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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":"1d6f6369-3d57-4c15-90f1-de0543e4e7dd","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":"205672ad-bf67-424d-ad8b-475c50eab457","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":"3bc2f784-8f79-4472-996a-f211a52774a3","block_type":"box","text":"Independent Registered Public Accounting Firm","page_number":3,"box":{"x":151,"y":444,"width":359,"height":12}},{"id":"adb45db2-b299-4d41-adcd-eb604c30a25d","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":515,"y":444,"width":360,"height":9}},{"id":"9c28d78c-0149-49bf-a404-a8d9f100a34b","block_type":"box","text":"Investors’ Rights","page_number":3,"box":{"x":151,"y":459,"width":127,"height":12}},{"id":"d4e04e39-256f-4ace-9adf-7d1e2b45357f","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":283,"y":459,"width":592,"height":10}},{"id":"e9f0050c-5117-4c31-aa0d-dfb35fb4282b","block_type":"box","text":"Financial Statements","page_number":3,"box":{"x":117,"y":475,"width":160,"height":9}},{"id":"9012937a-a6e7-4056-a29b-dc52e0b26e77","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83","page_number":3,"box":{"x":283,"y":475,"width":592,"height":9}},{"id":"a0d3caf7-6769-4d5d-9b21-9b707ef167c3","block_type":"box","text":"PART II","page_number":3,"box":{"x":117,"y":490,"width":62,"height":10}},{"id":"12005caa-4307-4b04-8170-ed4575bcfc7d","block_type":"box","text":"Investment Risks and Considerations","page_number":3,"box":{"x":117,"y":506,"width":281,"height":9}},{"id":"28425555-d6b8-4f9d-b41a-4cfc448fe6f4","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . II-1","page_number":3,"box":{"x":399,"y":506,"width":476,"height":9}},{"id":"441d8aa6-bf57-4e6f-9e85-422dc0d155e3","block_type":"box","text":"Appendix A – Description of Bond Ratings","page_number":3,"box":{"x":116,"y":521,"width":318,"height":12}},{"id":"7a77ac83-f2a8-4bda-9989-c95eb9fcec58","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1","page_number":3,"box":{"x":435,"y":521,"width":440,"height":10}},{"id":"711b53a1-6a55-405a-866c-f994c1c8880d","block_type":"box","text":"Appendix B – Proxy Voting Policies","page_number":3,"box":{"x":116,"y":537,"width":267,"height":12}},{"id":"3a7bc6b7-a064-4878-8400-b1f6d26c5f52","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1","page_number":3,"box":{"x":390,"y":537,"width":485,"height":9}},{"id":"27655a9a-0f87-470e-9695-50da5b5b2361","block_type":"box","text":"ii","page_number":3,"box":{"x":497,"y":909,"width":5,"height":9}},{"id":"8f402724-612b-4405-a83d-153a753ca380","block_type":"box","text":"NM1026U-6049097-3/259","page_number":3,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"bf82df13-6fdc-4be9-8452-53117d09d79c","block_type":"box","text":"PART I: INFORMATION ABOUT","page_number":4,"box":{"x":119,"y":92,"width":594,"height":23}},{"id":"19cec7f9-4aff-4988-be9e-3bda966ff9fe","block_type":"box","text":"ISHARES MACRO ALPHABETA ACTIVE","page_number":4,"box":{"x":119,"y":126,"width":753,"height":22}},{"id":"9488a321-4b66-449e-b8c2-3eed46981546","block_type":"box","text":"ETF","page_number":4,"box":{"x":119,"y":159,"width":84,"height":23}},{"id":"af60f5d4-74a4-49c1-bfe8-ec58bbf59ebe","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":"62d6218e-f287-43aa-85fc-75f213c7c489","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":"23ceddf1-de99-4ac5-80ee-f563d3a7ab70","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":"93567082-33ae-4aee-883a-ed21e16a454d","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":"abf017d8-f8ff-4ef9-b39b-29c728b8588c","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":"9596c4cb-e6dc-4d0f-b821-45819a0f04e0","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":"96025273-ba67-4515-81e1-6e9ba2185fc9","block_type":"box","text":"General Description of the Fund","page_number":4,"box":{"x":118,"y":340,"width":582,"height":29}},{"id":"644b4ff9-aff0-40df-b8a5-f349235cc3f7","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":"e4189d82-c392-4c8b-b8de-6659af572a17","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":"879ca7a6-76cc-428d-b23e-74dab8db060d","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":"abaa9fc2-c164-480e-b553-b1281367f34a","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":"bea867bf-2150-4dba-bb2a-afd267bac8e7","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":"3f3b88c6-1758-4ab6-adc1-b5c4991b9821","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":"865661c1-b9bb-4cf4-a84f-a5cc2b58f490","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":"e4d67cdf-6e8a-4d86-ba0f-65bac701f9ca","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":"0d72de0c-86be-41fa-b955-d59df8ba494b","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":"3b662c92-1527-486e-89cb-54e52c04b86a","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":"ec4809c2-9a7f-48bf-95ed-31de7e488773","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":"87a4873d-2da7-4c63-a05f-8d3e0cab893f","block_type":"box","text":"the","page_number":4,"box":{"x":116,"y":578,"width":28,"height":9}},{"id":"70a2f7ce-0f92-44b3-8c74-ccbcd31bd430","block_type":"box","text":"Procedures for Creation of Creation Units","page_number":4,"box":{"x":144,"y":578,"width":313,"height":9}},{"id":"cb4590d6-b342-4a5d-a5e1-5d0f6a05f2bb","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":"2de44e24-1fe3-42cf-9092-ac80f68e5abc","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":"3f1f3948-f52b-4a44-bfa4-568956c22961","block_type":"box","text":"Redemption of Creation Units","page_number":4,"box":{"x":544,"y":593,"width":225,"height":12}},{"id":"81358e9b-e71b-4be4-a99a-0fc08cbe3238","block_type":"box","text":"section of this","page_number":4,"box":{"x":769,"y":593,"width":107,"height":10}},{"id":"8a4f54ce-45b7-495f-8f7c-88956a356cfd","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":"094732ce-6ae1-47e3-ab02-2c3515381dfc","block_type":"box","text":"thereof.","page_number":4,"box":{"x":116,"y":624,"width":61,"height":10}},{"id":"1521e085-913f-4475-aa27-c6da15c06f23","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":"4a52d955-c435-4165-b4b9-c5549131631a","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":"d3b36967-2ece-4d47-888a-1c59b3acdfbe","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":"aa83dec6-fd5d-4cac-bd9f-2e07065e14a2","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":"ffaddd3c-b9be-460f-9239-3483446fbaf7","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":"75e75944-e5a6-42c2-b67a-a11a1cb1e52b","block_type":"box","text":"purchase Deposit Securities. See the","page_number":4,"box":{"x":117,"y":733,"width":275,"height":12}},{"id":"98acd903-021e-4c97-8832-3ad5f8f33062","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":4,"box":{"x":399,"y":733,"width":320,"height":12}},{"id":"27579650-5ac2-4c22-91d3-03e3b12865a5","block_type":"box","text":"section of this SAI.","page_number":4,"box":{"x":724,"y":733,"width":138,"height":10}},{"id":"e2bc0c1e-1242-473e-ada2-2451a4da0a78","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":"de262e88-f5a4-4a45-b920-a17ba4aee41b","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":"2f274957-192c-4191-896c-0a58122643c1","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":"7d6e2840-716c-4558-9e9c-5022ea18ea88","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":"eb774aef-99ec-44be-b808-ecdb714e30c0","block_type":"box","text":"management investment companies offering redeemable securities.","page_number":4,"box":{"x":117,"y":811,"width":502,"height":12}},{"id":"dcc56964-52ec-40fa-a5d8-eee28a476bb1","block_type":"box","text":"1","page_number":4,"box":{"x":497,"y":909,"width":4,"height":9}},{"id":"90ec4377-d3b0-411d-9416-f4fd484a4e55","block_type":"box","text":"NM1026U-6049097-4/259","page_number":4,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"cf5a1f52-ecab-4124-aab0-3f5b0bd00b54","block_type":"box","text":"Exchange Listing and Trading","page_number":5,"box":{"x":119,"y":92,"width":542,"height":29}},{"id":"ae936867-07f7-4b51-a105-0d8661e684a5","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":"3c990a6c-b7fe-4291-95f0-8aa14b56a9b2","block_type":"box","text":"contained in the","page_number":5,"box":{"x":116,"y":160,"width":123,"height":9}},{"id":"6d429369-f6c6-4a0f-af91-7e1b45e28614","block_type":"box","text":"Shareholder Information","page_number":5,"box":{"x":240,"y":159,"width":179,"height":10}},{"id":"947d8008-f92e-4a54-84db-9e31d57547e3","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":"96f6396f-4c09-4f69-ad64-f870fd7f6942","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":"e29a38c4-9a22-439d-a1d5-8d8777563dab","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":"b66303e7-2ee8-4db9-8a23-bd14b4f34a72","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":"feac2d1c-4976-4edd-8dbb-86fbe4536312","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":"d5e0c6a0-41cb-43c2-97b0-53432d5eaba9","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":"363573a6-d8c5-415c-b273-37c989458ee0","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":"5efcdb09-54a3-46f1-bf41-9802177ee3ed","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":"057a7e05-45b9-4248-b496-d4d25cede886","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":"8ddc9887-5066-475e-826f-2c6fdeff0d87","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":"929e1f04-a086-49b0-b5f1-3ac8df86b062","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":"df968efd-e2e1-4f73-b750-19a232ab2366","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":"9f0190b1-5f2f-40fc-9272-41b48a221d16","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":"68ad88cc-f534-40bc-b54c-b12a8306e663","block_type":"box","text":"for the Subsidiary’s derivative positions.","page_number":11,"box":{"x":116,"y":242,"width":300,"height":12}},{"id":"bae6c0eb-9176-4a02-90b4-183e5c01c5f1","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":"4858a9d0-2250-430d-a749-1b70412d6fbc","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":"c13dd472-aa8f-4cf2-bdfb-057586d1e1f2","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":"3d73b494-f0d2-4ee5-9deb-bfc5b094666b","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":"667c7ae7-b5e2-48ba-b8f9-7fd282436b25","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":"c5cb0ed4-c971-4363-b41a-91a9905755ca","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":"cf9ac52f-2e76-4196-9e8d-dd81e718e79d","block_type":"box","text":"those services to the Fund.","page_number":11,"box":{"x":116,"y":366,"width":207,"height":10}},{"id":"2c116362-22ec-414a-af7c-8eb5860281bc","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":"949ac286-d431-4a01-a89f-6e819e6850ec","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":"627c11d2-911d-45df-82d7-d29b1ac66ddc","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":"3ed088c3-e036-4db7-a3ba-3a277441fa25","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":"d8f2ec67-79e5-4e79-a7a6-bb5a4aa3d6b5","block_type":"box","text":"SAI.","page_number":11,"box":{"x":116,"y":459,"width":36,"height":10}},{"id":"31436f14-8b23-4276-a4aa-9e56e995d899","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":"d788d354-44a7-4da8-be91-59036f7d3f29","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":"00ee68f1-f760-4a9b-8277-bfcf9140c378","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":"698b8b67-8f20-4187-ba58-74757953fa58","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":"eb19b280-6147-45e8-aaea-9d7c99acdab2","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":"5335f7bd-8b2c-4284-a62b-4cddfd38af3f","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":"ee36ee52-0b42-4d02-9f40-19ecb53e0628","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":"501d14a7-151c-4e89-93a7-641dcf916803","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":"140e7537-a2cf-40bc-8030-df8cad366c4c","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":"fc77b738-0462-48cb-b2d3-5ac72a4441d2","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":"3ccdfede-c016-4f6c-a73d-ebe37bd3cdf0","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":"9108daf4-671b-4b3a-a011-93a247e0d80e","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":"32b911cf-98fc-41ce-8dd3-87f3e1019b6c","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":"d31d35a4-9d55-464d-93c5-d8447116843d","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":"c7cfb7a9-e45b-4152-acae-2f2e68c7c952","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":"3f26c69d-d0d3-4366-8560-e982d4c820ec","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":"bb8369df-b48a-4512-ab19-6a4d149beb8f","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":"0a82f4bb-5bbd-4176-a563-a1d76ed9d669","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":"f1605352-473b-4e0f-9fbe-7b7681a99d94","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":"d9573359-f98f-4542-870d-f73f4704926c","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":"bdbecbfb-b792-41de-8682-aefec1099eac","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":"69b0a61c-40c6-4ec7-8327-b2d2948e8fbb","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":"16a9445c-23ec-440c-a589-ff183bf9f5c9","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":"0edf9633-4927-40c0-b9d5-b604837803d1","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":"b5cedd35-032b-4096-a472-63db685df7bc","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":"5770dbf7-02d6-4657-b456-8c73d6499060","block_type":"box","text":"8","page_number":11,"box":{"x":495,"y":909,"width":8,"height":9}},{"id":"d0fe6acb-b905-43eb-af3f-03c3179ac783","block_type":"box","text":"NM1026U-6049097-11/259","page_number":11,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"cd4ad2ac-467a-4b77-91bc-e38ba127d47e","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":"9c9490c5-ccce-4108-b2fb-86d6c9510bfe","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":"520bfd9f-8c40-491c-ad1e-3ac302f2d6fd","block_type":"box","text":"tax consequences in such circumstances.","page_number":12,"box":{"x":116,"y":118,"width":315,"height":12}},{"id":"2a3f009c-45c3-41cf-b7e5-d9a02f522c9a","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":"addd7b9a-14bb-4e50-86b2-d91632952d59","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":"d30cfb74-a76d-411c-9455-a16c7f86ece3","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":"d276bfae-07a7-4467-9b5f-1655348761a4","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":"c77733d5-cb6f-4f1e-ad25-0b6cd6010d55","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":"99cbca69-1df7-44c5-8101-c5b2e4258bcc","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":"3c61da20-7e7a-42d4-9036-bbd3b8d1a465","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":"90daad6a-cc2d-44e2-815a-9fd56b835cd8","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":"55065455-0889-421f-9d97-cb6a3e94e689","block_type":"box","text":"years.","page_number":12,"box":{"x":116,"y":273,"width":50,"height":9}},{"id":"8ad7b342-b7fa-41fd-9f1a-8ecd48a5977b","block_type":"box","text":"Proxy Voting Policy","page_number":12,"box":{"x":119,"y":317,"width":356,"height":28}},{"id":"51ff9fe1-8ba0-4053-adfa-a69b59e73c65","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":"22cbe68b-a95e-4f90-894b-d7b2e2604cd7","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":"6c5d1083-1fbc-44eb-9a91-485f0129e346","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":"7aa4980c-2313-4136-a3c7-5ce3b75e04f4","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":"70eb1f1c-dbf1-4341-a5cb-5faa246adc66","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":"1de4b120-2783-47f0-9769-cb8ed3c81d34","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":"ec77d43b-6b9d-4a00-a266-7158a24395d6","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":"5d6a41dc-8cd4-43ac-9810-c0420aff020d","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":"aca927a0-55d0-452d-a226-8b3c5219edbd","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":"a9fa522b-f985-43d3-bbe4-49b9be99b387","block_type":"box","text":"Stewardship Guidelines”).","page_number":12,"box":{"x":116,"y":516,"width":197,"height":12}},{"id":"5eaff5d3-ef30-470b-9dc2-a00873ac613e","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":"72bb4194-9455-4d94-8752-343f0e35c83a","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":"ef0c34bf-7788-48ba-82a6-05b54450de1c","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":"81673a8a-e68b-48f7-8bab-80a69a41e0a6","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":"f8783e1e-1344-40e8-bea4-2de62ce80c4f","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":"1fb9d005-66ff-41cc-b7d3-0a7ab8a72a3e","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":"25b28ade-6b8d-4519-80d5-4e6486caaca5","block_type":"box","text":"Stewardship Guidelines”).","page_number":12,"box":{"x":116,"y":638,"width":197,"height":12}},{"id":"be7d4ac5-9522-487e-a4f2-39ecdef8b64c","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":"30860d46-077e-4691-99e0-59869c249534","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":"3a85d234-e312-4851-855c-8d0a64b1c64c","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":"ffbb8ae4-904e-4f1d-9d18-44113a76fcfe","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":"06035f6a-8e2d-4d27-98a7-ace363878625","block_type":"box","text":"Policy, and the opposite is also true.","page_number":12,"box":{"x":117,"y":728,"width":267,"height":12}},{"id":"a0f4e2a4-8010-478d-b46f-35a6e5f00bc9","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":"8264952f-8c9f-4281-a0d8-c16562f04d2f","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":"6f3484a3-677e-478f-8112-d1b7f9687a45","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":"f6c602a6-225f-4f72-8e35-7eac2677276d","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":"eb46bd20-85cb-4614-b18b-a777f7cb644c","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":"6bbad07b-1f01-4fa4-80e4-0ba3c5debc0c","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":"2de3259b-8566-4a57-af68-fc4c9407be56","block_type":"box","text":"ownership of securities or other instruments.","page_number":14,"box":{"x":150,"y":777,"width":328,"height":12}},{"id":"09c1cb57-4156-47fa-95e2-2e1ba121682a","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":"e038d63b-cf43-4b9e-a1be-1b43fdf465d3","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":"4b2efc5c-c988-4215-8602-8becbf314dc5","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":"bf8b0db8-72a9-4cd9-92c3-3d67baae24d9","block_type":"box","text":"Company Act.","page_number":14,"box":{"x":150,"y":854,"width":110,"height":12}},{"id":"79b3fb7d-677c-4f8a-82b4-2920052cef6e","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":"ef2a9b4e-95d7-4ae4-83cf-f510625725d4","block_type":"box","text":"11","page_number":14,"box":{"x":492,"y":909,"width":14,"height":9}},{"id":"a0538ce1-eb2b-4778-ab80-32fff0dbd8ce","block_type":"box","text":"NM1026U-6049097-14/259","page_number":14,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"455564b5-61d6-4a48-83bb-e178295a4ba8","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":"c24c53b7-f5e9-43d3-95d6-cfacfb7c80bc","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":"7079ffc9-0283-4d31-903a-a1bb8fa1e477","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":"8a098482-3b3f-41c9-930d-fc8f53f583d4","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":"711dbe01-9ce4-41ea-af39-64a381adbaff","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":"cb0cdec0-6049-45f3-bb05-4c07c08e5d3c","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":"e9b63166-d27e-4985-bf40-bcf1f568ca83","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":"d6c6f53b-cbe8-4861-82ba-1aa40c7bc347","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":"8dc37c0c-5f67-41ee-abb3-c384b8fb8dc6","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":"f80e50bc-9168-4d32-904f-041bcec73ffd","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":"49717909-0cc5-4826-b4d6-47fb746ab14c","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":"aeed433c-cfa4-4df3-9dfc-ef9f589dbffd","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":"0ed9e354-589d-4d1e-914d-9e6d6004ebc3","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":"19520484-8d6a-4225-bf1d-0e5913fae5db","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":"0fcc60b4-15a7-42a9-986a-dc71cb0e68c4","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":"49958dc6-68f7-4d1d-8c65-397db047a1ff","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":"263c8007-e83f-4fb8-9158-e5d71fa6243a","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":"f74e4c4a-aa34-4cb1-a4e6-999f244fcb10","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":"ceadec7e-ddb7-4625-9b9d-70d2ca474f6d","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":"574ff73f-ed9b-4f50-95dd-1107451f6726","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":"8277ea48-fb56-428b-ab97-05f447c353bd","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":"e9fe600f-ff59-4fdc-8e0b-eff9b6d92254","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":"394584f5-9931-428b-ae0c-df7cad5cc326","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":"de9fbf05-c669-404a-912d-9e6abbe154cf","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":"9b59f3e8-739b-4772-90c7-2d654ad2c124","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":"6f6951e2-b6e7-4f85-a7ef-dab045fda5ca","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":"d86a18d3-8093-462c-afd7-36db495a2c9b","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":"b69a7950-7994-4388-8f65-2c832c55b3e7","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":"807c1977-a177-4e98-a8b0-33d00bec5222","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":"8f3904d4-3c1f-49bd-87be-4d2b98750777","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":"ff25ae85-46ed-4655-a63c-60d47a4d02ce","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":"522b58fc-f3e8-4cd8-aec4-c14ac2a452fe","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":"3872f9d6-3606-4f21-99ed-0f8e23e1a952","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":"bd21cb65-08f0-4103-bda7-07ff361eb752","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":"550fc8a2-4f46-4ca5-a8a2-dacde80fbc36","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":"b5231eaf-20c3-474d-bee3-948e8a40429b","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":"f2c48b0b-d008-467d-82e5-69b61901162b","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":"c6e1b346-e4e3-4a62-bd24-0d4f87d65331","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":"203877a0-d133-4f47-b7a6-b40d31715dd1","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":"257a9a18-1665-48a8-9e2c-3e74c09a1fda","block_type":"box","text":"policy.","page_number":15,"box":{"x":117,"y":731,"width":45,"height":12}},{"id":"93322c58-7de6-4c1f-a71a-d1e47a8b2ca0","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":"1dc94b07-afda-4c15-b919-0a56dce119d5","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":"7019c8a1-6f16-4af5-a432-0916f03212f5","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":"aa307166-586d-4f31-816d-3bb3232b5415","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":"03b91384-19b8-4e69-a734-abc1cbc9c1ef","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":"ae5dada5-e1e5-4955-a6ff-417a9c2a3453","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":"e40e6c52-afe0-40a2-bfa8-28366d35a17a","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":"0cf9653e-1829-4b32-bed0-86cd30fa9dd5","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":"84c53924-ee2d-40a7-a99f-4d044f9452ae","block_type":"box","text":"12","page_number":15,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"44e7bd2a-ff36-4538-a009-81634e2d21e3","block_type":"box","text":"NM1026U-6049097-15/259","page_number":15,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"83903613-20a5-49fa-8637-e340abb20842","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":"cf196428-c4b9-427b-bc6c-61bba8eac368","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":"e5867cd6-e809-4faf-b6d9-f47f18739b06","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":"484939ad-12e5-4a58-bf6e-a3b47fe84fc2","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":"0c4a6b80-2138-45f0-a3d3-bd828904dd6c","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":"562e241f-2cf1-4d63-8789-fc9ea6c25e84","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":"4e2a0816-4c4f-494f-9365-0ddc8fc6761b","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":"c3efc00e-dea5-45cd-9d0f-0e07317b7faa","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":"544a6ae3-1d39-4482-a608-20c2f9d4b9d2","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":"0f6260e6-5fd7-4b1d-8315-d3a58a54efb0","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":"eb5d2060-3267-4564-a263-1a08a2ba982d","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":"398f20b4-b93a-4490-a595-3b45925043bf","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":"07deaf32-0bcf-4423-8165-d77fd0ef8040","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":"2b421cb3-57f3-4e48-a7b6-20702c369767","block_type":"box","text":"Non-Fundamental Investment Policies","page_number":16,"box":{"x":117,"y":321,"width":308,"height":9}},{"id":"b541fb9a-4a6e-4519-ad2a-a116a6bf448a","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":"07b46565-5292-4136-a3e2-af3eda5b971f","block_type":"box","text":"shareholder approval, the Fund may not:","page_number":16,"box":{"x":116,"y":360,"width":308,"height":12}},{"id":"f11a354a-ec4f-4f52-a22c-5e5c4386a21d","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":"f0773af0-5a29-4e6b-a882-d3e66b697152","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":"2ae36231-dccc-4964-bb31-241b7ba60800","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":"dc0ff04d-55f6-4e3b-b6f3-368752486192","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":"cd58bbeb-c0e9-405f-abb7-5c6fe8df7a8c","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":"a47c7ff4-53b4-42dd-8220-36f3339ac155","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":"f32fd8e3-129d-41be-a628-008885a8fb54","block_type":"box","text":"b. 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or other relevant life experiences.","page_number":25,"box":{"x":116,"y":714,"width":411,"height":12}},{"id":"c1283fbe-2366-4062-824b-24389fdc4a17","block_type":"box","text":"Set forth below is a discussion of some of the experiences, qualifications and skills of each of the","page_number":25,"box":{"x":116,"y":745,"width":720,"height":12}},{"id":"397c7af0-9d15-4203-98e2-4c13b08a7f91","block_type":"box","text":"Trustees that support the conclusion that each Trustee should serve on the Board.","page_number":25,"box":{"x":116,"y":761,"width":611,"height":12}},{"id":"12c38002-0200-4091-bb76-26ae24a28a95","block_type":"box","text":"Interested Trustees","page_number":25,"box":{"x":117,"y":792,"width":153,"height":9}},{"id":"030087e8-db7e-42c2-a1c4-e6b965813ef6","block_type":"box","text":"Robert Fairbairn has more than 25 years of experience with BlackRock, Inc. and over 30 years of","page_number":25,"box":{"x":117,"y":815,"width":722,"height":12}},{"id":"415230c4-7813-497d-be3e-fc6ee6071332","block_type":"box","text":"experience in finance and asset management. In particular, Mr. Fairbairn’s positions as Vice Chairman","page_number":25,"box":{"x":116,"y":831,"width":767,"height":12}},{"id":"51b41d31-00e0-4c6e-83b2-c13329eb74a4","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":"74b8f474-808e-40e3-af7a-2ef554773b6f","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":"f031b145-10fd-4120-923f-6c3f04351e6b","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":"b98f6e40-99ce-47da-9fc1-c4c6667424a6","block_type":"box","text":"22","page_number":25,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"84c8a4a8-6a7f-4f08-a3a5-714ed8a7afd9","block_type":"box","text":"NM1026U-6049097-25/259","page_number":25,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"464abb11-74aa-485a-b7d7-0db2bff2184d","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":"0e531dff-e344-4c24-a914-39289eb7fb10","block_type":"box","text":"BlackRock’s Retail and iShares","page_number":26,"box":{"x":117,"y":102,"width":232,"height":10}},{"id":"087329c5-688b-4ff7-b318-8bd9ae44419c","block_type":"box","text":"®","page_number":26,"box":{"x":349,"y":102,"width":10,"height":7}},{"id":"371d2387-d4a3-476f-84db-04741841357d","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":"685c0c55-0989-4e6a-87d2-1c5bdcd898a5","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":"0f532650-89f9-4f4f-a14b-31d5ace8b29a","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":"fb94f925-ab45-4200-92cd-334a2150950a","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":"35efc47c-1784-4937-9943-9cf8b9daaa5f","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":"bb886acc-6379-416c-ae32-efdab6805f82","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":"43033dab-5717-476a-b1f9-6721820c0dfd","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":"72e57150-b797-4713-8a26-70af335f8b60","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":"00cd1614-d098-4509-8a9e-73c53d6590f5","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":"e14b6e6c-631b-474e-81e2-be48143fbb46","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":"7b20c465-460d-4105-82a8-3fca75703547","block_type":"box","text":"benefit of his experience with the management practices of other financial companies. Mr. Perlowski","page_number":26,"box":{"x":117,"y":304,"width":748,"height":12}},{"id":"85241a95-802c-4f89-840a-296beb767830","block_type":"box","text":"also serves as a board member for the funds in the BlackRock Fixed-Income Complex. Mr. Perlowski","page_number":26,"box":{"x":116,"y":320,"width":757,"height":12}},{"id":"f2e9307d-74bc-4cd6-bbdc-bef62a93472a","block_type":"box","text":"is a member of BlackRock’s Global Executive Committee.","page_number":26,"box":{"x":117,"y":335,"width":433,"height":10}},{"id":"396ccf0b-f39b-41bc-ad6b-78e34ebac841","block_type":"box","text":"Independent Trustees","page_number":26,"box":{"x":117,"y":366,"width":178,"height":12}},{"id":"2e6c75ff-06a9-485c-90fd-6bda88d32be9","block_type":"box","text":"Christopher Ailman has more than 30 years of experience in the financial services industry, including","page_number":26,"box":{"x":117,"y":389,"width":752,"height":12}},{"id":"84e96795-c609-4c93-9fbd-0d6913a4bfe0","block_type":"box","text":"most recently serving as Chief Investment Officer of the California State Teachers Retirement System","page_number":26,"box":{"x":117,"y":405,"width":760,"height":12}},{"id":"dedf23d9-bc25-4721-aea7-5ed26db27a48","block_type":"box","text":"(CalSTRS) from 2000 to June 2024 where he led its investment program. 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(“CCI”), a registered investment","page_number":26,"box":{"x":117,"y":606,"width":725,"height":12}},{"id":"1d1b2ea6-b6ee-42dd-bf92-7e0a2162a18a","block_type":"box","text":"adviser focused on non-profit investors, from 1997 to 2013, Chief Executive Officer of CCI from 2013 to","page_number":26,"box":{"x":116,"y":622,"width":772,"height":12}},{"id":"c8a9a9d6-5c95-4ca5-9e1a-71e9ddb7e255","block_type":"box","text":"2014 and Senior Advisor to CCI in 2015. Ms. Carter also served as director of the Pacific Pension","page_number":26,"box":{"x":116,"y":637,"width":730,"height":10}},{"id":"32c42138-1cea-45c5-91e3-e394bf9fec20","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":"b9b7f028-5dbd-44ea-9c7a-3c17e01ae769","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":"c9309369-f656-43a6-ab98-ef288848eb12","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":"36bc0ae5-b06d-4e86-849f-582768d723a2","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":"4d5e0bb0-f1ae-412d-9f87-172d1d3b08a0","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":"7fe6c555-14de-4c8a-b7c2-cb7109c2816e","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":"c248f0ce-64f1-49b6-a2e1-835656a024cd","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":"0b3d9279-4ba3-4312-8d5b-b9c85e3da933","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":"c20ebbf8-23c7-4b9f-9f17-85b08882775a","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":"3c9eea48-2d05-4557-be41-3b56b353dfbf","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":"adae263b-3b63-478b-9728-fa5d1f939f79","block_type":"box","text":"23","page_number":26,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"9e97d0f5-32f1-45f6-9908-9ddab5eb019d","block_type":"box","text":"NM1026U-6049097-26/259","page_number":26,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"bcedc210-d184-4e7c-adf2-4bdbe45b90d8","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":"295328b0-59a0-4cfb-8847-209262b44cff","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":"07ebc239-491d-48d6-9fe7-6732fa28032c","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":"84423368-ed5e-4f9d-b86e-4402e1b5d56f","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":"142429ed-e170-47c3-a39b-e7433e12b5be","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":"7ce11db3-1690-4a5e-9269-0fa1313383eb","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":"89ecef57-4007-4274-a83a-7d6ea74b425d","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":"5628ee87-3e0c-401f-b614-8a8b9a6ea83e","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":"d6312a29-ff27-4fa5-bad7-0d54dfb199e2","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":"ab3be76c-feff-42af-a9a6-66c87a72879e","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":"c232ba7e-74d4-45da-a61b-123484380915","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":"16f0f3ea-5c3e-4aef-8427-972bfdb3954c","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":"419035e9-5d86-4962-afd8-0083a23ab176","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":"8616b365-e384-45f3-941f-905e3d656f79","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":"ea86bdc9-2cf0-42b8-8fac-708d4ff374da","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":"86326353-e4b0-48b3-9254-9d99f7f92e84","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":"c1442028-f285-4bd8-b856-c5f9f861d838","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":"d77631eb-4e72-4fa4-9fa1-a5faa29598fc","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":"857d6eb0-2a58-4d81-9410-329d34cb5ad7","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":"5982202e-1ea6-407c-aac4-4f03b178d736","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":"da130b4d-bf16-460d-b0f8-fefa9822b445","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":"80521b01-34e3-4a2b-9856-a1f2afcb9974","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":"3e90468f-fcf4-470e-b253-824d762c1b95","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":"43d05827-12e0-47db-90de-7d2c945269cb","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":"028044d6-4adf-43f3-974c-58b1520fbc5a","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":"4853eb4c-96fa-4fcd-ad2b-58444b18f5c5","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":"624b341d-9e85-4b6f-a3e3-d5bbb4b89d2b","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":"af83007f-05e7-485f-a521-fe8fea83a64a","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":"0ac1d904-444e-470e-9fa9-f4dc13e5067d","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":"e8c71e7c-3f0a-41b6-b5f3-27e7f30a8cce","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":"353a510d-4feb-4c44-908a-7e3c6395ab0a","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":"b22bc3bc-ad36-4e17-a020-76bfeb335ccb","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":"6609d769-1a08-493b-be6f-df214392d0aa","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":"4922c2ea-8ad7-4d3e-81fc-59b744586191","block_type":"box","text":"articles and books on these topics.","page_number":27,"box":{"x":116,"y":645,"width":263,"height":12}},{"id":"65f47c0f-5eea-4c63-8700-0fc10a363720","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":"57c0e549-eee2-4a97-a11f-0dff2d9c56b2","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":"2b77e986-44b3-44df-9f7f-02f4bd742bbd","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":"59e0814c-4824-4531-a6ec-130efceddfc5","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":"3070082d-8ca1-463d-87e5-042be7fe9d80","block_type":"box","text":"Athena Capital Advisors LLC.","page_number":27,"box":{"x":116,"y":738,"width":218,"height":12}},{"id":"3e099240-d30d-489e-8785-6696765b1d01","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":"2b672a44-bfd3-4dd1-b182-239269cb5e29","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":"d5f27da1-9033-4464-93c1-158d21a8da33","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":"9165861a-30c4-46dc-80ed-b5a08d6f8803","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":"2bae438e-b2a4-41f5-966c-27f553cc0d2e","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":"ae37d5ec-3a3d-4398-90fc-ebc6f4fdbeb0","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":"649cbf05-5c7a-4367-a450-3496c34e5313","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":"c2cda658-231f-4eaf-98ec-d9a70fc08b2d","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":"5d9c01d6-7283-4947-b167-f2815ded9d61","block_type":"box","text":"24","page_number":27,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"bf58d11f-7cf5-49dc-ac56-02320c86f6d6","block_type":"box","text":"NM1026U-6049097-27/259","page_number":27,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"886d97a7-5756-4304-b26d-431367dfc6a3","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":"ea66b78b-2758-4130-b4cd-3dc45a7ea4f9","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":"61930a55-c1b4-4e97-8bdc-bff44833c01d","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":"07dddcd2-a5e0-42c3-af31-1037ef39b508","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":"f3f10831-4b6d-4a49-9a42-5b46352f6280","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":"a853228d-633a-4d4a-983e-53218fa089b2","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":"ed72b07f-2f73-4873-9aae-897ff5d7e89f","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":"c18a797f-e32d-4f2c-aba6-8374a925f27d","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":"51342f05-1d70-4811-b690-6823ea457e24","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":"4796bbd1-d4ef-4db4-a704-c558d64c6e56","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":"46282ba7-c337-4079-b5aa-d6b4f2cb6914","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":"cce90374-37d5-400b-b989-7d13d0cb020c","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":"2f3a7b80-6ad3-4c28-b932-12a342531553","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":"02cc527f-474a-4818-b192-90ee35127d1b","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":"6165cfe8-7f99-4a2b-ab1f-de886a8a483c","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":"989087e2-deb2-4dc1-9c17-77727bd4bead","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":"0978ecff-e161-4b8b-ae80-8966af342c0e","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":"8c9eefd4-123b-44d0-b306-a17dae84194b","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":"d3ee5616-cb09-40ba-a3d5-700509c9306b","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":"aa0083b1-dde9-4db8-8775-16e7316049f0","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":"c27cff2d-c2be-422d-a60a-142df27a2b96","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":"238e563c-67df-49d4-9ed7-dd81f5aec2a7","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":"36b42f43-4f4f-4209-8826-db69123dc767","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":"cf8c2510-b59b-4b0e-be4d-7c3172606454","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":"ff554710-e886-41c8-83ca-ba919dd29ea5","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":"9bc10f7f-8d9e-4165-88ef-e4138f5b9b8c","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":"18104e29-65ec-4e3b-931e-8382d10dcef2","block_type":"box","text":"becoming an Independent Trustee.","page_number":28,"box":{"x":117,"y":524,"width":264,"height":12}},{"id":"4d6a6b78-ee83-4a58-bc1e-041ba8ebb885","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":"753f4d79-40a8-4dfc-a541-9e52c3f35ec4","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":"a5f7b65b-7d38-4e51-9113-f8852471639e","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":"13745869-1602-4e37-9e99-36e0cd0a34b4","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":"cd798bea-5bd1-4213-8645-23190c775026","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":"35878ec3-5183-4735-9640-4ce431d982a5","block_type":"box","text":"in the applicable Commission rules.","page_number":28,"box":{"x":117,"y":634,"width":268,"height":12}},{"id":"4a56afcc-117e-4baa-9add-d1534fc2436b","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":"b852b61b-3d69-462b-891f-a32538938cee","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":"1c19fdb5-6e15-4389-9704-1aea130433b3","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":"e106d7ab-9b1b-4e03-a414-8f520bf1d6c4","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":"81ae8b88-0f94-42ee-8686-0b669480d14c","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":"ad7ddb8a-7d51-4a21-96e3-99c4f8422cfa","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":"96fdbe76-6912-4ea1-920f-d4cc049d9803","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":"9a2a4697-9fda-4cca-9e97-570b5889bbb8","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":"38190e35-6917-4bc4-aff8-b1622dcd4fd0","block_type":"box","text":"Board – Leadership Structure and Oversight Responsibilities","page_number":28,"box":{"x":117,"y":807,"width":449,"height":12}},{"id":"19bca082-729a-4321-87d9-64d322a6d363","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":"d0bb3157-e5f1-4d8e-b3a3-38bb192f3754","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":"2e3b2e2b-0bec-4efc-acee-33fd68a313de","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":"df196869-95fa-40e5-96fa-1ea06730c80b","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":"beab8213-53b6-4349-a656-587131a80c96","block_type":"box","text":"25","page_number":28,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"fc994822-5450-4dd3-a198-d09911954e0e","block_type":"box","text":"NM1026U-6049097-28/259","page_number":28,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"09b13ac4-5eed-4014-826d-ad6c823c3761","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":"825e950e-4d92-4d01-ada0-eeae03c74726","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":"ed1400a5-b445-44fb-a6d0-88cd78939d91","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":"838fb3e4-ec68-471c-ad28-5187eb184161","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":"82445b4a-1972-433b-9a24-4ed253f1b477","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":"b0abeabc-5cb1-49c5-8077-ec066fc20689","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":"c171413e-c639-4624-b165-de4b3f691172","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":"4ca637ef-1276-41e7-a8de-695fadc60097","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":"f29af83e-c26c-4bc3-afba-95db52e19480","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":"2d757fb4-91bf-408d-92ef-b6281fd9a9f6","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":"ac025941-fc00-44c8-8044-9fba248a38d9","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":"226aa0b3-f6d1-4d60-9c28-eee4ee14f409","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":"d4b10c79-605d-4eeb-8630-baa569cd9b22","block_type":"box","text":"effective oversight.","page_number":29,"box":{"x":116,"y":273,"width":145,"height":12}},{"id":"07a5ddac-92b9-420b-a1cc-775b15816534","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":"b5880475-ffd4-4d21-aca1-7926e5a6c6c4","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":"719cd3c2-2f85-4229-8be3-9929d0f30914","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":"d2b144da-9e3d-429c-94fd-f12bbc19cd77","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":"8ace38fa-3cfd-46ed-8497-596669572d46","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":"0d196daa-3aba-4cce-8fef-c4c3ae3094a0","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":"821db9bb-1d59-453f-b9a5-56a83d1ae6bd","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":"f767d061-00ff-4935-9cb9-9601e92ecdea","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":"34c62a31-451c-4d19-9c00-e43490b02401","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":"3a276947-b80a-42d8-973f-04cb5dc701c0","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":"6d028d1c-20e9-4ac9-baae-136a6409a1aa","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":"ab9db6e8-7571-4aae-9fa4-9ffd408538e7","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":"19a56410-195c-4956-bb85-8c1fe0d6afa5","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":"3cd7328b-d14f-4c92-8cb2-034b0d35d213","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":"d19dfd1e-681b-4563-b4df-e88abb77cf8d","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":"1134ef35-77d4-401b-ba9e-4289564077c2","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":"787f1aa3-b9bf-44dd-b0fb-62730d7f9ee5","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":"7116fcb7-aa11-4481-bc9a-5405888d80a9","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":"8310ffef-9a89-4f30-ae41-df2dca8dd5bd","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":"b21d0089-9e08-4ae0-a96f-9eef206ab660","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":"d7cfa62f-ba0f-45ea-a347-715c646944e5","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":"8ef0908f-7d49-4700-a4fe-eae9f3e7de2e","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":"99e562ca-e966-4e44-930d-584d9b77c789","block_type":"box","text":"Committees of the Board of Trustees.","page_number":29,"box":{"x":116,"y":676,"width":299,"height":10}},{"id":"7c29f71d-52de-439e-ab2e-b2500fa5a31e","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":"39d66343-b644-4fa6-a7a5-5686c1536911","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":"7d815d64-607b-46ea-a7b0-17dccdd3d18f","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":"e5d91937-1149-45af-9230-ad47a66a7e32","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":"f475bb86-b463-43bf-891c-a2f998989cf8","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":"cff947a7-86d9-4cf4-bf96-a3cb6833c95e","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":"09d902a0-45e2-4f16-a179-2ea8d1014eff","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":"46ae39b1-099d-4da3-b450-58dc99d12a21","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":"c657b611-9d99-48ba-8fb4-941a026b9f73","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":"f318d6ce-7772-4f0a-b7f5-931188f2382a","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":"4b952d91-7aff-48d8-8c98-eb59f08962d7","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":"818ad5a6-d3ac-41cf-bbbc-77160b3b7daf","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":"fd679151-7107-48ec-ba2b-eeb7b6b305b2","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":"ee9b3cee-c241-4151-80d2-64d2c8f3ba05","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":"7de60b17-7cfe-40b2-ad9a-2e2b2be05e0f","block_type":"box","text":"26","page_number":29,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"17cef28d-d75a-4518-8812-663c847a3d52","block_type":"box","text":"NM1026U-6049097-29/259","page_number":29,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"70be6198-0bd2-4160-a362-e76fd450d14b","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":"85b72d50-0fdc-4086-bab4-22db889d3f84","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":"7b7e4c1d-b13b-4c41-bd88-610ede85c24a","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":"58aaa280-4038-4941-a75d-4f60c1a9fb9e","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":"a5c18491-5972-456c-9770-7d5f90b03c69","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":"47f0e820-1c14-41db-a4b9-414907684fa6","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":"5458a567-fec7-4454-b133-bab1df4b85d0","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":"ac0d66fb-126c-4ab7-b0b1-e9f9bd62fe89","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":"bd991e7d-9ea3-45eb-8d08-c146103ad067","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":"c46a3190-254a-4383-a560-6e9af3daf60f","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":"f8ec751e-26f1-466f-8eb0-b290e0027fe2","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":"dfcb463b-a8c3-442f-82c2-97331e205a56","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":"9577b168-9f8d-48c1-be33-636ec39aca1a","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":"caa9206f-f3e0-4f02-b106-4aff8ec8cddf","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":"2c303a6c-adba-484d-bb73-4b45b7df3abc","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":"aae2b702-8bd3-4113-bc82-894c1707ddb5","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":"3d765038-cecd-4169-b292-65755e2e8db5","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":"05c5c195-5d21-49fe-94c3-ca21a0f547af","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":"4ec1c4d0-1910-493a-9157-83a7ff976c15","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":"988d09b6-87e4-4e29-9664-b98c39b51bed","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":"ef01487a-a3df-43eb-a52a-fb73dc682aa6","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":"26580242-5e93-4e9f-9aff-cc0478a80579","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":"4a494222-231b-434e-baa3-c012f2166372","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":"226e1f1d-2e5f-4617-abf6-98f0a31dff97","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":"a11b9444-8f31-4b83-97c2-9666f37f7696","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":"c04d75fe-ff8f-475b-b021-8ca67334f92c","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":"a6eedcdd-c8b4-435b-8752-a35317ce32a1","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":"cd94db86-6574-4df6-ba1e-cbd360c35ce5","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":"b88abd3a-4983-4b3e-b146-611fce14ffa1","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":"c9b4721d-03e6-4233-bdd8-25e6dc77442c","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":"d10f77d6-aff7-4def-bd44-b41eef9e34f5","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":"40e53bb4-2289-4f14-9414-8d798ec6d241","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":"bb29c1cc-a78e-43c4-9357-e13b57235526","block_type":"box","text":"met eleven times.","page_number":30,"box":{"x":117,"y":599,"width":135,"height":9}},{"id":"45f85105-193c-4e2a-8d52-934f1188498a","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":"a786fdc8-b38a-4113-9e2a-853114cf5cd7","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":"12ee140a-9530-4bc2-8e2a-f01219890733","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":"6ad939b9-00a6-4711-845a-6d3f10554f39","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":"a941a241-7666-4379-9129-28e7e34d0b3e","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":"3a80411d-3374-4001-a1a2-ad49853aac8f","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":"c3e1ece7-b3d7-4b85-9d87-9d7525e69de5","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":"9752eb95-0b51-4c74-85a8-3b304ccd73bc","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":"8c6194c8-1e08-4adf-82d6-76f48dca121c","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":"88d34b02-c8e0-482e-82e4-8f73476338fe","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":"b94daebd-8465-4437-9a72-4b09e9e3a06b","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":"3a1027f9-736f-4826-8b05-74e4a7d79924","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":"4bcda722-600c-4704-8ae0-d47550395b58","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":"c893ba7c-f8b9-4c60-a702-e0d936429f4f","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":"dc48533c-7736-4594-bd85-389a682553c2","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":"cd10cbd0-cdfc-468f-8176-a639a355fc8c","block_type":"box","text":"Compliance Committee met four times.","page_number":30,"box":{"x":117,"y":862,"width":294,"height":12}},{"id":"e0c14727-4b9e-4c6f-8fab-130e1bbe9053","block_type":"box","text":"27","page_number":30,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"025c9cfc-8f3e-496e-a5fc-f4c3c7a1035b","block_type":"box","text":"NM1026U-6049097-30/259","page_number":30,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"323ff12b-982b-4ff1-abc6-236b1ab5298d","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":"a8f9664b-26cd-4380-a5e9-d1b4208f5f9f","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":"193220c0-1391-45ae-abb0-23567cdd1f10","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":"9ef14f2d-ac8f-46a4-a84d-63b467e97716","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":"d7fe6705-cc71-429e-ace7-6e12e78d7f98","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":"e271ac74-e399-46b8-bd49-4846b501b7b0","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":"36f706de-2013-4aef-90a9-0fe108c58735","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":"a1d21590-6e2c-4ad3-bced-411a31894140","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":"e50bfafa-7345-4035-b619-944149ac4d59","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":"f7404f39-8c48-4077-af59-e5d743dc651e","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":"fab97c55-242a-4c04-b50c-03c6f11fa334","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":"ef9dd5b6-734a-48c1-bbee-2554522f1556","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":"2cb1aeaa-7db8-48df-8fa9-936c755b8ad9","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":"9211745f-c80e-4651-bba8-8bb20787592b","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":"c6e520ff-d236-460f-b1f8-5f23c42e5874","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":"d2b0d4bd-61b2-4fe8-a100-4eb635a6df4d","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":"fd3a1abb-451f-4f52-a4fc-79c14730807a","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":"71124497-ae29-4836-97e8-10d31d5cb0ec","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":"2cc84fa2-fada-4f3c-9fe7-0ade72dc1560","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":"15075309-89da-4cd9-b6ac-a4521a56d603","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":"db2aa236-9989-43c0-897a-8ae7018d1359","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":"a39de685-1323-4758-964f-503f6c1f4254","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":"caa15256-85c0-4461-8009-d428b3bf2ee5","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":"2a08c25e-177c-4225-9de7-edcda4e3bb09","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":"22109fe2-fd38-4b42-8cd5-58da53a70763","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":"ac031ea2-14a2-4d27-b2b4-f788f1d1bf18","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":"02f74b3b-b4fa-4a97-8968-be1c397c6dcc","block_type":"box","text":"Topics Committee did not meet.","page_number":31,"box":{"x":116,"y":506,"width":242,"height":12}},{"id":"36fe690b-e492-4add-bee2-dad71af420bf","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":"08882a40-bfc5-4d59-b40a-5425459ce106","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":"22694c34-7f5f-45d9-b9c0-2a692d2826f0","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":"f4edb842-e05b-4053-bb37-f31610f9877a","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":"7401816c-a353-466d-bcbf-f691e81405a3","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":"6e8bdb80-d51d-4224-9e03-5a72aad0d9c9","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":"e92b6ba3-379a-4513-a849-9f8f9ebf2530","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":"38d3d0ff-ff87-4903-bd9b-630f69b317c9","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":"6dffbfb0-4abe-4804-be18-8060b4eda376","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":"cd0bc21a-c0a0-4ec2-b739-1206374e32ea","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":"96d0bc5a-ae3c-404e-9910-372c5fccb24d","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":"da5eb65b-224a-4b3f-964b-22ccf8f2e2fa","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":"bff5ecf2-9adc-4316-9d30-80400ba4f2b5","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":"abb63820-f81c-4582-ab97-f0ec20fa77d4","block_type":"box","text":"their duties as Trustees.","page_number":31,"box":{"x":116,"y":738,"width":178,"height":10}},{"id":"f8b75f47-1bfb-4cb7-8877-34ad0be2b978","block_type":"box","text":"28","page_number":31,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4f786f1a-2fdc-4a38-b37c-e02f67a9a0ca","block_type":"box","text":"NM1026U-6049097-31/259","page_number":31,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6b38c435-71fc-40b9-9769-9c4f411084b2","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":"4eba0019-712d-4c35-a147-3977dfc53fb3","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":"dce8c3b8-5edf-4dba-9c56-88985d78766b","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":"b48c8504-270f-443d-a079-5540f3fdbcee","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":"6c13fac6-c9dd-4e99-9609-eab9f8341f3a","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":"d505e980-d654-4c7a-842d-c747459e4f57","block_type":"box","text":"interest but not a direct ownership interest.","page_number":32,"box":{"x":117,"y":165,"width":321,"height":11}},{"id":"914d3323-7df3-4a40-b6b7-0773576224b8","block_type":"box","text":"Name","page_number":32,"box":{"x":261,"y":223,"width":35,"height":8}},{"id":"d7732dc2-a198-4dbc-a750-b8c0b8810738","block_type":"box","text":"Aggregate Dollar","page_number":32,"box":{"x":667,"y":192,"width":108,"height":10}},{"id":"5d0ccddd-3cc7-468f-a175-26426d3299d6","block_type":"box","text":"Range of Equity","page_number":32,"box":{"x":671,"y":203,"width":101,"height":9}},{"id":"ec630817-8938-43ff-bd3d-3b6dfbe6f84e","block_type":"box","text":"Securities in","page_number":32,"box":{"x":681,"y":213,"width":79,"height":8}},{"id":"70f68406-202c-4f04-b6b4-2f56bb49b87b","block_type":"box","text":"Supervised Funds","page_number":32,"box":{"x":663,"y":223,"width":116,"height":10}},{"id":"cb2a4165-227a-41b3-8ccd-0a6273dabd8c","block_type":"box","text":"Interested Trustees","page_number":32,"box":{"x":117,"y":242,"width":148,"height":10}},{"id":"41f0715c-84d0-483b-86f6-50c3b9b9611f","block_type":"box","text":"Robert Fairbairn Over $100,000","page_number":32,"box":{"x":117,"y":257,"width":664,"height":12}},{"id":"a39265f6-d66e-4a5b-bba1-11bb9e1141e7","block_type":"box","text":"John M. Perlowski Over $100,000","page_number":32,"box":{"x":116,"y":272,"width":665,"height":12}},{"id":"532e5a42-1a55-4a30-bf5a-f97aff6baa74","block_type":"box","text":"Independent Trustees","page_number":32,"box":{"x":117,"y":296,"width":162,"height":12}},{"id":"0b7a9304-0bb4-4586-88ad-32cba20093c5","block_type":"box","text":"Christopher J. Ailman Over $100,000","page_number":32,"box":{"x":117,"y":311,"width":664,"height":13}},{"id":"5d2be1b0-f35e-4a33-a103-8fda764532da","block_type":"box","text":"Susan J. Carter Over $100,000","page_number":32,"box":{"x":116,"y":327,"width":665,"height":12}},{"id":"2b66c8b4-153f-4871-b8c6-e10cacc28e9b","block_type":"box","text":"Collette Chilton Over $100,000","page_number":32,"box":{"x":117,"y":342,"width":664,"height":12}},{"id":"14ae46c0-3991-4209-8b04-74cd467a2b41","block_type":"box","text":"Neil A. Cotty Over $100,000","page_number":32,"box":{"x":117,"y":358,"width":664,"height":12}},{"id":"67150b07-f48b-43ac-aa9b-e9c2d275c6da","block_type":"box","text":"Jeffrey Jarczyk* None","page_number":32,"box":{"x":116,"y":374,"width":630,"height":12}},{"id":"47052079-b84d-418b-8613-3a63ebc5ada5","block_type":"box","text":"Henry R. Keizer Over $100,000","page_number":32,"box":{"x":117,"y":389,"width":664,"height":12}},{"id":"ea72346c-1a44-43b5-b71d-116664aca498","block_type":"box","text":"Cynthia A. Montgomery Over $100,000","page_number":32,"box":{"x":117,"y":404,"width":664,"height":13}},{"id":"cf7b4228-3b73-449d-948e-53833867ab00","block_type":"box","text":"Donald C. Opatrny Over $100,000","page_number":32,"box":{"x":117,"y":420,"width":664,"height":12}},{"id":"1dd6bd8a-c1ce-4d4d-88e9-7d90f2695e0f","block_type":"box","text":"Lori Richards None","page_number":32,"box":{"x":117,"y":436,"width":629,"height":9}},{"id":"5707bc6b-7450-46f5-857c-c267056f1296","block_type":"box","text":"Mark Stalnecker Over $100,000","page_number":32,"box":{"x":117,"y":451,"width":664,"height":12}},{"id":"d0f033d0-67c1-4fb3-b4fa-218031eb0b95","block_type":"box","text":"Marc D. Stern* None","page_number":32,"box":{"x":117,"y":467,"width":629,"height":9}},{"id":"4da156d9-bb5d-4459-a376-59f68360d95f","block_type":"box","text":"Kenneth L. Urish Over $100,000","page_number":32,"box":{"x":117,"y":482,"width":664,"height":12}},{"id":"ed8b4dc4-56af-47e3-a5ec-96f42204cdec","block_type":"box","text":"Claire A. Walton Over $100,000","page_number":32,"box":{"x":117,"y":497,"width":664,"height":12}},{"id":"ff660d59-ae92-4dfb-b914-5c17afc58b45","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":"623a2443-596c-4098-a174-7fb0c1ce7edf","block_type":"box","text":"Independent Trustees.","page_number":32,"box":{"x":171,"y":561,"width":132,"height":9}},{"id":"b65b0257-194c-4660-9775-2fec318d5f77","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":"c4635482-f0d9-403c-b299-467d43fa165f","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":"45ad1873-3797-4a9e-b4c6-396976026f64","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":"2af0322b-905a-447b-bcbf-fccea7f2bf5e","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":"558b6bfb-f9d5-4cf8-9fd6-2b53fe4c5bda","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":"1d89947d-d07f-4c25-9c74-1b9f23ba185e","block_type":"box","text":"such entities.","page_number":32,"box":{"x":116,"y":652,"width":103,"height":9}},{"id":"3ad571cf-e963-4ff6-a7b3-3a24df2a8e15","block_type":"box","text":"Remuneration of Trustees.","page_number":32,"box":{"x":117,"y":683,"width":211,"height":9}},{"id":"5bd0f59d-e184-418c-987a-3d995babd920","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":"6e3aec92-983b-4217-84cf-f9034c7a424f","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":"450d4b87-be12-4963-bbe2-ad718aa69c70","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":"43fa7ae7-b3a3-41df-a502-8884e2cd78d4","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":"9215bcac-27ae-4b06-bd42-06407037bb1c","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":"ca96bed9-104f-4ce8-b58e-ad3729a34602","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":"d1551df3-96a4-4de4-a6c7-0d72484f0fbb","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":"1c4c9fbd-b270-4bf7-b121-07ddb5c940e7","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":"cef9d46b-2f96-4a29-906a-834e947ae6a7","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":"990eaf03-a1a4-4f69-b029-5d5c2939b0da","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":"ea60f7ac-93ed-4ce0-abe6-37a859b72029","block_type":"box","text":"annual retainer of $150,000.","page_number":32,"box":{"x":116,"y":837,"width":215,"height":12}},{"id":"8ca279a2-8542-42ca-8e8f-61d9ec49ee12","block_type":"box","text":"29","page_number":32,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"51d673f8-9ba3-48fc-b2cf-ad93833bb361","block_type":"box","text":"NM1026U-6049097-32/259","page_number":32,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d96bc843-b2f9-4d37-90bf-e0a52693c887","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":"7f5844c3-ceb9-44e6-91f1-5e399b79c7b0","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":"35a70c9d-7771-4595-83b4-bb0c07db11ee","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":"412ba4c7-cd72-4744-8d1c-f3b889ba78d6","block_type":"box","text":"Name","page_number":33,"box":{"x":284,"y":187,"width":35,"height":8}},{"id":"628afab2-3553-4090-82c6-2653fc830c8a","block_type":"box","text":"Estimated","page_number":33,"box":{"x":520,"y":167,"width":62,"height":7}},{"id":"9fc2bc55-31a9-453c-9d91-31ab5996179d","block_type":"box","text":"Compensation","page_number":33,"box":{"x":505,"y":177,"width":91,"height":9}},{"id":"e89218ff-38cc-421e-86db-fd51eb789065","block_type":"box","text":"from the Fund","page_number":33,"box":{"x":506,"y":187,"width":89,"height":8}},{"id":"0ad945b2-af04-4d32-b18d-8cf656d06487","block_type":"box","text":"Estimated","page_number":33,"box":{"x":646,"y":156,"width":62,"height":8}},{"id":"b366ddd8-bd28-487c-a052-3ae4256eff80","block_type":"box","text":"Annual","page_number":33,"box":{"x":654,"y":167,"width":45,"height":7}},{"id":"04b172dc-fa3a-4682-adfa-9034301060f9","block_type":"box","text":"Benefits Upon","page_number":33,"box":{"x":632,"y":177,"width":89,"height":9}},{"id":"c1149c66-6adb-4df8-8728-c568d382eda8","block_type":"box","text":"Retirement","page_number":33,"box":{"x":643,"y":187,"width":69,"height":8}},{"id":"b525b43c-83cf-448b-81a6-6842393b57f5","block_type":"box","text":"Aggregate","page_number":33,"box":{"x":786,"y":146,"width":66,"height":10}},{"id":"a14d1cea-fcc6-48b0-b11d-8496999a23f1","block_type":"box","text":"Compensation from","page_number":33,"box":{"x":757,"y":156,"width":126,"height":10}},{"id":"eb3696f0-cc17-4a7f-b0db-01372c397489","block_type":"box","text":"the Fund and","page_number":33,"box":{"x":778,"y":167,"width":83,"height":7}},{"id":"8a5064ac-f3c0-4197-aa89-34d4765d7a25","block_type":"box","text":"Other BlackRock","page_number":33,"box":{"x":764,"y":177,"width":112,"height":7}},{"id":"96d5f9ba-a0cd-4695-b318-435c52d38727","block_type":"box","text":"Advised Funds","page_number":33,"box":{"x":769,"y":187,"width":96,"height":8}},{"id":"a93bdda6-af83-49a6-989b-3be94b2297b9","block_type":"box","text":"1","page_number":33,"box":{"x":866,"y":187,"width":3,"height":5}},{"id":"ab2be734-1884-468b-a566-21625e721146","block_type":"box","text":"Interested Trustees","page_number":33,"box":{"x":117,"y":206,"width":144,"height":10}},{"id":"957b4c1a-4d6d-42b2-8c3e-d1368d1407d2","block_type":"box","text":"Robert Fairbairn None None None","page_number":33,"box":{"x":117,"y":222,"width":728,"height":9}},{"id":"ec990695-db44-4f23-aaaa-be5b24d3eca8","block_type":"box","text":"John M. Perlowski None None None","page_number":33,"box":{"x":116,"y":237,"width":729,"height":10}},{"id":"c96575e7-ab7a-4efc-aac1-0ebad19f7a97","block_type":"box","text":"Independent Trustees","page_number":33,"box":{"x":117,"y":260,"width":162,"height":12}},{"id":"c4f944f5-9240-429c-bef8-0ed77ee15901","block_type":"box","text":"Christopher J. Ailman $633 None $445,000","page_number":33,"box":{"x":117,"y":275,"width":743,"height":13}},{"id":"b6b157a2-7020-4158-8b50-49495fa8f4ea","block_type":"box","text":"Susan J. Carter $633 None $445,000","page_number":33,"box":{"x":116,"y":291,"width":744,"height":11}},{"id":"a53802f3-568c-457c-80d3-9ebccf69f5f9","block_type":"box","text":"Collette Chilton $633 None $445,000","page_number":33,"box":{"x":117,"y":306,"width":743,"height":12}},{"id":"81b87eae-57fa-412c-b332-5e858ea4784a","block_type":"box","text":"Neil A. Cotty $634 None $467,500","page_number":33,"box":{"x":117,"y":322,"width":743,"height":12}},{"id":"e01416e8-8800-416a-8bba-24a2b238c0d4","block_type":"box","text":"Jeffrey Jarczyk","page_number":33,"box":{"x":116,"y":338,"width":112,"height":12}},{"id":"bebeec32-4718-4a97-a890-bd1687cdef47","block_type":"box","text":"2","page_number":33,"box":{"x":228,"y":338,"width":6,"height":6}},{"id":"3fddf6da-348f-404f-801a-1dfb145a0a5a","block_type":"box","text":"$633 None None","page_number":33,"box":{"x":234,"y":337,"width":611,"height":11}},{"id":"873ef5ce-5350-48cd-9c2e-fe7cea088c7e","block_type":"box","text":"Henry R. Keizer","page_number":33,"box":{"x":117,"y":353,"width":118,"height":12}},{"id":"4cb1bac6-9f0e-4032-ba1f-739b8f83d1af","block_type":"box","text":"3","page_number":33,"box":{"x":235,"y":353,"width":5,"height":7}},{"id":"ed00989f-692c-48bf-a9ec-d53f935534c9","block_type":"box","text":"$636 None $490,000","page_number":33,"box":{"x":240,"y":353,"width":620,"height":11}},{"id":"1147f20f-ddee-41d9-82f9-6a6239b001c0","block_type":"box","text":"Cynthia A. Montgomery","page_number":33,"box":{"x":117,"y":369,"width":174,"height":12}},{"id":"de77614e-e011-4703-ba42-7748a5f7b51c","block_type":"box","text":"4","page_number":33,"box":{"x":292,"y":369,"width":5,"height":6}},{"id":"42f99103-e5ab-4eaf-bcaa-664aa285ada0","block_type":"box","text":"$635 None $490,000","page_number":33,"box":{"x":298,"y":368,"width":562,"height":12}},{"id":"9e7c32ed-b1c4-463a-9299-c1663a1b611e","block_type":"box","text":"Donald C. 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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":"81df4acc-2811-4aa9-b839-749e72efc6d2","block_type":"box","text":"31","page_number":34,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"583fa53d-14bc-4b56-98c5-04e3ee88b8db","block_type":"box","text":"NM1026U-6049097-34/259","page_number":34,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"bbc7190b-ce98-408f-af46-e5e68bf2ce25","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":"70e8628b-879b-4511-9368-742315be2b47","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":"9ae4de47-2dd6-4c8c-b439-41d9f118d3ac","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":"32bf420f-ad13-4e74-aeb9-e324abaff028","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":"31be4c44-2528-4eaf-b7d3-231834611ecc","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":"c4cb68b8-39b5-49b3-95fb-0c31dbf6e018","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":"2a49c307-3777-4bc2-a089-2622abff015c","block_type":"box","text":"actions itself on behalf of the Fund.","page_number":35,"box":{"x":116,"y":180,"width":265,"height":10}},{"id":"4c7f7626-f0c2-4d93-a18d-847b16947aa8","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":"6af50326-683b-41e1-97dc-1c9f1cf822b0","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":"c4342cc5-3fd0-4647-a87c-6b0f577da660","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":"f462d039-d675-43d2-96ad-e4d7e3ebbcb8","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":"30e56a6e-61ba-4b98-9a5f-e9f1f950e10a","block_type":"box","text":"personnel, including portfolio managers.","page_number":35,"box":{"x":117,"y":273,"width":302,"height":12}},{"id":"46d027d3-120f-4ccc-b0c2-79c503b2ee65","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":"40b35709-cfc7-43b2-b679-60a3b713b3ee","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":"d0e53cfd-30af-44fd-a1d1-6fac1facca89","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":"24b1796e-bc08-484e-910d-1e1f4be59cf2","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":"9f18f1ca-c817-4afe-b090-e56193ef9d65","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":"6b2aa4b2-0126-4121-856e-6a7054afe822","block_type":"box","text":"to the Fund.","page_number":35,"box":{"x":116,"y":382,"width":94,"height":9}},{"id":"dd43621d-8d49-492a-abda-55f631d2f663","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":"d1fb184d-14a1-4b25-ab22-f282733f222d","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":"1fe01261-bcc6-4e13-b740-1a21abea56d1","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":"ca98c60a-7f49-4e4d-89ae-335bc47cf542","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":"ed7d116e-8806-4b3b-b5eb-d281358a75e8","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":"32666313-9c21-4c46-a05a-b3302625532d","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":"b79ee461-740d-489e-a347-89a12c797a6f","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":"c72cbf0c-5090-40d4-b4df-27c138a5a6e6","block_type":"box","text":"responsibilities to the parties in such transactions.","page_number":35,"box":{"x":117,"y":521,"width":374,"height":12}},{"id":"39dd3238-d6e5-4083-81b1-aedaae9afe13","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":"931c7bc6-b215-4696-898a-056497a38d90","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":"1071b46c-7b03-49f6-b270-68a85d9c7117","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":"210c833e-cff2-4d86-ac54-550510048817","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":"fde1ada4-12b9-4631-b858-7bb7340552b3","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":"542e4a99-4721-4bbb-9eb7-5f08653250d4","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":"9b3d8f88-6bb4-42cc-b254-4368ed667507","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":"db72c0b5-34e9-47c6-98a3-38bb5318f0d2","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":"7061794d-6b33-42e0-b44b-b89c0e6731c6","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":"a0f25790-6228-4221-81a2-f9504b96bfd7","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":"adaeba85-4a36-40ee-99a9-4d1c47b85c20","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":"4bc94939-b22e-4bf8-8897-6101d7103913","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":"e517568f-64db-4c1b-aa47-f03116ded4dc","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":"a5ba165e-16ab-48d5-b0a3-a4896e2e16b9","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":"3d43a0a9-b54d-4576-9beb-2541f9eaebe5","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":"1324d62e-d883-4d26-8c5a-e7b7bef870da","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":"54b5542e-c34a-4d99-981f-0ee1d615aa23","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":"0d6d2e6a-0528-4f4b-a130-f4ca3b59aa92","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":"5f761102-53b1-4a72-b16d-632f04af5627","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":"a3d87a53-8f27-4e82-95d2-89905b622348","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":"8532e37a-c6b6-46ed-92e8-6de6eb63498b","block_type":"box","text":"32","page_number":35,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"30ffd18d-c469-405b-94da-db7cec3497f4","block_type":"box","text":"NM1026U-6049097-35/259","page_number":35,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ebd49e30-3aed-4ec9-8a3f-8444992f50d8","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":"9b4403ad-2118-47a9-9d38-d2e647140f67","block_type":"box","text":"individual issuers, by affiliated foreign investors.","page_number":36,"box":{"x":117,"y":102,"width":359,"height":13}},{"id":"52cb9bfb-bea3-4d3b-ba2b-2b95792d2559","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":"0eebee2e-77e4-4298-a1d7-60ef1c87ccdd","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":"e4aeaf08-7f9e-4395-b000-1c4d4153bca1","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":"4c6f280f-2e35-439f-8346-4becad6ddfcd","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":"6b2069f9-e9d1-4568-8860-bf3fd31e7d58","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":"fb08c42c-cfa4-410e-a47e-5b6061521e05","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":"bbf41370-9f44-44be-b840-0567754394ec","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":"713bfb13-5bda-4feb-acfa-e19eb1d42286","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":"dc2a6691-677b-4a4f-a998-db9e61c0503a","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":"c7c854c2-eb66-40e5-bbc0-a601d42a0c49","block_type":"box","text":"managing the Fund.","page_number":36,"box":{"x":117,"y":273,"width":153,"height":12}},{"id":"1177b610-304b-4584-8dbc-bc2f3023ebb5","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":"fb0a3593-80f5-4ffc-b464-0264fb814d23","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":"686e069e-7f82-4069-80e1-30ad35781dea","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":"748d61dd-eaf2-4610-a914-5310141f00cb","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":"188f3649-81af-4c65-98d8-cda2f3c232df","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":"f4d74270-d215-4e73-b6f3-777eb1f53601","block_type":"box","text":"and by its advisory clients.","page_number":36,"box":{"x":116,"y":382,"width":201,"height":12}},{"id":"4262e9b7-b27f-44fc-82b5-dd691347b03e","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":"3dbf23e5-9104-47ec-8e34-9acc0a29bc59","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":"878b3247-65a6-4183-976c-aded9a8ccefe","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":"a5d90070-02d7-40bb-b344-259efb329b97","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":"39b1b557-4cdb-49c6-95b9-112a9e808a0e","block_type":"box","text":"investors in the Fund should be aware.","page_number":36,"box":{"x":117,"y":475,"width":292,"height":9}},{"id":"7b7e9f22-afa3-4e6d-990f-67bec8e35eca","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":"66b41cff-aeb1-4f06-8959-c6798ee88a9a","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":"4bfd2a19-9b51-45f1-97e5-78aa4de9b8b7","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":"04f60a0a-c68b-4586-acb7-cf31ab127a72","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":"172bcba3-36a6-4c5b-b022-56669b09be47","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":"7b1d9f23-4050-48c7-a2c4-76e1e1efd777","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":"777e8050-4137-48a8-8aac-4632ded00802","block_type":"box","text":"of BlackRock.","page_number":36,"box":{"x":116,"y":599,"width":107,"height":9}},{"id":"032278e7-ee88-4f47-8452-67e84b678e76","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":"3fcf095a-956f-4ecb-9cca-7f34007c9d32","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":"36f5a357-6827-47aa-b1ba-91ae063545d1","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":"4959bf62-8737-43f0-9966-51504ea67865","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":"ff5e8c4a-00ed-49f8-bfb9-8aefc12d31a8","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":"146c6b32-94fb-447e-915e-d4585409e983","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":"e6e5fcbe-4fc3-4f03-9bc5-fcae22aed2a3","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":"c68d1656-c728-4e46-bcb2-1f3f752c7c06","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":"69358f4a-2fd2-45ce-b3ea-8d2df718adf8","block_type":"box","text":"management for BlackRock.","page_number":36,"box":{"x":117,"y":754,"width":209,"height":12}},{"id":"e46820b8-eba5-4a46-8e61-765c21739c54","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":"bd3057ef-aa31-4849-a699-db2bec4be914","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":"7109ac6f-7173-4949-9a30-94c99f4dccd5","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":"63891285-c504-4182-96fd-0acf8c1a4287","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":"f5f1cd6c-7345-4ef4-937f-820eae3c1ff7","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":"a93d4e4f-4fe2-421a-acb2-39046d67649b","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":"46c82b29-1a27-4c88-aec2-57d053ca486d","block_type":"box","text":"33","page_number":36,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"738808dc-7b4f-49ff-8ce7-4c76f67344d7","block_type":"box","text":"NM1026U-6049097-36/259","page_number":36,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6e2042e1-ca0b-4c6d-b705-63b45cdb8431","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":"439af6d1-c96e-4841-b9d1-eb7067efa97d","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":"a055845f-3fb7-440e-b78c-8c525bf8d6ea","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":"bb186380-ac17-46fc-b602-35e77217a8a3","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":"7240bc40-efbc-4a04-82e7-12fe2ea827a6","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":"21a12faf-1365-4522-976e-3c70fd4410cf","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":"9976cbf6-362d-4a11-8b6b-9c529eabfc12","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":"c415c8be-5cc6-4576-bbfe-ff0db49bc483","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":"4777585c-507c-4098-9381-a7b03f1fd61b","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":"3ad8ffb2-77e7-4a99-8092-947778ed5f15","block_type":"box","text":"BlackRock.","page_number":37,"box":{"x":117,"y":227,"width":88,"height":9}},{"id":"7a27680e-e406-48cb-ab70-620c405fc807","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":"85a525a2-fa99-4504-8ba3-9c6dff247085","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":"e1ab6263-18dd-4274-abf0-59a42a4cacfd","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":"e632ecf8-1f60-4514-83e8-2f9b05f20368","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":"c48cc77c-c92a-4441-ba4c-8421cd6bf15c","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":"16865c10-9e2f-4cec-9e45-5142907cce26","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":"f9a85794-65da-4ef7-9ec7-58f9b8071003","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":"1d182e29-9165-4062-8882-5b60f8a4b6a1","block_type":"box","text":"effect on the Fund.","page_number":37,"box":{"x":116,"y":376,"width":145,"height":10}},{"id":"0aa21662-e8cf-4362-946d-0e26b95a15f2","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":"8f56a4c7-450e-4a2e-9998-7ec55c776593","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":"75673710-52ee-41f4-9b96-3818635a359f","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":"d80dc38d-e74e-4491-81e2-6648907f13b7","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":"18f6f9cf-6220-4de3-9b5d-94c3c9bffaad","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":"4cc180b6-6310-44eb-8b2c-e4c5266b3c94","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":"e5e8ea55-a958-4262-8986-f76028cde7b6","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":"a70b6b78-0805-4b0d-9459-e4da154b0c10","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":"26a8d951-bec1-4f88-a8bb-520afd8e36ff","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":"b54071a4-9ff9-4f87-84fa-8995a16db73f","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":"2e16e36f-c6d1-4cc8-a6d2-3d6fc1feae50","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":"77d0e171-cda3-4314-bb38-8fecbdc15b36","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":"18e6164c-7cc4-4f93-b693-80e08e3643c8","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":"ecf4795c-5cf2-475f-9292-88689892cd8d","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":"bf8f9c21-2c97-4fd6-8ab8-d5d9d7eab823","block_type":"box","text":"approximate pro rata allocation.","page_number":37,"box":{"x":116,"y":635,"width":240,"height":12}},{"id":"b4084c49-da3c-4b7c-9dd4-d97f858d366b","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":"275d07bd-2ab9-49f8-a840-b10481845eb6","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":"961bed19-276a-42bd-a222-a23733d0dfb9","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":"114d8861-adb5-44c3-a4ad-ed246a600a19","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":"c596ef95-4bc9-41c9-bcc2-169a77e1559c","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":"00f0da4e-43eb-41fc-93a1-136d5fa2aa1e","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":"c077af87-0c67-4778-8f87-105619a959ee","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":"cf8bb260-38aa-42c5-a6a9-edfa77e72b09","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":"effc51d1-b531-42ff-ad59-9cfb4c9fc76a","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":"b78f3cc9-4dfc-4ed2-81f7-119c4b45d882","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":"234fb3bc-e4fd-42ba-9d40-9ac6250f6ef3","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":"ea09d86b-92ce-41a4-8eac-8e33e02cf14f","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":"f8419dc5-3331-4484-baaf-b0ba8190b1d2","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":"86788ef5-a400-4dc7-b667-b0b91cd0ab25","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":"f5a2e60b-47af-49ab-a723-a547e491ac37","block_type":"box","text":"34","page_number":37,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"04bacdd9-d3d6-4c50-bca9-d6dc58bae1a0","block_type":"box","text":"NM1026U-6049097-37/259","page_number":37,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"665cd00c-f127-4b85-b81b-32f895d6d2f6","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":"b7e0e354-08f9-4ba4-8b5d-760170bf6be8","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":"9b4f3ddc-6f93-4928-ba94-19d3ac6a4a09","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":"f3830dd8-6724-4244-93ed-8230b760c88b","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":"66005aea-532b-4004-93d6-1cc9858ce9d2","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":"b945cb8f-a707-4932-b2a2-547927118ecc","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":"236a8679-84b2-4f2a-8735-06210e17cd17","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":"9d63e416-e013-424f-ab23-f8c40ba23489","block_type":"box","text":"capacity pursuant to the various program limits (","page_number":38,"box":{"x":116,"y":214,"width":358,"height":12}},{"id":"d1fbdecc-ec17-4044-a577-82f1a92e7f1a","block_type":"box","text":"i.e.","page_number":38,"box":{"x":475,"y":214,"width":20,"height":9}},{"id":"4750b9a9-6b3a-4166-a2c8-728f5ead4b2c","block_type":"box","text":"indemnification exposure limit and borrower credit","page_number":38,"box":{"x":497,"y":214,"width":379,"height":12}},{"id":"77d53729-9ab0-4980-a290-bb6d06714653","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":"3c7cd4fc-fd19-45da-a3d1-954ccfe04eb1","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":"ce9739a2-3c1a-49c4-a1fb-f50eb901b1d4","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":"6843cfaf-81b7-4148-8b76-26e1aee52ee6","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":"37b5dcf4-4e5f-4015-b9b0-9a4e4912bfcf","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":"6debe8d7-e10a-4f0f-b73d-2937cbc3c7e5","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":"69dcd8aa-8d55-44bd-8cef-aacb7775445e","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":"1beccc94-47cf-4708-877c-a755ddb40c3a","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":"e0ed4e45-03e5-4c73-b370-b570a71e8a9f","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":"5d2cb781-e567-4135-b44a-8ddbde905f31","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":"5b4c3d66-51f0-4aab-a208-078e6fcc0454","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":"2c890d0a-b899-4c0e-86c4-785fab235c79","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":"be570a65-baff-4b9e-90ff-606b569505ec","block_type":"box","text":"client direction.","page_number":38,"box":{"x":116,"y":433,"width":117,"height":10}},{"id":"383f5f5d-2aff-4f67-a777-8f67f26a73a2","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":"e04f70a0-8012-4d21-90b0-37647b2438a6","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":"7c659eff-30f4-42b3-b8c1-c55aafe18bc4","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":"48b7719a-9eee-45a9-9082-5d9a4db0d8f4","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":"32476370-8a6c-4035-831e-c2e85de2f521","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":"c19ce1cb-7040-426d-85ab-8c9c34ee3dad","block_type":"box","text":"rates in connection with an aggregated order.","page_number":38,"box":{"x":117,"y":544,"width":341,"height":12}},{"id":"abb5e993-7fbc-4686-8752-5c04bd1d7c0c","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":"c3717504-1928-406c-ab44-cb5847e8a9d4","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":"5ac74a3a-e8ea-4179-bc2a-fc4334a6891e","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":"9d6974f6-0303-4846-9d17-b4875be6e180","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":"2f36469b-ba29-4ce8-a612-07280caa81b3","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":"a8d0c955-d7bf-489a-9f40-b1d5cd42caa4","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":"a4fc4239-d774-4fbb-8fd0-235dc2bb3163","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":"0ffa5e47-a79a-48f1-8fe9-5c958a051780","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":"5a8bfa7d-9569-4aae-b4bc-3aa15caf2a18","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":"65728428-0a17-483e-94e8-89467af924a7","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":"ec89b3ee-5b70-4b77-9666-1992079dae8e","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":"7fb1b3b0-1937-48a1-aacd-0d973ef25c61","block_type":"box","text":"and other services and products.","page_number":38,"box":{"x":116,"y":766,"width":242,"height":12}},{"id":"057ad23c-0807-4e0c-aa4a-c8acc662f2ff","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":"1a05c976-b2db-4f0e-8e54-f2a7c24d1be3","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":"7a1981bd-51e2-41f2-9479-c9f01fbdaaeb","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":"be57797a-a217-492d-b6f3-d755634c1dc5","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":"4fd9d17a-b618-4f06-92d3-071f192e8fb4","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":"aa0dbb9a-90cf-4077-b126-61dec03b7428","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":"6073ee7b-8d3e-4839-ae1a-db5f284b20db","block_type":"box","text":"35","page_number":38,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"a3b6a1f5-b837-4010-a40b-56809bc05234","block_type":"box","text":"NM1026U-6049097-38/259","page_number":38,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f4bc3ba2-9025-41e5-a3f6-a9b8ca1faea4","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":"0f537532-53a1-4490-8081-8afc6e052b9e","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":"3f81cc60-275c-4f36-abde-82adb79344d3","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":"501d8e80-7230-40f6-b9ef-9fe98e7b173f","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":"f6e4def6-01fd-4841-a88b-22b62cf94579","block_type":"box","text":"those products and services itself.","page_number":39,"box":{"x":116,"y":149,"width":258,"height":12}},{"id":"e20708fb-94a9-4ebc-afb2-26e52fb6a8c4","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":"78d47c90-5fee-47ac-8154-c0fbcd6cf1b3","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":"1a7e7992-56c2-40c9-bbe9-95d9928c8404","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":"e4d432df-6c15-4309-90ff-fe40afbcab28","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":"f69a8662-046d-4918-abfb-a735f4978f38","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":"216868b6-fc78-4244-b283-c71064fe0fe1","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":"6c5b7f01-d8cd-4384-98a3-654e63394518","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":"a1e77c42-310a-4db7-b6a5-1f2022cf991e","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":"500132ea-9634-400a-a7d8-f1b3dc4db71e","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":"1e10bcab-1f43-4684-9960-1c74ac32efe0","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":"a6c7244f-4497-4847-891c-6941fede88d4","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":"91e3fc8f-7978-42d3-b9cc-67ceac964ca2","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":"555876ac-1c7f-4829-a258-e9fc0c464f9d","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":"7261d1b6-7627-49b1-9e48-5e0fd7c40bff","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":"b5be360c-fb8a-4825-83e9-8e4b821f0c55","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":"d8c0869c-93cf-4c7a-b5f8-994ec30ce036","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":"fd6ef273-9fc9-4fc6-b8c7-4b0d722d56d9","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":"a5a26969-fa6d-44d6-af86-f5be57591694","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":"a9b337b3-ecee-4555-b881-c9b60291c2af","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":"aac9b456-24f5-4221-a728-e2bec1f175c4","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":"61cd52d5-712c-45a1-b998-b2be4a899c02","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":"154e7f6b-c580-49e6-9160-11923700a2fd","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":"b6424bfe-b093-43dd-bb0a-2901cbd16fea","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":"95700fbf-326e-44a2-aa7b-621d44f992b0","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":"22bdfcc4-a480-450a-bd60-f5d18a5b6c74","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":"3dbb0128-65c4-4a11-ae44-86ad62a304c6","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":"2bec0be8-4c74-4f80-88d4-99ab72eb0f0f","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":"6564703c-b268-4432-8294-c5f79688f0d9","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":"896e30af-0fb1-4f6d-9796-2f34b201d47b","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":"cf98b38a-67e1-4fef-9e6b-25c0ddd41b91","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":"d295f83e-5037-485d-8e99-1c9bb548834f","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":"898f5fe1-9bf1-4766-b797-7698b3d8ee09","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":"6bcaa879-204f-49af-9d30-bbaf07e32c6d","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":"e1488458-8b2f-4931-8aeb-24efdaa809e1","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":"0c823b12-201c-4a00-ba98-bfb4016f70a8","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":"397ca98a-70ff-4f4b-bb18-77ca160d2c6e","block_type":"box","text":"procedures, see the","page_number":39,"box":{"x":117,"y":782,"width":147,"height":12}},{"id":"36c88646-1fd8-4550-895b-8e6b4ce50cc4","block_type":"box","text":"Proxy Voting Policy","page_number":39,"box":{"x":270,"y":782,"width":145,"height":12}},{"id":"93fc6ba7-9c99-45ca-bfed-4b1c2610739d","block_type":"box","text":"section in this SAI.","page_number":39,"box":{"x":419,"y":782,"width":137,"height":9}},{"id":"2e7819cc-b47f-411a-9c8e-750f98d5b6fc","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":"f97f5f4b-fe98-45aa-b049-cca9d238612a","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":"3a2673cf-f2c0-4a9a-b355-f89c97f00bcf","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":"62ad773e-121a-4c7c-b06d-4b7ea9889f2d","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":"e33298a6-2a3e-49c0-a2b9-b480d24bd050","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":"1b508a49-97b2-4c33-b76c-e6a9a5e913c5","block_type":"box","text":"36","page_number":39,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0a6951b4-af26-4132-b84e-c98199cf83bf","block_type":"box","text":"NM1026U-6049097-39/259","page_number":39,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3827ea11-5a3c-4840-89d9-9011a63deb32","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":"378744e4-527d-4cb8-9a86-797a861cb168","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":"242d1479-ede6-4684-a82d-1db563ba05bd","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":"641907ca-a636-44f3-8c61-f00e04b04b66","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":"c1131769-8dff-42e5-8c79-54471ad1f061","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":"68135a3d-5a3a-498d-9a0b-6b7a6d29384c","block_type":"box","text":"Fund.","page_number":40,"box":{"x":117,"y":165,"width":46,"height":9}},{"id":"1dadc620-9fd5-4009-b64b-8643937da499","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":"be0f4cfa-25ac-4f58-a8fe-a49be40957df","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":"f35a358f-4370-40e8-b864-4ebba59040c3","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":"71d77a8e-fca1-49da-9db0-792baae5431c","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":"f5b0bfa6-9141-48cf-b977-599281c806ab","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":"a53a5381-48af-4c46-95ba-c5147d399542","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":"276e404e-f88f-4f72-928c-b4748bfcda76","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":"0bf5f1a7-994d-4447-9aff-46dd47d583ef","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":"8ace4589-827b-4772-820b-f323527c1a65","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":"41d40c68-6298-4f40-9e2e-71c59f7ff9a6","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":"bc877ca7-7005-455f-91d5-14083e9e0a87","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":"4e5c98ca-9689-4bbf-8f33-6f6953204b09","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":"b23e0070-786e-406b-aaa6-4ffd9195dcfd","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":"05cd86b7-c861-4868-8d46-496c30db209d","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":"4905f30d-9557-403a-87d6-c876e0c0d81d","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":"d85b9d8b-15fa-476b-bd2d-758d4a6551e5","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":"930724ef-0063-445c-b452-9c62ef48626a","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":"1aa8dda1-a938-4c62-826d-e9e05bf31efe","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":"660068a9-6c75-469e-a710-b631b122c91f","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":"ba73e73f-68b3-4084-b87f-76eb6087d492","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":"88c5766e-4ff9-4504-8777-5911a0b99f94","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":"e4d83cbc-4b97-4ea7-aeda-83be4c6e8d5a","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":"4c40f551-c660-44e0-8103-bcc18db52643","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":"4799f44f-f70f-461e-8dcc-290bb423cc5e","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":"2dacf875-18db-4bd7-8a5a-451b8ab4867a","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":"0e311d28-0694-4bdd-bff6-fd3391ddd502","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":"c0c9fd51-5421-4bec-a988-758ff0222661","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":"19daf63f-98a1-48e0-9b0e-b9177649e8af","block_type":"box","text":"BlackRock.","page_number":40,"box":{"x":117,"y":645,"width":88,"height":10}},{"id":"80088655-c5e7-4dd6-81d6-94e3a470b71d","block_type":"box","text":"As disclosed in more detail in the","page_number":40,"box":{"x":116,"y":676,"width":245,"height":10}},{"id":"a7bc8daf-a1b0-4c3c-a3b4-b7e22204bd8d","block_type":"box","text":"Determination of Net Asset Value","page_number":40,"box":{"x":367,"y":676,"width":248,"height":10}},{"id":"42b3ab2d-1588-4b72-957b-a99583ec0c5f","block_type":"box","text":"section in this SAI, when market","page_number":40,"box":{"x":620,"y":676,"width":239,"height":11}},{"id":"a71595e7-abdc-4813-8800-6e9a87616b37","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":"7da3e144-590e-438b-abd5-3d577705f17b","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":"379aa964-506a-4fbd-acfa-f8ff31ba417e","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":"a2fb79a4-261d-4d2e-99dc-a984d7fda8fd","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":"b6af98e8-508e-4091-96b1-90301f8bc52d","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":"709f0189-2e85-49ef-b2cd-083836725fa7","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":"f5cf62b7-f3c3-49df-be8e-469321411a1a","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":"45582448-9632-4e15-b125-2e58df5e8dcf","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":"0d039c38-6cc7-40ff-ab6d-7b234574eb9c","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":"d5ba8435-146d-45f9-b22d-b013c841d58f","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":"573cbf41-ba10-4894-a65a-127c49b90adb","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":"96512378-f00d-460c-947e-3877452d5398","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":"e080b138-95d1-4daf-98be-e95f193ad6f5","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":"39a6807e-6d5d-4006-a17a-d7aa3bde927b","block_type":"box","text":"37","page_number":40,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4b21d5e4-5da1-4f75-8845-9a606caa2b07","block_type":"box","text":"NM1026U-6049097-40/259","page_number":40,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"917322e0-77fc-4989-b1ee-0f1d8ef3058d","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":"639e19ba-824a-4007-9fac-6b9c8499c312","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":"ab8b3d95-23a7-4177-80b1-12788268ce66","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":"4f935e76-5268-4da2-8a63-1c93e0c90b60","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":"3c18cc72-6fd3-4d2c-9753-1c532776c1c6","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":"2f931e27-c09e-4a44-9bf5-8861841de40c","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":"bd51f1fb-dd44-45e4-8c1c-32b348f764cc","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":"c5de0074-9f2f-4e62-8797-48abb98dd48f","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":"08b14c9a-572c-4294-a951-46ba0f4ba18f","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":"a8ef9540-cac4-46bf-b451-21f520ccb168","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":"a1846d28-43b6-4d51-b0e4-cd5cb32c4bf5","block_type":"box","text":"expenses.","page_number":41,"box":{"x":116,"y":260,"width":81,"height":9}},{"id":"a6cc6127-977b-468e-8c59-4d5f8d27f27e","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":"eb7acc21-7941-4207-b375-36c5ed4abc0e","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":"3bef4495-179c-41ab-b6da-ca8a2640a1fe","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":"e3e799ad-6eb0-4365-9eaf-2cb03422cae2","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":"a362e044-1cd2-4986-881c-c13e1eb2042c","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":"5ec9b307-724e-4ecf-a765-826679df2bde","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":"9e0d252a-0c7f-4ec4-9a94-ed0b1a7b6593","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":"facb33f9-1eb1-4a8e-a313-0cd34e7897f9","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":"20f32647-f505-4619-9abf-d2261660bb62","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":"55f94249-5063-4d19-984d-cad4bced3517","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":"247dbcaa-171d-4df9-ba76-4ccb7ed96f74","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":"f3130a1b-58e2-4ab8-8bcf-0d1c4632ba01","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":"d6c323c3-0ff0-427a-a3f3-1cf295dd9334","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":"82006826-401f-4572-aa82-6abdde826924","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":"f2f3fd94-9a51-47f0-b595-03bd8b9e427d","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":"6c6eebbb-203c-442a-a8c5-799a99005d71","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":"65c7a30a-7599-4e3f-b8c4-512c824efda6","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":"c3c03a2c-4ec6-4ea2-bbd6-9205d32739d6","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":"5ad73144-7be0-400a-8dc6-0f6cc5d37d44","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":"09f47bb5-19be-44db-b8a1-47423471437c","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":"b718fb04-45ca-4e7e-a284-d8369744cc4d","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":"12a0d449-17aa-4ca8-8fa6-66d530f8d5e4","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":"84f687ab-482f-4a09-8a16-775d6015d550","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":"6cbd82ee-aa5f-49dd-9c29-1a54d4d3d059","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":"b92a759c-a69b-4c20-b2c4-b623e2be797e","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":"e43d4913-1351-418f-9857-008e31f0cef6","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":"c37599d3-0fcd-4a7c-a7fc-ad1a8c21a53e","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":"3b9b5835-a383-4755-8ed1-b7bee5bf72f9","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":"b35e6e04-80fc-46b5-b9ab-e143428264a4","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":"ad3fc418-9ae3-46fb-819c-0873669f8e12","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":"19211caa-3ced-4bd7-b4c0-64f67430f388","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":"7b426604-ca21-496a-bf92-bc7375cc71e0","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":"7f7a427a-a596-41e6-bd32-88b597702eb5","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":"7719b280-539c-45a4-b422-320ffe1e6cf0","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":"79cc8e8c-fbe9-40c4-a583-a0eb31ee3e34","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":"e88af318-38ce-4227-851c-c01e6ef470f8","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":"5b83fd4b-e93c-4f1a-8266-5e5f4f1efc36","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":"486813eb-26ee-43ed-b8dc-692bf63f3285","block_type":"box","text":"38","page_number":41,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6cb03481-1350-43ac-8dfd-3b844669a18a","block_type":"box","text":"NM1026U-6049097-41/259","page_number":41,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3177eb36-9546-4fd6-b0c2-341c94c7d643","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":"08eb4e93-b49d-48d0-97b7-4c5fa718b47f","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":"74acc409-4661-485d-bdb6-888e98e7b999","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":"eddeba7b-82e2-4a79-8adb-711835d5de91","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":"e96122e5-930e-4059-a373-ce300076e0fe","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":"79065e5b-738f-45ad-ab23-c33c4b47d911","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":"6f9c1516-7b80-4aa0-9024-cafcd68de549","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":"1b2bc770-073e-4fa4-b3ac-749aa2d21c93","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":"7e93ee25-8782-4bac-8474-acf3922abed1","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":"c86de723-1027-4a7d-93d0-cdcdd1a06b9c","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":"3e04f852-9e16-426e-925f-4164d1f13a38","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":"77391fc1-3431-4245-84a4-efa8a9d175e4","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":"f0dbce80-148c-4bce-b35b-eba48bfd112e","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":"82a8e34b-c79d-4aa2-aa4a-94c1835b8a41","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":"1a81b5bf-3ade-4662-afec-907f044cc714","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":"1696df29-7532-4445-b272-4155d4b1c727","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":"46063522-7574-4729-90d2-dc037cda78f9","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":"d0e95d38-7a3c-4803-82ff-98a00dc7f43f","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":"62aa0c66-d13c-4d0a-98c1-bbdf90570dcb","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":"7cb1f52a-5ed2-4dea-97ec-656c33a62042","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":"750a9ddc-b11d-47db-a43c-59b775bdcaab","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":"19f7ba3a-1593-460c-8650-b850217894f2","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":"d17f529f-5abc-40e6-a1fd-092c80883985","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":"c36f1930-69d8-4c25-930c-e62168248c4a","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":"1f4822ad-26e8-432f-9a36-c4c3405de3c2","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":"890bd76d-6795-4529-8ac6-fe4e34ce0b45","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":"2a91538e-2446-498f-a6cc-75ccf992e2b8","block_type":"box","text":"other side of a barrier.","page_number":42,"box":{"x":116,"y":521,"width":169,"height":10}},{"id":"1d79d681-d46b-45a3-9daf-8269f8e9fab8","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":"199c5920-b957-402a-91e5-82b51764dad0","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":"45f89426-23d6-4ea5-9d4c-3acb2f570367","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":"5fed7c76-8607-46d6-9376-b894050d4b34","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":"9559f9ae-b82d-4798-bd9a-91f274e8072d","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":"00123618-4165-4224-87df-281058025c3e","block_type":"box","text":"restrictions and limitations imposed by laws, regulations, rules, regulators, or issuers. 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There may be limited availability of derivatives that provide indirect exposure to","page_number":42,"box":{"x":117,"y":847,"width":769,"height":12}},{"id":"8f6bde28-3969-43bb-a69a-dfbb62edfdd6","block_type":"box","text":"an impacted security. BlackRock clients can be subject to more than one ownership limitation","page_number":42,"box":{"x":116,"y":862,"width":698,"height":12}},{"id":"a8bd9ad4-a999-4ffa-896f-61f632fb0449","block_type":"box","text":"39","page_number":42,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"f9fecaca-3f6c-49d8-ac49-cb9c368cc8d2","block_type":"box","text":"NM1026U-6049097-42/259","page_number":42,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6e351839-a666-43f5-ab4c-3b2cae5cd13e","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":"03cfc6ed-5afd-4ed2-95f0-f1b22f7e0db0","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":"67e347e5-4298-457b-a8c8-490030c40df6","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":"84679ab2-7cb4-4fa2-80a1-6dc1f7a3f4e1","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":"39dee0e5-3286-4ad1-96ff-1557bff700f3","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":"ea3156db-2086-4d70-ae18-51bcc794dc07","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":"2d0eaa0b-6fee-4535-a551-7b6da3d44e22","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":"3da5d268-8528-47bc-b30d-41881d4c54d1","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":"69b1ba86-655c-4b3a-820c-831162313ad5","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":"b678c4cb-b3c8-49dd-99b7-42644e22bcc5","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":"02fc24ed-18f0-4b4d-95f1-27fc0ea589b8","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":"21530f34-dbd7-45d9-92c8-c82fac272d7e","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":"b05ddd20-d6d9-4238-a89f-5f600944a5af","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":"f0950da4-d945-4ef5-936f-cb50a81d6df5","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":"37c31d35-67e2-4711-9b4b-0896067d21ab","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":"c04f8169-7a7a-442b-af35-ae0b80ce4e3c","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":"cec0fbd4-dfef-4083-8624-c1666b23b0f1","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":"bf8b5749-de29-4535-9c99-dbd9372e6bb8","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":"57d98918-c475-41e2-b2cd-1fd704981c28","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":"20ba283e-7008-4248-97d6-24d40cc4ff3f","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":"2e2bf937-936c-43b3-934f-5e5b6739dfee","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":"b3550dc4-9089-4bc6-831d-be9454719dc7","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":"4226e774-6cb3-4bb0-b926-fd656c59ab1d","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":"5e577106-6a12-4a0e-b907-9b37e0664b1f","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":"29b8beae-1386-4fb4-9401-20236cd81a5e","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":"342cf9a2-56da-4db7-a474-2b80dfcb457e","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":"00b8a7e0-2692-4ed9-924c-658e931e4577","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":"7bf46a73-003c-43fb-81b8-28250ed11669","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":"b4c7b43b-8e1d-46d2-bb69-31ccb1769be5","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":"67ccd8bc-98ca-4d75-a545-7b1357b5d3a3","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":"705cffdc-1ac4-421d-a551-8ed3db9bca13","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":"9d286918-e7c6-46a3-b8c6-b9f2d0b9db95","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":"8d63af9f-dd9f-4989-ae17-0113ceaf56b4","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":"7fe78924-c80f-410a-a96d-6e501398e9d0","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":"7b3c9fc0-8b55-4b73-95d9-12180173e8e7","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":"4fd9c824-0528-4d5d-b9df-66118b305c24","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":"93fc5ae9-87ac-4835-89b8-df4005947e46","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":"8b4bfbcb-3923-4ac3-9b99-a558ace63483","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":"c48c572f-daff-486d-a353-9b4c707c3529","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":"3909c640-f768-4b63-ab98-a0e2975fd219","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":"a0581a38-a7df-4fe2-aa74-45a0f52af7c8","block_type":"box","text":"obtained.","page_number":43,"box":{"x":116,"y":763,"width":67,"height":10}},{"id":"5847361c-aec9-4a1d-86cc-df0bfcd786f1","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":"6c102684-6221-4e65-bd4b-fddbc568cbba","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":"e4d5f51a-a7d5-40fc-ba2a-82ef1d1db0a8","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":"e849a0a4-b271-4124-a865-6e044b87b955","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":"4929ffc6-3dea-4d02-8c4d-15824d75437e","block_type":"box","text":"other BFA-advised ETFs.","page_number":43,"box":{"x":116,"y":878,"width":193,"height":9}},{"id":"e2c20786-5154-4d59-b232-5e9b3150c8b0","block_type":"box","text":"40","page_number":43,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"d85c74be-4a5d-48ac-8b22-a4d241e00537","block_type":"box","text":"NM1026U-6049097-43/259","page_number":43,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a1c48188-08ef-4720-b6ed-84dcff39eac5","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":"e74fd21d-9fd9-43f6-9a03-fad404234bff","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":"3e44b916-7493-4210-8f7b-2f4ee98e5ddb","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":"bb8bacd3-15f0-4c0e-bf17-4e31e49ee938","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":"3ad31098-1b63-4f99-9035-1e166b2ebaba","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":"49dfbaf8-178f-433b-a51d-dc5b2cfafadd","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":"d61e3a99-33cb-4452-b147-ecca9e1b7689","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":"0a1fb591-8e88-43e8-9bb8-e8b0df997aae","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":"22e863fe-3578-425d-8d1c-6ac535aba781","block_type":"box","text":"and its affiliates.","page_number":44,"box":{"x":116,"y":211,"width":125,"height":10}},{"id":"0222fc71-77f6-4fe5-94a1-6954ededff85","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":"b05805ca-d73b-4f9a-a746-aa630a20ef59","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":"d6387e16-4610-4844-9e18-69cd389fbc17","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":"ff0aec0f-67f8-43d4-bc51-fe2c488c512e","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":"a69c96d3-6a7a-4c6c-bb2d-cb1d001657ef","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":"dff53485-d698-4ecb-afb3-523247d89ee3","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":"b19520ab-d0d7-4b48-a762-baf1b37f48bb","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":"762aa5b0-b71e-45ec-a4fe-89e94011a9db","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":"1444a8a6-c92b-4eaf-b85e-9ac9e2a34856","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":"bf57f361-51f2-4793-9973-77121cc66080","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":"86560f8a-71bb-476d-b155-177823bf45dd","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":"a7b98632-37fa-459a-b047-926387446195","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":"d2b40ab9-2b9f-4cc0-8037-92b6d19f5fd7","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":"2bde254b-ec0c-471e-a9af-272ed34a0e9f","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":"45e441f3-eeaa-45dc-814b-3bbc5216746e","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":"e5429658-362d-4789-93c4-fea31255587f","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":"826ed631-4512-41c4-9c88-e8efd7d13943","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":"18c79c1e-c0c5-4f63-966d-56ae92fcc5de","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":"1f3276c8-4430-4d6f-b36c-1874d6245f46","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":"990ede2d-0acd-4889-a9e9-be8d14400a27","block_type":"box","text":"licensees.","page_number":44,"box":{"x":117,"y":546,"width":78,"height":9}},{"id":"335483fe-74a0-41cc-aae7-487f218f4215","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":"7f02b88b-2433-4eee-be58-2a06513516c7","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":"8549cd22-0f90-4f64-aa85-41c95979da5d","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":"481c4c09-dc21-4d1b-aad0-f8cb4065669e","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":"b90b8659-7087-4fdb-ab53-50cdec667a76","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":"6fca3d83-d1ce-4fcb-b5ba-9399ec1fa831","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":"b0d091df-0690-49c9-8614-9d397239d903","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":"6e2671cf-c758-4a41-a247-24aa935d8953","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":"2bd07377-aee0-4117-b235-9f2d0de4bd91","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":"0998023f-f2f4-40e5-a3fc-36d3b2d0c6f0","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":"e95bbc74-109d-4b41-8beb-597f1942ef2d","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":"bbc4c53d-63ab-400e-bab2-4b421caa10b9","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":"1ae8dccf-5a32-458c-8ee7-1152378f5be2","block_type":"box","text":"fee structures.","page_number":44,"box":{"x":116,"y":760,"width":105,"height":9}},{"id":"bed049cb-e2aa-47f4-acdb-589df631d503","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":"2a47500b-ebee-48f4-84d5-67ae886c49f6","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":"1e94d468-93ec-4887-bedb-bf54ba4c6f45","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":"012560d4-5905-44e6-840f-d2b931a9debb","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":"9acfe998-1e03-451d-abd2-6a44a6f5bd50","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":"b7701c10-5c29-441c-ae1a-e54a942ba958","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":"9c9b2b8d-5579-4322-b4ec-ccf94d128716","block_type":"box","text":"41","page_number":44,"box":{"x":490,"y":909,"width":16,"height":9}},{"id":"51b46cc6-712a-4a2d-93a4-d096d86a1942","block_type":"box","text":"NM1026U-6049097-44/259","page_number":44,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"020c9af2-53ac-4675-b216-51b3129564f0","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":"c79a2145-ecd0-4823-a98f-2bc94bf8db4e","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":"45aff29b-3466-4c5e-a0fe-2f427283be2e","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":"58ae9ad7-5e04-489c-a612-379165810ca2","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":"d3b73229-f8c1-4053-9d47-256e1ac34a17","block_type":"box","text":"enhance the profitability of BlackRock.","page_number":45,"box":{"x":116,"y":149,"width":290,"height":12}},{"id":"b9075fca-f69a-46d6-ad4a-8033b86773f0","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":"4d849c1e-273f-460a-943d-4a005ac79d77","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":"8698ca47-6870-42e6-bf59-4caff176a40c","block_type":"box","text":"arrangement with the service provider.","page_number":45,"box":{"x":116,"y":213,"width":291,"height":12}},{"id":"5c9c80b5-1278-460c-9e9b-0c0a6870c263","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":"d99fe243-d871-41db-b118-935259ab0081","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":"63872208-6909-4ee5-85f8-fd1bc17ef9b0","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":"a5c920cf-ad1a-41d5-9ca0-d410a103133a","block_type":"box","text":"Fund.","page_number":45,"box":{"x":117,"y":292,"width":46,"height":10}},{"id":"fafdb9be-6c3c-4be4-b741-cc4a74549add","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":"10accc11-2900-4a0c-85ed-2645f5330ca3","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":"87e4fd48-9cf5-47a9-93bd-f489b217c1fa","block_type":"box","text":"Investment Advisory, Administrative and","page_number":45,"box":{"x":119,"y":396,"width":726,"height":29}},{"id":"01be0c6b-c12f-4089-90dd-f5ccde0968cf","block_type":"box","text":"Distribution Services","page_number":45,"box":{"x":119,"y":429,"width":376,"height":23}},{"id":"c7ccca29-0122-40e1-ab0b-57cb80c58b4c","block_type":"box","text":"Investment Adviser.","page_number":45,"box":{"x":117,"y":484,"width":163,"height":10}},{"id":"6a8d1e10-bb8e-4143-b116-ba4710381164","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":"1d18191e-1eba-444d-97b1-5cbdbb1dfa74","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":"9819910a-f971-41fd-898f-966bdd7de4ae","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":"5f98525c-82c6-4f86-9d1f-b563318b9500","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":"ee6c9eed-f479-422c-b0ad-59ce89daf0f4","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":"23b4c8b3-91dc-497b-a64a-abf2798fd3ef","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":"e7c646e1-2c1f-4454-8c68-6702cfbf48d1","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":"ab85148f-3ac8-4067-9707-cb165852c9d1","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":"b543ae5c-6f9a-4f39-b488-c474622c98ee","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":"bc318300-6d12-4221-ae13-216712af2f48","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":"a49c4b64-cbb1-4c5e-b8f3-05935500a42b","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":"4f1f0c3d-e5a2-4235-9e6e-10638d687321","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":"f6e02119-08f0-47b1-b576-0f7b059e4f25","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":"69c783f3-6584-431b-854e-1c9731edf8d4","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":"5e86d193-101c-4412-8c4d-c0a38ea83d1c","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":"8b2fd0e1-9cbb-43f1-b77e-f9f18ce7bf2e","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":"abe4c6b6-f440-4a63-9052-1b907f7d30ab","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":"40204170-c92a-4ad2-8ac4-5f07f98a2de4","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":"b1700244-cae2-4332-a755-a736bd32f7e9","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":"7b05134b-6752-4b7e-985c-22a325f066a0","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":"98e62d9a-cd65-4ba6-9035-068f59527792","block_type":"box","text":"the Independent Trustees).","page_number":45,"box":{"x":116,"y":829,"width":206,"height":12}},{"id":"5d88f0e9-c74a-4b9f-98dd-3c6fb9d1ea2d","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":"a6509571-8663-4e88-880b-9bf8d3a64e34","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":"3249bd00-1037-4b80-b464-3a1ee9e347b6","block_type":"box","text":"42","page_number":45,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"6b7b95d5-0d1d-4000-ac90-f7a013ba5fec","block_type":"box","text":"NM1026U-6049097-45/259","page_number":45,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"21b36113-0d89-4619-8d34-438acc9eda55","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":"f0757cde-54c8-40b6-989a-14f463cc0689","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":"b8480ec6-9048-4f0f-b237-7ffe45c326f0","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":"8114f42f-2dde-464d-b0d6-ad2ed210100a","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":"8189cf45-ddf3-4dee-85a9-8760d095ed0d","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":"dcdb5515-a836-4389-ac86-6544fc52ca3d","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":"865308be-3a7d-4263-82df-cddb213c60c4","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":"a9c7b252-c024-4362-8676-4be50b160db5","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":"5b6e8a7e-5683-4ce3-af0d-cef1d439eb64","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":"af1b0e5c-8815-464d-9075-8581866a4eb6","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":"d7066c4f-4e94-4b07-8547-1a204af0e141","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":"9dbf908f-49f6-4390-b7aa-021195c2e9e0","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":"cd740c9b-3662-4eba-8e15-1d59fc3aa959","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":"beb1dd7d-bf92-4d90-9b21-572f6e12a2d4","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":"7a17d737-aee8-4520-bba6-18d224d79661","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":"ec5baae1-49d3-4e5b-90c1-0e8e1bc0e4b9","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":"71a99f67-6f5b-4d8b-8027-ece025adb89c","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":"726dd9a1-fb4e-4bf2-b1e0-063afe637bad","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":"eb421c0f-9ac2-4247-9adc-66dfc722ab12","block_type":"box","text":"purpose of voting on such approval.","page_number":46,"box":{"x":117,"y":407,"width":270,"height":12}},{"id":"df0cd02b-4ccd-42c1-b1ab-b5fc02be9cf8","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":"12a2b2d5-e034-4fee-ac50-d22576761224","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":"e61391e8-34b0-482f-9ba9-f3e7fa99c42e","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":"4a62b7d3-56e9-4e67-babc-7addb205dc1c","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":"d77bfbb8-6415-4607-9562-00716bfe96fc","block_type":"box","text":"1940 Act).","page_number":46,"box":{"x":118,"y":499,"width":79,"height":12}},{"id":"89e72ecf-3de1-487c-ab30-b20e95d619dc","block_type":"box","text":"Investment Sub-Advisers.","page_number":46,"box":{"x":117,"y":528,"width":204,"height":9}},{"id":"cc35a836-6442-4696-870c-3ecb4f619ce2","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":"8554a870-cf30-4191-b99d-9ba81df51530","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":"8a6092fc-de76-4e58-88cb-386f6727b55e","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":"dd160f48-0dba-4b6e-9add-d9db2cb70d0e","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":"1846b42a-91be-4128-add1-bf527f76248b","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":"5c2bc1f3-19f3-4e5c-909c-d272a512fb8c","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":"6e13c457-7ec9-4e9e-9fdd-df8893522280","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":"b318dda8-8e8e-4520-aa78-82df1931b7c5","block_type":"box","text":"law.","page_number":46,"box":{"x":117,"y":637,"width":33,"height":9}},{"id":"3cd56b06-a606-4afd-8663-c81dc9435a00","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":"3201e947-ae66-426b-aca5-2afbadea224d","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":"269cfd1f-8168-42bd-a298-62ba0a7d0189","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":"1398f719-090c-442b-9c25-baadefb64be1","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":"43d6f076-a210-4403-8a28-b6a90a20c61e","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":"a9abd128-224f-4bb8-8d36-04b77c1e311e","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":"2c4aba24-ac3b-4cab-831a-0556750bd2db","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":"0ee42852-adb2-4e0d-b197-a3530160a430","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":"b48c65c1-12a6-4f88-a4eb-8b2957373504","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":"2b99a6a2-eae5-4727-9a6b-fc805db20685","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":"e44ec6de-3431-4e34-9874-90596ccb4ca9","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":"7f6bc2b5-724d-4947-8b54-330f3bc86e67","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":"b19759b7-49bb-417d-b9fe-4b307186101e","block_type":"box","text":"43","page_number":46,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"73b69c05-2386-43b3-9dcc-cbd1a193ffa6","block_type":"box","text":"NM1026U-6049097-46/259","page_number":46,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b873fc67-4b5b-471f-a9b5-97b882bb1dba","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":"57a32984-a5b8-420d-885f-a20bf78ac5a6","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":"094a3517-c30c-44c0-9b94-0b1ae2e0a071","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":"f628c17a-507c-4ed6-811a-1247ca7433ea","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":"f4791f4e-41e6-4dd5-a4af-5f88e3b7a70e","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":"d9440c21-a297-432d-b2c1-95b14fa5580e","block_type":"box","text":"Portfolio Managers.","page_number":47,"box":{"x":117,"y":196,"width":155,"height":12}},{"id":"cc6b0584-ca80-48d6-98f8-0d0caa2a2b17","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":"74787395-7b1d-48ca-a74d-5bdcc85f761d","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":"f127cedd-2eb6-41b3-aa61-394f032a4c39","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":"b4b1cbcc-b8c2-4e90-9043-9e1b2a59d4cc","block_type":"box","text":"Philip Green","page_number":47,"box":{"x":117,"y":258,"width":92,"height":11}},{"id":"93d68ec7-0481-484f-bb7f-df97c97abdcf","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":278,"width":120,"height":9}},{"id":"6317df68-c51a-4c57-b3ed-8cec8c79835c","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":278,"width":50,"height":7}},{"id":"2ece1f8b-e7d4-4e38-b9fc-c440691eb91b","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":278,"width":79,"height":7}},{"id":"5c51fcde-c462-49bf-b271-a6688ec6e40d","block_type":"box","text":"Registered Investment Companies 28 $23.12 Billion","page_number":47,"box":{"x":117,"y":296,"width":771,"height":12}},{"id":"5088b3b8-eef6-4b67-8a3b-f334c0fa3321","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":"7a4be91d-355e-4058-a120-564c8bc52018","block_type":"box","text":"Other Accounts 14 10.56 Billion","page_number":47,"box":{"x":116,"y":327,"width":772,"height":10}},{"id":"0bcca97e-f731-4857-b405-e64e97fa6562","block_type":"box","text":"Thomas Becker","page_number":47,"box":{"x":116,"y":359,"width":119,"height":9}},{"id":"4882658a-4d91-4687-9527-1d2bc785b2cf","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":378,"width":120,"height":10}},{"id":"d0932a0d-2017-489f-a6bb-af64d2be527d","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":378,"width":50,"height":8}},{"id":"0d167e72-d185-4f80-9584-db4a40c21f6f","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":378,"width":79,"height":8}},{"id":"d5a6830f-6381-401c-8bdc-e0015696b447","block_type":"box","text":"Registered Investment Companies 13 $13.82 Billion","page_number":47,"box":{"x":117,"y":396,"width":771,"height":13}},{"id":"3b4ddd32-e650-4a2f-9c37-3df1a6d65a36","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":"8ffc0a91-ecc7-4913-acdb-59d958e5ffc4","block_type":"box","text":"Other Accounts 2 961.6 Million","page_number":47,"box":{"x":116,"y":428,"width":772,"height":10}},{"id":"bcb1a0ec-fa9b-43f5-a214-858bc311ddb1","block_type":"box","text":"Michael Pensky, CFA","page_number":47,"box":{"x":117,"y":460,"width":160,"height":11}},{"id":"97af024d-e750-47a3-8a51-91ea8fdc0204","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":479,"width":120,"height":10}},{"id":"90dea18e-4c04-47cf-99fa-18fc31cb3379","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":479,"width":50,"height":8}},{"id":"5476fcca-a327-486c-a796-92ce0e0127cc","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":479,"width":79,"height":8}},{"id":"3eb5e67a-5ddd-4e9c-9f64-eb2853c7dfd1","block_type":"box","text":"Registered Investment Companies 28 $22.93 Billion","page_number":47,"box":{"x":117,"y":497,"width":771,"height":13}},{"id":"716f6aca-9804-49ac-ad76-979682728c7c","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":"6f60ed75-36d3-4c1a-ad5e-2c9ee288b7dd","block_type":"box","text":"Other Accounts 6 1.27 Billion","page_number":47,"box":{"x":116,"y":529,"width":772,"height":9}},{"id":"b4e58a9d-1782-423d-8b0d-2a1174a95e49","block_type":"box","text":"Richard Murrall, CFA","page_number":47,"box":{"x":117,"y":560,"width":158,"height":11}},{"id":"51774c57-b873-4118-a496-76a07ee1d6c2","block_type":"box","text":"Types of Accounts","page_number":47,"box":{"x":116,"y":580,"width":120,"height":10}},{"id":"f0859fb4-b82c-4aac-85ee-0f95cec6d16f","block_type":"box","text":"Number","page_number":47,"box":{"x":699,"y":580,"width":50,"height":7}},{"id":"057cbb3c-7d51-4f50-8a0f-acd517ae2504","block_type":"box","text":"Total Assets","page_number":47,"box":{"x":793,"y":580,"width":79,"height":7}},{"id":"49b43264-a2ff-46c8-8f64-7b7971177d53","block_type":"box","text":"Registered Investment Companies 3 $ 6.62 Billion","page_number":47,"box":{"x":117,"y":598,"width":771,"height":13}},{"id":"a2098683-8cc0-4c63-9f9d-27e5a3bc2427","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":"0a1d37c4-168b-4f2d-b4b6-73c9d4cb6a49","block_type":"box","text":"Other Accounts 5 7.14 Billion","page_number":47,"box":{"x":116,"y":630,"width":772,"height":9}},{"id":"6ef6208e-b14e-4d51-a0e3-40a0a9f12375","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":"bd3831ff-0efb-4a48-b1a0-e040d9b141fc","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":"6c77c417-6a57-492b-93e6-e341c8ce2a45","block_type":"box","text":"restricted due to","page_number":47,"box":{"x":117,"y":692,"width":119,"height":9}},{"id":"638185e2-6818-4d71-b820-d916fe2e8504","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":"f7cdfb4e-92cc-409e-a510-4fa01513923c","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":"14796d35-495f-4570-a543-6b8d7384bf13","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":"4b93ad2e-a660-4b50-8437-3da5cffb1d47","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":"c3898b76-d136-4335-b5ad-fe31a306d239","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":"0eda4d67-01c9-4d09-8b46-e8653c3b8c81","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":"cdc3a0fe-828e-42a5-87b2-1592a479fcb0","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":"bc5df886-72be-4415-9e88-164f570004d5","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":"eeb6fd3b-4ad7-41be-9e2c-582d8e4fc97e","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":"d4c4220b-daea-4a65-9390-568af45ba0c7","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":"66e91346-d266-4516-ad45-98de695ebf9e","block_type":"box","text":"44","page_number":47,"box":{"x":491,"y":909,"width":17,"height":8}},{"id":"4a776b3d-695f-4bf9-b0b1-4609736a25f6","block_type":"box","text":"NM1026U-6049097-47/259","page_number":47,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"277ac226-492c-4299-85db-588e5c1aed08","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":"7f42de10-54b4-48d4-b54c-5dc4fbb5770d","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":"ee4941a8-608d-4e9f-a934-94328c88646b","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":"3537b945-ca4f-4f3a-852f-599d35f8baba","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":"9d51a782-2a40-42ee-aa39-5230f490c2c6","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":"a8501282-2e4e-4b11-8726-66673afa7f27","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":"263038dc-f75f-424f-9cc4-d24cd780872c","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":"c59bc838-3a37-409f-a1cc-bb81cda08000","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":"04872076-caca-4f09-8456-609289b64a9a","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":"cecf7536-ae1d-4acb-81ae-86a310c24ef1","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":"6ca05729-2c8b-43ac-bdda-c773ecbc0f80","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":"9b45fe24-45a3-4ed9-a2c5-3e48799f1f26","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":"a353e426-5b53-4a43-81a2-8d6684d5528f","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":"c1d347d8-3464-4f86-84a2-203d0481a550","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":"9ccf404c-cd25-4de3-a685-09a98a413e5a","block_type":"box","text":"accounts as of August 31, 2026:","page_number":48,"box":{"x":116,"y":318,"width":245,"height":12}},{"id":"bb608828-ea1b-41f3-8253-ba9dd07c733b","block_type":"box","text":"Philip Green","page_number":48,"box":{"x":117,"y":348,"width":92,"height":11}},{"id":"606b7d8f-2fe6-450a-830d-c98816bcbedb","block_type":"box","text":"Types of Accounts","page_number":48,"box":{"x":116,"y":408,"width":120,"height":10}},{"id":"d49b4e34-7f14-4318-be71-ac68bb3affa4","block_type":"box","text":"Number of Other","page_number":48,"box":{"x":623,"y":367,"width":107,"height":7}},{"id":"456d88e5-efb3-4bac-a0e8-e7973ae12056","block_type":"box","text":"Accounts","page_number":48,"box":{"x":645,"y":377,"width":61,"height":8}},{"id":"07c180f8-5b4b-4ae8-b6a6-8a66ee394957","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":"b60b2949-b0ab-4f0e-ba13-edb66501d7a9","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":"c898a4a3-e1d5-4867-b850-4d888d537bf1","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":"b5c86153-06a6-44bb-8a52-406444491985","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":"076ac5ba-d870-4117-bfd5-4f25d1a6c47b","block_type":"box","text":"indices and certain fund industry peer groups.","page_number":49,"box":{"x":117,"y":411,"width":344,"height":12}},{"id":"bfc791be-9929-4929-ac9f-a7de374c3d9a","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":49,"box":{"x":117,"y":439,"width":429,"height":12}},{"id":"c7339275-7160-4160-bad4-247a3e31a40d","block_type":"box","text":"Discretionary incentive compensation is","page_number":49,"box":{"x":547,"y":439,"width":305,"height":12}},{"id":"eb1db577-1535-4a47-b859-9b6c8896e824","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":"3e2b2a63-c4ab-426f-bfdf-7c6d3c902481","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":"e4e43317-1268-4981-9c9f-1c1161648b77","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":"09a58db2-6d3f-442b-8b82-08c067c83abe","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":"4e386d43-b377-4edd-9d80-5e4d41d5ab6d","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":"ef83c780-3089-4bd0-8155-6f33f0538f3c","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":"b47845e9-b6c5-469b-a9d3-e5e334de709b","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":"74a0c95e-5acc-4ffa-accb-cf4a7007100c","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":"8339a0e6-e213-46fb-8824-65f26aa408f7","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":"9d2caea3-daae-4797-af23-30f31e5adffb","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":"ba633e56-7d2b-4b4e-a130-a37f78480c83","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":"8db4a2f4-675e-4f5e-99c1-9fc17ee7cfad","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":"a9f7340a-4b9b-44bf-a8ca-9f005a957cab","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":"f4f435e2-f2f8-4e92-9c62-3e333fb9a546","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":"db9fe261-12b4-4012-98a2-134b7fc62370","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":"333b9790-e8ca-4753-b95c-8325235f2a6f","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":"f9cdb28b-616a-42cc-839d-cbaa9a60f16e","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":"83be9a30-3be1-4c52-bae8-07f2e7e7c3e0","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":"ed285eaa-b7a4-4a14-b111-f724765de931","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":"e5799015-5cb5-4f5b-a421-6a07c379d8f4","block_type":"box","text":"deferred cash award program.","page_number":49,"box":{"x":116,"y":774,"width":224,"height":12}},{"id":"63ab12ae-537f-4763-acad-bb4f16c2d6ad","block_type":"box","text":"Other Compensation Benefits.","page_number":49,"box":{"x":116,"y":803,"width":241,"height":12}},{"id":"1b6660a5-1095-46e7-991e-3949f4002669","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":"c0ccdaa9-b947-4733-a82a-353b6329ca78","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":"9f3f6b10-60c7-4f56-ba19-d9d4101f6276","block_type":"box","text":"following:","page_number":49,"box":{"x":116,"y":834,"width":75,"height":12}},{"id":"90b6d285-04b0-49b7-b1d8-2c84e171b8d2","block_type":"box","text":"Incentive Savings