{"annotation_id":"7ad233a4-8dd6-476c-91ba-ee845ab8a99f","file_hash":"28367ee45eaa0ef79037de1543c75f2ef986575a6efc34379e58bf27bc01bd5d","schema_id":"open/document-extraction","schema_version":"0.5.0","record":{"extraction_type":"boxes","producer":"pdf-extractor-v0.5.0","blocks":[{"id":"51c5877d-e406-4bd6-b255-0cc528dcf64c","block_type":"box","text":"BlackRock ETF Trust","page_number":1,"box":{"x":420,"y":88,"width":164,"height":9}},{"id":"a11a23a8-c863-4937-b011-f4b6f598ff9f","block_type":"box","text":"iShares Managed Futures Active ETF","page_number":1,"box":{"x":372,"y":103,"width":259,"height":12}},{"id":"780bc135-f278-4dce-a7f0-fb1893960e16","block_type":"box","text":"(the “Fund”)","page_number":1,"box":{"x":454,"y":118,"width":96,"height":12}},{"id":"6b921415-05be-46cd-afb2-a89cd4a33a42","block_type":"box","text":"Supplement dated October 16, 2026","page_number":1,"box":{"x":372,"y":148,"width":260,"height":11}},{"id":"ee1c1116-18b5-4553-9261-d6af889fcdbb","block_type":"box","text":"to the Prospectus and Statement of Additional Information (“SAI”)","page_number":1,"box":{"x":258,"y":163,"width":488,"height":12}},{"id":"900b4901-c6c8-4780-ab95-c2f42978cbb7","block_type":"box","text":"of the Fund dated February 27, 2026, as amended from time to time","page_number":1,"box":{"x":257,"y":179,"width":490,"height":11}},{"id":"4c23699b-2884-41af-af51-3af9bdd7ad6a","block_type":"box","text":"Effective November 16, 2026, the Fund’s Prospectus is amended as follows:","page_number":1,"box":{"x":116,"y":208,"width":543,"height":12}},{"id":"6122fec0-ff37-48ea-abff-f47e4b0d27a2","block_type":"box","text":"The eleventh paragraph of the section entitled “Management — Conflicts of Interest” is deleted in its","page_number":1,"box":{"x":116,"y":237,"width":729,"height":12}},{"id":"262797fd-9c52-4e77-88ee-a241238c8c6c","block_type":"box","text":"entirety and replaced with the following","page_number":1,"box":{"x":116,"y":253,"width":291,"height":11}},{"id":"7e532d87-3dfd-452c-8aba-8b919083317a","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BlackRock Investments, LLC (the “Distributor” or","page_number":1,"box":{"x":116,"y":282,"width":741,"height":12}},{"id":"57b1b472-24e1-4afc-bfba-86a84c67638e","block_type":"box","text":"“BRIL”), an Affiliate of BFA, to perform certain order processing, Authorized Participant communications, and","page_number":1,"box":{"x":116,"y":298,"width":760,"height":11}},{"id":"ae26d2cd-4651-4303-bb8f-8cd6a70b9cf3","block_type":"box","text":"related services in connection with the issuance and redemption of Creation Units (“ETF Services”). BRIL has","page_number":1,"box":{"x":116,"y":313,"width":750,"height":12}},{"id":"94a52c82-b593-4f7a-bc0f-543012b99182","block_type":"box","text":"engaged Citibank, N.A. (“Citibank”) as a subcontractor to provide certain ETF Services. BRIL retains a portion","page_number":1,"box":{"x":116,"y":329,"width":757,"height":11}},{"id":"9a9a130d-c1fd-41af-8906-d0904a9dc56d","block_type":"box","text":"of the standard transaction fee received from Authorized Participants on each creation or redemption order from","page_number":1,"box":{"x":116,"y":344,"width":760,"height":12}},{"id":"116af552-fc73-4344-861e-f44282c05a07","block_type":"box","text":"the Authorized Participant for the ETF Services provided. BlackRock collaborated with, and received payment","page_number":1,"box":{"x":116,"y":360,"width":752,"height":11}},{"id":"bd8090c2-6845-4483-960f-0bb9ebc5790f","block_type":"box","text":"from, Citibank on the design and development of the ETF Services platform. Citibank has, and may, from time to","page_number":1,"box":{"x":116,"y":375,"width":770,"height":12}},{"id":"42bca490-3bb0-4727-9574-6d98c14e8956","block_type":"box","text":"time, develop additional relationships with BlackRock or funds managed by BFA and its Affiliates.","page_number":1,"box":{"x":116,"y":391,"width":675,"height":11}},{"id":"df0e967c-aeef-47ca-bea6-e0f219f7c2af","block_type":"box","text":"Effective November 16, 2026, the Fund’s SAI is amended as follows:","page_number":1,"box":{"x":116,"y":420,"width":492,"height":11}},{"id":"e4925c6b-7a3a-4739-b11f-296217625c42","block_type":"box","text":"The fifty-third paragraph of the section entitled “Management — Conflicts of Interest” in the Fund’s SAI","page_number":1,"box":{"x":116,"y":449,"width":763,"height":12}},{"id":"ce989ad9-ab93-4b70-8d94-bb508ac64642","block_type":"box","text":"is deleted in its entirety and replaced with the following:","page_number":1,"box":{"x":116,"y":465,"width":407,"height":11}},{"id":"8ebb39c9-9929-4b6b-85e1-58cac6bfd3f0","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain order","page_number":1,"box":{"x":116,"y":494,"width":743,"height":12}},{"id":"5b9fef44-ccdf-4718-99d7-dd40bed9ee6d","block_type":"box","text":"processing, Authorized Participant communications, and related services in connection with the issuance and","page_number":1,"box":{"x":116,"y":509,"width":739,"height":12}},{"id":"169961bd-b6e1-4d2e-9e47-8e193bff9cd0","block_type":"box","text":"redemption of Creation Units (“ETF Services”). BRIL has engaged Citibank, N.A. (“Citibank”) as a","page_number":1,"box":{"x":116,"y":525,"width":679,"height":12}},{"id":"0ff4de30-be25-413e-b44f-5462ad145f12","block_type":"box","text":"subcontractor to provide certain ETF Services. BRIL retains a portion of the standard transaction fee received","page_number":1,"box":{"x":117,"y":540,"width":743,"height":12}},{"id":"b0a841c3-aa21-48bc-ad2b-5d8c22b53ab2","block_type":"box","text":"from Authorized Participants on each creation or redemption order from the Authorized Participant for the ETF","page_number":1,"box":{"x":116,"y":556,"width":757,"height":12}},{"id":"b94107db-9786-4c87-bd2b-71b14e325c40","block_type":"box","text":"Services provided. BlackRock collaborated with, and received payment from, Citibank on the design and","page_number":1,"box":{"x":116,"y":571,"width":713,"height":12}},{"id":"1533d98a-bf7f-4b5b-b071-fe349a906c6b","block_type":"box","text":"development of the ETF Services platform. Citibank has, and may, from time to time, develop additional","page_number":1,"box":{"x":116,"y":587,"width":712,"height":12}},{"id":"3328670a-2ba8-43f8-9542-26cb32a26ff9","block_type":"box","text":"relationships with BlackRock or funds managed by BFA and its affiliates.","page_number":1,"box":{"x":116,"y":602,"width":502,"height":12}},{"id":"93816897-ab42-421a-9f7b-96ff8fee79c2","block_type":"box","text":"The section entitled “Investment Advisory, Administrative and Distribution Services — Administrator,","page_number":1,"box":{"x":116,"y":632,"width":744,"height":11}},{"id":"c1bee615-ed46-4454-8ee2-b9bc9801478e","block_type":"box","text":"Custodian and Transfer Agent” in the Fund’s SAI is deleted in its entirety and replaced with the","page_number":1,"box":{"x":116,"y":647,"width":696,"height":12}},{"id":"53dd73ce-cb27-4c29-8c71-4d8f9eaf59c1","block_type":"box","text":"following:","page_number":1,"box":{"x":116,"y":663,"width":70,"height":11}},{"id":"5396d70f-adaa-48ff-8a5a-b15071ddaca0","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":1,"box":{"x":116,"y":692,"width":336,"height":12}},{"id":"fe6e5e22-9f38-4a65-998b-81bd19bdc1c2","block_type":"box","text":"State Street Bank and Trust Company (“State Street”) serves","page_number":1,"box":{"x":457,"y":692,"width":408,"height":12}},{"id":"f61e21e9-f8f1-441d-b350-fb19af725658","block_type":"box","text":"as administrator, custodian and transfer agent for the Fund under the Master Services Agreement and related","page_number":1,"box":{"x":116,"y":708,"width":731,"height":11}},{"id":"c3383b95-987b-42ce-b14d-50579730b181","block_type":"box","text":"Service Schedule (the “Service Module”). State Street’s principal address is One Congress Street, Suite 1,","page_number":1,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"3a022977-3e0a-478f-bf03-76b8032edb05","block_type":"box","text":"Boston, MA 02114. Pursuant to the Service Module for Fund Administration and Accounting Services with the","page_number":1,"box":{"x":116,"y":739,"width":751,"height":11}},{"id":"7ef7dfe8-7681-4a8e-9ba2-b07492d2663d","block_type":"box","text":"Trust, State Street provides necessary administrative, legal, tax and accounting and financial reporting services","page_number":1,"box":{"x":116,"y":754,"width":747,"height":12}},{"id":"55c2fb97-cee0-457e-972b-eb59064646a8","block_type":"box","text":"for the maintenance and operations of the Trust and the Fund. In addition, State Street makes available the office","page_number":1,"box":{"x":116,"y":770,"width":760,"height":11}},{"id":"6c758999-a48b-48bd-85a7-1bb759f54380","block_type":"box","text":"space, equipment, personnel and facilities required to provide such services. Pursuant to the Service Module for","page_number":1,"box":{"x":117,"y":785,"width":753,"height":12}},{"id":"327120cb-bd3a-481b-b83f-6f60a1cc78e1","block_type":"box","text":"Custodial Services with the Trust, State Street maintains, in separate accounts, cash, securities and other assets of","page_number":1,"box":{"x":116,"y":801,"width":765,"height":11}},{"id":"9c3381b8-8f17-4554-88c6-e3f366b8258a","block_type":"box","text":"the Trust and the Fund, keeps all necessary accounts and records and provides other services. State Street is","page_number":1,"box":{"x":116,"y":816,"width":724,"height":12}},{"id":"248e1e99-9879-4e06-a6cc-c34e03132b7f","block_type":"box","text":"required, upon the order of the Trust, to deliver securities held by State Street and to make payments for","page_number":1,"box":{"x":116,"y":832,"width":706,"height":11}},{"id":"33500fe3-2e70-4b16-a855-ebd187381773","block_type":"box","text":"securities purchased by the Trust for the Fund. State Street is authorized to appoint certain foreign custodians or","page_number":1,"box":{"x":117,"y":847,"width":758,"height":12}},{"id":"f543ddb9-237a-4a11-8137-2d59b1bc06c0","block_type":"box","text":"foreign custody managers for Fund investments outside the U.S. Pursuant to the Service Module for Transfer","page_number":1,"box":{"x":116,"y":863,"width":740,"height":11}},{"id":"4367b44b-1cc9-4977-8d74-367e2a0fbc45","block_type":"box","text":"Agency Services with the Trust, State Street acts as a transfer agent for the Fund’s authorized and issued shares","page_number":1,"box":{"x":116,"y":878,"width":756,"height":12}},{"id":"33ca1e91-1f0b-46b4-a1b5-6946ee7c2bf4","block_type":"box","text":"of beneficial interest, and as dividend disbursing agent of the Trust. As compensation for these services, State","page_number":1,"box":{"x":116,"y":894,"width":744,"height":11}},{"id":"811a8d76-3965-4e09-b33d-68776c655e12","block_type":"box","text":"Street receives certain out-of-pocket costs, transaction fees and asset-based fees which are accrued daily and paid","page_number":1,"box":{"x":116,"y":909,"width":764,"height":12}},{"id":"a47ba620-f95a-44f3-8905-af2b3c52c7b0","block_type":"box","text":"NM1026U-6030748-1/260","page_number":1,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"64ce3a0f-795b-4d63-a644-c2fa02aeaade","block_type":"box","text":"monthly by BFA. BFA pays the compensation because it has agreed to pay these operating expenses under the","page_number":2,"box":{"x":116,"y":88,"width":749,"height":11}},{"id":"df04995d-3a98-421d-9571-84a5dab6f322","block_type":"box","text":"Investment Advisory Agreement as described therein.","page_number":2,"box":{"x":116,"y":103,"width":367,"height":12}},{"id":"9b0feb0a-0ea3-4407-b680-b1f6c884e6cb","block_type":"box","text":"The section entitled “Creation and Redemption of Creation Units — Costs Associated with Creation","page_number":2,"box":{"x":116,"y":130,"width":722,"height":11}},{"id":"4ea1f321-b357-4f28-aefe-afcbb8600998","block_type":"box","text":"Transactions” in the Fund’s SAI is deleted in its entirety and replaced with the following:","page_number":2,"box":{"x":116,"y":145,"width":645,"height":12}},{"id":"518313bc-5132-4133-9b21-ea8f5ee409e9","block_type":"box","text":"Costs Associated with Creation Transactions.","page_number":2,"box":{"x":116,"y":172,"width":330,"height":9}},{"id":"54312729-8364-4a91-b71a-3dae01ffbe7c","block_type":"box","text":"A standard creation transaction fee is imposed to offset the","page_number":2,"box":{"x":446,"y":172,"width":401,"height":11}},{"id":"21a6c48c-bc41-4e54-ac82-d2733b03b048","block_type":"box","text":"transfer and other transaction costs associated with the issuance of Creation Units.","page_number":2,"box":{"x":116,"y":187,"width":559,"height":9}},{"id":"70c6d983-9fe2-45db-b988-df89c4ebd23a","block_type":"box","text":"Under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to perform certain order","page_number":2,"box":{"x":116,"y":214,"width":743,"height":12}},{"id":"167ffea9-03ca-4d65-a995-13e6b58fce5a","block_type":"box","text":"processing, Authorized Participant communications, and related services in connection with the issuance and","page_number":2,"box":{"x":116,"y":229,"width":739,"height":12}},{"id":"2631d42b-dd3a-4ff8-8478-3b965e70e333","block_type":"box","text":"redemption of Creation Units (“ETF Services”). BRIL will receive from an Authorized Participant a standard","page_number":2,"box":{"x":116,"y":245,"width":741,"height":12}},{"id":"3e72b590-b736-4393-ad1b-b0559d683a15","block_type":"box","text":"transaction fee on each creation order, which consists of (1) a fee for providing the ETF Services (the “ETF","page_number":2,"box":{"x":116,"y":260,"width":729,"height":12}},{"id":"a9c817a4-a32d-442c-a8db-282093760967","block_type":"box","text":"Servicing Fee”) and (2) transfer, processing and other transaction costs charged by the Fund custodian in","page_number":2,"box":{"x":116,"y":276,"width":711,"height":12}},{"id":"a8433c89-f595-4ce0-b9c4-0b95cc486d85","block_type":"box","text":"connection with the issuance of Creation Units for such creation order (“Custody Transaction Costs”). BRIL is","page_number":2,"box":{"x":116,"y":291,"width":751,"height":12}},{"id":"29c998dd-e45a-4a5f-8935-dc9ec05ddcf5","block_type":"box","text":"entitled to retain the ETF Servicing Fee pursuant to the ETF Services Agreement, but BRIL will reimburse any","page_number":2,"box":{"x":116,"y":307,"width":753,"height":12}},{"id":"f0f4a3de-0a40-42f6-bd4d-915f965b2a36","block_type":"box","text":"Custody Transaction Costs to the Fund custodian according to the amounts invoiced by such custodian.","page_number":2,"box":{"x":116,"y":322,"width":701,"height":12}},{"id":"eb9e38e3-3e66-4258-9efd-a08a94c11974","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being purchased, which","page_number":2,"box":{"x":116,"y":349,"width":762,"height":12}},{"id":"9413d59e-0804-4c7c-b712-8d2ed0e4f916","block_type":"box","text":"amount will vary among different BlackRock-advised funds based on a number of factors, including the","page_number":2,"box":{"x":116,"y":365,"width":706,"height":11}},{"id":"138bdd0b-faeb-4a5a-9c1a-e2763f69244a","block_type":"box","text":"complexity of the order and the types of securities or instruments included in a fund’s Creation Basket, among","page_number":2,"box":{"x":116,"y":380,"width":749,"height":12}},{"id":"c51c19ca-024e-474d-83bf-9dcf3d4ee5b9","block_type":"box","text":"other variables. The ETF Servicing Fee may be equal to zero in certain instances, such as for creation","page_number":2,"box":{"x":116,"y":396,"width":688,"height":11}},{"id":"b7f81597-2f8a-4d14-b784-dc8970470ae8","block_type":"box","text":"transactions that consist solely of cash. The actual Custody Transaction Costs vary per order based on the number","page_number":2,"box":{"x":116,"y":411,"width":771,"height":12}},{"id":"6d64725c-09ea-4230-a7b9-0ae15d1f8987","block_type":"box","text":"of trades, underlying markets and settlement locations associated with the issuance of a Creation Unit. The","page_number":2,"box":{"x":116,"y":427,"width":724,"height":11}},{"id":"da69a841-cbc3-4618-bebf-3c71c787e69a","block_type":"box","text":"following table sets forth for the Fund an estimate of the creation transaction fee that would have been charged as","page_number":2,"box":{"x":116,"y":442,"width":770,"height":12}},{"id":"e2f935fe-bb9f-4ec9-957b-cec88cd67135","block_type":"box","text":"of September 30, 2026 if the Fund had issued a Creation Unit on that date. The actual fee that would have been","page_number":2,"box":{"x":116,"y":458,"width":753,"height":11}},{"id":"bf54ce99-6783-4f2a-ad1f-d50c1fd009ca","block_type":"box","text":"charged to an Authorized Participant in connection with a creation order will vary over time depending on the","page_number":2,"box":{"x":116,"y":473,"width":745,"height":12}},{"id":"8bd93676-dc88-4433-a03e-66b6ce3f4226","block_type":"box","text":"factors discussed above, and may be higher than the fee set forth below.","page_number":2,"box":{"x":116,"y":489,"width":489,"height":11}},{"id":"70b4f0f4-5064-4e33-b806-699f07f8ea83","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution, if a","page_number":2,"box":{"x":116,"y":515,"width":715,"height":12}},{"id":"4544f3f5-df37-4b10-9324-b728d3df2473","block_type":"box","text":"creation transaction consists solely or partially of cash, the Authorized Participant may also be required to cover","page_number":2,"box":{"x":116,"y":531,"width":761,"height":11}},{"id":"1d40bcf0-e0c5-4669-9692-8b7b2da41412","block_type":"box","text":"(up to the maximum amount shown below) certain brokerage, tax, foreign exchange, execution and other costs","page_number":2,"box":{"x":116,"y":546,"width":750,"height":12}},{"id":"68b472d3-ea4f-4bed-8383-d2d35699ad06","block_type":"box","text":"and expenses related to the execution of trades resulting from such transaction (which may, in certain instances,","page_number":2,"box":{"x":116,"y":562,"width":758,"height":11}},{"id":"1cab1bd1-25fa-48a4-82e8-539a2b91e20a","block_type":"box","text":"be based on a good faith estimate of transaction costs based on historical data or other inputs, at BlackRock’s","page_number":2,"box":{"x":116,"y":577,"width":741,"height":12}},{"id":"87a1536b-9ee1-4b83-a669-ea52e0d64905","block_type":"box","text":"discretion, and may include part or all of the spread between the expected bid and offer side of the market and","page_number":2,"box":{"x":116,"y":593,"width":746,"height":11}},{"id":"1051e1fd-a71c-4fd7-9bf4-2a30ce6b9b82","block_type":"box","text":"anticipated market impact). However, the Fund is not obligated to trade identical securities to the securities","page_number":2,"box":{"x":116,"y":608,"width":727,"height":12}},{"id":"dff92df4-602c-4e48-9342-114eab872729","block_type":"box","text":"identified by BlackRock in estimating these transaction and other costs and expenses. In certain cases,","page_number":2,"box":{"x":116,"y":624,"width":693,"height":11}},{"id":"416d91f6-e12b-4e72-a4f2-0164b0ca527f","block_type":"box","text":"BlackRock or an affiliate may determine in its discretion to deviate from the regular charge, subject to the","page_number":2,"box":{"x":116,"y":639,"width":719,"height":12}},{"id":"add4231d-1306-44b7-81b0-3c348b23b191","block_type":"box","text":"maximum amounts shown below.","page_number":2,"box":{"x":116,"y":655,"width":231,"height":9}},{"id":"5ce7d8d1-141f-43f5-a747-28a7c67183f1","block_type":"box","text":"Authorized Participants will also bear the costs of tra","page_number":2,"box":{"x":116,"y":681,"width":348,"height":12}},{"id":"fdeb20ca-41f9-4c47-8a60-714dff902e83","block_type":"box","text":"nsferring the Deposit Securities to the Fund. Certain fees/costs","page_number":2,"box":{"x":465,"y":681,"width":410,"height":12}},{"id":"c3551428-d8a9-4312-9c6e-7663e9c5cb62","block_type":"box","text":"associated with creation transactions may be waived in certain circumstances. Investors who use the services of a","page_number":2,"box":{"x":116,"y":697,"width":745,"height":12}},{"id":"d459ac67-d2f2-4ce4-8c61-84b6e9e69cc4","block_type":"box","text":"broker or other financial intermediary to acquire Fund shares may be charged a fee for such services.","page_number":2,"box":{"x":116,"y":712,"width":662,"height":12}},{"id":"d5867c80-94c0-4a3b-b055-d331d298fc77","block_type":"box","text":"The following table sets forth the Fund’s estimated creation transaction fee as of September 30, 2026 and","page_number":2,"box":{"x":116,"y":739,"width":710,"height":12}},{"id":"73bd9f5d-ce2b-4859-942f-641e2ec02ad2","block_type":"box","text":"maximum additional charge (as described above):","page_number":2,"box":{"x":116,"y":755,"width":335,"height":11}},{"id":"14fcc64a-c28b-4124-bf03-2540905fd023","block_type":"box","text":"Standard Creation","page_number":2,"box":{"x":337,"y":778,"width":134,"height":10}},{"id":"081af22e-74e8-49e1-8fd0-7b69363ec6e2","block_type":"box","text":"Transaction Fee*","page_number":2,"box":{"x":342,"y":791,"width":123,"height":9}},{"id":"4736191b-9cde-4c65-936f-a0cbac45deee","block_type":"box","text":"Maximum Additional","page_number":2,"box":{"x":526,"y":778,"width":155,"height":10}},{"id":"dddddf4f-fdad-4721-a601-ed0ecac84fea","block_type":"box","text":"Charge**","page_number":2,"box":{"x":570,"y":791,"width":68,"height":12}},{"id":"c10b9d6d-240c-43f4-8cd7-4ca4229a4b51","block_type":"box","text":"$0 7%","page_number":2,"box":{"x":396,"y":812,"width":218,"height":10}},{"id":"350908e9-fde3-4b47-a74a-90c8eb2d890e","block_type":"box","text":"* The standard creation transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The standard creation","page_number":2,"box":{"x":117,"y":839,"width":704,"height":9}},{"id":"a4684ec3-6c52-4ab5-8119-4fe203c2e7be","block_type":"box","text":"transaction","page_number":2,"box":{"x":824,"y":839,"width":59,"height":7}},{"id":"71083a88-9654-402f-b58e-fa62805dfc39","block_type":"box","text":"fee may vary over time depending on the factors discussed above, and may be higher than the fee set forth above. Estimated fee","page_number":2,"box":{"x":143,"y":852,"width":686,"height":9}},{"id":"7a75b869-1f69-4357-8195-25109523c5f1","block_type":"box","text":"as of","page_number":2,"box":{"x":833,"y":852,"width":26,"height":7}},{"id":"e458393e-31c0-4f2c-9211-d64c76bbaa0f","block_type":"box","text":"September 30, 2026.","page_number":2,"box":{"x":143,"y":865,"width":110,"height":9}},{"id":"f326736f-a733-4208-85d5-ed0e1b3c83bd","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":2,"box":{"x":117,"y":880,"width":328,"height":9}},{"id":"ef5086bc-b859-44f7-9149-9aadfcf6c881","block_type":"box","text":"2","page_number":2,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"a2cfec05-3647-49da-8468-d92b62a4edec","block_type":"box","text":"NM1026U-6030748-2/260","page_number":2,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"532f4a9f-b965-44ac-8484-e2aeb9fcb571","block_type":"box","text":"The section entitled “Creation and Redemption of Creation Units — Costs Associated with Redemption","page_number":3,"box":{"x":116,"y":87,"width":747,"height":12}},{"id":"78824978-bfd1-42f9-9d57-c8e233fb6f14","block_type":"box","text":"Transactions” in the Fund’s SAI is deleted in its entirety and replaced with the following:","page_number":3,"box":{"x":116,"y":103,"width":645,"height":12}},{"id":"15790c31-394a-45e9-b6aa-3f9126723d57","block_type":"box","text":"Costs Associated with Redemption Transactions.","page_number":3,"box":{"x":116,"y":132,"width":354,"height":11}},{"id":"c739ed2a-9c02-4506-b4d8-b61d6bd60f43","block_type":"box","text":"A standard redemption transaction fee is imposed to offset","page_number":3,"box":{"x":471,"y":132,"width":398,"height":11}},{"id":"ecc94855-f0a1-42c8-81b9-c506bd8c5050","block_type":"box","text":"transfer and other transaction costs that may be incurred by the Fund.","page_number":3,"box":{"x":116,"y":147,"width":471,"height":12}},{"id":"81276995-f475-4c22-82c6-6ac35a4ab7b6","block_type":"box","text":"As described above, under an ETF Services Agreement, the Fund has retained BRIL, an affiliate of BFA, to","page_number":3,"box":{"x":116,"y":176,"width":731,"height":12}},{"id":"815e0852-6cd4-48b2-9a70-e1b94456344d","block_type":"box","text":"perform certain ETF Services. BRIL will receive from an Authorized Participant a standard transaction fee on","page_number":3,"box":{"x":116,"y":192,"width":746,"height":11}},{"id":"ba7d72f9-d0bd-4a62-afdb-61ebdc12f743","block_type":"box","text":"each redemption order, which consists of (1) the ETF Servicing Fee and (2) Custody Transaction Costs. BRIL is","page_number":3,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"84987550-9920-4770-aed8-e8c9dab4bc29","block_type":"box","text":"entitled to retain the ETF Servicing Fee pursuant to the ETF Services Agreement, but BRIL will reimburse any","page_number":3,"box":{"x":116,"y":223,"width":753,"height":11}},{"id":"bd7fceef-9124-4cc9-a308-05e9f36e91eb","block_type":"box","text":"Custody Transaction Costs to the Fund custodian according to the amounts invoiced by such custodian.","page_number":3,"box":{"x":116,"y":238,"width":701,"height":12}},{"id":"aeeaf536-a35d-42e0-bd8f-4cd39176833a","block_type":"box","text":"The ETF Servicing Fee is a flat fee per order regardless of the number of Creation Units being redeemed, which","page_number":3,"box":{"x":116,"y":267,"width":760,"height":11}},{"id":"34864466-fc3e-4879-aeae-e133e97c8114","block_type":"box","text":"amount will vary among different BlackRock-advised funds based on a number of factors, including the","page_number":3,"box":{"x":116,"y":282,"width":706,"height":12}},{"id":"eb3d73ff-05d9-4dd5-943e-52df0a6db3be","block_type":"box","text":"complexity of the order and the types of securities or instruments included in a fund’s Redemption Basket,","page_number":3,"box":{"x":116,"y":298,"width":723,"height":11}},{"id":"ab4041c8-4e6e-4bb1-91d8-86834a2f4877","block_type":"box","text":"among other variables. The ETF Servicing Fee may be equal to zero in certain instances, such as for redemption","page_number":3,"box":{"x":116,"y":313,"width":761,"height":12}},{"id":"a95eee6a-8aac-4898-9d49-becf50d38019","block_type":"box","text":"transactions that consist solely of cash. The actual Custody Transaction Costs vary per order based on the number","page_number":3,"box":{"x":116,"y":329,"width":771,"height":11}},{"id":"b4f0b607-670b-42b1-8430-6e70d072dcbf","block_type":"box","text":"of trades, underlying markets, and settlement locations associated with the redemption of a Creation Unit. The","page_number":3,"box":{"x":116,"y":344,"width":748,"height":12}},{"id":"472d5ca9-269f-47ff-b4fb-05e7cc3fae07","block_type":"box","text":"following table sets forth for the Fund an estimate of the redemption transaction fee that would have been","page_number":3,"box":{"x":116,"y":360,"width":716,"height":11}},{"id":"09fc943e-8f63-46aa-836f-9d8c74dd56ac","block_type":"box","text":"charged as of September 30, 2026 if the Fund had redeemed a Creation Unit on that date. The actual fee that","page_number":3,"box":{"x":116,"y":375,"width":734,"height":12}},{"id":"1ff5944d-c2ee-40f2-999a-651aedf361fb","block_type":"box","text":"would have been charged to an Authorized Participant in connection with a redemption order will vary over time","page_number":3,"box":{"x":116,"y":391,"width":766,"height":11}},{"id":"5d52a05e-340a-488f-ba0a-169910922a31","block_type":"box","text":"depending on the factors discussed above, and may be higher than the fee set forth below.","page_number":3,"box":{"x":116,"y":406,"width":609,"height":12}},{"id":"3e63b561-218d-417b-b46c-0159f72d057d","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution, if a","page_number":3,"box":{"x":116,"y":435,"width":715,"height":12}},{"id":"bebec0a2-e3e1-4529-9aa0-62c02723d432","block_type":"box","text":"redemption transaction consists solely or partially of cash, the Authorized Participant may also be required to","page_number":3,"box":{"x":116,"y":451,"width":741,"height":11}},{"id":"7130e614-1eac-4723-bb06-afa669adfed0","block_type":"box","text":"cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange, execution and other","page_number":3,"box":{"x":116,"y":466,"width":754,"height":12}},{"id":"c5843d79-311b-4c39-a336-23633cfc2f39","block_type":"box","text":"costs and expenses related to the execution of trades resulting from such transaction (which may, in certain","page_number":3,"box":{"x":116,"y":482,"width":726,"height":11}},{"id":"e4de46ad-9381-4309-84b9-72bbd8a3293e","block_type":"box","text":"instances, be based on a good faith estimate of transaction costs based on historical data or other inputs, at","page_number":3,"box":{"x":116,"y":497,"width":720,"height":12}},{"id":"60f5a4f8-37b3-44f6-bb45-c608b6d31166","block_type":"box","text":"BlackRock’s discretion, and may include part or all of the spread between the expected bid and offer side of the","page_number":3,"box":{"x":116,"y":513,"width":758,"height":11}},{"id":"1c69aab9-04d3-4cd8-a4d0-1a8e1272ece8","block_type":"box","text":"market and anticipated market impact). However, the Fund is not obligated to trade identical securities to the","page_number":3,"box":{"x":116,"y":528,"width":739,"height":12}},{"id":"d47433da-7002-4951-984f-06a654ef504b","block_type":"box","text":"securities identified by BlackRock in estimating these transaction and other costs and expenses. In certain cases,","page_number":3,"box":{"x":117,"y":544,"width":760,"height":11}},{"id":"83d3cca6-4c75-4f75-b66d-7b2c4b7effd6","block_type":"box","text":"BlackRock or an affiliate may determine in its discretion to deviate from the regular charge, subject to the","page_number":3,"box":{"x":116,"y":559,"width":719,"height":12}},{"id":"538dabbb-0bb9-4e56-a0b3-0b628b7ed249","block_type":"box","text":"maximum amounts shown below.","page_number":3,"box":{"x":116,"y":575,"width":231,"height":9}},{"id":"5e1340e4-471b-4061-b9c5-d9463b8ce3ce","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Fund Securities from the Fund to their account","page_number":3,"box":{"x":116,"y":603,"width":767,"height":12}},{"id":"29efe0b8-49ba-49b3-968a-60d6f6b0dbd4","block_type":"box","text":"on their order. Certain fees/costs associated with redemption transactions may be waived in certain","page_number":3,"box":{"x":116,"y":619,"width":671,"height":12}},{"id":"62a825e9-1dd5-4f34-a8fc-9e30d459cba0","block_type":"box","text":"circumstances. Investors who use the services of a broker or other financial intermediary to dispose of Fund","page_number":3,"box":{"x":116,"y":634,"width":731,"height":12}},{"id":"8b6eb446-c917-49a3-b559-6226122962a3","block_type":"box","text":"shares may be charged a fee for such services.","page_number":3,"box":{"x":117,"y":650,"width":314,"height":12}},{"id":"6155fe20-8ca3-44e2-8676-989f2323d4ef","block_type":"box","text":"The following table sets forth the Fund’s estimated redemption transaction fee as of September 30, 2026 and","page_number":3,"box":{"x":116,"y":679,"width":733,"height":11}},{"id":"2b66b933-ddc0-40b5-ba73-df802eee71eb","block_type":"box","text":"maximum additional charge (as described above):","page_number":3,"box":{"x":116,"y":694,"width":335,"height":12}},{"id":"922261ea-84db-4755-b932-ec81ae5db266","block_type":"box","text":"Standard Redemption","page_number":3,"box":{"x":324,"y":720,"width":159,"height":12}},{"id":"878cac60-21e4-44fe-8f39-f9c7aa5acd10","block_type":"box","text":"Transaction Fee*","page_number":3,"box":{"x":342,"y":733,"width":123,"height":9}},{"id":"b833e8d1-179e-4f18-91cd-798b0da00374","block_type":"box","text":"Maximum Additional","page_number":3,"box":{"x":526,"y":720,"width":155,"height":9}},{"id":"21ddc14c-315e-4d08-a08c-7d2459dcc255","block_type":"box","text":"Charge**","page_number":3,"box":{"x":570,"y":733,"width":68,"height":12}},{"id":"59a4e3d9-cc23-473d-b58e-b2e9a5d67ab0","block_type":"box","text":"$0 2%","page_number":3,"box":{"x":396,"y":753,"width":218,"height":11}},{"id":"ad5ce81e-b97f-4391-9de5-95b66478f754","block_type":"box","text":"* The standard redemption transaction fee consists of the ETF Servicing Fee and Custody Transaction Costs. The standard redempt","page_number":3,"box":{"x":117,"y":781,"width":723,"height":9}},{"id":"0ea0f0ac-8aa9-4606-a40b-55e268b85454","block_type":"box","text":"ion","page_number":3,"box":{"x":840,"y":781,"width":17,"height":7}},{"id":"52f647ee-243a-4a25-9696-d772988c0ad6","block_type":"box","text":"transaction fee may vary over time depending on the factors discussed above, and may be higher than the fee set forth above. Es","page_number":3,"box":{"x":143,"y":794,"width":688,"height":9}},{"id":"2c03e31a-2b2e-4618-a0da-0fa4a88ea0ac","block_type":"box","text":"timated","page_number":3,"box":{"x":832,"y":794,"width":40,"height":7}},{"id":"c5731144-2b58-4c61-8789-cc364e5190c3","block_type":"box","text":"fee as of September 30, 2026.","page_number":3,"box":{"x":143,"y":807,"width":159,"height":9}},{"id":"3b8d2b09-ee14-4a5c-ac7a-3400661f8f28","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":3,"box":{"x":117,"y":822,"width":328,"height":9}},{"id":"9a650dd3-208c-4ea7-adad-653c3e395980","block_type":"box","text":"Shareholders should retain this Supplement for future reference.","page_number":3,"box":{"x":267,"y":849,"width":470,"height":12}},{"id":"3b936a6c-cbb4-4ccc-91a6-b784092a2bbd","block_type":"box","text":"PRSAI-ISMF-1026SUP","page_number":3,"box":{"x":116,"y":878,"width":167,"height":9}},{"id":"b2953a9f-9dfb-4fb1-a072-4c82c0aaedbe","block_type":"box","text":"3","page_number":3,"box":{"x":496,"y":909,"width":7,"height":9}},{"id":"d58dd4ec-a43a-40fa-a67d-5b2013146047","block_type":"box","text":"NM1026U-6030748-3/260","page_number":3,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"15f437c1-147f-4204-a669-a1432a333e89","block_type":"box","text":"BlackRock ETF Trust","page_number":4,"box":{"x":420,"y":88,"width":164,"height":9}},{"id":"c02d0bfe-6b1c-4396-954a-f3bd43160151","block_type":"box","text":"BlackRock ETF Trust II","page_number":4,"box":{"x":411,"y":103,"width":181,"height":9}},{"id":"d98c7ec6-ff67-4a98-bd15-c598f949c506","block_type":"box","text":"Supplement dated September 11, 2026","page_number":4,"box":{"x":362,"y":134,"width":280,"height":12}},{"id":"dfa3f537-e7b0-4082-846d-f5191bfa90d5","block_type":"box","text":"to the currently effective Statement of Additional Information (the “SAI”)","page_number":4,"box":{"x":234,"y":149,"width":536,"height":12}},{"id":"827a0f00-41c2-42b0-bfeb-24c388b6f7c6","block_type":"box","text":"for each of the funds listed in Appendix A (each, a “Fund”), as amended from time to time","page_number":4,"box":{"x":176,"y":165,"width":651,"height":12}},{"id":"8558cb8a-a8a5-48a2-8783-6dada422d070","block_type":"box","text":"Effective immediately, the following changes are made to each Fund’s SAI:","page_number":4,"box":{"x":116,"y":196,"width":543,"height":12}},{"id":"c32c202c-c8e3-4f19-a1c0-3300c01c21aa","block_type":"box","text":"The fifth paragraph of the section of the SAI entitled “Investment Advisory, Administrative and","page_number":4,"box":{"x":116,"y":227,"width":694,"height":12}},{"id":"e1580c01-2f72-41a9-a7ea-5f7622ab286a","block_type":"box","text":"Distribution Services — Payments by BFA and its Affiliates” is deleted in its entirety and replaced with","page_number":4,"box":{"x":116,"y":242,"width":745,"height":12}},{"id":"747de912-c391-4070-824f-918ccda06b8f","block_type":"box","text":"the following:","page_number":4,"box":{"x":116,"y":258,"width":103,"height":12}},{"id":"ff499c57-28fa-4a44-8cea-9c06851e267e","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and certain other","page_number":4,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"95d8289c-886a-4a88-a891-4f92e00aa2cd","block_type":"box","text":"third parties that the BFA Entities believe may benefit the business of the BFA Entities or facilitate investment in","page_number":4,"box":{"x":116,"y":305,"width":769,"height":11}},{"id":"549b555f-4efa-41e1-927c-2328fb8e1778","block_type":"box","text":"the Fund or certain Products. Such agreements can include payments by BFA Entities to such Intermediaries and","page_number":4,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"35b077e6-da50-4459-a6ae-4447b34e51d1","block_type":"box","text":"third parties for data collection and provision, technology support, platform enhancement, or educational content,","page_number":4,"box":{"x":116,"y":336,"width":769,"height":11}},{"id":"35052559-e098-4fa9-98d5-066e87a565c7","block_type":"box","text":"co-marketing and cross-promotional efforts. In certain cases, such payments to Intermediaries are subject to","page_number":4,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"44afd3a2-1acf-4d30-bd21-003d5c663849","block_type":"box","text":"certain minimum payment levels or tiered payments. With respect to certain funds and Products, payments by the","page_number":4,"box":{"x":116,"y":367,"width":769,"height":11}},{"id":"60748963-8f8b-406d-a8e7-1c9e61c01c2f","block_type":"box","text":"BFA Entities may take the form of, among other things, “due diligence” payments for an Intermediary’s review","page_number":4,"box":{"x":116,"y":382,"width":757,"height":12}},{"id":"aecd1eb9-9d11-4e25-aa3b-4faa67d346c8","block_type":"box","text":"of such funds and Products; payment for providing employee training and information relating to such funds and","page_number":4,"box":{"x":116,"y":398,"width":765,"height":11}},{"id":"41d87c1a-890a-44eb-94eb-2e11add23335","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered representatives,","page_number":4,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"467e6268-469c-4ddc-af0e-77636bfde1fe","block_type":"box","text":"salespersons or other personnel, fees for maintaining an Intermediary’s investor platform, “shelf space” payments","page_number":4,"box":{"x":117,"y":429,"width":770,"height":11}},{"id":"a73190be-0087-43da-94a3-55f9f9c905a6","block_type":"box","text":"for making such funds and Products available on the Intermediary’s platform or fees for providing assistance in","page_number":4,"box":{"x":116,"y":444,"width":756,"height":12}},{"id":"11a3ac5a-dd14-49e4-ba3f-0e6003acb4a0","block_type":"box","text":"promoting the sale of such funds and Products. In such cases, the payments to Intermediaries may be tiered or","page_number":4,"box":{"x":116,"y":460,"width":745,"height":11}},{"id":"e32c5d49-4441-4c44-a22a-5cc99cdd8d33","block_type":"box","text":"based on a percentage of the value of the funds and Products held by customers of the applicable Intermediary","page_number":4,"box":{"x":116,"y":475,"width":747,"height":12}},{"id":"b9a68298-90f5-464e-8b9b-0b27bd9872f5","block_type":"box","text":"and may also be subject to minimum payment levels. Payments made pursuant to such arrangements may vary in","page_number":4,"box":{"x":116,"y":491,"width":767,"height":11}},{"id":"78d2ba9c-00b9-4341-9aad-4d42cdf90f6e","block_type":"box","text":"any year and may be different for different Intermediaries and third parties and may reflect different services","page_number":4,"box":{"x":116,"y":506,"width":738,"height":12}},{"id":"db6d7f17-eb39-4cdb-902e-b131cdf1e4b3","block_type":"box","text":"provided. As of the date of this SAI, the Intermediaries and other third parties (or their respective affiliates)","page_number":4,"box":{"x":116,"y":522,"width":729,"height":11}},{"id":"cda9bca0-1de9-45b9-97ce-fd5ea433aa73","block_type":"box","text":"receiving one or more types of the contractual payments described above include (in addition to FBS and NFS):","page_number":4,"box":{"x":116,"y":537,"width":758,"height":12}},{"id":"dc231829-201b-468d-8f74-85b7658854a0","block_type":"box","text":"&Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American Enterprise Investment Services,","page_number":4,"box":{"x":116,"y":553,"width":761,"height":11}},{"id":"64df6c21-2806-481c-aa5e-f6db6a1b2e44","block_type":"box","text":"Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets, LLC, BNY Mellon Performance & Risk","page_number":4,"box":{"x":116,"y":568,"width":759,"height":12}},{"id":"506b1711-2a95-41aa-9d7a-ba33e6b76128","block_type":"box","text":"Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab & Co., Inc., Clearstream Fund Centre AG,","page_number":4,"box":{"x":116,"y":584,"width":717,"height":11}},{"id":"14184463-a27f-4e27-98e1-7b90f8ef2ebb","block_type":"box","text":"Commonwealth Equity Services, LLC, Dorsey Wright and Associates, LLC, Dynasty Financial Partners LLC,","page_number":4,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"0e23edba-597b-4b59-a732-eeeab6132529","block_type":"box","text":"E*Trade Securities LLC, Envestnet Asset Management, Inc., Equitable Advisors, LLC, iCapital Markets LLC,","page_number":4,"box":{"x":116,"y":615,"width":751,"height":11}},{"id":"7e817700-63d9-4cb5-ac38-c4c8aa4714f9","block_type":"box","text":"Interactive Brokers LLC, LPL Financial LLC, Merrill Lynch, Pierce, Fenner & Smith Incorporated, MML","page_number":4,"box":{"x":116,"y":630,"width":721,"height":12}},{"id":"012bdb63-2a98-40e0-bdff-bd54fef51704","block_type":"box","text":"Investors Services, LLC, Morgan Stanley Smith Barney LLC, Northwestern Mutual Investment Services, LLC,","page_number":4,"box":{"x":116,"y":646,"width":755,"height":11}},{"id":"7d04cd9d-4e5b-4cc9-ad7e-4540a38ef238","block_type":"box","text":"Orion Portfolio Solutions, LLC, Pershing LLC, Raymond James Financial Services, Inc., Riskalyze, Inc.,","page_number":4,"box":{"x":116,"y":661,"width":709,"height":12}},{"id":"949687a0-fa82-4a0e-87f2-87fc5c116cb9","block_type":"box","text":"Rockefeller Financial LLC, Sanctuary Wealth Group, LLC, UBS Financial Services Inc., Wells Fargo Clearing","page_number":4,"box":{"x":116,"y":677,"width":750,"height":11}},{"id":"7de18bd9-e5e6-4785-8b5f-a2f4bf99f23f","block_type":"box","text":"Services, LLC and Wells Fargo Advisors Financial Network, LLC. 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Capitalized terms used herein that are not defined have the same meaning as in the","page_number":6,"box":{"x":117,"y":379,"width":710,"height":12}},{"id":"eb172c71-adf5-4765-8661-a3f2db265b60","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":6,"box":{"x":117,"y":394,"width":755,"height":12}},{"id":"e10c4343-0a02-494a-bd86-8f9c8708159b","block_type":"box","text":"to the Fund have been incorporated by reference into the Fund’s Prospectus. 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. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8","page_number":7,"box":{"x":274,"y":198,"width":601,"height":10}},{"id":"6afdee6f-8eab-45c4-b7a9-f16cec170128","block_type":"box","text":"Portfolio Holdings Information","page_number":7,"box":{"x":117,"y":214,"width":224,"height":12}},{"id":"f99fe2c8-e87f-4a85-9c07-1e1192d077ec","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8","page_number":7,"box":{"x":346,"y":214,"width":529,"height":9}},{"id":"dd244045-cab3-4015-809c-8ccadefc1462","block_type":"box","text":"Investment Policies","page_number":7,"box":{"x":117,"y":229,"width":148,"height":10}},{"id":"e164fc95-f416-4fe6-a2df-1779d43de569","block_type":"box","text":". . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 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A-1","page_number":8,"box":{"x":435,"y":521,"width":440,"height":10}},{"id":"ea4af590-0f08-4ce4-a23d-a8b63ce5a569","block_type":"box","text":"Appendix B – Proxy Voting Policies","page_number":8,"box":{"x":116,"y":537,"width":267,"height":12}},{"id":"4f196dd4-5d05-4775-bfe2-d5c35a2e4402","block_type":"box","text":"..................................................","page_number":8,"box":{"x":390,"y":545,"width":439,"height":1}},{"id":"6048099a-f9c1-4f97-b391-809671e856b4","block_type":"box","text":"B-1","page_number":8,"box":{"x":845,"y":537,"width":30,"height":9}},{"id":"999548b1-9b29-4fd2-8ab2-5380bfccb296","block_type":"box","text":"ii","page_number":8,"box":{"x":497,"y":909,"width":5,"height":9}},{"id":"a9ed635a-8995-4b75-8a7c-40ac3d20ee6e","block_type":"box","text":"NM1026U-6030748-8/260","page_number":8,"box":{"x":757,"y":969,"width":145,"height":7}},{"id":"28381a40-6693-4ef8-b6ee-23a129063f83","block_type":"box","text":"PART I: INFORMATION ABOUT ISHARES MANAGED FUTURES ACTIVE ETF","page_number":9,"box":{"x":197,"y":87,"width":610,"height":10}},{"id":"d311eb6c-d411-4215-a5f5-3c1b115a8d81","block_type":"box","text":"Part I of this Statement of Additional Information (“SAI”) sets forth information about iShares Managed","page_number":9,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"43f77f2e-6867-4d4a-ba6b-ddc84879c841","block_type":"box","text":"Futures Active ETF (the “Fund”), a series of BlackRock ETF Trust (the “Trust”). It includes information","page_number":9,"box":{"x":117,"y":141,"width":759,"height":12}},{"id":"b580310f-1be5-47eb-98c3-fb7c987155b5","block_type":"box","text":"about the Trust’s Board of Trustees (the “Board”), the advisory and management services provided to","page_number":9,"box":{"x":116,"y":157,"width":759,"height":12}},{"id":"ff498d32-efec-4263-b25e-851e8a271c94","block_type":"box","text":"and the management fees paid by the Fund and information about other fees applicable to and","page_number":9,"box":{"x":116,"y":172,"width":709,"height":12}},{"id":"bd328ed5-877c-4bdf-bb37-df9a1e83b4f5","block_type":"box","text":"services provided to the Fund. 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Shares of the Fund are listed for trading on CBOE (the “Listing Exchange” or “CBOE”), a","page_number":9,"box":{"x":117,"y":415,"width":769,"height":12}},{"id":"d56a638b-f9f0-4eef-81e8-e0e3cba17a1c","block_type":"box","text":"national securities exchange. Shares of the Fund are traded in the secondary market and elsewhere at","page_number":9,"box":{"x":117,"y":431,"width":767,"height":12}},{"id":"d60e2de0-77c8-4a72-9ce0-37a46ec60474","block_type":"box","text":"market prices that may be at, above or below the Fund’s NAV. Shares are redeemable by the Fund","page_number":9,"box":{"x":117,"y":446,"width":741,"height":12}},{"id":"1bbf253c-2432-4cca-90d1-25f7cf8880ce","block_type":"box","text":"only in Creation Units by Authorized Participants (as defined in the","page_number":9,"box":{"x":116,"y":462,"width":498,"height":12}},{"id":"0d1fcb46-a97d-44ea-80bc-1f723853db7e","block_type":"box","text":"Procedures for Creation of Creation","page_number":9,"box":{"x":615,"y":462,"width":270,"height":9}},{"id":"83f916d7-f4cb-4fb6-8b2f-255b7353cc39","block_type":"box","text":"Units","page_number":9,"box":{"x":117,"y":477,"width":37,"height":10}},{"id":"1811b9bb-3056-49e3-bf79-ae8154addd07","block_type":"box","text":"s section of this SAI), and, generally, in exchange for portfolio securities and a Cash Amount (as","page_number":9,"box":{"x":154,"y":477,"width":711,"height":12}},{"id":"f2b6bd6b-3e37-4929-a670-62c09a349d4d","block_type":"box","text":"defined in the","page_number":9,"box":{"x":116,"y":493,"width":105,"height":9}},{"id":"1d705b57-d53b-493d-8d93-8e293081f0a3","block_type":"box","text":"Redemption of Creation Units","page_number":9,"box":{"x":222,"y":493,"width":220,"height":12}},{"id":"08f3c5a1-67fa-4934-ad4f-4fce54edc8ef","block_type":"box","text":"s section of this SAI). Creation Units typically are a specified","page_number":9,"box":{"x":442,"y":493,"width":445,"height":12}},{"id":"980e4ea3-a817-48a3-aa04-e2b4b0d300b0","block_type":"box","text":"number of shares, generally 20,000 shares or multiples thereof.","page_number":9,"box":{"x":117,"y":508,"width":476,"height":12}},{"id":"ee99c32c-cd68-4289-8d93-27312d4a6419","block_type":"box","text":"The Trust reserves the right to permit or require that creations and redemptions of shares are effected","page_number":9,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"9c739e23-3b75-4ebf-8e93-d90f6a999abf","block_type":"box","text":"fully or partially in cash and reserves the right to permit or require the substitution of Deposit Securities","page_number":9,"box":{"x":116,"y":555,"width":766,"height":12}},{"id":"01b3a85f-8b32-4b23-b78d-c7d59db0d529","block_type":"box","text":"in lieu of cash. Shares may be issued in advance of receipt of Deposit Securities, subject to various","page_number":9,"box":{"x":117,"y":570,"width":742,"height":12}},{"id":"169fade9-8ce2-4105-abe5-4e9009c770ee","block_type":"box","text":"conditions, including a requirement that the Authorized Participant maintain with the Trust collateral as","page_number":9,"box":{"x":116,"y":586,"width":763,"height":12}},{"id":"f9eae851-9636-4aa2-adc4-3fdfec7b1203","block_type":"box","text":"set forth in the handbook for Authorized Participants. The Trust may use such collateral at any time to","page_number":9,"box":{"x":116,"y":601,"width":760,"height":12}},{"id":"59c88acf-db51-4563-8a6c-340ae89b504f","block_type":"box","text":"purchase Deposit Securities. See the","page_number":9,"box":{"x":117,"y":617,"width":280,"height":12}},{"id":"0e973506-ef1b-4cba-a059-66196c36ddb1","block_type":"box","text":"Creation and Redemption of Creation Units","page_number":9,"box":{"x":399,"y":617,"width":320,"height":12}},{"id":"61009d79-192b-44fc-b620-2d4f2625cfd6","block_type":"box","text":"s section of this SAI.","page_number":9,"box":{"x":719,"y":617,"width":149,"height":9}},{"id":"df1b2340-c27c-4b18-80d0-3cabfc7aecae","block_type":"box","text":"Transaction fees and other costs associated with creations or redemptions that include a cash portion","page_number":9,"box":{"x":116,"y":632,"width":760,"height":12}},{"id":"83156b97-49b1-418a-a892-b07fdee9239e","block_type":"box","text":"may be higher than the transaction fees and other costs associated with in-kind creations or","page_number":9,"box":{"x":117,"y":648,"width":686,"height":12}},{"id":"7b016642-6df9-498c-8e48-142a5ece0e18","block_type":"box","text":"redemptions. 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The Listing Exchange may, but is not required to, remove","page_number":10,"box":{"x":116,"y":237,"width":752,"height":12}},{"id":"0ae0cdda-4bf8-4429-9a21-9550ebb54e80","block_type":"box","text":"the shares of the Fund from listing if, among other things: (i) the Fund is no longer eligible to operate in","page_number":10,"box":{"x":116,"y":252,"width":768,"height":12}},{"id":"e9f60f6c-6a6f-42b5-8a61-c2cc152c9ec9","block_type":"box","text":"reliance on Rule 6c-11 under the 1940 Act; (ii) any of the other listing requirements are not","page_number":10,"box":{"x":117,"y":267,"width":676,"height":12}},{"id":"6294e0a3-94e3-404e-bdfc-f210f236e298","block_type":"box","text":"continuously maintained; (iii) following the initial 12-month period beginning upon the commencement","page_number":10,"box":{"x":116,"y":281,"width":757,"height":13}},{"id":"e1447e35-41f0-49de-8b40-9d6ac8e891b4","block_type":"box","text":"of trading of Fund shares, there are fewer than 50 record and/or beneficial owners of shares of the","page_number":10,"box":{"x":116,"y":296,"width":735,"height":12}},{"id":"8350f016-08e4-40f5-87e3-8118580d0e64","block_type":"box","text":"Fund; or (iv) any event shall occur or condition shall exist that, in the opinion of the Listing Exchange,","page_number":10,"box":{"x":117,"y":311,"width":754,"height":12}},{"id":"5521b539-a660-4308-ab70-bf1540fae38f","block_type":"box","text":"makes further dealings on the Listing Exchange inadvisable. The Listing Exchange will also remove","page_number":10,"box":{"x":117,"y":326,"width":742,"height":12}},{"id":"38ed0ee7-31ab-4fdd-b248-a2c49b53f6e8","block_type":"box","text":"shares of the Fund from listing and trading upon termination of the Fund.","page_number":10,"box":{"x":116,"y":341,"width":544,"height":12}},{"id":"b8a52cb0-0000-4db0-9849-cfc07a82616b","block_type":"box","text":"As in the case of other publicly-traded securities, when you buy or sell shares of the Fund through a","page_number":10,"box":{"x":116,"y":367,"width":745,"height":12}},{"id":"ca41071c-1221-496b-9b46-bbc12d8d3953","block_type":"box","text":"broker, you may incur a brokerage commission determined by that broker, as well as other charges.","page_number":10,"box":{"x":117,"y":382,"width":746,"height":12}},{"id":"eb213d64-1f08-4181-a55e-c7d845365fea","block_type":"box","text":"The Trust reserves the right to adjust the share price of","page_number":10,"box":{"x":116,"y":408,"width":392,"height":12}},{"id":"3ac0c2e8-2793-4b45-93c3-145769b1881e","block_type":"box","text":"f the Fund in the future to maintain convenient trading","page_number":10,"box":{"x":507,"y":408,"width":380,"height":12}},{"id":"97ba9c44-77f1-4a46-906a-3eda731710bc","block_type":"box","text":"ranges for investors. 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Please","page_number":10,"box":{"x":505,"y":581,"width":375,"height":12}},{"id":"3c6c8d6f-6578-4538-a5da-7559c9017e00","block_type":"box","text":"see Part II of this SAI for further information on thes","page_number":10,"box":{"x":116,"y":595,"width":365,"height":10}},{"id":"52ae654d-b63b-45ff-a176-0fdc9b59443d","block_type":"box","text":"e investments and investment strategies. 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The Subsidiary will also enter into separate contracts for the provision of custody and accounting","page_number":15,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"bb0438e8-3ee6-483e-ae93-3d238fead864","block_type":"box","text":"agent services with the same or with affiliates of the same service providers that provide those services","page_number":15,"box":{"x":116,"y":552,"width":772,"height":12}},{"id":"db899388-9553-4585-a3ca-3dd91d464eb4","block_type":"box","text":"to the Fund.","page_number":15,"box":{"x":116,"y":568,"width":94,"height":9}},{"id":"0abb380e-4850-4d6f-adbe-e0c16dd0223a","block_type":"box","text":"The financial statements of the Subsidiary are consolidated with the Fund’s financial statements in the","page_number":15,"box":{"x":116,"y":599,"width":762,"height":12}},{"id":"f9d1dd36-c478-4a4b-b0d3-330c6fce89e8","block_type":"box","text":"Fund’s Annual and Semi-Annual Financial Statements and additional Information. 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There also will be no limit on investment in i","page_number":18,"box":{"x":117,"y":846,"width":372,"height":12}},{"id":"b1275d35-6e0b-49f7-8c10-2a8dc587cc74","block_type":"box","text":"ssuers domiciled in a single jurisdiction or country.","page_number":18,"box":{"x":490,"y":846,"width":361,"height":12}},{"id":"5f62b989-b1d2-4c16-b14b-f7414f356134","block_type":"box","text":"Finance companies will be considered to be in the industries","page_number":18,"box":{"x":117,"y":862,"width":432,"height":12}},{"id":"e197e869-ffbe-4310-9759-d3d847ad21b3","block_type":"box","text":"of their parents if their activities are primarily","page_number":18,"box":{"x":549,"y":862,"width":317,"height":12}},{"id":"dd19d22b-3478-4125-ba1c-66e18d244e04","block_type":"box","text":"related to financing the activities of the parents.","page_number":18,"box":{"x":117,"y":877,"width":332,"height":12}},{"id":"2dede7f5-e499-4d39-b223-4d0a88a4df7e","block_type":"box","text":"Each foreign government will be considered to be a","page_number":18,"box":{"x":450,"y":877,"width":375,"height":12}},{"id":"49949440-5aba-43f7-a0e0-d60a793f278e","block_type":"box","text":"10","page_number":18,"box":{"x":492,"y":909,"width":16,"height":9}},{"id":"9ee8eb92-3861-4238-9620-b8c929b02bed","block_type":"box","text":"NM1026U-6030748-18/260","page_number":18,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"76121f90-f42e-4c8a-9d4e-b6afcfb1dfe4","block_type":"box","text":"member of a separate industry. With respect to t","page_number":19,"box":{"x":117,"y":87,"width":338,"height":12}},{"id":"4752373b-4c46-42f6-bbe6-4c79a240d056","block_type":"box","text":"the Fund’s industry classifications, the Fund currently","page_number":19,"box":{"x":455,"y":87,"width":382,"height":12}},{"id":"e21d0e3f-7067-4a71-bf62-0b3f9bc8cb00","block_type":"box","text":"utilizes any one or more of the industry sub-classifi","page_number":19,"box":{"x":117,"y":102,"width":358,"height":12}},{"id":"c55ef62f-11c0-46dc-80fc-7dd186f37777","block_type":"box","text":"cations used by one or more widely recognized market","page_number":19,"box":{"x":476,"y":102,"width":394,"height":12}},{"id":"ac9214f1-8b02-4e90-b246-45a507d98cc9","block_type":"box","text":"indexes or rating group indexes, and/or as defined","page_number":19,"box":{"x":117,"y":117,"width":361,"height":12}},{"id":"e9382925-ec3f-42a1-9f63-656a05e76636","block_type":"box","text":"by Fund management. The policy also will be interpreted","page_number":19,"box":{"x":479,"y":117,"width":406,"height":12}},{"id":"ebbe7a44-6fab-4aed-9cb8-a4126a771dea","block_type":"box","text":"to give broad authority to the Fund as to how to","page_number":19,"box":{"x":116,"y":133,"width":335,"height":12}},{"id":"ec3bbdc6-0d9f-47aa-9f87-62f96f740847","block_type":"box","text":"classify issuers within or among industries.","page_number":19,"box":{"x":452,"y":132,"width":312,"height":13}},{"id":"d0db1bc5-c3a7-4618-a792-9f1bcf7eb482","block_type":"box","text":"With respect to the fundamental policy relating to bo","page_number":19,"box":{"x":116,"y":157,"width":369,"height":13}},{"id":"f803bda1-881b-4992-a0c3-36b19567f6e5","block_type":"box","text":"rrowing money set forth in (2) above, the Investment","page_number":19,"box":{"x":486,"y":157,"width":376,"height":13}},{"id":"592b19b4-6ead-45fb-a88b-238d0df909f9","block_type":"box","text":"Company Act permits the Fund to borrow money in amounts of up to one-third of the Fund’s total assets","page_number":19,"box":{"x":117,"y":173,"width":743,"height":12}},{"id":"fa1e0680-32d6-488d-8b7b-33842aecdab8","block_type":"box","text":"from banks for any purpose, and to borrow up to 5% of the Fund’s total assets from banks or other lenders","page_number":19,"box":{"x":116,"y":188,"width":760,"height":12}},{"id":"512500ff-6fd8-48a7-963d-c36c9538d424","block_type":"box","text":"for temporary purposes. (The Fund’s total assets in","page_number":19,"box":{"x":116,"y":203,"width":363,"height":12}},{"id":"85451884-4e41-4570-8afa-32160785c167","block_type":"box","text":"clude the amounts being borrowed.) To limit the risks","page_number":19,"box":{"x":480,"y":203,"width":381,"height":12}},{"id":"bea509ef-5132-45f7-be03-66854f3ffc45","block_type":"box","text":"attendant to borrowing, the Investment Company Act","page_number":19,"box":{"x":116,"y":218,"width":381,"height":12}},{"id":"1e705197-fb0f-4be9-bfbc-b39e7a3e3dc3","block_type":"box","text":"requires the Fund to maintain at all times an “asset","page_number":19,"box":{"x":497,"y":218,"width":365,"height":12}},{"id":"02d68677-3ede-46a4-bc93-4b8d84cf4737","block_type":"box","text":"coverage” of at least 300% of the amount of its borro","page_number":19,"box":{"x":116,"y":234,"width":374,"height":12}},{"id":"0d250de3-ce82-4797-9f81-26e7207e1964","block_type":"box","text":"wings. Asset coverage means the ratio that the value","page_number":19,"box":{"x":490,"y":234,"width":382,"height":12}},{"id":"d5599cf1-01be-4eca-825b-f60c6d626d8f","block_type":"box","text":"of the Fund’s total assets (including amounts borrowed","page_number":19,"box":{"x":116,"y":249,"width":389,"height":12}},{"id":"00c937ce-4267-4b26-90f9-d507fd0081fa","block_type":"box","text":"), minus liabilities other than borrowings, bears to the","page_number":19,"box":{"x":506,"y":249,"width":379,"height":12}},{"id":"7cacfc7c-b0c6-45f6-831b-17600b75b777","block_type":"box","text":"aggregate amount of all borrowings. Borrowing money to increase portfolio holdings is known as","page_number":19,"box":{"x":116,"y":264,"width":689,"height":12}},{"id":"f1b68127-0653-4129-9520-f62d30e1a399","block_type":"box","text":"“leveraging.” Certain trading practices and investment","page_number":19,"box":{"x":116,"y":279,"width":381,"height":12}},{"id":"4b9719ab-4c83-4e9a-90da-e26b9a316cb1","block_type":"box","text":"s, such as reverse repurchase agreements, may be","page_number":19,"box":{"x":497,"y":280,"width":372,"height":11}},{"id":"d3014dd3-a8ed-4156-adc1-e30e1e737afd","block_type":"box","text":"considered to be borrowings or involve leverage and t","page_number":19,"box":{"x":116,"y":295,"width":382,"height":12}},{"id":"9d5d4cde-3d9d-479e-ac00-472b1c305f8a","block_type":"box","text":"hus are subject to the Investment Company Act","page_number":19,"box":{"x":498,"y":295,"width":343,"height":12}},{"id":"7bce01d7-1883-4369-b8e8-c57804969a90","block_type":"box","text":"restrictions. In accordance with Rule 18f-4 under the Investment Company Act, when the Fund engages in","page_number":19,"box":{"x":117,"y":310,"width":759,"height":12}},{"id":"08dfe97c-df63-42c2-bb0a-4e209d332662","block_type":"box","text":"reverse repurchase agreements and similar financing trans","page_number":19,"box":{"x":117,"y":325,"width":418,"height":12}},{"id":"96439c0d-71c4-4ca6-b019-6e652d95381e","block_type":"box","text":"actions, the Fund may either (i) maintain asset","page_number":19,"box":{"x":536,"y":325,"width":334,"height":12}},{"id":"efaf3c94-b05b-45eb-a883-c1d42f255094","block_type":"box","text":"coverage of at least 300% with respect to such trans","page_number":19,"box":{"x":116,"y":340,"width":372,"height":12}},{"id":"c0d47f34-e06a-43b5-a60c-87f25281b509","block_type":"box","text":"actions and any other borrowings in the aggregate, or","page_number":19,"box":{"x":489,"y":341,"width":385,"height":11}},{"id":"65ec3d29-6905-4381-8e84-4fadee106f8b","block_type":"box","text":"(ii) treat such transactions as “derivatives transact","page_number":19,"box":{"x":117,"y":356,"width":347,"height":12}},{"id":"c82d7fe8-ec76-424a-9d79-f754307f48d0","block_type":"box","text":"ctions” and comply with Rule 18f-4 with respect to such","page_number":19,"box":{"x":464,"y":356,"width":389,"height":12}},{"id":"d7308f2a-c2e0-4240-aa3a-403adc997606","block_type":"box","text":"transactions. Short-term credits necessary for the se","page_number":19,"box":{"x":116,"y":371,"width":372,"height":12}},{"id":"0f89a017-356b-4fee-9853-ffcc21cfe924","block_type":"box","text":"ttlement of securities transactions and arrangements","page_number":19,"box":{"x":489,"y":371,"width":378,"height":12}},{"id":"a97297f0-f46a-4de6-81da-78ebed4fb353","block_type":"box","text":"with respect to securities lending will not be considered to be borrowings under the policy. Practices and","page_number":19,"box":{"x":116,"y":386,"width":742,"height":12}},{"id":"8b77e895-1179-41d7-9653-870c56d2f39a","block_type":"box","text":"investments that may involve leverage but are not cons","page_number":19,"box":{"x":117,"y":401,"width":391,"height":12}},{"id":"152e47fd-8031-42d4-8afc-b61671f7b2c7","block_type":"box","text":"idered to be borrowings are not subject to the policy.","page_number":19,"box":{"x":509,"y":401,"width":376,"height":12}},{"id":"b3bc2b6e-dd41-4e1f-8061-41b4f322088d","block_type":"box","text":"With respect to the fundamental policy relating to","page_number":19,"box":{"x":116,"y":426,"width":352,"height":12}},{"id":"95a54941-2734-4f0b-ba95-4effcf634a15","block_type":"box","text":"underwriting set forth in (5) above, the Investment","page_number":19,"box":{"x":468,"y":426,"width":358,"height":12}},{"id":"30e9e94d-7693-48a7-9664-642148df6385","block_type":"box","text":"Company Act does not prohibit the Fund from engaging in","page_number":19,"box":{"x":117,"y":442,"width":411,"height":12}},{"id":"7939ccdf-7da9-4642-9658-4d53bcba6c96","block_type":"box","text":"the underwriting business or from underwriting","page_number":19,"box":{"x":528,"y":442,"width":339,"height":12}},{"id":"e6182c66-fb92-4572-a732-49347a985328","block_type":"box","text":"the securities of other issuers; in fact, in the case","page_number":19,"box":{"x":116,"y":457,"width":351,"height":11}},{"id":"8366e797-0648-4376-8c6a-2f35f208fa47","block_type":"box","text":"of diversified funds, the Investment Company Act permits","page_number":19,"box":{"x":467,"y":457,"width":411,"height":12}},{"id":"eeae983e-108f-47d8-b202-9ed53c756c53","block_type":"box","text":"the Fund to have underwriting commitments of up to 25%","page_number":19,"box":{"x":116,"y":472,"width":413,"height":12}},{"id":"8d77a574-d8f4-4b3b-a7af-50010ec5fe56","block_type":"box","text":"of its assets under certain circumstances. Those","page_number":19,"box":{"x":529,"y":472,"width":349,"height":10}},{"id":"4926af50-9b73-4fc7-93df-357713706109","block_type":"box","text":"circumstances currently are that the amount of","page_number":19,"box":{"x":116,"y":487,"width":332,"height":12}},{"id":"c3233d82-8f4e-40fc-8f7c-cdf985cdaa40","block_type":"box","text":"f the Fund’s underwriting commitments, when added to the","page_number":19,"box":{"x":447,"y":487,"width":418,"height":12}},{"id":"213d2bec-d9bb-49d4-9e94-fcb2bf6f5905","block_type":"box","text":"value of the Fund’s investments in issuers where t","page_number":19,"box":{"x":116,"y":502,"width":351,"height":10}},{"id":"e068704b-2d4f-4d9d-81c9-ac6af5cc4b80","block_type":"box","text":"the Fund owns more than 10% of the outstanding voting","page_number":19,"box":{"x":467,"y":502,"width":404,"height":13}},{"id":"e40f1475-b071-4b0a-a9df-3218e5fb6e2a","block_type":"box","text":"securities of those issuers, cannot exceed the 25%","page_number":19,"box":{"x":116,"y":518,"width":361,"height":11}},{"id":"7cb0235e-8bf8-4fd7-8b25-58d5bef50d17","block_type":"box","text":"cap. A fund engaging in transactions involving the","page_number":19,"box":{"x":478,"y":518,"width":363,"height":12}},{"id":"060beb9c-5c7c-4495-ad06-c701a4c49943","block_type":"box","text":"acquisition or disposition of portfolio securities ma","page_number":19,"box":{"x":116,"y":533,"width":352,"height":12}},{"id":"4bcacded-cffd-45ca-bdc9-6de7dd4b7130","block_type":"box","text":"y be considered to be an underwriter under the Securities","page_number":19,"box":{"x":468,"y":533,"width":413,"height":12}},{"id":"88889b22-ebb1-436b-8e76-778124b2add5","block_type":"box","text":"Act of 1933, as amended (the “1933 Act”). Although it is not","page_number":19,"box":{"x":116,"y":548,"width":423,"height":12}},{"id":"b8b1d7b4-76cc-43bc-94f8-51e9cbea3f00","block_type":"box","text":"t believed that the application of the 1933 Act","page_number":19,"box":{"x":538,"y":548,"width":321,"height":12}},{"id":"aad93c9a-7e75-42c2-97f5-6d0072da5252","block_type":"box","text":"provisions described above would cause the Fund to","page_number":19,"box":{"x":117,"y":564,"width":378,"height":11}},{"id":"0844ff76-524e-425f-8b91-108259df90d7","block_type":"box","text":"be engaged in the business of underwriting, the policy","page_number":19,"box":{"x":496,"y":563,"width":387,"height":13}},{"id":"db7bd592-7f09-4e96-b4da-4a6befd28274","block_type":"box","text":"in (5) above will be interpreted not to prevent the Fund from engaging in transactions involving the","page_number":19,"box":{"x":117,"y":579,"width":698,"height":12}},{"id":"57f97f8c-ea36-4acc-b203-bef6fc8c5d42","block_type":"box","text":"acquisition or disposition of portfolio securities, re","page_number":19,"box":{"x":116,"y":594,"width":340,"height":12}},{"id":"2c0b0699-5155-4ad1-9cf5-a619a4251de9","block_type":"box","text":"regardless of whether the Fund may be considered to be an","page_number":19,"box":{"x":456,"y":594,"width":425,"height":12}},{"id":"48e14dd5-018c-4df5-8d6d-efd767eb39f1","block_type":"box","text":"underwriter under the 1933 Act or is","page_number":19,"box":{"x":117,"y":609,"width":259,"height":10}},{"id":"007fb04b-255d-4916-8d50-df8f4568344c","block_type":"box","text":"otherwise engaged in the underwriting bus","page_number":19,"box":{"x":376,"y":609,"width":302,"height":12}},{"id":"81c3e43d-a3f6-4fe1-a55b-9dbd04dd0668","block_type":"box","text":"iness to the extent permitted","page_number":19,"box":{"x":679,"y":609,"width":205,"height":12}},{"id":"285b047f-8a72-4245-882b-e3ab64ad2173","block_type":"box","text":"by applicable law.","page_number":19,"box":{"x":117,"y":625,"width":130,"height":12}},{"id":"809249a5-8a49-4081-8d6f-6f9e783a42aa","block_type":"box","text":"With respect to the fundamental policy relating to lending set forth in (7) above, the Investment","page_number":19,"box":{"x":116,"y":649,"width":706,"height":13}},{"id":"44224d78-2e47-4473-82ae-e52a1165f961","block_type":"box","text":"Company Act does not prohibit the Fund from making loans (including lending its securities); however,","page_number":19,"box":{"x":117,"y":665,"width":757,"height":12}},{"id":"25cdca74-b6e6-4212-92a5-6d56253f013c","block_type":"box","text":"SEC staff interpretations currently prohibit funds from lending more than one-third of their total assets","page_number":19,"box":{"x":116,"y":680,"width":752,"height":12}},{"id":"46977682-67c2-425f-84b1-41ec149f6370","block_type":"box","text":"(including lending its securities), except through the purchase of debt obligations or the use of","page_number":19,"box":{"x":117,"y":695,"width":695,"height":12}},{"id":"4a98ccfb-39f2-47e7-9376-fd2cca11d5ab","block_type":"box","text":"repurchase agreements. In addition, collateral arrangements with respect to options, forward currency","page_number":19,"box":{"x":117,"y":710,"width":756,"height":12}},{"id":"fb1bee73-b27a-4ac0-bf7a-17a7bbec3e36","block_type":"box","text":"and futures transactions and other derivative instruments (as applicable), as well as delays in the","page_number":19,"box":{"x":116,"y":726,"width":720,"height":12}},{"id":"e6f90317-af45-4fd2-8b50-4984d3294b1d","block_type":"box","text":"settlement of securities transactions, will not be considered loans.","page_number":19,"box":{"x":116,"y":741,"width":487,"height":11}},{"id":"05b3c47a-a05f-4cb8-9fa2-0061febad0dc","block_type":"box","text":"Non-Fundamental Investment Policies","page_number":19,"box":{"x":117,"y":766,"width":303,"height":10}},{"id":"3a23478d-c1bb-46dc-afce-1d249ecfc2ee","block_type":"box","text":"The Fund has adopted a non-fundamental investment policy, in accordance with Rule 35d-1 under the","page_number":19,"box":{"x":116,"y":786,"width":759,"height":12}},{"id":"473134f9-762a-4703-b216-fab87476bc8b","block_type":"box","text":"1940 Act, to invest, under normal circumstances, at least 80% of its net assets (plus any borrowings for","page_number":19,"box":{"x":118,"y":801,"width":766,"height":13}},{"id":"cf25c735-d97d-44c5-a38e-698d0d5fb88a","block_type":"box","text":"investment purposes),","page_number":19,"box":{"x":117,"y":817,"width":163,"height":12}},{"id":"a090da03-c010-4fc6-af2c-0888ec03a41e","block_type":"box","text":"based on notional value, in futures contracts and futures-related instruments,","page_number":19,"box":{"x":287,"y":817,"width":569,"height":11}},{"id":"6aec44b8-0a51-4311-8747-9f83b5c948ce","block_type":"box","text":"such as forward contracts. The Fund also has adopted a policy to provide its shareholders with at least","page_number":19,"box":{"x":116,"y":832,"width":768,"height":12}},{"id":"04fad6db-4136-428f-a242-688b1b92e6c8","block_type":"box","text":"60 days’ notice of any change in such policy. If, subsequent to an investment, the 80% requirement is","page_number":19,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"566ad7e4-0b38-4473-91cf-189a04b6ad23","block_type":"box","text":"no longer met, the Fund’s future investments will be made in a manner that will bring the Fund into","page_number":19,"box":{"x":117,"y":862,"width":734,"height":12}},{"id":"c12346e8-ee2f-4e43-a584-6b29729bdcfc","block_type":"box","text":"compliance with this policy.","page_number":19,"box":{"x":116,"y":878,"width":207,"height":12}},{"id":"3cb72784-2cc6-420c-ba63-ace99a3ee518","block_type":"box","text":"11","page_number":19,"box":{"x":492,"y":909,"width":14,"height":9}},{"id":"b6fdacb1-b259-4fd3-8f8a-d63961bebdbc","block_type":"box","text":"NM1026U-6030748-19/260","page_number":19,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0525390d-4560-4092-ac93-63578122efd9","block_type":"box","text":"Under its non-fundamental investment restrictions, which may be changed by the Board without","page_number":20,"box":{"x":117,"y":87,"width":714,"height":12}},{"id":"93448e8d-14ea-4a30-a746-7c605a46ce36","block_type":"box","text":"shareholder approval, the Fund may not:","page_number":20,"box":{"x":116,"y":103,"width":308,"height":12}},{"id":"cdba8a09-0e4c-4403-b904-d559300b6882","block_type":"box","text":"a. 