in respect of deferred taxes","page_number":83,"box":{"x":116,"y":698,"width":746,"height":12}},{"id":"890cb57f-5f4a-4858-9e3a-5093a0d2bf5f","block_type":"box","text":"arising from such distributions or gains.","page_number":83,"box":{"x":116,"y":713,"width":290,"height":12}},{"id":"94c5e7d1-763c-488c-bdf6-55713a89e6b4","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":83,"box":{"x":117,"y":741,"width":754,"height":12}},{"id":"d694cf93-5272-4555-bc07-05187ec807cb","block_type":"box","text":"Internal Revenue Code, in lieu of the foregoing requirements, the Fund would be required to include in","page_number":83,"box":{"x":117,"y":757,"width":757,"height":12}},{"id":"4386a770-5519-4640-ac93-41aab6d96b6a","block_type":"box","text":"income each year a portion of the ordinary earnings and net capital gains of the qualified electing fund,","page_number":83,"box":{"x":117,"y":772,"width":760,"height":12}},{"id":"a2346af1-f366-4e54-88cb-7609f2d2c1aa","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":83,"box":{"x":116,"y":788,"width":724,"height":12}},{"id":"4fc81db4-b97e-4f9b-a1e6-8f31d61ef35f","block_type":"box","text":"distribution requirements described above. In order to make this election, the Fund would be required","page_number":83,"box":{"x":116,"y":803,"width":751,"height":12}},{"id":"ec18461e-3e2e-4fb1-b882-040a24236936","block_type":"box","text":"to obtain certain annual information from the PFICs in which it invests, which may be difficult or","page_number":83,"box":{"x":116,"y":819,"width":705,"height":12}},{"id":"cc324260-74a1-42e9-b75f-997ff8a1f39b","block_type":"box","text":"impossible to obtain.","page_number":83,"box":{"x":117,"y":834,"width":157,"height":12}},{"id":"740b2e3d-5162-4624-9539-74b081ddcd51","block_type":"box","text":"Alternatively, the Fund may make a mark-to-market election that would result in the Fund being treated","page_number":83,"box":{"x":116,"y":862,"width":769,"height":12}},{"id":"1f554d97-f765-4f8b-8f95-98de8329ebe9","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":83,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"5a739276-a51b-4bc1-96e8-ecaac3fb67d2","block_type":"box","text":"80","page_number":83,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ae7a4e62-95e8-40d9-9b65-4d8579d90eb6","block_type":"box","text":"NM1026U-6042785-83/259","page_number":83,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d8f9d4a6-d19f-4f0f-b0fc-d580d0867d5b","block_type":"box","text":"report any such gains as ordinary income and would deduct any such losses as ordinary losses to the","page_number":84,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"bcb6419c-8721-4bd0-8375-e1f49063b3fd","block_type":"box","text":"extent of previously recognized gains. The election must be made separately for each PFIC owned by","page_number":84,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"2132a5e6-d349-4e8d-9e65-859f033eb1fa","block_type":"box","text":"the Fund and, once made, would be effective for all subsequent taxable years, unless revoked with the","page_number":84,"box":{"x":116,"y":118,"width":768,"height":12}},{"id":"6a5f6e1f-26ef-499d-a02e-2f5b648f685e","block_type":"box","text":"consent of the IRS. By making the election, the Fund could potentially ameliorate the adverse tax","page_number":84,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"1d6334b5-1e16-40e5-8ecd-ca87b7d63bce","block_type":"box","text":"consequences with respect to its ownership of shares in a PFIC, but in any particular year may be","page_number":84,"box":{"x":116,"y":149,"width":731,"height":12}},{"id":"84a0d6d7-b100-46f1-a510-911f5c8d1cac","block_type":"box","text":"required to recognize income in excess of the distributions it receives from PFICs and its proceeds","page_number":84,"box":{"x":117,"y":165,"width":735,"height":12}},{"id":"5fdba5ad-7ce0-417a-970a-cfa6b4f68789","block_type":"box","text":"from dispositions of PFIC stock. The Fund may have to distribute this “phantom” income and gain to","page_number":84,"box":{"x":116,"y":180,"width":746,"height":12}},{"id":"3d0c50e8-f2a3-4170-819c-189ac2836703","block_type":"box","text":"satisfy the 90% distribution requirement and to avoid imposition of the 4% excise tax.","page_number":84,"box":{"x":116,"y":196,"width":636,"height":12}},{"id":"da330c53-3a1e-449c-958e-490c00848c80","block_type":"box","text":"The Fund will make the appropriate tax elections, if possible, and take any additional steps that are","page_number":84,"box":{"x":116,"y":223,"width":740,"height":13}},{"id":"1fde3b93-aee3-4f9b-b9be-d673a52fcc7d","block_type":"box","text":"necessary to mitigate the effects of these rules.","page_number":84,"box":{"x":117,"y":239,"width":355,"height":12}},{"id":"1f8a229f-318c-4ab2-8262-ad98c4aa8b64","block_type":"box","text":"Reporting.","page_number":84,"box":{"x":117,"y":267,"width":88,"height":12}},{"id":"4f9d0a10-dff3-414e-80b9-8660e2f22e1e","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":84,"box":{"x":206,"y":266,"width":678,"height":13}},{"id":"63b13ab2-76df-4655-b746-119449c49db5","block_type":"box","text":"any single taxable year or $4 million in any combination of taxable years for an individual shareholder","page_number":84,"box":{"x":116,"y":282,"width":756,"height":12}},{"id":"1d6a0bb3-51b0-433d-a8c9-a42faf1fbbd8","block_type":"box","text":"or at least $10 million in any single taxable year or","page_number":84,"box":{"x":116,"y":297,"width":378,"height":13}},{"id":"72899e03-3a45-4430-a1eb-4eb4f9fdb36f","block_type":"box","text":"$20 million in any combination of taxable years for a","page_number":84,"box":{"x":494,"y":297,"width":392,"height":13}},{"id":"66d825b5-15dd-4f7e-944d-966366cc6718","block_type":"box","text":"corporate shareholder, the shareholder must file with the IRS a disclosure statement on IRS Form","page_number":84,"box":{"x":116,"y":313,"width":731,"height":12}},{"id":"a29e8b6c-5b3a-45e0-887a-4013a2963f55","block_type":"box","text":"8886. Direct shareholders of portfolio securities are in many cases exempted from this reporting","page_number":84,"box":{"x":116,"y":329,"width":717,"height":12}},{"id":"1c71db2c-56bf-48e0-8308-d5499ed2834f","block_type":"box","text":"requirement, but under current guidance, shareholders of a RIC are not exempted. The fact that a loss","page_number":84,"box":{"x":117,"y":344,"width":764,"height":12}},{"id":"78710334-bc86-4068-b27b-79c6058bf82a","block_type":"box","text":"is reportable under these regulations does not affect the legal determination of whether the taxpayer’s","page_number":84,"box":{"x":117,"y":360,"width":760,"height":12}},{"id":"2d21b4bd-3408-41ff-b2db-1c9723191cf2","block_type":"box","text":"treatment of the loss is proper. Shareholders should consult their tax advisors to determine the","page_number":84,"box":{"x":116,"y":375,"width":707,"height":12}},{"id":"74096cdb-d55c-4035-8654-836b1425cb72","block_type":"box","text":"applicability of these regulations in light of their individual circumstances.","page_number":84,"box":{"x":116,"y":391,"width":544,"height":12}},{"id":"31fbb8b1-531b-4f85-9f0f-d0db1230ce35","block_type":"box","text":"Other Taxes.","page_number":84,"box":{"x":116,"y":419,"width":106,"height":9}},{"id":"713365bb-d68a-4af4-b2f4-382bbf8cfcb8","block_type":"box","text":"Dividends, distributions and redemption proceeds may also be subject to additional","page_number":84,"box":{"x":224,"y":419,"width":621,"height":12}},{"id":"368fb97b-ac06-437d-acf9-663d3bfdf508","block_type":"box","text":"state, local and non-U.S. taxes depending on each shareholder’s particular situation.","page_number":84,"box":{"x":116,"y":434,"width":633,"height":12}},{"id":"a9adfef0-c45b-459c-864a-b82102c0934f","block_type":"box","text":"Taxation of Non-U.S. Shareholders.","page_number":84,"box":{"x":116,"y":462,"width":287,"height":10}},{"id":"1abd1616-6d85-45c8-b6a5-324fea0fd84c","block_type":"box","text":"Dividends paid by the Fund to non-U.S. shareholders (other","page_number":84,"box":{"x":404,"y":462,"width":448,"height":12}},{"id":"91615aa1-3c74-444e-addc-b8655088b3eb","block_type":"box","text":"than a pass-through entity to the extent owned by U.S. persons) are generally subject to withholding","page_number":84,"box":{"x":116,"y":478,"width":748,"height":12}},{"id":"3c9b2ba5-163d-41e5-80bd-3d9bcd12aa1c","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":84,"box":{"x":116,"y":493,"width":752,"height":12}},{"id":"7c0cfb24-9d28-4b56-87b8-f66095ecb875","block_type":"box","text":"from investment income and short-term capital gains. Dividends paid by the Fund from net tax-exempt","page_number":84,"box":{"x":116,"y":509,"width":763,"height":12}},{"id":"b95164e3-1000-460c-a103-ae4db1469943","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":84,"box":{"x":117,"y":524,"width":765,"height":12}},{"id":"47685c97-84e7-4cd8-8130-4a14356c85a4","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":84,"box":{"x":117,"y":540,"width":756,"height":12}},{"id":"cd66ad0c-e87e-45db-b197-da8efd59a9fa","block_type":"box","text":"or IRS Form W-8BEN-E certifying its entitlement to benefits under a treaty. The withholding tax does","page_number":84,"box":{"x":116,"y":555,"width":750,"height":12}},{"id":"351ffada-03b7-4dee-a1a4-287a5d54bcc3","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":84,"box":{"x":117,"y":571,"width":729,"height":12}},{"id":"309b3a6d-e32d-41a4-8a2f-7f914404fa39","block_type":"box","text":"certifying that the dividends are effectively connected with the non-U.S. shareholder’s conduct of a","page_number":84,"box":{"x":116,"y":586,"width":735,"height":12}},{"id":"276f0449-1a30-436e-b9db-325e11cc5c63","block_type":"box","text":"trade or business within the U.S. Instead, the effectively connected dividends will be subject to regular","page_number":84,"box":{"x":116,"y":602,"width":762,"height":12}},{"id":"4d1e8720-8083-4529-b6e7-e9ff8e43311d","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":84,"box":{"x":117,"y":617,"width":717,"height":12}},{"id":"d3ac2d4b-bda7-43d0-b927-ff3d045521fa","block_type":"box","text":"receiving effectively connected dividends may also be subject to additional “branch profits tax” imposed","page_number":84,"box":{"x":117,"y":633,"width":771,"height":12}},{"id":"4e0f4315-3ae8-4126-bf93-cea7ef9dd0d7","block_type":"box","text":"at a rate of 30% (or lower treaty rate). A","page_number":84,"box":{"x":116,"y":648,"width":300,"height":12}},{"id":"c002c8f7-4e17-4458-aa39-79a445a3f8b6","block_type":"box","text":"non-U.S. shareholder who fails to provide an IRS Form","page_number":84,"box":{"x":418,"y":648,"width":412,"height":12}},{"id":"63f2abb8-ea8a-4be4-9d8d-445920833706","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":84,"box":{"x":116,"y":664,"width":746,"height":12}},{"id":"5d8ca61a-e03f-478a-972a-f8b1f1330616","block_type":"box","text":"appropriate rate.","page_number":84,"box":{"x":116,"y":679,"width":122,"height":12}},{"id":"8f9296c6-73d7-43ff-be85-26f4f00fff32","block_type":"box","text":"Except as discussed below, properly-reported dividends are generally exempt from U.S. federal","page_number":84,"box":{"x":117,"y":707,"width":708,"height":12}},{"id":"37d9c4b4-ceb1-466c-adb4-7a583d727a48","block_type":"box","text":"withholding tax where they (i) are paid in respect of the Fund’s “qualified net interest income”","page_number":84,"box":{"x":116,"y":723,"width":688,"height":12}},{"id":"7fa5efac-baff-43cd-abf2-357837caeeab","block_type":"box","text":"(generally, the Fund’s U.S. source interest income, other than certain contingent interest and interest","page_number":84,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"da78d72d-5c06-4c14-bd19-ead9060d38b7","block_type":"box","text":"from obligations of a corporation or partnership in which the Fund is at least a 10% shareholder or","page_number":84,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"0ee6a32d-a643-4e26-b782-cb18e1f09e0b","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":84,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"8cff53e4-ae10-43b2-9c04-89da77f10e5b","block_type":"box","text":"“qualified short-term capital gains” (generally, the excess of the Fund’s net short-term capital gain over","page_number":84,"box":{"x":116,"y":785,"width":761,"height":12}},{"id":"450b8145-3d69-448c-b0e0-6b466a5fc41e","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":84,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"d1926f06-83ae-4b22-8246-78b3f424cf4b","block_type":"box","text":"income earned on municipal and other tax-exempt securities. However, depending on its","page_number":84,"box":{"x":117,"y":816,"width":657,"height":12}},{"id":"94c8e431-998b-406a-bc48-798efbf53c76","block_type":"box","text":"circumstances, the Fund may report all, some or none of its potentially eligible dividends as interest","page_number":84,"box":{"x":116,"y":831,"width":743,"height":12}},{"id":"19f01516-4b33-414f-8264-42e18bcb7fb6","block_type":"box","text":"related dividends, short-term capital gains dividends or exempt-interest dividends and/or treat such","page_number":84,"box":{"x":117,"y":847,"width":738,"height":12}},{"id":"5bdbfa9c-3d06-4268-8b25-f2e95c4ac8b6","block_type":"box","text":"dividends, in whole or in part, as ineligible for this exemption from withholding. In order to qualify for","page_number":84,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"b1ef0ee6-b02f-4006-b27e-cf0015fabf34","block_type":"box","text":"this exemption from withholding, a non-U.S. shareholder will need to comply with applicable","page_number":84,"box":{"x":116,"y":878,"width":685,"height":12}},{"id":"1e11d97e-8a80-4f42-b5a7-38c12d0ce38b","block_type":"box","text":"81","page_number":84,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"67eb15e3-a2f1-4e94-93f2-58401bef7bce","block_type":"box","text":"NM1026U-6042785-84/259","page_number":84,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"87acf462-6c00-48fd-a64d-f456354a22ea","block_type":"box","text":"certification requirements relating to its non-U.S. status (including, in general, furnishing an IRS Form","page_number":85,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"60bc0d37-500a-48a7-910b-891719f9e952","block_type":"box","text":"W-8BEN, IRS Form W-8BEN-E or substitute Form). In the case of shares held through an","page_number":85,"box":{"x":116,"y":102,"width":672,"height":13}},{"id":"46dfcfd7-4420-423b-b27b-6bec5715091f","block_type":"box","text":"intermediary, the intermediary may withhold even if the Fund reports the payment as qualified net","page_number":85,"box":{"x":117,"y":118,"width":727,"height":12}},{"id":"6cdeda56-ce9f-4d42-875f-16fa89c73a63","block_type":"box","text":"interest income or qualified short-term capital gain. Non-U.S. shareholders should contact their","page_number":85,"box":{"x":117,"y":134,"width":707,"height":12}},{"id":"9235f561-d68f-4ea4-8c66-372980023905","block_type":"box","text":"intermediaries with respect to the application of these rules to their accounts.","page_number":85,"box":{"x":117,"y":149,"width":574,"height":12}},{"id":"1906b6b0-5720-490c-a200-63a239e17460","block_type":"box","text":"Special rules may apply to a foreign shareholder rece","page_number":85,"box":{"x":116,"y":177,"width":388,"height":12}},{"id":"c0b89e53-bf84-4a01-bf02-0cce9a8a4055","block_type":"box","text":"iving a Fund distribution if at least 50% of the","page_number":85,"box":{"x":505,"y":177,"width":331,"height":12}},{"id":"17feb330-ae2d-46e1-9e63-d720cc4e795c","block_type":"box","text":"Fund’s assets consist of U.S. real property intere","page_number":85,"box":{"x":117,"y":193,"width":353,"height":12}},{"id":"9e7d99a3-a113-4b47-9924-ff9f6570563a","block_type":"box","text":"sts, including certain REITs and U.S. real property","page_number":85,"box":{"x":471,"y":193,"width":369,"height":12}},{"id":"695e08a8-29e2-498b-b9bd-9e73f1b20144","block_type":"box","text":"holding corporations (as defined in the Inte","page_number":85,"box":{"x":117,"y":208,"width":309,"height":12}},{"id":"e293505b-4b01-4db5-9bf0-8d9ea7ebc8dc","block_type":"box","text":"rnal Revenue Code and Treasury regulations). Fund","page_number":85,"box":{"x":427,"y":208,"width":385,"height":12}},{"id":"e2b81082-b689-49db-a9c5-c7582b4d596c","block_type":"box","text":"distributions that are attributable to gain from the dispos","page_number":85,"box":{"x":116,"y":224,"width":404,"height":12}},{"id":"f5da9dea-6b8b-4d52-8f95-c0cf6d65f5fc","block_type":"box","text":"ition of a U.S. real property interest will be taxable","page_number":85,"box":{"x":522,"y":224,"width":365,"height":12}},{"id":"033c6173-adae-432d-becd-6f9eaa2b8e09","block_type":"box","text":"as ordinary dividends and subject to withholding at a 30%","page_number":85,"box":{"x":116,"y":239,"width":418,"height":12}},{"id":"81872ebd-4f72-4266-afb1-c2cd69fb9dab","block_type":"box","text":"or lower treaty rate if the foreign shareholder","page_number":85,"box":{"x":534,"y":239,"width":333,"height":12}},{"id":"f662953a-0fcb-4b70-bebd-aecfeb261f6b","block_type":"box","text":"held no more than 5% of the Fund’s shares at all","page_number":85,"box":{"x":117,"y":255,"width":358,"height":10}},{"id":"e39b5557-f24b-4200-ab9a-1c038a75063a","block_type":"box","text":"times during the one-year period ending on the date of","page_number":85,"box":{"x":475,"y":255,"width":400,"height":12}},{"id":"b0e0665c-1941-4e56-bef6-3cfc755f6761","block_type":"box","text":"the distribution. If the foreign shareholder held at l","page_number":85,"box":{"x":116,"y":270,"width":359,"height":12}},{"id":"112b9fa2-2a6b-427d-b8f2-eaad2d11b048","block_type":"box","text":"east 5% of the Fund’s shares at any time during the","page_number":85,"box":{"x":477,"y":270,"width":380,"height":12}},{"id":"b737216b-9467-4927-aadc-ca9d6de5aac4","block_type":"box","text":"one-year testing period, the distribution would be tr","page_number":85,"box":{"x":116,"y":286,"width":369,"height":12}},{"id":"0389af24-1b6b-4314-a7f1-57ab7237b8b8","block_type":"box","text":"eated as income effectively connected with a trade or","page_number":85,"box":{"x":485,"y":286,"width":392,"height":12}},{"id":"0028af3e-d828-4b11-bfab-841fb57798c1","block_type":"box","text":"business within the U.S. and the foreign shareholder w","page_number":85,"box":{"x":117,"y":301,"width":397,"height":13}},{"id":"482cc5fc-a678-4459-8e47-49b483d4c77d","block_type":"box","text":"ould be subject to withholding tax at a rate of 21%","page_number":85,"box":{"x":514,"y":301,"width":367,"height":13}},{"id":"78174eaa-6df6-465e-9d8c-2579bfaac383","block_type":"box","text":"and would generally be required to file a U.S. federal income tax return.","page_number":85,"box":{"x":116,"y":317,"width":524,"height":12}},{"id":"ec1884ca-7fbc-4042-a760-81d9e4cef7ba","block_type":"box","text":"Similar consequences would generally apply to a foreign shareholder’s gain on the sale of Fund shares","page_number":85,"box":{"x":116,"y":345,"width":770,"height":12}},{"id":"3c439288-20c5-40f3-bf3a-5bb8c6fd2421","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":85,"box":{"x":117,"y":361,"width":691,"height":12}},{"id":"73e67a91-f0e2-4337-829e-9538ff540250","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":85,"box":{"x":116,"y":376,"width":763,"height":12}},{"id":"214c1eca-af43-495e-9676-6e37051a5424","block_type":"box","text":"shareholders) or the foreign shareholder owns no more than 5% of the Fund’s shares at all times","page_number":85,"box":{"x":116,"y":392,"width":724,"height":12}},{"id":"33588d66-c9fa-4947-acfb-3217e655ee2e","block_type":"box","text":"during the five-year period ending on the date of sale. Finally, a domestically controlled Fund may be","page_number":85,"box":{"x":116,"y":407,"width":753,"height":12}},{"id":"d294fb2b-78ee-4b66-9c23-ee6f56816267","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":85,"box":{"x":117,"y":423,"width":711,"height":12}},{"id":"c503662c-07d6-4611-a690-4eb05ec5ca8a","block_type":"box","text":"interests. Shareholders that are nonresident aliens or foreign entities are urged to consult their own tax","page_number":85,"box":{"x":117,"y":438,"width":767,"height":12}},{"id":"0d71b020-7ca5-4c5b-9949-aad010273305","block_type":"box","text":"advisors concerning the particular tax consequences to them of an investment in the Fund.","page_number":85,"box":{"x":116,"y":454,"width":679,"height":12}},{"id":"c21dbcf1-85e9-4510-9771-4570e69100e1","block_type":"box","text":"A foreign shareholder may also be subject to certain “wash sale” rules to prevent the avoidance of the","page_number":85,"box":{"x":116,"y":482,"width":760,"height":12}},{"id":"bd382711-de00-4aa8-a11a-ab51f535f1b5","block_type":"box","text":"tax filing and payment obligations discussed above through the sale and repurchase of Fund shares.","page_number":85,"box":{"x":116,"y":498,"width":752,"height":12}},{"id":"f5f20f51-3b77-415c-83a4-f29a121729b5","block_type":"box","text":"Separately, a 30% withholding tax is currently imposed on U.S.-source dividends, interest and other","page_number":85,"box":{"x":116,"y":526,"width":745,"height":12}},{"id":"14c2c7fc-b02e-441c-9f21-f61c5fd32920","block_type":"box","text":"income items paid to: (i) foreign financial institutions, including non-U.S. investment funds; and","page_number":85,"box":{"x":117,"y":542,"width":705,"height":12}},{"id":"7278b168-7b68-4ab9-b367-db6413dda9fd","block_type":"box","text":"(ii) certain other foreign entities. To avoid withholding, foreign financial institutions will need to: (i) enter","page_number":85,"box":{"x":117,"y":557,"width":765,"height":12}},{"id":"48a015f5-f416-4fc6-8fc9-27e74269e2e9","block_type":"box","text":"into agreements with the IRS that state that they will provide the IRS information, including the names,","page_number":85,"box":{"x":117,"y":573,"width":763,"height":12}},{"id":"a92e0e10-184a-40d3-9523-c9ab506a3c4c","block_type":"box","text":"addresses and taxpayer identification numbers of direct and indirect U.S. account holders; comply with","page_number":85,"box":{"x":116,"y":588,"width":767,"height":12}},{"id":"22b54981-4bb2-4b0c-b33d-0a0b0e08dbfc","block_type":"box","text":"due diligence procedures with respect to the identification of U.S. accounts; report to the IRS certain","page_number":85,"box":{"x":116,"y":604,"width":748,"height":12}},{"id":"e91e93d3-cf70-4825-bde1-6a9176bbcd8e","block_type":"box","text":"information with respect to U.S. accounts maintained; agree to withhold tax on certain payments made","page_number":85,"box":{"x":117,"y":619,"width":764,"height":12}},{"id":"29ab17b0-be89-44af-b217-9ef69906f871","block_type":"box","text":"to non-compliant foreign financial institutions or to account holders who fail to provide the required","page_number":85,"box":{"x":116,"y":635,"width":732,"height":12}},{"id":"2abcb68d-cac0-478a-9db9-cab060adbcda","block_type":"box","text":"information; and determine certain other information concerning their account holders, or (ii) in the","page_number":85,"box":{"x":117,"y":650,"width":731,"height":12}},{"id":"508275cb-754a-43ba-a4ec-1e5930d59b74","block_type":"box","text":"event an intergovernmental agreement and implementing legislation are adopted, provide local","page_number":85,"box":{"x":116,"y":666,"width":703,"height":12}},{"id":"3f32582f-fafc-4e56-846f-2978e9d02a94","block_type":"box","text":"revenue authorities with similar account holder information. Other foreign entities may need to report","page_number":85,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"adcf7951-c7b3-4d3b-a3f7-497111bda6e6","block_type":"box","text":"the name, address, and taxpayer identification number of each substantial U.S. owner or provide","page_number":85,"box":{"x":116,"y":697,"width":718,"height":12}},{"id":"12177fe5-cb51-491d-9685-3c33ed4317a9","block_type":"box","text":"certifications of no substantial U.S. ownership unless certain exceptions apply.","page_number":85,"box":{"x":116,"y":712,"width":581,"height":12}},{"id":"5727d6c9-32d0-4869-8ad5-29819679748c","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":85,"box":{"x":116,"y":740,"width":760,"height":13}},{"id":"5a3b1bc4-8fc0-4c0b-9e31-127bb8995610","block_type":"box","text":"and subject to the U.S. estate tax.","page_number":85,"box":{"x":116,"y":756,"width":251,"height":12}},{"id":"cfd73bca-8878-4a18-a0c2-ab56319b0553","block_type":"box","text":"The foregoing discussion is a summary of certain material U.S. federal income tax considerations only","page_number":85,"box":{"x":116,"y":784,"width":758,"height":12}},{"id":"f4ad0e44-bbc5-4d1e-af8e-d1f9b2c5e5b5","block_type":"box","text":"and is not intended as a substitute for careful tax planning. Purchasers of shares should consult their","page_number":85,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"0aa82f6a-e91e-4b7a-8ed3-2bcf96a53451","block_type":"box","text":"own tax advisors as to the tax consequences of investing in such shares, including consequences","page_number":85,"box":{"x":116,"y":815,"width":726,"height":12}},{"id":"3f924b61-a2bd-4773-ba9f-2fbba9464670","block_type":"box","text":"under state, local and non-U.S. tax laws. Finally, the foregoing discussion is based on applicable","page_number":85,"box":{"x":117,"y":831,"width":721,"height":12}},{"id":"fa0cca42-8327-46c2-8673-50d1f4e3cbde","block_type":"box","text":"provisions of the Internal Revenue Code, regulations, judicial authority and administrative","page_number":85,"box":{"x":117,"y":846,"width":667,"height":12}},{"id":"21c99ba3-9413-45dc-84f7-08be6ec5deac","block_type":"box","text":"interpretations in effect on the date of this SAI. Changes in applicable authority could materially affect","page_number":85,"box":{"x":117,"y":862,"width":756,"height":12}},{"id":"7461adb5-e229-4d82-836d-9bce7008d9cd","block_type":"box","text":"the conclusions discussed above, and such changes often occur.","page_number":85,"box":{"x":116,"y":877,"width":489,"height":12}},{"id":"d7669b5c-9e0c-4398-afb1-a64c399348d2","block_type":"box","text":"82","page_number":85,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"174def96-abf8-4703-98fe-8404c2751caf","block_type":"box","text":"NM1026U-6042785-85/259","page_number":85,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9655d946-8059-441f-be9a-ce9e98d753cc","block_type":"box","text":"Miscellaneous Information","page_number":86,"box":{"x":119,"y":92,"width":477,"height":23}},{"id":"552310df-503a-403f-b4fb-d07a10cd6adf","block_type":"box","text":"Counsel.","page_number":86,"box":{"x":116,"y":144,"width":70,"height":9}},{"id":"4e5b6792-06ab-4d2e-badd-38af8a83de81","block_type":"box","text":"Ropes & Gray LLP, located at 1211 Avenue of the Americas, New York, New York 10036, is","page_number":86,"box":{"x":187,"y":144,"width":695,"height":12}},{"id":"112040dd-03c8-4abb-959e-621bf708048e","block_type":"box","text":"counsel to the Trust.","page_number":86,"box":{"x":116,"y":160,"width":157,"height":9}},{"id":"d9658419-99fd-4aae-b701-ddf917ac52da","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":86,"box":{"x":117,"y":191,"width":387,"height":11}},{"id":"40c6a10e-4463-44f6-9460-17514c441877","block_type":"box","text":"PricewaterhouseCoopers LLP, located at Two","page_number":86,"box":{"x":506,"y":190,"width":351,"height":12}},{"id":"7fefd83d-8a7c-4225-95e7-31a02c0564d6","block_type":"box","text":"Commerce Square, 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103, serves as the","page_number":86,"box":{"x":117,"y":206,"width":758,"height":12}},{"id":"b3c0c69d-31bd-4dbf-8147-7a1cd098b206","block_type":"box","text":"Trust’s independent registered public accounting firm, audits the Fund’s financial statements, and may","page_number":86,"box":{"x":116,"y":221,"width":764,"height":12}},{"id":"69dbbf45-3d94-47b7-b66e-dbf3c1c6cd78","block_type":"box","text":"perform other services.","page_number":86,"box":{"x":117,"y":237,"width":176,"height":12}},{"id":"15f1954e-34aa-4635-bd2a-e0d8c808265f","block_type":"box","text":"Investors’ Rights.","page_number":86,"box":{"x":117,"y":268,"width":139,"height":12}},{"id":"4d5df97a-02f1-4df0-b8ae-ad7d97afdc5d","block_type":"box","text":"The Fund relies on the services of BFA and its other service providers, including","page_number":86,"box":{"x":257,"y":268,"width":605,"height":12}},{"id":"0ea01211-5de1-4a32-ac5b-a5b7e9b552fa","block_type":"box","text":"the Distributor, administrator, custodian and transfer agent. Further information about the duties and","page_number":86,"box":{"x":116,"y":283,"width":748,"height":12}},{"id":"e4290ee0-2374-46c3-970f-b3997c05ef47","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":86,"box":{"x":117,"y":299,"width":764,"height":12}},{"id":"6fab4c23-2804-47d4-9ac7-6e3aca458611","block_type":"box","text":"parties to the relevant agreement with these service providers and do not have express contractual","page_number":86,"box":{"x":117,"y":315,"width":739,"height":11}},{"id":"2d10b21d-f007-48d0-936b-27cce2d534ce","block_type":"box","text":"rights against the Fund or its service providers, except certain institutional investors that are Authorized","page_number":86,"box":{"x":117,"y":330,"width":770,"height":12}},{"id":"6971a06d-55da-4a70-9f41-b57f6b2dca34","block_type":"box","text":"Participants may have certain express contractual rights with respect to the Distributor under the terms","page_number":86,"box":{"x":117,"y":346,"width":766,"height":11}},{"id":"03f76446-0b00-41d3-ab4d-726d8fdb33f6","block_type":"box","text":"of the relevant Authorized Participant Agreement. Investors may have certain legal rights under federal","page_number":86,"box":{"x":116,"y":361,"width":768,"height":12}},{"id":"eee03262-b9d7-4c0a-bd87-a4c4a856f5f7","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":86,"box":{"x":116,"y":377,"width":770,"height":12}},{"id":"5928ed42-853f-4866-8725-34d419d20af8","block_type":"box","text":"have a claim against the Fund, or against any service provider in connection with its investment in the","page_number":86,"box":{"x":117,"y":392,"width":758,"height":12}},{"id":"7e01a9d7-3ab0-49f1-b1d0-0838d93e939a","block_type":"box","text":"Fund, such investor should consult its own legal advisor.","page_number":86,"box":{"x":117,"y":408,"width":423,"height":12}},{"id":"57a60f40-41a9-4de7-9c75-70bc7cdad271","block_type":"box","text":"By contract, Authorized Participants irrevocably submit to the non-exclusive jurisdiction of any New","page_number":86,"box":{"x":117,"y":438,"width":738,"height":13}},{"id":"147a383c-4f91-46a0-af4f-947fcbf0fe5d","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":86,"box":{"x":116,"y":454,"width":760,"height":12}},{"id":"4b3e9cd3-715e-4b91-8650-e3ae8882bba1","block_type":"box","text":"of or relating to the Authorized Participant Agreement. Jurisdiction over other claims, whether by","page_number":86,"box":{"x":116,"y":469,"width":719,"height":13}},{"id":"4c657b2a-ce76-4b0d-b9b3-8e99ff5430e0","block_type":"box","text":"investors or Authorized Participants, will turn on the facts of the particular case and the law of the","page_number":86,"box":{"x":117,"y":485,"width":725,"height":12}},{"id":"2f1c68f7-91f8-4938-8670-ed82e3f28564","block_type":"box","text":"jurisdiction in which the proceeding is brought.","page_number":86,"box":{"x":115,"y":501,"width":349,"height":12}},{"id":"86bbe502-14d5-4715-9237-4dab353d2200","block_type":"box","text":"Financial Statements","page_number":86,"box":{"x":119,"y":552,"width":385,"height":23}},{"id":"7c4537a7-8ffd-444c-bb60-b2c68405da61","block_type":"box","text":"Financial statements for the Fund are not available because, as of the date of this SAI, the Fund has","page_number":86,"box":{"x":117,"y":604,"width":750,"height":11}},{"id":"599e4a21-8932-44b5-92fd-8c6d96383c17","block_type":"box","text":"no financial information to report.","page_number":86,"box":{"x":117,"y":619,"width":248,"height":12}},{"id":"2fe9a84e-c598-44b8-b8ac-2cd042e5f890","block_type":"box","text":"83","page_number":86,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"586ddfe4-28d0-47de-8bd2-adbf590b3285","block_type":"box","text":"NM1026U-6042785-86/259","page_number":86,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ca26c0da-e31a-403d-86d0-ee74370b61e6","block_type":"box","text":"PART II","page_number":87,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"a4557ed0-a79f-4c8d-b9fa-b021488d9a42","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be","page_number":87,"box":{"x":116,"y":143,"width":734,"height":12}},{"id":"c73ee686-3f07-4e2e-8f98-acb0e7cc05c2","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":87,"box":{"x":117,"y":158,"width":770,"height":13}},{"id":"c46c9412-fbfb-4975-9b06-f789d7902ce9","block_type":"box","text":"as “Municipal Funds” if they invest certain of their assets in municipal investments described below.","page_number":87,"box":{"x":116,"y":174,"width":743,"height":12}},{"id":"0a255554-048f-4b03-8d29-79f8aca03ae6","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a","page_number":87,"box":{"x":117,"y":205,"width":704,"height":11}},{"id":"1850f453-2c40-4949-aba1-66d82d14178c","block_type":"box","text":"Delaware statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation,","page_number":87,"box":{"x":117,"y":220,"width":769,"height":12}},{"id":"4b052c26-2704-4616-8500-4383897c6612","block_type":"box","text":"shares of common stock and shares of beneficial interest are referred to herein as “shares” or","page_number":87,"box":{"x":116,"y":235,"width":701,"height":10}},{"id":"742b0c71-fcd1-4bcd-a69e-d98d57fb5dee","block_type":"box","text":"“Common Stock,” holders of shares of Common Stock are referred to as “shareholders,” the trustees","page_number":87,"box":{"x":116,"y":251,"width":752,"height":11}},{"id":"b6e84f41-a0c7-4d10-b39d-269f25083cb7","block_type":"box","text":"or directors of each Fund are referred to as “Directors,” the boards of trustees/directors of each Fund","page_number":87,"box":{"x":116,"y":266,"width":754,"height":12}},{"id":"c13696ae-79dd-4136-9946-2ffb6c3e3ade","block_type":"box","text":"are referred to as the “Board of Directors” or the “Board,” BlackRock Advisors, LLC, BlackRock Fund","page_number":87,"box":{"x":116,"y":282,"width":752,"height":11}},{"id":"2ee5828d-9cfd-4e39-88c6-0d7c565efed9","block_type":"box","text":"Advisors or their respective affiliates is the investment adviser or manager of each Fund and is referred","page_number":87,"box":{"x":116,"y":297,"width":771,"height":12}},{"id":"87cfc520-5ef9-486d-88de-8b1cf6957057","block_type":"box","text":"to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or management","page_number":87,"box":{"x":116,"y":313,"width":745,"height":12}},{"id":"26bc83e6-92a5-46ad-b781-e2e62cd31620","block_type":"box","text":"agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":87,"box":{"x":116,"y":328,"width":722,"height":13}},{"id":"b32c6af5-da31-46d8-a15c-f7d106c41474","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as","page_number":87,"box":{"x":116,"y":344,"width":765,"height":12}},{"id":"89c8cab5-4bb0-4709-ac92-ff22e403c6c7","block_type":"box","text":"its “charter.” The Investment Company Act of 1940, as amended, is referred to herein as the","page_number":87,"box":{"x":117,"y":359,"width":689,"height":13}},{"id":"b8d5399b-c4c4-4484-86b5-f4ff90f35564","block_type":"box","text":"“Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the","page_number":87,"box":{"x":116,"y":375,"width":719,"height":12}},{"id":"0a28463a-64b4-46ca-88d8-1b474c938915","block_type":"box","text":"“Securities Act.” The Securities and Exchange Commission is referred to herein as the “Commission”","page_number":87,"box":{"x":116,"y":390,"width":755,"height":13}},{"id":"39465666-756b-4734-a8c2-119bd4544efb","block_type":"box","text":"or the “SEC.”","page_number":87,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"8b1a840d-57dc-4151-b66d-1912d3ea8d8e","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":87,"box":{"x":117,"y":436,"width":765,"height":12}},{"id":"53466709-9c1b-42b1-bc0f-d42cff36ad45","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each,","page_number":87,"box":{"x":116,"y":452,"width":770,"height":12}},{"id":"85f31670-fef7-44e8-b550-f54ca390bca5","block_type":"box","text":"a “Master LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All","page_number":87,"box":{"x":116,"y":467,"width":734,"height":12}},{"id":"efa50c71-3b1a-4f81-89c9-82a8e5921f39","block_type":"box","text":"investments are generally made at the level of the Master Portfolio. This structure is sometimes called","page_number":87,"box":{"x":117,"y":483,"width":761,"height":12}},{"id":"c44caaa9-29a4-426f-96e5-834d676fcbf6","block_type":"box","text":"a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the","page_number":87,"box":{"x":116,"y":498,"width":700,"height":12}},{"id":"382d772b-7662-4275-8fa1-6e27cdf57c49","block_type":"box","text":"investment results of the underlying Master Portfolio in which it invests. For simplicity, this SAI uses the","page_number":87,"box":{"x":117,"y":514,"width":770,"height":12}},{"id":"ae42001b-ca03-407c-b66b-6ea8e6d9f1e5","block_type":"box","text":"term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":87,"box":{"x":116,"y":529,"width":503,"height":10}},{"id":"72bb2cca-9134-4a79-b4a7-3c3b8aa731b9","block_type":"box","text":"Certain information contained herein may not be relevant to a particular Fund.","page_number":87,"box":{"x":117,"y":560,"width":582,"height":12}},{"id":"e4ffb8de-f713-4e49-a51d-39c38f2e05ee","block_type":"box","text":"Investment Risks and Considerations","page_number":87,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"bb0bb697-6e95-4f78-b82d-249ac7130436","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one","page_number":87,"box":{"x":116,"y":661,"width":767,"height":12}},{"id":"c0eb48d1-23dc-49d4-b83b-9f06ebfdc5d1","block_type":"box","text":"or more of the Funds may use, and the risks and considerations associated with those investments","page_number":87,"box":{"x":116,"y":677,"width":735,"height":12}},{"id":"684d5def-2af5-4dda-9099-f35a289f8d99","block_type":"box","text":"and investment strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the","page_number":87,"box":{"x":116,"y":692,"width":685,"height":12}},{"id":"25a92f6f-d5a2-417e-ada1-648083be191b","block_type":"box","text":"“Investment Objective and Policies,” “Investment Objectives and Policies” or “Investment Strategies","page_number":87,"box":{"x":116,"y":708,"width":737,"height":12}},{"id":"33571bc0-9824-41a8-9f0f-cb217b2f6050","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":87,"box":{"x":116,"y":723,"width":714,"height":12}},{"id":"17c4353e-580b-4238-afda-375c4362fe22","block_type":"box","text":"Fund’s investment policies and risks. Information contained in this section about the risks and","page_number":87,"box":{"x":117,"y":739,"width":692,"height":12}},{"id":"9c75d173-90ee-4546-a094-31af8f4a20d0","block_type":"box","text":"considerations associated with a Fund’s investments and/or investment strategies applies only to those","page_number":87,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"d0869f56-06b9-4e9e-9ebd-f73f0dd687b9","block_type":"box","text":"Funds specifically identified in Part I of this SAI as making each type of investment or using each","page_number":87,"box":{"x":117,"y":770,"width":716,"height":12}},{"id":"0f1d63b6-1841-4886-b462-dec1ccfb0907","block_type":"box","text":"investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does","page_number":87,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"b4c9419f-fbcd-4a6a-b4e7-aacb36b26f47","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":87,"box":{"x":117,"y":801,"width":735,"height":12}},{"id":"1d64ecca-bc4c-481a-b770-b5022e9a050b","block_type":"box","text":"Fund. Only information that is clearly identified as applicable to a Covered Fund is considered to form a","page_number":87,"box":{"x":117,"y":816,"width":765,"height":12}},{"id":"e17b6e96-3ebd-4113-8579-afbe390da4ea","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":87,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"0d5bdfad-6d08-4e93-a98a-8439f0955cf1","block_type":"box","text":"Asset-Backed Securities.","page_number":87,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"2daabc64-632c-4359-941b-990e5f095e28","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans,","page_number":87,"box":{"x":317,"y":862,"width":519,"height":12}},{"id":"6b54cc39-0b75-49a2-949a-2c20a03083f4","block_type":"box","text":"installment sale contracts, credit card receivables or other assets. Asset-backed securities are","page_number":87,"box":{"x":117,"y":878,"width":702,"height":11}},{"id":"203ffada-d6d8-46a7-b7b7-b40a5385938c","block_type":"box","text":"II-1","page_number":87,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"59e843be-26b9-4d6c-b32c-820de4d7540a","block_type":"box","text":"NM1026U-6042785-87/259","page_number":87,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"227ddd1b-1865-439b-991d-b5a8b151aff0","block_type":"box","text":"“pass-through” securities, meaning that principal and interest payments — net of expenses — made by","page_number":88,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"0781bac0-cd5f-433d-a72b-9d0b7915bf1f","block_type":"box","text":"the borrower on the underlying assets (such as credit card receivables) are passed through to a Fund.","page_number":88,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"f0a10d28-37c9-43ca-be6c-1c624afeae61","block_type":"box","text":"The value of asset-backed securities, like that of traditional fixed-income securities, typically increases","page_number":88,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"87b8a2ad-9eee-4066-8f2f-927bb5cffc40","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, asset-backed securities differ","page_number":88,"box":{"x":116,"y":134,"width":770,"height":11}},{"id":"bad1a289-5408-4988-ad3f-4b741766a92b","block_type":"box","text":"from traditional fixed-income securities because of their potential for prepayment. The price paid by a","page_number":88,"box":{"x":116,"y":149,"width":755,"height":12}},{"id":"ff49fd87-9bc6-4262-97af-fc892e24e05c","block_type":"box","text":"Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and the","page_number":88,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"6e7c04ee-9c83-40be-8cf0-5faa6403ba54","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of","page_number":88,"box":{"x":116,"y":180,"width":709,"height":12}},{"id":"478ba6e4-8ee5-461a-a070-f8b32852abba","block_type":"box","text":"prepayment of the underlying assets. In a period of declining interest rates, borrowers may prepay the","page_number":88,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"7e77302e-8385-4acf-b128-206a8ca7f6e8","block_type":"box","text":"underlying assets more quickly than anticipated, thereby reducing the yield to maturity and the average","page_number":88,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"736236dc-ea14-47db-958f-0e82ef71ecb6","block_type":"box","text":"life of the asset-backed securities. Moreover, when a Fund reinvests the proceeds of a prepayment in","page_number":88,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"9e5dda80-c6bb-404a-8552-6ae4dc4c1f19","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":88,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"54283380-2d22-4117-9446-7a7ff9b3968e","block_type":"box","text":"was prepaid. To the extent that a Fund purchases asset-backed securities at a premium, prepayments","page_number":88,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"465bb74f-e74c-4456-87e5-a7cfd8b6eb0a","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":88,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"61ac37a4-e569-4ca9-9e7b-47b20f0bd7c8","block_type":"box","text":"both scheduled payments and unscheduled prepayments will increase current and total returns and","page_number":88,"box":{"x":117,"y":289,"width":742,"height":12}},{"id":"5b963e79-968f-46fb-bf70-d4a37b3b0166","block_type":"box","text":"unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":88,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"b1600896-f541-40e9-a8d5-84ebc17370fc","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the","page_number":88,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"ed25172c-f7cd-4229-8c1d-4f0776661377","block_type":"box","text":"underlying assets may occur at a slower than expected rate, creating maturity extension risk. This","page_number":88,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"9737f870-99c6-492b-8597-8d6f1da05ce5","block_type":"box","text":"particular risk may effectively change a security that was considered short- or intermediate-term at the","page_number":88,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"8270f023-9dd2-4c2c-9c46-c5b0abb387eb","block_type":"box","text":"time of purchase into a longer term security. Since the value of longer-term securities generally","page_number":88,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"e6d34705-ad70-48c5-8155-534d40b8fb62","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than does the value of shorter-term","page_number":88,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"28442ae0-590c-4363-9575-7dd03b5d6311","block_type":"box","text":"securities, maturity extension risk could increase the volatility of the Fund. When interest rates decline,","page_number":88,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"d4a4deb3-fc5d-464f-8cff-e9d2d3ed24eb","block_type":"box","text":"the value of an asset-backed security with prepayment features may not increase as much as that of","page_number":88,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"9a79cb1c-928d-49e7-95cc-40dc59bd9b76","block_type":"box","text":"other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate","page_number":88,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"b4067f56-a182-4bae-83dc-a5ca245707e4","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":88,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"911cfd29-7170-40f1-9284-40af9d8a26c2","block_type":"box","text":"Asset-Based Securities.","page_number":88,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"7abd4292-dcbd-4682-b4d0-2c7f7c3b420d","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the","page_number":88,"box":{"x":307,"y":475,"width":548,"height":12}},{"id":"ef6cc208-f68f-47a7-8d73-00cf69facbc7","block_type":"box","text":"principal amount, redemption terms or conversion terms of which are related to the market price of","page_number":88,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"add01fde-f413-4b34-9f48-0b472936a0ea","block_type":"box","text":"some natural resource asset such as gold bullion. These securities are referred to as “asset-based","page_number":88,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"d95c3bb4-189a-4a8e-9958-bbb44a0d2b68","block_type":"box","text":"securities.” A Fund will purchase only asset-based securities that are rated, or are issued by issuers","page_number":88,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"26293a6b-50cc-4a5b-ba90-aaa4622aa7fa","block_type":"box","text":"that have outstanding debt obligations rated, investment grade (for example, AAA, AA, A or BBB by","page_number":88,"box":{"x":116,"y":537,"width":744,"height":12}},{"id":"a7142b1a-247e-404f-98f3-4ac7bd4a839f","block_type":"box","text":"S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by Moody’s Investors Service, Inc.","page_number":88,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"1fe1a34b-2d15-44f0-9df5-c5afa2e56e97","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":88,"box":{"x":117,"y":568,"width":721,"height":12}},{"id":"600efdfa-c955-435a-9e1b-ecae736bbba5","block_type":"box","text":"Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":88,"box":{"x":117,"y":583,"width":733,"height":12}},{"id":"b8496e5e-6743-4741-a795-b554aad8731d","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and","page_number":88,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"c790ce69-b2c2-4f93-b3c3-9202dd1a3fe7","block_type":"box","text":"may be more likely to be downgraded than securities rated in the three highest rating categories. If an","page_number":88,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"464e1ded-f89d-4dc2-abbf-bad0ba921f7c","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":88,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"13321b7d-bfa1-4dcd-9048-8f107ebe7392","block_type":"box","text":"such backing into account in determining the creditworthiness of the issuer. While the market prices for","page_number":88,"box":{"x":116,"y":645,"width":769,"height":12}},{"id":"55eccc02-00c7-4662-b5bf-aa3121fa09b2","block_type":"box","text":"an asset-based security and the related natural resource asset generally are expected to move in the","page_number":88,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"57f76409-19ee-4d82-8f83-6a72246aeec5","block_type":"box","text":"same direction, there may not be perfect correlation in the two price movements. Asset-based","page_number":88,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"57fd4d05-ccc7-40f6-ad6d-38b655e4df5b","block_type":"box","text":"securities may not be secured by a security interest in or claim on the underlying natural resource","page_number":88,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"6ef560be-c3f9-46b8-8a7d-794ffc6a5ec8","block_type":"box","text":"asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred","page_number":88,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"7b3ce6ae-9159-4d8c-a8a4-e71f4e9d087c","block_type":"box","text":"dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be","page_number":88,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"8c21e346-c5a6-48fe-8102-04a14344239b","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":88,"box":{"x":117,"y":738,"width":738,"height":12}},{"id":"384ddb83-498a-4d5e-94ac-bcea5d8df04f","block_type":"box","text":"stated amount of the asset to which it is related. In such instance, because no Fund presently intends","page_number":88,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"99cbb856-e845-456a-911a-548d38ab249a","block_type":"box","text":"to invest directly in natural resource assets, a Fund would sell the asset-based security in the","page_number":88,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"d4573dd7-b1fb-47f0-9ffc-a95aaaa6451b","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":88,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"05274fe7-7a4f-4c66-b240-e5e43c0762c5","block_type":"box","text":"asset exceeds the stated principal amount and thereby realize the appreciation in the underlying asset.","page_number":88,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"2a754c25-7210-4e97-80f1-75598342e0ba","block_type":"box","text":"Precious Metal-Related Securities.","page_number":88,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"ea6b91c7-0376-44f5-8991-0a1b44f44745","block_type":"box","text":"A Fund may invest in the equity and other securities of companies","page_number":88,"box":{"x":374,"y":831,"width":500,"height":12}},{"id":"15400ff9-8af2-492d-8e93-e8694ead9d1e","block_type":"box","text":"that explore for, extract, process or deal in precious metals (","page_number":88,"box":{"x":116,"y":847,"width":447,"height":12}},{"id":"a0e1edbd-d0c5-4285-affd-3962dd2d9bbe","block_type":"box","text":"e.g.","page_number":88,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"1e6b100d-dbb7-43f1-80d6-be3d41c5bd59","block_type":"box","text":", gold, silver and platinum), and in","page_number":88,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"e1a4efa4-4b1b-4e99-862e-28cb664205be","block_type":"box","text":"asset-based securities indexed to the value of such metals. Such securities may be purchased when","page_number":88,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"855ed8a7-c390-4087-b7cf-a57f36181a3a","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":88,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"42a3eb65-fb25-42b8-8440-486348a7bc46","block_type":"box","text":"II-2","page_number":88,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"a9bb90a5-a933-4701-9ecc-9c37f706fa30","block_type":"box","text":"NM1026U-6042785-88/259","page_number":88,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e081c872-a03e-4745-9c1c-6c4083c64b53","block_type":"box","text":"assets or when the values of precious metals are expected to benefit from inflationary pressure or","page_number":89,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"de29b992-d4a1-44c9-8d84-331b06ffadf7","block_type":"box","text":"other economic, political or financial uncertainty or instability. Based on historical experience, during","page_number":89,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"55682f72-937c-4d86-8d7b-43c7cd8541f9","block_type":"box","text":"periods of economic or financial instability the securities of companies involved in precious metals may","page_number":89,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"bc5f65f6-261b-4718-933d-9e3da59d39cb","block_type":"box","text":"be subject to extreme price fluctuations, reflecting the high volatility of precious metal prices during","page_number":89,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"f4e7532b-7a88-48d5-9bf0-cebf60a818f3","block_type":"box","text":"such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":89,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"15d6b3be-ff8b-419c-abf3-3f13cfd1591c","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such","page_number":89,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"78e24e6e-25b9-47bb-b731-d67b06ed197b","block_type":"box","text":"companies. The major producers of gold include the Republic of South Africa, Russia, Canada, the","page_number":89,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"c1f15af2-d616-4d8b-894c-4cc2df9fe9d7","block_type":"box","text":"United States, Brazil and Australia. Sales of gold by Russia are largely unpredictable and often relate","page_number":89,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"6b4a6bec-9792-484f-a230-dae6998d659d","block_type":"box","text":"to political and economic considerations rather than to market forces. Economic, financial, social and","page_number":89,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"f5fed93c-2821-40f3-98b6-55726daefbb2","block_type":"box","text":"political factors within South Africa may significantly affect South African gold production.","page_number":89,"box":{"x":117,"y":227,"width":663,"height":12}},{"id":"4031fbc8-26fc-4cc3-bc11-26d63ffb6d9d","block_type":"box","text":"Borrowing and Leverage.","page_number":89,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"ba5d7370-984b-489b-b894-bc15f5212aae","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or","page_number":89,"box":{"x":318,"y":258,"width":517,"height":12}},{"id":"fb9f610f-d7a6-4c99-a1a1-b9e1fd38b4c3","block_type":"box","text":"emergency purposes, including to meet redemptions or to settle securities transactions. Certain Funds","page_number":89,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"fe5bd192-6fcb-4126-abbc-88157d6dfeac","block_type":"box","text":"will not purchase securities at any time when borrowings exceed 5% of their total assets, except (a) to","page_number":89,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"efb8f850-7a2a-4117-8c43-04194546012a","block_type":"box","text":"honor prior commitments or (b) to exercise subscription rights when outstanding borrowings have been","page_number":89,"box":{"x":117,"y":304,"width":768,"height":12}},{"id":"51bb62c8-95f8-4057-8be1-47ee1cd9e4a3","block_type":"box","text":"obtained exclusively for settlements of other securities transactions.","page_number":89,"box":{"x":116,"y":320,"width":508,"height":12}},{"id":"284ee36f-43dc-42d1-970c-107110ae00e8","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s","page_number":89,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"ccb3b94b-9a43-459d-9594-35e3655d4ee8","block_type":"box","text":"Prospectus. The purchase of securities while borrowings are outstanding will have the effect of","page_number":89,"box":{"x":117,"y":366,"width":707,"height":12}},{"id":"3a5c065b-6ac9-4686-a4c9-dd73d2da298b","block_type":"box","text":"leveraging the Fund. Such leveraging increases the Fund’s exposure to capital risk, and borrowed","page_number":89,"box":{"x":117,"y":382,"width":731,"height":12}},{"id":"5fe294a7-56c5-420d-8d55-faba7d754933","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":89,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"df5c4a89-3bce-4b30-8742-1f4ce4b8df98","block_type":"box","text":"an opportunity for greater total return, but, at the same time, creates special risks. For example,","page_number":89,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"0991540a-1a64-4c89-b470-b01c8991b6dd","block_type":"box","text":"leveraging may exaggerate changes in the net asset value (“NAV”) of Fund shares and in the yield on","page_number":89,"box":{"x":117,"y":428,"width":758,"height":12}},{"id":"d41a1ca9-8e33-41eb-8712-f3fe19f3775d","block_type":"box","text":"the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s assets may","page_number":89,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"46c45853-3c18-4e15-9147-328510548629","block_type":"box","text":"change in value during the time the borrowings are outstanding. Borrowings will create interest","page_number":89,"box":{"x":116,"y":459,"width":707,"height":12}},{"id":"75ecb40e-9c00-42be-b106-bd29557adce0","block_type":"box","text":"expenses for the Fund that can exceed the income from the assets purchased with the borrowings. To","page_number":89,"box":{"x":116,"y":475,"width":764,"height":12}},{"id":"dddc60f3-a247-4d6a-bb06-b1b995212cc2","block_type":"box","text":"the extent the income or capital appreciation derived from securities purchased with borrowed funds","page_number":89,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"d03a08f4-07a2-47c1-b38f-0a92ce8baa2b","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":89,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"d1b154aa-2133-42d3-bbe2-7fc4905bd0df","block_type":"box","text":"if leverage had not been used. Conversely, if the income or capital appreciation from the securities","page_number":89,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"5c8698c4-1306-4d5f-bf9d-349be4eff0c2","block_type":"box","text":"purchased with such borrowed funds is not sufficient to cover the cost of borrowing, the return to the","page_number":89,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"7dcf4cec-23fd-475e-8d4b-fc6acf8e444d","block_type":"box","text":"Fund will be less than if leverage had not been used and, therefore, the amount available for","page_number":89,"box":{"x":117,"y":552,"width":690,"height":12}},{"id":"9bd72cc7-b0da-427d-97ff-274e5b0c0cf2","block_type":"box","text":"distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best","page_number":89,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"7060fa78-6397-4498-a2b5-13d0ba1ad17c","block_type":"box","text":"judgment nevertheless may determine to maintain the Fund’s leveraged position if it expects that the","page_number":89,"box":{"x":115,"y":583,"width":752,"height":12}},{"id":"0cc81a85-be2f-4202-9b56-e2dac0b2b135","block_type":"box","text":"benefits to the Fund’s shareholders of maintaining the leveraged position will outweigh the current","page_number":89,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"dce26217-94a2-4ef2-af7e-e1b6936bf594","block_type":"box","text":"reduced return.","page_number":89,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"dbe45cee-bf81-48e8-bd72-c8e56a13defb","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit","page_number":89,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"69ec7786-1dd4-4124-aa66-1e08de491fd5","block_type":"box","text":"agreements relating to asset coverage, portfolio composition requirements and other matters. It is not","page_number":89,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"4ae2fbfc-8b2e-4fbe-81cb-d57896624ca8","block_type":"box","text":"anticipated that observance of such covenants would impede the Manager from managing a Fund’s","page_number":89,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"ca18910b-2b57-482a-9bdd-523ba8f5424e","block_type":"box","text":"portfolio in accordance with the Fund’s investment objectives and policies. However, a breach of any","page_number":89,"box":{"x":117,"y":692,"width":746,"height":12}},{"id":"6ab0a39c-3180-4191-821b-772befee3687","block_type":"box","text":"such covenants not cured within the specified cure period may result in acceleration of outstanding","page_number":89,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"97b31bcc-b30f-4634-831e-b500859815e8","block_type":"box","text":"indebtedness and require the Fund to dispose of portfolio investments at a time when it may be","page_number":89,"box":{"x":117,"y":723,"width":706,"height":12}},{"id":"faccab66-d96b-4a0a-b682-7c1deb94ee8d","block_type":"box","text":"disadvantageous to do so.","page_number":89,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"537ca0c6-1bb0-41ae-b0f8-f05f1c3c47d4","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such","page_number":89,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"18e65db7-35ae-4bdf-a2a1-d308263e6b8a","block_type":"box","text":"borrowings are no less favorable than those available from comparable sources of funds in the","page_number":89,"box":{"x":117,"y":785,"width":701,"height":12}},{"id":"825f768e-dfc0-4c38-8e0d-3b4b206b79b9","block_type":"box","text":"marketplace.","page_number":89,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"da0e7662-e6ff-49e5-886d-9042f778ab54","block_type":"box","text":"Cash Management.","page_number":89,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"460109ba-acd5-473b-a26e-82d8b70219e5","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide","page_number":89,"box":{"x":269,"y":831,"width":578,"height":12}},{"id":"3e3bfba9-3b8b-402c-808e-7a362b134ade","block_type":"box","text":"liquidity necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if","page_number":89,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"b12f7c76-e9ed-439c-9c4a-cdc4c79e07fa","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":89,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"6cec69d2-2d37-44ca-b4e0-736ef3f2c955","block_type":"box","text":"certain types of instruments with remaining maturities of 397 days or less for liquidity purposes. Such","page_number":89,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"fd5236e2-c900-459d-b87b-a6c1d823d5ba","block_type":"box","text":"II-3","page_number":89,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"549d83cd-6279-40a5-a22b-48347424b83b","block_type":"box","text":"NM1026U-6042785-89/259","page_number":89,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ad4864c0-fa20-4e9f-8660-86dbd94b2cf0","block_type":"box","text":"instruments would consist of: (i) obligations of the U.S. Government, its agencies, instrumentalities,","page_number":90,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"7029fe68-8ec1-43f2-9afa-70e081ac598c","block_type":"box","text":"authorities or political subdivisions (“U.S. Government Securities”); (ii) other fixed-income securities","page_number":90,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"8e0b85d6-52f5-45b9-9ccf-df6ccf6fc717","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":90,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"0898d6d6-1055-4309-bd35-29db2aee7186","block_type":"box","text":"opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable certificates of","page_number":90,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"d25e6c5f-89af-49a2-8160-f86367ba40e1","block_type":"box","text":"deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":90,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"e1305356-be35-4403-a20a-bbdf4de8c66e","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the","page_number":90,"box":{"x":117,"y":165,"width":718,"height":12}},{"id":"b05dcdda-4a7a-4722-91ff-31e970e9f810","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":90,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"bcbcb4e7-6258-4e01-9f29-4f07c7c3b723","block_type":"box","text":"outstanding commercial paper, bank obligations or other short-term obligations rated Prime-1 by","page_number":90,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"8b023b9d-8c16-4fe6-941d-8c105f380327","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":90,"box":{"x":117,"y":211,"width":731,"height":12}},{"id":"15399b6e-4d3a-43cd-9ce9-0a05ea3f66ce","block_type":"box","text":"quality in the opinion of the Manager. For more information on money market instruments, see “Money","page_number":90,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"016710b8-a229-4eee-944b-11b0ebdb9710","block_type":"box","text":"Market Securities” below.","page_number":90,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"11112636-83b0-494d-b942-59fb16270bc4","block_type":"box","text":"Collateralized Debt Obligations.","page_number":90,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"8d6aea74-00f8-4574-8bc8-9800722cfe67","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations","page_number":90,"box":{"x":369,"y":273,"width":444,"height":12}},{"id":"25ef1649-d1f7-437c-84b0-dd7f3d3fc5b6","block_type":"box","text":"(“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations","page_number":90,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"be3d261b-88ff-4413-ab08-7efadcb795be","block_type":"box","text":"(“CLOs”) and other similarly structured securities. CDOs are types of asset-backed securities. A CBO","page_number":90,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"468265e5-e664-4f10-a527-8918a54c019e","block_type":"box","text":"is ordinarily issued by a trust or other special purpose entity (“SPE”) and is typically backed by a","page_number":90,"box":{"x":117,"y":320,"width":716,"height":12}},{"id":"8edfcc24-1673-4abd-b226-b7068809d532","block_type":"box","text":"diversified pool of fixed-income securities (which may include high risk, below investment grade","page_number":90,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"b30fb3f0-ea23-4b05-941a-d1a8fc419a85","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":90,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"6e2e58de-7d54-41e0-9f6f-0e5476cc0b56","block_type":"box","text":"collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior","page_number":90,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"ad58b74f-f8f1-459a-9d6f-ff3ee95aaa28","block_type":"box","text":"secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be","page_number":90,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"93f8f6b8-da05-496e-940d-910a98a87fa6","block_type":"box","text":"rated below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO","page_number":90,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"0b6f76d9-58c7-493c-a766-b0cd71d7622d","block_type":"box","text":"organized outside of the United States may not be deemed to be foreign securities if the CLO is","page_number":90,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"924dca8b-be0f-4488-a6dd-5282e2c4c24a","block_type":"box","text":"collateralized by a pool of loans, a substantial portion of which are U.S. loans. Although certain CDOs","page_number":90,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"ed2cf69c-f2ed-46d4-94d1-fea13846927b","block_type":"box","text":"may benefit from credit enhancement in the form of a senior-subordinate structure, over","page_number":90,"box":{"x":117,"y":444,"width":655,"height":12}},{"id":"b5288322-c89e-4a48-8a8a-1d7b08a80a45","block_type":"box","text":"collateralization or bond insurance, such enhancement may not always be present, and may fail to","page_number":90,"box":{"x":116,"y":459,"width":735,"height":12}},{"id":"f42ba038-0b3d-441c-a4dd-877bb876e5a4","block_type":"box","text":"protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may use","page_number":90,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"85722d07-b103-47a6-8213-74413c2f0f69","block_type":"box","text":"derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly,","page_number":90,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"1c7159bd-d8f2-4343-9341-088b384d92ce","block_type":"box","text":"which entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge","page_number":90,"box":{"x":116,"y":506,"width":742,"height":12}},{"id":"3642b9b4-0253-426d-b909-bd86b1d444bf","block_type":"box","text":"management fees and administrative expenses, which are in addition to those of a Fund.","page_number":90,"box":{"x":117,"y":521,"width":664,"height":12}},{"id":"995c6c70-5e82-4deb-a1c9-07c896e59c78","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":90,"box":{"x":117,"y":552,"width":724,"height":12}},{"id":"6a28ecd7-b405-46b4-abe1-97e5157f73ab","block_type":"box","text":"tranches, varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss","page_number":90,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"06af4a7e-a1aa-4c9e-b9ab-f2da5a64814d","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":90,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"23ce34ad-d823-4bb8-830b-afe49468bfa6","block_type":"box","text":"from default (though such protection is not complete). Since it is partially protected from defaults, a","page_number":90,"box":{"x":116,"y":599,"width":737,"height":12}},{"id":"01dc1b4b-a53c-4a85-8592-52f9bccc09c3","block_type":"box","text":"senior tranche from a CBO or CLO typically has higher ratings and lower yields than its underlying","page_number":90,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"504d1e17-c17d-4e95-83ce-a74ccab341a3","block_type":"box","text":"securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO or","page_number":90,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"e6b9f858-24b5-4763-924c-0b8e2abf30e8","block_type":"box","text":"CLO tranches can experience substantial losses due to actual defaults, downgrades of the underlying","page_number":90,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"a21ee899-cd4d-4dbf-81e5-f73bc4a5ad5e","block_type":"box","text":"collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests,","page_number":90,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"f8d0b3f8-2586-4848-ae2a-5d57ca6e433a","block_type":"box","text":"increased sensitivity to defaults due to collateral default and disappearance of protecting tranches,","page_number":90,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"d522b8de-d8f8-4366-a998-caf2d24eed2e","block_type":"box","text":"market anticipation of defaults as well as investor aversion to CBO or CLO securities as a class.","page_number":90,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"3f6a546f-fa6d-4707-b34f-6907ffe53c2e","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":90,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"b9168dc1-6556-4d52-9d70-447691c8019b","block_type":"box","text":"of obligations of the same type rather than cash), which involves continued exposure to default risk","page_number":90,"box":{"x":116,"y":723,"width":734,"height":12}},{"id":"a715c3ec-815b-4630-89e1-ac51f3a17f59","block_type":"box","text":"with respect to such payments.","page_number":90,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"c5bb44bb-1e2d-43b7-8159-3e7a7a0cb90a","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":90,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"b267b784-4020-46fa-becc-cf5b4c1266ba","block_type":"box","text":"class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately","page_number":90,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"0b159076-bbd8-4928-9794-96e0cf6e1c81","block_type":"box","text":"offered and sold, and thus are not registered under the securities laws. However, an active dealer","page_number":90,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"f54c38b0-31a8-4418-97cf-41e9419a93e2","block_type":"box","text":"market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the","page_number":90,"box":{"x":117,"y":816,"width":736,"height":12}},{"id":"913bf8c9-021e-49fd-abf6-1b75c9f271be","block_type":"box","text":"normal risks associated with fixed-income securities and asset-backed securities generally discussed","page_number":90,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"50024b41-bd42-42ed-9ecc-178c35acdf43","block_type":"box","text":"elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the possibility that","page_number":90,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"dc8c2a38-b4f8-4585-9142-f9501c184017","block_type":"box","text":"distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":90,"box":{"x":116,"y":862,"width":756,"height":12}},{"id":"fa364df3-f151-481f-82fa-ab1f75372883","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally","page_number":90,"box":{"x":117,"y":878,"width":708,"height":12}},{"id":"d18323d3-83bb-424d-94f3-4a7c4d46c262","block_type":"box","text":"II-4","page_number":90,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"05a2a11e-69bb-4d7d-b240-c921415f3808","block_type":"box","text":"NM1026U-6042785-90/259","page_number":90,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"fd451217-78bb-4384-b5cd-1b076cb882c5","block_type":"box","text":"recognized statistical rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that","page_number":91,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"c2cc7dd3-6afd-4164-955b-639f6eeeea14","block_type":"box","text":"are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal","page_number":91,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"14486595-31fc-4d71-85ee-ee8ef341221c","block_type":"box","text":"documents could lead to disputes among investors regarding the characterization of proceeds; (v) the","page_number":91,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"7bbda8e8-0b4b-4aa5-8f14-a75c3f2c64b1","block_type":"box","text":"investment return achieved by the Fund could be significantly different than those predicted by financial","page_number":91,"box":{"x":117,"y":134,"width":771,"height":12}},{"id":"fb93ac9e-7184-4c90-9beb-1c1a08dfe6e3","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":91,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"efa274af-e0a7-41e8-880d-dafcc607ae2a","block_type":"box","text":"liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may","page_number":91,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"9cc9b267-9a90-4e72-bce5-18e84768b1e2","block_type":"box","text":"perform poorly.","page_number":91,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"1698419c-025e-4ba3-b261-c1764ddb84d8","block_type":"box","text":"Commercial Paper.","page_number":91,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"b4733dc0-d250-445c-98d3-b45cbf22055c","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable","page_number":91,"box":{"x":268,"y":211,"width":607,"height":12}},{"id":"e5d9b2c1-6a78-4cf6-a7f1-524eddf9f42f","block_type":"box","text":"by each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance","page_number":91,"box":{"x":117,"y":227,"width":760,"height":12}},{"id":"cce356e1-ad44-49c9-bd6e-de7e80986691","block_type":"box","text":"on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities","page_number":91,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"d252000f-97f4-43b8-8225-05c915a78563","block_type":"box","text":"Act. Section 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is","page_number":91,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"075db66c-6159-4160-8f56-058db374abe5","block_type":"box","text":"frequently sold (and resold) to institutional investors such as the Fund through or with the assistance of","page_number":91,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"67ff272d-9843-4670-9296-3bd8b1f6f23b","block_type":"box","text":"investment dealers who make a market in the Section 4(a)(2) paper, thereby providing liquidity. Certain","page_number":91,"box":{"x":117,"y":289,"width":769,"height":12}},{"id":"77740c10-fed6-4a26-a9bb-2677788c5aa5","block_type":"box","text":"transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A","page_number":91,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"1f143a05-f331-49b8-b0f9-cb6c58313f71","block_type":"box","text":"under the Securities Act. Most Funds can purchase commercial paper rated (at the time of purchase)","page_number":91,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"2897cbac-c8da-42ed-8283-1e2b586ba9d6","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":91,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"6cc68b11-48fd-4198-8162-5a1a1c3be53c","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":91,"box":{"x":116,"y":351,"width":675,"height":12}},{"id":"18d6e31c-0b41-4f57-8cb1-99de1c6fa7b8","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all","page_number":91,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"a87532cc-c542-4a4f-a706-e7c307219c7b","block_type":"box","text":"fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If","page_number":91,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"1664aab8-2556-4c99-a5bb-0306db80b68c","block_type":"box","text":"interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature","page_number":91,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"baca6495-4f26-465f-8688-77fbd2f07d80","block_type":"box","text":"of a commercial paper investment generally makes it less susceptible to volatility than many other fixed","page_number":91,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"dc02ab09-963a-4063-b9a1-9049c1ad5b2d","block_type":"box","text":"income securities because interest rate risk typically increases as maturity lengths increase.","page_number":91,"box":{"x":117,"y":444,"width":686,"height":12}},{"id":"45e020e3-ff1c-4174-894c-7e96c7372ebf","block_type":"box","text":"Commercial paper tends to yield smaller returns than longer-term corporate debt because securities","page_number":91,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"b8f7d47b-a810-48e3-af05-2e152b342779","block_type":"box","text":"with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":91,"box":{"x":116,"y":475,"width":686,"height":12}},{"id":"daa7ceaa-2105-476c-b81c-476423229ff6","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":91,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"d84f934e-bdb6-4b04-a77e-fe0a09726451","block_type":"box","text":"Certain Funds seek to gain","page_number":91,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"3674fcc2-2ccb-4043-8fa0-f1c6b226f3ba","block_type":"box","text":"exposure to the commodities markets primarily through investments in hybrid instruments. Hybrid","page_number":91,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"96547420-d02e-4cb3-a9d4-f807bd53a88b","block_type":"box","text":"instruments are either equity or debt derivative securities with one or more commodity-dependent","page_number":91,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"8860a7f5-5514-4e04-8803-15fcff57610b","block_type":"box","text":"components that have payment features similar to a commodity futures contract, a commodity option","page_number":91,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"d26fdd69-c3f2-47a8-9de8-423e897b4241","block_type":"box","text":"contract, or a combination of both. Therefore, these instruments are “commodity-linked.” They are","page_number":91,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"1fda5b87-5dcc-44b7-a079-7501ddd0abda","block_type":"box","text":"considered “hybrid” instruments because they have both commodity-like and security-like","page_number":91,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"7782d0c9-ab73-41a5-bb24-84dc7c1cfd2c","block_type":"box","text":"characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":91,"box":{"x":116,"y":599,"width":738,"height":12}},{"id":"6cc5aa79-3a8c-4d04-9fc7-47a0954b0cea","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable","page_number":91,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"14a76904-e5dc-411a-9476-38853e1bcc13","block_type":"box","text":"economic variable.","page_number":91,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"6b388661-e723-438d-b80b-98968f9d337e","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than","page_number":91,"box":{"x":116,"y":661,"width":680,"height":12}},{"id":"8cf7c256-b070-4025-8c27-e9ab8042668e","block_type":"box","text":"investments in traditional equity and debt securities when the value of those traditional securities is","page_number":91,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"8509eea1-bd99-4b93-91ee-67f5637c0dd8","block_type":"box","text":"declining due to adverse economic conditions. As an example, during periods of rising inflation, debt","page_number":91,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"c6105618-0ef5-4372-933f-8122ce19da3d","block_type":"box","text":"securities have historically tended to decline in value due to the general increase in prevailing interest","page_number":91,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"f027940f-2599-4cb3-aa1f-e96537d16d3a","block_type":"box","text":"rates. Conversely, during those same periods of rising inflation, the prices of certain commodities, such","page_number":91,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"1b56814b-02d3-44a0-bdad-98e209d766c1","block_type":"box","text":"as oil and metals, have historically tended to increase. Of course, there cannot be any guarantee that","page_number":91,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"613d74d0-c27c-43bb-9086-5c023d477c7f","block_type":"box","text":"these investments will perform in that manner in the future, and at certain times the price movements","page_number":91,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"f9df6912-a2a1-433f-b310-c20a34d48ef0","block_type":"box","text":"of commodity-linked instruments have been parallel to those of debt and equity securities.","page_number":91,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"a9d3127b-4cd4-4a8e-9071-f78ef4b87bda","block_type":"box","text":"Commodities have historically tended to increase and decrease in value during different parts of the","page_number":91,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"55ec844c-d2af-4843-b732-886dd9813f56","block_type":"box","text":"business cycle than financial assets. Nevertheless, at various times, commodities prices may move in","page_number":91,"box":{"x":117,"y":800,"width":753,"height":12}},{"id":"1c5a56a2-e5f6-4912-bcd8-783e695ef0dc","block_type":"box","text":"tandem with the prices of financial assets and thus may not provide overall portfolio diversification","page_number":91,"box":{"x":116,"y":816,"width":725,"height":12}},{"id":"626bd640-bca2-4bf6-a4fd-6f81f2211255","block_type":"box","text":"benefits. Under favorable economic conditions, the Fund’s investments may be expected to under","page_number":91,"box":{"x":117,"y":831,"width":731,"height":12}},{"id":"03ac2675-fc1e-4cc6-8767-db610797ad80","block_type":"box","text":"perform an investment in traditional securities. Over the long term, the returns on the Fund’s","page_number":91,"box":{"x":117,"y":847,"width":688,"height":12}},{"id":"81797912-b34e-4c10-9014-bfae7aa77f25","block_type":"box","text":"investments are expected to exhibit low or negative correlation with stocks and bonds.","page_number":91,"box":{"x":117,"y":862,"width":643,"height":12}},{"id":"d6e622b6-8c72-4ae4-b11e-9838fa8cd935","block_type":"box","text":"II-5","page_number":91,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"b84e2f6f-cb4f-43bf-a346-3b079a1061cb","block_type":"box","text":"NM1026U-6042785-91/259","page_number":91,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"868c7328-8050-4103-93fd-98b771b4e64c","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":92,"box":{"x":117,"y":87,"width":218,"height":12}},{"id":"0b9c6082-3553-489e-874a-fb578a74e85b","block_type":"box","text":"Certain Funds may invest in hybrid instruments that qualify for exclusion","page_number":92,"box":{"x":336,"y":87,"width":533,"height":12}},{"id":"c9da5bb2-fc1d-4d76-bded-1e9a9bf9a5b1","block_type":"box","text":"from regulation under the Commodity Exchange Act","page_number":92,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"13b53c0f-f1b9-4274-bb67-c6bfd29db148","block_type":"box","text":"and the regulations adopted thereunder. A hybrid","page_number":92,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"f85cdfe1-9d42-4027-96dc-ffc60c5ee27d","block_type":"box","text":"instrument that qualifies for this exclusion from r","page_number":92,"box":{"x":117,"y":118,"width":347,"height":12}},{"id":"4bc31d4b-54d9-4b05-9cbe-2a3af75fc3f4","block_type":"box","text":"egulation must be “predominantly a security.” A hybrid","page_number":92,"box":{"x":464,"y":118,"width":398,"height":12}},{"id":"124d8459-7b50-4a60-8a0a-d333c86acf81","block_type":"box","text":"instrument is considered to be predominantly a security if","page_number":92,"box":{"x":117,"y":134,"width":415,"height":12}},{"id":"9ebd01ee-ac20-44bd-a35b-7a72672520c2","block_type":"box","text":"f (a) the issuer of the hybrid instrument receives","page_number":92,"box":{"x":531,"y":134,"width":347,"height":12}},{"id":"158d1d7c-000f-469e-aff5-6e84fbc0394d","block_type":"box","text":"payment in full of the purchase price of the hybr","page_number":92,"box":{"x":117,"y":149,"width":346,"height":12}},{"id":"0797bbe5-4be1-497d-b9f0-b68c2ba0ede5","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":92,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"42438f33-4b1c-443e-9ae0-ac2b8f0c8215","block_type":"box","text":"delivery of the hybrid instrument; (b) the purchaser or","page_number":92,"box":{"x":116,"y":165,"width":387,"height":12}},{"id":"d9b80acd-7a58-4d3b-9168-5b667bbabe4e","block_type":"box","text":"r holder of the hybrid instrument is not required to","page_number":92,"box":{"x":502,"y":165,"width":359,"height":12}},{"id":"d453ae6a-0ad7-416e-bb7b-b898045fd243","block_type":"box","text":"make any payment to the issuer in addition to t","page_number":92,"box":{"x":117,"y":180,"width":335,"height":12}},{"id":"b09afd25-1fe6-422e-ae20-9bbad462a97a","block_type":"box","text":"the purchase price paid under subparagraph (a), whether","page_number":92,"box":{"x":452,"y":180,"width":421,"height":12}},{"id":"4f4fc38b-6633-45cf-96da-d126cb540a75","block_type":"box","text":"as margin, settlement payment, or otherwise, during the life","page_number":92,"box":{"x":116,"y":196,"width":423,"height":12}},{"id":"e19d7e16-8668-4f7e-982a-3fbbf26e7fb7","block_type":"box","text":"fe of the hybrid instrument or at maturity; (c) the","page_number":92,"box":{"x":539,"y":196,"width":346,"height":12}},{"id":"1c923f86-88f0-4708-b198-9b9b9dec4a9d","block_type":"box","text":"issuer of the hybrid instrument is not subject by t","page_number":92,"box":{"x":117,"y":211,"width":351,"height":12}},{"id":"52b50d39-5820-4766-90b2-a1837713d841","block_type":"box","text":"he terms of the instrument to mark-to-market margining","page_number":92,"box":{"x":469,"y":211,"width":406,"height":12}},{"id":"89d74bce-a409-435c-9545-96d24c0d0ac5","block_type":"box","text":"requirements; and (d) the hybrid instrument is not ma","page_number":92,"box":{"x":117,"y":227,"width":385,"height":12}},{"id":"f69f3bfd-ffb1-4fb8-a089-d650fad945f6","block_type":"box","text":"rketed as a contract of sale of a commodity for","page_number":92,"box":{"x":504,"y":227,"width":341,"height":12}},{"id":"065f245d-2e7d-4d3f-9e43-37faff3272f4","block_type":"box","text":"future delivery (or option on such a contract) subjec","page_number":92,"box":{"x":116,"y":242,"width":374,"height":12}},{"id":"1d82f84e-730b-4728-9f72-c760e81c753d","block_type":"box","text":"t to applicable provisions of the Commodity Exchange","page_number":92,"box":{"x":490,"y":242,"width":396,"height":12}},{"id":"e21b6df1-ce89-4ff4-9466-040432214fc8","block_type":"box","text":"Act. Hybrid instruments may be principal protected, parti","page_number":92,"box":{"x":116,"y":258,"width":408,"height":12}},{"id":"6a63d47a-56d4-4128-977c-03743ea6136d","block_type":"box","text":"ally protected, or offer no principal protection. A","page_number":92,"box":{"x":525,"y":258,"width":349,"height":12}},{"id":"143d07ba-b9ee-4e6f-9ea2-bad23e5f96a3","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":92,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"6b130fe7-a317-4d3e-a6b0-a0012ea5d485","block_type":"box","text":"he issuer will pay, at a minimum, the par value of the","page_number":92,"box":{"x":477,"y":273,"width":387,"height":12}},{"id":"0ff208de-ea8a-4cfa-9a66-7a078c64c2ba","block_type":"box","text":"note at maturity. Therefore, if the commodity value to w","page_number":92,"box":{"x":117,"y":289,"width":389,"height":12}},{"id":"29c28b7e-32c9-44bd-b52e-b8a4638b7e71","block_type":"box","text":"which the hybrid instrument is linked declines over","page_number":92,"box":{"x":505,"y":289,"width":371,"height":12}},{"id":"61d42ffd-3ce5-484f-b1b2-19bd94df5cec","block_type":"box","text":"the life of the note, the Fund will receive","page_number":92,"box":{"x":116,"y":304,"width":294,"height":11}},{"id":"45b790fc-3ce1-452c-91d2-d6fb7857d2f3","block_type":"box","text":"at maturity the face or stated value of the note. With a principal","page_number":92,"box":{"x":410,"y":304,"width":461,"height":12}},{"id":"ef0759b9-2b88-41bd-a25b-3a97dd39de0b","block_type":"box","text":"protected hybrid instrument, the Fund will receive at matu","page_number":92,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"7e3b8bb6-040a-4e15-b7a3-fac8481b2545","block_type":"box","text":"rity the greater of the","page_number":92,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"c2eb7bb9-92bf-4ef8-9e70-1937e8c3c369","block_type":"box","text":"par value of the note or","page_number":92,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"e69bc32d-4c9a-4ff8-96b0-10022514c5f0","block_type":"box","text":"the increase in its value based on the underlying comm","page_number":92,"box":{"x":116,"y":335,"width":400,"height":12}},{"id":"3a1bc476-c27a-4e64-805d-e84398bbaf3d","block_type":"box","text":"odity or index. This protection is, in effect, an","page_number":92,"box":{"x":518,"y":335,"width":329,"height":12}},{"id":"01935fe3-12b1-4158-b983-dc25dd308cb2","block_type":"box","text":"option whose value is subject to the volatility and","page_number":92,"box":{"x":116,"y":351,"width":359,"height":12}},{"id":"552e46d6-405e-43a7-a910-4b87490e6d36","block_type":"box","text":"price level of the underlying commodity. The Manager’s","page_number":92,"box":{"x":476,"y":351,"width":407,"height":12}},{"id":"f6c39662-2004-4f8d-8950-532f0478f6d1","block_type":"box","text":"decision whether to use principal protection depends in","page_number":92,"box":{"x":116,"y":366,"width":405,"height":12}},{"id":"3fc141d8-ddde-4eb8-aeb5-80e8ec86c08d","block_type":"box","text":"part on the cost of the protection. In addition, the","page_number":92,"box":{"x":522,"y":366,"width":356,"height":12}},{"id":"651d5acb-3642-48ac-8189-adda6e16278a","block_type":"box","text":"protection feature depends upon the ability","page_number":92,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"b11b492e-bd06-4141-848d-75252f9cee54","block_type":"box","text":"of the issuer to meet its obligation to buy back the security,","page_number":92,"box":{"x":432,"y":382,"width":431,"height":12}},{"id":"662f8a1b-bdf9-4a6a-9a47-a364f72237e9","block_type":"box","text":"and, therefore, depends on the creditworthiness of the","page_number":92,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"5f7cc1ce-4fb6-4f7b-b679-6584c65119bf","block_type":"box","text":"issuer. With full principal protection, the Fund will","page_number":92,"box":{"x":516,"y":397,"width":358,"height":12}},{"id":"77c1a2bc-5881-4b84-bc0a-1c424d83c464","block_type":"box","text":"receive at maturity of the hybrid instrument either","page_number":92,"box":{"x":117,"y":413,"width":356,"height":12}},{"id":"9a9cdc29-0429-4996-be54-5ff7cc1a36c0","block_type":"box","text":"r the stated par value of the hybrid instrument, or","page_number":92,"box":{"x":472,"y":413,"width":354,"height":12}},{"id":"0d7e4f73-a765-4b79-b0f8-5a5a5b29b62f","block_type":"box","text":"potentially, an amount greater than","page_number":92,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"0505df87-4c0f-4c93-afcc-89aeb8fe16fe","block_type":"box","text":"the stated par value if the underlying commodity, index, futures","page_number":92,"box":{"x":375,"y":428,"width":461,"height":12}},{"id":"d2682599-e271-4c8a-bd14-763711508023","block_type":"box","text":"contract or economic variable to which the hybrid in","page_number":92,"box":{"x":116,"y":444,"width":373,"height":12}},{"id":"2ca97c1a-a700-4c50-a912-90df0913c2c9","block_type":"box","text":"strument is linked has increased in value. Partially","page_number":92,"box":{"x":490,"y":444,"width":368,"height":12}},{"id":"d7702fac-996d-498f-9d86-efe34a3b27ce","block_type":"box","text":"protected hybrid instruments may suffer some loss of","page_number":92,"box":{"x":117,"y":459,"width":386,"height":12}},{"id":"8728bee5-4b46-4245-981c-72f39b5cab2d","block_type":"box","text":"f principal if the underlying commodity, index, futures","page_number":92,"box":{"x":502,"y":459,"width":383,"height":12}},{"id":"31e1a41e-d6f7-4682-86b6-759dfd39adfb","block_type":"box","text":"contract or economic variable to which the hybrid ins","page_number":92,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"0cf75eb1-1b31-490c-91f9-5730b7b71dc4","block_type":"box","text":"trument is linked declines in value during the term of","page_number":92,"box":{"x":498,"y":475,"width":384,"height":12}},{"id":"88e09298-64e2-4e21-9b48-49ccefd457f2","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":92,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"f275d71f-9b55-4f17-930b-4a781510ab12","block_type":"box","text":"brid instruments have a specified limit as to the","page_number":92,"box":{"x":505,"y":490,"width":346,"height":12}},{"id":"ee1ace86-ca0a-48c4-8caf-955cce448fad","block_type":"box","text":"amount of principal that they may lose.","page_number":92,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"d9e925dc-89b1-4ef0-84ec-b51853ad9b44","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":92,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"be36fc80-e170-4db8-8473-8173077314f8","block_type":"box","text":"Certain Funds may invest in hybrid instruments that","page_number":92,"box":{"x":473,"y":537,"width":393,"height":12}},{"id":"b8266942-470b-4a73-acd9-748a24594447","block_type":"box","text":"offer no principal protection. At maturity, there is a risk that the underlying commodity price, futures","page_number":92,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"56c91344-3899-422c-b7db-45e4f73c6a60","block_type":"box","text":"contract, index or other economic variable may have declined sufficiently in value such that some or all","page_number":92,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"9e633ac2-4d6d-4d1b-a34d-0c7051c1b79b","block_type":"box","text":"of the face value of the hybrid instrument might not be returned. The Manager, at its discretion, may","page_number":92,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"2ac9a2c1-f19b-4bc0-9cbd-5972bc89407d","block_type":"box","text":"invest in a partially protected principal structured note or a note without principal protection. In deciding","page_number":92,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"187901dd-770d-42ab-9f03-e72e3eef22ea","block_type":"box","text":"to purchase a note without principal protection, the Manager may consider, among other things, the","page_number":92,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"026f892f-fd4a-41de-adcc-e6633840993f","block_type":"box","text":"expected performance of the underlying commodity futures contract, index or other economic variable","page_number":92,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"87bfd5d8-8c15-4603-9b6e-49bd7d35d214","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":92,"box":{"x":116,"y":645,"width":717,"height":12}},{"id":"557563de-32f5-42c7-af53-777433676e6a","block_type":"box","text":"believes are relevant.","page_number":92,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"96dd7a1a-2240-4bd2-a74b-3a8b75aa6365","block_type":"box","text":"Limitations on Leverage.","page_number":92,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"e1d15a1c-d9be-4cb3-8a9b-5a22dd856d76","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve","page_number":92,"box":{"x":300,"y":692,"width":522,"height":12}},{"id":"69c08b04-e600-4f90-90f4-dfd71b7056eb","block_type":"box","text":"leverage. To avoid being subject to undue leverage risk,","page_number":92,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"c2eefc20-49ed-488d-a2fd-20a1509a4a83","block_type":"box","text":"a Fund will seek to limit the amount of economic","page_number":92,"box":{"x":529,"y":707,"width":349,"height":10}},{"id":"6d9aae70-fb0a-4125-a123-1d1dbaf02839","block_type":"box","text":"leverage it has under any one hybrid instrument t","page_number":92,"box":{"x":117,"y":723,"width":356,"height":12}},{"id":"f983ba4d-6239-4ecb-9ec9-3cb7b6a45bae","block_type":"box","text":"hat it buys and the leverage of the Fund’s overall","page_number":92,"box":{"x":474,"y":723,"width":352,"height":12}},{"id":"b444d438-c0b8-473b-8121-92cdad4a91b1","block_type":"box","text":"portfolio. A Fund will not invest in a hybrid instrument i","page_number":92,"box":{"x":117,"y":738,"width":390,"height":12}},{"id":"bf4d41b9-47b7-4914-a535-712863585ec1","block_type":"box","text":"f, at the time of purchase: (i) that instrument’s","page_number":92,"box":{"x":508,"y":738,"width":330,"height":12}},{"id":"8ff4c4c1-601a-4276-9e55-2f2283f9c0fa","block_type":"box","text":"“leverage ratio” exceeds 300% of the price increase","page_number":92,"box":{"x":116,"y":754,"width":375,"height":12}},{"id":"1e61a51e-64d3-4297-ab01-887ccdf2b5de","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":92,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"c6f72eef-4def-48a0-8e3e-6e8633155bb5","block_type":"box","text":"or other economic variable or (ii) the Fund’s “portfo","page_number":92,"box":{"x":116,"y":769,"width":369,"height":12}},{"id":"970ef50e-8edb-4d86-a60a-6fbe2743d97d","block_type":"box","text":"lio leverage ratio” exceeds 150%, measured at the","page_number":92,"box":{"x":486,"y":769,"width":366,"height":12}},{"id":"6757c608-007c-47d8-99f5-376eb5845ba4","block_type":"box","text":"time of purchase. “Leverage ratio” is the expected in","page_number":92,"box":{"x":116,"y":785,"width":378,"height":12}},{"id":"501bfe8c-d239-4e50-8a75-968bfcfb36ff","block_type":"box","text":"crease in the value of a hybrid instrument, assuming","page_number":92,"box":{"x":496,"y":785,"width":379,"height":12}},{"id":"9f1124fc-d100-4536-8098-c13c6bdb332f","block_type":"box","text":"a one percent price increase in the underlying commodi","page_number":92,"box":{"x":116,"y":800,"width":403,"height":12}},{"id":"a79cd989-0964-45db-baf7-9fee66eff60e","block_type":"box","text":"ty, futures contract, index or other economic","page_number":92,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"760cd44c-ffd0-4b88-8d0f-e288da59d680","block_type":"box","text":"factor. In other words, for a hybrid instrument wit","page_number":92,"box":{"x":116,"y":816,"width":352,"height":12}},{"id":"0394d5a4-b710-4773-ac2c-6983a854a757","block_type":"box","text":"h a leverage factor of 150%, a 1% gain in the underlying","page_number":92,"box":{"x":469,"y":816,"width":407,"height":12}},{"id":"e11e1cff-a5cd-48ca-9a70-f682df68ab7a","block_type":"box","text":"economic variable would be expected to result in a","page_number":92,"box":{"x":116,"y":831,"width":373,"height":12}},{"id":"97d8980e-f682-410a-8d60-ef556034a69e","block_type":"box","text":"1.5% gain in value for the hybrid instrument.","page_number":92,"box":{"x":491,"y":831,"width":323,"height":12}},{"id":"92fce222-74c9-4939-ab9c-e691bac4d6d6","block_type":"box","text":"Conversely, a hybrid instrument with a leverage fact","page_number":92,"box":{"x":117,"y":847,"width":376,"height":12}},{"id":"45b01041-e793-47c8-9e8c-18206bf1d676","block_type":"box","text":"or of 150% would suffer a 1.5% loss if the underlying","page_number":92,"box":{"x":494,"y":847,"width":387,"height":12}},{"id":"67a4813b-d0ee-4339-926f-88ac0709ac58","block_type":"box","text":"economic variable lost 1% of its value. “Portfolio","page_number":92,"box":{"x":116,"y":862,"width":348,"height":10}},{"id":"7947db3f-111f-4553-b412-6d97f1f36d30","block_type":"box","text":"leverage ratio” is defined as the average (mean)","page_number":92,"box":{"x":465,"y":862,"width":359,"height":12}},{"id":"5ae619f7-67e3-4da5-80ca-c780f462158e","block_type":"box","text":"leverage ratio of all instruments in a Fund’s portfolio, we","page_number":92,"box":{"x":117,"y":878,"width":405,"height":12}},{"id":"34c149aa-b66f-4f6a-be4e-3b31d65faa25","block_type":"box","text":"ighted by the market values of such instruments","page_number":92,"box":{"x":523,"y":878,"width":353,"height":12}},{"id":"3e5a6e61-e154-42fe-982f-fcae09da8785","block_type":"box","text":"II-6","page_number":92,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"4aa39e5f-88b3-4f9c-99fb-7ac2b7138661","block_type":"box","text":"NM1026U-6042785-92/259","page_number":92,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8ae62aa9-f44d-44b0-a254-80d2a5830376","block_type":"box","text":"or, in the case of futures contracts, their notional v","page_number":93,"box":{"x":116,"y":87,"width":355,"height":11}},{"id":"f0d7c0d8-0173-4bb9-b050-4e9738cf2ae7","block_type":"box","text":"values. A Fund may at times or from time to time decide","page_number":93,"box":{"x":471,"y":87,"width":412,"height":12}},{"id":"b92afdf9-525f-4390-ac55-f3c9fcc26bcd","block_type":"box","text":"not to use leverage in its investments or us","page_number":93,"box":{"x":117,"y":103,"width":310,"height":12}},{"id":"bee41987-cb94-4684-8442-366bfb629e79","block_type":"box","text":"e less leverage than may otherwise be allowable.","page_number":93,"box":{"x":428,"y":103,"width":363,"height":12}},{"id":"c7ca8266-aa4c-42f3-a8a6-b50a201100cb","block_type":"box","text":"Counterparty Risk.","page_number":93,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"3649da67-1cc5-4f96-9ea6-afbb5a314829","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded","page_number":93,"box":{"x":255,"y":134,"width":625,"height":12}},{"id":"e96881f4-912a-4fbc-b825-bab71687fd83","block_type":"box","text":"futures and options, which are standard contracts, hybrid instruments are customized securities, tailor","page_number":93,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"5875f151-ad90-4901-977c-11a48f3aa7f2","block_type":"box","text":"made by a specific issuer. With a listed futures or options contract, an investor’s counterparty is the","page_number":93,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"3bb264fb-1a65-4358-8a5a-640be5298d93","block_type":"box","text":"exchange clearinghouse. Exchange clearinghouses are capitalized by the exchange members and","page_number":93,"box":{"x":116,"y":180,"width":738,"height":12}},{"id":"bdf386dc-abcf-401b-9111-03683625b728","block_type":"box","text":"typically have high investment grade ratings (","page_number":93,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"df103321-c15a-4696-a031-ac399582e7e3","block_type":"box","text":"e.g.","page_number":93,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"4ca9b4c9-d923-4779-941f-f77a374c5700","block_type":"box","text":", ratings of AAA or AA by S&P). Therefore, the risk is","page_number":93,"box":{"x":482,"y":196,"width":396,"height":12}},{"id":"bc319ed5-aa0b-465a-98c7-6e41a685eccf","block_type":"box","text":"small that an exchange clearinghouse might be unable to meet its obligations at maturity. However,","page_number":93,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"ef41ffe2-d099-49c9-8a45-a129afbd8420","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":93,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"ba868103-0daf-4827-b306-7b50232ce915","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":93,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"24a6876c-7659-4af7-84c9-b6832d7969b6","block_type":"box","text":"under the structured note.","page_number":93,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"6e2a9468-7728-44ec-9244-1b9e6aebec70","block_type":"box","text":"Convertible Securities.","page_number":93,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"b17d16f6-6394-44eb-a3f0-25203fbcca57","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other","page_number":93,"box":{"x":298,"y":289,"width":554,"height":12}},{"id":"7449d25b-2a89-4c73-a361-d1a6ae3609d8","block_type":"box","text":"security that may be converted into or exchanged for a prescribed amount of common stock or other","page_number":93,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"4201944e-f3ec-4aa1-ad5f-793da72c8121","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":93,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"d0bfa174-ccb5-4f59-b447-3889cf3307cb","block_type":"box","text":"formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the","page_number":93,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"216148f2-fd0b-4782-9da3-08f4fd69491a","block_type":"box","text":"dividend paid on preferred stock until the convertible security matures or is redeemed, converted or","page_number":93,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"c0b1d240-f716-4ab4-963c-1947150a64ef","block_type":"box","text":"exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible","page_number":93,"box":{"x":116,"y":366,"width":738,"height":12}},{"id":"668ecd36-acae-4f1b-952c-3d40baae26ae","block_type":"box","text":"income securities in that they ordinarily provide a stable stream of income with generally higher yields","page_number":93,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"304b2040-95f9-4b9a-b56c-d01cf38c2870","block_type":"box","text":"than those of common stocks of the same or similar issuers, but lower yields than comparable","page_number":93,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"a887bba8-429c-47a6-a65d-22b4897195be","block_type":"box","text":"nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":93,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"ef7799f9-9b17-41c6-900d-1b57cec050ab","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The","page_number":93,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"26d7603a-3845-4eb3-9ba5-b671df653a1d","block_type":"box","text":"credit standing of the issuer and other factors also may have an effect on the convertible security’s","page_number":93,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"c8dcefb3-02be-411d-b59f-387f781e0165","block_type":"box","text":"investment value. Convertible securities rank senior to common stock in a corporation’s capital","page_number":93,"box":{"x":117,"y":459,"width":706,"height":12}},{"id":"1c709b98-f2ad-4531-adb9-fe84d6dddb31","block_type":"box","text":"structure but are usually subordinated to comparable nonconvertible securities. Convertible securities","page_number":93,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"bce07d9c-9e6f-498b-9deb-491257fa1f6b","block_type":"box","text":"may be subject to redemption at the option of the issuer at a price established in the convertible","page_number":93,"box":{"x":117,"y":490,"width":714,"height":12}},{"id":"234f10a7-af24-4bb8-b7f7-440be35a6d22","block_type":"box","text":"security’s governing instrument.","page_number":93,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"696b83d2-de9f-40c5-89e7-5a3fccf89933","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an","page_number":93,"box":{"x":116,"y":537,"width":710,"height":12}},{"id":"341645cc-4f47-48b7-95c0-4a7d0e36fb57","block_type":"box","text":"investment company seeking a high total return from capital appreciation and investment income.","page_number":93,"box":{"x":117,"y":552,"width":727,"height":12}},{"id":"62dfa4a5-3ce5-4c80-9679-8eeb50866a34","block_type":"box","text":"These characteristics include the potential for capital appreciation as the value of the underlying","page_number":93,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"76f668d2-f984-499b-89de-9891357da5af","block_type":"box","text":"common stock increases, the relatively high yield received from dividend or interest payments as","page_number":93,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"a8ad28cc-3306-4628-b796-6cfbd8f9b1e3","block_type":"box","text":"compared to common stock dividends and decreased risks of decline in value relative to the underlying","page_number":93,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"e608601c-095e-4f02-b720-e5f63d5ac55a","block_type":"box","text":"common stock due to their fixed-income nature. As a result of the conversion feature, however, the","page_number":93,"box":{"x":116,"y":614,"width":739,"height":11}},{"id":"3b4d17a5-d750-4ef8-ba12-e9b12c5667dc","block_type":"box","text":"interest rate or dividend preference on a convertible security is generally less than would be the case if","page_number":93,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"e7e4d8d5-68b0-407c-9879-f2615590eac5","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":93,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"7387d9ae-941d-4d8c-b6a0-53650218d47e","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security","page_number":93,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"30bd8775-6e3d-49d3-bc9e-99ec87d3642e","block_type":"box","text":"relative to its credit quality and the potential capital appreciation that is offered by the underlying","page_number":93,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"73478a14-aa2e-42ca-9846-981bc437965e","block_type":"box","text":"common stock, among other things.","page_number":93,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"ad1ddfb1-e788-4b68-93c3-bb34b3cc4c47","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":93,"box":{"x":117,"y":738,"width":758,"height":10}},{"id":"4e2507f7-7995-4404-b634-cd3551af5221","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the","page_number":93,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"4df34184-cf1c-40fa-8bc0-c6d25c04114b","block_type":"box","text":"underlying equity securities may be quoted in the currency of the country where the issuer is domiciled.","page_number":93,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"4f868eea-112a-429b-967e-b94811a44ad8","block_type":"box","text":"As a result, fluctuations in the exchange rate between the currency in which the debt security is","page_number":93,"box":{"x":116,"y":785,"width":707,"height":12}},{"id":"2ce8de49-8d69-4517-bef1-8fd95b52eec1","block_type":"box","text":"denominated and the currency in which the share price is quoted will affect the value of the convertible","page_number":93,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"219b912e-f5e9-4160-a9be-5f858b5d700a","block_type":"box","text":"security. With respect to convertible securities denominated in a currency different from that of the","page_number":93,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"94c4ed85-4649-408c-b156-f3768cb60f4b","block_type":"box","text":"underlying equity securities, the conversion price may be based on a fixed exchange rate established","page_number":93,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"b3f21307-6e01-40a4-a87e-2c033e62e836","block_type":"box","text":"at the time the security is issued, which may increase the effects of currency risk. As described below,","page_number":93,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"1865b922-0e20-4be0-a690-4f86c248a8f9","block_type":"box","text":"a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to reduce","page_number":93,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"8633bf4e-5b4f-414d-99e7-804b8e455731","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":93,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"916a37ab-48e3-4632-a1df-294ca70b5899","block_type":"box","text":"II-7","page_number":93,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"3c0bb553-ece0-4f61-b1b7-a8a12cdc497f","block_type":"box","text":"NM1026U-6042785-93/259","page_number":93,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"dca10b76-a065-4e45-80db-bbd55305cb38","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield","page_number":94,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"7202580e-c44a-4cf7-bd2e-152bdb21a33b","block_type":"box","text":"on nonconvertible securities of comparable issuers and by the value of the underlying common stock.","page_number":94,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"eea69239-3b58-4bd6-9a26-41d24ce2a7d4","block_type":"box","text":"The value of a convertible security viewed without regard to its conversion feature (","page_number":94,"box":{"x":116,"y":118,"width":617,"height":12}},{"id":"a5a0b3e9-7310-4980-b5dd-6f2cc5fb0f5e","block_type":"box","text":"i.e.","page_number":94,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"d0ce6e87-88b6-419b-91c6-4b2a88077b28","block_type":"box","text":", strictly on the","page_number":94,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"dc05677c-9285-4d48-8580-d62eae753245","block_type":"box","text":"basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates","page_number":94,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"61e4d239-c86c-45ad-be3f-83363378ef3d","block_type":"box","text":"change, the investment value of the convertible security typically will fluctuate. At the same time,","page_number":94,"box":{"x":116,"y":149,"width":720,"height":12}},{"id":"a3ac4579-262c-4b3f-a363-bb176a4524a9","block_type":"box","text":"however, the value of the convertible security will be influenced by its “conversion value,” which is the","page_number":94,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"1b05ab97-7b87-4149-a42d-3a7e44f69122","block_type":"box","text":"market value of the underlying common stock that would be obtained if the convertible security were","page_number":94,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"621babe7-095f-4950-aec3-589e907238f6","block_type":"box","text":"converted. Conversion value fluctuates directly with the price of the underlying common stock. If the","page_number":94,"box":{"x":116,"y":196,"width":746,"height":12}},{"id":"74157b8b-f4cb-4061-8c11-1915556bba69","block_type":"box","text":"conversion value of a convertible security is substantially below its investment value, the price of the","page_number":94,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"b8aeb269-3c12-4680-b556-c067edc000cb","block_type":"box","text":"convertible security is governed principally by its investment value. To the extent the conversion value","page_number":94,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"be5bf0a4-4565-450b-b450-000688c3e746","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the","page_number":94,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"e6bb731d-13a5-43e2-b473-53866d4245fb","block_type":"box","text":"price of the convertible security will be influenced principally by its conversion value. A convertible","page_number":94,"box":{"x":117,"y":258,"width":729,"height":12}},{"id":"cb4d7e65-168b-4829-b49e-0016176e7d1b","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":94,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"806ade12-5649-4534-bd3e-5c07812adaca","block_type":"box","text":"to acquire the underlying common stock while holding a fixed-income security. The yield and","page_number":94,"box":{"x":116,"y":289,"width":691,"height":12}},{"id":"f71a0b11-f6da-4ac7-a125-ca172d50907e","block_type":"box","text":"conversion premium of convertible securities issued in Japan and the Euromarket are frequently","page_number":94,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"92c81e73-4646-4269-af7d-5d0a02a03bca","block_type":"box","text":"determined at levels that cause the conversion value to affect their market value more than the","page_number":94,"box":{"x":116,"y":320,"width":708,"height":9}},{"id":"2b09d516-0e5c-44ba-9e1a-61e7348d8312","block_type":"box","text":"securities’ investment value.","page_number":94,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"a801dc0b-21db-4053-af4b-3ba3353bff52","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":94,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"19df5176-48ee-48da-92b7-1238a12285dc","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible","page_number":94,"box":{"x":116,"y":378,"width":713,"height":12}},{"id":"697a665f-56e3-417a-b1a3-994309783804","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":94,"box":{"x":116,"y":393,"width":734,"height":12}},{"id":"539df2bb-ad80-437f-ae8c-3c435fec38fe","block_type":"box","text":"provision, indenture or other governing instrument pursuant to which the convertible security was","page_number":94,"box":{"x":117,"y":409,"width":723,"height":12}},{"id":"49c8f3ae-9ab8-4462-b74e-2ffe2c0b4f36","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":94,"box":{"x":117,"y":424,"width":741,"height":12}},{"id":"2487b28e-a8ff-4eff-85cb-89a7307a22d7","block_type":"box","text":"redeem the security, convert it into the underlying common stock or sell it to a third party. Certain","page_number":94,"box":{"x":117,"y":440,"width":723,"height":12}},{"id":"83c4e2b6-ba81-4f4d-839b-f86574564f00","block_type":"box","text":"convertible debt securities may provide a put option to the holder, which entitles the holder to cause","page_number":94,"box":{"x":116,"y":455,"width":745,"height":12}},{"id":"753e2970-055c-4e1a-840e-f1279997c46a","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":94,"box":{"x":116,"y":471,"width":745,"height":12}},{"id":"a1a632f2-40e5-41a9-9516-bf0f4b4a2e65","block_type":"box","text":"security under certain circumstances.","page_number":94,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"c1948688-72d1-4de2-9cd0-d54bd42fc01b","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include","page_number":94,"box":{"x":116,"y":513,"width":765,"height":12}},{"id":"c90c13f6-7d53-4525-bff0-e849276934cc","block_type":"box","text":"either Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are","page_number":94,"box":{"x":116,"y":529,"width":717,"height":9}},{"id":"626a2cb5-8ee3-4be8-96bb-ba1b7fa9e1e4","block_type":"box","text":"instruments that are created by the issuer and have the economic characteristics of traditional","page_number":94,"box":{"x":117,"y":544,"width":701,"height":12}},{"id":"f45b1ee6-b456-4c15-ad69-33de32919c13","block_type":"box","text":"convertible securities but may not actually permit conversion into the underlying equity securities in all","page_number":94,"box":{"x":116,"y":560,"width":760,"height":12}},{"id":"5c31d82b-f523-4d85-ad5e-96b78a44da2c","block_type":"box","text":"circumstances. As an example, a private company may issue a Cash-Settled Convertible that is","page_number":94,"box":{"x":116,"y":575,"width":715,"height":12}},{"id":"c20b3af3-4b6b-4078-9a90-7fec60799447","block_type":"box","text":"convertible into common stock only if the company successfully completes a public offering of its","page_number":94,"box":{"x":116,"y":591,"width":721,"height":12}},{"id":"9c41d590-0ea9-4a49-bd10-582ee0f194c0","block_type":"box","text":"common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation.","page_number":94,"box":{"x":116,"y":606,"width":751,"height":12}},{"id":"2472ea83-9fc8-442c-8cad-f4a8982dbbf7","block_type":"box","text":"“Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":94,"box":{"x":116,"y":622,"width":726,"height":12}},{"id":"ee7a8db4-a789-4dfd-9048-455e4f788c08","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":94,"box":{"x":116,"y":637,"width":651,"height":12}},{"id":"7cd491bf-bcd1-4cfe-8cb4-5df2e09b5a4b","block_type":"box","text":"i.e.","page_number":94,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"10cb8d25-57c2-41f4-9f09-9ef6fef841e2","block_type":"box","text":", fixed","page_number":94,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"2662ba09-0c2a-448a-966c-ce80fd805826","block_type":"box","text":"income (“fixed-income component”) or a right to acquire equity securities (“convertibility component”).","page_number":94,"box":{"x":117,"y":653,"width":756,"height":12}},{"id":"f5628d2f-fd05-4853-883b-598ac5e9ddd8","block_type":"box","text":"The fixed-income component is achieved by investing in nonconvertible fixed-income securities, such","page_number":94,"box":{"x":116,"y":668,"width":751,"height":12}},{"id":"ebf99643-a57c-4314-bdc1-6905556fd3df","block_type":"box","text":"as nonconvertible bonds, preferred stocks and money market instruments. The convertibility","page_number":94,"box":{"x":116,"y":684,"width":684,"height":12}},{"id":"d2cae1bb-6140-46fc-9d07-9693baf691c7","block_type":"box","text":"component is achieved by investing in call options, warrants, or other securities with equity conversion","page_number":94,"box":{"x":116,"y":700,"width":758,"height":12}},{"id":"402b5166-c2dd-4638-a790-e7c192acb2e4","block_type":"box","text":"features (“equity features”) granting the holder the right to purchase a specified quantity of the","page_number":94,"box":{"x":116,"y":715,"width":697,"height":12}},{"id":"ae860ca4-616d-4751-88f7-50aab9e7b27e","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":94,"box":{"x":117,"y":730,"width":745,"height":13}},{"id":"717961eb-15d2-427c-81b3-aa9d1b2febe6","block_type":"box","text":"option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":94,"box":{"x":116,"y":746,"width":685,"height":12}},{"id":"abe5e11a-a834-4502-8ca3-5a20c7c216ac","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a","page_number":94,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"590ba741-786b-4976-999b-08327e8bad3a","block_type":"box","text":"traditional convertible security, which is a single security that has a unitary market value, a","page_number":94,"box":{"x":116,"y":789,"width":669,"height":12}},{"id":"f525a880-3976-4a6a-97fe-9a0c9ab6591f","block_type":"box","text":"Manufactured Convertible is comprised of two or more separate securities, each with its own market","page_number":94,"box":{"x":117,"y":804,"width":742,"height":12}},{"id":"0f1d8eee-9700-4e33-856c-9ac0af8f617a","block_type":"box","text":"value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values","page_number":94,"box":{"x":116,"y":820,"width":755,"height":11}},{"id":"146e1daf-5af7-41f4-805c-b248367b848a","block_type":"box","text":"of its fixed-income component and its convertibility component.","page_number":94,"box":{"x":116,"y":835,"width":472,"height":12}},{"id":"b8431650-897d-4220-906c-5665ccdc869c","block_type":"box","text":"More flexibility is possible in the creation of a Manufact","page_number":94,"box":{"x":117,"y":862,"width":382,"height":12}},{"id":"823cfe96-ad6e-4487-ace8-7545a4b59bf7","block_type":"box","text":"ctured Convertible than in the purchase of a traditional","page_number":94,"box":{"x":499,"y":862,"width":382,"height":12}},{"id":"1ebd44ed-1b55-42c8-aae9-ee24f81703d3","block_type":"box","text":"convertible security. Because many corporations hav","page_number":94,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"db9917e1-d26b-4e8f-8325-949652780703","block_type":"box","text":"e not issued convertible securities, the Manager may","page_number":94,"box":{"x":493,"y":878,"width":380,"height":12}},{"id":"db9a27ff-b0e1-464c-84a3-4a97dfe5bdae","block_type":"box","text":"II-8","page_number":94,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"cd21efce-9b8f-4b21-9321-dcc0981fb3a7","block_type":"box","text":"NM1026U-6042785-94/259","page_number":94,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a75a56bb-d82e-4ee1-ae7a-3f0a41be37d8","block_type":"box","text":"combine a fixed-income instrument and an equity feature wit","page_number":95,"box":{"x":116,"y":87,"width":429,"height":12}},{"id":"3a1bc5d6-c620-40a1-9bf5-d4fb7e3a61a0","block_type":"box","text":"h respect to the stock of the issuer of the fixed","page_number":95,"box":{"x":546,"y":87,"width":332,"height":12}},{"id":"e8d7ea4d-712e-4e26-934c-32779c384952","block_type":"box","text":"income instrument to create a synthetic converti","page_number":95,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"7cc9666e-7887-43d3-acc5-e7b0a25fcf14","block_type":"box","text":"ble security otherwise unavailable in the market. The","page_number":95,"box":{"x":457,"y":103,"width":378,"height":12}},{"id":"80e4e235-00fd-459c-9e95-092e9287a49a","block_type":"box","text":"Manager may also combine a fixed-income instrument of","page_number":95,"box":{"x":117,"y":118,"width":405,"height":12}},{"id":"0da865ca-c68f-4127-b7c5-a74a82cd38d7","block_type":"box","text":"f an issuer with an equity feature with respect to the","page_number":95,"box":{"x":521,"y":118,"width":366,"height":12}},{"id":"61b30a7a-e260-4283-9849-2406c0d7ad33","block_type":"box","text":"stock of a different issuer when the Manager belie","page_number":95,"box":{"x":116,"y":134,"width":354,"height":12}},{"id":"540fa658-32e4-4365-bd37-7959f38ae091","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":95,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"8dd97f65-38de-49cd-b597-a500832667d2","block_type":"box","text":"promote a Fund’s objective than alternative investment","page_number":95,"box":{"x":117,"y":149,"width":389,"height":12}},{"id":"7887ff4a-87aa-4f3c-a19c-363588ca281f","block_type":"box","text":"s. For example, the Manager may combine an equity","page_number":95,"box":{"x":506,"y":149,"width":381,"height":12}},{"id":"f8c618b8-b46c-441e-b396-e99d1f6b4315","block_type":"box","text":"feature with respect to an issuer’s stock with a fixed-in","page_number":95,"box":{"x":116,"y":165,"width":383,"height":11}},{"id":"e0dc535f-e022-4b80-a78d-ec9277319be3","block_type":"box","text":"come security of a different issuer in the same","page_number":95,"box":{"x":500,"y":165,"width":332,"height":12}},{"id":"7fdf61cb-3f55-4719-800a-aadb231d250d","block_type":"box","text":"industry to diversify the Fund’s credit exposure, or","page_number":95,"box":{"x":117,"y":180,"width":353,"height":12}},{"id":"239f0c49-6644-4e4c-b177-3121b1bc55ea","block_type":"box","text":"r with a U.S. Treasury instrument to create a","page_number":95,"box":{"x":470,"y":180,"width":315,"height":12}},{"id":"81fdd142-d4f0-44db-9dbe-9c33114683d1","block_type":"box","text":"Manufactured Convertible with a higher credit profile t","page_number":95,"box":{"x":117,"y":196,"width":379,"height":12}},{"id":"57b802a2-9140-47eb-8203-04423588f5b5","block_type":"box","text":"han a traditional convertible security issued by that","page_number":95,"box":{"x":497,"y":196,"width":363,"height":12}},{"id":"21264069-734f-4b60-929d-2b4483b1c2d7","block_type":"box","text":"issuer. A Manufactured Convertible also is a more fl","page_number":95,"box":{"x":117,"y":211,"width":366,"height":10}},{"id":"caaa4316-af66-4a5a-bc88-23708ea0b598","block_type":"box","text":"exible investment in that its two components may be","page_number":95,"box":{"x":484,"y":211,"width":377,"height":12}},{"id":"ce049034-4ec2-490d-ae7b-6cc473cdb965","block_type":"box","text":"purchased separately and, upon purchasi","page_number":95,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"9c01f07e-65ac-4c8c-9a00-dc64993377ac","block_type":"box","text":"ng the separate securities, “combined” to create a Manufactured","page_number":95,"box":{"x":412,"y":227,"width":461,"height":12}},{"id":"b47679ec-5aeb-4727-ba1d-6cebe7bb7557","block_type":"box","text":"Convertible. For example, the Fund may purchase a w","page_number":95,"box":{"x":117,"y":242,"width":375,"height":12}},{"id":"30674d03-d52b-4f10-b51c-462c889da9c5","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":95,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"4318adf7-f54b-4ecc-ad78-9d49d4e9fc45","block_type":"box","text":"Convertible while postponing the purchase of a su","page_number":95,"box":{"x":117,"y":258,"width":354,"height":12}},{"id":"4174dc24-c047-4091-a9b0-3a0f302e36dd","block_type":"box","text":"itable bond to pair with the warrant pending development","page_number":95,"box":{"x":473,"y":258,"width":407,"height":12}},{"id":"143f5674-5fbb-4762-800c-93b07bbd2fd4","block_type":"box","text":"of more favorable market conditions.","page_number":95,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"3df29610-ea97-4dd9-87d9-65d73b23f18b","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a","page_number":95,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"6c1a093a-263f-4ba4-b5a5-b71a35a09692","block_type":"box","text":"traditional convertible security with similar characteristics. For example, in the event a Fund created a","page_number":95,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"0e60f3af-628f-415e-88d6-787b76980afa","block_type":"box","text":"Manufactured Convertible by combining a short-term U.S. Treasury instrument and a call option on a","page_number":95,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"4b6cf4db-a912-4289-b17a-ad4153455020","block_type":"box","text":"stock, the Manufactured Convertible would be expected to outperform a traditional convertible of","page_number":95,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"3589f747-8d01-420b-a9d7-aac4fb73d182","block_type":"box","text":"similar maturity that is convertible into that stock during periods when Treasury instruments outperform","page_number":95,"box":{"x":116,"y":366,"width":767,"height":12}},{"id":"d830de31-7188-4cac-8050-fa82891fd6fa","block_type":"box","text":"corporate fixed-income securities and underperform during periods when corporate fixed-income","page_number":95,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"adb11951-17d4-483b-8a40-3d1eff092610","block_type":"box","text":"securities outperform Treasury instruments.","page_number":95,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"4c80d530-8327-4734-acc0-be63cf746d9c","block_type":"box","text":"Corporate Loans.","page_number":95,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"b3c9c700-60a7-4041-aaba-c48f3d25b023","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally","page_number":95,"box":{"x":255,"y":428,"width":570,"height":12}},{"id":"aac8d7ae-c19c-4dca-981a-d44324980df6","block_type":"box","text":"non-investment grade floating rate instruments. Usually, they are freely callable at the issuer’s option.","page_number":95,"box":{"x":117,"y":444,"width":757,"height":12}},{"id":"124b50cf-4ba3-472e-bc76-d7eca692649c","block_type":"box","text":"Certain Funds may invest in fixed and floating rate loans (“Loans”) arranged through private","page_number":95,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"460c3a60-59f3-496a-acf6-8f82056324b2","block_type":"box","text":"negotiations between a corporate borrower or a foreign sovereign entity and one or more financial","page_number":95,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"818ba08e-c7d9-4e8d-b899-dda15d64828b","block_type":"box","text":"institutions or institutional investors (“Lenders”). A Fund may invest in such Loans in the form of","page_number":95,"box":{"x":117,"y":490,"width":712,"height":12}},{"id":"99542ed5-901c-4e16-9f6f-efc6c772ef1d","block_type":"box","text":"participations in Loans (“Participations”) and assignments of all or a portion of Loans from third parties","page_number":95,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"e2621356-b46e-4bc5-a3be-205a0be0c949","block_type":"box","text":"(“Assignments”). A Fund considers these investments to be investments in debt securities for purposes","page_number":95,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"c1ccf433-e6f2-4d7a-8d3c-c676d5cd4926","block_type":"box","text":"of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":95,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"92f0b65c-7f43-47d2-a496-e45ce37e4c7a","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of","page_number":95,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"29af1c13-368d-41a6-b7fc-7a0098f6dacc","block_type":"box","text":"principal, interest and any fees to which it is entitled only from the Lender selling the Participation and","page_number":95,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"c369a4d0-b19d-41c5-85e6-4db28be93874","block_type":"box","text":"only upon receipt by the Lender of the payments from the borrower. In connection with purchasing","page_number":95,"box":{"x":116,"y":583,"width":734,"height":12}},{"id":"e890390f-97bb-482d-8b08-155a6dd578e0","block_type":"box","text":"Participations, the Fund generally will have no right to enforce compliance by the borrower with the","page_number":95,"box":{"x":117,"y":599,"width":737,"height":12}},{"id":"6b78d76b-7662-4b35-8edd-a5fe34fbd635","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":95,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"ea44b95b-9782-4617-b6d6-1168be731afa","block_type":"box","text":"the Fund may not benefit directly from any collateral supporting the Loan in which it has purchased the","page_number":95,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"d8f3cc4c-5581-4a5f-b352-4ae41119fd4f","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":95,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"efdd63a4-909c-4c0e-92c2-85abe95c19aa","block_type":"box","text":"is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the","page_number":95,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"01d7ca6a-1b44-424c-a651-537420fd8024","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":95,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"d6e3a0f9-bce0-4116-88ee-f09538c0c9ac","block_type":"box","text":"the Lender and the borrower. The Fund will acquire Participations only if the Lender interpositioned","page_number":95,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"6411ab2d-12b4-4bd0-a689-46035f26ed4c","block_type":"box","text":"between the Fund and the borrower is determined by the Fund’s manager to be creditworthy. When","page_number":95,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"33db47f8-60dc-4427-bfa4-3faf9f7ac8b2","block_type":"box","text":"the Fund purchases Assignments from Lenders, the Fund will acquire direct rights against the borrower","page_number":95,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"2028725d-67dc-47ed-bbfd-6ce4d4496e6f","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":95,"box":{"x":116,"y":738,"width":718,"height":12}},{"id":"7d4f7f37-2c0d-429c-b630-da32b3fdd99d","block_type":"box","text":"Participations and Assignments on a forward commitment or “when-issued” basis, whereby a Fund","page_number":95,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"c5cddf48-1826-420b-a927-9273b4829193","block_type":"box","text":"would agree to purchase a Participation or Assignment at set terms in the future. For more information","page_number":95,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"c5f759cb-3b8c-4787-8c0f-84f96596e3d1","block_type":"box","text":"on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":95,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"8cb3410d-60eb-4637-a25d-71fadb43b1c5","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":95,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"87d7f9a3-6593-4289-ab2a-bd72687188b7","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market","page_number":95,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"d1ab8097-ab52-4983-97ad-374556e82cbf","block_type":"box","text":"for such instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases","page_number":95,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"e6fa6990-273c-4c02-8d0b-e5c926564dd9","block_type":"box","text":"such instruments could be sold only to a limited number of institutional investors. The lack of a","page_number":95,"box":{"x":116,"y":862,"width":704,"height":12}},{"id":"e89f4602-bc9c-40df-af29-d333c221692c","block_type":"box","text":"sufficiently liquid secondary market may have an adverse impact on the value of such instruments and","page_number":95,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"2a388cea-5fb0-4a53-bcc9-863ed6936979","block_type":"box","text":"II-9","page_number":95,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"1d9ee561-b3dd-4822-ab66-e5348866ce73","block_type":"box","text":"NM1026U-6042785-95/259","page_number":95,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e683d511-207f-45ed-aa73-cdba1bcee172","block_type":"box","text":"on the Fund’s ability to dispose of particular Assignments or Participations in response to a specific","page_number":96,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"50c98b06-36b7-47c0-8c94-b7b77b3bf2c7","block_type":"box","text":"economic event, such as deterioration in the creditworthiness of the borrower.","page_number":96,"box":{"x":116,"y":102,"width":583,"height":12}},{"id":"e483eeb3-f265-4f34-a1a7-34bc288f1ec5","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as","page_number":96,"box":{"x":117,"y":132,"width":768,"height":12}},{"id":"5e7d1462-2d10-4b6a-be27-80ed2669a275","block_type":"box","text":"a syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of","page_number":96,"box":{"x":116,"y":147,"width":720,"height":12}},{"id":"f828f447-5c4b-4896-8a4f-ffed6186193e","block_type":"box","text":"principal and interest. Failure by the syndicate agent to fulfill its obligations may delay or adversely","page_number":96,"box":{"x":117,"y":163,"width":734,"height":12}},{"id":"c85a2a28-9ab4-4377-b5af-3425704fae0a","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":96,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"76acd03b-8fac-48cc-a6f8-3626a3129e13","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":96,"box":{"x":116,"y":207,"width":706,"height":12}},{"id":"66bc8336-8c8f-4ba4-833c-14c83204c023","block_type":"box","text":"Although borrowers frequently provide collateral to secure repayment of these obligations they do not","page_number":96,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"6432e0ef-2f16-4f2c-9ba1-7b6c6000fc7f","block_type":"box","text":"always do so. If they do provide collateral, the value of the collateral may not completely cover the","page_number":96,"box":{"x":116,"y":238,"width":732,"height":12}},{"id":"953e93e1-7ba8-4e22-9cd4-4d115547b482","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":96,"box":{"x":117,"y":254,"width":757,"height":12}},{"id":"bbeab8c3-616b-42b3-ade7-bbaf8c45a370","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":96,"box":{"x":116,"y":269,"width":761,"height":12}},{"id":"6e3f91c1-9ce5-4592-830d-ed0086d40552","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":96,"box":{"x":116,"y":285,"width":762,"height":12}},{"id":"c28e7676-8f20-4984-9665-ab27e4a1b1e9","block_type":"box","text":"not recover its principal, may experience a long delay in recovering its investment and may not receive","page_number":96,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"1952d856-a7c3-40f1-aeab-e80ecaa6d746","block_type":"box","text":"interest during the delay.","page_number":96,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"958d7903-1691-4772-9383-bd7826052c96","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale","page_number":96,"box":{"x":116,"y":345,"width":763,"height":12}},{"id":"3847cbd8-3254-45b6-ac12-672e9de3e740","block_type":"box","text":"of corporate loans may not be readily available to make additional investments or to meet a Fund’s","page_number":96,"box":{"x":116,"y":360,"width":738,"height":12}},{"id":"03c411a3-fc34-4a1f-a61d-9173a4f43592","block_type":"box","text":"redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity","page_number":96,"box":{"x":117,"y":376,"width":765,"height":12}},{"id":"6b45153d-9729-47e2-a4c9-cead097acbea","block_type":"box","text":"needs, a Fund may hold additional cash, sell investments or temporarily borrow from banks and other","page_number":96,"box":{"x":117,"y":391,"width":758,"height":12}},{"id":"a90aa0ce-cde9-4eb2-9a95-c8f50c375b07","block_type":"box","text":"lenders.","page_number":96,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"d0b20278-4c6b-407f-9880-9e879211acef","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities","page_number":96,"box":{"x":117,"y":436,"width":746,"height":12}},{"id":"8aeacaad-217b-4e74-8913-4e871cf6b352","block_type":"box","text":"laws. Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and","page_number":96,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"0ce4edc1-bf8f-4732-93f9-939173d63cc9","block_type":"box","text":"purchasers of interests in Loans, such as the Funds, may not have the protection of the anti-fraud","page_number":96,"box":{"x":117,"y":467,"width":729,"height":12}},{"id":"dae5b974-f1ca-4501-a817-4b6494550c88","block_type":"box","text":"provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead,","page_number":96,"box":{"x":117,"y":482,"width":755,"height":12}},{"id":"ab97b34b-9192-4bb3-a5c5-0e2401299e68","block_type":"box","text":"in such cases, parties generally would rely on the contractual provisions in the Loan agreement itself","page_number":96,"box":{"x":117,"y":498,"width":750,"height":12}},{"id":"f4030fc8-a27a-4e80-a286-21646e0552d7","block_type":"box","text":"and common-law fraud protections under applicable state law.","page_number":96,"box":{"x":116,"y":513,"width":467,"height":12}},{"id":"7ab8e844-465e-441f-99ed-1a7087280b65","block_type":"box","text":"Direct Lending.","page_number":96,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"5d37890d-dd34-495b-9d8f-df6046b0e98b","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct","page_number":96,"box":{"x":226,"y":542,"width":641,"height":13}},{"id":"7401d036-33fb-41c7-8bab-2ece820b19a7","block_type":"box","text":"loans between the Fund and a borrower may not be adm","page_number":96,"box":{"x":117,"y":558,"width":412,"height":12}},{"id":"bd238a5d-2bfd-42bc-bb05-ae8dbbe4fc61","block_type":"box","text":"inistered by an underwriter or agent bank. The","page_number":96,"box":{"x":531,"y":558,"width":340,"height":12}},{"id":"4782a8d9-9d4e-4249-8076-bfe133ccf62b","block_type":"box","text":"Fund may provide financing to commercial borrowers di","page_number":96,"box":{"x":117,"y":573,"width":402,"height":13}},{"id":"7f7b6c9e-ae3e-435a-a8d0-dcc4065f750f","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":96,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"cc26b333-9d4f-4c2c-a837-2e6187a278a6","block_type":"box","text":"and owned by or otherwise affiliat","page_number":96,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"37f2ea6f-73b7-4718-837e-4d1cde4ea8e1","block_type":"box","text":"ed with the Fund. The terms of the","page_number":96,"box":{"x":360,"y":589,"width":255,"height":9}},{"id":"163ca428-8dc4-4eeb-8f52-133fbf6b72a5","block_type":"box","text":"direct loans are negotiated with","page_number":96,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"e0ce15d9-39fe-4768-832f-725eebe84ffb","block_type":"box","text":"borrowers in private transactions. Furthermore, a direct loan may be secured or unsecured.","page_number":96,"box":{"x":117,"y":605,"width":667,"height":12}},{"id":"4555f888-fe60-41a1-8f28-d417cc27945a","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of","page_number":96,"box":{"x":117,"y":634,"width":755,"height":12}},{"id":"9452361f-2611-444a-8795-358b37ffc8ef","block_type":"box","text":"the borrower and/or any collateral for payment of interest and repayment of principal. The risks","page_number":96,"box":{"x":116,"y":649,"width":708,"height":12}},{"id":"357492a5-297d-4bee-b499-1a14c57dd222","block_type":"box","text":"associated with direct loans are substantially similar to those associated with investing in corporate","page_number":96,"box":{"x":116,"y":665,"width":733,"height":12}},{"id":"1429b090-74f9-4c5e-84c9-44dc5e8829f8","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":96,"box":{"x":117,"y":680,"width":764,"height":12}},{"id":"c10aa747-7d59-46b4-aa23-b19451974130","block_type":"box","text":"insolvent and, consequently, that the Fund will lose money on the loan. Furthermore, direct loans may","page_number":96,"box":{"x":117,"y":696,"width":755,"height":12}},{"id":"1d6a38a5-4289-4871-8a16-9e455a82e585","block_type":"box","text":"subject the Fund to liquidity and interest rate risk and certain direct loans may be deemed illiquid.","page_number":96,"box":{"x":116,"y":711,"width":720,"height":12}},{"id":"15b93467-cd41-4d1b-a07d-b17f6e69d9c4","block_type":"box","text":"Direct loans are not publicly traded and may not have a secondary market. The lack of a secondary","page_number":96,"box":{"x":117,"y":727,"width":737,"height":12}},{"id":"cbd8c4f3-5820-4457-a766-7c4ce04b41d1","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":96,"box":{"x":117,"y":742,"width":734,"height":12}},{"id":"998062d0-5f66-438d-897c-37ff0e63c3b5","block_type":"box","text":"loan and/or to value the direct loan.","page_number":96,"box":{"x":117,"y":758,"width":260,"height":9}},{"id":"6402434c-3a1e-4c9a-9a50-2743ddfb41f3","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the","page_number":96,"box":{"x":116,"y":787,"width":731,"height":12}},{"id":"f7419fa3-8789-496a-8a02-c61d863be4a8","block_type":"box","text":"Fund to originate loans on advantageous terms. In originating loans, the Fund will compete with a","page_number":96,"box":{"x":117,"y":802,"width":722,"height":12}},{"id":"a2c1b977-c1d9-4d71-87ff-89fb3b05cf28","block_type":"box","text":"broad spectrum of lenders. Increased competition for, or a diminishment in the available supply of,","page_number":96,"box":{"x":117,"y":818,"width":727,"height":12}},{"id":"21353889-3687-4e4a-832a-18a0f48ae40d","block_type":"box","text":"qualifying loans could result in lower yields on such loans, which could reduce Fund performance.","page_number":96,"box":{"x":116,"y":833,"width":730,"height":12}},{"id":"f3e849a5-a48b-465c-aea3-2d12aace296e","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing","page_number":96,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"b5d57b55-3360-4e2a-a54d-ecbbfb7359ba","block_type":"box","text":"significant financial or business difficulties, including companies involved in bankruptcy or other","page_number":96,"box":{"x":116,"y":878,"width":710,"height":12}},{"id":"b008c652-179e-4a57-a51b-70f819a584a6","block_type":"box","text":"II-10","page_number":96,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e91584f0-1b8c-440c-ab3f-3ca0ab284302","block_type":"box","text":"NM1026U-6042785-96/259","page_number":96,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8edd2f11-b0a0-46d7-8874-36e154935faa","block_type":"box","text":"reorganization and liquidation proceedings. Although the terms of such financing may result in","page_number":97,"box":{"x":117,"y":87,"width":701,"height":12}},{"id":"69f9d649-ac67-4f99-af2d-f201d4e1e878","block_type":"box","text":"significant financial returns to the Fund, they involve a substantial degree of risk. The level of analytical","page_number":97,"box":{"x":116,"y":102,"width":768,"height":13}},{"id":"4e6fe139-9c5f-4ed1-bf9d-8450f436d80c","block_type":"box","text":"sophistication, both financial and legal, necessary for successful financing to companies experiencing","page_number":97,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"7f13b22a-35d8-461e-a0d7-a162f08f03e8","block_type":"box","text":"significant business and financial difficulties is unusually high.","page_number":97,"box":{"x":116,"y":134,"width":461,"height":12}},{"id":"2174b1cd-6eb5-41c7-a308-98507bb018c0","block_type":"box","text":"Credit Linked Securities.","page_number":97,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"e822d4a0-0b3e-4371-b2e8-d59a345b36ae","block_type":"box","text":"Among the income producing securities in which a Fund may invest are","page_number":97,"box":{"x":313,"y":162,"width":541,"height":12}},{"id":"068da3a2-8bc9-4d5c-87c5-e4157b3373e9","block_type":"box","text":"credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests","page_number":97,"box":{"x":116,"y":178,"width":768,"height":12}},{"id":"ff876cde-5902-4e8c-93ea-e2f9322e57d1","block_type":"box","text":"in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate","page_number":97,"box":{"x":117,"y":193,"width":771,"height":12}},{"id":"dfb074f0-5e01-4b70-b9b4-fe6f725b8ff3","block_type":"box","text":"swaps and other securities, in order to provide exposure to certain fixed-income markets. For instance,","page_number":97,"box":{"x":116,"y":209,"width":768,"height":12}},{"id":"90264174-e44d-44b0-8a24-0f8a9bd94e3e","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":97,"box":{"x":116,"y":224,"width":765,"height":12}},{"id":"a34e42d8-0fc1-4505-aac2-c5967fabacb3","block_type":"box","text":"certain market and/or to remain fully invested when more traditional income producing securities are","page_number":97,"box":{"x":116,"y":240,"width":748,"height":12}},{"id":"cb16715b-97fa-42da-95d8-e0d75c00e281","block_type":"box","text":"not available.","page_number":97,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"9086d641-6102-45eb-8bec-7f6eabc6b3ea","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive","page_number":97,"box":{"x":117,"y":284,"width":770,"height":12}},{"id":"7558538f-37e4-44b5-9708-a140e674d7d7","block_type":"box","text":"periodic income payments (in the form of distributions) and payment of principal at the end of the term","page_number":97,"box":{"x":117,"y":300,"width":761,"height":12}},{"id":"e65b3972-295e-4cd4-93fb-c8b247ad3d88","block_type":"box","text":"of the security.","page_number":97,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"792d252f-b76e-4118-8c73-82334aeae284","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s","page_number":97,"box":{"x":117,"y":344,"width":748,"height":12}},{"id":"60f3d8a9-c2ca-489a-a5fc-9322f09d55e8","block_type":"box","text":"potential obligations to, the counterparties to the derivative instruments and other securities in which","page_number":97,"box":{"x":117,"y":359,"width":747,"height":12}},{"id":"8979e552-c627-4ae9-a3ef-6273c1df45ae","block_type":"box","text":"the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the","page_number":97,"box":{"x":116,"y":375,"width":762,"height":12}},{"id":"c7e1a435-4821-4b0e-9ef2-2792b57b91d0","block_type":"box","text":"issuer would receive a stream of payments over the term of the swap agreements provided that no","page_number":97,"box":{"x":117,"y":390,"width":736,"height":12}},{"id":"1d14bb73-14be-4f48-8ef1-5f4df288bad3","block_type":"box","text":"event of default has occurred with respect to the referenced debt obligation upon which the swap is","page_number":97,"box":{"x":116,"y":406,"width":741,"height":12}},{"id":"3f364d4c-2e85-49e7-8c0b-b1f2f4f796c0","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":97,"box":{"x":117,"y":421,"width":756,"height":12}},{"id":"d4a9c2a9-d6d3-45bc-bc65-accdd9b0e37f","block_type":"box","text":"the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn,","page_number":97,"box":{"x":116,"y":437,"width":749,"height":12}},{"id":"c7720f53-9e87-454f-8f9a-d7bdb8c8ccd3","block_type":"box","text":"would reduce the amount of income and principal that","page_number":97,"box":{"x":116,"y":452,"width":404,"height":12}},{"id":"a7a97eaf-fc4d-41b3-b436-b1011fdc516c","block_type":"box","text":"a Fund would receive. A Fund’s investments in","page_number":97,"box":{"x":521,"y":452,"width":351,"height":10}},{"id":"58d34c41-8fb9-4a67-aeab-635c6ecac854","block_type":"box","text":"these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":97,"box":{"x":116,"y":468,"width":750,"height":12}},{"id":"cb47447d-90b4-4ea3-9d27-26df08726c95","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk","page_number":97,"box":{"x":116,"y":483,"width":766,"height":12}},{"id":"d99922ab-ab60-423c-8e90-ccdd03586624","block_type":"box","text":"and management risk. It is also expected that the securities will be exempt from registration under the","page_number":97,"box":{"x":116,"y":499,"width":761,"height":12}},{"id":"f2c26527-fa15-4134-9a1d-c39a0499dc8e","block_type":"box","text":"Securities Act. Accordingly, there may be no established trading market for the securities and they may","page_number":97,"box":{"x":116,"y":514,"width":771,"height":12}},{"id":"b157bf81-a021-4e1c-b3f8-7837d666874a","block_type":"box","text":"constitute illiquid investments.","page_number":97,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"5b5bbe0a-a7d1-4052-9e26-1831a5ca2b91","block_type":"box","text":"Debt Securities.","page_number":97,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"2f0c7af6-592e-4e60-9064-f2b90a3c4ef0","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will","page_number":97,"box":{"x":243,"y":559,"width":633,"height":11}},{"id":"b2eb5884-7e34-40a9-a614-5e7033d6687f","block_type":"box","text":"not make timely payments of principal and interest. The degree of credit risk depends on the issuer’s","page_number":97,"box":{"x":117,"y":574,"width":751,"height":12}},{"id":"66b0f85f-eb02-4ade-8e32-dff21796e69f","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":97,"box":{"x":116,"y":590,"width":749,"height":12}},{"id":"7adbb242-685e-4165-b148-bfbe3eab9f70","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":97,"box":{"x":117,"y":605,"width":763,"height":12}},{"id":"c26a3a6d-fd00-4b62-8a84-6180bca0739f","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":97,"box":{"x":116,"y":621,"width":754,"height":9}},{"id":"a1d10850-d7ed-4f4e-898f-a0ef51015d69","block_type":"box","text":"Securities.","page_number":97,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"290da292-c411-4556-9706-30f5130f0da2","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":97,"box":{"x":116,"y":665,"width":709,"height":12}},{"id":"9b8880c2-f43f-4adc-aae6-a8b0715d7ef7","block_type":"box","text":"security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by","page_number":97,"box":{"x":116,"y":680,"width":755,"height":12}},{"id":"654c49d7-c3b5-43bb-a3ab-fbb8cabadc3d","block_type":"box","text":"Fund management, a Fund’s investments in debt securities could be adversely affected and the Fund","page_number":97,"box":{"x":117,"y":696,"width":752,"height":12}},{"id":"0691d066-e323-4c1e-a284-945e206d2c9c","block_type":"box","text":"could lose money. In general, the market price of debt securities with longer maturities will go up or","page_number":97,"box":{"x":116,"y":711,"width":735,"height":12}},{"id":"0646da96-34a0-4aa3-ae97-7ac8af9abe75","block_type":"box","text":"down more in response to changes in interest rates than will the market price of shorter-term debt","page_number":97,"box":{"x":116,"y":727,"width":725,"height":12}},{"id":"49ca2f3b-0c6e-4599-b7c8-c1daf5d6e637","block_type":"box","text":"securities.","page_number":97,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"41ae6eb4-4bb1-4447-90e6-adead5d7027e","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended","page_number":97,"box":{"x":117,"y":771,"width":738,"height":12}},{"id":"ebdd98d8-48b5-4012-b10a-db5c4e044038","block_type":"box","text":"because of slower than expected principal payments. This may lock in a below-market interest rate and","page_number":97,"box":{"x":117,"y":787,"width":765,"height":12}},{"id":"de6e37d8-cdfd-44df-aa55-e11e39ca8b1f","block_type":"box","text":"extend the duration of these fixed-income securities, especially mortgage-related securities, making","page_number":97,"box":{"x":116,"y":802,"width":739,"height":12}},{"id":"0c88ffc4-d637-400a-9c83-10862f8de3ec","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":97,"box":{"x":116,"y":818,"width":750,"height":12}},{"id":"e9cf80aa-bbff-4ad9-be2c-212e2ad8af1f","block_type":"box","text":"securities may exhibit additional volatility and lose value. This is known as extension risk.","page_number":97,"box":{"x":116,"y":833,"width":665,"height":12}},{"id":"5538dff1-a05a-4bee-b32d-d32956cd1bf6","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in","page_number":97,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"9f0fb29f-cdd9-4b2a-8eee-693aba966e9d","block_type":"box","text":"prevailing interest rates. Fixed-income securities with longer maturities, which tend to produce higher","page_number":97,"box":{"x":117,"y":878,"width":753,"height":11}},{"id":"1a76dcea-939e-4be4-94c1-b0f5a694bf55","block_type":"box","text":"II-11","page_number":97,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"01619d7e-d24d-473d-8ee1-0436654a2e92","block_type":"box","text":"NM1026U-6042785-97/259","page_number":97,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"cae194e5-5387-481e-8086-3359fdecfedb","block_type":"box","text":"yields, are subject to potentially greater capital appreciation and depreciation than securities with","page_number":98,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"54d40aff-87b7-48d4-9941-a58ac632ac5d","block_type":"box","text":"shorter maturities. The Funds are not restricted to any maximum or minimum time to maturity in","page_number":98,"box":{"x":116,"y":103,"width":714,"height":12}},{"id":"0e7163f8-b1a3-470c-8e39-2173b4a6a1bb","block_type":"box","text":"purchasing individual portfolio securities, and the average maturity of a Fund’s assets will vary.","page_number":98,"box":{"x":117,"y":118,"width":707,"height":12}},{"id":"24c10c8f-2cbb-402b-a74b-6055a179d2c2","block_type":"box","text":"Floating and Variable Rate Securities","page_number":98,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"e67bd230-32e0-4311-bfc8-c74c25b904ac","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable","page_number":98,"box":{"x":395,"y":149,"width":493,"height":12}},{"id":"d38fbafd-1f1f-4105-bea0-f34fcf3c0811","block_type":"box","text":"coupon rate. Securities with floating or variable interest rates can be less sensitive to interest rate","page_number":98,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"cac55b68-2695-4bc6-aa60-de4338d50989","block_type":"box","text":"changes than securities with fixed interest rates, but may decline in value if their interest rates do not","page_number":98,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"6026c56a-817e-4dba-b2c4-623fd7fc6e6c","block_type":"box","text":"rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not","page_number":98,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"62aeaef3-2630-4a36-95aa-4337c79fb5fb","block_type":"box","text":"generally increase in value if interest rates decline. The","page_number":98,"box":{"x":116,"y":211,"width":415,"height":12}},{"id":"5b8eff22-556e-4487-bbc8-65682141b2b7","block_type":"box","text":"impact of interest rate changes on floating rate","page_number":98,"box":{"x":532,"y":211,"width":350,"height":12}},{"id":"8ac042f9-3fa2-477f-bdd7-169a8a1adcac","block_type":"box","text":"investments is typically mitigated by the periodic interest rate reset of the investments. Benchmark","page_number":98,"box":{"x":117,"y":227,"width":733,"height":12}},{"id":"c3e97c52-06b4-4057-aab5-63bfaff02a55","block_type":"box","text":"interest rates used for floating and variable rate securities may not accurately track market interest","page_number":98,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"6095eb78-b6a4-4e17-9990-fd57d952a6da","block_type":"box","text":"rates.","page_number":98,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"622efa4e-804d-43d4-8b2d-d8dc0391c6e6","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":98,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"46ef2981-739e-4b63-bd3c-9a927c4e9739","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income","page_number":98,"box":{"x":297,"y":289,"width":577,"height":12}},{"id":"e5b293c9-5c3f-40b8-8acf-afb53a4ae6eb","block_type":"box","text":"securities or other instruments whose principal value is periodically adjusted according to the rate of","page_number":98,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"27f9f860-4ef1-481c-948d-70aea0dc5d46","block_type":"box","text":"inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that","page_number":98,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"043063e8-b921-4c5b-9cbd-bb4d55eecb87","block_type":"box","text":"accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price","page_number":98,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"caf8c4af-6523-4778-ad13-92d15ddebf59","block_type":"box","text":"Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":98,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"be0ff71b-60f9-4466-a01a-2741d7b379d5","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years,","page_number":98,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"e02714c3-1f27-4a87-b752-ba5ad6b13c33","block_type":"box","text":"although it is possible that securities with other maturities will be issued in the future. The U.S.","page_number":98,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"f1b4432a-b0fa-4d7e-afc6-86701a05e134","block_type":"box","text":"Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation","page_number":98,"box":{"x":116,"y":413,"width":738,"height":12}},{"id":"52df087d-1eb9-4907-aa69-18002cb970bb","block_type":"box","text":"adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par","page_number":98,"box":{"x":116,"y":428,"width":727,"height":12}},{"id":"b3228f2e-749c-4ca4-978f-52e8a3f7a0e9","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":98,"box":{"x":116,"y":443,"width":753,"height":13}},{"id":"e5b6c24d-b2b3-4bdf-a4a6-1da21fa8137b","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":98,"box":{"x":116,"y":458,"width":736,"height":13}},{"id":"a3787c78-4b86-463e-aedd-d310bc596b5b","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":98,"box":{"x":116,"y":474,"width":766,"height":13}},{"id":"61e950d3-0fa2-4b43-87d2-8342abbe8cb6","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":98,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"9aa82d63-1180-4842-8de3-70354291700d","block_type":"box","text":"$1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":98,"box":{"x":116,"y":505,"width":689,"height":13}},{"id":"00ded26a-b61c-4230-a77c-dfa22ad05be8","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds","page_number":98,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"9ab35ecd-bedd-4ea0-a147-a623274f6471","block_type":"box","text":"will be adjusted downward, and, consequently, the interest payable on these securities (calculated with","page_number":98,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"376af693-06d7-490d-910c-8c907b44ec60","block_type":"box","text":"respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon","page_number":98,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"93794ef3-0533-4a80-87a5-6f8747b2f43b","block_type":"box","text":"maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds,","page_number":98,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"e9b277b6-17f9-4c0a-97f4-400357a1226c","block_type":"box","text":"even during a period of deflation. However, the current market value of the bonds is not guaranteed,","page_number":98,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"0c81c331-d30b-41d7-ab71-f696982b0c30","block_type":"box","text":"and will fluctuate. Certain Funds may also invest in other inflation related bonds which may or may not","page_number":98,"box":{"x":116,"y":614,"width":763,"height":12}},{"id":"e2787367-09a1-4a64-91ff-51cf779c94f1","block_type":"box","text":"provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of","page_number":98,"box":{"x":117,"y":630,"width":752,"height":12}},{"id":"5dce6319-ea7d-49e0-a1ff-8fb5ebd020da","block_type":"box","text":"the bond repaid at maturity may be less than the original principal. In addition, if the Fund purchases","page_number":98,"box":{"x":116,"y":645,"width":749,"height":12}},{"id":"8f724bf8-3efa-433a-9f90-dcc358f8a118","block_type":"box","text":"inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign inflation","page_number":98,"box":{"x":117,"y":661,"width":761,"height":12}},{"id":"8dd51303-92d4-4e3c-9bed-698b017f1d2d","block_type":"box","text":"index may not be correlated to the rate of inflation in the United States.","page_number":98,"box":{"x":117,"y":676,"width":523,"height":12}},{"id":"c7a82d00-40ae-4719-a32d-2aa37cb1aca1","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest","page_number":98,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"5449ce15-2d0c-4564-a6aa-6a08ead1b50c","block_type":"box","text":"rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the","page_number":98,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"a870b9e8-1c65-485d-9fd1-8ba3cc8e0096","block_type":"box","text":"rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real","page_number":98,"box":{"x":117,"y":738,"width":717,"height":11}},{"id":"aee12da5-cd8b-44f0-bd52-4d1affcc2f7b","block_type":"box","text":"interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if","page_number":98,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"5700b7c7-a258-460e-bf34-7a2ef5c106b3","block_type":"box","text":"nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a","page_number":98,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"6fa736e2-f271-4db9-bc52-54a0377aa46d","block_type":"box","text":"decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of","page_number":98,"box":{"x":116,"y":785,"width":745,"height":11}},{"id":"32b1c6d2-b912-45e7-8ba8-fc29142c3af1","block_type":"box","text":"inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":98,"box":{"x":117,"y":800,"width":570,"height":12}},{"id":"b91ab5d9-80d9-4735-bf1a-a36fd9a5f2fe","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term","page_number":98,"box":{"x":116,"y":831,"width":725,"height":12}},{"id":"56ec87fb-5aae-4d0a-ac54-5ebbefc110f5","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":98,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"45cc2720-ca7d-4f92-909e-12cceae9b356","block_type":"box","text":"inflation (for example, due to changes in currency exchange rates), investors in these securities may","page_number":98,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"f2583b4b-a708-488b-80c4-d99caecbf695","block_type":"box","text":"not be protected to the extent that the increase is not reflected in the bond’s inflation measure.","page_number":98,"box":{"x":117,"y":878,"width":704,"height":12}},{"id":"3242616f-0f27-424d-8422-4522087d9eed","block_type":"box","text":"II-12","page_number":98,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"4a20e7ca-6cf6-4078-b824-de443ebab689","block_type":"box","text":"NM1026U-6042785-98/259","page_number":98,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f4e64e40-23f1-426b-97c0-ba8da2ced3f4","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is","page_number":99,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"947cd26b-fd29-45f6-b356-ca6fb257a108","block_type":"box","text":"the Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S.","page_number":99,"box":{"x":116,"y":102,"width":739,"height":13}},{"id":"a54bc968-256f-42a1-aa3c-994889855757","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":99,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"8f130bbf-6b2c-4e73-8684-b0b4e395f417","block_type":"box","text":"components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a","page_number":99,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"409d5d3a-6c64-4ac5-9db6-c9841a7c874c","block_type":"box","text":"foreign government are generally adjusted to reflect a comparable inflation index, calculated by that","page_number":99,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"1f092981-4900-4288-8b8f-04fde9140bec","block_type":"box","text":"government. There can be no assurance that the CPI-U or any foreign inflation index will accurately","page_number":99,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"e0ef3792-4c65-4cb0-8886-8ee178449ee0","block_type":"box","text":"measure the real rate of inflation in the prices of goods and services. Moreover, there can be no","page_number":99,"box":{"x":117,"y":180,"width":716,"height":12}},{"id":"ee2bb39a-4f8f-4037-9f22-cec6e321a0e2","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":99,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"9dce888a-fee4-494e-8965-2649a58b2ceb","block_type":"box","text":"United States.","page_number":99,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"5702fb0e-62e7-4500-a1bd-332a7ffd9216","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary","page_number":99,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"a9460934-a973-476f-81f4-7cf09bea1b34","block_type":"box","text":"income, even though investors do not receive their principal until maturity.","page_number":99,"box":{"x":117,"y":258,"width":552,"height":12}},{"id":"993441e7-dc69-4dad-b01e-4a3f0dd5344c","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":99,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"77a7ab22-d382-4ad2-a2d0-a5edf94b1bd0","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which","page_number":99,"box":{"x":383,"y":289,"width":492,"height":12}},{"id":"f42958bc-cd91-4d0c-ac28-c678d6080370","block_type":"box","text":"are securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent","page_number":99,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"43ec83c6-f786-4791-9037-aa4112b423d5","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":99,"box":{"x":116,"y":320,"width":734,"height":12}},{"id":"d7a0b436-d8e9-46e0-8e52-4cbf3d7a943f","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":99,"box":{"x":116,"y":335,"width":708,"height":12}},{"id":"ce904ec9-dae7-4d71-93ec-ff4bd86e3f23","block_type":"box","text":"i.e.","page_number":99,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"4b40bf67-cea2-4ba4-8819-191f18abd85d","block_type":"box","text":",","page_number":99,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"94f0ea6c-dff9-461c-a325-7150d9979347","block_type":"box","text":"“Baa” by Moody’s or “BBB” by S&P) are considered to have some speculative characteristics and are","page_number":99,"box":{"x":116,"y":351,"width":756,"height":12}},{"id":"7119a372-00d1-4ffa-9e2a-598c11ab136c","block_type":"box","text":"more sensitive to economic change than higher rated securities. If an investment grade security of a","page_number":99,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"6757786b-8c6e-4ac1-9e24-7f25883f90ca","block_type":"box","text":"Fund is subsequently downgraded below investment grade, the Fund’s Manager will consider such an","page_number":99,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"71a3de31-de93-470a-b7d2-ab6bbb504d36","block_type":"box","text":"event in determining whether the Fund should continue to hold the security. Subject to its investment","page_number":99,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"564c3a25-7e55-48ec-ac48-69c8687b6ec9","block_type":"box","text":"strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":99,"box":{"x":116,"y":413,"width":679,"height":12}},{"id":"9d46d6d5-0aa0-4467-ba1a-f6f11e96baa7","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":99,"box":{"x":116,"y":444,"width":566,"height":12}},{"id":"4db44268-9669-4a90-b64b-13a5534cbec4","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":99,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"9b5d603a-a25e-42c8-b936-cd2d5147ed9f","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to","page_number":99,"box":{"x":117,"y":498,"width":711,"height":12}},{"id":"46ab96ea-507e-4b95-9c69-05e6a2807e9a","block_type":"box","text":"investors as “junk bonds” are debt securities that are rated below investment grade by the major rating","page_number":99,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"576a9097-aeed-4636-8b20-ea8c6ffc41c2","block_type":"box","text":"agencies or are securities that Fund management believes are of comparable quality. While generally","page_number":99,"box":{"x":116,"y":529,"width":759,"height":12}},{"id":"6fb0abe9-4e6c-4db5-9888-fe0ab395fa8f","block_type":"box","text":"providing greater income and opportunity for gain, non-investment grade debt securities may be","page_number":99,"box":{"x":117,"y":544,"width":715,"height":12}},{"id":"eb2db904-075f-4ee4-abd5-74f603e472b3","block_type":"box","text":"subject to greater risks than securities which have higher credit ratings, including a high risk of default,","page_number":99,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"c45b4356-4ed2-43be-8223-02413f08571b","block_type":"box","text":"and their yields will fluctuate over time. High yield securities will generally be in the lower rating","page_number":99,"box":{"x":116,"y":575,"width":709,"height":12}},{"id":"003f1dcf-8f50-4d85-9deb-bf3b9164a207","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":99,"box":{"x":116,"y":591,"width":755,"height":12}},{"id":"52ed42c8-ca52-4c60-8769-db905b47cf61","block_type":"box","text":"will be non-rated. The credit rating of a high yield security does not necessarily address its market","page_number":99,"box":{"x":116,"y":606,"width":730,"height":12}},{"id":"a44479fb-cb1c-4522-b2cc-df6c8c19455a","block_type":"box","text":"value risk, and ratings may from time to time change, positively or negatively, to reflect developments","page_number":99,"box":{"x":116,"y":622,"width":757,"height":12}},{"id":"0b383856-1d91-4430-b0ac-47bb411aa3c7","block_type":"box","text":"regarding the issuer’s financial condition. High yield securities are considered to be speculative with","page_number":99,"box":{"x":117,"y":637,"width":743,"height":12}},{"id":"057f88ad-05bb-4ea4-9528-d956b808adf5","block_type":"box","text":"respect to the capacity of the issuer to timely repay principal and pay interest or dividends in","page_number":99,"box":{"x":117,"y":653,"width":687,"height":12}},{"id":"0da14283-4bfd-42d4-bec5-2c33478a5317","block_type":"box","text":"accordance with the terms of the obligation and may have more credit risk than higher rated securities.","page_number":99,"box":{"x":116,"y":668,"width":761,"height":12}},{"id":"604116b9-aa8e-46f1-b10a-ae368f6e5377","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":99,"box":{"x":116,"y":699,"width":464,"height":13}},{"id":"fc7f7082-2397-43fc-8ac2-d622420a9c20","block_type":"box","text":"• Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to","page_number":99,"box":{"x":117,"y":731,"width":731,"height":12}},{"id":"95e76317-45f6-4a03-83f1-90638275c6b9","block_type":"box","text":"adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk","page_number":99,"box":{"x":150,"y":746,"width":686,"height":12}},{"id":"32ae6416-332f-4efa-ab57-e3b32b58b39a","block_type":"box","text":"bonds may be unable to meet their interest or principal payment obligations because of an","page_number":99,"box":{"x":150,"y":761,"width":669,"height":13}},{"id":"10c449c8-44ec-4b88-a2ad-33c6d9b1c0d8","block_type":"box","text":"economic downturn, specific issuer developments or the unavailability of additional financing.","page_number":99,"box":{"x":150,"y":777,"width":689,"height":12}},{"id":"02bf5f97-07c0-4dc2-98c7-6ba941627915","block_type":"box","text":"• The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets","page_number":99,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"9d877a0e-8e7c-4a5a-ae2b-f028639eb5a5","block_type":"box","text":"than issuers of investment grade bonds. If the issuer experiences financial stress, it may be","page_number":99,"box":{"x":150,"y":816,"width":678,"height":12}},{"id":"777c0365-67fd-4f25-a1ec-37c202717b94","block_type":"box","text":"unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be","page_number":99,"box":{"x":150,"y":831,"width":697,"height":12}},{"id":"0379ddf5-8764-4dab-a742-d36f12535421","block_type":"box","text":"lessened by specific issuer developments, or the unavailability of additional financing. Issuers of","page_number":99,"box":{"x":150,"y":847,"width":717,"height":12}},{"id":"e4f2c901-6d35-45be-b79e-f82759653454","block_type":"box","text":"high yield securities are often in the growth stage of their development and/or involved in a","page_number":99,"box":{"x":150,"y":862,"width":677,"height":12}},{"id":"2cbf29fe-9e58-4a82-9941-0b19900d781e","block_type":"box","text":"reorganization or takeover.","page_number":99,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"7677bd3a-6261-461d-8fe8-aa3ad0b44f71","block_type":"box","text":"II-13","page_number":99,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2ff9f525-8108-4f6f-b86f-4221ec8956cf","block_type":"box","text":"NM1026U-6042785-99/259","page_number":99,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7671ff98-b912-41b7-916f-86bf18720625","block_type":"box","text":"• Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its","page_number":100,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"1c5b5c40-019f-4e7d-bf1f-338befd9995c","block_type":"box","text":"obligations, the senior obligations are generally paid off before the junior obligations, which will","page_number":100,"box":{"x":150,"y":102,"width":706,"height":13}},{"id":"c84d71ec-5729-429f-926a-7a5bbe9a8125","block_type":"box","text":"potentially limit a Fund’s ability to fully recover principal or to receive interest payments when","page_number":100,"box":{"x":150,"y":118,"width":693,"height":12}},{"id":"894851fb-0c83-4613-9e17-64fc1e171ecc","block_type":"box","text":"senior securities are in default. Thus, investors in high yield securities have a lower degree of","page_number":100,"box":{"x":150,"y":134,"width":696,"height":12}},{"id":"5b4d90f5-59c7-4fc9-b935-af1fe07f9dca","block_type":"box","text":"protection with respect to principal and interest payments than do investors in higher rated","page_number":100,"box":{"x":150,"y":149,"width":674,"height":12}},{"id":"ff0863f1-1f00-4247-b2e0-62ba6ef146eb","block_type":"box","text":"securities.","page_number":100,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"105ec88a-d5d2-4c5f-9b36-3d9f11b0d9cd","block_type":"box","text":"• Junk bonds frequently have redemption features that permit an issuer to repurchase the security","page_number":100,"box":{"x":117,"y":188,"width":753,"height":12}},{"id":"9ae02b22-1b64-46a1-b775-7f7cfafd84f0","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":100,"box":{"x":149,"y":203,"width":738,"height":12}},{"id":"81a8433d-cd60-406d-a409-1970b2a300b6","block_type":"box","text":"proceeds in bonds with lower yields and may lose income.","page_number":100,"box":{"x":150,"y":219,"width":437,"height":12}},{"id":"cce3e686-48f1-4679-84fe-12d421d2515d","block_type":"box","text":"• Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments","page_number":100,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"441b493f-18f1-494e-b0bb-812339eeb90e","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":100,"box":{"x":150,"y":258,"width":713,"height":12}},{"id":"8757b1fa-82cc-4721-94ad-b9cd117b0f82","block_type":"box","text":"income securities.","page_number":100,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"a0aa2042-f71b-4408-b795-1452544db7e4","block_type":"box","text":"• Junk bonds may be less liquid than higher rated fixed-income securities even under normal","page_number":100,"box":{"x":117,"y":296,"width":714,"height":12}},{"id":"ba5ac9e8-98c1-4551-b72a-fe341f0dd722","block_type":"box","text":"economic conditions. Under certain economic and/or market conditions, a Fund may have difficulty","page_number":100,"box":{"x":150,"y":312,"width":738,"height":12}},{"id":"76dfe5d5-675e-4411-89c4-2bdaa6bbad8e","block_type":"box","text":"disposing of certain high yield securities due to the limited number of investors in that sector of the","page_number":100,"box":{"x":150,"y":327,"width":734,"height":12}},{"id":"ad122662-8fc0-4558-a142-08202c52680f","block_type":"box","text":"market. There are fewer dealers in the junk bond market, and there may be significant differences","page_number":100,"box":{"x":150,"y":343,"width":730,"height":12}},{"id":"17a3ff18-eb41-4a0c-9623-5653c5d676b8","block_type":"box","text":"in the prices quoted for junk bonds by the dealers, and such quotations may not be the actual","page_number":100,"box":{"x":150,"y":358,"width":698,"height":12}},{"id":"63d084ea-974a-42a2-82b0-9aaa62cd6882","block_type":"box","text":"prices available for a purchase or sale. Because junk bonds are less liquid than higher rated","page_number":100,"box":{"x":150,"y":374,"width":688,"height":12}},{"id":"bc2461a0-7bc3-4cf2-ae54-f4951f9bd6b3","block_type":"box","text":"bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in","page_number":100,"box":{"x":150,"y":389,"width":720,"height":12}},{"id":"9729bfee-baa0-48ea-9b12-4ec78639a1ec","block_type":"box","text":"the case of securities trading in a more liquid market.","page_number":100,"box":{"x":150,"y":405,"width":398,"height":12}},{"id":"9bd8e15d-7224-4b74-87fa-993fd70d2be7","block_type":"box","text":"• The secondary markets for high yield securities are not as liquid as the secondary markets for","page_number":100,"box":{"x":117,"y":428,"width":734,"height":12}},{"id":"95e89e2e-7499-459f-af2d-958cfc88b0ae","block_type":"box","text":"higher rated securities. The secondary markets for high yield securities are concentrated in","page_number":100,"box":{"x":150,"y":444,"width":680,"height":12}},{"id":"f508de0b-f015-434f-8998-410ffb7c4fc0","block_type":"box","text":"relatively few market makers and participants in the markets are mostly institutional investors,","page_number":100,"box":{"x":150,"y":459,"width":699,"height":12}},{"id":"ef799644-368d-43cc-a956-fa88f40087c1","block_type":"box","text":"including insurance companies, banks, other financial institutions and mutual funds. In addition,","page_number":100,"box":{"x":150,"y":475,"width":712,"height":12}},{"id":"21a8c681-ff00-4ef4-8b0a-7783cf2c8cf3","block_type":"box","text":"the trading volume for high yield securities is generally lower than that for higher rated securities","page_number":100,"box":{"x":150,"y":490,"width":718,"height":12}},{"id":"a3252690-e3cf-402d-ba0a-5decf0500fe9","block_type":"box","text":"and the secondary markets could contract under adverse market or economic conditions","page_number":100,"box":{"x":150,"y":506,"width":662,"height":12}},{"id":"4cb54771-35fd-408d-89d8-3b99da89c01c","block_type":"box","text":"independent of any specific adverse changes in the condition of a particular issuer. Under certain","page_number":100,"box":{"x":150,"y":521,"width":725,"height":12}},{"id":"019d335a-852e-4f3f-970b-878f2c9649f2","block_type":"box","text":"economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":100,"box":{"x":150,"y":537,"width":695,"height":12}},{"id":"7ab5872a-e2d8-4b33-87f3-af9b5f3b3310","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. An illiquid secondary","page_number":100,"box":{"x":150,"y":552,"width":728,"height":12}},{"id":"c216be36-eb51-4cdd-9648-9aa71a590cdd","block_type":"box","text":"market may adversely affect the market price of the high yield security, which may result in","page_number":100,"box":{"x":150,"y":568,"width":678,"height":12}},{"id":"1de41b36-bb50-4724-ab49-a446fcaaf040","block_type":"box","text":"increased difficulty selling the particular issue and obtaining accurate market quotations on the","page_number":100,"box":{"x":150,"y":583,"width":706,"height":12}},{"id":"7a079b13-a700-43e7-bffa-47d9ae725e14","block_type":"box","text":"issue when valuing a Fund’s assets. Market quotations on high yield securities are available only","page_number":100,"box":{"x":150,"y":599,"width":722,"height":12}},{"id":"e1e547d5-efd3-42b9-86c1-a5bd974ef562","block_type":"box","text":"from a limited number of dealers, and such quotations may not be the actual prices available for a","page_number":100,"box":{"x":149,"y":614,"width":731,"height":12}},{"id":"6627985e-ce67-4a46-9d96-6f923295de4c","block_type":"box","text":"purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in","page_number":100,"box":{"x":150,"y":630,"width":734,"height":12}},{"id":"829d8d81-a1ee-402f-b9b3-a24c34d9ae0d","block_type":"box","text":"the absence of readily available market quotations for such securities, the relative lack of reliable","page_number":100,"box":{"x":150,"y":645,"width":723,"height":12}},{"id":"511659f9-a5fa-4fbb-a9a2-ad00fb8f062e","block_type":"box","text":"objective data makes it more difficult to value a Fund’s securities, and judgment plays a more","page_number":100,"box":{"x":150,"y":661,"width":691,"height":12}},{"id":"4ad659aa-cc47-4292-aafc-89ad2e837d99","block_type":"box","text":"important role in determining such valuations.","page_number":100,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"5f027de9-5efc-4c96-a0f5-ad733ea10ee6","block_type":"box","text":"• A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate","page_number":100,"box":{"x":117,"y":699,"width":757,"height":13}},{"id":"c69d33e4-5f99-43e3-9e38-8b5f4287f31b","block_type":"box","text":"new terms with a defaulting issuer.","page_number":100,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"d9772055-05ff-4518-bd17-497cea36e2e8","block_type":"box","text":"• The junk bond markets may react strongly to adverse news about an issuer or the economy, or to","page_number":100,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"c422e731-10db-4984-b0d3-98c05987cdd2","block_type":"box","text":"the perception or expectation of adverse news, whether or not it is based on fundamental analysis.","page_number":100,"box":{"x":150,"y":754,"width":731,"height":12}},{"id":"c8157d13-7317-4c7d-8594-a355c6f03a59","block_type":"box","text":"Additionally, prices for high yield securities may be affected by legislative and regulatory","page_number":100,"box":{"x":149,"y":769,"width":654,"height":12}},{"id":"f7e7283f-cf58-4d3e-9d08-080d68f49ff9","block_type":"box","text":"developments. These developments could adversely affect a Fund’s NAV and investment","page_number":100,"box":{"x":150,"y":785,"width":664,"height":12}},{"id":"91943a9b-9e65-4726-848c-40e58bf50349","block_type":"box","text":"practices, the secondary market for high yield securities, the financial condition of issuers of these","page_number":100,"box":{"x":150,"y":800,"width":726,"height":12}},{"id":"c11500a2-cfb8-4ce1-9af4-57bbd7059d30","block_type":"box","text":"securities