Plans","page_number":49,"box":{"x":117,"y":862,"width":177,"height":12}},{"id":"1de12db8-7ffe-4845-b125-b8fa7f73699e","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":"2c736669-3d1b-4cdc-855b-19938f28fde4","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":"6af845dc-5cf4-41d3-9375-e679f20ffb3b","block_type":"box","text":"46","page_number":49,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d02149b7-8ae8-4ced-bcd4-21d69cc7e94b","block_type":"box","text":"NM1026U-6049097-49/259","page_number":49,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"20872ecd-07fb-48fe-8865-93f155d99a07","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":"1b2bd3a9-89e9-4134-b763-19543ad73acd","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":"3ad3acf2-6161-43bb-902b-44e9a5dde38e","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":"be5ad8e8-3780-42ad-a39e-909dda5d5aa4","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":"5f38c851-07a8-4d12-b22d-1eb07c43e4ec","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":"5100ed99-5126-47d1-b866-1d48032ec01c","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":"1d41cfc4-b1b8-43cf-a0f1-005eded6377b","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":"74f302ec-695a-41b2-8fc7-e9e5e2dc0233","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":"fd018928-fae9-42d4-8107-a7dd7ddc328b","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":"03f61832-2e1a-4ef8-bf81-7995b2544dfa","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":"0d37f257-2719-4c0d-a32b-f01b55b233be","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":"cb9b2035-c1e3-4fbb-ae50-897e2da2136f","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":"bb3c11f2-4bf0-4168-b018-80bd804f46eb","block_type":"box","text":"participate in these plans.","page_number":50,"box":{"x":117,"y":273,"width":194,"height":12}},{"id":"c44c0249-273e-485f-8527-486362f04bd8","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":"3e22fdd9-31e4-4717-ae0c-bdb11e37001e","block_type":"box","text":"Codes of Ethics.","page_number":50,"box":{"x":116,"y":335,"width":130,"height":10}},{"id":"b463b224-db36-45b1-a0fb-3dfa49304815","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":"d3282b81-f160-4847-97d6-dd937926f09a","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":"ccd04c86-8058-4527-b188-6908c91b203e","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":"3b93dec8-ba5f-458e-b9ec-681f1b6aae9f","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":"c75b6bab-f72e-494b-8466-7039e98be2cf","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":"555ad3f1-458a-4516-a9e7-f76b17afb13f","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":"5c55b560-eb92-49ce-a827-e1624278af90","block_type":"box","text":"e-mail at publicinfo@sec.gov.","page_number":50,"box":{"x":116,"y":428,"width":225,"height":12}},{"id":"db76e553-1944-457b-9b9c-3c5aa37be107","block_type":"box","text":"Anti-Money Laundering Requirements.","page_number":50,"box":{"x":116,"y":459,"width":308,"height":12}},{"id":"c8af4bff-9b34-4191-92ca-fd9bc369fd5f","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":"b76e2cd7-e80e-4bef-892a-5e61708959eb","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":"45454df6-2d14-45c9-aaa0-22d0fa37b582","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":"05642e58-8b74-4b78-b31c-2796c6277f44","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":"bee06e4a-c1d0-4c89-b5ed-00931f86edcf","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":"77fffd7a-fdd6-4c3f-9980-062f5a83c2fa","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":"dfe214da-e9f1-4b3b-bc8c-d44ccafda5fa","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":"aacbe6bc-c5e8-4c99-af40-8754532e15b0","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":"cfbaa3b2-172a-40ed-a97b-2cf70fdc47b3","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":"9169125f-78f2-4209-ad86-a5ce042c7e1e","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":"fbaa4db8-2af0-411f-b639-241efc9459f6","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":"b634833d-8c5f-4f08-8465-5aa57cb5b26d","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":"c4eefe45-9fc1-4b8c-b3c6-e9544f2ed277","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":50,"box":{"x":116,"y":676,"width":364,"height":12}},{"id":"ebee0c63-08de-4fe0-a614-c40e067a5e57","block_type":"box","text":"State Street Bank and Trust Company (“State","page_number":50,"box":{"x":487,"y":676,"width":338,"height":12}},{"id":"0827e2e9-cf50-4bac-a041-864b093ed1d2","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":"ceedd710-cab9-4f91-93e7-f37e2ff36593","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":"01db007f-6440-4cb7-b17e-cbc500dbe49c","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":"28ce3169-0ada-4ab8-883e-23fa080c0271","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":"22d608b9-3143-4938-8788-13e6a483f900","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":"b5140138-518f-47e9-b8d1-6bf85ac2d7e0","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":"f53824b3-a474-414b-9d41-b959ac49e534","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":"d50abf87-a79c-4cee-9fe9-e280b8ba4b83","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":"1c37feb1-3c3e-4960-9bcf-01284e463bca","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":"83358294-b528-4b0b-b3f2-5ee003d84bf8","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":"8801d060-439c-461d-b2cb-6366a9d7acbe","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":"2af86424-d954-46b9-b538-9cea5f77ab6d","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":"fb94a49c-01ab-41e1-a0ac-56b3f3e27782","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":"1f156948-4848-49c9-92de-3e136c599909","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":"cfaa6587-9348-4748-a159-b8b9dc975817","block_type":"box","text":"47","page_number":50,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"5e584d86-70c6-45c6-98b6-132a13a00368","block_type":"box","text":"NM1026U-6049097-50/259","page_number":50,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"36721329-4703-409e-ba96-db7e7b9323cb","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":"0abf08a2-6cb8-4f22-94be-e8795fc1e6ab","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":"cdebf3fb-c637-47c4-b625-373b5dac880c","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":"e16066aa-cfca-4629-ab76-af733016ea08","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":"a91711d7-85b1-4ef9-99e4-e4d9b85c9470","block_type":"box","text":"the Investment Advisory Agreement as described therein.","page_number":51,"box":{"x":116,"y":149,"width":432,"height":12}},{"id":"09562a3c-5bfe-4c03-bb06-301360aca85d","block_type":"box","text":"Credit Agreement.","page_number":51,"box":{"x":116,"y":180,"width":142,"height":12}},{"id":"97288d78-c79a-497a-9e22-293cbd99ab01","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":"cb0fd23d-a067-4e6f-96c7-e73ae6e8e644","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":"5dcc9863-fad4-4ff4-a924-747c63c2f894","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":"7e535f9c-664f-48e6-84a1-a0164a517ef7","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":"ca4bfe95-e2f8-4ab6-91a0-0b4a0b5e6f0b","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":"3eceba7d-50e3-41e6-8b28-818921800046","block_type":"box","text":"extended or renewed (the “Credit Agreement”).","page_number":51,"box":{"x":116,"y":227,"width":347,"height":12}},{"id":"1ab1342f-b72c-40dd-b3e4-d1c1586ada54","block_type":"box","text":"Excluding commitments designated for certain","page_number":51,"box":{"x":464,"y":227,"width":340,"height":12}},{"id":"f79c2133-eef0-4bb1-b80e-2ae4751f64f9","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":"6e19c48e-7b7d-4bb4-83f1-4d79adef34c5","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":"d82f41ed-7d40-4ec1-ad44-7e4b61ad2413","block_type":"box","text":"outstanding, subject to asset coverage and other","page_number":51,"box":{"x":466,"y":258,"width":359,"height":12}},{"id":"e6d921ab-5944-4d9b-b826-1af8d28ad57a","block_type":"box","text":"limitations as specified in the Credit Agreem","page_number":51,"box":{"x":117,"y":273,"width":318,"height":12}},{"id":"93c04f32-4a35-46e6-920b-f1e38a87a764","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":"f770b6f9-8863-4d97-b83c-dabffbf6a108","block_type":"box","text":"meet shareholder redemptions and for other lawf","page_number":51,"box":{"x":117,"y":289,"width":355,"height":12}},{"id":"0110ab84-e163-437f-82e7-313730c34993","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":"05d38b8b-cb83-47fe-a95a-1fb7652d23ca","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":"69279525-6dc4-4c07-8a14-bfe3bf4cb1b8","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":"d2d79947-bb5e-4370-816c-3036faa230fa","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":"127ee85c-c0c0-4fbb-9d6e-96288fe8116e","block_type":"box","text":"legal, regulatory or contractual limits. Borrowing","page_number":51,"box":{"x":502,"y":320,"width":350,"height":12}},{"id":"700c2c64-0e84-4a66-8211-4b82a542fddc","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":"96791bb9-ded9-4183-b034-cc955f079fd8","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":"3fcc597f-1f6a-461f-a67e-f57eee1424ae","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":"28aec108-a596-4ebb-9f51-8f1e04a642e6","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":"8600641e-a872-42f8-9aee-10dc86d3a2aa","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":"d63ca8ac-97c4-4405-b688-cacc70d378f7","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":"b0418e5b-1fab-4a3a-a103-f13c260b8d5a","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":"f62ef4e5-f368-45a3-9f45-5282a138a146","block_type":"box","text":"Distributor.","page_number":51,"box":{"x":117,"y":413,"width":88,"height":9}},{"id":"fa13c690-4415-474e-a05a-48c43158dbbb","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":"76f73709-b62b-48e3-b014-ef72c1a4b55e","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":"bf276ba3-4499-4760-a582-eade061f8c0c","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":"dffa1ec2-d49d-4fa4-aca4-688f8eee9802","block_type":"box","text":"Creation","page_number":51,"box":{"x":451,"y":444,"width":67,"height":9}},{"id":"3ea2b1e7-b68e-4883-8a3a-f5c434d465b4","block_type":"box","text":"and Redemption of Creation Units","page_number":51,"box":{"x":524,"y":444,"width":258,"height":12}},{"id":"e0daaeb0-b868-4e99-ade7-3d2a2e5c265d","block_type":"box","text":"section of","page_number":51,"box":{"x":782,"y":444,"width":76,"height":9}},{"id":"fae3be74-580e-40bd-b9b4-2059b302f059","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":"5046dc06-908f-40c0-862b-535f0f63e4a1","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":"c4de7428-5290-4e51-8e58-9136169c6fc6","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":"704efd72-bb29-47e2-b58c-4c290007040f","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":"cf97d973-cc91-4047-a27e-1d27fb7d73e4","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":"1a6aaad3-63d7-4d74-a167-d3c2ad1f69a2","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":"268357d6-caad-4d57-990b-a93f974207a2","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":"76b658f6-ae37-470e-9c8c-dbec2982e8f3","block_type":"box","text":"the District of Columbia.","page_number":51,"box":{"x":116,"y":568,"width":183,"height":9}},{"id":"3697615e-fa27-4a55-b727-3d7c33c1a4fc","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":"d00b16f7-456d-415c-9ee8-a309bd9cc683","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":"5c33b097-3c02-475a-aa63-7fddaa8ca9b5","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":"c4e0396d-114f-44a0-b505-60e524e047df","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":"ffed97fa-c563-4804-b2c6-5c793c7fabc2","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":"cccd0107-9eed-4ae4-b7c3-0ae035e08d35","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":"9e9d9254-c9fc-49da-85a3-8ddba9c92682","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":"eeda742e-2f17-4c18-9db7-d99a32cb06e4","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":"54a1e268-8de7-462c-872e-ca423e242bbf","block_type":"box","text":"services organizations.","page_number":51,"box":{"x":116,"y":738,"width":169,"height":12}},{"id":"6a5a5b1b-c1dd-41fa-a790-ae07183ec376","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":"e2bc840a-40db-44df-83d4-5fb5192c88fc","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":"35adff45-944a-4fc0-80bd-06dcd940311f","block_type":"box","text":"promote the sale of shares.","page_number":51,"box":{"x":117,"y":800,"width":201,"height":12}},{"id":"0294167e-a13e-45cb-b533-611dcf2a9659","block_type":"box","text":"Securities Lending.","page_number":51,"box":{"x":116,"y":831,"width":154,"height":12}},{"id":"e995ceaf-6e7c-47cd-bc28-9b4f5cc589a2","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":"adb9bbfc-d237-4703-83cc-e5ed1a3308fd","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":"f9172784-baf3-4907-8912-d7722d3c1ba2","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":"904a8055-65ea-4ef5-b65d-6ba7aa0de348","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":"d47d5cbe-5cc2-408f-a9f3-b0232218b376","block_type":"box","text":"48","page_number":51,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"a8ab07db-2009-4e03-9d25-99d6b5f4ec9b","block_type":"box","text":"NM1026U-6049097-51/259","page_number":51,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"39af2c96-7563-429a-9286-01331f8075cc","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":"dad60747-837e-4b01-ab9e-668bdcb9b6c2","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":"8008e4b0-32c2-41bd-ae4d-47571c0f62ed","block_type":"box","text":"with guidelines approved by the Board.","page_number":52,"box":{"x":116,"y":118,"width":294,"height":12}},{"id":"340bbcc3-4f36-4d9a-8868-0fc8db727051","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":"4ad39484-b3f2-46a3-bb82-c7887bb9f256","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":"447592be-2d9a-47a6-ae08-da67f39e2b22","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":"14416f3d-0f23-49c9-880e-ce87f3635e27","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":"881177ca-a8f0-46ff-b8d8-d6a0a192667e","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":"922dbd3b-1e66-44a3-8028-6cabf8093422","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":"9c154f4f-a9f6-414a-8858-c916fdc1615f","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":"97db1505-8c95-440e-b9ab-b33cb3ed080f","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":"f42d5e1a-7010-4bc4-b03c-cf08e0c4172b","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":"16193a89-fc00-4040-865f-d3c8d418cdae","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":"7257232f-c8a2-436d-a56b-87cc7262389b","block_type":"box","text":"sales load, distribution fee or service fee.","page_number":52,"box":{"x":116,"y":302,"width":309,"height":11}},{"id":"749a5d70-0388-4110-8e38-3e5ea7e14954","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":"3bfaae28-da65-4313-8adf-f300b999b4ca","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":"0f0c9ca9-7b55-496b-9aeb-9a6af36dd982","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":"663830c0-2ecb-4970-b370-f7e7c1553d26","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":"53930716-8bd4-47da-b4ff-f513fa150445","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":"2945ad0f-c957-4fdc-a60d-4a3fd703c44e","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":"8b188e39-e591-43ec-ac40-f4ab1bf02237","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":"e5b25004-c5ea-480f-8590-5ee2125e21bc","block_type":"box","text":"i.e.","page_number":52,"box":{"x":614,"y":424,"width":20,"height":9}},{"id":"4f83d1e7-4a6b-4f91-a792-b2863266c792","block_type":"box","text":", less than one basis point","page_number":52,"box":{"x":637,"y":424,"width":198,"height":12}},{"id":"1d3fc87b-808b-4a3f-89b5-0870eb5740c7","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":"f4b0d81a-9b5c-4db9-9b43-f87117403eb4","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":"83353691-4305-4bd3-8e0f-f8e9d9bdfe83","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":"4d69feee-6ba2-4937-a4fd-90eccfd9870f","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":"706fcbca-3c85-4377-90c2-6ff59535ba03","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":"c0277ac2-8d2a-43d9-9565-c961780e0bb2","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":"d9412595-76fb-4f5b-87d6-514f1a185237","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":"3301a6db-5abd-4e04-94b1-e34bbb5b044a","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":"4ee1d6b6-e5e6-4728-b2cf-c9ed26a4fc16","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":"ffc154b5-6ce8-4139-bbc4-bbeb26941bb8","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":"089a8079-7428-45cf-af48-e106690cd940","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":"d6e76fb5-4dee-498d-ad57-cd6ba8d211fe","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":"6b7caa15-9eeb-45d9-a0a5-11cb8c12136f","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":"14fa3002-2b67-4060-bac9-0167a2b181c0","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":"40fafb2f-5925-4bf4-94f3-2918450df989","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":"e7d57f78-ed2e-4671-98b7-010522580900","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":"5c631656-71a7-4d81-8157-53f7fdda9aa5","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":"0b3e81e6-6f0a-4c7f-b6db-45ff5bb0a4eb","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":"509bec5b-8314-4992-8412-3b69e1bb3e9c","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":"0e33d9b1-925c-4d5b-8e2d-31e028b8cddf","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":"7bc8a596-24b4-419b-862e-5782e9cb960e","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":"d71d04d2-11c5-4d17-98cf-449889cfb846","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":"6b42dda6-e311-416d-b292-19f50babec47","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":"27b84c76-de7d-4969-8ef2-64500770b5b1","block_type":"box","text":"Payments by BFA and its Affiliates.","page_number":52,"box":{"x":117,"y":862,"width":280,"height":12}},{"id":"8632b8aa-8ab4-488e-a0cf-91479676b791","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":"76f81e3f-e38f-4d81-864e-6f4422e601c4","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":"e4c139ed-b655-49ed-9f07-16f85bce3fec","block_type":"box","text":"49","page_number":52,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"afc7378c-9a9a-488a-9cac-979a63f951c9","block_type":"box","text":"NM1026U-6049097-52/259","page_number":52,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6177f90b-f70a-49a3-a22e-2f9e40fe300a","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":"8fbe70da-97c4-4df3-a4de-7ac90ba92278","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":"8efe68c1-8c11-4432-b6f5-9cce8b52d6de","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":"59036ed1-f0f9-4e2a-a86b-150399da564d","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":"5d48356e-c0a6-4018-8241-d3081fc5acd6","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":"d6ccf2b9-9f26-4799-a5c2-489c01f501be","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":"c8abf73d-e968-4d30-b87b-bfe5cab8a623","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":"887c7e81-aa0c-4246-8deb-cd72636d0f73","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":"84045d32-9c68-4d6b-9e91-85825c1d9658","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":"238690b2-9fda-4574-8040-6f2e590114ed","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":"eca557fa-c1eb-4169-92e3-45bcada85f72","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":"0f018423-7236-4bb2-9236-9e4f1c86f416","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":"ed7063f2-6712-4de7-a8a2-f447e57f329d","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":"42bb7ec7-99ea-41e5-8508-df61128b02ed","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":"323730f4-5277-4a4c-8029-cc55ec73b888","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":"1535131a-6760-4761-885b-25156e3d0368","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":"7b40f38d-831b-4417-92c7-f1e9e35821d0","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":"e2db2bb4-f9f0-435e-ad92-1c556eb8ae83","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":"d035bde2-a986-402f-8345-0e783f4bf457","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":"06ddf394-6b36-40c7-9456-f11aeed63649","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":"8338a4f0-cf83-4ba5-ac84-b04efb9aea3a","block_type":"box","text":"sometimes referred to as revenue-sharing payments.","page_number":53,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"bfed46c3-e766-4b9e-b80c-d267a2cf3f17","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":"320d5c4b-5c35-48f2-a6d3-3b7c48d8aed8","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":"34141d65-446f-4df5-ac4f-5ad6f6d3e3a8","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":"707c8018-a2a3-462e-bce4-704581463520","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":"5f3f79e7-bad8-4112-8f6b-c8af23bd6c10","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":"fafcd3a2-46a7-4a77-947a-f95b2e358177","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":"b25edbac-2c2f-4c4f-95b5-5b63049e7f53","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":"878de5fe-0a5c-492c-85d2-e24c2398fd42","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":"78bbb8f6-7b66-4e27-a927-a13869be37f8","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":"80df3b3f-b7b4-48f8-aa83-52aea89fba7a","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":"c46e350f-0720-4344-81c9-bee220bbb61e","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":"eaa77c21-a2ce-49b7-8e70-66a7b97192f6","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":"c4e7cdc0-6b12-4bc7-b02f-91c6be1584da","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":"8289d802-3373-406a-8117-476b95075f52","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":"6263194d-d299-4b2e-9d2f-938787ce8499","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":"62c8f2e2-437c-4bd5-abbd-e6c39d15a316","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":"934cffb2-2a5b-4eee-bee0-0ca2bd31a242","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":"91edaf86-3e0d-41d2-a064-ad8ce45f6f1b","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":"6a3f5fa2-5b19-42bb-aa8e-3b7c7070df17","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":"4714f114-ab1c-4e9e-8e3d-0d13874f58c4","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":"c4225c13-aa78-4544-baab-912d76c6c885","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":"334a4faa-4ec1-419d-93a4-3f28adab1fc9","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":"c6ba0f8e-ccc6-4a1f-85bf-450a606893ce","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":"b088bd8c-e371-4338-b3e8-9d625d711ad2","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":"522981bf-9a84-4af1-be0b-81f54612a8e7","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":"fbc4fb1c-578b-45d0-9869-6e6bd2009777","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":"52ca1d1b-cabc-4620-bcbd-7816ebceb2ff","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":"faf0baf6-06a5-4576-a8c9-0ce8cc19b51d","block_type":"box","text":"50","page_number":53,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2995af62-1e22-4d61-bdc1-94c28ed260f5","block_type":"box","text":"NM1026U-6049097-53/259","page_number":53,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"d57cad8e-4996-4526-b83d-5555be93d806","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":"3e37b917-0bfd-4193-994e-0f5230a8bc9c","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":"1d7634bb-16fd-4569-a02d-62aae9f36000","block_type":"box","text":"the wind-down period.","page_number":54,"box":{"x":116,"y":118,"width":169,"height":12}},{"id":"681abbde-431d-4d57-8320-0a28abfe6de5","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":"ca239450-93b7-4275-9255-e6c4a3d4cb49","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":"9c5ac831-aabd-41a8-b52d-11cf635bd179","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":"babc7569-735e-4323-a239-b0e305a75f93","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":"1bc22702-e79f-4f02-b439-cecf0443f230","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":"a10e97b1-a7a3-4e90-b866-779438210b1d","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":"53566d5f-f054-4209-bd9d-b4b0c746c7ec","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":"2bd0c973-b6f9-4db9-b487-63f401b638f0","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":"9d18ecb3-6871-48a9-9306-381104a0b092","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":"3ade415e-29c9-4415-be64-a2edc58b346b","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":"c0f784b9-54bf-44db-8f6e-a0c74ce0310e","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":"16f4fe56-9bf0-4f8a-befb-8cc88ce77d8e","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":"2b4b5d36-7e3c-4858-bc26-4fa51fffd160","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":"ed526eea-542f-4315-a18a-01d6fb4c8903","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":"2b17139f-20e4-40e5-9b03-95d7aa8181a7","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":"a012f0dc-bd00-4b9b-a524-3e6abfd1a9b9","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":"409f7b92-df0b-4e0f-a16b-11385256269c","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":"22813263-a32a-4c18-9d0c-b0fbd42ecccf","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":"5a0dc1f2-278c-4888-a6a6-988e7708b445","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":"44d02ea9-65ce-4bed-b0b7-7e639155eb09","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":"6033262d-3976-42f9-be12-b4ab63ec5e63","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":"ec8c272c-77e6-46c2-b71e-c8c3c84bff90","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":"eb65264c-397f-4df4-ad7c-23471d068288","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":"b93edd0a-6fd2-48b1-a931-e88b835cd2d7","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":"12f8f5de-daf0-444e-bef3-47f609ac70bd","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":"50f197cf-51a6-44c8-a56e-a65bdac7c642","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":"539147f3-5b71-4575-b544-3fa911c3b446","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":"c56524c6-8455-4875-99bf-3a8fd04ee6c0","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":"6f02fa39-5c95-49c5-8d38-ab7a11401f62","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":"51ef8e29-948f-451f-bf0a-18c5d049a338","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":"7c75ffe7-1bdf-4679-a579-7132ecc3469a","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":"5fdc2342-ab73-4b75-aecf-98ea86e89e71","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":"3dcba6b4-abed-4357-a4e5-ed7daa1cac60","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":"ce68bd02-8eab-4c4d-803c-ffda87b5a771","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":"c7e3a0cf-669b-491f-9249-dd65afa5204d","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":"272a861a-ab7b-41a7-8e5e-ea70bc98f49a","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":"8f3a335f-6a94-4901-aa3d-bc7c8c8d0c7e","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":"f38806a9-cfa4-4505-995a-5741a5f9a395","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":"12971768-004f-4e89-9d01-009b00737b1c","block_type":"box","text":"Please contact your salesperson or","page_number":54,"box":{"x":562,"y":738,"width":282,"height":12}},{"id":"0ad3a5ed-8e97-40fb-be83-1575198b153d","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":"db72f063-4639-40f7-b1b3-bb2ab42ac76f","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":"141a47a0-a5e4-466c-9898-6c8008bd9669","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":"959e63af-20e1-4b19-92a0-0e2c4dacbde6","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":"ff9c4b36-08d0-4a97-9b14-e7d78ce2f8f8","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":"c2e90b7a-3feb-4f86-8081-28edf3f1664d","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":"c407610c-d5b0-418b-ac96-bfc5bc0dd1c5","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":"8d3d9654-7ae1-4d50-a0cd-61d08ea81228","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":"bf1cbe6f-94b3-4bba-8d39-2f46b85b6710","block_type":"box","text":"51","page_number":54,"box":{"x":491,"y":909,"width":14,"height":9}},{"id":"5af440b1-0289-47b9-a3ee-38ae40216ebf","block_type":"box","text":"NM1026U-6049097-54/259","page_number":54,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1e268af6-9cd0-4066-af74-d26b9b18bc45","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":"fe4b4a30-a9b9-49e6-93a7-e0c63afc47ff","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":"cd5c1ebc-5e78-40f6-80ca-73bbbe988785","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":"17b280e0-d0e5-4578-ba1d-8fc070ddc721","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":"689a75ca-a4f1-4a6c-9611-9bdb24f3c295","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":"eb703600-d2c1-458b-88d2-b3f375d05edc","block_type":"box","text":"BFA may also participate in such programs.","page_number":55,"box":{"x":117,"y":149,"width":329,"height":12}},{"id":"493f172e-cf07-4c2f-8107-b742c704cbad","block_type":"box","text":"Determination of Net Asset Value","page_number":55,"box":{"x":119,"y":202,"width":605,"height":23}},{"id":"5e14118d-1e6a-4741-bf72-2ca9c50c928d","block_type":"box","text":"Valuation of Shares.","page_number":55,"box":{"x":116,"y":255,"width":166,"height":9}},{"id":"a6be7068-033d-400b-a657-6f1bced2f6d6","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":"dad8e5a3-bbaa-4dd6-b09e-26308cdc1d96","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":"f2f198fb-bab2-45f7-bc49-ea4196588725","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":"b7d84406-6c03-4804-939f-d5000e47c1e5","block_type":"box","text":"Equity Investments.","page_number":55,"box":{"x":117,"y":318,"width":162,"height":11}},{"id":"1303caa2-938d-4620-a7f3-ae93ca2b2160","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":"61d22edf-f51c-4164-bb9c-3f24f8252a3b","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":"c7ce79a8-68ec-4fa0-9619-9fc4ceefcac5","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":"24074bc1-8aa4-44eb-b8b7-aeb663380fe6","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":"99b6dffc-108e-45c1-8d9c-dfdc1a89ad7a","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":"4c0c2de2-b2a6-4a40-9721-39ff4b988743","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":"0418ad2d-20b1-42e2-81bb-ce3886c8c15d","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":"1b4fcd18-fa02-41c8-a10a-ea428fdd2f93","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":"c8381786-de54-445a-aec9-3336dda69f3d","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":"30e95ab9-8e2c-4c89-aa30-e9159debe642","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":"0b129040-be0b-4252-839e-ab7612548c6d","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":"bfbc9dae-1482-4d79-80a0-5adbfb462425","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":"0f01e18a-4e7c-4a1a-bb48-6a0e0c008e92","block_type":"box","text":"Fixed-Income Investments.","page_number":55,"box":{"x":117,"y":536,"width":214,"height":9}},{"id":"0762abeb-437b-493b-937b-9407de081db9","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":"19bc37c2-8e1c-41ca-b6d5-21ce4c874b32","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":"94916fed-c110-44b6-99ef-4b43cf84bd6b","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":"c93b764e-5203-48f1-bdac-a2b2c7735751","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":"3a84b212-49f3-4be8-bbf3-4184ff45dc03","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":"12ea65b4-7672-41a5-96bb-c5eb9e97306d","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":"2ae42c23-5ee1-4963-862e-6e92e0e2bec5","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":"2a1f3cf9-0337-45f7-bb0f-fd185a05fdfa","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":"a269631e-a952-44d5-bb02-67b79b2620ad","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":"8dba777c-c586-4899-9aff-06cb9ee627f1","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":"672871db-0765-49c5-aea6-ab91de9a8f76","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":"dc7aa4bd-de50-44bd-9fae-8c997194dce1","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":"003e5378-98b1-4e3a-bfcd-452c278970fa","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":"8bedec86-13ad-46db-85b7-47625b9ac014","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":"e748528a-9c4f-4ce3-936c-05cf0f7ddf3f","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":"c0f2e789-b60e-4546-aa3c-d9cefaee305d","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":"4575ad17-bd36-4a4c-a845-4ad2061e28a6","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":"05bb39fa-b0dd-4c4f-93cc-1c39ebd0832b","block_type":"box","text":"tranche.","page_number":55,"box":{"x":116,"y":799,"width":59,"height":10}},{"id":"ba4591e1-e5ab-44ed-be24-cac51f3c220a","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":55,"box":{"x":116,"y":831,"width":379,"height":12}},{"id":"4dc97bfd-b333-4c58-a460-483e2151393b","block_type":"box","text":"Exchange-traded equity options (except ETF","page_number":55,"box":{"x":497,"y":831,"width":342,"height":12}},{"id":"1586036b-615d-4c9e-bd1c-009a6af006e4","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":"8f120fe8-c9ea-4abf-8927-f5fbeea016a2","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":"423f903b-055c-4b81-91ab-e34aacf19f3b","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":"5c6e2239-aaa7-4f1a-913b-53729690d22f","block_type":"box","text":"52","page_number":55,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"8af8c72b-c5eb-4a38-9e28-7982fda86dec","block_type":"box","text":"NM1026U-6049097-55/259","page_number":55,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ff7f81d8-1223-438d-affc-a950645f9472","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":"0bf3a630-e020-496d-9cbb-f84d5fd7e779","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":"b8fb167e-abe5-4224-a44a-81234445d2e2","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":"93fd47be-430c-494f-93b8-fd99f73862cf","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":"cbad8475-615f-4e44-86cd-d5b143d101d6","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":"dc5c171c-0b7e-4b4f-8d54-1b3f6516052e","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":"862b58b5-52a2-49aa-9d36-5349cbb6b1e6","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":"7aff552e-3de9-4c4c-9714-c1f075a7b856","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":"54895929-0c47-4bef-9b55-611f0fdefa08","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":"07795463-83ba-44d4-9d63-fbc8470a0b63","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":"0cc49658-62cc-4209-bfa1-6bf3dea1edf2","block_type":"box","text":"Valuation Procedures.","page_number":56,"box":{"x":116,"y":242,"width":170,"height":10}},{"id":"edc29078-eb0e-46b1-a30e-4f7afb9a0198","block_type":"box","text":"Underlying Funds.","page_number":56,"box":{"x":117,"y":273,"width":145,"height":12}},{"id":"c2515ce7-7793-4c85-8d44-77593f287108","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":"9fbc236a-0108-4830-9c7d-8ac471dd1a3f","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":"b248041b-c7ec-4674-b393-98df6d981cdc","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":"80611176-26d5-4cde-9088-723cf1b13464","block_type":"box","text":"General Valuation Information.","page_number":56,"box":{"x":116,"y":335,"width":244,"height":10}},{"id":"968606a6-2165-45cc-ba0f-a653a2c73078","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":"e6ef9021-235c-4d85-80c0-f6ea420a717a","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":"32e0a22b-062f-498b-afc4-629a874a137f","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":"4afdfda2-e7e8-4092-8e84-ea65d2efda01","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":"12aa6e69-de24-4586-b6f7-627eeef6173e","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":"3619ef36-4d67-4ab8-925f-b11740cb6326","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":"a41065a9-aa74-426d-886d-8027ffc611ed","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":"4c3a989c-b2ea-4532-83ce-3fe9e626f496","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":"dcb5b964-ebc1-4986-89e8-298f76e4e529","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":"da7b0330-d9e6-45fe-a45a-5f46cbdc36c8","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":"ff4605c9-6d36-4f62-9031-e402b06f47e2","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":"9aea1a1a-28ce-4519-9fc0-9aa6759ec430","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":"c1c1d69b-40a5-47c2-bf08-4179d3afd62c","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":"53ee2042-f7f5-42cc-b862-b92e61585759","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":"5e330c3c-cd3d-4190-8ba6-4fb10ab70b19","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":"d7fcb4ca-a5fe-4c5c-a56b-2f7069df9dfa","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":"2c437edb-6116-466c-8008-fa6565485fa6","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":"a36023a5-f6f3-4873-b59b-656f3645ff87","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":"942b538b-0182-41ca-93aa-53daefd84aef","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":"79b0fb5b-ba5d-49c1-9ff1-e95735da2b7e","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":"23985347-9c00-47b7-8465-7697ff103c11","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":"1124fef9-ec38-4a1b-b732-f4ba30ee2de2","block_type":"box","text":"Fair Value.","page_number":56,"box":{"x":117,"y":707,"width":83,"height":10}},{"id":"61cb4aeb-815c-4310-aee3-1d27e1a31ad2","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":"6a7fa1ad-9699-46ce-a679-5434de013982","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":"6c3f9991-cf12-4e99-85b9-fea9b191cd6d","block_type":"box","text":"BFA in accordance","page_number":56,"box":{"x":117,"y":738,"width":140,"height":10}},{"id":"b3d0d2cc-b671-4609-9342-09ab40db4179","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":"4822d585-1e43-4f22-8761-b5ac61533e10","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":"82c2bfdf-5fa0-431e-81cb-bfe069efed0c","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":"8e699faf-317d-4ddd-8c10-f266e7fc4db3","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":"28be8d52-6a8b-4c75-9f23-6ec1403c9808","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":"7265ffe5-7591-44f2-ad9b-2a9e77c7fe31","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":"9473fdce-fe68-454c-8670-03027bcca56d","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":"b46d7fec-66a5-4dae-89dc-04f03f2bf978","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":"d47d1ec2-eb86-4a5d-9d40-5875de34d9fb","block_type":"box","text":"53","page_number":56,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"eaab717c-84ac-4e64-8b87-ad558682f690","block_type":"box","text":"NM1026U-6049097-56/259","page_number":56,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"a520a209-31e3-42b9-b35a-21dfbeb42632","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":"d22c2c93-dc10-4f95-a7da-3692b8eacf54","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":"247363c5-9450-4bf1-9b05-ab6de566aa79","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":"36f1f63a-1a59-4399-8ab4-4b2b98dd6065","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":"88073ef6-208c-43b0-b970-a57774dcf0a1","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":"3cf7353f-46c6-455d-b3c3-357f1175bd10","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":"10c513be-9f04-4eeb-a807-e1d45f0da85d","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":"7a3ebccc-eba7-4288-ba6b-a4c9e6d38b76","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":"06f76dea-598c-4506-9bcd-206545ff8452","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":"0d54375b-d7b1-47f2-a341-2878e682aea5","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":"6cbe381e-019c-43cb-a8bf-f066c22613f7","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":"6a2db153-ea7c-4286-b5f1-139330c13bc7","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":"2157da48-78c5-4c79-b582-b1b4f2c00905","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":"ab2ed8cb-0e52-4ce0-86f9-c03cd7adf444","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":"11d6cdd0-c1a6-4b57-a7c3-be4689368fb5","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":"26af14d0-e155-40d5-ae80-723feef60560","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":"2ed564fa-f061-426f-a70e-b7a6527b4a62","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":"baede716-167b-4722-af19-00d393e35f96","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":"81f35058-2ab0-4366-80ff-fd5434b1cab2","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":"b014ec87-08db-41ca-9d54-4e139d731c97","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":"0b300ee0-41cf-44ae-bd02-a4eda2df3074","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":"f8a69b44-4c29-490c-82b5-30477c920fe0","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":"ef628e2f-a4f8-4eb3-9c48-587c5119c47e","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":"4fc46201-be53-474d-b26a-9c12c823d988","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":"1552fc55-44b2-43d9-bb4d-aa9796cebff0","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":"22415634-4193-4d25-aaea-92f606661996","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":"30ca2849-f127-4008-a5ee-424056fd70ef","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":"0acd9a77-6cca-47ac-802f-a120985834ea","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":"15ad3d81-23c1-448a-a44b-4b480a1ac122","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":"69c5e9f3-7d4d-4905-82f9-9a664bb37d28","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":"8e2af343-a961-4255-96a0-c111fa283757","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":"3e7670d1-e63f-49eb-8308-500cce0783de","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":"cb8c6152-cb63-4c58-a4bc-16200550e030","block_type":"box","text":"fair value of an investment.","page_number":57,"box":{"x":116,"y":630,"width":206,"height":9}},{"id":"e544a225-97b7-42e4-8ecc-203177e1789c","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":"72ec97ef-7914-49d1-9b87-67f7f876b706","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":"9bb4c150-8595-456c-9822-156d272ca8f4","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":"59c6f859-e2a9-461d-b315-a1a826f686c2","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":"a7b69938-c89e-486d-9ec2-2f3c7038268f","block_type":"box","text":"the economic interest of existing shareholders.","page_number":57,"box":{"x":116,"y":723,"width":345,"height":12}},{"id":"5752ae44-c76e-4f2d-a763-b3e41bc5b0ba","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":"8cbc0701-a999-4cd6-b1e3-b2b5c2a8410c","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":"3f224f26-22b3-4181-b18f-07e3fc2dbc26","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":"de3c50c8-6537-47aa-9176-031db30bea36","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":"1618140e-4707-4894-84ba-d50883473b0e","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":"8a45b331-c270-46ee-ae91-2629b96b9a94","block_type":"box","text":"requirements relating to fair value measurements.","page_number":57,"box":{"x":117,"y":831,"width":374,"height":12}},{"id":"16c2868f-95c1-4ef3-bc53-e14f4b63cb57","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":"d103a1b2-e554-424a-b54f-3149730562e3","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":"3bc12762-b7a5-4fda-9a28-6b24e1194219","block_type":"box","text":"54","page_number":57,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5efe9846-fd89-4a35-893a-3578656bd689","block_type":"box","text":"NM1026U-6049097-57/259","page_number":57,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ca752e6f-2ba4-4412-be54-20f5c6ede099","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":"e598a901-a06f-4301-95ae-807c428863d6","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":"50755c83-6496-4311-8b33-a53b948dae9c","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":"1db9af5e-d12e-43e3-a773-e80d376b584c","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":"8561e558-6838-487e-b230-a4870519b1c2","block_type":"box","text":"value.","page_number":58,"box":{"x":116,"y":149,"width":49,"height":10}},{"id":"2e169859-301a-4f51-941a-7aee4a4c6c9b","block_type":"box","text":"Brokerage Transactions","page_number":58,"box":{"x":119,"y":202,"width":437,"height":29}},{"id":"da58738a-5001-451c-987f-6b8b3302ad73","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":"b5584c57-c7ca-4b9f-91e8-20f0cb3c1fee","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":"b3c55a1e-6bf6-440c-8f0c-e0cfa9cff349","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":"9b8a583f-e023-42c6-9076-c394f94a629f","block_type":"box","text":"account certain factors set out below.","page_number":58,"box":{"x":116,"y":301,"width":282,"height":10}},{"id":"4c09eb70-ebeb-4319-9385-52534ac46b47","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":"512430e6-7cc6-4f29-bce1-153a0ff8322f","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":"2ca91cbc-9fe2-490b-99c3-93d27459e3b2","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":"6f7a9dc1-68dc-4399-bffd-e29812eb26fd","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":"236ed59b-5558-44f7-b4f0-8933906aeeb0","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":"cda2ce5c-a8a2-400b-a8b9-4802973eb77b","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":"ce637caf-fcf6-4b77-aeb3-25f3b2587624","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":"00e9392b-0894-4571-a75d-6c8d0913f731","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":"a91051dc-4114-46e6-998a-2061fa3763d1","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":"4e6175bf-57fa-4227-a3b0-60f1b7fc7509","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":"bf0f7f92-489e-4251-a441-b827bcd2e592","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":"76bc425d-7215-42c8-b422-894bfed80233","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":"1fc3f65e-28f8-4fb1-a6d8-a2276ec9e943","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":"8bd9525c-26ef-4879-b349-6c8aa05b260d","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":"0f131b0f-69c6-48fc-ae19-f1dbba807584","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":"2bb8ec35-230a-4ba1-8469-6c8361c0721f","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":"3da0c181-1360-4b28-919c-ca4f101f5687","block_type":"box","text":"operational problems of a broker or dealer.","page_number":58,"box":{"x":116,"y":597,"width":323,"height":12}},{"id":"320506f3-704d-46eb-8ce8-bb0f5943e957","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":"4a4e953b-9628-4905-9a54-eb75bcb4c854","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":"6ff7a24a-d01b-49eb-aed3-32f6e6233424","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":"788a62cc-3c89-4ef0-90a1-75747bbab21c","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":"190dbea3-2fa1-4446-aede-0de4b901eba0","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":"bf054e9e-6f64-48f7-aeba-2750230636d0","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":"c28953ce-aeca-4fb2-8a24-7af4cd97e5f6","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":"f66667e2-e4b8-4728-9ba5-81927918f2bb","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":"412b1e27-1202-42f0-a9f5-f26d7d374dda","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":"22a22455-4399-445c-b7cb-d5e5de9b8c1e","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":"80bf4db3-823d-4f75-a3f8-354c6b0ea0fe","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":"b995f621-d2df-4c5b-a9ac-5294e0c6b2a2","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":"cd71c59f-a184-4a22-a081-b71c8f4522c5","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":"82c64ce8-ec72-4858-bf12-39d2e04bb1ca","block_type":"box","text":"Fund.","page_number":58,"box":{"x":117,"y":830,"width":46,"height":10}},{"id":"935fd55f-8231-4b7d-beb0-a6e9372a1cb6","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":"89f14482-d233-4e70-bb3b-dcc266c7573c","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":"c656aeea-eab9-46fd-8496-c4d2cfd16089","block_type":"box","text":"55","page_number":58,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"83fe720c-9e83-42b2-beea-4d874aa60095","block_type":"box","text":"NM1026U-6049097-58/259","page_number":58,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9072d68f-25b2-4a3b-8935-4baf06049f4e","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":"f4847b32-3ccb-485d-9153-629299860aa4","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":"7a190d7a-81f2-42e5-a5b5-119203eae209","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":"82bb9437-9973-4a15-a194-aaba6367b70a","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":"b5c28640-2fc5-40f4-adf1-3442e299dc44","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":"55bf3b75-ead1-4b3e-9f90-8194b9a75bff","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":"9d2f6512-1df0-4419-923a-6f53d9b6ba53","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":"69096586-81b4-406d-84ca-c70e3316b63b","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":"65f0a41f-474c-4dfc-a69f-344fca452df7","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":"7a1561a9-f293-4c3a-83ae-7571b9953305","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":"824ebfb4-04ab-47b7-acfe-790ff3aab91f","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":"e1567985-02d4-4755-ac46-37d3607aa5c5","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":"a0860623-71f5-4926-baa5-913030fef99a","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":"f15e65a9-7a66-4743-b600-0866ea9b5735","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":"7b1c9f59-78da-4aeb-9585-3e1dfa2feffc","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":"80cb49a5-12c4-4681-bb05-31bf44f01845","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":"9bcf3d7c-0c98-4a41-b986-16994502e4ec","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":"2893c485-e29a-424a-b616-f2c2dc293e01","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":"e9a6327d-b704-46b7-9874-785c7ee10683","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":"e5f5ddec-f2b2-4f54-8e61-42f1a70c56b2","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":"3d0e48d2-51f5-4606-826a-f3a760e5946e","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":"d2fe38c9-6f21-450c-9262-7efacc6c0d11","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":"fe1d1c26-c5ca-42a7-b7c3-962fcec6f6da","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":"1e48fff5-23db-45e1-9694-051ace8bda36","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":"7a114104-a1be-42d0-9619-de738c108673","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":"01e0124b-87c0-4b63-be66-f6d1541cf602","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":"33339ff5-5971-4a90-8e10-117fb2ae71cd","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":"5b6512d4-c550-4534-948c-5a3da00b8544","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":"58aefc80-beb9-4b64-91ab-22d2b01745eb","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":"bff4edd4-beeb-4e88-bda8-7bb741020ddd","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":"37d9b73b-4d33-4b68-85f9-cdea9f38b232","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":"43f06a90-c80f-4d23-acdf-0f0c788d31d5","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":"51a10834-5324-4b03-9ded-a6f15427f843","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":"1753e909-1f84-4135-b467-9f31dfe9357f","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":"6df78e1e-29eb-4531-a74b-23bdc3448d55","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":"11203722-4a4f-4e3c-8e9c-89da8474e45d","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":"c9647bae-e1df-4100-bffb-3f867b7d1cf2","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":"513eca29-03e4-4786-8ed3-c2d9cabff777","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":"bf72ef97-22ee-427d-9f6e-6d7617adf088","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":"f6b04844-6741-4fa6-afc6-d692f54c5d84","block_type":"box","text":"their research and non-research uses.","page_number":59,"box":{"x":116,"y":754,"width":283,"height":9}},{"id":"fd11012c-6e0d-4fd7-8766-a3c6f04d44bf","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":"846b4de1-4dd9-4a60-bffd-2e1457db38d3","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":"a50b84f3-4bf6-46c1-8199-9c969f5cc169","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":"dbdce834-9af8-4ac8-a406-e073f8ec5096","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":"2edde792-044b-4841-a1d7-56df17af4dcd","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":"2b2ca519-9c1d-49a9-8816-207d8e2276ef","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":"486a70d3-53c1-451d-8123-42d1436c4d16","block_type":"box","text":"56","page_number":59,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c5000227-967f-4f00-94f2-32bb943c7b04","block_type":"box","text":"NM1026U-6049097-59/259","page_number":59,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"dd0843dd-7c1b-40c8-a4c6-8398a2972764","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":"67fd94aa-39be-4c46-885a-3aa34a7b6c3a","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":"a9677166-51d1-4b83-9ef5-b0788359d920","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":"54ff06fe-b408-4198-9d5e-2ee820f76186","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":"2f0b9da8-5def-42e0-87c9-09e8f4bf1d3e","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":"add4c1a0-e0ad-481f-9b51-ef7d8b7501f3","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":"ca217931-a04d-4b65-8ea5-2712d0a50f1e","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":"123f72ef-a610-4874-ad61-57698d1d1aa9","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":"78997db8-65b9-40c1-89be-314be9cc028c","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":"1ba10d1c-7566-4ad2-b318-f0f67271ff3c","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":"ad14d66d-aa11-4413-a874-191dd400977d","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":"382575c8-824c-4e5e-b90d-ef5c05142b9b","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":"fff56a5c-9d05-42e5-bf33-414e0cb2bac2","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":"a10e7e03-cde9-4367-8e33-1ba5e3960560","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":"440281f3-0722-43ba-9d07-58b99e5eeab6","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":"651cc157-7b94-4519-850f-99931b4eb58e","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":"cc9be29b-b5d2-49a7-9f1b-b4653a5dac7b","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":"f2332bf9-c4f0-47b3-b7bf-eadb83455007","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":"97285f17-b956-44ec-8a06-9a92840ff77e","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":"5728670b-1351-4fc0-b46c-b15cf5bb2c39","block_type":"box","text":"transactions.","page_number":60,"box":{"x":116,"y":408,"width":100,"height":10}},{"id":"3e46ba53-21fb-472d-a341-d80a4852822f","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":"925a6007-d389-4837-a4e8-8c4ee3f4f991","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":"ac41e1d8-8752-4e7f-8574-9151296b7759","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":"1ad2a91b-416b-4dc1-b813-ff13a41d30e1","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":"e209f0c9-bffe-42a3-b4a8-5aeba61a7666","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":"4f671280-9cbd-4d30-b964-8e180aed140c","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":"0ef1bd70-fb31-416c-9474-f85f47888180","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":"51f49b6c-59c2-4d1a-b0c2-d21dd95a53e8","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":"bc5dd542-7e8c-469e-81c6-f92e834d2566","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":"0c64888a-1919-4b1e-a101-e27b734f3bcd","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":"2eb17f11-4028-4140-8a99-35c53a4b38fc","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":"81479ca8-bb91-4d4e-b9bd-7f2ba0cf585c","block_type":"box","text":"usually includes a profit to the dealer.","page_number":60,"box":{"x":117,"y":621,"width":281,"height":12}},{"id":"0b36afce-cb08-4aaf-9439-1c763fc7efdf","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":"b8ac81c6-728a-4c55-8417-053794eed1ac","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":"38afb37f-4815-412c-a5bd-e59f8da183ea","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":"bd34c3be-fceb-4406-8d29-5c010db09e16","block_type":"box","text":"required by local markets.","page_number":60,"box":{"x":117,"y":696,"width":190,"height":12}},{"id":"1e130d8f-8e2f-4470-8739-b7a9d869dde3","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":"4ff71f47-f889-4a02-9d71-1ec44d369fd3","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":"65d5dd3f-efc5-4921-84f3-6a323cbd95fa","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":"0d8adfe0-ebd8-4d81-9e9b-831c7823ac1d","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":"5092fee6-a81a-45ac-a842-2e27f7effdfb","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":"92ccaf96-7cbf-4dc2-b548-cef1b4d4b260","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":"a0182be9-590e-4157-af74-2a2847450686","block_type":"box","text":"commercial paper.","page_number":60,"box":{"x":116,"y":818,"width":137,"height":12}},{"id":"6e5f964d-6bc8-4258-98fc-23be6f74e752","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":"cc1f2c86-4ed3-4319-8134-f9dd3dd6277d","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":"99abc899-f7cd-4b2c-9a30-60f7864d0036","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":"97a4dc9e-a958-4668-a0fb-eb72d6fd39c2","block_type":"box","text":"57","page_number":60,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"02901c35-a95b-4441-854d-0a06eb10ca74","block_type":"box","text":"NM1026U-6049097-60/259","page_number":60,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"898ca46c-6a44-4f3e-b908-fc3e0df55cc4","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":"3f117d3a-c288-4baa-835e-e2d8d4965067","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":"432e9b84-c528-48a3-b2c1-45161ba6d8cf","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":"679e8da7-4b7f-42fe-98b3-79b17ab71b59","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":"9425cc85-1090-4baf-b8b9-a96e87add331","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":"74b53a35-b337-4476-9095-23f24def12ec","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":"b2095685-bdcc-4412-85af-0c3b5e5bbf15","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":"defa9f5b-aa0d-4b25-8d77-39b68fb6f50d","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":"f08214c6-ece6-41ad-8180-fe97972ba696","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":"4e2a8dfa-013d-44b0-8588-528e4b3c512a","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":"04f3be58-42e7-4491-aed0-a7c18a1ff81c","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":"8107ab43-a7e7-4f46-9a70-2d96de0d6da4","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":"a849d6e7-0383-4b02-8797-563ae44ab2c7","block_type":"box","text":"investment performance among different client accounts.","page_number":61,"box":{"x":117,"y":273,"width":426,"height":12}},{"id":"531e9207-933b-4a6d-ab7e-8003fe217607","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":"df07ec3b-12ad-405f-90f8-b27045ce09a7","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":"ec9abe99-5e52-4232-9e8c-714e02367f52","block_type":"box","text":"minimums established for accounts and compliance constraints.","page_number":61,"box":{"x":117,"y":335,"width":479,"height":12}},{"id":"7aba4388-1967-45c9-b0d7-7d10777ff4c4","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":"1516576e-6106-4cfe-aa8e-22f3e86deea3","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":"3fdcb491-03f9-4594-8d0d-0b262c5cfb7f","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":"aaa10e15-4408-4842-9a19-e24b532be049","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":"c9e950f3-d6e7-423a-8109-92f7e84c31fc","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":"2ff7ee9a-a2fd-45c6-82c6-62ecafb21013","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":"793a4333-79ee-4b29-ac05-62b523f832d0","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":"fd58c752-f0ef-4148-b12e-5ff688815e96","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":"51eb185c-7f8c-4183-a993-30314a318d03","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":"eaf3d27c-5559-4a7f-afe5-07e1b3f94d08","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":"7686a72e-ac11-4041-8dbe-12a5736eb08c","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":"70267900-c30d-468f-a23d-e9074622915c","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":"b7d499b7-2f59-4976-98e9-3c2eea808a6e","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":"09d14823-7f03-4635-93a4-ac6f3a601bd7","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":"92c9ee46-b081-46eb-94f4-d099ffbbd96c","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":"3cb2e17b-c4b6-413e-8dfd-2409d6908e98","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":"31d20570-427d-4a6d-9fc4-df5291f659b9","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":"939b35dc-484f-4790-b6c9-5e7e9f011aa1","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":"abb2a679-24a7-4980-a309-2d107e761fed","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":"5b508cde-add9-48b2-b0b0-bfe190b8829d","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":"24c651bb-eefc-427b-8257-549fb06dec16","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":"4018f977-ecec-4b00-85ad-e51bc87e1f0f","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":"227eb1b8-65f5-4b45-abed-f3c0f6f71b64","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":"87e21103-326e-4d7f-8540-5e4775723b63","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":"a08e7316-1593-48b9-af3c-0e7191bbf826","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":"1577e61e-e0f7-49d6-a850-a8ece1f9d32e","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":"8c45ad04-5439-4b43-abfa-f2686906a30b","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":"eb65a637-8b9a-4daa-80c4-2c7a918839fa","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":"9a4ec00d-8d1b-4cbe-9d15-455f39ec72b8","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":"8f3424ed-bc6a-4dc9-a031-800053a8f2d0","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":"2227b395-c1d9-4794-81cc-2c8d05f242ce","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":"e6e6b7c9-12ce-4f2a-af8e-4b49b3ab808e","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":"93d56f05-f450-47b9-a9a2-77a8d2f4a0cd","block_type":"box","text":"58","page_number":61,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"42c64ca4-c32f-4f80-aa2b-0ee1bed6a0dd","block_type":"box","text":"NM1026U-6049097-61/259","page_number":61,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"2d8ab4d9-16c7-4050-a3ae-f9f943f6f346","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":"7e2dc942-00f7-48e1-892c-570b0a037df4","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":"68ff665e-f95c-4251-b8fe-d264240cbfc1","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":"e03ff0a7-682d-46eb-935d-300a25114c78","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":"752f2f46-ab42-4f4d-847e-2e1a39f9d1bd","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":"8670eddd-f560-4f44-82fd-f6e94e231e90","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":"24ad16d8-9f8f-4a08-a34b-db967aa5fe8d","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":"cbb77cf2-5345-4be5-8e98-ad18802d2d84","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":"e1e2ddf0-2a33-4934-b154-04dbffaf59e2","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":"c7c27c81-4153-49af-b099-e726a7ba68c8","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":"42ad9f20-3aaf-4147-aa0c-125af986d456","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":"7627103b-1174-4968-922f-920a556e229c","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":"b101c21f-f1ad-4c28-bd5d-7507572dbc24","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":"7addd68e-b26e-43f5-a224-22e7ee759f9d","block_type":"box","text":"long enough to execute the order.","page_number":62,"box":{"x":117,"y":289,"width":255,"height":12}},{"id":"9f78f3d6-8ccb-4fed-961b-efc2a241c8a1","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":"2b4291bc-7e0d-4c4f-9af2-011ce7a925bb","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":"e118bfe5-97a3-4930-8bdd-ec3ac6edf6f5","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":"face82a4-12f1-4cf1-92ab-d335a8081f8a","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":"2108cb7a-9e78-4893-bb7f-39b1a960fb4f","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":"9a10646a-8e9a-48ea-90a1-f4df9db54f6f","block_type":"box","text":"Commission exemptive order or by applicable law.","page_number":62,"box":{"x":117,"y":397,"width":378,"height":12}},{"id":"7b41eb58-5a48-44d8-8636-8677ddef605d","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":"4ff91e0e-3971-43a0-b5c4-3463b90bf71c","block_type":"box","text":"not yet commenced operations.","page_number":62,"box":{"x":117,"y":444,"width":238,"height":12}},{"id":"7a2ae58e-df51-4792-89b8-d7d336556c12","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":"018c26f8-4396-4d2e-a42d-bb94ac72a728","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":"0489ccfd-cdc9-4259-a924-97622d4c6542","block_type":"box","text":"operations.","page_number":62,"box":{"x":116,"y":506,"width":88,"height":12}},{"id":"cbf7879b-3f1a-4fef-bde6-081e74e5022d","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":"3d4e726d-d466-429d-b77e-617e978eea01","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":"08f801f8-7748-4985-bd28-67428b545c13","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":"ac09972f-715d-4bd2-ad8d-9dd8154c474e","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":"761822ed-4caa-428b-83e0-93280d40f07f","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":"2705c1d4-0878-4f37-bf03-00456a3ad56a","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":"87361bfe-83e8-48c3-ac8e-c4164e6682e1","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":"9c2f0f50-3a4c-43df-b476-d957628c2e06","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":"fa14044f-d5c8-4748-adef-f656811abb9b","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":"479e8098-78cd-4a59-b47b-58118be8cb8b","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":"6fad0e2c-039c-4f54-a4db-0d971cfe7674","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":"fe08f839-ee53-4f52-af76-e68d211f7517","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":"9d5259f6-8087-4c6f-b7f1-be0f7a4578de","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":"4636a2ae-c181-4a42-aa03-0fa2f890bdfa","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":"76bfc3de-5114-4af1-add9-a59076dfe314","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":"56d11a66-3995-45c1-8b0f-3a97e7fbcb77","block_type":"box","text":"regulations, or by SEC exemptive order.","page_number":62,"box":{"x":117,"y":754,"width":296,"height":12}},{"id":"8cc16d05-b79c-4b23-b027-7dd72ca9ff46","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":"a417f382-4009-4e94-9135-0fef0d05107e","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":"6d5d90ad-8cc2-4269-a50a-9526a1ddc59e","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":"0b207f1d-18c1-4011-9aa3-fbaa0cea3cc6","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":"f6796573-7a8f-45ab-b229-71611a1491ec","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":"5416f5a0-1a9f-4a2c-8740-a9e0959210a7","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":"744b9aa4-0024-4a1c-ab03-e09bf62dcb87","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":"e3282e19-96cf-470d-9f83-ec2e29016c94","block_type":"box","text":"59","page_number":62,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4724664f-4c5f-423f-b4e0-fdf6a9b3c2fc","block_type":"box","text":"NM1026U-6049097-62/259","page_number":62,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b5c11667-56cc-4b9d-86f9-c085b62a1c7a","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":"b3428a19-7bac-4243-a14a-959b71b7ba30","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":"e9e70bad-7665-4432-bdfb-462cf6a3a887","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":"f1b5c2e4-8db9-4059-bb25-261063344273","block_type":"box","text":"which are borne directly by the Fund.","page_number":63,"box":{"x":116,"y":134,"width":280,"height":12}},{"id":"97eb26ca-6b3d-486c-9779-26eadbd91b6c","block_type":"box","text":"Additional Information Concerning the","page_number":63,"box":{"x":116,"y":185,"width":687,"height":29}},{"id":"f3f127fb-3d5c-4b1f-b514-71b1b74672ca","block_type":"box","text":"Trust","page_number":63,"box":{"x":117,"y":219,"width":102,"height":23}},{"id":"44575d35-210d-4440-ba5d-68c8f3c783d7","block_type":"box","text":"Shares.","page_number":63,"box":{"x":116,"y":271,"width":59,"height":10}},{"id":"ea9483c7-34d2-45cb-82e6-7acf07fb1fb7","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":"8b29bd55-89f0-4a21-854d-a98d61dbf7fa","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":"f2893aa1-e987-4754-a4d8-5a82f5f4d2a1","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":"cbb0864a-7f58-4122-9801-d5c105e66087","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":"622e37ca-421c-4037-941e-3d7ff0963d66","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":"75544a8d-3721-4dc8-bbcc-84932e77745d","block_type":"box","text":"solely to the Fund.","page_number":63,"box":{"x":116,"y":365,"width":142,"height":12}},{"id":"d4705ebc-c0d5-4adc-9c98-511cf069c673","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":"b5e84654-e419-4449-b182-d74b22f4c879","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":"38e3b006-8273-4c8a-b5af-89d50a839d09","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":"b5867e49-a415-43bb-983c-7137b2ec2f74","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":"ed691d53-9ae7-4996-a9e3-f57fe848f8a7","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":"c5baf4aa-cdbf-4652-a8a1-1321463adba5","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":"6bf10fa0-f8a7-479e-be15-6f2e7c2b530a","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":"92019b0f-a2d9-4a56-978f-43a996ad3e7b","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":"7d180045-d827-4149-9830-e81867228d05","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":"62c851fc-903d-4bf8-a942-cb6ea109c04b","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":"5044588d-b13b-415f-9e23-be9bb82218b4","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":"85f26c4a-8a6c-46c6-aa41-3f327fb4d6b5","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":"90594e8b-7a8c-40bc-87c8-644dd405136f","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":"e09ac560-8567-4992-bc19-e77fac7f966d","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":"ddc40aa8-deb2-424e-9141-b448cfa388e4","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":"9873e086-bb46-42cf-a599-b81f3b287590","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":"3b5d939a-7c91-41bf-bbf9-ee70cd18ad50","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":"649cfeb8-e5de-4b86-87ab-dfbb6d72563a","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":"c3e94976-7dd0-4560-96b0-1bff0a5a381b","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":"4386b6a8-7d4c-4ce6-ab6e-8b1b6f0b1348","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":"29997afa-2c5d-4539-abc1-90a053981ca9","block_type":"box","text":"1 University Square Drive, Princeton, NJ 08540.","page_number":63,"box":{"x":118,"y":738,"width":354,"height":12}},{"id":"3b7bda0b-3e61-41e8-884b-e7bc89d32fe0","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":"4b33596c-1283-4b0e-98c5-365b0b208293","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":"015d088b-7bd9-413c-9fe9-d1bf1fb177ba","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":"30bb042b-546d-46df-98bc-7ab8bed7b569","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":"aeba9257-3448-4354-b590-8b2bc2da4049","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":"54e256a2-ea0a-4c0a-82fb-3cbcdb63e707","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":"e7b40c4e-c5e2-4413-b9df-eae37069ca92","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":"4c38aa69-9c52-4358-955f-82df6250e778","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":"15e25bc2-6ddf-464e-a419-0b85be847f9b","block_type":"box","text":"60","page_number":63,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"cd71691a-a7df-4d2d-90ba-4dc72f14b4bd","block_type":"box","text":"NM1026U-6049097-63/259","page_number":63,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"45eccf0c-f2d7-4df5-9eba-6f230b9c1bb3","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":"f10bf040-0c29-4aaf-b89d-a931e583c85d","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":"4686e7e5-3522-41e1-a68f-f5924965d273","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":"7eb97af6-fde4-4364-86f3-b9b3586a7113","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":"130671f5-c9a4-476f-b7c2-b170e5e8202c","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":"c8788e35-cbd6-4236-a7f9-26af12a6b34a","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":"d4c4802c-24ff-4a00-a03c-4064a98f3c37","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":"07c70edf-b93a-4b70-954a-ea6f73caeb7c","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":"3bbe8d22-1da8-46af-a8ce-8ce48874baa4","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":"c1b6a8fd-c94c-4e4d-b89d-9ab3c43d48e4","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":"4ac15334-47dc-4570-80ae-700884a3ee08","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":"30afdb0c-9b5f-44a8-adb2-f53f24fd92fe","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":"bcbbf86b-df2f-4329-aceb-4472140d807f","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":"db160a94-48ad-4736-9680-cdae67bb8be7","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":"6bf093ff-a838-4d8d-a851-0e3bd0163a52","block_type":"box","text":"Shares of the Fund are represented by","page_number":64,"box":{"x":546,"y":301,"width":293,"height":12}},{"id":"019b3dfc-af5c-426e-b831-f5028e73937e","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":"63a374a5-244a-403e-868c-576dbcdc3c4d","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":"50fd6cb4-25c2-4147-9eba-c72fde101d25","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":"087cd381-a2e0-48be-9aae-770870e18706","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":"8c800191-78c1-4fb6-a736-58baa11ba4c5","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":"a0ff273f-6810-487d-a552-8ad59df53ce7","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":"c386736c-1404-4049-926d-57861892ec5b","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":"eed77eb2-d3d4-4221-8c3f-e21c1423db62","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":"21d07ffe-16bc-4297-92be-a9db0cb4d5cd","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":"634a76fd-e6d4-41b5-8e45-3febf2b554e2","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":"55231230-0430-49f1-8f24-5b0d7a290248","block_type":"box","text":"Participants”).","page_number":64,"box":{"x":117,"y":484,"width":107,"height":12}},{"id":"ce6289ce-1ebb-48e9-8067-567f376281e1","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":"cd381766-ea1b-4f29-a387-708cf59d2f2a","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":"e5ef31c4-fffa-44a1-bea7-8f23a9cfa8c3","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":"c98d8c97-9eca-4448-9843-948389521552","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":"3a01c38d-4ed2-4555-be1a-69322d17d339","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":"14defea4-a9da-495c-97b9-434cf98ba51f","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":"dd251686-7a21-4016-bb86-e4e2b0f7652e","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":"8ba27add-b5ad-4893-b2d5-a64a0f710e1e","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":"ac0bbe86-f056-454f-bc30-ec71790d2a5d","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":"0963ab6a-dd7e-49c1-961f-f548c3f4cffa","block_type":"box","text":"shares of the Fund.","page_number":64,"box":{"x":116,"y":651,"width":149,"height":10}},{"id":"c9e964c3-fd0a-4411-911b-341c4b04347f","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":"6047cf36-4cd8-4097-a086-c109a0bfdbda","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":"4c621a0e-415a-4258-9fa8-ef71f000b378","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":"f73d7d4b-8df6-45d1-9045-243f104397e8","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":"1adc9c46-e29d-4e7b-93a3-49bae68a723f","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":"1a66f0a0-1a36-4dcd-9457-522337e4d1a1","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":"49c0f161-e016-4299-96ce-06caee0dbacc","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":"eaf52e23-7bb3-40eb-a70e-82808f5f8c48","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":"0b6e3811-8703-4a30-9a57-8213b928ce77","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":"d8ab1c02-2467-4c65-aed8-d354bb9ff1a9","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":"a2ee3fa4-f89e-48fd-88f6-1b8486d2063f","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":"da2f697e-eaef-4a86-85ec-414fee3ebe43","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":"ba2dbe49-6a3c-4f89-a22f-6a2132a01dcc","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":"7bfb50c0-8157-4721-ac71-445468d561de","block_type":"box","text":"61","page_number":64,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"c0c3e1c1-550e-45b2-b498-4b623baa9638","block_type":"box","text":"NM1026U-6049097-64/259","page_number":64,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"afb10ac9-fbe1-42bc-b674-d2084e6fce4f","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":"c16d408a-f689-4caf-999c-7068ff886f89","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":"e0a65bf3-1211-475c-b9c6-509a8427aac4","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":"1c4af1d6-3daf-45d3-94fc-3134b40b34be","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":"c817f893-aa51-40cf-94a1-023cb8a8e24c","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":"d56392c0-b2d7-4a28-bd89-b759802554e8","block_type":"box","text":"the responsibility of such DTC Participants.","page_number":65,"box":{"x":116,"y":165,"width":325,"height":12}},{"id":"086fa937-cbeb-48d7-b210-f6133ed3ee91","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":"0b2ed4e7-09fb-433d-9d73-d8a743b59a40","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":"47263961-e53b-4035-8c78-6dd36b497a6a","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":"e7084d6f-3fa2-4e22-ba86-dd7654907045","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":"ab74265b-753b-458c-a0cc-bfea7fc5c5aa","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":"48d43e61-b332-4012-81f9-8eb8ead40273","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":"66a0a21e-5658-4563-ba7d-a5c6bda3900d","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":"a60723d8-eb2f-4789-a462-1300fb893a5c","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":"8a8b5d36-0af8-4c92-963b-3832f26057a5","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":"84b7f521-dff0-44b7-8b0d-e3a504d16d9c","block_type":"box","text":"Distribution of Shares.","page_number":65,"box":{"x":117,"y":347,"width":184,"height":10}},{"id":"d0e2801c-13fc-49c0-9cca-6ec2c4296b45","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":"1782a294-be81-4f7b-bcd0-3fc4513a8ec6","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":"2343d449-334a-417e-98e1-1b4ab6db9234","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":"7c80f85b-0152-4bef-961d-39d10614f566","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":"adb9ff74-6076-4b8a-9978-6be90547b43a","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":"c31c4896-10bc-4c99-904c-7d1c67e42ed7","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":"37a4819e-e190-4ecd-9649-43b5ba2931e9","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":"7f173fd3-3c0f-45be-8dc3-2d5810e906ef","block_type":"box","text":"Shareholders of these shares.","page_number":65,"box":{"x":116,"y":456,"width":229,"height":10}},{"id":"8619b5a3-ecc0-4f5f-8a80-cbd9faafdc07","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":"f4b5b9c8-364b-45ee-8891-1bfd983e9018","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":"0ac65391-d55c-40b0-aae6-80bffa3afd5d","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":"6ab81092-890c-4979-b0db-a4933d897550","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":"044f3835-c66c-4e7c-b94c-8958024c68a1","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":"17056d22-d0d3-4b69-959b-1a3d7ee3f42a","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":"0f05bba1-ef33-4d62-833b-7a293a4dafcb","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":"2255bb7c-f950-4aeb-a0c2-2843fc4149fd","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":"87ecf0f3-0518-4bc4-9d36-d4a0adf53259","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":"b049d274-9bf3-46b3-a887-cc78779484fe","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":"24f7b7d9-a62e-4c18-9fe3-c69ee18a175f","block_type":"box","text":"with such sales.","page_number":65,"box":{"x":116,"y":655,"width":123,"height":9}},{"id":"28a2223e-48b1-4d6e-bec0-93e4453b3236","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":"38a40f2c-2f62-42ff-a4b0-801ce21c5896","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":"7fc8a8f1-648d-4657-8ff1-a96b9747d0fa","block_type":"box","text":"Creation and Redemption of Creation","page_number":65,"box":{"x":118,"y":748,"width":678,"height":28}},{"id":"aa76dcae-73b3-4fc7-8645-0f7865ac2ecb","block_type":"box","text":"Units","page_number":65,"box":{"x":119,"y":782,"width":100,"height":22}},{"id":"ebe4ea5e-3304-44e9-a72a-10b1ae3802d6","block_type":"box","text":"General.","page_number":65,"box":{"x":116,"y":831,"width":66,"height":9}},{"id":"09015b09-39e3-42fa-adf2-cd48fbb7c644","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":"4214d223-bcba-4bd7-954f-d47e87d835eb","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":"05ae3dce-39aa-4557-af95-99a5708479ed","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":"800d734a-34bd-46d0-8cb3-8bf685078539","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":"425472c6-d566-44d5-bdb3-ccd303b9f4c4","block_type":"box","text":"62","page_number":65,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"e64d9d14-4941-490e-960e-193cd41c7c57","block_type":"box","text":"NM1026U-6049097-65/259","page_number":65,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"49ab5850-a329-47b4-8188-01230afb0895","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":"c6e8bab8-e36a-46af-94a7-395ea859423b","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":"e3517f15-9887-4dc2-804f-b56c9602d931","block_type":"box","text":"Creation Unit as of October 1, 2026:","page_number":66,"box":{"x":117,"y":118,"width":273,"height":11}},{"id":"74a79ff2-f3b3-462f-af6f-17db547df37f","block_type":"box","text":"Shares Per","page_number":66,"box":{"x":331,"y":156,"width":70,"height":8}},{"id":"a0720563-8fef-49d9-abe2-e0c538b65702","block_type":"box","text":"Creation","page_number":66,"box":{"x":339,"y":166,"width":53,"height":8}},{"id":"71e47b02-b0e8-4ad1-95b0-57112e209d3e","block_type":"box","text":"Unit","page_number":66,"box":{"x":354,"y":177,"width":25,"height":7}},{"id":"3fff44a6-8650-4a9c-91b5-42fae216c801","block_type":"box","text":"Approximate","page_number":66,"box":{"x":587,"y":146,"width":82,"height":9}},{"id":"9c47e404-2ce8-4e23-84b7-72306e44b878","block_type":"box","text":"Value Per","page_number":66,"box":{"x":598,"y":156,"width":61,"height":8}},{"id":"b6682860-7d7b-4a2d-999a-45d8b38cc0f9","block_type":"box","text":"Creation","page_number":66,"box":{"x":602,"y":166,"width":53,"height":8}},{"id":"45c08cd6-8f54-4e8e-a431-d08ce0be7b9d","block_type":"box","text":"Unit (U.S.$)","page_number":66,"box":{"x":592,"y":176,"width":70,"height":10}},{"id":"98e15778-7f55-4e21-a434-9e03f3b37499","block_type":"box","text":"20,000 $500,000","page_number":66,"box":{"x":341,"y":195,"width":327,"height":12}},{"id":"4aa9c740-4319-40cd-b26a-df1d31e0d238","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":"b8f9d8e0-c190-436c-8421-8812d923ed00","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":"5a4f6e41-a49c-44b9-b17e-be31042fcdb5","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":"ab9fd1e6-0c58-43d2-9383-8ad4156a974a","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":"5f4dca8a-ab4a-4dde-9da6-956a341da1da","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":"72fe395c-e772-48d3-b2bb-674f84d78341","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":"b58448e1-6ec1-462c-b353-c2cb9c6ea981","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":"a576ae42-1270-46bf-984a-f26374d62877","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":"1b7ee24a-c3c4-4c71-ac90-3d2f6eba2d2e","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":"e4c3b833-4ec5-4217-a8ae-c0c48a34db71","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":"ce480bb1-89fc-4ea0-a1f3-529919d97716","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":"cbc1bb24-00d0-4ef1-9baa-d1646fbaf77d","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":"452d0524-0bd6-408a-9066-7f45d793fc17","block_type":"box","text":"Fund Deposit.","page_number":66,"box":{"x":117,"y":428,"width":110,"height":12}},{"id":"9226b2e1-1d4c-4f09-be71-3d8c01996d0d","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":"1ea227d6-0264-4835-bf8a-cbe21e093411","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":"ce2d9539-7d50-46a2-93da-e3f22256b003","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":"3cc783c4-2413-4ae7-b4d3-74b5b59eaaa4","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":"46e9c5ad-2972-4e73-a78f-56b5d8c07c72","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":"a342f7e1-6ad4-4010-93c7-b7c47349b23c","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":"9e987e53-7ed3-40de-82d8-5b391a820e63","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":"e98e0555-8f9e-4a4d-856d-db782a218f52","block_type":"box","text":"available.","page_number":66,"box":{"x":116,"y":537,"width":75,"height":9}},{"id":"77670b70-b599-4447-8de7-b9b46b5a63f1","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":"b68b22c3-0305-4a7b-9cc8-a3c4ddd281e9","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":"43dfe2d1-1886-4d5b-a3bd-2727100da4f3","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":"9109ebab-8a31-407d-a45b-a6a5e880bd4b","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":"056dc855-e253-4a29-adee-597450f7956f","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":"61b47bd9-6c22-42df-bb98-73f10a40de58","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":"68d6a849-d492-4d20-876e-66ba4b240741","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":"d1e035bc-dd8b-4831-b1c9-675d246acd41","block_type":"box","text":"Cash Purchase Method","page_number":66,"box":{"x":117,"y":676,"width":175,"height":10}},{"id":"45134443-d0aa-4e20-8acb-ad0c6c5c387c","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":"4f26e466-8778-4285-b7fc-8a71ad805706","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":"368a8c79-8738-4698-a55c-71a11856665d","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":"1f53f5eb-b25c-4bcd-8824-c5c3bcfebad6","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":"924a8441-bdd0-429d-bde5-e919832dca34","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":"d18e785b-6b03-4661-a1e9-dfdcaab7acb9","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":"c8f7541c-d21d-4fac-bd9c-95a5c5cb4d02","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":"74f0f092-b876-436f-be7a-bf54f55c85cb","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":"644e9c85-2df2-4e7c-8cf8-c60600ee4323","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":"3a862136-7aa8-4c04-86e5-3b96b01db60c","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":"323ae18a-d147-4bc8-9c0c-e42427536adb","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":"80a88335-5f4e-43e5-89de-e5210b42e097","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":"0e0d1706-eea7-41b5-94df-9579e8e44a81","block_type":"box","text":"63","page_number":66,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"87f44f8f-2340-4cd6-ac20-68ce67591993","block_type":"box","text":"NM1026U-6049097-66/259","page_number":66,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"6df82cff-85a5-4655-9c96-e7a4b219bbf7","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":"3b743a39-3a9b-46d9-aa0b-7d22f01ed8e3","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":"265ca1d8-525a-4e61-9f68-43239faee762","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":"634aed02-d62b-4e1c-9e3a-22b104a0a7c3","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":"4ba8260a-0a8f-4bfe-8c72-36c8b4b0c81b","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":"27a411a5-bee9-4484-ae0a-de19b0c027bc","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":"221bb6cc-c8ab-4648-91e9-577549dd9f99","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":"7c0cc112-98e8-44d3-bb66-f4360c24df9c","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":"7d110486-a2c4-4dbb-802a-08b44289c13d","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":"5babb775-a5f9-423c-b755-d8205c0a4429","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":"f674f680-0e7a-4f7a-8592-a34b47dbd56c","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":"4b9867db-2e56-4409-ba35-aec547faa403","block_type":"box","text":"Cash Purchase Method.","page_number":67,"box":{"x":116,"y":281,"width":195,"height":9}},{"id":"1d22b0d7-61bc-4d25-87d7-6c122f4c94d1","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":"4db15ac5-23c3-49da-a5fe-2eb6c64192f7","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":"b92c40c9-0b67-4406-8406-e50f2a83c4a5","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":"b3dbaced-24cd-4445-a15d-d68e43a33da2","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":"13ffbcbd-49d8-4996-a89e-d2002dd995af","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":"6599b20b-4aa2-4025-8d91-edc80d8bc192","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":"c65ae153-8aee-485c-a759-c897b641c4a5","block_type":"box","text":"Procedures for Creation of Creation Units.","page_number":67,"box":{"x":117,"y":385,"width":335,"height":10}},{"id":"bb45fc2f-e301-4092-8301-b29b0761d1f3","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":"24f97dde-b378-40f4-9fdf-2de5e22ec536","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":"f17e843c-7049-4fe0-af75-8a2db17760d2","block_type":"box","text":"i.e.","page_number":67,"box":{"x":708,"y":401,"width":20,"height":9}},{"id":"9822b928-6b45-4067-82b8-5534abae53d1","block_type":"box","text":", a broker-dealer or","page_number":67,"box":{"x":731,"y":401,"width":147,"height":11}},{"id":"4f42025c-3e42-45b5-9c4e-182208770d65","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":"0f65fd71-6441-48da-8285-4b1841109429","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":"ad2db7cf-dc3d-4224-949c-3663ecbbdca5","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":"99ac6668-343b-48b6-b6d4-29cdf893cc6f","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":"248c41f1-08ef-417c-b429-0a6dbfecef8e","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":"7edf63c0-341c-4b2b-babc-a73af89a92ba","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":"f36badaa-4d26-4ed5-99c5-642306620508","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":"f19484df-b584-4fd6-913f-0d78b3c9b697","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":"99c4295c-56a7-47a2-911f-ff6e0ec948c4","block_type":"box","text":"DTC Participant.","page_number":67,"box":{"x":117,"y":540,"width":127,"height":12}},{"id":"fb8a6b50-95d2-4c0e-be1c-374632cf6481","block_type":"box","text":"Role of the Authorized Participant.","page_number":67,"box":{"x":117,"y":568,"width":273,"height":12}},{"id":"0177832c-df30-42e5-ae7f-b1191fe03a49","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":"2c407d8d-3f7b-428a-9368-fa63b5857392","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":"f571185b-67f1-463b-9eb0-8677580ba512","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":"479305ce-d7f7-4dd7-9888-1f58439d8d15","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":"5fe87587-f6fb-4464-8675-6247c696bbd0","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":"a407654e-e656-42d0-adab-4264a0a4114b","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":"99a26069-e218-40f6-b9d7-f5a3f2fa4bd9","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":"353e52c2-d7d4-4d62-8624-13e738292e0d","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":"e505bdf2-8c33-4fc3-99f7-29c84000e7ba","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":"dbc5ad9f-80bf-4c1a-8d3b-2a62731d083b","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":"aa0e323b-849c-4066-a236-b72a8c415056","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":"43377205-8a0a-4719-b4fa-486343246f56","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":"91b115fb-3b4e-449c-8167-c40da6c6db96","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":"e4c95e8b-103d-4eb9-9b43-f44a92c4377c","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":"ae6d00d9-f2d7-4e22-932c-fd7b47ca98f3","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":"97c6ff0c-7151-4b2c-8192-c654c00a042c","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":"f7141971-498c-43cd-bd1e-679a86f80b8f","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":"43eee374-b1ae-4bd6-8095-2740577411a9","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":"3d42d882-f8a3-4476-b261-129049e08955","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":"7678de08-e578-4d59-b9c2-260819e4b601","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":"e296a32b-c159-4182-b796-89e1cb71b16d","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":"1cb1c5bf-da87-4366-ad03-07a14c5c4974","block_type":"box","text":"64","page_number":67,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"228869fb-b7ed-4f95-bcd9-c5c97fb99c9c","block_type":"box","text":"NM1026U-6049097-67/259","page_number":67,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9badc1ae-954c-4923-a652-9a8611cfd322","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":"a0cc4b5a-7985-48af-9f80-b67e1c341dbb","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":"fc0b9169-0b2b-469d-87dd-c0070ec6755e","block_type":"box","text":"Purchase Orders.","page_number":68,"box":{"x":117,"y":137,"width":144,"height":9}},{"id":"b35938ac-c6f2-43a2-a820-e8717cd67561","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":"12102d65-aba6-4d2d-a4b9-db4eb0c82dc0","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":"f9c41f37-4e78-40cd-a204-d5e783ddf023","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":"c7c7f6a6-0175-42ed-a486-080f41c866a2","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":"c9ce5bb4-3548-46f9-8bd4-caad9ddf84da","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":"8806891b-b969-4ab0-8fe2-897ecbf2da40","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":"bf874241-bbd7-42f9-831a-d98852a491b1","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":"3e60e1e4-9660-4435-8125-175b75586312","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":"f1569905-113d-431b-814d-5678184ce184","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":"43c963a5-1e27-4c0b-9193-cafe4d4278d9","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":"edc1ad78-e7e0-431f-b684-ed3f2944888d","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":"f25c05bb-7f27-4b3a-8fa8-311e42d657c3","block_type":"box","text":"on such Business Day.","page_number":68,"box":{"x":116,"y":307,"width":175,"height":12}},{"id":"0659dd53-ca9a-471a-93c4-00de96c04369","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":"b9e57855-882b-4f31-a0d1-0a4576496ad3","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":"790b7c94-0c42-47f9-b2c7-ce81d9b400c7","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":"4e2d57d0-d65d-45f5-9f50-dd6bd19ad4da","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":"822cf0c6-0fb6-4e62-8a0d-b9427753b5bc","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":"6d5d318a-bb28-4f5c-a069-8252c670ef98","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":"9f44793c-468a-4ddb-b8af-045fef8c2a98","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":"95d1420c-2840-473b-9b14-e07b373efdeb","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":"ad3f7a65-a9c8-4ab0-8822-5ef23ac2b749","block_type":"box","text":"individual Authorized Participant.","page_number":68,"box":{"x":117,"y":465,"width":247,"height":12}},{"id":"844e8a88-ed61-4b39-9f54-c3f11fb246df","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":"906ee317-2f0e-4317-84eb-dbde41887b2c","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":"cf627252-6cc1-4991-8578-201a179020f4","block_type":"box","text":"Timing of Submission of Purchase Orders.","page_number":68,"box":{"x":116,"y":549,"width":340,"height":12}},{"id":"db3c358b-17f5-4566-9d27-b2f2033e2fb0","block_type":"box","text":"An Authorized Participant must submit an irrevocable","page_number":68,"box":{"x":457,"y":549,"width":405,"height":12}},{"id":"bf5a0cca-6521-42b1-b9d3-350df70da557","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":"8bab3906-0840-429c-8b17-f78b00f03097","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":"28ed1889-e911-4c64-b4a5-a9fe53bf77ef","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":"8f356d5b-761a-47b1-ab43-533d012e6ff2","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":"4cd17280-5fa1-4f43-82d6-9f6c57831004","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":"e15e61a1-02aa-48f7-8dab-930a8c948641","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":"dd67eb22-7ede-4d90-8c7c-8581dc6b60c3","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":"85e50e2b-e8d9-4b32-aeae-96b755818773","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":"ca104c6d-283c-4125-a3b3-d50e8e85b169","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":"564c608d-09e7-450a-ac9c-1e534fe06150","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":"c4b2a73b-1593-4784-97b8-ad200165225d","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":"231b9f2a-914d-48e8-8b9b-5b5ba6b667b2","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":"680dbdf7-a8d3-40df-a96b-22233c06e5b1","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":"6c5296ce-a0c9-44ad-9349-1abf922a9a4d","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":"b0b55103-187b-4db4-8268-25698d6e3cee","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":"82bbe5f9-9a95-40cb-b359-563e93764d86","block_type":"box","text":"Acceptance of Orders for Creation Units.","page_number":68,"box":{"x":116,"y":816,"width":325,"height":12}},{"id":"87c40c88-a39c-4dab-85ff-1fafb3399027","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":"4d93d09d-7119-40be-a95f-bcf9405e8f44","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":"76f2bcb1-a0bf-44c8-ac2e-b2134c3623b9","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":"c5b65a78-e2cc-4efa-ae92-9fe3489964c7","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":"578ac514-d21e-4fed-b6a6-28d8416c6e7e","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":"b9e840da-f2ff-451d-9e4a-55857caa9d5f","block_type":"box","text":"65","page_number":68,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"713de593-3cae-4654-97bc-4313ef94f8c7","block_type":"box","text":"NM1026U-6049097-68/259","page_number":68,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"375f8b55-7c37-4373-9067-80acc5505e0f","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":"02ab3aed-64b6-4600-8bc3-1406ee7d072c","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":"fa2fa097-ee14-4703-8353-f540947f6dd0","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":"b2a6617d-756d-4d6a-bb44-928e596e23e9","block_type":"box","text":"Authorized Participant that placed the order.","page_number":69,"box":{"x":116,"y":134,"width":333,"height":11}},{"id":"c730dc0a-61c2-436d-8c8e-343aaf7487b5","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":"365162f6-237c-4f57-9dc3-d3efa8a1b0a5","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":"18040392-408e-4493-bc16-5cbba42fa958","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":"e741ef45-0809-48a4-b72a-1a75d5e0e3c5","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":"c6e4f96b-45b7-4b54-b83d-14ef7f6fa602","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":"94f5c062-13d2-45fd-844f-de4afc26cdea","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":"262fada2-3c80-4e13-9e9a-56236be60888","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":"1ec4668f-b376-41b4-8374-cff64f12bbac","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":"1a29e4ca-8456-4ff9-bcb4-5d9520cab39e","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":"4c3ca2fe-27fd-4f94-a2de-b0459f1b7545","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":"d2bf7853-2d02-4abc-a949-ebbdbc95fb85","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":"a5f65e54-3e67-419c-9717-ac335edc098d","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":"89d0136d-6030-45cd-844d-f366f2bd886c","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":"c23919dd-56a8-4388-b98b-a50a889c4736","block_type":"box","text":"Issuance of a Creation Unit.","page_number":69,"box":{"x":117,"y":375,"width":225,"height":10}},{"id":"a9806430-cde5-4386-a61a-74083702e27f","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":"e10fc44d-f6bc-4e92-b1c1-81f25d6ef35c","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":"62cb7f9c-0dee-4b87-ae94-256ceb132037","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":"504ac07d-02d5-48b3-8297-4a5ace4556e1","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":"a7000cac-9ac7-4e4c-bf13-496815a3741f","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":"037eedf2-e962-49c0-88db-9227f0ebcc77","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":"69c3746e-bbe4-457d-a381-281c3edbc416","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":"1177d2fe-ca69-4557-808b-32654bf4efca","block_type":"box","text":"i.e.","page_number":69,"box":{"x":515,"y":481,"width":20,"height":9}},{"id":"ac57fa1d-4e3e-4a2c-92db-b2c12e454bc0","block_type":"box","text":", one Business Day after trade date). The","page_number":69,"box":{"x":539,"y":481,"width":311,"height":12}},{"id":"c7e3ddab-f688-4c87-acea-a3839a85e605","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":"11b00108-e5ad-4166-8830-647557bb7a8d","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":"b5b8809d-5aa2-4666-85a1-221aeb757d26","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":"57ba1fad-373b-43d8-af84-a70feef43e5e","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":"8094c2a3-a8f3-4918-b866-f122853ffffc","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":"d6b24918-74d4-4940-970b-08386f9a1b4e","block_type":"box","text":"i.e.","page_number":69,"box":{"x":738,"y":558,"width":20,"height":10}},{"id":"1efbbd9a-525d-47a4-87e6-de8b1d9d94c8","block_type":"box","text":", the last date","page_number":69,"box":{"x":761,"y":558,"width":104,"height":12}},{"id":"0b61af43-82b1-48c6-9d61-c1103994c439","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":"0d3f4b35-9f35-4625-8e3f-68e6da2b318b","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":"64ef0658-50c8-4295-bb01-bf54920daf92","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":"2c4ff7e4-cb1a-437f-84a7-4cff041e7838","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":"4b32e51f-4e33-46ad-bb8d-5b579c1f70ce","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":"24f0b804-d93d-42d0-be2a-82595d69aad9","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":"077f8c24-0258-4d51-b554-6d4a19749f71","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":"a7d800d4-2c13-4e20-9e5d-f5caa6b16154","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":"37ee8a46-3169-4312-b25f-31bf9572e236","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":"8cb90bd0-b048-4f69-993e-841ed19475dc","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":"e066ac0e-bd83-4f90-8e96-c6d5940b78f3","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":"cd8286ee-64e2-4af8-ad6b-cca4f3014381","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":"87963765-73fb-4347-8f5e-bfa8f6c34901","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":"7b0eaa5f-71b9-46cb-bd8f-5ab7b7b7de3f","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":"06d488a0-8dff-4f21-92a4-238a24087c75","block_type":"box","text":"related brokerage, borrowings and other charges.","page_number":69,"box":{"x":117,"y":803,"width":366,"height":12}},{"id":"23ea9786-6fc9-4c7f-aa09-dfe8f9998ece","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":"86bfcc40-ffcf-43ca-82e0-bc4fcaeb5e35","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":"c1d38a85-b99b-42aa-861c-6004357068d4","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":"396f18eb-431b-4015-bc51-9eaa58aa2de2","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":"823b14db-3225-4ec9-845e-7ac797d06a7d","block_type":"box","text":"66","page_number":69,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"35d72334-7d9a-4c9d-a858-60a98c8cb183","block_type":"box","text":"NM1026U-6049097-69/259","page_number":69,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"e4e762d9-41d2-46b0-9e1f-c3e3a2ae35ce","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":"89ce3d0b-4870-437d-9b6b-2a885bd700c5","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":"6bb98ff6-2c60-4ecc-939c-7c61dededc97","block_type":"box","text":"Costs Associated with Creation Transactions. A","page_number":70,"box":{"x":116,"y":134,"width":371,"height":10}},{"id":"501de990-ca6f-4c63-b247-f7ec5441f1d8","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":"42a79a44-5e64-46ce-9e2a-ebd922bba7c8","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":"78c0b32d-f738-49dd-a98a-5da79daafbf5","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":"1a99a4a1-d486-47fc-b226-c6117ccd3413","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":"821f6308-2c0e-4e9a-b529-3fe358df4e1c","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":"396e653f-7b1c-4644-a4b1-3fd85c9a904c","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":"f2a9925c-d89d-4532-bba7-f9827b3625cd","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":"38eff73c-defb-41a6-901b-3d5216f8b1ee","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":"aae2f12e-77cb-41a3-bed7-e4ac4c6d2773","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":"b06ec257-2c46-44e5-9715-cf808d95d6ed","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":"458e474e-7d8c-47fe-b377-3754bfe5669d","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":"1a3b9bf2-b0e4-4635-a437-73f973626664","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":"0202cae5-bf00-4412-b7a1-69b7961b7e25","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":"8c58fbb5-fe2a-4188-966c-069c246f4c51","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":"84a1535f-9b58-4537-a85d-fa1e65c833fe","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":"cccad01c-8788-4f29-8e49-be91546319b8","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":"027b52e1-985c-440d-9f19-a82c2239ded9","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":"c6033b06-ffb5-4710-94fe-256f97f5a91d","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":"289ed423-c089-43e9-9ceb-94db9b844682","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":"c06e27f2-c2f4-4e32-bd2e-a16afa606ad1","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":"ef33da8b-766d-464c-9ddb-7f8535d75ff2","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":"9b29d7ad-c046-4aae-b6f9-362f014a2343","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":"781905d5-fc54-4c61-931c-e994288b92ab","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":"cf41aea9-ca55-490f-851d-f6b019c44542","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":"69c21a82-5e74-4304-9767-afeb237cd183","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":"4fa3a0ed-d20f-42e9-af92-7191000fd538","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":"3d31a55e-d97c-4d06-b146-161f99aa7c21","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":"5def5a7e-d724-4a09-94db-2c57cf24101a","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":"85932a9e-133e-4b99-800b-521b9eae07ae","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":"653ac080-93c9-40de-89e0-f5b47b8ef3ce","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":"3d7e6a5c-53e3-42d8-84ad-e5b6ad59965a","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":"421b26a6-8290-4294-8c63-387eb918f0b1","block_type":"box","text":"amounts shown below.","page_number":70,"box":{"x":116,"y":664,"width":169,"height":9}},{"id":"47873b93-53a5-4626-95fc-6812527e71c1","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":"4af989d7-766b-492e-8f83-25f7f3d1b38e","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":"5761e1c9-bee2-461e-8d9e-0ab3726b7f83","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":"490bc6dd-69ca-42db-abcd-cdbd1ebb2f70","block_type":"box","text":"be charged a fee for such services.","page_number":70,"box":{"x":117,"y":742,"width":259,"height":12}},{"id":"6e881c61-f768-49ad-95c5-d306811ba528","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":"e2cb7de4-126e-44e9-aa96-5835c93970a8","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":"f11c4d54-3fad-45fb-bdc1-f9ec4f5deccb","block_type":"box","text":"Standard","page_number":70,"box":{"x":334,"y":818,"width":57,"height":7}},{"id":"c2572d89-e79e-4d8d-a947-12593185d15c","block_type":"box","text":"Creation","page_number":70,"box":{"x":336,"y":828,"width":53,"height":8}},{"id":"e48470d0-eae7-4b78-a052-52f311c4aa31","block_type":"box","text":"Transaction Fee*","page_number":70,"box":{"x":308,"y":838,"width":108,"height":8}},{"id":"93a2f181-2388-4ab5-a498-87270fe3f77a","block_type":"box","text":"Maximum Additional","page_number":70,"box":{"x":560,"y":828,"width":130,"height":8}},{"id":"869d6b2a-3b61-49b8-a321-b19f3569a52b","block_type":"box","text":"Charge**","page_number":70,"box":{"x":597,"y":838,"width":56,"height":10}},{"id":"f552b38e-2781-4248-a1fe-d78630d9d9c2","block_type":"box","text":"$567.50 3%","page_number":70,"box":{"x":333,"y":857,"width":309,"height":11}},{"id":"e4f99ae3-ceb5-44b9-ad43-fcb6a8772e18","block_type":"box","text":"67","page_number":70,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"7edc47f8-e77c-4465-9987-d70964c34718","block_type":"box","text":"NM1026U-6049097-70/259","page_number":70,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8dea01bf-39c6-4e15-86da-b20f89c5d18e","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":"1e383d2d-924a-44b8-b211-6bd9acdd27d8","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":"3855b7f0-da22-44a6-b093-7e6929169235","block_type":"box","text":"set forth above.","page_number":71,"box":{"x":170,"y":112,"width":91,"height":8}},{"id":"c84a7eb9-4402-4203-868d-6ba6f1f3bf19","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":"26ddebbc-dad7-4417-bf32-86606e33b139","block_type":"box","text":"Redemption of Creation Units.","page_number":71,"box":{"x":117,"y":156,"width":240,"height":12}},{"id":"261a5572-89e4-4c91-b58f-da1a00ae9638","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":"99aebfd8-4bc1-4f8e-99db-06cc494f0551","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":"7366e2eb-22eb-4990-bc6c-60f4693a7f3d","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":"adaaa832-4f47-49b5-a37e-6c7458d20d88","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":"34ffed27-f6fa-4b76-963d-9c8fed24a664","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":"ca6214eb-97b8-45a1-b07d-89b253a8d284","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":"c5259094-9230-4767-b31e-5e035e1afb3d","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":"ec8cfff5-a39f-4627-ac05-d84d25a4b5c3","block_type":"box","text":"may sell shares in the secondary market.","page_number":71,"box":{"x":117,"y":265,"width":309,"height":12}},{"id":"32868960-35e7-4b1e-9ec5-e08ecfc950f6","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":"08145afb-2684-48b7-bff0-dcd1fb71f29b","block_type":"box","text":"Cash Redemption","page_number":71,"box":{"x":715,"y":298,"width":138,"height":12}},{"id":"94677e59-71c1-4ea1-8fa0-a47077901634","block_type":"box","text":"Method","page_number":71,"box":{"x":116,"y":313,"width":57,"height":10}},{"id":"dd27f43c-85fc-46c9-861d-6b20234a9087","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":"8af8d86b-55bd-46f6-b283-237b05128c70","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":"cc6c2900-af9f-43dd-9feb-5233563e8834","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":"7158a16b-ff5f-46ec-9b32-ede856d207d8","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":"d217ef1c-0896-4135-ac1a-4e1c1da4b72e","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":"013beb80-a4ff-40c8-ba89-c404bb30a729","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":"3869a543-048a-4c8c-8319-a1c4c8ee2cb1","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":"6fe1c72f-4e19-48cd-9d7a-3e9aef41fc24","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":"d68f9588-915f-4b87-9f07-b0ce2ba6cf3f","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":"253520a2-3467-49ad-b468-a3a07d54d095","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":"6355ee49-237d-47ac-a7da-1cf70852fe9c","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":"38e3cad4-1aa9-4f02-a527-12b30ee94bf3","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":"315989b8-c3d6-4b7b-bff8-9cfad9256881","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":"b719bbaa-df92-4dfc-800c-fb48fdbd5c60","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":"f103c734-0b55-4284-9fba-91ec186a1d81","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":"5591dc3f-2349-46fd-aa30-c1b55fed22bc","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":"a90b88d1-ea77-4007-b710-7545a2c2be16","block_type":"box","text":"transaction fee (as described below).","page_number":71,"box":{"x":116,"y":596,"width":279,"height":12}},{"id":"f76067a8-b213-4dfd-adad-fda180048a10","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":"9595cc05-e1fd-46d4-aec8-d45057a7c684","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":"81d9f814-f793-4806-bdd1-36205f2a134b","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":"e5a28a9f-084f-4b6f-b67e-784ddfc08f73","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":"2b7166f1-f320-4469-a727-ce588e5e386b","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":"6c1c91e4-a532-4bb3-a673-80f3fdb67905","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":"5f1b6958-d3f3-45e0-b93c-4b239192658d","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":"06667ef0-d201-4c48-942f-7df2e2bc1470","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":"2292b2c7-3674-4611-87b4-a13baef7e2b2","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":"99d18aab-ed70-4a35-9903-35195dcf9ab0","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":"321333e0-a517-4fdd-b070-62d71e422809","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":"7929bd5a-ee1c-4210-ba0c-73ed61d6adc9","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":"88713bb7-b46e-46b9-9c6c-b9d67b3d2fcb","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":"eee01059-4a99-4d28-8a69-686daa23d2d9","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":"0f4178f3-d0e0-488f-8f5d-27a0b6c5e908","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":"5e99ae31-e762-415a-a791-10074efae192","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":"c1c823a9-bb17-4ec9-8c41-41d86eeedff8","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":"4cf6b141-1af5-48a4-920c-1dc4f8bdbcc2","block_type":"box","text":"68","page_number":71,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b0389e72-2196-400d-a4b2-ffc73992e574","block_type":"box","text":"NM1026U-6049097-71/259","page_number":71,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b20d3bb8-8023-4fc1-9af0-9528ec5a4f74","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":"c1b6e1bf-7130-45a0-aecf-df59a4d58c08","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":"1d780eea-39d8-4b56-ad8d-43c3e57f6bcb","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":"1b8d20bd-9848-4ba5-894f-3128852f2041","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":"f215c75f-4aaf-41ac-9ceb-77b1a8ffc0c6","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":"f9dddfb6-7eda-4eec-aacb-86333a35254d","block_type":"box","text":"Cash Redemption Method.","page_number":72,"box":{"x":116,"y":180,"width":211,"height":12}},{"id":"cc9da4a9-9731-41d5-b3f1-55f042d80776","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":"be32a6dc-36d8-4b4b-8c03-c663db0414cd","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":"0b00c24f-84fc-4e91-bf3f-b194347b2ad5","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":"73d008ed-fb6e-487d-bed3-41e5debcf777","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":"53cbefea-b219-495a-9621-f1cf8bab9d72","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":"62a45671-62c5-4e02-8ca6-c92c1da5c834","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":"7c3c89fc-7f17-48e7-9aa7-08e4abdf804b","block_type":"box","text":"Costs Associated with Redemption Transactions. A","page_number":72,"box":{"x":116,"y":289,"width":400,"height":11}},{"id":"03eaccc7-2cf6-4a22-bc54-9f397904c603","block_type":"box","text":"A standard redemption transaction fee is","page_number":72,"box":{"x":516,"y":289,"width":307,"height":12}},{"id":"15d5dea5-8c3c-40c7-82a2-6eabf7998e2d","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":"7699d22c-b96b-45d7-82ad-ae8a95b493e6","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":"2639fbb8-7c29-4b79-bab8-6f2325b17fb8","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":"b3e94da3-005b-4bd1-a57c-f121eec4f6d8","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":"52285d1b-d5c1-4f3d-913b-be548dfcc34b","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":"f5d88be4-0cdc-4744-8f70-57937bd76ee0","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":"253086fa-cb68-4b21-83a9-6a160b1177b3","block_type":"box","text":"the amounts invoiced by such custodian.","page_number":72,"box":{"x":116,"y":413,"width":308,"height":12}},{"id":"8e219dad-e10e-40de-bd30-9c8f2ea74e24","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":"f4168a79-7c6b-4a20-9f40-d4b30598e19a","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":"be3a33a8-f45f-4cd2-9697-062ff4cbb9aa","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":"7d02bbaf-54f1-404c-a21f-2fbdcb51d267","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":"c4977d60-7e3a-4591-86f7-2997d32ff37f","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":"71ea7206-2bdb-4be1-8f4c-896d29f59757","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":"a5b71a73-afdf-4897-9c34-50bf36e35d3a","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":"69923e95-3010-4f98-8568-2848e6b266b2","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":"8969805c-d951-479f-a7de-bbef6b751a13","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":"ebbbf04f-4c57-416d-ad9f-8bc68fe3ea56","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":"39efde84-380a-4f0a-8ca0-401c39850b4b","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":"7edf9df5-7f06-401f-be58-2cd3fe8dac02","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":"dce77d6e-8af7-4f51-8512-829bf760cca5","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":"9981d6ec-9ae0-4c1b-873a-fb9aabc64cc3","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":"7e15011e-0988-4a4e-8703-eb3a5cfd5446","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":"02b539ae-13d5-4a04-b177-f5545dacd6bb","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":"6d6e1135-3f87-4524-ace6-d651bda21e18","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":"4f194118-9db9-4b7e-b743-a721e2a99dab","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":"820d3087-75d1-4efc-a20b-840f53fd4910","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":"159778a5-aa3f-4d2e-a104-108ff10511ba","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":"bc920195-94f3-469e-ac99-6ff34f217cc9","block_type":"box","text":"amounts shown below.","page_number":72,"box":{"x":116,"y":769,"width":169,"height":10}},{"id":"fa288a8a-b693-40f1-838c-183b9cc89627","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":"f7142596-5d30-42fe-ad4e-899d926c243b","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":"57becec8-45ff-46bb-b1b6-b10791ba18ab","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":"4a4f51c4-ba51-44d2-92ed-61250e591a5e","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":"f259ac94-fe48-474a-ba7a-3fc908ac55a5","block_type":"box","text":"69","page_number":72,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2a948b6e-17c2-48a7-b020-2a2547296660","block_type":"box","text":"NM1026U-6049097-72/259","page_number":72,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f8077ae1-4313-4d71-86ef-d120cab9f686","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":"d470b810-1f23-4fe9-b704-bbbb71751e1d","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":"4ed0dd65-4de7-4cad-9d28-e19c0f516c9c","block_type":"box","text":"Standard","page_number":73,"box":{"x":334,"y":130,"width":57,"height":8}},{"id":"ad221786-549b-46c6-b0dd-aec31b7e56dd","block_type":"box","text":"Redemption","page_number":73,"box":{"x":324,"y":141,"width":76,"height":9}},{"id":"94902348-eb90-44ae-85a7-ada618b14dfb","block_type":"box","text":"Transaction Fee*","page_number":73,"box":{"x":308,"y":151,"width":108,"height":8}},{"id":"d99c21c0-02c8-416b-8d63-d8e60bf2c221","block_type":"box","text":"Maximum Additional","page_number":73,"box":{"x":560,"y":141,"width":130,"height":7}},{"id":"46a58cc7-c09d-47f6-b997-464201ddbe26","block_type":"box","text":"Charge**","page_number":73,"box":{"x":597,"y":151,"width":56,"height":10}},{"id":"3f1ca3b7-723b-41f8-a5ae-c104ca5db52e","block_type":"box","text":"$567.50 2%","page_number":73,"box":{"x":333,"y":169,"width":309,"height":11}},{"id":"d3ae2378-3bd6-46c5-9abe-8774c3d3970f","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":"f0775872-0726-4b50-985b-d789696b92cb","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":"c1de70eb-77b9-4ed5-8efc-e7e46505d913","block_type":"box","text":"than the fee set forth above.","page_number":73,"box":{"x":170,"y":245,"width":166,"height":8}},{"id":"d9703852-b6b6-4cd5-b59e-80a651a0ee2d","block_type":"box","text":"**","page_number":73,"box":{"x":143,"y":258,"width":6,"height":2}},{"id":"ea5e9bbe-60e2-48e9-9472-fbcc21d38d54","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":"557050a8-eaed-481d-988c-a759bfc3c9cb","block_type":"box","text":"Placement of Redemption Orders.","page_number":73,"box":{"x":117,"y":287,"width":269,"height":12}},{"id":"14fe9f98-a522-49e2-9acf-c26771b9eb47","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":"cad80fab-922a-479b-ba7c-0e8f42193c43","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":"c23c0922-3a41-4a9e-8c6d-7097c04bef6d","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":"77edd580-c83f-48ed-a085-8aeab8b9e7e6","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":"47e526f9-be20-40c3-af68-b575b061ffa9","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":"5b8c9461-0a04-4442-9bb8-f579c2e30552","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":"71b660bf-b425-46a7-b82a-07d8133d9fe9","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":"a9d46067-25fa-4741-a1fe-dce88859fc4d","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":"f090b041-8f4c-4c36-84c5-c8d364e7b8bd","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":"b8802490-5a19-4dbe-baaa-4e68fbf73f6e","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":"b1b8c259-7e0b-4fd5-97e5-9090a8751d0e","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":"dec4a08b-a018-4921-8eae-a213d0356e63","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":"72e6a6a8-b8b0-4afe-9641-990faa791042","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":"3bdf2c5d-ea46-4f1f-b846-5413bddf0ffc","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":"777a6953-e7e5-470e-b2d7-076fe2b7b4f1","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":"df993ae0-d951-4ee6-899f-5e4856db1897","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":"d6c39915-0d88-4643-892f-0623dd6b3158","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":"7f03200a-0ec7-4935-8044-2e06388badc6","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":"3716189a-39d0-495c-8c5f-72627e0f7e2c","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":"06eb5fe1-69e4-4474-a319-92a42cd6b448","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":"316a9a84-9841-4a9e-be68-587b13cdfc50","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":"7d8738c4-3ae8-4d7c-a861-25ebaae22665","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":"ef164dfe-731b-46c5-814d-254c83087e59","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":"ddf65329-4ddb-48ba-b30a-392b8b7b26c6","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":"ffa41d49-f70c-4db6-b0be-d458931ad544","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":"9403a434-d10b-40eb-a89b-be6fd90265ec","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":"1b804ea7-3f20-420b-8db9-f21c00bd888f","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":"3e679bfa-e939-4330-9a86-350d2c3a5209","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":"9015a510-f8af-4f9c-8f8a-1efa07fe56e3","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":"f5eb1632-5a2d-4dd5-84d6-15a43b36863a","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":"ded80f1a-01dd-400b-89a8-967c49b0a715","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":"82f86367-0ef4-4f2e-a477-297242ac6364","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":"44244522-02dd-480a-96ef-9061c38a5817","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":"3794ff9c-f788-4652-ac8e-2521e48dab4b","block_type":"box","text":"Participant submitting the redemption request.","page_number":73,"box":{"x":117,"y":846,"width":347,"height":11}},{"id":"c844946a-e6e4-460c-ac53-a10a4e8d4503","block_type":"box","text":"70","page_number":73,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ccce31b8-2f99-420a-b92a-4871575b1612","block_type":"box","text":"NM1026U-6049097-73/259","page_number":73,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b038b723-38d1-427f-a68d-909005fa0bc7","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":"446c7db2-a8aa-4d81-9037-1bd53e66fc70","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":"83a0d44b-4c61-41cb-a349-ce1fdb4162e8","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":"60dadfe1-294a-4390-b8c2-f8fa32420c9a","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":"537dfde1-7adf-40c4-a1b7-68dac5f42cb7","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":"708b3355-a82a-4afc-9b51-fcdb6d3e4057","block_type":"box","text":"i.e.","page_number":74,"box":{"x":812,"y":165,"width":20,"height":9}},{"id":"16e5c208-46a5-4d23-9f9a-bf18f3c934cd","block_type":"box","text":",","page_number":74,"box":{"x":835,"y":173,"width":8,"height":3}},{"id":"71911718-7702-4291-a061-20f20684f551","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":"1ff70e6b-e9f3-4bfe-a355-2d07465ede98","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":"80409687-1188-43fb-b801-5ab93aeb0db0","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":"600be3da-d121-4689-b32b-aa3ae19ffede","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":"ae36580c-d3c0-4a26-a178-7d218cfadd9f","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":"a7f9cf3d-e097-40d5-aaa6-8041973008b8","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":"8fd4962a-e827-4186-951b-43fcc26a69b5","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":"0ae6bcb8-c7d0-40d0-8b84-218fd003cedb","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":"81bdb525-01ac-47eb-92bd-ab4c9175f1a4","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":"aba55423-d352-48c5-9e10-bfb7de1f3603","block_type":"box","text":"i.e.","page_number":74,"box":{"x":813,"y":304,"width":21,"height":10}},{"id":"c0370425-9578-4df2-a397-bb58c225dce3","block_type":"box","text":", the","page_number":74,"box":{"x":837,"y":304,"width":36,"height":11}},{"id":"34702700-78b7-4cbb-a9ff-bdbbf86a1e86","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":"f5e5ccc7-c29b-4cb3-a1dd-996cbf6c879f","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":"fbc3728e-52d6-4c1e-990e-8e5a41631e09","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":"deb8b9eb-a262-41b1-a4c6-5d473cf67c41","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":"dad9b3fc-5a40-4947-a9d6-ad5d18d47d48","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":"4ef6969c-028c-4712-841a-ee6a7c385c8e","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":"9775bce8-61ce-4b1a-b1e0-782f95eec29f","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":"041331b0-338a-47af-a4c7-2ea386a8ae8f","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":"861dc75b-67c0-418c-b525-b0f643d069e5","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":"48640c5f-ea9d-4ea2-9a04-ecf53e320005","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":"905d3134-369d-4393-95dc-cd393f8b6804","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":"3cf98a3b-3419-41cc-ab0e-3c45db5046dc","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":"7d901aeb-5d6b-4e23-9542-a7c59e561366","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":"83d041a2-89f9-44dd-bb43-03a899845e47","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":"3d6af2ca-7f15-4004-b80f-67a6e05b50e0","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":"827dd39b-086f-4c1c-b597-801359e094e9","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":"d45e758c-e9af-4d59-ab89-a706ad38a6fc","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":"6e53029c-fbf3-4678-8d1f-9765e4d41403","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":"c82a46ba-474b-40ca-8469-742899a33cc3","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":"270d1e80-dc05-4a8d-a2ed-0bdd87b5fe20","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":"7039010b-b704-4b38-a5f1-20ecd0ce976b","block_type":"box","text":"such laws.","page_number":74,"box":{"x":116,"y":661,"width":77,"height":9}},{"id":"747a84de-ad16-4031-856d-c89fee856830","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":"009d4d47-b052-4003-a38d-27cf520d3f9e","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":"554214d1-12e9-4971-805a-4946a288aa2c","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":"b29f2953-67f2-4e6a-a4ba-7019ded3fe71","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":"0f021ba6-1f5d-40ac-8707-1f1d70cf7eeb","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":"0a3159dd-7bce-49da-b1e5-3efefdb450de","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":"0c73ded3-c7c8-49a1-8524-27a53871253f","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":"359108b8-2581-4859-9cdc-5b650302ef1b","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":"9906fb3f-2a52-4edb-8c74-057081bdf377","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":"5251ffe0-351c-4a90-ab00-63414ae78155","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":"b5fc262a-e72b-4fb9-a930-9673c8698d4b","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":"0bcee8fb-1a7a-44f9-8840-be2c37ee27ae","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":"0740a59d-1dd2-4fe7-b517-a71984bfec0f","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":"ccaa1e04-89db-4748-b446-10aefc6b8e8a","block_type":"box","text":"71","page_number":74,"box":{"x":491,"y":909,"width":14,"height":8}},{"id":"4b463c4c-b263-4836-9c90-4856354fd73e","block_type":"box","text":"NM1026U-6049097-74/259","page_number":74,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"265474f6-ac23-4681-9c6a-77111dbbf146","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":"6d5d5dfc-c170-4e6c-ba80-2cb1ca887dd3","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":"275f26e4-271f-4c55-b0ad-26cef1410d40","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":"7ff2c3c9-6a91-4614-bea5-27a4f471ae98","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":"db7e155a-9901-4360-801b-543f4d38442d","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":"ec039118-5ddf-4f14-8ed2-35b56b0aad45","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":"b4e2155f-df94-4f64-beab-867ced508716","block_type":"box","text":"markets.","page_number":75,"box":{"x":117,"y":196,"width":68,"height":9}},{"id":"593d4a94-d15f-4e85-a99e-d06cef7dba4f","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":"3369327f-d942-41dc-ae7a-1323487cb8e4","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":"fa6e56ca-204c-4c77-b633-3a4fb8174dd8","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":"7e3078e0-5834-469c-836f-4599638254be","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":"7a406a53-b2a4-47e9-9125-104061b69783","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":"b24c7bdf-d4f3-423c-845e-610e41bbfdbe","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":"32939a8e-ec1c-4e15-b08a-43d969f1d62e","block_type":"box","text":"Custom Baskets.","page_number":75,"box":{"x":116,"y":335,"width":135,"height":10}},{"id":"7aa97023-f91d-474f-a20d-8d36e8c0f074","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":"33294339-5fd0-45ac-9450-d83f9793dc30","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":"e009b342-28bb-476c-af32-a502efeb3116","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":"dd10dce5-eef5-4944-9c7b-ed453ea271e2","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":"331460c6-c6e4-4d64-970e-58384ca76fb1","block_type":"box","text":"contains bespoke cash substitutions for a single","page_number":75,"box":{"x":116,"y":397,"width":361,"height":12}},{"id":"363daedd-2d14-4110-838c-ed7a5985c6d5","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":"639ec925-47df-40a9-90a2-558e9f768997","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":"737d5b65-bba0-47b8-af92-4b07db9ea44a","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":"961027c6-af26-48ca-91c8-20b814e2adfa","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":"24134733-858c-4311-9411-be7f0b1cb0d2","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":"e465a0d8-3d7a-4f34-907e-f51168380045","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":"3c3d1707-9627-4803-b7f0-ee9815c78f7b","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":"92feb06f-3530-45c8-b3cd-9588983f898e","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":"3f45f846-9429-4d97-8805-f2b8f3c4ff80","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":"b0f11f40-3740-477e-81a1-f945a42303ff","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":"3bf6952d-f0b7-41bf-94e9-863cc763b3f2","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":"47d57be2-e736-4d77-87e4-4f478b9a6bdd","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":"0d31c05c-4b3c-4dd2-89f4-4f4768f11a67","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":"b41f5ac3-a3a7-4d17-aa43-1edc660913fa","block_type":"box","text":"An Authorized Participant generally will","page_number":75,"box":{"x":588,"y":630,"width":296,"height":12}},{"id":"4ce03edc-2a9c-493d-9d71-34d9ad320b29","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":"997f1260-1fcb-491c-ab8c-a240eae67a5e","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":"5d7d47f4-4303-4c74-beac-30e1892a3ab4","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":"bf467b81-7a2c-4a57-957f-b044d35f996e","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":"07534c04-e31f-429c-ba9f-387da9ebd9fb","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":"11240ca8-6783-42ef-9972-3954561d40e4","block_type":"box","text":"advisors.","page_number":75,"box":{"x":116,"y":723,"width":66,"height":9}},{"id":"ead292b0-18a2-4dbb-bb00-e0fa99e5e789","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":"a64b301c-d0b0-49fe-9f9e-e769a1ec234c","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":"11cc0cd7-b6da-457f-a059-e51b9f2caa35","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":"1fe3f421-22ea-49f8-af68-eaada2158190","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":"4e65b53c-7c3c-4f25-8a92-e639f3081987","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":"abc2000f-406a-4678-93f8-e129a21e49e7","block_type":"box","text":"year or less.","page_number":75,"box":{"x":116,"y":831,"width":96,"height":12}},{"id":"fefaee67-ee58-43e6-ba29-54b35465a1c4","block_type":"box","text":"72","page_number":75,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"cd01f2ff-a60b-459d-866f-b61948bb4124","block_type":"box","text":"NM1026U-6049097-75/259","page_number":75,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8558cc51-efa8-4017-acf7-52832457b014","block_type":"box","text":"Taxes","page_number":76,"box":{"x":117,"y":92,"width":120,"height":23}},{"id":"a252eb94-6e20-4929-ba0d-15e678bd59c4","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":"201c94ee-c22c-430e-8389-f78ad5eb67bf","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":"d58371e4-0a62-44d4-b21d-0ac64af02228","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":"b7cb49d0-29c5-49c6-87d7-aaf669635c61","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":"7623bdfe-5934-4b70-a727-06e649adb7b8","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":"658627f5-40e7-4608-b496-5f5f7c3c3669","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":"92837dfe-32fa-4aa1-a7c2-de60a6254593","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":"5e57a05d-a643-47a5-b9d3-34d2590e6d71","block_type":"box","text":"change, possibly with retroactive effect.","page_number":76,"box":{"x":116,"y":250,"width":298,"height":12}},{"id":"3cd9e074-1165-423b-8c54-bb124c0af450","block_type":"box","text":"Regulated Investment Company Qualifications.","page_number":76,"box":{"x":117,"y":279,"width":374,"height":12}},{"id":"172fe04f-19b8-4023-b34c-c4ab0ab226cf","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":"294647fa-a5ee-4eb1-b562-074887e14cff","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":"ea1b21a7-c3a7-4afc-ab3e-4262b92a423f","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":"5d4f6c48-06bb-46d8-a333-ff3d6c097e3b","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":"ff0cb871-9251-43ac-8630-d57023cd6e6c","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":"61cf69b0-095d-4307-9c81-e78cbbf7a29d","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":"ea0819ff-f9ff-4e67-983a-f6b3c99ba050","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":"04c0ad28-4ec4-4b0e-9654-4473b4b1b4e6","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":"b3baf33b-548a-4b5e-b1d9-c8a3ad4ba689","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":"846a849a-d10d-44a2-99d1-19470eec3446","block_type":"box","text":"partnerships (","page_number":76,"box":{"x":117,"y":418,"width":101,"height":12}},{"id":"3b4b4321-1065-4f5f-af79-32d40dec7041","block_type":"box","text":"i.e.,","page_number":76,"box":{"x":219,"y":418,"width":25,"height":11}},{"id":"dbaf7f75-d105-44d1-8d48-037d50efb517","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":"040945c8-dfd4-47f6-b761-3fbb3f863dee","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":"97fad99d-7359-4570-80f5-6b191c4c1a23","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":"7caf10d4-25b4-44d2-ac6f-ce6033f2c89b","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":"bbd497f5-f86c-4e79-b968-0822e1b12c07","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":"3016ff9d-71a0-4a90-8caa-4eaa04cdf42d","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":"4398c389-9e0f-422a-8013-fb08c2468d3a","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":"c6f35dd9-667a-4b9e-a273-ba4d77683cd7","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":"f81653d4-3775-413f-ba78-0c9ac430e78b","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":"54843c7f-e139-4371-90c7-1c2d56809749","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":"49a2e135-73d5-461b-9693-90f403e31e53","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":"d95357a3-51bd-40df-b2b7-7e2e7e23cf25","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":"59b1fdf2-4837-4bda-be82-fc3ef8404cef","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":"3f0bd952-4d32-46c4-a7a5-ea0437e54678","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":"c583113b-c675-49f3-9b94-e20b15a0b94a","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":"f03d74ff-daf2-4ebc-9e3b-90df70f34efd","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":"b5445f38-af4f-45f4-a135-cd70335225a2","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":"f9b7263d-03b7-47b3-b0d9-30d965884d30","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":"d54e7c91-351d-4d8c-9a1a-79ebc6b4a491","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":"43db0955-e0fd-441c-a25d-436d48b99e0e","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":"294553fe-ffa4-4fa2-be62-e2dbaa974e95","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":"83573912-f059-4323-8a8e-e1c6c6840eaf","block_type":"box","text":"withholding tax liabilities.","page_number":76,"box":{"x":116,"y":771,"width":182,"height":12}},{"id":"e14e89fc-29a4-473a-a429-7dc862192136","block_type":"box","text":"Taxation of RICs.","page_number":76,"box":{"x":116,"y":800,"width":136,"height":9}},{"id":"d664ceb9-fcd3-4caf-8a9b-358bc74bc72a","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":"e9f0184f-b635-46f8-9626-77837a5a1678","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":"1f0a913e-d1f2-44b2-add3-20c0084d7b04","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":"60b1959f-1725-4124-8ed5-5c6027906bd0","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":"08c20cc7-6368-45bd-9a67-71cd158e2dc1","block_type":"box","text":"income” (","page_number":76,"box":{"x":117,"y":862,"width":68,"height":12}},{"id":"5b0488fa-c557-41b7-ae6e-a80db03f0c7d","block_type":"box","text":"i.e.","page_number":76,"box":{"x":186,"y":862,"width":21,"height":9}},{"id":"e08ccf3c-239b-4160-bcd4-d9a485a69866","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":"cac395de-4367-4eb3-85cc-f53dc2e89a20","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":"fe59ff57-05e6-46e1-95b5-adad292ff2e4","block_type":"box","text":"73","page_number":76,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"01d9655f-ffd8-4086-b8c1-278a9b6aa40a","block_type":"box","text":"NM1026U-6049097-76/259","page_number":76,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"f461198c-9c1b-412a-9621-6e9f538dacd5","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":"da41eec7-aecb-4387-b0bc-701cb2b65608","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":"1e90e800-42fb-4db3-9f76-5f13bd4dd2f4","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":"93fcdd86-7fdd-47e0-8490-6a8723ff1f76","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":"7dead95d-585c-41af-a51b-3dccf1781ae7","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":"7192f1be-9b53-433e-80ce-ccc641aaa4d2","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":"440e388e-d2cb-4dde-850a-3b760eed286f","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":"d4bc7e67-9d4c-4121-9097-f464eb3c53dd","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":"f6e2357a-2a8d-4496-94e8-51769e7ec737","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":"e617a535-6bea-4ec1-88fb-f2be6794db53","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":"0a6fd4fa-2510-4460-bce9-ad7a484e14d6","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":"ad2a37e5-7ec5-480e-808a-218ca1b60376","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":"340504e3-a8dd-4937-a23a-ee51936b2855","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":"35e93986-a0c7-4cc1-a7c9-119afdacd3ad","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":"1b9068d0-17b7-4f36-8379-a39ccf925250","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":"9142216a-9eef-4f27-9b3c-0e0e5c785d8c","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":"2472be26-e07e-4c66-b93c-d9417d160f3c","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":"09f7249f-4af4-4a44-93ea-b059b65fdb63","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":"89b9f79b-be1e-4df2-af8e-9ad6e2abb3df","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":"706eb1b3-ffb3-4204-9afc-d8fa38994fdb","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":"d8613207-f81a-4dec-ba31-dcdcd078c8b2","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":"10ff07c1-02c9-434f-a39a-f4f54487f5d4","block_type":"box","text":"i.e.","page_number":77,"box":{"x":429,"y":351,"width":20,"height":9}},{"id":"86bca7f4-5f5f-4144-b79c-041f615756a1","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":"06949699-bb7a-4fb3-a32d-d1c3f0af5286","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":"cbf041f2-e7c5-4ff2-bbd6-089efddad645","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":"da0f21df-0038-4159-92f9-a0baf0b7c354","block_type":"box","text":"Excise Tax.","page_number":77,"box":{"x":117,"y":410,"width":89,"height":9}},{"id":"6d740a05-ea76-41b3-9767-e4be2a773ce0","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":"405e47df-72c5-4e3d-89bb-028abbb1d726","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":"349630bc-c04a-4951-b8f0-7ada7485707a","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":"cd7ec4ef-1f78-4847-94e0-f5813367ef60","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":"81308535-e14a-449a-8f6a-fa2a3b3442fb","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":"6b3c05c9-49a9-430c-92a6-3d546f788148","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":"4688aa1d-3e5f-454a-a545-50c3049f3405","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":"6ef1c33e-6ba5-47a1-b992-b2e32615677f","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":"f301aea9-5ac4-44ea-83f1-9f25b94dea45","block_type":"box","text":"the previous year.","page_number":77,"box":{"x":116,"y":518,"width":138,"height":12}},{"id":"05540f98-7736-44be-894a-f97781a96da1","block_type":"box","text":"Net Capital Loss Carryforwards.","page_number":77,"box":{"x":117,"y":546,"width":254,"height":12}},{"id":"22c400b2-b551-4af0-beb0-47b7bfb3346c","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":"09ec0a00-811f-4c82-92f3-7865908c74ef","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":"bd357684-2b2e-43bc-93b7-2647e79d6996","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":"f6cc71e3-b698-40ee-b68c-80ece80aced1","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":"07d52b94-7e6d-4b4a-929d-0388e0f4d5e3","block_type":"box","text":"subject to limitation.","page_number":77,"box":{"x":116,"y":620,"width":152,"height":12}},{"id":"8876cf61-0ad0-4df4-91bb-e154d993122a","block_type":"box","text":"Taxation of U.S. Shareholders.","page_number":77,"box":{"x":116,"y":648,"width":249,"height":10}},{"id":"4c7d618e-2bd9-4ffe-8357-4cb12ffe6672","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":"55ba1f48-0f36-4a48-a30d-115155492139","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":"38dfe1c4-77b8-48da-b94d-536e455dcd53","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":"0c305165-1e5a-41c1-bf33-8a4a6501ca2d","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":"083e7471-a0b2-49cd-951b-582253544d2b","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":"e31be193-a929-4313-911a-fc8df1ea3225","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":"1bea8675-1373-4189-9566-f04316d5789a","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":"1d3e034c-772b-47d5-9d1a-711050700d79","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":"cba4c1d0-78d0-43ba-a74c-d42fbb0660ea","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":"930df9f0-05ba-4874-829d-3813ca29de58","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":"6d3edcbd-56e5-4ed4-9d85-7a3b39ae68b3","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":"b18d2bba-a386-47cf-82f2-a96373a91a2d","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":"cdb5ee41-a3ec-4eac-8272-b6ee42a32aee","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":"11ba9561-1a26-4ff3-a381-5f133347e667","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":"6bc0f27b-41ff-452a-afa5-2b366c7318a4","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":"d20ba331-fc60-4690-9a4b-baf1e8208ea7","block_type":"box","text":"74","page_number":77,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"8261085f-4518-4d0b-8103-81d2b97f68cc","block_type":"box","text":"NM1026U-6049097-77/259","page_number":77,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"87a1ddb7-e88d-418f-87bb-687defec9c67","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":"a7679063-9b90-4168-875c-227e10bd577d","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":"41682c7b-1a2f-4d3e-9da1-2eb32da5f8c5","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":"2de399b0-ab9f-46dd-b9cc-fd6bf51e49ed","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":"c1afd6d8-aece-4a99-ab6f-8cc40584eecb","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":"0f701c1b-9b2d-485b-8573-a30983a1d77b","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":"440f0e71-f1a1-471b-8c61-b4f7944c45fd","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":"b2c13fa0-b5c9-401b-9d1e-8271d1c0462c","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":"d2b9bb1f-9894-41f5-996c-20f845e82812","block_type":"box","text":"the IRS.","page_number":78,"box":{"x":116,"y":211,"width":65,"height":10}},{"id":"1e0dd8ef-9d78-41bf-94db-5f50926abf4f","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":"6a100d67-a7ff-4834-8f5a-d7b803986526","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":"be546857-2ba8-4077-88ce-37d329593862","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":"54a479bb-fb5c-4533-a520-0de4c5788c7d","block_type":"box","text":"short-term capital gains) from its","page_number":78,"box":{"x":116,"y":286,"width":245,"height":12}},{"id":"b3b2955b-7b2e-4d17-8882-77908ea02959","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":"15530f47-3e4a-419a-864b-876644670435","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":"78ab9eb9-ca34-489f-8b6a-e5dbce4f3b15","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":"c853e1a0-d329-428c-a6c7-1561a650f2d5","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":"57644893-7c56-4084-8a52-94312530ecce","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":"966dfa5f-48a0-4f06-bd8f-25e2fc0f46c5","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":"1fc6d4f1-3062-4496-8498-e4e661974c34","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":"3833629e-394a-492c-bbbe-c8be91d8d7c2","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":"a54a07fc-5004-4d89-82a2-3e48e50e87fb","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":"9c0f5d5a-1d90-434e-966c-ad31a4671fde","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":"f8274174-4f71-439f-b4b2-3b1c6b3c6623","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":"8205f304-d19a-4f82-9d6d-dcb7d4b40c83","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":"08c55bf8-13c8-4c35-94bf-d975f4ebb4d1","block_type":"box","text":"period.","page_number":78,"box":{"x":117,"y":513,"width":55,"height":12}},{"id":"4fc9d517-c49f-4cf8-8d5d-fb42161b1e9a","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":"b0a7e294-a49e-4cae-9137-2816aa12f119","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":"53c4aedc-09ee-4de3-8274-e34aae6528a2","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":"d23dd065-a7cb-4c9f-8ed9-b07faf4ea804","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":"c1d0acee-b8d4-4554-87a5-2dc4a1ea9569","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":"d5604512-81e0-4ffc-b64b-ebdfe2016b32","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":"39d912ea-d4cb-4854-865d-9ba6d7344222","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":"1711f1b1-96e7-4d81-92c5-727ae3855881","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":"4f8197db-4953-4beb-8cb4-c04a620c528e","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":"3a2bc13f-8e67-457f-9462-c3412adf541d","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":"e14ff949-1492-40ba-816a-3cbf8f29859d","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":"182b576a-3f35-4611-a87b-c5882407987d","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":"f9686912-574f-4ff2-a2c0-84ae1403a03f","block_type":"box","text":"exceeds certain threshold amounts.","page_number":78,"box":{"x":116,"y":741,"width":264,"height":9}},{"id":"85007779-84d3-4394-ac3a-606f777c1fd5","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":"0248a0ef-a5d0-438e-b151-532db9b1e789","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":"1a8a5dd1-9358-48c7-bb7e-20fe121dc69a","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":"0844fc06-8c3b-4c17-816c-4eb5e1030336","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":"7eaabc09-c2ed-4b1d-87bb-1fbe6bdd26f8","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":"92910f09-27ab-4dce-944e-1c39e6e77edd","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":"31ab22df-5f3c-4495-9b9f-5a69de2ab6bf","block_type":"box","text":"i.e.","page_number":78,"box":{"x":756,"y":846,"width":21,"height":10}},{"id":"6de2ae5d-0d8f-4b41-9350-4f4235e50659","block_type":"box","text":", the date on","page_number":78,"box":{"x":780,"y":846,"width":97,"height":12}},{"id":"e1a36f6c-4bfd-4b7f-b5ea-5f6f27b6a56d","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":"d066bb71-b34a-4acb-83ac-65b11fc788bc","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":"47672332-346b-438f-9eb1-bb908f9e72be","block_type":"box","text":"75","page_number":78,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"2e5b0ad2-bd9f-4fbf-9d8d-9dc8a52ebbc0","block_type":"box","text":"NM1026U-6049097-78/259","page_number":78,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"524582bc-5ec5-475a-9e5c-239ca55d3bd7","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":"d93f5014-81d8-4400-b17d-279e7c4b4fda","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":"c0a01bea-0dcb-47ae-9aa1-1406c840d290","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":"c0f10dd4-0088-4dfb-9c13-49c84b5f77a5","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":"8f44ec7e-0ea4-4ec7-8dd3-a128e758335a","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":"a5f8e8b1-da9d-4c1b-a526-f91759d88cc0","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":"54891d8b-76d3-45e9-8e15-fe7239e45352","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":"eb3d5516-3eda-4a4e-9c61-968a6e47e58b","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":"053ba345-2b0f-4868-9094-8e86ced352fa","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":"7043e24e-f256-457e-ac64-ca0c080c38b7","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":"0071390a-e27e-43a7-b51e-eabae94f1fb3","block_type":"box","text":"Sales of Shares.","page_number":79,"box":{"x":116,"y":268,"width":129,"height":9}},{"id":"6c97fa14-11ee-4112-9942-86960a944f1c","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":"3ec28ee4-83d3-4465-8db6-e0ee44c3a146","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":"ecd55c3f-bc4b-4f9a-8521-2402945fcbb7","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":"b8743c9f-e016-449d-b42e-f17d26984780","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":"a0bbd5e9-d0dc-4720-a997-e3e8fef37402","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":"650b3446-bc0a-4094-9119-7cd858d50005","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":"e39f87a2-3efe-4b73-a81d-38e883bf43ac","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":"35ad58f7-b752-4864-bc1e-681097fc4be5","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":"e2c6c7a3-a4a8-4c3e-914c-563c51c3c394","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":"25eaa974-aa48-442f-b131-ceb3de474219","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":"d36aa66b-f8f9-4fc4-acf0-fa09899becf4","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":"a40c78b3-9fae-4fce-ab23-14d8062354ec","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":"08f3096c-bd48-4ca6-a2f3-a11ec65088f3","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":"ce26d3df-cac6-4105-a9f6-82881017ba96","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":"7a696497-55f2-45c7-99b4-b71adc9b23f0","block_type":"box","text":"apply to the sale of Fund shares.","page_number":79,"box":{"x":116,"y":485,"width":249,"height":12}},{"id":"3adddd40-c6d6-440d-9c08-eb1d2fa867e8","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":"ef7b225b-70e1-4c46-97f9-0866cb7f8c0c","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":"3dd2036e-4bac-416e-b826-fda44dd7c0f8","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":"2adc7aa4-732d-412f-afe4-a85ad643ef95","block_type":"box","text":"e.g.","page_number":79,"box":{"x":849,"y":547,"width":26,"height":9}},{"id":"18ae8ba8-2670-46b2-ac78-330262a75e4e","block_type":"box","text":",","page_number":79,"box":{"x":878,"y":552,"width":8,"height":3}},{"id":"08662adf-5a3d-4888-9a92-c03c782b0947","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":"ba59ef35-d7fa-47a8-87b1-e022a16ead41","block_type":"box","text":"loss on the disposition of the original","page_number":79,"box":{"x":117,"y":575,"width":275,"height":12}},{"id":"acf4e8d4-55b7-4531-bf92-1941fb490397","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":"8913ea27-874a-4f26-97c8-cac87201b124","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":"c2e766a0-5b80-4e62-a7ad-f22dec540714","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":"2fabe543-e7d8-401d-af02-d5caa408013f","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":"aee9a51f-84c7-4ddd-856d-d36bf7bbab7b","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":"ff560501-220c-4740-be01-78befe7a15d9","block_type":"box","text":"Backup Withholding.","page_number":79,"box":{"x":117,"y":694,"width":165,"height":12}},{"id":"bd3223ba-5c38-42d7-837b-ae48179a3cbd","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":"21664a48-2b37-473a-8dd2-ea346a83f4c4","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":"f1e74830-5541-4ff4-be17-ec139f81090c","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":"ba4ecd65-4e89-4334-a6d3-65ccd2ce9c49","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":"b270bf66-a028-4afa-929b-0597f7a0b0eb","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":"9708dfc6-b1ef-4de5-9374-c1a8966f3e6c","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":"a3804744-c6eb-4cb6-a41d-2817ce8f3e2f","block_type":"box","text":"U.S. federal income tax liability.","page_number":79,"box":{"x":117,"y":787,"width":232,"height":12}},{"id":"3efe477c-de77-4d50-8930-bf60f45bcb4d","block_type":"box","text":"Sections 351 and 362.","page_number":79,"box":{"x":116,"y":815,"width":173,"height":10}},{"id":"0ad4f332-c668-43de-ba17-97c5d81712b2","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":"616bbe52-fbdc-4b97-ad86-a5aef4005cd0","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":"584bc086-3d6d-40cd-9830-b6263cc8145c","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":"f00aff6c-fb9f-4bd6-902f-8b71e1864c55","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":"52c6f397-c3f4-4a54-adb7-6c3a998f8585","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":"f0d38581-7811-4a56-9c2f-2e9eaa373eb8","block_type":"box","text":"76","page_number":79,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5fa6750f-2a6c-4c44-9d41-b6987433b078","block_type":"box","text":"NM1026U-6049097-79/259","page_number":79,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8c2c74b8-9f69-435e-9dd4-4033e16177e0","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":"e8fda613-bbff-47e3-92cc-2ea0957c1114","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":"852c4034-18af-4395-adee-eb0dfa08816d","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":"ca8cf2da-4770-4dff-bddf-140270661752","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":"2ea1d78c-5eb8-454f-a430-1f095a064901","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":"0fc1c450-dc72-486c-b875-9bb40f53de67","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":"96d0e7ba-cf9a-4ffa-9ba6-5e750f398f35","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":"54f34996-248b-4aec-90e8-268f80dfbc1e","block_type":"box","text":"Taxation of Certain Derivatives.","page_number":80,"box":{"x":116,"y":211,"width":256,"height":10}},{"id":"eef220a3-ae4d-4af5-8302-ed3c65e33642","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":"ba5bf9bc-8da0-4498-aecc-6245377d8a39","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":"b56f0979-d59d-4dad-8d36-b3189ab5601e","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":"4f1336c2-0018-44e1-bf2c-7363a4737987","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":"597b9f30-3154-4280-9772-4b97e0d862cb","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":"38546862-dc59-4b0e-a2e5-591270fb7741","block_type":"box","text":"losses realized by the Fund (","page_number":80,"box":{"x":117,"y":289,"width":213,"height":12}},{"id":"9a905e63-5e99-47c7-a2ac-958f165dde00","block_type":"box","text":"i.e.","page_number":80,"box":{"x":331,"y":289,"width":21,"height":9}},{"id":"9c648807-7ed6-4ecb-8e6a-e90b325380e9","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":"d3573b77-15a8-45ab-a91f-9dde59b1b413","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":"4c742dae-1001-4908-b05a-d51b3be6388f","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":"0ef3ac9b-4ba7-4822-877f-513b51ef09f3","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":"ae57ffd2-f8c3-4384-bf26-9151dc448700","block_type":"box","text":"i.e.","page_number":80,"box":{"x":653,"y":335,"width":20,"height":10}},{"id":"f26a76a1-2957-4e1e-b30a-b4bd1ea91b55","block_type":"box","text":", treat them as if they were","page_number":80,"box":{"x":676,"y":335,"width":202,"height":12}},{"id":"1cc72e1a-c5f7-451a-954f-fc94bf54b109","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":"9d26870a-a770-4e60-bb38-6e1775f063f4","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":"dabe40bf-ea76-4c4f-b299-ec34046393f2","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":"6d766e0a-defd-49ca-a3d7-d66278e00a0c","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":"4aa7ac85-c59b-443d-8478-ea8f1ccc383b","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":"728e9fad-9398-4f2c-89b3-cc894f940987","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":"1badd383-e3ea-4bfc-8b11-ac3b8c83b355","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":"894f6ea0-5e84-46ff-8ed2-d612e0883837","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":"e46956e8-d828-4350-bc95-d0e701b96f98","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":"1f695025-d004-4fa1-810b-155c73a5f1be","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":"9d8ffe53-04ab-4374-b4b6-ad60ab22e33c","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":"e2a6972b-4d0d-46ec-be0b-bd028e81e42e","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":"a15f0cf0-7f31-4688-80c9-f4058669c945","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":"18f860d8-ff34-43fd-87b5-2b5cfb0eb5c7","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":"95eecf9e-28ce-4f62-bdbc-94cb843f60d7","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":"ecfed446-2fe0-4fd4-bee2-434066bd9f8b","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":"c0523344-face-490f-9df6-2fecdeccd30f","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":"b8452a32-90b1-4843-9170-06e490c58982","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":"ae1b2b6f-f64e-41e4-98c2-395726f4c137","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":"7657b53f-d1b8-48bd-bbf3-04fa9d77e700","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":"6c5bb85a-60d8-4f5c-9340-16ecb6651912","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":"651177d9-69ca-4839-a58e-81e396ea282e","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":"239d2d7a-c7b0-48d7-8f96-13d08f0e37a0","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":"77e541b2-bd0d-432f-bd4c-e988a227aa51","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":"a9879c6c-0b12-44d2-a8e9-e4976ab031a9","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":"7af4ba6f-cae6-4c8e-a670-b54813fc12ab","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":"dd162100-f758-40c5-bc47-c4716321ac81","block_type":"box","text":"Qualified Dividend Income and Qualified REIT Dividends.","page_number":80,"box":{"x":116,"y":769,"width":454,"height":10}},{"id":"6a7fa73c-859e-41be-b945-85fcb91fc39b","block_type":"box","text":"For non-corporate shareholders,","page_number":80,"box":{"x":578,"y":769,"width":238,"height":12}},{"id":"e75a6ce1-a57d-4a54-b08c-67f1749845b2","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":"f15a84e1-350c-43db-8b29-1fe7f2c770fc","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":"d9b1c7ec-d9b4-48e7-8969-ac8bf6e6ed5d","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":"4ddf3540-4608-4ad1-aa5e-472c759c13dc","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":"670f87f5-8c62-48e9-9df6-d6536141b309","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":"18de6f5f-65a5-4310-b4c8-3efb4f1a3713","block_type":"box","text":"corporations and certain non-U.S. corporations (","page_number":80,"box":{"x":116,"y":862,"width":358,"height":12}},{"id":"9c346a31-b58b-415e-b2f0-58073f419bcc","block_type":"box","text":"e.g.","page_number":80,"box":{"x":476,"y":865,"width":25,"height":9}},{"id":"176ee244-66a7-4244-9449-0eb0660499e3","block_type":"box","text":", non-U.S. corporations","page_number":80,"box":{"x":505,"y":862,"width":176,"height":12}},{"id":"07c04a7e-6016-4b6b-abbc-8ecafc058240","block_type":"box","text":"77","page_number":80,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"636f67eb-eb7b-42f1-b83c-68e47f793af6","block_type":"box","text":"NM1026U-6049097-80/259","page_number":80,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"04f83d7e-1a76-4d93-ac4b-ea6113378141","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":"40e48829-e748-4237-8813-ad721cf64435","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":"bafff507-765e-4a9c-bf62-6eeee2e75d06","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":"fa62b70f-b256-495a-b467-3d3ed8fa7677","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":"eb2007ef-166f-40a5-85bd-8c661dac420c","block_type":"box","text":"dividend income.","page_number":81,"box":{"x":116,"y":149,"width":131,"height":10}},{"id":"b4a9c4db-9e89-46dc-bc6f-81d396ce05db","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":"cb06db26-7447-487e-8a46-2e55d66f6317","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":"6cf5d6eb-de28-4eaf-a5fc-f3c59464e0a5","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":"e1297acc-5c3d-4669-ba81-89300b4d6afb","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":"2ea9a511-543e-43cd-826c-b839b55ae51e","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":"e908db22-f571-4f84-98c9-fd5b619ef55a","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":"94eba79d-a661-496a-b31d-0cd0c502e83c","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":"ab47c5cf-9290-4f31-b966-ca744dfb7efd","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":"1dd7693d-b4ca-4216-a286-4121b170cc3f","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":"5f581027-c1a0-40d5-bacf-d594c8ec68bd","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":"0d2ed0a0-459f-4621-8c13-4708d353d32a","block_type":"box","text":"preferred stocks, the holding requi","page_number":81,"box":{"x":117,"y":254,"width":246,"height":12}},{"id":"d59fd139-0597-4bd3-874f-86f88a1a8d58","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":"eb3a829e-0508-442b-8344-f91129682aa9","block_type":"box","text":"y period beginning on the date that","page_number":81,"box":{"x":638,"y":254,"width":250,"height":12}},{"id":"2ec9db55-1f54-4058-a4f8-93f05ed44ff3","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":"39f738d2-0709-4ccf-a9d8-ee56f956377f","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":"40c72446-36c0-4f16-86ad-8949dc89d1bf","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":"b58771dd-70c5-402c-b59b-5bd6a7f51a5e","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":"88bedc63-6c89-4e17-b650-517aaffda1f7","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":"b298e181-0dcf-4b58-847c-f75ee60f05b3","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":"9f7d0533-b267-4576-9ce6-e6b877b9a2d1","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":"ba3afe3a-c7e6-4925-8239-1184f98c84f0","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":"317ba6c5-ac6c-4251-a7c4-f349cbf277e7","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":"cadf871d-0aa2-453c-847a-af3c6ff19b99","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":"6e56f6ad-022b-46f7-b50f-50d6648c17f3","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":"e930d156-9108-42e4-b161-e416411b02a0","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":"704c1797-41bb-4067-9144-316cfc7bb566","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":"5ae8871a-505e-457d-83b4-1657d91d6822","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":"5fd31896-22c6-42db-9215-176dbc625325","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":"adfc1714-da6d-4cc9-a4a1-25d45ba93244","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":"c1afb4de-5675-4fe8-8ac0-ecf11c3c6279","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":"7f0cfcfd-3c70-48ea-8761-bf593f53e920","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":"4062c5c1-fe36-43c7-b7d0-c94a126233e3","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":"57ef497f-3e42-413c-8ee6-a3589a7a29b2","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":"12edf7dc-2608-43ce-847f-b654a254ed24","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":"ff7adaf8-d8d6-44a5-9e44-3202ae4955aa","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":"8c7d5945-53be-435b-8f4f-e1d3e109110f","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":"339b90e9-4ffe-42e8-a2d4-df0ce5bf935c","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":"1281df4a-ee7c-45f8-aa05-62b0375ca0e8","block_type":"box","text":"be taxable as ordinary income.","page_number":81,"box":{"x":117,"y":591,"width":226,"height":12}},{"id":"fc2a6019-eb6d-460c-aa68-cc28b62d949b","block_type":"box","text":"Constructive Sales.","page_number":81,"box":{"x":116,"y":618,"width":155,"height":10}},{"id":"5ff63855-c27d-4062-a0a9-e0236a78315c","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":"6bcbefdc-6c3d-426a-9500-34292d090157","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":"b51bd85a-765d-40d6-8a50-52acbd13bf55","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":"bf6510fc-b743-455d-91b3-ebc2ffa6e8a9","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":"3513d1c6-10d8-4389-942e-5044da20e1bb","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":"c1f7dd8f-fd2f-4913-afc2-5a7fdfaccf36","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":"d4af9d56-3f4b-4d4e-b26e-e62988440444","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":"5ee006f1-4323-4170-b6a7-3fc8de8e3280","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":"e9810d59-275f-4c5b-b9ff-43c3dc6077b5","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":"cf489f43-27fe-4f7b-bc48-fea35f161b13","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":"d14ade2f-1aed-4d4c-a07e-00ff87436ddb","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":"b897255e-a416-4598-88e7-f2ec37f58bbe","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":"841a7894-9138-4863-ae90-bc6cb6ff70d4","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":"e3697d51-0380-4d4b-8631-56ada9eb312b","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":"7edc67a0-1773-49ab-8b63-c70bfcdcb4f5","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":"bbaea63f-2916-4dc8-a40d-67093d315bc9","block_type":"box","text":"such 60-day period.","page_number":81,"box":{"x":116,"y":835,"width":152,"height":12}},{"id":"cd32c3d9-7e04-4b5f-bd59-5fb5947f7228","block_type":"box","text":"Corporate Dividends Received Deduction.","page_number":81,"box":{"x":116,"y":862,"width":334,"height":12}},{"id":"ff4ab8be-ce5f-4061-bef6-e718f2f0c3a2","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":"715cf552-bcfc-49fd-84f9-90cef166b622","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":"17988fd7-3bc8-421c-9df6-5f21d0607aa3","block_type":"box","text":"78","page_number":81,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"da1e792c-8b23-406a-9005-d3ad8e3584ac","block_type":"box","text":"NM1026U-6049097-81/259","page_number":81,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7c3f684c-a2f7-45f6-aeb5-64a60ed887d2","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":"d3517f85-c4ce-4a4b-993b-2292dc375d02","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":"36db4f77-0712-40e4-9f63-1b3cc8ef6a18","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":"9e3c0ebf-4fcf-40b4-a5de-ded52310bca3","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":"f23741cb-0a88-4f3d-aefb-706d240ec711","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":"b51e85df-8297-495e-ba62-805305b370c0","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":"37e1a204-3e9e-48c0-8acb-5aaee6540b56","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":"e5f4c698-442d-4315-bdb9-2ce25ae689fa","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":"cb052cde-f736-4924-86e1-b8f03a2bcc40","block_type":"box","text":"themselves qualify for the dividends received deduction.","page_number":82,"box":{"x":116,"y":211,"width":422,"height":12}},{"id":"6a83fabf-3d8b-444e-a46c-51674b698e4d","block_type":"box","text":"Tax-Exempt Investors and Excess Inclusion Income.","page_number":82,"box":{"x":116,"y":239,"width":423,"height":12}},{"id":"795f60b4-2309-434b-afb1-4dbda70320b2","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":"3b5e0582-059d-489f-af62-42fd9c43d15e","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":"bd507066-0522-4f48-8a53-cf6dc24d148c","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":"77598c76-d491-4d08-aa82-934f733e81f4","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":"4d505b36-5a9c-4c95-b649-368f4111d813","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":"74366957-4ab4-4a10-8efd-da88a0d1da43","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":"15361b42-fc92-4122-92ff-4f093938379c","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":"10d5c4a9-fa79-409d-a87f-1085a75491e2","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":"01b68d0b-0650-414c-a2f6-cb4100247169","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":"b6efe010-c79c-453f-9999-5c8fe56da82d","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":"8e371436-a10e-466c-b21c-582e16fbe1db","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":"5d37764e-eee7-4689-8472-015a2f617cfc","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":"27a94dcc-f5ea-4e11-b59d-a6431f7bc7f0","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":"1164fe2b-d3e5-4148-b602-855325d92580","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":"c6721e53-9545-4274-a4c0-e33893d7214c","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":"fc76579f-6b1f-4509-b17d-ebaddb2a9dd4","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":"7f05e9b7-2632-4bfb-98b9-86f0301d2259","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":"4ea32e77-a0b4-4904-a039-31f66db7f937","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":"c18c8742-acc9-4165-a18c-a89a065b027f","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":"f71322b6-a2c8-4e71-9169-a6648eaa6712","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":"dce20f90-1ec1-4d59-8939-7d3f83050426","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":"73ee456b-c948-4d83-a6e1-74d8bea07d14","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":"ed6af4be-1db0-4258-a256-f8ff0e5750f7","block_type":"box","text":"investment opportunities.","page_number":82,"box":{"x":117,"y":605,"width":191,"height":12}},{"id":"68212c42-6980-4a91-a367-7d001c92927f","block_type":"box","text":"Non-U.S. Investments.","page_number":82,"box":{"x":117,"y":633,"width":182,"height":9}},{"id":"34111657-0349-4fcc-9d3a-a3e87c230efc","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":"65f25fa3-9eb4-48df-999f-24e707e1d120","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":"371399db-a4a4-44f8-8138-51b827bbbe54","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":"8c74ba75-a32c-4cff-9507-4e3224c190a6","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":"36486d10-b92b-4403-ad00-40dcee5448f2","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":"1937d71d-b46d-42f8-8e0e-4238e217ee47","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":"d5a85c14-c9c3-4c80-afe7-fa3e5f92f36c","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":"fd346cf2-e7ff-4522-83b8-9b4eb69c40bc","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":"fa4ff7c8-b8da-44c0-80cc-948a1308f6e9","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":"3c093705-0ef3-4f58-8447-717540c3999f","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":"4d81faa7-c3f5-4286-929a-b1cd2d0c46d5","block_type":"box","text":"otherwise.","page_number":82,"box":{"x":116,"y":788,"width":75,"height":9}},{"id":"c7d1a418-2bf3-4c87-ba0b-6ff5799bd337","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":"147cce21-7daf-4e00-9063-66f9b90ef669","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":"7891a277-d87a-4047-bc24-b0e118e6d73d","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":"3e295a01-a65c-4867-9e46-9b5d6af60969","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":"818f504f-662b-44ce-8268-1e729a9e2f84","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":"33f8527a-dbc1-42ba-977c-3e30ba82880c","block_type":"box","text":"79","page_number":82,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"5f67e2db-6eee-4f4c-9b8c-ffa87d088882","block_type":"box","text":"NM1026U-6049097-82/259","page_number":82,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"819d8877-8c32-4e43-8648-4a5377d4c9dc","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":"428750a6-4221-483a-9a77-6de8a3cb1c06","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":"2f0b6d99-30dd-4449-965c-09f81daa38cf","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":"b68e08e4-54b9-4b1f-a3b2-01ae1f7bd695","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":"b562115a-1841-4ae6-83e2-b7a04da428eb","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":"664d7b4d-c0cc-4598-aa0a-f323fe462156","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":"c431caf2-d5e0-4d73-92f1-ace02aee4612","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":"250f30d3-38b7-4898-8e3e-ed1048938816","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":"70ed0d13-2979-4dd6-9b1e-498e0aba944b","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":"a719ffd7-676a-42b7-830a-aea2de5d1751","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":"3184b4a6-ad18-4e13-8f76-4f3462398841","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":"f20b282f-0b9f-458a-8936-ac943c74a47c","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":"de2233f9-cac7-442d-9e78-306885cd11b7","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":"6fe2b249-1c61-43f6-b9a3-5f2da94b4c29","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":"b48a0c06-bf9f-45e8-bda1-8eebf2114848","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":"d6fbd972-b393-4860-a95d-9996718ec2b6","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":"c98c1441-49c6-4a7d-83b0-b04f4a1491a5","block_type":"box","text":"Fund or to treat Fund","page_number":83,"box":{"x":703,"y":320,"width":162,"height":9}},{"id":"4e97d7b8-a938-492c-b114-06a1c17f89f3","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":"65af3333-dc15-453b-8942-3622ae27ee41","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":"d9b6e9dc-c16e-4c4e-93d3-c38b46fe3ca4","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":"bf166104-dd3a-40c5-809a-b7ab3910bef0","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":"c84c6398-c000-467c-b646-658d4a54a323","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":"d2cc422c-ded5-4994-82aa-b70703981c7c","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":"ce236441-71e0-4b0d-98a4-ebb5564ac7e8","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":"e61a5c3f-f297-4bc5-9a78-dd27d8c7e70f","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":"f58c1aca-f37e-49d0-bc5b-a732eaf10d58","block_type":"box","text":"on refunded foreign taxes.","page_number":83,"box":{"x":116,"y":471,"width":194,"height":13}},{"id":"5a932beb-8a59-4fcc-afd8-f2e9f4df7a65","block_type":"box","text":"Controlled Foreign Corporations.","page_number":83,"box":{"x":116,"y":499,"width":264,"height":13}},{"id":"d6b5bc73-db3a-497f-b28a-67ae9e42367b","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":"e718e42e-566a-4120-9d5d-968da686754d","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":"2304310b-2c3d-437e-a46c-e6f563881b61","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":"af73a96d-303f-4921-9337-eb7b954e008e","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":"afffbb05-60b3-4f25-abff-a9ba975e7692","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":"2a827794-819b-4878-bcb6-4977eddc38e1","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":"54898c80-5eb2-4f1f-bcd4-d1cb892515a3","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":"87d3435e-0a03-4960-b422-c85adbb43760","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":"11e0e69d-9307-4d95-a2f8-127ef2dbc958","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":"1b23572d-9ea5-499d-acac-4f781550ec63","block_type":"box","text":"Passive Foreign Investment Companies.","page_number":83,"box":{"x":117,"y":651,"width":326,"height":12}},{"id":"44d34aaa-37b5-46c1-b1d5-19028658ab26","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":"c9bc1210-2a59-4bda-afdd-b98e3b00deef","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":"b6c69b66-d9b4-4d1d-ba3a-93f1fae1c61a","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":"a0b02bc5-3d09-4f45-8f8e-271b52327c37","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":"fe650ad2-ce5a-4ebe-999b-1b83faaa080e","block_type":"box","text":"arising from such distributions or gains.","page_number":83,"box":{"x":116,"y":713,"width":290,"height":12}},{"id":"3078051d-5969-423b-9c97-3c2752728a05","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":"223c2ed9-3561-4c80-8846-825c30b0a2aa","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":"d041e159-c04d-4f91-9b47-d5250d6d8fca","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":"c19f4735-914d-41db-9c2b-ff9b21a7b9dc","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":"e350ff50-d280-4ffe-995f-5cd9f3860d48","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":"3ffd106e-50b4-45a5-a357-0fcabd7e995f","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":"8d97adaf-fc4a-4bfd-a9b8-2ab753f21cb2","block_type":"box","text":"impossible to obtain.","page_number":83,"box":{"x":117,"y":834,"width":157,"height":12}},{"id":"10118815-6226-4974-9b67-6fb4a52566ec","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":"96fa9a1d-642a-4a41-b0c8-57f6783463ea","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":"8a988a5e-f9cc-4624-81d1-b005684ce488","block_type":"box","text":"80","page_number":83,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"fb368351-eee7-45b8-8339-18f86a49c2b5","block_type":"box","text":"NM1026U-6049097-83/259","page_number":83,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"8f59e9b4-1f8a-47fc-ba3c-48fc5e8961ee","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":"125d6e21-88a6-484b-91b2-0be5c57316fa","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":"3aa1fa6f-d20c-4632-b947-69ded3e75ba3","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":"b3ebdb64-006a-4673-a867-b9188ae64e91","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":"112a71c0-31b1-4e24-8274-c5621c036886","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":"4304fc54-bc4d-477f-974e-b11f74e2d317","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":"c5267858-2eeb-4e48-aeac-b3d7c4795b99","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":"2f714eca-f81d-42b6-8ccd-fde4d6b28361","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":"194e1d7c-31b9-4480-b235-66e9ee0af9a3","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":"41a3d75c-c543-451a-bac2-cc79b6e44394","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":"62c0a05b-31d8-4f92-a997-8d504533fe49","block_type":"box","text":"Reporting.","page_number":84,"box":{"x":117,"y":267,"width":88,"height":12}},{"id":"746094fb-9491-43c8-b5a3-043e975e05d0","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":"36e314d4-4d2b-4346-992c-f4e2a1d87d55","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":"de117c22-c95d-478d-8b88-49eb84753b9d","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":"ff029009-ca0a-4e84-bc9e-30d0d59efba2","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":"5222d97e-ee3b-4cbf-a063-ff6ee680c76e","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":"462d69db-7dba-48e2-8d16-b29c31bc2d43","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":"49c416ae-1ee2-4d9e-9b71-77904932602f","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":"a1604382-138c-4250-ab33-2b8936e6428c","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":"0d1c29a1-a640-4aa9-843c-78f572a36626","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":"846a9169-b4fb-4314-9690-d6dee120945e","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":"ed0a3650-e58f-4f80-a30f-a3a267e55a60","block_type":"box","text":"Other Taxes.","page_number":84,"box":{"x":116,"y":419,"width":106,"height":9}},{"id":"31633d6a-8bf2-459a-91cb-98d8a317d60a","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":"fe4826e8-0834-443f-ba6d-65c3d81eb6c6","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":"33cefdf9-d5ab-429b-9c50-5123143451d3","block_type":"box","text":"Taxation of Non-U.S. Shareholders.","page_number":84,"box":{"x":116,"y":462,"width":287,"height":10}},{"id":"6e660e69-8e83-449d-abc8-3cc4b57deffb","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":"ea897e52-d429-4ff1-b005-cf6b2f7d4142","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":"97b116bf-504b-4a40-9c52-01b255193bce","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":"2352902c-a796-4ec6-afa1-49473683ab9f","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":"08881321-889c-4ae9-af68-66ae08871e8e","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":"eb789ff3-602a-4ce4-9cf7-9fa53417eeff","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":"23f30b85-cda5-4f20-b70c-1233125bc09d","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":"75175611-3734-4d45-81b1-3019a109b40b","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":"20b49c75-eef9-4d49-8a4f-9b673d157d2f","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":"b087785b-a26c-46e4-862b-fd10d23f3403","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":"59373e2c-57c3-43fd-8d37-764211055b05","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":"46f42de9-975f-4e15-ae1c-1146260884c1","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":"23effb88-83cf-4725-a214-a99dfc9ebd6f","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":"86af2a29-745a-4fc8-847f-40d8504b02af","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":"1c306ceb-c7aa-40bd-ba75-13c9d01b529d","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":"e00e4d9a-a716-4cc6-b0fe-665a436544d4","block_type":"box","text":"appropriate rate.","page_number":84,"box":{"x":116,"y":679,"width":122,"height":12}},{"id":"05c2fd8c-74af-4f89-b251-c75153427682","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":"3f0ae780-20a8-46da-8f56-beefd2949bbd","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":"1d6759d5-0657-49d9-bfe5-e795fe6605a2","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":"a6a20428-f140-4784-8839-f5b05a22efbb","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":"e8467fb1-5429-4c6f-af99-6b5c6776d206","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":"2efc46f2-e591-46e7-9da6-1b515caa4686","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":"8703bda1-ea5e-46a6-9f57-5822908d2132","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":"40643e5d-4aa7-4b1a-aadb-26998d09432d","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":"c9baadd2-ff87-4e74-91b4-31bfbb6ee8bd","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":"7bcdefb1-a8e8-48ac-9097-deed67b81b7c","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":"e29b5079-d0e3-4bc9-b987-f70c0809bc24","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":"62d9c410-1163-400f-8a44-ae4349fde9bd","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":"8c08bbaf-9ac5-4e95-a7ab-593ec40d3db3","block_type":"box","text":"81","page_number":84,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"0e739264-2a95-4eab-aef9-ffd8db874709","block_type":"box","text":"NM1026U-6049097-84/259","page_number":84,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b7e575d9-59c0-46be-8d6d-c31ffbe3da62","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":"b787b5b8-5b59-43ec-8115-5644a0a86297","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":"2e598a36-07e6-4539-8020-bc7c080c20a3","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":"d69cda16-9ae1-4d84-ae56-da3313d4033d","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":"34071995-8833-4373-8cc0-9f0cf23f4439","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":"6b9ad420-cc69-4ecc-a911-72d0f3d59eac","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":"55ee45c1-9c9c-42ac-b228-b61f8001211a","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":"ebde36b6-7738-430b-846b-a1cac2bae9cb","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":"65335bc1-0d35-4e6e-b51d-be13b02003ec","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":"d237adfb-0dfd-43dd-acd2-2385c72fdd4b","block_type":"box","text":"holding corporations (as defined in the Inte","page_number":85,"box":{"x":117,"y":208,"width":309,"height":12}},{"id":"6face8b4-eb2f-48b6-bbbf-746c79b0d6f9","block_type":"box","text":"rnal Revenue Code and Treasury regulations). Fund","page_number":85,"box":{"x":427,"y":208,"width":385,"height":12}},{"id":"7c93e3b7-71b7-4aec-bb45-de788d4fd4df","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":"3848c451-a2c3-420a-9f6c-8b74a5ce31ac","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":"a750c136-798e-489a-9c37-53dfabe586f2","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":"73948e1e-fb91-4b6c-82a0-d58a0ea4ea3c","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":"24be10fe-f284-4d01-a243-12edc3ad1932","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":"2e099cf5-88f9-4b22-b91a-9bc07355f0d3","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":"88cf3721-a5fa-48c6-b28e-8c0d145e35ff","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":"5b7c60b5-c27d-4c31-bb34-225f9ff438b7","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":"2dafd99e-1124-45fa-aa62-f9516b0271ac","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":"5a745a5d-2baa-46c1-9b68-61e7b84fe861","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":"2777d346-a833-4fd6-8b92-891563790eae","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":"2097cf95-a67b-49a6-a4d2-4d2855b51335","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":"72f447df-49cd-4409-b1fa-e82c429e43a7","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":"2048942e-88bf-4383-923b-e6c122a587a1","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":"7ebb88e8-0a79-4348-a366-87d8255ad837","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":"2f3def7a-0f46-4c5e-acf6-2a9838201dc4","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":"423f89e7-0a7a-4ee0-9561-cddcc771e1d4","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":"6577160f-af59-461c-a848-04bde777c1d1","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":"3e33a7ad-1519-4b6b-86aa-191eee142ec4","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":"0995ec65-21ef-43bc-af33-ce3013d80df0","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":"8c0cffa5-a081-4be2-8ab0-52599bccfb05","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":"9acd914c-2382-4ea8-b3bd-210e82446278","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":"85bfe5ce-ee04-4198-8789-255ce666aad7","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":"193b6a2e-5663-4a66-8e7b-2ae6abd52047","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":"386a1443-c50d-415b-8125-5a0aa11dcb3f","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":"5a636495-820d-4d3a-a1b0-66d07abde8dc","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":"c773c00c-b083-4079-97fc-d5650c30dcab","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":"0809f1ca-6dce-40c0-bbc3-3c4ca344858a","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":"96165396-d0d7-4eef-95ae-f192ea688ee7","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":"f0d2b317-c9c3-4d3b-ae49-e443ee1e6128","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":"0b53a4c7-fa78-4665-a2a9-254947569434","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":"8f0fdce4-4df0-4c65-8d15-d8fa7a5c7ff7","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":"4331c8a2-59f9-436e-ba0a-07a8d0be3ec2","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":"ff9259f7-476e-47f3-9cb5-37ce853ef62f","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":"8129be68-8d87-48c0-9dc7-592233097212","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":"d68594cb-e96a-488f-a94c-a0806c7d896d","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":"a0c81f64-4061-44b3-a528-60dfc35b810c","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":"56de8f51-9cc1-41de-a57d-c850dba49d53","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":"358d662b-df1e-4831-b140-df44be1b9b28","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":"6ba65a0f-86f5-4147-98a6-146adf90775f","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":"98aacf2c-9126-4c12-bae5-5c617a48dabc","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":"61f95b12-00c5-42f1-9373-62a416c13d1c","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":"867c94a2-d265-4588-b024-61c76a90fa78","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":"e23fd23b-9eb9-49eb-ac69-f5ce6327066d","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":"74b6a1f1-82ca-4811-b85a-ffa9c5c25dc3","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":"0e25d646-f928-436a-aacd-9b6ac37ab5e8","block_type":"box","text":"82","page_number":85,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d7d913a9-a132-4061-b251-eb3e6ad6ede6","block_type":"box","text":"NM1026U-6049097-85/259","page_number":85,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1fb6c69d-7cfa-4343-bb47-9a3d89587aaf","block_type":"box","text":"Miscellaneous Information","page_number":86,"box":{"x":119,"y":92,"width":477,"height":23}},{"id":"ab668e71-13ed-476b-ac30-2da1477a6bf6","block_type":"box","text":"Counsel.","page_number":86,"box":{"x":116,"y":144,"width":70,"height":9}},{"id":"d37c93c5-159f-46ef-afa9-7195bc53a180","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":"bd5f5460-b274-4a25-b9fb-bc76b59e23d5","block_type":"box","text":"counsel to the Trust.","page_number":86,"box":{"x":116,"y":160,"width":157,"height":9}},{"id":"e742ef99-7a92-40cd-b5ad-e0b7a317a869","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":86,"box":{"x":117,"y":191,"width":387,"height":11}},{"id":"448c392d-405e-4475-8e0f-d95abbf2da5d","block_type":"box","text":"PricewaterhouseCoopers LLP, located at Two","page_number":86,"box":{"x":506,"y":190,"width":351,"height":12}},{"id":"f877a179-0126-4fe1-9b5f-75e21353791b","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":"5569e48d-d671-4787-a9b2-aedaf77b9b16","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":"9705bc09-5b27-43f3-a4f3-ac833d9f59a5","block_type":"box","text":"perform other services.","page_number":86,"box":{"x":117,"y":237,"width":176,"height":12}},{"id":"a11488b0-87d1-4bab-a0c0-ced5494bcb2a","block_type":"box","text":"Investors’ Rights.","page_number":86,"box":{"x":117,"y":268,"width":139,"height":12}},{"id":"9ffa14bf-8605-4fe5-ae40-599e987fdd4a","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":"acd146d9-c3b3-448d-b63a-4d4ddb945b81","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":"54e41146-a090-42aa-9579-0c8c471c3b3d","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":"2bd66b15-eda9-4eb6-8afe-b1e28b2ed3af","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":"40117509-0d99-47b9-b65b-3fc0160d12be","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":"28e9bb76-c2a0-49a2-9f85-0fc49f821653","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":"a642cbe2-794d-42bf-9177-6c7c4f19c9c6","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":"cec61058-5875-45af-8639-9c65c3fb1d74","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":"9376af5c-10a9-4071-ba41-9a60b1f8fba4","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":"24c8f17c-91d0-481c-81dc-a59ace7ff565","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":"cc76d2b1-3723-4c47-bf25-899d4cbb4777","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":"933269dc-b637-4a35-a2de-8d50620c7d44","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":"3240d194-a4aa-4035-953d-ad2ca19c2403","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":"4b8279e2-32d3-4ef0-801b-f6b8951178e0","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":"e9be53e9-e2e2-44da-90b9-45cfb74b46bc","block_type":"box","text":"jurisdiction in which the proceeding is brought.","page_number":86,"box":{"x":115,"y":501,"width":349,"height":12}},{"id":"128a5f0a-b829-4e81-8210-302d16d16d3e","block_type":"box","text":"Financial Statements","page_number":86,"box":{"x":119,"y":552,"width":385,"height":23}},{"id":"c0e3ad9a-e9bb-4991-b398-a053e52f9188","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":"4d20d912-88fc-418a-b04b-b31a48ff7a0a","block_type":"box","text":"no financial information to report.","page_number":86,"box":{"x":117,"y":619,"width":248,"height":12}},{"id":"e3ea39d3-1764-43af-ab2e-28d5dcc63e57","block_type":"box","text":"83","page_number":86,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"20a87bd2-fc59-4aa2-b873-71b4e4896aa6","block_type":"box","text":"NM1026U-6049097-86/259","page_number":86,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"072d3306-b246-49d1-ac00-447e0c853738","block_type":"box","text":"PART II","page_number":87,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"117b9b35-9c8a-47dd-a6fd-0988c2e3a5c2","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":"e2ac144e-d0e8-41c1-8aa6-c9b422de1565","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":"e61d7a91-f65e-4438-9b1f-ac453b7e3dff","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":"026bb5b5-4677-40ea-ba75-35b586cbb736","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":"39edcbab-48dc-4b9b-8469-49d530f2c4f1","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":"325aa7b7-ce8f-4238-9f3c-6b43dd32dc4e","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":"7c090d15-0446-4b0b-9083-29c1d91e88e9","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":"b91bee38-a6e0-4366-8d9a-9f78a44f3d01","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":"09495544-9c71-4e41-b5a6-842615928338","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":"d699c7bc-bad1-4640-bb3d-c5fdeb55a5a9","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":"c393d0cd-1246-4e1c-ad50-af75157c962c","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":"eba378c9-8de2-4cfb-a027-db60a10f8aed","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":"d78dd7f7-e750-43de-a003-6c855c7185ae","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":"2e78cdd6-e72e-4a7c-8ffd-e0b16128707a","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":"5dc4064e-7d66-42e9-ad2c-9a96efa3b420","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":"95894196-9892-476a-9d76-92dd6b80d540","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":"8c7c2900-7954-4245-be5b-8fa0f38d62ac","block_type":"box","text":"or the “SEC.”","page_number":87,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"3411efe0-3841-41b3-b44f-a2d42f0542b1","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":"c068db79-938f-47f7-9c0b-8eaa5aecd153","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":"0f5e7865-db9a-4cff-9cf4-566d00acdb6a","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":"dd1b3477-2e74-4df4-8ec6-e58846f91dde","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":"f739fe87-234d-4858-8dec-9491d97ff24a","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":"f4202ee9-5d38-4927-86ab-42a223efc8d7","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":"733b4378-b407-43f5-a55c-67d5d84ed28b","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":"1f0eb36f-5234-4cb1-8dcd-1171dd4c7584","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":"43e62bd2-a166-4d36-903f-0dd6927232d2","block_type":"box","text":"Investment Risks and Considerations","page_number":87,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"7e97521f-a173-4dda-a01f-ebe4e4af95fd","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":"9b8666e4-cc9a-4d33-a56c-de2d59ae6586","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":"87fa7a1c-480d-486c-9c11-b3e6870b49c6","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":"14a10dd6-2787-43ba-ae99-7460f01121fc","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":"71fe5d96-1bc5-4be6-b664-6e53900a0867","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":"46ea7a6d-744b-470e-b5ba-b1ac3c044ea7","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":"d0599904-22e3-4e24-a61d-4a352b2e292e","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":"4ec0a790-fcdd-4466-a016-2ad557f7288d","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":"82541aaa-ec73-4ee6-a783-a9129b080f3a","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":"3030f2a5-7b95-4581-bd26-d05300b86166","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":"0222eeac-d29f-4a4b-9a90-1d91891e2276","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":"8eeeeac2-534a-46f9-a622-414c9ef668eb","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":87,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"266ee242-5dc0-419e-8dd6-f70367700430","block_type":"box","text":"Asset-Backed Securities.","page_number":87,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"660f9621-3d49-4b73-a4af-546d4a44df08","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":"e5fc514d-68f2-4744-a9cc-1f690968101f","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":"8ac51d3e-ef1e-443e-a6cc-c5968af6df77","block_type":"box","text":"II-1","page_number":87,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"0a9a7daa-983a-49c6-9de5-5de3d4391c1b","block_type":"box","text":"NM1026U-6049097-87/259","page_number":87,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"61d0c292-46c2-48f8-ae2c-b5a480654d27","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":"fcaa2a8e-ca51-4890-848d-5d4a7b2f4654","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":"89383dd3-04b1-40d9-9cdc-2fdd42b80ff2","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":"ed561829-d8ec-446d-a63d-18f5e7fbef03","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":"ef7b9fb4-7398-459f-8a79-04787b188bbf","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":"8e5cd3e3-6d3d-463e-9478-00e0068ac03c","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":"aaf9a03f-8c40-4008-a078-b1c80fe56c3e","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":"6cbb067f-60e0-40b3-beac-55db3e55b18a","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":"019ffabd-45e3-423d-ac63-f48423738c58","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":"e212da69-3011-4031-9155-c1a76205522f","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":"f82709e2-0acd-4772-a9d7-bd25c07ff4e5","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":"c698c587-1850-44e7-be14-64f4f6959004","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":"e805107e-78c6-4203-9bee-8acbac5781b1","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":"11e82d76-ed4d-4576-ac4a-cacaf99cf96e","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":"adb15cc1-ae86-4406-8851-9969c4c6f5a1","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":"04bd8799-a6d8-4399-adee-0f9b0bac14aa","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":"ff479ae6-7f89-401f-a6ce-74292b4e344d","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":"9a1bbd8f-4548-4ba3-8172-473015a4fb90","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":"657a4a7f-6362-4755-8867-5d702d09ea7b","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":"11491e81-d32c-4e73-ac81-f7411846fc1b","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":"126d77ad-d78c-43c6-a4fd-7cb75a7841cd","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":"49947836-41a7-41d6-9148-46455253aef7","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":"4539e23b-0371-4e6c-bb95-32b7b8780226","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":"86640bf9-7c94-4ee0-bff0-d60b47078192","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":88,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"f741f356-34af-4d46-bce6-e79b8d699919","block_type":"box","text":"Asset-Based Securities.","page_number":88,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"f36cc327-1db5-4a7f-b29b-8d2c80bdf620","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":"02085e27-72c7-4e79-b5d6-4de3ea64897e","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":"aed9dda3-9c4d-4010-a5d5-3e433a584364","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":"ce74baa3-3279-4eb2-be3d-c3f4321cbab9","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":"ad7d43f3-b6b4-4706-b027-2dda368aff18","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":"5153b960-aa2f-4e2c-968b-056a9db8e507","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":"32290569-63a9-443f-b4ec-f9122cdfa70d","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":"f0a84e42-0e63-4e1a-a3d3-87de3cc769f5","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":"6c232cb2-e84d-4d0d-adc3-ba3bb37cd6f5","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":"65860f0d-c7d7-422a-8b7b-4dd21db92c9a","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":"11698f27-d9e6-4d2c-9fe0-94203196dc16","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":"23beccc8-70c2-45eb-a4ab-5a40d31aaa03","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":"411b1d81-f801-4d43-8de4-56b11268ed81","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":"f2272688-21f0-4500-8c10-3579f7d035ba","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":"32282227-5833-4e41-800b-1dd278d9fb38","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":"8d34cd24-32bc-4932-a8b3-9c56005d1b83","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":"18b60850-ef15-4b95-9e12-85f0b1bddd8a","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":"1dcc1cd1-c0fb-4d27-96b4-1501a2b494f4","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":"b86c6c10-2fda-4938-93a5-e8e915a7538c","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":"3674ad36-b64d-4145-84dc-2d9fdfc660e4","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":"c5011c9e-4320-447c-8b58-bd99efb0beb3","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":"7d2c1420-2c19-4bfe-b802-2698ac12880b","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":"05fb04e2-53f4-4e1c-8c82-2ceb5c39d052","block_type":"box","text":"Precious Metal-Related Securities.","page_number":88,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"90b31230-fec6-4a5b-9dd4-db1fd426f4f7","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":"611c307a-122a-4748-b535-433515afc431","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":"e0f9e68d-43f0-40c6-b075-4f7254cf0015","block_type":"box","text":"e.g.","page_number":88,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"6364dc0e-f8a0-43ae-b137-d8a852bb8a36","block_type":"box","text":", gold, silver and platinum), and in","page_number":88,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"136dc022-87d9-4651-9397-78564cb97f9b","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":"ed447708-2daf-47e4-bde1-3720412513b9","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":"126c42c3-0909-4a90-93e7-ce41ddda6eb5","block_type":"box","text":"II-2","page_number":88,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"36c648e3-19a2-4df9-b535-dabe5d6f460a","block_type":"box","text":"NM1026U-6049097-88/259","page_number":88,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"3265612b-a853-46da-bf65-eb79dbe7ad00","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":"dbbef45c-e008-491c-a711-20ab90409cb3","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":"86c9336c-3e61-4a07-8f75-407214f04fb8","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":"90c7a315-c838-43c6-866f-842657b58a4e","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":"70344e37-48a9-4294-9b2f-fe05453707ff","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":"d4069eb5-8ec3-4230-8221-cffdc60c0e81","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":"580ba7d4-f512-4b09-85ba-fe4f50cbf9c0","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":"fb8d6290-ca22-4970-9278-cde52a7dba16","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":"df7eec36-faa0-471a-9f19-f8b9a2e6d1a6","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":"f86b940d-de9b-4ed1-a1a4-348daa3b65f2","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":"178e2170-a48f-4790-a1bd-41921074c857","block_type":"box","text":"Borrowing and Leverage.","page_number":89,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"655a5c73-4709-4c26-840b-ed0ecb8f89c0","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":"95006d56-9932-4474-b6e3-d013653c1d6a","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":"a5bec849-b87a-4519-8043-f52347acf8e5","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":"59b6b79b-2ea7-46bb-b38a-48d96071a46e","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":"bbe0dd00-5611-4bac-ab3f-f996b3cc71b2","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":"e0d5ee6e-49f3-4b55-baf2-1c7ea75c30e4","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":"adbac233-0ea3-4c7a-8b20-072f2a8050ce","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":"044809dc-98dd-4056-b4c8-ead8ce3dbb7f","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":"f90c33e8-877b-4c78-b0ef-e9ade679db1a","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":"803bde38-c828-4c2d-9ad1-670ed0ca82c0","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":"c285a1a7-112e-4677-b70f-b820e9e4987b","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":"71ef180f-acf3-4384-8107-28170d85260b","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":"bdfa2b2c-8b7e-4914-8a29-be4d53ea024b","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":"2a12344a-b25f-4669-88b5-b77ac3346227","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":"6a40f31f-d46a-4746-9340-afb46aeb547e","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":"153e0bac-c38d-4704-97ad-5cf7e9cd8553","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":"ab0e6ff3-b948-43e7-a826-71ca78cd8bc5","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":"1745c3a9-3b0a-4f8d-98b1-e42f82520339","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":"82f07859-774d-4ca4-a62c-6988e53dc373","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":"6fa4ab6a-e7c0-4bd1-8eab-0dd005269a07","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":"72cc86b6-1f30-49c7-997c-6a138458658e","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":"757272bb-f253-4245-b562-3bec8b41fa9e","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":"b20cd2df-bc28-4096-a7b7-eb46e8532012","block_type":"box","text":"reduced return.","page_number":89,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"d79f504a-db3b-4911-a98f-5b6ca6118479","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":"b1793b86-288e-47f7-99da-17a76b988af3","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":"712a0426-a9d3-4363-8d08-7456752ca85b","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":"bbe14d62-cc01-46b3-8f8d-14b6e3139350","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":"3a090c5e-0993-4c8f-827c-5d679ccb0095","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":"c8eaba65-d2b2-4be0-8baa-0dd3a27a3207","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":"e9fea7be-17c0-40ea-aae4-3fae87a21aae","block_type":"box","text":"disadvantageous to do so.","page_number":89,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"c941cce0-dc1d-4e40-a4b0-382a01775124","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":"69ade111-b531-4e9e-a2be-b6521481732c","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":"5f64dde0-5151-4f8b-96a1-f88ba781da8f","block_type":"box","text":"marketplace.","page_number":89,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"737f524b-cdb2-4aca-85bd-ce0f133ea573","block_type":"box","text":"Cash Management.","page_number":89,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"9f14603b-3f3a-43da-8144-51d0405e7488","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":"2f3748b5-854f-4879-9174-e50a24e4681c","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":"79c2912f-27ad-40d2-8e90-936467ecfda0","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":"23737890-7b52-48ae-95fc-7f342f640727","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":"02ae2c6c-b8eb-48c2-b2ef-78e98ff12648","block_type":"box","text":"II-3","page_number":89,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"50bae875-ca9c-4607-b4f3-2f304f40556b","block_type":"box","text":"NM1026U-6049097-89/259","page_number":89,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"1d494176-b6bf-40d1-a46e-d2ac77781446","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":"7776dae7-811e-4e2b-ab3e-678c198d4d4f","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":"33e0ef24-6895-48f6-8935-3ea71bdaf150","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":"716f648e-037f-42a3-9257-1019394343a1","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":"7607e012-3c4b-47eb-abca-7027ab3a6dee","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":"b55e9d5a-d98e-4627-9aa6-4b2a6da4fcb0","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":"873d7120-9759-499f-9ac3-df86baf27025","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":"5f29004b-e49f-4610-8d3f-3fb5e73aeb54","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":"77bdee2c-0d1b-4cac-b51c-3bae4d85fa74","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":"87510043-c278-4386-af65-f31d4abf06fb","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":"c4ce2720-fb5d-4736-988e-5e9e47951247","block_type":"box","text":"Market Securities” below.","page_number":90,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"66d3f8f2-62c8-4cbf-a197-39b3748eee09","block_type":"box","text":"Collateralized Debt Obligations.","page_number":90,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"27f4eff2-810b-428a-8792-ef7d8bc362fc","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":"feebf0c1-8667-461e-b5c9-c9822a209fdf","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":"7ff9809c-86de-4caf-be47-65c562fca13d","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":"a5c25866-4ced-4ee4-b049-a697c63c4757","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":"cbfb943f-d683-45d3-85fb-a81595c553d2","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":"4ab2f3ce-2f4d-4a95-b14b-ad2b3ac40175","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":"029bb11f-bcf8-4abf-8d3c-906b82d008da","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":"6074b0c6-d4c3-4a36-b7a5-7dc70d802e88","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":"216c68be-bea9-49f2-833c-b85eb2b2f4dd","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":"d71c27ca-d2c7-409e-a50e-edbf6cd1b5cc","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":"254600ee-d284-43da-89dd-208998de592e","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":"795b3667-d4ec-40bb-8690-2e3779e9cd7d","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":"2ae4d98e-0406-4c75-8246-45ce5716beca","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":"d4a0f9dd-a071-4652-a34a-c778e0d5662c","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":"b1d6404c-85d6-467e-823b-c8fc83773b64","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":"4b78d546-dea7-4def-acb5-ccbe0313e13b","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":"80f9d21a-5eed-4d88-af48-a676c9507aa3","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":"1a83523a-d87f-4054-b657-5ca263294630","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":"0be24f8d-0315-446b-b8b0-3a985a1dac4f","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":"13d9957c-4a4b-4498-91de-ee106f7f08f1","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":"a2e3d7af-cf5b-4ab8-a1d2-c1cb40352f0e","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":"a9bef4fc-40cb-4ca7-b116-2f8477aa994a","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":"57956b5d-0912-44b5-af36-252d96561b40","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":"0c98022a-99f0-407f-ade9-ab2591b71c1a","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":"6dffb9c1-b16c-4912-a6bb-c2142bfbf476","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":"5ad6ffad-4633-4d92-ab68-48487bc21d09","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":"0a73514a-4358-403c-b16f-5eddc8cfe7e0","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":"5d26a981-88df-483a-b0c1-eaa19bac9f1c","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":"c4db9aac-96f7-47eb-a268-51555823c26f","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":"ffde4040-bdcf-4735-91ea-1699e386ab3a","block_type":"box","text":"with respect to such payments.","page_number":90,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"adf36e79-6a65-44f7-b198-d4c241a1c549","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":"8b2d9f1f-1be2-430f-8b9b-136b245c5db5","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":"3a0170c5-9995-4432-b19a-ae65d0dab25d","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":"020afe01-00d3-4734-9e4b-31456216e5ca","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":"9ed37f37-adec-40a1-bddc-875ccf5229c0","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":"f68ed0d4-49b2-4470-9fa3-7598c83314c0","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":"56407b0d-f62f-4d8a-812b-f0baad410d9c","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":"70628cd7-af58-44af-a14a-53d725befb2f","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":"f5eb453e-3a7a-449a-935a-759355bcfe8f","block_type":"box","text":"II-4","page_number":90,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"ce78716c-0779-49ee-b26e-ce94bafac2e5","block_type":"box","text":"NM1026U-6049097-90/259","page_number":90,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"7d9244c1-0d09-4484-9849-31d53441df8d","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":"fd1def60-2f77-41ba-90d3-aefb33720eb2","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":"0236ddbc-9eaa-4c3e-bdec-1f0ef4513440","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":"8f6c7fca-2ef7-4aa6-8bb8-1c037435b7e1","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":"5a210ea1-c1fc-41f8-9e46-548a0f8b165d","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":"c3989133-2091-4637-aaf5-463c09ab05d9","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":"a3071b72-fdbd-4ad6-8ba3-b5471987e3ca","block_type":"box","text":"perform poorly.","page_number":91,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"cde35773-6e47-43a1-8b86-3ed674e8721e","block_type":"box","text":"Commercial Paper.","page_number":91,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"c993f28d-d401-4f0b-936a-205a0766a072","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":"f3379ceb-bd56-4a4c-8be1-0e3cb4450d53","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":"93956b35-912a-4468-bb6f-e947337c6d09","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":"10b88270-5f96-4522-aacf-fc2c0ade2543","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":"6bb559d2-b849-47c1-a95c-c1508a4762b5","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":"bf77c0c5-1461-42c3-af3a-b602e71c46fd","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":"fc4b7f3b-903a-4fd2-b473-d154b1b346b0","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":"e2fd8a7e-81b4-460f-82cc-593a0ee5c720","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":"2c56bf11-25e6-487f-9833-ea642ca3a38e","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":"cd68149a-025e-48a0-a400-7ab9b93804ef","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":"f75bdb2c-2458-4eab-a5e6-a19a96fd341b","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":"79f0cb06-08f2-48dd-82c5-62d712682e0f","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":"2b1a8090-e272-407e-90ea-2b2b3aabaad5","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":"681c1977-c859-44d4-a44d-c6f156a37831","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":"00b83781-ad77-418f-b113-627b8bb4c156","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":"50ce5912-a5e6-4d1b-9a3e-bd0bb4d6fdd0","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":"571a1366-9c71-429e-85c8-5c81f5ec29f6","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":"99287d50-305a-4622-9e02-8a838e409199","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":91,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"3bf2c7c7-5858-4d9e-b705-393d91e47d66","block_type":"box","text":"Certain Funds seek to gain","page_number":91,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"28646792-4979-4ad6-bfcf-28f08fc78244","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":"d6836565-3318-40a6-a1d0-04cf7b67fc75","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":"97d2e318-566b-4979-ae24-21bad6fb5aaf","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":"991f788d-896c-44b2-a269-7aa099ef2815","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":"cf442ecd-e8c1-4c3a-a837-a001c2be02c7","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":"9e2da840-3817-423e-89fe-ce6aa86d7568","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":"d36de07a-0e75-48a3-aef8-899729013891","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":"a52ffc3c-0ee0-4453-b786-110a31a98edc","block_type":"box","text":"economic variable.","page_number":91,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"b26262a9-8925-4f7a-b73f-1e18de368d14","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":"70797b4f-e791-44de-bbe0-e7a68f77d04c","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":"a78aed5c-528e-476b-84ad-eb98025026cc","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":"bc0688d6-6496-4cf9-ab2a-9cd4cb82a1c4","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":"da91bd15-d4cf-4072-9e4a-763bf4de9200","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":"6014f38a-8ae8-4470-bd9b-b5cac17013a9","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":"86574a3d-61a8-425e-95eb-755dcbeaba38","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":"d4d36baa-490e-4bba-8dc9-13dac8b98ed9","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":"2dbe76c3-c09c-4730-835c-f8149034ef54","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":"670491a7-1110-44d2-9e2b-654325037ac1","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":"a775e502-297c-4ef4-9894-79da8b9ace6f","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":"630ca553-70f2-49b5-8ee8-23ebd5e1ce33","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":"c3a9974c-d87a-4f17-9beb-15e0e1e4c747","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":"8465134c-87dd-495b-90fe-c781d3fb5d43","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":"5b6f1a74-0ed1-4c6b-afe1-f8dc44c4e841","block_type":"box","text":"II-5","page_number":91,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"0dffab32-5b8d-4fd5-bfa1-ad331b88ad6e","block_type":"box","text":"NM1026U-6049097-91/259","page_number":91,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"59129af4-0e25-4316-b9b4-ff42e10255c1","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":92,"box":{"x":117,"y":87,"width":218,"height":12}},{"id":"ed674683-a186-438b-85e9-51040d65d417","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":"7cf3fa69-219c-499a-bd37-974836902d5c","block_type":"box","text":"from regulation under the Commodity Exchange Act","page_number":92,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"80a026df-522d-41cb-b34f-db702499938f","block_type":"box","text":"and the regulations adopted thereunder. A hybrid","page_number":92,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"859b0323-d57b-45a9-9b44-d113d21198d3","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":"cbacadb2-690d-4675-964e-4d7d4f84d46d","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":"93ff0c0d-6a94-480e-ac85-5cc1c459be04","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":"735c4b34-fcc2-49f9-8b49-4cc540435108","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":"3cfa6bb3-7b0d-4dcb-be91-75a055e67580","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":"deebca15-61f3-4447-967f-65b95fc8a9c1","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":92,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"8f55f760-a047-4be6-b544-244d92a0b9c8","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":"f0f452b7-79c8-48b6-92c3-1441b7e2f201","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":"07c50c6d-238e-4c02-a814-44981984a653","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":"d81cc750-29bd-476b-ad31-f53d5c1bfe49","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":"c33ceef3-cbce-4889-8353-3eb26c750d26","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":"c56f4c09-e1c6-43c3-96c7-2b23ff37b537","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":"75c900f3-9fe9-4451-98c5-b98734f59174","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":"ea0bb8db-a1fb-47ec-b99f-7b37179f1c0c","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":"ed92ee9e-8e59-439b-a55e-1598e1f0ddc3","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":"74780680-b49c-4192-a4ad-c5da292fe837","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":"1cc29f34-6666-4ec3-979a-a32881a7fa3a","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":"83e7fdf1-c946-459e-9e76-bb6ca5628419","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":"d2561ed0-b780-4846-899a-dd6b94177896","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":"da6db875-6178-4a47-8432-6b6e60818e06","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":"96a85342-8e8a-43ce-b398-43e9c5207d0c","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":92,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"8374444f-7fd2-4a17-92da-ae050396f453","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":"17ff8306-c4b5-471a-a5f7-63e1a7512b06","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":"1bb99a26-20ef-41bc-a949-08ef7d62b0bf","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":"af446a42-0c48-456a-ae2a-aa2541d544d4","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":"3206f1e4-a9ae-4cf9-91c8-98ca993b4d16","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":"14b26666-de81-4dc5-8cc5-b0d6d90ec8ac","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":"b345d6e2-a20a-4f57-ac83-7c8a94d76c60","block_type":"box","text":"rity the greater of the","page_number":92,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"14cd4d61-2159-4257-a879-070c2a31cd6c","block_type":"box","text":"par value of the note or","page_number":92,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"2d4332f9-11ed-4e7f-b5c4-19f119297b98","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":"78927823-43ac-481b-b55b-2c0db0be63b4","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":"f1a53af1-af5f-4a13-9808-bb1b2d0d3e63","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":"f0da0ad9-a167-4c57-bd96-8dfb05e554c0","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":"83b3aeb5-6b08-40b0-932d-cabe730f8aae","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":"969821f5-48b8-46d0-8e33-f5dea5f8a7e3","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":"3c5790dd-75a1-47a0-9fbb-49d773657ab1","block_type":"box","text":"protection feature depends upon the ability","page_number":92,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"cd356b05-a000-4c13-b8c0-c19946b1624a","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":"bdd6a5fd-8499-420a-b71c-8fce16b28d3e","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":"6b9ad1c2-4562-49d9-b962-f42b4ea431af","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":"eeddce19-4451-4ffa-9fb9-58a271bf30ec","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":"024bbc4c-715b-4216-b1fb-b78088946bda","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":"4e595ac2-a674-4358-ae15-eaa9b13f86cb","block_type":"box","text":"potentially, an amount greater than","page_number":92,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"4180a8b4-7d09-46c2-b8a2-925d517a4446","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":"df3bbf71-6a11-4537-8e53-4e755d9086b0","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":"b8c8bd7c-0392-44f0-a443-8f2ab2a17917","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":"bc6cb856-8b82-4d8f-82b1-ed4a73e1a3dd","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":"a8cdd059-e0b6-4950-aadb-803570623489","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":"e02ffb81-4f73-47d5-94f1-cbc0e3532d12","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":"d40d57d7-0a91-4e91-8c2d-4914436968ba","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":"c331ec44-fe53-4849-b56f-38c715b10e2d","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":92,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"070fc1c0-08b5-4a53-b156-090f538d6989","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":"883faecb-a244-418b-8aea-78373e7f8d52","block_type":"box","text":"amount of principal that they may lose.","page_number":92,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"7919bc3a-2e21-4c72-a2bf-e2424a80e5c6","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":92,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"b06d0498-6553-4ed2-8771-caf290ed0076","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":"724426b9-9894-4703-85de-62da87b96340","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":"aa857ee8-63f9-4e15-bad4-1f0af0012450","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":"9ba09466-8e28-4186-8883-47069d163085","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":"ef7b1554-e1d3-425b-bdc7-5d6ca823ad9d","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":"52739714-5aa3-4303-bdc2-529549cb4f29","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":"748f212e-4f08-490b-b475-e8759ac0174a","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":"abad3774-2b01-4319-9aa6-187b96f21885","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":"463c069e-503b-421f-b8f0-4d3dce2d2129","block_type":"box","text":"believes are relevant.","page_number":92,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"8848a529-d7a8-4c03-a83a-4cc15b64ff66","block_type":"box","text":"Limitations on Leverage.","page_number":92,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"16738fa6-a941-4bc4-8bc8-41bfd1920795","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":"e42ff909-9d15-48bd-b986-10cd364baad6","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":"054b3717-979a-488d-8bc8-899d867f2aec","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":"eabd9556-597d-4bba-8633-1aab682032f7","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":"714e5e90-ac79-457f-816d-330f153f989a","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":"ccc572a4-f8bb-4f7a-91a3-f0f8a969c850","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":"ce0cd6d2-bab3-42d2-a326-6f0705d8310f","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":"3cb30d01-f498-40ca-b1e3-ad291e664a4e","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":"ea3f8a55-76a5-4465-b413-76eb8443e2b3","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":92,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"8f34ef28-9cc6-4dfd-bd63-8d6f8b4f63e1","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":"03169c39-1800-4c77-b97e-a9b76e75b010","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":"867ae074-00de-4623-bd85-441c08e1da8f","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":"8552dbb0-9b97-4b83-985c-b6c270673c32","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":"d77e8257-2544-4877-ab4e-1ed218a96343","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":"2f7df92b-0d6d-421a-a87d-b84f1596f22e","block_type":"box","text":"ty, futures contract, index or other economic","page_number":92,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"6266ae14-39b3-49cf-b6c6-12b24b4b3c9c","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":"d415bba7-4e5b-4f31-a7c2-afb7b7259c51","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":"fbb19c28-043d-4c7a-a934-edbbc9e5cb9e","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":"3c7cc81c-05c0-477b-887b-3dc2149480cd","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":"e0e8284e-8a69-4e01-86ad-e033410ad6fb","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":"7046877c-0df1-44a6-bfad-fa027c60927b","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":"426e0446-6622-4e9e-bba0-85727ccd8a34","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":"fcb017b7-30fc-4748-9c8c-7b68fb0bd24f","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":"df6c45c7-5e5d-4557-b1fe-620e2d11e781","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":"e0cb661c-0b25-4d2d-be84-2a9a3abbde33","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":"f7f0b6a8-07d5-4282-ab4a-a2e53d983927","block_type":"box","text":"II-6","page_number":92,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"28dc3db4-5ec3-4d56-a949-2046c11a7331","block_type":"box","text":"NM1026U-6049097-92/259","page_number":92,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ea41d318-12e4-4b4e-aa1c-0494d783ac7c","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":"8fc210ca-f572-418e-ae8b-3eb6ad6e6cae","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":"037048cb-d49b-4610-ae45-05e4610354bb","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":"468f2485-d8bd-4f7b-96c8-13b4acd4bfcf","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":"4db32605-7696-4001-b0d2-a4994d26a27d","block_type":"box","text":"Counterparty Risk.","page_number":93,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"d3cfe17d-377d-422a-866a-7eed81720ed9","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":"924abc65-14b2-4c78-95db-ef06af80d13b","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":"913b34f6-c834-4ced-8047-7333666bff42","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":"94c6ec0c-3a53-4d2e-8820-f5af16647d19","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":"7f4f9429-d70d-4f39-996a-85ff332e63ec","block_type":"box","text":"typically have high investment grade ratings (","page_number":93,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"a6326ff7-5b3b-42ea-95b9-554df2967242","block_type":"box","text":"e.g.","page_number":93,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"bc3f28af-f603-47a5-a10b-d48869811fef","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":"5101da65-c4d0-4dc0-a4fb-1e56249413d5","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":"17d0fa50-6897-4cf8-bc36-bc1e32def05e","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":"59276130-5418-424e-a10c-12b55b10b21e","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":"443da400-402c-4d84-96f4-d7fe9e3940c2","block_type":"box","text":"under the structured note.","page_number":93,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"fe2c23d7-06b8-453f-bc5a-028f2b81d8a8","block_type":"box","text":"Convertible Securities.","page_number":93,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"1430e48d-c26e-4413-a768-beea35fc9578","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":"3c29c165-cee6-44e6-8138-d815696c8dc4","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":"f16e359f-a4c3-4b8b-ab9c-5d5dd6003659","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":"7ed1ac18-4f44-432c-9332-fa3d348eaf97","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":"ed1089a7-889d-43cf-a679-a562c648b06f","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":"be78e821-723a-4fd8-aabb-da98d0a12db1","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":"c0e3cce5-1dcd-46d9-8edf-1a133244363f","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":"31a2d165-f4b6-425f-8df8-b29be426a9be","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":"60008a1a-5603-4b93-8954-3ee910d3ea35","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":"5d10a5c1-da54-4ea7-b0da-79d273de465b","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":"218ec39a-f2b6-4420-bb1a-2b9b3744ce43","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":"3489a958-9f34-4efe-9f66-a98e8092bc80","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":"7b9c433e-25b4-459f-b49d-adbb6508d759","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":"0f414557-9c15-4682-9825-ebff645c9e31","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":"fd88faa6-9b56-4ea9-91c7-3164b111ddef","block_type":"box","text":"security’s governing instrument.","page_number":93,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"61f62c6e-e255-4912-a74b-707114438163","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":"4adf30f0-bcc9-45c9-8be4-b03e3072372c","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":"76cd78a9-00c8-4079-a258-e6a22c2d99ed","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":"76b616b8-532b-4adb-b7e8-154086532169","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":"59acfee7-850d-460b-a21b-350fc41eb09a","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":"c44d79c8-866b-461f-a724-ffdacf91b80c","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":"485d6791-bd23-438f-95a9-5ed5908a7a5b","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":"d9c22240-02dd-4b50-8956-c0627f013b20","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":93,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"502cab9c-66dc-4995-9653-0a01252063ab","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":"596b1423-c039-4b7c-8acb-352125eb03e5","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":"c38e6e8f-6e8f-4b99-bb9c-3310e4ccb1b7","block_type":"box","text":"common stock, among other things.","page_number":93,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"040cbb91-125e-4c91-89ea-dd886681c518","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":"b6799ea4-ee4a-4df3-a6b9-79e0088e79ce","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":"237efcc7-e3aa-4a48-b430-a2f19d9d22ed","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":"c3764fd0-14ab-444a-9da9-197b2c1dade2","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":"562abda9-199c-49cd-9b2a-ca24a2200093","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":"821b0b9a-312f-49bd-ba98-aa23cde983a2","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":"71015a6c-74a6-4594-81c7-6c6fc483717e","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":"fe1a0057-9f67-459b-aa4c-b3c14343fd17","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":"1ab822ed-52b5-469f-8e57-73539b81b0e0","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":"1b6713fd-45ee-43d0-b869-f0672cb1e07f","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":93,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"eb54003e-3ce3-4d62-a1bf-62a90af9f697","block_type":"box","text":"II-7","page_number":93,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"6e89ffdb-d054-44d9-ac32-097120215a4a","block_type":"box","text":"NM1026U-6049097-93/259","page_number":93,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"68b52b7a-ac12-422e-b9ff-44b2cffee21b","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":"56403066-61b1-44a0-932b-cf0c7515ccc1","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":"96838f9d-9e08-4c2f-be69-2391bf9e6b98","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":"c0abdc31-f0cc-4590-96e9-95b18d968ecd","block_type":"box","text":"i.e.","page_number":94,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"41ecffdd-870b-4537-a314-a15ebf5aae3e","block_type":"box","text":", strictly on the","page_number":94,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"1905a2f5-8f57-4cd6-9229-557410006603","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":"4fad738a-d04c-4a63-8ade-3540966460b4","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":"094da441-d1d1-41ab-a56f-5ac086eff501","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":"ce3ffd0f-c7a8-42d7-b3aa-8cfc7bb8276e","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":"f47a1009-034a-4db9-8b93-cb2ca5ef7cc5","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":"b58f31f6-b974-425d-b0f4-1fbdee0cc8d5","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":"e0d8448a-69d1-470b-8496-ab3dc63b5eb1","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":"db369ec3-44a8-4cb1-8b4d-08584641d52b","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":"0498a6f6-2338-4c5c-92d1-a3d1648ae19b","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":"bc518fd3-fa87-41fe-9475-5e8b89d20869","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":"6be8e0f3-30c7-404c-9cd3-f4a091b9bcf6","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":"7fdd19b6-9151-420a-9b6c-c2a5a4bcf785","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":"f88d5dfe-fbbf-4979-ab90-7a5392ebdbfa","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":"e034334b-16e8-4d57-86b0-3c138a5058f1","block_type":"box","text":"securities’ investment value.","page_number":94,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"b241307d-13bb-4ed1-8c83-4771ef915f15","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":"d1c73211-e862-4d1c-8860-9b7a5a0ebbbb","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":"f1d85c4d-133b-484b-8fd1-b0216cf91903","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":"059baf7c-dc59-4cae-a010-f8ae46909a8d","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":"b683d6c5-0ca1-46b0-a7c5-f8ce4c6abb34","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":"230bab8a-c196-4843-966a-4cf226e7b450","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":"f4a678e4-f57e-4d36-b92a-f7db6cfa17f9","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":"20ab768b-a453-4eab-a3f4-9ee763e5d88e","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":"46900d9d-3ee6-4bb0-b2dc-e7900663b180","block_type":"box","text":"security under certain circumstances.","page_number":94,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"a0a93f52-fe73-4915-ac8c-155be2757423","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":"332a91c3-5df5-4cbb-b1cb-8cd16f9b0877","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":"01e2b038-ebc5-4dd5-b1a0-83e0dfd8db2b","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":"66d32ed0-244b-4831-8ec6-4be4ab00877e","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":"5112da91-07be-49f7-9964-108a3c221763","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":"81ecf9cd-6e85-43f4-88b9-4a823fd25948","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":"7082d6bc-9f9e-49b3-9ecd-d368f59e69e2","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":"e8411642-e846-4c06-a9ad-25f0978f7abe","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":"c7d3ad7f-bdfa-4dfc-bb6d-add76875d61a","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":"2d8b96f2-a893-468a-909e-44c8afc14b33","block_type":"box","text":"i.e.","page_number":94,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"451e0ea0-7801-48b6-a831-8f114440ae01","block_type":"box","text":", fixed","page_number":94,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"53c92a7a-5e30-4517-8aa3-80600e087c3b","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":"82a7480e-425c-4e02-8558-9a50801d3835","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":"6b1469a5-0e59-48df-bf72-29a5d8895846","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":"4398214a-124e-4509-a565-c1a63bf00f29","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":"193854e0-e987-4bbc-a46a-e48e80bba9ae","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":"155d62b2-8e6b-457d-8c66-ff577e2cbd5f","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":"a54343bb-666f-4bed-b43e-7abe7db290e5","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":"8db420aa-91ca-4e39-a887-57790c5f8f0c","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":"2006599c-ab19-42b7-9d9b-ab200a48c0e7","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":"e5570035-8193-4635-8e3b-a582f8198ba9","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":"25617930-fb4d-4724-b2e6-396480466f4b","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":"3f49428d-8e02-47c8-8ed7-534e916753b6","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":"8b1c4a0a-7a74-42d3-8977-58c37a296f40","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":"f7373b11-b64d-432c-8726-738c9af17aff","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":"51d20d92-1781-41cb-82a2-7250c0f14fb3","block_type":"box","text":"convertible security. Because many corporations hav","page_number":94,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"085caf82-3440-4a42-9b57-053a1f47ce77","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":"f8b0871d-fe53-407f-8ff0-1670e3cac664","block_type":"box","text":"II-8","page_number":94,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"3d6e9563-37b7-43a7-ae4d-c1446516fbed","block_type":"box","text":"NM1026U-6049097-94/259","page_number":94,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"9702843b-cb18-4e58-b457-2aa8a726299d","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":"88da074d-f562-4e55-9439-585905e9ea3f","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":"b28aae9d-5813-4f67-ad97-364bf1a11d50","block_type":"box","text":"income instrument to create a synthetic converti","page_number":95,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"816f53c3-9d17-4efc-8e7f-300a544b69a1","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":"8d46af01-5175-450b-85cb-334b285090eb","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":"da254376-690b-434a-ad7c-2c7214168981","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":"48b0a19f-2481-4e01-90f9-d7088ff2c20d","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":"751d5472-2e1f-4aa2-9b3c-40818784e6b5","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":95,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"cb83a613-884f-4e62-aa63-87497f1d309b","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":"34794c3f-52fd-41e1-adfa-1f95a4ea90d4","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":"ecff373a-4d34-4af0-9c5e-65ddd632d4db","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":"62164bdc-0591-4596-804e-368da1b22486","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":"59b43c55-61d4-472f-a461-4b39c0eb8046","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":"5e456134-bdd6-4e60-bb4d-ca354df7ef20","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":"75b37a73-5bbd-4c5e-9780-1b27dc5026b8","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":"1c2bfa09-8699-4e4f-9e6f-984d8a979be7","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":"b86d880d-b548-443a-83b2-d1f68f38766e","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":"ba00bc7e-5294-41f0-94d5-058729bdc0d7","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":"c30276ed-0dd1-4a3a-a8b1-93c144249bec","block_type":"box","text":"purchased separately and, upon purchasi","page_number":95,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"bec45bf8-137b-47e9-9f7e-9e38f6342d87","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":"5218fe59-34df-43c6-b548-4932ed62daca","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":"93d2820d-cf2e-4d4a-b1c6-9447de60b014","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":95,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"e1fe1f5a-05f6-4057-aef7-a805c6c88786","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":"566ba2ec-4e89-4caa-aec9-2388e96ddad1","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":"79805bc0-00e9-478f-8584-3314c81397fc","block_type":"box","text":"of more favorable market conditions.","page_number":95,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"7d50ac2c-3d4a-4ebc-8a85-d88fff8b10ea","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":"4cacfbbd-180a-4e58-84b0-b2255dce13ea","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":"63eea4fc-3d07-412f-9727-d5eac3a25b4f","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":"5b86fad1-7a75-4f52-8ed2-6dc767c80cd6","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":"983f8302-4b17-46a6-8d47-87b0e3001519","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":"d7a067a6-a4c5-4b0e-8baa-e73bc762a5d0","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":"66d73482-7785-4bd5-927e-5d057c7c0d07","block_type":"box","text":"securities outperform Treasury instruments.","page_number":95,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"afab18aa-293c-4913-b97b-ca1f701b33f1","block_type":"box","text":"Corporate Loans.","page_number":95,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"a1c322b4-f6e9-4c02-8fae-22cdd4eff21b","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":"cb18310a-57a5-46cb-a3be-b34e56ffd89c","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":"a7f946fa-7ffe-451b-92a0-c644e4021575","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":"a3662177-4a6c-4896-850f-f8bdd59045dc","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":"a98d562c-e419-49a2-865a-3057b2e0b341","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":"4449a4bb-0130-4503-a494-5145af9dec83","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":"f1409340-cbb9-4e6c-ab21-c268e9a450ff","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":"934cc752-7a08-4d22-9a4d-8255b0701f00","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":"0082296c-e931-446e-9638-8272c731f9be","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":"f237ba09-68d6-49d5-93c7-d007dc8c82c7","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":"b9ee9bf1-9b6a-4e50-901a-1dd2d16570ad","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":"1f5da470-aceb-47f1-ac84-c98265331843","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":"ca5b28be-d9f5-47ff-a46b-2199e3864299","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":"8bacc727-f649-4705-ad11-23dcc899285c","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":"0e111ebd-f9e3-44a8-a7e9-cbc59a161ce1","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":"ee653508-07f0-422f-a926-5abe7a9bc635","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":"b58e2704-cdda-4ec0-af96-d6cdf5b02c61","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":"d20cbfa9-84ff-4bd2-aa3f-b62c7ac24852","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":"19ec5b31-0e49-4236-ae81-05aef4ce4697","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":"9acee1dc-8631-4f1f-a58c-6e3d0fdfc641","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":"f6b302c7-7807-4dda-8cc3-e6cfc7c5d74c","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":"0fbba238-4ffb-41a7-9409-cede7d167b5a","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":"a731c67a-784d-40a5-8d69-4845303d485b","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":"9f2addce-979b-4361-82af-917f0d67d4a9","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":"bc26515a-3431-4dfc-9dea-3aa96a6086bc","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":95,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"21522d22-ab70-4252-9eb9-0d91c0816b6e","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":"0b78d754-6f97-4709-b76e-8801a3333f0d","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":"2899f77b-2540-4f01-a685-961b6fb60632","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":"45bcfb3e-d587-4162-a3be-ee0f32eecb39","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":"a85ef62c-83d3-420c-bb81-4168c8e409f6","block_type":"box","text":"II-9","page_number":95,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"65d771c7-86bb-4f20-8076-df0efb236c59","block_type":"box","text":"NM1026U-6049097-95/259","page_number":95,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"b049430b-46e4-4eab-8b4d-cd5100c434c3","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":"2fc3fa69-011b-4f25-b5f0-54ee2c3a98d9","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":"f34c411a-9c6d-4ea0-bfeb-4bd0cef37fc8","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":"b2432e97-211b-4d0e-8693-ef5f480479ca","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":"14be09a2-c25b-436b-86ff-5fa30852ac0d","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":"561b836d-358c-4a46-aac2-2a80da5921e4","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":96,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"88645f40-dc55-4ebb-935e-31ae8e7e9837","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":"56499346-2dd2-4e55-832d-eab16b988008","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":"b4da7307-250b-4e14-8000-99f8a3af37cc","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":"8ea4e3b1-4b70-4659-a122-a001ce192cc9","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":"7e924c73-12ce-43de-b2b8-91b838fd0cb4","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":"8afe6637-558a-4c32-abd7-c12ef7a15a7d","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":"3485e810-152a-4a17-b3ff-a8889f69dcbd","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":"b2061ecc-2560-4a48-baab-3faa399d6080","block_type":"box","text":"interest during the delay.","page_number":96,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"142fa2dc-5095-4374-bd98-7dca926c53e3","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":"aa7c0d2d-b52c-43ed-a523-bd7ef7538da2","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":"594f1f3c-f123-4c88-ba3c-a290eb041e16","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":"419c4287-cec0-4daa-ba2d-f73f9be9d409","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":"bf005dc9-c9a4-4b20-ae7c-eedabb46ac1e","block_type":"box","text":"lenders.","page_number":96,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"3dcd555c-5f2a-43f3-9463-91d471c406b1","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":"fb0378cc-540a-4eba-b166-b00d795bc89f","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":"f13b487e-f631-4369-9ef7-67a1c0160078","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":"e34aa878-e2b9-4920-9fee-891a4b291e18","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":"5fe9b5e4-82f4-414b-8a62-9e8b8f429ae4","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":"89062d3a-f952-4e7e-855f-7020b3d6e654","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":"2e906eb1-1a81-4de8-b623-77ddf257ab66","block_type":"box","text":"Direct Lending.","page_number":96,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"34bb1086-806e-4e72-8f73-01df2764b660","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":"dabfcb7b-13db-46a1-a2e7-7514f012dfcb","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":"4bd635c5-2505-4ada-a01e-ae7c2fe27b24","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":"7102e464-297b-4452-83e1-8176d608b7c9","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":"1c832e21-6454-4c48-bcf9-c5c767b1a0ca","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":96,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"763aba35-7eeb-4d60-a1c5-ca102dd38649","block_type":"box","text":"and owned by or otherwise affiliat","page_number":96,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"5fa9c063-45ae-45b5-bb6b-a2c713b3be37","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":"cdb29465-4d51-43f8-8b79-4556444d682f","block_type":"box","text":"direct loans are negotiated with","page_number":96,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"f5218091-7d3c-43da-9785-cec8f9280955","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":"1d4e0538-80a2-440c-af77-7ffc74fc91b2","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":"58dbfae8-b91c-4493-8ce5-4d5f89fa3dde","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":"685d0e45-1352-4b13-b30f-f36dcb29d2ed","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":"a2e17bfa-4aed-4f12-9e0a-316b89a104c1","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":"bb98ec6b-0a78-45a9-9824-c82fdd0a0185","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":"d5519332-b6e3-49b8-ab30-2d6208d95db3","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":"2d438e0a-e483-4196-99e1-f4e6e0af158c","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":"96d46ac0-acaa-4c62-95e8-c39ebf9e890e","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":"85441264-0c0f-4157-8b0a-dd3bc4a16792","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":"47c6de0e-867e-44f6-910c-273f2fe617e6","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":"0f3db7ee-7500-4664-8d49-a9176275df26","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":"c55c49d9-1e25-400d-b4a8-67c229285d84","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":"18dc5a35-51d6-4db6-abb1-c950099bed01","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":"ecde932e-4bb2-4224-8be5-b717fad959ff","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":"a11790f8-f96a-4bbe-a85d-751b453f8452","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":"d755823a-524d-4e4c-a705-da0424455a22","block_type":"box","text":"II-10","page_number":96,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"971c0d33-6075-40cc-9ea5-cf1a424c6ebd","block_type":"box","text":"NM1026U-6049097-96/259","page_number":96,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"5c9d759d-ca85-4620-96ca-ee2fcf999661","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":"e94b756d-2d7d-4baf-b619-d31a65d45126","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":"f32eb478-3392-4eea-be13-5c5c62061d38","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":"7f83782b-4eb9-4643-814b-7a9dc7a67ef4","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":"a47064fa-0a4d-471d-835e-fdb2ee5e6c82","block_type":"box","text":"Credit Linked Securities.","page_number":97,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"f8c36021-20a7-42f6-8584-77f9cbc06b8e","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":"5535bfa6-649e-493a-b034-8ba4a4c75b5c","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":"89b9151d-bad8-4635-a26c-e3a9d6c64c30","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":"2b8dc21b-1aaf-446c-96d2-c107ea41d246","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":"cbb8d3a3-01ae-40ca-a307-61df40aae1ae","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":"0c513bb9-6654-4b9b-9864-4550a5596046","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":"dc8a6358-4bfa-4bc3-af1f-7949ee2c8133","block_type":"box","text":"not available.","page_number":97,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"067f15bc-bf33-461c-b42e-e7e8317f06a6","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":"8a27557d-4c91-4278-b7f4-dc5e68aa83ac","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":"0fc72c87-c25f-4c87-a129-fd02ce53d73e","block_type":"box","text":"of the security.","page_number":97,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"f55bb9cc-eba3-4bc2-9ee6-4fb5e2296b72","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":"bbb6ff3c-29a5-4897-87e7-abf877fba5cb","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":"bc3ed090-4306-4b4a-aa8b-78644c9fd5f7","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":"191a2a34-6360-4f4e-8e8e-674251da6fcb","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":"957259c5-09c4-4233-957e-9b015ca0f05d","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":"c895a986-28ae-43c0-a3b4-5f00a0b4a7e5","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":"7447fc0f-e529-474f-8c5f-dcd7f447dfba","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":"fad207be-dd3f-4a26-b4a3-5294684c97cb","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":"2123ef4b-1433-4006-bc2e-0090a734d6d6","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":"d6053a17-c474-4c5c-a66b-3b9d176128ac","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":"36d86fd3-6604-40a0-b0ff-10cb7176dcbe","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":"f7be7d27-44b2-4620-8de9-cde05fee7462","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":"33e9e66b-aed9-4f62-acb2-8fd271b700cd","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":"6b0d987e-d37b-4a24-a1e0-3240698a7cdc","block_type":"box","text":"constitute illiquid investments.","page_number":97,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"140007a0-1e7a-4d7f-a5bc-ae1a54b57240","block_type":"box","text":"Debt Securities.","page_number":97,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"dcca98dc-f58b-4a52-a52a-6fb6e68eb560","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":"76a1658c-3f58-422e-92e6-1ce84dc91bbd","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":"a335788d-afb0-4999-aaf5-d17fd10312b4","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":"6e721fee-b8e5-4ece-a9da-97453e573042","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":"a2aa9152-69f3-4164-80f8-1efd51f0c27e","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":"0b6f4eff-3ffa-442c-bdea-3b863f5d14fe","block_type":"box","text":"Securities.","page_number":97,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"b96c1d17-0ef6-40d0-b55e-6a1d47d232a2","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":"556082c4-ba08-4586-bed1-c372bd085ae9","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":"32444b64-05be-47c1-86c3-290ce3246302","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":"dba1adbc-1692-4cef-b41a-b9bb1aab9e96","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":"6c1f1592-e949-4b9a-b85c-483add776459","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":"95e402c5-5656-490e-8abf-7071a157caf2","block_type":"box","text":"securities.","page_number":97,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"4425913a-760f-4891-8db3-95dde98b262e","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":"9e66d927-cb60-4e0c-9cbb-18adfc62d871","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":"1a54f955-5ac9-47dc-bbaf-b19b92dc6120","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":"04682acb-3830-45f3-b00c-4a63d97f3bf6","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":"901c4005-8c3f-431c-8c32-115d9e872fcb","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":"457f51f8-354b-4ca3-9f16-40f8c467b1f7","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":"76e101c9-8778-4068-b260-fb53d2210b9a","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":"35e7c246-f570-4f78-93ea-ef00af3968bd","block_type":"box","text":"II-11","page_number":97,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"888af610-5423-4454-88c7-110eec4e0a90","block_type":"box","text":"NM1026U-6049097-97/259","page_number":97,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"ed37baf1-d7cc-4d6d-bd8f-408af5b83410","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":"e040ff45-145d-4790-a40c-405d9cabdb26","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":"c84786dc-55cc-41e9-aef3-4c9d51b6491e","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":"6d1137b0-3eb2-4216-9150-eb5a7e787705","block_type":"box","text":"Floating and Variable Rate Securities","page_number":98,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"8f17eaa3-0b5a-45fe-9681-bea228b57af8","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":"8d0f1431-c85d-4162-be23-75a32ea4d9fd","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":"2f487fc3-129a-42bd-949e-fcf0e78ea365","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":"36d70a2b-2104-43a1-ab9c-a234222065cb","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":"14bcab81-9850-4efb-b494-3f61aee7231c","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":"b2c119df-7d7d-4915-b32d-13e94d71b350","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":"bb20bbed-9b32-4427-8038-a643cb59d9d3","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":"b006aa81-e006-48dd-a598-cbc0ac7318b1","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":"4bee093b-c26f-4dc4-a5e2-92dd7180a66c","block_type":"box","text":"rates.","page_number":98,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"67e78592-3ef5-4897-a87d-5b9d5dc28589","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":98,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"c6452b9d-4de9-4e9e-af6c-1c289ac9bfe8","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":"56804e2b-4c70-4d62-b151-1c215b846e7b","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":"f3903962-f114-4bc6-908c-002b999a1987","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":"b699b5d1-8d46-42f7-94ee-2658622623da","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":"6e545c84-fde9-44f3-b123-c3843fa3e283","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":"e3b7e6d8-699a-42bc-8e6d-429ea161ac36","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":"d7f00a06-7aec-4137-af81-d790c0e35999","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":"2b75780e-58b8-4ea7-bda9-49fdddbaf141","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":"52a855ae-2da2-4645-be70-c764e1f212f6","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":"4667b0eb-f3e0-4c05-b7e9-25c119dc11e9","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":"ba5fd0cb-7b11-4697-89de-44298b01b8a0","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":"f9a0b368-ef7a-44df-92a8-593426023cb9","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":"f8109ee1-c581-4404-9682-6c78ab06bd5a","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":"2b3cc0bf-c7f2-458c-9555-f0bfbaf33a74","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":"49220ddd-4716-4873-8cd3-fda26848831f","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":"942acdbd-ab1a-4b5a-93e6-ffdf7382ba86","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":"0e54dbca-9393-4777-b96b-bf9964af60b1","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":"c1252109-c7cd-4ce0-ad06-e8285417d8f5","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":"602f5351-8d4a-4b50-b23f-57ae26d5d919","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":"89d227bf-59f3-4cb2-b2fb-4287e4c370e0","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":"1076e93d-579b-4d73-816c-5c1c56bd8449","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":"8fc2da6d-0f15-48c4-97ac-4ef4f9a835f6","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":"fc7710cb-684d-423d-a53d-b4b861ffc65b","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":"94549b26-bca9-435b-9273-123486831d91","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":"7471f37b-eb24-4200-8301-a271304a443a","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":"151c48bc-2afa-4eb4-8556-ee21aff8b20c","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":"e8863a16-d024-4bb2-b661-7ad83d116fcf","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":"5b703982-35d2-4158-8ea5-9085bf0f35e8","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":"1bda8ae0-bdcb-4208-a817-2d2fb698dd48","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":"966bba7c-c2a0-4886-b409-490f842710ee","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":"722a3b04-dcf4-464a-b0c5-3bc11ef8a8a6","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":"786cba4e-fd9e-4277-b5ee-ff4539bf46d7","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":"286dbc18-2e47-4f8c-b7ae-eeb56960c2d5","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":"f71bb4a8-8304-4010-ac09-52f29be8cbd5","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":"4eb7494a-bdff-4e31-a136-477be25d60a2","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":"33b838ef-8d70-4239-8b60-965065949d15","block_type":"box","text":"II-12","page_number":98,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"56136a0a-851f-434e-ba11-3efa78841d88","block_type":"box","text":"NM1026U-6049097-98/259","page_number":98,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"0351716c-fca0-47d9-80bd-8e5301fb624c","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":"73539ec2-b57e-4980-bcac-6f6432761c12","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":"40d61bec-93eb-46f1-8224-a619e5940b56","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":"74e18a49-ec24-4740-aee2-6374ed616a34","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":"13bdf76b-ec4b-4fd4-ad39-55f9bb2f5036","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":"17d24626-b321-44e2-bd30-a84aff9099bb","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":"16a7f267-8533-48ac-9f47-ed147c3124c4","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":"359312ab-1565-4e4d-a682-f704df857d90","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":"892a97c2-0ed9-4810-9ccf-941bfe4996b2","block_type":"box","text":"United States.","page_number":99,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"07dc8019-414d-427b-97dd-24b1a1334557","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":"79aa37e4-c948-4fb0-a652-98a9ae0522a4","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":"5d572f81-6c69-4643-81e7-754b0bfc059a","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":99,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"5e8139e9-e433-46e3-9a24-15d39ed35de9","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":"616a0fe1-773a-48de-91b0-4615448824fa","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":"b7266479-3e4f-4894-8b86-cf735bed95fc","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":"fa1698c0-deb5-4779-bd52-ff7220465739","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":"6535effa-1a1a-4695-9b78-28b106751cc9","block_type":"box","text":"i.e.","page_number":99,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"5b9dff18-dd0b-45c8-8825-75722c8ada1e","block_type":"box","text":",","page_number":99,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"3dad3a4c-124b-4134-8204-99b4caf28999","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":"a07a5992-1454-4319-bff8-bcd9f93d76c5","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":"b0c9f28a-ebb4-40a2-bee6-44d1f7197b50","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":"60488aab-4dd7-4a1d-80bf-2dbd186ffdcd","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":"13e67142-3aa6-4963-8cfe-fe8e6e483258","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":"ca1f6a92-58a7-4d16-8b81-b0b3e72bc711","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":"5f99754a-5eff-4566-ab52-0eb11341ed9b","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":99,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"d01fc2ed-ec0d-4e55-af84-6f82011d6008","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":"62ef90d7-7a09-4d3b-aed3-b5621b64c704","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":"b5b2a089-c934-47fc-9ffd-48caabab24ab","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":"8c597d53-7800-4056-872d-8ca969451684","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":"70a4e04a-cb85-4829-9bb0-0a4cd2f77d24","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":"64d784a9-4209-40e1-987f-37af1d2cd6a6","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":"04420649-87ba-4f65-8b5e-3845b087cb6a","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":"bd14cc37-a76c-4617-a845-5b63c4f0d810","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":"b548595e-ad49-44ea-949d-98a46f063c91","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":"5f31d16d-d008-4bcd-b6fd-f529e6b7a66b","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":"5bc6eaf9-8c4e-42cf-853b-1154cdec58ed","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":"a460e25f-584c-4aeb-b014-8260725fd8a8","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":"6b41d42d-f34a-406e-888b-deee4e425c38","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":"a8e58f02-ef83-4fca-ad84-5a63dc3fbc1b","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":"0d6fc9bd-9b6d-476b-8897-180281de8ba0","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":"777324f8-e1a1-4208-a0e5-2e6ab9fea38d","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":"bec652a8-3aac-4dc8-97e3-eaf15614aec4","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":"2d1c0b34-6e6c-4bde-8689-dacc80aa7126","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":"6a13e057-2d1b-40d4-9ccc-e13aedc97c29","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":"bf74b582-923f-48e9-ba08-aead5e63fb63","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":"1029fc0a-1c7d-426d-bcf8-8d34ab0f6066","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":"f926a973-af52-4294-aeea-5659c8701c2e","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":"8e2cfa7a-eb1c-4908-a347-f396e09a0a16","block_type":"box","text":"reorganization or takeover.","page_number":99,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"0a4b4484-9a67-4929-8dcd-af3acc3f609e","block_type":"box","text":"II-13","page_number":99,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dbb9de79-6651-4a14-91e6-5cdedbea1923","block_type":"box","text":"NM1026U-6049097-99/259","page_number":99,"box":{"x":757,"y":969,"width":151,"height":7}},{"id":"c9eb2f96-6cf9-452f-98a5-bcb0716a114a","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":"7e5aa6dd-7abf-4fde-8894-81c6c6091726","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":"5adf8112-9919-40c4-947c-a251e58ae4d6","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":"ab41a7fc-794e-419a-9bc5-b8cdada8fa72","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":"813b451a-11ee-4e3b-bbb8-cb65b4f469ec","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":"aa1c655d-501c-4149-89d4-210647048f96","block_type":"box","text":"securities.","page_number":100,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"c5e045d5-fd25-4231-9e25-01248cd3e165","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":"916c3c90-c787-4614-897a-66f8ed380edc","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":"60b43c6b-4bc5-4d71-92ab-8db77bea2c8a","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":"f689fd7a-cb77-46cc-888b-642a386a3523","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":"2f7fb67d-1ead-4fce-9bc3-a25c3049727c","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":"fa26fd1e-ab9f-493d-810a-5d8629093963","block_type":"box","text":"income securities.","page_number":100,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"37587e03-dbdd-468d-b1fc-a9bdf8979301","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":"19cd4754-ebac-447e-b79e-29c1469175f7","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":"ed194847-9702-4b3d-bfee-2133b0c9974a","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":"212e313d-446d-451a-963f-2956bb871942","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":"13aaf0cf-7821-48c2-b9ce-bcc35823fc47","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":"e216a76f-aa95-4bb5-adb9-c330c41f6f92","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":"6a278e28-a807-4035-9826-bfcd7fb86b85","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":"30075f64-5fac-491a-96af-7fac77183a14","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":"2303585a-b583-437f-864e-3d29f8dc2184","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":"86183e7f-7330-433a-90b7-4ac57f47db5f","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":"5fac3988-d0e4-4557-8459-b3e7b1ff3867","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":"072a48fb-3428-45dc-b079-50a125668485","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":"aaa22dc1-bdaa-4fd9-95d8-d1b8cffe0a71","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":"734d7761-0057-4d8a-8418-75b8d1d9f0ca","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":"05e96a14-2092-4a75-abd3-b7e885ff2dc5","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":"09bcb09e-e0ef-4d9b-8f08-f45057c788c6","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":"a84317ca-f6d1-4857-90b9-6042c0fba414","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":"9efb10a2-3fbf-4341-ade3-d2c2f8406d2d","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":"5313a4b4-6dc9-44be-a4dc-500729f46183","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":"53130b2d-004f-4571-825e-dfc0b78e08b4","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":"b49f7af1-6b50-4648-b1b0-10809570ec56","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":"b3e6ff0b-0cac-42be-b079-efcf02cd4488","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":"82581647-c807-4152-9eaf-8d2ec4b7e393","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":"4748c60c-88c9-4fa8-bfc3-bd4dd4761ed2","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":"99e6d861-5007-428a-81be-4db109aa59ca","block_type":"box","text":"important role in determining such valuations.","page_number":100,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"c60ad3fd-11a7-40d2-98d9-2e35e7fe2961","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":"ce3f37c1-7b30-4c98-b51c-f23fadd1e9ee","block_type":"box","text":"new terms with a defaulting issuer.","page_number":100,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"7719727d-1d5c-400b-a38b-da8e28932428","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":"31554fc2-7be7-44ad-8caf-9c9c1c309853","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":"f50200ee-ff27-4e2e-a5be-5eec66d73bd8","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":"4ac0faaa-95b6-4a23-97b7-b5a93e4b67b3","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":"47d49ced-a8a0-46b5-8b9b-8be69d290265","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":"97bd9677-b437-4b2b-98b5-3ebf2d838281","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":"8f35b58b-e2f9-4a8f-92ab-f96165d258b4","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":"d0b79402-ef12-48f9-b130-662ba2f2d967","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":"e9ee3b48-c7c4-4430-8744-e75bfda520f0","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":"2d08ef4a-1e23-431b-9b36-a58786c22efa","block_type":"box","text":"past.","page_number":100,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"827c4883-9fec-40b1-8ed2-6f5ff1aa1000","block_type":"box","text":"II-14","page_number":100,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d847bc3b-f3fe-4cce-a94b-f83eaf340660","block_type":"box","text":"NM1026U-6049097-100/259","page_number":100,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f62502a1-d024-468a-87ca-be5ae6a027fe","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":"9097db95-e3a6-4e16-8465-fe30238a40d5","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":"d85d6bdd-b0f4-4914-91b7-86e91b108b0b","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":"47b2a3d6-64aa-4ae8-9cb2-d0e0711580fc","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":"cbe51e48-8636-49b5-b5a2-d28e99f5f3a0","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":"e7332ad3-722a-42cc-b9fa-dec5c0fe085b","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":"59e8086f-d0dc-4db7-bd66-0e2103fe29ba","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":"8033af2e-23ac-4439-9239-8066ec6b57b9","block_type":"box","text":"securities.","page_number":101,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"295c231f-3b62-4e28-9d9b-abda42304be6","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":"ec237dd5-5dcc-4948-a309-291bdecdc8c3","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":"260ade69-afb3-4d00-ab25-22000f72d94a","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":"5a5b4f76-345c-495e-8fda-da65fc9de49d","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":"7905535c-eb62-49b3-8f4c-8cd4c6ba3aa9","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":"fad6b229-7e64-4d95-b3fb-78e5f4f91148","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":"fd951795-8a04-4958-b74f-eb39ae2f0daf","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":"88588f36-062c-4f01-917c-ba5ddfef4004","block_type":"box","text":"Fund