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or other relevant life experiences.","page_number":28,"box":{"x":116,"y":504,"width":417,"height":12}},{"id":"db9f18dc-b654-4eb0-bcda-44e49a70b48d","block_type":"box","text":"Set forth below is a discussion of some of the experiences, qualifications and skills of each of the","page_number":28,"box":{"x":116,"y":535,"width":725,"height":12}},{"id":"e1d6cb29-a711-42ca-9caa-ebe6fe10420a","block_type":"box","text":"Trustees that support the conclusion that each Trustee should serve on the Board.","page_number":28,"box":{"x":116,"y":550,"width":617,"height":12}},{"id":"ba83e812-324b-4695-b1ee-27acc948e0be","block_type":"box","text":"Interested Trustees","page_number":28,"box":{"x":117,"y":581,"width":159,"height":10}},{"id":"eb777c7e-ce2b-406d-aea6-b155701e4062","block_type":"box","text":"Robert Fairbairn has more than 25 years of experience with BlackRock, Inc. and over 30 years of","page_number":28,"box":{"x":117,"y":604,"width":726,"height":13}},{"id":"a662cffe-2abe-4e97-91a1-82e519edaa6d","block_type":"box","text":"experience in finance and asset management. In particular, Mr. Fairbairn’s positions as Vice Chairman","page_number":28,"box":{"x":116,"y":620,"width":767,"height":12}},{"id":"296d7967-36c2-460f-84e1-1f476322441d","block_type":"box","text":"of BlackRock, Inc., Member of BlackRock’s Global Operating Committee and Co-Chair of BlackRock’s","page_number":28,"box":{"x":116,"y":635,"width":763,"height":13}},{"id":"0c1c21ed-502b-4bb4-9f4c-4472c6ccc655","block_type":"box","text":"Human Capital Committee provide the Board with a wealth of practical business knowledge and","page_number":28,"box":{"x":117,"y":651,"width":715,"height":12}},{"id":"518d2471-b095-46e3-89b9-44a5a87e8703","block_type":"box","text":"leadership. 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Mr. Fairbairn also serves as a board member for","page_number":28,"box":{"x":117,"y":728,"width":754,"height":13}},{"id":"4bdc7d46-a38b-4fb5-be5c-932392ec1be6","block_type":"box","text":"the funds in the BlackRock Fixed-Income Complex.","page_number":28,"box":{"x":116,"y":744,"width":380,"height":12}},{"id":"a523f961-c61c-4e31-89e1-6342537d27a5","block_type":"box","text":"John M. Perlowski’s experience as Managing Director of BlackRock, Inc. since 2009, as the Head of","page_number":28,"box":{"x":116,"y":775,"width":745,"height":12}},{"id":"1949094e-f256-4015-bd85-79344d41ca85","block_type":"box","text":"BlackRock Global Accounting and Product Services since 2009, and as President and Chief Executive","page_number":28,"box":{"x":117,"y":790,"width":759,"height":13}},{"id":"1df092e3-a7a7-4136-8766-d0c6c4a827e5","block_type":"box","text":"Officer of the BlackRock-advised Funds provides him with a strong understanding of the BlackRock","page_number":28,"box":{"x":116,"y":806,"width":743,"height":12}},{"id":"04b33137-f70a-4c4c-af1b-cd1960801f91","block_type":"box","text":"advised Funds, their operations, and the business and regulatory issues facing the BlackRock-advised","page_number":28,"box":{"x":116,"y":821,"width":760,"height":13}},{"id":"cb1eed86-c572-4f95-a153-380e1241a08e","block_type":"box","text":"Funds. Mr. Perlowski’s prior position as Managing Director and Chief Operating Officer of the Global","page_number":28,"box":{"x":117,"y":837,"width":748,"height":12}},{"id":"c048547d-fab5-42f2-ba11-cc148e269825","block_type":"box","text":"Product Group at Goldman Sachs Asset Management, and his former service as Treasurer and Senior","page_number":28,"box":{"x":117,"y":852,"width":767,"height":13}},{"id":"196e72cc-7d3b-485f-a9ab-7369f2bcfd6e","block_type":"box","text":"Vice President of the Goldman Sachs Mutual Funds and as Director of the Goldman Sachs Offshore","page_number":28,"box":{"x":116,"y":868,"width":750,"height":10}},{"id":"ff3ecb01-0e65-4613-8b73-f12baf75a44b","block_type":"box","text":"20","page_number":28,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"65e1ff22-ba3c-4d29-a509-bbbd4a786510","block_type":"box","text":"NM1026U-6030748-28/260","page_number":28,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9e99cc07-c220-40d5-8908-d4f3448bb2e7","block_type":"box","text":"Funds provides the Board with the benefit of his experience with the management practices of other","page_number":29,"box":{"x":117,"y":87,"width":745,"height":12}},{"id":"93047618-fc54-4711-92aa-f52f708975d2","block_type":"box","text":"financial companies. Mr. Perlowski also serves as a board member for the funds in the BlackRock","page_number":29,"box":{"x":116,"y":102,"width":731,"height":12}},{"id":"ad34566d-439e-4c29-90f6-44ae5bdb9bf5","block_type":"box","text":"Fixed-Income Complex. Mr. Perlowski is a member of BlackRock’s Global Executive Committee.","page_number":29,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"99587b88-be5a-40cc-8f26-c0ba01bcd049","block_type":"box","text":"Independent Trustees","page_number":29,"box":{"x":117,"y":148,"width":178,"height":12}},{"id":"2f6897fd-167c-4bf4-a152-489587ab24dd","block_type":"box","text":"Christopher Ailman has more than 30 years of experience in the financial services industry, including","page_number":29,"box":{"x":117,"y":170,"width":752,"height":12}},{"id":"f98cb76e-cc5d-4763-8ea0-247705b69bef","block_type":"box","text":"most recently serving as Chief Investment Officer of the California State Teachers Retirement System","page_number":29,"box":{"x":117,"y":186,"width":760,"height":12}},{"id":"1ce0c02f-28ec-45b8-be80-faacf8c6802d","block_type":"box","text":"(CalSTRS) from 2000 to June 2024 where he led its investment program. Mr. Ailman currently is a","page_number":29,"box":{"x":117,"y":201,"width":733,"height":12}},{"id":"f3122fe1-8f12-4bb4-abf0-0e842da51d45","block_type":"box","text":"principal at Ailman Advisers. In addition, he has held various roles in the industry, including as member","page_number":29,"box":{"x":117,"y":217,"width":768,"height":12}},{"id":"56892f9b-bc96-46d7-9b6a-a19689b36298","block_type":"box","text":"and chair of the asset owner committee of the Kroner Center for Financial Research, chairman of the","page_number":29,"box":{"x":116,"y":232,"width":754,"height":11}},{"id":"43e0c3fc-933f-4c30-8703-d70dd8542f42","block_type":"box","text":"North American Chapter of the 300 Club of Global CIOs, and co-chair of the Milken Global Capital","page_number":29,"box":{"x":117,"y":248,"width":731,"height":12}},{"id":"c0846826-e35b-459c-9095-59652ddd84f1","block_type":"box","text":"Markets Advisory Council. These positions have provided Mr. Ailman with considerable investment","page_number":29,"box":{"x":117,"y":263,"width":737,"height":12}},{"id":"cd497e83-3d6b-425d-8f5c-08492607ee01","block_type":"box","text":"expertise across asset classes and strategies, and insight and perspective on the markets and the","page_number":29,"box":{"x":116,"y":279,"width":734,"height":12}},{"id":"58a21f7e-eb23-4fa0-b3f2-1892d2ea0ef3","block_type":"box","text":"economy. In addition, Mr. Ailman serves as a member of the Governance and Nominating Committee","page_number":29,"box":{"x":116,"y":294,"width":759,"height":12}},{"id":"d0f73b9d-f068-4003-89a0-7d60d2c5cbb1","block_type":"box","text":"and the Performance Oversight Committee.","page_number":29,"box":{"x":116,"y":310,"width":329,"height":12}},{"id":"d647f0a5-8ee0-46a8-a1d6-3f3b001d858c","block_type":"box","text":"Susan J. Carter has over 35 years of experience in investment management. 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Ms. Carter also served as director of the Pacific Pension Institute from 2014 to 2018,","page_number":29,"box":{"x":117,"y":386,"width":731,"height":11}},{"id":"370e8800-1eef-415e-884c-9a384649d992","block_type":"box","text":"trustee to the Financial Accounting Foundation from 2017 to 2021, Advisory Board Member for the","page_number":29,"box":{"x":116,"y":401,"width":735,"height":12}},{"id":"d2130934-aae9-493f-9cad-ff69cddaebbd","block_type":"box","text":"Center for Private Equity and Entrepreneurship at Tuck School of Business from 1997 to 2021,","page_number":29,"box":{"x":117,"y":417,"width":707,"height":12}},{"id":"6766bdf9-450a-4ca3-8470-3c29a165c367","block_type":"box","text":"Advisory Board Member for Bridges Fund Management from 2016 to 2018, Advisory Board Member","page_number":29,"box":{"x":116,"y":432,"width":748,"height":12}},{"id":"8957ff53-8dbb-499f-b35c-4ecf307afd72","block_type":"box","text":"for Girls Who Invest from 2015 to 2018 and Board Member thereof from 2018 to 2022, and Practitioner","page_number":29,"box":{"x":116,"y":448,"width":768,"height":11}},{"id":"fd02fdce-be31-4d1a-8f1d-dc667c2e6c39","block_type":"box","text":"Advisory Board Member for PCRI from 2017 to 2024. She currently serves as Member of the","page_number":29,"box":{"x":116,"y":463,"width":694,"height":12}},{"id":"3b31516a-a773-47d0-a24d-a66b8877b723","block_type":"box","text":"President’s Counsel for Commonfund. These positions have provided her with insight and perspective","page_number":29,"box":{"x":117,"y":479,"width":761,"height":12}},{"id":"e5b6ba59-d398-4b43-95e5-6df324dad669","block_type":"box","text":"on the markets and the economy.","page_number":29,"box":{"x":116,"y":494,"width":254,"height":12}},{"id":"8b8cd93b-04bb-4f34-9da4-7efed7a61ef4","block_type":"box","text":"Collette Chilton has over 20 years of experience in investment management. She held the position of","page_number":29,"box":{"x":117,"y":524,"width":754,"height":12}},{"id":"89ab4075-164b-46b8-9e69-807f9d791440","block_type":"box","text":"Chief Investment Officer of Williams College from October 2006 to June 2023. Prior to that she was","page_number":29,"box":{"x":117,"y":539,"width":742,"height":12}},{"id":"e807e5fb-fac5-418a-abba-7e03ab7abc57","block_type":"box","text":"President and Chief Investment Officer of Lucent Asset Management Corporation, where she oversaw","page_number":29,"box":{"x":117,"y":555,"width":763,"height":12}},{"id":"c9de645a-2550-44da-b3ef-6cf8ff514171","block_type":"box","text":"approximately $40 billion in pension and retirement savings assets for the company. These positions","page_number":29,"box":{"x":116,"y":570,"width":752,"height":12}},{"id":"d6e94bc1-cae3-48b5-a65c-69270d00de08","block_type":"box","text":"have provided her with insight and perspective on the markets and the economy.","page_number":29,"box":{"x":117,"y":586,"width":604,"height":12}},{"id":"197c4a90-cbda-4cc5-bf83-2d78bcc1105a","block_type":"box","text":"Neil A. Cotty has more than 30 years of experience in the financial services industry, including 19","page_number":29,"box":{"x":117,"y":615,"width":726,"height":13}},{"id":"9e3a44f6-5209-4af3-80f7-287354214d75","block_type":"box","text":"years at Bank of America Corporation and its affiliates, where he served, at different times, as the","page_number":29,"box":{"x":116,"y":631,"width":729,"height":12}},{"id":"4e5c4895-0d29-430c-9fea-4c803fd428e0","block_type":"box","text":"Chief Financial Officer of various businesses including Investment Banking, Global Markets, Wealth","page_number":29,"box":{"x":117,"y":646,"width":743,"height":13}},{"id":"139950a0-0205-47d9-b224-718006ccc28f","block_type":"box","text":"Management and Consumer and also served ten years as the Chief Accounting Officer for Bank of","page_number":29,"box":{"x":117,"y":662,"width":733,"height":12}},{"id":"460bda3b-f849-4eaa-81da-903b18e196c9","block_type":"box","text":"America Corporation. Mr. Cotty has been determined by the Audit Committee to be an audit committee","page_number":29,"box":{"x":116,"y":677,"width":763,"height":13}},{"id":"696d3862-1d83-4e9a-8a1d-e68d19ca781d","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":29,"box":{"x":116,"y":693,"width":563,"height":12}},{"id":"90d7fcd3-4b77-444a-9abc-4d6ba5a8c314","block_type":"box","text":"Henry R. Keizer brings over 40 years of executive, financial, operational, strategic and global expertise","page_number":29,"box":{"x":117,"y":723,"width":761,"height":12}},{"id":"e75f769e-9b9f-49a3-9245-78fb23285075","block_type":"box","text":"gained through his 35 year career at KPMG, a global professional services organization and by his","page_number":29,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"6f3fc542-4943-41d8-af0b-2235bd2cb286","block_type":"box","text":"service as a director to both publicly and privately held organizations. He has extensive experience","page_number":29,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"e6d0c1a4-467f-409d-9192-3222c812d8da","block_type":"box","text":"with issues facing complex, global companies and expertise in financial reporting, accounting, auditing,","page_number":29,"box":{"x":116,"y":769,"width":762,"height":12}},{"id":"8369268b-f3fe-430e-9e18-f3cf37822831","block_type":"box","text":"risk management, and regulatory affairs for such companies. Mr. Keizer’s experience also includes","page_number":29,"box":{"x":117,"y":785,"width":733,"height":12}},{"id":"76ae0197-2a91-4442-95d1-1fad835cfaf8","block_type":"box","text":"service as an audit committee chair to both publicly and privately held organizations across numerous","page_number":29,"box":{"x":116,"y":800,"width":755,"height":12}},{"id":"0710b9d7-d415-44ea-a4cb-f76c36f909ff","block_type":"box","text":"industries including professional services, property and casualty reinsurance, insurance, diversified","page_number":29,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"00efe9ff-d3d1-43dd-b1b0-302a04518799","block_type":"box","text":"financial services, banking, direct to consumer, business to business and technology. Mr. Keizer is a","page_number":29,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"6b8795c3-2332-4f66-aa70-aab8e4ee5197","block_type":"box","text":"certified public accountant and also served on the board of the American Institute of Certified Public","page_number":29,"box":{"x":116,"y":847,"width":745,"height":12}},{"id":"8c6f8c8a-5708-48c4-ac04-b1b05b911bbb","block_type":"box","text":"Accountants. Mr. Keizer has been determined by the Audit Committee to be an audit committee","page_number":29,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"bc6eb72d-bd85-42cb-a66d-f2b49001073b","block_type":"box","text":"financial expert, as such term is defined in the applicable Commission rules.","page_number":29,"box":{"x":116,"y":878,"width":569,"height":12}},{"id":"8244f9a7-a1c1-4c21-9f70-e4d2f6421a8d","block_type":"box","text":"21","page_number":29,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"3421dbdb-d16f-42bf-82ea-922675d15b3b","block_type":"box","text":"NM1026U-6030748-29/260","page_number":29,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"07bc7354-a2bd-4eab-938d-3e3fa82e3a78","block_type":"box","text":"Cynthia A. Montgomery has served for over 20 years on the boards of registered investment","page_number":30,"box":{"x":117,"y":87,"width":690,"height":12}},{"id":"91b02a43-2742-40b4-9c0f-5f55b4bd8dba","block_type":"box","text":"companies, most recently as a member of the boards of certain BlackRock-advised Funds and","page_number":30,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"a3e54a36-d80c-481b-aacc-74dfdcc103af","block_type":"box","text":"predecessor funds, including the legacy Merrill Lynch Investment Managers, L.P. (“MLIM”) funds. The","page_number":30,"box":{"x":117,"y":118,"width":759,"height":12}},{"id":"358a8591-534f-41af-9fe9-725a36764e81","block_type":"box","text":"Board benefits from Ms. Montgomery’s more than 20 years of academic experience as a professor at","page_number":30,"box":{"x":117,"y":134,"width":755,"height":12}},{"id":"bffdfbb7-0784-4175-8670-b901c46628d3","block_type":"box","text":"Harvard Business School where she taught courses on corporate strategy and corporate governance.","page_number":30,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"d91b90d3-4fb5-4f0c-9030-14f2c3a2aeb7","block_type":"box","text":"Ms. Montgomery also has business management and corporate governance experience through her","page_number":30,"box":{"x":117,"y":165,"width":749,"height":12}},{"id":"6ca0e870-2471-4829-b14a-e3dcf0c1081f","block_type":"box","text":"service on the corporate boards of a variety of public companies. She has also authored numerous","page_number":30,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"791b4d19-6330-444f-9271-9e12ee0e76a5","block_type":"box","text":"articles and books on these topics.","page_number":30,"box":{"x":116,"y":196,"width":263,"height":11}},{"id":"df5dc3a6-5f34-4261-81f0-b9c4e7d84951","block_type":"box","text":"Donald C. Opatrny has more than 40 years of business, oversight and executive experience, including","page_number":30,"box":{"x":117,"y":227,"width":763,"height":12}},{"id":"8f751a4c-64ea-4c7b-8058-ae1bb9f717a9","block_type":"box","text":"through his service as president, director and investment committee chair for academic and","page_number":30,"box":{"x":116,"y":242,"width":684,"height":12}},{"id":"51e8a558-a8d1-4cf8-8352-934c6034de8c","block_type":"box","text":"not-for-profit organizations, and his experience as a partner, managing director and advisory director at","page_number":30,"box":{"x":117,"y":258,"width":769,"height":12}},{"id":"3fb2c9c1-afaf-45d8-bd65-831b4885a648","block_type":"box","text":"Goldman Sachs for 32 years. He also has investment management experience as a board member of","page_number":30,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"2c3b64f3-d707-4253-acb6-8a48f1194fc5","block_type":"box","text":"Athena Capital Advisors LLC.","page_number":30,"box":{"x":116,"y":289,"width":224,"height":12}},{"id":"324a61bf-228c-4cf8-bf0c-a84c27c5c0a6","block_type":"box","text":"Lori Richards has more than 30 years of experience in the financial services industry, most notably as","page_number":30,"box":{"x":117,"y":320,"width":759,"height":12}},{"id":"b36a3b84-d600-40fd-ad3b-90f37d0fdb97","block_type":"box","text":"the first Director of the Office of Compliance Inspections and Examinations (“OCIE”) of the SEC from","page_number":30,"box":{"x":116,"y":335,"width":752,"height":12}},{"id":"51ff252d-eac2-427e-a9f0-53da4b70c6bc","block_type":"box","text":"1995 to 2009. During 14 years as the Director of OCIE, she led the SEC’s nationwide examination","page_number":30,"box":{"x":118,"y":351,"width":731,"height":12}},{"id":"f84ec03f-ef69-4260-8af2-33f453944f28","block_type":"box","text":"oversight program for advisers, mutual funds, hedge funds, broker-dealers, stock exchanges, and","page_number":30,"box":{"x":116,"y":366,"width":730,"height":12}},{"id":"a2872c98-d975-4db2-a447-119b9b572f48","block_type":"box","text":"other industry firms. Prior to that, from 1985 to 1995, she held various roles at the SEC, including","page_number":30,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"c98b3f08-0f30-4c5b-99a6-96a3f3bb71db","block_type":"box","text":"Associate Director for Enforcement for the SEC’s Pacific Regional Office and executive assistant and","page_number":30,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"f3ed9857-5262-4337-8203-9dd631337a11","block_type":"box","text":"senior advisor to then SEC Chairman Arthur Levitt. More recently, Ms. Richards served as Chief","page_number":30,"box":{"x":116,"y":413,"width":718,"height":12}},{"id":"0e53f094-bcaa-4457-990f-05a943bb1797","block_type":"box","text":"Compliance Officer of the Asset and Wealth Management global lines of business at JPMorgan","page_number":30,"box":{"x":117,"y":428,"width":712,"height":12}},{"id":"f69e020c-4cc8-42f1-bd37-c3ff5a90a0b2","block_type":"box","text":"Chase & Co. from 2013 to 2018 where she led its global compliance program, advised business","page_number":30,"box":{"x":117,"y":444,"width":716,"height":12}},{"id":"4cf7303d-1d91-4dab-92e9-77bffdcf5aeb","block_type":"box","text":"leaders on compliance issues, oversaw risk assessment, monitoring, testing and training, and","page_number":30,"box":{"x":117,"y":459,"width":699,"height":12}},{"id":"a400ad8d-f438-4078-b56f-d0c617e87f03","block_type":"box","text":"maintained relationships with regulators. In addition, Ms. Richards served as a member of the National","page_number":30,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"2824e88d-b15e-4970-9276-a3a1dc29bd3b","block_type":"box","text":"Adjudicatory Council of the Financial Industry Regulatory Authority (FINRA) from 2019 to 2022 and","page_number":30,"box":{"x":116,"y":490,"width":739,"height":12}},{"id":"2cdf0841-18fe-4e36-9a21-62555da66e51","block_type":"box","text":"held the chair and vice chair posts during her tenure. Prior thereto, from 2010 to 2013, she was a","page_number":30,"box":{"x":117,"y":506,"width":724,"height":12}},{"id":"0c9b7878-7fc1-400a-9111-738efc6ea3e5","block_type":"box","text":"Principal at PricewaterhouseCoopers LLP (“PwC”) and co-leader of its Asset Management Regulatory","page_number":30,"box":{"x":117,"y":521,"width":761,"height":12}},{"id":"2c25b489-b0c0-48fe-b40a-870f7231aa21","block_type":"box","text":"group. At PwC, she assisted a broad range of financial services clients in designing and implementing","page_number":30,"box":{"x":116,"y":537,"width":761,"height":12}},{"id":"cfa0a91d-667d-43a3-8084-81c8af309695","block_type":"box","text":"risk management and compliance programs, and preparing for new regulatory expectations. These","page_number":30,"box":{"x":117,"y":552,"width":739,"height":12}},{"id":"5e6b72a6-59ab-4d83-8801-1d93497091f3","block_type":"box","text":"positions have provided her with insight and perspective on the markets and the economy, as well as","page_number":30,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"3e4b4602-dd34-4466-95a0-37d0e1693ad1","block_type":"box","text":"asset management regulation and compliance. In addition, Ms. Richards serves as a member of the","page_number":30,"box":{"x":116,"y":583,"width":747,"height":12}},{"id":"dfe9d279-cdbd-4317-90d7-ca0960f9f35f","block_type":"box","text":"Audit Committee and the Compliance Committee.","page_number":30,"box":{"x":116,"y":599,"width":374,"height":12}},{"id":"3108d8f4-0df2-408d-a55e-7b087ccdea9b","block_type":"box","text":"Mark Stalnecker has gained a wealth of experience in investing and asset management from his over","page_number":30,"box":{"x":117,"y":630,"width":757,"height":12}},{"id":"08290db6-fba2-4d93-8694-2969474f742c","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":30,"box":{"x":118,"y":645,"width":743,"height":12}},{"id":"5be7874d-9081-4ced-862f-cfebb9c7e729","block_type":"box","text":"various positions with First Union Corporation, including Senior Vice President and State Investment","page_number":30,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"2aa474bf-e082-467e-bd03-68f00f64efd3","block_type":"box","text":"Director of First Investment Advisors. The Board benefits from his experience and perspective as the","page_number":30,"box":{"x":117,"y":676,"width":747,"height":12}},{"id":"5fc6720a-005e-4cea-aaf7-13980d650d8d","block_type":"box","text":"Chief Investment Officer of a university endowment and from the oversight experience he gained from","page_number":30,"box":{"x":117,"y":692,"width":755,"height":12}},{"id":"c1504916-dde9-472e-821e-1969be4cad98","block_type":"box","text":"service on various private and non-profit boards.","page_number":30,"box":{"x":116,"y":707,"width":358,"height":12}},{"id":"50e5a8ea-395a-44b5-a77a-6ad29645bc94","block_type":"box","text":"Kenneth L. Urish has served for over 15 years on the boards of registered investment companies, most","page_number":30,"box":{"x":117,"y":738,"width":766,"height":12}},{"id":"8a344ce7-1ab7-4ffb-b377-15354e94f5b2","block_type":"box","text":"recently as a member of the boards of certain BlackRock-advised Funds and predecessor funds,","page_number":30,"box":{"x":117,"y":754,"width":716,"height":12}},{"id":"b53c9606-9379-4e9c-89f2-4d2633af5eb9","block_type":"box","text":"including the legacy BlackRock funds. He has over 30 years of experience in public accounting.","page_number":30,"box":{"x":117,"y":769,"width":707,"height":12}},{"id":"3e22c2b0-aae9-4aea-ade6-481335905c36","block_type":"box","text":"Mr. Urish has served as a managing member of an accounting and consulting firm. Mr. Urish has been","page_number":30,"box":{"x":117,"y":785,"width":760,"height":12}},{"id":"2d275c97-f02a-4ace-ba43-1229faaf6854","block_type":"box","text":"determined by the Audit Committee to be an audit committee financial expert, as such term is defined","page_number":30,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"e09d9a63-1f9d-48cc-a984-cc49a1c8b48b","block_type":"box","text":"in the applicable Commission rules.","page_number":30,"box":{"x":117,"y":816,"width":262,"height":12}},{"id":"9e17cbe1-aea8-4327-8e66-96cba63be6b8","block_type":"box","text":"Claire A. Walton has over 25 years of experience in investment management. She has served as the","page_number":30,"box":{"x":117,"y":847,"width":753,"height":12}},{"id":"4c14d1a3-2e17-47ae-a0b4-a188d7fe4c77","block_type":"box","text":"Chief Operating Officer and Chief Financial Officer of Liberty Square Asset Management, LP from","page_number":30,"box":{"x":117,"y":862,"width":730,"height":12}},{"id":"62f12740-f075-4d23-9d54-821ae05e58dd","block_type":"box","text":"1998 to 2015, an investment manager that specialized in long/short non-U.S. equity investments, and","page_number":30,"box":{"x":118,"y":878,"width":756,"height":12}},{"id":"2d52cc5b-6511-42c4-935d-9432f362c7e5","block_type":"box","text":"22","page_number":30,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"cf44334a-fd88-4aa9-bcb9-f28ad23a9570","block_type":"box","text":"NM1026U-6030748-30/260","page_number":30,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f4bdee44-09d7-4fe7-bfd2-186ceded3fc5","block_type":"box","text":"was an owner and General Partner of Neon Liberty Capital Management, LLC from 2003 to 2023, a","page_number":31,"box":{"x":116,"y":87,"width":745,"height":12}},{"id":"09735bf5-0fbd-4f6b-9820-d7955891695f","block_type":"box","text":"firm focusing on long/short equities in global emerging and frontier markets. These positions have","page_number":31,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"45b4e022-398b-4417-b9a1-bfba02094672","block_type":"box","text":"provided her with insight and perspective on the markets and the economy. Ms. Walton has been","page_number":31,"box":{"x":117,"y":118,"width":726,"height":12}},{"id":"fe4e13e0-0853-4d50-a78a-eafee9cb2005","block_type":"box","text":"determined by the Audit Committee to be an audit committee financial expert, as such term is defined","page_number":31,"box":{"x":116,"y":134,"width":758,"height":12}},{"id":"18e8e120-51ac-4951-bac4-80ce74228bda","block_type":"box","text":"in the applicable Commission rules.","page_number":31,"box":{"x":117,"y":149,"width":268,"height":12}},{"id":"c3c28b81-7d51-4a5b-98da-75560146ce8e","block_type":"box","text":"Board – Leadership Structure and Oversight Responsibilities","page_number":31,"box":{"x":117,"y":178,"width":454,"height":12}},{"id":"b3961877-faec-4c18-98bc-2a87baa7cc93","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":31,"box":{"x":116,"y":201,"width":770,"height":12}},{"id":"60b963ee-a0e6-448c-9c5d-f07302f9a5f2","block_type":"box","text":"is an Independent Trustee, and the Chair of each Committee is an Independent Trustee. The Board","page_number":31,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"7b2305bd-c889-4b6f-8a77-30d66bf3d5a5","block_type":"box","text":"has five standing Committees: an Audit Committee, a Governance and Nominating Committee, a","page_number":31,"box":{"x":117,"y":232,"width":724,"height":12}},{"id":"729c8ea1-b20e-4610-a88f-bd9befa3e2fc","block_type":"box","text":"Compliance Committee, a Performance Oversight Committee and an Ad Hoc Topics Committee. The","page_number":31,"box":{"x":117,"y":247,"width":756,"height":12}},{"id":"c351be98-ae0f-43ef-a8a1-6a02bef11e95","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":31,"box":{"x":117,"y":263,"width":727,"height":12}},{"id":"04bbbce3-fa3d-4f47-b504-c4a7d97833f2","block_type":"box","text":"service providers, officers, attorneys and other Trustees generally between meetings. The Chair of","page_number":31,"box":{"x":116,"y":278,"width":736,"height":12}},{"id":"cfaac12d-c3f3-4d69-b55e-c68fdae12a70","block_type":"box","text":"each Committee performs a similar role with respect to the Committee. The Chair of the Board or the","page_number":31,"box":{"x":116,"y":294,"width":753,"height":12}},{"id":"6eaa6ba1-22a9-40e7-9a8e-47959f9bd3ad","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":31,"box":{"x":117,"y":309,"width":762,"height":12}},{"id":"d59030fa-f72b-47ad-b6f0-1437b30d32cb","block_type":"box","text":"Committee from time to time. The Independent Trustees meet regularly outside the presence of Fund","page_number":31,"box":{"x":117,"y":325,"width":756,"height":12}},{"id":"679bb23f-f78e-4803-b2cc-602406ba4a79","block_type":"box","text":"management, in executive session or with other service providers to the Fund. The Board has regular","page_number":31,"box":{"x":117,"y":340,"width":758,"height":12}},{"id":"fa110e6e-c1d1-43e9-8e4c-9af419387bf8","block_type":"box","text":"meetings five times a year, and may hold special meetings if required before its next regular meeting.","page_number":31,"box":{"x":117,"y":356,"width":756,"height":12}},{"id":"7ad220d5-02d2-4d39-b1aa-bafde250b0d3","block_type":"box","text":"Each Committee meets regularly to conduct the oversight functions delegated to that Committee by the","page_number":31,"box":{"x":117,"y":371,"width":770,"height":12}},{"id":"1850c8ee-3881-4e94-94dd-025ad7568cbc","block_type":"box","text":"Board and reports its findings to the Board. The Board and each standing Committee conduct annual","page_number":31,"box":{"x":117,"y":387,"width":754,"height":12}},{"id":"0961ace7-275c-4efa-97c7-90333735a49e","block_type":"box","text":"assessments of their oversight function and structure. The Board has determined that the Board’s","page_number":31,"box":{"x":116,"y":402,"width":730,"height":12}},{"id":"789de96f-3ff3-47fb-9c60-66c36e8989eb","block_type":"box","text":"leadership structure is appropriate because it allows the Board to exercise independent judgment over","page_number":31,"box":{"x":117,"y":418,"width":763,"height":12}},{"id":"c9be69da-8d89-4f8b-80e4-e2842f1b9f9e","block_type":"box","text":"management and to allocate areas of responsibility among Committees and the full Board to enhance","page_number":31,"box":{"x":117,"y":433,"width":758,"height":12}},{"id":"c65c78db-d1b4-4feb-92b4-515885a725f8","block_type":"box","text":"effective oversight.","page_number":31,"box":{"x":116,"y":449,"width":145,"height":12}},{"id":"ff180b93-9160-4558-893d-3216623de023","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":31,"box":{"x":116,"y":478,"width":763,"height":12}},{"id":"91b9c408-8f5c-49df-be5d-7c1dbe70dcd8","block_type":"box","text":"overseeing BFA, other service providers, the operations of the Fund and associated risks in","page_number":31,"box":{"x":116,"y":493,"width":685,"height":13}},{"id":"1c55bb4a-1ec2-4ee1-a3e6-355b5af8b61d","block_type":"box","text":"accordance with the provisions of the 1940 Act, state law, other applicable laws, the Trust’s charter,","page_number":31,"box":{"x":116,"y":509,"width":744,"height":12}},{"id":"44ae4c02-f50b-4dea-9dc0-ec33bb79668d","block_type":"box","text":"and the Fund’s investment objective and strategies. The Board reviews, on an ongoing basis, the","page_number":31,"box":{"x":116,"y":525,"width":726,"height":12}},{"id":"c2267303-e866-470e-85e8-a7c8a00d709f","block_type":"box","text":"Fund’s performance, operations and investment strategies and techniques. The Board also conducts","page_number":31,"box":{"x":117,"y":540,"width":752,"height":12}},{"id":"20910c44-df48-435d-b95f-c3e30b53120c","block_type":"box","text":"reviews of BFA and its role in running the operations of the Fund.","page_number":31,"box":{"x":117,"y":555,"width":488,"height":13}},{"id":"a1205618-90a0-4343-920f-a8c2d4727976","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":31,"box":{"x":117,"y":585,"width":765,"height":12}},{"id":"92123fe2-eac6-414f-bf2a-205b60e8ac61","block_type":"box","text":"other service providers (depending on the nature of the risk), subject to the supervision of BFA. The","page_number":31,"box":{"x":116,"y":600,"width":745,"height":12}},{"id":"df1d39f1-7a1f-4bf5-8862-c13a5922df49","block_type":"box","text":"Fund is subject to a number of risks, including investment, compliance, operational and valuation risks,","page_number":31,"box":{"x":117,"y":616,"width":767,"height":12}},{"id":"b75d4453-6af8-424b-a9e9-0e8f685fe739","block_type":"box","text":"among others. While there are a number of risk management functions performed by BFA and the","page_number":31,"box":{"x":116,"y":631,"width":734,"height":12}},{"id":"2f00ead8-4539-4cb5-bc2e-2799b82f8ecb","block_type":"box","text":"sub-advisers or other service providers, as applicable, it is not possible to eliminate all of the risks","page_number":31,"box":{"x":116,"y":647,"width":729,"height":12}},{"id":"49c3408b-1613-487d-b2e4-5b94db3eb680","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":31,"box":{"x":116,"y":662,"width":742,"height":12}},{"id":"b79e5282-daea-467d-be78-115b083805b8","block_type":"box","text":"addressed as part of various Board and Committee activities. The Board, directly or through a","page_number":31,"box":{"x":116,"y":678,"width":695,"height":12}},{"id":"3636a00d-dc73-4d59-b310-3a2743e74e04","block_type":"box","text":"Committee, also reviews reports from, among others, management, the independent registered public","page_number":31,"box":{"x":117,"y":693,"width":756,"height":12}},{"id":"e8780f2d-afab-47f8-8d09-40433bb82565","block_type":"box","text":"accounting firm for the Fund, sub-advisers and internal auditors for BFA or its affiliates, as appropriate,","page_number":31,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"66c369a5-2504-4acd-a090-d03f2f47a053","block_type":"box","text":"regarding risks faced by the Fund and management’s or the service provider’s risk functions. The","page_number":31,"box":{"x":117,"y":724,"width":721,"height":12}},{"id":"b7d1d32b-29f2-496e-806b-26f4992b0c99","block_type":"box","text":"Committee system facilitates the timely and efficient consideration of matters by the Trustees, and","page_number":31,"box":{"x":117,"y":740,"width":727,"height":12}},{"id":"b8a91278-c276-433c-b585-d84836f67c09","block_type":"box","text":"facilitates effective oversight of compliance with legal and regulatory requirements and of the Fund’s","page_number":31,"box":{"x":116,"y":755,"width":743,"height":12}},{"id":"fc326a6d-87a1-46bf-ad50-67a2f1352e9d","block_type":"box","text":"activities and associated risks. The Board has appointed a Chief Compliance Officer, who oversees the","page_number":31,"box":{"x":116,"y":771,"width":766,"height":12}},{"id":"be7cbe43-8d9f-482b-8f82-99224778c5a7","block_type":"box","text":"implementation and testing of the Trust’s compliance program and reports to the Board regarding","page_number":31,"box":{"x":117,"y":786,"width":720,"height":12}},{"id":"0b864e5a-624b-4822-a2d6-e73343909f56","block_type":"box","text":"compliance matters for the Fund and its service providers. The Independent Trustees have engaged","page_number":31,"box":{"x":116,"y":802,"width":744,"height":12}},{"id":"f825d9d5-5813-406c-8549-31a045cc096e","block_type":"box","text":"independent legal counsel to assist them in performing their oversight responsibilities.","page_number":31,"box":{"x":117,"y":817,"width":634,"height":12}},{"id":"0d3286d4-ee9c-436b-8cbe-21b937d64f51","block_type":"box","text":"Committees of the Board of Trustees.","page_number":31,"box":{"x":116,"y":847,"width":299,"height":9}},{"id":"df7e027d-97a5-426f-9a25-e48710ba6437","block_type":"box","text":"The members of the Audit Committee (the “Audit Committee”)","page_number":31,"box":{"x":416,"y":847,"width":469,"height":12}},{"id":"75294111-9206-4da9-920f-23d096a84035","block_type":"box","text":"are Henry R. Keizer (Chair), Neil A. Cotty, Lori Richards, Kenneth L. Urish and Claire A. Walton, all of","page_number":31,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"a20ab9db-8abf-4982-be56-f56d43bb909a","block_type":"box","text":"whom are Independent Trustees. The principal responsibilities of the Audit Committee are to approve,","page_number":31,"box":{"x":116,"y":878,"width":761,"height":12}},{"id":"aa2987cf-bb44-436d-a424-ce49e2c80f1f","block_type":"box","text":"23","page_number":31,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b9d08e7a-757d-4c52-96b0-890b6aae3664","block_type":"box","text":"NM1026U-6030748-31/260","page_number":31,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"8f9f682b-fb92-4cd1-a0b9-6a889eff75ea","block_type":"box","text":"and recommend to the full Board for approval, the selection, retention, termination and compensation","page_number":32,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"ccc2a9c7-ca71-43f4-885e-36f04e21ca60","block_type":"box","text":"of the Fund’s independent registered public accounting firm (the “Independent Registered Public","page_number":32,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"e4f79571-0202-4130-b023-3b6d63bb2986","block_type":"box","text":"Accounting Firm”) and to oversee the Independent Registered Public Accounting Firm’s work. The","page_number":32,"box":{"x":116,"y":118,"width":733,"height":12}},{"id":"003f73b7-8aa2-4044-b9ee-aa3877bf2f95","block_type":"box","text":"Audit Committee’s responsibilities include, without limitation, to (1) evaluate the qualifications and","page_number":32,"box":{"x":116,"y":134,"width":727,"height":12}},{"id":"4dd6e8ec-81c6-4324-9c7f-a6e23062d23d","block_type":"box","text":"independence of the Independent Registered Public Accounting Firm; (2) approve all audit","page_number":32,"box":{"x":117,"y":149,"width":675,"height":12}},{"id":"67d652ef-edda-4408-8c65-5edafd441a1a","block_type":"box","text":"engagement terms and fees for the Fund; (3) review the conduct and results of each independent audit","page_number":32,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"e00e8859-9f03-4484-b233-91957a80820c","block_type":"box","text":"of the Fund’s annual financial statements; (4) review any issues raised by the Independent Registered","page_number":32,"box":{"x":116,"y":180,"width":763,"height":12}},{"id":"2b3b1833-ba1a-46af-9b00-5476b84d9894","block_type":"box","text":"Public Accounting Firm or Fund management regarding the accounting or financial reporting policies","page_number":32,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"a039eaaa-0b1b-44dc-895a-46c38b0429dd","block_type":"box","text":"and practices of the Fund and the internal controls of the Fund and certain service providers;","page_number":32,"box":{"x":116,"y":211,"width":693,"height":12}},{"id":"98aa3b1b-6407-4991-b21d-40b4a07e0048","block_type":"box","text":"(5) oversee the performance of the Fund’s Independent Registered Public Accounting Firm; (6) review","page_number":32,"box":{"x":117,"y":227,"width":762,"height":12}},{"id":"593f00a6-171c-41e3-a204-b1e9d7a52568","block_type":"box","text":"and discuss with management and the Fund’s Independent Registered Public Accounting Firm the","page_number":32,"box":{"x":116,"y":242,"width":736,"height":12}},{"id":"8b39698d-5c25-422a-b53e-aa5db8821ac0","block_type":"box","text":"performance and findings of the Fund’s internal auditors; (7) discuss with Fund management its","page_number":32,"box":{"x":117,"y":258,"width":713,"height":12}},{"id":"ad1d4187-f4cf-4f44-8a4d-b188a7071bb3","block_type":"box","text":"policies regarding risk assessment and risk management as such matters relate to the Fund’s financial","page_number":32,"box":{"x":117,"y":273,"width":766,"height":12}},{"id":"36e37da3-0e34-436e-81ad-d1b6fd6e5cae","block_type":"box","text":"reporting and controls; (8) resolve any disagreements between Fund management and the","page_number":32,"box":{"x":117,"y":289,"width":677,"height":12}},{"id":"3aba8087-1a5c-426e-81d4-03ee182e0234","block_type":"box","text":"Independent Registered Public Accounting Firm regarding financial reporting; and (9) undertake such","page_number":32,"box":{"x":117,"y":304,"width":755,"height":12}},{"id":"f75a853a-2786-4135-a5b9-ac7db138a2ac","block_type":"box","text":"other duties and responsibilities as may from time to time be delegated by the Board to the Audit","page_number":32,"box":{"x":116,"y":320,"width":721,"height":12}},{"id":"4cd8473e-f1df-4154-a1fc-c332d30488e7","block_type":"box","text":"Committee. The Board has adopted a written charter for the Audit Committee. During the twelve","page_number":32,"box":{"x":117,"y":335,"width":717,"height":12}},{"id":"3ad2e0a3-a458-4432-aa7f-5c196ea01e53","block_type":"box","text":"months ended October 31, 2025, the Audit Committee met four times.","page_number":32,"box":{"x":117,"y":351,"width":523,"height":11}},{"id":"46470922-f338-4f44-b5c4-2bdcd1838e06","block_type":"box","text":"The members of the Governance and Nominating Committee (the “Governance Committee”) are","page_number":32,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"e2702b96-2149-44eb-b682-764d97e1c354","block_type":"box","text":"Cynthia A. Montgomery (Chair), Christopher J. Ailman, Susan J. Carter, Collette Chilton and Henry R.","page_number":32,"box":{"x":117,"y":397,"width":759,"height":12}},{"id":"93551f5e-ef7d-4001-858a-a2810ba91c2f","block_type":"box","text":"Keizer, all of whom are Independent Trustees. The principal responsibilities of the Governance","page_number":32,"box":{"x":117,"y":413,"width":707,"height":12}},{"id":"0bcc59fc-9ce9-46f1-ad43-e9a29bf2d387","block_type":"box","text":"Committee are to (1) identify individuals qualified to serve as Independent Trustees of the Trust and","page_number":32,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"1c7604d0-7e87-4cc0-8da2-5de7795f8412","block_type":"box","text":"recommend Independent Trustee nominees for election by shareholders or appointment by the Board;","page_number":32,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"d694eaa4-c41e-418f-bc59-ab1b4973930e","block_type":"box","text":"(2) advise the Board with respect to Board composition, procedures and committees (other than the","page_number":32,"box":{"x":117,"y":459,"width":744,"height":12}},{"id":"00e0271a-5d1a-4ea6-be77-a9436091a453","block_type":"box","text":"Audit Committee); (3) oversee periodic self-assessments of the Board and committees of the Board","page_number":32,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"6c00ef84-a39f-4398-859b-1e46a2736ac8","block_type":"box","text":"(other than the Audit Committee); (4) review and make recommendations regarding Independent","page_number":32,"box":{"x":117,"y":490,"width":722,"height":12}},{"id":"cfce4504-610c-41b8-b1d8-ff52d45305c5","block_type":"box","text":"Trustee compensation; (5) monitor corporate governance matters and develop appropriate","page_number":32,"box":{"x":116,"y":506,"width":677,"height":12}},{"id":"a2ae426e-ce11-4d45-91f3-38a5d3e8e3a7","block_type":"box","text":"recommendations to the Board; (6) act as the administrative committee with respect to Board policies","page_number":32,"box":{"x":117,"y":521,"width":756,"height":12}},{"id":"6438d082-88f6-4361-ad9c-bd0a2199bd51","block_type":"box","text":"and procedures, committee policies and procedures (other than the Audit Committee) and codes of","page_number":32,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"49e7d27f-5897-4f2d-a827-24feb5247e62","block_type":"box","text":"ethics as they relate to Independent Trustees; and (7) undertake such other duties and responsibilities","page_number":32,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"77dd936d-3820-4120-8632-b187d47aa77c","block_type":"box","text":"as may from time to time be delegated by the Board to the Governance Committee. The Governance","page_number":32,"box":{"x":116,"y":568,"width":755,"height":12}},{"id":"4f398797-ddaa-4825-8eb3-a161139c7883","block_type":"box","text":"Committee may consider nominations for Trustees made by the Fund’s shareholders as it deems","page_number":32,"box":{"x":117,"y":583,"width":725,"height":12}},{"id":"c6e73873-f422-4d19-9943-6bba53b47723","block_type":"box","text":"appropriate. Under the Trust’s Bylaws, shareholders must follow certain procedures to nominate a","page_number":32,"box":{"x":116,"y":599,"width":732,"height":12}},{"id":"63a9106a-9ea5-403c-bf87-5e77ebba0f32","block_type":"box","text":"person for election as a Trustee at a shareholder meeting at which Trustees are to be elected. Under","page_number":32,"box":{"x":117,"y":614,"width":753,"height":12}},{"id":"00ac0af9-783a-4a54-97f3-da041b3339f9","block_type":"box","text":"these advance notice procedures, shareholders must submit the proposed nominee by delivering a","page_number":32,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"e45559c1-496f-4a4f-998c-f2369a88f19f","block_type":"box","text":"notice to the Secretary of the Trust at its principal executive offices no earlier than the 150th day prior","page_number":32,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"31d0247e-66d1-49ed-b6e7-13c8630b0b84","block_type":"box","text":"to such meeting and not later than 5:00 p.m., Eastern Time, on the later of the 120th day prior to such","page_number":32,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"47e13aa3-537a-492f-bdb2-739ec42decf3","block_type":"box","text":"meeting or the tenth day following the day on which public announcement is first made of the date of","page_number":32,"box":{"x":117,"y":676,"width":745,"height":12}},{"id":"386d081c-bee4-48db-a3b6-40579fe744ff","block_type":"box","text":"such meeting. The Trust’s Bylaws provide that notice of a proposed nomination must include certain","page_number":32,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"deb94e8a-297a-475f-9b04-006d59424b9a","block_type":"box","text":"information about the shareholder and the nominee, as well as certain other information, including a","page_number":32,"box":{"x":117,"y":707,"width":739,"height":12}},{"id":"4ed7018d-4b1a-46ae-8603-d8308de6d00d","block_type":"box","text":"written consent of the proposed nominee to serve if elected. Reference is made to the Trust’s Bylaws","page_number":32,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"2009ee7e-3143-4ddc-9517-29cf34086a86","block_type":"box","text":"for more details. The Board has adopted a written charter for the Governance Committee. During the","page_number":32,"box":{"x":116,"y":738,"width":748,"height":12}},{"id":"a72ee765-27b2-4b08-a23c-70529f2bf78b","block_type":"box","text":"twelve months ended October 31, 2025, the Governance Committee met ten times.","page_number":32,"box":{"x":116,"y":754,"width":618,"height":11}},{"id":"e1dda206-1ce8-4635-9720-bc84390436ab","block_type":"box","text":"The members of the Compliance Committee (the “Compliance Committee”) are Claire A. Walton","page_number":32,"box":{"x":116,"y":785,"width":714,"height":12}},{"id":"f34d6468-7cb3-4b0d-b547-7d96835cb54b","block_type":"box","text":"(Chair), Cynthia A. Montgomery, Donald C. Opatrny, Lori Richards and Kenneth L. Urish, all of whom","page_number":32,"box":{"x":117,"y":800,"width":749,"height":12}},{"id":"147fccb0-6707-481b-9c1e-71928cf139fe","block_type":"box","text":"are Independent Trustees. The Compliance Committee’s purpose is to assist the Board in fulfilling its","page_number":32,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"bc0b9bc8-8042-4331-b144-765ee7bc3692","block_type":"box","text":"responsibility to oversee regulatory and fiduciary compliance matters involving the Trust, the fund","page_number":32,"box":{"x":117,"y":831,"width":726,"height":12}},{"id":"8b54250d-3a04-4c57-bfb6-ec3e338e3e71","block_type":"box","text":"related activities of BFA and any sub-adviser and the Trust’s third-party service providers. 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BlackRock may, in certain","page_number":36,"box":{"x":482,"y":754,"width":387,"height":12}},{"id":"1dba5abd-e469-4a74-86e2-cf5174414bd3","block_type":"box","text":"cases, elect to implement internal policies and","page_number":36,"box":{"x":116,"y":769,"width":334,"height":12}},{"id":"f34a4f08-7d8b-4cfb-9859-fd665d7d977a","block_type":"box","text":"procedures designed to limit such consequences, which","page_number":36,"box":{"x":457,"y":769,"width":405,"height":12}},{"id":"d609cdc0-b3d2-4246-8695-e9e7bd88c6c1","block_type":"box","text":"may cause the Fund to be unable to engage in certain activities, including purchasing or disposing of","page_number":36,"box":{"x":117,"y":785,"width":731,"height":12}},{"id":"f9b59df1-36a9-4055-81a0-15c8a88b2566","block_type":"box","text":"securities, when it might otherwise be desirable for it","page_number":36,"box":{"x":116,"y":800,"width":381,"height":12}},{"id":"bc6a3d70-a96d-48b3-869c-d3087c66a947","block_type":"box","text":"to do so. Conflicts may also arise because portfolio","page_number":36,"box":{"x":501,"y":800,"width":371,"height":12}},{"id":"1e518434-1920-44da-9ccf-ca166754cd11","block_type":"box","text":"decisions regarding the Fund may benefit other account","page_number":36,"box":{"x":116,"y":816,"width":406,"height":12}},{"id":"07fe3247-2df8-41be-a154-7638cd3caf2e","block_type":"box","text":"s managed by BlackRock. For example, the sale","page_number":36,"box":{"x":522,"y":816,"width":353,"height":12}},{"id":"36835927-b579-402a-922a-c262086cf93e","block_type":"box","text":"of a long position or establishment of a short pos","page_number":36,"box":{"x":116,"y":831,"width":353,"height":12}},{"id":"f6b5dba9-6158-465c-b6f3-a32d7f852f28","block_type":"box","text":"ition by the Fund may impair the price of the same","page_number":36,"box":{"x":471,"y":831,"width":368,"height":12}},{"id":"d048e514-6b3c-4673-a532-1e0ce571c9f5","block_type":"box","text":"security sold short by (and therefore benefit) BlackR","page_number":36,"box":{"x":116,"y":847,"width":378,"height":12}},{"id":"a37dd899-3b47-4528-a0c0-31a935a73b3c","block_type":"box","text":"ock or its other accounts or funds, and the purchase","page_number":36,"box":{"x":495,"y":847,"width":383,"height":12}},{"id":"4ed8deb5-7871-419a-bbda-47b8378c4d8c","block_type":"box","text":"of a security or covering of a short position in a se","page_number":36,"box":{"x":116,"y":862,"width":361,"height":12}},{"id":"e48204d5-308b-40f8-8b01-901df47292a9","block_type":"box","text":"curity by the Fund may increase the price of the same","page_number":36,"box":{"x":478,"y":862,"width":396,"height":12}},{"id":"f4cfddb1-d6e8-427f-a812-c4962a3e098a","block_type":"box","text":"security held by (and therefore benefit) Bla","page_number":36,"box":{"x":116,"y":878,"width":309,"height":12}},{"id":"09266e39-1fac-4739-8322-6f48e40c715f","block_type":"box","text":"ckRock or its other accounts or funds.","page_number":36,"box":{"x":426,"y":878,"width":280,"height":9}},{"id":"6692484d-18f1-43b9-a902-5f54b79bc4a6","block_type":"box","text":"28","page_number":36,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"70df06ff-2645-40e0-afdb-60544289ec93","block_type":"box","text":"NM1026U-6030748-36/260","page_number":36,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"431c9922-cd18-4541-a2b8-62071e34c918","block_type":"box","text":"BlackRock, on behalf of other client accounts, on the one hand, and the Fund, on the other hand, may","page_number":37,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"383ae6a1-1456-442f-a04d-01cceca77130","block_type":"box","text":"invest in or extend credit to different parts of the capital structure of a single issuer. BlackRock may","page_number":37,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"da6550ee-27a8-447e-ae27-132aa28ef484","block_type":"box","text":"pursue rights, provide advice or engage in other activities, or refrain from pursuing rights, providing","page_number":37,"box":{"x":117,"y":118,"width":737,"height":12}},{"id":"7f9170e2-36f4-48e5-9ba6-f57930b3d142","block_type":"box","text":"advice or engaging in other activities, on behalf of other clients with respect to an issuer in which the","page_number":37,"box":{"x":116,"y":134,"width":749,"height":12}},{"id":"e5d93590-319a-4933-a1bf-57138a1b3a13","block_type":"box","text":"Fund has invested, and such actions (or refraining from action) may have a material adverse effect on","page_number":37,"box":{"x":117,"y":149,"width":761,"height":12}},{"id":"c57dc80a-69fa-4398-a65b-165b54f730b1","block_type":"box","text":"the Fund. In situations in which clients of BlackRock (including the Fund) hold positions in multiple","page_number":37,"box":{"x":116,"y":165,"width":732,"height":12}},{"id":"38dd438d-232e-499f-9c7c-5627d2a0038b","block_type":"box","text":"parts of the capital structure of an issuer, BlackRock may not pursue certain actions or remedies that","page_number":37,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"f64ba199-8040-46eb-81f6-9328e31560de","block_type":"box","text":"may be available to the Fund, as a result of legal and regulatory requirements or otherwise. BlackRock","page_number":37,"box":{"x":117,"y":196,"width":766,"height":12}},{"id":"8298a0ea-613b-43f8-80dc-88a5bd089cf8","block_type":"box","text":"addresses these and other potential conflicts of interest based on the facts and circumstances of","page_number":37,"box":{"x":116,"y":211,"width":722,"height":12}},{"id":"49cb6ca7-0014-49b0-8589-baee1685ca6f","block_type":"box","text":"particular situations. For example, BlackRock may determine to rely on information barriers between","page_number":37,"box":{"x":117,"y":227,"width":748,"height":12}},{"id":"3e643e72-7612-4e4e-a8db-4c84668093ef","block_type":"box","text":"different business units or portfolio management teams. BlackRock may also determine to rely on the","page_number":37,"box":{"x":116,"y":242,"width":757,"height":12}},{"id":"70029a0f-cc3e-4f9d-9c44-ad9785333883","block_type":"box","text":"actions of similarly situated holders of loans or securities rather than, or in connection with, taking such","page_number":37,"box":{"x":116,"y":258,"width":768,"height":12}},{"id":"c1a8623c-e15a-4e00-840d-8cf1202b5a73","block_type":"box","text":"actions itself on behalf of the Fund.","page_number":37,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"85995086-5553-4d55-8c04-0bbf723b6c99","block_type":"box","text":"In addition, to the extent permitted by applicable law, the Fund may invest its assets in other funds","page_number":37,"box":{"x":117,"y":301,"width":733,"height":13}},{"id":"8819630e-77b9-4a7e-8d3b-96f7e57cfe1f","block_type":"box","text":"advised by BlackRock, including funds that are managed by one or more of the same portfolio","page_number":37,"box":{"x":116,"y":317,"width":702,"height":12}},{"id":"33a9ac9a-de52-48e1-8a57-1b1321005d01","block_type":"box","text":"managers, which could result in conflicts of interest relating to asset allocation, timing of Fund","page_number":37,"box":{"x":117,"y":332,"width":699,"height":13}},{"id":"bb3b05f1-66bb-4a94-8f09-16f8a99d177c","block_type":"box","text":"purchases and redemptions, and increased remuneration and profitability for BlackRock and/or its","page_number":37,"box":{"x":117,"y":348,"width":730,"height":12}},{"id":"ff75f2a0-5db1-4e3a-bca3-634dc26b43e4","block_type":"box","text":"personnel, including portfolio managers.","page_number":37,"box":{"x":117,"y":363,"width":302,"height":13}},{"id":"2dd0a61a-37f6-4dac-8a4e-14ba161b24ba","block_type":"box","text":"Third parties, including service providers to BlackRo","page_number":37,"box":{"x":116,"y":392,"width":378,"height":12}},{"id":"177b8d9f-d1dd-4c8d-9890-72c2a256d15c","block_type":"box","text":"ck or the Fund, may sponsor events (including, but","page_number":37,"box":{"x":495,"y":392,"width":372,"height":12}},{"id":"8373516a-0f81-4a7c-8c6a-6960215991c7","block_type":"box","text":"not limited to, marketing and promotional activities","page_number":37,"box":{"x":117,"y":407,"width":363,"height":12}},{"id":"d169d4de-130d-4e18-93eb-5597cde48892","block_type":"box","text":"and presentations, educational training programs and","page_number":37,"box":{"x":480,"y":407,"width":398,"height":12}},{"id":"38aa464d-0301-4662-b3a6-6701cbd78898","block_type":"box","text":"conferences) for registered representatives, other","page_number":37,"box":{"x":116,"y":423,"width":365,"height":12}},{"id":"c44ed93d-110a-4de2-9e85-3140db071b68","block_type":"box","text":"professionals and individual investors. There is a","page_number":37,"box":{"x":482,"y":423,"width":358,"height":12}},{"id":"b8fd76fc-b1cc-4aad-a0e2-434af6b61c89","block_type":"box","text":"potential conflict of interest as such sponsorships ma","page_number":37,"box":{"x":117,"y":438,"width":383,"height":12}},{"id":"c4c2feac-f7de-41b9-b399-e95452cd5248","block_type":"box","text":"y defray the costs of such activities to BlackRock,","page_number":37,"box":{"x":501,"y":438,"width":364,"height":12}},{"id":"a9258e52-a4ca-4c0c-bfb7-0921371e9289","block_type":"box","text":"and may provide an incentive to BlackRock to retain such third parties to provide services to the Fund.","page_number":37,"box":{"x":116,"y":454,"width":747,"height":12}},{"id":"2cd54513-03ee-4d03-b9d7-ffef79a5b0ac","block_type":"box","text":"In certain circumstances, BlackRock, on behalf of the Fund, may seek to buy from or sell securities to","page_number":37,"box":{"x":117,"y":482,"width":757,"height":12}},{"id":"ec8d82e9-77af-4b94-b9a2-ec3dc774d182","block_type":"box","text":"another fund or account advised by BlackRock. BlackRock may (but is not required to) effect","page_number":37,"box":{"x":116,"y":498,"width":692,"height":12}},{"id":"0fae6623-e3ee-449e-b8a2-776983a6b433","block_type":"box","text":"purchases and sales between BlackRock clients (“cross trades”), including the Fund, if BlackRock","page_number":37,"box":{"x":117,"y":513,"width":730,"height":12}},{"id":"33646f5a-cfeb-4f89-ad2a-73b56eac295a","block_type":"box","text":"believes such transactions are appropriate based on each party’s investment objectives and","page_number":37,"box":{"x":117,"y":529,"width":687,"height":12}},{"id":"5429fa1b-29b1-4f84-a664-e5cf5fe1d3b5","block_type":"box","text":"guidelines, subject to applicable law and regulation. There may be potential conflicts of interest or","page_number":37,"box":{"x":116,"y":544,"width":728,"height":12}},{"id":"ab00a9f1-aed3-42dc-8097-c5f6779d486e","block_type":"box","text":"regulatory issues relating to these transactions which could limit BlackRock’s decision to engage in","page_number":37,"box":{"x":117,"y":560,"width":738,"height":12}},{"id":"cfa258c7-ef8e-497d-b7f1-3d11277cfb34","block_type":"box","text":"these transactions for the Fund. BlackRock may have a potentially conflicting division of loyalties and","page_number":37,"box":{"x":116,"y":575,"width":755,"height":12}},{"id":"844d062c-9264-4f2e-8a6a-cc5f8aff9387","block_type":"box","text":"responsibilities to the parties in such transactions.","page_number":37,"box":{"x":117,"y":591,"width":374,"height":12}},{"id":"0da6bf48-1d71-4448-9e89-64e47a9990ba","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":37,"box":{"x":117,"y":619,"width":763,"height":12}},{"id":"18e6e169-57a9-48d1-b156-c06baf2c90de","block_type":"box","text":"invested, and those activities may have an adverse effect on the Fund. As a result, prices, availability,","page_number":37,"box":{"x":117,"y":635,"width":760,"height":12}},{"id":"bed794b3-779f-48c8-92dd-d353666385bc","block_type":"box","text":"liquidity and terms of the Fund’s investments may be negatively impacted by the activities of","page_number":37,"box":{"x":117,"y":650,"width":687,"height":12}},{"id":"50aa708e-2d72-48e9-9298-3b44c9311fa6","block_type":"box","text":"BlackRock or its clients, and transactions for the Fund may be impaired or effected at prices or terms","page_number":37,"box":{"x":117,"y":666,"width":748,"height":12}},{"id":"841cf5ef-ac1d-4e40-b8ad-6e344a691f22","block_type":"box","text":"that may be less favorable than would otherwise have been the case.","page_number":37,"box":{"x":116,"y":681,"width":514,"height":12}},{"id":"2e2405aa-1474-4c07-8d8b-e5afcb107bd2","block_type":"box","text":"The results of the Fund’s investment activities may differ significantly from the results achieved by","page_number":37,"box":{"x":116,"y":709,"width":726,"height":13}},{"id":"546831c9-9014-4607-9f6a-f62d7835cdae","block_type":"box","text":"BlackRock for its proprietary accounts or other accounts (including investment companies or collective","page_number":37,"box":{"x":117,"y":725,"width":758,"height":12}},{"id":"0d3c8562-9f72-47f3-bf4a-93c4a7a3325a","block_type":"box","text":"investment vehicles) that it manages or advises. It is possible that one or more accounts managed or","page_number":37,"box":{"x":117,"y":740,"width":750,"height":13}},{"id":"88a7033f-ddb9-406a-98de-2e071bf1ab5b","block_type":"box","text":"advised by BlackRock and such other accounts will achieve