and the value and liquidity of outstanding high yield securities, especially in a thinly","page_number":100,"box":{"x":150,"y":816,"width":690,"height":12}},{"id":"6acb29d9-868f-48c9-818c-aa5b6d8c19c1","block_type":"box","text":"traded market. For example, federal legislation requiring the divestiture by federally insured","page_number":100,"box":{"x":150,"y":831,"width":681,"height":12}},{"id":"a063b04c-c74b-4e39-beec-ec469f8c03f8","block_type":"box","text":"savings and loan associations of their investments in high yield bonds and limiting the deductibility","page_number":100,"box":{"x":150,"y":847,"width":733,"height":12}},{"id":"98a2dc5d-cde0-48b4-887a-ed5ba1a52bef","block_type":"box","text":"of interest by certain corporate issuers of high yield bonds adversely affected the market in the","page_number":100,"box":{"x":150,"y":862,"width":706,"height":12}},{"id":"74ea9a3f-9f74-4daf-9dcb-c73157aaec3c","block_type":"box","text":"past.","page_number":100,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"256fd80d-d2fa-4f31-bfc4-fecec66fb1eb","block_type":"box","text":"II-14","page_number":100,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6dea6d17-c104-43fc-b1ad-bca1e960dc17","block_type":"box","text":"NM1026U-6042785-100/259","page_number":100,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e4189af1-3688-494c-907c-53e0c092e8f7","block_type":"box","text":"• The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of","page_number":101,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"a82d0de9-af61-48f8-a2c7-7aa261690cfd","block_type":"box","text":"a non-investment grade security’s principal and interest payments, but does not address market","page_number":101,"box":{"x":150,"y":103,"width":716,"height":12}},{"id":"266e4da0-900b-4b2a-a6aa-0f2e9c25421e","block_type":"box","text":"value risk. Because such ratings of the ratings agencies may not always reflect current conditions","page_number":101,"box":{"x":150,"y":118,"width":728,"height":12}},{"id":"98ebad6b-a3bf-47e5-996a-93c20aa2106c","block_type":"box","text":"and events, in addition to using recognized rating agencies and other sources, the Manager or","page_number":101,"box":{"x":150,"y":134,"width":705,"height":12}},{"id":"266a6acb-848e-44c5-8363-7548570c3320","block_type":"box","text":"sub-adviser performs its own analysis of the issuers whose non-investment grade securities a","page_number":101,"box":{"x":150,"y":149,"width":700,"height":12}},{"id":"d894f99e-db50-4377-b2d4-85187336b3c2","block_type":"box","text":"Fund holds. Because of this, the Fund’s performance may depend more on the Manager’s or","page_number":101,"box":{"x":151,"y":165,"width":693,"height":12}},{"id":"0b882e63-1c62-46e9-b4f4-06de0b26344a","block_type":"box","text":"sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated","page_number":101,"box":{"x":150,"y":180,"width":678,"height":12}},{"id":"2d93a4ef-e892-42f4-ba78-7b61eb5f42ef","block_type":"box","text":"securities.","page_number":101,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"fa3fc946-a972-4e07-ba8d-c7b3ae2fb4bf","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as","page_number":101,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"d445705b-de8f-4293-b01c-07ec286dcf89","block_type":"box","text":"those relating to the creditworthiness of issuers, the ratings and performance of the securities, the","page_number":101,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"7c462c5d-0b4f-4fed-ae0c-dc6a2a151bca","block_type":"box","text":"protections afforded the securities and the diversity of the Fund. The Manager or sub-adviser","page_number":101,"box":{"x":117,"y":258,"width":694,"height":12}},{"id":"9b671669-d2a7-4c99-9a8b-d375fd076e52","block_type":"box","text":"continuously monitors the issuers of non-investment grade securities held by the Fund for their ability","page_number":101,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"d1ca2f38-6160-4fea-aa85-933df58c2980","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":101,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"e7734e9d-3f76-46fb-9fb6-04540eac196a","block_type":"box","text":"Fund so that it can meet redemption requests. If a security’s rating is reduced below the minimum","page_number":101,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"a89e66cc-ecb3-4840-b143-404cf01694c4","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":101,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"d7cc89f3-1cb5-4e24-aad4-8897eb8f9352","block_type":"box","text":"Fund should continue to hold the security.","page_number":101,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"ea42403e-d88e-4b17-bc53-509120970e18","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net","page_number":101,"box":{"x":117,"y":366,"width":718,"height":12}},{"id":"02ac6e1b-c0ef-4f67-adf7-498b658cf977","block_type":"box","text":"redemptions, the Fund could be forced to sell its holdings without regard to the investment merits,","page_number":101,"box":{"x":117,"y":382,"width":729,"height":12}},{"id":"f6443691-f0ab-4bde-817c-1e83d612fc02","block_type":"box","text":"thereby decreasing the assets upon which the Fund’s rate of return is based.","page_number":101,"box":{"x":116,"y":397,"width":575,"height":12}},{"id":"ffdf3e01-3a7e-4686-bc2b-e526e3d14705","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons,","page_number":101,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"ae8f535d-87f2-4d4b-9566-b61d1d799c3b","block_type":"box","text":"such as higher investment research costs and higher commission costs.","page_number":101,"box":{"x":116,"y":444,"width":540,"height":12}},{"id":"aaf815a1-2b01-43d2-9184-694595b02b98","block_type":"box","text":"Mezzanine Investments.","page_number":101,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"3d89af3f-3257-419f-81ea-68d9486671a6","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a","page_number":101,"box":{"x":297,"y":475,"width":579,"height":12}},{"id":"0cf1d020-e8db-4a87-a09f-fe59c9873a49","block_type":"box","text":"specific credit quality, may invest in certain high yield securities known as mezzanine investments,","page_number":101,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"a482d10b-a58d-4031-805f-cfb84644ea17","block_type":"box","text":"which are subordinated debt securities which are generally issued in private placements in connection","page_number":101,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"1c7e375d-6098-45b2-b937-bdf4404ead5e","block_type":"box","text":"with an equity security (","page_number":101,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"31a49163-fa9c-4f23-a922-d6d586ff43d7","block_type":"box","text":"e.g.","page_number":101,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"21231461-c8e1-49a1-ac2e-2a776b848f4e","block_type":"box","text":", with attached warrants). Such mezzanine investments may be issued with","page_number":101,"box":{"x":321,"y":521,"width":563,"height":12}},{"id":"2a7b7f3d-f05e-46f9-9025-728ddfebe7a8","block_type":"box","text":"or without registration rights. Similar to other high yield securities, maturities of mezzanine investments","page_number":101,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"82a24f10-8d13-487d-98e2-478354ec7847","block_type":"box","text":"are typically seven to ten years, but the expected average life is significantly shorter at three to five","page_number":101,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"3c091383-e991-493d-aece-5e36e4a1d59e","block_type":"box","text":"years. Mezzanine investments are usually unsecured and subordinate to other obligations of the","page_number":101,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"d77a433b-9130-475a-ba97-9e6ca5aa50fc","block_type":"box","text":"issuer.","page_number":101,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"26a07f4b-f0d3-484c-a4c5-5694309705c7","block_type":"box","text":"Pay-in-kind Bonds.","page_number":101,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"65e261dc-cdff-4883-819c-a4e071ce03b4","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which","page_number":101,"box":{"x":257,"y":614,"width":631,"height":12}},{"id":"351170a3-1e69-454f-afe3-883a31eda754","block_type":"box","text":"pay interest through the issuance of additional debt or equity securities. Similar to zero coupon","page_number":101,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"e5b36777-f39a-40fd-b647-c382cde07e8e","block_type":"box","text":"obligations, pay-in-kind bonds also carry additional risk as holders of these types of securities realize","page_number":101,"box":{"x":116,"y":645,"width":753,"height":12}},{"id":"1c5c9f2f-1982-46c5-9252-ad7ea491395d","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":101,"box":{"x":117,"y":661,"width":707,"height":12}},{"id":"a0ee4fd4-5e6f-4d65-a68f-cb613e31f07f","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":101,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"609cc599-42e9-4874-bbfa-4d9ecb8ce722","block_type":"box","text":"affected by interest rate changes to a greater extent, and therefore tends to be more volatile, than that","page_number":101,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"0eda59c6-3abf-4d62-b27a-b0afd2f2dce7","block_type":"box","text":"of securities which pay interest in cash. Additionally, current U.S. federal income tax law requires the","page_number":101,"box":{"x":116,"y":707,"width":747,"height":12}},{"id":"fcc862f9-2a4c-4cb9-85d4-1a4757823c40","block_type":"box","text":"holder of pay-in-kind bonds to accrue current income with respect to these securities regardless of the","page_number":101,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"bdc73325-d97f-4c74-98ee-8582ec82337d","block_type":"box","text":"receipt of cash payments. To maintain its qualification as a regulated investment company and avoid","page_number":101,"box":{"x":117,"y":738,"width":745,"height":12}},{"id":"fbfa2124-acb0-4e24-9bb7-0d52571081ac","block_type":"box","text":"liability for U.S. federal income and excise taxes, each Fund may be required to distribute income","page_number":101,"box":{"x":117,"y":754,"width":721,"height":12}},{"id":"1c41fd7f-257b-4b86-912d-bc50adc1f35b","block_type":"box","text":"accrued with respect to these securities and may have to dispose of portfolio securities under","page_number":101,"box":{"x":116,"y":769,"width":693,"height":12}},{"id":"5171195b-8aea-458e-bb8d-0c6a3dd206cb","block_type":"box","text":"disadvantageous circumstances in order to generate cash to satisfy these distribution requirements.","page_number":101,"box":{"x":116,"y":785,"width":740,"height":12}},{"id":"edf67dd3-45e7-4834-86d1-ce77563f147a","block_type":"box","text":"Supranational Entities.","page_number":101,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"a1be1b9d-a3d1-42c3-98b8-9c57319b4c18","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of","page_number":101,"box":{"x":289,"y":816,"width":555,"height":12}},{"id":"d9907618-60e7-42af-be08-6b452b2a12df","block_type":"box","text":"such entities include the International Bank for Reconstruction and Development (the World Bank), the","page_number":101,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"7cae98d8-e09f-4740-849b-f71683717dfe","block_type":"box","text":"European Steel and Coal Community, the Asian Development Bank and the Inter-American","page_number":101,"box":{"x":117,"y":847,"width":683,"height":12}},{"id":"8ada326b-3f8d-4ceb-9a47-99cbfa186939","block_type":"box","text":"Development Bank. The government members, or “stockholders,” usually make initial capital","page_number":101,"box":{"x":117,"y":862,"width":691,"height":12}},{"id":"b159c561-049b-49b2-97ae-aad085a10b06","block_type":"box","text":"contributions to the supranational entity and in many cases are committed to make additional capital","page_number":101,"box":{"x":116,"y":878,"width":748,"height":12}},{"id":"90cb4c30-3eb5-44bf-9e0b-492c4806fb33","block_type":"box","text":"II-15","page_number":101,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1d7b60a7-86b0-4060-a5a9-0da834b2d9c6","block_type":"box","text":"NM1026U-6042785-101/259","page_number":101,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c3316022-72ac-4ad1-b2a5-58d901cd4a4c","block_type":"box","text":"contributions if the supranational entity is unable to repay its borrowings. There is no guarantee that","page_number":102,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"f8ccec3c-7f01-4436-a410-c10bc1235969","block_type":"box","text":"one or more stockholders of a supranational entity will continue to make any necessary additional","page_number":102,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"3199f9a2-be73-4a5c-949c-445dec6e1318","block_type":"box","text":"capital contributions. If such contributions are not made, the entity may be unable to pay interest or","page_number":102,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"a0b6c928-b66c-4c2a-b43f-615922cf6720","block_type":"box","text":"repay principal on its debt securities, and a Fund may lose money on such investments.","page_number":102,"box":{"x":117,"y":134,"width":655,"height":12}},{"id":"e6ad93ad-b8dd-45cf-84da-2fc625c40b50","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":102,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"1965e503-6f51-4664-bd4e-b99129ee7541","block_type":"box","text":"Certain Funds may invest in the securities of foreign","page_number":102,"box":{"x":484,"y":167,"width":397,"height":12}},{"id":"3f00d4c0-e27e-4dfd-bd90-f8f61a2d4389","block_type":"box","text":"issuers in the form of Depositary Receipts or other securities convertible into securities of foreign","page_number":102,"box":{"x":117,"y":182,"width":722,"height":12}},{"id":"8c22d7f4-ad37-4955-9858-c48294389e66","block_type":"box","text":"issuers. Depositary Receipts may not necessarily be denominated in the same currency as the","page_number":102,"box":{"x":117,"y":198,"width":707,"height":12}},{"id":"1d353a6a-a5ec-4545-b558-882911718dd7","block_type":"box","text":"underlying securities into which they may be converted. The Fund may invest in both sponsored and","page_number":102,"box":{"x":117,"y":213,"width":749,"height":12}},{"id":"8604a69f-e6a1-4fe1-be9a-4add9a618821","block_type":"box","text":"unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global","page_number":102,"box":{"x":117,"y":229,"width":769,"height":12}},{"id":"17dfedd5-3f96-466c-9383-f54af9139706","block_type":"box","text":"Depositary Receipts (“GDRs”) and other similar global instruments. ADRs typically are issued by an","page_number":102,"box":{"x":117,"y":244,"width":743,"height":12}},{"id":"a14e3b9b-1ea0-4525-b326-97caaf0589db","block_type":"box","text":"American bank or trust company and evidence ownership of underlying securities issued by a foreign","page_number":102,"box":{"x":116,"y":260,"width":756,"height":12}},{"id":"c81990ff-9716-4f4a-ab8f-42dfc1886061","block_type":"box","text":"corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are receipts","page_number":102,"box":{"x":116,"y":275,"width":757,"height":12}},{"id":"751662ab-d257-4917-8908-b5882882b4a9","block_type":"box","text":"issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either","page_number":102,"box":{"x":117,"y":291,"width":739,"height":12}},{"id":"3a34c5e6-23f1-42a2-87df-672bf256af0a","block_type":"box","text":"foreign or domestic underlying securities. GDRs are depositary receipts structured like global debt","page_number":102,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"b71f69d4-1726-4d84-8204-e704ba165127","block_type":"box","text":"issues to facilitate trading on an international basis. In addition to investment risks associated with the","page_number":102,"box":{"x":117,"y":322,"width":758,"height":12}},{"id":"0aa8c7b5-bb86-4cee-8381-aa38d2daf3e4","block_type":"box","text":"underlying issuer, Depositary Receipts expose a Fund to additional risks associated with the","page_number":102,"box":{"x":117,"y":337,"width":689,"height":12}},{"id":"86404c08-d12c-49ae-86d9-1660f619d9a5","block_type":"box","text":"non-uniform terms that apply to Depositary Receipt programs, credit exposure to the depository bank","page_number":102,"box":{"x":117,"y":353,"width":754,"height":12}},{"id":"264c984d-f4d2-40f4-8eae-164d8c1e6393","block_type":"box","text":"and to the sponsors and other parties with whom the depository bank establishes the programs,","page_number":102,"box":{"x":116,"y":368,"width":716,"height":12}},{"id":"65ed9792-1c00-48e6-a223-769468d33f43","block_type":"box","text":"currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR, EDR and","page_number":102,"box":{"x":116,"y":384,"width":748,"height":12}},{"id":"5e5ddeed-8fe8-4da1-a72a-5eec199772cd","block_type":"box","text":"GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":102,"box":{"x":117,"y":399,"width":771,"height":12}},{"id":"7709ec6d-9779-4897-8ed5-856c3d58e1b5","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored","page_number":102,"box":{"x":116,"y":415,"width":701,"height":12}},{"id":"ddddf77a-c14c-4d61-8e8e-789338d70721","block_type":"box","text":"programs and do not provide holders with many of the shareholder benefits that come from investing in","page_number":102,"box":{"x":117,"y":430,"width":769,"height":12}},{"id":"2da8616f-fb29-4ebe-b63c-f33c62a42498","block_type":"box","text":"a sponsored Depositary Receipt. Available information concerning the issuer may not be as current as","page_number":102,"box":{"x":116,"y":446,"width":764,"height":12}},{"id":"30ebc2f4-c5eb-46e1-9e26-d8c189108bca","block_type":"box","text":"for sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may","page_number":102,"box":{"x":116,"y":461,"width":750,"height":12}},{"id":"4e6c141c-ff76-472f-a4dd-3f532da77935","block_type":"box","text":"be more volatile than if such instruments were sponsored by the issuer. Depositary Receipts are","page_number":102,"box":{"x":117,"y":477,"width":718,"height":12}},{"id":"9568086d-caf7-49ee-a1c4-df32736f226e","block_type":"box","text":"generally subject to the same risks as the foreign securities that they evidence or into which they may","page_number":102,"box":{"x":116,"y":492,"width":759,"height":12}},{"id":"586b0139-55c3-4dce-97d0-006d423efd3f","block_type":"box","text":"be converted. Investments in ADRs, EDRs and GDRs present additional investment considerations as","page_number":102,"box":{"x":117,"y":508,"width":763,"height":12}},{"id":"1c821342-5b7b-48f1-934d-ec6427b6e0de","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":102,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"bc2bbd96-f7aa-4359-b0c2-b7df06e2bf87","block_type":"box","text":"Derivatives.","page_number":102,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"708ff7a5-0ae3-4151-b3d9-02e37de85ffb","block_type":"box","text":"General.","page_number":102,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"5d3da4a2-a2b8-45b6-9e0a-3a18cd41c071","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments","page_number":102,"box":{"x":186,"y":581,"width":675,"height":12}},{"id":"aa225fdd-f040-4c95-b35f-97110b9bf729","block_type":"box","text":"that derive their value from one or more securities, commodities (such as gold or oil), currencies,","page_number":102,"box":{"x":116,"y":596,"width":722,"height":12}},{"id":"fc0873eb-5e2a-4397-a5ca-73fc07e6a463","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":102,"box":{"x":117,"y":612,"width":758,"height":12}},{"id":"ed0c58c9-b483-4fae-a160-d922c287b9c4","block_type":"box","text":"prime lending rate) or other reference asset. Derivatives may allow a Fund to increase or decrease the","page_number":102,"box":{"x":117,"y":627,"width":765,"height":12}},{"id":"d6c1a927-9082-450e-9562-7418ff26010a","block_type":"box","text":"level of risk to which the Fund is exposed more quickly and efficiently than with other transactions.","page_number":102,"box":{"x":117,"y":643,"width":732,"height":12}},{"id":"2992569e-c3cb-43c9-aacf-2cb365b858fd","block_type":"box","text":"Certain Funds may use derivatives to maintain a portion of their long and short positions. Unless","page_number":102,"box":{"x":117,"y":658,"width":719,"height":12}},{"id":"73a912fe-926f-4cbb-999f-653bd88e6251","block_type":"box","text":"otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset class it is","page_number":102,"box":{"x":116,"y":674,"width":724,"height":12}},{"id":"e80ef2dd-b114-4f34-b65f-706afc7ab415","block_type":"box","text":"prohibited by its investment restrictions from purchasing directly. As described below, derivatives can","page_number":102,"box":{"x":117,"y":689,"width":748,"height":12}},{"id":"40538636-8b72-40ec-988b-f2624aeb1713","block_type":"box","text":"be used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":102,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"713a9060-b9a7-4806-a911-ab194dd61732","block_type":"box","text":"i.e.","page_number":102,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"073695c0-750b-4e09-8e5d-b834e03e7ae2","block_type":"box","text":", the payment obligations of derivatives contracts are netted against one another with the Fund","page_number":102,"box":{"x":140,"y":720,"width":701,"height":12}},{"id":"7f42e0c7-6385-4ac7-97da-63e438240072","block_type":"box","text":"receiving or paying, as the case may be, only the net amount of the two payment streams.","page_number":102,"box":{"x":117,"y":736,"width":667,"height":12}},{"id":"0aaa6b75-1d9f-40e7-9122-4c27b59b735a","block_type":"box","text":"Hedging.","page_number":102,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"234aed8f-9e35-446c-8dde-fc84bb259e11","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset","page_number":102,"box":{"x":189,"y":769,"width":680,"height":12}},{"id":"9ae79258-b121-4c7a-bb9e-564368cea1cd","block_type":"box","text":"the risks associated with other Fund holdings. Losses on other investments may be substantially","page_number":102,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"f52453db-4345-433d-968c-dfd76ec2a063","block_type":"box","text":"reduced by gains on a derivative that reacts in an opposite manner to market movements. Although","page_number":102,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"85578d35-6733-4633-86cd-a00d69113e18","block_type":"box","text":"hedging may reduce losses, it may also reduce or eliminate gains. In addition, hedging may cause","page_number":102,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"33eefb27-f1e0-4dc6-9282-5d2d4fa4b924","block_type":"box","text":"losses if the market moves in an unanticipated manner, or if the cost of the derivative outweighs the","page_number":102,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"2c3ebc62-db0a-4b10-bc04-9fed2fdaaab3","block_type":"box","text":"benefit of the hedge. The effectiveness of hedging may be reduced by correlation risk,","page_number":102,"box":{"x":117,"y":847,"width":643,"height":12}},{"id":"dc433632-a1a8-4970-92e2-db9b18834c30","block_type":"box","text":"i.e.","page_number":102,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"477d0a87-b212-4472-89b6-cba97679b560","block_type":"box","text":",","page_number":102,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"7c4eea5e-622f-47cf-900a-145d5da52bfe","block_type":"box","text":"the risk that","page_number":102,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"ad3bb166-4c15-49ae-9198-8127a07cbb0e","block_type":"box","text":"changes in the value of the derivative will not match those of the holdings being hedged as expected","page_number":102,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"acdf7b9f-73ec-4f26-8849-a99437a18141","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":102,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"b975ab27-b715-4992-97dd-d8d18aa6dbb5","block_type":"box","text":"II-16","page_number":102,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"33d04432-de44-4d27-af66-e9fe673b4cac","block_type":"box","text":"NM1026U-6042785-102/259","page_number":102,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5a3d7341-2c56-4fbb-b929-4edb2928af0e","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":103,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"f4801e64-3eb0-4c9b-802b-8faf7cb7bd77","block_type":"box","text":"will be effective. No Fund is required to use derivatives to hedge.","page_number":103,"box":{"x":116,"y":102,"width":486,"height":13}},{"id":"65facd52-5daf-46a0-8bed-c7fbcd84000d","block_type":"box","text":"Speculation.","page_number":103,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"50454301-3c0e-42c0-b4d8-49450ba2bdcb","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance","page_number":103,"box":{"x":208,"y":132,"width":638,"height":13}},{"id":"f967b98d-2bda-4e6a-b818-cde7efb488ed","block_type":"box","text":"returns. The use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather","page_number":103,"box":{"x":117,"y":148,"width":753,"height":12}},{"id":"51015645-8898-49bd-a688-94b39db0b69a","block_type":"box","text":"than offset the risk of other positions. To the extent a Fund invests in a derivative for speculative","page_number":103,"box":{"x":116,"y":163,"width":719,"height":12}},{"id":"4b584928-e730-49d8-8faa-6d41d2470cbd","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":103,"box":{"x":117,"y":179,"width":769,"height":12}},{"id":"1451efac-a208-4216-a3f2-8c9b0d28dd15","block_type":"box","text":"greater than the derivative’s cost, and the potential for loss in certain cases may be unlimited.","page_number":103,"box":{"x":116,"y":194,"width":699,"height":13}},{"id":"688664d1-aa7d-486c-9c43-989bc626f5b4","block_type":"box","text":"Regulation of Derivatives.","page_number":103,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"be38ec1b-6ccb-45ce-bd3e-6b4d08bc59d8","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":103,"box":{"x":116,"y":247,"width":352,"height":12}},{"id":"3cd4f71d-c18a-4b03-9d30-0a2f69dff397","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits","page_number":103,"box":{"x":469,"y":247,"width":416,"height":12}},{"id":"aa282e65-0e25-4349-aa80-81f4ebd7e3cd","block_type":"box","text":"a Fund to enter into Derivatives Transactions (as defined below) and certain other transactions","page_number":103,"box":{"x":116,"y":263,"width":708,"height":12}},{"id":"369bfeb5-f5a0-4285-9da3-bd0806361c35","block_type":"box","text":"notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the","page_number":103,"box":{"x":117,"y":278,"width":692,"height":12}},{"id":"0fa22c4a-adf8-459d-b27e-47f1e8ce0662","block_type":"box","text":"Investment Company Act. Section 18 of the Investment Company Act, among other things, prohibits","page_number":103,"box":{"x":117,"y":294,"width":747,"height":12}},{"id":"17eb683a-f1de-44b9-85de-3c24eb9d7276","block_type":"box","text":"open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing","page_number":103,"box":{"x":116,"y":309,"width":769,"height":12}},{"id":"891a6ae4-48ca-4a0e-8829-6116bed33fb4","block_type":"box","text":"from a bank (subject to a requirement to maintain 300% “asset coverage”).","page_number":103,"box":{"x":116,"y":325,"width":560,"height":12}},{"id":"c082db99-58c1-43f4-a917-26060b1004f1","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap","page_number":103,"box":{"x":117,"y":354,"width":761,"height":13}},{"id":"b4d648d7-21e5-4802-9389-26059426197d","block_type":"box","text":"(including a contract for differences), futures contract, forward contract, option (excluding purchased","page_number":103,"box":{"x":117,"y":370,"width":747,"height":12}},{"id":"830a0508-ccc3-40dc-8ac3-7defe75eec84","block_type":"box","text":"options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be","page_number":103,"box":{"x":116,"y":385,"width":764,"height":13}},{"id":"ed0cf35d-ca05-41cb-a84b-536db1c2a8d7","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":103,"box":{"x":117,"y":401,"width":763,"height":12}},{"id":"7310fa22-2760-46bb-85e3-fa1d375a7274","block_type":"box","text":"maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale","page_number":103,"box":{"x":117,"y":416,"width":767,"height":13}},{"id":"1f8ffb0e-38cb-42fe-a12a-3d0aa33927bc","block_type":"box","text":"borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and","page_number":103,"box":{"x":117,"y":432,"width":750,"height":12}},{"id":"ea08db6e-de80-429b-a4a6-90a22fe8204a","block_type":"box","text":"non-recourse tender option bonds, and borrowed bonds), if a Fund elects to treat all of these","page_number":103,"box":{"x":117,"y":447,"width":691,"height":13}},{"id":"b5f5862a-45b7-447e-8afd-ee6c19fc63ca","block_type":"box","text":"transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":103,"box":{"x":116,"y":463,"width":738,"height":12}},{"id":"22c9d247-cf7d-4114-801f-0d32dc1f7854","block_type":"box","text":"securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and","page_number":103,"box":{"x":116,"y":478,"width":763,"height":13}},{"id":"f53040cc-e806-4466-acdf-a733f2c0f077","block_type":"box","text":"dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed","page_number":103,"box":{"x":116,"y":494,"width":755,"height":12}},{"id":"efcf5a8d-fd48-42a8-8ab6-ed112ab2bec3","block_type":"box","text":"Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed Delivery","page_number":103,"box":{"x":116,"y":509,"width":768,"height":13}},{"id":"fe1a79aa-bf65-46e0-9dac-139044884f26","block_type":"box","text":"Securities and Forward Commitments”).","page_number":103,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"c70c0e3d-9748-46e4-a7c9-52368b50b7e7","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must","page_number":103,"box":{"x":117,"y":555,"width":759,"height":12}},{"id":"c3942433-6638-46d2-8cd1-28c590cce04c","block_type":"box","text":"comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things,","page_number":103,"box":{"x":116,"y":570,"width":744,"height":12}},{"id":"f9f2a28c-3826-4b0a-a5d3-d524e6296e43","block_type":"box","text":"requires a Fund to adopt and implement a comprehensive written derivatives risk management","page_number":103,"box":{"x":117,"y":586,"width":708,"height":12}},{"id":"b72b2f06-1776-4bcb-923d-f0f29bef0642","block_type":"box","text":"program (“DRMP”) and comply with a relative or absolute limit on Fund leverage risk calculated based","page_number":103,"box":{"x":117,"y":601,"width":761,"height":13}},{"id":"0c176481-b4f4-4bd3-ab33-7c094322ff61","block_type":"box","text":"on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed","page_number":103,"box":{"x":116,"y":617,"width":760,"height":12}},{"id":"9bad1564-3689-4a3a-a46f-c5786c204e00","block_type":"box","text":"by the Fund’s Board, including a majority of the independent Directors, and periodically reviews the","page_number":103,"box":{"x":117,"y":632,"width":739,"height":13}},{"id":"f0367385-7cda-40d7-a555-55fbd9c4b695","block_type":"box","text":"DRMP and reports to the Fund’s Board.","page_number":103,"box":{"x":117,"y":648,"width":299,"height":12}},{"id":"0f6fa8ad-12b7-4e25-83c8-a1a3c794e2d6","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":103,"box":{"x":117,"y":678,"width":758,"height":12}},{"id":"e4946ed9-7aaa-437e-9fdc-4a3dc1c57659","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)","page_number":103,"box":{"x":116,"y":693,"width":754,"height":12}},{"id":"88dc24ce-52d6-4092-8c5b-10a814bff903","block_type":"box","text":"and the Fund adopts and implements written policies and procedures reasonably designed to manage","page_number":103,"box":{"x":116,"y":709,"width":758,"height":12}},{"id":"108628da-71e9-41cb-a3bd-f11a444c25a9","block_type":"box","text":"its derivatives risks (the “Limited Derivatives User Exception”).","page_number":103,"box":{"x":117,"y":724,"width":459,"height":12}},{"id":"401aff5f-9e5e-41fe-a956-b7096e1ddad7","block_type":"box","text":"Dodd-Frank Regulations.","page_number":103,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"4e23614f-bb9c-438a-ae33-1b62f9cf3712","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd","page_number":103,"box":{"x":308,"y":754,"width":555,"height":12}},{"id":"b1efd2d5-1ce9-4b86-8584-36a57dbf76a8","block_type":"box","text":"Frank”), enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter","page_number":103,"box":{"x":117,"y":770,"width":754,"height":12}},{"id":"ac7f87c4-454b-4c56-8f33-6eec11ba264d","block_type":"box","text":"(“OTC”) derivatives markets for the first time. While the Commodity Futures Trading Commission","page_number":103,"box":{"x":117,"y":785,"width":716,"height":12}},{"id":"54df2469-051e-444c-bc47-8fe7d754ab63","block_type":"box","text":"(“CFTC”) and other U.S. regulators have adopted many of the required Dodd-Frank regulations, certain","page_number":103,"box":{"x":117,"y":801,"width":764,"height":12}},{"id":"567e099f-0a44-4d90-93ae-cb73174e8f5c","block_type":"box","text":"regulations have only recently become effective and other regulations remain to be adopted. The full","page_number":103,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"1210235b-9a01-4d2a-8226-3f652efc3410","block_type":"box","text":"impact of Dodd-Frank on the Funds remains uncertain.","page_number":103,"box":{"x":117,"y":832,"width":411,"height":12}},{"id":"9f03946e-bb43-4b72-aaae-7615cd9f1723","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the","page_number":103,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"88e4d9e9-7cfe-41ad-a2f8-9cfccd060ef8","block_type":"box","text":"SEC as “security-based swap dealers”. Registered swap dealers and security-based swap dealers are","page_number":103,"box":{"x":116,"y":877,"width":765,"height":12}},{"id":"4cf0dc10-4636-487c-8bfe-b0839917ef99","block_type":"box","text":"II-17","page_number":103,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9c3ae9e9-b1cb-485b-bcaa-962edb17eb63","block_type":"box","text":"NM1026U-6042785-103/259","page_number":103,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"24a41aa6-b37f-4232-9b8d-74d6d27b44c9","block_type":"box","text":"subject to various regulatory requirements, including, but not limited to, margin, recordkeeping,","page_number":104,"box":{"x":116,"y":87,"width":708,"height":12}},{"id":"24219c71-356c-47ab-8666-fc7b30be6299","block_type":"box","text":"reporting, transparency, position limits, limitations on conflicts of interest, business conduct standards,","page_number":104,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"b8174743-7342-4902-8f80-7e5b7350e9c0","block_type":"box","text":"minimum capital requirements and other regulatory requirements, which indirectly impact the Funds","page_number":104,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"f732942e-ecaf-4e84-be75-d26cc5920d42","block_type":"box","text":"that enter into transactions with them.","page_number":104,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"2b45c704-0f81-4c41-9642-c731d3e936e0","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed","page_number":104,"box":{"x":116,"y":165,"width":761,"height":11}},{"id":"0bc3a292-bb91-42ef-bd9f-7fdd38050152","block_type":"box","text":"in regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also","page_number":104,"box":{"x":117,"y":180,"width":719,"height":12}},{"id":"84a91734-a7fb-42dd-8936-6b616c50b665","block_type":"box","text":"expected to impose similar requirements on certain security-based derivatives in the future. OTC","page_number":104,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"8dfaf827-efab-4f7a-9d34-7ed25ec3fe52","block_type":"box","text":"derivatives trades submitted for clearing are subject to minimum initial and variation margin","page_number":104,"box":{"x":116,"y":211,"width":681,"height":12}},{"id":"fa146606-2010-4d92-953d-8c390172623e","block_type":"box","text":"requirements set by the relevant clearinghouse, as well as margin requirements mandated by the","page_number":104,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"9a4a3c16-6ec2-42f2-bb6f-580ed2a8d137","block_type":"box","text":"CFTC, SEC and/or federal prudential regulators. In addition, futures commission merchants (“FCMs”),","page_number":104,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"5d0a3b46-56be-4229-8df1-a29dc1950e8f","block_type":"box","text":"who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":104,"box":{"x":116,"y":258,"width":697,"height":12}},{"id":"2533d258-142b-444f-8087-554eddbf4c54","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond","page_number":104,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"a2d80734-2041-4a52-84f5-364ccdd35448","block_type":"box","text":"any regulatory and clearinghouse minimums subject to any restrictions on such discretion in the","page_number":104,"box":{"x":116,"y":289,"width":715,"height":12}},{"id":"82ad5847-d977-4f41-be60-19f406dd7300","block_type":"box","text":"documentation between the FCM and the customer. These regulatory requirements may make it more","page_number":104,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"e58dc0d5-ef3b-4253-9dbb-f8cd27e976b6","block_type":"box","text":"difficult and costly for the Funds to enter into highly tailored or customized transactions, potentially","page_number":104,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"5a72f3ea-446f-4d67-81ce-659b223e4123","block_type":"box","text":"rendering certain investment strategies impossible or not economically feasible. If a Fund decides to","page_number":104,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"a5a59495-19ad-4537-bf55-6d1e5b19da63","block_type":"box","text":"execute and clear cleared OTC derivatives and/or futures contracts through execution facilities,","page_number":104,"box":{"x":116,"y":351,"width":712,"height":12}},{"id":"15c95da2-47f7-42a6-9166-de104478ea8e","block_type":"box","text":"exchanges or clearinghouses, either indirectly through an executing broker, clearing member FCM or","page_number":104,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"f45197de-1cb9-47ee-920d-7dc690f1e00a","block_type":"box","text":"as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":104,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"0945c8a5-bee8-4c41-accc-bb59df78a5af","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":104,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"bab8e3de-d0e4-44cb-9752-e5b1d386c1ae","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not","page_number":104,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"8e54f04a-3294-4111-bcf3-adf92d7ca01e","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":104,"box":{"x":116,"y":444,"width":759,"height":12}},{"id":"5538cf50-b4d5-4ef7-8fd9-8827dc361f15","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":104,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"6325bd28-0cab-4525-84a5-a5328e3abe87","block_type":"box","text":"clearing member customer to meet its obligations to its clearing member. Such scenario could arise","page_number":104,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"6e01e352-fb59-4cb2-a6a7-c0e4613e7ed3","block_type":"box","text":"due to a default by the clearing member on its obligations to the clearinghouse simultaneously with a","page_number":104,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"da1e6267-8965-4fc2-a0b1-45cd43a52335","block_type":"box","text":"customer’s failure to meet its obligations to the clearing member.","page_number":104,"box":{"x":116,"y":506,"width":485,"height":12}},{"id":"8938c983-3441-428f-8181-414300781afd","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they","page_number":104,"box":{"x":117,"y":537,"width":742,"height":12}},{"id":"d1df3237-3402-46ac-a536-1a23d8edb0cf","block_type":"box","text":"clear their customers’ cleared OTC derivatives and futures contracts, instead of using such initial","page_number":104,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"b9bd51c1-90c7-4ed8-b530-5d7f64c08e59","block_type":"box","text":"margin in their businesses, as was widely permitted for OTC derivatives before Dodd-Frank. While an","page_number":104,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"a18043b5-37cc-466b-9a7c-9d7f2ed76d7f","block_type":"box","text":"FCM may require its customer to post initial margin in excess of clearinghouse requirements, and","page_number":104,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"a6fd2ff9-c371-441c-92a8-a2b11aae8b31","block_type":"box","text":"certain clearinghouses may share a portion of their earnings on initial margin with their clearing","page_number":104,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"ab158a5b-ad0e-4c0c-a13f-65fd75141d23","block_type":"box","text":"members, some portion of the initial margin that is passed through to the clearinghouse does not","page_number":104,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"e101938d-668a-4665-9d2b-a9b6de55ff0e","block_type":"box","text":"generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on initial","page_number":104,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"37602cd6-9603-498b-b8ae-1d9586625faa","block_type":"box","text":"margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives","page_number":104,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"aa6da304-e889-4c7b-9688-e9a7ede9c893","block_type":"box","text":"may cause FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives","page_number":104,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"aec64f3d-8ec2-4870-9aa7-bae5309edc56","block_type":"box","text":"than swap dealers will provide for non-cleared OTC derivatives. Furthermore, customers, including the","page_number":104,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"543d32b6-070e-4763-abb4-abd934908c17","block_type":"box","text":"Funds, are subject to additional fees payable to FCMs with respect to cleared OTC derivatives, which","page_number":104,"box":{"x":117,"y":692,"width":751,"height":12}},{"id":"4a96e812-cf0c-4b90-8b50-7fd789f5243e","block_type":"box","text":"may raise the cost to Funds of clearing as compared to trading non-cleared OTC derivatives bilaterally.","page_number":104,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"0f7d1560-c132-4381-9ec2-8f3a4303f7b9","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are","page_number":104,"box":{"x":116,"y":738,"width":710,"height":12}},{"id":"b0d7face-182f-495f-b068-407fb0ffcbdf","block_type":"box","text":"required to exchange variation margin with a Fund and may be required by applicable regulations to","page_number":104,"box":{"x":117,"y":754,"width":740,"height":12}},{"id":"b911a6dd-2fcd-4ae3-9bc1-7d2abc6ea85b","block_type":"box","text":"collect (and in some cases exchange) initial margin with a Fund. Both initial and variation margin may","page_number":104,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"86ceb52c-30d2-4563-8cb0-f701fe521b39","block_type":"box","text":"be comprised of cash and/or securities, subject to applicable regulatory haircuts and other restrictions.","page_number":104,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"85f62241-5cd8-4c2c-9f72-76f6f7ca8412","block_type":"box","text":"Shares of investment companies (other than certain money market funds) may not be posted as","page_number":104,"box":{"x":116,"y":800,"width":713,"height":12}},{"id":"303d3c24-c9bd-410c-be30-6235f51ce9ed","block_type":"box","text":"collateral under applicable regulations.","page_number":104,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"83cdef3f-bdcc-4647-bf24-6214b39a34ef","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to","page_number":104,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"e738ea61-b29e-4e7a-9397-76d1a897dfa6","block_type":"box","text":"evaluate and monitor) speculative position limits (“position limits”) on the maximum speculative position","page_number":104,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"cf90cef5-51eb-4633-b825-7bf79c543e0d","block_type":"box","text":"which any person, or group of persons acting in concert, may hold or control in particular contracts. In","page_number":104,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"18b34e69-9614-4084-a1c0-6ed8038951cb","block_type":"box","text":"II-18","page_number":104,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"db54b194-5066-4bfa-922d-7ba8c4e71cb7","block_type":"box","text":"NM1026U-6042785-104/259","page_number":104,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"20390081-c48b-4c79-8a65-4b2cb0525dfd","block_type":"box","text":"addition, U.S. federal position limits apply to swaps that are economically equivalent to futures","page_number":105,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"4d334e1c-6e06-4723-89c5-53c83cc8b6e6","block_type":"box","text":"contracts on certain agricultural, metals and energy commodities. All positions owned or controlled by","page_number":105,"box":{"x":116,"y":103,"width":758,"height":12}},{"id":"7a916b51-a4d3-46d9-a19b-05b0ba915c2d","block_type":"box","text":"the same person or entity, even if in different accounts, must be aggregated for purposes of complying","page_number":105,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"7bf77973-1d41-4002-bd74-74d58083dcf1","block_type":"box","text":"with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits, it","page_number":105,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"8d31eb62-120d-4411-8907-5725eab1674f","block_type":"box","text":"is possible that different clients managed by the Manager and its affiliates may be aggregated for this","page_number":105,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"ca69bc5f-877f-440b-bf24-9fa5b619860c","block_type":"box","text":"purpose. Therefore, the trading decisions of the Manager may have to be modified and positions held","page_number":105,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"980829e9-abec-45d4-8f67-96648f127871","block_type":"box","text":"by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions","page_number":105,"box":{"x":117,"y":180,"width":757,"height":12}},{"id":"f9815bb4-235b-42eb-a0c7-a11e60abe6d6","block_type":"box","text":"or the elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A","page_number":105,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"4d54ec48-e09a-4591-be2f-157332324f27","block_type":"box","text":"violation of position limits could also lead to regulatory action materially adverse to a Fund’s investment","page_number":105,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"e50c525b-56b8-44a6-9018-2672575c79be","block_type":"box","text":"strategy. A Fund may also be affected by other regimes, including those of the European Union and","page_number":105,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"5dd70b90-1a80-47b9-89ea-224ec93f58bc","block_type":"box","text":"United Kingdom, and trading venues that impose position limits on commodity derivative contracts.","page_number":105,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"d8070ace-49b5-427d-927e-2485ab8f024c","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":105,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"0a10b2c1-ee0d-4473-bc45-05cb0c7f5867","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed,","page_number":105,"box":{"x":386,"y":275,"width":489,"height":12}},{"id":"89f1086c-7715-4b35-b196-289b07ccdffa","block_type":"box","text":"or may propose in the future, legislation similar to Dodd-Frank or other legislation that could increase","page_number":105,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"9a911c0a-b746-42b6-95a1-169e804e9e31","block_type":"box","text":"the costs of participating in, or otherwise adversely impact the liquidity of, participating in the","page_number":105,"box":{"x":116,"y":306,"width":689,"height":12}},{"id":"a2a2455c-24e0-4b35-8240-7dec8f081bee","block_type":"box","text":"commodities markets. For example, the European Market Infrastructure Regulation (Regulation (EU)","page_number":105,"box":{"x":116,"y":321,"width":752,"height":12}},{"id":"34987c52-b036-4d61-9558-759ccb705abc","block_type":"box","text":"No 648/2012) (“EMIR”) introduced certain requirements in respect of OTC derivatives including: (i) the","page_number":105,"box":{"x":117,"y":337,"width":761,"height":12}},{"id":"934c57d4-2ed9-4a0b-8398-452a95801e0e","block_type":"box","text":"mandatory clearing of OTC derivative contracts declared subject to the clearing obligation; (ii) risk","page_number":105,"box":{"x":117,"y":352,"width":728,"height":12}},{"id":"04056478-7f97-4f46-a1d0-88aed67f6f82","block_type":"box","text":"mitigation techniques in respect of uncleared OTC derivative contracts, including the mandatory","page_number":105,"box":{"x":117,"y":368,"width":714,"height":12}},{"id":"65f22159-8eb8-46fa-a71c-a8dc61abf342","block_type":"box","text":"margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping requirements in","page_number":105,"box":{"x":117,"y":383,"width":765,"height":12}},{"id":"a732b9a5-5cf0-4c50-884b-e1c211a2e449","block_type":"box","text":"respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":105,"box":{"x":117,"y":399,"width":703,"height":12}},{"id":"8e118edd-4cb3-4886-961a-096f519fc64e","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments","page_number":105,"box":{"x":117,"y":414,"width":688,"height":12}},{"id":"6ebcfcf5-0c3c-46c7-ac68-40ee80796957","block_type":"box","text":"Regulation (Regulation (EU) No 600/2014) (together “MiFID II”), which have applied since January 3,","page_number":105,"box":{"x":117,"y":430,"width":753,"height":12}},{"id":"105d1b6b-6eee-4a99-b908-445d1f3e022a","block_type":"box","text":"2018, govern the provision of investment services and activities in relation to, as well as the organized","page_number":105,"box":{"x":116,"y":445,"width":762,"height":12}},{"id":"5da57877-3115-400a-a537-6b5565d2e617","block_type":"box","text":"trading of, financial instruments such as shares, bonds, units in collective investment schemes and","page_number":105,"box":{"x":116,"y":461,"width":738,"height":12}},{"id":"26047524-9e67-4fb4-8a58-326b7a7bdea5","block_type":"box","text":"derivatives. In particular, MiFID II requires European Union Member States to apply position limits to","page_number":105,"box":{"x":116,"y":476,"width":749,"height":12}},{"id":"0a5fc090-711e-42c2-a220-2478b0cd5374","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":105,"box":{"x":116,"y":492,"width":754,"height":12}},{"id":"c2d54e93-9b42-4e06-b40e-a60950118219","block_type":"box","text":"Union trading venues and in “economically equivalent” OTC contracts. If the requirements of EMIR and","page_number":105,"box":{"x":117,"y":507,"width":769,"height":12}},{"id":"ae0207b5-74e3-40f3-8a4e-340488852b37","block_type":"box","text":"MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":105,"box":{"x":117,"y":523,"width":550,"height":12}},{"id":"cbddaa5e-ffd4-4c5b-b9dc-b85735cb11be","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain","page_number":105,"box":{"x":117,"y":555,"width":742,"height":13}},{"id":"d7338ee9-4974-4913-aaa9-06f73058e659","block_type":"box","text":"prudentially regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to","page_number":105,"box":{"x":117,"y":571,"width":764,"height":12}},{"id":"e725f462-9a42-4a0f-bcec-d76cbfa5d920","block_type":"box","text":"include in their derivatives contracts and certain other financial contracts, terms that delay or restrict","page_number":105,"box":{"x":117,"y":586,"width":745,"height":13}},{"id":"681c2ffd-5cac-4dfc-b064-6ee1e157fe60","block_type":"box","text":"the rights of counterparties (such as the Funds) to terminate such contracts, foreclose upon collateral,","page_number":105,"box":{"x":116,"y":602,"width":761,"height":12}},{"id":"b95bd364-7b2c-4ff7-bb34-617662356a11","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the prudentially","page_number":105,"box":{"x":116,"y":617,"width":725,"height":13}},{"id":"bf913499-ce4a-4360-95a8-3475e5b64577","block_type":"box","text":"regulated entity and/or its affiliates are subject to certain types of resolution or insolvency proceedings.","page_number":105,"box":{"x":117,"y":633,"width":765,"height":12}},{"id":"506dd33a-0cd2-4fa8-ab36-cca31cddf06b","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":105,"box":{"x":116,"y":648,"width":746,"height":13}},{"id":"beeb4808-0f64-4aba-9fd6-fefbf3a69538","block_type":"box","text":"counterparties located in those jurisdictions. In particular, in the United Kingdom and the European","page_number":105,"box":{"x":116,"y":664,"width":731,"height":12}},{"id":"886ae71b-f878-4407-b349-6b41f336d453","block_type":"box","text":"Union, governmental authorities could reduce, eliminate or convert to equity the liabilities to a Fund of","page_number":105,"box":{"x":117,"y":680,"width":753,"height":12}},{"id":"3c9f3712-ff43-4299-9f7f-fd7a6dbfd500","block_type":"box","text":"a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":105,"box":{"x":116,"y":695,"width":763,"height":12}},{"id":"60662fff-1ec6-4ca4-aa42-288832ec5403","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely","page_number":105,"box":{"x":116,"y":711,"width":726,"height":12}},{"id":"10eef6a6-01c0-485b-83fd-19f9fc4db33c","block_type":"box","text":"affect a Fund’s ability to terminate existing derivatives contracts, exercise default rights or satisfy","page_number":105,"box":{"x":116,"y":726,"width":716,"height":12}},{"id":"211dd40b-0ba4-4b3d-a24c-e623d5e5a0bc","block_type":"box","text":"obligations owed to it with collateral received under such contracts.","page_number":105,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"8e5b3673-b728-4a02-8ec4-50aa0c0dcec4","block_type":"box","text":"Risk Factors in Derivatives.","page_number":105,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"84b334f0-90d4-454f-9b37-5cb27b158639","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":105,"box":{"x":116,"y":798,"width":620,"height":12}},{"id":"01a0c63b-833e-4f3e-9f56-2e04b96a0c08","block_type":"box","text":"Correlation Risk —","page_number":105,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"34e4f7a0-e6e2-4b9d-955d-2fdb6114ead9","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the","page_number":105,"box":{"x":240,"y":831,"width":631,"height":12}},{"id":"023f2b40-19df-443e-9db7-55aab28eb539","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":105,"box":{"x":116,"y":846,"width":765,"height":13}},{"id":"95432627-5afe-44ec-b8a6-754ef14862ba","block_type":"box","text":"Fund seeks exposure. There are a number of factors which may prevent a derivative instrument from","page_number":105,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"0f377dfc-2fd6-4e3b-9ebe-33cb86bbc201","block_type":"box","text":"achieving the desired correlation (or inverse correlation) with an underlying asset, rate or index, such","page_number":105,"box":{"x":116,"y":877,"width":753,"height":13}},{"id":"1718a465-1eb0-4eaf-ae2a-665177b440c4","block_type":"box","text":"II-19","page_number":105,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c0450a52-0bc4-44cf-baa1-f8899c534822","block_type":"box","text":"NM1026U-6042785-105/259","page_number":105,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"40a4bee8-fa0f-470a-9a29-54ff7386a2ae","block_type":"box","text":"as the impact of fees, expenses and transaction costs, the timing of pricing, and disruptions or illiquidity","page_number":106,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"7770b02c-4799-4a88-9b65-32674a6af9a2","block_type":"box","text":"in the markets for such derivative instrument.","page_number":106,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"4ab85b12-9c55-4024-ae19-a1fc76116b98","block_type":"box","text":"Counterparty Risk —","page_number":106,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"3253a454-2f2e-4bae-938c-4b5062d7e100","block_type":"box","text":"—","page_number":106,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"f7efa518-e890-46c4-8365-b5144f724bc6","block_type":"box","text":"the risk that a derivatives transaction counterparty will be unable or unwilling to","page_number":106,"box":{"x":277,"y":134,"width":590,"height":12}},{"id":"52608afc-d227-4911-af55-144c751a75bd","block_type":"box","text":"make payments or otherwise honor its obligations to a Fund and the related risks of having","page_number":106,"box":{"x":117,"y":149,"width":678,"height":12}},{"id":"49ea9b57-4f76-447e-9f20-501ab5853a62","block_type":"box","text":"concentrated exposure to such a counterparty. In particular, derivatives traded in OTC markets often","page_number":106,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"ab8a2dc5-90b5-4b85-a737-b311a3e011d6","block_type":"box","text":"are not guaranteed by an exchange or clearing corporation and often do not require payment of","page_number":106,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"ed0cfa4b-9b9c-408f-aca1-db85f3baaebd","block_type":"box","text":"margin, and to the extent that the Fund has unrealized gains in such instruments or has deposited","page_number":106,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"4c8b8824-ac65-4ab4-ba56-64a73aa5f44d","block_type":"box","text":"collateral with its counterparties the Fund is at risk that its counterparties will become bankrupt or","page_number":106,"box":{"x":116,"y":211,"width":725,"height":12}},{"id":"4b44e522-aa13-4305-b271-d8e8b96fe040","block_type":"box","text":"otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":106,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"745017fb-4f9f-4ed9-b93f-8f679551249c","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or","page_number":106,"box":{"x":116,"y":242,"width":768,"height":12}},{"id":"359c7da1-88cf-45b5-9195-587dd001ab22","block_type":"box","text":"that have provided the Fund with a third-party guaranty or other credit support. When a Fund enters","page_number":106,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"0a4dd762-2d37-4075-9036-059347dc73bf","block_type":"box","text":"into a derivatives transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is","page_number":106,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"75ea4eeb-13d5-4665-9e7a-90ed342d3bc0","block_type":"box","text":"subject to the credit risk of the clearing house and the clearing member through which it holds its","page_number":106,"box":{"x":116,"y":289,"width":722,"height":12}},{"id":"440ce520-5e9b-4efa-a993-51906f447867","block_type":"box","text":"cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared","page_number":106,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"36cd8cf5-c4ce-4d54-8b91-fbf5b397632f","block_type":"box","text":"is concentrated in a few clearing houses and increasingly fewer clearing members. It is not clear how","page_number":106,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"282457df-25de-4834-87d6-131a903f5545","block_type":"box","text":"an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a","page_number":106,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"d3be45e0-2a0c-47fb-b78f-9620f8fc9f30","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":106,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"cad463cd-6676-4250-aadf-ccaed672a490","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":106,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"faa9dde0-396c-42e9-a276-e2d9101b0c6a","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":106,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"9f31fb43-8ad4-4811-9180-7e8c2e872855","block_type":"box","text":"cleared derivatives. Although a clearing member is required to segregate assets from customers with","page_number":106,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"8fefc990-0422-49a4-ad2b-f7f5619b642b","block_type":"box","text":"respect to cleared derivatives positions from the clearing member’s proprietary assets, if a clearing","page_number":106,"box":{"x":117,"y":413,"width":736,"height":12}},{"id":"03d6bf69-671a-441c-9b45-98fdf0270fe4","block_type":"box","text":"member does not comply with the applicable regulations, or in the event of fraud or misappropriation of","page_number":106,"box":{"x":117,"y":428,"width":768,"height":12}},{"id":"2195e1e0-a749-41fe-829e-bb4f7d8ea329","block_type":"box","text":"customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an","page_number":106,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"14b3e2f4-011c-44ce-9a4a-086578e65b74","block_type":"box","text":"insolvency of the clearing member with respect to the assets held by the clearing member.","page_number":106,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"5fa79755-5ac1-4662-9e42-ac8cf0502f86","block_type":"box","text":"Credit Risk —","page_number":106,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"1864e7cc-39dc-414e-9b76-40ab4ab4a589","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be","page_number":106,"box":{"x":203,"y":490,"width":668,"height":12}},{"id":"cd1b0ee0-54f4-4b10-b4af-c4e63961baf5","block_type":"box","text":"able to honor its financial obligations.","page_number":106,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"7091f0b7-7fe2-4c32-83a2-50c268e0b7d9","block_type":"box","text":"Currency Risk —","page_number":106,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"a5bc464a-f8c2-40aa-8293-0ab8789e2439","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely","page_number":106,"box":{"x":226,"y":537,"width":625,"height":12}},{"id":"add0b38a-5310-4bd2-9c9c-1e1c2b129204","block_type":"box","text":"affect the value (in U.S. dollar terms) of a derivative.","page_number":106,"box":{"x":116,"y":552,"width":392,"height":12}},{"id":"7855f7ad-eacf-47f3-98c7-d10c864ff866","block_type":"box","text":"Illiquidity Risk —","page_number":106,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"38747ce3-685a-4ae5-b564-657431ea686e","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at","page_number":106,"box":{"x":222,"y":583,"width":644,"height":12}},{"id":"819794c6-7c3e-4795-9484-8ac0ef70e7a6","block_type":"box","text":"the time or at the price desired by a Fund in connection with payments of margin, collateral, or","page_number":106,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"3ceeada1-40b6-402a-9998-60a466d03c6b","block_type":"box","text":"settlement payments. There can be no assurance that a Fund will be able to unwind or offset a","page_number":106,"box":{"x":116,"y":614,"width":708,"height":12}},{"id":"65f0b763-8072-4f88-8f59-826c813d25cc","block_type":"box","text":"derivative at its desired price, in a secondary market or otherwise. It may, therefore, not be possible for","page_number":106,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"769a352c-05c2-48ac-b26c-658863d69c15","block_type":"box","text":"the Fund to unwind its position in a derivative without incurring substantial losses (if at all). Certain","page_number":106,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"701f0f69-00db-47c1-a829-a80946b68617","block_type":"box","text":"OTC derivatives, including swaps and OTC options, involve substantial illiquidity risk. Illiquidity may","page_number":106,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"8941761c-64a2-466b-82fc-15cd5ee9e730","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":106,"box":{"x":116,"y":676,"width":723,"height":11}},{"id":"51b0b3ee-76b3-4f30-b751-7f08f38c42be","block_type":"box","text":"therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":106,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"87a96f17-b24e-4ad5-9aff-5bf134ab7040","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which","page_number":106,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"5632970c-71fc-434f-bf31-fbad0e65ed30","block_type":"box","text":"the Manager anticipates the Fund can receive on each business day at least two independent bids or","page_number":106,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"b4015080-f846-4671-bbbe-21a21a4120c6","block_type":"box","text":"offers, unless a quotation from only one dealer is available, in which case that dealer’s quotation may","page_number":106,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"2276dd9f-eef3-4087-9ca4-31af79d5240d","block_type":"box","text":"be used. The illiquidity of the derivatives markets may be due to various factors, including congestion,","page_number":106,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"71d2e55a-f064-4fe4-875a-7c49f89c97e0","block_type":"box","text":"disorderly markets, limitations on deliverable supplies, the participation of speculators, government","page_number":106,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"d28f42a2-3d6b-4cdb-b99c-8ce3c100e8f0","block_type":"box","text":"regulation and intervention, and technical and operational or system failures. In addition, the liquidity of","page_number":106,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"e12ae1f3-912d-46ec-8ed1-fcae287061a2","block_type":"box","text":"a market in an exchange-traded derivative contract may be adversely affected by “daily price","page_number":106,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"d10f6da8-0145-4a09-8a31-bb4eaf67a982","block_type":"box","text":"fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":106,"box":{"x":116,"y":816,"width":747,"height":12}},{"id":"f29bdfe1-205b-4921-9b0e-ed4383c460cd","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract,","page_number":106,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"86dee8b8-bee5-4944-8fd8-ca4912926412","block_type":"box","text":"no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open","page_number":106,"box":{"x":117,"y":847,"width":717,"height":12}},{"id":"4dbdb93e-0c8f-4f57-853b-0a3628b702ee","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":106,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"0f1da93e-55fa-4885-a8ea-cbff7439df40","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":106,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"2eeb9546-3548-4b7d-8fc2-dc5d6df2dd81","block_type":"box","text":"II-20","page_number":106,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5243d4ba-1784-4a92-b922-ac0f01ef8451","block_type":"box","text":"NM1026U-6042785-106/259","page_number":106,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"03906340-ebee-4d80-9df9-deb9056fad65","block_type":"box","text":"Fund would continue to be required to make daily cash payments of variation margin in the event of","page_number":107,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"c61aa057-e93c-44d9-b47f-21a4bd22df50","block_type":"box","text":"adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell","page_number":107,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"28627ba8-0bca-44fd-b856-eded3f8b5f5a","block_type":"box","text":"portfolio securities to meet daily variation margin requirements at a time when it may be","page_number":107,"box":{"x":117,"y":118,"width":654,"height":12}},{"id":"026d96c7-6573-44c7-b1e8-2283afefd2ed","block_type":"box","text":"disadvantageous to do so.","page_number":107,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"fe6ed5c4-62b3-4d50-9726-b970b38e2fed","block_type":"box","text":"Index Risk","page_number":107,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"42fa6241-3832-473a-8254-040fc3337f2b","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":107,"box":{"x":194,"y":166,"width":656,"height":12}},{"id":"92c49564-ca5c-4d0c-8b6f-e6eccccde7aa","block_type":"box","text":"associated with changes in that index. If the index changes, the Fund could receive lower interest","page_number":107,"box":{"x":116,"y":181,"width":728,"height":12}},{"id":"76a663b1-f186-4b27-b4a9-e79a7dae3b3b","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":107,"box":{"x":117,"y":197,"width":762,"height":12}},{"id":"42c36a1f-4fdd-4e26-b798-5dc1dc061757","block_type":"box","text":"for such derivative.","page_number":107,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"46587443-d787-44c7-b118-16309414dc17","block_type":"box","text":"Legal Risk","page_number":107,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"0bc97e5a-59e9-4532-a50b-13cf678156c9","block_type":"box","text":"k — the risk of insufficient documentation, insufficient capacity or authority of counterparty, or","page_number":107,"box":{"x":194,"y":245,"width":689,"height":12}},{"id":"7ad7bc96-bed2-4685-8b4e-c6dc59216b88","block_type":"box","text":"legality or enforceability of a contract.","page_number":107,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"0655dcf3-ce6a-4e1c-861e-ad3b9da4a9c6","block_type":"box","text":"Leverage Risk —","page_number":107,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"facb0b29-8183-49b3-bd3a-61fa41aa14b2","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and","page_number":107,"box":{"x":228,"y":293,"width":619,"height":12}},{"id":"8326f80c-a463-4e60-99d1-1c1366d780c4","block_type":"box","text":"losses. Relatively small market movements may result in large changes in the value of a derivatives","page_number":107,"box":{"x":117,"y":308,"width":744,"height":12}},{"id":"fabe8cf8-3e1c-443c-9ad9-b951bee16959","block_type":"box","text":"position and can result in losses that greatly exceed the amount originally invested.","page_number":107,"box":{"x":117,"y":324,"width":621,"height":12}},{"id":"257eb01e-2f6c-463f-a014-9b6df7bbce57","block_type":"box","text":"Market Risk —","page_number":107,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"babbed92-a754-4f88-b7a2-0244ce3df894","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to","page_number":107,"box":{"x":209,"y":356,"width":653,"height":12}},{"id":"ef59c640-8d16-4245-819c-e826428962ec","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":107,"box":{"x":116,"y":371,"width":719,"height":13}},{"id":"52d118dd-d53c-455d-84c9-bc7decd5802a","block_type":"box","text":"adverse movement, a Fund may be required to pay substantial additional margin to maintain its","page_number":107,"box":{"x":116,"y":387,"width":713,"height":12}},{"id":"920432db-85b5-4f4c-97f9-8a72addc570f","block_type":"box","text":"position or the Fund’s returns may be adversely affected.","page_number":107,"box":{"x":117,"y":402,"width":427,"height":13}},{"id":"629d15f9-9fbc-4920-88a6-20a26d5b139e","block_type":"box","text":"Operational Risk","page_number":107,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"6248a5be-c6fd-4e5d-999e-a1d4ebabcb0a","block_type":"box","text":"k — the risk related to potential operational issues, including documentation issues,","page_number":107,"box":{"x":240,"y":435,"width":616,"height":12}},{"id":"b593631f-39f1-44c4-a16b-633c83035b19","block_type":"box","text":"settlement issues, systems failures, inadequate controls and human error.","page_number":107,"box":{"x":116,"y":450,"width":555,"height":12}},{"id":"048f7bbc-37a3-4aad-82c8-6e7a2a52e558","block_type":"box","text":"Valuation Risk —","page_number":107,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"3bb59f1c-3421-49de-8d58-c98b6f8c0be3","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the","page_number":107,"box":{"x":228,"y":483,"width":614,"height":12}},{"id":"96b8d8a0-bfe7-46d5-b398-ee0a0f33b372","block_type":"box","text":"market. This is possible especially in times of market distress, since many market participants may be","page_number":107,"box":{"x":117,"y":498,"width":760,"height":12}},{"id":"366079ed-fd48-4758-9b52-068bb08ca499","block_type":"box","text":"reluctant to purchase complex instruments or quote prices for them.","page_number":107,"box":{"x":117,"y":514,"width":507,"height":12}},{"id":"583c50ac-99da-428c-b0fc-f432b63bbf03","block_type":"box","text":"Volatility Risk —","page_number":107,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"5501d810-03f4-4fc0-968a-a7a98e1b25af","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time","page_number":107,"box":{"x":220,"y":546,"width":619,"height":12}},{"id":"b2938d46-0be2-4c7c-a2cf-c5bd1bb3fa2c","block_type":"box","text":"period.","page_number":107,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"008050ba-f65f-4026-a312-bcd71d7d7dac","block_type":"box","text":"Types of Derivatives Transactions.","page_number":107,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"d8ff96c0-a9f6-44e2-b51e-3ea9d974cb59","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and","page_number":107,"box":{"x":116,"y":618,"width":715,"height":12}},{"id":"228c799b-cc36-4afd-a9b8-fd9962cfdc88","block_type":"box","text":"restrictions, including the following:","page_number":107,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"e1d2b556-8bbd-4819-b1f8-e639d8bbaeff","block_type":"box","text":"Futures.","page_number":107,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"da56d9c9-0f1e-4340-9bce-f6197eb57196","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are","page_number":107,"box":{"x":116,"y":690,"width":713,"height":12}},{"id":"71a4120c-0c71-4ce5-9285-918669e8be76","block_type":"box","text":"standardized, exchange-traded contracts that require a purchaser to take delivery, and a seller to make","page_number":107,"box":{"x":116,"y":705,"width":767,"height":12}},{"id":"fe3a93d0-5821-4bcd-8575-d26c8c10ddce","block_type":"box","text":"delivery, of a specified amount of an asset at a specified future date and price. Upon purchasing or","page_number":107,"box":{"x":116,"y":721,"width":734,"height":12}},{"id":"8af56008-808c-4860-a5d9-ff03c7d05e72","block_type":"box","text":"selling a futures contract, a Fund is required to deposit initial margin equal to a percentage of the","page_number":107,"box":{"x":116,"y":736,"width":718,"height":12}},{"id":"4a3eca0e-dec3-412b-9de3-5060c7a5bcab","block_type":"box","text":"contract value. Futures contracts are marked to market daily for the duration of the contract, and the","page_number":107,"box":{"x":116,"y":752,"width":743,"height":12}},{"id":"9712cfb8-a381-41fb-9b06-ca017c5c5cb8","block_type":"box","text":"Fund will either post additional margin or be entitled to a payment, as applicable, based on the","page_number":107,"box":{"x":117,"y":767,"width":699,"height":12}},{"id":"32208f0b-79f8-4ac9-be6a-f58aa73532da","block_type":"box","text":"mark-to-market movement of the contract.","page_number":107,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"47bcd29f-d192-4f0b-bc5f-37f865b583b1","block_type":"box","text":"A Fund may sell a futures contract prior to the completion","page_number":107,"box":{"x":116,"y":815,"width":425,"height":12}},{"id":"19a452b2-8b2d-4573-a6ae-7f0cc11734c7","block_type":"box","text":"of its term to limit its risk of loss from a","page_number":107,"box":{"x":548,"y":815,"width":284,"height":10}},{"id":"6ce9242f-77d2-4c7b-8602-aed6918a3177","block_type":"box","text":"decline in the market value of portfolio holdings correlated with the futures contract. However, in the","page_number":107,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"43109e8b-35ca-444f-9213-64b83ddb0f72","block_type":"box","text":"event the market value of the portfolio holdings correlated with the futures contract increases rather","page_number":107,"box":{"x":116,"y":846,"width":742,"height":12}},{"id":"fe9f1ea3-855e-48a9-a643-b4e66992dc33","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":107,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"a0e7fc5b-4d0f-45cd-b5ed-f95d47a4dde2","block_type":"box","text":"holdings than would have been realized without the purchase of the futures contract.","page_number":107,"box":{"x":117,"y":877,"width":631,"height":12}},{"id":"bc9e13a0-986b-47f1-abd8-f2146aff9e81","block_type":"box","text":"II-21","page_number":107,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"694a1188-ca35-43fd-944d-bd8ea784455a","block_type":"box","text":"NM1026U-6042785-107/259","page_number":107,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f249f64-4c0a-4b6e-8760-6c3423557805","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing","page_number":108,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"5b45dfbc-ea71-41c9-87d3-d311b0f04a5a","block_type":"box","text":"securities or commodities directly. In the event that such securities or commodities decline in value or a","page_number":108,"box":{"x":116,"y":103,"width":772,"height":12}},{"id":"94945e7f-6851-4692-a600-2141b16d2bf4","block_type":"box","text":"Fund determines not to complete an anticipatory hedge transaction relating to a futures contract,","page_number":108,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"aa6faac2-87ee-4995-aaf3-3b0122cecf55","block_type":"box","text":"however, the Fund may realize a loss relating to the futures position.","page_number":108,"box":{"x":117,"y":134,"width":512,"height":12}},{"id":"ee8851c6-affa-4982-ab53-1d9b05689482","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may","page_number":108,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"051a6e20-fd34-4194-81cd-b44fcf04d54e","block_type":"box","text":"be required to liquidate positions or may not be able to fully implement trading instructions. Any such","page_number":108,"box":{"x":117,"y":181,"width":750,"height":12}},{"id":"e9536b81-7c35-49bf-89c8-95c6d718cd3c","block_type":"box","text":"liquidation or limited implementation could result in substantial costs to a Fund. See “— Regulation of","page_number":108,"box":{"x":117,"y":196,"width":754,"height":13}},{"id":"d7d8e219-55f7-44db-82e2-05e7e0779c92","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":108,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"6597b041-d8aa-4db1-9224-ef65d17b10d5","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including","page_number":108,"box":{"x":116,"y":244,"width":706,"height":12}},{"id":"c99635d0-6c83-44d9-9612-28ab1d4431c8","block_type":"box","text":"financial futures and stock indices. Generally, these strategies would be used under the same market","page_number":108,"box":{"x":116,"y":259,"width":757,"height":13}},{"id":"3d22a809-4a4f-4fb6-bd72-353c0e094332","block_type":"box","text":"and market sector conditions (","page_number":108,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"b40e6ed9-9693-409a-ae54-9e780a003fe4","block_type":"box","text":"i.e.","page_number":108,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"bf65af4d-736f-4243-a96a-2fc654b17e48","block_type":"box","text":", conditions relating to specific types of investments) in which the","page_number":108,"box":{"x":365,"y":275,"width":485,"height":12}},{"id":"de3d776f-5ec4-4e65-a209-c14ec0e77e3d","block_type":"box","text":"Fund entered into futures transactions. A Fund may purchase put options or write call options on","page_number":108,"box":{"x":117,"y":290,"width":720,"height":13}},{"id":"dc0ec56b-be98-4d56-bb76-ad015c1dcb8f","block_type":"box","text":"futures contracts and stock indices in lieu of selling the underlying futures contract in anticipation of a","page_number":108,"box":{"x":116,"y":306,"width":754,"height":12}},{"id":"957b93ba-9648-47da-ab4e-69d178964f94","block_type":"box","text":"decrease in the market value of its securities. Similarly, a Fund can purchase call options, or write put","page_number":108,"box":{"x":116,"y":321,"width":759,"height":13}},{"id":"24253180-0a6b-4dd2-8ba7-2753a6d69d28","block_type":"box","text":"options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":108,"box":{"x":116,"y":337,"width":705,"height":12}},{"id":"d77bea52-6dda-467d-bab8-d51e45ce28a2","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of","page_number":108,"box":{"x":116,"y":352,"width":707,"height":13}},{"id":"3f3e8200-9371-44ac-97f6-07b61800d074","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":108,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"a15acb90-f160-4fd7-bd44-c9c20a78cde2","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to","page_number":108,"box":{"x":116,"y":400,"width":748,"height":12}},{"id":"ad780da9-d3a4-4a8a-b333-06df4eb973fc","block_type":"box","text":"futures contracts. These instruments may take a variety of forms, such as debt securities with interest","page_number":108,"box":{"x":116,"y":415,"width":759,"height":13}},{"id":"4098ff7c-96c5-446e-9bdd-69b55e23fc7c","block_type":"box","text":"or principal payments determined by reference to the value of a security, an index of securities or a","page_number":108,"box":{"x":116,"y":431,"width":740,"height":12}},{"id":"9b036c77-e9be-4a26-8378-37c7eca9f26e","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":108,"box":{"x":116,"y":446,"width":764,"height":13}},{"id":"0dfce7d4-1333-481e-bc00-b0f04eed4b70","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":108,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"8b10abec-a147-4cd6-b471-48fbb8f7d228","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage","page_number":108,"box":{"x":117,"y":494,"width":751,"height":12}},{"id":"41ca9424-861f-4a89-8997-29220606a04a","block_type":"box","text":"risk, illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the","page_number":108,"box":{"x":117,"y":509,"width":726,"height":13}},{"id":"e53e200c-addb-4932-95e8-9d671bbfaee6","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":108,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"429b8cf4-05d9-4588-b010-098f72c895ca","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a","page_number":108,"box":{"x":117,"y":557,"width":771,"height":12}},{"id":"fa43e2e7-3254-47ff-a703-24ef6da88b30","block_type":"box","text":"limit is set by a regulator, such as a government entity, on the total amount of specific greenhouse","page_number":108,"box":{"x":117,"y":572,"width":732,"height":13}},{"id":"0f5293f2-c279-414e-bcdc-0a4f42988258","block_type":"box","text":"gases, such as CO2, that can be emitted by regulated entities, such as manufacturers or energy","page_number":108,"box":{"x":116,"y":588,"width":720,"height":12}},{"id":"c9dec8e6-d4b1-4280-b96f-dde56bfe08d3","block_type":"box","text":"producers. The regulator then may issue or sell individual “emission allowances” to regulated entities,","page_number":108,"box":{"x":117,"y":603,"width":756,"height":13}},{"id":"c0616dd2-2584-4ab4-a88e-5c6b549030dc","block_type":"box","text":"which can then be traded on the open market. Commodity futures contracts linked to the value of","page_number":108,"box":{"x":116,"y":619,"width":725,"height":12}},{"id":"c8c83648-c0e8-4356-ac1b-ace3e366d7f3","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":108,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"136e064a-488c-4975-8e12-cdb9c5a77a42","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":108,"box":{"x":116,"y":666,"width":756,"height":13}},{"id":"ddae116a-b694-4c02-9409-27a3ea05da74","block_type":"box","text":"demand for carbon futures contracts. Changes in law, market conditions and expectations, position","page_number":108,"box":{"x":116,"y":682,"width":734,"height":12}},{"id":"015ba3df-0856-480f-8519-f6972ba0ff25","block_type":"box","text":"limits, collateral requirements, and other factors each can impact the supply of and demand for carbon","page_number":108,"box":{"x":117,"y":697,"width":758,"height":13}},{"id":"d8ffc3dd-2e74-42b5-aadf-011973e1269f","block_type":"box","text":"futures contracts. The market for carbon futures contracts is still developing and may be subject to","page_number":108,"box":{"x":116,"y":713,"width":729,"height":12}},{"id":"f2c53243-afb6-48f9-9985-41c93d074e3c","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":108,"box":{"x":117,"y":728,"width":742,"height":13}},{"id":"f37d0894-ab66-4c68-8f86-0b98248d6ca2","block_type":"box","text":"desired price. Market disruptions or volatility can also make it difficult to find a counterparty willing to","page_number":108,"box":{"x":116,"y":744,"width":742,"height":12}},{"id":"7db91725-1a53-45d4-ac1c-31603be84d0e","block_type":"box","text":"transact at a reasonable price and sufficient size.","page_number":108,"box":{"x":116,"y":759,"width":363,"height":12}},{"id":"e1007ef7-5007-451a-a04b-6278a6bb642d","block_type":"box","text":"Swap Agreements.","page_number":108,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"752001ab-bf6b-4d49-9a85-ef957d1da356","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap","page_number":108,"box":{"x":116,"y":815,"width":699,"height":12}},{"id":"5fad3f65-6a41-4eb2-acea-d90e8a7d4c4c","block_type":"box","text":"agreements are OTC contracts entered into primarily by financial institutions and institutional investors","page_number":108,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"2260f128-d881-418b-85e6-df25e523c01b","block_type":"box","text":"which may or may not be cleared by a central clearinghouse. In a standard “swap” transaction, two","page_number":108,"box":{"x":116,"y":846,"width":738,"height":12}},{"id":"9aa63859-278f-4421-8d8b-e3a3122aff5b","block_type":"box","text":"parties agree to exchange the returns earned or realized from one or more underlying assets or rates","page_number":108,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"38d3b440-1ccb-4429-ab69-b777888c81b5","block_type":"box","text":"of return, which may be adjusted for an interest factor. The gross returns to be exchanged or","page_number":108,"box":{"x":116,"y":877,"width":693,"height":12}},{"id":"ebd85b8c-7c3a-47a3-99f6-ea9bf2f9cdd1","block_type":"box","text":"II-22","page_number":108,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"1a582e0c-fd8d-49f4-a29a-7135c6d079c7","block_type":"box","text":"NM1026U-6042785-108/259","page_number":108,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0ab7b5b7-7ec7-4652-92fa-1b324358d483","block_type":"box","text":"“swapped” between the parties are generally calculated with respect to a “notional amount,”","page_number":109,"box":{"x":116,"y":87,"width":684,"height":12}},{"id":"67bce5fa-a17c-476b-b95a-4a042d02ab6d","block_type":"box","text":"e.g.","page_number":109,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"391aa1d4-d3ad-476e-bff4-5a22ea85f86b","block_type":"box","text":", the","page_number":109,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"d9c5f1df-cac9-4bae-b5d1-45295e5933ed","block_type":"box","text":"return or increase in value of a particular dollar amount invested at a particular interest rate, in a","page_number":109,"box":{"x":117,"y":102,"width":716,"height":12}},{"id":"2746cab4-12aa-44f2-81df-ccb18df9273a","block_type":"box","text":"particular foreign currency, or in a “basket” of securities representing a particular index. The notional","page_number":109,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"cbf88839-3a13-467a-af27-f522c5c5d46b","block_type":"box","text":"amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":109,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"19c23bae-ff09-4867-8985-694b1fd3d144","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will","page_number":109,"box":{"x":116,"y":149,"width":736,"height":12}},{"id":"37a19023-99b9-44f6-8389-b569d4fdaffe","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":109,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"0213775b-f16c-46fe-b27e-a8ca04a56185","block_type":"box","text":"relative values of the positions held by each party to the agreement. Swaps that are not cleared involve","page_number":109,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"21034e89-f6e3-40ae-91c0-241955cd2b6a","block_type":"box","text":"substantial counterparty risk. A Fund will typically attempt to mitigate this counterparty risk by entering","page_number":109,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"6d963aff-20e1-4e5f-bcb3-143a1bf30b39","block_type":"box","text":"into swap agreements only with creditworthy entities that have substantial capital or that have provided","page_number":109,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"75ef1299-529d-4730-aa8c-39208c9d44bc","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":109,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"a410394a-852d-4823-9ef6-6bbdcf9ca7b0","block_type":"box","text":"may be restricted by the tax rules applicable to registered investment companies.","page_number":109,"box":{"x":117,"y":242,"width":607,"height":12}},{"id":"9865a7c4-789a-449e-be17-4e449592efc3","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":109,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"2087e4e7-4bc5-415c-8aca-db0170f144aa","block_type":"box","text":"Certain Funds may enter into credit default swaps and","page_number":109,"box":{"x":450,"y":273,"width":389,"height":12}},{"id":"c36d439a-9f3f-4f00-9514-c38c1dd1a06c","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":109,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"fff3048b-fb0f-4252-92b7-ed542d4664ca","block_type":"box","text":"zed agreements in which the protection “buyer” pays","page_number":109,"box":{"x":503,"y":289,"width":378,"height":12}},{"id":"556b3ea8-0cac-4f8a-8fb5-2f3f2bf06153","block_type":"box","text":"the protection “seller” an up-front payment, or a periodic","page_number":109,"box":{"x":116,"y":304,"width":400,"height":12}},{"id":"d6f1a2d2-40f9-4829-944b-f55898f7aea3","block_type":"box","text":"stream of payments, over the term of the contract,","page_number":109,"box":{"x":517,"y":304,"width":360,"height":12}},{"id":"4c40c604-5273-494d-ba26-c2e7ce7d2602","block_type":"box","text":"provided generally that no credit event on a reference ob","page_number":109,"box":{"x":117,"y":320,"width":401,"height":12}},{"id":"063fe554-9e8e-4970-b0bc-1d0c20006629","block_type":"box","text":"ligation has occurred. If a credit event occurs, the","page_number":109,"box":{"x":520,"y":320,"width":353,"height":12}},{"id":"643fd1c8-5531-4331-8734-0c5be84771fe","block_type":"box","text":"seller generally must pay the buyer the difference","page_number":109,"box":{"x":116,"y":335,"width":355,"height":12}},{"id":"d0b0ea69-acd7-48d1-960f-411d27a7a84e","block_type":"box","text":"between the notional amount of the contract and the","page_number":109,"box":{"x":472,"y":335,"width":375,"height":10}},{"id":"248a5c30-4fa3-4d83-b4a6-5a5461cfef8f","block_type":"box","text":"value of a portfolio of securities issued by the refere","page_number":109,"box":{"x":116,"y":351,"width":357,"height":12}},{"id":"0842d05b-4ac0-4954-bd55-b558656e02b1","block_type":"box","text":"rence entity. A Fund may be either the buyer or seller in","page_number":109,"box":{"x":473,"y":351,"width":395,"height":12}},{"id":"4d1aed61-2fce-4b2c-8c57-ef8ee8d40ea3","block_type":"box","text":"the transaction. The Funds may enter into credit default","page_number":109,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"bff3b802-ecb8-4c16-b2e5-a7f7a03a7bb3","block_type":"box","text":"swaps that reference the obligations of a single","page_number":109,"box":{"x":515,"y":366,"width":338,"height":12}},{"id":"cc05dcc4-2348-4846-8ee9-87d10531837d","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":109,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"1e162454-88d0-4d31-a683-5843306f9ada","block_type":"box","text":"gations of entities that make up an index (“index CDS”). References to","page_number":109,"box":{"x":381,"y":382,"width":504,"height":12}},{"id":"efe85a55-43fc-426f-881a-0d10d01636d1","block_type":"box","text":"“credit default swaps” shall collectively refer to single-name CDS and index CDS.","page_number":109,"box":{"x":116,"y":397,"width":579,"height":12}},{"id":"84a0d3d5-36ec-4975-8784-4fb9277b8e8b","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not","page_number":109,"box":{"x":117,"y":428,"width":706,"height":12}},{"id":"d051c315-938e-4335-b441-9c2fc01c83ec","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":109,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"c0368ed8-f5de-4a0d-9500-e1b8797b7883","block_type":"box","text":"are deliverable under a credit default swap, the Fund is exposed to the risk that deliverable securities","page_number":109,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"5aef85bb-59f3-43c7-84dc-9002e2f31c9d","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":109,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"d62b0a1e-a619-45d0-9e8c-4659db2cb56d","block_type":"box","text":"in a so-called “short squeeze.” In certain instances of issuer defaults or restructurings, it has been","page_number":109,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"c2605b48-7900-45a0-adf2-caa943d60aa8","block_type":"box","text":"unclear under the standard industry documentation for credit default swaps whether or not a “credit","page_number":109,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"6e53903d-b909-49ca-a371-8d49e1eeb79a","block_type":"box","text":"event” triggering the seller’s payment obligation had occurred. Certain initiatives adopted by derivatives","page_number":109,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"4a407239-f1bc-436b-8e2f-c05f960e5a92","block_type":"box","text":"market participants, including the International Swaps and Derivatives Association (“ISDA”), are","page_number":109,"box":{"x":117,"y":537,"width":713,"height":12}},{"id":"b768dc2e-368c-44d9-a9f3-29c6e9a49e45","block_type":"box","text":"designed to implement uniform settlement terms into standard credit default swap documentation, as","page_number":109,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"7ecb41c3-ed23-4db1-8030-380950dab8b3","block_type":"box","text":"well as refine the practices for the transparent conduct of the credit default swap market generally.","page_number":109,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"1ed48961-6371-4d94-ae0f-32b3c036cd33","block_type":"box","text":"Among these initiatives are the ISDA Credit Derivatives Determination Committee and the","page_number":109,"box":{"x":116,"y":583,"width":672,"height":12}},{"id":"95108fde-722e-4a8a-9723-ac09b9c88102","block_type":"box","text":"implementation of market-wide cash settlement protocols applicable to all market-standard credit","page_number":109,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"f1d8a16b-8b11-48b0-ac63-c2c79acd0eb6","block_type":"box","text":"default swaps. These initiatives are intended to reduce both the uncertainty as to the occurrence of","page_number":109,"box":{"x":116,"y":614,"width":739,"height":12}},{"id":"700181de-9d44-4ec0-a4f0-076c2f4e943d","block_type":"box","text":"credit events and the risk of a “short squeeze” by providing that the ISDA Credit Derivatives","page_number":109,"box":{"x":116,"y":630,"width":684,"height":12}},{"id":"02bc504d-cbb2-4f7b-8277-87a99d24cf46","block_type":"box","text":"Determinations Committee will make determinations as to whether a credit event has occurred,","page_number":109,"box":{"x":117,"y":645,"width":710,"height":11}},{"id":"88d17522-c05c-4dec-afe6-faa3fd1ae102","block_type":"box","text":"establish an auction to determine a settlement price and identify the deliverable securities for purposes","page_number":109,"box":{"x":116,"y":661,"width":763,"height":12}},{"id":"603ed42a-291f-4fb6-b830-a297d0cdcd2a","block_type":"box","text":"of the auction, although the ISDA Credit Derivatives Determinations Committee may in certain limited","page_number":109,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"7c0ab9ed-6d60-450a-b889-b50a4ee7086b","block_type":"box","text":"circumstances refrain from doing so. In the event the ISDA Credit Derivatives Determinations","page_number":109,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"0145d95a-3343-4577-8042-425584b3c449","block_type":"box","text":"Committee cannot reach a timely resolution with respect to a “credit event” or otherwise does not","page_number":109,"box":{"x":117,"y":707,"width":718,"height":12}},{"id":"6f8928e4-c50e-4dff-a15b-413c16f563e2","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":109,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"4c7a98b9-7138-4fa3-9eac-87d6d9651bac","block_type":"box","text":"default swap upon a default by the reference entity. Furthermore, a Fund may enter into certain credit","page_number":109,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"a50186fe-e438-4d75-a04b-179567b6b748","block_type":"box","text":"default swaps or similar instruments that may not be covered by these initiatives.","page_number":109,"box":{"x":116,"y":754,"width":598,"height":12}},{"id":"23128bcb-934b-40ef-976a-0bf174de0e58","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":109,"box":{"x":117,"y":785,"width":723,"height":12}},{"id":"6067324e-c96e-413b-8c14-de171f782222","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":109,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"50a1efe1-0e6d-46ce-b795-5f68fd8a8983","block_type":"box","text":"of any deliverable obligation received by the Fund or the amount of cash settlement received by the","page_number":109,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"0c188e60-d23b-4d9a-8a9f-7207e7478729","block_type":"box","text":"Fund pursuant to the relevant cash settlement auction, together with the up-front or periodic payments","page_number":109,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"1a37f739-9f2f-4a5f-8e9d-609d838e6cb2","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":109,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"d3ff71ed-5a3f-47a6-92d0-950128679a15","block_type":"box","text":"Fund. A Fund that sells credit default swaps incurs leveraged exposure to the credit of one or more","page_number":109,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"b229984f-bbc2-42c1-9562-963c23705dfa","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":109,"box":{"x":117,"y":878,"width":703,"height":12}},{"id":"7159d2c6-492f-4a7f-93fe-e75a52aefdcd","block_type":"box","text":"II-23","page_number":109,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cddf93d1-c5b5-489e-a279-401768788766","block_type":"box","text":"NM1026U-6042785-109/259","page_number":109,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"780e2558-b620-4aa9-b531-b24a54e937d8","block_type":"box","text":"securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":110,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"d8b4adc9-9558-4fcc-b556-16f01f9b0a69","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt","page_number":110,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"d41576fb-4cd4-4b60-bc76-bb54851e99a8","block_type":"box","text":"obligations. In the event the ISDA Credit Derivatives Determinations Committee does not establish a","page_number":110,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"a9f51819-c488-4209-ac28-5e54da795e0c","block_type":"box","text":"cash settlement auction and identify the relevant deliverable securities or loans, the credit default swap","page_number":110,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"99423c79-00c3-4696-ae0e-321b914e69ff","block_type":"box","text":"buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to","page_number":110,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"423ee078-06a6-4a98-9d4f-c5f35078a67c","block_type":"box","text":"the Fund following a credit event and will likely choose the obligations with the lowest market value in","page_number":110,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"88887daa-2fc3-4e9e-8dc0-6194999e1968","block_type":"box","text":"order to maximize the payment obligations of the Fund. In addition, credit default swaps generally trade","page_number":110,"box":{"x":116,"y":180,"width":772,"height":12}},{"id":"3b8ce4d5-0e78-4c54-9630-22c8ad28a438","block_type":"box","text":"on the basis of theoretical pricing and valuation models, which may not accurately value such swap","page_number":110,"box":{"x":116,"y":196,"width":742,"height":12}},{"id":"a300a25d-89d1-4f53-a956-cdbe81e1b3a6","block_type":"box","text":"positions when established or when subsequently traded or unwound under actual market conditions.","page_number":110,"box":{"x":117,"y":211,"width":756,"height":12}},{"id":"2fd73fe8-40a0-4f99-897e-652688f32998","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for","page_number":110,"box":{"x":117,"y":242,"width":719,"height":12}},{"id":"15c9015e-655f-4589-a1ef-b0a0b38fbf62","block_type":"box","text":"clearing to regulated clearinghouses. See “— Derivatives — Regulation of Derivatives — Dodd-Frank","page_number":110,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"019cc242-f588-491e-b4e8-2af6f5f988d0","block_type":"box","text":"Regulations” above. Other single-name CDS and index CDS are permitted, although not required, to","page_number":110,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"86c3c62d-9200-4e62-91c1-f5eec11aa0d4","block_type":"box","text":"be cleared through regulated clearinghouses. The Funds clear all credit default swaps that are subject","page_number":110,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"c5d86f64-544f-4044-9569-76cb3ae64f1e","block_type":"box","text":"to mandatory clearing and may voluntarily clear some, but not all, of the other credit default swaps not","page_number":110,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"97c2e9fa-aff4-4f3c-9952-f20596618942","block_type":"box","text":"subject to mandatory clearing. The Funds face counterparty risk with respect to the clearinghouse","page_number":110,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"e41d54b9-e940-402a-8527-cea690584c69","block_type":"box","text":"when entering into cleared single-name CDS and cleared index CDS. The Funds face significant","page_number":110,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"ec7c2a58-4c90-4543-b9ed-67e6c6ef4dbc","block_type":"box","text":"counterparty risk with respect to their counterparties to non-cleared credit default swaps and similar","page_number":110,"box":{"x":116,"y":351,"width":743,"height":12}},{"id":"dd3f9756-13d9-4ad7-a126-dd999d7afe18","block_type":"box","text":"instruments. A Fund typically will enter into non-cleared credit default swaps and similar instruments","page_number":110,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"6cb34cfd-9b11-43ad-88ee-a866adade3a8","block_type":"box","text":"with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":110,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"32be9199-8127-446f-8d6f-fccdf5462506","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":110,"box":{"x":116,"y":397,"width":373,"height":12}},{"id":"8c49c9e7-4e26-4114-86e8-bf28c321adce","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either","page_number":110,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"dfd26818-cdc2-4295-b399-c3d30e5acbf2","block_type":"box","text":"as protection buyer or protection seller. While these contracts are similar in their operation to the","page_number":110,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"61d89ce3-413f-4cc7-9141-4cc07accff2c","block_type":"box","text":"market-standard credit default swaps described above, they are less standardized and instead have","page_number":110,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"1f16747a-bc07-4845-93b6-7767410c78fc","block_type":"box","text":"bespoke or tailored features. For example, as compared to market-standard credit defaults, the range","page_number":110,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"31e18eb3-16cd-4827-af1f-5dd667bf8deb","block_type":"box","text":"of “credit events” triggering settlement of such bespoke contracts may be narrower or broader, any","page_number":110,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"f971cb98-fe33-437e-8306-430b7f3c9ec4","block_type":"box","text":"such triggered contracts are settled by physical delivery of the underlying security or loan to or by the","page_number":110,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"8c8d4f84-8d33-41e3-8d84-452a296e4af4","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":110,"box":{"x":117,"y":521,"width":719,"height":12}},{"id":"76cb44f2-2203-48ec-a30b-41e410dfc7c1","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":110,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"3ad39aee-d6ce-45c0-8da7-90f8ca132571","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund","page_number":110,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"8da134d2-c3e3-42b4-8229-077dbca18c5f","block_type":"box","text":"had invested in the reference obligation directly and are subject to significant credit risk, correlation","page_number":110,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"54bfe50a-14cb-41ab-b54b-f9190422c086","block_type":"box","text":"risk, leverage risk, illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":110,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"ef6394ac-afec-459f-ae71-65a64315a248","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":110,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"e55eb13f-f07c-425c-83e0-6715a8c1eb36","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of","page_number":110,"box":{"x":410,"y":630,"width":450,"height":12}},{"id":"4080ef37-33be-48c4-9e85-36fb10d29b42","block_type":"box","text":"interest rate swaps and interest rate caps and floors. As described in further detail below, a Fund may","page_number":110,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"91d1c2c7-2b74-4abc-a7e4-0daae80477e7","block_type":"box","text":"enter into these transactions primarily to preserve a return or spread on a particular investment or","page_number":110,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"e035f866-8c45-4679-b63b-c040d3407a80","block_type":"box","text":"portion of its holdings, as a duration management technique, to protect against an increase in the price","page_number":110,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"c3297c98-4c9c-4121-9cb0-4901852b07d6","block_type":"box","text":"of securities a Fund anticipates purchasing at a later date, or for speculation to increase returns.","page_number":110,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"16421466-3f35-4045-825d-501b098933da","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted","page_number":110,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"f4c36d32-5d1f-4b87-9a5b-b0ff4e3362eb","block_type":"box","text":"for clearing to regulated clearinghouses. See “— Regulation of Derivatives — Dodd-Frank Regulations”","page_number":110,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"2b3ed81e-71f5-48fa-9b3d-1ab65a786e90","block_type":"box","text":"above. Other interest rate swaps are permitted, although not required, to be cleared. Most of the","page_number":110,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"e984b8f0-2f24-4fe6-9bbc-e48c74d9c1d4","block_type":"box","text":"interest rate swaps entered into by the Funds are cleared. The Funds face counterparty risk with","page_number":110,"box":{"x":117,"y":769,"width":714,"height":12}},{"id":"74dca2d3-b9bd-49d6-86f5-8249fb1d9f5d","block_type":"box","text":"respect to the clearinghouse when entering into cleared interest rate swaps.","page_number":110,"box":{"x":117,"y":785,"width":561,"height":12}},{"id":"7f75d174-2493-4ce9-bf11-18668071521f","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest","page_number":110,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"ddc4f444-ca6f-48c8-98d3-9928034b2b47","block_type":"box","text":"rate swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared","page_number":110,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"de5d18f6-d0dd-4a2b-b88e-d07c6bd01d5b","block_type":"box","text":"interest rate derivatives transactions are swap dealers and other creditworthy entities that have","page_number":110,"box":{"x":117,"y":847,"width":709,"height":12}},{"id":"c70ba1f8-6c88-41c4-a2ee-89aaf259c625","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. If","page_number":110,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"d42fbbf5-1288-4064-b3b1-9997b2f22b30","block_type":"box","text":"the Fund’s counterparty defaults on such a transaction, a Fund will have contractual remedies with","page_number":110,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"9dc0adb8-3cf6-4688-a758-fb81e7ab2a31","block_type":"box","text":"II-24","page_number":110,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"750fb3a8-c456-4fdb-89bf-fe25f4c1d7a2","block_type":"box","text":"NM1026U-6042785-110/259","page_number":110,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"038e8075-d80c-402e-aec5-1105266fe80e","block_type":"box","text":"respect to the transaction, but there can be no guarantee that the Fund will be successful in enforcing","page_number":111,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"c4c38fe8-256f-4a73-b28d-3e04ef961385","block_type":"box","text":"such remedies. The market for interest rate swaps is relatively liquid in comparison with other similar","page_number":111,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"d7712f2a-7179-4911-9e52-c55fd611b6fc","block_type":"box","text":"instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":111,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"bf1ff6fe-6c28-4990-bfa1-ceaf23d24744","block_type":"box","text":"interest rate derivatives due to applicable U.S. federal income tax requirements.","page_number":111,"box":{"x":117,"y":134,"width":597,"height":11}},{"id":"a90606f1-fab2-456b-a242-2efee7f5e099","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a","page_number":111,"box":{"x":117,"y":161,"width":762,"height":12}},{"id":"86dc2744-ce50-465b-a84d-31b97c73a344","block_type":"box","text":"fixed or variable interest rate, index or asset in return for periodic payments from its counterparty based","page_number":111,"box":{"x":116,"y":177,"width":772,"height":12}},{"id":"41a3dd4f-6ae0-41b5-9f32-b9db930cc668","block_type":"box","text":"on a different fixed or variable interest rate, index or asset.","page_number":111,"box":{"x":116,"y":192,"width":439,"height":11}},{"id":"43a76391-7706-4439-8177-d2bcb3a49a34","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls","page_number":111,"box":{"x":116,"y":220,"width":746,"height":12}},{"id":"0bc6d9d8-efa1-4177-afa6-e6ed71a5955d","block_type":"box","text":"below a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":111,"box":{"x":117,"y":235,"width":736,"height":12}},{"id":"e7c5e6e8-90e4-4c1a-8e34-94d72dd52771","block_type":"box","text":"from the party selling such interest rate floor.","page_number":111,"box":{"x":116,"y":251,"width":337,"height":12}},{"id":"b133516f-c426-4157-936c-9f245d179aca","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises","page_number":111,"box":{"x":116,"y":278,"width":746,"height":12}},{"id":"8da8aa49-e1ef-4e16-b868-72d4c451a617","block_type":"box","text":"above a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":111,"box":{"x":116,"y":294,"width":739,"height":12}},{"id":"18cb1319-1528-4305-888c-7a0944ec8ec9","block_type":"box","text":"from the party selling such interest rate cap.","page_number":111,"box":{"x":116,"y":309,"width":331,"height":12}},{"id":"01135f44-dae3-426f-becc-79da3587231f","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":111,"box":{"x":116,"y":337,"width":764,"height":12}},{"id":"69c369ad-d447-4431-b250-5482682f2571","block_type":"box","text":"commitments to pay or receive interest,","page_number":111,"box":{"x":116,"y":352,"width":298,"height":12}},{"id":"6a7f40c1-4392-449e-9ef9-8e107a2d88e3","block_type":"box","text":"e.g.","page_number":111,"box":{"x":415,"y":355,"width":26,"height":9}},{"id":"afcd08fe-5e6a-4829-a06c-97e4ff741986","block_type":"box","text":", an exchange of fixed rate payments for floating rate","page_number":111,"box":{"x":444,"y":352,"width":396,"height":12}},{"id":"8ad40880-208d-486c-848d-b83db74dab06","block_type":"box","text":"payments. For example, if a Fund holds a mortgage-backed security with an interest rate that is reset","page_number":111,"box":{"x":117,"y":368,"width":755,"height":12}},{"id":"3cbe0a5e-4760-49d4-a9d0-47a1fef44bac","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":111,"box":{"x":116,"y":383,"width":748,"height":12}},{"id":"76a44b8d-db6b-4dc4-9212-a4fac45e4d25","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":111,"box":{"x":117,"y":399,"width":755,"height":12}},{"id":"1580ca5c-73ac-4c7f-963a-022df7c92baa","block_type":"box","text":"the mortgage-backed security due to rising interest rates but would also limit its ability to benefit from","page_number":111,"box":{"x":116,"y":414,"width":753,"height":12}},{"id":"eb71d495-1502-4fee-8190-0e1212aa3d4a","block_type":"box","text":"falling interest rates. Conversely, if a Fund holds a mortgage-backed security with an interest rate that","page_number":111,"box":{"x":116,"y":430,"width":761,"height":12}},{"id":"a6002ed0-32da-40f5-8f88-951acf40ca5b","block_type":"box","text":"is reset every week and it would like to lock in what","page_number":111,"box":{"x":117,"y":445,"width":383,"height":12}},{"id":"bb195341-0492-43ca-9f27-6ea4b5ef5736","block_type":"box","text":"it believes to be a high interest rate for one year, it","page_number":111,"box":{"x":501,"y":445,"width":377,"height":12}},{"id":"a72fd664-0769-4387-82ca-95d41d3eed89","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":111,"box":{"x":117,"y":461,"width":746,"height":12}},{"id":"b656841c-df41-4d6b-b9da-1804d168f911","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":111,"box":{"x":117,"y":476,"width":733,"height":12}},{"id":"2fff31e9-9f38-4047-89b9-3ecc3b91c4e9","block_type":"box","text":"falling interest rates and may permit the Fund to enhance its income through the positive differential","page_number":111,"box":{"x":116,"y":492,"width":745,"height":12}},{"id":"150ded0e-b9b4-43bc-b4ad-696bd94283c8","block_type":"box","text":"between one week and one year interest rates, but would preclude it from taking full advantage of","page_number":111,"box":{"x":117,"y":507,"width":729,"height":12}},{"id":"f016d5b2-c179-4f9a-9764-7473954e6624","block_type":"box","text":"rising interest rates.","page_number":111,"box":{"x":117,"y":523,"width":150,"height":12}},{"id":"ba6e4620-1056-4f14-9853-bdd68c943348","block_type":"box","text":"For U.S federal income tax purposes, gains from transactions in interest rate swaps distributed to","page_number":111,"box":{"x":117,"y":550,"width":726,"height":12}},{"id":"728c9a94-9616-4113-acf9-7e97b60ea9cb","block_type":"box","text":"shareholders will be taxable as ordinary income or, in certain circumstances, as long term capital gains","page_number":111,"box":{"x":116,"y":566,"width":769,"height":12}},{"id":"68ee0bee-e74f-4544-ac4a-42c1e0cfa23c","block_type":"box","text":"to shareholders.","page_number":111,"box":{"x":116,"y":581,"width":125,"height":10}},{"id":"68f84fe3-bb9f-42a0-9390-1d583ecf5762","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk,","page_number":111,"box":{"x":117,"y":609,"width":751,"height":12}},{"id":"3e47cadc-d1b9-4c11-a73a-963da33110c5","block_type":"box","text":"illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":111,"box":{"x":117,"y":624,"width":549,"height":12}},{"id":"a8432288-499a-4cdb-8af0-c228b5e88ee2","block_type":"box","text":"Total Return Swaps.","page_number":111,"box":{"x":118,"y":652,"width":155,"height":12}},{"id":"09b1a007-6c33-4293-8f72-0275d53141eb","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic","page_number":111,"box":{"x":273,"y":652,"width":570,"height":12}},{"id":"073b1007-563c-420a-a74a-d6121c3f17d0","block_type":"box","text":"payments to the other party based on the return of the assets underlying the contract in exchange for","page_number":111,"box":{"x":117,"y":667,"width":750,"height":12}},{"id":"7dcf0dc3-169e-4c2c-aeaf-b5b9934da1ac","block_type":"box","text":"periodic payments based on a fixed or variable interest rate or the total return from different underlying","page_number":111,"box":{"x":117,"y":683,"width":759,"height":12}},{"id":"a96d2f09-d721-4d1d-834f-40b05c6f82cc","block_type":"box","text":"assets. The return of the assets underlying the contract includes both the income generated by the","page_number":111,"box":{"x":116,"y":698,"width":732,"height":12}},{"id":"6d809706-6897-44b4-915c-4d49b8f1da91","block_type":"box","text":"asset and the change in market value of the asset. The asset underlying the contract may include a","page_number":111,"box":{"x":116,"y":714,"width":737,"height":12}},{"id":"be679a3d-afb0-4581-b016-5670dc016161","block_type":"box","text":"specified security, basket of securities or securities indices. Total return swaps on a specified security,","page_number":111,"box":{"x":116,"y":729,"width":757,"height":12}},{"id":"0ef13aaf-2443-4a67-835b-ffa4bc72c843","block_type":"box","text":"basket of securities or securities indices may sometimes be referred to as “contracts for difference.”","page_number":111,"box":{"x":117,"y":745,"width":738,"height":12}},{"id":"11efb0ad-83c4-49d1-b9a8-4327eb584c02","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking","page_number":111,"box":{"x":116,"y":772,"width":738,"height":12}},{"id":"cad1b82b-3f8a-4862-b6c7-f5b1a601f6ac","block_type":"box","text":"physical custody of such security or investing directly in such market. Upon entering into a total return","page_number":111,"box":{"x":117,"y":788,"width":752,"height":12}},{"id":"5bdd63ff-1582-4224-b7b8-83cf1fd60029","block_type":"box","text":"swap, a Fund is required to deposit initial margin but the parties do not exchange the notional amount.","page_number":111,"box":{"x":116,"y":803,"width":757,"height":12}},{"id":"cdf6429c-066c-43ee-88be-53e1503240c3","block_type":"box","text":"As a result, total return swaps may effectively add leverage to the Fund’s portfolio because the Fund","page_number":111,"box":{"x":116,"y":819,"width":744,"height":12}},{"id":"7838ada6-cee2-470b-961d-311fa847f311","block_type":"box","text":"would be subject to investment exposure on the notional amount of the swap.","page_number":111,"box":{"x":116,"y":834,"width":580,"height":12}},{"id":"06bd3a6c-125d-43be-b7f7-115920f16722","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk","page_number":111,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"f20fe4da-2aaf-4768-8c61-be429d1125a3","block_type":"box","text":"and counterparty risk. See “— Risk Factors in Derivatives” above.","page_number":111,"box":{"x":116,"y":877,"width":493,"height":12}},{"id":"56695054-29da-4dab-8e33-5e820d6efb15","block_type":"box","text":"II-25","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"87a83489-033c-4a4a-9d34-64c24ebc735d","block_type":"box","text":"NM1026U-6042785-111/259","page_number":111,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4718162e-b4cf-47cd-babf-ca3af00568ac","block_type":"box","text":"Options.","page_number":112,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"a907adad-7f45-4d80-a9f3-ce8ab3a02dd4","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":112,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"391abb8c-400f-46ff-b6a4-2318aafc6485","block_type":"box","text":"A Fund may engage in transactions in options on","page_number":112,"box":{"x":454,"y":110,"width":370,"height":12}},{"id":"1d31657d-6786-4a3d-a3f8-c1d74b9b7350","block_type":"box","text":"individual securities, baskets of securities or securities indices, or particular measurements of value or","page_number":112,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"2925b048-e3ea-484a-95c6-4b07ddef6beb","block_type":"box","text":"rates, such as an index of the price of treasury securities or an index representative of short-term","page_number":112,"box":{"x":117,"y":141,"width":724,"height":12}},{"id":"9a311290-8d36-41d0-aa5a-d32a9b60516e","block_type":"box","text":"interest rates. Such investments may be made on exchanges and in the OTC markets. In general,","page_number":112,"box":{"x":117,"y":157,"width":732,"height":12}},{"id":"597724fb-e3f7-4a09-bdec-f5ae02abf0f1","block_type":"box","text":"exchange-traded options have standardized exercise prices and expiration dates and require the","page_number":112,"box":{"x":116,"y":172,"width":723,"height":12}},{"id":"bd5a1675-5a96-4a9b-9cb9-8fb464477957","block_type":"box","text":"parties to post margin against their obligations, and the performance of the parties’ obligations in","page_number":112,"box":{"x":117,"y":188,"width":720,"height":12}},{"id":"9eb6cb7f-8481-485e-9c74-994e3ed97702","block_type":"box","text":"connection with such options is guaranteed by the exchange or a related clearing corporation. OTC","page_number":112,"box":{"x":116,"y":203,"width":742,"height":12}},{"id":"205a86a9-9391-4534-b0eb-c7ee767d2f03","block_type":"box","text":"options have more flexible terms negotiated between the buyer and the seller, but are subject to","page_number":112,"box":{"x":116,"y":219,"width":717,"height":12}},{"id":"c6cc0031-6823-4e4a-98e6-2e69b2434e92","block_type":"box","text":"greater credit risk. OTC options also involve greater illiquidity risk.","page_number":112,"box":{"x":116,"y":234,"width":493,"height":12}},{"id":"d1891e2a-e1f7-461b-a4bb-47d55c401908","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in","page_number":112,"box":{"x":116,"y":265,"width":709,"height":12}},{"id":"e66ac6d3-4553-4233-aed3-d4f6c473e11f","block_type":"box","text":"different payment structures and/or expirations (commonly referred to as exotic options). For example,","page_number":112,"box":{"x":116,"y":281,"width":765,"height":12}},{"id":"0989d0cb-bb1e-461a-bda7-8af892494807","block_type":"box","text":"barrier options are exotic options that can only be exercised (or automatically expire) if the price of the","page_number":112,"box":{"x":117,"y":296,"width":761,"height":12}},{"id":"4d99beef-e00b-4450-9880-09771a21addb","block_type":"box","text":"underlying asset reaches one or more predetermined levels on or before expiration. Binary options are","page_number":112,"box":{"x":117,"y":312,"width":765,"height":12}},{"id":"029253f4-93e8-4934-8d8d-0700ebfcde82","block_type":"box","text":"another example of exotic options which have a fixed all-or-nothing payout if one or more","page_number":112,"box":{"x":116,"y":327,"width":666,"height":12}},{"id":"2702f0cc-8461-47e8-8be3-6b0f14737ae5","block_type":"box","text":"predetermined conditions are met. Exotic options are typically traded in OTC markets.","page_number":112,"box":{"x":117,"y":343,"width":641,"height":12}},{"id":"7444e03b-9ee1-48bd-bbef-512c17126c12","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example,","page_number":112,"box":{"x":116,"y":374,"width":770,"height":12}},{"id":"8c6167f9-db24-40e6-a1da-78e4d894365b","block_type":"box","text":"there are significant differences between the securities and options markets that could result in an","page_number":112,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"cb604232-e59f-4cbf-a9a6-7a1dc949b15e","block_type":"box","text":"imperfect correlation between these markets, causing a given transaction not to achieve its objectives.","page_number":112,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"11b9a06b-bc77-4544-933e-b644fee29238","block_type":"box","text":"In addition, a liquid market for particular options, whether traded OTC or on a national securities","page_number":112,"box":{"x":117,"y":420,"width":716,"height":12}},{"id":"92ace05c-a578-49c8-a5f4-c97bf343ea31","block_type":"box","text":"exchange (“Exchange”) may be absent for reasons which include the following: there may be","page_number":112,"box":{"x":116,"y":436,"width":695,"height":12}},{"id":"022575a1-2f6b-496c-a8d8-e4c01d34aa38","block_type":"box","text":"insufficient trading interest in certain options; restrictions may be imposed by an Exchange on opening","page_number":112,"box":{"x":117,"y":451,"width":763,"height":12}},{"id":"30aa9e43-684c-4c15-afbf-0fd6bcb8527b","block_type":"box","text":"transactions or closing transactions or both; trading halts, suspensions or other restrictions may be","page_number":112,"box":{"x":116,"y":467,"width":737,"height":12}},{"id":"65a61da7-7f3b-41da-9ea6-8db9db224ccc","block_type":"box","text":"imposed with respect to particular classes or series of options or underlying securities; unusual or","page_number":112,"box":{"x":117,"y":482,"width":727,"height":12}},{"id":"85768357-0bf2-42f7-b513-ac85b516fb91","block_type":"box","text":"unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an","page_number":112,"box":{"x":117,"y":498,"width":708,"height":12}},{"id":"db1e9e7a-cf43-4845-bd83-556121a2fa50","block_type":"box","text":"Exchange or the Options Clearing Corporation may not at all times be adequate to handle current","page_number":112,"box":{"x":117,"y":513,"width":728,"height":12}},{"id":"4d1456b2-9e5c-4904-878e-70c13dfe0f12","block_type":"box","text":"trading volume; or one or more Exchanges could, for economic or other reasons, decide or be","page_number":112,"box":{"x":116,"y":529,"width":703,"height":12}},{"id":"5a88f457-eb79-42de-882e-f6a82533ddfb","block_type":"box","text":"compelled at some future date to discontinue the trading of options (or a particular class or series of","page_number":112,"box":{"x":116,"y":544,"width":746,"height":12}},{"id":"e8a94cdd-2991-45ae-87a7-561c0bb66f89","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":112,"box":{"x":116,"y":560,"width":770,"height":12}},{"id":"d04ea826-53cc-4d7c-b1a5-de087c8d98a2","block_type":"box","text":"to exist, although outstanding options that had been issued by the Options Clearing Corporation as a","page_number":112,"box":{"x":116,"y":575,"width":753,"height":12}},{"id":"56ad35c7-edcd-49e4-a80c-8b0fbd458c22","block_type":"box","text":"result of trades on that Exchange would continue to be exercisable in accordance with their terms.","page_number":112,"box":{"x":117,"y":591,"width":732,"height":12}},{"id":"bd89d6e2-344a-478a-b27d-1e57a20b9ff3","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or","page_number":112,"box":{"x":117,"y":622,"width":749,"height":12}},{"id":"324bea9f-4418-44db-9dd9-7a6e5decdac9","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":112,"box":{"x":117,"y":638,"width":764,"height":11}},{"id":"b35beaa3-8ce0-4a8e-b10c-968a6ba2396a","block_type":"box","text":"or in concert with others (regardless of whether such options are written on the same or different","page_number":112,"box":{"x":116,"y":653,"width":720,"height":12}},{"id":"6fa401e4-0908-4700-a17a-3a78040beaba","block_type":"box","text":"exchanges or are held or written on one or more accounts or through one or more brokers). Under","page_number":112,"box":{"x":116,"y":668,"width":730,"height":12}},{"id":"e61cd150-77a3-4109-8705-4bc8adb842ba","block_type":"box","text":"these limitations, option positions of all investment companies advised by the Manager are combined","page_number":112,"box":{"x":116,"y":684,"width":749,"height":12}},{"id":"d9fecd6c-19bd-4a68-9e1d-503bb6c2a1ca","block_type":"box","text":"for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation of","page_number":112,"box":{"x":116,"y":699,"width":736,"height":13}},{"id":"5387b003-0194-4408-a26d-a579695d39f9","block_type":"box","text":"positions and may impose other sanctions or restrictions. These position limits may restrict the number","page_number":112,"box":{"x":117,"y":715,"width":762,"height":12}},{"id":"42565291-6933-403e-b76b-32925715285d","block_type":"box","text":"of listed options that a Fund may buy or sell.","page_number":112,"box":{"x":116,"y":730,"width":328,"height":13}},{"id":"0a404672-77c3-4372-b062-9a537b371f10","block_type":"box","text":"Call Options.","page_number":112,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"e335ea49-9c88-48e8-b4ad-808ad46188a2","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in","page_number":112,"box":{"x":217,"y":761,"width":623,"height":13}},{"id":"ccb681ca-c8a0-4b86-b92c-388ca5fdaead","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":112,"box":{"x":116,"y":777,"width":743,"height":12}},{"id":"ee11eec3-22d3-4e41-9097-12fe7d8ead3f","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":112,"box":{"x":116,"y":793,"width":762,"height":12}},{"id":"a62b934b-fc00-43cf-8021-b3d71371208c","block_type":"box","text":"purchase and sell call options on indices. Index options are similar to options on securities except that,","page_number":112,"box":{"x":117,"y":808,"width":759,"height":12}},{"id":"635103f9-8595-4b88-810c-75ad1ca79980","block_type":"box","text":"rather than taking or making delivery of securities underlying the option at a specified price upon","page_number":112,"box":{"x":117,"y":823,"width":712,"height":13}},{"id":"af7d5a2f-6a10-41e5-9a79-f5ff1a5699bc","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":112,"box":{"x":116,"y":839,"width":745,"height":12}},{"id":"a6fe1ab8-1765-4916-9c9a-313cb9208105","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":112,"box":{"x":117,"y":854,"width":716,"height":13}},{"id":"eb288e26-ad18-4faf-adc1-ea7faf3fd19c","block_type":"box","text":"II-26","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"348cf551-a5d8-4d83-91a8-bd2a6eeb7feb","block_type":"box","text":"NM1026U-6042785-112/259","page_number":112,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ebfa47ac-7437-4e7f-b35f-13654d21919a","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":113,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"420e9510-aba6-4b24-943b-5f7286974307","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":113,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"f2a7eeaf-be23-4543-8a8a-a196f7cb4c7f","block_type":"box","text":"or (ii) greater than the exercise price of the call written provided the difference is maintained by the","page_number":113,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"0b03d45e-4bf9-43a7-959d-65b2ce57a7db","block_type":"box","text":"Fund in assets which are not considered illiquid investments under the Funds’ Liquidity Program (as","page_number":113,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"0d2efbdc-e0a9-4890-9ac3-be07961045f5","block_type":"box","text":"defined below) (“liquid assets”) designated on the Manager’s or the sub-adviser’s books and records to","page_number":113,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"65d77a68-dcb3-40b1-9815-5dd68067d9a8","block_type":"box","text":"the extent required by Commission guidelines.","page_number":113,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"9b6b28e7-a5be-4c93-aa1f-ff8a9e49343c","block_type":"box","text":"A Fund may write (","page_number":113,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"f9aefe9d-58d0-4d87-a1d8-a70eb84a47a2","block_type":"box","text":"i.e.","page_number":113,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"ec06eeb5-7ee2-444e-a7a4-a4a2bfa1635b","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest","page_number":113,"box":{"x":281,"y":196,"width":599,"height":12}},{"id":"9c59bb54-210f-4b8c-b92c-b80091dfd02a","block_type":"box","text":"and to enter into closing purchase transactions with respect to certain of such options. A covered call","page_number":113,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"74c97334-cbe4-43e1-acd4-ed489a72cd60","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":113,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"736fab49-a10c-4851-85cd-8766ddbe4597","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":113,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"d413e3de-727b-4840-bbcf-b166650edc65","block_type":"box","text":"principal reason for writing call options is the attempt to realize, through the receipt of premiums, a","page_number":113,"box":{"x":117,"y":258,"width":733,"height":12}},{"id":"fe829bd1-7337-4627-9a03-e3e592f24ed0","block_type":"box","text":"greater return than would be realized on the securities alone. By writing covered call options, a Fund","page_number":113,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"37496c10-c14b-48f5-ada6-f778c97ccd68","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":113,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"18feabb2-2abb-4e26-838d-a5aea8170760","block_type":"box","text":"security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will","page_number":113,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"0c8154f5-d4f0-4a3d-a2b5-7bb5c46c59b5","block_type":"box","text":"be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":113,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"c9a2b693-95d2-4541-9f81-4c38a14ee91a","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":113,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"d8a6c9ba-456e-47fe-9d92-29656267d4a0","block_type":"box","text":"offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call","page_number":113,"box":{"x":116,"y":351,"width":768,"height":12}},{"id":"447741e6-6e1c-4645-be58-53cfb33ca20a","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":113,"box":{"x":116,"y":366,"width":736,"height":12}},{"id":"d1e0c27b-968b-4ad8-9476-3b4bc178993d","block_type":"box","text":"underlying security declining.","page_number":113,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"23eb74af-1836-48eb-bd28-4ba0488f2d96","block_type":"box","text":"A Fund may write (","page_number":113,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"59a7e6c9-3443-4762-ab67-a2ccb79fe1a1","block_type":"box","text":"i.e.","page_number":113,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"5d0196d4-1f7b-40f3-8912-9d341e18f2de","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest","page_number":113,"box":{"x":281,"y":413,"width":590,"height":12}},{"id":"50cb5b75-ddc3-483a-a25d-f2d865aad2c6","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":113,"box":{"x":117,"y":428,"width":763,"height":12}},{"id":"a729e1c2-d514-4f84-82f9-f9fe31d8b47d","block_type":"box","text":"realize income without committing capital to the ownership of the underlying securities or instruments.","page_number":113,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"10000463-db73-4a6d-80a2-34e66c86c594","block_type":"box","text":"When writing uncovered call options, a Fund must deposit and maintain sufficient margin with the","page_number":113,"box":{"x":116,"y":459,"width":727,"height":12}},{"id":"03795ab7-ab8a-442d-8868-89860610d11e","block_type":"box","text":"broker-dealer through which it made the uncovered call option as collateral to ensure that the securities","page_number":113,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"cc8d223f-4b46-489a-9189-6281856f69e4","block_type":"box","text":"can be purchased for delivery if and when the option is exercised. During periods of declining","page_number":113,"box":{"x":116,"y":490,"width":697,"height":12}},{"id":"19d31162-09ed-4889-9d92-dc8a2142044b","block_type":"box","text":"securities prices or when prices are stable, writing uncovered calls can be a profitable strategy to","page_number":113,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"dc689779-bfbf-40ad-93a8-1b5e3e390b91","block_type":"box","text":"increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls","page_number":113,"box":{"x":117,"y":521,"width":724,"height":12}},{"id":"aba0ca42-faae-438b-995c-b5f01d74b795","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":113,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"f3f35232-aa43-4ee9-83a1-63448dde848f","block_type":"box","text":"have speculative characteristics and the potential for loss is unlimited. When an uncovered call is","page_number":113,"box":{"x":117,"y":552,"width":725,"height":12}},{"id":"e865bfac-4c9f-421f-8b41-c845c857ae15","block_type":"box","text":"exercised, a Fund must purchase the underlying security to meet its call obligation. There is also a risk,","page_number":113,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"aa1c65f5-a2b3-438e-bc59-45948f01fe32","block_type":"box","text":"especially with preferred and debt securities that lack sufficient liquidity, that the securities may not be","page_number":113,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"4f62eb45-d711-4b40-9509-90cb781432b0","block_type":"box","text":"available for purchase. If the purchase price exceeds the exercise price, a Fund will lose the difference.","page_number":113,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"dafa43d3-cf5a-43c9-bec2-bb099e0ce14f","block_type":"box","text":"Put Options.","page_number":113,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"647450c9-9fc9-475a-b7f5-bafac0edc99c","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its","page_number":113,"box":{"x":213,"y":630,"width":648,"height":12}},{"id":"a31ba760-3fa1-45e2-b8e8-0d57a3688ccc","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":113,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"87785d53-6c8f-4d99-ba7a-b77bffa9e45c","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":113,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"c4292252-01b7-41c0-877f-2f774f86af57","block_type":"box","text":"the market value of the securities or instruments until the put option expires. The amount of any","page_number":113,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"4c2f44cf-c346-4d49-90fa-6d7ed75300f2","block_type":"box","text":"appreciation in the value of the underlying securities or instruments will be partially offset by the","page_number":113,"box":{"x":116,"y":692,"width":708,"height":12}},{"id":"3d0c4229-27fb-429e-8ca3-df7f2a169242","block_type":"box","text":"amount of the premium paid for the put option and any related transaction costs. Prior to its expiration,","page_number":113,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"08f92f57-ec14-4faf-b88d-cf9e64576a3e","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":113,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"11f7c9db-016c-450f-b3d0-453b5c139dba","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":113,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"5ea9cc21-6f63-4933-ac46-b9909adfe6c9","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an","page_number":113,"box":{"x":116,"y":754,"width":719,"height":12}},{"id":"2b3d6cd3-623d-44a2-b8c7-39edb97ef52a","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":113,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"44a85946-bfa6-4993-ac36-61ce915983f5","block_type":"box","text":"purchased. A Fund also may purchase uncovered put options.","page_number":113,"box":{"x":117,"y":785,"width":460,"height":12}},{"id":"90ce2665-390f-4448-a33e-944d153a24a2","block_type":"box","text":"A Fund also may write (","page_number":113,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"fc59d9ce-ad3f-4663-8385-508c85fcda0d","block_type":"box","text":"i.e.","page_number":113,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"c03639ae-dc0b-4bcd-b120-050688e3f73a","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held","page_number":113,"box":{"x":316,"y":816,"width":557,"height":12}},{"id":"03312372-4de0-476d-89d0-60878df57432","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":113,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"b693edb8-ed5d-4670-86cf-2a40b4961c8b","block_type":"box","text":"A Fund also may write (","page_number":113,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"9d62aa79-f08d-4699-86c9-50ac69c7e16b","block_type":"box","text":"i.e.","page_number":113,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"95921b4a-7caf-4464-ba29-5f75937ae7e7","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest","page_number":113,"box":{"x":312,"y":862,"width":575,"height":12}},{"id":"490c7851-b46c-4ea4-b36a-aef6e3022fdc","block_type":"box","text":"but with respect to which the Fund does not current","page_number":113,"box":{"x":117,"y":878,"width":372,"height":12}},{"id":"534a9e3b-08ad-4ac4-904e-71f6c9996843","block_type":"box","text":"ly have a corresponding short position or has not","page_number":113,"box":{"x":490,"y":878,"width":359,"height":12}},{"id":"aa85c8bd-f82c-4982-afed-3286165e7397","block_type":"box","text":"II-27","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"53633f61-5295-4f7e-8653-3cd8296c3303","block_type":"box","text":"NM1026U-6042785-113/259","page_number":113,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c8994ee1-8a92-44c3-b74d-49f2f7ddab22","block_type":"box","text":"deposited as collateral cash equal to the exercise va","page_number":114,"box":{"x":116,"y":87,"width":380,"height":12}},{"id":"287be985-a868-4c65-b19c-d002522a0b71","block_type":"box","text":"lue of the put option with","page_number":114,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"bc4808f4-223e-40fc-be0e-a165deabaf7f","block_type":"box","text":"the broker-dealer through","page_number":114,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"5461ce7e-6e10-41e9-8a21-320a9d1c1d3a","block_type":"box","text":"which it made the uncovered put opt","page_number":114,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"81655035-baa2-4b3d-a5c6-0f1660b15ac4","block_type":"box","text":"ion. The principal reason for writing uncovered put options is to","page_number":114,"box":{"x":381,"y":102,"width":461,"height":13}},{"id":"ce3704c1-627a-453e-a967-67be642123a3","block_type":"box","text":"receive premium income and to acquire such securities","page_number":114,"box":{"x":117,"y":118,"width":400,"height":12}},{"id":"5efaaa82-564e-40c9-8f58-62a212b45c8d","block_type":"box","text":"or instruments at a net cost below the current","page_number":114,"box":{"x":517,"y":118,"width":339,"height":10}},{"id":"406a2323-4802-4c86-9ace-9f6774feb586","block_type":"box","text":"market value. A Fund has the obligation to buy the","page_number":114,"box":{"x":117,"y":134,"width":370,"height":12}},{"id":"e89b7794-56b2-4354-b793-7bad508bab95","block_type":"box","text":"securities or instruments at an agreed upon price if","page_number":114,"box":{"x":488,"y":134,"width":373,"height":12}},{"id":"b331d447-e583-4099-a548-49dfe8e982be","block_type":"box","text":"the price of the securities or instruments decreases bel","page_number":114,"box":{"x":116,"y":149,"width":397,"height":12}},{"id":"d7a0d2b5-0496-4815-83cb-32deef0d64c5","block_type":"box","text":"ow the exercise price. If the price of the securities","page_number":114,"box":{"x":515,"y":149,"width":364,"height":12}},{"id":"82e3074c-3243-4beb-bb05-5b5380e85f23","block_type":"box","text":"or instruments increases during the option period,","page_number":114,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"060c8f44-df69-4188-ac93-d18ae8a311cc","block_type":"box","text":"the option will expire worthless and a Fund will retain","page_number":114,"box":{"x":477,"y":165,"width":393,"height":11}},{"id":"54be1d7b-916b-4b65-9795-b7897d2bfade","block_type":"box","text":"the premium and will not have to purchase the securiti","page_number":114,"box":{"x":116,"y":180,"width":392,"height":12}},{"id":"ae5bedec-26cd-4825-abe4-1dcb69fa88ee","block_type":"box","text":"es or instruments at the exercise price.","page_number":114,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"69cf134e-8728-4db7-97c4-21ff2ddbc227","block_type":"box","text":"Options on Government National Mortgage Association (“GNMA”) Certificates.","page_number":114,"box":{"x":117,"y":211,"width":586,"height":12}},{"id":"d0008641-d0b2-4b9f-bae8-3ba1e0557a88","block_type":"box","text":"The following","page_number":114,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"12758630-12b2-4850-b5f2-89a52111c2fc","block_type":"box","text":"information relates to the unique characteristics of options on GNMA Certificates. Since the remaining","page_number":114,"box":{"x":117,"y":227,"width":759,"height":12}},{"id":"9f6a8ad5-c613-4ffe-b714-a81bbaedc28c","block_type":"box","text":"principal balance of GNMA Certificates declines each month as a result of mortgage payments, a","page_number":114,"box":{"x":117,"y":242,"width":725,"height":12}},{"id":"31a31df2-48da-4260-b5dd-9ef98473a901","block_type":"box","text":"Fund, as a writer of a GNMA call holding GNMA Certificates as “cover” to satisfy its delivery obligation","page_number":114,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"1f0ac15a-ac3b-40e3-846f-90c36369060e","block_type":"box","text":"in the event of exercise, may find that the GNMA Certificates it holds no longer have a sufficient","page_number":114,"box":{"x":117,"y":273,"width":714,"height":12}},{"id":"462934c3-4842-4162-bf37-1636118d8a06","block_type":"box","text":"remaining principal balance for this purpose. Should this occur, a Fund will purchase additional GNMA","page_number":114,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"09f66516-51a6-4e6c-a8a9-1ef7ada7738f","block_type":"box","text":"Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash market in order","page_number":114,"box":{"x":117,"y":304,"width":754,"height":12}},{"id":"46ef3fbd-1465-4f1b-8004-6f859ff72cde","block_type":"box","text":"to maintain its “cover.”","page_number":114,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"a4624381-c157-4418-9ea3-3e36218b9bf3","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":114,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"80d7b207-3038-4b51-860f-f0a7802c0ff6","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":114,"box":{"x":117,"y":366,"width":724,"height":12}},{"id":"77acb139-98b4-47a1-9768-a17c8b1d2d58","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":114,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"83ac2ceb-a48a-4d90-9327-a7d5e2414c19","block_type":"box","text":"occur, a Fund will no longer be covered, and the Fund will either enter into a closing purchase","page_number":114,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"51390400-ec93-4fab-ab83-3950ad797fcd","block_type":"box","text":"transaction or replace such Certificate with a certificate that represents cover. When a Fund closes its","page_number":114,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"b94da776-757e-45b7-ad29-437765f0b628","block_type":"box","text":"position or replaces such Certificate, it may realize an unanticipated loss and incur transaction costs.","page_number":114,"box":{"x":117,"y":428,"width":751,"height":12}},{"id":"2a75c473-e03b-423d-908f-35c00d92e75f","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":114,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"f67648f8-565c-45f3-a04e-2c93ab44129f","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to","page_number":114,"box":{"x":362,"y":459,"width":517,"height":12}},{"id":"9be45780-7111-4e48-af28-d5bca794f8b2","block_type":"box","text":"enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap","page_number":114,"box":{"x":116,"y":475,"width":750,"height":12}},{"id":"e892866c-b81d-4c30-b500-63a07d4504fb","block_type":"box","text":"agreement, at a designated future time on specified terms. A Fund may write (","page_number":114,"box":{"x":116,"y":490,"width":580,"height":12}},{"id":"e15e10a4-f70d-4909-b9a3-2f0e654249f0","block_type":"box","text":"i.e.","page_number":114,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"f0370f94-9166-4d7a-b5fa-dc2b4e7ace83","block_type":"box","text":", sell) and purchase","page_number":114,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"30df977a-b143-482d-8740-6082e185cc6e","block_type":"box","text":"put and call swaptions. Depending on the terms of the particular option agreement, a Fund will","page_number":114,"box":{"x":117,"y":506,"width":704,"height":12}},{"id":"8b2cb4df-a0a0-48bc-82b6-ae06994aaedc","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":114,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"2f092384-f778-4f10-8d6a-612b80acdf7e","block_type":"box","text":"swaption. When a Fund purchases a swaption, it risks losing only the amount of the premium it has","page_number":114,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"9955c44b-eca4-461b-b4ee-b5353f902dcf","block_type":"box","text":"paid should it decide to let the option expire unexercised. However, when a Fund writes a swaption,","page_number":114,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"b58ffd68-af12-4d4a-b35e-8856fc923fb0","block_type":"box","text":"upon exercise of the option the Fund will become obligated according to the terms of the underlying","page_number":114,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"aa84e6e1-56c7-4445-b301-bc04ab879605","block_type":"box","text":"agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":114,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"514a4e30-f107-4ac2-85c1-1d46708c99b9","block_type":"box","text":"required, to be cleared.","page_number":114,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"d6b53631-64e0-4ed5-90b8-84783ad69a39","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment","page_number":114,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"befb7fd4-6c47-4178-b968-0cd6cec5e319","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":114,"box":{"x":116,"y":645,"width":772,"height":12}},{"id":"01958d7e-f5a3-4ee2-9d02-e4611b01e456","block_type":"box","text":"purchasing at a later date. A Fund generally will use these transactions for hedging purposes, not for","page_number":114,"box":{"x":117,"y":661,"width":746,"height":12}},{"id":"200b659b-5da6-4261-9ba1-f7b0ab6e263c","block_type":"box","text":"speculation.","page_number":114,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"fd40de56-2c0f-4a3e-a8e0-7afc9204cfac","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “— Risk","page_number":114,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"708414ad-00f3-4437-acb5-ac0fcd9fa3c1","block_type":"box","text":"Factors in Derivatives” above.","page_number":114,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"24e1497c-66a3-4dbc-90f3-73b3246f0a71","block_type":"box","text":"FLEX Options.","page_number":114,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"f8eafc6e-fb4f-4bbf-b10d-5d64c5999586","block_type":"box","text":"FLEX Options are customized option contracts available through national securities","page_number":114,"box":{"x":231,"y":754,"width":617,"height":12}},{"id":"7c1bdaea-d7fb-4d20-abdc-964151bf63e2","block_type":"box","text":"exchanges that are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX","page_number":114,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"cdfb0ba9-4d66-4dae-95c8-2f67517be504","block_type":"box","text":"Options are listed on a U.S. national securities exchange. FLEX Options provide investors with the","page_number":114,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"923338e7-7bb5-43af-99ec-ddf8e2a57649","block_type":"box","text":"ability to customize assets referenced by the options, exercise prices, exercise styles (","page_number":114,"box":{"x":116,"y":800,"width":641,"height":12}},{"id":"5a0c3709-651f-4137-8464-4be196eb0803","block_type":"box","text":"i.e.","page_number":114,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"a7a7190d-fd8b-494f-bd1e-1bfcace3f428","block_type":"box","text":", American","page_number":114,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"9426112a-9485-4b72-be86-ff16ea8e430f","block_type":"box","text":"style, exercisable any time prior to the expiration date, or European-style, exercisable only on the","page_number":114,"box":{"x":116,"y":816,"width":721,"height":12}},{"id":"8788780c-d6a0-4c08-bddb-c0cd42c6a739","block_type":"box","text":"option expiration date) and expiration dates, while achieving price discovery in competitive, transparent","page_number":114,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"7f143183-504f-4e3e-ab5b-7e48c60c6136","block_type":"box","text":"auctions markets and avoiding the counterparty exposure of OTC options positions. Each option","page_number":114,"box":{"x":116,"y":847,"width":719,"height":12}},{"id":"6f0e9624-1f16-4678-a5d1-d82504bccacc","block_type":"box","text":"contract entitles the holder thereof to purchase (for the","page_number":114,"box":{"x":116,"y":862,"width":410,"height":12}},{"id":"25869eae-8d59-4191-86ab-904ab9dad3d2","block_type":"box","text":"call options) or sell (for the put options) shares","page_number":114,"box":{"x":527,"y":862,"width":349,"height":12}},{"id":"c840ba77-002b-4f3e-b019-da535c9aa812","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":114,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"5c44bbc7-9b38-4be8-897e-fef47ab1f559","block_type":"box","text":"II-28","page_number":114,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bbace62c-838a-4280-81ea-7a35bd999ebb","block_type":"box","text":"NM1026U-6042785-114/259","page_number":114,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0b7b15c6-c143-46b2-b078-48bd07af295a","block_type":"box","text":"including both purchased and written put and call options (as further described below). The FLEX","page_number":115,"box":{"x":117,"y":87,"width":726,"height":12}},{"id":"c399b8d1-0a1f-40a4-bf51-ace9bb8eb1ea","block_type":"box","text":"Options are all European style options, which means that they are exercisable at a predetermined","page_number":115,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"ea93a09e-871d-46d7-a1a1-69f635450958","block_type":"box","text":"specified price (the “strike price”) only on the FLEX Option’s expiration date.","page_number":115,"box":{"x":116,"y":118,"width":569,"height":12}},{"id":"c58f22f9-1382-40f1-934d-7215800c1bac","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the","page_number":115,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"4a6ad409-eb1b-4ad5-a7b4-50060bb75efe","block_type":"box","text":"“buyer for every seller and the seller for every buyer”, reducing counterparty risk for clearing members","page_number":115,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"0f036265-b4d1-4c89-875d-c9f01ad793aa","block_type":"box","text":"and options traders. Although guaranteed for settlement by the OCC, FLEX Options are still subject to","page_number":115,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"b9beeb09-1cc7-4947-8297-1ee7479f9987","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":115,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"d12a2d73-127e-4ea1-8917-e392e041230b","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":115,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"c40650ff-5946-4a30-b3c0-d241c1af7630","block_type":"box","text":"will be unable or unwilling to perform its obligations under the FLEX Options contracts.","page_number":115,"box":{"x":116,"y":227,"width":646,"height":12}},{"id":"a4072842-81c0-4a8e-b4d0-3dea9227c61f","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the","page_number":115,"box":{"x":116,"y":258,"width":744,"height":12}},{"id":"af2d8967-592a-490d-ab4a-6e36e1b4bef4","block_type":"box","text":"FLEX Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and","page_number":115,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"a410420b-ee68-47be-aa61-671862e7d705","block_type":"box","text":"rules: certain stock dividends or distributions, stock splits, reverse stock splits, rights offerings,","page_number":115,"box":{"x":117,"y":289,"width":702,"height":12}},{"id":"0bec85b1-c7ea-4465-bdfe-1ed61c26f8d5","block_type":"box","text":"distributions, reorganizations, recapitalizations, or reclassifications with respect to an underlying","page_number":115,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"aafff78a-30cd-411f-87ed-4a2113f8b835","block_type":"box","text":"security, or a merger, consolidation, dissolution or liquidation of the issuer of the underlying security.","page_number":115,"box":{"x":116,"y":320,"width":748,"height":12}},{"id":"3ce65ac3-8181-40dc-a3a9-c3fe39165d43","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":115,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"6ae60c9e-4476-4c91-8694-fae74dd1000e","block_type":"box","text":"the OCC’s Securities Committee, in light of the circumstances known to it at the time such","page_number":115,"box":{"x":116,"y":351,"width":673,"height":12}},{"id":"45585c55-ad26-4f75-9119-b70fe5ce66f6","block_type":"box","text":"determination is made, based on its judgment as to what is appropriate for the protection of investors","page_number":115,"box":{"x":116,"y":366,"width":754,"height":12}},{"id":"8ffcbfe7-ab42-4cf1-bad8-52f75e5f7486","block_type":"box","text":"and the public interest, taking into account such factors as fairness to holders and writers (or","page_number":115,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"0f73d789-c864-4555-99b9-a3b20bd58a31","block_type":"box","text":"purchasers and sellers) of the affected options, the maintenance of a fair and orderly market in the","page_number":115,"box":{"x":117,"y":397,"width":734,"height":12}},{"id":"d5204723-8452-44b9-918a-f8da58605086","block_type":"box","text":"affected options, consistency of interpretation and practice, efficiency of exercise settlement","page_number":115,"box":{"x":116,"y":413,"width":687,"height":12}},{"id":"97ab8580-3fb1-4119-9c5c-8d45bac83613","block_type":"box","text":"procedures, and the coordination with other clearing agencies of the clearance and settlement of","page_number":115,"box":{"x":117,"y":428,"width":721,"height":12}},{"id":"e7b24c0a-5309-451b-a938-b694daeabb65","block_type":"box","text":"transactions in the underlying interest.","page_number":115,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"f6ff352c-e990-4dd8-b3a5-e398f99aa0a5","block_type":"box","text":"Certain Considerations Regarding Options","page_number":115,"box":{"x":117,"y":475,"width":315,"height":12}},{"id":"ca5d889a-9a85-4665-9908-4a166d8f90aa","block_type":"box","text":". The FLEX Options in which each Fund may invest will be","page_number":115,"box":{"x":433,"y":475,"width":437,"height":12}},{"id":"4f4e44c1-2eab-4897-9ec1-9d210c46af18","block_type":"box","text":"options on an exchange-traded fund (“ETF”) or the S&P 500 Index (together with such ETF, a","page_number":115,"box":{"x":116,"y":490,"width":700,"height":12}},{"id":"276c8026-2ad6-4d79-a943-c536b5ab6628","block_type":"box","text":"“Reference Asset”). As such, the value of a Fund’s FLEX Options will fluctuate with changes in the","page_number":115,"box":{"x":116,"y":506,"width":735,"height":12}},{"id":"eb9452a0-cdfe-4680-889b-62ed836382d6","block_type":"box","text":"value of the securities held by the ETF, and thus the ETF’s share price. In addition to the value of the","page_number":115,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"27e695a8-f789-499a-ad24-f386d070ce8b","block_type":"box","text":"ETF, the value of an option, in general, will reflect, among other things, the time remaining until","page_number":115,"box":{"x":117,"y":537,"width":709,"height":12}},{"id":"fdc9b487-dd81-433c-8e52-12ab21ac9a12","block_type":"box","text":"expiration (the end of the Outcome Period), the relationship of the exercise price to the market price of","page_number":115,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"983840eb-26cd-4a3e-9227-7e1f4a00c51c","block_type":"box","text":"the Reference Asset, and general market conditions. Options that expire unexercised have no value.","page_number":115,"box":{"x":116,"y":568,"width":752,"height":12}},{"id":"882e379a-c222-4a7c-a6df-516001fe8c4b","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase (for","page_number":115,"box":{"x":116,"y":591,"width":764,"height":12}},{"id":"05c447fa-a813-4543-b70e-949a8bd5834d","block_type":"box","text":"a call option) or sell (for a put option) the Reference Asset at a predetermined specified price (the","page_number":115,"box":{"x":116,"y":606,"width":727,"height":12}},{"id":"2a995d13-08fb-47b8-a938-14acd586af65","block_type":"box","text":"“strike price”). When a Fund writes a call on the Reference Asset, it receives a premium and agrees","page_number":115,"box":{"x":116,"y":622,"width":745,"height":12}},{"id":"f438badf-af23-45a4-9ae6-0e36953f4b64","block_type":"box","text":"that the purchaser of the call, upon exercise of the call, will receive from the Fund the delivery of a","page_number":115,"box":{"x":116,"y":637,"width":733,"height":12}},{"id":"e2c35d1b-ba52-46dd-9e52-6406d69ba700","block_type":"box","text":"specified number of shares of the ETF in exchange for the strike price. When a Fund buys a call on the","page_number":115,"box":{"x":116,"y":653,"width":770,"height":12}},{"id":"9069ff24-1465-429d-92a5-a11a5a895da1","block_type":"box","text":"Reference Asset, it pays a premium and has the same rights to such call as indicated above. When a","page_number":115,"box":{"x":117,"y":668,"width":750,"height":12}},{"id":"5b4dd003-6390-48a8-ad9b-9afbf3829ced","block_type":"box","text":"Fund buys a put on the Reference Asset, it pays a premium and has the right to require the seller of","page_number":115,"box":{"x":117,"y":684,"width":741,"height":12}},{"id":"5d75e679-b6a0-45cf-ab58-1b119595893b","block_type":"box","text":"the put, upon the Fund’s exercise of the put, to deliver the specified number of shares of the ETF in","page_number":115,"box":{"x":116,"y":699,"width":736,"height":12}},{"id":"2b235ad8-a4bb-4b5c-9034-58fb29c2c1c8","block_type":"box","text":"exchange for the strike price. When a Fund writes a put on the Reference Asset, it receives a premium","page_number":115,"box":{"x":116,"y":715,"width":761,"height":12}},{"id":"9da175c0-db33-4656-b83d-c1bb34af498a","block_type":"box","text":"and the purchaser of the put has the right to require the Fund to deliver the specified number of shares","page_number":115,"box":{"x":116,"y":730,"width":762,"height":13}},{"id":"231c2fae-12d5-40de-b838-0a4500ca930a","block_type":"box","text":"of the ETF in exchange for the strike price.","page_number":115,"box":{"x":116,"y":746,"width":316,"height":12}},{"id":"84197b4f-e21b-40ae-a974-9d06bebfea69","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may also","page_number":115,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"41eb61a6-5893-4b0f-88c5-c56a6b75942a","block_type":"box","text":"utilize FLEX Options that are cash-settled. Cash-settled options give the holder the right to receive an","page_number":115,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"1104d66a-d8b6-4344-8f35-e0b191abf0a6","block_type":"box","text":"amount (or owe an amount) of cash upon the exercise of the option. Gain or loss depends on changes","page_number":115,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"d8562646-1aa5-44ba-93cb-d9a80c467f63","block_type":"box","text":"in the value of the ETF’s share price relative to the strike price for a given option contract. The amount","page_number":115,"box":{"x":117,"y":816,"width":758,"height":12}},{"id":"aec97204-e34c-4c85-b6e6-744fc602ba3b","block_type":"box","text":"of cash is equal to the difference between the closing price of the ETF’s share price and the exercise","page_number":115,"box":{"x":116,"y":831,"width":753,"height":12}},{"id":"af1f29ec-d1e1-41f0-809a-6d68a9cafca8","block_type":"box","text":"price of the option contract times a specified multiple (“multiplier”), which determines the total value for","page_number":115,"box":{"x":117,"y":847,"width":763,"height":12}},{"id":"9f0a4f0c-38d9-410c-89e8-fb3ff9b00cc2","block_type":"box","text":"each point of such difference.","page_number":115,"box":{"x":116,"y":862,"width":224,"height":12}},{"id":"58ca0fd1-c512-4c81-b54b-0ac53653ef4e","block_type":"box","text":"II-29","page_number":115,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0be747af-3add-4103-9d09-18f6a314385f","block_type":"box","text":"NM1026U-6042785-115/259","page_number":115,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"755c549e-b03e-4bc6-842a-6ed7d156af89","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":116,"box":{"x":116,"y":87,"width":311,"height":12}},{"id":"d4b8f385-2e09-4ed0-83d8-dfc95acf38c4","block_type":"box","text":". If a Fund has purchased an option and exercises it before","page_number":116,"box":{"x":429,"y":87,"width":442,"height":12}},{"id":"120c805d-b987-48e5-8731-1e402615c1f3","block_type":"box","text":"the closing value for that day is available, it runs the risk that the level of the Reference Asset may","page_number":116,"box":{"x":116,"y":102,"width":733,"height":13}},{"id":"5d3a7bae-2f0b-423d-8bf7-f8704d4e8a4f","block_type":"box","text":"subsequently change. If such a change causes the exercised option to fall out of the money, the","page_number":116,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"b63c9dc8-fc10-447e-98f0-ca4101afe51c","block_type":"box","text":"applicable Fund will be required to pay the difference between the closing Reference Asset value and","page_number":116,"box":{"x":116,"y":134,"width":758,"height":12}},{"id":"10f0fb5e-0b2d-4ceb-ad2e-d77e1ad9b1af","block_type":"box","text":"the exercise price of the option (times the applicable multiplier) to the assigned writer.","page_number":116,"box":{"x":116,"y":149,"width":640,"height":12}},{"id":"4582df6c-9bc4-4477-b150-37f476ed56d9","block_type":"box","text":"Foreign Exchange Transactions.","page_number":116,"box":{"x":116,"y":180,"width":247,"height":12}},{"id":"6f8b4190-9bf9-47cc-85b2-29d9f983a596","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX","page_number":116,"box":{"x":116,"y":203,"width":768,"height":12}},{"id":"9eebc4de-dd85-486d-83f3-155d85dfd79f","block_type":"box","text":"forwards”) and currency swaps, purchase and sell currency options, currency futures and related","page_number":116,"box":{"x":116,"y":219,"width":723,"height":12}},{"id":"be7332fe-44c7-464d-bd40-000be2f86321","block_type":"box","text":"options thereon (collectively, “Currency Instruments”) for purposes of hedging against the decline in the","page_number":116,"box":{"x":116,"y":234,"width":772,"height":12}},{"id":"bab9a203-c63d-4059-b3aa-75faacec54c6","block_type":"box","text":"value of currencies in which its portfolio holdings are denominated against the U.S. dollar or, with","page_number":116,"box":{"x":116,"y":250,"width":725,"height":12}},{"id":"7df3b4ca-5131-4c92-a8e8-ba758906f7b1","block_type":"box","text":"respect to certain Funds, to seek to enhance returns.","page_number":116,"box":{"x":117,"y":265,"width":397,"height":12}},{"id":"deb3e41e-5245-4c92-ac81-74efdb051428","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities","page_number":116,"box":{"x":116,"y":296,"width":734,"height":12}},{"id":"43ac299e-cb60-4987-9e72-d2e7e1cd7ae9","block_type":"box","text":"owned by a Fund, sold by a Fund but not","page_number":116,"box":{"x":116,"y":312,"width":309,"height":12}},{"id":"4558058b-6943-440d-a1cb-e28680280631","block_type":"box","text":"yet delivered, or committed or anticipated to be purchased by","page_number":116,"box":{"x":426,"y":312,"width":460,"height":12}},{"id":"b3675e85-a6c0-424a-9bab-92ae13524c61","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":116,"box":{"x":116,"y":327,"width":768,"height":12}},{"id":"1b166219-bcba-4c46-8fab-daa960485ffd","block_type":"box","text":"an investment in a yen-denominated security. For example, the Fund may purchase a foreign currency","page_number":116,"box":{"x":116,"y":343,"width":767,"height":12}},{"id":"5dd7bfef-d517-4b65-bddd-9b8b306a3fc9","block_type":"box","text":"put option enabling it to sell a specified amount of yen","page_number":116,"box":{"x":117,"y":358,"width":404,"height":12}},{"id":"288bd9f8-97df-4363-a459-0d23f9ae2601","block_type":"box","text":"for dollars at a specified price by a future date.","page_number":116,"box":{"x":521,"y":358,"width":350,"height":12}},{"id":"efea7af9-d21f-4675-9c73-ccacd3bca287","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":116,"box":{"x":116,"y":374,"width":764,"height":12}},{"id":"50260d75-17ee-4430-9361-cab55b4a5cdb","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":116,"box":{"x":116,"y":389,"width":753,"height":12}},{"id":"a24aef7c-7439-4bf1-b79f-1d68150d9302","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":116,"box":{"x":116,"y":405,"width":764,"height":12}},{"id":"49482e47-013e-4edc-a859-803cc625f0be","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":116,"box":{"x":116,"y":420,"width":727,"height":12}},{"id":"25549fca-3dc8-4152-a274-3414ca31114c","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":116,"box":{"x":116,"y":436,"width":767,"height":12}},{"id":"7718ead2-ed55-4d78-84c0-bbb14c22a7e0","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":116,"box":{"x":117,"y":451,"width":742,"height":12}},{"id":"9d7c94b7-d963-4795-943d-f57feb545f36","block_type":"box","text":"Fund are considered hedging transactions. Certain Funds have a fundamental investment restriction","page_number":116,"box":{"x":117,"y":467,"width":749,"height":12}},{"id":"dad65553-1c56-4fb1-acfe-348228ad948b","block_type":"box","text":"that restricts currency option strategies.","page_number":116,"box":{"x":116,"y":482,"width":298,"height":12}},{"id":"377eb52b-60e0-4ac6-9547-8f36c205199d","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation","page_number":116,"box":{"x":117,"y":513,"width":737,"height":12}},{"id":"164aed26-68b0-4e15-9f19-3de0305ff58f","block_type":"box","text":"risk. A Fund’s use of Currency Instruments to effect hedging strategies is intended to reduce the","page_number":116,"box":{"x":117,"y":529,"width":718,"height":12}},{"id":"f6fa5bf3-e764-410c-a944-69cb944d4b03","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":116,"box":{"x":116,"y":544,"width":763,"height":12}},{"id":"d9a0b043-b26c-4ca7-b51f-90871c59e592","block_type":"box","text":"the NAV of the Fund’s shares from fluctuating. Moreover, although Currency Instruments will be used","page_number":116,"box":{"x":116,"y":560,"width":757,"height":12}},{"id":"7a2cc0af-bc11-422b-9faf-59de857dcb57","block_type":"box","text":"with the intention of hedging against adverse currency movements, transactions in Currency","page_number":116,"box":{"x":116,"y":575,"width":689,"height":12}},{"id":"f3c12092-97b7-456c-b831-bf7fc676ed46","block_type":"box","text":"Instruments involve the risk that anticipated currency movements will not be accurately predicted and","page_number":116,"box":{"x":117,"y":591,"width":755,"height":12}},{"id":"0519b9e9-9714-4e64-b13f-67ea43428879","block_type":"box","text":"that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges against","page_number":116,"box":{"x":116,"y":606,"width":706,"height":12}},{"id":"d7344036-d077-4728-8d55-91dffa3e1956","block_type":"box","text":"anticipated currency movements that do not occur, the Fund may realize losses and decrease its total","page_number":116,"box":{"x":116,"y":622,"width":761,"height":12}},{"id":"6d363b70-3749-4fb0-a7ac-b2097ada4143","block_type":"box","text":"return. Furthermore, a Fund will only engage in hedging activities from time to time and may not be","page_number":116,"box":{"x":117,"y":637,"width":738,"height":12}},{"id":"f46911ab-be2c-4e95-ad1f-3772208146ff","block_type":"box","text":"engaging in hedging activities when movements in currency exchange rates actually occur.","page_number":116,"box":{"x":116,"y":653,"width":681,"height":12}},{"id":"abd3f215-4bf8-41c5-a2fd-dbfed3a21265","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign","page_number":116,"box":{"x":117,"y":684,"width":746,"height":12}},{"id":"320a498c-28d4-47d0-ad89-c3024bbf5e03","block_type":"box","text":"or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified","page_number":116,"box":{"x":116,"y":699,"width":766,"height":13}},{"id":"f06ce8d6-9a44-4503-b4dc-e86e08321e1c","block_type":"box","text":"amount of a particular currency. There are no limitations on daily price moves in such forward","page_number":116,"box":{"x":116,"y":715,"width":693,"height":12}},{"id":"a6061df8-e291-4cfb-8edd-2673ab347f8d","block_type":"box","text":"contracts, and banks and dealers are not required to continue to make markets in such contracts.","page_number":116,"box":{"x":116,"y":731,"width":722,"height":11}},{"id":"1bfeb765-2258-49ad-811a-ad18e0b29f34","block_type":"box","text":"There have been periods during which certain banks or dealers have refused to quote prices for such","page_number":116,"box":{"x":116,"y":746,"width":751,"height":12}},{"id":"b4373bba-2a48-430a-9863-69640b0f070e","block_type":"box","text":"forward contracts or have quoted prices with an unusually wide spread between the price at which the","page_number":116,"box":{"x":116,"y":761,"width":756,"height":13}},{"id":"8d6f7ce8-a8b7-4d03-82f1-49564fb5fb59","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":116,"box":{"x":117,"y":777,"width":743,"height":12}},{"id":"72b0d3ef-d51c-47cf-aa7a-279782fff488","block_type":"box","text":"currency controls might limit any such forward contract trading. With respect to its trading of forward","page_number":116,"box":{"x":116,"y":792,"width":740,"height":13}},{"id":"869dd779-1550-429b-90cf-af2d45d85e09","block_type":"box","text":"contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a","page_number":116,"box":{"x":116,"y":808,"width":683,"height":12}},{"id":"abb92d9d-d4e5-4514-98aa-13f646980482","block_type":"box","text":"counterparty would deprive the Fund of any profit potential or force the Fund to cover its commitments","page_number":116,"box":{"x":116,"y":823,"width":757,"height":13}},{"id":"fdbe8138-9c24-4d2c-b61b-bc0d0ae4051b","block_type":"box","text":"for resale, if any, at the then market price and could result in a loss to the Fund.","page_number":116,"box":{"x":116,"y":839,"width":595,"height":12}},{"id":"dd5de336-8901-40af-835a-67d343b65de7","block_type":"box","text":"II-30","page_number":116,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"69edabf3-97b1-4082-8b48-f8c220ebae33","block_type":"box","text":"NM1026U-6042785-116/259","page_number":116,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"69831be0-2726-41ab-a40e-40e0160be0d9","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if","page_number":117,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"dc6876cb-9b30-41ed-8c8f-3a4ed1d97dd3","block_type":"box","text":"correctly anticipated, in the event that (i) the currency exchange rate movement is so generally","page_number":117,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"e21f64a9-7180-4d09-a064-91b42e3f70e3","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":117,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"edaf8fbc-aeb2-484a-a1ee-601fafd824e6","block_type":"box","text":"currency exchange rate movement relates to a market with respect to which Currency Instruments are","page_number":117,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"04f70803-a678-4290-b95f-765b8f021e00","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":117,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"bebb3a03-0e9f-45e5-b31c-fc418ee99f4a","block_type":"box","text":"of engaging in foreign currency transactions varies with such factors as the currencies involved, the","page_number":117,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"fa78ed2d-b816-4ebe-a2e3-5c06246a3ff3","block_type":"box","text":"length of the contract period and the market conditions then prevailing. Since transactions in foreign","page_number":117,"box":{"x":117,"y":180,"width":744,"height":12}},{"id":"cebcb751-b05f-42ec-b95c-937a85a122fb","block_type":"box","text":"currency exchange usually are conducted on a principal basis, no fees or commissions are involved.","page_number":117,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"a428ca9b-5fb3-49fd-bccd-c818aec8c7e7","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":117,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"ef4a1360-6491-4c0e-889e-23289a53e043","block_type":"box","text":"(including receivables for unsettled securities sales), or has committed to purchase or anticipates","page_number":117,"box":{"x":117,"y":242,"width":724,"height":12}},{"id":"7a75edd2-0380-4868-95ee-0acc3819e3b7","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":117,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"7256e6fd-392e-45c9-aefd-c96dcdb6b7be","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":117,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"2af5a407-f4ba-4198-8e4a-345310b27850","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified","page_number":117,"box":{"x":390,"y":289,"width":470,"height":12}},{"id":"f4e720d2-8c45-45dc-aa16-e79e87a409b0","block_type":"box","text":"amount of a specified currency or multinational currency unit at a specified price and specified future","page_number":117,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"ded93208-7642-4d63-a6e5-849a34b95948","block_type":"box","text":"date. Spot foreign exchange transactions are similar but are settled in the current, or “spot”, market. A","page_number":117,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"3e624d17-4b03-4e83-b3be-15a1c6c901bc","block_type":"box","text":"Fund will enter into foreign exchange transactions for purposes of hedging either a specific transaction","page_number":117,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"708c5fb1-b287-4410-a3d3-410af04bd0ad","block_type":"box","text":"or a portfolio position, or, with respect to certain Funds, to seek to enhance returns. FX forwards","page_number":117,"box":{"x":116,"y":351,"width":719,"height":12}},{"id":"ef9a9347-b011-4a75-9ecc-55bb68fc0e59","block_type":"box","text":"involve substantial currency risk, credit risk and liquidity risk. A Fund may enter into a foreign exchange","page_number":117,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"b25a7025-cb0e-4d9e-bfe2-0a105686e18f","block_type":"box","text":"transaction for purposes of hedging a specific transaction by, for example, purchasing a currency","page_number":117,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"52653da8-e96a-477c-b078-6886df127697","block_type":"box","text":"needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":117,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"2dfde444-033d-48a5-b060-f25a106c8873","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction","page_number":117,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"08d1ca85-c44c-4065-8e9e-14208d648924","block_type":"box","text":"for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of","page_number":117,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"31b35b4f-930f-48d8-aafb-a29d993adbfd","block_type":"box","text":"the Fund is denominated or by purchasing a currency in which the Fund anticipates acquiring a","page_number":117,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"33619650-eb1a-4e1a-8967-d18653121102","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":117,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"1d4d4f8c-7d6a-4c9f-b6d6-a13b5ee33e87","block_type":"box","text":"a Currency Instrument denominated in a currency other than the currency being hedged (a “cross","page_number":117,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"ac64e0eb-677d-438a-9741-78c83d6c5a0d","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":117,"box":{"x":117,"y":490,"width":680,"height":12}},{"id":"c01924fa-2009-40cd-9ac5-066d87813785","block_type":"box","text":"demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":117,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"73649839-684d-47b7-b302-c9128a93f01e","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross","page_number":117,"box":{"x":116,"y":521,"width":722,"height":12}},{"id":"6685c604-88a5-48fc-8e5d-2230f7d05328","block_type":"box","text":"hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity","page_number":117,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"1d5acaff-cfa5-4492-8494-2aabd134924c","block_type":"box","text":"than executing a similar hedging transaction by means of the currency being hedged.","page_number":117,"box":{"x":116,"y":552,"width":638,"height":12}},{"id":"0a436c07-a20d-40fa-9b45-29fbb8fb34c6","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on","page_number":117,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"1dc95185-2dff-4d28-ae8d-12d89c8fdb99","block_type":"box","text":"the value of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when","page_number":117,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"f63e9a8e-3b13-455d-806a-bb0eec5df95d","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":117,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"9e1996f6-17e5-4153-8829-a733184fb693","block_type":"box","text":"Proxy hedging entails entering into a forward contract to sell a currency whose changes in value are","page_number":117,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"8d591684-1b0d-474a-8295-f8415d464090","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":117,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"94a99bd6-c719-4e49-9b9e-28084f97f1c2","block_type":"box","text":"securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy hedging involves","page_number":117,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"28f3e163-ffe8-415e-aef2-15e5ad5b41e0","block_type":"box","text":"some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":117,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"6c8e6b8a-46e5-4a75-b79d-81a488994471","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a","page_number":117,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"ddc6117e-7e74-4642-ac37-6b0b79f128be","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":117,"box":{"x":116,"y":707,"width":742,"height":12}},{"id":"036ea24f-f024-4961-8145-1759fb8238cc","block_type":"box","text":"between various currencies may not be present, including during the particular time that a Fund is","page_number":117,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"1920b66a-9950-4321-8dcd-6c5de9f80222","block_type":"box","text":"engaging in proxy hedging.","page_number":117,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"7d2aef6f-08db-4f4c-b0b0-ea389340e303","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more","page_number":117,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"6e147c19-5843-4c89-8df7-ac387b2f9f2b","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":117,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"c68d780b-ac7c-46c9-8867-79e5c064057c","block_type":"box","text":"which the Fund expects to have portfolio exposure. For example, a Fund may hold both Canadian","page_number":117,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"7eb35d74-42ee-4696-ab0a-1513b5658738","block_type":"box","text":"government bonds and Japanese government bonds, and the Manager or sub-adviser may believe","page_number":117,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"a3b10db8-f45c-4b67-9a8e-1ff23eab2a98","block_type":"box","text":"that Canadian dollars will deteriorate against Japanese yen. The Fund would sell Canadian dollars to","page_number":117,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"4d9a291d-0b23-467d-a810-829b8b867095","block_type":"box","text":"reduce its exposure to that currency and buy Japanese yen. This strategy would be a hedge against a","page_number":117,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"ff0ae3f4-11b6-49ba-b749-03fe1ca945a7","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":117,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"fc00a86d-f58b-422e-ae86-548cfb2f35ee","block_type":"box","text":"the Japanese yen relative to the U.S. dollar.","page_number":117,"box":{"x":116,"y":878,"width":331,"height":12}},{"id":"4840c16e-a280-49b0-9e41-2ee06c0614c1","block_type":"box","text":"II-31","page_number":117,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"40ae5837-4e77-4ceb-8b7d-ec91a061a0a5","block_type":"box","text":"NM1026U-6042785-117/259","page_number":117,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"825246d4-596b-4744-aef9-3f94d7b5d7f0","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as","page_number":118,"box":{"x":116,"y":87,"width":690,"height":12}},{"id":"fa9436b5-b227-4e9f-95e2-eceade20ace4","block_type":"box","text":"non-deliverable forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be","page_number":118,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"bd5f6612-a2ac-4399-9684-2cd13d4d224b","block_type":"box","text":"thinly traded or are denominated in non-convertible foreign currency, where the profit or loss at the","page_number":118,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"bbf77bba-b0c1-46bd-8078-99704c5cc248","block_type":"box","text":"time at the settlement date is calculated by taking the difference between the agreed upon exchange","page_number":118,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"dfa78b96-43f9-4698-a271-a4a29ecf1aea","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":118,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"42d45c50-9942-4151-a4cf-10ac2ed3991c","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":118,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"10eb5d84-487e-4f95-b6c2-64f9e3499884","block_type":"box","text":"the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement","page_number":118,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"ada0db3d-a64e-43ea-b068-2284d629e3cd","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":118,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"63e5726f-9a13-47fc-a517-63e621e28f6a","block_type":"box","text":"are commonly quoted for time periods of one month up to two years, and are normally quoted and","page_number":118,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"2a4d380d-cb6d-4716-b1d6-c25cdb730a0f","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":118,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"bb240838-98b1-4a69-a6b6-e9ec0c818316","block_type":"box","text":"currencies that are not internationally traded.","page_number":118,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"c8a96b7b-4508-415c-bf8a-3ebdadb772b9","block_type":"box","text":"Currency Futures.","page_number":118,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"7f25066c-f20d-47fc-ae10-8c426dafdc10","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":118,"box":{"x":250,"y":273,"width":626,"height":12}},{"id":"2fd18a3b-cae6-4db3-b9e3-41f64c8e5c6f","block_type":"box","text":"currency through use of currency futures or options on currency futures. Currency futures are similar to","page_number":118,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"973deb5e-4f68-4e59-b9db-c4852d53deae","block_type":"box","text":"forward foreign exchange transactions except that futures are standardized, exchange-traded contracts","page_number":118,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"4e4f902f-be16-47c8-b26c-4dfc99f8a504","block_type":"box","text":"while forward foreign exchange transactions are traded in the OTC market. Currency futures involve","page_number":118,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"86166faa-6940-4737-9151-04aab0578ebb","block_type":"box","text":"substantial currency risk as well as the risks discussed above in “— Futures.”","page_number":118,"box":{"x":116,"y":335,"width":578,"height":12}},{"id":"31135d5e-1373-42a3-b367-0def65f02c9f","block_type":"box","text":"Currency Options.","page_number":118,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"ca7b5124-a641-4924-b94a-2eb61bb24f6c","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":118,"box":{"x":251,"y":366,"width":626,"height":12}},{"id":"cf929123-65ed-4cf7-a04b-00f517a0d6e8","block_type":"box","text":"currency through the use of currency options. Certain Funds have fundamental investment restrictions","page_number":118,"box":{"x":116,"y":382,"width":763,"height":12}},{"id":"29d88b6c-8c91-44b2-927a-3a8a77504473","block_type":"box","text":"that permit the purchase of currency options, but prohibit the writing of currency options. Currency","page_number":118,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"1bce7d0d-8efd-4c1c-8c05-a0b63b5c04ea","block_type":"box","text":"options are similar to options on securities. For example, in consideration for an option premium the","page_number":118,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"a7eb9d8b-8373-467a-9ced-c2c3380f92d1","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":118,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"0b4fef5b-31b1-435b-aa59-2cedbebdd58d","block_type":"box","text":"put option) a specified amount of a specified currency on or before the expiration date for a specified","page_number":118,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"c1a44b65-8118-432a-9739-b63a17d0cba0","block_type":"box","text":"amount of another currency. A Fund may engage in transactions in options on currencies either on","page_number":118,"box":{"x":116,"y":459,"width":737,"height":12}},{"id":"f09dcff4-e9cc-43f8-9999-bd238f7ff8ae","block_type":"box","text":"exchanges or OTC markets. Such transactions in options may include exotic options on currencies,","page_number":118,"box":{"x":116,"y":475,"width":743,"height":12}},{"id":"ccdb944b-60fa-4018-8d5c-c3d9803bf421","block_type":"box","text":"which are typically traded in OTC markets and have additional features that result in different payment","page_number":118,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"46c93fe2-039c-4737-a489-ee7433343db4","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered","page_number":118,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"4a1b2fd9-b274-4d27-894d-0b29a8e00ad1","block_type":"box","text":"call options on up to 100% of the currencies in its portfolio. See “— Options” above. Currency options","page_number":118,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"bf02d2da-21d6-4932-ad5b-4e14612c4a58","block_type":"box","text":"involve substantial currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":118,"box":{"x":117,"y":537,"width":651,"height":12}},{"id":"e1a0741f-8ad3-4dc4-925d-18304d9b031e","block_type":"box","text":"Currency Swaps.","page_number":118,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"048148fe-d4ee-4ec4-a3b4-37b65bdc15fa","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency","page_number":118,"box":{"x":248,"y":568,"width":557,"height":12}},{"id":"a0eff04c-9aa2-42dc-869c-b022f3dad38d","block_type":"box","text":"fluctuations or to hedge portfolio positions. Currency swaps are transactions in which one currency is","page_number":118,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"0afff8ae-3833-4bd8-bfd3-d26b0ccf1bfc","block_type":"box","text":"simultaneously bought for a second currency on a spot basis and sold for the second currency on a","page_number":118,"box":{"x":116,"y":599,"width":743,"height":12}},{"id":"cdfce076-bd32-485c-b1a4-2f6c87955e1c","block_type":"box","text":"forward basis. Currency swaps involve the exchange of the rights of a Fund and another party to make","page_number":118,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"658499ba-6038-4021-9d82-2d8410c4ffb4","block_type":"box","text":"or receive payments in specified currencies, and typically require the delivery of the entire principal","page_number":118,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"2560f6c7-9c52-4839-bb76-6c4445575b7c","block_type":"box","text":"value of one designated currency in exchange for the other designated currency. As a result, the entire","page_number":118,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"b4b63e0f-e023-47fe-8100-9b2e9af78e89","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":118,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"04161aea-8ac1-4063-a2b0-199a20d01668","block_type":"box","text":"its contractual delivery obligations.","page_number":118,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"e0af8eba-8930-4da2-974f-e366ac5ff115","block_type":"box","text":"Distressed Securities.","page_number":118,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"21a0cda8-8701-4b51-90d6-83bb8809b800","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary","page_number":118,"box":{"x":296,"y":707,"width":565,"height":12}},{"id":"81804a71-9cc2-4760-88dd-27bfc03d17e9","block_type":"box","text":"market, that are the subject of bankruptcy proceedings or otherwise in default or in risk of being in","page_number":118,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"2ae5c2ad-5474-4795-8c29-dcb689b1da45","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":118,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"217bdc3a-d6d0-4c2f-ab32-052ad4587017","block_type":"box","text":"rated in the lower rating categories by one or more nationally recognized statistical rating organizations","page_number":118,"box":{"x":117,"y":754,"width":762,"height":12}},{"id":"bf4959b1-a1c1-48ce-a7f9-31b28b6a852a","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":118,"box":{"x":117,"y":769,"width":709,"height":12}},{"id":"d831933a-e2f7-4f6a-93c1-65a343dcfa5d","block_type":"box","text":"judgment of the Manager of equivalent quality (“Distressed Securities”). Investment in Distressed","page_number":118,"box":{"x":115,"y":785,"width":719,"height":12}},{"id":"454ee20a-8a11-4b21-af50-a3b43d4acd4c","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":118,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"85a3beeb-7234-47ac-b98a-e45751a05cd8","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely","page_number":118,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"b9157b1c-9a2e-452a-9236-cef5cc34a4be","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":118,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"f371308d-59b3-42e8-b6fb-9e7e4b8fedac","block_type":"box","text":"of reorganization pursuant to which the Fund will receive new securities in return for the Distressed","page_number":118,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"a7fe3ea0-0035-458d-8d34-278c282153ff","block_type":"box","text":"Securities. However, there can be no assurance that such an exchange offer will be made or that such","page_number":118,"box":{"x":116,"y":878,"width":766,"height":12}},{"id":"ad5718a2-0f7b-46ea-82fe-b97a094e84d0","block_type":"box","text":"II-32","page_number":118,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"211b2f57-82e6-4357-8100-ade0a7da2b66","block_type":"box","text":"NM1026U-6042785-118/259","page_number":118,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b2670404-fc63-4529-b900-f9eee92645d9","block_type":"box","text":"a plan of reorganization will be adopted. In addition, a significant period of time may pass between the","page_number":119,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"825f3f92-4d28-475f-bd4b-ecd024a0790c","block_type":"box","text":"time at which a Fund makes its investment in Distressed Securities and the time that any such","page_number":119,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"f73fc025-775c-43c5-97a0-5da2d5b3f3bd","block_type":"box","text":"exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Fund will","page_number":119,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"644714bc-2eaf-4a4e-a15f-a93d6bd51f7a","block_type":"box","text":"receive any interest payments on the Distressed Securities, the Fund will be subject to significant","page_number":119,"box":{"x":117,"y":134,"width":725,"height":12}},{"id":"1d748f09-52e2-4b9a-960e-5c0d178432c1","block_type":"box","text":"uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":119,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"cbb3be71-797f-4e01-a99f-c53a47901766","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment.","page_number":119,"box":{"x":117,"y":165,"width":741,"height":12}},{"id":"c3269cd1-78ba-4962-8603-6e491f5a65ba","block_type":"box","text":"Therefore, to the extent the Fund seeks capital appreciation through investment in distressed","page_number":119,"box":{"x":116,"y":180,"width":696,"height":12}},{"id":"111379cb-9298-4493-bad9-58ede4d5ef3e","block_type":"box","text":"securities, the Fund’s ability to achieve current income for its shareholders may be diminished. The","page_number":119,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"c6de6148-adeb-429c-8618-651bcb7415a0","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":119,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"a45478e9-19a6-4cd9-96a2-cdd06865a3f7","block_type":"box","text":"the obligations evidenced by the distressed securities will eventually be satisfied (","page_number":119,"box":{"x":116,"y":227,"width":605,"height":12}},{"id":"92a6de36-f527-4622-91c0-7ea0859b4b9b","block_type":"box","text":"e.g.","page_number":119,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"3df4c8fe-51db-4b1a-bb6a-d447a90d5a2b","block_type":"box","text":", through a","page_number":119,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"0ca31504-34ff-45f2-a7a6-9c8eb58934b1","block_type":"box","text":"liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the distressed","page_number":119,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"cd69369b-390e-4b5c-89d0-62fc0d9bafb7","block_type":"box","text":"securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":119,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"9fe2a8b7-7e9b-4d86-9430-487ed88909b6","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there","page_number":119,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"70e83d9d-34ae-47f9-8c76-8da796c73875","block_type":"box","text":"can be no assurance that the securities or other assets received by a Fund in connection with such","page_number":119,"box":{"x":116,"y":289,"width":740,"height":12}},{"id":"a2d71d26-2dc4-4c95-ac48-a7336bfaaa09","block_type":"box","text":"exchange offer or plan of reorganization will not have a lower value or income potential than may have","page_number":119,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"8815c26d-f2fc-4418-9f27-082bf87272d3","block_type":"box","text":"been anticipated when the investment was made or no value. Moreover, any securities received by a","page_number":119,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"7c0e58f2-4015-4715-b88a-6ea9c25e2482","block_type":"box","text":"Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale.","page_number":119,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"3d13e915-0bbb-4036-b894-7e042a46dd24","block_type":"box","text":"Similarly, if a Fund participates in negotiations with respect to any exchange offer or plan of","page_number":119,"box":{"x":116,"y":351,"width":683,"height":12}},{"id":"3bed7060-249d-4727-b188-0cbf61942766","block_type":"box","text":"reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from","page_number":119,"box":{"x":117,"y":366,"width":726,"height":12}},{"id":"be1230d5-bb28-423c-bb80-75d321e8dada","block_type":"box","text":"disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":119,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"e9c36cc7-24d0-4db1-b11c-4d0a49e5fcad","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by","page_number":119,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"284104cf-a7ad-452f-b580-5c13fb46ef15","block_type":"box","text":"an investor. The Fund, however, will not make investments for the purpose of exercising day-to-day","page_number":119,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"a2890491-cbb6-4296-83b8-547761a56a9b","block_type":"box","text":"management of any issuer’s affairs.","page_number":119,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"de20946f-2fc5-4106-a5d7-34404350447b","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":119,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"629bdb07-ab1d-43ce-beb5-baf2e4f6e8f0","block_type":"box","text":"Although a Fund does not seek to","page_number":119,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"cd007cd3-7ac8-442a-851d-549522686202","block_type":"box","text":"implement a specific sustainability objective, strategy or process unless disclosed in its Prospectus,","page_number":119,"box":{"x":117,"y":475,"width":741,"height":12}},{"id":"880661cf-a726-47be-ab38-c080d549e379","block_type":"box","text":"Fund management will consider ESG factors as part of the investment process for the Fund. Fund","page_number":119,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"685a5ff6-83b8-4921-8266-f24ac5c6250f","block_type":"box","text":"management views ESG integration as the practice of incorporating financially material ESG data or","page_number":119,"box":{"x":117,"y":506,"width":747,"height":12}},{"id":"5f8a231e-4f6c-407e-93e3-5e246ca819ac","block_type":"box","text":"information into investment processes with the objective of enhancing risk-adjusted returns. These","page_number":119,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"9ef60426-a70d-4f46-9002-70caa4d9b3dd","block_type":"box","text":"ESG considerations will vary depending on a Fund’s particular investment strategies and may include","page_number":119,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"09654b69-dc96-4935-a2d0-147a819a1420","block_type":"box","text":"consideration of third-party research as well as consideration of proprietary BlackRock research across","page_number":119,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"3e4fe2aa-2cf0-455c-aaeb-6ddfb52e55af","block_type":"box","text":"the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":119,"box":{"x":116,"y":568,"width":725,"height":12}},{"id":"0df3636d-cae9-4d5f-a4b7-db342ef814f6","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be","page_number":119,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"1102488a-9ae0-46b9-b739-50cfff3f8cc4","block_type":"box","text":"relevant with respect to all issuers that are eligible for investment.","page_number":119,"box":{"x":117,"y":599,"width":490,"height":12}},{"id":"eedf1a28-2fa8-482c-bdeb-22f31baa4d40","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. While","page_number":119,"box":{"x":117,"y":630,"width":769,"height":12}},{"id":"95899000-609c-4285-a920-420f11f606de","block_type":"box","text":"Fund management views ESG considerations as having the potential to contribute to a Fund’s long","page_number":119,"box":{"x":117,"y":645,"width":740,"height":12}},{"id":"060c8128-a2f8-486d-981c-e31c0ade4361","block_type":"box","text":"term performance, there is no guarantee that such results will be achieved.","page_number":119,"box":{"x":116,"y":661,"width":555,"height":12}},{"id":"5c6efcd8-6930-4cd3-b885-4e2a4064a809","block_type":"box","text":"Equity Securities.","page_number":119,"box":{"x":116,"y":692,"width":140,"height":12}},{"id":"3da5618a-e302-42d1-b535-64b06a58a066","block_type":"box","text":"Certain Funds may invest in equity securities, which include common stock and, for","page_number":119,"box":{"x":263,"y":692,"width":618,"height":12}},{"id":"2dda79ee-cd5b-4f38-a4b6-4969a04e218e","block_type":"box","text":"certain Funds, preferred stock (including convertible preferred stock); bonds; stock purchase warrants","page_number":119,"box":{"x":116,"y":707,"width":755,"height":12}},{"id":"cd8492de-99cb-469d-acef-4a36cc98204f","block_type":"box","text":"and rights; equity interests in trusts; general and limited partnerships and limited liability companies;","page_number":119,"box":{"x":116,"y":723,"width":739,"height":12}},{"id":"4b711c38-ccb5-43f5-9e15-21fdbf423d57","block_type":"box","text":"and depositary receipts. 