should continue to hold the security.","page_number":101,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"9d2d862b-26a0-47f0-bd75-988648119118","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":"744440d9-c098-416d-b651-afa8c8272737","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":"6e1a827b-7c6b-4016-b408-5b0cccacc7e6","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":"14e95dcc-34ae-4a04-b2cb-dfea8cef54cc","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":"5f06bd85-072a-4f4e-9f68-17a5d0d16cec","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":"8ae37b83-189c-4cd6-b7da-d1886142e0a9","block_type":"box","text":"Mezzanine Investments.","page_number":101,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"4fa7ac09-a6f6-4db5-9441-56eb7318e04d","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":"b0328a45-0133-4d09-a17d-95e36a53cc1b","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":"14e23279-5f80-4f0d-af38-39deee0a3c75","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":"df816d13-74a1-49bf-90e3-95da66e78300","block_type":"box","text":"with an equity security (","page_number":101,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"40bb18d6-480f-4d80-b198-2fe1660b7024","block_type":"box","text":"e.g.","page_number":101,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"a2757c19-72a9-4532-8159-0d93264ba1ab","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":"5a0feffc-0bfa-495b-874e-ef4f47b0f48b","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":"fb12d210-41d3-459a-a6cc-5ae13e89f270","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":"441e8a9e-ffd8-4ac6-a7a2-95329a79c72d","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":"82d63be2-cb9f-4275-a9f9-f0f450a7f8eb","block_type":"box","text":"issuer.","page_number":101,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"ea1af0df-ffe4-4f30-80b4-37c9adffc0fd","block_type":"box","text":"Pay-in-kind Bonds.","page_number":101,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"9244e405-33fc-468e-9b3d-a9ad9cdc8dcb","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":"82fe10a5-2051-497d-8516-340e0533c8fb","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":"be284745-be4d-4b6c-a0a1-1ee59098b3b8","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":"762a2a67-c4b8-4629-9eda-61b4f3f3ecea","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":"c2a86720-0ab3-4f70-afcc-1e19b337e5e2","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":"842ebd9f-c794-4174-b8aa-239426948dd8","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":"ec008239-13ce-43d2-8ec5-d0e9a76c9a5b","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":"c2c66d2e-8f0b-4a03-b92f-901decdc8f7d","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":"fa7775f6-04b1-4365-8701-ea2658572672","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":"7c085c27-d44b-41f9-a5d7-3feada6f823c","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":"3a790e20-de6d-46a4-a1e0-c9a6c293d6d5","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":"8e7a4389-de5d-45c1-813a-c837e3c51788","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":"cd5a0fd6-f3ed-49e2-a921-0e57fa7d7a34","block_type":"box","text":"Supranational Entities.","page_number":101,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"0cd6c837-4e66-4f54-b3b1-449f59eb4a4f","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":"e1c08f3e-7f4f-48e7-bcb6-96a2a2bc00e4","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":"6570879d-2024-4488-ad12-3709ef9099ad","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":"871e9429-509f-4322-8627-3b2d0fef4214","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":"292fc21a-d9c2-4c3d-963f-885bd2e8a2e5","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":"ef01463d-fd39-41da-9915-62624db63940","block_type":"box","text":"II-15","page_number":101,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"267564aa-1876-486f-bc01-3c6701d9a861","block_type":"box","text":"NM1026U-6049097-101/259","page_number":101,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1cdf30e4-7352-4ef8-bc67-e83102cf3c4b","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":"44b968ff-7ada-42fb-8e76-0ab41d16a0f0","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":"81d7d31c-2390-45d5-90e5-f053fa9df84a","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":"90955086-2d81-4e2b-a5ab-19250fcf8216","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":"398932ef-c0f8-4596-a118-70eadef827ea","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":102,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"1978b575-4aa4-467d-abb6-ed7ffa69ab0f","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":"13c51693-64f4-4079-937f-da7f4a0da4e4","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":"268a4a1e-0677-45dd-bcd7-deb02a5d0ab9","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":"a650ab49-7d71-4372-8050-5df74d3a85f0","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":"3be0030a-594f-48c4-adc3-35bde2c2d9a7","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":"d7eaab8d-30ce-41dd-93e5-d45434b7d22b","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":"63f14dde-dec3-4176-94aa-2ea531768b02","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":"7f78ff6f-9031-47c3-90ab-f66b0981e272","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":"8a764cb3-9e89-43b2-acd7-82789d90dac7","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":"683c55e1-e9a3-4c9a-acb2-e9670ab96e3f","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":"616e62ff-3762-4539-95a0-0a36dd515f8a","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":"72670506-ad6b-471a-93cd-58d1fe8136da","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":"d26c031b-58f3-40e1-b805-b3de2daba41b","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":"af9032ce-4708-4de2-aff2-9a7c63ff71ff","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":"e8c31a3f-9219-46c7-ad5d-3770fa1868c0","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":"629c7898-8825-45aa-aca4-3e70116275bf","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":"2c59a1fc-cd58-4cc8-87ec-af87b91e43fb","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":"76aadd2d-7962-462f-b20d-3100c5473867","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":"51866a6c-15c4-4613-a174-bb4a9e0ece8e","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":"9b28e0fd-1729-4312-834d-092cb6cb4c3c","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":"460f2f8b-672a-4478-941b-edd618c09703","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":"fba4ae93-7b02-420d-aa30-5c067f36555a","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":"06e06b32-89e5-4b3b-9a0d-ba772126c1eb","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":"d91bb537-76cc-46f7-8527-45b727a9dfea","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":102,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"0d285e57-78a8-4371-9a73-19bd56cf4061","block_type":"box","text":"Derivatives.","page_number":102,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"ce0094d9-80d8-4c38-bd67-32ef3403ad20","block_type":"box","text":"General.","page_number":102,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"844c6b00-f15b-469c-b17d-6c10eab6fba2","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":"defea559-5672-4063-9d8d-e045d788b23b","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":"58634685-a319-461f-92fb-1ff85f346dd3","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":"5f192ba1-8176-46eb-8a17-7296dc0f931c","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":"b37b2ccd-c3cd-4b70-ab65-92ada4f15954","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":"21ff110b-ad55-4d1a-859b-8e9a68a470ec","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":"de337367-0cf1-4fe1-9fe6-542c83e7c0f8","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":"341a477a-0585-4084-912f-776d815176eb","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":"6e16c578-f243-47c7-9fb5-97117a201443","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":"351a1991-1318-48a6-bb61-eaeaf79940ea","block_type":"box","text":"i.e.","page_number":102,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"4236388f-d74e-4fe6-bc6f-b14417b40e3f","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":"e7a897b9-d517-4eae-9b9c-ca0a699f0ca2","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":"8861bb2a-04c6-4ffd-8a83-44d3befacb2b","block_type":"box","text":"Hedging.","page_number":102,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"94c29d6f-42ef-460b-92f9-de0c29e727cf","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":"f4406108-3f87-41c1-9472-895e9b627622","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":"ee4e2be2-127c-4c7b-b534-75966da91592","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":"a2125980-abfd-4649-999f-aa599f6ff68b","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":"7696b149-5274-49c1-8b34-4f778418fd5c","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":"01a5a537-84fe-47f8-a7ba-40b137822d1b","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":"46395c0b-baa9-4604-9fee-8b27465ad18a","block_type":"box","text":"i.e.","page_number":102,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"5270cd77-0abc-4118-91da-c5cb0be454c2","block_type":"box","text":",","page_number":102,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"9ca687a4-d44a-4c76-b864-d63c7e7d2d5a","block_type":"box","text":"the risk that","page_number":102,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"22f69a12-a7e1-4f98-b8f1-e4787f35c5e2","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":"c0c61cc3-cda0-4498-a7ec-856a2013c5b5","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":"ff38d8b7-74c3-4d52-b1ae-ade6bec7eab6","block_type":"box","text":"II-16","page_number":102,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ad30914c-dc55-4451-aa11-7676cbc54f55","block_type":"box","text":"NM1026U-6049097-102/259","page_number":102,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b9fc184e-8d1e-4568-8a80-0529a20f80ef","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":"6606cb05-23d4-4c88-9fdc-feecb6865a40","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":"e441bd3e-fc62-4d18-b8a0-8839feee99af","block_type":"box","text":"Speculation.","page_number":103,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"b1beb493-c095-4ced-bdd3-b8f0b1623846","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":"36cb201a-d069-4117-80f2-18381a1f9fe9","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":"8b06dd82-3694-4c4d-9370-f7f8f271332e","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":"3250fd33-0fe7-4d08-92dd-399ffc148b18","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":"3733f36a-e33a-4c82-9fae-5ba28717a572","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":"6dcb4f4a-57e2-4199-90ed-64844b05d333","block_type":"box","text":"Regulation of Derivatives.","page_number":103,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"f744c37a-7521-42fd-ae0f-debd46b3a8b1","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":"882b9faa-5b07-4bb4-9901-00912754194f","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":"0261ee40-74e1-45c2-93ec-eb2368df1b1d","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":"fd7d6140-0cad-4b95-a2bc-76c96cdcf892","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":"d36d6273-8a82-46b3-a026-b5ba78042e2b","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":"86189d5d-a055-42de-97f9-e134721233ed","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":"ba502ea0-b869-4bce-8573-54e47f85be2b","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":"148b4861-5050-4acc-a7f1-68f8176eb75f","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":"c56380a0-6140-49ff-8682-2ae60de1531a","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":"48e48fa2-96e1-413a-be29-8af5bf883ea4","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":"79edfff4-04fc-486f-aefc-cfdf75dcd8ca","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":"e5b841dd-8663-40fc-b842-a8cc47bbaed1","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":"b3a0532d-f74a-4480-9ff9-8ec0d8a113e2","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":"b80709dc-5e19-4550-86a0-14ed34467752","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":"fde6df5b-1f23-4ea4-8092-78334353b686","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":"5ecbc261-35fa-43ef-af17-d7cd9bf9002f","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":"dcbcb32e-5c52-42a8-97b6-4b37addf6d9e","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":"7756ca2b-7262-43ee-add5-c584663bdf94","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":"5a65c4fe-27bb-4bae-85f4-5a1f0417b7a8","block_type":"box","text":"Securities and Forward Commitments”).","page_number":103,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"7d4363fe-80d7-410a-b5b6-53b781c6a55e","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":"964f2b6e-017f-48fd-8327-f6fb6b5a22ec","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":"2fe433d8-be98-4481-a9df-9d510cebd604","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":"637ad0e3-d36e-4fd1-a3e2-e1267bfca18f","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":"2957f172-b919-45c5-a67e-92deb66e2199","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":"9be8a866-cfcf-449e-835c-a2524e6d5441","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":"425815a3-2694-4f79-b511-82ca7ffa9026","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":"988a2407-0a5a-4525-a873-69d6658fb81f","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":"8286db67-6c33-4efc-a15f-58fdc32da9d5","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":"b1423b1b-e732-46eb-9dfd-d5406ee322a5","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":"b1bad814-606c-4054-8712-febf7d0a2ba3","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":"bec60895-494c-430c-bdc6-6064ad524031","block_type":"box","text":"Dodd-Frank Regulations.","page_number":103,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"373db689-c68c-4fbf-b6c9-fd1095f5ae75","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":"d1f4ff2f-e4e0-4b03-b4c9-00d41070dec1","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":"c2270129-25bb-4953-9693-ff8ae0944ea5","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":"f0d4e01c-1081-488d-a694-bdd7af177915","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":"b0a4e4ef-755d-42ef-a41c-12018d6ae106","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":"2ccc55fa-a069-44f5-831a-0e3e0b29932e","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":"7b6dc31b-e01b-49f6-8fc7-59064135236c","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":"62393f72-edbd-4b07-ba78-18caafa53e3e","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":"423c6877-406e-42c4-890f-9e0e33e47253","block_type":"box","text":"II-17","page_number":103,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3b415ed9-24d9-43ef-8dc9-27661b11022c","block_type":"box","text":"NM1026U-6049097-103/259","page_number":103,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9800e632-2159-4253-9210-2b9d8064973f","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":"5e4d3dcc-2a4d-4166-8819-6043979c3408","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":"f74bd3d9-5385-44fc-8ac9-665cec5494a0","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":"ea29902c-2292-4bb2-aa6d-61c5d41e9233","block_type":"box","text":"that enter into transactions with them.","page_number":104,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"fdb30e4a-f348-4156-853f-0788707a215e","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":"25c1f0be-26f9-408a-8ed9-441d849bdc14","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":"33aa3c9d-bd60-4923-b92e-62e1ee52a958","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":"9ba91fe0-9bda-4d46-b7a5-4f06451ebff2","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":"9387adfc-a63f-48f4-8860-cda663096850","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":"fb5e5398-8511-457b-96f8-f2edd30d07ba","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":"2e03348c-1fc4-4ae1-8aa1-56e6c718c7dc","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":"3c4f4f9b-41a8-4bf8-8206-655abe58935e","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":"2c654711-7bda-4bcc-a7f6-a6909db68346","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":"8c3a991e-642d-4f4f-8133-79564286f6b8","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":"01290140-0e71-4243-abf4-5ef680aa2669","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":"3c4ce7bd-06c8-4319-b01a-6eae13c9c100","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":"b3f79bbc-6f95-4ef9-9492-a76da50be06d","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":"2a715bd0-9fb8-4ce4-a36f-8f324723992d","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":"223a7291-dd20-4aa7-be42-b7bc2f18e3c3","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":"020be904-2cdb-4778-aa00-d53fcfa8000b","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":104,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"1628e030-c0ac-430a-ba46-b340fe4aeed7","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":"8c4a95d1-91ac-4f25-a517-37023712748a","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":"7e5e44e5-686c-4ac2-88c7-95f2308c28d9","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":"82e0e11f-0b08-4563-a9ef-b7cfba82d9a1","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":"8a04b21e-19a0-4d8a-8805-76adaa31f1ce","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":"0adba6b1-d7c2-4375-848e-29cea22b7d26","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":"700daeae-ce08-43b6-a5a7-c56f73dc2f93","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":"d616418b-ac99-4398-9156-605804ac1ae7","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":"6c036853-b37f-4cb2-91d7-770e185b1807","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":"907d2822-929a-4461-8113-4f307b692b81","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":"e70ea0e9-4c58-4a26-894f-116b2cf3a170","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":"fe227ceb-d522-41a9-9fd5-922cca2a3f54","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":"bfe8d89a-be89-447c-9b19-dad46b65f9d2","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":"a7314e6e-86d8-4493-8f16-fb26609ea55d","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":"7129e201-af42-4e9a-a278-5936e365e1c8","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":"268202f6-bead-4a46-b17a-aec2108b3ebb","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":"c4e94c57-3b2e-4f1c-ae1b-f478b721221a","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":"7f39966c-6a7e-442a-808f-4f1b4cf6d7af","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":"39c19b10-b3a6-4da4-91e6-f9cff196fa15","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":"ff6990cb-c97c-4e96-8e1a-848270229733","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":"ae64ce81-b162-4f50-8701-ce08735cd249","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":"248bd2d7-ae71-473f-a866-a5a15308aa59","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":"23a3af4a-8225-40d9-b331-91290e215124","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":"bfdbe059-15f6-471d-b329-f9fa701d59fd","block_type":"box","text":"collateral under applicable regulations.","page_number":104,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"a7d0a0bb-5181-433a-b6b6-fa4a48274d71","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":"b733d77c-c371-4fa0-a0cc-a986e083b43e","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":"0f0e3682-d19b-45f0-94f7-ceb5764f913e","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":"653ea57b-bff6-4467-a8ba-c20277b5f9bd","block_type":"box","text":"II-18","page_number":104,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"35502817-58ae-4f8a-b50e-56e3ecd45f04","block_type":"box","text":"NM1026U-6049097-104/259","page_number":104,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c263238d-7167-42cd-b5cb-6601656f6f41","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":"99f645cd-3bde-461f-8033-41fa91e8aade","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":"db63ccd7-b033-4dd9-8c47-57ac08b6728b","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":"fe2beea0-6eab-46cb-ade0-eb7112edf83d","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":"7626944d-c869-49aa-8d07-c3f26330337e","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":"abaf506e-d51c-49ae-8247-27e3bd364ae5","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":"80cc99cc-731c-497f-9a35-e66674a4fb1c","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":"d7b07dcc-37b3-4014-a594-bdd3bff39ee1","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":"f01dd7a7-8837-49e9-8140-acb6a21f509e","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":"e6c88b98-87db-452a-bd47-77fcf14aba3a","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":"c70586ff-5889-4096-82cb-7fe2aa86dbd9","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":"d36c88b1-3560-410d-8f53-e00cf9d27d61","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":105,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"b564588b-b951-454b-8b24-a5e02affe5dc","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":"4c433104-f15a-40f7-ac52-0997e264ece5","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":"bd036dbd-ee25-4a91-af9f-cff215bfac86","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":"1cb5f8d4-ceed-4c0c-bc8d-9956a3d16748","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":"b68ab2f7-2ba6-4d56-9379-2b91d9c25712","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":"e0edefbe-0696-44ad-a5f3-a863688aa7da","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":"c87e6bac-5e4c-4297-9675-fcaf774db358","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":"bddaf809-dcc7-44d3-90ad-a29a84da0ad9","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":"46b14b6d-6661-4411-955e-15862cebc1ef","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":"a8dec0ee-13aa-4200-a7ae-4e876ed67408","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":"f1da6baa-68ff-41ce-b70b-215f44b381fb","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":"e737b638-e71c-40a4-baae-48a2dcc66419","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":"100c26f3-f278-4749-bde3-f21e25112739","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":"1ea399c6-ebfe-4bfb-9322-55b895534dcf","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":"ad422baa-98c7-4b49-8132-aa1c495dc8f8","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":"19ebb2bc-84f3-4cd8-b673-398456fe5437","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":"10aa87f8-e40f-4fa3-bcc7-4a4e28530572","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":"1956d8c4-858e-4218-956f-8db3c22ee61f","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":"f4108b2a-ef6c-4ac0-bf90-8022608f4c04","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":"c73dcdd3-e900-4f4e-91e6-6104dbc0781a","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":"016187c9-a2a8-46f7-b49a-3b9d6b7cc78c","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":"a8d4eec0-38a6-4a28-8cb8-46eb2df83bb5","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":"858ab0a1-b33a-4afa-ab0c-71c2d41d97a1","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":"9a35a635-ebe1-47ca-b80a-68379fcec860","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":"3f17b2e3-f563-4a7c-82fe-338a507c885d","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":"6421905f-0ab8-43ff-9652-8457a4069c8a","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":"02f0ace2-0893-4f79-a958-c1ca611d0fb5","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":"4f1438fb-62be-4189-ada4-1de96272aa12","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":"c49a9d1d-36ad-44fa-a4b2-59b7b7469f8c","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":"ad2550d3-fb51-4d9e-9147-c8b42cde7130","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":"ad203366-d244-42fe-8e3d-46762f8a7847","block_type":"box","text":"Risk Factors in Derivatives.","page_number":105,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"939c6cfe-2e6c-41b9-8e43-27272a4e3ca1","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":"2bcd6948-56ea-44d7-81c2-01589147035a","block_type":"box","text":"Correlation Risk —","page_number":105,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"e210f138-081a-404b-a7a6-1c8a77210a8e","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":"c2c517f5-d449-4221-afbd-11ba2b163590","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":"a7801e96-38ce-4a85-a8d3-29f13358ee50","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":"327e6bdd-30f8-4f7b-8df2-c01bd8124e15","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":"566c0b01-ec49-4e7b-9836-b159a5822a50","block_type":"box","text":"II-19","page_number":105,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2538a1f8-02c9-4fbe-ac9a-9f10403d5344","block_type":"box","text":"NM1026U-6049097-105/259","page_number":105,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ee9cd7f8-75f3-47cb-82cf-07397cd3ac40","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":"baf72271-f07c-4038-a86a-a184294d37d3","block_type":"box","text":"in the markets for such derivative instrument.","page_number":106,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"b360a0c1-e1af-4ca1-ab07-cca7e4bc7769","block_type":"box","text":"Counterparty Risk —","page_number":106,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"8694a7b4-4e79-43c3-9a88-b44e2ddf30d1","block_type":"box","text":"—","page_number":106,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"fde3c762-bc2f-4894-b329-d695287e09f1","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":"05ae2a78-1723-49ed-9564-6f607a3fb9c8","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":"227bddf1-373b-4bb5-bb1c-1e708d71ad04","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":"9d2975f2-5204-4640-ae90-7668ddfca0ab","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":"a93f6ffe-20ea-4fd6-b9fc-8b2da81d6dda","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":"03276080-0fe8-4ab7-8fc2-1df5516461a5","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":"f754a023-6fe3-467b-8359-c0673aea6ef6","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":"2c78b3c4-95ed-497a-89ab-757a1c7ec5fa","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":"36ccf0b0-58d7-4a52-83d4-f7a08310c4cd","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":"7d72476f-8bb1-468c-9808-d0f2a2157ab1","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":"f0e39568-da3f-4e96-b625-fe77634e22a8","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":"4678e4f0-93ed-46be-bfcc-209555f6db2a","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":"a8992de1-102f-4561-bcfc-c751809eea3c","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":"96c30b6a-6aa5-4c40-9f34-0dc97d27aff8","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":"939b9064-e4c4-4f10-96f8-1553c11b6b4e","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":"26e3df2d-1d25-4dbb-a19a-c3e0aba8ad41","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":"551f5ef3-9196-4540-8424-03dedb5bb40b","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":"67cc9160-0d81-4c83-8d88-971bc1d52afc","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":"d4e6e518-9e18-461c-bfce-81b238f6bfbb","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":"bf1879e2-5b13-4475-8816-f1a139a53efa","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":"52d03cb1-61dc-4f01-b762-5cc819d5e2a5","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":"1cc7b044-b085-4421-bc64-5fda59e2aea0","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":"95438b05-fbb5-4afe-8bd6-718750e96b4c","block_type":"box","text":"Credit Risk —","page_number":106,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"af119787-c4f2-48fc-88ae-3baf3b6ac139","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":"e87d703b-e202-4b51-ab68-79cdfcc8ecaf","block_type":"box","text":"able to honor its financial obligations.","page_number":106,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"721f3aaf-3e05-4eb2-a658-0a331d48eeea","block_type":"box","text":"Currency Risk —","page_number":106,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"5519dc8e-eb24-4b04-bb4a-1fe9fd4c7eb8","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":"b8b37867-f65d-490c-aa8c-a7fdcfd02c38","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":"d7fefc4b-7474-4c89-bf26-2b5aed6cc195","block_type":"box","text":"Illiquidity Risk —","page_number":106,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"1b1179b3-7c22-40f3-a1f7-653ffdba943c","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":"8f4770c2-0c7d-4a32-9a8f-a39b6fe3741e","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":"10f58d6e-0704-4d1c-b7b9-25f30682575c","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":"876d9fd8-604b-4df2-a25e-e23bc6a052e2","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":"35f2e343-ce8f-4cfa-857a-e26f184e9625","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":"3a62f448-2483-4bae-b159-e06aa3eb7f73","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":"f8effcd3-8a5d-43a0-bd6d-e4f3359fe087","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":"efdc0bdf-b430-487e-b441-a351b2593bc9","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":"011fc0d4-fa08-4d2a-b086-984760e718bc","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":"43ffffda-d422-4270-a548-4a0cdec4875d","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":"f9a20aba-6d6e-4337-8d21-be8ef307efbb","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":"3cfaa3a9-ffdd-4937-9137-f450da8e36be","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":"902c8033-4eab-4e60-8f2e-02cab745f5bd","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":"c485dd83-ef6b-45a9-8bb8-0d22d206e03d","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":"2c4ae47b-256b-4264-af96-1be87966ed72","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":"3c887d73-90d2-4325-91b4-1d4051e1d81b","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":"0e97794f-39cd-40eb-8a1a-3307f23a7366","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":"1036c646-f98d-4ec5-be0c-1e5f4322c31d","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":"149cd1ad-73b9-4a6f-baf4-be10d52fa394","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":"80590b96-56ce-4485-83cc-934722a7a055","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":"ae421e08-7c15-4a57-8de2-31d8b08dca91","block_type":"box","text":"II-20","page_number":106,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"635d997c-2de4-4355-9e73-e15263783ca3","block_type":"box","text":"NM1026U-6049097-106/259","page_number":106,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6d3b6776-36d1-4286-91dd-d8ac2b2974f8","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":"d54b3abd-4768-4517-9ae4-7611e11a606c","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":"35b96fcf-0ae1-414c-90b5-c71f975cf0f0","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":"932c26a1-0efd-4607-b0fe-8a5d8ad18065","block_type":"box","text":"disadvantageous to do so.","page_number":107,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"fa217428-781e-4aee-b157-c98f7df03c9a","block_type":"box","text":"Index Risk","page_number":107,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"26945a9e-90fa-4240-9c68-b5af0199b1b0","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":"e0fc3686-060d-4d99-99e5-7586def35f9d","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":"146ae088-8347-48c9-8eff-99ea86e59d62","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":"60041096-217d-474a-a79e-479d8b02f1de","block_type":"box","text":"for such derivative.","page_number":107,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"e25d8478-e80f-4f8b-bc33-86fc9cea09b4","block_type":"box","text":"Legal Risk","page_number":107,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"413766de-f12e-4b15-9ff9-d32d5369fc9c","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":"c11a45d5-9a79-4271-9eb8-83d83c7f6198","block_type":"box","text":"legality or enforceability of a contract.","page_number":107,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"048447aa-842b-43c0-96a4-953dc2a65615","block_type":"box","text":"Leverage Risk —","page_number":107,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"18271b2c-4fd9-48df-89af-ed9af76ab07b","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":"cee789d6-c453-4f7f-8ba6-a7bd5e3e6861","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":"8686cd1c-7a37-4ee1-a533-61c16e71c107","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":"38fbe4f9-17c9-4e94-95d5-deffdc71540d","block_type":"box","text":"Market Risk —","page_number":107,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"790f9b83-6414-4bb0-a75d-d006ab2a44cb","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":"6c59a3e2-2884-414d-a8b1-a630db035bc4","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":"05c4008d-35fb-432f-bcaf-737e3febbf39","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":"7f827b2f-d56d-4453-9986-51be08f10332","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":"b49899c1-1080-432a-aa31-38c0894bb0f1","block_type":"box","text":"Operational Risk","page_number":107,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"6903ff1e-2ab6-4344-9501-8000dcc80ae1","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":"5ac83380-8889-436b-932c-1aa2acc48b2d","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":"4a872b0a-8b9f-4654-ab6e-619b8feaf344","block_type":"box","text":"Valuation Risk —","page_number":107,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"e34eb36b-ac88-42b9-88cc-31d12225468e","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":"cc99f83a-2499-47ac-a3ea-4b527d52dc2d","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":"1814b9ba-5d35-4083-8ef0-bfefca6aebb6","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":"716f8049-b027-4f9d-9d27-7e848eb067a6","block_type":"box","text":"Volatility Risk —","page_number":107,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"96941e65-4a49-40c7-a61e-92ba76643a99","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":"6d91f19f-1acd-4c31-91f9-c966ce14fdcc","block_type":"box","text":"period.","page_number":107,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"243e0fd1-6bf7-4016-836b-845f7b4a83a8","block_type":"box","text":"Types of Derivatives Transactions.","page_number":107,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"6ed31efc-9b5f-4b84-a9c3-8fb98aab4353","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":"8d79d6d8-ab2a-4a0f-bcea-161481e585a6","block_type":"box","text":"restrictions, including the following:","page_number":107,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"621a4663-bee9-4ff6-a8a6-b1b5888f4d37","block_type":"box","text":"Futures.","page_number":107,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"c49e90dc-5b59-4f39-8f1a-86b57faf3f68","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":"a3fd4eac-ca3c-4746-8884-1d145d3ca8a5","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":"a244c203-d88f-4628-954a-63c99f796c6e","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":"be8423e7-983b-40ca-b2e6-f7eed3285110","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":"fae73782-54d0-469b-98e4-81ef244779ea","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":"09792604-d707-41f2-a63b-27854b9eab7d","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":"3e0833ea-1fdc-4c00-98a2-ae156dd5d0b0","block_type":"box","text":"mark-to-market movement of the contract.","page_number":107,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"bdb419c7-786b-4cdc-af2e-7775d6576d1a","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":"87583b3f-0874-491b-ae80-e478efdd52e7","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":"891412ea-d7b7-45e3-a6ac-b30c69ac6086","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":"e8689ba6-08f1-4c6b-bff0-e5959e7f8002","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":"8f346dc4-d2c1-4ea1-baf5-3e977611a495","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":"1cc8aaad-916f-4c9c-b7e5-2b030248a165","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":"3a5d216b-2afe-4db9-b891-832d2762cb34","block_type":"box","text":"II-21","page_number":107,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"a9555260-af3d-41ca-80e4-f03af8429112","block_type":"box","text":"NM1026U-6049097-107/259","page_number":107,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2645863a-411f-4f8d-ae3d-adaff2a7c893","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":"aff4a9c9-b161-4d22-b705-15d8e5d9bcf9","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":"0041c494-c381-475d-b72a-c54802969935","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":"cf612efb-0fbd-4dbf-849c-1d2c685ec7c8","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":"39b1e1f3-4159-4776-8fe5-652ee6363535","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":"761a01d2-7a87-48a8-ab60-356fb7c3780b","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":"c006e5ab-5257-47d2-8530-97f5702be2b1","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":"67394fa4-1c7e-420e-a3f4-bd2811d17ed1","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":108,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"8c9e80bc-4afc-4209-8e9b-d09b7fbfbe29","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":"dd73655d-d76d-4546-aaa8-5c0a9be94ed7","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":"26d6346c-5a67-4b4a-bc60-04c577f87f9a","block_type":"box","text":"and market sector conditions (","page_number":108,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"c992a24d-e869-4f03-b341-22e981087f3c","block_type":"box","text":"i.e.","page_number":108,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"5e6420b0-e739-4b44-9871-78a2f964e8ec","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":"8ffadb4f-4b88-480f-a8db-e0d1a141a0d8","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":"e478c8dc-c139-4d17-83d2-e7050b5ea225","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":"28e06477-24c3-4f91-9339-ff59088f3ed9","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":"cf19b0fc-1b78-4618-a8d1-4d273fd474a1","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":"1e966c6e-6f14-4855-b390-baa32f959579","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":"768c9e0a-bf45-45d2-ad27-be30af6b9ca9","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":108,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"f9899662-ca05-44c4-80db-97ace14c2b09","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":"54f8e5ba-57da-40e5-8758-6a6797fa8181","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":"28a3c44b-d02e-4955-a505-13979e5283ff","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":"b042b859-c918-4f3d-b092-5fe513645105","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":"7697e6c8-3593-4a08-be25-75af26a91466","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":108,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"73d304e7-c835-414f-b734-6d9cf1462b5b","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":"1a509c02-0e61-4237-ac14-b6f66978d85e","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":"e7fcdec1-11ae-49ae-95fb-4c4d137576ca","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":108,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"11e87a52-d488-4c60-9bc9-e32a178c7dad","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":"ff0f1b30-4cd4-4470-ad0c-c8b83315f724","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":"ddebb0f5-3fe6-4998-8fab-54cab12c221e","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":"e6a3ad40-5b17-4580-a56d-b4bb4c9d7fcd","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":"f6fa2a2a-bb42-409c-bcd7-1cd07e1fcf3e","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":"72aafc4d-08a6-4516-a0ab-3249698ee0c5","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":108,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"9a3240ba-cada-4570-bccf-b7a3fdf8fb6a","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":"0a76fb5b-9b13-4e73-8a48-507d24c8178e","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":"e5d714d9-005f-4aa7-9924-d66e19f1930a","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":"f382d2f5-bf8e-4235-8ef1-234123a54a29","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":"4f5009e0-e7c0-48e4-99ec-43998654a532","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":"5f405a11-0669-4348-b7d6-1d60f6b0b717","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":"435ef82f-a570-4db3-8ba9-ee35ef9dd905","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":"15328233-ea6f-4c87-831d-edd74b7ac0b2","block_type":"box","text":"Swap Agreements.","page_number":108,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"aea81016-4c72-4031-9e9a-0da3e4078aba","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":"3423dee0-246d-4305-a400-2d9e21aa18b1","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":"f4cdb39f-bb2b-41e2-9605-bc7536fde68a","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":"2ce87524-be58-4d80-ab57-97143d1ce208","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":"79941c33-8f4f-4d69-b936-3cc0c96f1b14","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":"a2b11478-2d43-4715-b9ad-3d54f34e16ff","block_type":"box","text":"II-22","page_number":108,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"06aa358b-2be2-4a66-93a2-7d22e617526c","block_type":"box","text":"NM1026U-6049097-108/259","page_number":108,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"70ebed35-e123-49a0-97f6-aa96cbea0548","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":"0901feb4-4bfe-4104-a2e8-6a4480b5f8cf","block_type":"box","text":"e.g.","page_number":109,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"89aa26ce-a988-4c47-9f5c-2e987786fbe1","block_type":"box","text":", the","page_number":109,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"4d9479b2-16e1-48f6-ab0a-162c3c5cec0e","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":"5a1f87f4-614c-44e1-9e16-ad391340861e","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":"969dcde4-1bac-4dba-b1c9-023e9460422d","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":"45aa5085-6006-4054-a5c4-8f6c2fdd996f","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":"8a95775f-e2dc-4f0a-be99-efa7b890fdcb","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":"8f1a9e9e-f92e-4af7-a847-d6ca8b63ba7f","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":"2871192e-fa92-42b2-83e5-646181fb61af","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":"01eec498-968c-49f2-9d12-9d790be343f3","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":"c3cf86c6-c31a-4bf7-ad20-d433c241cc5b","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":"187ae57d-6dca-4750-9569-e7205e9966b7","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":"c8668e5f-2b68-4304-9a50-3a869c30dc9c","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":109,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"46be3959-ac47-43ff-9fb0-f54f005320c5","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":"30b8aef9-c957-4a59-9004-158c6b207c3d","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":109,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"a6297055-1f76-479b-b0a2-e091856c1985","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":"cd147597-f1f1-47c4-ad40-9d17bb467ab1","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":"c39d467f-0475-408e-ac47-6e7f559b1d6b","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":"11df789a-6349-4a30-8a95-94eaae9ad809","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":"b2025e44-d40d-473d-b157-d1d028afa06c","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":"5c32090c-a760-400e-a937-6ac9e8ec70f4","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":"1040e36a-5758-466a-a38f-a00f266d89c8","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":"367fb937-6029-4551-9550-ea5781a41f9e","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":"0bbf5600-67c7-4bbc-b33a-93647e00ed17","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":"cf2f544a-bd46-4761-9ab9-232a87ea3885","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":"d307df41-bf46-40e6-9654-86822e182f01","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":"ac679bb6-4850-40eb-a1fc-956fb3f79e36","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":109,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"3275599f-e566-4508-a6d0-efb8c19faf0e","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":"82307ece-cdd0-4a46-8e49-bc7f1f2fcb23","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":"bc55b7c2-a4da-4dc2-a460-1d0c1bbea798","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":"b901f55a-0c5a-47df-aba1-8c56ce87ca8c","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":"eff24d99-754f-415d-bb47-aa971c0a0655","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":"31e5665d-eec2-4644-94a9-c42168276bd9","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":"c17c0512-8b10-409a-89f5-94fdd17b9613","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":"a8571d1d-8f19-43f0-a34c-682a5693ca22","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":"394d41aa-70ce-4d97-b271-7ff5e2996dd6","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":"406d9f29-7f25-4710-85c4-944673cd44b1","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":"691e8331-12e6-4ea2-ae55-00c31b50a354","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":"cbc7bceb-0d7f-424a-83ec-a558d265081f","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":"8d28b2c6-1d9a-4d28-ad5b-5b084538d514","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":"4ab7b98f-fee7-45c6-a125-32ccecb97107","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":"630cf18e-8e3e-43ad-982b-02bd1ef3cc3d","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":"7c18064a-f4f2-4404-995d-3780060700af","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":"c3d1ddc8-e63f-4e05-a988-9b9a85c6b5d1","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":"9cb9411f-5183-44de-9ed5-e430a06a6048","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":"541eef2b-2099-40fa-88a2-8903a6ccd98c","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":"7bf8b658-4289-44ee-8a0b-6e1148d23f01","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":"03bdf9a2-8c85-4aa4-a0d8-2f07e8c3f5d2","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":"89f1ff15-04de-4582-b69b-833b82a0a4bc","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":"d8ff312b-b7bc-4d56-bf36-1f77c16878d6","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":"4bd09c2d-114d-44cf-8a4b-ce5145099203","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":"2c96a7cb-16a7-4b2c-b8c6-af98ee79a6fd","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":"37ace81d-1525-4a46-9f48-2429c7ea89b1","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":"6324a950-c074-4b77-9511-66c70f74eae2","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":"45d63588-797b-4d8d-b6fa-61cac2f111e1","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":"6e799f45-5ea1-4e7f-b6dc-52bdd811b5db","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":"8f9e0128-0d7f-4a8e-bef4-2ec4d3daea02","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":"9d539c38-ff54-46d3-b488-0ea8540f11af","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":"ad99c599-9aef-453b-b5b8-5c259a1056fa","block_type":"box","text":"II-23","page_number":109,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"363fe0b5-f8fc-4d7b-a5cf-5956764abe49","block_type":"box","text":"NM1026U-6049097-109/259","page_number":109,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e8ad1fae-36a8-404e-adc1-e48e11aca842","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":"0b50e6a4-9dc7-4826-9c3b-c9b6fee9a1eb","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":"f218f7d9-9fff-4af2-a8b3-96909f438677","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":"f9fa10a3-4fc2-42c7-9234-abc3c77463a8","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":"d589c28f-ce7d-4afd-863b-a4b6cc98cb9e","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":"e0f555b0-4aec-4e1d-b2cf-49f36683a003","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":"dd43748a-4fc2-4449-8891-568d94538b17","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":"97f927f5-b6eb-42a7-94c3-bfb5b9874626","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":"343042ff-0036-44b0-ab88-ece817345168","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":"4fed3edb-ef35-427c-8bb9-a4b2649428e3","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":"b08a9125-eb67-4806-a9e3-c249c8fed072","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":"8a3347b6-d70e-4a03-a0f3-707fea934964","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":"2a788c2d-cd28-404d-98ff-377f44c3e8fc","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":"f493e888-8895-4462-b2ea-a36d1fee4459","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":"1617abc0-99f4-4e78-baf4-02c37a1e6e1c","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":"086f9db8-dca4-497f-9230-b402a61c6da1","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":"7c95a262-18df-4c1b-aa3f-26bc9fd8a29a","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":"2e2057f0-0807-4216-ad04-eeeb2a590dc5","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":"bb604304-ba60-431d-89c8-2b1c2e213755","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":"ac258f51-4e8f-4c31-981e-ac69da609dcf","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":"9c82f231-d906-4881-8dc8-18c747cd5227","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":"f41499eb-2318-4470-bcd2-03f4bc6c55ca","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":"c7ec95c3-8800-4dfd-bb01-8472d805808a","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":"aa00f552-09f9-4c99-a082-8bee6ada5c74","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":"ad0c6fcc-764d-4f9f-8de5-4ad855466eb6","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":"b8ef0774-dfa2-4629-88e4-d4bcec74dfa8","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":"e3b8d82f-f3c8-449f-a0b4-40bb6ec614d6","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":"78fe1cdb-519d-41e7-9409-2007c299db7c","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":110,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"7de98cac-f0b4-4b9b-bc03-fddd5b6477eb","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":"7653d4c9-de06-4946-8806-be17b61d8315","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":"9bc5e2f0-f023-4e26-8285-5a3d74749ebc","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":"c5abb67b-ce0e-40b8-ab76-70e173de4c03","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":110,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"236bcf88-75d0-429b-9c61-a35f755d2ea4","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":"be99d9b1-6c6a-4517-b4e7-3732ed267be7","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":"c5ca88df-7fd1-485f-b435-2eb7d0be6ea0","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":"17bae7f2-cd87-4f46-831a-d9c33dc935ed","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":"2424deda-dec9-4516-bde9-aaaee9f9a328","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":"8d289581-01bc-44f5-a2e6-d2cd691e6605","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":"61a1f4ac-45c5-46f2-b44b-3aa03b0d770f","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":"369a3a6e-ec33-4567-83d8-8ce89ec71a96","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":"e8cf1061-7b53-4481-98dd-1136e01f695c","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":"7a5851ba-3a79-493b-85d3-26159e788c0c","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":"fb094f31-0719-4c21-bda1-75d37e70cf2b","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":"864b61c7-686f-4f06-9367-f5fa9bb51ec2","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":"92d5e3db-20cf-468d-8025-5d894da03dc3","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":"9f27b491-8905-478d-8276-a3dc75f86e4a","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":"a8f91d8a-b385-4bd4-9d01-616b1df5f624","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":"f94e6fa6-c8a9-4ce1-842c-ed2dfd1cb39b","block_type":"box","text":"II-24","page_number":110,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6cb94106-ad1c-47db-bedc-8454c7dcb31c","block_type":"box","text":"NM1026U-6049097-110/259","page_number":110,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"501584c8-0377-4b6b-81cb-0204bb04525f","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":"81b31c05-5617-4b8e-bd92-44c1727c1155","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":"eb604f4c-222f-4410-87c8-ad7750469cf0","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":"61b80d14-2a32-4513-945d-7969fd78d45a","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":"a861f453-dcee-40a2-adeb-adf32798b2fc","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":"cdc084f8-20fd-4241-8bff-ba61cb468b88","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":"cd95a5cd-fa49-4e66-9e9a-7be2d6a5b7f8","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":"b2e81828-fda1-4c8e-922a-64df608377bc","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":"00b0d239-d685-4771-a6e7-89035ecf73fe","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":"3aeb4e86-647b-4682-ac7c-9321dc398937","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":"42640d8e-5dfd-4e0f-bf94-9b993f2e829d","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":"47e053d4-93ab-43f3-9563-f2c7cfa9db9c","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":"1335c321-5b19-4676-b50d-612ee7b158d1","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":"6893ba56-a71f-4347-9f18-71d10f9e8f2b","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":"3a8ed4b5-2ae0-4709-9528-62a2ad639b3f","block_type":"box","text":"commitments to pay or receive interest,","page_number":111,"box":{"x":116,"y":352,"width":298,"height":12}},{"id":"77e42dee-06f2-4771-b560-e937d00b2d92","block_type":"box","text":"e.g.","page_number":111,"box":{"x":415,"y":355,"width":26,"height":9}},{"id":"673a2fce-c111-453f-b10f-8d35c82ff15a","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":"df140a1e-f731-40aa-97f2-a0ffc3304ec9","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":"a84235b7-a4fe-4156-976a-3b0d15ab9dd6","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":"d06fc13e-750a-4468-92f8-f846d9c635c1","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":"4a8c6d27-08ef-4b83-bc3a-818a1b4e74e3","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":"4248dc93-6b65-4198-9aa1-0217dfdbc472","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":"76ebcfa4-2b36-4ace-8e25-c83dc1abdb7c","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":"c6793960-50db-45e8-9d73-49ca52163865","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":"dc939126-7137-4c3f-a82c-bb9fcbe660f8","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":"5a3db07f-a617-44e6-913e-47a2ac2f7f71","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":"21f8fd59-f155-40ae-a227-8a43a363d4f8","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":"fa302bc9-ebd6-4908-a02f-40ef16ea5413","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":"9d4847bf-35db-474b-8aef-75b316a50294","block_type":"box","text":"rising interest rates.","page_number":111,"box":{"x":117,"y":523,"width":150,"height":12}},{"id":"8500f7ce-f86f-439a-8630-a111468c104e","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":"0edb504d-dca0-48a3-9cd2-a606394165cf","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":"d389a95b-947a-4214-a224-caac7fe385ad","block_type":"box","text":"to shareholders.","page_number":111,"box":{"x":116,"y":581,"width":125,"height":10}},{"id":"b74cc326-005f-4fdc-bbff-c715d1b505c9","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":"3c8cf2e3-9275-4ccf-9b4b-dbeeb00c881a","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":"1ff1de2d-e0a0-40b1-8dc6-601a77de3dd7","block_type":"box","text":"Total Return Swaps.","page_number":111,"box":{"x":118,"y":652,"width":155,"height":12}},{"id":"cc60417b-b5d0-4019-8234-708e2e2b42dc","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":"5fe6a975-6756-496f-9ea6-10138b317838","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":"5c85b0f4-2c6e-4f03-b03c-079a4289b7c7","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":"73d48378-00ae-4c8d-9868-3ab8cdaf54e6","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":"2f401c3a-bff9-43a1-ba4a-9e84892679e7","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":"05a845df-7503-439a-89ba-1b8f4820e9bd","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":"135c5625-bd24-45ea-a28b-9511a76051ea","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":"6fcc2706-ce5a-4ce5-adf5-4d479e32762b","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":"3d923aca-be6d-419d-9747-5ad9f92f1bc2","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":"48ca9e81-a894-41e0-9af5-74886e07c3a1","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":"aa4f80e5-9c57-4469-85f7-15a53d22ee44","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":"62a37338-7104-40ec-bc06-6a10cd4d2502","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":"665a3249-51b0-492b-a229-936826de3322","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":"38818439-5b01-49d4-8a58-7e09cd377779","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":"4c10b503-6448-4959-a54f-82b9a70476ae","block_type":"box","text":"II-25","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f10b62da-b74d-43ed-a2c8-bf625dcd6520","block_type":"box","text":"NM1026U-6049097-111/259","page_number":111,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0322c1c2-40ec-4274-b4ad-e54ebcee20de","block_type":"box","text":"Options.","page_number":112,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"af619b40-1ae9-4501-ad3f-869d30e54a3c","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":112,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"a4dd8d4e-fa34-4ffa-b9a4-670c3a15a43a","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":"4f884ba3-8f3b-45ad-a0e0-30d17672b7ff","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":"c2bd252b-e347-447d-8aee-b710bcdd5b8d","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":"23c98bc9-0a5a-43b4-aac0-e1aea5a9cfdc","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":"c941742c-ea58-4b0e-a0f0-20ef0e9b1b9f","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":"f5886ab7-8f00-4541-8eb4-552c20cba1f9","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":"efa06596-f45c-4723-beb1-976e4978b095","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":"459da823-9b91-4af8-accb-4079abdacdbc","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":"db99ef2b-af80-4c37-9476-3780984d6200","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":"f72166c3-f77a-43e9-bcd4-d60d91bab4cc","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":"828e5daa-c5e2-41cb-b259-bb21ea45d7c6","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":"460bd8c4-5055-4339-9c94-fe6682c3cb06","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":"252bfd6c-ecdc-4fe8-8a75-fdf41104a2b4","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":"c91047ea-1356-4fb9-a450-deb8d13d84cd","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":"5de199c8-2da6-4562-a12f-e2b56fd244ef","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":"23e89e8b-5f2c-4c00-b4d5-2cbd1843cbdb","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":"5649bd6c-1724-46a1-85bc-da9f8a80596c","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":"9ca57a68-83d9-403a-822e-af2faf863dc0","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":"46c09ef6-ca60-43b0-8550-c2644d4915de","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":"8c921558-bb35-48e2-b9ad-cf79d08e12d8","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":"33006507-eb17-44b8-bef7-4cbda88d0717","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":"898d5a2a-5582-470d-9c6f-65848aa1fd59","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":"b3d3477b-e817-4f3c-90ce-8e1f4981044a","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":"4dfc19f8-749c-49b3-a08c-e8f0122ce5cf","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":"ef01aa62-ca1f-4804-a2f2-a67e27632b66","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":"3dd381ec-2449-40b4-82be-8d25c3bbc79d","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":"8318abb2-3dde-4510-ad45-e6fd9144db86","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":"60b40095-b751-43c8-b1f0-27fddb9f9d38","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":"90f34c67-a7c4-4770-8b6e-33f5c84d56ec","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":"5d44bd24-b9c9-47eb-840c-a8a0fadb3186","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":"dc9e8de1-e3f2-4678-aa35-992d057b5eed","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":"f896ab9a-6ab2-4196-9123-754c6cb2f9c2","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":"59b56683-cdca-486b-af3c-590944529078","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":"ed1cce6c-0628-4648-9ea3-09d06c1e5b93","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":"dfb81ecb-c364-4562-a788-ab9756f769bf","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":"14cfc01c-48a0-46a3-a69a-4e3c3d7d1e17","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":"34ba1956-dd9e-4321-a0ce-462da6b6131c","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":"38b39d44-0a09-42fd-b521-99f731b8ea32","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":"abb3935d-b8e1-48f2-9dbc-91b00521bdd4","block_type":"box","text":"Call Options.","page_number":112,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"86e9e069-ea9a-4f44-8ad2-0dcf3d618045","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":"81118ae0-3bf9-44bf-9966-d14b6f2a4d75","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":"c5513ca9-aa7b-49e9-841b-18be6e79c21c","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":"7c58aa6d-92fc-4e70-82ec-6adbeff56c31","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":"dd0aea87-c5ad-469f-83a8-04065ab334b8","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":"6f7b14de-4047-4796-a555-93b549a2f13a","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":"6a5d3c2c-68b6-4f9e-94bf-5db929dc174b","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":"d94e4254-0f8f-472b-a40b-1ce720c40afe","block_type":"box","text":"II-26","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a599d205-006f-4bc3-8ab7-11af57c26d0f","block_type":"box","text":"NM1026U-6049097-112/259","page_number":112,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d4ff03cc-2a82-4055-a088-267464b1823b","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":"4dc37b32-cb22-47ed-afca-072dc76fd70e","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":"b556cf9c-70df-43f5-b1d4-cba4040ece85","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":"488f93ab-67e6-4ac3-bdb5-975cc3dba389","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":"3ce709cc-5fd8-4196-8d8a-4fc56cfd347a","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":"e2abf5a2-b7f0-4a5d-9107-067a75fed5cd","block_type":"box","text":"the extent required by Commission guidelines.","page_number":113,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"06d06dc2-f0df-458b-842d-49d3773ff060","block_type":"box","text":"A Fund may write (","page_number":113,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"0a72bd68-556d-4b26-9835-f5b3defde695","block_type":"box","text":"i.e.","page_number":113,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"17e655f2-0ef2-4117-95c5-71bf55136b57","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":"26ec1a53-81c3-4b29-b7ef-9aeb6bd7c16d","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":"03b285ff-86ac-4cd4-9d28-728b0ca0118e","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":"f898b47a-24c3-4896-87ca-333487be95d7","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":"36a0f571-3529-4e8f-b544-5eabb45ac53f","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":"31a88f88-9c0b-47dd-b937-98083c3be2b9","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":"0a2451c1-af98-4e6d-bba0-c22d53cea283","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":"13f32e1a-c3e4-4e22-8a45-b7f3d37a7e90","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":"2a0d6b4b-a43d-42dc-8f1f-b908b3416ba5","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":"6df1f115-a780-4d53-aaea-cc2ec5f2942e","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":"e77db16b-1cfb-40a5-ac49-1b39d1ce422d","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":"718533a2-a8f0-456d-ad1a-486fa724f8f1","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":"a29de6db-5eba-454e-8b7a-0e803032738a","block_type":"box","text":"underlying security declining.","page_number":113,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"ffb2e03e-084b-43a0-a591-8ee0fa716437","block_type":"box","text":"A Fund may write (","page_number":113,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"b104a9f5-dffb-46f0-a82f-2139ac1d79cb","block_type":"box","text":"i.e.","page_number":113,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"8b97ac50-631c-4a25-babb-3d251ebe1bfa","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":"c2be60db-1191-45ff-b40b-b75923fb0241","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":"3fd54a17-3954-45fe-a19d-ae63963f41e0","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":"a4e48b41-0b31-4b93-ab8d-aba82e551174","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":"ffdcb37b-9fbf-47e8-aff7-6ced649b5d9f","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":"2f197123-9073-4dee-8b12-469878412898","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":"858a5813-bdab-499a-b6d1-6b3e1bca6b7d","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":"ffac5cb0-967f-45c9-a836-b4d380b9bc7b","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":"def2e144-7ada-4d4b-8e72-4f5fdf58fb64","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":"e579e170-b378-42e6-be03-460caafaba6e","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":"9db54167-67b4-47b0-a175-0a66ef3f3d6a","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":"fb6053e7-dc46-4725-ad2d-055bc969b2d9","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":"9b51b7ce-5f77-47f4-96a1-6787cb52bb7d","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":"5b9d7ca9-292f-4541-bb04-efe2e5c535c0","block_type":"box","text":"Put Options.","page_number":113,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"44beeab0-5d0b-4e3e-9ffc-5c5865988830","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":"fa68b7ac-3dfd-41a6-ace1-361a497347b7","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":"8afed310-55c2-4935-9849-d008da8c1bf0","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":"934f490f-2287-4413-907c-2661d29ab87a","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":"4711ce9f-e890-4eaa-9a2a-0bc85b628348","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":"c84f0af8-e8c1-4e42-bb80-2ebaddd246ff","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":"fdfcb5f3-8222-4328-a133-e1970baa6c9a","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":"b3e25e5d-1e96-42ef-9597-8b901f6aa948","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":"e1365999-1977-4ff2-b1bd-657ddb9e11fa","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":"63926cd9-8fce-4fb3-b5d2-0229d1f16849","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":"1c432a94-83a3-4832-9b20-ccd81c359b21","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":"12fc87d3-4680-4223-aa02-406e8eff0d91","block_type":"box","text":"A Fund also may write (","page_number":113,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"a66d8142-b1b3-4f75-ba4d-70455bc094ac","block_type":"box","text":"i.e.","page_number":113,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"0ace2aed-7ca6-401d-be8b-12096f065b1c","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":"2603c51d-0db8-456d-b74e-0e25433eab5b","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":"e32467bf-2452-436b-8a9a-11d86af48453","block_type":"box","text":"A Fund also may write (","page_number":113,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"d3ea29a0-9b25-4e44-b54b-bea7a94ad00d","block_type":"box","text":"i.e.","page_number":113,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"4b37ce57-b5d1-4fc7-b7c5-6544beadeb21","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":"26dc0253-58f4-4ee8-aa86-30bdc1f2ee42","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":"e03a0a1f-a57d-4f62-a2e6-8b6085a720d6","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":"1531d02b-934c-47ba-a828-494b9e5b0157","block_type":"box","text":"II-27","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"924348f0-9e4c-4621-9053-34f3cc68e208","block_type":"box","text":"NM1026U-6049097-113/259","page_number":113,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9d937495-9e08-4c11-88cf-5d155d35f0be","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":"af8ca237-fa5b-4169-9e01-aa85a4563d80","block_type":"box","text":"lue of the put option with","page_number":114,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"72ed9f79-5b36-4435-8dc8-e467e5be8f5a","block_type":"box","text":"the broker-dealer through","page_number":114,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"30dc14f4-64f5-4f4e-84f6-8950ed4581d6","block_type":"box","text":"which it made the uncovered put opt","page_number":114,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"056c1ae7-88fc-4a4a-9514-a50498392188","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":"a94735a1-a4ed-491e-afaf-020bd30bb34e","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":"df76875f-d83e-4398-a96f-73114e56238c","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":"88b83cd7-fbe6-4d1a-8148-90ce9d3ca302","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":"0368e907-6347-41c4-96a6-f5d0322e46d0","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":"44c50e5c-f710-4c11-8342-1a2f81a42985","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":"b8a2c5e6-c4e9-457a-a1df-e9cb54df91b0","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":"521cb389-3b0e-4ab9-b302-7666be3409f6","block_type":"box","text":"or instruments increases during the option period,","page_number":114,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"bb4b272b-2e0a-4f16-813a-2955f2768b18","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":"34697192-63eb-4c49-9ad3-f2b2e5aad8d1","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":"291e0c50-0f7e-4989-aa7c-0a5f1474badd","block_type":"box","text":"es or instruments at the exercise price.","page_number":114,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"3d6af97d-b66a-4031-9c09-df2fd79959e0","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":"e0d6ebc2-5c9f-4b9a-a74b-8bf2e92db23c","block_type":"box","text":"The following","page_number":114,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"f6f98f12-1fd9-4a50-91f0-83d36570d80b","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":"bf681c17-b9a2-491d-93da-088744926faf","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":"6792aae5-1b97-4218-a3ac-c8f34d52d279","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":"3cc91f01-a2c8-4abe-bb2a-164af39e2c70","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":"1147822f-21ae-4a08-9bdc-4a0d82b73b5b","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":"a5e485c2-c2e0-4559-81ee-965afa311113","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":"ac715062-5faf-45ac-9a60-e51fe5694e47","block_type":"box","text":"to maintain its “cover.”","page_number":114,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"4143df36-9d94-4357-a24e-d2e010478ab8","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":"18b9ef36-0211-4c72-bd0c-0d150a0cbf21","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":"7866d932-8bea-4a56-ac3d-654d7527df6c","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":"29e61fd9-be7b-40f9-b9e8-e9d37862c174","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":"e4f1893b-d68f-434c-84ae-7088c0f3ba86","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":"9cafc3b4-3461-4eb1-8d21-053e46c09da1","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":"1726fc8c-51ad-4a66-a309-4741cc2998f5","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":114,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"b0be7e38-9189-4c2c-9b56-3cea6dead136","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":"0c4bcaae-f61a-447e-ab6b-82f3bd6b08df","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":"4ba64266-fa50-44e6-b028-7a675adc2c9e","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":"bd440b6c-7fca-485c-a08b-7deba7264a5f","block_type":"box","text":"i.e.","page_number":114,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"62cfd793-09bd-4f3e-9d6d-1d2e69df8b61","block_type":"box","text":", sell) and purchase","page_number":114,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"16dbcc77-53b8-4ebe-a788-a6ec57f9f302","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":"464313c4-f716-4c17-b16d-16e5005c1859","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":"28dbb5c3-82ee-4c38-89f8-745e587825f4","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":"48701c9c-d8d9-44c0-9582-3ceacd51d5bf","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":"06e5f8a2-d719-4ea0-887a-28d4c7e0e836","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":"f5a9d118-72f5-4567-9314-3da864ac0198","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":"c7b77fc1-98da-48dd-8f72-49df08b457ea","block_type":"box","text":"required, to be cleared.","page_number":114,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"1fcf6257-7ab5-4e77-aaff-bf09db9437d9","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":"8c930cc5-ae91-46a1-b43b-0348975e5328","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":"b1f408a9-3d32-45af-9579-0e35bdc9b57a","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":"7198eba8-ddef-47cc-929b-4d7a246ca094","block_type":"box","text":"speculation.","page_number":114,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"735c16ce-ed47-44ce-942f-451bc0af72b7","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":"f04d5abb-0e2f-44f1-873b-da35df28da60","block_type":"box","text":"Factors in Derivatives” above.","page_number":114,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"5c22c252-1ca0-46a7-88c1-b5e90e5f6527","block_type":"box","text":"FLEX Options.","page_number":114,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"8536b139-3e2e-4de2-87bf-b621177f6c86","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":"5f5ef049-fd18-4756-8500-c71298b3b672","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":"27948205-c6a3-455d-86a1-cda1b2ba6539","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":"5d3594f8-26b8-4a7a-9c89-41640606fe51","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":"a7cf9092-720b-4afe-a698-e8bfa8e74b4c","block_type":"box","text":"i.e.","page_number":114,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"779cf6a1-259c-4f4d-b998-d3278225e463","block_type":"box","text":", American","page_number":114,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"fffd761b-8b3c-43bb-9d3b-24aea1e19d98","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":"3e74752f-11cf-4b02-ba5b-28a42accc43d","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":"f8998231-ca20-416d-a42a-13eef1f1005f","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":"36ae4e8c-082c-4d76-8d5d-8329894f20f8","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":"6986b3b0-051e-4b35-8a5d-9ee4d0e371db","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":"cf612d73-a3ad-44f4-97c1-db31bf59e481","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":"904ee376-17b8-4287-8d92-b831735d70bd","block_type":"box","text":"II-28","page_number":114,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"87ece9a5-463e-47a9-b3e5-4ad22458bd22","block_type":"box","text":"NM1026U-6049097-114/259","page_number":114,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"65f46318-c1d1-4a35-88cf-fc1c2d464980","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":"aa4a9734-3354-474e-97cb-b207b3aa4436","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":"505a4062-d139-40c8-85ec-6ad82d3af15f","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":"70e61a87-badf-44f4-83ac-db564b356321","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":"2e07f54b-84c8-4d02-a965-feac343e0f86","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":"8fe45139-6728-410c-b832-ae04b488214c","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":"6c9641e1-56ce-449a-934f-b9e0c962659a","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":"8a99ac0c-37fa-408e-b80f-01c29f014ab6","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":"499c2399-b2c8-4040-bc51-4975435d0356","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":"87cd4aa4-8bc7-467d-88e4-007f92b7795e","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":"38e28808-df08-4b55-9525-1b380ad8209f","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":"b98c514e-401a-483f-8237-4ad19ffe1926","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":"29b233fa-ef84-4a16-83df-dff995a44893","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":"0c7bfbe1-2962-4d59-b93d-3784caeaeeed","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":"573d13bb-ad19-41b5-8a43-1bdefd7d2abd","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":"97fb8bf5-2e1c-4631-b6a5-db01fa4bbdd7","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":"ac4bed02-0f3c-4bac-b1ee-647b3b80c79a","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":"2e744d37-47dd-4778-ab40-ad44aee37563","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":"d8dea983-31d3-47ef-b723-77e02ad920af","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":"f7099a37-2b0f-455a-b5a3-108bd8778973","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":"2686d1d7-e06e-46ba-8d49-e57faeaec3fa","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":"b628313b-5397-46b4-a33a-d076b9393d99","block_type":"box","text":"transactions in the underlying interest.","page_number":115,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"54db8d46-b234-47f9-a461-a602afb6bad9","block_type":"box","text":"Certain Considerations Regarding Options","page_number":115,"box":{"x":117,"y":475,"width":315,"height":12}},{"id":"f3a693d6-13e3-43ba-9fc7-76749daea37e","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":"ccf1b588-506e-4ee8-bad8-6b4361fea229","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":"e19ea3dc-5413-453f-a6cb-bf139b0f3190","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":"dd58a7c1-745b-4e41-9011-5f415e6cbba1","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":"d67ad912-724a-416a-b9ec-c965f1f4d16b","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":"00a67fde-0b77-4b21-a6e3-78c29bf4cee1","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":"1315bb4d-6a1d-4b91-bb50-0597753d808d","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":"89a05f71-ce28-4d2b-a900-403baf014120","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":"f4f6c894-1f16-49c6-b50f-95fc997bd898","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":"28b864b4-7b6b-497b-978a-7bdd416138f0","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":"e05cba90-297d-4236-accf-5cb377affb4f","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":"cc5d6149-b938-495e-9114-f6607115558f","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":"80844f46-3235-44fd-8984-d41d18971b01","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":"de44f2cc-852d-4d9b-bb0b-8e256180e635","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":"06e246c5-c23b-46fc-b32f-6b68e361009a","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":"40ecc7a4-2b33-4317-a2b2-ccc2e41f3c3e","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":"d8839fab-d35f-4c07-9dce-73a1789a189f","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":"4f280fb9-29de-44b3-b95e-4ccc246474ff","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":"fe32ab70-3b3c-4a7b-950c-ca136b485887","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":"a5854378-3171-43ed-844e-333c281b7e2d","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":"f42062de-4262-4d00-9ec0-7f0a7f767686","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":"d23b9d58-dc10-4634-903b-10bb53f1b659","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":"1082193a-fc42-4421-812a-d04ed8ed026c","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":"f709206e-69da-47e3-a1aa-216fedd23d5d","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":"c4df2a9a-5225-4489-b4dc-6b80c2fe4def","block_type":"box","text":"each point of such difference.","page_number":115,"box":{"x":116,"y":862,"width":224,"height":12}},{"id":"8ae519de-1ff6-4d5d-8f4f-c9c390a4d8c9","block_type":"box","text":"II-29","page_number":115,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a3ffa165-e098-4877-91eb-bedf8e6d60c0","block_type":"box","text":"NM1026U-6049097-115/259","page_number":115,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0386a00a-1459-4397-a852-306e045dd154","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":116,"box":{"x":116,"y":87,"width":311,"height":12}},{"id":"4f7cdc04-454e-42b5-bd6f-be5a77b8164f","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":"26e32700-9bb8-43bd-9456-6653674ab001","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":"40dda430-dff8-4824-ad91-e7dd78babdbf","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":"73d508ef-13fe-463d-ac80-3e1d6321b0ad","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":"0e7e4521-a155-47df-a9f3-19316655fba6","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":"1bc08ce9-0b62-4325-a9c6-3e70b1557603","block_type":"box","text":"Foreign Exchange Transactions.","page_number":116,"box":{"x":116,"y":180,"width":247,"height":12}},{"id":"b8746375-7898-4ce7-b513-75a705783b36","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":"a87e79b5-137a-429a-85c2-93df9f3cda16","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":"3f7e3739-a19a-41ff-a3c2-8e0fb320f537","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":"014ca9f7-7b2b-4b4d-a7fb-b4371f23d97b","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":"debe13f7-8036-4a74-a3f6-80dddc2e03e7","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":"0ec759d6-5930-4bed-86e4-182e5918f477","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":"e7598298-f284-4256-8fd8-608dedd5f0bf","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":"25b0edff-b106-4ea6-b81c-44f05d3850c4","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":"4ffa738e-2abc-4fc2-a7f2-04611daba72a","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":"0fe59f9e-cf45-439d-b7c1-e08ba6d18751","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":"86d4136a-6cae-4498-95ca-09d14343bc9a","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":"26acd513-8889-49a5-9d64-31bac42c0d1d","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":"01bcbba0-cc8e-4b15-be02-7b504e61b754","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":"a10a11fc-1a12-4c7e-a236-47ff64d802c1","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":"15ab6329-ddd8-4446-ab38-102c3d7b0060","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":"c4d9199e-c4f7-4cda-873b-560dd8bf98f6","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":"9b603998-bc21-4668-a1f1-82734a82d88d","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":"ea7668c5-be95-4308-a24e-8da285dbb4cf","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":"26f0179b-6d55-4622-9705-da24d46947a8","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":"39b70baa-2749-4082-b4bc-5d7f7402abc7","block_type":"box","text":"that restricts currency option strategies.","page_number":116,"box":{"x":116,"y":482,"width":298,"height":12}},{"id":"2dad983a-36ab-45be-8e12-92668958a620","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":"4c9ca206-f5f7-4c5c-964b-4ccad0f1ff2e","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":"7e2cea28-0c48-440e-9653-98aaf32c219a","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":"bad4b7b7-1fb6-4d48-a654-1cb337850725","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":"de00ab10-49ab-4ee9-bc6a-29406366b346","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":"7d937aa9-27de-403c-9d92-59e953586e69","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":"ed2aac8a-7d33-4774-a124-081a88bd38fb","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":"2fb7b490-a0d6-48ad-8c9d-673b46a3317a","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":"2f4f8064-55ed-40f9-b1b2-d616977e7598","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":"9d3b3aa4-5a3d-4af6-b477-24db228718f8","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":"c5df6345-2925-4f65-ab5b-35989a4a7b53","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":"77503289-aad4-4995-b180-ab8449d43391","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":"425334d2-f38b-4aee-adc1-befbd89ca309","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":"32564be7-8c78-4436-9683-aec56b8774ee","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":"29091500-96e7-4aae-a653-b19277c147bb","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":"585fc285-5b61-43ec-8b3d-e841d8fda9de","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":"71b6dee8-9c8b-4894-ad9a-441fc0d6c1d3","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":"58fc5dd6-acae-439b-8e2b-dada78412898","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":"650dd335-7752-4efc-b069-b20460335ad2","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":"33ae9f04-af28-4395-b37d-35385c115eb6","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":"17b23795-8874-4c85-84e3-7f3817527289","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":"1b2179e1-5926-45ec-b3f0-141468c6f27b","block_type":"box","text":"II-30","page_number":116,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d1992c12-f13a-48d1-b48f-0bd4922430aa","block_type":"box","text":"NM1026U-6049097-116/259","page_number":116,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0d2e80ae-02a9-489c-ae9a-c11852d32ace","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":"c1dacfa4-7bc9-4026-8ab2-7c5c1cfcc0a2","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":"4eeb4f70-8d15-4511-90fa-732777fd0070","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":"7d7ea0a3-44a4-4730-9d15-a6b4a0b0aeff","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":"f2b6a5ed-ce41-4f4c-92e6-ab53dddf5682","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":"3a955fd2-0776-4e49-80c7-0d206c71e0fa","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":"7b5d38c8-6d80-4e3a-8663-c14d3e2d514c","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":"72af5c95-5d0b-4443-a973-ee0bbbf0bb6b","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":"f2b54dac-772e-4ba8-923c-5a6fb986a4c2","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":"e11e4632-ca83-4aeb-8d42-079fa30bcb10","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":"b7a2a73a-2ba7-4e2e-9007-435e39195967","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":117,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"8a15cdef-5bf0-4159-9e23-4f48a2f05993","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":117,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"08fe2b54-bd60-461d-bce9-ea70c05d826d","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":"2e9e2e4e-16cf-4e84-a756-2d5458cc0700","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":"e64f0872-e860-4df0-acba-2fea7762626c","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":"79d49fc1-d095-46d0-8e62-51114c3440b3","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":"e480ab70-86c9-4d7b-a9a1-9d46aa6cd65d","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":"57a68330-0dd8-47eb-bdbd-5596455b9f94","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":"573c85c9-e349-48b1-8449-a80a7e00bfec","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":"9c522e26-98ea-4fe5-9f67-2e107efbd995","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":"f4e26941-5a63-4f2e-954a-7903bd4afe98","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":"5f9cd3da-02b9-4c04-91ea-5afa6307e1f1","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":"2cf42da9-91c2-4914-b979-d79b55c1bcd5","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":"dc1869af-278d-43ed-85e3-cdbf32c16685","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":"649b5f92-d9f2-4bfc-9ba0-45fca871f4e0","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":"3a192fc0-3cdc-4105-8d37-208b0677d489","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":"36169fa2-4074-44ab-88ab-040b235b9f81","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":"8cbe3687-9a87-4c00-bfbe-1bef7f665ca3","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":"5eeea33c-810e-4f8d-8a1e-d8f1eabff222","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":"ba89b061-a741-48c8-b1d3-e95a21b5be4a","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":"6656a825-a9c6-4643-bff9-27d5017ef382","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":"732e52ab-206a-4fe5-9156-97e1288571fa","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":"4577d171-d01f-46ca-ba0f-2e5287762066","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":"f5af8000-021f-4a3d-9108-e4eaa1e05b9f","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":"232bf825-8e99-4d09-a395-5580d5342bed","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":"5f125c09-75de-47b8-89a4-1c8e3caf1103","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":"d12c1b99-4459-4ddf-bde9-ca16c330ddde","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":"2a96cd08-6e6a-47f7-bc8b-9bf5e91fe1c4","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":"9e5c1f45-e6ac-42bb-b780-2983b68c446e","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":"523a256b-636c-4548-a711-fc325b99d206","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":"5b0109cb-5e51-4a37-a750-e7cba46f4cb7","block_type":"box","text":"engaging in proxy hedging.","page_number":117,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"6ddddf86-1da0-493c-a4e3-dfb09c5f8f8f","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":"a3627379-1c1f-4f6d-adbb-e4034433b295","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":"fcb0a8ab-8042-418e-b63d-91139cd9fb6e","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":"37d43bc0-1c9b-4a6e-bcbd-4ac175b89572","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":"cdc308c5-e7c2-4845-ab9f-00462ea4c9e3","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":"029e13dd-55d0-46a6-b94f-74dc01f9388a","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":"53fe9592-c41f-44cd-81cc-8b44936c7633","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":"756b68c9-e4f8-480f-be52-37abe49a4645","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":"27af2e74-ec6f-41ae-a70d-209add840b70","block_type":"box","text":"II-31","page_number":117,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"c93fbc4c-6bce-480c-9058-b348f1874d68","block_type":"box","text":"NM1026U-6049097-117/259","page_number":117,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"31923901-0a03-4b0b-8a2d-7e2fe64260e8","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":"055d4ea4-8ef3-4996-b921-80e00bcf1d13","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":"236c02e6-cfb5-4209-b468-38095006a097","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":"a9fefff0-ea21-4169-9c6c-b6c4007a32e1","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":"4133e5a5-967e-437f-ab19-a346b863633b","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":"57b3ae94-4ac1-4747-89ec-beed76107c78","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":"47a2dccc-3755-41d6-b776-7822b15483d1","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":"5b5d4617-7625-4996-8330-b37b7720ba7a","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":"f148c628-55f6-45ef-ae92-9227730ea57b","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":"031a3e76-29a4-4423-91d2-f203132e75a1","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":"890d7aed-026c-4251-ba7d-bfa4df7eecd0","block_type":"box","text":"currencies that are not internationally traded.","page_number":118,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"1a172dc7-e11e-41fc-ba67-5d8175d21c91","block_type":"box","text":"Currency Futures.","page_number":118,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"f56eca9e-4b93-4794-b694-68855256c1de","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":"b8b3b052-0c03-4d8b-a76d-67a40c57c489","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":"ffbd782a-feb8-4399-8965-30691c55f772","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":"cad72fed-ff89-4f6f-90dc-e83cec8347fb","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":"3119d919-5cc8-4d00-8a8a-f5979088f942","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":"3e5c83f8-3081-41dc-ae04-f7dbc777faac","block_type":"box","text":"Currency Options.","page_number":118,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"38b1d80d-34b1-4c5b-ac40-236f8b20989a","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":"f8260628-59cc-436a-8475-8f678581e43f","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":"3805919e-67b3-4afd-8670-134d4ec01c77","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":"3a87e52b-f2ad-4e8a-bb8e-d8adcb411c29","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":"6ea494e9-8555-4f2c-ba46-babb683904c8","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":"e1df066b-3e92-4544-be84-fe6ac2a4c4c4","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":"4e3cab30-f251-438d-a952-4b826abc4529","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":"59801f5d-542f-4c58-8966-1b2202308172","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":"cb2c8a9d-768c-4d96-b5e0-38af728f3a28","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":"ca053579-bd97-484a-ab53-efeeaf52a00a","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":"6cbe9b91-b1aa-4fc4-a64a-c87e30fe7983","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":"b9889e1c-0184-44d3-80c8-b2b7c329a4d5","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":"ee58445e-8236-43d5-8334-16b4ff26395f","block_type":"box","text":"Currency Swaps.","page_number":118,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"daa74f03-8962-4410-afe2-28ec8b1401d4","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":"47ff7258-3940-442c-93c5-0155eda46bea","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":"f28874be-4ff8-408a-b8ba-9aa0e0a89e5c","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":"7549fb39-206f-45cd-97a6-a3f9ac924459","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":"789c1c7b-28bc-4950-bf1b-d69b8131e4ce","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":"c953fc80-153a-49d9-b067-0fc2cac03e32","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":"9cf84c08-2b69-405b-b857-1fbc2b639569","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":"bc468cfe-bf6e-43ef-847b-933670d1005c","block_type":"box","text":"its contractual delivery obligations.","page_number":118,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"aff4e2b2-7570-466f-b17d-74fb6bb7b9ad","block_type":"box","text":"Distressed Securities.","page_number":118,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"ebff2c2a-a4a9-41a6-8559-4dc94f591bd6","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":"0535aa11-922c-4ad1-8b3b-cdaebc26caaa","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":"4cb22a5e-5602-4dbc-85e0-3ff717e6d911","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":"d74d1b33-3573-491f-800d-5e172d704d22","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":"4aa799cd-5b6a-4680-bf10-c554f92a7359","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":"0bf0b648-732d-45bd-82ca-05ee70e86481","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":"e6933ef1-141c-498b-8e26-edc2b9bf2ff6","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":118,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"13fbb4b8-017f-4e2b-af75-9c56b164d357","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":"158f3f3c-64a2-4bfd-bc26-b98105cbd611","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":"8f55e8d1-38f4-4c9d-8614-1bc504ce6bd3","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":"f86f801b-df41-465f-9d85-472320452a95","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":"37f0588d-4b5b-4d37-89fe-886d54f3c12d","block_type":"box","text":"II-32","page_number":118,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"8d79e98f-8c3d-4a6e-8a65-f219dc16b411","block_type":"box","text":"NM1026U-6049097-118/259","page_number":118,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"77c687b4-c5b5-4b07-8092-d067d0135423","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":"48414cf0-e706-4ebf-a7a5-c9813cbcd8ea","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":"e2034e5d-8200-40d4-99a3-1a593f18031b","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":"42e1ebf2-71df-4566-8390-4d89bbaac50b","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":"33ceaa9c-d996-4576-bd56-efdeb4444b0b","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":"a2b5d57a-4a60-4987-b85a-1e8f2451d32e","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":"1305a49a-253a-4bfa-9f4a-45900567bfa7","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":"25c805d7-ecec-43e3-acc2-7dcc6c6886f8","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":"21fe3352-6bbc-43f5-a22b-afc075d38235","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":"35890254-118a-4998-ad0b-fec93d4dff6f","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":"c6ad6baa-10f4-40ab-a92a-813305cf442b","block_type":"box","text":"e.g.","page_number":119,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"ea0dafaf-6260-4cb9-94bc-2c3420bb2d80","block_type":"box","text":", through a","page_number":119,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"bd4d21be-9fc8-4d14-aacb-fce2f9ae2a3b","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":"b85634bf-3ad4-40d8-9c5d-70c86a429166","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":"b428e38a-b8dd-41da-a3b0-504f5c6fa0fb","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":"45643551-596c-452f-8b3c-fa73be21eaae","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":"34a528bf-dd95-44ff-b2c4-091ea714c6da","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":"1402564f-2854-4e08-8518-658a6dced213","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":"00a3f9cb-a5f8-4c76-a85b-73827aad159a","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":"545b89f6-5d68-4d54-baaf-00dc94a7e66b","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":"1c6bdae8-57f6-45d1-95e8-001429009c39","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":"9cec990b-be20-47ac-9830-801b7950afc8","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":"76c9c1d0-7099-4201-838f-ddb8081e23ad","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":"cbe268bd-abf9-443b-93df-f5db8c0c0c83","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":"8d69c9dd-ac2c-4dc5-b7a4-ae48c670a030","block_type":"box","text":"management of any issuer’s affairs.","page_number":119,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"5ac8e2f4-dcf1-465e-985b-39b18a461f17","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":119,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"6bdfe683-196b-443d-911b-d68c47fc825c","block_type":"box","text":"Although a Fund does not seek to","page_number":119,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"3e93fc1e-2b45-4f05-b8ee-54586bb12c54","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":"3b90b7e2-ac5a-496c-b02a-974b9fb18dde","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":"49c6a394-0179-48c9-a02a-22adc019684f","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":"a3d501df-26c8-4ec6-96d6-9989d23ede46","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":"f21a2c17-2a73-4a1e-88d2-e7ad8b0ecd20","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":"8738ac53-2a37-4117-b8fe-bb93eb1e7dcf","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":"5fb72b03-d976-4597-85cf-7e4974001d06","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":"71771faf-fdd6-48ba-8d22-28aaaa80efad","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":"574d9f8b-4f9f-4775-ac77-6cc947bb780f","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":"97473545-070e-46be-ba8e-fbb5d5be5707","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":"406e9c97-a38d-4d2a-850b-9bdf49f38661","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":"a97da90e-d2ac-40dc-8565-e511751573d6","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":"2a62dc6c-3257-4057-85dd-1197f85afb35","block_type":"box","text":"Equity Securities.","page_number":119,"box":{"x":116,"y":692,"width":140,"height":12}},{"id":"281d3f5f-e970-4b92-b4bc-52faf4cbed76","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":"0c33738d-0fa5-4e9b-be9b-888f9f5ed478","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":"a96c1ab5-3383-4298-bb1d-9346e8fa1939","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":"b7c69e1f-4fa4-4282-a5e9-68ad579bec0b","block_type":"box","text":"and depositary receipts. Stock markets are volatile. The price of equity securities will fluctuate and can","page_number":119,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"f8d8abfa-32c1-4200-b748-319ae4622928","block_type":"box","text":"decline and reduce the value of a portfolio investing in equities. The price of equity securities fluctuates","page_number":119,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"0b4c3490-048c-401b-98cf-91cc8e0ee6d7","block_type":"box","text":"based on changes in a company’s financial condition and overall market and economic conditions. The","page_number":119,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"1e40b62d-448a-4106-8a5d-8134b3db2700","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":"70903621-b64a-4afc-9b67-db48b27a3687","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":"65a8cde3-e019-44c8-8587-d2390f7f3c13","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":"943fd804-a358-49aa-a000-9cab98ef4028","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":"d159da0d-fe9e-4de4-b746-62eb4ece8300","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":"c78e2718-7d2f-4ff2-8069-ae026ee53b47","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":"15a51055-cbd6-4fb4-84f4-e2d8ca2dbaa4","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":"65b3820b-7f71-496e-b6c2-527e90937a5a","block_type":"box","text":"II-33","page_number":119,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4bd14c5d-c3da-4236-9773-dab9a28f905f","block_type":"box","text":"NM1026U-6049097-119/259","page_number":119,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d238a8e8-3479-4234-8177-71c2ff7b0f7c","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":"76c3f020-1e0f-455a-a794-29e0b066d2a8","block_type":"box","text":"shares of companies through initial public offerings","page_number":120,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"0e734d41-01c8-489d-a5c8-addd4c8f0fd2","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":"5d2b9f0a-04d5-4a97-a98e-bf93467a26e7","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":"7007de08-ed18-4957-a906-873cf3feb84f","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":120,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"2027ab63-1efc-4a35-987a-729ed49606e7","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":"1a40dffe-e9b0-4b66-a29b-6dc34f67232e","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":"d531033b-6ba7-4dee-9e22-5e5dc4d045d7","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":"1b95f7b6-339c-4e90-90eb-37ce4b93379e","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":"4290642c-287b-493d-91f3-888b27599bae","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":"e847d492-f4f8-41ba-8cbb-671d2748049e","block_type":"box","text":"investing in companies with smaller market capita","page_number":120,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"e053803f-48f4-431a-bbd6-574be6e3533a","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":"2ed8e5a7-2859-4d3d-a79d-d83670e292d0","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":"08fff851-703c-4c50-a5cb-786c3dda4870","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":"3a62d5ef-4f89-4009-99f2-9e1ffa29c6c8","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":"47139a7d-9f4e-4662-ac49-90d8c4022a86","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":"3d45e01e-24a4-4b4e-8b88-4e68e9f3971f","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":"b1c2783d-f69b-4bbb-ba2d-b30c99e77f11","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":"46fa9d35-3d50-4812-8ed2-ebdbc237d6c3","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":"2690641b-ace6-4952-930d-9d7e2653bb01","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":"6461eef3-1fed-4309-9e02-006b3e2b8e76","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":"60bde3e3-4dce-45c0-abf0-f792a443dd6d","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":"82439154-02e0-41f2-ba29-6b14f017e801","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":"3e788ad0-c593-4e5b-bf1a-9327cf27eab1","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":"a308cd08-211e-4385-872c-9c7cbd680f29","block_type":"box","text":"more established companies.","page_number":120,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"d12abf9d-d2fb-47c5-b090-e514d617bf08","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":"f85f41b0-f3b1-437d-8655-bc298c00d389","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":"56745264-c3c4-46da-8f8d-31e05f868d37","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":"fbd4d3c9-a29e-4503-a01a-2f2217381435","block_type":"box","text":"and “Restricted Securities” described below.","page_number":120,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"c1efbc8f-aedb-43aa-8a2b-3da1b5978980","block_type":"box","text":"Real Estate-Related Securities.","page_number":120,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"b77c1188-d3a8-4e87-82b1-6b8abaa5bef0","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":"b369b99a-c962-4459-a0b6-2e857a784e5e","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":"f31a9c13-3b91-4501-b74f-8256f6ebc6ae","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":"c62de789-22de-4c47-aea6-8058105178b0","block_type":"box","text":"estate industry in general. These risks include, among others: possible declines in the value of real","page_number":120,"box":{"x":116,"y":537,"width":738,"height":12}},{"id":"1d81df39-a084-41b1-9413-4f6e4e9ca87b","block_type":"box","text":"estate; risks related to general and local economic conditions; possible lack of availability of mortgage","page_number":120,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"3119601c-94d2-439b-8531-f5b3e013793c","block_type":"box","text":"funds or other limitations on access to capital; overbuilding; risks associated with leverage; market","page_number":120,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"6af22cde-b711-4db6-816a-e4c741db730e","block_type":"box","text":"illiquidity; extended vacancies of properties; increase in competition, property taxes, capital","page_number":120,"box":{"x":117,"y":583,"width":679,"height":12}},{"id":"0a5dac37-8fef-4fad-b4b2-c2d10ab36b4a","block_type":"box","text":"expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":120,"box":{"x":116,"y":599,"width":765,"height":12}},{"id":"77efef97-7a54-4e4a-a59c-5ec3ab57eee7","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental","page_number":120,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"52186676-691f-40f7-8bbe-7c22d1be0f26","block_type":"box","text":"problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured","page_number":120,"box":{"x":117,"y":630,"width":748,"height":12}},{"id":"43b14ac8-41fd-42e8-a8f8-2d074439dc1c","block_type":"box","text":"damages from floods, earthquakes or other natural disasters; limitations on and variations in rents,","page_number":120,"box":{"x":116,"y":645,"width":736,"height":12}},{"id":"30ff217d-95b4-4e07-a80d-64c98e255a9e","block_type":"box","text":"including decreases in market rates for rents; investment in developments that are not completed or","page_number":120,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"4a544236-0aff-4a91-8565-3893ed769ee0","block_type":"box","text":"that are subject to delays in completion; and changes in interest rates. 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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":"36c3ac24-db10-4d15-84a8-b3e2f8f287b2","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":"cacfe7b8-a0f4-42dc-b60b-1ce48bdd5209","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":"d9a29a5f-a217-4cb4-a001-9c4d265ed3f2","block_type":"box","text":"dependent on a limited management group.","page_number":121,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"b48a9577-8ea7-4e19-9a68-1cff4de4600c","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":"09da2311-6689-483c-9259-52c245a4d39d","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":"8865c3e4-330f-47ba-bd46-6146ef2ef2a9","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":"d6978266-4127-4947-abb1-bc96cdafd07c","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":"9f7723f8-4991-40b6-acc5-54fa3d57fea2","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":"1edabd89-6980-486c-9e6b-59312f97fb3e","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":"ac6e7a0f-5f50-4a5c-9858-7a47cbf4c407","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":"213bfbe0-93f5-45e8-8ba4-e0107004c2e7","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":121,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"fadc56c2-6a80-4ccb-9f46-cd71907f5584","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":"e2fc901a-0639-442d-93bf-12e29d002d05","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":"592c6dce-0a2a-436e-bed5-04069151793a","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":"3426202c-5b82-4a97-91d5-9cbb5e07b994","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":"320f1d6f-0eee-4d70-a4c4-04e56cd54e8c","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":"a49cd606-072c-442d-be29-67f88b2e089e","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":"48f9076b-955e-4e60-993e-4a7ed0d08c64","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":"f678b35e-b2a4-4b16-adbb-e98ed41f4cd1","block_type":"box","text":"service, or a favorable market position.","page_number":121,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"24cb80a2-95cc-4421-8f7d-7f0529672030","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":"541ddac7-d76f-4819-a5e9-d1c04e4bf4c0","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":"0b2da02c-52ea-4c46-b5e2-28498355ed8b","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":"f1938e42-7a53-453a-a720-bc406d173ec1","block_type":"box","text":"during economic or market cycles.","page_number":121,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"2d767f7f-3b07-4b5f-9518-3e93d58b4e0e","block_type":"box","text":"Tracking Stocks","page_number":121,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"35a0e8cd-a071-4298-ad06-df3120cd3cdd","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":"b8727e0b-a5d9-45da-a756-f2fad2568555","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":"864013e7-1580-4e20-9505-a9c69fb2f70a","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":"50ecb476-f19e-4ff6-acc3-cafe73ac6a0e","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":"1a03550e-1b68-46fa-a786-f7eda63b0c96","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":"96bcd98e-9085-4040-a900-e5d9ef908b1e","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":"a7ca99a0-c023-4d34-ab30-a66a242d4483","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":121,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"5dcea676-a497-4b76-ae3c-a0139ffc22cc","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":"8e075653-7c1c-4cbb-bbc7-94c2166b635a","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":"ae578cb3-00f1-4fe4-9a29-be2f40959f1f","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":"a7938cac-9487-42c8-8aab-fdfdfbab0a1a","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":"0c7c1e66-7418-4cc1-b0cb-6401bced1c27","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":"31759ce3-9e87-472b-a3fe-e373c40d1fdd","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":"37ba6e03-2dcf-45a4-89f3-8d6805972742","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":"95551a34-c1ec-40af-930d-1bbd28489a3c","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":"4b93125c-6bbe-4d30-8418-b6e4397ca21f","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":"1656feab-649c-426e-b493-04b784202872","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":"2cbc1e91-ba9f-4534-a194-89c1014224b6","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":"c016d5e0-baa8-4c7f-94ca-29e5287a81d3","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":"81a757f3-2458-4c8e-8712-7205bf0b28bf","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":"fe24aa46-a1df-47f2-b166-c774dc96de61","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":"8232e3ff-8a67-47ce-8bd8-cbdc94ecd707","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":"3c9c2d38-693a-43de-ae7c-fe890cca1a45","block_type":"box","text":"II-35","page_number":121,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6ab0604e-8368-4db7-92be-77ff0665e3e8","block_type":"box","text":"NM1026U-6049097-121/259","page_number":121,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4593034d-3026-4a45-8286-92a22ba369c2","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":"7177b245-be4a-4c2e-8294-c8622be39e8d","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":"4d6b71e7-6702-4b71-a060-8ce2e0d3fe6c","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":"fae57e23-9e83-41e3-ae2f-dfeddc615367","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":"7b5c259a-f7d8-47ff-9f6f-c54d78773871","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":"4dac8ddd-6245-4545-9015-9818b9942b7f","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":"65151c32-9981-43f8-bb10-c3ee7e242a37","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":"ed0f796b-e45f-4a0c-b130-2f22fa188f0b","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":"fd6dabcc-6bc3-481b-b599-4538427a5028","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":"231ecaae-da05-492a-9605-ffeda6fa09db","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":"3a88407a-c1c6-4073-8d1f-12443b29f96e","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":"eb7a5923-3900-41aa-91c5-3565f26ff14e","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":"cc44b38c-28bd-4b9b-9b94-772aab179740","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":"8e4e3faa-0ec4-4aa3-9455-e5fd5447bf32","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":"46b4ba12-a7b3-423a-a732-631a2f0c4347","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":"2a8efb43-a45d-4c6a-8f45-6d8392bdccb0","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":"31508b7a-0963-453d-87d2-ec0226a14faf","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":"a5c32c26-e0c0-463e-87b8-46cd38c722f1","block_type":"box","text":"invested.","page_number":122,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"4be95b95-afd6-438f-a003-5b40d13ccda6","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":"7203d01a-5bdd-4ef5-862a-9a414bae18e3","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":"ecf62248-fab6-4905-aa3c-d0ffe6bedda1","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":"553c4928-3bda-4f67-b8bc-c581f182162f","block_type":"box","text":"legislation, possibly on a retroactive basis.","page_number":122,"box":{"x":117,"y":441,"width":318,"height":12}},{"id":"e6b95c20-2e7e-4f23-ae98-5964ea18670e","block_type":"box","text":"Foreign Investments.","page_number":122,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"ef678f46-77f2-4114-bcb8-e93e2f5b92a7","block_type":"box","text":"Foreign Investment Risks.","page_number":122,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"92d83a3c-9c9a-45c3-b5a0-b6f0ab8e65c6","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":"109f390e-cf31-46fc-aa90-ad08da48f616","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":"eaf85fa6-cab0-40f5-b41a-86c7d1889f5e","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":"1ea3610d-81b8-4171-b8a4-8ecaf6d9fb78","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":"5c581619-3a48-4b8b-b343-5c47d0d96f35","block_type":"box","text":"that a Fund will lose money.","page_number":122,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"fd06f187-3b22-41c3-9674-349a8e497fc8","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":"6fdc63a5-a31a-4151-810e-154a30fae2fc","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":"6675a2fc-8b8b-41d2-b621-d54b377ccd34","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":"0569ec21-12b1-4e16-8132-f1d7e5cc3668","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":"c3255102-282e-415e-b0ec-3d35246ab491","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":"2ffb8a60-2f5f-4ef2-bc21-c15d99ffafe0","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":"bcab76ea-5bef-473c-88c5-de7574ad6e78","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":"2add729d-cf67-4b70-8df9-b0920c24de2f","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":"77faa9f6-02a8-49d3-8689-475043032178","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":"71b0768a-3285-489e-91eb-ea924cf10389","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":"b9e0baab-766e-4790-8714-5bded6c2a813","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":"2e5945ea-988a-453b-9836-4f5c4a6e9446","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":"f29f03b1-e2ad-422f-a9ba-758d23ccafe4","block_type":"box","text":"zero-coupon securities.","page_number":122,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"36309ee2-f517-424c-873a-ede3128cfdf4","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":"5d3baba6-73fa-469b-9542-a5c4e2043e6d","block_type":"box","text":"withholding taxes.","page_number":122,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"d12cc67a-5ac4-43eb-8ec4-a539fd5b1791","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":"529a021b-a0fc-484a-98bd-9c72fa5c7db8","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":"36436fc6-ffa9-405b-bee8-75a7d1fe691c","block_type":"box","text":"II-36","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a13235ec-085a-4a25-8e9e-6bb8e19dd681","block_type":"box","text":"NM1026U-6049097-122/259","page_number":122,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"984394e1-21a0-4139-b5c8-c7dc7838a497","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":"c61ce176-d4e9-419e-ba12-5f6b6dd270b6","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":"35384156-07d2-471b-aeca-686dbf251916","block_type":"box","text":"i.e.","page_number":123,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"8ca0f62b-610d-4a91-a78c-2ea6457f18a5","block_type":"box","text":", the Fund’s quote from the closed","page_number":123,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"392f4800-2ad7-404e-af7f-5fbb9e534f02","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":"74e22e0e-83dd-4d19-ad66-32056c72d467","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":"e25c2859-dc33-4426-aa63-237d516e5491","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":"c62a4f80-c1ba-4519-87ab-c37da4f7f265","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":"53567438-e339-4dee-bf3a-8232503498ae","block_type":"box","text":"Foreign Market Risk.","page_number":123,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"aeec8bfd-2fc8-4639-a0a5-498ac08df8b4","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":"c4c4b44f-fd44-4dbb-8512-2ced3261c16c","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":"652a5b5a-8adf-4137-b6b5-f2e66a8a9c69","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":"4bd57a73-0f41-40ae-ba7c-08cae077915b","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":"d0268f1a-0c85-479b-a203-567896e40a14","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":"bfaa8ca4-d125-4970-9154-0c00428bed75","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":"51738cae-d310-43e5-bb55-e1080b833ed5","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":"75116a77-30bc-4172-af8c-d0fd74412676","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":"d5e411c7-ebe9-411f-9332-ca8fef6c51d9","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":"c20313bf-145a-496e-9054-896416c6754c","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":"5328a470-0718-4db0-bde8-56e545831236","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":"ee3b4bdd-8935-4b43-926a-c6a845921c06","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":"244d7506-ee8c-4dc9-b3cb-f6c1b619e679","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":"220f00e7-5767-40b6-9e7f-3df848956601","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":"65757763-968f-4008-a4d4-1d55560976cd","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":"e6b948dc-42cd-4030-8bce-8280a6b87856","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":"0e20c7f8-f5ab-48ee-91b1-7b23271949e6","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":"f6835445-9f31-44ab-b49a-ec7d254a71e3","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":"a333754d-1734-40f4-a0a1-d6837f37e612","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":"57368e02-8c37-471c-a437-ca5269292782","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":"e7702841-9b45-4ca5-aae8-aafc5554b005","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":"630f0691-79e5-4565-aa50-e63f7679181c","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":"749f812d-a763-4e05-890d-437db362c8be","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":"f14084e9-70e5-4763-822a-201b022b0848","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":"1db6f0c4-24c9-42af-951c-dd6ef9931183","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":"2614ee82-ee8e-4bfb-9462-7ebcfa562dd0","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":"84a93fba-fefd-4c45-afda-3dcfa5924c85","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":"82fe962c-105b-4ffc-9532-5cffa44a5ef4","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":"9cc006a7-4b5f-469f-8366-63b9f9788d94","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":"07bba2a2-736e-4caf-a7c2-49f3db8e4c73","block_type":"box","text":"Foreign Economy Risk.","page_number":123,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"18720b01-1228-42dc-bbeb-91ebe6090c79","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":"9f85f429-20d2-48b2-9e2c-712961e6893c","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":"dc7fa7a6-ac97-4aac-a542-9b2cf6b4623e","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":"c6438efa-cc74-4e36-9941-ef1af9b22006","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":"463de4f9-cdba-4c56-b60d-71c154ac434e","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":"fa9ed8b7-8836-4841-b7a4-c03fdab3d0c3","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":"a9b71896-01db-4b58-b333-aebf40a06ae4","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":123,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"872e435f-28ad-4b11-ac87-50c5b5a8a137","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":"1bdbb511-7b82-47c6-a392-111a3dedaa3d","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":"88ae51f5-9ca8-46d3-8804-b8862c19bec4","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":"7d114808-d32d-4516-8477-4bb844872a3e","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":"86ed3d95-c3ce-4838-a5c5-a3336996df9e","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":"a788e7ff-81f9-433c-8be6-c1c2f6f03849","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":"a3d4303f-6e75-43af-8c33-adae61857c61","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":"58fa8674-58db-44ae-a1cb-b8ed2f2e0006","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":"3b6dc19a-7e4e-4f96-b321-261fd3cce64d","block_type":"box","text":"II-37","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cc5d688b-474e-4647-acde-0bd16f14ef9f","block_type":"box","text":"NM1026U-6049097-123/259","page_number":123,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ad540f6a-d765-4309-bb38-b1897685c225","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":"f3fe8ef7-08e2-4506-8c48-f235f8c2aba6","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":"1a5a1609-c319-45c8-ad08-293163b42aca","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":"48d369f9-8f68-4f91-a705-2af910028092","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":"273555ac-2015-4c45-944c-eba251a5b551","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":"aee40e04-cee0-4186-aee5-d4d0f9960525","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":"e8a107e5-b375-45dd-8a07-e05b12058cb2","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":"45d22ae7-225e-4db5-b483-91b4856934db","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":"c9eb1eb9-2674-438b-b542-c73484f3dcb6","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":"07cf0137-84e6-49e0-940e-2d78e967ab67","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":"7687d638-15f9-4b6d-83a2-38c7dd250a81","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":"edb8177c-b3ad-4f48-afa7-aebf1050247d","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":"48996dc0-ffbe-4803-a3a7-d0682c0a27e6","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":"a56e4ce0-2e59-4cc6-ad80-efd5e9b04e55","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":"cf797a3c-dbd7-445c-9951-63350ada6467","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":"7316c87a-c675-4789-8edc-e83856b05dc8","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":"e8d9afa9-aea7-4f3f-9a15-19b8363c0795","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":"b3b2425a-d454-4356-a412-cde45e119eda","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":"28be8d82-e34e-4943-bdd4-f1e4d385f96c","block_type":"box","text":"A Fund generally holds its foreign","page_number":124,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"7ab6a534-5881-4c6a-85fa-481b90952ff4","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":"64ced8e2-b16e-4dfe-ad0d-b234e78f724a","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":"078d8a9c-28ae-47fe-bd4e-309058d8e507","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":"23f32597-d634-44c4-a1b7-6eae9c76b925","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":"37229ccd-81cf-4d61-b5e8-57d43b9d1693","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":"ba45b6a5-e3d5-404b-a8c7-05de250ae995","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":"86521368-bea4-4802-a80b-a824c7543cea","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":"d9c8e114-e6ee-4530-a756-e507be9cc388","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":"9762a5bb-7d90-43e7-9c35-47e2b269624b","block_type":"box","text":"the United States.","page_number":124,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"39dbcf86-e5d4-4558-8070-8d6654e3adb5","block_type":"box","text":"Publicly Available Information.","page_number":124,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"46b09ca4-aa3d-4f77-bf50-181645ecd245","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":"4cc453a3-c9d8-4b40-8870-51ec57b5a2e6","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":"0b27e1ef-9121-484c-bdd5-019d6b51c1b5","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":"1b338ba9-ad52-4624-85b0-4632047bf694","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":"b7a00440-4d8f-4fae-b5a4-3432caa292cf","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":"f6608d01-9009-400d-bc7b-eab0ee6e9655","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":"6237bd4a-6c7f-4e66-8f84-33c18f1cbf54","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":"290926e0-fa94-4dd8-a327-b9e6db71cb26","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":"38c4bab5-0a70-4fed-93ea-5c128643b371","block_type":"box","text":"States.","page_number":124,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"76451ce0-a09a-4d75-a6f5-958735585ad2","block_type":"box","text":"Settlement Risk.","page_number":124,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"9a51295f-b84e-45bd-80fb-8cd4b2426091","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":"ec2dfe22-09b7-4eae-ad26-d06e6541c0b6","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":"044aa3ee-8e41-4dc1-8dee-ef68d423e73c","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":"b7381d7f-2338-4199-9a93-7ee6fe804f1f","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":"6b0f7e2a-a36a-4b41-83a5-01cb539fa29b","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":"3cb019d8-dd8d-42c0-ab87-61eb0135a5e8","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":"97f17e62-46e6-40de-a36f-78d39f53fa8a","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":"9bd8257c-8ba0-4f13-a59d-1fb6464c2d30","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":"0cf1dcc5-a554-41d4-9b1e-393620442167","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":"60eaa446-430e-4c2d-8b84-1cb239380636","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":"629ad8b0-b53e-4be9-b7ed-c9dd7785afc7","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":"5cbda7a9-87d3-4846-92dc-23af087b962a","block_type":"box","text":"II-38","page_number":124,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d6850e4a-4508-4a15-80d1-b68918bc7acf","block_type":"box","text":"NM1026U-6049097-124/259","page_number":124,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0cd1fa10-72a5-4ab9-b9d2-e877521d7c39","block_type":"box","text":"thereon for some period. 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Compensation","page_number":125,"box":{"x":116,"y":165,"width":703,"height":12}},{"id":"47384e1a-5aec-48d4-bdc5-82d6945ded35","block_type":"box","text":"schemes may not exist or may otherwise be limited or inadequate to meet the Fund’s claims in case of","page_number":125,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"e461cccf-dad4-4295-b383-de72870ea4c3","block_type":"box","text":"such event.","page_number":125,"box":{"x":116,"y":196,"width":90,"height":9}},{"id":"94124d79-1cba-44d8-bb58-e115c97fd645","block_type":"box","text":"Sovereign Debt.","page_number":125,"box":{"x":117,"y":227,"width":115,"height":12}},{"id":"4dc0075a-05d4-40b4-83ed-bc7111f2839e","block_type":"box","text":"Investment in sovereign debt can involv","page_number":125,"box":{"x":234,"y":227,"width":293,"height":12}},{"id":"8a951f50-8bea-4d6d-be75-1ccddb939a5a","block_type":"box","text":"e a high degree of risk. 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Converse","page_number":125,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"948ded61-abb1-47c6-a55b-9aee8f1448ec","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":"ed92d294-efac-4622-86d6-0218594b6495","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":"e7fe50e3-0436-4a24-b163-82911388fa46","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":"f1d862e6-d654-45b1-b00b-10a3befd0112","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":"7198124a-9777-4de2-aea9-8f1cb1723b0c","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":"f14ac355-176a-426c-8f6c-3f180168293f","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":"70af328c-db6e-4767-b5aa-b306f867c42e","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":125,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"36d2cc18-ec6d-4d53-80bc-295d951601ea","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":"6b2b6329-2889-4aa1-ad7e-93c05d69c4f2","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. 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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":"46f7474c-139d-471a-b69b-3417e06beef3","block_type":"box","text":"II-39","page_number":125,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3a59a6ba-4bc8-4939-87fb-6f0116b2b9c7","block_type":"box","text":"NM1026U-6049097-125/259","page_number":125,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cc37f2aa-981c-4ecb-8dde-dc697aa4c2e5","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":"e18dddd7-7bd2-4d46-a717-c7e056e3c1ca","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":"652467bd-318f-46b9-9241-9158eff63384","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":"5e9d5e19-5b77-48af-b0ab-45a6c0ab2201","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":"148fa866-f0ef-4b4d-9a1e-7b97f328f899","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":"cbc728e8-65db-4ddf-9de7-eda713488ec0","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":"099d8872-d537-4487-8fca-d6f6ef91ec65","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":"a010f8aa-a9f1-4897-a7ee-d9b26e71300d","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":"da16966c-66a6-4341-8f1b-8bfc959b105f","block_type":"box","text":"Funding Agreements.","page_number":126,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"4b52ed38-3000-40cd-a3b9-ab4d454cb818","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":"d00b1d0d-cf7a-41a7-885f-3e0460c81a2f","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":"49b66897-c787-4381-93c4-f30c59d47a81","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":"48f46493-876a-402a-ad9a-03f736bc5b7c","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":"90b2ca6f-bf23-419b-b681-5dd2242ef7b6","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":"0c250c69-5f67-4d05-8e2d-c3e215ecdcf3","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":"b0a9dc17-de2e-4b39-b131-d74b1d85d56c","block_type":"box","text":"contract is paid from the general assets of the insurance company. 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An","page_number":126,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"971ef29d-2981-4b75-9e40-7ebc6518e234","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":"6b48cb81-bb85-4060-bc01-c39364c9904c","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":"4da5b3f7-e1b0-48e7-b551-549e64c6a291","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":"e41c14ca-c538-4b59-8e9b-4e43852d8011","block_type":"box","text":"a Fund, particularly during periods of market turmoil. There can be no assurance that a security or","page_number":126,"box":{"x":116,"y":542,"width":733,"height":12}},{"id":"0335810c-69c9-4edb-ae04-5af916a1a6b1","block_type":"box","text":"instrument that is deemed to be liquid when purchased will continue to be liquid for as long as it is held","page_number":126,"box":{"x":117,"y":558,"width":766,"height":12}},{"id":"77ab282f-fa97-42f8-a66b-451fe7e3e616","block_type":"box","text":"by a Fund, and any security or instrument held by the Fund may be deemed an illiquid investment","page_number":126,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"4ebb327a-0515-41e6-be23-3400c3f78d33","block_type":"box","text":"pursuant to the Fund’s liquidity risk management program. 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The risks associated with illiquidity will be particularly","page_number":126,"box":{"x":116,"y":744,"width":760,"height":12}},{"id":"ab1f09a5-542b-4234-a040-31bebeec715f","block_type":"box","text":"acute where a Fund’s operations require cash, such as when the Fund redeems shares or pays","page_number":126,"box":{"x":116,"y":759,"width":709,"height":12}},{"id":"afbf156f-c07e-4bf3-8ec5-9abd91acab67","block_type":"box","text":"dividends, and could result in the Fund borrowing to meet short-term cash requirements or incurring","page_number":126,"box":{"x":116,"y":775,"width":740,"height":12}},{"id":"ab4a5973-2001-4f68-af6f-c71b60efe5ab","block_type":"box","text":"capital losses on the sale of illiquid investments.","page_number":126,"box":{"x":116,"y":790,"width":355,"height":12}},{"id":"3df06667-4694-4b09-8913-0978d43e252d","block_type":"box","text":"Index Funds.","page_number":126,"box":{"x":116,"y":823,"width":102,"height":9}},{"id":"6527e379-6a93-4b4f-b552-45505611a4d8","block_type":"box","text":"Cash Flows; Expenses.","page_number":126,"box":{"x":117,"y":846,"width":173,"height":12}},{"id":"e352326f-e286-4393-8370-da0803737370","block_type":"box","text":"The ability of each Fund to satisfy its investment objective depends to some","page_number":126,"box":{"x":291,"y":846,"width":573,"height":12}},{"id":"886c0992-6c93-48c9-91fe-15affd21ac2b","block_type":"box","text":"extent on the Manager’s ability to manage cash flow (primarily from purchases and redemptions and","page_number":126,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"424cf396-dc75-45b0-b866-bc74c1ce277f","block_type":"box","text":"distributions from the Fund’s investments). The Manager will make investment changes to a Fund’s","page_number":126,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"0947c09c-f955-4ab6-859b-28a9d0fbe389","block_type":"box","text":"II-40","page_number":126,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9ee94cbf-c3b6-4af3-a464-1579f092a2bb","block_type":"box","text":"NM1026U-6049097-126/259","page_number":126,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b2341d4f-306e-465e-bc7c-e4b8b2251ec6","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":"0580eb1e-5e37-4a7a-9c54-c05bcdf6b957","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":"e2129ac9-1dd6-434a-ac03-96c0837966c9","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":"c5fff6ba-8f6b-4cea-9a49-c4e4194e420a","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":"e10fae37-d40b-4bf8-b604-9b9f90440c73","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":"2bb48c8d-ebc3-40ba-a906-a4b9c7277504","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":"3d4a99cf-0362-432a-bf3d-d10e7bbf4714","block_type":"box","text":"particular security as an investment.","page_number":127,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"8f6c5367-f980-486e-abc9-819c86a6c851","block_type":"box","text":"Tracking Error Risk","page_number":127,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"68463429-b47e-4753-9418-72584bb789b8","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":"9d608c6c-0375-410a-8f49-1c1d1ef74420","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":"50bf2cff-a395-4c9a-9a0e-34816062d490","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":"3929c88a-3511-4279-9667-38ef5ce07916","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":"3269e966-cadf-409a-a3dc-43d7945f7413","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":"6fdb412b-23de-40fe-a736-39ff1aa5be6d","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":"a1d02521-1647-43c3-aa2f-bc502df680bf","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":"0ab46ff2-68c6-4ea3-abf9-80141b707f9d","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":"1d202905-6512-4f2f-b13d-30c926f0b1d0","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":"bc98e8df-0b06-4b90-becb-1499f4eaa001","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":"fc45e85d-4189-492c-9fd1-42da361ffd24","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":"3ea5024c-e634-43e6-aa87-5fd2bd6dca71","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":"6b66dbca-4020-4723-91c1-5f119bdc752d","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":"3a7fa3ac-7f57-424b-8905-a165dfa02bcd","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":"b78e14e1-7716-4632-9c13-780a47aad85d","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":"ca69a843-e302-4352-9003-e037bf91214a","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":"df5c8c71-24f5-4439-a1a9-e3555e4d5e6f","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":"30f600c7-f3f3-49cd-8831-faa8f1a3c8ed","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":"11af6724-e012-482f-bb31-d4405c942b7b","block_type":"box","text":"regarding the advisability of investing in any Fund. S&P makes no representation or warranty, express","page_number":127,"box":{"x":117,"y":754,"width":757,"height":12}},{"id":"a07768d3-bb9b-4c70-b000-56ada957ea30","block_type":"box","text":"or implied, to the owners of shares of a Fund or any member of the public regarding the advisability of","page_number":127,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"0dddcfc6-ec5c-48bd-8dfc-bfa02a2e854c","block_type":"box","text":"investing in securities generally or in a Fund particularly or the ability of the S&P 500 to track general","page_number":127,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"4c49559b-5c09-4817-8c89-c8c0a1d1afd1","block_type":"box","text":"stock market performance. 