investment results that are substantially","page_number":37,"box":{"x":116,"y":756,"width":742,"height":12}},{"id":"3372f2c4-e42e-4838-bb0d-93d9e5bef7b4","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":37,"box":{"x":117,"y":771,"width":763,"height":13}},{"id":"6116f383-b2e9-4c50-9e7d-48cb8bbb8063","block_type":"box","text":"sustain losses during periods in which one or more proprietary or other accounts managed or advised","page_number":37,"box":{"x":116,"y":787,"width":754,"height":12}},{"id":"3b9b6446-d9eb-48ca-8275-aefa6075698a","block_type":"box","text":"by BlackRock achieve significant profits. The opposite result is also possible.","page_number":37,"box":{"x":117,"y":802,"width":568,"height":13}},{"id":"3be9b602-966a-4164-9700-2198e9f03242","block_type":"box","text":"From time to time, the Fund may be restricted from purchasing or selling securities, or from engaging","page_number":37,"box":{"x":117,"y":831,"width":754,"height":12}},{"id":"a04d9bf7-bb20-419e-9210-b602d92c216e","block_type":"box","text":"in other investment activities because of regulatory, legal or contractual requirements applicable to","page_number":37,"box":{"x":117,"y":846,"width":735,"height":12}},{"id":"33242717-968e-4bfe-b255-2947967b6130","block_type":"box","text":"BlackRock or other accounts managed or advised by BlackRock, and/or the internal policies of","page_number":37,"box":{"x":117,"y":862,"width":706,"height":12}},{"id":"52d0740d-cc75-47ad-8d8b-278070589cfe","block_type":"box","text":"BlackRock designed to comply with such requirements. As a result, there may be periods, for example,","page_number":37,"box":{"x":117,"y":877,"width":769,"height":12}},{"id":"e6a19466-3161-4789-8546-59f5d2824a87","block_type":"box","text":"29","page_number":37,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"a5a86b80-6570-4393-a5b6-ea0258158c8a","block_type":"box","text":"NM1026U-6030748-37/260","page_number":37,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"202cc430-4c0e-4505-b7cc-86372f450afb","block_type":"box","text":"when BlackRock will not initiate or recommend certain types of transactions in certain securities or","page_number":38,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"849f3827-07a9-4ccd-955f-f4d72eabc960","block_type":"box","text":"instruments with respect to which BlackRock is performing services or when position limits have been","page_number":38,"box":{"x":117,"y":102,"width":757,"height":13}},{"id":"a1b1d4ca-38da-463b-bfe4-4682a524f125","block_type":"box","text":"reached. For example, the investment activities of BlackRock for its proprietary accounts and accounts","page_number":38,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"0d6f126c-559f-4abe-8433-163b1fae58da","block_type":"box","text":"under its management may limit the investment opportunities for the Fund in certain emerging and","page_number":38,"box":{"x":117,"y":134,"width":733,"height":12}},{"id":"f0d99dd3-6152-40f1-a7ee-89890f873cb9","block_type":"box","text":"other markets in which limitations are imposed upon the amount of investment, in the aggregate or in","page_number":38,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"2c209774-d462-4cb3-a279-a8eb719f211d","block_type":"box","text":"individual issuers, by affiliated foreign investors.","page_number":38,"box":{"x":117,"y":165,"width":359,"height":12}},{"id":"53fe93af-db58-41c4-8989-f0edb07a5793","block_type":"box","text":"In connection with its management of the Fund, BlackRock may have access to certain fundamental","page_number":38,"box":{"x":117,"y":196,"width":747,"height":12}},{"id":"6770d3ed-c74a-426a-86ab-59095b1a5f3c","block_type":"box","text":"analysis and proprietary technical models developed by BlackRock. BlackRock will not be under any","page_number":38,"box":{"x":116,"y":211,"width":750,"height":12}},{"id":"2f78309b-a951-46d5-bbd2-2bcfa2277298","block_type":"box","text":"obligation, however, to effect transactions on behalf of the Fund in accordance with such analysis and","page_number":38,"box":{"x":116,"y":227,"width":760,"height":12}},{"id":"256b19f8-fb58-4c2f-955e-67bfa2746922","block_type":"box","text":"models. In addition, BlackRock will not have any obligation to make available any information regarding","page_number":38,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"fb1899e8-f673-4fb2-9ce6-a9f02c3762bd","block_type":"box","text":"its proprietary activities or strategies, or the activities or strategies used for other accounts managed by","page_number":38,"box":{"x":117,"y":258,"width":769,"height":12}},{"id":"5944c9a8-c422-4b3b-ae6e-d5defb03017f","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":38,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"5151d69b-7916-4e1a-a726-86915931a16f","block_type":"box","text":"access to such information for the purpose of managing the Fund. The proprietary activities or portfolio","page_number":38,"box":{"x":116,"y":289,"width":767,"height":12}},{"id":"5732afd1-a760-4ff3-bf85-6f7a6fe69a2e","block_type":"box","text":"strategies of BlackRock, or the activities or strategies used for accounts managed by BlackRock or","page_number":38,"box":{"x":116,"y":304,"width":738,"height":12}},{"id":"c8358409-e52b-4a99-b5b9-28ddca071263","block_type":"box","text":"other client accounts could conflict with the transactions and strategies employed by BlackRock in","page_number":38,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"923a1c94-fec1-4ede-a8d4-a56c33cd0899","block_type":"box","text":"managing the Fund.","page_number":38,"box":{"x":117,"y":335,"width":153,"height":12}},{"id":"02296826-37c9-444f-9fe1-206bcc96259a","block_type":"box","text":"The Fund may be included in investment models developed by BlackRock for use by clients and","page_number":38,"box":{"x":116,"y":366,"width":719,"height":12}},{"id":"e5d9a9c3-ad01-41d6-96d1-bea43f9684f4","block_type":"box","text":"financial advisors. To the extent clients invest in these investment models and increase the assets","page_number":38,"box":{"x":116,"y":382,"width":733,"height":9}},{"id":"4d7bb27a-890d-4090-a17c-b7fab132d15d","block_type":"box","text":"under management of the Fund, the investment management fee amounts paid by the Fund to","page_number":38,"box":{"x":117,"y":397,"width":707,"height":12}},{"id":"a1a3ae4b-6bc2-4ce2-bda7-d0d9c2aeb91e","block_type":"box","text":"BlackRock may also increase. The net asset value and liquidity of the Fund may be impacted by","page_number":38,"box":{"x":117,"y":413,"width":718,"height":12}},{"id":"1e81e67f-4b92-4c9f-bd6c-45dc1f398acb","block_type":"box","text":"purchases and sales of the Fund by model-driven investment portfolios, as well as by BlackRock itself","page_number":38,"box":{"x":117,"y":428,"width":760,"height":12}},{"id":"602f91d0-f105-4e50-9bb5-a7de6de7be28","block_type":"box","text":"and by its advisory clients.","page_number":38,"box":{"x":116,"y":444,"width":201,"height":12}},{"id":"3cf5a4e0-f09e-4896-bbdc-c60d2a9ee0f5","block_type":"box","text":"In addition, certain principals and certain employees of the Fund’s investment adviser are also","page_number":38,"box":{"x":117,"y":475,"width":702,"height":12}},{"id":"f015a18d-1336-4e63-834b-65d01e4caf12","block_type":"box","text":"principals or employees of other business units or entities within BlackRock. As a result, these","page_number":38,"box":{"x":117,"y":490,"width":702,"height":12}},{"id":"bd90baba-a725-45bd-89cd-5dbf8da2d61a","block_type":"box","text":"principals and employees may have obligations to such other business units or entities or their clients","page_number":38,"box":{"x":117,"y":506,"width":756,"height":12}},{"id":"148a9b19-e48f-47c5-acf0-34116eb33d88","block_type":"box","text":"and such obligations to other business units or entities or their clients may be a consideration of which","page_number":38,"box":{"x":116,"y":521,"width":763,"height":12}},{"id":"42547ce9-a67a-4c75-bf69-28e9476a870e","block_type":"box","text":"investors in the Fund should be aware.","page_number":38,"box":{"x":117,"y":537,"width":292,"height":9}},{"id":"68ff785e-1c31-44bf-8ab1-e262146ad415","block_type":"box","text":"BlackRock may enter into transactions and invest in securities, instruments and currencies on behalf of","page_number":38,"box":{"x":117,"y":568,"width":769,"height":12}},{"id":"bdd044dd-e0e6-47bc-8afe-7e2b02fe68a6","block_type":"box","text":"the Fund in which clients of BlackRock, or, to the extent permitted by the Commission and applicable","page_number":38,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"d0f3df37-b70b-4da4-a049-e225939aa231","block_type":"box","text":"law, BlackRock, serves as the counterparty, principal or issuer. In such cases, such party’s interests in","page_number":38,"box":{"x":117,"y":599,"width":764,"height":12}},{"id":"14bb3a6d-a786-4268-b33a-d0e6556be8e1","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":38,"box":{"x":116,"y":614,"width":747,"height":12}},{"id":"5232a077-887b-4144-b8b2-c5e234439f04","block_type":"box","text":"assure that the Fund obtains the best possible prices or terms in connection with the transactions. In","page_number":38,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"0e3a7e51-081f-414a-9bd7-43fc8f757fb4","block_type":"box","text":"addition, the purchase, holding and sale of such investments by the Fund may enhance the profitability","page_number":38,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"0103ded5-4daa-4972-b839-94ebad1e9661","block_type":"box","text":"of BlackRock.","page_number":38,"box":{"x":116,"y":661,"width":101,"height":9}},{"id":"d96205b0-4f56-4ebf-930d-54bbadae68f9","block_type":"box","text":"BlackRock may also create, write or issue derivatives for clients, the underlying securities, currencies","page_number":38,"box":{"x":117,"y":692,"width":749,"height":12}},{"id":"e7123781-c378-4406-a55e-49dbd4face05","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":38,"box":{"x":116,"y":707,"width":701,"height":12}},{"id":"bde55637-985f-4832-9c77-a195f49c063d","block_type":"box","text":"performance of the Fund. Additionally, an affiliate of BlackRock will create, write or issue options,","page_number":38,"box":{"x":117,"y":723,"width":718,"height":12}},{"id":"7dae17c0-ece4-40b8-8722-d5a180398f5c","block_type":"box","text":"which may be based on the performance of the Fund. BlackRock has entered into an arrangement with","page_number":38,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"010750a9-3947-4186-bebd-a934d11f5e50","block_type":"box","text":"Markit Indices Limited, the index provider for underlying fixed-income indexes used by certain iShares","page_number":38,"box":{"x":117,"y":754,"width":754,"height":12}},{"id":"49d42ce7-75a1-4f4a-bceb-708883d7ef0c","block_type":"box","text":"ETFs, related to derivative fixed-income products that are based on such iShares ETFs.. Trading","page_number":38,"box":{"x":117,"y":769,"width":717,"height":12}},{"id":"4994851f-c418-4486-adb6-87257d93dcd1","block_type":"box","text":"activity in these derivative products could also potentially lead to greater liquidity for such products,","page_number":38,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"0c288747-fc19-4a86-8984-9d8e5b769d47","block_type":"box","text":"increased purchase activity with respect to these iShares ETFs and increased assets under","page_number":38,"box":{"x":117,"y":800,"width":679,"height":12}},{"id":"4c1b2c39-283f-4c0f-bc7e-dbb1ceced47e","block_type":"box","text":"management for BlackRock.","page_number":38,"box":{"x":117,"y":816,"width":209,"height":12}},{"id":"f2f573a8-37f4-43a7-a07a-9a115f110580","block_type":"box","text":"The Fund may, subject to applicable law, purchase investments that are the subject of an underwriting","page_number":38,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"cba931f3-594e-4e7f-ba2f-78ccd0e35ad8","block_type":"box","text":"or other distribution by BlackRock and may also enter into transactions with other clients of BlackRock","page_number":38,"box":{"x":116,"y":862,"width":763,"height":12}},{"id":"88f026f8-7f54-4d26-9ee7-b4ed4889b78f","block_type":"box","text":"where such other clients have interests adverse to those of the Fund. At times, these activities may","page_number":38,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"f51f9597-bf2c-4b68-99a1-29dc1c97c74d","block_type":"box","text":"30","page_number":38,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"ab194cb1-db2a-4574-88f0-3b50075a07a3","block_type":"box","text":"NM1026U-6030748-38/260","page_number":38,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a8fc86c7-7d5b-4c69-9819-86956cf66c59","block_type":"box","text":"cause business units or entities within BlackRock to give advice to clients that may cause these clients","page_number":39,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"9af30462-ec8e-4400-a35f-9d59cd5ec48c","block_type":"box","text":"to take actions adverse to the interests of the Fund. To the extent such transactions are permitted, the","page_number":39,"box":{"x":116,"y":102,"width":763,"height":12}},{"id":"3926951e-634d-4c25-ba7f-34c2c941fb6d","block_type":"box","text":"Fund will deal with BlackRock on an arms-length basis.","page_number":39,"box":{"x":117,"y":118,"width":414,"height":12}},{"id":"3064f458-0edb-49e2-96a9-812c35e155fa","block_type":"box","text":"To the extent authorized by applicable law, BlackRock","page_number":39,"box":{"x":116,"y":147,"width":399,"height":11}},{"id":"69e4ed61-5301-41b3-9f6e-be68139f0db5","block_type":"box","text":"may act as broker, dealer, agent, lender or adviser","page_number":39,"box":{"x":515,"y":147,"width":372,"height":11}},{"id":"0957b8b3-6f3c-49d9-bea8-0ee19faffa82","block_type":"box","text":"or in other commercial capacities for the Fund. It is","page_number":39,"box":{"x":116,"y":162,"width":368,"height":12}},{"id":"a48984a4-9ce5-4dbe-9152-bc06033a874f","block_type":"box","text":"anticipated that the commissions, mark-ups, mark","page_number":39,"box":{"x":484,"y":162,"width":372,"height":12}},{"id":"35f5bab8-160c-4c39-b717-6bd231f37202","block_type":"box","text":"downs, financial advisory fees, underwriting and plac","page_number":39,"box":{"x":116,"y":177,"width":384,"height":12}},{"id":"0ec06ea7-779f-4041-8af4-4ad9521b8c95","block_type":"box","text":"ement fees, sales fees, financing and commitment","page_number":39,"box":{"x":500,"y":177,"width":371,"height":12}},{"id":"77af97ed-08f9-4547-bd69-c2524a2855cb","block_type":"box","text":"fees, brokerage fees, other fees, compensation or","page_number":39,"box":{"x":116,"y":193,"width":368,"height":12}},{"id":"dc65b5fe-6b77-4659-b955-86509cbd945f","block_type":"box","text":"profits, rates, terms and conditions charged by","page_number":39,"box":{"x":485,"y":193,"width":341,"height":12}},{"id":"5beaae96-492c-471b-b6fb-adecea28a9c0","block_type":"box","text":"BlackRock will be in its view commercially reasonable, although BlackRock, including its sales personnel,","page_number":39,"box":{"x":117,"y":209,"width":767,"height":11}},{"id":"7c265fb8-7dfd-4817-8ca4-2a69ce7d157e","block_type":"box","text":"will have an interest in obtaining fees and other amount","page_number":39,"box":{"x":116,"y":224,"width":402,"height":12}},{"id":"fcdf13b9-b951-4447-957c-13cab5eff453","block_type":"box","text":"s that are favorable to BlackRock and such sales","page_number":39,"box":{"x":518,"y":224,"width":361,"height":9}},{"id":"967e6fba-bb07-4bcb-a578-e9ebb71ed2b3","block_type":"box","text":"personnel, which may have an adverse effect on the","page_number":39,"box":{"x":117,"y":239,"width":384,"height":12}},{"id":"e8e397d2-d16f-4d91-9f94-5993c9fbcc3f","block_type":"box","text":"Fund. Index based funds may use an index provider","page_number":39,"box":{"x":502,"y":239,"width":383,"height":12}},{"id":"3777af60-b904-4df4-9762-5422bcdb96fd","block_type":"box","text":"that is affiliated with another serv","page_number":39,"box":{"x":116,"y":255,"width":239,"height":9}},{"id":"d19a909a-9c98-4bb8-a721-4133f8cfa56e","block_type":"box","text":"ice provider of the Fund or BlackRock that acts as a broker, dealer,","page_number":39,"box":{"x":356,"y":255,"width":491,"height":12}},{"id":"977a352e-5d26-460f-bdb7-a9c1f85213e9","block_type":"box","text":"agent, lender or in other commercial capacities for the Fund or BlackRock.","page_number":39,"box":{"x":116,"y":270,"width":545,"height":12}},{"id":"ecde7f25-c3a0-4cea-847f-cc88d3e2d8b5","block_type":"box","text":"Subject to applicable law, BlackRock (and its personnel and other distributors) will be entitled to retain","page_number":39,"box":{"x":116,"y":299,"width":761,"height":12}},{"id":"09f7b334-a4c4-4ec8-92bd-c20b7624dd97","block_type":"box","text":"fees and other amounts that they receive in connection with their service to the Fund as broker, dealer,","page_number":39,"box":{"x":116,"y":314,"width":769,"height":12}},{"id":"7c5e4bb3-eaf2-42a2-ace3-5b3148d3508a","block_type":"box","text":"agent, lender, adviser or in other commercial capacities. No accounting to the Fund or its shareholders","page_number":39,"box":{"x":116,"y":330,"width":767,"height":12}},{"id":"b117383b-2459-4ac0-b160-ccdcf03cf5f4","block_type":"box","text":"will be required, and no fees or other compensation payable by the Fund or its shareholders will be","page_number":39,"box":{"x":116,"y":345,"width":739,"height":12}},{"id":"26f2b0e6-76b8-46a9-9173-c00a2a931156","block_type":"box","text":"reduced by reason of receipt by BlackRock of any such fees or other amounts.","page_number":39,"box":{"x":117,"y":361,"width":587,"height":12}},{"id":"3bdacbe7-4195-44b5-a470-324d606da7a3","block_type":"box","text":"When BlackRock acts as broker, dealer, agent, adviser or in other commercial capacities in relation to","page_number":39,"box":{"x":116,"y":389,"width":761,"height":12}},{"id":"a03dc3ea-6649-45b9-a01f-695e3a226f51","block_type":"box","text":"the Fund, BlackRock may take commercial steps in its own interests, which may have an adverse","page_number":39,"box":{"x":116,"y":405,"width":730,"height":12}},{"id":"e71c0a9d-5843-4cc3-bf71-3c71105b0df7","block_type":"box","text":"effect on the Fund.","page_number":39,"box":{"x":116,"y":420,"width":145,"height":10}},{"id":"4ad2ca1b-8cbf-493c-85e9-7a350e1ad9ae","block_type":"box","text":"The Fund will be required to establish business relationships with its counterparties based on the","page_number":39,"box":{"x":116,"y":449,"width":724,"height":11}},{"id":"5e607317-81d1-4369-9fa7-599ef4b50106","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":39,"box":{"x":117,"y":464,"width":728,"height":12}},{"id":"bacf1095-6ae1-460f-b654-4c9ea104ee78","block_type":"box","text":"connection with the Fund’s establishment of its business relationships, nor is it expected that the","page_number":39,"box":{"x":116,"y":480,"width":720,"height":11}},{"id":"9807b888-1560-4c4e-99fa-b75a0ab3a5f6","block_type":"box","text":"Fund’s counterparties will rely on the credit of BlackRock in evaluating the Fund’s creditworthiness.","page_number":39,"box":{"x":117,"y":495,"width":738,"height":12}},{"id":"819bcf66-3e3c-45f3-8197-9227fe97a030","block_type":"box","text":"BlackRock Institutional Trust Company, N.A. (“BTC”), an affiliate of BFA, pursuant to SEC exemptive","page_number":39,"box":{"x":117,"y":523,"width":752,"height":12}},{"id":"d3cb3877-d7a3-474d-936e-0b79893840a0","block_type":"box","text":"relief, acts as securities lending agent to, and receives a share of securities lending revenues from, the","page_number":39,"box":{"x":117,"y":539,"width":767,"height":12}},{"id":"a04e95e2-1137-47d6-ba23-4b1e9c32c2c3","block_type":"box","text":"Fund. BlackRock will also receive compensation for managing the reinvestment of the cash collateral","page_number":39,"box":{"x":117,"y":554,"width":754,"height":12}},{"id":"bf3bcacf-2fb5-4c2f-b7d3-e81593f88b7c","block_type":"box","text":"from securities lending. There are potential conflicts of interests in managing a securities lending","page_number":39,"box":{"x":116,"y":570,"width":721,"height":12}},{"id":"05cd6bc1-a259-4cd8-ac92-5d03726bd2f0","block_type":"box","text":"program, including but not limited to: (i) BlackRock as securities lending agent may have an incentive","page_number":39,"box":{"x":117,"y":585,"width":755,"height":12}},{"id":"6bf8f9ed-043a-4929-9ffa-b4a2d37a061d","block_type":"box","text":"to, among other things, increase or decrease the amount of securities on loan or to lend particular","page_number":39,"box":{"x":116,"y":601,"width":731,"height":12}},{"id":"2cb8aa5a-c36e-42ad-8f79-c03ae0912a45","block_type":"box","text":"securities in order to generate additional risk-adjusted revenue for BlackRock and its affiliates; and (ii)","page_number":39,"box":{"x":116,"y":616,"width":759,"height":12}},{"id":"0f82dcd1-dc30-4fbf-b075-cb486729162f","block_type":"box","text":"BlackRock as securities lending agent may have an incentive to allocate loans to clients that would","page_number":39,"box":{"x":117,"y":632,"width":738,"height":12}},{"id":"ccc2a444-23a7-4ff5-aa56-6b44682c3479","block_type":"box","text":"provide more revenue to BlackRock. As described further below, BlackRock seeks to mitigate this","page_number":39,"box":{"x":117,"y":647,"width":729,"height":13}},{"id":"b4f5cb4c-9ca8-4a94-ba1b-a6a02a63b7d7","block_type":"box","text":"conflict by providing its securities lending clients with equal lending opportunities over time in order to","page_number":39,"box":{"x":116,"y":663,"width":750,"height":12}},{"id":"238a9d52-5ef0-4f55-ba51-8abe89a0cf37","block_type":"box","text":"approximate pro rata allocation.","page_number":39,"box":{"x":116,"y":679,"width":234,"height":11}},{"id":"e6043471-e080-480f-b11c-3b01038fe333","block_type":"box","text":"As part of its securities lending program, BlackRock indemnifies the Fund and certain other clients and/","page_number":39,"box":{"x":116,"y":707,"width":766,"height":12}},{"id":"e04db2b3-bcc4-45df-94b6-d3c7a271c11d","block_type":"box","text":"or funds against a shortfall in collateral in the event of borrower default. On a regular basis, BlackRock","page_number":39,"box":{"x":116,"y":722,"width":760,"height":12}},{"id":"b09d312a-9355-465b-b95a-80c83be6a1cb","block_type":"box","text":"calculates the potential dollar exposure of collateral shortfall resulting from a borrower default (“shortfall","page_number":39,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"73d8604a-610f-46b8-8a1b-1d4f218b1b58","block_type":"box","text":"risk”) in the securities lending program. BlackRock establishes program-wide borrower limits (“credit","page_number":39,"box":{"x":117,"y":753,"width":740,"height":12}},{"id":"ccbe8adc-da90-4480-8cf8-f842d60eca24","block_type":"box","text":"limits”) to actively manage borrower-specific credit exposure. BlackRock oversees the risk model that","page_number":39,"box":{"x":117,"y":769,"width":750,"height":12}},{"id":"96b10e96-d4fc-4148-a458-5311dc2b770f","block_type":"box","text":"calculates projected collateral shortfall values using loan-level factors such as loan and collateral type","page_number":39,"box":{"x":116,"y":784,"width":754,"height":12}},{"id":"d2d19f14-8df9-40f8-b828-e95001bffd00","block_type":"box","text":"and market value as well as specific borrower credit characteristics. When necessary, BlackRock may","page_number":39,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"79c727d5-c42f-4ca6-b337-bb0c610608d3","block_type":"box","text":"adjust securities lending program attributes by restricting eligible collateral or reducing borrower credit","page_number":39,"box":{"x":116,"y":815,"width":755,"height":12}},{"id":"02d658fc-6640-4871-bc09-dd38331c3786","block_type":"box","text":"limits. As a result, the management of program-wide exposure as well as BlackRock-specific","page_number":39,"box":{"x":117,"y":831,"width":691,"height":12}},{"id":"9561d9b4-e77f-4dd9-950d-49be49fb8c00","block_type":"box","text":"indemnification exposure may affect the amount of securities lending activity BlackRock may conduct","page_number":39,"box":{"x":117,"y":846,"width":755,"height":12}},{"id":"e9d001de-cccc-4b25-99d9-4ef886a24201","block_type":"box","text":"at any given point in time by reducing the volume of lending opportunities for certain loans (including by","page_number":39,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"2a3be2b9-82fc-4d10-a709-f58d79234713","block_type":"box","text":"asset type, collateral type and/or revenue profile).","page_number":39,"box":{"x":116,"y":877,"width":373,"height":12}},{"id":"b3d857de-39c3-46fc-a2dc-5f4d1c0b0529","block_type":"box","text":"31","page_number":39,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"56fbe476-7d85-4227-aa25-fcfe317192ac","block_type":"box","text":"NM1026U-6030748-39/260","page_number":39,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"01d6b2c9-5c16-4e90-97dc-802a521612e6","block_type":"box","text":"BlackRock may decline to make a securities loan on behalf of the Fund, discontinue lending on behalf","page_number":40,"box":{"x":117,"y":87,"width":759,"height":12}},{"id":"286bd6c4-fd18-4935-8ab0-2041d32b5a9f","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":40,"box":{"x":116,"y":102,"width":772,"height":13}},{"id":"2caca5cb-56df-4b55-a913-31e6d87dd9bf","block_type":"box","text":"to regulatory requirements and/or market rules, liquidity considerations, or credit considerations, which","page_number":40,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"c8c08c0e-1978-43a7-a623-b5c7a27ca356","block_type":"box","text":"may impact the Fund by reducing or eliminating the volume of lending opportunities for certain types of","page_number":40,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"ef4e3b06-f904-4828-b11c-4276a8263b2a","block_type":"box","text":"loans, loans in particular markets, loans of particular securities or types of securities, or for loans","page_number":40,"box":{"x":117,"y":149,"width":720,"height":12}},{"id":"a54f4275-9945-4ad6-b070-1c68a4e0f6cd","block_type":"box","text":"overall. In addition, some borrowers may prefer certain BlackRock lenders that provide additional","page_number":40,"box":{"x":116,"y":165,"width":725,"height":12}},{"id":"3c7def36-5a8d-48b2-ab09-dc610536767c","block_type":"box","text":"protections against lender default that are favored by their prudential regulation.","page_number":40,"box":{"x":117,"y":180,"width":596,"height":12}},{"id":"ac03b5a8-b049-4b8e-8263-cb06bd988448","block_type":"box","text":"BlackRock uses a predetermined systematic process in order to approximate pro rata allocation over","page_number":40,"box":{"x":117,"y":211,"width":752,"height":12}},{"id":"07197e10-8e27-4b45-a378-92ef14a07071","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":40,"box":{"x":116,"y":227,"width":739,"height":12}},{"id":"f94bb208-63f0-4514-bbac-8b1e8e813ed0","block_type":"box","text":"capacity pursuant to the various program limits (i.e. indemnification exposure limit and borrower credit","page_number":40,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"d3e47fb8-5a66-4cd8-b799-3faf644b3c1f","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":40,"box":{"x":117,"y":258,"width":747,"height":12}},{"id":"6ceb6d88-8749-46fa-9477-2a412c575c36","block_type":"box","text":"lending portfolio must also have enough inventory, either on its own or when aggregated with other","page_number":40,"box":{"x":117,"y":273,"width":738,"height":12}},{"id":"d7f10784-2ff0-41d3-9c29-2c1c4a191f06","block_type":"box","text":"portfolios into one single market delivery, to satisfy the loan request. In doing so, BlackRock seeks to","page_number":40,"box":{"x":117,"y":289,"width":753,"height":12}},{"id":"212b76d5-a8f3-4f8d-b394-87a68fbcf45f","block_type":"box","text":"provide equal lending opportunities for all portfolios, independent of whether BlackRock indemnifies the","page_number":40,"box":{"x":117,"y":304,"width":770,"height":12}},{"id":"3efeba23-a104-4f87-81c3-45032e64105d","block_type":"box","text":"portfolio. Equal opportunities for lending portfolios do not guarantee equal outcomes. Specifically, short","page_number":40,"box":{"x":117,"y":320,"width":769,"height":12}},{"id":"786ba9a8-fb5b-4a84-94f4-fdaebef07206","block_type":"box","text":"and long-term outcomes for individual clients may vary due to asset mix, asset/liability spreads on","page_number":40,"box":{"x":116,"y":335,"width":730,"height":12}},{"id":"d2559bc2-046d-43b2-aa9a-bb31662733f5","block_type":"box","text":"different securities, and the overall limits imposed by the firm.","page_number":40,"box":{"x":116,"y":351,"width":460,"height":12}},{"id":"1559696c-51b2-48b0-bb75-5e5e5c00153f","block_type":"box","text":"Purchases and sales of securities and other assets for the Fund may be aggregated with orders for","page_number":40,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"c389af73-f9c2-4a8f-beee-654a7f6531e6","block_type":"box","text":"other BlackRock client accounts, including with accounts that pay different transaction costs solely due","page_number":40,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"385996f6-2203-4d44-ba19-423e97a249b0","block_type":"box","text":"to the fact that they have different research payment arrangements. BlackRock, however, is not","page_number":40,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"1a542ef6-2659-4d39-9566-444edb7e02d0","block_type":"box","text":"required to aggregate orders if portfolio management decisions for different accounts are made","page_number":40,"box":{"x":117,"y":428,"width":710,"height":12}},{"id":"dc2eb2bc-8e6f-4410-99ec-99f6bbaa669f","block_type":"box","text":"separately, or if they determine that aggregating is not practicable or required, or in cases involving","page_number":40,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"17f659cc-d250-4f88-96a3-426a288e6b81","block_type":"box","text":"client direction.","page_number":40,"box":{"x":116,"y":459,"width":117,"height":10}},{"id":"ce81ad99-1587-4ece-b2af-986c23107720","block_type":"box","text":"Prevailing trading activity frequently may make impossible the receipt of the same price or execution","page_number":40,"box":{"x":117,"y":490,"width":748,"height":12}},{"id":"0c243a35-c9bd-40fa-905e-b8679598d575","block_type":"box","text":"on the entire volume of securities purchased or sold. When this occurs, the various prices may be","page_number":40,"box":{"x":116,"y":506,"width":730,"height":12}},{"id":"445ae418-c0cf-446b-b37a-a44c4e855bca","block_type":"box","text":"averaged, and the Fund will be charged or credited with the average price. Thus, the effect of the","page_number":40,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"969a248e-ba2b-45a9-bd26-7e3de8e20d25","block_type":"box","text":"aggregation may operate on some occasions to the disadvantage of the Fund. In addition, under","page_number":40,"box":{"x":116,"y":537,"width":721,"height":12}},{"id":"f981829d-2807-48eb-9ff3-632b056556b7","block_type":"box","text":"certain circumstances, the Fund will not be charged the same commission or commission equivalent","page_number":40,"box":{"x":116,"y":552,"width":750,"height":12}},{"id":"99d03c33-29e5-4c16-9dc2-bc62bcf498b6","block_type":"box","text":"rates in connection with an aggregated order.","page_number":40,"box":{"x":117,"y":568,"width":341,"height":12}},{"id":"7505c30c-c0f2-443c-a4e7-55a28e002db2","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may cause the Fund or account to pay a broker or","page_number":40,"box":{"x":117,"y":599,"width":734,"height":12}},{"id":"38dcb466-1f00-47c0-b575-2de09aca4122","block_type":"box","text":"dealer a commission for effecting a transaction that exceeds the amount another broker or dealer","page_number":40,"box":{"x":116,"y":614,"width":727,"height":12}},{"id":"b3f5a577-5332-4a4d-bfb8-75691f41ee09","block_type":"box","text":"would have charged for effecting the same transaction in recognition of the value of brokerage and","page_number":40,"box":{"x":116,"y":630,"width":737,"height":12}},{"id":"c88df99c-552f-496d-b01b-5bbabd909a27","block_type":"box","text":"research services provided by that broker or dealer.","page_number":40,"box":{"x":117,"y":645,"width":388,"height":12}},{"id":"6c7f9d01-1e47-4412-a623-1a90a4f868d9","block_type":"box","text":"Subject to applicable law, BlackRock may select brokers that furnish BlackRock, the Fund, other","page_number":40,"box":{"x":116,"y":676,"width":716,"height":12}},{"id":"9d7867da-d839-4a54-9ec1-cc39457f6122","block_type":"box","text":"BlackRock client accounts or personnel, directly or through correspondent relationships, with research","page_number":40,"box":{"x":117,"y":692,"width":756,"height":12}},{"id":"91c5d5aa-557d-4774-96c6-e4e75435e5df","block_type":"box","text":"or other appropriate services which provide, in BlackRock’s view, appropriate assistance to BlackRock","page_number":40,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"52901156-2a75-483c-83a7-94b6c93a646f","block_type":"box","text":"in the investment decision-making process (including with respect to futures, fixed-price offerings and","page_number":40,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"fee02dc4-376a-443d-af07-87ad84ccc4bf","block_type":"box","text":"OTC transactions). Such research or other services may include, to the extent permitted by law,","page_number":40,"box":{"x":116,"y":738,"width":711,"height":12}},{"id":"6efc85d4-54ff-456d-b364-b45a6705175a","block_type":"box","text":"research reports on companies, industries and securities; economic and financial data; financial","page_number":40,"box":{"x":117,"y":754,"width":709,"height":12}},{"id":"5819179a-b949-45b6-8610-9c118921b0ed","block_type":"box","text":"publications; proxy analysis; trade industry seminars; computer data bases; research-oriented software","page_number":40,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"98332677-4ec3-4d60-a55e-bc0a36491bfa","block_type":"box","text":"and other services and products.","page_number":40,"box":{"x":116,"y":785,"width":242,"height":12}},{"id":"46d57f21-447f-45f9-8e55-68668fe59ee7","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":40,"box":{"x":117,"y":816,"width":764,"height":12}},{"id":"812e7ebd-0e2b-4702-ac7d-b1e6a8fa46bf","block_type":"box","text":"other BlackRock client accounts, including in connection with BlackRock client accounts other than","page_number":40,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"e84026d5-1ba0-448d-8f6c-6390eb575744","block_type":"box","text":"those that pay commissions to the broker relating to the research or other service arrangements. Such","page_number":40,"box":{"x":116,"y":847,"width":766,"height":12}},{"id":"b31a4167-3c72-4cd9-b7f8-7ca49dd51bdb","block_type":"box","text":"products and services may disproportionately benefit other BlackRock client accounts relative to the","page_number":40,"box":{"x":117,"y":862,"width":745,"height":12}},{"id":"7138f28a-e5ce-42b2-bfa0-cb42756bc8a1","block_type":"box","text":"Fund based on the amount of brokerage commissions paid by the Fund and such other BlackRock","page_number":40,"box":{"x":117,"y":878,"width":736,"height":12}},{"id":"2e23c98e-4353-4d93-93b4-17fad2211692","block_type":"box","text":"32","page_number":40,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b711ba82-bcdf-4342-8f18-93e791e95f80","block_type":"box","text":"NM1026U-6030748-40/260","page_number":40,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"81ff087e-e119-4250-821d-2a39b648124a","block_type":"box","text":"client accounts. For example, research or other services that are paid for through one client’s","page_number":41,"box":{"x":116,"y":87,"width":696,"height":12}},{"id":"27c6ccc8-8ac9-45f4-9f97-88f009bdd0f5","block_type":"box","text":"commissions may not be used in managing that client’s account. In addition, other BlackRock client","page_number":41,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"7857e19a-7cf5-4104-a8c1-44da68595d3d","block_type":"box","text":"accounts may receive the benefit, including disproportionate benefits, of economies of scale or price","page_number":41,"box":{"x":116,"y":118,"width":748,"height":12}},{"id":"a6a8596b-b4ab-41a9-bf24-d3a0387c8c42","block_type":"box","text":"discounts in connection with products and services that may be provided to the Fund and to such other","page_number":41,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"29782978-2c1f-444e-a5db-71b56c4f4300","block_type":"box","text":"BlackRock client accounts. To the extent that BlackRock uses soft dollars, it will not have to pay for","page_number":41,"box":{"x":117,"y":149,"width":740,"height":12}},{"id":"941471a3-4caf-428b-94df-98f353cd725f","block_type":"box","text":"those products and services itself.","page_number":41,"box":{"x":116,"y":165,"width":258,"height":11}},{"id":"1bc8549d-e59e-4d14-9c7a-3b89b37499e1","block_type":"box","text":"BlackRock, unless prohibited by applicable law, may endeavor to execute trades through brokers who,","page_number":41,"box":{"x":117,"y":193,"width":765,"height":12}},{"id":"4eb9991a-6a63-4bda-901f-0217b9e01159","block_type":"box","text":"pursuant to such arrangements, provide research or other services in order to ensure the continued","page_number":41,"box":{"x":117,"y":208,"width":743,"height":12}},{"id":"a4b5c86e-f234-494b-aaf4-2b9fae1d4a3b","block_type":"box","text":"receipt of research or other services BlackRock believes are useful in its investment decision-making","page_number":41,"box":{"x":117,"y":223,"width":753,"height":13}},{"id":"371b7320-e540-4930-bd4d-2d66d843f2fe","block_type":"box","text":"process. BlackRock may from time to time choose not to engage in the above described arrangements","page_number":41,"box":{"x":117,"y":239,"width":767,"height":12}},{"id":"c52a55f3-f6d5-4af0-b67c-63d2750de271","block_type":"box","text":"to varying degrees. BlackRock, unless prohibited by applicable law, may also enter into commission","page_number":41,"box":{"x":116,"y":255,"width":746,"height":12}},{"id":"94422755-4976-48ce-aa3c-6aed1d27c772","block_type":"box","text":"sharing arrangements under which BlackRock may execute transactions through a broker-dealer and","page_number":41,"box":{"x":116,"y":270,"width":757,"height":12}},{"id":"a6ff1b64-cc2f-4997-8a8b-ef1ed96db6a9","block_type":"box","text":"request that the broker-dealer allocate a portion of the commissions or commission credits to another","page_number":41,"box":{"x":117,"y":285,"width":755,"height":12}},{"id":"5f9d05e7-8b06-45a9-a142-8df417663439","block_type":"box","text":"firm that provides research to BlackRock. To the extent that BlackRock engages in commission sharing","page_number":41,"box":{"x":116,"y":301,"width":772,"height":12}},{"id":"de8d1375-01d0-4842-975f-0e703ebe6716","block_type":"box","text":"arrangements, many of the same conflicts related to traditional soft dollars may exist.","page_number":41,"box":{"x":116,"y":316,"width":636,"height":13}},{"id":"9ef787c6-8079-4121-bf87-8120ec826e3a","block_type":"box","text":"BlackRock may utilize certain electronic crossing networks (“ECNs”) (including, without limitation,","page_number":41,"box":{"x":117,"y":344,"width":724,"height":12}},{"id":"344ea1c6-00fe-4b34-a13d-880bf4ef735d","block_type":"box","text":"ECNs in which BlackRock has an investment or other interest, to the extent permitted by applicable","page_number":41,"box":{"x":117,"y":360,"width":741,"height":12}},{"id":"93dd75da-875d-4f08-8c84-80c6cc397704","block_type":"box","text":"law) in executing client securities transactions for certain types of securities. These ECNs may charge","page_number":41,"box":{"x":117,"y":375,"width":760,"height":12}},{"id":"6681fef4-44e0-4979-8d82-610bb187545c","block_type":"box","text":"fees for their services, including access fees and transaction fees. The transaction fees, which are","page_number":41,"box":{"x":116,"y":391,"width":733,"height":12}},{"id":"6777d358-5b4c-47ea-a67f-17b369e8e37f","block_type":"box","text":"similar to commissions or markups/markdowns, will generally be charged to clients and, like","page_number":41,"box":{"x":116,"y":407,"width":686,"height":11}},{"id":"dcd3f11f-9ba7-4e2a-a042-64e162ae579f","block_type":"box","text":"commissions and markups/markdowns, would generally be included in the cost of the securities","page_number":41,"box":{"x":116,"y":422,"width":715,"height":12}},{"id":"e7b5e648-0ec2-4275-98f4-634fa525e72f","block_type":"box","text":"purchased. Access fees may be paid by BlackRock even though incurred in connection with executing","page_number":41,"box":{"x":117,"y":437,"width":763,"height":12}},{"id":"0fe6888c-108b-461d-bbcc-a781cd550052","block_type":"box","text":"transactions on behalf of clients, including the Fund. In certain circumstances, ECNs may offer volume","page_number":41,"box":{"x":116,"y":453,"width":765,"height":12}},{"id":"43ff9533-2eb3-437f-8f59-f576054f38f9","block_type":"box","text":"discounts that will reduce the access fees typically paid by BlackRock. BlackRock will only utilize ECNs","page_number":41,"box":{"x":116,"y":468,"width":770,"height":12}},{"id":"7460b217-f2ce-4394-a8df-9d8dd9ca166e","block_type":"box","text":"consistent with its obligation to seek to obtain best execution in client transactions.","page_number":41,"box":{"x":116,"y":484,"width":616,"height":12}},{"id":"db37a9ba-7aa5-4123-95d9-154c19895252","block_type":"box","text":"BlackRock owns a minority interest in, and is a member of, Members Exchange (“MEMX”), a newly","page_number":41,"box":{"x":117,"y":512,"width":739,"height":12}},{"id":"fe87d9d9-627e-45e5-9226-4ee9cb11a7c2","block_type":"box","text":"created U.S. stock exchange. Transactions for the Fund may be executed on MEMX if third party","page_number":41,"box":{"x":116,"y":527,"width":725,"height":12}},{"id":"16899b54-d00d-4279-8cc1-410d0f736b01","block_type":"box","text":"brokers select MEMX as the appropriate venue for execution of orders placed by BlackRock traders on","page_number":41,"box":{"x":117,"y":543,"width":768,"height":12}},{"id":"1bd93d7e-cc64-47fb-b073-7ab3b43f590f","block_type":"box","text":"behalf of the Fund. In addition, transactions in Fund shares may be executed on MEMX if third party","page_number":41,"box":{"x":117,"y":558,"width":746,"height":12}},{"id":"e489a0f7-3569-4e7b-bcb1-1b8f4cfc77c5","block_type":"box","text":"brokers select MEMX as the appropriate venue for the execution of such orders.","page_number":41,"box":{"x":117,"y":574,"width":600,"height":12}},{"id":"af03818b-9d3d-433b-bc61-1678c0676ece","block_type":"box","text":"BlackRock has adopted policies and procedures designed to prevent conflicts of interest from","page_number":41,"box":{"x":117,"y":602,"width":697,"height":12}},{"id":"a7c59a10-e220-426f-9123-8c758efa4792","block_type":"box","text":"influencing proxy voting decisions that it makes on behalf of advisory clients, including the Fund, and to","page_number":41,"box":{"x":117,"y":617,"width":769,"height":12}},{"id":"0ae07760-2f96-4e24-a57f-fee401ce630b","block_type":"box","text":"help ensure that such decisions are made in accordance with BlackRock’s fiduciary obligations to its","page_number":41,"box":{"x":117,"y":633,"width":748,"height":12}},{"id":"c4d7b9af-c302-4c20-a20c-8f90314bb13a","block_type":"box","text":"clients. Nevertheless, notwithstanding such proxy voting policies and procedures, actual proxy voting","page_number":41,"box":{"x":116,"y":648,"width":754,"height":12}},{"id":"fb9123b0-cf76-490b-bce9-d6fe5feb8901","block_type":"box","text":"decisions of BlackRock may have the effect of favoring the interests of other clients or businesses of","page_number":41,"box":{"x":116,"y":664,"width":746,"height":12}},{"id":"a186a5a8-06c5-4e0d-a07d-3034ef9442c6","block_type":"box","text":"other divisions or units of BlackRock, provided that BlackRock believes such voting decisions to be in","page_number":41,"box":{"x":116,"y":679,"width":751,"height":12}},{"id":"246d351b-825a-4fa5-ad3d-eb122112c8e3","block_type":"box","text":"accordance with its fiduciary obligations. For a more detailed discussion of these policies and","page_number":41,"box":{"x":116,"y":695,"width":691,"height":12}},{"id":"2fec21ee-c9fa-48d9-bb66-13e73461a085","block_type":"box","text":"procedures, see the Proxy Voting Policy section in this SAI.","page_number":41,"box":{"x":117,"y":710,"width":439,"height":12}},{"id":"cda685e3-4c7f-49d6-82fa-b35e668679a2","block_type":"box","text":"It is also possible that, from time","page_number":41,"box":{"x":117,"y":738,"width":227,"height":12}},{"id":"d8baf490-6c00-4436-99e9-ea8c56e21a7b","block_type":"box","text":"to time, BlackRock and/or its advisory clients (including other funds and","page_number":41,"box":{"x":349,"y":738,"width":506,"height":12}},{"id":"c2df0ba9-c54d-471b-893c-bb08ac0fe472","block_type":"box","text":"separately managed accounts) may, subject to comp","page_number":41,"box":{"x":116,"y":754,"width":377,"height":12}},{"id":"a939d1d0-ba80-4cdc-ad14-d69eb9621e52","block_type":"box","text":"liance with applicable law, purchase and hold shares","page_number":41,"box":{"x":494,"y":754,"width":373,"height":12}},{"id":"a7017a79-98af-4d7e-9e38-93769a88e385","block_type":"box","text":"of the Fund. Increasing the Fund’s assets may enhance","page_number":41,"box":{"x":116,"y":769,"width":396,"height":12}},{"id":"a62940fc-cb45-488c-8237-15ef2deb4f24","block_type":"box","text":"investment flexibility and diversification and may","page_number":41,"box":{"x":518,"y":769,"width":340,"height":12}},{"id":"5f9ce21a-ebcb-46d9-9051-e47d7ecb7eee","block_type":"box","text":"contribute to economies of scale that tend to re","page_number":41,"box":{"x":116,"y":785,"width":325,"height":9}},{"id":"78d62e90-cf9e-46e8-b8ec-6d0f1170f2c9","block_type":"box","text":"reduce the Fund’s expense ratio. BlackRock reserves the","page_number":41,"box":{"x":441,"y":785,"width":402,"height":12}},{"id":"dffac56d-0f77-46a8-b043-f3bdb2104301","block_type":"box","text":"right, subject to compliance with applicable law, to sell","page_number":41,"box":{"x":117,"y":800,"width":381,"height":12}},{"id":"3181cf95-af42-492a-af66-f7d13f67f117","block_type":"box","text":"into the market or redeem in Creation Units through","page_number":41,"box":{"x":504,"y":800,"width":365,"height":12}},{"id":"cb691b1b-00d8-4864-b524-adf1f52efaac","block_type":"box","text":"an Authorized Participant at any time some or all of","page_number":41,"box":{"x":116,"y":816,"width":364,"height":12}},{"id":"3ccb32cb-6854-424e-b288-93b7ba283d0e","block_type":"box","text":"the shares of the Fund acquired for its own accounts or","page_number":41,"box":{"x":484,"y":816,"width":392,"height":12}},{"id":"6892ea13-d0ed-414b-8167-938d949b8ff4","block_type":"box","text":"the account of a BlackRock advisory client. 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The Fund may also","page_number":42,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"e3f10e9f-e909-4eb1-98d8-51c1c23190a7","block_type":"box","text":"invest in issuances (such as structured notes) by entities for which BlackRock provides and is","page_number":42,"box":{"x":117,"y":118,"width":699,"height":12}},{"id":"1a33ae60-54cf-4f29-8edb-e8fd202ae5f1","block_type":"box","text":"compensated for cash management services relating to the proceeds from the sale of such issuances.","page_number":42,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"c07b6adf-9e02-46b6-a8aa-46387c40676e","block_type":"box","text":"In making investment decisions for the Fund, BlackRock is not permitted to obtain or use material non","page_number":42,"box":{"x":117,"y":149,"width":760,"height":12}},{"id":"e2fc3f0e-2890-4913-b74c-a23dabec2413","block_type":"box","text":"public information acquired by any unit of BlackRock, in the course of these activities. 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The pr","page_number":42,"box":{"x":116,"y":661,"width":337,"height":12}},{"id":"aaa7126c-fc04-4531-a89c-57184359c1e1","block_type":"box","text":"ice generally may not be determined based on what the","page_number":42,"box":{"x":453,"y":661,"width":395,"height":12}},{"id":"bac0101a-a87b-45e3-9fe5-53afc6c73190","block_type":"box","text":"Fund might reasonably expect to receive for selling an asset or","page_number":42,"box":{"x":117,"y":676,"width":446,"height":12}},{"id":"05126459-0464-4bfb-b7e3-3dff1db4378b","block_type":"box","text":"liability at a later time or if it holds the asset","page_number":42,"box":{"x":568,"y":676,"width":303,"height":12}},{"id":"26b11e3e-f3fb-44d0-912d-f00af06183b5","block_type":"box","text":"or liability to maturity. 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BlackRock on behalf of its","page_number":45,"box":{"x":116,"y":117,"width":741,"height":12}},{"id":"a956d6f0-89cc-403c-8018-a2a2e6b2c380","block_type":"box","text":"clients may limit purchases, sell existing investments, utilize indirect investments, utilize information","page_number":45,"box":{"x":116,"y":132,"width":742,"height":13}},{"id":"4026f1ea-b724-4923-b2d2-520e40fa8658","block_type":"box","text":"barriers, or otherwise restrict, forgo, or limit the exercise of rights (including transferring, outsourcing, or","page_number":45,"box":{"x":117,"y":148,"width":771,"height":12}},{"id":"c29e74e5-27cf-46be-ae4f-4482e151857e","block_type":"box","text":"limiting voting rights or forgoing the right to receive dividends) when BlackRock, in its sole discretion,","page_number":45,"box":{"x":117,"y":163,"width":751,"height":12}},{"id":"ae8b04d6-2819-4f69-9f1b-86482d4ad327","block_type":"box","text":"deems it appropriate in light of potential regulatory or other restrictions on ownership or other","page_number":45,"box":{"x":116,"y":178,"width":694,"height":12}},{"id":"b4e366f5-737f-4889-a004-f2942243b722","block_type":"box","text":"consequences resulting from reaching investment thresholds. 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The issuer and/or regulator may also require that","page_number":45,"box":{"x":117,"y":285,"width":734,"height":12}},{"id":"a21c385a-3de7-4f23-aec4-502ce3ad0cdd","block_type":"box","text":"BlackRock on behalf of itself and its clients take or refrain from taking certain actions in connection with","page_number":45,"box":{"x":117,"y":300,"width":770,"height":12}},{"id":"2063ca16-2df4-4425-b0c4-04373eddea76","block_type":"box","text":"the approval, order, consent, relief or non-disapproval, which BlackRock may accept if it believes the","page_number":45,"box":{"x":116,"y":315,"width":752,"height":12}},{"id":"10e666b5-9ce7-4f1a-b6dc-2f2d1c20eade","block_type":"box","text":"benefits outweigh the costs and may limit BlackRock from taking actions that it otherwise would take.","page_number":45,"box":{"x":117,"y":330,"width":753,"height":12}},{"id":"8a2672fb-c5c1-43d8-b2e6-f2d668daec73","block_type":"box","text":"In those circumstances where ownership thresholds or limitations must be observed, BlackRock seeks","page_number":45,"box":{"x":117,"y":346,"width":765,"height":12}},{"id":"594a604e-1e8f-48bd-819d-70b66a00c63f","block_type":"box","text":"to allocate limited investment opportunities equitably among clients, taking into consideration","page_number":45,"box":{"x":116,"y":361,"width":693,"height":12}},{"id":"52c51bc0-fce5-477b-80ba-5e784fe664f0","block_type":"box","text":"benchmark weight and investment strategy. BlackRock may adopt certain controls designed to prevent","page_number":45,"box":{"x":117,"y":376,"width":767,"height":12}},{"id":"7b6fef99-7a0b-4627-a0c8-e4f98d798c7e","block_type":"box","text":"the occurrence of a breach of any applicable ownership threshold or limits, including, for example,","page_number":45,"box":{"x":116,"y":391,"width":731,"height":12}},{"id":"4d268d1e-06cf-4d86-aa93-58c874a720c3","block_type":"box","text":"when ownership in certain securities nears an applicable threshold, BlackRock may limit additional","page_number":45,"box":{"x":116,"y":407,"width":736,"height":12}},{"id":"b3f05e31-c7c5-4230-be89-0447b8d3f34d","block_type":"box","text":"purchases in such securities or remove such securities from the list of Deposit Securities to be","page_number":45,"box":{"x":117,"y":422,"width":704,"height":12}},{"id":"b04681b1-b10f-46f8-9968-ef873793b86d","block_type":"box","text":"delivered to the Fund in connection with purchases of Creation Units of the Fund. 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It is possible t","page_number":45,"box":{"x":116,"y":528,"width":392,"height":12}},{"id":"4dc2b161-2278-4c4e-bbd1-da800fdee5c9","block_type":"box","text":"that, despite BlackRock’s intent to either comply with","page_number":45,"box":{"x":508,"y":528,"width":379,"height":12}},{"id":"dd255c47-e78f-424a-ad78-6043cc090944","block_type":"box","text":"or be granted permission to exceed ownership limitations,","page_number":45,"box":{"x":116,"y":544,"width":415,"height":12}},{"id":"6da290a9-1948-4658-a595-0fff17510364","block_type":"box","text":"it may inadvertently breac","page_number":45,"box":{"x":531,"y":544,"width":183,"height":12}},{"id":"17783899-4b73-4aae-a75c-0b40bbcb7aa9","block_type":"box","text":"h a limit or violate the","page_number":45,"box":{"x":714,"y":544,"width":155,"height":9}},{"id":"24e5c2b0-1e57-4aed-97d8-e4dde90e1269","block_type":"box","text":"corporate or regulatory approval, order, consen","page_number":45,"box":{"x":116,"y":559,"width":335,"height":12}},{"id":"e1943630-1504-4c25-b0a0-06c06a6f2a4e","block_type":"box","text":"t, relief or non-disapproval that was obtained.","page_number":45,"box":{"x":452,"y":559,"width":325,"height":12}},{"id":"87040d6a-6ea1-4f76-9165-0fe3c2f694c7","block_type":"box","text":"In addition to the foregoing, other ownership thresholds may trigger reporting requirements to","page_number":45,"box":{"x":117,"y":589,"width":696,"height":12}},{"id":"10f7d43a-241b-4632-a903-3a0a718a7cea","block_type":"box","text":"governmental and regulatory authorities, and such reports may entail the disclosure of the identity of a","page_number":45,"box":{"x":116,"y":604,"width":763,"height":12}},{"id":"94409094-473f-46f1-82c0-f1f2050b9241","block_type":"box","text":"client or BlackRock’s intended strategy with respect to such security or asset.","page_number":45,"box":{"x":116,"y":620,"width":579,"height":11}},{"id":"627ce17e-ccbd-4e3d-b0dd-d9d7787f5a21","block_type":"box","text":"BlackRock may not serve as an Authorized Participant in the creation and redemption of the Fund and","page_number":45,"box":{"x":117,"y":650,"width":763,"height":12}},{"id":"8b4da509-6096-4cae-9d4f-5f778a7b14e3","block_type":"box","text":"other BFA-advised ETFs.","page_number":45,"box":{"x":116,"y":665,"width":187,"height":9}},{"id":"b5885559-84b7-4aff-8592-d681017e9fab","block_type":"box","text":"Under an ETF Services Agreement, certain iShares/BlackRock ETFs have retained BRIL, an affiliate of","page_number":45,"box":{"x":117,"y":695,"width":765,"height":12}},{"id":"c882a984-73df-4e72-b9a6-c413dd4ff832","block_type":"box","text":"BFA, to perform certain order processing, Authorized Participant communications, and related services","page_number":45,"box":{"x":117,"y":710,"width":763,"height":12}},{"id":"a2743cd5-1deb-4516-afa4-8a477a4dd8bd","block_type":"box","text":"in connection with the issuance and redemption of Creation Units (“ETF Services”). BRIL has engaged","page_number":45,"box":{"x":117,"y":725,"width":759,"height":13}},{"id":"8faa09e3-4072-4a84-99ba-b923be4d3eeb","block_type":"box","text":"Citibank, N.A. (“Citibank”) as a subcontractor to provide certain ETF Services. BRIL retains a portion of","page_number":45,"box":{"x":117,"y":741,"width":764,"height":12}},{"id":"10f281ec-5a91-442d-af57-e7f622350c72","block_type":"box","text":"the standard transaction fee received from Authorized Participants on each creation or redemption","page_number":45,"box":{"x":116,"y":756,"width":729,"height":12}},{"id":"d83a71d1-eb93-49d4-8440-da2dd0f430b0","block_type":"box","text":"order from the Authorized Participant for the ETF Services provided. BlackRock collaborated with, and","page_number":45,"box":{"x":116,"y":771,"width":758,"height":12}},{"id":"73ee2f5e-291c-4919-98ae-13e483eb4f52","block_type":"box","text":"received payment from, Citibank on the design and development of the ETF Services platform.","page_number":45,"box":{"x":117,"y":786,"width":701,"height":13}},{"id":"6988d364-460d-430c-8b26-e5d20e3a8b1c","block_type":"box","text":"Citibank has, and may, from time to time, develop additional relationships with BlackRock or funds","page_number":45,"box":{"x":117,"y":802,"width":728,"height":12}},{"id":"5963d0f6-207c-48c3-95cc-5888a7b5b55d","block_type":"box","text":"managed by BFA and its affiliates.","page_number":45,"box":{"x":117,"y":817,"width":253,"height":12}},{"id":"e480680b-0a15-4df6-81ae-ce41a5376a2e","block_type":"box","text":"In order to defray transaction expenses and protect against possible shareholder dilution, the Fund","page_number":45,"box":{"x":117,"y":847,"width":737,"height":12}},{"id":"df88bf58-632c-4c4e-8af7-ee8b6dbb5051","block_type":"box","text":"may collect certain fees from Authorized Participants in connection with cash substitutions for creation","page_number":45,"box":{"x":117,"y":862,"width":761,"height":12}},{"id":"779d2731-6faf-4fa0-9480-e727ab0ffc29","block_type":"box","text":"and redemption transactions. While BlackRock uses good faith estimates of the expected costs to the","page_number":45,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"0a683702-fd13-4910-b618-39e480104112","block_type":"box","text":"37","page_number":45,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"188112be-534c-49f8-a0cd-db98533257dc","block_type":"box","text":"NM1026U-6030748-45/260","page_number":45,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d334f12a-aa2a-4c0c-a233-bb7a98e40392","block_type":"box","text":"Fund in determining the rates for fees collected by the Fund related to creation and redemption activity,","page_number":46,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"6a4eae1e-25a4-4b61-8562-f2d512d8ee82","block_type":"box","text":"BlackRock may have incentives to improve Fund performance through the collection of these fees. As","page_number":46,"box":{"x":117,"y":102,"width":760,"height":12}},{"id":"107b1888-06cd-4825-a7d1-5d81d5cccae5","block_type":"box","text":"these charges are based on estimates, where the charges exceed actual transaction costs incurred by","page_number":46,"box":{"x":116,"y":117,"width":765,"height":12}},{"id":"8b689679-3d13-4f38-9f63-b84c2b158d5c","block_type":"box","text":"the Fund, Fund performance could improve as a result. BlackRock has established processes to","page_number":46,"box":{"x":116,"y":132,"width":720,"height":12}},{"id":"8e231698-2745-4366-a313-d26630f4e0c5","block_type":"box","text":"oversee the determination of these estimates in an effort to mitigate this conflict.","page_number":46,"box":{"x":116,"y":148,"width":600,"height":12}},{"id":"461c8a25-85b4-4694-884e-f4741c11d102","block_type":"box","text":"BlackRock may maintain securities indices. 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In instanc","page_number":46,"box":{"x":116,"y":237,"width":329,"height":9}},{"id":"53bfdb4d-8970-45ad-ba49-7decf8d59144","block_type":"box","text":"es where BlackRock charges a unitary management fee,","page_number":46,"box":{"x":446,"y":237,"width":408,"height":12}},{"id":"865a2b0e-41ec-43db-9b5a-73b5be9c0d49","block_type":"box","text":"BlackRock may have a financial incentive to use a BlackRock index that is less costly to BlackRock than a","page_number":46,"box":{"x":117,"y":252,"width":757,"height":12}},{"id":"f33875ee-f53c-4eda-a02d-3be7e4036718","block_type":"box","text":"third party index. BlackRock may benefit from the Fund","page_number":46,"box":{"x":116,"y":267,"width":396,"height":12}},{"id":"04fbc012-526c-4c00-b862-57fca8599728","block_type":"box","text":"using BlackRock indices by creating increasing","page_number":46,"box":{"x":513,"y":267,"width":338,"height":12}},{"id":"6acb0d71-0625-4624-89f9-92c24554dbe4","block_type":"box","text":"acceptance in the marketplace for such indices. BlackR","page_number":46,"box":{"x":116,"y":282,"width":394,"height":12}},{"id":"50978772-8fae-451e-a328-da9e57fd8225","block_type":"box","text":"ock is not obligated to license its indices to the Fund","page_number":46,"box":{"x":511,"y":283,"width":374,"height":12}},{"id":"4ccf7275-4dff-47bb-bada-1f9b37b16b8e","block_type":"box","text":"and the Fund is under no obligation to use BlackRock indi","page_number":46,"box":{"x":116,"y":298,"width":409,"height":12}},{"id":"73c89f68-7dfa-42b4-81b3-e57c0ac7c1dd","block_type":"box","text":"ces. 