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The","page_number":119,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"34f8d9f4-ee83-40cc-832a-b5a6a6504309","block_type":"box","text":"value of equity securities purchased by the Fund could decline if the financial condition of the","page_number":119,"box":{"x":116,"y":785,"width":689,"height":12}},{"id":"3c97c3f6-c132-47c3-a224-3698939478d6","block_type":"box","text":"companies the Fund invests in decline or if overall market and economic conditions deteriorate. They","page_number":119,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"12168d1f-f10a-4fc5-bc19-bc493eed2eb1","block_type":"box","text":"may also decline due to factors that affect a particular industry or industries, such as labor shortages or","page_number":119,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"df5d013c-9d47-4df1-8641-f57bbea14d54","block_type":"box","text":"increase in production costs and competitive conditions within an industry. In addition, they may","page_number":119,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"1044cab1-0346-4ecd-8e74-dd2181d031da","block_type":"box","text":"decline due to general market conditions that are not specifically related to a company or industry,","page_number":119,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"775b4704-0c20-446e-870d-ffd6713a40ad","block_type":"box","text":"such as real or perceived adverse economic conditions, changes in the general outlook for corporate","page_number":119,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"d177fa2e-fd47-4e26-a3ac-ccba65be7bf2","block_type":"box","text":"earnings, changes in interest or currency rates or generally adverse investor sentiment.","page_number":119,"box":{"x":116,"y":878,"width":654,"height":12}},{"id":"85e2b523-7d4d-4763-8773-3d5dba6e7d63","block_type":"box","text":"II-33","page_number":119,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"69f76281-2512-4250-bdfb-43064839e8bf","block_type":"box","text":"NM1026U-6042785-119/259","page_number":119,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5dad68bf-7018-4ef4-93f3-91b0e9aa8b02","block_type":"box","text":"From time to time certain of the Funds may invest in","page_number":120,"box":{"x":117,"y":87,"width":368,"height":12}},{"id":"9b86207e-c181-462c-b80d-de4641456478","block_type":"box","text":"shares of companies through initial public offerings","page_number":120,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"0c22cb85-71d9-44a9-9c23-366ba6974dd3","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds.","page_number":120,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"3d6482c1-7ca0-4422-a4ac-ca32ac1c991a","block_type":"box","text":"There is no assurance that any Fund will have continued a","page_number":120,"box":{"x":116,"y":118,"width":415,"height":12}},{"id":"5ba46e4c-c068-4e8d-8474-e5900f5f5a4d","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":120,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"5c6444b4-8a70-425f-b4d3-dff7e9c3de8c","block_type":"box","text":"should not rely on these past gains as an indication of future performance. The investment performance of","page_number":120,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"303e7cef-0319-4041-917c-90e9bcbd5ad8","block_type":"box","text":"a Fund during periods when it is unable to invest signifi","page_number":120,"box":{"x":116,"y":149,"width":389,"height":12}},{"id":"cf9ed981-f54e-4466-b323-98b8147f1103","block_type":"box","text":"cantly or at all in IPOs may be lower than during","page_number":120,"box":{"x":506,"y":149,"width":345,"height":12}},{"id":"36b46d64-e7fb-47c7-a783-c153760fb5ff","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":120,"box":{"x":117,"y":165,"width":694,"height":11}},{"id":"6907c5bf-3a1f-4e33-9657-abdb3e0273c5","block_type":"box","text":"performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as","page_number":120,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"c1592ae0-4032-4f96-a032-81b2657158cc","block_type":"box","text":"investing in companies with smaller market capita","page_number":120,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"1a35d7f2-7549-4e15-be07-5a7881e45b02","block_type":"box","text":"lizations. Securities issued in IPOs have no trading","page_number":120,"box":{"x":470,"y":196,"width":364,"height":12}},{"id":"c636ca0e-b982-4f78-a03b-9b34e3055591","block_type":"box","text":"history, and information about the companies may be av","page_number":120,"box":{"x":117,"y":211,"width":399,"height":12}},{"id":"28bb2dce-a598-4bfa-86ab-4e8f11343df8","block_type":"box","text":"ailable for very limited periods. In addition, the","page_number":120,"box":{"x":516,"y":211,"width":330,"height":12}},{"id":"cb6d71fb-b966-4f6d-8693-cb923adae66f","block_type":"box","text":"prices of securities sold in IPOs may be highly volatile","page_number":120,"box":{"x":117,"y":227,"width":380,"height":12}},{"id":"f52ef20e-56b7-49e6-8abb-98ce3733a839","block_type":"box","text":"or may decline shortly after the initial public offering.","page_number":120,"box":{"x":497,"y":227,"width":377,"height":12}},{"id":"785bc197-f240-4b84-815f-96ff7c24aace","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These","page_number":120,"box":{"x":116,"y":258,"width":685,"height":12}},{"id":"a2b821dc-2de3-40bf-a254-9a64132460b1","block_type":"box","text":"organizations will normally have more limited product lines, markets and financial resources and will be","page_number":120,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"b5f44992-e904-4e9f-9ca2-e514a31c27b7","block_type":"box","text":"dependent upon a more limited management group than larger capitalized companies. In addition, it is","page_number":120,"box":{"x":116,"y":289,"width":764,"height":12}},{"id":"b7ef2658-aa95-4a7e-a23e-55b3c613a2ea","block_type":"box","text":"more difficult to get information on smaller companies, which tend to be less well known, have shorter","page_number":120,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"473703ff-b783-4834-ae62-b54e9082b4be","block_type":"box","text":"operating histories, do not have significant ownership by large investors and are followed by relatively","page_number":120,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"e87d18f9-4bc6-44df-ba34-83b025b954e3","block_type":"box","text":"few securities analysts. The securities of smaller capitalized companies are often traded in the OTC","page_number":120,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"669cdd1e-fd6d-4ad5-b517-b76982123f31","block_type":"box","text":"markets and may have fewer market makers and wider price spreads. This may result in greater price","page_number":120,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"1355a6c0-468f-43e8-a79b-7b96c25a6213","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":120,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"a6f1f493-37a2-47cf-a5cc-8e89e11b84ff","block_type":"box","text":"more established companies.","page_number":120,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"d8948623-da11-4ca9-b659-96941e2179a2","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks","page_number":120,"box":{"x":117,"y":413,"width":693,"height":12}},{"id":"3fa1655a-c7d0-48f7-8134-edbe6180cf52","block_type":"box","text":"associated with investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds","page_number":120,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"62d11a1f-9102-4a37-a5bb-4bda87269478","block_type":"box","text":"may also invest in shares of private companies, which are subject to the risks of “Illiquid Investments”","page_number":120,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"c2708dbe-f8f0-48e7-8846-88fe2f9a87b5","block_type":"box","text":"and “Restricted Securities” described below.","page_number":120,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"d34ad6bc-9d4c-49c4-9385-8e784db6a7ba","block_type":"box","text":"Real Estate-Related Securities.","page_number":120,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"47881fa4-633b-4f04-a786-d6ce3c7a0897","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may","page_number":120,"box":{"x":349,"y":490,"width":535,"height":12}},{"id":"980e5a6b-b6fd-4002-84ae-d7474be4a3c7","block_type":"box","text":"invest in equity securities of issuers that are principally engaged in the real estate industry. Such","page_number":120,"box":{"x":117,"y":506,"width":719,"height":12}},{"id":"b0289e40-f938-4200-849d-947c0156cb24","block_type":"box","text":"investments are subject to certain risks associated with the ownership of real estate and with the real","page_number":120,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"c92ba325-0875-4d5f-aa70-76878d71035f","block_type":"box","text":"estate industry in general. 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The securities of smaller or emerging growth companies may be subject to more abrupt or","page_number":121,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"43175a24-95fd-46e1-af76-c50c182e4d9f","block_type":"box","text":"erratic market movements than larger, more established companies or the market average in general.","page_number":121,"box":{"x":116,"y":103,"width":761,"height":12}},{"id":"2f96c934-7303-46c3-a1bc-53ac856f3c48","block_type":"box","text":"These companies may have limited product lines, markets or financial resources, or they may be","page_number":121,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"49614a1b-eb83-433d-95bc-9f4c1ced4580","block_type":"box","text":"dependent on a limited management group.","page_number":121,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"7d42d43b-468a-42e3-92c7-262d9ab04d18","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be","page_number":121,"box":{"x":117,"y":163,"width":771,"height":12}},{"id":"d3735bb5-203d-41c8-9cc2-387d2002b7ac","block_type":"box","text":"considered speculative. Full development of these companies and trends frequently takes time.","page_number":121,"box":{"x":116,"y":178,"width":713,"height":12}},{"id":"60baad1b-a65d-4180-b707-4767c759b138","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":121,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"65b6ea5a-06dc-4c18-b313-af7ffa667ec1","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":121,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"d4b1ae62-ed73-48cc-b8a5-c158d229c7cb","block_type":"box","text":"securities exchange. As a result, the disposition by a Fund of portfolio securities to meet redemptions","page_number":121,"box":{"x":116,"y":238,"width":756,"height":12}},{"id":"a1620f20-8425-466b-9ad9-f7ded91e96d6","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":121,"box":{"x":116,"y":254,"width":749,"height":12}},{"id":"6ea2a3f2-f263-41db-bcd4-96e4b52022f1","block_type":"box","text":"these securities at a discount from market prices or during periods when, in Fund management’s","page_number":121,"box":{"x":116,"y":269,"width":722,"height":12}},{"id":"a156b3c6-284c-4c81-a153-659b1193a56f","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":121,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"4356462a-4b1f-48b3-9d1f-050c396ff22f","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee","page_number":121,"box":{"x":116,"y":314,"width":714,"height":12}},{"id":"bfc29dbb-2fc1-44ad-aad8-779625578108","block_type":"box","text":"successful investment results. Careful initial selection is particularly important in this area as many new","page_number":121,"box":{"x":116,"y":329,"width":770,"height":12}},{"id":"cf5cbde7-3351-450e-8790-6e47e178f3e7","block_type":"box","text":"enterprises have promise but lack certain of the fundamental factors necessary to prosper. Investing in","page_number":121,"box":{"x":116,"y":345,"width":767,"height":12}},{"id":"ac760f35-bf01-466f-9b68-80ec2bbe6896","block_type":"box","text":"small cap and emerging growth companies requires specialized research and analysis.","page_number":121,"box":{"x":116,"y":360,"width":651,"height":12}},{"id":"345e900f-d941-45a1-bb7e-07bbacb5cbd2","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into","page_number":121,"box":{"x":117,"y":389,"width":753,"height":12}},{"id":"9a140056-8820-4d14-ac1d-8d9491d28bf0","block_type":"box","text":"significant business enterprises. A Fund may invest in securities of small issuers in the relatively early","page_number":121,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"56d1378e-39b1-481a-955b-df833d165837","block_type":"box","text":"stages of business development that have a new technology, a unique or proprietary product or","page_number":121,"box":{"x":116,"y":420,"width":714,"height":12}},{"id":"8d5b89e9-9819-408f-8eff-dda59ba3bf29","block_type":"box","text":"service, or a favorable market position.","page_number":121,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"f19959f7-d205-412d-962d-1c536f5d6ac1","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":121,"box":{"x":117,"y":465,"width":757,"height":12}},{"id":"caa51772-8d2c-43a1-b6fb-2489e98df9e9","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying","page_number":121,"box":{"x":116,"y":480,"width":763,"height":13}},{"id":"4fc85e94-66dd-434f-b6dd-96253b37c6cb","block_type":"box","text":"stages of their business development. The market valuation of small cap issuers tends to fluctuate","page_number":121,"box":{"x":116,"y":496,"width":734,"height":12}},{"id":"92cbbea4-3956-4057-a6e5-558fd3f437bd","block_type":"box","text":"during economic or market cycles.","page_number":121,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"924ab855-d705-4e8e-a2a0-8142a13d68ee","block_type":"box","text":"Tracking Stocks","page_number":121,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"9f557f6d-7985-4e1b-b302-0db7aa723889","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a","page_number":121,"box":{"x":237,"y":540,"width":604,"height":13}},{"id":"13953ceb-0fb7-49e9-8e2b-3222b2e0d260","block_type":"box","text":"specific business unit or operating division within a larger company and is designed to “track” the","page_number":121,"box":{"x":116,"y":556,"width":723,"height":12}},{"id":"8665961a-edb2-434b-9585-846d82a425ac","block_type":"box","text":"performance of such business unit or division. The tracking stock may pay dividends to shareholders","page_number":121,"box":{"x":117,"y":571,"width":751,"height":13}},{"id":"22909f42-7db5-4762-9533-58f286bc9163","block_type":"box","text":"independent of the parent company. The parent company, rather than the business unit or division,","page_number":121,"box":{"x":117,"y":587,"width":739,"height":12}},{"id":"a5e11911-6785-4a97-83da-d8ac3800b929","block_type":"box","text":"generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same","page_number":121,"box":{"x":116,"y":602,"width":768,"height":13}},{"id":"8c13bbfd-8087-4882-b6fc-df2f4a6d8fa6","block_type":"box","text":"rights as holders of the company’s common stock.","page_number":121,"box":{"x":117,"y":618,"width":377,"height":12}},{"id":"66fc4790-cf22-4484-bd48-9cf9ec43c6b5","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":121,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"facc422e-8e40-4e60-baa3-0ee9a3f2d992","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes","page_number":121,"box":{"x":389,"y":647,"width":464,"height":12}},{"id":"798d8549-b95f-4ef1-a358-3c0d5dd120d0","block_type":"box","text":"representing debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and","page_number":121,"box":{"x":117,"y":663,"width":765,"height":12}},{"id":"7daa1f9f-42e6-402c-8029-bb06bc54c716","block_type":"box","text":"ETFs. An ETN’s returns are based on the performance of one or more underlying assets, reference","page_number":121,"box":{"x":117,"y":678,"width":737,"height":12}},{"id":"e7973e1c-fe6e-429a-b46b-de3c1b96b836","block_type":"box","text":"rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange and","page_number":121,"box":{"x":117,"y":694,"width":724,"height":12}},{"id":"eaebce95-2772-4803-b330-dcd70e73edd2","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":121,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"0811ffd8-2da0-4872-abf5-88f581e840eb","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":121,"box":{"x":116,"y":725,"width":748,"height":12}},{"id":"de379937-049b-4527-9175-03d9d3c9490d","block_type":"box","text":"(“reference instrument”) to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do","page_number":121,"box":{"x":117,"y":740,"width":753,"height":12}},{"id":"4fdb96d1-4856-4ed4-b793-7b0411500048","block_type":"box","text":"not make periodic interest payments, and principal is not protected.","page_number":121,"box":{"x":117,"y":756,"width":497,"height":12}},{"id":"343fc9f1-759c-4b21-ba8e-4b6a6b5602de","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":121,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"06e72690-4b90-431c-b2fb-fdcc5531dfa9","block_type":"box","text":"demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable","page_number":121,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"f5a10314-21f8-4d00-bbc9-a94099675d5d","block_type":"box","text":"interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and","page_number":121,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"3882b619-9312-45aa-943a-bb890d2cac64","block_type":"box","text":"economic, legal, political or geographic events that affect the reference instrument. ETNs are subject to","page_number":121,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"d7081296-e3cd-4c67-9619-0831780c78ed","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":121,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"325ad36b-8924-4edf-a7e9-a096fa054b7b","block_type":"box","text":"the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will bear","page_number":121,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"6840c5a0-1dcb-47b1-8cc3-c72751678b33","block_type":"box","text":"its proportionate share of any fees and expenses borne by the ETN.","page_number":121,"box":{"x":117,"y":878,"width":509,"height":12}},{"id":"c9ac1b35-b9da-4ae6-8742-cffbff27a468","block_type":"box","text":"II-35","page_number":121,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6a63343a-0d13-4ce2-b1cf-9f7dad3943cc","block_type":"box","text":"NM1026U-6042785-121/259","page_number":121,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a7ecd70c-121d-4344-8e20-162eb88a17cf","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference","page_number":122,"box":{"x":116,"y":87,"width":720,"height":12}},{"id":"66219311-7fc8-4d60-83ac-d629e38ea6c8","block_type":"box","text":"instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument.","page_number":122,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"0cee4181-c600-470e-ae49-1ae32465dd39","block_type":"box","text":"Some ETNs that use leverage may, at times, be illiquid and","page_number":122,"box":{"x":116,"y":118,"width":446,"height":12}},{"id":"498cc222-e19f-4f66-8381-eff51e94148b","block_type":"box","text":"may be difficult to purchase or sell at a fair","page_number":122,"box":{"x":563,"y":118,"width":319,"height":12}},{"id":"df0b3173-4e52-48fe-9738-6b0a382c5931","block_type":"box","text":"price. Levered ETNs are subject to the same risk as other instruments that use leverage in any form.","page_number":122,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"8ea501e7-030b-4606-9b66-24a551ea2626","block_type":"box","text":"While leverage allows for greater potential return, the potential for loss is also greater. Finally,","page_number":122,"box":{"x":116,"y":149,"width":700,"height":12}},{"id":"deb76a48-63b8-4b1a-a6cc-800cc0086bf6","block_type":"box","text":"additional losses may be incurred if the investment loses value because, in addition to the money lost","page_number":122,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"a9095080-d138-4902-8b49-c45d482d8fee","block_type":"box","text":"on the investment, the loan still needs to be repaid.","page_number":122,"box":{"x":116,"y":180,"width":384,"height":12}},{"id":"31cb9046-2a08-42f7-b9f0-69cca19bdd6c","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its","page_number":122,"box":{"x":117,"y":210,"width":685,"height":12}},{"id":"ec3f89ae-90e8-44e2-b1fe-af952d20174d","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":122,"box":{"x":116,"y":226,"width":757,"height":12}},{"id":"7d3aac7e-b5c2-48b7-889c-b99f80c6ef1e","block_type":"box","text":"change in the underlying reference instrument. The market value of ETN shares may differ from the","page_number":122,"box":{"x":116,"y":241,"width":744,"height":12}},{"id":"bb048e30-77b5-45a6-9ab5-6ce60c6b22b8","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":122,"box":{"x":116,"y":257,"width":748,"height":12}},{"id":"2ce89dff-7150-4703-8211-57c2f4cb08c5","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":122,"box":{"x":116,"y":272,"width":732,"height":12}},{"id":"36ed2cbd-1605-4854-b948-5ad2f8e99ee4","block_type":"box","text":"demand in the market for the assets underlying the reference instrument that the ETN seeks to track.","page_number":122,"box":{"x":116,"y":288,"width":755,"height":12}},{"id":"379e237b-f861-48f6-b747-77e0d9dbdec8","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":122,"box":{"x":116,"y":318,"width":761,"height":12}},{"id":"c137f81c-3c6a-4d64-8221-0b8d38b9efad","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":122,"box":{"x":117,"y":333,"width":728,"height":12}},{"id":"385f5e56-8401-4c50-bcf4-b6038ed2a710","block_type":"box","text":"availability of a secondary market. An investor in an ETN could lose some or all of the amount","page_number":122,"box":{"x":116,"y":349,"width":701,"height":12}},{"id":"2952d11f-ae9c-42c9-b989-e61fd71a60ff","block_type":"box","text":"invested.","page_number":122,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"7f19e872-4baf-4f8f-a0b1-3e4f0d4d65bf","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a","page_number":122,"box":{"x":117,"y":394,"width":739,"height":12}},{"id":"50d7da22-9c95-4e65-830e-414c5dffcae4","block_type":"box","text":"court may not uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and","page_number":122,"box":{"x":116,"y":410,"width":742,"height":12}},{"id":"2b9e6956-1c87-40b7-b7ad-8ac045f51bb5","block_type":"box","text":"character of income and gains derived by a Fund from investments in ETNs may be affected by future","page_number":122,"box":{"x":116,"y":425,"width":762,"height":12}},{"id":"c471f595-9a5d-4045-9b8c-564ea0b7ab59","block_type":"box","text":"legislation, possibly on a retroactive basis.","page_number":122,"box":{"x":117,"y":441,"width":318,"height":12}},{"id":"b8442491-3de6-443e-afdd-1224f0066425","block_type":"box","text":"Foreign Investments.","page_number":122,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"512cfc6d-266c-4444-9e95-80d8cc0c6d1c","block_type":"box","text":"Foreign Investment Risks.","page_number":122,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"ef401ee2-9319-4f56-a366-be933d1a1e1a","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from","page_number":122,"box":{"x":310,"y":493,"width":540,"height":13}},{"id":"4d758775-ed68-49d2-ae88-d80b53cb6f0b","block_type":"box","text":"issuers located in emerging market countries. These securities may be denominated in U.S. dollars or","page_number":122,"box":{"x":117,"y":509,"width":760,"height":12}},{"id":"75a43c92-efbe-4384-ac26-43779ed7bd8c","block_type":"box","text":"in a foreign currency. Investing in foreign securities involves risks not typically associated with investing","page_number":122,"box":{"x":117,"y":524,"width":770,"height":13}},{"id":"0c4a9311-53ea-4a1c-a832-84dea2175f52","block_type":"box","text":"in securities of companies organized and operated in the United States that can increase the chances","page_number":122,"box":{"x":117,"y":540,"width":759,"height":12}},{"id":"d9368514-c89b-4959-a016-8476fa305f0a","block_type":"box","text":"that a Fund will lose money.","page_number":122,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"f317416d-6d43-4d41-b7d8-20331f1dc8aa","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be","page_number":122,"box":{"x":116,"y":586,"width":762,"height":12}},{"id":"b63195a4-5257-4d77-83ce-3c7a6f4261d4","block_type":"box","text":"foreign securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are","page_number":122,"box":{"x":116,"y":601,"width":766,"height":12}},{"id":"a68ee92a-8132-4358-985a-ec4824361723","block_type":"box","text":"conducted from the U.S., (ii) the company’s equity securities trade principally on a U.S. stock","page_number":122,"box":{"x":116,"y":617,"width":694,"height":12}},{"id":"2350caad-3cd7-4c19-9fc0-13ee42d6d5ce","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":122,"box":{"x":116,"y":632,"width":729,"height":12}},{"id":"2e8ccd37-d8a1-48d8-94c9-f27f52454def","block_type":"box","text":"securities is included in the Fund’s primary U.S. benchmark index.","page_number":122,"box":{"x":116,"y":648,"width":496,"height":12}},{"id":"f3ba42a4-cf2d-4361-99fb-a0d27636fba1","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations","page_number":122,"box":{"x":117,"y":678,"width":721,"height":12}},{"id":"1951b24b-0b6d-49c5-8ca8-a83f1b06f7fc","block_type":"box","text":"issued or guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities","page_number":122,"box":{"x":117,"y":693,"width":762,"height":12}},{"id":"29f0002e-a09f-452e-bccf-cc3761b93a91","block_type":"box","text":"or political subdivisions, including a foreign state, province or municipality; (b) debt obligations of","page_number":122,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"2516fe24-1929-406e-873a-7d5b1bb7bf05","block_type":"box","text":"supranational organizations; (c) debt obligations of foreign banks and bank holding companies;","page_number":122,"box":{"x":116,"y":724,"width":703,"height":12}},{"id":"e81c0d5c-08dc-4282-83b5-8b3964628c94","block_type":"box","text":"(d) debt obligations of domestic banks and corporations issued in foreign currencies; (e) debt","page_number":122,"box":{"x":117,"y":740,"width":689,"height":12}},{"id":"a9401bcb-fbf6-49c8-b3a0-23bce93a20ee","block_type":"box","text":"obligations denominated in the Euro; and (f) foreign corporate debt securities and commercial paper.","page_number":122,"box":{"x":116,"y":755,"width":746,"height":12}},{"id":"81d28b59-9da1-49eb-bd0f-126c16364d74","block_type":"box","text":"Such securities may include loan participations and assignments, convertible securities and","page_number":122,"box":{"x":116,"y":771,"width":678,"height":12}},{"id":"f81f96d9-c272-4ea5-94ac-b96a7927a76c","block_type":"box","text":"zero-coupon securities.","page_number":122,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"5b3ef410-881b-4484-9ad4-5e3feb7bd2bc","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign","page_number":122,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"0cf1968b-a45b-41a8-a4ac-723d38c3c0df","block_type":"box","text":"withholding taxes.","page_number":122,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"8a1420f7-52f9-4d6c-a437-85e46e34daad","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign","page_number":122,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"3bb46951-a76a-4c1c-b11b-bfedc972be01","block_type":"box","text":"exchanges or in foreign markets that are closed when the securities exchange on which the Fund’s","page_number":122,"box":{"x":116,"y":877,"width":740,"height":12}},{"id":"88af8584-cfa0-459f-bee3-ed8a74b7678b","block_type":"box","text":"II-36","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"60f1939b-c865-4557-9a2b-cbba4cf4a0e9","block_type":"box","text":"NM1026U-6042785-122/259","page_number":122,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"131b685d-fe47-4aff-b996-74c9488058c9","block_type":"box","text":"shares trade is open, there are likely to be deviations between the current price of such an underlying","page_number":123,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"f4ae7286-286d-42a2-a4ba-93f06a9c916e","block_type":"box","text":"security and the last quoted price for the underlying security (","page_number":123,"box":{"x":116,"y":102,"width":454,"height":13}},{"id":"6b0ede14-c281-4e5d-96e6-757723f80cb9","block_type":"box","text":"i.e.","page_number":123,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"a1347185-8d4c-42da-8d3b-299ea0f070d4","block_type":"box","text":", the Fund’s quote from the closed","page_number":123,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"b9ce806c-aeb4-4818-a6c6-4c430e294d21","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":123,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"332b7eb9-b0e0-408c-beb6-f6f5d9f51ce7","block_type":"box","text":"portion of the Fund’s underlying securities or other instruments trade on that closed foreign market or","page_number":123,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"77fb52cb-9fbf-47fc-b6cf-8e29d0bc9f7e","block_type":"box","text":"when the foreign market is closed for unscheduled reasons. These deviations may result in premiums","page_number":123,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"118ed3c5-384b-422f-82eb-2bfa2f14cead","block_type":"box","text":"or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":123,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"0f8fc940-5c28-413a-bbe9-910724ba57e6","block_type":"box","text":"Foreign Market Risk.","page_number":123,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"b94e2342-bcaa-4c28-bb14-b83ecc7323e0","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more","page_number":123,"box":{"x":269,"y":196,"width":521,"height":12}},{"id":"1aa9a8ae-6b52-4c96-8bba-e5b33f032f09","block_type":"box","text":"diversification than a Fund that invests only in the United States because securities traded on foreign","page_number":123,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"b919104e-f32f-48e2-9846-ae2d08426987","block_type":"box","text":"markets have often (though not always) performed differently from securities traded in the United","page_number":123,"box":{"x":117,"y":227,"width":715,"height":12}},{"id":"a8cceb31-1ba0-4613-8007-e686be769797","block_type":"box","text":"States. However, such investments often involve risks not present in U.S. investments that can increase","page_number":123,"box":{"x":116,"y":242,"width":769,"height":12}},{"id":"affc26f8-a4e3-464d-b99e-764fecdc2c4e","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":123,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"258faeea-699a-4c99-af0c-36b8213e70a9","block_type":"box","text":"are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it","page_number":123,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"decb9e78-c35e-4ba2-af20-46fcc2e10f2d","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":123,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"1a39ac45-cca3-4413-917f-7ed740405dbb","block_type":"box","text":"securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":123,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"af1ff460-54aa-4593-a1d8-e0476aa24274","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of","page_number":123,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"93b040ea-7491-48e3-bf16-8d4fdd8f1548","block_type":"box","text":"punitive taxes or tariffs. In addition, economic conditions, such as volatile currency exchange rates and","page_number":123,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"6dcdf77d-915b-445e-b33f-3c654f185081","block_type":"box","text":"interest rates, political events, military action and other conditions may, without prior warning, lead to the","page_number":123,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"f4196e5c-98af-41d9-97c5-67809e34af30","block_type":"box","text":"governments of certain countries, or the U.S. Government with respect to certain countries, prohibiting","page_number":123,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"511f1f4c-b8ba-4f83-99d7-0bbd3d66ea5b","block_type":"box","text":"or imposing substantial restrictions through capital controls and/or sanctions on foreign investing in the","page_number":123,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"d8f2acba-38ca-4541-b909-c20f89e30125","block_type":"box","text":"capital markets or certain industries in those countries. Capital controls and/or sanctions may include","page_number":123,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"7a103165-a6b7-46d2-ae9f-e4e52989efdb","block_type":"box","text":"the prohibition of, or restrictions on, the ability to own or transfer currency, securities, derivatives or","page_number":123,"box":{"x":116,"y":413,"width":730,"height":12}},{"id":"e061a2b9-b7e1-419e-8a52-6189e31ce44f","block_type":"box","text":"other assets and may also include retaliatory actions of one government against another government,","page_number":123,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"f8df245a-a672-4b76-8100-5942b346412b","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":123,"box":{"x":116,"y":444,"width":758,"height":12}},{"id":"fe280437-9cf9-414f-a222-bbc70fa70956","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the","page_number":123,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"d0e48956-58f1-497e-bf42-a390c3e0d0e6","block_type":"box","text":"ability to transfer the Fund’s assets or income back into the United States, and could negatively impact","page_number":123,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"4f691bf2-ceaa-43f5-aa03-a3f117d1cf5d","block_type":"box","text":"the value and/or liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the","page_number":123,"box":{"x":116,"y":490,"width":757,"height":12}},{"id":"5e0033ee-5b12-4899-ad1f-b7ccb873aee1","block_type":"box","text":"Fund to decline in value. Other potential foreign market risks include exchange controls, difficulties in","page_number":123,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"d5c8f734-bb5c-4c77-9a68-198b3c614625","block_type":"box","text":"pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal","page_number":123,"box":{"x":117,"y":521,"width":727,"height":12}},{"id":"6a527036-3a3b-4449-97f1-f2baf47a7137","block_type":"box","text":"judgments in foreign courts, and political and social conditions, such as diplomatic relations,","page_number":123,"box":{"x":115,"y":537,"width":680,"height":12}},{"id":"071e839f-6087-4b77-87b9-08c379767898","block_type":"box","text":"confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or","page_number":123,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"5ee12821-3331-455c-bb3f-f71bcfdbe7c1","block_type":"box","text":"change in) exchange control regulations. Legal remedies available to investors in certain foreign","page_number":123,"box":{"x":116,"y":568,"width":711,"height":12}},{"id":"37645ef0-1804-4e37-ac3b-aa51524dfbbe","block_type":"box","text":"countries may be less extensive than those available to investors in the United States or other foreign","page_number":123,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"89b65b5c-6c1a-4391-aaf1-d62049748353","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the","page_number":123,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"ca2cf511-aff2-4a44-a4aa-bca0e7a9259c","block_type":"box","text":"United States or abroad could result in appreciation or depreciation of portfolio securities and could","page_number":123,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"dd7534c3-8221-4312-ba3d-73b2eb13fc61","block_type":"box","text":"favorably or adversely affect a Fund’s operations.","page_number":123,"box":{"x":116,"y":630,"width":368,"height":12}},{"id":"9ffd2886-a35d-4cbb-81d4-64935cd38f9f","block_type":"box","text":"Foreign Economy Risk.","page_number":123,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"fd4f4900-cc9b-4d59-9776-562fdddebf03","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with","page_number":123,"box":{"x":295,"y":661,"width":579,"height":12}},{"id":"6fae8bf5-1e3d-437a-8bc7-eaa32bf10d2a","block_type":"box","text":"that of the United States with respect to such issues as growth of gross national product, reinvestment","page_number":123,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"499d9b02-73ac-4c5b-8d6c-aa3140ce4710","block_type":"box","text":"of capital, resources, and balance of payments position. Certain such economies may rely heavily on","page_number":123,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"7d94cbe6-d611-4f61-a9cb-40f6fcc39ca9","block_type":"box","text":"particular industries or foreign capital and are more vulnerable to diplomatic developments, the","page_number":123,"box":{"x":117,"y":707,"width":702,"height":12}},{"id":"9531a645-0f8a-4b50-8253-70e13c992191","block_type":"box","text":"imposition of economic sanctions against a particular country or countries, changes in international","page_number":123,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"a31cc556-d4e4-4697-823f-048c94ca962e","block_type":"box","text":"trading patterns, trade barriers, and other protectionist or retaliatory measures.","page_number":123,"box":{"x":116,"y":738,"width":582,"height":12}},{"id":"765de4a8-049a-4ea3-bb06-6a071fc815f5","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":123,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"4ac551f1-200f-4d39-9b50-91a90e6d0188","block_type":"box","text":"Because foreign securities generally are denominated and pay","page_number":123,"box":{"x":382,"y":769,"width":464,"height":12}},{"id":"f95100f6-1bae-4e3c-870f-ae223c758b99","block_type":"box","text":"dividends or interest in foreign currencies, the value of a Fund that invests in foreign securities as","page_number":123,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"da2a2443-436b-4d78-bea2-6d6a9e13ecb4","block_type":"box","text":"measured in U.S. dollars will be affected favorably or unfavorably by changes in exchange rates.","page_number":123,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"a750e395-3c6c-4258-b470-0a935afe58b9","block_type":"box","text":"Generally, when the U.S. dollar rises in value against a foreign currency, a security denominated in","page_number":123,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"13f5e90b-28f2-4fba-ad6c-a0326d20d0d7","block_type":"box","text":"that currency loses value because the currency is worth fewer U.S. dollars. Conversely, when the U.S.","page_number":123,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"e04b48a7-50d5-4ae8-a69f-c8c0728923ec","block_type":"box","text":"dollar decreases in value against a foreign currency, a security denominated in that currency gains","page_number":123,"box":{"x":116,"y":847,"width":737,"height":12}},{"id":"eb96c7eb-1570-4f48-ba43-e548b61f6706","block_type":"box","text":"value because the currency is worth more U.S. dollars. This risk, generally known as “currency risk,”","page_number":123,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"55dd7244-82a6-4f33-806d-b3f01527b3e3","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":123,"box":{"x":117,"y":878,"width":738,"height":12}},{"id":"d40b0c60-8d71-43bd-8472-9afad629d786","block_type":"box","text":"II-37","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2a4f8661-3563-4688-821b-646423d4116e","block_type":"box","text":"NM1026U-6042785-123/259","page_number":123,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9f08123c-b294-4eb0-a2bb-f36e06d13a11","block_type":"box","text":"increase those returns. Currency exchange rates can also be affected unpredictably by intervention by","page_number":124,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"4837422c-6215-41d3-94d2-9e612dc927ce","block_type":"box","text":"U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or","page_number":124,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"546bc118-96f7-448c-9f8c-d26272af5b3a","block_type":"box","text":"political developments in the United States or abroad.","page_number":124,"box":{"x":117,"y":118,"width":402,"height":12}},{"id":"255a2896-1f4f-4df7-9c28-dcb8c3b24db7","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards. Many foreign governments","page_number":124,"box":{"x":117,"y":149,"width":697,"height":12}},{"id":"33ae3204-d38d-45b2-9ae9-2093989a70b4","block_type":"box","text":"supervise and regulate stock exchanges, brokers and the sale of securities less than does the United","page_number":124,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"2c2b1a0c-c06f-476f-a6e5-c6410178367c","block_type":"box","text":"States. Some countries may not have laws to protect investors comparable to the U.S. securities laws.","page_number":124,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"0078ce02-d2fb-4917-afe5-da778871482c","block_type":"box","text":"For example, some foreign countries may have no laws or rules against insider trading. Insider trading","page_number":124,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"c5cbb2df-0788-401c-b3a9-ccaf7b55d01b","block_type":"box","text":"occurs when a person buys or sells a company’s securities based on nonpublic information about that","page_number":124,"box":{"x":116,"y":211,"width":760,"height":12}},{"id":"fd03542d-2fa4-4e5a-b977-5fd236892271","block_type":"box","text":"company. Accounting standards in other countries are not necessarily the same as in the United","page_number":124,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"0b556110-3e8b-4e8a-a6f7-10079d1bc3b7","block_type":"box","text":"States. If the accounting standards in another country do not require as much detail as U.S. accounting","page_number":124,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"faf12373-27a2-4ce6-81e4-90457b71862f","block_type":"box","text":"standards, it may be harder for Fund management to completely and accurately determine a","page_number":124,"box":{"x":116,"y":258,"width":691,"height":12}},{"id":"6d5f1bae-345f-4c31-82a4-6e9a1678bf47","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past","page_number":124,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"1d211f23-49a7-4691-a48e-ac6a96f8e9ee","block_type":"box","text":"imposed restrictions, through penalties and otherwise, on foreign investments by U.S. investors such","page_number":124,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"ee5013f7-b8fb-40dc-8d1e-a581d0cc94ca","block_type":"box","text":"as the Fund. If such restrictions should be reinstituted, it might become necessary for the Fund to","page_number":124,"box":{"x":116,"y":304,"width":727,"height":12}},{"id":"cc60a915-d3a6-405d-8527-a889fdaf0e66","block_type":"box","text":"invest all or substantially all of its assets in U.S. securities. Also, brokerage commissions and other","page_number":124,"box":{"x":117,"y":320,"width":737,"height":12}},{"id":"0bea1ae1-44ff-4292-a0e3-d35580cbccb9","block_type":"box","text":"costs of buying or selling securities often are higher in foreign countries than they are in the United","page_number":124,"box":{"x":116,"y":335,"width":736,"height":12}},{"id":"3ce00765-0004-4be6-9fee-275f693ba692","block_type":"box","text":"States. This reduces the amount the Fund can earn on its investments.","page_number":124,"box":{"x":116,"y":351,"width":532,"height":9}},{"id":"35ff47b3-6dce-40cf-8469-88dbb4e2a548","block_type":"box","text":"Certain Risks of Holding Fund Assets Outside the United States.","page_number":124,"box":{"x":117,"y":382,"width":477,"height":12}},{"id":"1cc5196c-cbfd-46a3-b5f0-16ffe5f9b1c9","block_type":"box","text":"A Fund generally holds its foreign","page_number":124,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"24801b6e-3cf0-4a68-a8f6-6ab30b2d5a92","block_type":"box","text":"securities and cash in foreign banks and securities depositories. Some foreign banks and securities","page_number":124,"box":{"x":116,"y":397,"width":743,"height":12}},{"id":"ceb26de7-8597-421f-a1b8-da6d80fe5d05","block_type":"box","text":"depositories may be recently organized or new to the foreign custody business. In addition, there may","page_number":124,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"dce1de20-58bb-4f8a-b03c-88b7b95d59a1","block_type":"box","text":"be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put","page_number":124,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"e8117a29-3a5c-4903-b4b5-944e130c3254","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":124,"box":{"x":117,"y":444,"width":747,"height":12}},{"id":"74055a6d-60cf-4cbd-b3cc-9eba9025561c","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":124,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"7664714c-93b1-4337-836c-e77c347eecee","block_type":"box","text":"hold securities in certain foreign markets than in the United States. The increased expense of investing","page_number":124,"box":{"x":117,"y":475,"width":768,"height":12}},{"id":"72171a47-9c89-4be1-b3d4-d7e05d0271fd","block_type":"box","text":"in foreign markets reduces the amount a Fund can earn on its investments and typically results in a","page_number":124,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"4a6a421b-5fd3-4868-9245-37940b0290f4","block_type":"box","text":"higher operating expense ratio for the Fund as compared to investment companies that invest only in","page_number":124,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"4d6d52a9-5210-4fbb-9b29-0c2fcf780186","block_type":"box","text":"the United States.","page_number":124,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"2143ef80-5483-491f-aff4-de913833500f","block_type":"box","text":"Publicly Available Information.","page_number":124,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"d4ce1a54-e42b-4c03-a17f-d1b0a53700f9","block_type":"box","text":"In general, less information is publicly available with respect to foreign","page_number":124,"box":{"x":340,"y":552,"width":529,"height":12}},{"id":"bcb954b3-b350-4727-804d-1be2b1ae8916","block_type":"box","text":"issuers than is available with respect to U.S. companies. Most foreign companies are also not subject","page_number":124,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"4911a7a0-1418-40b8-bdeb-0dde08bc8a8d","block_type":"box","text":"to the uniform accounting and financial reporting requirements applicable to issuers in the United","page_number":124,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"7f55f5ff-b80c-47ee-83b2-3817bb46be90","block_type":"box","text":"States. While the volume of transactions effected on foreign stock exchanges has increased in recent","page_number":124,"box":{"x":116,"y":599,"width":758,"height":12}},{"id":"5ece5668-73cc-48af-8b05-1f9750e129b2","block_type":"box","text":"years, it remains appreciably below that of the New York Stock Exchange. Accordingly, a Fund’s","page_number":124,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"b7777097-89ee-49a9-8bee-9c52991dc2e3","block_type":"box","text":"foreign investments may be less liquid than, and their prices may be more volatile than, comparable","page_number":124,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"c6986639-f4d2-4039-a0f0-b354cd9f2741","block_type":"box","text":"investments in securities in U.S. companies. In addition, there is generally less government supervision","page_number":124,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"31220b98-fcf1-4fd8-9dce-463c8b17e455","block_type":"box","text":"and regulation of securities exchanges, brokers and issuers in foreign countries than in the United","page_number":124,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"6d884194-608b-4c7d-abc6-3cf9bbb6fb3d","block_type":"box","text":"States.","page_number":124,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"f42fe3c5-b0fd-42ef-820b-877177a67f08","block_type":"box","text":"Settlement Risk.","page_number":124,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"cb02f2e5-34f5-43ea-852f-3906cb3f5493","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly","page_number":124,"box":{"x":244,"y":707,"width":606,"height":12}},{"id":"ca08ff3b-a0da-48f6-9286-8e9314d5398a","block_type":"box","text":"from those in the United States. Supervisory authorities may also be unable to apply standards which","page_number":124,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"d32dd6bf-2419-44b5-8616-8ab75206eec7","block_type":"box","text":"are comparable with those in the United States. Foreign settlement procedures and trade regulations","page_number":124,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"de5fa6c0-26e5-4d56-8901-8c2f14eccec3","block_type":"box","text":"also may involve certain risks (such as delays in payment for or delivery of securities) not typically","page_number":124,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"494a9143-f0fe-4e46-a8bb-1ef791cc1610","block_type":"box","text":"generated by the settlement of U.S. investments.","page_number":124,"box":{"x":116,"y":769,"width":362,"height":12}},{"id":"e6e23c89-0627-42da-9f69-78781a858f63","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable,","page_number":124,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"fdc51f03-dbcd-4590-8d68-844873a5ceee","block_type":"box","text":"increasing the risk of delayed settlements or losses of security certificates in markets that still rely on","page_number":124,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"9d06cff3-ef87-4e62-b7bf-6f3065791ec2","block_type":"box","text":"physical settlement. Settlements in certain foreign countries at times have not kept pace with the","page_number":124,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"8ab2d9eb-5c35-42c4-853d-7d32ba2d6e2a","block_type":"box","text":"number of securities transactions; these problems may make it difficult for a Fund to carry out","page_number":124,"box":{"x":117,"y":847,"width":698,"height":12}},{"id":"ff9b4a3b-cee8-4e0e-9e0a-8f4175c32895","block_type":"box","text":"transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss","page_number":124,"box":{"x":116,"y":862,"width":723,"height":12}},{"id":"e9acfcd6-aefc-49b6-8613-0b1f95dae160","block_type":"box","text":"attractive investment opportunities and certain of its assets may be uninvested with no return earned","page_number":124,"box":{"x":116,"y":878,"width":751,"height":12}},{"id":"1e42151c-7f87-4041-807f-832c0c4eb6ba","block_type":"box","text":"II-38","page_number":124,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b7ad98e1-fc21-4127-b9a9-c3423c85d0c7","block_type":"box","text":"NM1026U-6042785-124/259","page_number":124,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"217d24cb-78c2-4d41-b9b5-02e3206136ac","block_type":"box","text":"thereon for some period. 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A Fund may file claims to recover foreign withholding taxes on dividend","page_number":125,"box":{"x":344,"y":552,"width":530,"height":12}},{"id":"38c9da5e-dcd0-4ef6-8d27-d91c8123423c","block_type":"box","text":"and interest income (if any) received from issuers in","page_number":125,"box":{"x":116,"y":568,"width":381,"height":12}},{"id":"e784074f-4e89-4afe-9df2-61d0af08e742","block_type":"box","text":"certain countries and capital gains on the disposition","page_number":125,"box":{"x":498,"y":568,"width":385,"height":12}},{"id":"7adfb55c-c210-4a70-97dc-f6d4ae699fe3","block_type":"box","text":"of stocks or securities where such withholding ta","page_number":125,"box":{"x":116,"y":583,"width":351,"height":12}},{"id":"c1e24937-ffba-4053-976c-687d94870f0c","block_type":"box","text":"x reclaim is possible. 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Converse","page_number":125,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"658e4fcb-8146-48c6-912f-042076a5a48c","block_type":"box","text":"ly, if a Fund receives a tax refund that has not","page_number":125,"box":{"x":518,"y":707,"width":331,"height":12}},{"id":"9e128968-0748-4c5e-8a20-b374247a528b","block_type":"box","text":"been previously accrued, shareholders in the Fund at t","page_number":125,"box":{"x":117,"y":723,"width":396,"height":12}},{"id":"bf056ea9-aa83-4b38-b15d-3581db7bd5ac","block_type":"box","text":"he time of the successful recovery will benefit from","page_number":125,"box":{"x":514,"y":723,"width":365,"height":12}},{"id":"d8968b27-8107-4608-9ee3-6429f35438e1","block_type":"box","text":"the resulting increase in the Fund’s net asset value.","page_number":125,"box":{"x":116,"y":738,"width":373,"height":12}},{"id":"e86a4141-5b3b-4468-b752-c4b339ec5342","block_type":"box","text":"Shareholders who disposed of their shares prior to","page_number":125,"box":{"x":496,"y":738,"width":366,"height":12}},{"id":"fec63f19-3ad0-46ed-a40e-86a91259ff5f","block_type":"box","text":"such time will not benefit from such increase in the Fund’s net asset value.","page_number":125,"box":{"x":116,"y":754,"width":540,"height":9}},{"id":"e5101168-97d4-4e5f-9181-94cc836bcda5","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":125,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"e613505d-f3db-4a24-b483-4459aef7fed1","block_type":"box","text":"The United States is a significant, and in some cases the most","page_number":125,"box":{"x":404,"y":785,"width":464,"height":12}},{"id":"e196a082-e377-431a-87db-95c74d5eaa7c","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. 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A decrease in U.S. imports or exports, new trade and financial regulations or tariffs, changes","page_number":125,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"48b87d20-4076-4632-a708-8bd96ca4e459","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":125,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"1e674f9e-eee6-4653-93bf-207098772aa3","block_type":"box","text":"adverse effect on a country’s economic conditions and, as a result, securities to which the Fund has","page_number":125,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"d001d8cc-7738-4da0-b77a-1a25ab3213cf","block_type":"box","text":"exposure. Circumstances could arise that could prevent the timely payment of interest or principal on","page_number":125,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"34881ecb-0836-486b-b8c3-25ab0e093de7","block_type":"box","text":"II-39","page_number":125,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"65bbc606-aa50-45c2-97a3-f6471bcb70c6","block_type":"box","text":"NM1026U-6042785-125/259","page_number":125,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e7f33aef-87ec-46b0-b25b-9e643109786b","block_type":"box","text":"U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result","page_number":126,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"5c18b945-ff16-4b13-a55a-8dc183bcb3d1","block_type":"box","text":"in substantial negative consequences for the U.S. economy and the global financial system.","page_number":126,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"586c8e97-9dc1-4541-afad-ae0a657ece1b","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including","page_number":126,"box":{"x":116,"y":135,"width":745,"height":12}},{"id":"2a7b8562-33be-4cee-997e-9cee640ed67f","block_type":"box","text":"traditional allies, such as certain European countries, and historical adversaries, such as North Korea,","page_number":126,"box":{"x":116,"y":151,"width":761,"height":11}},{"id":"960eb9c6-fbff-46eb-bf62-7d7b8a18ac4d","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":126,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"6c3f9a2b-cf46-4721-a961-8e60aaeb3f52","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":126,"box":{"x":116,"y":181,"width":748,"height":12}},{"id":"7039f4b6-a52c-4f64-ba9e-e95e7e197631","block_type":"box","text":"increased internal unrest and discord. If these trends were to continue, it may have an adverse impact","page_number":126,"box":{"x":117,"y":197,"width":761,"height":12}},{"id":"96803d4e-30c2-436b-8d59-42d7ed1b97c6","block_type":"box","text":"on the U.S. economy and many of the issuers in which a Fund may invest.","page_number":126,"box":{"x":116,"y":212,"width":557,"height":12}},{"id":"1ae38551-4d67-46ed-9d0e-c07ed0700e9f","block_type":"box","text":"Funding Agreements.","page_number":126,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"1beb9e86-2e78-477a-8b4d-4ed139a2b119","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar","page_number":126,"box":{"x":289,"y":245,"width":561,"height":12}},{"id":"bdd6e259-e261-4adb-bac1-98c9af39d093","block_type":"box","text":"funding agreements. In connection with these investments, a Fund makes cash contributions to a","page_number":126,"box":{"x":116,"y":260,"width":727,"height":12}},{"id":"11bb7fcf-4382-401d-8381-d48b900418eb","block_type":"box","text":"deposit fund of an insurance company’s general account. The insurance company then credits to the","page_number":126,"box":{"x":116,"y":276,"width":753,"height":12}},{"id":"9abcf5a0-f551-497d-baf6-d407f1b262c0","block_type":"box","text":"Fund on a monthly basis guaranteed interest, which is based on an index. The funding agreements","page_number":126,"box":{"x":117,"y":291,"width":740,"height":12}},{"id":"4b03ac0b-42ae-4daf-b2e5-5fa4e2827d67","block_type":"box","text":"provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price","page_number":126,"box":{"x":117,"y":307,"width":753,"height":12}},{"id":"42c6691a-886b-4974-a286-f45e8490f027","block_type":"box","text":"paid for a funding agreement becomes part of the general assets of the insurance company, and the","page_number":126,"box":{"x":117,"y":322,"width":749,"height":12}},{"id":"a567748b-4619-4643-a311-0d76b6d45c1a","block_type":"box","text":"contract is paid from the general assets of the insurance company. Generally, funding agreements are","page_number":126,"box":{"x":116,"y":338,"width":764,"height":12}},{"id":"ba11d4ea-ecb0-417f-be6e-566b1765991a","block_type":"box","text":"not assignable or transferable without the permission of the issuing insurance companies, and an","page_number":126,"box":{"x":117,"y":353,"width":726,"height":12}},{"id":"3ef40d3d-74ee-4e51-ba51-5da49f17c22e","block_type":"box","text":"active secondary market in some funding agreements does not currently exist.","page_number":126,"box":{"x":116,"y":369,"width":586,"height":12}},{"id":"bbb5d78a-cd9c-4ee8-9828-62baf6f69ae8","block_type":"box","text":"Guarantees","page_number":126,"box":{"x":117,"y":401,"width":91,"height":10}},{"id":"a984a59f-ac7a-4ab9-8287-ac8ac25c6fdc","block_type":"box","text":".","page_number":126,"box":{"x":209,"y":409,"width":3,"height":2}},{"id":"6893d203-072e-4a52-917d-9c458d4f5857","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate","page_number":126,"box":{"x":213,"y":401,"width":660,"height":12}},{"id":"36950241-7736-4a66-9c8e-fb1a44a6da3c","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":126,"box":{"x":116,"y":417,"width":771,"height":12}},{"id":"2d4ca99b-907f-41d7-ac31-9fec2dd57edf","block_type":"box","text":"fulfill an issuer’s payment obligations under a security if the issuer is unable to do so.","page_number":126,"box":{"x":116,"y":432,"width":634,"height":12}},{"id":"c7407cc1-aafc-438b-bece-5f723d41685c","block_type":"box","text":"Illiquid Investments.","page_number":126,"box":{"x":116,"y":465,"width":160,"height":11}},{"id":"6f3927c5-2a9c-4519-b6a5-cbc4ac562845","block_type":"box","text":"Each Fund may not acquire any illiquid investment if, immediately after the","page_number":126,"box":{"x":278,"y":465,"width":563,"height":12}},{"id":"d94e9ff6-60f8-47aa-8968-360015d1e5a3","block_type":"box","text":"acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An","page_number":126,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"4039203e-93e2-48c6-abdf-0c1d5544f0d2","block_type":"box","text":"illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in","page_number":126,"box":{"x":117,"y":496,"width":753,"height":12}},{"id":"8c6705fc-d514-4985-aab0-66c7e6cfc9c2","block_type":"box","text":"current market conditions in seven calendar days or less without the sale or disposition significantly","page_number":126,"box":{"x":116,"y":511,"width":742,"height":12}},{"id":"af40c9da-ec60-4d83-a6e6-e43ef621adc8","block_type":"box","text":"changing the market value of the investment. Liquid investments may become illiquid after purchase by","page_number":126,"box":{"x":116,"y":527,"width":771,"height":12}},{"id":"13765963-65cf-4d11-a7d5-dec060477d74","block_type":"box","text":"a Fund, particularly during periods of market turmoil. 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The Manager will make investment changes to a Fund’s","page_number":126,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"8d2dba11-7cc5-4b7c-af7e-0497dd263324","block_type":"box","text":"II-40","page_number":126,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"474b7e44-7151-404a-9d70-a7500deb58e5","block_type":"box","text":"NM1026U-6042785-126/259","page_number":126,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8bce1466-e0b3-4d85-ad9e-4c6c2293639f","block_type":"box","text":"portfolio to accommodate cash flow while continuing to seek to replicate the total return of the Fund’s","page_number":127,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"48191d3d-3a2e-41bc-88ee-e2b9fc3387e4","block_type":"box","text":"target index. Investors should also be aware that the investment performance of each index is a","page_number":127,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"f43205f2-75e8-4570-b69a-b7d0f721458d","block_type":"box","text":"hypothetical number which does not take into account brokerage commissions and other transaction","page_number":127,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"af0cfb91-3f08-432f-8eda-dadecbef7aa7","block_type":"box","text":"costs, custody and other costs of investing, and any incremental operating costs (e.g., transfer agency","page_number":127,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"353627a1-f94f-41be-ae83-df26c0f490c7","block_type":"box","text":"and accounting costs) that will be borne by the Funds. Finally, since each Fund seeks to replicate the","page_number":127,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"026558c4-9524-4014-86e7-0cc425c44709","block_type":"box","text":"total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":127,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"944299e4-f172-44aa-9ab0-231b83a0650c","block_type":"box","text":"particular security as an investment.","page_number":127,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"807a3714-b74e-45e6-9798-7e70b2f98fe6","block_type":"box","text":"Tracking Error Risk","page_number":127,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"adb00cce-0ce6-4567-81d0-229643375086","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s","page_number":127,"box":{"x":261,"y":211,"width":594,"height":12}},{"id":"c616d306-7b2c-4dc8-b5ed-4601749b1c81","block_type":"box","text":"performance from that of the Underlying Index. Tracking error may occur because of differences","page_number":127,"box":{"x":117,"y":227,"width":718,"height":12}},{"id":"afc5cbce-7be1-44dd-8abb-c69d9c0a8029","block_type":"box","text":"between the securities and other instruments held in the Fund’s portfolio and those included in the","page_number":127,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"29dd58e8-0b7b-447d-bce8-d5bbac576d35","block_type":"box","text":"Underlying Index, pricing differences (including, as applicable, differences between a security’s price at","page_number":127,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"f8f30ff1-3efd-4c7e-9dbf-1803e6ca4200","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":127,"box":{"x":116,"y":273,"width":767,"height":12}},{"id":"f2882313-170e-410d-a471-7610b1bfff70","block_type":"box","text":"asset value), differences in transaction costs incurred by the Fund, the Fund’s holding of uninvested","page_number":127,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"4f86b081-2bf5-4ad3-afd7-5a664f7e0774","block_type":"box","text":"cash, differences in timing of the accrual of or the valuation of dividends or other distributions, interest,","page_number":127,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"0f6fa857-4944-4398-ae32-84232c6d172e","block_type":"box","text":"the requirements to maintain pass-through tax treatment, portfolio transactions carried out to minimize","page_number":127,"box":{"x":116,"y":320,"width":763,"height":12}},{"id":"04d8aac8-16a4-4299-b68f-def63a2c3ee8","block_type":"box","text":"the distribution of capital gains to shareholders, changes to the Underlying Index or the costs to the","page_number":127,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"b02d2dc7-7f58-4309-893f-e5a8a95769ab","block_type":"box","text":"Fund of complying with various new or existing regulatory requirements. These risks may be","page_number":127,"box":{"x":117,"y":351,"width":689,"height":12}},{"id":"f721b316-753e-41d7-8a04-6af0bf257d05","block_type":"box","text":"heightened during times of increased market volatility or other unusual market conditions. 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If it identifies such behavior, the","page_number":127,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"21e1e9d0-4763-427d-8e6a-77682f5ac6ad","block_type":"box","text":"Manager may, where appropriate, alert the index provider as to the alleged issue. The index provider","page_number":127,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"fd58f613-8fee-480e-a458-67fd6df12924","block_type":"box","text":"has sole discretion for the determination as to whether to continue to include the issuer’s securities in","page_number":127,"box":{"x":117,"y":537,"width":755,"height":9}},{"id":"0a56e7bf-ba6b-48b3-b8dd-2375275bac2f","block_type":"box","text":"the rebalancing of its index. If the securities continue to be included in the index, the Manager may","page_number":127,"box":{"x":116,"y":552,"width":736,"height":12}},{"id":"67d6470d-7a10-47ea-a254-89dfe8630795","block_type":"box","text":"underweight or exclude such securities from a Fund’s portfolio and, if it does so, such Fund will be","page_number":127,"box":{"x":117,"y":568,"width":732,"height":12}},{"id":"ca8215a3-6dc9-49dc-b74b-3edfaaae4da3","block_type":"box","text":"subject to increased tracking error due to the divergence in the securities included in its portfolio from","page_number":127,"box":{"x":116,"y":583,"width":756,"height":12}},{"id":"a3bbebe4-9cb6-4340-adb4-e69b8bd46d40","block_type":"box","text":"its underlying index. 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No Fund is sponsored,","page_number":127,"box":{"x":116,"y":723,"width":723,"height":12}},{"id":"df088ece-0b09-4be2-9ddd-08e57719bebb","block_type":"box","text":"endorsed, sold or promoted by S&P, a division of S&P Global Inc. S&P makes no representation","page_number":127,"box":{"x":116,"y":738,"width":715,"height":12}},{"id":"1308c91b-526f-42bf-8fa8-8a92fa927769","block_type":"box","text":"regarding the advisability of investing in any Fund. 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S&P’s only relationship to certain Funds is the licensing of certain","page_number":127,"box":{"x":116,"y":800,"width":689,"height":12}},{"id":"eceba86f-7a1b-44c0-aa40-00c1dea4fbc4","block_type":"box","text":"trademarks and trade names of S&P and of the S&P 500 which is determined, composed and","page_number":127,"box":{"x":116,"y":816,"width":695,"height":12}},{"id":"123b464d-eba8-4035-b61c-f295beb54a25","block_type":"box","text":"calculated by S&P without regard to the Funds. S&P has no obligation to take the needs of a Fund or","page_number":127,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"9b61aaec-5a4d-4367-8f32-1ce301616d94","block_type":"box","text":"the owners of shares of a Fund into consideration in determining, composing or calculating the S&P","page_number":127,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"257b4332-861f-4aa8-90d3-af49cfa8357f","block_type":"box","text":"500. S&P is not responsible for and has not participated in the determination of the prices and amount","page_number":127,"box":{"x":116,"y":862,"width":762,"height":12}},{"id":"f9480382-a124-414b-b1b0-3b21b90191b6","block_type":"box","text":"of any Fund or the timing of the issuance or sale of shares of a Fund or in the determination or","page_number":127,"box":{"x":116,"y":878,"width":706,"height":12}},{"id":"030e494c-78e7-447d-88b4-5419a8c9cd5d","block_type":"box","text":"II-41","page_number":127,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"0d036d7d-fdd9-4143-a20b-a626ddb6d9d1","block_type":"box","text":"NM1026U-6042785-127/259","page_number":127,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1f1c6ab2-a336-4117-ab79-13a26d31e842","block_type":"box","text":"calculation of the equation by which a Fund is to be converted into cash. 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A Fund may also invest in so-called “inverse floating obligations” or","page_number":129,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"05d17167-4339-42d3-a1b7-f89c30e9261d","block_type":"box","text":"II-43","page_number":129,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7ced3e7a-1266-4dce-bf4e-adfc2efcfd71","block_type":"box","text":"NM1026U-6042785-129/259","page_number":129,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6d23ac58-8e94-4bbc-9681-0a68d5fc03af","block_type":"box","text":"“residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be","page_number":130,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"4e7b0018-221d-4e51-bad5-d4f1200283a0","block_type":"box","text":"reset periodically by a Dutch auction, a remarketing agent, or by reference to a short-term tax-exempt","page_number":130,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"aa50b2e1-b363-41f8-b515-975300a32033","block_type":"box","text":"interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced","page_number":130,"box":{"x":117,"y":118,"width":759,"height":12}},{"id":"16e6fd33-385c-4bb3-b8e9-c5db6f2cbbe6","block_type":"box","text":"by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when","page_number":130,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"d6f6b326-56b7-46da-9170-c730b8b1e19b","block_type":"box","text":"interest rates increase, and will increase when interest rates decrease. Such securities have the effect","page_number":130,"box":{"x":117,"y":149,"width":762,"height":11}},{"id":"9cce1b68-6457-4c33-a44a-84abb43e722b","block_type":"box","text":"of providing a degree of investment leverage, since they may increase or decrease in value in","page_number":130,"box":{"x":116,"y":165,"width":701,"height":12}},{"id":"6b6ddcbb-0360-4d0b-832c-b93d5dd22c70","block_type":"box","text":"response to changes, as an illustration, in market interest rates at a rate that is a multiple of the rate at","page_number":130,"box":{"x":117,"y":180,"width":764,"height":12}},{"id":"572c8627-df2b-4503-8e86-36a7ea003e95","block_type":"box","text":"which fixed-rate securities increase or decrease in response to such changes. As a result, the market","page_number":130,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"8e5c4d9f-d536-4119-8c2c-d6fa30808447","block_type":"box","text":"values of such securities will generally be more volatile than the market values of fixed-rate securities.","page_number":130,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"9621b4ec-3cd0-4ee1-b97e-f3110d60f60d","block_type":"box","text":"To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that","page_number":130,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"b1f89666-a2e3-4aed-a491-eed9c3e71164","block_type":"box","text":"have shorter-term maturities or that contain limitations on the extent to which the interest rate may","page_number":130,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"db266d68-40b3-45b6-a882-d0046a959157","block_type":"box","text":"vary. Certain investments in such obligations may be illiquid. The Manager believes that indexed and","page_number":130,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"e5e69ef0-7183-4793-a64a-ed41eec903a0","block_type":"box","text":"inverse floating obligations represent flexible portfolio management instruments for a Fund that allow","page_number":130,"box":{"x":117,"y":273,"width":751,"height":12}},{"id":"3e1dd7b6-2965-483d-95f1-2d060d39a074","block_type":"box","text":"the Fund to seek potential investment rewards, hedge other portfolio positions or vary the degree of","page_number":130,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"cbccfcf0-b0f6-4b88-a1d1-ed479d8abf78","block_type":"box","text":"investment leverage relatively efficiently under different market conditions. A Fund may invest in","page_number":130,"box":{"x":117,"y":304,"width":716,"height":12}},{"id":"a09e9912-2393-488c-9a22-5192bd97acfc","block_type":"box","text":"indexed and inverse securities for hedging purposes or to seek to increase returns. When used for","page_number":130,"box":{"x":117,"y":320,"width":734,"height":12}},{"id":"08d7eb28-1c34-476b-91e0-9c974912aacc","block_type":"box","text":"hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a","page_number":130,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"ee5d970b-f5c5-4fa8-b853-de4f1c5657ba","block_type":"box","text":"security includes a contingent liability, in the event of an adverse movement in the underlying index or","page_number":130,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"daa04bad-0b58-4c9d-b33b-bfaca3d70fee","block_type":"box","text":"interest rate, a Fund may be required to pay substantial additional margin to maintain the position.","page_number":130,"box":{"x":117,"y":366,"width":731,"height":12}},{"id":"2342f6a8-05b3-47d4-9f1f-bdb03ac94d77","block_type":"box","text":"The Funds may invest up to 10% of their total assets in leveraged inverse floating rate debt","page_number":130,"box":{"x":116,"y":397,"width":682,"height":12}},{"id":"c57fe2aa-325a-47f1-80ca-72b1ca0324b6","block_type":"box","text":"instruments (“inverse floaters”). Inverse floaters are securities the potential of which is inversely related","page_number":130,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"731a9929-3004-4e7d-a4c7-f80a062802b1","block_type":"box","text":"to changes in interest rates. In general, the return on inverse floaters will decrease when short-term","page_number":130,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"2a332367-b654-477c-9850-390243cf073e","block_type":"box","text":"interest rates increase and increase when short-term rates decrease. Municipal tender option bonds,","page_number":130,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"98298ccd-8339-4ef2-abdd-85fa6ef16440","block_type":"box","text":"both taxable and tax-exempt, which may include inverse floating rate debt instruments, (including","page_number":130,"box":{"x":117,"y":459,"width":725,"height":12}},{"id":"8c94ca27-93d7-4b5d-b7ec-44d47276f34f","block_type":"box","text":"residual interests thereon) are excluded from this 10% limitation.","page_number":130,"box":{"x":117,"y":475,"width":483,"height":12}},{"id":"e93cad29-58f6-41e5-a87d-ab07dda96717","block_type":"box","text":"Inflation Risk.","page_number":130,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"23cdcc9a-d1c6-48ee-9702-33a79bdeee7d","block_type":"box","text":"Like all funds, the Funds are subject to inflation risk. Inflation risk is the risk that the","page_number":130,"box":{"x":226,"y":506,"width":627,"height":12}},{"id":"cc5ba98d-ab6e-4f8b-9d78-d6f89c8d861f","block_type":"box","text":"present value of assets or income from investments will be less in the future as inflation decreases the","page_number":130,"box":{"x":117,"y":521,"width":763,"height":12}},{"id":"b1cde3d3-36a0-42d5-9c06-ca4d30fc2ee9","block_type":"box","text":"value of money. As inflation increases, the present value of a Fund’s assets can decline as can the","page_number":130,"box":{"x":116,"y":537,"width":739,"height":12}},{"id":"93a3d5f1-fb91-4e87-aef1-a37ba4118914","block_type":"box","text":"value of a Fund’s distributions. Inflation rates may change frequently and significantly due to a number","page_number":130,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"99ce897d-bae7-4439-9533-01efd8e7def2","block_type":"box","text":"of potential factors, including, among others, unexpected economic shifts or changes in fiscal or","page_number":130,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"b7e4033e-f7e0-40e7-848b-1620bccec0ec","block_type":"box","text":"monetary policies.","page_number":130,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"9578d135-718e-43eb-af92-2091cde7be29","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":130,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"d674e8bb-cc8f-4cad-87ab-a14ef015e994","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued","page_number":130,"box":{"x":392,"y":614,"width":462,"height":12}},{"id":"5521e145-7970-4327-a03d-86426dffd20b","block_type":"box","text":"stocks trade in the secondary market are affected by the performance of the stock market overall. If","page_number":130,"box":{"x":116,"y":630,"width":743,"height":12}},{"id":"8d335c87-6ee8-4617-9179-b327c1df9249","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":130,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"0ae36e9f-0245-4264-9bcb-382338ac8770","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":130,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"ab893a31-46d4-4508-a26c-f0401c2a1dd0","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":130,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"7a64bb23-68ee-4bac-9b9c-47f7abf1cc72","block_type":"box","text":"to greater and more unpredictable price changes than more established stocks. IPOs have the","page_number":130,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"87b8e01c-1484-4035-a5ab-7084ec826f22","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":130,"box":{"x":117,"y":707,"width":751,"height":12}},{"id":"65dda8b3-e21c-4290-8c33-2bf6a00ae894","block_type":"box","text":"time given possible price volatility. This may result in increased portfolio turnover and expenses, such","page_number":130,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"829cf3c8-4dd1-48fe-8eee-6fe5ee0d9122","block_type":"box","text":"as commissions and transaction costs, and potentially result in taxable gains that the Fund may","page_number":130,"box":{"x":116,"y":738,"width":709,"height":12}},{"id":"389705f4-5256-41ff-82f2-2f4e99806a9a","block_type":"box","text":"subsequently distribute to shareholders. There is no assurance that any Fund will have access to","page_number":130,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"b66788cc-b6d0-4baf-a676-827c93d496af","block_type":"box","text":"profitable IPOs and therefore investors should not rely on any past gains from IPOs as an indication of","page_number":130,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"5616f39f-93d8-4085-bd35-3e348ca16e13","block_type":"box","text":"future performance. The investment performance of a Fund during periods when it is unable to invest","page_number":130,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"031b4c25-aa2d-4244-9067-a1cd485f8f1a","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":130,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"e6c403ef-ed14-4e20-adc0-a141d2eeee4a","block_type":"box","text":"Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":130,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"967f5054-af8d-49e6-91cf-ab3bdb5f7f93","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market","page_number":130,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"4ed9ab42-5152-4aa0-8783-48c47f8e8af5","block_type":"box","text":"capitalizations. Securities issued in IPOs have no trading history, and information about the companies","page_number":130,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"10e2a7fc-38ca-43c2-a9b2-0f42c286161c","block_type":"box","text":"may be available for very limited periods.","page_number":130,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"eb4e8c66-1537-4c47-ad62-7140dbd2d3ec","block_type":"box","text":"II-44","page_number":130,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ad599d14-451c-4885-ba27-11c1d30c6dfe","block_type":"box","text":"NM1026U-6042785-130/259","page_number":130,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"617d9c1e-3345-492c-956d-440e962c2b95","block_type":"box","text":"Investment in Emerging Markets.","page_number":131,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"425a3656-7a0a-47a5-afe4-232483eca8cc","block_type":"box","text":"General.","page_number":131,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"0b6d477e-a291-4cbd-82c7-9b8b573ce923","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging","page_number":131,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"e87c97fe-034f-47cb-ac86-3769a9ca9269","block_type":"box","text":"capital markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital","page_number":131,"box":{"x":116,"y":149,"width":765,"height":12}},{"id":"c26c53ea-e2f0-44cb-a6a0-23841279951e","block_type":"box","text":"market is any country that is (i) generally recognized to be an emerging market country by the","page_number":131,"box":{"x":117,"y":165,"width":700,"height":12}},{"id":"b49c3e05-625d-4261-a031-07b4f1585b0f","block_type":"box","text":"international financial community, such as the International Finance Corporation, or","page_number":131,"box":{"x":117,"y":180,"width":617,"height":12}},{"id":"17d1302d-fe53-48a0-a78e-16dc078c2ba8","block_type":"box","text":"determined by the","page_number":131,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"a3f5966c-0c48-4105-8f42-6e64dc578d73","block_type":"box","text":"World Bank to have a low, middle or middle upper income economy; (ii) classified by the United","page_number":131,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"6e683633-4ea6-4479-bcc8-f5b3046b47a7","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":131,"box":{"x":117,"y":211,"width":762,"height":12}},{"id":"99ed939b-3786-41ee-bbe2-7cf59891b1f8","block_type":"box","text":"representative of emerging markets. Countries with emerging markets can be found in regions such as","page_number":131,"box":{"x":117,"y":227,"width":766,"height":12}},{"id":"0c7ca3d1-f400-40be-93aa-c6ad6f0d2f29","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":131,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"5d080d98-91f6-4895-a735-a6dd1837e647","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve","page_number":131,"box":{"x":117,"y":273,"width":743,"height":12}},{"id":"3d8166fe-81fb-4d86-8298-39c0a381a49a","block_type":"box","text":"certain additional risks that do not generally apply to investments in securities of issuers in more","page_number":131,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"7e3c4e24-8a49-4353-92fb-98d72d8d3b11","block_type":"box","text":"developed capital markets, such as (i) low or non-existent trading volume, resulting in market illiquidity","page_number":131,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"939739d5-f125-40e0-9da6-c899b339e87a","block_type":"box","text":"and increased volatility in prices for such securities, as compared to securities of comparable issuers in","page_number":131,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"ab45c96e-59dd-4536-8f39-bccef11ccbe7","block_type":"box","text":"more developed capital markets; (ii) uncertain national policies and social, political and economic","page_number":131,"box":{"x":117,"y":335,"width":723,"height":12}},{"id":"227a32e4-8fff-48e1-8883-464ef0143af4","block_type":"box","text":"instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of","page_number":131,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"b7bb61c0-5989-4461-8e16-55abf00b829f","block_type":"box","text":"inflation or unfavorable diplomatic developments; (iii) possible fluctuations in exchange rates, differing","page_number":131,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"16c0a2e8-8334-4469-89fa-aea9cf226b0f","block_type":"box","text":"legal systems and the existence or possible imposition of exchange controls, custodial restrictions or","page_number":131,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"52a7cd66-cbd2-40a1-8091-76e15e302ebf","block_type":"box","text":"other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":131,"box":{"x":116,"y":397,"width":741,"height":12}},{"id":"5693cc2e-f8a3-435f-a886-c75ce2d926d8","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers","page_number":131,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"9b32aa3b-d867-4494-ab20-5fbca0aee91d","block_type":"box","text":"or industries deemed sensitive to national interests; and (v) the lack or relatively early development of","page_number":131,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"42746b6d-00be-43ad-85bc-f5c01c40b007","block_type":"box","text":"legal structures governing private and foreign investments and private property. In addition to","page_number":131,"box":{"x":117,"y":444,"width":695,"height":12}},{"id":"8515a865-d85e-428f-ab37-f74242a532e3","block_type":"box","text":"withholding taxes on investment income, some countries with emerging markets may impose","page_number":131,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"a524861d-ae5e-4356-b879-ef689d315bd0","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":131,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"bbc7fa9c-fb2c-47e5-ac29-d4815518a491","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":131,"box":{"x":117,"y":506,"width":699,"height":12}},{"id":"6868390f-82ff-40c2-8a5c-e458bcb7db0d","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":131,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"b100174f-7320-43dd-8ad3-255bb2f05cd9","block_type":"box","text":"stability characteristic of more developed countries. In such a dynamic environment, there can be no","page_number":131,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"2e2cb0cc-f897-4b68-a19c-1aab0aed7cdb","block_type":"box","text":"assurance that any or all of these capital markets will continue to present viable investment","page_number":131,"box":{"x":116,"y":552,"width":681,"height":12}},{"id":"84c75dea-546d-4506-9e0d-19f1fea7cda9","block_type":"box","text":"opportunities for a Fund. In the past, governments of such nations have expropriated substantial","page_number":131,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"a4fd5be5-3d26-4438-9779-c6e98afad048","block_type":"box","text":"amounts of private property, and most claims of the property owners have never been fully settled.","page_number":131,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"77325e5d-f351-4fb0-865f-a938500ce17a","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":131,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"f98ebb75-ad70-48d1-9e52-b0784c8f4fce","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks","page_number":131,"box":{"x":117,"y":614,"width":700,"height":10}},{"id":"adbd4edb-1c65-4899-bd88-aa205005bfaa","block_type":"box","text":"described above, including the risks of nationalization or expropriation of assets, may be heightened. In","page_number":131,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"a6b2faa0-d7da-447a-833e-f4b5817aebc3","block_type":"box","text":"addition, unanticipated political or social developments may affect the value of investments in these","page_number":131,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"c3df119e-d03d-41d7-8697-7deb4f87c2be","block_type":"box","text":"countries and the availability to a Fund of additional investments. The small size and inexperience of","page_number":131,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"a9fb894f-89ec-425b-8804-24ea6a9039a3","block_type":"box","text":"the securities markets in certain of these countries and the limited volume of trading in securities in","page_number":131,"box":{"x":116,"y":676,"width":732,"height":12}},{"id":"7da3d7a3-8df2-4718-8c2f-4ee24cd607dc","block_type":"box","text":"these countries may make investments in the countries illiquid and more volatile than investments in","page_number":131,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"92e9acbb-ddae-4168-99cd-6ec0383a051e","block_type":"box","text":"more established markets.","page_number":131,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"eceae780-b754-43eb-afcd-60d980cda5b3","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be","page_number":131,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"bdb23a3a-cd24-4498-9e45-ae2b306f0111","block_type":"box","text":"available about issuers in more developed capital markets, and such issuers may not be subject to","page_number":131,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"65e78ddf-a5f0-4e19-b720-fdc501191d40","block_type":"box","text":"accounting, auditing and financial reporting standards and requirements comparable to those to which","page_number":131,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"ae2962f1-16b6-4774-bbc8-4efe714251cb","block_type":"box","text":"U.S. companies are subject. In certain countries with emerging capital markets, reporting standards","page_number":131,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"70f8f417-e30b-41a6-8ecb-7d1af0b81896","block_type":"box","text":"vary widely. As a result, traditional investment measurements used in the United States, such as price/","page_number":131,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"898bfce9-7a67-4570-bbdf-5ca08807a49c","block_type":"box","text":"earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid","page_number":131,"box":{"x":116,"y":816,"width":731,"height":12}},{"id":"11b4e84a-4de2-4bb3-9cdd-da6f71161022","block_type":"box","text":"than, and more volatile than, those of mature markets, and company shares may be held by a limited","page_number":131,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"075f087c-b9b8-4718-a8ce-a172f2c3a1f1","block_type":"box","text":"number of persons. This may adversely affect the timing and pricing of the Fund’s acquisition or","page_number":131,"box":{"x":117,"y":847,"width":715,"height":12}},{"id":"08e159b0-d3de-4573-885d-85903c595feb","block_type":"box","text":"disposal of securities.","page_number":131,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"3776d738-ee9a-485f-a1e9-5130bd66985c","block_type":"box","text":"II-45","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7c010b65-08be-42d2-afb5-acc3c0a26474","block_type":"box","text":"NM1026U-6042785-131/259","page_number":131,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9ac4063b-71a0-4c93-b095-693889feed2e","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks","page_number":132,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"c2cf8e0b-3b4a-4f78-a9fc-f7cf1c2463ea","block_type":"box","text":"than those in developed markets, in part because a Fund will need to use brokers and counterparties","page_number":132,"box":{"x":116,"y":103,"width":755,"height":11}},{"id":"e904f3c7-105b-414d-ae3d-6aeab80979b4","block_type":"box","text":"that are less well capitalized, and custody and registration of assets in some countries may be","page_number":132,"box":{"x":116,"y":118,"width":703,"height":12}},{"id":"d56aef30-0aed-4ff3-bf5a-01175f6ed9c8","block_type":"box","text":"unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal","page_number":132,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"ce597162-4367-4a84-ada1-bc91373d0212","block_type":"box","text":"to recognize ownership exists in some emerging markets, and, along with other factors, could result in","page_number":132,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"ef9475dc-9995-4455-b48e-400b3868bca4","block_type":"box","text":"ownership registration being completely lost. A Fund would absorb any loss resulting from such","page_number":132,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"19234e8a-bafb-4b19-8a05-ea4ea9e09b74","block_type":"box","text":"registration problems and may have no successful claim for compensation.","page_number":132,"box":{"x":117,"y":180,"width":560,"height":12}},{"id":"09b124aa-248f-4e4e-9a77-1f500af84676","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging","page_number":132,"box":{"x":117,"y":211,"width":755,"height":12}},{"id":"35f0dc7d-e84f-4e69-ac61-25eead1cd06b","block_type":"box","text":"market countries may be on either a currency hedged or unhedged basis, and the Funds may hold","page_number":132,"box":{"x":117,"y":227,"width":735,"height":12}},{"id":"6041785b-a1e6-46f9-9a79-139c5a21bdbd","block_type":"box","text":"from time to time various foreign currencies pending investment or conversion into U.S. dollars. Some","page_number":132,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"f9586b19-760f-4634-a1f5-03655f619480","block_type":"box","text":"of these instruments may have the characteristics of futures contracts. In addition, certain Funds may","page_number":132,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"c5efb6f6-e688-4f3c-b08b-5366d0f0eb17","block_type":"box","text":"engage in foreign currency exchange transactions to seek to protect against changes in the level of","page_number":132,"box":{"x":116,"y":273,"width":742,"height":12}},{"id":"a522e605-428d-4a49-acf5-5bbaacff94c5","block_type":"box","text":"future exchange rates which would adversely affect the Fund’s performance. These investments and","page_number":132,"box":{"x":116,"y":289,"width":752,"height":12}},{"id":"19e342ac-c6c4-49fa-b40d-057d206c1bfd","block_type":"box","text":"transactions involving foreign securities, currencies, options (including options that relate to foreign","page_number":132,"box":{"x":116,"y":304,"width":738,"height":12}},{"id":"1bd4adee-3ab6-4c74-8553-bf3d268eb2a0","block_type":"box","text":"currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":132,"box":{"x":116,"y":320,"width":619,"height":12}},{"id":"5c6e867b-bbfa-4a0c-817b-77d535c4ea85","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":132,"box":{"x":116,"y":351,"width":328,"height":12}},{"id":"9ec22f92-eabe-44c2-9105-49e3a49da596","block_type":"box","text":"In addition to the risks of foreign investing and the risks of","page_number":132,"box":{"x":445,"y":351,"width":432,"height":12}},{"id":"90303cb2-0c78-4ce2-bf91-fc1212ce8710","block_type":"box","text":"investing in developing markets, the developing market Asia-Pacific countries in which a Fund may","page_number":132,"box":{"x":117,"y":366,"width":738,"height":12}},{"id":"d20283d4-c690-42b7-965b-805ded9947ed","block_type":"box","text":"invest are subject to certain additional or specific risks. Certain Funds may make substantial","page_number":132,"box":{"x":117,"y":382,"width":687,"height":12}},{"id":"ebcbce70-dba2-4506-beb0-9c97ee7ff3be","block_type":"box","text":"investments in Asia-Pacific countries. In many of these markets, there is a high concentration of market","page_number":132,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"39426481-72d8-455d-8873-ea619245cbc7","block_type":"box","text":"capitalization and trading volume in a small number of issuers representing a limited number of","page_number":132,"box":{"x":116,"y":413,"width":710,"height":12}},{"id":"78050eae-55a8-47ed-a47f-351acae2c85c","block_type":"box","text":"industries, as well as a high concentration of investors and financial intermediaries. Many of these","page_number":132,"box":{"x":117,"y":428,"width":730,"height":12}},{"id":"15679da5-fa23-4250-8dbe-d56daf5aaf63","block_type":"box","text":"markets also may be affected by developments with respect to more established markets in the region","page_number":132,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"4c94b884-b5f5-4f0b-93d8-73244406d963","block_type":"box","text":"such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are","page_number":132,"box":{"x":116,"y":459,"width":739,"height":12}},{"id":"c3d06ce9-af96-4e30-a2db-915ea5b2c98a","block_type":"box","text":"fewer in number and less well capitalized than brokers in the United States. These factors, combined","page_number":132,"box":{"x":116,"y":475,"width":754,"height":12}},{"id":"380f7deb-e420-49a0-95e6-a3290a377733","block_type":"box","text":"with the U.S. regulatory requirements for open-end investment companies and the restrictions on","page_number":132,"box":{"x":116,"y":490,"width":725,"height":12}},{"id":"6e878251-40c0-4b0f-aa7f-12d2d9057c19","block_type":"box","text":"foreign investment discussed below, result in potentially fewer investment opportunities for a Fund and","page_number":132,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"05d236b1-88ad-45ba-9d22-aee63bb42b4e","block_type":"box","text":"may have an adverse impact on the investment performance of the Fund.","page_number":132,"box":{"x":117,"y":521,"width":550,"height":12}},{"id":"54fe9036-516c-4036-a81f-6a4259971c2e","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic,","page_number":132,"box":{"x":117,"y":552,"width":757,"height":12}},{"id":"3be0769d-d270-4fef-af12-e5f9d5f59e40","block_type":"box","text":"political and social instability than is the case in the United States and Western European countries.","page_number":132,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"ccadcaf6-2235-45d5-930a-5423f515a77f","block_type":"box","text":"Such instability may result from, among other things: (i) authoritarian governments or military","page_number":132,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"9ceaa297-81e2-457f-8963-7cd149331f35","block_type":"box","text":"involvement in political and economic decision-making, including changes in government through extra","page_number":132,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"2c1336f5-5666-4b62-b135-a0a98d6cb939","block_type":"box","text":"constitutional means; (ii) popular unrest associated with demands for improved political, economic and","page_number":132,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"16e53a29-9b7c-4c29-aa38-f3e7938204a1","block_type":"box","text":"social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and","page_number":132,"box":{"x":116,"y":630,"width":703,"height":12}},{"id":"05e6ffef-c3a5-4b48-aa29-b5c4807c316a","block_type":"box","text":"(v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such","page_number":132,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"d33bfbf4-4e4e-4f88-a73e-7522822442c6","block_type":"box","text":"as Indonesia, have a substantial role in regulating and supervising the economy. Another risk common","page_number":132,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"f28c26f4-bf7f-49ae-89f5-1cd59d518a36","block_type":"box","text":"to most such countries is that the economy is heavily export oriented and, accordingly, is dependent","page_number":132,"box":{"x":116,"y":676,"width":735,"height":12}},{"id":"55c24743-352f-404e-8e59-4f4135e6087c","block_type":"box","text":"upon international trade. The existence of overburdened infrastructure and obsolete financial systems","page_number":132,"box":{"x":117,"y":692,"width":745,"height":12}},{"id":"55b19a31-6a44-4622-a76f-564aeda0d0dc","block_type":"box","text":"also presents risks in certain countries, as do environmental problems. Certain economies also depend","page_number":132,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"a59335c6-796e-4e49-abc8-4afb1b95a45e","block_type":"box","text":"to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in","page_number":132,"box":{"x":116,"y":723,"width":766,"height":12}},{"id":"38311d23-0a73-4c0b-9698-1dc5a29b7f4d","block_type":"box","text":"commodity prices that, in turn, may be affected by a variety of factors.","page_number":132,"box":{"x":116,"y":738,"width":511,"height":12}},{"id":"a50ea41d-5d0c-44f5-95ca-248c1ff70f30","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse","page_number":132,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"47fea133-d3f6-4345-8d48-edb76f3ba664","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":132,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"dc04a997-91cf-4752-bf45-bc27dfff01f1","block_type":"box","text":"respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the","page_number":132,"box":{"x":117,"y":800,"width":766,"height":12}},{"id":"01fd9d8f-4f03-4cba-acaf-1b6234d7ac1d","block_type":"box","text":"notion of limited liability is less clear in certain emerging market Asia-Pacific countries. Similarly, the","page_number":132,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"797a345f-e796-44b1-a164-61710baf9ffb","block_type":"box","text":"rights of investors in developing market Asia-Pacific companies may be more limited than those of","page_number":132,"box":{"x":117,"y":831,"width":732,"height":12}},{"id":"c2cbee0a-52a8-49eb-a7b8-237e92956388","block_type":"box","text":"shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment","page_number":132,"box":{"x":116,"y":847,"width":765,"height":12}},{"id":"be202ef9-b138-4d3e-b3e3-c1aaa58097c5","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":132,"box":{"x":117,"y":862,"width":330,"height":12}},{"id":"cf0cfd9d-b35a-4141-9550-224dccf56c2a","block_type":"box","text":"II-46","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"55d17d32-c01e-427e-9cb4-b3fd4a389ba2","block_type":"box","text":"NM1026U-6042785-132/259","page_number":132,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0e22d18a-aae8-4668-ad0d-434575dda09a","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to","page_number":133,"box":{"x":117,"y":87,"width":714,"height":12}},{"id":"a5c4bf98-25c5-4e74-80b1-80404bea29c9","block_type":"box","text":"exercise substantial influence over many aspects of the private sector. In certain cases, the","page_number":133,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"87d10816-c2fe-4e4c-b5a1-a62e66895063","block_type":"box","text":"government owns or controls many companies, including the largest in the country. Accordingly,","page_number":133,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"40f6a1af-030c-4265-80c0-da703b0c215f","block_type":"box","text":"government actions in the future could have a significant effect on economic conditions in developing","page_number":133,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"f209561b-cfe9-4be7-a0ae-8989ee7bf241","block_type":"box","text":"market Asia-Pacific countries, which could affect private sector companies and a Fund itself, as well as","page_number":133,"box":{"x":117,"y":149,"width":768,"height":12}},{"id":"66d417d9-27cb-4669-88d6-7a9608a64d0d","block_type":"box","text":"the value of securities in the Fund’s portfolio. In addition, economic statistics of developing market","page_number":133,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"2897600c-0ba6-46c7-b855-5875678b206c","block_type":"box","text":"Asia-Pacific countries may be less reliable than economic statistics of more developed nations.","page_number":133,"box":{"x":116,"y":180,"width":710,"height":12}},{"id":"0048c840-65c5-484f-acd9-b0e37bf91010","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific","page_number":133,"box":{"x":117,"y":211,"width":741,"height":12}},{"id":"3230bb08-b594-4889-ac79-ef0f32c7f57a","block_type":"box","text":"issuers and the possibility that such issuers may not be subject to the same accounting, auditing and","page_number":133,"box":{"x":117,"y":227,"width":752,"height":12}},{"id":"2f8cd427-caf4-4010-a7d3-879331c7ae70","block_type":"box","text":"financial reporting standards as U.S. companies, inflation accounting rules in some developing market","page_number":133,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"b67ade5a-74fe-4f6b-a9eb-ad1d2b5d84b1","block_type":"box","text":"Asia-Pacific countries require companies that keep accounting records in the local currency, for both","page_number":133,"box":{"x":116,"y":258,"width":750,"height":12}},{"id":"ebc28a0f-5097-43dd-a7a6-b53f493e1e2a","block_type":"box","text":"tax and accounting purposes, to restate certain assets and liabilities on the company’s balance sheet","page_number":133,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"d3750da6-ed0d-4222-9382-10eec1309538","block_type":"box","text":"in order to express items in terms of currency of constant purchasing power. Inflation accounting may","page_number":133,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"1163d6cd-e692-4348-9396-3a9b69d05b65","block_type":"box","text":"indirectly generate losses or profits for certain developing market Asia-Pacific companies.","page_number":133,"box":{"x":117,"y":304,"width":669,"height":12}},{"id":"16ca7d54-7115-4400-b2de-2e392e04ca70","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia","page_number":133,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"83a1f7af-0143-4c61-b90d-ffd453aea579","block_type":"box","text":"Pacific countries, which may result in the Fund incurring additional costs and delays in providing","page_number":133,"box":{"x":117,"y":351,"width":716,"height":12}},{"id":"f6cc1ae3-2513-41f3-b1f4-be789e5ad3a4","block_type":"box","text":"transportation and custody services for such securities outside such countries.","page_number":133,"box":{"x":116,"y":366,"width":586,"height":12}},{"id":"d3303d75-1b7f-4417-901b-5f7125a21ac7","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially","page_number":133,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"c261554e-7405-476f-b37c-9b3136baf00e","block_type":"box","text":"large debtors to commercial banks and foreign governments.","page_number":133,"box":{"x":117,"y":413,"width":456,"height":12}},{"id":"85c2d3c3-3079-46db-8083-a9b57ba354af","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and","page_number":133,"box":{"x":117,"y":444,"width":705,"height":12}},{"id":"bf6383ba-e4bf-4b33-bdd4-3629bf296078","block_type":"box","text":"negative impact on a Fund’s investment portfolio and, in the longer term, could impair the ability of","page_number":133,"box":{"x":117,"y":459,"width":732,"height":12}},{"id":"85bec613-426f-4efe-8a48-00706cf369dc","block_type":"box","text":"issuers in which the Fund invests to conduct their businesses in the manner normally conducted.","page_number":133,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"8eb76e7d-799a-489d-bcc4-8c9913d5f135","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may","page_number":133,"box":{"x":117,"y":506,"width":766,"height":12}},{"id":"f940fbbb-a213-4141-a1dd-b8a267296b57","block_type":"box","text":"not be practicable or appropriate to invest in a particular developing Asia-Pacific country. 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As illustrations, certain countries may require","page_number":133,"box":{"x":116,"y":614,"width":719,"height":12}},{"id":"6700c9e0-7ad5-4035-af68-3839dc6b52c0","block_type":"box","text":"governmental approval prior to investments by foreign persons or limit the amount of investment by","page_number":133,"box":{"x":116,"y":630,"width":741,"height":12}},{"id":"4e4bfd50-73d7-429e-823a-28865cc80ca7","block_type":"box","text":"foreign persons in a particular company or limit the investment by foreign persons to only a specific","page_number":133,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"10d8bda1-2963-4a5a-896e-4dd84db7b928","block_type":"box","text":"class of securities of a company which may have less advantageous terms (including price and","page_number":133,"box":{"x":116,"y":661,"width":705,"height":12}},{"id":"8c1dbeda-e428-4dd0-ac49-7f680c539716","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. 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Certain countries may restrict","page_number":133,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"b59247c4-2b66-4fb5-a38c-982d37abd016","block_type":"box","text":"investment opportunities in issuers or industries deemed important to national interests.","page_number":133,"box":{"x":117,"y":738,"width":647,"height":12}},{"id":"7fabcafb-cc06-46b7-bb2b-09fe84f1d719","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific","page_number":133,"box":{"x":116,"y":769,"width":724,"height":12}},{"id":"a735511f-5464-402f-bef9-06f1b4230ede","block_type":"box","text":"countries, as well as limitations on such investments, also may have an adverse impact on the","page_number":133,"box":{"x":116,"y":785,"width":700,"height":12}},{"id":"de0a7842-4554-4838-baf0-47946a7c0076","block_type":"box","text":"operations of a Fund. 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A Fund could be","page_number":134,"box":{"x":117,"y":146,"width":763,"height":12}},{"id":"9841bad4-409b-4e54-a76b-4cf992485408","block_type":"box","text":"adversely affected by delays in, or a refusal to grant, any required governmental approval for","page_number":134,"box":{"x":116,"y":162,"width":693,"height":12}},{"id":"9a9ece2b-74eb-4426-9e76-29f12fd029ec","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":134,"box":{"x":117,"y":177,"width":759,"height":12}},{"id":"8961b78b-9726-4d37-a781-87cb40eaec21","block_type":"box","text":"possible that certain countries may impose currency controls or other restrictions relating to their","page_number":134,"box":{"x":117,"y":193,"width":719,"height":12}},{"id":"3efdce2d-8b60-4bb2-9ca3-6803df419d4c","block_type":"box","text":"currencies or to securities of issuers in those countries. To the extent that such restrictions have the","page_number":134,"box":{"x":116,"y":208,"width":746,"height":10}},{"id":"48945597-84cc-488c-a9e2-5b23a20fd259","block_type":"box","text":"effect of making certain investments illiquid, securities may not be available for sale to meet","page_number":134,"box":{"x":116,"y":224,"width":685,"height":12}},{"id":"45d39b1b-3452-4c3a-ae70-09eb6cbb836f","block_type":"box","text":"redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":134,"box":{"x":117,"y":239,"width":770,"height":12}},{"id":"87b91c40-6bb5-4ab3-9a11-e8c59f1d8a29","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the","page_number":134,"box":{"x":116,"y":255,"width":763,"height":12}},{"id":"92b6950b-9053-445a-a7e4-ded6278bf3f8","block_type":"box","text":"Fund’s assets that may be used to meet redemptions may be further decreased. 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The Investment Company Act restricts a Fund’s","page_number":134,"box":{"x":116,"y":361,"width":734,"height":12}},{"id":"9972ef73-3031-4491-975d-8aafd506659e","block_type":"box","text":"investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than","page_number":134,"box":{"x":117,"y":376,"width":755,"height":12}},{"id":"0347ea12-1ce8-4730-aeba-d2b6214a944a","block_type":"box","text":"15% of its revenues from “securities related activities,” as defined by the rules thereunder. These","page_number":134,"box":{"x":118,"y":392,"width":722,"height":12}},{"id":"ab69827d-bc97-49e1-87af-608f8c8df6d4","block_type":"box","text":"provisions may restrict a Fund’s investments in certain foreign banks and other financial institutions.","page_number":134,"box":{"x":117,"y":407,"width":744,"height":12}},{"id":"b3d33f1c-0f3e-49a6-b3ef-fdf70ffb395c","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":134,"box":{"x":117,"y":436,"width":699,"height":12}},{"id":"4cc0263b-a95c-423b-8f8d-c55fd5006d8d","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":134,"box":{"x":116,"y":451,"width":726,"height":12}},{"id":"3d813291-0bb2-4697-9604-34fc9bab1590","block_type":"box","text":"stability characteristic of more developed countries. Some of these countries may have in the past","page_number":134,"box":{"x":116,"y":467,"width":732,"height":12}},{"id":"3f9da736-e3ef-4df4-9ebe-cc3f45d19dbe","block_type":"box","text":"failed to recognize private property rights and have at times nationalized or expropriated the assets of","page_number":134,"box":{"x":116,"y":482,"width":759,"height":12}},{"id":"e5ada2ee-cf74-4cfd-a23a-a9babc0fd19a","block_type":"box","text":"private companies. As a result the risks described above, including the risks of nationalization or","page_number":134,"box":{"x":117,"y":498,"width":718,"height":12}},{"id":"0a8adf49-d833-4eee-ab33-9d3290c07328","block_type":"box","text":"expropriation of assets, may be heightened. 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The small size and inexperience of the securities markets in","page_number":134,"box":{"x":117,"y":544,"width":770,"height":12}},{"id":"860e9656-ed96-4a80-ad41-7a976970621b","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make","page_number":134,"box":{"x":116,"y":560,"width":753,"height":12}},{"id":"8c1920c6-5c28-475b-a1ff-4669a1a637ea","block_type":"box","text":"investments in the countries illiquid and more volatile than investments in Japan or most Western","page_number":134,"box":{"x":117,"y":575,"width":725,"height":12}},{"id":"7bf3b6c9-f9a9-41f2-bd8f-dbf8882dc85f","block_type":"box","text":"European countries. There may be little financial or accounting information available with respect to","page_number":134,"box":{"x":117,"y":591,"width":741,"height":12}},{"id":"2801d5dd-6071-4cca-9012-18a730161da4","block_type":"box","text":"issuers located in certain emerging market countries, and it may be difficult to assess the value or","page_number":134,"box":{"x":117,"y":606,"width":729,"height":12}},{"id":"28cc67e4-9013-4d8f-9f36-3cf3eb3a008a","block_type":"box","text":"prospects of an investment in such issuers.","page_number":134,"box":{"x":117,"y":622,"width":325,"height":12}},{"id":"9872c36b-c009-4035-bca2-6d7308ba2537","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be","page_number":134,"box":{"x":116,"y":650,"width":728,"height":12}},{"id":"7f740be5-c27d-47c7-b9b4-c474f462a550","block_type":"box","text":"higher than those of Funds investing primarily in domestic securities. 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The Russian securities market suffers from a variety of problems","page_number":134,"box":{"x":116,"y":756,"width":704,"height":12}},{"id":"9ec7a474-c88a-43e4-8f71-45b4bdddaf29","block_type":"box","text":"described above in “Investment in Emerging Markets” not encountered in more developed markets.","page_number":134,"box":{"x":116,"y":771,"width":736,"height":13}},{"id":"6463a30e-370f-4b8e-a48e-23eb03e7cafb","block_type":"box","text":"The Russian securities market is relatively new, and a substantial portion of securities transactions in","page_number":134,"box":{"x":116,"y":787,"width":749,"height":12}},{"id":"71811d85-955d-41d7-aabc-330a889a9888","block_type":"box","text":"Russia are privately negotiated outside of stock exchanges. The inexperience of the Russian securities","page_number":134,"box":{"x":117,"y":802,"width":763,"height":13}},{"id":"d63a40fe-3678-40dd-ab3f-c1b2c11b00ea","block_type":"box","text":"market and the limited volume of trading in securities in the market may make obtaining accurate","page_number":134,"box":{"x":117,"y":818,"width":718,"height":12}},{"id":"84a92670-65c6-45ff-99f4-fe5a49b5d283","block_type":"box","text":"prices on portfolio securities from independent sources more difficult than in more developed markets.","page_number":134,"box":{"x":117,"y":833,"width":761,"height":12}},{"id":"094b89ba-4370-4c66-b566-636908b00a00","block_type":"box","text":"Because of the underdeveloped state of Russia’s se","page_number":134,"box":{"x":117,"y":862,"width":378,"height":12}},{"id":"6ce5cc94-a7bc-4095-bae8-5bc711b0c020","block_type":"box","text":"curities markets and banking and telecommunication","page_number":134,"box":{"x":496,"y":862,"width":388,"height":12}},{"id":"b2a849f4-3247-4b22-9453-6fca3185ce81","block_type":"box","text":"systems, settlement, clearing and registration of securi","page_number":134,"box":{"x":116,"y":877,"width":396,"height":12}},{"id":"2faa20d9-487e-43bb-a46a-382a80b8686a","block_type":"box","text":"ties transactions are subject to additional risks.","page_number":134,"box":{"x":513,"y":877,"width":344,"height":12}},{"id":"14c48c0f-c8a7-4522-9e00-2ffcb0f96e9c","block_type":"box","text":"II-48","page_number":134,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1d0c3681-e9b1-4003-8bb1-e46253ec1615","block_type":"box","text":"NM1026U-6042785-134/259","page_number":134,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cd2d541a-3743-4580-a8ab-14c1c2fbe72a","block_type":"box","text":"Prior to 2013, there was no central registration","page_number":135,"box":{"x":117,"y":87,"width":341,"height":12}},{"id":"a8b02595-fa0e-4774-9260-ce6fc4c90088","block_type":"box","text":"system for equity share registration in Russia and","page_number":135,"box":{"x":458,"y":87,"width":365,"height":12}},{"id":"d77ebf09-b7fa-4a29-a5bc-f251afd0054b","block_type":"box","text":"registration was carried out either by the issuers them","page_number":135,"box":{"x":117,"y":103,"width":388,"height":12}},{"id":"2094fb28-0a9c-4956-898a-83517061ee0d","block_type":"box","text":"selves or by registrars located throughout Russia.","page_number":135,"box":{"x":507,"y":103,"width":365,"height":12}},{"id":"4a224275-880b-4cbc-8baa-3ce830582de6","block_type":"box","text":"These registrars may not have been subject to effective state supervision or licensed with any","page_number":135,"box":{"x":116,"y":118,"width":686,"height":12}},{"id":"f12d5d21-a553-4182-82cd-072a6a8d70bf","block_type":"box","text":"governmental entity. In 2013, Russia established","page_number":135,"box":{"x":116,"y":134,"width":359,"height":12}},{"id":"445110b6-7aaf-409d-a5c6-429326a0844e","block_type":"box","text":"the National Settlement Depository (“NSD”) as a","page_number":135,"box":{"x":475,"y":134,"width":356,"height":12}},{"id":"06c20cbb-7a13-4ecd-8e32-24c817acf3e5","block_type":"box","text":"recognized central securities depository, and title to Russian equities held through the NSD is now based","page_number":135,"box":{"x":117,"y":149,"width":766,"height":12}},{"id":"30e253bf-05c8-4799-8018-f2b8f0eaf204","block_type":"box","text":"on the records of the NSD and not on the records of","page_number":135,"box":{"x":116,"y":165,"width":382,"height":9}},{"id":"8c46efa3-9e33-4929-8a51-a8ad706d7b77","block_type":"box","text":"the local registrars. Alt","page_number":135,"box":{"x":499,"y":165,"width":162,"height":12}},{"id":"6453bb23-3a6d-4f63-a4c6-96ef3abea5e2","block_type":"box","text":"hough the implementation of","page_number":135,"box":{"x":662,"y":165,"width":211,"height":12}},{"id":"bdfbb68f-4b9c-43fa-9ec0-e0de5b4e9d1c","block_type":"box","text":"the NSD has enhanced the efficiency and transparency of the Russian securities market, loss still can","page_number":135,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"faaf91b6-fb47-445f-a961-49d619f22182","block_type":"box","text":"occur. 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A","page_number":135,"box":{"x":532,"y":304,"width":354,"height":10}},{"id":"8da4a435-b2ec-4210-be59-454c8f2a20e4","block_type":"box","text":"Fund also may experience difficulty in obtai","page_number":135,"box":{"x":117,"y":320,"width":312,"height":12}},{"id":"c04802b3-2e63-423d-9dcd-9282086dc331","block_type":"box","text":"ning and/or enforcing judgments in Russia.","page_number":135,"box":{"x":431,"y":320,"width":316,"height":12}},{"id":"f2e4610e-f939-41bb-aefb-05dc05914b63","block_type":"box","text":"In addition, Russia continues to assert its influence in the region through economic and military","page_number":135,"box":{"x":117,"y":351,"width":708,"height":12}},{"id":"976e3bdb-e274-474f-8dc2-c77e5a6f359b","block_type":"box","text":"measures, as it did with Georgia in the summer of 2008 and the Ukraine in 2014 and 2022. Russia","page_number":135,"box":{"x":117,"y":366,"width":735,"height":12}},{"id":"50bece5b-a41f-4f9e-9ff1-09a74945ff75","block_type":"box","text":"launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the","page_number":135,"box":{"x":117,"y":382,"width":720,"height":12}},{"id":"d6e551fd-f4ef-41c7-9858-e820dbf784a1","block_type":"box","text":"military action, resulting sanctions and resulting future market disruptions, including declines in its","page_number":135,"box":{"x":117,"y":397,"width":727,"height":12}},{"id":"0e249370-88f4-49b8-8be1-34c8ba39622b","block_type":"box","text":"stock markets and the value of the ruble against the U.S. dollar, are impossible to predict. Any such","page_number":135,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"0f1705a7-26e1-4f36-9121-4b957f13a907","block_type":"box","text":"disruptions caused by Russian military action or other actions (including cyberattacks and espionage)","page_number":135,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"54e90afd-3112-4af0-b980-a9b5a46083ff","block_type":"box","text":"or resulting actual and threatened responses to such activity, including purchasing and financing","page_number":135,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"6e8c46c7-bef7-4711-8fe5-6e43d69e9050","block_type":"box","text":"restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or","page_number":135,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"54d64f5d-d326-43de-a4aa-8358b385a1e8","block_type":"box","text":"cyberattacks on the Russian government, Russian companies or Russian individuals, including","page_number":135,"box":{"x":116,"y":475,"width":710,"height":12}},{"id":"c3f0cafc-687b-45a1-8fa1-d6e8a39078ad","block_type":"box","text":"politicians, may impact Russia’s economy and Russian issuers of securities in which the Fund invests.","page_number":135,"box":{"x":117,"y":490,"width":763,"height":12}},{"id":"5d222b5a-7780-417d-9eaf-0db6ae9550fa","block_type":"box","text":"Actual and threatened responses to such activity, including purchasing restrictions, sanctions, tariffs or","page_number":135,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"070f1508-d9ca-4cdf-95b4-90b619deb5b8","block_type":"box","text":"cyberattacks on the Russian government or Russian companies, may impact Russia’s economy and","page_number":135,"box":{"x":116,"y":521,"width":750,"height":12}},{"id":"6042bd7d-9e47-45b5-a278-045bdec2b802","block_type":"box","text":"Russian issuers of securities in which the Fund invests. Actual and threatened responses to such","page_number":135,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"ddd9b44c-d89a-461e-bca9-7433cb6f2c65","block_type":"box","text":"military action may also impact the markets for certain Russian commodities, such as oil and natural","page_number":135,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"b0759980-9317-4058-aa06-74bcd4357119","block_type":"box","text":"gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":135,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"aa6001d3-91e1-44d8-957c-f231f0e23487","block_type":"box","text":"sectors globally.","page_number":135,"box":{"x":116,"y":583,"width":125,"height":12}},{"id":"0b639a37-e4c0-425b-a89e-cb901bf0e522","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”)","page_number":135,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"610baca5-9bcb-446a-98b9-4d8c7305c1a2","block_type":"box","text":"have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain","page_number":135,"box":{"x":117,"y":630,"width":745,"height":12}},{"id":"77874648-47bb-4559-bf56-57f9b1716d0c","block_type":"box","text":"private transactions in the energy sector, asset freezes and prohibition of all business, against certain","page_number":135,"box":{"x":117,"y":645,"width":757,"height":12}},{"id":"4d8bbe9f-ebd1-4537-8eb2-37df5404c3f1","block_type":"box","text":"Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning","page_number":135,"box":{"x":117,"y":661,"width":760,"height":12}},{"id":"d3bfa79b-16f9-46b3-a108-4f178ba13328","block_type":"box","text":"Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from","page_number":135,"box":{"x":117,"y":676,"width":725,"height":12}},{"id":"4beeb931-5570-4911-9a5a-f32c22472d44","block_type":"box","text":"global payments systems that facilitate cross-border payments. These sanctions, or even the threat of","page_number":135,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"45426dcf-fdc8-4faa-9f00-095978ca649d","block_type":"box","text":"further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening","page_number":135,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"e6f018ff-ed50-47d5-a11b-eee84e01b079","block_type":"box","text":"of the ruble or other adverse consequences to the Russian economy. These sanctions have resulted","page_number":135,"box":{"x":116,"y":723,"width":746,"height":12}},{"id":"87c2da35-67a0-4f51-ba20-a1b5ca488990","block_type":"box","text":"and may continue to result in the immediate freeze of Russian securities and/or funds invested in","page_number":135,"box":{"x":116,"y":738,"width":719,"height":12}},{"id":"5c018da3-8bc8-4207-a147-5b503fd1bbc1","block_type":"box","text":"prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or","page_number":135,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"e913adc9-0e52-40a5-8e4b-e32c33ccc2c5","block_type":"box","text":"assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may","page_number":135,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"b26dfd14-8739-4ed5-adb3-1b99b9084a57","block_type":"box","text":"further impair the value and liquidity of Russian securities.","page_number":135,"box":{"x":116,"y":785,"width":428,"height":12}},{"id":"5cde281f-efeb-466e-b768-abcfed507cf3","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":135,"box":{"x":116,"y":816,"width":253,"height":12}},{"id":"ab0059d0-c23b-40a6-a7b1-5c6ae6ab4f4c","block_type":"box","text":"The ability of foreign investors (such as a Fund) to invest in Saudi","page_number":135,"box":{"x":376,"y":816,"width":486,"height":12}},{"id":"7360aded-6ba0-46d1-b125-d51fa1abc2ee","block_type":"box","text":"Arabian issuers is new and untested. Such ability could be restricted or revoked by the Saudi Arabian","page_number":135,"box":{"x":116,"y":831,"width":757,"height":12}},{"id":"a59f5e0e-317e-4389-a8c5-00e7090d3b03","block_type":"box","text":"government at any time, and unforeseen risks could materialize due to foreign ownership in such","page_number":135,"box":{"x":116,"y":847,"width":724,"height":12}},{"id":"af4d0033-f276-4164-8dda-8c18dc4f1fdf","block_type":"box","text":"securities. In addition, the Capital Market Authority (“CMA”) places investment limitations on the","page_number":135,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"e1efd8a6-c521-4db4-a68b-80763a35138c","block_type":"box","text":"ownership of Saudi Arabian issuers by foreign investors, including a limitation on a Fund’s ownership","page_number":135,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"4322b1c9-ef6f-4ca7-a2d5-d98349e5247c","block_type":"box","text":"II-49","page_number":135,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0a028571-7956-4fd4-afa4-20ffe4a863de","block_type":"box","text":"NM1026U-6042785-135/259","page_number":135,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6a86774d-f351-4ac7-9429-e1b31b2a4da7","block_type":"box","text":"of any single issuer listed on the Saudi Arabian Stock Exchange, which may prevent a Fund from","page_number":136,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"7f08c809-d779-4abb-9edd-a5455b8b3058","block_type":"box","text":"investing in accordance with its strategy and contribute to tracking error against the Underlying Index.","page_number":136,"box":{"x":117,"y":103,"width":757,"height":12}},{"id":"169022b7-5494-453a-aad5-a4b693d7290a","block_type":"box","text":"These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":136,"box":{"x":116,"y":118,"width":710,"height":12}},{"id":"cfedd717-ee56-499f-ac7b-f180d9def42b","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":136,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"03160a6d-99b0-4081-ada2-c96371c0fbbd","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":136,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"5c415328-bbdf-46d2-9576-2393f8dcd022","block_type":"box","text":"Major disruptions or regulatory changes could occur in the Saudi Arabian market, any of which could","page_number":136,"box":{"x":117,"y":165,"width":750,"height":12}},{"id":"180f4a9f-74d4-4db4-a79c-051e3fd6207b","block_type":"box","text":"negatively impact a Fund. These risks may be exacerbated, compared to more developed markets,","page_number":136,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"c7b59a3d-a713-49bd-9149-dc2ba50d8a72","block_type":"box","text":"given the limited history of foreign investment in the Saudi Arabian market. Investments in Saudi","page_number":136,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"ad7317cc-eb4a-4ced-ad97-6f77bd2d881e","block_type":"box","text":"Arabia may also be subject to loss due to expropriation or nationalization of assets and property or the","page_number":136,"box":{"x":116,"y":211,"width":764,"height":12}},{"id":"e4bb35cb-29a8-429a-9311-ea5e465c9d78","block_type":"box","text":"imposition of restrictions on additional foreign investments and repatriation of capital. Such heightened","page_number":136,"box":{"x":117,"y":227,"width":764,"height":12}},{"id":"83a62978-ba84-41fc-a415-fd4f24e7da9a","block_type":"box","text":"risks may include, among others, restrictions on and government intervention in international trade,","page_number":136,"box":{"x":117,"y":242,"width":739,"height":12}},{"id":"9f63e647-88be-4b66-8e25-95c48b5cf3a4","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in","page_number":136,"box":{"x":116,"y":258,"width":694,"height":12}},{"id":"21d54f40-c525-4720-928c-cd319ad5feaf","block_type":"box","text":"governmental decision making, armed conflict, crime and instability as a result of religious, ethnic and/","page_number":136,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"10ec6b9c-069f-4300-8ac6-9a9f76a681a1","block_type":"box","text":"or socioeconomic unrest. Saudi Arabia has privatized, or has begun the process of privatizing, certain","page_number":136,"box":{"x":116,"y":289,"width":759,"height":12}},{"id":"8037668c-8738-4d24-91cb-0233b3e0886c","block_type":"box","text":"entities and industries. Newly privatized companies may face strong competition from government","page_number":136,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"d7e59328-4f42-4bd5-865e-0d2f957a0329","block_type":"box","text":"sponsored competitors that have not been privatized. In some instances, investors in newly privatized","page_number":136,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"c091e695-31db-4e68-bc4e-8e5061d3790d","block_type":"box","text":"entities have suffered losses due to the inability of the newly privatized entities to adjust quickly to a","page_number":136,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"c59f8bd1-81fd-44e1-a856-d20047ece4cc","block_type":"box","text":"competitive environment or changing regulatory and legal standards or, in some cases, due to","page_number":136,"box":{"x":116,"y":351,"width":703,"height":12}},{"id":"928ba8e0-b4b4-4024-aad7-ae774de34540","block_type":"box","text":"re-nationalization of such privatized entities. There is no assurance that similar losses will not recur.","page_number":136,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"4d4b5658-6061-4cb1-ae0e-1d4f58c366d1","block_type":"box","text":"Further, under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid","page_number":136,"box":{"x":117,"y":382,"width":754,"height":12}},{"id":"c82004ea-47c4-4673-a0d2-04923dd92711","block_type":"box","text":"by a Saudi Arabian company to foreign stockholders are generally subject to a 5% withholding tax","page_number":136,"box":{"x":117,"y":397,"width":730,"height":12}},{"id":"c339f988-098f-4b67-9bb0-a6f376c4d240","block_type":"box","text":"(different tax rates may apply pursuant to an applicable treaty). Saudi Arabia is highly reliant on income","page_number":136,"box":{"x":117,"y":413,"width":770,"height":12}},{"id":"082f6220-faf7-4984-997a-757acc177407","block_type":"box","text":"from the sale of petroleum and trade with other countries involved in the sale of petroleum, and its","page_number":136,"box":{"x":116,"y":428,"width":732,"height":12}},{"id":"d47c37ea-2ccc-403a-9ae2-9b4caed364b5","block_type":"box","text":"economy is therefore vulnerable to changes in foreign currency values and the market for petroleum.","page_number":136,"box":{"x":116,"y":444,"width":753,"height":12}},{"id":"422f40a7-3bbb-49f4-ad7e-a5de95430af1","block_type":"box","text":"As global demand for petroleum fluctuates, Saudi Arabia may be significantly impacted.","page_number":136,"box":{"x":116,"y":459,"width":655,"height":12}},{"id":"e9a6ce3d-920d-455f-9179-a653cf465fcc","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial","page_number":136,"box":{"x":117,"y":490,"width":701,"height":12}},{"id":"2ebcb37f-4b60-46b5-95e4-11d072394ae9","block_type":"box","text":"influence over many aspects of the private sector. Although liberalization in the wider economy is","page_number":136,"box":{"x":117,"y":506,"width":724,"height":12}},{"id":"7c7d2040-066d-49c9-8b45-db4bd52ffe76","block_type":"box","text":"underway, in many areas it has lagged significantly: restrictions on foreign ownership persist, and the","page_number":136,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"0c70e572-9082-44ca-9b93-bb080d0f9459","block_type":"box","text":"government has an ownership stake in many key industries. The situation is exacerbated by the fact","page_number":136,"box":{"x":116,"y":537,"width":748,"height":12}},{"id":"fb310442-a7ff-4682-8cf9-7a4cecc487cf","block_type":"box","text":"that Saudi Arabia is governed by an absolute monarchy. Saudi Arabia has historically experienced","page_number":136,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"5b852474-d26d-47da-88f1-4c212da10688","block_type":"box","text":"strained relations with economic partners worldwide, including other countries in the Middle East due to","page_number":136,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"ab360c5b-a008-443d-8c87-05bc7b6096a4","block_type":"box","text":"geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security, including","page_number":136,"box":{"x":116,"y":583,"width":742,"height":12}},{"id":"b802eee5-4735-483e-9be4-ec0b03c59a5a","block_type":"box","text":"terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":136,"box":{"x":116,"y":599,"width":757,"height":12}},{"id":"241c4cb2-869c-46fc-90ef-f60c32d1a24c","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions","page_number":136,"box":{"x":117,"y":614,"width":766,"height":12}},{"id":"944a77fe-3ce7-422d-9ad0-5d572fa4c240","block_type":"box","text":"in Saudi Arabia, which could affect private sector companies and a Fund, as well as the value of","page_number":136,"box":{"x":117,"y":630,"width":717,"height":12}},{"id":"1759aafb-0949-4562-bf97-044b75027446","block_type":"box","text":"securities in a Fund’s portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian","page_number":136,"box":{"x":116,"y":645,"width":765,"height":12}},{"id":"e0e07c48-3a98-4058-b442-d1df836675bc","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":136,"box":{"x":116,"y":661,"width":760,"height":12}},{"id":"c10e2cc0-13c1-4752-bd3d-085b42120591","block_type":"box","text":"Saudi Arabian securities, a weakening of the Saudi riyal or other adverse consequences to the Saudi","page_number":136,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"3a301f83-dc2c-4b84-a77d-f56644312c8a","block_type":"box","text":"Arabian economy. In addition, Saudi Arabia’s economy relies heavily on cheap, foreign labor, and","page_number":136,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"545db6a8-f779-4fe1-8d20-d82e8fea3ea7","block_type":"box","text":"changes in the availability of this labor supply could have an adverse effect on the economy.","page_number":136,"box":{"x":116,"y":707,"width":684,"height":12}},{"id":"41fcc46b-60c5-4ba8-b32d-421cf4aaedc6","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a","page_number":136,"box":{"x":116,"y":738,"width":725,"height":12}},{"id":"b62b0f02-c883-4505-86a4-26067f15a662","block_type":"box","text":"result, securities markets in Saudi Arabia are subject to greater risks associated with market volatility,","page_number":136,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"98fc22cf-85d4-4602-a48b-1aa6b02781eb","block_type":"box","text":"lower market capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations,","page_number":136,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"eb3d4bd9-72b6-4346-80ee-5ee3440f0930","block_type":"box","text":"uncertainty regarding the existence of trading markets, governmental control and heavy regulation of","page_number":136,"box":{"x":117,"y":785,"width":747,"height":12}},{"id":"a9362573-739d-4667-a435-a9ef4f107daa","block_type":"box","text":"labor and industry. Shares of certain Saudi Arabian companies tend to trade less frequently than those","page_number":136,"box":{"x":117,"y":800,"width":761,"height":12}},{"id":"49ec37ba-a762-4eed-ae75-ffd1774a86b0","block_type":"box","text":"of companies on exchanges in more developed markets. Such infrequent trading may adversely affect","page_number":136,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"3bddbfbc-ebf4-434a-bb77-8c78e2578b1f","block_type":"box","text":"the pricing of these securities and a Fund’s ability to sell these securities in the future. Current","page_number":136,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"dd6c68fd-968b-40fd-9c65-7a0d597f1066","block_type":"box","text":"regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":136,"box":{"x":117,"y":847,"width":733,"height":12}},{"id":"6037137a-139e-4d18-8f27-8e99a07657b8","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":136,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"146cc7d1-f3a9-4b20-854a-5d57d1fc7bbe","block_type":"box","text":"Fund than is typically the case for investment managers.","page_number":136,"box":{"x":117,"y":878,"width":424,"height":12}},{"id":"0d26094b-be85-4cc1-ad5b-735670655714","block_type":"box","text":"II-50","page_number":136,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a6fa4476-c907-45e6-a49c-208229c7ae15","block_type":"box","text":"NM1026U-6042785-136/259","page_number":136,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6561b67c-0162-4308-81b9-ecc73135ec3e","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically","page_number":137,"box":{"x":116,"y":87,"width":687,"height":12}},{"id":"36ad204b-2cdb-4ce3-98a3-760836b0b6e6","block_type":"box","text":"experienced political instability, and there remains the possibility that the stability will not hold in the","page_number":137,"box":{"x":116,"y":103,"width":741,"height":12}},{"id":"3c349167-1906-4409-8bb9-43afad588683","block_type":"box","text":"future or that instability in the larger Middle East region could adversely impact the economy of Saudi","page_number":137,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"2f643028-dfe3-4361-ae78-6ff6a9c3274c","block_type":"box","text":"Arabia. Instability may be caused by military developments, government interventions in the","page_number":137,"box":{"x":116,"y":134,"width":686,"height":12}},{"id":"75ade9f6-f71f-495b-a175-ca64b3df55b8","block_type":"box","text":"marketplace, terrorism, extremist attitudes, attempted social or political reforms, religious differences,","page_number":137,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"dc0b9ac1-d724-4b3c-b980-ef2946f99ed2","block_type":"box","text":"or other factors. Additionally, anti-Western views held by certain groups in the Middle East may","page_number":137,"box":{"x":116,"y":165,"width":710,"height":12}},{"id":"217d160e-4c47-4d68-b2bc-da5aa468645f","block_type":"box","text":"influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":137,"box":{"x":117,"y":180,"width":740,"height":12}},{"id":"614ac2a5-a368-41b5-a150-d9d2ddd78bf4","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S.","page_number":137,"box":{"x":116,"y":196,"width":768,"height":12}},{"id":"a52b88ec-cc98-40f2-98d8-d0de51e54565","block_type":"box","text":"is a significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi","page_number":137,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"51c88b66-d159-49ea-ad26-9c46706ff14c","block_type":"box","text":"Arabia. As a result, economic conditions of Saudi Arabia may be particularly affected by changes in the","page_number":137,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"ade16f28-6dec-478a-937d-bf6e8bc2b802","block_type":"box","text":"U.S. economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs,","page_number":137,"box":{"x":117,"y":242,"width":738,"height":12}},{"id":"c5483904-da69-4c77-ad34-c4349072bb6f","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":137,"box":{"x":116,"y":258,"width":746,"height":12}},{"id":"ed3000fc-4624-4731-8b07-37b44524aaea","block_type":"box","text":"adverse effect on the economic conditions of Saudi Arabia and, as a result, securities to which the","page_number":137,"box":{"x":116,"y":273,"width":733,"height":11}},{"id":"de41c772-6dee-4ce9-8f46-3a203682878a","block_type":"box","text":"Fund has exposure. Political instability in North Africa and the larger Middle East region has caused","page_number":137,"box":{"x":117,"y":289,"width":743,"height":12}},{"id":"c7de5395-c246-4d65-8e48-334ae4c76361","block_type":"box","text":"significant disruptions to many industries. Continued political and social unrest in these areas may","page_number":137,"box":{"x":116,"y":304,"width":732,"height":12}},{"id":"9eff99c0-d586-4b0f-94cc-1147994a6de0","block_type":"box","text":"negatively affect the value of securities in a Fund’s portfolio.","page_number":137,"box":{"x":117,"y":320,"width":449,"height":12}},{"id":"8a2c3f64-fd59-46c9-9a74-0367043503d3","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to","page_number":137,"box":{"x":117,"y":351,"width":731,"height":12}},{"id":"4770f20e-69a7-4ea5-ab65-376169703628","block_type":"box","text":"sanctions and/or embargoes imposed by the U.S. Government and the United Nations and/or countries","page_number":137,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"a1dcbc13-f804-46c5-947d-f7eb334d37bd","block_type":"box","text":"identified by the U.S. Government as state sponsors of terrorism. As a result, an issuer may sustain","page_number":137,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"fddd5295-806d-405d-816d-7fc6e9b0d123","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":137,"box":{"x":116,"y":397,"width":734,"height":12}},{"id":"947f1b2f-2407-4d57-baf9-90d09a3bd309","block_type":"box","text":"countries. A Fund, as an investor in such issuers will be indirectly subject to those risks.","page_number":137,"box":{"x":116,"y":413,"width":655,"height":12}},{"id":"f135df93-fefe-458d-9e6e-e8047a69181c","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":137,"box":{"x":116,"y":444,"width":237,"height":12}},{"id":"8bf28c69-82b7-43d1-b5fe-c5cd002dbdbc","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory,","page_number":137,"box":{"x":354,"y":444,"width":493,"height":12}},{"id":"d1320275-4a94-4c5f-a542-a1f1272e88c0","block_type":"box","text":"political, currency, security, expropriation and/or nationalization of assets and economic risk specific to","page_number":137,"box":{"x":117,"y":459,"width":764,"height":12}},{"id":"a31b1924-afbb-4b22-afc1-e04536042038","block_type":"box","text":"Venezuela. Venezuela is extremely well endowed with natural resources, including oil and natural gas,","page_number":137,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"c071b491-e374-4882-9ba5-1d6a6d2dbd9a","block_type":"box","text":"and its economy is heavily dependent on export of natural resources to key trading partners. Any act of","page_number":137,"box":{"x":116,"y":490,"width":770,"height":12}},{"id":"9065f2b1-d05f-4952-a3aa-0c8142ca5c4e","block_type":"box","text":"terrorism, an armed conflict or a breakdown of a key trading relationship that disrupts the production or","page_number":137,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"10e14abf-cca9-41ee-8725-e9b492927fb3","block_type":"box","text":"export of natural resources will likely negatively affect the Venezuelan economy. The government","page_number":137,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"1015f5e8-26af-427d-9795-b9eaf8c19f05","block_type":"box","text":"continues to control key sectors of the economy, including upstream oil and gas production, and has","page_number":137,"box":{"x":116,"y":537,"width":749,"height":12}},{"id":"67d7aef8-e1da-4c9a-b3e1-8a5ff95c5497","block_type":"box","text":"sought to increase its role in key sectors, such as telecommunications and steel. Meanwhile,","page_number":137,"box":{"x":116,"y":552,"width":692,"height":12}},{"id":"03b04526-6aa7-4b8d-8bbb-74e292569de5","block_type":"box","text":"ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":137,"box":{"x":116,"y":568,"width":753,"height":12}},{"id":"a1113f47-317e-4492-a53f-11befcc9e96f","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues","page_number":137,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"b88bc4f6-b27a-41c5-9855-fd5ffe99c0c3","block_type":"box","text":"between the governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions,","page_number":137,"box":{"x":117,"y":599,"width":731,"height":12}},{"id":"0ee50469-768c-4552-953d-1a6ba5945b90","block_type":"box","text":"which consist of asset freezes and sectoral sanctions, on certain Venezuelan individuals and","page_number":137,"box":{"x":116,"y":614,"width":693,"height":11}},{"id":"bc6c27ee-0820-4580-9433-01c0f9bc09be","block_type":"box","text":"Venezuelan corporate entities, and on the Venezuelan government. The U.S. could also institute","page_number":137,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"76c02a53-6aa6-472b-b2ee-1d2e95f8384d","block_type":"box","text":"broader sanctions on Venezuela. The U.S. has also taken military action against Venezuela in an effort","page_number":137,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"d3bf1173-1405-4742-829d-1583f06ad5ba","block_type":"box","text":"to effect regime change. Military action, sanctions, or even the threat of further military action and","page_number":137,"box":{"x":116,"y":661,"width":721,"height":12}},{"id":"c78d0a44-ac0b-4716-b052-809a683cc79d","block_type":"box","text":"sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a weakening of","page_number":137,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"9d0de994-7057-42a4-a333-20703da8fe60","block_type":"box","text":"the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":137,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"d7b50e83-da63-498f-9767-4ceb78bd0649","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions","page_number":137,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"e48e85a8-6cd4-4d27-a435-bba6dada85c9","block_type":"box","text":"against Venezuela may in the future be imposed by the U.S. or other countries. These factors, among","page_number":137,"box":{"x":116,"y":723,"width":755,"height":12}},{"id":"555bab0f-502e-42bd-83d2-5cf8f9ca2875","block_type":"box","text":"others, can have a negative impact on a Fund’s investments.","page_number":137,"box":{"x":116,"y":738,"width":451,"height":12}},{"id":"582379a5-cd64-4530-adba-4894464ec455","block_type":"box","text":"Brady Bonds.","page_number":137,"box":{"x":116,"y":769,"width":99,"height":12}},{"id":"d1efadcb-dce2-41b9-b6da-d7ba0fe537d5","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities","page_number":137,"box":{"x":222,"y":769,"width":628,"height":12}},{"id":"529ca43a-ae71-404c-be25-9f3fb896e748","block_type":"box","text":"may include emerging market governmental debt obligations commonly referred to as Brady Bonds.","page_number":137,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"9c2f66f4-ef59-4e08-bdd1-ee438fe96847","block_type":"box","text":"Brady Bonds are securities created through the exchange of existing commercial bank loans to","page_number":137,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"8732f09f-48f7-44e3-ace6-62489987d15b","block_type":"box","text":"sovereign entities for new obligations in connection with debt restructurings under a debt restructuring","page_number":137,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"81693e95-064f-49fe-ace0-ac80833532b8","block_type":"box","text":"plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the “Brady Plan”). Brady","page_number":137,"box":{"x":117,"y":831,"width":760,"height":12}},{"id":"91ca2046-167e-4440-a980-6ada46383ca8","block_type":"box","text":"Plan debt restructurings have been implemented in a number of countries, including: Argentina,","page_number":137,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"e63d067f-6c2b-420d-a663-38df525e4403","block_type":"box","text":"Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico, Niger, Nigeria,","page_number":137,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"61835bf0-49e6-4d1d-85d2-a3cc4b8ee0e3","block_type":"box","text":"Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. Beginning in the early","page_number":137,"box":{"x":117,"y":878,"width":728,"height":12}},{"id":"392c1f52-b563-4ca7-82b4-ef2da724567e","block_type":"box","text":"II-51","page_number":137,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"be1d15df-70f0-47f2-bdc5-ec8e77d71200","block_type":"box","text":"NM1026U-6042785-137/259","page_number":137,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8d60990c-21fb-4923-b5a6-ceab1a00e7c5","block_type":"box","text":"2000s, certain countries began retiring their Brady Bonds, including Brazil, Colombia, Mexico, the","page_number":138,"box":{"x":116,"y":87,"width":727,"height":12}},{"id":"363eb119-732d-40e7-b541-da989a119a3e","block_type":"box","text":"Philippines, and Venezuela.","page_number":138,"box":{"x":117,"y":103,"width":211,"height":11}},{"id":"fb4487d0-4739-4b82-a8de-e6eafe0c8bd7","block_type":"box","text":"Brady Bonds may be collateralized or uncollateralized, are issued in various currencies (primarily the","page_number":138,"box":{"x":117,"y":134,"width":752,"height":12}},{"id":"726c5b02-6917-4a24-8b6f-db742ae470e8","block_type":"box","text":"U.S. dollar) and are actively traded in the OTC secondary market. Brady Bonds are not considered to","page_number":138,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"ffe4e35c-63c1-498a-a648-04909eb8ea09","block_type":"box","text":"be U.S. Government Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be","page_number":138,"box":{"x":117,"y":165,"width":747,"height":12}},{"id":"61bf16fe-b95c-4f57-ac54-03cb89408ad9","block_type":"box","text":"fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal by","page_number":138,"box":{"x":116,"y":180,"width":768,"height":12}},{"id":"b60cb668-80ac-4423-9948-dcabff1ef260","block_type":"box","text":"U.S. Treasury zero-coupon bonds having the same maturity as the Brady Bonds. Interest payments on","page_number":138,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"c8b872ae-7fdc-40ca-a787-fc6eac07def2","block_type":"box","text":"these Brady Bonds generally are collateralized on a one-year or longer rolling-forward basis by cash or","page_number":138,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"699b889f-a2b7-4b22-9a94-164c84ca7984","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":138,"box":{"x":116,"y":227,"width":738,"height":12}},{"id":"1fcf6f91-f987-41cb-b60e-d30d43812a38","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":138,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"e0780a3b-b77b-46d5-bb32-d45fefc1c138","block_type":"box","text":"based on the applicable interest rate at that time and is adjusted at regular intervals thereafter. Certain","page_number":138,"box":{"x":117,"y":258,"width":764,"height":12}},{"id":"f7878b1b-1455-4f32-afaf-6cd534277d1c","block_type":"box","text":"Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect","page_number":138,"box":{"x":117,"y":273,"width":711,"height":12}},{"id":"75bad020-1fda-433b-99dd-108e710f6a5b","block_type":"box","text":"constitute supplemental interest payments but generally are not collateralized. Brady Bonds are often","page_number":138,"box":{"x":116,"y":289,"width":757,"height":12}},{"id":"f7359b9b-8dad-4135-85a6-64b3bda54822","block_type":"box","text":"viewed as having three or four valuation components: (i) the collateralized repayment of principal at","page_number":138,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"3fa967e9-de5c-48c3-ae6f-5d01ef999bb5","block_type":"box","text":"final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and","page_number":138,"box":{"x":116,"y":320,"width":753,"height":12}},{"id":"eb4cf5e8-9bd1-48a9-a7c2-ddfc7b33577f","block_type":"box","text":"(iv) any uncollateralized repayment of principal at maturity (the uncollateralized amounts constitute the","page_number":138,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"2e9ca668-fb53-41a1-afed-7e18ab797204","block_type":"box","text":"“residual risk”).","page_number":138,"box":{"x":116,"y":351,"width":116,"height":12}},{"id":"238756de-e078-4d3d-ade5-a251030125d5","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign","page_number":138,"box":{"x":117,"y":382,"width":695,"height":12}},{"id":"3a0b7135-6953-4110-9f01-0f52728aa627","block_type":"box","text":"securities, including the history of defaults with respect to commercial bank loans by public and private","page_number":138,"box":{"x":116,"y":397,"width":765,"height":12}},{"id":"87357438-7c9e-4736-9f23-04b17934347f","block_type":"box","text":"entities of countries issuing Brady Bonds. In light of the residual risk of Brady Bonds and, among other","page_number":138,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"bc67e9ec-d9c2-410a-9160-25a96a576661","block_type":"box","text":"factors, the history of defaults, investments in Brady Bonds are considered speculative. There can be","page_number":138,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"9ab482d6-1ae1-4ca9-ae56-dd3e753a05f5","block_type":"box","text":"no assurance that Brady Bonds in which the Funds may invest will not be subject to restructuring","page_number":138,"box":{"x":117,"y":444,"width":723,"height":12}},{"id":"170a262d-4825-4efe-adf6-eca09e45d148","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":138,"box":{"x":116,"y":459,"width":752,"height":12}},{"id":"b24b3497-225c-4524-b710-87bfb2268e10","block_type":"box","text":"principal on any of its holdings.","page_number":138,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"204e717c-3c64-4823-974b-3c88e36e2613","block_type":"box","text":"China Investments Risk.","page_number":138,"box":{"x":117,"y":506,"width":185,"height":9}},{"id":"2b045f8f-8d0f-49ed-9b42-c35ad9fbf7be","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the","page_number":138,"box":{"x":117,"y":529,"width":734,"height":12}},{"id":"1fa954c3-ea22-44b3-bb51-2582900a4853","block_type":"box","text":"“PRC”), including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and","page_number":138,"box":{"x":116,"y":544,"width":764,"height":12}},{"id":"44f6592e-da0d-4c69-8223-a34a8a3bfb93","block_type":"box","text":"special considerations not typically associated with investing in the U.S. securities markets. Such","page_number":138,"box":{"x":116,"y":560,"width":725,"height":12}},{"id":"1f629fc1-6153-42ba-abef-5b90ba8d65c5","block_type":"box","text":"heightened risks include, among others, an authoritarian government, popular unrest associated with","page_number":138,"box":{"x":117,"y":576,"width":753,"height":11}},{"id":"604db990-bff6-47b0-9d02-6f9c2bd696d4","block_type":"box","text":"demands for improved political, economic and social conditions, the impact of regional conflict on the","page_number":138,"box":{"x":116,"y":591,"width":754,"height":12}},{"id":"b62f0126-4948-4b35-8b44-7e8725d46864","block_type":"box","text":"economy and hostile relations with other countries.","page_number":138,"box":{"x":116,"y":607,"width":382,"height":11}},{"id":"332af656-e798-483b-a7f4-0b39e2d936be","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could","page_number":138,"box":{"x":117,"y":637,"width":729,"height":12}},{"id":"78364859-3ba8-4ab1-a439-7c2a5e562c8f","block_type":"box","text":"disrupt economic development. The Chinese economy is vulnerable to the long-running disagreements","page_number":138,"box":{"x":116,"y":653,"width":769,"height":12}},{"id":"6d46f2e4-481c-4766-8163-afe42c0bbfb2","block_type":"box","text":"and religious and nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been","page_number":138,"box":{"x":116,"y":668,"width":752,"height":12}},{"id":"13e5cd2a-b618-45a2-8c6a-38a2ec1fa121","block_type":"box","text":"tensions between the Chinese government and many people in Hong Kong who perceive China as","page_number":138,"box":{"x":116,"y":684,"width":733,"height":12}},{"id":"6d4a6887-51e7-45e7-8b16-ae01b681900d","block_type":"box","text":"tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal, and social","page_number":138,"box":{"x":116,"y":700,"width":725,"height":12}},{"id":"0fd310de-50a3-4ba3-8171-98321d8faf2c","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. Due to the interconnected","page_number":138,"box":{"x":116,"y":715,"width":716,"height":9}},{"id":"0588d0d0-b1eb-4a8a-84cd-59651be48362","block_type":"box","text":"nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty","page_number":138,"box":{"x":117,"y":730,"width":756,"height":13}},{"id":"de33050d-28a7-4b95-9342-8f27b692e626","block_type":"box","text":"in the Hong Kong and Chinese markets. China has a complex territorial dispute regarding the","page_number":138,"box":{"x":117,"y":746,"width":691,"height":12}},{"id":"db63ea25-0557-447b-a08d-21b459494247","block_type":"box","text":"sovereignty of Taiwan and has made threats of invasion. Taiwan-based companies and individuals are","page_number":138,"box":{"x":116,"y":761,"width":761,"height":13}},{"id":"091f2334-e6e7-4468-8f76-4b50b9eb1d7d","block_type":"box","text":"significant investors in China. 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Any escalation of hostility between China and Taiwan would likely have a","page_number":138,"box":{"x":117,"y":823,"width":753,"height":13}},{"id":"85222dc8-3073-41d6-b7f4-d6431b404ff2","block_type":"box","text":"significant adverse impact on the value of the Fund’s investments in both countries and the region. In","page_number":138,"box":{"x":116,"y":839,"width":755,"height":12}},{"id":"cf56e787-2bc4-4460-9998-82b84b4e76d0","block_type":"box","text":"addition, China has strained international relations with Japan, India, the Philippines and other","page_number":138,"box":{"x":116,"y":854,"width":703,"height":12}},{"id":"c1656f03-2fdd-4d71-9900-ca7598813494","block_type":"box","text":"neighbors due to territorial disputes, historical animosities and other defense concerns. Frictions","page_number":138,"box":{"x":117,"y":870,"width":717,"height":12}},{"id":"fd1577b2-d30b-40c2-ad4d-b6def48b6c4e","block_type":"box","text":"II-52","page_number":138,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"117da87c-4a67-492e-893b-14dd36b8036b","block_type":"box","text":"NM1026U-6042785-138/259","page_number":138,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d8d0a0aa-3987-45b0-be98-ea51cd238b68","block_type":"box","text":"between China and the Philippines in the South China Sea pose a risk of escalation potentially leading","page_number":139,"box":{"x":117,"y":87,"width":765,"height":12}},{"id":"092461ed-758a-4dd9-8a88-9d53edebdd68","block_type":"box","text":"to military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks","page_number":139,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"d36823af-395a-454a-8850-3f7362b7f519","block_type":"box","text":"against foreign companies and foreign governments. Actual and threatened responses to such activity","page_number":139,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"101cc114-1145-4930-9da7-83de209ee217","block_type":"box","text":"and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks","page_number":139,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"e574f104-1ccb-4027-8670-d5f32695ff8c","block_type":"box","text":"on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers","page_number":139,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"8afce091-52a7-4a1a-ac44-d166abd29d6b","block_type":"box","text":"of securities in which a Fund invests. China could be affected by military events on the Korean","page_number":139,"box":{"x":116,"y":165,"width":705,"height":12}},{"id":"12834d5e-5248-441e-9f18-1449978f5036","block_type":"box","text":"peninsula or internal instability within North Korea. These situations may cause uncertainty in the","page_number":139,"box":{"x":117,"y":180,"width":723,"height":12}},{"id":"b9ed2a4c-a8ef-451e-a135-75f9933ccead","block_type":"box","text":"Chinese market and may adversely affect the performance of the Chinese economy.","page_number":139,"box":{"x":117,"y":196,"width":631,"height":12}},{"id":"732b6f65-0578-4aba-b1e3-6e17a0f8329e","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy,","page_number":139,"box":{"x":116,"y":227,"width":712,"height":12}},{"id":"2daf64dd-e84e-4db4-a664-f3faa83a6c28","block_type":"box","text":"promote foreign investment in the economy, reduce government control of the economy and develop","page_number":139,"box":{"x":117,"y":242,"width":752,"height":12}},{"id":"ea7f1d9e-d9da-44b8-9929-98161e08c585","block_type":"box","text":"market mechanisms. However, the Chinese government still exercises substantial influence over many","page_number":139,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"645ddcf8-a1cd-4077-b8d4-5a6a413d1415","block_type":"box","text":"aspects of the private sector and may own or control many companies. Chinese companies, such as","page_number":139,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"116352ab-8e28-42cd-aa8f-e0a203a8d8f1","block_type":"box","text":"those in the financial services or technology sectors, and potentially other sectors in the future, are","page_number":139,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"36ff2b33-e5be-4366-884f-9a8412f64e0e","block_type":"box","text":"subject to the risk that Chinese authorities can intervene in their operations and structure. The Chinese","page_number":139,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"7856c80a-7bb0-41d1-9118-f9034b6c4921","block_type":"box","text":"government continues to maintain a major role in economic policymaking and investing in China","page_number":139,"box":{"x":116,"y":320,"width":717,"height":12}},{"id":"5c725449-2514-47ff-a6ad-3d0ebec0b543","block_type":"box","text":"involves risk of loss due to expropriation, nationalization, confiscation of assets and property or the","page_number":139,"box":{"x":117,"y":335,"width":736,"height":12}},{"id":"9180fe54-73f4-4db8-a350-28e6941728b7","block_type":"box","text":"imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":139,"box":{"x":117,"y":351,"width":647,"height":12}},{"id":"14cf4d28-72d2-4475-90f8-2f4de91f9252","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of","page_number":139,"box":{"x":116,"y":382,"width":764,"height":12}},{"id":"013b1cdf-9229-4887-8ef6-33107f2e87d1","block_type":"box","text":"trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks.","page_number":139,"box":{"x":116,"y":397,"width":761,"height":12}},{"id":"f8255c5f-cdbc-4732-b30d-cf8b337d618a","block_type":"box","text":"This may affect market price and liquidity of these stocks, and may have an unpredictable impact on","page_number":139,"box":{"x":116,"y":413,"width":748,"height":12}},{"id":"f0bd3701-a6e5-46bf-b63a-599af883a994","block_type":"box","text":"the investment activities of the Funds. Furthermore, such market interventions may have a negative","page_number":139,"box":{"x":116,"y":428,"width":745,"height":12}},{"id":"b83cb732-ec4b-404f-9f89-a08d679313a8","block_type":"box","text":"impact on market sentiment which may in turn affect the performance of the securities markets and as","page_number":139,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"eede8b96-d321-402b-a536-8f6a1a303924","block_type":"box","text":"a result the performance of the Funds.","page_number":139,"box":{"x":116,"y":459,"width":290,"height":12}},{"id":"b3b84a70-5d6e-4451-b0a1-6b5f2c2d607b","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of","page_number":139,"box":{"x":117,"y":490,"width":749,"height":12}},{"id":"1b0ddec3-0bc4-47eb-b878-501f3753a08b","block_type":"box","text":"investors, brokers and other participants than in the United States. Accordingly, issuers of securities in","page_number":139,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"184e64c4-2563-45f9-8941-7fa633c0588e","block_type":"box","text":"China, including Chinese companies that are listed on U.S. exchanges, are not subject to the same","page_number":139,"box":{"x":117,"y":521,"width":741,"height":12}},{"id":"500b9582-0b77-46ad-91da-171afc42f8cc","block_type":"box","text":"degree of regulation as are U.S. issuers with respect to such matters as insider trading rules, tender","page_number":139,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"3b2095fd-a26d-4e2b-a2df-ba51a009e093","block_type":"box","text":"offer regulation, accounting standards or auditor oversight, stockholder proxy requirements and the","page_number":139,"box":{"x":116,"y":552,"width":740,"height":12}},{"id":"09de9651-1adc-4647-9c1a-edeb722a9bfe","block_type":"box","text":"requirements mandating timely and accurate disclosure of information. Securities markets in China are","page_number":139,"box":{"x":117,"y":568,"width":766,"height":12}},{"id":"75253036-5c1e-47f3-8eeb-f23bc7a399cc","block_type":"box","text":"in the process of change and further development. This may lead to trading volatility, difficulty in the","page_number":139,"box":{"x":117,"y":583,"width":744,"height":12}},{"id":"6f6d6f3d-84b6-4378-b108-0c68492fdb4b","block_type":"box","text":"settlement and recording of transactions and difficulty in interpreting and applying the relevant","page_number":139,"box":{"x":116,"y":599,"width":701,"height":12}},{"id":"e088f0cd-6b4c-4b8c-ae34-bf77ae50393d","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":139,"box":{"x":117,"y":614,"width":755,"height":12}},{"id":"b4ac9edf-a630-4b37-9391-b0ba69b56ac5","block_type":"box","text":"settlement and administration of securities in China that is customary in more developed markets. In","page_number":139,"box":{"x":116,"y":630,"width":748,"height":12}},{"id":"145a4420-7509-4ff0-b4e4-0690e4bbdc3f","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":139,"box":{"x":117,"y":645,"width":764,"height":12}},{"id":"8e02c515-fea5-45b3-8fcc-cf7716ae9702","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":139,"box":{"x":117,"y":661,"width":278,"height":12}},{"id":"ca095694-0d60-4177-a19d-f38f019b5e00","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or","page_number":139,"box":{"x":116,"y":692,"width":702,"height":12}},{"id":"6afc5dce-d740-4aef-b2c8-df5392df328c","block_type":"box","text":"litigation against Chinese companies, and shareholders may have limited legal remedies. The Funds","page_number":139,"box":{"x":117,"y":707,"width":745,"height":12}},{"id":"6a05e684-1be3-45d7-a8cf-088e480b72ae","block_type":"box","text":"do not select investments based on investor protection considerations.","page_number":139,"box":{"x":116,"y":723,"width":522,"height":12}},{"id":"c880eca8-6dc2-4c60-80f4-706924f9fea6","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company","page_number":139,"box":{"x":116,"y":754,"width":684,"height":12}},{"id":"02f0c217-a964-4866-907f-1c215904143e","block_type":"box","text":"Accounting Oversight Board (“PCAOB”) from inspecting the audit work and practices of accounting","page_number":139,"box":{"x":116,"y":769,"width":732,"height":12}},{"id":"4c026b77-fdfc-411b-94d9-8c6910f9d463","block_type":"box","text":"firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. On","page_number":139,"box":{"x":116,"y":785,"width":751,"height":12}},{"id":"e2efe2ce-8efa-416d-9070-805e66f65624","block_type":"box","text":"August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory","page_number":139,"box":{"x":116,"y":800,"width":729,"height":12}},{"id":"f64777ec-99fb-4e6e-a980-c4bcdd43e122","block_type":"box","text":"Commission and the Ministry of Finance of the PRC, which marked the first step toward opening","page_number":139,"box":{"x":117,"y":816,"width":714,"height":12}},{"id":"538f1977-7e5d-472b-8ae6-98e2b4e291f4","block_type":"box","text":"access for the PCAOB to inspect and investigate registered public accounting firms headquartered in","page_number":139,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"d7a11362-f78d-457e-b7c2-f801f8c082ba","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":139,"box":{"x":117,"y":847,"width":672,"height":12}},{"id":"afb28e19-3508-4903-bc55-fcce60a4749a","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested.","page_number":139,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"fdfff175-b2b5-428e-bb8a-ec176fd0144f","block_type":"box","text":"Audits performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be","page_number":139,"box":{"x":116,"y":878,"width":747,"height":12}},{"id":"ab38fb41-f8b9-43d0-adaf-b0654a861be2","block_type":"box","text":"II-53","page_number":139,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bb2ddd68-d10b-4dc7-a2f9-8bd0ab526914","block_type":"box","text":"NM1026U-6042785-139/259","page_number":139,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9ef9f496-54ee-4c25-af3a-c49264152fb5","block_type":"box","text":"less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information","page_number":140,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"7c40ba7c-26b2-4c78-94cb-cbb63cbd3827","block_type":"box","text":"about the Chinese securities in which the Funds invest may be less reliable or complete. Under","page_number":140,"box":{"x":116,"y":102,"width":712,"height":13}},{"id":"bfafa766-2af8-4421-8e2b-5a71a7da8ab8","block_type":"box","text":"amendments to the Sarbanes-Oxley Act enacted in December 2020, which requires that the PCAOB","page_number":140,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"93b2ceb9-9d2f-4867-8210-553f47c481a3","block_type":"box","text":"be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies with","page_number":140,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"4c042d49-22a2-4434-b848-403cff9329c4","block_type":"box","text":"securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":140,"box":{"x":116,"y":149,"width":670,"height":12}},{"id":"dd9439b1-748e-44a1-9a30-10ea1d455bed","block_type":"box","text":"accounting firm.","page_number":140,"box":{"x":116,"y":165,"width":123,"height":12}},{"id":"59760e15-d224-4c77-89a1-baa39eef7ef8","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange","page_number":140,"box":{"x":116,"y":196,"width":763,"height":12}},{"id":"0ebde59a-f464-41a7-afc5-94c4b5e8e94e","block_type":"box","text":"control policies and repatriation restrictions imposed by the Chinese government. The imposition of","page_number":140,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"0e9818ce-2c1e-4c1e-a5be-0a506e6aa523","block_type":"box","text":"currency controls may negatively impact performance and liquidity of the Funds as capital may become","page_number":140,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"ee30b8bb-dc13-4de8-b5e2-286d447b5458","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":140,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"0172e7e7-fa71-4e4d-aafe-89d070d2bfaf","block_type":"box","text":"required governmental approval for repatriation of capital, as well as by the application to the Funds of","page_number":140,"box":{"x":117,"y":258,"width":762,"height":12}},{"id":"1d9a6f06-2dcd-46e2-8089-c65f6a48c47f","block_type":"box","text":"any restrictions on investments. Investing in entities either in, or which have a substantial portion of","page_number":140,"box":{"x":116,"y":273,"width":740,"height":12}},{"id":"0e3b29a8-41fa-4cc2-b7df-66198165a7b8","block_type":"box","text":"their operations in, the PRC may require the Funds to adopt special procedures, seek local","page_number":140,"box":{"x":116,"y":289,"width":680,"height":12}},{"id":"51121bd0-a11f-4058-9dfb-cd01e1806543","block_type":"box","text":"government approvals or take other actions, each of which may involve additional costs and delays to","page_number":140,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"f19528da-e802-4531-8efd-fc6bf79f2ed3","block_type":"box","text":"the Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and","page_number":140,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"2a52c59c-f7c7-4374-b4f1-a1d92b9174af","block_type":"box","text":"RMB, as well as in connection with conversions between the two separate types of RMB, the onshore","page_number":140,"box":{"x":117,"y":335,"width":758,"height":12}},{"id":"2528520b-1b57-4c00-9ef9-ea4fb271f146","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":140,"box":{"x":117,"y":351,"width":340,"height":12}},{"id":"570a6960-d137-4719-8941-db0b35a1f801","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their","page_number":140,"box":{"x":117,"y":382,"width":727,"height":12}},{"id":"b7211844-48bd-4488-a2ec-47468be65653","block_type":"box","text":"structure as a result of foreign ownership restrictions. In a VIE structure, a Chinese operating company","page_number":140,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"5c226109-e11d-4e66-b2a0-2f129ba72828","block_type":"box","text":"establishes a shell company in another jurisdiction to issue stock to public shareholders. When a VIE","page_number":140,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"8e4f2770-9191-44e1-9fef-e6279121b6b9","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":140,"box":{"x":116,"y":428,"width":715,"height":12}},{"id":"8a692d3f-dba1-4327-8b32-bc53eb465d42","block_type":"box","text":"securities of the Chinese company, the U.S.