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":"3ec23638-6bcb-48eb-bad6-2864462557a3","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":"d7952786-1e83-4bb7-b8c9-b2b00aa77037","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":"9ace03a3-8093-41c6-a867-bf08b35da0ae","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":"420a236d-7f9f-45e6-a1be-889935a05c9d","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":"e22fade5-9d09-4451-9404-3e316c95c4d1","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":"e4a1ed0f-ca36-4582-9008-848d5d1f43c5","block_type":"box","text":"II-41","page_number":127,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"392c23cb-6254-4346-9c07-2f8591b673ce","block_type":"box","text":"NM1026U-6049097-127/259","page_number":127,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8a00c42e-f0d7-4e60-939e-df6591370b74","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":"4cd64617-a5c1-4231-bbc4-a82c12996b7c","block_type":"box","text":"II-43","page_number":129,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fdf3a001-6d27-4056-ba99-8f352f78bde1","block_type":"box","text":"NM1026U-6049097-129/259","page_number":129,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"19cba0d2-e843-4a67-b56f-aacc5eb7ff8f","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":"4471a3a5-32a2-4eb0-94e4-1afaa10f4daf","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":"ff446a74-7655-41d6-9ca0-65cba85c0caa","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":"df190344-c271-4e87-a26b-1ca3a4e7f8d2","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":"c02c847b-6f78-4485-b898-806f3cff684d","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":"7337b33d-ed4e-44ba-9174-69a19f94edcb","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":"a28396cc-9892-4a95-810f-b79c3569ff46","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":"98f269a8-0fb0-4762-a306-281e23cb343b","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":"0b4f6207-3a77-4bff-948c-fbd857a409f0","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":"5ae8970e-c665-46b3-98e6-10138b9a3024","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":"20d14167-a257-471b-9182-94c4f505fb22","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":"239e9776-0c78-4205-b244-8bd38da9b7d1","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":"6877124f-6241-4881-86e0-926092b3d47d","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":"5d3c75a3-d983-47d3-9cc0-64eefcd56eed","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":"c060bb18-8cbf-4639-881b-3384457e57a3","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":"d29c744c-8a40-43b2-970e-e5c1d2a8a04d","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":"d0954b31-ea47-48c0-9c4f-bbbffcee057f","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":"d177ab87-6eb5-4337-94ce-8f4f14041276","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":"c5729658-1e4d-402c-a847-13609f26cca5","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":"b7ebd938-6201-4177-9848-6f67b7570540","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":"51852617-ecc8-48f4-bff4-d6c206af5f5b","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":"bfb58ba6-fb9a-4782-b28f-d7abafab4404","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":"cf694f8f-a0af-435b-bfa9-c587b14aadee","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":"54aafaf6-ac77-4918-a2c4-4cdd702461a7","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":"389f855f-2a71-4ea8-9d6f-e80ebacd1e7c","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":"edf661ff-f940-4c8c-9f9c-c6a063d89c4b","block_type":"box","text":"Inflation Risk.","page_number":130,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"2e6b8cd4-7ff5-4fe2-a088-1f68da9df360","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":"9120ecbb-5e73-4ee4-b559-92f195efc275","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":"ce90aa6a-461b-412c-b3b9-4cae8314e5ef","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":"3e60a1de-0a33-4f74-ae51-98ae65a363dc","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":"fc729200-4b39-47b5-ad33-bac4daddaf2e","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":"0138faa1-b289-4064-876e-d2c4249ee7b3","block_type":"box","text":"monetary policies.","page_number":130,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"cdd703ca-2f98-4978-bf37-f1676eba3da0","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":130,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"5039b8cb-c09e-4973-ac0a-c946c0eeb85f","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":"82e6a117-a8be-4178-b49a-4d1b84789bd5","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":"c5a80f8c-f3d1-4e7a-9426-6a86a0447501","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":"4754743e-792c-4262-a179-7ea4dda29d1c","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":"4ce83b7e-f410-4a13-a62f-b436c9db0c9a","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":"0c613486-082a-4e38-9efe-57bff5d53805","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":"7f4dae02-c1c0-4964-b3e8-43cf5ee192f5","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":"092d5e29-4c9d-485d-af89-cbf2442357a5","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":"ad9678b3-c5f4-4c20-b193-1ec1464e6cf0","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":"dd5b10be-4f94-443a-bf25-ae5877aa4c2a","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":"eb4502f9-98ef-4923-b5bb-e251f252a633","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":"e52c5286-ea71-4acb-8e65-2f078b28065b","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":"411c7b4e-fbab-45f6-9322-40d6a92611d8","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":"e68a6c15-d38b-4aa5-b204-5909b734fa0e","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":"6d333a05-390b-4978-9324-8c9b3b918093","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":"cce3d21f-29a0-4215-8786-9f7eab87f03f","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":"311a74aa-d1bb-49ad-9646-d0956008390c","block_type":"box","text":"may be available for very limited periods.","page_number":130,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"2fb21988-c045-434d-bcba-e7ab5bdc58d9","block_type":"box","text":"II-44","page_number":130,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a435292d-74d6-4c3e-846a-e5908dbf9c3f","block_type":"box","text":"NM1026U-6049097-130/259","page_number":130,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a6e6409b-8d13-4b0b-8410-da7a15f86225","block_type":"box","text":"Investment in Emerging Markets.","page_number":131,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"457d7fd6-0747-456f-88c8-5060bc3b55a7","block_type":"box","text":"General.","page_number":131,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"8d0c8a8b-2d49-4a59-800e-f2f15564430b","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":"8f143d6d-4ab3-47aa-ac81-fad7ef7e35fd","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":"a3e6c7ad-1ba9-434d-b153-1dfa0ad8546a","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":"3f2319c9-800b-4b97-a5a2-a80f5300fc6f","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":"f5170e3e-1fe8-4904-abfd-505c26b15275","block_type":"box","text":"determined by the","page_number":131,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"635748d1-aca5-4f2f-bfdb-ea47375a006b","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":"c8ae750e-3233-4fa6-8de1-a8f578f4dc3f","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":"0eaf7fad-848b-4a80-bdee-e6c9a17ef659","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":"6751c98e-fad5-495e-a8e1-212e7f9bf2e9","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":131,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"693f358f-4719-45d4-a22f-71a796aac7d3","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":"7b172722-3f22-4edf-a7b3-0fb5edda2a8e","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":"7f0c807c-8431-4f65-aa6c-99383d661e04","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":"61de7dbd-c866-4704-8261-da111732d626","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":"c95c6553-191b-4348-8d0d-6c7c58450269","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":"e03ce4cb-daa7-4af0-a8ab-8ac28f9ffe23","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":"07dfeae9-02f6-4566-82a0-5406f6119531","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":"aca31008-50fc-48f3-b89c-c812750301a9","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":"130d34b0-cb60-4c18-bcef-9e2ef1d12257","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":"54d9cf00-70e7-4282-baf1-2383d8be7bdf","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":"0b683369-5a11-4858-a8e7-8e4058c78d3c","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":"26558616-b334-4e27-86fa-a864bc2338d8","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":"d5dd59f0-8e6e-4d35-bd27-5d2262f10846","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":"0e09897e-ce90-43eb-9f0c-e67e27b8f14b","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":131,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"c094cd2d-996b-497d-9472-62009cc07fc6","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":"345bb29c-7bb7-4124-93b6-74b28a4bd51b","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":"0b41a1f4-9211-45db-a83e-6098728a0c97","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":"6c20f0a2-d9eb-4187-bb91-cb6f36563bc0","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":"77f42f17-327d-4f26-81f7-47a59b3ddca9","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":"dd83fbc7-6e2f-4ee0-bb2f-4f7a01a9ad58","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":"fd81edf4-963f-4138-880c-ef01f0f44dec","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":"a100f70f-5f8d-44ca-974d-7b75f29df489","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":"dd6acb2c-c259-4912-8a4f-b885ebd31865","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":"106d3d6a-5ec2-4587-a46c-6654873ed29a","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":"63a1fa47-b7a5-4be9-9480-d6db859c5bc8","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":"44f103d9-c83d-419d-b512-002c29081c13","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":"fe59eb6b-de89-45a4-9b12-d656a1124931","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":"443f1f79-3947-4999-96ac-85844312b077","block_type":"box","text":"more established markets.","page_number":131,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"a64aec7e-32c3-4257-b89b-ab12eac2b963","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":"ef85ebaa-446a-4e9c-8c58-4c26b38f2d5c","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":"902733f5-4814-4652-9d1f-21b40a184ed2","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":"75f2c522-2ead-4c3a-b389-0430da059694","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":"fa95fbf8-a342-46e6-aa15-a23afa799626","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":"b642b788-8d0d-4067-9ba2-5f4c138ff0dd","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":"6304437e-9acb-48ef-aec7-93ea22f0f4a2","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":"b1d8eb4d-83a9-40e1-a45a-da7b56de1dfe","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":"a3a15d6e-d888-4a44-abc6-0d4e0be818be","block_type":"box","text":"disposal of securities.","page_number":131,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"e111a73e-0c4a-40c1-931a-5c480462d844","block_type":"box","text":"II-45","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"08c2422b-03b2-4810-a447-c7bcda29c2a7","block_type":"box","text":"NM1026U-6049097-131/259","page_number":131,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"81e763eb-03e1-4848-a5eb-f9f5ed35cc25","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":"f070a483-50a2-484c-8f59-24575d8978ff","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":"7b11dc07-1550-4789-820d-e357aeb18478","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":"3b3e3fc9-7735-4f7d-9dfd-70b8969f304c","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":"f7db14b2-2bc3-4b62-84c7-7ce1c246f618","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":"be659eea-0c3a-4e45-975b-03dd5a68d429","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":"7543b712-613c-4c0b-9c53-5ae5888dd65c","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":"23c2f551-3baa-4892-8314-ea92ff226ac2","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":"ee5994d0-22b8-45d0-9206-20ff28be2370","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":"ebb3b18e-9d79-4a01-94d2-b2ce5086090e","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":"d20a893c-908a-43b5-8f0b-b57df47c0ab9","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":"ab6547ec-7e0f-4209-b084-021031b6ea25","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":"2a3ab602-b55a-413d-969c-33842f24f0d0","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":"a9f7eeee-19a0-45a2-adc0-f2ed54344cf9","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":"98a28c5a-2fd0-46dc-9088-0180d0b8f8e6","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":"f8db7394-8671-4e29-a324-25f457dd418e","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":132,"box":{"x":116,"y":351,"width":328,"height":12}},{"id":"2b46d719-2146-46ef-b742-cae21752db9d","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":"20b4a5a4-900c-4ea6-bcc9-beb077da3f70","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":"ba53cf49-d61d-4f5a-bf80-281f79b875c6","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":"ed45addf-bc91-4163-a6a3-ef6797c685a6","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":"b1208acd-47ec-4ecc-9a44-b3195fc1c3e5","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":"efda0c08-1f81-4b4d-8399-b0e64d31fe6e","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":"77c8144a-dec9-484b-b489-b2b6a2679739","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":"ac56c161-55ee-4e1f-bd00-4e5f074d925f","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":"de2a52c4-1344-4aa7-baf5-4ec1366e6e34","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":"560042ee-ca60-4764-8be9-13c82b6075be","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":"ee08d0df-19c1-4061-a6a0-2fe6f99f7021","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":"54d8e567-59e8-475a-9162-11e5ec301ffd","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":"baebe407-b567-4202-8fec-0fbe161e8c42","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":"12a0ab68-2847-47c2-9274-a7a50bb0000c","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":"13d982ea-b399-4b02-8df1-8eb8c3c3ffeb","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":"411ba6c8-0100-4e2c-b05b-cfc603bccff5","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":"d3601527-d8a7-4df2-86f0-97526bea8543","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":"4b5c45d2-ec8d-45a2-bc16-300244096b99","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":"efef25e6-c4d0-4611-9871-f4749663ee4a","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":"65f0b544-4198-43cb-89eb-bdf70790a7b8","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":"0adca7f9-61c8-4619-b32e-ea979f02b2c5","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":"dacca4d7-5850-4e3d-bc75-b5af8b115678","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":"aaeeacac-a360-4d37-a854-4ddefb2c208c","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":"26d180af-91d2-448c-b106-e9f061c16e03","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":"50313948-9166-46fc-a9f9-b060a59aacb3","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":"3b105d0c-f550-4e98-83ab-7fa22fedc8f4","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":"e1771a46-d0ab-4fcc-80d8-edc9800dd580","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":"59c2b871-bc7d-4695-9fc8-b5fd55b7e1ef","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":"ddd3b1db-a783-4bbf-b336-63c81f08661c","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":"6303e992-898c-4b1a-a8d1-b409b17f101e","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":"c5a4f0ce-042f-429c-be9f-18950a299c22","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":"7ce51cc5-30fe-4ca5-b64c-2142d02e7e3e","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":132,"box":{"x":117,"y":862,"width":330,"height":12}},{"id":"2b9f7d83-0426-411c-b866-d60761bff833","block_type":"box","text":"II-46","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dddb83c5-21ce-4e5b-a54c-7503c853a223","block_type":"box","text":"NM1026U-6049097-132/259","page_number":132,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"21ee0da5-4f7b-40a3-b18e-0c7491bcbbcd","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":"2a727b47-3b9a-4c77-9111-79caa717989e","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":"e55e460f-b0cb-4ea2-9415-6aa989017ff3","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":"43898e32-48d2-4a84-8842-71a57016e2b9","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":"df4cb1cb-df22-4c72-940d-660b0ed994f7","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":"7789788b-80ab-45cf-beaa-40d3fd5af248","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":"a02ccedb-0d51-47f6-acba-1d8729a05c58","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":"e95018b6-935f-4748-9b7f-cba418a1a265","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":"953ff12d-3329-4b8f-b512-44bdce0a54d0","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":"59dfd956-76d2-4218-9fa8-9b16d203d317","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":"56e6c84b-2252-42b0-ac31-2f4e69ee77a6","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":"43d1f131-8752-4344-872c-308921c9032d","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":"aec8c103-0cd8-4270-b28d-720c1309e80e","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":"a4ead84a-5f6b-4d0e-8430-8b6627a647f2","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":"f5fb76f9-b8e9-451a-8676-903fe869ce38","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":"b738246b-0e3f-496a-a018-e63f1b4770f8","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":"a838b153-f2f0-4d2b-950c-acfee161bc9d","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":"b5ee97b8-d57c-4796-9a62-f0eafc1fffcd","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":"4bb6a843-ab66-48da-b0aa-a0e812dd0a38","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":"c4c3a195-42e1-4c31-a53c-8e1fda542bd9","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":"e9ea3be3-a4d5-486b-91c5-faa64a7c10bd","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":"df3c138e-7aca-441a-8e96-152f211bd9a3","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":"fa835d4d-4690-4068-a25f-1e687dd05590","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":"c0d03c48-b091-43fa-bf2d-ffcf82165238","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":"4e2a278b-5377-4f61-b74e-1f9244c003ea","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":"e1f20389-a088-47f4-bb30-7c0ea890c5c8","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":"80cbdaa1-931b-404a-8929-4de3cbbcc672","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":"312c3620-a667-4a9f-9f27-a66904915add","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. There can be","page_number":133,"box":{"x":116,"y":676,"width":745,"height":12}},{"id":"5a2fd83f-aaf4-4598-ab61-95cbfbf86bf6","block_type":"box","text":"no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In","page_number":133,"box":{"x":117,"y":692,"width":762,"height":12}},{"id":"8f741538-f810-4b5e-901a-d6e24e1e70bf","block_type":"box","text":"addition, changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of","page_number":133,"box":{"x":116,"y":707,"width":765,"height":12}},{"id":"c848462a-53ad-4486-85f1-e8a371d072d5","block_type":"box","text":"such securities may have an adverse effect on the value of such shares. Certain countries may restrict","page_number":133,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"9a93252d-1c88-4a23-b14b-37995a5bd2ba","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":"9353784b-6ab5-4384-b6b3-f499bc85c784","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":"72b199d0-9979-47b6-a621-7cf5d0572dbf","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":"2a8c77c7-7a37-41f4-9f04-70135cf439d3","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":"e162704f-3dd7-4330-b189-a0c8575e897d","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":"ebbb6fa6-2ca8-45ae-ad6d-8e8c9009cb5f","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":"287382d4-7212-463e-9523-0b3bcfbf6663","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":"9c1f9063-36d1-4c1d-acc7-0f219a34dc0a","block_type":"box","text":"currencies or to securities of issuers in those countries. 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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":"4c163920-736f-475b-ba28-61add00e1ad9","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":"511eddf9-f251-40d2-b07c-43d32d4936a6","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":"33b38e4c-2ee3-4746-bbde-7af23c1b5274","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":"045638f8-49ff-4c6a-b8eb-df825e83e68d","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":"36ab173b-fa6d-457a-adb1-2c9b1a711ab1","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":"777276b4-1118-4548-b6e4-652af03b0265","block_type":"box","text":"stability characteristic of more developed countries. 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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":"b2e8fc64-13e4-4ca5-991c-3c851c456d96","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":"37959382-4333-4a1a-b713-db9219c5264b","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":"ac8e218a-2d85-4d78-a0e1-e81625d03963","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":"23e4989a-46f6-4207-a813-09da1cadbfad","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":"c21df247-3632-4697-ad03-b1d2fa649b00","block_type":"box","text":"prospects of an investment in such issuers.","page_number":134,"box":{"x":117,"y":622,"width":325,"height":12}},{"id":"6a404343-37f2-4a35-9ca5-4c159b072b94","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":"f0e609b5-6ce0-40fe-9c8a-2fdf771689ae","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":"7c39a94f-c1e6-45d5-8f11-d6e611f13cc3","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":"6b501912-949c-4d07-946f-0267bad43c4a","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":"5dfebf21-c209-4000-9559-0f7dc6fdd51c","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":"ac277c07-7a72-497e-9f2c-fe84f9ef7c2d","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":"8afd7a99-5196-44cc-a7f1-3a5a13c45d7e","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":"a16bb02e-3e01-47b1-9a70-b0f6236e13bc","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":"fd5b0d3d-1606-4166-82c6-14418f566a4c","block_type":"box","text":"curities markets and banking and telecommunication","page_number":134,"box":{"x":496,"y":862,"width":388,"height":12}},{"id":"3b5836aa-3cba-4993-a341-690c27fd3f77","block_type":"box","text":"systems, settlement, clearing and registration of securi","page_number":134,"box":{"x":116,"y":877,"width":396,"height":12}},{"id":"0ccf35d4-b768-4565-b5e7-4df3fc7fdd59","block_type":"box","text":"ties transactions are subject to additional risks.","page_number":134,"box":{"x":513,"y":877,"width":344,"height":12}},{"id":"664c82c4-9ea4-494e-9943-48276d1f3c6b","block_type":"box","text":"II-48","page_number":134,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"226f23b7-7743-494a-84dd-d08904b9f00d","block_type":"box","text":"NM1026U-6049097-134/259","page_number":134,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5d6d0106-6077-471d-bc49-c636455e7039","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":"9d44db03-59a3-4c65-b206-903798188480","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":"d2f45182-e417-4769-a181-d8713a06c34a","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":"d882d4a5-e6db-41fe-9905-21e432b38eb9","block_type":"box","text":"selves or by registrars located throughout Russia.","page_number":135,"box":{"x":507,"y":103,"width":365,"height":12}},{"id":"11459783-c266-4775-88d4-63fdd60f69e5","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":"97284203-f436-48c2-bd7d-a0e54fa797d9","block_type":"box","text":"governmental entity. In 2013, Russia established","page_number":135,"box":{"x":116,"y":134,"width":359,"height":12}},{"id":"53ddf75b-d60a-422b-8b51-92bc96db41b6","block_type":"box","text":"the National Settlement Depository (“NSD”) as a","page_number":135,"box":{"x":475,"y":134,"width":356,"height":12}},{"id":"dac26fc7-d1f7-4253-af86-6f2b5ad53352","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":"281430d1-8a9e-4505-9999-a76a723ce505","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":"453ec4e3-0504-4d12-ad3c-6f1836f0fa41","block_type":"box","text":"the local registrars. Alt","page_number":135,"box":{"x":499,"y":165,"width":162,"height":12}},{"id":"f8c46a24-578b-4233-bf02-5afad0449c7f","block_type":"box","text":"hough the implementation of","page_number":135,"box":{"x":662,"y":165,"width":211,"height":12}},{"id":"a024b7a3-3249-4c82-95aa-c4689b2ee8a7","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":"749f511a-72c9-4c4f-9be1-075f7c2c5afb","block_type":"box","text":"occur. Additionally, issuers and registrars remain","page_number":135,"box":{"x":116,"y":196,"width":353,"height":12}},{"id":"1203627b-4722-4149-883a-12824916e996","block_type":"box","text":"prominent in the validation and approval of","page_number":135,"box":{"x":470,"y":196,"width":320,"height":11}},{"id":"2432e372-5716-4558-b9a0-0416c398608c","block_type":"box","text":"documentation requirements for corporate action pr","page_number":135,"box":{"x":116,"y":211,"width":374,"height":12}},{"id":"99be1245-5470-4df4-886b-d6a0231d31f9","block_type":"box","text":"ocessing in Russia, and, because the documentation","page_number":135,"box":{"x":491,"y":211,"width":389,"height":12}},{"id":"7d859427-e819-4daa-a9e6-23954e03dd8b","block_type":"box","text":"requirements and approval criteria vary between registra","page_number":135,"box":{"x":117,"y":227,"width":410,"height":12}},{"id":"b7afb762-449f-4fcd-90f4-0a6cfca00308","block_type":"box","text":"rs and issuers, there remain inconsistent market","page_number":135,"box":{"x":528,"y":227,"width":354,"height":11}},{"id":"5263018b-a1e5-46c4-bdc5-e2c5a7cb1b86","block_type":"box","text":"standards in the Russian market with respect to t","page_number":135,"box":{"x":116,"y":242,"width":351,"height":12}},{"id":"409352ff-4897-4f07-9dcc-9e0a39a04bf9","block_type":"box","text":"the completion and submission of corporate action","page_number":135,"box":{"x":467,"y":242,"width":372,"height":12}},{"id":"35da4bf6-597f-4326-a29f-18c90c849768","block_type":"box","text":"elections. 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A","page_number":135,"box":{"x":532,"y":304,"width":354,"height":10}},{"id":"de7dfa22-b567-4e1d-8b41-4f413cb41586","block_type":"box","text":"Fund also may experience difficulty in obtai","page_number":135,"box":{"x":117,"y":320,"width":312,"height":12}},{"id":"a96967fc-eada-40bd-aea1-57d994895371","block_type":"box","text":"ning and/or enforcing judgments in Russia.","page_number":135,"box":{"x":431,"y":320,"width":316,"height":12}},{"id":"20c37e06-1c33-4201-9ff3-2cdb7ccd2b4b","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":"32b2fcd3-4f8f-4fe2-afa0-dad1ddb48243","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":"2471f917-f895-448f-84bf-df8df358fc20","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":"29665955-8f8c-474b-99a3-d8748cbb1523","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":"5f93de18-562b-48a0-bd9f-defa12badbd6","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":"1cea4169-f7cb-4865-853d-15393109f62d","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":"77765987-4a2b-4c34-91c9-43c81fb2644f","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":"0158ddd8-1433-451b-bd4a-986148b4f319","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":"200b5d58-e44f-4ee6-aa5f-b254537497f5","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":"397e553a-2f74-43b2-84fb-cd2629adc4cd","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":"2f16f8e8-7cc3-494e-8383-416017f3aed4","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":"05dd7da7-2043-498a-931c-056d40069c3c","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":"59c54eff-6cbe-42b8-ad7a-7d12dcb78ef5","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":"b9c2a3eb-e283-464b-8652-466e720190b9","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":"c8f69c6c-5d91-48c7-b46e-69f83278c8a4","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":"1e104ca9-3e05-406d-8cc1-1bbfe19fb560","block_type":"box","text":"sectors globally.","page_number":135,"box":{"x":116,"y":583,"width":125,"height":12}},{"id":"6cc37926-409e-4139-bab0-d4bd5804e733","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":"f7b73397-92b2-44ec-b5e5-391fb57fd396","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":"876fa682-07a1-4669-af5d-82f3c732642e","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":"79913b65-ed3e-440d-aa19-f8fd2b9206e5","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":"134eb26e-e1c4-489a-acb4-93f274056ddd","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":"1b8b6630-02fe-42b4-a096-a9183e6a5bb3","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":"c5006788-d339-4f53-ae9e-bbbbe92d20a9","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":"bc03990a-4caa-482e-9cfc-10e4eacdf3ae","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":"1be21ddb-3a23-41c6-909a-e45edbd3752c","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":"976f2790-5949-4538-bc76-944bf69b68e3","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":"21863014-1826-48bc-ae68-df2db88701e6","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":"d8dc07ce-0717-44d3-a6af-8db685ef2746","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":"38e67f5b-57b7-466a-adf2-0069ecd20cfa","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":135,"box":{"x":116,"y":816,"width":253,"height":12}},{"id":"ca52d59d-3c66-4a47-b894-6d16489885d1","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":"e2589199-68a9-4e02-b6fa-da5629191c68","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":"0a15b1fa-22b8-4ead-8c45-9a4f0d066434","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":"6715e84e-81d7-4689-8fcb-990261777c3f","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":"47172ba6-c5dd-4435-8293-2b7ba443b41a","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":"64697fc2-95d0-4924-8313-75748d1c66f8","block_type":"box","text":"II-49","page_number":135,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3f9a0700-8046-4477-947f-f57b86e24b97","block_type":"box","text":"NM1026U-6049097-135/259","page_number":135,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1c124745-a9b2-44e4-b129-195cb21f61bf","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":"c671d9a9-38c9-430c-a62b-9689e7a5b01b","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":"e2cb9f7c-173b-404a-9837-ff48470221f3","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":"c8c928a7-e99d-4e22-9625-ccbe82e1e6ec","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":"a2fc43e8-5a08-46c8-a510-e9690b4be511","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":"17e14508-b1c7-48cd-84e8-46d33adff4da","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":"69737629-734e-4487-8e55-7645c79a4a9d","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":"b8375217-48d4-4d4d-8e9d-c4b3058678ad","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":"3bd7c991-1807-4d05-9e6a-73d9d47c99f1","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":"e3ab9609-f6e2-4dbb-b1ef-cf3f50332ac2","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":"9c508995-83a8-4a7a-93d3-e2ee90868f0e","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":"ca44b381-ac94-4a70-91ea-1633e122103f","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":"aa9d13ec-aa1f-4010-9ab4-f49dfab9934e","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":"78c486ac-a7f8-4ede-bdc5-ed7f58764448","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":"6040b093-1e99-4596-80fd-d66af849eaa7","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":"4af18aab-80d3-4169-a063-45e1a155bc43","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":"b16813e9-f037-4754-9934-5e990c763384","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":"b8a8bc5b-2975-4695-9e24-cec92b533f2e","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":"7f5e9cb2-cf95-4a51-93c2-ac3cd323d4af","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":"2f9731fc-78e8-4719-be19-a2df0b59557f","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":"8213e365-f327-46b2-8216-f3a859f944e3","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":"07022dae-fb76-49b0-a87a-237b3f971eba","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":"17d221af-2aa0-4437-8cc1-05423a845a61","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":"4e728d64-e20c-42b6-ac36-fee6319c87ca","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":"016ca21e-c51b-47b3-9cb5-17ceadc0eea0","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":"b18b1ab4-9044-44be-b1c5-4f8ac95554db","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":"5dedc8d1-655b-4303-bb59-efe89dcea074","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":"30293fdf-5430-4625-9813-c7112c3b879c","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":"d0fa34d2-f7f6-4a29-8c79-c3cc83460c5d","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":"97644762-0131-4052-b497-0b8fb3d3d32b","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":"3fc1aaee-3c12-4c64-96ce-db5a3a60a871","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":"deda1c3f-03e6-44a7-bdf4-d07e4f79e6a6","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":"10d2efc9-88f5-44f3-87fa-a9155a9d950c","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":"60841dc5-fe8a-485f-b9fa-f08c8d0525a3","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":"0fb2d3ef-e031-4673-addd-6ec0bd730ce7","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":"44917da0-ba1f-476b-ad9f-cbc15026c8d5","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":"b37558bf-a161-4e70-9dae-865e4dc21faa","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":"3aad9cce-f555-41a1-9907-25e73dfc7c49","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":"828fbf50-e4dc-4f98-b986-192cab01fdef","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":"f259cb3d-22fe-44ff-900e-8ed48f58b30d","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":"73fb864f-0457-42f0-923e-e7ce9580fe9f","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":"2232e034-ca45-4236-afba-ac41275ad24a","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":"67291f04-fbdd-48b4-afee-79b2b4ab1b3b","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":"d7e2710c-e96c-4864-8f49-171a8d7e260c","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":"bbc4f257-8ad4-4868-89d5-f47ce4254946","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":"d2e11da7-e362-4293-aaab-ca41bd71bf53","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":"3e70bea1-353a-4b9e-b76c-2cc0516e6e5a","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":"13d7128b-07c1-45a3-82e7-accf1d83da8b","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":"1dcc13d5-d11e-4a80-b689-18c02d49033e","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":"26a09f25-94db-42d1-8db0-a91bbfacb8e3","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":"bb5812dd-a579-4f78-8796-2f79940d0cb9","block_type":"box","text":"II-50","page_number":136,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0d8bfd62-5f03-41f3-8239-38aec15c1d12","block_type":"box","text":"NM1026U-6049097-136/259","page_number":136,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1ce52287-08df-4cdb-b197-2ab93512129b","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":"8b99a351-2fe7-49e7-aaca-2c36d01ad4ce","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":"350cbc8b-ba68-4921-83e1-10939f2f9482","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":"3e81367d-2902-4e60-ac13-ea4b62d87e2e","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":"32cc4b90-28cd-4cb7-8eb1-dd7884059e2b","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":"06c66b61-733b-4e36-a1a0-231c0984207e","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":"ff96d72b-8c82-456d-a7f2-976672ff5ada","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":"1c672d12-bdcc-4765-9146-1d64b3c40c38","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":"0a9b1394-3843-4535-a856-3084a4022ae7","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":"fe5647fe-68ce-42a9-90f4-c751d5382c74","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":"05afd8c0-6c22-4a72-81bc-7d8ec0694ac1","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":"152db889-960e-4409-9c47-54d424be2221","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":"7796f9e9-735b-4a40-b8cb-989469eecff6","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":"bc10d040-5487-4c3d-a4ab-8c366aede4d8","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":"dc3d7f41-a600-40d6-bff7-27c3991440e6","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":"0bddce77-c975-4eb6-b097-e8821d5c220f","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":"5c211bec-7cf1-4111-a8f0-2d9ee0596480","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":"9ae9c721-9f4c-4a61-af39-384b12a7b22e","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":"f5ae96f1-7504-4286-a3b1-513b74e7cacc","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":"0e74123a-1eef-4de9-bd53-fbbfb5354b69","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":"70bbbea2-f877-4396-ad34-023de5a0a300","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":"f056aa46-7118-459c-94fb-b59bc22e288a","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":137,"box":{"x":116,"y":444,"width":237,"height":12}},{"id":"333e01e9-1459-49c7-ad20-725ab42c9cbf","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":"05f046c1-a4ec-4424-8abd-c2c2dbc4a127","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":"168ee558-0b1a-42c8-ac41-042df0c6eb8c","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":"6bd1b3e7-9c8a-4ac2-81b5-9b2aa567d5e6","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":"ee10a9a6-0b1e-42f7-bc84-bdea2b9b0edf","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":"10f17172-6826-4ff5-bb57-ac85ff120c1e","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":"79cd6fd4-8dda-42ef-9c25-ca1905c90106","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":"94b6409a-d9d6-4326-9e90-cae0ecdfafc0","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":"61abd3e0-4baf-49df-9589-c7dc8de2d6fd","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":"e233d236-60bf-45a9-86c2-fd58ec11ae34","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":"7e5882b9-5335-4ab4-8343-3ecccc85ee9d","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":"7499bf86-cf31-486f-a71e-350bb20f57c1","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":"25a06532-e8ae-4fbf-80a0-2e9e773f58a8","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":"45b14a27-0b0b-4bbb-93d9-1b72e16b747c","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":"f8ec1118-b727-4936-8a8d-30e94d9ccd7b","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":"98df6d11-d372-4336-86e9-f1176616dce3","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":"e0422b15-3a4a-42db-9f80-26eefd9fc281","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":"8e7ee00d-8b7e-4fc2-ab6d-9afb442083b3","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":"c5877d4d-bc79-4a7f-9957-aab651f9339c","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":"36ca7cf6-12ff-4940-8a93-b34173559b46","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":"6ed6f045-fb58-40fa-bf6b-e81a3f1a850d","block_type":"box","text":"Brady Bonds.","page_number":137,"box":{"x":116,"y":769,"width":99,"height":12}},{"id":"61a5e64b-ec48-4ec4-bebd-eea3148326ce","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":"8554abd0-ca38-4a56-b332-88854ba9e80e","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":"206954c4-7743-4ccd-89aa-10132ae04351","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":"0cc4d959-baa0-4b90-aa92-cc62d3cfe860","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":"126b6ab8-0eda-4c86-a7fa-aead0b6344a8","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":"a00b062e-fb1a-4c93-8169-7b1d8d53b166","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":"7b2144e4-0280-41d9-8a45-d97a690bd8f3","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":"09c93aa4-9b03-4fe8-9848-11c841a35137","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":"39f5ef17-a7bb-4b0e-b954-bcd63e171948","block_type":"box","text":"II-51","page_number":137,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"33eab940-d9cc-4451-b204-d1e386555c66","block_type":"box","text":"NM1026U-6049097-137/259","page_number":137,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b1162d8d-2e46-4bcc-b8c9-47c580239bae","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":"2b739897-3088-4044-844b-464cd2aa7c96","block_type":"box","text":"Philippines, and Venezuela.","page_number":138,"box":{"x":117,"y":103,"width":211,"height":11}},{"id":"9388d662-60ea-408d-bb24-37b45cd5b0c2","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":"3c740471-8dc7-4868-9eaa-d2dc82c95655","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":"0d782e09-e21f-4800-8ac8-b75247f10737","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":"942cfdec-6d28-4fca-b79e-2bc9dea643f3","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":"63a5733a-15c2-4944-93ed-441f491fc07c","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":"80318ed0-eb87-434f-bfca-74505ff4066c","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":"a34b573e-b910-4a0c-8bb7-4150e1d89e4a","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":"094c898a-9aad-4afd-a27b-b9dee02492e8","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":"f2a88400-db1f-44d3-820c-25618bf8a534","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":"99d376af-45c9-4a82-aa7f-e29c9ad9f3f6","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":"bb532883-58a4-4cb4-bc2e-a6316d145b32","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":"bd637597-ecdf-4073-b2c9-c458fa9d31ea","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":"c6ca8eed-c984-4a71-9832-8c5073980454","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":"243dbd99-10c8-4614-8298-27aa7c488a19","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":"ee29dc34-fe25-4064-ab55-31780bb7c39c","block_type":"box","text":"“residual risk”).","page_number":138,"box":{"x":116,"y":351,"width":116,"height":12}},{"id":"edb37c9e-8a8e-4e14-99f5-d248c4c70a0a","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":"0e9e926d-9bc4-4697-819f-909381d619b6","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":"fa615e48-51d3-4325-91b4-a7fe1ebd09ea","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":"0e80baa3-8f8f-4789-a865-8f1e591499fe","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":"ebc5dd5d-6ab8-43a5-814e-edfd1a350c0f","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":"f6cd5edf-04d7-4e69-94d1-47d1a7e65d49","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":"e046c5e0-07b5-4dfa-92cd-3fc6346f7fee","block_type":"box","text":"principal on any of its holdings.","page_number":138,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"0f5070f9-6b6e-4da5-88a7-08a6ef916a7e","block_type":"box","text":"China Investments Risk.","page_number":138,"box":{"x":117,"y":506,"width":185,"height":9}},{"id":"6ad3fa81-9891-46e7-8f6d-69c5f88189d6","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":"c264b93d-3e9e-4725-a44f-7a8ff4e80571","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":"0d650183-4caf-4292-9f6c-90a1327a8a49","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":"79a559d9-1080-4c44-9df1-f32334287b64","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":"67b451aa-c64f-4905-b665-6279289fca03","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":"c435cc49-26c3-41f7-9f1e-439f89528996","block_type":"box","text":"economy and hostile relations with other countries.","page_number":138,"box":{"x":116,"y":607,"width":382,"height":11}},{"id":"2ea36d80-823e-4d81-bdc9-0ca919b4916f","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":"5b771334-fe7a-484b-863f-6a5b37bec00f","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":"e84b0a7d-3d51-4b58-bba5-5256a609258f","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":"76d1d09d-7545-4c5a-b826-8450866e7251","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":"2c4a3400-5c9d-476a-8449-24000fd334c8","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":"60d52771-146d-464f-a0d3-3eefcf5c3b19","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. 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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":"30e3205d-9c4a-4259-83dd-d71bc8a21a74","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":"6c24a440-50ff-459c-811b-65e402720dbb","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":"4eafd218-a7ef-4750-9ae7-b28ce41a4532","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":"c4208bc4-ace7-4cae-8101-5304fc84d7c0","block_type":"box","text":"II-52","page_number":138,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"4448a5a2-8893-41ce-bbbd-6bdcc6de0253","block_type":"box","text":"NM1026U-6049097-138/259","page_number":138,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c24f1966-b551-4620-8d29-b0b430d22877","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":"884bde8e-0b66-4db3-976b-3b78251a7e68","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":"ac7c6ed8-718e-4756-be58-ce302fc1fbeb","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":"21d17fd1-c15d-4971-a901-5b6428078444","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":"d9fde0d0-97bd-4269-bce5-dbb3af5437f5","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":"dfa1bbf3-cbc6-440e-b598-768bab15f9d0","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":"9964a630-ce09-4d89-b63e-0d675f1de098","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":"1e82e3c8-fcc8-442a-bfbd-38c03a6409c7","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":"d6225d3b-8a24-4537-84d1-ba4d3f88b4f5","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":"41458b58-156b-4184-8a08-aedd6f3b643b","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":"7b61e983-50e0-4cd9-bfb6-0acc5f0c6c6d","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":"7375dcf7-2364-4985-ad02-6a6bbc104152","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":"28b591fe-4537-42e1-a195-530818bf20aa","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":"7a13fb79-7c77-4c96-8d1d-6b4736961957","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":"e9413ce7-8d70-47f8-af5b-9b4799f59980","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":"daffb244-c4de-4792-9b3a-c7bba4571199","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":"f19fa788-154d-42e6-a76a-6911f68dacc5","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":"5da2fce4-0169-45f2-9547-1ba568a112c7","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":"2e0c1375-a804-487c-b009-4b9727fed89e","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":"e20196d9-0237-4f9a-a879-748c237e7675","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":"ccd66776-14d5-4f08-86e9-6ea7cfdc2de0","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":"da44132b-4469-4790-ad24-fe8140cfb78f","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":"d7bad414-45f6-4345-ae24-e450728a14a6","block_type":"box","text":"a result the performance of the Funds.","page_number":139,"box":{"x":116,"y":459,"width":290,"height":12}},{"id":"136fdf3b-5232-4aa5-92a7-67fc071d5156","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":"cbe28820-82b6-4b19-9aeb-974adeab33d7","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":"b3fc94e9-073e-4e65-bb8b-74c25a9d61b6","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":"64e552ce-b8db-40bc-8215-4b2d008b3b4f","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":"0f1ef1a0-21fd-43a3-af43-897ac5303e67","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":"582f73ca-0a7e-40af-84ef-d98aee2dcb06","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":"6032c848-04ed-41db-8f33-a91368d695bb","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":"4a28f78f-aadb-4758-9ecb-5b9d0136c3e7","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":"c6dfca4c-7af3-4bfc-b3c4-84576acbe811","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":"93b4f744-8dce-4c3f-b833-85bcc5c5c81c","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":"183f8926-a7c2-4e50-83c2-2dd05ef89832","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":"f5220b51-734f-44b3-a1d6-44278bd41aa0","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":139,"box":{"x":117,"y":661,"width":278,"height":12}},{"id":"f48426f5-ea71-4f88-a442-a6403a97fb97","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":"2567d0cd-8a71-4053-9550-f0273edb4879","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":"7d6f6a03-2190-44ab-bab6-b790acf9aac5","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":"aa5e1a40-bc4d-4321-8ba5-75a43deab822","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":"a3a16871-e886-4231-8453-fa60f336115c","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":"a81f52b4-856a-42b3-99d4-89253a9a39bf","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":"4491689b-e47d-4904-98f2-a29b8ba01ba6","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":"72be0ee5-ddbe-456d-a5fe-d616b4b018a9","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":"2d7cea41-f60e-4d74-a204-0d6894332124","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":"ee3260b5-543a-4fbc-b6ca-0ed3acd91ab9","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. 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Accordingly, information","page_number":140,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"535d9345-59fd-4ddc-a556-09529e771606","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":"08ec5153-171d-4eb7-956a-fa83ce29fbaa","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":"dcbc1f3a-72df-4af2-820b-491d38dcd318","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":"be86be9f-1e36-4f28-a5d7-3b16a6586299","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":"d5315bd5-0a7d-426b-a248-fc4dfb3cae48","block_type":"box","text":"accounting firm.","page_number":140,"box":{"x":116,"y":165,"width":123,"height":12}},{"id":"d6ed39b5-222d-442d-96e6-7408ca6f3b43","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":"25cb0107-1cd3-44cd-9fd1-d424a14c3912","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":"1802f6ff-1d87-4a89-9487-385a7f58b2c5","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":"292ca1fb-d3ea-4d4c-a94d-40cddecfa680","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":"74879dca-6f5e-4c7d-af6c-c63447eaa219","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":"79b854d5-d043-4052-9b57-1126ef2868af","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":"1982a9a4-1347-4c4c-a102-a2b9ebc7dec9","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":"26c33286-7cc9-4edd-b27a-f0f6ac2cb599","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":"e3309bc7-2e58-4e23-bfe4-c6334a9c4a9f","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":"ba356e89-41c1-48ed-a0ff-d8eeeed62a0f","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":"df78280b-f56d-4f53-982f-4b5c92e05d47","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":140,"box":{"x":117,"y":351,"width":340,"height":12}},{"id":"66697c89-a2a4-4d8a-b404-61599ea0f3d8","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":"cb394766-5030-4450-a898-04a05a153010","block_type":"box","text":"structure as a result of foreign ownership restrictions. 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These contracts provide the U.S.-","page_number":140,"box":{"x":116,"y":459,"width":749,"height":12}},{"id":"4bb59e1d-0493-4d7d-97df-a9b70196c8b9","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":"ccdd2d7f-3fea-4ede-bd66-06e71e2f5543","block_type":"box","text":"equity ownership in the operating company.","page_number":140,"box":{"x":116,"y":490,"width":329,"height":12}},{"id":"5a615bd4-273f-40b4-951d-6c115fc12dee","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":"4e869416-c82b-45a2-9b8c-802133ed5464","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":"10c38deb-f550-495d-99e8-33ffb5590de4","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":"f9135cc6-95e0-44c1-8580-a3fb2d9cf66d","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":"dfedca13-beda-4dbf-a7d5-c33045c48c2a","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":"26b4b36a-0d20-48d9-ba47-edc88e2dfcfd","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":"05d62033-f6d4-40a7-9a40-e00eb7af8fef","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":"b576ac10-41a7-4248-b21a-14fe7f752108","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":"9363c54f-6b10-4366-b303-8f20953998cf","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":"6c09f53a-6f07-4aa1-8874-e05a21fde035","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":"f19dbfbe-9e84-41de-914e-b61cfb72a62d","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":"69a816b6-e965-45cb-a1c2-832b93076190","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":"e8a69ea4-ab3a-41ef-9dd8-4c46c68940a2","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":"709ef648-0405-4938-9e74-6b7619424004","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":"db91111a-4179-4535-905b-20f267a14e83","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":"1e742980-4393-4862-8d4a-cef25ec243ec","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":"b7d529e9-efa5-4122-a3d8-b9f6ca9d5a97","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":"72741f21-eaba-4e47-ac4a-77636cf32a77","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":"94856028-1aa6-4bf1-8bae-9f12c5a3d46b","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":"d133ef69-2783-429b-8248-22b8bb242936","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":"27c84e4b-46ed-4df2-99f8-f787aa3188e8","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":"2cef638e-8084-42ba-a127-aa50d4113153","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":"ac79da90-abce-4f58-acb5-4a438c18de9f","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":"28a3b5c7-8467-417f-8e77-19f45536a071","block_type":"box","text":"II-54","page_number":140,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ff052062-7eeb-448f-8e5a-0870517f7ab1","block_type":"box","text":"NM1026U-6049097-140/259","page_number":140,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"687a2a6f-cb43-44ee-878c-4529400cedc2","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":"5290cab2-63b2-4503-95ef-15f71d242218","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":"0cf848ac-80aa-4e4f-af82-a69791dc8d6e","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":"eceba041-7564-4a48-861e-94417f5d38d7","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":"7df25d6b-931e-4364-a346-acd1ef6498e0","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":"ad48ca23-ca2e-4404-802d-4a7c336e792d","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":"f188e617-c591-457c-954c-158e29b67050","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":"2d0ceb9f-8a66-435d-9ed6-fccf8ac80a56","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":"655678ad-9f3b-4da8-bc25-72dbeff0eef3","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":"247fac9e-0a60-469d-9ea0-398571c755c8","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":"8e2b3aaa-26c9-4253-bee6-4c6bbb2d4c4f","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":"7504d358-36f7-4f5d-b7ba-c3f08688d483","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":"416cb1c4-00e7-4299-99fb-8d7dddcbb03e","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":"a74a83ad-9e2a-4cb3-935c-25dea7b3caa9","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":"db94961a-4211-4679-bae6-b51dc61dd56d","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":"a555ffd0-6c6e-484a-9f2e-934d7dd9227d","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":"82673f20-2df9-44ff-90be-eb06a92d14ed","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":"7d660e5f-5f76-4ace-a3f6-fd7e5ac2bcbb","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":"a57c3a3b-e70a-481f-8a6b-525b73c56f76","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":"736fc5e8-370c-467c-8228-fef3b802ef95","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":"1c4381dc-2646-4752-a342-ff15efa47438","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":"ccfcc9e6-78fa-4c66-8194-768ed0806fbe","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":"ea968cfa-93f2-419d-bea9-6d7c03817d0a","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":"74f17c26-e8da-49ea-bce5-2801fe2e56c4","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":"afcbda5c-08e0-4adf-909c-703d79b7d86e","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":"46a67c77-ec4b-4f1c-82d4-6fec20086259","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":"ea03bccc-b827-4035-80da-726aed3bcfd5","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":"07966a1e-08cd-4c57-b477-df5d80382ed1","block_type":"box","text":"international accounting standards.","page_number":141,"box":{"x":117,"y":523,"width":264,"height":12}},{"id":"28f998b9-fc96-4079-9b18-4474e28c31d5","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":"430ab336-faea-4668-b02d-ef3f2cd52f39","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":"72628b3b-8498-4ffb-b4c8-f0bd1cd93813","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":"b7c35090-6431-4177-8fa0-e7feb8b3fd80","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":"e3c38555-6536-4645-954a-bd5604cac517","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":"184771fe-8216-47e7-9515-d87718b39c18","block_type":"box","text":"Fund’s investments.","page_number":141,"box":{"x":117,"y":633,"width":153,"height":10}},{"id":"1ce946ed-d7b6-4af3-bf39-8289145e9414","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":141,"box":{"x":116,"y":666,"width":302,"height":12}},{"id":"3f582e75-9ca6-4d90-a3b4-6a2f3b3d8825","block_type":"box","text":"General.","page_number":141,"box":{"x":117,"y":690,"width":62,"height":9}},{"id":"c7431458-79bd-4a4b-820a-73fda1d08f19","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":"2d0e7372-b1c4-4a9d-8e12-626b2f1eab50","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":"7140061a-0603-4b01-9bce-d2b7ad1985f4","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":"f9529671-4985-4211-b44d-8cfa8b2b55ed","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":"9d480113-e9bb-4930-8920-1ada85f6ed6c","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":"eeb8804e-d4aa-4085-aba7-e93b0c1237f8","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":"89041f62-6591-448c-b1bf-3dcf9d1d0c5e","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":"7b683cca-87f7-4a04-8f5c-37898d8cab46","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":"bceed910-d448-4c68-a4f5-ed799ab4358d","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":"9433b41f-1651-4f19-8779-73622042a2f2","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":"b61b37d8-fdb9-432c-b048-333a32007915","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":"a2749ec1-a1d3-4428-ba46-e825d4cb3bde","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":"796163bc-2990-4800-bcff-83fae15b8cce","block_type":"box","text":"II-55","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"709984b0-3d8d-46eb-9233-2b7fb4a6aea3","block_type":"box","text":"NM1026U-6049097-141/259","page_number":141,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"332e75ae-fefb-4e2d-a0a0-22302e59a307","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":"20039f52-6bf4-46f8-80a6-3fac49e8c192","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":"f93d0b03-af2d-4f5a-8ab4-7c134a5b4cb7","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":"25ea001a-32b3-414b-adf5-b5d7e6fba86a","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":"d37dea38-4eb2-49bf-91c8-a74ef74bcb5f","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":"175188a7-f26b-4861-8f11-8517be9ad87a","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":"dc677d71-f33f-4505-b1f3-643789f5576f","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":"cfa55270-eadc-4f36-8cbc-c57dc1649667","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":"43ed5f5e-bc5e-4586-9966-152a5f62f872","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":"f8dcc5f1-ad49-4953-9059-c9328b6014ce","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":"d752a8de-d0d0-4b81-88df-c5a046900d81","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":"e368575b-4902-439f-aae2-7544a287dfa2","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":"effb4e05-b549-4c36-a455-20678c48baba","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":"7e483ffe-cf7b-417a-9801-95122aceac3d","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":"6dd8bf23-48a0-4632-862b-4529c2e05cee","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":"ef30af86-9c5f-4ded-ab84-c8b030c8f616","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":"d16a4ef8-9d14-4d95-819c-4a68dc10a80b","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":"2bf33407-48df-4e32-9c0d-19d2679c2494","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":"5e83fdcb-ce30-45cd-986b-b45669a51066","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":"78cd993a-75a7-482d-bfd3-3cdc7fed55df","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":"ac9561cd-5393-4521-b5f3-5ef8ff573cac","block_type":"box","text":"Securities”) of its participants (","page_number":142,"box":{"x":116,"y":413,"width":226,"height":12}},{"id":"3930503d-7c15-4f72-a2f9-fecf03414e17","block_type":"box","text":"i.e.","page_number":142,"box":{"x":343,"y":413,"width":20,"height":9}},{"id":"26c5fac5-6244-4732-9af9-9e4766f76bd5","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":"faed5b5a-ed7b-42d4-b99a-f209619dd7c5","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":"f3ec7571-2780-4466-a555-f54ad92542a8","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":"c599eabc-d640-49e3-9080-ceef76c63e92","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":"b2a51ac9-7558-4631-b1e1-a742cf4aed10","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":"1c01774d-fe35-41b4-b3f6-808ab5a28440","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":"8591f6fd-a688-43ae-b631-696cb6c69230","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":"2d781b7e-961a-47db-976f-e3253d5157c1","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":"dacd7d99-aab5-4115-95a5-f46a889fccab","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":"39746096-3b2a-43ba-8422-21173ed96131","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":"2da3f4b7-1e98-457b-9889-922d08e2accb","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":"a6027c83-72c9-4a10-89f3-2fb608d798f1","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":"0a989365-55b4-4f84-8aba-f0dacd4075db","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":"9447fbf3-d352-4ddc-9d11-6a1eee51b43f","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":"537d7afb-dddc-4708-834c-46bd79482200","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":"fe6f2fc6-9132-4748-b594-46bdd0d2c878","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":"51742053-9517-4d55-96cd-0abd19209765","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":"5fcb3e23-a22d-480e-8441-04644ae802ea","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":"4a110ea7-fb03-4d06-990c-6b9e66861ab4","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":"9e5836d1-f1f3-410c-9d12-c7ef5649aa39","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":"052ca219-3cd4-4914-a599-9f6433234ffc","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":"173b5408-a525-4485-8b98-a8af3b763091","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":"4e3dc8e2-2ed9-4a7f-9f40-d9018f85fee2","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":"2ff89ddb-2704-4bfc-82e4-afcbda6ab123","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":"06e1b460-c114-4a4a-926b-b467e4a2fdaa","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":"f529a65b-7c15-474c-918c-24ed5fd6cfdd","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":"ed037397-c70b-4b6d-990a-f20904c2a723","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":"63751aed-2a18-44e1-8b74-dedb97a417db","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":"c21bb038-a69d-4142-8d7a-e98b9e43d2bc","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":"94ce3e25-ce15-4dac-b9c1-b4bf7f7c1e3d","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":"fa6c7f62-a862-4de5-865d-36abf6da977c","block_type":"box","text":"II-56","page_number":142,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a5dc5016-7d4f-465e-a2ba-069eda136f66","block_type":"box","text":"NM1026U-6049097-142/259","page_number":142,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5ae22722-0001-42a2-9e2d-9aed3cf28a82","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":"cf644051-980a-48e3-a8f5-ce0521313d52","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":"58d98835-0176-40fb-8d8c-c62fc2cd9fa0","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":"74d19ffc-d965-4c9a-a655-ea077ef57dea","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":"c04ef2ef-156d-4ede-8939-860fb208852e","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":"3662c1c6-cb52-4a1d-8c03-5d105bca946b","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":"6c068b8a-6dae-46a5-9601-224838318ade","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":"ef297188-4fcc-4ba1-9390-d989dd0ae2d0","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":"4e64638b-9e61-4e84-b4a9-59a90a835854","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":"0366398f-3460-4aa3-a3a2-8adb9453857d","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":"16a5baed-dad0-48a2-b1a9-c07f1d67727a","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":"84e37d3d-4c31-471f-8542-8a7ea36fcfbd","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":"c79fc3e9-305f-4522-a4dc-da2ab84407c0","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":"20b419ca-0347-4827-befd-aba41fbc3850","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":"0c036577-b39e-4267-8a87-8150667bc51b","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":"ed972f76-b6d4-4ac7-af44-4515fee58175","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":"480f6c13-2434-4a9a-bad7-b83bfd155018","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":"27efdd5f-6ed6-4502-87e0-7cb0f95c2ac4","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":"6acd796a-6941-45ae-9269-6c94343020f0","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":"c8d4e94f-8efd-4173-9a89-d20a0d304fd2","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":"f160aea4-febd-413f-afc4-b4b48f2667d8","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":"840bcfa7-d17d-4ecd-a3ac-eb74ee2d20b3","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":"7d582201-b1ef-4c11-9f30-25c27ded6d62","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":"e82bace2-217f-44f7-ae5c-a875090adb63","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":"7bbab381-2cc3-4176-ad77-f3d7f16c7427","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":"6539b259-c2ea-49cb-874c-47331191b98e","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":"fb2d5298-ff8d-49b1-9e6d-fa66398e3315","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":"39ce01ce-94f5-4d8c-b25d-df9f730bee86","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":"1025c3de-9b9b-4945-a2e8-334841064561","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":"82f5d881-a0f9-4549-a392-b5c6524e5c6c","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":"c2dafd9e-1fc9-4cd6-946c-4ea6f8504d41","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":"51ce270c-a092-452a-9cd2-9bd67c8ed6d4","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":"dfc43bd7-91d5-4ade-8b69-f5b6e0c61dd3","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":"edace7e1-b010-4994-8140-5d481ec62133","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":"43c55416-8aff-4934-88e6-fc8a480c196f","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":"d3e4aee0-481d-493d-b0a7-bba199791907","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":"b0ea1055-eb56-4733-b3e0-b66fe4a1864f","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":"23c51db8-0b9a-451b-9417-0a5293d121d3","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":"74426831-9d84-4108-8285-3efb3739ddb8","block_type":"box","text":"Suspension Risk.","page_number":143,"box":{"x":117,"y":738,"width":127,"height":12}},{"id":"6089bb42-6a6c-4d62-a4be-cf41a3ae27a8","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":"a1079f5b-5b65-487d-9c54-74b4fc4b82c2","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":"c6d7b0cc-7241-4c5f-93fa-97f82bb667bf","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":"4445423e-4b4a-4c14-817b-e6997624da61","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":"6021d4f4-71fc-482e-8732-d836c7a31f74","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":"acb82f3b-11eb-4a68-be00-b670e8e98b04","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":"073293f3-3d8d-48e6-b2cd-938189d593ab","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":"dba84349-6068-477c-a018-257bf0bbc702","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":"03abd2bd-d04f-48e6-9fc6-008724caba24","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":"ff2319ae-2909-434a-90f4-943dc1d18e9d","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":"7bc92dd4-2056-4d1c-9577-174f33fbd90d","block_type":"box","text":"II-57","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ea6dd93b-0dfe-48a6-948b-fdd265b8fcae","block_type":"box","text":"NM1026U-6049097-143/259","page_number":143,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a0d1ac41-790f-4096-8b59-ef9312a3a0aa","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":"dea55a2e-c032-40a3-a6c9-d21e08baf6d6","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":"b09c7bb1-61f3-492b-9275-132c00a07d6b","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":"b469f1e3-9573-4022-844f-8e3a9d08dfd9","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":"38716b6d-88fc-4594-a4bf-4a26625941ab","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":"38809fa4-ef77-44df-bc3d-1f880b06ba8e","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":"3b4afdea-d4f4-429f-8e1c-9d191850b95c","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":"69041382-aaac-4305-97e3-4349521c4b2b","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":"c4d70ecf-b096-495a-bb0f-3cfff27f5cc5","block_type":"box","text":"A Fund may invest","page_number":144,"box":{"x":691,"y":192,"width":144,"height":12}},{"id":"0ae19510-74c5-4078-a0cb-73f1b318d9ce","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":"c1494b47-4982-4228-8184-5bb86f941885","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":"e8c955ee-9c49-4dd4-b1e7-7ed69b321424","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":"f067f9f0-616c-4f12-8e0d-0b09934a10c4","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":"87eade32-58e2-465a-84e9-9b694851e0b1","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":"b028b6a3-0fe6-4a4d-a21f-682fb14050ba","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":"9a7de512-afa4-4297-b13d-086fe8b9be28","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":"16f31f22-9795-420e-847f-d41afbfd3070","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":"2adf26bc-3c64-49d5-a2e1-263777083b2d","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":"42448efd-2cc2-4513-b9da-01f5b7eb4c12","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":"fe3cdaf6-b7cf-44d2-910d-55316c4fb922","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":"1d876c4f-bf7e-45e1-bbd1-c6d5244bee0c","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":"de802e18-b66f-4097-8d73-17482548e981","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":"7f3d4549-ac44-443e-8a9c-95b56d3b41a6","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":"0c7febac-7433-4b5c-a3e6-a98b8c93201a","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":"c11826e5-3ee7-478d-8175-8db859eb981f","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":"f978ab0d-e6b5-40db-bc42-777f78b78061","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":"1ff91836-0d4f-40cc-982b-1711dc43e1b9","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":"776a7f35-5127-4e95-9dc4-16d3dffb18b1","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":"df0ceb45-6cf0-4585-9d16-978fb827f08d","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":"5b76f4b3-d286-45d0-9fb0-a45ab9c477cf","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":"61f246ed-695e-495f-a23f-75c657474783","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":"bf23f84d-0e25-4295-b1f4-89bf9c9879d9","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":"114240fb-98e8-4ca0-838f-40ba5d8c6161","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":"3c5a47bd-bee5-4843-b6f3-c941047dcbe0","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":"944829e0-ec61-4eb0-a8b7-65d2db34de6d","block_type":"box","text":"i.e.","page_number":144,"box":{"x":749,"y":591,"width":20,"height":9}},{"id":"8399a99f-47dc-4bec-9b63-cecb46fc64f8","block_type":"box","text":", CDCC and","page_number":144,"box":{"x":772,"y":591,"width":94,"height":11}},{"id":"8a2fc146-1199-417d-adb7-d47cbc5163f9","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":"44a784fb-b3cc-488c-9937-410853125457","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":"3507f6a8-e83e-42a8-a3cd-ce66cc7a3aab","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":"38ed1876-908a-4632-b0b9-fae5bc9dc7a3","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":"02c40def-b293-4c3e-b1b2-ae50e6042850","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":"8b6dd346-7b96-4434-aca1-9ef34c04f872","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":"939a61be-4852-4591-b080-8f085ce55806","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":"9efa8567-503b-437f-89bc-0d9ba2c5f40a","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":"c41a19ee-a214-47e0-a886-788a29f5a4da","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":"a5dff2b2-224c-4179-8518-9a0d406692ed","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":"4e105596-cf60-4ab0-832d-b62bc8608407","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":"726acdf1-2e92-407e-87f0-0fbe3fabde29","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":"9a4c5ea0-48cd-421c-8445-8e93b287f0d0","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":"c6f27fb7-0c07-495c-a9a3-92065deb8fd6","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":"2e184a17-24bb-4f65-b3c3-c3766f3ac327","block_type":"box","text":"uncertain.","page_number":144,"box":{"x":117,"y":835,"width":77,"height":10}},{"id":"822a8a14-bf7b-4ffb-a51f-7974d6cc2999","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":"2188524a-c2ac-4239-bc06-ead61fa6936b","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":"ec25e5e0-a270-4646-a5c1-8d45745fd319","block_type":"box","text":"II-58","page_number":144,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"8a5ef810-7df8-4468-b257-854790b54b2f","block_type":"box","text":"NM1026U-6049097-144/259","page_number":144,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7b856789-7ee8-4a7a-bef6-c00c93ec346c","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":"7249b63a-d11e-4272-8c33-e1f75ae8919d","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":"7b487406-1084-44d8-917a-44acdd764ef3","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":"4cdec2c4-f340-4953-982e-5897f2392af5","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":"f4d28754-3a13-41a3-a297-33884f3b9556","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":"6a03244f-9094-4f46-8c38-f4e29f3df2ee","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":"ff7c8357-3715-4d87-b72f-2637550a2709","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":"ed946d7e-9a95-4e4d-b5e6-2697a28ba693","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":"b4f48084-f9b5-46ca-bfd6-7e79c26cd678","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":"be5472b1-109f-4752-8813-cbb4f1490379","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":"1342b318-e25d-4baa-a5a3-4aa04041c86a","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":"4b15c604-39b1-40a4-a535-b0e221662ed3","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":"2218a439-659e-4428-8014-2e1e48b6a3f7","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":"8c62a014-f2a0-4810-8ce6-8838d672aab4","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":"5d1a5a50-305a-41f6-bfeb-18f9ff8c5b26","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":"598f2786-a4df-4e52-8fec-b61aa54f8029","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":"8478b8ae-bf34-43fb-a618-0c1d7a304030","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":"ab988a2b-2f8b-4df2-b2b7-ec00dfee1a57","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":"0c9e7cad-0a25-45c7-8510-8d4248e4c532","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":"07063152-387d-408d-a58e-7ec959affc95","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":"36c0fbce-467e-46b5-8172-1609e9ddcb53","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":"fd695265-2d73-4370-b8e0-83fbbf5194f0","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":"2c7e46a5-d949-4abb-9000-92795f77bde0","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":"12de2321-ad21-4fc7-971c-815f4edea67c","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":"8eacfceb-b345-455c-b09f-32e433f5947c","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":"4d146b1e-091b-4da2-a2c0-3b76ab91d6d9","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":"5bd9952e-a7f3-4192-8831-5894a9adcc35","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":145,"box":{"x":118,"y":540,"width":317,"height":12}},{"id":"003ef44c-fdfe-4d1a-b1bc-435f314a6467","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":"cce4856c-70ff-4bb0-a4fd-6432ae16ce5c","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":"39f582f5-4e05-42db-9972-ba116880843b","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":"8d2a4125-9f24-43fe-b407-4b61e44c1791","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":"d203a59b-4fb0-48e7-b270-cc1452da548a","block_type":"box","text":"interests.","page_number":145,"box":{"x":117,"y":624,"width":72,"height":9}},{"id":"a98bdcc7-2700-49f6-8c4f-6c4c0314d956","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":"603db82f-cd7c-43c9-9f4d-1a26408a42a5","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":"8b8bac1d-e658-4f7f-944b-7b37804d3ac0","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":"55e32891-7e69-4bfb-b632-bea345c9ab7d","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":"27cf99c3-97df-4f1c-bc9e-45eb33c0b862","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":"ba670515-4d66-42de-8ea1-16f6373615ed","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":"8d2c465f-92a7-4751-96cb-1494fef655c7","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":"bbb85968-e1b4-429f-8790-22e5219b4a7b","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":"e3208ff3-0076-49d1-bb05-ec97ee5ee36b","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":"bb09ac91-5315-4739-a00c-f679ea4b3b6d","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":"12399bf9-fd32-42cb-bafe-e563d29bbdc4","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":"473420b9-5086-45eb-acb7-dc6defe53fdd","block_type":"box","text":"authorities with or without notice.","page_number":145,"box":{"x":116,"y":834,"width":249,"height":10}},{"id":"1afcda50-bdb0-4167-987a-b2453ba992ee","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":"668a77bb-5e3f-49ed-af34-90628290ec91","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":"ee5446e9-d5d5-4086-a1c8-3aa98975fcb5","block_type":"box","text":"II-59","page_number":145,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0d40dfa7-6dea-4b74-9d0e-00016cc0eb17","block_type":"box","text":"NM1026U-6049097-145/259","page_number":145,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f01d720f-32fa-499d-892e-c707829fd8ef","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":"875e31f0-be3d-4da7-b616-19b1d17f94c3","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":"54d19ede-97df-4d35-a989-90d21ef81a98","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":"4fe7beaa-20f4-4671-9006-3f395ce84997","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":"8b6fd12f-0784-4a08-af88-cd59888b87fd","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":146,"box":{"x":118,"y":165,"width":225,"height":12}},{"id":"5b2f61d5-35fd-4a1b-97a1-f9aacb64a7b8","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":"998bb0e6-8f61-4ea1-8a7b-82bf358ff094","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":"37332420-b4c7-4090-80cd-e58d9874c05b","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":"28681981-4473-4596-9b05-485104d19e7c","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":"ae83f35a-3a7f-4a42-98b7-8771c714ac63","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":"3d34768a-1a31-462b-b0fc-87f9bb12eea9","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":"8b1ed0a9-923b-45ad-a1de-d6305494c562","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":"7fa047c3-61b7-47c8-8746-0dc4c410f3b1","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":"dca02893-bb26-4a00-a61b-e3bfadfc9b8e","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":"6435df9a-65da-420b-851e-3e77ef3db6ca","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":"96776018-763b-4b14-b836-170e231a48d8","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":"03af2bc1-4d79-409e-aa42-ebfcc31ce541","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":"602e4102-a90c-4d0e-ae2c-26d2b0cf8755","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":"ba99b0c8-26ae-421e-8473-bb821d6025ad","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":"492adc2d-a862-488e-95d2-2aeaf74eebff","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":"3467fb20-8a71-485c-aba3-e7336fc7762e","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":"178d4d33-3868-4b42-acf3-3bd60370f4ea","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":"3c1148b8-7d7a-4b3b-b5eb-7ae67f6becaf","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":"100ceb44-14b4-49e0-a074-4db6595790c0","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":"07bae8ef-73cc-44be-a437-f2b8ded54bb2","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":"727f1e82-9a7b-42ed-85ae-72f1705ef639","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":"9aa74c8f-f94a-49bc-9b55-706752ebb3cb","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":"fa3a031f-8951-4971-b357-67f35e247cd5","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":"c5453a43-7849-4106-ae37-50f00c80105e","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":"1b6da98b-bc6f-43de-b409-1707bf928960","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":"2dbf794b-7819-4784-9598-29e56be23421","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":"fb279fc5-7e17-40b0-b617-b4d8ff96fffa","block_type":"box","text":"Investment in Other Investment Companies.","page_number":146,"box":{"x":116,"y":661,"width":350,"height":12}},{"id":"81466398-c60a-4477-8e25-2adedda2fc05","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":"d77cb1bb-2de0-48a4-a369-e20df5dca25a","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":"f1d28ab2-633f-4259-81b9-5c5cae465879","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":"ddeb034e-541d-49ba-ba06-2262efb04985","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":"86366305-8e46-436a-a568-f3d5b8c2b6e1","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":"e93b58e0-0d08-401c-b490-719df69567aa","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":"a9786e2d-cbdc-480b-a945-6bb1086b2867","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":"2ac213b3-1562-44cc-b32a-703f9270da4c","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":"a7113d22-f7ff-45e7-914f-d166fdce9dac","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":"60b4ea82-586b-4c46-9592-1d0f7644a434","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":"7e9a7db8-8466-46f0-aa69-ace2a0f5fe3b","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":"bac587dc-4274-46b1-8d6c-8ee3c3da3d4c","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":"ab137ed9-ab4c-4da6-81b1-1af4f017d886","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":"8ad24ff3-36b2-40d0-9a85-f7040ba69b1f","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":"a31c0383-bfb0-47dc-9360-8bc78c87af69","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":"66c12e24-b486-4af2-8dec-5dfecd0026d1","block_type":"box","text":"II-60","page_number":146,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"64a72878-8cc5-4883-9ba6-e2aeb20f0415","block_type":"box","text":"NM1026U-6049097-146/259","page_number":146,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9c3397c6-ab0a-4b3f-9d90-47faa9524880","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":"25360a1d-023c-497b-ba7a-8a3fe95d16fd","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":"ec26f57d-2995-4e4a-9c60-502e10a6a53d","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":"e9add6cb-8468-4f74-828c-670aa752bf1a","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":"a6e890a0-5c17-4a7e-94f5-22fbfcf23576","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":"56718d69-b9ce-4000-9ef5-c13f0b06a66a","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":"828c7aac-1828-4980-a450-72dfd54bde18","block_type":"box","text":"selection risk.","page_number":147,"box":{"x":116,"y":196,"width":106,"height":9}},{"id":"d82217fe-8e4f-477a-bac2-6f12553f08a6","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":"8622bdc7-54cd-4631-aa3b-09402b0c22ec","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":"5a74edbb-7d95-41ab-ae8c-554b083f435a","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":"93aa70b5-7991-4d48-8ce8-f7ce519fd3db","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":"18aec1fa-a97a-405c-8bdf-1e12d62812d4","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":"024a7f48-3a39-4d28-ae22-d3d48e446358","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":"e1370b81-f978-4a54-8e3c-65719283923a","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":"6dec0d65-92a2-40c6-9f71-855a29bf5199","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":"02dbfa0a-26ee-413d-a786-05ec5b27531f","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":"55230fa6-33fe-4288-8e57-dd3cdb9646ca","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":"33f3125f-af2c-458f-a4be-bc49047de41e","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":"007844de-9012-4032-bd02-f883f9c79ac2","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":"304e7acc-0c96-4772-ae14-41d1c612beb5","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":"fd1bc888-dcc1-41e5-9f22-746021534954","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":"94743cec-d76a-435d-9d64-623d06a630dc","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":"a74fc07f-79f0-423d-9079-47fb7d3c3bb0","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":"27c32658-c4c0-4b27-8168-4e9c714bcc8f","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":"e7f5ade3-ac6e-402b-8fa8-ee302d08dc94","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":"b5d6a550-9de3-4c51-b882-a086ba118c60","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":"886672bc-5a79-4ff0-be7b-48b05628f461","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":"eaf90535-9286-4372-ab0d-ac0a4259e38c","block_type":"box","text":"und, the ability of the Fund it","page_number":147,"box":{"x":497,"y":552,"width":205,"height":12}},{"id":"8e16bd07-b29e-423f-8429-6a2017595a31","block_type":"box","text":"self to purchase other","page_number":147,"box":{"x":702,"y":552,"width":163,"height":12}},{"id":"5f74b871-9685-4289-84f9-e7e63c6dfc21","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":"e68cdf9f-330f-4667-bf68-5b5999666c11","block_type":"box","text":"e.g.","page_number":147,"box":{"x":480,"y":570,"width":25,"height":10}},{"id":"23d0c94f-efb8-49b3-b6f1-1c239e5b2094","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":"3c900a79-358c-4df0-bec0-60ecd7f9533f","block_type":"box","text":"investment objective by investing significantly in","page_number":147,"box":{"x":117,"y":583,"width":350,"height":12}},{"id":"74ea2c2f-847a-45b0-b39d-9778b7af08cd","block_type":"box","text":"other investment companies)","page_number":147,"box":{"x":468,"y":583,"width":215,"height":12}},{"id":"162b2821-5deb-43f6-88bd-51c39d7ac61a","block_type":"box","text":"may be limited in its ability","page_number":147,"box":{"x":684,"y":583,"width":195,"height":12}},{"id":"4123b791-778c-40af-bd9c-3c834c7ce24d","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":"f005d24f-bcf1-4fec-a8e6-d6f86aa57f49","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":147,"box":{"x":470,"y":599,"width":364,"height":12}},{"id":"04426acc-8c26-4381-9b48-6cc59f7f202d","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":"0345c6ba-1085-4a54-81a9-b7cda2ee1b8c","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":"547cd315-770c-4a40-bf97-f1c275cccd82","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":"c7a19316-729f-4f10-a79b-2ea9a899d74b","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":"754223bf-2754-4308-a99f-a58ec6d511a3","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":"5cc50589-f36c-42af-9235-70d99bbdafcc","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":"d47f20c0-e2a4-43a6-a3b6-72cc7ac267e4","block_type":"box","text":"Issuer Insolvency Risk.","page_number":147,"box":{"x":116,"y":738,"width":185,"height":12}},{"id":"5ff13f41-6e81-4c84-9ff7-0f2e50aa6ce0","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":"b87ccfc9-ac2d-46df-9c11-53c1c166d7e8","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":"47f98be2-931f-4d9a-a6eb-a9c9794f68b4","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":"9b5d70e6-8d46-4d0e-a66e-cfae0e82d166","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":"bd43759c-1743-4613-a948-ffd5e488b603","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":"f697a333-7e17-4c08-92fa-3bc1276cfd55","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":"ff3a4a44-3832-412d-a27c-d5f7ea8ade97","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":"b2999fb0-fd38-411c-8c71-062ee012fda4","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":"c74e64c9-fc3e-4e0d-b3e6-1c6d2eef920b","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":"c0849fe8-08f9-427c-8063-654bacf7e6eb","block_type":"box","text":"II-61","page_number":147,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"1b450e0f-59a7-413e-919a-839128880823","block_type":"box","text":"NM1026U-6049097-147/259","page_number":147,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2fcdd619-8312-4e2b-a0a5-e3eea446acd5","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":"b451fe0f-1c33-4db1-99ac-f9b46c5c0af6","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":"6041c2bb-998b-4515-9192-51240b600fec","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":"d2dfc6a1-557a-4dec-b590-252c25e925c6","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":"58ebfbd0-bd7b-4762-b026-e8737df7bace","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":"c79533ab-67a6-47af-a3fc-f70d92d38235","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":"e3855ee9-dc10-4a9a-8a0b-918fb31f761f","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":"1214e100-f90c-4c05-a435-457281613bcc","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":"1b3f9f2b-3656-4fb0-9ec7-7277638e5559","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":"125be659-34a5-4082-8061-3bea4419fbba","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":"1dc06f6e-e639-4aa6-af3e-1663be70f2f3","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":"d009e5f0-8c1f-42d6-9801-83e2f4a6cc9a","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":"06524791-2053-4563-9c4d-e146e16dae19","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":"a1f27ab8-2024-4222-ad1b-ce251268043a","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":"bad2f366-629c-4131-b724-7f50e0209eb2","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":"53aec54a-c17a-413f-95ec-9509cb57e2cc","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":"2f7e0e92-3bac-492b-83de-1279b5223003","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":"c68b74ec-abbf-42c2-9cf7-7085932198e6","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":"061f5a04-fc53-4c44-9e45-6d1b19bf0992","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":"4331a15c-866a-4b68-9672-1d64d0e4e67c","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":"e0205246-b1ff-490f-b08e-2a9a30714fc9","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":"0efea453-73c0-472a-bca4-3b65d3dfbd4b","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":"b7234645-a6e1-4163-a0bc-007151616de0","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":"e610bba3-e989-48ef-b593-aa8ef7ddfbe6","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":"9b2d6108-59a1-4fcd-aa46-ed96b39a3926","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":"b1f4e969-2eff-425f-8d09-663c18b889bc","block_type":"box","text":"Company Act.","page_number":148,"box":{"x":117,"y":506,"width":108,"height":12}},{"id":"81a701b4-41cb-4859-a006-0bb495d33f2f","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":"7fd1e770-14bc-4e82-b6a9-6a036ec27b24","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":"379dc217-ec4c-4394-bd9a-a963758256ee","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":"b882ded1-c057-4122-a375-1685586e2408","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":"85f9c1aa-48cb-4654-aeba-5edb575268d9","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":"5b91a444-da9f-4dce-a6e8-79c05d8e88a6","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":"2d15739b-0ec7-41b6-a7f6-f82f92d9eae6","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":"39d5b0cb-71ea-4784-8e36-6e1c85e14a25","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":"8402fdf8-23e2-41c2-99cb-a6654b31e709","block_type":"box","text":"assumed generally by an investor.","page_number":148,"box":{"x":116,"y":661,"width":254,"height":12}},{"id":"a949058b-735c-49b1-a4d2-a15ca6a88526","block_type":"box","text":"Lease Obligations.","page_number":148,"box":{"x":116,"y":692,"width":148,"height":12}},{"id":"d1ab7292-1ccc-4d9b-a88f-3a52fb2234dd","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":"ddfae5fe-dfa3-4ae9-a62b-a938af42355f","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":"c3d5865f-2534-4693-917b-ae8c7074beff","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":"5ed101b8-0953-49d3-89a9-aaf4f610be86","block_type":"box","text":"obligations.","page_number":148,"box":{"x":116,"y":738,"width":83,"height":12}},{"id":"d3eb196c-94f4-426a-adc2-43a3ec4d9f2b","block_type":"box","text":"Life Settlement Investments.","page_number":148,"box":{"x":116,"y":769,"width":227,"height":10}},{"id":"107cc0a8-6f4e-4d7c-a53a-78d17a32fe83","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":"c2450448-c0d0-4726-b2c0-67af827832a5","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":"6abf33d0-de71-4b3b-96b2-e49deae9bb9b","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":"6a8a617a-0782-4757-a53f-f3f2ba76c06d","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":"2eb455f9-ff21-4691-932d-dbd7d7004338","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":"caf4c405-f64a-46d9-8629-4d3d1c397e37","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":"20e7ca74-e8e9-43ff-8b20-e432cbeb90eb","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":"a545006e-d1f0-4567-857e-24343f51d5ab","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":"4f1c0893-ad32-4ec9-b785-00e208e0a702","block_type":"box","text":"II-62","page_number":148,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"df3bd25d-b87b-4897-b7cc-c51aaa43fbcf","block_type":"box","text":"NM1026U-6049097-148/259","page_number":148,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e203722a-ae2d-4e5f-a8c9-baf978a6ac1a","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":"22eaf2e8-8db2-4989-9be9-7a0ccf650430","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":"17114a9f-846e-475b-859e-3fff2a91c7f4","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":"636675c5-0ead-43a6-b4dd-d57070407508","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":"646b4e3b-826c-487b-9c1e-b13c2aa180db","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":"6e24c60b-e0df-4502-b7ae-cb26f58ade9b","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":"2f012fb7-e462-4146-858b-fc47b6f67ee1","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":"00508093-45fd-405d-ada4-a437f23cfb31","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":"d7f5234b-14c6-4046-8fbf-3ad8740c102c","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":"48e2196e-5672-4f96-9f0e-9cbb6d28b483","block_type":"box","text":"Liquidity Risk Management.","page_number":149,"box":{"x":116,"y":242,"width":221,"height":12}},{"id":"cf00a805-0694-4be5-a696-d89c31c1014b","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":"ddd97637-ba31-4012-8980-563c065bc781","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":"af802673-7f46-40b3-9251-1c5e41070534","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":"e31ada20-95ce-453f-8de7-48c95af94e1b","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":"e61e8334-c63e-479b-ab47-7b088092ccfc","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":"63b99eaf-34c2-49d5-861e-cae9d3e7ebd1","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":"b89dbad5-8cf5-44f5-8ee5-3dd2e4b8d34f","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":"a43aa90b-7ad9-46d8-aa9e-12f0d27e7e9d","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":"f0d7d173-fb01-442a-8cb6-902a0ba6ef4a","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":"9bf8e7c1-5b95-4676-b8c0-a16cdd8a70f0","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":"bf0552cf-5fa9-42cb-bf19-4abdb451919f","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":"146b01bd-56cb-4018-8318-70c660dbca89","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":"34e22c65-a75e-4a24-ba27-15f7b1ca81c6","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":"17b2d029-6249-499a-a4f8-e663e3f18b5c","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":"c9c257dd-710b-419f-9efa-e87f7d1565d4","block_type":"box","text":"Master Limited Partnerships.","page_number":149,"box":{"x":116,"y":475,"width":225,"height":12}},{"id":"a8045a5f-651b-4cac-a834-2331b08231f5","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":"bb770edc-1441-4a24-809b-b566c15e62c1","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":"851181ca-0fd2-4970-ae9f-9e04e4617148","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":"0fc06f64-eecd-40a9-9569-5ad75f063bbe","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":"8caf896a-a862-4f8d-bf47-c9ef69c286fb","block_type":"box","text":"mining or production, processing, refining, transporta","page_number":149,"box":{"x":117,"y":521,"width":382,"height":12}},{"id":"1ec374b0-378f-431a-b8d4-662f8a237b8d","block_type":"box","text":"tion (including pipelines transporting gas, oil, or","page_number":149,"box":{"x":500,"y":521,"width":346,"height":12}},{"id":"5331af04-de5e-460f-8d7e-df8c1a6d7cd5","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":"c266e5bc-cf91-4938-b3d2-7589f773dc44","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":"e24e1c9d-7e63-4e12-a7c2-c22c5fc73b87","block_type":"box","text":"of owners, the general partner","page_number":149,"box":{"x":116,"y":552,"width":224,"height":12}},{"id":"0b70a658-e073-49fd-9771-9691056eec7c","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":"9e594fd8-e5f5-4a3c-bcb1-0c60bf71e4d6","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":"a2917afd-4416-4c86-b191-b4288f468581","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":"9a2c6adb-5cf6-4eb4-bbb2-fdff9b28a847","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":"b4eb3dec-3164-4c62-9bf7-0f5fdbbf2d36","block_type":"box","text":"ent fund, the direct managem","page_number":149,"box":{"x":525,"y":583,"width":213,"height":12}},{"id":"82b68bb3-009b-4d3d-988f-e18c203d012f","block_type":"box","text":"ent of the MLP or is","page_number":149,"box":{"x":739,"y":583,"width":147,"height":10}},{"id":"61dc7f50-eed4-4bc3-8292-dcada6cc4c51","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":"d5896007-3c94-4e87-ac94-b27b7b899be5","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":"59d78b42-2a5d-4e31-97d9-10c17faaf035","block_type":"box","text":"publicly traded corporation or other","page_number":149,"box":{"x":117,"y":614,"width":253,"height":12}},{"id":"3a9dfbc9-bd6d-495c-a890-fc6803e55ce3","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":"7085afd6-bdb6-4be9-8cb9-ca3adaa4609f","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":"d1adddd9-30fc-46ca-b2c3-bd22e3cb8be5","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":"f82fc66e-fb95-4812-895a-0304f49f0a3d","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":"846c40ee-7d3f-4a36-b7eb-43d8181db76f","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":"6c5acdf9-e67f-4008-8e8d-99a9826a4f6c","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":"aef5b602-816a-46a4-bd31-00c5bd48a0c7","block_type":"box","text":"in the partnership’s operations and management.","page_number":149,"box":{"x":497,"y":661,"width":355,"height":12}},{"id":"4cc85cd4-6a34-4303-a052-d64d8e9cce32","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":"661ddf3e-bd1a-44fe-ac4a-633fe94d6d7a","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":"7ba73e38-9bdb-4af9-a219-b5acb8c58928","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":"02c7c57e-23b2-487b-b5f7-4e5436b5ea48","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":"dace60e2-2e40-4f31-ba4f-d077a091b54f","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":"6f071da8-0abc-499f-8f4d-62c757a7b942","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":"63e42b2e-9d53-4700-953e-fe304c9133ae","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":"c21c52fb-f457-46ef-b631-777d9cc64fdb","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":"fbebcdf8-143e-487c-b5fe-af5dd54c4549","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":"19efc28b-afa8-440a-a9d6-8bc2a0fd6396","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":"0000d7cb-bde6-4953-8b28-91595086d3d8","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":"ec34f3fb-c00b-49d7-96d4-25b8fcd08c89","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":"da9fe9e9-0da8-4e90-addf-7710b5da43b4","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":"11de8e81-4023-420e-9eb5-e5a2ae6b65cb","block_type":"box","text":"II-63","page_number":149,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5f16fe68-5e00-4dea-ab9a-4643e2617aab","block_type":"box","text":"NM1026U-6049097-149/259","page_number":149,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2b427251-6cb6-4d64-bbf8-a29abb139ff1","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":"02782bee-0159-417d-8606-ee1b1a13e6ca","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":"c79e115c-807c-42ec-a41b-8606915ce0fc","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":"601bbeac-780f-4383-9ee5-3d7dbe19e2ee","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":"3ddec082-ccc0-4451-8196-bc19120419e9","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":"09212a88-55dd-4fec-a953-1d53038a4414","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":"c8a4cb13-a594-4381-b198-8e45270f82a1","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":"c69858a0-99a0-4f12-885a-a71622f05d4e","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":"b957eb17-a622-4eaa-b3ba-6efcda4034ff","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":"e4a1265a-71a4-4743-9b76-b8c671a5608e","block_type":"box","text":"assets of the MLP.","page_number":150,"box":{"x":116,"y":241,"width":144,"height":9}},{"id":"8866d521-c756-4c00-9f27-24e55c739eeb","block_type":"box","text":"Merger Transaction Risk.","page_number":150,"box":{"x":116,"y":271,"width":200,"height":12}},{"id":"7cf188ea-d91e-43ca-a2a4-b1c8a913f37c","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":"72c58d33-18d0-40e1-bb1d-abfdb13040db","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":"061dd215-1382-4093-ab6d-766ab632ca10","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":"3d5e7d0d-9005-428f-a6c0-f885e96b7ccc","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":"482f4f56-866d-4665-83f6-6d74892ec5e0","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":"987c81e7-0492-4c58-a1fe-07c0a5e7a1af","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":"7b853dde-f52f-4fe7-9cae-b1a2ac4b6ee7","block_type":"box","text":"significant value.","page_number":150,"box":{"x":116,"y":364,"width":129,"height":12}},{"id":"d8f8304d-3444-4cbc-8b23-31d3f537de0c","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":"be965bcc-a48e-40e5-81e2-f98a92ce1c2d","block_type":"box","text":"Banks.","page_number":150,"box":{"x":116,"y":409,"width":54,"height":10}},{"id":"1be0ece4-581b-4bdd-adc3-6b68dc8a365c","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":"01cd5fd2-5b7e-4218-9eea-65fdf912b6af","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":"9d035a8f-37c3-4892-a823-76978eeca5fe","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":"9e57a6e5-301f-4377-937e-628105c34ee2","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":"fa2762ef-1448-4c07-a12a-acc5a2868b3b","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":"5fc0df84-ff27-49ca-9ca3-d861f706eb18","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":"928de2e5-0007-4999-b3e5-21629ade98a0","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":"12cb0386-81b1-4a21-9489-4fc1a298154d","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":"e2b6c1e5-2c6b-47a7-93c7-86facf6d5656","block_type":"box","text":"domestic banks.","page_number":150,"box":{"x":116,"y":533,"width":126,"height":10}},{"id":"b02c01ca-daea-4e59-9cdc-15e994c61840","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":"e93cea6f-0c6f-421d-9b5e-9992d104845b","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":"8121aad5-b296-4e27-b0a8-63294b40c929","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":"9e56f85c-06a9-4b81-af9d-f8af3042af90","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":"f8b244b3-54be-4f5c-bfbc-87937424cfe3","block_type":"box","text":"Money Market Securities.","page_number":150,"box":{"x":116,"y":640,"width":201,"height":12}},{"id":"19d84083-7390-4ff3-8685-a6632a688c9e","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":"1a1e0920-9e9c-4b75-8d08-7d2d750752a1","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":"db80b164-8c12-46ee-b78d-5d025adb565c","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":"b8f4a85e-cf94-4c2d-a004-faefc68b41a7","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":"ccde2b83-6f37-4449-80aa-0a93f4cacc34","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":"a14919ab-6038-4379-87e8-c8399b109301","block_type":"box","text":"branches of such banks);","page_number":150,"box":{"x":184,"y":732,"width":186,"height":12}},{"id":"dd35d131-853e-4a5c-a5e6-37045502be54","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":"7f232d88-bc37-4ee3-a8a6-9d583834ee66","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":"487c242e-d2b5-43b5-a1b4-ef7da6d10122","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":"3f2a2ce0-0bb6-47e1-9987-e2acd1a4ad18","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":"ab5206cf-d0d7-467e-b0a8-b7d40b4840d6","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":"b7c32141-a0f1-4e42-86ee-89718e5a20c5","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":"ae266b23-ebb3-4037-8830-e75f2e087568","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":"faef3ccd-4445-43d1-8b55-7e6d1510b2eb","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":150,"box":{"x":184,"y":877,"width":374,"height":12}},{"id":"0df7ece5-856e-4b18-9dc5-4b20618c4142","block_type":"box","text":"II-64","page_number":150,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"70bd7246-a403-4260-9e55-eb7b5c2831b6","block_type":"box","text":"NM1026U-6049097-150/259","page_number":150,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"17b73e8d-10c8-4f8e-b0ac-c69da616ad05","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":"bfeefae8-a454-4817-8c72-d487b1c1592e","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":151,"box":{"x":184,"y":103,"width":401,"height":12}},{"id":"d33ae2ce-245f-46bd-8db8-e5c02574a65f","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":"c0136813-3ce6-41b4-8984-15bbff36f07c","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":151,"box":{"x":184,"y":141,"width":279,"height":12}},{"id":"89eee00d-a622-4d7e-b325-dad26938db20","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":"4d0bb781-9e0d-4d4b-8cdb-c82095f1ba86","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":"ff127442-7f35-4a77-b9e8-17a40ed97d15","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":"5fdb7b55-81dd-462e-9f9e-02048ec2a2a6","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":"307d49d5-db11-4354-be37-23979ef0b486","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":"a33b5b8f-1886-448d-8c70-877218a5007f","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":"19709278-225a-40cf-ad0a-8fbac94a8b0c","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":"0eb618ec-8aa2-4b2a-a604-bfae0d5965cd","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":"1bb02db7-c984-4857-b416-6c7025ce7537","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":"71f04d32-1bc8-4786-b1e5-a25224fb623f","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":"3bf11356-ba99-4785-9dc7-d201c78847f4","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":"17989c86-2678-4cf0-b621-ab1de4378dec","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":"b2f9cabd-0d78-41ac-a40d-fe76087c75d7","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":"93522582-ebb0-46fb-a489-d729c9f15666","block_type":"box","text":"Board; and","page_number":151,"box":{"x":184,"y":420,"width":86,"height":12}},{"id":"64c4617f-286c-4d4f-ab6f-05108c537b61","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":"154b7535-4971-4f11-a9ee-7591889e23cd","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":"9d3e77ea-7815-445c-a0f3-e77be3cdd17e","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":"6f10d74a-1c02-4aac-8d80-f571919ee7a9","block_type":"box","text":"Mortgage-Related Securities.","page_number":151,"box":{"x":116,"y":506,"width":236,"height":12}},{"id":"e10fabfe-8b10-453a-985b-4d612e8ba1aa","block_type":"box","text":"Mortgage-Backed Securities.","page_number":151,"box":{"x":116,"y":529,"width":214,"height":12}},{"id":"d143d5b6-f62d-48ba-b43c-90ffba95ebe8","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":"a038939b-9bf1-4b40-a847-556757cbf57f","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":"6bf6648a-de27-4c52-b5b7-9c9bef2a3011","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":"6a5ed98e-4493-4d10-a5e6-604ea656b80d","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":"9fda7662-011a-4cb2-8d62-3f2666a2dc1c","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":"74fc496b-b2cb-44b2-a7c5-2bb75dbd37e5","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":"9584013e-53fd-4970-8d4a-7b4148711d13","block_type":"box","text":"dates.","page_number":151,"box":{"x":116,"y":622,"width":50,"height":9}},{"id":"2ae1278e-39d9-4759-a6cc-88e8c63a2a55","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":"28a2483a-019b-4b85-a93b-48e894e0c987","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":"2659a7af-64a2-428a-9ea9-d7febebd7d4c","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":"f80cbf92-eea0-4fd3-afbc-a899f2ec7d8c","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":"2ad12042-f53b-4c60-b466-fdf5a217dac4","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":"5ef2d0bc-bc89-47f9-97e7-7488f77116ba","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":"14b2abc0-0b19-4de0-91bf-cb2f9b9a8dc0","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":"0a90c52e-386f-4217-8dd5-df2516768552","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":"d6174a4b-11d0-40b4-829e-8ecc7ee7f8d8","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":"877fd711-5e75-48f4-be05-529edc2a2f61","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":"a9fdbf1b-7f39-4cf2-a8f6-f45ab0ad942f","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":"75c45c72-eed5-410e-aec9-31c7e618a918","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":"d4ac9bc2-a905-41ea-a18b-8efd8683426f","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":"9e3c3c33-ffe7-4410-8b12-e8f9ec245587","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":"e78a4abd-e1fe-4756-89b1-7d103ff5ee70","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":"b27043f6-2328-4487-bbe4-36630aa59c7a","block_type":"box","text":"II-65","page_number":151,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0a1e48e7-31eb-43dc-9447-960b8aa43bcb","block_type":"box","text":"NM1026U-6049097-151/259","page_number":151,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6e7c1e67-87fe-4124-a771-5abfc78faf16","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":"d31874e8-d125-4809-ae4e-c238b8f7ef5a","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":"db005487-2dee-4eec-bcba-47c8a190bf7b","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":"203bf007-57e5-479f-a1fb-5ffbed2b358a","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":"d90b926d-ae1e-48e5-b3cc-104b379c96b2","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":"6b687724-e296-4e95-b012-5dfe16bb18e5","block_type":"box","text":"on the security that was prepaid.","page_number":152,"box":{"x":116,"y":165,"width":247,"height":12}},{"id":"5e6ff37e-d25d-46e0-9d69-67a986e7173c","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":"74dee5d2-5dc5-4166-a178-6b483ced4b4c","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":"73465723-918d-4eea-9a25-d8cedc295b98","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":"c5da8723-6ea2-48f2-ac7f-fb391b3a139c","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":"e9934632-cbca-4e14-bf0a-09e43ef2f852","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":"1baac923-ce8d-490c-b798-d0ac6e7a38d5","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":"5a08beaf-3702-4c00-8a61-1a8826ee20d9","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":"7523dac0-3f48-43d1-a941-02054dbff737","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":"f3d4f378-3f8d-4bcf-9900-a2d818d79e87","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":"6e2b1f78-e63a-4d2a-8fc1-7ad2687f2b92","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":"7ff8b721-af7e-4d47-a38e-16a220a5d8ef","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":"fc5f79a5-1c71-40c7-ad18-4278d769cdbf","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":"475ba1de-b1ad-4271-a25b-42ef2d08bfca","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":"06f68eae-a55f-4f05-a59f-7d6c0dae1f7d","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":"2248660b-7f1d-4c1b-bcef-999ce70d0c18","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":"244deee7-f9b1-4cc5-bc22-8ec39cea9207","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":"016a7c51-82c6-4dc3-9eb4-ec586a5ad935","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":"24652fdc-f046-46ba-b1ac-359cbb8f7b07","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":"022752d3-02b1-4753-adda-940d69ecd497","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":"9716b962-4e8e-47ea-921b-942875b6ef1a","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":"156f146d-2418-46eb-bac9-60bb90e29d0f","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":"c38549a8-5a7f-4d0b-a774-63ce0f0ae837","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":"b2f79dc7-4287-465a-ba99-ce526eae8654","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":"9f00e8b2-84cb-4c49-b48a-6a4e0b3b7056","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":"572bb9b6-3b2a-4c84-a732-76fb63b12328","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":"15bccd12-be18-4242-80f9-2679474aba7a","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":"5bc78b21-6756-40a0-a5d0-2419e6abcc8c","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":"cc7b181c-a6ab-467d-bd6e-a0b3f16f9b71","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":"52e6b39d-dadb-4d47-8578-dce7bad36dfc","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":"693f55dc-6a5e-4ff6-8ffd-c53312172a0f","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":"8bb29bf2-e866-4644-af3a-eb3dcc31d1e8","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":"0016a283-c2cf-4dd1-88c2-3326b5435bfd","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":"dba2cf51-d3c6-4400-a716-ad000390abde","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":"9c382339-f78e-4ae2-a438-1608ca0d1f39","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":"632b0307-943d-4c32-855f-9facca5a358a","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":"1f0ed978-79fa-43c0-90fc-7bfc6500dffa","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":"2edae63c-7a28-4a14-b5f3-0048c4a9faa8","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":"6951d7e6-4339-465d-bef1-3e6733257303","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":"e8059ca3-aa64-4e94-bbe9-6e91d72c35b4","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":"8d987dc1-f036-4fb6-b91f-7f166ea206c7","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":"a3b03058-dad7-4038-942d-48a23416c914","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":"3b390e98-8ee6-476b-bc40-9b09607f2bea","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":"4da45496-47d5-4814-aec0-eb0f3c708e28","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":"fba5263f-3683-4f1f-8e6e-34769483a92b","block_type":"box","text":"II-66","page_number":152,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"18cc2bbf-5f5b-40ae-ba77-645516b01696","block_type":"box","text":"NM1026U-6049097-152/259","page_number":152,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9a1d09c2-5c85-4c87-a396-f0fcc478a1b0","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":"88d1a642-ccbd-4a2c-83d5-550797ebc9e5","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":"4c425611-1ddd-4451-9bfd-22560a09c273","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":"c814e75c-9f34-4eba-9fd7-569d284cd8ac","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":"557ddd19-359c-4271-b32c-19ed83d7facb","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":"1528bcb3-bbc6-46cb-9e48-fcb3981af3a5","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":153,"box":{"x":117,"y":180,"width":284,"height":12}},{"id":"3a8de4bd-c7ce-42fd-b997-4dc5ed50e838","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":"f732ab32-2971-4b0e-840c-91d821599001","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":"0a703b67-8ae6-4fef-adde-16a16d313aac","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":"6c1925b1-fb4c-46c5-bdec-5c3980ce8d4a","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":"1efb470a-dcd0-448e-ade6-bd8501d563af","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":"5eef06c7-1624-4ffc-9f81-92b4be2c745b","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":"6b282da6-6c99-4a9f-a32a-8ec060d83470","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":"98c5b338-99af-458d-bd8b-217d5756af93","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":"1318e32a-cace-4b4d-9922-1a1426fc93e4","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":"981e2bab-86a2-4e2f-be84-ab91a1a64e11","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":"312a5b5f-ca9a-41bf-b15f-fa122667c5ae","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":"80f614c9-725e-49f2-b0fb-6c7f311224b6","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":"383a498e-f13a-4813-b71f-ebcad94cbea1","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":"cd3751bd-34a5-4b7b-b65f-fe51b56b4ad0","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":"241d23d5-3444-4dda-8bc9-0a51717d06a0","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":"b422dcea-d6f7-4dc1-a551-5aca5b3e0d25","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":"ebbdfc6a-770b-4826-b4cf-143f2b15d2ec","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":"7ba04484-56fa-4825-b8d1-85a149852c2b","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":"c16c26fa-8ef0-480e-b02f-86fbd0abca1a","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":"210c3577-20e6-4bc0-9772-9ae97130a356","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":"614f9416-7381-4943-bfb1-e310c1108936","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":"5c5d52a6-e207-49d0-8ab0-3045468417c1","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":"4b25e704-fca3-4345-afbf-06195ebde6ed","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":"93f5f0ed-4cbb-46ea-a823-9b833ea054b6","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":"95d6a4a5-92de-4c36-b70a-dc9be2b826e7","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":"3d13348e-cd4f-4fc5-9fb0-9bcf3882baa3","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":"893f5eb0-19f3-43f9-a4cd-318b8f4a8f9f","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":"04e45152-bac4-4ed5-8268-eb22309cdce0","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":153,"box":{"x":117,"y":645,"width":416,"height":12}},{"id":"775672ce-6985-4abd-b2bf-997f6a793d96","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":"b5de64ca-21f8-49c0-9bb8-801a648914ce","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":"12daa15d-24c1-46ec-bd8d-228bc14283e1","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":"ca24c654-668a-43e3-95a6-16a9c51bc886","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":"f16b79c0-ce96-4c93-8995-ddaba62da01d","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":"c5f54591-be93-4a8b-8d56-dd5791059351","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":"c58cfac2-65cb-40cb-bd07-9c2b71a738fb","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":"a196b7cd-ca6a-4ab7-83dd-648ee649e82f","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":"9797df91-2c7b-48cf-85c7-ae3760a3bd7f","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":"bf8ed357-4352-49a4-98ec-aa314a86bc12","block_type":"box","text":"value of the underlying mortgage loans.","page_number":153,"box":{"x":116,"y":831,"width":299,"height":12}},{"id":"f8f705f3-2008-4d71-9f0c-82c6104f8240","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":153,"box":{"x":117,"y":862,"width":343,"height":12}},{"id":"3b938cb2-6bb8-4e60-b93a-f9195fbc2705","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":153,"box":{"x":462,"y":862,"width":415,"height":12}},{"id":"90ae8e65-2496-4882-b747-0af76b952378","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":"aaaf00c4-5ed9-4ad5-be81-703043602a8e","block_type":"box","text":"II-67","page_number":153,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"15218e80-c87c-4d40-8e0d-150ab37d1063","block_type":"box","text":"NM1026U-6049097-153/259","page_number":153,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"90046cd5-0847-4609-a8ec-ad120732439f","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":"3cffc291-e4b0-4a23-9ce5-aa9f001f4a59","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":"91375320-223d-43ac-b2d2-80914dd3637e","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":"91f722ad-9d46-46db-be21-f8c73ced0e11","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":"812664de-c74b-4c46-949b-18435bddbdad","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":"c52abb83-d471-46a7-b9eb-8ad19376ec6c","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":"455d0ba5-cf60-4e1e-95ed-35c40519cc55","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":"6740b82a-d65e-45ef-bf50-8c95181675b6","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":"86935025-64ec-4c11-807d-25d0a77264a1","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":"1369744a-3462-4033-b505-e10e79d3c898","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":"1c1b4498-61e3-4cf0-bf78-d3cbdd3396cb","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":"ba419964-e306-42bd-bf60-c4ae0b2088fb","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":"cfcb3b6a-e6a3-4238-9832-bb334a99f10f","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":"cbfa1966-0ad4-4406-af4c-affc9977b1e2","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":"1938c40b-ed9f-4b14-830b-7a8cb34adfee","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":"645ad048-7f58-49f9-a460-28e206ee8b6b","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":"4478ff44-e7e9-4774-bb28-e745a40a7e63","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":"8de5a190-0a91-4284-80ed-6872c7c63a64","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":"bb15a5e1-3e73-4167-bd50-004d57a0853e","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":"56bb8be4-2480-4a54-915e-e7f7a7a695d7","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":"9701bea4-fa2e-4998-b3a5-89ad8acbe41c","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":"05dd61e0-6d47-49d9-a905-a55f5cea02c3","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":"3bbad704-a739-40a4-9105-3fb0eb596cb3","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":"440f9349-0f86-4164-81f2-4789ed0bbbec","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":"611b04e6-78f2-4ecb-a6c5-37508483b815","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":"b4ebdd16-d6c2-4a49-8838-ab7d76cd8152","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":"3b78628f-603d-420b-bba5-411c1f932625","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":"e11b4eda-6d2d-429a-aa37-9ae6d6894f10","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":"96be90a4-2dcc-4023-ac25-b10d1e4facc7","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":"e0705f3b-988e-4244-b7e6-a174c1a3ade4","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":"7d6c64d3-6229-4477-9814-7395715fd1f8","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":"bce4ee19-97eb-4711-b608-561b1bfd1ede","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":"c65504b0-7775-4cc4-8710-24805a823168","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":"00008652-cdd6-4e93-8b79-0e8164e17a10","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":"19398f88-2162-4c4c-baa3-2b5b0e5229d6","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":"71ae390d-3b87-428e-b8ba-8f9db0ebc804","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":"a3efd9b9-2421-4194-ad69-bd95ffdd4d7f","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":"5c23b533-0aa4-492d-968b-c06d05e30fc0","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":"39d2a789-9cc4-4251-a793-c1da00edea53","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":"a15b8b4d-b8dd-4c65-a4fa-302ab23e6949","block_type":"box","text":"ten-year Treasury yields.","page_number":154,"box":{"x":116,"y":738,"width":184,"height":12}},{"id":"f6dc14ca-454d-4c5b-9085-ebec472a2f47","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":"b4749e1a-6ed5-4832-bb9a-5848ecd2ca45","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":"9c658e7d-f26f-48a8-bf1b-0fab42dc1f79","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":"fb1b4cee-9b6f-4d9b-9d8a-5dd386817990","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":"ecdbc96c-db13-4feb-a90f-8b5ba70dc0e2","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":"4c2d7a72-a6e6-489e-8038-a15f92791803","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":"5bcf91f7-e236-49e9-aa2e-1910b118b9a0","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":"746b6ace-efd1-4af8-9d11-20dc5fe06e20","block_type":"box","text":"II-68","page_number":154,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"37bdb23f-d4a6-4e2c-87d8-a620fa7530dd","block_type":"box","text":"NM1026U-6049097-154/259","page_number":154,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"437e1d0b-87d5-478b-a293-048a3fca1252","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":"89242b4d-fc67-4184-8952-816cd8768800","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":"8bb44e55-a11f-423b-a81a-77e0f762eb57","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":"8bd06238-0ec4-4260-b230-f4e6dcf3829b","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":"248c807a-4566-4940-a50c-dad95c766ca7","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":"c078c424-aab6-40e5-80a2-e17f11713078","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":"46790fd8-1634-49f8-9686-0ceec3533dc6","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":"55dd3f54-a097-4b28-bb4e-a6879ca98410","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":"e8236450-a18f-467e-9191-c39da137828e","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":"2364549e-e131-4ad8-a78b-5f154c9b7faf","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":155,"box":{"x":115,"y":252,"width":277,"height":12}},{"id":"159da540-ea07-4677-bb13-6073b1456aa4","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":"c7272805-3b02-43b9-bb01-0f27a0ecab54","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":"ac5ace57-5453-4da4-9b19-d8e189f43b2b","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":"61da9cbd-cc16-4c07-b41f-f3da0994ac77","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":"177fcbd2-76bf-4071-a4ba-c06d3abad20a","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":"21086bef-2c2f-44b1-85f8-87706b97956c","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":"6524cb24-0950-441a-a97c-4cf69d35ac40","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":"a56a4749-d463-4216-a5a0-f1877f2e817e","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":"97848e12-8321-4127-8650-e4f90115cfe8","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":"1d473298-c1bd-4661-9a81-9f8aae0b3d46","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":"6b7fe739-41c8-4174-921a-312ddbdbfe89","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":"b01b9ae8-996e-4bd3-8e66-387dbc83b23f","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":"285aeea8-8631-4dfd-909f-928672b7dd1e","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":"17708de5-551c-4da3-9abc-b8cadfc0a160","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":"b37bb6f3-05b5-47bf-b3a7-c7fcdeeee183","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":"17b6f16a-0c67-4297-a669-093a317e36c4","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":"072f2901-c8bc-4c80-9edc-e0f2436d481a","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":"26c6090c-b1d2-4f64-97fe-448492a3258d","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":155,"box":{"x":116,"y":542,"width":344,"height":12}},{"id":"55c515cf-ecbe-4e85-a317-af537b682aa1","block_type":"box","text":"CMO Residuals.","page_number":155,"box":{"x":117,"y":570,"width":120,"height":9}},{"id":"5b868782-c8e0-4bf9-b6b1-ce38a2439392","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":"69badc4e-b872-41ce-aba3-d180c42c2896","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":"6d29fd3f-9731-47fd-acfb-0e409428e765","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":"bdc04ed6-5b31-4be9-8ebc-d5da29922caa","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":"75f743d0-5986-458d-a5cf-5a9db7209b37","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":"5f6ca6a7-04bb-40c9-9aff-bf71ee401b41","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":"e1bb092c-5d75-4628-878b-405bc8056e50","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":"b5a0081c-0411-4752-92be-e4e6a7432b60","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":"50eb0fa5-da95-4e7b-b59b-c76b1961ecfc","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":"30e3e3a3-54a2-49ca-96d9-f87b52650b43","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":"0e7feb03-d2eb-4845-aeb2-f8be46683140","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":"59b0ff9a-7294-46f6-b228-69cad4cd192c","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":"f5bcdc3c-139b-42eb-820d-938cc4827aa8","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":"7a520d3e-9620-4a42-903b-d383e81d7cf9","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":"de633725-7abc-4c99-83bb-570ab82920fe","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":"e14db049-3cc6-415c-a2ad-1a8ca2e9e52b","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":"6a3ce4f3-1bd2-41d6-8bc1-55ed082e07d2","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":"a110e75b-e363-4bfd-85c3-a1be0213e03c","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":"1c0bd3af-1e34-46ee-9e21-412a67d77bfe","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":"c15d2182-3ed0-48f9-94d2-5b20a430e0f0","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":"4cd233a3-9718-487f-9d6c-190b9e1d44ce","block_type":"box","text":"II-69","page_number":155,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6c05dceb-d2c4-4e43-9e41-86a34bce1682","block_type":"box","text":"NM1026U-6049097-155/259","page_number":155,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7afaca82-e277-4cee-ac7c-bcc30b27e9fe","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":"684297d8-3c5a-47d6-8afb-ad53ebe39ab0","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":"c261db96-e631-4d61-9b2d-751e09e80958","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":"5a06c521-dbdd-45ca-ad71-a2681f53f3ba","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":"d4c17d89-209e-4425-a2d0-ab228dba2cc7","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":"c919b562-3a97-4c9a-813d-9a20e79b11d6","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":156,"box":{"x":117,"y":180,"width":280,"height":12}},{"id":"2f8fcfe6-7c41-41a5-8d70-f29e81a20404","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":"274980ee-e475-4487-94cc-14a80ce90234","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":"ff73b12f-7b07-4cf8-86b8-958cbb899b08","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":"632b779b-282d-4dbc-a630-12559ca54a90","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":"30bc83c4-ead8-48c9-8db6-9246c24cc713","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":"4f85db30-d1ef-4a4e-84b7-4d1021902855","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":"0b878c26-c3b6-481c-8e09-9a0af056ea87","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":"44cbfc02-09b4-444a-821a-c86920e2afc2","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":"457f1c14-1797-4f59-81d8-ffbf1f85d1b1","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":"f0cd96ff-5d9d-4d59-b6e0-0a27b286db26","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":"c0d72f61-697e-4f00-a87d-6f31b75a3b76","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":"a7752633-af92-413d-884f-f6212b1f6776","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":"2a3282f6-34ef-43f7-a072-f787ff2adf64","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":"cc4523aa-e156-4de5-938d-7b0f2d1192ee","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":"3ac8ad1b-0a8a-40a4-879a-e5812686a137","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":"02d105aa-fe1a-4f45-948f-40e836c8e60c","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":"f1f1618b-8494-4dbb-8b5e-64c20b3b63c3","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":"0af991b9-6b9b-4797-8016-b24559d64a1c","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":"b0ebb9e9-8ff4-441f-a43f-aa739ba133c5","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":"03fe851a-ac55-4c55-92ef-8b26167c6de8","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":"33d5725c-462d-4d57-8f1c-1d00094b43a4","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":"01e56d50-0160-4f28-89f4-5fa67c458769","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":"312c587a-5447-49a9-a2cf-6622700ada1c","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":"6fe0d65c-1ab7-4bd2-bec1-9b38664870f7","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":"a4a5b9a3-2f73-47fe-8a01-8f5e7be8de94","block_type":"box","text":"Tiered Index Bonds.","page_number":156,"box":{"x":118,"y":552,"width":147,"height":10}},{"id":"9e954778-d99a-4a75-acb2-d33fb310173a","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":"8bd8acb5-f338-4322-891f-9cce5d8a6379","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":"0f6cc60f-2129-4f3e-a2b7-6fb6df3011d8","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":"bb97d9f8-405e-4ed5-ae61-46e7c24d0ba5","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":"fd5591a2-ce66-49b3-a39d-1a5c1830003c","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":"00ef864b-f03f-42f0-9384-8bafe5c9b3ac","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":"d1a89920-8b8c-4c19-a7be-3bda038be7b3","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":"41ece275-2a75-4f40-81a5-bb9fc6f10afb","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":"bf456d4f-0f36-42b7-8a20-c80f211a0836","block_type":"box","text":"TBA