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BlackRock may","page_number":46,"box":{"x":497,"y":387,"width":377,"height":12}},{"id":"ba29cffd-8b89-409f-ba18-d6331b261214","block_type":"box","text":"also enter into contractual arrangements with such se","page_number":46,"box":{"x":116,"y":402,"width":380,"height":12}},{"id":"14626912-676b-492f-9d09-114b456bc347","block_type":"box","text":"rvice providers pursuant to which BlackRock incurs","page_number":46,"box":{"x":498,"y":402,"width":366,"height":12}},{"id":"0a902ea2-d4d4-4e32-8dd4-b6c30d71e258","block_type":"box","text":"additional costs if the service provider’s services are","page_number":46,"box":{"x":116,"y":417,"width":361,"height":12}},{"id":"e6146b64-f7f3-4443-951d-dfd5bcd67a00","block_type":"box","text":"re terminated with respect to the Fund. To the extent that","page_number":46,"box":{"x":477,"y":417,"width":403,"height":12}},{"id":"3fc7d38c-af1a-4e1d-a0fb-f3ea455492fe","block_type":"box","text":"BlackRock is responsible for paying service providers out","page_number":46,"box":{"x":117,"y":432,"width":405,"height":13}},{"id":"bb42ae9d-1e09-471d-bdb3-f076255afcb4","block_type":"box","text":"t of its fees that it receives from the Fund, the","page_number":46,"box":{"x":522,"y":432,"width":321,"height":12}},{"id":"552ac0c7-6fef-48f4-a193-f719783df5d6","block_type":"box","text":"benefits of lower fees, including any fee discounts or c","page_number":46,"box":{"x":117,"y":448,"width":383,"height":12}},{"id":"feca8038-4ddd-4779-892f-22bb7a758bf1","block_type":"box","text":"oncessions, or any additional savings, may accrue, in","page_number":46,"box":{"x":501,"y":448,"width":384,"height":12}},{"id":"8c5fa7d9-3c57-46f1-9d34-a2fccc8dea8c","block_type":"box","text":"whole or in part, to BlackRock, which could result in conf","page_number":46,"box":{"x":116,"y":463,"width":401,"height":12}},{"id":"7c80bc0c-ea1d-475c-92a1-0929856d58d0","block_type":"box","text":"licts of interest relating to the use or termination of","page_number":46,"box":{"x":517,"y":463,"width":358,"height":12}},{"id":"0f711c6f-9688-43bd-aefe-cd91a0698a83","block_type":"box","text":"service providers to the Fund. In addition, conflicts","page_number":46,"box":{"x":116,"y":478,"width":361,"height":12}},{"id":"df1f67b8-a27d-4db9-9e63-65b3f043a10e","block_type":"box","text":"of interest may arise with respect to contractual","page_number":46,"box":{"x":477,"y":478,"width":340,"height":12}},{"id":"66475272-0856-4488-871e-55c553e65be9","block_type":"box","text":"arrangements with third-party service providers to the Fund,","page_number":46,"box":{"x":116,"y":494,"width":424,"height":12}},{"id":"b0608846-dac6-4132-a49c-9dd26c921bab","block_type":"box","text":"or the selection of such providers, particularly","page_number":46,"box":{"x":541,"y":493,"width":331,"height":13}},{"id":"10a2da9f-0ce2-4edf-a817-aed32cc6e924","block_type":"box","text":"in circumstances where BlackRock is negotiating on","page_number":46,"box":{"x":117,"y":509,"width":374,"height":12}},{"id":"9a93aa19-7112-4b94-a348-1b458aab27f0","block_type":"box","text":"behalf of both funds that have a unitary management","page_number":46,"box":{"x":491,"y":509,"width":381,"height":12}},{"id":"18b6a152-ea63-4cb4-8830-c79ada1b6dd9","block_type":"box","text":"fee and those that do not or different servic","page_number":46,"box":{"x":116,"y":524,"width":305,"height":9}},{"id":"6cf6fedc-d7d2-40b0-94e1-f2f2b0c5b0d1","block_type":"box","text":"e providers have different fee structures.","page_number":46,"box":{"x":421,"y":524,"width":292,"height":12}},{"id":"5a23abfa-3ecf-481c-881d-84731db69c25","block_type":"box","text":"Conflicts of interest may arise as a result of simultaneous investment management of multiple client","page_number":46,"box":{"x":117,"y":552,"width":744,"height":12}},{"id":"a930e267-5294-4f4a-83bc-ffb0b826c383","block_type":"box","text":"accounts by BlackRock’s investment professionals. For example, differences in the advisory fee","page_number":46,"box":{"x":116,"y":567,"width":716,"height":12}},{"id":"ffcb9148-7886-46b4-803d-57021573f512","block_type":"box","text":"structure may create the appearance of actual or potential conflicts of interest because such","page_number":46,"box":{"x":116,"y":582,"width":689,"height":13}},{"id":"153e9f98-5a09-4753-b27d-42d5f43c119f","block_type":"box","text":"differences could create pecuniary incentives for BlackRock to favor one client account over another.","page_number":46,"box":{"x":116,"y":598,"width":754,"height":12}},{"id":"23cfb46e-648a-4d9c-afa7-3e26cd7909ac","block_type":"box","text":"BlackRock owns or has an ownership interest in certain trading, portfolio management, operations and/","page_number":46,"box":{"x":117,"y":626,"width":765,"height":12}},{"id":"1ade4552-a014-4ef6-b268-0c80b637a774","block_type":"box","text":"or information systems used by Fund service providers. These systems are, or will be, used by the","page_number":46,"box":{"x":116,"y":641,"width":736,"height":12}},{"id":"ba4411aa-7326-42b8-b8cc-4c754dcb791b","block_type":"box","text":"Fund service provider in connection with the provision of services to accounts managed by BlackRock","page_number":46,"box":{"x":117,"y":656,"width":761,"height":12}},{"id":"4c2f7a69-efc6-4410-aa71-d73222217e52","block_type":"box","text":"and funds managed and sponsored by BlackRock, including the Fund, that engage the service","page_number":46,"box":{"x":116,"y":671,"width":702,"height":13}},{"id":"949be83c-85e3-4528-a5e7-2aa662d6aad7","block_type":"box","text":"provider (typically the custodian). The Fund’s service provider remunerates BlackRock for the use of","page_number":46,"box":{"x":117,"y":687,"width":744,"height":12}},{"id":"7fe21a9f-b948-490e-943a-41c47afaf5c8","block_type":"box","text":"the systems. The Fund service provider’s payments to BlackRock for the use of these systems may","page_number":46,"box":{"x":116,"y":702,"width":739,"height":12}},{"id":"f577a9be-a0b4-4bb2-8c77-fb34e6cdefe1","block_type":"box","text":"enhance the profitability of BlackRock.","page_number":46,"box":{"x":116,"y":717,"width":284,"height":12}},{"id":"e8aa8e09-049e-4a15-b3d2-0c785594391b","block_type":"box","text":"BlackRock’s receipt of fees from a service provider in connection with the use of systems provided by","page_number":46,"box":{"x":117,"y":745,"width":752,"height":12}},{"id":"eff2ec60-6560-417e-a31c-0f4bfc9a0a99","block_type":"box","text":"BlackRock may create an incentive for BlackRock to recommend that the Fund enter into or renew an","page_number":46,"box":{"x":117,"y":761,"width":753,"height":12}},{"id":"62c4a9a4-fb1a-4018-93d4-f14c4b68980a","block_type":"box","text":"arrangement with the service provider.","page_number":46,"box":{"x":116,"y":776,"width":285,"height":12}},{"id":"c7edf095-f7d7-459a-9e04-69a7157f3ba2","block_type":"box","text":"In recognition of a BlackRock client’s overall relationship with BlackRock, BlackRock may offer special","page_number":46,"box":{"x":117,"y":804,"width":722,"height":12}},{"id":"5fe6e382-20c3-4778-a413-462f5402bb69","block_type":"box","text":"pricing arrangements for certain services provided by","page_number":46,"box":{"x":117,"y":819,"width":377,"height":12}},{"id":"89571366-8124-4682-b19d-e070310fb8b9","block_type":"box","text":"BlackRock. Any such special pricing arrangements","page_number":46,"box":{"x":499,"y":819,"width":360,"height":12}},{"id":"396fc3cc-b1e8-4f3e-b3a1-3414a18f95c8","block_type":"box","text":"will not affect Fund fees and expenses applicable to","page_number":46,"box":{"x":116,"y":834,"width":367,"height":12}},{"id":"2eca0e26-45b6-4b5a-81c7-bf51008b845d","block_type":"box","text":"such client’s investment in the Fund.","page_number":46,"box":{"x":484,"y":834,"width":268,"height":10}},{"id":"0ccb93d2-c1ae-40dd-bcbc-f435587ce921","block_type":"box","text":"Present and future activities of BlackRock and its directors, officers and employees, in addition to those","page_number":46,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"37030155-08b8-4196-8610-0fdaac20ae2e","block_type":"box","text":"described in this section, may give rise to additional conflicts of interest.","page_number":46,"box":{"x":116,"y":878,"width":537,"height":12}},{"id":"8de26b0f-eb5d-4448-9e7b-08572d32017d","block_type":"box","text":"38","page_number":46,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"74a01362-ce92-4e45-9125-028aea233d2a","block_type":"box","text":"NM1026U-6030748-46/260","page_number":46,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"59dcd3d2-1b17-45ce-b104-03340c47978d","block_type":"box","text":"Investment Advisory, Administrative and","page_number":47,"box":{"x":119,"y":92,"width":726,"height":29}},{"id":"62d38129-e9ac-4cda-a0fb-44754d262754","block_type":"box","text":"Distribution Services","page_number":47,"box":{"x":119,"y":126,"width":376,"height":22}},{"id":"500620f0-c46c-448e-af86-338e8da836f1","block_type":"box","text":"Investment Adviser.","page_number":47,"box":{"x":117,"y":175,"width":163,"height":10}},{"id":"8a26a1d6-fb82-4a25-a948-0cd4d109fea1","block_type":"box","text":"BFA serves as investment adviser to the Fund pursuant to an investment","page_number":47,"box":{"x":282,"y":175,"width":546,"height":12}},{"id":"a1ab3166-07c4-4800-96fa-e4a809b75b31","block_type":"box","text":"advisory agreement between the Trust, on behalf of the Fund, and BFA (the “Investment Advisory","page_number":47,"box":{"x":116,"y":191,"width":731,"height":12}},{"id":"cfa08b61-bcbd-429f-9b0b-24ec0c82b1ba","block_type":"box","text":"Agreement”). BFA is a California corporation indirectly owned by BlackRock, Inc. and is registered as","page_number":47,"box":{"x":116,"y":206,"width":755,"height":12}},{"id":"980e37d4-f942-4ed8-b185-2b4c44054163","block_type":"box","text":"an investment adviser under the Investment Advisers Act of 1940, as amended. Under the Investment","page_number":47,"box":{"x":116,"y":222,"width":763,"height":11}},{"id":"0a313aec-db45-4d9a-b743-97a9fc4d04e4","block_type":"box","text":"Advisory Agreement, BFA, subject to the supervision of the Board and in conformity with the stated","page_number":47,"box":{"x":116,"y":237,"width":740,"height":12}},{"id":"25117bba-4dbc-450d-9417-97e7292b4188","block_type":"box","text":"investment policies of the Fund, manages and administers the Trust and the investment of the Fund’s","page_number":47,"box":{"x":117,"y":253,"width":758,"height":12}},{"id":"fa32d1e2-74c6-494e-b64e-0b37b85a1b38","block_type":"box","text":"assets. BFA is responsible for making investment decisions for the Fund.","page_number":47,"box":{"x":116,"y":268,"width":547,"height":12}},{"id":"6eccf33c-3b07-4f75-be83-f3e84e7d6c12","block_type":"box","text":"Pursuant to the Investment Advisory Agreement, BFA may, from time to time, in its sole discretion and","page_number":47,"box":{"x":117,"y":298,"width":764,"height":12}},{"id":"6fd2d683-b430-4f06-bf3e-76edd68a458e","block_type":"box","text":"to the extent permitted by applicable law, appoint one or more sub-advisers, including, without","page_number":47,"box":{"x":116,"y":313,"width":703,"height":12}},{"id":"9071dcc5-0767-48f7-ab4f-80dd0bb3e8a8","block_type":"box","text":"limitation, affiliates of BFA, to perform investment advisory or other services with respect to the Fund.","page_number":47,"box":{"x":117,"y":329,"width":755,"height":12}},{"id":"0c0affcd-a339-40ac-8993-ac57fda49b3c","block_type":"box","text":"In addition, BFA may delegate certain of its investment advisory functions under the Investment","page_number":47,"box":{"x":117,"y":344,"width":713,"height":12}},{"id":"bc47cc90-9416-4236-9013-b59db0b2222a","block_type":"box","text":"Advisory Agreement to one or more of its affiliates to the extent permitted by applicable law. BFA may","page_number":47,"box":{"x":116,"y":360,"width":761,"height":12}},{"id":"a3f69a78-2f34-4272-83b3-0fe85b9848f5","block_type":"box","text":"terminate any or all sub-advisers or such delegation arrangements in its sole discretion upon","page_number":47,"box":{"x":116,"y":375,"width":692,"height":12}},{"id":"b7f601df-7a7d-481c-93bb-9cf946be15b5","block_type":"box","text":"appropriate notice at any time to the extent permitted by applicable law.","page_number":47,"box":{"x":116,"y":391,"width":536,"height":12}},{"id":"e8ea56af-f17a-4a91-8c63-45c23e30c783","block_type":"box","text":"BFA is responsible, under the Investment Advisory Agreement, for substantially all expenses of the","page_number":47,"box":{"x":117,"y":420,"width":739,"height":12}},{"id":"d3576215-4f64-4238-81de-581d8bcddfd6","block_type":"box","text":"Fund, including the cost of transfer agency, custody, fund administration, legal, audit and other","page_number":47,"box":{"x":117,"y":436,"width":706,"height":12}},{"id":"c2b593bd-ad48-4fb9-a100-79e981f16fb2","block_type":"box","text":"services. BFA is not responsible for, and the Fund will bear the cost of, the management fees, interest","page_number":47,"box":{"x":116,"y":451,"width":762,"height":12}},{"id":"161bf637-64d7-4401-9783-23062aeb4cfc","block_type":"box","text":"expenses, taxes, expenses incurred with respect to the acquisition and disposition of portfolio","page_number":47,"box":{"x":116,"y":467,"width":699,"height":12}},{"id":"5b976dc9-c2d0-4d06-8b44-24ca9641972c","block_type":"box","text":"securities and the execution of portfolio transactions, including brokerage commissions, distribution","page_number":47,"box":{"x":116,"y":482,"width":741,"height":12}},{"id":"73aab304-8821-41a0-8c7d-b25ba36f0b87","block_type":"box","text":"fees or expenses, litigation expenses and any extraordinary expenses (as determined by a majority of","page_number":47,"box":{"x":116,"y":498,"width":760,"height":12}},{"id":"163c51bc-2a0f-4e97-a336-dad088221bde","block_type":"box","text":"the Independent Trustees).","page_number":47,"box":{"x":116,"y":513,"width":206,"height":12}},{"id":"ffa7e7e6-79e9-4de6-bbd9-a05e36f68a80","block_type":"box","text":"For its investment advisory services to the Fund, BFA is paid a management fee by the Fund, based","page_number":47,"box":{"x":117,"y":543,"width":749,"height":12}},{"id":"1c149636-2ffc-43a9-a437-e888420ad0b8","block_type":"box","text":"on a percentage of the Fund’s average daily net assets, at an annual rate of 0.80%.","page_number":47,"box":{"x":116,"y":558,"width":626,"height":12}},{"id":"3cdf2165-24f2-4aff-8605-aaa200da0cc5","block_type":"box","text":"BFA has contractually agreed to waive a portion of its management fees in an amount equal to the","page_number":47,"box":{"x":117,"y":588,"width":735,"height":12}},{"id":"adbfb0ed-062d-40c6-b28c-bb701c70ebbe","block_type":"box","text":"aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in other","page_number":47,"box":{"x":116,"y":603,"width":758,"height":12}},{"id":"7a54b086-8fb6-47c3-b8d0-ed82bb53da1b","block_type":"box","text":"equity and fixed-income mutual funds and ETFs advised by BFA or its affiliates through June 30, 2027.","page_number":47,"box":{"x":116,"y":619,"width":769,"height":12}},{"id":"1cb19556-43a9-40cb-9de7-c1fa22538f19","block_type":"box","text":"BFA has also contractually agreed to waive a portion of its management fees by an amount equal to","page_number":47,"box":{"x":117,"y":634,"width":747,"height":12}},{"id":"635969dc-14c0-4c51-b82a-5adba7021020","block_type":"box","text":"the aggregate Acquired Fund Fees and Expenses, if any, attributable to investments by the Fund in","page_number":47,"box":{"x":116,"y":650,"width":743,"height":12}},{"id":"65f50cfa-7c17-4e6e-9eaf-80c1ffb3f480","block_type":"box","text":"money market funds advised by BFA or its affiliates through June 30, 2027. The agreement (with","page_number":47,"box":{"x":117,"y":665,"width":717,"height":12}},{"id":"8db31e51-3f19-4bc5-b480-c7036f23c8e5","block_type":"box","text":"respect to either waiver) may be terminated upon 90 days’ notice by a majority of the non-interested","page_number":47,"box":{"x":117,"y":681,"width":740,"height":12}},{"id":"784d1428-ba2e-44c0-820b-2397f14d484a","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":47,"box":{"x":116,"y":696,"width":696,"height":12}},{"id":"f9d0041a-e5b7-48b5-bf00-c087351742b0","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":47,"box":{"x":117,"y":725,"width":750,"height":13}},{"id":"6a8321b7-71cb-44f0-b8f6-02de78ab679a","block_type":"box","text":"limit total annual fund operating expenses (excluding acquired fund fees and expenses, if any). 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The Investment Advisory Agreement is also terminable upon 60","page_number":48,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"2b2e0544-75cd-43c9-b554-b800745ff82b","block_type":"box","text":"days’ notice by BFA and will terminate automatically in the event of its assignment (as defined in the","page_number":48,"box":{"x":116,"y":242,"width":748,"height":12}},{"id":"4239fd8f-1008-427d-a572-1d4762a431b2","block_type":"box","text":"1940 Act).","page_number":48,"box":{"x":118,"y":258,"width":79,"height":12}},{"id":"cb801688-b897-4c35-9dd9-68ada0abf414","block_type":"box","text":"Investment Sub-Adviser.","page_number":48,"box":{"x":117,"y":289,"width":195,"height":9}},{"id":"f836dc25-7807-422e-9e12-fb505206a701","block_type":"box","text":"Pursuant to the Investment Advisory Agreement between BFA and the","page_number":48,"box":{"x":313,"y":289,"width":534,"height":12}},{"id":"4a80cfc2-26c9-4b86-a274-f82ee7cbb4bb","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":48,"box":{"x":116,"y":304,"width":767,"height":12}},{"id":"892fd186-ceaf-468e-afe7-b421c1d303c3","block_type":"box","text":"permitted by applicable law, appoint one or more sub-advisers, including, without limitation, affiliates of","page_number":48,"box":{"x":117,"y":320,"width":766,"height":12}},{"id":"8a0e924c-10f1-43c5-bae4-e375107221c0","block_type":"box","text":"BFA, to perform investment advisory services with respect to the Fund. In addition, BFA may delegate","page_number":48,"box":{"x":117,"y":335,"width":762,"height":12}},{"id":"1f613214-058c-446a-8020-dfca43879448","block_type":"box","text":"certain of its investment advisory functions under the Investment Advisory Agreement to one or more","page_number":48,"box":{"x":116,"y":351,"width":754,"height":12}},{"id":"d17120da-7e52-42d7-85e5-fca10928ec29","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":48,"box":{"x":116,"y":366,"width":758,"height":12}},{"id":"4cd4c638-bd39-40e4-8943-88f043a68e84","block_type":"box","text":"such delegation arrangements in its sole discretion at any time to the extent permitted by applicable","page_number":48,"box":{"x":116,"y":382,"width":745,"height":12}},{"id":"facf5e3f-cbb9-4f2f-bce9-1b25085c5246","block_type":"box","text":"law.","page_number":48,"box":{"x":117,"y":397,"width":33,"height":10}},{"id":"fd6fb0a9-514b-4249-a1fd-03709ed37d84","block_type":"box","text":"Portfolio Managers.","page_number":48,"box":{"x":117,"y":428,"width":155,"height":12}},{"id":"3242a46d-b677-4b26-b4b7-356bb37e916b","block_type":"box","text":"As of October 31, 2025, the individuals named as Portfolio Managers in the","page_number":48,"box":{"x":273,"y":428,"width":569,"height":12}},{"id":"fb76a135-ee56-46c0-a9b7-ad03bb23b796","block_type":"box","text":"Fund’s Prospectus were also primarily responsible for the day-to-day management of other BlackRock","page_number":48,"box":{"x":117,"y":444,"width":764,"height":12}},{"id":"7fee302e-4b5b-44d8-b2f0-d0b887f50908","block_type":"box","text":"funds and certain other types of portfolios and/or accounts as follows:","page_number":48,"box":{"x":116,"y":459,"width":521,"height":12}},{"id":"2ee33732-62cd-46ba-b9df-532ef3e83324","block_type":"box","text":"Jeffrey Rosenberg","page_number":48,"box":{"x":116,"y":490,"width":152,"height":12}},{"id":"d3df9519-0fa2-479a-a795-e57987a2f8a5","block_type":"box","text":"Types of Accounts","page_number":48,"box":{"x":116,"y":518,"width":120,"height":9}},{"id":"3aa0c955-1348-4313-93e5-c18505a3393e","block_type":"box","text":"Number","page_number":48,"box":{"x":699,"y":518,"width":50,"height":7}},{"id":"a4dcc172-3f25-43a5-891e-3289305c7448","block_type":"box","text":"Total Assets","page_number":48,"box":{"x":793,"y":518,"width":79,"height":7}},{"id":"47ede23c-155d-4735-ab5b-220d0093984a","block_type":"box","text":"Registered Investment Companies 7 $12.08 Billion","page_number":48,"box":{"x":117,"y":536,"width":771,"height":13}},{"id":"a60a5766-1b90-4df8-af46-4b2effb52787","block_type":"box","text":"Other Pooled Investment Vehicles 6 1.41 Billion","page_number":48,"box":{"x":116,"y":552,"width":772,"height":10}},{"id":"55a19cd7-3f89-4feb-966f-657ed0c901cb","block_type":"box","text":"Other Accounts 0 0","page_number":48,"box":{"x":116,"y":568,"width":772,"height":9}},{"id":"2928d7d8-7b6d-4846-a37a-92cf0d5df642","block_type":"box","text":"Richard Mathieson","page_number":48,"box":{"x":117,"y":599,"width":154,"height":9}},{"id":"4ec97f3c-ffb5-40ec-9d58-73a10d8101b2","block_type":"box","text":"Types of Accounts","page_number":48,"box":{"x":116,"y":626,"width":120,"height":10}},{"id":"c17571df-947e-4357-af50-1faba248cee7","block_type":"box","text":"Number","page_number":48,"box":{"x":699,"y":626,"width":50,"height":8}},{"id":"af4a7fc0-fc1d-4b6e-947a-81709c9f8e22","block_type":"box","text":"Total Assets","page_number":48,"box":{"x":793,"y":626,"width":79,"height":8}},{"id":"94727828-298e-49d4-88a0-84b73a979092","block_type":"box","text":"Registered Investment Companies 31 $32.44 Billion","page_number":48,"box":{"x":117,"y":644,"width":771,"height":13}},{"id":"4a0e8a06-06a9-48a9-9e47-c8573f4e469d","block_type":"box","text":"Other Pooled Investment Vehicles 216 34.45 Billion","page_number":48,"box":{"x":116,"y":661,"width":766,"height":9}},{"id":"18f1bfdf-1bd4-47ca-99b6-7042cf417b94","block_type":"box","text":"Other Accounts 44 61.77 Billion","page_number":48,"box":{"x":116,"y":676,"width":766,"height":10}},{"id":"a6e3bece-2dbc-4d3b-9e11-abdf73b680e5","block_type":"box","text":"Stephanie Lee","page_number":48,"box":{"x":116,"y":707,"width":113,"height":12}},{"id":"90a6598f-327c-46f9-88ca-b2cf49aabe89","block_type":"box","text":"Types of Accounts","page_number":48,"box":{"x":116,"y":735,"width":120,"height":10}},{"id":"38ffc5d8-e23f-4449-a4fc-529d43cfd389","block_type":"box","text":"Number","page_number":48,"box":{"x":696,"y":735,"width":50,"height":8}},{"id":"ce0870b9-2492-49e4-8d5e-0eb90b836381","block_type":"box","text":"Total Assets","page_number":48,"box":{"x":792,"y":735,"width":79,"height":8}},{"id":"666ce6a4-3bbc-4d2c-975c-9e3a8837f489","block_type":"box","text":"Registered Investment Companies 0 $ 0","page_number":48,"box":{"x":117,"y":753,"width":766,"height":13}},{"id":"d80bc7a8-664e-4f57-9242-0b5681da430b","block_type":"box","text":"Other Pooled Investment Vehicles 4 341.8 Million","page_number":48,"box":{"x":116,"y":769,"width":766,"height":10}},{"id":"640e8f60-0f03-4f55-9b3a-1450d0946135","block_type":"box","text":"Other Accounts 0 0","page_number":48,"box":{"x":116,"y":785,"width":767,"height":9}},{"id":"c2cd8cb2-f9ac-430a-b07a-bb86708965fd","block_type":"box","text":"Pursuant to BFA’s policy, investment opportunities are allocated equitably among the Fund and other","page_number":48,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"21b3c773-44c3-45cf-b11b-8fc96af48dc6","block_type":"box","text":"portfolios and accounts. For example, under certain circumstances, an investment opportunity may be","page_number":48,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"7f0f6a20-45f8-484f-bfa6-1eb8bc66230c","block_type":"box","text":"restricted due to limited supply in the market, legal constraints or other factors, in which event the","page_number":48,"box":{"x":117,"y":847,"width":726,"height":12}},{"id":"35481a46-0dbc-4e32-bfca-58f52c1e8450","block_type":"box","text":"investment opportunity will be allocated equitably among those portfolios and accounts, including the","page_number":48,"box":{"x":117,"y":862,"width":752,"height":12}},{"id":"b5e9f1f5-6c68-4f3d-9838-27cf89750f3d","block_type":"box","text":"Fund, seeking such investment opportunity. As a consequence, from time to time the Fund may","page_number":48,"box":{"x":117,"y":878,"width":714,"height":12}},{"id":"2250b391-cb3c-4a61-b8b6-43e00da72d4c","block_type":"box","text":"40","page_number":48,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"907611d4-4f86-4255-9ef4-1e34cba62b88","block_type":"box","text":"NM1026U-6030748-48/260","page_number":48,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4d838bef-b5e6-469d-9a41-2d91514e7fa5","block_type":"box","text":"receive a smaller allocation of an investment opportunity than it would have if the Portfolio Managers","page_number":49,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"ce2d518d-42a4-4b99-9338-a1af8730f1d2","block_type":"box","text":"and BFA and its affiliates did not manage other portfolios or accounts.","page_number":49,"box":{"x":116,"y":102,"width":524,"height":13}},{"id":"e46e528c-2418-48a5-9584-42ff86529512","block_type":"box","text":"Like the Fund, the other portfolios or accounts for which the Portfolio Managers are primarily","page_number":49,"box":{"x":117,"y":132,"width":689,"height":12}},{"id":"c937d234-3828-453b-8e72-fa947a481566","block_type":"box","text":"responsible for the day-to-day portfolio management generally pay an asset-based fee to BFA or its","page_number":49,"box":{"x":117,"y":147,"width":744,"height":12}},{"id":"0935ea1d-aa5d-49f3-beb6-9716f9c5a51d","block_type":"box","text":"affiliates, as applicable, for its advisory services. One or more of those other portfolios or accounts,","page_number":49,"box":{"x":116,"y":163,"width":739,"height":12}},{"id":"7fd7c4d9-b37b-4cb5-881e-bf72484e63d1","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":49,"box":{"x":117,"y":178,"width":743,"height":12}},{"id":"6b99e843-e73a-4522-8b7c-77138f71ee42","block_type":"box","text":"based fee for its advisory services. A portfolio or account with a performance-based fee would pay BFA","page_number":49,"box":{"x":117,"y":194,"width":771,"height":12}},{"id":"207f86f8-3bef-448a-af22-7ad25ff33aa8","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":49,"box":{"x":116,"y":209,"width":763,"height":12}},{"id":"4656e7af-d94c-4f6a-be81-f754dd381c57","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":49,"box":{"x":117,"y":225,"width":759,"height":12}},{"id":"8765c663-ca31-4f85-866b-c531abb0120c","block_type":"box","text":"performance targets. Performance-based fee arrangements could present an incentive for BFA or its","page_number":49,"box":{"x":117,"y":240,"width":751,"height":12}},{"id":"c28033c0-ff21-4987-a62f-8106d7632de2","block_type":"box","text":"affiliates to devote greater resources, and allocate more investment opportunities, to the portfolios or","page_number":49,"box":{"x":116,"y":256,"width":751,"height":12}},{"id":"99ed6e6c-c64a-457f-9d63-2c90a33c6521","block_type":"box","text":"accounts that have those fee arrangements, relative to other portfolios or accounts, in order to earn","page_number":49,"box":{"x":116,"y":271,"width":742,"height":12}},{"id":"f2110743-8450-4215-a723-9218820da538","block_type":"box","text":"larger fees. Although BFA and each of its affiliates have an obligation to allocate resources and","page_number":49,"box":{"x":117,"y":287,"width":711,"height":12}},{"id":"254a0db8-c5c0-40e6-b420-2f258fb9a3e2","block_type":"box","text":"opportunities equitably among portfolios and accounts and intend to do so, shareholders of the Fund","page_number":49,"box":{"x":116,"y":302,"width":751,"height":12}},{"id":"9568089a-6e5e-494a-8a67-a06e0e6189bc","block_type":"box","text":"should be aware that, as with any group of portfolios and accounts managed by an investment adviser","page_number":49,"box":{"x":116,"y":318,"width":764,"height":12}},{"id":"9233f3e5-abb5-4ab3-b64d-fbb729c2b30b","block_type":"box","text":"and/or its affiliates pursuant to varying fee arrangements, including performance-based fee","page_number":49,"box":{"x":116,"y":333,"width":679,"height":12}},{"id":"b7063574-19ce-4d4d-a5e5-3fd65a73443f","block_type":"box","text":"arrangements, there is the potential for a conflict of interest, which may result in the Portfolio Managers","page_number":49,"box":{"x":116,"y":349,"width":770,"height":12}},{"id":"d6afd67a-c133-4896-8072-2e46a714cc03","block_type":"box","text":"favoring those portfolios or accounts with performance-based fee arrangements.","page_number":49,"box":{"x":116,"y":364,"width":601,"height":12}},{"id":"88f157c2-9573-45da-90c2-e1e2ad15ba5e","block_type":"box","text":"The tables below show, for each Portfolio Manager, the number of portfolios or accounts of the types","page_number":49,"box":{"x":116,"y":393,"width":753,"height":12}},{"id":"5fee8dd8-ded5-4f00-b136-be162702fd04","block_type":"box","text":"set forth in the above tables and the aggregate of total assets in those portfolios or accounts with","page_number":49,"box":{"x":116,"y":409,"width":724,"height":12}},{"id":"d31a8af4-5ff0-4743-b200-e7b5fefad9ed","block_type":"box","text":"respect to which the investment management fees are based on the performance of those portfolios or","page_number":49,"box":{"x":117,"y":424,"width":766,"height":12}},{"id":"fcc115fc-6750-41bd-8f59-a9d39a17b90d","block_type":"box","text":"accounts as of October 31, 2025:","page_number":49,"box":{"x":116,"y":440,"width":252,"height":11}},{"id":"5c7c479c-d7f0-4642-85e3-9999ae248c91","block_type":"box","text":"Jeffrey Rosenberg","page_number":49,"box":{"x":116,"y":469,"width":152,"height":12}},{"id":"2678ad37-d7d7-43ef-9f53-1819afce4d37","block_type":"box","text":"Types of Accounts","page_number":49,"box":{"x":116,"y":536,"width":120,"height":10}},{"id":"15582cd2-893d-43f3-be0c-fd0da9b0515b","block_type":"box","text":"Number of Other","page_number":49,"box":{"x":620,"y":495,"width":106,"height":7}},{"id":"1ecff7e1-230e-41a9-8ea5-718c7c9194eb","block_type":"box","text":"Accounts","page_number":49,"box":{"x":642,"y":505,"width":60,"height":8}},{"id":"ae884dbb-2d47-4f4f-a063-01a03629cab0","block_type":"box","text":"with Performance 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Million","page_number":49,"box":{"x":116,"y":570,"width":772,"height":10}},{"id":"c5d289ca-9c9a-45b6-b4fe-19609441652b","block_type":"box","text":"Other Accounts 0 0","page_number":49,"box":{"x":116,"y":586,"width":772,"height":9}},{"id":"b65cd9af-1277-48cb-ac6e-887c78b26fed","block_type":"box","text":"Richard Mathieson","page_number":49,"box":{"x":117,"y":615,"width":154,"height":9}},{"id":"01a0c108-8cd9-4bfb-ac8d-88edb3732504","block_type":"box","text":"Types of Accounts","page_number":49,"box":{"x":116,"y":682,"width":120,"height":10}},{"id":"94285685-6b9b-4991-891e-efcf54028495","block_type":"box","text":"Number of Other","page_number":49,"box":{"x":623,"y":641,"width":106,"height":7}},{"id":"d2c4150b-52ae-4a52-b569-632cfb81c017","block_type":"box","text":"Accounts","page_number":49,"box":{"x":644,"y":651,"width":61,"height":8}},{"id":"f98ff1e7-fa8c-41a5-bcfa-d3340bfea3fd","block_type":"box","text":"with Performance 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Billion","page_number":49,"box":{"x":116,"y":716,"width":766,"height":10}},{"id":"349c0fd5-dd0d-494c-9641-8a08b1e7c918","block_type":"box","text":"Other Accounts 9 10.65 Billion","page_number":49,"box":{"x":116,"y":732,"width":766,"height":9}},{"id":"f322caca-63ce-421b-9e38-1ed0f8385e39","block_type":"box","text":"Stephanie Lee","page_number":49,"box":{"x":116,"y":761,"width":113,"height":12}},{"id":"0f71aec1-82f4-478f-902a-bf45b71344aa","block_type":"box","text":"Types of Accounts","page_number":49,"box":{"x":116,"y":828,"width":120,"height":10}},{"id":"c6131a95-7cde-4d9c-9c6a-fb38590976f7","block_type":"box","text":"Number of Other","page_number":49,"box":{"x":620,"y":787,"width":106,"height":7}},{"id":"7802c573-e8ba-4133-87cd-3c56da2a1d81","block_type":"box","text":"Accounts","page_number":49,"box":{"x":642,"y":797,"width":60,"height":8}},{"id":"c25e52d0-4bf8-4d6e-8fcc-0b5a813fcdd1","block_type":"box","text":"with Performance 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Million","page_number":49,"box":{"x":116,"y":862,"width":772,"height":10}},{"id":"ab08ef8c-ebcd-4bac-97d2-22e7ddfddf5c","block_type":"box","text":"Other Accounts 0 0","page_number":49,"box":{"x":116,"y":878,"width":772,"height":9}},{"id":"44f28674-e132-42ea-935c-b039abfd3b9c","block_type":"box","text":"41","page_number":49,"box":{"x":490,"y":909,"width":16,"height":9}},{"id":"e6529267-0321-4886-af91-f58aa7770761","block_type":"box","text":"NM1026U-6030748-49/260","page_number":49,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2622a24f-b996-489e-9832-1d67382f62e2","block_type":"box","text":"Portfolio Manager Compensation Overview","page_number":50,"box":{"x":117,"y":87,"width":348,"height":12}},{"id":"df2a0698-7fe2-4fb2-b810-e514df94e647","block_type":"box","text":"The discussion below describes the Portfolio Managers’ compensation as of October 31, 2025.","page_number":50,"box":{"x":116,"y":110,"width":710,"height":12}},{"id":"5794bb70-58d7-4ccc-b97b-b196969efac1","block_type":"box","text":"BlackRock, Inc.’s financial arrangements with its portfolio managers, its competitive compensation and","page_number":50,"box":{"x":117,"y":141,"width":765,"height":12}},{"id":"11ddcce3-c4ce-49bd-90c1-341bcffef48e","block_type":"box","text":"its career path emphasis at all levels reflect the value senior management places on key resources.","page_number":50,"box":{"x":117,"y":157,"width":743,"height":12}},{"id":"734855d6-e417-405f-acf5-2bac0d42d3dc","block_type":"box","text":"Compensation may include a variety of components and may vary from year to year based on a","page_number":50,"box":{"x":117,"y":172,"width":716,"height":12}},{"id":"e4a78254-42b1-4c79-b9fa-36cca2220805","block_type":"box","text":"number of factors. The principal components of compensation include a base salary, a performance","page_number":50,"box":{"x":117,"y":188,"width":746,"height":12}},{"id":"f5a8b818-3601-479e-87bd-c336ffe61256","block_type":"box","text":"based discretionary bonus, participation in various benefits programs and one or more of the incentive","page_number":50,"box":{"x":117,"y":203,"width":762,"height":12}},{"id":"98f2e231-734c-42b6-9bae-8cb99459b202","block_type":"box","text":"compensation programs established by BlackRock, Inc.","page_number":50,"box":{"x":116,"y":219,"width":418,"height":12}},{"id":"58f85436-d29d-4dc3-8049-bbdbba30b264","block_type":"box","text":"Base compensation.","page_number":50,"box":{"x":117,"y":250,"width":161,"height":12}},{"id":"33487c3e-dd6d-4d81-94c5-43f0c37288c5","block_type":"box","text":"Generally, portfolio managers receive base compensation based on their","page_number":50,"box":{"x":279,"y":250,"width":551,"height":12}},{"id":"0690392d-5461-4485-a7c8-4a43c8f1a421","block_type":"box","text":"position with the firm.","page_number":50,"box":{"x":117,"y":265,"width":161,"height":12}},{"id":"ed0a7ec0-951d-44a2-bb8f-ce6e7c230b1e","block_type":"box","text":"Discretionary Incentive Compensation — Mr. Mathieson and Ms. Lee.","page_number":50,"box":{"x":117,"y":296,"width":550,"height":12}},{"id":"1170da26-706f-4255-9c80-194c3bb77ad7","block_type":"box","text":"Discretionary incentive","page_number":50,"box":{"x":668,"y":296,"width":179,"height":12}},{"id":"b24133b6-d162-4809-88ed-ef02a16920fd","block_type":"box","text":"compensation is a function of several components: the performance of BlackRock, Inc., the","page_number":50,"box":{"x":116,"y":312,"width":682,"height":12}},{"id":"a9859981-7e74-4d1b-b927-83c72fcef48b","block_type":"box","text":"performance of the portfolio manager’s group within BlackRock, the investment performance, including","page_number":50,"box":{"x":117,"y":327,"width":766,"height":12}},{"id":"c736c7c7-4d3a-4b31-a340-ed3285a3299f","block_type":"box","text":"risk-adjusted returns, of the firm’s assets under management or supervision by that portfolio manager","page_number":50,"box":{"x":117,"y":343,"width":757,"height":12}},{"id":"f4e08fbe-db0d-423b-9185-51038116948c","block_type":"box","text":"relative to predetermined benchmarks, and the individual’s performance and contribution to the overall","page_number":50,"box":{"x":117,"y":358,"width":763,"height":12}},{"id":"269f53ee-b80a-429c-bf13-3f93c1a6b5c6","block_type":"box","text":"performance of these portfolios and BlackRock. Among other things, BlackRock’s Chief Investment","page_number":50,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"e0b8d739-74e7-467d-935b-4ef546b422b4","block_type":"box","text":"Officers make a subjective determination with respect to each portfolio manager’s compensation based","page_number":50,"box":{"x":116,"y":389,"width":771,"height":12}},{"id":"93ed2d0c-7bce-4644-af57-714edbe29ba3","block_type":"box","text":"on the performance of the Funds and other accounts managed by each portfolio manager relative to","page_number":50,"box":{"x":116,"y":405,"width":748,"height":12}},{"id":"d60b42ec-aa3b-4a9c-832d-7191dd4b8384","block_type":"box","text":"the various benchmarks. Performance is generally assessed over trailing 1-,3-, and 5-year periods","page_number":50,"box":{"x":116,"y":420,"width":735,"height":12}},{"id":"001d3dbe-9b1c-4800-9681-0ed8a8e257bc","block_type":"box","text":"relative to applicable benchmarks. The performance of Mr. Maiethson and Ms. Lee is not measured","page_number":50,"box":{"x":117,"y":436,"width":743,"height":12}},{"id":"fe86f4be-d0c9-4df4-945b-16de74d53078","block_type":"box","text":"against a specific benchmark.","page_number":50,"box":{"x":116,"y":451,"width":226,"height":12}},{"id":"f2dee51a-a666-4c63-b037-f72b0465581c","block_type":"box","text":"Discretionary Incentive Compensation. — Mr. Rosenberg.","page_number":50,"box":{"x":117,"y":482,"width":458,"height":12}},{"id":"0612f044-7f07-4fe7-9cba-a89a70cf3d48","block_type":"box","text":"Discretionary incentive compensation is","page_number":50,"box":{"x":576,"y":482,"width":305,"height":12}},{"id":"11ae119d-41d3-47ad-bbcf-73884d2158e2","block_type":"box","text":"a function of several components: the performance of BlackRock, Inc., the performance of the portfolio","page_number":50,"box":{"x":116,"y":498,"width":767,"height":12}},{"id":"847a7bb5-abf4-4457-b643-4605163bf0d7","block_type":"box","text":"manager’s group within BlackRock, the investment performance, including risk-adjusted returns, of the","page_number":50,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"bae794a3-cf9f-4f7b-b58c-5ffeaa4878c1","block_type":"box","text":"firm’s assets under management or supervision by that portfolio manager relative to predetermined","page_number":50,"box":{"x":116,"y":529,"width":740,"height":12}},{"id":"88d3ccdb-3e57-4d83-b75f-8bcc206e333a","block_type":"box","text":"benchmarks, and the individual’s performance and contribution to the overall performance of these","page_number":50,"box":{"x":117,"y":544,"width":736,"height":12}},{"id":"1a8f6aaa-4abd-49e2-8b7b-01de9d55da4f","block_type":"box","text":"portfolios and BlackRock. In most cases, these benchmarks are the same as the benchmark or","page_number":50,"box":{"x":117,"y":560,"width":710,"height":12}},{"id":"ecec88e0-3fc8-40cb-a214-37c7174c8c67","block_type":"box","text":"benchmarks against which the performance of the Funds or other accounts managed by the portfolio","page_number":50,"box":{"x":117,"y":575,"width":752,"height":12}},{"id":"cf86c305-fcc0-4804-b696-cdd962f7ccd6","block_type":"box","text":"managers are measured. Among other things, BlackRock’s Chief Investment Officers make a","page_number":50,"box":{"x":117,"y":591,"width":697,"height":12}},{"id":"50148485-6c92-4c90-8ed9-cc5953f6fa95","block_type":"box","text":"subjective determination with respect to each portfolio manager’s compensation based on the","page_number":50,"box":{"x":116,"y":606,"width":699,"height":12}},{"id":"a88517c2-f993-4ec5-876a-9206f6226f9c","block_type":"box","text":"performance of the Funds and other accounts managed by each portfolio manager relative to the","page_number":50,"box":{"x":117,"y":622,"width":724,"height":12}},{"id":"82fab4c8-ba60-47ab-be6b-e647b5c37743","block_type":"box","text":"various benchmarks. Performance of fixed income funds is measured on a pre-tax and/or after-tax","page_number":50,"box":{"x":116,"y":637,"width":734,"height":12}},{"id":"28c1cf63-47be-48d8-bbe6-d4a7b7a70575","block_type":"box","text":"basis over various time periods including 1-, 3- and 5- year periods, as applicable. With respect to Mr.","page_number":50,"box":{"x":117,"y":653,"width":758,"height":12}},{"id":"e7083dab-6fec-4211-9105-9b51e5fbebaa","block_type":"box","text":"Rosenberg, such benchmarks for the Fund and other accounts are: ICE BofA 3-Month U.S. Treasury","page_number":50,"box":{"x":117,"y":668,"width":748,"height":12}},{"id":"021749b4-b3ca-4997-92ab-3d129eee5c3a","block_type":"box","text":"Bill index; FTSE 3-Month U.S. Treasury Bill Index.","page_number":50,"box":{"x":117,"y":684,"width":369,"height":12}},{"id":"1a6293ea-cf20-4ade-942a-ccdff9fe6f26","block_type":"box","text":"Distribution of Discretionary Incentive Compensation.","page_number":50,"box":{"x":117,"y":715,"width":429,"height":12}},{"id":"ee92d534-dcb6-4bb6-ae08-d0961ed08d42","block_type":"box","text":"Discretionary incentive compensation is","page_number":50,"box":{"x":553,"y":715,"width":294,"height":12}},{"id":"1052b0ea-94a6-4ac0-9c1c-7c558c9396af","block_type":"box","text":"distributed to portfolio managers in a combination of cash, deferred BlackRock, Inc. stock awards, and/","page_number":50,"box":{"x":116,"y":730,"width":764,"height":13}},{"id":"4a012bc1-b6fc-4d9d-80db-331388d0a819","block_type":"box","text":"or deferred cash awards that notionally track the return of certain BlackRock investment products.","page_number":50,"box":{"x":116,"y":746,"width":724,"height":12}},{"id":"e6218bd2-5f2a-49d9-8994-de4686e65380","block_type":"box","text":"Portfolio managers receive their annual discretionary incentive compensation in the form of cash.","page_number":50,"box":{"x":117,"y":777,"width":719,"height":12}},{"id":"118cc283-fbe3-4bba-a17f-89b9a1c5be98","block_type":"box","text":"Portfolio managers whose total compensation is above a specified threshold also receive deferred","page_number":50,"box":{"x":117,"y":792,"width":726,"height":13}},{"id":"3b018b32-d75b-4564-a4ca-aef4b833ee2f","block_type":"box","text":"BlackRock, Inc. stock awards annually as part of their discretionary incentive compensation. Paying a","page_number":50,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"a9f5c763-a612-427c-b12d-c8a6730da796","block_type":"box","text":"portion of discretionary incentive compensation in the form of deferred BlackRock, Inc. stock puts","page_number":50,"box":{"x":117,"y":823,"width":721,"height":13}},{"id":"e2a82042-17ca-4a25-94fb-4cfb22908bb5","block_type":"box","text":"compensation earned by a portfolio manager for a given year “at risk” based on BlackRock’s ability to","page_number":50,"box":{"x":116,"y":839,"width":757,"height":12}},{"id":"32dcfdc0-729f-4bc7-8bdf-18dfe5f34e64","block_type":"box","text":"sustain and improve its performance over future periods. In some cases, additional deferred","page_number":50,"box":{"x":116,"y":854,"width":688,"height":12}},{"id":"0c8598eb-6603-44d0-ab4b-39774600291a","block_type":"box","text":"BlackRock, Inc. stock may be granted to certain key employees as part of a long-term incentive award","page_number":50,"box":{"x":117,"y":870,"width":762,"height":12}},{"id":"b5572af0-06da-45de-a1db-a80e64a624d8","block_type":"box","text":"42","page_number":50,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"78caab30-5a02-48e1-87b8-70a35a6936f8","block_type":"box","text":"NM1026U-6030748-50/260","page_number":50,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"971495b6-7df8-48a4-9cd2-8cccf7419d2d","block_type":"box","text":"to aid in retention, align interests with long-term shareholders and motivate performance. Deferred","page_number":51,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"f8f43fc4-7a50-4b81-b9c3-3dad592a6739","block_type":"box","text":"BlackRock, Inc. stock awards are generally granted in the form of BlackRock, Inc. restricted stock units","page_number":51,"box":{"x":117,"y":102,"width":768,"height":13}},{"id":"51cbdc16-2a4b-4b5e-90eb-451f44f58f81","block_type":"box","text":"that vest pursuant to the terms of the applicable plan and, once vested, settle in BlackRock, Inc.","page_number":51,"box":{"x":116,"y":118,"width":717,"height":12}},{"id":"93f3319b-d853-4edb-966e-8e7945ab1b45","block_type":"box","text":"common stock. The portfolio managers of this Fund have deferred BlackRock, Inc. stock awards.","page_number":51,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"aacbddfa-f5bd-41cc-bc43-e4ffa48d0e08","block_type":"box","text":"For certain portfolio managers, a portion of the discretionary incentive compensation is also distributed","page_number":51,"box":{"x":117,"y":165,"width":765,"height":12}},{"id":"70e5a6f3-9c96-4f0e-96d9-70478925cbd2","block_type":"box","text":"in the form of deferred cash awards that notionally track the returns of select BlackRock investment","page_number":51,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"f4b8ff41-862f-49f4-ac8f-d2392b5c578b","block_type":"box","text":"products they manage, which provides direct alignment of portfolio manager discretionary incentive","page_number":51,"box":{"x":117,"y":196,"width":740,"height":12}},{"id":"817a2dce-579a-4c39-80b6-2a9e4667eb80","block_type":"box","text":"compensation with investment product results. Deferred cash awards vest ratably over a number of","page_number":51,"box":{"x":116,"y":211,"width":742,"height":12}},{"id":"b27615a2-671b-456f-882f-eb50b286a06f","block_type":"box","text":"years and, once vested, settle in the form of cash. Only portfolio managers who manage specified","page_number":51,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"725a41bf-4d8e-4b15-8e8e-79a72ce5fa55","block_type":"box","text":"products and whose total compensation is above a specified threshold are eligible to participate in the","page_number":51,"box":{"x":117,"y":242,"width":759,"height":12}},{"id":"92ed8d1d-b206-43d7-ba3e-fc4c1981dde9","block_type":"box","text":"deferred cash award program.","page_number":51,"box":{"x":116,"y":258,"width":230,"height":12}},{"id":"36669d5b-4d40-4151-9fb2-8ff6a29dba65","block_type":"box","text":"Other Compensation Benefits.","page_number":51,"box":{"x":116,"y":289,"width":241,"height":11}},{"id":"9d658225-6dfe-440b-97dc-683b226ea8d3","block_type":"box","text":"In addition to base compensation and discretionary incentive","page_number":51,"box":{"x":358,"y":289,"width":460,"height":12}},{"id":"1e492f85-6de5-4024-ba42-3ebb7614e1e1","block_type":"box","text":"compensation, portfolio managers may be eligible to receive or participate in one or more of the","page_number":51,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"0bf1815b-f377-41e4-acfb-f6a423700ffc","block_type":"box","text":"following:","page_number":51,"box":{"x":116,"y":320,"width":75,"height":12}},{"id":"39bb5699-3341-44b9-9d8c-0d15f2830116","block_type":"box","text":"Incentive Savings Plans","page_number":51,"box":{"x":117,"y":351,"width":177,"height":12}},{"id":"44de9554-e11a-4367-bebd-834b5585b377","block_type":"box","text":"s — BlackRock, Inc. has created a variety of incentive savings plans in which","page_number":51,"box":{"x":294,"y":351,"width":570,"height":12}},{"id":"9e71dbd1-1ca8-4c07-8b61-653515e3296e","block_type":"box","text":"BlackRock, Inc. employees are eligible to participate, including a 401(k) plan, the BlackRock","page_number":51,"box":{"x":117,"y":366,"width":688,"height":12}},{"id":"26ebdb56-9408-4881-956f-24464ace346d","block_type":"box","text":"Retirement Savings Plan (RSP), and the BlackRock Employee Stock Purchase Plan (ESPP). The","page_number":51,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"9e24b592-908d-4736-bb43-d04063633cb3","block_type":"box","text":"employer contribution components of the RSP include a company match equal to 50% of the first 8%","page_number":51,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"25dc2fef-52b7-40ee-9b21-5a2eae694332","block_type":"box","text":"of eligible pay contributed to the plan capped at $5,000 per year, and a company retirement","page_number":51,"box":{"x":116,"y":412,"width":685,"height":13}},{"id":"2b4b1c2b-eeee-4c57-9ce8-2204197a41bd","block_type":"box","text":"contribution equal to 3-5% of eligible compensation up to the Internal Revenue Service limit ($350,000","page_number":51,"box":{"x":116,"y":427,"width":764,"height":13}},{"id":"1ffd0be1-7bff-4733-b816-19049564d499","block_type":"box","text":"for 2025). The RSP offers a range of investment options, including registered investment companies","page_number":51,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"56cb50a4-6255-461d-b689-0cafed9b5144","block_type":"box","text":"and collective investment funds managed by the firm. BlackRock, Inc. contributions follow the","page_number":51,"box":{"x":116,"y":459,"width":698,"height":12}},{"id":"3e98b8ba-ecf3-4771-8397-61434f3b958e","block_type":"box","text":"investment direction set by participants for their own contributions or, absent participant investment","page_number":51,"box":{"x":117,"y":475,"width":739,"height":12}},{"id":"8330cb96-d884-4934-bd22-d699580c5b81","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":51,"box":{"x":116,"y":490,"width":767,"height":12}},{"id":"f173e347-72d4-4bbd-bf50-a241f3d29d13","block_type":"box","text":"participant attains age 65. The ESPP allows for investment in BlackRock, Inc. common stock at a 5%","page_number":51,"box":{"x":117,"y":506,"width":755,"height":12}},{"id":"8a7dc3f6-2269-44c2-aa12-3881c9bf5166","block_type":"box","text":"discount on the fair market value of the stock on the purchase date. Annual participation in the ESPP is","page_number":51,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"b436cb0d-5ba3-4da6-a440-7fe6500bf6a2","block_type":"box","text":"limited to the purchase of 1,000 shares of common stock or a dollar value of $25,000 based on its fair","page_number":51,"box":{"x":117,"y":536,"width":758,"height":13}},{"id":"e86f9b50-a088-46f3-9938-6d50e5c8256f","block_type":"box","text":"market value on the purchase date. All of the eligible portfolio managers are eligible to participate in","page_number":51,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"722cb848-6000-44e2-8789-9c8f9b02af13","block_type":"box","text":"these plans.","page_number":51,"box":{"x":116,"y":568,"width":95,"height":12}},{"id":"551af2a7-9cdb-43d8-9467-0f655c0d7da7","block_type":"box","text":"As of October 31, 2025, the Portfolio Managers did not beneficially own shares of the Fund.","page_number":51,"box":{"x":116,"y":599,"width":685,"height":12}},{"id":"df73bc28-4976-4bb3-8c87-8a220422f824","block_type":"box","text":"Codes of Ethics.","page_number":51,"box":{"x":116,"y":630,"width":130,"height":9}},{"id":"e9d981f7-27bd-4991-a5aa-6ca4447e1514","block_type":"box","text":"The Trust, BFA and the Distributor have adopted codes of ethics pursuant to Rule","page_number":51,"box":{"x":248,"y":630,"width":617,"height":12}},{"id":"f5eaf44e-bf87-40d7-907f-4e388e4274d8","block_type":"box","text":"17j-1 under the 1940 Act. The codes of ethics permit personnel subject to the codes of ethics to invest","page_number":51,"box":{"x":118,"y":645,"width":761,"height":12}},{"id":"cdf0f32b-38d3-444a-ac62-27fb1afd1ba5","block_type":"box","text":"in securities, subject to certain limitations, including securities that may be purchased or held by the","page_number":51,"box":{"x":117,"y":661,"width":737,"height":12}},{"id":"adc86f18-d7ea-4da3-925a-bdc5e5beea9a","block_type":"box","text":"Fund. Each code of ethics is available by contacting BlackRock at the telephone number on the back","page_number":51,"box":{"x":117,"y":676,"width":748,"height":12}},{"id":"1bc6a5ca-94de-4291-8820-eace75bce954","block_type":"box","text":"cover of the Fund’s Prospectus or by accessing the EDGAR Database on the SEC’s Internet site at","page_number":51,"box":{"x":116,"y":692,"width":737,"height":12}},{"id":"4722e01e-84b6-4917-876e-5e98ef111985","block_type":"box","text":"http://www.sec.gov, and copies may be obtained, after paying a duplicating fee, by e-mail at","page_number":51,"box":{"x":117,"y":707,"width":681,"height":12}},{"id":"e848a4b4-0189-4471-800a-647d3ba05b30","block_type":"box","text":"publicinfo@sec.gov","page_number":51,"box":{"x":117,"y":723,"width":158,"height":12}},{"id":"66dfb89b-1817-40a1-bf49-9cb7249969c6","block_type":"box","text":".","page_number":51,"box":{"x":277,"y":731,"width":1,"height":1}},{"id":"cc0c8430-8859-4371-9313-eb60638fcd9b","block_type":"box","text":"Anti-Money Laundering Requirements.","page_number":51,"box":{"x":116,"y":754,"width":308,"height":12}},{"id":"3365b6d2-8eb8-4e2d-ba51-392ad0a3425d","block_type":"box","text":"The Fund is subject to the USA PATRIOT Act (the “Patriot","page_number":51,"box":{"x":430,"y":754,"width":432,"height":12}},{"id":"408e2c16-f00d-483c-9eaf-faf03dac7f63","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":51,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"4efb420f-9e0b-4bc8-a6ef-df32a28b8e85","block_type":"box","text":"money laundering, terrorism or other illicit activities. Pursuant to requirements under the Patriot Act, the","page_number":51,"box":{"x":117,"y":785,"width":766,"height":12}},{"id":"a8c1c201-7b98-4004-86e3-a7705c094db1","block_type":"box","text":"Fund may request information from Authorized Participants to enable it to form a reasonable belief that","page_number":51,"box":{"x":117,"y":800,"width":762,"height":12}},{"id":"f0186e0b-cbd7-4196-a754-286466be54e2","block_type":"box","text":"it knows the true identity of its Authorized Participants. This information will be used to verify the","page_number":51,"box":{"x":117,"y":816,"width":710,"height":12}},{"id":"4dc4f27f-2441-40f8-999d-3d209b90fbc9","block_type":"box","text":"identity of Authorized Participants or, in some cases, the status of financial professionals; it will be","page_number":51,"box":{"x":117,"y":831,"width":730,"height":12}},{"id":"52f13bca-e813-44ee-a22e-3a79b80b261d","block_type":"box","text":"used only for compliance with the requirements of the Patriot Act.","page_number":51,"box":{"x":117,"y":847,"width":489,"height":12}},{"id":"29840973-e603-4eae-a0d5-70467bb6142c","block_type":"box","text":"43","page_number":51,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"6564a8bb-3ac3-48d8-aa29-6ee18b33313d","block_type":"box","text":"NM1026U-6030748-51/260","page_number":51,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"3a8e59d7-5192-4d0a-89d7-cccb441e8432","block_type":"box","text":"The Fund reserves the right to reject purchase orders from persons who have not submitted","page_number":52,"box":{"x":116,"y":87,"width":688,"height":12}},{"id":"db0a6395-f2b8-4d79-a8a1-7166b65774fc","block_type":"box","text":"information sufficient to allow the Fund to verify their identity. The Fund also reserves the right to","page_number":52,"box":{"x":117,"y":102,"width":720,"height":13}},{"id":"f35a617e-0ff5-41a6-8289-013c101276f3","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":52,"box":{"x":117,"y":118,"width":762,"height":12}},{"id":"75b6a99e-9578-4889-b145-aac0176cb757","block_type":"box","text":"is the Fund’s policy to cooperate fully with appropriate regulators in any investigations conducted with","page_number":52,"box":{"x":117,"y":134,"width":756,"height":12}},{"id":"8b9fd2f1-10c3-42b3-9ca9-7fcbda304f09","block_type":"box","text":"respect to potential money laundering, terrorism or other illicit activities.","page_number":52,"box":{"x":117,"y":149,"width":533,"height":12}},{"id":"28bab464-65f9-45b8-acda-f5454c07b117","block_type":"box","text":"Administrator, Custodian and Transfer Agent.","page_number":52,"box":{"x":116,"y":176,"width":370,"height":12}},{"id":"802e63d1-2549-4279-8ebd-a90809c8c91b","block_type":"box","text":"State Street Bank and Trust Company (“State","page_number":52,"box":{"x":487,"y":176,"width":344,"height":12}},{"id":"3b2874a7-94cf-45b6-bba3-a3f1ff9b2907","block_type":"box","text":"Street”) serves as administrator, custodian and transfer agent for the Fund. State Street’s principal","page_number":52,"box":{"x":116,"y":192,"width":736,"height":12}},{"id":"e902642e-0356-4e9e-a3a0-309587b0e831","block_type":"box","text":"address is One Congress Street, Suite 1, Boston, MA 02114. Pursuant to the Administration and Fund","page_number":52,"box":{"x":116,"y":207,"width":764,"height":12}},{"id":"3aae6618-9335-4c21-8556-a3f726db9cc6","block_type":"box","text":"Accounting Services Agreement with the Trust, State Street provides necessary administrative, legal,","page_number":52,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"0bda908d-34b6-4cd0-858f-314bb66c743a","block_type":"box","text":"tax and accounting and financial reporting services for the maintenance and operations of the Trust","page_number":52,"box":{"x":116,"y":238,"width":742,"height":12}},{"id":"b1c08f54-61b0-4acb-bfe7-100b6ade628b","block_type":"box","text":"and the Fund. In addition, State Street makes available the office space, equipment, personnel and","page_number":52,"box":{"x":116,"y":254,"width":741,"height":12}},{"id":"0699c882-3c43-42e5-a652-9af7745676a5","block_type":"box","text":"facilities required to provide such services. Pursuant to the Master Custodian Agreement with the","page_number":52,"box":{"x":116,"y":269,"width":726,"height":12}},{"id":"cdb97577-e691-4a2c-842a-dc104e8eae6f","block_type":"box","text":"Trust, State Street maintains, in separate accounts, cash, securities and other assets of the Trust and","page_number":52,"box":{"x":116,"y":285,"width":760,"height":12}},{"id":"89d88e2e-fa0e-47aa-9895-3730ceb37672","block_type":"box","text":"the Fund, keeps all necessary accounts and records and provides other services. State Street is","page_number":52,"box":{"x":116,"y":300,"width":719,"height":12}},{"id":"43f22000-e18e-4e67-8718-ebbd261dc962","block_type":"box","text":"required, upon the order of the Trust, to deliver securities held by State Street and to make payments","page_number":52,"box":{"x":117,"y":316,"width":755,"height":12}},{"id":"a881e025-049a-4ca8-826e-4d260fb85723","block_type":"box","text":"for securities purchased by the Trust for the Fund. State Street is authorized to appoint certain foreign","page_number":52,"box":{"x":116,"y":331,"width":761,"height":12}},{"id":"18f97e7d-720e-4c73-ac32-63143d0a7398","block_type":"box","text":"custodians or foreign custody managers for Fund investments outside the U.S. Pursuant to the","page_number":52,"box":{"x":116,"y":347,"width":708,"height":12}},{"id":"ad4f32d6-0e96-45c5-939c-31bb46797a65","block_type":"box","text":"Transfer Agency and Service Agreement with the Trust, State Street acts as a transfer agent for the","page_number":52,"box":{"x":116,"y":362,"width":746,"height":12}},{"id":"a73324b4-158b-4ab8-a018-47315a5329e2","block_type":"box","text":"Fund’s authorized and issued shares of beneficial interest, and as dividend disbursing agent of the","page_number":52,"box":{"x":117,"y":378,"width":735,"height":12}},{"id":"97c24fce-b704-436a-baeb-bb3c27c951c1","block_type":"box","text":"Trust. As compensation for these services, State Street receives certain out-of-pocket costs,","page_number":52,"box":{"x":116,"y":393,"width":691,"height":12}},{"id":"796c8ef9-b649-4dab-a30c-5e7f586e6cc1","block_type":"box","text":"transaction fees and asset-based fees which are accrued daily and paid monthly by BFA. BFA pays","page_number":52,"box":{"x":116,"y":409,"width":744,"height":12}},{"id":"67fa0de5-058f-4a75-b6e4-27dde9370493","block_type":"box","text":"the compensation because it has agreed to pay these operating expenses under the Investment","page_number":52,"box":{"x":116,"y":424,"width":718,"height":12}},{"id":"d2dec6e9-c3c4-4550-b777-b53c95e1dfc1","block_type":"box","text":"Advisory Agreement as described therein.","page_number":52,"box":{"x":116,"y":440,"width":317,"height":12}},{"id":"2f5f6c69-7410-45c4-8ded-6e2b6bd2f2b0","block_type":"box","text":"Credit Agreement.","page_number":52,"box":{"x":116,"y":467,"width":139,"height":12}},{"id":"50a29edc-d248-4068-b944-1712769582a7","block_type":"box","text":"The Trust, on behalf of the Fund, along with","page_number":52,"box":{"x":256,"y":467,"width":320,"height":12}},{"id":"7e701fcb-c327-4804-95f6-1d52b81f19ca","block_type":"box","text":"certain other funds managed by BlackRock","page_number":52,"box":{"x":576,"y":467,"width":312,"height":12}},{"id":"8caa7dd5-2bd5-4e7a-aba0-8ad7ba101bb0","block_type":"box","text":"Fund Advisors and its affiliates (“Participating Funds”), is","page_number":52,"box":{"x":117,"y":482,"width":399,"height":12}},{"id":"0517080d-2c8a-4f40-adaf-3ca2659be1d8","block_type":"box","text":"a party to a 364-day, $2.4 billion credit agreement","page_number":52,"box":{"x":516,"y":482,"width":363,"height":12}},{"id":"a87aa1a2-8fa8-47be-810d-b19a4af4719c","block_type":"box","text":"with a group of lenders, which facility terminates","page_number":52,"box":{"x":116,"y":498,"width":345,"height":12}},{"id":"a57654f0-4e49-4fed-b583-f24cf61a75c3","block_type":"box","text":"on April 9, 2026, unless ot","page_number":52,"box":{"x":461,"y":498,"width":185,"height":12}},{"id":"aecea44d-0f62-49db-8599-a1665b5889b4","block_type":"box","text":"herwise extended or renewed","page_number":52,"box":{"x":647,"y":498,"width":215,"height":9}},{"id":"974a99c9-523c-407c-a17f-575a8d78f5ab","block_type":"box","text":"(the “Credit Agreement”). Excluding commitments","page_number":52,"box":{"x":117,"y":513,"width":357,"height":12}},{"id":"38c2266f-dd1d-4319-8d82-fd00dbca4ddc","block_type":"box","text":"designated for certain Participating Funds, the","page_number":52,"box":{"x":475,"y":513,"width":331,"height":12}},{"id":"30453f83-ad47-4bfb-89e5-e08bbaed9ed2","block_type":"box","text":"Participating Funds, including the Fund, can borrow up t","page_number":52,"box":{"x":117,"y":529,"width":392,"height":12}},{"id":"7dd32c7e-32ec-4ea2-9848-b6e5425ca7fd","block_type":"box","text":"to an aggregate commitment amount of $1.75 billion","page_number":52,"box":{"x":509,"y":528,"width":376,"height":13}},{"id":"55026048-d878-442c-8e89-30585aa40486","block_type":"box","text":"at any time outstanding, subject to asset coverage","page_number":52,"box":{"x":116,"y":545,"width":362,"height":11}},{"id":"1022e17b-eef5-4070-89ca-ca5c4900e247","block_type":"box","text":"and other limitations as specified in the Credit","page_number":52,"box":{"x":478,"y":544,"width":328,"height":12}},{"id":"ec3f688e-e4d5-47d9-afe8-2af5cb5dbbb0","block_type":"box","text":"Agreement. The Fund may borrow under the Credit Agreem","page_number":52,"box":{"x":116,"y":560,"width":426,"height":12}},{"id":"f9736658-70da-4bc6-91a1-944001265837","block_type":"box","text":"ent to meet shareholder redemptions and for","page_number":52,"box":{"x":544,"y":560,"width":322,"height":12}},{"id":"a0742bd7-c6e4-4f19-90c2-8869a6d847d4","block_type":"box","text":"other lawful purposes. However, the Fund may not bo","page_number":52,"box":{"x":116,"y":575,"width":382,"height":12}},{"id":"32e60b06-e22e-41f8-b623-5033557265c5","block_type":"box","text":"rrow under the Credit Agreement for leverage. The","page_number":52,"box":{"x":499,"y":575,"width":364,"height":12}},{"id":"546e9c40-50e2-4b8a-8ada-8b3142fe1f29","block_type":"box","text":"Fund may borrow up to the maximum amount allowable under its current Prospectus and SAI, subject to","page_number":52,"box":{"x":117,"y":591,"width":746,"height":12}},{"id":"d4d0b8d2-2680-4b90-a09f-6823b5257a18","block_type":"box","text":"various other legal, regulatory or contractual limits.","page_number":52,"box":{"x":116,"y":607,"width":363,"height":11}},{"id":"262ab1ed-6587-4afe-8a35-5f41e66e539d","block_type":"box","text":"Borrowing results in interest expense and other fees and","page_number":52,"box":{"x":479,"y":606,"width":406,"height":12}},{"id":"525d9b69-344e-4e20-bac8-faea47b66ddb","block_type":"box","text":"expenses for the Fund which may impact the Fund’s net expenses. The costs of borrowing may reduce the","page_number":52,"box":{"x":116,"y":622,"width":765,"height":12}},{"id":"55b667c4-79ac-4d56-b7e7-352070ae40df","block_type":"box","text":"Fund’s return. The Fund is charged its pro rata shar","page_number":52,"box":{"x":117,"y":638,"width":366,"height":11}},{"id":"20af875d-7eff-4e01-98b9-02568a7c043c","block_type":"box","text":"e of upfront fees and commitment fees on the","page_number":52,"box":{"x":483,"y":637,"width":329,"height":12}},{"id":"f955dcdf-c0f5-43c5-bd42-c2232ce0618a","block_type":"box","text":"aggregate commitment amount based on its net assets","page_number":52,"box":{"x":116,"y":653,"width":392,"height":12}},{"id":"f8f100e4-5837-48e3-afa0-3607bb8fa2e5","block_type":"box","text":". If the Fund borrows pursuant to the Credit","page_number":52,"box":{"x":510,"y":653,"width":310,"height":12}},{"id":"0d39352e-4b50-4a7e-b07f-a5dc5605a559","block_type":"box","text":"Agreement, the Fund will be charged interest at a variable rate.","page_number":52,"box":{"x":116,"y":669,"width":447,"height":11}},{"id":"f16a69a1-618e-44db-ad80-cdc1154f6b27","block_type":"box","text":"Distributor.","page_number":52,"box":{"x":117,"y":696,"width":85,"height":9}},{"id":"0de1f99b-4506-457d-8ddb-1b40b684100f","block_type":"box","text":"The Distributor’s principal address is 50 H","page_number":52,"box":{"x":207,"y":696,"width":296,"height":11}},{"id":"fe9bcd59-2af1-448d-ab36-39f128e296d9","block_type":"box","text":"udson Yards, New York, NY 10001. Shares are","page_number":52,"box":{"x":505,"y":696,"width":337,"height":11}},{"id":"dfb62264-d91a-4066-8f6a-e32f4fc22320","block_type":"box","text":"continuously offered for sale by the Fund through the","page_number":52,"box":{"x":116,"y":711,"width":376,"height":12}},{"id":"48f86e2b-be07-49fa-ba80-41d54bc74741","block_type":"box","text":"Distributor or its agent only in Creation Units, as","page_number":52,"box":{"x":498,"y":711,"width":337,"height":12}},{"id":"a629eba6-1868-4aab-a6cf-590e8e9d9d72","block_type":"box","text":"described in the Prospectus and below in the","page_number":52,"box":{"x":116,"y":727,"width":320,"height":11}},{"id":"beb6f650-92f7-4875-8deb-644407610c9d","block_type":"box","text":"Creation","page_number":52,"box":{"x":442,"y":727,"width":59,"height":9}},{"id":"dc29b97b-61ab-429a-9aae-90726b4420b0","block_type":"box","text":"and Redemption of Creation Units","page_number":52,"box":{"x":506,"y":727,"width":242,"height":11}},{"id":"41b6158b-1624-4b8a-8c40-520cd2424ac3","block_type":"box","text":"section of this","page_number":52,"box":{"x":753,"y":727,"width":97,"height":9}},{"id":"974026e8-644b-41c0-8348-380f2c400324","block_type":"box","text":"SAI. Fund shares in amounts less than Creation Units are","page_number":52,"box":{"x":116,"y":742,"width":410,"height":10}},{"id":"a54397e0-bf85-44c9-a7a0-89582c9fb56e","block_type":"box","text":"generally not distributed by the Distributor or its","page_number":52,"box":{"x":531,"y":742,"width":334,"height":12}},{"id":"89b4ca52-29bc-462d-be8f-e3470da98402","block_type":"box","text":"agent. The Distributor or its agent will arrange for the de","page_number":52,"box":{"x":116,"y":758,"width":396,"height":12}},{"id":"4f374e09-d24f-4510-a4a2-80cd80dd293b","block_type":"box","text":"livery of the Prospectus and, upon request, this SAI","page_number":52,"box":{"x":513,"y":758,"width":364,"height":12}},{"id":"ecb136c5-c1fe-4216-b54c-6f64f7a43f67","block_type":"box","text":"to persons purchasing Creation Units and will maintain","page_number":52,"box":{"x":116,"y":773,"width":387,"height":12}},{"id":"668b0737-5f82-4e37-9194-6c641d6c00e5","block_type":"box","text":"records of both orders placed with it or its agents","page_number":52,"box":{"x":509,"y":773,"width":344,"height":12}},{"id":"064c55ef-3a95-4250-b019-3f062e71fe78","block_type":"box","text":"and confirmations of acceptance furnished by it or it","page_number":52,"box":{"x":116,"y":789,"width":367,"height":12}},{"id":"60b15950-e1d6-40e0-8382-1ca42be60f3e","block_type":"box","text":"s agents. The Distributor is a","page_number":52,"box":{"x":483,"y":789,"width":203,"height":12}},{"id":"b8c8ba5f-f296-4605-a86e-093db8c5fa43","block_type":"box","text":"broker-dealer registered","page_number":52,"box":{"x":692,"y":789,"width":170,"height":12}},{"id":"bc8e5f40-6a56-47c8-b734-c7977c0463b5","block_type":"box","text":"under the Securities Exchange Act of 1934, as am","page_number":52,"box":{"x":117,"y":804,"width":356,"height":12}},{"id":"71932fa5-ccc0-4e68-92c0-6f2ae022d9e3","block_type":"box","text":"ended (the “1934 Act”), and a member of the Financial","page_number":52,"box":{"x":474,"y":804,"width":387,"height":12}},{"id":"dad5abd4-69e1-4d1d-abcd-4d7ebfa968b4","block_type":"box","text":"Industry Regulatory Authority, Inc. (“FINRA”). The Distribut","page_number":52,"box":{"x":117,"y":820,"width":415,"height":12}},{"id":"695214a9-06a6-4208-8bb3-8eb034b716bf","block_type":"box","text":"or is also licensed as a broker-dealer in all 50","page_number":52,"box":{"x":532,"y":820,"width":321,"height":9}},{"id":"2d826959-1b31-4c57-80a1-2f1bc833c5a4","block_type":"box","text":"U.S. states, as well as in Puerto Rico, the","page_number":52,"box":{"x":117,"y":835,"width":298,"height":11}},{"id":"83118113-bd7b-4204-a470-7af5d074aea2","block_type":"box","text":"U.S. Virgin Islands and the District of Columbia.","page_number":52,"box":{"x":416,"y":835,"width":341,"height":12}},{"id":"71ff3f6b-fd79-4aa3-8a62-f17f338f34e4","block_type":"box","text":"The Distribution Agreement for the Fund provides that it may be terminated at any time, without the","page_number":52,"box":{"x":116,"y":862,"width":741,"height":12}},{"id":"85983d64-2104-4bec-a6c9-f0696d886ce6","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":52,"box":{"x":117,"y":878,"width":761,"height":12}},{"id":"946b8600-eef5-4e78-8b9b-3519c55360f3","block_type":"box","text":"44","page_number":52,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"1dbac48e-9341-4106-af0d-8e0880aaeec1","block_type":"box","text":"NM1026U-6030748-52/260","page_number":52,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1e0a2fdf-077f-4080-8270-8f8145bef122","block_type":"box","text":"of a majority of the Independent Trustees, or (ii) the vote of a majority of the outstanding voting","page_number":53,"box":{"x":116,"y":87,"width":709,"height":12}},{"id":"f01af359-7aa0-430b-99e0-7f1607fad9c6","block_type":"box","text":"securities (as defined in the 1940 Act) of the Fund. The Distribution Agreement will terminate","page_number":53,"box":{"x":116,"y":102,"width":693,"height":13}},{"id":"384c9244-7ba7-4ed8-a726-b5687968fb5d","block_type":"box","text":"automatically in the event of its assignment (as defined in the 1940 Act).","page_number":53,"box":{"x":116,"y":118,"width":541,"height":12}},{"id":"97a8f4d4-54de-4017-af8e-3a5926ccbf28","block_type":"box","text":"The Distributor may also enter into agreements with securities dealers (“Soliciting Dealers”) who will","page_number":53,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"9f3fa144-a821-4932-a8be-9294c0e5c51b","block_type":"box","text":"solicit purchases of Creation Units of Fund shares. Such Soliciting Dealers may also be Authorized","page_number":53,"box":{"x":116,"y":165,"width":739,"height":12}},{"id":"2af721b8-a30b-491a-b471-c08de9bc3f9e","block_type":"box","text":"Participants (as described below), Depository Trust Company (“DTC”) participants and/or investor","page_number":53,"box":{"x":117,"y":180,"width":729,"height":12}},{"id":"44c75b5a-01b6-4da1-9645-a4cdadb9333e","block_type":"box","text":"services organizations.","page_number":53,"box":{"x":116,"y":196,"width":176,"height":12}},{"id":"5624c4a5-4bc6-4e50-9689-fe8f0ba45195","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":53,"box":{"x":117,"y":227,"width":735,"height":12}},{"id":"b7a1e98d-2471-469c-affb-e2eba0f5a492","block_type":"box","text":"relating to distribution, including payments out of its own resources to the Distributor, or to otherwise","page_number":53,"box":{"x":117,"y":242,"width":747,"height":12}},{"id":"4f12df79-c5e3-43f7-81db-02ed3d59a1db","block_type":"box","text":"promote the sale of