-listed shell company directly or indirectly enters into","page_number":140,"box":{"x":116,"y":444,"width":721,"height":12}},{"id":"9f34ffab-dd8b-46bf-a21a-bf315ca65846","block_type":"box","text":"contracts with the Chinese operating company under Chinese law. These contracts provide the U.S.-","page_number":140,"box":{"x":116,"y":459,"width":749,"height":12}},{"id":"e7d851dd-227f-4ee5-9599-c249706f1c3c","block_type":"box","text":"listed shell company with only economic exposure to the Chinese company and do not represent","page_number":140,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"263d27eb-a906-4c2f-bfb9-2b2d93276346","block_type":"box","text":"equity ownership in the operating company.","page_number":140,"box":{"x":116,"y":490,"width":329,"height":12}},{"id":"d7c8f22c-a30d-464b-8bcc-1c9ec0053855","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have","page_number":140,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"69f0b10c-1a9f-491f-9757-0cabc2fedd27","block_type":"box","text":"not been formally recognized under Chinese law. The Chinese government has provided guidance to","page_number":140,"box":{"x":117,"y":537,"width":754,"height":12}},{"id":"8bb90abe-f3bc-4bc7-8cdf-80d78c21639d","block_type":"box","text":"and placed restrictions on Chinese-based companies raising capital offshore, including through VIEs.","page_number":140,"box":{"x":116,"y":552,"width":755,"height":12}},{"id":"2da4c2d5-8a12-41aa-8c37-16123a438de9","block_type":"box","text":"In 2023, the China Securities Regulatory Commission (“CSRC”) released new rules that permit the use","page_number":140,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"3f28d90e-4b59-4fba-82ca-8e39b8943a5b","block_type":"box","text":"of VIE structures, provided they abide by Chinese laws and register with the CSRC. The rules,","page_number":140,"box":{"x":116,"y":583,"width":705,"height":12}},{"id":"b2ee3d45-eb06-4bf7-9316-4ce26cce5d84","block_type":"box","text":"however, may cause Chinese companies to undergo greater scrutiny and add costs to VIE structures.","page_number":140,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"f4709681-ddd6-420b-8913-8a93bdb0e206","block_type":"box","text":"Intervention, rulemaking or guidance by the Chinese government with respect to VIE structures or the","page_number":140,"box":{"x":117,"y":614,"width":758,"height":12}},{"id":"f6da72e6-6412-4a22-9fb1-a8752254fb82","block_type":"box","text":"non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":140,"box":{"x":117,"y":630,"width":742,"height":12}},{"id":"55e79573-3fb4-4a07-97b8-9c7493a50ad5","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with","page_number":140,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"14b09d9f-dde2-4693-a47b-a401f0b01352","block_type":"box","text":"the Chinese company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement","page_number":140,"box":{"x":116,"y":661,"width":757,"height":12}},{"id":"5e7b214c-be8a-4146-8bd2-7b8d34894331","block_type":"box","text":"would likely be subject to Chinese law and jurisdiction, and remedies available to the U.S.-listed shell","page_number":140,"box":{"x":116,"y":676,"width":748,"height":12}},{"id":"764e4682-da4d-48c1-b5c7-107e3991fddd","block_type":"box","text":"company are uncertain and could be ineffective. In addition to the risk of government intervention,","page_number":140,"box":{"x":116,"y":692,"width":724,"height":12}},{"id":"87f8d8ad-00a9-434f-8e4a-e6835bb872c1","block_type":"box","text":"investments through a VIE structure are subject to the risk that the China-based company (or its","page_number":140,"box":{"x":117,"y":707,"width":711,"height":12}},{"id":"fffacc6c-8ee9-45d2-b2dc-37d58209dabf","block_type":"box","text":"officers, directors, or Chinese equity owners) may breach those contractual arrangements, or Chinese","page_number":140,"box":{"x":116,"y":723,"width":757,"height":12}},{"id":"54fae553-9cec-439d-9d93-67f9bcb67f80","block_type":"box","text":"law changes in a way that adversely affects the enforceability of these arrangements, or those","page_number":140,"box":{"x":117,"y":738,"width":697,"height":12}},{"id":"9c8b567d-d422-4c62-a269-acbaf9741a8a","block_type":"box","text":"contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer","page_number":140,"box":{"x":116,"y":754,"width":703,"height":12}},{"id":"0c6eb0ce-5aa7-4119-b62b-3120cfc4addc","block_type":"box","text":"significant losses on its investments through a VIE structure with little or no recourse available. Any","page_number":140,"box":{"x":116,"y":769,"width":736,"height":12}},{"id":"c943688c-7f3c-417c-ba0f-c142937152e9","block_type":"box","text":"change in the operations of entities in a VIE structure, the status of VIE contractual arrangements or","page_number":140,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"0556b576-30bc-4a77-bfe7-1ca80e495116","block_type":"box","text":"the legal or regulatory environment in China, generally or with respect to specific industries, could","page_number":140,"box":{"x":116,"y":800,"width":723,"height":12}},{"id":"373d4cad-2bfb-42ee-82e6-a932b21cff98","block_type":"box","text":"result in significant, and possibly permanent and/or total, losses to a Fund.","page_number":140,"box":{"x":117,"y":816,"width":550,"height":12}},{"id":"d7691460-0f00-453b-89a8-3bd8e29b470a","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that","page_number":140,"box":{"x":116,"y":847,"width":758,"height":12}},{"id":"b143a9a5-7e27-461d-aaba-55873f071e40","block_type":"box","text":"such growth rates will recur. Other economic challenges for China include indebtedness, weak","page_number":140,"box":{"x":116,"y":862,"width":706,"height":12}},{"id":"75c23739-c19b-49d1-bada-702e49345c68","block_type":"box","text":"consumer demand, trade tensions, and an aging population. China continues to face pressure from its","page_number":140,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"1fb9ce3f-630b-4108-a8be-d93274c154fa","block_type":"box","text":"II-54","page_number":140,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"41ecbfb9-d961-4f82-ba4e-5f2230e70253","block_type":"box","text":"NM1026U-6042785-140/259","page_number":140,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f33e130b-11ff-42e3-93f7-6d583ee9a1cf","block_type":"box","text":"trading partners over its exporting of its excess industrial capacity and overall approach to economic","page_number":141,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"8b19c845-4b44-4dd5-8026-dfe8579264c4","block_type":"box","text":"management. China’s economy is heavily dependent on export growth. Reduction in spending on","page_number":141,"box":{"x":117,"y":102,"width":727,"height":13}},{"id":"09631345-8345-4edc-b598-09a9a5bb0d3d","block_type":"box","text":"Chinese products and services, supply chain diversification, institution of additional tariffs, sanctions or","page_number":141,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"5e017c5e-777b-48dd-9943-b256917e2ba6","block_type":"box","text":"other trade barriers (including as a result of heightened trade tensions between China and the United","page_number":141,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"ecfa2480-f977-4295-a29b-b03799774811","block_type":"box","text":"States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":141,"box":{"x":116,"y":149,"width":688,"height":12}},{"id":"d8473331-ea7c-4ff9-84ea-3f8ae28c84df","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and","page_number":141,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"640e89ff-2b4a-4b4d-bebc-a45bf2c96255","block_type":"box","text":"the companies in which a Fund invests. Certain Chinese companies (which may change from time to","page_number":141,"box":{"x":116,"y":180,"width":753,"height":12}},{"id":"46451197-1e83-4c2b-8886-6a1fdfd60eaf","block_type":"box","text":"time) are directly or indirectly subject to economic or trade restrictions imposed by the U.S. or other","page_number":141,"box":{"x":116,"y":196,"width":741,"height":12}},{"id":"aea008cf-93c3-47e6-825d-9c8238bd5715","block_type":"box","text":"governments due to national security, human rights or other concerns of such government. For","page_number":141,"box":{"x":116,"y":211,"width":709,"height":12}},{"id":"f942f816-d2ae-4221-8007-39d3fdc37aa1","block_type":"box","text":"example, certain foreign technology companies are subject to U.S. export controls as those companies","page_number":141,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"4e659b53-7d76-4228-aadb-6c5821653c30","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":141,"box":{"x":116,"y":242,"width":755,"height":12}},{"id":"e11b6434-f63d-4f0f-be60-b0b59fa074d1","block_type":"box","text":"regions of China or by certain Chinese companies due to concerns about forced labor. Such","page_number":141,"box":{"x":117,"y":258,"width":688,"height":12}},{"id":"f8916293-c197-41e4-9da2-86b595899b5d","block_type":"box","text":"restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any","page_number":141,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"955052e7-668f-4150-8e79-559260f02e9b","block_type":"box","text":"action that targets Chinese financial markets or securities exchanges could interfere with orderly","page_number":141,"box":{"x":116,"y":289,"width":719,"height":12}},{"id":"c3912ef2-5385-43dc-a87d-cd7da73692b5","block_type":"box","text":"trading, delay settlement or cause market disruptions. Certain companies may be subject to economic","page_number":141,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"e7cab22f-2677-48a6-9fe6-d1ed0a2d4297","block_type":"box","text":"or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to","page_number":141,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"418a4019-ae42-4eba-ac55-89f24af5737c","block_type":"box","text":"national security, human rights or other concerns of such government. So long as these restrictions do","page_number":141,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"daeaf0ca-acec-4eb7-8c0e-eb357bba8f18","block_type":"box","text":"not include restrictions on investments, the Fund may invest in such companies.","page_number":141,"box":{"x":117,"y":351,"width":599,"height":12}},{"id":"71306225-efc3-4aa9-9eb0-38a8b54fb355","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative","page_number":141,"box":{"x":116,"y":383,"width":760,"height":12}},{"id":"fa94a854-3c07-47a9-9032-875695aa2bda","block_type":"box","text":"guidance or enforcement, possibly with retroactive effect. The interpretation, applicability and","page_number":141,"box":{"x":116,"y":399,"width":695,"height":12}},{"id":"b0f9cdde-9095-4d49-ae0a-52c60fcec8fb","block_type":"box","text":"enforcement of such laws by PRC tax authorities are not as consistent and transparent as those of","page_number":141,"box":{"x":116,"y":414,"width":737,"height":12}},{"id":"50a3a9c0-7e8e-4dc9-8ed6-21f089220b2b","block_type":"box","text":"more developed nations, and may vary over time and from region to region. The application and","page_number":141,"box":{"x":117,"y":430,"width":716,"height":12}},{"id":"a35971c3-5127-49c6-85c3-77143f299fb5","block_type":"box","text":"enforcement of PRC tax rules could have a significant adverse effect on a Fund and its investors,","page_number":141,"box":{"x":116,"y":445,"width":727,"height":12}},{"id":"cc225f84-afc6-4ae5-80a4-d9bd58d0a42c","block_type":"box","text":"particularly in relation to capital gains withholding tax imposed upon non-residents. In addition, the","page_number":141,"box":{"x":117,"y":461,"width":732,"height":12}},{"id":"22705d1f-a40c-4fee-8a77-8ccff0abc8d9","block_type":"box","text":"accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":141,"box":{"x":116,"y":476,"width":759,"height":12}},{"id":"232b1bd1-a0c3-4f97-829b-44506557c460","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared","page_number":141,"box":{"x":117,"y":492,"width":757,"height":12}},{"id":"e54c9dd6-503c-46a8-9f5d-e4ab96de0ec6","block_type":"box","text":"in accordance with PRC accounting standards and practice and those prepared in accordance with","page_number":141,"box":{"x":117,"y":507,"width":739,"height":12}},{"id":"72a25651-873f-40b4-bba0-dd6ab7bf2bb8","block_type":"box","text":"international accounting standards.","page_number":141,"box":{"x":117,"y":523,"width":264,"height":12}},{"id":"0aa1aac1-68b2-4392-a95d-a9bb3cfd795e","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the","page_number":141,"box":{"x":117,"y":555,"width":767,"height":13}},{"id":"8cb9dad7-e787-45b7-8cc8-6f90c68339dd","block_type":"box","text":"country may be subject to other public health threats, infectious illnesses, diseases or similar issues in","page_number":141,"box":{"x":116,"y":571,"width":763,"height":12}},{"id":"dbec8e99-c8e3-4043-aca1-1ca62aa123dc","block_type":"box","text":"the future. Any spread of an infectious illness, public health threat or similar issue could reduce","page_number":141,"box":{"x":116,"y":586,"width":709,"height":13}},{"id":"5eb5d298-4d24-4593-ba77-15db901d4d10","block_type":"box","text":"consumer demand or economic output, result in market closures, travel restrictions or quarantines, and","page_number":141,"box":{"x":116,"y":602,"width":770,"height":12}},{"id":"94915849-ed80-4dc6-b28d-697e0089b579","block_type":"box","text":"generally have a significant impact on the Chinese economy, which in turn could adversely affect a","page_number":141,"box":{"x":116,"y":617,"width":738,"height":13}},{"id":"89430e74-9bbf-45dc-94f1-fc9855e25bf2","block_type":"box","text":"Fund’s investments.","page_number":141,"box":{"x":117,"y":633,"width":153,"height":10}},{"id":"a1dff333-1ac2-404c-a313-4b83930818b9","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":141,"box":{"x":116,"y":666,"width":302,"height":12}},{"id":"8dddb299-7cb9-4c36-8281-b1ca7339f565","block_type":"box","text":"General.","page_number":141,"box":{"x":117,"y":690,"width":62,"height":9}},{"id":"36266d74-d6f8-4be0-9046-57952209bf87","block_type":"box","text":"China A-shares are equity securities of companies domiciled in China that trade on Chinese","page_number":141,"box":{"x":186,"y":690,"width":681,"height":12}},{"id":"4b997bf1-10e4-4a55-88fa-163097f89834","block_type":"box","text":"stock exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange","page_number":141,"box":{"x":116,"y":705,"width":718,"height":12}},{"id":"4a2629d3-7267-4f6f-9438-3849b364b666","block_type":"box","text":"(“SZSE”) and the Beijing Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the","page_number":141,"box":{"x":117,"y":721,"width":756,"height":12}},{"id":"d7fd31bb-0955-4859-ae7d-618bcd74edb3","block_type":"box","text":"SSE and SZSE is not permitted, other than pursuant to available exceptions, such as through a","page_number":141,"box":{"x":116,"y":736,"width":707,"height":12}},{"id":"c3cab2c7-258c-4147-893c-d736ac258457","block_type":"box","text":"qualified foreign investor approved pursuant to the relevant mainland China laws and regulations as","page_number":141,"box":{"x":116,"y":752,"width":740,"height":12}},{"id":"8299dfae-6721-4b1a-ab26-d09dbf71b2bb","block_type":"box","text":"may be promulgated and/or amended from time to time (“QFI”).","page_number":141,"box":{"x":117,"y":767,"width":468,"height":12}},{"id":"a7031655-66de-4590-967e-1f39c6e90e29","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE","page_number":141,"box":{"x":117,"y":800,"width":723,"height":12}},{"id":"cee95f81-3845-4277-9b53-922bbe5d0143","block_type":"box","text":"(“Stock Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect","page_number":141,"box":{"x":117,"y":815,"width":706,"height":13}},{"id":"7e1de1fc-668e-4f01-bfc5-ab5e4c027b15","block_type":"box","text":"program or the Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock Connect”","page_number":141,"box":{"x":117,"y":831,"width":764,"height":12}},{"id":"0ac8c5f6-ae3a-4de2-85a6-ff5f39b6fca3","block_type":"box","text":"and collectively, “Stock Connects”). Each Stock Connect is a securities trading and clearing links","page_number":141,"box":{"x":116,"y":846,"width":722,"height":13}},{"id":"0241df1a-67a1-4f83-87b4-1069908653ba","block_type":"box","text":"program established by The Stock Exchange of Hong Kong Limited (“SEHK”), the Hong Kong","page_number":141,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"b2aa1240-13b7-4882-9c30-ac7f11195d53","block_type":"box","text":"Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China","page_number":141,"box":{"x":116,"y":877,"width":700,"height":13}},{"id":"089078b4-9adb-4ca0-a8b2-38452e55fe6b","block_type":"box","text":"II-55","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"941cf6b7-e9c8-4b20-ab47-193971d526d1","block_type":"box","text":"NM1026U-6042785-141/259","page_number":141,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"109df2ac-d0f6-47c7-87a0-e66e378e91ce","block_type":"box","text":"Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":142,"box":{"x":116,"y":87,"width":753,"height":12}},{"id":"ddc43f9b-1000-46a5-b5cc-82f1fb772a5c","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on","page_number":142,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"8cab4726-b69b-422b-ac5b-b9e792886493","block_type":"box","text":"each market through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock","page_number":142,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"0f4d5a15-ad5f-4139-b627-3be3c2dc464e","block_type":"box","text":"Connect Securities listed on the SSE or SZSE, as applicable, would be effectuated through its Hong","page_number":142,"box":{"x":117,"y":134,"width":747,"height":12}},{"id":"3f4d46fa-0aaf-4ee3-a5a6-8312b99a1b93","block_type":"box","text":"Kong broker and a securities trading service company established by SEHK.","page_number":142,"box":{"x":117,"y":149,"width":572,"height":12}},{"id":"f7f9fb2c-0f85-4053-8303-eb3fde9cf435","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock","page_number":142,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"4cac6d9d-d3f3-4f40-843d-0d3004533f9c","block_type":"box","text":"Connect, trading through a Stock Connect’s Northbound Trading Link is subject to daily investment","page_number":142,"box":{"x":117,"y":196,"width":738,"height":12}},{"id":"e9061d45-a207-4dd5-a6fe-685aa3603218","block_type":"box","text":"quota limitations which require that buy orders for Stock Connect Securities be rejected once the daily","page_number":142,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"ac2adc62-ab80-46e9-9459-cfa93ad3eca6","block_type":"box","text":"quota is exceeded (although a Fund will be permitted to sell their Stock Connect Securities regardless","page_number":142,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"092ecdb4-7f39-48c5-aec8-f684e9b3aad9","block_type":"box","text":"of the quota). These limitations may restrict a Fund from investing in Stock Connect Securities on a","page_number":142,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"c5d5a510-6c31-463c-8ae7-430dbc502d4b","block_type":"box","text":"timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.","page_number":142,"box":{"x":116,"y":258,"width":698,"height":12}},{"id":"08995017-ead4-4950-bfef-dc0a5498d442","block_type":"box","text":"Investment quotas are also subject to change. Investment in Stock Connect Securities through a Stock","page_number":142,"box":{"x":117,"y":273,"width":767,"height":12}},{"id":"30ace0b6-37f4-4e41-a0cb-f27657bd49f7","block_type":"box","text":"Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund.","page_number":142,"box":{"x":117,"y":289,"width":741,"height":12}},{"id":"3691eb3c-2db8-45b7-b4b1-193786692935","block_type":"box","text":"Stock Connect Securities purchased through Stock Connects generally may not be sold or otherwise","page_number":142,"box":{"x":116,"y":304,"width":753,"height":12}},{"id":"5776a6ac-23f7-40c5-85c1-e8df0589ecb5","block_type":"box","text":"transferred other than through Stock Connects in accordance with applicable rules. For example, the","page_number":142,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"7ad6cd0d-a082-474a-8add-500199475476","block_type":"box","text":"PRC regulations require that in order for an investor to sell any Stock Connect Securities on a certain","page_number":142,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"ca8f5eca-9006-4195-936f-85c99d19ea18","block_type":"box","text":"trading day, there must be sufficient Stock Connect Securities in the investor’s account before the","page_number":142,"box":{"x":116,"y":351,"width":730,"height":12}},{"id":"f93dec72-b9d5-436e-9cf6-b6ce82fc67c8","block_type":"box","text":"market opens on that day. If there are insufficient Stock Connect Securities in the investor’s account,","page_number":142,"box":{"x":117,"y":366,"width":751,"height":12}},{"id":"08f8e599-2d6f-4b92-807d-b2d8d33a41b5","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":142,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"04de4298-0168-473a-ac04-212044b4deff","block_type":"box","text":"on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE","page_number":142,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"61b30660-9aab-4f69-9ddf-f0ac3d5bb691","block_type":"box","text":"Securities”) of its participants (","page_number":142,"box":{"x":116,"y":413,"width":226,"height":12}},{"id":"c460a6eb-740f-4d2b-8946-2fbe2c5466b1","block_type":"box","text":"i.e.","page_number":142,"box":{"x":343,"y":413,"width":20,"height":9}},{"id":"9cebaa3a-49a3-4155-afb1-1bfc95e22200","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While","page_number":142,"box":{"x":366,"y":413,"width":486,"height":12}},{"id":"96a0d4b8-edb6-4c87-8978-69376cf59bc6","block_type":"box","text":"shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose","page_number":142,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"c04edd85-957b-492f-84f0-34df4fee2d9e","block_type":"box","text":"such designation, and if this occurs, such shares may be sold but cannot be purchased through a","page_number":142,"box":{"x":116,"y":444,"width":728,"height":12}},{"id":"4ce2ef16-f728-420c-9ca5-40511769ee05","block_type":"box","text":"Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong","page_number":142,"box":{"x":116,"y":459,"width":771,"height":12}},{"id":"4a099880-572c-4621-844b-2e24b4ebb0aa","block_type":"box","text":"Kong markets are open for trading, and banking services are available in both markets on the","page_number":142,"box":{"x":117,"y":475,"width":698,"height":12}},{"id":"9e8df71c-0086-40ae-92e4-d915fdb9ab09","block_type":"box","text":"corresponding settlement days. Therefore, an investment in Stock Connect Securities through a Stock","page_number":142,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"a074784f-ac97-4065-9d51-cc528b62a433","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":142,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"9f3879a5-1b9e-412f-b505-63d4c6dc02e9","block_type":"box","text":"but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the Stock","page_number":142,"box":{"x":117,"y":521,"width":745,"height":12}},{"id":"5291acf5-1d9a-40d2-b541-c94742f3bc45","block_type":"box","text":"Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will","page_number":142,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"4c69ce6e-0dc7-4772-b7bf-53d362043932","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":142,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"9d8af9df-f77b-4ab3-b3c6-ac189c88d93d","block_type":"box","text":"Connect Securities must be settled in RMB, investors must have timely access to a reliable supply of","page_number":142,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"0e6a4af2-36cf-4920-b86c-779c9854b9a2","block_type":"box","text":"offshore RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to","page_number":142,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"87519922-aed2-4bc5-8d87-ec3a512c7129","block_type":"box","text":"devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If a Fund holds a","page_number":142,"box":{"x":116,"y":599,"width":746,"height":12}},{"id":"968d81c9-09cb-4852-a7a5-1beee1a2a0f9","block_type":"box","text":"class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency","page_number":142,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"f753323b-78a3-4a6d-9509-f5026413bba7","block_type":"box","text":"exchange risk if the Fund converts the local currency into RMB for investments in Stock Connect","page_number":142,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"2ae341b6-00c9-428e-8b31-38a1a818c56b","block_type":"box","text":"Securities. A Fund may also incur conversion costs.","page_number":142,"box":{"x":116,"y":645,"width":390,"height":12}},{"id":"58925ed4-cc0f-4a53-b725-ef9b4ad95edc","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held","page_number":142,"box":{"x":116,"y":676,"width":716,"height":12}},{"id":"d30e2665-edeb-4908-bb03-78898ed2174f","block_type":"box","text":"through HKSCC as nominee on behalf of investors. The precise nature and rights of a Fund as the","page_number":142,"box":{"x":116,"y":692,"width":731,"height":12}},{"id":"d85bf60d-a608-4690-b32a-34d8046d4229","block_type":"box","text":"beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well","page_number":142,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"ebd485ef-06d7-4242-ab38-af92945a1215","block_type":"box","text":"defined under the PRC laws. There is a lack of a clear definition of, and distinction between, legal","page_number":142,"box":{"x":116,"y":723,"width":722,"height":12}},{"id":"42bbd8e4-f0ca-4f3c-a1a0-08fb69ea9c89","block_type":"box","text":"ownership and beneficial ownership under the PRC laws and there have been few cases involving a","page_number":142,"box":{"x":116,"y":738,"width":742,"height":12}},{"id":"d57ef5ab-8d1f-4f2e-a719-4a9854feb4a3","block_type":"box","text":"nominee account structure in the PRC courts. The exact nature and methods of enforcement of the","page_number":142,"box":{"x":117,"y":754,"width":735,"height":9}},{"id":"876b510e-d386-40cb-8a73-e86981624266","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":142,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"2e8c4f34-cb0b-4049-98b5-b11bde0af1f2","block_type":"box","text":"becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or","page_number":142,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"7c833928-59cd-4d5e-b0bf-c60a7a8baeb8","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":142,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"3883094b-7000-4590-9040-2cbd56c64050","block_type":"box","text":"general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that","page_number":142,"box":{"x":116,"y":816,"width":765,"height":12}},{"id":"a76bee4c-ee67-45b5-9498-6905cccc2afe","block_type":"box","text":"HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its","page_number":142,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"f97d45c3-1ad7-4fdc-bc2d-24174d991973","block_type":"box","text":"omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed","page_number":142,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"d5d8c7a7-9281-4e20-9962-c95147ef450f","block_type":"box","text":"companies will still treat HKSCC as one of the shareholders when it handles corporate actions in","page_number":142,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"bdb4667e-b104-48fc-b1be-08088f6a367d","block_type":"box","text":"respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting","page_number":142,"box":{"x":117,"y":878,"width":749,"height":12}},{"id":"64a92bb3-6673-4a13-94c2-ef7a2bdd15d8","block_type":"box","text":"II-56","page_number":142,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8ccb7b0d-9601-4b1d-9e89-03cd22537088","block_type":"box","text":"NM1026U-6042785-142/259","page_number":142,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7d1d4b41-e87b-43d8-ae34-b15fa851cdac","block_type":"box","text":"SSE Securities and SZSE Securities and keeps participants of Central Clearing and Settlement","page_number":143,"box":{"x":116,"y":87,"width":712,"height":12}},{"id":"b4b8ca41-6d33-4a8f-93d4-1d2e4b15265e","block_type":"box","text":"System (“CCASS”) informed of all such corporate actions that require CCASS participants to take","page_number":143,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"0d00b0c7-ef49-47f3-9c8c-e1fa7b607663","block_type":"box","text":"steps in order to participate in them. Investors may only exercise their voting rights by providing their","page_number":143,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"30cb27ae-b3c7-462e-905e-c93100435bb0","block_type":"box","text":"voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS","page_number":143,"box":{"x":116,"y":134,"width":724,"height":12}},{"id":"aa633816-8c82-4034-92bc-9c048c55be30","block_type":"box","text":"participants will be consolidated by HKSCC, who will then submit a combined single voting instruction","page_number":143,"box":{"x":117,"y":149,"width":757,"height":12}},{"id":"80875042-f5d1-40f6-bde7-a13c23472f29","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":143,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"ae983785-d431-4162-98a0-51b41853ee0f","block_type":"box","text":"enforcing its rights in SSE Securities or SZSE Securities.","page_number":143,"box":{"x":116,"y":180,"width":427,"height":12}},{"id":"0cb65ed0-19d5-4cc0-9883-bcdfc6d22b45","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any","page_number":143,"box":{"x":117,"y":211,"width":728,"height":12}},{"id":"a277e8fe-7b01-43e5-b41d-4c4f836d4438","block_type":"box","text":"nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized","page_number":143,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"614db38f-b16a-431e-b461-847a2c78e05a","block_type":"box","text":"financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or","page_number":143,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"29e82887-a283-46ba-b48c-a9b834cc1279","block_type":"box","text":"after January 1, 2020, Hong Kong’s Investor Compensation Fund covers investors’ losses in relation to","page_number":143,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"0d7aa602-596c-4b53-a6da-220127a5e07f","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":143,"box":{"x":116,"y":273,"width":743,"height":12}},{"id":"571e1538-3283-48b6-b089-787b3c72006a","block_type":"box","text":"purchase is permitted to be routed through the Northbound Trading Link of a Stock Connect. On the","page_number":143,"box":{"x":117,"y":289,"width":746,"height":12}},{"id":"4e476212-4d86-432c-b56a-3eb66c220aa5","block_type":"box","text":"other hand, since a Fund carries out Northbound trading through securities brokers in Hong Kong but","page_number":143,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"0cf5a537-4c0c-4777-9ae6-e38e95232329","block_type":"box","text":"not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the PRC.","page_number":143,"box":{"x":117,"y":320,"width":722,"height":12}},{"id":"761f40e4-6998-478a-b104-e842634d7378","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information","page_number":143,"box":{"x":117,"y":351,"width":737,"height":12}},{"id":"3bc0280e-e65b-4f1b-8c68-39616fda8f66","block_type":"box","text":"technology capability, risk management and other requirements as may be specified by the relevant","page_number":143,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"43b30f9f-b9f3-4590-b79e-5b174538ca49","block_type":"box","text":"exchange and/or clearing house. Further, the “connectivity” in Stock Connects requires routing of","page_number":143,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"744f81ed-4bb8-4565-b1e2-8dd192dbcc26","block_type":"box","text":"orders across the border of Hong Kong and the PRC. This requires the development of new","page_number":143,"box":{"x":116,"y":397,"width":687,"height":12}},{"id":"361de53b-ee32-49b1-8702-f542bac1f86f","block_type":"box","text":"information technology systems on the part of SEHK and exchange participants. There is no assurance","page_number":143,"box":{"x":117,"y":413,"width":771,"height":12}},{"id":"dccc9038-8ff0-418c-95bb-4f61338d3beb","block_type":"box","text":"that the systems of SEHK and market participants will function properly or will continue to be adapted","page_number":143,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"d18533a2-0c1f-40a4-8e86-a842234e2688","block_type":"box","text":"to changes and developments in both markets. In the event that the relevant systems fail to function","page_number":143,"box":{"x":116,"y":444,"width":747,"height":12}},{"id":"1b58481f-8a0f-4464-82c0-c8c38106f2c1","block_type":"box","text":"properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":143,"box":{"x":117,"y":459,"width":667,"height":12}},{"id":"8d44216f-bb8b-4e32-8105-2d1c16676b94","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen","page_number":143,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"b4912628-1ce8-4527-9738-ad483079e65f","block_type":"box","text":"Hong Kong Stock Connect program launched in December 2016. Each program does not have an","page_number":143,"box":{"x":117,"y":506,"width":733,"height":12}},{"id":"1553256f-81e5-442b-9d3d-4481fb881b18","block_type":"box","text":"extensive operating history. New or revised regulations may be issued from time to time by the","page_number":143,"box":{"x":116,"y":521,"width":707,"height":12}},{"id":"6126bd04-5ed7-4e00-8f03-69b04ef6d078","block_type":"box","text":"regulators and stock exchanges in China and Hong Kong in connection with operations, legal","page_number":143,"box":{"x":117,"y":537,"width":695,"height":12}},{"id":"c089afb2-85ad-40fc-b273-25ab28cc6c04","block_type":"box","text":"enforcement and cross-border trades under Stock Connects. In addition, there can be no assurance","page_number":143,"box":{"x":116,"y":552,"width":748,"height":11}},{"id":"42a3209f-8ec0-45c6-a667-1ec8e151c10f","block_type":"box","text":"that Stock Connect will not be discontinued. A Fund may be adversely affected as a result of such","page_number":143,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"34a541b6-f17a-4973-a3f1-a65ab7fa71da","block_type":"box","text":"changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":143,"box":{"x":116,"y":583,"width":714,"height":12}},{"id":"7699e224-4f39-4b45-99b2-17b86689e674","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the","page_number":143,"box":{"x":116,"y":599,"width":727,"height":12}},{"id":"d5800ef9-d087-43ee-b4e2-3dd0a6bb0512","block_type":"box","text":"relevant systems fail to function properly, trading in both markets through Stock Connects could be","page_number":143,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"e0926a06-4629-485f-96de-03b202044505","block_type":"box","text":"disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In","page_number":143,"box":{"x":116,"y":630,"width":708,"height":12}},{"id":"8964f033-1b68-4d79-aa5c-494c7cf78cd2","block_type":"box","text":"addition, a Fund’s investments in Stock Connect Securities through Stock Connects are generally","page_number":143,"box":{"x":116,"y":645,"width":728,"height":12}},{"id":"964420d1-464e-4018-93d9-18f1c4ff4919","block_type":"box","text":"subject to Chinese securities regulations and listing rules, among other restrictions. Further, different","page_number":143,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"f7d261a6-6e79-4a24-ae47-1878afe90f92","block_type":"box","text":"fees, costs and taxes are imposed on foreign investors acquiring Stock Connect Securities through","page_number":143,"box":{"x":116,"y":676,"width":733,"height":12}},{"id":"9d9ba40a-9188-41c6-b865-d0bda43d46da","block_type":"box","text":"Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":143,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"9053a274-1349-47ce-897e-5a75d8d7811d","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":143,"box":{"x":116,"y":707,"width":618,"height":12}},{"id":"5e4a225e-85cb-4b00-a9f5-80cad1532a47","block_type":"box","text":"Suspension Risk.","page_number":143,"box":{"x":117,"y":738,"width":127,"height":12}},{"id":"1df528d5-46f4-48cd-98d8-8d282388f9bc","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at","page_number":143,"box":{"x":251,"y":738,"width":620,"height":12}},{"id":"b1bba245-6029-4a4e-be0b-6f2cfeb2cb08","block_type":"box","text":"times when the relevant SSE Securities and SZSE Securities may be sold or purchased on the","page_number":143,"box":{"x":116,"y":754,"width":704,"height":12}},{"id":"087d8f45-bd50-4565-925c-6bbcf1da50c6","block_type":"box","text":"relevant Chinese stock exchange. The SSE Securities and SZSE Securities markets have a higher","page_number":143,"box":{"x":117,"y":769,"width":733,"height":12}},{"id":"2c5ddd8d-8999-453b-85b3-fcb57904cd9e","block_type":"box","text":"propensity for trading suspensions than many other global equity markets. Each of the SEHK, SSE and","page_number":143,"box":{"x":117,"y":785,"width":765,"height":12}},{"id":"a3a6b6bd-a71f-4b33-9744-b2ec1e6acb6d","block_type":"box","text":"SZSE reserves the right to suspend trading of SSE Securities and SZSE Securities purchased on the","page_number":143,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"3399c12b-db56-46bb-9b3a-64a72c1dffd7","block_type":"box","text":"Stock Connects if necessary for ensuring an orderly and fair market and ensuring that risks are","page_number":143,"box":{"x":116,"y":816,"width":705,"height":12}},{"id":"fe9effa1-46b1-445c-88c8-6e02399cf392","block_type":"box","text":"managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":143,"box":{"x":117,"y":831,"width":724,"height":12}},{"id":"8cb3e32b-6f0e-4155-979b-af87d7ee6b7c","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit","page_number":143,"box":{"x":117,"y":847,"width":727,"height":12}},{"id":"57a64431-001c-4b95-8052-d4b9393db27f","block_type":"box","text":"breakers” and other measures to halt or suspend Northbound trading. Where a suspension in the","page_number":143,"box":{"x":117,"y":862,"width":725,"height":12}},{"id":"14542fd0-6771-4515-9a5a-553403f75046","block_type":"box","text":"Northbound trading through Stock Connect is effected, the Fund’s ability to access the PRC market will","page_number":143,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"be092af8-7b68-427b-82e4-cf21071ca140","block_type":"box","text":"II-57","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"098410e7-5f1b-4abc-91db-ba8c653d732f","block_type":"box","text":"NM1026U-6042785-143/259","page_number":143,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1c3712ad-ea93-4452-8547-7ada351431e7","block_type":"box","text":"be adversely affected. Trading suspensions in certain stocks could lead to greater market execution","page_number":144,"box":{"x":117,"y":87,"width":745,"height":12}},{"id":"cf27b709-fb20-4380-bee9-9f7eeee09adf","block_type":"box","text":"risk and costs for a Fund. The SSE and SZSE currently","page_number":144,"box":{"x":117,"y":102,"width":415,"height":13}},{"id":"9d659e90-e1ac-4a3a-805b-74e3f6d037ea","block_type":"box","text":"apply a daily price limit, generally set at 10%,","page_number":144,"box":{"x":533,"y":102,"width":340,"height":13}},{"id":"0e6d3ab3-006d-4082-9da4-0ff0f9efc355","block_type":"box","text":"of the amount of fluctuation permitted in the prices of the relevant SSE Securities and SZSE Securities","page_number":144,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"1132d0c8-4c34-47fd-af91-ea80dc5235c4","block_type":"box","text":"during a single trading day. The daily price limit refers to price movements only and does not restrict","page_number":144,"box":{"x":116,"y":134,"width":747,"height":12}},{"id":"01c4c967-e0a2-4a6f-a47c-ef7b8c691ed0","block_type":"box","text":"trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":144,"box":{"x":116,"y":149,"width":744,"height":12}},{"id":"babc0909-1ee3-49e3-9e53-d32507495ed8","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":144,"box":{"x":116,"y":165,"width":598,"height":12}},{"id":"4a049f73-a064-418c-8186-f3685443b01f","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":144,"box":{"x":116,"y":192,"width":575,"height":12}},{"id":"18c79243-b802-4982-a238-5bc709a98a66","block_type":"box","text":"A Fund may invest","page_number":144,"box":{"x":691,"y":192,"width":144,"height":12}},{"id":"3e017605-8de2-41a4-a24a-bda53ba88ded","block_type":"box","text":"directly in the domestic bond market in the PRC (the “China Interbank Bond Market”) through the","page_number":144,"box":{"x":116,"y":207,"width":724,"height":12}},{"id":"6fd465c8-d130-4edf-b887-3234f711c695","block_type":"box","text":"northbound trading of Bond Connect (“Bond Connect”). Bond Connect is an initiative launched in July","page_number":144,"box":{"x":117,"y":223,"width":755,"height":12}},{"id":"4ac72502-5987-4119-af24-ea2b48c7ee6b","block_type":"box","text":"2017 for mutual bond market access between the PRC and Hong Kong, established by the China","page_number":144,"box":{"x":116,"y":238,"width":729,"height":12}},{"id":"d1de51d9-e8f3-4bcf-890f-23cf601e6da6","block_type":"box","text":"Foreign Exchange Trade System & National Interbank Funding Centre (“CFETS”), China Central","page_number":144,"box":{"x":117,"y":254,"width":722,"height":12}},{"id":"4c70b19e-b9c9-4ce5-8163-cea609838580","block_type":"box","text":"Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”), Hong Kong Exchanges","page_number":144,"box":{"x":117,"y":269,"width":752,"height":12}},{"id":"eb910913-0a17-4238-badf-c5982b0704c2","block_type":"box","text":"and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":144,"box":{"x":116,"y":285,"width":699,"height":12}},{"id":"fb03aa92-8cab-4ff4-b380-fba3b86271d5","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the","page_number":144,"box":{"x":117,"y":300,"width":738,"height":12}},{"id":"3d67d0ae-9f1b-4011-a8ec-adcd531be396","block_type":"box","text":"China Interbank Bond Market through Bond Connect. Eligible foreign investors may submit trade","page_number":144,"box":{"x":117,"y":316,"width":721,"height":12}},{"id":"c8b0f283-2e2b-409a-84e0-f683a6ecbfa5","block_type":"box","text":"requests for bonds circulated in the China Interbank Bond Market through offshore electronic bond","page_number":144,"box":{"x":117,"y":331,"width":735,"height":12}},{"id":"fe122689-8760-4169-bc7d-875eaf590ee9","block_type":"box","text":"trading platforms (such as Tradeweb), which will in turn transmit their requests for quotation to CFETS.","page_number":144,"box":{"x":116,"y":347,"width":768,"height":12}},{"id":"8d93365c-7a67-456e-b53f-ff3fe3cd8eff","block_type":"box","text":"CFETS will send the requests for quotation to a number of approved onshore dealers (including market","page_number":144,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"8c639375-2866-4b1a-a986-71656bb0da24","block_type":"box","text":"makers and others engaged in the market making business) in the PRC. The approved onshore","page_number":144,"box":{"x":117,"y":378,"width":715,"height":12}},{"id":"017041d9-1afb-41e3-a587-30a479a40ee6","block_type":"box","text":"dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their responses to","page_number":144,"box":{"x":116,"y":393,"width":765,"height":12}},{"id":"b7c03f95-245b-4dc8-abbe-d066e30f8e6e","block_type":"box","text":"those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":144,"box":{"x":116,"y":409,"width":759,"height":12}},{"id":"7ffbba5f-144f-42b6-a1b5-56b97b957b8d","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":144,"box":{"x":116,"y":424,"width":603,"height":12}},{"id":"56f34ae2-2c98-4291-8da6-eb1d56157a8e","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect","page_number":144,"box":{"x":116,"y":451,"width":761,"height":12}},{"id":"7d0d64ae-2247-427b-8e74-6b82b00bea63","block_type":"box","text":"will be effected through the settlement and custody link between CMU, as an offshore custody agent,","page_number":144,"box":{"x":116,"y":467,"width":755,"height":12}},{"id":"6c51b35b-e043-4eb1-a60a-703b25203cdb","block_type":"box","text":"and CDCC and SCH, as onshore custodians and clearing institutions in the PRC. Under the settlement","page_number":144,"box":{"x":116,"y":482,"width":768,"height":12}},{"id":"52ef8d97-9479-4fb7-8e84-d950b935a64f","block_type":"box","text":"link, CDCC or SCH will effect gross settlement of confirmed trades onshore and CMU will process","page_number":144,"box":{"x":117,"y":498,"width":730,"height":12}},{"id":"a4b533c3-859a-478c-b2ba-f1185f97efd2","block_type":"box","text":"bond settlement instructions from CMU members on behalf of eligible foreign investors in accordance","page_number":144,"box":{"x":117,"y":513,"width":757,"height":12}},{"id":"6003ea78-7a1c-4f8c-a2e1-d95390ed6b14","block_type":"box","text":"with its relevant rules. Since the introduction in August 2018 of delivery versus payment (DVP)","page_number":144,"box":{"x":116,"y":529,"width":705,"height":12}},{"id":"e21bad21-a527-4709-8897-5787c5a16f2b","block_type":"box","text":"settlement in respect of Bond Connect, the movement of cash and securities is carried out","page_number":144,"box":{"x":116,"y":544,"width":675,"height":12}},{"id":"4b53566a-3ed5-4d2e-bae6-007eac02d354","block_type":"box","text":"simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":144,"box":{"x":116,"y":560,"width":743,"height":12}},{"id":"d3813831-7a3c-4ae8-b836-20b2c46c79a9","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee","page_number":144,"box":{"x":116,"y":575,"width":759,"height":12}},{"id":"ee74b39e-08be-47b2-aefc-ccd851903f26","block_type":"box","text":"accounts with the onshore custody agent recognized by the People’s Bank of China (","page_number":144,"box":{"x":116,"y":591,"width":631,"height":12}},{"id":"3a046054-f5e2-40f0-9085-687a998d64e2","block_type":"box","text":"i.e.","page_number":144,"box":{"x":749,"y":591,"width":20,"height":9}},{"id":"78349e20-fe2b-4ad4-9653-a185287713bc","block_type":"box","text":", CDCC and","page_number":144,"box":{"x":772,"y":591,"width":94,"height":11}},{"id":"c503074d-7a15-4289-9063-50165262879c","block_type":"box","text":"SCH). All bonds traded by eligible foreign investors through Bond Connect will be registered in the","page_number":144,"box":{"x":116,"y":606,"width":734,"height":12}},{"id":"3940ea23-886a-4bde-a84e-ed5b49222f13","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":144,"box":{"x":117,"y":622,"width":754,"height":12}},{"id":"95e71bf0-4394-425d-a5e8-dcc0bc42e1cb","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":144,"box":{"x":116,"y":637,"width":759,"height":12}},{"id":"84fbeadc-c1a0-4e81-9fbd-4bd8ac031d49","block_type":"box","text":"Bond Connect bonds under its market contracts with clearing participants will be limited to assisting","page_number":144,"box":{"x":117,"y":653,"width":741,"height":12}},{"id":"b853a2dd-3880-46d0-926c-749f675d6152","block_type":"box","text":"clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer delay in the","page_number":144,"box":{"x":116,"y":668,"width":753,"height":12}},{"id":"cbfd0b47-c6ad-4b6e-8a94-469e094fcce0","block_type":"box","text":"recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":144,"box":{"x":117,"y":684,"width":739,"height":12}},{"id":"9cec208d-ecde-419d-b7f9-5faf9795c0dd","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by","page_number":144,"box":{"x":116,"y":699,"width":733,"height":13}},{"id":"cacc7e93-4c50-41ad-85e5-bc254b593eda","block_type":"box","text":"third parties, including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or","page_number":144,"box":{"x":116,"y":715,"width":723,"height":12}},{"id":"3e153d79-81b3-46f5-bef3-a29a574f182f","block_type":"box","text":"errors on the part of such third parties.","page_number":144,"box":{"x":116,"y":730,"width":284,"height":12}},{"id":"83c9e2f3-3a01-4420-8904-c89a0ae5c5bd","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":144,"box":{"x":116,"y":758,"width":715,"height":12}},{"id":"77bc1ee2-8ac7-4119-924f-36dffc58d164","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":144,"box":{"x":117,"y":773,"width":761,"height":12}},{"id":"c890b882-42cf-4930-8fba-b72191b9e983","block_type":"box","text":"a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law","page_number":144,"box":{"x":116,"y":789,"width":760,"height":12}},{"id":"3db7c92f-82c1-4a38-aef7-887d72855e40","block_type":"box","text":"and there have been few cases involving a nominee account structure in the PRC courts. The exact","page_number":144,"box":{"x":116,"y":804,"width":741,"height":12}},{"id":"46019a9d-265c-459d-b515-75f8e82f93e3","block_type":"box","text":"nature and methods of enforcement of the rights and interests of a Fund under PRC law are also","page_number":144,"box":{"x":117,"y":820,"width":717,"height":12}},{"id":"14fcc2d0-d3e2-4c03-8ea2-1ca414302030","block_type":"box","text":"uncertain.","page_number":144,"box":{"x":117,"y":835,"width":77,"height":10}},{"id":"f493b0cb-53ba-418d-ab36-551597fda4e7","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China","page_number":144,"box":{"x":117,"y":862,"width":750,"height":12}},{"id":"1c3bda34-e704-4c2f-91dd-d4cbd8fcc572","block_type":"box","text":"Interbank Bond Market may result in prices of certain bonds traded on such market fluctuating","page_number":144,"box":{"x":117,"y":878,"width":702,"height":12}},{"id":"7ff39241-0e7a-49d1-8ec6-3892c2cbaaed","block_type":"box","text":"II-58","page_number":144,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7801e6f0-2eca-47e3-891e-09622f04384d","block_type":"box","text":"NM1026U-6042785-144/259","page_number":144,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6687d703-ac5c-41e2-a556-eaa2535e811f","block_type":"box","text":"significantly. A Fund investing in such market is therefore subject to liquidity and volatility risks. The","page_number":145,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"516fa7e4-587b-495c-9066-0b28cae9c5c7","block_type":"box","text":"bid-ask spreads of the prices of such securities may be large, and a Fund may therefore incur","page_number":145,"box":{"x":117,"y":102,"width":700,"height":13}},{"id":"45c860a0-f8b2-42ce-9167-6d75e54c640d","block_type":"box","text":"significant costs and may suffer losses when selling such investments. The bonds traded in the China","page_number":145,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"de7bc483-d9ec-43d5-9410-44ecbf9771b4","block_type":"box","text":"Interbank Bond Market may be difficult or impossible to sell, which may impact a Fund’s ability to","page_number":145,"box":{"x":117,"y":134,"width":722,"height":12}},{"id":"22fa04c7-2c3a-4102-9ae1-5e766c7cd231","block_type":"box","text":"acquire or dispose of such securities at their expected prices.","page_number":145,"box":{"x":116,"y":149,"width":460,"height":12}},{"id":"7eb08417-14a5-4952-9f6f-ccd826415052","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks.","page_number":145,"box":{"x":117,"y":177,"width":766,"height":12}},{"id":"c75e4503-a218-40c0-a78b-fe5ec382775d","block_type":"box","text":"The relevant rules and regulations are subject to change, which may have potential retrospective","page_number":145,"box":{"x":116,"y":193,"width":724,"height":12}},{"id":"77a9bc13-dc7e-42bc-bb5c-167875eb8ff6","block_type":"box","text":"effect, and there can be no assurance that Bond Connect will not be discontinued or abolished.","page_number":145,"box":{"x":116,"y":208,"width":711,"height":11}},{"id":"8df0aa5e-8463-428d-9dfd-dfea72520d27","block_type":"box","text":"Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and","page_number":145,"box":{"x":117,"y":223,"width":764,"height":13}},{"id":"57e87e5d-d897-460f-b7bb-f7891d2040e5","block_type":"box","text":"issues may arise based on these differences. In the event that the relevant authorities suspend","page_number":145,"box":{"x":117,"y":239,"width":709,"height":12}},{"id":"5f112132-e245-4554-b0d6-b68751241e25","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":145,"box":{"x":116,"y":254,"width":762,"height":13}},{"id":"0dc5f924-cfa6-4ec0-984c-4349621f95c1","block_type":"box","text":"Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability to","page_number":145,"box":{"x":117,"y":270,"width":716,"height":12}},{"id":"b864e97b-dfa7-4f94-9c8a-3be91a6290ce","block_type":"box","text":"achieve its investment objective will be negatively affected and, after exhausting other trading","page_number":145,"box":{"x":116,"y":285,"width":699,"height":13}},{"id":"cdf766c6-6c69-4c15-aeee-f7809ada67e9","block_type":"box","text":"alternatives, the Fund may suffer substantial losses as a result. Further, if Bond Connect is not","page_number":145,"box":{"x":116,"y":301,"width":707,"height":12}},{"id":"f9a958a7-2b7f-4a30-a357-f72cc52747a0","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":145,"box":{"x":116,"y":316,"width":745,"height":13}},{"id":"e1f0fac3-b609-45a9-a237-90a4abc06760","block_type":"box","text":"manner, which could adversely affect the Fund’s performance.","page_number":145,"box":{"x":117,"y":332,"width":467,"height":12}},{"id":"4964c6ac-797d-486f-b748-347fb4202f54","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and","page_number":145,"box":{"x":116,"y":360,"width":687,"height":12}},{"id":"441876c9-17a2-4a6e-aa5a-b41d9f6a8d70","block_type":"box","text":"operational systems. There is no assurance that such systems will function properly or will continue to","page_number":145,"box":{"x":116,"y":375,"width":761,"height":12}},{"id":"874818b9-0ea1-4267-8447-56e7cbdb95a3","block_type":"box","text":"be adapted to changes and developments in the market. In the event that the relevant systems fail to","page_number":145,"box":{"x":117,"y":391,"width":753,"height":12}},{"id":"b2b24afb-2773-46ba-9d96-01aa14e66a16","block_type":"box","text":"function properly, trading through Bond Connect may be disrupted. A Fund’s ability to trade through","page_number":145,"box":{"x":116,"y":406,"width":744,"height":12}},{"id":"6f1e266e-ffb0-4511-9561-291274931710","block_type":"box","text":"Bond Connect (and hence to pursue its investment strategy) may therefore be adversely affected. In","page_number":145,"box":{"x":117,"y":422,"width":749,"height":12}},{"id":"0022a2fd-6380-4b82-b52c-9b836cd044b5","block_type":"box","text":"addition, where a Fund invests in the China Interbank Bond Market through Bond Connect, it may be","page_number":145,"box":{"x":116,"y":437,"width":753,"height":12}},{"id":"d28888e0-5bfc-48dc-b93c-2f549e79ab2e","block_type":"box","text":"subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":145,"box":{"x":116,"y":453,"width":607,"height":12}},{"id":"23d9d4e8-849e-4e20-89f7-f2dbd156bcb5","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not","page_number":145,"box":{"x":117,"y":481,"width":746,"height":12}},{"id":"05110caf-74d2-408a-8c24-01dd450de60a","block_type":"box","text":"freely convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed","page_number":145,"box":{"x":116,"y":496,"width":740,"height":12}},{"id":"e8f4246e-c9e5-49bf-8a88-527018217d42","block_type":"box","text":"that investors will have timely access to a reliable supply of RMB.","page_number":145,"box":{"x":116,"y":512,"width":490,"height":12}},{"id":"afa30f57-bdeb-4f7f-a8a5-816e570e65cd","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":145,"box":{"x":118,"y":540,"width":317,"height":12}},{"id":"7208ec16-0a1c-4b77-960d-0ffb41372b69","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced","page_number":145,"box":{"x":116,"y":561,"width":697,"height":13}},{"id":"8060be4f-dfe6-4a30-94e7-9e6bf312ccff","block_type":"box","text":"dividends and interests from non-government bonds paid to a non-PRC tax resident enterprise, unless","page_number":145,"box":{"x":116,"y":577,"width":765,"height":12}},{"id":"9be57533-b16a-4dc5-a210-e37cc58a5a90","block_type":"box","text":"the rate is reduced under an applicable tax treaty. From a technical perspective, withholding income","page_number":145,"box":{"x":116,"y":593,"width":746,"height":12}},{"id":"d056a8e1-b982-441d-848a-95f31d58b32f","block_type":"box","text":"tax is also applicable to capital gains realized by foreign investors on the disposal of PRC equity","page_number":145,"box":{"x":116,"y":608,"width":717,"height":12}},{"id":"58dc2d54-4db8-4500-a396-a1193160ff1b","block_type":"box","text":"interests.","page_number":145,"box":{"x":117,"y":624,"width":72,"height":9}},{"id":"67a85f0a-a4d7-4b1e-b814-3485cc495576","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":145,"box":{"x":116,"y":651,"width":735,"height":12}},{"id":"7c02e5bc-c4a5-4eef-b978-208d3fa877ea","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and","page_number":145,"box":{"x":116,"y":679,"width":761,"height":12}},{"id":"d3bf04c3-18b8-47d8-babe-c1264ba8a6da","block_type":"box","text":"the State Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular","page_number":145,"box":{"x":116,"y":695,"width":767,"height":12}},{"id":"ef5dd4a5-26fb-47f2-ae47-e958255e9801","block_type":"box","text":"79, which temporarily exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi","page_number":145,"box":{"x":116,"y":710,"width":699,"height":12}},{"id":"a6459b2a-6d49-4fc6-b11d-0e57351f996f","block_type":"box","text":"Qualified Foreign Institutional Investors (“RQFIIs”) from tax on capital gains derived from the trading of","page_number":145,"box":{"x":116,"y":726,"width":760,"height":12}},{"id":"ce5a5552-26ff-4915-9558-45a614518c7f","block_type":"box","text":"shares and other equity interest investments on or after November 17, 2014. Subsequently, Circulars","page_number":145,"box":{"x":116,"y":741,"width":751,"height":12}},{"id":"b9d5960a-e001-48c7-85ec-78147956a347","block_type":"box","text":"81 and 127 were issued to temporarily exempt tax on capital gains derived from trading of equity","page_number":145,"box":{"x":116,"y":757,"width":716,"height":12}},{"id":"8960f4d7-573b-434c-9d87-d2628acd497a","block_type":"box","text":"securities of companies domiciled in the PRC that trade on Chinese stock exchanges (“A-Shares”)","page_number":145,"box":{"x":116,"y":772,"width":729,"height":12}},{"id":"385292be-9465-4ef1-a930-274b63afaf6a","block_type":"box","text":"through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect","page_number":145,"box":{"x":116,"y":788,"width":764,"height":12}},{"id":"1aa0293c-2d06-45c5-a8ec-01527b52b47c","block_type":"box","text":"program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of","page_number":145,"box":{"x":117,"y":803,"width":746,"height":12}},{"id":"affda31a-24b7-485c-9b43-1a165fb5d0c5","block_type":"box","text":"the temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax","page_number":145,"box":{"x":116,"y":819,"width":735,"height":12}},{"id":"2bbe679a-52eb-4e5e-8f2d-c562ab09c271","block_type":"box","text":"authorities with or without notice.","page_number":145,"box":{"x":116,"y":834,"width":249,"height":10}},{"id":"b115cf08-701e-4c58-8c53-8d420d2134de","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":145,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"a104adaf-741a-420f-9057-c536a46fe5a5","block_type":"box","text":"institutional investors are temporarily exempt from withholding income tax with respect to interest","page_number":145,"box":{"x":117,"y":878,"width":723,"height":12}},{"id":"d4378697-ae62-4d01-a555-e9ddb3652d46","block_type":"box","text":"II-59","page_number":145,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1dae69e8-c915-42fe-8ed3-b5fb6b0401b5","block_type":"box","text":"NM1026U-6042785-145/259","page_number":145,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8c9548b3-ce4b-4b49-bbf3-4586d4a8e366","block_type":"box","text":"income on bonds derived from the PRC bond market from November 7, 2018 to November 6, 2021.","page_number":146,"box":{"x":117,"y":87,"width":745,"height":11}},{"id":"bdbabfdd-63eb-4ddd-bad5-e8b3c52f171a","block_type":"box","text":"On November 22, 2021, the MoF and STA issued Public Notice 34 to extend the temporary exemption","page_number":146,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"a3662e3a-1d57-4fdf-b6b8-823d2fd7ec1b","block_type":"box","text":"from November 7, 2021 to December 31, 2025. On January 15, 2026, it was announced via Public","page_number":146,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"a7a01c23-5f24-4473-8a2f-e41510a99396","block_type":"box","text":"Notice No. 5 of 2026 that the exemption was extended through December 31, 2027.","page_number":146,"box":{"x":117,"y":134,"width":628,"height":12}},{"id":"36a38443-c6aa-4100-b589-63dccc2fa34c","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":146,"box":{"x":118,"y":165,"width":225,"height":12}},{"id":"f83cd0bf-4da8-4a0c-9510-60d49390d831","block_type":"box","text":"k—From May 1, 2016, VAT applies to certain income derived by the","page_number":146,"box":{"x":342,"y":165,"width":501,"height":12}},{"id":"11f4baf2-1acf-4ae0-9f34-3a906c782004","block_type":"box","text":"Fund, including PRC sourced interest income on non-government bonds and trading gains.","page_number":146,"box":{"x":117,"y":180,"width":681,"height":12}},{"id":"ccba4fd2-f788-49ca-8e7d-8a66c3273fa0","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":146,"box":{"x":116,"y":211,"width":735,"height":12}},{"id":"a859c5eb-2fc4-4d00-abcc-59de4fd660b1","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares","page_number":146,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"f108ab34-3bce-450e-903f-79c4ff6e5043","block_type":"box","text":"traded on the Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":146,"box":{"x":116,"y":258,"width":699,"height":9}},{"id":"fcd3dd52-def3-4f7a-b424-65f358e9f1cc","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":146,"box":{"x":116,"y":289,"width":694,"height":12}},{"id":"42c76864-783b-4788-82d0-c459e4dcd63f","block_type":"box","text":"institutional investors are temporarily exempt from VAT with respect to interest income on bonds","page_number":146,"box":{"x":117,"y":304,"width":718,"height":12}},{"id":"300498c3-965e-456e-a92e-ba1228b8be2a","block_type":"box","text":"derived from the PRC bond market from November 7, 2018 to November 6, 2021. On November 22,","page_number":146,"box":{"x":116,"y":320,"width":750,"height":11}},{"id":"0581f9b3-1e8f-49a7-af5a-0bdf9b865821","block_type":"box","text":"2021, the MoF and STA jointly issued Public Notice 34 to extend the temporary exemption from","page_number":146,"box":{"x":116,"y":335,"width":714,"height":12}},{"id":"638465ff-7b19-480e-aa55-7664887fd089","block_type":"box","text":"November 7, 2021 to December 31, 2025. However, on July 31, 2025, the MoF and STA jointly issued","page_number":146,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"55eda6b7-86f5-473e-a014-3c342e0aab6c","block_type":"box","text":"Public Notice No 4 of 2025, stating that VAT will apply with respect to interest income derived from","page_number":146,"box":{"x":117,"y":366,"width":735,"height":12}},{"id":"52ca6081-8353-4290-acd4-5b92f8c8082f","block_type":"box","text":"treasury bonds, local government bonds and financial bonds issued on or after August 8, 2025. It is","page_number":146,"box":{"x":116,"y":382,"width":742,"height":12}},{"id":"42486517-1176-4cdc-821f-d68b13cd927f","block_type":"box","text":"understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption for","page_number":146,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"b633855b-40b8-43c9-b798-602ae404057d","block_type":"box","text":"foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":146,"box":{"x":116,"y":413,"width":668,"height":12}},{"id":"3c6c3418-9c5e-43cd-bb0b-0b65db49daa0","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement","page_number":146,"box":{"x":116,"y":444,"width":754,"height":12}},{"id":"1e96032d-d8c6-4654-9690-0961912bbd66","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":146,"box":{"x":117,"y":459,"width":761,"height":12}},{"id":"b962aea5-040f-4dc5-ae21-faf3447fb400","block_type":"box","text":"PRC tax authorities may withdraw the temporary tax exemptions in the future and seek to collect taxes","page_number":146,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"6b5209e8-5df7-4c6b-92c9-b897dd81502d","block_type":"box","text":"realized on the sale of A-Shares or PRC sourced interest income on non-government bonds received","page_number":146,"box":{"x":117,"y":490,"width":756,"height":12}},{"id":"c9ad992e-912c-4b09-ab8c-7dabaf935f59","block_type":"box","text":"by the Fund without giving any prior notice. If the temporary tax exemptions are withdrawn, any taxes","page_number":146,"box":{"x":117,"y":506,"width":755,"height":12}},{"id":"aefb7dca-a461-4832-824a-1cec5509a744","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":146,"box":{"x":117,"y":521,"width":755,"height":12}},{"id":"7741ac11-d949-4d79-ab54-a5087bac2d76","block_type":"box","text":"its net asset value. As with any net asset value adjustment, investors may be advantaged or","page_number":146,"box":{"x":117,"y":537,"width":687,"height":12}},{"id":"8a2ff05b-3606-4924-9f4e-99985a099c42","block_type":"box","text":"disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":146,"box":{"x":116,"y":552,"width":763,"height":12}},{"id":"8be0f106-4e1e-4db6-91f4-4c641a1c9ee0","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":146,"box":{"x":116,"y":568,"width":494,"height":12}},{"id":"38739895-1bc6-41b8-8d42-2ef2b139ac62","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from","page_number":146,"box":{"x":117,"y":599,"width":758,"height":12}},{"id":"cf9b1026-bd24-438a-bd2a-1091ff855c84","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":146,"box":{"x":116,"y":614,"width":756,"height":12}},{"id":"f1dfcc32-ad91-4c68-877c-263ab40ebaee","block_type":"box","text":"as further clarified by the PRC in notifications.","page_number":146,"box":{"x":116,"y":630,"width":345,"height":12}},{"id":"3901d747-e729-4c67-bcff-b7ba8a42fcab","block_type":"box","text":"Investment in Other Investment Companies.","page_number":146,"box":{"x":116,"y":661,"width":350,"height":12}},{"id":"75dfed46-efa9-480c-a019-fe9397422308","block_type":"box","text":"Each Fund may, subject to applicable law, invest in","page_number":146,"box":{"x":474,"y":661,"width":378,"height":12}},{"id":"41e2f7a0-9b42-4a16-8cce-f47b05183528","block_type":"box","text":"other investment companies (including investment companies managed by BlackRock and its","page_number":146,"box":{"x":116,"y":676,"width":694,"height":12}},{"id":"8ca2695f-f7b6-43ca-bb6f-78abce4221e2","block_type":"box","text":"affiliates), including money market funds and ETFs, which are typically open-end funds or unit","page_number":146,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"b8821675-8176-4813-a765-1e3babd57510","block_type":"box","text":"investment trusts listed on a stock exchange. Under Section 12(d)(1)(A) of the Investment Company","page_number":146,"box":{"x":117,"y":707,"width":743,"height":12}},{"id":"90d86870-b516-4d0e-834a-605323438ff0","block_type":"box","text":"Act, however, a Fund may invest up to 10% of its total assets in securities of other investment","page_number":146,"box":{"x":116,"y":723,"width":696,"height":12}},{"id":"1760388b-9657-48ba-bac8-e2e69f6f8fa7","block_type":"box","text":"companies (measured at the time of such investment). In addition, under Section 12(d)(1)(A) of the","page_number":146,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"a801d94a-ce9b-4f8a-9d96-ef5bdf8b063f","block_type":"box","text":"Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":146,"box":{"x":117,"y":754,"width":698,"height":12}},{"id":"5a9184e6-b43e-4616-b717-ab0205880d67","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such","page_number":146,"box":{"x":116,"y":769,"width":739,"height":12}},{"id":"3405e946-b27f-4d5b-924d-5d492b6ad714","block_type":"box","text":"investment company and a Fund may not invest in another investment company if such investment","page_number":146,"box":{"x":117,"y":785,"width":734,"height":12}},{"id":"ddc10e53-4045-4930-9d66-200c670dea92","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":146,"box":{"x":116,"y":800,"width":747,"height":10}},{"id":"718f95cf-9801-4c0a-9acc-f356e1bc9233","block_type":"box","text":"investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in","page_number":146,"box":{"x":117,"y":816,"width":721,"height":12}},{"id":"e902bc0c-8238-4303-9d98-344e4678b9c2","block_type":"box","text":"shares of its Master Portfolio.) In addition to the restrictions on investing in other investment companies","page_number":146,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"218fca92-28f0-4f16-b01d-bdb6c5f8c954","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":146,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"b9e300a0-a218-4e05-a559-4a2ad95b5538","block_type":"box","text":"a registered closed-end investment company if such investment would cause the Fund and other","page_number":146,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"48a02188-bec1-42a1-afd0-802b72928417","block_type":"box","text":"BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock","page_number":146,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"24430a6d-2ca8-41e3-a4f1-8b3b2cc60590","block_type":"box","text":"II-60","page_number":146,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"231f3368-068a-4e9d-809e-b68eb71f97e2","block_type":"box","text":"NM1026U-6042785-146/259","page_number":146,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bd9684cf-df2e-44bd-81dc-3ed66e829222","block_type":"box","text":"of such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company","page_number":147,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"229d6b15-8086-4d8d-9729-5d80d468ec9f","block_type":"box","text":"Act, these percentage limitations do not apply to investments in affiliated investment companies,","page_number":147,"box":{"x":116,"y":102,"width":719,"height":13}},{"id":"1158a19b-3faa-4a98-b521-492092d1370b","block_type":"box","text":"including ETFs, subject to certain conditions. In addition, a Fund may be able to rely on certain rules","page_number":147,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"a1084dde-f095-426d-905b-6cda2577f9aa","block_type":"box","text":"under the Investment Company Act to invest in shares of money market funds or other investment","page_number":147,"box":{"x":117,"y":134,"width":733,"height":12}},{"id":"5cf3b464-993f-4ee3-8155-32f2d8014f3f","block_type":"box","text":"companies beyond the statutory limits noted above, but subject to certain conditions.","page_number":147,"box":{"x":116,"y":149,"width":633,"height":12}},{"id":"88b56477-6a26-482e-b2ac-b28e982e6e78","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and","page_number":147,"box":{"x":116,"y":180,"width":723,"height":12}},{"id":"c37f2f24-5e59-4f8a-b5da-de9e6f22b2fc","block_type":"box","text":"selection risk.","page_number":147,"box":{"x":116,"y":196,"width":106,"height":9}},{"id":"b12a49b4-2fc4-4c98-9b32-a8838e59812b","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an","page_number":147,"box":{"x":116,"y":227,"width":740,"height":11}},{"id":"60f97b6b-5061-4373-9735-2ac11b9c45e9","block_type":"box","text":"exchange may at times be acquired at market prices representing premiums to their NAVs. In addition,","page_number":147,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"485388fc-e8d1-4565-9261-726b012a6011","block_type":"box","text":"investment companies held by a Fund that trade on an exchange could trade at a discount from NAV,","page_number":147,"box":{"x":117,"y":258,"width":758,"height":12}},{"id":"26668065-7db2-44f0-9e84-5bcc5f1568e0","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":147,"box":{"x":116,"y":273,"width":756,"height":12}},{"id":"eaddc6cf-21d9-4c5f-9840-619bcf313d73","block_type":"box","text":"exchange-traded investment company decreases below the price that the Fund paid for the shares and","page_number":147,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"555e3b1f-f2fb-4770-b5b6-10645092a7d9","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":147,"box":{"x":116,"y":304,"width":757,"height":12}},{"id":"926028dc-c9bc-41f5-a07e-0a7b687cb8e7","block_type":"box","text":"than the price at which it purchased the shares, the Fund would experience a loss.","page_number":147,"box":{"x":116,"y":320,"width":617,"height":12}},{"id":"72017541-a23b-4211-8c17-cc85548376e8","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment","page_number":147,"box":{"x":117,"y":351,"width":698,"height":12}},{"id":"e086a601-70f9-45cf-881e-7a9c6a949c73","block_type":"box","text":"companies, shareholders would bear both their proportionate share of expenses in the Fund and,","page_number":147,"box":{"x":116,"y":366,"width":727,"height":12}},{"id":"00bafad2-1611-490d-9d9c-34d57354943d","block_type":"box","text":"indirectly, the expenses of such investment companies. Such expenses, both at the Fund level and","page_number":147,"box":{"x":117,"y":382,"width":739,"height":12}},{"id":"e6eee7a5-5e06-4d9a-b59c-c348c67ed9cc","block_type":"box","text":"acquired investment company level, would include management and advisory fees, unless such fees","page_number":147,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"9a090275-d79c-4f15-a2c9-3d801e08ab4d","block_type":"box","text":"have been waived by BlackRock. Please see the relevant Fund’s Prospectus to determine whether any","page_number":147,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"7c891338-dca1-481f-b017-18d1e4f9cb5d","block_type":"box","text":"such management and advisory fees have been waived by BlackRock. Investments by a Fund in","page_number":147,"box":{"x":116,"y":428,"width":724,"height":12}},{"id":"75a8c9fe-c259-42c4-baf6-851edc69eaed","block_type":"box","text":"wholly owned investment entities created under the laws of certain countries will not be deemed an","page_number":147,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"ab6d645c-277d-470b-b16f-0d716b4a4873","block_type":"box","text":"investment in other investment companies. Pursuant to guidance issued by the staff of the","page_number":147,"box":{"x":117,"y":459,"width":674,"height":12}},{"id":"1ff8ed93-1c66-4ee5-8f0d-2921be6933d0","block_type":"box","text":"Commission, fees and expenses of money market funds used for the investment of cash collateral","page_number":147,"box":{"x":117,"y":475,"width":733,"height":12}},{"id":"a0fd2f65-5c69-4ad1-b860-4d897bda1269","block_type":"box","text":"received in connection with loans of Fund securities are not treated as “acquired fund fees and","page_number":147,"box":{"x":117,"y":490,"width":706,"height":12}},{"id":"b062026c-6c3d-4b24-893b-b5c511f6939a","block_type":"box","text":"expenses,” which are fees and expenses charged by other investment companies and pooled","page_number":147,"box":{"x":116,"y":506,"width":701,"height":12}},{"id":"f90f0e91-2651-47e5-87e6-39db67db854e","block_type":"box","text":"investment vehicles in which a Fund invests a portion of its assets.","page_number":147,"box":{"x":117,"y":521,"width":498,"height":12}},{"id":"4ad5510d-462e-44f9-862b-6868d5f79430","block_type":"box","text":"To the extent shares of a Fund are held by another f","page_number":147,"box":{"x":116,"y":552,"width":380,"height":12}},{"id":"84f51e36-1b4d-4dc6-824d-1cb860934e83","block_type":"box","text":"und, the ability of the Fund it","page_number":147,"box":{"x":497,"y":552,"width":205,"height":12}},{"id":"e2cbe66b-e01e-494c-8f26-5cdd9a8d5b0e","block_type":"box","text":"self to purchase other","page_number":147,"box":{"x":702,"y":552,"width":163,"height":12}},{"id":"8a72a8e4-6340-470e-82a6-68008b67ed77","block_type":"box","text":"funds may be limited. In addition, a fund of funds (","page_number":147,"box":{"x":116,"y":568,"width":363,"height":12}},{"id":"143f29f4-6c4f-498a-9d84-e6720a54016d","block_type":"box","text":"e.g.","page_number":147,"box":{"x":480,"y":570,"width":25,"height":10}},{"id":"2140ea0f-2eab-4643-aa46-eada6fd9d7e4","block_type":"box","text":", an investment company that seeks to meet its","page_number":147,"box":{"x":508,"y":568,"width":347,"height":12}},{"id":"658ce8f6-f1a2-437c-825d-792a4c217447","block_type":"box","text":"investment objective by investing significantly in","page_number":147,"box":{"x":117,"y":583,"width":350,"height":12}},{"id":"6ecad562-627f-4e28-8317-654e7fe9c128","block_type":"box","text":"other investment companies)","page_number":147,"box":{"x":468,"y":583,"width":215,"height":12}},{"id":"08d2481b-dee6-4609-8426-f3030cf6a649","block_type":"box","text":"may be limited in its ability","page_number":147,"box":{"x":684,"y":583,"width":195,"height":12}},{"id":"35cc8494-510b-4856-bf98-ea818c332441","block_type":"box","text":"to purchase underlying funds if such underlying f","page_number":147,"box":{"x":116,"y":599,"width":353,"height":12}},{"id":"6548bbc8-69a8-40b2-a7f7-e9d368cd4bbe","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":147,"box":{"x":470,"y":599,"width":364,"height":12}},{"id":"382f5714-6224-4542-bd03-14a7f6435bd5","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate","page_number":147,"box":{"x":116,"y":630,"width":715,"height":12}},{"id":"084caf93-b048-4db5-986a-a92954b6fba6","block_type":"box","text":"indirect foreign investment in developing countries, and certain of such countries, such as Thailand,","page_number":147,"box":{"x":117,"y":645,"width":743,"height":12}},{"id":"00586118-2c3e-49c8-9b98-13b41c757191","block_type":"box","text":"South Korea, Chile and Brazil, have specifically authorized such funds. There also are investment","page_number":147,"box":{"x":116,"y":661,"width":725,"height":12}},{"id":"fcaa0b25-4106-4511-91bd-adcae5af0ae8","block_type":"box","text":"opportunities in certain of such countries in pooled vehicles that resemble open-end investment","page_number":147,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"3c938481-4356-48ec-8e00-4137d188368c","block_type":"box","text":"companies. The restrictions on investments in securities of investment companies set forth above may","page_number":147,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"c679702f-dd51-4dcc-a06a-567ed9d33be8","block_type":"box","text":"limit opportunities for a Fund to invest indirectly in certain developing countries.","page_number":147,"box":{"x":117,"y":707,"width":585,"height":12}},{"id":"6d30e1a4-a6c1-488b-870b-aa4d52fd51f7","block_type":"box","text":"Issuer Insolvency Risk.","page_number":147,"box":{"x":116,"y":738,"width":185,"height":12}},{"id":"72b5290e-0e98-4b50-b404-ef03401a7e82","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled","page_number":147,"box":{"x":307,"y":738,"width":532,"height":12}},{"id":"9491ebd8-c90c-4d46-a1d7-860e073bb697","block_type":"box","text":"issuers involves a high degree of credit and market risk, which may be heightened during an economic","page_number":147,"box":{"x":117,"y":754,"width":761,"height":12}},{"id":"b8fdc0b4-e989-471f-9e2f-6c1f0da8812f","block_type":"box","text":"downturn or recession. Should an issuer of securities held by a Fund become involved in a bankruptcy","page_number":147,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"28a05f20-83dd-4348-9f9b-5cb5bb9b740d","block_type":"box","text":"proceeding, reorganization or financial restructuring, a wide variety of considerations make an","page_number":147,"box":{"x":117,"y":785,"width":695,"height":12}},{"id":"d0e09b8b-b41d-4c78-b393-9c2a226c62bb","block_type":"box","text":"evaluation of the outcome of the Fund’s exposure to the issuer uncertain.","page_number":147,"box":{"x":116,"y":800,"width":542,"height":12}},{"id":"de0a279d-3847-4ffc-8816-24fc9d9fc434","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that","page_number":147,"box":{"x":117,"y":831,"width":769,"height":12}},{"id":"07ab7224-34f6-4489-852b-8a1b9d808a70","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":147,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"1d8e5eaa-03f4-4f36-85df-3ee2a11a87b7","block_type":"box","text":"significant uncertainty as to whether the reorganization or restructuring will be completed, and the Fund","page_number":147,"box":{"x":116,"y":862,"width":772,"height":12}},{"id":"9360ca5f-2c9b-4870-a14b-b4b854d9c361","block_type":"box","text":"may bear certain extraordinary expenses to protect and recover its investment. A Fund will also be","page_number":147,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"dedfc0df-19f8-48b2-be3d-cbf8ae8964c6","block_type":"box","text":"II-61","page_number":147,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"f9a03be0-ac2a-446f-8076-747be9422b06","block_type":"box","text":"NM1026U-6042785-147/259","page_number":147,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0dce88fc-07a0-4765-9ff9-fae5ed161b93","block_type":"box","text":"subject to significant uncertainty as to when and in what manner and for what value the obligations","page_number":148,"box":{"x":116,"y":87,"width":737,"height":12}},{"id":"b07cd83f-6385-4367-8a6c-2265eb0fe1f5","block_type":"box","text":"evidenced by the securities of the issuer held by the Fund will eventually be satisfied.","page_number":148,"box":{"x":116,"y":102,"width":637,"height":13}},{"id":"227d0755-3a62-484b-bc3a-68d476d36c6e","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer","page_number":148,"box":{"x":117,"y":134,"width":741,"height":12}},{"id":"5d16f51f-9ceb-439b-8158-5ccfdd7584b3","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":148,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"3c37cde4-b79b-4113-9be3-0540c91ddf58","block_type":"box","text":"connection with such plan of reorganization or restructuring will not have a lower value or income","page_number":148,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"f9632f63-7d58-49b1-8548-3701f4ac881c","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":148,"box":{"x":117,"y":180,"width":742,"height":12}},{"id":"691e4387-2d58-4183-be33-cf564073af0c","block_type":"box","text":"rights in any collateral or may have its claims or security interest in any collateral challenged, disallowed","page_number":148,"box":{"x":117,"y":196,"width":767,"height":12}},{"id":"073973cb-84d3-4d65-a0bd-a3c41f7f815f","block_type":"box","text":"or subordinated to the claims or security interests of other creditors. In addition, amendments to the U.S.","page_number":148,"box":{"x":116,"y":211,"width":772,"height":12}},{"id":"c364385e-6c6e-48bf-bd8c-44150ea97f2d","block_type":"box","text":"Bankruptcy Code or other relevant laws could alter the expected outcome or introduce greater","page_number":148,"box":{"x":117,"y":227,"width":695,"height":12}},{"id":"05105606-0a47-4b64-abfc-0b2f19b008dc","block_type":"box","text":"uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":148,"box":{"x":117,"y":242,"width":716,"height":12}},{"id":"0431ca04-033a-44d6-ae2b-fab530678df9","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be","page_number":148,"box":{"x":117,"y":258,"width":716,"height":12}},{"id":"5860192d-f3f6-4eac-8121-fdc07ff29d29","block_type":"box","text":"re-characterized or a Fund may receive different securities or other assets, including equity securities.","page_number":148,"box":{"x":117,"y":273,"width":752,"height":12}},{"id":"99443487-7237-455d-a864-160c2c993b01","block_type":"box","text":"These types of equity securities include, but are not limited to: common stock; preferred stock (including","page_number":148,"box":{"x":116,"y":289,"width":768,"height":12}},{"id":"3aba55e0-9a3b-4b33-8a23-22f6da03ebcf","block_type":"box","text":"convertible preferred stock); bonds, notes and debentures convertible into common or preferred stock;","page_number":148,"box":{"x":116,"y":304,"width":756,"height":12}},{"id":"a0977a6f-b43a-4a32-8103-a46184098ae8","block_type":"box","text":"stock purchase warrants and rights; equity interests in trusts; and depositary receipts. Equity securities","page_number":148,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"4dfdd75d-a1d0-4fed-8e59-5bf97e37f670","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":148,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"55ab0c37-606d-4c36-9355-d230ff7c2695","block_type":"box","text":"Holders of equity securities are subject to more risk than holders of debt securities because the status of","page_number":148,"box":{"x":117,"y":351,"width":771,"height":12}},{"id":"5bd6fdca-4e9c-4b13-b02f-5d02bcef0a95","block_type":"box","text":"equity holders is subordinate to debtholders in an issuer’s capital structure. The value of equity","page_number":148,"box":{"x":116,"y":366,"width":701,"height":12}},{"id":"b80a35d8-891c-4caf-956f-bb554e633a5c","block_type":"box","text":"securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":148,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"31c61e6b-77c6-425e-90c3-ce7434594264","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":148,"box":{"x":116,"y":397,"width":764,"height":12}},{"id":"8f7d86d1-a3b0-4590-9e2e-9936aed20655","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding,","page_number":148,"box":{"x":116,"y":428,"width":681,"height":12}},{"id":"24b929d1-7736-41bc-8b04-aef66c4fe0fe","block_type":"box","text":"reorganization or financial restructuring, the Fund may also be subject to additional risks associated with","page_number":148,"box":{"x":117,"y":444,"width":770,"height":12}},{"id":"43c392e0-c4d7-4fa3-9db9-f3ef9b84415c","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":148,"box":{"x":116,"y":459,"width":730,"height":12}},{"id":"f85e56f9-ef46-4cc1-be63-1d191a49dc89","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":148,"box":{"x":117,"y":475,"width":756,"height":12}},{"id":"1eb16bbb-5428-4a73-8f86-2badab5368b0","block_type":"box","text":"the issuer. A Fund may receive such interests in loans to the extent permitted by the Investment","page_number":148,"box":{"x":116,"y":490,"width":710,"height":12}},{"id":"69d18244-190f-468d-a3cb-09b35d69c464","block_type":"box","text":"Company Act.","page_number":148,"box":{"x":117,"y":506,"width":108,"height":12}},{"id":"d40b4402-e720-4933-821a-e52efced54fb","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree","page_number":148,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"9caccb42-e820-4685-9496-01ced18fac9b","block_type":"box","text":"of risk than investments in securities of issuers that have not undergone a reorganization or","page_number":148,"box":{"x":116,"y":552,"width":684,"height":12}},{"id":"6e1732fe-f21d-4f67-a26c-f63b19e17e2c","block_type":"box","text":"restructuring and may be subject to heavy selling or downward pricing pressure after completion of the","page_number":148,"box":{"x":117,"y":568,"width":765,"height":12}},{"id":"82e86634-90ad-4b12-920a-08c372d8db2e","block_type":"box","text":"reorganization or restructuring. The post-reorganization/restructuring assets and securities may also be","page_number":148,"box":{"x":117,"y":583,"width":771,"height":12}},{"id":"ab26dbb5-7188-4207-8e65-2d934acbeb9d","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":148,"box":{"x":117,"y":599,"width":715,"height":12}},{"id":"ac6552de-58f4-4f0b-9a7c-9405ba2a53b4","block_type":"box","text":"reorganization or restructuring with respect to securities of the issuer held by a Fund, the Fund also","page_number":148,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"52860dcc-72f0-4e0d-b7e4-b32e7222369b","block_type":"box","text":"may be restricted from disposing such securities for a period of time. If a Fund becomes involved in","page_number":148,"box":{"x":117,"y":630,"width":741,"height":12}},{"id":"f2f1f791-89ff-4368-9a0b-5217f845224c","block_type":"box","text":"such proceedings, the Fund may have more active participation in the affairs of the issuer than that","page_number":148,"box":{"x":116,"y":645,"width":740,"height":12}},{"id":"11a0bd5f-b62b-4c87-9622-bc9e391e5d29","block_type":"box","text":"assumed generally by an investor.","page_number":148,"box":{"x":116,"y":661,"width":254,"height":12}},{"id":"4e057d4f-7e50-43dc-9a53-e643c9ea7192","block_type":"box","text":"Lease Obligations.","page_number":148,"box":{"x":116,"y":692,"width":148,"height":12}},{"id":"d6ba3ebc-7d8f-4510-8889-93d316cd27b0","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase","page_number":148,"box":{"x":270,"y":692,"width":571,"height":12}},{"id":"34542d6e-1bd5-4452-ad95-5631f10f93fa","block_type":"box","text":"contract, or a conditional sales contract (“lease obligations”). The Manager will monitor the credit","page_number":148,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"1661b6ec-a87a-4989-aec5-cb259d2186fc","block_type":"box","text":"standing of each borrower and each entity providing credit support and/or a put option relating to lease","page_number":148,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"cee7b427-83ff-4443-a38b-9a041953cbe7","block_type":"box","text":"obligations.","page_number":148,"box":{"x":116,"y":738,"width":83,"height":12}},{"id":"1013de6a-82c5-44d6-9115-13a87ec9f684","block_type":"box","text":"Life Settlement Investments.","page_number":148,"box":{"x":116,"y":769,"width":227,"height":10}},{"id":"b1b8ebba-8e36-43eb-b593-7a530503bcea","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties,","page_number":148,"box":{"x":349,"y":769,"width":514,"height":12}},{"id":"6d64124d-ed19-4d73-ad80-f6fb52d20cfc","block_type":"box","text":"such as the Fund, of existing life insurance contracts for more than their cash surrender value but less","page_number":148,"box":{"x":116,"y":785,"width":757,"height":12}},{"id":"107d59c0-4d57-4745-8ae3-dfd41543d493","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":148,"box":{"x":116,"y":800,"width":751,"height":12}},{"id":"c3c5a02f-0ad4-4a76-a3ed-afd19171d0d9","block_type":"box","text":"policy premiums in return for the expected receipt of the net benefit as the beneficiary under the policy.","page_number":148,"box":{"x":117,"y":816,"width":761,"height":12}},{"id":"a7d1402e-d940-4502-ade4-f943b97f530f","block_type":"box","text":"Investments in these contracts involve certain risks, including liquidity risk, credit risk of the insurance","page_number":148,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"18db88b5-2b97-411e-80b0-708fc00ffee7","block_type":"box","text":"company, and inaccurate estimations of life expectancy of the insured individuals (viators). These","page_number":148,"box":{"x":116,"y":847,"width":729,"height":12}},{"id":"378229b9-a6ec-41dd-9367-f89f20a43105","block_type":"box","text":"policies may be considered illiquid because they are bought and sold in a secondary market through","page_number":148,"box":{"x":117,"y":862,"width":748,"height":12}},{"id":"c264f5fc-f534-4cc2-8234-4efe5c13b1b6","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":148,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"ab494088-5730-4f8e-8cbc-b5c5c2fe5d82","block_type":"box","text":"II-62","page_number":148,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"89b1417b-20b0-45cb-8ab1-1b1496798572","block_type":"box","text":"NM1026U-6042785-148/259","page_number":148,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"89327bb4-8b6e-4dc9-84cd-2e152ee9d88c","block_type":"box","text":"may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":149,"box":{"x":117,"y":87,"width":708,"height":12}},{"id":"1e37422f-de50-41f5-9a83-8c195280eaa9","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund","page_number":149,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"a4760cb8-1536-4f0a-8a40-79c47fe553be","block_type":"box","text":"may encounter losses on its investments if there is an inaccurate estimation of the life expectancies of","page_number":149,"box":{"x":117,"y":118,"width":761,"height":12}},{"id":"1112b0aa-9cc7-4142-b37d-5da39e88e2af","block_type":"box","text":"viators. A Fund intends to reduce this life expectancy risk by investing only in contracts where the life","page_number":149,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"863b193d-5fba-48be-b559-109f30e03cfb","block_type":"box","text":"expectancy was reviewed by an experienced actuary, as well as by diversifying its investments across","page_number":149,"box":{"x":116,"y":149,"width":763,"height":12}},{"id":"251d7d4a-a243-40f4-8a23-5e54725e7a81","block_type":"box","text":"viators of varying ages and medical profiles. In addition, it is unclear whether the income from life","page_number":149,"box":{"x":116,"y":165,"width":725,"height":12}},{"id":"d6f7b680-aef1-483f-9a82-d6820f0552a9","block_type":"box","text":"settlements is qualifying income for purposes of the IRS 90% gross income test a Fund must satisfy","page_number":149,"box":{"x":116,"y":180,"width":746,"height":12}},{"id":"31834e73-5e0c-4e00-b395-4ab9d72ea2c8","block_type":"box","text":"each year to qualify as a regulated investment company. A Fund intends to monitor its investments to","page_number":149,"box":{"x":116,"y":196,"width":758,"height":12}},{"id":"b1bd5a91-d137-44c1-8ee4-ccfa2330c264","block_type":"box","text":"ensure that the Fund remains qualified as a regulated investment company.","page_number":149,"box":{"x":116,"y":211,"width":567,"height":12}},{"id":"4777dadb-f0fa-4cc4-a063-280356b118c9","block_type":"box","text":"Liquidity Risk Management.","page_number":149,"box":{"x":116,"y":242,"width":221,"height":12}},{"id":"21f5aad5-10f0-4049-99ef-2fdeafa42954","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”)","page_number":149,"box":{"x":338,"y":242,"width":517,"height":12}},{"id":"09179e42-d06e-4835-bd16-b38242f3b6e2","block_type":"box","text":"requires open-end funds, such as the Funds, to adopt a liquidity risk management program and","page_number":149,"box":{"x":117,"y":258,"width":712,"height":12}},{"id":"ed3b1c6d-c9f2-42da-9f66-4074f8d71cfc","block_type":"box","text":"enhance disclosures regarding fund liquidity. As required by the Liquidity Rule, the Funds have","page_number":149,"box":{"x":116,"y":273,"width":709,"height":12}},{"id":"1b45d20e-d6cd-42c4-aa96-f9d86bea142c","block_type":"box","text":"implemented a liquidity risk management program (the “Liquidity Program”), and the Boards of","page_number":149,"box":{"x":117,"y":289,"width":704,"height":12}},{"id":"2dfc47ac-9bf4-43c6-8a8a-74558f0b22a0","block_type":"box","text":"Directors of the Funds, including a majority of the independent Directors, have appointed the Manager","page_number":149,"box":{"x":117,"y":304,"width":762,"height":12}},{"id":"aaa68dd8-c8d8-4eb3-aff8-40534e2b3faf","block_type":"box","text":"as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity Program, the","page_number":149,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"10727e23-e728-4d26-bf00-43819252fca9","block_type":"box","text":"Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":149,"box":{"x":117,"y":335,"width":746,"height":12}},{"id":"57dcb164-8ef7-4497-a99b-5d16313305cc","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid","page_number":149,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"adb41022-f9a3-42fb-a233-f654685c6b97","block_type":"box","text":"investment” or “illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund","page_number":149,"box":{"x":117,"y":366,"width":736,"height":12}},{"id":"c773a1a9-0334-4d0b-a58e-2770ed67a6ec","block_type":"box","text":"could not meet requests to redeem shares issued by the Fund without significant dilution of the","page_number":149,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"ed1b2ca7-a2a5-4ed7-aa42-60dec666e251","block_type":"box","text":"remaining investors’ interests in the Fund. The liquidity of a Fund’s portfolio investments is determined","page_number":149,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"60c2f469-8bf5-44ea-92f8-e9ea244edc44","block_type":"box","text":"based on relevant market, trading and investment-specific considerations under the Liquidity Program.","page_number":149,"box":{"x":117,"y":413,"width":764,"height":12}},{"id":"e2d34160-e409-433a-aff0-b907563176a7","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":149,"box":{"x":116,"y":428,"width":747,"height":12}},{"id":"5d6d92fe-056d-42e5-bb34-91ec4fd3b13a","block_type":"box","text":"Fund can expect to be exposed to greater liquidity risk.","page_number":149,"box":{"x":117,"y":444,"width":411,"height":12}},{"id":"8fea9d50-b9bd-4d07-a40c-d710b424fdc5","block_type":"box","text":"Master Limited Partnerships.","page_number":149,"box":{"x":116,"y":475,"width":225,"height":12}},{"id":"8b1fcfca-6287-4ab5-85a7-5750763cbbbb","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships","page_number":149,"box":{"x":342,"y":475,"width":526,"height":12}},{"id":"8747c749-e751-4de5-81e1-11d9b166b65d","block_type":"box","text":"(“MLPs”) which are limited partnerships or limited liab","page_number":149,"box":{"x":117,"y":490,"width":386,"height":12}},{"id":"dadf8af0-f480-4cc6-b7f3-d3c653e3a8f3","block_type":"box","text":"ility companies taxable as partnerships for U.S.","page_number":149,"box":{"x":504,"y":490,"width":346,"height":12}},{"id":"6b28c3b2-7256-4cc8-8ba6-0f6575f6cda6","block_type":"box","text":"federal income tax purposes. MLPs may derive income and gains from the exploration, development,","page_number":149,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"19a55e8c-5e3d-4a6a-b409-31cc1a6ac5ce","block_type":"box","text":"mining or production, processing, refining, transporta","page_number":149,"box":{"x":117,"y":521,"width":382,"height":12}},{"id":"ef497a8c-4413-4e79-a278-5ee69bcf392f","block_type":"box","text":"tion (including pipelines transporting gas, oil, or","page_number":149,"box":{"x":500,"y":521,"width":346,"height":12}},{"id":"fa87e9fb-de1b-4324-b1ba-06976de4b03d","block_type":"box","text":"products thereof), or the marketing of any mineral or","page_number":149,"box":{"x":117,"y":537,"width":379,"height":12}},{"id":"97aaa997-b1be-4438-a4a9-cfd1506c9048","block_type":"box","text":"r natural resources. MLPs generally have two classes","page_number":149,"box":{"x":495,"y":537,"width":390,"height":12}},{"id":"0903cd7a-b194-4d36-8f04-1cf53f94425c","block_type":"box","text":"of owners, the general partner","page_number":149,"box":{"x":116,"y":552,"width":224,"height":12}},{"id":"9fc3b887-0996-431a-b614-1d8a00b0a40c","block_type":"box","text":"and limited partners. When investing in an MLP, a Fund intends to","page_number":149,"box":{"x":340,"y":552,"width":486,"height":12}},{"id":"ba3e1d3e-d03f-4976-a78a-15436f90b875","block_type":"box","text":"purchase publicly traded common units issued to limit","page_number":149,"box":{"x":117,"y":568,"width":388,"height":12}},{"id":"25910449-8334-4a02-908e-4273316a0a76","block_type":"box","text":"ed partners of the MLP. The general partner is","page_number":149,"box":{"x":506,"y":568,"width":342,"height":12}},{"id":"490d6404-4dc1-4d2e-a2b2-d9e58e05a2aa","block_type":"box","text":"typically owned by a major energy company, an investm","page_number":149,"box":{"x":116,"y":583,"width":407,"height":12}},{"id":"46da4554-59cd-4c96-a77b-49f2f58b82a0","block_type":"box","text":"ent fund, the direct managem","page_number":149,"box":{"x":525,"y":583,"width":213,"height":12}},{"id":"dbb81822-d217-480c-91fc-b508c2bf6f79","block_type":"box","text":"ent of the MLP or is","page_number":149,"box":{"x":739,"y":583,"width":147,"height":10}},{"id":"82d20329-0599-4d61-8890-1580a065d8a6","block_type":"box","text":"an entity owned by one or more of such parties. The","page_number":149,"box":{"x":116,"y":599,"width":384,"height":12}},{"id":"1d0e7eae-0896-4069-a129-85bf2ccb05f3","block_type":"box","text":"general partner may be structured as a private or","page_number":149,"box":{"x":501,"y":599,"width":361,"height":12}},{"id":"a4f34a88-97bd-427f-80d9-4e602b5b6e73","block_type":"box","text":"publicly traded corporation or other","page_number":149,"box":{"x":117,"y":614,"width":253,"height":12}},{"id":"279f9725-6dd1-410d-8710-f26dced2589d","block_type":"box","text":"r entity. The general partner typically controls the operations and","page_number":149,"box":{"x":370,"y":614,"width":468,"height":12}},{"id":"f23afada-329c-4e48-b0a8-51f47e4552c4","block_type":"box","text":"management of the MLP through an up to 2% equity intere","page_number":149,"box":{"x":117,"y":630,"width":426,"height":12}},{"id":"d6cd1182-c2e9-4090-b064-8702b9a41f92","block_type":"box","text":"st in the MLP plus, in many cases, ownership","page_number":149,"box":{"x":544,"y":630,"width":334,"height":12}},{"id":"b081e185-7888-43cb-9956-f2ce9ed70500","block_type":"box","text":"of common units and subordinated units. Limited partner","page_number":149,"box":{"x":116,"y":645,"width":411,"height":12}},{"id":"fd919b6a-4e5a-4870-8461-03c699631940","block_type":"box","text":"s own the remainder of the partnership, through","page_number":149,"box":{"x":527,"y":645,"width":351,"height":12}},{"id":"2f0d3c7a-b80c-4346-8e50-d98d7e29ce6f","block_type":"box","text":"ownership of common units, and have a limited role","page_number":149,"box":{"x":116,"y":661,"width":375,"height":12}},{"id":"4e9e5d92-fc80-4fbe-ae73-bbdb5688012b","block_type":"box","text":"in the partnership’s operations and management.","page_number":149,"box":{"x":497,"y":661,"width":355,"height":12}},{"id":"043ddc38-bc7d-4b27-a3d0-46dcb1a20c4a","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to","page_number":149,"box":{"x":117,"y":692,"width":764,"height":12}},{"id":"98e23f17-d24b-47cb-a078-b7f66b45972d","block_type":"box","text":"receive quarterly cash distributions up to an established minimum amount (“minimum quarterly","page_number":149,"box":{"x":117,"y":707,"width":701,"height":12}},{"id":"f97a570c-a445-450e-a64e-a3a0ee76feb9","block_type":"box","text":"distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions","page_number":149,"box":{"x":116,"y":723,"width":762,"height":12}},{"id":"101458e3-9494-4590-9c64-16eec15b3c5a","block_type":"box","text":"to the extent the MQD is not paid. Once common and general partner interests have been paid,","page_number":149,"box":{"x":116,"y":738,"width":708,"height":12}},{"id":"33732f4d-0dfa-4075-a5da-111e252a3f8a","block_type":"box","text":"subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue","page_number":149,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"e33a449e-04fe-4a2b-8ae1-babf873c2b01","block_type":"box","text":"arrearages. Distributable cash in excess of the MQD paid to both common and subordinated units is","page_number":149,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"f560e7a4-2be7-4891-9070-e4469c483445","block_type":"box","text":"distributed to both common and subordinated units generally on a pro rata basis. The general partner","page_number":149,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"6aa6a140-99a1-4744-bad9-f0e7d0947d92","block_type":"box","text":"is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":149,"box":{"x":117,"y":800,"width":707,"height":12}},{"id":"97efdf1a-5dd3-489f-b43e-29037f2bb5e4","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the","page_number":149,"box":{"x":117,"y":816,"width":746,"height":12}},{"id":"fe617e6f-65fa-4ace-ab1d-47fee79d91ae","block_type":"box","text":"general partner increases cash distributions to the limited partners, the general partner receives an","page_number":149,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"071c8d16-a695-4b24-8a1a-f6f889c926d6","block_type":"box","text":"increasingly higher percentage of the incremental cash distributions. A common arrangement provides","page_number":149,"box":{"x":117,"y":847,"width":764,"height":12}},{"id":"68df6d93-8189-4768-8369-ab6d4290fcfc","block_type":"box","text":"that the general partner can reach a tier where it receives 50% of every incremental dollar paid to","page_number":149,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"9d25738c-2d62-430f-a1db-9ac470c4081a","block_type":"box","text":"common and subordinated unit holders. These incentive distributions encourage the general partner to","page_number":149,"box":{"x":116,"y":878,"width":767,"height":12}},{"id":"0409323e-1a68-448d-978f-95f9a87fb399","block_type":"box","text":"II-63","page_number":149,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b6d1d88f-60e5-4528-b8b6-b72b4eb7f54b","block_type":"box","text":"NM1026U-6042785-149/259","page_number":149,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"68a7215b-f42f-4d77-87b5-81e41071f5e7","block_type":"box","text":"streamline costs, increase capital expenditures and acquire assets in order to increase the","page_number":150,"box":{"x":116,"y":87,"width":676,"height":12}},{"id":"87705f9d-fe2d-40a6-bfe7-856649705448","block_type":"box","text":"partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such","page_number":150,"box":{"x":117,"y":102,"width":736,"height":13}},{"id":"9af31358-c983-40b1-b88d-a67f13951a96","block_type":"box","text":"results benefit all security holders of the MLP.","page_number":150,"box":{"x":117,"y":118,"width":343,"height":12}},{"id":"c8b232de-c161-4ad5-bcd3-0df981cecd09","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and","page_number":150,"box":{"x":117,"y":148,"width":748,"height":12}},{"id":"c8bf28f8-14aa-4f9a-b6b1-8020320ebc2b","block_type":"box","text":"traded on U.S. securities exchanges, with their value fluctuating predominantly based on prevailing","page_number":150,"box":{"x":116,"y":163,"width":739,"height":13}},{"id":"1d3347aa-b4b8-41e2-976a-5f300b12b30d","block_type":"box","text":"market conditions and the success of the MLP. Certain Funds intend to purchase common units in","page_number":150,"box":{"x":117,"y":179,"width":733,"height":12}},{"id":"c1db4b64-a610-4987-9956-7b53180f1733","block_type":"box","text":"market transactions. Unlike owners of common stock of a corporation, owners of common units have","page_number":150,"box":{"x":117,"y":194,"width":752,"height":12}},{"id":"3750f02c-8f2e-418a-9b77-d923e4e061e4","block_type":"box","text":"limited voting rights and have no ability to annually elect directors. In the event of liquidation, common","page_number":150,"box":{"x":117,"y":210,"width":758,"height":12}},{"id":"ccc2e13e-e417-4d1b-be0f-f1731ab9f2bf","block_type":"box","text":"units have preference over subordinated units, but not over debt or preferred units, to the remaining","page_number":150,"box":{"x":117,"y":225,"width":744,"height":13}},{"id":"7c39be2b-149f-4a17-a216-aa922d9f13c3","block_type":"box","text":"assets of the MLP.","page_number":150,"box":{"x":116,"y":241,"width":144,"height":9}},{"id":"8ffba3ae-b58d-4695-b02a-8f33fc22830b","block_type":"box","text":"Merger Transaction Risk.","page_number":150,"box":{"x":116,"y":271,"width":200,"height":12}},{"id":"e2d541b9-c0f9-4606-9274-ebaa93b0f99c","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger","page_number":150,"box":{"x":317,"y":271,"width":531,"height":12}},{"id":"d5b3012b-2abf-42ab-ab39-ec1679688891","block_type":"box","text":"transaction prior to the consummation of such transaction. In that circumstance, a Fund would expect","page_number":150,"box":{"x":116,"y":286,"width":757,"height":12}},{"id":"885ca9fa-3370-4fea-b280-4f4550ab7ab5","block_type":"box","text":"to receive an amount (whether in cash, stock of the acquiring company or a combination of both) in","page_number":150,"box":{"x":116,"y":302,"width":740,"height":12}},{"id":"53de5121-4033-4d66-836c-c998a346f661","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":150,"box":{"x":116,"y":317,"width":733,"height":12}},{"id":"e2923544-7733-44f7-bf77-c55213b099e1","block_type":"box","text":"subject to the risk that the merger transaction may be canceled, delayed or restructured, in which case","page_number":150,"box":{"x":116,"y":333,"width":766,"height":12}},{"id":"441459f4-f2a3-4e9d-b391-a39db1e8b95b","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":150,"box":{"x":116,"y":348,"width":754,"height":12}},{"id":"6dc65462-d3fd-4001-a506-1edde573b121","block_type":"box","text":"significant value.","page_number":150,"box":{"x":116,"y":364,"width":129,"height":12}},{"id":"151a6b02-91e7-4ce9-8761-629856cac3a2","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S.","page_number":150,"box":{"x":116,"y":394,"width":737,"height":12}},{"id":"6d6b10a9-d18a-4391-909b-1cc997d66194","block_type":"box","text":"Banks.","page_number":150,"box":{"x":116,"y":409,"width":54,"height":10}},{"id":"f8205a2e-d72d-47a7-a248-cac5e78ae6df","block_type":"box","text":"Certain Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’","page_number":150,"box":{"x":171,"y":409,"width":705,"height":12}},{"id":"77a61666-932d-4ebc-a6fb-b1c4ca8228aa","block_type":"box","text":"acceptances and time deposits, including instruments issued or supported by the credit of U.S. or","page_number":150,"box":{"x":116,"y":425,"width":728,"height":12}},{"id":"9dd59904-96e7-4284-a4c7-ef3197f7c267","block_type":"box","text":"foreign banks or savings institutions having total assets at the time of purchase in excess of $1 billion.","page_number":150,"box":{"x":116,"y":440,"width":761,"height":12}},{"id":"bedd191b-d343-4df5-8664-3c2bcced9be6","block_type":"box","text":"These obligations may be general obligations of the parent bank or may be limited to the issuing","page_number":150,"box":{"x":116,"y":456,"width":719,"height":12}},{"id":"b1e4d181-7db8-4904-af8b-c15ea87f67b9","block_type":"box","text":"branch or subsidiary by the terms of a specific obligation or by government regulation. The assets of a","page_number":150,"box":{"x":117,"y":471,"width":761,"height":12}},{"id":"93e5a1c1-5fb8-4efc-a3c7-2b44fca6ddd4","block_type":"box","text":"bank or savings institution will be deemed to include the assets of its domestic and foreign branches","page_number":150,"box":{"x":117,"y":487,"width":747,"height":12}},{"id":"04327bf3-fe05-49c4-b3ba-7c0afce8059c","block_type":"box","text":"for purposes of a Fund’s investment policies. Investments in short-term bank obligations may include","page_number":150,"box":{"x":116,"y":502,"width":753,"height":12}},{"id":"9d666a95-d015-4002-85a7-51edb18cb135","block_type":"box","text":"obligations of foreign banks and domestic branches of foreign banks, and also foreign branches of","page_number":150,"box":{"x":116,"y":518,"width":734,"height":12}},{"id":"5e1d6278-1b6e-44b3-869d-d2da56834bd5","block_type":"box","text":"domestic banks.","page_number":150,"box":{"x":116,"y":533,"width":126,"height":10}},{"id":"a5f970b2-d8c5-4b38-8db4-a1a473fa7452","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of","page_number":150,"box":{"x":116,"y":563,"width":727,"height":12}},{"id":"b491d03a-2fe7-4223-bd68-db3e6492f027","block_type":"box","text":"domestic or foreign corporations and banks, and may acquire commercial obligations issued by","page_number":150,"box":{"x":116,"y":579,"width":713,"height":12}},{"id":"41de5e0a-3796-4889-9c12-3309f0fff2d0","block_type":"box","text":"Canadian corporations and Canadian counterparts of U.S. corporations, as well as Europaper, which is","page_number":150,"box":{"x":117,"y":594,"width":769,"height":12}},{"id":"8a87bb18-0529-4d22-b23d-58b13d673c54","block_type":"box","text":"U.S. dollar-denominated commercial paper of a foreign issuer.","page_number":150,"box":{"x":117,"y":610,"width":466,"height":12}},{"id":"887a28d0-0718-4142-a4e1-2ccfe023396a","block_type":"box","text":"Money Market Securities.","page_number":150,"box":{"x":116,"y":640,"width":201,"height":12}},{"id":"9cab9774-7028-4b93-9abe-e5cd79bd4899","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S.","page_number":150,"box":{"x":318,"y":640,"width":564,"height":12}},{"id":"f9e07e31-974d-4e7e-9e8f-9aed39c1d98c","block_type":"box","text":"dollar-denominated instruments, such as government, bank, commercial and other obligations that are","page_number":150,"box":{"x":116,"y":655,"width":765,"height":12}},{"id":"8129a545-5566-4a4c-9960-74fe6e517434","block_type":"box","text":"available in the money markets. In particular, the Funds may invest in:","page_number":150,"box":{"x":116,"y":671,"width":519,"height":12}},{"id":"74cf34c4-91cf-47cf-87c9-1980cf3daa5c","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks","page_number":150,"box":{"x":150,"y":701,"width":729,"height":12}},{"id":"c8bc2f2c-e40c-4dd6-a92e-4bb02eddb918","block_type":"box","text":"or savings institutions with total assets in excess of $1 billion (including obligations of foreign","page_number":150,"box":{"x":184,"y":715,"width":684,"height":13}},{"id":"44edaebf-233a-4270-b6f8-9a64493f4940","block_type":"box","text":"branches of such banks);","page_number":150,"box":{"x":184,"y":732,"width":186,"height":12}},{"id":"6f0fe382-049b-4601-ae41-95d7e247638b","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign","page_number":150,"box":{"x":150,"y":754,"width":728,"height":12}},{"id":"6ab4e365-e12a-4782-bfd8-a246eee226a8","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":150,"box":{"x":184,"y":770,"width":686,"height":12}},{"id":"44292a50-43a1-4c1f-8a83-3985176f9dc5","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":150,"box":{"x":184,"y":785,"width":681,"height":12}},{"id":"0233e9bf-f073-462d-a9de-5c9a39456332","block_type":"box","text":"(at the time of purchase) A or higher by those rating agencies;","page_number":150,"box":{"x":184,"y":801,"width":459,"height":12}},{"id":"ee85b596-4e64-49e3-ba07-8f41347a9201","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments","page_number":150,"box":{"x":150,"y":823,"width":720,"height":13}},{"id":"aeb22648-2589-49c0-a235-e791c0c98d7a","block_type":"box","text":"described in (b) above as determined by the Fund’s Manager;","page_number":150,"box":{"x":184,"y":839,"width":463,"height":12}},{"id":"329fa4d7-9fde-4a04-a600-f0e3cd13a354","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment","page_number":150,"box":{"x":150,"y":862,"width":730,"height":12}},{"id":"d8c61c3d-da32-4b57-9141-993f8bf3c54f","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":150,"box":{"x":184,"y":877,"width":374,"height":12}},{"id":"ecf15d53-0690-4fed-b4b2-253f6336e974","block_type":"box","text":"II-64","page_number":150,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b548518a-f937-4416-b7f5-d144a1a105ed","block_type":"box","text":"NM1026U-6042785-150/259","page_number":150,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a30a88fe-a2b6-4a32-825c-c488a43febaa","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its","page_number":151,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"8790c3ae-e18d-4280-9c11-615934d3866c","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":151,"box":{"x":184,"y":103,"width":401,"height":12}},{"id":"854fcd57-558c-46fa-ab75-33e1b396486a","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political","page_number":151,"box":{"x":150,"y":126,"width":719,"height":12}},{"id":"6b8619bf-1a8c-49e1-a340-fd81290c465a","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":151,"box":{"x":184,"y":141,"width":279,"height":12}},{"id":"132eb009-dc53-4340-98bf-d988e119e379","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":151,"box":{"x":150,"y":165,"width":561,"height":12}},{"id":"cdb83a0e-35fd-4efc-aa04-cafca0cec53b","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":151,"box":{"x":150,"y":188,"width":560,"height":12}},{"id":"75177dec-6f78-491f-829a-f5b861b73e22","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":151,"box":{"x":150,"y":211,"width":469,"height":12}},{"id":"391171af-5bba-4411-b0e4-5eb535b4950e","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S.","page_number":151,"box":{"x":150,"y":234,"width":736,"height":12}},{"id":"9de27879-7e0a-4980-b69e-198d118ae51b","block_type":"box","text":"Government or one of its agencies or authorities or which otherwise depend directly or","page_number":151,"box":{"x":184,"y":250,"width":646,"height":12}},{"id":"46ac366c-2d9f-4efd-a0e9-93f78d8dff4d","block_type":"box","text":"indirectly on the credit of the United States;","page_number":151,"box":{"x":184,"y":265,"width":325,"height":12}},{"id":"ad5308d0-67a9-4a0c-91be-5fdadcf72fa1","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":151,"box":{"x":150,"y":289,"width":730,"height":12}},{"id":"10780d7e-56fe-4b77-bd52-d9ec5275df06","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":151,"box":{"x":184,"y":304,"width":563,"height":12}},{"id":"a1a5a6a9-7e49-4055-b78e-f4b04993fb5f","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by","page_number":151,"box":{"x":150,"y":327,"width":675,"height":12}},{"id":"b68bccfe-9160-4a47-bc24-95db271e99c8","block_type":"box","text":"Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":151,"box":{"x":184,"y":343,"width":428,"height":12}},{"id":"b4d752ec-629a-4798-8544-2ec8d75d10a8","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":151,"box":{"x":150,"y":366,"width":488,"height":12}},{"id":"70fb44d7-7ba2-42ca-8301-e8f8b5fe9f54","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments","page_number":151,"box":{"x":150,"y":389,"width":713,"height":12}},{"id":"9f374ab2-68a2-4bbe-a6a6-c1b34ea8af81","block_type":"box","text":"described above, as determined by the Fund’s Manager under guidelines established by the","page_number":151,"box":{"x":184,"y":405,"width":688,"height":12}},{"id":"772d570a-590f-4c4c-bbc1-4f6e9e0f645d","block_type":"box","text":"Board; and","page_number":151,"box":{"x":184,"y":420,"width":86,"height":12}},{"id":"b951e6e9-3b41-4573-85d5-f877f551db38","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S.","page_number":151,"box":{"x":150,"y":444,"width":693,"height":12}},{"id":"8d9dd72d-352d-426d-9b49-3ad7c341d485","block_type":"box","text":"Government or an agency or instrumentality thereof or which otherwise depend directly or","page_number":151,"box":{"x":184,"y":459,"width":671,"height":12}},{"id":"24c2b602-4fe4-487c-b58f-a772fd82c8d1","block_type":"box","text":"indirectly on the credit of the United States.","page_number":151,"box":{"x":184,"y":475,"width":325,"height":12}},{"id":"363330e9-03f4-44b4-9f28-eac84bcb1fa0","block_type":"box","text":"Mortgage-Related Securities.","page_number":151,"box":{"x":116,"y":506,"width":236,"height":12}},{"id":"c34a81f1-c6b6-4010-9147-c3450e15357a","block_type":"box","text":"Mortgage-Backed Securities.","page_number":151,"box":{"x":116,"y":529,"width":214,"height":12}},{"id":"95f7b073-16ee-48f1-8ba6-f01cf2d180a7","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in","page_number":151,"box":{"x":332,"y":529,"width":544,"height":12}},{"id":"94e17ef1-3e20-4907-bb11-3c2471a2be17","block_type":"box","text":"which payments of both principal and interest on the securities are generally made monthly, in effect","page_number":151,"box":{"x":116,"y":544,"width":749,"height":12}},{"id":"e2124986-1641-4adb-ab11-d311ac14a2fd","block_type":"box","text":"“passing through” monthly payments made by borrowers on the residential or commercial mortgage","page_number":151,"box":{"x":116,"y":560,"width":745,"height":12}},{"id":"aac045a2-4503-4698-a975-51c00a8fecef","block_type":"box","text":"loans that underlie the securities (net of any fees paid to the issuer or guarantor of the securities).","page_number":151,"box":{"x":117,"y":575,"width":728,"height":12}},{"id":"da5665ca-c49e-4afe-9552-01ad77cfe1c1","block_type":"box","text":"Mortgage-backed securities differ from other forms of debt securities, which normally provide for","page_number":151,"box":{"x":117,"y":591,"width":718,"height":12}},{"id":"d8869c9a-506b-41b6-9171-0eb0ffdd5605","block_type":"box","text":"periodic payment of interest in fixed amounts with principal payments at maturity or specified call","page_number":151,"box":{"x":117,"y":606,"width":721,"height":12}},{"id":"8fd7adc7-a18b-4ac9-9890-c8fe7ea9445d","block_type":"box","text":"dates.","page_number":151,"box":{"x":116,"y":622,"width":50,"height":9}},{"id":"77e2cf20-0e5d-4e21-b430-d0433e523464","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate","page_number":151,"box":{"x":117,"y":653,"width":736,"height":12}},{"id":"2ec9be2e-93f9-45a9-988f-a714237b1d39","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":151,"box":{"x":116,"y":668,"width":718,"height":12}},{"id":"9885f4ad-b10f-477c-888b-f7fa6b2cd5c8","block_type":"box","text":"mortgages relates declines. In addition, investments in mortgage-backed securities involve certain","page_number":151,"box":{"x":117,"y":684,"width":726,"height":12}},{"id":"3668f5b1-a338-45b5-a303-2df9dfd37e34","block_type":"box","text":"specific risks. These risks include the failure of a party to meet its commitments under the related","page_number":151,"box":{"x":116,"y":699,"width":720,"height":13}},{"id":"52c3c790-cb4c-44df-ad71-c35e0c547469","block_type":"box","text":"operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash","page_number":151,"box":{"x":116,"y":715,"width":762,"height":12}},{"id":"369e3ade-63e0-4268-96ed-a737aec7bfdd","block_type":"box","text":"flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest","page_number":151,"box":{"x":116,"y":730,"width":740,"height":13}},{"id":"cb2e093f-b8a3-4add-8dff-6cd567ef234a","block_type":"box","text":"payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":151,"box":{"x":117,"y":746,"width":687,"height":12}},{"id":"966e1856-4bd4-4076-a77f-0c035d296f36","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly","page_number":151,"box":{"x":116,"y":761,"width":720,"height":13}},{"id":"6771b41f-ecb0-4449-a4ab-bbba647512cc","block_type":"box","text":"sensitive to changes in prevailing interest rates, and, like other fixed income investments, the ability of","page_number":151,"box":{"x":116,"y":777,"width":757,"height":12}},{"id":"c9cdabd1-a290-4bd5-9a9c-013f8e7e7792","block_type":"box","text":"a Fund to utilize these instruments successfully may depend in part upon the ability of the Manager to","page_number":151,"box":{"x":116,"y":792,"width":754,"height":13}},{"id":"919c9184-84eb-4636-b49f-7b8c56bc06f8","block_type":"box","text":"forecast interest rates and other economic factors correctly. The value of mortgage-backed securities,","page_number":151,"box":{"x":116,"y":808,"width":755,"height":12}},{"id":"68dc75f9-1f76-44a0-84a1-db9e4581590a","block_type":"box","text":"like that of traditional fixed-income securities, typically increases when interest rates fall and decreases","page_number":151,"box":{"x":117,"y":823,"width":762,"height":13}},{"id":"1e753a12-133c-41f4-af23-d40e59eb84dd","block_type":"box","text":"when interest rates rise. However, mortgage-backed securities differ from traditional fixed-income","page_number":151,"box":{"x":116,"y":839,"width":729,"height":12}},{"id":"e2a1efe3-4c1c-4736-a74b-66b0eac5a724","block_type":"box","text":"securities because of their potential for prepayment without penalty. The price paid by a Fund for its","page_number":151,"box":{"x":116,"y":854,"width":745,"height":13}},{"id":"333cb9a6-ffdc-412e-a6d0-e26fee51ebc9","block_type":"box","text":"mortgage-backed securities, the yield the Fund expects to receive from such securities and the","page_number":151,"box":{"x":117,"y":870,"width":709,"height":12}},{"id":"62775701-48d5-4e75-8908-e8829c35c038","block_type":"box","text":"II-65","page_number":151,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7d2082e2-74ea-4b6c-a182-c221b9a269a2","block_type":"box","text":"NM1026U-6042785-151/259","page_number":151,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cf30d937-aadb-41d0-89d0-0ae6e486584c","block_type":"box","text":"weighted average life of the securities are based on a number of factors, including the anticipated rate","page_number":152,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"35b3a381-5646-42cf-98be-7b9de638f461","block_type":"box","text":"of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may","page_number":152,"box":{"x":116,"y":102,"width":727,"height":13}},{"id":"78e5551d-43e8-40b0-898f-87c942f82b2d","block_type":"box","text":"prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity","page_number":152,"box":{"x":117,"y":118,"width":757,"height":12}},{"id":"09b83628-ff1b-42f4-a876-b2920e3fd4cc","block_type":"box","text":"and the average life of the mortgage-backed securities. Moreover, when a Fund reinvests the proceeds","page_number":152,"box":{"x":116,"y":134,"width":772,"height":12}},{"id":"eaa9e1d8-7d00-4ff0-9421-c26fc309f041","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":152,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"6faa952c-b9c9-4639-bf93-c633e295d680","block_type":"box","text":"on the security that was prepaid.","page_number":152,"box":{"x":116,"y":165,"width":247,"height":12}},{"id":"2d0a656c-0186-4f1d-ab1d-4cc126bde706","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures","page_number":152,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"09a529ec-59fe-495d-825a-e656231c38ca","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":152,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"6ea9ff11-e9ef-40b0-8649-6a57db326d33","block_type":"box","text":"securities at a discount, both scheduled payments of principal and unscheduled prepayments will","page_number":152,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"4bb6f1ee-d3c2-47f6-b1aa-6c3c84201866","block_type":"box","text":"increase current and total returns and will accelerate the recognition of income, which, when distributed","page_number":152,"box":{"x":117,"y":242,"width":771,"height":12}},{"id":"f96009ba-0948-4e8e-bb5d-d9cacc74a299","block_type":"box","text":"to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of","page_number":152,"box":{"x":116,"y":258,"width":762,"height":12}},{"id":"8fc31f9a-53a6-46f5-b9c3-c5866f3afb25","block_type":"box","text":"the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk.","page_number":152,"box":{"x":116,"y":273,"width":753,"height":12}},{"id":"be9af2f4-67db-4fd0-aabe-62eb37ffb84b","block_type":"box","text":"This particular risk may effectively change a security that was considered short- or intermediate-term at","page_number":152,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"2da32375-4ecf-43df-b1a5-7f7775430f72","block_type":"box","text":"the time of purchase into a long-term security. Since the value of long-term securities generally","page_number":152,"box":{"x":116,"y":304,"width":709,"height":12}},{"id":"aa2a74a6-95ae-4435-951e-41e5d8048a7d","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than that of shorter-term securities,","page_number":152,"box":{"x":116,"y":320,"width":736,"height":12}},{"id":"196b2826-5ea0-4b9b-83a1-1433b1c330d3","block_type":"box","text":"maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":152,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"0106bec2-7687-443f-86d5-6eb64bbd8cfb","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities","page_number":152,"box":{"x":117,"y":351,"width":740,"height":12}},{"id":"d7429de5-db19-4e17-8e3a-b2db0c15d707","block_type":"box","text":"notwithstanding any direct or indirect governmental or agency guarantee.","page_number":152,"box":{"x":117,"y":366,"width":547,"height":12}},{"id":"9c3c3755-7287-4e4f-be79-b57fe2147408","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S.","page_number":152,"box":{"x":116,"y":397,"width":725,"height":12}},{"id":"96bdd1b7-3b89-47e1-ac63-3acc1b6793cc","block_type":"box","text":"Government or one of its agencies or instrumentalities, such as the Government National Mortgage","page_number":152,"box":{"x":117,"y":413,"width":742,"height":12}},{"id":"dd2639a5-d64a-4c96-9be0-3ee808134d95","block_type":"box","text":"Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal","page_number":152,"box":{"x":116,"y":428,"width":770,"height":12}},{"id":"0ea4c41e-4690-48bb-9727-e9e22a61d646","block_type":"box","text":"Home Loan Mortgage Corporation (“Freddie Mac”); (2) those issued by private issuers that represent","page_number":152,"box":{"x":117,"y":444,"width":753,"height":12}},{"id":"84c01362-a9e2-4c51-98e8-fd31e350d9b2","block_type":"box","text":"an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S.","page_number":152,"box":{"x":116,"y":459,"width":704,"height":12}},{"id":"82f6f3aa-5c6f-44d2-958d-a91f59b8a3e7","block_type":"box","text":"Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that","page_number":152,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"22542920-397f-417d-b602-13ca84fad1a4","block_type":"box","text":"represent an interest in or are collateralized by whole mortgage loans or pass-through securities","page_number":152,"box":{"x":117,"y":490,"width":717,"height":12}},{"id":"f57ac8fe-8947-4982-ae9f-490154b1c3af","block_type":"box","text":"without a government guarantee but that usually have some form of private credit enhancement.","page_number":152,"box":{"x":116,"y":506,"width":720,"height":12}},{"id":"0f904fa1-c34d-4eb4-9c3c-8a013f02ca23","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and","page_number":152,"box":{"x":117,"y":537,"width":736,"height":12}},{"id":"cff282d8-fda0-4077-971c-136a8695e018","block_type":"box","text":"Urban Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S.","page_number":152,"box":{"x":117,"y":552,"width":741,"height":12}},{"id":"657b98c2-b45c-4536-8a89-22b2aa580996","block_type":"box","text":"Government, the timely payment of principal and interest on securities issued by the institutions","page_number":152,"box":{"x":117,"y":568,"width":713,"height":12}},{"id":"3ad706d4-1d67-4555-8299-33a3081417d8","block_type":"box","text":"approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage","page_number":152,"box":{"x":116,"y":583,"width":725,"height":12}},{"id":"e5c80bd6-30a9-4f97-b551-95fd566a70b2","block_type":"box","text":"banks), and backed by pools of Federal Housing Administration (“FHA”)-insured or Veterans’","page_number":152,"box":{"x":117,"y":599,"width":693,"height":12}},{"id":"a6d7fab5-a8ee-4f37-aa7f-7d2e4f0b86d2","block_type":"box","text":"Administration (“VA”)-guaranteed mortgages. Pass-through certificates guaranteed by Ginnie Mae","page_number":152,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"7385a55c-c2f8-4711-abc3-18586a491e66","block_type":"box","text":"(such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely payment of","page_number":152,"box":{"x":117,"y":630,"width":711,"height":12}},{"id":"865cec58-be78-486e-a6e6-4df15d24db49","block_type":"box","text":"principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the","page_number":152,"box":{"x":117,"y":645,"width":725,"height":12}},{"id":"8f796d39-35c5-4120-a8eb-5254edcbbe6f","block_type":"box","text":"United States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow","page_number":152,"box":{"x":117,"y":661,"width":729,"height":12}},{"id":"6d311919-11c6-4949-aa2b-5cbe80b9c2d1","block_type":"box","text":"funds from the U.S. Treasury Department to make payments under its guarantee. Mortgage-related","page_number":152,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"b7eaf27a-db01-412b-941f-894894126658","block_type":"box","text":"securities issued by Fannie Mae include Fannie Mae guaranteed Mortgage Pass-Through Certificates","page_number":152,"box":{"x":116,"y":692,"width":756,"height":12}},{"id":"2662cea8-7c1f-46d9-b92e-aa47daafa2ef","block_type":"box","text":"(also known as “Fannie Maes”), which are guaranteed as to timely payment of principal and interest by","page_number":152,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"0f8a4e0e-4274-4328-97e2-0f88019479d8","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":152,"box":{"x":117,"y":723,"width":754,"height":12}},{"id":"af19524b-28d5-4ac0-beb4-09ee681e7bd1","block_type":"box","text":"supported by the right of Fannie Mae to borrow from the U.S. Treasury Department. Fannie Mae was","page_number":152,"box":{"x":116,"y":738,"width":750,"height":12}},{"id":"21f4c5cd-f6c8-4601-abcd-d0080c818783","block_type":"box","text":"established as a federal agency in 1938 and in 1968 was chartered by Congress as a private","page_number":152,"box":{"x":116,"y":754,"width":690,"height":12}},{"id":"3e568c9b-c954-4316-a445-59b365054fcf","block_type":"box","text":"shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":152,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"a0130347-b43f-4369-919d-b3e12e99a8f5","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a","page_number":152,"box":{"x":117,"y":785,"width":697,"height":12}},{"id":"0759c82d-e45d-4597-816e-949922e0b3d8","block_type":"box","text":"stockholder-owned corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by","page_number":152,"box":{"x":116,"y":800,"width":745,"height":12}},{"id":"8513671a-0340-47a8-b0ab-a6c0524a3ba9","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":152,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"585af5d5-c5fc-4f19-ba26-78fed73bc2a5","block_type":"box","text":"United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of","page_number":152,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"f1993d2f-eba9-4c9c-802b-1a0159eaf42f","block_type":"box","text":"interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or","page_number":152,"box":{"x":117,"y":847,"width":735,"height":12}},{"id":"c6c3df9c-8871-427d-9afb-f7a083f25398","block_type":"box","text":"timely payment of all principal payments on the underlying mortgage loans. While Freddie Mac","page_number":152,"box":{"x":116,"y":862,"width":707,"height":12}},{"id":"54c6a56f-cb00-42fa-9d91-1c1e58ffc25a","block_type":"box","text":"generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due on","page_number":152,"box":{"x":116,"y":878,"width":753,"height":12}},{"id":"43ea984f-3308-4558-8b8b-256571092bde","block_type":"box","text":"II-66","page_number":152,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9004f6eb-fe3b-40d9-9f4c-53e5f15c240e","block_type":"box","text":"NM1026U-6042785-152/259","page_number":152,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9da5bcad-961d-4e75-a2d3-c5a2fb2a3df4","block_type":"box","text":"account of its guarantee of ultimate payment of principal at any time after default on an underlying","page_number":153,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"d3ca6a15-ff5d-472a-bb03-abfd77b27799","block_type":"box","text":"mortgage, but in no event later than one year after it becomes payable.","page_number":153,"box":{"x":117,"y":102,"width":532,"height":13}},{"id":"9d1e2334-7927-4465-bd95-213d48d93899","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and","page_number":153,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"b30282d6-1d28-4a53-a549-7094e3854922","block_type":"box","text":"Freddie Mac mortgage pass-through securities and are issued by originators of and investors in","page_number":153,"box":{"x":117,"y":149,"width":714,"height":12}},{"id":"4206fe37-23d5-4521-be39-01a6bec3a236","block_type":"box","text":"mortgage loans, including depository institutions, mortgage banks, investment banks and special","page_number":153,"box":{"x":117,"y":165,"width":722,"height":12}},{"id":"692e4355-7640-4099-827d-96f25df702ab","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":153,"box":{"x":117,"y":180,"width":284,"height":12}},{"id":"1d7a8ef6-bbc4-4b7c-a1c9-b879388fd3af","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than","page_number":153,"box":{"x":117,"y":211,"width":747,"height":12}},{"id":"38eaf4f7-ced1-49e7-a6e1-891b6a8d4a84","block_type":"box","text":"government and government-related pools because there are no direct or indirect government or","page_number":153,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"13fbe4b2-f41b-4ca4-a0fc-cbd1a674b77e","block_type":"box","text":"agency guarantees of payments in the private pools. However, timely payment of interest and principal","page_number":153,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"cab5dc22-530a-4558-8d72-124f84e53ccd","block_type":"box","text":"of these pools may be supported by various forms of insurance or guarantees, including individual","page_number":153,"box":{"x":116,"y":258,"width":732,"height":12}},{"id":"d35c03a9-8d57-4dfe-a7c2-52462a5826e5","block_type":"box","text":"loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by","page_number":153,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"f75f58aa-7fee-482c-ae93-db9cf03866e0","block_type":"box","text":"governmental entities, private insurers and the mortgage poolers. The insurance and guarantees and","page_number":153,"box":{"x":116,"y":289,"width":756,"height":12}},{"id":"e53535ab-7f91-40db-b0e6-588c4679bc3f","block_type":"box","text":"the creditworthiness of the issuers thereof will be considered in determining whether a mortgage","page_number":153,"box":{"x":116,"y":304,"width":720,"height":12}},{"id":"c4dd9227-5019-4b39-a756-e8e16d13774f","block_type":"box","text":"related security meets a Fund’s investment quality standards. There can be no assurance that the","page_number":153,"box":{"x":117,"y":320,"width":731,"height":12}},{"id":"5fb37326-8a6b-4452-aca0-35ab3d954e5a","block_type":"box","text":"private insurers or guarantors can meet their obligations under the insurance policies or guarantee","page_number":153,"box":{"x":117,"y":335,"width":734,"height":12}},{"id":"9a42151d-b910-469f-8f43-9bf9aa07e229","block_type":"box","text":"arrangements. Private mortgage pass-through securities may be bought without insurance or","page_number":153,"box":{"x":116,"y":351,"width":696,"height":12}},{"id":"a7a17390-9806-40f3-a811-17f20cad8d03","block_type":"box","text":"guarantees if, through an examination of the loan experience and practices of the originator/servicers","page_number":153,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"795f5b1c-afd8-41f9-8834-6e6cf8cae2b8","block_type":"box","text":"and poolers, the Manager determines that the securities meet a Fund’s quality standards. Any","page_number":153,"box":{"x":116,"y":382,"width":703,"height":12}},{"id":"9eed58d6-48ab-4d7c-808a-f3c69c43ff4d","block_type":"box","text":"mortgage-related securities that are issued by private issuers have some exposure to subprime loans","page_number":153,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"9f6cdb23-a586-41c3-9269-f2ad86f4cca1","block_type":"box","text":"as well as to the mortgage and credit markets generally.","page_number":153,"box":{"x":116,"y":413,"width":422,"height":12}},{"id":"6a973e4b-a1e5-48ac-a00d-535c8ecc0062","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the","page_number":153,"box":{"x":117,"y":444,"width":707,"height":12}},{"id":"905e621c-b532-4fcd-9da2-0a918ab2deb2","block_type":"box","text":"underwriting requirements for the underlying mortgages that are applicable to those mortgage-related","page_number":153,"box":{"x":117,"y":459,"width":757,"height":12}},{"id":"a1302964-236e-4de9-bfea-dcfcab2948e7","block_type":"box","text":"securities that have a government or government-sponsored entity guarantee. As a result, the","page_number":153,"box":{"x":116,"y":475,"width":702,"height":12}},{"id":"b2c69184-d7d3-4f3c-9eba-420844293e99","block_type":"box","text":"mortgage loans underlying private mortgage-related securities may, and frequently do, have less","page_number":153,"box":{"x":117,"y":490,"width":722,"height":12}},{"id":"6b02dac4-3391-4c9f-a9a2-ce7c5a305f18","block_type":"box","text":"favorable collateral, credit risk or other underwriting characteristics than government or government","page_number":153,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"cb9c649f-4f51-4de7-87e3-809808fb0d45","block_type":"box","text":"sponsored mortgage-related securities and have wider variances in a number of terms including","page_number":153,"box":{"x":116,"y":521,"width":717,"height":12}},{"id":"87780ced-e484-4225-9483-bb2110334373","block_type":"box","text":"interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently","page_number":153,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"b6b67ecb-9775-49d4-8bf2-998891d46032","block_type":"box","text":"include second mortgages, high loan-to-value mortgages and manufactured housing loans. The","page_number":153,"box":{"x":117,"y":552,"width":714,"height":12}},{"id":"ec246100-fb6f-4dbe-ba23-cfcdf5d6a423","block_type":"box","text":"coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-related","page_number":153,"box":{"x":116,"y":568,"width":723,"height":12}},{"id":"7fa463a8-d621-4ea7-8df3-42206a935be0","block_type":"box","text":"securities pool may vary to a greater extent than those included in a government guaranteed pool, and","page_number":153,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"e295d026-245c-47d4-a976-f50736aca609","block_type":"box","text":"the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with","page_number":153,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"5e6887b2-cedd-4db7-a153-0ec2433a4861","block_type":"box","text":"weakened credit histories or with a lower capacity to make timely payments on their loans. For these","page_number":153,"box":{"x":116,"y":614,"width":751,"height":12}},{"id":"d9e64eea-e8b3-4afd-825c-1bd12cd9f490","block_type":"box","text":"reasons, the loans underlying these securities have had in many cases higher default rates than those","page_number":153,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"922dace9-2c4e-449a-9c32-520377dcb8b3","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":153,"box":{"x":117,"y":645,"width":416,"height":12}},{"id":"d972033f-93cb-4dd5-9276-65e40f4d850d","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools","page_number":153,"box":{"x":116,"y":676,"width":753,"height":12}},{"id":"f26aa38b-cfdd-4c64-8796-df2831ad2d93","block_type":"box","text":"that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting","page_number":153,"box":{"x":116,"y":692,"width":740,"height":12}},{"id":"aa54f127-431a-4865-8229-9032b2f4057e","block_type":"box","text":"mortgage loan repayments may include a general economic turndown, high unemployment, a general","page_number":153,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"a5badb0b-1b92-404d-9215-127fd298e61d","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":153,"box":{"x":116,"y":723,"width":763,"height":12}},{"id":"2059d695-72b9-4cae-b6f0-4495f5c0b429","block_type":"box","text":"rates resulting in higher mortgage payments by holders of adjustable rate mortgages.","page_number":153,"box":{"x":117,"y":738,"width":631,"height":12}},{"id":"295028e2-b660-4b62-b987-0325d13a4453","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited","page_number":153,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"7185ed91-9d97-4a6d-a7de-6dac1bdff02f","block_type":"box","text":"market for the securities, especially when there is a perceived weakness in the mortgage and real","page_number":153,"box":{"x":117,"y":785,"width":724,"height":12}},{"id":"e6e686a6-e006-4d76-a410-9c7a4aad1667","block_type":"box","text":"estate market sectors. Without an active trading market, mortgage-related securities held in a Fund’s","page_number":153,"box":{"x":116,"y":800,"width":748,"height":12}},{"id":"09b19ca2-9a46-4350-8184-bde0c1e79478","block_type":"box","text":"portfolio may be particularly difficult to value because of the complexities involved in assessing the","page_number":153,"box":{"x":117,"y":816,"width":729,"height":12}},{"id":"b26f6ba1-b9c5-447d-a679-03a687ae9b79","block_type":"box","text":"value of the underlying mortgage loans.","page_number":153,"box":{"x":116,"y":831,"width":299,"height":12}},{"id":"be80ba36-8e5c-4ad8-8922-c13ee3f9600c","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":153,"box":{"x":117,"y":862,"width":343,"height":12}},{"id":"45cf493b-6a4a-4a1e-81d4-eb3acff060d7","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":153,"box":{"x":462,"y":862,"width":415,"height":12}},{"id":"79399975-1010-42b0-af02-0cac648bfd8b","block_type":"box","text":"or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest","page_number":153,"box":{"x":116,"y":878,"width":762,"height":12}},{"id":"825de6dd-eb99-4293-857c-e3f40cdd6f87","block_type":"box","text":"II-67","page_number":153,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d44adbb5-6a9d-46af-9e11-2609d4fbbef6","block_type":"box","text":"NM1026U-6042785-153/259","page_number":153,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"87f40840-52ad-4c38-98d8-cbf70d8630d5","block_type":"box","text":"and prepaid principal are generally paid monthly. CMOs may be collateralized by whole mortgage","page_number":154,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"604f7039-4d3c-400c-9d2c-a4dc2c68927b","block_type":"box","text":"loans or private mortgage pass-through securities but are more typically collateralized by portfolios of","page_number":154,"box":{"x":117,"y":102,"width":755,"height":13}},{"id":"3e4d8351-cdd3-4c5a-a4b3-d781dbfad96b","block_type":"box","text":"mortgage pass-through securities guaranteed by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer","page_number":154,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"558e760b-740d-4ed2-a73d-4464480eb139","block_type":"box","text":"of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (“REMIC”).","page_number":154,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"55480006-df6f-4b73-b06f-e60c107ca7ed","block_type":"box","text":"All future references to CMOs also include REMICs.","page_number":154,"box":{"x":116,"y":149,"width":392,"height":10}},{"id":"f1616338-ab62-4359-b2b7-2005b05e59f2","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific","page_number":154,"box":{"x":117,"y":180,"width":746,"height":12}},{"id":"e1a2baa8-e6bb-4dbe-851d-14b34e0f1e26","block_type":"box","text":"adjustable or fixed interest rate, and bearing a different stated maturity date and each must be fully","page_number":154,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"f011a4fe-94c6-4bd8-9bb6-8bfa18411aaa","block_type":"box","text":"retired no later than its final distribution date. Actual maturity and average life will depend upon the","page_number":154,"box":{"x":117,"y":211,"width":734,"height":12}},{"id":"a8c61aef-bcca-4a80-852c-6606ba9a264c","block_type":"box","text":"prepayment experience of the collateral, which is ordinarily unrelated to the stated maturity date.","page_number":154,"box":{"x":117,"y":227,"width":719,"height":12}},{"id":"6226445e-8fbc-468f-a084-5cbb36acab02","block_type":"box","text":"CMOs often provide for a modified form of call protection through a de facto breakdown of the","page_number":154,"box":{"x":117,"y":242,"width":700,"height":12}},{"id":"01a9f3d1-2f5f-41c3-9b67-1a97d9a52363","block_type":"box","text":"underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of","page_number":154,"box":{"x":117,"y":258,"width":718,"height":12}},{"id":"45ad3467-2f16-40f5-8546-2d05fd50dd7f","block_type":"box","text":"principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":154,"box":{"x":117,"y":273,"width":740,"height":12}},{"id":"3e72608d-3a38-40ac-a041-41511428c34e","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually","page_number":154,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"6b56ad7d-36f2-4934-873f-6cafdea6c10b","block_type":"box","text":"receive principal only after the first class has been retired. An investor may be partially protected","page_number":154,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"eda8a955-9123-4144-a94f-5398e859c605","block_type":"box","text":"against a sooner than desired return of principal because of the sequential payments.","page_number":154,"box":{"x":116,"y":320,"width":640,"height":12}},{"id":"f255f4db-dda3-4635-ad5c-a936a7e09661","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":154,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"e3e99699-9be8-4a3c-8060-e76096f9e510","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by","page_number":154,"box":{"x":117,"y":366,"width":771,"height":12}},{"id":"927cc94d-39fe-460d-a8b5-710861863c23","block_type":"box","text":"the Investment Company Act on investments by a Fund in other investment companies. In addition, in","page_number":154,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"bc95072a-60dd-4277-8f9d-d9a7e1d0f015","block_type":"box","text":"reliance on an earlier Commission interpretation, a Fund’s investments in certain other qualifying","page_number":154,"box":{"x":117,"y":397,"width":721,"height":12}},{"id":"4357730e-1006-4222-ac9a-1dbd6e38a407","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":154,"box":{"x":117,"y":413,"width":753,"height":12}},{"id":"392af320-53da-49cf-a0ed-45487a2c0b9f","block_type":"box","text":"Company Act on acquiring interests in other investment companies. In order to be able to rely on the","page_number":154,"box":{"x":117,"y":428,"width":750,"height":12}},{"id":"7515e3f2-5c32-48a5-aaae-4c2eebcfc72e","block_type":"box","text":"Commission’s interpretation, these CMOs must be unmanaged, fixed asset issuers, that: (1) invest","page_number":154,"box":{"x":117,"y":444,"width":736,"height":12}},{"id":"f908a087-91b7-4fd9-9302-a34a13e61f0f","block_type":"box","text":"primarily in mortgage-backed securities; (2) do not issue redeemable securities; (3) operate under","page_number":154,"box":{"x":117,"y":459,"width":730,"height":12}},{"id":"2da608d5-b50b-4562-9189-b5c2ad66f7ec","block_type":"box","text":"general exemptive orders exempting them from all provisions of the Investment Company Act; and","page_number":154,"box":{"x":116,"y":475,"width":736,"height":12}},{"id":"23c04826-963a-4e14-90fe-ddf7b35f7967","block_type":"box","text":"(4) are not registered or regulated under the Investment Company Act as investment companies. To","page_number":154,"box":{"x":117,"y":490,"width":748,"height":12}},{"id":"fff41dc4-b3ab-4097-8901-bfbb07dd5bbf","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":154,"box":{"x":116,"y":506,"width":674,"height":12}},{"id":"08e5204d-6167-481e-af0c-a02a93d85943","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":154,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"1d1712b3-91f2-4708-89e8-ec5510cd4cc9","block_type":"box","text":"acquire more than 3% of the voting securities of any single such entity.","page_number":154,"box":{"x":116,"y":537,"width":530,"height":12}},{"id":"a674ea5f-cbf9-41d8-b2e1-2f6898d63a9d","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating","page_number":154,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"2eb9688e-aaac-400b-b12a-3e6899fd8338","block_type":"box","text":"rate CMOs. Parallel pay CMOs are structured to provide payments of principal on each payment date","page_number":154,"box":{"x":117,"y":583,"width":757,"height":12}},{"id":"23a1e015-2a1f-4910-ba8b-7106b47d268c","block_type":"box","text":"to more than one class, concurrently on a proportionate or disproportionate basis. These simultaneous","page_number":154,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"360705d7-b8d0-4a7d-a9b6-e883075fa9a2","block_type":"box","text":"payments are taken into account in calculating the final distribution date of each class. Sequential pay","page_number":154,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"45e80aba-60ff-44bf-b524-ef62af03d319","block_type":"box","text":"CMOs generally pay principal to only one class at a time while paying interest to several classes. A","page_number":154,"box":{"x":117,"y":630,"width":739,"height":12}},{"id":"6f0f7ff1-395a-4d25-9e1f-528d6d35b5f5","block_type":"box","text":"wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures.","page_number":154,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"80823a00-e34f-4d80-a945-d19d3b0ff3a4","block_type":"box","text":"These securities include accrual certificates (also known as “Z-Bonds”), which only accrue interest at a","page_number":154,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"3e9e2484-ffd9-46ce-b97e-61fda7977618","block_type":"box","text":"specified rate until all other certificates having an earlier final distribution date have been retired and","page_number":154,"box":{"x":116,"y":676,"width":740,"height":12}},{"id":"5607e7d4-6409-4a2e-9569-8e1f5f48f456","block_type":"box","text":"are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose","page_number":154,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"c7ac5b95-5ab2-4a45-a4d0-9df38d84826a","block_type":"box","text":"coupon rate fluctuates according to some formula related to an existing market index or rate. Typical","page_number":154,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"f7ca2ff8-cd65-4b53-b8e6-dad79d429f20","block_type":"box","text":"indices would include the eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and","page_number":154,"box":{"x":117,"y":723,"width":753,"height":12}},{"id":"8cc849cc-81ab-4efc-81d9-55b8b0113b77","block_type":"box","text":"ten-year Treasury yields.","page_number":154,"box":{"x":116,"y":738,"width":184,"height":12}},{"id":"bcb078ee-2ef6-4f2d-862f-8cd948316d61","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization classes","page_number":154,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"77249218-54d4-4bea-8f80-e5f597e17684","block_type":"box","text":"(“TACs”). PAC bonds generally require payments of a specified amount of principal on each payment","page_number":154,"box":{"x":117,"y":785,"width":742,"height":12}},{"id":"6f8a06f9-4a03-4d6d-8ac2-145819182a91","block_type":"box","text":"date. The scheduled principal payments for PAC Certificates generally have the highest priority on each","page_number":154,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"4d037072-3826-4cd3-8304-3ec5d89b0f8b","block_type":"box","text":"payment date after interest due has been paid to all classes entitled to receive interest currently.","page_number":154,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"b872fe00-78c2-4258-b9b8-bd2782b6a4cb","block_type":"box","text":"Shortfalls, if any, are added to the amount payable on the next payment date. The PAC Certificate","page_number":154,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"0d119cf4-8e5a-43c5-a0c9-b5e323fc2c4c","block_type":"box","text":"payment schedule is taken into account in calculating the final distribution date of each class of PAC. In","page_number":154,"box":{"x":117,"y":847,"width":763,"height":12}},{"id":"c1b3213b-263f-4fce-9f73-19c046a42237","block_type":"box","text":"order to create PAC tranches, one or more tranches generally must be created that absorb most of the","page_number":154,"box":{"x":116,"y":862,"width":759,"height":12}},{"id":"a02116ae-1d7a-484b-bdfd-7151cd547312","block_type":"box","text":"II-68","page_number":154,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cb0a1228-a1e9-48b0-8e58-aa86503770e6","block_type":"box","text":"NM1026U-6042785-154/259","page_number":154,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2c059673-b5e1-4501-bf3b-980d990574ff","block_type":"box","text":"volatility in the underlying mortgage assets. These tranches (often called “supports” or “companion”","page_number":155,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"7b291c68-5c01-4e5f-92b5-802f4b66796f","block_type":"box","text":"tranches) tend to have market prices and yields that are more volatile than the PAC classes.","page_number":155,"box":{"x":116,"y":102,"width":683,"height":13}},{"id":"494cb290-83b7-47dc-ad88-2434946e52c5","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each","page_number":155,"box":{"x":116,"y":131,"width":745,"height":12}},{"id":"81c61a85-6b9b-4d0f-83fd-dda596f2028a","block_type":"box","text":"payment date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however,","page_number":155,"box":{"x":117,"y":146,"width":738,"height":12}},{"id":"1b953c9b-481f-4ecf-a7a4-e9ec1d9e3801","block_type":"box","text":"remains in effect as long as prepayment rates on the underlying mortgages do not exceed certain","page_number":155,"box":{"x":117,"y":162,"width":728,"height":12}},{"id":"2a17a57b-840d-4d33-bd8a-248536f2b1ce","block_type":"box","text":"ranges. In contrast, a TAC provides investors with protection, to a certain level, against either faster","page_number":155,"box":{"x":117,"y":177,"width":743,"height":12}},{"id":"5d0d3b2b-29e1-496f-80e1-80f5da047458","block_type":"box","text":"than expected or slower than expected prepayment rates, but not both. TACs thus provide more cash","page_number":155,"box":{"x":116,"y":193,"width":759,"height":12}},{"id":"4631a0f7-771c-4fb6-8a7b-d1f32ada3ddc","block_type":"box","text":"flow stability than a regular sequential paying class, but less than a PAC. TACs also tend to have","page_number":155,"box":{"x":116,"y":208,"width":725,"height":12}},{"id":"91665287-e86e-43cf-981c-4caa0d07b523","block_type":"box","text":"market prices and yields that are more volatile than PACs.","page_number":155,"box":{"x":117,"y":224,"width":437,"height":12}},{"id":"037026db-3698-4c51-b031-72bba9312a48","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":155,"box":{"x":115,"y":252,"width":277,"height":12}},{"id":"ef8cb5d8-26a7-4f61-90e4-8bb1de7ecaed","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through","page_number":155,"box":{"x":393,"y":252,"width":479,"height":12}},{"id":"0d71fb71-a345-4805-92d6-ae403b2f1c79","block_type":"box","text":"securities collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for","page_number":155,"box":{"x":116,"y":268,"width":706,"height":12}},{"id":"64ee830c-519a-4f94-91d9-72dcfda8be82","block_type":"box","text":"inclusion in a mortgage pool generally provide for a fixed initial mortgage interest rate for a set number","page_number":155,"box":{"x":117,"y":283,"width":764,"height":12}},{"id":"62adb110-48d5-45a4-aeb6-b7fd22b78b01","block_type":"box","text":"of scheduled monthly payments. After that schedule of payments has been completed, the interest","page_number":155,"box":{"x":116,"y":299,"width":736,"height":12}},{"id":"f8393c6b-82bf-4018-84d5-c1f1d46c880f","block_type":"box","text":"rates are subject to periodic adjustment based on changes to a designated benchmark index.","page_number":155,"box":{"x":117,"y":314,"width":697,"height":12}},{"id":"59974fcf-0706-45ec-96e8-6e0e016c6163","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary","page_number":155,"box":{"x":116,"y":343,"width":741,"height":12}},{"id":"f2e24609-d442-48b0-8882-28b4320b766e","block_type":"box","text":"over the lifetime of the security. In addition, certain ARMs provide for additional limitations on the","page_number":155,"box":{"x":116,"y":358,"width":722,"height":12}},{"id":"c35ab40c-ad40-49de-9773-4ac3f7a9488f","block_type":"box","text":"maximum amount by which the mortgage interest rate may adjust for any single adjustment period. In","page_number":155,"box":{"x":117,"y":374,"width":758,"height":12}},{"id":"6543e6ac-45e2-44cb-abe8-9853858f7979","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":155,"box":{"x":116,"y":389,"width":741,"height":12}},{"id":"46570743-8e5a-4070-a567-775e725c7db3","block_type":"box","text":"rate, the ARM’s coupon may represent a below market rate of interest. In these circumstances, the","page_number":155,"box":{"x":117,"y":405,"width":737,"height":12}},{"id":"57929b40-5e5d-46f8-84a3-b1d184c18bea","block_type":"box","text":"market value of the ARM security will likely have fallen.","page_number":155,"box":{"x":117,"y":420,"width":412,"height":12}},{"id":"8a1e221e-dd8d-4e59-9ee7-7a430fd59f70","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a","page_number":155,"box":{"x":117,"y":448,"width":728,"height":13}},{"id":"a59f00ae-507e-4874-bc7c-951f67bc26b0","block_type":"box","text":"monthly payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is","page_number":155,"box":{"x":117,"y":464,"width":754,"height":12}},{"id":"c784771a-89b3-41ce-ab32-e83e6c9e27dd","block_type":"box","text":"added to the principal balance of the mortgage loan, which is repaid through future monthly payments.","page_number":155,"box":{"x":116,"y":480,"width":764,"height":12}},{"id":"e01bcd71-2e8e-486b-a0e8-1bcc29a7a949","block_type":"box","text":"If the monthly payment for such an instrument exceeds the sum of the interest accrued at the","page_number":155,"box":{"x":117,"y":495,"width":695,"height":12}},{"id":"8ecec404-695f-4ff3-9dba-84236127af13","block_type":"box","text":"applicable mortgage interest rate and the principal payment required at such point to amortize the","page_number":155,"box":{"x":116,"y":511,"width":730,"height":12}},{"id":"a87d2e01-eb3f-4dc4-aad7-66eb8e53dfe4","block_type":"box","text":"outstanding principal balance over the remaining term of the loan, the excess is then used to reduce","page_number":155,"box":{"x":116,"y":526,"width":748,"height":12}},{"id":"5ac007ff-6841-4d3b-ab74-cdb14b70f0be","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":155,"box":{"x":116,"y":542,"width":344,"height":12}},{"id":"055d2385-9b4b-4797-aeb5-7e6339cf05e6","block_type":"box","text":"CMO Residuals.","page_number":155,"box":{"x":117,"y":570,"width":120,"height":9}},{"id":"fe1b4416-4f85-4fb2-86dc-19c3686a6ca2","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or","page_number":155,"box":{"x":238,"y":570,"width":546,"height":12}},{"id":"095850cb-86fa-492c-a6c1-ac52fcb6fdc1","block_type":"box","text":"instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans,","page_number":155,"box":{"x":117,"y":585,"width":750,"height":12}},{"id":"cee9e2db-40be-4b12-a769-15fa95734119","block_type":"box","text":"including savings and loan associations, homebuilders, mortgage banks, commercial banks,","page_number":155,"box":{"x":117,"y":601,"width":688,"height":12}},{"id":"8a2faba4-a069-4726-99ae-ffe8558aa249","block_type":"box","text":"investment banks, and special purpose entities of the foregoing. The cash flow generated by the","page_number":155,"box":{"x":117,"y":616,"width":718,"height":12}},{"id":"3b60b8dd-cf58-498e-9ace-1f8294be68c4","block_type":"box","text":"mortgage assets underlying a series of CMOs is applied first to make required payments of principal","page_number":155,"box":{"x":117,"y":632,"width":747,"height":12}},{"id":"41d5d165-cfca-4771-a7f5-b27d20685be7","block_type":"box","text":"and interest on the CMOs and second to pay the related administrative expenses and any","page_number":155,"box":{"x":116,"y":647,"width":673,"height":13}},{"id":"cd5655ba-d0bc-4016-9455-42ec1dd2c6e0","block_type":"box","text":"management fees of the issuer. The residual in a CMO structure generally represents the interest in","page_number":155,"box":{"x":117,"y":663,"width":740,"height":12}},{"id":"b612e4c7-6499-4952-8131-94ec7ab3d8d7","block_type":"box","text":"any excess cash flow remaining after making the foregoing payments. Each payment of such excess","page_number":155,"box":{"x":116,"y":678,"width":748,"height":13}},{"id":"2d1a1aab-5cdd-4eb0-a1e1-3b06181d64b3","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":155,"box":{"x":116,"y":694,"width":733,"height":12}},{"id":"f2551fe8-3332-4a1e-a467-f22cc94192d2","block_type":"box","text":"amount of residual cash flow resulting from a CMO will depend on, among other things, the","page_number":155,"box":{"x":116,"y":709,"width":676,"height":13}},{"id":"2634c6c9-bcd9-4760-a18e-f5bd064ae165","block_type":"box","text":"characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates,","page_number":155,"box":{"x":116,"y":725,"width":762,"height":12}},{"id":"c0df56aa-d1dc-4fcf-a05f-02033db6b3be","block_type":"box","text":"the amount of administrative expenses and the prepayment experience on the mortgage assets. In","page_number":155,"box":{"x":116,"y":740,"width":732,"height":13}},{"id":"70068238-0fe0-466b-81a1-8db53abc962e","block_type":"box","text":"part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the related","page_number":155,"box":{"x":117,"y":756,"width":743,"height":12}},{"id":"6be41daf-9579-41cc-8e50-f825dda652e6","block_type":"box","text":"underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":155,"box":{"x":117,"y":771,"width":764,"height":13}},{"id":"b991911f-0cb4-48d7-ae2b-9f589a1708e0","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":155,"box":{"x":116,"y":787,"width":739,"height":12}},{"id":"626473f7-588a-4d3e-afb9-c63b2c9f07dc","block_type":"box","text":"the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the","page_number":155,"box":{"x":116,"y":802,"width":728,"height":13}},{"id":"e58a1c70-c071-44d8-a41a-11d516aa76b2","block_type":"box","text":"level of the index upon which interest rate adjustments are based. In certain circumstances, a Fund","page_number":155,"box":{"x":117,"y":818,"width":735,"height":12}},{"id":"967f7051-9f0f-481a-8d86-d76690f79bb1","block_type":"box","text":"may fail to recoup fully its initial investment in a CMO residual.","page_number":155,"box":{"x":117,"y":833,"width":466,"height":13}},{"id":"f442dbd4-89e0-495a-a437-910b175ea483","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more","page_number":155,"box":{"x":117,"y":862,"width":709,"height":12}},{"id":"18966f46-6966-4198-9416-c9a8fb482c7b","block_type":"box","text":"investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally","page_number":155,"box":{"x":117,"y":877,"width":744,"height":12}},{"id":"b8a3ec25-8731-48ba-900a-03d92cae8042","block_type":"box","text":"II-69","page_number":155,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a01223bb-f33b-4d48-84ef-43abf453587c","block_type":"box","text":"NM1026U-6042785-155/259","page_number":155,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7c92114a-ee47-4313-ac78-49c417dc255b","block_type":"box","text":"completed only after careful review of the characteristics of the securities in question. In addition, CMO","page_number":156,"box":{"x":116,"y":87,"width":768,"height":12}},{"id":"8a9d6b85-6a09-47af-a6bd-a74ee662eb6d","block_type":"box","text":"residuals may or, pursuant to an exemption therefrom, may not have been registered under the","page_number":156,"box":{"x":117,"y":102,"width":711,"height":13}},{"id":"8af2ada3-a052-4c26-95c4-e167520bee41","block_type":"box","text":"Securities Act. Residual interests generally are junior to, and may be significantly more volatile than,","page_number":156,"box":{"x":116,"y":118,"width":748,"height":12}},{"id":"48590e36-8825-497e-a77c-e3119493f543","block_type":"box","text":"“regular” CMO and REMIC interests. CMO residuals, whether or not registered under the Securities","page_number":156,"box":{"x":116,"y":134,"width":744,"height":12}},{"id":"7144cd2c-5583-422d-838b-489f8b67888a","block_type":"box","text":"Act, may be subject to certain restrictions on transferability.","page_number":156,"box":{"x":116,"y":149,"width":444,"height":12}},{"id":"91935c82-fdb7-4027-9c42-bbfcfb3ed848","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":156,"box":{"x":117,"y":180,"width":280,"height":12}},{"id":"4cfb2602-69dc-4c88-8193-8a152762ec2d","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities","page_number":156,"box":{"x":399,"y":180,"width":443,"height":12}},{"id":"a8bcb11b-53c6-49ed-88be-b050d747a416","block_type":"box","text":"(“SMBSs”) issued by agencies or instrumentalities of the United States. SMBSs are derivative multi","page_number":156,"box":{"x":117,"y":196,"width":740,"height":12}},{"id":"6abda2b7-f3fc-4b73-bc45-bf21414a26a5","block_type":"box","text":"class mortgage-backed securities. SMBS arrangements commonly involve two classes of securities","page_number":156,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"8ebc4935-5298-44dc-af1d-302f0334790c","block_type":"box","text":"that receive different proportions of the interest and principal distributions on a pool of mortgage","page_number":156,"box":{"x":116,"y":227,"width":716,"height":12}},{"id":"f85bee6b-f28d-48f5-97fe-f1a869557bd3","block_type":"box","text":"assets. A common variety of SMBS is where one class (the principal only or PO class) receives some","page_number":156,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"74ee7df8-3214-457f-ab9c-56840f42340c","block_type":"box","text":"of the interest and most of the principal from the underlying assets, while the other class (the interest","page_number":156,"box":{"x":116,"y":258,"width":752,"height":12}},{"id":"1954e58d-64b7-478c-998a-98b346e9c72e","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":156,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"46b911d8-baa8-40ac-a172-4e171888a8ca","block_type":"box","text":"case, the IO class receives all of the interest, while","page_number":156,"box":{"x":116,"y":289,"width":382,"height":11}},{"id":"8e1781af-36b5-4dfa-8c05-53b019c1fccd","block_type":"box","text":"the PO class receives all of the principal. While a","page_number":156,"box":{"x":498,"y":289,"width":368,"height":12}},{"id":"56c1c1ac-ac28-4130-8dc9-611946b779bc","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":156,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"47a9d941-8f39-4d18-bfb7-5ee3ec852a12","block_type":"box","text":"class. The yield to maturity of an IO class is extremely sensitive to the rate of principal payments","page_number":156,"box":{"x":116,"y":320,"width":720,"height":12}},{"id":"0c70492b-3e75-4e87-8b02-57382d5db3b9","block_type":"box","text":"(including prepayments) on the related underlying assets, and a rapid rate of principal prepayments in","page_number":156,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"b850a58d-1daa-4617-a04f-5262edf5f618","block_type":"box","text":"excess of that considered in pricing the securities will have a material adverse effect on an IO","page_number":156,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"ad267a93-43e5-4ce7-8b2f-11d9aaac8784","block_type":"box","text":"security’s yield to maturity. If the underlying mortgage assets experience greater than anticipated","page_number":156,"box":{"x":116,"y":366,"width":724,"height":12}},{"id":"76b5c5ac-967f-46dc-aaf2-6f4fd2a813be","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":156,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"cb1708d5-3f92-4297-97d6-dc477796e455","block_type":"box","text":"certain types of IOs that represent the interest portion of a particular class as opposed to the interest","page_number":156,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"865bef5d-3473-475c-9f07-b6fbe26fe640","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":156,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"0822aa23-becd-4733-a390-3be8feefc4f6","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above","page_number":156,"box":{"x":117,"y":428,"width":733,"height":12}},{"id":"76058957-9514-4ece-92c3-f89616d10eed","block_type":"box","text":"factors, a Fund generally will purchase IOs only as a component of so called “synthetic” securities. This","page_number":156,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"e4b166e8-eaf8-4044-a7e0-7a86c1b6e97e","block_type":"box","text":"means that purchases of IOs will be matched with certain purchases of other securities, such as POs,","page_number":156,"box":{"x":117,"y":459,"width":759,"height":12}},{"id":"21da4f15-342a-4198-afd1-f55a24b89fa7","block_type":"box","text":"inverse floating rate CMOs or fixed rate securities; as interest rates fall, presenting a greater risk of","page_number":156,"box":{"x":117,"y":475,"width":737,"height":12}},{"id":"41cb08e5-39aa-48ac-9200-96a1ee4b755b","block_type":"box","text":"unanticipated prepayments of principal, the negative effect on a Fund because of its holdings of IOs","page_number":156,"box":{"x":117,"y":490,"width":744,"height":12}},{"id":"ea365bab-702c-43e2-8130-5b5547bb070d","block_type":"box","text":"should be diminished somewhat because of the increased yield on the inverse floating rate CMOs or","page_number":156,"box":{"x":116,"y":506,"width":751,"height":12}},{"id":"7ddd6fec-f826-4cee-b4a4-4aa18fc1bf5e","block_type":"box","text":"the increased appreciation on the POs or fixed rate securities.","page_number":156,"box":{"x":116,"y":521,"width":465,"height":12}},{"id":"f9c9a54b-e5db-438f-8933-74a4ebe5ee66","block_type":"box","text":"Tiered Index Bonds.","page_number":156,"box":{"x":118,"y":552,"width":147,"height":10}},{"id":"47180443-379a-43da-8003-e94574819e64","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on","page_number":156,"box":{"x":266,"y":552,"width":612,"height":12}},{"id":"0bfc6d3a-a68a-429b-8d6a-9d238e15a6ab","block_type":"box","text":"a tiered index bond is tied to a specified index or","page_number":156,"box":{"x":116,"y":568,"width":365,"height":12}},{"id":"c8b751a7-0430-4ff0-8ccc-4aad2ee60f5d","block_type":"box","text":"market rate. So long as this index or market rate is","page_number":156,"box":{"x":482,"y":568,"width":380,"height":12}},{"id":"051433a0-c6c4-4f15-8f22-442795aedb56","block_type":"box","text":"below a predetermined “strike” rate, the interest rate on the tiered index bond remains fixed. If,","page_number":156,"box":{"x":117,"y":583,"width":704,"height":12}},{"id":"1ff380f3-b2ff-465c-a63b-f85b5ab869d4","block_type":"box","text":"however, the specified index or market rate rises above the “strike” rate, the interest rate of the tiered","page_number":156,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"8ba519e3-abb3-429c-8a50-a99aed306750","block_type":"box","text":"index bond will decrease. Thus, under these circumstances, the interest rate on a tiered index bond,","page_number":156,"box":{"x":117,"y":614,"width":747,"height":11}},{"id":"891ba95d-da13-4b21-8a62-84ea5296d6f6","block_type":"box","text":"like an inverse floater, will move in the opposite direction of prevailing interest rates, with the result that","page_number":156,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"23f185d9-5931-41cb-8080-bb17f95f2a02","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":156,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"9f85ef60-ced8-4730-9822-3583ca852bb6","block_type":"box","text":"TBA Commitments.","page_number":156,"box":{"x":118,"y":676,"width":142,"height":10}},{"id":"fa713572-7eb6-4b95-ab16-ee63db9b9146","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA","page_number":156,"box":{"x":267,"y":676,"width":573,"height":12}},{"id":"353eed96-a92f-4cc3-92dd-c23c67eddfd2","block_type":"box","text":"commitments are forward agreements for the purchase or sale of securities, including mortgage","page_number":156,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"0119b749-633d-43fe-a298-7f94bb6e8d85","block_type":"box","text":"backed securities for a fixed price, with payment and delivery on an agreed upon future settlement","page_number":156,"box":{"x":117,"y":707,"width":728,"height":12}},{"id":"dc500ffc-4a74-42fe-b125-7c264c269cbc","block_type":"box","text":"date. The specific securities to be delivered are not identified at the trade date. However, delivered","page_number":156,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"2342743a-6bed-4803-af36-8167dba2f082","block_type":"box","text":"securities must meet specified terms, including issuer, rate and mortgage terms. When the Fund enters","page_number":156,"box":{"x":116,"y":738,"width":767,"height":12}},{"id":"40fcb775-5166-4ac8-a769-38c7a55ed14d","block_type":"box","text":"into a TBA commitment for the sale of mortgage-backed securities for a fixed price, with payment and","page_number":156,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"08f9f24c-d2ac-49e7-b38a-dd7b2a4f5221","block_type":"box","text":"delivery on an agreed upon future settlement date (which may be referred to as having a short position","page_number":156,"box":{"x":116,"y":769,"width":761,"height":12}},{"id":"a9d703f3-7201-42fa-b6f5-52aa70e174b1","block_type":"box","text":"in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":156,"box":{"x":117,"y":785,"width":707,"height":12}},{"id":"a1d9f65f-ba2f-48bf-8f68-ccf943da6da9","block_type":"box","text":"required to be delivered. See “— When-Issued Securities, Delayed Delivery Securities and Forward","page_number":156,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"20f2b2dd-b424-4600-930a-44ba797b9fb9","block_type":"box","text":"Commitments” below.","page_number":156,"box":{"x":117,"y":816,"width":160,"height":9}},{"id":"dee92465-1e22-4cdf-84ea-b7002c9de1e1","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":156,"box":{"x":116,"y":847,"width":164,"height":12}},{"id":"7c3a1362-8ebf-4936-87e1-0a7e982e670a","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll","page_number":156,"box":{"x":282,"y":847,"width":562,"height":12}},{"id":"9ef3d36c-9f5c-483f-804d-e3ef20092136","block_type":"box","text":"transaction, a Fund sells mortgage-backed securities for delivery in the current month and","page_number":156,"box":{"x":116,"y":862,"width":673,"height":12}},{"id":"425e6d0e-3c8e-4e66-a95f-b8cf6badbbe4","block_type":"box","text":"simultaneously contracts to repurchase substantially similar securities on a specified future date. The","page_number":156,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"e12f4027-298c-46bb-9529-a865760f0aaf","block_type":"box","text":"II-70","page_number":156,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e3908391-60ce-4277-ae38-5aa434b10163","block_type":"box","text":"NM1026U-6042785-156/259","page_number":156,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9b6bb514-5f88-4211-9b85-2a332cceb041","block_type":"box","text":"securities that are repurchased will bear the same interest rate and a similar maturity as those sold, but","page_number":157,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"bcf2023f-029f-45f4-b710-b8b48978cde8","block_type":"box","text":"pools of mortgages collateralizing those securities may have different prepayment histories than those","page_number":157,"box":{"x":117,"y":102,"width":762,"height":13}},{"id":"14def5d2-457f-4eb6-97be-c238dc44d733","block_type":"box","text":"sold. During the period between the sale and repurchase, a Fund will not be entitled to receive interest","page_number":157,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"19992075-30fe-4d98-afb7-dcbd7008af5a","block_type":"box","text":"and principal payments on the securities sold. Proceeds of the sale will be invested in additional","page_number":157,"box":{"x":116,"y":134,"width":716,"height":12}},{"id":"34ab1a59-61b2-4e0f-8f63-b31d306d2a58","block_type":"box","text":"instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":157,"box":{"x":117,"y":149,"width":762,"height":12}},{"id":"95db2877-f161-4e9a-9abe-e9433195ee96","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been","page_number":157,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"ef9ae6a2-fa86-4ed8-95a5-c9db242d3943","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":157,"box":{"x":117,"y":180,"width":715,"height":12}},{"id":"16c109d4-107f-4200-b389-b7feab3cfcf4","block_type":"box","text":"investment performance of a Fund compared with what the performance would have been without the","page_number":157,"box":{"x":117,"y":196,"width":759,"height":11}},{"id":"6a76e908-2576-4716-aaa0-b188e7bbc0d2","block_type":"box","text":"use of dollar rolls.","page_number":157,"box":{"x":117,"y":211,"width":135,"height":10}},{"id":"ea984f47-8773-40f8-af97-7a3f9c3a9449","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and","page_number":157,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"32536583-0e73-45c7-af25-b3174054e0e0","block_type":"box","text":"a subsequent purchase or sale of a substantially similar security in the forward market. Transactions in","page_number":157,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"0c119bb4-825f-4187-bf11-c9c86291a2fb","block_type":"box","text":"mortgage dollar rolls may increase trading costs and portfolio turnover.","page_number":157,"box":{"x":117,"y":273,"width":529,"height":12}},{"id":"bde48e8b-ce1d-4eb4-9989-9f6f6c893c0b","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes","page_number":157,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"96994611-8bec-4b91-ab23-fda8dfa7392f","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":157,"box":{"x":117,"y":320,"width":760,"height":12}},{"id":"7422dd52-f17a-4ccf-b932-e7499f63ca37","block_type":"box","text":"pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s","page_number":157,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"52c43501-58b4-484c-834d-64452cbe7a87","block_type":"box","text":"obligation to purchase the similar securities in the forward transaction.","page_number":157,"box":{"x":116,"y":351,"width":525,"height":12}},{"id":"f892bbc1-2061-4906-b3da-8c0a6f89bde8","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar","page_number":157,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"8cfb9e75-6a90-4094-aa45-c131097a95b1","block_type":"box","text":"rolls may depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar","page_number":157,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"4ffba821-ffcf-4979-9666-fce65cc975be","block_type":"box","text":"rolls involve the risk that the market value of the securities subject to a Fund’s forward purchase","page_number":157,"box":{"x":117,"y":413,"width":716,"height":12}},{"id":"07ce7a45-0360-4d71-8ec7-7216b9445d06","block_type":"box","text":"commitment may decline below, or the market value of the securities subject to a Fund’s forward sale","page_number":157,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"8e5f2d62-389a-477e-89ee-f0cfb0c48bbc","block_type":"box","text":"commitment may increase above, the exercise price of the forward commitment. Dollar rolls are","page_number":157,"box":{"x":116,"y":444,"width":715,"height":12}},{"id":"8f66b312-f688-4db4-aa03-82892f7149de","block_type":"box","text":"speculative techniques that can be deemed to involve leverage. There is no assurance that dollar rolls","page_number":157,"box":{"x":116,"y":459,"width":763,"height":12}},{"id":"8a42c2b6-2fc7-4912-b23e-1a9d0e844cc8","block_type":"box","text":"can be successfully employed.","page_number":157,"box":{"x":116,"y":475,"width":233,"height":12}},{"id":"23f04bdd-0397-4c04-8e59-f6c94b8091eb","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":157,"box":{"x":117,"y":506,"width":740,"height":12}},{"id":"0e940956-e353-44a8-b90f-3fd69a97bafb","block_type":"box","text":"settling securities (e.g., dollar rolls and firm and standby commitments, including TBA commitments)","page_number":157,"box":{"x":116,"y":521,"width":748,"height":12}},{"id":"ddd0a639-e70c-403b-9679-61f100fc7ca3","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":157,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"fd4af47a-6801-4686-a5d1-6f577a7db847","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the transaction meets the","page_number":157,"box":{"x":116,"y":552,"width":718,"height":12}},{"id":"f2aa27b9-a973-449c-aec5-d79fe4b0d013","block_type":"box","text":"Delayed-Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed","page_number":157,"box":{"x":117,"y":568,"width":768,"height":12}},{"id":"fbad7350-6d63-4b67-aaa5-2c264a030e23","block_type":"box","text":"Delivery Securities and Forward Commitments”). If a when-issued, forward-settling or non-standard","page_number":157,"box":{"x":117,"y":583,"width":742,"height":12}},{"id":"51d14c47-4927-49f0-a28f-58c0c34c00f7","block_type":"box","text":"settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then it is treated","page_number":157,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"c47b56c3-202f-477b-be69-5d4146a05cdf","block_type":"box","text":"as a Derivatives Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":157,"box":{"x":116,"y":614,"width":736,"height":12}},{"id":"e6a9f3a0-a401-40a2-a69d-884a2871dc65","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":157,"box":{"x":117,"y":630,"width":411,"height":12}},{"id":"96122fec-68c1-44b6-8cb4-5b10d0946262","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":157,"box":{"x":117,"y":661,"width":270,"height":12}},{"id":"90b2c7cb-e8d4-4045-bf3c-18d1660812c7","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities.","page_number":157,"box":{"x":394,"y":661,"width":438,"height":12}},{"id":"12082e42-56a6-43ca-825e-ce28d00d0972","block_type":"box","text":"These securities are derivative interest-only mortgage securities structured off home equity loan","page_number":157,"box":{"x":116,"y":676,"width":711,"height":12}},{"id":"b6c5edd9-9a01-47c7-877d-51741afd2646","block_type":"box","text":"transactions. NIM securities receive any “excess” interest computed after paying coupon costs,","page_number":157,"box":{"x":116,"y":692,"width":704,"height":12}},{"id":"3ecedc7c-31a7-471c-989f-e8f2926a64e6","block_type":"box","text":"servicing costs and fees and any credit losses associated with the underlying pool of home equity","page_number":157,"box":{"x":116,"y":707,"width":724,"height":12}},{"id":"84151e19-424b-42d5-b14e-8a5d25f47030","block_type":"box","text":"loans. Like traditional stripped mortgage-backed securities, the yield to maturity on a NIM security is","page_number":157,"box":{"x":117,"y":723,"width":740,"height":12}},{"id":"707060e6-fefe-4f1d-89fd-7b22d1848ecd","block_type":"box","text":"sensitive not only to changes in prevailing interest rates but also to the rate of principal payments","page_number":157,"box":{"x":116,"y":738,"width":720,"height":12}},{"id":"b9d1eae5-3f7d-4ffe-9a48-c010245d1ec3","block_type":"box","text":"(including prepayments) on the underlying home equity loans. NIM securities are highly sensitive to","page_number":157,"box":{"x":117,"y":754,"width":735,"height":12}},{"id":"e690c5c4-2a32-4b61-9f41-3868dbe5208e","block_type":"box","text":"credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":157,"box":{"x":116,"y":769,"width":651,"height":12}},{"id":"56495a16-af73-4482-afab-7e6b19e2b9d1","block_type":"box","text":"Municipal Investments.","page_number":157,"box":{"x":116,"y":800,"width":177,"height":12}},{"id":"436c721c-e5d9-462d-8cde-0a992edee643","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of","page_number":157,"box":{"x":117,"y":823,"width":759,"height":13}},{"id":"ffb9eeaa-fe8a-470c-b45a-8f40951bfdcd","block_type":"box","text":"the United States and the District of Columbia and their political subdivisions, agencies and","page_number":157,"box":{"x":116,"y":839,"width":681,"height":12}},{"id":"dfb1d2fe-0205-48a0-b202-d23271eeb07a","block_type":"box","text":"instrumentalities, the payments from which, in the opinion of bond counsel to the issuer, are excludable","page_number":157,"box":{"x":117,"y":854,"width":770,"height":13}},{"id":"2584402d-052e-4efa-a96b-6b417515e9ab","block_type":"box","text":"from gross income for U.S. federal income tax purposes (“Municipal Bonds”). Certain of the Municipal","page_number":157,"box":{"x":116,"y":870,"width":758,"height":12}},{"id":"c33c702b-2c8c-4e7a-9e2e-889e594c8a00","block_type":"box","text":"II-71","page_number":157,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"e45fdc36-3dc7-4adc-b54d-daa9f29e9bd1","block_type":"box","text":"NM1026U-6042785-157/259","page_number":157,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b976aa00-b428-45dd-b292-3d2af5d8a3db","block_type":"box","text":"Funds may also invest in Municipal Bonds that pay interest excludable from gross income for purposes","page_number":158,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"e9932e68-c886-4440-8eb5-6db45c03e087","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":158,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"da4c088f-da8a-48ff-ab3a-9c168260d6ae","block_type":"box","text":"exempt from state and local taxes of the designated state (“State Municipal Bonds”). The Municipal","page_number":158,"box":{"x":116,"y":118,"width":740,"height":12}},{"id":"e0974375-fe9a-49bd-b691-de2577678171","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":158,"box":{"x":117,"y":134,"width":762,"height":12}},{"id":"c2f74711-346d-485a-89fa-2bd47e87759a","block_type":"box","text":"instrumentality thereof, if the Manager believes such securities to pay interest excludable from gross","page_number":158,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"574098ac-bead-40ba-a0c7-b66076e44688","block_type":"box","text":"income for purposes of U.S. federal income tax and state and local income taxes of the designated","page_number":158,"box":{"x":117,"y":165,"width":738,"height":12}},{"id":"bb1d0801-7307-4e18-b350-96e1d45e83a7","block_type":"box","text":"state and/or state and local personal property taxes of the designated state (“Non-Municipal","page_number":158,"box":{"x":116,"y":180,"width":686,"height":12}},{"id":"6cd4e79b-8ed6-40f1-9ff8-7a901467e45c","block_type":"box","text":"Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":158,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"a580384c-49d2-4412-aeab-a7b64697ad66","block_type":"box","text":"instruments evidencing interest in one or more long-term municipal securities. Non-Municipal","page_number":158,"box":{"x":117,"y":211,"width":693,"height":12}},{"id":"ae695333-dca6-4f6c-82a6-a8f4b441a407","block_type":"box","text":"Tax-Exempt Securities also may include securities issued by other investment companies that invest in","page_number":158,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"71f315c6-60c8-489b-bfb9-0a958d3311f0","block_type":"box","text":"municipal bonds, to the extent such investments are permitted by applicable law. Non-Municipal","page_number":158,"box":{"x":117,"y":242,"width":715,"height":12}},{"id":"07e0807d-ccaa-4ddb-b77e-84cce52a9ea8","block_type":"box","text":"Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":158,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"ccfb213f-12f8-424a-91e0-5fdc38459091","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective","page_number":158,"box":{"x":117,"y":273,"width":769,"height":12}},{"id":"5320e8b9-87ba-49b1-9861-921ca7b2ea2e","block_type":"box","text":"and policies. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for","page_number":158,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"2c4447a1-585b-41c7-9e82-3b1946ff055e","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":158,"box":{"x":117,"y":304,"width":734,"height":12}},{"id":"2342e766-009e-4013-80c6-2cb2428109b9","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":158,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"26bf07cf-969c-4536-89ec-28ebad080235","block_type":"box","text":"state will be considered “State Municipal Bonds” for purposes of the investment objective and policies","page_number":158,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"9283b5f8-5264-4395-8ba7-44062857f945","block_type":"box","text":"of each of California Municipal Opportunities Fund, New Jersey Municipal Bond Fund, New York","page_number":158,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"b6688c91-4dde-4a37-b9ef-c0188007664a","block_type":"box","text":"Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":158,"box":{"x":117,"y":366,"width":527,"height":12}},{"id":"569eefed-826f-49c1-996e-945b13534d71","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":158,"box":{"x":116,"y":397,"width":519,"height":12}},{"id":"9fb1b471-6c7d-4a8f-877b-97de7bacbdd2","block_type":"box","text":"The risks and special","page_number":158,"box":{"x":636,"y":397,"width":168,"height":12}},{"id":"1b58844b-48f1-417f-94b9-3b7fb73dc37b","block_type":"box","text":"considerations involved in investment in Municipal Bonds vary with the types of instruments being","page_number":158,"box":{"x":116,"y":413,"width":729,"height":12}},{"id":"79e8e4b5-cfa6-4907-8681-dc1c3cc5d541","block_type":"box","text":"acquired. Investments in Non-Municipal Tax-Exempt Securities may present similar risks, depending","page_number":158,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"6747f0f3-3005-4e1c-b6b6-2002d5464b00","block_type":"box","text":"on the particular product. Certain municipal instruments in which a Fund may invest may be","page_number":158,"box":{"x":116,"y":444,"width":685,"height":12}},{"id":"097159fa-3e71-47db-bc6b-3d26db5c4425","block_type":"box","text":"characterized as derivatives.","page_number":158,"box":{"x":116,"y":459,"width":218,"height":10}},{"id":"0619782e-c529-40a2-9bef-1b31ce711d1c","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a","page_number":158,"box":{"x":116,"y":490,"width":768,"height":12}},{"id":"a7ec039c-976b-4055-806d-873aab933281","block_type":"box","text":"result of legislation or litigation, including legislation or litigation that changes the taxation of Municipal","page_number":158,"box":{"x":117,"y":506,"width":757,"height":12}},{"id":"729ec601-d0e5-4f28-bd6d-1b82f2e16a74","block_type":"box","text":"Bonds or the rights of Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are","page_number":158,"box":{"x":117,"y":521,"width":764,"height":12}},{"id":"b6676326-efe2-4256-ad74-952c3943b4aa","block_type":"box","text":"rare and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear.","page_number":158,"box":{"x":117,"y":537,"width":732,"height":12}},{"id":"1e7088fb-3027-40a6-9937-195405c8b1a7","block_type":"box","text":"Further, the application of state law to Municipal Bond issuers could produce varying results among the","page_number":158,"box":{"x":117,"y":552,"width":770,"height":12}},{"id":"03efecd4-ba4f-48a8-a766-c4b9db3440ab","block_type":"box","text":"states or among Municipal Bond issuers within a state. These uncertainties could have a significant","page_number":158,"box":{"x":116,"y":568,"width":742,"height":12}},{"id":"747798de-a46a-44d8-bafe-12bbcb7aa7f7","block_type":"box","text":"impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":158,"box":{"x":117,"y":583,"width":513,"height":12}},{"id":"2d96e19a-6346-4882-b756-e60f0f9ce5a8","block_type":"box","text":"Description of Municipal Bonds.","page_number":158,"box":{"x":116,"y":614,"width":240,"height":12}},{"id":"585c8573-7382-4c52-bb34-4614bf724323","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including","page_number":158,"box":{"x":117,"y":637,"width":757,"height":12}},{"id":"008d3cf8-8825-4b91-8c20-4f332f711f90","block_type":"box","text":"the construction of a wide range of public facilities, refunding of outstanding obligations and obtaining","page_number":158,"box":{"x":116,"y":653,"width":756,"height":12}},{"id":"9c07888f-f479-440f-84dc-fb1d9791f57e","block_type":"box","text":"funds for general operating expenses and loans to other public institutions and facilities. In addition,","page_number":158,"box":{"x":116,"y":668,"width":737,"height":12}},{"id":"f9a2c0dc-c09b-4557-b4bd-1f31d3b8cdd5","block_type":"box","text":"certain types of bonds are issued by or on behalf of public authorities to finance various privately","page_number":158,"box":{"x":116,"y":684,"width":716,"height":12}},{"id":"0723cdaa-aeb7-4102-8b41-b06a49fb88ba","block_type":"box","text":"owned or operated facilities, including certain facilities for the local furnishing of electric energy or gas,","page_number":158,"box":{"x":116,"y":699,"width":757,"height":13}},{"id":"ea105eaf-46e4-4dbd-b321-f7d53b8b56f2","block_type":"box","text":"sewage facilities, solid waste disposal facilities and other specialized facilities. Such obligations are","page_number":158,"box":{"x":116,"y":715,"width":735,"height":12}},{"id":"2f10d339-13fe-40a6-bdb7-2ecc152b0859","block_type":"box","text":"included within the term Municipal Bonds if the interest paid thereon is excluded from gross income for","page_number":158,"box":{"x":117,"y":730,"width":760,"height":13}},{"id":"a3647f87-9375-4b4a-9972-11061db635eb","block_type":"box","text":"U.S. federal income tax purposes and any applicable state and local taxes. Other types of private","page_number":158,"box":{"x":117,"y":746,"width":721,"height":12}},{"id":"91a8d6dc-cf42-420e-8e3d-044d25b3b061","block_type":"box","text":"activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":158,"box":{"x":116,"y":761,"width":722,"height":13}},{"id":"a2d81690-1cd3-4afa-94b2-cc7f655099a8","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the","page_number":158,"box":{"x":117,"y":777,"width":727,"height":12}},{"id":"77e684c0-d74e-4a2f-998d-ffe4b022c423","block_type":"box","text":"current U.S. federal tax laws place substantial limitations on the size of such issues. The interest on","page_number":158,"box":{"x":116,"y":792,"width":739,"height":12}},{"id":"58e04d68-e0e0-448a-8062-97a7b7b6a0ed","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":158,"box":{"x":117,"y":808,"width":736,"height":12}},{"id":"92653e2b-c74b-457f-8af2-786d6be738e6","block_type":"box","text":"classifications of Municipal Bonds are “general obligation” and “revenue” or “special obligation” bonds,","page_number":158,"box":{"x":116,"y":823,"width":756,"height":13}},{"id":"db916336-f732-47f3-b920-fb702eb0be9c","block_type":"box","text":"which latter category includes private activity bonds (“PABs”) (or “industrial development bonds” under","page_number":158,"box":{"x":116,"y":839,"width":764,"height":12}},{"id":"34e570bd-7be8-402e-b6e0-37340b028b6b","block_type":"box","text":"pre-1986 law).","page_number":158,"box":{"x":117,"y":854,"width":111,"height":13}},{"id":"d940bd2a-ef8d-47ed-88de-c4bbe8f27a94","block_type":"box","text":"II-72","page_number":158,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"c45661d8-1c3a-42e8-827e-603b1ac71fee","block_type":"box","text":"NM1026U-6042785-158/259","page_number":158,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fcc1c02d-defc-4612-8b23-1599b8473e51","block_type":"box","text":"General Obligation Bonds.","page_number":159,"box":{"x":117,"y":87,"width":194,"height":12}},{"id":"2a3bc2b2-9661-4cda-91b8-2fa35366e638","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith,","page_number":159,"box":{"x":313,"y":87,"width":565,"height":12}},{"id":"6bd0001d-cae3-42b7-ad6e-a4cd9528f28b","block_type":"box","text":"credit and taxing power for the payment of principal and interest. The taxing power of any","page_number":159,"box":{"x":116,"y":102,"width":668,"height":13}},{"id":"ceb2feb0-b7bc-48f1-a727-af0c48eeb202","block_type":"box","text":"governmental entity may be limited, however, by provisions of its state constitution or laws, and an","page_number":159,"box":{"x":116,"y":118,"width":735,"height":12}},{"id":"8621df8c-13b8-47d1-8de8-72d89db2b9fe","block_type":"box","text":"entity’s creditworthiness will depend on many factors, including potential erosion of its tax base due to","page_number":159,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"aa42514e-246f-4660-8820-f948645ec0f9","block_type":"box","text":"population declines, natural disasters, declines in the state’s industrial base or inability to attract new","page_number":159,"box":{"x":117,"y":149,"width":750,"height":12}},{"id":"a240f095-22a9-47c7-b1ae-1104bca424df","block_type":"box","text":"industries, economic limits on the ability to tax without eroding the tax base, state legislative proposals","page_number":159,"box":{"x":117,"y":165,"width":762,"height":12}},{"id":"dadbb921-9b3a-4dfe-bb68-e2cccecef8c2","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":159,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"83d355e5-809b-4b09-9487-ea569fe379df","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":159,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"5a9f2bc9-ef53-4a9c-8565-66068bfdad33","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest","page_number":159,"box":{"x":116,"y":211,"width":765,"height":12}},{"id":"949837e8-b0ad-402b-ba0d-4e4353b5875a","block_type":"box","text":"and the repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":159,"box":{"x":116,"y":227,"width":717,"height":12}},{"id":"f7a6143d-3bae-486c-a983-35dd47d4f218","block_type":"box","text":"Revenue Bonds.","page_number":159,"box":{"x":116,"y":258,"width":122,"height":9}},{"id":"74f3533a-fdd7-43a4-873d-a957af0c4b5d","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility","page_number":159,"box":{"x":240,"y":258,"width":634,"height":12}},{"id":"7be27bd0-a19d-4b75-8368-d9be60ca0081","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":159,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"abb8ba41-218f-454d-bcc7-83465f00a09d","block_type":"box","text":"revenue source such as payments from the user of the facility being financed; accordingly, the timely","page_number":159,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"a5c82e66-74e1-4186-a6a8-2dd803957970","block_type":"box","text":"payment of interest and the repayment of principal in accordance with the terms of the revenue or","page_number":159,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"866d44f7-6e60-4ce8-aa83-b04c640a269a","block_type":"box","text":"special obligation bond is a function of the economic viability of such facility or such revenue source.","page_number":159,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"9853673d-7359-4611-9f49-f5448a9377ca","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi","page_number":159,"box":{"x":117,"y":351,"width":730,"height":12}},{"id":"64010777-3d79-4fc2-b756-3b92771e79e6","block_type":"box","text":"family housing involve special risks in addition to those associated with municipal bonds generally,","page_number":159,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"0c7e6f64-d4d1-490b-8a75-795bf092c4d3","block_type":"box","text":"including that the underlying properties may not generate sufficient income to pay expenses and","page_number":159,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"ec0fe713-cc8b-45cb-aaf9-0742ba91a353","block_type":"box","text":"interest costs. Such bonds are generally non-recourse against the property owner, may be junior to the","page_number":159,"box":{"x":117,"y":397,"width":768,"height":12}},{"id":"ad3db9e0-ab35-4578-9862-d7b2f2bdec1c","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":159,"box":{"x":117,"y":413,"width":746,"height":12}},{"id":"acb26319-70ce-4c5f-9a8f-ae0ddd33b90b","block_type":"box","text":"financial performance of the property, may be prepayable without penalty and may be used to finance","page_number":159,"box":{"x":116,"y":428,"width":760,"height":12}},{"id":"03304575-fbc1-4594-aaad-ac42388f7a8d","block_type":"box","text":"the construction of housing developments which, until completed and rented, do not generate income","page_number":159,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"e09b3d8f-356c-45f7-bc34-3a0c6c2608ea","block_type":"box","text":"to pay interest. Increases in interest rates payable on senior obligations may make it more difficult for","page_number":159,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"77ef7049-3c69-408d-9674-f373e72eb337","block_type":"box","text":"issuers to meet payment obligations on subordinated bonds.","page_number":159,"box":{"x":117,"y":475,"width":452,"height":12}},{"id":"eb5d60c9-53a9-4170-a7bb-b5b2ef9c3635","block_type":"box","text":"PABs.","page_number":159,"box":{"x":116,"y":506,"width":45,"height":9}},{"id":"aaf86642-b3c4-4b9b-83ce-c8776a9d583d","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public","page_number":159,"box":{"x":162,"y":506,"width":666,"height":12}},{"id":"9bb6cb6d-012a-4aa1-955e-085e38d94b57","block_type":"box","text":"authorities to provide funds, usually through a loan or lease arrangement, to a private entity for the","page_number":159,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"ddc245d6-8a40-42d0-816c-7c539629da29","block_type":"box","text":"purpose of financing construction or improvement of a facility to be used by the entity. Such bonds are","page_number":159,"box":{"x":117,"y":537,"width":762,"height":12}},{"id":"97917318-c024-4e1d-9ba7-996cf401efb1","block_type":"box","text":"secured primarily by revenues derived from loan repayments or lease payments due from the entity,","page_number":159,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"c8601fc8-9999-4d90-88b8-44ce92c0cfb8","block_type":"box","text":"which may or may not be guaranteed by a parent company or otherwise secured. PABs generally are","page_number":159,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"381dfad1-0b4c-4cf1-af20-ab9e4a31bbaf","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":159,"box":{"x":117,"y":583,"width":764,"height":12}},{"id":"f9929332-5330-4278-ab45-8ec2c39107ac","block_type":"box","text":"understand that repayment of such bonds generally depends on the revenues of a private entity and be","page_number":159,"box":{"x":117,"y":599,"width":771,"height":12}},{"id":"69634438-0737-4f73-9d94-08d49972df90","block_type":"box","text":"aware of the risks that such an investment may entail. The continued ability of an entity to generate","page_number":159,"box":{"x":116,"y":614,"width":741,"height":12}},{"id":"9cb85c36-e3bc-4623-87ef-bb9ec804a18f","block_type":"box","text":"sufficient revenues for the payment of principal and interest on such bonds will be affected by many","page_number":159,"box":{"x":116,"y":630,"width":744,"height":12}},{"id":"efbe5c56-d227-43f9-8a72-7393f32c4031","block_type":"box","text":"factors including the size of the entity, its capital structure, demand for its products or services,","page_number":159,"box":{"x":116,"y":645,"width":707,"height":12}},{"id":"394808c6-7437-4a5f-a094-d3c6873112f3","block_type":"box","text":"competition, general economic conditions, government regulation and the entity’s dependence on","page_number":159,"box":{"x":116,"y":661,"width":723,"height":12}},{"id":"96965b00-c7a5-4863-98b4-72f2e511ffa6","block_type":"box","text":"revenues for the operation of the particular facility being financed.","page_number":159,"box":{"x":117,"y":676,"width":485,"height":12}},{"id":"b72a888c-b0e0-46c9-825f-377636667f75","block_type":"box","text":"Moral Obligation Bonds.","page_number":159,"box":{"x":116,"y":707,"width":178,"height":12}},{"id":"53b9b607-47a2-4b31-8dc4-436e20aecf33","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public","page_number":159,"box":{"x":301,"y":707,"width":523,"height":12}},{"id":"3edd23d2-0354-4dd7-9979-211ea38251c0","block_type":"box","text":"authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of","page_number":159,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"78390173-4cb7-41a3-b8cd-4da4ae6d7462","block_type":"box","text":"such bonds becomes a moral commitment but not a legal obligation of the state or municipality that","page_number":159,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"49ff9424-7c84-4500-a1ee-0c66e30ab064","block_type":"box","text":"created the special purpose public authority that issued the bonds.","page_number":159,"box":{"x":116,"y":754,"width":492,"height":12}},{"id":"6b398eaf-7f4e-4235-b59f-294759fa9852","block_type":"box","text":"Municipal Notes.","page_number":159,"box":{"x":116,"y":785,"width":122,"height":12}},{"id":"235de9f5-36e3-49a4-af3b-b492fd9240f8","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim","page_number":159,"box":{"x":246,"y":785,"width":636,"height":12}},{"id":"40b23e35-0884-4882-a5c3-d8cea4ff9479","block_type":"box","text":"financing in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the","page_number":159,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"d6bd644b-43b6-482d-905b-a990abb6e42b","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":159,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"642ec6c8-af38-4135-84ba-81ccbbd6f2b8","block_type":"box","text":"Fund may lose money.","page_number":159,"box":{"x":117,"y":831,"width":174,"height":12}},{"id":"9973ee99-7349-41a7-bcfb-dd9e8b3ef0ce","block_type":"box","text":"Municipal Commercial Paper.","page_number":159,"box":{"x":116,"y":862,"width":218,"height":12}},{"id":"770bc4aa-6c07-4917-aa01-204b9b547cc0","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet","page_number":159,"box":{"x":335,"y":862,"width":539,"height":12}},{"id":"9eb4d4c8-af9a-43f6-8b87-3d5374aca479","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":159,"box":{"x":116,"y":878,"width":728,"height":12}},{"id":"368d0ccc-e214-4456-b8c3-97fd9248042a","block_type":"box","text":"II-73","page_number":159,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2fdab96a-6a4c-4a8a-a9dc-35d8df85aa10","block_type":"box","text":"NM1026U-6042785-159/259","page_number":159,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"de3fe48d-a8bd-447b-a8e1-6e2df3feb26b","block_type":"box","text":"event of an issuer’s bankruptcy, unsecured creditors are repaid only after the secured creditors out of","page_number":160,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"84f0436d-80e8-46cc-add4-f9b003cc8856","block_type":"box","text":"the assets, if any, that remain.","page_number":160,"box":{"x":116,"y":102,"width":229,"height":13}},{"id":"bc3a317e-b5c2-466c-8820-b9456316e386","block_type":"box","text":"Municipal Lease Obligations.","page_number":160,"box":{"x":116,"y":134,"width":213,"height":12}},{"id":"f2459519-e057-47d8-9261-7cfba59c1ed8","block_type":"box","text":"Also included within the general category of Municipal Bonds are","page_number":160,"box":{"x":331,"y":134,"width":491,"height":12}},{"id":"aef67ec0-6e06-4724-89ea-25ad845ccae5","block_type":"box","text":"certificates of participation (“COPs”) issued by government authorities or entities to finance the","page_number":160,"box":{"x":116,"y":149,"width":706,"height":12}},{"id":"bd27cfd2-f168-44a2-a40e-4453a0b85123","block_type":"box","text":"acquisition or construction of equipment, land and/or facilities. The COPs represent participations in a","page_number":160,"box":{"x":116,"y":165,"width":758,"height":11}},{"id":"62e5ab15-13bf-41a3-80be-f879d15a0ece","block_type":"box","text":"lease, an installment purchase contract or a conditional sales contract (hereinafter collectively called","page_number":160,"box":{"x":117,"y":180,"width":748,"height":12}},{"id":"489e7046-f341-4be0-9b4a-a4278c6a0c00","block_type":"box","text":"“lease obligations”) relating to such equipment, land or facilities. Municipal leases, like other municipal","page_number":160,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"a3f54485-ae11-4751-a623-4ba6b25d1d5b","block_type":"box","text":"debt obligations, are subject to the risk of non-payment. Although lease obligations do not constitute","page_number":160,"box":{"x":116,"y":211,"width":747,"height":12}},{"id":"43373018-7eaa-42af-9e57-f6badf017bea","block_type":"box","text":"general obligations of the issuer for which the issuer’s unlimited taxing power is pledged, a lease","page_number":160,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"32426675-79ea-4173-b57d-92d4f92cc3b1","block_type":"box","text":"obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":160,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"eddfe2b7-6fe7-4adc-89f1-68fd75e28246","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain","page_number":160,"box":{"x":117,"y":258,"width":631,"height":12}},{"id":"2b2a18fe-a10a-4fd1-9145-258ada3cee36","block_type":"box","text":"“non-appropriation” clauses, which provide that the issuer has no obligation to make lease or","page_number":160,"box":{"x":116,"y":273,"width":693,"height":12}},{"id":"80d3eb0e-e2dd-409f-88e1-5d2f26a73d87","block_type":"box","text":"installment purchase payments in future years unless money is appropriated for such purpose on a","page_number":160,"box":{"x":117,"y":289,"width":739,"height":12}},{"id":"c8080950-6a90-4bf5-96e8-e45ecb0891e3","block_type":"box","text":"yearly basis. Although “non-appropriation” lease obligations are secured by the leased property,","page_number":160,"box":{"x":116,"y":304,"width":716,"height":12}},{"id":"594443fb-08ee-48ec-b55c-0004c7ef924a","block_type":"box","text":"disposition of the property in the event of foreclosure might prove difficult. These securities represent a","page_number":160,"box":{"x":116,"y":320,"width":767,"height":12}},{"id":"313c4251-28df-483e-b413-da4db5168744","block_type":"box","text":"type of financing that has not yet developed the depth of marketability associated with more","page_number":160,"box":{"x":116,"y":335,"width":685,"height":12}},{"id":"4a91054e-97e4-4664-81a2-be0664c5cafb","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":160,"box":{"x":116,"y":351,"width":596,"height":12}},{"id":"81945602-edf0-4560-83ae-18a9eb4f0726","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in","page_number":160,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"6145b9d8-4ab0-4e18-be31-494900eecaf8","block_type":"box","text":"general economic downturns and as relative governmental cost burdens are allocated and reallocated","page_number":160,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"13886e8b-f281-4c20-8dbf-6d83eff4b7d5","block_type":"box","text":"among federal, state and local governmental units. Such non-payment would result in a reduction of","page_number":160,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"e9b37b1d-e6e9-41c1-9b7d-00df04eb75ce","block_type":"box","text":"income to a Fund, and could result in a reduction in the value of the municipal lease experiencing","page_number":160,"box":{"x":117,"y":428,"width":726,"height":12}},{"id":"e067f873-f767-4a6d-a9c9-6a567aa215eb","block_type":"box","text":"non-payment and a potential decrease in the NAV of a Fund. Issuers of municipal securities might","page_number":160,"box":{"x":117,"y":444,"width":731,"height":12}},{"id":"50390372-1d39-45af-8c51-a301acba3a78","block_type":"box","text":"seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could","page_number":160,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"fe22422c-0f9f-4341-b274-e248820f4bad","block_type":"box","text":"experience delays and limitations with respect to the collection of principal and interest on such","page_number":160,"box":{"x":116,"y":475,"width":711,"height":12}},{"id":"4f372068-0541-4ae5-a3ae-20f6a008f29d","block_type":"box","text":"municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest","page_number":160,"box":{"x":117,"y":490,"width":755,"height":12}},{"id":"bbdd259e-9016-4c9b-8592-f029ee83c14f","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":160,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"fe5ae356-858c-4744-a5a8-87b1fb2042a3","block_type":"box","text":"take possession of and manage the assets securing the issuer’s obligations on such securities, which","page_number":160,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"2138b686-10e7-479b-9ffc-7a1cc80b2ade","block_type":"box","text":"may increase a Fund’s operating expenses and adversely affect the NAV of a Fund. When the lease","page_number":160,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"779a1559-774a-4e7c-bd73-61a7d0e71f38","block_type":"box","text":"contains a non-appropriation clause, however, the failure to pay would not be a default and a Fund","page_number":160,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"0604d700-534e-4c1c-8017-98a6a19bf8de","block_type":"box","text":"would not have the right to take possession of the assets. Any income derived from a Fund’s","page_number":160,"box":{"x":116,"y":568,"width":692,"height":12}},{"id":"3d620cd4-aaa6-4b73-ab07-2f50a48f0f6f","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":160,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"3850ff38-f166-4a26-bd44-1958a51a78fe","block_type":"box","text":"as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":160,"box":{"x":116,"y":599,"width":717,"height":12}},{"id":"dc6c6813-05ab-44f9-b4dd-66d648d2f443","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a","page_number":160,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"0482e72a-b190-4215-a09b-851a97dc4f5b","block_type":"box","text":"Fund is subject to certain limitations on its investments and on the nature of its income.","page_number":160,"box":{"x":117,"y":630,"width":650,"height":12}},{"id":"c3dd3e69-7e8a-4dd0-ab44-2a8ba334b262","block_type":"box","text":"Tender Option Bonds.","page_number":160,"box":{"x":118,"y":661,"width":161,"height":12}},{"id":"aac354d7-579b-420a-952d-1db4b8717238","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option","page_number":160,"box":{"x":286,"y":661,"width":585,"height":12}},{"id":"447d6de9-10fc-407b-984e-b90f6874775e","block_type":"box","text":"bonds (“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in","page_number":160,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"a9a0c90b-914a-4a0c-9b18-c18492d2d052","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":160,"box":{"x":116,"y":692,"width":710,"height":12}},{"id":"64b245b0-66ff-4661-9f0c-b1801b369b95","block_type":"box","text":"exempt from regular U.S. federal income tax. BlackRock will not conduct its own analysis of the tax","page_number":160,"box":{"x":116,"y":707,"width":735,"height":12}},{"id":"fddb6932-6524-42b2-9c92-901714a87c66","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":160,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"3b97d342-4745-4c9f-af29-476cf3da671b","block_type":"box","text":"counsel to the issuer. Although volatile, TOB Residuals typically offer the potential for yields exceeding","page_number":160,"box":{"x":116,"y":738,"width":761,"height":12}},{"id":"73b81a9a-34f8-4b58-8867-a6c4e379312f","block_type":"box","text":"the yields available on fixed rate Municipal Bonds with comparable credit quality. The Funds may","page_number":160,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"273409ec-f0ef-41df-af44-9aff0c0d9683","block_type":"box","text":"invest in TOB Residuals for the purpose of using economic leverage.","page_number":160,"box":{"x":117,"y":769,"width":509,"height":12}},{"id":"84220c33-5b4e-497d-9ecd-add145f9e966","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of","page_number":160,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"595225e1-d8e0-490f-b688-db60ee8f3880","block_type":"box","text":"holding Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically","page_number":160,"box":{"x":117,"y":816,"width":719,"height":12}},{"id":"e0349b5b-286c-4475-8b52-b82ed5ecc2bc","block_type":"box","text":"issues two classes of beneficial interests: short-term floating rate interests (“TOB Floaters”), which are","page_number":160,"box":{"x":117,"y":831,"width":762,"height":12}},{"id":"cba0e3f8-bae6-4152-a110-bac7fc0c212e","block_type":"box","text":"sold to third-party investors, and TOB Residuals, which are generally issued to the fund(s) that","page_number":160,"box":{"x":116,"y":847,"width":706,"height":12}},{"id":"ee0920c4-ff48-479c-8f96-77b624c3055f","block_type":"box","text":"transferred Municipal Bonds to the TOB Trust. The Funds may invest in both TOB Floaters and TOB","page_number":160,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"f8835baf-6a44-453a-97bb-ba37a8f02b7f","block_type":"box","text":"Residuals. TOB Floaters may have first priority on the cash flow from the Municipal Bonds held by the","page_number":160,"box":{"x":117,"y":878,"width":759,"height":12}},{"id":"3ef84792-5c9d-4d9f-aa37-d813b5bca987","block_type":"box","text":"II-74","page_number":160,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"df4cce2a-6981-461c-a727-6db583032a34","block_type":"box","text":"NM1026U-6042785-160/259","page_number":160,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3ecd2503-c720-4a36-a948-15988358efa8","block_type":"box","text":"TOB Trust and are enhanced with a liquidity support arrangement from a third-party Liquidity Provider","page_number":161,"box":{"x":116,"y":87,"width":760,"height":12}},{"id":"2c6eb2cc-bff8-4d06-a4f4-fd114e05fba6","block_type":"box","text":"(defined below) which allows holders to tender their position at par (plus accrued interest). A Fund, as","page_number":161,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"24243217-67f1-4781-93fb-d6fa65cb27f3","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":161,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"2967f1a6-5ae1-4d72-90cd-3aa83199cd62","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":161,"box":{"x":116,"y":134,"width":757,"height":12}},{"id":"5c06a1c4-d5fe-4c75-bd27-ba630a6b39d6","block_type":"box","text":"TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional","page_number":161,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"7ff1e67f-c85f-4220-b760-fcfbd584f200","block_type":"box","text":"Municipal Bonds or other investments permitted by its investment policies. If a Fund ever purchases all","page_number":161,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"2d92790b-afdf-4bca-ab81-83c61c74ef13","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":161,"box":{"x":116,"y":180,"width":758,"height":12}},{"id":"af30e366-4cd9-4056-a349-076137f9f2e4","block_type":"box","text":"with a proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate","page_number":161,"box":{"x":116,"y":196,"width":717,"height":12}},{"id":"14dfe31b-fd39-400a-b672-5a3322a7c611","block_type":"box","text":"amount of the Municipal Bonds owned by the TOB Trust.","page_number":161,"box":{"x":116,"y":211,"width":427,"height":12}},{"id":"7d34ebf6-1b56-49e7-b3f4-eb0ddcc7d018","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has","page_number":161,"box":{"x":116,"y":242,"width":767,"height":12}},{"id":"f3f2d7fd-1800-4dca-985b-c2f9f56ac357","block_type":"box","text":"contributed Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust,","page_number":161,"box":{"x":116,"y":258,"width":752,"height":11}},{"id":"5c027734-aafc-4478-8a09-f474a47bccb3","block_type":"box","text":"the economic rights and obligations under the TOB Residual will generally be shared among the funds","page_number":161,"box":{"x":116,"y":273,"width":764,"height":12}},{"id":"3bad9937-5761-4dae-90ca-e4d1cba94343","block_type":"box","text":"ratably in proportion to their participation in the TOB Trust.","page_number":161,"box":{"x":117,"y":289,"width":437,"height":12}},{"id":"8ea4eb89-a764-45c4-95e8-099868f3697a","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain","page_number":161,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"bb5eb482-a205-403e-9d47-95ccb36cfe2d","block_type":"box","text":"cases, when Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction","page_number":161,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"2990905d-0a16-47cb-8677-bc987391c9c4","block_type":"box","text":"includes a credit enhancement feature that provides for the timely payment of principal and interest on","page_number":161,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"0c453d60-a0ed-45c6-beae-9d6a37e6b096","block_type":"box","text":"the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for","page_number":161,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"cc389f23-5536-4dd1-b589-f7fc7609bf14","block_type":"box","text":"the payment of the credit enhancement fee and a Fund, as a TOB Residual holder, would be","page_number":161,"box":{"x":116,"y":382,"width":693,"height":12}},{"id":"0713c122-1838-4ef1-83d5-23d72ad49a2b","block_type":"box","text":"responsible for reimbursement of any payments of principal and interest made by the credit","page_number":161,"box":{"x":117,"y":397,"width":681,"height":12}},{"id":"51d8f804-6cd1-43e2-baf6-1f7c6b881121","block_type":"box","text":"enhancement provider.","page_number":161,"box":{"x":116,"y":413,"width":176,"height":12}},{"id":"9534a1bf-3d53-4ba0-97f4-b8835409766c","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":161,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"810b5651-ff9f-4fa0-9424-4870ddb4fe24","block_type":"box","text":"proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued","page_number":161,"box":{"x":117,"y":459,"width":722,"height":12}},{"id":"35fa6ab6-a48f-4348-a273-ff1ffa595a39","block_type":"box","text":"interest. Thereafter, the Fund may withdraw a corresponding share of the Municipal Bonds from the","page_number":161,"box":{"x":117,"y":475,"width":743,"height":12}},{"id":"be2978a3-bc98-4462-a0fc-fa5662588cbc","block_type":"box","text":"TOB Trust. This transaction, in effect, creates exposure for the Fund to the entire return of the","page_number":161,"box":{"x":116,"y":490,"width":702,"height":12}},{"id":"3ae1d1e3-caf0-40dc-93a9-66d8d8833a40","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":161,"box":{"x":117,"y":506,"width":770,"height":12}},{"id":"30a53b01-0654-463f-805f-74b70f112f89","block_type":"box","text":"the Municipal Bonds in the TOB Trust. This multiplies the positive or negative impact of the Municipal","page_number":161,"box":{"x":116,"y":521,"width":755,"height":12}},{"id":"9574fd8c-f053-48da-ba5c-191758b14283","block_type":"box","text":"Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust depends","page_number":161,"box":{"x":117,"y":537,"width":749,"height":12}},{"id":"5155ed10-4d77-4ccb-8e86-585a662922d6","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":161,"box":{"x":116,"y":552,"width":714,"height":12}},{"id":"04074b49-79eb-4856-95ba-e0ee76f2d6c2","block_type":"box","text":"Floaters it issues.","page_number":161,"box":{"x":117,"y":568,"width":134,"height":9}},{"id":"48f8ab66-3036-417f-8403-3dda0a179392","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly","page_number":161,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"0d2eba63-87dc-4b2c-8e34-8a17a57e5311","block_type":"box","text":"leveraged if the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of","page_number":161,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"c9d72a58-f9d8-4e00-affe-141b0b805d34","block_type":"box","text":"the principal amount of the Municipal Bonds owned by the TOB Trust.","page_number":161,"box":{"x":116,"y":630,"width":523,"height":12}},{"id":"8f2a1ae3-b82f-4b9f-9142-e18a74553017","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option","page_number":161,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"75f3fb34-952a-44df-b112-6683dacd4f1b","block_type":"box","text":"termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust","page_number":161,"box":{"x":116,"y":676,"width":763,"height":12}},{"id":"25fbecb4-0c95-47ba-9f7b-30b38d24986d","block_type":"box","text":"agreements. TOTEs include the bankruptcy or default of the issuer of the Municipal Bonds held in the","page_number":161,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"bc38ccaf-f9d9-4766-b7b4-c0505e1168ef","block_type":"box","text":"TOB Trust, a substantial downgrade in the credit quality of the issuer of the Municipal Bonds held in","page_number":161,"box":{"x":116,"y":707,"width":739,"height":12}},{"id":"085f7175-b52f-4b54-87fd-aa72fc372111","block_type":"box","text":"the TOB Trust, failure of any scheduled payment of principal or interest on the Municipal Bonds, and a","page_number":161,"box":{"x":116,"y":723,"width":758,"height":12}},{"id":"63fd3334-f414-432d-8c08-2ca6b47adfb5","block_type":"box","text":"judgment or ruling that interest on the Municipal Bonds is subject to U.S. federal income taxation.","page_number":161,"box":{"x":115,"y":738,"width":721,"height":12}},{"id":"3b677499-33d0-43e2-bd0a-a96d8fc91a41","block_type":"box","text":"MTEs may include, among other things, a failed remarketing of the TOB Floaters, the inability of the","page_number":161,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"537726a2-9f9c-46db-bf16-e7e1edb18bab","block_type":"box","text":"TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":161,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"6f73e4ec-176f-445c-9f01-ca6ed2769297","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":161,"box":{"x":116,"y":785,"width":729,"height":12}},{"id":"9d21339c-baf3-418c-9cbf-2d9f36933044","block_type":"box","text":"TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee","page_number":161,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"a9b13423-699b-4d3b-bebd-16dda0cbe68d","block_type":"box","text":"of the TOB Trust, the remarketing agent of the TOB Floaters and the Liquidity Provider (defined","page_number":161,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"5401884e-6547-4988-a68d-6435019722b1","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":161,"box":{"x":117,"y":831,"width":739,"height":12}},{"id":"5d9315c9-04ba-4c8c-9113-1f4037e8c104","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":161,"box":{"x":117,"y":847,"width":307,"height":12}},{"id":"ddec77af-e386-433f-9b89-e0ea982f4359","block_type":"box","text":"i.e.","page_number":161,"box":{"x":425,"y":847,"width":20,"height":9}},{"id":"4682e443-64d8-42e5-b6aa-8a14a20ef73e","block_type":"box","text":", the Fund). In contrast, in the case of a TOTE, after","page_number":161,"box":{"x":448,"y":847,"width":389,"height":12}},{"id":"cd44e392-b2ba-40e2-b8a9-892a6eaa3d81","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":161,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"07954d25-c703-4ecc-9169-5f5d33f787aa","block_type":"box","text":"proportion to the respective face values of their certificates.","page_number":161,"box":{"x":117,"y":878,"width":443,"height":12}},{"id":"68b83e63-9c41-4d17-913a-64dfa3078b96","block_type":"box","text":"II-75","page_number":161,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3d82af39-1b89-4aef-8544-54a5062bc53c","block_type":"box","text":"NM1026U-6042785-161/259","page_number":161,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f403f240-9c26-4b1b-95c4-d5568eee1e69","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":162,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"0a93f38d-a03f-4df3-b938-697c46a0b50b","block_type":"box","text":"supported by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity","page_number":162,"box":{"x":116,"y":102,"width":766,"height":13}},{"id":"3a2fa558-9130-47f4-a590-a891df0c05a3","block_type":"box","text":"Provider”) that allows the holders of the TOB Floaters to tender their TOB Floaters in exchange for","page_number":162,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"ff698771-ec75-45a1-99b8-8c27036d4a9c","block_type":"box","text":"payment of par plus accrued interest on any business day (subject to the non-occurrence of a TOTE","page_number":162,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"d75e3f5b-f70e-4bd6-82c3-7807a66f2411","block_type":"box","text":"described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase","page_number":162,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"f4e09827-86e8-46f7-b42b-cdc044bdc970","block_type":"box","text":"the tendered TOB Floaters, or the TOB Trust may draw upon a loan from the Liquidity Provider to","page_number":162,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"81b0d408-dff3-40d0-9b1c-a41069f06e7f","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":162,"box":{"x":117,"y":180,"width":281,"height":12}},{"id":"ebe6342a-5d81-4664-9fc7-478c41654145","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":162,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"3d434520-184f-43b4-952b-c89fcc56e258","block_type":"box","text":"make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion","page_number":162,"box":{"x":117,"y":227,"width":753,"height":12}},{"id":"55e2eb9c-8de2-4e67-9e20-0e9feb354f4a","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":162,"box":{"x":116,"y":242,"width":746,"height":12}},{"id":"8bf6df43-40a9-4b8a-9372-ecef5cb79117","block_type":"box","text":"under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in","page_number":162,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"3248a832-401e-42bb-b7ad-d67c7d08d4b7","block_type":"box","text":"a TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the","page_number":162,"box":{"x":116,"y":273,"width":712,"height":12}},{"id":"1a139351-f9be-464e-bec3-082763b386b9","block_type":"box","text":"Liquidity Provider pursuant to which the Fund is required to reimburse the Liquidity Provider the","page_number":162,"box":{"x":117,"y":289,"width":712,"height":12}},{"id":"1db04b0a-dd68-4873-9572-fd893f52dcc5","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":162,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"c3006d47-127d-4fb7-aeaa-aa6919700461","block_type":"box","text":"will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":162,"box":{"x":116,"y":320,"width":751,"height":12}},{"id":"d6365460-ab24-4a4c-8745-726874a0f05f","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their","page_number":162,"box":{"x":117,"y":335,"width":678,"height":12}},{"id":"6c0f4995-7415-4b4b-97a6-5bf7b2250b8f","block_type":"box","text":"participation in the TOB Trust.","page_number":162,"box":{"x":117,"y":351,"width":227,"height":12}},{"id":"f2472cdd-26db-45e3-b17f-74eeccbc7f40","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are","page_number":162,"box":{"x":117,"y":382,"width":682,"height":12}},{"id":"5facb1a3-8f87-4270-8cfe-b5e2fe378cad","block_type":"box","text":"investments of the Fund and are presented on the Fund’s Schedule of Investments and outstanding","page_number":162,"box":{"x":117,"y":397,"width":745,"height":12}},{"id":"f20c96d7-ce8e-4efd-90b3-9f2702de51f4","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":162,"box":{"x":116,"y":413,"width":765,"height":12}},{"id":"605b4e5f-c853-44c8-9454-19bbde00620d","block_type":"box","text":"Liabilities. Interest income from the underlying Municipal Bonds is recorded by a Fund on an accrual","page_number":162,"box":{"x":117,"y":428,"width":747,"height":12}},{"id":"f476c58d-8658-43d6-9f8a-cd77d1cef48b","block_type":"box","text":"basis. Interest expense incurred on the","page_number":162,"box":{"x":117,"y":444,"width":288,"height":12}},{"id":"a1a93f74-1283-4c1a-9b77-9ecce1723d7b","block_type":"box","text":"TOB Floaters and other expenses related to remarketing,","page_number":162,"box":{"x":409,"y":444,"width":430,"height":12}},{"id":"d172f484-a88e-4fe5-ad46-36f45d161fed","block_type":"box","text":"administration, trustee and other services to a TOB Trust are reported as expenses of a Fund. In","page_number":162,"box":{"x":116,"y":459,"width":722,"height":12}},{"id":"c4b15f8c-635b-4951-88b9-05cc35b6df7f","block_type":"box","text":"addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented","page_number":162,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"18870c60-d641-4f07-b3be-a82bd01290b7","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":162,"box":{"x":116,"y":490,"width":721,"height":10}},{"id":"e9fc4b27-0b8a-4b61-bf54-f6d24da519e4","block_type":"box","text":"assets.","page_number":162,"box":{"x":116,"y":506,"width":58,"height":9}},{"id":"024ad907-1a3d-42e7-9ed5-3dbf62da6958","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal","page_number":162,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"a23c2add-1bf0-495c-b6e0-54446c0d936a","block_type":"box","text":"Bonds with maturities or remarketing provisions that are comparable in duration to the periodic interval","page_number":162,"box":{"x":117,"y":552,"width":764,"height":12}},{"id":"c983573b-e566-4122-98d3-2ccc73e5a146","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":162,"box":{"x":116,"y":568,"width":748,"height":12}},{"id":"936c3511-432e-4484-b91e-da9c06e3bf3a","block_type":"box","text":"call date of the underlying Municipal Bonds deposited in the TOB Trust, the holder of the TOB Floaters","page_number":162,"box":{"x":116,"y":583,"width":766,"height":12}},{"id":"783865cf-e791-46f8-9017-2c274a81a04c","block_type":"box","text":"relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as","page_number":162,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"5092ee1a-d202-4d68-afac-d285db07a7d2","block_type":"box","text":"well as the credit strength of that institution. The risk associated with TOB Floaters, however, may be","page_number":162,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"b98c3f5c-fc99-4bcc-b691-f9dedfb47305","block_type":"box","text":"increased in the current market environment as a result of recent downgrades to the credit ratings, and","page_number":162,"box":{"x":117,"y":630,"width":767,"height":12}},{"id":"258634da-b8cd-4de1-a801-79a7199e431b","block_type":"box","text":"thus the perceived reliability and creditworthiness, of many major financial institutions, some of which","page_number":162,"box":{"x":116,"y":645,"width":755,"height":12}},{"id":"c8fb8a98-59f0-41f2-abc8-3fd126af5dd5","block_type":"box","text":"sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":162,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"49761974-5cc4-4976-b085-f3df95ff0e84","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":162,"box":{"x":117,"y":676,"width":627,"height":12}},{"id":"37b9b26e-1ae4-49d7-8004-c3f85d1dc44e","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions,","page_number":162,"box":{"x":117,"y":707,"width":737,"height":12}},{"id":"cb821efa-c35e-4b43-a38b-54dee2c5b476","block_type":"box","text":"reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds)","page_number":162,"box":{"x":117,"y":723,"width":664,"height":12}},{"id":"5256add3-689e-4b9e-999f-c240706ddf36","block_type":"box","text":"notwithstanding the limitation on the issuance of senior securities in Section 18 of the Investment","page_number":162,"box":{"x":117,"y":738,"width":718,"height":12}},{"id":"e0f4e004-05ae-4fed-960a-ae72e84f3620","block_type":"box","text":"Company Act, provided that the Fund either (i) complies with the 300% asset coverage ratio with","page_number":162,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"7afcda37-e17a-4b64-97cd-c98061032a13","block_type":"box","text":"respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions","page_number":162,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"f3aaeffd-5a67-4fd4-b3d0-8cf51708d123","block_type":"box","text":"as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":162,"box":{"x":116,"y":785,"width":726,"height":12}},{"id":"a0636392-c9f4-452b-a27a-00f8ec6a6856","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":162,"box":{"x":117,"y":800,"width":404,"height":12}},{"id":"948f294d-54e4-4e91-9487-a4ca09ad6bb7","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":162,"box":{"x":116,"y":831,"width":301,"height":12}},{"id":"aed49631-272b-4cfe-aad2-26b57e3e4f23","block_type":"box","text":"In response to the restrictions imposed by section 619 of the","page_number":162,"box":{"x":419,"y":831,"width":452,"height":12}},{"id":"a6dbc0ea-e06c-4cda-8437-1f404988290c","block_type":"box","text":"Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), market participants","page_number":162,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"1aece000-4744-4c49-b9f0-1cdb1932fcc4","block_type":"box","text":"have developed a structure for TOB Trusts designed to ensure that no banking entity is sponsoring the","page_number":162,"box":{"x":117,"y":862,"width":766,"height":12}},{"id":"aa59b7ee-c633-4681-a4ed-4f005cec0522","block_type":"box","text":"TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor”","page_number":162,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"a6876698-a7c2-4586-a7d0-08c5c4c6b147","block_type":"box","text":"II-76","page_number":162,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3728e9fb-02a0-4435-81d9-a56927fbe7b9","block_type":"box","text":"NM1026U-6042785-162/259","page_number":162,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1d63fe9a-243f-4121-8d32-e9cccf0ece5c","block_type":"box","text":"the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that","page_number":163,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"850b12bc-d517-47cf-a2b9-0ebebdaf4d16","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":163,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"a2d57fd0-4972-4e7c-b6ad-cfbb4c4c2a1a","block_type":"box","text":"utilize service providers in meeting these responsibilities. It is possible that regulators could take","page_number":163,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"9bec7bfd-8724-4d48-aa17-7d44d0609105","block_type":"box","text":"positions that could limit the market for such structured TOB Trust transactions or a Fund’s ability to","page_number":163,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"c185236d-4c56-460e-8c06-a0c54001e9a0","block_type":"box","text":"hold TOB Residuals. Under this TOB Trust structure, a Fund has certain additional duties and","page_number":163,"box":{"x":117,"y":149,"width":699,"height":11}},{"id":"16bdf5bc-9d2a-4046-a6be-dbe50f4eb1b5","block_type":"box","text":"responsibilities, which may give rise to certain additional risks including","page_number":163,"box":{"x":117,"y":165,"width":525,"height":12}},{"id":"177cb631-a720-4176-9c14-333941f484a2","block_type":"box","text":",","page_number":163,"box":{"x":643,"y":173,"width":3,"height":3}},{"id":"5afbdb3a-5263-4f52-8f97-88fb0afc9ddb","block_type":"box","text":"but not limited to, compliance,","page_number":163,"box":{"x":648,"y":165,"width":232,"height":11}},{"id":"2ae4918e-ce4b-498d-8042-27294c105b59","block_type":"box","text":"securities law and operational risks.","page_number":163,"box":{"x":116,"y":180,"width":270,"height":12}},{"id":"71ae258e-a80c-4deb-b93d-4f6d0f3b4191","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers,","page_number":163,"box":{"x":117,"y":208,"width":724,"height":12}},{"id":"2c10dcbe-b70c-47df-8a65-113b1fd204a4","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":163,"box":{"x":116,"y":223,"width":764,"height":13}},{"id":"3a55953b-cf28-4c35-89b0-3f6887e39ba2","block_type":"box","text":"holder. Similar to the traditional tender option bond structure, a Fund deposits Municipal Bonds into the","page_number":163,"box":{"x":117,"y":239,"width":768,"height":12}},{"id":"a687c2f1-98e5-414d-80e5-d78288e0cee1","block_type":"box","text":"TOB Trust in exchange for TOB Residuals, the TOB Trust then issues and sells TOB Floaters to third","page_number":163,"box":{"x":116,"y":254,"width":757,"height":13}},{"id":"b0d2bc39-e70a-4c12-9140-d16cc6e2cef4","block_type":"box","text":"party investors, and the proceeds of the sale of the TOB Floaters is distributed to such TOB Residual","page_number":163,"box":{"x":117,"y":270,"width":754,"height":12}},{"id":"3e29376d-8726-44cc-88b5-fd0f6ba131c1","block_type":"box","text":"holders (","page_number":163,"box":{"x":117,"y":285,"width":64,"height":13}},{"id":"fc74d041-2ac8-423a-846a-55b8c29e25c7","block_type":"box","text":"i.e.","page_number":163,"box":{"x":182,"y":286,"width":20,"height":9}},{"id":"a548a934-40cf-4f28-b2f5-5e08d8f8323c","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be supported by a remarketing agent and","page_number":163,"box":{"x":205,"y":285,"width":671,"height":13}},{"id":"f49caed4-fcd6-42b9-a71b-86012b75eb06","block_type":"box","text":"a liquidity facility. However, the remarketing agent does not purchase tendered TOB Floaters for its","page_number":163,"box":{"x":116,"y":301,"width":740,"height":12}},{"id":"13ddef50-ddf5-4cfd-b467-f3f6a733cafb","block_type":"box","text":"own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust","page_number":163,"box":{"x":116,"y":316,"width":751,"height":13}},{"id":"03dab901-9b53-4ce1-a5a4-bbbb8820cb26","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":163,"box":{"x":116,"y":332,"width":772,"height":12}},{"id":"c936eec4-a264-4fc3-bc8f-ee7923a375a0","block_type":"box","text":"a failed remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the","page_number":163,"box":{"x":116,"y":347,"width":745,"height":13}},{"id":"9971ff17-73f4-43d2-9101-2c4b25752478","block_type":"box","text":"TOB Trust the proceeds of which would be used by the TOB Trust to purchase the tendered TOB","page_number":163,"box":{"x":116,"y":363,"width":728,"height":12}},{"id":"a7b0e43b-8ea1-4bfc-9215-e275c601982e","block_type":"box","text":"Floaters. The Liquidity Provider is not obligated to advance such a loan. The TOB Trust would be the","page_number":163,"box":{"x":117,"y":378,"width":753,"height":13}},{"id":"ab3eb194-abdd-4d30-ba0a-971703794ff5","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":163,"box":{"x":117,"y":394,"width":758,"height":12}},{"id":"81bed470-c7f5-4a00-9ea8-11595ff4e5b4","block_type":"box","text":"purchased TOB Floaters held by the TOB Trust.","page_number":163,"box":{"x":117,"y":409,"width":361,"height":13}},{"id":"7dbd195d-f18c-4039-8d7e-d71d4b009cb0","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals","page_number":163,"box":{"x":116,"y":437,"width":769,"height":12}},{"id":"5000f233-95c2-4ff5-85f9-45f731e5b86c","block_type":"box","text":"or recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would","page_number":163,"box":{"x":116,"y":453,"width":735,"height":12}},{"id":"82804f43-a833-4816-ae94-f7651a58c2ac","block_type":"box","text":"generally be no contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB","page_number":163,"box":{"x":116,"y":468,"width":718,"height":12}},{"id":"456bdf16-c9ea-4902-9bde-251cf18b1698","block_type":"box","text":"Residual. However, as described above, a Fund would bear the risk of loss with respect to any","page_number":163,"box":{"x":117,"y":484,"width":706,"height":12}},{"id":"d6fd16ca-b612-4c6d-a4ae-0a2747e80e40","block_type":"box","text":"Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":163,"box":{"x":117,"y":499,"width":420,"height":12}},{"id":"3faad009-d89c-4257-8a10-8bfc59e83fbb","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for","page_number":163,"box":{"x":116,"y":527,"width":730,"height":12}},{"id":"8af0b2af-a699-4b17-a602-c9e74b7781bd","block_type":"box","text":"securitizations (the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention","page_number":163,"box":{"x":116,"y":543,"width":753,"height":12}},{"id":"b7b7dddd-fa1c-4312-ad3e-1f5ac872bf0e","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":163,"box":{"x":117,"y":558,"width":771,"height":12}},{"id":"4c37395a-bca0-4517-94b1-863e407375e9","block_type":"box","text":"supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the","page_number":163,"box":{"x":116,"y":574,"width":721,"height":12}},{"id":"f199f371-b7f9-4809-9aa3-e2edb8b66668","block_type":"box","text":"Fund’s ability to engage in TOB Trust transactions or increase the costs of such transactions in certain","page_number":163,"box":{"x":117,"y":589,"width":764,"height":12}},{"id":"0e5a4de3-fe56-4aaf-a742-80da7d1173e4","block_type":"box","text":"circumstances.","page_number":163,"box":{"x":116,"y":605,"width":117,"height":9}},{"id":"317453ef-1256-481a-8843-22ca73320352","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":163,"box":{"x":116,"y":633,"width":763,"height":12}},{"id":"e5d50c64-dcc7-4311-9b2e-d42786257287","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through","page_number":163,"box":{"x":117,"y":648,"width":729,"height":12}},{"id":"f3a3df76-c048-4fbb-8fe2-a5de2b998a1c","block_type":"box","text":"reduced demand for and liquidity of municipal bonds and increased financing costs for municipal","page_number":163,"box":{"x":117,"y":664,"width":713,"height":12}},{"id":"1e036496-1d2e-4ce7-9885-01103d094977","block_type":"box","text":"issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules","page_number":163,"box":{"x":117,"y":679,"width":749,"height":12}},{"id":"0ca923e2-51aa-40a1-ae43-be82f447d0e2","block_type":"box","text":"on the TOB market and the overall municipal market is not yet certain.","page_number":163,"box":{"x":116,"y":695,"width":520,"height":12}},{"id":"3462a9e6-dd5b-41d2-8b4c-8b3abaadda06","block_type":"box","text":"Yields.","page_number":163,"box":{"x":118,"y":723,"width":47,"height":9}},{"id":"062c1af7-07fd-48e0-bcda-ea0003249259","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general","page_number":163,"box":{"x":171,"y":723,"width":639,"height":12}},{"id":"9af37ec0-39c3-4f49-87bd-72ee76d472b0","block_type":"box","text":"condition of the money market and of the municipal bond market, the size of a particular offering, the","page_number":163,"box":{"x":116,"y":738,"width":746,"height":12}},{"id":"789f2c2c-3454-4416-98eb-a0135d36959f","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":163,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"0a704458-924f-49cf-bcec-b3d8e806928f","block_type":"box","text":"a Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of","page_number":163,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"5f99bbd0-fe09-4204-b606-743cbe500241","block_type":"box","text":"the securities in which the Fund invests to meet their obligations for the payment of interest and","page_number":163,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"fdc3539e-000e-4bdb-b3d1-e43c9be62986","block_type":"box","text":"principal when due. There are variations in the risks involved in holding Municipal Bonds, both within a","page_number":163,"box":{"x":117,"y":800,"width":757,"height":12}},{"id":"1f2a3a7f-d109-43f6-8ac8-ec2f75aa10e3","block_type":"box","text":"particular classification and between classifications, depending on numerous factors. Furthermore, the","page_number":163,"box":{"x":117,"y":816,"width":758,"height":12}},{"id":"fd077d82-e460-49eb-924b-9c8d48bb2151","block_type":"box","text":"rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal Bonds may be","page_number":163,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"62fadd5c-4970-40bc-882f-62bfbfe842fb","block_type":"box","text":"subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights of","page_number":163,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"e822a5ec-0b0b-40e2-9dbe-e197869a1c14","block_type":"box","text":"creditors generally and to general equitable principles, which may limit the enforcement of certain","page_number":163,"box":{"x":116,"y":862,"width":727,"height":12}},{"id":"d8eff50d-c503-442a-bc9a-faa2a655bc03","block_type":"box","text":"remedies.","page_number":163,"box":{"x":117,"y":878,"width":77,"height":9}},{"id":"71685621-7dd5-4634-90f6-fbf0aeb9bde3","block_type":"box","text":"II-77","page_number":163,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9978396e-be7e-4c61-93a7-7ff24c645f27","block_type":"box","text":"NM1026U-6042785-163/259","page_number":163,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5ab8e938-45a3-4848-a3c6-306dcbf347d9","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":164,"box":{"x":118,"y":87,"width":344,"height":12}},{"id":"304a9961-221f-455a-bf67-301ede1b1dac","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a","page_number":164,"box":{"x":464,"y":87,"width":374,"height":12}},{"id":"0353a898-571f-46b3-b973-1ec1da0075c2","block_type":"box","text":"floating or variable interest rate adjustment formula and a right of demand on the part of the holder","page_number":164,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"ff3c4700-e594-4cfa-8b65-e313196255c3","block_type":"box","text":"thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice","page_number":164,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"a0f1a71c-c099-451a-89c0-cb7868ca0f15","block_type":"box","text":"period not to exceed seven days.","page_number":164,"box":{"x":117,"y":134,"width":250,"height":12}},{"id":"d6d906c0-33f0-415e-aa56-65517088ad78","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be","page_number":164,"box":{"x":116,"y":162,"width":768,"height":12}},{"id":"64dc4bf7-0afc-4c6c-9715-5d995203c2dd","block_type":"box","text":"honored. The interest rates are adjustable at periodic intervals to some prevailing market rate for","page_number":164,"box":{"x":117,"y":177,"width":721,"height":12}},{"id":"fb9b7d76-902c-4ce9-88bb-3841b0bd6fc4","block_type":"box","text":"similar investments, such adjustment formula being calculated to maintain the market rate of the","page_number":164,"box":{"x":116,"y":193,"width":718,"height":12}},{"id":"38d05c32-fa03-4395-be8f-e6de07d506e5","block_type":"box","text":"VRDOs at approximately the par value of the VRDOs on the adjustment date. The adjustments","page_number":164,"box":{"x":116,"y":208,"width":710,"height":12}},{"id":"7507b199-ea87-4abe-b93c-937aa2d0330c","block_type":"box","text":"typically are based upon the Securities Industry and Financial Markets Association (“SIFMA”) Index.","page_number":164,"box":{"x":116,"y":224,"width":746,"height":12}},{"id":"a251a11d-8558-4458-b030-2539fc1d8869","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate","page_number":164,"box":{"x":117,"y":252,"width":751,"height":12}},{"id":"0d588e61-7412-4e3c-be3b-2a244135340a","block_type":"box","text":"securities. During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its","page_number":164,"box":{"x":116,"y":268,"width":746,"height":12}},{"id":"9a69e083-e5b7-4c39-b74c-7a44b7c44a49","block_type":"box","text":"shareholders will forego the opportunity for capital appreciation. During periods of rising interest rates,","page_number":164,"box":{"x":116,"y":283,"width":761,"height":12}},{"id":"6855ac14-4f80-4b37-ba35-601f715a9cea","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":164,"box":{"x":117,"y":299,"width":764,"height":12}},{"id":"815c7cae-497c-49fa-aa98-ab32c880bf60","block_type":"box","text":"of capital depreciation.","page_number":164,"box":{"x":116,"y":314,"width":173,"height":12}},{"id":"176c569e-03ba-4757-a9c5-b986318eb7ef","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":164,"box":{"x":118,"y":343,"width":488,"height":12}},{"id":"5170ea83-e8e6-4902-9f16-590a835bc315","block_type":"box","text":"The Municipal Funds and certain","page_number":164,"box":{"x":608,"y":343,"width":253,"height":12}},{"id":"1d4e4548-595e-4421-8617-7cf482d40459","block_type":"box","text":"other funds deal in financial futures contracts based on a long-term municipal bond index developed by","page_number":164,"box":{"x":116,"y":358,"width":770,"height":12}},{"id":"0897ba45-f26b-4e4f-b1ff-a40fd35d1327","block_type":"box","text":"the Chicago Board of Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal","page_number":164,"box":{"x":116,"y":374,"width":761,"height":12}},{"id":"1ca14314-6c80-4cfe-b646-127c5379099a","block_type":"box","text":"Bond Index is comprised of 40 long-term, actively traded tax-exempt municipal revenue and general","page_number":164,"box":{"x":117,"y":389,"width":746,"height":12}},{"id":"1f2927e2-9f7f-4daa-8159-3a5304bbb4bc","block_type":"box","text":"obligation bonds. Each bond included in the Municipal Bond Index must be rated A or higher by","page_number":164,"box":{"x":116,"y":405,"width":712,"height":12}},{"id":"475310d5-879e-4093-9fcf-fe272b1ecb97","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":164,"box":{"x":117,"y":420,"width":754,"height":12}},{"id":"23426446-d39e-4941-aff8-a28e21939d43","block_type":"box","text":"satisfying the eligibility requirements are added to, and an equal number of old issues are deleted from,","page_number":164,"box":{"x":116,"y":436,"width":771,"height":12}},{"id":"006ba7b0-5ce7-48cf-ab89-c69fe29f7fa8","block_type":"box","text":"the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":164,"box":{"x":116,"y":451,"width":734,"height":12}},{"id":"70cf2954-6e0a-47d3-8c4e-6b9330e13bb7","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six","page_number":164,"box":{"x":116,"y":467,"width":670,"height":12}},{"id":"59cf58c2-d884-48ab-965b-296a154d2651","block_type":"box","text":"dealer-to-dealer brokers.","page_number":164,"box":{"x":116,"y":482,"width":189,"height":10}},{"id":"8e79762e-51a6-4cb7-8d70-985aa18984aa","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the","page_number":164,"box":{"x":116,"y":511,"width":760,"height":12}},{"id":"1fc21fcc-898f-4681-9594-58625da82e30","block_type":"box","text":"CBT assures performance under futures contracts through a clearing corporation, a nonprofit","page_number":164,"box":{"x":117,"y":526,"width":694,"height":12}},{"id":"0a507a7f-ca4a-49b5-8c39-b2694b21a6ae","block_type":"box","text":"organization managed by the exchange membership that is also responsible for handling daily","page_number":164,"box":{"x":116,"y":542,"width":704,"height":12}},{"id":"5e440e48-bdb4-45a7-a9cb-ca4f7a082859","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":164,"box":{"x":116,"y":557,"width":364,"height":12}},{"id":"99896751-d5c3-47a1-9ffe-e94d3ec2a0ea","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial","page_number":164,"box":{"x":116,"y":585,"width":735,"height":12}},{"id":"51c09c30-591c-4ade-bf34-0487bfd42493","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":164,"box":{"x":116,"y":601,"width":741,"height":12}},{"id":"14815306-54a0-458e-a059-be7a2545f6d0","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":164,"box":{"x":116,"y":616,"width":749,"height":12}},{"id":"6dee0020-9d99-4916-8823-d2a02ad32d29","block_type":"box","text":"financial futures contracts will depend in part on the degree to which price movements in the index","page_number":164,"box":{"x":116,"y":632,"width":734,"height":12}},{"id":"59dfc597-9406-47c7-b442-984765ff6dd7","block_type":"box","text":"underlying the financial futures contract correlate with the price movements of the Municipal Bonds","page_number":164,"box":{"x":117,"y":647,"width":737,"height":13}},{"id":"d0d337de-67a9-4daf-8549-12ebbc126ac4","block_type":"box","text":"held by the Fund. The correlation may be affected by disparities in the average maturity, ratings,","page_number":164,"box":{"x":117,"y":663,"width":712,"height":12}},{"id":"f6cd84c9-8902-4faf-9fe8-f407277240c8","block_type":"box","text":"geographical mix or structure of a Municipal Fund’s investments as compared to those comprising the","page_number":164,"box":{"x":116,"y":678,"width":755,"height":13}},{"id":"4e8bbe1a-9463-415d-8448-2f9811810cd8","block_type":"box","text":"Municipal Bond Index and general economic or political factors. In addition, the correlation between","page_number":164,"box":{"x":117,"y":694,"width":736,"height":12}},{"id":"a6cfe31a-02ce-43e9-93f6-ba4475dd47f7","block_type":"box","text":"movements in the value of the Municipal Bond Index may be subject to change over time as additions","page_number":164,"box":{"x":117,"y":709,"width":753,"height":13}},{"id":"fd05a916-7259-4799-a9f8-a9b9f1d372d0","block_type":"box","text":"to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":164,"box":{"x":116,"y":725,"width":725,"height":12}},{"id":"8687d86c-7513-4b29-8bd4-399b696c7064","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be","page_number":164,"box":{"x":116,"y":740,"width":745,"height":13}},{"id":"4225119a-da91-4dff-b8aa-2473d2196cd3","block_type":"box","text":"adversely affected by similar factors and the risk of imperfect correlation between movements in the","page_number":164,"box":{"x":116,"y":756,"width":740,"height":12}},{"id":"6733219c-0319-49a0-8eef-6f335cd7799f","block_type":"box","text":"prices of such futures contracts and the prices of Municipal Bonds held by a Municipal Fund may be","page_number":164,"box":{"x":117,"y":771,"width":740,"height":13}},{"id":"5cec38da-df10-4045-8746-b58833e2cc4f","block_type":"box","text":"greater. Municipal Bond Index futures contracts were approved for trading in 1985. Trading in such","page_number":164,"box":{"x":116,"y":787,"width":732,"height":12}},{"id":"ce7963de-6d04-4924-9a04-bc1ee0d39e4f","block_type":"box","text":"futures contracts may tend to be less liquid than trading in other futures contracts. The trading of","page_number":164,"box":{"x":116,"y":802,"width":716,"height":13}},{"id":"d39d4b14-b2da-4793-b22d-6ce260233039","block_type":"box","text":"futures contracts also is subject to certain market risks, such as inadequate trading activity, which","page_number":164,"box":{"x":116,"y":818,"width":723,"height":12}},{"id":"15139980-24fd-4628-8032-cf479d16fb24","block_type":"box","text":"could at times make it difficult or impossible to liquidate existing positions.","page_number":164,"box":{"x":116,"y":833,"width":552,"height":13}},{"id":"87b6fb21-4711-4c66-85b7-3b7c221a475f","block_type":"box","text":"Call Rights.","page_number":164,"box":{"x":117,"y":862,"width":83,"height":12}},{"id":"d39a572e-4cd2-4cbf-8045-92d2cc57c5fc","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such","page_number":164,"box":{"x":202,"y":862,"width":626,"height":12}},{"id":"3c17431c-ab79-425f-900e-065cba99baec","block_type":"box","text":"Municipal Bond for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may","page_number":164,"box":{"x":117,"y":877,"width":711,"height":12}},{"id":"2b4cd227-9db7-47ab-b754-903dfc46ec9e","block_type":"box","text":"II-78","page_number":164,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e1b7ea91-1fd3-4821-9163-7f536a807e84","block_type":"box","text":"NM1026U-6042785-164/259","page_number":164,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"426b194b-e3bb-4f38-830f-8e6d525c68b9","block_type":"box","text":"exercise such right to require a mandatory tender for the purchase of related Municipal Bonds, subject","page_number":165,"box":{"x":116,"y":87,"width":763,"height":12}},{"id":"dc17032f-9437-4d34-b5fa-4902fde4ee1c","block_type":"box","text":"to certain conditions. A Call Right that is not exercised prior to maturity of the related Municipal Bond","page_number":165,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"e59a62fd-de2b-462d-b30c-06acfa42c903","block_type":"box","text":"will expire without value. The economic effect of holding both the Call Right and the related Municipal","page_number":165,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"50119b9f-11cd-4485-81f1-2352f9caca02","block_type":"box","text":"Bond is identical to holding a Municipal Bond as a non-callable security. Certain investments in such","page_number":165,"box":{"x":117,"y":134,"width":748,"height":12}},{"id":"1e6b9182-30f1-4221-9582-43cc07ebc21f","block_type":"box","text":"obligations may be illiquid.","page_number":165,"box":{"x":116,"y":149,"width":201,"height":12}},{"id":"da7cca1c-5f3b-4cc9-8272-60a28264d2f4","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":165,"box":{"x":116,"y":180,"width":323,"height":12}},{"id":"657b011f-fe6e-4618-83ae-22604c77fe9f","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":165,"box":{"x":440,"y":180,"width":439,"height":12}},{"id":"77e1fea2-5b57-4d21-9be0-d5beb3938f2d","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such","page_number":165,"box":{"x":116,"y":196,"width":772,"height":12}},{"id":"e5c03915-eb3c-4ffa-a2fb-0a3d24b0d864","block_type":"box","text":"as Municipal Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial","page_number":165,"box":{"x":116,"y":211,"width":769,"height":12}},{"id":"484fc699-7ea3-4428-b3a0-7d303eda5cac","block_type":"box","text":"Markets Association Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters","page_number":165,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"f92c00f3-1406-4365-8689-2147cc438a51","block_type":"box","text":"into these transactions, the Fund expects to do so primarily to preserve a return or spread on a","page_number":165,"box":{"x":117,"y":242,"width":708,"height":12}},{"id":"e5c584de-e044-451c-a6aa-7b94dcf104c7","block_type":"box","text":"particular investment or portion of its portfolio or to protect against any increase in the price of","page_number":165,"box":{"x":117,"y":258,"width":699,"height":12}},{"id":"308ccb4e-bfc4-44fd-975f-79e2c927fe92","block_type":"box","text":"securities the Fund anticipates purchasing at a later date. A Fund intends to use these transactions","page_number":165,"box":{"x":116,"y":273,"width":741,"height":12}},{"id":"0db962f6-c5ff-4399-ae8c-f6897da8c289","block_type":"box","text":"primarily as a hedge rather than as a speculative investment. However, a Fund also may invest in","page_number":165,"box":{"x":117,"y":289,"width":729,"height":12}},{"id":"177a9188-a608-40b1-880f-b1a206fdb1e4","block_type":"box","text":"MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for","page_number":165,"box":{"x":117,"y":304,"width":704,"height":12}},{"id":"977dbb7c-29ce-4251-9d63-6e9052c675d6","block_type":"box","text":"example, during periods of steep interest rate yield curves (","page_number":165,"box":{"x":116,"y":320,"width":441,"height":12}},{"id":"1b339cf4-f834-43f8-988e-8215b7b936d5","block_type":"box","text":"i.e.","page_number":165,"box":{"x":558,"y":320,"width":20,"height":9}},{"id":"2d0477ce-7db9-4bd6-9ef3-041644cfd324","block_type":"box","text":", wide differences between short-term","page_number":165,"box":{"x":581,"y":320,"width":284,"height":11}},{"id":"9f003a13-31fc-4f0c-8e41-31f734c0c644","block_type":"box","text":"and long-term interest rates).","page_number":165,"box":{"x":116,"y":335,"width":221,"height":12}},{"id":"ff24e62a-4d5b-4cce-8685-819538dab6ab","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":165,"box":{"x":116,"y":366,"width":747,"height":12}},{"id":"fc1a50c9-53d4-4768-8bdd-53723a0a874a","block_type":"box","text":"exchanges with another party their respective commitments to pay or receive interest (","page_number":165,"box":{"x":116,"y":382,"width":642,"height":12}},{"id":"5b6a3a6b-4e2e-4eab-8e3b-ba2ff33a8a24","block_type":"box","text":"e.g.","page_number":165,"box":{"x":760,"y":384,"width":25,"height":10}},{"id":"e43dbaf9-b0c9-49d2-ace0-b7dcac2ea666","block_type":"box","text":", an","page_number":165,"box":{"x":788,"y":384,"width":32,"height":9}},{"id":"ab41fe7c-40ae-467b-822c-3ae6d8a58f8d","block_type":"box","text":"exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap","page_number":165,"box":{"x":116,"y":397,"width":717,"height":12}},{"id":"01602be2-a952-4bcf-aaf7-ee3e1bbed5d2","block_type":"box","text":"Index). Because the underlying index is a tax-exempt index, SIFMA Swaps may reduce cross-market","page_number":165,"box":{"x":117,"y":413,"width":755,"height":12}},{"id":"824175e6-d9ba-49cd-becb-70fe997fef19","block_type":"box","text":"risks incurred by a Fund and increase a Fund’s ability to hedge effectively. SIFMA Swaps are typically","page_number":165,"box":{"x":117,"y":428,"width":760,"height":12}},{"id":"f6b48a8e-6474-4578-af4f-861671acbe2d","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":165,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"4cdf5866-5f94-4af8-9a70-1fc95ab5917f","block_type":"box","text":"duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond with","page_number":165,"box":{"x":116,"y":459,"width":747,"height":12}},{"id":"cbccf785-b215-4a34-98f3-c35dd9859053","block_type":"box","text":"the same attributes as the swap (","page_number":165,"box":{"x":116,"y":475,"width":247,"height":12}},{"id":"b3a7b4e4-c1b1-41f5-be9c-4cf92de6c81a","block_type":"box","text":"e.g.","page_number":165,"box":{"x":365,"y":477,"width":25,"height":10}},{"id":"2bfe44ef-3991-49d7-baa6-32dae7084528","block_type":"box","text":", coupon, maturity, call feature).","page_number":165,"box":{"x":393,"y":475,"width":240,"height":12}},{"id":"79f7a39e-6179-4d96-91c3-d65336bd6003","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap","page_number":165,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"723d7b19-51d0-4c28-b133-755d90feedbc","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":165,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"5452934a-3dd1-499a-8bce-6f0c957cc049","block_type":"box","text":"return on a particular investment or a portion of its portfolio as a duration management technique or to","page_number":165,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"5b89c2c0-86f5-4d79-bd5c-5797884a1997","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":165,"box":{"x":117,"y":552,"width":771,"height":12}},{"id":"2abf9a50-3333-47f5-b30d-6c9cc892cded","block_type":"box","text":"Swap, a Fund can create a synthetic long or short position, allowing the Fund to select the most","page_number":165,"box":{"x":116,"y":568,"width":715,"height":12}},{"id":"a054a458-ad46-4761-b6e2-05d7875b580b","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":165,"box":{"x":116,"y":583,"width":729,"height":12}},{"id":"cd98a912-4ff6-4d25-b989-910d63c7e4b7","block_type":"box","text":"provider pursuant to which the parties agree to make payments to each other on a notional amount,","page_number":165,"box":{"x":117,"y":599,"width":744,"height":12}},{"id":"ce62b37a-8157-482b-bd17-2010982bd695","block_type":"box","text":"contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a","page_number":165,"box":{"x":116,"y":614,"width":769,"height":12}},{"id":"0028bba0-47d1-4f22-b83d-cd50819dec4c","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":165,"box":{"x":116,"y":630,"width":754,"height":12}},{"id":"1686d414-94eb-40f1-8cfd-8304a4ef77da","block_type":"box","text":"the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration","page_number":165,"box":{"x":116,"y":645,"width":763,"height":12}},{"id":"5ba5af6a-e82b-4380-82c3-6bb407da2b22","block_type":"box","text":"date, the counterparty to the contract will make a payment to the Fund equal to the specified level","page_number":165,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"592d922f-fbb2-4ce2-a423-e6a44d79962a","block_type":"box","text":"minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data","page_number":165,"box":{"x":117,"y":676,"width":746,"height":12}},{"id":"785742e3-4974-4964-8164-49a4271a8268","block_type":"box","text":"AAA General Obligation Scale is above the specified level on the expiration date, a Fund will make a","page_number":165,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"5dd48646-cce2-404d-a8a6-350875411892","block_type":"box","text":"payment to the counterparty equal to the actual level minus the specified level, multiplied by the","page_number":165,"box":{"x":117,"y":707,"width":708,"height":12}},{"id":"b6d851dd-c58d-446f-9c63-17b7e0f4634a","block_type":"box","text":"notional amount of the contract.","page_number":165,"box":{"x":117,"y":723,"width":233,"height":9}},{"id":"a3ad54fc-823e-4f4d-a136-8cca32778d66","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps,","page_number":165,"box":{"x":117,"y":754,"width":438,"height":12}},{"id":"dae7a38b-f622-4c16-9d35-42aeb53afdf9","block_type":"box","text":"there is a risk that municipal yields will","page_number":165,"box":{"x":561,"y":754,"width":283,"height":12}},{"id":"37e9c3e5-8f37-46d8-9dc2-3dc7e4c248f3","block_type":"box","text":"move in the opposite direction than anticipated by a Fund, which would cause the Fund to make","page_number":165,"box":{"x":117,"y":769,"width":711,"height":12}},{"id":"e498c01b-dca6-4262-af52-dae3e1187be5","block_type":"box","text":"payments to its counterparty in the transaction that could adversely affect the Fund’s performance.","page_number":165,"box":{"x":117,"y":785,"width":729,"height":12}},{"id":"680bc234-4fca-4281-850a-dfd9a186fd36","block_type":"box","text":"Insured Municipal Bonds.","page_number":165,"box":{"x":117,"y":816,"width":186,"height":12}},{"id":"d0987d03-9e06-41b2-a700-7a8779b4d98b","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees","page_number":165,"box":{"x":310,"y":816,"width":555,"height":12}},{"id":"a6e6fc79-de2a-4b45-8fe5-7faa8f98a364","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":165,"box":{"x":116,"y":831,"width":768,"height":12}},{"id":"8f60fe42-fa0b-44e7-ba53-2fc5b3b96499","block_type":"box","text":"matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to","page_number":165,"box":{"x":117,"y":847,"width":755,"height":12}},{"id":"8d8c6993-16ae-4df4-baa2-5d481ff7cedb","block_type":"box","text":"protect the Fund against losses caused by a bond issuer’s failure to make interest or principal","page_number":165,"box":{"x":117,"y":862,"width":699,"height":12}},{"id":"88e3c03a-30a7-4947-be27-0bc56b1e2743","block_type":"box","text":"payments. However, insurance does not protect the Fund or its shareholders against losses caused by","page_number":165,"box":{"x":117,"y":878,"width":767,"height":12}},{"id":"efaa0047-68f3-4350-be70-5649d331bb4c","block_type":"box","text":"II-79","page_number":165,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b6b5a760-2e15-47ac-bafd-3936edd97834","block_type":"box","text":"NM1026U-6042785-165/259","page_number":165,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"466a46e2-ed64-4092-8de2-19f121d25a05","block_type":"box","text":"declines in a bond’s market value. Also, the Fund cannot be certain that any insurance company does","page_number":166,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"49f6672c-a797-4d6c-b993-bfbfe1ac0e5d","block_type":"box","text":"not make these payments. In addition, if the Fund purchases the insurance, it may pay the premiums,","page_number":166,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"5108623c-4b59-465f-bebc-1771a9b8668c","block_type":"box","text":"which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims","page_number":166,"box":{"x":116,"y":118,"width":721,"height":12}},{"id":"b58d3935-d96a-4e0f-abef-4784f3217a01","block_type":"box","text":"paying ability, financial strength, or equivalent ratings of at least investment grade. However, if","page_number":166,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"ebf89c2b-06cc-47e9-a18f-0f013e2b8138","block_type":"box","text":"insurance from insurers with these ratings is not available, the Fund may use insurance companies","page_number":166,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"95d0ae96-58f6-4663-b743-1f89033c23da","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":166,"box":{"x":116,"y":165,"width":742,"height":12}},{"id":"1491c9b5-3405-44d7-afa5-a7af9e1f77d6","block_type":"box","text":"obligations or loses its credit rating, the value of the bond could drop.","page_number":166,"box":{"x":116,"y":180,"width":517,"height":12}},{"id":"8b959753-1eec-447c-9ee3-5125ec284d53","block_type":"box","text":"Build America Bonds.","page_number":166,"box":{"x":116,"y":211,"width":159,"height":10}},{"id":"8f4517a5-32e3-43ab-a2b8-d2a95ffd1b46","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S.","page_number":166,"box":{"x":276,"y":211,"width":604,"height":12}},{"id":"839488be-0130-4581-b09a-f5648e79000f","block_type":"box","text":"federal income tax credit; however, the issuer of a Build America Bond may instead elect to receive a","page_number":166,"box":{"x":116,"y":227,"width":756,"height":12}},{"id":"ef6b35a7-9665-42fe-acf1-7ad621bb28e8","block_type":"box","text":"cash payment directly from the federal government in lieu of holders such as the fund receiving a tax","page_number":166,"box":{"x":116,"y":242,"width":752,"height":12}},{"id":"7856a482-687a-4a64-bebd-22aac08365fe","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":166,"box":{"x":116,"y":258,"width":772,"height":11}},{"id":"be2ce712-8851-445d-8934-e06f8bd775b5","block_type":"box","text":"does receive tax credits from Build America Bonds or other tax credit bonds on one or more specified","page_number":166,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"acb91eaf-a632-44d5-bdf9-19f985571cbb","block_type":"box","text":"dates during the fund’s taxable year, and the Fund satisfies the minimum distribution requirement, the","page_number":166,"box":{"x":116,"y":289,"width":760,"height":12}},{"id":"d00d15ce-b3b1-4d36-a4e1-1f2a0e2d309a","block_type":"box","text":"Fund may elect for U.S. federal income tax purposes to pass through to shareholders tax credits","page_number":166,"box":{"x":117,"y":304,"width":719,"height":12}},{"id":"87ed2f8b-4c1e-4bfa-abf6-0c54165b1e50","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":166,"box":{"x":116,"y":320,"width":770,"height":12}},{"id":"e3bd4d45-70dc-488c-8fcb-6e157c056bd2","block_type":"box","text":"the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":166,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"9a33cb74-fba4-4155-91fa-beeeba978c48","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy","page_number":166,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"7579a03c-35bc-4c92-8a8a-9eddaa3aeb30","block_type":"box","text":"bond, each of which must meet certain requirements specified in the Code), a “Build America Bond”","page_number":166,"box":{"x":117,"y":366,"width":744,"height":12}},{"id":"dce398a8-d922-43c9-be1b-ad8fb090df0d","block_type":"box","text":"(which includes certain qualified bonds issued before January 1, 2011) or certain other specified","page_number":166,"box":{"x":117,"y":382,"width":717,"height":12}},{"id":"ade08c6b-8033-402b-9dc8-2db6d54f7d80","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":166,"box":{"x":117,"y":397,"width":771,"height":12}},{"id":"180a56c5-67ee-4835-bbe9-73fd6ffc314a","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":166,"box":{"x":116,"y":413,"width":735,"height":12}},{"id":"dd3aa194-99ac-457b-890c-a9f2bb4a13a0","block_type":"box","text":"amount would be subject to withholding provisions of the Code. Certain limitations may apply on the","page_number":166,"box":{"x":116,"y":428,"width":746,"height":12}},{"id":"9b26fef6-f6eb-49f5-a45b-7ce3cdeb8d6a","block_type":"box","text":"extent to which the credit may be claimed.","page_number":166,"box":{"x":116,"y":444,"width":318,"height":12}},{"id":"5239d0af-fb03-4e93-b180-b3a1f7d85d8a","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":166,"box":{"x":118,"y":475,"width":263,"height":12}},{"id":"9419655b-a5f0-4b9c-a2cf-2811318dcab6","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which","page_number":166,"box":{"x":382,"y":475,"width":494,"height":12}},{"id":"8b4ccab1-d98d-44ea-ac25-832dfdc2f54f","block_type":"box","text":"may be in the form of tender option bonds, variable rate demand obligations, participations, beneficial","page_number":166,"box":{"x":117,"y":490,"width":757,"height":12}},{"id":"dcd59fca-6edd-48b2-a13a-42a8ecd14a0f","block_type":"box","text":"interests in a trust, partnership interests or other forms. These investments are described in greater","page_number":166,"box":{"x":117,"y":506,"width":741,"height":12}},{"id":"9a85297b-b75a-45bc-ada0-fd4f590fb217","block_type":"box","text":"detail above in this section. Some of the structures used by certain Funds include interests in long-term","page_number":166,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"fb41657e-0b4f-4e39-988e-32c89a59200d","block_type":"box","text":"fixed-rate municipal debt obligations, held by a trustee or custodian, that are coupled with tender","page_number":166,"box":{"x":116,"y":537,"width":720,"height":12}},{"id":"ce1729a4-b35c-4e13-8c25-29ae192e820e","block_type":"box","text":"option, demand and other features when the tax-exempt municipal investments are created. Together,","page_number":166,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"ce94504d-21b8-44ba-b9d8-7cecd8f3f31b","block_type":"box","text":"these features entitle the holder of the interest to tender (or put) the underlying municipal debt","page_number":166,"box":{"x":116,"y":568,"width":701,"height":12}},{"id":"aee3a48b-9662-4c81-a01a-830ed99293b5","block_type":"box","text":"obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":166,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"6c7260b6-d8dd-4b27-81a2-1c09e08b121b","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to","page_number":166,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"23c905b8-c768-4bf2-827e-5ffe9264560a","block_type":"box","text":"receive specific future interest payments, principal payments, or both, on the underlying securities held","page_number":166,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"8a6119d4-87ab-46d7-a7fe-6b27e4c1e766","block_type":"box","text":"by the custodian. Under such arrangements, the holder of the custodial receipt has the option to tender","page_number":166,"box":{"x":117,"y":645,"width":769,"height":12}},{"id":"447a58ac-1f57-491e-94f3-56557812f508","block_type":"box","text":"the underlying securities at their face value to the sponsor (","page_number":166,"box":{"x":116,"y":661,"width":440,"height":12}},{"id":"3259246b-901b-4b8a-ba75-24847b0a383c","block_type":"box","text":"e.g.","page_number":166,"box":{"x":557,"y":663,"width":26,"height":10}},{"id":"98cb45f8-310d-4a9a-b227-4a8ec1a457d1","block_type":"box","text":", a Fund, or a bank or broker-dealer or","page_number":166,"box":{"x":586,"y":661,"width":284,"height":11}},{"id":"9eadd708-5b67-4c0e-842b-97f196a35a6e","block_type":"box","text":"other financial institution), which is paid periodic fees equal to the difference between the securities’","page_number":166,"box":{"x":116,"y":676,"width":738,"height":12}},{"id":"61db1dcf-a380-46c2-b312-69ec34826397","block_type":"box","text":"fixed coupon rate and the rate that would cause the securities, coupled with the tender option, to trade","page_number":166,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"47a5a69d-5071-4743-b21a-bf386026d00f","block_type":"box","text":"at par on the date of a rate adjustment.","page_number":166,"box":{"x":116,"y":707,"width":289,"height":12}},{"id":"821e79c5-b33b-48cc-bf58-f6bd53fedbd1","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the","page_number":166,"box":{"x":116,"y":738,"width":747,"height":12}},{"id":"889a7fad-a1a4-4de6-871d-95762033b1d1","block_type":"box","text":"Fund’s participation bears to the total principal amount of the Municipal Bond, and typically provides for","page_number":166,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"34786d5b-c94a-4c16-8ec9-a5123f98a61c","block_type":"box","text":"a repurchase feature for all or any part of the full principal amount of the participation interest, plus","page_number":166,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"f5665245-2f4e-4a71-8872-3d834880fd41","block_type":"box","text":"accrued interest. Trusts and partnerships are typically used to convert long-term fixed rate high quality","page_number":166,"box":{"x":116,"y":785,"width":759,"height":12}},{"id":"3af65ef9-271d-448b-8526-7e1521091513","block_type":"box","text":"bonds of a single state or municipal issuer into variable or floating rate demand instruments.","page_number":166,"box":{"x":117,"y":800,"width":680,"height":12}},{"id":"c58c2254-5690-4e32-8b99-52ff84e81b5f","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt","page_number":166,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"6f37160f-1244-4df8-8822-6cf4d7aa1c95","block_type":"box","text":"obligations which give the holder the right to receive payment of principal subject to the conditions","page_number":166,"box":{"x":116,"y":847,"width":731,"height":12}},{"id":"c7eece9d-9b06-4add-9ff7-e68626f023c7","block_type":"box","text":"described above. The IRS has not ruled on whether the interest received on tax-exempt municipal","page_number":166,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"b04ef9e4-53e4-4f51-87ff-1547339569c7","block_type":"box","text":"investments in the form of participation interests or custodial receipts is tax-exempt, and accordingly,","page_number":166,"box":{"x":117,"y":878,"width":751,"height":12}},{"id":"2e2aac20-ab19-4925-9c82-862a812de18d","block_type":"box","text":"II-80","page_number":166,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5c5caafc-c425-469f-a1cb-998b22bbf7c3","block_type":"box","text":"NM1026U-6042785-166/259","page_number":166,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"97d6de30-d4ec-46d2-8fc8-c204a4fdb9ff","block_type":"box","text":"purchases of any such interests or receipts are based on the opinions of counsel to the sponsors of","page_number":167,"box":{"x":117,"y":87,"width":742,"height":12}},{"id":"ebc0a2c4-1a62-4d8e-a460-5e0e0618f493","block_type":"box","text":"such derivative securities. Neither a Fund nor its investment adviser or sub-advisers will review the","page_number":167,"box":{"x":116,"y":103,"width":738,"height":9}},{"id":"48ba1725-04aa-4601-8470-0a778e641df9","block_type":"box","text":"proceedings related to the creation of any tax-exempt municipal investments or the basis for such","page_number":167,"box":{"x":117,"y":118,"width":728,"height":12}},{"id":"5fa65445-4801-415a-bb01-83a724d8f526","block_type":"box","text":"opinions.","page_number":167,"box":{"x":116,"y":134,"width":72,"height":11}},{"id":"7eae1527-51ef-4ccc-b301-1382f9f671f6","block_type":"box","text":"Operational and Technology Risks.","page_number":167,"box":{"x":117,"y":165,"width":279,"height":12}},{"id":"aa3f0ebc-a1e0-4383-8803-5bf347b1acba","block_type":"box","text":"The Fund and the entities with which it interacts directly or","page_number":167,"box":{"x":397,"y":165,"width":442,"height":12}},{"id":"9c8b88fc-d04c-4c1a-b5d7-a64a2b41c2ab","block_type":"box","text":"indirectly are susceptible to operational and technology risks, including those related to human errors,","page_number":167,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"cba19b2b-8ecf-418e-adb6-eb3d3de6bdef","block_type":"box","text":"processing errors, communication errors, systems failures, cybersecurity incidents, and the use of","page_number":167,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"cedde8e9-e177-4807-8822-3190166028de","block_type":"box","text":"artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its","page_number":167,"box":{"x":116,"y":211,"width":713,"height":12}},{"id":"e37685dd-cf55-4ed0-a73d-8395047e931d","block_type":"box","text":"shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s","page_number":167,"box":{"x":116,"y":227,"width":760,"height":11}},{"id":"8066c31f-ad33-45eb-8c3b-565450226e84","block_type":"box","text":"adviser, administrator, distributor, other service providers (e.g., index and benchmark providers,","page_number":167,"box":{"x":116,"y":242,"width":716,"height":12}},{"id":"39785d71-c663-495f-9789-6136d3b55efb","block_type":"box","text":"accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers,","page_number":167,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"64fc5d7d-7fb5-42c2-88c6-6d22d0f15ff6","block_type":"box","text":"Authorized Participants, listing exchanges, other financial market operators, and governmental","page_number":167,"box":{"x":116,"y":273,"width":706,"height":12}},{"id":"28881f97-3131-4eda-84bf-2c7ce0794f86","block_type":"box","text":"authorities, as applicable. Operational and technology risks for the issuers in which the Fund invests","page_number":167,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"8349a741-53ab-4afb-b92f-cf737acaf9d9","block_type":"box","text":"could also result in material adverse consequences for such issuers and may cause the Fund’s","page_number":167,"box":{"x":116,"y":304,"width":711,"height":12}},{"id":"208b46aa-46f6-4a52-bb99-b92660648e6b","block_type":"box","text":"investments in such issuers to lose value. The Fund may incur substantial costs in order to mitigate","page_number":167,"box":{"x":117,"y":320,"width":741,"height":12}},{"id":"83dca037-aec1-4aca-81a9-3788c6f60c01","block_type":"box","text":"operational and technology risks.","page_number":167,"box":{"x":116,"y":335,"width":250,"height":12}},{"id":"894ca039-5fef-4b3b-87d1-0f70e5b0aeab","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in","page_number":167,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"2cf8043a-8e27-4555-b437-fdf270abffa5","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":167,"box":{"x":116,"y":382,"width":746,"height":12}},{"id":"95a60c7c-2c6d-4b2a-896e-08c3c32f86b6","block_type":"box","text":"gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or","page_number":167,"box":{"x":116,"y":397,"width":772,"height":12}},{"id":"eac9cc2b-2cde-4a1f-a27e-fc6dc20b45c2","block_type":"box","text":"destroying data, and causing operational disruption. Geopolitical tension may increase the scale and","page_number":167,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"9a1238e6-c21f-4c67-a79b-1cb7da2a6f7a","block_type":"box","text":"sophistication of deliberate attacks, particularly those from nation states or from entities with nation","page_number":167,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"ec228af3-2cca-42d2-a2e4-95427cd7ca66","block_type":"box","text":"state backing. 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Furthermore, cybersecurity incidents may render","page_number":167,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"cefe5b94-392d-4b3b-ab22-fda668266099","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of","page_number":167,"box":{"x":117,"y":537,"width":766,"height":12}},{"id":"314e4aed-4c1f-4c8a-9807-da11e3d622b4","block_type":"box","text":"Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete.","page_number":167,"box":{"x":117,"y":552,"width":761,"height":12}},{"id":"1ca10400-d069-4bf6-86b6-8807895a902f","block_type":"box","text":"Power outages, natural disasters, equipment malfunctions and processing errors that threaten","page_number":167,"box":{"x":117,"y":568,"width":702,"height":12}},{"id":"b8b4973f-1f68-44f6-ac55-a0ba6dff78d4","block_type":"box","text":"information and technology systems relied upon by the Fund or its service providers, as well as market","page_number":167,"box":{"x":117,"y":583,"width":766,"height":12}},{"id":"899fb0c7-d704-4f8a-9a31-8f7ef69af018","block_type":"box","text":"events that occur at a pace that overloads these systems, may also disrupt business operations or","page_number":167,"box":{"x":116,"y":599,"width":735,"height":12}},{"id":"c9e24597-bbe6-48ed-95e4-4ca559652cba","block_type":"box","text":"impact critical data. Recent advances in AI technology pose risks to the Fund and its portfolio","page_number":167,"box":{"x":117,"y":614,"width":696,"height":12}},{"id":"da446afa-b575-45ab-b7cc-86611099bdea","block_type":"box","text":"investments. These advancements could harm the Fund and its portfolio investments by reducing the","page_number":167,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"6a496c29-ab06-4ba4-bbdd-5b8a0a8f575c","block_type":"box","text":"demand for both the technology and software offerings of the Fund’s portfolio investments.","page_number":167,"box":{"x":116,"y":645,"width":677,"height":12}},{"id":"c1519d09-6ae9-48f9-b170-0e765fc365da","block_type":"box","text":"Additionally, these advancements could significantly disrupt the Fund’s portfolio investments and","page_number":167,"box":{"x":116,"y":661,"width":716,"height":12}},{"id":"828eb723-9920-4483-9cfa-5db02b443572","block_type":"box","text":"subject them to increased competition, which could have a material adverse effect on business,","page_number":167,"box":{"x":116,"y":676,"width":708,"height":12}},{"id":"86e17302-6f33-4e60-9d40-7dc95d2e50d9","block_type":"box","text":"financial condition, and results of operations. AI technology advancements, including efficiency","page_number":167,"box":{"x":116,"y":692,"width":703,"height":12}},{"id":"25f548b8-b5f8-4620-9111-a6ff77fb35b3","block_type":"box","text":"improvements, without related increases in the adoption and development of such technologies, could","page_number":167,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"483d9bbb-933b-4a38-a32d-65ab4d5f97d5","block_type":"box","text":"also negatively impact demand for, and the valuation of, digital infrastructure assets.","page_number":167,"box":{"x":116,"y":723,"width":624,"height":12}},{"id":"10e0c3c1-12e7-429e-8b63-d07fd325c20a","block_type":"box","text":"The Fund and its portfolio investments could be exposed to the risks of AI technology if third-party","page_number":167,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"a7d70b35-24c0-439b-8553-bcc2670eb590","block_type":"box","text":"service providers or any counterparties, whether or not known to the Fund, also use AI technology in","page_number":167,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"cc4e0de6-2ede-444e-8d60-b74fab17fe97","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":167,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"36c97165-dc5c-4ec6-ac50-3bc601076939","block_type":"box","text":"of AI technology in third-party products or services.","page_number":167,"box":{"x":116,"y":800,"width":377,"height":12}},{"id":"ee9e43de-08e2-4caf-9b01-2efe7a76c4b4","block_type":"box","text":"Use of AI technology could include the input of confidential information in contravention of applicable","page_number":167,"box":{"x":117,"y":831,"width":750,"height":12}},{"id":"be82e3fd-2150-4717-a24c-25775a835050","block_type":"box","text":"policies, contractual or other obligations or restrictions, resulting in such confidential information","page_number":167,"box":{"x":117,"y":847,"width":713,"height":12}},{"id":"2e9ab946-3fe9-4fd7-911e-3ab824d43a41","block_type":"box","text":"becoming accessible by other third-party AI technology applications and users.","page_number":167,"box":{"x":117,"y":862,"width":589,"height":12}},{"id":"d4c90911-b223-4b13-8cf3-e958ccec83d9","block_type":"box","text":"II-81","page_number":167,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"05e986d5-291e-4cdc-8196-e54a420b1056","block_type":"box","text":"NM1026U-6042785-167/259","page_number":167,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"04598025-8e5d-400c-a59c-c960fe7f0cfa","block_type":"box","text":"Independent of its context of use, AI technology is generally highly reliant on the collection and","page_number":168,"box":{"x":117,"y":87,"width":706,"height":12}},{"id":"1e5654b9-ddfd-4a4b-83df-835c073ee5a1","block_type":"box","text":"analysis of large amounts of data, may incorporate biased or inaccurate data, and it is not possible or","page_number":168,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"e1595f23-f57a-4aa8-bf67-0ffe36407cac","block_type":"box","text":"practicable to incorporate all relevant data into the models that AI technology utilizes to operate.","page_number":168,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"08ff6718-b35b-4d1e-b87e-780f011c9ce5","block_type":"box","text":"Certain data in such models will inevitably contain a degree of inaccuracy and error, or could otherwise","page_number":168,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"0be24eb2-67bf-4223-bef1-9bc235de6b49","block_type":"box","text":"be inadequate or flawed, which would be likely to degrade the effectiveness of AI technology. The","page_number":168,"box":{"x":117,"y":149,"width":729,"height":12}},{"id":"a9aabac7-ea60-45e3-b192-a9fa7fb23000","block_type":"box","text":"output or results of any such AI technologies may therefore be incomplete, erroneous, distorted or","page_number":168,"box":{"x":116,"y":165,"width":733,"height":12}},{"id":"9802f353-7e8c-4366-b7ee-ee32243df48c","block_type":"box","text":"misleading. Further, AI tools may lack transparency as to how data is utilized and how outputs are","page_number":168,"box":{"x":117,"y":180,"width":731,"height":12}},{"id":"d3c1ea32-305e-45cf-992a-f62d08e82096","block_type":"box","text":"generated. AI technologies may also allow the unintended introduction of vulnerabilities into","page_number":168,"box":{"x":116,"y":196,"width":684,"height":12}},{"id":"810698f1-c600-4685-a9c8-63e1b5b6abf0","block_type":"box","text":"infrastructures and applications. To the extent that the Fund or its portfolio investments are exposed to","page_number":168,"box":{"x":117,"y":211,"width":764,"height":12}},{"id":"b5569295-b74e-4d08-97c6-b884856a8f4e","block_type":"box","text":"the risks of AI technology use, any such inaccuracies or errors could have adverse impacts on the","page_number":168,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"c797b947-5437-42a6-a707-7f4b62367c35","block_type":"box","text":"Fund or its investments.","page_number":168,"box":{"x":117,"y":242,"width":182,"height":10}},{"id":"085d5a4a-bca9-4d55-8e42-629eea06bf9d","block_type":"box","text":"Regulations related to AI technology could also impose certain obligations and costs related to","page_number":168,"box":{"x":117,"y":273,"width":705,"height":12}},{"id":"3fb393e8-9c85-4fe4-91b5-bab1a1c2aed3","block_type":"box","text":"monitoring and compliance. For example, in April 2023, the Federal Trade Commission, U.S.","page_number":168,"box":{"x":117,"y":289,"width":693,"height":12}},{"id":"28db1102-b745-42b0-8eb9-5ad290635501","block_type":"box","text":"Department of Justice, Consumer Financial Protection Bureau, and U.S. Equal Employment","page_number":168,"box":{"x":117,"y":304,"width":686,"height":12}},{"id":"db358f99-9525-4919-a043-6332e83bcb9f","block_type":"box","text":"Opportunity Commission released a joint statement on artificial intelligence demonstrating interest in","page_number":168,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"30a941d9-4299-4c54-a606-b5fabd45d011","block_type":"box","text":"monitoring the development and use of automated systems and enforcement of their respective laws","page_number":168,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"b8fc9503-118a-45cc-a7fc-495d05f7e79c","block_type":"box","text":"and regulations. In October 2023, an executive order established new standards for AI safety and","page_number":168,"box":{"x":116,"y":351,"width":729,"height":12}},{"id":"0c9e24fd-c17b-47b1-bc31-01897a2af6a9","block_type":"box","text":"security. In addition to the U.S. regulatory framework, in 2024, the EU adopted the Artificial Intelligence","page_number":168,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"62588702-8e75-45af-bb97-fba6dd151209","block_type":"box","text":"Act, which applies to certain AI technology and the","page_number":168,"box":{"x":116,"y":382,"width":380,"height":12}},{"id":"6be109a2-603f-49a7-9a00-cd394aa3f7c5","block_type":"box","text":"data used to train, test, and deploy them, which","page_number":168,"box":{"x":497,"y":382,"width":357,"height":12}},{"id":"e6cbd1b2-a21a-4697-b67c-687907df6fa4","block_type":"box","text":"may create additional compliance burdens, higher administrative costs, and significant penalties should","page_number":168,"box":{"x":117,"y":397,"width":770,"height":12}},{"id":"6d45680d-c1ee-48b1-8526-e3e2ab9ff8f4","block_type":"box","text":"the Fund, the adviser, or the Fund’s portfolio investments fail to comply.","page_number":168,"box":{"x":116,"y":413,"width":537,"height":12}},{"id":"b23d8dde-2f32-4814-96d3-d9f4af5dd729","block_type":"box","text":"AI technology and its applications, including in the investment and financial sectors, continue to","page_number":168,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"8d53c59f-8f67-47dc-b068-a8ad5762484f","block_type":"box","text":"develop rapidly, and it is impossible to predict the future risks that may arise from such developments.","page_number":168,"box":{"x":116,"y":459,"width":762,"height":12}},{"id":"278c8cc3-0825-4df1-8096-b0f25232cdb4","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":168,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"e2a49b06-ff67-4334-9a73-23808e16a064","block_type":"box","text":"be able to anticipate, prevent, mitigate, or remediate all of the potential risks, challenges, or impacts of","page_number":168,"box":{"x":117,"y":490,"width":763,"height":12}},{"id":"da4b5b08-9fbd-44c2-9423-c5e0ef5278df","block_type":"box","text":"such changes.","page_number":168,"box":{"x":116,"y":506,"width":113,"height":12}},{"id":"9b5f891d-7699-4c2d-9ad0-f20837d09917","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security","page_number":168,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"6ea4c669-d4c0-421a-bf31-92f022e444cc","block_type":"box","text":"and cybersecurity risk management policies and procedures, their methods of risk management may","page_number":168,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"c36886bf-126f-4637-acf3-4777700a357b","block_type":"box","text":"differ from those of the Fund in the setting of priorities, the personnel and resources available or the","page_number":168,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"1ae8a989-c5a8-4583-8352-0c7aa0354ad6","block_type":"box","text":"effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through","page_number":168,"box":{"x":116,"y":583,"width":706,"height":12}},{"id":"c23af9e5-a5a8-4e2d-8395-e12eace4eb3e","block_type":"box","text":"controls, procedures and oversight, including establishing business continuity plans and risk","page_number":168,"box":{"x":116,"y":599,"width":687,"height":12}},{"id":"c7a2f570-c6e0-4436-968f-857ed2f3b402","block_type":"box","text":"management systems. However, there are inherent limitations in such plans and systems, including","page_number":168,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"d3402fcd-bb15-4bb2-ab1c-153971eec6c9","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":168,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"445cf103-f67d-4ddd-a92b-98938e8ba366","block_type":"box","text":"future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":168,"box":{"x":116,"y":645,"width":719,"height":12}},{"id":"3b2c46cc-fbd5-4ee4-8793-ef790674e9f3","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that","page_number":168,"box":{"x":116,"y":661,"width":761,"height":12}},{"id":"0a9f9b9c-518d-4908-9924-72d8c1d493c4","block_type":"box","text":"prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund","page_number":168,"box":{"x":117,"y":676,"width":760,"height":12}},{"id":"50a70768-3105-4ace-8cf9-0858d62a8c48","block_type":"box","text":"cannot control the systems, information security or other cybersecurity of the issuers in which it invests","page_number":168,"box":{"x":116,"y":692,"width":762,"height":12}},{"id":"6e5e1f61-2fad-42f5-abe9-a9dad44da4af","block_type":"box","text":"or its service providers, counterparties, and other third parties whose activities affect the Fund.","page_number":168,"box":{"x":116,"y":707,"width":700,"height":12}},{"id":"9b926909-3713-4847-b1e9-28fefefd8097","block_type":"box","text":"Lastly, the regulatory climate governing cybersecurity and data protection is developing quickly and","page_number":168,"box":{"x":117,"y":738,"width":735,"height":12}},{"id":"bd081455-81bd-4c8c-8fe3-1905f32e6e6e","block_type":"box","text":"may vary considerably across jurisdictions. Regulators continue to develop new rules and standards","page_number":168,"box":{"x":117,"y":754,"width":742,"height":12}},{"id":"d1a8092a-e434-4382-897d-26bca3a912b3","block_type":"box","text":"related to cybersecurity and data protection. Compliance with evolving regulations can be demanding","page_number":168,"box":{"x":117,"y":769,"width":750,"height":12}},{"id":"cf009241-9831-4862-a906-6d3afdd4d2ac","block_type":"box","text":"and costly, requiring substantial resources to monitor and implement required changes.","page_number":168,"box":{"x":116,"y":785,"width":647,"height":12}},{"id":"2f7922b7-3491-4333-a205-91a1bad9b9d0","block_type":"box","text":"Participation Notes.","page_number":168,"box":{"x":116,"y":816,"width":157,"height":12}},{"id":"0c139820-1206-4bc3-8b80-dc0aeabd31df","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that","page_number":168,"box":{"x":279,"y":816,"width":586,"height":12}},{"id":"9d261f0d-6533-472f-b0eb-6b88a1b6d772","block_type":"box","text":"entitle the Fund to a return measured by the change in value of an identified underlying security or","page_number":168,"box":{"x":116,"y":831,"width":733,"height":12}},{"id":"7dd156c9-56a5-48d0-a9d2-7a00658dd88f","block_type":"box","text":"basket of securities (collectively, the “underlying security”). Participation notes are typically used when","page_number":168,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"a3bf5729-c33f-4eab-b805-cc7289b60309","block_type":"box","text":"a direct investment in the underlying security is restricted due to country-specific regulations.","page_number":168,"box":{"x":116,"y":862,"width":692,"height":12}},{"id":"d0eaa7a7-a65b-48de-915b-6e03c1f2430a","block_type":"box","text":"II-82","page_number":168,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"eafb9e8a-3708-48af-aa6e-8801a22d173d","block_type":"box","text":"NM1026U-6042785-168/259","page_number":168,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cf53cedc-684d-4c23-a143-bf4d23259137","block_type":"box","text":"The Fund is subject to counterparty risk associated with each issuer. Investment in a participation note","page_number":169,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"fe312f28-00f2-4301-9ea0-49e2ed5f6b5c","block_type":"box","text":"is not the same as investment in the constituent shares of the company. A participation note represents","page_number":169,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"53b5287d-ffac-48ef-9f93-8d98b6da74e4","block_type":"box","text":"only an obligation of the issuer to provide the Fund the economic performance equivalent to holding","page_number":169,"box":{"x":116,"y":118,"width":744,"height":12}},{"id":"b3b35e9e-049d-4d54-a4cb-96ca3e751d55","block_type":"box","text":"shares of an underlying security. A participation note does not provide any beneficial or equitable","page_number":169,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"0cd33fff-3d62-4ce6-a2a3-5699f2c61e9f","block_type":"box","text":"entitlement or interest in the relevant underlying security. 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A Fund attempts to mitigate that risk by purchasing only from issuers","page_number":169,"box":{"x":117,"y":227,"width":689,"height":12}},{"id":"6991896f-5416-4929-b75c-289654d82491","block_type":"box","text":"determined to be creditworthy.","page_number":169,"box":{"x":116,"y":242,"width":231,"height":12}},{"id":"97a6aaf3-58bc-4842-b352-b7d82a905d21","block_type":"box","text":"The counterparty may, but is not required to, purchase the shares of the underlying security to hedge","page_number":169,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"0ca65c49-67a5-4bef-a03c-c456a4d97883","block_type":"box","text":"its obligation. A Fund may, but is not required to, purchase credit protection against the default of the","page_number":169,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"1be8b0f3-37f2-410b-8f61-7314c16e1823","block_type":"box","text":"issuer. When the participation note expires or a Fund exercises the participation note and closes its","page_number":169,"box":{"x":117,"y":304,"width":742,"height":12}},{"id":"6ba54abe-1498-4299-959a-dd622fbf318f","block_type":"box","text":"position, the Fund receives a payment that is based upon the then-current value of the underlying","page_number":169,"box":{"x":117,"y":320,"width":728,"height":12}},{"id":"54f304cc-e83c-4d7a-8ca0-c317b3381da3","block_type":"box","text":"security converted into U.S. dollars (less transaction costs). The price, performance and liquidity of a","page_number":169,"box":{"x":116,"y":335,"width":751,"height":12}},{"id":"9c59e49e-0202-4bf2-aa6c-01dd3d3f4096","block_type":"box","text":"participation note are all linked directly to the underlying security. A Fund’s ability to redeem or","page_number":169,"box":{"x":117,"y":351,"width":704,"height":12}},{"id":"bd7f3214-fbd0-4477-b7e5-ba8cb5c5acbf","block_type":"box","text":"exercise a participation note generally is dependent on the liquidity in the local trading market for the","page_number":169,"box":{"x":116,"y":366,"width":750,"height":12}},{"id":"d6dd08f1-4bb8-4c4f-a95d-a090f9e63810","block_type":"box","text":"security underlying the participation note.","page_number":169,"box":{"x":116,"y":382,"width":310,"height":12}},{"id":"a1f1ea73-1c0c-40c6-bddf-bda6b7c8dc0d","block_type":"box","text":"Portfolio Turnover Rates.","page_number":169,"box":{"x":116,"y":413,"width":201,"height":9}},{"id":"e0a28313-9d70-4708-88fc-b6d4dd410979","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale","page_number":169,"box":{"x":318,"y":413,"width":569,"height":12}},{"id":"1df21dde-913b-4656-b7f6-6ab4ade2545f","block_type":"box","text":"or purchase when the Manager believes investment considerations warrant such sale or purchase.","page_number":169,"box":{"x":116,"y":428,"width":738,"height":12}},{"id":"66ad2cef-172f-482d-99ea-0434ddd6638c","block_type":"box","text":"Although certain Funds will use an approach to investing that is largely a passive, indexing approach,","page_number":169,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"918c4e1b-c989-441e-a1ff-65215a63854c","block_type":"box","text":"such Funds may engage in a substantial number of portfolio transactions. With respect to these Funds,","page_number":169,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"346cd8fb-dde5-490e-bb09-b8fc3b569f37","block_type":"box","text":"the rate of portfolio turnover will be a limiting factor when the Manager considers whether to purchase","page_number":169,"box":{"x":116,"y":475,"width":759,"height":12}},{"id":"ec4de884-f206-464c-a8ad-a015f6786c1d","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":169,"box":{"x":116,"y":490,"width":756,"height":12}},{"id":"e795077f-9a40-433c-befa-e7af4c419ff3","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":169,"box":{"x":116,"y":506,"width":765,"height":12}},{"id":"a546518f-231e-4077-82b3-37179d3e0dc3","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":169,"box":{"x":116,"y":521,"width":305,"height":12}},{"id":"200de258-1d0c-422f-9ed5-3bf9e05312ea","block_type":"box","text":"i.e.","page_number":169,"box":{"x":422,"y":521,"width":21,"height":10}},{"id":"973f9106-ea48-4c29-907d-4d7a1b9b5c70","block_type":"box","text":", 100% or more) may result in increased transaction costs","page_number":169,"box":{"x":446,"y":521,"width":433,"height":12}},{"id":"9bf5fba6-2ffc-428b-a71d-2e540f93d820","block_type":"box","text":"to a Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale","page_number":169,"box":{"x":116,"y":537,"width":759,"height":12}},{"id":"e523a72b-7e16-46d8-afae-ba4032fa102c","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":169,"box":{"x":116,"y":552,"width":759,"height":12}},{"id":"3dbfc3a8-c5e0-4603-bd50-bc88a1958eb5","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":169,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"2de51e7e-86c4-4437-8a7c-e2700816cb09","block_type":"box","text":"term capital gain or loss. These effects of higher than normal portfolio turnover may adversely affect a","page_number":169,"box":{"x":116,"y":583,"width":761,"height":12}},{"id":"d1b9e8b4-1e2c-47a7-a878-67552865c752","block_type":"box","text":"Fund’s performance.","page_number":169,"box":{"x":117,"y":599,"width":158,"height":12}},{"id":"72d43859-10f0-4099-bac4-559a5fc37991","block_type":"box","text":"Preferred Stock.","page_number":169,"box":{"x":116,"y":630,"width":129,"height":9}},{"id":"7095404f-37eb-4e80-9cf7-66fe4e57f518","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over","page_number":169,"box":{"x":246,"y":630,"width":635,"height":12}},{"id":"1f70f4a3-62e5-4bc0-9524-fd70c67dc674","block_type":"box","text":"common stock in liquidation (and generally dividends as well) but is subordinated to bond holders and","page_number":169,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"5b429c3b-a0a0-4939-901c-6d29f55a8e70","block_type":"box","text":"other creditors in all respects. As a general rule,","page_number":169,"box":{"x":116,"y":661,"width":355,"height":12}},{"id":"c896d939-b5b7-4e89-baf5-938565b0daf1","block_type":"box","text":"the market value of preferred stock with a fixed","page_number":169,"box":{"x":477,"y":661,"width":348,"height":12}},{"id":"f25d9ec3-30e5-4da3-a058-697e1a2383e1","block_type":"box","text":"dividend rate and no conversion element varies inversely with interest rates and perceived credit risk,","page_number":169,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"d0da9de8-eded-4d7e-bd7e-912bbad19b52","block_type":"box","text":"while the market price of convertible preferred stock generally also reflects some element of","page_number":169,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"d01f3abf-9c86-4880-a56c-25bbf9a9735e","block_type":"box","text":"conversion value. Because preferred stock is junior to debt securities and other obligations of the","page_number":169,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"fafa1a83-a53f-4620-84a9-1d8f66d4623f","block_type":"box","text":"issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a","page_number":169,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"14ff7d08-015b-43d1-940e-e882350246db","block_type":"box","text":"preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike","page_number":169,"box":{"x":117,"y":738,"width":720,"height":12}},{"id":"3283025f-11d3-4b5e-92fe-5ab9100895cb","block_type":"box","text":"interest payments on debt securities, preferred stock dividends are payable only if declared by the","page_number":169,"box":{"x":117,"y":754,"width":726,"height":12}},{"id":"f08ffbdc-d22f-413f-ab7c-ed7056eb1e9b","block_type":"box","text":"issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption","page_number":169,"box":{"x":117,"y":769,"width":743,"height":12}},{"id":"e4160828-9c6c-4cc7-9415-c7c6af5b22c3","block_type":"box","text":"provisions.","page_number":169,"box":{"x":117,"y":785,"width":78,"height":12}},{"id":"0ec1c498-6174-4f33-91fd-bbe6cc364160","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":169,"box":{"x":118,"y":816,"width":224,"height":12}},{"id":"08fb3b28-4712-4ec7-9c65-b058188183f8","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment","page_number":169,"box":{"x":350,"y":816,"width":497,"height":12}},{"id":"6db9a920-7673-4f77-a99f-d20bc21244e5","block_type":"box","text":"funds that pay dividends that are exempt from regular U.S. federal income tax. Such funds in turn","page_number":169,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"6b67daaa-03b4-4434-88ce-c7131bf02054","block_type":"box","text":"invest in municipal bonds and other assets that pay interest or make distributions that are exempt from","page_number":169,"box":{"x":117,"y":847,"width":765,"height":12}},{"id":"eae81474-2027-4ff5-9135-860880fc73fa","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":169,"box":{"x":117,"y":862,"width":751,"height":12}},{"id":"5eb20d04-4ad0-4d50-a0e4-0d35546899b5","block_type":"box","text":"development of low-income, multi-family housing. Investment in such tax-exempt preferred shares","page_number":169,"box":{"x":116,"y":878,"width":733,"height":12}},{"id":"bf8b0c00-f433-4145-85ac-61ae913cb727","block_type":"box","text":"II-83","page_number":169,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bc6e6cc9-8efb-4ebd-a677-62172c3fcc2e","block_type":"box","text":"NM1026U-6042785-169/259","page_number":169,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"50bb6876-11d8-4c75-a572-5bdff0eda291","block_type":"box","text":"involves many of the same issues as investing in other investment companies. These investments also","page_number":170,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"1eca7983-205b-4b3b-9a99-f1987bc83be7","block_type":"box","text":"have additional risks, including illiquid investments risk, the absence of regulation governing","page_number":170,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"5050cb9d-390e-4b74-9785-d979d45fb13d","block_type":"box","text":"investment practices, capital structure and leverage, affiliated transactions and other matters, and","page_number":170,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"7bc395be-bcc8-4930-b090-86143d063b2b","block_type":"box","text":"concentration of investments in particular issuers or industries. The Municipal Bond Funds will treat","page_number":170,"box":{"x":116,"y":134,"width":740,"height":11}},{"id":"80fe34c7-4820-4a54-a3ce-67b0a74d5dfd","block_type":"box","text":"investments in tax-exempt preferred shares as investments in municipal bonds.","page_number":170,"box":{"x":117,"y":149,"width":593,"height":12}},{"id":"58613c7f-69ce-422e-b9e2-bc8454d5231e","block_type":"box","text":"Trust Preferred Securities.","page_number":170,"box":{"x":118,"y":180,"width":193,"height":10}},{"id":"e20672d7-2138-40f9-9404-2cdd82f5c1c9","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred","page_number":170,"box":{"x":312,"y":180,"width":525,"height":12}},{"id":"d4fad628-f4a9-4556-961f-da9a28425f41","block_type":"box","text":"securities are typically issued by corporations, generally in the form of interest bearing notes with","page_number":170,"box":{"x":116,"y":196,"width":724,"height":12}},{"id":"200ae6f7-b930-4b47-bc56-c48df324d3f3","block_type":"box","text":"preferred securities characteristics, or by an affiliated business trust of a corporation, generally in the","page_number":170,"box":{"x":117,"y":211,"width":751,"height":12}},{"id":"63514058-0f56-4780-b148-5b9e67387e63","block_type":"box","text":"form of beneficial interests in subordinated debentures or similarly structured securities. The trust","page_number":170,"box":{"x":116,"y":227,"width":726,"height":12}},{"id":"14586eb1-bcbc-4920-91f7-f3ebd9bcb188","block_type":"box","text":"preferred securities market consists of both fixed and adjustable coupon rate securities that are either","page_number":170,"box":{"x":117,"y":242,"width":758,"height":12}},{"id":"a4494c80-baee-42fb-8175-965ceb1d3eb6","block_type":"box","text":"perpetual in nature or have stated maturity dates.","page_number":170,"box":{"x":117,"y":258,"width":370,"height":12}},{"id":"4433b9b6-2230-46aa-a6dc-d89119740067","block_type":"box","text":"Trust preferred securities are typically junior and fully subordinated liabilities of an issuer and benefit","page_number":170,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"ee50c756-dd9e-4051-99cf-04e9e123d2f7","block_type":"box","text":"from a guarantee that is junior and fully subordinated to the other liabilities of the guarantor. In addition,","page_number":170,"box":{"x":116,"y":304,"width":771,"height":12}},{"id":"c807db1f-fb2e-413e-8e4c-99213ef2cdc5","block_type":"box","text":"trust preferred securities typically permit an issuer to defer the payment of income for five years or","page_number":170,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"98371b12-38fc-489e-9776-e355f8cc6853","block_type":"box","text":"more without triggering an event of default. Because of their subordinated position in the capital","page_number":170,"box":{"x":117,"y":335,"width":713,"height":12}},{"id":"6ca7fd92-7b9a-41e9-9014-606e13eaa25a","block_type":"box","text":"structure of an issuer, the ability to defer payments for extended periods of time without default","page_number":170,"box":{"x":116,"y":351,"width":708,"height":12}},{"id":"2f943b10-ddd7-4513-a4a3-acb36023e805","block_type":"box","text":"consequences to the issuer, and certain other features (such as restrictions on common dividend","page_number":170,"box":{"x":116,"y":366,"width":725,"height":12}},{"id":"193e444e-fdcf-4025-ae5e-5b6752e3e884","block_type":"box","text":"payments by the issuer or ultimate guarantor when full cumulative payments on the trust preferred","page_number":170,"box":{"x":117,"y":382,"width":733,"height":12}},{"id":"8e5a7b57-8115-4a03-8e88-286397bae2b5","block_type":"box","text":"securities have not been made), these trust preferred securities are often treated as close substitutes","page_number":170,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"f5794650-5c3d-430b-be45-2828ea1f8dd8","block_type":"box","text":"for traditional preferred securities, both by issuers and investors.","page_number":170,"box":{"x":116,"y":413,"width":483,"height":12}},{"id":"6e7b288b-8c61-41e8-9dd0-89f18b9e1b41","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":170,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"7c38e9e5-4a03-43e1-a88c-1fae28bcb084","block_type":"box","text":"®","page_number":170,"box":{"x":857,"y":443,"width":9,"height":7}},{"id":"00bac498-0ccd-4bd0-8840-f0c11d3c4bc0","block_type":"box","text":"”);","page_number":170,"box":{"x":867,"y":444,"width":20,"height":12}},{"id":"5a780577-7440-4439-bb12-ea8fb0f8680f","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":170,"box":{"x":117,"y":459,"width":322,"height":12}},{"id":"729ae93e-e67c-4540-a350-e07e1cc9bdf7","block_type":"box","text":"®","page_number":170,"box":{"x":439,"y":458,"width":10,"height":7}},{"id":"968cc49d-734e-48cc-83eb-ee737314f49f","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":170,"box":{"x":449,"y":459,"width":330,"height":12}},{"id":"c626259e-53fe-4a3c-8999-82c2cc09e96e","block_type":"box","text":"®","page_number":170,"box":{"x":780,"y":458,"width":9,"height":7}},{"id":"da87741a-04d1-4b0b-97ce-eb842dc1134e","block_type":"box","text":"” ); quarterly","page_number":170,"box":{"x":790,"y":459,"width":95,"height":12}},{"id":"7753cf0b-b3f3-4ec5-9193-992f38726ccd","block_type":"box","text":"income debt securities (“QUIDS","page_number":170,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"1e1b17fa-cc68-4893-b0d9-eb16a0b19280","block_type":"box","text":"®","page_number":170,"box":{"x":352,"y":474,"width":10,"height":7}},{"id":"a69a0333-692f-4117-ae94-0ff94dd5d000","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":170,"box":{"x":362,"y":475,"width":361,"height":12}},{"id":"e2386647-acb3-49a5-8047-bcaeb2d8e087","block_type":"box","text":"SM","page_number":170,"box":{"x":724,"y":475,"width":16,"height":6}},{"id":"e0e4d581-56c2-4756-a0ef-59c40e8751fb","block_type":"box","text":"”); corporate trust","page_number":170,"box":{"x":741,"y":475,"width":133,"height":12}},{"id":"aeed9338-62b9-43e9-bd30-308745050f13","block_type":"box","text":"securities (“CORTS","page_number":170,"box":{"x":116,"y":490,"width":145,"height":12}},{"id":"d68fd8ce-12b8-4ad5-8fbb-ae511100f366","block_type":"box","text":"®","page_number":170,"box":{"x":262,"y":489,"width":9,"height":7}},{"id":"52098a82-7976-4128-91ef-cda6c2b397f9","block_type":"box","text":"”); public income notes (“PINES","page_number":170,"box":{"x":271,"y":490,"width":235,"height":12}},{"id":"a24ad286-b8c2-4270-8c88-a6b53700ceeb","block_type":"box","text":"®","page_number":170,"box":{"x":507,"y":489,"width":9,"height":7}},{"id":"9d0f9e0d-7bd4-4dc5-b264-4a1de47e0759","block_type":"box","text":"”); and other trust preferred securities.","page_number":170,"box":{"x":517,"y":490,"width":287,"height":12}},{"id":"8984b303-03eb-479d-8f33-16f2e4bd0ad8","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in","page_number":170,"box":{"x":116,"y":521,"width":766,"height":12}},{"id":"75c4073a-1ec1-4402-867c-18dd41d52e82","block_type":"box","text":"nature. In certain instances, a final maturity date may be extended and/or the final payment of principal","page_number":170,"box":{"x":117,"y":537,"width":767,"height":12}},{"id":"0f3c83f2-90b5-4818-9619-7092370a6034","block_type":"box","text":"may be deferred at the issuer’s option for a specified time without default. No redemption can typically","page_number":170,"box":{"x":117,"y":552,"width":760,"height":12}},{"id":"8ddbccef-676d-441b-912b-3947f50a06c3","block_type":"box","text":"take place unless all cumulative payment obligations have been met, although issuers may be able to","page_number":170,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"fcdcd420-5f3c-473e-be12-7607b4ec1e9a","block_type":"box","text":"engage in open-market repurchases without regard to whether all payments have been paid.","page_number":170,"box":{"x":116,"y":583,"width":693,"height":12}},{"id":"24c40cd3-3ee5-4293-890e-aba88dc72a92","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by","page_number":170,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"3e0ecfa1-c06e-48a4-bbc1-73d469a34800","block_type":"box","text":"operating companies and are not a direct obligation of an operating company. At the time the trust or","page_number":170,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"50e6af61-3dae-49dd-9ffb-df419a8405aa","block_type":"box","text":"special purpose entity sells such preferred securities to investors, it purchases debt of the operating","page_number":170,"box":{"x":116,"y":645,"width":745,"height":12}},{"id":"56742669-9770-43f2-a525-c3a672b36528","block_type":"box","text":"company (with terms comparable to those of the trust or special purpose entity securities), which","page_number":170,"box":{"x":116,"y":661,"width":717,"height":12}},{"id":"48a08331-8f3c-48d8-b6c6-f4dcf2b648a6","block_type":"box","text":"enables the operating company to deduct for tax purposes the interest paid on the debt held by the","page_number":170,"box":{"x":116,"y":676,"width":734,"height":12}},{"id":"668e1788-e906-4893-af3a-71e6b9c94dbe","block_type":"box","text":"trust or special purpose entity. The trust or special purpose entity is generally required to be treated as","page_number":170,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"5c7259f8-89a4-4ad5-8e83-f5d19e9b0695","block_type":"box","text":"transparent for U.S. federal income tax purposes such that the holders of the trust preferred securities","page_number":170,"box":{"x":116,"y":707,"width":757,"height":12}},{"id":"ccb338a5-54a6-4abe-afef-cdb8edbbb229","block_type":"box","text":"are treated as owning beneficial interests in the underlying debt of the operating company. Accordingly,","page_number":170,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"3452e7bc-2708-4897-9503-88c24f485826","block_type":"box","text":"payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":170,"box":{"x":117,"y":738,"width":757,"height":12}},{"id":"85116979-5bfd-4217-8e89-1e4a22860d76","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating","page_number":170,"box":{"x":117,"y":754,"width":727,"height":12}},{"id":"406bbd2c-c2d5-4f85-b472-11aae833b568","block_type":"box","text":"company’s debt and would have priority with respect to the operating company’s earnings and profits","page_number":170,"box":{"x":116,"y":769,"width":748,"height":12}},{"id":"a45f37a2-00d8-4030-8c3d-5917dd7744f7","block_type":"box","text":"over the operating company’s common shareholders, but would typically be subordinated to other","page_number":170,"box":{"x":116,"y":785,"width":725,"height":12}},{"id":"58f52d00-a4b1-43ff-bc86-e1e69e1d5797","block_type":"box","text":"classes of the operating company’s debt. Typically a preferred share has a rating that is slightly below","page_number":170,"box":{"x":116,"y":800,"width":756,"height":12}},{"id":"74d0f45e-2c8c-4755-bbeb-c1bbb701f7be","block_type":"box","text":"that of its corresponding operating company’s senior debt securities.","page_number":170,"box":{"x":116,"y":816,"width":506,"height":12}},{"id":"603a8f32-1feb-4c01-aa8f-be38e11655e6","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":170,"box":{"x":116,"y":847,"width":324,"height":12}},{"id":"901df1a9-0bf9-45c5-9047-057bf02a83d6","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in","page_number":170,"box":{"x":441,"y":847,"width":430,"height":12}},{"id":"b978aa76-6b22-4c74-ba5b-6b94ed510487","block_type":"box","text":"shares of REITs. REITs possess certain risks which differ from an investment in common stocks.","page_number":170,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"b62c9973-6a9d-44ea-b8c6-ce2893f7953f","block_type":"box","text":"REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may","page_number":170,"box":{"x":117,"y":878,"width":756,"height":12}},{"id":"90960f42-e003-474f-a7c7-8137a2685ad9","block_type":"box","text":"II-84","page_number":170,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f17325fb-ef44-4082-8a6d-28f1ed09776a","block_type":"box","text":"NM1026U-6042785-170/259","page_number":170,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6ccf9dca-b142-47e6-88f1-7d234ffb17e8","block_type":"box","text":"concentrate their investments in specific geographic areas or in specific property types,","page_number":171,"box":{"x":116,"y":87,"width":652,"height":12}},{"id":"2bd6988b-0b0f-4227-9406-5589f899ecb0","block_type":"box","text":"i.e.","page_number":171,"box":{"x":768,"y":87,"width":21,"height":10}},{"id":"a3a2f4db-5fcf-44ec-b424-bfd71cae13fd","block_type":"box","text":", hotels,","page_number":171,"box":{"x":792,"y":87,"width":62,"height":11}},{"id":"be4bbdd6-75e0-4a54-9625-a4e51b5cf2be","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":171,"box":{"x":116,"y":102,"width":441,"height":13}},{"id":"13a60878-3866-4aa1-8393-6eedb14233b7","block_type":"box","text":"REITs are subject to management fees and other expenses, and so a Fund that invests in REITs will","page_number":171,"box":{"x":117,"y":134,"width":752,"height":12}},{"id":"6d962217-fefb-4d02-b13e-276dc9d11c26","block_type":"box","text":"bear its proportionate share of the costs of the REITs’ operations. There are three general categories","page_number":171,"box":{"x":117,"y":149,"width":754,"height":12}},{"id":"7813be92-bbde-4445-bc97-bfa4691a37bd","block_type":"box","text":"of REITs: Equity REITs, Mortgage REITs and Hybrid REITs. Equity REITs invest primarily in direct fee","page_number":171,"box":{"x":116,"y":165,"width":763,"height":12}},{"id":"b673111f-7bca-463f-b23a-db8798bc0a55","block_type":"box","text":"ownership or leasehold ownership of real property, which derive most of their income from rents.","page_number":171,"box":{"x":116,"y":180,"width":721,"height":12}},{"id":"9050bf1b-1271-42a9-bb99-4ad027cd5ce7","block_type":"box","text":"Mortgage REITs invest mostly in mortgages on real estate, which may secure construction,","page_number":171,"box":{"x":117,"y":196,"width":681,"height":12}},{"id":"d19576e5-7c50-468d-a8a7-ca31e8a945d2","block_type":"box","text":"development or long-term loans; the main source of their income is mortgage interest payments.","page_number":171,"box":{"x":116,"y":211,"width":720,"height":12}},{"id":"eaa230a6-b893-4475-8cf2-a38b12093645","block_type":"box","text":"Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":171,"box":{"x":117,"y":227,"width":541,"height":12}},{"id":"c6496963-4d3c-4375-ba77-01b613d066e8","block_type":"box","text":"Investing in REITs involves certain unique risks in addition to those risks associated with investing in","page_number":171,"box":{"x":117,"y":258,"width":749,"height":12}},{"id":"a8bd63ff-d76a-419d-887b-430aa57c2942","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":171,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"eae2f9c4-1220-4ec1-bd1e-b1eda33f6cb5","block_type":"box","text":"distribute income may be adversely affected by several factors, including rising interest rates, changes","page_number":171,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"171b19b4-051f-4975-84ea-4befab4a4b5c","block_type":"box","text":"in the national, state and local economic climate and real estate conditions, occupancy and rental","page_number":171,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"81e5b76c-fc7e-4ba0-b478-05c318309e71","block_type":"box","text":"rates, perceptions of prospective tenants of the safety, convenience and attractiveness of the","page_number":171,"box":{"x":117,"y":320,"width":695,"height":12}},{"id":"9e17e376-15e6-4fc3-86df-69397bc22cef","block_type":"box","text":"properties, the ability of the owners to provide adequate management, maintenance and insurance, the","page_number":171,"box":{"x":117,"y":335,"width":770,"height":12}},{"id":"33b600ce-aa5d-4e2d-857a-99bedc45dcb1","block_type":"box","text":"cost of complying with the Americans with Disabilities Act, increased competition from new properties,","page_number":171,"box":{"x":116,"y":351,"width":761,"height":12}},{"id":"3fad433e-d18b-4a76-aa64-ce79d701bb1a","block_type":"box","text":"the impact of present or future environmental legislation and compliance with environmental laws,","page_number":171,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"652b6d5d-e3c5-49d9-bae6-588101eae731","block_type":"box","text":"failing to maintain their exemptions from registration under the Investment Company Act, changes in","page_number":171,"box":{"x":116,"y":382,"width":749,"height":12}},{"id":"1317e027-85ab-4c9b-a18b-30ed9745a72d","block_type":"box","text":"real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal","page_number":171,"box":{"x":117,"y":397,"width":733,"height":12}},{"id":"8f9bae03-939c-4297-9ee5-528ca52c6cba","block_type":"box","text":"policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the","page_number":171,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"40a57350-25c1-4520-a79e-ee2ef8d99371","block_type":"box","text":"REITs. To the extent that assets underlying a REIT are concentrated geographically, by property type,","page_number":171,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"428c2798-c0f4-46f0-920d-ed831ab8a072","block_type":"box","text":"or in certain other respects, these risks may be heightened.","page_number":171,"box":{"x":116,"y":444,"width":446,"height":12}},{"id":"f4936ab2-171d-4c86-be72-fdec96439a05","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or","page_number":171,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"575a5c7e-82c1-4fee-9179-466cf2e09727","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":171,"box":{"x":117,"y":490,"width":760,"height":12}},{"id":"675460b9-e5d2-41e4-b6a7-fbf98b5c1124","block_type":"box","text":"companies, to the extent application of the Fund’s investment strategy results in the Fund investing in","page_number":171,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"f7df1fe6-837e-4f83-9c75-489579cdaecc","block_type":"box","text":"REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely","page_number":171,"box":{"x":117,"y":521,"width":722,"height":12}},{"id":"ed94d103-26d3-449e-bbc0-cf9fdc5ff768","block_type":"box","text":"exceed the percentage of the Fund’s portfolio which is comprised of REIT shares. Ordinary REIT","page_number":171,"box":{"x":116,"y":537,"width":723,"height":12}},{"id":"5cb13a1b-e65d-41e6-8888-06067f1d300d","block_type":"box","text":"dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as","page_number":171,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"036a0460-2a79-4243-b9b1-3e641b3a3b04","block_type":"box","text":"ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer","page_number":171,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"20aab3f0-c291-4bf3-aa17-0ba4e6975184","block_type":"box","text":"who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary","page_number":171,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"ef865ff3-b020-4290-8a7c-b673ade4b769","block_type":"box","text":"REIT dividends, and a regulated investment company may report dividends as eligible for this","page_number":171,"box":{"x":117,"y":599,"width":698,"height":12}},{"id":"72c2a784-8abf-47d3-820c-99b1af4d563b","block_type":"box","text":"deduction to the extent the regulated investment company’s income is derived from ordinary REIT","page_number":171,"box":{"x":116,"y":614,"width":731,"height":12}},{"id":"8dc592b7-a3fb-4a96-9783-4657da1861e4","block_type":"box","text":"dividends (reduced by allocable regulated investment company expenses). A shareholder may treat","page_number":171,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"b44b7596-7054-49f1-a698-4915d1240d10","block_type":"box","text":"the dividends as such provided the regulated investment company and the shareholder satisfy","page_number":171,"box":{"x":116,"y":645,"width":704,"height":12}},{"id":"519d22ca-ef9c-4061-84b8-58ff5fd7539e","block_type":"box","text":"applicable holding period requirements.","page_number":171,"box":{"x":116,"y":661,"width":292,"height":12}},{"id":"577339ee-11e9-438b-bb89-2891d4d8a12e","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may","page_number":171,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"76b417b8-76c4-4a86-abbb-027cf06cfa86","block_type":"box","text":"cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the","page_number":171,"box":{"x":116,"y":707,"width":720,"height":12}},{"id":"7cc21519-4a26-45e3-b980-34c66f81de8c","block_type":"box","text":"market price of the equity securities issued by a REIT. Rising interest rates also generally increase the","page_number":171,"box":{"x":117,"y":723,"width":759,"height":12}},{"id":"091bf091-c4e7-4990-8047-faca7a0a4b15","block_type":"box","text":"costs of obtaining financing, which could cause the value of a Fund’s REIT investments to decline.","page_number":171,"box":{"x":116,"y":738,"width":728,"height":12}},{"id":"9bd89015-0ff3-4ca4-b927-c72f9a256f76","block_type":"box","text":"During periods when interest rates are declining, mortgages are often refinanced. Refinancing may","page_number":171,"box":{"x":117,"y":754,"width":733,"height":12}},{"id":"803e7697-c896-46a0-acb0-b71526f19866","block_type":"box","text":"reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment","page_number":171,"box":{"x":117,"y":769,"width":721,"height":12}},{"id":"d68236f5-31a6-4207-ae3e-0c0185d0e089","block_type":"box","text":"under their mortgage loans and leases to generate cash to make distributions to their shareholders,","page_number":171,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"6872f4b6-69e3-42db-95e1-2f30b5fd0c97","block_type":"box","text":"investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":171,"box":{"x":117,"y":800,"width":706,"height":12}},{"id":"a7e2f88d-7f18-44b8-aebb-ef35dcbea732","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same","page_number":171,"box":{"x":117,"y":831,"width":741,"height":12}},{"id":"e4772b27-2dce-4947-92c2-500bd875c781","block_type":"box","text":"risks as investing in other small capitalization companies. REITs may have limited financial resources","page_number":171,"box":{"x":117,"y":847,"width":749,"height":12}},{"id":"7c1eafce-8fcf-4aff-a667-a69300744fb1","block_type":"box","text":"and their securities may trade less frequently and in limited volume and may be subject to more abrupt","page_number":171,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"15c99a70-cf26-47ce-abae-94cd4ec73353","block_type":"box","text":"or erratic price movements than larger company securities. Historically, small capitalization stocks, such","page_number":171,"box":{"x":116,"y":878,"width":768,"height":12}},{"id":"519eddff-a26a-4e76-96aa-a2f688f7bc18","block_type":"box","text":"II-85","page_number":171,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7da3f9e8-0bf0-486f-a0b5-161e1bfa329a","block_type":"box","text":"NM1026U-6042785-171/259","page_number":171,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5c953943-087d-4c83-a7bf-ff2e535196d8","block_type":"box","text":"as REITs, have been more volatile in price than the larger capitalization stocks such as those included","page_number":172,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"20491048-0274-40c3-9e7f-3ef997a2c475","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":172,"box":{"x":117,"y":102,"width":764,"height":13}},{"id":"af5c9227-dfd7-4328-98f5-f411db93fa53","block_type":"box","text":"the operation of the business of the REIT and may be involved in real estate activities competitive with","page_number":172,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"08a58f0c-bb15-4493-b034-6bcd1774753f","block_type":"box","text":"the REIT. REITs may own properties through joint ventures or in other circumstances in which the REIT","page_number":172,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"2aa96bed-8b6e-403f-a1d6-fe957e1c5e54","block_type":"box","text":"may not have control over its investments. REITs may incur significant amounts of leverage.","page_number":172,"box":{"x":117,"y":149,"width":681,"height":12}},{"id":"5ff5a492-b0f6-45f6-826b-1760b1032f84","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":172,"box":{"x":116,"y":180,"width":293,"height":10}},{"id":"d0fc1444-be00-4c5f-9c88-1bace87b7102","block_type":"box","text":"Securities may decline in value due to factors affecting","page_number":172,"box":{"x":409,"y":180,"width":410,"height":12}},{"id":"fd60debe-ae26-4f07-be40-c0dadf86bcd6","block_type":"box","text":"securities markets generally or particular industries represented in the markets. The value of a security","page_number":172,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"10474af5-27d6-4901-9319-02b87f071b00","block_type":"box","text":"may decline due to general market conditions, economic trends or events that are not specifically","page_number":172,"box":{"x":117,"y":211,"width":725,"height":12}},{"id":"9819c71a-7e21-49ad-aa92-1dd3d8b970df","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":172,"box":{"x":117,"y":227,"width":754,"height":12}},{"id":"587e5252-1566-4dac-831e-0bf4269f061e","block_type":"box","text":"particular issuer or issuers, exchange, country, group of countries, region, market, industry, group of","page_number":172,"box":{"x":117,"y":242,"width":748,"height":12}},{"id":"84c42efc-a488-4794-b147-75b0a7b9c54b","block_type":"box","text":"industries, sector or asset class. The success of a Fund’s activities could be affected by interest rates,","page_number":172,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"76a5dcbd-0d6f-4d7d-a0d0-b879ddfac1ac","block_type":"box","text":"availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, economic","page_number":172,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"7913dac0-e9b4-4c7e-a6a0-7dab9559b75c","block_type":"box","text":"sanctions, currency exchange controls, and local, regional or global events such as war, acts of","page_number":172,"box":{"x":116,"y":289,"width":714,"height":12}},{"id":"7cf6eafb-8501-44e5-98f1-1e5ac2c0df2d","block_type":"box","text":"terrorism, natural and environmental disasters, the spread of infectious illness or other public health","page_number":172,"box":{"x":116,"y":304,"width":744,"height":12}},{"id":"2805cd8d-6672-4aa6-a93e-60e1dbf9e6e9","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments.","page_number":172,"box":{"x":117,"y":320,"width":730,"height":12}},{"id":"f6608677-52f2-432d-8a4b-065a7422ea6f","block_type":"box","text":"During a general economic downturn in the securities markets, multiple asset classes may be","page_number":172,"box":{"x":117,"y":335,"width":698,"height":12}},{"id":"1215de7b-085a-48f6-8d34-ee9a395f7547","block_type":"box","text":"negatively affected. These factors may affect the level and volatility of securities prices and the liquidity","page_number":172,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"55b8649a-40fc-4739-b005-c82f883f445a","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":172,"box":{"x":116,"y":366,"width":734,"height":12}},{"id":"cca52662-4dec-4e50-9f1f-abc699b11dbd","block_type":"box","text":"maintain substantial trading positions that can be adversely affected by the level of volatility in the","page_number":172,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"4d160e0d-0017-4c88-bf66-371a1db8b1bb","block_type":"box","text":"financial markets; the larger the positions, the greater the potential for loss. Unpredictable or unstable","page_number":172,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"7c97b84f-ea82-4519-97f2-cbf5cc597474","block_type":"box","text":"market conditions may result in reduced opportunities to find suitable investments to deploy capital or","page_number":172,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"fed84231-c8c3-463e-b711-57bb8126f6d4","block_type":"box","text":"make it more difficult to exit and realize value","page_number":172,"box":{"x":117,"y":428,"width":339,"height":10}},{"id":"f4389230-2e38-4124-89ca-c41db4cd0f34","block_type":"box","text":"from a Fund’s existing investments. It is important to","page_number":172,"box":{"x":456,"y":428,"width":394,"height":12}},{"id":"a9e4f05d-6688-4a4d-81d6-b67f866b9173","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions","page_number":172,"box":{"x":117,"y":444,"width":754,"height":12}},{"id":"c48834ee-f63e-4cee-b336-1207757805e7","block_type":"box","text":"and there can be no assurance that a Fund will not suffer material adverse effects from broad and","page_number":172,"box":{"x":116,"y":459,"width":732,"height":10}},{"id":"09cb5e2e-c5ac-4f09-8dcb-8ec813b30dfc","block_type":"box","text":"rapid changes in market conditions.","page_number":172,"box":{"x":117,"y":475,"width":268,"height":12}},{"id":"e82248cf-895d-4dab-aabd-a2260ad2dc01","block_type":"box","text":"Periods of unusually high volatility in the financial","page_number":172,"box":{"x":117,"y":506,"width":359,"height":12}},{"id":"ace9ac60-b543-43d5-887f-d687e6d94481","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":172,"box":{"x":477,"y":506,"width":381,"height":11}},{"id":"3f1a5a15-c79f-46c4-91f9-e0e1c031b555","block_type":"box","text":"limited to a particular sector or a geography, can o","page_number":172,"box":{"x":117,"y":521,"width":364,"height":12}},{"id":"26eba6aa-cb7a-4454-a66c-3ba6c4c9ce50","block_type":"box","text":"ccur. Some countries, including the United States,","page_number":172,"box":{"x":482,"y":521,"width":368,"height":12}},{"id":"d3f07dce-8fee-4e6b-8c50-3d969cde54fd","block_type":"box","text":"have adopted and/or are considering the adoption of more","page_number":172,"box":{"x":117,"y":537,"width":422,"height":12}},{"id":"c6c65fd2-8ddb-4747-b5ff-ff8cd43c1a43","block_type":"box","text":"protectionist trade policies, a move away from","page_number":172,"box":{"x":539,"y":537,"width":344,"height":12}},{"id":"4088ba25-bd7f-43cb-888e-597d5feb231d","block_type":"box","text":"the tighter financial industry regulations that follow","page_number":172,"box":{"x":116,"y":552,"width":363,"height":12}},{"id":"08663c6b-5d8c-49df-8e0b-11c4d200458e","block_type":"box","text":"ed the financial crisis of","page_number":172,"box":{"x":480,"y":552,"width":174,"height":10}},{"id":"4e799628-5930-4b2f-ab72-98cf27ad5398","block_type":"box","text":"2008, and/or substantially","page_number":172,"box":{"x":654,"y":552,"width":192,"height":12}},{"id":"3050c567-86a7-42ee-8d0a-155df08412aa","block_type":"box","text":"reducing corporate taxes. The exact shape of these","page_number":172,"box":{"x":117,"y":568,"width":379,"height":12}},{"id":"f7cd1b50-319c-4717-a23a-47b753a3706d","block_type":"box","text":"policies is still being considered, but the equity and","page_number":172,"box":{"x":497,"y":568,"width":372,"height":12}},{"id":"da9e0712-1825-4389-8fbd-8e107693296e","block_type":"box","text":"debt markets may react strongly to expectations of c","page_number":172,"box":{"x":116,"y":583,"width":381,"height":12}},{"id":"6a5694a9-4d68-43ef-8fc1-6ccd4bc155ab","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":172,"box":{"x":498,"y":583,"width":367,"height":12}},{"id":"7b214b9c-c947-40dd-8f8c-12d1ac4487df","block_type":"box","text":"the market’s expectations are not borne out. A rise in","page_number":172,"box":{"x":116,"y":599,"width":384,"height":12}},{"id":"80335e83-4978-4160-b413-57acc6875ae8","block_type":"box","text":"protectionist trade policies, and the possibility of","page_number":172,"box":{"x":501,"y":599,"width":357,"height":12}},{"id":"f87b46a9-15d0-472d-8190-5d3d693178a1","block_type":"box","text":"changes to some international trade agreements, coul","page_number":172,"box":{"x":116,"y":614,"width":392,"height":12}},{"id":"26b4ae7e-d204-406b-bf1f-3967281eef82","block_type":"box","text":"d affect the economies of many nations in ways","page_number":172,"box":{"x":509,"y":614,"width":350,"height":12}},{"id":"fc5ebecb-9777-45d4-ac64-6fef54357f90","block_type":"box","text":"that cannot necessarily be foreseen at the present","page_number":172,"box":{"x":116,"y":630,"width":370,"height":12}},{"id":"ccaab3b8-258f-4fc7-a8ca-382c077a33e2","block_type":"box","text":"time. 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A downgrade of the ratings of U.S. Government debt","page_number":173,"box":{"x":117,"y":87,"width":732,"height":12}},{"id":"e8549d69-6051-4ba0-a7ab-b530d2186503","block_type":"box","text":"obligations, or concerns about the U.S. Government’s credit quality in general, could have a substantial","page_number":173,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"0ba9b069-af26-4b9c-bdfc-61968286a453","block_type":"box","text":"negative effect on the U.S. and global economies. For example, concerns about the U.S. Government’s","page_number":173,"box":{"x":117,"y":118,"width":764,"height":12}},{"id":"9705eec8-0f8f-4acc-bfb3-594d066cb02d","block_type":"box","text":"credit quality may cause increased volatility in the stock and bond markets, higher interest rates,","page_number":173,"box":{"x":116,"y":134,"width":712,"height":12}},{"id":"81d35718-6141-4b96-941e-ecf91a08e900","block_type":"box","text":"reduced prices and liquidity of U.S. Treasury securities, and/or increased costs of various kinds of debt.","page_number":173,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"e7b2bffc-57a3-4311-a2e2-11d083bfa2ec","block_type":"box","text":"Moreover, although the U.S. Government has honored its credit obligations, there remains a possibility","page_number":173,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"6fbf8cb2-83ce-42a5-a109-88816f0f74ee","block_type":"box","text":"that the United States could default on its obligations. 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The impact of this coronavirus, and other","page_number":173,"box":{"x":116,"y":285,"width":727,"height":13}},{"id":"5c7566e6-1975-4c95-b911-35e58af16fd9","block_type":"box","text":"epidemics and pandemics that may arise in the future, could affect the economies of many nations,","page_number":173,"box":{"x":116,"y":301,"width":741,"height":12}},{"id":"d261a3e8-484a-4dd8-a9ef-107048735087","block_type":"box","text":"individual companies and the market in general in ways that cannot necessarily be foreseen at the","page_number":173,"box":{"x":117,"y":316,"width":733,"height":13}},{"id":"c954a2dd-4da0-4436-8e57-35c595294a2d","block_type":"box","text":"present time. These health crises may be short term or long term, and may exacerbate other pre","page_number":173,"box":{"x":117,"y":332,"width":721,"height":12}},{"id":"463e2685-ac0b-4277-b7b7-35b53255a2e7","block_type":"box","text":"existing political, social and economic risks, disrupt normal market conditions and operations, and","page_number":173,"box":{"x":116,"y":348,"width":729,"height":12}},{"id":"83218534-491c-45e9-b24a-31dcd03bbe32","block_type":"box","text":"negatively impact performance. In addition, the impact of infectious diseases in emerging developing or","page_number":173,"box":{"x":117,"y":363,"width":771,"height":12}},{"id":"7a74b17b-d42c-4698-ab56-abea41292dc5","block_type":"box","text":"emerging market countries may be greater due to less established health care systems.","page_number":173,"box":{"x":116,"y":379,"width":657,"height":12}},{"id":"85d8892c-725c-4480-8fdb-744b28bfe952","block_type":"box","text":"Legal and Regulatory Risks.","page_number":173,"box":{"x":116,"y":407,"width":208,"height":11}},{"id":"2bf80765-8521-4be2-afa8-d8b5f59cf0e1","block_type":"box","text":"The Manager is part of a larger firm with multiple business lines active in","page_number":173,"box":{"x":326,"y":406,"width":547,"height":12}},{"id":"8d1bbf2a-5215-4f87-9fdd-0c39daa32b07","block_type":"box","text":"multiple jurisdictions that are governed by a multitude of legal systems and regulatory regimes, some","page_number":173,"box":{"x":117,"y":422,"width":753,"height":12}},{"id":"2bc09b35-546d-43cf-b5d7-e083765bd4ad","block_type":"box","text":"of which are new and evolving. As a result, the Funds and the Manager and its affiliates are subject to","page_number":173,"box":{"x":116,"y":437,"width":761,"height":12}},{"id":"f46225c0-c99a-422b-bde9-6f1a4c49c92b","block_type":"box","text":"extensive and sophisticated legal, tax and regulatory risks, including changing laws and regulations,","page_number":173,"box":{"x":116,"y":453,"width":746,"height":12}},{"id":"48629ee7-3324-464a-bef3-f73d0bcc94b7","block_type":"box","text":"developing interpretations of such laws and regulations, as well as existing laws, and increased","page_number":173,"box":{"x":116,"y":468,"width":712,"height":12}},{"id":"3ea31355-6d56-4e9a-b549-39f57461133d","block_type":"box","text":"scrutiny by regulators and law enforcement authorities. Unexpected economic, political, regulatory and","page_number":173,"box":{"x":116,"y":484,"width":766,"height":12}},{"id":"5ea3ab40-b595-4e78-b2fa-25cbddee581f","block_type":"box","text":"diplomatic events within the United States and abroad can trigger new and complex regulations that","page_number":173,"box":{"x":116,"y":499,"width":745,"height":13}},{"id":"2304a20e-31c8-4936-9272-db1e598063e4","block_type":"box","text":"the Manager and/or the Funds may need to comply with. The implementation of changes to comply","page_number":173,"box":{"x":116,"y":515,"width":742,"height":12}},{"id":"4bc578dd-3c8d-4027-a291-91064e515506","block_type":"box","text":"with current and/or new regulations applicable to the Funds and/or the Manager could have a material","page_number":173,"box":{"x":116,"y":531,"width":761,"height":12}},{"id":"d7fe7f8b-f116-4a35-98e9-ccf54da6ea96","block_type":"box","text":"adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit","page_number":173,"box":{"x":116,"y":546,"width":712,"height":12}},{"id":"9b5a389a-fb62-4bfb-b8db-86f310444255","block_type":"box","text":"margins, reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":173,"box":{"x":117,"y":561,"width":762,"height":13}},{"id":"3590a52b-b2ee-4a26-8fbc-b2a9d377dcbb","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":173,"box":{"x":118,"y":589,"width":213,"height":12}},{"id":"dccc2e83-a66d-4b5f-a891-13eddb2d1c4a","block_type":"box","text":".","page_number":173,"box":{"x":331,"y":597,"width":9,"height":2}},{"id":"8a79cb3f-74d1-4ab1-aad4-4b06f96bd32b","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist","page_number":173,"box":{"x":341,"y":589,"width":512,"height":12}},{"id":"c54e8f59-6615-4dca-8b4e-0ddfdcc2faed","block_type":"box","text":"trade policies. The U.S. Government recently altered its approach to international trade policy, resulting","page_number":173,"box":{"x":116,"y":605,"width":772,"height":12}},{"id":"2c6f3d12-31b9-4883-b069-b4b119678b03","block_type":"box","text":"in significant impacts on international trade relations, certain tax and immigration policies, and other","page_number":173,"box":{"x":117,"y":620,"width":742,"height":12}},{"id":"624ef528-beb0-45fb-ae5a-614105ea97ff","block_type":"box","text":"aspects of the national and international political and financial landscape. 