Commitments.","page_number":156,"box":{"x":118,"y":676,"width":142,"height":10}},{"id":"e89ea8d6-8a65-4d6d-9281-cbe3faa0232f","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":"85eac0bf-bddf-4e10-89a1-ca510c18ffcc","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":"e72c3212-da33-482e-8391-ff00e6deab58","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":"2021e6d4-b3c6-4217-a66d-f94032150c9c","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":"440405b1-e8f3-4c6f-9242-948331ea49ab","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":"60bcd20a-8e6a-475e-80f3-bd43a848758b","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":"e76a0f72-f2bd-42c3-96ab-a4a06ca12c60","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":"eb215b12-7334-4070-ab1e-b9e05a627350","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":"6a026c76-2265-4f7f-9931-0ac270de16e2","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":"29055fe9-f1e9-4149-b0c0-47092fad9870","block_type":"box","text":"Commitments” below.","page_number":156,"box":{"x":117,"y":816,"width":160,"height":9}},{"id":"cf4bc594-41d7-47cd-9eff-da5eeadfb348","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":156,"box":{"x":116,"y":847,"width":164,"height":12}},{"id":"9ab2a587-6311-410e-8277-c9768303056b","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":"af037e00-a090-4669-83b1-cced3d7c6c25","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":"287d7fc0-f131-47f3-aa23-1d64ca98e643","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":"55d2e5a9-52ff-48bd-817a-d677441b05e1","block_type":"box","text":"II-70","page_number":156,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2a027a38-d35c-4f23-8eef-6abb5cb13af6","block_type":"box","text":"NM1026U-6049097-156/259","page_number":156,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9b742824-541e-442c-9f02-5dab88ff1988","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":"a286beb5-8d7c-48c8-a630-284df6480094","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":"76f5d864-d69c-4767-8975-54d94fbe43ce","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":"debb190f-68be-42c2-89c0-aae1ffb486d8","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":"6e6ff441-7283-45d9-965b-f816eda25a61","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":"6e38f908-1ef5-4f36-81be-382cd6cab1c2","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":"c0fe616c-76e1-4c29-86f7-4767d8d68d47","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":"5fa0b01e-7e4d-4e93-91f5-f948db45b799","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":"ab2cfeb7-c27f-49fe-b27c-5e805a9efc04","block_type":"box","text":"use of dollar rolls.","page_number":157,"box":{"x":117,"y":211,"width":135,"height":10}},{"id":"29cbc72d-5115-4f40-adab-6b4cb52de80b","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":"b8c7de17-2636-4d48-8814-63b403416628","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":"506ab57c-8267-4bdb-b0d7-6618d307872b","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":"ca935094-3ee3-4e87-83ee-12d35302ee81","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":"b47d6ec7-33af-4a53-80ff-fc56119b30a5","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":"7d9ddf05-5cdb-47c0-be45-155b92a0d0dd","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":"36b59a48-f813-4933-a67d-8537abc8e3da","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":"bcdce3d8-a6e9-4dcb-9d2b-b6d78bfb614d","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":"8c9dade1-fb7b-4981-9509-13c3f8f807a0","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":"04d59d07-52c9-4561-b75e-04a53c04f118","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":"ccec056d-0b3c-4153-82cc-56013a5a2768","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":"71dac456-2652-466a-b11a-127e0cb1d24b","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":"2ffc909e-88d3-4162-978c-2c00d69840e5","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":"31f52627-b14e-44f0-af14-a9fc7e575b5b","block_type":"box","text":"can be successfully employed.","page_number":157,"box":{"x":116,"y":475,"width":233,"height":12}},{"id":"79b73b66-cdd3-4ae9-8f05-e0b1615ece2a","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":"aa9a7fb5-2cc3-45bc-858e-1e9293e0d5e0","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":"91f06859-ebaa-4a6e-b837-d2f5b29a19b4","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":"cbe637fa-1ecb-4cc3-a67a-5cfb9b347d82","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":"c0822f7f-cc97-4c2e-8e02-6803c1262243","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":"ed4ce09e-fcf6-4d6e-9a4f-98a684bbb56b","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":"5958200f-83f4-4da5-aed9-bb09ed2ca9ce","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":"04537f4b-28ff-4f16-865d-d328fecab6b2","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":"b08d3eeb-c2a7-44e4-b85d-7405f9dfede8","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":"6d99b415-1ac3-4978-aea9-5b8513130f48","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":157,"box":{"x":117,"y":661,"width":270,"height":12}},{"id":"55871d5d-d408-41d2-83bd-552821050c21","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":"adf9a974-8efd-4e23-a46c-427f81e47473","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":"71b34feb-63bb-4449-b504-4c7034d213a7","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":"5e93b475-24a0-4a29-81ac-3611e1992cfd","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":"e6bd878c-f3d7-4c09-a264-278644853ca1","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":"0845b1fa-7b15-4990-add4-289ef436d6a1","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":"3eb8cccb-23ca-47b1-9b66-5d30bba0506a","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":"4095fb72-936d-49a6-8460-a2c09c0a2ffb","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":"1ef5bfa9-361b-4cd9-ba66-0fcb2bb943b0","block_type":"box","text":"Municipal Investments.","page_number":157,"box":{"x":116,"y":800,"width":177,"height":12}},{"id":"b2a4b5c3-0d83-4920-827e-068b0ba82fa9","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":"7fc5a561-a66d-40e7-9d1a-546c8a499469","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":"c9f72c37-f6c3-4c74-b5d8-5c87af5aed43","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":"a273bc94-318b-4171-8af0-85154471f553","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":"11046b40-8035-4232-8866-72c2ddda16dc","block_type":"box","text":"II-71","page_number":157,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"b291530c-7275-4213-9624-de7d63d32ba7","block_type":"box","text":"NM1026U-6049097-157/259","page_number":157,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"85f97ac7-b44b-4bb7-bb29-298cc299b19d","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":"b14c92c0-001b-41b9-9272-80524709855a","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":"57220f54-64c4-4269-859e-e8f031e574cc","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":"be59e7d4-3c40-4b2d-a35d-fd9ebe397c28","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":"8a46aaad-7455-47b2-b5fc-ab6344aa06a2","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":"d8802a0b-c8b7-4d24-a596-bd3518b1e744","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":"5292cc81-586e-4781-8e95-20978da32eae","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":"050fad85-84a4-4f06-831c-3a0202c5dce8","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":"d08f4ae9-67f7-40c0-bc76-718bb1723b01","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":"368ef6bc-58ba-4ade-8483-d6164abdd426","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":"b044fca5-9828-4a65-888f-1067f360fc75","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":"f3c1147c-3ef3-4ac8-aae0-399a1fd3ab4c","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":"1eddf85f-32ea-46cd-b955-4ee9e69f61a2","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":"cacfd7fb-ff2d-48d9-812b-6d2b5ad32df4","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":"464058b7-489f-47f5-a76f-7c1b663fc57f","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":"f758e8a0-dbb5-428d-8c4a-4da7ef249a18","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":"8f3bd515-c548-45e3-8254-44bad60fa008","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":"56f8e651-80cc-47cf-8b97-94f3e217f1dc","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":"b8edf380-6c08-45f3-8c98-b00be87f45af","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":"d7823c03-5917-4675-874b-a6385130aa5c","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":"2ec0dc76-fd2f-4d49-a259-5a0c9a5f847d","block_type":"box","text":"The risks and special","page_number":158,"box":{"x":636,"y":397,"width":168,"height":12}},{"id":"7c1c20eb-b1bb-42ac-a188-16e6447204e8","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":"2f9ec2fe-a6df-422a-8348-40a2db78efbf","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":"66b447eb-199c-4460-9367-5ea2ec309b44","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":"efe8e248-e1bb-4877-8f13-481d21c94717","block_type":"box","text":"characterized as derivatives.","page_number":158,"box":{"x":116,"y":459,"width":218,"height":10}},{"id":"2d7488c8-d685-489b-b562-cfe92b7656ca","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":"87bcb0ca-c0c0-44ba-9e14-74a0c4dc716f","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":"72e1d890-4053-4a79-a5c4-c6ef96141fb6","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":"47cdcb53-d25a-47a3-a605-f0b66c9e2879","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":"405e2b3b-2910-4a84-96be-163768b2ac48","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":"8fb02fc2-2e8f-4904-a3d5-68619caecaa2","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":"18fbd7ed-cc6d-4d51-b0fa-5fcdc8128749","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":"b1f521d2-660a-4ee0-8233-525ba46ae75e","block_type":"box","text":"Description of Municipal Bonds.","page_number":158,"box":{"x":116,"y":614,"width":240,"height":12}},{"id":"65d93e25-815a-44d1-9228-2212083dca73","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":"d90524ba-f2ca-4cef-aa64-da7b0d91a058","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":"df43c1bc-0d4f-4027-b81b-4d9bafa62894","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":"9892c3e2-0ec7-4e92-b524-9ca7297146a8","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":"67b35550-48fd-4c5b-a594-742aab467695","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":"56307b49-8bdb-4706-9891-91d8fff6f210","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":"4f84e825-1368-40f2-8f83-dc582c2a9372","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":"c05ec5c2-6c20-4bce-a5e9-e76deedd7e14","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":"ca4368ac-49ff-470d-bfd8-d4483173ce77","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":"d86be996-58b4-4174-9027-5df3c6c38274","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":"724d7710-0eef-42d3-88ea-6cb718b47e34","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":"5cf89634-19c1-42a0-94ce-0e1405e2ea59","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":"8c6aa57c-bb56-434c-befd-249d75e30cba","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":"d6b3f28b-b82c-4b68-a0aa-9746fd44d0fe","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":"a6700958-857d-4c11-8285-d24b705133a2","block_type":"box","text":"pre-1986 law).","page_number":158,"box":{"x":117,"y":854,"width":111,"height":13}},{"id":"117caf21-64c9-4aee-831c-e5fa7092365b","block_type":"box","text":"II-72","page_number":158,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"65269734-60b3-4625-a3d9-ee4c19bc691a","block_type":"box","text":"NM1026U-6049097-158/259","page_number":158,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"22788e0d-03ff-4285-87cc-df39aed6a7a0","block_type":"box","text":"General Obligation Bonds.","page_number":159,"box":{"x":117,"y":87,"width":194,"height":12}},{"id":"64c82b7c-e93d-44b2-802c-19237c38a7fe","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":"acd0020e-5410-45e7-a892-740d77ffb264","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":"d2754c90-3b67-49c4-9ed5-fe9f1e54c0ae","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":"a88d5785-ecd1-444d-a3fb-58c4a44721fe","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":"3ff51925-3f8f-48d2-9f5d-0405787593de","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":"92ae55f4-9d7d-4191-b67d-a19b6f467758","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":"10a99e52-c38d-4d6d-acee-875fb44763c6","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":"49c47d8e-c65b-45ef-8467-df5a5260123f","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":"97191b26-e384-4a44-8508-fd5b171a3637","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":"82ea9cca-26ef-4028-a030-59e615fb5523","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":"07aaf721-bf1a-45f2-bb43-11caa2084a25","block_type":"box","text":"Revenue Bonds.","page_number":159,"box":{"x":116,"y":258,"width":122,"height":9}},{"id":"6b7be55e-c284-4ce2-bd6a-964498f7a913","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":"c3253c45-af3e-42ec-8a86-28d148197f7c","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":"6d6e09dd-d1b1-4881-b607-970c3a36ac4a","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":"51124893-07f3-44be-a331-74b5b9ed7745","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":"bfffbcb9-628d-4606-a3d6-4d360347cf75","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":"903957b3-a914-4ffb-86a4-733105a50101","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":"454e48b2-30d2-456e-9cff-5c2f548dd186","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":"7fd0e3ef-dee1-44d8-b730-1904a6d9587b","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":"df0050eb-3496-41b8-a2e0-9351b159cafb","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":"e756cfc1-dbe8-4ffb-bbac-e304afe3e85b","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":"551560ef-0fa2-4cde-9c3c-41bed108c9bb","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":"7d8d0964-c281-4c64-aff4-0ff33dbea16c","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":"3d1307bc-cbf9-443c-b84c-7c5612c3984f","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":"dec7f3cf-432a-4302-8431-1833296b783f","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":"f0967aa7-294e-4a54-9c7c-96d82ea014dd","block_type":"box","text":"PABs.","page_number":159,"box":{"x":116,"y":506,"width":45,"height":9}},{"id":"625b1253-32ca-454c-b135-839fafba9e27","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":"f75de765-e856-43ef-824e-24c793870f9c","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":"f2420db5-6965-4d8b-b86a-3df88740b7f8","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":"d74155db-2db3-4467-913c-48eaeb031fbf","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":"aad7c820-3fc6-41af-a0eb-2e4c19dc3fdb","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":"92e4c3f3-1d4e-48fc-901e-68011081bd58","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":"e202006b-3089-45dc-a955-8e79ea8c7065","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":"0b68b67c-b48f-473e-ac0e-66548ffdd458","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":"667dd25d-3dda-4cfa-80f3-6ef99f637663","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":"f520090f-742e-4c5e-ae8a-b6ad8a1378f1","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":"29a39e6b-9195-485b-9f9b-a83e89aac2ce","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":"e536b26a-59db-4dd8-95a6-93d3284cdb80","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":"b59533ab-0600-409e-a29b-7c1c51606bd2","block_type":"box","text":"Moral Obligation Bonds.","page_number":159,"box":{"x":116,"y":707,"width":178,"height":12}},{"id":"ba256013-96e6-4bf7-83a1-94fd3b48ab6b","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":"46874309-7c33-4645-9d32-9cecff107dd3","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":"6c110b05-c7ec-487e-8d6e-0396704618ef","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":"bcc482b7-50f5-4ec6-9f40-035f09a64349","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":"3faddb3c-78ed-456e-9f95-3cc2b4b5e11f","block_type":"box","text":"Municipal Notes.","page_number":159,"box":{"x":116,"y":785,"width":122,"height":12}},{"id":"945debee-e3f0-4c73-926d-bafb8ab40b53","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":"07e7dc61-f05e-4d64-8c24-402e6f9ce2f0","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":"db23f203-a891-4d41-bd0d-974460b4a4af","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":"a3e50f30-9eca-402a-b26c-1831b7607d94","block_type":"box","text":"Fund may lose money.","page_number":159,"box":{"x":117,"y":831,"width":174,"height":12}},{"id":"7f57dcd8-e031-4d8b-8e6c-3e6462d59dab","block_type":"box","text":"Municipal Commercial Paper.","page_number":159,"box":{"x":116,"y":862,"width":218,"height":12}},{"id":"03c753b7-a0df-4ea1-929f-70a4ab6b849d","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":"f50e3921-1851-49f0-b49c-8d7e2d1b7b37","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":"06509063-d9a0-4971-b34e-6611de56f3f7","block_type":"box","text":"II-73","page_number":159,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c10816f3-5a78-462d-a206-3a3ca3ede4e3","block_type":"box","text":"NM1026U-6049097-159/259","page_number":159,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"407144c1-9a0b-4886-b206-7543d919e45c","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":"a9d9d6e5-1d94-4798-a245-7bc1ea1e36f6","block_type":"box","text":"the assets, if any, that remain.","page_number":160,"box":{"x":116,"y":102,"width":229,"height":13}},{"id":"ab488132-22fb-4682-bc3e-49e7f0ceec8f","block_type":"box","text":"Municipal Lease Obligations.","page_number":160,"box":{"x":116,"y":134,"width":213,"height":12}},{"id":"1772ce9b-aa93-4bcb-869a-94fb36b4ead6","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":"5fe426b7-fa06-40ff-9286-e1766874acb0","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":"cc8fc584-00c7-4d82-afa2-97a36e45d82b","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":"8c33ca9a-08c2-48d1-bc4a-7247bc067a38","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":"8537e194-3fbd-4657-b6cd-910574c961c0","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":"484ec2ff-e54f-4445-ad5a-e8cae4659cb4","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":"296f6859-ba11-4594-9494-50a80bc68dd8","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":"d60ce6c4-bc99-4234-a30a-9e75afa0195c","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":"b1d9f6e8-52d9-43bd-8e61-dca5f7c3fad7","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":"e7a782ac-9934-4888-9e6f-ab3716b8dfbc","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":"e14e6d98-c615-464c-981a-6dff0faad52b","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":"fbe8cad0-8f65-4d3c-bd47-dbe98b818382","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":"17b0a972-87d0-487c-b10f-85ce8717226c","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":"de7df621-be00-439e-b954-cca5cc6ee075","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":"434d60ed-3507-4456-b588-0b7e9ab41887","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":"954e5b7b-5cfa-49a2-8b62-c731dce41f2f","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":"f453f9b1-f034-4c44-84e7-03ea010a4c10","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":"5d01df17-fa28-4369-b4ae-9f0c45ae591e","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":"2b0d381f-f833-46e2-ba6a-8010ac2aeb3d","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":"a97b5797-a3b9-47cd-837a-784407b511e5","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":"b7f2e5a9-7009-4fea-94c7-a937d8b67420","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":"7d33053c-10b7-49f6-9568-728501d4f9e8","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":"cc0b4edb-e6e9-4f7e-8933-4915881902af","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":"da916521-90f1-4c7a-837d-29609423005f","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":"e9cc72c5-6bb6-427b-99b1-932f5d747cc4","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":"1e2f01d4-55c4-40b8-b73a-d96bc3c2a5a5","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":"ba13e816-0ff2-48af-93e6-9731d4918e87","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":"ff70503e-a444-455f-b696-8283ccb2d7de","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":"44d441ae-a98c-46a5-a6a3-4a48c2fb49f7","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":"8fdee400-68f1-4498-a763-2f1f696e0645","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":"089c6337-4bce-4dc4-b2d8-2e549bb01110","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":"b58bd573-2744-43c0-b0ef-d7e01c254cd6","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":"d47d08c9-59f1-463b-8eac-435005d4bf13","block_type":"box","text":"Tender Option Bonds.","page_number":160,"box":{"x":118,"y":661,"width":161,"height":12}},{"id":"47b58ea0-8186-45f0-9dbf-2c2f82343f4b","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":"325dd4ae-3251-4b78-bd10-367ec57dfd07","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":"21baabb7-2823-4693-8c74-09579ab8b041","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":"21730295-0618-488f-a59a-e5a543083210","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":"585f74df-fbc7-4b5c-9b41-ebfc518eea0f","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":"524bd44f-488a-4f27-ae64-0723cc3ca297","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":"c76916d9-d41f-4b3a-b2cc-acab95025409","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":"d1fa1e08-d0e3-439f-a187-8282fb9142d2","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":"4c9cba43-a635-4652-9181-6cb99c64e53c","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":"c7add4a2-82ed-4837-94fa-2853171d650e","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":"053f8b6d-1cef-4e09-9bca-3df14017ad0e","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":"355d84b5-8238-4c1d-a4ee-44e703aa4a8f","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":"4781e9ba-bf93-4535-9617-e38261b78458","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":"f4378084-e510-4779-979d-8327f61f0b55","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":"1c150e5e-2200-474c-bc5f-3292c091c60e","block_type":"box","text":"II-74","page_number":160,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"edf9eb33-7113-4167-8f0c-806c0e133da3","block_type":"box","text":"NM1026U-6049097-160/259","page_number":160,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0c134d04-27f3-434c-856d-ee52935cc938","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":"daa1adc9-e5cf-4b6b-b6ca-0167dd82861a","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":"e0031fdb-d808-43fa-9b35-04e6f765071f","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":"57bab771-a2a6-4900-b555-a40712796794","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":"d3f57ce0-c506-421a-beea-2fd0564e33bb","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":"8045aa62-67e1-403e-81d0-82ecb1f26e77","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":"3018bc40-dbfe-4c06-a857-22e1b0e8a6c0","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":"c59cc78c-4456-4d51-90a2-845381116afb","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":"d4464ffc-9958-4fe2-b283-dc86c4769263","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":"84a66c9e-aea1-4159-90c5-905f5f887b51","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":"d0c7bdea-af34-459e-9cd2-f729af2152db","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":"0b46c942-bdc0-44e0-96c4-5cb3bc757a01","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":"8e4af70a-22e6-498b-88ed-baa875e8f111","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":"73b5e613-7e37-4950-ae65-6370906f1873","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":"c259d87d-d03b-4964-a5d6-e7b93dc26d1a","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":"9d475307-22de-4fab-8501-2c544330ffe4","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":"6129f1c2-a3b8-44d1-b988-31e30d3e16b8","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":"d4b25dce-5456-4a8e-99dc-dec486c3e56d","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":"a006d102-37cd-47ae-aa24-3f8f356106f0","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":"9e27c292-0722-4d20-bf05-d01960818c09","block_type":"box","text":"enhancement provider.","page_number":161,"box":{"x":116,"y":413,"width":176,"height":12}},{"id":"557e4a1b-7eac-4029-8553-8126da4800dd","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":"eb98a7d2-6a2e-4053-9f17-4b05c1fcc526","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":"6ac91b4c-ccfa-470d-90bf-5eaf3cf337ac","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":"598631f0-6c86-4f96-ab9c-ac81a48e8968","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":"09ac1022-2315-4fa9-a27e-03818c852750","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":"8176b41a-e228-4d54-b68d-b3d64ba3932e","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":"12b19820-e939-4f2f-8e62-dea5a0c2310c","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":"22e3596d-3554-4ce8-bbf7-8cc7a68638af","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":"6df3efad-f80f-46e6-899e-006b615213a7","block_type":"box","text":"Floaters it issues.","page_number":161,"box":{"x":117,"y":568,"width":134,"height":9}},{"id":"579c55a2-f344-497b-a1f2-e31651a2a1ae","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":"3f012552-6cbb-4704-a205-4ba110c9767b","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":"ee385387-456d-4dfc-9954-d6a3b46b8b7b","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":"ddb84c7c-2ef3-4baf-bdd3-1628e3ba89ec","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":"65ccca13-5ec3-4385-b5e7-157454d8d8fc","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":"5bb891ba-2e5c-4107-956f-ac3c94a6ee36","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":"11c2f26e-1169-4dbe-a604-12ca663159cc","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":"4afefcab-801f-4c41-9ddc-407de1a3bce2","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":"482d4c32-4163-435a-ac18-224a02fd7b7c","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":"4706de6f-a9ea-415c-85f0-b3929267920e","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":"61127e55-11b5-4c46-ad99-d3cb917a2324","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":"b676fe1b-0ace-47dc-b792-fdc3bf8a0457","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":"f69bcd1b-d58e-4d99-95b4-b406d3e82ce4","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":"6c37c130-50c3-42cb-a2d0-49f128f7c931","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":"ae191e24-05b3-4131-a30d-d361502b70ec","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":"06d4011f-ca32-4ef3-ad0e-265b2fe9886c","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":161,"box":{"x":117,"y":847,"width":307,"height":12}},{"id":"167d7001-aa42-47b6-8fac-0338a2676857","block_type":"box","text":"i.e.","page_number":161,"box":{"x":425,"y":847,"width":20,"height":9}},{"id":"ce8f6bbe-e6e4-47b9-9240-5e6e1e4a0aef","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":"77624621-865c-41ea-9c45-d50c4f4261bf","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":"96f74aac-709e-4cb4-b4d9-c961beffe5ac","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":"df9bcf62-51e3-4018-a00b-4491e0a16cf1","block_type":"box","text":"II-75","page_number":161,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f9a85418-c5fb-4955-a5b7-4c78abc5cb2e","block_type":"box","text":"NM1026U-6049097-161/259","page_number":161,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5a1a6bac-bbc6-44a9-9b47-318060a66b6a","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":"db40a45d-9bb1-464f-9abf-32de5d1e547e","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":"137174f1-7d64-4595-b889-f22aa359482f","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":"b373e6c0-04da-45e3-8943-4e647f086fba","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":"c02fbffd-8504-4ca0-b3dc-821be1ec8d5d","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":"bc787224-5ff3-4c46-941f-aca5d14e46c5","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":"5d65a1b2-c8d9-41fd-bf2d-7512b92241c3","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":162,"box":{"x":117,"y":180,"width":281,"height":12}},{"id":"841bd440-d288-4c19-81d6-076ac743ca24","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":"7bcca612-c9f5-48db-ae58-fdd9824685f7","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":"7ed55c25-69ab-470d-afe4-d0b6a4fdc523","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":"8e3fd729-6b6e-4420-82fb-ce352f2f046a","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":"7200060a-9c1e-4e2c-a226-10728800d6ce","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":"7a2577de-7551-49c3-ad66-591ef1c1fc59","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":"857b5c95-564c-4bc7-84d2-23136516f0a8","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":"5f0ad69e-89d4-428b-81dc-62d5cbebb417","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":"81c4e021-cd56-4596-b6eb-11c0e5caf5d7","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":"250fda98-6919-4efe-9965-10fd6a95ed7f","block_type":"box","text":"participation in the TOB Trust.","page_number":162,"box":{"x":117,"y":351,"width":227,"height":12}},{"id":"95778d56-36dc-49bf-81e2-49b8cb18b300","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":"569c7d71-a0f4-436e-ab2e-bf7f30c5361c","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":"070e9c26-d2a9-4d08-8d06-1e21a9558860","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":"64608754-ece6-4689-b1c7-4af49a572e9f","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":"00597836-4ae3-4b24-8381-4c05f4a399a0","block_type":"box","text":"basis. Interest expense incurred on the","page_number":162,"box":{"x":117,"y":444,"width":288,"height":12}},{"id":"4e31f81d-f1cc-4690-b228-6d76bf89b4b7","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":"f92947d4-811f-4be3-92b8-6751de995b2b","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":"9074c6f1-6bf6-4d81-9bb0-af12dde988f5","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":"4bba2512-9d15-4d31-a75a-a9778f1b2997","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":"e530fd73-b61a-4fbd-bbd7-9ff968241b79","block_type":"box","text":"assets.","page_number":162,"box":{"x":116,"y":506,"width":58,"height":9}},{"id":"99a5f14d-ea2a-4753-acbf-07edce8d8f31","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":"56a02e3f-48fd-4fdd-8716-42769353ed59","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":"216dc627-ebfe-472a-be88-7f1ae185cbb6","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":"0b747e10-0f31-4383-b797-67cdd4a604ad","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":"ee8171b9-0778-4361-bc25-b5ba386d6de3","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":"e6912118-dc92-48fc-b8a5-733d39f30c4e","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":"9cef34e0-d74a-4a75-8936-f6e378265f04","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":"2e4481fc-ac6f-4927-a248-1d8abf8fc45f","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":"a897ba8c-1140-4711-873f-75cb043cd2cc","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":"b9dc6a55-ac59-454a-a78a-c78bb2df0c5e","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":"b0a7aae5-69b4-4704-8dd6-77a7c25adfde","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":"86f41b60-73be-43e2-874b-f61e2b4c16c9","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":"efdb7ad6-023a-4d59-b953-ef9cfa454ab6","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":"bb5f7087-1d50-4b3b-af60-20940f19357b","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":"585f5703-1943-4743-9e6e-21b57a1a2bf3","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":"33172c5d-171d-4511-ade5-451bf708a71d","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":"f47c6019-c565-43e5-8892-16497c5b9e87","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":"72565908-29d0-4a75-8e70-fea80201a1cc","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":162,"box":{"x":116,"y":831,"width":301,"height":12}},{"id":"ea86eaca-0dd5-4662-bbfa-1d4ee87c64f2","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":"bb761396-a638-4c9b-af68-d8378c18f0ae","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":"f0dfa440-648c-4a78-8f32-d010ee4a4aea","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":"0ea85a1e-eb18-4893-b5eb-de63818e5acd","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":"f42db784-ae97-4ef1-9555-20d79ea0cbe4","block_type":"box","text":"II-76","page_number":162,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a3065057-c972-4117-8e7d-64688b095cf6","block_type":"box","text":"NM1026U-6049097-162/259","page_number":162,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ff506271-b2e2-4ee7-bcfd-079cdf85ca87","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":"ad4b1949-3f21-49b6-91de-f2535b1ba664","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":"8b7deb63-8805-4945-9f75-e30a3781623b","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":"9bf63d8e-7a0b-4edc-8d83-31d42ad8b6be","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":"f0c57c87-710b-41c2-b645-04ef091bb043","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":"37717052-df9b-49c9-b231-982260c13f79","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":"80ee0b96-d1ac-424c-87dd-9fbd75bc4031","block_type":"box","text":",","page_number":163,"box":{"x":643,"y":173,"width":3,"height":3}},{"id":"de4615c5-0a9e-4e46-b736-70282ccba6a2","block_type":"box","text":"but not limited to, compliance,","page_number":163,"box":{"x":648,"y":165,"width":232,"height":11}},{"id":"4e74aab4-b901-4b85-8164-71c04f54d03e","block_type":"box","text":"securities law and operational risks.","page_number":163,"box":{"x":116,"y":180,"width":270,"height":12}},{"id":"a803d2b9-4472-4c84-a65b-02128a32e480","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":"fcf78a14-af3b-4dd9-8bfb-5b39bd37ed84","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":"26744941-529b-4095-bf9a-dcbb3d63ca6f","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":"97ae00f5-9c04-43f6-9893-1bd6b4b2707d","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":"90fe7983-d746-45d9-9d4b-23ff3ea50fe5","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":"b08a895d-326c-4289-9d82-298307cc51f3","block_type":"box","text":"holders (","page_number":163,"box":{"x":117,"y":285,"width":64,"height":13}},{"id":"3c000835-ccf2-4203-a232-55b1dda05f2b","block_type":"box","text":"i.e.","page_number":163,"box":{"x":182,"y":286,"width":20,"height":9}},{"id":"f6a0a5e0-fa1a-462b-b899-c46ac189009c","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":"7f54d180-573d-4dbc-9513-3aab218d3a75","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":"0c7a1a36-ea01-4a73-81fa-1b74f20f1ef4","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":"f88a235b-3193-4613-844e-f9cce7734d50","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":"0218b628-0cc5-4b2f-88a8-0cf453073d2e","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":"6e23be19-8ac7-487a-8e11-751f39dde7ef","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":"2dcc98b6-61d4-4d66-9355-3e7b40f1b7c8","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":"175e3e82-733d-44d7-b7d8-3eb9153c6f93","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":"963f380c-9c20-43b8-b48d-340fdea3a06d","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":"ac98b0a0-65d0-41af-b770-98c65334b6e2","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":"d10ffc36-a870-4ded-9d4b-75ef745ecbd8","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":"e1b922c1-338a-49bd-98fd-b2400d010963","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":"8b5c7388-80a6-449a-b307-3acf7343fdc9","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":"457e66a7-cc2d-414a-b8c6-c1f0e23bb63b","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":"5eb7cdea-08ff-40ad-b0c3-ed6815b37e66","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":"8b7c311d-3310-4187-8c73-1d28a6026785","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":"1d1fbb44-22ae-406c-aba2-f027e34a5997","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":"f48d4bda-2274-4975-b58e-f5821657efd3","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":"ebcc9aa7-8649-4053-ba8e-dcc46935b93e","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":"d88f10a0-8c50-4979-8089-60ae60919d09","block_type":"box","text":"circumstances.","page_number":163,"box":{"x":116,"y":605,"width":117,"height":9}},{"id":"551d2be1-6182-4986-a7ec-2b086cf9fd21","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":"674168b2-3aca-4386-a11b-4c443d93e153","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":"fa4a2234-0ffc-43bb-90de-d1740cc0d82d","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":"ad38426b-2916-4b90-b348-6d366fd27e60","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":"3e21d4f0-7f28-4091-a340-ec0ca6c1b030","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":"9e47f925-16d0-40bc-b013-a3f9788e9cd1","block_type":"box","text":"Yields.","page_number":163,"box":{"x":118,"y":723,"width":47,"height":9}},{"id":"2b3c90e4-8446-4e8f-a57a-6f10e7f467bd","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":"9d1739c4-cd11-49f5-adf7-cba7b60016ad","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":"4892d528-b7d0-440f-8e64-5df92a13ddb9","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":"582e6922-0833-4eb1-9bf8-0307653835e5","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":"fb063d86-b90e-4474-9136-29622855d98c","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":"15deb45a-e846-4e91-ba12-209697d02c89","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":"c3ac32a1-52fe-4783-9304-9c0e15d35dbd","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":"3b79c3f5-a5ea-4c73-b338-6b1d09131126","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":"9d5ecbaa-c978-480a-89c2-0f4d6ae7dacb","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":"b9386e47-3347-42f0-b9b4-63da829aea80","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":"8747b105-63dd-49e7-9e50-6edf71fa0c9f","block_type":"box","text":"remedies.","page_number":163,"box":{"x":117,"y":878,"width":77,"height":9}},{"id":"7e07f6d4-b0ff-4e6b-96f9-1c5da8d2a25f","block_type":"box","text":"II-77","page_number":163,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"32edb7cd-e434-431d-a2aa-e5cd8901504e","block_type":"box","text":"NM1026U-6049097-163/259","page_number":163,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f15cbec6-05e5-4c4f-9a90-3334dc4b80f4","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":164,"box":{"x":118,"y":87,"width":344,"height":12}},{"id":"4fc35b7e-3c8b-4679-9aa0-289090321de1","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":"55cc2758-b0ac-43e9-abc8-771630d0ce3f","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":"5acb1a9d-34a8-4e05-9061-2ce68fd2ed93","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":"526a4219-c5a1-4236-8e4d-7e867914b0f3","block_type":"box","text":"period not to exceed seven days.","page_number":164,"box":{"x":117,"y":134,"width":250,"height":12}},{"id":"e05631f2-79e9-4e8b-adf3-7375b228d49c","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":"b364eba6-3e33-4190-add2-a1f3052b29f3","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":"61f24514-c283-4c2e-9130-2ff05785e544","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":"71af7b89-4431-48ea-992a-fae207b2a226","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":"df24944f-a529-46fe-8bcf-cd3ef6851b0f","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":"86b912f6-2554-4c5a-b135-886d817dd795","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":"a5131035-7b74-444a-8a74-dea9ec442394","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":"cfeb1455-625a-4d5c-ae72-50050a8a1dbb","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":"ba7ea393-d053-4b3b-acf6-d8b0856031dd","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":"bd3b56db-0747-4c03-909b-3fd21c10e659","block_type":"box","text":"of capital depreciation.","page_number":164,"box":{"x":116,"y":314,"width":173,"height":12}},{"id":"b5b49773-87af-4959-b9d3-99ce9cb83f70","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":"c5924dbd-8d55-423f-bb00-099283e7a8e4","block_type":"box","text":"The Municipal Funds and certain","page_number":164,"box":{"x":608,"y":343,"width":253,"height":12}},{"id":"b4e04448-efc4-4d03-be92-6a79b478d8d6","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":"319bf20f-b8a9-4ab8-8409-279916c8df03","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":"3f7d65f3-34a7-448a-a446-6cb70b8948d4","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":"70417371-2101-484b-b2f5-cd55944e2e38","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":"79c1be5c-f8ae-4fe8-932a-6adcd2901550","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":"d4d3ec94-20f8-4c38-a361-d924fbdfeb7b","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":"d9fa6ae3-c1f0-46be-a155-77820284c947","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":"5d285983-1520-455f-95fe-536473ce72cd","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":"3d6367cf-74f1-4778-a72a-823bb4625ef2","block_type":"box","text":"dealer-to-dealer brokers.","page_number":164,"box":{"x":116,"y":482,"width":189,"height":10}},{"id":"f490a64f-840b-49f9-8fe5-4c4eb9a3e0a0","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":"4c41e82e-34c0-416f-a1e0-fa539093ab85","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":"8f776595-634c-4c63-b8c2-7235e3d44226","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":"d6e62328-cac6-4bd0-b87a-2cc64befcea8","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":164,"box":{"x":116,"y":557,"width":364,"height":12}},{"id":"c8d3be5a-c488-47a5-87f1-61dac77a7591","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":"ea81daf9-a26f-4c3f-8d0d-3c64451973b6","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":"1bf8a2b3-43c5-41ac-b939-7720081a8881","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":"4ea8a35e-100c-4689-ab2e-d9572be29f49","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":"6dd6e00e-ca05-4a4e-bfb0-20b34c129228","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":"8ecb8f79-58e9-4c7c-8d8d-1dbb5d87cf3b","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":"67ebaf1b-f4cc-42ce-9975-d4e0ae9f6bcc","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":"26fcac94-c919-4ff0-b2d0-0d3826e22cce","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":"dead57eb-0c69-45fd-bef1-845b3a585a7d","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":"b487efaa-b2ed-4a59-851d-552f74c1d4e8","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":"12067484-347b-4e21-82ea-65a00b00f773","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":"1535e804-317b-4ec3-b9f6-ab9b9bce23be","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":"ffb999ba-b8c3-472e-8991-4d024731e4a6","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":"6bb7ea41-81c1-411a-8024-dba7c96d172e","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":"031a8fd5-18ac-4dc9-bf4b-adf434ff6ef4","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":"94fbe80e-0ac8-44f3-ac2f-24e9c81f04de","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":"b149916d-ef9c-47fc-8a08-97d8cfc34f3b","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":"9cb99c82-5709-4a23-8f8e-2b2770e6fce6","block_type":"box","text":"Call Rights.","page_number":164,"box":{"x":117,"y":862,"width":83,"height":12}},{"id":"3438cfa8-0aed-44de-8181-389b37fd5b8d","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":"23d944fe-f6b7-4c28-9449-d34ed7bbd005","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":"bce22457-c02b-47f3-81f2-11bae2867b98","block_type":"box","text":"II-78","page_number":164,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2d04e3f1-30fd-49d8-acbd-486af44bb12b","block_type":"box","text":"NM1026U-6049097-164/259","page_number":164,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"242b3ee5-9862-4947-92e4-1b97117537de","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":"58141d17-2070-40bb-ae3b-7503726085d1","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":"f1b42c50-038f-434a-9dc4-de423f0d0d54","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":"dee97462-fb23-44fc-aa5d-c2ae59cb112a","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":"1d27e806-a074-42eb-9ae4-d689bdb73a25","block_type":"box","text":"obligations may be illiquid.","page_number":165,"box":{"x":116,"y":149,"width":201,"height":12}},{"id":"c2b19276-3245-4257-835f-63979f2f3cb4","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":165,"box":{"x":116,"y":180,"width":323,"height":12}},{"id":"d86521a0-8de3-497b-b0f6-79dc5d8edbdc","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":"8c1c784d-808a-4087-9d3a-b95874de2acb","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":"ef3e9393-b4d6-458d-9766-b15592ef220a","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":"83502746-f185-4976-aff8-f67d13eee757","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":"387daf7b-f075-4ee4-a6c2-4423a8c4feda","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":"502fd9be-b1cd-48d7-8082-0ffdaee687f5","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":"019b410d-b03c-4d95-bd4c-5b9bfb9e61ee","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":"1ccfba2d-6fd3-41ea-8328-8a937f3387c8","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":"b8662e25-f00e-464b-a689-acd4f3390a62","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":"12ec46b0-09c3-4dbe-aba9-73c17268e706","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":"3b3597f5-08df-4aa4-bd95-a0fb8bcee3a9","block_type":"box","text":"i.e.","page_number":165,"box":{"x":558,"y":320,"width":20,"height":9}},{"id":"5347deca-3bf0-4ac7-a76e-7c265c4fc924","block_type":"box","text":", wide differences between short-term","page_number":165,"box":{"x":581,"y":320,"width":284,"height":11}},{"id":"a165257d-d60a-4be9-92b2-0edea8fb7541","block_type":"box","text":"and long-term interest rates).","page_number":165,"box":{"x":116,"y":335,"width":221,"height":12}},{"id":"43d7de14-9046-44de-ac60-c5e0d3882a53","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":"51351dc3-f4db-4eab-baaf-b11dd57393d2","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":"8144e614-4b6c-489f-8f79-7f2b2114d72c","block_type":"box","text":"e.g.","page_number":165,"box":{"x":760,"y":384,"width":25,"height":10}},{"id":"b3020569-7b67-4663-a6d5-499bb6ea84dc","block_type":"box","text":", an","page_number":165,"box":{"x":788,"y":384,"width":32,"height":9}},{"id":"3cfce74b-36d5-4a7f-885e-64f1efdea5db","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":"998add6b-e720-4b78-a567-3339adb62d93","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":"758effb7-781b-4a8a-9491-c8e2adeb82b4","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":"65f359bd-93f5-4d3e-a062-b43b9dd4454c","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":"ef517961-c00e-4c65-ac4e-11c26e9e9559","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":"f7f9cd11-c4a9-4c42-825a-ee1e62ee11c8","block_type":"box","text":"the same attributes as the swap (","page_number":165,"box":{"x":116,"y":475,"width":247,"height":12}},{"id":"b070213f-b902-4415-9f1e-89a462ef22c5","block_type":"box","text":"e.g.","page_number":165,"box":{"x":365,"y":477,"width":25,"height":10}},{"id":"3ce5ed30-58de-48c7-8ab6-be2713490c8c","block_type":"box","text":", coupon, maturity, call feature).","page_number":165,"box":{"x":393,"y":475,"width":240,"height":12}},{"id":"97f63dc0-1519-472a-b4a2-d1a120adb9bb","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":"33929719-51f2-4b20-ab3c-57e5bfdbbf28","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":"85e5fcab-8a8f-4f4e-9cd8-bcd1cc11db97","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":"0f8a9b04-5a8d-4c26-9fca-fb5764cdf1ae","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":"7f74196a-16d3-48f3-88e7-dc0e674c0394","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":"28022c85-1052-4383-95c5-b2139fba741f","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":"e367184c-d5ec-4edb-bf6b-58075e47861d","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":"01dc8f20-37ce-4dc7-af14-b593166b8d16","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":"596bd019-415f-4770-bf82-f93298126766","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":"bb72f047-1225-4b70-95c2-cef16230e30d","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":"24260b6a-506f-4708-b530-55b43103b03a","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":"729896bb-7448-4955-b39c-6194e49e1e9b","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":"fb95d28c-2611-4a13-898d-5d3c6dfb0ccf","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":"d84b9d20-c77c-42f8-8230-fa4b379d101b","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":"0e1edf76-931e-4047-8cb8-7427de9bc151","block_type":"box","text":"notional amount of the contract.","page_number":165,"box":{"x":117,"y":723,"width":233,"height":9}},{"id":"21d099d6-bc31-4ee9-95f2-ab61654cb7c1","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":"ff1c9cec-2340-44dd-8cd7-2f75091fd6ba","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":"fc248c84-ba25-4572-af1b-81d1d962c894","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":"64716d7e-d872-4201-8dfe-25ab648b4525","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":"4b1571fc-9673-493f-9ae6-fe24a55e510a","block_type":"box","text":"Insured Municipal Bonds.","page_number":165,"box":{"x":117,"y":816,"width":186,"height":12}},{"id":"b263653e-d8be-428b-990a-fe25514a632f","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":"0df92696-d193-42d3-8346-fc14c73299a2","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":"91e02bbb-ece1-4f40-aedb-372fe2c8bf74","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":"88f566af-8e39-44b8-92a8-71583211e11a","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":"2e1f19c2-d286-433a-b776-51fa2fbfb4ea","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":"e1585b13-2dd8-43d6-b2f6-d521360dbff5","block_type":"box","text":"II-79","page_number":165,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"bd7bf83a-828c-4784-87d7-d251a86677d8","block_type":"box","text":"NM1026U-6049097-165/259","page_number":165,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"511eedf5-7563-476a-9d67-13c26e880439","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":"9cab7d7d-a6ef-4868-af11-b3c1c6b8790f","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":"feff8fff-9abb-4981-9a31-adcd95e2d7d6","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":"d3c14891-c74b-4397-9151-6fc15cecde60","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":"80970f2e-dfd6-43a2-929a-b3ea620a9915","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":"39fbb459-81bc-414f-afef-986b300ec8a0","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":"76955396-0cdb-4a26-a889-01cc99d380f4","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":"29a90cfd-e365-45da-a82f-d2a7dd60c4a1","block_type":"box","text":"Build America Bonds.","page_number":166,"box":{"x":116,"y":211,"width":159,"height":10}},{"id":"816761ee-d76b-4b14-9272-0320adb1b94e","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":"b4eb7311-2f8c-42ab-84cd-8fe3b491656d","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":"be5878c0-f03f-4491-b012-941bfe4bcb1b","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":"ec186917-01cd-4a8d-aa43-61c5380deba4","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":"cd421d37-d208-47c4-8f92-e2b2ffd8b733","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":"d911d981-36aa-4274-b060-0a293e7be351","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":"9a043aba-42ac-43a0-9193-03c741a3000c","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":"409f4563-b80f-474f-ae23-1012417dbe1a","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":"e4ee2ff7-89fa-4067-82c0-c4b078c4e6af","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":"f3e305be-bc52-463f-ad77-112e8aec1c93","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":"d3a462f1-a326-4999-a92d-e08f859c16ab","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":"76165399-f8eb-40d6-8619-5763f59d2ee7","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":"f6105db8-be76-40cc-ab6c-6f0b7be169a0","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":"5935d5af-150b-4323-b9e5-c67b7c375752","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":"84e0e1da-992e-4adb-ae64-2c80bf566d33","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":"37a8c2b4-294b-48c2-8493-b7249d91abb4","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":"6f718e0e-5134-41cc-b8fb-d0248d823b01","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":166,"box":{"x":118,"y":475,"width":263,"height":12}},{"id":"65142311-ca4a-42e6-977c-65ac739b17a8","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":"ce735ee2-78b8-42a7-8d96-9719f9e33347","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":"d8983304-1b10-4871-9495-a231967e486f","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":"914fd76d-e6ef-4d00-88da-4a399e604056","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":"e6a7daee-bb58-4cc7-a438-7792255cc4e6","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":"3c0b0494-7577-4fee-aeeb-6e2773306c64","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":"522a1e62-18ac-4a5b-98d2-beb351be1036","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":"f42a15f3-19f7-4363-80db-ef79fffe492c","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":"4ff6225b-d5a1-42d4-91a0-d67d85fa87c8","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":"ba8272ac-aebf-4ad3-b82b-ff643b072c99","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":"4c5ffd33-9f3a-4aaf-948b-72fc755060a1","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":"af123c88-b1d6-4316-bbe4-43e3c9d96cb3","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":"8b59de9f-a104-4058-be8c-6e3981b8c92b","block_type":"box","text":"e.g.","page_number":166,"box":{"x":557,"y":663,"width":26,"height":10}},{"id":"421324d2-9aad-4afe-b193-1ee6cbbb4c33","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":"7403c3b5-5fec-4d8c-be3a-6f3e55d3a81f","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":"f18f4c3d-5e22-4174-aea4-45fa0d685b48","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":"6827c472-b818-4779-90aa-63c2057e5cb4","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":"e3772626-6778-4e68-9c15-d32ba70752b1","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":"67c15d20-599c-4750-a267-7b6597f8b899","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":"c3e28054-67c4-4de3-92cf-88ab52a56f05","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":"966b99ba-91a3-4819-ab41-39b0ee4dbe42","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":"e5996077-b8c6-42f5-9ac9-2e678373b6dd","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":"c791faee-a92d-4097-9de9-e29f29dbdecc","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":"5d2af84e-1cba-4de4-a771-f1f84b772a8b","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":"ce7c4669-c62a-44be-97ab-b1dc6d70a516","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":"37456ea6-adb6-4eb0-8d6b-1b9ebe273b3f","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":"60cde546-9760-4f1f-9386-e3ce5c26ceb1","block_type":"box","text":"II-80","page_number":166,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"df959a9f-a1ef-44e0-b315-3ef5cef2b5e1","block_type":"box","text":"NM1026U-6049097-166/259","page_number":166,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0a6bacd7-4f43-4c21-a08d-d5f29cd305da","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":"2cabb3e9-3c44-479c-8156-b72a25ab2004","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":"1258bbbe-93c7-46c6-b5f8-0d95fe481c55","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":"776c04db-1231-42cf-bac2-5dded1d9a324","block_type":"box","text":"opinions.","page_number":167,"box":{"x":116,"y":134,"width":72,"height":11}},{"id":"ec88aeda-06a7-444c-a93e-486fe0987c1d","block_type":"box","text":"Operational and Technology Risks.","page_number":167,"box":{"x":117,"y":165,"width":279,"height":12}},{"id":"82d2dded-c0f1-4e39-81a6-4dc320765d5a","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":"90146c17-a51f-4556-99e8-206ad49f7c63","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":"7e27107d-171f-48dc-9f18-de35f39db3c0","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":"0bd87fa3-afce-4a82-a0c9-0f0a99fe28fd","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":"0aa17c63-5024-4d8c-8478-99183b476d0e","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":"47646a95-4e77-4a66-8b4b-ffb5d1975c32","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":"f240854a-cfec-4ad4-ab4e-c6ba679043b4","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":"ffa0430a-573a-47e7-aa89-93d4690311f0","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":"0a2878b3-1aec-4169-9455-bfac2b02cccc","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":"91ee2575-7888-47f5-94b6-80f601e0f6c9","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":"8cbb4240-868c-43d9-a329-4fda546aa505","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":"0d0a055a-1c53-4383-b79c-371a84ae4b92","block_type":"box","text":"operational and technology risks.","page_number":167,"box":{"x":116,"y":335,"width":250,"height":12}},{"id":"b9036142-d217-48cf-8980-1c4c2c63c477","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":"3b8bacf1-50cd-4b1c-b4dc-cc81cab2e96e","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":"3bb2f9b0-97f1-4f16-9628-27ea019c8fa5","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":"577a1287-f39a-43f8-8a23-423d9af5e7b3","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":"4ecf00eb-520a-48b0-a2a7-c7b1e0545999","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":"ddc05d26-8fec-4fc7-bea9-f061a0ae24d8","block_type":"box","text":"state backing. Cybersecurity incidents may result in any of the following: financial losses; interference","page_number":167,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"593960ef-78e9-4013-9b62-e877931dc0f1","block_type":"box","text":"with the Fund’s ability to calculate its NAV; disclosure of confidential information; impediments to","page_number":167,"box":{"x":116,"y":459,"width":721,"height":12}},{"id":"30bf4518-f710-4bab-a0cc-876b012be6bd","block_type":"box","text":"trading; submission of erroneous trades by the Fund or erroneous subscription or redemption orders;","page_number":167,"box":{"x":116,"y":475,"width":754,"height":12}},{"id":"a3efb38b-7564-4e64-9733-b86a6e66cd85","block_type":"box","text":"the inability of the Fund or its service providers to transact business; violations of applicable privacy","page_number":167,"box":{"x":116,"y":490,"width":743,"height":12}},{"id":"7f4973ec-fb14-49de-858a-be2befff7a2c","block_type":"box","text":"and other laws; regulatory fines; penalties; reputational damage; reimbursement or other compensation","page_number":167,"box":{"x":116,"y":506,"width":772,"height":12}},{"id":"6b9f9f0a-be5c-4d02-8aa7-62a435d71d09","block_type":"box","text":"costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render","page_number":167,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"f0c7d4eb-b245-41dd-8882-23c7d97a4db1","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":"24b1a4c4-d5e1-438d-ab5e-9c65ce6ab4d9","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":"4483feae-9093-4c75-a9df-67e4e2719e64","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":"54a97d2d-5ee1-436a-adc1-a5cb5ba140fe","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":"550cffd7-5e67-498e-b5f5-0c1bea6ffc27","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":"6c954f8e-c07f-4602-a957-41b86790bb95","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":"415b2a00-c830-49dd-ab74-337bf493baa3","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":"35900451-069f-4cd6-acc1-13b931155840","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":"47b1583c-1479-4389-b872-065299751e48","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":"a906b9aa-e0cd-471c-9633-ad9e160e9974","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":"b52f500f-f5e4-40a9-b52a-6e30c319d53f","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":"2698d068-3618-4f3f-9930-b1f0a8d4c875","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":"75b1e2a4-5ca4-4120-817e-08bac95b76e4","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":"6aeee003-503c-4521-b5ea-685b966c0eac","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":"304a7d07-f08d-42ac-9772-703b0b0a6ccf","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":"82827d4d-65cf-46d6-98a5-ca173ba2b55c","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":"590a7ca0-597c-48aa-8eef-197faa3b8352","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":"06636b9f-c9e6-4c5a-a391-637a84f9243c","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":"bcb7a4f4-b835-4a8f-a5e4-f8359b3adbb9","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":"a73b5151-ea9c-47a3-8332-4915723afc49","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":"9619a5a0-1d95-4f8d-a5b8-a24c19ac2213","block_type":"box","text":"II-81","page_number":167,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"bd65d05c-486e-4e53-ba45-7ab7f6119d48","block_type":"box","text":"NM1026U-6049097-167/259","page_number":167,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4d04edb1-c900-4d69-b014-684d4dfea431","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":"0c342762-bbc9-4eeb-bda3-751d2f62947b","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":"506db053-cc7a-4c3c-8b5d-a5a1dc0f692a","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":"1119717a-d261-4338-b355-758139f0fd8d","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":"ed1118b1-d082-4cae-bd30-11fe57d47b14","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":"68cf1bde-9ccb-488f-a8bf-e5722dfe597c","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":"ff883d51-18b6-41bf-8b1a-668ad28c1cd7","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":"f6f37783-63a2-49a2-85cb-00011afc364d","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":"1aaae419-7afa-40dd-b749-28517379cff9","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":"d90abbd4-1ad2-43e6-b306-d7ba09babcaa","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":"82051aab-356f-4df0-a43e-be61ed7b954d","block_type":"box","text":"Fund or its investments.","page_number":168,"box":{"x":117,"y":242,"width":182,"height":10}},{"id":"9f0857e7-7d47-4a89-a3b1-3718ce8a5196","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":"38387462-3607-4732-b1ff-da5921a19469","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":"fdce20df-8e16-4eb0-9c14-4b7e96fecdc1","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":"76da8575-0896-4d78-8a92-fbb789ac09e0","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":"25bbafe0-ba70-4884-86cd-4a86f0df7345","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":"bf97782c-f011-4896-8ecc-7f9fa5e2875f","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":"a0ba5935-b228-448a-947a-f347f2e3a884","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":"630c4e8f-dc46-4013-ab68-8e7465ef3aa4","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":"8940ee5b-0bf8-4df6-95d0-f9563f664ac3","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":"a3ded929-d1c4-4fd8-8f7d-fcd712e6feeb","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":"fc30dcb1-e0a0-4e15-93fe-e7e1c77cf7ca","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":"ab23ae39-abcf-4fc0-935a-4fbd6ce8e0f8","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":"d1a693c6-bad8-43e9-ae38-6ac8ea46dbad","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":"1ea49a1b-ff99-4593-bd85-cfa44c8d738c","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":"bda5833e-33b3-4846-b79d-87a922c9e33b","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":"1ab70497-45c4-46ae-a2c9-da3622cfc621","block_type":"box","text":"such changes.","page_number":168,"box":{"x":116,"y":506,"width":113,"height":12}},{"id":"d4337334-fe70-4f59-b2d3-ca5878245db3","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":"da1725f1-fa2b-4d7a-9f35-f8c30cc8becf","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":"ec50b401-15fd-4cdb-b02f-4bbbebc00ee1","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":"ce39488d-df64-4f17-847d-fcf96733660c","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":"9234cf6c-e578-4c29-bcc8-67e31aaad4cd","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":"e71b729e-f641-46dc-a34f-ad6d3447f4f8","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":"ad3d5f19-e838-4ba3-a15f-90afd071231e","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":"e1569b75-b45d-492d-8ad1-4c367583bc80","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":"d701f50e-5f23-4572-ad92-6eb4091d65fd","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":"adce4809-65e0-4e94-a589-8dd6c840caa9","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":"6a99b49f-4767-4324-a230-d38a490f13c3","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":"e8968e97-b0f1-440c-a63d-9a42ddd337e2","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":"4ce49f62-03d1-47cc-bce8-554059179c2f","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":"8cacb7a4-efa1-4ede-aff5-895b4c77926f","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":"eec5e98b-80db-4781-b8fe-a9509d28204b","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":"38f2470b-5b58-4404-b7ef-a2ef9f3ca5b1","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":"c7640cf8-1b26-4daf-9570-2fdba081ea02","block_type":"box","text":"Participation Notes.","page_number":168,"box":{"x":116,"y":816,"width":157,"height":12}},{"id":"5fabd4f7-bcd0-40bf-8a26-7b6a327c4738","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":"01e14ca5-c70d-4d59-90e8-dcafd7003365","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":"680c90f4-2766-41a9-822b-748fdefff813","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":"f6d63bde-7068-4cd4-bfd0-3ef4d96658d0","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":"7e9c2181-d04c-4cdd-a829-f7bbedc221ad","block_type":"box","text":"II-82","page_number":168,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"9054d88b-7319-4211-81d7-f8ec3c736227","block_type":"box","text":"NM1026U-6049097-168/259","page_number":168,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"920cc0bc-e420-4e49-b165-3e2d68914b04","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":"1d3765ec-df11-4321-8c11-d84c98d3dcab","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":"1647aeb9-6d7b-4e8f-8341-8be1094eb829","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":"24bd6f51-21e6-4db5-8fd9-1527de60bee0","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":"1fe4357a-d3e2-4bf6-a6a4-931643f210eb","block_type":"box","text":"entitlement or interest in the relevant underlying security. In other words, shares of the underlying","page_number":169,"box":{"x":116,"y":149,"width":727,"height":12}},{"id":"340eea43-5f38-46a1-a22b-c3e076740363","block_type":"box","text":"security are not in any way owned by the Fund. However, each participation note synthetically","page_number":169,"box":{"x":116,"y":165,"width":702,"height":12}},{"id":"ba5f51d7-6737-40b7-8edf-e2e09068464f","block_type":"box","text":"replicates the economic benefit of holding shares in the 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":"7db34ddd-fb48-4242-a1bd-610dad77fed1","block_type":"box","text":"determined to be creditworthy.","page_number":169,"box":{"x":116,"y":242,"width":231,"height":12}},{"id":"583d30bd-e557-4205-83e8-8fd178f51d2a","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":"b0892ce4-1a35-48e8-9395-c3d09edcd59b","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":"8d5e64bb-30b6-4060-b478-13fc2834fc7d","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":"f615826a-4fb6-4f35-b189-5d27f4318a52","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":"a664cab9-1ed2-4401-a850-d1308b04a339","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":"dbdea8a6-8ed0-4f2d-913b-611ce04871d5","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":"424d8bb0-0bbb-4712-905f-24195ebea265","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":"7435e1bb-f9d5-4974-893b-886bb7145768","block_type":"box","text":"security underlying the participation note.","page_number":169,"box":{"x":116,"y":382,"width":310,"height":12}},{"id":"8c5990f2-7161-4d49-93b0-239028e23202","block_type":"box","text":"Portfolio Turnover Rates.","page_number":169,"box":{"x":116,"y":413,"width":201,"height":9}},{"id":"96d35c2d-6d21-461b-9532-e682402a315e","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":"96031128-ab90-47cb-a578-8405986ea78f","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":"c5027c82-da1e-41a7-acba-a4ec23823ee8","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":"03c206af-d80f-4f53-99ed-44e047d22578","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":"9d0751c6-f7ad-452c-a42a-3932567e1d2f","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":"0ee5f9d3-7683-4c15-a906-8d9dba26cb2a","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":"a20dac14-e395-47a9-96a1-661e8704e406","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":"90b0d87f-ec17-40ca-b66a-a49436babcc4","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":169,"box":{"x":116,"y":521,"width":305,"height":12}},{"id":"ba09eef8-37fa-4402-b911-af9c4483196b","block_type":"box","text":"i.e.","page_number":169,"box":{"x":422,"y":521,"width":21,"height":10}},{"id":"b1a696b6-9d28-4f28-8e1f-d11607bcf009","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":"44dfe64a-6bfd-4c1a-9056-73457e53cb34","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":"2b07379c-72ea-4a7a-8495-b17aa00b741f","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":"216cd8b0-4ed6-44d4-a778-5177c9a2a6e6","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":"cec3953b-31dc-4205-9e67-d9e9f9aabd50","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":"bb8f2482-1777-41aa-8ea1-8cdb415f7bc7","block_type":"box","text":"Fund’s performance.","page_number":169,"box":{"x":117,"y":599,"width":158,"height":12}},{"id":"f776fe97-4845-4e47-805e-610790f9adf1","block_type":"box","text":"Preferred Stock.","page_number":169,"box":{"x":116,"y":630,"width":129,"height":9}},{"id":"d7171781-e10c-4d0a-969b-5048f5770408","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":"a8027fde-a58b-4c3a-a6fa-5780de66eb8f","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":"f8e13a7e-24b0-4c88-a9ac-1b26eb95a15b","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":"cbea653b-6d45-428d-9573-a0af73a60e36","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":"6ad29e0b-0749-4613-87bd-ddb8cfa237d7","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":"45bcc3b7-5c26-4818-9d4a-296144961b64","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":"d57305e7-ec12-4b88-b123-29356528e722","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":"c43d06c9-20ca-4727-9177-f151f9c77cee","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":"a2bf7c6b-f5b0-43dc-86ef-c1ff0010d0db","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":"c5b0bd34-752b-4b1e-9c10-502518bab351","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":"c6fa490e-4ecc-4fc7-8c40-851b6f9a88e8","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":"41c4a8e1-7a08-4ffa-af87-8e466af2b590","block_type":"box","text":"provisions.","page_number":169,"box":{"x":117,"y":785,"width":78,"height":12}},{"id":"0f59fa2f-33a4-47b4-9d6c-76cd39e165cd","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":169,"box":{"x":118,"y":816,"width":224,"height":12}},{"id":"a763c9da-c812-431e-b944-670ec88bc6db","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":"20a989fb-07e0-4ef6-afab-61bc3d22e1ec","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":"f17fe068-a892-4091-ba77-c292c44dc7ae","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":"a89ebaa0-2de2-49b5-8a69-1b4571c2d73f","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":"fbb1f76e-b3f4-4644-8706-149233157a57","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":"a1e20857-10c2-4379-97b9-ebf2effabc7b","block_type":"box","text":"II-83","page_number":169,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"73aa16ef-cfec-48af-97e5-e79055c71a0c","block_type":"box","text":"NM1026U-6049097-169/259","page_number":169,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8a7621a9-5f27-4c85-b26c-c0398a7345f9","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":"3553084f-192e-4084-8bf4-89998e29f735","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":"77f01c2d-9d96-4762-882a-c1c550a670d6","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":"bfeec076-4887-49ec-a404-4b8c6a8f0f5b","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":"05d61f67-b863-4f93-a41e-5a5baf94d2bd","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":"960a9ae8-ce5a-4a4f-8522-7c2141dd35ec","block_type":"box","text":"Trust Preferred Securities.","page_number":170,"box":{"x":118,"y":180,"width":193,"height":10}},{"id":"0f79e474-45c0-4e5c-a5a7-edab5f15d3a3","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":"a2a6548b-c29e-42a8-962c-3d6b1129f30a","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":"fae673f6-494f-4401-a66c-7f92b2c556fe","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":"b9783590-3fe4-44c9-bf05-037b95e079e5","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":"ed75bc6c-d6cc-4af4-9474-becccc6a5d93","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":"f66f9a86-3262-4f67-a60b-cb6dc471348a","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":"6a5c9e3c-245e-48ee-be37-beed1eb765e1","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":"8a02e933-de57-4d4e-8b53-780a922679e3","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":"efc278ec-d851-4fc2-8447-00b8e6f2c728","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":"64253bb8-5409-4c02-9412-2e45231bc650","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":"38053da1-60ba-4e3e-b97d-7e446abe6d19","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":"27f803de-6784-45eb-a04e-982ee6179d00","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":"e13edc90-3848-4a1b-b642-f5c0cbc0f2f3","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":"d436660e-e293-4db0-b3a2-86451d9c7e07","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":"d5aea0a5-5fbf-47f6-83ac-54a5e4fe27c0","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":"e27b9cd4-ca66-442a-a7d4-a155e7d4707b","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":"eb707db4-e67b-4d86-a6dd-161a22c01b16","block_type":"box","text":"®","page_number":170,"box":{"x":857,"y":443,"width":9,"height":7}},{"id":"cad1b96f-8b15-4572-92cb-5f37a91fc67c","block_type":"box","text":"”);","page_number":170,"box":{"x":867,"y":444,"width":20,"height":12}},{"id":"a90e3841-d295-407b-be23-59c6f3688be6","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":170,"box":{"x":117,"y":459,"width":322,"height":12}},{"id":"0516ba3d-f688-4436-915b-82039ba8deb3","block_type":"box","text":"®","page_number":170,"box":{"x":439,"y":458,"width":10,"height":7}},{"id":"56c871b5-be0b-4bd7-b33c-82487c7c06a7","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":170,"box":{"x":449,"y":459,"width":330,"height":12}},{"id":"46e5ac11-1571-4d6e-be0e-6173f10cc535","block_type":"box","text":"®","page_number":170,"box":{"x":780,"y":458,"width":9,"height":7}},{"id":"1ee48db2-068b-43e4-9b35-d778b8ced23d","block_type":"box","text":"” ); quarterly","page_number":170,"box":{"x":790,"y":459,"width":95,"height":12}},{"id":"aaa42790-96ce-4e48-9824-bf67f8156d77","block_type":"box","text":"income debt securities (“QUIDS","page_number":170,"box":{"x":117,"y":475,"width":234,"height":12}},{"id":"16fea89a-1885-4d78-a611-0a5bf32255f2","block_type":"box","text":"®","page_number":170,"box":{"x":352,"y":474,"width":10,"height":7}},{"id":"9dd5e45c-f63c-42d7-b2d6-51a7f24708db","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":170,"box":{"x":362,"y":475,"width":361,"height":12}},{"id":"16d61d44-3e5a-4afb-b1fb-eb6add4268d9","block_type":"box","text":"SM","page_number":170,"box":{"x":724,"y":475,"width":16,"height":6}},{"id":"9d5172da-9cc2-4a40-82ab-00730a504116","block_type":"box","text":"”); corporate trust","page_number":170,"box":{"x":741,"y":475,"width":133,"height":12}},{"id":"77354147-3b4d-474d-9282-3aadac9253bb","block_type":"box","text":"securities (“CORTS","page_number":170,"box":{"x":116,"y":490,"width":145,"height":12}},{"id":"39debd3e-6265-45d0-b4cd-ffe83b8c411f","block_type":"box","text":"®","page_number":170,"box":{"x":262,"y":489,"width":9,"height":7}},{"id":"48230107-a896-400f-af0c-c53ddd7b6f9f","block_type":"box","text":"”); public income notes (“PINES","page_number":170,"box":{"x":271,"y":490,"width":235,"height":12}},{"id":"9e2eb1cd-335a-4e6c-ad5a-03902ceaa2c4","block_type":"box","text":"®","page_number":170,"box":{"x":507,"y":489,"width":9,"height":7}},{"id":"74215780-46ec-41a8-a4e4-cb12a4293d09","block_type":"box","text":"”); and other trust preferred securities.","page_number":170,"box":{"x":517,"y":490,"width":287,"height":12}},{"id":"1d9546ce-4bc5-4d0a-96a8-a3a98bbff494","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":"2bcfabbd-c73d-4da4-b92d-d9a7772ef60d","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":"cd1382ef-d663-4b23-bf55-68c75ab96735","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":"d6c28aeb-a389-490b-a607-bc8832f3562d","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":"6c008dd9-c840-4295-9ead-e82c23727beb","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":"0ec6f0d3-0e65-4328-b428-8cbc7e40578b","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":"cff246d2-70e5-4df9-9f41-ea3f51e6cf2a","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":"59237291-b914-46d4-81e6-4fe2c01c284d","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":"b25daf0c-aff6-427b-9ccc-ff3e99e3699f","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":"656aa144-6296-400f-9f64-0281a827ed13","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":"abf6a7fa-b664-4f5e-867b-ca7c17175a24","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":"63725cc3-3c59-48e6-b6e4-ef19cdf579af","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":"1ea0c3ea-5107-4ec7-b506-bce10ae122fe","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":"6cf4f5ff-6173-4036-a110-858630cd1ab2","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":"cf4d13a5-9767-401c-8b5e-c13e89beac9d","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":"213ae902-c878-47cb-b326-751718f15f54","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":"ad4b6fca-fd52-4dce-b71e-373c44486b77","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":"98381c8b-1bc0-441a-928d-24544d87adc0","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":"8b2946b7-fdc2-48cf-9f59-b7cc660387d1","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":"7d7885af-b7f9-4b91-8088-03d63bdb8c2b","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":170,"box":{"x":116,"y":847,"width":324,"height":12}},{"id":"7bfe94cc-7b27-4406-b2d4-320060d53121","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":"c371bb4b-076e-4665-bf61-6d58e2261e8f","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":"98096cbe-73dc-4613-833e-7d389d34bc17","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":"e916b21e-d872-4218-a033-1c15ca420098","block_type":"box","text":"II-84","page_number":170,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5a77e504-4666-40a1-b9e3-9c6127390278","block_type":"box","text":"NM1026U-6049097-170/259","page_number":170,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c5714685-608e-4666-9f80-d300640bd2df","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":"86fc2c47-b403-4291-bcfe-0bd016a6b379","block_type":"box","text":"i.e.","page_number":171,"box":{"x":768,"y":87,"width":21,"height":10}},{"id":"92db10c6-717c-4730-9831-95840a437505","block_type":"box","text":", hotels,","page_number":171,"box":{"x":792,"y":87,"width":62,"height":11}},{"id":"7fa22647-8dd5-42fc-9e55-fb97864c6f49","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":171,"box":{"x":116,"y":102,"width":441,"height":13}},{"id":"03fbcc6b-ecb5-403e-aa76-f8dfbf8d0e44","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":"88107106-e666-426d-9b10-90c8164db8d3","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":"c259ec0b-ca41-4b75-be57-5a1fb1be0aa9","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":"126798dd-7bc2-4c3e-98a5-bc1158c9c76a","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":"3373913d-2f39-42eb-92df-213564c9e6dd","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":"541eb5be-4763-4a12-8080-ab832b63ead0","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":"01d35234-3e5f-4091-be9f-66586635354c","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":"743f7613-a8c5-46fd-925c-c208ab6c44b4","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":"f73229a7-f94e-41a8-8fe4-d734c1722045","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":"44b97892-9543-4aff-bbd7-d675747589a1","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":"320da5fa-58bf-4a3a-bbb2-47eb3e4c8a7a","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":"36dc2698-b1ee-4782-be16-c5a9b785123e","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":"995199f3-2b2b-430d-a5f9-f949d74cd799","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":"e404e6e4-7f63-4428-9b6b-a047b447362d","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":"432c0f90-57ec-4857-83ed-3faeabc99682","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":"b8016c8b-1658-47ab-874f-02705b700bdb","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":"51176d0d-9678-4e0c-be9d-ebd16bd28c22","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":"64c6302d-e4db-4455-b491-788e241e614f","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":"305a97c1-cf25-4e63-8858-f4c2739b1421","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":"b4d0192f-b8e9-4703-ad2f-11f453b2b342","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":"9c8264a8-0b48-453c-93c8-8501ccfef4ef","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":"f4d2f099-5230-4cd3-90ce-adfddad16b73","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":"943c5b4f-8e91-4ea2-9414-86b851217238","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":"152a201a-99b7-4993-b47e-b508f7698456","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":"898ce2c2-a0d1-4a79-b209-4def28e3b4dc","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":"b8e4ebee-07f9-4602-a9e7-4dfbdb811b9e","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":"13d8f0c1-0f07-4c91-9b57-baf702069dc1","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":"fcea0c91-c632-42f7-ac5f-72315dae366e","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":"dc422e5e-5427-4b9f-80c3-0ad22db68ce1","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":"e64d5958-6d17-4d57-b237-01e62954d3c9","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":"841da9ea-4ba2-467a-9660-e2b612149058","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":"74a8c650-2e2a-4f31-8bf5-63d11710a1e7","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":"66d56ad1-0673-4d9b-89ef-25c4021c5325","block_type":"box","text":"applicable holding period requirements.","page_number":171,"box":{"x":116,"y":661,"width":292,"height":12}},{"id":"e3dcb6f8-d7e3-471b-ae1f-223fef12912b","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":"08f3f3a6-8e76-4da1-8e74-c7925ebb1ed7","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":"a66c5b1f-124a-4c47-9583-430d2bdd238a","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":"4be3f1d7-bed3-44b8-8177-497a0cb07cb0","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":"70e78a53-5b13-40a7-b976-d7ca2044e7c7","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":"f1fa8bad-80ae-452b-bdc8-8dc94cd8a3f4","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":"cf845949-bb76-46fa-8c1f-4cda934dccc8","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":"f2c7d5a2-e6c4-4e42-ac05-f34f9d233e3b","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":"5de63db1-5387-4d5c-ad06-57f805d36e6f","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":"f10597a6-c8db-4e16-95a8-221a167ebbc5","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":"3f689f46-8163-4510-9933-15e97c41b075","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":"803bd44e-82c0-40d1-906e-c7efa01695b7","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":"8e739c73-cb2a-41a9-a161-0449986dbe4c","block_type":"box","text":"II-85","page_number":171,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"23cdba7c-4f1f-4e6b-922b-69ce656c7f7b","block_type":"box","text":"NM1026U-6049097-171/259","page_number":171,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5b403046-048f-44ee-921f-dd39e2f713b0","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":"ef0be35b-cb7c-46b3-a716-30c56b304b87","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":"c153becc-9d5a-45f9-b440-961013c4326c","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":"b62a9400-c331-4358-994a-6ffb253e66f7","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":"c17e5af7-c225-4e12-9250-9ce626a062aa","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":"cfd67e93-2c6b-4306-90a7-cf9f56217098","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":172,"box":{"x":116,"y":180,"width":293,"height":10}},{"id":"6e8ade11-47ed-4d5b-aa71-ceb3a0298e47","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":"9241c155-ac3b-4696-a726-6ce1285b7b28","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":"e5cdc22d-6b52-4bf1-9635-751b5f4b5ee1","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":"cbe56ca3-bac9-4cb1-951f-3922d8f5b508","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":"b5db3192-02ce-4eb6-984a-a2d844c8ae2b","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":"055464f1-28c4-48e7-91a5-a2ec11340d4e","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":"ff523660-c43e-49c9-91cc-6e99bb377d2d","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":"37a0835d-1853-4a55-b5e6-805fd2b0586e","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":"f6e4e31f-b5cd-41bd-b102-660449131e16","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":"e2532f86-f08d-479c-93d3-d3364d2935f8","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":"69cbb8e8-931a-458e-beac-26ae82a66729","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":"c1fffc14-a88e-42c2-8acd-228f4ecd40a6","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":"d4e5a12d-6b28-4ec1-a093-ef6d6221bc21","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":"8575fb63-7867-40ec-81de-86416a6a0932","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":"beae2b52-7d53-49c5-a0c5-7745b6a15778","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":"bb238536-b79c-4533-a5d4-0a87dbe582da","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":"2cd2fa28-90f7-47d8-be4d-0cc6fb863dbf","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":"13379f26-b84e-49c8-acb6-f476cc3e341f","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":"4fcb3cde-5d95-4ceb-bf9f-a6dbd5550fab","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":"95615376-ea35-40af-9d69-bdea983d3bf6","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":"0f028c84-0567-4884-a685-19575884fd2a","block_type":"box","text":"rapid changes in market conditions.","page_number":172,"box":{"x":117,"y":475,"width":268,"height":12}},{"id":"66c4eb0e-0b1b-4880-9293-dda6fac2930a","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":"1c45483d-ca13-4c70-93bf-53f90ea762b6","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":172,"box":{"x":477,"y":506,"width":381,"height":11}},{"id":"8b4b6c52-6cfa-425b-b135-d2189f0ff25f","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":"f69efe7c-c791-4bec-b8ad-af709e2db8e5","block_type":"box","text":"ccur. Some countries, including the United States,","page_number":172,"box":{"x":482,"y":521,"width":368,"height":12}},{"id":"4e03f6d2-8c2b-43ed-b5f0-bf718a44de6d","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":"42e95921-4c53-4e50-8b82-4c8b794bb6c3","block_type":"box","text":"protectionist trade policies, a move away from","page_number":172,"box":{"x":539,"y":537,"width":344,"height":12}},{"id":"8382b5b2-524f-4d47-a36d-cc799ad2aa3d","block_type":"box","text":"the tighter financial industry regulations that follow","page_number":172,"box":{"x":116,"y":552,"width":363,"height":12}},{"id":"f1817062-f3d1-4cab-81b2-d098e6de6f0c","block_type":"box","text":"ed the financial crisis of","page_number":172,"box":{"x":480,"y":552,"width":174,"height":10}},{"id":"5f9e0fb3-ccd3-499f-825b-a1651a2f68ff","block_type":"box","text":"2008, and/or substantially","page_number":172,"box":{"x":654,"y":552,"width":192,"height":12}},{"id":"f9fd24a2-67c6-4e23-abaf-417b8d7945e0","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":"8d426f34-2ee9-44fd-a59e-3b4c74cbe39e","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":"5bb502bf-d375-4503-84f9-082f0c1426eb","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":"3c7b26c8-2a64-417f-aa8a-2fdd8c1ab3a7","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":172,"box":{"x":498,"y":583,"width":367,"height":12}},{"id":"3e6ae159-43bb-4504-b089-739e52ba027d","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":"17f88328-3389-4abf-9abf-bbf99539f0ca","block_type":"box","text":"protectionist trade policies, and the possibility of","page_number":172,"box":{"x":501,"y":599,"width":357,"height":12}},{"id":"e7629d78-964c-4c4f-a507-9dedc36bf8c0","block_type":"box","text":"changes to some international trade agreements, coul","page_number":172,"box":{"x":116,"y":614,"width":392,"height":12}},{"id":"d04d26d7-c580-4529-80b1-9992c2f249c0","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":"e1f37bd0-5224-48f3-9fef-db7c1a5f0b4a","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":"bd1d1e76-5d38-47c5-bcc6-3320771d1728","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":"60943b18-1e78-4524-abcd-f349faf6a130","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":"0c36a83a-a2d1-4e1c-ad17-be34dff00a60","block_type":"box","text":"negative effect on the U.S. and global economies. 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The impact of this coronavirus, and other","page_number":173,"box":{"x":116,"y":285,"width":727,"height":13}},{"id":"2dc768b8-4ca7-478d-badf-5d4b13d2f093","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":"4694c082-663b-4940-9055-b1e48aa6f466","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":"57d26055-ddf7-4926-9791-8cb02a73237c","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":"b725c528-052e-4345-9f26-340fd0054c59","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":"ee9f6939-b65e-4511-b223-4626b7bbe3b5","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":"cab8d0d2-691a-480c-8377-78e1b3ec0ee3","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":"432506c0-98b5-4c9d-a045-1e8b7f3944df","block_type":"box","text":"Legal and Regulatory Risks.","page_number":173,"box":{"x":116,"y":407,"width":208,"height":11}},{"id":"f7518374-ebc4-4a94-8ac8-da9f32e39aa9","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":"b6950b02-00e4-437c-9e5e-3a380d1f8505","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":"1ed7b05d-f3eb-4c2c-996c-84b31fede45e","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":"2af155bb-c7aa-4852-b8b5-3908908fdffc","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":"db165221-ee41-42ee-8efa-a51dac2f03a2","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":"56bced88-5a9f-4f14-b2cf-b7f4cccd926c","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":"26404aea-8b0a-4afe-9923-582c576939ff","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":"da46390f-9379-41b2-9851-8416f27fd9d7","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":"e212ccc5-a998-42bb-a711-d269bbf65de7","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":"e9cad33f-6358-4d89-9e60-3cdea918d734","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":"f856ade0-1371-4684-8584-75c328237497","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":"e1ea62b4-33a2-4537-8f9e-92ed00ef12e2","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":173,"box":{"x":118,"y":589,"width":213,"height":12}},{"id":"54507a64-b22f-4ba0-b81d-74918ae57314","block_type":"box","text":".","page_number":173,"box":{"x":331,"y":597,"width":9,"height":2}},{"id":"4f44e12c-81c6-4d8a-b810-e4ceaad250cd","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":"ba24b7a2-3ba1-4163-9680-c180361e7fee","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":"615fa883-113d-4cad-bb27-2cf7a1e274f0","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":"fc03bb9e-bb1d-4054-a758-49f157cb38a1","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":"f00a9248-be19-41d2-8867-7d832fac57a8","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":"5b97f879-1a73-4eec-a273-41bbec64dbc4","block_type":"box","text":"II-87","page_number":173,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dced8f57-b74f-4ac5-a41f-b2ad4d691266","block_type":"box","text":"NM1026U-6049097-173/259","page_number":173,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9857031c-c5b1-4fa3-b8b3-7b9341b5d639","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":"a9782728-9b30-4ae0-8d44-c55591c80ad4","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":"f54b9970-e64f-4be9-a824-bdc3d1e404d9","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":"ad428a3e-6b6f-41e6-bd8e-4bdc6d51a35c","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":"76e80f2d-e704-4ede-bda0-4473ee5cde74","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":"fd0b97b1-c203-443e-9c98-25e3ea14bef1","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":174,"box":{"x":116,"y":180,"width":275,"height":12}},{"id":"58b6769f-a4ec-40ba-b2f5-471e5343131c","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":"b6820b3a-5e61-4f41-b3c0-9690cf106913","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":"288f0d89-814e-41f6-97b1-b06cc27eb1f6","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":"e1b07860-fd10-4d04-a098-4b64662d8fc5","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":"a8bc5ec6-96c6-44f2-902a-4706d9391aa7","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":"cae8ed2f-e253-449c-b16c-65951ee08ea3","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":"3ac46e42-bd47-4fe4-b90d-2cf3e134486c","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":"72516d7a-b048-4826-a7b0-552e77b5e848","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":"36b22452-6091-449a-bca7-39e84228fe12","block_type":"box","text":"asset value.","page_number":174,"box":{"x":116,"y":304,"width":94,"height":10}},{"id":"7578626c-92da-4776-9263-ca44044787e3","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":"3589fcf0-66fd-4b87-b1c3-1f9e98cf69c8","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":"664124da-95fa-42da-a7c6-40ea80e2df96","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":"8c3e4357-75c1-4c04-91d9-5245d2faad67","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":"d6635205-f926-4fa4-891b-39fc3f3c97dc","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":"a1bfeaba-425e-4515-aa8d-fb4522f1f10f","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":"65bcb7fc-427d-4d42-b02e-f6aaa7f2023c","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":"b8977616-9a29-4d8a-8c6e-12ad3b1df3a2","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":"b5b470e0-4001-42bd-9208-0cab29556d86","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":"c6e5e9ab-62a2-4d5b-bcda-c7b0ff6f5488","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":"ad596b40-5b04-4085-b686-6c892a8586a6","block_type":"box","text":"(","page_number":174,"box":{"x":117,"y":490,"width":4,"height":12}},{"id":"765e2650-5e0e-4050-a0d1-a360fe3653ed","block_type":"box","text":"e.g.","page_number":174,"box":{"x":122,"y":493,"width":26,"height":9}},{"id":"388e826c-7545-48c9-ac74-48ae7c8d45ab","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":"ce9f148f-80b7-4662-82fd-0c0de958213c","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":"084d302a-0f77-41e2-84f6-fe69e6e807c9","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":"f25d9e3f-8a3b-41fb-a31a-490f85ee65a0","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":"d4549072-026b-4a6c-8082-21a1fa4f5dcc","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":"33fe64ff-7820-48cc-ae40-84125ce78e8e","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":"11517e7f-9460-42a8-994c-2dfe08e33af4","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":"2ac51e0d-b44b-4bdd-abdb-16f174b1403d","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":"f848f0cb-ffcd-4adb-a55c-1a45ed545260","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":"47eb57d9-2d7e-417f-9f20-d13731664b96","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":"1a5d12e8-2d6b-4ef9-b478-ac6965f98a06","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":"d8cbfd2d-fc7c-4e63-84a1-3f28b7852f71","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":"fae369d5-21fa-4105-87ca-bf195f34704b","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":"95efcb44-e22f-4a8a-9c41-ff42e572ca97","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":"9cf37372-deb7-4ee8-b1dd-221361ab7ba2","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":"db94b36a-2413-47a9-894f-cadad0ef08f3","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":"53597220-cfc4-4d82-a11f-7ea30756c4ed","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":"bee36b11-b259-4b1d-8b65-f7e1c96bd034","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":"bcfdf671-0b55-416f-b811-69663640f4ef","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":"ca4835bd-8bda-469f-980c-330198171042","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":"a71fd6fa-c442-4d43-8717-3505a38fedc7","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":"9e57e3bb-2331-4425-9614-0ee2b3296889","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":"1a14a1f7-b043-4f09-b809-d0f3dff33282","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":"d5e6f078-8bf8-43ad-8a9b-34d897b2d9c5","block_type":"box","text":"Fund.","page_number":174,"box":{"x":117,"y":862,"width":46,"height":10}},{"id":"23e3a3fb-87d1-4ed8-a5ea-25f76044a031","block_type":"box","text":"II-88","page_number":174,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b0e046d3-c567-40b8-92e9-9ac8138dd44e","block_type":"box","text":"NM1026U-6049097-174/259","page_number":174,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"180f0dbb-dfbc-413b-86b3-8ba28ae365ce","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":"ef6936b8-589f-490f-ad12-4634a3440291","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":"9a2b98bc-ae29-49ea-b26f-733edd374e07","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":"fe076fae-e691-432a-b4d2-40f563c12110","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":"7dae8190-9659-4575-9dde-4e4f6d816bf5","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":"6a8376c4-5762-4b5b-95de-1f77feaa89d5","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":"4654fdcc-c545-4ea3-b41f-d8a20f830236","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":"cc40bdf6-720c-4705-bf67-6b73b76a4bef","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":"ee7bc8dd-693e-4a6a-8678-3b43f25c5737","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":"9aa65464-d243-40bf-bb50-e298ad547c86","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":"7d868a95-9b13-44e3-9ee4-44c574cae3cf","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":"d6e00248-3941-4c54-99ca-b7171e88a59e","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":"9c9009e2-0258-4f45-966f-08cd0a11b37c","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":"4c3fdf4b-cbea-499a-a24a-362e74f0d6b1","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":175,"box":{"x":116,"y":304,"width":479,"height":12}},{"id":"fd128274-24fa-454d-92ce-9d8f38cc5790","block_type":"box","text":"Under repurchase agreements and","page_number":175,"box":{"x":597,"y":304,"width":264,"height":12}},{"id":"45e78ccd-48fe-4d9e-9c63-2eeef5289a9a","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":"4941c546-f14f-4e4d-84b2-4dd0af1b24ab","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":"c8dbc0bf-4c03-467b-b4e4-d7381fc45b07","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":"0a35d357-fe6e-4dbe-853f-8a794c89a0fe","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":"c7536f47-3816-4c62-acfd-a775af0ef844","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":"bddd0e18-babe-40bc-ae95-87ae7eb81bf1","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":"5b750d23-4153-4080-be3e-af928ccbb2ea","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":"e449fba3-694b-4325-8459-0cf43e69f26e","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":"f271bf83-ff1d-4363-b55d-d1d8a2d4dff7","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":"9ad3e8c3-b439-42be-96e2-95405abec176","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":"6400861d-6b8f-4fb6-802a-ef023ce3ae42","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":"d23d8c73-6907-4f3d-adac-707c6b0a69bc","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":"037a1875-dd93-4c14-98bc-cf1ea8af8418","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":"cd156e87-4322-4e09-b0ea-4b5957eaf3a0","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":"b690d09b-88aa-4db2-994b-0d26a03d37da","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":"7a3de141-cee1-4a8e-92a1-3227c5128440","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":"d5f0e3c4-57d2-4623-b388-84c80b5122d9","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":"347d3189-64b9-44a7-bec7-e0171a4454a3","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":"57ef1699-7923-4874-9b95-5f151111f7b6","block_type":"box","text":"market fluctuations following the default.","page_number":175,"box":{"x":117,"y":630,"width":303,"height":12}},{"id":"12ff3dc3-873d-4a7a-875f-c261002e840c","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":"cd022ee3-2005-434a-915d-b878db885fd0","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":"d021595d-fa97-4321-beb8-eccc96da20dc","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":"f0157402-954c-4cee-b8fa-e02d4a370edc","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":"3ce47125-49a6-4102-a194-895519633e10","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":"53039c18-e5c9-4118-b612-47e914edec25","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":"89fdf537-5e10-4549-9ccf-97940c74a085","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":"ab4d0f0a-5019-45e5-a63c-fc9a9e3865d9","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":"3306a0f1-4405-4cd6-9d5e-97795621befc","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":"f6c1ff82-6d5d-4ba6-9dbd-ced42d67c1b0","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":"05a645ca-2b33-42b4-b7e2-d8b1a47cf9b5","block_type":"box","text":"system or by another authorized securities depository.","page_number":175,"box":{"x":116,"y":816,"width":397,"height":12}},{"id":"e69352aa-cabc-4fe6-9dcd-b45c1afa6db5","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":"12bc3461-08eb-44c5-9a95-9a1e64bee0c3","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":"6ceaab79-3357-4334-9a7f-55c4ee7879fd","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":"57d25021-3468-4134-ac20-cbc715cf7a6d","block_type":"box","text":"II-89","page_number":175,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"45980690-db68-42f8-8dfa-2cb9e23908bf","block_type":"box","text":"NM1026U-6049097-175/259","page_number":175,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"15c82342-0c43-4b54-8b0c-9f439417ad52","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":"7c4922c3-1722-4f44-9ff2-13c0a859e13d","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":"3faa1149-7190-435a-8287-14ff8e2a0a61","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":"afbf2060-55d4-4a51-b377-a2bd700ffec3","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":"3494d456-d64d-4a50-99b4-4940a8902791","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":"d9a011ca-13a6-4066-9201-08a8a084ab2e","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":"aeb61e62-0bfb-4f4e-843d-87fc10a35817","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":"1c8fe6ed-e26f-4216-adf8-baf3131b1fe1","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":"cc24667f-60b2-4f47-a39a-6f5c82b57b7d","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":"ab55a029-7340-47a0-88b8-9999fbbb7615","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":"8e03eb0a-e80f-4d05-9342-1bf10939dfea","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":"dd25c9b6-72d4-44b6-a5b3-627c10fb28d7","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":"0ecc1508-4cf1-448b-a077-26ef1832d0c3","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":"e3810ab7-679d-4803-95d9-8d4e48289ecf","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":"45588fb0-449d-49aa-9f8d-f2d8aae0361a","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":"a6958fb6-c632-4542-ba56-63a9634e630b","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":"35b5ad73-b4fc-46a5-a987-62122f98da47","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":"89e61413-2128-4c3d-9850-193a9affb117","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":"bb1c6366-dfb6-42a8-8777-2dda7cc425d3","block_type":"box","text":"counterparty (","page_number":176,"box":{"x":116,"y":397,"width":103,"height":12}},{"id":"a632887f-ce47-43af-9ed7-0c0b980bf220","block_type":"box","text":"i.e.","page_number":176,"box":{"x":220,"y":397,"width":20,"height":10}},{"id":"dfafbbcc-dbc0-4607-95ea-bf5eaf8717a7","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":"a73d2a2d-bb6c-4f59-ba39-9fdde8f17e89","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":"3a30c641-0b32-471c-8f9a-34be5130284e","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":"5bd3eeae-d107-4eab-a75a-4e4e8d13fc17","block_type":"box","text":"principal and income involved in the transaction.","page_number":176,"box":{"x":117,"y":444,"width":361,"height":12}},{"id":"ae87debb-37fd-407e-b99e-80dcf8adf9f3","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":"4b62193e-603d-4282-92b5-c56b865af61f","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":"38e956c5-9504-4e72-b0a1-a81da9f7acf7","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":"c15c20e5-fd62-4ee2-8012-181df6513141","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":"0359d5f3-fc45-4b51-84ea-fbd00cf66baa","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":"b6951faa-d931-4c2e-aba3-0a8bea01fbc4","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":"afa3ab0c-e6ba-4f20-90fd-14fb93a8159d","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":"7d604b3c-c9dd-4cef-a4bd-c4a7f8f7b36a","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":"6d6c208b-bf12-4513-8720-f972ff2d4c4f","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":"8b158be6-29c6-487e-b2e4-33c6bfe1571e","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":"dad5012f-cdd2-4c93-a7fe-9121bcb82a56","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":"117e256d-dc44-475e-8ebb-6ea589e67ed6","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":"75c28aae-c5eb-4271-91d1-a7937f872bd4","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":"1e66f8f8-9e4d-4d0a-801a-801b07213d45","block_type":"box","text":"Restricted Securities.","page_number":176,"box":{"x":116,"y":692,"width":171,"height":9}},{"id":"a77d08aa-7907-42cf-820d-a4f16e7a20bb","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":"010a20f0-6de9-4c88-82ea-be5fe1bf4970","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":"ceff3966-4c53-4ad3-bfee-7f8896b45fb4","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":"a7f9935b-bc55-4aa0-bf92-bfa8b2838111","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":"d4913b8d-1fa7-4fe7-a1a5-a7ff7a6421bc","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":"cfd7b732-f812-4129-aea4-8381adc04c49","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":"7db6c6fb-25bd-40f8-9bc4-d3d5990e1772","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":"efe624ba-f1d1-4edb-a409-8d292141297d","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":"5210abdf-0c70-4198-a1a1-69fc3b98a367","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":"18ef0bf7-99fa-48a7-a86e-2c1628728daa","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":"cc2f9f44-30b2-4093-942c-e1ccb5e42c3d","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":"fa1bd654-3f37-4c23-a99e-c8de84e2636e","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":"8b3aa297-c2f4-4b13-881e-3f2ff6d230be","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":"511ac6da-88c4-4eba-99e2-2464411508cc","block_type":"box","text":"II-90","page_number":176,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9d39ed71-56aa-4937-9bfa-4cc2c2a4ad9f","block_type":"box","text":"NM1026U-6049097-176/259","page_number":176,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"eff4cd96-b22f-4a30-a573-bc467b3b3d7c","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":"502eb865-e050-40c4-a893-ea8d31fa451f","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":"6bed6c39-d422-4203-bb41-a0d4a986548d","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":"ed85349d-5c55-4b37-b608-486c9e368888","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":"47d34f6a-9f48-4568-a07e-4900c9456b34","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":"8121a1e0-60fe-4aff-aaaf-b3f94e95b449","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":"18179757-c505-49d8-97f8-e148356b591c","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":"3799c15a-62a8-40bc-b8a3-2955e7e3bf0e","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":"23bacf8e-0d68-4323-a0ed-0abc4748fdd7","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":"a03b4544-f738-471f-ba49-6e1b445ea867","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":"0c74dcc2-c15c-424e-b55b-95a8b7c30b88","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":"b82741d2-4dcc-4622-9ff3-4afcb19453bd","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":"0b7c434b-211f-4aa3-974a-f1fb640b027e","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":"0e656f41-b185-43f4-a004-d73703ccfef2","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":"78973797-d1a6-47bd-a06d-e4bb3a19cc19","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":"cc473442-3222-4040-8197-059147ae0664","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":"48d9ccc3-ba84-420f-a140-687721e21c23","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":"55f8a695-fc61-4b31-8833-baf1146b53b6","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":"22a8ff35-41e9-4ebd-9846-0c1823e377d9","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":"c16465ad-b2f3-4c7f-8e6b-3dd0a3a2a9b5","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":"4d55f2df-a315-4cad-808c-60957f2b2226","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":"70f19304-fadd-4d1d-8785-ef00a891c79c","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":"f2cf251d-2f5f-4f3a-89a2-d8a85a71617e","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":"f2d3454f-055f-4ca7-976a-2267ca42925f","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":"03e8672b-9c8c-49dd-88b0-47753fed84a9","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":"1e716b57-f48e-4a48-a51f-171b21575530","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":"4eb19b5b-f8cf-4d20-ab83-8e1ee2b6a0ac","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":"9ace28da-6fcf-45c4-9f24-b9e5ffb92124","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":"02b04b62-c914-4f1e-94cc-41ac9dd8a3d1","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":"3e124490-45ff-4f63-832a-6acac07b4c71","block_type":"box","text":"group.","page_number":177,"box":{"x":116,"y":539,"width":52,"height":10}},{"id":"0c680924-8ad9-439c-ba1d-92752ef750f7","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":"aaf4a891-a31a-4dc5-b351-a6ddea061633","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":"da5476e8-efc9-46e1-9f91-12edb02720d0","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":"70d68c89-ae40-452e-bde4-bcce24b59d22","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":"fb468341-4343-4d23-a0a9-52004cc9ba6e","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":"03330a6f-0ef1-4aa1-8de1-72098e5aaf00","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":"629fe45a-92e1-4036-93f6-c804e70bcc25","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":"6e3732d4-86ce-4951-a96d-d7512bf22f79","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":"8df40b44-d4af-4af5-af2c-32d34ee25472","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":"eec3b84a-bb2b-4b6e-9c08-d42a6987e692","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":"2842f600-cacf-490f-b8ac-187cff0d70a5","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":"2aac493e-1af6-41e5-af51-424239f12543","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":"d09daee4-615e-4f30-a3c9-75dfbd6ce088","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":"137239df-397e-4e7f-ba56-424fd7afab4a","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":"637ecbf8-4d24-4344-8ae4-f62c72c9889c","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":"02ee1d18-ca08-497f-86b1-17c5a598e9bf","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":"c96582ff-48be-4534-acdf-50e4eef7b539","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":"5ac36918-c6e4-4cbb-9158-a1a2e62e239b","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":"23a04394-eb01-4482-9628-a2909f398f41","block_type":"box","text":"especially as that Fund grows in size.","page_number":177,"box":{"x":116,"y":847,"width":283,"height":12}},{"id":"760a2f33-cbca-4bc0-b62e-65bd62039b7c","block_type":"box","text":"II-91","page_number":177,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"ed977fa7-52f1-4e42-88b6-a9f1f0e377c7","block_type":"box","text":"NM1026U-6049097-177/259","page_number":177,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2c4c1dee-856e-4d12-a647-6fd46f522663","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":"b28d0052-b534-4987-8b4f-1275ba3e92a2","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":"041e2a67-9104-488c-a024-d6d655060424","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":"2a41a8b6-9fe5-4b84-b077-1683229c6c73","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":"1c688148-fd94-4be3-a49d-c0e31429dcb8","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":"646f3ba7-238b-46e6-b523-d88a48e2fb86","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":"8822d8d8-12cd-485a-82c4-9e25fdea7709","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":"fa1690d0-bf7d-4d8f-9928-10c3f9fbdac9","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":"b3eede82-2f41-4943-ad63-10234ff26ee5","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":"5c62b076-a3b1-4fd4-86f2-1b6688003a2e","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":"77cb29ed-2baa-4e37-a0ab-2df1c93cf443","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":"0bb3a98b-6fa7-4e81-8b4a-ab5aeb493917","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":"f25d28af-ffca-4bc0-8258-f81e0dd72fc0","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":"72259c8f-3b89-4409-bc38-3d08cd3a6312","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":"6156782a-fc0c-4d96-9905-eef2efaaa4be","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":"ccdff6f0-860d-4202-aee8-5954b99b4a8b","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":"868adb1b-ae88-47f7-ab48-be7a1448f31f","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":"addf33cd-0cb5-4ff5-a02e-9dc58b235f3f","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":"111dc797-afd8-4d04-a463-1952d6eb8a84","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":"cc39981c-39e0-407e-92cc-55077ba770ce","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":178,"box":{"x":116,"y":394,"width":400,"height":12}},{"id":"41e5ede7-b1f3-4343-aefd-05e459b4d35e","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":178,"box":{"x":116,"y":422,"width":271,"height":12}},{"id":"a0d76944-782f-4393-81fe-6e3e1d440c14","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":"eaa1e1a7-1a5b-4bd8-871e-855564eb8770","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":"588f9aa9-8ab9-48b6-a306-5556dd58dd3b","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":"e11f4452-b001-49ea-9f97-a4e3cfb3bada","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":"6a855685-4c95-4fb5-b5bd-e5365dd00d63","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":"7cedb6f3-655e-447a-a5ba-b2d4c2b02ab3","block_type":"box","text":"interest expense of the transaction.","page_number":178,"box":{"x":117,"y":499,"width":265,"height":12}},{"id":"5247af91-364e-468f-a351-206693ea165d","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":"f31b534b-cc96-44eb-92b7-685e1bcfec14","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":"c17bfbb6-70ee-4490-ba71-0e4712f5acc9","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":"9b0a0475-cd0f-471f-8535-c7152985fa4e","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":"30e978f1-4b30-472b-b204-c055c6a19d01","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":"d23e7a27-c589-40d8-821f-ff037b51c84d","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":"671efaee-64a2-42c3-9c5f-38d9eca1c730","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":"a459b897-6482-478f-ad33-6a397e2d019c","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":"a9eb2ccb-deab-48fb-975d-82a84c57b714","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":"48e3ff29-b269-45fa-a7d4-ea65c2dadc0c","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":"2ae6771f-2171-4909-af7d-480a4ac16d6a","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":"194fdcbf-9e94-4360-b61b-05ac6a25a462","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":"06713676-9327-4e0c-8f2d-0cc4be579cc9","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":"3db1e698-c959-4ef0-8f0a-f0837819d99a","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":"ff699e3c-94f4-47a4-87e9-634defc39f35","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":"0528e977-87e4-445a-a13a-76d71e8602af","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":"98437ef6-6732-44fa-8cac-309247315b75","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":"778bfddb-17fe-4062-9cfa-ae8dea491f3d","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":"ebcff836-5243-4528-b5a4-32fd5fc03fcd","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":"5249a854-abef-4459-bca6-8f281b3f5510","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":"c6f3f53e-79dc-4d6f-a7ad-b9f4934572b5","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":"4096785d-a63c-43ff-9451-4495d8d59f5c","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":"57ea26b4-e282-4782-8f85-65b9cf566abf","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":"789bc9c2-80b2-49af-9e3f-c4f9b7a002cc","block_type":"box","text":"performance.","page_number":178,"box":{"x":117,"y":878,"width":103,"height":12}},{"id":"0f4dd925-66d1-4ebe-a495-2e11832cabf3","block_type":"box","text":"II-92","page_number":178,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"148b63df-42c8-421d-bd14-b31e6c54df62","block_type":"box","text":"NM1026U-6049097-178/259","page_number":178,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"13b8b20e-adfd-4e1f-8611-3529513d616c","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":"8a95424a-1f90-40b8-8b25-d0603dc6f967","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":"de09acf0-d18c-4bbc-9ca4-4f826cb501ca","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":"0fd7fcef-f040-4f54-a671-ffcaed9f141d","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":"035d2609-940f-458f-9a58-ea362a18a7d3","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":"425d6322-33de-48b3-8a22-17e7ea61b93c","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":"901ddc47-c063-4d16-9e7e-4cba47252464","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":"eb47a983-e074-4265-a490-ffbdadc18921","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":"fd744eed-da1c-46f8-9b74-bf888312b7ed","block_type":"box","text":"received under such agreements.","page_number":179,"box":{"x":117,"y":211,"width":253,"height":12}},{"id":"bd0e8c04-9c21-4aea-bc2b-6bde5231486e","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":179,"box":{"x":116,"y":242,"width":349,"height":12}},{"id":"4641e5e2-6b1c-4ca9-a37f-05e2d645b63b","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":"4a4df22f-84d0-4b30-bf1a-222f75f87286","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":"412ff40c-610f-4078-9a28-d90d7b6b6dfc","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":"82b60e16-5a90-4693-9b52-ce4a9f904c95","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":"1e9ffcc9-b4c7-4bc0-acc4-3201bbe3081d","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":"89cccf83-6227-4679-8731-641f31ac2eef","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":"fd583826-a674-4cf9-91ff-c0a049021b21","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":"4bbc07a7-7cd8-43a0-a4a0-e0a419f5a08a","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":"b0cee8ce-231c-4bd4-bf4e-fb6ecc9f2cf0","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":"cf5e0d78-0221-400e-963f-c5062963c31c","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":"81e4ae53-4d1e-43c8-a3c0-5d1ad2e62c42","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":"454189c9-9c66-4a5e-90d6-2f1e76cde755","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":"e18823fc-87a2-4dcf-a07e-fa4df896acf7","block_type":"box","text":"equity-based investments.","page_number":179,"box":{"x":116,"y":428,"width":200,"height":12}},{"id":"b3b0f3e4-0a25-4c26-a081-bfa4aff95df7","block_type":"box","text":"Rule 144A Securities.","page_number":179,"box":{"x":116,"y":459,"width":170,"height":10}},{"id":"a98bfa58-8d87-4402-815a-536e8740b021","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":"aeb0ae66-f9a3-4897-a7ab-6a7739ea76ea","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":"b6827bff-1346-4eff-9653-d31363337239","block_type":"box","text":"Securities Lending.","page_number":179,"box":{"x":117,"y":506,"width":153,"height":12}},{"id":"15d9d6f2-da55-4abd-8c1a-a3952c2e023b","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":"02132b29-b417-4cdf-93ea-fb69ec8d76d5","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":"d66bc39c-5502-4f98-9ddd-1be8857c483f","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":"2273e00b-4cf6-4bc3-9822-c0e7b33428b0","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":"b7885593-c205-49cb-bc9f-2f7c5648de19","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":"582d189e-2c32-41a9-8dee-5f70c8fd6339","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":"35f99745-60ee-4174-9385-9ded62ccdd54","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":"77c2dfad-a243-4735-af7f-a65064e039d9","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":"271f5233-747b-4bd3-9a03-ec37b9253c0c","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":"4f16c918-1ffb-4a87-9642-f9c8fb03dee3","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":"e65cb0d6-20c3-4167-97d0-ee30b8a32d6a","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":"694f0240-17b0-413e-a5cb-4838320604bc","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":"4a41a2fe-2fcf-44bb-94b7-1003951021d9","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":"25842482-f3b3-49fc-9a5e-40ec7f2effce","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":"1d3149ed-4843-4607-9cbe-8f81498d6c0a","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":"143d5885-813a-4357-9ffe-e88151f6b342","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":"28a71b35-3a33-44dd-8515-a9ebfec02656","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":"f4ededf7-2fa1-4129-84b3-23261c384891","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":"d3faba68-aa71-4205-863d-8416d5383423","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":"f4e08e37-82b6-40c8-8f73-ee52c9e387e7","block_type":"box","text":"i.e.","page_number":179,"box":{"x":706,"y":800,"width":21,"height":10}},{"id":"3769686f-f519-4f3c-babd-f71fb1410f28","block_type":"box","text":", the risk of losses","page_number":179,"box":{"x":730,"y":800,"width":132,"height":11}},{"id":"f5e8983e-1555-4ff9-8232-0d579c7acc47","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":"af58382b-b105-4ef2-a4c9-4e1f8e2e9dde","block_type":"box","text":"i.e.","page_number":179,"box":{"x":698,"y":816,"width":21,"height":9}},{"id":"9b637090-02c1-49bc-98d5-0bc89b4d213d","block_type":"box","text":", the risk of a","page_number":179,"box":{"x":722,"y":816,"width":94,"height":11}},{"id":"03c64a95-a1f6-4acd-8590-d344976e1c84","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":"19fe4a8e-bca2-4602-8989-12796a7a2c91","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":179,"box":{"x":117,"y":847,"width":296,"height":12}},{"id":"51822452-038f-4e0d-9e2e-49ccc2bdf21f","block_type":"box","text":"i.e.","page_number":179,"box":{"x":414,"y":847,"width":20,"height":9}},{"id":"a93a8485-c10b-4533-a3d5-59a0719d7e3f","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":"2e93d74c-65a1-471e-85d2-d99de1fdb939","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":"9c2dc529-d022-4fa2-926d-78eb63b712a2","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":"de36d168-ce5c-4b54-9189-a6c07d76e468","block_type":"box","text":"II-93","page_number":179,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"57ea1b90-4fe4-49f3-87e6-c22d756aff36","block_type":"box","text":"NM1026U-6049097-179/259","page_number":179,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fec37093-3ae5-4626-bdd6-d561e30c22fa","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":"4fa3c151-7853-410f-abad-2a0a33e22241","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":"4866048c-e52f-43eb-b1f0-43ce05a1fec3","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":"65c0b0ce-2797-43e2-8528-0bd4b8b0373c","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":"5cc6d346-5f7a-4ee1-bdd8-13807d05141d","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":"9b8368d4-9fee-4307-a3f8-c1e3fa25ada2","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":"93836d72-7341-4b15-b19a-89dc9aafcaa5","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":"a2644d40-382f-4474-bf56-71df6a3453e4","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":"95fa697f-4855-4355-aacf-b615799257d0","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":"fc9ca7ca-92bb-40af-826e-800c7d55e635","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":"73fd522f-5a44-4f6e-8d7f-7d3776a2e169","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":"1c595f27-47ee-4f83-aa1a-7d000e61a006","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":"b09f818a-f9fa-4443-bdcf-89d430900ec6","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":"7ca17c16-f226-4639-83b6-dec2e50d2267","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":"88fe0018-5ada-464e-acee-736d15fc61bd","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":"6f2445f4-4e48-4c05-93ef-05b35057f6b6","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":"c4ea4128-72b2-4969-bed6-7217d7ca29aa","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":"755697d1-589e-4e2b-b0dd-52be7ad24d96","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":"4e30d1a6-d9bd-4bdc-acca-9573bbafde66","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":"9d719895-b712-497b-aba0-b93ab3da8a60","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":"67168596-8261-4910-a5f8-901e2552eeaf","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":"8c933692-16cb-41b0-9321-6fc06a09b10d","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":"9dc031ac-30c2-462e-b02e-45e2f181fe50","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":"6cd3b699-7271-4997-8b99-52281a291018","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":"99564bbb-6f24-4bc4-952c-09d37f907091","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":"d0024e3d-2cac-42c4-a2f4-1eb39eb810af","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":"e157e2c1-82c9-491a-b3d7-f9b215546ce3","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":"ce575808-e986-46fd-9c2d-60beb6ac5055","block_type":"box","text":"permitted by applicable law).","page_number":180,"box":{"x":117,"y":506,"width":217,"height":12}},{"id":"b194fe6f-0139-49ec-9413-be7980e6f0a6","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":"4ebc6fdb-ec38-4db1-8189-212384bc5392","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":"4a2229fc-5fd1-448f-8e86-832e0f0f7cec","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":"4577ba83-2543-43bd-8cb1-39a1af120d1f","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":"14ec8ea6-af3c-4e34-83f4-c68437af1c6e","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":"3eee7ec4-b650-43f5-85bf-d38f8c21ad39","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":"0e28e609-91ba-46eb-8199-54cb887d07d2","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":"008d74be-23cf-409d-be52-927712668dda","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":"20d0c988-3d08-475c-a43c-f2462b3fc130","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":"3e2f92a9-854f-4b93-8d17-89a62472ee8d","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":"52d2293e-db82-47fe-83c4-548803f1b573","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":"10048fa1-d787-4620-a891-18869738f4b6","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":"083fe219-2043-4f58-98ba-e8b93674eeaa","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":"3c8f4c38-7b3e-4b7a-9a6e-9c71523a515f","block_type":"box","text":"transaction","page_number":180,"box":{"x":116,"y":754,"width":81,"height":9}},{"id":"5a61e9fb-6c5c-46c6-a0d6-a511afca0b84","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":"974b889f-36b8-4961-9add-2d4b1bcbcde3","block_type":"box","text":"about securities","page_number":180,"box":{"x":116,"y":769,"width":117,"height":10}},{"id":"a1d6a6bb-0dbd-46cd-a1fd-862056b65bdf","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":"176a87dc-b57e-49cc-af4b-24261f06b556","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":"321aa3f7-6ea8-4903-b814-7b18245d442c","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":"aac191ed-7141-47de-80a9-2ba2d4596cb7","block_type":"box","text":"Short Sales.","page_number":180,"box":{"x":117,"y":831,"width":95,"height":10}},{"id":"482006c5-d96d-4c76-a1f2-d83fd82bd06f","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":"651e97de-1157-43ce-af9d-17ec0b2a8268","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":"fdc00285-400d-4bb1-bc55-56e45a4056ec","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":"ae5578ef-f871-4fd6-ae1b-e11d06135cc2","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":"9383eba9-7c03-432a-997e-105baea62ac4","block_type":"box","text":"II-94","page_number":180,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e2d3005f-c394-4434-80a8-1166e2215564","block_type":"box","text":"NM1026U-6049097-180/259","page_number":180,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"eb90015d-a025-482b-a719-ae5d9dd51f9b","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":"8887bf1a-1ba2-4bd6-bc9c-4ea258c2a5f8","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":"463f797f-9ae2-4c0d-a807-c7d3a5afb573","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":"da0b849c-d025-4be8-b070-8ad22487b556","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":"dbc4d25d-7ca1-42e2-95b7-e56441d209c0","block_type":"box","text":"securities to the lender of the securities.","page_number":181,"box":{"x":116,"y":149,"width":301,"height":10}},{"id":"9e0a6942-8369-4c14-b9ea-61c413777771","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":"ec1de172-5d69-41f9-8d00-bfa3c4122dcc","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":"a6bc9989-a5a2-4bf1-a909-8f700b9c0795","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":"bdd8390d-b273-40c8-84af-471355d1e3e7","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":"954204c9-6f09-4c63-8d6c-1460e3474476","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":"8bbf07f1-7cee-4efa-b379-57a80fa0eb48","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":"7affd843-d1ee-4cfe-a871-0104171e16af","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":"8edb42cc-b7e1-4f19-9bca-86c8b7297337","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":"4e6dd99c-5952-4786-b3c7-b47790e4829d","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":"bc1add42-371d-4f81-90ec-345b3e28c3fd","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":"1f443bfb-1eb6-47d7-8a78-e868640af328","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":"c4128568-189a-4416-b60e-f591f3f10ae2","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":"ad8ca9e3-1524-4117-906c-f0964abc84d7","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":"8352e84a-1d77-47d4-975a-20b668798302","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":"9374dd41-b6fc-4942-a8f8-9845c28c24d2","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":"1bd4f6c3-558f-4931-b879-a21f04672a85","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":"25255c19-f083-4e65-821d-0ee8b7168fbe","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":"ba8ee610-d261-4135-af23-d63a4d929c29","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":"d5d1eace-6b58-426a-bf13-bd1f7ae038ac","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":"5af3e441-1832-4020-a03c-6c0d0e3f1c19","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":"8fdb477c-a698-46de-8e18-a52b4e9c84d9","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":"86974dc5-a123-4728-abc4-b9015707072a","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":"89f32e37-726a-4e0c-9215-c6ebab02f290","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":"d3b1129d-4b77-46fe-9f9a-1632f7a4eab3","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":"f2109ce9-a5db-4a97-8f36-0a6e5c8414c0","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":"158aa962-a230-4f7a-9b18-c34df1db7bc5","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":"f2d69f08-7dbf-446a-9434-df1f32154796","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":"af8a83b5-b02f-41dc-94c7-65f2345bbec0","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":"21ac07d5-2823-4ab8-9d7b-f6c1e5d443aa","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":"4887f041-1ada-4104-b57d-c4a11ac0cfdf","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":"47914f2a-738b-4e77-8ce8-4f5fd6506da3","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":"7aad994e-d0f6-4d23-9445-fc31600793d7","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":"d66a80cc-953c-41fe-96ea-46942988eaec","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":181,"box":{"x":117,"y":754,"width":325,"height":12}},{"id":"0c2aef75-6da8-4797-93ef-b61ce54a9703","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":"0fa32f27-b218-46ba-95fd-eebbd436eb39","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":"48779bdb-4591-4568-8fa2-38f7d7631d58","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":"ca789c5a-98af-4124-b6c8-0c24a53091ec","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":"e5d27bb2-1328-42f8-ac31-9fcfa02bfe4b","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":"d6412177-8b73-4fd9-a69e-3ef921ec7cc6","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":"87ee9dff-18ee-440b-8caf-aa3ee33cdc31","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":"e26d27f6-b114-4117-a2f5-2864a7c41726","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":"3e489a4d-c413-4430-8b23-79763979d5df","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":"d0c2e75a-a5c3-4a70-99f1-097f03e800a4","block_type":"box","text":"II-95","page_number":181,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9c2e5b86-4d82-4daa-a7e1-dfb76e1c6ab6","block_type":"box","text":"NM1026U-6049097-181/259","page_number":181,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1330d0e3-c74d-4b78-afb7-1d49c4eebb6d","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":"9515a2ad-f5a7-48d4-b2c9-f9ede89fcec8","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":"981017a1-b83a-4380-a88b-fbeb8fc488bc","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":"063f9b52-8f5e-45a9-890e-0f86e13c7f32","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":"8adf6a48-141d-44be-8480-4f3a2a906a07","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":"39922c3e-f6bf-4edd-9a6c-7d3980321003","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":"b83de096-522b-4fc0-b5bb-3092d201f342","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":"a0e2e324-2f86-4921-a28e-417422cb768f","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":"0406fe29-e468-456a-947d-22bae3fb4715","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":"9fb8672a-1d7d-4e10-aec4-6d208da5edd6","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":"73a03ee8-74c7-499d-a5a9-3ec889098f35","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":"4f6bad68-b7a7-45b3-8067-753a360d9392","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":"fa03b4be-5526-4c4d-a3e2-6f395fad496c","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":"818b139c-61b4-4fff-8b89-8067e8a97478","block_type":"box","text":"Standby Commitment Agreements.","page_number":182,"box":{"x":117,"y":301,"width":278,"height":12}},{"id":"ba709b10-4eae-46ed-8f00-85319567b9a5","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":"2d66886b-293e-4f25-bc3d-fd96c0183479","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":"b47dc80b-b39f-4c27-a6ba-a0361a7066c0","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":"7fe860e9-9e6e-4934-bc9b-3b2319afdc1a","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":"1e6b15e2-db0b-4121-a136-0d8334f0fd55","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":"2303bef1-4515-415a-bd7e-6175d93a1d06","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":"2f437977-4173-4c9d-b11a-a70802ff40d3","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":"62204f44-5b63-4d06-b67c-d54d50bf1f4a","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":"308d6569-c531-4837-90a0-d07f69d7ed60","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":"678c2b0c-6733-4cc5-9c4f-4352cdf7bdfc","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":"b36f1457-8cfe-417c-ba8a-df4b03ffa4ee","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":"6d12923d-e342-4f38-a3f5-4f042afac4f8","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":"4284f17b-d3a9-4f3f-8656-776fabc87d5a","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":"3c0de10f-5dc9-4786-ad82-311600140a48","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":"5b7901c7-4016-41b1-8bd1-d5397dbdaff8","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":"513b5fa8-e156-406e-9a9d-51140af38eb9","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":"a43ba995-0102-49f6-a65b-003c8e2390e4","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":"a97b0299-e38e-47a4-808e-52063182434f","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":"45fbca2f-2d0c-471d-8e91-caeb1d2d06bf","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":"5fdf4d67-b71e-48e9-ae71-d974397829b0","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":"94f05659-a47e-46f8-8d1d-63f50a81087d","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":"adf442b0-66d3-431a-962b-5652979e3b6f","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":"63800a3b-55fe-43e3-8392-8b7e6f13b89f","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":"7b38427d-9a0e-4c98-869a-a41010b0bc80","block_type":"box","text":"Stripped