shares.","page_number":53,"box":{"x":117,"y":258,"width":207,"height":11}},{"id":"d30640fa-5c94-4317-a332-0dac2afcc020","block_type":"box","text":"Securities Lending.","page_number":53,"box":{"x":116,"y":289,"width":154,"height":12}},{"id":"afaca11e-1d89-4c06-838b-403c7f375cbd","block_type":"box","text":"To the extent that the Fund engages in securities lending, the Fund conducts its","page_number":53,"box":{"x":271,"y":289,"width":603,"height":12}},{"id":"5ee33994-d00a-4578-ab9d-c6c1882afde6","block_type":"box","text":"securities lending pursuant to an exemptive order from the Commission permitting it to lend portfolio","page_number":53,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"02b36925-33aa-4d4d-9332-91b10ba01ac7","block_type":"box","text":"securities to borrowers affiliated with the Fund and to retain an affiliate of the Fund as securities","page_number":53,"box":{"x":116,"y":320,"width":715,"height":9}},{"id":"676e4dcd-0921-4af3-ae64-705447338053","block_type":"box","text":"lending agent. To the extent that the Fund engages in securities lending, BTC acts as securities","page_number":53,"box":{"x":117,"y":335,"width":714,"height":12}},{"id":"ad1a8c67-7e81-498e-92c2-2b62262f06e8","block_type":"box","text":"lending agent for the Fund, subject to the overall supervision of BFA, pursuant to a written agreement","page_number":53,"box":{"x":117,"y":351,"width":757,"height":12}},{"id":"2f41fe1c-8acf-42c5-aa97-14a0a3055c19","block_type":"box","text":"(the “Securities Lending Agency Agreement”). BTC administers the lending program in accordance","page_number":53,"box":{"x":117,"y":366,"width":738,"height":12}},{"id":"53c3d769-bcb0-4f29-923c-38138e1495a1","block_type":"box","text":"with guidelines approved by the Board.","page_number":53,"box":{"x":116,"y":382,"width":294,"height":12}},{"id":"cb03b265-8a36-40bb-8ba9-d9814024692c","block_type":"box","text":"To the extent the Fund engages in securities lending, the Fund retains a portion of the securities","page_number":53,"box":{"x":116,"y":413,"width":719,"height":12}},{"id":"9e44b036-2233-4bdf-a140-961555fc418d","block_type":"box","text":"lending income and remits the remaining portion to BTC as compensation for its services as securities","page_number":53,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"5eed0228-9f87-42fa-88b2-5316bec343a9","block_type":"box","text":"lending agent. Securities lending income is generally equal to the total of income earned from the","page_number":53,"box":{"x":117,"y":444,"width":726,"height":12}},{"id":"76c52e34-5e6c-4cd6-ad51-37fd507b562d","block_type":"box","text":"reinvestment of cash collateral (and excludes collateral investment fees as defined below), and any","page_number":53,"box":{"x":117,"y":459,"width":741,"height":12}},{"id":"c531ad67-5771-484b-a488-469db98fbf83","block_type":"box","text":"fees or other payments to and from borrowers of securities. As securities lending agent, BTC bears all","page_number":53,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"e2caa3ae-2c08-42bb-bbe6-d16e11d669aa","block_type":"box","text":"operational costs directly related to securities lending. The Fund is responsible for fees in connection","page_number":53,"box":{"x":116,"y":490,"width":753,"height":12}},{"id":"48ebce3c-b5f6-4c8c-9e0c-f0120cf10180","block_type":"box","text":"with the investment of cash collateral received for securities on loan in money market funds advised by","page_number":53,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"38b30a3c-2be8-46c6-8881-473e36ce8065","block_type":"box","text":"BFA or its affiliates, and such fees will not be subject to any waivers (the “collateral investment fees”);","page_number":53,"box":{"x":117,"y":521,"width":758,"height":12}},{"id":"25fa6233-5c63-4c0f-b8c8-424f3e3a154b","block_type":"box","text":"however, BTC has agreed to reduce the amount of securities lending income it receives in order to","page_number":53,"box":{"x":117,"y":537,"width":736,"height":12}},{"id":"d73ee898-3a33-4896-b853-355b5e2d864a","block_type":"box","text":"effectively limit the collateral investment fees the Fund bears to an annual rate of 0.04%. Such money","page_number":53,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"ecef1805-bbf6-4d65-bd7a-7fb6b740035e","block_type":"box","text":"market fund shares will not be subject to a sales load, distribution fee or service fee.","page_number":53,"box":{"x":117,"y":568,"width":628,"height":12}},{"id":"62bc15c5-7bb1-4555-b30e-f7e5fa5f9b75","block_type":"box","text":"To the extent that the Fund invests cash collateral in a non-government money market fund, the Fund","page_number":53,"box":{"x":116,"y":599,"width":760,"height":12}},{"id":"af5d2e4e-6380-4d17-b5af-fae86f2223a3","block_type":"box","text":"may be subject to a discretionary liquidity fee of up to 2% on all redemptions. Discretionary liquidity","page_number":53,"box":{"x":117,"y":614,"width":739,"height":12}},{"id":"80d4cdc7-dfbf-4a79-8945-157a00640cc5","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":53,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"1bb141d5-0940-4c29-b956-990ac754ebea","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":53,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"ca0f52a6-8cc0-4b0e-89f4-5bb10e760de2","block_type":"box","text":"the best interest of the money market fund. Additionally, the Fund will be subject to a mandatory","page_number":53,"box":{"x":116,"y":661,"width":713,"height":12}},{"id":"cbc44a8f-1a56-426c-82b5-662860ae58ba","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":53,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"abed1eed-e523-4bc2-8848-b65ba800b822","block_type":"box","text":"market fund’s net assets, unless the liquidity costs are de minimis (i.e., less than one basis point","page_number":53,"box":{"x":117,"y":692,"width":714,"height":12}},{"id":"0fef51bb-b916-4047-b2cb-326d733ad9ce","block_type":"box","text":"(0.01%)). The money market fund will determine the size of the mandatory liquidity fee by making a","page_number":53,"box":{"x":117,"y":707,"width":736,"height":12}},{"id":"7cbf33e9-7802-41d9-a966-0a03d31d78f8","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":53,"box":{"x":116,"y":723,"width":719,"height":12}},{"id":"7b9e6344-c7de-4edb-b3b6-d24f11f18e76","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":53,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"afc87503-a6bd-4611-9d30-561b38d8fffb","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":53,"box":{"x":117,"y":754,"width":750,"height":12}},{"id":"395a581a-b438-4276-90f6-c7fb9e77f29b","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":53,"box":{"x":116,"y":769,"width":760,"height":12}},{"id":"ea86ca43-020b-4068-bb9d-5f67bd0a5820","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":53,"box":{"x":116,"y":785,"width":754,"height":12}},{"id":"d2ef8de8-a529-4110-865e-e22f4aa40e80","block_type":"box","text":"such discretionary or mandatory liquidity fee would reduce the Fund’s returns on securities lending.","page_number":53,"box":{"x":116,"y":800,"width":734,"height":12}},{"id":"36b37387-cad9-4d84-80ed-ca2057c837d5","block_type":"box","text":"Under the securities lending program, the Fund is categorized into one of several specific asset","page_number":53,"box":{"x":117,"y":831,"width":712,"height":12}},{"id":"ec7c759d-dace-413f-940f-938a39f295bb","block_type":"box","text":"classes. The determination of the Fund’s asset class category (fixed-income, domestic equity,","page_number":53,"box":{"x":116,"y":847,"width":701,"height":12}},{"id":"b77aa2a2-9856-4deb-986a-ceb452f7c000","block_type":"box","text":"international equity or fund of funds), each of which may be subject to a different fee arrangement, is","page_number":53,"box":{"x":117,"y":862,"width":750,"height":12}},{"id":"542c3524-ccf4-451b-b870-707dce2cafe1","block_type":"box","text":"based on a methodology agreed to by the Trust and BTC.","page_number":53,"box":{"x":117,"y":878,"width":433,"height":12}},{"id":"36edfd51-1679-46d5-bd52-6094d6174e77","block_type":"box","text":"45","page_number":53,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"acec86cb-5041-45d7-be6a-5e996791c071","block_type":"box","text":"NM1026U-6030748-53/260","page_number":53,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"819eb019-0035-4094-8ad8-879e65502c5a","block_type":"box","text":"Pursuant to the current securities lending agreement: (i) if the Fund were to engage in securities","page_number":54,"box":{"x":117,"y":87,"width":717,"height":12}},{"id":"b9b442aa-4f5a-42fe-bf3c-04268d0e1f14","block_type":"box","text":"lending, the Fund retains 82% of securities lending income (which excludes collateral investment fees);","page_number":54,"box":{"x":117,"y":102,"width":768,"height":13}},{"id":"e33b7b21-41be-4f33-9a56-3ad3e92614f5","block_type":"box","text":"and (ii) this amount can never be less than 70% of the sum of securities lending income plus collateral","page_number":54,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"d8f72039-8163-47cd-86b0-b6bd56802125","block_type":"box","text":"investment fees.","page_number":54,"box":{"x":117,"y":134,"width":126,"height":9}},{"id":"6061bceb-8384-46be-bd21-d11807f52a1b","block_type":"box","text":"In addition, commencing the business day following t","page_number":54,"box":{"x":117,"y":165,"width":374,"height":12}},{"id":"90329215-a2b7-4c14-a459-d6dbba2dee17","block_type":"box","text":"he date that the aggregate securities lending income","page_number":54,"box":{"x":492,"y":165,"width":377,"height":12}},{"id":"3e113357-8b9a-4940-8bef-788351e07b2a","block_type":"box","text":"earned across the BlackRock Multi-Asset Complex in a","page_number":54,"box":{"x":116,"y":180,"width":397,"height":12}},{"id":"1231bfdd-64be-4f64-b67b-62386c0a26d3","block_type":"box","text":"calendar year exceeds specified thresholds, the","page_number":54,"box":{"x":513,"y":180,"width":344,"height":12}},{"id":"51d8a9f3-ceb2-4c32-8640-9f7fce94cc33","block_type":"box","text":"Fund, pursuant to the current securities lending agreem","page_number":54,"box":{"x":117,"y":196,"width":393,"height":12}},{"id":"848ec23e-505a-4c5d-83ca-47d6846432f9","block_type":"box","text":"ent, will receive for the remainder of that calendar","page_number":54,"box":{"x":511,"y":196,"width":356,"height":11}},{"id":"eb1d6846-c9dd-48f7-bcc8-9e7566ca1ac5","block_type":"box","text":"year securities lending income as follows: (i) if t","page_number":54,"box":{"x":116,"y":211,"width":330,"height":12}},{"id":"2019efd6-28a4-4cf9-847d-2070fc4db78a","block_type":"box","text":"the Fund were to engage in securities lending, 85% of","page_number":54,"box":{"x":446,"y":211,"width":388,"height":12}},{"id":"3d213b04-2823-4ea0-ab59-c3143a664220","block_type":"box","text":"securities lending income (which excludes collateral in","page_number":54,"box":{"x":116,"y":227,"width":383,"height":12}},{"id":"5c897e52-2582-4ad3-a026-dfe62f2a08d2","block_type":"box","text":"vestment fees); 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BFA Entities make these payments from their own","page_number":54,"box":{"x":452,"y":366,"width":429,"height":12}},{"id":"5ebff2e7-94b6-42da-860d-b3d58bcea003","block_type":"box","text":"assets and not from the assets of the Fund. Although a po","page_number":54,"box":{"x":116,"y":382,"width":413,"height":12}},{"id":"b338ef4e-fe9a-4dfe-b3a9-6c130d256eeb","block_type":"box","text":"rtion of BFA Entities’ revenue comes directly or","page_number":54,"box":{"x":530,"y":382,"width":338,"height":12}},{"id":"2573f022-e3f7-4b50-9873-e4ba7b821ade","block_type":"box","text":"indirectly in part from fees paid by the Fund or ot","page_number":54,"box":{"x":117,"y":397,"width":343,"height":12}},{"id":"0d3fc418-a6f7-4232-a610-8752999af12f","block_type":"box","text":"her Products (including, if applicable, any underlying","page_number":54,"box":{"x":461,"y":397,"width":375,"height":12}},{"id":"91e671df-a941-49dc-826f-b7c7114e8bbf","block_type":"box","text":"Products held by the Fund), these payments do not increas","page_number":54,"box":{"x":117,"y":413,"width":420,"height":12}},{"id":"19f54f70-e9c2-49d4-a509-89e8ecc2b9f7","block_type":"box","text":"e the price paid by investors for the purchase of","page_number":54,"box":{"x":538,"y":413,"width":342,"height":12}},{"id":"4ce113af-3cf5-4ea5-b8a1-de2915b17cb7","block_type":"box","text":"shares of, or the cost of owning, the Fund or","page_number":54,"box":{"x":116,"y":428,"width":319,"height":12}},{"id":"82f838cb-05ff-4498-8568-d105d87ec413","block_type":"box","text":"other Products. BFA Entities make payments for","page_number":54,"box":{"x":435,"y":428,"width":348,"height":12}},{"id":"5e61dc3d-eca6-4772-a5a8-be762100b86c","block_type":"box","text":"Intermediaries’ participation in activities that ar","page_number":54,"box":{"x":117,"y":444,"width":327,"height":12}},{"id":"a174cf25-2a22-4c97-96e5-9937ced32d5d","block_type":"box","text":"e designed to make registered representatives, other","page_number":54,"box":{"x":444,"y":444,"width":381,"height":12}},{"id":"3f721208-31e9-4948-8216-73c539a7f6cb","block_type":"box","text":"professionals and individual investors more k","page_number":54,"box":{"x":117,"y":459,"width":319,"height":12}},{"id":"ea6c2728-b8a8-4b5f-ad74-46e1fb3570d8","block_type":"box","text":"nowledgeable about exchange-traded products, including the","page_number":54,"box":{"x":436,"y":459,"width":439,"height":12}},{"id":"9208eb95-c571-424e-87ae-6d264e1d618d","block_type":"box","text":"Fund and other Products, or for other activities, such","page_number":54,"box":{"x":117,"y":475,"width":371,"height":11}},{"id":"f564cdf6-da96-43ec-8c56-fef9e8d376a4","block_type":"box","text":"as participation in marketing activities and","page_number":54,"box":{"x":489,"y":475,"width":306,"height":12}},{"id":"78960ab1-d5ad-4799-9fec-7a1e8139f4a5","block_type":"box","text":"presentations, educational training programs, confer","page_number":54,"box":{"x":117,"y":490,"width":370,"height":12}},{"id":"066a1536-2cc4-4af4-828d-dff51acd3b52","block_type":"box","text":"ences, the development of technology platforms and","page_number":54,"box":{"x":487,"y":490,"width":378,"height":12}},{"id":"e7da03c7-008e-43d5-a2bc-ae1446bb6eb3","block_type":"box","text":"reporting systems (“Education Costs”). BFA Entities al","page_number":54,"box":{"x":117,"y":506,"width":382,"height":12}},{"id":"0e826a41-9f5c-4d7e-8017-a40a75570ed2","block_type":"box","text":"so make payments to Intermediaries for certain","page_number":54,"box":{"x":500,"y":506,"width":340,"height":12}},{"id":"da201282-da2d-4f2d-ad75-8c92a96c78cd","block_type":"box","text":"printing, publishing and mailing costs or materials","page_number":54,"box":{"x":117,"y":521,"width":354,"height":12}},{"id":"f9d67fcc-d22a-4a51-bb4b-c1bfa9971cb4","block_type":"box","text":"relating to the Fund or other Products (“Publishing","page_number":54,"box":{"x":471,"y":521,"width":359,"height":12}},{"id":"9ece720b-b09a-4ca2-a72b-e58b8ea4e181","block_type":"box","text":"Costs”). In addition, BFA Entities make payments to In","page_number":54,"box":{"x":117,"y":537,"width":384,"height":12}},{"id":"9f0baabb-6fae-48dc-984d-439d9d0658f3","block_type":"box","text":"termediaries that make shares of the Fund or other","page_number":54,"box":{"x":502,"y":537,"width":367,"height":9}},{"id":"87f6c274-68ce-4415-afd1-fb8eb27a3253","block_type":"box","text":"Products available to their clients, in some cases","page_number":54,"box":{"x":117,"y":552,"width":350,"height":11}},{"id":"1c967f7a-fadb-411c-9140-214c56803de1","block_type":"box","text":"at a waived or reduced commission rate or ticket charge,","page_number":54,"box":{"x":467,"y":552,"width":407,"height":12}},{"id":"ae42b81f-3dcd-4628-8d69-12d8b6c9c100","block_type":"box","text":"develop new products that feature iShares, create","page_number":54,"box":{"x":116,"y":568,"width":359,"height":12}},{"id":"1b550000-7644-4519-b084-bd6f3e2040f6","block_type":"box","text":"educational content about the Fund or other Products","page_number":54,"box":{"x":476,"y":568,"width":384,"height":9}},{"id":"c17df490-1fd1-4202-bc4b-1771491ea0c9","block_type":"box","text":"that is featured on an Intermediary’s platform, or","page_number":54,"box":{"x":116,"y":583,"width":342,"height":12}},{"id":"764f65b9-c23b-48b4-acd2-ce1aa469f201","block_type":"box","text":"r otherwise promote the Fund","page_number":54,"box":{"x":457,"y":583,"width":210,"height":12}},{"id":"78069123-2a25-4b90-acf9-1375093defde","block_type":"box","text":"or other Products. BFA","page_number":54,"box":{"x":668,"y":583,"width":168,"height":10}},{"id":"dac0a527-5222-4f06-b952-71815b67f573","block_type":"box","text":"Entities may also reimburse expenses or make payment","page_number":54,"box":{"x":117,"y":599,"width":400,"height":12}},{"id":"325b3a9d-8c56-45fb-a4ce-3542a851ccad","block_type":"box","text":"s from their own assets to Intermediaries or other","page_number":54,"box":{"x":517,"y":599,"width":354,"height":9}},{"id":"247ed9a8-c660-4bd5-a753-c10948e45c8c","block_type":"box","text":"persons in consideration of services or other acti","page_number":54,"box":{"x":117,"y":614,"width":343,"height":12}},{"id":"26bec06e-4993-4be1-b13d-828505fbbff6","block_type":"box","text":"vities that the BFA Entities believe may benefit the","page_number":54,"box":{"x":460,"y":614,"width":362,"height":12}},{"id":"f89dc5be-8c45-4a66-bd20-07341eda4e6c","block_type":"box","text":"business of the BFA Entities or facilitate investm","page_number":54,"box":{"x":117,"y":630,"width":340,"height":9}},{"id":"f96a5d46-fa36-4775-8db6-bab36100e0a8","block_type":"box","text":"ent in the Fund or other Products. Payments of the type","page_number":54,"box":{"x":459,"y":630,"width":399,"height":12}},{"id":"e50ebb5e-d792-4df3-babd-6bd9c0f64fbf","block_type":"box","text":"described above are sometimes referred to as revenue-sharing payments.","page_number":54,"box":{"x":116,"y":645,"width":533,"height":12}},{"id":"c99d84d9-7114-4e19-af67-8ca1d95323f2","block_type":"box","text":"Payments to an Intermediary may be significant to the Intermediary, and amounts that Intermediaries","page_number":54,"box":{"x":117,"y":676,"width":749,"height":12}},{"id":"41e98973-0617-47ec-b8d7-9cac00a73d91","block_type":"box","text":"pay to your salesperson or other investment professional may also be significant for your salesperson","page_number":54,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"22e5b2c5-602b-46db-a2ab-73241affd941","block_type":"box","text":"or other investment professional. Because an Intermediary may make decisions about which","page_number":54,"box":{"x":116,"y":707,"width":686,"height":12}},{"id":"02400d85-4625-466e-881d-3dd033e9b7d9","block_type":"box","text":"investment options it will recommend or make available to its clients, what services to provide for","page_number":54,"box":{"x":117,"y":723,"width":717,"height":12}},{"id":"6def13ed-8976-474f-84cb-f33f728550d2","block_type":"box","text":"various products or what marketing content to make available to its clients based on payments it","page_number":54,"box":{"x":116,"y":738,"width":714,"height":12}},{"id":"944529ee-353f-4f59-aa34-d337c11cbf59","block_type":"box","text":"receives or is eligible to receive, such payments may create conflicts of interest between the","page_number":54,"box":{"x":117,"y":754,"width":683,"height":12}},{"id":"19636fdc-8fca-401f-a5fd-c556b846d4af","block_type":"box","text":"Intermediary and its clients. These financial incentives may cause the Intermediary to recommend the","page_number":54,"box":{"x":117,"y":769,"width":753,"height":12}},{"id":"de0223d0-3430-4c88-9cc3-d7819f6ae65e","block_type":"box","text":"Fund or other Products or otherwise promote the Fund or other Products over other investments. The","page_number":54,"box":{"x":117,"y":785,"width":752,"height":12}},{"id":"3958be18-6c14-404d-bb8b-f4bca976508d","block_type":"box","text":"same conflicts of interest and financial incentives exist with respect to your salesperson or other","page_number":54,"box":{"x":116,"y":800,"width":712,"height":12}},{"id":"cf79a037-5242-4647-b2e0-198e5a88face","block_type":"box","text":"investment professional if he or she receives similar payments from his or her Intermediary firm.","page_number":54,"box":{"x":117,"y":816,"width":709,"height":12}},{"id":"e13b2624-8741-4b82-b822-4800d4a59052","block_type":"box","text":"In addition to the payments described above, BFA Entities have developed proprietary tools,","page_number":54,"box":{"x":117,"y":847,"width":689,"height":12}},{"id":"d17f287a-fb06-4e62-8343-9df9a4872074","block_type":"box","text":"calculators and related interactive or digital content that is made available through the","page_number":54,"box":{"x":116,"y":862,"width":641,"height":12}},{"id":"b7e2e468-39d7-4718-879e-85ee05a0881c","block_type":"box","text":"www.blackrock.com website at no additional cost to Intermediaries. BlackRock may configure these","page_number":54,"box":{"x":116,"y":878,"width":744,"height":12}},{"id":"e18b54ea-83e2-46da-bbcc-7cbad200e359","block_type":"box","text":"46","page_number":54,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"56e3c8e2-802f-4e4e-a94c-270c56d9fb64","block_type":"box","text":"NM1026U-6030748-54/260","page_number":54,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"899be3c3-9c3e-4c41-8b87-8e62118fae3c","block_type":"box","text":"tools and calculators and localize the content for Intermediaries as part of its customary digital","page_number":55,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"cc337ef2-09b6-4e39-baec-2e0a4c3579e3","block_type":"box","text":"marketing support and promotion of the Fund or other Products.","page_number":55,"box":{"x":117,"y":102,"width":479,"height":13}},{"id":"a20b78f1-5e00-4e35-8bd2-089e25a4fd9b","block_type":"box","text":"As of March 1, 2013, BFA Entities have contractual arrangements to make payments (in addition to","page_number":55,"box":{"x":116,"y":131,"width":742,"height":12}},{"id":"b886c4fb-1932-4b4e-93b7-c406dd5d427f","block_type":"box","text":"payments for Education Costs or Publishing Costs) to one Intermediary, Fidelity Brokerage Services","page_number":55,"box":{"x":117,"y":147,"width":747,"height":12}},{"id":"00233213-197b-48bf-ac71-b9a46944b540","block_type":"box","text":"LLC (“FBS”). Effective June 4, 2016, this relationship was expanded to include National Financial","page_number":55,"box":{"x":117,"y":162,"width":725,"height":12}},{"id":"b4b458ad-57c1-4555-a2da-e23173cdebe5","block_type":"box","text":"Services, LLC (“NFS”), an affiliate of FBS. Pursuant to this special, long-term and significant","page_number":55,"box":{"x":116,"y":178,"width":688,"height":12}},{"id":"0984dd12-7b71-40ef-8431-4fb799402ceb","block_type":"box","text":"arrangement (the “Marketing Program”), FBS, NFS and certain of their affiliates (collectively “Fidelity”)","page_number":55,"box":{"x":116,"y":193,"width":761,"height":12}},{"id":"757eac85-109c-4cf2-9310-b46eccf378b5","block_type":"box","text":"have agreed, among other things, to actively promote certain funds and Products to customers,","page_number":55,"box":{"x":117,"y":209,"width":712,"height":12}},{"id":"ea08003d-a255-4624-9d19-afedac16ba20","block_type":"box","text":"investment professionals and other intermediaries and in advertising campaigns as the preferred","page_number":55,"box":{"x":117,"y":224,"width":721,"height":12}},{"id":"ffebd2e4-9444-4308-a24b-8f3420394cf3","block_type":"box","text":"exchange-traded product, to offer certain funds and Products in certain Fidelity platforms and","page_number":55,"box":{"x":116,"y":240,"width":696,"height":12}},{"id":"3f0e7481-e69c-4ca9-872d-0b49481ae17c","block_type":"box","text":"investment programs, in some cases at a waived or reduced commission rate or ticket charge, and to","page_number":55,"box":{"x":117,"y":255,"width":756,"height":12}},{"id":"e59a4690-9f4c-4642-9611-34b03dd5f235","block_type":"box","text":"provide marketing data to BFA Entities. BFA Entities have agreed to facilitate the Marketing Program","page_number":55,"box":{"x":117,"y":271,"width":752,"height":12}},{"id":"89c28ed2-6a9a-48eb-aca3-a21cbb1577e8","block_type":"box","text":"by, among other things, making certain payments to FBS and NFS for marketing and implementing","page_number":55,"box":{"x":117,"y":286,"width":739,"height":12}},{"id":"c6432bc9-ed3c-48c1-a8d6-050f60e359fa","block_type":"box","text":"certain brokerage and investment programs. Upon termination of the arrangement, the BFA Entities","page_number":55,"box":{"x":116,"y":302,"width":745,"height":12}},{"id":"3f37187a-339b-431c-8236-0dc79b2cfe5e","block_type":"box","text":"will make additional payments to FBS and/or NFS based upon a number of criteria, including the","page_number":55,"box":{"x":116,"y":317,"width":721,"height":12}},{"id":"9a3b83af-1721-4b5c-b7e6-e6896990357c","block_type":"box","text":"overall success of the Marketing Program and the level of services provided by FBS and NFS during","page_number":55,"box":{"x":116,"y":333,"width":751,"height":12}},{"id":"4c573d29-e7ac-46ce-a15c-95fb513fff64","block_type":"box","text":"the wind-down period.","page_number":55,"box":{"x":116,"y":348,"width":169,"height":12}},{"id":"63fae0a2-7ee8-478b-a1be-a8216c16a49c","block_type":"box","text":"In addition, BFA Entities have entered into other contractual arrangements with Intermediaries and","page_number":55,"box":{"x":117,"y":377,"width":735,"height":12}},{"id":"72f92701-9c2b-41ae-8f88-41afaac5bdcc","block_type":"box","text":"certain other third parties that the BFA Entities believe may benefit the business of the BFA Entities or","page_number":55,"box":{"x":116,"y":392,"width":761,"height":12}},{"id":"e1785216-0403-489b-adb4-2bf3463fbd49","block_type":"box","text":"facilitate investment in the Fund or certain Products. Such agreements can include payments by BFA","page_number":55,"box":{"x":116,"y":407,"width":756,"height":12}},{"id":"17f597fd-4ac7-4813-9be5-c0887d2b0021","block_type":"box","text":"Entities to such Intermediaries and third parties for data collection and provision, technology support,","page_number":55,"box":{"x":117,"y":422,"width":752,"height":13}},{"id":"97218ab4-f8dd-40d0-94e5-c6635a65fb9f","block_type":"box","text":"platform enhancement, or educational content, co-marketing and cross-promotional efforts. In certain","page_number":55,"box":{"x":117,"y":438,"width":754,"height":12}},{"id":"a4803dc2-0ec2-4d64-b8d3-0319e0526e2b","block_type":"box","text":"cases, such payments to Intermediaries are subject to certain minimum payment levels or tiered","page_number":55,"box":{"x":116,"y":453,"width":718,"height":12}},{"id":"510369eb-7cf9-479a-aadb-64f0075a2471","block_type":"box","text":"payments. With respect to certain funds and Products, payments by the BFA Entities may take the","page_number":55,"box":{"x":117,"y":468,"width":734,"height":12}},{"id":"1a72bd8a-6757-4e95-bea7-ee8e49cdc7df","block_type":"box","text":"form of, among other things, “due diligence” payments for an Intermediary’s review of such funds and","page_number":55,"box":{"x":116,"y":483,"width":757,"height":12}},{"id":"9d9c362d-d164-495a-af12-04ab5a0207fe","block_type":"box","text":"Products; payment for providing employee training and information relating to such funds and","page_number":55,"box":{"x":117,"y":499,"width":697,"height":12}},{"id":"eba0ab5a-522f-4103-86ce-9a026fc0a19c","block_type":"box","text":"Products; fees for access (in some cases on a preferential basis) to an Intermediary’s registered","page_number":55,"box":{"x":117,"y":514,"width":719,"height":12}},{"id":"6c6b907b-0d6f-46ef-a006-53045361a554","block_type":"box","text":"representatives, salespersons or other personnel, fees for maintaining an Intermediary’s investor","page_number":55,"box":{"x":117,"y":529,"width":722,"height":12}},{"id":"f7b987ee-6221-49df-a5f1-37f9bb6de8c6","block_type":"box","text":"platform, “shelf space” payments for making such funds and Products available on the Intermediary’s","page_number":55,"box":{"x":117,"y":544,"width":754,"height":12}},{"id":"65958301-9dbc-4f28-9d94-00b79f68d18a","block_type":"box","text":"platform or fees for providing assistance in promoting the sale of such funds and Products. In such","page_number":55,"box":{"x":117,"y":560,"width":735,"height":12}},{"id":"25c2cd05-7407-45b5-a449-ca5f3716ffbe","block_type":"box","text":"cases, the payments to Intermediaries may be tiered or based on a percentage of the value of the","page_number":55,"box":{"x":116,"y":575,"width":731,"height":12}},{"id":"70d9669c-2e11-4ab5-990f-70c2cb298dcc","block_type":"box","text":"funds and Products held by customers of the applicable Intermediary and may also be subject to","page_number":55,"box":{"x":116,"y":590,"width":721,"height":12}},{"id":"a27b728d-88d1-450c-be64-5b13126bbc67","block_type":"box","text":"minimum payment levels. Payments made pursuant to such arrangements may vary in any year and","page_number":55,"box":{"x":117,"y":605,"width":750,"height":12}},{"id":"c5016d4e-82b0-4299-9d38-dff5575fbf06","block_type":"box","text":"may be different for different Intermediaries and third parties and may reflect different services","page_number":55,"box":{"x":117,"y":621,"width":703,"height":12}},{"id":"6b3a8383-c495-43db-ba46-49cb6eb11e8d","block_type":"box","text":"provided. As of the date of this SAI, the Intermediaries and other third parties (or their respective","page_number":55,"box":{"x":117,"y":636,"width":720,"height":12}},{"id":"48ee6291-7761-4de3-a3bf-d2b740ce4dc5","block_type":"box","text":"affiliates) receiving one or more types of the contractual payments described above include (in addition","page_number":55,"box":{"x":116,"y":651,"width":769,"height":12}},{"id":"283c2b41-61fe-4076-87cd-35be2e2be0f8","block_type":"box","text":"to FBS and NFS): & Partners, Advisor Credit Exchange, AE Wealth Management, LLC, American","page_number":55,"box":{"x":116,"y":666,"width":723,"height":12}},{"id":"31912253-fa66-428c-9e43-5800d652f603","block_type":"box","text":"Enterprise Investment Services, Inc., Avantax Investment Services, Inc., BNY Mellon Capital Markets,","page_number":55,"box":{"x":117,"y":682,"width":754,"height":12}},{"id":"d07715cb-b538-46b5-9ff2-34a1ce0b2420","block_type":"box","text":"LLC, BNY Mellon Performance & Risk Analytics, LLC, Cetera Financial Group, Inc., Charles Schwab &","page_number":55,"box":{"x":117,"y":697,"width":762,"height":12}},{"id":"1de2f8eb-111c-4df2-8cc0-d0ab033d4bb7","block_type":"box","text":"Co., Inc., Clearstream Fund Centre AG, Commonwealth Equity Services, LLC, Dorsey Wright and","page_number":55,"box":{"x":117,"y":712,"width":725,"height":12}},{"id":"14aeccba-dd34-4165-86be-46db74845318","block_type":"box","text":"Associates, LLC, Dynasty Financial Partners LLC, E*Trade Securities LLC, Envestnet Asset","page_number":55,"box":{"x":116,"y":727,"width":683,"height":12}},{"id":"e3048425-312d-4e67-873b-27ba99dbd19e","block_type":"box","text":"Management, Inc., iCapital Markets LLC, Interactive Brokers, LLC, LPL Financial LLC, Merrill Lynch,","page_number":55,"box":{"x":117,"y":743,"width":744,"height":12}},{"id":"ba3f1d08-739f-41a5-9bd7-30993be3704c","block_type":"box","text":"Pierce, Fenner & Smith Incorporated, MML Investors Services, LLC, Morgan Stanley Smith Barney","page_number":55,"box":{"x":117,"y":758,"width":734,"height":12}},{"id":"93ae8b4f-bc65-4560-b72f-1a6f59722616","block_type":"box","text":"LLC, Northwestern Mutual Investment Services, LLC, Orion Portfolio Solutions, LLC, Pershing LLC,","page_number":55,"box":{"x":117,"y":773,"width":736,"height":12}},{"id":"37a58251-4d26-47c4-a65c-32d9538a9d89","block_type":"box","text":"Raymond James Financial Services, Inc., Riskalyze, Inc., Sanctuary Wealth Group, LLC, UBS","page_number":55,"box":{"x":117,"y":788,"width":698,"height":12}},{"id":"e4d4ecd8-5b92-443d-840b-9a276090309e","block_type":"box","text":"Financial Services Inc., Wells Fargo Clearing Services, LLC and Wells Fargo Advisors Financial","page_number":55,"box":{"x":117,"y":804,"width":710,"height":12}},{"id":"abc3481a-2ee3-44db-bcf5-ac96d7e385b4","block_type":"box","text":"Network, LLC. Any additions, modifications, or deletions to Intermediaries and other third parties listed","page_number":55,"box":{"x":117,"y":819,"width":756,"height":12}},{"id":"349eed00-3448-458a-b464-01b671bb8222","block_type":"box","text":"above that have occurred since the date of this SAI are not included in the list.","page_number":55,"box":{"x":116,"y":834,"width":586,"height":10}},{"id":"8ec59bca-9294-46f3-9829-f9903e815a74","block_type":"box","text":"Further, BFA Entities make Education Costs and Publishing Costs payments to other Intermediaries","page_number":55,"box":{"x":117,"y":862,"width":746,"height":13}},{"id":"43559ad2-6b5f-47a0-9766-9e11855e6291","block_type":"box","text":"that are not listed in the immediately preceding paragraph. BFA Entities may determine to make such","page_number":55,"box":{"x":116,"y":878,"width":757,"height":12}},{"id":"1d6c0a72-fd51-4625-b195-1da14b23f874","block_type":"box","text":"47","page_number":55,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"a592ae08-bb46-4e0c-bbec-fd9836321187","block_type":"box","text":"NM1026U-6030748-55/260","page_number":55,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"4cb47f8e-b77d-44df-bf53-8e9bfcc71c94","block_type":"box","text":"payments based on any number of metrics. For example, BFA Entities may make payments at","page_number":56,"box":{"x":117,"y":87,"width":705,"height":12}},{"id":"9078995a-ec59-4602-82a9-3e6ca127f20b","block_type":"box","text":"year-end or other intervals in a fixed amount, an amount based upon an Intermediary’s services at","page_number":56,"box":{"x":116,"y":102,"width":734,"height":12}},{"id":"d5885e53-780f-4284-bf76-c4d302cec8a9","block_type":"box","text":"defined levels or an amount based on the Intermediary’s net sales of one or more Products, including","page_number":56,"box":{"x":116,"y":117,"width":757,"height":12}},{"id":"44e0556c-bb41-4cfd-9ce3-77635c998962","block_type":"box","text":"the Fund, in a year or other period, any of which arrangements may include an agreed-upon minimum","page_number":56,"box":{"x":116,"y":132,"width":761,"height":13}},{"id":"3d438c01-7735-45a1-a38d-49de334318c2","block_type":"box","text":"or maximum payment, or any combination of the foregoing.","page_number":56,"box":{"x":116,"y":148,"width":444,"height":12}},{"id":"f37881c7-39b3-4af8-ad00-15cea134f04d","block_type":"box","text":"Please contact your salesperson or","page_number":56,"box":{"x":562,"y":148,"width":286,"height":12}},{"id":"a79f64c3-7321-41cc-a47f-ba870b1bd8a3","block_type":"box","text":"other investment professional for more information regarding any such payments or financial","page_number":56,"box":{"x":116,"y":163,"width":753,"height":12}},{"id":"60110310-d1d3-46a7-8795-2c4ae0f3e49a","block_type":"box","text":"incentives his or her Intermediary firm may receive. Any payments made, or financial incentives","page_number":56,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"67a2ba4f-d60a-495b-824a-8d754f95ca54","block_type":"box","text":"offered, by the BFA Entities to an Intermediary may create the incentive for the Intermediary to","page_number":56,"box":{"x":116,"y":193,"width":760,"height":13}},{"id":"3897abfd-5bd3-4561-80ba-576d9d2c2aec","block_type":"box","text":"encourage customers to buy shares of the Fund or other Products.","page_number":56,"box":{"x":116,"y":209,"width":535,"height":12}},{"id":"b09a0294-1b2f-4bc7-b8aa-806cae8dcc40","block_type":"box","text":"The Fund may participate in certain market maker incentive programs of a national securities","page_number":56,"box":{"x":116,"y":239,"width":695,"height":12}},{"id":"c79ede24-e271-47b0-9047-0f685468bc93","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":56,"box":{"x":116,"y":254,"width":739,"height":12}},{"id":"6cca045d-ada2-4b9a-895e-dc4c9476c355","block_type":"box","text":"incentivizing one or more market makers in the securities of the Fund to enhance the liquidity and","page_number":56,"box":{"x":117,"y":269,"width":728,"height":12}},{"id":"1cc84352-ae22-409b-9798-6eba254fc983","block_type":"box","text":"quality of the secondary market of securities of the Fund. The fee would then be credited by the","page_number":56,"box":{"x":116,"y":284,"width":714,"height":12}},{"id":"92c63920-b3c7-40f8-92aa-207fd36f9d48","block_type":"box","text":"exchange to one or more market makers that meet or exceed liquidity and market quality standards","page_number":56,"box":{"x":116,"y":300,"width":743,"height":12}},{"id":"387ba27b-95a5-4e11-9691-bef1bec20767","block_type":"box","text":"with respect to the securities of the Fund. Each market maker incentive program is subject to approval","page_number":56,"box":{"x":116,"y":315,"width":764,"height":12}},{"id":"4d4d8e1d-c057-4820-b65c-61425117c784","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":56,"box":{"x":116,"y":330,"width":748,"height":12}},{"id":"f6948fec-c0c5-422b-8cbe-9274da97b8ba","block_type":"box","text":"solely for the benefit of the Fund and will not","page_number":56,"box":{"x":116,"y":345,"width":334,"height":12}},{"id":"3cbd22a5-1858-4a28-a1ae-a2bb940381f1","block_type":"box","text":"be paid from any Fund assets. Other funds managed by","page_number":56,"box":{"x":451,"y":345,"width":420,"height":12}},{"id":"0385bcf7-4ec2-4da6-a0c2-931a8a2be4e8","block_type":"box","text":"BFA may also participate in such programs.","page_number":56,"box":{"x":117,"y":361,"width":329,"height":12}},{"id":"cefba665-03d2-41b4-b753-b633de9ba4ad","block_type":"box","text":"Determination of Net Asset Value","page_number":56,"box":{"x":119,"y":410,"width":605,"height":23}},{"id":"5887aab1-9f04-4a24-bd97-59e46fe697b5","block_type":"box","text":"Valuation of Shares.","page_number":56,"box":{"x":116,"y":461,"width":166,"height":9}},{"id":"34d30094-c9d1-45ea-922a-d4b16ab51f8d","block_type":"box","text":"The NAV for the Fund is generally calculated as of the close of regular trading","page_number":56,"box":{"x":283,"y":461,"width":583,"height":12}},{"id":"fb2cbe4d-2334-464d-818d-fbc86753b6e2","block_type":"box","text":"hours on the New York Stock Exchange (“NYSE”) (normally 4:00 p.m. Eastern Time) on each business","page_number":56,"box":{"x":117,"y":476,"width":769,"height":12}},{"id":"d0bcf537-af0a-4cb0-9232-7c27aad056ba","block_type":"box","text":"day the NYSE is open. Valuation of assets held by the Fund is as follows:","page_number":56,"box":{"x":116,"y":492,"width":551,"height":12}},{"id":"689c206c-7abf-4969-940f-86b2c3ab0136","block_type":"box","text":"Equity Investments.","page_number":56,"box":{"x":117,"y":522,"width":162,"height":12}},{"id":"55a1a9c8-a3f7-4c11-8341-0c6bc015da16","block_type":"box","text":"Equity securities traded on a recognized securities exchange (e.g., NYSE), on","page_number":56,"box":{"x":281,"y":522,"width":583,"height":12}},{"id":"f8cd7707-24c8-4638-96cc-c70e4b6ca4cc","block_type":"box","text":"separate trading boards of a securities exchange or through a market system that provides","page_number":56,"box":{"x":116,"y":537,"width":679,"height":12}},{"id":"c6d6f7a1-1596-4c63-bb0f-9f296ff77491","block_type":"box","text":"contemporaneous transaction pricing information (each an “Exchange”) are valued using information","page_number":56,"box":{"x":116,"y":553,"width":751,"height":12}},{"id":"5bff5100-7fe1-4613-9995-b0c7ee4ec059","block_type":"box","text":"obtained via independent pricing services, generally at the Exchange closing price or if an Exchange","page_number":56,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"a9910221-5dff-4fa1-aefc-eb3d975ccebd","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":56,"box":{"x":116,"y":584,"width":745,"height":12}},{"id":"f761b27d-9ee1-4c1f-b47f-428149653d4f","block_type":"box","text":"assets or liabilities are valued. However, under certain circumstances, other means of determining","page_number":56,"box":{"x":116,"y":599,"width":734,"height":12}},{"id":"b7a38962-016b-4be4-a180-d4a10a63735f","block_type":"box","text":"current market value may be used. If an equity security is traded on more than one Exchange, the","page_number":56,"box":{"x":116,"y":615,"width":732,"height":12}},{"id":"87e594cf-10b1-4c38-bd92-bd87e97a6d23","block_type":"box","text":"current market value of the security where it is primarily traded generally will be used. In the event that","page_number":56,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"fc295f0f-7869-4bb5-a3a8-d3728853a942","block_type":"box","text":"there are no sales involving an equity security held by the Fund on a day on which the Fund values","page_number":56,"box":{"x":116,"y":646,"width":740,"height":12}},{"id":"6d39e9ae-92aa-4283-be96-d14de7cde1b8","block_type":"box","text":"such security, the prior day’s price will be used, unless BFA determines that such prior day’s price no","page_number":56,"box":{"x":116,"y":662,"width":750,"height":11}},{"id":"2bfefa2f-430b-4b8a-942c-57e0d83917a1","block_type":"box","text":"longer reflects the fair value of the security, in which","page_number":56,"box":{"x":117,"y":677,"width":384,"height":12}},{"id":"d09e1d3b-d6cc-45b1-905d-da967791dd95","block_type":"box","text":"case such asset would be treated as a Fair Value","page_number":56,"box":{"x":508,"y":677,"width":366,"height":9}},{"id":"73dfd3fe-b9e1-4247-b316-9a2643fd0b60","block_type":"box","text":"Asset (as defined below).","page_number":56,"box":{"x":116,"y":692,"width":187,"height":12}},{"id":"332ad65b-79d8-4ccb-b464-a4d56d351fa6","block_type":"box","text":"Fixed-Income Investments.","page_number":56,"box":{"x":117,"y":723,"width":210,"height":9}},{"id":"bab990fb-8e3d-4c69-8663-13fec2eadde6","block_type":"box","text":"Fixed-income securities and certain derivative instruments are generally","page_number":56,"box":{"x":334,"y":723,"width":522,"height":12}},{"id":"600c574d-26a0-4a34-8b04-8c198a338609","block_type":"box","text":"valued using bid prices provided by dealers or pric","page_number":56,"box":{"x":116,"y":738,"width":365,"height":12}},{"id":"784802ac-fa4b-43d2-9600-21d3e7bb1c30","block_type":"box","text":"es (including evaluated prices) supplied by the Fund’s","page_number":56,"box":{"x":482,"y":738,"width":390,"height":12}},{"id":"ffd58249-110d-4b19-9364-2a2b4130e4af","block_type":"box","text":"approved independent third-party pricing services, eac","page_number":56,"box":{"x":116,"y":754,"width":396,"height":12}},{"id":"b8414c31-11f8-45a2-b2a3-18aa09c40231","block_type":"box","text":"h in accordance with the Valuation Procedures.","page_number":56,"box":{"x":513,"y":754,"width":341,"height":9}},{"id":"d9b06d54-d0cb-42db-bdb6-3eaad00ff1d6","block_type":"box","text":"The pricing services may use valuation models that","page_number":56,"box":{"x":116,"y":769,"width":373,"height":12}},{"id":"ef4a51c0-5332-417b-9b0d-ba55eeb44c76","block_type":"box","text":"utilize certain inputs and assumptions to derive","page_number":56,"box":{"x":495,"y":769,"width":339,"height":12}},{"id":"000304ba-dd6e-4461-8cdd-396ed3cfe9b1","block_type":"box","text":"values, including transaction data (e.g., recent repres","page_number":56,"box":{"x":116,"y":784,"width":386,"height":13}},{"id":"c02614d7-6209-4fb2-b533-ab2b87a3dcd4","block_type":"box","text":"entative bids and offers), credit quality information,","page_number":56,"box":{"x":503,"y":784,"width":365,"height":13}},{"id":"d4d591c1-41cb-4f60-8acb-70aca22cda77","block_type":"box","text":"perceived market movements, news, and other rele","page_number":56,"box":{"x":117,"y":800,"width":373,"height":12}},{"id":"ba3c9f9f-ad5b-4c43-bfb8-c94a836dbe2e","block_type":"box","text":"vant information and by other methods, which may","page_number":56,"box":{"x":491,"y":800,"width":368,"height":12}},{"id":"d21c3871-6b43-40d3-8bb1-d3644443d5fc","block_type":"box","text":"include consideration of: yields or prices of securi","page_number":56,"box":{"x":117,"y":815,"width":356,"height":13}},{"id":"fe75edfa-07d7-4906-aadf-801313532c95","block_type":"box","text":"ties of comparable quality, coupon, maturity and type;","page_number":56,"box":{"x":474,"y":815,"width":388,"height":13}},{"id":"ca6a13b4-5ab5-41ee-86fb-44e18a7f7b63","block_type":"box","text":"indications as to values from dealers; general mark","page_number":56,"box":{"x":117,"y":831,"width":370,"height":12}},{"id":"d1796de2-a963-4de4-ae34-ac743fb84bb5","block_type":"box","text":"et conditions; and/or other factors and assumptions.","page_number":56,"box":{"x":488,"y":831,"width":382,"height":12}},{"id":"64a17109-afd9-47e9-9b50-ef7eb887e4ce","block_type":"box","text":"Pricing services generally value fixed-income securiti","page_number":56,"box":{"x":117,"y":846,"width":383,"height":13}},{"id":"eee22a14-609f-4e88-9e67-bee2020368cc","block_type":"box","text":"es assuming orderly transactions of an institutional","page_number":56,"box":{"x":501,"y":846,"width":372,"height":13}},{"id":"0145baa4-c07d-4c16-881a-1b03c327e3ec","block_type":"box","text":"round lot size, but the Fund may hold or transact in such","page_number":56,"box":{"x":117,"y":862,"width":413,"height":12}},{"id":"9e20e493-97a4-4136-a9ad-a540998a40ff","block_type":"box","text":"securities in smaller, odd lot sizes. Odd lots of","page_number":56,"box":{"x":530,"y":862,"width":338,"height":11}},{"id":"e1a67963-b44f-4e44-9247-9dfed1278270","block_type":"box","text":"securities in certain asset classes may trade at lo","page_number":56,"box":{"x":116,"y":878,"width":357,"height":12}},{"id":"6ead6a87-4e4b-4284-9193-9a1639db6d1c","block_type":"box","text":"wer prices than institutional round lots, and the value","page_number":56,"box":{"x":473,"y":878,"width":388,"height":11}},{"id":"83dda01d-6905-42c4-af15-50da0c401270","block_type":"box","text":"48","page_number":56,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"cce79e92-523e-4594-bb9c-99b9a97963ef","block_type":"box","text":"NM1026U-6030748-56/260","page_number":56,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ae795755-d520-4455-86f8-7f303669bf7b","block_type":"box","text":"ultimately realized when the securities are sold could differ from the prices used by the Fund. The","page_number":57,"box":{"x":117,"y":87,"width":711,"height":12}},{"id":"ab40b904-4dbc-47c3-976b-e2a5717eb624","block_type":"box","text":"amortized cost method of valuation may be used wit","page_number":57,"box":{"x":116,"y":102,"width":379,"height":13}},{"id":"9f4cc9bc-bf36-419d-8932-8d2ab1263891","block_type":"box","text":"h respect to debt obligations with 60 days or less","page_number":57,"box":{"x":496,"y":103,"width":358,"height":12}},{"id":"b5663bec-af49-4e26-a13f-fad1e1b5c7d6","block_type":"box","text":"remaining to maturity unless such method does not","page_number":57,"box":{"x":117,"y":118,"width":371,"height":12}},{"id":"fa3cb870-911a-4f87-a2ba-abf2116e6a23","block_type":"box","text":"t represent fair value. Certain fixed-income","page_number":57,"box":{"x":488,"y":118,"width":310,"height":12}},{"id":"cee7a761-83f9-4491-8d47-558456802b87","block_type":"box","text":"investments, including asset-backed and mortgage related securities, may be valued based on valuation","page_number":57,"box":{"x":117,"y":134,"width":762,"height":12}},{"id":"21f309c3-fb4b-4ccf-846d-ae102f2754a5","block_type":"box","text":"models that consider the estimated cash flows of","page_number":57,"box":{"x":117,"y":149,"width":358,"height":10}},{"id":"d53902f5-8cf6-4e00-bdb2-4358c6074857","block_type":"box","text":"each tranche of the issuer, establish a benchmark yield","page_number":57,"box":{"x":476,"y":149,"width":405,"height":12}},{"id":"a4f3bc15-8b94-4632-af25-3b5678343aa0","block_type":"box","text":"and develop an estimated tranche specific spread to","page_number":57,"box":{"x":116,"y":165,"width":380,"height":11}},{"id":"a13c805b-f139-49f7-b553-afe0b172a632","block_type":"box","text":"the benchmark yield based on the unique attributes","page_number":57,"box":{"x":496,"y":165,"width":383,"height":12}},{"id":"8fe17e85-878b-473d-ac80-870b957e6897","block_type":"box","text":"of the tranche.","page_number":57,"box":{"x":116,"y":180,"width":110,"height":10}},{"id":"30e1d477-0d1d-4624-9cb5-a6d629f1970c","block_type":"box","text":"Options, Futures, Swaps and Other Derivatives.","page_number":57,"box":{"x":116,"y":211,"width":379,"height":12}},{"id":"a2b1e370-eb78-491b-bbb5-5a2b5d9a4dcd","block_type":"box","text":"Exchange-traded equity options (except ETF","page_number":57,"box":{"x":497,"y":211,"width":342,"height":12}},{"id":"d5faadcd-8ed5-4b08-ae8d-07705774efa1","block_type":"box","text":"options, equity index options or those that are customized) for which market quotations are readily","page_number":57,"box":{"x":116,"y":227,"width":733,"height":12}},{"id":"78d3f458-96ce-4333-9fb7-030232a12dd9","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":57,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"b03af6ca-84b9-4876-9203-2cbf67c82c13","block_type":"box","text":"of trade on which such options are traded. In the event that there is no mean price available for such","page_number":57,"box":{"x":116,"y":258,"width":750,"height":11}},{"id":"706d3045-578a-42eb-b279-3a2013f6003d","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":57,"box":{"x":116,"y":273,"width":748,"height":12}},{"id":"1d56a4b6-1bff-4d76-9cbb-d327350476c7","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":57,"box":{"x":117,"y":289,"width":732,"height":12}},{"id":"f1c71af8-1813-4036-a7e3-971b0bfc872c","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":57,"box":{"x":116,"y":304,"width":770,"height":12}},{"id":"09586c74-7693-4a24-a0fb-7ee921243360","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":57,"box":{"x":117,"y":320,"width":766,"height":12}},{"id":"8b6eac39-eb67-451b-8610-b5c9a7ab2299","block_type":"box","text":"the option, in which case such option will be treated as a Fair Value Asset. Customized exchange","page_number":57,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"01ce6e59-4acf-4a5e-97e5-b547aef2af16","block_type":"box","text":"traded equity options, ETF options, equity index options and OTC derivatives may be valued using a","page_number":57,"box":{"x":116,"y":351,"width":750,"height":12}},{"id":"c69d27e3-715b-4d68-9776-f6657528b16e","block_type":"box","text":"mathematical model which may incorporate a number of market data factors. Financial futures","page_number":57,"box":{"x":117,"y":366,"width":703,"height":12}},{"id":"13d943ef-0d4f-4ad7-9882-25a24af462eb","block_type":"box","text":"contracts and options thereon, which are traded on exchanges, are valued at their last sale price or","page_number":57,"box":{"x":116,"y":382,"width":741,"height":12}},{"id":"23fa16a6-5738-4ca8-b98d-c150a1574ae7","block_type":"box","text":"settle price as of the close of such exchanges. Swap agreements and other derivatives are generally","page_number":57,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"04c35eec-b95d-4b49-938b-268d295df88b","block_type":"box","text":"valued daily based upon quotations from market makers or by a pricing service in accordance with the","page_number":57,"box":{"x":116,"y":413,"width":763,"height":12}},{"id":"d6e840ed-2526-41a9-a5c3-4ad1922d7bea","block_type":"box","text":"Valuation Procedures.","page_number":57,"box":{"x":116,"y":428,"width":170,"height":10}},{"id":"9ce36b58-3ec3-4bbf-8e74-45e9747d8861","block_type":"box","text":"Underlying Funds.","page_number":57,"box":{"x":117,"y":459,"width":145,"height":12}},{"id":"4a40533b-8cf0-4f7c-9d39-d16379b00be4","block_type":"box","text":"Shares of underlying open-end funds (including money market funds) are valued","page_number":57,"box":{"x":263,"y":459,"width":609,"height":12}},{"id":"b395a041-0617-4681-addc-98d49135ed9a","block_type":"box","text":"at NAV. Shares of underlying exchange-traded closed-end funds or other ETFs will be valued at their","page_number":57,"box":{"x":116,"y":475,"width":755,"height":12}},{"id":"861b072b-58a9-469d-a24c-2fcdd0cecd49","block_type":"box","text":"most recent closing price.","page_number":57,"box":{"x":117,"y":490,"width":194,"height":12}},{"id":"dc962374-7d3e-4e66-9e22-26882c362e70","block_type":"box","text":"General Valuation Information.","page_number":57,"box":{"x":116,"y":521,"width":244,"height":10}},{"id":"74167c0a-385c-4ad5-8c8c-1333f8c6a778","block_type":"box","text":"Prices obtained from independent third-party pricing services, broker","page_number":57,"box":{"x":361,"y":521,"width":520,"height":12}},{"id":"7760aed5-70a5-4ae9-b61f-436010b3170a","block_type":"box","text":"dealers or market makers to value the Fund’s securities and other assets and liabilities are based on","page_number":57,"box":{"x":116,"y":537,"width":751,"height":9}},{"id":"3b9fdba7-d476-4a31-9c97-737ab9b2bddf","block_type":"box","text":"information available at the time the Fund values its assets and liabilities. In the event that a pricing","page_number":57,"box":{"x":117,"y":552,"width":740,"height":12}},{"id":"f4f2c2f0-b3d4-4546-8737-dff36391883b","block_type":"box","text":"service quotation is revised or updated subsequent to the day on which the Fund valued such security,","page_number":57,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"7cc2c0b1-8047-4d82-8c99-3a08c1ee4730","block_type":"box","text":"the revised pricing service quotation generally will be applied prospectively. Such determination will be","page_number":57,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"3df5c73b-d664-4ef0-a75b-df0c314263f0","block_type":"box","text":"made considering pertinent facts and circumstances surrounding the revision.","page_number":57,"box":{"x":117,"y":599,"width":581,"height":12}},{"id":"32bacc88-81ee-4cd7-a677-861afbfac4ef","block_type":"box","text":"The price the Fund could receive upon the sale of any particular portfolio investment may differ from","page_number":57,"box":{"x":116,"y":630,"width":747,"height":12}},{"id":"a731b882-a8f8-4794-8be8-7f25b9cab513","block_type":"box","text":"the Fund’s valuation of the investment, particularly for assets that trade in thin or volatile markets or","page_number":57,"box":{"x":116,"y":645,"width":743,"height":12}},{"id":"83f04bb8-5b4b-4e1e-949f-c4bcac3d62a5","block_type":"box","text":"that are valued using a fair valuation methodology or a price provided by an independent pricing","page_number":57,"box":{"x":116,"y":661,"width":711,"height":12}},{"id":"1eec1dac-ed62-45ab-a33c-813873626ebb","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":57,"box":{"x":116,"y":676,"width":723,"height":12}},{"id":"30e9bf28-0cc0-4e96-a1a9-403cab502788","block_type":"box","text":"ascribed by the Fund, and the Fund could realize a greater than expected loss or lesser than expected","page_number":57,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"5380a06e-07ec-4e90-8a26-c72423caf9d4","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":57,"box":{"x":116,"y":707,"width":750,"height":12}},{"id":"333c5301-22a9-4a2a-ad8a-8357076a8f78","block_type":"box","text":"by technological issues and/or errors by pricing services or other third-party service providers.","page_number":57,"box":{"x":117,"y":723,"width":694,"height":12}},{"id":"41eb74f0-d136-45a4-b38e-dfb5ef6d33af","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":57,"box":{"x":117,"y":754,"width":761,"height":12}},{"id":"76feb615-2884-45a6-994d-86af2b40b86b","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":57,"box":{"x":116,"y":769,"width":751,"height":12}},{"id":"5b9631a7-3a9e-426c-9fed-e07a4c007768","block_type":"box","text":"valued by, under the direction of or in accordance with a method approved by BFA, the Fund’s","page_number":57,"box":{"x":116,"y":785,"width":700,"height":12}},{"id":"42c4763c-d72e-41ab-86b2-da454fe07107","block_type":"box","text":"valuation designee, as reflecting fair value. All other assets and liabilities (including securities for which","page_number":57,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"83b8107d-f721-40db-ba6c-8f6734c0d6bf","block_type":"box","text":"market quotations are not readily available) held by the Fund (including restricted securities and private","page_number":57,"box":{"x":117,"y":816,"width":764,"height":12}},{"id":"8d2ca676-16eb-4035-8279-f9f74bb40c70","block_type":"box","text":"market investments, as applicable) are valued at fair value as determined in good faith by BFA","page_number":57,"box":{"x":117,"y":831,"width":705,"height":12}},{"id":"0a5e5a1d-25b0-417a-aa2d-e656e2691426","block_type":"box","text":"pursuant to the Valuation Procedures. Any assets and liabilities which are denominated in a foreign","page_number":57,"box":{"x":117,"y":847,"width":740,"height":12}},{"id":"60a9e07b-7540-4169-909d-be0fa2d47253","block_type":"box","text":"currency are translated into U.S. dollars at the prevailing market rates.","page_number":57,"box":{"x":116,"y":862,"width":527,"height":12}},{"id":"aff8c5d3-1661-4925-8e43-76ffff4d7374","block_type":"box","text":"49","page_number":57,"box":{"x":490,"y":909,"width":18,"height":9}},{"id":"7c91c8e7-8465-491a-83a2-9df56749a607","block_type":"box","text":"NM1026U-6030748-57/260","page_number":57,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a35063cf-15b5-4c48-b57f-394d20c9341e","block_type":"box","text":"Fair Value.","page_number":58,"box":{"x":117,"y":87,"width":83,"height":10}},{"id":"93c70a97-9755-4a6c-a29d-0f2a22369396","block_type":"box","text":"When market quotations are not readily available or are believed by BFA to be unreliable,","page_number":58,"box":{"x":201,"y":87,"width":674,"height":12}},{"id":"922f7a9b-2707-49c1-bc12-7bdd9b05c892","block_type":"box","text":"the Fund’s investments are valued at fair value (“Fair Value Assets”). Fair Value Assets are valued by","page_number":58,"box":{"x":116,"y":102,"width":758,"height":13}},{"id":"dcf89f42-27d7-4e71-9bd1-fe05198bf270","block_type":"box","text":"BFA in accordance with the Valuation Procedures. Pursuant to Rule 2a-5 under the Investment","page_number":58,"box":{"x":117,"y":118,"width":710,"height":10}},{"id":"9c209cb4-8352-4fbd-ac12-5a80ce937f4b","block_type":"box","text":"Company Act, the Board has designated BFA as the valuation designee for the Fund. BFA may","page_number":58,"box":{"x":117,"y":134,"width":712,"height":12}},{"id":"4335d7e8-c3b3-4150-aa8f-b2848b796ce8","block_type":"box","text":"reasonably conclude that a market quotation is not readily available or is unreliable if, among other","page_number":58,"box":{"x":117,"y":149,"width":736,"height":12}},{"id":"e336b7c8-5f2c-458b-969a-5da800fbaf01","block_type":"box","text":"things, a security or other asset or liability does not have a price source due to its complete lack of","page_number":58,"box":{"x":116,"y":165,"width":733,"height":12}},{"id":"bb443b67-143d-4945-bf87-3721e7a04138","block_type":"box","text":"trading, if BFA believes a market quotation from a broker-dealer or other source is unreliable (e.g.,","page_number":58,"box":{"x":116,"y":180,"width":734,"height":12}},{"id":"bb57f1c0-a620-4ef4-81c2-a45f112ed2c0","block_type":"box","text":"where it varies significantly from a recent trade, or no longer reflects the fair value of the security or","page_number":58,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"8e00bb03-28e2-4301-95a9-ef39e6c40848","block_type":"box","text":"other asset or liability subsequent to the most recent market quotation), or where the security or other","page_number":58,"box":{"x":116,"y":211,"width":758,"height":12}},{"id":"921f0bde-f792-4310-bd17-7157abe700d7","block_type":"box","text":"asset or liability is only thinly traded or due to the occurrence of a significant event subsequent to the","page_number":58,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"9b830c90-fe92-4739-b44c-6f34ee693df1","block_type":"box","text":"most recent market quotation. For this purpose, a “significant event” is deemed to occur if BFA","page_number":58,"box":{"x":117,"y":242,"width":706,"height":12}},{"id":"8713acba-b13e-45f1-8af3-4d65f0f20f23","block_type":"box","text":"determines, in its reasonable business judgment, that an event has occurred after the close of trading","page_number":58,"box":{"x":116,"y":258,"width":759,"height":12}},{"id":"e8276a49-5666-4a5a-b733-cb0c50391ada","block_type":"box","text":"for an asset or liability but prior to or at the time of pricing the Fund’s assets or liabilities, is likely to","page_number":58,"box":{"x":116,"y":273,"width":735,"height":12}},{"id":"a6f37a49-9d02-4e20-b7eb-038c790b4b95","block_type":"box","text":"cause a material change to the last exchange closing price or closing market price of one or more","page_number":58,"box":{"x":116,"y":289,"width":730,"height":12}},{"id":"3a803788-b151-4023-817b-0045d4f4b668","block_type":"box","text":"assets held by, or liabilities of, the Fund. On any day the NYSE is open and a foreign market or the","page_number":58,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"a559e951-f18a-475c-9d28-bdc48b28e4ce","block_type":"box","text":"primary exchange on which a foreign asset or liability is traded is closed, such asset or liability will be","page_number":58,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"50127c5d-ce4e-422b-a9da-0f8a55932605","block_type":"box","text":"valued using the prior day’s price, provided that BFA is not aware of any significant event or other","page_number":58,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"230c94f4-3d62-40fd-9392-c01da31f666a","block_type":"box","text":"information that would cause such price to no longer reflect the fair value of the asset or liability, in","page_number":58,"box":{"x":117,"y":351,"width":733,"height":12}},{"id":"1bd032e3-6667-46d4-aa8f-021c72e4272c","block_type":"box","text":"which case such asset or liability would be treated as a Fair Value Asset. For certain foreign assets, a","page_number":58,"box":{"x":116,"y":366,"width":759,"height":12}},{"id":"2e8656dd-ea89-4f15-b1e4-1e52b35c9d83","block_type":"box","text":"third-party vendor supplies evaluated, systematic fair value pricing based upon the movement of a","page_number":58,"box":{"x":116,"y":382,"width":733,"height":12}},{"id":"64fef90d-4f96-4969-84df-23cbd8a732d9","block_type":"box","text":"proprietary multi-factor model after the relevant foreign markets have closed. This systematic fair value","page_number":58,"box":{"x":117,"y":397,"width":767,"height":12}},{"id":"ef702f76-1173-446f-b62a-cc293afdc6d5","block_type":"box","text":"pricing methodology is designed to correlate the prices of foreign assets in one or more non-U.S.","page_number":58,"box":{"x":117,"y":413,"width":723,"height":12}},{"id":"aac2c95e-0843-43c7-8c9b-4e831add5d17","block_type":"box","text":"markets following the close of the local markets to the prices that might have prevailed as of the Fund’s","page_number":58,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"606f3ea4-e76f-482e-b295-a78f71bb8093","block_type":"box","text":"pricing time.","page_number":58,"box":{"x":117,"y":444,"width":94,"height":12}},{"id":"d6c15f52-fac3-4c42-a882-36281bae3119","block_type":"box","text":"BFA’s Rule 2a-5 Committee is responsible for reviewing and approving methodologies by investment","page_number":58,"box":{"x":117,"y":471,"width":753,"height":12}},{"id":"1ec59913-5501-4984-8a46-9631686f8721","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":58,"box":{"x":116,"y":486,"width":763,"height":12}},{"id":"eb951e5d-68f6-4d47-876d-a3843d4f8c56","block_type":"box","text":"accounting agent assists BFA by periodically endeavoring to confirm the prices it receives from all","page_number":58,"box":{"x":116,"y":502,"width":731,"height":12}},{"id":"64c50f1e-1767-4db0-b03a-49aa50b33b6f","block_type":"box","text":"third-party pricing services, index providers and broker-dealers.","page_number":58,"box":{"x":116,"y":517,"width":475,"height":12}},{"id":"0ade13a3-2304-49d0-bffa-846548aea23d","block_type":"box","text":"BFA regularly evaluates the values","page_number":58,"box":{"x":592,"y":517,"width":264,"height":12}},{"id":"cc160606-c1b0-4f3c-afcb-23830cebd0d7","block_type":"box","text":"assigned to the securities and other assets and liabilities of the Fund.","page_number":58,"box":{"x":116,"y":533,"width":519,"height":12}},{"id":"6c958263-31fa-42bf-a752-adf130e0f827","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":58,"box":{"x":116,"y":560,"width":759,"height":12}},{"id":"5e7ef045-b26d-49bb-9daa-7fa4e71dd434","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":58,"box":{"x":117,"y":575,"width":732,"height":12}},{"id":"de489f73-a114-4282-8856-23ef87f7767b","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":58,"box":{"x":116,"y":591,"width":757,"height":12}},{"id":"bc6b8f66-cac7-4bea-b846-ec9e6e677033","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":58,"box":{"x":116,"y":606,"width":764,"height":12}},{"id":"d66ff9d8-063f-431c-b82c-b6e1defb5bdd","block_type":"box","text":"it holds the asset or liability to maturity. Fair value determinations will be based upon all available","page_number":58,"box":{"x":117,"y":622,"width":723,"height":12}},{"id":"b4866605-3e69-406d-92c1-adad5f55959f","block_type":"box","text":"factors that BFA deems relevant at the time of the determination, and may be based on analytical","page_number":58,"box":{"x":116,"y":637,"width":728,"height":12}},{"id":"73cdf241-425f-4039-a933-65190b91f34f","block_type":"box","text":"values determined by BFA using proprietary or third-party valuation models.","page_number":58,"box":{"x":116,"y":653,"width":568,"height":12}},{"id":"ebc16946-2e2e-447b-a428-67f9646b72b1","block_type":"box","text":"Fair value represents a good faith approximation of the value of an asset or liability. When determining","page_number":58,"box":{"x":117,"y":680,"width":758,"height":12}},{"id":"9762a95a-3352-4810-a522-5271ca6fcb4a","block_type":"box","text":"the fair value of an investment, one or more fair value methodologies may be used (depending on","page_number":58,"box":{"x":116,"y":696,"width":724,"height":12}},{"id":"29c12ccc-6c65-4047-af92-da892768e7e1","block_type":"box","text":"certain factors, including the asset type). For example, the investment may be initially priced based on","page_number":58,"box":{"x":116,"y":711,"width":757,"height":12}},{"id":"3cee20ae-bf74-430d-9cc3-76933dbd1d82","block_type":"box","text":"the original cost of the investment or, alternatively, using proprietary or third-party models that may