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Some of the companies in which the Fund invests may be located in, or otherwise","page_number":173,"box":{"x":250,"y":862,"width":621,"height":12}},{"id":"332001c2-dbfe-4f7a-8dfa-7f092323f21d","block_type":"box","text":"connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,","page_number":173,"box":{"x":116,"y":878,"width":717,"height":12}},{"id":"b02b0b50-5826-45a6-aeb7-46ae3c5b2530","block_type":"box","text":"II-87","page_number":173,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fdcc93d3-95e5-4d19-8c51-210f3e30e83b","block_type":"box","text":"NM1026U-6042785-173/259","page_number":173,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fc54d2fb-41d4-422a-8f4b-118116532586","block_type":"box","text":"tornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically","page_number":174,"box":{"x":116,"y":87,"width":771,"height":12}},{"id":"ec98d594-83a2-4b42-99fc-810a5dda81d7","block_type":"box","text":"sensitive to environmental events. In addition, issuers may be impacted by security concerns with","page_number":174,"box":{"x":116,"y":103,"width":729,"height":12}},{"id":"1954bc05-df37-4802-a8b7-dd4c35f0aed8","block_type":"box","text":"respect to a country or region, such as war and other types of conflict, terrorism, strained international","page_number":174,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"8577179e-6ea3-451d-9870-8ba5bd6b2cf3","block_type":"box","text":"relations and territorial disputes. Any of these events may adversely affect the issuers, markets and","page_number":174,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"2f952e67-f571-4e0f-8ee3-804d73ed724e","block_type":"box","text":"economies to which a Fund is exposed, which may adversely affect the value of the Fund.","page_number":174,"box":{"x":116,"y":149,"width":673,"height":12}},{"id":"ce9dd214-d04d-4623-bdc2-1ba668e57d4c","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":174,"box":{"x":116,"y":180,"width":275,"height":12}},{"id":"5bd915b1-e663-4981-9746-1ed2f1234c5c","block_type":"box","text":"A Fund’s investments, payment obligations and financing terms","page_number":174,"box":{"x":393,"y":180,"width":480,"height":12}},{"id":"7eff5f3e-00d6-4490-8457-e91f7727d3cf","block_type":"box","text":"may be based on floating rates, such as the Secured Overnight Financing Rate (“SOFR”), Sterling","page_number":174,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"68251d73-d5e7-4788-b107-9f8dbf8cc258","block_type":"box","text":"Overnight Interbank Average Rate (“SONIA”), and other similar types of reference rates (“Reference","page_number":174,"box":{"x":116,"y":211,"width":749,"height":12}},{"id":"694c7031-d055-41e3-afba-fd400baa5c47","block_type":"box","text":"Rates”). The elimination of a Reference Rate or any other changes or reforms to the determination or","page_number":174,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"e873d1c3-161c-49df-a0fc-9c951181cff8","block_type":"box","text":"supervision of a Reference Rate could have an adverse impact on the market for, or value of, any","page_number":174,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"fe880fdc-a467-4ab1-b81d-6d902545b81c","block_type":"box","text":"instruments (including debt instruments and certain derivative instruments) or payments linked to those","page_number":174,"box":{"x":117,"y":258,"width":769,"height":12}},{"id":"aedc3457-4162-4a43-b18a-519e2583fa20","block_type":"box","text":"Reference Rates. In addition, any substitute Reference Rate and any pricing adjustments imposed by","page_number":174,"box":{"x":117,"y":273,"width":758,"height":12}},{"id":"2ce83992-0064-4997-9a7c-2c0b2be0ebb6","block_type":"box","text":"a regulator or by counterparties or otherwise may adversely affect a Fund’s performance and/or net","page_number":174,"box":{"x":116,"y":289,"width":743,"height":12}},{"id":"ca11dd9d-17b9-460b-8ee6-9a70fe7405e4","block_type":"box","text":"asset value.","page_number":174,"box":{"x":116,"y":304,"width":94,"height":10}},{"id":"95c78b39-006d-42c7-a90b-33c51ca3dac3","block_type":"box","text":"The London Interbank Offered Rate (“LIBOR”) had historically been used extensively in the U.S. and","page_number":174,"box":{"x":116,"y":335,"width":751,"height":12}},{"id":"5d6b3a8d-9bcd-43a6-a103-182b4168f126","block_type":"box","text":"globally as a “benchmark” or “reference rate” for various commercial and financial contracts, including","page_number":174,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"3dc646af-17c7-4b0f-aeae-41d92513eeff","block_type":"box","text":"corporate and municipal bonds, bank loans, asset-backed and mortgage-related securities, interest","page_number":174,"box":{"x":116,"y":366,"width":741,"height":12}},{"id":"1ba4acbe-a829-4f6c-ab7c-882cdc5b3111","block_type":"box","text":"rate swaps and other derivatives. Instruments in which a Fund may have historically paid interest at","page_number":174,"box":{"x":117,"y":382,"width":742,"height":12}},{"id":"c5759ab6-8342-4681-a2f3-1f0611232d93","block_type":"box","text":"floating rates based on LIBOR or may have been subject to interest caps or floors based on LIBOR.","page_number":174,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"3f8f085d-c977-4b96-9bce-aebe3c4bdcaa","block_type":"box","text":"The Funds and issuers of instruments in which a Fund invests may have also historically obtained","page_number":174,"box":{"x":116,"y":413,"width":731,"height":12}},{"id":"ffdf7925-169e-46f0-bbeb-fb1dc4abad11","block_type":"box","text":"financing at floating rates based on LIBOR. In connection with the global transition away from LIBOR","page_number":174,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"049288cc-dc22-48a0-b5b4-398b6bc12c67","block_type":"box","text":"led by regulators and market participants as a result of benchmark reforms, LIBOR was last published","page_number":174,"box":{"x":117,"y":444,"width":761,"height":12}},{"id":"4565bd46-fa6a-4a31-aaca-1de160c15b79","block_type":"box","text":"on a representative basis at the end of June 2023. Alternative Reference Rates to LIBOR have been","page_number":174,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"59a55040-1dfe-4c04-a045-475450c4c20e","block_type":"box","text":"established in most major currencies and markets in these alternative rates are continuing to develop","page_number":174,"box":{"x":116,"y":475,"width":756,"height":12}},{"id":"7f945954-090c-40a7-8375-9c64b4028af8","block_type":"box","text":"(","page_number":174,"box":{"x":117,"y":490,"width":4,"height":12}},{"id":"c1d5856e-03ee-4d2e-a003-59f56142f6f0","block_type":"box","text":"e.g.","page_number":174,"box":{"x":122,"y":493,"width":26,"height":9}},{"id":"f42bb998-8216-43f0-8023-6fb2277c8802","block_type":"box","text":", SOFR for USD-LIBOR and SONIA for GBP-LIBOR). While the transition from LIBOR has gone","page_number":174,"box":{"x":151,"y":490,"width":716,"height":12}},{"id":"ccd885bd-8eeb-453c-b1a8-27186a183a2e","block_type":"box","text":"relatively smoothly, residual risks associated with the transition may remain that may impact markets or","page_number":174,"box":{"x":117,"y":506,"width":771,"height":12}},{"id":"b3f994cf-ce40-4f90-ac3d-b8d70e30d9b8","block_type":"box","text":"particular investments and, as such, the full impact of the transition on the Funds or the financial","page_number":174,"box":{"x":117,"y":521,"width":718,"height":12}},{"id":"c098bcc4-522e-4010-9f04-56f27a401851","block_type":"box","text":"instruments in which the Funds invest cannot yet be fully determined.","page_number":174,"box":{"x":117,"y":537,"width":518,"height":12}},{"id":"bd859f0f-d6af-4eaa-b6f9-1e026e449736","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that","page_number":174,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"4a394ff8-19df-44b0-9492-45082ec2dcd7","block_type":"box","text":"are collateralized by U.S. Treasury securities . SOFR is calculated based on transaction-level repo","page_number":174,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"6ce20e9d-a316-46cc-a968-4f55bee2884d","block_type":"box","text":"data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted","page_number":174,"box":{"x":116,"y":599,"width":755,"height":12}},{"id":"8e5839b1-f5a6-43b3-8dcc-1dd999f8fc0f","block_type":"box","text":"median rate derived from such data. Because SOFR is a financing rate based on overnight secured","page_number":174,"box":{"x":117,"y":614,"width":744,"height":12}},{"id":"f1f6ba7a-64c3-4f3c-9229-be9d41ff1c2d","block_type":"box","text":"funding transactions, it differs fundamentally from LIBOR. LIBOR is intended to be an unsecured rate","page_number":174,"box":{"x":116,"y":630,"width":755,"height":12}},{"id":"6b60d000-8a9f-472c-a2b4-e52212c34723","block_type":"box","text":"that represents interbank funding costs for different short-term maturities or tenors. It is a forward","page_number":174,"box":{"x":116,"y":645,"width":726,"height":12}},{"id":"d5995940-0d61-49aa-a31b-4749a88fad66","block_type":"box","text":"looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is","page_number":174,"box":{"x":117,"y":661,"width":734,"height":12}},{"id":"c3bb7a87-b6a3-4c25-8c2a-c13e2d713759","block_type":"box","text":"intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk. In","page_number":174,"box":{"x":117,"y":676,"width":700,"height":12}},{"id":"1104fd55-1ad1-46e6-8e80-3ecbdcc0e1dd","block_type":"box","text":"contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as","page_number":174,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"9efeb267-d85d-4698-8133-2c136531ff52","block_type":"box","text":"collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term interest rate risks.","page_number":174,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"fc1e6c1d-44e7-44a0-b40d-947e82e64395","block_type":"box","text":"SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates,","page_number":174,"box":{"x":116,"y":723,"width":764,"height":11}},{"id":"0ebf23ff-34d8-45ae-a9c2-1061180920d1","block_type":"box","text":"such as three-month LIBOR, during certain periods. For these reasons, among others, there is no","page_number":174,"box":{"x":116,"y":738,"width":725,"height":12}},{"id":"711e9f1c-3def-40df-b5d7-93e095431c7b","block_type":"box","text":"assurance that SOFR, or rates derived from SOFR, will perform in the same or similar way as LIBOR","page_number":174,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"97a2e615-c156-4b94-a4ab-39b2ec80db5e","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":174,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"20591010-bef1-4758-9c7b-74fc56580481","block_type":"box","text":"substitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018.","page_number":174,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"ad7cc850-f18d-4eb2-865b-95a54752e101","block_type":"box","text":"The future performance of SOFR, and SOFR-based Reference Rates, cannot be predicted based on","page_number":174,"box":{"x":116,"y":800,"width":747,"height":12}},{"id":"318164db-21e1-468b-b566-e9a553880132","block_type":"box","text":"SOFR’s history or otherwise. Levels of SOFR in the future may bear little or no relation to historical","page_number":174,"box":{"x":116,"y":816,"width":732,"height":12}},{"id":"cb00c5f3-6189-4af1-a9ef-aa93d9f3ae7d","block_type":"box","text":"levels of SOFR, LIBOR or other rates. There can also be no assurance that SOFR will not be","page_number":174,"box":{"x":117,"y":831,"width":695,"height":11}},{"id":"c129bd56-b255-49da-bf09-e124e8e62ca6","block_type":"box","text":"discontinued or fundamentally altered in a manner that is materially adverse to the interests of the","page_number":174,"box":{"x":116,"y":847,"width":731,"height":12}},{"id":"2057e1d6-61b2-4a12-87fe-2afce680c641","block_type":"box","text":"Fund.","page_number":174,"box":{"x":117,"y":862,"width":46,"height":10}},{"id":"81fb2a8f-1c43-469d-96c0-d136cecb9895","block_type":"box","text":"II-88","page_number":174,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cdd40928-e08a-49a0-bf28-abef38a26eaa","block_type":"box","text":"NM1026U-6042785-174/259","page_number":174,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ca75b7dc-39b9-4761-8abb-03e57f8451d4","block_type":"box","text":"In addition, interest rates or other types of rates and indices which are classified as “benchmarks” have","page_number":175,"box":{"x":117,"y":87,"width":768,"height":12}},{"id":"5a56a023-3ab8-4907-bc11-e40988888b03","block_type":"box","text":"been the subject of ongoing national and international regulatory reform, including under the European","page_number":175,"box":{"x":117,"y":102,"width":765,"height":13}},{"id":"c0934f82-eab9-4752-adff-cfd5d4b84103","block_type":"box","text":"Union (“EU”) regulation on indices used as benchmarks in financial instruments and financial contracts","page_number":175,"box":{"x":117,"y":118,"width":765,"height":12}},{"id":"04873332-eae3-429d-8c78-b0f5d40bb325","block_type":"box","text":"(known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United","page_number":175,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"1324c08f-d4db-475a-b15e-bb0c224d9dab","block_type":"box","text":"Kingdom (“UK”) law by virtue of the EU (Withdrawal) Act 2018 (as amended), subject to amendments","page_number":175,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"0e2b02ec-24dd-4d57-ae4d-d58318a467ae","block_type":"box","text":"made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI","page_number":175,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"bc5bd3c5-75ad-4b5a-8aea-0335193dade5","block_type":"box","text":"2019/657) and other statutory instruments. Following the implementation of these reforms, the manner","page_number":175,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"69930e03-94d5-4829-85b1-d443bc59fffd","block_type":"box","text":"of administration of benchmarks has changed and may further change in the future, with the result that","page_number":175,"box":{"x":116,"y":196,"width":766,"height":12}},{"id":"e45ccfc8-a215-47ec-9bf5-660689ac3178","block_type":"box","text":"relevant benchmarks may perform differently than in the past, the use of benchmarks that are not","page_number":175,"box":{"x":117,"y":211,"width":726,"height":12}},{"id":"cc48fa21-7d55-457c-8249-d198ed8e54ef","block_type":"box","text":"compliant with the new standards by certain supervised entities may be restricted, and certain","page_number":175,"box":{"x":116,"y":227,"width":702,"height":12}},{"id":"8b879d6c-2521-410b-a1dc-1d2323235609","block_type":"box","text":"benchmarks may be eliminated entirely. Such changes could cause increased market volatility and","page_number":175,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"12eba56f-8b28-4d7a-b925-5a724f296196","block_type":"box","text":"disruptions in liquidity for instruments that rely on or are impacted by such benchmarks. Additionally,","page_number":175,"box":{"x":116,"y":258,"width":749,"height":12}},{"id":"3fc2c615-0ec0-48dd-b927-5ebb4b598790","block_type":"box","text":"there could be other consequences which cannot be predicted.","page_number":175,"box":{"x":116,"y":273,"width":472,"height":12}},{"id":"f03b548b-0618-4d51-8618-4d593983fc7b","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":175,"box":{"x":116,"y":304,"width":479,"height":12}},{"id":"2d1306b6-ea0a-490e-9343-cd839e38b8c3","block_type":"box","text":"Under repurchase agreements and","page_number":175,"box":{"x":597,"y":304,"width":264,"height":12}},{"id":"cfb3ed4e-2ac3-45db-a051-ad5303e4fce0","block_type":"box","text":"purchase and sale contracts, the other party agrees, upon entering into the contract with a Fund, to","page_number":175,"box":{"x":117,"y":320,"width":740,"height":12}},{"id":"a7869f51-e9f6-4b8d-a29c-a142ec71e634","block_type":"box","text":"repurchase a security sold to the Fund at a mutually agreed-upon time and price in a specified","page_number":175,"box":{"x":117,"y":335,"width":703,"height":12}},{"id":"b3a187ed-9ab0-40c6-a055-f2b730b86752","block_type":"box","text":"currency, thereby determining the yield during the term of the agreement.","page_number":175,"box":{"x":116,"y":351,"width":549,"height":12}},{"id":"9472764e-6845-43ab-8c6b-195ec37d3f2e","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements","page_number":175,"box":{"x":116,"y":382,"width":751,"height":12}},{"id":"33a95cbb-87ab-427c-a528-f8fecd841828","block_type":"box","text":"stipulate that securities are owned by the Fund and the purchaser receives any interest on the security","page_number":175,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"f83844bd-2e9d-47c6-9f39-c14382c3e1b5","block_type":"box","text":"paid during the period. In the case of repurchase agreements, the prices at which the trades are","page_number":175,"box":{"x":117,"y":413,"width":717,"height":12}},{"id":"9e112cdd-b4c5-45f0-a51e-42b77f4af156","block_type":"box","text":"conducted do not reflect accrued interest on the underlying obligation; whereas, in the case of","page_number":175,"box":{"x":116,"y":428,"width":701,"height":12}},{"id":"940b47f0-15a5-4988-9fcb-52b7e71d482d","block_type":"box","text":"purchase and sale contracts, the prices take into account accrued interest. A Fund may enter into","page_number":175,"box":{"x":117,"y":444,"width":728,"height":12}},{"id":"9e950112-2be2-4e7b-8ad0-a7e63d1562f0","block_type":"box","text":"“tri-party” repurchase agreements. In “tri-party” repurchase agreements, an unaffiliated third-party","page_number":175,"box":{"x":116,"y":459,"width":729,"height":12}},{"id":"25ea5e40-e335-4db6-8646-78504355364f","block_type":"box","text":"custodian maintains accounts to hold collateral for the Fund and its counterparties and, therefore, the","page_number":175,"box":{"x":116,"y":475,"width":756,"height":12}},{"id":"a911e71e-9aae-4f52-8195-ab6e0f0373b0","block_type":"box","text":"Fund may be subject to the credit risk of those custodians.","page_number":175,"box":{"x":117,"y":490,"width":438,"height":12}},{"id":"640f11ab-d4e1-4d3d-a34d-f44b82006282","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate","page_number":175,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"4b91cc4f-8eef-4417-84df-812f942f849d","block_type":"box","text":"of return insulated from market fluctuations during the term of the agreement, although such return","page_number":175,"box":{"x":116,"y":537,"width":737,"height":12}},{"id":"ad17bf61-9881-495b-bcd4-6477065dc098","block_type":"box","text":"may be affected by currency fluctuations. However, in the event of a default under a repurchase","page_number":175,"box":{"x":117,"y":552,"width":716,"height":12}},{"id":"79e99fd3-91d2-46d7-bc62-daaf5096ae9e","block_type":"box","text":"agreement or under a purchase and sale contract, instead of the contractual fixed rate, the rate of","page_number":175,"box":{"x":116,"y":568,"width":730,"height":12}},{"id":"f34bcbee-65ec-4eec-930c-2815df100d6c","block_type":"box","text":"return to the Fund would be dependent upon intervening fluctuations of the market values of the","page_number":175,"box":{"x":117,"y":583,"width":716,"height":12}},{"id":"fb26dbc5-bbbd-4cab-b1c0-c8091d4fca9b","block_type":"box","text":"securities underlying the contract and the accrued interest on those securities. In such event, the Fund","page_number":175,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"ecb7322a-de7d-4404-9d90-830cb78d4378","block_type":"box","text":"would have rights against the seller for breach of contract with respect to any losses arising from","page_number":175,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"e180789a-0c6b-4c1e-977e-fa1b11593793","block_type":"box","text":"market fluctuations following the default.","page_number":175,"box":{"x":117,"y":630,"width":303,"height":12}},{"id":"e04dacb9-6c62-49a1-a149-e06d21f68b55","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may","page_number":175,"box":{"x":117,"y":661,"width":742,"height":12}},{"id":"83a538a0-3cbd-4e0e-b6cf-34868fb62a79","block_type":"box","text":"have longer terms, and may be construed to be collateralized loans by the purchaser to the seller","page_number":175,"box":{"x":117,"y":676,"width":714,"height":12}},{"id":"18610ce7-b0ab-40d5-8071-ba8376396b61","block_type":"box","text":"secured by the securities transferred to the purchaser. In the case of a repurchase agreement, as a","page_number":175,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"6c8e5b31-0417-4542-be45-a21d017483f2","block_type":"box","text":"purchaser, a Fund’s Manager or sub-adviser will monitor the creditworthiness of the seller, and a Fund","page_number":175,"box":{"x":117,"y":707,"width":750,"height":12}},{"id":"e150d3f9-de90-4065-8d4b-46591860f905","block_type":"box","text":"will require the seller to provide additional collateral if the market value of the securities falls below the","page_number":175,"box":{"x":116,"y":723,"width":748,"height":12}},{"id":"783838be-f987-478b-b148-a47610d112f5","block_type":"box","text":"repurchase price at any time during the term of the repurchase agreement. The Fund does not have this","page_number":175,"box":{"x":117,"y":738,"width":764,"height":12}},{"id":"90902cf0-5643-4059-8a69-6fa0b3660f9c","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":175,"box":{"x":117,"y":754,"width":760,"height":12}},{"id":"5f244869-4529-450e-b2b5-7ed1a6ca4d61","block_type":"box","text":"Manager or sub-adviser will mark-to-market daily the value of the securities. Securities subject to","page_number":175,"box":{"x":117,"y":769,"width":710,"height":12}},{"id":"db63215b-fcfa-4092-b0f9-ed8ce8ad1d34","block_type":"box","text":"repurchase agreements (other than tri-party repurchase agreements) and purchase and sale contracts","page_number":175,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"b7e5c34a-6486-4c00-a47f-7c11f5e9142b","block_type":"box","text":"will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry","page_number":175,"box":{"x":116,"y":800,"width":728,"height":12}},{"id":"d6531694-52ee-4290-99ae-dbb6ca08b090","block_type":"box","text":"system or by another authorized securities depository.","page_number":175,"box":{"x":116,"y":816,"width":397,"height":12}},{"id":"4f59db63-9ede-44fd-8e10-0b1471271355","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan,","page_number":175,"box":{"x":117,"y":847,"width":750,"height":12}},{"id":"a88aa11e-5464-472f-9298-05c4e297853b","block_type":"box","text":"the underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation","page_number":175,"box":{"x":116,"y":862,"width":763,"height":12}},{"id":"8db52ff5-83d2-4ad2-8fc2-42c706105874","block_type":"box","text":"to pay the repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses","page_number":175,"box":{"x":116,"y":878,"width":770,"height":12}},{"id":"86b13bdd-bbf2-4767-a687-c1627d68dca4","block_type":"box","text":"II-89","page_number":175,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1663060f-5eeb-43ce-b6c3-423e3578dada","block_type":"box","text":"NM1026U-6042785-175/259","page_number":175,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0e9e4314-88d5-466e-87c9-9a9ce50ddd96","block_type":"box","text":"in connection with disposition of the collateral. If the seller becomes insolvent and subject to liquidation or","page_number":176,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"7cfab818-dfd8-4cf0-a00d-c502adab31ff","block_type":"box","text":"reorganization under applicable bankruptcy or other laws, a Fund’s ability to dispose of the underlying","page_number":176,"box":{"x":117,"y":102,"width":733,"height":13}},{"id":"418c151f-e47c-4087-a99a-dd7ecc46c45d","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":176,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"6a9c1f78-da47-4949-a1cf-e871cc6254e1","block_type":"box","text":"the underlying securities. To minimize this risk, the securities underlying the repurchase agreement will be","page_number":176,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"a4685469-cf24-420d-86da-4d9e46b63e7a","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":176,"box":{"x":117,"y":149,"width":761,"height":12}},{"id":"75dd65f2-c93e-470a-bd27-66661600773e","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":176,"box":{"x":116,"y":165,"width":727,"height":12}},{"id":"fef7ef72-2d2b-4a0a-9cd4-0436734eafe6","block_type":"box","text":"proceeds from the sale of the underlying securities are less than the repurchase price.","page_number":176,"box":{"x":117,"y":180,"width":622,"height":12}},{"id":"581e9432-7176-4b63-8050-a6972e40374c","block_type":"box","text":"In any repurchase transaction to which a Fund is a party, collateral for a repurchase agreement may","page_number":176,"box":{"x":117,"y":211,"width":747,"height":12}},{"id":"dd15194f-950d-4702-bde9-5c5c1645b472","block_type":"box","text":"include cash items and obligations issued by the U.S. Government or its agencies or instrumentalities.","page_number":176,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"c5975c3b-cafd-4748-ab4a-bbd3039d7a82","block_type":"box","text":"For certain Funds, however, collateral may include instruments other than cash items and obligations","page_number":176,"box":{"x":117,"y":242,"width":755,"height":12}},{"id":"29358aff-4b1d-472e-960d-c23a4a149892","block_type":"box","text":"issued by the U.S. Government or its agencies or instrumentalities, including securities that the Fund","page_number":176,"box":{"x":117,"y":258,"width":752,"height":12}},{"id":"e32025f3-695f-4360-a0ec-e2d47df6c841","block_type":"box","text":"could not hold directly under its investment strategies without the repurchase obligation.","page_number":176,"box":{"x":116,"y":273,"width":657,"height":12}},{"id":"49711158-d07d-4bd0-b0c6-2747679faaa7","block_type":"box","text":"The type of collateral underlying repurchase agreements may also pose certain risks for a Fund. Lower","page_number":176,"box":{"x":116,"y":304,"width":770,"height":12}},{"id":"b6fd8185-352e-42b2-8a0b-56de178ee774","block_type":"box","text":"quality collateral and collateral with longer maturities may be subject to greater price fluctuations than","page_number":176,"box":{"x":116,"y":320,"width":757,"height":12}},{"id":"0bb92113-bb40-44c9-a666-0477aa8798b0","block_type":"box","text":"higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty","page_number":176,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"53de87d9-4920-4c57-965b-5242d7b2c2a9","block_type":"box","text":"were to default, lower quality collateral may be more difficult to liquidate than higher quality collateral.","page_number":176,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"743e691b-3c64-47f2-9ecc-4121fedab8c0","block_type":"box","text":"Should the counterparty default and the amount of collateral not be sufficient to cover the","page_number":176,"box":{"x":116,"y":366,"width":666,"height":12}},{"id":"4faaf56b-8842-422c-a3da-01aac4347b39","block_type":"box","text":"counterparty’s repurchase obligation, a Fund would retain the status of an unsecured creditor of the","page_number":176,"box":{"x":116,"y":382,"width":744,"height":12}},{"id":"21e19178-6a49-40a4-9fae-a5ba1196247e","block_type":"box","text":"counterparty (","page_number":176,"box":{"x":116,"y":397,"width":103,"height":12}},{"id":"71857cbc-ab9e-4240-98b1-af277e33b9c8","block_type":"box","text":"i.e.","page_number":176,"box":{"x":220,"y":397,"width":20,"height":10}},{"id":"d6bca6a7-175b-45bb-be9d-6b156592dd38","block_type":"box","text":", the position the Fund would normally be in if it were to hold, pursuant to its","page_number":176,"box":{"x":244,"y":397,"width":565,"height":12}},{"id":"47121185-96ad-4c9b-82bf-34537c14bfdc","block_type":"box","text":"investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the","page_number":176,"box":{"x":117,"y":413,"width":760,"height":12}},{"id":"68bae970-1165-4fdc-9cc2-76ca4136f96e","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":176,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"4812e815-fb8d-4af0-b185-5481a0d25111","block_type":"box","text":"principal and income involved in the transaction.","page_number":176,"box":{"x":117,"y":444,"width":361,"height":12}},{"id":"fea681b9-65d9-4fc2-8458-aa3cd27412bf","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":176,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"b4b353cd-812b-42e9-b3d7-11c7904eaea2","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many repurchase agreements","page_number":176,"box":{"x":116,"y":490,"width":771,"height":12}},{"id":"1b72a182-8482-40a7-b8cf-43f0e52dd9cb","block_type":"box","text":"and purchase and sale contracts, terms that delay or restrict the rights of counterparties, such as a","page_number":176,"box":{"x":116,"y":506,"width":738,"height":12}},{"id":"c22ff87b-7750-4719-bec8-741f77d764c5","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":176,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"e75e1c1e-8fab-49fb-9be1-a34952146777","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":176,"box":{"x":116,"y":537,"width":748,"height":12}},{"id":"ae32372a-6121-4bae-a6dd-a877a8818025","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":176,"box":{"x":116,"y":552,"width":707,"height":12}},{"id":"ee581dcb-1074-4468-8141-afc388a77538","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":176,"box":{"x":117,"y":568,"width":729,"height":12}},{"id":"ec45ea2c-7be0-4654-8daf-c9947b706dc5","block_type":"box","text":"affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale contracts or","page_number":176,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"7038f6db-d0f7-4f0b-a476-1f08244aa2df","block_type":"box","text":"to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":176,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"daf2d9f7-52dd-48e5-ad8a-4d59a422e4bf","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally","page_number":176,"box":{"x":117,"y":614,"width":770,"height":12}},{"id":"38a021ea-5fcd-4334-a193-658b01c767fb","block_type":"box","text":"cleared. Compliance with these rules is expected to be required by the middle of 2027. Although the","page_number":176,"box":{"x":116,"y":630,"width":747,"height":12}},{"id":"3b2bb2fa-afed-4e2a-8eef-7d0d57cd36e3","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":176,"box":{"x":117,"y":645,"width":770,"height":12}},{"id":"c74fddb6-24a9-4ba0-90f2-9d4a5958a42c","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":176,"box":{"x":116,"y":661,"width":557,"height":12}},{"id":"feefda9b-23ce-4d5f-997a-0053197bc9bd","block_type":"box","text":"Restricted Securities.","page_number":176,"box":{"x":116,"y":692,"width":171,"height":9}},{"id":"e1f61cd7-da20-4fa4-8ea6-028a8a89d3c9","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the","page_number":176,"box":{"x":293,"y":692,"width":533,"height":12}},{"id":"a1db1a25-02d6-4520-84a5-05e8cd738776","block_type":"box","text":"Securities Act (“restricted securities”), which may include securities in private companies and Rule","page_number":176,"box":{"x":116,"y":707,"width":728,"height":12}},{"id":"2e732579-3d65-4fb1-ae6d-87182450bff7","block_type":"box","text":"144A Securities. Restricted securities may be sold in private placement transactions between issuers","page_number":176,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"de0bccdf-aedb-44e6-aaea-9bc01e7eca9e","block_type":"box","text":"and their purchasers, including through private negotiated transactions between the issuer and their","page_number":176,"box":{"x":116,"y":738,"width":741,"height":12}},{"id":"32b64569-8f93-443c-a803-1bac6fbff0c9","block_type":"box","text":"purchasers, such as the Funds, and may be neither listed on an exchange nor traded in other","page_number":176,"box":{"x":117,"y":754,"width":693,"height":12}},{"id":"15b237ff-5af2-4d24-8044-e8a0990f874f","block_type":"box","text":"established markets. In many cases, privately placed securities may not be freely transferable under","page_number":176,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"d75368a4-5426-422b-8c5f-51994b1eb0f4","block_type":"box","text":"the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of these","page_number":176,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"1311ecbd-de68-4bc7-bd1e-59e9e010f386","block_type":"box","text":"securities are new and complex, and trade only among institutions; the markets for these securities are","page_number":176,"box":{"x":116,"y":800,"width":764,"height":12}},{"id":"a3fa0831-dfba-4d8d-b830-89bbceb2f342","block_type":"box","text":"still developing and may not function as efficiently as established markets. Typically, investments in","page_number":176,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"564ce900-f914-4c7d-85fe-8413c49cf9d4","block_type":"box","text":"private companies are in restricted securities that are not traded in public markets and subject to","page_number":176,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"e4bac551-9194-4d17-89da-ec89dde248f7","block_type":"box","text":"substantial holding periods, so that a Fund may not be able to resell some of its holdings for extended","page_number":176,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"7d10aa7f-6038-45a5-86fe-54e1a3dab56b","block_type":"box","text":"periods, which may be several years. There can be no assurance that a Fund will be able to realize the","page_number":176,"box":{"x":117,"y":862,"width":769,"height":12}},{"id":"f0158d17-cf14-49d0-8fd2-078227385075","block_type":"box","text":"value of such restricted securities in a timely manner or at all. As a result of the absence of a public","page_number":176,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"7f96db9c-7fa4-44d4-961a-79172da86772","block_type":"box","text":"II-90","page_number":176,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5aa46a99-21c6-4f3d-aaf9-bfca07f5e575","block_type":"box","text":"NM1026U-6042785-176/259","page_number":176,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"15eb435c-ea61-4c43-99ae-1e1185102a04","block_type":"box","text":"trading market and the potential bespoke nature on certain transactions, restricted securities may be","page_number":177,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"70f2ca4b-4833-4be1-b9be-936c165d8eff","block_type":"box","text":"deemed to be illiquid investments or less liquid investments and may be more difficult to value than","page_number":177,"box":{"x":116,"y":102,"width":740,"height":13}},{"id":"62c231cf-3303-4685-8f62-6b90a1f1fc65","block_type":"box","text":"publicly traded securities. To the extent that restricted securities may be resold in privately negotiated","page_number":177,"box":{"x":117,"y":118,"width":757,"height":12}},{"id":"4ebbadf6-4f37-43a1-a0ee-f61ac10eb8fe","block_type":"box","text":"transactions, the prices realized from the sales, due to lack of liquidity, could be less than those","page_number":177,"box":{"x":116,"y":134,"width":713,"height":12}},{"id":"6598c7d9-b5d1-40a0-9e4a-345479597355","block_type":"box","text":"originally paid by the Fund or less than their fair market value. The amount of any discount may vary","page_number":177,"box":{"x":116,"y":149,"width":749,"height":12}},{"id":"b2b8e9c4-c3a7-44a5-85ab-0e9c53e053ce","block_type":"box","text":"depending on the security type, the character of the issuer, which party (if any) will bear the expenses","page_number":177,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"0df489b5-1611-4c23-ac6d-5e074506a8ea","block_type":"box","text":"of registering the restricted security, and prevailing market conditions. In addition, issuers whose","page_number":177,"box":{"x":116,"y":180,"width":720,"height":12}},{"id":"3208d8f5-76f1-47bc-97c3-6ee1b7a34060","block_type":"box","text":"securities are not publicly traded or who are not otherwise publicly listed may not be subject to the","page_number":177,"box":{"x":116,"y":196,"width":732,"height":12}},{"id":"4dd3f8ec-6333-4073-b8e1-ab3e74861db8","block_type":"box","text":"disclosure and other investor protection requirements that may be applicable if their securities were","page_number":177,"box":{"x":116,"y":211,"width":742,"height":12}},{"id":"73fe990a-25bc-4324-9de3-5fcef3ed0b5a","block_type":"box","text":"publicly traded. If any privately placed securities held by a Fund are required to be registered under the","page_number":177,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"4d29323b-ec68-4606-8169-3fd54b4851ac","block_type":"box","text":"securities laws of one or more jurisdictions before being resold, the Fund may be required to bear the","page_number":177,"box":{"x":116,"y":242,"width":757,"height":12}},{"id":"c95943f8-2e05-40ab-86d2-7ce7582d5b17","block_type":"box","text":"expenses of registration. Where registration is required for restricted securities, a considerable time","page_number":177,"box":{"x":116,"y":258,"width":743,"height":12}},{"id":"24e4c196-b2cb-4649-b55a-a370953f7e46","block_type":"box","text":"period may elapse between the time the Fund decides to sell the security and the time it is actually","page_number":177,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"20facc17-d63e-46a7-ba3c-3c4f714eab43","block_type":"box","text":"permitted to sell the security under an effective registration statement. If during such period, adverse","page_number":177,"box":{"x":117,"y":289,"width":749,"height":12}},{"id":"780205ec-4e30-47ba-b91c-d1401dda0330","block_type":"box","text":"market conditions were to develop, the Fund might obtain less favorable pricing terms than when it","page_number":177,"box":{"x":117,"y":304,"width":736,"height":12}},{"id":"954ae2f3-7b98-4a70-ac19-04f329963cc0","block_type":"box","text":"decided to sell the security. In addition, the Fund may be deemed to be an “underwriter” for purposes","page_number":177,"box":{"x":116,"y":320,"width":755,"height":12}},{"id":"4cc20a86-2d6e-426e-a290-24a292a6d4e3","block_type":"box","text":"of the Securities Act when selling restricted securities. If so, the Fund may be liable to purchasers of","page_number":177,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"bd32e3f5-4e0b-43f1-80e9-6e2af3fcd852","block_type":"box","text":"the restricted securities if the registration statement prepared by the issuer, or the corresponding","page_number":177,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"2f38f6d4-3156-4f60-8171-bfcb21a1d919","block_type":"box","text":"prospectus, is materially inaccurate or misleading. Transactions in restricted securities may entail other","page_number":177,"box":{"x":117,"y":366,"width":769,"height":12}},{"id":"40db9821-154b-402c-8e64-1a4559cba414","block_type":"box","text":"transaction costs that are higher than those for transactions in unrestricted securities. Certain of the","page_number":177,"box":{"x":116,"y":382,"width":744,"height":12}},{"id":"9f0ec468-5c2d-40ab-8797-fd60d1e705f3","block_type":"box","text":"Fund’s investments in private placements may consist of direct investments and may include","page_number":177,"box":{"x":117,"y":397,"width":692,"height":12}},{"id":"a4d7bed2-26c1-4c6f-b75b-bfb2dbf69fa9","block_type":"box","text":"investments in smaller, less seasoned issuers, which may involve greater risks. Issuers of restricted","page_number":177,"box":{"x":117,"y":413,"width":744,"height":12}},{"id":"ab22e380-51a6-4631-a359-dcdec0f04a8d","block_type":"box","text":"securities may not be subject to SEC reporting requirements, may not be required to maintain their","page_number":177,"box":{"x":116,"y":428,"width":737,"height":12}},{"id":"81586acc-59d8-41e5-984a-c86d2404033d","block_type":"box","text":"accounting records in accordance with generally accepted accounting principles, and may not be","page_number":177,"box":{"x":116,"y":444,"width":724,"height":12}},{"id":"4212a807-fdd2-43f7-aaf6-1df406c5d627","block_type":"box","text":"required to maintain effective internal controls over financial reporting. As a result, BlackRock may not","page_number":177,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"33a3181c-a1bd-44db-9060-b3dff4775696","block_type":"box","text":"have timely or accurate information about the business, financial condition and results of operations of","page_number":177,"box":{"x":117,"y":475,"width":762,"height":12}},{"id":"1bf04dc5-b14e-48ce-9a0e-438bff2aa856","block_type":"box","text":"such issuers, and investments in securities of such issuers may involve a high degree of business and","page_number":177,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"bc30722c-6f07-4019-953a-8262750eeff3","block_type":"box","text":"financial risk and may result in substantial losses to the Fund. Such issuers may also have limited","page_number":177,"box":{"x":116,"y":506,"width":729,"height":12}},{"id":"a5ea86c5-e351-4f0d-bad2-bccfe96b1263","block_type":"box","text":"product lines, markets or financial resources, or they may be dependent on a limited management","page_number":177,"box":{"x":117,"y":521,"width":731,"height":12}},{"id":"ba2b386b-4d99-4f06-81a2-e780eea52bff","block_type":"box","text":"group.","page_number":177,"box":{"x":116,"y":539,"width":52,"height":10}},{"id":"f3caed81-8f55-40c8-8c30-683039e73598","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":177,"box":{"x":117,"y":568,"width":740,"height":12}},{"id":"895f077f-1392-4425-919f-1ab257f92259","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced","page_number":177,"box":{"x":117,"y":583,"width":687,"height":12}},{"id":"f7e312ed-10c7-459a-9f19-9859907fa819","block_type":"box","text":"proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by","page_number":177,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"d3457899-5573-4a56-ac48-177d0d3ff123","block_type":"box","text":"other shareholders. The issuer of a private placement may later register those shares for public sale in","page_number":177,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"f27497b8-a936-4186-84f0-95e07b8f6c6a","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":177,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"dec2546d-c2c7-4588-8043-dabc531afab8","block_type":"box","text":"a limited trading market for securities of that issuer, including any direct investment by a Fund, or the","page_number":177,"box":{"x":116,"y":645,"width":752,"height":12}},{"id":"5c87365c-f398-4fe4-ba5c-7f2c9267d52e","block_type":"box","text":"Fund may be subject to contractual limitations on its ability to resell its existing securities following an","page_number":177,"box":{"x":117,"y":661,"width":748,"height":12}},{"id":"ad0c51e5-4745-4a66-9a0d-6ae27d62d865","block_type":"box","text":"IPO. The inability of an applicable issuer of a restricted security to complete an IPO or offer other","page_number":177,"box":{"x":117,"y":676,"width":719,"height":12}},{"id":"c25597d9-ff62-4e81-b5b9-914d8e0ff975","block_type":"box","text":"liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":177,"box":{"x":117,"y":692,"width":702,"height":12}},{"id":"adbab269-c6e6-4be9-a9f2-cd4ce09bfa7b","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making","page_number":177,"box":{"x":117,"y":707,"width":750,"height":12}},{"id":"f2ef3821-9b1e-43f8-b523-de2a4a9fd43e","block_type":"box","text":"investments in such securities, a Fund may obtain access to material nonpublic information, which may","page_number":177,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"c84f52e9-69dc-4366-a6d0-1cb53f792c86","block_type":"box","text":"restrict the Fund’s ability to conduct portfolio transactions in such securities. The activity of identifying,","page_number":177,"box":{"x":117,"y":738,"width":753,"height":12}},{"id":"363250c1-8981-4bac-aa6e-e8a171954ae1","block_type":"box","text":"completing, and realizing upon attractive investments in restricted securities is highly competitive and","page_number":177,"box":{"x":116,"y":754,"width":750,"height":12}},{"id":"d7b1c9ad-64b7-410f-a22b-fb81a2442657","block_type":"box","text":"involves a high degree of uncertainty. A Fund will be competing for investments against other similarly","page_number":177,"box":{"x":117,"y":769,"width":756,"height":12}},{"id":"302652a9-13b7-4b6a-a3c0-bbda48a1d2be","block_type":"box","text":"situated investors. It is possible that competition for appropriate investment opportunities may increase,","page_number":177,"box":{"x":116,"y":785,"width":766,"height":12}},{"id":"8a9fa6dc-74d1-4554-8060-803ead5e6b4b","block_type":"box","text":"thus potentially reducing the number of investment opportunities available to a Fund and adversely","page_number":177,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"5d9ed109-e707-44b9-94bc-e982fec10f44","block_type":"box","text":"affecting the terms upon which investments can be made. There is no assurance that investment","page_number":177,"box":{"x":116,"y":816,"width":719,"height":12}},{"id":"e8286f0d-b220-4bf8-bf45-5ead56022a0a","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":177,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"03a10c8d-4d2d-4d75-be02-b57adfc985e2","block_type":"box","text":"especially as that Fund grows in size.","page_number":177,"box":{"x":116,"y":847,"width":283,"height":12}},{"id":"d995f25e-1156-4484-879f-0ec6ecd318b9","block_type":"box","text":"II-91","page_number":177,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"a70b3630-9d65-40f4-a1b4-98721ba139f5","block_type":"box","text":"NM1026U-6042785-177/259","page_number":177,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"790bc3ca-cfd0-4d7e-a2e1-eec1981e4ee0","block_type":"box","text":"There may not be a readily available market value for a Fund’s restricted securities (in particular,","page_number":178,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"214123b3-d4ec-412a-8361-4a86cec0f8d7","block_type":"box","text":"restricted securities issued by private companies), and thus may be considered “illiquid.” Each Fund","page_number":178,"box":{"x":117,"y":102,"width":745,"height":13}},{"id":"5df18a01-1b9f-42c0-a3bc-b3e37404d763","block_type":"box","text":"values restricted securities in accordance with BlackRock’s valuation policies and procedures, which","page_number":178,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"8fd87f03-19b4-43d9-a1ec-dd43021784ac","block_type":"box","text":"are designed to value investments such that they accurately reflect fair value. Due to the inherent","page_number":178,"box":{"x":116,"y":134,"width":727,"height":12}},{"id":"c184b3e8-62da-430a-8fe8-cc8a3e0b2035","block_type":"box","text":"uncertainty and subjectivity of determining the fair value of investments that do not have a readily","page_number":178,"box":{"x":117,"y":149,"width":725,"height":12}},{"id":"434422ce-ca57-4568-9a9f-6bcfcb27c08b","block_type":"box","text":"available market value, the fair value of a Fund’s private investments may differ significantly from the","page_number":178,"box":{"x":116,"y":165,"width":752,"height":12}},{"id":"bfcebcea-2a20-49d2-acd2-2cd3a0dc8242","block_type":"box","text":"values that would have been used had a readily available market value existed for such investments","page_number":178,"box":{"x":116,"y":180,"width":749,"height":12}},{"id":"9fcac7b4-a8fe-46fa-a869-0b1ca63bb2ad","block_type":"box","text":"and may differ materially from the amounts the Fund may realize on any dispositions of such","page_number":178,"box":{"x":116,"y":196,"width":692,"height":12}},{"id":"58f654e2-0484-405b-8411-f989af339ff2","block_type":"box","text":"investments. Differences in the value of the Fund’s private investments could result in the Fund’s","page_number":178,"box":{"x":117,"y":211,"width":722,"height":12}},{"id":"8a261d74-6d8d-40ee-9c74-cfa205932804","block_type":"box","text":"shareholder transactions being effected at a NAV that does not accurately reflect the underlying value","page_number":178,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"577c981b-1e7a-4f49-be74-2108c061b7cd","block_type":"box","text":"of the Fund’s portfolio, potentially resulting in the dilution of shareholder interests and increasing","page_number":178,"box":{"x":116,"y":242,"width":718,"height":12}},{"id":"96ebdff0-cd37-4aba-9e47-a713b9677874","block_type":"box","text":"opportunities for shareholder arbitrage. The values used by the Fund to price its restricted securities","page_number":178,"box":{"x":116,"y":258,"width":747,"height":12}},{"id":"4ee4ae5d-8827-4f64-a904-c699a174ec5f","block_type":"box","text":"may also differ from those used by other investment companies and investors to price the same","page_number":178,"box":{"x":117,"y":273,"width":715,"height":12}},{"id":"748ab121-97d0-4768-a98d-1c4ebdcc7da5","block_type":"box","text":"restricted securities. In addition, the impact of changes in the market environment and other events on","page_number":178,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"c65c0798-1723-4b46-ba8a-23ced240d350","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":178,"box":{"x":116,"y":304,"width":769,"height":12}},{"id":"286fabf4-41f7-49bc-8688-56839c1bdd8b","block_type":"box","text":"impact of such changes on the readily available market values for the Fund’s other investments. A","page_number":178,"box":{"x":117,"y":320,"width":732,"height":12}},{"id":"f6cc95ac-f7b4-4241-a71d-a74bdf9fe137","block_type":"box","text":"Fund’s NAV could be adversely affected if the Fund’s determinations regarding the fair value of the","page_number":178,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"f6c8fcc3-5b92-498b-83a3-42906b645d0a","block_type":"box","text":"Fund’s investments were materially higher than the investment’s actual market or fair value or the","page_number":178,"box":{"x":117,"y":351,"width":728,"height":12}},{"id":"67cc5809-6cef-46b7-8dcd-449351bdf8b5","block_type":"box","text":"values that the Fund ultimately realizes upon the disposal of such investments.","page_number":178,"box":{"x":116,"y":366,"width":590,"height":12}},{"id":"c9773927-4b1c-4edb-8851-0e1bd38bbc95","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":178,"box":{"x":116,"y":394,"width":400,"height":12}},{"id":"ad52516f-20a2-4c57-b93f-2760deda2261","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":178,"box":{"x":116,"y":422,"width":271,"height":12}},{"id":"fdf185a0-05c6-45a6-99de-0afab7bacd00","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the","page_number":178,"box":{"x":389,"y":422,"width":481,"height":12}},{"id":"314da634-1209-4dd8-9af8-d8fa8f630684","block_type":"box","text":"same parties with whom it may enter into repurchase agreements. Under a reverse repurchase","page_number":178,"box":{"x":116,"y":438,"width":711,"height":11}},{"id":"861b5094-c987-4477-a447-403b89a8f0cd","block_type":"box","text":"agreement, a Fund sells securities to another party and agrees to repurchase them at a particular date","page_number":178,"box":{"x":116,"y":453,"width":766,"height":12}},{"id":"02a48383-bec7-4222-bf41-ad1e913759b6","block_type":"box","text":"and price. A Fund may enter into a reverse repurchase agreement when it is anticipated that the","page_number":178,"box":{"x":116,"y":469,"width":719,"height":11}},{"id":"b9ffa4d3-13dc-484b-8055-67d0a3e15b84","block_type":"box","text":"interest income to be earned from the investment of the proceeds of the transaction is greater than the","page_number":178,"box":{"x":117,"y":484,"width":765,"height":12}},{"id":"805ffb86-d236-4808-a129-5ff8936f5e29","block_type":"box","text":"interest expense of the transaction.","page_number":178,"box":{"x":117,"y":499,"width":265,"height":12}},{"id":"c718298d-22b4-4e31-ad36-34f857b48e50","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":178,"box":{"x":116,"y":527,"width":772,"height":12}},{"id":"84126132-710e-4a24-a7ea-7b9faea714f5","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the","page_number":178,"box":{"x":117,"y":543,"width":771,"height":12}},{"id":"742e4ea3-f686-4c30-b55b-05b14b6f8875","block_type":"box","text":"investment of the proceeds will be less than the interest expense, (ii) the market value of the securities","page_number":178,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"0c542376-db71-4e46-9784-bb60e60aab3d","block_type":"box","text":"retained in lieu of sale by a Fund may decline below","page_number":178,"box":{"x":117,"y":574,"width":390,"height":12}},{"id":"974238bb-92a8-4e9d-b4ab-5554b956f077","block_type":"box","text":"the price of the securities the Fund has sold but is","page_number":178,"box":{"x":507,"y":574,"width":375,"height":12}},{"id":"ebb981bb-81ce-4729-af0e-fd28c493d97b","block_type":"box","text":"obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which","page_number":178,"box":{"x":116,"y":589,"width":770,"height":12}},{"id":"fe0ef9e8-4d62-485f-aa41-af487023c281","block_type":"box","text":"the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.","page_number":178,"box":{"x":116,"y":605,"width":710,"height":12}},{"id":"f9859bb3-48fc-4448-9b67-da1d0d60563d","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or","page_number":178,"box":{"x":117,"y":633,"width":731,"height":12}},{"id":"43ab94b6-fef5-418c-b3d2-59abbae082b1","block_type":"box","text":"becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine","page_number":178,"box":{"x":117,"y":648,"width":765,"height":12}},{"id":"09b734d5-a4dc-4c6a-b6fd-41906d5ea04b","block_type":"box","text":"whether to enforce a Fund’s obligations to repurchase the securities and the Fund’s use of the","page_number":178,"box":{"x":116,"y":664,"width":699,"height":12}},{"id":"6d9c07ac-0db7-400d-8361-a77fb1d0b83b","block_type":"box","text":"proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.","page_number":178,"box":{"x":117,"y":679,"width":737,"height":12}},{"id":"296b1e75-fab5-41a9-a507-283d66716138","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase","page_number":178,"box":{"x":117,"y":707,"width":705,"height":12}},{"id":"154d974c-7fee-4108-bf67-90510bd492f0","block_type":"box","text":"agreements and similar financing transactions (e.g., recourse and non-recourse tender option bonds,","page_number":178,"box":{"x":116,"y":723,"width":749,"height":12}},{"id":"0626589e-68c7-4d58-957e-98421e98bb47","block_type":"box","text":"borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":178,"box":{"x":117,"y":738,"width":762,"height":12}},{"id":"7daf299d-bc35-4d5f-872d-ac7a825698d0","block_type":"box","text":"Investment Company Act, provided that the Fund either (i) complies with the 300% asset coverage","page_number":178,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"5dccf2b4-114f-4389-a7e5-fe52413d215e","block_type":"box","text":"ratio with respect to all such transactions and any","page_number":178,"box":{"x":117,"y":769,"width":366,"height":12}},{"id":"81d85416-7316-4086-b71c-019bd637852a","block_type":"box","text":"other borrowings in the aggregate, or (ii) treats all","page_number":178,"box":{"x":489,"y":769,"width":366,"height":12}},{"id":"bed66498-e7f2-491a-9e4d-72fd2ed43593","block_type":"box","text":"such transactions as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of","page_number":178,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"4f812022-5ed3-4bc8-a318-31f152328dd5","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also finalized rules","page_number":178,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"1401b4bf-689e-41bb-ab61-17c0cd8f6094","block_type":"box","text":"that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":178,"box":{"x":116,"y":816,"width":680,"height":12}},{"id":"f54921f2-8850-4c85-bf45-b43eeb18514d","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the","page_number":178,"box":{"x":116,"y":831,"width":736,"height":12}},{"id":"3c5a075e-c7b5-4bcb-928b-ca384b250300","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":178,"box":{"x":117,"y":847,"width":762,"height":12}},{"id":"6d0fc04f-6c3d-4040-99ad-4f3219bc0b04","block_type":"box","text":"the availability or increase the costs of such transactions and may adversely affect a Fund’s","page_number":178,"box":{"x":116,"y":862,"width":686,"height":12}},{"id":"f9aaea4e-b039-4f3c-9519-9573c648ce10","block_type":"box","text":"performance.","page_number":178,"box":{"x":117,"y":878,"width":103,"height":12}},{"id":"4b32b4e5-3d8a-44a8-8ffe-7af6810aaeef","block_type":"box","text":"II-92","page_number":178,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"e5c6e2ab-9d0b-4a5a-8036-fee601e9d4f8","block_type":"box","text":"NM1026U-6042785-178/259","page_number":178,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a0d75d12-9244-465c-9408-a0b0eebfd7e7","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated","page_number":179,"box":{"x":116,"y":87,"width":707,"height":12}},{"id":"2bf34fe5-e9bd-4af9-a060-f4ccf741282c","block_type":"box","text":"counterparties and certain of their affiliates to include in certain financial contracts, including many","page_number":179,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"fbbb3750-e302-4b79-8c9e-504428529899","block_type":"box","text":"reverse repurchase agreements, terms that delay or restrict the rights of counterparties, such as a","page_number":179,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"f77a5d43-9014-485b-8c1e-fd94ac4dc3e1","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":179,"box":{"x":117,"y":134,"width":744,"height":12}},{"id":"0c4cf6e8-f11b-42b8-b95d-98b62218c91f","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":179,"box":{"x":116,"y":149,"width":748,"height":12}},{"id":"4a896f4e-8123-4d9e-94d4-f9344bd188a3","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":179,"box":{"x":116,"y":165,"width":707,"height":12}},{"id":"a0cb3b94-cd46-4905-8555-15d21e9469f1","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":179,"box":{"x":117,"y":180,"width":729,"height":12}},{"id":"4ced821d-c64c-457d-8d1d-a53ab11d24a5","block_type":"box","text":"affect a Fund’s ability to terminate existing reverse repurchase agreements or to realize amounts to be","page_number":179,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"b74ee711-31aa-4402-86b1-3af16a1dda11","block_type":"box","text":"received under such agreements.","page_number":179,"box":{"x":117,"y":211,"width":253,"height":12}},{"id":"7833de19-5a3c-4167-821f-d697643daee6","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":179,"box":{"x":116,"y":242,"width":349,"height":12}},{"id":"22809114-8d2b-4e30-9bfc-66f44cc91e28","block_type":"box","text":"Certain Funds may participate in rights offerings and","page_number":179,"box":{"x":466,"y":242,"width":399,"height":12}},{"id":"242330b4-f778-405c-bdbd-220164ce0fd5","block_type":"box","text":"may purchase warrants, which are privileges issued by corporations enabling the owners to subscribe","page_number":179,"box":{"x":117,"y":258,"width":759,"height":12}},{"id":"72a59472-afdd-42e1-8a84-0f47b194fc4f","block_type":"box","text":"to and purchase a specified number of shares of the corporation at a specified price during a specified","page_number":179,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"96cc02d2-e6da-41d6-98ba-fb326ace62d2","block_type":"box","text":"period of time. Subscription rights normally have a short life span to expiration. The purchase of rights","page_number":179,"box":{"x":117,"y":289,"width":759,"height":12}},{"id":"2e0c8418-aef9-4878-99a2-f7ac0d5f29d0","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":179,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"fa1dd5f7-0a8a-4617-bf00-9c06dc9aa0fa","block_type":"box","text":"to subscribe to additional shares is not exercised prior to the rights’ and warrants’ expiration. Also, the","page_number":179,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"2ed866ec-e7b5-469b-bdc3-800161c21438","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":179,"box":{"x":117,"y":335,"width":732,"height":12}},{"id":"55da24b4-d184-4fab-adb0-aa2d7cfd4aed","block_type":"box","text":"warrant added to the subscription price of the related security may exceed the value of the subscribed","page_number":179,"box":{"x":116,"y":351,"width":762,"height":12}},{"id":"973422a9-a90e-4cb1-b2fe-680fe1a640b7","block_type":"box","text":"security’s market price such as when there is no movement in the level of the underlying security.","page_number":179,"box":{"x":116,"y":366,"width":728,"height":12}},{"id":"ac0dc124-4d3a-46f4-a41f-0b417c2537fd","block_type":"box","text":"Buying a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder","page_number":179,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"84d0466e-3b27-4a56-bcc1-8f80d5c87c40","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":179,"box":{"x":117,"y":397,"width":766,"height":12}},{"id":"4e24a99e-96b5-4edc-adc9-a15a7da6bfc9","block_type":"box","text":"to assets of the issuer, and for this reason investments in warrants may be more speculative than other","page_number":179,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"0e120634-c3e8-46b8-a463-2a2dea15f0fb","block_type":"box","text":"equity-based investments.","page_number":179,"box":{"x":116,"y":428,"width":200,"height":12}},{"id":"08ba0c3c-536b-4ed1-85dc-bf8b213a3d92","block_type":"box","text":"Rule 144A Securities.","page_number":179,"box":{"x":116,"y":459,"width":170,"height":10}},{"id":"83f287ea-d11b-45a9-b027-459a1b72b940","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":179,"box":{"x":287,"y":459,"width":590,"height":12}},{"id":"ec63544b-f058-402d-82c9-2b22d205229e","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":179,"box":{"x":117,"y":475,"width":769,"height":12}},{"id":"e004b439-43ea-4ac6-8b1d-14a06f097338","block_type":"box","text":"Securities Lending.","page_number":179,"box":{"x":117,"y":506,"width":153,"height":12}},{"id":"70960bb5-4084-46ce-908d-1d93ccefaa7a","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock","page_number":179,"box":{"x":271,"y":506,"width":575,"height":12}},{"id":"20d8bee0-87f9-4ec8-bf15-03639f4eb3e2","block_type":"box","text":"determines to be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide","page_number":179,"box":{"x":116,"y":521,"width":744,"height":12}},{"id":"3a689b33-5246-450c-ab7c-e87e907f8c1c","block_type":"box","text":"collateral that is maintained in an amount at least","page_number":179,"box":{"x":116,"y":537,"width":369,"height":9}},{"id":"672b496d-ab09-4196-9b88-c1d6a42ea630","block_type":"box","text":"equal to the current market value of the securities","page_number":179,"box":{"x":486,"y":537,"width":373,"height":12}},{"id":"61a62693-91fe-4b50-ab12-f712ff1dcf69","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":179,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"bbd6fba4-f59e-48ee-83be-358ad2665fff","block_type":"box","text":"securities loans of the particular Fund exceeds one-third of the value of such Fund’s total assets","page_number":179,"box":{"x":116,"y":568,"width":718,"height":12}},{"id":"648348c6-34ff-46f0-8545-7179b259158b","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":179,"box":{"x":117,"y":583,"width":765,"height":12}},{"id":"55a10f94-b55c-4e34-b4a9-a04ac0077c79","block_type":"box","text":"return of the securities loaned. Each Fund receives, by way of substitute payment, the value of any","page_number":179,"box":{"x":117,"y":599,"width":738,"height":12}},{"id":"3354519e-dc78-4adb-86ca-af0fcbe34409","block_type":"box","text":"interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise","page_number":179,"box":{"x":117,"y":614,"width":738,"height":12}},{"id":"d98fbadc-c86d-4648-b08c-ee043fdc44bd","block_type":"box","text":"received if the securities were not on loan.","page_number":179,"box":{"x":117,"y":630,"width":318,"height":9}},{"id":"63bec8aa-b4ca-4bd2-a696-6c7b3b299508","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee","page_number":179,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"e79f958b-ea56-41eb-8988-c2288518dbdf","block_type":"box","text":"based on the amount of cash collateral. The Funds are compensated by any positive difference","page_number":179,"box":{"x":117,"y":676,"width":707,"height":12}},{"id":"388023cb-9d5f-4b1c-8864-d3a69ea8f95e","block_type":"box","text":"between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In","page_number":179,"box":{"x":117,"y":692,"width":758,"height":12}},{"id":"b0758c9c-f2d1-451c-b362-a8fa9742d45c","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":179,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"bc0bad59-a950-4027-88ca-b66a562f379c","block_type":"box","text":"percentage of the market value of the loaned securities. Any cash collateral received by the Fund for","page_number":179,"box":{"x":117,"y":723,"width":746,"height":12}},{"id":"969b03a7-1e02-4bb7-b43b-a75c6e4a507b","block_type":"box","text":"such loans, and uninvested cash, may be reinvested in certain short-term instruments either directly on","page_number":179,"box":{"x":116,"y":738,"width":764,"height":12}},{"id":"78303d03-4810-4863-b7ec-0389ddb1fb8f","block_type":"box","text":"behalf of the Fund or through one or more joint accounts or money market funds, including those","page_number":179,"box":{"x":117,"y":754,"width":717,"height":12}},{"id":"c1606a2d-7544-4f99-afb8-12a332012704","block_type":"box","text":"affiliated with BlackRock; such investments are subject to investment risk.","page_number":179,"box":{"x":116,"y":769,"width":546,"height":12}},{"id":"0b48d5e7-a44b-4bf4-b9c4-3c4b654cce19","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":179,"box":{"x":116,"y":800,"width":589,"height":12}},{"id":"66977e74-d3dc-4b26-9e17-05fc1b59275e","block_type":"box","text":"i.e.","page_number":179,"box":{"x":706,"y":800,"width":21,"height":10}},{"id":"d42cafcd-024f-4d59-97b1-b04be01fcbb8","block_type":"box","text":", the risk of losses","page_number":179,"box":{"x":730,"y":800,"width":132,"height":11}},{"id":"553098e5-65ce-43c2-b9ec-8b82a3e286db","block_type":"box","text":"resulting from problems in the settlement and accounting process), “gap” risk (","page_number":179,"box":{"x":117,"y":816,"width":580,"height":12}},{"id":"39214e1e-16d5-454b-8219-5689f73056d9","block_type":"box","text":"i.e.","page_number":179,"box":{"x":698,"y":816,"width":21,"height":9}},{"id":"7be3f971-3601-44d2-9473-3759b760eacd","block_type":"box","text":", the risk of a","page_number":179,"box":{"x":722,"y":816,"width":94,"height":11}},{"id":"8a92d9fa-04ed-4eaa-b791-b391dd2e07b7","block_type":"box","text":"mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to","page_number":179,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"7d99a99c-5b0f-4db6-baac-4249e040f045","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":179,"box":{"x":117,"y":847,"width":296,"height":12}},{"id":"eac926b0-c946-40c0-87e8-6965cc788884","block_type":"box","text":"i.e.","page_number":179,"box":{"x":414,"y":847,"width":20,"height":9}},{"id":"c15d2876-26f7-4c7a-a193-aca531d33502","block_type":"box","text":", the risk of a shortfall at default when a cash collateral","page_number":179,"box":{"x":437,"y":847,"width":409,"height":11}},{"id":"9a31d48d-f026-44fb-98ac-be5eebb0b003","block_type":"box","text":"investment is denominated in a currency other than the currency of the assets being loaned due to","page_number":179,"box":{"x":117,"y":862,"width":735,"height":12}},{"id":"7801d5c9-21fb-43c0-b7a6-261774fd2549","block_type":"box","text":"movements in foreign exchange rates), and credit, legal, counterparty and market risks (including the","page_number":179,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"50de1dda-708c-4aff-b9f5-588e355e97fd","block_type":"box","text":"II-93","page_number":179,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"00e2cdb7-0153-4411-928d-d13c9fade78d","block_type":"box","text":"NM1026U-6042785-179/259","page_number":179,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"917c7fa9-c11b-47ba-b9c8-942715d46897","block_type":"box","text":"risk that market events, including but not limited to corporate actions, could lead a Fund to lend","page_number":180,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"54f686e3-c86e-4b68-803b-ce263fbffc86","block_type":"box","text":"securities that are trading at a premium due to increased demand, or to recall loaned securities or to","page_number":180,"box":{"x":116,"y":103,"width":748,"height":12}},{"id":"23b53245-dd78-4575-b70b-b5b0c00194a6","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":180,"box":{"x":117,"y":118,"width":754,"height":12}},{"id":"781a527f-54c1-4077-af5c-785d32d630d0","block_type":"box","text":"out securities that are subject to a corporate action and commit to the borrower a particular election as","page_number":180,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"d9030931-9cb6-4867-acfe-0f815c692009","block_type":"box","text":"determined by the Fund’s investment adviser, the benefit the Fund would receive in respect of","page_number":180,"box":{"x":116,"y":149,"width":702,"height":12}},{"id":"8b9c9cd6-b949-4ec6-8455-4a09d67ffa30","block_type":"box","text":"committing to such election may or may not be less than the benefit the Fund would have received","page_number":180,"box":{"x":116,"y":165,"width":736,"height":12}},{"id":"83519a1d-0b38-41c9-9dbc-5f6df50892bc","block_type":"box","text":"from making a different election in such corporate action. If a securities lending counterparty were to","page_number":180,"box":{"x":116,"y":180,"width":748,"height":12}},{"id":"a2ef1aa8-255d-4eee-a78c-d997797a22f0","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":180,"box":{"x":116,"y":196,"width":751,"height":12}},{"id":"f494cde9-450a-48ee-9fa9-a071fd3fdca2","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":180,"box":{"x":116,"y":211,"width":751,"height":12}},{"id":"ccc01275-3269-4823-982f-0a787cba86e5","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":180,"box":{"x":117,"y":227,"width":748,"height":12}},{"id":"be0fe34a-62db-4325-8f4d-8799a76c3f8b","block_type":"box","text":"be impacted, or the Fund may experience losses if the proceeds received from liquidating the collateral","page_number":180,"box":{"x":117,"y":242,"width":769,"height":12}},{"id":"95d13e03-f89e-4437-996f-6dedde0a2a9b","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":180,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"4b68eadb-fef6-4ba0-858f-6706c59e240a","block_type":"box","text":"transaction costs incurred in purchasing replacement securities. This latter event could trigger adverse","page_number":180,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"2c2a0c00-7563-4c14-b8f0-ad697cc9d0e2","block_type":"box","text":"tax consequences for a Fund. A Fund could lose money if its short-term investment of the collateral","page_number":180,"box":{"x":116,"y":289,"width":742,"height":12}},{"id":"3527f7c6-aa08-40bc-8a17-c1734b5727f2","block_type":"box","text":"declines in value over the period of the loan. Substitute payments received by a Fund representing","page_number":180,"box":{"x":116,"y":304,"width":737,"height":12}},{"id":"7ca4a5ad-c2ec-468f-8a0a-61bb4a717cfd","block_type":"box","text":"dividends paid on securities loaned out by the Fund will not be considered qualified dividend income,","page_number":180,"box":{"x":116,"y":320,"width":752,"height":12}},{"id":"2e22b12c-6ae5-4c03-ab2b-81575c68f921","block_type":"box","text":"and distributions by the Fund of such substitute payments will not constitute qualified dividend income.","page_number":180,"box":{"x":116,"y":335,"width":765,"height":12}},{"id":"7162acf4-0878-4cbc-9a3e-11b155904d42","block_type":"box","text":"Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":180,"box":{"x":116,"y":351,"width":741,"height":12}},{"id":"4ad0c84e-550e-4c31-be08-d9f8d91e18d5","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and","page_number":180,"box":{"x":117,"y":366,"width":684,"height":12}},{"id":"d5797b9c-4d4b-446e-bcb7-f23a8f456c42","block_type":"box","text":"distributions by the Fund of such substitute payments will not be eligible for a 20% deduction currently","page_number":180,"box":{"x":116,"y":382,"width":761,"height":12}},{"id":"09f73925-46c3-4425-bca5-78caefce4f3d","block_type":"box","text":"available for ordinary REIT dividends paid to non-corporate shareholders provided certain other","page_number":180,"box":{"x":116,"y":397,"width":713,"height":12}},{"id":"df79b4c7-f636-4ac4-a17e-3ac295118aa2","block_type":"box","text":"requirements are satisfied. The securities lending agent will take into account the tax effects on","page_number":180,"box":{"x":117,"y":413,"width":710,"height":12}},{"id":"8411beb0-bb24-457f-b688-f15c458d047b","block_type":"box","text":"shareholders caused by these differences in connection with a Fund’s securities lending program.","page_number":180,"box":{"x":116,"y":428,"width":730,"height":12}},{"id":"e0e96985-4398-4baa-803a-0589772abde2","block_type":"box","text":"Substitute payments received on tax-exempt securities loaned out will not be tax-exempt income.","page_number":180,"box":{"x":116,"y":444,"width":727,"height":12}},{"id":"f6cdf2f4-2d60-4de0-9409-c59e49bff299","block_type":"box","text":"There could also be changes in the status of issuers under applicable laws and regulations, including","page_number":180,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"0e1a0536-94e6-4645-80e3-655c9cacf244","block_type":"box","text":"tax regulations, that may impact the regulatory or tax treatment of loaned securities and could, for","page_number":180,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"186480be-cee1-40cd-8dab-c898aa4489df","block_type":"box","text":"example, result in a delay in the payment of dividend equivalent payments owed to a Fund (as","page_number":180,"box":{"x":116,"y":490,"width":704,"height":12}},{"id":"56fe8ddb-8c3d-41ae-b28d-5c85ab87556d","block_type":"box","text":"permitted by applicable law).","page_number":180,"box":{"x":117,"y":506,"width":217,"height":12}},{"id":"a1406e0f-c2fa-4726-9f27-644295c10f5d","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":180,"box":{"x":117,"y":537,"width":761,"height":12}},{"id":"ec51784c-b3a3-4481-b95e-3011d59dd5b8","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many securities lending","page_number":180,"box":{"x":116,"y":552,"width":723,"height":12}},{"id":"fc5a167e-4748-4f8a-ae16-f30ef352ca67","block_type":"box","text":"agreements, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate","page_number":180,"box":{"x":116,"y":568,"width":739,"height":12}},{"id":"750e4205-091b-4ae1-8653-d8e7ddf794bf","block_type":"box","text":"such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":180,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"f1a57cb2-139b-447a-bd41-f62aefe55cd2","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution","page_number":180,"box":{"x":116,"y":599,"width":754,"height":12}},{"id":"5fe2dc8f-d2ae-4894-aaa5-9e04d9724bef","block_type":"box","text":"or insolvency proceedings. It is possible that these requirements, as well as potential additional","page_number":180,"box":{"x":116,"y":614,"width":711,"height":12}},{"id":"4b60d643-b41c-482e-b54e-eb79a86d80fe","block_type":"box","text":"government regulation and other developments in the market, could adversely affect the Fund’s ability","page_number":180,"box":{"x":116,"y":630,"width":762,"height":12}},{"id":"bb7063b0-1ac7-49a8-9503-0fdedd714b03","block_type":"box","text":"to terminate existing securities lending agreements or to realize amounts to be received under such","page_number":180,"box":{"x":116,"y":645,"width":744,"height":12}},{"id":"87e2fc54-2ae5-4f45-929c-91b925a517f2","block_type":"box","text":"agreements. Prudential regulation may also favor lenders that can provide additional protections, such","page_number":180,"box":{"x":116,"y":661,"width":758,"height":12}},{"id":"06bf0b17-71d4-44f3-9ace-d4bcc25012e9","block_type":"box","text":"as liens that are exercisable upon lender default, to bank borrowers. Certain Funds expect to provide","page_number":180,"box":{"x":116,"y":676,"width":749,"height":12}},{"id":"252be11b-c936-4da8-98f1-092157b311c1","block_type":"box","text":"additional protections to bank borrowers, where permitted pursuant to a Fund’s investment policies and","page_number":180,"box":{"x":116,"y":692,"width":765,"height":12}},{"id":"0dfba45f-b189-488c-aee7-29f51a80e163","block_type":"box","text":"if BlackRock believes doing so is in the best interest of the Fund.","page_number":180,"box":{"x":117,"y":707,"width":478,"height":12}},{"id":"def8f150-5670-4d08-8778-ef7946bcb075","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan","page_number":180,"box":{"x":116,"y":738,"width":693,"height":12}},{"id":"6bff5a58-b6cb-4a05-ac13-0c4c6b3b78c5","block_type":"box","text":"transaction","page_number":180,"box":{"x":116,"y":754,"width":81,"height":9}},{"id":"b123ded5-ed19-40e5-9719-3d01e63f8d7a","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information","page_number":180,"box":{"x":204,"y":754,"width":661,"height":12}},{"id":"05a15280-d9bb-45ef-a65f-e8e357634c76","block_type":"box","text":"about securities","page_number":180,"box":{"x":116,"y":769,"width":117,"height":10}},{"id":"55cb05a7-1452-447a-b3b5-eeac81225e51","block_type":"box","text":"loans entered into in connection with short sales. Compliance with this rule is expected","page_number":180,"box":{"x":239,"y":769,"width":643,"height":12}},{"id":"86dcc9b2-c25b-40bc-b325-ae3595ce8b53","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":180,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"9eeac492-a144-4073-91d2-f46bbca3cfd0","block_type":"box","text":"the SEC may amend the rule and/or delay the current expected compliance date.","page_number":180,"box":{"x":116,"y":800,"width":602,"height":12}},{"id":"97bcd081-cd8b-4d1f-b44f-cdfdf03ae549","block_type":"box","text":"Short Sales.","page_number":180,"box":{"x":117,"y":831,"width":95,"height":10}},{"id":"8bb2633a-a610-48bd-82da-dc4f547fec23","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential","page_number":180,"box":{"x":213,"y":831,"width":645,"height":12}},{"id":"a707ac45-be81-471d-93d6-634acd4a054d","block_type":"box","text":"declines in value of a portfolio security or to realize appreciation when a security that the Fund does","page_number":180,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"a9062f59-7b53-4437-ad3e-4a22ac5b6fce","block_type":"box","text":"not own declines in value. Certain Funds have a fundamental investment restriction prohibiting short","page_number":180,"box":{"x":117,"y":862,"width":747,"height":12}},{"id":"36306567-ee26-45ee-a830-2ec3726a6990","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":180,"box":{"x":116,"y":878,"width":771,"height":12}},{"id":"65ae2a29-84f9-43da-8a0e-fbb44ce2e22f","block_type":"box","text":"II-94","page_number":180,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e68fbbe8-f0f4-4d05-985b-284aa6103d1b","block_type":"box","text":"NM1026U-6042785-180/259","page_number":180,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"80b39378-dfec-42f8-85ce-46d007ef00fc","block_type":"box","text":"sale, the Fund owns or has the immediate and unconditional right to acquire the identical security at no","page_number":181,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"48cde688-9f62-41c7-b867-5be386dbe5e0","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":181,"box":{"x":116,"y":103,"width":746,"height":12}},{"id":"b66bd0b4-6691-441e-8617-f4738915b0dc","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":181,"box":{"x":116,"y":118,"width":717,"height":12}},{"id":"94a2f6cd-0919-4265-8b4b-a1b30eadcdb5","block_type":"box","text":"particular securities and is often obligated to turn over any payments received on such borrowed","page_number":181,"box":{"x":117,"y":134,"width":719,"height":12}},{"id":"4d77ca51-8ea7-4c8e-a81a-e6b84cbd2182","block_type":"box","text":"securities to the lender of the securities.","page_number":181,"box":{"x":116,"y":149,"width":301,"height":10}},{"id":"25ce824f-bd58-431d-a0c0-85c7676de4f6","block_type":"box","text":"A Fund secures its obligation to replace the borrowed security by depositing collateral with the broker","page_number":181,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"68d5ee8b-cd38-47f3-a3f5-5bcf6d2a3041","block_type":"box","text":"dealer, usually in cash, U.S. Government Securities or other liquid securities similar to those borrowed.","page_number":181,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"df275a31-cca8-4684-b737-756f08e755eb","block_type":"box","text":"With respect to uncovered short positions, a Fund is required to deposit similar collateral with its","page_number":181,"box":{"x":116,"y":211,"width":717,"height":12}},{"id":"1cf5aa60-5224-4689-9ffd-c0ee22772869","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":181,"box":{"x":116,"y":227,"width":763,"height":12}},{"id":"8624018d-887c-413b-9199-c8adcc64e28c","block_type":"box","text":"times equal to at least 100% of the current market value of the security sold short. Depending on","page_number":181,"box":{"x":116,"y":242,"width":722,"height":12}},{"id":"b9e3b87e-4704-4219-8568-b6b44521a5de","block_type":"box","text":"arrangements made with the broker-dealer from which the Fund borrowed the security, regarding","page_number":181,"box":{"x":116,"y":258,"width":726,"height":12}},{"id":"330febc4-b7f8-41db-aa28-29025196d636","block_type":"box","text":"payment received by the Fund on such security, a Fund may not receive any payments (including","page_number":181,"box":{"x":117,"y":273,"width":728,"height":12}},{"id":"9349ffef-ea28-4bf6-94a7-ea14a30553c5","block_type":"box","text":"interest) on its collateral deposited with such broker-dealer.","page_number":181,"box":{"x":117,"y":289,"width":443,"height":12}},{"id":"6a2ce87e-be03-45be-9110-fe575a7bb47a","block_type":"box","text":"Because making short sales in securities that it does not own exposes a Fund to the risks associated","page_number":181,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"a0e9959b-47ea-490e-9f86-4a8cb41bd895","block_type":"box","text":"with those securities, such short sales involve speculative exposure risk. A Fund will incur a loss as a","page_number":181,"box":{"x":116,"y":335,"width":755,"height":12}},{"id":"00a41217-28ae-4234-bf30-5e1d7b352d08","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":181,"box":{"x":117,"y":351,"width":743,"height":12}},{"id":"b0875ba9-7125-4b88-a300-213dda59468d","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":181,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"9c4a5e95-748c-408d-859c-6132e9c9a9e0","block_type":"box","text":"securities that increase in value, it will likely underperform similar mutual funds that do not make short","page_number":181,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"78ca5e77-2eed-47fc-b630-01dacb9311a6","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":181,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"a94cec76-32d4-4f3a-b37a-87c4d3ea3987","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":181,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"f1d236bc-7361-4d5e-a1b8-c6bc19facd7f","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":181,"box":{"x":116,"y":428,"width":750,"height":12}},{"id":"d00e21f8-db49-42a9-84bc-183519cd0fdf","block_type":"box","text":"sold the security short, its potential loss is limited only by the maximum attainable price of the security,","page_number":181,"box":{"x":116,"y":444,"width":764,"height":12}},{"id":"1d585fab-6e6a-4628-ac84-55ba4e5740af","block_type":"box","text":"less the price at which the security was sold and may, theoretically, be unlimited.","page_number":181,"box":{"x":117,"y":459,"width":603,"height":12}},{"id":"b26063cb-036a-48c3-8cbc-29ca3fc86723","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":181,"box":{"x":116,"y":490,"width":698,"height":12}},{"id":"2452834a-6b91-468d-b16b-146b0b230303","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":181,"box":{"x":116,"y":521,"width":756,"height":12}},{"id":"9893a411-b0ee-47c2-a955-7f2e979d3697","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “— Derivatives —","page_number":181,"box":{"x":117,"y":537,"width":734,"height":12}},{"id":"3c301652-1082-4d4f-8e1e-8ec823a99639","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":181,"box":{"x":117,"y":552,"width":624,"height":12}},{"id":"c32cb126-2df0-4b6a-a4b7-dbdb979bd197","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United","page_number":181,"box":{"x":116,"y":583,"width":712,"height":12}},{"id":"546c66fc-39a6-4d7d-b0d5-3ab5b30a5b17","block_type":"box","text":"Kingdom regulations (under which there are restrictions on net short sales in certain securities). If the","page_number":181,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"8064e551-bed9-45ce-99e0-5bce345cf492","block_type":"box","text":"SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding short","page_number":181,"box":{"x":116,"y":614,"width":761,"height":12}},{"id":"d702aaaa-26e3-4997-98ad-4423e8c11e73","block_type":"box","text":"sales, they could restrict a Fund’s ability to engage in short sales in certain circumstances, and the","page_number":181,"box":{"x":116,"y":630,"width":736,"height":12}},{"id":"3cac156e-b406-4399-8e04-fd237be26ddf","block_type":"box","text":"Fund may be unable to execute its investment strategy as a result. In response to market events, the","page_number":181,"box":{"x":117,"y":645,"width":753,"height":12}},{"id":"ca5ce197-5048-49a5-a676-5683c17095aa","block_type":"box","text":"SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted)","page_number":181,"box":{"x":116,"y":661,"width":742,"height":12}},{"id":"833b0f73-10d2-4267-8d53-94b44be600a8","block_type":"box","text":"bans or other restrictions on short sales of certain securities or on derivatives and other hedging","page_number":181,"box":{"x":117,"y":676,"width":711,"height":12}},{"id":"40fb1c98-f031-4e83-8383-cedcfcf6ac9f","block_type":"box","text":"instruments used to achieve a similar economic effect. Such bans or other restrictions may make it","page_number":181,"box":{"x":117,"y":692,"width":731,"height":12}},{"id":"95dfb562-a2f3-4c0c-8a87-746f7a0e3a55","block_type":"box","text":"impossible for a Fund to execute certain investment strategies and may have a material adverse effect","page_number":181,"box":{"x":117,"y":707,"width":760,"height":12}},{"id":"a58b173d-1631-435b-bec2-2c785b0e9519","block_type":"box","text":"on the Fund’s ability to generate returns.","page_number":181,"box":{"x":116,"y":723,"width":299,"height":12}},{"id":"90ce5239-6e55-41e5-9fde-1dc03b35b81e","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":181,"box":{"x":117,"y":754,"width":325,"height":12}},{"id":"3e4f9e2e-0701-4de8-887e-8d39666cf8cc","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other","page_number":181,"box":{"x":448,"y":754,"width":402,"height":12}},{"id":"a065b3e9-9c27-4ccb-a45e-b9b40918cacd","block_type":"box","text":"interests issued by special purpose acquisition companies (“SPACs”) or similar special purpose entities","page_number":181,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"408072a8-10b8-4dc8-ae7f-67138a947a35","block_type":"box","text":"that pool funds to seek potential acquisition opportunities, including the “founder’s” shares and","page_number":181,"box":{"x":116,"y":785,"width":698,"height":12}},{"id":"441c3d8d-9508-42ce-8f0b-99199926d10a","block_type":"box","text":"warrants described below. A SPAC is a publicly traded company that raises investment capital via an","page_number":181,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"50d84d7f-0439-4afa-ab11-21c04af0e530","block_type":"box","text":"IPO for the purpose of identifying and acquiring one or more operating businesses or assets. In","page_number":181,"box":{"x":117,"y":816,"width":705,"height":12}},{"id":"3835160a-547f-4bd6-b73e-be80307d0dff","block_type":"box","text":"connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s” shares, generally for","page_number":181,"box":{"x":116,"y":831,"width":716,"height":12}},{"id":"58782d51-2f30-40d4-9046-6ae329b64099","block_type":"box","text":"nominal consideration, and warrants that will result in the sponsors owning a specified percentage","page_number":181,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"98a303d7-3f36-4945-9fc7-7edb022b245a","block_type":"box","text":"(typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a","page_number":181,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"b488e722-f088-4a81-b90f-46e222697952","block_type":"box","text":"SPAC conducts an IPO, it has selected a management team but has not yet identified a specific","page_number":181,"box":{"x":116,"y":878,"width":718,"height":12}},{"id":"cbd28bba-383a-4c1d-963e-6ed1d8b5ab31","block_type":"box","text":"II-95","page_number":181,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9e261a74-0041-4507-9f56-0e2b82bb8ca8","block_type":"box","text":"NM1026U-6042785-181/259","page_number":181,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a8745973-8c6c-45ca-a7bf-8f488d08c7ce","block_type":"box","text":"acquisition opportunity. Unless and until an acquisition is completed, a SPAC generally invests its","page_number":182,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"a102c39c-b492-459f-b1a5-170fddad01b4","block_type":"box","text":"assets in U.S. Government securities, money market securities and cash. If an acquisition that meets","page_number":182,"box":{"x":116,"y":102,"width":756,"height":13}},{"id":"97867dbf-d0a6-470c-997f-15acddaf92df","block_type":"box","text":"the requirements for the SPAC is not completed within a pre-established period of time, the invested","page_number":182,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"eca6b0fd-5d7d-4181-8a6c-d6fc73fc247f","block_type":"box","text":"funds are returned to the SPAC’s public shareholders, the warrants expire, and the “founder’s” shares","page_number":182,"box":{"x":116,"y":134,"width":761,"height":11}},{"id":"46cac53c-3139-458f-a791-c1b1acbc5016","block_type":"box","text":"and such warrants become worthless. Because SPACs and similar entities are in essence “blank","page_number":182,"box":{"x":116,"y":149,"width":725,"height":10}},{"id":"9d78f560-aa40-427b-b200-a66873da3ab4","block_type":"box","text":"check” companies without operating histories or ongoing business operations (other than identifying","page_number":182,"box":{"x":116,"y":165,"width":745,"height":12}},{"id":"f6708af3-a12d-4843-82bc-b4dde4e32246","block_type":"box","text":"and pursuing acquisitions), the potential for the long-term capital appreciation of their securities is","page_number":182,"box":{"x":116,"y":180,"width":728,"height":12}},{"id":"3e8a37c8-b375-433a-b7f5-1c8dc1d6d6de","block_type":"box","text":"particularly dependent on the ability of the SPAC’s management to identify and complete a profitable","page_number":182,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"f6961ad0-77da-4d73-8479-748b5ac3874e","block_type":"box","text":"acquisition. There is no guarantee that the SPACs in which a Fund invests will complete an acquisition","page_number":182,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"149b8e13-d179-4b78-99e4-7a70afbec1b2","block_type":"box","text":"or that any acquisitions completed by the SPACs in which the Fund invests will be profitable. Some","page_number":182,"box":{"x":116,"y":227,"width":740,"height":12}},{"id":"d232eb4d-1734-4b35-816a-0d2ce13ce3e9","block_type":"box","text":"SPACs may pursue acquisitions only within certain industries or regions, which may ultimately lead to","page_number":182,"box":{"x":116,"y":242,"width":758,"height":12}},{"id":"401b44be-f092-4ab1-bb9d-8c211421bc07","block_type":"box","text":"an increase in the volatility of their prices following the acquisition. In addition, some of these securities","page_number":182,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"396fa36e-2a46-43fd-84d7-67fa67346c06","block_type":"box","text":"may be considered illiquid and/or subject to restrictions on resale.","page_number":182,"box":{"x":117,"y":273,"width":491,"height":12}},{"id":"5bbf29b3-eed2-4168-88c3-50dbe725e264","block_type":"box","text":"Standby Commitment Agreements.","page_number":182,"box":{"x":117,"y":301,"width":278,"height":12}},{"id":"49d51aaa-b334-49bf-a322-47a3d0b0c784","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated","page_number":182,"box":{"x":396,"y":301,"width":471,"height":12}},{"id":"d808dcc3-0070-471c-9ef7-a4939170db93","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":182,"box":{"x":117,"y":316,"width":750,"height":13}},{"id":"94699dec-22a7-435a-9235-23dc0cab4220","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":182,"box":{"x":116,"y":332,"width":756,"height":12}},{"id":"2aa281f9-5598-4f11-a429-99de67a8588d","block_type":"box","text":"entering into the agreement, a Fund is paid a commitment fee, regardless of whether or not the","page_number":182,"box":{"x":116,"y":347,"width":711,"height":13}},{"id":"03e9b400-3383-4f2e-8585-2abd7bb090ec","block_type":"box","text":"security is ultimately issued. A Fund will enter into such agreements for the purpose of investing in the","page_number":182,"box":{"x":116,"y":363,"width":762,"height":12}},{"id":"66955f4c-bb59-4cb4-b048-a80aa81e4d41","block_type":"box","text":"security underlying the commitment at a price that is considered advantageous to the Fund.","page_number":182,"box":{"x":116,"y":379,"width":685,"height":12}},{"id":"ded85f75-ffd7-47ed-b08e-eb9d687539f9","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the","page_number":182,"box":{"x":116,"y":407,"width":767,"height":11}},{"id":"1de82230-6b58-4de6-8cec-53b4bfd40ff4","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":182,"box":{"x":116,"y":422,"width":764,"height":12}},{"id":"2edd0b9a-ca00-4db8-b9b6-a599757a9410","block_type":"box","text":"the issuance of the security underlying the commitment is at the option of the issuer, the Fund may","page_number":182,"box":{"x":116,"y":437,"width":738,"height":12}},{"id":"47dd2423-f653-4b56-b52e-7bf864c04b92","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":182,"box":{"x":117,"y":453,"width":756,"height":12}},{"id":"3f1c2894-4dea-4553-a9ff-65463fddeaf4","block_type":"box","text":"value of the security during the commitment period.","page_number":182,"box":{"x":116,"y":468,"width":386,"height":12}},{"id":"cf3389dd-2bdf-4df3-900e-fc69a9c39022","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment","page_number":182,"box":{"x":116,"y":496,"width":756,"height":12}},{"id":"3f8a4db3-0406-4049-ba85-41b3e47c7672","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":182,"box":{"x":116,"y":512,"width":769,"height":12}},{"id":"68b1fe55-2aeb-4917-9817-6a659709d56e","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":182,"box":{"x":116,"y":527,"width":765,"height":12}},{"id":"5e104ad0-3586-40b9-9482-a39b25dc6b63","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":182,"box":{"x":116,"y":543,"width":748,"height":12}},{"id":"4a7ce703-bb1d-48b4-af5c-bb5556137210","block_type":"box","text":"the commitment fee will be recorded as income on the expiration date of the standby commitment.","page_number":182,"box":{"x":116,"y":558,"width":727,"height":12}},{"id":"7927833b-8007-4b64-9041-797f256341c1","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the","page_number":182,"box":{"x":116,"y":586,"width":744,"height":12}},{"id":"621af4e6-5925-41b3-bc12-12a645f9a497","block_type":"box","text":"Manager’s or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby","page_number":182,"box":{"x":117,"y":602,"width":693,"height":12}},{"id":"8e5bfb22-4359-40ea-828e-1f6c1a6a2465","block_type":"box","text":"commitments solely to facilitate portfolio liquidity and not to exercise its rights thereunder for trading","page_number":182,"box":{"x":116,"y":617,"width":744,"height":12}},{"id":"78e0f904-8d79-421e-b4b5-8da83838f016","block_type":"box","text":"purposes. Standby commitments will be valued at zero in determining NAV. Accordingly, where a Fund","page_number":182,"box":{"x":117,"y":633,"width":769,"height":12}},{"id":"bf143987-a719-4dd1-a1e6-c19780f28063","block_type":"box","text":"pays directly or indirectly for a standby commitment, its cost will be reflected as an unrealized loss for","page_number":182,"box":{"x":117,"y":648,"width":756,"height":12}},{"id":"f3f7aa11-1112-4a88-9f5f-d02b040b3318","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":182,"box":{"x":116,"y":664,"width":767,"height":12}},{"id":"46803031-2aeb-46e8-99c2-2819bba02a61","block_type":"box","text":"loss when the commitment is exercised or expires.","page_number":182,"box":{"x":117,"y":679,"width":373,"height":12}},{"id":"aaacd08e-b71a-49b0-9bc5-a7234603a1bc","block_type":"box","text":"Stripped Securities.","page_number":182,"box":{"x":117,"y":707,"width":156,"height":12}},{"id":"20de032d-2758-4ea2-a0e3-900411a4abab","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and","page_number":182,"box":{"x":279,"y":707,"width":549,"height":12}},{"id":"38d1e3a0-7100-4318-ac01-0d9c75559bc2","block_type":"box","text":"principal components of an instrument and sells them as separate securities. In general, one security is","page_number":182,"box":{"x":117,"y":723,"width":765,"height":12}},{"id":"ae56a01e-d60c-4c98-b184-26a5651facb5","block_type":"box","text":"entitled to receive the interest payments on the underlying assets (the interest only or “IO” security)","page_number":182,"box":{"x":116,"y":738,"width":734,"height":12}},{"id":"b6ef598e-9584-41f1-9943-669969049fb4","block_type":"box","text":"and the other to receive the principal payments (the principal only or “PO” security). Some stripped","page_number":182,"box":{"x":116,"y":754,"width":731,"height":12}},{"id":"5a0dda8b-a5e2-49ae-a792-5b1a30074a8b","block_type":"box","text":"securities may receive a combination of interest and principal payments. The yields to maturity on IOs","page_number":182,"box":{"x":116,"y":769,"width":755,"height":12}},{"id":"6eca3f7c-213a-429b-8b33-c99a03d53986","block_type":"box","text":"and POs are sensitive to the expected or anticipated rate of principal payments (including","page_number":182,"box":{"x":116,"y":785,"width":663,"height":12}},{"id":"3e543def-4200-445c-a620-33526249b801","block_type":"box","text":"prepayments) on the related underlying assets, and principal payments may have a material effect on","page_number":182,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"799734fe-6fec-4fba-bc3a-462f50d0a2a3","block_type":"box","text":"yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal,","page_number":182,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"3d72b3bf-59b7-437f-a2d1-abc80dc567c5","block_type":"box","text":"a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets","page_number":182,"box":{"x":116,"y":831,"width":686,"height":12}},{"id":"1887565f-732a-4dd7-96e8-e3058041b766","block_type":"box","text":"experience less than anticipated prepayments of principal, the yield on POs could be adversely","page_number":182,"box":{"x":116,"y":847,"width":711,"height":12}},{"id":"5f323d2d-b95c-4263-a5b0-439180e94305","block_type":"box","text":"affected. Stripped securities may be highly sensitive to changes in interest rates and rates of","page_number":182,"box":{"x":116,"y":862,"width":691,"height":12}},{"id":"f3129e17-4cd9-49e2-9bc2-c80e2f7c3def","block_type":"box","text":"prepayment.","page_number":182,"box":{"x":117,"y":878,"width":97,"height":12}},{"id":"d07680d9-fe80-4247-9c38-7356df4c99c1","block_type":"box","text":"II-96","page_number":182,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"120b73dd-f020-4d8b-b5d3-46d3a395c5e4","block_type":"box","text":"NM1026U-6042785-182/259","page_number":182,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1d2d41ff-4b4c-4793-9f52-f5f47161de17","block_type":"box","text":"Structured Notes.","page_number":183,"box":{"x":117,"y":87,"width":139,"height":10}},{"id":"d58e8452-45ba-4b3f-9afc-638814e0129f","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally","page_number":183,"box":{"x":257,"y":87,"width":621,"height":12}},{"id":"f4b27777-8595-4d31-8112-6a299b377d4d","block_type":"box","text":"privately negotiated debt obligations where the principal and/or interest is determined by reference to","page_number":183,"box":{"x":117,"y":102,"width":753,"height":13}},{"id":"807991ab-5292-43fe-89c1-0b447966547e","block_type":"box","text":"the performance of a specific asset, benchmark asset, market or interest rate (“reference measure”).","page_number":183,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"973e5362-c65f-45da-a8cd-344529f8a4ce","block_type":"box","text":"Issuers of structured notes generally include corporations and banks. The interest rate or the principal","page_number":183,"box":{"x":117,"y":134,"width":760,"height":12}},{"id":"2663c05c-b2f8-4223-837d-07b8e204ebdc","block_type":"box","text":"amount payable upon maturity or redemption may increase or decrease, depending upon changes in","page_number":183,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"32403267-e210-4251-9b50-913e4342ea99","block_type":"box","text":"the value of the reference measure. The terms of a structured note may provide that, in certain","page_number":183,"box":{"x":116,"y":165,"width":708,"height":12}},{"id":"4cae8594-ac53-460a-bc20-59c8fec071cb","block_type":"box","text":"circumstances, no principal is due at maturity and, therefore, may result in a loss of invested capital by","page_number":183,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"e6a57b0f-821a-49b8-a71b-b28bb95be504","block_type":"box","text":"a Fund. The interest and/or principal payments that may be made on a structured product may vary","page_number":183,"box":{"x":116,"y":196,"width":743,"height":12}},{"id":"e6ba72a7-7fad-4943-93ab-86d4feb536dc","block_type":"box","text":"widely, depending on a variety of factors, including the volatility of the reference measure.","page_number":183,"box":{"x":116,"y":211,"width":671,"height":12}},{"id":"45d6d22b-4307-47b6-bd4e-a5a7532e4325","block_type":"box","text":"Structured notes may be positively or negatively indexed, so the appreciation of the reference measure","page_number":183,"box":{"x":116,"y":242,"width":770,"height":12}},{"id":"d84263e3-64ea-494a-92e2-526fb14df9a0","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":183,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"105e182d-71d9-4c19-b70b-98dcb2fa76cc","block_type":"box","text":"rate of return on structured notes may be determined by applying a multiplier to the performance or","page_number":183,"box":{"x":117,"y":273,"width":739,"height":12}},{"id":"cd74ed01-03be-46fc-bb41-0efafe659e2f","block_type":"box","text":"differential performance of reference measures. Application of a multiplier involves leverage that will","page_number":183,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"895c77dc-ec5c-4fe6-8183-f0641cf1a149","block_type":"box","text":"serve to magnify the potential for gain and the risk of loss.","page_number":183,"box":{"x":116,"y":304,"width":435,"height":12}},{"id":"ad1a7a76-7272-403e-baf4-830acdfc4979","block_type":"box","text":"The purchase of structured notes exposes a Fund to the credit risk of the issuer of the structured","page_number":183,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"6d292b95-8f43-48ef-81b9-b9c228ba437b","block_type":"box","text":"product. Structured notes may also be more volatile, less liquid, and more difficult to price accurately","page_number":183,"box":{"x":117,"y":351,"width":750,"height":12}},{"id":"ae90adb7-b118-423b-9694-a54b4aad7d33","block_type":"box","text":"than less complex securities and instruments or more traditional debt securities. The secondary market","page_number":183,"box":{"x":116,"y":366,"width":770,"height":12}},{"id":"64b44303-697b-4dcf-bb3f-5df01f2fe97c","block_type":"box","text":"for structured notes could be illiquid making them difficult to sell when the Fund determines to sell","page_number":183,"box":{"x":116,"y":382,"width":729,"height":12}},{"id":"1c58f41b-2403-4be4-bbf5-ada29d217ad9","block_type":"box","text":"them. The possible lack of a liquid secondary market for structured notes and the resulting inability of","page_number":183,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"fde44fc9-50fe-4e99-b8fc-2c56e6f346a5","block_type":"box","text":"the Fund to sell a structured note could expose the Fund to losses and could make structured notes","page_number":183,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"b6aaad40-ce74-4efd-89af-994e400cba8d","block_type":"box","text":"more difficult for the Fund to value accurately.","page_number":183,"box":{"x":117,"y":428,"width":344,"height":12}},{"id":"7975bbb1-b679-4bc7-9814-3847660b1bea","block_type":"box","text":"Taxability Risk.","page_number":183,"box":{"x":118,"y":459,"width":119,"height":12}},{"id":"f069650c-27c0-4fba-9b6f-927b6ec73528","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to","page_number":183,"box":{"x":238,"y":459,"width":555,"height":12}},{"id":"a32d8b02-f5c7-4336-830b-7cf054317a6f","block_type":"box","text":"shareholders by investing in tax-exempt or municipal securities in reliance at the time of purchase on","page_number":183,"box":{"x":116,"y":475,"width":753,"height":12}},{"id":"f3d7e9d9-b79f-4eea-b245-33de2ab69dc9","block_type":"box","text":"an opinion of bond counsel to the issuer and, in the case of derivative securities, sponsors’ counsel,","page_number":183,"box":{"x":116,"y":490,"width":745,"height":12}},{"id":"42721a7c-a506-4182-9432-4d519db4a20a","block_type":"box","text":"that the interest paid on those securities will be excludable from gross income for U.S. federal income","page_number":183,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"2bd7a641-be36-4849-b769-1eb76b7bb71b","block_type":"box","text":"tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income","page_number":183,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"719994fc-5a7f-49e2-9d43-faba610c31ee","block_type":"box","text":"subsequent to the Fund’s acquisition of the securities. In that event, the IRS may demand that the","page_number":183,"box":{"x":116,"y":537,"width":731,"height":12}},{"id":"d291e07c-8e7a-4619-9b83-ea3634b21e57","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":183,"box":{"x":117,"y":552,"width":758,"height":12}},{"id":"5c7f70ef-5738-4699-a401-78e634f60064","block_type":"box","text":"the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or","page_number":183,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"81041b21-c0a6-4de6-b8dd-5e05c88523ab","block_type":"box","text":"to be paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the","page_number":183,"box":{"x":116,"y":583,"width":724,"height":12}},{"id":"ffe81635-1267-4032-83f2-c78008f53aaa","block_type":"box","text":"Fund’s shareholders to increased U.S. federal income tax liabilities. If the interest paid on any","page_number":183,"box":{"x":117,"y":599,"width":699,"height":12}},{"id":"9955d9f5-4fcf-43d8-8913-4aa4408a41a3","block_type":"box","text":"tax-exempt or municipal security held by the Fund is subsequently determined to be taxable, the Fund","page_number":183,"box":{"x":116,"y":614,"width":762,"height":12}},{"id":"85a92610-814a-48a3-8915-17f8d7e7a874","block_type":"box","text":"intends to dispose of that security as soon as reasonably practicable. In addition, future laws,","page_number":183,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"d6d5189e-7792-44b3-8ffe-27d72d405b83","block_type":"box","text":"regulations, rulings or court decisions may cause interest on municipal securities to be subject, directly","page_number":183,"box":{"x":117,"y":645,"width":765,"height":12}},{"id":"739da253-bc3f-4fe0-aacb-beaf5a8926b3","block_type":"box","text":"or indirectly, to U.S. federal income taxation or interest on state municipal securities to be subject to","page_number":183,"box":{"x":116,"y":661,"width":739,"height":12}},{"id":"536b498d-6cd6-4db6-96fd-ff57fb32cd95","block_type":"box","text":"state or local income taxation, or the value of state municipal securities to be subject to state or local","page_number":183,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"8c9c180f-b220-45fb-bb42-6108c50b73e0","block_type":"box","text":"intangible personal property tax, or may otherwise prevent the Fund from realizing the full current","page_number":183,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"b3d9a217-c1c0-40a6-a158-730cdee6ad13","block_type":"box","text":"benefit of the tax-exempt status of such securities. Any such change could also affect the market price","page_number":183,"box":{"x":117,"y":707,"width":758,"height":12}},{"id":"d42eea88-25ad-4650-9052-f84086a06304","block_type":"box","text":"of such securities, and thus the value of an investment in the Fund.","page_number":183,"box":{"x":116,"y":723,"width":497,"height":11}},{"id":"4a3354be-f56d-4a01-9760-109f1f7b00af","block_type":"box","text":"Temporary Defensive Measures.","page_number":183,"box":{"x":118,"y":754,"width":255,"height":12}},{"id":"db11675f-46b1-4709-91b2-9d2d1a91ffd9","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse","page_number":183,"box":{"x":379,"y":754,"width":503,"height":12}},{"id":"342f7f17-c670-4ddb-b0b3-394e29b3a966","block_type":"box","text":"market, economic, political or other conditions, a Fund may depart from its principal investment","page_number":183,"box":{"x":117,"y":769,"width":704,"height":12}},{"id":"fdeaca70-3f70-4bdb-bbce-7c8e4188eef0","block_type":"box","text":"strategies and may invest without limitation in cash, high quality money market instruments, or other","page_number":183,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"618bfdfe-678a-4dfd-9c13-3e663fdb5a1d","block_type":"box","text":"short term investments. Certain Funds may also invest in cash and other such instruments pending","page_number":183,"box":{"x":116,"y":800,"width":735,"height":12}},{"id":"86cb37ce-026e-4110-873f-ac5c8ea94884","block_type":"box","text":"investment or to meet anticipated redemption requests. High quality money market instruments include","page_number":183,"box":{"x":117,"y":816,"width":763,"height":12}},{"id":"b978887b-a563-42ea-9193-383cdd765d07","block_type":"box","text":"U.S. Government obligations, U.S. Government agency obligations, dollar denominated obligations of","page_number":183,"box":{"x":117,"y":831,"width":758,"height":12}},{"id":"f7a418d6-01d0-4ab0-bd61-bce97e474695","block_type":"box","text":"foreign issuers, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate","page_number":183,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"1168cd56-eb61-4317-b1d6-f643e66341ec","block_type":"box","text":"obligations, commercial paper, repurchase agreements and obligations of supranational organizations.","page_number":183,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"095cd6af-2fe6-474e-8fa9-79f4b0d091bf","block_type":"box","text":"Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":183,"box":{"x":117,"y":878,"width":735,"height":12}},{"id":"29e6236b-1cf1-499a-bfb3-da26a2ff6412","block_type":"box","text":"II-97","page_number":183,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cc496129-11ff-4e1c-9124-8c5b91d12a67","block_type":"box","text":"NM1026U-6042785-183/259","page_number":183,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d9eab3c9-af49-43f0-8384-2cfbbc91e16b","block_type":"box","text":"within two years from the date of settlement. Temporary defensive measures may affect a Fund’s","page_number":184,"box":{"x":116,"y":87,"width":727,"height":12}},{"id":"d819690b-6fbc-4ecf-b512-f0d8cf865a69","block_type":"box","text":"ability to achieve its investment objective.","page_number":184,"box":{"x":116,"y":103,"width":312,"height":12}},{"id":"4eb95629-c993-4e1b-800e-a403716d3b1c","block_type":"box","text":"U.S. Government Obligations.","page_number":184,"box":{"x":117,"y":134,"width":236,"height":12}},{"id":"1b628f31-beb0-4d82-863b-4325e34a6760","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S.","page_number":184,"box":{"x":354,"y":134,"width":510,"height":12}},{"id":"4c3212e2-9844-4c66-b74e-89aae28b02d2","block_type":"box","text":"Government and U.S. Government agencies and instrumentalities. Obligations of certain agencies and","page_number":184,"box":{"x":117,"y":149,"width":767,"height":12}},{"id":"12a622df-0d6f-4884-a28a-98065ec0c585","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":184,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"70706dc6-aedf-446d-86af-103a17ff851b","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":184,"box":{"x":116,"y":180,"width":745,"height":12}},{"id":"79baf946-4ab9-4b43-ace6-5af251acc3f8","block_type":"box","text":"supported only by the credit of the agency or instrumentality issuing the obligation. No assurance can","page_number":184,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"75d5bb25-42a3-4303-a3ac-697fe14b0087","block_type":"box","text":"be given that the U.S. Government will provide financial support to U.S. Government-sponsored","page_number":184,"box":{"x":117,"y":211,"width":715,"height":12}},{"id":"86f6a0fb-030e-4deb-b267-bbf338d76b4f","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":184,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"30ae0dd6-8431-411d-a910-5109cd99dcef","block_type":"box","text":"be held by trusts that issue participation certificates (such as Treasury income growth receipts and","page_number":184,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"9404b141-c804-4114-bbfc-f162a53c4f6a","block_type":"box","text":"certificates of accrual on Treasury certificates). These certificates, as well as Treasury receipts and","page_number":184,"box":{"x":116,"y":258,"width":740,"height":12}},{"id":"89d68fbd-1cad-41c3-b014-4fb192d13a80","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or","page_number":184,"box":{"x":116,"y":273,"width":759,"height":12}},{"id":"ef622a96-92f5-4058-8f4d-39c45280f393","block_type":"box","text":"the future principal payments on U.S. Government obligations. These instruments are issued at a","page_number":184,"box":{"x":116,"y":289,"width":727,"height":12}},{"id":"de2d1126-8da7-49ac-942a-cd06f5701061","block_type":"box","text":"discount to their “face value” and may (particularly in the case of stripped mortgage-backed securities)","page_number":184,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"1c16fd17-84da-4992-ac30-37123f834908","block_type":"box","text":"exhibit greater price volatility than ordinary debt securities because of the manner in which their","page_number":184,"box":{"x":116,"y":320,"width":713,"height":12}},{"id":"0b1e4875-f49f-4d89-8340-127f4d901e0e","block_type":"box","text":"principal and interest are returned to investors.","page_number":184,"box":{"x":117,"y":335,"width":351,"height":12}},{"id":"58c93949-8a58-4c00-a667-3265393791b0","block_type":"box","text":"Examples of the types of U.S. Government obligations that may be held by the Funds include U.S.","page_number":184,"box":{"x":117,"y":366,"width":734,"height":12}},{"id":"1d93bac3-10e6-48a7-b31b-1087ce5f3d2c","block_type":"box","text":"Treasury Bills, Treasury Notes and Treasury Bonds and the obligations of the Federal Housing","page_number":184,"box":{"x":116,"y":382,"width":708,"height":12}},{"id":"8525f462-efc5-4488-8b87-bc523f5c8864","block_type":"box","text":"Administration, Farmers Home Administration, Export-Import Bank of the United States, Small","page_number":184,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"c889ffb8-52ff-4bdb-8c83-6cedf8a78f9f","block_type":"box","text":"Business Administration, Ginnie Mae, Fannie Mae, Federal Financing Bank, General Services","page_number":184,"box":{"x":117,"y":413,"width":702,"height":12}},{"id":"8226d60c-67fd-4e4a-945a-65bfa21c13b1","block_type":"box","text":"Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Federal Home","page_number":184,"box":{"x":116,"y":428,"width":741,"height":12}},{"id":"69b5d4d3-5b2e-422f-a5d7-73f957efc95a","block_type":"box","text":"Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Farm Credit Banks","page_number":184,"box":{"x":117,"y":444,"width":771,"height":11}},{"id":"04308604-e47d-41ea-a1d9-7c336656b0ce","block_type":"box","text":"System, Maritime Administration, Tennessee Valley Authority and Washington D.C. Armory Board. The","page_number":184,"box":{"x":116,"y":459,"width":772,"height":12}},{"id":"6c77012f-643a-4b93-9949-e220e7580018","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government","page_number":184,"box":{"x":117,"y":475,"width":717,"height":12}},{"id":"21168e0d-05d6-4448-907e-8b4288405b5d","block_type":"box","text":"agencies and instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae","page_number":184,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"421d919d-ca0a-4411-ab04-0b54c6074d98","block_type":"box","text":"and Freddie Mac.","page_number":184,"box":{"x":116,"y":506,"width":135,"height":9}},{"id":"263c614f-484d-4c5c-a00e-329c29c15bb7","block_type":"box","text":"U.S. Treasury Obligations.","page_number":184,"box":{"x":117,"y":537,"width":194,"height":12}},{"id":"4845024d-4133-427e-9174-fa585d96cb1b","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of","page_number":184,"box":{"x":313,"y":537,"width":548,"height":12}},{"id":"47b88274-9719-4132-b8b0-a74a2b768ecf","block_type":"box","text":"issuance and other characteristics. Obligations of U.S. Government agencies and authorities are","page_number":184,"box":{"x":117,"y":552,"width":721,"height":12}},{"id":"befa4bb7-dfb1-4399-8b9e-d3bf11c8d4bd","block_type":"box","text":"supported by varying degrees of credit but generally are not backed by the full faith and credit of the","page_number":184,"box":{"x":116,"y":568,"width":747,"height":12}},{"id":"cd63a8c9-1ae0-4043-85b0-c0c1b08f5805","block_type":"box","text":"U.S. Government. No assurance can be given that the U.S. Government will provide financial support","page_number":184,"box":{"x":117,"y":583,"width":758,"height":12}},{"id":"e6dc19fe-698b-4708-a3a8-24703c1d1aa3","block_type":"box","text":"to its agencies and authorities if it is not obligated by law to do so.","page_number":184,"box":{"x":116,"y":599,"width":493,"height":12}},{"id":"10e98688-9640-40b0-9f41-b855d59fce1a","block_type":"box","text":"U.S. Treasury Rolls.","page_number":184,"box":{"x":117,"y":630,"width":153,"height":12}},{"id":"3b79f05a-9133-405d-8d35-a1bf4abab8d5","block_type":"box","text":"Certain Funds may invest in U.S. Treasury","page_number":184,"box":{"x":271,"y":630,"width":320,"height":12}},{"id":"7a606e9d-3690-4409-af9a-6a26a0f639d3","block_type":"box","text":"rolls. In a U.S. Treasury roll transaction,","page_number":184,"box":{"x":592,"y":630,"width":292,"height":12}},{"id":"f1594686-141a-48ca-a5c5-ded96b01fc26","block_type":"box","text":"the Fund sells a treasury security to a counterpa","page_number":184,"box":{"x":116,"y":645,"width":350,"height":12}},{"id":"2bd4acd7-b267-4378-90c7-3998f1a5d39e","block_type":"box","text":"rty with a simultaneous agreement to repurchase the","page_number":184,"box":{"x":468,"y":645,"width":387,"height":12}},{"id":"f3349615-fd54-4c51-9002-7b7f2d582ebe","block_type":"box","text":"same security at an agreed upon price and future settl","page_number":184,"box":{"x":116,"y":661,"width":392,"height":12}},{"id":"0cb717c1-fea9-44e0-b358-af7204ab33d2","block_type":"box","text":"ement date. U.S. Treasury roll transactions may","page_number":184,"box":{"x":510,"y":661,"width":348,"height":12}},{"id":"9cea53ff-9e0f-45b4-ab12-709f7a3ac8ba","block_type":"box","text":"incrementally adjust the average maturity of a Fund’","page_number":184,"box":{"x":117,"y":676,"width":376,"height":12}},{"id":"4ddf31cd-1dea-48ab-b7e4-fd608f383165","block_type":"box","text":"s portfolio and increase the interest yield on the","page_number":184,"box":{"x":494,"y":676,"width":343,"height":12}},{"id":"73a531bc-4c0f-41a5-93a3-6f5081bae9d2","block_type":"box","text":"Fund’s portfolio by extending the average maturity of the portfolio in a normal yield curve environment.","page_number":184,"box":{"x":117,"y":692,"width":740,"height":12}},{"id":"31b04aea-ba24-4276-92de-75c7a98bb218","block_type":"box","text":"During the period before the settlement","page_number":184,"box":{"x":117,"y":707,"width":284,"height":12}},{"id":"da0f1e49-2668-49fd-a06d-57d6321fc650","block_type":"box","text":"date of a U.S. Treasury roll, a","page_number":184,"box":{"x":406,"y":707,"width":214,"height":12}},{"id":"ebfc0641-8536-4b89-b049-d30269c0ad6a","block_type":"box","text":"Fund continues to earn interest on","page_number":184,"box":{"x":626,"y":707,"width":248,"height":10}},{"id":"8b21ece6-38a9-4019-9029-778ba511fa7b","block_type":"box","text":"the securities it is selling; however, it does not earn in","page_number":184,"box":{"x":116,"y":723,"width":387,"height":12}},{"id":"98a8e048-f1f1-4f88-832d-d5d9fe07b708","block_type":"box","text":"terest on the securities it is purchasing until after the","page_number":184,"box":{"x":504,"y":723,"width":378,"height":12}},{"id":"25d0fda3-5993-497f-adeb-2d61a4300dad","block_type":"box","text":"settlement date. A Fund could suffer an opportunity loss","page_number":184,"box":{"x":116,"y":738,"width":406,"height":12}},{"id":"c285e809-e069-4ff7-8560-b09c21edd396","block_type":"box","text":"if the counterparty to the U.S. Treasury roll","page_number":184,"box":{"x":528,"y":738,"width":308,"height":12}},{"id":"90c10107-d1f6-4e04-8b0f-b4f56b6312b0","block_type":"box","text":"transaction failed to perform its obligations on the settlement date.","page_number":184,"box":{"x":116,"y":754,"width":478,"height":12}},{"id":"5ace35e8-47cf-47bc-af18-b33016a9d072","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed","page_number":184,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"9a2a604d-5dec-4b34-9f84-a4ffafc64a46","block_type":"box","text":"upon purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be","page_number":184,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"bc6acc45-ebb4-41ee-bd7b-39c3e4e1569c","block_type":"box","text":"deemed to involve leverage. There is no assurance that U.S. Treasury rolls can be successfully","page_number":184,"box":{"x":116,"y":816,"width":709,"height":12}},{"id":"5de849fb-d11a-4a79-97c6-7085609ad780","block_type":"box","text":"employed.","page_number":184,"box":{"x":116,"y":831,"width":82,"height":12}},{"id":"f166f29c-c728-4699-bee1-ca004b273e40","block_type":"box","text":"Utility Industries.","page_number":184,"box":{"x":117,"y":862,"width":140,"height":12}},{"id":"af8553c1-4f6f-4370-9b66-34b213cd027d","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an","page_number":184,"box":{"x":259,"y":862,"width":572,"height":12}},{"id":"5e8b15e5-0d7d-4b57-805b-eb0f7a88907f","block_type":"box","text":"adequate return on invested capital, difficulty in financing large construction programs during an","page_number":184,"box":{"x":116,"y":878,"width":715,"height":12}},{"id":"a262fa56-af0f-438b-84f9-c1cad25bebff","block_type":"box","text":"II-98","page_number":184,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ade00174-1c03-4361-a413-a40a44f65eaf","block_type":"box","text":"NM1026U-6042785-184/259","page_number":184,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"60ba1f7e-36a0-40c0-a425-7c327325cdca","block_type":"box","text":"inflationary period, restrictions on operations and increased cost and delays attributable to","page_number":185,"box":{"x":117,"y":87,"width":672,"height":12}},{"id":"fc329c41-9dab-4f77-a01c-da6c2ff4e9cd","block_type":"box","text":"environmental considerations and regulation, difficulty in raising capital in adequate amounts on","page_number":185,"box":{"x":116,"y":102,"width":715,"height":13}},{"id":"70875b7a-6b1b-4937-a0aa-b13009a64ec3","block_type":"box","text":"reasonable terms in periods of high inflation and unsettled capital markets, technological innovations","page_number":185,"box":{"x":117,"y":118,"width":750,"height":12}},{"id":"002b2d35-dfdc-4ab3-8a82-2b1bedfab884","block_type":"box","text":"that may render existing plants, equipment or products obsolete, the potential impact of natural or","page_number":185,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"666c326e-55df-4394-b978-09b0b9d1d392","block_type":"box","text":"man-made disasters, increased costs and reduced availability of certain types of fuel, occasional","page_number":185,"box":{"x":117,"y":149,"width":721,"height":12}},{"id":"f4203761-f3ae-4871-a1e7-54938532d216","block_type":"box","text":"reduced availability and high costs of natural gas for resale, the effects of energy conservation, the","page_number":185,"box":{"x":117,"y":165,"width":736,"height":12}},{"id":"bb7d9c02-0450-4af1-a825-bf0bbafce883","block_type":"box","text":"effects of a national energy policy and lengthy delays and greatly increased costs and other problems","page_number":185,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"c26ed16f-b315-4db3-8d71-a499974034e8","block_type":"box","text":"associated with the design, construction, licensing, regulation and operation of nuclear facilities for","page_number":185,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"5af22556-d062-4dc3-aeda-12dac0759d56","block_type":"box","text":"electric generation, including, among other considerations, the problems associated with the use of","page_number":185,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"01ba230a-c693-4a21-b5c1-59e54a757d87","block_type":"box","text":"radioactive materials and the disposal of radioactive wastes. There are substantial differences among","page_number":185,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"0ab8378e-81e5-4994-96d8-da5f8ad93af5","block_type":"box","text":"the regulatory practices and policies of various jurisdictions, and any given regulatory agency may","page_number":185,"box":{"x":116,"y":242,"width":732,"height":12}},{"id":"61ef9324-81e6-4202-a282-64d51b9e51ec","block_type":"box","text":"make major shifts in policy from time to time. There is no assurance that regulatory authorities will, in","page_number":185,"box":{"x":117,"y":258,"width":752,"height":12}},{"id":"4ace96ac-3513-4e36-9ef1-41457a54068a","block_type":"box","text":"the future, grant rate increases or that such increases will be adequate to permit the payment of","page_number":185,"box":{"x":116,"y":273,"width":716,"height":12}},{"id":"62237af0-8383-4156-837f-564173bf8b72","block_type":"box","text":"dividends on common stocks issued by a utility company. Additionally, existing and possible future","page_number":185,"box":{"x":116,"y":289,"width":735,"height":12}},{"id":"3068dc69-3cd1-4494-9ae6-3da066c1d4db","block_type":"box","text":"regulatory legislation may make it even more difficult for utilities to obtain adequate relief. Certain of the","page_number":185,"box":{"x":117,"y":304,"width":771,"height":12}},{"id":"b5a6870f-71fd-4b1f-be23-318762644875","block_type":"box","text":"issuers of securities held in the Fund’s portfolio may own or operate nuclear generating facilities.","page_number":185,"box":{"x":117,"y":320,"width":720,"height":12}},{"id":"ac393084-5a25-4901-bc7b-3228b8f93344","block_type":"box","text":"Governmental authorities may from time to time review existing policies and impose additional","page_number":185,"box":{"x":117,"y":335,"width":702,"height":12}},{"id":"8c96b449-bf6e-4207-ba2b-fede2ab29273","block_type":"box","text":"requirements governing the licensing, construction and operation of nuclear power plants. Prolonged","page_number":185,"box":{"x":117,"y":351,"width":751,"height":12}},{"id":"07bfdd6d-4644-4608-90d2-9de6618fa040","block_type":"box","text":"changes in climatic conditions can also have a significant impact on both the revenues of an electric","page_number":185,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"c07e16a7-c58d-458f-88dc-3cc308a90fa5","block_type":"box","text":"and gas utility as well as the expenses of a utility, particularly a hydro-based electric utility.","page_number":185,"box":{"x":116,"y":382,"width":675,"height":12}},{"id":"7bd02648-2a5a-4f9b-bd7f-9d5060d7d321","block_type":"box","text":"Companies in the utilities sector may be adversely affected by changes in exchange rates, domestic","page_number":185,"box":{"x":117,"y":413,"width":747,"height":12}},{"id":"ba750f45-8203-4c93-b61c-67510bb250d1","block_type":"box","text":"and international competition, and governmental limitations on rates charged to customers. The value","page_number":185,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"b57ab0ef-619f-44a2-9296-25f02e92e81a","block_type":"box","text":"of regulated utility debt securities and, to a lesser extent, equity securities, tends to have an inverse","page_number":185,"box":{"x":116,"y":444,"width":743,"height":12}},{"id":"def1ad64-f6f9-4ab9-9a17-121a8c939bcd","block_type":"box","text":"relationship to the movement of interest rates and therefore may lead to volatility in performance.","page_number":185,"box":{"x":117,"y":459,"width":723,"height":12}},{"id":"0e185b74-4b2d-4511-b97f-bf92d3a06a6c","block_type":"box","text":"Utility companies in the United States and in foreign countries are generally subject to regulation. In the","page_number":185,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"2d08f110-e57d-40aa-b151-5c82ec308d89","block_type":"box","text":"United States, most utility companies are regulated by state and/or federal authorities. Such regulation","page_number":185,"box":{"x":117,"y":506,"width":764,"height":12}},{"id":"548cc8ff-6817-410c-a990-6b7dfd378157","block_type":"box","text":"is intended to ensure appropriate standards of service and adequate capacity to meet public demand.","page_number":185,"box":{"x":117,"y":521,"width":759,"height":12}},{"id":"aeee3677-8e02-4e2e-b849-65abb357b7d4","block_type":"box","text":"Generally, prices are also regulated in the United States and in foreign countries with the intention of","page_number":185,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"9249ac04-deef-4ca1-941f-26e9a039cc82","block_type":"box","text":"protecting the public while ensuring that the rate of return earned by utility companies is sufficient to","page_number":185,"box":{"x":117,"y":552,"width":744,"height":12}},{"id":"7c3f9de7-b685-4a34-af85-69c2df8cc444","block_type":"box","text":"allow them to attract capital in order to grow and continue to provide appropriate services. There can","page_number":185,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"fa4dea32-d978-4240-94f1-21fb2e853674","block_type":"box","text":"be no assurance that such pricing policies or rates of return will continue in the future.","page_number":185,"box":{"x":117,"y":583,"width":640,"height":12}},{"id":"22bed27b-31ba-418a-bc3a-795eed958f42","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in","page_number":185,"box":{"x":116,"y":614,"width":738,"height":12}},{"id":"a8dc7f46-ed5d-44b9-bf65-b0f3974cfa96","block_type":"box","text":"foreign countries. In recent years, changes in regulation in the United States increasingly have allowed","page_number":185,"box":{"x":116,"y":630,"width":767,"height":12}},{"id":"f66eeeb7-3769-456d-9ed2-15d936d5008f","block_type":"box","text":"utility companies to provide services and products outside their traditional geographic areas and lines","page_number":185,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"95347364-e6fc-4fcd-ba5a-b81cbc821e97","block_type":"box","text":"of business, creating new areas of competition within the industries. In some instances, utility","page_number":185,"box":{"x":116,"y":661,"width":691,"height":12}},{"id":"35ccb685-1e82-4f6b-8d3d-62d17c5480a5","block_type":"box","text":"companies are operating on an unregulated basis. Because of trends toward deregulation and the","page_number":185,"box":{"x":116,"y":676,"width":727,"height":12}},{"id":"1318cb7f-e8ea-45a1-ba1c-6c0be931e3c7","block_type":"box","text":"evolution of independent power producers as well as new entrants to the field of telecommunications,","page_number":185,"box":{"x":116,"y":692,"width":750,"height":12}},{"id":"de936ee4-2735-4c83-9b13-615f66840475","block_type":"box","text":"non-regulated providers of utility services have become a significant part of their respective industries.","page_number":185,"box":{"x":117,"y":707,"width":755,"height":12}},{"id":"1c4eb89f-d21c-46b0-b2b2-7e9ff147ca3f","block_type":"box","text":"The Manager believes that the emergence of competition and deregulation will result in certain utility","page_number":185,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"1dcc40c1-fc2a-4580-9741-9c48e2c01132","block_type":"box","text":"companies being able to earn more than their traditional regulated rates of return, while others may be","page_number":185,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"b487d935-b69e-47d1-bb06-6242c1fcdcf2","block_type":"box","text":"forced to defend their core business from increased competition and may be less profitable. Reduced","page_number":185,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"62d364f7-6c7f-4751-8deb-703b919cbe36","block_type":"box","text":"profitability, as well as new uses of funds (such as for expansion, operations or stock buybacks) could","page_number":185,"box":{"x":117,"y":769,"width":754,"height":12}},{"id":"50dd6de9-1f84-4b5b-834f-baa413572b99","block_type":"box","text":"result in cuts in dividend payout rates. As deregulation allows utility companies to diversify outside of","page_number":185,"box":{"x":117,"y":785,"width":746,"height":12}},{"id":"24065a66-3787-4161-930e-270304d36924","block_type":"box","text":"their original geographic regions and their traditional lines of business, utilities companies may engage","page_number":185,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"544f770f-afde-48e2-a62b-d24746a8ac1b","block_type":"box","text":"in riskier ventures. Therefore, deregulation may eliminate restrictions on the maximum level of profits of","page_number":185,"box":{"x":117,"y":816,"width":767,"height":12}},{"id":"fc3a8364-a614-4c17-b1fe-c52dfbc4dd38","block_type":"box","text":"certain utility companies, but may also subject these companies to greater risk of loss. The Manager","page_number":185,"box":{"x":116,"y":831,"width":749,"height":12}},{"id":"d43842c0-a6a4-48c9-9503-93af8d70f96e","block_type":"box","text":"seeks to take advantage of favorable investment opportunities that may arise from these structural","page_number":185,"box":{"x":116,"y":847,"width":735,"height":12}},{"id":"e96486fe-ae67-4eed-99a6-5291b3b52fd6","block_type":"box","text":"changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":185,"box":{"x":116,"y":862,"width":747,"height":12}},{"id":"f98d8b37-b1ba-4171-af3b-ab61a3bd4b50","block_type":"box","text":"II-99","page_number":185,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"94db42b1-5634-464d-ae46-68fe5faf38e1","block_type":"box","text":"NM1026U-6042785-185/259","page_number":185,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"940e78b4-3b29-45e5-a285-6c5640be70f8","block_type":"box","text":"Foreign utility companies are also subject to regulation, although such regulations may or may not be","page_number":186,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"4d960a56-8778-40e2-9b66-454177a69543","block_type":"box","text":"comparable to those in the United States. Foreign utility companies may be more heavily regulated by","page_number":186,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"6ea01a58-c786-4a41-9edd-a7129b2ebfda","block_type":"box","text":"their respective governments than utilities in the United States and, as in the United States, generally","page_number":186,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"511acec3-3c05-4ccc-8930-02c508d3fd6a","block_type":"box","text":"are required to seek government approval for rate increases. In addition, many foreign utilities use","page_number":186,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"03abe1eb-e32e-4405-b074-faaf9508b4c4","block_type":"box","text":"fuels that may cause more pollution than those used in the United States, which may require such","page_number":186,"box":{"x":116,"y":149,"width":731,"height":12}},{"id":"bacafc00-d753-4d4d-bee6-e8fa123ed9b6","block_type":"box","text":"utilities to invest in pollution control equipment to meet any proposed pollution restrictions. Foreign","page_number":186,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"66440a15-56e4-4a6d-9aa2-1d770c67c1e5","block_type":"box","text":"regulatory systems vary from country to country and may evolve in ways different from regulation in the","page_number":186,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"647aa9e1-8389-4fed-adcf-74317418b581","block_type":"box","text":"United States.","page_number":186,"box":{"x":117,"y":196,"width":109,"height":9}},{"id":"706161dd-b4bf-42e9-abd4-071ddec47c77","block_type":"box","text":"A Fund’s investment policies are designed to enable it to capitalize on evolving investment opportunities","page_number":186,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"f8bdaf7c-0956-4a37-aa50-b8075f9e5b7e","block_type":"box","text":"throughout the world. For example, the rapid growth of certain foreign economies will necessitate","page_number":186,"box":{"x":116,"y":242,"width":717,"height":12}},{"id":"7a18cf49-8ddc-4caf-bdd0-c3ff013256ad","block_type":"box","text":"expansion of capacity in the utility industries in those countries. Although many foreign utility companies","page_number":186,"box":{"x":116,"y":258,"width":767,"height":12}},{"id":"ef4c2317-4b68-4c35-8f89-d96c47b8cb63","block_type":"box","text":"currently are government-owned, thereby limiting current investment opportunities for a Fund, the","page_number":186,"box":{"x":116,"y":273,"width":720,"height":12}},{"id":"de8cdaa4-3cc6-4715-94cd-f6a8720b8245","block_type":"box","text":"Manager believes that, in order to attract significant capital for growth, foreign governments are likely to","page_number":186,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"efd7f29b-923c-4453-a85f-752ad06dca02","block_type":"box","text":"seek global investors through the privatization of their utility industries. Privatization, which refers to the","page_number":186,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"d2e283d1-19a4-4c7c-a64d-6d0f2ff9fc8d","block_type":"box","text":"trend toward investor ownership of assets rather than government ownership, is expected to occur in","page_number":186,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"73c1413b-ac7c-472c-8ce1-03bb5beb06a3","block_type":"box","text":"newer, faster-growing economies and in mature economies. Of course, there is no assurance that such","page_number":186,"box":{"x":117,"y":335,"width":763,"height":12}},{"id":"c4a48604-42a7-4d91-9359-9c342223118e","block_type":"box","text":"favorable developments will occur or that investment opportunities in foreign markets will increase.","page_number":186,"box":{"x":116,"y":351,"width":728,"height":12}},{"id":"11797c0b-2221-4944-8a8c-8bcf352e6f08","block_type":"box","text":"The revenues of domestic and foreign utility companies generally reflect the economic growth and","page_number":186,"box":{"x":116,"y":382,"width":732,"height":12}},{"id":"68daf5e9-6a8b-4c2e-a071-0c2f9e391430","block_type":"box","text":"development in the geographic areas in which they do business. The Manager will take into account","page_number":186,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"74553f5b-6042-46da-bb7f-c236e447434d","block_type":"box","text":"anticipated economic growth rates and other economic developments when selecting securities of","page_number":186,"box":{"x":116,"y":413,"width":732,"height":12}},{"id":"9c9ef23b-51a4-4d2d-bd5c-0e7011211008","block_type":"box","text":"utility companies.","page_number":186,"box":{"x":117,"y":428,"width":132,"height":12}},{"id":"45b9c1d7-3185-4c56-8ddd-60b590be0fd3","block_type":"box","text":"Electric.","page_number":186,"box":{"x":116,"y":459,"width":58,"height":10}},{"id":"11bde0ed-c78b-4c48-bdf5-5b99b4bde25c","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the","page_number":186,"box":{"x":176,"y":459,"width":630,"height":12}},{"id":"1f1778f4-0f6f-46fe-9c3c-c78cb759fd95","block_type":"box","text":"generation, transmission and sale of electric energy, although many also provide other energy-related","page_number":186,"box":{"x":116,"y":475,"width":760,"height":12}},{"id":"83a84f4d-48a5-4f47-9dc8-7c18330376ff","block_type":"box","text":"services. In the past, electric utility companies, in general, have been favorably affected by lower fuel","page_number":186,"box":{"x":116,"y":490,"width":754,"height":12}},{"id":"2743bdb8-b07e-48b2-8045-b115c5082fe6","block_type":"box","text":"and financing costs and the full or near completion of major construction programs. In addition, many","page_number":186,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"70912822-b72e-4316-a175-24d96afaa063","block_type":"box","text":"of these companies have generated cash flows in excess of current operating expenses and","page_number":186,"box":{"x":116,"y":521,"width":690,"height":12}},{"id":"dca5325e-9e42-46dd-8912-16d4ad0d70ef","block_type":"box","text":"construction expenditures, permitting some degree of diversification into unregulated businesses.","page_number":186,"box":{"x":116,"y":537,"width":727,"height":12}},{"id":"a07231d5-bdda-4668-bce8-cce593c65d38","block_type":"box","text":"Some electric utilities have also taken advantage of the right to sell power outside of their traditional","page_number":186,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"4ae1e1a2-e4f3-4962-9f68-6bcac37f3b30","block_type":"box","text":"geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":186,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"99a921a6-7d51-421a-8c23-66d893f898bb","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital","page_number":186,"box":{"x":117,"y":583,"width":714,"height":12}},{"id":"84a8645d-f37c-4653-bc05-e31c872d2ba3","block_type":"box","text":"construction programs, costs associated with compliance with environmental and safety regulations","page_number":186,"box":{"x":116,"y":599,"width":744,"height":12}},{"id":"f2ef7ec4-8532-4cfe-ae11-bd5903385791","block_type":"box","text":"and changes in the regulatory climate. As interest rates declined, many utilities refinanced high cost","page_number":186,"box":{"x":116,"y":614,"width":744,"height":12}},{"id":"0d7a21dd-4fdf-4091-80ea-089042db7205","block_type":"box","text":"debt and in doing so improved their fixed charges coverage. Regulators, however, lowered allowed","page_number":186,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"3026ef76-1be1-4c56-913c-93f88fd87d5f","block_type":"box","text":"rates of return as interest rates declined and thereby caused the benefits of the rate declines to be","page_number":186,"box":{"x":117,"y":645,"width":734,"height":12}},{"id":"97c554cb-b605-4a22-9ab8-119b403049af","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":186,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"74858cb2-743c-4692-b6f2-fc0d63cdf60f","block_type":"box","text":"may not keep pace with the utilities’ increased costs. The construction and operation of nuclear power","page_number":186,"box":{"x":117,"y":676,"width":756,"height":12}},{"id":"d2c5e40e-5d36-42c4-9838-ca0e81a7b844","block_type":"box","text":"facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear Regulatory","page_number":186,"box":{"x":116,"y":692,"width":682,"height":12}},{"id":"d59363a7-8b49-4031-9657-4faa1aafe9d4","block_type":"box","text":"Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in","page_number":186,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"c84e4652-d234-41d0-a33a-f5960ebec488","block_type":"box","text":"higher operating costs and higher capital expenditures, with the risk that the regulators may disallow","page_number":186,"box":{"x":117,"y":723,"width":743,"height":12}},{"id":"1cffaf40-5eaa-4a57-8ddb-67d5e6ee6d4d","block_type":"box","text":"inclusion of these costs in rate authorizations or the risk that a company may not be permitted to","page_number":186,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"987aba02-4eb7-4a6c-87a5-3e844f77b420","block_type":"box","text":"operate or complete construction of a facility. In addition, operators of nuclear power plants may be","page_number":186,"box":{"x":116,"y":754,"width":735,"height":12}},{"id":"ae4a74ea-3792-440b-bf75-30ca5b273a32","block_type":"box","text":"subject to significant costs for disposal of nuclear fuel and for decommissioning such plants.","page_number":186,"box":{"x":116,"y":769,"width":681,"height":12}},{"id":"4106b968-bc34-41d9-b7ee-5377681d4f5b","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected","page_number":186,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"37265818-8363-46f8-8567-bcaeade30e03","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":186,"box":{"x":116,"y":816,"width":706,"height":12}},{"id":"6d68e3de-2ed8-4e47-a522-dbaf482ff1ee","block_type":"box","text":"companies that focus more on the generation of electricity may be assigned less favorable ratings as","page_number":186,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"b908afab-d8d1-40c5-8dbb-20347b7f923a","block_type":"box","text":"this business is expected to be competitive and the least regulated. On the other hand, companies that","page_number":186,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"20545da4-516c-4751-b228-fb85e5ba5d46","block_type":"box","text":"focus on transmission and distribution, which is expected to be the least competitive and the more","page_number":186,"box":{"x":116,"y":862,"width":732,"height":12}},{"id":"33178800-bab3-4471-a33a-fe453e1fcd95","block_type":"box","text":"regulated part of the business, may see higher ratings given the greater predictability of cash flow.","page_number":186,"box":{"x":117,"y":878,"width":732,"height":12}},{"id":"208b444d-f44e-4532-8df2-efbd0083962c","block_type":"box","text":"II-100","page_number":186,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"e2a06941-c63d-45c5-a203-16966e71705c","block_type":"box","text":"NM1026U-6042785-186/259","page_number":186,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b80bf810-5e34-433c-82e6-35556cd92d63","block_type":"box","text":"A number of states are considering or have enacted deregulation proposals. The introduction of","page_number":187,"box":{"x":116,"y":87,"width":715,"height":12}},{"id":"9d36b8ab-f30c-44ce-9bd7-5f6cec680d7c","block_type":"box","text":"competition into the industry as a result of such deregulation has at times resulted in lower revenue,","page_number":187,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"f3cd83d5-1694-4bd5-bc8e-db75455b153a","block_type":"box","text":"lower credit ratings, increased default risk, and lower electric utility security prices. Such increased","page_number":187,"box":{"x":117,"y":118,"width":734,"height":12}},{"id":"5de09100-6485-410f-8224-e1d16dc844f3","block_type":"box","text":"competition may also cause long-term contracts, which electric utilities previously entered into to buy","page_number":187,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"b13e3a4a-5223-4c47-a7e5-3b495b27fa99","block_type":"box","text":"power, to become “stranded assets” which have no economic value. Any loss associated with such","page_number":187,"box":{"x":117,"y":149,"width":739,"height":12}},{"id":"813c1dda-3db8-4005-91b7-84679e68559c","block_type":"box","text":"contracts must be absorbed by ratepayers and investors. In addition, some electric utilities have","page_number":187,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"6d7fc3f5-628e-4bdf-89e6-d1c7e2737f74","block_type":"box","text":"acquired electric utilities overseas to diversify, enhance earnings and gain experience in operating in a","page_number":187,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"6b2763a5-bc4d-4a22-9cc7-f1d38bffad09","block_type":"box","text":"deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":187,"box":{"x":116,"y":196,"width":752,"height":12}},{"id":"6f7b70c7-d59f-4d32-a1e3-43338a931b3d","block_type":"box","text":"which have burdened the acquirer’s balance sheet. There is no assurance that current deregulation","page_number":187,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"d6742e3d-a0a6-4fd8-9599-c4902f9b8bb9","block_type":"box","text":"proposals will be adopted. However, deregulation in any form could significantly impact the electric","page_number":187,"box":{"x":117,"y":227,"width":736,"height":12}},{"id":"a0b2ef00-fca0-4f24-8a69-7285c3d32be7","block_type":"box","text":"utilities industry.","page_number":187,"box":{"x":117,"y":242,"width":123,"height":12}},{"id":"82ec39ad-1692-4ac3-8ede-ba2fd6aaee9e","block_type":"box","text":"Telecommunications.","page_number":187,"box":{"x":118,"y":273,"width":155,"height":10}},{"id":"79a077c2-0605-4a32-bc9f-01254059b402","block_type":"box","text":"The telecommunications industry today includes both traditional telephone","page_number":187,"box":{"x":275,"y":273,"width":561,"height":12}},{"id":"2d9e517e-4b93-44eb-8b6c-529597802bcd","block_type":"box","text":"companies, with a history of broad market coverage and highly regulated businesses, and cable","page_number":187,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"58a39557-9fa8-49dc-88da-75115b75d836","block_type":"box","text":"companies, which began as small, lightly regulated businesses focused on limited markets. Today","page_number":187,"box":{"x":116,"y":304,"width":733,"height":12}},{"id":"49122a75-fac1-4ddd-b0a8-3de029ac72cb","block_type":"box","text":"these two historically different businesses are converging in an industry that is trending toward larger,","page_number":187,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"f6d4cb37-9498-4e28-b1f0-a070cafcc085","block_type":"box","text":"competitive national and international markets with an emphasis on deregulation. Companies that","page_number":187,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"c7714311-655a-468b-8a69-a74cbc001cd5","block_type":"box","text":"distribute telephone services and provide access to the telephone networks still comprise the greatest","page_number":187,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"f5922c21-5a40-4ae2-bc5b-ab14373761ed","block_type":"box","text":"portion of this segment, but non-regulated activities such as wireless telephone services, paging, data","page_number":187,"box":{"x":117,"y":366,"width":759,"height":12}},{"id":"b9bdbd3c-d7dd-4adb-8c5d-8422e65c3b37","block_type":"box","text":"transmission and processing, equipment retailing, computer software and hardware and internet","page_number":187,"box":{"x":116,"y":382,"width":718,"height":12}},{"id":"086269e8-279f-41ef-af72-0f26abbded38","block_type":"box","text":"services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":187,"box":{"x":116,"y":397,"width":759,"height":12}},{"id":"809e404e-ba78-45cd-a31d-85d96dcd331e","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies.","page_number":187,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"aa8221ae-a4cd-49f6-bee4-24dc7c3e47e1","block_type":"box","text":"The presence of unregulated companies in this industry and the entry of traditional telephone","page_number":187,"box":{"x":116,"y":428,"width":696,"height":12}},{"id":"922c404a-274e-4f4e-8670-28fafaf07bc4","block_type":"box","text":"companies into unregulated or less regulated businesses provide significant investment opportunities","page_number":187,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"b8f0698b-de78-48be-a60a-ce780c6f0fbc","block_type":"box","text":"with companies that may increase their earnings at faster rates than had been allowed in traditional","page_number":187,"box":{"x":116,"y":459,"width":742,"height":12}},{"id":"0bf234f9-a49f-45eb-8cc1-b0b31ffc2f52","block_type":"box","text":"regulated businesses. Still, increasing competition, technological innovations and other structural","page_number":187,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"b08ca7b9-db02-4334-b14a-3615cc42ae8d","block_type":"box","text":"changes could adversely affect the profitability of such utilities and the growth rate of their dividends.","page_number":187,"box":{"x":116,"y":490,"width":750,"height":12}},{"id":"7f72dadc-e8e9-418d-8baa-593a4f50e2e9","block_type":"box","text":"Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":187,"box":{"x":117,"y":506,"width":725,"height":12}},{"id":"549663c9-a558-4e23-9ccd-c195bf3077b8","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility","page_number":187,"box":{"x":116,"y":521,"width":718,"height":12}},{"id":"be832af3-08e5-4704-a0d9-d89e0fa31a50","block_type":"box","text":"services to both residential, corporate and governmental customers.","page_number":187,"box":{"x":116,"y":537,"width":511,"height":12}},{"id":"600bc219-6b68-46aa-93b5-77e29996dd48","block_type":"box","text":"Gas.","page_number":187,"box":{"x":117,"y":568,"width":33,"height":9}},{"id":"77b41f75-8bcb-4d79-b9d2-d425f1ea20a0","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes.","page_number":187,"box":{"x":151,"y":568,"width":733,"height":12}},{"id":"63723a0b-4382-4013-b38f-58f3231827e9","block_type":"box","text":"In the United States, interstate transmission companies are regulated by the Federal Energy","page_number":187,"box":{"x":117,"y":583,"width":689,"height":12}},{"id":"97f44f39-2078-4ed8-9060-b2d6327883f3","block_type":"box","text":"Regulatory Commission, which is reducing its regulation of the industry. Many companies have","page_number":187,"box":{"x":117,"y":599,"width":709,"height":12}},{"id":"4b3e5545-59a5-48c6-a54b-f01a81a31014","block_type":"box","text":"diversified into oil and gas exploration and development, making returns more sensitive to energy","page_number":187,"box":{"x":116,"y":614,"width":728,"height":12}},{"id":"99f1a337-7007-4e44-8e90-4317b87b4999","block_type":"box","text":"prices. In the recent decade, gas utility companies have been adversely affected by disruptions in the","page_number":187,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"d91da305-0380-45f8-83e4-e610d3364518","block_type":"box","text":"oil industry and have also been affected by increased concentration and competition. In the opinion of","page_number":187,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"09c00e04-da1e-4036-a43e-56fcb80e37be","block_type":"box","text":"the Manager, however, environmental considerations could improve the gas industry outlook in the","page_number":187,"box":{"x":116,"y":661,"width":733,"height":12}},{"id":"bbfe9f74-532c-453a-ac32-5cd381f1eb2c","block_type":"box","text":"future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":187,"box":{"x":116,"y":676,"width":703,"height":12}},{"id":"4863c843-2085-48d9-9ad1-16a8a7019312","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for","page_number":187,"box":{"x":117,"y":692,"width":698,"height":12}},{"id":"dbfaf080-75bc-4dab-80e8-8ec1148f4cf2","block_type":"box","text":"electricity generation. However, technological or regulatory changes within the industry may delay or","page_number":187,"box":{"x":116,"y":707,"width":745,"height":12}},{"id":"52803a04-9295-45d0-b6e5-f8d8da25f72d","block_type":"box","text":"prevent this result.","page_number":187,"box":{"x":117,"y":723,"width":135,"height":12}},{"id":"df09e20d-876f-4451-a425-faeec123e9bf","block_type":"box","text":"Water.","page_number":187,"box":{"x":118,"y":754,"width":46,"height":9}},{"id":"01d1cb0a-c2cd-4c27-bcf3-40a60b63a90b","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United","page_number":187,"box":{"x":170,"y":754,"width":695,"height":12}},{"id":"62e0f085-924e-4b65-b94b-a412300286b3","block_type":"box","text":"States and around the world the industry is highly fragmented because most of the supplies are owned","page_number":187,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"7b9c85d5-accd-4ba3-9247-6cd6618c4436","block_type":"box","text":"by local authorities. Companies in this industry are generally mature and are experiencing little or no","page_number":187,"box":{"x":117,"y":785,"width":743,"height":12}},{"id":"aa524567-f020-40dc-9f13-95645234442c","block_type":"box","text":"per capita volume growth. In the opinion of the Manager, there may be opportunities for certain","page_number":187,"box":{"x":117,"y":800,"width":702,"height":12}},{"id":"6443e5cf-1834-4f2d-a298-cb9eb0a1d42e","block_type":"box","text":"companies to acquire other water utility companies and for foreign acquisition of domestic companies.","page_number":187,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"4db7b5f2-9f9d-45be-82a0-927679af1d69","block_type":"box","text":"The Manager believes that favorable investment opportunities may result from consolidation of this","page_number":187,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"6512aaf1-fcef-4668-ab29-812704a6d19d","block_type":"box","text":"segment. As with other utilities, however, increased regulation, increased costs and potential","page_number":187,"box":{"x":116,"y":847,"width":693,"height":12}},{"id":"cc8260fc-f314-455e-a065-664ea57a68dd","block_type":"box","text":"disruptions in supply may adversely affect investments in water supply utilities.","page_number":187,"box":{"x":116,"y":862,"width":588,"height":12}},{"id":"7ace7ca7-8ed4-4ff6-87fd-4ef9eae8958a","block_type":"box","text":"II-101","page_number":187,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"7b479dc6-78bc-46e8-9c32-405ad9cfa786","block_type":"box","text":"NM1026U-6042785-187/259","page_number":187,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c09549c3-2969-4538-b111-49f4d605c2ff","block_type":"box","text":"Utility Industries Generally.","page_number":188,"box":{"x":117,"y":87,"width":197,"height":12}},{"id":"ae332634-977c-4c39-9e45-368017cebc30","block_type":"box","text":"There can be no assurance that the positive developments noted above,","page_number":188,"box":{"x":316,"y":87,"width":548,"height":12}},{"id":"8acd695c-3279-40cc-9bbe-6c9c72fd41be","block_type":"box","text":"including those relating to privatization and changing regulation, will occur or that risk factors other than","page_number":188,"box":{"x":117,"y":102,"width":771,"height":13}},{"id":"1e7b4ffb-7fbe-4426-ad94-d12d7a35bcfb","block_type":"box","text":"those noted above will not develop in the future.","page_number":188,"box":{"x":116,"y":118,"width":361,"height":12}},{"id":"1111d41b-13ad-46fe-91ff-652f7c113950","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":188,"box":{"x":118,"y":149,"width":643,"height":12}},{"id":"04529fe1-6041-41e5-b20a-d5c5b53d0562","block_type":"box","text":"A Fund may","page_number":188,"box":{"x":762,"y":149,"width":100,"height":12}},{"id":"585a7fa7-cf02-4e4d-9aad-006a34abaff0","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":188,"box":{"x":117,"y":165,"width":713,"height":12}},{"id":"0cab1eb9-3534-45a6-a2a4-d80947f769b6","block_type":"box","text":"purchase or sell securities on a delayed delivery basis or through a forward commitment (including on","page_number":188,"box":{"x":117,"y":180,"width":758,"height":12}},{"id":"12a31943-ddbc-4d64-ac70-aa6234d661b9","block_type":"box","text":"a TBA (to be announced) basis). These transactions involve the purchase or sale of securities by a","page_number":188,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"bf9ac9c5-5a19-4cde-a46a-61cc6c585bd8","block_type":"box","text":"Fund at an established price with payment and delivery taking place in the future. The Fund enters into","page_number":188,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"8eb4879f-0618-4c9d-ae49-bf041af575a8","block_type":"box","text":"these transactions to obtain what is considered an advantageous price to the Fund at the time of","page_number":188,"box":{"x":116,"y":227,"width":721,"height":12}},{"id":"ddd5f6dd-77d8-4481-87fc-ca8e9209b3cb","block_type":"box","text":"entering into the transaction.","page_number":188,"box":{"x":116,"y":242,"width":217,"height":12}},{"id":"cbf4a9e2-07a6-4a54-9e35-ef688e31fc29","block_type":"box","text":"Pursuant to recommendations of the Treasury Market Practices Group, which is sponsored by the","page_number":188,"box":{"x":117,"y":273,"width":731,"height":12}},{"id":"a73e5e85-44f0-49b0-bdb3-ae90824cd6ac","block_type":"box","text":"Federal Reserve Bank of New York, a Fund or its counterparty generally will be required to post","page_number":188,"box":{"x":117,"y":289,"width":714,"height":12}},{"id":"35b074da-7fbb-4cb0-a3fa-fe9b93341d43","block_type":"box","text":"collateral when entering into certain forward-settling transactions, including without limitation TBA","page_number":188,"box":{"x":116,"y":304,"width":726,"height":12}},{"id":"b49d67e6-bb27-4624-b20c-818372099ef7","block_type":"box","text":"transactions. FINRA rules have also been implemented that include mandatory margin requirements","page_number":188,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"bcc41cb6-289f-44ed-a204-d93b65ccd6d2","block_type":"box","text":"for the TBA market with limited exceptions. The collateralization of TBA trades is intended to mitigate","page_number":188,"box":{"x":116,"y":335,"width":754,"height":12}},{"id":"2a30a489-ddcd-437c-941b-ab37183df991","block_type":"box","text":"counterparty credit risk between trade and settlement, but could increase the cost of TBA transactions","page_number":188,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"202718b5-2393-4c08-a253-f370322cb901","block_type":"box","text":"and impose added operational complexity.","page_number":188,"box":{"x":116,"y":366,"width":320,"height":12}},{"id":"3fb19682-4b11-4c20-9391-5ad6df089b60","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":188,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"9251f2ff-6041-41fd-9ecb-3b56a30eab55","block_type":"box","text":"security purchased or sold on a delayed delivery basis or through a forward commitment will be","page_number":188,"box":{"x":116,"y":413,"width":713,"height":12}},{"id":"a10d8e09-f33f-46ee-b3e2-f6a612ee9464","block_type":"box","text":"delivered. Also, the value of securities in these transactions on the delivery date may be more or less","page_number":188,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"992f5371-0660-428a-947d-bbfc3632368b","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":188,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"61cc985d-69b6-4926-853c-7de525490428","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":188,"box":{"x":116,"y":459,"width":757,"height":12}},{"id":"250b91ce-d3cc-4832-a93e-e6186ced2213","block_type":"box","text":"security appreciates above the sale price during the commitment period.","page_number":188,"box":{"x":116,"y":475,"width":542,"height":12}},{"id":"9740ae3b-af1f-4fa1-9bd5-3bbef89f849d","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a","page_number":188,"box":{"x":117,"y":506,"width":715,"height":12}},{"id":"4c6daa48-e392-4479-9afa-2517e58a9e35","block_type":"box","text":"commitment after it has been entered into, and may sell securities it has committed to purchase before","page_number":188,"box":{"x":116,"y":521,"width":767,"height":12}},{"id":"b53347d7-1cea-402c-9e02-93a49aba8fbe","block_type":"box","text":"those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize","page_number":188,"box":{"x":116,"y":537,"width":764,"height":12}},{"id":"1a09dd0d-6c0c-4e65-b687-92500c9693e8","block_type":"box","text":"a taxable capital gain or loss.","page_number":188,"box":{"x":116,"y":552,"width":221,"height":12}},{"id":"7e8b395a-ea18-47fc-8eae-fb07b139a52b","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other","page_number":188,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"b71125a5-1d1e-480e-86d2-48e74631fd23","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":188,"box":{"x":117,"y":599,"width":760,"height":12}},{"id":"bdb16290-d455-4a9d-85a6-1fc056a2c1e4","block_type":"box","text":"or missing an opportunity to obtain a price considered to be advantageous.","page_number":188,"box":{"x":116,"y":614,"width":561,"height":12}},{"id":"29603dd4-5dad-4825-bde9-5a30a44739ae","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any","page_number":188,"box":{"x":116,"y":645,"width":688,"height":12}},{"id":"7a466f8e-c519-46eb-a3d7-962ef392fdbf","block_type":"box","text":"subsequent fluctuations in their market value, is taken into account when determining the market value","page_number":188,"box":{"x":116,"y":661,"width":762,"height":12}},{"id":"6a2fb79f-a9a7-4df3-be94-586fdf4eec53","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":188,"box":{"x":116,"y":676,"width":726,"height":12}},{"id":"146189c7-d2f7-4c8d-bb15-f640e2b342ca","block_type":"box","text":"interest on the securities it has committed to purchase until they are paid for and delivered on the","page_number":188,"box":{"x":117,"y":692,"width":720,"height":12}},{"id":"0ac0b603-b43c-4d6e-ab15-27fbc9ac8fd0","block_type":"box","text":"settlement date.","page_number":188,"box":{"x":116,"y":707,"width":118,"height":10}},{"id":"6b283952-e2b7-45f5-b0f0-b3a6c23b43d9","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":188,"box":{"x":117,"y":738,"width":740,"height":12}},{"id":"9dc578eb-3b72-4846-8ada-00e9dafd0c5e","block_type":"box","text":"settling securities (e.g., firm and standby commitments, including TBA commitments, and dollar rolls)","page_number":188,"box":{"x":116,"y":754,"width":747,"height":12}},{"id":"8635582e-98fc-47c4-a5cf-2066c589409c","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":188,"box":{"x":116,"y":769,"width":746,"height":12}},{"id":"1a3774b5-6599-4909-93f3-db5aaae44fb0","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the Fund intends to physically","page_number":188,"box":{"x":116,"y":785,"width":745,"height":12}},{"id":"978f616b-38ea-4f50-8182-80f565003bc0","block_type":"box","text":"settle the transaction and the transaction will settle within 35 days of its trade date (the “Delayed","page_number":188,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"662d20c1-449a-4754-ae08-07bbf9ffff3e","block_type":"box","text":"Settlement Securities Provision”). If a when-issued, forward-settling or non-standard settlement cycle","page_number":188,"box":{"x":116,"y":816,"width":749,"height":12}},{"id":"56b49811-9178-4c15-b6c2-67353c00533f","block_type":"box","text":"security does not satisfy the Delayed-Settlement Securities Provision, then it is treated as a Derivatives","page_number":188,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"2dc359b5-9801-4d5b-8908-4a3de6e74179","block_type":"box","text":"Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives — Rule 18f-4 under the","page_number":188,"box":{"x":116,"y":847,"width":770,"height":12}},{"id":"e6ee20b7-aea0-4104-b770-82f7d0b2e4e2","block_type":"box","text":"Investment Company Act” above.","page_number":188,"box":{"x":117,"y":862,"width":252,"height":12}},{"id":"a3140f4d-0c92-42b3-8488-b76ed276906c","block_type":"box","text":"II-102","page_number":188,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"08856753-1344-40b0-821b-c933a6c97406","block_type":"box","text":"NM1026U-6042785-188/259","page_number":188,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"299439e4-f890-45d5-a106-d439799bddab","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":189,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"41f7fa6e-98bf-41bc-8c63-b400fc1fe6b4","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many agreements with","page_number":189,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"9d16550b-b56d-454a-a55e-9e8d76035f85","block_type":"box","text":"respect to when-issued, TBA and forward commitment transactions, terms that delay or restrict the","page_number":189,"box":{"x":117,"y":118,"width":736,"height":12}},{"id":"a62750f5-29c3-460a-8d39-7ff2d22e0398","block_type":"box","text":"rights of counterparties, such as a Fund, to terminate such agreements, foreclose upon collateral,","page_number":189,"box":{"x":117,"y":134,"width":728,"height":12}},{"id":"b7a12419-3b11-4be7-acc4-3e46f8484af0","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the counterparty and/","page_number":189,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"45fa71e1-253f-468f-bff1-58bd5760d22d","block_type":"box","text":"or its affiliates are subject to certain types of resolution or insolvency proceedings. It is possible that","page_number":189,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"c57a7a8a-21b5-4a94-928f-77e44d1052e5","block_type":"box","text":"these requirements, as well as potential additional government regulation and other developments in","page_number":189,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"bc3d3809-60d5-405e-b807-4750a29301b3","block_type":"box","text":"the market, could adversely affect a Fund’s ability to terminate existing agreements with respect to","page_number":189,"box":{"x":116,"y":196,"width":735,"height":12}},{"id":"1f9f8f32-3390-421c-8912-1561e03496d9","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":189,"box":{"x":116,"y":211,"width":600,"height":12}},{"id":"0d3c51aa-59c4-44ea-ac41-0098a55ec320","block_type":"box","text":"Yields and Ratings.","page_number":189,"box":{"x":118,"y":242,"width":152,"height":12}},{"id":"a85a2fa3-bdf9-4fba-97b9-18aa2c43daba","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including","page_number":189,"box":{"x":271,"y":242,"width":604,"height":12}},{"id":"9c0e9a16-e7f7-4dbb-af1e-afc21cd4d8f3","block_type":"box","text":"general market conditions, conditions in the particular market for the obligation, the financial condition","page_number":189,"box":{"x":116,"y":258,"width":759,"height":12}},{"id":"31f3dd3d-2e72-4682-aa99-a14a9c4d158b","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":189,"box":{"x":116,"y":273,"width":738,"height":12}},{"id":"a88db261-2d7d-4f7c-9fed-892155d1b517","block_type":"box","text":"ratings of Moody’s, Fitch and S&P represent their respective opinions as to the quality of the","page_number":189,"box":{"x":117,"y":289,"width":688,"height":12}},{"id":"7df77b65-3667-4d2f-9a54-54d574ff49d8","block_type":"box","text":"obligations they undertake to rate. Ratings, however, are general and are not absolute standards of","page_number":189,"box":{"x":116,"y":304,"width":743,"height":12}},{"id":"7bfc7d58-4d7f-4666-a15e-7ee2ddab33c4","block_type":"box","text":"quality. Consequently, obligations with the same rating, maturity and interest rate may have different","page_number":189,"box":{"x":116,"y":320,"width":749,"height":12}},{"id":"1dad9eeb-a0ef-468f-b310-163900b8a21f","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":189,"box":{"x":117,"y":335,"width":769,"height":12}},{"id":"30df2bee-1559-45e3-a624-06d3b7509c22","block_type":"box","text":"Manager or sub-adviser will consider such an event in determining whether the Fund should continue","page_number":189,"box":{"x":117,"y":351,"width":755,"height":12}},{"id":"22c190d4-1978-46b6-b342-2d1101f089ff","block_type":"box","text":"to hold the security.","page_number":189,"box":{"x":116,"y":366,"width":150,"height":12}},{"id":"305808ff-277c-4476-a758-bd8254895fea","block_type":"box","text":"Zero Coupon Securities.","page_number":189,"box":{"x":116,"y":397,"width":193,"height":12}},{"id":"c0901d20-dd43-4217-a1f2-023f9977f540","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value","page_number":189,"box":{"x":310,"y":397,"width":575,"height":12}},{"id":"47e9f2d7-eb75-45ff-8e54-600123da54a0","block_type":"box","text":"and do not pay interest during the life of the security. The discount approximates the total amount of","page_number":189,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"d9411bb5-c9c5-4bd5-ae2b-61397f46e7ca","block_type":"box","text":"interest the security will accrue and compound over the period until maturity at a rate of interest","page_number":189,"box":{"x":117,"y":428,"width":711,"height":12}},{"id":"4823c06e-14ef-4171-820d-126595cd2ccd","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":189,"box":{"x":117,"y":444,"width":741,"height":12}},{"id":"55495461-a65e-4a41-a8b9-1ff8c8b74e68","block_type":"box","text":"coupon security is entitled to receive the par value of the security.","page_number":189,"box":{"x":116,"y":459,"width":492,"height":12}},{"id":"c62e7580-37f7-4e39-a843-f3315f2eb88e","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to","page_number":189,"box":{"x":116,"y":490,"width":740,"height":12}},{"id":"af642411-6af4-4f71-b180-9a0b23a2acf2","block_type":"box","text":"have received income (“phantom income”) annually, notwithstanding that cash may not be received","page_number":189,"box":{"x":117,"y":506,"width":742,"height":12}},{"id":"185ec262-ac5f-4cc6-b81d-d1b96c1fdce4","block_type":"box","text":"currently. The effect of owning instruments that do not make current interest payments is that a fixed","page_number":189,"box":{"x":116,"y":521,"width":751,"height":12}},{"id":"13294d0a-b36f-42fa-9968-5708a71a9f62","block_type":"box","text":"yield is earned not only on the original investment but also, in effect, on all discount accretion during","page_number":189,"box":{"x":116,"y":537,"width":746,"height":12}},{"id":"d9b61a1f-45a3-4b72-ae80-02055eb205fc","block_type":"box","text":"the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of","page_number":189,"box":{"x":116,"y":552,"width":737,"height":12}},{"id":"2a01830b-b841-4299-8f33-43339c57f160","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":189,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"7e1b4410-35a5-423a-a555-c7f403a87beb","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":189,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"e5614601-5c01-48df-9931-9f35a236c953","block_type":"box","text":"some of these securities may be subject to substantially greater price fluctuations during periods of","page_number":189,"box":{"x":116,"y":599,"width":739,"height":12}},{"id":"135293d7-7fe9-4a0c-97b2-b2af4c1289d1","block_type":"box","text":"changing market interest rates than are comparable securities that pay interest currently. Longer term","page_number":189,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"1f94eafe-0c71-4561-97c5-be195b8abf37","block_type":"box","text":"zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These","page_number":189,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"c63f8299-28c9-4325-8c52-4c51b232c49f","block_type":"box","text":"investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a","page_number":189,"box":{"x":117,"y":645,"width":749,"height":12}},{"id":"01423ee5-1e24-46f5-a9bb-a1dbd8d46c29","block_type":"box","text":"higher rate of return to attract investors who are willing to defer receipt of cash.","page_number":189,"box":{"x":117,"y":661,"width":583,"height":12}},{"id":"fce89821-2957-4ee7-86ca-ed748f18004a","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting","page_number":189,"box":{"x":116,"y":692,"width":733,"height":12}},{"id":"34e2249b-4e79-43d9-a37b-92abd75864e3","block_type":"box","text":"purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater","page_number":189,"box":{"x":117,"y":707,"width":720,"height":12}},{"id":"e7b02a0b-7917-4203-b00f-a6e7a9a1a209","block_type":"box","text":"fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated","page_number":189,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"1d4589b4-a7e6-4858-ba77-0941016257d5","block_type":"box","text":"securities that pay cash interest at regular intervals.","page_number":189,"box":{"x":116,"y":738,"width":382,"height":12}},{"id":"470ec68e-dd60-43a4-be9b-226555168c70","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund","page_number":189,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"20ae5df0-ef60-4091-92df-82aace084751","block_type":"box","text":"is required to distribute income to its shareholders and, consequently, may have to dispose of other,","page_number":189,"box":{"x":117,"y":785,"width":740,"height":12}},{"id":"e6a351f2-4ac5-4c4b-a8d9-41b4a6aa4fda","block_type":"box","text":"more liquid portfolio securities under disadvantageous circumstances or may have to leverage itself by","page_number":189,"box":{"x":117,"y":800,"width":760,"height":12}},{"id":"5722438e-8f97-4f22-89c9-d5afd68d69b8","block_type":"box","text":"borrowing in order to generate the cash to satisfy these distributions. The required distributions may","page_number":189,"box":{"x":117,"y":816,"width":740,"height":12}},{"id":"cc4c9b28-be17-4cf3-977f-7478a92d4cae","block_type":"box","text":"result in an increase in a Fund’s exposure to zero coupon securities.","page_number":189,"box":{"x":117,"y":831,"width":511,"height":12}},{"id":"33f32812-5806-4b8c-ac0f-9c87b6a2d61e","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero","page_number":189,"box":{"x":117,"y":862,"width":712,"height":12}},{"id":"a3603c17-7824-46a2-ac6a-83d85e503b31","block_type":"box","text":"coupon securities. During a period of severe market conditions, the market for such securities may","page_number":189,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"7600b9a7-a58a-48be-917c-da46401e915c","block_type":"box","text":"II-103","page_number":189,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"03f2082f-2261-49c1-9ed6-d743a541f02a","block_type":"box","text":"NM1026U-6042785-189/259","page_number":189,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7faf2758-e54a-49e6-b0f2-b5f57433b7e7","block_type":"box","text":"become even less liquid. In addition, as these securities do not pay cash interest, a Fund’s investment","page_number":190,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"7be0a9eb-3593-4c0e-a5cc-efc4b6d4e41f","block_type":"box","text":"exposure to these securities and their risks, including credit risk, will increase during the time these","page_number":190,"box":{"x":116,"y":103,"width":739,"height":12}},{"id":"967c6702-9134-4b35-8cf5-e5fba67253ce","block_type":"box","text":"securities are held in the Fund’s portfolio.","page_number":190,"box":{"x":116,"y":118,"width":311,"height":12}},{"id":"11d17f2c-52cd-4014-be3a-9c02a43cf6d0","block_type":"box","text":"Suitability. (All Funds)","page_number":190,"box":{"x":117,"y":149,"width":181,"height":12}},{"id":"7a2e91e4-66df-42fa-90c9-3c02a8619565","block_type":"box","text":"The economic benefit of an investment in any Fund depends upon many factors beyond the control of","page_number":190,"box":{"x":116,"y":172,"width":760,"height":12}},{"id":"03e15cad-9190-4899-aa09-386ee15ecf05","block_type":"box","text":"the Fund, the Manager and its affiliates. Each Fund should be considered a vehicle for diversification","page_number":190,"box":{"x":116,"y":188,"width":753,"height":12}},{"id":"bcc3c37f-ff7c-406f-845d-7db5a97b9c9a","block_type":"box","text":"and not as a balanced investment program. The suitability for any particular investor of a purchase of","page_number":190,"box":{"x":116,"y":203,"width":755,"height":12}},{"id":"d87b8be5-33a2-495e-9323-7e439bbb503d","block_type":"box","text":"shares in a Fund will depend upon, among other things, such investor’s investment objectives and","page_number":190,"box":{"x":116,"y":219,"width":733,"height":12}},{"id":"8f8bf037-eb50-4cb7-9d37-d55381c084d6","block_type":"box","text":"such investor’s ability to accept the risks associated with investing in securities, including the risk of","page_number":190,"box":{"x":116,"y":234,"width":741,"height":12}},{"id":"d6c384ce-13ff-4f23-9fce-25958be779a1","block_type":"box","text":"loss of principal.","page_number":190,"box":{"x":117,"y":250,"width":124,"height":12}},{"id":"4b032443-7851-4b39-aec2-7c118c7cedbc","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":190,"box":{"x":116,"y":281,"width":293,"height":12}},{"id":"a9fb3f4f-de1c-430f-b0b2-a684d0140279","block_type":"box","text":"See “Investment Restrictions” or “Investment Policies,” as applicable in each Fund’s SAI for the","page_number":190,"box":{"x":116,"y":304,"width":712,"height":12}},{"id":"e386f3fe-1a3d-4c57-b8ad-25b87a10e94e","block_type":"box","text":"specific fundamental and non-fundamental investment restrictions adopted by each Fund. In addition to","page_number":190,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"497a8da8-2f8e-4ff7-af9d-e2ba794a0cae","block_type":"box","text":"those investment restrictions, each Fund is also subject to the restrictions discussed below.","page_number":190,"box":{"x":116,"y":335,"width":683,"height":12}},{"id":"f1c99c1e-c975-4f9e-a068-53934590d1ef","block_type":"box","text":"Each Fund’s investments will be limited in order to","page_number":190,"box":{"x":117,"y":366,"width":376,"height":10}},{"id":"319b53d3-205c-4128-bdb2-cce7dc9bea48","block_type":"box","text":"allow the Fund to qualify as a “regulated investment","page_number":190,"box":{"x":494,"y":366,"width":389,"height":12}},{"id":"edeb63fd-c8e5-4efb-917f-4a948bd20f35","block_type":"box","text":"company” for purposes of the Code. See “Dividends and Taxes — Taxes” or “Taxes.” To qualify,","page_number":190,"box":{"x":116,"y":382,"width":721,"height":12}},{"id":"9a3157fa-1a72-4d57-b917-d4957c1f99d4","block_type":"box","text":"among other requirements, each Fund will limit its investments so that, at the close of each quarter of","page_number":190,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"44c5af31-8e1a-4a4f-a245-f2bdf0b1e933","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":190,"box":{"x":116,"y":413,"width":741,"height":12}},{"id":"39e81061-7a1d-4e7e-a840-98c88e11e159","block_type":"box","text":"securities of other regulated investment companies, U.S. Government Securities and other securities,","page_number":190,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"9d05d00f-47f2-4a58-8934-3c66f93e9ae0","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":190,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"14f6b77e-7659-450e-9d4e-29077fa477f2","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":190,"box":{"x":116,"y":459,"width":751,"height":12}},{"id":"4ad011ac-e499-4d1c-9939-d637a0f559e5","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":190,"box":{"x":116,"y":475,"width":718,"height":12}},{"id":"093f93df-f53f-436b-ba0a-c156b6529310","block_type":"box","text":"Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":190,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"f29b15df-995b-452f-a27a-34e629b53a2a","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":190,"box":{"x":116,"y":506,"width":726,"height":12}},{"id":"79f8270d-b784-4c81-848d-24840100805c","block_type":"box","text":"similar trades or businesses or related trades or businesses or in the securities of one or more qualified","page_number":190,"box":{"x":116,"y":521,"width":772,"height":12}},{"id":"a0a4644d-26a5-40b4-ab12-1808436c4d2d","block_type":"box","text":"publicly traded partnerships (","page_number":190,"box":{"x":117,"y":537,"width":214,"height":12}},{"id":"1c921392-4089-4abb-9439-28cfad5a8841","block_type":"box","text":"i.e.","page_number":190,"box":{"x":332,"y":537,"width":21,"height":9}},{"id":"ab545974-ee7a-4402-8f59-2233c670f7cc","block_type":"box","text":", partnerships that are traded on an established securities market or","page_number":190,"box":{"x":356,"y":537,"width":507,"height":12}},{"id":"5f039421-8d5d-45d7-880d-b93ebdb19a39","block_type":"box","text":"tradable on a secondary market, other than partnerships that derive 90% of their income from interest,","page_number":190,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"0d53563d-6f52-4c94-a1b5-69a338f1ebf6","block_type":"box","text":"dividends, capital gains and other traditionally permitted mutual fund income). For purposes of this","page_number":190,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"be40cf93-7450-4f8c-8695-0f0bf996613a","block_type":"box","text":"restriction, the Municipal Funds generally will regard each state and each of its political subdivisions,","page_number":190,"box":{"x":117,"y":583,"width":749,"height":12}},{"id":"962ba813-4ae6-4ddf-849f-d202d2925bd1","block_type":"box","text":"agencies or instrumentalities and each multi-state agency of which the state is a member as a","page_number":190,"box":{"x":116,"y":599,"width":703,"height":12}},{"id":"414e4d89-3fde-48b9-8a75-bfab7b4b46bb","block_type":"box","text":"separate issuer. Each public authority that issues securities on behalf of a private entity generally will","page_number":190,"box":{"x":116,"y":614,"width":754,"height":12}},{"id":"1c220329-2337-4c85-be43-08bb9918ddb1","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":190,"box":{"x":116,"y":630,"width":731,"height":12}},{"id":"3788318e-4af7-4494-aca5-cc8400c2c22f","block_type":"box","text":"revenues of a non-government entity, then the entity with the ultimate responsibility for the payment of","page_number":190,"box":{"x":117,"y":645,"width":762,"height":12}},{"id":"b07a1926-3572-41f1-932c-440994e5245e","block_type":"box","text":"interest and principal may be regarded as the sole issuer.","page_number":190,"box":{"x":117,"y":661,"width":425,"height":12}},{"id":"1fe907bc-2b57-4ea3-9799-8dcea77df28b","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10%","page_number":190,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"9fc70258-c874-4c28-8da5-cbf474782380","block_type":"box","text":"and 25% diversification requirements of the Code discussed above and the securities of each foreign","page_number":190,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"36191af3-748a-4e29-b17b-b516b5bd47be","block_type":"box","text":"government issuer are considered to be obligations of a single issuer. These tax-related limitations","page_number":190,"box":{"x":116,"y":723,"width":732,"height":12}},{"id":"dd78e8ce-ef5c-442e-a315-2d0ea1417dc2","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":190,"box":{"x":117,"y":738,"width":763,"height":12}},{"id":"381aa12b-635b-4302-8150-05b48dab6acc","block_type":"box","text":"federal tax requirements. A Fund that is “diversified” under the Investment Company Act must satisfy","page_number":190,"box":{"x":116,"y":754,"width":748,"height":12}},{"id":"0a43cb88-f97f-4e71-9de4-3cc04e52f6c6","block_type":"box","text":"the foregoing 5% and 10% requirements with respect to 75% of its total assets.","page_number":190,"box":{"x":116,"y":769,"width":586,"height":12}},{"id":"eb090f74-c52f-4dc7-83f1-6e789c59b4e4","block_type":"box","text":"II-104","page_number":190,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"0ce91b83-9b38-469f-9f93-044bef46de1b","block_type":"box","text":"NM1026U-6042785-190/259","page_number":190,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bdcc93bf-b4f0-4083-8073-53759c5a2169","block_type":"box","text":"APPENDIX A","page_number":191,"box":{"x":448,"y":87,"width":108,"height":9}},{"id":"2647b6c7-de75-43e3-b809-5a241322cc83","block_type":"box","text":"Description of Bond Ratings","page_number":191,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"51d01624-8fc6-43eb-8adb-bc367b757621","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":191,"box":{"x":116,"y":154,"width":722,"height":12}},{"id":"580a4e77-da92-49a7-99c1-9a8db9b99920","block_type":"box","text":"agency designated as a nationally recognized statistical rating organization (“NRSRO”) by the","page_number":191,"box":{"x":116,"y":170,"width":700,"height":12}},{"id":"bd524257-3cd3-4ae9-adfa-bc23ec43de1c","block_type":"box","text":"Securities and Exchange Commission (“SEC”). While NRSROs may from time to time revise such","page_number":191,"box":{"x":116,"y":185,"width":731,"height":12}},{"id":"92812f1a-9c25-437a-b881-186ff590ce58","block_type":"box","text":"ratings, they undertake no obligation to do so, and the ratings given to securities at issuance do not","page_number":191,"box":{"x":117,"y":201,"width":741,"height":12}},{"id":"372f3872-658d-4df3-96e9-19d25f0d514f","block_type":"box","text":"necessarily represent ratings which would be given to these securities on a particular subsequent date.","page_number":191,"box":{"x":117,"y":216,"width":769,"height":12}},{"id":"953f78cb-3991-4d90-a9e4-dcd8a55afb27","block_type":"box","text":"NRSROs may rate specific investments (e.g., bonds), issuers (e.g., corporations, governments and","page_number":191,"box":{"x":117,"y":246,"width":740,"height":12}},{"id":"48fb13ee-0de7-4145-aa00-870452a0e330","block_type":"box","text":"financial institutions) and/or programs (e.g., commercial paper programs). However, certain types of","page_number":191,"box":{"x":116,"y":261,"width":747,"height":13}},{"id":"494a53b0-1f87-428c-ba95-2b9d5a15fe20","block_type":"box","text":"investments may not be rated by NRSROs, such as certain government/sovereign obligations, US","page_number":191,"box":{"x":117,"y":277,"width":732,"height":12}},{"id":"3a8d4265-e94f-4cb8-a72b-56e26ae2a39a","block_type":"box","text":"agency securities, commercial paper, time deposits at financial institutions, and derivative instruments","page_number":191,"box":{"x":116,"y":292,"width":761,"height":13}},{"id":"6773872d-80dd-4339-a494-3c91f4ccc16f","block_type":"box","text":"such as credit default swaps. For these types of investments, as well as US Treasury securities (some","page_number":191,"box":{"x":116,"y":308,"width":764,"height":12}},{"id":"d2173e67-3e49-4f22-bb2f-48ddcf99d4e8","block_type":"box","text":"of which are not rated), where an NRSRO has not rated the specific investment but has rated the","page_number":191,"box":{"x":116,"y":323,"width":725,"height":13}},{"id":"d779f0ee-652f-48e0-8eb9-05f1d1550ea1","block_type":"box","text":"investment’s issuer, program, financial institution or underlying reference asset, BlackRock Advisors,","page_number":191,"box":{"x":117,"y":339,"width":751,"height":12}},{"id":"4bd834de-6f60-400f-8b16-5c092d1636e2","block_type":"box","text":"LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider the investment","page_number":191,"box":{"x":117,"y":355,"width":766,"height":12}},{"id":"e7b91168-f1bd-4bd8-9e77-a1077c2b7c8b","block_type":"box","text":"to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":191,"box":{"x":116,"y":370,"width":736,"height":12}},{"id":"7f530c89-41b1-4970-9221-ac38ff3ca54d","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings","page_number":191,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"d81c4cd2-3cc0-4da3-99b9-ebfa170c3c2b","block_type":"box","text":"for the same security (e.g., “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider","page_number":191,"box":{"x":116,"y":401,"width":770,"height":12}},{"id":"1e384137-e318-4e08-9e6c-a0a0afc65834","block_type":"box","text":"the security to have the highest of the multiple ratings.","page_number":191,"box":{"x":116,"y":417,"width":407,"height":12}},{"id":"f7621c61-f7d1-4ebb-9685-d1f67a3f4ed6","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":191,"box":{"x":117,"y":446,"width":732,"height":13}},{"id":"2657c557-e90f-4b5f-9732-59df00ab6595","block_type":"box","text":"offering. Preliminary prospectuses or term sheets for new issue securities may include an expected","page_number":191,"box":{"x":116,"y":462,"width":742,"height":12}},{"id":"79e27c8d-49c2-49c1-bae1-74d4339bfa03","block_type":"box","text":"rating for the security (as determined by the underwriter and/or issuer) or an NRSRO rating for the","page_number":191,"box":{"x":117,"y":477,"width":733,"height":13}},{"id":"ac1237d0-0680-4e0e-8ea3-5528d64677bd","block_type":"box","text":"issuer of the security. If applicable, when deciding whether to purchase a new issue security that has","page_number":191,"box":{"x":117,"y":493,"width":752,"height":12}},{"id":"9bf78c00-31cf-4eaf-9a18-51b05f80964b","block_type":"box","text":"not yet been rated by an NRSRO, BlackRock may attribute an expected rating to the security based","page_number":191,"box":{"x":117,"y":508,"width":745,"height":13}},{"id":"f15c4937-d4aa-4727-b228-c4ef75db2cdf","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":191,"box":{"x":116,"y":524,"width":747,"height":12}},{"id":"edd26fef-570a-4b29-b36a-964ed9880d21","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":191,"box":{"x":116,"y":539,"width":760,"height":13}},{"id":"32303664-97db-4642-90d8-819fb111948e","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":191,"box":{"x":116,"y":555,"width":767,"height":12}},{"id":"aa5d1df0-dc05-4c99-ad17-d7fd33e3344a","block_type":"box","text":"having a similar structure or the same sponsor.","page_number":191,"box":{"x":117,"y":571,"width":353,"height":12}},{"id":"f14296aa-8d93-4d9e-ad36-71d341a85d6e","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit","page_number":191,"box":{"x":116,"y":600,"width":746,"height":12}},{"id":"03f52a8d-66ba-453e-bf25-fd2d5d84be8f","block_type":"box","text":"ratings eligibility criteria as part of its index methodology, the fund may purchase any security within the","page_number":191,"box":{"x":117,"y":616,"width":771,"height":12}},{"id":"0f02cfa9-dd84-40c8-8919-142d09836098","block_type":"box","text":"index, such security having been determined by the index provider as meeting its credit ratings","page_number":191,"box":{"x":117,"y":632,"width":707,"height":11}},{"id":"a122544c-289b-4ce6-aa8f-d67275f70496","block_type":"box","text":"eligibility criteria. The credit ratings practices of an index provider may differ from BlackRock’s","page_number":191,"box":{"x":116,"y":647,"width":701,"height":12}},{"id":"f051d3bd-66cd-474d-aa64-82e2ae3b18cc","block_type":"box","text":"practices, as described above. Further, the fund may invest, directly or indirectly, in securities that are","page_number":191,"box":{"x":117,"y":662,"width":754,"height":12}},{"id":"b220ec37-04dc-4362-8cbc-e4c049f3c06d","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":191,"box":{"x":117,"y":678,"width":757,"height":12}},{"id":"6888f13b-e7f4-40eb-8803-2e2d544e9690","block_type":"box","text":"in its index methodology in various circumstances, including where a security is downgraded but not","page_number":191,"box":{"x":117,"y":694,"width":741,"height":11}},{"id":"e4f6dde2-d184-406b-a77e-9fb4cdd7d4f0","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":191,"box":{"x":116,"y":709,"width":733,"height":12}},{"id":"d584f189-f18c-4a13-b5c1-dedb8afc15b0","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":191,"box":{"x":116,"y":724,"width":734,"height":13}},{"id":"fd492186-a95f-4f7a-a50f-fed06064d433","block_type":"box","text":"fund.","page_number":191,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"f74c508e-35c0-473d-b4c6-f293a376f01c","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to","page_number":191,"box":{"x":117,"y":770,"width":757,"height":12}},{"id":"549a4cd4-a2b9-48e8-a4c4-de2a7c1c5cd4","block_type":"box","text":"pay interest or repay principal which are similar to the risks of lower-rated speculative bonds (although","page_number":191,"box":{"x":117,"y":785,"width":756,"height":12}},{"id":"bce94b06-aa4e-41cd-8abe-9902da54a294","block_type":"box","text":"BlackRock may deem such unrated securities to be of higher quality). Evaluation of these securities is","page_number":191,"box":{"x":117,"y":801,"width":755,"height":12}},{"id":"38044973-671a-4b32-a088-aa24a7050980","block_type":"box","text":"dependent on BlackRock’s judgment, analysis and experience in the evaluation of such securities.","page_number":191,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"7674f8f0-71c5-47af-85f4-eebe50fbe851","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":191,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"a4cbfafd-d253-4528-a8b9-81706b6935cc","block_type":"box","text":"effect of recent developments on the issuer’s ability to make interest and principal payments or on the","page_number":191,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"e668fed3-4144-4564-b9de-a09bf3e0ec28","block_type":"box","text":"likelihood of default.","page_number":191,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"4d1f1126-1a11-4906-ad83-465269acb6ad","block_type":"box","text":"A-1","page_number":191,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"af3232c6-dd46-40f1-be6d-a88988b44d5c","block_type":"box","text":"NM1026U-6042785-191/259","page_number":191,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3aebb8d9-f791-4030-bd92-d81e23f70d5b","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":192,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"eac9e3ff-ee8c-4026-b68e-fa89355eaf5e","block_type":"box","text":"Ratings and Fitch. Other terms used to describe such securities include “lower rated bonds,” “non","page_number":192,"box":{"x":117,"y":102,"width":728,"height":13}},{"id":"440777c8-b2ca-4b79-9914-1c7788ffc54a","block_type":"box","text":"investment grade bonds,” “below investment grade bonds,” and “junk bonds.”","page_number":192,"box":{"x":117,"y":118,"width":577,"height":12}},{"id":"843eadbc-97ac-4cd4-9edf-2b9c1ddc747f","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":192,"box":{"x":116,"y":148,"width":674,"height":12}},{"id":"37761faa-ed18-490a-a707-4230b6dd8407","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":192,"box":{"x":116,"y":177,"width":677,"height":12}},{"id":"f3d689ae-9821-4f6f-b50d-8da5106ac738","block_type":"box","text":"Credit ratings are assigned on Moody’s global long-term and short-term rating scales and are forward","page_number":192,"box":{"x":117,"y":207,"width":757,"height":12}},{"id":"19d0e782-b925-464c-945c-86333150e5de","block_type":"box","text":"looking opinions of the relative credit risks of financial obligations issued by non-financial corporates,","page_number":192,"box":{"x":117,"y":222,"width":750,"height":13}},{"id":"ec3b8ae2-6b09-4cbd-8a87-7d2a21e9f0d9","block_type":"box","text":"financial institutions, structured finance vehicles, project finance vehicles, and public sector entities.","page_number":192,"box":{"x":116,"y":238,"width":742,"height":12}},{"id":"990999d5-8c0c-473a-b468-580edfc72a1a","block_type":"box","text":"Moody’s defines credit risk as the risk that an entity may not meet its contractual financial obligations","page_number":192,"box":{"x":117,"y":253,"width":751,"height":13}},{"id":"25012445-ff18-4d47-922f-c785ff219fb1","block_type":"box","text":"as they come due and any estimated financial loss in the event of default or impairment. The","page_number":192,"box":{"x":116,"y":269,"width":692,"height":12}},{"id":"cc32b5eb-2983-4d23-9751-db1cd9b2b810","block_type":"box","text":"contractual financial obligations addressed by Moody’s ratings are those that call for, without regard to","page_number":192,"box":{"x":116,"y":284,"width":763,"height":13}},{"id":"32a54147-8a19-4296-87ca-7ccaf8e0f43f","block_type":"box","text":"enforceability, the payment of an ascertainable amount, which may vary based upon standard sources","page_number":192,"box":{"x":116,"y":300,"width":765,"height":12}},{"id":"eca1eb48-1b6d-4821-9b3b-f3633b8d1d02","block_type":"box","text":"of variation (e.g., floating interest rates), by an ascertainable date. Moody’s rating addresses the","page_number":192,"box":{"x":116,"y":315,"width":719,"height":13}},{"id":"cd7ec561-2b09-4e7a-8ca1-8e84bdfc3758","block_type":"box","text":"issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s","page_number":192,"box":{"x":117,"y":331,"width":738,"height":12}},{"id":"963c3eef-125f-40ad-be9b-c61d068505d8","block_type":"box","text":"ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g.,","page_number":192,"box":{"x":117,"y":346,"width":765,"height":13}},{"id":"43922f09-a021-4b4b-9432-c09f838d016d","block_type":"box","text":"equity indexed), absent an express statement to the contrary in a press release accompanying an","page_number":192,"box":{"x":116,"y":362,"width":731,"height":12}},{"id":"ecc5be5f-ea54-4fe2-949f-b26f91829a8b","block_type":"box","text":"initial rating. Long-term ratings are assigned to issuers or obligations with an original maturity of eleven","page_number":192,"box":{"x":117,"y":377,"width":767,"height":13}},{"id":"ab934bcc-65be-40bc-a73d-5e6a309e0b88","block_type":"box","text":"months or more and reflect both on the likelihood of a default or impairment on contractual financial","page_number":192,"box":{"x":117,"y":393,"width":741,"height":12}},{"id":"755b0880-6080-489b-b26c-aa964a96ac0c","block_type":"box","text":"obligations and the expected financial loss suffered in the event of default or impairment. Short-term","page_number":192,"box":{"x":116,"y":409,"width":747,"height":12}},{"id":"e6f7424e-a6f9-471b-9330-63a4060fcd75","block_type":"box","text":"ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both","page_number":192,"box":{"x":117,"y":424,"width":760,"height":12}},{"id":"4e0de0e7-4b4e-45cb-877e-9d3da05f7e1a","block_type":"box","text":"on the likelihood of a default or impairment on contractual financial obligations and the expected","page_number":192,"box":{"x":116,"y":440,"width":717,"height":12}},{"id":"07b0dc46-c87e-415a-bfe5-dcec185acb59","block_type":"box","text":"financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":192,"box":{"x":116,"y":455,"width":755,"height":12}},{"id":"d96d095e-e998-4aee-beed-a58c5c0f45e3","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made","page_number":192,"box":{"x":116,"y":471,"width":761,"height":12}},{"id":"338e1f70-cd67-423f-ae32-be0913030b1e","block_type":"box","text":"publicly available although private and unpublished ratings may also be assigned.","page_number":192,"box":{"x":117,"y":486,"width":610,"height":12}},{"id":"c257182a-e11c-4871-bba0-a41a17a7e3f5","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial","page_number":192,"box":{"x":117,"y":516,"width":763,"height":12}},{"id":"168737ef-e1ca-4b25-a587-04692677380b","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to","page_number":192,"box":{"x":116,"y":531,"width":769,"height":12}},{"id":"41a393ab-0190-4570-87f2-4843e602252e","block_type":"box","text":"all structured finance ratings. The addition of (sf) to structured finance ratings should eliminate any","page_number":192,"box":{"x":116,"y":547,"width":735,"height":12}},{"id":"49303141-95c6-42f6-ab35-c04eb87157d1","block_type":"box","text":"presumption that such ratings and fundamental ratings at the same letter grade level will behave the","page_number":192,"box":{"x":117,"y":562,"width":747,"height":12}},{"id":"da3839fc-cc7d-4ad6-9f9b-73100363da14","block_type":"box","text":"same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated","page_number":192,"box":{"x":116,"y":578,"width":751,"height":12}},{"id":"2913c54d-82d1-4ebb-a55e-3fe574700fe5","block_type":"box","text":"structured finance and fundamental securities may have different risk characteristics. Through its","page_number":192,"box":{"x":116,"y":593,"width":724,"height":12}},{"id":"502c12e1-2d83-4d19-a87f-f3dce590cf28","block_type":"box","text":"current methodologies, however, Moody’s aspires to achieve broad expected equivalence in structured","page_number":192,"box":{"x":116,"y":609,"width":769,"height":12}},{"id":"c66f1dce-36cc-4af2-90ad-99159f13a10d","block_type":"box","text":"finance and fundamental rating performance when measured over a long period of time.","page_number":192,"box":{"x":116,"y":624,"width":658,"height":12}},{"id":"fa80aae4-c0a1-45db-b837-2b8888bd3817","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":192,"box":{"x":117,"y":654,"width":445,"height":12}},{"id":"bdb938f1-868e-46a4-a9c9-496015650234","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level","page_number":192,"box":{"x":116,"y":684,"width":756,"height":12}},{"id":"d01c1ad0-fcbe-47a6-b52e-436fa5f4446a","block_type":"box","text":"of credit risk.","page_number":192,"box":{"x":226,"y":699,"width":93,"height":10}},{"id":"a006fba6-fa68-489d-8337-e8b89a0e9be5","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit","page_number":192,"box":{"x":116,"y":722,"width":747,"height":12}},{"id":"0c32c130-e883-4e56-aba1-6a94afc49e38","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":738,"width":28,"height":9}},{"id":"b566a4f1-24b3-479b-add2-dfbeecb4ec73","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit","page_number":192,"box":{"x":116,"y":761,"width":754,"height":12}},{"id":"0e2b165e-65e0-4615-8165-e0ad664b87ed","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":777,"width":28,"height":9}},{"id":"829c3b9d-486f-4356-be7e-35452d5f7620","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit","page_number":192,"box":{"x":117,"y":800,"width":741,"height":12}},{"id":"32e4a496-0a49-4140-b410-6f7003ecdea8","block_type":"box","text":"risk