Securities.","page_number":182,"box":{"x":117,"y":707,"width":156,"height":12}},{"id":"09430fa8-29af-4a2c-aabc-8858af16ad42","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":"14bec0b1-c05c-48c7-b0bd-20a391060ce4","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":"e5e55ed0-9d69-4e37-8001-02622a945d89","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":"b1f92d54-964f-449a-9f93-e4f6b14605ef","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":"bcd3cc06-4ee8-4783-9466-b2380425ff68","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":"5e169146-36da-4b56-9686-1d37f1096723","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":"8a64c519-e699-4de1-8e8c-40328f7d03c9","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":"89b9eeea-2f19-4a03-aeff-68587b3f41d4","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":"1a382923-ad82-4304-84a0-5e5e531a44b7","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":"c87b7044-a026-45be-bf0b-107474c8e7dd","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":"53f7da4c-53e7-4d0d-9daf-77cd27a39e1c","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":"0adebc24-6400-48b5-885d-c10137611b55","block_type":"box","text":"prepayment.","page_number":182,"box":{"x":117,"y":878,"width":97,"height":12}},{"id":"ee5d3f64-1a26-40f1-8c61-8615117310f9","block_type":"box","text":"II-96","page_number":182,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"23d5bc3d-986d-46d2-8954-dc98a22dc61e","block_type":"box","text":"NM1026U-6049097-182/259","page_number":182,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3dd58969-479d-4dee-8ef9-47fb584d0be1","block_type":"box","text":"Structured Notes.","page_number":183,"box":{"x":117,"y":87,"width":139,"height":10}},{"id":"978dd396-6bb6-4a64-b802-ded84b236f84","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":"a158ebae-32ce-4b5a-b19c-74f8c93a11e3","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":"a4aa3f8f-df5e-4892-a05f-edc81492175a","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":"35430224-965e-405a-8b57-2501b257e966","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":"7e1bbce0-db49-4fb4-8050-5fedfafb7b44","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":"1e52218b-becd-468a-9e46-d762bed3d453","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":"486f06db-ca55-460c-9a82-4f0ff8757498","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":"a72d95e0-842d-4fe7-ae46-c16f03bfefcb","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":"bee89671-24bb-4a1d-a91b-04ba9772fa0d","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":"689099b5-446f-4064-b8ef-9ca42c518071","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":"0047840d-f990-4cc7-81c1-a8fc3e805c73","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":"e91c22e2-11c1-45ce-bd5d-ed0192f625d6","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":"12e42fbc-877a-4d3d-b3bf-7be8a6149d00","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":"0168af1f-cd74-443c-949b-7be7b2f1b92b","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":"fb18d495-b6b0-4d13-9cf5-3673aa9fbcb8","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":"c8bae534-ee0a-413b-a588-a84c99698a9f","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":"812c8e50-b42c-4066-a891-c1de91b8df26","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":"b609876d-b6c2-4ec1-86bc-2f382575c4b4","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":"e8216a78-53ec-4d68-8073-0ec09ebc90c1","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":"514e217e-f3e3-4425-9544-baa99c78f48f","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":"b2bbcae1-ba79-44ca-b70f-095c38a6d289","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":"c6b9ed1c-2ad0-483b-abc0-952f82d82461","block_type":"box","text":"Taxability Risk.","page_number":183,"box":{"x":118,"y":459,"width":119,"height":12}},{"id":"6725f801-b000-494a-b3b9-48c9c770ec6d","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":"46c23818-0ee7-4e1b-bbf8-6a560841c692","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":"f05abbcf-2100-4e25-b316-627d845d0673","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":"b53f7983-1530-4973-87b5-7528d61a8c10","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":"c64dc239-ec64-46bc-bfc8-6139611a7021","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":"df36da11-f6c4-4822-9778-334ed3af61f5","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":"9d733b06-d4b3-4573-91ed-d69e951ecb8c","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":"a0fdbd15-7574-4e55-b699-0982f76368e0","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":"952c994b-04fa-49ed-927c-a4481d43ae4c","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":"53ea2d03-35bb-445d-a3f8-723f506d2f01","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":"dfc29e08-0ef0-4ba8-8721-e880a645bff4","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":"fe2696b2-fee2-49f4-b676-38fdff934ed0","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":"3e27a617-94fd-45e6-9070-93bae68fddfd","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":"3d2be513-2b19-4e22-a767-6b7ae2eb7383","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":"e1479c3a-8de3-4142-b3ae-a8cfaedaf4b7","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":"e41c6f72-84d7-489c-9ce7-50296a2134b1","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":"c9e35455-2def-4328-ae0c-d171c1d2f278","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":"eef1f709-6650-43a8-9d9d-fef4cc621501","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":"f5828b4c-7443-42a7-9237-617b0cee5939","block_type":"box","text":"Temporary Defensive Measures.","page_number":183,"box":{"x":118,"y":754,"width":255,"height":12}},{"id":"319d2f50-d154-49a4-9b2c-bc4dab1916a1","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":"eebc0ab7-1ab4-4eba-892d-053a3099a96d","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":"93198564-75d8-4fe4-87fb-1d8fe242f822","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":"5ac72c29-6ffc-46fb-8d55-ce5bfb96ddc5","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":"7eff1780-f28f-43c2-9fbc-f835c12be435","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":"840b6d2a-c356-4c58-b663-ca12c030dd8a","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":"b4b0027f-c6ea-4e70-993a-f56089084bd4","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":"a6d583b8-0bb7-4deb-a734-a2195c270aaa","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":"c815e292-4593-4f2c-bfe2-43167395832c","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":"396815b2-f3a2-479a-ac7f-4460a5592ce1","block_type":"box","text":"II-97","page_number":183,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"298d9d71-4f29-416e-b81a-045e1d0415ac","block_type":"box","text":"NM1026U-6049097-183/259","page_number":183,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"56b1a989-c47d-4da9-94c8-74debca0f5df","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":"750b3743-d5f3-4cbe-b51b-7d1aefba615e","block_type":"box","text":"ability to achieve its investment objective.","page_number":184,"box":{"x":116,"y":103,"width":312,"height":12}},{"id":"1ed92792-8624-458c-9253-5f37a39a3c84","block_type":"box","text":"U.S. Government Obligations.","page_number":184,"box":{"x":117,"y":134,"width":236,"height":12}},{"id":"8b0d4363-958a-4ada-8d0c-02f1ce9c92f9","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":"b23df650-b535-49db-91f5-6cd9f0384522","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":"8fed479e-b6f7-4968-8537-b771544e05be","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":"6797cf5f-2408-42cd-9775-904305ea00ea","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":"3900026a-59a4-4136-a7d7-1dea108d8ca9","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":"5b075adb-182b-42e7-9caf-4ec9513bbd5f","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":"99f92277-bf5a-4b71-b981-cb7f7bc3965a","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":"52541964-b2f0-4b1f-9bb0-432c28feb0f6","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":"fe152b51-adc5-40f2-bc9d-ad13ba3046cd","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":"59dc8d3b-5439-4ead-8c6d-128fb61bce7d","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":"322ebeed-03f0-4019-a156-5cdd2ddc729d","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":"732b1e04-71ba-4965-aa34-4a1971f68b0e","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":"9dc3eb53-615e-484f-9a9e-e66762c1b462","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":"03750951-f206-4619-9775-a99665c5db9f","block_type":"box","text":"principal and interest are returned to investors.","page_number":184,"box":{"x":117,"y":335,"width":351,"height":12}},{"id":"013b6c63-7c85-44ea-b209-9a6fb36d5544","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":"61292fce-b85e-46d3-aa94-9fee35cef823","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":"64ae1928-4326-44f4-8b73-fd47d132636a","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":"bc22c190-e46e-4532-b11e-e3a9994258a3","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":"0bf3aa97-248c-45ae-8064-c0c4d61d993c","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":"50d80b22-91ed-4d5f-8fbb-6a9be18cad5c","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":"3caea6fc-d3e0-45fe-9927-1086d21a7c30","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":"dcc10aeb-b9e0-4a14-b572-f722e42c5f6a","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":"232b84f7-04b9-4325-b109-ed9372074d21","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":"ac7d0b6a-0291-4265-9b50-6de3c6024b56","block_type":"box","text":"and Freddie Mac.","page_number":184,"box":{"x":116,"y":506,"width":135,"height":9}},{"id":"748e0e07-d5ca-4ac8-9a38-57e27962ca8a","block_type":"box","text":"U.S. Treasury Obligations.","page_number":184,"box":{"x":117,"y":537,"width":194,"height":12}},{"id":"e2a3daf6-58e8-4a3a-9cfb-b008cdc4d17a","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":"7145ce75-1a35-4bbf-b615-e7e4b8f1a7e4","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":"e6695f53-b748-4dd5-90b5-5b5392bdffac","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":"42ad286b-e153-466d-9a1d-429c60938efb","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":"b4c300a3-ab4a-42af-8b46-870ef7dd7604","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":"790f2438-43dd-4c65-9375-40b243028e1b","block_type":"box","text":"U.S. Treasury Rolls.","page_number":184,"box":{"x":117,"y":630,"width":153,"height":12}},{"id":"e33557b5-8613-480c-a498-b2ae7b023eaf","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":"22a7e198-f4e7-4acf-ba66-168bda725ac0","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":"2e30dc20-4d4d-4b12-bf0c-0f3c6d6afdc6","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":"e58c0719-799c-4159-9637-f0ab61b08ed5","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":"d4358575-a6ed-4504-8d18-989e0193f811","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":"55273273-abb9-42e7-adb0-a20c8a466644","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":"df34aa2a-72e2-40e5-b92d-4c92ca803a52","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":"dcb26c44-73fb-4b42-bbcb-f9affead3a72","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":"5682c297-edd2-4a8f-ad7f-1876165b73d5","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":"015bd440-aa8a-48ac-ba5c-778d51839c80","block_type":"box","text":"During the period before the settlement","page_number":184,"box":{"x":117,"y":707,"width":284,"height":12}},{"id":"fb0b61bc-adbe-4635-80c0-8ec52eb264d5","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":"ed479d22-9046-40b9-8258-8f4245a85445","block_type":"box","text":"Fund continues to earn interest on","page_number":184,"box":{"x":626,"y":707,"width":248,"height":10}},{"id":"97a2f45d-1b0d-4680-b30a-f9833b4bfb31","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":"32c2f383-fd52-478f-9961-8190821b35fe","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":"7b0ea901-10a5-437d-861f-1fecaf30ed26","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":"d939de39-6010-4b64-8d71-f9f1ac82a1e5","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":"64074c93-0148-4c0b-a282-c49212de92e8","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":"7a8144c5-a9ed-4d5b-b5d5-51b88735db10","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":"2214289b-db2e-450c-bf26-fc3ca3df5c2b","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":"099ac577-41e3-4d7b-aeca-cac012c525e7","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":"2537ae92-f61b-4d6a-b8da-81e98abe2a96","block_type":"box","text":"employed.","page_number":184,"box":{"x":116,"y":831,"width":82,"height":12}},{"id":"2f53d56a-40ef-4fa3-9a61-dcf20507e5b8","block_type":"box","text":"Utility Industries.","page_number":184,"box":{"x":117,"y":862,"width":140,"height":12}},{"id":"a61e57aa-0167-4e2e-bbed-b2ce7159e2ff","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":"0abda2fe-cfb0-43de-9502-34eb0aa48666","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":"c75608c5-9f18-4f07-9fb1-7b257955a98f","block_type":"box","text":"II-98","page_number":184,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a184ef3e-4937-480a-a626-a90569e82dd1","block_type":"box","text":"NM1026U-6049097-184/259","page_number":184,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d863ddc8-59f8-41f4-9de1-f6905cf9cea4","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":"28bb7ed3-e1cb-4d3f-ae9c-25331516eefb","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":"f50d0f32-5a8e-476d-8173-f18f33477ba2","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":"f20a7e84-95e7-4618-99eb-0d075ab20ccb","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":"17f27aea-4853-4f01-aedf-d81f328cdd86","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":"22da9ac2-b19e-4cce-9e0c-6eb7028d402d","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":"1e176b1c-1f4e-4530-95d5-08a903378833","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":"e06fae9c-4767-4456-b080-b25e7abb75be","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":"ec61c97a-30fb-46b4-83b1-15e1c415d3f3","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":"dad3ad66-9932-47ee-8afd-3e30e3c3dbe7","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":"c7ef8124-1c70-4a0c-a896-684e9961f54a","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":"b0d51a90-7e9c-4ac8-b17d-d3f6dbbab5ce","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":"c5c40302-928b-4f26-846b-a2952e4f97c6","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":"962bb90d-2a70-4079-91e9-a6c4f4fa533d","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":"f194261a-59ed-4bd8-a4af-4cb8e5343946","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":"82bc6b6b-2201-4b29-a24a-b7d556328f60","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":"b24f4df7-0327-4327-b05b-ead755fe482d","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":"6bb21feb-d6ad-41fd-874c-94a3304089de","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":"0a17d211-9640-40c6-bf73-6f622dd70ca9","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":"cc68c074-c6a4-4b1f-9dbe-23c56af40a8e","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":"eefe0775-0278-4980-ae62-0d12009ed7d9","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":"fc7bd0dc-9940-4a5c-bc17-0a9f99448916","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":"022f3bfc-f430-4c48-a821-21ddce617b94","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":"d94308cb-87bc-4ba1-b41f-76cd11c6265b","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":"cf6f9b5f-1d10-4a51-a633-6e46f21805d9","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":"6d175355-18ce-46a6-acb0-72941a2c5e8a","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":"fab11818-b1e6-47ce-950d-6c26846f4153","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":"42575aa5-6661-4b6f-a5ae-a382e9e36f79","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":"f17eb619-72ae-4168-86c0-bda392e33f49","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":"bd45f664-143b-4800-97bd-4e2f9799705a","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":"5d6ecbe4-73cd-41db-a017-16b331fc99f7","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":"0812ea5b-408d-4538-8b45-ff54195551dd","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":"3d4c356f-cf4c-49d3-9785-d101a98fa85d","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":"19117661-115f-419e-84a5-9ffef830fc38","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":"2a3b31a0-a430-457d-9e78-b1906863a2f1","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":"851f8418-b898-407b-be42-2a61f448f197","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":"2d4ec1fe-a6f3-4181-83b4-207422ecb555","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":"b6b9be76-35cb-4a73-b7a9-1f73855fada3","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":"2424cf7a-3f2c-4426-a710-9313f1b90260","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":"363f06bc-4d91-47d1-80cf-50fb3b99cf3b","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":"d51dc976-06dd-4854-b015-2e952ba9bb0f","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":"52f10aad-ed39-4c43-a3f6-c99b353a9751","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":"209cf917-684f-47e7-bd29-cddf79e48b9c","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":"5704684c-01df-46a1-b034-759decb13564","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":"69cc08aa-e302-4ce4-82c8-6cc8fa0ab5fe","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":"72afe8be-a66c-47b5-8dd9-9ee9c0212794","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":"723eccfb-368f-426c-b578-8df6f08467a5","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":"84d74531-b82c-4270-a749-3025dda6f46a","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":"71089af5-4b72-4616-9634-c4d625a3ead4","block_type":"box","text":"II-99","page_number":185,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5892d104-d5f9-4a75-a6b8-dc06234b2320","block_type":"box","text":"NM1026U-6049097-185/259","page_number":185,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7dc227ea-329d-47d7-bc77-99e417813f9f","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":"59c47fab-f8eb-46b4-96cb-67bbb209eafd","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":"cc8b0ea9-de9a-432d-a172-d93fd897243c","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":"829a5bfc-8833-4040-ad58-778eebf635eb","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":"443fb1b4-3fea-4ed6-8988-051521030cf8","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":"cd38110c-96dd-4a8b-89bd-4c1168b5fe51","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":"77f9bdaf-35b2-46e3-8491-e66e76ae3f8f","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":"06fe5b6c-a64d-4a10-afcb-e863387f34a5","block_type":"box","text":"United States.","page_number":186,"box":{"x":117,"y":196,"width":109,"height":9}},{"id":"641fbe7d-b06c-4a43-9ce3-d9cc072bd434","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":"2dece9ac-5f90-40bf-8719-135ca3a2b8b8","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":"ba649065-5c75-40ed-b5a6-a964231924ee","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":"a6e105e5-a74e-4f7b-b668-70bf18683724","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":"a9b65b84-1455-4371-9f8c-a4868ad88c2e","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":"1ec8f8f7-7e23-4f6b-ba87-b144e71040c1","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":"4414b6f3-f250-462c-8d2b-a200467a8f59","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":"da354260-3f30-4233-be43-25a1226c321e","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":"cf443d29-5ea0-4304-b653-c2a465596f83","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":"7294b90a-9db6-46fd-b2f7-f9a68f4d9fbc","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":"3fbe8c44-e359-452a-bee2-4c858d685166","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":"d0f2f728-c426-4d11-b6c7-d76249ac660f","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":"5ffddfc3-5a01-4847-8e15-3b9a3ca81245","block_type":"box","text":"utility companies.","page_number":186,"box":{"x":117,"y":428,"width":132,"height":12}},{"id":"c921d16e-49d0-4ec0-9358-12559006a26c","block_type":"box","text":"Electric.","page_number":186,"box":{"x":116,"y":459,"width":58,"height":10}},{"id":"b5dbce66-7667-4c6d-914f-f61ed600e626","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":"698b348c-c24c-4b91-9edd-cfd30c730299","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":"97095cde-0aa4-45b5-991b-78e2cec2c52c","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":"79b99bdb-2f5b-4879-a5c4-46258abba1e6","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":"1989c373-dc11-4a85-a897-e891ba9c2121","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":"daf487a6-c7db-47fc-b842-f3635d343e57","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":"c566d170-84e9-4437-ace3-5a64800c9bfe","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":"6bb46be7-a511-4146-87ca-efae7c4f1a04","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":"a8d9f80f-0725-4c39-b0e9-37d5fe08f6b8","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":"8154b6ff-3325-406a-b858-88a7b5f11d71","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":"f91b0c24-6342-44eb-893d-b1532d8ac79f","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":"6a4942d3-5d35-458a-b242-de5ee5f55087","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":"4b13f7d0-4b80-42f4-86bb-f0a452ed3437","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":"57eb993e-35ce-4887-b21f-6d4a1951c993","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":"77994394-36dc-494e-8eb7-570c2526cfdd","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":"82d85032-6309-497c-8221-f064af08f5af","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":"38acc8fd-5df9-4cbb-9ec4-90f4e4fc0744","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":"716738be-c668-464b-acb4-e6a802e222b2","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":"15ccdec4-ef80-4fa2-826c-6d3631b05b4a","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":"bccda94f-a775-4d3c-9b9c-9101aba23f8e","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":"054714fc-b746-491a-b2c9-aceacaa0aeed","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":"622f8fd5-846a-48af-951b-2531f709107c","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":"fcf2fc16-f553-44d7-b0f3-6b93f2c77d5b","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":"66811721-dfe0-473d-8731-bd49c778b26f","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":"47f79024-83a1-49e3-a7d4-9ffac93d6377","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":"74074751-cc88-470c-978b-873db896e3bd","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":"48dc3f2d-830d-43f0-a608-ff0f5ff42e28","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":"4e2e9195-3407-4f2e-a16e-acd542a721a6","block_type":"box","text":"II-100","page_number":186,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"7423eb8a-a3ba-4563-93ea-354f1f8fcbfc","block_type":"box","text":"NM1026U-6049097-186/259","page_number":186,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"32c566a3-5a8a-4a70-adb0-9c81b9431939","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":"9a9b7a19-2067-4f0a-8d06-242cb67781fc","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":"c0b3cf02-5227-4224-ba44-eeb7c4957fd7","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":"4a8f8dc6-d6d2-47d3-8280-14a6249ef7b7","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":"cc0bb85d-4893-4827-880b-4705c7090305","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":"2b95984d-7904-42a2-890b-04a523195301","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":"cb03e012-367b-46ab-8962-7475260300c9","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":"8b634a66-bc78-4d9f-a106-af18b4cf12c0","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":"cf040040-e875-4115-9aed-83984b284f52","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":"aa84d0c5-f3f8-4b9b-ba6b-c73e87c886f6","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":"b7500234-de65-45e7-a488-2c7b4dfc12ea","block_type":"box","text":"utilities industry.","page_number":187,"box":{"x":117,"y":242,"width":123,"height":12}},{"id":"b219f161-b132-4a42-bfcb-a2f9b95470d7","block_type":"box","text":"Telecommunications.","page_number":187,"box":{"x":118,"y":273,"width":155,"height":10}},{"id":"d4b6a4c8-81dc-43ec-9c4b-b3ccd7db5eeb","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":"657d5054-59ce-49ab-82d1-0e3982df1937","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":"a08eb7a2-3522-4387-97ce-e9c00fe66ffe","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":"1c42c2f2-216e-449a-a599-72b0e33522a4","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":"347a1071-a6d7-4314-a589-7044e9cf7cc8","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":"fb0063de-9d7d-4f75-a119-602ab2e4545d","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":"0a8e5bea-d82c-4bfe-82cb-0dc035dd2fc5","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":"d4d186f8-9376-4a4d-9108-14b903059df4","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":"7c9114a4-fe55-4f85-8eb7-218a1d772bfe","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":"867666d8-e16f-46c2-8702-eeaaf7cd498e","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":"666845e8-98f7-486c-996d-1fb445b6b59d","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":"cd1121ad-63a1-4795-ac36-277ff4679f0d","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":"25e64377-b220-41f8-a8f3-c3a5fd989889","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":"c36438e0-ce28-4d90-bb9a-fcb6dca31f24","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":"18e1af31-0ba7-4937-bb22-59534eb6f374","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":"e44b0749-9841-4b28-86ef-ccfc701c6c3b","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":"e6c1a3e4-09c9-451a-ab0a-e3b749b6f41e","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":"6713a826-922a-4160-9739-043de6e2e480","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":"73c5c855-af86-4fff-8571-7d23df1d8294","block_type":"box","text":"Gas.","page_number":187,"box":{"x":117,"y":568,"width":33,"height":9}},{"id":"bc0d559d-35b0-4f77-bb00-ae15fa1cf87e","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":"e0ebf49f-463f-4679-9848-20cb6f8992da","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":"f6f81d20-0f03-48fa-a128-2bbcbd8ed7fb","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":"4da47bba-7906-490b-9af0-f9a6cc3ad655","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":"8d9e388e-9e90-47e6-8ee9-8cb1d8c8cee4","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":"1efff2df-4323-4275-8cc2-ac8d79ff1e78","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":"5e18b55a-fb6c-4214-b5af-41e182efd886","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":"1ce6b4ba-f2d0-49e8-b7af-3b97f38e26fa","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":"d0296afd-e233-43b7-a5fe-b77e282c5972","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":"ed563f18-13af-47ce-a710-4079dedb1013","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":"5b86a05b-1558-4216-be5a-af5317d0ab69","block_type":"box","text":"prevent this result.","page_number":187,"box":{"x":117,"y":723,"width":135,"height":12}},{"id":"feef1481-52d3-431b-ab0d-7f447e251652","block_type":"box","text":"Water.","page_number":187,"box":{"x":118,"y":754,"width":46,"height":9}},{"id":"0ac8f32c-76a1-4fe0-a01f-8ccc042cfb55","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":"9069f368-397d-44d7-842a-eeadd84e4ec7","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":"eaaf6ca9-9f1b-4157-a716-c9d48e2088e7","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":"cb67fa08-b7c2-4dd3-a70a-a1fb506cbeb1","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":"903e05f7-4155-4dd1-9540-772159a81a39","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":"32f8aaa2-8035-4312-adce-c9de0a161cb1","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":"8c2f41fa-0f68-41ce-86c8-b294425c4923","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":"f8b1c11d-d052-40ac-9cd3-36fed32c4c9e","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":"44908ea6-d725-4924-9b12-95dbfa0c6f77","block_type":"box","text":"II-101","page_number":187,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"c810e4a1-761d-49b2-a837-422fa6fbdeef","block_type":"box","text":"NM1026U-6049097-187/259","page_number":187,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b03d1e48-dd85-400d-883b-fce58b15c095","block_type":"box","text":"Utility Industries Generally.","page_number":188,"box":{"x":117,"y":87,"width":197,"height":12}},{"id":"33ed7b71-02a5-44e2-aa58-46fe9762054c","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":"1849817c-29a3-40a9-84ad-db3ae2686c75","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":"7a424a13-8843-4b8b-8ba4-998047dfae9a","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":"2bfcd238-dd6f-4f1b-8d7c-8c84a902c664","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":"e721a893-66e3-49bf-81aa-af664821c6cf","block_type":"box","text":"A Fund may","page_number":188,"box":{"x":762,"y":149,"width":100,"height":12}},{"id":"d64c77b7-be80-452d-a7d4-2d9607ced553","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":"eeb5b624-40ea-4c01-9529-43952d4bf337","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":"853e3e8b-a28f-423d-8ef1-a4bee33533f9","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":"806d9f54-8a98-4047-982e-dfad9acd6cb6","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":"505b3da7-0efd-487f-8ed6-68ce25c0cda8","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":"90351436-d34f-4b64-b635-d89b3c6819f8","block_type":"box","text":"entering into the transaction.","page_number":188,"box":{"x":116,"y":242,"width":217,"height":12}},{"id":"dcbfe89e-3b5c-40f0-bc70-8779cc1012b9","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":"c14543b8-c7b8-4216-8dfd-c8373b694c2a","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":"f33cc9dd-b5aa-441e-b160-f633893f66bc","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":"24952896-a026-44c9-ae14-8f096956b338","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":"de59dc7a-9370-45c1-bcc4-ed686f0b0329","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":"bc4998bb-f7a8-4470-8230-9f9348484499","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":"10d06f65-19b9-4499-826c-abf25f9b2554","block_type":"box","text":"and impose added operational complexity.","page_number":188,"box":{"x":116,"y":366,"width":320,"height":12}},{"id":"9160cad7-d0f3-4050-9410-88bddb648a99","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":"69eb9633-39fc-4d47-835d-aa6a9480c5b8","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":"7bf369cf-6180-4eec-afe9-57b24fcb06b6","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":"bb532589-0c14-4e31-90ec-ec7cec243263","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":"5faa3cb0-10af-4d86-bc4e-a0886d6f4113","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":"24036ab5-166f-4585-afa6-153f22e799d2","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":"134500ec-1781-4a34-8ef1-e121b924a562","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":"14019baa-8ccb-4387-8b53-479858b120ab","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":"3b4a0831-2916-4fd4-bd85-da92eae64bfc","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":"f14d545c-fc23-4fb2-b0cd-3357daba0544","block_type":"box","text":"a taxable capital gain or loss.","page_number":188,"box":{"x":116,"y":552,"width":221,"height":12}},{"id":"679e6a73-7c44-4f3c-a105-def1b0cbb39e","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":"26721b93-f872-451b-9a1c-9248fac12d56","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":"a9a002b0-03ca-4a6d-ad01-a2576bc74f71","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":"95b59bee-9e7c-47a6-b04c-eeb9e920900e","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":"79c83af6-ccbc-40d4-8419-d3085fa30a09","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":"a0e0026b-c33b-4550-a885-0db3d2941ac5","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":"e4778599-2172-4dbf-ab0c-aac13d16491a","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":"ca4f0ef4-ccc8-4324-bd0f-a0e4e6a7409f","block_type":"box","text":"settlement date.","page_number":188,"box":{"x":116,"y":707,"width":118,"height":10}},{"id":"30b7f8fe-962c-4c2b-ae68-0ff32529d4bb","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":"5fa98375-7691-453e-a7fa-7643acaefdd8","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":"967392a0-b6c1-445a-bc84-6305aadfc4bd","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":"24dd9273-658b-4321-80a7-f07dee8073fa","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":"caee7cf3-4e6d-4fd7-a4f4-b1654c1ba0fc","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":"ab5166c2-4b83-4469-9f95-a3c7e3d28c98","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":"8ab75e4a-733c-4c00-9b43-f0efa2ad5d68","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":"1368bfc4-2424-46f7-9872-61da65180088","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":"0cea2209-b147-47df-9f50-e5c305a86eda","block_type":"box","text":"Investment Company Act” above.","page_number":188,"box":{"x":117,"y":862,"width":252,"height":12}},{"id":"8c3aac58-37e6-46cd-b2c2-a87dae57bab3","block_type":"box","text":"II-102","page_number":188,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"26fccb9d-febc-4f83-a21c-55ec535c95a8","block_type":"box","text":"NM1026U-6049097-188/259","page_number":188,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e96e0fd3-c9ca-46a2-8ad1-7890624bf2da","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":"4c9f5771-ff87-4499-856e-7859d84e964b","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":"64b10e65-d7d4-42b9-abe3-2e98b9bdea84","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":"f040302f-37ab-46eb-b242-86f345d5d510","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":"11aec5e7-fe6b-48b3-9583-b6afd7bcf7f6","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":"ca0aede3-2625-4da5-8d0b-9d99887ff893","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":"174a1752-9a34-4533-b0c9-b7da91db0964","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":"edc04459-564b-46c1-8248-591c3d0cc132","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":"af913fde-3a80-4851-8361-301ffd1299c3","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":"2204c3f1-5d82-408a-8872-782b31f92fae","block_type":"box","text":"Yields and Ratings.","page_number":189,"box":{"x":118,"y":242,"width":152,"height":12}},{"id":"9a557442-4257-496b-9895-c7d0fe77dcd8","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":"ef040929-ef8a-4b4b-8225-be09edb6b318","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":"f33c1ebb-5578-4964-8893-99454602d71d","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":"5ae55e29-297b-45df-939b-84da2afe064a","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":"8d96b0f0-8f7a-49f4-9790-53bc7ab0143a","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":"072f9bf1-4041-4f1f-892b-932fc9381853","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":"d280847e-19be-4db4-b869-7ec0171b76ea","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":"636a3721-bedc-40fc-a585-b627951f759e","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":"40c67874-4b99-49aa-b9d6-76a48c1f29ce","block_type":"box","text":"to hold the security.","page_number":189,"box":{"x":116,"y":366,"width":150,"height":12}},{"id":"aa652f1a-e8f3-4bd7-8b14-99b578936134","block_type":"box","text":"Zero Coupon Securities.","page_number":189,"box":{"x":116,"y":397,"width":193,"height":12}},{"id":"fae6a2c9-347c-47fe-a22a-a7839e2ba96b","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":"95db47d2-82a8-4b2e-a729-0e7d362282cd","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":"1cfef250-b820-4128-b290-55fc9ba62c24","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":"aebccee7-53f7-4b7b-a1a9-c2a2d49994d7","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":"aba43972-1f44-40bc-872e-d10b7427eea1","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":"169a2488-728e-4224-bc8e-6515982dc057","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":"267236d1-fd66-4dd3-9346-0fdf1ada1b08","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":"773e3a19-cfae-4cf4-9051-7e220bf17bc6","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":"4ab122e3-03c2-4927-bf24-90f5bce7712f","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":"28d2c1e5-6cbe-462a-ac3b-e95eb5103b3c","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":"a58f66e4-87b9-4971-9ade-fafa7d6f02b9","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":"975712ad-f060-4494-ab88-bef5d267f9d4","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":"bcf5a513-7b06-4877-aab8-cef2d341bc70","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":"d59e64a9-c409-43b5-8c8b-2d9209994ef6","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":"5845daf3-4d2c-4042-9d42-825f2dd4d247","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":"c16d1bb4-aa81-4ca2-8fe2-645450dd7c4e","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":"8ccf9612-2b0d-4112-aac3-f6b1b99606aa","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":"73cfa208-9655-4e9c-abab-49117841044d","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":"9299dfd9-26e1-4da5-913c-50e14e7a0416","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":"d7c08359-ff01-463c-833b-73d8b708aa2a","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":"2dc3d7bd-ffea-43fd-beca-abbd30aac8f2","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":"624c06b7-b413-4349-b718-2beb323a5163","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":"83c0f1b9-6e6e-43e6-aead-28d4d82728aa","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":"002377e9-8968-43be-a6fc-48cd695932fd","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":"2bdf480b-1612-4703-a99b-833cffc3d6e0","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":"b27561a8-d202-4f21-9e81-b31c4affa743","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":"235fdcca-0a52-48fa-a806-a9d8d1fc233a","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":"110e7956-d01d-41f7-ab9c-2bc0550abc1a","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":"97efd904-7e12-449c-9f29-5a7a9dd59e68","block_type":"box","text":"II-103","page_number":189,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"85be0aa4-987e-49d8-a029-ed1d83abd7fc","block_type":"box","text":"NM1026U-6049097-189/259","page_number":189,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"88cc36ec-7b91-419b-ae24-5ffddbdb7a79","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":"7b5b0b64-535a-4f33-987c-01a42e1e0e66","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":"9c07ad7c-2625-44ac-8fbd-a3a9e8570af4","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":"33d83937-8b55-4a08-8940-30e5ae20ee5f","block_type":"box","text":"Suitability. (All Funds)","page_number":190,"box":{"x":117,"y":149,"width":181,"height":12}},{"id":"c0903ee2-6d28-48b2-b7e3-5d36ab558949","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":"1be82a05-1662-46ec-b07d-240d74e6e48e","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":"b814fd99-677c-4b42-953a-f769f1ca41c6","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":"46143aef-d474-421a-b5f9-ea7ebf151834","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":"fec32a64-1908-4d35-8624-ae1313604f05","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":"3cdbaa91-bce9-454d-a473-0e9d2815465f","block_type":"box","text":"loss of principal.","page_number":190,"box":{"x":117,"y":250,"width":124,"height":12}},{"id":"a6d0c8e8-5994-4d1c-82e5-97d1070648a9","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":190,"box":{"x":116,"y":281,"width":293,"height":12}},{"id":"545b4ddc-8fda-460d-87d0-0918ef2a327b","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":"a106e3b7-e868-412c-9b2b-85ed6e8bd4d8","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":"9d0cee78-0d4d-43f7-b92d-e0a88a8073f5","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":"f6a9d30a-da5c-4b3a-ab2f-f483e25815ef","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":"bdf8ead3-8c0f-4aee-b560-e7ff562bd860","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":"e3919515-0edc-477a-b73e-3213c2baf113","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":"210a6081-7ecb-4b15-89fe-a7ab89d92596","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":"6b194c9c-6feb-48cb-a2dc-ba6e3d40055e","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":"2ea9c96b-3c98-456e-834d-8b29191ed927","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":"c8067a3a-3454-43ea-8939-e8f7f0b5dfc5","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":"9ea23eba-bf82-486c-8d2f-6cb85bec68a7","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":"abf347c2-59a2-4599-a593-fdbbe30a8ea4","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":"8e18bf4b-8d7d-4fdb-a113-d9d8818bff72","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":"66762a4f-f4a2-4dc8-a437-bd03e27acbf7","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":"e42e60c0-7666-48e2-86b5-31245e3ae806","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":"be73c64a-99c1-4ba6-98f1-cfe883d3152f","block_type":"box","text":"publicly traded partnerships (","page_number":190,"box":{"x":117,"y":537,"width":214,"height":12}},{"id":"7ac7a6f4-21f3-4c30-a4d1-562703c54f12","block_type":"box","text":"i.e.","page_number":190,"box":{"x":332,"y":537,"width":21,"height":9}},{"id":"374d3fdd-ee2e-4e11-8a34-4c97fab41393","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":"53279bce-edd1-421f-95ba-bd47f2040d46","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":"fa334278-ae7d-423a-ae96-212bf39060a7","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":"cf2d9841-d278-4c82-ae61-e605d869fd8c","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":"42d921e8-e1d5-4048-964b-23ef7a8f973c","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":"d9293701-e50f-4ba5-983a-467b7475a874","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":"dd3481d3-ade5-4f0d-906c-6861c4d94494","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":"c5dfc48f-90ef-43ed-b5d1-60c1e3cb845f","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":"9a2f77ec-7b12-4804-bef6-85314415413a","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":"0844e1d8-c8e5-470c-a0f7-e9b2dc036dc2","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":"358bd20e-1e3e-4e38-9990-d2f20cd5126d","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":"2d9f68a1-ef7b-4347-87ee-5b6a327aa969","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":"6ebbff52-12a9-4351-b2ca-0fa9c34c2a11","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":"43c6d372-3a68-4148-88b6-d09ac2b24bd0","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":"ac051ce0-144d-4e62-9b2d-29f3f0d52a6e","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":"bc26013d-6e3f-4576-aa38-800fdf2bc47f","block_type":"box","text":"II-104","page_number":190,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"dffe6c30-0bbc-47db-9b1f-8e2c36910f8d","block_type":"box","text":"NM1026U-6049097-190/259","page_number":190,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0376c835-57ab-47a7-8b1b-3a7e8e5ad6b0","block_type":"box","text":"APPENDIX A","page_number":191,"box":{"x":448,"y":87,"width":108,"height":9}},{"id":"ab59cc27-fc74-429b-83d1-2d8989ace9a2","block_type":"box","text":"Description of Bond Ratings","page_number":191,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"ce3c2cd6-bb52-4776-8a81-0d97a4214e5f","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":"d6f4b023-b2ac-4bab-83b7-bb07eeb8244e","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":"39546091-970c-4880-9111-aee5e9a73ca0","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":"9c44a521-b052-4bb2-8fa8-180843047b88","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":"f5dcb6e6-eac8-42bc-b2ed-1297ac704a70","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":"ef14ff2d-64ad-4f9f-8674-51b16f29277a","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":"9422b4d6-4100-4108-9fed-7597adf2c973","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":"c49ce2e8-9be0-4de2-8c17-f7c8add64ca2","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":"76af1e0b-3921-4d47-9d85-52ca7f71b54e","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":"039bf5ec-dbc6-4df3-9918-d24793d68c17","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":"00398f0e-c9cf-4e09-ad47-d303088db3de","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":"89999863-043f-4dca-859e-4cf767a73b7a","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":"b02a3c06-9508-4479-bfa6-db2418ff8f2c","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":"8d65e4d2-3f4d-4db1-8afa-9cc3bbae5351","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":"26eb9e75-fa16-409c-9de0-0d980846a31c","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":"fa0e072a-dc3e-4929-8838-3ae979c1477a","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":"ba21deac-bbcb-44f9-91eb-8c256bb1e220","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":"8ac0ee7e-25dd-428b-9045-a6bfa8b7a5c4","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":"4f17bfa7-2f1d-4f04-8044-dcc240f33d1e","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":"97b2a660-920a-4fe9-8e34-496d4d6a52f6","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":"c847ae34-acfb-4fdc-86d4-6f5791e20846","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":"6d3191d6-3372-4d8b-b72c-784f0d5177f1","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":"baa69abc-7acb-4089-ae7b-fa0445d842f8","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":"d5661780-19c8-4ec5-bd08-990e42f19975","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":"815a6077-a895-4c2e-92b7-6d5598b4106f","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":"c46fd711-d484-4f4f-9eb4-58298ead30c0","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":"2918bc40-2e7c-481d-9ee4-ce4412d4df3c","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":"7c999559-1d94-4885-98ce-220beb6af3c9","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":"e7c9caff-cb2f-48b3-b666-e2df1326005d","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":"15f9d9f3-f5a5-4bf5-814e-a9dfe94e3def","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":"a31f833c-f9f9-40e9-ba32-f26f8fe3be7e","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":"c005d37e-ca9e-4e1f-9dda-a347baa321dc","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":"bb6b4d50-9efc-49a3-aae0-32c0c8c90542","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":"4bfe8e76-7473-4374-98f3-062209ef7e9a","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":"9d8f10a9-5304-4718-b484-35a9c67937c7","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":"2cfb98a4-8814-426c-9658-66b6d7c19c1d","block_type":"box","text":"fund.","page_number":191,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"ecadc7cf-72ae-46cb-86f5-a7c11058629b","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":"9b7ce030-0be0-4768-bc73-c5f0597607ff","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":"f21e75f1-1566-4725-972d-8215b258b1c3","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":"295c8c66-bf34-4002-add1-d741c4ecfefe","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":"43eb7dff-e2ab-465e-884c-4d666823115e","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":"acdc6db7-dab7-47d1-8cc2-2477f8f34eb0","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":"356d2dbe-44ee-4a08-b397-e5ddf0079cb0","block_type":"box","text":"likelihood of default.","page_number":191,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"9353dbde-7bf5-4413-adf1-8b98b4aaa14d","block_type":"box","text":"A-1","page_number":191,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"337b2534-cca4-478a-85b1-eafc280c990e","block_type":"box","text":"NM1026U-6049097-191/259","page_number":191,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7f14bfdf-0834-4f9b-8fee-a85d2ae11dba","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":"9df1e50f-ca68-430d-84d5-ed7303981505","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":"3e5e7c11-93c1-4d49-9101-b2bda7a89ecc","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":"d4bbc0a9-d27f-4980-ab03-aeca174747d3","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":"5dd3f9b8-31a5-4da4-abc1-00062daefb7b","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":"6876e656-107e-4a77-8f1e-b6f2f3ab49b9","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":"4272e682-40fb-4c96-80d0-f5b88241f0e4","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":"0a2935ee-498a-4737-a84e-af9709dc7e6e","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":"c8409933-2586-47aa-ae24-1bde69e70146","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":"d488854a-9079-4c9e-bb18-901bed50c3ce","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":"85904bad-3bd9-4083-af12-fc38622c786c","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":"a084afba-61c4-4082-bb7f-9f0978a2a08f","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":"c922a290-2b46-486d-9486-16a3d6eb3ae4","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":"9e2dd5a6-aa99-4835-a56f-305db7e9c8a4","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":"0c3d0bc0-82a4-4f72-bda3-b12aea927dda","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":"f3ccf01c-5616-46f9-a8ae-40d12f135bcd","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":"331babda-506c-4297-b8c1-f2ef1762292c","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":"27435a79-fe7f-4c1a-9bb6-4c32a80e0cd5","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":"679b92c5-f8e3-422e-a637-2a2bb16fbe8f","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":"a28524e1-d987-4d0b-9836-cc68abf641fd","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":"2c541281-8d67-466f-99c5-43256aa9bde7","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":"d77d1a91-2869-419c-992f-596dc03244d2","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":"657a16d9-7763-4bf3-93b4-2a1ad490c25f","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":"5a475531-a7ff-4011-b811-56ee33e62d75","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":"199f9155-d7e9-4a5b-98e5-2b350cfb34a9","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":"f27bf2be-8eff-4ea5-a992-b72756d74046","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":"5cd61489-4c6a-4e2c-82e0-d095a7001167","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":"3dd8262d-a95c-44ac-a41a-932dad96586a","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":"62c14b84-b584-4c68-84ac-14969473d537","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":"f1ec110b-f8ce-4dc8-90da-c8a08b604dd4","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":"93808829-4403-46fa-a31e-ada001d130cc","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":"22c60f3c-ae92-4db6-9b82-78930cb8eb81","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":"c953376a-defa-47b0-a682-a66408bbf5ed","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":"28c734fe-cf7e-4e75-b1c2-0b26d5a01948","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":"09207c35-1036-4837-8c6a-cd0ef7ba043d","block_type":"box","text":"of credit risk.","page_number":192,"box":{"x":226,"y":699,"width":93,"height":10}},{"id":"d2fd4a87-b394-4f9f-99ea-d742c82028fa","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":"48c50baf-613d-4f7b-a984-d05c7df67ed4","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":738,"width":28,"height":9}},{"id":"9d1f513f-7074-4da4-bae9-44f5c651f1b2","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":"5256cfa5-09ce-4809-9251-b9ac060d5f3e","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":777,"width":28,"height":9}},{"id":"db462cc5-fcd4-4379-8c71-731c01d69bc4","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":"4eea572e-57cd-46a1-a651-d95907f17b8e","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":"d8bf9b28-de61-49a1-969c-d91bb3eaecb5","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":"eff2efc2-f8a7-43fe-b336-ca869f735de7","block_type":"box","text":"risk.","page_number":192,"box":{"x":226,"y":854,"width":35,"height":10}},{"id":"c0817db6-ea9e-4245-a9d0-bd6795e6febb","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":"eb24a170-86e3-42d0-9465-826ed4dca4a9","block_type":"box","text":"A-2","page_number":192,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"e6000f4c-9654-46dd-9ad4-c1832e0bade7","block_type":"box","text":"NM1026U-6049097-192/259","page_number":192,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a65f6b71-3369-4d69-a86d-513b89be478c","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":"7f10df9c-0fb4-4dc6-a90e-6d37becdda0d","block_type":"box","text":"very high credit risk.","page_number":193,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"5fe7dad0-61e8-420f-8028-0e4349966ef3","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":"e5ae907c-317f-4a79-9332-d62cec13a335","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":"b8c8e546-c0cc-474d-81fa-21a134973833","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":"449d9821-0a46-4bfd-8173-b9b7959f291e","block_type":"box","text":"for recovery of principal or interest.","page_number":193,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"4121af04-445d-4de5-a597-f02d4af08aa2","block_type":"box","text":"Note:","page_number":193,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"340869d6-1ce4-4d7f-920f-08ddda889f87","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":"044f9172-3a8d-4853-96fc-174ac667a5b4","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":"c0d606f9-6d13-4d30-8690-a24d33033c8d","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":"ba584b38-45f1-4048-8f36-b96318e89db0","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":"3f45e2eb-4e9e-4e68-b896-573c01966b7d","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":"cd113b13-ad2a-41ef-a7c2-b8e944efa003","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":"30f4d750-5290-4da2-817c-16960d673eb6","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":"b0ea2cf1-1e5b-4506-afce-7bb444cf9f25","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":"7c1d5f59-bba2-4255-a355-182b5ae0eaf0","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":"3b289077-43fb-47f2-b088-79078384546b","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":"75aa3d27-60d5-45f8-afff-42d8f524a56b","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":"8cf95494-70a9-40a4-96c2-9a310a6f1884","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":"08cb896a-ed33-4b8e-a419-65fb0a489a12","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":"e3add9f4-9d36-4549-9f88-a116c3d368d3","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":"016ab441-2c48-4cf6-bac8-8ba2f1b127a0","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":"bfe6d43c-4977-4fbf-b909-1bdcc439e9fc","block_type":"box","text":"rating categories.","page_number":193,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"f63225e6-e114-4941-8351-17024751a269","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":"83eb7454-130a-44a6-b997-60227824fa45","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":"143da365-a1c9-4d43-9a61-a56b657da1ba","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":"f4d792f6-daff-48f0-aea2-e9af04439da2","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":"7deeaa78-8699-44ef-b215-ead8b55d982b","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":"12f02d61-1b65-4cc1-8668-b0109323a1b6","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":"b20bfd62-98e1-44c6-9698-47cd1c2ca89f","block_type":"box","text":"discussed below.","page_number":193,"box":{"x":116,"y":659,"width":132,"height":9}},{"id":"cc1b7e9b-085a-4bd8-9aa6-e2a42cd75b4e","block_type":"box","text":"MIG Ratings","page_number":193,"box":{"x":117,"y":688,"width":96,"height":12}},{"id":"cc0413cd-3527-488f-872f-ac384ccaa85e","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":"e1175379-116f-4dbf-999a-bb43ef0a185b","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":"6bf60dfb-268b-4812-ad4d-c349978649c8","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":"f54a8517-6ee1-4213-924c-d1c11ceee887","block_type":"box","text":"MIG Scale","page_number":193,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"7cd7b7f2-5e1b-4c9a-952b-12d32d0997b4","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":"de07df5e-58f7-41f6-80a0-21dec9dfd5a5","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":"4c97266e-b258-41de-b725-3d570e5e30ab","block_type":"box","text":"access to the market for refinancing.","page_number":193,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"74c4e954-f3fc-4ab6-bd41-b4e970928207","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":"077ac27c-34b4-467c-a6f1-7764905b1742","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":"3711c5cd-0bae-4f45-8bec-62a97627da3e","block_type":"box","text":"A-3","page_number":193,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"1b4829c0-4434-433a-9f6f-2a617493fce2","block_type":"box","text":"NM1026U-6049097-193/259","page_number":193,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d2cdb926-73b6-4ac4-bafc-e1605bdcdcd1","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":"e8411bee-a6ff-473c-9952-37abad6ed238","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":"04104c1a-0913-413e-bc1c-64d3d4ec488c","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":"0a8d174a-b335-41c0-989a-d6734dd457f0","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":194,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"cc223a37-201b-43d2-be70-f192c93da31f","block_type":"box","text":"VMIG Ratings","page_number":194,"box":{"x":116,"y":168,"width":114,"height":12}},{"id":"8d32e251-58c5-47c8-a3e9-b3401dc917a7","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":"e0e95757-d496-4b06-ae56-a65dcf91ba9d","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":"de83f63a-94d6-43c4-b940-aded1caf8ffb","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":"7dc205a7-4ebf-46e1-800b-313a95e4ce59","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":"60abd048-d3a5-4446-8b4b-4be0a24b765d","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":"3cde0e93-3505-429b-a485-1f1459f74416","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":"7ebd8092-3539-48bf-a39f-8f0fd254aac3","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":"5083e067-d154-4d9b-a0d6-9d639e774af3","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":"1a6e5da7-69f5-4dff-86af-a5a9910604a1","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":"d23b7a8e-e694-4eb7-9d8b-14f30e33360d","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":"dadbc2b4-74f3-4abd-b3ae-0c9533543354","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":"c739e4b7-3b41-4523-9577-5014e0e94495","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":"426b84db-8f39-4b43-9039-5a31bf4e0422","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":"89c94640-4586-4257-bbc6-7b5969cf0d8c","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":"ec6eb654-b40d-4d24-b911-2bc2487ed012","block_type":"box","text":"rating is “NR”.","page_number":194,"box":{"x":117,"y":424,"width":107,"height":12}},{"id":"2b004e24-4292-4c01-836c-2d23446498d3","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":"64c89dad-e191-4307-a0b7-f9a41979968c","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":"00cc0764-75f3-4c68-b4f8-0d9962fc4394","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":"93701591-7e87-4d78-93f1-4271e2abe1f6","block_type":"box","text":"VMIG Scale","page_number":194,"box":{"x":116,"y":509,"width":94,"height":10}},{"id":"a6ad3864-0e27-4d75-9240-7ff929bb536c","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":"fb96a9df-37f5-4440-8a99-c4f8fede9afe","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":"f2c45fa0-0dde-484c-8ae7-10899ff515a3","block_type":"box","text":"protections.","page_number":194,"box":{"x":226,"y":568,"width":91,"height":12}},{"id":"bf4cce72-6cda-4d68-9c45-e1236cdd6711","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":"15a74c70-6c68-4ef2-8dec-51c15dbd351d","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":"070f5f1b-928b-4677-aa53-7c95e76f2957","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":"8c069325-f4f7-4e83-9676-8a7f0bef0693","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":"ba795601-4441-458a-9162-091f7e984f27","block_type":"box","text":"legal protections.","page_number":194,"box":{"x":226,"y":661,"width":125,"height":12}},{"id":"a864093c-ef3a-480f-9c9e-afe6b0de1130","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":"f8dd125d-9b78-4e9d-9d7f-77d3b26db90d","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":"5555c0ae-cf62-4927-9a0a-8349b8812ace","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":"d68892ed-2ac8-4dbe-9ca3-917841b984f6","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":"50e7fcaa-b78b-452a-bde8-d4a19a281ef6","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":"31123ea8-3021-41e2-8e64-14b3acca1787","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":"550b3172-0030-42d0-a43b-08ce015bf6b5","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":"4134d00b-64d2-4ec2-855a-722fe56c1acd","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":"77062412-a611-4488-bcad-bb8cb44d57e9","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":"fd053dd5-8880-4d27-b224-50e62f89c32a","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":"e5c38580-529e-4982-91fd-b9e2c5962c2a","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":"148ec6ff-cdb9-492c-94e7-0f2898815523","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":"ce5d7757-de0e-4aac-9b3f-016e288c25cd","block_type":"box","text":"A-4","page_number":194,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"5353edfc-1ec8-49b2-8624-13af8c150381","block_type":"box","text":"NM1026U-6049097-194/259","page_number":194,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4d069e93-e0b3-45b7-8479-a5ea277c31c6","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":"808b48f4-456a-4453-9d25-2d75ee94f2e6","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":"ae05f7e0-6c3a-4dd5-9db3-9679d1dc2a7d","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":"402548ac-30ba-41e9-adc0-e800dfce432b","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":"f82fc829-9735-4903-a5ef-ef4d8b489a4c","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":"0e4e9ef1-8a94-4190-9455-d42521ff9ab6","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":"3ad3c79e-f0fc-4560-a3ae-ef2dcee153c9","block_type":"box","text":"market practices.","page_number":195,"box":{"x":117,"y":180,"width":132,"height":12}},{"id":"5bfd859a-8d7a-4568-bac2-24d7ed393fc9","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":"48199fc0-9f4e-4dcf-be08-0f753159dde0","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":"fb5f38e4-6ea4-4659-9223-bf8799c5712b","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":"1f6e7a29-57fe-43e9-8516-be121134190d","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":"07e9d7c5-6de7-48b4-bdce-60bac620fc51","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":"f5ff5a5f-fee0-4e68-831e-6a5b42d780e7","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":"79946277-be99-402f-be7b-91db6ec68fe6","block_type":"box","text":"affecting creditors’ rights.","page_number":195,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"92d0cce8-d22f-4e23-9c7f-61b56caca852","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":"b4221906-2896-4289-81f3-fd13bcb8bd23","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":"10eeb4b5-32b2-4c57-ba5e-c8b09b622dd2","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":"add757fa-8928-459a-bb5f-8280bfc1e1e4","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":"c012c08f-bc6d-4024-a423-5db58cf57d01","block_type":"box","text":"operating company and holding company obligations.)","page_number":195,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"c08dd156-b6eb-4162-80cd-e5b3e8fab43d","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":195,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"b8c81a3d-abd3-41c3-878a-917d92bc7ff0","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":"03b479fa-b5b2-4a87-9c4b-cb778d0461de","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":"60934937-40c2-4466-9100-a4cf0308055b","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":"a7698f16-c93a-4ad2-96e1-632fa4e6f7b5","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":"3bb01d34-9b03-47bd-9c34-3c7cc58baf13","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":"b2b4828e-606c-43c6-910b-6d06f0454d6d","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":"2303ff5b-6bf7-47d9-955f-f786d0eedaec","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":"11ae9583-48c7-441e-ae98-ac32fbfb0a54","block_type":"box","text":"still strong.","page_number":195,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"b709aeed-28a2-46ca-a1b1-b7f7812217ca","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":"0eb8b521-987e-4b07-b6c4-9f32d187bd2a","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":"31536207-8dc6-44ce-b280-756481d0994c","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":"0e142ecb-7373-46b3-9bf0-4c3023e4ebca","block_type":"box","text":"BB, B,","page_number":195,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"7bb0ab00-338b-4d35-9312-031cd6f17939","block_type":"box","text":"CCC, CC,","page_number":195,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"66bd237c-2988-49d8-9f64-d7a2c7ff730a","block_type":"box","text":"and C","page_number":195,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"61b0624d-6bd1-4471-bab7-a33d89a99d50","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":"3494bd41-a7ba-4501-aa01-e6410ef55726","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":"72cd0a54-a226-487c-b1ef-fc516be1be75","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":"fb6598e4-8532-4007-ab89-87bde5eadaad","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":"010a5645-a0fb-482b-b82e-6d586febd92a","block_type":"box","text":"adverse conditions.","page_number":195,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"de055809-0458-468e-9392-ecaa41abd964","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":"e7a14c88-a4af-4849-9e3f-d5310e4fe04b","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":"435f70e2-1780-46dd-a8e6-78e2ee460681","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":"5a4aea93-0c22-45c4-95df-ddcdaef25d28","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":195,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"17e03fc8-a74d-4174-9d37-9f9c43573306","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":"898cb7f1-8444-4ba1-a89a-f12e6e482c06","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":"ffc42515-dfe3-40a9-aa4b-fa53396d83eb","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":"5b73f983-e0aa-40d3-b6cb-ffd01ab314b8","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":"96bc2679-ac61-47ab-8e11-bc8913baf1cb","block_type":"box","text":"A-5","page_number":195,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"cb52b38f-18bd-43bd-91af-5c4112a8d870","block_type":"box","text":"NM1026U-6049097-195/259","page_number":195,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6e8eaaf5-1ba0-4ee7-bd12-e45d85ab7695","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":"7aead939-7938-4a6a-8803-5348b115a169","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":"06b8bc3b-6ccf-4d00-ac05-4caec50ce7b1","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":"66666aa4-51e3-4dbd-8355-e639f6368362","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":"5c857a58-708c-4e38-a996-ac13a83ea3cd","block_type":"box","text":"commitments on the obligation.","page_number":196,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"474e07cf-f67f-4c32-90e5-b5a13539c347","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":"b4835e2e-7478-4350-8ecf-653a78ff9af6","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":"06b8bc61-d229-47e7-a284-d2f92aa80ff5","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":"ac76d92b-3839-4cc7-b08d-960c9b00a2e0","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":"2098ef13-c8c2-48cb-9549-4b7b997fbc57","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":"e5839f7f-7458-4531-86fa-5ae84ea17235","block_type":"box","text":"obligations that are rated higher.","page_number":196,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"00759b8b-54f9-4a75-a4bd-b4ecc671bdb4","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":"2690131c-e1b0-4094-b507-e9a3da89c516","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":"ac29693c-e107-467d-bb81-e4b9ec49e063","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":"dcc4aa7d-b14b-4804-8a7a-65f764faeb0a","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":"78166e21-3d28-482e-ba44-424cba7b01e1","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":"cd419dd5-4878-4667-aac1-4a936c7415e3","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":"df73f3fc-d564-4dfd-9d51-6840859834ab","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":"03fff456-ce19-4afe-8fbd-9c28be236dd4","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":"06447156-2fa0-451a-bbbd-a1e1af8b03d8","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":"6b70a35e-250a-4f04-a6ed-da1d223d89be","block_type":"box","text":"within the rating categories.","page_number":196,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"ff6d0c13-e943-42b9-80e8-d0c9d491861f","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":196,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"1d2d2831-4807-4308-b673-be6a1a3157fe","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":"8a41cf30-9e1a-4cb0-a0f0-c2ef0a3cfba1","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":"ba843619-b02f-4cba-9346-7fdd1b407225","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":"0e9c1c12-1446-4c85-ae92-b4e2bad0cdd6","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":"b84d5c34-aa04-4035-bf7b-684288e9dcd4","block_type":"box","text":"strong.","page_number":196,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"e66f2c4f-179f-4632-8591-7d43e4683619","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":"73226814-6bd2-4e67-9c9d-22e7f2e83d91","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":"60d2235c-dac7-4522-95a0-c509b5dabf55","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":"4e560910-628f-4c22-8058-ebff6281eddf","block_type":"box","text":"obligation is satisfactory.","page_number":196,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"c8eb27ad-6bbb-490c-a7c4-62acc5c9233f","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":"2984f8f8-a593-437c-af45-901d6e3415d5","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":"c611dbf7-0549-433b-8fa2-f919452a8001","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":"026cf1bf-d2bf-4eb6-9803-c08e18002d52","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":"8e8b1b85-7566-4cde-a131-7aff896077e0","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":"3d5a3c44-bbb1-4140-ba82-34727b7a2d0b","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":"d59e9c39-89ae-403b-b737-2009d00de147","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":"ec66bc25-d6cf-4450-b09f-bea6fa19bb05","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":"a54a8916-340b-4944-9e2c-cb4ce4d54604","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":"36ce7132-24e5-43b8-82f6-fdc6b2b67227","block_type":"box","text":"financial commitments on the obligation.","page_number":196,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"20e335db-4744-4a0f-81f1-580f04fdf7c4","block_type":"box","text":"A-6","page_number":196,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"0b6989ed-819a-439f-9e96-9cfb72cc40e6","block_type":"box","text":"NM1026U-6049097-196/259","page_number":196,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4f07567a-5e89-43d8-be4a-be8fa6ec6d5f","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":"214891e3-a452-48c9-a271-158507327e96","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":"2e25d83f-5c50-4f4e-b55d-fe7437b84fb8","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":"3f0bdbc3-b015-45c4-b092-2f8b5455855a","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":"d88c8432-1da9-4066-ad29-a60e28bb841e","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":"ec75cfb0-578e-4b0b-9a11-c8037bad450a","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":"2f95b608-378d-4855-a399-c4a0eb18a60e","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":"73656baf-ce3f-40b6-8d9f-e7f093b174cc","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":"d81ed975-8bd9-4110-91db-e93f020e7377","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":"9eb9f0e7-5d29-49cd-814e-e9cb55de4507","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":"62358911-41d9-45c6-8122-97fcdc563fe7","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":"89d73bbd-5da3-486c-8de1-7f9cade16e6f","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":"ad53aaaf-72b9-4e23-8961-03871124d172","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":"b0bc121a-05f9-4880-9e13-40d9cf6ac698","block_type":"box","text":"considerations:","page_number":197,"box":{"x":116,"y":312,"width":118,"height":9}},{"id":"2b64a982-bbe4-4c58-9059-72644b7c4100","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":"3fca8560-21e0-4c3e-b2d9-c6461882c988","block_type":"box","text":"will be treated as a note; and","page_number":197,"box":{"x":149,"y":355,"width":220,"height":11}},{"id":"3e678cc7-f024-4f9c-967c-c23538923eb1","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":"99d593f4-2e32-437b-817f-4d0979f94292","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":"1aadd62d-728b-4e16-9705-c2e11dc83f42","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":"c06781b1-2007-448b-8bb1-3031cad3d11c","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":"c47ad8f7-eabb-475d-90d3-4209ae0da76c","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":"8396adbd-c9d2-48e7-862b-63d90837aabd","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":"6b1aefa4-5f00-4dd2-b10f-fe6d6c16f8d5","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":"2cb54839-1481-4b7c-9a1d-c1944800385a","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":"ef1ddc88-381f-413d-af32-ae1a568413ce","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":"b9f1a46b-81f7-498a-960e-cb06a33166f9","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":"3a725be8-245f-445b-af25-eb2332c843dc","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":"9a01e140-9c80-4ba3-84a7-7765f59d2e70","block_type":"box","text":"provisions.","page_number":197,"box":{"x":226,"y":579,"width":84,"height":12}},{"id":"3e1b46b4-f78a-4d3b-b16b-6e6dc19f5c49","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":"cabc6c03-c05f-44ca-ba0c-88eec0a46249","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":"80d748a6-af3c-4348-8b93-2a9d6721ed10","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":"218de7e7-0c4f-4360-b360-2f074f8a547c","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":"7057c03e-ee6d-42be-b651-c0bab2aef45c","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":"294d1ee6-c6e6-4c0a-b2b9-a0759a6975d2","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":"25957963-cf7f-479a-ac51-0067b0fe59c1","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":"955c4313-cd50-489f-a18b-f238caabae7a","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":"63c88556-82dc-4e82-826b-404e83aca642","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":"6a565928-9958-4ca1-95e4-2f28c8590fef","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":"62b60680-0c77-45d6-a814-a6219d39c18b","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":"e1bf656a-a36b-48ce-9593-e9321ffd1c48","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":"53f9b35d-c352-4981-b901-39b70178bee8","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":"d670bab9-dd21-481f-915e-f65d6ee37a83","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":"d5530500-43a7-476d-b864-8f28565f6b9e","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":"5979d8bd-43f4-4c20-94f5-31555b9e6c94","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":"88be467f-f939-47fc-8262-82ada8c62677","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":"b6761303-fc4d-48ec-afc1-de645db96ae8","block_type":"box","text":"A-7","page_number":197,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"c8ed5e6a-dbed-4c98-8116-4b626e914521","block_type":"box","text":"NM1026U-6049097-197/259","page_number":197,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e8a10fe5-fd72-48b6-b86b-0af084abbb25","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":"5277ddbc-eddd-4738-8493-bc455f6c63bd","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":"eae07116-e22c-4653-a695-9f677ff88fee","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":"82837699-954e-4d8c-82e3-c7814aac9ec8","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":"9e76f751-531e-4b48-bb90-4d38052e41e0","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":"f62ace31-a6a2-46d4-8220-49bb9c74982b","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":"a935dc5f-931d-4950-b9e3-7419239db4e9","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":"a18971a5-2b24-4a0b-b3a6-248dfe0ae9aa","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":"36418b02-76e6-4605-a2b7-ba460128505b","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":"49f4f024-d367-42da-b800-83a28bb6daa2","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":"5951981e-b1d7-4c3b-bd29-18dc14859ca4","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":"6ddfa232-ad4f-48ca-a998-b726c17950bc","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":"2eb20993-4437-4113-9f9d-53e9b48e623a","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":"9033ff93-4485-4588-a834-cfa1252a14b5","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":"3dd6c9ad-8728-430b-90a6-999e5c33b6a9","block_type":"box","text":"commitment.","page_number":198,"box":{"x":116,"y":351,"width":101,"height":9}},{"id":"0d2fd8ad-d8e6-472e-8b18-fafcf6b0c08a","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":"a1262b0e-bb49-4e11-9cf2-c52d4a2d6a9e","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":"9f0b59b0-c2f3-435a-a9e0-d51eb97cebf6","block_type":"box","text":"bonds).","page_number":198,"box":{"x":117,"y":413,"width":59,"height":12}},{"id":"7545400d-dea0-4ec3-9382-c0fb330549e2","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":"a4f6e4b8-019e-4315-a69d-7573f50133b1","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":"0f069112-17a8-4a26-a118-c7b06c47ad9b","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":"d7cdd426-ef8b-41cd-8951-d09b74c14d23","block_type":"box","text":"i.e.","page_number":198,"box":{"x":788,"y":475,"width":20,"height":9}},{"id":"46f806de-0c8a-42ed-baca-0452b7ee271c","block_type":"box","text":"rate to a","page_number":198,"box":{"x":810,"y":475,"width":71,"height":9}},{"id":"d8282f87-2f6c-4e65-b419-06ab9b7a89f7","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":"792a49d7-e2f4-41af-934f-a5261a39d236","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":"75cc867f-ce46-46b4-8031-c50d8221aca0","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":"8a388c68-998c-4e26-b46d-6c62ffe2254b","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":"f90ca950-f9a2-4dd4-b782-dd6805553498","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":"333bd14e-12d0-46b5-b224-c0cb6c95df66","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":"fd641798-a62c-487e-87cd-5b4ba9effc17","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":"c751fc08-db9c-4033-acdb-4337fa0fb810","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":"2508b552-8667-4d68-ba47-6062a291d6fe","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":"8fa39042-a305-49bf-ad1e-d23af0267267","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":"ff846ef6-bd58-4852-bc12-da1f294266a8","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":"73719ab2-c0fe-4321-95a5-c9c62465f324","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":"8e190cd1-0ec6-4ec5-92c5-f2a8049418eb","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":"b68c1b0b-3b16-4a35-bb14-dd4878c6779f","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":"aee946f4-1470-46ff-acf1-60bb4ffc79ba","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":"fd205a76-3e67-409e-bc78-68cee94226e1","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":"1318300b-b2a9-4acf-bbce-44aed869c24f","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":"822199a9-293c-4a6c-bb00-5c1ee1e07557","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":"024407bb-85c4-429f-888a-fb4db73eee82","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":"0415e46d-3690-4cb4-b87c-02e5f75f1c90","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":"ef251138-c985-4bd3-b71b-3d253fbdd913","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":"53fbee5e-ee50-47f7-a602-3d5af95895e8","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":"4bc49ddf-aa1b-4f92-b729-4217d9e202b2","block_type":"box","text":"A-8","page_number":198,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"0e16901d-3f78-4ca4-8f37-4c2707dcde1a","block_type":"box","text":"NM1026U-6049097-198/259","page_number":198,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d11c24cf-2c23-4bf6-949a-c808f7257d35","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":"33e4006c-f678-4fdd-9b86-9baf909724d8","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":"506231fd-a3e3-4bdc-bcd3-72532f8733f9","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":"c0ef6ddf-d176-4550-85d3-f25243498be6","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":199,"box":{"x":116,"y":134,"width":347,"height":12}},{"id":"21440617-e98f-49d5-9d41-d5cbeb6e9a13","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":"aeeecdaa-af30-4ce8-8eac-8b8d716cafa1","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":"98051c9d-1581-4a13-a030-b9db25e1d00c","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":"e22a0c59-8ffa-448c-9218-2b13d3fe87ae","block_type":"box","text":"complement issuer and obligation ratings.","page_number":199,"box":{"x":116,"y":211,"width":315,"height":12}},{"id":"1ec043d0-ee1b-4a5a-9fcd-64ad08f2a339","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":"909f6c01-9796-4952-8b0b-e8f95aa2edbe","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":"70d40a12-48be-489e-8368-570d84dd7668","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":"56f5fd19-f850-48bf-a466-728730f05369","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":"1cfac099-aa33-491a-a7ff-dc0dbccad2de","block_type":"box","text":"events.","page_number":199,"box":{"x":226,"y":318,"width":58,"height":9}},{"id":"3524b5bf-74c6-431b-b00a-b2d9852a04b9","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":"9c4f4936-95a6-494b-8157-0f85a9204640","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":"e7bdd255-84c8-4ab7-88d1-86e7b45caf7d","block_type":"box","text":"significantly vulnerable to foreseeable events.","page_number":199,"box":{"x":226,"y":370,"width":343,"height":12}},{"id":"2e4b0bca-3081-4595-843a-03a0b91f6ed5","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":"60626140-1d74-48cc-8ec2-02a9cae89f29","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":"d5d4f3f6-cd5c-4c1a-b32d-4cc5055ba12c","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":"fe688af8-2e50-42c9-b0c7-6f589f2c7aa0","block_type":"box","text":"the case for higher ratings.","page_number":199,"box":{"x":225,"y":438,"width":204,"height":12}},{"id":"f26b31b8-6347-40b3-8052-edc3501ebee1","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":"f47dc156-3a8c-4f1c-83d8-740605038438","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":"80cd64df-7814-453e-9fe0-bfd949ec4825","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":"2102370f-c898-458e-9287-81e4dd1139b8","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":"5ce8ba84-708f-45df-884b-6861e07c302b","block_type":"box","text":"lnerability to default risk, particularly in the","page_number":199,"box":{"x":576,"y":514,"width":308,"height":12}},{"id":"eee20549-e3b5-465b-8fb5-e3fbd0ad6c7f","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":"f8f6f7fe-4623-4060-8431-75955acba55e","block_type":"box","text":"business or financial flexibility exists that s","page_number":199,"box":{"x":226,"y":544,"width":305,"height":12}},{"id":"3b149ea5-1b56-4a38-84e1-080a1e148f32","block_type":"box","text":"upports the servicing of financial commitments.","page_number":199,"box":{"x":533,"y":544,"width":345,"height":12}},{"id":"45fbcded-0a0f-4e6e-84b4-6bbc99824eb9","block_type":"box","text":"B Highly Speculative. ‘B’ ratings indicate that","page_number":199,"box":{"x":117,"y":567,"width":417,"height":12}},{"id":"f0f21ec9-745d-49ff-85f4-98fd9f1a292b","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":"304cb3d1-d7c8-4758-8607-599e26f1f9d0","block_type":"box","text":"margin of safety remains. Financial co","page_number":199,"box":{"x":226,"y":582,"width":276,"height":12}},{"id":"558698de-a0a4-4a37-bcf3-e9f36d30aa65","block_type":"box","text":"mmitments are currently being met; however,","page_number":199,"box":{"x":503,"y":582,"width":334,"height":12}},{"id":"a85f3d53-316f-454a-89f8-52ced1702ac3","block_type":"box","text":"capacity for continued payment is vulner","page_number":199,"box":{"x":226,"y":597,"width":293,"height":12}},{"id":"40dcea6a-4137-4e38-b622-718a351add14","block_type":"box","text":"able to deterioration in the business and","page_number":199,"box":{"x":519,"y":597,"width":296,"height":9}},{"id":"c9f6505b-d6e8-4bc8-bfb5-cf819a6323a4","block_type":"box","text":"economic environment.","page_number":199,"box":{"x":226,"y":612,"width":174,"height":9}},{"id":"8b4748b8-74da-4a26-93e9-59fb1f6e70fd","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":"6eb4525f-4c1f-419e-baaa-baacdd553ed7","block_type":"box","text":"real possibility.","page_number":199,"box":{"x":226,"y":650,"width":114,"height":12}},{"id":"48cae86a-bc1b-4520-be2b-b267f4b134cc","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":"39b08df8-19d1-4b51-8413-1a08ca044a27","block_type":"box","text":"probable.","page_number":199,"box":{"x":226,"y":688,"width":68,"height":11}},{"id":"03c95ce3-dac3-48b9-a2f7-d484f6218a0b","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":"6e1cecd7-0b53-464b-bd00-bf65c47a87d0","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":"2d348f2f-331a-4764-b97f-16e48d821af4","block_type":"box","text":"impaired.","page_number":199,"box":{"x":226,"y":740,"width":67,"height":12}},{"id":"49dd5142-09ca-4589-b5ed-8185dee03131","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":"f4b44062-86c3-41e4-97d1-d9ddd11c606d","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":"614dc1ed-c5d5-4a25-8911-67a01dd9b9cc","block_type":"box","text":"uncured payment default or distressed debt","page_number":199,"box":{"x":226,"y":778,"width":309,"height":12}},{"id":"45a4c065-638a-419a-ab98-40dc3b1970e5","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":"7ce65f10-9b0e-4285-a9eb-0502a3825405","block_type":"box","text":"financial obligation, but has not entered into","page_number":199,"box":{"x":225,"y":793,"width":309,"height":12}},{"id":"d40438b9-8dd3-4c5f-aa2d-1d8901e3f04e","block_type":"box","text":"bankruptcy filings, administration, receivership,","page_number":199,"box":{"x":540,"y":793,"width":330,"height":12}},{"id":"2eb050de-9020-4a40-9cc9-ce3a06875f70","block_type":"box","text":"liquidation, or other formal winding-up proc","page_number":199,"box":{"x":226,"y":808,"width":303,"height":12}},{"id":"85be8daf-1655-4598-b2f5-0b3b3434cc7d","block_type":"box","text":"edure, and has not otherwise ceased operating.","page_number":199,"box":{"x":529,"y":808,"width":338,"height":12}},{"id":"063f4505-1021-4d59-aa8b-5fbc3758857f","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":"97bd0f20-00fe-4ea8-88a9-de9506da5680","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":"256f5df8-21cc-4c03-82c6-ded847de2221","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":"9586c456-5ad0-4e5d-be9f-c97c8096886c","block_type":"box","text":"A-9","page_number":199,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"0a8f2da6-563b-4e7a-96f0-d4cdacdc3cf8","block_type":"box","text":"NM1026U-6049097-199/259","page_number":199,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"765dab0d-d9b4-4940-aac0-ebec25a2cc63","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":"a7573c42-4a40-4f9b-aab5-8089878e5c87","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":"0484a11f-71b1-462f-9bf5-1b3266a4dfe9","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":"d3005f55-3cea-40bf-a867-e35e88d5b455","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":"db3124b5-38e4-43f0-889b-e4b3b87e6740","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":"3f03e88c-156b-41e2-84cd-84d2cc4caf4a","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":"a827db1f-9eef-4226-8209-8eeff25581ca","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":"bd6dddc2-93b6-4bc4-b0f3-3b1c306e77a8","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":"1fdb3a00-7670-4c4b-ad7e-d7bcdedfdc19","block_type":"box","text":"documentation governing the relevant obligation. 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Typically, this means up to 13 months for corporate, sovereign, and","page_number":200,"box":{"x":117,"y":289,"width":726,"height":12}},{"id":"e3543174-9b5d-4ae2-b659-7a615f57daa6","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":"9c729d60-9b35-4798-8080-1e78e5685763","block_type":"box","text":"Fitch short-term ratings are as follows:","page_number":200,"box":{"x":117,"y":335,"width":289,"height":12}},{"id":"e7c52079-3cf8-494c-a598-a57abfc56c48","block_type":"box","text":"F1 Highest Short-Term Credit Quality. 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Potential material conflicts, and the resultant","page_number":201,"box":{"x":117,"y":740,"width":736,"height":13}},{"id":"5dba1dbc-eb3b-4244-9f50-32377703b508","block_type":"box","text":"potential for undue influence, might be due to a relationship between the investee company (or any","page_number":201,"box":{"x":117,"y":756,"width":734,"height":12}},{"id":"2ea89f36-d043-44c0-89bf-4e24cdcec178","block_type":"box","text":"shareholder proponent or dissident shareholder) and BlackRock, BlackRock’s affiliates or employees,","page_number":201,"box":{"x":116,"y":771,"width":752,"height":13}},{"id":"a2a3cbf9-c5d4-4297-ae73-aa45b8f80eed","block_type":"box","text":"or a Fund or a Fund’s affiliates. BlackRock has taken certain steps to mitigate potential conflicts, which","page_number":201,"box":{"x":116,"y":787,"width":761,"height":12}},{"id":"46b39b38-f77c-42ee-ba52-a7ccf03be9ca","block_type":"box","text":"are outlined in detail in the Guidelines. 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It also may apply to holdings in BlackRock’s","page_number":206,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"7d2d20c3-d7d8-46fe-8fa7-e0ddb622e0e8","block_type":"box","text":"index and active fixed income strategies, to the extent those strategies hold voting securities or","page_number":206,"box":{"x":117,"y":258,"width":709,"height":12}},{"id":"1b0eaf39-99de-48bf-9862-677bf041d570","block_type":"box","text":"conduct issuer engagements. The guidelines are not prescriptive as active portfolio managers have","page_number":206,"box":{"x":116,"y":273,"width":742,"height":12}},{"id":"8557ce6b-2ce1-47fe-aa80-c0a75f0d4f0e","block_type":"box","text":"discretion as to how they integrate these guidelines within their investment processes in light of their","page_number":206,"box":{"x":116,"y":289,"width":748,"height":12}},{"id":"89a4a427-4cdc-4065-a9c9-4b50855c0c24","block_type":"box","text":"clients’ or funds’ investment objectives. There are separate, independently developed principles and","page_number":206,"box":{"x":116,"y":304,"width":748,"height":12}},{"id":"87fa09c9-f8c9-49c5-accc-5d8fe261e058","block_type":"box","text":"voting policies that are applied to BlackRock’s index equity investments by a distinct and independent","page_number":206,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"5bbac5b9-9d21-449f-bb49-b4ed9e807b44","block_type":"box","text":"function, BlackRock Investment Stewardship.","page_number":206,"box":{"x":116,"y":335,"width":341,"height":12}},{"id":"c734278b-3271-4f51-be0c-11fda553e1eb","block_type":"box","text":"1","page_number":206,"box":{"x":144,"y":789,"width":2,"height":5}},{"id":"c1526bf9-3144-4562-b43f-c137c6f6941b","block_type":"box","text":"This document includes BAIS’ benchmark policy, which covers nearly all active equity holdings in BlackRock’s","page_number":206,"box":{"x":170,"y":789,"width":653,"height":10}},{"id":"ad588103-b66d-4383-9e07-29eb6102ee2b","block_type":"box","text":"fundamental equity, systematic equity and multi-asset solutions strategies. The benchmark policy also may apply to","page_number":206,"box":{"x":170,"y":802,"width":685,"height":10}},{"id":"8fa1d9db-395e-4dfb-a792-a9287d0b9f27","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":"a602093e-73c2-4483-b4d7-120624875b5c","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":"66705495-197a-4c6c-b803-f78a403e675e","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":"17987983-563a-46f0-8f8c-8a1548b5eecd","block_type":"box","text":"2","page_number":206,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"816a7652-bc08-488f-a79f-375611daa58f","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":"fe27b6c1-dab4-49af-b7ab-bb53ecced39d","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":"80b91e09-25fb-4a79-acee-8876cfc6ba3d","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":"9456d015-f937-4735-8e84-3bd2d68e3157","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":206,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"98fe9fe6-3f7c-4ff8-8ee5-8eb2b26918ee","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":206,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"f7255065-8077-487a-9db5-52319a7830b0","block_type":"box","text":"3","page_number":206,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"154fb316-b126-4f33-b616-0640808eeacc","block_type":"box","text":"NM1026U-6049097-206/259","page_number":206,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e05c186a-12e2-43f7-8383-d7facdcaabed","block_type":"box","text":"Introduction to BlackRock","page_number":207,"box":{"x":396,"y":87,"width":213,"height":10}},{"id":"a8e39498-0eed-4f30-8fba-65f4d5e4bbaf","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":"faa62a60-5d07-47f4-a807-95ee3eac7afd","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":"ba4d9402-a6d5-4ef6-841a-610cd22a3af4","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":"5c2bd641-2c71-4db2-b075-1b9741c03a98","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":"7a1dffc6-2670-447b-b90d-971b4e0075eb","block_type":"box","text":"construction decisions. As a fiduciary, BlackRock in","page_number":207,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"68edd2a2-8ea7-415d-8b5d-817c0c0a21ca","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":"c1c49f3e-3cd3-433f-a5ba-27e3fe326fb1","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":"2e789c7f-4fb7-416f-a1ec-3a0a7c560778","block_type":"box","text":"anding clients’ long-term investment objectives and","page_number":207,"box":{"x":495,"y":164,"width":376,"height":12}},{"id":"ef2c6f15-cb54-464d-87bc-920457d65a21","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":"8ded6dba-b63b-4600-a3e4-51c1e3edc3fb","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":"2b058339-4f4a-4494-933c-603b65ca6334","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":"785b9a95-98c9-477f-ae15-b80e65c19374","block_type":"box","text":"underpinning this work with research, data and","page_number":207,"box":{"x":482,"y":195,"width":350,"height":12}},{"id":"2542a4ec-c702-4b3c-bc0a-0599f9123af2","block_type":"box","text":"analytics.","page_number":207,"box":{"x":116,"y":211,"width":73,"height":12}},{"id":"0b52f0f2-c3b0-418c-9512-f025c1b37971","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":"10ddc7b0-552f-479f-9e00-abb21d93c971","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":"6594f2ec-3056-4a09-9705-50995820b1d3","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":"60cf2a07-be62-4e3d-80ea-ead7eae4e992","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":"68b8bcb1-c189-40f2-ac50-cca3fd0f1e48","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":"5c1fe284-b113-4443-af9a-19b5811ca992","block_type":"box","text":"our clients are invested.","page_number":207,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"500fb587-fefc-453c-9912-2824c0e049e6","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":207,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"70126a98-891c-430b-adaf-d5fca8c8afee","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":"60740669-62b8-43d0-a7ec-bf74698138e6","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":"037f6c49-7379-4fb5-acc7-a4eb62144ee9","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":"810d92a3-5f74-4141-b88f-9daf11b5b58d","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":"fc723af5-d41e-4b9d-93d6-66262eb45ffc","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":"d4ec60ee-7586-4512-80e9-50a9cd2dd10c","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":"667a68c2-d63f-4449-88ef-a2bbbdb8631f","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":"7102804b-be7b-468e-8a13-388bd2bd7b09","block_type":"box","text":"fundamental active investing.","page_number":207,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"d685fe30-0f41-4888-bbb6-1aff45091082","block_type":"box","text":"3","page_number":207,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"8e0b66bc-f3db-46c9-bf3a-4b12dd44b63d","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":"cfe526e2-b628-4cf9-bfeb-44bd82357726","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":"df25100b-47ff-4e25-b7a1-b6367018a27c","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":"32223dd3-2501-4754-8fa4-ec646c022719","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":"46846203-ae93-444d-9006-e676a821b884","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":"f575566e-741c-43d6-b037-d81209adb56f","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":"6fe17fe2-c436-46db-852c-13a82c37187b","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":"c74b3f74-4052-4fb2-9b7f-394583da599f","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":"8fc979f0-b5d7-4409-acec-fecab7a1e317","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":"0a857afe-cf6f-441e-a696-bcf8a7fbc3d3","block_type":"box","text":"mutual respect.","page_number":207,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"9bd7a1d5-3756-4989-992a-5cbb9d007ccf","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":"2ebaf4f9-67c5-4e12-8f32-c948f2057c3d","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":"e8e461e5-2b39-45c3-8b93-b8bf9de3985f","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":"4bbe37f4-4662-48c7-8624-b012cad040b5","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":"75a43f3f-f876-456e-8f62-74b79ca9efd4","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":"ff2bd17f-6319-4db0-b353-7dea97854d87","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":"bff85c43-b800-4624-9ec9-80d0603dd645","block_type":"box","text":"management teams and board directors","page_number":207,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"fa60981c-f802-43d1-a82a-089e13f54cd0","block_type":"box","text":"4","page_number":207,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"4114ee48-86de-4bc7-93d4-5643f1d88b56","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":"538c9265-c92f-43ff-a751-e24eec200557","block_type":"box","text":"3","page_number":207,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"66e0f4a8-c1d0-45c0-aa80-388514cc19c3","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":"0bb39a44-8045-4baa-8c4c-de72261277a6","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":"d73d8359-3cb2-4ad6-817a-e38e3ca86844","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":"c50b31cc-cef6-474f-aeb3-cbed5e65aa47","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":"5ec2fb45-c605-489d-8de3-53768f52aae7","block_type":"box","text":"4","page_number":207,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"b7f1e099-6ca6-40de-a1b2-dc589d05739d","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":"f14fe01e-cf4a-4a83-8aa2-f97d6b787057","block_type":"box","text":"and their members, where relevant.","page_number":207,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"240d7ef0-5579-4d2c-8a02-5234c9679b72","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":207,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ef047adf-e2f8-46df-8db2-498a673936ee","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":207,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"d8291117-aee3-43c3-b072-d367779de074","block_type":"box","text":"4","page_number":207,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"d1ff06f9-fbc9-4b79-80f7-1f0c7c9705e5","block_type":"box","text":"NM1026U-6049097-207/259","page_number":207,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"57b9ca8a-c83d-4c59-b54a-5af4e3e561da","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":"b5573045-b412-4ac6-a770-b069e37c7392","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":"fe05fae4-aff3-4b7e-8fad-d73618f1a60a","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":"15220492-6af8-4fa8-8bb5-abeb87f0053f","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":"e6d4d6cc-7a46-439d-9633-9e749f89c527","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":"c004f246-520e-44b8-8c8f-6fcb6162aae2","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":"2c4fd59c-f62e-4256-9e5d-eabb366a3fa2","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":"74c96386-c65c-413e-8f2b-b48cb8ecb2ae","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":"3c111568-8197-4577-9928-785d542939e5","block_type":"box","text":"Our approach to stewardship within active equities","page_number":208,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"1c87831a-fa45-4257-adfa-0145c83e8dfb","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":"a01cdcf6-0752-46d3-91f2-b123edcc0d26","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":"44013379-37a5-4e58-aea4-2addc7908e3a","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":"cdc80b77-b7d5-47e7-941f-f2f9b5ff6b64","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":"b6be5c38-2d49-47f2-8399-af9abe593df1","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":"37f2b416-6923-42d8-a596-d8e5f3c643bb","block_type":"box","text":"with clients and funds.","page_number":208,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"93ff248a-e834-4d52-a0c2-8e94b4ae29bd","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":"dc3bea0b-2441-4033-8e2d-d1da4bf0fac9","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":"dde1d509-42b8-4fdc-9441-d98e6b1e3b45","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":"c45fe8ee-9cd5-4c00-b598-dc3138be2da8","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":"510380e3-8edb-4638-8e89-1685c7ff8b25","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":"efee06d7-e56f-42c2-b4e7-d9b8b0d50119","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":"7bf673cf-309d-482a-9a60-f22fc5099e12","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":"e5e4d6cd-c57d-4b4d-83d7-ff6cfeceab2f","block_type":"box","text":"equity strategies.","page_number":208,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"3832e3c2-2dc5-4c92-92f3-30a7b468db33","block_type":"box","text":"5","page_number":208,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"25ee29bf-d2cd-47a5-9255-3b751424b50f","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":208,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"dc00f193-0a2a-4bcd-aad9-011ae5910469","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":"d08634ac-9d39-4f8e-923c-e7d4d8d058af","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":"e13a33da-856d-42af-8e43-0153dcde3456","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":"56ea5e24-c1c8-40a4-b450-edab6f8c9153","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":"c5323b3b-347a-4e34-abb2-da31db1f7fe9","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":"5a0dd125-1c1d-471b-a9a7-8fa90164e0d0","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":"8149e1d0-217f-4d6e-853d-984a09d681ed","block_type":"box","text":"standard terms and information in bond documentation.","page_number":208,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"de0f2c3a-cf1d-4dac-bbb3-30e60694f790","block_type":"box","text":"5","page_number":208,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"60fa92b9-fd36-4ba8-b576-a80f77fc05be","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":"4f30c8a8-2550-4904-9503-ece9278fb979","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":"5d007d27-c489-414c-b3dc-55d09792eb00","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":"00a172bc-8bed-46d6-93cf-d4667b1bb39f","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":208,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"3413cb18-f52c-4260-b893-0dcb7cee82ed","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":208,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"8d7c0edf-0dbb-489f-98ef-1ea3be7b178f","block_type":"box","text":"5","page_number":208,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"254a82e5-ed53-45fc-8d14-2b7537c04809","block_type":"box","text":"NM1026U-6049097-208/259","page_number":208,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0b34dbb8-198c-4d65-af84-0e64270b2b23","block_type":"box","text":"Boards of Directors","page_number":209,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"80721b62-76e8-41a1-939b-f9f12380c8f3","block_type":"box","text":"Roles and responsibilities","page_number":209,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"39dbd5ca-b5a2-489a-bbaa-88457736be3c","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":"9c8602ba-2099-4ec2-bc17-2f3ce47139e6","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":"063462dc-7264-42fc-ab16-0d9632134752","block_type":"box","text":"manner.","page_number":209,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"a5cf6583-4cdd-4cdb-9ef8-f30829ab5236","block_type":"box","text":"6","page_number":209,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"3406b579-f0a6-4b47-9ed7-b5e07fec9e14","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":"73007d09-c794-4a4b-8f7a-b1c6f01c1752","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":"8e6b1eb5-c22f-44b9-8aa9-3f0bf105093a","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":"536564b0-5b51-4ce4-a854-db009d7ed514","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":"90efe797-6f3f-4c00-ab9a-aea47bb52f2a","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":"8932f268-f16c-4bf9-85c3-84a04d89e7ac","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":"e4d266fd-a081-47c0-896f-143c743383d4","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":"30ce6bb9-b19b-4eeb-88b2-b38b53f9d9fe","block_type":"box","text":"tolerance.","page_number":209,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"92fb016a-eed7-4802-9e55-1db1ef7b8a7e","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":"49a831dd-9af0-4479-93f5-00846b90734d","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":"349e126e-c6ef-4818-b891-638e4c64da77","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":"b6e1a2a4-20fa-4f63-a5f7-c12043e2fbd4","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":"31f381e6-505f-4467-9be4-f02522af0e6b","block_type":"box","text":"and other stakeholders, as necessary.","page_number":209,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"6258ebcf-88ef-4f4d-9780-9ecd28521348","block_type":"box","text":"Composition and effectiveness","page_number":209,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"1b4ca5c9-e367-4364-8cb4-3dbe59d18823","block_type":"box","text":"Appointment process","page_number":209,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"e2976535-509e-448f-82b1-455d4fba78bd","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":"05f02b08-19f6-4ffc-8cdb-0e7a54204854","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":"5952c6dd-f7c9-4bb2-85a0-7c3cf5f16947","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":"1f83f798-24d1-41e9-99fb-e3ab2fc6124e","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":"348376a0-e142-41b6-99f2-b7c0a3f89efc","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":"b96e3215-32c6-4c73-b1ed-c3cfd4bc7bbc","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":"767808bc-06b7-4066-bafb-68b86345a6a0","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":"4395698b-890a-43c6-b9bc-e32f3b89ae44","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":"f5ffe61c-27d8-49e9-8527-35699735aae4","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":"a9850e6a-ff8e-4e2f-82e7-55a2aaad3e87","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":"c9184672-80a7-4678-b5eb-8a338d5247b8","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":"f976a072-c31f-42b9-b758-f2a43c353a31","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":"c570b66c-ce29-48e6-86e4-a252f5bec060","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":"f0f117ac-cad2-496f-beac-99c7e725871a","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":"04e1ab80-1c3f-41a1-9483-ddb2567a029d","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":"9c1fba4e-dba3-44c3-809a-bd38b86c0d7c","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":"16d2392e-0e92-486c-b436-620cfefc6736","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":"b0a1b56f-deb8-49bf-833a-f859d4462e03","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":209,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"f80045c8-8be1-453b-ab7c-236664a52adc","block_type":"box","text":"6","page_number":209,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"0c7073af-4547-43b4-8730-014ef878be9b","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":"3b64b6ff-5200-48ae-ab93-feb36545ad31","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":209,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"d8c3d2d5-e3c1-4dc1-955a-7b48652b2bd6","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":209,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b1b03a11-d590-4a9f-bc8f-c62b6de833ec","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":209,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"32e612a7-bef0-4813-96d7-6902559395b7","block_type":"box","text":"6","page_number":209,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"241f2847-21ef-4a9f-8f43-9484d3542f14","block_type":"box","text":"NM1026U-6049097-209/259","page_number":209,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5196f2e1-6629-47d7-8922-51c3676a3963","block_type":"box","text":"Independence","page_number":210,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"87e21e94-f5c1-4759-9898-a68c8318ab4e","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":"efe85131-a08f-40f3-836e-029b84f6aa6a","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":"14da607a-9e1f-4739-8ea6-a20a5f533804","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":"cee7978c-7bf9-401e-a714-0575a18a90b9","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":"257a2362-783e-43f7-ab17-33a35c5d45ad","block_type":"box","text":"7","page_number":210,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"08a5f9bc-fc66-40bd-b459-53e5a7e72fce","block_type":"box","text":"This also helps to ensure that","page_number":210,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"b95788c3-9215-44b1-9265-6ac2d23033f5","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":"d19bb072-7333-4864-af2d-4933e8262334","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":"567b2678-935d-4e82-8e68-c13a8fc21c78","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":"9baf7626-9637-4b98-bb32-f26e4d41d556","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":"f67ac598-69a7-4b1f-a9e3-277131779d60","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":"2750df51-0c91-43cc-b80c-b8a4686f1cce","block_type":"box","text":"Independent board leadership","page_number":210,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"c413853c-3f44-470b-8dac-3c835433bbd9","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":"33fbd386-338e-4931-b539-9231add7672d","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":"49354f88-e7fd-40a7-b2bc-3acc051e8cf1","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":"eac21ef1-2c2a-482b-b265-e3c013e54fc6","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":"c271c48c-e486-4b57-8464-bdf184e41b5f","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":"842a641e-d447-41da-b72a-4a28fd2b302c","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":"3a75e23f-6301-4bbe-8fd8-2cc2c1fe8412","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":"cb5193eb-7077-4428-a181-200c739e0a68","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":"7f2a555a-e787-4472-9b26-07da40a2490b","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":"94fbcc9b-8848-4b16-bef7-d0b6fcbc2450","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":"3983a812-95f6-44dc-9fd8-a860c17a2f19","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":"ab4fdd4b-f936-416d-8b41-3097a07c9568","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":"ff95be33-5736-4cee-bc08-4c9e2e1f9b54","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":"24f86174-30f1-4330-b15d-f001fe086a0d","block_type":"box","text":"not engaging with shareholders.","page_number":210,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"682ab731-7b54-43e8-b0e5-894734f263fe","block_type":"box","text":"Tenure and succession","page_number":210,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"8c1d53e3-d364-4bfd-a4ec-466097b62f8a","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":"691bdb55-f27e-4293-9c28-dc792398f0d5","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":"9f76be44-c8de-44da-a087-11dc1490b4fc","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":"b1bddea1-bdf9-44e7-97c1-327ce0356ede","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":"6f2a8f98-a3af-4c26-9b23-b7519c32af05","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":"4f14076e-965f-466b-abb2-d0c87d2c4884","block_type":"box","text":"and involvement in past board decisions.","page_number":210,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"f9d0f96b-0536-4a05-9c68-0519d5838f8d","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":"9e33e413-1c36-4111-bf29-5826b9795754","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":"e0b36374-b8b4-4055-b603-f593dc505db2","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":"0059e25b-de9d-42ca-bb18-282f73b6da63","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":"99e8b644-59fa-4bb3-9fd5-3b6cd8c72833","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":"7c30b399-5e12-4862-bf75-6ca9c0c13e32","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":"0336f9cd-41f4-46e3-839c-6c178a804f2b","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":"099b08fe-8b4e-4f49-a07a-1d0457c9db2f","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":"a60944b5-b369-470e-a9c0-d5f26362f496","block_type":"box","text":"7","page_number":210,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"0f57e971-65ca-46de-93f8-85adf577ef8b","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":"072591ec-c473-496d-b8a5-574f64eb4ba1","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":"8d050e4f-7622-4642-964a-0a55a27d191f","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":"0e949548-10cd-4e1a-883b-2f24b9ac4676","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":"dfc96196-8b19-4a15-9543-45a7de438ad7","block_type":"box","text":"and shareholders.","page_number":210,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"782ae015-df53-450a-8796-8884841a6f62","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":210,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a5585e40-599e-4f12-a7d4-f4553e9041a1","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":210,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"adf7479e-4fbc-4268-9bc3-c14e952ea348","block_type":"box","text":"7","page_number":210,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"e13231ca-7054-4a47-914e-b1577e94b0c9","block_type":"box","text":"NM1026U-6049097-210/259","page_number":210,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"433e1320-9848-47ac-b7c0-457606307156","block_type":"box","text":"Capacity","page_number":211,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"03e64bad-ef4b-4f46-9d9d-bb51566436e0","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":"5a09072e-568d-4e51-9345-daf410b0e156","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":"f0775832-2c2b-4ba9-9618-1e52a4fef0e9","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":"99d7a321-4bc1-479f-bcd5-c4a3edc4050e","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":"acdf8b18-4669-44c8-a593-c5397c4b3eab","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":"cfa9c5b5-2022-41f6-b50c-a9d29a5ebacc","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":"1e56449e-3d1d-445b-9760-2a457b93e825","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":"2332e645-291a-4b2a-81fe-aa0f51e468e0","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":"b7a32afc-2536-4fb3-99d0-2033fc2358a4","block_type":"box","text":"Director elections","page_number":211,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"bccf998a-acbc-43e6-9712-7aaa2f69ec35","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":"c257a210-a1ac-4fc8-ad59-9f1d8c93bc40","block_type":"box","text":"classified board structure","page_number":211,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"3ee450ac-ae35-4e81-97db-f88799b62fad","block_type":"box","text":"8","page_number":211,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"292f985c-3390-421e-b0c2-43922241620e","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":"83363764-5bdc-4eab-a288-7a9c6b0725ed","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":"1c542b91-39b0-49b3-ab12-0a4e1f7fc50e","block_type":"box","text":"as closed-end funds).","page_number":211,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"0be348a6-9db0-44b4-9cc7-613ca87020a2","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":"f9c3837d-c6f7-4a94-8ce5-56c9abeac588","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":"878e2323-bb7b-456f-9219-97c4a6e356cf","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":"7eba783e-2a1f-48bd-8c1c-d7b269953867","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":"9ef1bc76-ba04-4a10-b96d-8af07a778868","block_type":"box","text":"advance of the shareholder meeting.","page_number":211,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"940487b4-9320-4813-a674-a29f132811bc","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":"18445b0d-6520-430c-80f5-8b1b104313c7","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":"a07b2ae4-dfc0-409f-8d24-3c0ae3e3aa07","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":"f925d552-b776-43e2-852a-116189254469","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":"483f55df-197c-44f7-b9a9-1a09f97267db","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":"d0230980-86ec-4c30-ae0a-703bb0eef6fe","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":"278defe0-ff5f-4864-bfd3-2da1f5d2df68","block_type":"box","text":"performance of an individual director.","page_number":211,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"fff4c57c-a5b3-423d-af4f-d4e694cbb706","block_type":"box","text":"Committees","page_number":211,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"4aa2607b-caa0-4f30-882e-d3f42989fcf2","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":"8b591fb1-63d9-4588-95cb-e7e3530ee71c","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":"56926dd3-76ae-491f-a5d9-dcf82993d2ea","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":"510925bc-dee6-4856-8cae-0d888ecff414","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":"a4df080f-f841-462d-801a-3f578bc86fff","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":"aded279c-4f73-4ebe-9f5c-09c612aaa6ab","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":"ac3764a5-b03f-4235-beb7-cad642cc42ff","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":"24856a01-18fb-4fb4-a2fc-e04fb6aaf047","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":"5f720b63-3106-463c-a12e-10ffe77390aa","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":"28e3a5a1-b49d-40d4-98ae-f6a87a5c39d8","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":"775fba7e-4a8d-40ab-8373-c48011837967","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":"f924b8c4-27f6-402b-875d-796ce9e772ca","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":"0befe887-85ce-4567-9cf1-bad04f9469c9","block_type":"box","text":"8","page_number":211,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"23f88026-2b13-454a-be38-f46f7982e866","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":"da5578fc-fa3d-4fd8-a4fb-b0ca05bfcf09","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":"b56b64ab-a936-4b85-987a-7fe14efe6696","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":211,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6bb80cb0-282a-4756-9863-291e7afb3b75","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":211,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"95cd3a6b-02a6-4bc8-97fc-523948ee2fc1","block_type":"box","text":"8","page_number":211,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0aa53b14-70c0-4d84-b744-dfe0d38bf70f","block_type":"box","text":"NM1026U-6049097-211/259","page_number":211,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2eaf7fb1-2a86-481c-ad93-be945558f032","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":"e73eec4a-bfe8-4ae0-a38b-c6f988c783dd","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":"8282b641-6768-4567-96bb-0936c19d55f3","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":"bc42e4c9-b77e-4e6e-8ff0-2eef9ebe219b","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":"66d1f7ce-cdf6-420e-b46f-0879fb4ddc1f","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":212,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"d35229c8-7d6b-4563-9f56-85a4fb435477","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":"a9785246-99c8-4c48-917b-262e999f3ad8","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":"f751ff10-cd43-4ba8-b332-c2f1acc1eace","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":212,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"153eb599-7f42-46dc-bfad-065af9dd9720","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":"d146509e-6024-43b2-ab81-6a2011d6f3fe","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":"a1cb1e92-9234-4bfd-9216-e13f42d62dd8","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":"0702e2af-4101-4eae-8cbc-7f481929d9cd","block_type":"box","text":"approach to board committees.","page_number":212,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"38bcdaf1-a0b8-4fa9-8fcb-9e877be8c2e7","block_type":"box","text":"Board and director evaluation","page_number":212,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"56511f1f-413c-442f-9cae-3dff5c1ff53a","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":"310d1a08-4926-44e2-ab70-5c02f9a4a1c0","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":"7f3390cd-d90d-4471-a19c-77ab6d8d5419","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":"0b1c51ea-558c-49b2-abc4-1987d9c6d0ff","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":"671007a6-d22c-4f67-ab75-e145e2ea44c3","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":"43c9d205-b7b6-4b79-91c1-c82e355258fe","block_type":"box","text":"Access to independent advice","page_number":212,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"98072a03-0fbc-4a69-83d3-e7bb2cd08d90","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":"b239d324-3ea1-421a-ad69-742fa7ac6e79","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":"739371b7-2b02-4fc7-8f3e-99ce70d247c4","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":"6511dbd3-28b3-486f-9037-667a1d157642","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":"57c8cfee-284c-482f-8e4c-e1211fab2f64","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":"3b591dd4-91ee-4e48-987e-3faf01bb903a","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":"1882da6e-b839-4abe-94dd-0beb8cc08e59","block_type":"box","text":"compensation and succession planning.","page_number":212,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"0195bd3d-26c0-4248-8085-6246f7dbe962","block_type":"box","text":"Executive compensation","page_number":212,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"e007dbf9-f7cb-4277-8d6e-4b1840473b5e","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":"bf5f6754-ca28-4c7a-9055-04d5b71471fd","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":"4cdfd886-d70f-40b1-8dde-158f575fb7d6","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":"e350b968-63c5-4f68-afc0-1c955483b312","block_type":"box","text":"and a company’s financial performance.","page_number":212,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"e511fca4-c806-46d3-88ff-f428cbc1fe04","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":"fb469b38-9799-4386-91d1-4d44398b80eb","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":"3382304c-ccbd-42a0-81c9-3ab9af42da2b","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":"e2024baf-37e3-4d22-8c93-28e7d71c401a","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":"e1c12806-778e-448b-a763-bed1250e093c","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":"d841b119-67ce-4c53-b8f0-4b3e27e4e576","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":"bbb3e3ef-e3f4-4585-8005-160a15c35343","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":"45589bc2-d2d3-42ec-b142-ac45a0ab9df1","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":"7cfbd05d-779e-483b-a8a7-d5a97743a10d","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":"dbecb075-43e9-422d-a673-db40012ef789","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":212,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4c668321-2319-473a-90a6-07bb2e22706d","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":212,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"5db6c4a3-7844-4eda-bedb-57ba33aee4fe","block_type":"box","text":"9","page_number":212,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"681fa2ad-7c66-4dcf-8bc8-06feef82aa51","block_type":"box","text":"NM1026U-6049097-212/259","page_number":212,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"040d2628-7b29-4a72-a7cb-c7167a2c310a","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":"009fbfb3-b276-493a-b3c6-449962c6d458","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":"991ede3b-8b52-4571-ad59-421ad253c7c4","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":"8e99977b-b2b4-496e-ba9f-66e5e0a78d43","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":"bf0f3827-63e8-45e1-a68d-bd888a7ffe23","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":"1ec3ce23-fbfc-48a4-97b3-af19f0ae476a","block_type":"box","text":"long-term strategic objectives.","page_number":213,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"d70580fc-5273-4844-a925-919a85035995","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":"9ba9297f-6f8b-4c43-8245-ca62fbb161d0","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":"69efd160-be0a-4213-82bc-692845ecaaa0","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":"d6258530-0cb2-4b15-a1c3-a494976c6848","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":213,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"c1eed878-6a7b-4b40-9a68-9ff7f38861b8","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":"14e47b31-41e1-4ca5-9a86-644ca267ea62","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":"416764bb-8f6b-4fbe-b465-371c482d54b3","block_type":"box","text":"responsibly and transparently.","page_number":213,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"7f932fae-79ee-4608-9fe3-b75c26906f0b","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":"a8a3e22c-7669-4850-975a-105fe145fb9c","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":"851aca6a-a336-423b-a883-e7b5408feb10","block_type":"box","text":"board committee.","page_number":213,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"87a4cf50-392a-4961-bd81-2f55889c39c7","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":"8767415f-04f0-416d-b913-e93339cd8ba1","block_type":"box","text":"shareholders.","page_number":213,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"d445d207-fb6c-4c80-939c-b96a633f6b28","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":"07cb45d9-f855-4821-b121-17c3ec56dbb2","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":"7fb100c2-26ad-4d20-849a-fdda56159cd9","block_type":"box","text":"financial reports, or executive misconduct.","page_number":213,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"900e03a8-03f1-4470-9080-bd389727294d","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":"d71d39a9-a268-49c3-b332-e52cd6cdded2","block_type":"box","text":"contractual.","page_number":213,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"1fd1d6dc-b6a3-4663-93d5-816878f931ba","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":"5c582e35-ad93-4ef8-93cc-a2a2140b6888","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":"dedc0a43-c0c1-4135-b83d-662c11c91c0f","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":"a1a0acd8-5db0-4b4d-94be-8d4cdbcab05e","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":"9ad92cbd-4dc0-4707-97c6-dd746a452a8b","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":"2d445fbf-ceb2-4376-bcf1-aba176930310","block_type":"box","text":"director.","page_number":213,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"46289f8f-1ad8-41a9-95d1-ca81707bf746","block_type":"box","text":"Non-executive director compensation","page_number":213,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"52dd5a87-9185-4201-92ff-2ee01477bc42","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":"10569736-72a3-44c0-b2d4-837e49fcdc23","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":"cc20bb0c-b809-437b-a5f8-087c4317822d","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":"3ffa9d8f-8387-4923-a559-0f35a78ee8d4","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":"e60329b6-8dbd-41e1-a287-dede73b36ffe","block_type":"box","text":"from management, whom they oversee.","page_number":213,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"86e79de8-3595-4ce7-be58-96af09340532","block_type":"box","text":"Capital structure","page_number":213,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"65171b8e-430b-41c2-942b-5ab131601eba","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":"72aa2bd8-c39f-41c4-ad10-043f4d1c231c","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":"7274cc2b-6777-4727-bf37-35a408d19e8d","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":"15c4c2db-635e-4056-bb71-2cf243df9a80","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":"5e298600-e757-4426-b30e-2d756fa26269","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":213,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ec13443e-5375-4f19-ae23-10dc0ff8c7b5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":213,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"d712935e-960a-4547-8e4d-88d5a781314f","block_type":"box","text":"10","page_number":213,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"3ade8053-b1d7-48cc-b160-19d500c211c3","block_type":"box","text":"NM1026U-6049097-213/259","page_number":213,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a3cf6161-f569-4554-aa62-6207dc6e49f4","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":"c8f8feb4-d6bf-4696-965e-8e8378a2fb7f","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":"819f0aeb-117c-4ce7-85ca-a90bd4540e38","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":"09dfdf27-f7eb-491f-890f-7d192b80ebfa","block_type":"box","text":"Share","page_number":214,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"2f0dcf1f-f14a-4f31-a53c-7244cdfa73ad","block_type":"box","text":"issuance","page_number":214,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"129f611f-d9cf-439c-a752-e4d679f2ace6","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":"75dd18d4-31c9-4231-99d0-3865dfa84483","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":"f0226dd5-f202-476d-9721-58287d38f973","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":"f027f974-09b6-44a7-94d2-ee01d9e295a5","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":"23dec25e-ae02-47ff-b497-60d60dff528e","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":"202506a9-d337-4d29-84ca-f57d8b79482d","block_type":"box","text":"Share buybacks","page_number":214,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"4b1b5dbe-479a-456a-853c-b969387bef8d","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":"ccd16827-ba88-4dfd-8422-6c91d5f52e34","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":"e488b24a-99b0-4638-9fd2-bcbac60ac293","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":"bd6f8a8b-80af-4ee8-bf4f-fe5a358971c2","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":"6c198346-3ab5-420c-b7ba-fe690021eaf6","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":"edac0a2e-22bc-46c9-8ddc-fc7d2f894d46","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":"5eac2727-8c70-476f-8651-18b4c7018639","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":"02770513-b8e3-4fa6-a68b-7265ebd13b41","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":"d5afefb9-9a76-43b1-99e5-c9f61b1981ac","block_type":"box","text":"Dividends","page_number":214,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"326bb900-c9db-43fd-aecc-688aa17c4ccb","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":"78a6bd0c-0a41-4a94-910c-dad4f789efc4","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":"56f9bcf6-c6bb-43d0-99a9-3a08119465e7","block_type":"box","text":"Differentiated voting rights","page_number":214,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"bc98d557-957f-4716-9f0e-36521fb059e6","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":"aee83cf0-f040-4765-bf7a-5dc965ac8221","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":"61d958ee-657d-4b0c-b096-4265aa96948f","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":"5a61b145-9ee6-4176-9c8c-deb445a8138d","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":"e072ed5a-2d59-4f7e-af1e-4a41dc93fd04","block_type":"box","text":"Transactions and special situations","page_number":214,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"611a108b-3226-4354-a080-c69ba56675c8","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":"ff488d0e-f1d7-46eb-a271-5ae891b3440b","block_type":"box","text":"detailed analyses of proposals.","page_number":214,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"cdd02074-1882-46dd-8e7e-3473ab934e34","block_type":"box","text":"Mergers and acquisitions","page_number":214,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"4767d7aa-4ba8-4b5d-aaad-08d0f83685e8","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":"3476c126-ca59-429a-a771-838207ea364e","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":"88e370f0-b5ec-44f1-8cb0-ff8daa8dfd14","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":"205d4cd7-d537-4ea1-b0c8-b5e6bd6a51c4","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":"6c9a7aa8-aa0e-4417-a4d3-100b188644ce","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":"f84f7cb8-182f-413f-99f3-69c36eafd2cd","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":"36dc9856-28c9-4514-9ac4-1c77de1d2cce","block_type":"box","text":"recommendation to shareholders.","page_number":214,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"145fb143-60a8-4cb1-b69b-8c7a2f3345cf","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":"8def3b50-6559-4c6d-af13-675fda35a252","block_type":"box","text":"interests.","page_number":214,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"8d556188-8b60-4484-b323-b690d545fe05","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ea88306d-4235-4a8e-8e73-d6a228c6db73","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":214,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"c6875bda-4fdd-4197-a09b-d51abb7b9397","block_type":"box","text":"11","page_number":214,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"c1574a79-a81b-47b9-b443-e47f16989e30","block_type":"box","text":"NM1026U-6049097-214/259","page_number":214,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"401d8948-d5eb-4a13-83fb-145bbfbd3309","block_type":"box","text":"Anti-takeover defenses","page_number":215,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"6aa80b37-81f8-41d5-8a55-4ed7ed80b245","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":"fe3ab944-5d09-42d7-b36f-c95cfe8b4b5f","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":"c2b78835-013e-421b-9daf-a0060d4c9361","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":"4d355ccc-1918-4558-a87a-5d8b0ed3ffb5","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":"90f94be7-0e56-4f13-83a9-46b8c2827c81","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":"8b24899b-4e41-4b41-9dac-32cd79cb56c9","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":"5fad7497-866f-4753-92d3-34ce39518bd8","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":"89957102-92f3-43bc-9f6c-7705b32a0660","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":"bcaa59d0-1627-4cd9-88ff-40477f6625a5","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":"fd22ade2-dd58-447d-bb59-81a2fc8fdef0","block_type":"box","text":"Shareholder activism","page_number":215,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"c084788d-2796-435e-a359-468ee5a0ccbe","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":"11e3c9b4-3656-450c-8258-47e57e9c8b02","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":"65751be5-d851-45f5-aed9-44b2ecfb5aba","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":"70c1f69d-065f-4e85-a5d0-5bb769c4093a","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":"820effc4-553c-4374-a0ad-f7e145821d4a","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":"0fad8271-f791-41c1-80cc-f6f82486d218","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":"62d738bd-7224-4b6c-b042-d5cfa4bfc0a0","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":"97a4218f-50fb-45cc-a6b4-3f05304aeba0","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":"8eb5324a-f93f-4dbf-8d7f-543c9a50a4a9","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":"7d958881-bd2d-4d5c-b1a2-532f96ebebc8","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":"298343b9-fbeb-41c9-b86e-8e19b06cd151","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":"edc0bd81-a843-4ee4-90c6-0196f80f42db","block_type":"box","text":"Significant shareholders and related party transactions","page_number":215,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"b91ee421-2c21-4055-ac42-f0e357588915","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":"049aa866-8c12-4d35-b6dd-4e9bcd5d8f0e","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":"2d746b87-2a3e-4d8b-b31c-02d4256b81e1","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":"684ed283-3599-4ed8-b955-06cebd985b0c","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":"bfed02d2-d380-4749-b96a-a5b123c595fa","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":"8b89a0f3-67da-4b78-bb96-e94a282ed028","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":"a9da6afc-e74f-4d5d-9953-fd77baab74b6","block_type":"box","text":"disinterested shareholders should