rely","page_number":58,"box":{"x":116,"y":727,"width":764,"height":12}},{"id":"6f853259-b4da-44ca-86ff-d22873c90c70","block_type":"box","text":"upon one or more unobservable inputs. Prices of actual, executed or historical transactions in the","page_number":58,"box":{"x":117,"y":742,"width":721,"height":12}},{"id":"19f36ac9-5753-4440-8160-d225438dbe64","block_type":"box","text":"relevant investment (or comparable instruments) or, where appropriate, an appraisal by a third-party","page_number":58,"box":{"x":117,"y":758,"width":743,"height":12}},{"id":"9e685249-bdf9-45a7-a5f0-19bfd3303cab","block_type":"box","text":"experienced in the valuation of similar instruments, may also be used as a basis for establishing the","page_number":58,"box":{"x":116,"y":773,"width":740,"height":12}},{"id":"13a9b020-9172-4c4c-8c13-2955bed84894","block_type":"box","text":"fair value of an investment.","page_number":58,"box":{"x":116,"y":789,"width":199,"height":9}},{"id":"da6b7f86-1ac5-4557-8c66-3aaeabe463a0","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":58,"box":{"x":116,"y":816,"width":733,"height":12}},{"id":"c03f8f59-1659-4e9b-b604-2664191ae04b","block_type":"box","text":"assets or liabilities could have been sold during the period in which the particular fair values were used","page_number":58,"box":{"x":116,"y":831,"width":767,"height":12}},{"id":"c876ec94-87e3-4773-afb3-6f37459160d8","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":58,"box":{"x":117,"y":847,"width":744,"height":12}},{"id":"cabf92c8-71d0-4315-a0a9-d4caab8bdf76","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":58,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"0e208c9c-ab4e-4957-b029-92912f4235ba","block_type":"box","text":"the economic interest of existing shareholders.","page_number":58,"box":{"x":116,"y":878,"width":352,"height":12}},{"id":"ca5e2221-8018-4c5b-9fc7-dd050cd5fd39","block_type":"box","text":"50","page_number":58,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"20059cd9-41a1-474b-9e0b-1ead615026dc","block_type":"box","text":"NM1026U-6030748-58/260","page_number":58,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"8a7973eb-3d41-4143-8ab3-cc809f05eaa3","block_type":"box","text":"The Fund’s annual audited financial statements, which are prepared in accordance with accounting","page_number":59,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"9c115872-48eb-4eb1-95b6-23a02e5b4e50","block_type":"box","text":"principles generally accepted in the United States of America (“US GAAP”), follow the requirements for","page_number":59,"box":{"x":117,"y":102,"width":767,"height":13}},{"id":"03c1690f-905c-4cec-b9c3-9d67481e1d27","block_type":"box","text":"valuation set forth in Financial Accounting Standards Board Accounting Standards Codification Topic","page_number":59,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"9cd4cda6-6c0c-4c38-a9a2-3ca32580b5f3","block_type":"box","text":"820, “Fair Value Measurements and Disclosures” (“ASC 820”), which defines and establishes a","page_number":59,"box":{"x":116,"y":134,"width":712,"height":12}},{"id":"94be9116-1823-42d5-86d4-eec57819e4e0","block_type":"box","text":"framework for measuring fair value under US GAAP and expands financial statement disclosure","page_number":59,"box":{"x":116,"y":149,"width":717,"height":12}},{"id":"5c5a050d-ecb9-4ed8-8f31-35a5b5d7d616","block_type":"box","text":"requirements relating to fair value measurements.","page_number":59,"box":{"x":117,"y":165,"width":374,"height":12}},{"id":"9c8f3bb3-1c47-4a64-ac11-8f64c4ab606d","block_type":"box","text":"Generally, ASC 820 and other accounting rules applicable to funds and various assets in which they","page_number":59,"box":{"x":117,"y":194,"width":747,"height":12}},{"id":"266548e3-fffe-4c88-9e5c-4050278610f6","block_type":"box","text":"invest are evolving. Such changes may adversely affect the Fund. For example, the evolution of rules","page_number":59,"box":{"x":117,"y":209,"width":757,"height":13}},{"id":"0f8c628d-3e7e-47e8-8bb4-1439f6418bfb","block_type":"box","text":"governing the determination of the fair market value of assets or liabilities, to the extent such rules","page_number":59,"box":{"x":116,"y":225,"width":733,"height":12}},{"id":"b6fe9389-2e6a-4237-8ac7-0164112add1e","block_type":"box","text":"become more stringent, would tend to increase the cost and/or reduce the availability of third-party","page_number":59,"box":{"x":117,"y":240,"width":735,"height":13}},{"id":"7c0cd29b-e569-427f-a017-776623867293","block_type":"box","text":"determinations of fair market value. This may in turn increase the costs associated with selling assets","page_number":59,"box":{"x":116,"y":256,"width":758,"height":12}},{"id":"d42087b9-7326-43cd-a682-02f5c580a866","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":59,"box":{"x":116,"y":271,"width":732,"height":13}},{"id":"4eedb61d-3a13-4362-93e1-b66165afffa8","block_type":"box","text":"value.","page_number":59,"box":{"x":116,"y":287,"width":49,"height":9}},{"id":"6593b29e-1ccb-4c57-a25f-818c4665bf3c","block_type":"box","text":"Brokerage Transactions","page_number":59,"box":{"x":119,"y":336,"width":437,"height":28}},{"id":"4fb0b66a-e763-4491-b138-7c257f5e575f","block_type":"box","text":"Subject to policies established by the Board, BFA is primarily responsible for the execution of the","page_number":59,"box":{"x":116,"y":385,"width":724,"height":12}},{"id":"48129858-3ebd-4a2e-82b8-324550f6f937","block_type":"box","text":"Fund’s portfolio transactions and the allocation of brokerage. BFA does not execute transactions","page_number":59,"box":{"x":117,"y":400,"width":720,"height":12}},{"id":"b81281b3-8c04-4567-a40a-d8041910bfdd","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":59,"box":{"x":116,"y":416,"width":770,"height":12}},{"id":"f9ac2b0a-023b-498f-8710-53d2bd3c9f04","block_type":"box","text":"account certain factors set out below. While BFA generally seeks reasonable trade execution costs,","page_number":59,"box":{"x":116,"y":431,"width":744,"height":12}},{"id":"c131af80-9c39-4c1a-896f-5f6e0bdbf748","block_type":"box","text":"the Fund does not necessarily pay the lowest spread or commission available, and payment of the","page_number":59,"box":{"x":116,"y":447,"width":735,"height":12}},{"id":"2170bb7e-c9a1-4f03-88a3-6afed4f34e8a","block_type":"box","text":"lowest commission or spread is not necessarily consistent with obtaining the best price and execution","page_number":59,"box":{"x":117,"y":462,"width":757,"height":12}},{"id":"e0dc5b36-5102-4983-889e-4e8a469b1b25","block_type":"box","text":"in particular transactions. Subject to applicable legal requirements, BFA may select a broker based","page_number":59,"box":{"x":117,"y":478,"width":738,"height":12}},{"id":"0626bdc7-3e86-4e54-8c25-e608fbd7434a","block_type":"box","text":"partly upon brokerage or research services provided to BFA and its clients, including the Fund. In","page_number":59,"box":{"x":117,"y":493,"width":726,"height":12}},{"id":"e1d70b6f-74a2-4993-8c95-d81f5b6f3876","block_type":"box","text":"return for such services, BFA may cause the Fund to pay a higher commission than other brokers","page_number":59,"box":{"x":117,"y":509,"width":729,"height":12}},{"id":"40b08633-79e1-4c10-8e9b-8bb37a96490d","block_type":"box","text":"would charge if BFA determines in good faith that the commission is reasonable in relation to the","page_number":59,"box":{"x":116,"y":524,"width":723,"height":12}},{"id":"b83163b1-12c5-461b-a22e-c3aae51e53f4","block_type":"box","text":"services provided.","page_number":59,"box":{"x":116,"y":540,"width":140,"height":12}},{"id":"832efc93-9d61-44a8-b523-4ab8e8b5824d","block_type":"box","text":"In selecting brokers or dealers to execute portfolio transactions, BFA seeks to obtain the best price and","page_number":59,"box":{"x":117,"y":569,"width":770,"height":12}},{"id":"64db91a6-02bd-4809-ba5d-000fed52b574","block_type":"box","text":"most favorable execution for the Fund, taking into account a variety of factors including: (i) the size,","page_number":59,"box":{"x":117,"y":585,"width":741,"height":12}},{"id":"a93b8d5c-aaff-4bae-a4ed-3397c80e1f57","block_type":"box","text":"nature and character of the security or instrument being traded and the markets in which it is","page_number":59,"box":{"x":117,"y":600,"width":691,"height":12}},{"id":"70d8a099-4bab-47c2-b244-d56a198dc1a8","block_type":"box","text":"purchased or sold; (ii) the desired timing of the transaction; (iii) BFA’s knowledge of the expected","page_number":59,"box":{"x":117,"y":616,"width":723,"height":12}},{"id":"78320b8c-9d16-4353-9bc0-c3b727f5cac3","block_type":"box","text":"commission rates and spreads currently available; (iv) the activity existing and expected in the market","page_number":59,"box":{"x":116,"y":631,"width":759,"height":12}},{"id":"635b572b-a3b9-447c-85db-61d5bbe0e3fd","block_type":"box","text":"for the particular security or instrument, including any anticipated execution difficulties; (v) the full range","page_number":59,"box":{"x":116,"y":647,"width":772,"height":12}},{"id":"791482e5-7e6a-4df9-b9ff-3eacee4e3a50","block_type":"box","text":"of brokerage services provided; (vi) the broker’s or dealer’s capital; (vii) the quality of research and","page_number":59,"box":{"x":116,"y":662,"width":730,"height":12}},{"id":"1463fd00-47e4-4a21-992b-3bdeb78347d0","block_type":"box","text":"research services provided; (viii) the reasonableness of the commission, dealer spread or its","page_number":59,"box":{"x":117,"y":678,"width":685,"height":12}},{"id":"0c85aadf-1f20-4547-9a4d-bb14a3d84c3c","block_type":"box","text":"equivalent for the specific transaction; and (ix) BFA’s knowledge of any actual or apparent operational","page_number":59,"box":{"x":116,"y":693,"width":755,"height":12}},{"id":"a3055015-5fd1-4b75-98a7-48dda77d5a54","block_type":"box","text":"problems of a broker or dealer.","page_number":59,"box":{"x":117,"y":709,"width":227,"height":12}},{"id":"348d8968-3e8f-4f9a-bbae-677c0bf010fc","block_type":"box","text":"Section 28(e) of the 1934 Act (“Section 28(e)”) permits an investment adviser, under certain","page_number":59,"box":{"x":116,"y":738,"width":680,"height":12}},{"id":"055862b0-9b0b-406c-9c61-dc4c9f01cf8e","block_type":"box","text":"circumstances, to cause an account to pay a broker or dealer a commission for effecting a transaction","page_number":59,"box":{"x":116,"y":754,"width":756,"height":12}},{"id":"7c1a4c38-ac9a-4367-8392-2e1e14204e6c","block_type":"box","text":"that exceeds the amount another broker or dealer would have charged for effecting the same","page_number":59,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"12a703c4-5b2b-4ba1-80a5-e014d31fa625","block_type":"box","text":"transaction in recognition of the value of brokerage and research services provided by that broker or","page_number":59,"box":{"x":116,"y":785,"width":744,"height":12}},{"id":"36e263bc-9280-4848-a665-c43145a8009e","block_type":"box","text":"dealer. This includes commissions paid on riskless principal transactions under certain conditions.","page_number":59,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"ba0a1186-34a9-45f3-a6fb-d03372d472e1","block_type":"box","text":"Brokerage and research services include: (1) furnishing advice as to the value of securities, including","page_number":59,"box":{"x":117,"y":816,"width":748,"height":12}},{"id":"e7a6dee2-ea90-45e9-90f8-5941f746cafc","block_type":"box","text":"pricing and appraisal advice, credit analysis, risk measurement analysis, performance and other","page_number":59,"box":{"x":117,"y":831,"width":716,"height":12}},{"id":"73a3f5bc-c860-4fb4-af7d-8c70404710f0","block_type":"box","text":"analysis, as well as the advisability of investing in, purchasing or selling securities, and the availability","page_number":59,"box":{"x":116,"y":847,"width":758,"height":12}},{"id":"de5e550d-09e7-4b46-a014-2b33c4e9a819","block_type":"box","text":"of securities or purchasers or sellers of securities; (2) furnishing analyses and reports concerning","page_number":59,"box":{"x":116,"y":862,"width":725,"height":12}},{"id":"dd0d9c28-83e6-4fc6-a9aa-8dfab603c469","block_type":"box","text":"issuers, industries, securities, economic factors and trends, portfolio strategy, and the performance of","page_number":59,"box":{"x":117,"y":878,"width":757,"height":12}},{"id":"a4eef060-89b9-4ec8-9143-0fb159994460","block_type":"box","text":"51","page_number":59,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"16c9a37a-b713-4bdf-9d6f-6b69a3c784ff","block_type":"box","text":"NM1026U-6030748-59/260","page_number":59,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f632ee94-38e3-4a68-8c10-f442c6fd561c","block_type":"box","text":"accounts; and (3) effecting securities transactions and performing functions incidental to securities","page_number":60,"box":{"x":116,"y":87,"width":734,"height":12}},{"id":"5d77fd49-de1e-46a0-8b6b-6c146d6afc2c","block_type":"box","text":"transactions (such as clearance, settlement, and custody). BFA believes that access to independent","page_number":60,"box":{"x":116,"y":102,"width":748,"height":13}},{"id":"ce003a7d-1833-4a91-9785-67b9facd652d","block_type":"box","text":"investment research is beneficial to its investment decision-making processes and, therefore, to the","page_number":60,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"1679b2ba-c8e3-49f7-9984-2538bec6fa44","block_type":"box","text":"Fund.","page_number":60,"box":{"x":117,"y":134,"width":46,"height":9}},{"id":"c38e8240-1b58-4d51-bdd1-3a47431c577c","block_type":"box","text":"BFA, unless prohibited by applicable law, may participate in client commission arrangements under","page_number":60,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"cbd14bc6-4eef-485f-ad66-5ba684b17332","block_type":"box","text":"which BFA may execute transactions through a broker-dealer and request that the broker-dealer","page_number":60,"box":{"x":116,"y":180,"width":720,"height":12}},{"id":"6eb6a61d-5e0d-4c19-aa32-772dfc0a448e","block_type":"box","text":"allocate a portion of the commissions or commission credits to another firm that provides research to","page_number":60,"box":{"x":116,"y":196,"width":752,"height":11}},{"id":"80ca6345-aa96-4e4d-b214-f81fa06d079b","block_type":"box","text":"BFA. BFA believes that research services obtained through soft dollar or commission sharing","page_number":60,"box":{"x":117,"y":211,"width":696,"height":12}},{"id":"d0b5c719-5175-4763-b2c2-0699b39716af","block_type":"box","text":"arrangements enhance its investment decision-making capabilities, thereby increasing the prospects","page_number":60,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"f0d40171-0cb5-4fc1-96d6-2d7cfe41ac9c","block_type":"box","text":"for higher investment returns. BFA will engage only in soft dollar or commission sharing transactions","page_number":60,"box":{"x":116,"y":242,"width":749,"height":12}},{"id":"f0e26e04-b0cc-433f-89a8-f616e2a17a4b","block_type":"box","text":"that comply with the requirements of Section 28(e).","page_number":60,"box":{"x":116,"y":258,"width":384,"height":12}},{"id":"f995e17a-e1d4-4399-a41b-641cf5cf0273","block_type":"box","text":"BFA regularly evaluates the soft dollar products and services utilized, as well as the overall soft dollar","page_number":60,"box":{"x":117,"y":289,"width":756,"height":12}},{"id":"568ad5b1-3574-41f8-84b2-23275b4759c2","block_type":"box","text":"and commission sharing arrangements to ensure that trades are executed by firms that are regarded","page_number":60,"box":{"x":116,"y":304,"width":753,"height":12}},{"id":"fc0e0744-7656-4492-a961-d20369c30fd2","block_type":"box","text":"as best able to execute trades for client accounts, while at the same time providing access to the","page_number":60,"box":{"x":116,"y":320,"width":723,"height":12}},{"id":"914661bc-8db9-44bb-a921-87e72258c86c","block_type":"box","text":"research and other services BFA views as impactful to its trading results.","page_number":60,"box":{"x":117,"y":335,"width":545,"height":12}},{"id":"94adf6d4-9ef6-4e8e-80f9-3a3b69804338","block_type":"box","text":"BFA, unless prohibited by applicable law, may utilize soft dollars and related services, including","page_number":60,"box":{"x":117,"y":366,"width":711,"height":12}},{"id":"99913cbe-93ae-4523-aa54-a34b21f654ba","block_type":"box","text":"research (whether prepared by the broker-dealer or prepared by a third-party and provided to BFA by","page_number":60,"box":{"x":117,"y":382,"width":756,"height":12}},{"id":"1df311bc-5ccc-4612-a2fb-d9c612dbbd0c","block_type":"box","text":"the broker-dealer) and execution or brokerage services within applicable rules and BFA’s policies to","page_number":60,"box":{"x":116,"y":397,"width":745,"height":12}},{"id":"b9a1428f-7f25-486c-9356-85c0830aaf2e","block_type":"box","text":"the extent that such permitted services do not compromise BFA’s ability to seek to obtain best","page_number":60,"box":{"x":116,"y":413,"width":703,"height":12}},{"id":"408e5c7f-220c-47aa-b59b-4c89a9a76ee7","block_type":"box","text":"execution. In this regard, the portfolio management investment and/or trading teams may consider a","page_number":60,"box":{"x":116,"y":428,"width":749,"height":12}},{"id":"94746aeb-2847-4014-850d-174d3d2a6ffb","block_type":"box","text":"variety of factors, including the degree to which the broker-dealer: (a) provides access to company","page_number":60,"box":{"x":116,"y":444,"width":735,"height":12}},{"id":"1d593a3b-7bde-495e-b6b7-1f227fd10b2e","block_type":"box","text":"management; (b) provides access to their analysts; (c) provides meaningful/insightful research notes","page_number":60,"box":{"x":117,"y":459,"width":751,"height":12}},{"id":"10fd6431-19b1-4f63-999c-8bb7b3377f24","block_type":"box","text":"on companies or other potential investments; (d) facilitates calls on which meaningful or insightful ideas","page_number":60,"box":{"x":116,"y":475,"width":772,"height":12}},{"id":"d6aee93e-9abd-42c7-93af-877df7d92bb0","block_type":"box","text":"about companies or potential investments are discussed; (e) facilitates conferences at which","page_number":60,"box":{"x":116,"y":490,"width":691,"height":12}},{"id":"4abaa0a3-bc5c-40b1-be2e-7a5b4ff5e281","block_type":"box","text":"meaningful or insightful ideas about companies or potential investments are discussed; or (f) provides","page_number":60,"box":{"x":117,"y":506,"width":758,"height":12}},{"id":"00695f68-20be-4677-9626-db5c1cad60f3","block_type":"box","text":"research tools such as market data, financial analysis, and other third-party related research and","page_number":60,"box":{"x":117,"y":521,"width":722,"height":12}},{"id":"90ba23dc-fb8b-4c2d-ab2e-ea3e136222f2","block_type":"box","text":"brokerage tools that aid in the investment process.","page_number":60,"box":{"x":117,"y":537,"width":380,"height":12}},{"id":"99e27f22-e411-4610-b515-2cc2de489b42","block_type":"box","text":"Research-oriented services for which BFA, unless prohibited by applicable law, might pay with Fund","page_number":60,"box":{"x":117,"y":568,"width":747,"height":12}},{"id":"7831810f-cd98-42ac-b6bc-5f30e998951d","block_type":"box","text":"commissions may be in written form or through direct contact with individuals and may include","page_number":60,"box":{"x":116,"y":583,"width":703,"height":12}},{"id":"97afd6df-c52d-4c9d-8540-8cdab37d72e9","block_type":"box","text":"information as to particular companies or industries and securities or groups of securities, as well as","page_number":60,"box":{"x":117,"y":599,"width":746,"height":12}},{"id":"8537af6b-77a6-4bc3-8801-c5e2e4942c89","block_type":"box","text":"market, economic, or institutional advice and statistical information, political developments and","page_number":60,"box":{"x":117,"y":614,"width":705,"height":12}},{"id":"4e18be0b-07f1-43cd-bad1-17ae5bb1095b","block_type":"box","text":"technical market information that assists in the valuation of investments. Research services furnished","page_number":60,"box":{"x":116,"y":630,"width":757,"height":9}},{"id":"14ab7a1a-c3a3-45e5-9232-6bd043dfa1f0","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":60,"box":{"x":117,"y":645,"width":743,"height":12}},{"id":"d2e62004-4589-4cc1-807a-9f2f24529de6","block_type":"box","text":"connection with the fund or account that paid commissions to the broker providing such services. In","page_number":60,"box":{"x":116,"y":661,"width":737,"height":12}},{"id":"bbfbbcac-a8a0-4601-9bb2-8fdabee2d56c","block_type":"box","text":"some cases, research information received from brokers by mutual fund management personnel, or","page_number":60,"box":{"x":116,"y":676,"width":741,"height":12}},{"id":"9f293d9c-a5c6-48d7-9a28-88675003381f","block_type":"box","text":"personnel principally responsible for BFA’s individually managed portfolios, is not necessarily shared","page_number":60,"box":{"x":117,"y":692,"width":745,"height":12}},{"id":"5e05cd46-2b2f-4836-b88e-6c84f34702ad","block_type":"box","text":"by and between such personnel. Any investment advisory or other fees paid by the Fund to BFA are","page_number":60,"box":{"x":117,"y":707,"width":742,"height":12}},{"id":"639dc3eb-06ac-47c4-a0ac-1f0731c767a5","block_type":"box","text":"not reduced as a result of BFA’s receipt of research services. In some cases, BFA may receive a","page_number":60,"box":{"x":117,"y":723,"width":718,"height":12}},{"id":"56156b9d-3381-434a-9933-e3d992ee103b","block_type":"box","text":"service from a broker that has both a “research” and a “non-research” use. When this occurs BFA","page_number":60,"box":{"x":116,"y":738,"width":725,"height":10}},{"id":"f5297503-d497-4334-87e1-88a6e7276a9d","block_type":"box","text":"makes a good faith allocation, under all the circumstances, between the research and non-research","page_number":60,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"5d86813f-57e9-4332-a5ae-e20abe7518dc","block_type":"box","text":"uses of the service. The percentage of the service that is used for research purposes may be paid for","page_number":60,"box":{"x":117,"y":769,"width":752,"height":12}},{"id":"b0f8ca49-fc22-4b08-853c-25ad6a3cb522","block_type":"box","text":"with client commissions, while BFA will use its own funds to pay for the percentage of the service that","page_number":60,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"f81ab85f-abf6-433b-9631-366ef1403349","block_type":"box","text":"is used for non-research purposes. In making this good faith allocation, BFA faces a potential conflict","page_number":60,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"46d5a21e-2da7-40e5-adaa-4933481973e0","block_type":"box","text":"of interest, but BFA believes that its allocation procedures are reasonably designed to ensure that it","page_number":60,"box":{"x":116,"y":816,"width":739,"height":12}},{"id":"8ca4a724-3d92-40eb-8e22-86a35b62de9c","block_type":"box","text":"appropriately allocates the anticipated use of such services to their research and non-research uses.","page_number":60,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"a8ee8caf-dc8a-46e7-8508-ee85d4c8b6bf","block_type":"box","text":"Payments of commissions to brokers who are affiliated persons of the Fund will be made in","page_number":60,"box":{"x":117,"y":862,"width":681,"height":12}},{"id":"53df62ba-6743-4579-b86f-38c2c7381f4f","block_type":"box","text":"accordance with Rule 17e-1 under the Investment Company Act.","page_number":60,"box":{"x":116,"y":878,"width":486,"height":12}},{"id":"6084d431-3ba9-442a-baa4-eee9704b93e9","block_type":"box","text":"52","page_number":60,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"43bd7f8c-fcf6-4116-9f69-57b0a95f5337","block_type":"box","text":"NM1026U-6030748-60/260","page_number":60,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"51f792d5-2693-45c6-97e4-d024f3a348ce","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":61,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"a0701582-1108-4dbd-a550-b38947337832","block_type":"box","text":"situations, the broker may be a member of the selling group that will, in addition to selling securities,","page_number":61,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"9c45bba7-1189-4d70-9d16-8d1d2b0c4f3b","block_type":"box","text":"provide BFA with research services. FINRA has adopted rules expressly permitting these types of","page_number":61,"box":{"x":117,"y":118,"width":729,"height":12}},{"id":"679583fd-ed5c-408a-b97f-2f6f24406931","block_type":"box","text":"arrangements under certain circumstances. Generally, the broker will provide research “credits” in","page_number":61,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"e52a386c-1a84-47a0-91e3-99903c86861a","block_type":"box","text":"these situations at a rate that is higher than that available for typical secondary market transactions.","page_number":61,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"f0b67ce2-40af-4021-ae4a-1fd09fded1ef","block_type":"box","text":"These arrangements may not fall within the safe harbor of Section 28(e).","page_number":61,"box":{"x":116,"y":165,"width":544,"height":12}},{"id":"39e608a1-9856-422f-9ed6-d60a1d0aab57","block_type":"box","text":"The Fund anticipates that its brokerage transactions involving foreign securities generally will be","page_number":61,"box":{"x":116,"y":193,"width":718,"height":12}},{"id":"51302113-dd16-47c3-85aa-6b97cc12d131","block_type":"box","text":"conducted primarily on the principal stock exchanges of the applicable country. Foreign equity","page_number":61,"box":{"x":116,"y":208,"width":702,"height":12}},{"id":"8feb8614-1298-4454-9641-ffca383c8f6a","block_type":"box","text":"securities may be held by the Fund in the form of depositary receipts, or other securities convertible","page_number":61,"box":{"x":116,"y":224,"width":744,"height":12}},{"id":"0962eb55-90e7-41f2-9e88-517b580d2474","block_type":"box","text":"into foreign equity securities. Depositary receipts may be listed on stock exchanges, or traded in OTC","page_number":61,"box":{"x":117,"y":239,"width":758,"height":12}},{"id":"6ef8c2bc-ea08-4626-85a0-15ae03395982","block_type":"box","text":"markets in the United States or Europe, as the case may be. American Depositary Receipts, like other","page_number":61,"box":{"x":117,"y":255,"width":762,"height":12}},{"id":"b0bd274e-dee6-4dba-82c1-e959b26ff02b","block_type":"box","text":"securities traded in the United States, will be subject to negotiated commission rates.","page_number":61,"box":{"x":116,"y":270,"width":636,"height":12}},{"id":"ca99be46-2c6a-4f19-aeb5-cb3c9a12c868","block_type":"box","text":"The Fund may invest in certain securities traded in the OTC market and intends to deal directly with","page_number":61,"box":{"x":116,"y":299,"width":745,"height":12}},{"id":"e8f1d0fe-931a-4791-85ea-8d36a8cf925e","block_type":"box","text":"the dealers who make a market in the particular securities, except in those circumstances in which","page_number":61,"box":{"x":116,"y":314,"width":735,"height":12}},{"id":"2711ca82-e7e5-47af-adb1-4a64d9d1b114","block_type":"box","text":"better prices and execution are available elsewhere. Under the Investment Company Act, persons","page_number":61,"box":{"x":117,"y":330,"width":732,"height":12}},{"id":"d43526ab-4eb9-4f84-ba61-57ecdca390d6","block_type":"box","text":"affiliated with the Fund and persons who are affiliated with such affiliated persons are prohibited from","page_number":61,"box":{"x":116,"y":345,"width":755,"height":12}},{"id":"8e8aea37-dfae-4d63-af39-b1066a927842","block_type":"box","text":"dealing with the Fund as principal in the purchase and sale of securities unless a permissive order","page_number":61,"box":{"x":116,"y":361,"width":733,"height":12}},{"id":"29c1b929-4bbd-4275-96d6-3a6446c17827","block_type":"box","text":"allowing such transactions is obtained from the Commission. Since transactions in the OTC market","page_number":61,"box":{"x":116,"y":376,"width":740,"height":12}},{"id":"77f6bb3d-817a-4a94-a4c9-20b4203a7590","block_type":"box","text":"usually involve transactions with the dealers acting as principal for their own accounts, the Fund will","page_number":61,"box":{"x":117,"y":392,"width":743,"height":12}},{"id":"083b7d5a-3449-4a45-8c5c-38ad1d949a55","block_type":"box","text":"not deal with affiliated persons in connection with such transactions. However, an affiliated person of","page_number":61,"box":{"x":117,"y":407,"width":750,"height":12}},{"id":"1a07656b-21f0-4c89-be46-a552fc197204","block_type":"box","text":"the Fund may serve as its broker in OTC transactions conducted on an agency basis provided that,","page_number":61,"box":{"x":116,"y":423,"width":742,"height":12}},{"id":"53e1d8a1-40d8-4fc5-aa70-b8ffdcb933a4","block_type":"box","text":"among other things, the fee or commission received by such affiliated broker is reasonable and fair","page_number":61,"box":{"x":116,"y":438,"width":739,"height":12}},{"id":"ca6c3747-49d9-451b-a953-e945548ea653","block_type":"box","text":"compared to the fee or commission received by non-affiliated brokers in connection with comparable","page_number":61,"box":{"x":116,"y":454,"width":751,"height":12}},{"id":"9084ed36-9fdd-472f-9e4a-6b7013e0652e","block_type":"box","text":"transactions.","page_number":61,"box":{"x":116,"y":469,"width":100,"height":10}},{"id":"3544e780-8140-49ac-ace2-df77f52a71ca","block_type":"box","text":"OTC issues, including most fixed-income securities such as corporate debt and U.S. Government","page_number":61,"box":{"x":116,"y":498,"width":729,"height":12}},{"id":"5c7dd0e5-7792-4df6-aeb6-b3dab70ca5bc","block_type":"box","text":"securities, are normally traded on a “net” basis without a stated commission, through dealers acting for","page_number":61,"box":{"x":116,"y":513,"width":767,"height":12}},{"id":"fe3812c4-6617-4017-bf68-b874ba014409","block_type":"box","text":"their own account and not as brokers. The Fund will primarily engage in transactions with these","page_number":61,"box":{"x":116,"y":529,"width":713,"height":12}},{"id":"52b09c5a-75d0-419e-aeb5-92bd8ec9fe4f","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":61,"box":{"x":116,"y":544,"width":757,"height":12}},{"id":"3b80c5c1-a9db-4113-95c8-7615fac50971","block_type":"box","text":"broker. Prices paid to a dealer with respect to both foreign and domestic securities will generally","page_number":61,"box":{"x":117,"y":560,"width":716,"height":12}},{"id":"4f7f1bf3-910e-4e37-951b-0c9d9b28d934","block_type":"box","text":"include a “spread,” which is the difference between the prices at which the dealer is willing to purchase","page_number":61,"box":{"x":117,"y":575,"width":766,"height":12}},{"id":"1d229483-119e-428f-8687-ec3945198ee4","block_type":"box","text":"and sell the specific security at the time, and includes the dealer’s normal profit.","page_number":61,"box":{"x":116,"y":591,"width":596,"height":12}},{"id":"cbfb538e-e866-46d7-8fbf-c736c8ffff28","block_type":"box","text":"Purchases of money market instruments by the Fund are made from dealers, underwriters and issuers.","page_number":61,"box":{"x":117,"y":619,"width":770,"height":12}},{"id":"db513ecb-df19-4db3-ad8d-1887fe579721","block_type":"box","text":"The Fund does not currently expect to incur any brokerage commission expense on such transactions","page_number":61,"box":{"x":116,"y":635,"width":762,"height":12}},{"id":"bc3efa01-bf83-4919-af74-69a4d26557b5","block_type":"box","text":"because money market instruments are generally traded on a “net” basis with dealers acting as","page_number":61,"box":{"x":117,"y":650,"width":712,"height":12}},{"id":"983c48e6-191b-4e9e-b8ba-1e773821109a","block_type":"box","text":"principal for their own accounts without a stated commission. The price of the security, however,","page_number":61,"box":{"x":117,"y":666,"width":712,"height":12}},{"id":"1b273627-6845-41bd-8c1f-2cc43832308e","block_type":"box","text":"usually includes a profit to the dealer.","page_number":61,"box":{"x":117,"y":681,"width":275,"height":12}},{"id":"95349398-bee4-446c-9272-726bfdde020b","block_type":"box","text":"Securities purchased in underwritten offerings include a fixed amount of compensation to the","page_number":61,"box":{"x":116,"y":709,"width":689,"height":13}},{"id":"2d5d929e-eae3-4cd0-9101-f705e3a970d7","block_type":"box","text":"underwriter, generally referred to as the underwriter’s concession or discount. When offered securities","page_number":61,"box":{"x":117,"y":725,"width":756,"height":12}},{"id":"f74d2a11-8a86-4026-bc3f-0e2766d2db20","block_type":"box","text":"are purchased or sold directly from or to an issuer, no commissions or discounts are paid except where","page_number":61,"box":{"x":116,"y":740,"width":766,"height":13}},{"id":"1a589f70-ff78-4773-91a9-eef3fcd5ba0f","block_type":"box","text":"required by local markets.","page_number":61,"box":{"x":117,"y":756,"width":190,"height":12}},{"id":"c1842a12-bea6-4db8-bc68-7e775496b736","block_type":"box","text":"BFA may seek to obtain an undertaking from issuers of commercial paper or dealers selling","page_number":61,"box":{"x":117,"y":784,"width":678,"height":12}},{"id":"50a23cbb-f713-4d2b-a3b3-50dafacd5558","block_type":"box","text":"commercial paper to consider the repurchase of such securities from the Fund prior to maturity at their","page_number":61,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"214fd0e7-2cf5-438b-87de-3fa4db702478","block_type":"box","text":"original cost plus interest (sometimes adjusted to reflect the actual maturity of the securities), if it","page_number":61,"box":{"x":116,"y":815,"width":716,"height":12}},{"id":"d7324755-0b53-4118-8672-7faa4deff130","block_type":"box","text":"believes that the Fund’s anticipated need for liquidity makes such action desirable. Any such","page_number":61,"box":{"x":117,"y":831,"width":690,"height":12}},{"id":"fde8709f-4b81-4e76-943f-2682196955ae","block_type":"box","text":"repurchase prior to maturity reduces the possibility that the Fund would incur a capital loss in","page_number":61,"box":{"x":117,"y":846,"width":693,"height":12}},{"id":"48125b90-ff76-4ae6-ab9a-25f48134a5e4","block_type":"box","text":"liquidating commercial paper, especially if interest rates have risen since acquisition of such","page_number":61,"box":{"x":117,"y":862,"width":685,"height":12}},{"id":"e5407fa2-c24c-4d37-9414-b6eb927772ff","block_type":"box","text":"commercial paper.","page_number":61,"box":{"x":116,"y":877,"width":143,"height":12}},{"id":"1dc87ced-0710-4d7f-8545-04a087a44155","block_type":"box","text":"53","page_number":61,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"95de31b8-fbc9-4ec7-9a92-eba17af6dd20","block_type":"box","text":"NM1026U-6030748-61/260","page_number":61,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"3b956c59-c8cd-4921-a78f-a4c11c436901","block_type":"box","text":"Investment decisions for the Fund and for other investment accounts managed by BFA and the other","page_number":62,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"051c1c1b-b08d-409e-add1-c6c5426cbb68","block_type":"box","text":"Affiliates are made independently of each other in light of differing conditions. BFA allocates","page_number":62,"box":{"x":116,"y":102,"width":686,"height":13}},{"id":"5bd2779f-7432-48e8-9cd9-4b3c518aa735","block_type":"box","text":"investments among client accounts in a fair and equitable manner over time. A variety of factors will be","page_number":62,"box":{"x":117,"y":118,"width":767,"height":12}},{"id":"55c73966-7715-4565-9cff-b44d7119b29f","block_type":"box","text":"considered in making such allocations. These factors include: (i) investment objectives or strategies for","page_number":62,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"9abe2a22-a4a8-4357-aea0-c4549aa006d2","block_type":"box","text":"particular accounts, including sector, industry, country or region and capitalization weightings; (ii) tax","page_number":62,"box":{"x":117,"y":149,"width":749,"height":12}},{"id":"fd9e898e-f6d8-4496-a632-94192b44d3ad","block_type":"box","text":"considerations of an account; (iii) risk or investment concentration parameters for an account;","page_number":62,"box":{"x":116,"y":165,"width":699,"height":12}},{"id":"362c94c7-da28-4c54-8995-a3ccd40a9ba6","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":62,"box":{"x":117,"y":180,"width":737,"height":12}},{"id":"24b8dfd4-0a05-4118-8e2d-eb4a2e8c29f6","block_type":"box","text":"availability and liquidity requirements for accounts; (vii) regulatory restrictions; (viii) minimum","page_number":62,"box":{"x":116,"y":196,"width":690,"height":12}},{"id":"dd551134-74c6-48d1-a48a-783d6c541d2f","block_type":"box","text":"investment size of an account; (ix) relative size of account; and (x) such other factors as may be","page_number":62,"box":{"x":117,"y":211,"width":717,"height":12}},{"id":"7a212670-cf3a-4340-9838-418fd6877c5e","block_type":"box","text":"approved by BlackRock’s general counsel. Moreover, investments may not be allocated to one client","page_number":62,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"b9c82bc9-f1bd-43ad-9143-33a5ca14e828","block_type":"box","text":"account over another based on any of the following considerations: (i) to favor one client account at the","page_number":62,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"129570ab-d112-4dc9-b42a-643ab15c4560","block_type":"box","text":"expense of another; (ii) to generate higher fees paid by one client account over another or to produce","page_number":62,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"e9c8b009-0cef-4956-90e7-c84a2fa45e5e","block_type":"box","text":"greater performance compensation to BlackRock; (iii) to develop or enhance a relationship with a client","page_number":62,"box":{"x":116,"y":273,"width":770,"height":12}},{"id":"2dd28034-34f1-4497-a4b3-faf125f9a72c","block_type":"box","text":"or prospective client; (iv) to compensate a client for past services or benefits rendered to BlackRock or","page_number":62,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"6c5b7a7f-7810-4371-b498-5110f888d3d7","block_type":"box","text":"to induce future services or benefits to be rendered to BlackRock; or (v) to manage or equalize","page_number":62,"box":{"x":116,"y":304,"width":707,"height":12}},{"id":"03783e12-ca7e-4f18-a84a-e22d0c2be7a2","block_type":"box","text":"investment performance among different client accounts.","page_number":62,"box":{"x":117,"y":320,"width":426,"height":12}},{"id":"8b3f0b3d-9de3-45a2-a0d2-7d07a1383e5d","block_type":"box","text":"Equity securities will generally be allocated among client accounts within the same investment","page_number":62,"box":{"x":117,"y":347,"width":702,"height":12}},{"id":"2e6d736b-abeb-4f8b-89a3-e50f43e25cb9","block_type":"box","text":"mandate on a pro rata basis. All allocations of equity securities will be subject, where relevant, to share","page_number":62,"box":{"x":117,"y":362,"width":769,"height":12}},{"id":"f04e7344-2d64-4c05-942c-0af01e46a170","block_type":"box","text":"minimums established for accounts and compliance constraints.","page_number":62,"box":{"x":117,"y":378,"width":479,"height":12}},{"id":"0d191c7b-d6c2-41c9-ae2a-58981cca32dc","block_type":"box","text":"Initial public offerings (“IPOs”) of securities may be over-subscribed and subsequently trade at a","page_number":62,"box":{"x":117,"y":405,"width":716,"height":12}},{"id":"09fdd640-5908-4382-a421-e26fdda1a774","block_type":"box","text":"premium in the secondary market. In these situations, the supply of securities available for client","page_number":62,"box":{"x":117,"y":420,"width":718,"height":12}},{"id":"81a563e4-4533-48b0-9498-25bad536998a","block_type":"box","text":"accounts is often less than the amount of securities the accounts would otherwise take. In order to","page_number":62,"box":{"x":116,"y":436,"width":734,"height":9}},{"id":"5572b8cf-13a8-418b-8799-321d06aeaea6","block_type":"box","text":"allocate these investments fairly and equitably among client accounts over time, each portfolio","page_number":62,"box":{"x":116,"y":451,"width":704,"height":12}},{"id":"6a658c71-d879-4df5-b92d-edacf2d5fcae","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":62,"box":{"x":117,"y":467,"width":766,"height":12}},{"id":"77be689a-cde8-4f74-ac48-a5f9c0d00f04","block_type":"box","text":"level of interest in a particular offering with respect to eligible client accounts for which that team is","page_number":62,"box":{"x":117,"y":482,"width":733,"height":12}},{"id":"3db81789-c7d2-4f43-8987-24c496ef36b6","block_type":"box","text":"responsible. IPOs of U.S. equity securities will be identified as eligible for particular client accounts that","page_number":62,"box":{"x":117,"y":498,"width":768,"height":12}},{"id":"16686c20-f2aa-4c2d-9e10-b4190ba6295e","block_type":"box","text":"are managed by portfolio teams who have indicated interest in the offering based on market","page_number":62,"box":{"x":116,"y":513,"width":687,"height":12}},{"id":"771b266b-32bc-410f-b73d-130fa5027d4f","block_type":"box","text":"capitalization of the issuer of the security and the investment mandate of the client account and in the","page_number":62,"box":{"x":116,"y":529,"width":758,"height":12}},{"id":"9e8eb9c5-ba85-43ce-ae37-d761b4c77549","block_type":"box","text":"case of international equity securities, the country where the offering is taking place and the investment","page_number":62,"box":{"x":116,"y":544,"width":771,"height":12}},{"id":"91de4e61-e826-4a24-a135-e734407092ec","block_type":"box","text":"mandate of the client account. Generally, shares received during the IPO will be allocated among","page_number":62,"box":{"x":117,"y":560,"width":726,"height":12}},{"id":"6531fab2-73d8-4ccf-9c53-fea3d429eedc","block_type":"box","text":"participating client accounts within each investment mandate on a pro rata basis. In situations where","page_number":62,"box":{"x":117,"y":576,"width":749,"height":11}},{"id":"56113988-dcab-4f48-95f6-dfbbe9a5456d","block_type":"box","text":"supply is too limited to be allocated among all accounts for which the investment is eligible, portfolio","page_number":62,"box":{"x":116,"y":591,"width":744,"height":12}},{"id":"4b2b175b-5e53-46b6-b427-3d331eb232c8","block_type":"box","text":"managers may rotate such investment opportunities among one or more accounts so long as the","page_number":62,"box":{"x":117,"y":607,"width":723,"height":11}},{"id":"043ae6f0-5bbf-41a9-853c-92615a400000","block_type":"box","text":"rotation system provides for fair access for all client accounts over time. Other allocation","page_number":62,"box":{"x":117,"y":622,"width":659,"height":12}},{"id":"26cd8afb-cd88-4f1e-991b-ae39c0f5fa05","block_type":"box","text":"methodologies that are considered by BFA to be fair and equitable to clients may be used as well.","page_number":62,"box":{"x":117,"y":637,"width":730,"height":12}},{"id":"3d0cee1a-cf53-43eb-a1fb-34654bd1eb08","block_type":"box","text":"Because different accounts may have differing investment objectives and policies, BFA may buy and","page_number":62,"box":{"x":117,"y":665,"width":745,"height":12}},{"id":"60181eaf-c659-42cf-bdf1-9bae21fcbec3","block_type":"box","text":"sell the same securities at the same time for different clients based on the particular investment","page_number":62,"box":{"x":116,"y":680,"width":708,"height":12}},{"id":"ff78e78b-af78-471b-b068-8a349d920078","block_type":"box","text":"objective, guidelines and strategies of those accounts. For example, BFA may decide that it may be","page_number":62,"box":{"x":116,"y":696,"width":739,"height":12}},{"id":"bbeaaa1a-ef60-416e-be01-ec79f6351697","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":62,"box":{"x":116,"y":711,"width":730,"height":12}},{"id":"af34c805-1512-4276-825b-a0e10602f35c","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":62,"box":{"x":116,"y":727,"width":758,"height":12}},{"id":"7950b6b2-840b-4ef5-a376-32c99d446661","block_type":"box","text":"during the same period increase the demand for securities being purchased or the supply of securities","page_number":62,"box":{"x":116,"y":742,"width":758,"height":12}},{"id":"ddaeac61-dff8-4ef3-9526-9dbd47f7ec0c","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":62,"box":{"x":117,"y":758,"width":758,"height":12}},{"id":"c848208b-5507-4c16-9279-b5f9ece8dcb2","block_type":"box","text":"behalf of one or more of its clients may decrease the market price of such security, adversely","page_number":62,"box":{"x":117,"y":773,"width":690,"height":12}},{"id":"84c3d7e1-a319-4a1e-b590-06e98bc1e009","block_type":"box","text":"impacting other BlackRock clients that still hold the security. If purchases or sales of securities arise for","page_number":62,"box":{"x":117,"y":789,"width":764,"height":12}},{"id":"0b65a083-d46c-4cee-a2b3-2e09d558144c","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":62,"box":{"x":116,"y":804,"width":757,"height":10}},{"id":"7d29fde3-5aa4-45dd-9811-315065d55daa","block_type":"box","text":"BFA or another Affiliate act as investment manager, transactions in such securities will be made,","page_number":62,"box":{"x":117,"y":820,"width":715,"height":12}},{"id":"32e6088a-64aa-4b3c-bb56-0327ba958934","block_type":"box","text":"insofar as feasible, for the respective funds and clients in a manner deemed equitable to all.","page_number":62,"box":{"x":117,"y":835,"width":686,"height":12}},{"id":"5dba5e8d-d064-4a43-8101-d8247d717dc1","block_type":"box","text":"In certain instances, BFA may find it efficient for purposes of seeking to obtain best execution, to","page_number":62,"box":{"x":117,"y":862,"width":720,"height":12}},{"id":"05372254-862c-4716-bd0f-ffb0fb0edd86","block_type":"box","text":"aggregate certain contemporaneous purchases or sale orders of its advisory accounts and advisory","page_number":62,"box":{"x":116,"y":878,"width":745,"height":12}},{"id":"141bdc97-1a56-4afc-b8c5-5de7399f49da","block_type":"box","text":"54","page_number":62,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0e87314a-2a52-4941-87fc-2c39aa1710ad","block_type":"box","text":"NM1026U-6030748-62/260","page_number":62,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d55429c3-bcbb-40d3-ad59-8b4198952631","block_type":"box","text":"accounts of affiliates. In general, all contemporaneous trades for client accounts under management by","page_number":63,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"306b9fa5-7c09-4618-b295-c886c80e3d7c","block_type":"box","text":"the same portfolio manager or investment team will be aggregated in a single order if the trader","page_number":63,"box":{"x":116,"y":102,"width":713,"height":13}},{"id":"cb03912b-c5bc-46c3-8da6-540f73155af9","block_type":"box","text":"believes the aggregated trade would provide each client with an opportunity to achieve a more","page_number":63,"box":{"x":117,"y":118,"width":704,"height":12}},{"id":"6408f539-0918-4a07-9b07-b7a9b5354efd","block_type":"box","text":"favorable execution at a potentially lower execution cost. The costs associated with an aggregated","page_number":63,"box":{"x":116,"y":134,"width":736,"height":12}},{"id":"df32dea2-3eaa-4a58-8f8e-6d162c63a674","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":63,"box":{"x":116,"y":149,"width":735,"height":12}},{"id":"bdad3e25-e175-4ddc-868e-70a0733a47b3","block_type":"box","text":"particular portfolio manager or management team is filled at several different prices through multiple","page_number":63,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"722b6ea5-28f7-4970-a806-9bbe0f86658e","block_type":"box","text":"trades, all accounts participating in the order will receive the average price except in the case of certain","page_number":63,"box":{"x":116,"y":180,"width":771,"height":12}},{"id":"8cce4960-856d-4dc8-8be1-3dc19234dbbe","block_type":"box","text":"international markets where average pricing is not permitted. While in some cases this practice could","page_number":63,"box":{"x":117,"y":196,"width":753,"height":12}},{"id":"46d5ede0-dce2-4ba6-9407-c47a257f77eb","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":63,"box":{"x":117,"y":211,"width":736,"height":12}},{"id":"95871e59-21b8-478d-b46d-cf346f88d37c","block_type":"box","text":"other cases it could be beneficial to the Fund. Transactions effected by BFA or the other Affiliates on","page_number":63,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"394bd371-1f0f-45fb-95c6-2f2a7f1f09a5","block_type":"box","text":"behalf of more than one of its clients during the same period may increase the demand for securities","page_number":63,"box":{"x":117,"y":242,"width":749,"height":12}},{"id":"48ed7cc9-f914-400b-9f08-ee50332c9618","block_type":"box","text":"being purchased or the supply of securities being sold, causing an adverse effect on price. The trader","page_number":63,"box":{"x":117,"y":258,"width":758,"height":12}},{"id":"b7f7b17d-b987-4eee-8baa-7654cfd49d53","block_type":"box","text":"will give the aggregated order to the broker-dealer that the trader has identified as being able to","page_number":63,"box":{"x":116,"y":273,"width":714,"height":12}},{"id":"d9ff1617-753b-450e-bee8-7c8c7b1d60fb","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":63,"box":{"x":117,"y":289,"width":767,"height":12}},{"id":"b0d1c4d4-3dc0-4eae-b444-342c59768acd","block_type":"box","text":"reasonable amount of time of the order receipt and aggregated orders will be kept aggregated only","page_number":63,"box":{"x":117,"y":304,"width":737,"height":12}},{"id":"76240841-0dda-4e33-8f04-64c534221c00","block_type":"box","text":"long enough to execute the order.","page_number":63,"box":{"x":117,"y":320,"width":255,"height":12}},{"id":"08087124-1684-47f3-ab5d-eda854d4c5d9","block_type":"box","text":"The Fund will not purchase securities during the existence of any underwriting or selling group relating","page_number":63,"box":{"x":116,"y":349,"width":764,"height":12}},{"id":"c6ed8b31-0882-4f47-9310-a758c5f9d903","block_type":"box","text":"to such securities of which BFA, BRIL or any affiliated person (as defined in the Investment Company","page_number":63,"box":{"x":116,"y":365,"width":758,"height":12}},{"id":"ce1267c7-42f3-42ab-9aa4-0154999d2aab","block_type":"box","text":"Act) thereof is a member except pursuant to procedures adopted by the Board in accordance with","page_number":63,"box":{"x":116,"y":380,"width":731,"height":12}},{"id":"c3eb3161-82b9-4262-aff2-992c97e07fe7","block_type":"box","text":"Rule 10f-3 under the Investment Company Act. In no instance will portfolio securities be purchased","page_number":63,"box":{"x":117,"y":396,"width":739,"height":12}},{"id":"aec6873c-6f77-446b-86a8-2c1e55679736","block_type":"box","text":"from or sold to BFA, BRIL or any affiliated person of the foregoing entities except as permitted by","page_number":63,"box":{"x":116,"y":411,"width":725,"height":12}},{"id":"86d7f4cb-c628-404d-bcc9-a3db6bf0bd6a","block_type":"box","text":"Commission exemptive order or by applicable law.","page_number":63,"box":{"x":117,"y":427,"width":378,"height":12}},{"id":"89b2bc94-af05-43b3-bac3-368306bbe211","block_type":"box","text":"The table below sets forth the brokerage commissions paid by the Fund for the fiscal period noted.","page_number":63,"box":{"x":116,"y":456,"width":736,"height":12}},{"id":"3c2050c2-f0c7-48ae-b69a-b83c9a7b8819","block_type":"box","text":"Fund Inception Date","page_number":63,"box":{"x":325,"y":504,"width":128,"height":9}},{"id":"a83912f8-20d1-4548-bcc9-cb7bee291d68","block_type":"box","text":"Brokerage Commissions","page_number":63,"box":{"x":532,"y":483,"width":157,"height":9}},{"id":"64d809f6-e26f-4b0e-8710-159d7078e1a7","block_type":"box","text":"Paid During the Fiscal","page_number":63,"box":{"x":541,"y":493,"width":139,"height":10}},{"id":"3c13f3cc-9cfb-4a82-853b-acd9053d5c2e","block_type":"box","text":"Period Ended October 31, 2025","page_number":63,"box":{"x":512,"y":503,"width":197,"height":10}},{"id":"8c3a7dc7-457d-42a4-97ce-5942702acacd","block_type":"box","text":"March 12, 2025 $8,627","page_number":63,"box":{"x":331,"y":522,"width":310,"height":11}},{"id":"852f60a9-c20d-490c-8ad7-5b5216e0a164","block_type":"box","text":"The Fund did not pay any brokerage commissions to BRIL, an affiliate of BFA, or to any other broker","page_number":63,"box":{"x":116,"y":552,"width":752,"height":12}},{"id":"cd28f732-b20f-40bf-a2dd-4b3728f35d6d","block_type":"box","text":"dealer that is part of the BlackRock group of companies during the period March 12, 2025","page_number":63,"box":{"x":116,"y":567,"width":671,"height":12}},{"id":"b8436f36-c8f0-4d76-965c-a3d81b271613","block_type":"box","text":"(commencement of operations) to October 31, 2025.","page_number":63,"box":{"x":117,"y":583,"width":395,"height":12}},{"id":"6ff506d1-84d8-4452-918f-c89fde6839c0","block_type":"box","text":"The following table shows the dollar amount of brokerage commissions paid to brokers for providing","page_number":63,"box":{"x":116,"y":613,"width":746,"height":12}},{"id":"d7998dc1-e948-4c7b-8539-3057d08235df","block_type":"box","text":"Section 28(e) research/brokerage services under Section 28(e) of the Securities Exchange Act of","page_number":63,"box":{"x":116,"y":628,"width":727,"height":12}},{"id":"d6483e70-164b-4627-b892-cc2f5f184a81","block_type":"box","text":"1934, as amended, and the approximate dollar amount of the transactions involved for the period","page_number":63,"box":{"x":118,"y":644,"width":724,"height":11}},{"id":"cba6c484-e2a6-4657-a203-28b0f703a394","block_type":"box","text":"March 12, 2025 (commencement of operations) to October 31, 2025. The provision of Section 28(e)","page_number":63,"box":{"x":117,"y":659,"width":746,"height":12}},{"id":"f4eb3787-c569-4280-bc03-226cf4b19033","block_type":"box","text":"research/brokerage services was not necessarily a factor in the placement of all brokerage business","page_number":63,"box":{"x":117,"y":675,"width":743,"height":12}},{"id":"29b2fa3d-6828-4663-a8c2-03ab7ee1f3b5","block_type":"box","text":"with such brokers.","page_number":63,"box":{"x":116,"y":690,"width":134,"height":10}},{"id":"2d664e12-b0f3-4507-9cf5-78b09daac0d5","block_type":"box","text":"Amount of Commissions Paid","page_number":63,"box":{"x":303,"y":716,"width":190,"height":8}},{"id":"eacf195a-f14d-4b19-8421-675a783a33af","block_type":"box","text":"to Brokers for Providing 28(e)","page_number":63,"box":{"x":304,"y":727,"width":189,"height":9}},{"id":"aa926223-301f-4a1e-946d-c7387acd62ee","block_type":"box","text":"Eligible Research Services","page_number":63,"box":{"x":314,"y":737,"width":170,"height":10}},{"id":"4f4da273-cdfb-48b7-b6d7-ceac4ecb92c2","block_type":"box","text":"Amount of Brokerage","page_number":63,"box":{"x":532,"y":727,"width":137,"height":9}},{"id":"18fccf63-ce09-443c-95a2-ebd3a4abda05","block_type":"box","text":"Transactions Involved","page_number":63,"box":{"x":530,"y":737,"width":141,"height":8}},{"id":"28b07de4-155c-4baf-a5f4-2f180c80604f","block_type":"box","text":"$0 $0","page_number":63,"box":{"x":390,"y":755,"width":219,"height":12}},{"id":"4d0dae0a-282f-4a7d-bdb7-59b1fbb5bd50","block_type":"box","text":"As of October 31, 2025, the Fund held no securities of its regular brokers or dealers (as defined in","page_number":63,"box":{"x":116,"y":786,"width":727,"height":12}},{"id":"a8b4c9f2-158c-458d-8f0b-6e49f918e482","block_type":"box","text":"Rule 10b-1 under the Investment Company Act) or their parents whose shares were purchased during","page_number":63,"box":{"x":117,"y":801,"width":757,"height":12}},{"id":"1cac7fb7-2d90-4e7c-9eae-1ce86c63c93f","block_type":"box","text":"the period March 12, 2025 (commencement of operations) to October 31, 2025.","page_number":63,"box":{"x":116,"y":817,"width":591,"height":12}},{"id":"af6f3258-0360-427d-aa90-49f0db77ad77","block_type":"box","text":"The Fund’s purchase and sale orders for securities ma","page_number":63,"box":{"x":116,"y":846,"width":389,"height":12}},{"id":"9e450ef9-d124-4574-a3f8-6ae35a88b39e","block_type":"box","text":"y be combined with those of other investment","page_number":63,"box":{"x":505,"y":846,"width":328,"height":12}},{"id":"f66c838c-bcc1-4bc6-8f09-2e42087f57a0","block_type":"box","text":"companies, clients or accounts that BlackRock manages","page_number":63,"box":{"x":116,"y":862,"width":403,"height":12}},{"id":"2afb37f0-02b7-4e9b-9f2b-192da5075c86","block_type":"box","text":"or advises. If purchases or sales of portfolio","page_number":63,"box":{"x":519,"y":862,"width":318,"height":12}},{"id":"3a7dc5eb-1dbe-4a3b-b33e-5e4b963faf01","block_type":"box","text":"securities of the Fund and one or more other acc","page_number":63,"box":{"x":116,"y":877,"width":347,"height":10}},{"id":"bce5aecb-e61e-4c85-a81f-72af9b5d3f5a","block_type":"box","text":"ounts managed or advised by BlackRock are considered","page_number":63,"box":{"x":463,"y":877,"width":408,"height":12}},{"id":"85d32426-4533-42f3-9b70-0c5412c79693","block_type":"box","text":"55","page_number":63,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"239c60cf-0c72-48ba-85bb-10923ea56ab3","block_type":"box","text":"NM1026U-6030748-63/260","page_number":63,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"33b89db2-d2f7-4d77-8972-776f7291d172","block_type":"box","text":"at or about the same time, transactions in such","page_number":64,"box":{"x":116,"y":87,"width":338,"height":11}},{"id":"39497106-cc25-44a7-aa82-417f8b9bba47","block_type":"box","text":"securities are allocated among the Fund and the other","page_number":64,"box":{"x":454,"y":87,"width":390,"height":12}},{"id":"17f2749c-0472-4386-91dc-c0b0bb6ac1f0","block_type":"box","text":"accounts in a manner deemed equitable to all by BlackRo","page_number":64,"box":{"x":116,"y":103,"width":410,"height":12}},{"id":"625519d2-3df8-4399-9e73-564235477b2b","block_type":"box","text":"ck. In some cases, this procedure could have a","page_number":64,"box":{"x":527,"y":103,"width":340,"height":11}},{"id":"a7a08057-3087-42f0-867d-4deb1a987474","block_type":"box","text":"detrimental effect on the price or volume of the secu","page_number":64,"box":{"x":116,"y":118,"width":369,"height":12}},{"id":"b5775da0-212d-46b7-8035-e613e7bacb4e","block_type":"box","text":"rity as far as the Fund is concerned. However, in other","page_number":64,"box":{"x":487,"y":118,"width":389,"height":12}},{"id":"1b8028af-c703-4997-a0a7-73ba5e77a31c","block_type":"box","text":"cases, it is possible that the ability to participate","page_number":64,"box":{"x":116,"y":134,"width":341,"height":12}},{"id":"d72cc194-f693-4cca-8f9b-8f3a0ce044c1","block_type":"box","text":"in volume transactions and to negotiate lower transaction","page_number":64,"box":{"x":458,"y":134,"width":409,"height":12}},{"id":"478f891c-e9fd-48b3-b9ae-2def60ac364e","block_type":"box","text":"costs will be beneficial to the Fund. BlackRock may deal, trade","page_number":64,"box":{"x":116,"y":149,"width":449,"height":12}},{"id":"b95b4ac8-495d-48a3-a746-205e545132f2","block_type":"box","text":"and invest for its own account in the types of","page_number":64,"box":{"x":565,"y":149,"width":320,"height":12}},{"id":"1692bd49-81d5-4436-96e9-f932244ec581","block_type":"box","text":"securities in which the Fund may invest. BlackRock ma","page_number":64,"box":{"x":116,"y":165,"width":391,"height":12}},{"id":"6ca1588e-aa0d-46f9-8a0f-b381a19b7f7f","block_type":"box","text":"y, from time to time, effect trades on behalf of and","page_number":64,"box":{"x":508,"y":165,"width":358,"height":12}},{"id":"3bfd6461-ac04-4daa-965c-2dfd276c9664","block_type":"box","text":"for the account of the Fund with brokers","page_number":64,"box":{"x":116,"y":180,"width":275,"height":10}},{"id":"8db88127-ca37-4f23-836a-a5195eeb4163","block_type":"box","text":"rs or dealers that are affiliated wit","page_number":64,"box":{"x":391,"y":180,"width":230,"height":10}},{"id":"3ec01cac-871d-4709-bd02-1881e62503c8","block_type":"box","text":"h BFA, in conformity with the 1940","page_number":64,"box":{"x":622,"y":180,"width":249,"height":12}},{"id":"4035ba2c-f59e-4901-a8fc-9a6cc6dc1754","block_type":"box","text":"Act and SEC rules and regulations. Under these provisi","page_number":64,"box":{"x":116,"y":196,"width":392,"height":12}},{"id":"f7b99fc5-d6c9-480b-a9d1-e214e510bb2e","block_type":"box","text":"ons, any commissions paid to affiliated brokers or","page_number":64,"box":{"x":510,"y":196,"width":356,"height":12}},{"id":"5b92d90e-2bdc-4fdb-a3c4-57c06416276a","block_type":"box","text":"dealers must be reasonable and fair compared to the co","page_number":64,"box":{"x":116,"y":211,"width":399,"height":12}},{"id":"753e5c7e-9ee9-40b4-895b-e532d60a973c","block_type":"box","text":"mmissions charged by other brokers or dealers in","page_number":64,"box":{"x":516,"y":211,"width":356,"height":12}},{"id":"fab4557b-b3ce-442e-b121-752be2fc27ab","block_type":"box","text":"comparable transactions. The Fund will not deal with affiliate","page_number":64,"box":{"x":116,"y":227,"width":429,"height":11}},{"id":"26cbd6b9-3e15-4338-93a1-e907ab898d41","block_type":"box","text":"s in principal transactions unless permitted by","page_number":64,"box":{"x":545,"y":227,"width":328,"height":12}},{"id":"981e9f86-ce4d-4572-ae1a-e0f5a1c9fcbc","block_type":"box","text":"applicable SEC rules or regulations, or by SEC exemptive order.","page_number":64,"box":{"x":116,"y":242,"width":462,"height":12}},{"id":"c09f35ca-ab5f-4eb6-af72-cff1e74e0601","block_type":"box","text":"The portfolio turnover rate is calculated by dividing the lesser of the Fund’s annual sales or purchases","page_number":64,"box":{"x":116,"y":272,"width":760,"height":12}},{"id":"4936d444-f0a3-4930-90c0-d5c02afe967b","block_type":"box","text":"of portfolio securities (exclusive of purchases or sales of U.S. Government securities and all other","page_number":64,"box":{"x":116,"y":287,"width":730,"height":12}},{"id":"a0e585e1-1d1f-4cd3-8d29-f7eabff27c6e","block_type":"box","text":"securities whose maturities at the time of acquisition were one year or less) by the monthly average","page_number":64,"box":{"x":116,"y":303,"width":744,"height":12}},{"id":"b9405925-769f-459c-9fbc-93398b498d5d","block_type":"box","text":"value of the securities in the portfolio during the year. A high rate of portfolio turnover results in certain","page_number":64,"box":{"x":116,"y":318,"width":763,"height":12}},{"id":"0afab3b6-e373-464e-82a2-fcac5d0cbb57","block_type":"box","text":"tax consequences, such as increased capital gain dividends and/or ordinary income dividends, and in","page_number":64,"box":{"x":116,"y":334,"width":758,"height":12}},{"id":"6e93e590-2053-4d6c-9b29-7c678860ee05","block_type":"box","text":"correspondingly greater transaction costs in the form of dealer spreads and brokerage commissions,","page_number":64,"box":{"x":116,"y":349,"width":751,"height":12}},{"id":"69eb1bed-fc84-46f1-bee5-44995d9ce02e","block_type":"box","text":"which are borne directly by the Fund.","page_number":64,"box":{"x":116,"y":365,"width":280,"height":12}},{"id":"1a62a4a1-82a2-488b-9676-ed72388fffeb","block_type":"box","text":"Additional Information Concerning the","page_number":64,"box":{"x":116,"y":413,"width":687,"height":29}},{"id":"d4f7e011-c7cd-417d-a57b-9f582cc00143","block_type":"box","text":"Trust","page_number":64,"box":{"x":117,"y":447,"width":102,"height":23}},{"id":"380e08e0-d653-41a8-953e-5a697886180c","block_type":"box","text":"Shares.","page_number":64,"box":{"x":116,"y":497,"width":59,"height":9}},{"id":"90e96ded-bff9-46f9-8894-72731686fddc","block_type":"box","text":"The Trust is an open-end management investment company registered with the SEC under","page_number":64,"box":{"x":176,"y":497,"width":689,"height":12}},{"id":"e9b7c107-223f-4d66-a0f6-7b62ae9b088d","block_type":"box","text":"the 1940 Act. The offering of the Trust’s shares is registered under the 1933 Act.","page_number":64,"box":{"x":116,"y":512,"width":603,"height":12}},{"id":"4a96224d-fd76-46c4-9ca9-182be14aaf35","block_type":"box","text":"The Trust was organized as a Delaware statutory trust on October 31, 2018 and is authorized to have","page_number":64,"box":{"x":116,"y":542,"width":760,"height":12}},{"id":"2641cdf3-5c78-445d-9186-2fa597002927","block_type":"box","text":"multiple series or portfolios, each called a fund. The Trust issues shares of beneficial interests in each","page_number":64,"box":{"x":117,"y":557,"width":760,"height":12}},{"id":"2eeee205-7b3b-4630-b7de-627e7df6ac01","block_type":"box","text":"fund with no par value. The Board may establish and designate additional funds. This SAI relates","page_number":64,"box":{"x":116,"y":573,"width":726,"height":12}},{"id":"7936da5f-b61e-4d2f-b79f-c49093f957d7","block_type":"box","text":"solely to the Fund.","page_number":64,"box":{"x":116,"y":589,"width":142,"height":11}},{"id":"07b8e5ab-92e4-41fc-a10f-9e3b1761f709","block_type":"box","text":"Each whole share issued by a fund has a p","page_number":64,"box":{"x":117,"y":618,"width":310,"height":12}},{"id":"beb5e764-a4b2-474d-8f74-fc8490c0a573","block_type":"box","text":"pro rata","page_number":64,"box":{"x":427,"y":618,"width":58,"height":12}},{"id":"0e55703b-3fbc-45e3-bd88-adec1953898b","block_type":"box","text":"interest in the assets of that fund. Shares have no","page_number":64,"box":{"x":485,"y":618,"width":380,"height":9}},{"id":"df22fc22-c473-4ba1-a622-4fbca5083031","block_type":"box","text":"preemptive, exchange, subscription or conversion rights and are freely transferable. Each share is","page_number":64,"box":{"x":117,"y":633,"width":732,"height":13}},{"id":"5a664257-23d4-41c2-a6f2-389e061d62ce","block_type":"box","text":"entitled to participate equally in dividends and distributions declared by the Board with respect to the","page_number":64,"box":{"x":116,"y":649,"width":749,"height":12}},{"id":"b4ccb8c2-dead-4119-8c33-5b2f737e18b7","block_type":"box","text":"relevant fund, and in the net distributable assets of such fund on liquidation.","page_number":64,"box":{"x":117,"y":664,"width":560,"height":12}},{"id":"15550650-ac6e-47fa-86a4-8c575651988e","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":64,"box":{"x":117,"y":694,"width":757,"height":12}},{"id":"a4aa68fc-ef41-4730-8df5-f69c747abc69","block_type":"box","text":"matter submitted to shareholders for a vote, each fund shall hold a separate vote, provided that","page_number":64,"box":{"x":117,"y":710,"width":706,"height":12}},{"id":"83626277-5c4b-4f76-ab3f-a1d0dac90b75","block_type":"box","text":"shareholders of all affected funds will vote together when: (i) required by the 1940 Act, or (ii) the","page_number":64,"box":{"x":116,"y":725,"width":711,"height":12}},{"id":"4ba040d1-c99f-4f34-9231-b4f7b6572f0d","block_type":"box","text":"Trustees determine that the matter affects the interests of more than one fund.","page_number":64,"box":{"x":116,"y":741,"width":582,"height":9}},{"id":"96cb3dd9-36b6-4a7f-8e00-a78b70f0fff1","block_type":"box","text":"Under Delaware law, the Trust is not required to hold an annual meeting of shareholders unless","page_number":64,"box":{"x":117,"y":770,"width":709,"height":12}},{"id":"25f85aac-7ca9-4f84-a6b5-767155e73f57","block_type":"box","text":"required to do so under the 1940 Act. The policy of","page_number":64,"box":{"x":117,"y":786,"width":377,"height":12}},{"id":"ac9fcbf8-41f9-4176-8c0f-c4539d4b7833","block_type":"box","text":"the Trust is not to hold an annual meeting of","page_number":64,"box":{"x":499,"y":786,"width":329,"height":12}},{"id":"e19960f8-74e9-417a-8c49-2e6e75e35d9d","block_type":"box","text":"shareholders unless required to do so under the 1940 Act. All shares (regardless of the fund) have","page_number":64,"box":{"x":116,"y":801,"width":731,"height":12}},{"id":"5e039ee3-f577-4f4c-9428-1f33f82c38fc","block_type":"box","text":"noncumulative voting rights in the election of members of the Board. Under Delaware law, Trustees of","page_number":64,"box":{"x":117,"y":817,"width":756,"height":12}},{"id":"1fbcb8f3-00ca-4e0c-9d9f-e1c6d51b0098","block_type":"box","text":"the Trust may be removed by vote of the shareholders.","page_number":64,"box":{"x":116,"y":832,"width":414,"height":12}},{"id":"ae9689db-3d23-44ef-98fe-cca7d60d0de0","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":64,"box":{"x":117,"y":862,"width":736,"height":12}},{"id":"05c68082-1c91-4cc5-982f-ceed180bca19","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":64,"box":{"x":116,"y":877,"width":749,"height":12}},{"id":"bc7a20a1-e406-42d5-bfc4-528579b0210f","block_type":"box","text":"56","page_number":64,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"142e1878-7497-4ea0-8a10-a5340cf86f1c","block_type":"box","text":"NM1026U-6030748-64/260","page_number":64,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9c3f15d9-7a9c-4a43-b925-a1ba86bc41b2","block_type":"box","text":"fund, as defined in Rule 0-1 under the 1940 Act. A","page_number":65,"box":{"x":116,"y":87,"width":378,"height":11}},{"id":"3e0c0409-172a-4ca1-ab93-1cc800ed9dc3","block_type":"box","text":"fund cannot predict the length of time for which one","page_number":65,"box":{"x":494,"y":87,"width":386,"height":12}},{"id":"0096fb59-5095-4730-990c-cb10f691c7e6","block_type":"box","text":"or more shareholders may remain a control person of the fund.","page_number":65,"box":{"x":116,"y":102,"width":471,"height":13}},{"id":"3176443d-84be-425d-be77-44596bce918b","block_type":"box","text":"Shareholders may make inquiries by writing to BlackRock ETF Trust, c/o BlackRock Investments, LLC,","page_number":65,"box":{"x":116,"y":136,"width":769,"height":12}},{"id":"4ae9f7c9-39da-4a64-8c6f-fed806d0d4f8","block_type":"box","text":"1 University Square Drive, Princeton, NJ 08540.","page_number":65,"box":{"x":118,"y":152,"width":360,"height":12}},{"id":"9c186469-15cc-4e15-96e2-d9f568ae2980","block_type":"box","text":"Absent an applicable exemption or other relief from the SEC or its staff, beneficial owners of more than","page_number":65,"box":{"x":116,"y":185,"width":769,"height":12}},{"id":"c69b57ea-6d7b-46ca-b351-217c6f6e9572","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":65,"box":{"x":116,"y":201,"width":771,"height":12}},{"id":"e7e6c57d-a330-4a9b-a18c-05ba9f9d3237","block_type":"box","text":"the SEC’s rules promulgated thereunder. In addition, absent an applicable exemption or other relief","page_number":65,"box":{"x":116,"y":216,"width":742,"height":12}},{"id":"73404a1e-95b2-4e65-8a18-6ffd1ed3c3db","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":65,"box":{"x":116,"y":232,"width":760,"height":11}},{"id":"a0eeefff-66c3-4dc7-88e4-55156ba42b7b","block_type":"box","text":"a fund (“Insiders”) may be subject to the insider reporting, short-swing profit and short sale provisions","page_number":65,"box":{"x":116,"y":247,"width":756,"height":12}},{"id":"4a6072d2-ea60-43f1-b78b-188d5ddf9997","block_type":"box","text":"of Section 16 of the 1934 Act and the SEC’s rules promulgated thereunder. Beneficial owners and","page_number":65,"box":{"x":116,"y":263,"width":732,"height":12}},{"id":"1280fe32-46b2-4238-9643-3e26d57eb352","block_type":"box","text":"Insiders should consult with their own legal counsel concerning their obligations under Sections 13 and","page_number":65,"box":{"x":117,"y":278,"width":767,"height":12}},{"id":"f3a63c53-b6d3-4973-b322-47e1f6fefe6d","block_type":"box","text":"16 of the 1934 Act and existing guidance provided by the SEC staff.","page_number":65,"box":{"x":118,"y":294,"width":507,"height":12}},{"id":"25e46ee2-5f02-4eac-8927-cb22ef61b46c","block_type":"box","text":"In accordance with the Trust’s current Agreement and Declaration of Trust (the “Declaration of Trust”),","page_number":65,"box":{"x":117,"y":327,"width":762,"height":12}},{"id":"4fbf4353-4340-4571-be29-34fed75c6ddd","block_type":"box","text":"the Board may, without shareholder approval (unless such shareholder approval is required by","page_number":65,"box":{"x":116,"y":343,"width":707,"height":12}},{"id":"f2da9ebb-02c6-485c-ba0e-a21728d11f0a","block_type":"box","text":"applicable law, including the 1940 Act), authorize certain funds to merge, reorganize, consolidate, sell","page_number":65,"box":{"x":116,"y":358,"width":759,"height":12}},{"id":"1a898879-03d3-4997-af14-659dd62aa1c4","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":65,"box":{"x":116,"y":374,"width":732,"height":12}},{"id":"b19b80c1-fb9b-4b55-94f5-afd0f608e2ff","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":65,"box":{"x":116,"y":389,"width":708,"height":12}},{"id":"d3707e34-efee-41d2-bd6d-465bb04bd2fa","block_type":"box","text":"automatically redeemable upon the occurrence of any specific event, the Declaration of Trust provides","page_number":65,"box":{"x":116,"y":405,"width":764,"height":12}},{"id":"403d582a-35a9-4174-b27a-480119516a82","block_type":"box","text":"that the Board will have the unrestricted power to alter the number of shares in a Creation Unit.","page_number":65,"box":{"x":116,"y":420,"width":710,"height":12}},{"id":"3e357a6e-bcc9-4181-90e8-55789f2c4321","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":65,"box":{"x":116,"y":436,"width":744,"height":11}},{"id":"24f54873-e5d4-4977-8357-0719e3339b0e","block_type":"box","text":"determine to permit the shares to be redeemable in aggregations smaller than Creation Units or to be","page_number":65,"box":{"x":116,"y":451,"width":758,"height":12}},{"id":"2a00f531-70c6-4f74-8a91-30095ecfa86d","block_type":"box","text":"individually redeemable. In such circumstance, the Trust or a fund may make redemptions, for cash or","page_number":65,"box":{"x":117,"y":467,"width":762,"height":12}},{"id":"e3b28fa9-4cff-48bd-9cc4-a6fba3c847ca","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":65,"box":{"x":116,"y":482,"width":748,"height":11}},{"id":"52a27fff-fd70-4f6c-bfd6-53376e50676a","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":65,"box":{"x":116,"y":498,"width":762,"height":12}},{"id":"5549e532-df47-4be0-9823-f20bb11306e6","block_type":"box","text":"shareholders owning in excess of a certain stated minimum amount.","page_number":65,"box":{"x":116,"y":513,"width":511,"height":12}},{"id":"99dce63c-49d0-4029-be4f-830195c0ba9b","block_type":"box","text":"DTC as Securities Depository for Shares of the Fund.","page_number":65,"box":{"x":117,"y":547,"width":428,"height":12}},{"id":"8ab78b79-9c51-4eb1-91a4-81c8e07ec8e8","block_type":"box","text":"Shares of the Fund are represented by","page_number":65,"box":{"x":546,"y":547,"width":293,"height":12}},{"id":"01372dad-4899-4914-8ed9-da6b3d13b315","block_type":"box","text":"securities registered in the name of DTC or its nominee and deposited with, or on behalf of, DTC.","page_number":65,"box":{"x":116,"y":562,"width":727,"height":12}},{"id":"44598c46-156d-4117-accd-a9f72c1e76aa","block_type":"box","text":"DTC was created in 1973 to enable electronic movement","page_number":65,"box":{"x":117,"y":596,"width":405,"height":9}},{"id":"db0fc62e-6d09-4929-b831-c8e410a2263d","block_type":"box","text":"t of securities between its participants (“DTC","page_number":65,"box":{"x":522,"y":596,"width":315,"height":12}},{"id":"f94fa0d2-ca40-418c-9a06-b1adfcaddda6","block_type":"box","text":"Participants”), and NSCC was established in 1976 to provide a single settlement system for securities","page_number":65,"box":{"x":117,"y":611,"width":724,"height":12}},{"id":"10218a94-ae2d-4c58-ac38-e8520b06a469","block_type":"box","text":"clearing and to serve as central counterparty for se","page_number":65,"box":{"x":116,"y":627,"width":361,"height":12}},{"id":"195937c3-9770-452b-9b94-8638728bb9c9","block_type":"box","text":"curities trades among DTC Participants. In 1999, DTC","page_number":65,"box":{"x":478,"y":627,"width":389,"height":12}},{"id":"c84e3a00-eb4e-4f3c-86ad-8f06044346d0","block_type":"box","text":"and NSCC were consolidated within the Depository Tr","page_number":65,"box":{"x":116,"y":642,"width":385,"height":12}},{"id":"e8ae280a-4b96-48a4-9ac2-c41b7bfc7840","block_type":"box","text":"ust & Clearing Corporation (“DTCC”) and became","page_number":65,"box":{"x":502,"y":642,"width":357,"height":12}},{"id":"d0c4859d-373c-4b69-b54a-a25f8ba258cf","block_type":"box","text":"wholly-owned subsidiaries of DTCC. The common sto","page_number":65,"box":{"x":116,"y":658,"width":383,"height":12}},{"id":"334db70b-131d-4d0e-a0fe-ed193924239b","block_type":"box","text":"ck of DTCC is owned by the DTC Participants, but","page_number":65,"box":{"x":500,"y":658,"width":361,"height":12}},{"id":"2efa9edb-bdb3-4bb8-a0b0-c9b7ae1d16b6","block_type":"box","text":"NYSE and FINRA, through subsidiaries, hold preferred shares","page_number":65,"box":{"x":117,"y":673,"width":442,"height":12}},{"id":"a01949ee-498b-4533-9397-e9d9223c1d0a","block_type":"box","text":"in DTCC that provide them with the right to","page_number":65,"box":{"x":564,"y":673,"width":303,"height":12}},{"id":"90489f48-6349-42ec-ab17-ac9adae015d0","block_type":"box","text":"elect one member each to the DTCC board of directors.","page_number":65,"box":{"x":116,"y":689,"width":395,"height":9}},{"id":"2e2c7a81-7741-42be-83c7-305079c5161d","block_type":"box","text":"Access to the DTC system is available to entities,","page_number":65,"box":{"x":517,"y":689,"width":350,"height":12}},{"id":"08e0fe7e-b7ea-4062-bf19-5c6e1e31a96b","block_type":"box","text":"such as banks, brokers, dealers and trust companies, that","page_number":65,"box":{"x":116,"y":704,"width":412,"height":12}},{"id":"59618d52-d900-4483-aaf1-ba8b90c32cc1","block_type":"box","text":"clear through or maintain a custodial relationship","page_number":65,"box":{"x":533,"y":704,"width":344,"height":12}},{"id":"35bd56f6-11eb-4683-a402-3256ad576e58","block_type":"box","text":"with a DTC Participant, either directly","page_number":65,"box":{"x":116,"y":720,"width":264,"height":12}},{"id":"fff9c474-4038-4c1c-8ad7-6223e23b61ec","block_type":"box","text":"or indirectly (“Indirect Participants”).","page_number":65,"box":{"x":384,"y":720,"width":251,"height":12}},{"id":"c98afc49-aaed-46c5-8d39-a930a99fd516","block_type":"box","text":"Beneficial ownership of shares is limited to DTC","page_number":65,"box":{"x":117,"y":753,"width":339,"height":12}},{"id":"760af00f-9288-4fbb-9c65-9db2a1c9bad8","block_type":"box","text":"Participants, Indirect Participants and persons holding","page_number":65,"box":{"x":461,"y":753,"width":381,"height":12}},{"id":"9c65d167-1a13-43e8-8146-339d667decb2","block_type":"box","text":"interests through DTC Participants and Indirect Participant","page_number":65,"box":{"x":117,"y":769,"width":413,"height":12}},{"id":"8d13532a-f31a-481c-b4ed-91b99708762a","block_type":"box","text":"s. Ownership of beneficial interests in shares","page_number":65,"box":{"x":530,"y":769,"width":318,"height":12}},{"id":"09fc1043-53dd-4a99-8a8c-bf016f1f1384","block_type":"box","text":"(owners of such beneficial interests are referred to","page_number":65,"box":{"x":117,"y":784,"width":355,"height":12}},{"id":"22f92f0b-a402-40dc-92a3-1b21feafb497","block_type":"box","text":"herein as “Beneficial Owners”) is shown on, and the","page_number":65,"box":{"x":478,"y":784,"width":367,"height":12}},{"id":"7817e298-edfc-46b3-86af-e1333aec3226","block_type":"box","text":"transfer of ownership is effected only through, re","page_number":65,"box":{"x":116,"y":800,"width":343,"height":12}},{"id":"edd665bd-a9b6-490e-831f-0f3328b75d8b","block_type":"box","text":"cords maintained by DTC (with respect to DTC","page_number":65,"box":{"x":460,"y":800,"width":332,"height":12}},{"id":"ccd6f752-1770-40fa-a3ed-75c073e8ddc6","block_type":"box","text":"Participants) and on the records of DTC Participants (","page_number":65,"box":{"x":117,"y":815,"width":380,"height":12}},{"id":"a2a0465b-8db4-45e8-a57a-881baa56b0ea","block_type":"box","text":"with respect to Indirect Participants and Beneficial","page_number":65,"box":{"x":497,"y":815,"width":353,"height":12}},{"id":"76c2ee14-e68e-441e-8cc9-c7d153ee5548","block_type":"box","text":"Owners that are not DTC Participants). Beneficial Ow","page_number":65,"box":{"x":116,"y":831,"width":380,"height":12}},{"id":"4359c5f8-1911-467e-9603-fcee2ac084b5","block_type":"box","text":"ners will receive from or through the DTC Participant a","page_number":65,"box":{"x":497,"y":831,"width":390,"height":12}},{"id":"15825fe3-34fa-4076-bab1-1a45803c47bb","block_type":"box","text":"written confirmation relating to their purchase of shar","page_number":65,"box":{"x":116,"y":846,"width":374,"height":12}},{"id":"d5a31d36-261b-42d1-ae41-b0f3b56e2423","block_type":"box","text":"es. The laws of some jurisdictions may require that","page_number":65,"box":{"x":490,"y":846,"width":365,"height":12}},{"id":"6840da1f-2f0d-4e5b-a5f3-c664e3532a7f","block_type":"box","text":"certain purchasers of securities take physical delivery","page_number":65,"box":{"x":116,"y":862,"width":384,"height":12}},{"id":"1c2cd257-21dc-4fbd-8fcf-1ab9938ff299","block_type":"box","text":"of such securities in definitive form. Such laws may","page_number":65,"box":{"x":500,"y":862,"width":366,"height":12}},{"id":"9e24a3bc-0c65-4698-a094-3a5f8d62755f","block_type":"box","text":"impair the ability of certain investors to acqui","page_number":65,"box":{"x":117,"y":877,"width":313,"height":12}},{"id":"73c902c5-8b5d-4a6e-8536-0a7d6bce8d1c","block_type":"box","text":"re beneficial interests in shares of the Fund.","page_number":65,"box":{"x":432,"y":877,"width":315,"height":10}},{"id":"9ffb23d6-cbf7-4bea-9688-d5dbd305b66f","block_type":"box","text":"57","page_number":65,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"81bf9298-5124-4b96-bc68-b0f771ee4159","block_type":"box","text":"NM1026U-6030748-65/260","page_number":65,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"65e27b04-9f72-439d-b71f-b3c42af535d8","block_type":"box","text":"Conveyance of all notices, statements and other communications to Beneficial Owners is effected as","page_number":66,"box":{"x":117,"y":87,"width":752,"height":12}},{"id":"ad77d58d-5e06-42ba-9a8e-ea1d8b3de7fa","block_type":"box","text":"follows. Pursuant to the Depositary Agreement between the Trust and DTC, DTC is required to make","page_number":66,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"825ea039-6f10-48e9-bf94-cace8f72fe10","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":66,"box":{"x":116,"y":118,"width":771,"height":12}},{"id":"f23d7ff8-35db-4183-aee2-986a5d1bb369","block_type":"box","text":"Fund held by each DTC Participant. The Trust shall inquire of each such DTC Participant as to the","page_number":66,"box":{"x":117,"y":134,"width":734,"height":12}},{"id":"cfdd1e8a-74cb-4cc8-842d-ec44731952fd","block_type":"box","text":"number of Beneficial Owners holding shares, directly or indirectly, through such DTC Participant. The","page_number":66,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"6855598f-3c82-467f-adce-2d0d6d56c1f9","block_type":"box","text":"Trust shall provide each such DTC Participant with copies of such notice, statement or other","page_number":66,"box":{"x":116,"y":165,"width":689,"height":11}},{"id":"f599a4cb-1a4d-488c-8dda-26e637878641","block_type":"box","text":"communication, in such form, number and at such place as such DTC Participant may reasonably","page_number":66,"box":{"x":116,"y":180,"width":731,"height":12}},{"id":"832ea635-e08c-499a-90c5-e38c3d041ab5","block_type":"box","text":"request, in order that such notice, statement or communication may be transmitted by such DTC","page_number":66,"box":{"x":117,"y":196,"width":720,"height":12}},{"id":"0f73be20-07f7-4e71-b1d3-ca0c34278645","block_type":"box","text":"Participant, directly or indirectly, to such Beneficial Owners. In addition, the Trust shall pay to each","page_number":66,"box":{"x":117,"y":211,"width":734,"height":12}},{"id":"6eac8b6e-3311-4b79-80d7-612a35d43263","block_type":"box","text":"such DTC Participant a fair and reasonable amount as reimbursement for the expenses attendant to","page_number":66,"box":{"x":116,"y":227,"width":749,"height":11}},{"id":"b6949878-4f15-411d-b715-198634a3ff6a","block_type":"box","text":"such transmittal, all subject to applicable statutory and regulatory requirements.","page_number":66,"box":{"x":116,"y":242,"width":595,"height":12}},{"id":"684c2a63-5a8a-40fa-b642-64141b435037","block_type":"box","text":"Share distributions shall be made to DTC or its nominee, Cede & Co., as the registered holder of all","page_number":66,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"8be0df02-367d-413f-9554-33b4b1221042","block_type":"box","text":"shares of the Trust. DTC or its nominee, upon receipt of any such distributions, shall credit immediately","page_number":66,"box":{"x":116,"y":289,"width":771,"height":12}},{"id":"2d7b1a5f-b087-454b-ae30-9470bf83995f","block_type":"box","text":"DTC Participants’ accounts with payments in amounts proportionate to their respective beneficial","page_number":66,"box":{"x":117,"y":304,"width":723,"height":12}},{"id":"1a077789-7555-4d05-a12a-48acf1f21c6e","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":66,"box":{"x":117,"y":320,"width":732,"height":12}},{"id":"ec861593-8090-4eea-bae4-100552593130","block_type":"box","text":"Participants to Indirect Participants and Beneficial Owners of shares held through such DTC","page_number":66,"box":{"x":117,"y":335,"width":687,"height":12}},{"id":"8d4d39f0-6122-4ae3-ab35-b3f73e074ccc","block_type":"box","text":"Participants will be governed by standing instructions and customary practices, as is now the case with","page_number":66,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"d0fb852b-ad65-47fd-9016-fb3f721dc34d","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":66,"box":{"x":116,"y":366,"width":772,"height":12}},{"id":"196b49ce-d457-4ee9-955d-2f25cc88e2c9","block_type":"box","text":"the responsibility of such DTC Participants.","page_number":66,"box":{"x":116,"y":382,"width":325,"height":12}},{"id":"8ed8a22a-2b2b-4f5e-beee-2107d8dc5dad","block_type":"box","text":"The Trust has no responsibility or liability for any aspect of the records relating to or notices to","page_number":66,"box":{"x":116,"y":413,"width":702,"height":12}},{"id":"5284dcf2-fa86-4a70-ad4d-c700987c1d03","block_type":"box","text":"Beneficial Owners, or payments made on account of beneficial ownership interests in such shares, or","page_number":66,"box":{"x":117,"y":428,"width":756,"height":12}},{"id":"a5540ae6-b192-40dd-8495-32b3f234a140","block_type":"box","text":"for maintaining, supervising or reviewing any records relating to such beneficial ownership interests, or","page_number":66,"box":{"x":116,"y":444,"width":766,"height":12}},{"id":"83631df6-deb9-496c-a136-320f9694c504","block_type":"box","text":"for any other aspect of the relationship between DTC and the DTC Participants or the relationship","page_number":66,"box":{"x":116,"y":459,"width":730,"height":12}},{"id":"c1c1b1ca-1e4e-4660-840b-2d1bdfee2ee6","block_type":"box","text":"between such DTC Participants and the Indirect Participants and Beneficial Owners owning through","page_number":66,"box":{"x":117,"y":475,"width":745,"height":12}},{"id":"5ad97340-af1b-4506-bf4c-feac128121fc","block_type":"box","text":"such DTC Participants. DTC may decide to discontinue providing its service with respect to shares of","page_number":66,"box":{"x":116,"y":490,"width":755,"height":12}},{"id":"e9b043ee-40eb-4948-8a86-6736162678ed","block_type":"box","text":"the Trust at any time by giving reasonable notice to the Trust and discharging its responsibilities with","page_number":66,"box":{"x":116,"y":506,"width":751,"height":12}},{"id":"7dd75b20-1b1c-4a84-af66-a60d948065eb","block_type":"box","text":"respect thereto under applicable law. Under such circumstances, the Trust shall take action to find a","page_number":66,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"73fa25b0-c9fa-41f8-a32e-5754dca40cc2","block_type":"box","text":"replacement for DTC to perform its functions at a comparable cost.","page_number":66,"box":{"x":117,"y":537,"width":500,"height":12}},{"id":"b0f56d32-a5c4-4c28-8bd1-e6456545e2d1","block_type":"box","text":"Distribution of Shares.","page_number":66,"box":{"x":117,"y":568,"width":184,"height":9}},{"id":"8241e1b2-bafe-4ca7-9e23-f4b9b751ab15","block_type":"box","text":"In connection with the Fund’s launch, the Fund was seeded through the sale","page_number":66,"box":{"x":303,"y":568,"width":571,"height":12}},{"id":"ddc90ad5-aa79-4dbb-acdd-cc259274b099","block_type":"box","text":"of one or more Creation Units by the Fund to one or more initial investors. Initial investors participating","page_number":66,"box":{"x":116,"y":583,"width":764,"height":12}},{"id":"3352203b-621b-4586-9c4f-1567a9a921d4","block_type":"box","text":"in the seeding may be Authorized Participants, a lead market maker or other third party investor or an","page_number":66,"box":{"x":117,"y":599,"width":758,"height":12}},{"id":"ef89cde3-5b7f-4d84-bd9d-9baabbfeeb8d","block_type":"box","text":"affiliate of the Fund or the Fund’s adviser. Each such initial investor may sell some or all of the shares","page_number":66,"box":{"x":116,"y":614,"width":759,"height":12}},{"id":"8d6515f5-b237-4929-965d-57ca889c47eb","block_type":"box","text":"underlying the Creation Unit(s) held by them pursuant to the registration statement for the Fund (each,","page_number":66,"box":{"x":117,"y":630,"width":763,"height":12}},{"id":"2545e915-111e-4dde-870c-e4b9a37a958e","block_type":"box","text":"a “Selling Shareholder”), which shares have been registered to permit the resale from time to time after","page_number":66,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"75d8d562-ea47-4df7-92cc-1d3850ea7a00","block_type":"box","text":"purchase. The Fund will not receive any of the proceeds from the resale by the Selling Shareholders of","page_number":66,"box":{"x":117,"y":661,"width":764,"height":12}},{"id":"05e8ea5e-12f6-41df-b608-fab15859afa6","block_type":"box","text":"these shares.","page_number":66,"box":{"x":116,"y":676,"width":99,"height":10}},{"id":"8b102b12-c4f6-4daf-b957-eb7084010c93","block_type":"box","text":"Selling Shareholders may sell shares owned by them directly or through broker-dealers, in accordance","page_number":66,"box":{"x":116,"y":707,"width":762,"height":12}},{"id":"239c1f35-e9c5-41a2-8e80-c913db4eaf06","block_type":"box","text":"with applicable law, on any national securities exchange on which the shares may be listed or quoted","page_number":66,"box":{"x":116,"y":723,"width":750,"height":12}},{"id":"8cfa0c13-e24e-4b31-90a2-b5b093458b00","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":66,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"7a45df2f-a7f6-4086-8f0c-acc2b016d861","block_type":"box","text":"exchanges or systems at fixed prices, at prevailing market prices at the time of the sale, at varying","page_number":66,"box":{"x":116,"y":754,"width":729,"height":12}},{"id":"1706058b-0695-41c7-8729-d3bb01157834","block_type":"box","text":"prices determined at the time of sale, or at negotiated prices. These sales may be effected through","page_number":66,"box":{"x":117,"y":769,"width":731,"height":12}},{"id":"9f1d8aa1-35d0-4a5d-b55f-f2a512b63f06","block_type":"box","text":"brokerage transactions, privately negotiated trades, block sales, entry into options or other derivatives","page_number":66,"box":{"x":117,"y":785,"width":754,"height":12}},{"id":"53a2de4c-7a87-4165-9eaf-57b8df324bab","block_type":"box","text":"transactions or through any other means authorized by applicable law. Selling Shareholders may","page_number":66,"box":{"x":116,"y":800,"width":719,"height":12}},{"id":"8dfb5881-910c-4ad1-b558-a176a9aba3d4","block_type":"box","text":"redeem the shares held in Creation Unit size by them through an Authorized Participant.","page_number":66,"box":{"x":117,"y":816,"width":653,"height":12}},{"id":"6e8e1060-7bbf-486f-bf29-9ab1b0365667","block_type":"box","text":"Any Selling Shareholder and any broker-dealer or agents participating in the distribution of shares may","page_number":66,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"949d7a5a-e26f-4725-bd55-9a7662baf1d3","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":66,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"c467298e-b9f5-432b-9fbb-021c33fe2bee","block_type":"box","text":"with such sales.","page_number":66,"box":{"x":116,"y":878,"width":123,"height":9}},{"id":"cc6b39fc-6dd2-4b4d-980a-2d43554c6fbf","block_type":"box","text":"58","page_number":66,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"904bc6f4-339b-4873-bd2c-722d4cfade3c","block_type":"box","text":"NM1026U-6030748-66/260","page_number":66,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"65643784-cf67-435e-919c-090851c05adc","block_type":"box","text":"Any Selling Shareholder and any other person participating in such distribution will be subject to","page_number":67,"box":{"x":116,"y":87,"width":716,"height":12}},{"id":"06255af4-b787-4897-a499-d44e888df1df","block_type":"box","text":"applicable provisions of the 1934 Act and the rules and regulations thereunder.","page_number":67,"box":{"x":116,"y":102,"width":591,"height":13}},{"id":"7727846a-0729-4888-a25f-df3cf0b19651","block_type":"box","text":"Creation and Redemption of Creation","page_number":67,"box":{"x":118,"y":155,"width":678,"height":28}},{"id":"d5743e55-1785-4c37-a78d-613d77ff3d84","block_type":"box","text":"Units","page_number":67,"box":{"x":119,"y":188,"width":100,"height":23}},{"id":"ae3596c4-b7a0-4f83-89c4-08c4981ad399","block_type":"box","text":"General.","page_number":67,"box":{"x":116,"y":240,"width":66,"height":10}},{"id":"c529b023-5f74-490d-bf78-394a138340e5","block_type":"box","text":"The Trust issues and sells shares of the Fund only in Creation Units on a continuous basis","page_number":67,"box":{"x":183,"y":240,"width":682,"height":13}},{"id":"d0f3d9eb-d59a-44ba-8a32-2545fc52ef35","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":67,"box":{"x":116,"y":256,"width":728,"height":12}},{"id":"f4af768a-4573-4ba6-bcca-b6f34afdd5d4","block_type":"box","text":"determined after receipt, on any Business Day (as defined below), of an order received by the","page_number":67,"box":{"x":116,"y":271,"width":702,"height":13}},{"id":"813a9e6e-9539-44d4-a42c-d233e4e7b92e","block_type":"box","text":"Distributor or its agent in proper form. On days when the Listing Exchange closes earlier than normal,","page_number":67,"box":{"x":117,"y":287,"width":758,"height":12}},{"id":"9611acb5-d519-445d-b575-469156581c64","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":67,"box":{"x":116,"y":302,"width":756,"height":13}},{"id":"ef916549-bd0b-46e9-b337-fab321f5e1f5","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":67,"box":{"x":116,"y":318,"width":748,"height":12}},{"id":"ed745a32-e77d-430e-a5f1-2d817201d940","block_type":"box","text":"Creation Unit as of January 31, 2026:","page_number":67,"box":{"x":117,"y":334,"width":282,"height":12}},{"id":"42d46f35-e5dd-4cc3-bd49-54b232182ba3","block_type":"box","text":"Shares Per","page_number":67,"box":{"x":374,"y":372,"width":70,"height":7}},{"id":"2f19e91b-3e1b-4c49-a155-9a9063635a77","block_type":"box","text":"Creation","page_number":67,"box":{"x":382,"y":382,"width":53,"height":8}},{"id":"caf81d88-6f87-4e1b-8a5c-51f33e64c43e","block_type":"box","text":"Unit","page_number":67,"box":{"x":396,"y":393,"width":25,"height":7}},{"id":"daf5a0b4-82af-49d1-865e-3d1bba5636f2","block_type":"box","text":"Approximate","page_number":67,"box":{"x":549,"y":362,"width":82,"height":9}},{"id":"b27d3bd6-6bd9-4d21-b22d-ae59373eb513","block_type":"box","text":"Value Per","page_number":67,"box":{"x":560,"y":372,"width":61,"height":7}},{"id":"bbfde4b8-cc85-4151-8293-e857bc316249","block_type":"box","text":"Creation","page_number":67,"box":{"x":564,"y":382,"width":53,"height":8}},{"id":"c63adff4-33a8-4dd3-928b-aefd25d9df17","block_type":"box","text":"Unit (U.S.$)","page_number":67,"box":{"x":555,"y":392,"width":71,"height":10}},{"id":"8bacc2a4-20a2-44c1-9e0f-4db3109a644c","block_type":"box","text":"20,000 $500,000","page_number":67,"box":{"x":383,"y":411,"width":247,"height":11}},{"id":"8ceb09d7-7b4e-49bd-8ccc-73caa8524116","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":67,"box":{"x":117,"y":443,"width":754,"height":12}},{"id":"8c7be536-d631-40b6-9dad-f86b019b56ba","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":67,"box":{"x":116,"y":458,"width":759,"height":12}},{"id":"12a30f32-2f99-41a9-865d-aa7d8e0f2e33","block_type":"box","text":"number of shares outstanding of the Fund, and to make a corresponding change in the number of","page_number":67,"box":{"x":117,"y":474,"width":730,"height":12}},{"id":"9124c007-d290-4dbc-8af6-d09536866063","block_type":"box","text":"shares constituting a Creation Unit, in the event that the per share price in the secondary market rises","page_number":67,"box":{"x":116,"y":489,"width":761,"height":12}},{"id":"e057d6b4-8a45-470d-8c0c-7abdc512fd8a","block_type":"box","text":"(or declines) to an amount that falls outside the range deemed desirable by the Board.","page_number":67,"box":{"x":117,"y":505,"width":644,"height":12}},{"id":"b1dec55c-49fe-4037-a488-912d349733e5","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":67,"box":{"x":116,"y":536,"width":764,"height":12}},{"id":"9757204c-b5eb-41fd-b4f5-022d5f57effb","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":67,"box":{"x":116,"y":551,"width":753,"height":12}},{"id":"29909c48-3c18-45fc-b4ea-ce002fd7ae7c","block_type":"box","text":"for business any day on which the Listing Exchange on","page_number":67,"box":{"x":116,"y":567,"width":414,"height":12}},{"id":"a56b26d9-bc24-4c43-ba0d-56bd8b1fa5cb","block_type":"box","text":"which the Fund is listed for trading is open for","page_number":67,"box":{"x":530,"y":567,"width":343,"height":12}},{"id":"7c13d838-237a-4992-97c3-8a777b421d35","block_type":"box","text":"business. As of the date of this SAI, the Listing Exchange observes the following holidays, as","page_number":67,"box":{"x":117,"y":582,"width":695,"height":12}},{"id":"377b4263-ea17-4f1c-a169-8188af8dafb4","block_type":"box","text":"observed: New Year’s Day, Martin Luther King, Jr. Day, Presidents’ Day, Good Friday, Memorial Day,","page_number":67,"box":{"x":116,"y":598,"width":760,"height":12}},{"id":"e3022def-5e9c-4ff4-ab37-6abe266540cf","block_type":"box","text":"Juneteenth, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.","page_number":67,"box":{"x":116,"y":613,"width":621,"height":12}},{"id":"680f9215-2d38-421b-9a68-163547224a92","block_type":"box","text":"Fund Deposit.","page_number":67,"box":{"x":117,"y":645,"width":110,"height":12}},{"id":"2ee88793-719c-48f6-8a50-38b26fb4a15c","block_type":"box","text":"The consideration for purchase of Creation Units of the Fund generally consists of","page_number":67,"box":{"x":228,"y":645,"width":618,"height":12}},{"id":"b5809822-81ee-467a-91ae-afc22acaaa74","block_type":"box","text":"Deposit Securities and the Cash Component computed as described below. Together, the Deposit","page_number":67,"box":{"x":117,"y":660,"width":729,"height":12}},{"id":"2d1aa21b-e1ab-45a9-a5d6-9c5260680d89","block_type":"box","text":"Securities and the Cash Component constitute the “Fund Deposit,” which will be applicable (subject to","page_number":67,"box":{"x":116,"y":676,"width":757,"height":12}},{"id":"db5ec155-d010-4129-84e1-8894327f6a0f","block_type":"box","text":"possible amendment or correction) to creation requests received in proper form. The Fund Deposit","page_number":67,"box":{"x":117,"y":691,"width":731,"height":12}},{"id":"d2882c31-04ab-4c91-8e0c-ea1a3b2e4d5a","block_type":"box","text":"represents the minimum initial and subsequent investment amount for a Creation Unit of the Fund.","page_number":67,"box":{"x":117,"y":707,"width":728,"height":12}},{"id":"64efadac-88bf-464b-a1a3-3993aa8cd6c7","block_type":"box","text":"Such Fund Deposit is applicable, subject to any adjustments as described below, to purchases of","page_number":67,"box":{"x":116,"y":722,"width":722,"height":12}},{"id":"11281c1d-c103-42af-b623-a4d0f85f8f7e","block_type":"box","text":"Creation Units of shares of the Fund until such time as the next-announced Fund Deposit is made","page_number":67,"box":{"x":117,"y":738,"width":725,"height":12}},{"id":"18556fea-52f3-4162-b067-3177c25ec58e","block_type":"box","text":"available.","page_number":67,"box":{"x":116,"y":753,"width":69,"height":10}},{"id":"fd112bd9-ff51-43b8-8ae9-eff5485e5493","block_type":"box","text":"The Cash Component is an amount equal to the difference between the NAV of the shares (per","page_number":67,"box":{"x":116,"y":784,"width":709,"height":13}},{"id":"d3168ece-40d3-4c89-8773-cca4897762c6","block_type":"box","text":"Creation Unit) and the “Deposit Amount,” which is an amount equal to the market value of the Deposit","page_number":67,"box":{"x":117,"y":800,"width":755,"height":12}},{"id":"f58bc0b3-3ef7-467e-918c-3252c9336664","block_type":"box","text":"Securities, and serves to compensate for any differences between the NAV per Creation Unit and the","page_number":67,"box":{"x":116,"y":815,"width":751,"height":13}},{"id":"3255b508-5ada-4387-ad5a-011027a5d55e","block_type":"box","text":"Deposit Amount. Payment of any stamp duty or other similar fees and expenses payable upon transfer","page_number":67,"box":{"x":117,"y":831,"width":766,"height":12}},{"id":"848c90d3-bc3f-478c-bc0b-1e613486d73f","block_type":"box","text":"of beneficial ownership of the Deposit Securities are the sole responsibility of the Authorized","page_number":67,"box":{"x":116,"y":846,"width":689,"height":13}},{"id":"8127fffe-bc2b-4def-9035-14d937603339","block_type":"box","text":"Participant purchasing the Creation Unit. The Fund generally offers Creation Units partially for cash,","page_number":67,"box":{"x":117,"y":862,"width":745,"height":12}},{"id":"92655089-55e1-4900-94af-31d57f959ada","block_type":"box","text":"but may, in certain circumstances, offer Creation Units solely for cash or solely in-kind. Please see the","page_number":67,"box":{"x":117,"y":877,"width":762,"height":13}},{"id":"c921d36e-5193-4bc6-9fee-975a766ae813","block_type":"box","text":"59","page_number":67,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"30e3e1f7-523a-4d72-a5e4-788609b12dac","block_type":"box","text":"NM1026U-6030748-67/260","page_number":67,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"de89c730-26b1-426d-afda-a2d8329b5e81","block_type":"box","text":"Cash Purchase Method","page_number":68,"box":{"x":117,"y":87,"width":175,"height":10}},{"id":"ae406221-ba08-4a82-aa45-122cfee5612e","block_type":"box","text":"d section below and the following discussion summarizing the Deposit Security","page_number":68,"box":{"x":292,"y":87,"width":580,"height":12}},{"id":"0a1edf66-00cb-4edd-8764-4c95c43c19d9","block_type":"box","text":"method for further information on purchasing Creation Units of the Fund.","page_number":68,"box":{"x":117,"y":102,"width":542,"height":13}},{"id":"b2ad8bac-f0d5-4150-8203-85b0d528937c","block_type":"box","text":"The identity and number or par value of the Deposit Securities change pursuant to changes in the","page_number":68,"box":{"x":116,"y":134,"width":730,"height":12}},{"id":"560ba1ed-2b83-4853-8cbd-cc9b4c90918e","block_type":"box","text":"composition of the Fund’s portfolio and as rebalancing adjustments and corporate action events are","page_number":68,"box":{"x":116,"y":149,"width":744,"height":12}},{"id":"aa15ffb1-6859-4793-8c8b-07ad4022a84e","block_type":"box","text":"reflected from time to time by BFA with a view to the investment objective of the Fund. The","page_number":68,"box":{"x":117,"y":165,"width":677,"height":12}},{"id":"23cf6073-0a85-4c1a-aa00-c7d07e723549","block_type":"box","text":"composition of the Deposit Securities may also change in response to adjustments to the weighting or","page_number":68,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"8c0a451f-0404-4be0-a9f1-8290ff4d5906","block_type":"box","text":"composition of the component securities constituting the Fund’s portfolio.","page_number":68,"box":{"x":116,"y":196,"width":547,"height":12}},{"id":"722bf909-c91c-41ae-8a50-284dace21ea2","block_type":"box","text":"The Fund Deposit may also be modified to minimize the Cash Component by redistributing the cash to","page_number":68,"box":{"x":116,"y":227,"width":766,"height":12}},{"id":"de20aff2-17ef-4a30-bf93-a7051fa6db97","block_type":"box","text":"the Deposit Securities portion of the Fund Deposit through “systematic rounding.” The rounding","page_number":68,"box":{"x":116,"y":242,"width":712,"height":12}},{"id":"29cb7179-913f-4c6a-a918-b510c0479e4a","block_type":"box","text":"methodology “rounds up” position sizes of securities in the Deposit Securities (which in turn reduces","page_number":68,"box":{"x":117,"y":258,"width":746,"height":12}},{"id":"5ed3a948-3667-43ab-b525-faf267e3d95f","block_type":"box","text":"the cash portion). However, the methodology limits the maximum allowed percentage change in weight","page_number":68,"box":{"x":116,"y":273,"width":770,"height":12}},{"id":"430f5b54-e12c-41e9-a563-9b6ec8f285ca","block_type":"box","text":"and share quantity of any given security in the Fund Deposit.","page_number":68,"box":{"x":116,"y":289,"width":456,"height":12}},{"id":"21479179-ef95-46f0-aa9d-5ddb4627a1eb","block_type":"box","text":"Fund Deposits may also be modified to position a fund towards a forward index rebalance to reflect","page_number":68,"box":{"x":117,"y":320,"width":740,"height":12}},{"id":"5eed7749-4890-449f-8a65-ab8bde52f48e","block_type":"box","text":"revisions that account for index additions, deletions, and re-weights.","page_number":68,"box":{"x":117,"y":335,"width":509,"height":12}},{"id":"ba4b6231-728d-4a2b-b10f-3e42c72deac7","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":68,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"48556ae0-b71a-4795-9ce9-2dee9ba5a125","block_type":"box","text":"Component to replace any Deposit Security in certain circumstances, including: (i) when instruments","page_number":68,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"0f8e8e6d-06ca-43d9-9187-498a8a9cbe2a","block_type":"box","text":"are not available in sufficient quantity for delivery, (ii) when instruments are not eligible for transfer","page_number":68,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"5bdba71b-34ee-49d4-a645-839e5331f7b3","block_type":"box","text":"through DTC or the clearing process (as discussed below), (iii) when instruments that the Authorized","page_number":68,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"a5691ddf-c52d-472d-950d-a924d0f8f238","block_type":"box","text":"Participant (or an investor on whose behalf the Authorized Participant is acting) are not able to be","page_number":68,"box":{"x":117,"y":428,"width":728,"height":12}},{"id":"756de749-cd8b-47f0-a220-d423cdd7ce10","block_type":"box","text":"traded due to a trading restriction, (iv) when delivery of the Deposit Security by the Authorized","page_number":68,"box":{"x":116,"y":444,"width":702,"height":12}},{"id":"4b9553df-9e25-4821-af92-0728abbd496d","block_type":"box","text":"Participant (or by an investor on whose behalf the Authorized Participant is acting) would be restricted","page_number":68,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"ca2b81a7-45a2-4653-ad54-9fb43bdedc9a","block_type":"box","text":"under applicable securities or other local laws, (v) in connection with distribution payments to be made","page_number":68,"box":{"x":117,"y":475,"width":763,"height":12}},{"id":"281f07c2-5525-490c-aa58-80c4ea7b3bb1","block_type":"box","text":"by the Fund, or (vi) in certain other situations.","page_number":68,"box":{"x":117,"y":490,"width":341,"height":12}},{"id":"ef565237-be58-4f67-91c7-fd54328ff3ef","block_type":"box","text":"Cash Purchase Method.","page_number":68,"box":{"x":116,"y":521,"width":195,"height":10}},{"id":"b605824e-0dfa-4035-b5d9-3170465643c8","block_type":"box","text":"Although the Trust does not generally permit full cash purchases of Creation","page_number":68,"box":{"x":311,"y":521,"width":572,"height":12}},{"id":"734d3634-effe-4b0e-ab7f-529458e70d63","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":68,"box":{"x":117,"y":537,"width":770,"height":12}},{"id":"48b04882-764e-40fd-a9ce-be2bbb0c84d9","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":68,"box":{"x":117,"y":552,"width":762,"height":12}},{"id":"192d5ac2-a6a2-4bbc-84f6-c568e580605d","block_type":"box","text":"a partial or full cash purchase, the Authorized Participant must pay the cash equivalent of the Deposit","page_number":68,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"a49e3e64-609a-47f6-9324-083c06245c9e","block_type":"box","text":"Securities it would otherwise be required to provide through an in-kind purchase, plus the same Cash","page_number":68,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"a8248ed8-0a86-429d-99d2-4a6b51779efa","block_type":"box","text":"Component required to be paid by an in-kind purchaser.","page_number":68,"box":{"x":117,"y":599,"width":420,"height":12}},{"id":"1ac82904-1348-499f-838d-5d53175b12b4","block_type":"box","text":"Procedures for Creation of Creation Units.","page_number":68,"box":{"x":117,"y":630,"width":335,"height":9}},{"id":"6752aeee-e094-4fd1-95fc-ea08e1a64122","block_type":"box","text":"To be eligible to place orders with the Distributor and to","page_number":68,"box":{"x":453,"y":630,"width":421,"height":12}},{"id":"ed3243c3-8e5e-4583-9282-f7472444eea7","block_type":"box","text":"create a Creation Unit of the Fund, an entity must be: (i) a “Participating Party,” i.e., a broker-dealer or","page_number":68,"box":{"x":116,"y":645,"width":762,"height":12}},{"id":"710a79de-548e-4134-bed1-7fae6f487efd","block_type":"box","text":"other participant in the clearing process through the Continuous Net Settlement System of the NSCC","page_number":68,"box":{"x":116,"y":661,"width":749,"height":12}},{"id":"45929b92-4bda-452e-9551-b3ccd08a52c4","block_type":"box","text":"(the “Clearing Process”), a clearing agency that is registered with the SEC, or (ii) a DTC Participant,","page_number":68,"box":{"x":117,"y":676,"width":738,"height":12}},{"id":"88e908fc-4697-4f49-8bf8-54a48ee7f7f9","block_type":"box","text":"and must have executed an agreement with the Distributor, with respect to creations and redemptions","page_number":68,"box":{"x":116,"y":692,"width":756,"height":12}},{"id":"9d64dda3-d0ff-411a-b085-18eb097b88d1","block_type":"box","text":"of Creation Units (“Authorized Participant Agreement”) (discussed below). A member or participant of a","page_number":68,"box":{"x":116,"y":707,"width":764,"height":12}},{"id":"4b675a19-5e5e-44bd-8bce-e797b579fa55","block_type":"box","text":"clearing agency registered with the SEC which has a written agreement with the Fund or one of its","page_number":68,"box":{"x":116,"y":723,"width":730,"height":12}},{"id":"5bd74a61-bb2e-4308-92e2-b1cb648dedf9","block_type":"box","text":"service providers that allows such member or participant to place orders for the purchase and","page_number":68,"box":{"x":116,"y":738,"width":694,"height":12}},{"id":"8fa303c0-3e3a-44dc-a097-1d36628b24fb","block_type":"box","text":"redemption of Creation Units is referred to as an “Authorized Participant.” All shares of the Fund,","page_number":68,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"0715fcc4-91f2-4385-b7ed-4fa12910b082","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":68,"box":{"x":117,"y":769,"width":763,"height":11}},{"id":"99122210-a037-4660-ac62-d766d4f1c9bc","block_type":"box","text":"DTC Participant.","page_number":68,"box":{"x":117,"y":785,"width":121,"height":12}},{"id":"21fa95b8-4e9b-432d-9788-60741696953d","block_type":"box","text":"Role of the Authorized Participant.","page_number":68,"box":{"x":117,"y":816,"width":274,"height":12}},{"id":"221b0b15-cde3-4759-a97d-80bf1bae8c79","block_type":"box","text":"Creation Units may be purchased only by or through a member","page_number":68,"box":{"x":397,"y":816,"width":469,"height":12}},{"id":"f713dc14-183f-4e40-8709-8c9874fda206","block_type":"box","text":"or participant of a clearing agency registered with the SEC, which has a written agreement with the","page_number":68,"box":{"x":116,"y":831,"width":739,"height":12}},{"id":"3960a1ae-573c-4e6b-97a8-d4a535e7acdc","block_type":"box","text":"Fund or one of its service providers that allows such member or participant to place orders for the","page_number":68,"box":{"x":117,"y":847,"width":728,"height":12}},{"id":"7558ffa6-b05a-4992-99f0-3b1cbf1fe267","block_type":"box","text":"purchase and redemption of Creation Units. Such Authorized Participant will agree, pursuant to the","page_number":68,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"43719794-82e4-41ef-bb65-47f500069644","block_type":"box","text":"terms of such Authorized Participant Agreement and on behalf of itself or any investor on whose behalf","page_number":68,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"f22d6272-dd37-4d84-99cc-29d4f28c30b5","block_type":"box","text":"60","page_number":68,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"0b372c65-a79e-4a2a-8562-306f616b7572","block_type":"box","text":"NM1026U-6030748-68/260","page_number":68,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"de5b957e-d719-4b84-9fd5-f7f44f49d564","block_type":"box","text":"it will act, to certain conditions, including that such Authorized Participant will make available in","page_number":69,"box":{"x":117,"y":87,"width":707,"height":12}},{"id":"0359df5d-2cb0-45e0-865f-adb9d74e2048","block_type":"box","text":"advance of each purchase of shares an amount of cash sufficient to pay the Cash Component, once","page_number":69,"box":{"x":116,"y":102,"width":750,"height":13}},{"id":"38eaf83f-4576-4e96-9b30-cc84bec393e0","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":69,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"f8d8490c-8247-4bb2-a79c-169cf12b7876","block_type":"box","text":"form, together with the transaction fees described below. An Authorized Participant, acting on behalf of","page_number":69,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"5ce9c4d0-a295-4055-b00a-e435b0b9233c","block_type":"box","text":"an investor, may require the investor to enter into an agreement with such Authorized Participant with","page_number":69,"box":{"x":116,"y":149,"width":758,"height":12}},{"id":"f0a160c0-17ed-4044-8d4d-adb0b84abd82","block_type":"box","text":"respect to certain matters, including payment of the Cash Component. Investors who are not","page_number":69,"box":{"x":117,"y":165,"width":691,"height":12}},{"id":"c9a089e7-edfd-4f0f-a0aa-6ea86098939f","block_type":"box","text":"Authorized Participants must make appropriate arrangements with an Authorized Participant. Investors","page_number":69,"box":{"x":116,"y":180,"width":768,"height":12}},{"id":"76b8333a-2e21-4ebc-939d-df4fc5a03f67","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":69,"box":{"x":116,"y":196,"width":772,"height":12}},{"id":"0fce563c-46cc-42a3-a468-1d48cf82b6ff","block_type":"box","text":"Authorized Participant Agreement and that orders to purchase Creation Units may have to be placed","page_number":69,"box":{"x":116,"y":211,"width":752,"height":12}},{"id":"35c9f36e-2fdf-4255-ba9b-9df8c7b64353","block_type":"box","text":"by the investor’s broker through an Authorized Participant. As a result, purchase orders placed through","page_number":69,"box":{"x":117,"y":227,"width":768,"height":12}},{"id":"be474081-9559-43ef-bbcc-3ec82f697657","block_type":"box","text":"an Authorized Participant may result in additional charges to such investor. The Trust does not expect","page_number":69,"box":{"x":116,"y":242,"width":761,"height":12}},{"id":"d7fbe9c9-2612-4546-b305-4a0c2808eeca","block_type":"box","text":"to enter into an Authorized Participant Agreement with more than a small number of DTC Participants.","page_number":69,"box":{"x":116,"y":258,"width":763,"height":12}},{"id":"7d096022-cf50-413e-a03a-759c5488dc6b","block_type":"box","text":"A list of current Authorized Participants may be obtained from the Distributor. The Distributor has","page_number":69,"box":{"x":116,"y":273,"width":723,"height":12}},{"id":"6f97b096-f0b0-4ba9-bcee-52077059a85b","block_type":"box","text":"adopted guidelines regarding Authorized Participants’ transactions in Creation Units that are made","page_number":69,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"49bdc37a-7b4a-4a98-a19c-2a7dce47a9c8","block_type":"box","text":"available to all Authorized Participants. These guidelines set forth the processes and standards for","page_number":69,"box":{"x":116,"y":304,"width":736,"height":12}},{"id":"e655a1a7-8b10-4478-a667-f38820f6a3c3","block_type":"box","text":"Authorized Participants to transact with the Distributor and its agents in connection with creation and","page_number":69,"box":{"x":116,"y":320,"width":750,"height":12}},{"id":"7b5f69eb-9052-422a-b581-59d1a734bb2c","block_type":"box","text":"redemption transactions. In addition, the Distributor may be appointed as the proxy of the Authorized","page_number":69,"box":{"x":117,"y":335,"width":751,"height":12}},{"id":"18d210c2-551f-45d7-a59a-d310e9054507","block_type":"box","text":"Participant and may be granted a power of attorney under its Authorized Participant Agreement.","page_number":69,"box":{"x":117,"y":351,"width":716,"height":12}},{"id":"5553f7f3-33a9-403c-8da5-b4e89c5e6f2a","block_type":"box","text":"Purchase Orders.","page_number":69,"box":{"x":117,"y":382,"width":144,"height":9}},{"id":"639f6b5f-4af3-4a10-a625-8d712411f2bc","block_type":"box","text":"To initiate an order for a Creation Unit, an Authorized Participant must submit to the","page_number":69,"box":{"x":261,"y":382,"width":626,"height":12}},{"id":"d5de2483-efa2-4e7d-b588-8de9f507ed5b","block_type":"box","text":"Distributor or its agent an irrevocable order to purchase shares of the Fund, in proper form, generally","page_number":69,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"b8cbff8e-d5b1-4009-9bff-6d1a33670fea","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":69,"box":{"x":117,"y":413,"width":747,"height":12}},{"id":"2d638c18-6bd0-4c8f-b542-4a5abc5caf39","block_type":"box","text":"agent will notify BFA and the custodian of such order. The custodian will then provide such information","page_number":69,"box":{"x":116,"y":428,"width":766,"height":12}},{"id":"5c51a1f4-a6aa-4abe-b2d2-2c8c2bbb9a10","block_type":"box","text":"to any appropriate sub-custodian. Procedures and requirements governing the delivery of the Fund","page_number":69,"box":{"x":116,"y":444,"width":740,"height":12}},{"id":"11a6d89a-b95f-4798-a628-f98b685640ab","block_type":"box","text":"Deposit are set forth in the procedures handbook for Authorized Participants and may change from","page_number":69,"box":{"x":117,"y":459,"width":738,"height":12}},{"id":"87e8afa7-e58d-4f83-b060-12ebf2b8c671","block_type":"box","text":"time to time. Investors, other than Authorized Participants, are responsible for making arrangements","page_number":69,"box":{"x":116,"y":475,"width":749,"height":12}},{"id":"1a888ae9-ed3b-47a2-a490-816cc9e467c9","block_type":"box","text":"for a creation request to be made through an Authorized Participant. The Distributor or its agent will","page_number":69,"box":{"x":116,"y":490,"width":743,"height":12}},{"id":"566a6082-b712-46d1-a79b-7d5480b75358","block_type":"box","text":"provide a list of current Authorized Participants upon request. Those placing orders to purchase","page_number":69,"box":{"x":117,"y":506,"width":714,"height":12}},{"id":"5f40eec5-6842-4299-8bfa-6ddd7ec7ab40","block_type":"box","text":"Creation Units through an Authorized Participant should allow sufficient time to permit proper","page_number":69,"box":{"x":117,"y":521,"width":693,"height":12}},{"id":"1346a1c7-a0f2-480f-8541-107939b88a46","block_type":"box","text":"submission of the purchase order to the Distributor or its agent by the Cutoff Time (as defined below)","page_number":69,"box":{"x":116,"y":537,"width":754,"height":12}},{"id":"b775d43c-d2a0-4e8f-a10a-6210158fab40","block_type":"box","text":"on such Business Day.","page_number":69,"box":{"x":116,"y":552,"width":175,"height":12}},{"id":"0c927d03-ec02-4a2f-81af-e2bb04092ec2","block_type":"box","text":"The Authorized Participant must also make available on or before the contractual settlement date, by","page_number":69,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"25cae9a4-70f3-42fe-851c-b4449e370633","block_type":"box","text":"means satisfactory to the Fund, immediately available or same day funds estimated by the Fund to be","page_number":69,"box":{"x":117,"y":599,"width":761,"height":12}},{"id":"8d74f0cb-7249-4a82-a0a4-5baecaa2648b","block_type":"box","text":"sufficient to pay the Cash Component next determined after acceptance of the purchase order,","page_number":69,"box":{"x":116,"y":614,"width":709,"height":12}},{"id":"6cc2f9c7-6f04-4f7a-ad30-50152c10ee4f","block_type":"box","text":"together with the applicable purchase transaction fees. Those placing orders should ascertain the","page_number":69,"box":{"x":116,"y":630,"width":728,"height":12}},{"id":"2e556c36-cfaf-4adb-9ad6-da9ac93e0ecb","block_type":"box","text":"deadline for cash transfers by contacting the operations department of the broker or depositary","page_number":69,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"5577341c-63ac-4dcd-89e3-082da661080f","block_type":"box","text":"institution effectuating the transfer of the Cash Component. This deadline is likely to be significantly","page_number":69,"box":{"x":117,"y":661,"width":736,"height":12}},{"id":"a9c63ea6-384c-4ae4-8983-573369ee982c","block_type":"box","text":"earlier than the Cutoff Time of the Fund. Investors should be aware that an Authorized Participant may","page_number":69,"box":{"x":116,"y":676,"width":761,"height":12}},{"id":"1cc3a822-976f-4bda-9731-dd91d0a53a92","block_type":"box","text":"require orders for purchases of shares placed with it to be in the particular form required by the","page_number":69,"box":{"x":117,"y":692,"width":703,"height":12}},{"id":"312a5ab3-104a-4686-bd09-6b76bd40d012","block_type":"box","text":"individual Authorized Participant.","page_number":69,"box":{"x":117,"y":707,"width":241,"height":12}},{"id":"31fce5b7-ae59-431a-af4c-e5a7f5000f0c","block_type":"box","text":"The Authorized Participant is responsible for any and all expenses and costs incurred by the Fund,","page_number":69,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"2129079e-d371-4df1-8ef5-b5fc56bd20b4","block_type":"box","text":"including any applicable cash amounts, in connection with any purchase order.","page_number":69,"box":{"x":117,"y":754,"width":583,"height":12}},{"id":"a479ebae-e39d-4373-8268-0d69be740668","block_type":"box","text":"Timing of Submission of Purchase Orders.","page_number":69,"box":{"x":116,"y":785,"width":340,"height":12}},{"id":"eb74b2ea-6050-4a7b-87c2-a495d638c4bf","block_type":"box","text":"An Authorized Participant must submit an irrevocable","page_number":69,"box":{"x":462,"y":785,"width":395,"height":12}},{"id":"c087428a-1c01-49da-8e79-f04f25400cb7","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":69,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"08708515-3ba3-42a1-963f-ec5aa43e5816","block_type":"box","text":"order to receive that day’s NAV. Creation Orders must be transmitted by an Authorized Participant in","page_number":69,"box":{"x":116,"y":816,"width":746,"height":12}},{"id":"f8a41170-7f37-4fb1-b69a-4b1ef4f2aa13","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":69,"box":{"x":116,"y":831,"width":732,"height":12}},{"id":"ed239cd1-5bc1-45de-a567-0e18f8251185","block_type":"box","text":"Authorized Participant Agreement. Economic or market disruptions or changes, or telephone or other","page_number":69,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"3a7a6440-c9c7-4fff-846e-cea1b5d87c45","block_type":"box","text":"communication failure, may impede the ability to reach the Distributor or its agent or an Authorized","page_number":69,"box":{"x":116,"y":862,"width":736,"height":12}},{"id":"c76f9d17-ef51-49e2-a3e8-d79e4c16b162","block_type":"box","text":"Participant. Orders to create shares of the Fund that are submitted on the Business Day immediately","page_number":69,"box":{"x":117,"y":878,"width":752,"height":12}},{"id":"c0fa0fa3-cb4a-4ebe-8a78-4ca01c9c0102","block_type":"box","text":"61","page_number":69,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"d600cedd-d5da-40fb-aa51-7c177160abfa","block_type":"box","text":"NM1026U-6030748-69/260","page_number":69,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"c7822bb9-1289-48d9-930e-82ae50ddec75","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":70,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"68b13f89-2624-4c28-8e4a-efa5330163ca","block_type":"box","text":"market are closed may not be accepted. The Fund’s deadline specified above for the submission of","page_number":70,"box":{"x":117,"y":102,"width":742,"height":13}},{"id":"4a559797-24ee-4a1c-81c2-a1665354f893","block_type":"box","text":"purchase orders is referred to as the Fund’s “Cutoff Time.” The Distributor or its agent, in their","page_number":70,"box":{"x":117,"y":118,"width":701,"height":12}},{"id":"1bc5d46a-dbbf-47f8-9cec-e84dc8aaaf01","block_type":"box","text":"discretion, may permit the submission of such orders and requests by or through an Authorized","page_number":70,"box":{"x":116,"y":134,"width":712,"height":12}},{"id":"d5ac5fb2-4388-47a6-94f1-b120aa401735","block_type":"box","text":"Participant at any time (including on days on which the Listing Exchange is not open for business) via","page_number":70,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"511d00cb-b179-4fdd-9db2-23d69f9daa8e","block_type":"box","text":"communication through the facilities of the Distributor’s or its agent’s proprietary website maintained for","page_number":70,"box":{"x":116,"y":165,"width":771,"height":12}},{"id":"3997e7a2-5a34-40a3-8873-fbd93d267bc6","block_type":"box","text":"this purpose. Purchase orders and redemption requests, if accepted by the Trust, will be processed","page_number":70,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"b04e17e4-64c7-4066-a199-8524b733e9e1","block_type":"box","text":"based on the NAV next determined after such acceptance in accordance with the Fund’s Cutoff Times","page_number":70,"box":{"x":117,"y":196,"width":762,"height":11}},{"id":"a10cdd93-b298-4c75-9bec-b944f0807cc6","block_type":"box","text":"as provided in the Authorized Participant Agreement and disclosed in this SAI.","page_number":70,"box":{"x":116,"y":211,"width":586,"height":12}},{"id":"110ad3ef-da5b-449b-99a1-a782cb1f233b","block_type":"box","text":"Acceptance of Orders for Creation Units.","page_number":70,"box":{"x":116,"y":243,"width":331,"height":12}},{"id":"3358932f-1917-446d-8ec6-1543200c84ec","block_type":"box","text":"Subject to the conditions that (i) an irrevocable purchase","page_number":70,"box":{"x":448,"y":243,"width":424,"height":12}},{"id":"f67b1089-ceb9-4e2a-9c3a-53739e3dbe94","block_type":"box","text":"order has been submitted by the Authorized Participant (either on its own or another investor’s behalf)","page_number":70,"box":{"x":116,"y":258,"width":761,"height":12}},{"id":"068b2219-2fe4-4dfe-8a85-4e2cd557f4ac","block_type":"box","text":"and (ii) arrangements satisfactory to the Fund are in place for payment of the Cash Component and","page_number":70,"box":{"x":116,"y":274,"width":745,"height":12}},{"id":"76631019-1103-4d44-a03c-a60cbaf2f5fb","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":70,"box":{"x":116,"y":289,"width":757,"height":12}},{"id":"43da2616-a44f-45de-9e78-2d3263e8d2a6","block_type":"box","text":"(and the right of the Distributor and BFA) to reject any order until acceptance, as set forth below.","page_number":70,"box":{"x":117,"y":305,"width":720,"height":12}},{"id":"824e71b8-9de4-4197-b80b-d30c38c265ee","block_type":"box","text":"Once the Fund has accepted an order, upon the next determination of the net asset value of the","page_number":70,"box":{"x":116,"y":337,"width":718,"height":12}},{"id":"85fe96f3-c493-458f-a64a-b91044e65b2a","block_type":"box","text":"shares, the Fund will confirm the issuance of a Creation Unit, against receipt of payment, at such net","page_number":70,"box":{"x":116,"y":352,"width":752,"height":12}},{"id":"a14e6e5d-a4de-4fd8-8ccd-902350927d58","block_type":"box","text":"asset value. The Distributor or its agent will then transmit a confirmation of acceptance to the","page_number":70,"box":{"x":116,"y":368,"width":694,"height":12}},{"id":"aeb2d1c7-e19d-47b8-9e3c-13ab01c8c655","block_type":"box","text":"Authorized Participant that placed the order.","page_number":70,"box":{"x":116,"y":383,"width":333,"height":12}},{"id":"729b3449-215e-40fc-9381-4b065db2a359","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":70,"box":{"x":116,"y":415,"width":767,"height":12}},{"id":"c2e44331-d5f4-4e24-9999-0abcdc0e8c18","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":70,"box":{"x":116,"y":430,"width":759,"height":13}},{"id":"fe0be1ea-b2fc-4b01-9e56-12810646aa14","block_type":"box","text":"Investment Company Act. For example, the Fund may reject or revoke a creation order transmitted to it","page_number":70,"box":{"x":117,"y":446,"width":770,"height":12}},{"id":"896c9d3f-8399-48a3-b899-7d742a801df1","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":70,"box":{"x":117,"y":461,"width":766,"height":13}},{"id":"a6667b00-a0df-4c4d-850b-ed3ec2dffd70","block_type":"box","text":"shares ordered, would own 80% or more of the currently outstanding shares of the Fund; (iii) the","page_number":70,"box":{"x":116,"y":477,"width":720,"height":12}},{"id":"a663d629-766c-41f8-91e3-72f3c559db68","block_type":"box","text":"Deposit Securities delivered do not conform to the identity and number of shares specified, as","page_number":70,"box":{"x":117,"y":492,"width":700,"height":13}},{"id":"7e849a1b-89d3-4570-81b3-81fa6be00fd0","block_type":"box","text":"described above; (iv) acceptance of the Deposit Securities is not legally required or would, in the","page_number":70,"box":{"x":116,"y":508,"width":721,"height":12}},{"id":"5023310b-46e3-430e-8a6f-c1f02cfafe97","block_type":"box","text":"opinion of counsel, be unlawful; or (v) circumstances outside the control of the Fund, the Distributor or","page_number":70,"box":{"x":116,"y":523,"width":761,"height":13}},{"id":"3d159332-4a28-4c7f-a8e5-f43a976570b6","block_type":"box","text":"its agent and BFA make it impracticable to process purchase orders. The Distributor or its agent shall","page_number":70,"box":{"x":117,"y":539,"width":756,"height":12}},{"id":"af015fcf-b850-421e-a34f-46020a817ed7","block_type":"box","text":"notify a prospective purchaser of a Creation Unit and/or the Authorized Participant acting on behalf of","page_number":70,"box":{"x":117,"y":554,"width":756,"height":13}},{"id":"de90e7d9-294f-44e1-aad7-6571e5c74dd1","block_type":"box","text":"such purchaser of its rejection of such order. The Fund, State Street, the sub-custodian and the","page_number":70,"box":{"x":116,"y":570,"width":714,"height":12}},{"id":"6b79484d-0e15-4f78-971d-6ce0fe50723e","block_type":"box","text":"Distributor or its agent are under no duty, however, to give notification of any defects or irregularities in","page_number":70,"box":{"x":117,"y":585,"width":765,"height":13}},{"id":"3fedae48-ba76-4c00-9f1c-85e7a9a468d5","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":70,"box":{"x":116,"y":601,"width":771,"height":12}},{"id":"31df6c8b-b0d7-4914-9a93-1e26efa51d42","block_type":"box","text":"Issuance of a Creation Unit.","page_number":70,"box":{"x":117,"y":632,"width":225,"height":10}},{"id":"d51a391a-5e6f-4964-ba82-6ec4aff9fa64","block_type":"box","text":"Except as provided herein, a Creation Unit will not be issued until the","page_number":70,"box":{"x":344,"y":632,"width":515,"height":12}},{"id":"f0b4f0fa-909b-42f6-ae72-11cca8ba43b5","block_type":"box","text":"transfer of good title to the Fund of the Deposit Securities and the payment of the Cash Component","page_number":70,"box":{"x":116,"y":648,"width":743,"height":12}},{"id":"98652cc4-5816-49a8-aa09-473695463094","block_type":"box","text":"have been completed. When the sub-custodian has confirmed to the custodian that the securities","page_number":70,"box":{"x":117,"y":663,"width":721,"height":12}},{"id":"a74be8c6-2e16-40c9-bbfa-15f26c8f7efc","block_type":"box","text":"included in the Fund Deposit (or the cash value thereof) have been delivered to the account of the","page_number":70,"box":{"x":117,"y":678,"width":726,"height":12}},{"id":"99a8e885-32d0-42ae-b003-caf85cdb5589","block_type":"box","text":"relevant sub-custodian or sub-custodians, the Distributor or its agent and BFA shall be notified of such","page_number":70,"box":{"x":117,"y":693,"width":757,"height":13}},{"id":"4c5b559c-aab0-4afe-ba70-f525f3d8c6dd","block_type":"box","text":"delivery