and as such may possess certain speculative characteristics.","page_number":192,"box":{"x":226,"y":815,"width":483,"height":12}},{"id":"744b63d5-25f4-43f9-8b68-2cadbb41263c","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit","page_number":192,"box":{"x":117,"y":839,"width":750,"height":12}},{"id":"2f683868-eb90-4020-b037-4e0752c9c3a3","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":854,"width":35,"height":10}},{"id":"7418330e-5a0c-4411-bf54-a3f7e0c2cb82","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":192,"box":{"x":117,"y":877,"width":717,"height":12}},{"id":"79d17e6f-f690-4862-b0f6-c65235e6467b","block_type":"box","text":"A-2","page_number":192,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"4a95e019-bf22-43de-a549-9b53352fb5cf","block_type":"box","text":"NM1026U-6042785-192/259","page_number":192,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"463732f8-dcdb-4266-8eff-82c6cb3f459a","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to","page_number":193,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"d1a071e9-40f2-4b04-82bb-a7decc8878fd","block_type":"box","text":"very high credit risk.","page_number":193,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"5b4bd992-146e-4ea3-9415-b72cbd2c8eab","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with","page_number":193,"box":{"x":117,"y":126,"width":753,"height":12}},{"id":"a73bb693-4654-4977-bc87-a61cfa316924","block_type":"box","text":"some prospect of recovery of principal and interest.","page_number":193,"box":{"x":226,"y":141,"width":386,"height":12}},{"id":"38294469-657e-442c-904d-f34b8ae78eab","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect","page_number":193,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"82a0c6e0-5a95-4b1c-85a9-15b17dd36f93","block_type":"box","text":"for recovery of principal or interest.","page_number":193,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"e77363c5-0743-4f97-bb82-3f0c07f9cfd1","block_type":"box","text":"Note:","page_number":193,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"ef9aff4e-0b08-4312-ae3b-805cd32e4953","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa","page_number":193,"box":{"x":156,"y":210,"width":706,"height":12}},{"id":"77bdaa7f-59b9-43fa-886b-e28aa835022d","block_type":"box","text":"through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating","page_number":193,"box":{"x":116,"y":225,"width":745,"height":12}},{"id":"16952c0d-2da2-49e9-aeb8-e366e123d4f3","block_type":"box","text":"category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the","page_number":193,"box":{"x":116,"y":241,"width":741,"height":12}},{"id":"fc9ab71c-1c3f-4e9f-852a-9e9a1b567e58","block_type":"box","text":"lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of","page_number":193,"box":{"x":117,"y":256,"width":751,"height":12}},{"id":"d548726e-1d27-4e9a-be3d-2597249bd66f","block_type":"box","text":"hybrid securities issued by banks, insurers, finance companies, and securities firms.","page_number":193,"box":{"x":117,"y":272,"width":628,"height":12}},{"id":"582a97db-a09f-43e4-accb-19783d928c5d","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal","page_number":193,"box":{"x":117,"y":301,"width":737,"height":12}},{"id":"508785d4-1bb6-4018-8afb-b84993bf8f14","block_type":"box","text":"payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may","page_number":193,"box":{"x":117,"y":317,"width":765,"height":12}},{"id":"3cf5bd1d-26e5-4280-ad4d-a352cde93041","block_type":"box","text":"also be subject to contractually allowable write-downs of principal that could result in impairment.","page_number":193,"box":{"x":116,"y":332,"width":724,"height":12}},{"id":"03d6a5d7-13e4-4f4e-9f3f-fd8e722eb64e","block_type":"box","text":"Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an","page_number":193,"box":{"x":116,"y":348,"width":744,"height":12}},{"id":"34d5ad50-23a6-42e3-8163-0338d15a9823","block_type":"box","text":"expression of the relative credit risk associated with that security.","page_number":193,"box":{"x":116,"y":363,"width":488,"height":12}},{"id":"cd7e75be-0971-410f-aec1-a04a91d53f91","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":193,"box":{"x":117,"y":393,"width":448,"height":12}},{"id":"0185acb8-d64c-4d9d-bf34-c55ecec151ba","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":193,"box":{"x":117,"y":422,"width":667,"height":13}},{"id":"4d408fd1-b450-480d-837a-2773447a7604","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":193,"box":{"x":117,"y":446,"width":653,"height":12}},{"id":"6c795f53-a744-4af3-81d7-4c234c992d2d","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":193,"box":{"x":117,"y":469,"width":697,"height":12}},{"id":"872fa2f4-eda9-4eee-b575-7946f7c30d40","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime","page_number":193,"box":{"x":117,"y":492,"width":741,"height":12}},{"id":"1d810dc5-2a3c-41a9-b42b-e9a5020e6c92","block_type":"box","text":"rating categories.","page_number":193,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"1944f275-467f-459b-aa38-214983378541","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":193,"box":{"x":117,"y":537,"width":707,"height":12}},{"id":"a735d7d5-0cf0-41a2-afa7-d5a72883b35f","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S.","page_number":193,"box":{"x":117,"y":567,"width":681,"height":12}},{"id":"668774c0-4126-4b86-860b-51433f44ad50","block_type":"box","text":"municipalities and nonprofits. These commercial paper programs may be backed by external letters of","page_number":193,"box":{"x":117,"y":582,"width":761,"height":12}},{"id":"b1b07c94-4ad9-4ba5-bf3f-449380ee752a","block_type":"box","text":"credit or liquidity facilities, or by an issuer’s self-liquidity.","page_number":193,"box":{"x":116,"y":598,"width":420,"height":12}},{"id":"5db0bc0f-1e63-41f2-8650-948bfe10f75b","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":193,"box":{"x":117,"y":627,"width":765,"height":13}},{"id":"4d88f158-f0ce-41f3-aad6-6c6e93493bd5","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales","page_number":193,"box":{"x":117,"y":643,"width":708,"height":12}},{"id":"a394dc81-9da8-45fa-bfe5-38dc3719fcea","block_type":"box","text":"discussed below.","page_number":193,"box":{"x":116,"y":659,"width":132,"height":9}},{"id":"b6287500-cbbb-4e52-bbc9-09d6c51867ad","block_type":"box","text":"MIG Ratings","page_number":193,"box":{"x":117,"y":688,"width":96,"height":12}},{"id":"02b34846-6123-4285-8ea6-fea167fca675","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain","page_number":193,"box":{"x":117,"y":718,"width":738,"height":12}},{"id":"a42d1e63-0d31-4b9c-a0ac-c5c9923521a1","block_type":"box","text":"other short-term obligations, which typically mature in three years or less. Under certain circumstances,","page_number":193,"box":{"x":116,"y":733,"width":766,"height":12}},{"id":"4976fb2c-3ddb-428e-b4fa-d7acbdf6cd49","block_type":"box","text":"Moody’s uses the MIG scale for bond anticipation notes with maturities of up to five years.","page_number":193,"box":{"x":117,"y":749,"width":665,"height":12}},{"id":"dcbbd6cf-76d9-4e8c-89e6-5df5e8cfe17b","block_type":"box","text":"MIG Scale","page_number":193,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"fa28dbb7-54da-4804-bfe5-c67735ed9b70","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by","page_number":193,"box":{"x":117,"y":808,"width":722,"height":12}},{"id":"045f7b6c-d74d-4e8f-89c6-16d0b9b8e256","block_type":"box","text":"established cash flows, highly reliable liquidity support, or demonstrated broad-based","page_number":193,"box":{"x":226,"y":823,"width":631,"height":12}},{"id":"2b826e05-0f6c-44e8-a4eb-acbc99670e9f","block_type":"box","text":"access to the market for refinancing.","page_number":193,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"b3e326ab-d160-4586-8469-4fa6ed0af026","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although","page_number":193,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"8ab47b5a-d83a-489b-bcf2-4450ef1cfeab","block_type":"box","text":"not as large as in the preceding group.","page_number":193,"box":{"x":226,"y":878,"width":291,"height":12}},{"id":"06ee0cc1-2d67-4905-9cfe-4932629587a7","block_type":"box","text":"A-3","page_number":193,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"44d083e8-c732-4ab1-9552-f6be4fd0c7bb","block_type":"box","text":"NM1026U-6042785-193/259","page_number":193,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5a6af8e8-e234-4543-a610-f82865be41fe","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection","page_number":194,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"4402e6a6-26e0-4b0c-9e56-f09ca66dc091","block_type":"box","text":"may be narrow, and market access for refinancing is likely to be less well-established.","page_number":194,"box":{"x":226,"y":102,"width":642,"height":13}},{"id":"563c4368-d856-4100-9e8b-2ab0159e7d43","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this","page_number":194,"box":{"x":116,"y":126,"width":723,"height":12}},{"id":"0a22db16-d25a-40b4-ad2f-43d2e0575511","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":194,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"1255956c-71b5-4d90-b811-cf6a67350687","block_type":"box","text":"VMIG Ratings","page_number":194,"box":{"x":116,"y":168,"width":114,"height":12}},{"id":"417aea98-c83b-4520-a193-062deeb01ac3","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The","page_number":194,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"4b934c47-7eec-4f9b-a83d-776a8a64c954","block_type":"box","text":"components are a long-term rating and a short-term payment obligation rating. The long-term rating","page_number":194,"box":{"x":116,"y":211,"width":744,"height":12}},{"id":"e4fef9b5-d03f-460d-b31b-c3d2cf4e81c3","block_type":"box","text":"addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term","page_number":194,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"15fe886c-05e5-4824-8283-e18027928241","block_type":"box","text":"payment obligation rating addresses the ability of the issuer or the liquidity provider to meet any","page_number":194,"box":{"x":117,"y":242,"width":713,"height":12}},{"id":"ed3a2e14-7519-4ae8-9c51-b2fce25f4620","block_type":"box","text":"purchase-price payment obligation resulting from optional tenders (“on demand”) and/or mandatory","page_number":194,"box":{"x":117,"y":258,"width":740,"height":12}},{"id":"6b81fb76-f7dd-4d8b-9589-6dbc3f2e6668","block_type":"box","text":"tenders of the VRDO. The short-term demand obligation rating uses the VMIG scale. VMIG ratings with","page_number":194,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"b2852e34-bca7-4805-ad22-65d0075de95b","block_type":"box","text":"liquidity support use as an input the short-term Counterparty Risk Assessment of the support provider,","page_number":194,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"ed7db4d9-19e3-4af5-ae51-91c509219503","block_type":"box","text":"or the long-term rating of the underlying obligor in the absence of third party liquidity support.","page_number":194,"box":{"x":116,"y":304,"width":693,"height":12}},{"id":"78b7352b-a39a-4321-9f90-f16e73702ae6","block_type":"box","text":"Transitions of VMIG ratings of demand obligations with conditional liquidity support differ from","page_number":194,"box":{"x":116,"y":320,"width":699,"height":12}},{"id":"63687a7a-53aa-4bed-be55-3ca26143e883","block_type":"box","text":"transitions on the Prime scale to reflect the risk that external liquidity support will terminate if the","page_number":194,"box":{"x":116,"y":335,"width":717,"height":12}},{"id":"dbfd77c7-0a93-4681-9688-0f8a64caf041","block_type":"box","text":"issuer’s long-term rating drops below investment grade.","page_number":194,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"695e8108-200e-44d9-b839-39f620bf8fac","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand","page_number":194,"box":{"x":117,"y":378,"width":771,"height":12}},{"id":"a9a63eae-f35e-4901-b15c-908c0d294f49","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":194,"box":{"x":116,"y":393,"width":753,"height":12}},{"id":"fd57876f-0f1f-47a7-b0c5-a36083e55d57","block_type":"box","text":"but the purchase price is payable only with remarketing proceeds, the short-term demand obligation","page_number":194,"box":{"x":117,"y":409,"width":745,"height":12}},{"id":"a53a51af-5ee7-40b1-a766-2170cc17ad14","block_type":"box","text":"rating is “NR”.","page_number":194,"box":{"x":117,"y":424,"width":107,"height":12}},{"id":"89b0daf7-afca-45da-a540-4ebe9117f253","block_type":"box","text":"Industrial development bonds in the US where the obligor is a corporate may carry a VMIG rating that","page_number":194,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"8c11101a-819c-4209-bc28-66415d9c7502","block_type":"box","text":"reflects Moody’s view of the relative likelihood of default and loss. In these cases, liquidity assessment","page_number":194,"box":{"x":117,"y":467,"width":763,"height":12}},{"id":"3bac5aa7-6ab8-4c24-8b4a-9a2209201328","block_type":"box","text":"is based on the liquidity of the corporate obligor.","page_number":194,"box":{"x":117,"y":482,"width":361,"height":12}},{"id":"c6e1ca1f-462b-4e21-9de9-000ee0ad647e","block_type":"box","text":"VMIG Scale","page_number":194,"box":{"x":116,"y":509,"width":94,"height":10}},{"id":"73a3da2c-01c3-4166-a2b7-1d718d85e0c6","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the","page_number":194,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"5d6f364f-1b80-463f-ac85-d37caa372ef0","block_type":"box","text":"superior short-term credit strength of the liquidity provider and structural and legal","page_number":194,"box":{"x":226,"y":552,"width":610,"height":12}},{"id":"1430aed3-1bb0-4117-9f9f-5a34786c2cda","block_type":"box","text":"protections.","page_number":194,"box":{"x":226,"y":568,"width":91,"height":12}},{"id":"5b130bd2-dd2a-4ecc-9551-b6743ffde5b8","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong","page_number":194,"box":{"x":116,"y":591,"width":766,"height":12}},{"id":"98ca2912-a87b-46ee-b3d4-60201468d9b4","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections.","page_number":194,"box":{"x":226,"y":606,"width":636,"height":12}},{"id":"172e751b-307d-4b41-9928-c7df8389f243","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by","page_number":194,"box":{"x":116,"y":630,"width":752,"height":12}},{"id":"92c75c5b-14f3-4538-b401-b1676f1fc568","block_type":"box","text":"the satisfactory short-term credit strength of the liquidity provider and structural and","page_number":194,"box":{"x":225,"y":645,"width":624,"height":12}},{"id":"574bcafa-38f5-401f-af1c-3a2e605b48e7","block_type":"box","text":"legal protections.","page_number":194,"box":{"x":226,"y":661,"width":125,"height":12}},{"id":"df56a757-7463-4ece-ab09-eb8d37897f72","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this","page_number":194,"box":{"x":116,"y":684,"width":762,"height":12}},{"id":"7f264975-d366-44a9-b539-002bbc12d0bc","block_type":"box","text":"category may be supported by a liquidity provider that does not have a sufficiently","page_number":194,"box":{"x":226,"y":699,"width":606,"height":13}},{"id":"a0b9d4ce-5701-403c-8fab-fe8f1a9097fa","block_type":"box","text":"strong short-term rating or may lack the structural or legal protections.","page_number":194,"box":{"x":226,"y":715,"width":517,"height":12}},{"id":"e4b54da7-3be0-4bc1-b7ec-471640cd1595","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":194,"box":{"x":117,"y":742,"width":753,"height":12}},{"id":"d05a6f03-9485-40dc-8373-cb2ba3834546","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with","page_number":194,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"12664b2d-5fe4-4059-9996-18e026b03abd","block_type":"box","text":"respect to a specific financial obligation, a specific class of financial obligations, or a specific financial","page_number":194,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"f23f8a7b-2cf1-4f59-9832-44ff03ef58fb","block_type":"box","text":"program (including ratings on medium-term note programs and commercial paper programs). It takes","page_number":194,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"7c7f7ce0-d954-4b02-9b8b-952fec618fde","block_type":"box","text":"into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement","page_number":194,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"97a87ca9-c746-4b0e-84ad-ded783bb9789","block_type":"box","text":"on the obligation and takes into account the currency in which the obligation is denominated. The","page_number":194,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"03ebf8e9-da7a-43a1-84b6-84b2520f055f","block_type":"box","text":"opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments","page_number":194,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"52f3d26b-cd38-42e4-90d2-5d9f6d6f631f","block_type":"box","text":"as they come due, and this opinion may assess terms, such as collateral security and subordination,","page_number":194,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"df47f9b9-cb90-4461-baed-a74070ca4ff6","block_type":"box","text":"which could affect ultimate payment in the event of default.","page_number":194,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"dd16bcad-55f1-422b-bb5a-dd37d6a9890b","block_type":"box","text":"A-4","page_number":194,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"a22fb903-084e-4078-be06-dec50bf7d28e","block_type":"box","text":"NM1026U-6042785-194/259","page_number":194,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4c3966e5-671a-4e59-8d66-373dfe7ef7ae","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally","page_number":195,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"1cf880e0-b1e0-4174-aaac-4e6b5f11dc33","block_type":"box","text":"assigned to those obligations considered short-term in the relevant market, typically with an original","page_number":195,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"0ec4f605-9ecd-4647-a97a-d7b8fcc5b9b0","block_type":"box","text":"maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the","page_number":195,"box":{"x":117,"y":118,"width":708,"height":12}},{"id":"c4704cd1-bf50-414e-a48f-78635bde5507","block_type":"box","text":"creditworthiness of an obligor with respect to put features on long-term obligations. S&P would typically","page_number":195,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"2375a036-1a0e-4663-9701-4709f9c1df93","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":195,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"3721c97d-56d5-417f-ac8f-138c877d2201","block_type":"box","text":"However, the ratings S&P assigns to certain instruments may diverge from these guidelines based on","page_number":195,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"da41f754-589a-459d-af15-b1d7efdc55f7","block_type":"box","text":"market practices.","page_number":195,"box":{"x":117,"y":180,"width":132,"height":12}},{"id":"6488fbed-2665-42a3-80a4-5c8fe1983ac2","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":195,"box":{"x":117,"y":208,"width":750,"height":12}},{"id":"6af9a64a-e3e0-4e3a-aa49-74b31f896ac8","block_type":"box","text":"• The likelihood of payment — the capacity and willingness of the obligor to meet its financial","page_number":195,"box":{"x":117,"y":237,"width":714,"height":12}},{"id":"6fa91bea-debf-41cf-84bd-5d69be4ab123","block_type":"box","text":"commitments on an obligation in accordance with the terms of the obligation;","page_number":195,"box":{"x":150,"y":252,"width":575,"height":12}},{"id":"0f3eba5e-c4e7-4fbd-97a6-c04b077cd708","block_type":"box","text":"• The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":195,"box":{"x":117,"y":274,"width":691,"height":12}},{"id":"e495ead2-e78b-48e2-a3be-677bfca2ecf9","block_type":"box","text":"• The protection afforded by, and relative position of, the financial obligation in the event of a","page_number":195,"box":{"x":117,"y":296,"width":712,"height":12}},{"id":"fd9c2d3f-a7ec-4e9d-85c3-be1824b0a64a","block_type":"box","text":"bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws","page_number":195,"box":{"x":150,"y":312,"width":704,"height":12}},{"id":"41e82eb1-be4e-4d0c-b5fc-3fa7edcaef37","block_type":"box","text":"affecting creditors’ rights.","page_number":195,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"fcd8d37b-f83d-499d-b9a4-0975ec1d8689","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority","page_number":195,"box":{"x":116,"y":355,"width":772,"height":13}},{"id":"c2115f04-4589-4454-87c6-6fa222d6be08","block_type":"box","text":"or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior","page_number":195,"box":{"x":116,"y":371,"width":728,"height":12}},{"id":"445fa431-779f-4915-9233-d8bf859c264a","block_type":"box","text":"obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply","page_number":195,"box":{"x":116,"y":386,"width":729,"height":13}},{"id":"00835ee0-29be-4bd4-9f04-6c8bb46952e1","block_type":"box","text":"when an entity has both senior and subordinated obligations, secured and unsecured obligations, or","page_number":195,"box":{"x":116,"y":402,"width":747,"height":12}},{"id":"24d07f9d-f841-464e-ac0f-0bf3e223e48a","block_type":"box","text":"operating company and holding company obligations.)","page_number":195,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"4574ff2c-d161-4c77-96d3-cdb27b9c92fc","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":195,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"5164318a-3c2c-4c06-b94b-409424dc1c1d","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity","page_number":195,"box":{"x":116,"y":474,"width":770,"height":12}},{"id":"b8d612fd-f6bf-4cf9-bd66-954a821179c1","block_type":"box","text":"to meet its financial commitments on the obligation is extremely strong.","page_number":195,"box":{"x":225,"y":490,"width":533,"height":12}},{"id":"54556ec6-ebbe-47f4-97d0-080b4b62e222","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree.","page_number":195,"box":{"x":116,"y":513,"width":768,"height":12}},{"id":"3358db57-d772-4ebb-b72e-175665c0a62f","block_type":"box","text":"The obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":195,"box":{"x":225,"y":528,"width":659,"height":13}},{"id":"83b6991d-0438-4625-a811-043f8ee60274","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes","page_number":195,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"2c9add88-8303-4c5a-9604-ad9b84e29424","block_type":"box","text":"in circumstances and economic conditions than obligations in higher-rated categories.","page_number":195,"box":{"x":226,"y":567,"width":642,"height":12}},{"id":"290d2c02-8da7-4348-b7fc-75696d853a7e","block_type":"box","text":"However, the obligor’s capacity to meet its financial commitments on the obligation is","page_number":195,"box":{"x":226,"y":583,"width":635,"height":12}},{"id":"8b0aef9a-b768-4778-9b82-48c67b0e02db","block_type":"box","text":"still strong.","page_number":195,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"6866c2e6-36de-45cf-aaf4-07b6e202cf9e","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse","page_number":195,"box":{"x":117,"y":621,"width":749,"height":13}},{"id":"95b461ef-d4ef-44c2-89bd-6e277c490401","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken the obligor’s","page_number":195,"box":{"x":226,"y":637,"width":652,"height":12}},{"id":"e4464f6e-75cd-4234-acdb-6eb8be610951","block_type":"box","text":"capacity to meet its financial commitments on the obligation.","page_number":195,"box":{"x":226,"y":652,"width":452,"height":13}},{"id":"940d1dfb-c48f-4ccb-937d-1947f9709736","block_type":"box","text":"BB, B,","page_number":195,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"a124faf4-56aa-4c39-8a17-218aa0d1ef1a","block_type":"box","text":"CCC, CC,","page_number":195,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"7528fe89-6876-4026-be53-0e9d2ff554da","block_type":"box","text":"and C","page_number":195,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"e0b1be81-ad4b-43a3-b2db-5dadbe002317","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant","page_number":195,"box":{"x":226,"y":676,"width":602,"height":12}},{"id":"de179857-1196-4a2d-91f3-68b9f8efe8eb","block_type":"box","text":"speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the","page_number":195,"box":{"x":226,"y":691,"width":624,"height":12}},{"id":"ab80a9e1-f624-4cc5-83b8-1a7be66aabe6","block_type":"box","text":"highest. While such obligations will likely have some quality and protective","page_number":195,"box":{"x":226,"y":707,"width":550,"height":12}},{"id":"03351d10-fce1-4787-8ed8-104f471529bf","block_type":"box","text":"characteristics, these may be outweighed by large uncertainties or major exposure to","page_number":195,"box":{"x":226,"y":722,"width":631,"height":12}},{"id":"88164e42-7e48-45fb-810a-b9189496fe1c","block_type":"box","text":"adverse conditions.","page_number":195,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"33686b5a-a51b-4ca7-9f8e-c0a3453e5acd","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues.","page_number":195,"box":{"x":117,"y":761,"width":758,"height":12}},{"id":"f27afbf3-2198-4fdc-a71e-c03d581aa1a6","block_type":"box","text":"However, it faces major ongoing uncertainties or exposure to adverse business,","page_number":195,"box":{"x":226,"y":776,"width":591,"height":13}},{"id":"e135b4a2-86fb-43cb-bb7d-df7189734889","block_type":"box","text":"financial, or economic conditions that could lead to the obligor’s inadequate capacity to","page_number":195,"box":{"x":225,"y":792,"width":644,"height":12}},{"id":"2cb1a675-bdf3-47e2-acfa-05ae48ac2e02","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":195,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"4bd2c856-da1c-464e-acf1-400f32de23c1","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but","page_number":195,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"1a9f37c2-5372-463f-8a21-030ba51576b6","block_type":"box","text":"the obligor currently has the capacity to meet its financial commitments on the","page_number":195,"box":{"x":225,"y":846,"width":584,"height":12}},{"id":"1216e300-8c52-46b5-a6fa-c84aee21e082","block_type":"box","text":"obligation. Adverse business, financial, or economic conditions will likely impair the","page_number":195,"box":{"x":226,"y":862,"width":619,"height":12}},{"id":"a9cc1851-bf7c-4a78-b90f-2923409d384c","block_type":"box","text":"obligor’s capacity or willingness to meet its financial commitments on the obligation.","page_number":195,"box":{"x":226,"y":877,"width":625,"height":12}},{"id":"137372ee-214c-498e-8f85-ca86c1693320","block_type":"box","text":"A-5","page_number":195,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"933f5c37-e92e-472b-88cc-6f0e41b78dcc","block_type":"box","text":"NM1026U-6042785-195/259","page_number":195,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bdaea543-6e76-4a8b-8929-18ecd173051a","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon","page_number":196,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"2413b1cd-466b-42c7-8a78-51abdcf3c57b","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its","page_number":196,"box":{"x":225,"y":102,"width":601,"height":13}},{"id":"84d787fb-99ab-478b-adfc-2a93d0a3fdb9","block_type":"box","text":"financial commitments on the obligation. In the event of adverse business, financial, or","page_number":196,"box":{"x":225,"y":118,"width":647,"height":12}},{"id":"af574aa2-8ccb-433c-83dc-fcccf2e57069","block_type":"box","text":"economic conditions, the obligor is not likely to have the capacity to meet its financial","page_number":196,"box":{"x":226,"y":134,"width":634,"height":12}},{"id":"7867ad46-6c31-47bf-af40-cecc0589f71e","block_type":"box","text":"commitments on the obligation.","page_number":196,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"d1f211b5-c0e2-463d-852e-570ab90298e9","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is","page_number":196,"box":{"x":117,"y":172,"width":761,"height":12}},{"id":"d2b66f5f-f9d2-4bdf-b6cb-b2ec306d3052","block_type":"box","text":"used when a default has not yet occurred but S&P expects default to be a virtual","page_number":196,"box":{"x":226,"y":188,"width":602,"height":12}},{"id":"57aa7197-4db5-4269-ab0e-261349db28a9","block_type":"box","text":"certainty, regardless of the anticipated time to default.","page_number":196,"box":{"x":226,"y":203,"width":404,"height":12}},{"id":"abb54e14-9f0b-47f2-b746-7f85a2ecc086","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is","page_number":196,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"6a16f9a7-038b-478e-b0cb-a51f5eee1e51","block_type":"box","text":"expected to have lower relative seniority or lower ultimate recovery compared with","page_number":196,"box":{"x":226,"y":242,"width":615,"height":12}},{"id":"332f8f74-8ee3-4d38-8b92-a0ec76773535","block_type":"box","text":"obligations that are rated higher.","page_number":196,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"dcf780d2-aaa3-4224-9f4c-a8c3c32f47d1","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":196,"box":{"x":117,"y":281,"width":751,"height":12}},{"id":"4ece082a-8007-48eb-af30-623301e98aba","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are","page_number":196,"box":{"x":226,"y":296,"width":650,"height":12}},{"id":"b8a92622-2fbe-428f-aea6-77b17839c7eb","block_type":"box","text":"not made on the date due, unless S&P believes that such payments will be made within","page_number":196,"box":{"x":226,"y":312,"width":655,"height":12}},{"id":"d4d1fa6c-5e5c-41ae-b14f-8faaf79b5e17","block_type":"box","text":"five business days in the absence of a stated grace period or within the earlier of the","page_number":196,"box":{"x":225,"y":327,"width":632,"height":12}},{"id":"064fef2b-9e40-448c-b233-13c423c0d741","block_type":"box","text":"stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing","page_number":196,"box":{"x":226,"y":343,"width":647,"height":12}},{"id":"9ed249f7-202d-483d-9eeb-d0a3f67682d8","block_type":"box","text":"of a bankruptcy petition or the taking of similar action and where default on an obligation","page_number":196,"box":{"x":226,"y":358,"width":659,"height":12}},{"id":"e229e64b-95c7-421c-a126-3aef08b7439c","block_type":"box","text":"is a virtual certainty, for example due to automatic stay provisions. A rating on an","page_number":196,"box":{"x":226,"y":374,"width":605,"height":12}},{"id":"b4585bb2-8a12-4754-b291-fb9cc9b2924e","block_type":"box","text":"obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":196,"box":{"x":226,"y":389,"width":555,"height":12}},{"id":"074a05c3-e145-4cc0-92f7-2e8f39b1f9b1","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":196,"box":{"x":143,"y":420,"width":705,"height":9}},{"id":"c39c6292-7dae-4ae1-addf-56fa111e0ea0","block_type":"box","text":"within the rating categories.","page_number":196,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"c54f9b15-36a9-41f4-b526-dcd39ed2151b","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":196,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"71d29c02-902e-4752-9912-e473d5f181a7","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":196,"box":{"x":116,"y":493,"width":765,"height":12}},{"id":"303b56ba-2789-4aef-84e8-b1f9923faf1e","block_type":"box","text":"capacity to meet its financial commitments on the obligation is strong. Within this","page_number":196,"box":{"x":226,"y":508,"width":603,"height":12}},{"id":"b69caf01-3880-49e9-8d71-bc5853e9b0ee","block_type":"box","text":"category, certain obligations are designated with a plus sign (+). This indicates that the","page_number":196,"box":{"x":226,"y":524,"width":648,"height":12}},{"id":"fee0c895-cf5e-4290-a21c-eb97bb2afb77","block_type":"box","text":"obligor’s capacity to meet its financial commitments on these obligations is extremely","page_number":196,"box":{"x":226,"y":539,"width":635,"height":12}},{"id":"97e07097-dab6-4281-a17e-464efbdbecce","block_type":"box","text":"strong.","page_number":196,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"5c13554a-847a-4914-89dd-ff2ad57250f8","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects","page_number":196,"box":{"x":116,"y":578,"width":760,"height":12}},{"id":"3f35f596-5b18-452c-829d-54ddf1911a78","block_type":"box","text":"of changes in circumstances and economic conditions than obligations in higher rating","page_number":196,"box":{"x":226,"y":593,"width":644,"height":13}},{"id":"522c1339-6e65-4a2e-ac0c-00076e27b058","block_type":"box","text":"categories. However, the obligor’s capacity to meet its financial commitments on the","page_number":196,"box":{"x":226,"y":609,"width":629,"height":12}},{"id":"2f6cd188-2016-4c44-a72a-379725b68317","block_type":"box","text":"obligation is satisfactory.","page_number":196,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"87fdd197-f017-41fc-8398-528b7c767e3f","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However,","page_number":196,"box":{"x":116,"y":648,"width":750,"height":12}},{"id":"2167acb9-0be0-4429-a75e-2d7a97345d8c","block_type":"box","text":"adverse economic conditions or changing circumstances are more likely to weaken an","page_number":196,"box":{"x":226,"y":663,"width":639,"height":12}},{"id":"03393823-f4be-45e2-be32-4419fa2094e7","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation.","page_number":196,"box":{"x":226,"y":679,"width":513,"height":12}},{"id":"d18ded6d-14e6-489e-8636-306767d5aea8","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant","page_number":196,"box":{"x":117,"y":702,"width":681,"height":12}},{"id":"a6278df1-54ee-4ccb-a4b5-52c2389c597e","block_type":"box","text":"speculative characteristics. The obligor currently has the capacity to meet its financial","page_number":196,"box":{"x":226,"y":717,"width":632,"height":13}},{"id":"ee12ff9d-0cb7-4b7a-a7a0-c2af29f344af","block_type":"box","text":"commitments; however, it faces major ongoing uncertainties that could lead to the","page_number":196,"box":{"x":226,"y":733,"width":607,"height":12}},{"id":"77eab2ee-c8cd-4825-aad7-e8cb36193229","block_type":"box","text":"obligor’s inadequate capacity to meet its financial commitments.","page_number":196,"box":{"x":226,"y":748,"width":473,"height":13}},{"id":"4357af4b-4d3b-4dc9-80a0-9ff469073799","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent","page_number":196,"box":{"x":117,"y":772,"width":763,"height":12}},{"id":"3d06b89c-0e01-4644-a88f-04fffa4837dd","block_type":"box","text":"upon favorable business, financial, and economic conditions for the obligor to meet its","page_number":196,"box":{"x":226,"y":787,"width":636,"height":12}},{"id":"b7e75e9e-a948-40cb-86bd-5a020c7c9d25","block_type":"box","text":"financial commitments on the obligation.","page_number":196,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"a884cdf0-caa6-4f57-a2f0-6762f9cbdaea","block_type":"box","text":"A-6","page_number":196,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"cb2b7ab0-777c-43ff-852e-7bfc84ccb011","block_type":"box","text":"NM1026U-6042785-196/259","page_number":196,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"efa34187-8c28-41e6-8925-bbcfd8550200","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For","page_number":197,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"9486a7a0-daa9-4067-8f3c-21ed715c8db5","block_type":"box","text":"non-hybrid capital instruments, the ‘D’ rating category is used when payments on an","page_number":197,"box":{"x":226,"y":102,"width":629,"height":13}},{"id":"6634ad24-c006-492a-a2e6-f4deac9af517","block_type":"box","text":"obligation are not made on the date due, unless S&P believes that such payments will","page_number":197,"box":{"x":226,"y":118,"width":643,"height":12}},{"id":"f0298d70-9962-4604-9966-e81e398c685d","block_type":"box","text":"be made within any stated grace period. However, any stated grace period longer than","page_number":197,"box":{"x":226,"y":134,"width":648,"height":12}},{"id":"8c1ece23-2408-4392-99e4-b79b0f94006d","block_type":"box","text":"five business days will be treated as five business days. The ‘D’ rating also will be used","page_number":197,"box":{"x":225,"y":149,"width":653,"height":12}},{"id":"0d6f3787-5791-44f0-895d-50fc64683712","block_type":"box","text":"upon the filing of a bankruptcy petition or the taking of a similar action and where default","page_number":197,"box":{"x":226,"y":165,"width":659,"height":12}},{"id":"993e41f8-2df3-4a5e-90ab-47e6f66af567","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions. A","page_number":197,"box":{"x":226,"y":180,"width":635,"height":12}},{"id":"39e9421a-3177-44fe-ba44-f35b77cbb5e9","block_type":"box","text":"rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":197,"box":{"x":226,"y":196,"width":648,"height":12}},{"id":"ff7448fc-1fd2-48a1-be16-a118704d1929","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":197,"box":{"x":117,"y":223,"width":456,"height":12}},{"id":"ac7cc8d0-b499-4bf7-a40b-2764e6c0ec07","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":197,"box":{"x":116,"y":250,"width":766,"height":12}},{"id":"965cb6d0-80b2-4617-aacd-19f8957a841a","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":197,"box":{"x":117,"y":265,"width":748,"height":12}},{"id":"bdecb30f-e442-4315-9ffd-86a68dce32c6","block_type":"box","text":"an original maturity of more than three years will most likely receive a long-term debt rating. In","page_number":197,"box":{"x":116,"y":281,"width":703,"height":12}},{"id":"8abee159-2c92-4b27-9332-f6f90d5a9c97","block_type":"box","text":"determining which type of rating, if any, to assign, S&P’s analysis will review the following","page_number":197,"box":{"x":116,"y":296,"width":668,"height":12}},{"id":"9dc567b6-8130-424e-93e3-b75ff21287a6","block_type":"box","text":"considerations:","page_number":197,"box":{"x":116,"y":312,"width":118,"height":9}},{"id":"88d0f8f7-f04b-4b9f-aeb4-fdf7de613361","block_type":"box","text":"• Amortization schedule — the larger the final maturity relative to other maturities, the more likely it","page_number":197,"box":{"x":125,"y":339,"width":750,"height":12}},{"id":"a6c9ab34-5110-42da-97ea-33bbc247e82c","block_type":"box","text":"will be treated as a note; and","page_number":197,"box":{"x":149,"y":355,"width":220,"height":11}},{"id":"376ae236-f290-4e95-8b71-65216b76eb17","block_type":"box","text":"• Source of payment — the more dependent the issue is on the market for its refinancing, the more","page_number":197,"box":{"x":125,"y":376,"width":753,"height":12}},{"id":"db6ccd45-88b7-4d63-aafe-9fd84bb92f6b","block_type":"box","text":"likely it will be treated as a note.","page_number":197,"box":{"x":150,"y":391,"width":242,"height":12}},{"id":"ecef1562-a116-451b-a416-a95d0b1b225c","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":197,"box":{"x":116,"y":418,"width":470,"height":12}},{"id":"17739942-b7c4-4ab1-9af1-968d6035970f","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very","page_number":197,"box":{"x":116,"y":444,"width":739,"height":12}},{"id":"a507275a-47b0-4586-bb7b-b11bd44dea3e","block_type":"box","text":"strong capacity to pay debt service is given a plus (+) designation.","page_number":197,"box":{"x":226,"y":458,"width":496,"height":12}},{"id":"120f2e1a-5501-402f-9513-7a2897ecc0de","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse","page_number":197,"box":{"x":116,"y":480,"width":741,"height":12}},{"id":"43afaa40-c76e-42c7-b28d-840644a400a7","block_type":"box","text":"financial and economic changes over the term of the notes.","page_number":197,"box":{"x":225,"y":494,"width":446,"height":12}},{"id":"f72ec1fc-e0e7-43b0-9723-7e4a4202cc5e","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":197,"box":{"x":116,"y":515,"width":482,"height":12}},{"id":"4a484ff2-5acb-4b09-9249-0d23d162f134","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":197,"box":{"x":117,"y":537,"width":750,"height":12}},{"id":"64332c6e-a350-4aae-864c-d914936a48ca","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and","page_number":197,"box":{"x":226,"y":551,"width":620,"height":12}},{"id":"3c759b1a-384a-4973-8f2f-44043e54d15a","block_type":"box","text":"where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":197,"box":{"x":225,"y":565,"width":640,"height":12}},{"id":"6427377c-03ac-4ed9-a8b5-62b16f0456de","block_type":"box","text":"provisions.","page_number":197,"box":{"x":226,"y":579,"width":84,"height":12}},{"id":"e75e43c3-0a57-4f1a-a904-9f9d23890d73","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch”) Credit Ratings Scales","page_number":197,"box":{"x":117,"y":606,"width":483,"height":12}},{"id":"67df1a9f-109e-4bfb-88b0-46d3e649f2e7","block_type":"box","text":"Fitch publishes credit ratings that are forward-looking opinions on the relative ability of an entity or","page_number":197,"box":{"x":117,"y":633,"width":730,"height":12}},{"id":"2f457a91-06cb-4735-916d-2d73520b9678","block_type":"box","text":"obligation to meet financial commitments. Issuer default ratings (IDRs) are assigned to corporations,","page_number":197,"box":{"x":116,"y":649,"width":749,"height":12}},{"id":"8dcc009d-4265-49a2-bf9e-275150b22afd","block_type":"box","text":"sovereign entities, financial institutions such as banks, leasing companies and insurers, and public","page_number":197,"box":{"x":116,"y":664,"width":730,"height":12}},{"id":"4873b49b-1361-431e-b3b4-9581815a4758","block_type":"box","text":"finance entities (local and regional governments). Issue level ratings are also assigned, often include","page_number":197,"box":{"x":116,"y":680,"width":747,"height":12}},{"id":"72f79a0b-0ece-418d-ba7a-9a44accb7077","block_type":"box","text":"an expectation of recovery and may be notched above or below the issuer level rating. Issue ratings","page_number":197,"box":{"x":116,"y":695,"width":741,"height":12}},{"id":"2f1c2b1a-26fb-47da-9449-f014de592f93","block_type":"box","text":"are assigned to secured and unsecured debt securities, loans, preferred stock and other instruments,","page_number":197,"box":{"x":116,"y":711,"width":751,"height":12}},{"id":"ddd67283-d234-4863-973d-a6f4ed3a3fc7","block_type":"box","text":"Structured finance ratings are issue ratings to securities backed by receivables or other financial","page_number":197,"box":{"x":116,"y":726,"width":713,"height":12}},{"id":"2e271ddd-ee2f-4ada-8c5b-4951d868c5e1","block_type":"box","text":"assets that consider the obligations’ relative vulnerability to default.","page_number":197,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"a6b2187c-0c3f-4309-a135-9ccfb8a2cb71","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":197,"box":{"x":117,"y":769,"width":702,"height":12}},{"id":"1d74df52-b3e5-4d30-86eb-4ef9033e4ffc","block_type":"box","text":"financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims","page_number":197,"box":{"x":116,"y":784,"width":756,"height":12}},{"id":"522e3422-cf7b-4086-9de6-851b88ce42e4","block_type":"box","text":"or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include","page_number":197,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"398c906a-00a9-4d1c-8d27-4a8be96b19a8","block_type":"box","text":"a recovery expectation. Credit ratings are used by investors as indications of the likelihood of receiving","page_number":197,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"a63c2e69-ce6f-40a3-9071-f8403f4866d6","block_type":"box","text":"the money owed to them in accordance with the terms on which they invested. The agency’s credit","page_number":197,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"95c595e0-022a-4a8f-aecc-bea7fffff162","block_type":"box","text":"ratings cover the global spectrum of corporate, sovereign financial, bank, insurance, and public finance","page_number":197,"box":{"x":117,"y":846,"width":768,"height":12}},{"id":"1e8e1632-ffe7-4c93-b2a6-e72a0a2c39df","block_type":"box","text":"entities (including supranational and sub-national entities) and the securities or other obligations they","page_number":197,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"1b3f7706-fbe9-44ab-993d-e62ca6f50710","block_type":"box","text":"issue, as well as structured finance securities backed by receivables or other financial assets.","page_number":197,"box":{"x":117,"y":877,"width":698,"height":12}},{"id":"8a3d44a7-884b-4cc7-8fee-21eff6b218e6","block_type":"box","text":"A-7","page_number":197,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"2596f00d-5da7-4679-9b85-dfa057b89c76","block_type":"box","text":"NM1026U-6042785-197/259","page_number":197,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f27dea40-3980-46ca-9511-f75d88d9b25b","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as","page_number":198,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"e6c51da7-d557-4dd2-84ee-0ae1fa7e8e30","block_type":"box","text":"shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative","page_number":198,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"d3169e13-bbd4-43b8-916a-dcfc3db2f5a4","block_type":"box","text":"grade). The terms investment grade and speculative grade are market conventions and do not imply","page_number":198,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"ddc75491-488f-4939-82f7-b6f4cfa1426b","block_type":"box","text":"any recommendation or endorsement of a specific security for investment purposes. Investment grade","page_number":198,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"0fb60421-bcef-4421-84a9-b8933348046e","block_type":"box","text":"categories indicate relatively low to moderate credit risk, while ratings in the speculative categories","page_number":198,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"4b53edea-ee94-42d0-8127-40e15deb9083","block_type":"box","text":"either signal a higher level of credit risk or that a default has already occurred.","page_number":198,"box":{"x":116,"y":165,"width":584,"height":12}},{"id":"47f9e172-4afc-4225-b72e-8be28d126570","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":198,"box":{"x":117,"y":196,"width":765,"height":12}},{"id":"290ee5a2-1bfc-464e-badc-d2921207498f","block_type":"box","text":"page. Such issues are also denoted as ‘NR’.","page_number":198,"box":{"x":117,"y":211,"width":335,"height":12}},{"id":"3dd313f0-6e62-418d-9ad6-d85c2f553ff9","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":198,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"905a0f01-f5fa-4267-873c-e915000137e2","block_type":"box","text":"and are not predictive of a specific frequency of default or loss.","page_number":198,"box":{"x":116,"y":258,"width":471,"height":12}},{"id":"7deffac5-73c4-4143-92de-c41fae555505","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":198,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"3bd14eb6-bb0e-4830-9425-ef270cf4f5d2","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":198,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"4f668394-dcfc-4349-9718-6ab7bc03a38b","block_type":"box","text":"and other market considerations. However, in terms of payment obligation on the rated liability, market","page_number":198,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"fba23603-3f3c-4672-8e3a-66d6c5e3b147","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":198,"box":{"x":117,"y":335,"width":674,"height":12}},{"id":"e58f18ba-c17a-44d1-81e2-67d7e7e31858","block_type":"box","text":"commitment.","page_number":198,"box":{"x":116,"y":351,"width":101,"height":9}},{"id":"2030261d-e45e-4cc0-8339-84e23fb9e8fc","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other","page_number":198,"box":{"x":117,"y":382,"width":709,"height":12}},{"id":"1eeb4e90-4784-4b88-be52-2f5953e53371","block_type":"box","text":"conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked","page_number":198,"box":{"x":116,"y":397,"width":731,"height":12}},{"id":"14e30f55-dbca-443d-8258-e70adeee694e","block_type":"box","text":"bonds).","page_number":198,"box":{"x":117,"y":413,"width":59,"height":12}},{"id":"2d879ebd-b831-419c-91e6-0474f16dd078","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency","page_number":198,"box":{"x":117,"y":444,"width":725,"height":12}},{"id":"2883608b-305d-47e1-ae6d-fb97da2e3e53","block_type":"box","text":"typically rates to the likelihood of non-payment or default in accordance with the terms of that","page_number":198,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"6b11196d-c314-458d-8d1c-2bb43416198a","block_type":"box","text":"instrument’s documentation. In limited cases, Fitch may include additional considerations (","page_number":198,"box":{"x":117,"y":475,"width":670,"height":12}},{"id":"6b9b2421-fe8f-44b8-8bfe-3bec8304f6f4","block_type":"box","text":"i.e.","page_number":198,"box":{"x":788,"y":475,"width":20,"height":9}},{"id":"28c1ede4-ee4f-42e1-a50b-380093648287","block_type":"box","text":"rate to a","page_number":198,"box":{"x":810,"y":475,"width":71,"height":9}},{"id":"b2e7bae1-764a-4a6d-bdf1-0da02df4e368","block_type":"box","text":"higher or lower standard than that implied in the obligation’s documentation).","page_number":198,"box":{"x":117,"y":490,"width":573,"height":12}},{"id":"cea865ed-bd34-4092-8fb9-545bd733ad67","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or","page_number":198,"box":{"x":116,"y":521,"width":719,"height":12}},{"id":"961a6ad5-5771-4764-9f1a-e8a196d2b0a4","block_type":"box","text":"certain note issuance programs or for private ratings. In this case the rating is not published, but only","page_number":198,"box":{"x":116,"y":537,"width":753,"height":12}},{"id":"68da4bff-d282-44d6-9bd9-7a05089f6041","block_type":"box","text":"provided to the issuer or its agents in the form of a rating letter.","page_number":198,"box":{"x":117,"y":552,"width":472,"height":12}},{"id":"b69fb01b-6933-4244-ba93-0a0af81074ab","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope,","page_number":198,"box":{"x":116,"y":583,"width":702,"height":12}},{"id":"5661f3e9-d3a3-4361-ab0c-e76cde2274ec","block_type":"box","text":"including interest strips and return of principal or in other forms of opinions such as credit opinions or","page_number":198,"box":{"x":117,"y":599,"width":751,"height":12}},{"id":"b43497b6-7f36-4f79-9be1-977622faeccb","block_type":"box","text":"rating assessment services. Credit opinions are either a notch- or category-specific view using the","page_number":198,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"a5753c49-ad05-40fd-ade8-75fb2fa6ff9e","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":198,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"bbb9c2b1-383e-451a-a07c-6242acac766d","block_type":"box","text":"standard. Credit opinions will be indicated using a lower case letter symbol combined with either an ‘*’","page_number":198,"box":{"x":116,"y":645,"width":760,"height":12}},{"id":"5464aaf9-3dfc-4993-918f-5dcad809b7c8","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":198,"box":{"x":117,"y":661,"width":743,"height":12}},{"id":"92172bd2-46cc-4944-88fc-b39515233cb2","block_type":"box","text":"but may be monitored if the analytical group believes information will be sufficiently available. Rating","page_number":198,"box":{"x":117,"y":676,"width":742,"height":12}},{"id":"d3a2104d-6b7c-4787-8267-bbc685fe7b1b","block_type":"box","text":"assessment services are a notch-specific view using the primary rating scale of how an existing or","page_number":198,"box":{"x":116,"y":692,"width":729,"height":12}},{"id":"e3ec0f3d-682d-4d7b-89cb-43e184540fa8","block_type":"box","text":"potential rating may be changed by a given set of hypothetical circumstances. While credit opinions","page_number":198,"box":{"x":117,"y":707,"width":736,"height":12}},{"id":"03260887-dbf4-41b6-b63b-301ac9542f08","block_type":"box","text":"and rating assessment services are point-in-time and are not monitored, they may have a directional","page_number":198,"box":{"x":116,"y":723,"width":745,"height":12}},{"id":"98cdfcd6-ffe5-4895-a0c7-3856ab531e8b","block_type":"box","text":"watch or outlook assigned, which can signify the trajectory of the credit profile.","page_number":198,"box":{"x":116,"y":738,"width":579,"height":12}},{"id":"b6904b38-e3e0-45df-bfd4-707dbde4faa3","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":198,"box":{"x":117,"y":769,"width":629,"height":12}},{"id":"87a2552a-488e-4322-ac38-9a261401c06c","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative","page_number":198,"box":{"x":117,"y":800,"width":677,"height":12}},{"id":"88aa2ceb-e80e-490b-8857-951bdafb11ce","block_type":"box","text":"vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, a","page_number":198,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"f4e2d8a9-e0d3-4735-ac74-82fb3ebbb098","block_type":"box","text":"measure of recovery given default on that liability is also included in the rating assessment. This","page_number":198,"box":{"x":117,"y":831,"width":716,"height":12}},{"id":"e6ac80f5-2e73-4e67-b59e-dd4776268d6d","block_type":"box","text":"notably applies to covered bonds ratings, which incorporate both an indication of the probability of","page_number":198,"box":{"x":117,"y":847,"width":729,"height":12}},{"id":"657ac6ee-a7b6-4ede-b4c3-bea2ce2508ba","block_type":"box","text":"default and of the recovery given a default of this debt instrument. On the contrary, Ratings of","page_number":198,"box":{"x":116,"y":862,"width":699,"height":12}},{"id":"6346befc-490b-4987-ad77-2ab9e8dcd3d4","block_type":"box","text":"debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":198,"box":{"x":116,"y":878,"width":642,"height":12}},{"id":"a82ea5dc-d34c-4323-99ea-06d25ac5c3e1","block_type":"box","text":"A-8","page_number":198,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"2c9cf514-f427-4077-8f33-f679c548ebf7","block_type":"box","text":"NM1026U-6042785-198/259","page_number":198,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6da4584a-110b-4986-9375-bcf49d82e18b","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average","page_number":199,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"daf8c30b-186a-458f-a5d7-e07264d77528","block_type":"box","text":"recovery. Individual obligations can be assigned ratings higher, lower, or the same as that entity’s","page_number":199,"box":{"x":117,"y":103,"width":728,"height":12}},{"id":"23fc11a1-58c5-4bcb-92cf-a559316cbb37","block_type":"box","text":"issuer rating or issuer default rating (“IDR”), based on their relative ranking, relative vulnerability to","page_number":199,"box":{"x":117,"y":118,"width":733,"height":12}},{"id":"48d41aa7-d7cc-420b-a12f-7f3f1f2d7744","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":199,"box":{"x":116,"y":134,"width":347,"height":12}},{"id":"fe9f4062-5b4e-4ac7-ab94-d1e4f6cdc86e","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower,","page_number":199,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"c1b282ab-6998-4730-9246-006c4e3c850a","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":199,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"171e97a6-9a10-4fd6-84f3-4c6fd9e12a13","block_type":"box","text":"IDR. At the lower end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to","page_number":199,"box":{"x":117,"y":196,"width":756,"height":12}},{"id":"eb64fc24-8977-4bfa-9bd1-500c7aba6e24","block_type":"box","text":"complement issuer and obligation ratings.","page_number":199,"box":{"x":116,"y":211,"width":315,"height":12}},{"id":"e1c6b03f-9605-4dc2-9900-5d4b7078efc3","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":199,"box":{"x":117,"y":242,"width":412,"height":12}},{"id":"eadc2b7d-7bdb-44ad-a4c1-a0d94c8f6509","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of default risk. They","page_number":199,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"778e4e8d-ede4-4529-93b0-fddb1c53ef65","block_type":"box","text":"are assigned only in cases of exceptionally strong capacity for payment of financial","page_number":199,"box":{"x":226,"y":288,"width":619,"height":12}},{"id":"560f5cc4-e6ee-4ecf-83cf-bb50f55df8a4","block_type":"box","text":"commitments. This capacity is highly unlikely to be adversely affected by foreseeable","page_number":199,"box":{"x":226,"y":302,"width":636,"height":13}},{"id":"91c624c4-6aa0-451b-8e56-de19cf773f5e","block_type":"box","text":"events.","page_number":199,"box":{"x":226,"y":318,"width":58,"height":9}},{"id":"44c36197-e1de-4a5d-8263-527960382e85","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low default risk. They","page_number":199,"box":{"x":116,"y":340,"width":762,"height":13}},{"id":"313aa2e1-f3f4-40bc-85ae-540ca1fd2270","block_type":"box","text":"indicate very strong capacity for payment of financial commitments. This capacity is not","page_number":199,"box":{"x":226,"y":355,"width":652,"height":13}},{"id":"3ae05e7c-1d33-495f-80de-4c508b45e663","block_type":"box","text":"significantly vulnerable to foreseeable events.","page_number":199,"box":{"x":226,"y":370,"width":343,"height":12}},{"id":"7715cb15-8bcc-4480-9953-6380e5a27ccd","block_type":"box","text":"A High Credit Quality. ‘A’ ratings denote expectations of low default risk. The capacity for","page_number":199,"box":{"x":116,"y":393,"width":757,"height":12}},{"id":"fef9c372-2b03-4776-85f3-21c417f83d86","block_type":"box","text":"payment of financial commitments is considered strong. This capacity may,","page_number":199,"box":{"x":226,"y":408,"width":562,"height":12}},{"id":"b1d99f1d-c759-4ef5-a126-1159f56b042f","block_type":"box","text":"nevertheless, be more vulnerable to adverse business or economic conditions than is","page_number":199,"box":{"x":226,"y":423,"width":638,"height":11}},{"id":"9cde6ad3-21b8-4272-aeb9-6240e1d66326","block_type":"box","text":"the case for higher ratings.","page_number":199,"box":{"x":225,"y":438,"width":204,"height":12}},{"id":"53bf1b9a-83ec-48ea-8a4f-5b1d6309c4bf","block_type":"box","text":"BBB Good Credit Quality. ‘BBB’ ratings indicate that expectations of default risk are currently","page_number":199,"box":{"x":117,"y":461,"width":764,"height":12}},{"id":"47cda47a-329f-49ce-aeb1-aa40f4c8d5b4","block_type":"box","text":"low. The capacity for payment of financial commitments is considered adequate, but","page_number":199,"box":{"x":226,"y":476,"width":629,"height":12}},{"id":"f88dabed-f114-4bd5-a3ec-f634949bf528","block_type":"box","text":"adverse business or economic conditions are more likely to impair this capacity.","page_number":199,"box":{"x":226,"y":491,"width":597,"height":12}},{"id":"705cd5ba-6c26-4506-a340-77e749d0341c","block_type":"box","text":"BB Speculative. ‘BB’ ratings indicate an elevated vu","page_number":199,"box":{"x":117,"y":514,"width":457,"height":12}},{"id":"e8adfaa8-0f66-4437-8517-8c1eae7378e4","block_type":"box","text":"lnerability to default risk, particularly in the","page_number":199,"box":{"x":576,"y":514,"width":308,"height":12}},{"id":"951418f8-828d-46e3-abea-e585c0de52e6","block_type":"box","text":"event of adverse changes in business or economic conditions over time; however,","page_number":199,"box":{"x":226,"y":529,"width":601,"height":12}},{"id":"389b2629-c0b7-4502-add0-a5f07de1eb8b","block_type":"box","text":"business or financial flexibility exists that s","page_number":199,"box":{"x":226,"y":544,"width":305,"height":12}},{"id":"ae874aa4-f134-4c17-a3ce-2de176760466","block_type":"box","text":"upports the servicing of financial commitments.","page_number":199,"box":{"x":533,"y":544,"width":345,"height":12}},{"id":"690f71f0-159e-41c8-8124-c61238e49f76","block_type":"box","text":"B Highly Speculative. ‘B’ ratings indicate that","page_number":199,"box":{"x":117,"y":567,"width":417,"height":12}},{"id":"549c1f5b-c927-4944-abe6-05caafcbb62a","block_type":"box","text":"t material default risk is present, but a limited","page_number":199,"box":{"x":534,"y":567,"width":326,"height":12}},{"id":"1ed193cc-e5a5-4d52-a68b-7712d922853d","block_type":"box","text":"margin of safety remains. Financial co","page_number":199,"box":{"x":226,"y":582,"width":276,"height":12}},{"id":"1d843db4-10b7-4d4a-bc3a-3e167dd623f3","block_type":"box","text":"mmitments are currently being met; however,","page_number":199,"box":{"x":503,"y":582,"width":334,"height":12}},{"id":"0734bc5a-a65a-4202-8d89-2c9b362a13c9","block_type":"box","text":"capacity for continued payment is vulner","page_number":199,"box":{"x":226,"y":597,"width":293,"height":12}},{"id":"40e212e3-2845-4959-aaf4-143e90c9e8d0","block_type":"box","text":"able to deterioration in the business and","page_number":199,"box":{"x":519,"y":597,"width":296,"height":9}},{"id":"f50af87b-581d-4d00-9db8-d88d96ff5065","block_type":"box","text":"economic environment.","page_number":199,"box":{"x":226,"y":612,"width":174,"height":9}},{"id":"96bec3d0-f57d-4f09-ab33-0ceecd986d5a","block_type":"box","text":"CCC Substantial Credit Risk. ‘CCC’ ratings indicate very low margin for safety. Default is a","page_number":199,"box":{"x":117,"y":635,"width":744,"height":12}},{"id":"cf16df9d-5e29-4b03-80ec-5abce7e96e3f","block_type":"box","text":"real possibility.","page_number":199,"box":{"x":226,"y":650,"width":114,"height":12}},{"id":"09c1600c-d366-4fc9-b21d-42c738d1357d","block_type":"box","text":"CC Very High Levels of Credit Risk. ‘CC’ ratings indicate default of some kind appears","page_number":199,"box":{"x":117,"y":673,"width":720,"height":12}},{"id":"57b937d3-abcb-4480-86d2-216cb9da80a5","block_type":"box","text":"probable.","page_number":199,"box":{"x":226,"y":688,"width":68,"height":11}},{"id":"c0a14aa6-7991-4355-baab-e86496239ac7","block_type":"box","text":"C Exceptionally High Levels of Credit Risk. ‘C’ ratings indicate default or default-like","page_number":199,"box":{"x":117,"y":710,"width":713,"height":12}},{"id":"d3c832bd-0338-4bc8-863e-ba04da6e4321","block_type":"box","text":"process has begun, or for a closed funding vehicle, payment capacity is irrevocably","page_number":199,"box":{"x":226,"y":725,"width":617,"height":12}},{"id":"7bf8d90e-0eda-425d-83a4-39620542389d","block_type":"box","text":"impaired.","page_number":199,"box":{"x":226,"y":740,"width":67,"height":12}},{"id":"1fa8fb90-af9f-4b5c-b791-4245ca8b7fc3","block_type":"box","text":"RD Restricted Default. ‘RD’ ratings indicate an i","page_number":199,"box":{"x":117,"y":763,"width":416,"height":12}},{"id":"0dbb68e3-c8ba-40a7-bb3c-3e0bf5ecfc1c","block_type":"box","text":"ssuer that in Fitch’s opinion has experienced an","page_number":199,"box":{"x":535,"y":763,"width":338,"height":12}},{"id":"a2c91e63-f055-4c84-b31c-76b0aa7ceb7a","block_type":"box","text":"uncured payment default or distressed debt","page_number":199,"box":{"x":226,"y":778,"width":309,"height":12}},{"id":"9e01e2df-cabb-4db1-a987-166e1bbf9c4c","block_type":"box","text":"exchange on a bond, loan or other material","page_number":199,"box":{"x":540,"y":778,"width":305,"height":12}},{"id":"097aef78-fca1-4839-a96e-f8af98d09b01","block_type":"box","text":"financial obligation, but has not entered into","page_number":199,"box":{"x":225,"y":793,"width":309,"height":12}},{"id":"10f8a7ac-cf0a-4d97-810b-3dd88b579f9a","block_type":"box","text":"bankruptcy filings, administration, receivership,","page_number":199,"box":{"x":540,"y":793,"width":330,"height":12}},{"id":"4a5b68c5-d811-4abf-b6c7-da4bacfb2318","block_type":"box","text":"liquidation, or other formal winding-up proc","page_number":199,"box":{"x":226,"y":808,"width":303,"height":12}},{"id":"ffc75617-a857-4922-b547-f0fcb14956c2","block_type":"box","text":"edure, and has not otherwise ceased operating.","page_number":199,"box":{"x":529,"y":808,"width":338,"height":12}},{"id":"423de70a-c780-45fd-9dca-2d46d0065792","block_type":"box","text":"D Default. ‘D’ ratings indicate an issuer that in Fitch’s opinion has entered into bankruptcy","page_number":199,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"996d65fa-b4b5-4480-8ed9-b040c44b161f","block_type":"box","text":"filings, administration, receivership, liquidation or other formal winding-up procedure or","page_number":199,"box":{"x":225,"y":846,"width":647,"height":12}},{"id":"4d6470ef-4831-4f4e-9428-3607fdefeb7b","block_type":"box","text":"that has otherwise ceased business and debt is still outstanding.","page_number":199,"box":{"x":225,"y":861,"width":484,"height":12}},{"id":"a7df208e-972b-49bd-94cb-b04c8f4873da","block_type":"box","text":"A-9","page_number":199,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"de682d06-4f1e-4310-a50b-d422d768f513","block_type":"box","text":"NM1026U-6042785-199/259","page_number":199,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3a1f6f24-496d-4af8-9c40-68a010c35d12","block_type":"box","text":"Within rating categories, Fitch may use modifiers. The modifiers “+” or “-” may be appended to a rating","page_number":200,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"c7702f99-60dd-44dc-a99e-0dae1dc1a66e","block_type":"box","text":"to denote relative status within major rating categories.","page_number":200,"box":{"x":116,"y":103,"width":411,"height":12}},{"id":"24adfa23-5364-4522-a5de-1d43bce9eabe","block_type":"box","text":"For example, the rating category ‘AA’ has three notch-specific rating levels (‘AA+’; ‘AA’; ‘AA–’; each a","page_number":200,"box":{"x":117,"y":134,"width":755,"height":12}},{"id":"63cc3b3e-d9ae-4f08-a5fb-611a75da2fb6","block_type":"box","text":"rating level). Such suffixes are not added to ‘AAA’ ratings and ratings below the ‘CCC’ category. For","page_number":200,"box":{"x":117,"y":149,"width":745,"height":12}},{"id":"4d522158-3d72-40ba-9ea5-d81f0c8d9b9d","block_type":"box","text":"the short-term rating category of ‘F1’, a ‘+’ may be appended.","page_number":200,"box":{"x":116,"y":165,"width":461,"height":12}},{"id":"035e1f18-1972-482f-8db4-e92b4396eb53","block_type":"box","text":"Description of Fitch’s Short-Term Ratings Assigned to Issuers and Obligations","page_number":200,"box":{"x":117,"y":196,"width":634,"height":12}},{"id":"67be459f-bf07-4b07-830b-4c9914001e49","block_type":"box","text":"A short-term issuer or obligation rating is based in all cases on the short-term vulnerability to default of","page_number":200,"box":{"x":116,"y":227,"width":764,"height":12}},{"id":"aac4757e-8634-40d3-89e0-314ec52a1b88","block_type":"box","text":"the rated entity and relates to the capacity to meet financial obligations in accordance with the","page_number":200,"box":{"x":116,"y":242,"width":701,"height":12}},{"id":"899397be-e92a-4077-84d7-b8df0f27c9ec","block_type":"box","text":"documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss","page_number":200,"box":{"x":116,"y":258,"width":753,"height":12}},{"id":"a7753225-8325-427c-9697-590e4b0c683a","block_type":"box","text":"severity. Short-term ratings are assigned to obligations whose initial maturity is viewed as “short term”","page_number":200,"box":{"x":116,"y":273,"width":760,"height":12}},{"id":"1d389f7d-b6b3-477c-ba50-13ca4e05f04d","block_type":"box","text":"based on market convention. Typically, this means up to 13 months for corporate, sovereign, and","page_number":200,"box":{"x":117,"y":289,"width":726,"height":12}},{"id":"e70a6d81-f6dc-494d-af0e-a8c6a8364608","block_type":"box","text":"structured obligations and up to 36 months for obligations in U.S. public finance markets.","page_number":200,"box":{"x":116,"y":304,"width":664,"height":12}},{"id":"13f4e2c5-2f59-4727-a396-585343899517","block_type":"box","text":"Fitch short-term ratings are as follows:","page_number":200,"box":{"x":117,"y":335,"width":289,"height":12}},{"id":"96dfc115-055e-49a3-8a74-e770d473838d","block_type":"box","text":"F1 Highest Short-Term Credit Quality. Indicates the strongest intrinsic capacity for timely","page_number":200,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"04488eb3-a0f0-4482-bc26-c9a4a141a6cd","block_type":"box","text":"payment of financial commitments; may have an added “+” to denote any exceptionally","page_number":200,"box":{"x":226,"y":382,"width":650,"height":12}},{"id":"385c6d77-8f6c-45e8-91c9-e7391056c82e","block_type":"box","text":"strong credit feature.","page_number":200,"box":{"x":226,"y":397,"width":158,"height":12}},{"id":"3d291a26-6cc6-4e3c-a3a5-309e1cbf8c00","block_type":"box","text":"F2 Good Short-Term Credit Quality. Good intrinsic capacity for timely payment of financial","page_number":200,"box":{"x":117,"y":420,"width":757,"height":12}},{"id":"0a64746b-05f9-48d2-bd78-8c509826a4c2","block_type":"box","text":"commitments.","page_number":200,"box":{"x":226,"y":436,"width":109,"height":9}},{"id":"97c3df8e-acd3-45e3-a85a-a3be25042547","block_type":"box","text":"F3 Fair Short-Term Credit Quality. 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Minimal capacity for timely payment of financial","page_number":200,"box":{"x":117,"y":498,"width":758,"height":12}},{"id":"4bf15ce7-da37-4d5a-9e35-88e2375b757f","block_type":"box","text":"commitments, plus heightened vulnerability to near term adverse changes in financial","page_number":200,"box":{"x":226,"y":513,"width":638,"height":12}},{"id":"5e36b102-33c2-4c9f-ad6c-c2e31355eb64","block_type":"box","text":"and economic conditions.","page_number":200,"box":{"x":226,"y":529,"width":194,"height":9}},{"id":"6e592e7c-621c-4e74-b528-54650b32caa4","block_type":"box","text":"C High Short-Term Default Risk. Default is a real possibility.","page_number":200,"box":{"x":117,"y":552,"width":541,"height":12}},{"id":"6a7d03cd-6206-46ec-b039-1c247ae36210","block_type":"box","text":"RD Restricted Default. 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The benchmark policy also may apply to","page_number":206,"box":{"x":170,"y":802,"width":685,"height":10}},{"id":"ee75c897-687f-4321-8cf1-5d7a328a82ae","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":206,"box":{"x":170,"y":815,"width":709,"height":10}},{"id":"1c2cbe72-358f-46bf-9561-8cfa29f59fff","block_type":"box","text":"conduct issuer engagements. This document also includes BAIS’ decarbonization policy, which covers holdings in","page_number":206,"box":{"x":170,"y":828,"width":676,"height":10}},{"id":"b92519aa-706f-4c14-aec8-ba5252171a27","block_type":"box","text":"BlackRock active funds that have climate and decarbonization objectives in addition to financial objectives.","page_number":206,"box":{"x":171,"y":841,"width":631,"height":9}},{"id":"eda4947a-fc2f-4774-af8f-3cdd6d6e865b","block_type":"box","text":"2","page_number":206,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"c016852b-dc73-4ee3-b9b4-acc6a2c455a7","block_type":"box","text":"BlackRock segmented active and index equity investment functions, including stewardship, in January 2025 as part of a","page_number":206,"box":{"x":171,"y":854,"width":709,"height":9}},{"id":"5d743d46-febf-4cce-8f0f-8c859787cc89","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":206,"box":{"x":170,"y":867,"width":692,"height":9}},{"id":"206f7d07-cc16-4242-b761-3bf7905746e9","block_type":"box","text":"there are two stewardship teams, which operate independently of one another and have separate voting policies.","page_number":206,"box":{"x":170,"y":880,"width":669,"height":9}},{"id":"90b3dfda-efa0-4a93-bf12-c5b08414a803","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":206,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f095f628-2dc1-4b1e-be04-4ed7f31d1cf3","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":206,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"ab9593ea-2334-4629-84ea-cdedabffc031","block_type":"box","text":"3","page_number":206,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"b27a6a60-04ed-4f30-9301-8031874d5bb6","block_type":"box","text":"NM1026U-6042785-206/259","page_number":206,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c07bdca7-8bd8-441e-967e-80eecb8a2702","block_type":"box","text":"Introduction to BlackRock","page_number":207,"box":{"x":396,"y":87,"width":213,"height":10}},{"id":"d07a19a6-0132-45a8-afd4-2f8a994165c5","block_type":"box","text":"BlackRock’s mission is to help more people invest","page_number":207,"box":{"x":117,"y":118,"width":367,"height":12}},{"id":"efdc5319-60ee-455c-9111-c1fe1bcdb0ef","block_type":"box","text":"better. The money BlackRock manages is not its own","page_number":207,"box":{"x":485,"y":118,"width":392,"height":12}},{"id":"40a687d3-e701-46bf-b71d-8e81b3227aa2","block_type":"box","text":"— it belongs to BlackRock’s clients, many of w","page_number":207,"box":{"x":116,"y":133,"width":339,"height":12}},{"id":"e3be837b-ed32-4376-8d85-989b76c7726c","block_type":"box","text":"hom make their own asset allocation and portfolio","page_number":207,"box":{"x":456,"y":133,"width":365,"height":12}},{"id":"23130537-ef44-4272-be87-5bfe37e8117b","block_type":"box","text":"construction decisions. As a fiduciary, BlackRock in","page_number":207,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"dcd0405a-cf3a-4dd0-ac7a-78e727cb6cfe","block_type":"box","text":"vests on clients’ behalf to help them meet their","page_number":207,"box":{"x":490,"y":149,"width":342,"height":12}},{"id":"cfdf6865-251c-4665-b596-253292f7d0a4","block_type":"box","text":"investment objectives. The firm does this by underst","page_number":207,"box":{"x":117,"y":164,"width":378,"height":12}},{"id":"530460b4-0df3-4c1e-bb6f-95f66760b09f","block_type":"box","text":"anding clients’ long-term investment objectives and","page_number":207,"box":{"x":495,"y":164,"width":376,"height":12}},{"id":"788f3ebb-89d7-445d-b1e4-7ce50d148783","block_type":"box","text":"offering choice on how and where they wish to invest","page_number":207,"box":{"x":116,"y":180,"width":385,"height":12}},{"id":"fed63ea1-2173-4d3f-8318-0e0894ac5560","block_type":"box","text":"t their money. BlackRock then helps clients seek the","page_number":207,"box":{"x":501,"y":180,"width":380,"height":12}},{"id":"3a80dd3d-51ec-4089-acae-4565dc761625","block_type":"box","text":"best risk-adjusted returns based on those choices,","page_number":207,"box":{"x":117,"y":195,"width":364,"height":12}},{"id":"49b36db5-a5f6-44ac-8cd4-aa657a3edc19","block_type":"box","text":"underpinning this work with research, data and","page_number":207,"box":{"x":482,"y":195,"width":350,"height":12}},{"id":"8f0f479e-9449-489a-b953-0586221c0d45","block_type":"box","text":"analytics.","page_number":207,"box":{"x":116,"y":211,"width":73,"height":12}},{"id":"891e060b-b012-434c-a7fa-10ad55e790cf","block_type":"box","text":"At BlackRock, investment stewardship is core to our role as an asset manager and a fiduciary to our","page_number":207,"box":{"x":116,"y":241,"width":748,"height":12}},{"id":"2d50b534-75bc-432e-850e-f9d92d6c283d","block_type":"box","text":"clients. As stewards of our clients’ assets, we engage with companies to discuss the corporate","page_number":207,"box":{"x":116,"y":257,"width":706,"height":12}},{"id":"0ef1e6bd-4832-4d69-8499-3ea1d16aecb3","block_type":"box","text":"governance and business practices that, in our experience, support companies in delivering durable,","page_number":207,"box":{"x":116,"y":272,"width":751,"height":12}},{"id":"7c0ac80a-04b5-4c8c-9050-8dee6212477c","block_type":"box","text":"risk-adjusted financial returns over time. We are committed to building strong relationships through","page_number":207,"box":{"x":117,"y":288,"width":736,"height":12}},{"id":"7bca6673-9661-4187-89b2-3095856f2767","block_type":"box","text":"constructive, ongoing dialogue with the boards and executive management of the companies in which","page_number":207,"box":{"x":116,"y":303,"width":760,"height":12}},{"id":"c932ec43-99dd-43c0-a6d0-d578bcc05408","block_type":"box","text":"our clients are invested.","page_number":207,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"808a3845-2eed-4e2d-ad40-818356b6c537","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":207,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"ad26966a-ffa1-44b7-ad31-20959eb14b30","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management","page_number":207,"box":{"x":117,"y":388,"width":764,"height":12}},{"id":"dcb4ae83-478b-44c3-b268-191c03b3e1f0","block_type":"box","text":"Group and manages BlackRock’s stewardship engagement and voting on behalf of clients invested in","page_number":207,"box":{"x":117,"y":403,"width":758,"height":12}},{"id":"08c27569-e64b-468f-bdc8-9fd98c036c59","block_type":"box","text":"active strategies globally. BAIS is also responsible for engagement with issuers in index fixed income","page_number":207,"box":{"x":116,"y":419,"width":755,"height":12}},{"id":"49b77b08-4d03-4124-88e6-cc5982ac237f","block_type":"box","text":"strategies, where appropriate. Our activities are informed by these Global Engagement and Voting","page_number":207,"box":{"x":116,"y":434,"width":735,"height":12}},{"id":"a7c2afbe-d89c-406d-a3c0-a881cccaa923","block_type":"box","text":"Guidelines (the “Guidelines”) and insights from active investment analysts and portfolio managers, with","page_number":207,"box":{"x":117,"y":450,"width":768,"height":12}},{"id":"43be7d0d-accc-45dd-8b18-3d45e86c638f","block_type":"box","text":"whom we work closely in engaging companies and voting at shareholder meetings.","page_number":207,"box":{"x":116,"y":465,"width":622,"height":12}},{"id":"207827c6-94a0-4213-9c3b-f7bfdbf5ff98","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within","page_number":207,"box":{"x":117,"y":496,"width":680,"height":12}},{"id":"5d991197-29f0-4d9e-ade9-c6c901e4ba8e","block_type":"box","text":"fundamental active investing.","page_number":207,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"a1b7630c-3482-42ae-aadb-3ab3b58ffb46","block_type":"box","text":"3","page_number":207,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"373f3f37-1242-4bf7-af46-e9bf209203bc","block_type":"box","text":"Through direct dialogue with company leadership, we seek to","page_number":207,"box":{"x":339,"y":511,"width":466,"height":12}},{"id":"7a5f969f-5002-452f-99bc-243032ff9c32","block_type":"box","text":"understand their businesses and how they manage risks and opportunities to deliver durable, risk","page_number":207,"box":{"x":117,"y":527,"width":727,"height":12}},{"id":"93788896-e29c-4e85-a62e-7b5b287dc7f1","block_type":"box","text":"adjusted financial returns. Portfolio managers and stewardship specialists may engage jointly or","page_number":207,"box":{"x":116,"y":542,"width":716,"height":12}},{"id":"59b38db5-03fc-4509-808b-be7aa15ac7e1","block_type":"box","text":"independently on material corporate governance matters. Our discussions focus on topics relevant to a","page_number":207,"box":{"x":117,"y":558,"width":769,"height":12}},{"id":"a30dbc72-7c71-48e4-9189-442b1d04eeeb","block_type":"box","text":"company’s success over time, including governance and leadership, corporate strategy, capital","page_number":207,"box":{"x":116,"y":573,"width":711,"height":12}},{"id":"23ea2754-36d5-4a58-9197-d174ef9f2de1","block_type":"box","text":"structure and financial performance, operations and material sustainability-related risks, as well as","page_number":207,"box":{"x":116,"y":589,"width":734,"height":12}},{"id":"3268de52-4a24-48d9-ab56-2f408752d874","block_type":"box","text":"macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are","page_number":207,"box":{"x":117,"y":604,"width":717,"height":12}},{"id":"c02cc1d5-8979-46ce-a762-9e815f709726","block_type":"box","text":"generally supportive of management teams that have a track record of financial value creation. We aim","page_number":207,"box":{"x":116,"y":620,"width":770,"height":12}},{"id":"15ae0fc1-56f3-4e46-bac7-eba388c2f97f","block_type":"box","text":"to build and maintain strong relationships with company leadership based on open dialogue and","page_number":207,"box":{"x":116,"y":635,"width":717,"height":12}},{"id":"52117f2c-b9a0-45ff-8b52-1d3428e1c19e","block_type":"box","text":"mutual respect.","page_number":207,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"f0c747d2-f47b-4b99-8eac-d248d9b49454","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the","page_number":207,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"dae8f602-a1fe-4164-919f-b6bae29250bb","block_type":"box","text":"latitude each portfolio manager has to make independent voting decisions on their holdings. For","page_number":207,"box":{"x":117,"y":697,"width":711,"height":12}},{"id":"4be44d87-dbe2-4984-914f-add5c502d4c1","block_type":"box","text":"example, BAIS will generally vote the holdings in Systematic Active Equity portfolios in accordance","page_number":207,"box":{"x":116,"y":712,"width":732,"height":12}},{"id":"3863d5b0-a29d-4ece-9324-6d834ce16249","block_type":"box","text":"with these guidelines. We provide voting recommendations to fundamental equity portfolio managers,","page_number":207,"box":{"x":116,"y":728,"width":751,"height":12}},{"id":"f785da97-87f0-4212-933d-4f8df76a3b14","block_type":"box","text":"who may determine to vote differently based on each portfolio’s investment objectives and strategy.","page_number":207,"box":{"x":116,"y":743,"width":737,"height":12}},{"id":"7f757b12-d0e6-4ef6-b3fb-5b9af7cd45b5","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":207,"box":{"x":116,"y":774,"width":749,"height":12}},{"id":"a884f98f-28e8-4745-9e59-680a3a4a2d7a","block_type":"box","text":"management teams and board directors","page_number":207,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"656627f8-feb8-46f2-b543-7fa6708cdac7","block_type":"box","text":"4","page_number":207,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"f087ff8a-9dc9-4292-aae2-bca9d7a71a72","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We","page_number":207,"box":{"x":424,"y":790,"width":456,"height":12}},{"id":"444290ac-9c50-4fa1-b045-085b0a42cadf","block_type":"box","text":"3","page_number":207,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"06eafa40-7e31-44fb-b74d-8cc9989379b0","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":207,"box":{"x":170,"y":815,"width":660,"height":9}},{"id":"68476468-0c04-4911-b9ee-3bbedb026d53","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":207,"box":{"x":170,"y":828,"width":695,"height":9}},{"id":"895395e9-9423-4306-80f2-d140275b504e","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":207,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"b04be2ce-86c2-45ea-a2fd-aaa9c6b2274c","block_type":"box","text":"of changing or influencing control of the company.","page_number":207,"box":{"x":170,"y":853,"width":295,"height":10}},{"id":"65f34e8c-5f7d-40d4-a4f4-a84b60e0d98e","block_type":"box","text":"4","page_number":207,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"6f840ba9-51fe-4751-8565-4d4f89fdc93e","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory boards","page_number":207,"box":{"x":171,"y":866,"width":710,"height":10}},{"id":"9b475e7b-feed-4d62-b869-e44088718b29","block_type":"box","text":"and their members, where relevant.","page_number":207,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"95baf2b5-7fce-4259-8418-70fe8a2658eb","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":207,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"d02095d6-eae5-4c1b-8ffc-1461eb0a6fba","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":207,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"6b2f62ec-2002-4fe2-bcfb-84b7729eadf4","block_type":"box","text":"4","page_number":207,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"177c4f81-eacc-4884-81f9-d463cf67220c","block_type":"box","text":"NM1026U-6042785-207/259","page_number":207,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0b8c1438-2108-4507-af73-2c7052a6fc2a","block_type":"box","text":"recognize that accepted corporate governance norms can differ across markets, and believe these","page_number":208,"box":{"x":117,"y":87,"width":736,"height":12}},{"id":"b783e649-f9a2-4959-a958-250dc2f4eef4","block_type":"box","text":"guidelines represent globally applicable elements of governance that support a company’s ability to","page_number":208,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"03edc9b6-f393-44a9-81cb-03e5dd41312f","block_type":"box","text":"manage material risks and opportunities and deliver financial returns to investors. Generally, we","page_number":208,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"4d79765a-d938-4bf5-bfe5-64a841fe2a63","block_type":"box","text":"believe companies should observe accepted corporate governance norms within their local markets or,","page_number":208,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"52f94c7b-a1d7-4783-9612-590e4170f198","block_type":"box","text":"particularly in markets without well-established norms, aspire to widely recognized international best","page_number":208,"box":{"x":117,"y":149,"width":746,"height":12}},{"id":"840f97df-62be-428a-9702-23f969e0254e","block_type":"box","text":"practices. As one of many minority shareholders, BlackRock cannot – and does not try to – direct a","page_number":208,"box":{"x":117,"y":165,"width":739,"height":12}},{"id":"e891c545-5d5a-402b-87f7-6f33b818b3ff","block_type":"box","text":"company’s strategy or its implementation. We look to companies to provide disclosures that explain","page_number":208,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"f468c735-876f-451a-b4ef-13ccd0f295c0","block_type":"box","text":"how their approach to corporate governance best aligns with the financial interests of their investors.","page_number":208,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"7b906abf-2509-49cc-a737-bb3765b76e38","block_type":"box","text":"Our approach to stewardship within active equities","page_number":208,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"3054ab46-8990-46cf-b6a7-04721a894938","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":208,"box":{"x":116,"y":265,"width":713,"height":12}},{"id":"0f28aef4-c14b-493e-a225-f9dd6f2e3c62","block_type":"box","text":"corporate governance. The voting rights attached to clients’ holdings are an important mechanism for","page_number":208,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"0b8a55ad-0231-4b49-a9b5-86a3af0d3230","block_type":"box","text":"investors to express support for, or concern about, a company’s performance. As a fiduciary,","page_number":208,"box":{"x":117,"y":296,"width":692,"height":12}},{"id":"a1abea34-31e3-441b-b70a-b97d00fc36ff","block_type":"box","text":"BlackRock is legally required to make proxy voting determinations, on behalf of clients who have","page_number":208,"box":{"x":117,"y":312,"width":720,"height":12}},{"id":"1f9c5201-6585-4726-b15a-0c5238dfdf57","block_type":"box","text":"delegated voting authority to us, in a manner consistent with BlackRock’s contractual arrangements","page_number":208,"box":{"x":116,"y":327,"width":743,"height":12}},{"id":"ec2e53bb-4dcc-4c99-9b9a-9ea7d626758e","block_type":"box","text":"with clients and funds.","page_number":208,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"ec40c9bd-f46b-42af-98ab-e4c8440ae2c7","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As","page_number":208,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"36aa4cb1-63cc-4538-b399-aedca50b8504","block_type":"box","text":"indicated below, we may vote against management recommendations when we have concerns about","page_number":208,"box":{"x":117,"y":389,"width":755,"height":12}},{"id":"85a969e8-4d2a-43cf-9edd-2a1a5bc11c6e","block_type":"box","text":"how companies are serving the financial interests of our clients as their shareholders. BAIS takes a","page_number":208,"box":{"x":117,"y":405,"width":740,"height":12}},{"id":"df52259e-0d3e-4fa5-b1b3-a466327215b6","block_type":"box","text":"globally consistent approach to voting but considers the different corporate governance regulations and","page_number":208,"box":{"x":116,"y":420,"width":772,"height":12}},{"id":"8383c8da-3a0d-4011-ba8e-41ede9882e6d","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":208,"box":{"x":117,"y":436,"width":753,"height":12}},{"id":"633a47d6-80c9-4e43-a535-024309f808ce","block_type":"box","text":"situation and the investment mandate we have from clients. Please see page 19 for more information","page_number":208,"box":{"x":116,"y":451,"width":756,"height":12}},{"id":"706d6fb3-d3f9-4d21-8bb8-1e8e6c177037","block_type":"box","text":"about how we fulfill and oversee our investment stewardship responsibilities for BlackRock’s non-index","page_number":208,"box":{"x":116,"y":467,"width":768,"height":12}},{"id":"283e96fc-19ff-407d-bd9d-39486c924da5","block_type":"box","text":"equity strategies.","page_number":208,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"96692e17-27fd-4ecf-bc24-9b5f8ae7a136","block_type":"box","text":"5","page_number":208,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"b956c7c9-4813-410a-8efc-972a119cc6a6","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":208,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"bf6e8b9f-97a5-426e-b9e7-a619892e79fc","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer","page_number":208,"box":{"x":116,"y":552,"width":695,"height":12}},{"id":"926cc533-a464-45df-90b9-159f67a7cbd6","block_type":"box","text":"engagement is a component of fixed income investment strategies at BlackRock, particularly for those","page_number":208,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"746b93eb-a28c-4d3c-b79f-6bb4a641623a","block_type":"box","text":"with sustainability objectives in addition to financial objectives. Most corporate governance-related","page_number":208,"box":{"x":116,"y":583,"width":732,"height":12}},{"id":"fe0aa979-810f-452f-8ad9-2c9fe2de2d0f","block_type":"box","text":"fixed income engagements are undertaken in conjunction with the active investment stewardship team,","page_number":208,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"84165a00-375e-475b-8fb8-2d972ec2e769","block_type":"box","text":"and often active equity investors. In addition to the topics listed below, engagement with fixed income","page_number":208,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"bb727d7e-88f1-4f56-88dd-10fc93da7254","block_type":"box","text":"investment teams may help inform an issuer’s approach to structuring specialist issuances and the","page_number":208,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"474d6f69-a162-4f84-850a-99e2bc87e70a","block_type":"box","text":"standard terms and information in bond documentation.","page_number":208,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"92f88665-10ed-4b37-9408-5fdf34362a84","block_type":"box","text":"5","page_number":208,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"7adaef98-a35b-4994-9ef5-a7d227c5e40b","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":208,"box":{"x":171,"y":854,"width":685,"height":9}},{"id":"98d206b3-30bd-48e6-a782-0ebc3c9d2130","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":208,"box":{"x":170,"y":867,"width":678,"height":9}},{"id":"6370a50f-5b2f-4c5e-a178-a037fce9c1ca","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":208,"box":{"x":170,"y":880,"width":458,"height":9}},{"id":"ded43829-45a0-45ec-8b3a-94823d45c740","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":208,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f87b402e-d1e4-4f54-ac8f-46d9dd375378","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":208,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"3edc06c6-1ada-401f-a1d0-1fafe3c8481b","block_type":"box","text":"5","page_number":208,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"25646945-64b2-4edb-bee7-8b309d6eb410","block_type":"box","text":"NM1026U-6042785-208/259","page_number":208,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f98e33fd-c3b9-4176-8a9b-a8072f29b6e4","block_type":"box","text":"Boards of Directors","page_number":209,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"985635de-cb43-4829-8c97-f5ab9cc0a44e","block_type":"box","text":"Roles and responsibilities","page_number":209,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"1412ee24-0d82-4a88-aa33-cce01e3977a3","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board","page_number":209,"box":{"x":116,"y":178,"width":770,"height":12}},{"id":"d0f03b1c-7c23-49cc-86a4-dcf68e550b32","block_type":"box","text":"of directors that is able to advise and supervise management in an independent and objective","page_number":209,"box":{"x":116,"y":194,"width":700,"height":12}},{"id":"6b072021-ca70-4f89-8561-0f069dce1b3a","block_type":"box","text":"manner.","page_number":209,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"0721cd53-81fe-46d4-b49d-218a4c148dc9","block_type":"box","text":"6","page_number":209,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"7d2709df-d485-4c5e-919d-23d3d6559f6f","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment","page_number":209,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"8a045971-5399-4f13-a75d-55dddbc3dd44","block_type":"box","text":"and realization of a company’s strategy, purpose and culture. These constructs are interdependent","page_number":209,"box":{"x":116,"y":257,"width":738,"height":12}},{"id":"d4b314a1-571d-4a96-a542-4655ba797faa","block_type":"box","text":"and, when aligned, can better position a company to be resilient in the face of a changing business","page_number":209,"box":{"x":116,"y":273,"width":739,"height":12}},{"id":"934df9ee-b4ed-4a49-8c76-50b5772cea95","block_type":"box","text":"environment, help reduce the risks of corporate or employee misconduct, and attract and retain the","page_number":209,"box":{"x":116,"y":288,"width":740,"height":12}},{"id":"058a6125-f2ea-4a5a-a9e4-e74ecb5e9d13","block_type":"box","text":"caliber of workers necessary to deliver financial performance over time.","page_number":209,"box":{"x":116,"y":304,"width":535,"height":12}},{"id":"ce909af8-5e53-4ec5-af8f-501eea94470d","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies","page_number":209,"box":{"x":117,"y":337,"width":754,"height":12}},{"id":"989d281a-eb13-4048-b0ea-03733f576e68","block_type":"box","text":"and procedures are in place to help management meet its strategic objectives within an agreed risk","page_number":209,"box":{"x":116,"y":352,"width":742,"height":12}},{"id":"e88fb266-df08-4441-ae6c-842655d15ba0","block_type":"box","text":"tolerance.","page_number":209,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"646f6c94-72d6-43b0-b720-8f504df794a1","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the","page_number":209,"box":{"x":116,"y":400,"width":739,"height":12}},{"id":"e607feff-9d3d-418f-9cfc-f7ade453f81a","block_type":"box","text":"chief executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the","page_number":209,"box":{"x":116,"y":416,"width":704,"height":12}},{"id":"052ea0ec-ef06-49f8-bdf0-079a8292a63a","block_type":"box","text":"performance of the CEO and other key executives, determining executive compensation, ensuring a","page_number":209,"box":{"x":117,"y":431,"width":747,"height":12}},{"id":"c79b5832-5e32-407c-b5f7-0b945672b3f2","block_type":"box","text":"rigorous audit, overseeing strategy execution and risk management and engaging with shareholders,","page_number":209,"box":{"x":117,"y":447,"width":753,"height":12}},{"id":"7e86d5ff-8361-433d-a981-7cf0df0adf63","block_type":"box","text":"and other stakeholders, as necessary.","page_number":209,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"40e157cb-afa4-43a9-97e3-304a7e9cab5c","block_type":"box","text":"Composition and effectiveness","page_number":209,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"41e07d71-74f2-404e-aa82-35b9b5e8bd6f","block_type":"box","text":"Appointment process","page_number":209,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"addd4e21-45b6-4ac7-8f8d-51d0e900d13c","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to","page_number":209,"box":{"x":116,"y":560,"width":708,"height":12}},{"id":"6d4770dc-6394-4210-ace7-75e736db163f","block_type":"box","text":"ensuring the board is composed of directors with the appropriate mix of skills and experience.","page_number":209,"box":{"x":116,"y":576,"width":700,"height":12}},{"id":"07efe8f1-1111-417b-8b9f-929cabf04295","block_type":"box","text":"Generally, the board or a sub-committee determines the general criteria given the company’s","page_number":209,"box":{"x":117,"y":591,"width":695,"height":12}},{"id":"982123bd-bfeb-4fa4-9bbd-adb61e0600a0","block_type":"box","text":"circumstances (e.g., sector, maturity, geographic footprint) and any additional criteria for a specific role","page_number":209,"box":{"x":116,"y":607,"width":767,"height":12}},{"id":"ff9cfcf4-f192-40f4-b6d3-f344a46b8289","block_type":"box","text":"being filled (e.g., financial expertise, industry track record). To inform the process, we encourage","page_number":209,"box":{"x":117,"y":622,"width":721,"height":12}},{"id":"ae91a677-3202-48b2-9084-d5ae2b6bddda","block_type":"box","text":"companies to review the skills and experience of incumbent directors to identify any gaps and whether","page_number":209,"box":{"x":116,"y":638,"width":764,"height":12}},{"id":"27eec5fc-8789-48d7-ba9c-2dd84720ae72","block_type":"box","text":"the skills and experience of a director candidate would be additive. We welcome disclosures that","page_number":209,"box":{"x":116,"y":653,"width":722,"height":12}},{"id":"7387086b-f09a-4228-ba6d-d07faa8fc384","block_type":"box","text":"explain how the board considered different skills and experience to ensure that the directors","page_number":209,"box":{"x":116,"y":669,"width":682,"height":12}},{"id":"f801ab53-7577-4376-8f78-071861551beb","block_type":"box","text":"collectively can be effective in fulfilling their responsibilities. We assess a company’s board","page_number":209,"box":{"x":116,"y":684,"width":672,"height":12}},{"id":"0010102d-b394-4459-8999-302a818b687c","block_type":"box","text":"composition against that of its peer group and local market requirements.","page_number":209,"box":{"x":116,"y":700,"width":542,"height":12}},{"id":"3137decf-f10c-4a59-82af-e410e3cb2e0f","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any","page_number":209,"box":{"x":116,"y":733,"width":709,"height":12}},{"id":"bc989d95-46c2-42d9-93c8-df1649b876d8","block_type":"box","text":"particular board composition in our engagements or voting but seek to understand how well placed a","page_number":209,"box":{"x":117,"y":748,"width":746,"height":12}},{"id":"77931403-48e2-46b6-b8cd-83b88dd63714","block_type":"box","text":"board is to act in investors’ interests. We may vote against the election of the most senior independent","page_number":209,"box":{"x":117,"y":764,"width":760,"height":12}},{"id":"724ee899-306e-404c-bf73-05c760fac704","block_type":"box","text":"director, or the chair of the relevant committee, where a company has not demonstrated it has an","page_number":209,"box":{"x":116,"y":779,"width":720,"height":12}},{"id":"3250ae2a-99e2-4534-adfe-1c1b8df2a64f","block_type":"box","text":"appointment process that results in a high functioning board with the appropriate complement of skills","page_number":209,"box":{"x":116,"y":795,"width":753,"height":12}},{"id":"1396b3c0-a643-44ef-90ce-90841204f8f3","block_type":"box","text":"and experience amongst the directors to support strong financial performance over time. We may vote","page_number":209,"box":{"x":116,"y":810,"width":759,"height":12}},{"id":"6981cf78-9584-4a76-9462-1448012c1a44","block_type":"box","text":"against newly nominated directors who do not seem to have the appropriate skills or experience to","page_number":209,"box":{"x":116,"y":826,"width":736,"height":12}},{"id":"4e2c1996-3c4b-4831-9d5e-8586b1668cd5","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":209,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"de3b3fda-3441-4542-8e2e-3b3cd06b67c0","block_type":"box","text":"6","page_number":209,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"625f869a-3693-48ee-abf1-422fae9825f6","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance principles","page_number":209,"box":{"x":170,"y":866,"width":706,"height":10}},{"id":"2a2dd270-d8f4-4cf3-9394-9fa853dc2d98","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":209,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"f8761656-2157-4f16-bd5b-7309443a58cf","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":209,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"735c18d6-24f6-47cc-8606-0e03a99225c2","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":209,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"a87821b2-4da8-4569-90f9-c9141dbc258c","block_type":"box","text":"6","page_number":209,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"e5a1b414-2060-4109-b064-f07554ff8a9b","block_type":"box","text":"NM1026U-6042785-209/259","page_number":209,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3182b825-9aaf-413f-9707-287293ff0658","block_type":"box","text":"Independence","page_number":210,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"c53563b5-513e-4ec1-a749-f6f4d1ec8f2f","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (e.g.,","page_number":210,"box":{"x":117,"y":116,"width":706,"height":12}},{"id":"43f11c61-2133-459e-b6ff-b5bac6fdd8bf","block_type":"box","text":"government or employees) is of paramount importance to the protection of the interests of minority","page_number":210,"box":{"x":116,"y":132,"width":736,"height":12}},{"id":"5f6f2dac-14db-407b-9acc-d41c67cc49db","block_type":"box","text":"shareholders such as BlackRock’s clients. We consider it good practice for at least half the directors to","page_number":210,"box":{"x":116,"y":147,"width":766,"height":12}},{"id":"0d15c317-2659-4e92-a51e-c9687a95f7c8","block_type":"box","text":"be independent and free from conflicts of interest or undue influence.","page_number":210,"box":{"x":117,"y":163,"width":510,"height":12}},{"id":"af94624a-56ba-48b4-96ce-e86816048543","block_type":"box","text":"7","page_number":210,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"5914f6e5-c985-4ca3-9857-a52c9f35c0b2","block_type":"box","text":"This also helps to ensure that","page_number":210,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"fce88fdf-cbe8-4b99-abc6-34f758ecac7b","block_type":"box","text":"board committees are composed of a sufficient number of independent directors. Companies domiciled","page_number":210,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"45ff7672-6565-4260-8c40-4486687f295d","block_type":"box","text":"in markets with a higher threshold for board independence should meet those local requirements.","page_number":210,"box":{"x":117,"y":194,"width":727,"height":12}},{"id":"07a647c1-7a0b-4a63-9a4a-4aa840fd60fe","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient","page_number":210,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"45f9558c-f64d-4acf-a358-a7cb67c1b0ea","block_type":"box","text":"balance of independence. We may also vote against the election of the chair of the committee","page_number":210,"box":{"x":117,"y":239,"width":701,"height":12}},{"id":"82066a2a-88e2-49e3-8117-2aeb0c3c63a9","block_type":"box","text":"responsible for board composition if this is a perennial issue.","page_number":210,"box":{"x":117,"y":254,"width":453,"height":12}},{"id":"812e7b2b-b72c-4b05-9e4f-7b3be9177528","block_type":"box","text":"Independent board leadership","page_number":210,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"01df276f-e8c6-4d0c-b691-3a26faf84a2a","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to","page_number":210,"box":{"x":117,"y":312,"width":718,"height":12}},{"id":"884d3163-52ff-47bf-addd-379a2fc1166d","block_type":"box","text":"independent board leadership. One is a non-executive, independent chair of the board who is","page_number":210,"box":{"x":117,"y":327,"width":697,"height":12}},{"id":"aeb2ce23-3623-4ed6-9d57-882fb7f4a775","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":210,"box":{"x":117,"y":342,"width":738,"height":12}},{"id":"d7470434-35aa-411a-9e93-02c58cffa8df","block_type":"box","text":"independent director, who is responsible for coordinating with the other non-executive directors and","page_number":210,"box":{"x":117,"y":357,"width":742,"height":12}},{"id":"0995bdc9-85f9-4121-8de9-6b760eeff6fd","block_type":"box","text":"working closely with the executive chair on the board agenda and other board procedures. In this case,","page_number":210,"box":{"x":116,"y":372,"width":770,"height":11}},{"id":"7fdeecc5-6f83-4ba9-9e2b-ee7f6fcce26c","block_type":"box","text":"the executive chair and the lead independent director work together to ensure the board is effectively","page_number":210,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"bddadf4b-7821-43fc-b9bd-62a745cd94ff","block_type":"box","text":"fulfilling its responsibilities. In our view, the independent leader of the board, and/or the chair of a","page_number":210,"box":{"x":116,"y":401,"width":723,"height":12}},{"id":"760b97b9-9f22-45d1-9e36-15a054428e0c","block_type":"box","text":"relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":210,"box":{"x":117,"y":416,"width":727,"height":12}},{"id":"42d3229d-cb23-45f7-a646-64125736a770","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board","page_number":210,"box":{"x":116,"y":431,"width":691,"height":12}},{"id":"61e6d3a3-812e-4ad2-a47b-0501a54a68c8","block_type":"box","text":"leadership model and how it serves the interests of shareholders.","page_number":210,"box":{"x":117,"y":446,"width":489,"height":12}},{"id":"0a2bc81e-4585-4c83-b6d1-5c78a0f94508","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if","page_number":210,"box":{"x":116,"y":475,"width":740,"height":12}},{"id":"a788a683-3fa6-49f5-90e1-08c42be6da8f","block_type":"box","text":"there is not an identified independent leader of the board with clear responsibilities for board","page_number":210,"box":{"x":116,"y":490,"width":689,"height":12}},{"id":"ec2c9b15-2f39-4d1b-b9b9-5fa1f8ee1de2","block_type":"box","text":"performance. We may vote against the most senior independent director if the board has a policy of","page_number":210,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"433fc6e8-c5e8-48ac-ad23-2872a403c51f","block_type":"box","text":"not engaging with shareholders.","page_number":210,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"09389ac6-4369-43d4-8969-d54e02676778","block_type":"box","text":"Tenure and succession","page_number":210,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"7bb6947d-b9b8-48b9-b9c2-a48c6ec459d9","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":210,"box":{"x":117,"y":580,"width":745,"height":12}},{"id":"3b39a17a-060a-4815-898a-28e410765bdf","block_type":"box","text":"expected to serve, in line with market norms where those exist. We find it helpful when companies","page_number":210,"box":{"x":116,"y":595,"width":733,"height":12}},{"id":"313eb67c-5d90-499a-85fb-96696b9453be","block_type":"box","text":"disclose their approach to director tenure particularly around the contributions of directors who have","page_number":210,"box":{"x":116,"y":611,"width":745,"height":12}},{"id":"c1b03787-05f1-481d-b159-e7a6b8499821","block_type":"box","text":"served for longer periods than typically provided for under local practice. In our experience, long","page_number":210,"box":{"x":116,"y":626,"width":718,"height":13}},{"id":"f913509c-1db6-44d1-ad2c-a0550d2cbe25","block_type":"box","text":"serving directors could become less independent given their long-term relationship with management","page_number":210,"box":{"x":116,"y":642,"width":755,"height":12}},{"id":"8bb4526c-84b3-4709-9ecd-1772b589a7c8","block_type":"box","text":"and involvement in past board decisions.","page_number":210,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"90d99384-c25c-45ba-86e7-ff8b99608227","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances","page_number":210,"box":{"x":116,"y":687,"width":750,"height":12}},{"id":"7d34b37a-89e6-4b8b-a99c-c985b954438c","block_type":"box","text":"renewal through the regular introduction of directors with fresh perspectives and expertise with","page_number":210,"box":{"x":117,"y":702,"width":699,"height":12}},{"id":"c7d7237a-b8b6-4e79-a1a2-2868df2f3376","block_type":"box","text":"continuity through the retention of directors with long-term knowledge of the board and company.","page_number":210,"box":{"x":116,"y":718,"width":718,"height":12}},{"id":"4c30ee20-6379-4d05-9c1f-59add4c5c99c","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate","page_number":210,"box":{"x":117,"y":746,"width":675,"height":12}},{"id":"7006fe34-f30b-4ad5-b4cf-da2a3591cff4","block_type":"box","text":"governance best practices, we may vote against the election of the chair of the committee responsible","page_number":210,"box":{"x":116,"y":760,"width":757,"height":12}},{"id":"810ccd55-f359-4ae8-8647-337970705d25","block_type":"box","text":"for board composition if a company does not clearly disclose its approach to director tenure and board","page_number":210,"box":{"x":116,"y":774,"width":757,"height":12}},{"id":"f0e3eb70-7937-457c-954f-668c3c266329","block_type":"box","text":"renewal. We may vote against the election of directors who have served for more years than is typical","page_number":210,"box":{"x":117,"y":788,"width":754,"height":12}},{"id":"7a2f5900-aaf5-487d-b742-bd09d91a9ad5","block_type":"box","text":"in markets with specific guidance, where the case for their continued service is not evident.","page_number":210,"box":{"x":117,"y":803,"width":673,"height":12}},{"id":"8b2568b4-5169-4899-9b08-8b72ad05541d","block_type":"box","text":"7","page_number":210,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"aecf63cc-ef24-441e-9cdd-4d6cb85f42db","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":210,"box":{"x":170,"y":828,"width":659,"height":9}},{"id":"02eff6a8-33ba-4c45-9b95-fc251199fc68","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":210,"box":{"x":170,"y":841,"width":659,"height":9}},{"id":"a1dbbd78-f5aa-4efd-9c32-5c9941af7287","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which could, or","page_number":210,"box":{"x":170,"y":854,"width":702,"height":9}},{"id":"40bb64e1-eb56-4ce9-b0fb-c1a66f015463","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":210,"box":{"x":170,"y":866,"width":703,"height":10}},{"id":"03254de1-d03c-40b6-9ffb-624d762a0fdb","block_type":"box","text":"and shareholders.","page_number":210,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"e0be225a-1ce2-4945-825e-4ea2027565ab","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":210,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"cacf080a-a0ed-4f8d-9c53-8765b16e429a","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":210,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"bd990bfd-42a0-4dda-a90c-5d3389765f56","block_type":"box","text":"7","page_number":210,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0f342f3f-a17f-45ae-9fe7-074ae73f52cb","block_type":"box","text":"NM1026U-6042785-210/259","page_number":210,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1278c478-48df-45fd-8b5a-3eb2b2f6d740","block_type":"box","text":"Capacity","page_number":211,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"f28bef3e-0831-45ec-a109-0ae05f888605","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":211,"box":{"x":116,"y":118,"width":757,"height":13}},{"id":"5021aa4f-7318-47b4-bffb-6465ea91aa78","block_type":"box","text":"view, an effective board will assess the ability of its members to maintain an appropriate focus on","page_number":211,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"d003e350-fa00-4525-8262-cf0a656b7cac","block_type":"box","text":"board matters and the company taking into consideration competing responsibilities. We recognize that","page_number":211,"box":{"x":117,"y":150,"width":770,"height":12}},{"id":"48feb2a4-0b00-4860-91a2-7dc0b9234753","block_type":"box","text":"board leadership roles vary across markets in responsibilities and required time commitment but note","page_number":211,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"8caa46b0-7b1b-40d2-a10a-faffe2578b8d","block_type":"box","text":"that they are generally more intensive than a standard directorship. We will take local norms and","page_number":211,"box":{"x":116,"y":181,"width":721,"height":12}},{"id":"dea7bbda-281e-4443-a77a-e7d3618ba98b","block_type":"box","text":"practices into consideration when making our voting determinations across markets.","page_number":211,"box":{"x":117,"y":196,"width":628,"height":12}},{"id":"611828b6-1626-4e49-a49a-615ff32f83b2","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively","page_number":211,"box":{"x":116,"y":227,"width":769,"height":13}},{"id":"839d658b-e122-497c-8321-2a54bf1fa4cf","block_type":"box","text":"fulfil their duties to the board and company.","page_number":211,"box":{"x":116,"y":243,"width":326,"height":12}},{"id":"99de461e-df71-4b80-a19c-d609b1da9f1c","block_type":"box","text":"Director elections","page_number":211,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"3b9d5e7d-ec9a-4075-ad5e-4e91f1046a41","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A","page_number":211,"box":{"x":117,"y":306,"width":720,"height":12}},{"id":"09ca896b-1330-4818-b995-736f5693575b","block_type":"box","text":"classified board structure","page_number":211,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"e5737f0d-a6f3-4933-ab0f-f2a450e6ee76","block_type":"box","text":"8","page_number":211,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"88b249c0-7d9a-42bf-8dc3-031bccb1a8fd","block_type":"box","text":"may be justified by a company when it needs consistency and stability","page_number":211,"box":{"x":309,"y":321,"width":530,"height":12}},{"id":"39009d51-014b-4cff-9280-64997279b025","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":211,"box":{"x":116,"y":337,"width":754,"height":12}},{"id":"983ea52a-756b-41ac-ba4c-e6f627cc15e8","block_type":"box","text":"as closed-end funds).","page_number":211,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"15d593cc-f978-4b46-9994-f5fb8c8cfacb","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in","page_number":211,"box":{"x":116,"y":384,"width":746,"height":12}},{"id":"9a67f85f-7a58-4dff-a3ff-1f752031fdab","block_type":"box","text":"bundled slates. We look to companies to provide sufficient information on each director standing for","page_number":211,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"ad5decda-6ce6-4adf-af15-813f199a5774","block_type":"box","text":"election so that shareholders can assess their capabilities and suitability. We will generally not support","page_number":211,"box":{"x":116,"y":415,"width":765,"height":12}},{"id":"5d5c76cc-f2ff-45d5-aa32-ed8bd2cade30","block_type":"box","text":"the election of directors whose names and biographical details have not been disclosed sufficiently in","page_number":211,"box":{"x":116,"y":430,"width":755,"height":12}},{"id":"3867817e-8eca-40f6-ac6c-fcd25f1a9c21","block_type":"box","text":"advance of the shareholder meeting.","page_number":211,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"465aa34c-530a-43cd-bd80-34eb27bce285","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at","page_number":211,"box":{"x":117,"y":477,"width":746,"height":12}},{"id":"d66c71c4-f129-458a-9df6-29888a5388fb","block_type":"box","text":"the shareholder meeting. Where a company’s practices differ, we look to the board to provide a","page_number":211,"box":{"x":116,"y":493,"width":712,"height":12}},{"id":"be3f92bf-d896-43c5-b567-430d5d770de9","block_type":"box","text":"detailed explanation as to how its approach best serves investors’ interests.","page_number":211,"box":{"x":116,"y":508,"width":567,"height":12}},{"id":"62c8d70e-08f9-4ab3-a950-219124e8af9b","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of","page_number":211,"box":{"x":116,"y":540,"width":710,"height":12}},{"id":"c8c6eef5-9071-4215-b076-ef03eba0615a","block_type":"box","text":"directors and/or a simple majority vote standard for director elections. We may vote against all the","page_number":211,"box":{"x":116,"y":555,"width":732,"height":12}},{"id":"999f71cc-2371-4c2e-afbb-50a8b7976af7","block_type":"box","text":"directors standing for election as part of a single slate if we have concerns about the profile or","page_number":211,"box":{"x":116,"y":571,"width":701,"height":12}},{"id":"078a63f9-fc51-472a-9873-bae11e6611eb","block_type":"box","text":"performance of an individual director.","page_number":211,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"c0c79459-1a3b-40d2-a1fe-cfa1efa8e5ea","block_type":"box","text":"Committees","page_number":211,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"e2b56092-5551-4695-bb75-d458bd101f5b","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and","page_number":211,"box":{"x":117,"y":649,"width":757,"height":12}},{"id":"eee383fb-9a40-4d31-8276-aedfd92eae04","block_type":"box","text":"risk, governance and human capital, and executive compensation, amongst other matters. We do not","page_number":211,"box":{"x":117,"y":665,"width":751,"height":12}},{"id":"61aa6e2a-5dc0-4224-9aee-12d4b1f317ba","block_type":"box","text":"prescribe to companies what committees they should establish, but we seek to understand the board’s","page_number":211,"box":{"x":117,"y":680,"width":760,"height":12}},{"id":"a34af953-91a6-4694-8b72-a0852d484b6f","block_type":"box","text":"rationale for the committee structure it determines is appropriate. We note that, in some markets,","page_number":211,"box":{"x":117,"y":696,"width":717,"height":12}},{"id":"66ea2203-d297-488a-a7fd-548e3e8b672d","block_type":"box","text":"regulation requires such committees. The responsibilities of each committee should be clear, and the","page_number":211,"box":{"x":117,"y":711,"width":748,"height":12}},{"id":"57b21431-aab3-4508-b0b5-d477222f586c","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":211,"box":{"x":117,"y":727,"width":706,"height":12}},{"id":"af1fc90d-46b0-4e2f-bf99-73bb12d5e01d","block_type":"box","text":"committees. It is helpful to investor understanding when the board discloses the structure,","page_number":211,"box":{"x":116,"y":742,"width":665,"height":12}},{"id":"5acfcc6e-2194-494a-9bf7-197cdbfc1e8d","block_type":"box","text":"membership, proportion of independent directors, and responsibilities of each committee. The","page_number":211,"box":{"x":117,"y":758,"width":694,"height":12}},{"id":"9468dc73-f5b9-49cf-9f4a-6daf3405fcbb","block_type":"box","text":"responsibilities we typically see assigned to the three most common committees include:","page_number":211,"box":{"x":117,"y":773,"width":656,"height":12}},{"id":"5863b9dc-a514-4a00-a73a-f93af3412270","block_type":"box","text":"• Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management","page_number":211,"box":{"x":117,"y":805,"width":747,"height":12}},{"id":"b8cd728a-b8a7-49b4-abbf-c2311f52def7","block_type":"box","text":"and compliance with legal and regulatory requirements; may also play an oversight role in relation","page_number":211,"box":{"x":150,"y":820,"width":725,"height":12}},{"id":"7a14a594-1add-41d8-98df-bb797144a1ed","block_type":"box","text":"to the internal audit function and whistleblowing mechanisms.","page_number":211,"box":{"x":150,"y":836,"width":460,"height":12}},{"id":"fcd5d6dd-9fbf-48df-b44a-4822a2fcd928","block_type":"box","text":"8","page_number":211,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"4cf7e152-bf82-4125-8eea-afa29d0f08d3","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result,","page_number":211,"box":{"x":122,"y":862,"width":744,"height":12}},{"id":"1ed5e080-da08-474f-9ba5-d9b31bbfcbfb","block_type":"box","text":"only one class of directors stands for election in any one year.","page_number":211,"box":{"x":150,"y":877,"width":464,"height":12}},{"id":"88d0db17-d8d3-4c55-bd43-feb413370466","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":211,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"c72e7526-e0dd-4407-ad08-d44dbe3dddcb","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":211,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"2bcb56f8-4c7e-48cf-868b-f807cc7551d0","block_type":"box","text":"8","page_number":211,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"540a98cd-4c4d-4518-a940-071510607b47","block_type":"box","text":"NM1026U-6042785-211/259","page_number":211,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7156a620-564d-4c20-b415-c47f28c44735","block_type":"box","text":"• Nominating, governance and human capital – oversight responsibilities for corporate governance","page_number":212,"box":{"x":117,"y":87,"width":756,"height":12}},{"id":"da9745f4-7324-4823-ac72-0a3f621b662a","block_type":"box","text":"principles and practices of the company, including the periodic review of board performance;","page_number":212,"box":{"x":150,"y":102,"width":691,"height":13}},{"id":"d6e1669d-de0d-4396-82ed-dcdd252ac000","block_type":"box","text":"responsibility for succession planning for CEO and key board roles, as well as the director","page_number":212,"box":{"x":150,"y":118,"width":672,"height":12}},{"id":"89934fbb-6930-4aef-9698-651171427301","block_type":"box","text":"appointment process; may also have oversight responsibilities for human capital management","page_number":212,"box":{"x":150,"y":134,"width":703,"height":12}},{"id":"94bc9b39-25a3-47d0-a9c8-ecd8de6dd128","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":212,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"7af5d9a5-4ee7-4a6d-a98b-8a32bf507a9a","block_type":"box","text":"• Executive compensation – determines the compensation policies and programs for the CEO and","page_number":212,"box":{"x":117,"y":174,"width":755,"height":12}},{"id":"6ed85977-5742-4ed8-bad3-f643bcf01eb5","block_type":"box","text":"other executive officers, approves annual awards and payments under the policies; may also have","page_number":212,"box":{"x":150,"y":189,"width":735,"height":12}},{"id":"b1c7df08-8ee4-406e-91db-87aee0695e3f","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":212,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"04056aef-42ce-4e6d-9e26-05a9c2ed5753","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee","page_number":212,"box":{"x":116,"y":239,"width":765,"height":12}},{"id":"3a9dfd33-f821-41ee-a01c-810cfa6b94fd","block_type":"box","text":"members to convey concerns about how a committee has undertaken its responsibilities. We may vote","page_number":212,"box":{"x":117,"y":255,"width":767,"height":12}},{"id":"83a2130a-0cdd-435a-8f65-70fa055d0bba","block_type":"box","text":"against the election of the most senior non-executive director if there is not a clearly disclosed","page_number":212,"box":{"x":116,"y":270,"width":702,"height":12}},{"id":"30b4ded3-c038-4c59-9384-a5cd12118f27","block_type":"box","text":"approach to board committees.","page_number":212,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"fc647dbf-b458-4601-b8cd-dce0db13a33f","block_type":"box","text":"Board and director evaluation","page_number":212,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"7b80082a-19b8-436c-a62e-89cd91795b53","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the","page_number":212,"box":{"x":116,"y":354,"width":729,"height":12}},{"id":"6e59454d-eb1a-48e9-a231-a0fada2407b7","block_type":"box","text":"board, the committees, the chair and individual directors. Periodically, this review could be undertaken","page_number":212,"box":{"x":117,"y":369,"width":762,"height":12}},{"id":"57b1aa59-693a-4aec-ae29-8a14cb7e7f26","block_type":"box","text":"by an independent third party able to bring objective perspectives to the board on governance and","page_number":212,"box":{"x":117,"y":385,"width":732,"height":12}},{"id":"c8805093-fa82-45de-99f9-33168c49fbbf","block_type":"box","text":"performance. We encourage companies to disclose their approach to and the objectives of","page_number":212,"box":{"x":117,"y":400,"width":677,"height":12}},{"id":"b385d3f7-edd3-4d01-905b-32199b614dd6","block_type":"box","text":"evaluations, including any changes made to the board’s approach as a result.","page_number":212,"box":{"x":116,"y":416,"width":581,"height":12}},{"id":"54334cdc-127b-41e1-adc3-2996525675a0","block_type":"box","text":"Access to independent advice","page_number":212,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"0d58894f-b697-4e00-af93-2a3a1889d5d3","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they","page_number":212,"box":{"x":116,"y":484,"width":723,"height":12}},{"id":"ec0496e6-cdc1-41e1-a77f-854e6620695d","block_type":"box","text":"should have access to independent advice. In certain circumstances, it may be helpful to boards to","page_number":212,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"4dd2363b-2ae8-44cc-87ce-24028fcb2eda","block_type":"box","text":"retain independent third parties to advise on critical matters. These might include new industry","page_number":212,"box":{"x":117,"y":515,"width":703,"height":12}},{"id":"2461f5d0-07e9-4d9e-bc70-641a687c9ea2","block_type":"box","text":"developments such as emergent and disruptive technology, operating events with material","page_number":212,"box":{"x":116,"y":531,"width":676,"height":12}},{"id":"9c34f8de-ec21-4f67-bad8-8284a0067be0","block_type":"box","text":"consequences for the company’s reputation and/or performance, or significant transactions. Board","page_number":212,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"f3fd7039-882a-4976-839b-b5c2e9221f64","block_type":"box","text":"committees may similarly retain third parties to advise them on specialist matters such as audit,","page_number":212,"box":{"x":116,"y":562,"width":713,"height":12}},{"id":"667c59f5-e444-40f2-9c87-b6a5aa31b2aa","block_type":"box","text":"compensation and succession planning.","page_number":212,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"ca873cbb-7765-4695-b064-6197254cd0ac","block_type":"box","text":"Executive compensation","page_number":212,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"e4f85cd3-46b2-4ad9-ae64-e0a145681f21","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to","page_number":212,"box":{"x":117,"y":655,"width":760,"height":12}},{"id":"9452a363-802a-4e06-a3bd-6c74d35b588f","block_type":"box","text":"recruit, retain and reward the caliber of executive management necessary to lead and operate the","page_number":212,"box":{"x":117,"y":670,"width":724,"height":12}},{"id":"fefe0e5c-242f-4e49-bfbf-dd005d68c1d1","block_type":"box","text":"company to deliver superior financial returns over time. We focus on alignment between variable pay","page_number":212,"box":{"x":116,"y":685,"width":748,"height":13}},{"id":"652efebb-4498-4416-a0f7-7808244b9c34","block_type":"box","text":"and a company’s financial performance.","page_number":212,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"53ef57c0-75d7-4975-a459-0c5356aa5add","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus","page_number":212,"box":{"x":117,"y":735,"width":746,"height":12}},{"id":"0d8b633e-1575-4eb1-9623-3d62c910fd9f","block_type":"box","text":"that rewards performance against short-term metrics, incentives—most often share-based- that reward","page_number":212,"box":{"x":116,"y":751,"width":762,"height":12}},{"id":"2fd2f861-698b-4f8c-8243-7c4c8742f255","block_type":"box","text":"performance against long-term metrics, and pensions and benefits. In our observation, base salary,","page_number":212,"box":{"x":117,"y":766,"width":736,"height":12}},{"id":"ae6d1043-43b6-4561-8b18-5a0ceeff9ddf","block_type":"box","text":"pensions and benefits are largely set relative to market norms and benchmarks. The annual bonus and","page_number":212,"box":{"x":117,"y":782,"width":763,"height":12}},{"id":"7d9d81b5-7865-4ce2-9404-5b7986dcc788","block_type":"box","text":"share-based incentive, or variable pay plans, tend to be tailored to the company, its sector and long","page_number":212,"box":{"x":116,"y":797,"width":744,"height":12}},{"id":"83e19f8c-4627-43a2-8d18-c23b03692a0d","block_type":"box","text":"term strategy, as well as the individuals the board is seeking to recruit and motivate.","page_number":212,"box":{"x":116,"y":813,"width":622,"height":12}},{"id":"50d64bfa-be17-4879-a109-e9f495fe398f","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a","page_number":212,"box":{"x":117,"y":847,"width":693,"height":12}},{"id":"bca0fd6d-6578-43be-903d-f7d08ff86cce","block_type":"box","text":"company’s approach to executive compensation on a case-by-case basis. We rely on companies","page_number":212,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"88e81454-dc18-4e17-8464-4340948d5a7f","block_type":"box","text":"providing sufficient quantitative and qualitative information in their disclosures to enable shareholders","page_number":212,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"9ff7440e-5f9f-4adc-b13f-da7dd04842ea","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":212,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f5e274fc-3659-4241-9c74-f3455604e4da","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":212,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"427d7f2c-9180-4e84-a2bb-e03dc9a51eb1","block_type":"box","text":"9","page_number":212,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"b1cf5c83-6332-42cb-942a-79730b645423","block_type":"box","text":"NM1026U-6042785-212/259","page_number":212,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"45b1ca78-11c6-43ae-be6a-7b962620da8a","block_type":"box","text":"to understand the compensation arrangements and assess the alignment with investors’ interests.","page_number":213,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"690b35b3-699b-4dd5-9ec5-373364e73986","block_type":"box","text":"Features we look for in compensation arrangements include:","page_number":213,"box":{"x":117,"y":102,"width":454,"height":13}},{"id":"aec9c9b6-4cef-4be9-8e77-aab051b7585d","block_type":"box","text":"• Fixed pay components, including base salary, benefits and prerequisites that are appropriate in","page_number":213,"box":{"x":117,"y":133,"width":744,"height":12}},{"id":"d8172042-49f1-4519-bcf4-ad8cb0b30ef2","block_type":"box","text":"the context of the company’s size, sector and market.","page_number":213,"box":{"x":150,"y":148,"width":402,"height":12}},{"id":"0bf3ed07-2f0b-408a-a554-94bf1892ef6b","block_type":"box","text":"• Variable pay subject to performance metrics that are closely linked to the company’s short- and","page_number":213,"box":{"x":117,"y":171,"width":745,"height":12}},{"id":"d3004604-488e-4152-8351-71858bc95a6c","block_type":"box","text":"long-term strategic objectives.","page_number":213,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"62c79b9c-d411-422a-9298-07d33f6edbcf","block_type":"box","text":"• Long-term incentives that motivate sustained performance across a multi-year period.","page_number":213,"box":{"x":117,"y":210,"width":674,"height":12}},{"id":"09245cbb-0057-4838-ad06-31f93ba635e4","block_type":"box","text":"• A balance between fixed and variable pay, short- and long-term incentives, and specific","page_number":213,"box":{"x":117,"y":233,"width":687,"height":12}},{"id":"ea90a08a-fadd-49e6-b934-6528316f89cb","block_type":"box","text":"instruments (cash and equity awards) that promotes pay program durability and seldom","page_number":213,"box":{"x":150,"y":248,"width":654,"height":12}},{"id":"8885dd35-aa4f-4c1f-86e2-fbab1d632e1c","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":213,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"c0a12743-1082-4724-8a0a-f8b096b48a0d","block_type":"box","text":"• Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":213,"box":{"x":117,"y":287,"width":720,"height":12}},{"id":"cfb39dcf-4f7d-43cf-884a-23b65d8a0c30","block_type":"box","text":"• Board discretion, if allowed within the variable pay arrangements, to be used sparingly,","page_number":213,"box":{"x":117,"y":310,"width":683,"height":12}},{"id":"9a81817d-3809-4e0f-853d-4ac86668bc78","block_type":"box","text":"responsibly and transparently.","page_number":213,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"0ef02aab-fd04-491d-a955-225fed3e635b","block_type":"box","text":"• A requirement, that participants in long-term share-based incentive plans build a meaningful","page_number":213,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"c017c48c-66b1-4dce-8b7f-a5a07513a158","block_type":"box","text":"shareholding in the company within a defined time period, as determined by the board or relevant","page_number":213,"box":{"x":150,"y":363,"width":727,"height":13}},{"id":"679e614d-1ee8-4591-af98-c71439baeb1b","block_type":"box","text":"board committee.","page_number":213,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"8f0f51a6-00f0-4a69-912d-82b3aa20876d","block_type":"box","text":"• Change of control provisions that appropriately balance the interests of executives and","page_number":213,"box":{"x":117,"y":402,"width":681,"height":12}},{"id":"6783f917-dbf5-468f-93b4-1445388ee9f3","block_type":"box","text":"shareholders.","page_number":213,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"a60bc981-06a5-4b7b-8964-7ebec1a67774","block_type":"box","text":"• Clawback or malus provisions that allow the company to recoup or hold back variable","page_number":213,"box":{"x":117,"y":440,"width":671,"height":12}},{"id":"1888f47d-71ca-4040-aa8f-e1081c43cdb9","block_type":"box","text":"compensation from individuals whose awards were based on fraudulent activities, misstated","page_number":213,"box":{"x":150,"y":456,"width":688,"height":12}},{"id":"4e76eb35-badd-4dfd-ba27-156de1fa8aab","block_type":"box","text":"financial reports, or executive misconduct.","page_number":213,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"6fe30ee7-f790-41db-bcda-f900327d432d","block_type":"box","text":"• Severance arrangements that protect the company’s interests but do not cost more than is","page_number":213,"box":{"x":117,"y":494,"width":709,"height":12}},{"id":"436fc7b5-6359-4b19-8377-1d2bed3e91d7","block_type":"box","text":"contractual.","page_number":213,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"034a2421-69a9-48da-bba9-5ceb4cd38e54","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or","page_number":213,"box":{"x":116,"y":540,"width":757,"height":12}},{"id":"f847012c-42a2-454d-9df3-9f9886d9a9a2","block_type":"box","text":"plans, or approve the compensation report where we do not see alignment between executive","page_number":213,"box":{"x":117,"y":556,"width":701,"height":12}},{"id":"17785794-e930-4833-8e3f-e74b94765c57","block_type":"box","text":"compensation arrangements and our clients’ financial interests. When there is not an alternative, or","page_number":213,"box":{"x":116,"y":571,"width":742,"height":12}},{"id":"03767c9c-6d8d-4250-9b99-b8537fbcccef","block_type":"box","text":"where there have been multi-year issues with compensation misaligned with performance, we may","page_number":213,"box":{"x":116,"y":587,"width":738,"height":12}},{"id":"a9ed07ba-7c74-455b-823d-97603b1a0ba4","block_type":"box","text":"vote against the election of the chair of the responsible committee, or the most senior independent","page_number":213,"box":{"x":116,"y":602,"width":735,"height":12}},{"id":"3d43fa76-d27b-4ad5-b4b8-bcfa1c1ce58b","block_type":"box","text":"director.","page_number":213,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"9596cda1-b078-4606-b9e5-5c626b269bb1","block_type":"box","text":"Non-executive director compensation","page_number":213,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"afd97730-82c4-48b2-8ad2-06ed9126f2e4","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a","page_number":213,"box":{"x":117,"y":686,"width":706,"height":12}},{"id":"af6377ed-2a0b-4107-b408-798c7c79028d","block_type":"box","text":"combination of the two. Some companies also pay additional fees for service on board committees or","page_number":213,"box":{"x":116,"y":701,"width":752,"height":12}},{"id":"f4c84d29-e1d9-42ed-9f48-e41cd771dad6","block_type":"box","text":"in board leadership roles. We do not support non-executive directors participating in performance","page_number":213,"box":{"x":117,"y":717,"width":726,"height":12}},{"id":"144f3e8a-4a54-46b9-9c04-90c8b6b9b79c","block_type":"box","text":"based incentive plans as doing so may create a conflict of interest and undermine their independence","page_number":213,"box":{"x":117,"y":732,"width":753,"height":12}},{"id":"84d5d3df-6423-4f32-ab65-131acc0ca287","block_type":"box","text":"from management, whom they oversee.","page_number":213,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"c7bf47c2-f013-45a6-911b-abc7887b50e8","block_type":"box","text":"Capital structure","page_number":213,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"7bd5deeb-9759-4d1c-beab-d3451dea2c18","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that","page_number":213,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"c883fb4f-0ebe-4c01-9a22-ead1155e8753","block_type":"box","text":"achieves appropriate capital allocation in support of long-term financial resilience.","page_number":213,"box":{"x":116,"y":832,"width":610,"height":12}},{"id":"69440834-ade2-4afb-becf-874cd2f9da28","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why","page_number":213,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"c31e77f5-2e04-409f-8146-26ecf0c8a239","block_type":"box","text":"they view these practices to be aligned with shareholders’ interests. We may vote against management","page_number":213,"box":{"x":116,"y":878,"width":772,"height":11}},{"id":"453423f9-5038-4edf-af16-94de25e16f8f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":213,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"2d66ebbe-61b2-4ff8-beeb-3ad3bcac3e04","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":213,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"fbe4386c-08ec-4312-a9e1-243ac32d1df8","block_type":"box","text":"10","page_number":213,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"ac320fc6-394f-4015-b6b5-7ca621d4648b","block_type":"box","text":"NM1026U-6042785-213/259","page_number":213,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"88ec8e70-d97b-40a7-8e70-834a2cf0b7a1","block_type":"box","text":"proposals seeking capital-related authorities, or the election of the most senior independent director, if","page_number":214,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"4689c00d-1f66-4283-a994-6bb61fabf3cc","block_type":"box","text":"we have concerns about a company’s approach. We may also support a shareholder proposal seeking","page_number":214,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"1eab7c3f-1426-4a73-883e-4ee1886e1e49","block_type":"box","text":"conversion of shares with differentiated voting rights to a one-share, one-vote standard.","page_number":214,"box":{"x":116,"y":118,"width":655,"height":12}},{"id":"00395700-2309-4ca0-9792-2e6b8345f5f4","block_type":"box","text":"Share","page_number":214,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"bfbe4eb7-ac64-41db-8b37-9cd077a71704","block_type":"box","text":"issuance","page_number":214,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"73c65201-5984-4b9d-ab42-f88be5d4c33d","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will","page_number":214,"box":{"x":116,"y":179,"width":741,"height":12}},{"id":"b2f75ba7-2bd4-4722-9fe7-71696159a78c","block_type":"box","text":"generally support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent","page_number":214,"box":{"x":116,"y":194,"width":768,"height":12}},{"id":"6c31dcf1-dc1f-4f21-81ce-6ef307f28e76","block_type":"box","text":"pre-emptive rights. We consider it good practice for companies to seek regular approval of these","page_number":214,"box":{"x":117,"y":210,"width":720,"height":12}},{"id":"c7ceb857-82f8-49c8-a809-51ac8edcb6d3","block_type":"box","text":"authorities to allow shareholders to take into consideration how prior authorities were used, as well as","page_number":214,"box":{"x":116,"y":226,"width":759,"height":11}},{"id":"63a9d381-a277-49d4-95b8-1ad470b5a817","block_type":"box","text":"the current circumstances of the company and the market environment.","page_number":214,"box":{"x":116,"y":241,"width":536,"height":12}},{"id":"c58318b7-3c1e-47ee-a9a4-8da3e507d09d","block_type":"box","text":"Share buybacks","page_number":214,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"2d6f291b-75d2-4643-bba7-5a466cf3de54","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management","page_number":214,"box":{"x":116,"y":302,"width":746,"height":12}},{"id":"a16160ae-e2f3-4976-9da3-12760134a50b","block_type":"box","text":"strategy and management’s determination of the appropriate balance between investment that","page_number":214,"box":{"x":116,"y":317,"width":706,"height":12}},{"id":"081b1124-9a28-42f2-8fde-fc8171f508c9","block_type":"box","text":"supports the long-term growth of the company and returning cash to investors. We also take into","page_number":214,"box":{"x":116,"y":333,"width":721,"height":12}},{"id":"655c8ed2-88c4-4b8f-9bb4-96f9864b4eb5","block_type":"box","text":"consideration the effect of a buyback program on the company’s balance sheet and executive","page_number":214,"box":{"x":116,"y":348,"width":701,"height":12}},{"id":"b575f807-0c1a-4945-95df-8a30acc852df","block_type":"box","text":"compensation arrangements and the price at which shares are repurchased relative to market price.","page_number":214,"box":{"x":116,"y":364,"width":748,"height":12}},{"id":"4868aef6-28e3-4984-a145-0714952f7530","block_type":"box","text":"We consider it good practice for companies to seek regular approval of these authorities to allow","page_number":214,"box":{"x":116,"y":379,"width":721,"height":12}},{"id":"b8765643-faa1-43cd-8088-15a9a3caa570","block_type":"box","text":"shareholders to take into consideration how prior authorities were used, as well as the current","page_number":214,"box":{"x":116,"y":395,"width":700,"height":12}},{"id":"a945030f-609a-4a0e-bef7-953b977614ed","block_type":"box","text":"circumstances of the company and the market environment.","page_number":214,"box":{"x":116,"y":410,"width":451,"height":12}},{"id":"dacdc961-d83d-4766-a47d-d8c29c0572f6","block_type":"box","text":"Dividends","page_number":214,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"8bb1fc15-c806-418b-8b09-8919cddeb976","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further","page_number":214,"box":{"x":116,"y":471,"width":752,"height":12}},{"id":"95eaa956-6ea8-4b4d-b9df-f26e47ab7433","block_type":"box","text":"clarification where a proposed dividend appears out of line with the company’s financial position.","page_number":214,"box":{"x":116,"y":487,"width":720,"height":12}},{"id":"18718c95-8e75-40a0-b4c1-8baa923a5928","block_type":"box","text":"Differentiated voting rights","page_number":214,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"08a64b18-21e8-469e-94cc-9c5b307ea71d","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same","page_number":214,"box":{"x":116,"y":547,"width":710,"height":12}},{"id":"80fd51cc-ea88-496a-9797-7c804bbbbd9a","block_type":"box","text":"economic exposure. Certain companies, particularly those new to public markets, could make the case","page_number":214,"box":{"x":116,"y":563,"width":768,"height":12}},{"id":"94d66da5-1b76-49f0-9c25-76132ab5173e","block_type":"box","text":"to adopt a differentiated voting rights structure, or dual class stock. In those situations, we encourage","page_number":214,"box":{"x":116,"y":578,"width":755,"height":13}},{"id":"6a43716a-9cbf-4d02-9f62-91acef60586a","block_type":"box","text":"companies to evaluate and seek approval for their capital structure on a periodic basis.","page_number":214,"box":{"x":116,"y":594,"width":650,"height":12}},{"id":"c28ec04e-825b-4730-89a5-633437ce087f","block_type":"box","text":"Transactions and special situations","page_number":214,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"9053c7fd-a477-46f1-aec1-c56fa6c5148e","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own","page_number":214,"box":{"x":116,"y":662,"width":706,"height":12}},{"id":"87fa5b69-eb93-465a-b998-cefefbe6ba00","block_type":"box","text":"detailed analyses of proposals.","page_number":214,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"33c75180-08c0-4e5d-90d2-d8d42c4c0b63","block_type":"box","text":"Mergers and acquisitions","page_number":214,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"17972b6e-acd4-4a15-b301-818134a64db6","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as","page_number":214,"box":{"x":116,"y":739,"width":740,"height":12}},{"id":"d786db43-3fed-49f1-b967-9503c182b027","block_type":"box","text":"minority shareholders. Management should provide an assessment of the proposed transaction’s","page_number":214,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"350888da-ac99-4f68-b32d-55e1c251fa2f","block_type":"box","text":"strategic and financial rationale, along with its execution and operational risks. We review each","page_number":214,"box":{"x":116,"y":770,"width":703,"height":12}},{"id":"05fe2ded-26ea-4c44-abc5-e25baa3191ba","block_type":"box","text":"transaction independently based on these factors and the degree to which the transaction enhances","page_number":214,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"7264b6e4-f383-48d4-bbd2-8e249d98ba17","block_type":"box","text":"shareholder value. The board might consider establishing an ad hoc transaction committee to","page_number":214,"box":{"x":116,"y":801,"width":693,"height":12}},{"id":"673bb457-fca0-470a-a51f-c08a776ce135","block_type":"box","text":"undertake an independent assessment of a significant merger or acquisition, in advance of making its","page_number":214,"box":{"x":117,"y":816,"width":752,"height":12}},{"id":"6d239ac5-3d91-4d4f-8ad0-77075068b949","block_type":"box","text":"recommendation to shareholders.","page_number":214,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"e2f26890-c03f-4ea7-a8d2-12c3e99fec71","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial","page_number":214,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"ab6cefda-3b7a-43a3-9d2e-44f5ada8b823","block_type":"box","text":"interests.","page_number":214,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"e89db65a-88c7-4d7f-b3da-98df7a3c7e60","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4c103047-e3b8-4e36-aaa0-07c063c067d5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":214,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"813ce65e-1be5-4d5e-993a-bbcb6f94dd12","block_type":"box","text":"11","page_number":214,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"ad263bc3-5c44-4ae9-b3f1-98220b60e435","block_type":"box","text":"NM1026U-6042785-214/259","page_number":214,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4259aff7-7a62-4e9f-bae6-f11b93aef4c2","block_type":"box","text":"Anti-takeover defenses","page_number":215,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"48f05cc7-f36c-4769-8bdf-039f8953fbb7","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":215,"box":{"x":117,"y":119,"width":757,"height":12}},{"id":"e04fbdbd-7006-42f1-a47a-526fa4904a78","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered","page_number":215,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"2683635b-4f4f-4e77-81a4-50aeb152cfb8","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":215,"box":{"x":117,"y":150,"width":751,"height":12}},{"id":"c52ebe3b-713d-4602-93e8-f70a7e38df99","block_type":"box","text":"takeover that is considered sub-optimal and enable management to seek an improved offer. Similarly,","page_number":215,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"77653b66-5537-4c20-9655-7e96d5f275ef","block_type":"box","text":"management could make the case to use a poison pill to block a shareholder activism campaign that","page_number":215,"box":{"x":117,"y":181,"width":751,"height":12}},{"id":"8a217eb2-1b96-49d8-a9a2-7e065161265d","block_type":"box","text":"may be counter to the interests of other investors. Defense mechanisms introduced in these","page_number":215,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"0735209a-2826-4ba7-9d12-28611da15fe1","block_type":"box","text":"circumstances should be limited in term and threshold, and also be closely monitored by the","page_number":215,"box":{"x":116,"y":212,"width":688,"height":12}},{"id":"1edfc088-715e-4d2c-a3f5-33c3f11b191e","block_type":"box","text":"independent members of the board. We consider it good practice for companies to put to a shareholder","page_number":215,"box":{"x":117,"y":227,"width":771,"height":12}},{"id":"5d83574e-ad8c-4286-96b3-e8eb2f34b627","block_type":"box","text":"vote any mechanisms expected to be in place for more than 12 months.","page_number":215,"box":{"x":116,"y":243,"width":538,"height":12}},{"id":"91b6836f-2a96-4c87-9d83-87ac657e72a6","block_type":"box","text":"Shareholder activism","page_number":215,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"bc9068c9-dc86-4347-b0dc-eb7a355b289a","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to","page_number":215,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"ee56e817-cf44-4d97-878b-4758eab6384e","block_type":"box","text":"understand their analysis and objectives, once they have publicly disclosed their campaign. We may","page_number":215,"box":{"x":117,"y":322,"width":748,"height":12}},{"id":"d05745ac-6e67-4b33-8f6d-94b2f6c908a3","block_type":"box","text":"also engage with company management and possibly board members, especially those the activist","page_number":215,"box":{"x":116,"y":337,"width":741,"height":12}},{"id":"3eb1519f-dc0b-43cf-b371-90fa226f1124","block_type":"box","text":"may be seeking to replace. In our assessment, we evaluate various factors, including the concerns","page_number":215,"box":{"x":117,"y":353,"width":737,"height":12}},{"id":"bb3b11e2-3303-43c3-b9ed-e1bf370708c9","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":215,"box":{"x":117,"y":368,"width":728,"height":12}},{"id":"bc588044-9055-4c41-9554-2973384fd321","block_type":"box","text":"plans; and the qualifications of each party’s candidates. We evaluate each contested situation by","page_number":215,"box":{"x":117,"y":384,"width":723,"height":12}},{"id":"b41d9d6c-9af1-4130-97ba-da9d7d58ef3b","block_type":"box","text":"assessing the potential financial outcome for our clients as minority shareholders.","page_number":215,"box":{"x":116,"y":399,"width":610,"height":12}},{"id":"27cdeb00-97fa-4392-95fc-7def40764d25","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent","page_number":215,"box":{"x":116,"y":431,"width":728,"height":12}},{"id":"a33f6549-53d4-4d28-bb2a-f6e3c8dd4175","block_type":"box","text":"judgment, or the relevant portfolio manager has determined that there is a case for change to enhance","page_number":215,"box":{"x":115,"y":446,"width":767,"height":13}},{"id":"ad0e03c5-d1bd-4c10-b9b4-adfa5bed9508","block_type":"box","text":"shareholder value, or if the incumbent board members do not demonstrate the relevant skills and","page_number":215,"box":{"x":116,"y":462,"width":725,"height":11}},{"id":"f1f39591-f198-449c-83e5-738e681216f8","block_type":"box","text":"expertise or have a poor track record of protecting shareholders’ interests.","page_number":215,"box":{"x":116,"y":477,"width":556,"height":13}},{"id":"a83a0da0-0146-4da5-908c-7a1ea0c20a8b","block_type":"box","text":"Significant shareholders and related party transactions","page_number":215,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"2fe1a171-907e-4b69-bad3-1c66643c6c09","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":215,"box":{"x":117,"y":541,"width":768,"height":12}},{"id":"257213fc-7fda-42f2-b598-87a9b79f013f","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":215,"box":{"x":117,"y":556,"width":534,"height":12}},{"id":"9579a9c7-7826-4d88-b220-2891964789de","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or","page_number":215,"box":{"x":116,"y":588,"width":751,"height":12}},{"id":"f8ef6e81-055f-47ac-8cb7-090793ae48fe","block_type":"box","text":"companies affiliated with the public company, to be disclosed in detail and conducted on terms similar","page_number":215,"box":{"x":116,"y":604,"width":760,"height":12}},{"id":"2c9fcdba-524c-43cc-b5b6-0bb51001ae0e","block_type":"box","text":"to what would objectively have been agreed with a non-related party. In our view, such transactions","page_number":215,"box":{"x":116,"y":619,"width":743,"height":12}},{"id":"cc82f84b-4007-4e49-a514-bd22ac466f7c","block_type":"box","text":"should be reviewed and approved by the independent members of the board, and if voted on, only","page_number":215,"box":{"x":116,"y":635,"width":734,"height":12}},{"id":"d2c668cc-5683-491e-af69-67ae3b22f98f","block_type":"box","text":"disinterested shareholders should vote.","page_number":215,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"60b3a3b6-0647-45c7-8071-c3c50522cce1","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":215,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"c61cc2ba-2ada-4c17-8313-3ee37f5f7721","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s","page_number":215,"box":{"x":117,"y":722,"width":737,"height":12}},{"id":"573e796f-0f78-40f7-b017-770f5d450338","block_type":"box","text":"strategy, its implementation and financial performance, as well as to assess the quality of management","page_number":215,"box":{"x":116,"y":737,"width":765,"height":12}},{"id":"ba2c76c9-357d-4bd2-b8da-f9f3d26377f1","block_type":"box","text":"and operations and potential for the company to create shareholder value over time. We consider it","page_number":215,"box":{"x":116,"y":753,"width":736,"height":12}},{"id":"7130e5df-d371-4bfb-8359-ea28d6f87ecf","block_type":"box","text":"good practice for the board to oversee corporate reporting and the policies and procedures","page_number":215,"box":{"x":116,"y":768,"width":674,"height":12}},{"id":"4d20493a-eb57-4f28-9669-3c3357ccb4f2","block_type":"box","text":"underpinning the internal audit function and external audit.","page_number":215,"box":{"x":117,"y":784,"width":430,"height":12}},{"id":"fa10936f-0b5a-49d1-8728-a558a875e0f9","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other","page_number":215,"box":{"x":116,"y":815,"width":730,"height":13}},{"id":"957e8876-4f6a-4581-bb03-fbbd484b6235","block_type":"box","text":"stakeholders, on its financial performance and position. It should provide an accurate and balanced","page_number":215,"box":{"x":116,"y":831,"width":742,"height":12}},{"id":"47a105ae-7bc1-41af-bae2-8724e6c1c6d7","block_type":"box","text":"assessment of the risks and opportunities the company faces in realizing its long-term strategy.","page_number":215,"box":{"x":116,"y":846,"width":712,"height":13}},{"id":"0ecac9cf-0789-48a4-aee0-506267650e90","block_type":"box","text":"Accordingly, the assumptions made by management and reviewed by the auditor in preparing the","page_number":215,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"5314bbe7-ac7e-4c2f-aff3-e2b14cf3f445","block_type":"box","text":"financial statements should be reasonable and justified. Financial statements should be prepared in","page_number":215,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"754ce1c8-2be9-4e81-8405-d0b4b46e44be","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b9d28ec7-d069-4a50-b721-3303d33d8fae","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":215,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"68ac7c95-24eb-4b0c-b4bd-2515a90c19f7","block_type":"box","text":"12","page_number":215,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"7a5ea92c-4a4d-443e-92da-afd7bbcda202","block_type":"box","text":"NM1026U-6042785-215/259","page_number":215,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fac3d2c9-7518-47c4-afbf-1d3672005d86","block_type":"box","text":"accordance with globally developed reporting standards and any divergence from generally accepted","page_number":216,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"a0f4a198-9c10-4f20-8018-039dc1014f74","block_type":"box","text":"accounting principles should be explained in detail and justified. Accounting restatements should be","page_number":216,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"2631710e-9c20-4a25-aab1-dc1ac2ee2180","block_type":"box","text":"explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":216,"box":{"x":116,"y":118,"width":638,"height":12}},{"id":"57d895b0-6042-49e5-a2d6-530503239f8a","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":216,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"767bb5ac-aa4b-4e46-a44d-d93e57b12eb3","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction,","page_number":216,"box":{"x":117,"y":165,"width":737,"height":12}},{"id":"501d8a70-e390-4733-bfb6-376020d88cbe","block_type":"box","text":"non-financial information, internal control frameworks and Enterprise Risk Management systems. In","page_number":216,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"2653d55a-8e27-4be5-a1cd-1be473186c45","block_type":"box","text":"our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":216,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"cb5653f4-7454-44b9-b8d0-8d751d762bb9","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders. Audit committees","page_number":216,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"87c591d6-8d68-4674-9b84-65a844104764","block_type":"box","text":"should have a procedure in place for assessing the independence of the auditor and the quality of the","page_number":216,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"0599cb13-a193-4f1a-8322-c98cc1a09f61","block_type":"box","text":"external audit process annually.","page_number":216,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"dd6e8d8b-1fc1-4dba-974d-93ebd229028e","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to","page_number":216,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"3458c723-ac34-4edd-bd5d-978f1bed6c96","block_type":"box","text":"how a company manages risks or generates revenue. BAIS finds it helpful to our understanding when","page_number":216,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"aa162799-75f0-4ea5-bde3-6e818431e900","block_type":"box","text":"companies provide robust, standardized disclosures on their material sustainability-related risks and","page_number":216,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"f53db5cc-7de8-4d34-b085-0acac0f485d8","block_type":"box","text":"opportunities. The International Sustainability Standards Board (ISSB) is one entity working to meet","page_number":216,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"61e31bb4-cbdd-4b8a-9c4a-0c6c32c9740c","block_type":"box","text":"these objectives through its reporting standards, which may be helpful to companies in preparing such","page_number":216,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"c4eb6c95-db3e-41d5-ba83-eb1ccff28c2e","block_type":"box","text":"reports.","page_number":216,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"53af9324-6611-45d9-b227-2d69a6205d78","block_type":"box","text":"9","page_number":216,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"3b9934d4-63dc-4b79-8926-0a6e8db81db2","block_type":"box","text":"However, we do not mandate any specific disclosure framework, and note that companies in","page_number":216,"box":{"x":179,"y":351,"width":696,"height":12}},{"id":"bc31afbf-3e9f-4d10-bc72-a1ec58160077","block_type":"box","text":"certain jurisdictions are subject to mandatory reporting requirements under standards specified by","page_number":216,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"d9b94a3c-bb4e-46b1-afb8-ce92aa142d1f","block_type":"box","text":"policy makers.","page_number":216,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"3e9c835e-888c-4670-acf3-3f0d51f01ccb","block_type":"box","text":"10","page_number":216,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"af0d3fae-7e66-4a6a-886e-f4b6d9423fa7","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":216,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"924c3b8a-e35a-4227-b0a0-c9cb73e76567","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for","page_number":216,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"af597ad5-e18c-44fc-9a74-941ad9e4edf9","block_type":"box","text":"employees, and potentially other stakeholders, can be a useful mechanism for ensuring that senior","page_number":216,"box":{"x":116,"y":444,"width":738,"height":12}},{"id":"047e4e78-7bff-408a-b9ba-a6c3a8483b45","block_type":"box","text":"management and the board are aware of potential misconduct or breaches in risk management and","page_number":216,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"cfce32cf-8add-404f-976a-086ba9024efc","block_type":"box","text":"internal control processes.","page_number":216,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"b132e582-5f48-4d35-9ce1-99543b9bb5ae","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in","page_number":216,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"7ee3e187-8960-493c-a0c3-752a38124f20","block_type":"box","text":"the quality of corporate reporting. It is helpful when the audit report gives some insight into the scope","page_number":216,"box":{"x":116,"y":521,"width":752,"height":12}},{"id":"6ff9f37e-555f-4cec-ad73-49e05695a3d7","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":216,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"78380d94-d0dc-4566-a758-b838a5451a29","block_type":"box","text":"comprehensive and effective audit is time and resource intensive, and the audit fee should be","page_number":216,"box":{"x":116,"y":552,"width":700,"height":12}},{"id":"5c015749-7ee6-4c0a-8d79-d13418793182","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":216,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"def7cb47-b606-4f0a-bba6-89c00400b2e0","block_type":"box","text":"degree that may prompt concerns about the independence of the audit. The audit committee should","page_number":216,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"fa22124d-2c3c-49e9-9724-d6fb7474ce0a","block_type":"box","text":"explain its position on auditor tenure and how it confirmed that the auditor remained independent.","page_number":216,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"c5b1719b-d857-4698-b695-881eb694ea5b","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or","page_number":216,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"cf1690e1-274b-400a-8aae-079c0bf347c6","block_type":"box","text":"there are material misstatements in financial reports. In markets where relevant, we may vote against a","page_number":216,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"250df8b7-abaa-4f45-b872-586dbb8b795f","block_type":"box","text":"proposal to approve the financial statements or the discharge of the board when we are concerned","page_number":216,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"608e398c-2e51-4a52-a55a-c706e73e1555","block_type":"box","text":"about the quality of corporate reporting or the audit. We may vote against proposals to appoint the","page_number":216,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"58787085-6728-4214-94ec-a197d09bab9b","block_type":"box","text":"auditor, ratify the audit report, or approve the audit fee if we are concerned about the auditor’s","page_number":216,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"1e7b725e-8766-44a8-87e4-8064b7a4d469","block_type":"box","text":"independence, the quality of the audit, or there are material misstatements in financial reports and the","page_number":216,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"5f4e38e4-3547-434c-9631-2a6b5fda111e","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":216,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"bd0220f8-f342-4233-b903-3294151e9da2","block_type":"box","text":"9","page_number":216,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"4043de19-148a-43dd-86cf-35ca88e94f00","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":216,"box":{"x":170,"y":815,"width":666,"height":10}},{"id":"ba746429-a61e-4745-986e-3275491a4a1e","block_type":"box","text":"Foundation. Please refer to the IFRS website to learn more about the framework and standards S1 “General","page_number":216,"box":{"x":171,"y":828,"width":641,"height":8}},{"id":"dc88f9af-f42e-4802-a067-34915fae5ef0","block_type":"box","text":"Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related Disclosures.”","page_number":216,"box":{"x":171,"y":841,"width":672,"height":9}},{"id":"c823cb54-e6e0-4e70-8311-a32367ed6195","block_type":"box","text":"10","page_number":216,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"4f43169a-09bc-4d46-b2e5-1396bf103ab5","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional-profiles","page_number":216,"box":{"x":170,"y":854,"width":705,"height":9}},{"id":"daa02e4a-49e9-44ce-8e8b-9a41e1fa5fc2","block_type":"box","text":"issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company","page_number":216,"box":{"x":170,"y":867,"width":615,"height":9}},{"id":"abd342c9-c2d3-4c15-99ab-c91c3ab50d83","block_type":"box","text":"reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en","page_number":216,"box":{"x":170,"y":880,"width":468,"height":9}},{"id":"66a62cbf-09a0-4ceb-b166-32dc3de76733","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":216,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"670bfada-bb93-42d7-9742-e2fd9d27ddd4","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":216,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"f762f0d6-0f8f-40dc-a66a-c66037649490","block_type":"box","text":"13","page_number":216,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"dcf9ebce-ff4e-4713-aad3-c58799f2e334","block_type":"box","text":"NM1026U-6042785-216/259","page_number":216,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a809a265-00f9-44ef-b1d1-f2ce703503fc","block_type":"box","text":"Shareholder rights and protections","page_number":217,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"7b146d18-d5be-4549-a041-85fda8029c36","block_type":"box","text":"General shareholder meetings","page_number":217,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"be898fd9-c384-422c-b5d3-d3f1ce0eddfb","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine","page_number":217,"box":{"x":117,"y":144,"width":768,"height":13}},{"id":"7cae303c-1a79-453b-b73e-aa708620d093","block_type":"box","text":"items of business are discussed and voted on by shareholders in attendance or submitting proxy votes.","page_number":217,"box":{"x":117,"y":160,"width":771,"height":12}},{"id":"4f2cb4fe-717b-430b-ae05-8c7bbb58e9a0","block_type":"box","text":"Companies should disclose materials relevant to the shareholder meeting sufficiently in advance so","page_number":217,"box":{"x":117,"y":175,"width":742,"height":13}},{"id":"f9a45dbd-bd2a-43a3-9e7e-e830344916fa","block_type":"box","text":"that shareholders can take them into consideration in their voting decisions. Many companies offer","page_number":217,"box":{"x":116,"y":191,"width":736,"height":12}},{"id":"824b4efa-ba3f-41bd-9eec-d30276521bd5","block_type":"box","text":"shareholders the option of participating in the meeting virtually which, whilst welcome, should not limit","page_number":217,"box":{"x":116,"y":207,"width":758,"height":12}},{"id":"32cedc38-aadb-40a4-8d72-8b78d7346fa2","block_type":"box","text":"the rights of shareholders to participate as they would during an in-person meeting.","page_number":217,"box":{"x":116,"y":222,"width":622,"height":12}},{"id":"9ffef6bb-0c5c-4b27-83f0-a3ad117ce0b8","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are","page_number":217,"box":{"x":116,"y":251,"width":757,"height":12}},{"id":"0ff0e811-3b5c-4521-bcac-aadccf58ca2f","block_type":"box","text":"not provided in a timely manner or do not provide sufficient information for us to make an informed","page_number":217,"box":{"x":117,"y":266,"width":733,"height":12}},{"id":"117bad00-3103-48dc-b92c-fb225974ae40","block_type":"box","text":"voting decision. We may vote against directors if the format of the shareholder meeting does not","page_number":217,"box":{"x":116,"y":282,"width":719,"height":12}},{"id":"9395c05b-4d6d-48ac-a0cc-864ed99e4da3","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":217,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"a44fbfbf-d59d-4aea-a77b-5ebae7d8c705","block_type":"box","text":"Bylaw amendments","page_number":217,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"117f5423-b46b-4f4e-9e2a-95ffe6afa232","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally","page_number":217,"box":{"x":116,"y":355,"width":753,"height":12}},{"id":"b9340749-ceed-4877-ba16-7a4e2a35a265","block_type":"box","text":"support those that are aligned with the interests of minority shareholders. Any material changes to the","page_number":217,"box":{"x":116,"y":370,"width":761,"height":12}},{"id":"26ed4421-e1a9-4b8e-a032-56eb7570010c","block_type":"box","text":"bylaws should be explained in detail and put to a shareholder vote.","page_number":217,"box":{"x":117,"y":386,"width":500,"height":12}},{"id":"d1f74e73-95c1-4f83-b8b5-73fa3a0f6b68","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce","page_number":217,"box":{"x":116,"y":415,"width":753,"height":12}},{"id":"ef1d28bf-e155-4575-b45a-a45de2dee959","block_type":"box","text":"additional burdens. We may vote against directors if material changes are made to the bylaws without","page_number":217,"box":{"x":116,"y":430,"width":760,"height":12}},{"id":"959f6010-f36b-48b7-b3a3-2a552bcf44c9","block_type":"box","text":"shareholder approval.","page_number":217,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"0b5e63fe-bb4a-42e0-9574-f19a0ae886c3","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":217,"box":{"x":117,"y":474,"width":688,"height":12}},{"id":"54245790-80e3-4054-9732-46d8a7d574fb","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to call a special meeting of","page_number":217,"box":{"x":117,"y":490,"width":704,"height":12}},{"id":"37a6ae9f-efe8-496c-9d02-b5d0971a2784","block_type":"box","text":"shareholders. The shareholding required to exercise this right should balance its utility with the cost to","page_number":217,"box":{"x":116,"y":505,"width":761,"height":12}},{"id":"f117996a-b526-4a07-97a9-462cb4112b2b","block_type":"box","text":"the company of holding special meetings.","page_number":217,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"e0d42271-661c-444e-a56d-424b96aa777a","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":217,"box":{"x":117,"y":550,"width":688,"height":12}},{"id":"9b318dcd-e3b0-47d1-8bf4-5293efe5a372","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to nominate directors to the","page_number":217,"box":{"x":117,"y":565,"width":710,"height":12}},{"id":"e74000e0-64af-4ca8-a978-e19b6694c98c","block_type":"box","text":"company’s board. The threshold for this right should be set so that shareholders can exercise it without","page_number":217,"box":{"x":116,"y":581,"width":770,"height":12}},{"id":"5a25a013-3b9c-4d01-87c8-e378ea90cea5","block_type":"box","text":"being unduly disruptive to the board’s own nomination process.","page_number":217,"box":{"x":117,"y":596,"width":473,"height":12}},{"id":"595fd937-0591-4d70-b352-b6ee392eadb4","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability","page_number":217,"box":{"x":116,"y":625,"width":728,"height":12}},{"id":"b995882f-f64a-4af4-98b2-aef4b38c2ce4","block_type":"box","text":"mechanisms. We may vote for a shareholder proposal seeking the addition of either of these","page_number":217,"box":{"x":117,"y":640,"width":691,"height":12}},{"id":"e2edd0d7-0a34-41ac-8cb1-97457b06c11a","block_type":"box","text":"provisions to a company’s bylaws.","page_number":217,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"a889dcf2-13d6-47c5-b884-5b4a475b8c97","block_type":"box","text":"Change of domicile","page_number":217,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"871ceb67-f361-435e-918a-685b045fe8e6","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the","page_number":217,"box":{"x":116,"y":713,"width":717,"height":12}},{"id":"ad3149c0-2a84-4d22-822b-b82af1bae4b8","block_type":"box","text":"rationale for doing so is consistent with the company’s long-term strategy and business model and the","page_number":217,"box":{"x":117,"y":729,"width":756,"height":12}},{"id":"790780f8-c5e0-4105-8f2e-528cdff52dc6","block_type":"box","text":"related costs are immaterial.","page_number":217,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"eaa96dc2-206c-4515-8d18-07ecc1a6d150","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":217,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"e84b2310-64c8-4ce8-99d6-2140c0c5b4f3","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":217,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"9f2dd140-9906-4ca1-b502-2a162e067bc2","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":217,"box":{"x":116,"y":817,"width":499,"height":12}},{"id":"f66b39f9-56c3-45e6-a88f-0b7f4d4473f6","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and","page_number":217,"box":{"x":117,"y":846,"width":762,"height":12}},{"id":"1342e600-677c-4ea4-8938-6ea1c48e5f14","block_type":"box","text":"explained in the context of long-term strategy and business dynamics. Such changes may significantly","page_number":217,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"bcd2c5be-fc1a-4cce-9d67-c4f79e2251dd","block_type":"box","text":"alter an investor’s views on the suitability of a company for their investment strategy or portfolio.","page_number":217,"box":{"x":116,"y":877,"width":716,"height":12}},{"id":"47daa940-7631-4bd3-8277-d0e12da48f97","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"efd57fad-e044-4ebc-b66f-cf8ceea4cd2a","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":217,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"d35f62e1-f5aa-442a-8622-8045cb9a6110","block_type":"box","text":"14","page_number":217,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"e635f8a0-bd98-4a26-92e1-9c7c231edf7e","block_type":"box","text":"NM1026U-6042785-217/259","page_number":217,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4fcbce3d-2e92-4d2d-a388-8377a50ffef6","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its","page_number":218,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"618929fb-0fcd-4294-ad87-6a3e8cbd2695","block_type":"box","text":"business if the board has not provided a credible argument for change.","page_number":218,"box":{"x":117,"y":102,"width":530,"height":13}},{"id":"a7a51c9f-afb0-4289-92d9-3bedca6c6a88","block_type":"box","text":"Shareholder proposals","page_number":218,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"1e971503-8dcd-4054-b2b4-cc9bfd152089","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals","page_number":218,"box":{"x":116,"y":172,"width":756,"height":12}},{"id":"315ed30a-40e1-4495-8c3d-e805f3c8abf5","block_type":"box","text":"to the general shareholder meeting asking a company to take a particular course of action subject to","page_number":218,"box":{"x":116,"y":188,"width":749,"height":12}},{"id":"fc1654ee-9e5d-4d33-9ac2-bd5486241094","block_type":"box","text":"the proposal being supported by a majority of votes cast at the meeting. The topics raised can address","page_number":218,"box":{"x":116,"y":203,"width":767,"height":12}},{"id":"79aa39bb-32c2-43e9-8185-e6db1fad4998","block_type":"box","text":"a range of matters that may be relevant to a company’s business.","page_number":218,"box":{"x":116,"y":219,"width":492,"height":12}},{"id":"f3fbd388-8fbd-45e4-8cdd-46abd8008c7f","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":218,"box":{"x":116,"y":250,"width":767,"height":12}},{"id":"e563c4a8-9989-4404-879d-5ec52fb6d2b4","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with","page_number":218,"box":{"x":116,"y":265,"width":697,"height":12}},{"id":"2cd51b09-8bd2-4daa-94af-2810ac28a40a","block_type":"box","text":"shareholders’ interests, and what impact the proposal being acted upon might have on financial","page_number":218,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"7f1bedfe-7bbe-4832-b503-d2ccbafaf45a","block_type":"box","text":"performance.","page_number":218,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"7dc942a1-955c-4049-95cf-671e709dddc0","block_type":"box","text":"Our general approach where we have concerns about","page_number":218,"box":{"x":116,"y":327,"width":393,"height":12}},{"id":"1d9be75e-a4b4-462d-9047-a4d706864630","block_type":"box","text":"t a company’s governance, disclosures or","page_number":218,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"a37d2875-a4a3-4ae7-b6f6-77efabb4903f","block_type":"box","text":"performance is to engage to understand the apparent diffe","page_number":218,"box":{"x":117,"y":343,"width":423,"height":12}},{"id":"aba021b6-bb97-4608-989e-b52ed3c6749c","block_type":"box","text":"rence in perspective. If we are concerned a","page_number":218,"box":{"x":541,"y":343,"width":319,"height":12}},{"id":"f43d73bd-3c15-4614-a740-d928ea995b2c","block_type":"box","text":"company is not acting in shareholders’ financial interest","page_number":218,"box":{"x":116,"y":358,"width":403,"height":12}},{"id":"4d3363a7-89b9-48c2-ac99-cf38e0366c5f","block_type":"box","text":"s, we may vote against the election of directors.","page_number":218,"box":{"x":519,"y":358,"width":351,"height":12}},{"id":"05d49f72-d574-4157-9f5d-0fb08317ba4f","block_type":"box","text":"We may support a relevant shareholder proposal if doing","page_number":218,"box":{"x":116,"y":374,"width":418,"height":12}},{"id":"d327e091-f3be-49e4-b84c-6cf3fce374b3","block_type":"box","text":"so is aligned with our clients’ financial interests.","page_number":218,"box":{"x":534,"y":374,"width":348,"height":12}},{"id":"46d0a3ee-2562-4b80-87d4-aebf445d58a3","block_type":"box","text":"We generally do not support shareholder proposals that","page_number":218,"box":{"x":116,"y":389,"width":410,"height":12}},{"id":"b6da57fe-2d3d-45eb-a6cd-8ffede2b1923","block_type":"box","text":"are legally binding on the company, seek to alter","page_number":218,"box":{"x":526,"y":389,"width":357,"height":12}},{"id":"27faed72-6b45-4954-9946-b0b33771d0d2","block_type":"box","text":"a company’s strategy or direct its operations,","page_number":218,"box":{"x":116,"y":405,"width":331,"height":12}},{"id":"722cd482-411d-463b-8656-6b5f0599311a","block_type":"box","text":"or are unrelated to how a company manages risk or","page_number":218,"box":{"x":447,"y":405,"width":381,"height":12}},{"id":"3adfdf6a-7ffe-4672-bee8-77644c0ffc42","block_type":"box","text":"generates financial returns.","page_number":218,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"bdf6073c-d7be-4294-b444-f69c091fa798","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place","page_number":218,"box":{"x":117,"y":451,"width":737,"height":12}},{"id":"0e4b9bbb-0574-440f-9577-76e75c4c9c36","block_type":"box","text":"restrictions and limitations on how we can interact with the companies in which we invest on behalf of","page_number":218,"box":{"x":117,"y":467,"width":755,"height":12}},{"id":"c1e97a3d-1426-4775-aaec-a2d77c871179","block_type":"box","text":"our clients, including our ability to submit shareholder proposals. We do not submit shareholder","page_number":218,"box":{"x":116,"y":482,"width":712,"height":12}},{"id":"1fd63ce9-5b60-4d06-be38-bb910a63cd18","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":218,"box":{"x":117,"y":498,"width":770,"height":12}},{"id":"72b4980b-3ef4-472e-9f28-dd6149419287","block_type":"box","text":"Corporate political activities","page_number":218,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"46f60949-4250-489a-8f71-906b0f477148","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":218,"box":{"x":116,"y":568,"width":733,"height":12}},{"id":"9ebcc9c3-ed8d-464e-b191-f793dc1666ad","block_type":"box","text":"jurisdictions in which they engage. When a corporation reports material financial risk related to policy","page_number":218,"box":{"x":115,"y":583,"width":754,"height":12}},{"id":"c2719611-cb6b-4a41-816f-70c84cad7899","block_type":"box","text":"and or regulatory changes, BAIS may seek to understand how it is addressing the material risk","page_number":218,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"e810ea17-d4de-4a1e-b04c-39c880e46402","block_type":"box","text":"identified. We seek to understand how companies engage in corporate political activities and ensure","page_number":218,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"dcca4aef-1148-4d21-8812-04d46403aaaa","block_type":"box","text":"that their participation is consistent with their public statements on policy matters material to the","page_number":218,"box":{"x":116,"y":630,"width":714,"height":12}},{"id":"26ae1519-f4a2-4e43-aec1-b30b6efc2281","block_type":"box","text":"company’s long-term strategy. The board should be aware of the approach taken by management on","page_number":218,"box":{"x":116,"y":645,"width":756,"height":12}},{"id":"1a2cf3d2-5a32-4af4-a33f-ef0a338c6f79","block_type":"box","text":"corporate political activities as there can be reputational risks arising from inconsistencies between a","page_number":218,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"78c25d0c-27be-4792-924c-4359b7fe768e","block_type":"box","text":"company’s policy engagement and stated policy positions. Companies should, as a minimum, meet all","page_number":218,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"03dc90e2-e775-49ae-a9cc-bb5bafbd9bd7","block_type":"box","text":"regulatory disclosure requirements on political activities. We may engage a company where we would","page_number":218,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"20c56e71-f81a-4dee-9f5b-f1f73cc25d01","block_type":"box","text":"like to better understand its approach to policy engagement, where relevant.","page_number":218,"box":{"x":117,"y":707,"width":563,"height":12}},{"id":"8d69d5de-66fa-4bc2-a3b2-5add005e45f3","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their","page_number":218,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"48fa26b9-2f1a-4052-b0b9-04f0edad3ea7","block_type":"box","text":"policy priorities and the policy positions of the trade associations of which they are active members and","page_number":218,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"cbe71e9f-b85b-43ec-8181-9b8a5062c868","block_type":"box","text":"any engagements undertaken by trade associations on behalf of members.","page_number":218,"box":{"x":116,"y":769,"width":556,"height":12}},{"id":"d19c7ade-5ce4-4fb1-bd63-6783fae8b359","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s","page_number":218,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"1bf4ee5c-f0d0-42be-bbd8-eac90ebaee28","block_type":"box","text":"disclosures are insufficient to address the material risk it has identified.","page_number":218,"box":{"x":116,"y":816,"width":524,"height":9}},{"id":"b526065b-28cc-4dfa-b38b-3a430f75c640","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"e444b2f1-1813-4aa4-b6d7-9b690c358968","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":218,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"eb9f4141-68cb-4c0b-912a-e1a08fe9993f","block_type":"box","text":"15","page_number":218,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"097e25c6-ab59-445b-af48-98ad2999785a","block_type":"box","text":"NM1026U-6042785-218/259","page_number":218,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2bb9a4bc-280f-491b-90b6-e7ac50975af1","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":219,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"7fc22d52-dd26-4e03-a845-ae15617a94aa","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their","page_number":219,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"ea533da7-93c4-43d6-a911-2831fa7b75f7","block_type":"box","text":"business operations. In our experience, sustainability-related factors","page_number":219,"box":{"x":117,"y":133,"width":505,"height":12}},{"id":"edefcd16-c3c9-4748-939b-a90cc610d835","block_type":"box","text":"11","page_number":219,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"b8b51cdd-090e-47fd-80d6-193da7b020dd","block_type":"box","text":"that are relevant to a company’s","page_number":219,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"a80c80a4-258a-4392-afc7-3e0523da6f02","block_type":"box","text":"business or material to its financial performance, are generally operational considerations embedded","page_number":219,"box":{"x":117,"y":149,"width":752,"height":12}},{"id":"4851a9ff-5814-45c3-a40d-02dfecfc7ef8","block_type":"box","text":"into day-to-day management systems. Certain sustainability issues may also inform long-term strategic","page_number":219,"box":{"x":117,"y":164,"width":769,"height":12}},{"id":"81f5e6b9-f4c1-4ba9-b8a2-34ad4e544444","block_type":"box","text":"planning, for example, investing in product innovation in anticipation of changing consumer demand or","page_number":219,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"ceb561fd-f3ae-4380-a691-e713daaa1f02","block_type":"box","text":"adapting supply chains in response to changing regulatory requirements.","page_number":219,"box":{"x":116,"y":195,"width":546,"height":12}},{"id":"d8b9f47c-9213-4f98-a6f0-294ee984ab9f","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business","page_number":219,"box":{"x":116,"y":226,"width":769,"height":12}},{"id":"06d68fd3-c7eb-487b-b77f-b5449853fca0","block_type":"box","text":"relevant will vary by company business model, sector, key markets, and time horizon, amongst other","page_number":219,"box":{"x":117,"y":241,"width":751,"height":12}},{"id":"4d5fd0c1-aab4-4fab-a60e-2803177aa5a8","block_type":"box","text":"considerations. From company disclosures and our engagement, we aim to understand how","page_number":219,"box":{"x":116,"y":257,"width":689,"height":12}},{"id":"8d88fdcc-6ebd-490b-b077-c04bf994834d","block_type":"box","text":"management is identifying, assessing and integrating material sustainability-related risks and","page_number":219,"box":{"x":117,"y":272,"width":694,"height":12}},{"id":"5906e15b-8882-4528-b586-7147113076c8","block_type":"box","text":"opportunities into