vote.","page_number":215,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"293c7667-23fd-4475-a352-0c4eaddc04a8","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":215,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"73316ffe-7ed5-46f6-a573-3c60e59afaa9","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":"80a02d30-c0d5-4ef7-8cd5-af160a90c495","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":"c4bcb1e1-9d23-4ee4-897c-de4afab09b3d","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":"655d1d03-bde3-4724-8b56-1b5969d88d36","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":"b87db0be-fa27-4354-9888-fe20ebe20802","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":"d66b251f-b4a6-491b-a309-5db6ea273230","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":"41baa7f2-14ba-44fa-8165-cd7e5ecdb0b4","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":"a96979b4-da73-429f-b257-4758e32176f0","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":"2c56a9b4-cdd5-4376-953d-2009f3444453","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":"6c15ab48-a3f5-4a86-b4be-c33483c2acb4","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":"ed8b8ae5-fd79-43c1-9b34-811e32ec7f12","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a8fbd552-bb1a-4c15-a93a-05d1ef22ff68","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":215,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"f8d69938-3bb2-4190-a09f-1c86c42da955","block_type":"box","text":"12","page_number":215,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"8c6f4fa6-b28b-4915-8c05-3cd57d16d97c","block_type":"box","text":"NM1026U-6049097-215/259","page_number":215,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3cc831bf-e595-43d1-9700-3af6bc40cdb1","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":"1b8fcbc7-4109-4b6c-947a-afee4db1e748","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":"af873338-6afc-44be-9bbd-342bd246483f","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":"9f79092d-326b-43ab-ac06-f4fac7d8999b","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":"b1cdc661-1bee-4fed-824e-47a8ee690727","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":"19ec828d-b1f8-4f7a-9e2b-5c41d8813290","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":"eae10294-ff73-43fd-ad00-2a6e75c24dfb","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":"3691a3a8-1f37-4cc1-9205-fe916af764a7","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":"c323f21d-ca81-415c-8771-dbb5b67beb04","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":"62bacbcd-04d8-4744-8e61-e499173aa488","block_type":"box","text":"external audit process annually.","page_number":216,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"4bef2d92-d6dc-4873-9709-2b42b87fcd0b","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":"c304fea5-0c92-4133-9dc5-ad9205c7e292","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":"37c7a3f5-417e-49f9-bdaf-ce60b9d7fb58","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":"a17b1a93-fd48-49c0-9d2c-29ec47d2baaf","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":"b257b937-f828-42cd-b9d9-f7c8c3505faa","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":"98ab4cc1-5381-4b90-8307-d3bbb3bfbe49","block_type":"box","text":"reports.","page_number":216,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"5c3939b7-f22f-44a3-945c-af6109a4f6b5","block_type":"box","text":"9","page_number":216,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"b7917315-ba7f-4cc0-8ca4-8aa716405e29","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":"3f1461a5-d9f7-4235-a932-854f4b92b4b8","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":"a898597d-783f-4276-b844-158b94c8d2f6","block_type":"box","text":"policy makers.","page_number":216,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"0fa96f4d-6713-41b4-aee7-2e2561e8c494","block_type":"box","text":"10","page_number":216,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"f3fdc781-7b92-41a1-867f-6ac1d3221773","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":"08cca1d8-78c9-41bc-8853-66a3e9e7fc35","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":"2208d881-c06f-4370-902a-018eca003541","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":"4e86b809-7cf6-4b67-8824-d77709c2aeca","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":"3779677a-733a-4416-928c-2e0878b0283d","block_type":"box","text":"internal control processes.","page_number":216,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"4657cfd4-76cb-4742-a00b-8664c14a6c07","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":"3763b8f8-c603-49ac-ad4d-38924eadf798","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":"20a4754e-29a3-4941-80f0-9fa6e4ffa347","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":"a71b6ad9-48e7-4211-a9af-94b3034742f5","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":"210379f5-322b-4895-ab4f-eee3a9da1006","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":"85d5694b-f7f5-42a8-a35d-0077469dbde8","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":"99311eb5-0983-44f6-b1f0-d1d0cad8334c","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":"83623141-1c96-444f-bed5-38863702272d","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":"322e6ad5-7e96-4078-8412-f7a957cf7590","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":"b07e37bf-dc5b-434b-9327-0f0c2f55f428","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":"207b0da7-a36f-4ac6-9135-93a7caf710c4","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":"b3cc0423-11ba-4ff3-84e6-b33a6055eb10","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":"0319ce25-8066-4fba-8a01-6432c19a2b2e","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":"4c824b02-3315-42e7-a23f-4ef5f478f51f","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":216,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"ecb17901-b4ac-4cf5-9bbe-63e34ca2464f","block_type":"box","text":"9","page_number":216,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"85b7b41a-bc44-4c27-8340-6f2931006f8c","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":"60f6a9c1-8e50-441b-a23e-434e3b5ab0ea","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":"ebc5f8cd-0a9d-49e9-b940-d645c11354ec","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":"e1001ffb-cc6a-46bb-b656-5cafb4c2f547","block_type":"box","text":"10","page_number":216,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"0c916619-5680-4c0a-b022-c341576eef8e","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":"3becc4c4-8f85-4841-8828-5f0ef6f517e2","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":"ba7bc05b-5615-44e7-b428-893d1765986a","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":"b703a2a1-5b47-4b00-9cd2-27204d2eb0bc","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":216,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"97bae876-90f7-4776-9feb-6fc920081eaf","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":216,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"b9ee4c4a-4df4-4f14-baa7-92a85fc44935","block_type":"box","text":"13","page_number":216,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"b2d9fc30-f086-471f-9b80-f5983bbcd750","block_type":"box","text":"NM1026U-6049097-216/259","page_number":216,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"be1a5966-0f4c-4cca-b2c1-3fb246ddd3de","block_type":"box","text":"Shareholder rights and protections","page_number":217,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"ba981d44-874a-4190-a9e0-d21a8a4692be","block_type":"box","text":"General shareholder meetings","page_number":217,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"da3e4fc4-5de8-41b0-869a-24d5d08fe388","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":"2d69523f-90ea-438b-a65a-c9beb134510b","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":"fa9ac202-1854-4be3-824f-dad20bfaeb6a","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":"344f40dd-f565-44f1-8c3b-3f398af90d66","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":"cb26672f-e3f6-4f50-990d-145199025a0b","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":"478f6219-1d4c-4857-8a32-d880ba642d87","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":"615e6dcb-4531-4f97-baff-5ebfec98979b","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":"2bb7b964-c1e3-4a01-8840-92790d5d2918","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":"10a4c6a1-9098-4ec2-bf2b-3a8d8e27c816","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":"8ed2c3ee-a954-41db-a799-2b0726f63db4","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":217,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"db37f084-3751-4674-bc34-42a2a55e387d","block_type":"box","text":"Bylaw amendments","page_number":217,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"7d1fa581-6a2d-4699-a1f7-49a0b60d6f81","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":"22c90916-36d2-4657-b8ff-425c4cf15ed3","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":"88fdf637-c7ac-4bf3-afa4-e4a01f7a5ed4","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":"5c926773-6370-4bd2-8e7f-7d622ec46229","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":"4a90a423-abc5-48cb-82d2-2b77da8c9d82","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":"e9d6de6f-88bc-4a78-b92f-86e3ab628448","block_type":"box","text":"shareholder approval.","page_number":217,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"5b5f4e91-012d-4d85-a9c8-b496aa09fb7a","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":"987602e1-2f9c-482b-bc17-ee8fc316bdad","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":"9dc52c3c-2618-4e51-98f9-b4b5504a7a61","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":"ee56062a-11f5-4780-93a0-a6c7a750b7d4","block_type":"box","text":"the company of holding special meetings.","page_number":217,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"8127e8d9-65ee-4143-9bff-2ece2ee3cc19","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":"c6c53883-375a-4456-88f8-db8ec9050f02","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":"25e1f9cc-0dbf-43f1-b736-e973064adb60","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":"4ca8404d-030d-44d2-9dd9-65b4ae799c96","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":"e78961e5-2213-4f82-afdd-a93104f869b5","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":"4f2caf23-5d51-41f3-9812-ca511e6bef2a","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":"3c975e27-9833-4d54-a1e0-395457d17a07","block_type":"box","text":"provisions to a company’s bylaws.","page_number":217,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"93d3b019-dff6-4bad-b07f-63ee4eb14603","block_type":"box","text":"Change of domicile","page_number":217,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"c3685bd9-47c5-43e5-88ea-9ad3302b11f6","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":"1a1624a6-7602-48b9-9498-e243223452e2","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":"6fe0bc5d-1c48-437a-a713-025c8d1ae53b","block_type":"box","text":"related costs are immaterial.","page_number":217,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"7d3b7a29-2718-4d69-9dac-fb569e17aef8","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":"3dd1c099-a2e2-41ba-9360-465d22f6373f","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":217,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"dae90b72-3cf7-4abc-b7f2-2f0f6386098f","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":"853ecaa7-2511-4953-9438-fe55cdbc5d71","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":"79c9e359-92f7-4e76-aae7-54abcce98b0b","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":"b2c54d86-eb20-4c8d-bb3b-a22dd050f1e0","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":"beff6cee-ee79-41a1-9671-f5fc27d2ac91","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b6762e9a-da0e-4795-af12-29448df0cf55","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":217,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"8e3d16f5-0a7c-4ced-b328-df042811b370","block_type":"box","text":"14","page_number":217,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"06605b53-adee-48d3-a739-d786c5efa864","block_type":"box","text":"NM1026U-6049097-217/259","page_number":217,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4cebe2f3-0ce7-4d08-ba9e-53320b3254d7","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":"2015e534-d91f-4d48-a3a4-779a65b6bfd1","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":"b6c896c8-828c-4fe5-bf81-bd97060dd2b5","block_type":"box","text":"Shareholder proposals","page_number":218,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"608dcba6-16aa-4ce6-904d-313e6abf9bc9","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":"4d7b5acc-d9c0-4d4c-bfc4-2dbf60c0f7cd","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":"06131d70-f08e-463e-b67e-f0ab63b2a03e","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":"4db4b739-c86d-4136-a86a-e779aa08deef","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":"c1c1f631-862e-4d2a-b293-7a2f29c7323e","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":"de03e4aa-adb1-44df-9a09-cec2afef6583","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":"c1bc546f-24e6-4bc1-a1eb-a43f38a940a5","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":"562e3a7c-c076-4c30-9a65-1f3fdaed4609","block_type":"box","text":"performance.","page_number":218,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"e2671d62-cf03-4383-a889-a5885143816b","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":"0f03173f-125a-468a-bdc3-79105d43b885","block_type":"box","text":"t a company’s governance, disclosures or","page_number":218,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"a9184e79-f533-40f3-bcb3-29c07bd70070","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":"3703ebb7-c03b-4be6-8fca-d001c32de31d","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":"78f1b2ff-b61f-4f3e-ad5b-2594b44c6bd2","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":"f906175c-3ff5-48c0-85e4-354d75188d18","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":"fa2cae8a-fb19-4a98-a3c1-8a95e1cbb4da","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":"d6c24fd4-46b5-4050-8a7e-685de5dad167","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":"247630a4-c7a4-4d66-8144-db18778ce80b","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":"e94c6df8-ab57-4793-84ea-d746a46cca94","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":"8be379e9-3320-4f6d-9714-cdd888fedfcf","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":"52a5f47d-06b9-4f4a-97a4-cc5444edeb3b","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":"539bec03-4492-47aa-9ed1-92eb3dd49f31","block_type":"box","text":"generates financial returns.","page_number":218,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"3d4b925c-42d7-45f1-85d7-350d9f678ac3","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":"d0b5c4b9-aa67-4803-92e8-5de6232f8cf1","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":"f149d4ad-0756-4070-91cc-be26ec7e02d8","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":"b33c2b87-b8bf-4f98-8f87-a6c4cb2e1a25","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":"7fb0174c-6761-48bc-b5ff-9a5fb1d957f2","block_type":"box","text":"Corporate political activities","page_number":218,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"517a404e-c6b7-408a-a9b1-9bc013b6e721","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":"8753b532-6fcd-44c1-affe-b3f27b6ca437","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":"46d4bfa7-3ffe-4837-81aa-aaa362e54957","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":"51bad2df-ddab-4716-8fe4-85437ad54131","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":"336089ca-1428-4028-8be6-f7c5a4d605e2","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":"a9d3957d-09b8-4303-b47c-26e2fe6b981e","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":"ff342ab1-f9ad-4297-a793-f214f052aa97","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":"ea1c61a3-e96b-4028-8ed7-3e41f0755ffd","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":"991fb961-9c82-4c16-a5fa-3e447f25939a","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":"db41e359-eee0-4cf3-80b2-21a8d64b3451","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":"5b4ec3ea-2785-49b5-8c04-60569f251a4d","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":"1aa29fd5-3432-4254-bd5f-857fb42c8175","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":"75a434e5-bcb0-4ddb-b5d2-1b911edb8a9f","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":"984e5c2f-2b4e-4dac-8815-d6a86edeb7ea","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":"a3540cd5-cdb1-43d7-a3ec-a164dada61e1","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":"5a2e8c88-5d2d-4e54-b526-1137ebaa67f2","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"2804d034-bfdc-40cb-b0a8-00836d132a12","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":218,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"abba08e5-5523-4a22-a455-2ee8c6e6fa40","block_type":"box","text":"15","page_number":218,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"3be2bdcf-4684-48df-add1-e9ac53ab1ecd","block_type":"box","text":"NM1026U-6049097-218/259","page_number":218,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7ef7f353-07bb-4b7a-bfbb-77a668818be5","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":219,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"96363813-cfd8-4135-89d0-82e5b3a3df42","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":"a5d94b8a-8fcf-40a1-bd8c-75e8a67c8a5e","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":"8b974634-7489-401d-9e83-f68f2bfe60ce","block_type":"box","text":"11","page_number":219,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"5db70c46-7e14-4193-bfa8-5444858cb92e","block_type":"box","text":"that are relevant to a company’s","page_number":219,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"01b8e579-8d1a-4767-967b-728d5e6d257b","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":"90edb780-c1b2-4015-ad1d-166235e77e17","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":"e7481066-443d-45dc-bc58-320a153ae743","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":"c2350177-4324-4490-a9c5-ee4c7d2e027e","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":"8e07c730-cce4-42ce-8325-f83980f6adf7","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":"1b43f695-2ec5-4252-9e79-cabb109af37e","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":"93c2d7d5-07c6-4564-9730-40cc9442fb88","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":"127e3c66-673e-4c9c-b3d0-4fcbf45370bf","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":"23662e2b-1cec-481f-97cd-f009db2ff594","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":"77e344ba-d229-4604-996d-1eb0b114f4ff","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":"28889369-1eeb-4e1c-8354-1e6b9efc8a62","block_type":"box","text":"of an investment.","page_number":219,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"ad1e0d2e-204c-4363-8f0d-5e14c3a30799","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":"a9521701-bc32-4728-963b-412c711cd2c1","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":"df50d189-8981-46e5-9c12-aa20cc4b014e","block_type":"box","text":"impact financial returns.","page_number":219,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"871362ff-b992-4fdf-87f5-ac236b854b2c","block_type":"box","text":"Key stakeholders","page_number":219,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"d31f104d-4cdf-448d-a124-777275a59ba2","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":"96a88f0d-6cd2-4b1e-9bc0-78851bd84b25","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":"23cf5b29-95bb-468f-903e-06623cc65b09","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":"64260162-eab8-4412-ac0a-8d1d3902df5a","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":"93a9285a-0b5e-43cb-9965-604b4a524e87","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":"10be14e2-a5fa-4bb0-b969-073596616303","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":"e64baa03-2c1b-412f-bd64-9b4c0469446c","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":"92b4b6dd-7c8d-4a53-b300-ef222f977d8e","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":219,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"90b08106-7a8a-4e87-8ecb-406b9d96eadf","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":"afa4f58f-f1d4-4051-8b0a-361c243da1a9","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":"2c60d714-55fb-4220-990c-ecf54e2b25e2","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":"be64e86b-6576-45d5-b457-311deb36f177","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":"bd5fab2d-80cf-401c-a7c8-a3e7c77c6cd0","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":"266e8c07-b691-438a-9f1e-a478d804ae8b","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":"86b2decb-34cd-4ac9-936a-d5407ea10664","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":"5e6e85f0-30ad-42c3-8892-3200cd3ce67e","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":"9ccd8f64-d361-4e24-8024-c2a3a4ca0f4b","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":"9c83b512-68ab-4f4a-b40b-64b0a3c3ef23","block_type":"box","text":"fund board or client.","page_number":219,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"333d7a41-8395-4db5-971a-d7f56f781df2","block_type":"box","text":"11","page_number":219,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"9493e9bb-3588-4616-b77c-8b79527c64c7","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":"2ed3d553-80f1-42c2-9a69-6b1d0d844f40","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":"adfdb03c-7675-4aec-9b53-4094e7391055","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":"7f349637-a0b2-443a-a9bc-465df1e2eac3","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":"ac0dc91d-f02e-4ac7-baca-bd7818f7479e","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":"bba5c4b7-2b7b-400e-9e79-2772166c5e2d","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":"a7ed176b-37de-4307-acef-4a9b9480f1a1","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":"9999a585-5314-4540-a3fe-e5872b4d2088","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":"284197fc-2483-4c9b-a107-f1762c695b3e","block_type":"box","text":"framework.","page_number":219,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"74d17dd5-fcc6-454f-b403-5d9da8eafda3","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":219,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"e898a310-7982-4988-b5e8-11ccac4f087d","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":219,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"6dd2e0ea-9153-4817-b543-048b4e1dabed","block_type":"box","text":"16","page_number":219,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"c6848911-3748-400c-b36b-0f9a9b63c45a","block_type":"box","text":"NM1026U-6049097-219/259","page_number":219,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"214bb1c0-3a7d-4e0c-9a6f-ea399cb52988","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":"7f6bef28-3507-4242-a70f-8bb95a0a505c","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":"a23d63e3-0282-45f9-88ba-7a904f17155b","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":"67280a91-59f3-49aa-9651-3304028fe81b","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":"b57e7b44-17c6-4482-9d56-7a3067543115","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":"c5551efb-12a6-45e3-beaf-7351fa7924a3","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":"35c935e0-2b79-4a65-b287-7d05c9875e2d","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":"a7d9ab01-9259-4afa-8604-194495a96394","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":"aa2db048-799b-49c4-8e50-a932a86b9e3e","block_type":"box","text":"scope 1 and 2 emissions.","page_number":220,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"04af1112-c52f-407b-afd8-a0e833755c31","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":"84fe2fbe-b99d-4f51-b8db-f692d113aba8","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":"b7350fe8-477c-44e0-b23b-7eae79d0ea9a","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":"b9c80134-c023-41f5-9921-7d7d23a45bc9","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":"e4e381c9-70f6-4f5d-999c-829eacfba288","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":"d474ceb6-cd2c-4e3f-bb5c-3fba7b4b5d10","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":"7a88c895-78c3-4ed5-a100-244c8ff73983","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":"49580205-73b9-458d-9efb-54464f1a78f6","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":"d279bf2f-8392-4487-be1d-485ea3c8bfff","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":"cea974b0-dec6-4cca-964f-7e2fc0a25515","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":"378a247d-799c-4992-880b-576fa37b85ba","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":"b9d6c927-67a1-49ed-96d1-426d056ef75d","block_type":"box","text":"guidelines.","page_number":220,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"aae2d0ce-20d9-48c9-ad2a-330a9cde882b","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":220,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b44b269f-9ac2-4907-9d0e-36674821e72e","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":220,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"dd5a225d-d9fa-4549-9f62-12b43f29ef74","block_type":"box","text":"17","page_number":220,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"440a1f72-e6b2-4711-85ad-80d98e6ae862","block_type":"box","text":"NM1026U-6049097-220/259","page_number":220,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e2b801c6-6258-4e2e-bda0-684af0828dfe","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":"0f364bd5-454b-4e82-b298-17599c947e0d","block_type":"box","text":"Oversight","page_number":221,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"5b7f121f-4c13-493e-a5ba-66033adbb813","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":"5279c94b-aa9c-4eee-a112-25e9704079a6","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":"8499bc6a-d94a-4134-b7fb-ad9a8aa2005b","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":"c2080ef1-e135-4c6c-a316-eee070f78bc6","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":"8d0d589b-c2c0-4f80-97e4-9dffb5b0ba43","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":"2e307adf-aed5-44c7-b86e-d1e686a84097","block_type":"box","text":"reporting lines, and oversight.","page_number":221,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"858daa29-7f54-4983-99f9-e2bd8e215b8b","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":"84153f37-8896-4321-83ff-e1f2bbcbb90d","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":"80542c41-6a9c-443a-80d5-b4c4d2b5fa8a","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":"64d28888-5a05-4ea8-8585-439fd96287ad","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":"ea6daa85-3939-442b-addc-12bdab778842","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":"7d2a94fa-8559-4d68-a14c-b0ba27516c79","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":"58e8d64f-43e3-4c62-a678-1b59e88c210a","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":"db3ea875-46c5-4080-8859-c4739a0cd8bb","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":"d7c45429-a1ff-482e-bf99-868177d3cfd0","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":"759378ea-a0a9-4411-b848-3a6294f3d139","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":"7fa6ea3d-550f-4e67-8aa3-461b306d54b7","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":"3f347e07-7bb5-4ec3-b75c-f7e2455bce55","block_type":"box","text":"below).","page_number":221,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"8ecdb0fe-80c3-4ac6-9b5c-fdd6d49fd27a","block_type":"box","text":"Voting guidelines and vote execution","page_number":221,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"bea0a277-c71c-4acb-a943-8712aec874e9","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":"1e39fe2f-e69b-4261-bb6a-301c0f31707f","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":"31e205b4-a66c-46dc-802d-964de71ef329","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":"0c4b2679-345a-4c4c-a29d-0c83faea8572","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":"217775ca-73f5-4ea8-82e2-94a906d051db","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":"c0725f0a-6ec9-495d-b301-6f73ebc09977","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":"d2f88343-8ab3-411d-b410-69f0d0906145","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":"ac444db8-dd72-4319-b6be-84dbdeab64f3","block_type":"box","text":"management policies and procedures,” below).","page_number":221,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"0b3f3516-304c-4315-a72c-cb24a90b0b3b","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":"64d99253-4184-4e64-a963-ddb5238cc1a3","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":"41d2b0d2-589c-401f-bc20-ba65191de8d3","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":"cd8d7c4b-d7df-4ae2-b0b4-2bbe7eb974ca","block_type":"box","text":"invested in the funds they manage.","page_number":221,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"4665fc84-699c-4248-b5c4-44b4936d8e75","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":"3c14336c-b277-4510-be23-bfb7e8c4d292","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":"b4d8931f-4300-4d7c-8cd5-570e6757f8a4","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":"67d1dec8-2bd6-4364-8a35-f0226a3d1a9e","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":"cd1ce0e5-0813-4275-97c6-655c4d98ff7b","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":"2f32d3c4-54b6-4547-a285-91ffb434eb56","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":"043269b3-0efe-4fac-a744-bcf2bd45aea9","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":"df1ab305-e57b-4859-afea-50e4188b8a97","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":"9b942ad0-87df-459d-b3e9-15916a0d5bc0","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":"d0952c5f-f87b-473c-b3cf-d4c01117f27c","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":"4460b5b1-a56e-4799-872e-12449a8d0eb0","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":221,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4f648278-ba7b-4df0-bd0d-14851a25784c","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":221,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"c1458909-072c-4450-83e0-7c473cf54314","block_type":"box","text":"18","page_number":221,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"73cf1d25-348c-4a24-b150-c85186310da8","block_type":"box","text":"NM1026U-6049097-221/259","page_number":221,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"05fb0356-6165-4d9c-8627-fc2b6074b116","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":"4bf58322-a00f-4bef-a6ba-e32fabef7d0d","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":"15f8338c-eba3-4fd1-a5ed-2e351bec1652","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":"9e97fe54-d01f-485b-a84b-af97d41617d7","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":"8a4e0225-a7e3-4f4c-b846-2c078377391f","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":"23967510-b8c9-4b66-b7f7-22ef8de4ed73","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":"5b7697ba-46ac-49f1-84c0-b6af74d2e06e","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":"4a136fad-80a9-4183-a45a-0d91b9a416d2","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":"2e254824-7acb-45ce-8b54-de79e443b523","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":"35a4f534-10a3-47fc-9164-839c6bb24c9c","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":"4d1eeaed-66e1-49c0-9586-f035a97662a7","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":"f8ea721c-6e08-4910-aa54-e9511569fd5a","block_type":"box","text":"derive by voting on the proposal.","page_number":222,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"68a7432d-f27f-4ee2-8671-74143ab31657","block_type":"box","text":"Voting Choice","page_number":222,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"0262b135-0451-4514-a060-56bc5a55e2cb","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":"904eadb4-8c60-4486-a640-126734faf6aa","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":"e47ff7c8-68bc-43ae-8116-2a50ff1d6e98","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":"1f441362-c4ee-45dc-99fd-3ca782eeca89","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":"4a7c69d6-4718-4771-8a08-664e5358dd92","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":"e41c0595-63ab-4025-b1cf-ea069567c5f3","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":222,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"e283b609-393e-408b-ab77-ef4d838764d4","block_type":"box","text":"12","page_number":222,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"d69b321a-ecb2-4a7c-9581-0b87eb6f5dc4","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":"f0438bdc-5b66-4ed5-93bd-e30a2d6f7425","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":"82ae16a2-b34c-4111-89af-77a9d7384274","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":"bdd104a2-6bd1-497b-9bca-b1384fc24708","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":"6c71ef5b-f43d-45c0-b636-7964bb178838","block_type":"box","text":"13","page_number":222,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"23b8d709-4ad8-41f6-90ad-6fc0fde6cf35","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":"f2e4dc92-bb15-4cd3-9e2f-f59210f61176","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":"93cd7598-984b-4e3b-8a04-b608ce21b20a","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":"66449f9b-2d93-4fc9-856b-889554469ba4","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":"f55ab918-3686-4e0a-9092-8c21275c483d","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":"ceddf3cf-5421-4993-8024-aa3e098417b0","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":"63ec165d-6d83-40cd-aecc-337783509d55","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":"b58a6db6-d2ee-49a5-adb3-ea9e71ff5b6c","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":"7dd9c81c-dbd3-4c75-8f5a-f60ea1e2b8ef","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":"8477aa72-4a7d-48d9-88e2-9810cdc506bf","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":"e1ebb41d-7e5f-4fa3-a7c8-d12f449e631c","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":"a927acb3-e92d-45d3-8e89-30772c6a68c3","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":"02f2afef-3dbe-49c7-bd89-ea37f2f4f38b","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":"a80138fe-d109-4854-9c0f-7d10876de048","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":"47f7a1d8-da04-4127-977e-956874f374ba","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":"8df791c8-3cb6-4bc7-8f34-85554988d01b","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":"7a0ffb59-11d5-4eb4-b290-970f5fa78cc7","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":"81fd8c70-4138-4271-b5db-a4317120d882","block_type":"box","text":"12","page_number":222,"box":{"x":144,"y":841,"width":8,"height":5}},{"id":"9fe30763-3918-4f6c-aa40-c12ac8401dff","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":"9c70108d-68a5-4fea-8d30-b56a1c944ef7","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":"281cdc97-1f4d-4317-8c05-34fd9e6bbb52","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":"c18ac6af-3153-4b76-95ab-bbf6052311c0","block_type":"box","text":"13","page_number":222,"box":{"x":144,"y":880,"width":8,"height":5}},{"id":"5dd355cb-0a13-42a0-bb36-b25b44272751","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":"a855b113-6e29-4564-98e2-5fefa2f664b9","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":222,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b0b23846-865e-41c6-821a-f15897336f75","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":222,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"b6c67171-a3ae-49c7-a928-e6269e7ae9ef","block_type":"box","text":"19","page_number":222,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"48ea9b59-8c2e-4b49-8e1d-17d0ab2fd430","block_type":"box","text":"NM1026U-6049097-222/259","page_number":222,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c782548b-b5d4-4051-84dc-ce8129c0f72e","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":"40c7bb8c-dd01-41fb-975f-b7823605ada2","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":"f8da1aae-07e0-42d6-9309-111b07341c43","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":"665f0488-f9be-4a5b-a845-31e96264cd44","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":"3faaca8e-8ed9-4e8d-8ba9-87682f1452e2","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":223,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"b6fb7c9a-5d4c-488e-bef0-8babd250b890","block_type":"box","text":"Conflicts management policies and procedures","page_number":223,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"aaf20d20-8972-449d-b687-aced4a871e13","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":"d987be79-c7f9-4bc2-9d7e-011ccdb4519b","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":"7f6f3ff9-4086-4767-a3da-ab218efcc2a3","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":"2f9f5d48-c3b6-41b4-8c70-a72d6814df94","block_type":"box","text":"Fund’s affiliates, or BlackRock employees. 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BAIS prioritizes","page_number":223,"box":{"x":150,"y":683,"width":702,"height":12}},{"id":"c1448fc8-ae13-4e7f-9aa7-149acce48b01","block_type":"box","text":"engagements based on factors including, but not limited to, our need for additional information to","page_number":223,"box":{"x":150,"y":699,"width":717,"height":12}},{"id":"75cee498-559c-458d-bd98-9d2b5ab34776","block_type":"box","text":"make a more informed voting decision or to better understand a company’s perspectives on","page_number":223,"box":{"x":150,"y":714,"width":680,"height":12}},{"id":"a304fa1f-fbb1-4172-8818-60bfd4565935","block_type":"box","text":"financially material risks and opportunities. Within the normal course of business, BAIS may","page_number":223,"box":{"x":149,"y":730,"width":681,"height":12}},{"id":"cdbc2113-5ce8-4a90-a7c4-5946d6322584","block_type":"box","text":"engage directly with BlackRock clients, business partners and/or third parties, and/or with","page_number":223,"box":{"x":150,"y":746,"width":663,"height":11}},{"id":"d6f3d97e-2420-4173-b652-49b6764acfb2","block_type":"box","text":"employees with sales, vendor management, or business partnership roles, in discussions","page_number":223,"box":{"x":150,"y":761,"width":662,"height":12}},{"id":"0c314797-a16d-4f8a-a0df-942c6e91e6ce","block_type":"box","text":"regarding our approach to stewardship, general corporate governance matters, client reporting","page_number":223,"box":{"x":150,"y":777,"width":701,"height":12}},{"id":"dadefad5-d54e-4327-9146-293a84843299","block_type":"box","text":"needs, and/or to otherwise ensure that proxy-related client service levels are met","page_number":223,"box":{"x":150,"y":792,"width":601,"height":12}},{"id":"b6199992-8cc0-4dab-82aa-be60427700d8","block_type":"box","text":"• Determined to engage, in certain instances, an independent third-party voting service provider to","page_number":223,"box":{"x":117,"y":816,"width":749,"height":12}},{"id":"40705459-4a50-451f-bf56-22cc2c87dede","block_type":"box","text":"make proxy voting recommendations as a further safeguard to avoid perceived or potential","page_number":223,"box":{"x":150,"y":831,"width":678,"height":12}},{"id":"73e69c87-b0f5-46ec-b4bc-2641c6e33d72","block_type":"box","text":"conflicts of interest, to satisfy regulatory requirements, or as may be otherwise required by","page_number":223,"box":{"x":150,"y":847,"width":674,"height":12}},{"id":"408c2922-7bc3-4624-b40d-95b035558ab4","block_type":"box","text":"applicable law. In such circumstances, the independent third-party voting service provider provides","page_number":223,"box":{"x":150,"y":862,"width":737,"height":12}},{"id":"3063b7ef-14d0-40ac-b998-d14abf7c340b","block_type":"box","text":"BlackRock with recommendations, in accordance with the Guidelines, as to how to vote such","page_number":223,"box":{"x":151,"y":878,"width":693,"height":11}},{"id":"de7fcb66-ce32-4976-8bc4-52581af2ac5b","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":223,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a38cd3a6-1420-4151-809d-ccff1e97fb4e","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":223,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"5c2a2e4c-d09a-4fab-a609-5aad9fac550c","block_type":"box","text":"20","page_number":223,"box":{"x":865,"y":909,"width":18,"height":9}},{"id":"345bdfc8-e766-41b3-898a-9fc1a8693881","block_type":"box","text":"NM1026U-6049097-223/259","page_number":223,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9d61ba0b-c397-4aa7-8a2e-63f495921462","block_type":"box","text":"proxies. 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":"f2244ff8-eae0-47b5-a478-ea190bb2ac6b","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":"d08c75c6-04c5-4436-8550-62e089aa7382","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":"d363922f-b939-47e3-a388-1f0a3258418a","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":"c8f3012a-dc77-4f8d-870d-03903840ade7","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":"e70dac5b-3a6d-4f97-9106-082baaf555b7","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":"271850e0-cc2a-4aa0-ae37-d6a0b6dc7637","block_type":"box","text":"member of the board of directors","page_number":224,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"9115dc72-dc98-4bb4-80eb-390560b3ffbc","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":"b908d45d-c7b4-4b65-ada8-5a2ac5e5d1ed","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":"ce41e46b-c1a1-4db0-a7dd-efbd5b465ab3","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":"fe248036-98bb-4f06-9e5a-c4ff7994e45c","block_type":"box","text":"independent third-party voting service provider","page_number":224,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"13db11cf-43f6-41b2-860c-67796f2d5d21","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":"2d74be3c-5d46-402c-963c-13df1597ee54","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":"5a4af7ca-2198-4f45-9d3a-3a6058b7e298","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":"1a4b2c26-cc63-475c-915a-78e50679412d","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":"e4033b9f-1d99-4eb4-af96-c75dfe118cbd","block_type":"box","text":"recommendations in a timely manner. 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As a fiduciary, BlackRock is legally required to make proxy voting","page_number":232,"box":{"x":116,"y":313,"width":663,"height":12}},{"id":"210dcf61-660c-494f-9ff1-b9383c3e11e7","block_type":"box","text":"determinations in a manner that is consistent with the investment objectives of clients who have","page_number":232,"box":{"x":116,"y":329,"width":715,"height":12}},{"id":"2253edcf-b489-4b3f-af4f-fcea4acf5cef","block_type":"box","text":"delegated voting authority to us. BIS’ Benchmark Policies, and the vote decisions made consistent with","page_number":232,"box":{"x":116,"y":344,"width":770,"height":12}},{"id":"866fa45b-1960-4f82-870b-b72adbf619c1","block_type":"box","text":"those policies, reflect our reasonable and independent judgment of what is in the long-term financial","page_number":232,"box":{"x":116,"y":360,"width":746,"height":12}},{"id":"ff166413-e701-4041-baa6-bd86ee676d15","block_type":"box","text":"interests of clients. 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":"1ee2b173-1b19-4c37-a492-7a340378cccd","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":"04f9af69-545b-4fe5-8b66-3dd38a528a49","block_type":"box","text":"appropriate, engagement with companies.","page_number":232,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"8499391d-3b61-46a5-8d57-07ec7adeba22","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":"d3b061fd-1f8d-4580-ae0e-fb9a06f2294a","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":"5c0eace6-3472-45d3-aae6-b82c60b8b566","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":"7fd1aaa9-bc62-48ba-bd52-78caa30dbdcd","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":"9f85a79d-2259-4017-b443-42d5ae4c777b","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":"1d8645c4-c5b4-4401-b12d-59dd6ee93f0a","block_type":"box","text":"Shareholder rights","page_number":232,"box":{"x":425,"y":530,"width":154,"height":13}},{"id":"eb3a4ab3-35b0-417b-8024-af25abbeb3e0","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":"91d06b97-6268-42db-80ea-57b5ffd75ce5","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":"949090e6-dc67-447a-9e1d-42ec357c6ee3","block_type":"box","text":"rules.","page_number":232,"box":{"x":117,"y":590,"width":38,"height":9}},{"id":"d501256a-656f-49aa-ad05-04cf2cecc607","block_type":"box","text":"3","page_number":232,"box":{"x":157,"y":590,"width":5,"height":6}},{"id":"1bb09d68-1671-426e-a01c-b8e6e730235f","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":"ffa9de22-a821-43e8-b816-60ff9a21fdde","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":"2c5ccb68-9e15-40a5-ba5c-cfcdac8fe249","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":232,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"34862695-67cc-4e68-9c1a-f46abac31158","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":"48b88c76-355c-4ae4-818c-0fc35c75acc3","block_type":"box","text":"the protection of their investment, including but","page_number":232,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"84ce9bab-e3e5-4b60-8c07-97bd093da2d9","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":"428d8a28-4b55-471c-b6cd-2d88686e522f","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":232,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"a3670c50-8b10-4e3b-b501-5a8c4e8d993a","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":"bbbf9685-e270-420d-a1e7-39fef6981284","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":"46a06f91-16e5-442b-99c9-05acc2f0c3a1","block_type":"box","text":"Key governance topics","page_number":232,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"b9d1a618-9dd2-41eb-bfcf-28cfbe5b534f","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":"683439b3-ebfc-46a9-bd70-8b7721b8c664","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":"40a39c16-0cc2-4afc-9f60-bb16ff6580f8","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":"fad1add5-ba4c-41b0-bd61-bf6b5369da67","block_type":"box","text":"• Boards and directors","page_number":232,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"1ebefbb5-130b-40c8-ae6b-f77a2f61d235","block_type":"box","text":"3","page_number":232,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"e3fafb01-f416-4fca-a2d9-c4c1f4b8d271","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":"c98c0ef4-7c46-4a78-ae81-0a99051cc0f3","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":"9b69e08d-4229-4e96-b64e-9093fa8182c3","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":"4ae7ba0f-3b30-4adf-8cb0-f2212a767360","block_type":"box","text":"BlackRock Investment Stewardship","page_number":232,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"fabcf903-602d-4725-9914-bea15930647a","block_type":"box","text":"Global Principles |","page_number":232,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"fa0853a7-5a03-41fc-bf3f-6e447e392bfe","block_type":"box","text":"4","page_number":232,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"7f37ad46-3b49-4c4b-a78d-cbec8c0e2967","block_type":"box","text":"NM1026U-6049097-232/259","page_number":232,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"59fa17f1-42dd-4168-82b9-ab86b7238622","block_type":"box","text":"• Auditors and audit-related issues","page_number":233,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"e85adbd7-8d12-4d50-b94e-611b9726f801","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":"e4972a48-1652-44fc-9ee8-2629f26a2446","block_type":"box","text":"• Executive compensation","page_number":233,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"1ab74782-c545-4755-b83a-67db0f66e146","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":"ec334b1d-032d-4c40-bea1-696c91026cdf","block_type":"box","text":"• Shareholder proposals","page_number":233,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"7f3c8537-915f-48b5-ab4b-8e03b33857a6","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":"efe09920-4283-46e3-b617-ee96450277f8","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":"9712d28a-8e3a-47ec-924b-f91fc922d720","block_type":"box","text":"environment within which companies operate.","page_number":233,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"84a416e9-451e-4a89-bde4-697756c47585","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":"267e081c-d800-4f58-952f-d6ee21e227c4","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":"ad370417-6b96-4362-bb96-935024491be1","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":"7bc7a1a1-8206-4df4-9aef-8d424952b782","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":"c8e3772b-9ce9-46af-b33e-7c6044dbd536","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":"bddc570d-ad14-4430-97fe-fbfbeb6107a3","block_type":"box","text":"4","page_number":233,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"3b6a5639-68db-40b6-a391-39978e3ee17c","block_type":"box","text":"Boards and directors","page_number":233,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"9acb85af-bfa5-43e3-a77e-120c7dc2c4ea","block_type":"box","text":"Oversight role of the board","page_number":233,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"bb3e0f2c-4136-4a91-922b-dd9f1b43e284","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":"b8586d6d-383b-4fdf-bebb-eb5c02e4eb75","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":"a42593de-a1e3-41ae-a728-e5d68306c3ec","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":"b144d57e-b0bd-403c-95db-bc5a641c126c","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":"e2f14288-32fd-4ef7-895b-b950aa1edc34","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":"9e18dd85-d350-469f-b8ec-f127b6746c22","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":"1bc349e4-9e1e-4cf2-b036-6c94c05b1bcd","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":"31dd3b50-6284-477b-ba37-1d23d2f5b900","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":"b162b0d0-74ff-43bd-a2d2-31ac99144a15","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":"4c04b430-ded4-4331-98e5-40d6caf0ec1d","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":"a0eb2c2d-69cf-426d-b95f-ac86811e7754","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":"eeb7a0db-6f65-45f3-a61f-39fc70f134fa","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":"ea94245f-7eb7-4716-aa0b-52a03b8bb855","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":"0b098573-2b93-4eaa-ae58-984bcf0a6b76","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":"72aeedc2-b90b-4517-8b5e-d00e8b66f466","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":"64c60d52-5518-4266-ae92-5c4b4a4c4985","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":"8d32b65c-64cd-41ba-9b58-b6a47983eb26","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":"0d84f752-c63e-4b37-b55f-8dd5ab163634","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":"0a558896-3bd2-4404-bb7b-fba54e8490ab","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":"a4bf0500-900c-4d41-b537-568fa03bf69e","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":"7043f81f-c7fa-421f-acdb-c7746dc2d185","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":"8a0796dd-e34b-41eb-bed2-cca0af407806","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":"b19f12fe-86a1-46d8-8dc1-7de750bcee22","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":"38dc8549-bf1d-46eb-95f2-2bd30b46ee0d","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":"e0196773-7a3c-4cc7-9ecd-533e6a8e2890","block_type":"box","text":"4","page_number":233,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"2a079229-c255-402c-9196-54efb079ee3b","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":"63ef9a32-5fc2-48db-81c0-24ca2a72104c","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":"e277e856-fc12-4127-b8e0-325272bea319","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":"64b409de-5de3-4de9-930d-9a4644e8d62d","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":"adddb65e-51a5-4dbf-abca-60df44e10b1e","block_type":"box","text":"BlackRock Investment Stewardship","page_number":233,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"23352211-3e81-4509-ab77-08969782d6cc","block_type":"box","text":"Global Principles |","page_number":233,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"c7f51651-c9ad-467c-93f8-8a1630853b2f","block_type":"box","text":"5","page_number":233,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"8e4d365a-f0f5-4600-9b35-4dcbd85e7e21","block_type":"box","text":"NM1026U-6049097-233/259","page_number":233,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a8e738f4-5461-4f55-9f53-c1287315e394","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":"c2fa594e-8328-4ac3-b394-791a26e4035c","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":"ae9ab887-f60e-461a-8d23-13b63460922c","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":"3645f538-d796-451c-9d03-7a886ce07872","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":"99b34a15-3951-4c4a-84c6-6d7aa4854dc4","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":"ee77467c-9927-4ffe-9dc5-66b6baf804f4","block_type":"box","text":"business model.","page_number":234,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"5d55abeb-3532-4780-a6f8-7ab4821b7b10","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":"ce7969b1-da5e-4cb4-bb8b-572934b3152d","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":"e6384fb3-497f-460d-b73b-ee151c24f6af","block_type":"box","text":"creation.","page_number":234,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"cad8db56-2021-4b7d-bb03-cbea42da52bb","block_type":"box","text":"Regular accountability through director elections","page_number":234,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"b0ce8f09-40ee-4b83-bb5c-95151719a61e","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":"4ba9a066-e9e0-4332-8903-9697a0a17e16","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":"82f89eb2-6def-443e-aee8-aceee8070877","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":"045fceb3-9616-4dcf-a998-5f712d8dc033","block_type":"box","text":"regular basis, ideally annually.","page_number":234,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"d27c90ad-827f-4362-af15-08ac48a3eee6","block_type":"box","text":"5","page_number":234,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"67967d96-e8c6-4442-83bc-8556de0f7004","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":"87d7f230-fc11-4463-8ba9-c94d7fea770d","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":"601c8f3e-41fd-4fed-ad55-6dc261f56bba","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":"9410988f-4796-46ee-8141-8eee6dd974aa","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":"5007e3ee-d544-4083-af03-ee0b26ba451a","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":"088da2e2-2fd3-4e06-8574-445d42ecf148","block_type":"box","text":"Board quality and effectiveness","page_number":234,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"f090f5d3-f618-4863-85cb-443d865fdd8f","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":"a364d3e8-77bb-4643-9cd0-c68e8e09f146","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":"20ac8458-66f1-43e5-b70d-409a2733d0fe","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":"f5da08db-479d-4f0a-b12f-8d0df9f88c3d","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":"42582dec-5830-49b3-ab77-df3fbd973626","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":"c381a51a-c1dd-451a-8369-1f3b4bcc0ea8","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":"e535c64e-a7b0-4a10-b8e9-7c4c9c18e385","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":"f7fed826-21d5-47b6-9f61-b7acd0978554","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":"5ac8dad4-9980-4a47-8a2e-40174025f018","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":"fbb11ef8-b61c-4dae-b9bb-1713412844df","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":"86f41b56-d8c0-40c4-a0bc-34888d72a0c9","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":"f0068811-f5e0-4a9b-8166-6c1d88d4ca36","block_type":"box","text":"returns.","page_number":234,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"4fc6be35-e005-4033-9bde-79bc3f51692f","block_type":"box","text":"Director independence","page_number":234,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"5eed6d22-fa08-4b65-bc1f-1aff57a846cd","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":"bf59f32c-cc4a-4713-af68-bc89dcbf137d","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":"3d2ff53b-5564-4d6e-8c17-2b76839ec600","block_type":"box","text":"6","page_number":234,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"64cee067-5b17-4fb0-bf3f-060a26148f7d","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":"c6c75881-bd00-4e2c-a27b-66b516b4a9a2","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":"650f534d-d1fe-4071-b733-468412e4e688","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":"028a6389-1fbc-41bf-86e0-c8e6d95d9b80","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":"8b20085c-8dfb-48ed-bad0-c620d09346ca","block_type":"box","text":"companies, at least one-third.","page_number":234,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"c97df1e6-1c9d-4a8b-be92-c887058ac1e7","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":"fa4a1e6e-8dbc-4290-af7e-2c3d1f2b6159","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":"66bf2a43-a7fd-412f-a5d0-c429d306eeb3","block_type":"box","text":"5","page_number":234,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"6c132010-ba67-4561-afdc-567f3867c481","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":"b83fb3c3-4571-4289-a66a-8564a76c4dd0","block_type":"box","text":"regulation or voluntary best practice.","page_number":234,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"a94abe86-6e52-496e-804c-fc410fa0e2f9","block_type":"box","text":"6","page_number":234,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"74417877-fd54-4670-a664-5e18861ed687","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":"06571a1c-150d-4b1c-a476-b5c5a866c400","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":"32bc9776-a52e-4826-975c-5b0404941bc2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":234,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"e60b0ad1-da5a-4afb-bd5e-a46ba79d4e06","block_type":"box","text":"Global Principles |","page_number":234,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"b2fc0e53-3359-44b2-8d85-0dffd188c9c1","block_type":"box","text":"6","page_number":234,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"0f61a6e5-6469-43d5-959d-1c7867679375","block_type":"box","text":"NM1026U-6049097-234/259","page_number":234,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"19fa0dbe-dfa1-46a0-a12c-f39d8d08fd51","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":"9ddd8b2d-ceaa-487e-836f-e8f083a66a6c","block_type":"box","text":"• Interlocking directorates","page_number":235,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"67c2b382-34fd-4b7f-a3a7-421b9bfc74e5","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":"81581bd0-5707-4cbe-ab89-43d2a510e97f","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":"f92c93c2-901c-4eea-9635-1dbb474195a9","block_type":"box","text":"and shareholders","page_number":235,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"83f80e57-7dde-4f16-b5a6-33cd5e0730d0","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":"cb931844-6df2-431d-8728-91f57533610b","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":"07c29705-8c5c-4d8d-8c55-f429bb79b345","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":"bac13049-7455-41c9-a33f-2eb2a1244e90","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":"342d1855-1d8a-4d0c-b0d5-95b292d018e1","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":"9884bab6-da47-4ece-9fbf-0eee868b899c","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":"6b314e2e-f22c-4e74-b645-b3138429a5d6","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":"7a834c36-ad59-4852-9d4c-96d954686f6f","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":"3d7dc0ad-2fde-45cd-a9df-d8c1d4b4a7da","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":"e60a45d8-e0a8-44e1-8a95-17bf4e75a2df","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":"53b09902-8a90-4966-b9b4-c26297202794","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":"7c102d78-bd15-41e0-9005-3c17b66d8e93","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":"51780144-6cce-4809-8c21-e143bc7231d0","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":"7e069492-688b-4282-a74d-2ad09bd8314c","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":"0bfa984a-633e-46fe-9e60-1329b626280c","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":"33d4193d-4cb9-435d-931c-4290e2611032","block_type":"box","text":"Sufficient capacity","page_number":235,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"73692556-d91f-487a-98e1-43f55a5145ef","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":"7100c7fc-8208-4da6-8aec-8442d017f0e1","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":"f7e794c4-fd8d-42fc-a4c5-54cef894d50f","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":"93619d25-f9c4-4f38-a703-1eff4c9bb926","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":"00f767a8-518f-4bcc-91f9-7d24eb776a68","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":"8808c937-2b6d-40a2-a42f-aa3b509e02bb","block_type":"box","text":"Board composition","page_number":235,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"9236b1d8-937f-4871-bf60-0252b3131293","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":"10547c2c-3945-4a49-a69f-1412d94c776f","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":"f5276350-7602-4368-9a02-261434383254","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":"d8f2a0fc-7170-46c8-ba4f-c5626230fb0c","block_type":"box","text":"the company’s governance practices.","page_number":235,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"386f5926-61c6-4eb1-a171-dc4ea9a103e9","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":"6b2fa3ba-10e6-4528-8c9d-f6e6b38fc1ea","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":"d67baa30-2225-405c-be2a-8b2332727945","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":"abfd82eb-afa4-4477-97a2-9b220658ade1","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":"bc62fdb1-ffeb-4efd-962a-b51d4079779a","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":"a4186d52-6196-4e8b-9255-350624b1dbc3","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":"e22fc999-9167-47a2-9b0a-fcb118345483","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":"94d0f34d-e5dd-4bd0-acab-c4935d81d5c6","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":"15cbabdc-fe77-45d9-9f85-597679f1909a","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":"6644876e-3b13-4b92-9f78-6abdc702dea1","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":"0b37fe45-4de1-4e36-ac8e-3efbb2e52d35","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":"fa1c4d37-6bd0-434f-a33e-919bd5a6a915","block_type":"box","text":"their board composition may be misaligned.","page_number":235,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"1dd086a0-d4fc-4ddd-9359-e818de8d8312","block_type":"box","text":"BlackRock Investment Stewardship","page_number":235,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"251e93c8-0e87-4722-86dc-fc242485312e","block_type":"box","text":"Global Principles |","page_number":235,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"acd36413-8e83-431b-ad21-e0b2a5d587b9","block_type":"box","text":"7","page_number":235,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"923c86ec-f354-44fc-89b6-8201add95160","block_type":"box","text":"NM1026U-6049097-235/259","page_number":235,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"937699bd-3b3f-4531-a522-84b098a9045e","block_type":"box","text":"Auditors and audit-related issues","page_number":236,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"4b00ec31-7206-4ce2-adf2-c36cff598c01","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":"84befeb8-d21e-4103-8c2f-97e2456d17b4","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":"434b75fe-4a47-4f92-bb0d-a8ad7c2ed555","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":"48ca9702-8dea-47ad-a9e0-be9b9969006f","block_type":"box","text":"justified.","page_number":236,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"ec6affba-caad-48cb-af75-1ec6d8fee5df","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":"9cf64918-7a55-403c-a738-8fc25885c8a3","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":"0990f008-8871-4798-aba7-b4c5071d7b29","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":"0a39a680-15b1-4d1c-890b-7dbeb26f8577","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":"94c8491e-47a1-4dd2-8593-87cf96bbc24e","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":"5a596759-3b75-4c1d-9df1-9b75da9a5064","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":236,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"b2cd0ff2-ba04-4de3-8761-fc25e83ae3b1","block_type":"box","text":"7","page_number":236,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"4ed378f7-62ec-46a9-a6a9-358ccdd5ffac","block_type":"box","text":"In our view, effective audit committee","page_number":236,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"a6aab2cd-40b8-4bb9-9c75-ce0b01b91f0b","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":"364d96e2-6137-4cc7-9219-73dff2fd7109","block_type":"box","text":"important level of reassurance to shareholders.","page_number":236,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"d7c12a9f-8a80-4e47-8a5c-21058ba22b61","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":"3a982441-ac03-4da4-818f-232ebd0d7f9e","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":"39c38e72-e48a-48e1-9e7d-7e43e216073e","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":"18457e11-c333-468f-b0bf-4ad3d3999a7f","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":"6e1f00c3-3108-474b-ab1e-932057e6500a","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":"c96ed941-8489-4f32-ae35-e4af880a19d6","block_type":"box","text":"related activities.","page_number":236,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"f14ed300-1aad-4eec-a8e9-c84e93e16be2","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":"3e185556-8c84-4500-9c41-3092bccced02","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":"815038f0-4a53-46f4-a00b-c062db128955","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":"de4a6a0d-6e2b-4064-a6a7-2fbc10294d1b","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":"d3ce0d51-616f-447d-abab-68682bd35e20","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":"b52828f6-5ac6-4637-a5fe-7e1e85913416","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":"fdd10bc0-b804-4769-915f-b199eb8633e9","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":"4e658f17-cf4a-4acb-80e1-234ba549e751","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":"944f4155-fe54-4e92-8bce-fe046ad4ca77","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":"bb62b75d-c4f1-4f5d-bff0-8b7c998f5844","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":"2c07a293-61f6-4418-a2b5-630468f948d0","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":"fa3d53d1-e49b-484e-b281-983b3dea946b","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":"4267dc6c-7de6-4ac5-b9e9-25ba0679c558","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":"96781bd7-1456-4382-8ccd-36b44914e376","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":"6e45bdff-7086-4302-bd02-cfe653f07bed","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":"b8a01c6e-5c10-4c4c-b8a3-ce531ea4b68e","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":"c00e89da-aeee-40f4-8ab7-ccaf43d3a894","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":"62df03f7-c077-4939-b621-bb2d0af76d44","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":"b3cb4ffc-3057-4ab1-a22c-41d2ad29fee6","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":"e1614d47-f811-47e5-ade4-a5d007ad86c5","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":"3c158cdf-d910-4522-995c-f0462e751f20","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":"b8f4babf-384e-428f-97e4-35c3d142655d","block_type":"box","text":"7","page_number":236,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"8dce22a0-5ca7-4e07-98b6-203738856e24","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":"064b98b4-d204-488b-9f66-e6678e332b54","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":"4a408285-f42f-4246-97e7-f37095e9863b","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":"bf00dffb-e904-4e99-bc8f-032ed6d053c1","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":"2b605a44-813a-47f9-910d-7acf14cccef4","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":236,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"31197350-a2ec-4c88-9458-594cc4519e87","block_type":"box","text":"BlackRock Investment Stewardship","page_number":236,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"712b113d-7fa0-4c6b-9c87-2b37e66955e4","block_type":"box","text":"Global Principles |","page_number":236,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"4810ed4f-bda4-4bc3-a068-120e054cbaaf","block_type":"box","text":"8","page_number":236,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"72601f86-4a48-46fc-820a-568dbf862a37","block_type":"box","text":"NM1026U-6049097-236/259","page_number":236,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f913c56-0ade-48fe-af9c-0ed374c05980","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":"5822c459-efa1-4f93-b655-0f6baf3af81a","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":"4e0a3763-9876-44d1-9c19-134193d3c608","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":"af71747a-bacf-4e63-8dcf-4555511d8015","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":"02e93c02-3fc2-4dad-aea3-517b0cf47f04","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":"a41f15af-2944-4899-8ec4-d73fcda4b32a","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":"7c896f54-7bb8-4454-8ebf-a713d1d605c1","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":"0b9794d8-d260-4df3-9efd-c39ca37a7a0f","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":"5f5cfe8a-21b0-4827-b26b-7ad4e30e42b7","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":"4d565d25-41dc-4da2-902a-c84e22a1243c","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":"0e82a6d2-3406-45d6-8f59-ee202576c67f","block_type":"box","text":"to shareholders.","page_number":237,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"653b37f6-ec10-49ab-bb2b-84987d74f0be","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":"fcfb7c49-9c25-4541-9e67-f6964f8937d1","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":"5458b229-a03d-4218-96b9-1e000dd3fb8e","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":"11b6dc37-7aa8-4407-8546-824cc3b0aa04","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":"52fb8b58-c8c3-4f97-b411-2d7d186c0684","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":"8b491d4d-3b38-4dda-84ea-3883aa4ce1ef","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":"f62542d6-b23f-45ff-9e0e-42dbdecc096e","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":"7b04eaee-4d69-4632-acf3-a51c0bcaaa95","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":"13a0c459-9a70-476a-bc56-2f2fd318a331","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":"7ec6f4f5-33fe-4303-9d7b-c3f485aeeacd","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":"c3747e1f-9561-4582-b22c-911a922d7a51","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":"6401a2b6-b236-49ee-a5fc-c070e0838d6e","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":"a7926107-0928-4083-a8b1-36832069829f","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":"58b99a61-425c-4c27-80ef-f872ce1bb3ab","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":"ee31fb27-b6af-4717-961c-82ab53c9f59b","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":"7dde3549-824d-4ae3-9a7d-33889b5879d8","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":"abfaa4c0-29be-4c40-a45d-69b13a16de5d","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":"b4781bf6-da65-4c00-881b-bbcc59029a14","block_type":"box","text":"introduction and periodically thereafter.","page_number":237,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"5dbb2393-b04a-4426-b7d1-e81800e46f94","block_type":"box","text":"Executive compensation and benefits","page_number":237,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"be76d5b4-ba1e-4078-a83f-9cebea03bc40","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":"5241e3e3-eda0-4f23-b296-feb9e587e3a5","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":"1e78466d-cbb2-44ff-9a1c-c5c7e8cb28c4","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":"b173d1a5-ea05-488a-bb11-187f45643a0f","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":237,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"4d0136d0-342f-40bf-8e64-437a44f57a5d","block_type":"box","text":"8","page_number":237,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"66595208-e2c8-48e6-aa73-8a7edaf8243d","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":"7a4e4d09-7cfa-4d86-9572-20f912b868bf","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":"1caff29a-8354-4764-bcba-3b57c4c44797","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":"cc1395f7-ede7-4830-89c0-e1a9ba9ed5f5","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":"fbec743e-cb12-4190-b116-13f361245df1","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":"74ff4a4b-488e-4f7b-81cf-6adb7dd1685c","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":"62423c79-f945-4b9e-b2a1-7e7cfc1ec33a","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":"d697c415-9a05-4c71-b2c4-4b65296324d6","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":"944c28dd-f1a1-4524-a16d-3f5c24539851","block_type":"box","text":"results over a period of years.","page_number":237,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"622a5e12-89ad-4f2f-b53a-5ee95e9bda1d","block_type":"box","text":"8","page_number":237,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"ed30ae89-81d6-4956-91c4-a6f6c8cb2ed1","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":"295e6cd3-bcc4-4ff2-9e91-5d7d452fb7ca","block_type":"box","text":"different markets.","page_number":237,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"a52da055-54ec-4bbb-af2d-a458583ed02d","block_type":"box","text":"BlackRock Investment Stewardship","page_number":237,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"350ed7fa-80af-4674-98a4-9a97d787bbc6","block_type":"box","text":"Global Principles |","page_number":237,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"d08bf098-805d-4345-a0d9-a71c1e23e78e","block_type":"box","text":"9","page_number":237,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"5847467d-ae7b-433e-a67e-07451ec9cb18","block_type":"box","text":"NM1026U-6049097-237/259","page_number":237,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a55c8e1d-351a-43b7-9c9d-637907d7f26a","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":"cdd05523-722a-437e-a895-139ce6c17f1e","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":"f13cba73-8fda-4a7a-97e2-52646075df9a","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":"bccb0b6f-b04e-44dd-9cc5-22e444e678e5","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":"880f9468-737f-493f-b8d6-65405038908d","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":"b618c0d3-f32e-4171-bae0-aec5cdd59cdb","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":"735d0803-a68b-4735-97db-e82ec55ae132","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":"6ca451db-a463-4b24-a637-c4ad662ed647","block_type":"box","text":"strategies.","page_number":238,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"5f6c142a-1149-4cb7-bb1e-aaae5110fee9","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":"0d7edf20-c64a-4c8f-ac43-af48571ba400","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":"0d5ecea0-a434-4ac0-9a8c-d8ac9949634a","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":"255898cb-8d7d-42e1-9a85-429bf06b10ae","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":"2587d6e6-31c8-43da-8554-d401b01e6fce","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":"9ce41458-1e94-490d-b768-1c52359819ba","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":"b76a1d61-33b4-4b03-aac2-9d8532c211f8","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":238,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"c32ae9c8-92fc-4fa8-8518-0f6430bc181d","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":"68e27c0e-b3ee-477c-9b88-7d96c4f7b81e","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":"709ae175-56db-46f2-8e5d-5a6b47a57602","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":"63490908-a7d5-4183-b8c6-9efa1e98de7c","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":"fd9d2927-0b39-4bd2-91c9-49a1ac9a48ab","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":"7f83c000-4cda-4e2e-b437-4ef551e27472","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":"2737014c-0816-4304-abfa-6896ede2580e","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":"bd8c9b05-1ae5-498d-a6dd-b66678d64108","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":"91f10b6f-cf47-40ca-ab98-9f931de6c0c7","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":"b3506758-fdde-49dc-9ee5-4062ff51c959","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":"eb0b8a8a-674e-49a2-96a3-d7c5349c56d1","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":"867055c4-5b3c-448e-8859-d6adca0f7226","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":"7f1c16c8-0eff-43e6-a715-71ee6aba3a6a","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":"345dd05b-9074-428c-8be0-e085ba6ffc86","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":"fc72ccde-ed62-423e-b75d-235c08af76a9","block_type":"box","text":"members for poor compensation practices or structures.","page_number":238,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"c2f21914-0513-4779-b592-77f495dea0cd","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":238,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"c5e8ac0f-de3e-444b-a24c-e0b7e966404b","block_type":"box","text":"Corporate form","page_number":238,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"d99c0d9f-4cb8-4149-994d-153e568a0835","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":"5df61f4e-74b1-4ab2-8cc7-5b8a71ca55ec","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":"81186564-e3e2-4e3c-a0f8-f14f8535b001","block_type":"box","text":"9","page_number":238,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"fd8f4ec8-a161-420a-b108-a78b5257e1bb","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":"32f3c8cf-ee91-4177-9c69-10d02dda5237","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":"28b8779d-0c77-4021-9fdf-b51d6e9a93bb","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":"5cfcf557-755f-40de-81ec-5facd0b55930","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":"186259f4-55b1-4b5b-898b-b2a2bb6dea83","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":"ba6df4e3-fb3e-4e0f-8f95-ff013be83b9b","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":"01a6eab7-0aa7-4453-a384-81b7eadcf8a6","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":"f3ff3660-21b9-4e3c-b957-33d9234842b4","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":"f0923643-4301-410d-82e0-a80ad4a64cf8","block_type":"box","text":"9","page_number":238,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"092cac1c-3400-46e5-93c3-39f1d3483806","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":"143eec38-7960-4c67-8fd0-7b12825e43c1","block_type":"box","text":"BlackRock Investment Stewardship","page_number":238,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"f6ec2ac0-e078-45ed-9003-aaf5478e2458","block_type":"box","text":"Global Principles |","page_number":238,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"8abb235c-18cc-45f2-ae79-02b799c9c7e8","block_type":"box","text":"10","page_number":238,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"61b675f2-7b55-4faf-82e8-71ca0ee666b6","block_type":"box","text":"NM1026U-6049097-238/259","page_number":238,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a4318140-bf06-4618-8001-6ea5eb489d1b","block_type":"box","text":"Shareholder proposals","page_number":239,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"d88f3165-ce9c-483f-8c0c-52579a41e2db","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":"4a475aab-19c1-45eb-a0ea-29cac18bdda9","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":"37548b40-13a1-41a5-a174-223698f20556","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":"a64542c0-fb6c-496b-8634-5626d7a3b166","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":"83edcb09-3d04-4df5-9c2a-a0b4d781a64f","block_type":"box","text":"sectors, locations, and business models.","page_number":239,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"a61d1d75-5bc6-4492-833f-ad965199ce6e","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":"a864af6f-d037-4530-b5bd-874376a2ca43","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":"a4812b06-6ff7-4262-b533-20d589bf2a93","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":"30419ce6-0324-4d58-b25e-c3104e3b367e","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":"359a8062-0101-47fc-93f0-8094720b849d","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":"7cb91b15-1895-432d-a852-68defb2d504a","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":"0b213910-4b00-4398-8597-23c4602b39e5","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":"205ea0b5-f066-401e-876e-dbbbde8d2e32","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":"5c707fbd-b525-4088-ad60-913c0129d078","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":"a50642ee-b7ee-407f-b42a-fead4363a797","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":"c9c5c333-05e6-4610-97a3-cd2265a787c5","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":"be8cdea4-6c85-476a-9230-db24de59e420","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":"a68e26e3-cc51-4351-af91-21c733adb23f","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":"da2640fe-d494-41f7-9e2e-b973cf4a2bc3","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":"d1c3d1c3-a37c-491f-aeb2-7693066014be","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":"2c9e7e0d-3172-4b7e-bc56-ee4a8d3a6850","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":"1aecd945-f2f1-4c8f-9a08-4a377607e678","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":"34413f3b-1443-40fc-9780-5e8d40a60e5e","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":"f6e543a2-6309-4bf7-af8a-39424126a432","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":"fbb48554-855c-464e-b5fd-1edc3a301d62","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":"2d6315a8-af47-4470-94ce-fa27adecb999","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":"7e9901c4-f7ef-42a4-a822-0a0703258bfc","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":"cceb71f0-888c-49f2-b8b3-de6e82399927","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":"bd2eaafd-9865-427d-80ed-5504930e1aa9","block_type":"box","text":"interests.","page_number":239,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"c6252869-bf92-4f13-99f6-35dc61f32f80","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":"08f01f75-85e5-4bff-9bfb-bc107b9c6e44","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":"9f1ac6c1-a78c-45a9-bdf1-124b881480a7","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":"0a485d1b-f326-48b6-b755-a69a595306e2","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":"934403f6-1a3c-4cc6-aeb2-c07cc681a4b3","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":"9fcf9eed-904b-4c9d-af1c-0e0f94fc12e8","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":239,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"c33e9876-1a2c-4e05-ac88-2f250c66ddc8","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":"3d6d1b82-341e-40ad-bd63-be5f353d5dcd","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":"1728afc4-7fdd-4770-b900-f5feecdb4031","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":239,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"3e97ef03-970e-4f28-a949-6ede4023949c","block_type":"box","text":"10","page_number":239,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"e15d71f7-227b-4b1c-895a-eeac22c208d3","block_type":"box","text":"10","page_number":239,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"2974d14f-6949-4581-83e6-06e317b591b6","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":"17cf3363-32f7-47ea-b497-34b53a97f246","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":"d1c89c60-f778-41ab-b594-4434a7e63769","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":"60364694-456f-4035-8f66-31613780bd70","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":"6cef376e-0598-448e-9bac-7b226e19c353","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":239,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"f7ab7e2e-22fa-4ade-8ce3-62b130666999","block_type":"box","text":"BlackRock Investment Stewardship","page_number":239,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"cfd9daf3-9ae2-4bfa-a5be-26b1e86cb5a0","block_type":"box","text":"Global Principles |","page_number":239,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"6fbe9177-6225-455e-a661-756bc98f7b0f","block_type":"box","text":"11","page_number":239,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"54377c5a-050d-4052-a599-47686871b5c6","block_type":"box","text":"NM1026U-6049097-239/259","page_number":239,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"25fa6075-8c9e-4d48-a805-8ef5170afae0","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":"7778cadc-d99f-4dbf-b311-11c420d0b013","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":"3be1f037-7f2f-4e43-b46f-1ed507cfa6f4","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":"d4e890a0-584d-4e62-a417-a3fee8dd8950","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":"d6206a7f-e079-4b86-84e7-5d79c99b1275","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":"43d24c09-2e98-4255-9f7c-8f32b12a7d76","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":"85483e37-f52d-4c9b-b319-476597212af2","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":"8c4d3884-5e0e-40fa-803d-3f403bd72e6c","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":"2127c96c-8a67-4322-bf8f-ea9e6c95f426","block_type":"box","text":"11","page_number":240,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"afc235be-3443-4669-9b36-de1fed82d03d","block_type":"box","text":"However, we do not mandate","page_number":240,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"4d6e17bb-20c3-4674-81d3-07f91405496d","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":"a39e0aa5-c011-4fe6-a977-4780503eb618","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":"e3e6780c-18f8-4213-95da-0a93fbde54b9","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":"6699adfa-fdbc-4471-924a-73433d2fa65d","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":"733133fb-a852-470a-b564-b28a9b54eb43","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":"a18ba19e-08f6-4495-a5d3-895e68ed865b","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":"193446ba-5651-4f40-8b76-dbc751d8f1ae","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":"3391d9d5-0c1f-4350-b5d9-4e532b021b38","block_type":"box","text":"decisions.","page_number":240,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"6061c021-cfd8-41c2-a714-23fe2b62f828","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":"436961ea-6e49-464f-a03b-c4e7238a300e","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":"413fdf12-1346-428a-832b-77303dd02c68","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":"96ffb4c8-b2c3-4393-bb36-7d525e445271","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":"ed9c3931-4913-44a7-bd81-abbda1547782","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":"9b7fe72e-1960-40e6-9aca-45610109ce2e","block_type":"box","text":"and responsible business practices.","page_number":240,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"1023039e-bb53-4d6a-8fc4-7450e3cc5b80","block_type":"box","text":"Climate and nature-related risk","page_number":240,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"7b6c5227-c0d1-4a11-818f-30fd479fc4ad","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":"d2a4ef2d-c5ea-43c6-bf0a-12f4e332cc7f","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":"4e545205-e9ec-4477-b117-9c059c60bdff","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":"bd3dbb0d-c49c-4fe2-b7b3-bfaabc4eec83","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":"12db2cfa-30d4-4502-9e30-b1241f6b8132","block_type":"box","text":"plan.","page_number":240,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"2e74439b-2353-47fc-acfd-a84833bf6fb6","block_type":"box","text":"12, 13","page_number":240,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"3a0a0535-3d23-407d-92f1-5f13a6fa6694","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":"7df98a09-e34b-4107-8f51-c8eb53b1dc03","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":"b8a8ae12-6de1-44a9-9487-389a3c548f0d","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":"8c9ae44f-ab4c-431a-b8c6-f746b26f8a55","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":"2f07495d-cc97-4de2-8a5d-43db197fa523","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":"cb49d41f-d6d2-4dbd-9edf-a4e1b5844cf1","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":"550c73e4-37e2-4918-b9ef-5410522a593b","block_type":"box","text":"11","page_number":240,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"593c592b-08a5-4fed-b9cb-f53343299452","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":"d644741a-070d-4b75-ab78-e63d23dbc769","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":"f357669a-4395-4d28-aa22-687da5652d67","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":"6bfee581-0108-4aac-a898-f99f2e1d44c6","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":"a885ea75-1f78-43e8-aad0-d25f75893118","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":"d48c0069-60bf-4bf8-b6ff-ce8f5a730fa5","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":240,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"b724d039-a284-4a51-9be1-6dabd4068d12","block_type":"box","text":"12","page_number":240,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"add8abca-556c-4583-814c-2b248e672a30","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":"bd0e9f3e-56f3-491a-a1eb-bf4bf22189b0","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":"27865c85-3ee3-48ca-9e3e-6e5137a3dc3c","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":"801847a6-c5d5-4ed0-9eaa-0eae5b9f3b07","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":"a328f6fa-31ac-4075-95d8-caaf1367abfe","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":"9830f7a7-3009-415b-85da-354f4ec85d95","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":"c6bab07f-ce66-4b82-a701-066913c8e251","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":"598ba2d4-8427-47f9-8da9-b4e6b797d1f4","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":"f312be0a-041c-4599-8c63-64dbdd4f1884","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":240,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"b6e456a5-366b-4ebf-bc7f-c97dee75eb2d","block_type":"box","text":"13","page_number":240,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"af42dc21-bfa4-42fb-a419-1ab98d70256a","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":"f7ebb37b-b8f1-424a-be83-ef7c089fa00b","block_type":"box","text":"BlackRock Investment Stewardship","page_number":240,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"8cf69073-9fdd-40d4-a238-a5b131c3a009","block_type":"box","text":"Global Principles |","page_number":240,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"cfbed13b-19be-4900-9792-7cf26bece8c4","block_type":"box","text":"12","page_number":240,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"ab31cf52-f572-47a2-8b7e-e219233aa04c","block_type":"box","text":"NM1026U-6049097-240/259","page_number":240,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"733753e6-2ed7-4a98-8250-97419b2f3ace","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":"57042ef2-152e-4d35-9216-e831dba1a55a","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":"644ca925-67d5-426c-a5d0-7a1681b07b37","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":"586391f5-bb8a-4980-87c2-09881e5be9e0","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":"b07d928b-6da0-4ed4-856d-b9baed8196e8","block_type":"box","text":"to the extent financially practicable.","page_number":241,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"9f7b8302-798d-4393-af90-6d298cd5494b","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":"57de1170-8a33-4e76-8b24-e55cf1924d92","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":"c6c9e58c-f6e2-480e-93e1-95c9239f58b7","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":"24f56d17-057d-424b-aaae-7feabf1636cc","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":"5e0fd25b-3dc0-45a1-b950-7541b72665c2","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":"88984944-4406-4dc9-81e1-b0264eb4e396","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":"cca57da9-4ae0-4380-8bab-5998c1b2a458","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":"474d106e-9857-4b51-a807-1416aef9851f","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":"83e34637-5183-4efa-8271-85d18c2b7634","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":"492f6cec-cb9b-4fd8-b4dc-882cdc0eccdf","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":"9e831299-157a-4032-9147-7467ee5024e2","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":"c7899fcd-66f3-4914-9d99-13805cecf2b9","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":"7b054dbd-3553-425f-aa43-cf9b464af4e5","block_type":"box","text":"14","page_number":241,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"b1e2fd74-fccc-4d5f-80d2-11725f13ef26","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":"284127ba-b676-401f-b753-5bea68d2e9be","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":"38df3b47-ffc6-4232-bf28-c2be8a08cff0","block_type":"box","text":"the board oversees these risks.","page_number":241,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"c0829dbd-ed78-4fa6-8694-6ba882f6386f","block_type":"box","text":"15","page_number":241,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"967cf1cf-b75b-41d0-90b9-4ddc3abf2422","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":"3602f51e-6b1f-430f-b740-0dccf2523980","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":"1452dd2a-374e-48f5-a80f-526189fae605","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":"9612f65a-1354-4b71-b62a-78c0f4fc44bb","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":"2cb037a1-1973-4c8e-aea8-bf429adfa45d","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":"5ee1763f-44aa-4cc7-bd59-8f0acf6595ca","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":"0fecdca2-439d-4e08-933d-1d29115d3143","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":"95ae4c38-466b-4bd8-8505-3fbecfa69340","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":"b3dc89b9-bab0-4789-b36b-cfac70e5ada4","block_type":"box","text":"central to long-term financial value creation.","page_number":241,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"9231e5c5-52d9-4e77-a01f-2e6e59c56667","block_type":"box","text":"16","page_number":241,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"429b2205-ab6d-4e19-b9dc-27f87f0d139a","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":"a76baaa0-37c6-4ae1-870f-bcebacbf4c30","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":"675a79d5-a6f3-4ec0-91b8-9cf2e2658352","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":"826a7e5a-f058-49dd-8346-93a412ad4bad","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":"8a9488fa-447f-4fb5-b172-975526fbd0b8","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":"39520bfc-131c-4598-bbd6-cc42ca790b9d","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":"336225a7-ad16-4dab-813e-a4831c85bf5b","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":"905a04b4-ae7f-4d86-88dc-a896d5394dd6","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":"88d600e2-2589-48f8-8ada-e7302de72fcc","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":"65cf67bc-a7da-4954-9397-aed86163f64a","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":"f7bd052f-e6d5-4112-a978-c7cfbc411501","block_type":"box","text":"14","page_number":241,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"dadd5107-45e7-44ad-a971-f1890cfad18d","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":"81a1a53e-b7d3-4b4d-b0c5-e24256819d60","block_type":"box","text":"15","page_number":241,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"900d9328-97ef-4741-8225-77611c4c0f50","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":"40529ac5-9b95-4f8d-bf5d-1f056ca3af10","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":"2f213e91-7a43-42ff-8ff5-dc18b9c47ea2","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":"db742a74-af79-47fd-8dfb-2a7f8f5a228c","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":"ecdd8192-ca47-43be-b2ac-429d55161428","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":"e4a2bc51-1844-4793-adf1-0c850283ef79","block_type":"box","text":"16","page_number":241,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"1d508804-0db4-42eb-be30-ca3c009c47e6","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":"4b81b8a4-4aff-4027-9690-4a98bbc29a4d","block_type":"box","text":"December 2025.","page_number":241,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"2be5c95a-41c8-4cbd-9407-5e2f5914cac1","block_type":"box","text":"BlackRock Investment Stewardship","page_number":241,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"f847f8d5-700b-4085-adcb-046bedbc3030","block_type":"box","text":"Global Principles |","page_number":241,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"082de322-ddc9-4ade-9d72-b0f45ec2f983","block_type":"box","text":"13","page_number":241,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"b2d7303b-7d44-41dc-93ce-8e1918d536cf","block_type":"box","text":"NM1026U-6049097-241/259","page_number":241,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"20508ad2-0674-44d6-9b78-138fb5d75ff2","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":"3dba8747-f0bc-44ff-aa6c-1cb571528ca9","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":"249edfc8-49dd-4b61-bae2-eb2ca206fd46","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":"21c86f5c-3fa9-47b7-a863-227305a6280e","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":"879e51bc-0ed6-45ce-9199-dd05f50c6d87","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":"ff84fffd-00c7-4374-86f2-aa1de06df3c6","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":"5e29b059-20be-457c-907f-82e002e222f1","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":242,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"29dcfea6-7cb4-4a77-b076-9dac24fb6327","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":"f37c8fc8-76e7-4a66-a4b2-16c4261d853d","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":"18f44d10-0b74-4166-9625-92507dd6f5b5","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":"6a7913ae-9279-4be4-b743-3ddb3d423efb","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":"a153575a-1f16-4d0f-b4d6-61303829180c","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":"a4d712bb-3b65-4722-9d11-357f61d25721","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":"7fdf443f-af80-4baf-9b7c-6c44619b23c6","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":"16a17d61-8335-421d-9c92-5835a3d7a67c","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":"8e7fef86-e6d5-40d1-abd0-b66044ac7bd1","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":"62359a4b-fa99-4fb6-bfd0-1be624715176","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":"8f65ad57-b7ba-4628-968e-5773255d5b03","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":"b7f799ac-261b-4c8b-8f53-85ef042ae293","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":"5850300f-03e8-4b92-95e9-9ff3476597c3","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":"b3e466b4-630b-4b70-be87-1f80670bde34","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":"503cbb2f-0412-46b3-b1cc-aab7815d5b87","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":"860306a3-a194-428f-8756-50acc6ea57f9","block_type":"box","text":"Vote execution","page_number":242,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"586593c9-ae72-46cc-9d39-4c25307613b4","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":"83c2073a-192f-4b27-9a3f-f9c358c18c62","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":"41ca097c-cd26-44f3-bf42-00aeefd92e7d","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":"009c0d7a-ba5c-4d32-9267-dbef7c53a1c8","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":"86d7ebce-ba3f-4e66-9728-26cc26fdfd1d","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":"8edb2bf6-f131-4709-a99d-a8083705b5fa","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":"3b132432-3dd4-4c38-83a1-5662f8b9f2ca","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":"d45a242c-47d6-4a1b-91b0-e32f219a7ccf","block_type":"box","text":"procedures,” below).","page_number":242,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"8cfbd2cd-051d-4d87-acf3-9427e102b2ec","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":"1be356b9-1b73-42ff-9cbe-4610ce8739a9","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":"97ab9213-75a6-43e2-a3ac-4806bfc9f7e5","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":"dd184064-3bdf-4a0b-b655-9341ceb682e4","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":"41596fcf-c5ed-41e8-ba7d-8ae832133101","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":"72712f6b-f26f-414f-90d0-74ebd113f923","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":"e8913b4d-c490-417a-b4e5-bc10cdf8e1fd","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":"dcc0ebe1-6f55-40c7-8a12-75eacc47076d","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":"004fb4e7-d666-4f93-b9e7-b319c386319d","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":"d216a0f9-a4dd-4f41-87cb-b7f249f22ec9","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":"32cf95a7-17ea-4e0b-afeb-9c401f4441b9","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":"ab6d0494-7469-474e-905b-9d117f18056a","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":"de4c5143-9830-4ffd-99ba-d79751b31196","block_type":"box","text":"BlackRock Investment Stewardship","page_number":242,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"8d4aa71f-8a9b-4d16-809f-b07bfc811140","block_type":"box","text":"Global Principles |","page_number":242,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"9dc805ab-b00c-4433-997d-1765addec0d5","block_type":"box","text":"14","page_number":242,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"45447ee1-4509-4e13-9763-db48e7dcee33","block_type":"box","text":"NM1026U-6049097-242/259","page_number":242,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bcd15701-2667-45ee-b9f5-8ec658a8498a","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":"893abbad-be51-4410-8842-31f42a332cb6","block_type":"box","text":"on the proposal.","page_number":243,"box":{"x":116,"y":103,"width":125,"height":11}},{"id":"1bfd7386-2102-4304-9b0a-edd41711a2f6","block_type":"box","text":"Conflicts management policies and procedures","page_number":243,"box":{"x":117,"y":134,"width":382,"height":12}},{"id":"e6dae5be-2534-4eff-a62d-a217bd4085de","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":"a4ba40c1-9729-44e6-877b-fc9c0bf84cb3","block_type":"box","text":"partnership or enterprise-level vendor management activities.","page_number":243,"box":{"x":117,"y":180,"width":460,"height":12}},{"id":"942d6e82-17d5-4f14-aea5-050d3ccfd1cc","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":"0647a58c-97d7-4a68-bf74-37b38a6ccdc8","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":"82fe2b1c-a41c-46bb-a455-d82daad33d21","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":"472b581e-fa72-40e4-9f51-86b24cb98050","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":"10c6e943-6c26-4cb8-ae74-e7a6fc561ee5","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":"d6e9355b-9a51-4418-a24a-5c448ed80d31","block_type":"box","text":"Securities lending","page_number":243,"box":{"x":117,"y":320,"width":148,"height":12}},{"id":"22d4cb5a-1c83-4faf-b3bc-9455aa419aba","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":"f6ee46a6-efa6-4cf6-b9d8-1271aa71eb85","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":"1ed728f3-e4e1-437b-a5f7-56823f523535","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":"95f98bf0-0551-45c9-9854-e869024549c0","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":"8dd96f4f-b321-497b-999b-14b52ecf4f19","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":"0f7ccaf1-35e3-4c22-bef0-1a3c28e1662a","block_type":"box","text":"industry standard legal agreements.","page_number":243,"box":{"x":117,"y":428,"width":271,"height":12}},{"id":"71563300-6c7c-4019-afe4-190588479dcc","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":"8ab08550-e6dc-4e8e-8321-a1b88ba7f64c","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":"dbd3c94c-f222-481f-9c5a-fc8e3cba6da1","block_type":"box","text":"manager to our clients in helping them achieve their investment goals. 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The Guidelines are applied by the dedicated team","page_number":250,"box":{"x":170,"y":854,"width":708,"height":9}},{"id":"a0cbc49b-c946-4d31-8ce3-e1dc46074ba2","block_type":"box","text":"with discretion, on a case-by-case basis, taking into consideration the range of issues and facts specific to the","page_number":250,"box":{"x":170,"y":867,"width":651,"height":9}},{"id":"c50c318a-6fec-4784-bacf-f6a62dc7d064","block_type":"box","text":"company, as well as individual ballot items at shareholder meetings.","page_number":250,"box":{"x":170,"y":880,"width":403,"height":9}},{"id":"dac84a74-c8cb-4f21-b22e-acc09767f2d8","block_type":"box","text":"BlackRock Investment Stewardship","page_number":250,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"c25168d9-c4d9-4801-a319-355d0923a66c","block_type":"box","text":"Climate and Decarbonization St","page_number":250,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"b3b2caa5-9dae-4b5a-bb4f-ce320bdb546f","block_type":"box","text":"ewardship Guidelines |","page_number":250,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"6ad06211-56d0-4ad5-b916-52014e4e6ce2","block_type":"box","text":"5","page_number":250,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"944bca96-83d1-4fcd-a62c-34e500c96a5a","block_type":"box","text":"NM1026U-6049097-250/259","page_number":250,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fb0db2c9-a080-4847-9f31-a9b66e88bcc2","block_type":"box","text":"Corporate Disclosures","page_number":251,"box":{"x":117,"y":87,"width":179,"height":12}},{"id":"afd15909-4b92-417b-b5aa-92a018109a89","block_type":"box","text":"13","page_number":251,"box":{"x":297,"y":87,"width":11,"height":6}},{"id":"bf22a361-82e3-407b-8a4d-d3e4a9e1fc9c","block_type":"box","text":"In the context of these Guidelines, the dedicated team looks for companies to provide sufficient","page_number":251,"box":{"x":117,"y":114,"width":710,"height":12}},{"id":"9ed2ac48-e3f3-4022-9f39-9b17f605db86","block_type":"box","text":"disclosure to assess whether the company’s strategy is aligned with the low-carbon transition. As a","page_number":251,"box":{"x":116,"y":129,"width":740,"height":12}},{"id":"c6bc1bb9-a38d-45aa-8b67-d78822682a26","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":"fb1b6711-bb5a-421c-a7a6-136b01966cf6","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":"7426b553-7712-45b5-a51c-4e3738109eaf","block_type":"box","text":"appropriate, which may include:","page_number":251,"box":{"x":116,"y":176,"width":241,"height":12}},{"id":"2e4f4c85-5e11-456c-addc-79306b261acb","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":"d6461a55-bf44-4cdf-b381-5a31cd156905","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":"968b77b6-a8b5-4190-bdab-7f57c4210c66","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":"4bb9ca3a-ba92-4fd3-b917-606bbba91d27","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":"6c6d256e-b1a0-4245-bb95-226c904b5b26","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":"bf92df4c-3e16-499b-8d2f-9f23fd63ff79","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":"52ba6b59-9bc8-442d-80ce-4efa491fc79e","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":"f15b030e-3b29-4531-916e-9b47b3887244","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":"51460d56-0847-4d1a-af4b-a7566e894311","block_type":"box","text":"14","page_number":251,"box":{"x":559,"y":317,"width":11,"height":6}},{"id":"b20171cc-8f8a-43f5-89c4-97c36c8231f6","block_type":"box","text":",","page_number":251,"box":{"x":572,"y":325,"width":8,"height":3}},{"id":"908ed464-fddd-41d1-ae87-12bfe0629c79","block_type":"box","text":"15","page_number":251,"box":{"x":581,"y":317,"width":11,"height":6}},{"id":"3c3b3409-29cd-413b-8477-8f8638efec74","block_type":"box","text":"IFRS S1 addresses the general","page_number":251,"box":{"x":592,"y":316,"width":244,"height":13}},{"id":"0fa2228b-aa85-4e5f-a928-ebe5efe7ed4b","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":"00862caf-0401-4c64-a0ad-23b26b118469","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":"30f0b578-0f9c-4edb-8ffd-b6cbf829b0ac","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":"0e41e31f-0f57-4405-9201-095cbaca2fc0","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":"a74809fa-f46c-46e7-826a-8f563ce6e60c","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":"6552c9e7-25d8-4fd7-b6ed-b9ee4f58b23d","block_type":"box","text":"16","page_number":251,"box":{"x":689,"y":400,"width":10,"height":6}},{"id":"ca3300ad-1e78-40ba-af75-cdb88c4921d9","block_type":"box","text":",","page_number":251,"box":{"x":701,"y":408,"width":8,"height":3}},{"id":"f7df277b-19cc-4931-a110-f3bcbef46bac","block_type":"box","text":"17","page_number":251,"box":{"x":710,"y":400,"width":11,"height":6}},{"id":"a1b4814a-90f5-4222-ac73-0fa23f6729bf","block_type":"box","text":"In addition, the","page_number":251,"box":{"x":721,"y":400,"width":120,"height":11}},{"id":"040310de-4ac8-4d43-aa78-0fc85561ae97","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":"16780ca4-99b9-45e7-8082-43d53a4265ec","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":"58962d91-25fb-4e5b-a401-9edef3dfc10f","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":"b0dff766-d232-482a-94e1-28528a4c5871","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":"814c83ce-95c2-44b7-8f48-4414d5f757e7","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":"993b2ff1-3777-4e2c-92a6-275b1bcd37b6","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":"dff52507-e291-40b4-a71e-4675cdca0951","block_type":"box","text":"18","page_number":251,"box":{"x":864,"y":493,"width":10,"height":6}},{"id":"a9c28da9-c085-46cd-8620-7b888eac1c67","block_type":"box","text":"13","page_number":251,"box":{"x":144,"y":518,"width":8,"height":5}},{"id":"6ecada0a-b9ee-4440-bb41-d40b68626088","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":"a8c4736b-bae0-4131-aa5d-ed6d656b0af6","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":"6a67bb1e-afc0-4270-8ceb-d3be353eaf6b","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":"8b7c25a8-ff53-4153-82d5-80dd949eb505","block_type":"box","text":"14","page_number":251,"box":{"x":144,"y":557,"width":8,"height":4}},{"id":"d46d878b-8570-417e-9d60-4114d8ad9214","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":"34fc04e7-b093-42fc-93bc-1e4f9e522963","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":"50143daa-3e86-48ec-8ce2-4b12f584b444","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":"3c3e883e-6951-47e3-b358-a114bd4dee42","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":"a6c3730b-d54f-455f-b758-35008edffc9a","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":"2fdc5e6e-5997-4c43-a6ed-7088b8dd2c42","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":251,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"4d8b70ba-18e9-4a6d-b878-584b233e83c8","block_type":"box","text":"15","page_number":251,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"c6fb8b0f-19a4-42c3-97df-d4147a76beaa","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":"a67bd2dd-250d-4709-befb-e10ef01408b9","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":"f9b6b795-701a-4926-86e8-b2d72cd39c4f","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":"e58e411f-a06e-4106-bd92-e0e21fa45104","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":"b18a8bf8-f3c2-4a41-87fe-14f28f069afd","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":"1ec8f782-2721-4613-82a8-958051c8868d","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":"cc160678-2fb7-40e7-8eb0-74ceacebf8d5","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":"35f0c3e5-409d-4209-8def-e4dc1e3f0bea","block_type":"box","text":"voting decisions.","page_number":251,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"6a631db9-ddad-4fec-9c53-4c94ec5322c5","block_type":"box","text":"16","page_number":251,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"c7768c7c-ac10-4f12-a18a-9b22ae567bec","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":"2740cb68-76e8-43c0-8eb1-7ba51d01c678","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":"bb6c6376-d65b-4518-94f3-9da053792ba9","block_type":"box","text":"2025.","page_number":251,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"a9827209-326b-4b76-a0c2-86c408587fdc","block_type":"box","text":"17","page_number":251,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"7343222e-cf9e-4280-96cd-a1dd44558d6b","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":"21271134-814d-4f79-9c91-3fa69d4c20c7","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":"e3fcc1bd-784b-4a62-9e75-62ffddb5088a","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":"b0cb2ab3-1724-4cc3-b97c-cd72c039ad86","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":"828aa3a0-59c1-4da1-85a7-cf0e933ca800","block_type":"box","text":"18","page_number":251,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"7648000c-9ae1-4c7d-9f13-e1adb4607eeb","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":"2003f336-661c-40c0-90cf-708e35f7e660","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":"759e6946-d5ce-4def-919e-fe8dc9fefebe","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":"a5c9b136-2bb4-4e80-9fa4-7be09fe6b436","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":"04098862-9eb4-4266-8dc9-48e76cbf091e","block_type":"box","text":"material to their business models.","page_number":251,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"21bb1cda-cf8c-4846-a140-da0df5c8d7f4","block_type":"box","text":"BlackRock Investment Stewardship","page_number":251,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"6906a693-bb34-441a-83e7-e827d839aa1b","block_type":"box","text":"Climate and Decarbonization St","page_number":251,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"40897b40-a27d-4038-be76-bdb9cd03a79c","block_type":"box","text":"ewardship Guidelines |","page_number":251,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"26fc5df2-0cd5-428a-9871-acd311166006","block_type":"box","text":"6","page_number":251,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"03dd595e-b78c-411b-bdec-4f65f9bfe49b","block_type":"box","text":"NM1026U-6049097-251/259","page_number":251,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4edb7ac7-f242-4e01-87c6-028338de56d0","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":"9fa28937-f48b-4a31-999d-445cfd1ee053","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":"b457edb5-ea29-4203-9c8b-8737d5899f9b","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":"2130b7f4-bc31-44bd-8736-8a72cc77cea9","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":"6564bf61-b17c-4f9f-b37b-12ece47e25f2","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":"dfbddd94-517c-4abf-9c19-917b4d5e7c88","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":"fa98b8a2-af88-4b46-9dc4-09e63cfdd2eb","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":"89eabb40-7c76-423e-bbad-7761e3635029","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":"b45547ff-79e9-4d9d-9b23-cf0bfb1a9635","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":"e3b370b5-a56f-4695-adb5-98d41e26fa15","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":"340efb9b-9ba3-4134-bf0e-d57805189616","block_type":"box","text":"risks.","page_number":252,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"6db57256-2050-42a7-b7af-50f7b096f345","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":"ac738469-7f7e-4c94-8fe5-f1a82d16c53d","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":"8ba0bc7c-5cc8-461e-a5a2-78c0632c2e70","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":"6736bdec-41f5-4ff8-809c-5556f252aedf","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":252,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"e28792c1-2360-41e8-81eb-c2d8414eb7e8","block_type":"box","text":"Transition plans","page_number":252,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"d42c2de5-e47c-4573-86d3-91580fc9e70e","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":"bea6fe03-d62e-4a97-8712-35dad7a7d609","block_type":"box","text":"low-carbon transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s","page_number":252,"box":{"x":150,"y":387,"width":701,"height":12}},{"id":"7443058e-0a80-4918-9680-c47e955f4536","block_type":"box","text":"targets, actions or resources for its transition towards a lower-carbon economy, including actions","page_number":252,"box":{"x":150,"y":403,"width":722,"height":12}},{"id":"9e9e80a9-ea46-42b4-adea-e4bc380d3288","block_type":"box","text":"such as reducing its greenhouse gas emissions” (see Appendix 1).","page_number":252,"box":{"x":150,"y":418,"width":494,"height":12}},{"id":"925508d1-6ad4-499a-9858-70f2642d0e9c","block_type":"box","text":"19","page_number":252,"box":{"x":646,"y":419,"width":11,"height":6}},{"id":"02990e49-4a9c-44d0-a31c-8f34631b8d83","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a","page_number":252,"box":{"x":150,"y":441,"width":685,"height":12}},{"id":"344b0b92-69d3-469a-96c5-1b48db4bc314","block_type":"box","text":"market to corporate transition plans.","page_number":252,"box":{"x":150,"y":457,"width":267,"height":12}},{"id":"6c4cf4a2-ca5b-47fc-914f-ca0a4607ad5c","block_type":"box","text":"20","page_number":252,"box":{"x":418,"y":457,"width":12,"height":6}},{"id":"af0402a1-2de9-46e3-8eac-4f8807b2724e","block_type":"box","text":"Recent guidance from the ISSB on disclosures about","page_number":252,"box":{"x":430,"y":457,"width":404,"height":12}},{"id":"fb571479-3495-452d-8aca-e5260301678c","block_type":"box","text":"transition plans highlights the convergence of reporting approaches.","page_number":252,"box":{"x":150,"y":472,"width":509,"height":12}},{"id":"921c8c98-49ab-4e63-bd6a-c2d3759c403f","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these","page_number":252,"box":{"x":150,"y":495,"width":697,"height":12}},{"id":"8d108de5-280e-475c-8aa6-28cc5d31d36d","block_type":"box","text":"disclosures typically provide valuable insights that inform the dedicated team’s approach to","page_number":252,"box":{"x":150,"y":511,"width":679,"height":12}},{"id":"9df48634-838f-4731-978e-22428d8197da","block_type":"box","text":"engaging and voting on matters related to climate and transition risks on behalf of in-scope funds","page_number":252,"box":{"x":150,"y":526,"width":725,"height":12}},{"id":"9ca5072e-fe2b-4ac2-a6fb-f610055463f9","block_type":"box","text":"and accounts.","page_number":252,"box":{"x":150,"y":542,"width":109,"height":9}},{"id":"23d90298-3df6-41bd-9cda-cbcbbe393ee8","block_type":"box","text":"Boards and directors","page_number":252,"box":{"x":116,"y":572,"width":174,"height":9}},{"id":"8bda829f-f0b7-485c-8d61-7950d2a62f7a","block_type":"box","text":"An effective and well-functioning board that has appropriate governance structures to facilitate","page_number":252,"box":{"x":116,"y":602,"width":704,"height":12}},{"id":"0d099467-370b-4941-8fe9-16cbf2e292ec","block_type":"box","text":"oversight of a company’s management and strategic initiatives is critical to the company’s ability to","page_number":252,"box":{"x":116,"y":618,"width":736,"height":12}},{"id":"2dc0165d-3308-47d9-a47b-20b85cf9da71","block_type":"box","text":"deliver on its low-carbon transition strategy. In assessing the role and effectiveness of the board in this","page_number":252,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"72cf4491-07fb-4e18-992f-ffebbb78a34b","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":"7678aca3-4f7e-4527-842c-0a8bfa25d969","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":"b6bb2803-2796-4ad1-a4af-85f789dd7c54","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":"44853e2d-80c7-47a5-a705-622cc9b64156","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":"708dbe8b-0bf4-4889-8269-57119e441dea","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":"68c41a37-4645-4c18-b649-556226ee1958","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":"cae66901-67f6-4e7a-8e17-e56471929b08","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":"2990e24f-6205-4f69-8ccd-010cac71786d","block_type":"box","text":"19","page_number":252,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"bc23a3e0-5980-4678-a9f1-be2f28de78ca","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":"6a6e5c69-eb0c-4597-97e4-4212f7cb69fd","block_type":"box","text":"2025.","page_number":252,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"830a8bf8-83df-4ab4-b680-764da44aca56","block_type":"box","text":"20","page_number":252,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"23817960-5138-4419-9756-01792d96478b","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":"98572090-19db-49b3-a02e-21464f418cdf","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":"ec511797-7e99-4d54-992b-823fe3fca8a2","block_type":"box","text":"International Transition Plan Network for information). BlackRock views transition plans as a method for a company to","page_number":252,"box":{"x":171,"y":841,"width":697,"height":9}},{"id":"80644497-50a3-45e6-b456-1a08f082af93","block_type":"box","text":"both internally assess and externally communicate its long-term strategy, ambition, objectives, and actions to create","page_number":252,"box":{"x":170,"y":854,"width":687,"height":9}},{"id":"609b1561-1da9-4e10-a188-a26936e2145c","block_type":"box","text":"financial value through the global transition towards a low-carbon economy. Across the landscape there remains","page_number":252,"box":{"x":170,"y":866,"width":666,"height":10}},{"id":"fd9a27cb-6255-488b-b0ba-1bf8e59a01f7","block_type":"box","text":"divergence on the objectives of such plans and the details they should contain. 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Given forthcoming regulatory requirements in certain jurisdictions,","page_number":253,"box":{"x":184,"y":299,"width":684,"height":12}},{"id":"3c8c5e7e-91ee-4cbb-a1aa-f4f7908ed120","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":"d3b7796c-5112-4550-afd2-1d052ed07ff9","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":"509e14e9-e994-486c-bb21-2cf02c008f4b","block_type":"box","text":"value chain.","page_number":253,"box":{"x":183,"y":346,"width":94,"height":9}},{"id":"a2d395db-7f14-41e7-95b1-1a175501c044","block_type":"box","text":"21","page_number":253,"box":{"x":278,"y":346,"width":10,"height":6}},{"id":"87a81445-b6bb-477b-b162-a49aca80cd17","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":"0d1b53b3-43dc-46e6-9679-b05b66a8a891","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":"0bbe7726-0bca-47b6-93a4-dd644e0ee8d8","block_type":"box","text":"relevant.","page_number":253,"box":{"x":184,"y":399,"width":62,"height":9}},{"id":"2c9f162f-2eda-43b3-ac8d-8613a6176b22","block_type":"box","text":"22","page_number":253,"box":{"x":248,"y":399,"width":11,"height":6}},{"id":"7b21c0e3-0fd4-4d8a-a368-4e4fc278e4d1","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":"05a4b1b7-047c-4c26-850c-ad7a2741418a","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":"36dd063f-c19a-42bb-9b08-13dd27c1513a","block_type":"box","text":"transition.","page_number":253,"box":{"x":183,"y":430,"width":78,"height":9}},{"id":"1a01fdb3-7652-4d25-8111-734250ff734e","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":"5fafe5d5-dcf5-4482-a387-5cf10ff20d11","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":"f7c1741f-919e-4711-a6c4-e02058391944","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":"ce7cd083-44e0-48fb-ac96-e2b41c3f79b8","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":"ded8980b-7f91-4c3f-aff3-9b0bc5d78b81","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":"e324f85e-d2bd-4627-8ee8-ae5c72504ef1","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":"880ba328-ce18-4d04-a5ee-3e85a9cb08fd","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":"132619e3-a627-4a9b-8e50-a9f9bdfde037","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":"d9a21453-a79b-44b9-939f-3f12fd4769c5","block_type":"box","text":"lead independent director or the non-executive chair of the board. 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The research uses a definition of materiality from the GHG Protocol,","page_number":253,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"14e33715-5aa3-4180-b366-cccd27489ca3","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":"c1c786c0-a459-4fca-920b-94d266b5e6fb","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":"c626f053-79e8-4881-8b8f-c262a4c5423e","block_type":"box","text":"accessed in December 2025.","page_number":253,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"2827c719-a63f-4a89-b0cc-4c5657fb9103","block_type":"box","text":"22","page_number":253,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"6f94d5aa-dab5-41e9-b030-63a664163fb9","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":"081632fb-59bf-4a32-9191-6bddc0e77fc9","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":253,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"2bbc6183-c1da-4965-a375-6163baa77024","block_type":"box","text":"23","page_number":253,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"b78e5c8e-f4d5-403d-a931-936827d29e42","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":"9fedbf0a-4204-4721-a20d-25b936d8aa61","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":"84531231-9d06-4480-906a-02bdaef1e12d","block_type":"box","text":"24","page_number":253,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"f0c54d7f-8ecd-4a0b-ad8e-00f58584b0e7","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":"6b82ed1a-60c9-4ee3-9303-4eda39049925","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":"3a81060a-2b4a-4e3a-a525-2731df974d77","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":"4470428c-b511-42f2-8ea6-1154bb66c7af","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":"3aefa9e6-3970-4510-8d0f-b12048379124","block_type":"box","text":"BlackRock Investment Stewardship","page_number":253,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"45371bf4-84ab-461b-b7ab-cac3ae2c5219","block_type":"box","text":"Climate and Decarbonization St","page_number":253,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"7d92512f-631f-4f5e-89d3-644afa2ac307","block_type":"box","text":"ewardship Guidelines |","page_number":253,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"29a1c552-962e-4176-9546-89bedf9bf878","block_type":"box","text":"8","page_number":253,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"ee671fa1-6c2c-40ca-acc0-4b26281be857","block_type":"box","text":"NM1026U-6049097-253/259","page_number":253,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"40399050-2de8-4ce0-8137-f3372d44edd3","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":"f1136328-7add-41cc-9fc3-8eb62099ff23","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":"ee534324-ddfb-4dd6-b573-271617d55732","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":"08529311-342b-4ad7-9e9f-bc462c45af87","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":"5dfa0810-0c1c-48db-87f8-94768d977e72","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":"6f6c3a8a-80be-4c7c-85a5-e0a09fe6c2f3","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":"2fdb4fc6-985d-43e9-9e27-5ab573939644","block_type":"box","text":"assessment based on these Guidelines, the strategy is aligned with the low-carbon transition. Similarly,","page_number":254,"box":{"x":116,"y":198,"width":772,"height":12}},{"id":"93a09f8a-c4e4-471d-a168-81f652d084a5","block_type":"box","text":"the dedicated team generally supports management’s proposal on a progress report if the company","page_number":254,"box":{"x":116,"y":213,"width":745,"height":12}},{"id":"255b3a2e-a013-4e35-8110-c318231ae6c7","block_type":"box","text":"has clearly explained its progress against, and any deviations from or changes to, its stated low-carbon","page_number":254,"box":{"x":117,"y":229,"width":770,"height":12}},{"id":"61a28156-4b13-4e13-a57a-0982643b6171","block_type":"box","text":"transition plan and targets.","page_number":254,"box":{"x":116,"y":245,"width":203,"height":11}},{"id":"5bdf3e07-8bf8-4940-9a35-c5774619bc54","block_type":"box","text":"Shareholder proposals on climate and low-carbon transition matters","page_number":254,"box":{"x":117,"y":278,"width":551,"height":12}},{"id":"4ee761cf-e735-41a9-b906-d0287d86f71a","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":254,"box":{"x":117,"y":311,"width":717,"height":12}},{"id":"f6b94b0d-b0d7-46f8-aad2-276bdb64277f","block_type":"box","text":"meeting, as long as certain requirements are met. 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When the dedicated team votes in support of a","page_number":254,"box":{"x":116,"y":391,"width":748,"height":12}},{"id":"4fcdeffa-0ad8-4857-a23c-66d663868644","block_type":"box","text":"proposal, it is not necessarily endorsing every element of the proposal or the reasoning, objectives, or","page_number":254,"box":{"x":117,"y":406,"width":759,"height":12}},{"id":"476c728a-4c56-4d94-bfc3-37d84128a04a","block_type":"box","text":"supporting statement of the proponent.","page_number":254,"box":{"x":116,"y":422,"width":294,"height":12}},{"id":"618ce7d3-41b2-4f08-a4b7-3119c0774d4e","block_type":"box","text":"In addition to financial materiality, the Guidelines consider the proposal’s relevance to the company’s","page_number":254,"box":{"x":117,"y":455,"width":752,"height":12}},{"id":"3ed499cd-07ab-4524-a385-0d20d17a2e86","block_type":"box","text":"low-carbon transition strategy and targets. 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Some companies, in light of their long-term","page_number":255,"box":{"x":117,"y":134,"width":703,"height":12}},{"id":"4644d362-df7f-4d11-a217-349f89f18586","block_type":"box","text":"strategy, may decide to include relevant GHG emissions reduction targets or low-carbon transition","page_number":255,"box":{"x":116,"y":149,"width":734,"height":12}},{"id":"ba2b6ef5-cf71-4673-ab25-c3ed236e9380","block_type":"box","text":"related metrics in their incentive plans. In such cases, the dedicated team would engage to understand","page_number":255,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"1f6e1f16-6189-4d00-90c1-45f088c93538","block_type":"box","text":"the alignment between those metrics and the company’s stated climate strategy. 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The team notes that assurance of","page_number":255,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"9ed5de1e-70bc-4359-9596-9ebb1c6e3c69","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":"bfcd0cfd-37ce-4c10-b3d0-79fef3bf27d0","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":"1e85c245-6d66-433a-9788-34aa6a98b21e","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":"940bac0b-b277-4838-91cc-ea886bcef5f2","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":"ccba46de-8ff5-4c77-b052-847cc5159d03","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":"f63a30e2-6480-4eb6-8aae-044b39aa4e6f","block_type":"box","text":"that may impact its climate strategy. The dedicated team does not promote changes in corporate","page_number":255,"box":{"x":116,"y":444,"width":723,"height":12}},{"id":"b2d5c70a-2ff9-458a-96f5-e983ce2c2b95","block_type":"box","text":"control or engage in shareholder activism.","page_number":255,"box":{"x":116,"y":459,"width":317,"height":12}},{"id":"6fe20827-5a98-45ed-a077-6a00614c492f","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":255,"box":{"x":117,"y":490,"width":559,"height":12}},{"id":"42f68107-578f-4af0-8572-c5df8aa85297","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other","page_number":255,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"6616188d-3b1b-47b0-928c-fae3a9f9ae3b","block_type":"box","text":"material sustainability-related risks and opportunities that may be relevant to a company’s business","page_number":255,"box":{"x":117,"y":537,"width":741,"height":12}},{"id":"80c4653b-e051-49f2-b236-0601a30da859","block_type":"box","text":"model and long-term financial performance. These include a company’s impacts or dependencies on","page_number":255,"box":{"x":117,"y":552,"width":752,"height":12}},{"id":"2be28115-b89a-4b99-a887-d70157bc041d","block_type":"box","text":"natural capital and key stakeholders.","page_number":255,"box":{"x":117,"y":568,"width":270,"height":12}},{"id":"58aca9e4-51a1-4127-8595-8cbc81f9f5c9","block_type":"box","text":"26","page_number":255,"box":{"x":389,"y":568,"width":12,"height":6}},{"id":"f1c57c04-7238-4bb5-9445-d46625b8e11f","block_type":"box","text":"In the context of these Guidelines, the dedicated team may","page_number":255,"box":{"x":401,"y":568,"width":448,"height":12}},{"id":"185e7860-7cc0-4ebb-9e03-89ccacb74d7a","block_type":"box","text":"engage companies to better understand how they are managing the impact on people (e.g.,","page_number":255,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"ea0a743a-1eb9-4f57-a25c-26130c4505cd","block_type":"box","text":"employees, suppliers, customers and communities) of any strategic or operational changes they are","page_number":255,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"3fb1d750-16b7-4e25-b593-6edc5f7e4f84","block_type":"box","text":"making in relation to their transition to a low-carbon economy. Similarly, the team may engage","page_number":255,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"4845dc1a-d9c7-4ec1-9c24-4288343068da","block_type":"box","text":"companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":255,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"4d6016e7-e27e-4b7f-9eee-28e814050c14","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":255,"box":{"x":116,"y":645,"width":722,"height":12}},{"id":"f317ca3b-6209-4f14-b43a-ff96614e3084","block_type":"box","text":"26","page_number":255,"box":{"x":143,"y":867,"width":9,"height":5}},{"id":"2b3fd28c-3428-44b4-a7a5-cb887aa421d8","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":255,"box":{"x":171,"y":867,"width":669,"height":9}},{"id":"f2898f7a-456c-4cae-b320-f5c874d17834","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":255,"box":{"x":170,"y":880,"width":387,"height":9}},{"id":"54a12e28-f7c8-4005-a7a0-ffd751a65d80","block_type":"box","text":"BlackRock Investment Stewardship","page_number":255,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"395387ca-8906-4e01-a487-1c4db95ae43e","block_type":"box","text":"Climate and Decarbonization St","page_number":255,"box":{"x":496,"y":909,"width":212,"height":9}},{"id":"826b7975-192b-4aaa-88b0-1425580ac19a","block_type":"box","text":"ewardship Guidelines |","page_number":255,"box":{"x":709,"y":909,"width":152,"height":12}},{"id":"2ab6a6b1-cec2-4539-8158-84df5eff850b","block_type":"box","text":"10","page_number":255,"box":{"x":867,"y":909,"width":16,"height":9}},{"id":"bcb3d993-4503-4a60-8dda-b83f4bb70193","block_type":"box","text":"NM1026U-6049097-255/259","page_number":255,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a6c57ea3-87ad-4fb6-87eb-3ffd623c3616","block_type":"box","text":"Appendix 1","page_number":256,"box":{"x":116,"y":87,"width":95,"height":12}},{"id":"58daa459-58a9-40d5-b0b0-ea42d9e08b3f","block_type":"box","text":"Terminology","page_number":256,"box":{"x":449,"y":117,"width":106,"height":12}},{"id":"9080d383-5e2b-4b03-a5c9-60bd413c92c9","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":256,"box":{"x":116,"y":147,"width":593,"height":12}},{"id":"f5b78a9a-b1e0-46d3-bb58-6e2ad9e63be8","block_type":"box","text":"Climate risk","page_number":256,"box":{"x":116,"y":170,"width":95,"height":10}},{"id":"2863edf3-5fda-4859-83b3-853194e81407","block_type":"box","text":": Includes physical risk, the increased risk to companies’ assets and activities caused by","page_number":256,"box":{"x":213,"y":170,"width":658,"height":12}},{"id":"26643cb8-3ad2-470a-b2d8-8ea00d84b300","block_type":"box","text":"the direct impact of changing weather patterns and natural catastrophes, and transition risk, the impact","page_number":256,"box":{"x":116,"y":186,"width":768,"height":12}},{"id":"41b5bf70-d20b-43d7-9079-5ceed789aa71","block_type":"box","text":"of the transition to a low-carbon economy on a company’s long-term profitability.","page_number":256,"box":{"x":116,"y":201,"width":601,"height":12}},{"id":"955602cc-eaa2-43e8-81c8-517d076b6b77","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”)","page_number":256,"box":{"x":116,"y":224,"width":492,"height":12}},{"id":"4f97d86f-44ec-432a-8639-2792c59f3aad","block_type":"box","text":": The global economic shift toward","page_number":256,"box":{"x":610,"y":224,"width":259,"height":12}},{"id":"38817734-833c-40dc-ac93-307d637b768e","block_type":"box","text":"lower emissions across many sectors and business models. The economic transformation is being","page_number":256,"box":{"x":117,"y":239,"width":735,"height":13}},{"id":"f04730d4-eccf-4d59-83d7-713176a2642b","block_type":"box","text":"driven by changes in government policy, technology, and consumer and investor preferences, as well","page_number":256,"box":{"x":116,"y":255,"width":758,"height":12}},{"id":"aafaf59f-d873-49c9-9433-e8fa5a15697b","block_type":"box","text":"as the physical effects of climate change (e.g., extreme weather), and can potentially have a material","page_number":256,"box":{"x":116,"y":270,"width":755,"height":13}},{"id":"ec49e820-0157-400c-8a00-2429a681ef1c","block_type":"box","text":"impact on clients’ investments and portfolios.","page_number":256,"box":{"x":117,"y":286,"width":337,"height":12}},{"id":"e5f63d8c-520a-43ed-9ebe-d86b67361b88","block_type":"box","text":"Decarbonization","page_number":256,"box":{"x":117,"y":309,"width":128,"height":9}},{"id":"eb641b1b-554e-40c1-b447-f4d6f65a6dff","block_type":"box","text":": the process of reducing or eliminating emissions of carbon dioxide (CO","page_number":256,"box":{"x":248,"y":309,"width":535,"height":12}},{"id":"22456493-e58d-45df-a898-016794a64308","block_type":"box","text":"2","page_number":256,"box":{"x":784,"y":315,"width":5,"height":6}},{"id":"e4ed6b80-f48c-4233-b605-d4a0b9e12a2a","block_type":"box","text":") from","page_number":256,"box":{"x":790,"y":309,"width":48,"height":12}},{"id":"edc0cfaa-57f7-4acd-8075-89bd7b2cab6d","block_type":"box","text":"human activity and removing carbon currently in the atmosphere. This can be carried out by countries,","page_number":256,"box":{"x":117,"y":324,"width":763,"height":12}},{"id":"1519afe0-da4a-4958-ad6c-b339c9df058d","block_type":"box","text":"companies and even individual consumers. 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