their business decision-making and practices. Doing so helps us undertake a more","page_number":219,"box":{"x":116,"y":288,"width":752,"height":12}},{"id":"8b8e46b1-1e2e-4f2e-94e8-500d24f619d8","block_type":"box","text":"holistic assessment of a company’s potential financial performance and the likely risk-adjusted returns","page_number":219,"box":{"x":117,"y":303,"width":761,"height":12}},{"id":"2f0eea64-0a63-461f-84f7-6e658632e1fc","block_type":"box","text":"of an investment.","page_number":219,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"0902e28d-3f6f-4b8c-9c2b-3f3fa887c644","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about","page_number":219,"box":{"x":116,"y":349,"width":753,"height":13}},{"id":"0723f9a4-cd57-4598-9f07-be38ffe32fdb","block_type":"box","text":"how a company is managing or disclosing its approach to material sustainability-related risks that may","page_number":219,"box":{"x":117,"y":365,"width":761,"height":12}},{"id":"36f55bde-165c-4b81-9399-361cf95f0a62","block_type":"box","text":"impact financial returns.","page_number":219,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"7aecd20e-37a2-4522-be54-12355ec08b86","block_type":"box","text":"Key stakeholders","page_number":219,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"0b6f10a1-6b74-40c6-a554-830fa4c3a01d","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various","page_number":219,"box":{"x":117,"y":449,"width":727,"height":12}},{"id":"6faeaf32-b3fd-47c7-adf3-f0c7315bce09","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":219,"box":{"x":117,"y":465,"width":766,"height":12}},{"id":"cac78e30-e98a-4b28-a5ac-53fe11d03388","block_type":"box","text":"stakeholders based on what is material to their business and long-term financial performance. For","page_number":219,"box":{"x":116,"y":480,"width":731,"height":12}},{"id":"28118c16-e5e5-4682-aa35-e471a60aec01","block_type":"box","text":"many companies, key stakeholders include employees, business partners (such as suppliers and","page_number":219,"box":{"x":117,"y":496,"width":726,"height":12}},{"id":"6a761c31-2cce-489d-bb6e-bcde8560e640","block_type":"box","text":"distributors), clients and consumers, regulators, and the communities in which they operate.","page_number":219,"box":{"x":116,"y":511,"width":687,"height":12}},{"id":"693f81c8-8f02-4ed0-92da-bf6725e1dc92","block_type":"box","text":"Companies that appropriately balance the interests of investors and other stakeholders are, in our","page_number":219,"box":{"x":117,"y":527,"width":730,"height":12}},{"id":"07e2eb30-16d2-4830-9f43-f9472a6cc852","block_type":"box","text":"experience, more likely to be financially resilient over time.","page_number":219,"box":{"x":116,"y":542,"width":438,"height":12}},{"id":"b28db632-3ca9-4864-bb28-795a1d3e0060","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":219,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"1e8db7ef-bc58-4154-ac31-0798216d8df7","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial","page_number":219,"box":{"x":117,"y":611,"width":737,"height":12}},{"id":"064d6f2c-6434-4ec3-9715-e92b8b68466e","block_type":"box","text":"objectives. Consistent with the objectives of those investment strategies, our stewardship activity in","page_number":219,"box":{"x":116,"y":627,"width":741,"height":12}},{"id":"d90ff4f6-ba94-4a86-a61f-2b06400ee9e8","block_type":"box","text":"relation to the holdings in those funds differs in some respects from BAIS’ benchmark guidelines, which","page_number":219,"box":{"x":117,"y":642,"width":771,"height":12}},{"id":"5f55b6d5-a222-4fdc-9330-4b2b0c1efae8","block_type":"box","text":"are described above. Specifically, for those funds’ holdings, we look to investee companies to","page_number":219,"box":{"x":116,"y":658,"width":699,"height":12}},{"id":"5cef932d-0e26-48c2-a4f4-f35124b0f097","block_type":"box","text":"demonstrate that they are aligned with a decarbonization pathway that means their business model","page_number":219,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"8cbcc643-16c0-4f16-8803-31f9de7a37d1","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":219,"box":{"x":116,"y":689,"width":754,"height":12}},{"id":"9e4e6637-d0c8-42f4-9d08-80008863c7e7","block_type":"box","text":"above pre-industrial levels. In addition, clients in separately managed accounts may instruct BlackRock","page_number":219,"box":{"x":116,"y":704,"width":766,"height":12}},{"id":"48c610b9-7210-44b2-b837-d5d282d1692c","block_type":"box","text":"to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":219,"box":{"x":116,"y":720,"width":692,"height":12}},{"id":"bf373731-3915-48e0-9054-a619a5375e25","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable","page_number":219,"box":{"x":116,"y":735,"width":765,"height":12}},{"id":"b1a0bd12-9148-4f4c-8133-258796f897c0","block_type":"box","text":"fund board or client.","page_number":219,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"e33ad481-910e-440c-95f5-e308b99b8eff","block_type":"box","text":"11","page_number":219,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"5248fdfb-be75-429d-954a-649929988e8e","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":219,"box":{"x":171,"y":776,"width":691,"height":10}},{"id":"f07e8a6e-bd5d-4a1e-916a-a90014a406b7","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":219,"box":{"x":170,"y":789,"width":686,"height":9}},{"id":"d352c448-2fe3-40a9-b247-c1d9a5186122","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":219,"box":{"x":170,"y":802,"width":682,"height":9}},{"id":"e2c84360-1ac0-4afe-a8d4-350ebe881724","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":219,"box":{"x":170,"y":815,"width":683,"height":9}},{"id":"1ebdae37-5631-44f1-9de2-bd3fb7eed317","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will effectively","page_number":219,"box":{"x":170,"y":828,"width":708,"height":9}},{"id":"95fb52ab-dc65-464e-a916-fb56b6784c22","block_type":"box","text":"evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Governance is","page_number":219,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"e09eccfb-537d-45cf-b87d-81c1551d553c","block_type":"box","text":"the core means by which boards can oversee the creation of durable financial value over time. Appropriate risk","page_number":219,"box":{"x":170,"y":853,"width":658,"height":10}},{"id":"b291fd32-d630-46df-bb18-bea6c9d708a7","block_type":"box","text":"oversight of business-relevant and material sustainability-related considerations is a component of a sound governance","page_number":219,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"9dafebe1-5db6-4f98-9be9-b0639f150b52","block_type":"box","text":"framework.","page_number":219,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"3991b879-d939-44c2-a7ca-7bef42d4b74e","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":219,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4fa1c7c2-8f85-4008-a942-42d3b8d970d9","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":219,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"4fd6ac0b-f9c5-44c4-be88-eb0fffedb2dc","block_type":"box","text":"16","page_number":219,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"2b60568b-5cf3-46ec-a276-46356715ff47","block_type":"box","text":"NM1026U-6042785-219/259","page_number":219,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"55e660be-9247-4694-b92c-094dd894077c","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services","page_number":220,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"caa32794-07ee-4767-a0c5-e74b4c0fba82","block_type":"box","text":"that contribute to real world decarbonization or have a carbon intensive business model and face","page_number":220,"box":{"x":116,"y":102,"width":724,"height":10}},{"id":"301851a8-b832-4950-a9a2-7444b65f0b5d","block_type":"box","text":"outsized impacts from the low carbon transition, based on reported and estimated scopes 1, 2, and 3","page_number":220,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"665b2e18-bc51-47e8-92c3-be9a83bf7018","block_type":"box","text":"greenhouse gas emissions. These companies should provide disclosures that set out their","page_number":220,"box":{"x":116,"y":134,"width":675,"height":12}},{"id":"0ea3280e-3375-4a4e-8be2-209f81b87d47","block_type":"box","text":"governance, strategy, risk management processes and metrics and targets relevant to","page_number":220,"box":{"x":116,"y":149,"width":646,"height":12}},{"id":"01c643cc-9843-4ac4-934f-4380da7c9b6a","block_type":"box","text":"decarbonization. It is helpful to investors’ understanding when these disclosures include an explanation","page_number":220,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"00759559-f2ea-441b-b8a9-b01cfa832a21","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":220,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"5c34cc5b-050c-4ecf-93ef-dd512acb17d6","block_type":"box","text":"scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for","page_number":220,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"664d2922-8480-4566-b2f8-dc7dcd8377de","block_type":"box","text":"scope 1 and 2 emissions.","page_number":220,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"e3dcdd75-caba-4c52-b39e-615b524eea53","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against","page_number":220,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"43c0e4c1-d8a8-4b68-9ab6-46427dabbdf7","block_type":"box","text":"directors or support for a relevant shareholder proposal if a company does not appear to be adequately","page_number":220,"box":{"x":116,"y":258,"width":771,"height":12}},{"id":"3bc675b8-7d43-4a42-b0e4-542f0ff2898e","block_type":"box","text":"acting to address or disclosing material climate-related risks, consistent with the parameters set out in","page_number":220,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"28705ee4-d3e9-42a0-a328-acae8e19376b","block_type":"box","text":"these climate- and decarbonization-specific guidelines. We may recommend supporting shareholder","page_number":220,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"620c0a7a-4809-4ad1-810e-a165da0c913e","block_type":"box","text":"proposals seeking information relevant to a company’s stated low-carbon transition strategy or targets","page_number":220,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"bc3cd440-c7ac-4ab5-bd5b-7a77c75cd991","block_type":"box","text":"that the company does not currently provide and that would be helpful to investment decision-making.","page_number":220,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"c9bfe96c-3d4d-417a-bdfc-feda256952de","block_type":"box","text":"We would not recommend support for shareholder proposals that seek to constrain board or","page_number":220,"box":{"x":116,"y":335,"width":689,"height":12}},{"id":"d4a04c3f-4c0e-4905-9009-79b004b27b78","block_type":"box","text":"management decision-making or direct specific business or strategic decisions. As under the BAIS","page_number":220,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"f6e8dd56-c645-4d2f-8ddf-00bcb2065837","block_type":"box","text":"benchmark approach, the active portfolio managers are ultimately responsible for voting consistent","page_number":220,"box":{"x":117,"y":366,"width":737,"height":12}},{"id":"57e51223-32af-4638-aaf9-a92f46f27833","block_type":"box","text":"with their investment mandate and fund objectives. For the funds and accounts in scope, voting on","page_number":220,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"d3c40e55-f2b1-45b1-888c-9d35b12cfb5d","block_type":"box","text":"matters not related to climate risk and the energy transition is undertaken in line with BAIS’ benchmark","page_number":220,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"5e0dac9f-f108-4344-a260-72dc7a9afd9e","block_type":"box","text":"guidelines.","page_number":220,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"8b1068b2-27c5-4ebc-aa18-71c038a18364","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":220,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"879b0bc9-73a3-4743-a432-405632ccab48","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":220,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"719e8e9e-87d6-4066-ab92-a0303b521fb5","block_type":"box","text":"17","page_number":220,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"33aa7935-c452-40f1-b1e0-8d0fb085728a","block_type":"box","text":"NM1026U-6042785-220/259","page_number":220,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"711d9e82-a5b8-42d6-b62d-af4038b976f2","block_type":"box","text":"Appendix 1: How we fulfil and oversee our investment stewardship responsibilities","page_number":221,"box":{"x":168,"y":87,"width":668,"height":12}},{"id":"70abbc0e-4e20-45f0-bd40-eda1590cfb61","block_type":"box","text":"Oversight","page_number":221,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"767a8e16-36e0-4dd9-865a-34dcfd3dce1b","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including","page_number":221,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"31469664-cc07-4fc4-ba86-d3ca84d73202","block_type":"box","text":"voting in accordance with the BlackRock Active Investment Stewardship Global Engagement and","page_number":221,"box":{"x":116,"y":165,"width":726,"height":12}},{"id":"c8d2ceb4-61ab-44ca-a1e4-1ccf3e3679f1","block_type":"box","text":"Voting Guidelines (the “Guidelines”), which require the application of professional judgment and","page_number":221,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"533b8db2-c4f6-4e6b-b048-d03e409cebc2","block_type":"box","text":"consideration of each company’s unique circumstances, as well as input from active investors. BAIS is","page_number":221,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"903f0e45-3b59-48a8-92f7-124a2c348595","block_type":"box","text":"independent from BlackRock Investment Stewardship in our engagement and voting activities,","page_number":221,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"8a046115-75e6-424e-adb9-95ea4a6d14f7","block_type":"box","text":"reporting lines, and oversight.","page_number":221,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"727320db-ebc2-4fb4-862c-001ae2cba3df","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders","page_number":221,"box":{"x":116,"y":258,"width":765,"height":11}},{"id":"3c856d7d-d252-423e-8408-556acad3c42a","block_type":"box","text":"in BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s","page_number":221,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"7e095918-94f1-4cd0-854c-4c2056de7fdb","block_type":"box","text":"approach to investment stewardship on non-index equity investment strategies. The Group may advise","page_number":221,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"475d8577-1d70-41d0-bc26-82fba4d594f7","block_type":"box","text":"on and review amendments to BAIS’ policies and practices. It does not determine voting decisions,","page_number":221,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"eb63fc87-dd0b-4e2c-bdf5-6b662c4d95da","block_type":"box","text":"which are the responsibility of BAIS and the relevant active equity investors.","page_number":221,"box":{"x":116,"y":320,"width":568,"height":12}},{"id":"5e1cb9d1-4d7c-4999-83fc-4f3bce1a29aa","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues,","page_number":221,"box":{"x":117,"y":351,"width":721,"height":12}},{"id":"c88664e7-be61-49bb-81e0-4f4032a24675","block_type":"box","text":"executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a","page_number":221,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"69170da9-1d33-4dc1-89a2-182078e19e1d","block_type":"box","text":"manner consistent with the Guidelines. BAIS also conducts research on corporate governance issues","page_number":221,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"4e2abd23-622d-49b2-b92a-2915e20bcc21","block_type":"box","text":"and participates in industry discussions to contribute to and keep abreast of important developments in","page_number":221,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"cd31c967-d7f8-4d51-b3e0-72505f410e98","block_type":"box","text":"the corporate governance field. BAIS may use third parties for certain of the foregoing activities and","page_number":221,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"93bf5d37-7666-497a-a6c6-dcf2d71f0eb9","block_type":"box","text":"performs oversight of those third parties (see “Use and oversight of third-party vote services providers”","page_number":221,"box":{"x":117,"y":428,"width":765,"height":12}},{"id":"496fe21f-ee45-4228-b528-400cb2ba323b","block_type":"box","text":"below).","page_number":221,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"9a8cccf3-15c7-4588-9d5f-2bdf54eab71c","block_type":"box","text":"Voting guidelines and vote execution","page_number":221,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"9225b38e-43d4-4f55-8a78-7c2a4968e07f","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the","page_number":221,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"aa101766-f623-41da-aff9-a3387572abd7","block_type":"box","text":"voting items submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have","page_number":221,"box":{"x":116,"y":521,"width":728,"height":12}},{"id":"bd54299d-3c68-4b7a-aa87-d61506f5de54","block_type":"box","text":"voting authority. BlackRock votes (or refrains from voting) for each Fund for which we have voting","page_number":221,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"bed6ece5-407f-4133-ac68-f66b4de492a5","block_type":"box","text":"authority based on our evaluation of the alignment of the voting items with the long-term economic","page_number":221,"box":{"x":116,"y":552,"width":734,"height":12}},{"id":"6fb1292c-b474-4a42-bb1b-83194459a34a","block_type":"box","text":"interests of our clients, in the exercise of our independent business judgment, and without regard to the","page_number":221,"box":{"x":117,"y":568,"width":771,"height":12}},{"id":"8cdface0-0499-494d-a862-e335b71ec12f","block_type":"box","text":"relationship of the issuer (or any shareholder proponent or dissident shareholder) to the Fund, the","page_number":221,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"92f8ce35-bf65-44c6-9020-88740ae74d2a","block_type":"box","text":"Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":221,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"d5934420-3c2a-4454-8aaa-91c74b19dd8b","block_type":"box","text":"management policies and procedures,” below).","page_number":221,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"f42a8fc6-d27b-40c7-90cf-a06e0b6a5596","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the","page_number":221,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"0df68762-b4d2-4033-9fc5-960d02f7d493","block_type":"box","text":"Guidelines, although portfolio managers have the right to vote differently on their holdings if they","page_number":221,"box":{"x":117,"y":661,"width":713,"height":12}},{"id":"cdbc0b61-db42-4252-b24d-be2742693e30","block_type":"box","text":"determine doing so is more aligned with the investment objective and financial interests of clients","page_number":221,"box":{"x":116,"y":676,"width":719,"height":12}},{"id":"33243ba2-c7d0-4284-956b-367b9a8392c5","block_type":"box","text":"invested in the funds they manage.","page_number":221,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"e8f2e6f5-bfbb-4e32-a06b-5322d8002754","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case","page_number":221,"box":{"x":116,"y":723,"width":726,"height":12}},{"id":"c8964dc1-28d9-4d89-8d29-bd9862a81e90","block_type":"box","text":"basis, in the context of the individual circumstances of each company and the specific issue under","page_number":221,"box":{"x":117,"y":738,"width":728,"height":12}},{"id":"46aee770-86aa-4e26-aad7-746a36b30114","block_type":"box","text":"review. As such, the Guidelines do not indicate how BAIS will vote in every instance. Rather, they","page_number":221,"box":{"x":117,"y":754,"width":723,"height":12}},{"id":"bfc01b4c-fc28-4fca-b772-075f0b2784ef","block_type":"box","text":"reflect our view about corporate governance issues generally, and provide insight into how we typically","page_number":221,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"b4b1c31c-112a-45cd-bf6d-ff3e4fd7d149","block_type":"box","text":"approach issues that are commonly put to a shareholder vote. The Guidelines are reviewed annually","page_number":221,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"cd80d43c-3369-4db3-869c-62020089872b","block_type":"box","text":"and updated as necessary to reflect changes in market practices, developments in corporate","page_number":221,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"bf9473ee-69b8-4c8a-8d18-1cfc008a403f","block_type":"box","text":"governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":221,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"85fc1558-e200-47b7-9044-46a80b49cd4c","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":221,"box":{"x":116,"y":831,"width":751,"height":12}},{"id":"3ba97645-cef2-482e-a340-18dc7182042d","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such","page_number":221,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"44c71f27-1a2a-4460-a492-fee7ab986948","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":221,"box":{"x":117,"y":878,"width":768,"height":12}},{"id":"afe6db3d-ec91-4dde-9d73-cc473af1d8c6","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":221,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"16b106da-c896-4e08-9dde-de6bf34b83e8","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":221,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"e63974f1-772b-49a6-bbac-dccaefc9b671","block_type":"box","text":"18","page_number":221,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"7828398d-a04a-48cc-9885-8c137892120f","block_type":"box","text":"NM1026U-6042785-221/259","page_number":221,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"29a50682-7854-4cb9-aec8-b90a87fd705f","block_type":"box","text":"untimely notice of shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii)","page_number":222,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"e5f68ca1-7b71-4819-8696-2fd973ff5e3d","block_type":"box","text":"requirements to vote proxies in person; iv) “share-blocking” (requirements that investors who exercise","page_number":222,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"59cfcf9a-3632-4afc-90b5-749084aeb220","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":222,"box":{"x":116,"y":118,"width":728,"height":12}},{"id":"4df7967b-b16f-4891-8a89-d0d76004f569","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); v) potential difficulties in","page_number":222,"box":{"x":116,"y":134,"width":700,"height":12}},{"id":"831dff44-7252-43d2-889f-c3ad6d237481","block_type":"box","text":"translating the proxy; vi) regulatory constraints; and vii) requirements to provide local agents with","page_number":222,"box":{"x":116,"y":149,"width":723,"height":12}},{"id":"9930bc41-f1a4-41ee-9226-f23fee4a4135","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":222,"box":{"x":117,"y":165,"width":706,"height":12}},{"id":"b013daf4-16e4-42b3-ab09-76cd07ea8fdf","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":222,"box":{"x":116,"y":180,"width":742,"height":12}},{"id":"efc8f286-dc9d-4851-bc6f-c6f630a7ce10","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine","page_number":222,"box":{"x":117,"y":211,"width":759,"height":12}},{"id":"e99cb49e-7692-496b-8266-ecdd37d7edb2","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":222,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"d19cc1c1-ef03-438d-97c5-2bb2ec77c3e2","block_type":"box","text":"allocation) if the costs (including but not limited to opportunity costs associated with share-blocking","page_number":222,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"f62f8d99-627b-44e5-9683-23f2f7f918ab","block_type":"box","text":"constraints) associated with exercising a vote are expected to outweigh the benefit the client would","page_number":222,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"9847f5f6-bd61-4131-b2ac-f18a9ea08c71","block_type":"box","text":"derive by voting on the proposal.","page_number":222,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"55c1319c-0aa3-4013-847a-9d1066574333","block_type":"box","text":"Voting Choice","page_number":222,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"6e7ba5f9-9b18-4edd-8803-2450c178f474","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to","page_number":222,"box":{"x":117,"y":335,"width":733,"height":12}},{"id":"8acb2f06-3a7b-46b5-82c5-47fa92d0b79b","block_type":"box","text":"participate in the proxy voting process where legally and operationally viable.","page_number":222,"box":{"x":117,"y":351,"width":575,"height":12}},{"id":"4648389d-20ff-4fb3-a653-53fad0a5d386","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in","page_number":222,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"add441a2-201c-41ad-8e3b-275f65d28793","block_type":"box","text":"the U.S., UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In","page_number":222,"box":{"x":116,"y":397,"width":716,"height":12}},{"id":"773f99bc-c202-4c86-9350-8987f6b36d85","block_type":"box","text":"addition, institutional clients in separately managed accounts (SMAs) are eligible for BlackRock Voting","page_number":222,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"81328a81-f6f7-48f4-9328-e325e95fd64a","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":222,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"ea3fdbc2-7a94-411a-bfb8-cf2f6472cd08","block_type":"box","text":"12","page_number":222,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"9f35d20d-a003-4c58-90dd-1b5a9fe94eaf","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently","page_number":222,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"2ced34be-eb58-45b4-92ba-6105180c275e","block_type":"box","text":"depending on whether our clients have authorized BAIS to vote on their behalf, have authorized","page_number":222,"box":{"x":116,"y":475,"width":715,"height":12}},{"id":"43914f7f-6968-402f-a72c-9963fad9fded","block_type":"box","text":"BlackRock to vote in accordance with a third-party policy, or have elected to vote shares in accordance","page_number":222,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"a0023880-e29a-40f3-bf86-8ba6f5257073","block_type":"box","text":"with their own policy. Our clients have greater control over proxy voting because of Voting Choice.","page_number":222,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"b3fc0c85-cec1-46a2-854f-20245e480d5b","block_type":"box","text":"13","page_number":222,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"00351bf2-dc97-4f29-b39e-b682f300c9e9","block_type":"box","text":"Use and oversight of third-party vote services providers","page_number":222,"box":{"x":117,"y":537,"width":452,"height":12}},{"id":"b8515c2d-ce8d-4287-9802-ffde483b8a48","block_type":"box","text":"Third-party vote services providers – or proxy research firms—provide research and recommendations","page_number":222,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"e83c07d3-3848-4715-9f40-935fb778a5c1","block_type":"box","text":"on proxy votes, as well as voting infrastructure. BlackRock contracts primarily with the vote services","page_number":222,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"a393ec44-cfef-4bbb-86d5-6ccb0d387987","block_type":"box","text":"provider ISS and leverages its online platform to supply research and support voting, record keeping,","page_number":222,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"e320f58a-6b3f-4c24-aec9-73951bd173d1","block_type":"box","text":"and reporting processes. We also use Glass Lewis’ research and analysis as an input into our voting","page_number":222,"box":{"x":116,"y":614,"width":752,"height":12}},{"id":"f476ec32-fa72-4cf0-bc8c-15d19163ac2b","block_type":"box","text":"process. It is important to note that, although proxy research firms provide important data and analysis,","page_number":222,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"43d3cd7f-0c33-4460-9ddc-85e1ab1d6bfa","block_type":"box","text":"BAIS does not rely solely on their information or follow their voting recommendations. A company’s","page_number":222,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"5d2c33f9-5bcc-4101-a845-c470eca8ae9d","block_type":"box","text":"disclosures, our engagements and voting, investment colleagues’ insights and our Guidelines are","page_number":222,"box":{"x":116,"y":661,"width":722,"height":12}},{"id":"204bec3c-53da-42e7-b56f-c7312d86ffe5","block_type":"box","text":"important inputs into our voting decisions on behalf of clients.","page_number":222,"box":{"x":117,"y":676,"width":452,"height":12}},{"id":"10f91f7c-777a-4096-ae1c-ce57bdde2450","block_type":"box","text":"Given the large universe of actively held companies, BAIS employs the proxy services provider to","page_number":222,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"5cbe299f-3024-4c2e-9ad8-6607bfbf18fb","block_type":"box","text":"streamline the voting process by making voting recommendations based on BAIS’ Guidelines when the","page_number":222,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"1fb89a76-389f-4637-b520-076eb4a46d70","block_type":"box","text":"items on a shareholder meeting agenda are routine. Agenda items that are not routine are referred","page_number":222,"box":{"x":117,"y":738,"width":730,"height":12}},{"id":"e55a9b5e-f193-41ee-bd27-ce9a50956b9f","block_type":"box","text":"back to BAIS to assess, escalate as necessary to the relevant portfolio managers and vote. BAIS","page_number":222,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"eb443ffe-aea2-4329-a786-21f6b185ff5a","block_type":"box","text":"reviews and can override the recommendations of the vote services provider at any time prior to the","page_number":222,"box":{"x":117,"y":769,"width":739,"height":12}},{"id":"4ec5d20c-47cd-43e6-a397-374ea8da0ea6","block_type":"box","text":"vote deadline. Both BAIS and the vote services provider actively monitor securities filings, research","page_number":222,"box":{"x":116,"y":785,"width":735,"height":12}},{"id":"26dd6785-e469-4ccf-9210-7cf2cc4aca45","block_type":"box","text":"reports, company announcements, and direct communications from companies to ensure awareness","page_number":222,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"6c6bcb8c-209c-4442-85de-b99f28980952","block_type":"box","text":"of supplemental disclosures and proxy materials that may require a modification of votes.","page_number":222,"box":{"x":116,"y":816,"width":661,"height":12}},{"id":"6578e715-b491-49da-9c70-7d0a15dd73a4","block_type":"box","text":"12","page_number":222,"box":{"x":144,"y":841,"width":8,"height":5}},{"id":"4b8c0b7b-1d95-4f19-aac7-d4a94c39b382","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":222,"box":{"x":170,"y":841,"width":679,"height":9}},{"id":"b79e65a1-c0c1-4eb6-a2e0-5729a7fdc192","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":222,"box":{"x":170,"y":854,"width":695,"height":9}},{"id":"cd3501b2-b033-41cc-b9ce-9ebc505aa5cb","block_type":"box","text":"votes based on the client’s selected voting policy.","page_number":222,"box":{"x":170,"y":867,"width":292,"height":9}},{"id":"a942388e-e1da-4584-8992-144f8dbf1249","block_type":"box","text":"13","page_number":222,"box":{"x":144,"y":880,"width":8,"height":5}},{"id":"a1aa85e2-d5a4-4094-8070-7cc8719b5c42","block_type":"box","text":"BlackRock does not disclose client information, including a client’s selection of proxy policy, without client consent.","page_number":222,"box":{"x":171,"y":880,"width":678,"height":9}},{"id":"7fa46a65-1790-48ff-ab5c-29c84d7be877","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":222,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ab64175d-da0e-4333-8fc8-c01d375d35d1","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":222,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"3dc203c3-8138-4c6c-bf65-00ddb3f8e273","block_type":"box","text":"19","page_number":222,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"9b1d05af-27fb-43af-935a-5a7d9b8718be","block_type":"box","text":"NM1026U-6042785-222/259","page_number":222,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ddb20595-1f12-483b-b019-e4524acb716e","block_type":"box","text":"BAIS closely monitors the third-party vote services providers we contract with to ensure that they are","page_number":223,"box":{"x":117,"y":87,"width":751,"height":12}},{"id":"d788d134-3454-41a2-a156-33ac468c6775","block_type":"box","text":"meeting our service level expectations and have effective policies and procedures in place to manage","page_number":223,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"a2fd11c7-a6f9-40bd-8d46-a4bbe0244449","block_type":"box","text":"potential conflicts of interest. Our oversight of service providers includes regular meetings with client","page_number":223,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"8ecca632-711c-4c54-b2d7-a1e53b469eda","block_type":"box","text":"service teams, systematic monitoring of vendor operations, as well as annual due diligence meetings in","page_number":223,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"fdad3e9d-59e3-4534-9b41-73c96c95b3e9","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":223,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"def7e403-266d-4daf-97d2-4f8edb22b064","block_type":"box","text":"Conflicts management policies and procedures","page_number":223,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"b918bbaf-5bba-4b1f-becb-3059921d3032","block_type":"box","text":"BlackRock maintains policies and procedures that seek to prevent undue influence on BAIS’ proxy","page_number":223,"box":{"x":117,"y":213,"width":734,"height":12}},{"id":"eaa45f44-6bda-492a-9289-db5336427e1b","block_type":"box","text":"voting activity. Such influence might stem from any relationship between the investee company (or any","page_number":223,"box":{"x":116,"y":228,"width":767,"height":12}},{"id":"d2902c64-4768-4f03-891f-cdb45e241d27","block_type":"box","text":"shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund or a","page_number":223,"box":{"x":116,"y":244,"width":743,"height":12}},{"id":"9d80ffdd-4571-40f5-8a3f-d9dbceebfb30","block_type":"box","text":"Fund’s affiliates, or BlackRock employees. 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BlackRock uses an independent third-party voting service provider to make proxy voting","page_number":224,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"15ecf747-0898-4fc2-90cd-970b81173876","block_type":"box","text":"recommendations for shares of BlackRock, Inc. and companies affiliated with BlackRock, Inc.","page_number":224,"box":{"x":150,"y":102,"width":698,"height":12}},{"id":"33b43500-2d63-4f4a-badf-20578add7395","block_type":"box","text":"BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":224,"box":{"x":151,"y":118,"width":721,"height":12}},{"id":"ce3bf417-b187-4f57-8c8f-6fbf4f6f9c88","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":224,"box":{"x":150,"y":134,"width":608,"height":12}},{"id":"7235e362-064d-4efc-9b3e-8c107d703a4d","block_type":"box","text":"• public companies that include BlackRock employees on their boards of directors","page_number":224,"box":{"x":159,"y":156,"width":624,"height":12}},{"id":"aaf5e149-377d-4305-accc-3d385d3e681a","block_type":"box","text":"• public companies of which a BlackRock, Inc. board member serves as a senior executive or a","page_number":224,"box":{"x":159,"y":178,"width":725,"height":12}},{"id":"c3ddecf5-5081-4970-b833-65bdf4d23c5f","block_type":"box","text":"member of the board of directors","page_number":224,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"58364c6f-e46b-4877-995e-8b47973fe72e","block_type":"box","text":"• public companies that are the subject of certain transactions involving BlackRock Funds","page_number":224,"box":{"x":159,"y":215,"width":682,"height":12}},{"id":"d5781855-823b-4aeb-bb1a-000276864459","block_type":"box","text":"• public companies that are joint venture partners with BlackRock, and","page_number":224,"box":{"x":159,"y":238,"width":540,"height":11}},{"id":"2fb8ba42-08f2-494e-be4d-c56f5488c0fc","block_type":"box","text":"• public companies when legal or regulatory requirements compel BlackRock to use an","page_number":224,"box":{"x":159,"y":260,"width":663,"height":12}},{"id":"dd9dd3c4-8e45-4a4c-8d2b-1da5c39508ba","block_type":"box","text":"independent third-party voting service provider","page_number":224,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"f353c069-f23f-4e4d-8285-51d0b5181e33","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics,","page_number":224,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"b418b235-2755-4fb1-9418-b4b5aa2a1ee7","block_type":"box","text":"including but not limited to: independence, an ability to analyze proxy issues and make","page_number":224,"box":{"x":117,"y":319,"width":647,"height":12}},{"id":"f202b016-8137-4735-998b-70e7763a523e","block_type":"box","text":"recommendations in the economic interest of our clients in accordance with the Guidelines, reputation","page_number":224,"box":{"x":117,"y":335,"width":760,"height":12}},{"id":"e2543073-dc57-4888-9879-4f06d7d8fe4d","block_type":"box","text":"for reliability and integrity, and operational capacity to accurately deliver the assigned","page_number":224,"box":{"x":116,"y":350,"width":637,"height":12}},{"id":"d3b29026-9a85-4e7f-9cdf-c1637f311945","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":232,"box":{"x":117,"y":375,"width":706,"height":12}},{"id":"d4b352dc-e6c9-4dbd-b2f0-aa107be85389","block_type":"box","text":"analysis of company disclosures, comparisons against industry peers, third-party research, and, where","page_number":232,"box":{"x":116,"y":391,"width":768,"height":12}},{"id":"35dd5191-3b8e-4b4a-8b9b-92ccb0e69666","block_type":"box","text":"appropriate, engagement with companies.","page_number":232,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"a32b0838-9944-47c0-b8ed-d328eb583390","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at","page_number":232,"box":{"x":117,"y":434,"width":721,"height":12}},{"id":"495f3291-62e8-48d5-a66f-1a1ae07ce310","block_type":"box","text":"companies which have sound corporate governance and deliver strong financial returns over time.","page_number":232,"box":{"x":116,"y":450,"width":734,"height":12}},{"id":"6a31684c-0126-4771-b07c-95485a499aac","block_type":"box","text":"When we determine it is in our clients’ financial interests to convey concern to companies through","page_number":232,"box":{"x":116,"y":465,"width":729,"height":12}},{"id":"366bd2dc-44a1-4545-8a18-34995b60abc6","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":232,"box":{"x":116,"y":481,"width":768,"height":12}},{"id":"97723e7f-1880-4ae9-a244-774e72f8c6b4","block_type":"box","text":"proposals, or we might not support management’s voting recommendation on a shareholder proposal.","page_number":232,"box":{"x":117,"y":496,"width":761,"height":12}},{"id":"983755b5-eb25-4b65-8917-97da0c3f1119","block_type":"box","text":"Shareholder rights","page_number":232,"box":{"x":425,"y":530,"width":154,"height":13}},{"id":"41b6cd6d-0098-4a14-9b6d-0388cfce1a36","block_type":"box","text":"BlackRock’s global approach as a shareholder on behalf of our clients is underpinned by certain rights","page_number":232,"box":{"x":117,"y":558,"width":762,"height":12}},{"id":"ac264d74-7a7f-4398-952f-fe1c873647a8","block_type":"box","text":"attached to shareholding in most markets, as established by corporate laws, regulations, and listing","page_number":232,"box":{"x":116,"y":574,"width":743,"height":12}},{"id":"0e916ff7-50c3-4c83-8f79-1d190f65654a","block_type":"box","text":"rules.","page_number":232,"box":{"x":117,"y":590,"width":38,"height":9}},{"id":"ecd87ef8-270c-4a3e-b6c6-e02611aa9c82","block_type":"box","text":"3","page_number":232,"box":{"x":157,"y":590,"width":5,"height":6}},{"id":"aef90338-c749-4004-b40c-914a3f223f7c","block_type":"box","text":"For example, in most markets, shareholders have the right to:","page_number":232,"box":{"x":163,"y":590,"width":468,"height":11}},{"id":"709d2717-9e53-4f91-8d7e-2557c826bf06","block_type":"box","text":"• Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and","page_number":232,"box":{"x":159,"y":617,"width":705,"height":12}},{"id":"a0ebb4c3-fcf1-4aca-8b7f-67b326b6eaca","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":232,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"e2a36cdc-2db5-40a7-9628-e42bc62ad685","block_type":"box","text":"• Vote on key board decisions that are material to","page_number":232,"box":{"x":159,"y":655,"width":377,"height":12}},{"id":"3b9e1ff6-805a-40d0-ac97-b1278f2f9ade","block_type":"box","text":"the protection of their investment, including but","page_number":232,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"710fb038-e5e3-4640-9f34-e7b31327fa8f","block_type":"box","text":"not limited to, changes to the purpose of the busi","page_number":232,"box":{"x":184,"y":670,"width":353,"height":12}},{"id":"3e1f96b5-569b-4eda-a22a-97b1d3ef2e62","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":232,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"6632b4d6-0841-41d0-9cee-216a8a100575","block_type":"box","text":"• Access sufficient and timely information on governance, strategic, and business matters –","page_number":232,"box":{"x":159,"y":692,"width":691,"height":12}},{"id":"4ce319c5-b3ef-4bc6-9b66-3cc6597ea977","block_type":"box","text":"where such matters are material – to make informed decisions.","page_number":232,"box":{"x":183,"y":707,"width":468,"height":10}},{"id":"b30292c6-2cbd-4742-a79a-5108f33e9cad","block_type":"box","text":"Key governance topics","page_number":232,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"aee670d3-d6f7-46c4-84e7-971a7f193ed3","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that","page_number":232,"box":{"x":117,"y":769,"width":696,"height":12}},{"id":"e2993496-57e4-4fad-94f3-3ae741e245c7","block_type":"box","text":"contribute to a company’s ability to create long-term financial value for shareholders. These are topics","page_number":232,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"e3930718-a6fc-4b73-8dc5-7c575f134bde","block_type":"box","text":"that shareholders may have the ability to vote on at shareholder meetings. These areas include:","page_number":232,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"b5ed3622-304d-474d-b21d-b4d437048667","block_type":"box","text":"• Boards and directors","page_number":232,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"0730e9b4-daf3-44a8-9a3d-5f90489155be","block_type":"box","text":"3","page_number":232,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"c57b146a-e44d-4def-985a-4f5c9618c24e","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":232,"box":{"x":171,"y":853,"width":682,"height":10}},{"id":"cfc62f7c-9880-4ad4-acef-0125caa2b0bd","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":232,"box":{"x":170,"y":866,"width":651,"height":10}},{"id":"d4f02ba9-d74c-4145-a68a-2b2d6f7de273","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":232,"box":{"x":170,"y":879,"width":538,"height":10}},{"id":"982c0891-e26e-4764-8e6a-d0fdcfa4aeba","block_type":"box","text":"BlackRock Investment Stewardship","page_number":232,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"a3e018e2-5493-47a5-956c-9a85c8b5d775","block_type":"box","text":"Global Principles |","page_number":232,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"49a75356-cd5b-4a64-94e0-3c3ff29018af","block_type":"box","text":"4","page_number":232,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"8385d274-ca68-48ac-a8d0-fc29935a8c16","block_type":"box","text":"NM1026U-6042785-232/259","page_number":232,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"423fcc46-4935-47a6-803a-7f11903ad27a","block_type":"box","text":"• Auditors and audit-related issues","page_number":233,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"513aeaae-1fd2-4c61-a2e3-1109478b3658","block_type":"box","text":"• Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":233,"box":{"x":117,"y":109,"width":635,"height":12}},{"id":"34dd20c7-c53b-4a2f-8e31-acd6e1dddd9c","block_type":"box","text":"• Executive compensation","page_number":233,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"23aa162c-bbcc-4ded-9453-47b7e5736684","block_type":"box","text":"• Shareholder protections and other significant corporate governance matters","page_number":233,"box":{"x":117,"y":152,"width":600,"height":12}},{"id":"a7d3cc70-0204-47f8-b5b8-02fc242f1824","block_type":"box","text":"• Shareholder proposals","page_number":233,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"49ac04c6-eba4-4b6d-991f-201eef47b271","block_type":"box","text":"The BIS Benchmark Policies are not prescriptive but rather are applied on a pragmatic basis, taking","page_number":233,"box":{"x":116,"y":201,"width":744,"height":12}},{"id":"3876129b-6236-4d7a-a29a-75b03bb76db9","block_type":"box","text":"into consideration a number of company-specific factors, including the sector, market, and business","page_number":233,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"97eea64c-c9a1-4d1d-bc78-33f87df1fa67","block_type":"box","text":"environment within which companies operate.","page_number":233,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"a5e9eead-c663-4513-8ce5-7de37027b1e1","block_type":"box","text":"At the regional level, it is our view that companies should observe the accepted corporate governance","page_number":233,"box":{"x":116,"y":259,"width":761,"height":12}},{"id":"65f05049-0606-4bc1-ba35-702390c58857","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":233,"box":{"x":116,"y":275,"width":736,"height":12}},{"id":"db26efe3-7141-4167-b592-ddf78f7c4d2d","block_type":"box","text":"their approach better supports durable, long-term financial value creation. Our regional voting","page_number":233,"box":{"x":116,"y":290,"width":698,"height":12}},{"id":"ffb4c571-2137-453e-9928-feac73645bf3","block_type":"box","text":"guidelines explain how the BIS Global Principles inform our voting decisions in relation to common","page_number":233,"box":{"x":116,"y":306,"width":735,"height":12}},{"id":"045c466f-72f5-47d2-ad96-32a7ef178fa9","block_type":"box","text":"ballot items for shareholder meetings in those markets.","page_number":233,"box":{"x":117,"y":321,"width":406,"height":12}},{"id":"a6dcb9f6-c5ca-4cfd-a31a-e68f2db15d4e","block_type":"box","text":"4","page_number":233,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"5667e282-5682-4425-b592-2eb16d9e6d4e","block_type":"box","text":"Boards and directors","page_number":233,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"ec5cd721-8ba3-4473-8c8e-0455ab001e3e","block_type":"box","text":"Oversight role of the board","page_number":233,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"9d37e0df-b102-485d-9488-e527e8da9a5f","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with","page_number":233,"box":{"x":117,"y":410,"width":676,"height":12}},{"id":"50a38a48-cbe3-40f9-8668-21b67cf77328","block_type":"box","text":"professional characteristics relevant to a company’s business enhance the board’s ability to add long","page_number":233,"box":{"x":117,"y":426,"width":753,"height":12}},{"id":"40546c49-54ea-4ac2-937e-2138c0b56fa2","block_type":"box","text":"term financial value and serve as the voice of shareholders in board discussions. In our view, a strong","page_number":233,"box":{"x":116,"y":441,"width":761,"height":12}},{"id":"b6b60a3d-a5b1-4065-abd8-0e5379254f89","block_type":"box","text":"board gives a company a competitive advantage, providing valuable oversight and contributing to the","page_number":233,"box":{"x":117,"y":457,"width":754,"height":12}},{"id":"51712ca1-b81d-43db-a72a-781fc88ecdff","block_type":"box","text":"most important management decisions that support long-term financial performance.","page_number":233,"box":{"x":117,"y":472,"width":632,"height":12}},{"id":"ff6de403-3772-4c92-8927-0791cc28a247","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors.","page_number":233,"box":{"x":117,"y":500,"width":768,"height":12}},{"id":"1dd396dc-2ee9-4320-8c51-c351a7e20cfb","block_type":"box","text":"We engage, as necessary, with members of the board’s nominating and/or governance committee to","page_number":233,"box":{"x":116,"y":515,"width":753,"height":12}},{"id":"892bade5-b1b4-4aff-8df0-94f085981b81","block_type":"box","text":"assess whether governance practices and board composition are effective given a company’s","page_number":233,"box":{"x":116,"y":531,"width":701,"height":12}},{"id":"9429c65d-c50d-4519-95c6-e1596bd5ca10","block_type":"box","text":"business model, sector, market, and the business environment in which a company is operating.","page_number":233,"box":{"x":117,"y":546,"width":719,"height":12}},{"id":"91aab605-df23-49a2-8a37-9b58eac9db55","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and","page_number":233,"box":{"x":116,"y":574,"width":736,"height":12}},{"id":"68172215-d170-4f15-a767-1ac3802b5f48","block_type":"box","text":"effective governance mechanisms that supports its oversight of the company’s strategy and","page_number":233,"box":{"x":116,"y":589,"width":685,"height":12}},{"id":"38191901-265e-45b1-a346-b7378813e6b0","block_type":"box","text":"operations, consistent with the long-term financial interests of investors. This includes having clear","page_number":233,"box":{"x":116,"y":605,"width":735,"height":12}},{"id":"37295a8c-ce41-4102-a2f0-bf5cdc9eb59b","block_type":"box","text":"descriptions of the role of the board and the committees of the board and how directors engage with","page_number":233,"box":{"x":116,"y":620,"width":748,"height":12}},{"id":"3894106b-c099-4380-90d8-a47ac62388d2","block_type":"box","text":"and oversee management, as well as disclosure of material risks that may affect a company’s long","page_number":233,"box":{"x":116,"y":636,"width":738,"height":12}},{"id":"e28c1bef-b27a-4b31-ac87-59700318a57e","block_type":"box","text":"term strategy and how management is effectively identifying, managing, and mitigating such risks.","page_number":233,"box":{"x":116,"y":651,"width":732,"height":12}},{"id":"6c1987aa-591b-47db-a928-5b1191461626","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should","page_number":233,"box":{"x":117,"y":679,"width":741,"height":12}},{"id":"83dedfec-1f56-4b66-a072-d7e7effedaff","block_type":"box","text":"assess its implementation is central to our approach. If any strategic targets are significantly missed or","page_number":233,"box":{"x":116,"y":694,"width":761,"height":12}},{"id":"1e2a1a84-00a4-4c12-abfd-309ea6dc8114","block_type":"box","text":"materially restated, we find it helpful when company disclosures provide a detailed explanation of the","page_number":233,"box":{"x":117,"y":710,"width":747,"height":12}},{"id":"67af8820-e16f-4a85-b397-7f401167bfab","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":233,"box":{"x":116,"y":725,"width":754,"height":12}},{"id":"b33d3b5b-605e-48e2-a01f-0e4bc05cbc9f","block_type":"box","text":"articulate the effectiveness of these mechanisms in overseeing the management of business risks and","page_number":233,"box":{"x":116,"y":741,"width":759,"height":12}},{"id":"9cc26fac-cba4-4be5-8dbb-f488367a4ffa","block_type":"box","text":"opportunities and the fulfillment of the company’s strategy.","page_number":233,"box":{"x":116,"y":756,"width":432,"height":12}},{"id":"a8f09817-5397-432f-bcc4-52b972b72c33","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these","page_number":233,"box":{"x":116,"y":784,"width":722,"height":12}},{"id":"1d24e52d-bead-42f6-b734-bc549b094f4f","block_type":"box","text":"corporate governance and risk oversight responsibilities, we may consider not supporting the election","page_number":233,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"b5f62aab-ee25-4dc6-9b40-17064d0664d1","block_type":"box","text":"of directors who, in our assessment, have particular responsibility for the issues.","page_number":233,"box":{"x":116,"y":815,"width":594,"height":12}},{"id":"9fc3a42e-5338-41ff-8e86-1ff54dcc8c2d","block_type":"box","text":"4","page_number":233,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"e59ae442-00a8-4880-bf34-5ebe82783156","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market, generally","page_number":233,"box":{"x":170,"y":840,"width":702,"height":10}},{"id":"95096e86-4adc-421d-8fe8-9242bb64708e","block_type":"box","text":"accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives, amongst other","page_number":233,"box":{"x":170,"y":853,"width":712,"height":10}},{"id":"0ee174ee-51dd-487c-9585-3c1e8e0c41e9","block_type":"box","text":"factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote operations (including","page_number":233,"box":{"x":170,"y":866,"width":688,"height":10}},{"id":"038dee12-1e11-42fb-8861-9b97576617dc","block_type":"box","text":"maintaining records of votes cast) in a manner consistent with the relevant regional voting guidelines.","page_number":233,"box":{"x":170,"y":879,"width":600,"height":10}},{"id":"fb19cd4d-58ca-4678-bc47-1a5dd979a10e","block_type":"box","text":"BlackRock Investment Stewardship","page_number":233,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"25186fd5-e85c-4ed9-a5c9-02787312bb99","block_type":"box","text":"Global Principles |","page_number":233,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"43a05077-f37e-4236-a04b-6bfae8b8c536","block_type":"box","text":"5","page_number":233,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"9988a4a7-3d4b-4940-a31e-2ad7125c9bbc","block_type":"box","text":"NM1026U-6042785-233/259","page_number":233,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"89468011-a85e-4519-89c3-79bd8ac01e34","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that","page_number":234,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"f39c6e1a-a7d9-4a81-9551-83759d0f15e1","block_type":"box","text":"speak to the board’s effectiveness as a group include the relevance of individual directors’","page_number":234,"box":{"x":116,"y":102,"width":673,"height":13}},{"id":"f729463e-9ed5-4b19-af27-6b80c1f158e2","block_type":"box","text":"qualifications and skillsets, as well as directors’ capacity and other time commitments, and how these","page_number":234,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"d089bbf2-e968-42a6-b59f-cf897d5ac716","block_type":"box","text":"factors may contribute to the company’s financial performance. We look to boards to establish formal","page_number":234,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"96724f86-f70f-4897-81b3-5ef8b6105c0d","block_type":"box","text":"and transparent processes for nominating directors that reflect the company’s long-term strategy and","page_number":234,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"d4099b72-296d-4cab-8a1f-58a9ef34e479","block_type":"box","text":"business model.","page_number":234,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"b36361bc-d260-45d5-8511-d549f5a1a3b5","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our","page_number":234,"box":{"x":117,"y":193,"width":697,"height":12}},{"id":"ff0b87ac-b33c-4819-8301-e733ec410125","block_type":"box","text":"approach to board composition and how it underpins board effectiveness and long-term financial value","page_number":234,"box":{"x":116,"y":209,"width":766,"height":12}},{"id":"466ec8c3-cd82-41cf-8ed1-691237bdb332","block_type":"box","text":"creation.","page_number":234,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"4c9d7b31-1742-4e42-b59c-115ed2295422","block_type":"box","text":"Regular accountability through director elections","page_number":234,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"0dfd5c11-151f-4aa1-9cd8-cd92261f5bb6","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":234,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"311ae0d7-3853-452d-a867-313b182e466c","block_type":"box","text":"or concern about, the performance of the board in overseeing and advising management. To ensure","page_number":234,"box":{"x":116,"y":297,"width":749,"height":12}},{"id":"44d6b589-c0af-49a9-9e52-7f0c8e8c3627","block_type":"box","text":"accountability for their decisions on behalf of shareholders, directors should stand for election on a","page_number":234,"box":{"x":116,"y":312,"width":736,"height":12}},{"id":"df9d4439-d51f-428a-92f8-90f8ba2fa65f","block_type":"box","text":"regular basis, ideally annually.","page_number":234,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"74a0a594-0f30-499b-950f-4ed6a8aedfaf","block_type":"box","text":"5","page_number":234,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"5487bdfe-0653-4b19-9067-2bd68eaaa8d6","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support","page_number":234,"box":{"x":347,"y":328,"width":517,"height":12}},{"id":"32840503-a942-400d-99bf-7345fd97adf2","block_type":"box","text":"for, or concerns about, board members’ decisions in a timely manner. When board members are not","page_number":234,"box":{"x":116,"y":343,"width":749,"height":12}},{"id":"11336079-3245-41b3-8d4d-bd78181f98f9","block_type":"box","text":"elected annually, we consider it good practice for boards to have a rotation policy to ensure that,","page_number":234,"box":{"x":116,"y":359,"width":719,"height":12}},{"id":"72fdc84e-0ed2-4dba-a42c-1ca198a92e69","block_type":"box","text":"through a board cycle, all directors have had their appointment re-confirmed, with a proportion of","page_number":234,"box":{"x":116,"y":374,"width":722,"height":12}},{"id":"57b2315d-e9c0-488b-bd9b-c18e426ad187","block_type":"box","text":"directors being put forward for election at each shareholder meeting.","page_number":234,"box":{"x":116,"y":390,"width":513,"height":12}},{"id":"f4fa8980-999b-4362-85bd-08df56e37d98","block_type":"box","text":"Board quality and effectiveness","page_number":234,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"f736d475-d807-4367-bcd8-de076b94c0d0","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way","page_number":234,"box":{"x":117,"y":447,"width":770,"height":12}},{"id":"41ad19cc-a289-492f-a8bc-6d7352478d60","block_type":"box","text":"to reflect developments in the company’s strategy and the market environment. In our view, it is","page_number":234,"box":{"x":116,"y":462,"width":714,"height":12}},{"id":"da24f24d-1a48-4136-9ccf-9080dcec3a49","block_type":"box","text":"beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking,","page_number":234,"box":{"x":117,"y":478,"width":741,"height":12}},{"id":"1a82323f-dd49-49a1-9000-554ebeec18ba","block_type":"box","text":"while supporting both continuity and appropriate succession planning. We consider the average overall","page_number":234,"box":{"x":116,"y":493,"width":768,"height":12}},{"id":"099e21fc-30b7-4b2a-8404-a127fbc848fb","block_type":"box","text":"tenure of the board and seek a balance between the knowledge and experience of longer-serving","page_number":234,"box":{"x":116,"y":509,"width":728,"height":12}},{"id":"6cde3b12-4b28-4749-9935-c545f02ef8db","block_type":"box","text":"directors and the fresh perspectives of directors who joined more recently.","page_number":234,"box":{"x":116,"y":524,"width":556,"height":12}},{"id":"37306ce1-a207-4033-9db5-79a851ca75ea","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election","page_number":234,"box":{"x":116,"y":553,"width":731,"height":12}},{"id":"c8079041-9c71-440c-95c7-ce7bcff06268","block_type":"box","text":"contribute to the effectiveness of the board. In our view, the company’s assessment should consider a","page_number":234,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"535510c3-530a-4455-9458-1b177dd5ebdb","block_type":"box","text":"number of factors, including each director’s independence and time commitments, as well as the","page_number":234,"box":{"x":117,"y":584,"width":720,"height":12}},{"id":"c705268e-bf66-4a9d-a6f1-477418229749","block_type":"box","text":"breadth and relevance of director experiences and skillsets, and how these collectively contribute to","page_number":234,"box":{"x":117,"y":599,"width":744,"height":13}},{"id":"d6a025dc-6956-4692-a3bf-41c275018bad","block_type":"box","text":"the board’s effectiveness in advising and overseeing management in delivering long-term financial","page_number":234,"box":{"x":116,"y":615,"width":734,"height":12}},{"id":"210ab253-c73c-4a6c-9303-a285e43fe489","block_type":"box","text":"returns.","page_number":234,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"e2b031e7-4fec-4a83-a7fa-5b9c5780cf1d","block_type":"box","text":"Director independence","page_number":234,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"e9b08523-cb47-45b7-8032-860c148a3800","block_type":"box","text":"Director independence – from management, significant shareholders, or other related parties – is a","page_number":234,"box":{"x":117,"y":688,"width":733,"height":12}},{"id":"e52cb30d-4148-4495-b0e3-d8084eadae20","block_type":"box","text":"central tenet of sound corporate governance across markets.","page_number":234,"box":{"x":116,"y":703,"width":452,"height":12}},{"id":"fe801a3d-633d-43cb-8496-7c1fa4565448","block_type":"box","text":"6","page_number":234,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"fd6e5fb7-659d-4cf0-bc6a-fe78119e13f2","block_type":"box","text":"We look to boards to have a sufficient","page_number":234,"box":{"x":581,"y":703,"width":280,"height":10}},{"id":"866e079d-691d-45d2-9cda-54071a9995f0","block_type":"box","text":"number of independent directors, free from conflicts of interest or undue influence, to ensure objectivity","page_number":234,"box":{"x":117,"y":719,"width":763,"height":12}},{"id":"87d04ae2-ad7d-4b5a-bf6d-b0ee8571e595","block_type":"box","text":"in the decision-making of the board and its ability to oversee management. We generally consider it","page_number":234,"box":{"x":117,"y":734,"width":738,"height":12}},{"id":"abb46994-e0f2-41f7-a44c-7fe5b5cc8053","block_type":"box","text":"good practice for independent directors to make a majority of the board, or in the case of controlled","page_number":234,"box":{"x":116,"y":750,"width":734,"height":12}},{"id":"27daf0fa-90dd-4631-89d5-0253e9362962","block_type":"box","text":"companies, at least one-third.","page_number":234,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"ca2d5e97-03e9-4e9f-a033-415194d7af0e","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":234,"box":{"x":117,"y":794,"width":551,"height":12}},{"id":"a7c45e5e-cdf4-4b55-b2d9-e2a4c58127c4","block_type":"box","text":"• Current or recent employment at the company or a subsidiary","page_number":234,"box":{"x":117,"y":816,"width":490,"height":12}},{"id":"5bac94d1-cf18-4d6e-895e-9002624f7969","block_type":"box","text":"5","page_number":234,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"ca4c844c-40f5-4722-b563-d10b12fab1a2","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":234,"box":{"x":171,"y":841,"width":703,"height":9}},{"id":"c61ca3be-003c-4640-bf77-947734d72216","block_type":"box","text":"regulation or voluntary best practice.","page_number":234,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"a0179f3b-c2fb-46f2-a0a7-775bd7f4a9a1","block_type":"box","text":"6","page_number":234,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"98273d27-44d1-4f55-aaac-6ca0be34e6de","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":234,"box":{"x":171,"y":867,"width":683,"height":9}},{"id":"ead62339-c59b-4d54-868e-0be1b85133a8","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":234,"box":{"x":171,"y":880,"width":587,"height":9}},{"id":"24f1eecb-63db-4c6a-8693-026d3fe380e1","block_type":"box","text":"BlackRock Investment Stewardship","page_number":234,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"8c223d68-12d0-4e2c-b270-3cc533a1383e","block_type":"box","text":"Global Principles |","page_number":234,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"a95c9df9-5606-431c-9112-f04bd3df7a74","block_type":"box","text":"6","page_number":234,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"1b61144f-d196-4dcd-8b29-2f77c7545236","block_type":"box","text":"NM1026U-6042785-234/259","page_number":234,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bfc775bb-c9bf-4db3-8dc9-ad6937e471f1","block_type":"box","text":"• Being, or representing, a shareholder with a substantial shareholding in the company","page_number":235,"box":{"x":117,"y":87,"width":668,"height":12}},{"id":"a6ccd3b6-6ea6-4060-a9fc-be686d029420","block_type":"box","text":"• Interlocking directorates","page_number":235,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"d8f584ea-fb0a-428e-8e2a-d1cba3539dec","block_type":"box","text":"• Having any other interest, business, or other relationship which could, or could reasonably be","page_number":235,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"1d583dfd-84f1-4abe-8456-7c606e16cff5","block_type":"box","text":"perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":235,"box":{"x":150,"y":149,"width":729,"height":12}},{"id":"4773e5cd-1a47-43d2-b313-75c44c30f06e","block_type":"box","text":"and shareholders","page_number":235,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"dba84a95-c3e9-4d80-943f-b5c991e7e2e1","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a","page_number":235,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"91ff9d00-82c5-44bf-aa09-f7b22b1598b9","block_type":"box","text":"senior, independent board leader. This director may chair the board, or, where the chair is also the","page_number":235,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"1e3706e9-5c67-40fe-bbef-667825acaa86","block_type":"box","text":"CEO (or is otherwise not independent), be designated as a lead independent director. The role of this","page_number":235,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"c1cefb51-64da-46aa-90e6-1529eeed484a","block_type":"box","text":"director is to support independent board members in fulfilling their oversight responsibilities effectively","page_number":235,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"33207c80-1bd6-49db-88f7-2565efa442c0","block_type":"box","text":"by shaping the agenda, ensuring adequate information is provided to the board, and encouraging","page_number":235,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"94d1878e-72bb-4ba2-88e6-315d0687c81b","block_type":"box","text":"independent director participation in board deliberations. We appreciate when the lead independent","page_number":235,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"497bf29e-dba8-46ba-8d0a-c762fc4f6a03","block_type":"box","text":"director or another appropriate director is available to meet with shareholders to explain and","page_number":235,"box":{"x":116,"y":289,"width":687,"height":12}},{"id":"24722c93-ccf8-46a2-b3b5-c4567d2f4b9a","block_type":"box","text":"contextualize a company’s approach as a situation warrants.","page_number":235,"box":{"x":116,"y":304,"width":454,"height":12}},{"id":"2fdd43e4-cc08-4f59-af8e-f05685292df5","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or","page_number":235,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"929da63b-ae5f-40e3-be52-043a5419cdcd","block_type":"box","text":"that require additional focus. It is our view that objective oversight of such matters is best achieved","page_number":235,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"525307ad-0581-4706-ac6c-d7b769e6f1ad","block_type":"box","text":"when the board forms committees with a majority of independent directors, depending on market","page_number":235,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"30c24f27-2925-4fa5-9a9f-3fa9104cc4e6","block_type":"box","text":"norms and a company’s ownership structure. In many markets, these committees of the board","page_number":235,"box":{"x":117,"y":382,"width":704,"height":12}},{"id":"d06c3d97-90d2-4da5-9cd5-232e8199c495","block_type":"box","text":"specialize in audit, director nominations, and compensation matters, among others. An ad hoc","page_number":235,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"d088525b-c6ea-4753-9295-07a576df9e64","block_type":"box","text":"committee might also be formed to decide on a special transaction, particularly one involving a related","page_number":235,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"72a025b2-11aa-4980-b624-bea11f8d8862","block_type":"box","text":"party, or to investigate a significant adverse event.","page_number":235,"box":{"x":117,"y":428,"width":378,"height":12}},{"id":"141cf553-e8a3-4b39-a163-b739fa186625","block_type":"box","text":"Sufficient capacity","page_number":235,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"98851fc2-18a8-4a13-9a93-aff2c9fa5dc3","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to","page_number":235,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"c87cfa02-bd27-46d8-aaf3-252a9131ab65","block_type":"box","text":"commit an appropriate amount of time to board and committee matters. It is important that directors","page_number":235,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"217f3a59-63f7-4fca-ab6b-5fbb074c964f","block_type":"box","text":"have the capacity to meet all of their responsibilities – including when there are unforeseen events –","page_number":235,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"f695d680-c3f1-42e4-9531-d0ccab9c41f8","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":235,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"f0a71580-783d-4aed-bc34-305563f87413","block_type":"box","text":"would impair their ability to fulfill their duties.","page_number":235,"box":{"x":116,"y":552,"width":333,"height":12}},{"id":"17147b11-d3ac-44d0-85f4-651a00a4067b","block_type":"box","text":"Board composition","page_number":235,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"6242c657-8944-4ad8-8bed-40031c685c56","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model,","page_number":235,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"8d84acfe-6e7c-49fa-bebe-43ca446578cc","block_type":"box","text":"strategy, market capitalization, and ownership structure, as well as the market in which the company","page_number":235,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"fbdcb77d-cb24-485b-b586-80ea781335c3","block_type":"box","text":"operates. We find it helpful when companies explain how their approach to board composition supports","page_number":235,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"4df5f972-9020-432c-9bb6-e160195b09f4","block_type":"box","text":"the company’s governance practices.","page_number":235,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"f18ca8e3-77f6-4bc3-9480-e041c4f80ef4","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the","page_number":235,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"12848e3c-f8b2-48f7-9907-f1ca13f4e41b","block_type":"box","text":"individual candidates so that shareholders can assess the capabilities and suitability of each individual","page_number":235,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"ab8c7f68-1d7c-4079-b3a1-ef62bfd4558c","block_type":"box","text":"nominee and their fit within overall board composition. These disclosures should explain how the","page_number":235,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"2bd21a31-b72d-436c-9ba3-e8e4b5160dbe","block_type":"box","text":"collective experience and expertise of the board, as well as the particular skillsets of individual","page_number":235,"box":{"x":116,"y":738,"width":697,"height":12}},{"id":"5874d346-ebdd-432d-85bd-e47bc73209b7","block_type":"box","text":"directors, aligns with the company’s long-term strategy. Highly qualified, engaged directors with","page_number":235,"box":{"x":116,"y":754,"width":707,"height":12}},{"id":"a0b2c46e-e6a4-440c-9da3-4384a2a77daf","block_type":"box","text":"professional characteristics relevant to a company’s business and strategy enhance the ability of the","page_number":235,"box":{"x":117,"y":769,"width":744,"height":12}},{"id":"cb3fb6a3-0001-49ca-848b-6c7d3352ff69","block_type":"box","text":"board to add value and be the voice of shareholders in board discussions.","page_number":235,"box":{"x":117,"y":785,"width":547,"height":9}},{"id":"52cf4a75-8297-4619-9d58-b5cc56d5ceb4","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":235,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"9ec2ec2f-7cb1-495d-b216-064866284f27","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":235,"box":{"x":117,"y":831,"width":659,"height":12}},{"id":"8e6c15ca-3959-4bc0-ac32-e31e9c5febe5","block_type":"box","text":"responsibilities to advise and oversee management. We note that in many markets, policymakers have","page_number":235,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"e6cc0458-4100-4b34-ba74-fef3e15f7fcb","block_type":"box","text":"set board gender diversity goals which we may discuss with companies, particularly if there is a risk","page_number":235,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"60c212f0-65e2-4494-b085-40d0e23f1d3b","block_type":"box","text":"their board composition may be misaligned.","page_number":235,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"919705c4-f4db-4ef0-90b9-16b2a8add906","block_type":"box","text":"BlackRock Investment Stewardship","page_number":235,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"1955be05-ebc2-4b97-8fad-df6975a4b695","block_type":"box","text":"Global Principles |","page_number":235,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"2aee06a0-50ef-4d08-9965-37326d763e20","block_type":"box","text":"7","page_number":235,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"04901811-076e-4363-85cb-bddfab01e762","block_type":"box","text":"NM1026U-6042785-235/259","page_number":235,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2a6bc757-1d60-4a29-ab8a-f464696e620b","block_type":"box","text":"Auditors and audit-related issues","page_number":236,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"9ea45341-b859-473c-b8a8-4a424753901f","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate","page_number":236,"box":{"x":117,"y":117,"width":725,"height":12}},{"id":"c7e9a07b-e2c0-45e4-a929-f5f179bd4439","block_type":"box","text":"portrayal of a company’s financial condition. Accordingly, we look for the assumptions made by","page_number":236,"box":{"x":117,"y":133,"width":709,"height":12}},{"id":"2036268e-04a3-430b-8413-357fcdc5ec28","block_type":"box","text":"management, and reviewed by the auditor in preparing the financial statements, to be reasonable and","page_number":236,"box":{"x":117,"y":148,"width":760,"height":12}},{"id":"8ef099b6-ce59-4b50-940b-4fb471fc57e3","block_type":"box","text":"justified.","page_number":236,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"3e0b7e09-16a5-42b6-b200-4871fc5bf973","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":236,"box":{"x":116,"y":194,"width":754,"height":12}},{"id":"e6e272bc-04e8-4068-a1b0-3b0b79b591a3","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important","page_number":236,"box":{"x":117,"y":210,"width":746,"height":12}},{"id":"cc4f2e19-a879-494c-8cd8-8417bf050bb8","block_type":"box","text":"role in a company’s financial reporting system by providing independent oversight of the accounts,","page_number":236,"box":{"x":117,"y":225,"width":733,"height":12}},{"id":"517eb57a-60c6-45ea-9b55-dd939e26a224","block_type":"box","text":"material financial, and, where appropriate to the jurisdiction, non-financial information and internal","page_number":236,"box":{"x":117,"y":241,"width":728,"height":12}},{"id":"df9c9761-7481-4af6-aaf4-b22c0c861c7b","block_type":"box","text":"control frameworks. Moreover, in the absence of a dedicated risk committee, these committees can","page_number":236,"box":{"x":116,"y":256,"width":743,"height":11}},{"id":"7345db1c-77f2-4dc1-9327-d27eb9cc4185","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":236,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"d24b6b6e-0650-4ab0-aff1-133d188cf731","block_type":"box","text":"7","page_number":236,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"cf54fb26-9def-4aae-a2ee-4d5ffaf783b5","block_type":"box","text":"In our view, effective audit committee","page_number":236,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"a13125eb-a43b-4294-87f3-44b0b928b2cb","block_type":"box","text":"oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":236,"box":{"x":116,"y":287,"width":745,"height":12}},{"id":"88bb2032-fd66-4aac-9fff-13d3ac29c115","block_type":"box","text":"important level of reassurance to shareholders.","page_number":236,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"f96ec6c6-5d8e-4ece-a27b-c80df33c6b63","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":236,"box":{"x":116,"y":333,"width":750,"height":12}},{"id":"503cd8f1-2d14-4af4-9310-c83e77f47ed7","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership","page_number":236,"box":{"x":117,"y":349,"width":765,"height":12}},{"id":"961e8b18-dcc6-472c-b576-deed3354b78d","block_type":"box","text":"and introduce new perspectives. We recognize that audit committees will rely on management, internal","page_number":236,"box":{"x":116,"y":364,"width":769,"height":12}},{"id":"42d77bfa-0e76-4c7b-8d33-5db3f77559f2","block_type":"box","text":"audit, and the independent auditor to fulfill their responsibilities. However, we look to committee","page_number":236,"box":{"x":116,"y":380,"width":712,"height":12}},{"id":"77788ea6-966e-4983-8174-5bef9fda886a","block_type":"box","text":"members to demonstrate they have relevant expertise to monitor and oversee the audit process and","page_number":236,"box":{"x":117,"y":395,"width":749,"height":12}},{"id":"f3ae34f3-07cb-434a-ac25-742582e7f7d2","block_type":"box","text":"related activities.","page_number":236,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"65b169aa-002e-48e6-ac91-586c0b905cd1","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant","page_number":236,"box":{"x":116,"y":441,"width":753,"height":12}},{"id":"2189bea6-9926-4dc7-bba7-32a633d4ec29","block_type":"box","text":"financial restatements, or ad hoc notifications of material financial weakness. In this respect, we look to","page_number":236,"box":{"x":116,"y":457,"width":770,"height":11}},{"id":"b74654a2-f0c8-4bdb-ac95-41cb07083c50","block_type":"box","text":"audit committees to provide timely disclosure on the remediation of key and critical audit matters","page_number":236,"box":{"x":116,"y":472,"width":720,"height":12}},{"id":"ffe3bc6d-c5ce-4b7c-80d5-cda1bf334432","block_type":"box","text":"identified either by the external auditor or internal audit function.","page_number":236,"box":{"x":117,"y":488,"width":478,"height":12}},{"id":"82cd32f6-009b-4789-a99a-b4ee70e668d5","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":236,"box":{"x":116,"y":518,"width":754,"height":12}},{"id":"d5233f42-f885-4fc8-b1c8-a6e2abdd0131","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that","page_number":236,"box":{"x":116,"y":533,"width":755,"height":12}},{"id":"58166712-a16d-4850-98ac-46b34147507e","block_type":"box","text":"auditors are, and are seen to be, independent. Where an audit firm provides services to the company","page_number":236,"box":{"x":116,"y":549,"width":756,"height":12}},{"id":"99161a7b-a906-4081-a7f7-ee85d45eeabd","block_type":"box","text":"in addition to the audit, we look for the fees","page_number":236,"box":{"x":117,"y":564,"width":323,"height":12}},{"id":"91f345a1-470f-4dea-abd2-930b683ce769","block_type":"box","text":"earned to be disclosed and explained. We look for audit","page_number":236,"box":{"x":441,"y":564,"width":419,"height":12}},{"id":"29b2ef7b-ce32-4391-aafe-5b59e2ced1a2","block_type":"box","text":"committees to have in place a procedure for assessing the independence of the auditor and the quality","page_number":236,"box":{"x":116,"y":580,"width":767,"height":12}},{"id":"f098c131-6cf5-44b2-9075-1114fc48cfd1","block_type":"box","text":"of the external audit process on an annual basis.","page_number":236,"box":{"x":116,"y":595,"width":366,"height":12}},{"id":"2bc81761-6fdf-4c1c-b2db-4001d03b1e22","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term","page_number":236,"box":{"x":117,"y":626,"width":719,"height":12}},{"id":"d14e2119-4571-4660-a02e-6a5c99d38cab","block_type":"box","text":"operational risk management practices and, more broadly, the quality of the board’s oversight. We look","page_number":236,"box":{"x":116,"y":641,"width":770,"height":12}},{"id":"9b3f9592-1214-4f56-8281-f8bf9d6eed87","block_type":"box","text":"to the audit or risk committee to periodically review the company’s risk assessment and risk","page_number":236,"box":{"x":116,"y":657,"width":684,"height":12}},{"id":"6bfdb372-43d4-4838-b372-f7d66d76d6a6","block_type":"box","text":"management policies and the significant risks and exposures identified by management, the internal","page_number":236,"box":{"x":117,"y":672,"width":741,"height":12}},{"id":"502a2aa9-20b5-4da1-a27f-39ab971097a4","block_type":"box","text":"auditors or the independent auditors, and management’s steps to address them. In the absence of","page_number":236,"box":{"x":116,"y":688,"width":731,"height":12}},{"id":"cc24d61a-6e57-4f68-887a-6d5b1704e4bf","block_type":"box","text":"detailed disclosures, we may conclude that companies are not adequately managing risk.","page_number":236,"box":{"x":116,"y":703,"width":662,"height":12}},{"id":"ceb51069-3bb0-45fe-b864-87ccbf3e974e","block_type":"box","text":"Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":236,"box":{"x":176,"y":741,"width":647,"height":12}},{"id":"7e5f5764-95cc-4d94-afb0-413633e2cbdf","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment","page_number":236,"box":{"x":116,"y":771,"width":761,"height":13}},{"id":"19b1a1b6-6e44-41fb-9020-41e95c8e9496","block_type":"box","text":"and the priority of their interest in the company relative to that of other equity or debt investors.","page_number":236,"box":{"x":116,"y":787,"width":700,"height":12}},{"id":"9e69f204-555e-42ef-b302-b39a9d537b3b","block_type":"box","text":"Pre-emptive rights are a key protection for shareholders against the dilution of their interests.","page_number":236,"box":{"x":117,"y":802,"width":687,"height":13}},{"id":"8eeb63e9-23b4-48f4-bb06-b058cd6512b3","block_type":"box","text":"7","page_number":236,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"c1feafa8-7d5b-4df6-baac-d1f23ed4e1dd","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":236,"box":{"x":171,"y":828,"width":648,"height":9}},{"id":"1eeca8c5-6eb4-4bfa-a23d-2a5c8d0020e5","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the","page_number":236,"box":{"x":170,"y":840,"width":709,"height":10}},{"id":"a7e02292-2312-4a06-9382-f145a4327256","block_type":"box","text":"entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of","page_number":236,"box":{"x":170,"y":853,"width":690,"height":10}},{"id":"e8b36122-d2b3-43a0-ab4c-91aac2fe9be2","block_type":"box","text":"objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Enterprise","page_number":236,"box":{"x":170,"y":866,"width":710,"height":10}},{"id":"ba34b771-d5a0-4a9c-b2eb-b714fbeae384","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":236,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"1ff08f7e-95c2-4a22-926e-f186fde0a262","block_type":"box","text":"BlackRock Investment Stewardship","page_number":236,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"7383f5c2-4bac-4dcd-8117-12f3efe055a4","block_type":"box","text":"Global Principles |","page_number":236,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"9b718c74-5dda-414a-a567-5391d9877303","block_type":"box","text":"8","page_number":236,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"afb6e732-0067-4aaa-85d9-a8224bd91d30","block_type":"box","text":"NM1026U-6042785-236/259","page_number":236,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"de51c7e7-4bec-47da-98ed-ceb01e900b5b","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure","page_number":237,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"5a080729-67ee-4ab3-b4f4-d8b6a6e92a4f","block_type":"box","text":"and differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce","page_number":237,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"2201a0a9-3678-46a6-89d4-860fd82692b1","block_type":"box","text":"the adoption of “one share, one vote” for registered shareholders.","page_number":237,"box":{"x":116,"y":118,"width":491,"height":12}},{"id":"a4c6082d-6e35-4a2f-94de-bfd4c86bb75d","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a","page_number":237,"box":{"x":117,"y":149,"width":740,"height":13}},{"id":"56b34130-7198-4e5f-8958-d6be7b2bcc69","block_type":"box","text":"valid reason for listing dual classes of shares with differentiated voting rights. In our view, such","page_number":237,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"7cde8f83-004c-4df5-a863-2be39d81df51","block_type":"box","text":"companies should review these share class structures on a regular basis or as company","page_number":237,"box":{"x":116,"y":181,"width":661,"height":12}},{"id":"c717b7f9-321b-4bd9-9437-049f0aa2e1b3","block_type":"box","text":"circumstances change. Additionally, they should seek shareholder approval of their capital structure on","page_number":237,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"0834a92f-3f2d-465f-85a0-aaca59b4e6fc","block_type":"box","text":"a periodic basis via a management proposal at the company’s shareholder meeting. The proposal","page_number":237,"box":{"x":116,"y":212,"width":731,"height":12}},{"id":"d838cd65-6a76-45f6-a72b-bf8ff5b3df2b","block_type":"box","text":"should give unaffiliated shareholders the opportunity to affirm the current structure or establish","page_number":237,"box":{"x":116,"y":227,"width":705,"height":12}},{"id":"b7958ce5-1319-485b-b685-128aacf6428d","block_type":"box","text":"mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs","page_number":237,"box":{"x":117,"y":243,"width":757,"height":12}},{"id":"f234510e-eb70-4bb3-9397-330705b599f9","block_type":"box","text":"to shareholders.","page_number":237,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"ce5c5c65-4885-49c4-ab45-b034670b5c21","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long","page_number":237,"box":{"x":117,"y":289,"width":745,"height":12}},{"id":"a87c060a-5261-43c6-a671-a5dd956bac46","block_type":"box","text":"term financial interests of our clients as shareholders, and so we will review any proposed transaction","page_number":237,"box":{"x":116,"y":305,"width":758,"height":12}},{"id":"6ee4ca42-c3fa-481e-bc39-b6523bb1ce43","block_type":"box","text":"with that objective in mind. Typically, we review factors such as whether the proposed transaction has","page_number":237,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"6eb7aef5-7379-4db6-96cd-bbdc835e6d9b","block_type":"box","text":"the unanimous support of the board and has been negotiated at arm’s length, and whether the board","page_number":237,"box":{"x":116,"y":336,"width":753,"height":12}},{"id":"30199124-a1b9-480e-92f8-be6f8b5f51ad","block_type":"box","text":"or management has clearly explained its economic and strategic rationale. We may also seek","page_number":237,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"60bb0fa8-8102-441e-846b-cdf217b7c336","block_type":"box","text":"reassurance from the board that the financial interests of executives and/or board members in a given","page_number":237,"box":{"x":117,"y":367,"width":761,"height":12}},{"id":"e3a2c109-5819-49eb-be0e-315fbcd11427","block_type":"box","text":"transaction have not adversely affected their ability to place shareholders’ interests before their own.","page_number":237,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"fc93dd2a-751e-42a1-8102-df9226227c0b","block_type":"box","text":"Where the transaction involves related parties, the recommendation to support should come from the","page_number":237,"box":{"x":116,"y":398,"width":755,"height":12}},{"id":"d2990a80-ee09-42e6-877d-753013b42be2","block_type":"box","text":"independent directors, a best practice in most markets, and ideally, the terms should have been","page_number":237,"box":{"x":117,"y":414,"width":715,"height":11}},{"id":"9aa16ffb-e3ae-4f90-9752-06823fa4956a","block_type":"box","text":"assessed through an independent appraisal process. In addition, it is good practice that it be approved","page_number":237,"box":{"x":116,"y":429,"width":766,"height":12}},{"id":"40726d84-3b2c-4e26-a00b-98d86d9cbf05","block_type":"box","text":"by a separate vote of the non-conflicted parties.","page_number":237,"box":{"x":117,"y":444,"width":358,"height":12}},{"id":"1d3ec4b9-ecc8-473d-8efc-0101698166cc","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company","page_number":237,"box":{"x":116,"y":476,"width":743,"height":12}},{"id":"c35a5765-e087-4a00-abce-78ad5d541f04","block_type":"box","text":"shares in the open market without unnecessary restriction. In our view, corporate mechanisms","page_number":237,"box":{"x":116,"y":491,"width":705,"height":12}},{"id":"bfb2b7bf-4e3a-46b1-9d84-d37705e0ef7a","block_type":"box","text":"designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such","page_number":237,"box":{"x":116,"y":507,"width":738,"height":12}},{"id":"27ee1302-1a33-4f02-b57e-d46fc1b7b17f","block_type":"box","text":"mechanisms can serve to protect and entrench interests other than those of the shareholders. In our","page_number":237,"box":{"x":117,"y":522,"width":750,"height":12}},{"id":"5a139e08-4a8c-454b-a08e-5a02ae4ca461","block_type":"box","text":"view, shareholders are broadly capable of making decisions in their own best interests. We encourage","page_number":237,"box":{"x":116,"y":538,"width":764,"height":12}},{"id":"74b74c24-70c7-44b8-b2e1-519b9f8226fb","block_type":"box","text":"any shareholder rights plans proposed by a board to be subject to shareholder approval upon","page_number":237,"box":{"x":116,"y":553,"width":699,"height":12}},{"id":"f48b3769-02f3-4363-a946-7378d1549336","block_type":"box","text":"introduction and periodically thereafter.","page_number":237,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"7c4d2764-fdbb-4818-9d62-98e6ddaa1b11","block_type":"box","text":"Executive compensation and benefits","page_number":237,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"d0b3aaf7-30a8-487c-9883-776ba2203d61","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value","page_number":237,"box":{"x":117,"y":640,"width":749,"height":12}},{"id":"948472c9-322a-46e8-a1fa-7816dbaca3df","block_type":"box","text":"creation. A well-structured compensation policy rewards the successful delivery of strategic,","page_number":237,"box":{"x":116,"y":655,"width":686,"height":12}},{"id":"dd314cd8-5169-4a0c-8604-36e2923437f4","block_type":"box","text":"operational, and/or financial goals; encourages an appropriate risk appetite; and aligns the interests of","page_number":237,"box":{"x":116,"y":671,"width":759,"height":12}},{"id":"adb3481f-f131-4537-bdb7-5d29da56fefe","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":237,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"6ba7b5e4-299b-4556-bbd9-0d44ecc3f99a","block_type":"box","text":"8","page_number":237,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"32af2a7e-b0c5-4b0c-b165-2bce5f94763b","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support","page_number":237,"box":{"x":116,"y":717,"width":746,"height":13}},{"id":"3052ddf8-fade-4f30-9e24-dcf3d9dfbe8a","block_type":"box","text":"sustained financial value creation for our clients as shareholders. We appreciate when performance","page_number":237,"box":{"x":116,"y":733,"width":739,"height":12}},{"id":"33c40fa7-b884-4f90-a03f-fdbc66336d13","block_type":"box","text":"targets incorporate ambitious objectives, and the corresponding metrics are aligned with the","page_number":237,"box":{"x":116,"y":749,"width":682,"height":12}},{"id":"fcea0c91-e7b0-40c3-beb4-a84b8450e381","block_type":"box","text":"company’s strategy and business model. BIS does not have a position on whether companies choose","page_number":237,"box":{"x":116,"y":764,"width":755,"height":12}},{"id":"3b761886-43b6-45ff-a784-1a72f91d9a34","block_type":"box","text":"to use sustainability-related criteria in compensation structures, but, where they are included, we look","page_number":237,"box":{"x":116,"y":780,"width":752,"height":12}},{"id":"2fd99c40-5d0e-4483-ab52-906cb5286441","block_type":"box","text":"to companies to be as rigorous as they would be in setting other financial or operational targets. We","page_number":237,"box":{"x":116,"y":795,"width":740,"height":12}},{"id":"e96679bb-f1c5-46ff-8598-fe7a47a70cfa","block_type":"box","text":"appreciate when long-term incentive plans encompass timeframes that: 1) are distinct from annual","page_number":237,"box":{"x":116,"y":810,"width":730,"height":13}},{"id":"ffe5857c-7b5a-4d9f-bc84-d3af7ce41ae9","block_type":"box","text":"executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":237,"box":{"x":116,"y":826,"width":724,"height":12}},{"id":"4a1f6f4f-b150-4804-91a7-fe2721c85f8d","block_type":"box","text":"results over a period of years.","page_number":237,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"0c206451-edd1-41a6-9821-26a3156eeede","block_type":"box","text":"8","page_number":237,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"6b1c7d7e-4b5d-40eb-bf77-926747a1432f","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":237,"box":{"x":170,"y":867,"width":664,"height":9}},{"id":"44d874bb-4e84-4d05-948a-864f7270556b","block_type":"box","text":"different markets.","page_number":237,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"320405b0-4968-4f13-96ec-3be94092721c","block_type":"box","text":"BlackRock Investment Stewardship","page_number":237,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"87e7ca75-8a7b-4f09-a0f0-b0a18a6b0c65","block_type":"box","text":"Global Principles |","page_number":237,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"bf9b934f-850c-413d-984e-ad4ca3694916","block_type":"box","text":"9","page_number":237,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"394aabe0-6df4-4347-963f-452f39bb6407","block_type":"box","text":"NM1026U-6042785-237/259","page_number":237,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f57a1a73-8c08-4a66-9971-50fa8a0c58c3","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":238,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"8526aadf-b34b-4c65-8634-cd2e23459e9d","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may","page_number":238,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"a98c7772-8fb3-4941-a1d5-ac999fa1bc90","block_type":"box","text":"include the company’s risk profile, the environment it operates in, and the individuals the board is trying","page_number":238,"box":{"x":117,"y":118,"width":770,"height":12}},{"id":"a6fb975f-8528-4059-9048-39e0b4b452cb","block_type":"box","text":"to attract and retain. We look to the compensation committees to guard against contractual","page_number":238,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"af782ce7-a9aa-4239-842e-465d1638a417","block_type":"box","text":"arrangements that would entitle executives to material compensation for early termination of their","page_number":238,"box":{"x":116,"y":149,"width":726,"height":12}},{"id":"4fed65c3-db85-4150-b0ae-46128571420b","block_type":"box","text":"employment. Finally, we look for pension contributions and other deferred compensation arrangements","page_number":238,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"cbf3fd2a-afdc-4664-9efb-27e4ed8cf690","block_type":"box","text":"to be reasonable in light of market practices or the company’s business and executive compensation","page_number":238,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"e7d1d5e9-d381-48be-a3d3-7080d115b95d","block_type":"box","text":"strategies.","page_number":238,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"08ea9a7c-39dd-47a9-9422-b8bb9e05748a","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance.","page_number":238,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"2090e488-1aba-4d3f-afc0-5eb33db428da","block_type":"box","text":"Where discretion has been used by the compensation committee, or its equivalent, we appreciate","page_number":238,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"b7e92195-7a2f-493d-95f4-273008aef071","block_type":"box","text":"disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned","page_number":238,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"c7a58d85-3fd7-4f83-95c1-b858c99abb3b","block_type":"box","text":"with the interests of shareholders. In addition, we acknowledge that the use of peer group evaluation","page_number":238,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"cc826703-82bc-4b79-b183-c16972301db9","block_type":"box","text":"by compensation committees can help ensure competitive pay. However, we encourage companies to","page_number":238,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"f9b57a3b-1ef9-4ea6-92bc-97388d96efa1","block_type":"box","text":"clearly explain how compensation outcomes have rewarded performance rather than solely base","page_number":238,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"04f1757e-022f-4d56-9258-847d5bfc5007","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":238,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"a99ef9ca-b5c2-4a8b-9ada-b2c656463348","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such","page_number":238,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"9631dd73-fd7d-4fe8-9ea7-652c7c3b2eaf","block_type":"box","text":"provisions could require executives to forgo awards when compensation was based on faulty financial","page_number":238,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"e56d7201-38fb-45b7-a0d3-a9d8549b429f","block_type":"box","text":"statements or deceptive business practices, or when their behavior caused material financial harm to","page_number":238,"box":{"x":116,"y":382,"width":754,"height":12}},{"id":"762da131-0294-4bea-a5ce-5a40b2d6f86b","block_type":"box","text":"shareholders, material reputational risk to the company, or resulted in a criminal investigation.","page_number":238,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"c92544bd-68f4-4e5c-91a1-73b80250a780","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with","page_number":238,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"24fafcb7-c591-445b-b763-0de9a20e9acd","block_type":"box","text":"the time and effort expended in fulfilling their professional responsibilities. Additionally, these","page_number":238,"box":{"x":116,"y":444,"width":691,"height":12}},{"id":"3edd5d3b-67f8-4a97-b682-61bbf7469737","block_type":"box","text":"compensation arrangements should not risk compromising directors’ independence or aligning their","page_number":238,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"0121ce1e-7835-4e4c-8f61-025407d5acb7","block_type":"box","text":"interests too closely with those of the management, whom they are charged with overseeing.","page_number":238,"box":{"x":117,"y":475,"width":693,"height":12}},{"id":"5b673a8c-1696-450f-8b92-5fb97e43be20","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether","page_number":238,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"d8950686-dd8c-4f11-a8d3-b69da7cdc7ca","block_type":"box","text":"the board’s approach to executive compensation is rigorous in light of the company’s stated long-term","page_number":238,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"4b41fbda-4b0d-4693-be2c-f376a739e8d8","block_type":"box","text":"corporate strategy and specific circumstances, as well as local market and policy developments.","page_number":238,"box":{"x":116,"y":537,"width":719,"height":12}},{"id":"678564a8-742f-418c-9c1b-589aa7beaf2a","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance,","page_number":238,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"00fa3785-fe14-401d-b2da-8339add969dd","block_type":"box","text":"BIS may not support management’s proposals to approve compensation, where they are on the","page_number":238,"box":{"x":117,"y":583,"width":715,"height":12}},{"id":"dc8f3886-ea0b-4bab-bb84-74d30b1b7e8a","block_type":"box","text":"agenda. We may also not support members of the compensation committee or equivalent board","page_number":238,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"6a784d4c-a8ba-4a25-9151-03a592e51569","block_type":"box","text":"members for poor compensation practices or structures.","page_number":238,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"108233ff-539e-4045-aa19-2437d8a441d4","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":238,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"27dbba85-cd9b-42c0-8ec2-8777d417325d","block_type":"box","text":"Corporate form","page_number":238,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"86104755-63de-48ee-85b4-853e4a12c49f","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":238,"box":{"x":117,"y":715,"width":760,"height":12}},{"id":"e4ce191e-de48-4658-9954-2168ce896eed","block_type":"box","text":"given the company’s purpose and business model.","page_number":238,"box":{"x":116,"y":731,"width":376,"height":12}},{"id":"a07bfce0-94a8-4bc5-bdf0-ca171cc29288","block_type":"box","text":"9","page_number":238,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"3f66e013-57e5-4132-99c2-77195959d1a6","block_type":"box","text":"We look to companies proposing to change their","page_number":238,"box":{"x":504,"y":731,"width":361,"height":12}},{"id":"8f297f69-3b71-4894-83f2-497e64718683","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":238,"box":{"x":116,"y":746,"width":726,"height":12}},{"id":"db0bad89-33e8-420c-a062-755e9eee92f6","block_type":"box","text":"already required to do so under applicable law. We appreciate when supporting documentation from","page_number":238,"box":{"x":116,"y":761,"width":742,"height":13}},{"id":"6ee408bf-d013-4437-89d6-7e16e7a236cc","block_type":"box","text":"companies or shareholders proposing to alter the corporate form clearly explains how the interests of","page_number":238,"box":{"x":116,"y":777,"width":751,"height":12}},{"id":"7f2730ab-a9c7-4949-85c8-1adc1295b1cb","block_type":"box","text":"shareholders and different stakeholders would be impacted as well as the accountability and voting","page_number":238,"box":{"x":116,"y":792,"width":735,"height":13}},{"id":"7af8fff4-d23a-46aa-ac4b-0e699c4eb94f","block_type":"box","text":"mechanisms that would be available to shareholders. We generally support management proposals if","page_number":238,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"18a33214-3832-4b6d-a798-cdc33f9d8d55","block_type":"box","text":"our analysis indicates that shareholders’ financial interests are adequately protected. Corporate form","page_number":238,"box":{"x":116,"y":823,"width":746,"height":13}},{"id":"a0fd984f-7c5e-4134-b5d5-fffec0bf6077","block_type":"box","text":"shareholder proposals are evaluated on a case-by-case basis.","page_number":238,"box":{"x":116,"y":839,"width":468,"height":12}},{"id":"012b0acc-f235-4726-84e7-cfbc05508166","block_type":"box","text":"9","page_number":238,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"c82cbde4-59b1-4f91-8eb7-39c7834a9b6c","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":238,"box":{"x":170,"y":880,"width":457,"height":9}},{"id":"1f38c38a-e828-447e-8e6d-c75065921c7c","block_type":"box","text":"BlackRock Investment Stewardship","page_number":238,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"ca441eb9-bfc4-474b-9a4b-b44530086a26","block_type":"box","text":"Global Principles |","page_number":238,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"7932efae-bf13-4a1d-bd8a-112bf8be3bcf","block_type":"box","text":"10","page_number":238,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"cf5950e3-853e-4744-9f7f-1e6f0be5f444","block_type":"box","text":"NM1026U-6042785-238/259","page_number":238,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3e2e2446-e787-4bea-95d8-3cfdc10b05be","block_type":"box","text":"Shareholder proposals","page_number":239,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"5dd8f9dc-a20e-46d8-905b-0781abf49bc7","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":239,"box":{"x":117,"y":120,"width":717,"height":11}},{"id":"16529f02-bce2-4ed2-ad1c-34cfef8f427f","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics,","page_number":239,"box":{"x":117,"y":135,"width":762,"height":12}},{"id":"390f3909-c571-42c5-b70d-ba2df2dc50d2","block_type":"box","text":"including governance reforms, capital management, and changes in the management or disclosure of","page_number":239,"box":{"x":117,"y":150,"width":758,"height":12}},{"id":"4bb194c4-401a-4a9e-860c-9f74e6d66d2f","block_type":"box","text":"sustainability-related risks. These proposals have a varying degree of relevance for companies across","page_number":239,"box":{"x":116,"y":166,"width":763,"height":12}},{"id":"e9c322ab-248c-42eb-9920-f7b7b54e1f68","block_type":"box","text":"sectors, locations, and business models.","page_number":239,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"937a773a-91bd-47b7-b703-f37e60f7eb56","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus","page_number":239,"box":{"x":117,"y":214,"width":764,"height":12}},{"id":"7af69d07-2549-482e-b611-aff6f3b05d9b","block_type":"box","text":"on the proposal’s implications for long-term financial value creation for shareholders. Our analysis","page_number":239,"box":{"x":116,"y":229,"width":730,"height":12}},{"id":"536c0b42-05ba-4f43-8520-821cd0381ef2","block_type":"box","text":"considers whether a shareholder proposal addresses a material risk that may impact a company’s","page_number":239,"box":{"x":116,"y":245,"width":732,"height":12}},{"id":"2e34bc17-54cd-4156-9863-b9e25ebf4b3b","block_type":"box","text":"long-term financial performance. BIS may support shareholder proposals that request disclosures that","page_number":239,"box":{"x":117,"y":260,"width":760,"height":12}},{"id":"d3b05df5-8413-429e-9b25-87204e1a503b","block_type":"box","text":"help us, as long-term investors on behalf of our clients, better understand the material risks and","page_number":239,"box":{"x":117,"y":276,"width":713,"height":12}},{"id":"b26f4062-42c7-4b4a-8da9-cebda57565f0","block_type":"box","text":"opportunities companies face and how they are managing them, especially where this information is","page_number":239,"box":{"x":116,"y":291,"width":747,"height":12}},{"id":"9fb8935d-30f3-4a92-98c0-d4fe4501a9a1","block_type":"box","text":"additive given the company’s existing disclosures. We look for consistency between the specific","page_number":239,"box":{"x":116,"y":307,"width":715,"height":12}},{"id":"bdc0570a-e6e2-42ba-81bb-eb17ee3f587e","block_type":"box","text":"request formally made in the proposal, the supporting documentation, and the proponents’ other","page_number":239,"box":{"x":117,"y":322,"width":717,"height":12}},{"id":"19f6fb0a-40e3-4986-a311-d645abeb3c46","block_type":"box","text":"communications on the issues. We also assess the company’s practices and disclosures and the costs","page_number":239,"box":{"x":116,"y":338,"width":769,"height":12}},{"id":"e61c8040-0b8b-4f4d-9a4d-34b8f2f491c3","block_type":"box","text":"and benefits to the company of meeting the request made in the proposal. We take into consideration a","page_number":239,"box":{"x":116,"y":353,"width":772,"height":12}},{"id":"f228b747-2f9f-47d7-a347-e52204583e49","block_type":"box","text":"company’s governance practices and disclosures against those of their peers.","page_number":239,"box":{"x":116,"y":369,"width":583,"height":12}},{"id":"703e3d98-f0de-45a9-8854-0fb31b63bfe7","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value","page_number":239,"box":{"x":117,"y":401,"width":767,"height":12}},{"id":"bc436163-ae91-407e-8f0b-35c8cee128a4","block_type":"box","text":"or that seek to micromanage companies. We take into consideration the legal effect of the proposal, as","page_number":239,"box":{"x":116,"y":417,"width":769,"height":12}},{"id":"fb53bab5-1c59-4419-a4c5-9169150efc3c","block_type":"box","text":"shareholder proposals may be advisory or legally binding depending on the jurisdiction, while others","page_number":239,"box":{"x":116,"y":432,"width":747,"height":12}},{"id":"ce08fbd2-143e-4ed3-a026-214e0329ee6b","block_type":"box","text":"may make requests that would be deemed illegal in a given jurisdiction.","page_number":239,"box":{"x":117,"y":448,"width":534,"height":12}},{"id":"ab52ac40-eb03-405a-9fc3-58ebbc3675e0","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization","page_number":239,"box":{"x":117,"y":480,"width":745,"height":12}},{"id":"2c1fab62-07cf-4971-99ff-56720cbf8882","block_type":"box","text":"that has submitted or advised on the proposal. We recognize that some shareholder proposals bundle","page_number":239,"box":{"x":116,"y":496,"width":762,"height":12}},{"id":"e67a2410-93b7-4b16-8a66-8575db49bfde","block_type":"box","text":"topics and/or specific requests. Further, the proponent’s supporting statement may refer to topics that","page_number":239,"box":{"x":116,"y":511,"width":758,"height":12}},{"id":"86df6c7c-224f-4576-b485-2cf5370c44bf","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":239,"box":{"x":116,"y":527,"width":767,"height":12}},{"id":"e58add7a-fef4-43b2-b69d-9365ff2d69ca","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":239,"box":{"x":116,"y":542,"width":720,"height":12}},{"id":"66d46531-7e97-4ad7-a391-286ff499479c","block_type":"box","text":"proposal, we are not necessarily endorsing every element of the proposal or the reasoning, objectives,","page_number":239,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"7ea898ac-e503-435d-8b3f-438a531d1c85","block_type":"box","text":"or supporting statement of the proponent. We may support a proposal for different reasons than those","page_number":239,"box":{"x":116,"y":573,"width":762,"height":12}},{"id":"0dae57db-988f-4824-a45d-a4fb398d9f4c","block_type":"box","text":"put forth by the proponent, when we believe that overall it may advance our clients’ long-term financial","page_number":239,"box":{"x":117,"y":589,"width":762,"height":12}},{"id":"2da61244-2961-4bae-9f45-89f605f01585","block_type":"box","text":"interests.","page_number":239,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"37f69bae-a412-448f-a20f-f0a7c36bb68b","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that","page_number":239,"box":{"x":117,"y":637,"width":752,"height":12}},{"id":"abf72c3d-cbb4-4a83-adb4-5b339a93fe09","block_type":"box","text":"place restrictions and limitations on how BlackRock can interact with the companies in which we invest","page_number":239,"box":{"x":117,"y":652,"width":766,"height":12}},{"id":"831fc5ae-1920-4efb-9ae2-2ca5d463a9ee","block_type":"box","text":"on behalf of our clients. BlackRock does not nominate directors for board elections or submit","page_number":239,"box":{"x":116,"y":667,"width":687,"height":10}},{"id":"5dced976-fa23-48aa-b42c-ef622193fb01","block_type":"box","text":"shareholder proposals to companies. Non-compliance with these requirements could adversely affect","page_number":239,"box":{"x":116,"y":683,"width":752,"height":12}},{"id":"1c7a6a2a-c70d-4d33-ad44-2c5e0d39e375","block_type":"box","text":"BlackRock’s ability to serve its clients’ interests.","page_number":239,"box":{"x":117,"y":699,"width":352,"height":12}},{"id":"b58476f2-be3e-45e6-942f-ca76f61df1ac","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":239,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"bd751101-b7f1-4fe7-87b8-895f169531e7","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks","page_number":239,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"fe5b81ed-e870-481a-b148-17bc237d6a3f","block_type":"box","text":"and opportunities, is an important component of having an effective governance framework that","page_number":239,"box":{"x":116,"y":787,"width":709,"height":12}},{"id":"e2c9f24f-07f7-4778-93e3-cefe041f8d25","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":239,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"3ae86f84-0769-4823-8e9c-04e1b7fae154","block_type":"box","text":"10","page_number":239,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"9065f139-b8c7-46e8-aa9f-ebe852eb2a4a","block_type":"box","text":"10","page_number":239,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"b61ad300-c292-4aca-ba7c-9fe2c438dfd1","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":239,"box":{"x":171,"y":828,"width":691,"height":9}},{"id":"eb6f79c3-0356-4fbc-9bd1-8e84086c94c9","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":239,"box":{"x":170,"y":841,"width":686,"height":9}},{"id":"5928f504-88af-4077-af11-7f07cec2379d","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":239,"box":{"x":170,"y":854,"width":682,"height":9}},{"id":"c1af5e2d-e6b4-47a6-81f9-d127297e2b16","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":239,"box":{"x":170,"y":867,"width":683,"height":9}},{"id":"92c8717a-7ef8-43f4-ae3f-05305f47c58f","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":239,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"f212b4f9-cd6d-49b9-9398-5412db88678f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":239,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"1dddfec4-c9a8-4aa2-af88-07618a106669","block_type":"box","text":"Global Principles |","page_number":239,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"e869771d-2c30-42b7-b9f3-0abb0b963582","block_type":"box","text":"11","page_number":239,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"bea9ffeb-fb22-4ea4-b11d-cffc2664c514","block_type":"box","text":"NM1026U-6042785-239/259","page_number":239,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1e024c38-90f0-4de2-bd53-916fac996c24","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate","page_number":240,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"c24f7da7-a71e-4f1b-9cfd-26402b0d9bc0","block_type":"box","text":"companies’ strategy and business practices related to material sustainability-related risks and","page_number":240,"box":{"x":116,"y":103,"width":699,"height":12}},{"id":"e7b3b98f-3d93-445e-b633-8ddd1c6e84ca","block_type":"box","text":"opportunities. We find it helpful when companies’ disclosures demonstrate that they have a resilient","page_number":240,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"2236c293-58df-4d4e-a94e-57060d2af447","block_type":"box","text":"business model that integrates material sustainability-related risks and opportunities into their strategy,","page_number":240,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"d54b9e05-f76d-4a4b-a537-69c1b28598a3","block_type":"box","text":"risk management, and metrics and targets, including industry-specific metrics.","page_number":240,"box":{"x":117,"y":149,"width":583,"height":12}},{"id":"c09d7f0b-0449-4ef9-be85-9f95ad8aa120","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions.","page_number":240,"box":{"x":116,"y":177,"width":766,"height":12}},{"id":"8c96d9e6-ac91-4b0c-9094-d62729bbd6e6","block_type":"box","text":"The International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one","page_number":240,"box":{"x":116,"y":193,"width":743,"height":12}},{"id":"3909ce58-eb4e-4b51-a844-42035622af0e","block_type":"box","text":"such approach to standardization that we find useful in our analysis.","page_number":240,"box":{"x":116,"y":208,"width":503,"height":12}},{"id":"594d0c16-e562-41c3-80fb-2a1fe091b5b6","block_type":"box","text":"11","page_number":240,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"d5dc55da-52fb-400a-96d1-28708b571fea","block_type":"box","text":"However, we do not mandate","page_number":240,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"17d4dd87-9c16-4f9b-9d1f-b758e38c7909","block_type":"box","text":"any specific disclosure framework companies should use, and recognize that companies may report","page_number":240,"box":{"x":116,"y":224,"width":747,"height":12}},{"id":"bbe1fac0-c70d-4521-b38d-b5033da3be43","block_type":"box","text":"using different standards, some of which may be required by regulation. In such cases, we ask that","page_number":240,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"56452aad-29fc-43ae-adc9-4c3a9b12d6ba","block_type":"box","text":"companies highlight the metrics that are industry- or company-specific.","page_number":240,"box":{"x":116,"y":255,"width":530,"height":12}},{"id":"04ea70d4-84e5-4c36-9036-2014b3195252","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not","page_number":240,"box":{"x":116,"y":283,"width":702,"height":12}},{"id":"b4341dd7-6e6b-453e-b89a-a44665d41d26","block_type":"box","text":"prescribe timelines regarding when companies should make sustainability-related disclosures but","page_number":240,"box":{"x":117,"y":299,"width":725,"height":12}},{"id":"a6e4ad73-16a8-4379-99e4-2525be75267f","block_type":"box","text":"appreciate it when companies produce them sufficiently in advance of their shareholder meeting, to the","page_number":240,"box":{"x":116,"y":314,"width":770,"height":12}},{"id":"e7385089-aaca-42ae-89c0-456208411402","block_type":"box","text":"best of their abilities, to provide investors with time to assess the data and make informed voting","page_number":240,"box":{"x":117,"y":330,"width":718,"height":12}},{"id":"c21bb066-f88c-4902-9de4-1cd3f37fac52","block_type":"box","text":"decisions.","page_number":240,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"63433b75-4cdb-46f9-9bce-306966f95cff","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to","page_number":240,"box":{"x":117,"y":374,"width":700,"height":12}},{"id":"7f913249-b1ad-4f33-bd4c-c8d43e8a5356","block_type":"box","text":"companies on best practices and disclosures. While not a voting item, we find it helpful to our","page_number":240,"box":{"x":116,"y":389,"width":697,"height":12}},{"id":"6a103e53-aec2-424b-9546-49f1c70bd033","block_type":"box","text":"understanding of investment risk when companies disclose any relevant global sustainability-related","page_number":240,"box":{"x":117,"y":405,"width":746,"height":12}},{"id":"6162d2d7-cd03-461a-a75b-3abefd6ba091","block_type":"box","text":"standards adopted, the industry initiatives in which they participate, any peer group benchmarking","page_number":240,"box":{"x":116,"y":420,"width":731,"height":12}},{"id":"7696840c-141e-4156-915a-cdcdaa922c4d","block_type":"box","text":"undertaken, and any assurance processes to help investors understand their approach to sustainable","page_number":240,"box":{"x":117,"y":436,"width":758,"height":12}},{"id":"ee666499-7af6-4e2a-869d-ef912617e2e2","block_type":"box","text":"and responsible business practices.","page_number":240,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"32d25e7f-32d9-40cb-9db1-115c7b1eaaf3","block_type":"box","text":"Climate and nature-related risk","page_number":240,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"843a5301-1781-422a-930c-fe9b27d79479","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term","page_number":240,"box":{"x":117,"y":508,"width":745,"height":12}},{"id":"c73e760b-fcbd-4e3a-b210-5874b5dc6832","block_type":"box","text":"financial value to investors. For companies facing material climate-related risks, we find it helpful when","page_number":240,"box":{"x":116,"y":523,"width":766,"height":12}},{"id":"9d3b213d-2038-4115-a4f3-ea1097bce2c3","block_type":"box","text":"they publicly disclose, consistent with their business model and sector, how they intend to deliver long","page_number":240,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"52ab34b3-8607-45ae-9bb3-aa54f85f5134","block_type":"box","text":"term financial performance through the low-carbon transition, including where available, their transition","page_number":240,"box":{"x":116,"y":554,"width":766,"height":12}},{"id":"3028059c-afb4-4757-bacf-c21dd6e63fc4","block_type":"box","text":"plan.","page_number":240,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"bf1476f4-51f6-4833-b2fe-30c3acaf25a2","block_type":"box","text":"12, 13","page_number":240,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"8226d22b-8009-49ae-898c-45313f046f0f","block_type":"box","text":"From company disclosures and engagement, we seek to understand the strategies","page_number":240,"box":{"x":182,"y":570,"width":626,"height":12}},{"id":"af62a387-d0bf-4f95-90c9-22bc90570ab7","block_type":"box","text":"companies have in place to manage material risks to, and opportunities for, their long-term business","page_number":240,"box":{"x":116,"y":585,"width":748,"height":12}},{"id":"07df0eef-546c-4685-9799-5fda20dd2c29","block_type":"box","text":"model associated with a range of climate-related scenarios.","page_number":240,"box":{"x":117,"y":601,"width":446,"height":12}},{"id":"3668e2ad-262b-4144-97d8-ca50f9341d5c","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate","page_number":240,"box":{"x":117,"y":629,"width":734,"height":12}},{"id":"02bce4c1-7e6a-45d8-bad6-40eb8f465b2a","block_type":"box","text":"large companies to disclose such climate-related financial information, while in other jurisdictions these","page_number":240,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"ce838b8d-1d64-40c1-8fe6-b213ce2aedc4","block_type":"box","text":"disclosures are viewed as best practice in the market.","page_number":240,"box":{"x":116,"y":660,"width":398,"height":12}},{"id":"c0ac7cde-1a2b-43bd-8e80-aa6b88a1cbb8","block_type":"box","text":"11","page_number":240,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"1e8929b6-05cf-49c7-82d6-02a037594011","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":240,"box":{"x":170,"y":685,"width":666,"height":10}},{"id":"fd61ca67-ebd8-4033-a798-4060c6a1556a","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":240,"box":{"x":171,"y":698,"width":712,"height":10}},{"id":"ee429007-1aaa-4551-8328-57ee281e2b29","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":240,"box":{"x":170,"y":711,"width":649,"height":10}},{"id":"2c4ecb26-0a06-4876-8ba5-f64e5f30365d","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":240,"box":{"x":170,"y":724,"width":674,"height":10}},{"id":"f061f8b5-a3a6-443d-bae1-649d134b8be8","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":240,"box":{"x":170,"y":737,"width":647,"height":10}},{"id":"b0ae24ef-fc48-4324-ad3c-86b724384696","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":240,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"a328f69b-bbbf-4dc1-8f9a-f3ee854f417e","block_type":"box","text":"12","page_number":240,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"eb2a8b09-9450-49ad-be08-c14a5be55636","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":240,"box":{"x":170,"y":763,"width":685,"height":10}},{"id":"cc3e3688-0866-40d3-81f2-47444076b608","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":240,"box":{"x":170,"y":776,"width":670,"height":10}},{"id":"a1422eef-40cf-42e5-b5e8-0b777e8c0bb5","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":240,"box":{"x":171,"y":789,"width":691,"height":9}},{"id":"f667d21d-b88b-4461-83c7-ef5c67a63bc6","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives,","page_number":240,"box":{"x":170,"y":802,"width":710,"height":9}},{"id":"2d8ea111-c750-44e7-a323-2ca3e56bd75b","block_type":"box","text":"and actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":240,"box":{"x":170,"y":815,"width":709,"height":9}},{"id":"3225e3c7-32e6-4561-a47f-ccc24e6b6d82","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":240,"box":{"x":170,"y":828,"width":710,"height":9}},{"id":"f7ce3e2f-24a8-4776-9e4d-300979c20dea","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":240,"box":{"x":170,"y":840,"width":684,"height":10}},{"id":"65b97118-3b34-45af-9305-12b27f7d471c","block_type":"box","text":"engage companies that have chosen to publish a transition plan to understand their planned actions and resource","page_number":240,"box":{"x":170,"y":853,"width":675,"height":10}},{"id":"7e7f58a4-aded-4736-8fb5-36a05a434a11","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":240,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"1ca6e054-78fd-4463-b89c-4171168c56d1","block_type":"box","text":"13","page_number":240,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"88c67fc8-8a44-46e9-a193-92ae7cfe601e","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December 2025.","page_number":240,"box":{"x":171,"y":879,"width":703,"height":10}},{"id":"f5213674-0f8c-4a91-ad13-fbd0f463022d","block_type":"box","text":"BlackRock Investment Stewardship","page_number":240,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"cbb34516-43f2-4371-be55-fd9b6eef04a5","block_type":"box","text":"Global Principles |","page_number":240,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"e935a848-73aa-4ebf-aadf-ac9a9cde4a41","block_type":"box","text":"12","page_number":240,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"daff8059-f102-4b92-be5b-2cb2bf37c082","block_type":"box","text":"NM1026U-6042785-240/259","page_number":240,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4a69f2f2-f725-4a2b-bbb5-f09cdfaae008","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company","page_number":241,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"b71a9739-1597-4b30-a0c5-a3095908825e","block_type":"box","text":"specific climate-related risks and opportunities, and informing investment decisions. Such disclosures","page_number":241,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"6f98880e-b481-4583-b43c-f629df6c9895","block_type":"box","text":"also provide investors with insights into how companies are managing the risks associated with a","page_number":241,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"d452a5b0-c51e-4c17-9560-b686e67e4a58","block_type":"box","text":"transition to a low-carbon economy by managing their own carbon emissions or emissions intensities","page_number":241,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"4136c387-a72e-4ec1-9ed8-0e8bb35c3880","block_type":"box","text":"to the extent financially practicable.","page_number":241,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"25f07699-69ab-4536-be65-57706a30b0e8","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-,","page_number":241,"box":{"x":116,"y":177,"width":723,"height":12}},{"id":"0130f261-f69b-40c2-9e68-4396846a4f84","block_type":"box","text":"medium- and long-term targets, ideally science-based where these are available for their sector, for","page_number":241,"box":{"x":117,"y":193,"width":742,"height":12}},{"id":"f7461d45-92c5-4bb2-90e8-5de9070044c2","block_type":"box","text":"scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are","page_number":241,"box":{"x":116,"y":208,"width":760,"height":12}},{"id":"8c6388b0-77f7-417c-817d-b0e70ae22f3d","block_type":"box","text":"consistent with the long-term financial interests of their investors.","page_number":241,"box":{"x":116,"y":224,"width":486,"height":12}},{"id":"51321589-5889-43ae-9366-cd0252ecd65c","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this","page_number":241,"box":{"x":116,"y":252,"width":766,"height":12}},{"id":"028be4b5-817a-4229-b583-63ff53a5f039","block_type":"box","text":"stage, we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity,","page_number":241,"box":{"x":116,"y":268,"width":749,"height":12}},{"id":"379bd8d3-df5e-406c-b880-0c56c40d6ceb","block_type":"box","text":"regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We","page_number":241,"box":{"x":117,"y":283,"width":749,"height":12}},{"id":"483b44ff-90ee-425e-bc5a-50f25fe3c029","block_type":"box","text":"welcome disclosures and commitments that companies choose to make regarding material scope 3","page_number":241,"box":{"x":116,"y":299,"width":744,"height":12}},{"id":"5c526ac4-0236-4146-ad8a-a048173b6b54","block_type":"box","text":"emissions and recognize that these are provided on a good-faith basis as methodology develops.","page_number":241,"box":{"x":116,"y":314,"width":728,"height":12}},{"id":"481319bf-6956-4e93-afbc-204583034858","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or","page_number":241,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"d566747f-62c5-420a-b73a-65b44c8b9192","block_type":"box","text":"supply chains are materially reliant on natural capital, nature-related risks and opportunities may affect","page_number":241,"box":{"x":116,"y":358,"width":765,"height":12}},{"id":"1e48223e-4563-4d73-ac37-8baaa65a2efa","block_type":"box","text":"their ability to generate long-term financial returns.","page_number":241,"box":{"x":116,"y":374,"width":372,"height":12}},{"id":"98ef732f-e5e0-40ca-a168-69f91b050957","block_type":"box","text":"14","page_number":241,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"321b5bf5-c154-4b5d-a879-41117f2da555","block_type":"box","text":"For these companies, we rely on disclosures to","page_number":241,"box":{"x":502,"y":374,"width":360,"height":12}},{"id":"01730ea1-116f-4d5d-959c-16e8218dc520","block_type":"box","text":"understand how their strategies consider nature-related impacts and dependencies and to assess how","page_number":241,"box":{"x":117,"y":389,"width":765,"height":12}},{"id":"32c6cd6d-1e52-449d-9bbb-ddc04b7d6996","block_type":"box","text":"the board oversees these risks.","page_number":241,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"f10d0de3-0adf-426a-9c08-c6a8ce0cf0db","block_type":"box","text":"15","page_number":241,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"4b3a1441-c9bd-427f-ad41-0bbae1a27e1a","block_type":"box","text":"Companies’ impact on their workforce, supply chains, and communities","page_number":241,"box":{"x":117,"y":433,"width":579,"height":12}},{"id":"8296fb7d-35d3-4873-9f0b-6c915eea6fc7","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term","page_number":241,"box":{"x":117,"y":461,"width":768,"height":12}},{"id":"84890b62-2346-4611-9485-376bd5d67357","block_type":"box","text":"financial performance. For many companies, key stakeholders include employees, business supply","page_number":241,"box":{"x":116,"y":477,"width":741,"height":12}},{"id":"b3e73b87-e43d-4682-9aef-41a229ffb637","block_type":"box","text":"chains, clients and consumers, regulators, and the communities in which they operate.","page_number":241,"box":{"x":116,"y":493,"width":647,"height":11}},{"id":"1e5001eb-96a7-42ca-ab5f-d876a57e9007","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives","page_number":241,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"584128ff-9594-4881-8378-e0b9fc05cca2","block_type":"box","text":"are more likely to deliver durable, long-term financial performance. By contrast, we have found that","page_number":241,"box":{"x":116,"y":536,"width":739,"height":12}},{"id":"90290dcf-acf8-46ca-a3f4-e7b7437eba98","block_type":"box","text":"poor relationships may create adverse impacts that could expose companies to legal, regulatory,","page_number":241,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"53d611d2-8ea0-4ae8-85f8-2a3144679742","block_type":"box","text":"operational, and reputational risks. This is particularly relevant to a company’s workforce, which is","page_number":241,"box":{"x":116,"y":567,"width":730,"height":12}},{"id":"858639c3-11a9-4dae-875f-700687e07ea3","block_type":"box","text":"central to long-term financial value creation.","page_number":241,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"c4d9c16a-23ee-4d72-8642-7d8ca9b84506","block_type":"box","text":"16","page_number":241,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"8b5df391-cc07-4d3d-b884-7720ba614710","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how","page_number":241,"box":{"x":116,"y":611,"width":743,"height":12}},{"id":"a9ed8684-510e-4b09-99d6-668092a1b116","block_type":"box","text":"they have identified their key stakeholders and considered their interests in business decision-making.","page_number":241,"box":{"x":116,"y":627,"width":763,"height":12}},{"id":"fc16574e-f20e-499c-9ad6-15bbf794a9c4","block_type":"box","text":"In addition to understanding broader stakeholder relationships, BIS finds it helpful when companies","page_number":241,"box":{"x":117,"y":642,"width":740,"height":12}},{"id":"e99497c4-1b3c-4193-b4fe-1726c6cda593","block_type":"box","text":"discuss how they consider the needs of their workforce today, and the skills required for their future","page_number":241,"box":{"x":116,"y":658,"width":742,"height":12}},{"id":"146001b2-653a-4bdf-a3bc-464b3ca070b2","block_type":"box","text":"business strategy. We are also interested in understanding how the board monitors and engages on","page_number":241,"box":{"x":117,"y":673,"width":741,"height":12}},{"id":"1013a00e-ac0d-4287-9ae0-faf7933922e7","block_type":"box","text":"these matters, given it is well positioned to ensure that the approach taken by management is informed","page_number":241,"box":{"x":116,"y":689,"width":764,"height":12}},{"id":"c9892b4a-4886-4efa-9aa7-ddc86d9478f3","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":241,"box":{"x":117,"y":704,"width":765,"height":12}},{"id":"f8448395-aaa7-4a87-bcc9-c7fba0d12459","block_type":"box","text":"are the responsibility of management and the board.","page_number":241,"box":{"x":116,"y":720,"width":387,"height":12}},{"id":"7114a3fe-e2ef-4dc0-926b-1fa832c3db23","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse","page_number":241,"box":{"x":117,"y":748,"width":749,"height":12}},{"id":"f0acff1f-608f-4f07-ab23-a4ddf479fc3e","block_type":"box","text":"impacts that could arise from their business practices and affect critical relationships with their","page_number":241,"box":{"x":117,"y":763,"width":697,"height":12}},{"id":"b32061e5-c3d2-4e7b-952b-bfb489c004ce","block_type":"box","text":"14","page_number":241,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"3e0b4075-d05c-43ac-98ee-6635949f5ed2","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December 2025.","page_number":241,"box":{"x":171,"y":789,"width":697,"height":9}},{"id":"2887c962-6c9d-43e0-a11e-54debd61c9f0","block_type":"box","text":"15","page_number":241,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"2f995920-1fa9-43f8-bd0b-d12b12a87deb","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":241,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"27451ca6-78e0-47a2-a4aa-58b75d8a8857","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of the","page_number":241,"box":{"x":170,"y":814,"width":704,"height":10}},{"id":"4cc490c4-70ec-4736-b3a2-1fe63bee4aec","block_type":"box","text":"Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":241,"box":{"x":170,"y":827,"width":689,"height":10}},{"id":"d3e8ec8c-0afa-4f09-958f-c54fcfe2c93d","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":241,"box":{"x":170,"y":840,"width":680,"height":10}},{"id":"8b03fa96-f277-4868-af58-66d848fde1d3","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":241,"box":{"x":170,"y":853,"width":680,"height":10}},{"id":"c504e2fa-b88a-4d86-a06f-222f22a806d4","block_type":"box","text":"16","page_number":241,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"4a8b66f7-ed17-494c-8967-5d26fca15c9f","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":241,"box":{"x":171,"y":866,"width":677,"height":10}},{"id":"39f1fdac-50e5-404c-b8c2-1a46d598b31d","block_type":"box","text":"December 2025.","page_number":241,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"6cc96f25-6793-4f60-825d-59fd4b56def2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":241,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"1b8f4ebc-3bb0-4290-b69f-d7bf8f378ad9","block_type":"box","text":"Global Principles |","page_number":241,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"32e3218b-4e1e-46e2-b12a-1863456b62c0","block_type":"box","text":"13","page_number":241,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"2606379e-6131-4648-ae95-2f34ccc4c49d","block_type":"box","text":"NM1026U-6042785-241/259","page_number":241,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"893298a2-d84a-4f03-bdbd-1fc3189c5d93","block_type":"box","text":"stakeholders. We encourage companies to implement, to the extent appropriate, monitoring processes","page_number":242,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"d501218e-2375-4219-8a10-4f192df3fde3","block_type":"box","text":"(often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance","page_number":242,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"2d6a5108-ab8d-4f15-bc36-47023da77076","block_type":"box","text":"mechanisms to remediate any actual adverse material impacts.","page_number":242,"box":{"x":117,"y":118,"width":474,"height":12}},{"id":"fcb11595-5160-4ce8-a6da-78212dde2197","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key","page_number":242,"box":{"x":116,"y":148,"width":729,"height":12}},{"id":"2cf89598-2c0b-483c-ab9a-323dc0819cdb","block_type":"box","text":"stakeholders and may convey concerns about board oversight in our voting on director elections or","page_number":242,"box":{"x":116,"y":164,"width":739,"height":12}},{"id":"3df66cfd-5ced-4996-b0c0-18a6c7efe4e4","block_type":"box","text":"supporting a business relevant shareholder proposal when, in our assessment, the board is not acting","page_number":242,"box":{"x":116,"y":179,"width":761,"height":12}},{"id":"ddfb84c3-3625-4701-a340-063bf0f6e208","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":242,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"193f19c9-6d04-497e-a45c-dc94a45c0895","block_type":"box","text":"BlackRock’s oversight of its investment stewardship activities","page_number":242,"box":{"x":251,"y":232,"width":503,"height":12}},{"id":"34c7b592-df92-4b0e-8b75-36fd1b1d19f4","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on","page_number":242,"box":{"x":117,"y":262,"width":742,"height":12}},{"id":"4afeddf4-cdfc-47a2-8177-2ec8653d094f","block_type":"box","text":"behalf of clients at the global and regional level.","page_number":242,"box":{"x":117,"y":278,"width":358,"height":12}},{"id":"d6b99323-e113-4978-962b-a340b448f2e9","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the","page_number":242,"box":{"x":116,"y":308,"width":699,"height":12}},{"id":"b80eff9c-8df2-4e06-9e81-d5100337b010","block_type":"box","text":"Committee) supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to","page_number":242,"box":{"x":117,"y":324,"width":760,"height":12}},{"id":"e9257523-461a-47c0-b261-8da2428caf5b","block_type":"box","text":"policies and procedures as well as market-level stewardship requirements. The Committee reviews","page_number":242,"box":{"x":117,"y":339,"width":740,"height":12}},{"id":"86621689-b4c0-4790-9176-052e80e4560f","block_type":"box","text":"and approves amendments to the Global Principles and regional voting guidelines. The Committee","page_number":242,"box":{"x":116,"y":355,"width":738,"height":12}},{"id":"34bb38ef-3be0-4745-b72c-cba2dbca90cc","block_type":"box","text":"also reviews periodic reports regarding the votes cast by BIS on behalf of clients, as well as updates","page_number":242,"box":{"x":116,"y":370,"width":749,"height":12}},{"id":"b92a5fa6-279b-4cc2-9dbb-f3bbbc88d81b","block_type":"box","text":"on material process issues, procedural changes, and other risk oversight considerations. The","page_number":242,"box":{"x":116,"y":386,"width":697,"height":12}},{"id":"83c7ab8c-50fb-4c34-971b-6f1c804c7e24","block_type":"box","text":"Committee is chaired by the Global Heads of the Investment Stewardship function and its members","page_number":242,"box":{"x":117,"y":401,"width":743,"height":12}},{"id":"b788f021-8a80-4f4c-95ab-6b2665c4a331","block_type":"box","text":"include senior BlackRock executives with legal, risk, and other experience relevant to team oversight","page_number":242,"box":{"x":117,"y":417,"width":752,"height":12}},{"id":"a6779860-d449-4a8e-afc8-17f2e4e2a6d8","block_type":"box","text":"who are independent from the investment stewardship function.","page_number":242,"box":{"x":116,"y":432,"width":477,"height":12}},{"id":"a4899acc-6da3-4a05-af1d-cadb14be5f66","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with","page_number":242,"box":{"x":116,"y":462,"width":769,"height":12}},{"id":"64d49eb6-d229-4149-a7d0-da752c8a8c62","block_type":"box","text":"the Global Principles and regional voting guidelines. At the regional level, three regional Heads for the","page_number":242,"box":{"x":116,"y":478,"width":761,"height":12}},{"id":"bc1f331d-14c8-48a9-b464-88e7252641d2","block_type":"box","text":"Americas, APAC, and EMEA oversee BIS’ activities for their specific markets.","page_number":242,"box":{"x":116,"y":493,"width":581,"height":12}},{"id":"e23df15e-8318-41fb-aef9-10d91db355d2","block_type":"box","text":"Vote execution","page_number":242,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"e199efc0-aa8e-4922-97ce-447d78f23851","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We","page_number":242,"box":{"x":117,"y":554,"width":739,"height":12}},{"id":"f6eb6ee1-de62-419c-969b-d58ff24f1cc4","block_type":"box","text":"have processes in place to consider all proxies for which we have voting authority, and submit voting","page_number":242,"box":{"x":117,"y":569,"width":751,"height":12}},{"id":"27535d99-443b-48ea-86ef-fdf1ea05e052","block_type":"box","text":"decisions, or refrain from voting when logistical issues arise (see below). The BIS Benchmark","page_number":242,"box":{"x":116,"y":585,"width":698,"height":12}},{"id":"94390b99-5edc-4651-b136-3852eb49dafb","block_type":"box","text":"Policies – and the vote decisions made consistent with those policies – reflect our reasonable and","page_number":242,"box":{"x":117,"y":600,"width":730,"height":12}},{"id":"a3c6169f-73c6-415d-bfe6-93a242d335ee","block_type":"box","text":"independent judgment and are made without regard to the relationship between the issuer of the proxy","page_number":242,"box":{"x":117,"y":616,"width":766,"height":12}},{"id":"fd39f699-99b0-45b6-b00f-062a25c647f9","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and the Fund, the Fund’s affiliates (if any),","page_number":242,"box":{"x":117,"y":631,"width":739,"height":12}},{"id":"20d84b15-25a3-46ed-a3ad-7171cfde7f49","block_type":"box","text":"BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts management policies and","page_number":242,"box":{"x":117,"y":647,"width":768,"height":12}},{"id":"507af68d-3e77-4574-a379-332a0390600b","block_type":"box","text":"procedures,” below).","page_number":242,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"949a85ed-f809-4a17-a008-083cc53d8bc9","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well","page_number":242,"box":{"x":117,"y":692,"width":743,"height":12}},{"id":"9aa06904-b23c-4b92-b829-b3a2c5f748fd","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":242,"box":{"x":116,"y":708,"width":754,"height":12}},{"id":"06cdf13e-13d3-4dcf-973c-422b30d7e0d4","block_type":"box","text":"1) untimely notice of shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3)","page_number":242,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"1a1f979d-61aa-4b11-9a94-8cf5a149eb9d","block_type":"box","text":"requirements to vote proxies in person; 4) “share-blocking” (requirements that investors who exercise","page_number":242,"box":{"x":117,"y":739,"width":751,"height":12}},{"id":"de208a9d-f245-44bf-8a17-924c35915ea2","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":242,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"fbc6c5c8-f093-45d0-960b-2e065226c5f6","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); 5) potential difficulties in","page_number":242,"box":{"x":116,"y":770,"width":695,"height":12}},{"id":"eb23de2a-3e33-40ca-b0cc-c49589396847","block_type":"box","text":"translating the proxy; 6) regulatory constraints; and 7) requirements to provide local agents with","page_number":242,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"c78703e7-4be7-48f9-a39a-e5c3edb95638","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":242,"box":{"x":117,"y":801,"width":701,"height":12}},{"id":"975acffa-2f30-4e15-bd4e-342478e2b965","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":242,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"fe995a45-326f-428f-b1a1-c4e9fa193788","block_type":"box","text":"BIS votes proxies in these situations on a “best-efforts” basis. In addition, BIS may determine that it is","page_number":242,"box":{"x":117,"y":846,"width":758,"height":13}},{"id":"dd34154e-a57f-463f-979c-31fac4201e1a","block_type":"box","text":"generally in the interests of BlackRock’s clients not to vote proxies (or not to vote our full allocation) if","page_number":242,"box":{"x":116,"y":862,"width":755,"height":12}},{"id":"00113c8f-8fb1-4882-82e0-5e42a516c217","block_type":"box","text":"the costs (including but not limited to opportunity costs associated with share-blocking constraints)","page_number":242,"box":{"x":116,"y":877,"width":734,"height":13}},{"id":"1d5ade4e-8055-472b-800a-194457b89506","block_type":"box","text":"BlackRock Investment Stewardship","page_number":242,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"37fac70d-47fe-4c87-92ff-2bbf36bd87ea","block_type":"box","text":"Global Principles |","page_number":242,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"3dcef1b4-d885-40f8-a10d-7bf2843cb743","block_type":"box","text":"14","page_number":242,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"04b7fee7-0ee0-4e98-8002-15f94b13fe89","block_type":"box","text":"NM1026U-6042785-242/259","page_number":242,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6d0c6130-2739-4bbc-85c6-14bc57ed86e3","block_type":"box","text":"associated with exercising a vote are expected to outweigh the benefit the client would derive by voting","page_number":243,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"0e0b1517-aa3e-4730-82c7-eb3c54061a3e","block_type":"box","text":"on the proposal.","page_number":243,"box":{"x":116,"y":103,"width":125,"height":11}},{"id":"d9669075-be85-4dcb-b0ee-c793ad2f4c3a","block_type":"box","text":"Conflicts management policies and procedures","page_number":243,"box":{"x":117,"y":134,"width":382,"height":12}},{"id":"15dc46b4-5ce1-43d9-8d38-8d9079d3037f","block_type":"box","text":"BIS is a dedicated function whose responsibilities are separate from BlackRock’s sales, business","page_number":243,"box":{"x":117,"y":165,"width":724,"height":11}},{"id":"f9f94fdd-c099-42fb-b918-d788f10f4a3b","block_type":"box","text":"partnership or enterprise-level vendor management activities.","page_number":243,"box":{"x":117,"y":180,"width":460,"height":12}},{"id":"87468dee-aac4-4701-991d-2eed6d856696","block_type":"box","text":"BlackRock maintains policies and procedures that are designed to prevent undue influence on BIS’","page_number":243,"box":{"x":117,"y":211,"width":739,"height":12}},{"id":"8e61049e-92e2-4442-8c01-5fd3f755cfd1","block_type":"box","text":"proxy voting activity. Such influence might stem from any relationship between the investee company","page_number":243,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"9df1562e-fed1-4fef-8434-1a50eb9ae844","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates, a Fund","page_number":243,"box":{"x":117,"y":242,"width":766,"height":12}},{"id":"e79ec9af-7921-43ba-bb8f-6bbf98c67c9f","block_type":"box","text":"or a Fund’s affiliates, or BlackRock employees.","page_number":243,"box":{"x":116,"y":258,"width":354,"height":12}},{"id":"acf4ef08-ace3-4950-9373-e5d183b4d2b4","block_type":"box","text":"For information on how BIS manages conflicts of interest, please see our disclosure.","page_number":243,"box":{"x":117,"y":289,"width":630,"height":12}},{"id":"9ee787bf-0e24-4c17-a031-785e10e0c409","block_type":"box","text":"Securities lending","page_number":243,"box":{"x":117,"y":320,"width":148,"height":12}},{"id":"777503ac-b7a2-4dea-a539-700ffc3090ca","block_type":"box","text":"When authorized, BlackRock acts as a securities lending agent on behalf of its clients. Lending","page_number":243,"box":{"x":116,"y":351,"width":710,"height":12}},{"id":"12b36bd3-437d-4d5d-8e8f-c1b8ab891b04","block_type":"box","text":"securities enables BlackRock to increase the returns in clients’ portfolios, and BlackRock’s lending","page_number":243,"box":{"x":116,"y":366,"width":735,"height":12}},{"id":"66fc5261-8c16-4985-a0cc-ce26bb60253d","block_type":"box","text":"agreements allow it to recall securities out on loan at any time. BlackRock (or any other lender) does","page_number":243,"box":{"x":116,"y":382,"width":751,"height":12}},{"id":"aa81a626-148c-427d-846a-71e53f23657d","block_type":"box","text":"not retain voting rights for securities out on loan. Entitlements associated with the lent securities","page_number":243,"box":{"x":117,"y":397,"width":715,"height":12}},{"id":"fcc16c7e-dc67-43ce-9782-352be4b83f17","block_type":"box","text":"(dividends, coupons, etc.), while on loan are paid back to the lender of the security as stipulated in","page_number":243,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"c4e066f8-b790-4d83-9d69-59a7124f1877","block_type":"box","text":"industry standard legal agreements.","page_number":243,"box":{"x":117,"y":428,"width":271,"height":12}},{"id":"7470ff13-016b-4a15-87f3-2800d820c080","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote","page_number":243,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"4aeb1b16-2129-4862-89dd-e32788b9d1c9","block_type":"box","text":"shares on loan and may determine to recall them for voting, as guided by our fiduciary duty as an asset","page_number":243,"box":{"x":116,"y":475,"width":772,"height":12}},{"id":"8405dfba-0880-419f-8d9a-9f2a376e4422","block_type":"box","text":"manager to our clients in helping them achieve their investment goals. While this has occurred in a","page_number":243,"box":{"x":117,"y":490,"width":736,"height":12}},{"id":"ec3ca75f-c738-4a92-aab5-8a3d4f653d88","block_type":"box","text":"limited number of cases, the decision to recall securities on loan as part of BlackRock’s securities","page_number":243,"box":{"x":117,"y":506,"width":727,"height":12}},{"id":"a54cf78c-383a-45ce-8f05-8a5ef8902063","block_type":"box","text":"lending program in order to vote is based on an evaluation of various factors that include, but are not","page_number":243,"box":{"x":117,"y":521,"width":751,"height":12}},{"id":"f327808a-7859-41ae-a543-db3f55e29098","block_type":"box","text":"limited to, assessing potential securities lending revenue alongside the potential long-term financial","page_number":243,"box":{"x":117,"y":537,"width":739,"height":12}},{"id":"3588d77e-6595-41ab-a004-1717fc4ca64d","block_type":"box","text":"value to clients of voting those securities (based on the information available at the time of recall","page_number":243,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"2227c7b8-8143-46c6-8b25-5c045715106d","block_type":"box","text":"consideration).","page_number":243,"box":{"x":116,"y":568,"width":109,"height":12}},{"id":"490b35cd-8c85-464b-92d4-eecbe29b5e10","block_type":"box","text":"17","page_number":243,"box":{"x":227,"y":568,"width":11,"height":6}},{"id":"2b6eb56e-0150-497a-a571-d2c0558aacd6","block_type":"box","text":"BIS works with colleagues in the Securities Lending and Risk and Quantitative","page_number":243,"box":{"x":238,"y":568,"width":591,"height":12}},{"id":"abeb9829-1ebc-4cc7-a091-7980fb15d97d","block_type":"box","text":"Analysis teams to evaluate the costs and benefits to clients of recalling shares on loan.","page_number":243,"box":{"x":116,"y":583,"width":650,"height":12}},{"id":"62627bdd-557d-4218-9caa-fc188f32767e","block_type":"box","text":"In almost all instances, BlackRock anticipates that the potential long-term financial value to clients of","page_number":243,"box":{"x":117,"y":614,"width":749,"height":12}},{"id":"e28cf346-2000-4b7e-84bf-3bae7d0d16f6","block_type":"box","text":"voting shares would be less than the potential revenue the loan may provide clients. 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It is important to note that the majority of lendable assets in the","page_number":243,"box":{"x":116,"y":676,"width":755,"height":12}},{"id":"e22696cf-f476-46ca-8ef4-88c360d0626f","block_type":"box","text":"market at any given time are not out on loan.","page_number":243,"box":{"x":117,"y":692,"width":331,"height":12}},{"id":"d2c5d2e4-6fb7-426d-89b5-a31b16ca0eb4","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in","page_number":243,"box":{"x":117,"y":723,"width":725,"height":12}},{"id":"bf48cdc5-104d-45dd-8038-1f11d737c2a6","block_type":"box","text":"order to vote and may modify it as necessary.","page_number":243,"box":{"x":116,"y":738,"width":338,"height":12}},{"id":"c44cb0a8-813a-4dc7-8573-68beef3c1d15","block_type":"box","text":"17","page_number":243,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"082c6788-8c9d-4cd8-a5c8-7063cd62f513","block_type":"box","text":"Recalling securities on loan can be impacted by the timing of record dates. 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As a","page_number":251,"box":{"x":116,"y":129,"width":740,"height":12}},{"id":"c16de56e-fe48-4eab-8ad5-daedb8f94c77","block_type":"box","text":"general point, the team looks to companies that are important to the transition to a low-carbon","page_number":251,"box":{"x":116,"y":145,"width":702,"height":12}},{"id":"5c33fa5c-1d2e-4abf-bc5e-a1a7312b1224","block_type":"box","text":"economy to explain the strategy and governance frameworks that they have determined most","page_number":251,"box":{"x":116,"y":160,"width":700,"height":12}},{"id":"b821cc42-5173-46a6-8eff-639cda6da9ab","block_type":"box","text":"appropriate, which may include:","page_number":251,"box":{"x":116,"y":176,"width":241,"height":12}},{"id":"e1ae4078-d4c0-4813-926c-89179fcb11ad","block_type":"box","text":"(1) a low-carbon transition strategy to demonstrate their alignment with the ambition to limit","page_number":251,"box":{"x":150,"y":202,"width":688,"height":12}},{"id":"d8de2f5a-7cac-4e48-8da6-72a43bc8c719","block_type":"box","text":"average global temperature rise to 1.5°C above pre-industrial levels. This would typically","page_number":251,"box":{"x":184,"y":218,"width":661,"height":12}},{"id":"6db11187-b0ef-413a-8d0c-66e4d3595907","block_type":"box","text":"include a long-term strategy to achieve net-zero GHG emissions by 2050, with appropriate","page_number":251,"box":{"x":184,"y":233,"width":676,"height":12}},{"id":"656d73a8-f5fd-46ea-a874-5563764ffa97","block_type":"box","text":"near- and medium-term milestones to assess their progress.","page_number":251,"box":{"x":184,"y":249,"width":453,"height":12}},{"id":"cce1a810-838e-4fe1-95f3-1da28fa3c590","block_type":"box","text":"(2) low-carbon transition-related reporting. Standardized disclosure of sustainability-related data","page_number":251,"box":{"x":150,"y":270,"width":724,"height":12}},{"id":"a53dd264-fb86-479d-8a33-799f118a8d53","block_type":"box","text":"supports investors in making informed decisions. The International Sustainability Standards","page_number":251,"box":{"x":184,"y":285,"width":683,"height":13}},{"id":"96b05532-60a1-4efd-82b4-27faf7b4f52e","block_type":"box","text":"Board (ISSB) standards, IFRS S1 and S2, represent one such approach to standardization","page_number":251,"box":{"x":184,"y":301,"width":678,"height":12}},{"id":"98a5742e-ead0-4cbf-89be-6a9dd2b22b97","block_type":"box","text":"that the dedicated team finds useful in its analysis.","page_number":251,"box":{"x":183,"y":316,"width":374,"height":13}},{"id":"5272ab90-f7df-48b7-b800-0afa92598fe8","block_type":"box","text":"14","page_number":251,"box":{"x":559,"y":317,"width":11,"height":6}},{"id":"aa19a77b-5a99-4b68-b9b0-da09fff949ac","block_type":"box","text":",","page_number":251,"box":{"x":572,"y":325,"width":8,"height":3}},{"id":"06912be7-34d6-4b35-9abe-032f45975676","block_type":"box","text":"15","page_number":251,"box":{"x":581,"y":317,"width":11,"height":6}},{"id":"f8aadf4d-4404-4681-95df-6de54b77c15d","block_type":"box","text":"IFRS S1 addresses the general","page_number":251,"box":{"x":592,"y":316,"width":244,"height":13}},{"id":"58d6a2fd-2e10-4238-ae07-3aad7cb4c1cd","block_type":"box","text":"requirements of sustainability reporting and IFRS S2 sets out the disclosures that provide","page_number":251,"box":{"x":184,"y":332,"width":667,"height":12}},{"id":"0decd535-d987-47f2-8c57-d7c20a291df2","block_type":"box","text":"investors with decision-useful information about a company’s most significant climate- and","page_number":251,"box":{"x":184,"y":347,"width":674,"height":13}},{"id":"c15025af-818f-4fc4-8867-f7b38ce1fe08","block_type":"box","text":"low-carbon transition-related risks and opportunities. This includes receiving independent,","page_number":251,"box":{"x":184,"y":363,"width":671,"height":12}},{"id":"16d523e8-f706-4258-9c52-3ed524ac50c4","block_type":"box","text":"third-party assurances, as audit and assurance standards are developed.","page_number":251,"box":{"x":183,"y":379,"width":549,"height":12}},{"id":"7bce07f9-8996-40a3-bcff-825be24ac1ce","block_type":"box","text":"(3) scope 1 and scope 2, and most significant scope 3 GHG emissions.","page_number":251,"box":{"x":150,"y":400,"width":536,"height":12}},{"id":"fcc83408-72cb-4218-b05d-8c6f6fb78434","block_type":"box","text":"16","page_number":251,"box":{"x":689,"y":400,"width":10,"height":6}},{"id":"a77a7929-baee-4206-a5c7-8aae48e3f450","block_type":"box","text":",","page_number":251,"box":{"x":701,"y":408,"width":8,"height":3}},{"id":"082b348c-8e0d-4776-8f3f-0a281ce20778","block_type":"box","text":"17","page_number":251,"box":{"x":710,"y":400,"width":11,"height":6}},{"id":"fffd6a46-d6bf-43fe-9bd0-dede636160eb","block_type":"box","text":"In addition, the","page_number":251,"box":{"x":721,"y":400,"width":120,"height":11}},{"id":"ab080918-3fc4-46ec-8b62-028ebc046ed7","block_type":"box","text":"dedicated team looks to companies to disclose their emissions reduction targets for scope 1","page_number":251,"box":{"x":184,"y":415,"width":687,"height":12}},{"id":"1e6ae79c-ead3-462b-b949-6548f8f6f6ad","block_type":"box","text":"and 2 emissions, science-based where possible. The team welcomes disclosure of targets or","page_number":251,"box":{"x":184,"y":431,"width":695,"height":12}},{"id":"9b880e0d-dc8b-4f1c-acbf-95883e503589","block_type":"box","text":"indicative goals, where companies have set them, for scope 3 emissions reductions. Scope 3","page_number":251,"box":{"x":184,"y":446,"width":696,"height":12}},{"id":"cc67bf39-6079-416e-95ce-d1fdfe97c8f0","block_type":"box","text":"information, including how a company is working with its value chain to accelerate reductions","page_number":251,"box":{"x":184,"y":462,"width":694,"height":12}},{"id":"e18feddb-896f-45f6-b18a-2d2a2de10f2c","block_type":"box","text":"in GHG intensity, provides useful insight to investors focused on investing in the low-carbon","page_number":251,"box":{"x":184,"y":477,"width":684,"height":12}},{"id":"1b291c78-1f94-4d4c-b11c-42cb2eaff65f","block_type":"box","text":"transition and understanding the impact of their investments on their decarbonization goals.","page_number":251,"box":{"x":183,"y":493,"width":678,"height":12}},{"id":"12c366cc-a6f7-41f2-936a-e49e47b2a49e","block_type":"box","text":"18","page_number":251,"box":{"x":864,"y":493,"width":10,"height":6}},{"id":"29eceee1-b047-4a9f-8f2b-df628474008e","block_type":"box","text":"13","page_number":251,"box":{"x":144,"y":518,"width":8,"height":5}},{"id":"4ac9612f-4d5a-4e64-b98d-917c5a4a33f9","block_type":"box","text":"Given data and measurement limitations, companies may need to provide estimated GHG emissions where reporting","page_number":251,"box":{"x":170,"y":518,"width":695,"height":9}},{"id":"a11e7d5d-6686-44fc-9b39-84cc2b8df454","block_type":"box","text":"methodologies are nascent. In addition, certain disclosures related to a company’s plans for adapting their business","page_number":251,"box":{"x":170,"y":531,"width":686,"height":9}},{"id":"c210ae16-20b2-4da6-ac90-2713ae905892","block_type":"box","text":"models through the low-carbon transition may require forward-looking statements.","page_number":251,"box":{"x":170,"y":544,"width":485,"height":9}},{"id":"7302affd-30c5-4443-abab-f91820b814ee","block_type":"box","text":"14","page_number":251,"box":{"x":144,"y":557,"width":8,"height":4}},{"id":"2954d00b-4ebd-4ae9-bed3-cb16ae2bd189","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":251,"box":{"x":170,"y":556,"width":666,"height":10}},{"id":"bf467b52-d02e-4502-b217-112482f5d051","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":251,"box":{"x":171,"y":569,"width":712,"height":10}},{"id":"b0d39739-d323-41b0-8636-099934efbe5c","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":251,"box":{"x":170,"y":582,"width":649,"height":10}},{"id":"0da99932-bb97-4d42-9c2f-c45a5022708e","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":251,"box":{"x":170,"y":595,"width":674,"height":10}},{"id":"4e6289c4-1096-4f03-88fd-3940105d8b6a","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":251,"box":{"x":170,"y":608,"width":647,"height":10}},{"id":"bf1f73f7-4be4-4d0e-a299-7dfc4f7996fb","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":251,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"911e30bf-9e9d-4fe6-8dab-87e51b6ca873","block_type":"box","text":"15","page_number":251,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"95969065-2704-4f76-b9ed-e970223ff429","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":251,"box":{"x":170,"y":634,"width":694,"height":10}},{"id":"b930643a-c191-4833-af2d-c08db683630f","block_type":"box","text":"so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":251,"box":{"x":170,"y":647,"width":651,"height":10}},{"id":"370ea2f7-e75a-44b1-b79e-fe24ba95c3ea","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":251,"box":{"x":170,"y":660,"width":698,"height":9}},{"id":"9cbccc15-911e-4dd9-ae64-be64c25c005b","block_type":"box","text":"that companies highlight the metrics that are industry- or company-specific. We also recognize that companies may be","page_number":251,"box":{"x":170,"y":673,"width":703,"height":9}},{"id":"fde3bb46-5907-4bad-9408-9f27ae470e82","block_type":"box","text":"phasing in reporting over several years. We do not prescribe timelines regarding when companies should make","page_number":251,"box":{"x":170,"y":686,"width":661,"height":9}},{"id":"050c03d2-176d-4b1c-8072-16dd1863a515","block_type":"box","text":"sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of their","page_number":251,"box":{"x":170,"y":699,"width":664,"height":9}},{"id":"b01ded75-55c5-4160-b9d9-b7e47809c821","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":251,"box":{"x":170,"y":711,"width":698,"height":10}},{"id":"9a789827-56db-4294-b95b-ef4a6e56f0ac","block_type":"box","text":"voting decisions.","page_number":251,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"d62ec05e-d1f3-4a48-8abc-d0b178a1c405","block_type":"box","text":"16","page_number":251,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"252f8d85-93f4-46e7-b428-b463b378827a","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":251,"box":{"x":171,"y":737,"width":685,"height":10}},{"id":"110a5921-03b3-41c3-919e-87a159212d8d","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in December","page_number":251,"box":{"x":170,"y":750,"width":708,"height":10}},{"id":"afaa51a7-4663-4437-a722-90fe9412c30d","block_type":"box","text":"2025.","page_number":251,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"0a9589f0-8e7a-4f70-9acf-53ddb4a51f17","block_type":"box","text":"17","page_number":251,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"931d4a81-fea1-4626-8c12-091db05ffeb8","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":251,"box":{"x":171,"y":776,"width":680,"height":10}},{"id":"cb512554-e70a-4fd2-b7aa-41e2f912af1d","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":251,"box":{"x":171,"y":789,"width":706,"height":10}},{"id":"5808f78c-af38-4e17-a3d6-5ec1b570e6c9","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":251,"box":{"x":170,"y":802,"width":677,"height":10}},{"id":"60a6ca7e-ba13-4ef4-a74b-d7b5fdf62ecd","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":251,"box":{"x":170,"y":815,"width":650,"height":10}},{"id":"51f971c9-c885-4be7-b4a7-fbd3e689b7af","block_type":"box","text":"18","page_number":251,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"a18710c6-99fd-44db-b3c7-c705009c893c","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":251,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"4aa61040-5731-415a-93ff-302696677573","block_type":"box","text":"companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":251,"box":{"x":170,"y":841,"width":645,"height":9}},{"id":"1072bc39-e579-4a95-ba91-527b08c6f665","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":251,"box":{"x":170,"y":854,"width":686,"height":9}},{"id":"504f4e04-f994-4267-9097-5d25accb9386","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":251,"box":{"x":170,"y":867,"width":663,"height":9}},{"id":"6f58afda-9e27-4db5-97e9-8cd3b9aca8f7","block_type":"box","text":"material to their business models.","page_number":251,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"274525b8-ad79-4d18-95df-12a99660f8e8","block_type":"box","text":"BlackRock Investment Stewardship","page_number":251,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"f37f9fae-bbf1-4768-a223-c10d814b1520","block_type":"box","text":"Climate and Decarbonization St","page_number":251,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"ee3b1152-5989-43fa-ae7e-0dc01cb0e794","block_type":"box","text":"ewardship Guidelines |","page_number":251,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"7f3669e0-1cd9-4d39-a288-ffcb55c83f2d","block_type":"box","text":"6","page_number":251,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"f8adff5a-24c0-4b99-8b87-198352fa684f","block_type":"box","text":"NM1026U-6042785-251/259","page_number":251,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d0c3515f-39f9-424b-a1de-7ac8d663de97","block_type":"box","text":"However, the team recognizes that companies have varying ability to influence the emissions","page_number":252,"box":{"x":184,"y":87,"width":696,"height":12}},{"id":"09569bdf-de1f-4b57-be7d-9cca28c7cbad","block_type":"box","text":"across the different parts of their value chain and, therefore, it is helpful when disclosures","page_number":252,"box":{"x":184,"y":102,"width":667,"height":12}},{"id":"f71cbd7a-c645-4fd8-9d39-b63d33b3c9a4","block_type":"box","text":"explain the implications for the achievement of their decarbonization targets. For some","page_number":252,"box":{"x":184,"y":118,"width":647,"height":12}},{"id":"4523e2eb-a04f-4b5a-ae95-4d40c7fd0a0e","block_type":"box","text":"companies that play an important role in the low-carbon transition, scope 3 may represent","page_number":252,"box":{"x":184,"y":134,"width":671,"height":12}},{"id":"d52733f5-b3c1-4ed7-9e8a-31a542a88c73","block_type":"box","text":"their only significant source of GHG emissions in the value chain. While we do not believe","page_number":252,"box":{"x":183,"y":149,"width":672,"height":12}},{"id":"ccef2640-5e93-4010-a360-9743e45be0ab","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control,","page_number":252,"box":{"x":184,"y":165,"width":693,"height":12}},{"id":"50b2916f-3825-4dcb-a780-75372482023f","block_type":"box","text":"where relevant, we look for disclosures on how the company approaches the low-carbon","page_number":252,"box":{"x":183,"y":180,"width":662,"height":12}},{"id":"e3e66b0d-b99d-4aed-96bd-29d4286aae9d","block_type":"box","text":"transition in these cases. This may include plans and targets to grow businesses that","page_number":252,"box":{"x":183,"y":196,"width":636,"height":12}},{"id":"8f44ba62-92fe-4fa9-9b82-631ff439770c","block_type":"box","text":"contribute to real world decarbonization, forward-looking capital or procurement allocation","page_number":252,"box":{"x":184,"y":211,"width":670,"height":12}},{"id":"6c424947-ee9e-44a8-8cbe-6ac0610ffa28","block_type":"box","text":"plans to net-zero aligned activities or suppliers, and strategies to mitigate material transition","page_number":252,"box":{"x":184,"y":227,"width":684,"height":12}},{"id":"c7ddd053-650c-449d-92c8-7eb0bc09eb19","block_type":"box","text":"risks.","page_number":252,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"1fa5ec4e-d616-45d0-8406-d750828c68ba","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical","page_number":252,"box":{"x":150,"y":265,"width":729,"height":12}},{"id":"db63ea54-7cbe-431c-a0a0-1a1ef3ba7a9e","block_type":"box","text":"risks – such as acute risks from extreme weather events or chronic risks from long-term shifts","page_number":252,"box":{"x":184,"y":280,"width":699,"height":13}},{"id":"65d0de8b-5048-482b-a4d3-f920e1ffe7af","block_type":"box","text":"in climate patterns – and how these risks could reasonably be expected to affect the","page_number":252,"box":{"x":184,"y":296,"width":629,"height":12}},{"id":"7ca27b88-4364-4e19-aa6f-fccb1943f943","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":252,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"64eee426-8fe8-4420-8755-a20511f6e71f","block_type":"box","text":"Transition plans","page_number":252,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"42c7edf7-5a67-4e36-b3ab-97c8f909b2f4","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their","page_number":252,"box":{"x":150,"y":372,"width":698,"height":12}},{"id":"3d1465a1-379a-40f2-989c-db53f887d455","block_type":"box","text":"low-carbon transition strategies. 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In assessing the role and effectiveness of the board in this","page_number":252,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"3d7ee5b9-40c6-4310-8086-238dd0920c1f","block_type":"box","text":"regard, the dedicated team seeks to understand whether:","page_number":252,"box":{"x":117,"y":649,"width":430,"height":12}},{"id":"51c2870b-9093-49f4-bbed-31287b459780","block_type":"box","text":"• The board has clear oversight responsibilities for climate and low-carbon transition-related","page_number":252,"box":{"x":150,"y":679,"width":702,"height":12}},{"id":"0e0351a1-026b-4546-8a11-cec01838f444","block_type":"box","text":"risks and opportunities in the company’s business model. The Guidelines consider the whole","page_number":252,"box":{"x":184,"y":694,"width":687,"height":12}},{"id":"b4bc99da-d5ad-4416-93d3-923ee7073eac","block_type":"box","text":"board to have responsibility for oversight of the company’s long-term strategy, including those","page_number":252,"box":{"x":184,"y":710,"width":695,"height":12}},{"id":"663810be-b5b7-4a87-b0a5-3e8f57e601a4","block_type":"box","text":"aspects related to the transition to a low-carbon economy.","page_number":252,"box":{"x":184,"y":726,"width":429,"height":11}},{"id":"3e3a72e5-23ae-45ed-ba5f-d3c277a109a2","block_type":"box","text":"• Management has established a robust low-carbon transition framework and long-term","page_number":252,"box":{"x":150,"y":748,"width":669,"height":12}},{"id":"81c8bb78-d443-4b27-82df-959eeac9f399","block_type":"box","text":"strategy, with clear accountability for delivery by senior executives.","page_number":252,"box":{"x":184,"y":764,"width":493,"height":12}},{"id":"6aeb2aef-2640-4ab6-b1a2-caceab73dee4","block_type":"box","text":"19","page_number":252,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"9d191e04-3958-4675-ae06-44945e431885","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in December","page_number":252,"box":{"x":171,"y":789,"width":712,"height":10}},{"id":"c0552de4-e89f-4ac0-a0ae-7f28986481dd","block_type":"box","text":"2025.","page_number":252,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"5943093c-063a-4692-8d9d-7289728b88e5","block_type":"box","text":"20","page_number":252,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"4e7e71cf-6ad8-4aaa-9fe6-7cdd2d744900","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their intentions to","page_number":252,"box":{"x":171,"y":815,"width":705,"height":9}},{"id":"16648cb5-0af9-4918-a9a5-aa7788b6f1f2","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":252,"box":{"x":170,"y":828,"width":704,"height":9}},{"id":"b722a869-2548-41ec-9053-eaef658bacf9","block_type":"box","text":"International Transition Plan Network for information). 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Given forthcoming regulatory requirements in certain jurisdictions,","page_number":253,"box":{"x":184,"y":299,"width":684,"height":12}},{"id":"d0be8b29-f498-478f-b5a5-9d70e5876e85","block_type":"box","text":"some companies are voluntarily disclosing scope 3 emissions reductions targets and plans,","page_number":253,"box":{"x":184,"y":315,"width":683,"height":12}},{"id":"13b22fc2-0fc4-46b4-be71-787557fecd62","block_type":"box","text":"setting out how they are working on decarbonization with the different constituents in their","page_number":253,"box":{"x":184,"y":330,"width":670,"height":12}},{"id":"01745e8a-61c9-4cd8-b361-fe163c5558f7","block_type":"box","text":"value chain.","page_number":253,"box":{"x":183,"y":346,"width":94,"height":9}},{"id":"c09f5295-2e2c-43ba-8894-4b7925dffaf8","block_type":"box","text":"21","page_number":253,"box":{"x":278,"y":346,"width":10,"height":6}},{"id":"95082865-43b5-4b56-ade9-f668c4679a2b","block_type":"box","text":"• The company’s governance and oversight processes for managing material risks associated","page_number":253,"box":{"x":150,"y":368,"width":723,"height":12}},{"id":"9c56eab5-40c9-485b-bfe9-b8479e28ac6b","block_type":"box","text":"with corporate political activities including applicable policies and procedures where","page_number":253,"box":{"x":183,"y":383,"width":624,"height":12}},{"id":"0404fc88-0ad9-4ecb-bf28-67fdba7e21bd","block_type":"box","text":"relevant.","page_number":253,"box":{"x":184,"y":399,"width":62,"height":9}},{"id":"7d1b8d68-a07b-4102-90fd-6e1312b67938","block_type":"box","text":"22","page_number":253,"box":{"x":248,"y":399,"width":11,"height":6}},{"id":"56d4d56e-6efd-4df0-8884-43f9e1d4ce9e","block_type":"box","text":"The dedicated team looks for public policy engagement to be consistent with a","page_number":253,"box":{"x":260,"y":399,"width":592,"height":12}},{"id":"7240dd04-ee2e-4409-9ea9-90bf3dd03697","block_type":"box","text":"company’s stated strategic policy objectives, including those related to the low-carbon","page_number":253,"box":{"x":184,"y":414,"width":642,"height":12}},{"id":"0386832f-302e-4e37-87a7-37a246224405","block_type":"box","text":"transition.","page_number":253,"box":{"x":183,"y":430,"width":78,"height":9}},{"id":"77295d81-8f2b-4df6-ba4f-4c7aa980d21f","block_type":"box","text":"Voting against directors over concerns about climate risk","page_number":253,"box":{"x":118,"y":458,"width":424,"height":12}},{"id":"51de1da7-925e-4a7a-8bcd-f329f03136f8","block_type":"box","text":"In implementing these Guidelines, the dedicated team generally supports non-executive directors","page_number":253,"box":{"x":117,"y":487,"width":726,"height":12}},{"id":"ea806023-6e3e-465e-a86b-44ce68505e01","block_type":"box","text":"standing for election where, in its assessment based on company disclosures and engagement, a","page_number":253,"box":{"x":116,"y":502,"width":729,"height":13}},{"id":"72e9d6b9-1ea5-41d4-bdb4-ca9abed990b4","block_type":"box","text":"company is executing on its commitment to align with the transition to a low-carbon economy, as","page_number":253,"box":{"x":116,"y":518,"width":722,"height":12}},{"id":"ac01d867-68fb-4f46-9b23-371bf7643967","block_type":"box","text":"defined above. Where the dedicated team determines this is not the case, it may vote against the","page_number":253,"box":{"x":116,"y":533,"width":727,"height":13}},{"id":"58804f7c-2ea4-482e-bd9b-c80d41547dd3","block_type":"box","text":"election of one or more directors who the team identifies as having the most responsibility for the issue.","page_number":253,"box":{"x":116,"y":549,"width":772,"height":12}},{"id":"16c668b9-88b0-45d0-99c2-bc95136046a4","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":253,"box":{"x":116,"y":564,"width":765,"height":13}},{"id":"288ed2c2-9f6a-4b9b-88dd-4f834e40e3a1","block_type":"box","text":"climate or sustainability risk oversight responsibilities, other members of the relevant committee, the","page_number":253,"box":{"x":116,"y":580,"width":746,"height":12}},{"id":"695091b0-01a7-4445-b0a9-5efe1beabb87","block_type":"box","text":"lead independent director or the non-executive chair of the board. In certain markets, the team may","page_number":253,"box":{"x":117,"y":595,"width":741,"height":13}},{"id":"103cdad3-165e-4b3b-a72e-10b3ab31bf10","block_type":"box","text":"withhold support for the discharge of the supervisory board or equivalent and/or board reports.","page_number":253,"box":{"x":116,"y":611,"width":699,"height":12}},{"id":"8d4f4253-504a-471f-98ed-632fded4ed2d","block_type":"box","text":"23","page_number":253,"box":{"x":817,"y":611,"width":11,"height":6}},{"id":"0c4701ac-8087-40c1-8f9f-5bc6843b5d38","block_type":"box","text":"Where the dedicated team has not supported director elections over climate concerns in a prior year,","page_number":253,"box":{"x":116,"y":640,"width":754,"height":12}},{"id":"c8f67fe1-4c0d-457b-af9c-6ed674d62e25","block_type":"box","text":"and the company has not subsequently made progress towards aligning with the transition to a","page_number":253,"box":{"x":116,"y":655,"width":709,"height":12}},{"id":"1fe838b7-431f-4420-857d-6cbd15e95e72","block_type":"box","text":"low-carbon economy, the team may escalate by not supporting the re-election of additional responsible","page_number":253,"box":{"x":117,"y":671,"width":764,"height":12}},{"id":"d61b2b09-60d6-4cdc-9edf-4e8cbc9db0a5","block_type":"box","text":"directors.","page_number":253,"box":{"x":116,"y":686,"width":67,"height":10}},{"id":"3e232d38-6da0-43c7-b0a9-b23dc9ac0dee","block_type":"box","text":"24","page_number":253,"box":{"x":185,"y":686,"width":12,"height":6}},{"id":"b4018f12-ac9f-40fc-8700-ac1224393821","block_type":"box","text":"21","page_number":253,"box":{"x":143,"y":711,"width":8,"height":5}},{"id":"ea33c70c-7b61-435b-ae38-41e69d4c29c1","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":253,"box":{"x":171,"y":711,"width":685,"height":10}},{"id":"62acb10e-ed7d-441a-8a79-da85f2b3b6db","block_type":"box","text":"paper “Scope for improvement: Solving the Scope 3 conundrum.” Their research indicates that there are 2-3 material","page_number":253,"box":{"x":170,"y":724,"width":692,"height":10}},{"id":"bc26da32-133e-450d-ae5a-e7908bc0b269","block_type":"box","text":"scope 3 GHG emissions categories by sector. The research uses a definition of materiality from the GHG Protocol,","page_number":253,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"11b9928d-5196-46cf-a516-ea2ea91b3f9c","block_type":"box","text":"which “encourages companies to maintain a representative inventory of the “most significant GHG emissions, [that]","page_number":253,"box":{"x":170,"y":750,"width":682,"height":10}},{"id":"c525bc18-220a-40a6-aebb-757b7d6e22f9","block_type":"box","text":"offer the most significant GHG reduction opportunities and are most relevant to the company’s business goals.” Website","page_number":253,"box":{"x":170,"y":763,"width":712,"height":10}},{"id":"06afcee4-f641-4391-969a-25fa7e02cbc3","block_type":"box","text":"accessed in December 2025.","page_number":253,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"65c58a82-daa7-4e54-80d5-d450d7db6c5b","block_type":"box","text":"22","page_number":253,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"7255c12d-58a1-4a4b-bfaf-60d1b9684fb2","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":253,"box":{"x":170,"y":789,"width":694,"height":9}},{"id":"2df5b582-1489-4957-839f-9cb6ea2827d0","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":253,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"626d36ea-bcf9-4611-8f4b-1285f5950890","block_type":"box","text":"23","page_number":253,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"9083ea14-298d-4cfe-82d8-11593e6757ef","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":253,"box":{"x":171,"y":815,"width":661,"height":9}},{"id":"45cd736f-9c7a-4c8a-9e5b-cf0cd3dca87e","block_type":"box","text":"information on a company’s sustainability efforts, operational resilience, or financial condition, among others.","page_number":253,"box":{"x":170,"y":828,"width":643,"height":9}},{"id":"270c561f-f61e-4e16-8323-a7996646b32e","block_type":"box","text":"24","page_number":253,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"1753fe73-f49c-45c7-ad68-7440d783aae1","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally director","page_number":253,"box":{"x":170,"y":841,"width":703,"height":9}},{"id":"f3ccf039-cec5-4628-bf4c-4c3296d253a4","block_type":"box","text":"elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using the media","page_number":253,"box":{"x":170,"y":853,"width":702,"height":10}},{"id":"587ea5c4-ac9c-4830-9478-f4e3b798f08f","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":253,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"06adbc25-3339-48ed-bb14-594bcdb8a85e","block_type":"box","text":"focused approach, to engagement and voting on behalf of clients under these Guidelines.","page_number":253,"box":{"x":170,"y":879,"width":530,"height":10}},{"id":"b62f2b16-d862-4adb-8bac-750bd8528d60","block_type":"box","text":"BlackRock Investment Stewardship","page_number":253,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"22476900-247b-45a5-b215-8ad5590265e6","block_type":"box","text":"Climate and Decarbonization St","page_number":253,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"7afe7fc0-bdc4-4caa-b0e1-558ed4939f4d","block_type":"box","text":"ewardship Guidelines |","page_number":253,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"c4a494d0-d0d0-462d-b64d-316013948482","block_type":"box","text":"8","page_number":253,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"a7488037-d02b-44fb-9d19-136541a4e01d","block_type":"box","text":"NM1026U-6042785-253/259","page_number":253,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"55ff5eb5-19dc-4285-877f-73785034a1ca","block_type":"box","text":"Management proposals to approve a climate strategy or progress report","page_number":254,"box":{"x":116,"y":87,"width":582,"height":12}},{"id":"ed6c2276-6236-4809-88d2-feb661f6e2ed","block_type":"box","text":"In certain markets, company management may submit proposals – commonly referred to as “Say on","page_number":254,"box":{"x":117,"y":120,"width":749,"height":12}},{"id":"a4049e6a-ac02-48bc-83eb-51a67b6ff2b7","block_type":"box","text":"Climate” – seeking shareholder approval of their climate action plans or progress reports. The","page_number":254,"box":{"x":117,"y":136,"width":700,"height":12}},{"id":"fc9ac6ee-490f-4df4-b33e-5eb69cbb5ea9","block_type":"box","text":"Guidelines consider these proposals as a valuable governance mechanism that can enhance","page_number":254,"box":{"x":117,"y":151,"width":696,"height":12}},{"id":"96b71834-b25b-49a1-a66f-9ed534f86943","block_type":"box","text":"transparency, accountability, and investors’ understanding of a company’s climate strategy. The","page_number":254,"box":{"x":116,"y":167,"width":716,"height":12}},{"id":"d541631f-85eb-49e0-9fd8-a3499992866a","block_type":"box","text":"dedicated team generally supports management’s climate strategy proposal if, in the team’s","page_number":254,"box":{"x":116,"y":182,"width":687,"height":12}},{"id":"24b90b02-f654-43bd-8e4c-5a13766c8751","block_type":"box","text":"assessment based on these Guidelines, the strategy is aligned with the low-carbon transition. 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The team notes that assurance of","page_number":255,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"428e190f-0e49-459d-b99c-59e8a0c4238c","block_type":"box","text":"corporate disclosures related to climate risk and the transition to a low-carbon economy is still nascent.","page_number":255,"box":{"x":116,"y":335,"width":769,"height":12}},{"id":"41aeb2b9-a000-4d68-82c3-c02bc773b01f","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":255,"box":{"x":116,"y":366,"width":509,"height":12}},{"id":"aefe18ef-f6e7-4827-935d-c102d5499cdf","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on","page_number":255,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"aed7317e-b015-4908-8bdd-998a605c3070","block_type":"box","text":"climate-related factors under these Guidelines where a transaction may significantly alter a company’s","page_number":255,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"c942295b-f109-4640-a7f3-c184aa968c2b","block_type":"box","text":"climate strategy or a shareholder activist has proposed governance, strategic or operational changes","page_number":255,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"225e5c4f-714e-44e5-8a82-94fe1226d1e5","block_type":"box","text":"that may impact its climate strategy. 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Scope 3 is an optional reporting category that allows for the","page_number":256,"box":{"x":191,"y":694,"width":675,"height":12}},{"id":"1a729df1-47d2-471d-ab2d-607f852233af","block_type":"box","text":"treatment of all other indirect emissions. 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We develop standards,","page_number":256,"box":{"x":170,"y":801,"width":702,"height":10}},{"id":"8a6f7247-d89b-4c55-a642-eca9ea25604a","block_type":"box","text":"tools and guidance which allow companies to set greenhouse gas (GHG) emissions reductions targets in line with what","page_number":256,"box":{"x":170,"y":814,"width":707,"height":10}},{"id":"8af1fe8b-9144-4815-8fea-66f661f343df","block_type":"box","text":"is needed to keep global heating below catastrophic levels and reach net-zero by 2050 at latest.” Source: Science","page_number":256,"box":{"x":170,"y":827,"width":675,"height":10}},{"id":"e653bb35-7dcf-49b4-83ce-4c8fda998670","block_type":"box","text":"Based Targets initiative, “About Us.” Websites accessed in December 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