and the Fund will issue and cause the delivery of the Creation Unit. Creation Units are","page_number":70,"box":{"x":116,"y":709,"width":701,"height":12}},{"id":"8a1cceb8-49b9-4260-8d20-83db7a7316b9","block_type":"box","text":"generally issued on a “T+1 basis” (","page_number":70,"box":{"x":116,"y":724,"width":258,"height":12}},{"id":"beba8b27-f6a4-4615-a3fb-a43b33ac9892","block_type":"box","text":"i.e.","page_number":70,"box":{"x":375,"y":724,"width":20,"height":9}},{"id":"0ae3b313-bfcd-433e-8a8d-01cbd9a0b072","block_type":"box","text":", one Business Day after trade date). The Fund reserves the right","page_number":70,"box":{"x":398,"y":724,"width":485,"height":12}},{"id":"9c270f02-e527-4d97-bb94-bdbb338fb39e","block_type":"box","text":"to settle Creation Unit transactions on a basis other than T+1, as applicable. For example, the Fund","page_number":70,"box":{"x":116,"y":739,"width":738,"height":12}},{"id":"6bf795ef-1329-482e-8cd9-4d8023333cd0","block_type":"box","text":"reserves the right to settle Creation Unit transactions on a basis other than T+1 in order to","page_number":70,"box":{"x":117,"y":754,"width":667,"height":13}},{"id":"05c730fa-d2eb-4549-b01b-c593235b6b8e","block_type":"box","text":"accommodate non-U.S. market holiday schedules, the occurrence of a holiday in the U.S. bond market","page_number":70,"box":{"x":116,"y":770,"width":764,"height":12}},{"id":"58575fbc-74dc-4317-9a85-638381f5aa3b","block_type":"box","text":"that is not a holiday observed in the U.S. equity market, to account for different treatment among","page_number":70,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"492e520a-7466-4835-abd9-b21e85f8a2d4","block_type":"box","text":"non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (i.e., the last date the","page_number":70,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"09f9fb7b-fee2-4377-8cc8-060a0f175343","block_type":"box","text":"holder of a security can sell the security and still receive dividends payable on the security sold) and in","page_number":70,"box":{"x":117,"y":815,"width":758,"height":13}},{"id":"4dddfb1f-e8bf-4dcc-aa76-1ea09778fb79","block_type":"box","text":"certain other circumstances consistent with applicable law.","page_number":70,"box":{"x":116,"y":831,"width":440,"height":12}},{"id":"a18d7571-ca34-48a1-a01c-3d54ae9e8f16","block_type":"box","text":"To the extent contemplated by an Authorized Participant Agreement with the Distributor, the Fund will","page_number":70,"box":{"x":116,"y":862,"width":759,"height":12}},{"id":"632c7793-7abb-4109-86e1-cc852c8c40eb","block_type":"box","text":"issue Creation Units to such Authorized Participant, notwithstanding the fact that the corresponding","page_number":70,"box":{"x":117,"y":877,"width":741,"height":13}},{"id":"9fe81abc-7a12-4948-b4ba-509ff49bc2e9","block_type":"box","text":"62","page_number":70,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6835c340-486f-4d70-9a12-43074af9dc65","block_type":"box","text":"NM1026U-6030748-70/260","page_number":70,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1e55a4e6-69b1-436b-b1d3-eda6cf7c529b","block_type":"box","text":"Fund Deposits have not been received in part or in whole, in reliance on the undertaking of the","page_number":71,"box":{"x":117,"y":87,"width":706,"height":12}},{"id":"9001e6ea-dd68-46f9-af83-d01b24bb6db4","block_type":"box","text":"Authorized Participant to deliver the missing Deposit Securities as soon as possible, which undertaking","page_number":71,"box":{"x":116,"y":102,"width":769,"height":12}},{"id":"b74d5b87-0241-42bd-b91e-71e04959ae03","block_type":"box","text":"shall be secured by such Authorized Participant’s delivery and maintenance of collateral as set forth in","page_number":71,"box":{"x":116,"y":117,"width":764,"height":12}},{"id":"2ccb785a-9f59-41c1-b697-a0421c0ea3a0","block_type":"box","text":"the handbook for Authorized Participants. The Trust may use such collateral at any time to buy Deposit","page_number":71,"box":{"x":116,"y":132,"width":770,"height":13}},{"id":"d3212160-d6ff-4a7d-b67e-da9da58c7836","block_type":"box","text":"Securities for the Fund. Such collateral must be delivered no later than the time specified by the Fund","page_number":71,"box":{"x":116,"y":148,"width":759,"height":12}},{"id":"f0078378-cdd3-47f5-8798-2e3c6365b17f","block_type":"box","text":"or its custodian on the contractual settlement date. Information concerning the Fund’s current","page_number":71,"box":{"x":116,"y":163,"width":697,"height":12}},{"id":"199646d0-510a-4824-abea-529cc6d1716f","block_type":"box","text":"procedures for collateralization of missing Deposit Securities is available from the Distributor or its","page_number":71,"box":{"x":117,"y":178,"width":730,"height":12}},{"id":"e131f635-4630-45b6-8aed-c54eedfe9afa","block_type":"box","text":"agent. The Authorized Participant Agreement will permit the Fund to buy the missing Deposit","page_number":71,"box":{"x":116,"y":194,"width":694,"height":12}},{"id":"2ad7979d-1cb3-4a17-9e73-699377380a06","block_type":"box","text":"Securities at any time and will subject the Authorized Participant to liability for any shortfall between the","page_number":71,"box":{"x":116,"y":209,"width":771,"height":12}},{"id":"8e9087d6-fd6a-4c09-bc88-4eaf0427ae48","block_type":"box","text":"cost to the Fund of purchasing such securities and the collateral including, without limitation, liability for","page_number":71,"box":{"x":116,"y":224,"width":769,"height":12}},{"id":"33031044-bd8d-426c-977d-c9ab109e20b8","block_type":"box","text":"related brokerage, borrowings and other charges.","page_number":71,"box":{"x":117,"y":239,"width":372,"height":12}},{"id":"f3b2f96f-7be6-4814-bb3d-56e59b549713","block_type":"box","text":"In certain cases, Authorized Participants may create and redeem Creation Units on the same trade","page_number":71,"box":{"x":117,"y":268,"width":738,"height":12}},{"id":"f9f151b5-3b01-44ef-9e06-82bafa264aec","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":71,"box":{"x":116,"y":283,"width":754,"height":12}},{"id":"dc3e1561-e20b-49b7-8579-de3a80eb7c0e","block_type":"box","text":"require a representation from the Authorized Participants that the creation and redemption transactions","page_number":71,"box":{"x":117,"y":298,"width":769,"height":12}},{"id":"601b2dcb-9486-4411-aa17-18f215f702f1","block_type":"box","text":"are for separate beneficial owners. All questions as to the number of shares of each security in the","page_number":71,"box":{"x":116,"y":314,"width":736,"height":12}},{"id":"f649c752-bf93-42c1-a383-959f4336a291","block_type":"box","text":"Deposit Securities and the validity, form, eligibility and acceptance for deposit of any securities to be","page_number":71,"box":{"x":117,"y":329,"width":747,"height":12}},{"id":"65d937e9-5feb-40b1-b563-a66bb80e39a1","block_type":"box","text":"delivered shall be determined by the Fund and the Fund’s determination shall be final and binding.","page_number":71,"box":{"x":116,"y":344,"width":735,"height":12}},{"id":"fc8a910b-be07-488c-aeed-aeee542a6b29","block_type":"box","text":"Costs Associated with Creation Transactions. A","page_number":71,"box":{"x":116,"y":373,"width":371,"height":9}},{"id":"b8d66044-47ce-4944-b778-d88be87de3f8","block_type":"box","text":"A standard creation transaction fee is imposed to","page_number":71,"box":{"x":487,"y":373,"width":370,"height":12}},{"id":"e915ec0e-4daf-4e9e-b8a8-64924f4cc260","block_type":"box","text":"offset the transfer and other transaction costs associated with the issuance of Creation Units. The","page_number":71,"box":{"x":116,"y":388,"width":730,"height":10}},{"id":"9985523f-45e0-4fa5-85f4-625898c3ecb6","block_type":"box","text":"standard creation transaction fee is charged to the Authorized Participant on the day such Authorized","page_number":71,"box":{"x":116,"y":403,"width":757,"height":13}},{"id":"0615bd32-4adf-43db-ac2e-0b43536b04cd","block_type":"box","text":"Participant creates a Creation Unit, and is the same, regardless of the number of Creation Units","page_number":71,"box":{"x":117,"y":419,"width":715,"height":12}},{"id":"cf61d7ad-dd83-4378-86ca-76ceaea12147","block_type":"box","text":"purchased by the Authorized Participant on the applicable Business Day.","page_number":71,"box":{"x":117,"y":434,"width":546,"height":12}},{"id":"325aee2c-c132-425c-a652-6703507d1cb5","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":71,"box":{"x":117,"y":463,"width":761,"height":12}},{"id":"a679ad7c-f6ff-4cd2-8586-2e79265eb91a","block_type":"box","text":"if a creation transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":71,"box":{"x":117,"y":478,"width":729,"height":13}},{"id":"157f9fe5-d982-4d72-b9f3-cb00891898f0","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":71,"box":{"x":117,"y":494,"width":762,"height":12}},{"id":"d32d0330-f75e-4ec0-804b-f0f90ec79fbc","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":71,"box":{"x":116,"y":509,"width":703,"height":13}},{"id":"094e1ae2-e8f1-4322-be92-09ea85a11327","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":71,"box":{"x":116,"y":525,"width":743,"height":12}},{"id":"bc93811a-c997-41e5-af73-6f3085dcb901","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":71,"box":{"x":117,"y":540,"width":743,"height":13}},{"id":"eff74c78-fbd2-4800-bd85-dd13031b27ff","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":71,"box":{"x":116,"y":556,"width":702,"height":12}},{"id":"a489086a-f123-42da-9879-aa9bd021da7c","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":71,"box":{"x":117,"y":571,"width":769,"height":13}},{"id":"1331e0fd-9e44-406f-86bd-f43d5392f3a0","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":71,"box":{"x":117,"y":587,"width":719,"height":12}},{"id":"53785a95-32b3-47b3-86ca-fd2c30c160fc","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":71,"box":{"x":116,"y":602,"width":734,"height":13}},{"id":"e34a8e66-2c91-494e-8bdc-ec3e531ab777","block_type":"box","text":"amounts shown below.","page_number":71,"box":{"x":116,"y":618,"width":176,"height":9}},{"id":"269e3bed-479d-4c2d-b796-4c8f84745e18","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Deposit Securities to the Fund.","page_number":71,"box":{"x":116,"y":647,"width":723,"height":12}},{"id":"efcd2ec4-0854-43e9-b037-a687a3feba7d","block_type":"box","text":"Certain fees/costs associated with creation transactions may be waived in certain circumstances.","page_number":71,"box":{"x":117,"y":662,"width":719,"height":13}},{"id":"18f662bf-100b-47cc-a342-b663d73fa57a","block_type":"box","text":"Investors who use the services of a broker or other financial intermediary to acquire Fund shares may","page_number":71,"box":{"x":117,"y":678,"width":754,"height":12}},{"id":"cfa04df8-1965-4a09-b7cd-2b3aaf780736","block_type":"box","text":"be charged a fee for such services.","page_number":71,"box":{"x":117,"y":693,"width":259,"height":13}},{"id":"ba64733e-1737-4add-869f-9658c0bf1d49","block_type":"box","text":"The following table sets forth the Fund’s estimated creation transaction fee as of February 1, 2026 and","page_number":71,"box":{"x":116,"y":722,"width":760,"height":13}},{"id":"80bb2e7f-aace-4b95-b432-47148cdcd17b","block_type":"box","text":"maximum additional charge (as described above):","page_number":71,"box":{"x":117,"y":738,"width":369,"height":12}},{"id":"a66f1d50-1a1a-49fd-998b-60553e1f4b4d","block_type":"box","text":"Standard Creation","page_number":71,"box":{"x":351,"y":764,"width":115,"height":7}},{"id":"07e23af4-ecc0-455b-9800-0da2d02df3c6","block_type":"box","text":"Transaction Fee*","page_number":71,"box":{"x":355,"y":774,"width":108,"height":8}},{"id":"ef69538e-d6c4-4295-ad25-400304dde69e","block_type":"box","text":"Maximum Additional","page_number":71,"box":{"x":526,"y":764,"width":129,"height":7}},{"id":"46f49621-4972-45d5-b0a5-77e8af75a93c","block_type":"box","text":"Charge**","page_number":71,"box":{"x":563,"y":774,"width":56,"height":10}},{"id":"1a3dac25-a716-4dc3-9e53-b17e3cce78fc","block_type":"box","text":"$0** 7%","page_number":71,"box":{"x":393,"y":792,"width":208,"height":12}},{"id":"5bd895f0-b520-446f-9cc7-4dc6be289f85","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":838,"width":732,"height":10}},{"id":"702f20f2-784f-45b0-97d4-d39a582ef871","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":851,"width":706,"height":10}},{"id":"619e93c5-5e4c-40b4-b0b2-c35f1a0e03d8","block_type":"box","text":"set forth above.","page_number":71,"box":{"x":170,"y":864,"width":91,"height":8}},{"id":"1d72ab44-9ecc-4c5e-ad9d-f0ebf8a3b1a8","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":71,"box":{"x":143,"y":879,"width":364,"height":10}},{"id":"d27d4e0c-f1a9-4558-8fac-b84a12aa79da","block_type":"box","text":"63","page_number":71,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"113217fd-2ecb-4a61-b5d4-fc4b6059cb4b","block_type":"box","text":"NM1026U-6030748-71/260","page_number":71,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"8790df8e-dd8c-4c23-8632-1e23aa1614ab","block_type":"box","text":"Redemption of Creation Units.","page_number":72,"box":{"x":117,"y":87,"width":240,"height":12}},{"id":"d21df59e-403e-4ffa-98ba-14a085946346","block_type":"box","text":"Shares of the Fund may be redeemed by Authorized Participants only","page_number":72,"box":{"x":358,"y":87,"width":529,"height":12}},{"id":"a3f1ebd8-f551-4ca2-af24-948da8882c9f","block_type":"box","text":"in Creation Units at their NAV next determined after receipt of a redemption request in proper form by","page_number":72,"box":{"x":117,"y":102,"width":757,"height":13}},{"id":"f2cb15cb-55ab-4c52-8528-445ba90a8eb6","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":72,"box":{"x":116,"y":118,"width":752,"height":12}},{"id":"de08e243-20de-44b5-ab85-ce5a2d2b206a","block_type":"box","text":"less than Creation Units. There can be no assurance, however, that there will be sufficient liquidity in","page_number":72,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"2970ccc2-e69c-42f9-badf-bde964d96bb9","block_type":"box","text":"the secondary market at any time to permit assembly of a Creation Unit. Investors should expect to","page_number":72,"box":{"x":116,"y":149,"width":740,"height":12}},{"id":"322059ff-7505-4bb8-b681-d1e3c1962482","block_type":"box","text":"incur brokerage and other costs in connection with assembling a sufficient number of shares to","page_number":72,"box":{"x":117,"y":165,"width":708,"height":12}},{"id":"d56a8373-bec8-4668-b33b-14195275fa63","block_type":"box","text":"constitute a Creation Unit that could be redeemed by an Authorized Participant. Beneficial owners also","page_number":72,"box":{"x":116,"y":180,"width":767,"height":12}},{"id":"ca369d39-2b7b-406c-b413-912025086427","block_type":"box","text":"may sell shares in the secondary market.","page_number":72,"box":{"x":117,"y":196,"width":309,"height":12}},{"id":"81eb7138-68b2-450a-a229-232d1eab94e7","block_type":"box","text":"The Fund generally redeems Creation Units for Fund Securities. Please see the","page_number":72,"box":{"x":116,"y":227,"width":597,"height":12}},{"id":"1ec7ce44-fa60-48d6-a0cf-11a7bae8fd83","block_type":"box","text":"Cash Redemption","page_number":72,"box":{"x":715,"y":227,"width":138,"height":11}},{"id":"6b475713-cc52-4088-b2cb-70c31c7a8610","block_type":"box","text":"Method","page_number":72,"box":{"x":116,"y":242,"width":57,"height":10}},{"id":"f979329a-c7e6-412d-95b2-5aa6fbd49ad2","block_type":"box","text":"d section below and the following discussion summarizing the in-kind method for further","page_number":72,"box":{"x":172,"y":242,"width":646,"height":12}},{"id":"07b2e5ec-fce7-4d4b-b1c1-4743a2966377","block_type":"box","text":"information on redeeming Creation Units of the Fund.","page_number":72,"box":{"x":117,"y":258,"width":400,"height":12}},{"id":"53962d59-2b25-429a-b4ca-ca4cb20ebf37","block_type":"box","text":"The Fund publishes the designated portfolio of securities (including any portion of such securities for","page_number":72,"box":{"x":116,"y":289,"width":750,"height":12}},{"id":"fe0666b7-8f48-4cf2-a3ef-2812886f9432","block_type":"box","text":"which cash may be substituted) that will be applicable to redemption requests received in proper form","page_number":72,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"4840b364-ef8e-4641-a71f-4fae250095ec","block_type":"box","text":"(as defined below) on that day (“Fund Securities” or “Redemption Basket”), and an amount of cash (the","page_number":72,"box":{"x":117,"y":320,"width":770,"height":12}},{"id":"0a2751d4-b53e-407f-94c7-b6bb0ba294ef","block_type":"box","text":"“Cash Amount,” as described below) in order to effect redemptions of Creation Units of the Fund. Such","page_number":72,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"52405d88-e452-45b4-b8b5-73dc7ff9c5e0","block_type":"box","text":"Fund Securities and Cash Amount will remain in effect until such time as the next announced","page_number":72,"box":{"x":117,"y":351,"width":695,"height":9}},{"id":"32124c89-d51e-4902-afe2-064fa602cd46","block_type":"box","text":"composition of the Fund Securities and Cash Amount is made available. The Fund Securities and","page_number":72,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"faed2d22-9cd3-4244-ba6c-4294b2cb76eb","block_type":"box","text":"Cash Amount are subject to possible amendment or correction. Fund Securities received on","page_number":72,"box":{"x":117,"y":382,"width":687,"height":12}},{"id":"cf0f7f3b-bf49-4f2c-a508-161ed1319771","block_type":"box","text":"redemption may not be identical to Deposit Securities that are applicable to creations of Creation Units.","page_number":72,"box":{"x":117,"y":397,"width":770,"height":12}},{"id":"d3c505c9-d6c0-4f25-aa78-797620d96825","block_type":"box","text":"Procedures and requirements governing redemption transactions are set forth in the handbook for","page_number":72,"box":{"x":117,"y":413,"width":731,"height":12}},{"id":"0541cdba-1284-4425-8ec4-54dd8e03ee06","block_type":"box","text":"Authorized Participants and may change from time to time.","page_number":72,"box":{"x":116,"y":428,"width":441,"height":12}},{"id":"3a8d46b1-fb46-4f96-8725-fdfffd5dea0e","block_type":"box","text":"Unless cash redemptions are available or specified for the Fund, the redemption proceeds for a","page_number":72,"box":{"x":117,"y":459,"width":713,"height":12}},{"id":"bcd05650-3f47-4dc0-b80d-66150ab9b56a","block_type":"box","text":"Creation Unit generally consist of Fund Securities, plus the Cash Amount, which is an amount equal to","page_number":72,"box":{"x":117,"y":475,"width":765,"height":12}},{"id":"446a45d3-d3ee-4b47-a906-f90bb58f0a37","block_type":"box","text":"the difference between the net asset value of the shares being redeemed, as next determined after the","page_number":72,"box":{"x":116,"y":490,"width":768,"height":12}},{"id":"23d4e367-fcbe-4680-890b-780e89e9d40c","block_type":"box","text":"receipt of a redemption request in proper form, and the value of Fund Securities, less a redemption","page_number":72,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"e6481ec9-45bc-4a8f-bce8-0846dd1316fb","block_type":"box","text":"transaction fee (as described below).","page_number":72,"box":{"x":116,"y":521,"width":279,"height":12}},{"id":"49b51194-c962-49ca-89fb-997fb274d02f","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":72,"box":{"x":116,"y":552,"width":762,"height":12}},{"id":"77cb4810-eaaa-4c70-81ae-6bb9d8c29d0c","block_type":"box","text":"certain circumstances, including: (i) when the delivery of a Fund Security to the Authorized Participant","page_number":72,"box":{"x":116,"y":568,"width":760,"height":12}},{"id":"5413da92-a7b9-4152-92ee-237c2247fab5","block_type":"box","text":"(or to an investor on whose behalf the Authorized Participant is acting) would be restricted under","page_number":72,"box":{"x":117,"y":583,"width":720,"height":12}},{"id":"079efa93-89e0-4180-9383-7dac06ace8c9","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":72,"box":{"x":116,"y":599,"width":755,"height":12}},{"id":"c63e078c-0554-4d57-873a-cdbc7eb0f42d","block_type":"box","text":"Security to the Authorized Participant would result in the disposition of the Fund Security by the","page_number":72,"box":{"x":116,"y":614,"width":712,"height":12}},{"id":"9987987e-aa6f-4b51-b608-9ce23a6c766f","block_type":"box","text":"Authorized Participant due to restrictions under applicable securities or other local laws, (iii) when the","page_number":72,"box":{"x":116,"y":630,"width":755,"height":12}},{"id":"a9851852-7d1a-43ce-94dd-632cb43ba9d9","block_type":"box","text":"delivery of a Fund Security to the Authorized Participant would result in unfavorable tax treatment,","page_number":72,"box":{"x":116,"y":645,"width":732,"height":12}},{"id":"a71490e2-b552-417c-86fc-1a2d2c0d051f","block_type":"box","text":"(iv) when a Fund Security cannot be settled or otherwise delivered in time to facilitate an in-kind","page_number":72,"box":{"x":117,"y":661,"width":708,"height":12}},{"id":"f804dcb6-be37-41e9-8cd6-a429bfa0fefb","block_type":"box","text":"redemption, or (v) in certain other situations. The amount of cash paid out in such cases will be","page_number":72,"box":{"x":117,"y":676,"width":704,"height":12}},{"id":"043ea71a-edfe-4d37-ac90-df96810550db","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":72,"box":{"x":116,"y":692,"width":753,"height":12}},{"id":"906ff13a-c195-4a33-9920-2b87a856ae30","block_type":"box","text":"Securities have a value greater than the NAV of the shares, a compensating cash payment equal to","page_number":72,"box":{"x":116,"y":707,"width":740,"height":12}},{"id":"28e0c2ca-25fc-4baa-8a19-f5b234d2bea8","block_type":"box","text":"the difference is required to be made by or through an Authorized Participant by the redeeming","page_number":72,"box":{"x":116,"y":723,"width":704,"height":12}},{"id":"a1de5ca2-02a2-469c-9af6-671f03d861f3","block_type":"box","text":"shareholder. The Fund generally redeems Creation Units for Fund Securities, but the Fund reserves","page_number":72,"box":{"x":116,"y":738,"width":743,"height":12}},{"id":"a8b39c01-172c-44f4-b5a2-a89b6a669b85","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":72,"box":{"x":116,"y":754,"width":752,"height":12}},{"id":"3de70a1d-e24c-4a55-8527-fdb57396217c","block_type":"box","text":"provide such redeeming Authorized Participant a portfolio of securities that differs from the exact","page_number":72,"box":{"x":117,"y":769,"width":715,"height":12}},{"id":"5eb18617-c326-4b9e-86ba-d20fc2fbf442","block_type":"box","text":"composition of the Fund Securities, but does not differ in NAV. The Redemption Basket may also be","page_number":72,"box":{"x":116,"y":785,"width":744,"height":12}},{"id":"8c7bf893-b03a-4642-adee-bc3fa128fbf0","block_type":"box","text":"modified to minimize the Cash Component by redistributing the cash to the Fund Securities portion of","page_number":72,"box":{"x":117,"y":800,"width":751,"height":12}},{"id":"c352b3b8-4610-460e-92e6-0c6e1c873e38","block_type":"box","text":"the Redemption Basket through systematically rounding. The rounding methodology allows position","page_number":72,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"c2dd3cb8-7ed2-4fd8-93a2-9b80c2ca3363","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":831,"width":720,"height":12}},{"id":"59ff83d1-5e49-4c4e-aa62-d99265bd6ddd","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":847,"width":722,"height":12}},{"id":"836db880-022a-4947-85c3-e77e57e7a367","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":862,"width":736,"height":12}},{"id":"7a21a536-4fbb-4b05-a59d-1bbba061fe36","block_type":"box","text":"reflect revisions that account for index additions, deletions, and re-weights.","page_number":72,"box":{"x":117,"y":878,"width":559,"height":12}},{"id":"7a74d767-9b26-4899-9927-15cbe1760148","block_type":"box","text":"64","page_number":72,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"f1b90bcc-2aba-4e0a-ab2b-808170220e46","block_type":"box","text":"NM1026U-6030748-72/260","page_number":72,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1920042c-3e15-4eff-b79a-9d76b72c5d96","block_type":"box","text":"Cash Redemption Method.","page_number":73,"box":{"x":116,"y":87,"width":211,"height":12}},{"id":"317eec0c-e1d9-43e0-aca4-ca685221fa44","block_type":"box","text":"Although the Trust does not generally permit full cash redemptions of","page_number":73,"box":{"x":328,"y":87,"width":523,"height":12}},{"id":"52c7ccd2-f6ad-462f-991c-923aaf6e3825","block_type":"box","text":"Creation Units of its funds, when partial or full cash redemptions of Creation Units are available or","page_number":73,"box":{"x":117,"y":102,"width":729,"height":12}},{"id":"b8f77ba1-1718-4f9a-9d42-f323a95f3bfd","block_type":"box","text":"specified for the Fund, they will be effected in essentially the same manner as in-kind redemptions","page_number":73,"box":{"x":116,"y":118,"width":734,"height":12}},{"id":"71537b0d-a963-4711-975e-28507fb62566","block_type":"box","text":"thereof. In the case of partial or full cash redemption, the Authorized Participant receives the cash","page_number":73,"box":{"x":116,"y":134,"width":731,"height":11}},{"id":"a9841f9e-a5b5-49d6-8857-7291ad19c47f","block_type":"box","text":"equivalent of the Fund Securities it would otherwise receive through an in-kind redemption, plus the","page_number":73,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"c3aa1d7b-0a5d-46ee-b8bd-8b83db32c62e","block_type":"box","text":"same Cash Amount to be paid to an in-kind redeemer.","page_number":73,"box":{"x":116,"y":165,"width":409,"height":11}},{"id":"c42c5ed3-0085-42f4-8262-5b27cc03146d","block_type":"box","text":"Costs Associated with Redemption Transactions. A","page_number":73,"box":{"x":116,"y":197,"width":400,"height":12}},{"id":"41203d3d-1a37-4fae-a0b4-2be13b037e4d","block_type":"box","text":"A standard redemption transaction fee is","page_number":73,"box":{"x":516,"y":197,"width":307,"height":12}},{"id":"a13dfe82-0a60-4a17-aa8d-be7db0fc2142","block_type":"box","text":"imposed to offset transfer and other transaction costs that may be incurred by the Fund. The standard","page_number":73,"box":{"x":117,"y":212,"width":761,"height":12}},{"id":"b1095f45-6c9b-423e-8fb5-525d69e985c4","block_type":"box","text":"redemption transaction fee is charged to the Authorized Participant on the day such Authorized","page_number":73,"box":{"x":117,"y":228,"width":710,"height":12}},{"id":"04eba596-d4b3-41f1-88ed-59bd0343d124","block_type":"box","text":"Participant redeems a Creation Unit, and is the same regardless of the number of Creation Units","page_number":73,"box":{"x":117,"y":243,"width":720,"height":12}},{"id":"0764fdc5-74f2-4b11-a002-b088bb98855b","block_type":"box","text":"redeemed by an Authorized Participant on the applicable Business Day.","page_number":73,"box":{"x":117,"y":259,"width":538,"height":12}},{"id":"8c7cd24f-5125-4dc2-bdbd-9e5f450924f9","block_type":"box","text":"In order to defray transaction expenses for the Fund and protect against possible shareholder dilution,","page_number":73,"box":{"x":117,"y":291,"width":761,"height":12}},{"id":"5bb76794-81c3-46c6-a612-83129fca9f26","block_type":"box","text":"if a redemption transaction consists solely or partially of cash, the Authorized Participant may also be","page_number":73,"box":{"x":117,"y":307,"width":754,"height":12}},{"id":"2739f539-6fd9-415c-b651-30ec5c909f5a","block_type":"box","text":"required to cover (up to the maximum amount shown below) certain brokerage, tax, foreign exchange,","page_number":73,"box":{"x":117,"y":322,"width":762,"height":12}},{"id":"9ed3298c-28dc-4b32-a9d2-942b03b30e32","block_type":"box","text":"execution and other costs and expenses related to the execution of trades resulting from such","page_number":73,"box":{"x":116,"y":338,"width":703,"height":12}},{"id":"79919860-46e4-4f5c-8015-f446066ec8ec","block_type":"box","text":"transaction (which may, in certain instances, be based on a good faith estimate of transaction costs","page_number":73,"box":{"x":116,"y":353,"width":743,"height":12}},{"id":"e2086419-94c0-47cf-b313-a606a105b73d","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":73,"box":{"x":117,"y":369,"width":743,"height":12}},{"id":"ac91a4c6-1836-4d48-94d0-60f4446d5daa","block_type":"box","text":"spread between the expected bid and offer side of the market and anticipated market impact).","page_number":73,"box":{"x":116,"y":384,"width":702,"height":12}},{"id":"dd74d8a9-b40d-434d-a719-2d2016a65720","block_type":"box","text":"However, the Fund is not obligated to trade identical securities to the securities identified by BlackRock","page_number":73,"box":{"x":117,"y":400,"width":769,"height":12}},{"id":"b2331005-8e8c-42d4-b3c4-781e70706121","block_type":"box","text":"in estimating these transaction and other costs and expenses. In certain cases, BlackRock or an","page_number":73,"box":{"x":117,"y":415,"width":719,"height":12}},{"id":"4421b66f-9717-4eea-bfbc-04a2c0858750","block_type":"box","text":"affiliate may determine in its discretion to deviate from the regular charge, subject to the maximum","page_number":73,"box":{"x":116,"y":431,"width":734,"height":12}},{"id":"16b07508-0f68-4fb9-9528-ede0431c3d55","block_type":"box","text":"amounts shown below.","page_number":73,"box":{"x":116,"y":446,"width":176,"height":10}},{"id":"39c35ffb-a14f-48c6-b170-7cd9c8071159","block_type":"box","text":"Authorized Participants will also bear the costs of transferring the Fund Securities from the Fund to","page_number":73,"box":{"x":116,"y":479,"width":738,"height":12}},{"id":"ddf0177e-5ab0-4af4-a6d3-45a2fa3f3ee3","block_type":"box","text":"their account on their order. Certain fees/costs associated with redemption transactions may be waived","page_number":73,"box":{"x":116,"y":494,"width":771,"height":12}},{"id":"3484149b-8178-43aa-ae14-cb828c8cb714","block_type":"box","text":"in certain circumstances. Investors who use the services of a broker or other financial intermediary to","page_number":73,"box":{"x":117,"y":510,"width":754,"height":12}},{"id":"eaf1b3e1-0584-4bfc-9235-0a7db7588ab5","block_type":"box","text":"dispose of Fund shares may be charged a fee for such services.","page_number":73,"box":{"x":116,"y":525,"width":483,"height":12}},{"id":"e5b33fa6-4e9c-48b4-a9fe-26349e5cdd68","block_type":"box","text":"The following table sets forth the Fund’s estimated redemption transaction fee as of February 1, 2026","page_number":73,"box":{"x":116,"y":558,"width":758,"height":12}},{"id":"e65f23c1-987f-416a-92a9-2b9ccc5f6549","block_type":"box","text":"and maximum additional charge (as described above):","page_number":73,"box":{"x":116,"y":573,"width":403,"height":12}},{"id":"11ff3259-0fdc-4309-91d9-8c66de5a8ee1","block_type":"box","text":"Standard","page_number":73,"box":{"x":380,"y":602,"width":57,"height":8}},{"id":"cd1d5167-37ac-401b-a5d3-ae63e8c8a011","block_type":"box","text":"Redemption","page_number":73,"box":{"x":371,"y":613,"width":76,"height":9}},{"id":"81a588b1-c707-491e-a80a-13b13ac0a601","block_type":"box","text":"Transaction Fee*","page_number":73,"box":{"x":355,"y":623,"width":108,"height":7}},{"id":"3e1526b4-d650-4fe3-bee5-0b18dc467d01","block_type":"box","text":"Maximum Additional","page_number":73,"box":{"x":526,"y":613,"width":129,"height":7}},{"id":"b6ba5a39-dd97-4e5a-8c12-45a008871221","block_type":"box","text":"Charge**","page_number":73,"box":{"x":563,"y":623,"width":56,"height":9}},{"id":"1e9d07c1-2899-45cd-8a50-e6137c06e513","block_type":"box","text":"$0 2%","page_number":73,"box":{"x":400,"y":641,"width":207,"height":11}},{"id":"49058c5d-fc81-4199-9ebf-75eb83da20e8","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":694,"width":695,"height":10}},{"id":"0191d33d-5d1e-47b5-9e5a-d5fbac8bfd9a","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":707,"width":707,"height":10}},{"id":"debcfe3c-bb97-4b16-8713-11230d3418c4","block_type":"box","text":"than the fee set forth above.","page_number":73,"box":{"x":170,"y":720,"width":166,"height":7}},{"id":"ee050274-cd69-4f00-9c2c-1681d92e801d","block_type":"box","text":"** As a percentage of the net asset value per Creation Unit.","page_number":73,"box":{"x":143,"y":736,"width":364,"height":9}},{"id":"2d14824a-63c4-464c-b190-5a224f8ea1e5","block_type":"box","text":"Placement of Redemption Orders.","page_number":73,"box":{"x":117,"y":769,"width":269,"height":12}},{"id":"c004542c-5309-484e-9eab-49315f2d67fd","block_type":"box","text":"Redemption requests for Creation Units of the Fund must be","page_number":73,"box":{"x":393,"y":769,"width":448,"height":12}},{"id":"15c88ea0-3a7b-44c0-b061-37c93b6cd0ec","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":784,"width":700,"height":12}},{"id":"c3511095-ff16-4944-8fcb-6b8ab9818c51","block_type":"box","text":"Participant must submit an irrevocable request to redeem shares of the Fund generally before 4:00","page_number":73,"box":{"x":117,"y":800,"width":733,"height":12}},{"id":"be2a3c21-cb6f-4a28-bc1c-3ce38f80e054","block_type":"box","text":"p.m., Eastern time on any Business Day in order to receive that day’s NAV. On days when the Listing","page_number":73,"box":{"x":117,"y":815,"width":751,"height":12}},{"id":"53b550c4-3903-415b-8b58-baa742027cc1","block_type":"box","text":"Exchange closes earlier than normal, the Fund may require orders to redeem Creation Units to be","page_number":73,"box":{"x":117,"y":831,"width":731,"height":12}},{"id":"49ec396f-cc00-42eb-9efc-c8b26100dd54","block_type":"box","text":"placed earlier that day. Investors, other than Authorized Participants, are responsible for making","page_number":73,"box":{"x":117,"y":846,"width":717,"height":12}},{"id":"bb241882-d079-4cde-90c9-5c1c97146b2f","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":862,"width":760,"height":12}},{"id":"bd0c94b2-7f64-425a-9ffc-4b590b9c9a61","block_type":"box","text":"or its agent will provide a list of current Authorized Participants upon request.","page_number":73,"box":{"x":116,"y":877,"width":576,"height":12}},{"id":"194462c5-6089-45af-9a03-aaf0bcd52b92","block_type":"box","text":"65","page_number":73,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"b6677a5f-50cb-460b-bb72-64d296d5263d","block_type":"box","text":"NM1026U-6030748-73/260","page_number":73,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"12a33592-4121-48e1-9d6b-dcd296f185e7","block_type":"box","text":"The Authorized Participant must transmit the request for redemption in the form required by the Fund","page_number":74,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"ec91c71d-fd83-4e73-80cf-f3807f3ece44","block_type":"box","text":"to the Distributor or its agent in accordance with procedures set forth in the Authorized Participant","page_number":74,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"1b0c82ee-1f89-41de-9000-32195c8bd21c","block_type":"box","text":"Agreement. Investors should be aware that their particular broker may not have executed an","page_number":74,"box":{"x":116,"y":118,"width":691,"height":12}},{"id":"3953cd14-172f-4a02-9262-4cf6ddac728a","block_type":"box","text":"Authorized Participant Agreement and that, therefore, requests to redeem Creation Units may have to","page_number":74,"box":{"x":116,"y":134,"width":761,"height":12}},{"id":"5c76b330-60de-4719-825e-ba8d0a18664b","block_type":"box","text":"be placed by the investor’s broker through an Authorized Participant who has executed an Authorized","page_number":74,"box":{"x":117,"y":149,"width":758,"height":12}},{"id":"dc2d7404-3c07-49e2-8d9a-e442a8e02861","block_type":"box","text":"Participant Agreement. At any time, only a limited number of broker-dealers will have an Authorized","page_number":74,"box":{"x":117,"y":165,"width":743,"height":12}},{"id":"5621cc83-820f-4eb5-9672-4befa7a5692c","block_type":"box","text":"Participant Agreement in effect. Investors making a redemption request should be aware that such","page_number":74,"box":{"x":117,"y":180,"width":735,"height":12}},{"id":"d924c048-a996-47f4-be7f-b8a2bd702ff4","block_type":"box","text":"request must be in the form specified by such Authorized Participant. Investors making a request to","page_number":74,"box":{"x":117,"y":196,"width":742,"height":12}},{"id":"2fd0f25e-4d5d-4e5b-b091-cc4918be2b30","block_type":"box","text":"redeem Creation Units should allow sufficient time to permit proper submission of the request by an","page_number":74,"box":{"x":117,"y":211,"width":743,"height":12}},{"id":"bea87dbd-410c-48f6-837c-00410f44dee0","block_type":"box","text":"Authorized Participant and transfer of the shares to the Fund’s transfer agent; such investors should","page_number":74,"box":{"x":116,"y":227,"width":748,"height":12}},{"id":"37d76195-887e-4695-8b9b-fdbca84979dc","block_type":"box","text":"allow for the additional time that may be required to effect redemptions through their banks, brokers or","page_number":74,"box":{"x":116,"y":242,"width":764,"height":12}},{"id":"2affc635-2225-4da8-bf93-ec80c0990b28","block_type":"box","text":"other financial intermediaries if such intermediaries are not Authorized Participants.","page_number":74,"box":{"x":116,"y":258,"width":623,"height":11}},{"id":"d761a182-36b5-4e95-8af0-08c33ae80432","block_type":"box","text":"A redemption request is considered to be in “proper form” if: (i) an Authorized Participant has","page_number":74,"box":{"x":116,"y":289,"width":694,"height":12}},{"id":"2ed2beee-5a19-4de7-b4fc-a4427d25d39e","block_type":"box","text":"transferred or caused to be transferred to the Fund’s transfer agent the Creation Unit redeemed","page_number":74,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"f97a4090-101b-4fb9-ac77-1c14df4d5b40","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":74,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"71cd3941-af6d-4a18-b58d-5767b410a9bf","block_type":"box","text":"any Business Day on which the redemption request is submitted; (ii) a request in form satisfactory to","page_number":74,"box":{"x":116,"y":335,"width":750,"height":12}},{"id":"ff9a2653-5659-46cc-8e15-f5f9535dc867","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":74,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"531f6701-b338-426c-a488-33ad8a9deb45","block_type":"box","text":"another redeeming investor within the time periods specified above; and (iii) all other procedures set","page_number":74,"box":{"x":116,"y":366,"width":748,"height":12}},{"id":"95c5b5ed-b75e-47e5-8ef1-b8d29296cbd1","block_type":"box","text":"forth in the Authorized Participant Agreement are properly followed.","page_number":74,"box":{"x":116,"y":382,"width":506,"height":12}},{"id":"3b6bf010-02cf-4e0f-b74f-6ca4f57ae66c","block_type":"box","text":"Upon receiving a redemption request, the Distributor or its agent shall notify the Fund and the Fund’s","page_number":74,"box":{"x":117,"y":413,"width":753,"height":12}},{"id":"77a49df2-928d-48c0-af17-54bdbc0f1b4b","block_type":"box","text":"transfer agent of such redemption request. The tender of an investor’s shares for redemption and the","page_number":74,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"24320f8d-cbee-40fd-80ca-4910c81d93ef","block_type":"box","text":"distribution of the securities and/or cash included in the redemption payment made in respect of","page_number":74,"box":{"x":116,"y":444,"width":716,"height":12}},{"id":"71426248-828d-42ed-86d9-e2c8d5a731f8","block_type":"box","text":"Creation Units redeemed will be made through DTC and the relevant Authorized Participant to the","page_number":74,"box":{"x":117,"y":459,"width":731,"height":12}},{"id":"1b235f53-f23b-4c4c-a2a2-c05e6c1e7e59","block_type":"box","text":"Beneficial Owner thereof as recorded on the book-entry system of DTC or the DTC Participant through","page_number":74,"box":{"x":117,"y":475,"width":766,"height":12}},{"id":"5bffd507-47b1-4486-8ca1-a8dac64e9681","block_type":"box","text":"which such investor holds, as the case may be, or by such other means specified by the Authorized","page_number":74,"box":{"x":116,"y":490,"width":744,"height":12}},{"id":"5cd66ac1-5b97-43ef-ba1f-5494972d3ac2","block_type":"box","text":"Participant submitting the redemption request.","page_number":74,"box":{"x":117,"y":506,"width":347,"height":12}},{"id":"a116789a-5377-4c67-b338-9d8246eb96c3","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":537,"width":736,"height":12}},{"id":"ee3162b5-bd08-41c1-8491-482f91647a3f","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":552,"width":759,"height":12}},{"id":"9617b997-2b11-49ac-a884-e4fcc61b1a1f","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":568,"width":758,"height":12}},{"id":"07ef5a07-6227-43c8-b6bd-e486f5de8d34","block_type":"box","text":"which account such portfolio securities will be delivered.","page_number":74,"box":{"x":116,"y":583,"width":421,"height":12}},{"id":"cf0f1a1b-7429-4a4d-b98c-59dbe6004e85","block_type":"box","text":"Deliveries of redemption proceeds by the Fund are generally made within one Business Day (i.e.,","page_number":74,"box":{"x":117,"y":614,"width":726,"height":12}},{"id":"3a970973-52e9-472b-b56b-feccbaf11356","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":630,"width":747,"height":12}},{"id":"3e141d1f-a61e-46ee-9ecb-0b7f98849411","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":645,"width":744,"height":12}},{"id":"77297ad7-842e-4f1c-a408-c13d411f0d91","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":661,"width":732,"height":12}},{"id":"d198900c-d655-47db-ba46-4962708f3a8f","block_type":"box","text":"including, without limitation, settlement cycles for the underlying securities, unscheduled market","page_number":74,"box":{"x":117,"y":676,"width":708,"height":12}},{"id":"9beb5524-ce50-4d70-b9f4-4044ae9815d9","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":692,"width":720,"height":12}},{"id":"f732fd21-2870-43e1-a5e1-bda77666b299","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":707,"width":747,"height":12}},{"id":"e8474d0b-17d5-4839-b18f-9ae3d8c73b9c","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":723,"width":751,"height":12}},{"id":"6303c4be-791f-429b-b0ac-6a5fbd763e14","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":738,"width":749,"height":12}},{"id":"506a203b-34b6-4b35-ac1d-fc5f4fabc457","block_type":"box","text":"treatment among non-U.S. and U.S. markets of dividend record dates and dividend ex-dates (i.e., the","page_number":74,"box":{"x":116,"y":754,"width":752,"height":12}},{"id":"1152e349-4c89-41aa-8485-39872422f973","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":769,"width":764,"height":12}},{"id":"c3773d30-5ed8-485f-b08e-3dc4274bad0c","block_type":"box","text":"sold) and in certain other circumstances consistent with applicable law.","page_number":74,"box":{"x":116,"y":785,"width":526,"height":12}},{"id":"7f50c4e0-9709-4de4-939c-67c3bc431683","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":816,"width":707,"height":12}},{"id":"3eed75b9-8424-4a8f-adef-c8ff34e75634","block_type":"box","text":"consecutive holidays, or the extended delivery cycles for transferring foreign investments to redeeming","page_number":74,"box":{"x":116,"y":831,"width":768,"height":12}},{"id":"7de94737-6314-45e3-952e-f52d301c956e","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":847,"width":760,"height":12}},{"id":"7c886d27-d980-4406-9218-5030d8bf44e3","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":862,"width":723,"height":12}},{"id":"ad5a6fc4-c3b8-49c1-bf85-5a59f515b793","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":878,"width":668,"height":12}},{"id":"b9945cf0-6f62-427a-808c-aa0a1801e7f0","block_type":"box","text":"66","page_number":74,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"35572da8-2068-4cc3-8e00-fc807c70346b","block_type":"box","text":"NM1026U-6030748-74/260","page_number":74,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d3705d61-0b78-4a51-b3c0-aff7c40dc392","block_type":"box","text":"If neither the Authorized Participant nor the Beneficial Owner on whose behalf the Authorized","page_number":75,"box":{"x":117,"y":87,"width":696,"height":12}},{"id":"3c8566bd-c7a8-495f-90b2-86c4ab5eebef","block_type":"box","text":"Participant is acting has appropriate arrangements to take delivery of Fund Securities in the applicable","page_number":75,"box":{"x":117,"y":102,"width":764,"height":13}},{"id":"d5de1ffb-87e0-4856-8c4e-b409af8983d9","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":75,"box":{"x":117,"y":118,"width":748,"height":12}},{"id":"830b7c02-53a3-41e0-adba-2c375f0a501c","block_type":"box","text":"effect deliveries of Fund Securities in such jurisdiction, the Fund may in its discretion exercise its option","page_number":75,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"3122b4d2-0493-4f58-b666-76ba99d6b6e7","block_type":"box","text":"to redeem such shares in cash, and the Beneficial Owner will be required to receive its redemption","page_number":75,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"6baa255f-bd69-4da9-8d74-7e83a4428454","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":75,"box":{"x":117,"y":165,"width":771,"height":12}},{"id":"28061b5c-b646-4aad-b61b-9d5bb4b83f2a","block_type":"box","text":"its shares based on the NAV of the Fund next determined after the redemption request is received in","page_number":75,"box":{"x":117,"y":180,"width":751,"height":12}},{"id":"b2812334-1596-41d8-a9b3-99ceaa97397d","block_type":"box","text":"proper form (minus a redemption transaction fee and additional charges specified above to offset the","page_number":75,"box":{"x":117,"y":196,"width":752,"height":12}},{"id":"f188128a-1fde-424c-9958-26bbc35938fa","block_type":"box","text":"Fund’s brokerage and other transaction costs associated with the disposition of Fund Securities).","page_number":75,"box":{"x":117,"y":211,"width":724,"height":12}},{"id":"e6b50991-b5ba-40d6-9a53-10a623d195de","block_type":"box","text":"Redemptions of shares for Fund Securities will be subject to compliance with applicable U.S. federal","page_number":75,"box":{"x":117,"y":227,"width":749,"height":12}},{"id":"7893b36f-edee-43ff-8159-f1cde51356a0","block_type":"box","text":"and state securities laws and the Fund (whether or not it otherwise permits cash redemptions) reserves","page_number":75,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"940d81d7-bf41-47f0-a94e-d7fcd1e4b17f","block_type":"box","text":"the right to redeem Creation Units for cash to the extent that the Fund cannot lawfully deliver specific","page_number":75,"box":{"x":116,"y":258,"width":753,"height":12}},{"id":"289a1139-2757-4cc6-bdc8-555c21c5b1d7","block_type":"box","text":"Fund Securities upon redemptions or cannot do so without first registering the Fund Securities under","page_number":75,"box":{"x":117,"y":273,"width":751,"height":12}},{"id":"f40b88ba-77a9-4b7d-9a1c-105a5e3e0e11","block_type":"box","text":"such laws.","page_number":75,"box":{"x":116,"y":289,"width":83,"height":9}},{"id":"649eba22-86e2-4ccf-98d0-05692d795fda","block_type":"box","text":"To the extent contemplated by an Authorized Participant’s agreement with the Distributor or its agent,","page_number":75,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"481e857e-552a-470b-8907-205061ff042b","block_type":"box","text":"in the event an Authorized Participant has submitted a redemption request in proper form but is unable","page_number":75,"box":{"x":117,"y":335,"width":766,"height":12}},{"id":"59c2345f-6f17-418e-a2c1-4065e977c147","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":75,"box":{"x":116,"y":351,"width":754,"height":12}},{"id":"a6823dad-b827-4b47-83bc-a47720ebe0ce","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":75,"box":{"x":117,"y":366,"width":729,"height":12}},{"id":"fab60e0f-408e-4293-a245-5a9b13585084","block_type":"box","text":"request, the Distributor or its agent will accept the redemption request in reliance on the undertaking by","page_number":75,"box":{"x":117,"y":382,"width":770,"height":12}},{"id":"fcadc3ec-e024-485e-800a-8883e8f04ae5","block_type":"box","text":"the Authorized Participant to deliver the missing shares as soon as possible. Such undertaking shall be","page_number":75,"box":{"x":116,"y":397,"width":770,"height":12}},{"id":"cdacd40c-f780-4e77-bc17-cdf2db07b5c1","block_type":"box","text":"secured by the Authorized Participant’s delivery and maintenance of collateral as set forth in the","page_number":75,"box":{"x":116,"y":413,"width":717,"height":12}},{"id":"c33a23b7-54c6-4a01-814c-8e30474aaf6b","block_type":"box","text":"handbook for Authorized Participants. Such collateral must be delivered no later than the time specified","page_number":75,"box":{"x":117,"y":428,"width":771,"height":12}},{"id":"8cba7cda-8321-44f7-8c69-c249c65f2998","block_type":"box","text":"by the Fund or its custodian on the Business Day after the date of submission of such redemption","page_number":75,"box":{"x":117,"y":444,"width":729,"height":12}},{"id":"377019c4-70ee-4ab5-b54b-136efa12f8ba","block_type":"box","text":"request and shall be held by State Street and marked-to-market daily.","page_number":75,"box":{"x":117,"y":459,"width":522,"height":12}},{"id":"b84fc3e4-f62c-4e83-9572-f10d62e6d23a","block_type":"box","text":"The fees of State Street and any sub-custodians in respect of the delivery, maintenance and redelivery","page_number":75,"box":{"x":116,"y":490,"width":768,"height":12}},{"id":"23cf4ff4-57c1-4869-ae13-e624203cf622","block_type":"box","text":"of the collateral shall be payable by the Authorized Participant. The Authorized Participant Agreement","page_number":75,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"a50de57c-cdb2-4c7b-819f-e6417181accc","block_type":"box","text":"permits the Fund to acquire shares of the Fund at any time and subjects the Authorized Participant to","page_number":75,"box":{"x":117,"y":521,"width":756,"height":12}},{"id":"f72a92f7-9e75-4468-aa66-13270149dd0b","block_type":"box","text":"liability for any shortfall between the aggregate of the cost to the Fund of purchasing such shares, plus","page_number":75,"box":{"x":117,"y":537,"width":764,"height":12}},{"id":"9b976b3b-47b4-49bd-b0c6-461de25b5169","block_type":"box","text":"the value of the Cash Amount, and the value of the collateral together with liability for related","page_number":75,"box":{"x":116,"y":552,"width":692,"height":12}},{"id":"2075252f-f8ba-4594-b9b7-7b5dbc4cd493","block_type":"box","text":"brokerage and other charges. Because the portfolio securities of the Fund may trade on exchange(s)","page_number":75,"box":{"x":117,"y":568,"width":753,"height":12}},{"id":"51761ef1-8706-497c-b796-1ab7ab565cc8","block_type":"box","text":"on days that the Listing Exchange is closed or are otherwise not Business Days for the Fund,","page_number":75,"box":{"x":116,"y":583,"width":697,"height":12}},{"id":"5e864c9e-c51e-4c02-81d0-3efc07594c18","block_type":"box","text":"shareholders may not be able to redeem their shares of the Fund, or purchase or sell shares of the","page_number":75,"box":{"x":116,"y":599,"width":739,"height":12}},{"id":"60d5ea51-0912-40d0-9a63-2b7b44551011","block_type":"box","text":"Fund on the Listing Exchange on days when the NAV of the Fund could be significantly affected by","page_number":75,"box":{"x":117,"y":614,"width":739,"height":12}},{"id":"3e511cee-dc54-4b7b-8394-1eb41103f816","block_type":"box","text":"events in the relevant non-U.S. markets.","page_number":75,"box":{"x":116,"y":630,"width":305,"height":9}},{"id":"ae2e0d46-e934-4db6-9dcc-e9d0617d361d","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":661,"width":765,"height":12}},{"id":"a3edd68f-0305-4793-be68-fedc783f06ff","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":676,"width":724,"height":12}},{"id":"7a87ae77-26b0-4a00-839b-002c24c96fcf","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":692,"width":722,"height":12}},{"id":"44ed2063-6222-4685-ad09-320a5c2e94bb","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":707,"width":727,"height":12}},{"id":"d0923fd0-6c3f-46f2-8652-fef1efb0aff9","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":723,"width":709,"height":12}},{"id":"ad79c07f-56b8-424e-9238-efa594a0bc62","block_type":"box","text":"practicable; or (iv) in such other circumstance as is permitted by the SEC.","page_number":75,"box":{"x":117,"y":738,"width":545,"height":12}},{"id":"c17dd003-d754-4e09-a9bf-c3627c31c13f","block_type":"box","text":"Custom Baskets.","page_number":75,"box":{"x":116,"y":769,"width":135,"height":10}},{"id":"6d28e2eb-6e44-4659-9445-a2e8410bf712","block_type":"box","text":"Creation and redemption baskets may differ and the Fund may accept “custom","page_number":75,"box":{"x":258,"y":769,"width":584,"height":12}},{"id":"cab67fae-dcbb-4ba2-85fd-53445bd641c8","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":785,"width":696,"height":12}},{"id":"eaa2be3d-834f-44f0-894d-3971a1ad787b","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":800,"width":701,"height":12}},{"id":"c963f993-6206-45a3-aeb4-aa33059671e6","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":816,"width":731,"height":12}},{"id":"1a83f47d-19bc-442f-bcbf-11efd342f0c2","block_type":"box","text":"contains bespoke cash substitutions for a single Authorized Participant. The Fund has adopted policies","page_number":75,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"b05e07fb-1f2b-4c83-b68e-a01d90306d8e","block_type":"box","text":"and procedures that govern the construction and acceptance of baskets, including heightened","page_number":75,"box":{"x":116,"y":847,"width":702,"height":12}},{"id":"5462735e-e306-499d-b946-b7f0eb18a33c","block_type":"box","text":"requirements for certain types of custom baskets. Such policies and procedures provide the","page_number":75,"box":{"x":117,"y":862,"width":685,"height":12}},{"id":"4f80a88e-d032-4553-ad86-55a82e89e016","block_type":"box","text":"parameters for the construction and acceptance of custom baskets that are in the best interests of the","page_number":75,"box":{"x":117,"y":878,"width":760,"height":12}},{"id":"d46e8761-e312-48ca-91b6-61fc60d59790","block_type":"box","text":"67","page_number":75,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"719510d7-f172-4048-845a-3ebb08e3eb0f","block_type":"box","text":"NM1026U-6030748-75/260","page_number":75,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1b9d9817-7869-4fb1-9e89-c064623f4328","block_type":"box","text":"Fund and its shareholders, establish processes for revisions to, or deviations from, such parameters,","page_number":76,"box":{"x":117,"y":87,"width":752,"height":12}},{"id":"2382b441-8c34-4f1d-9325-063b7f2734ad","block_type":"box","text":"and specify the titles and roles of the employees of BFA who are required to review each custom","page_number":76,"box":{"x":116,"y":102,"width":723,"height":13}},{"id":"b15aa367-3003-4442-9c8a-402bda5ae9c3","block_type":"box","text":"basket for compliance with those parameters. In addition, when constructing custom baskets for","page_number":76,"box":{"x":117,"y":118,"width":716,"height":12}},{"id":"73b40c17-6855-49c9-ad21-b83d951b5307","block_type":"box","text":"redemptions, the tax efficiency of the Fund may be taken into account. The policies and procedures","page_number":76,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"67c39a8c-2329-451d-8708-72abc2736fd4","block_type":"box","text":"distinguish among different types of custom baskets that may be used and impose different","page_number":76,"box":{"x":116,"y":149,"width":682,"height":12}},{"id":"fe398548-cf7f-4d95-a6dd-67534eafb2c0","block_type":"box","text":"requirements for different types of custom baskets in order to seek to mitigate against potential risks of","page_number":76,"box":{"x":117,"y":165,"width":765,"height":12}},{"id":"0a47514c-f351-46e9-ba59-2562e535f647","block_type":"box","text":"conflicts and/or overreaching by an Authorized Participant. BlackRock has established a governance","page_number":76,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"c9dd20d8-3b89-478b-944c-1e37a739a0f2","block_type":"box","text":"process to oversee basket compliance for the Fund, as set forth in the Fund’s policies and procedures.","page_number":76,"box":{"x":117,"y":196,"width":766,"height":11}},{"id":"b8be4c55-6e30-4a92-a37f-c83587640d0f","block_type":"box","text":"Taxation on Creations and Redemptions of Creation Units.","page_number":76,"box":{"x":116,"y":227,"width":472,"height":12}},{"id":"177198bd-12d6-459c-a7c0-d33380a8e753","block_type":"box","text":"An Authorized Participant generally will","page_number":76,"box":{"x":588,"y":227,"width":296,"height":12}},{"id":"6f835a18-b6bb-4154-be7e-d45d8acedd94","block_type":"box","text":"recognize either gain or loss upon the exchange of Deposit Securities for Creation Units. This gain or","page_number":76,"box":{"x":117,"y":243,"width":754,"height":12}},{"id":"99ebfa27-d32b-4aaf-b47c-1814f260d396","block_type":"box","text":"loss is calculated by taking the market value of the Creation Units purchased over the Authorized","page_number":76,"box":{"x":117,"y":258,"width":724,"height":12}},{"id":"fc256342-aade-46bc-94ae-410651e5d105","block_type":"box","text":"Participant’s aggregate basis in the Deposit Securities exchanged therefor. However, the IRS may","page_number":76,"box":{"x":117,"y":274,"width":733,"height":12}},{"id":"0b3d1e21-0feb-44eb-b8f4-115b1b8114b1","block_type":"box","text":"apply the wash sales rules to determine that any loss realized upon the exchange of Deposit Securities","page_number":76,"box":{"x":116,"y":289,"width":770,"height":12}},{"id":"09182f7d-e047-465c-a5e4-4009654f5b51","block_type":"box","text":"for Creation Units is not currently deductible. Authorized Participants should consult their own tax","page_number":76,"box":{"x":116,"y":305,"width":726,"height":12}},{"id":"28a849bd-42b4-482d-a6f7-6d2d3c41a6c0","block_type":"box","text":"advisors.","page_number":76,"box":{"x":116,"y":320,"width":72,"height":10}},{"id":"fbf54a5e-90c4-4e4b-9df8-5a9478ed8847","block_type":"box","text":"Similarly, an Authorized Participant generally will recognize either gain or loss upon the redemption of","page_number":76,"box":{"x":116,"y":352,"width":759,"height":12}},{"id":"6ec75452-70bf-4e2c-b053-c22cc98dd77a","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":76,"box":{"x":116,"y":368,"width":772,"height":12}},{"id":"b742b4fc-bb24-4a97-826c-418f319b3054","block_type":"box","text":"dictate that capital gain or loss realized from the redemption of the Creation Units will generally create","page_number":76,"box":{"x":116,"y":383,"width":760,"height":12}},{"id":"1ff08f3c-7885-45bc-a0b0-b61f26dc04b9","block_type":"box","text":"long-term capital gain or loss if the Authorized Participant held the Creation Units for more than one","page_number":76,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"0924e0c9-2100-4f6a-8783-3e21ee7538a8","block_type":"box","text":"year and short-term capital gain or loss if the Authorized Participant held the Creation Units for one","page_number":76,"box":{"x":116,"y":414,"width":739,"height":12}},{"id":"9a55a14a-c044-4a88-8f0e-62252a029900","block_type":"box","text":"year or less.","page_number":76,"box":{"x":116,"y":430,"width":96,"height":12}},{"id":"5f5c3c5e-d466-499c-98e4-98dcd34f68c1","block_type":"box","text":"Taxes","page_number":76,"box":{"x":117,"y":483,"width":120,"height":23}},{"id":"aef37284-5ba5-4477-8874-34c532d949a1","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":536,"width":743,"height":12}},{"id":"35eed9e3-81e3-4d44-99f4-db40e9a9ce6e","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":551,"width":757,"height":12}},{"id":"80b481c2-83dd-4805-847f-2771c2dbe56b","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":567,"width":765,"height":12}},{"id":"8cfe1064-906e-4fe4-8809-d3517bc1d2a0","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":582,"width":761,"height":12}},{"id":"1266ed2e-ef15-4cf3-8a38-badf85432f16","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":598,"width":739,"height":12}},{"id":"c78ad706-d8ad-4069-a921-609814a177c8","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":613,"width":747,"height":12}},{"id":"d57fb927-ab21-4b47-ad26-705a3021defd","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":629,"width":742,"height":12}},{"id":"cc424cb1-26c9-4e34-b2c1-041293b952fa","block_type":"box","text":"change, possibly with retroactive effect.","page_number":76,"box":{"x":116,"y":644,"width":298,"height":12}},{"id":"c57ea821-af09-441d-b588-3be2019f511e","block_type":"box","text":"Regulated Investment Company Qualifications.","page_number":76,"box":{"x":117,"y":676,"width":374,"height":12}},{"id":"1e579540-1016-469d-81af-e1fba500ced8","block_type":"box","text":"The Fund intends to qualify for treatment as a","page_number":76,"box":{"x":498,"y":676,"width":339,"height":12}},{"id":"fb77eec1-85b5-418d-a2b1-30d1c6d906a3","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":692,"width":766,"height":12}},{"id":"6a322916-b63d-4ccc-ac65-66f0c1870483","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":707,"width":752,"height":12}},{"id":"ecd989d9-30c1-4be7-9ecd-96acc114e8f3","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":723,"width":763,"height":12}},{"id":"0e0d7ffc-8233-41af-a569-25f33cf7229d","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":738,"width":716,"height":12}},{"id":"1f920069-afef-4b66-bcf0-3aa7256ba909","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":754,"width":765,"height":12}},{"id":"fd9d19a4-cb00-4a79-913b-e13b9c9b16a2","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":769,"width":730,"height":12}},{"id":"ef9a8d43-20fe-4317-a6f0-796916ec82c6","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":785,"width":730,"height":12}},{"id":"e84fb455-714f-4060-8b40-5593a30cc738","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":800,"width":751,"height":12}},{"id":"eb0a91e7-99be-4f96-b4f2-8f25b410e60a","block_type":"box","text":"partnerships (","page_number":76,"box":{"x":117,"y":816,"width":101,"height":12}},{"id":"19b24b72-9625-4fd5-8d15-c5eecd675983","block_type":"box","text":"i.e.,","page_number":76,"box":{"x":219,"y":816,"width":25,"height":11}},{"id":"ffe82344-5720-459a-9278-49f440930fb5","block_type":"box","text":"partnerships that are traded on an established securities market or tradable on a","page_number":76,"box":{"x":252,"y":816,"width":596,"height":12}},{"id":"dd860168-07d8-44d9-bca9-5e1cdb38f320","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":831,"width":720,"height":12}},{"id":"08a3fa44-9066-47b6-84ab-6dd164ec13dc","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":847,"width":729,"height":12}},{"id":"679c6cbd-c85e-4169-b627-47ecf61fb65f","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":862,"width":765,"height":12}},{"id":"c847ba98-b729-4607-85de-145f1b307692","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":878,"width":769,"height":12}},{"id":"f382ccb9-5629-462e-b63e-e3e9cf5b8bd9","block_type":"box","text":"68","page_number":76,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"d7c0a873-0445-4ee1-990f-10fd3a7992e0","block_type":"box","text":"NM1026U-6030748-76/260","page_number":76,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"cef8d659-5d8b-45a5-a4d7-95d58a317a98","block_type":"box","text":"securities, with such other securities limited for purposes of this calculation in respect of any one issuer","page_number":77,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"e91c6bf0-05c3-45ba-aabe-ffe99be4d814","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":77,"box":{"x":116,"y":102,"width":744,"height":13}},{"id":"8a0896bf-4e09-47d2-83a2-b143c3473bc0","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":77,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"bfddc0a6-de87-4881-a3fd-dc4ff7f16039","block_type":"box","text":"assets may be invested in the securities (other than U.S. government securities or the securities of","page_number":77,"box":{"x":116,"y":134,"width":737,"height":12}},{"id":"b0f0a9c8-1244-47a2-ad98-f58074323a2e","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":77,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"89c473a5-c4d6-4701-828b-045b761d788e","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":77,"box":{"x":117,"y":165,"width":729,"height":12}},{"id":"89cb15eb-f5fd-4045-a2e8-05c4a874bcd7","block_type":"box","text":"businesses, or the securities of one or more qualified publicly-traded partnerships.","page_number":77,"box":{"x":117,"y":180,"width":613,"height":12}},{"id":"ac7052df-d507-4246-95c1-8c2ccb4f948d","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":77,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"98356de8-30a3-49eb-850b-5452e412fa61","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":77,"box":{"x":116,"y":227,"width":737,"height":12}},{"id":"bd28b291-524e-497f-aa8a-eb6b1e245b1d","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":77,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"19204bac-bddf-4079-938e-4f2b36e4e51d","block_type":"box","text":"cure the failure, the Fund will be taxed in the same manner as an ordinary corporation and distributions","page_number":77,"box":{"x":116,"y":258,"width":770,"height":12}},{"id":"9ebd7bcf-3612-47c6-8bdd-7380086d0f30","block_type":"box","text":"to its shareholders will not be deductible by the Fund in computing its taxable income.","page_number":77,"box":{"x":116,"y":273,"width":640,"height":12}},{"id":"932a5753-af1c-47b6-8eee-26fafe96db8b","block_type":"box","text":"Although, in general, the passive loss rules of the Internal Revenue Code do not apply to RICs, such","page_number":77,"box":{"x":116,"y":304,"width":751,"height":12}},{"id":"3e8ed44c-6582-4d65-abe6-508cdffb50d7","block_type":"box","text":"rules do apply to a RIC with respect to items attributable to interests in qualified publicly-traded","page_number":77,"box":{"x":117,"y":320,"width":707,"height":12}},{"id":"58675a74-3f31-46fe-939f-b070060fefad","block_type":"box","text":"partnerships. The Fund’s investments in partnerships, including in qualified publicly-traded","page_number":77,"box":{"x":117,"y":335,"width":674,"height":12}},{"id":"7b0942de-0ee9-4f49-8691-ba32da8cec4a","block_type":"box","text":"partnerships, may result in the Fund being subject to state, local, or non-U.S. income, franchise or","page_number":77,"box":{"x":117,"y":351,"width":732,"height":12}},{"id":"20fc5cb1-e88b-4341-a151-eb8304dae0f0","block_type":"box","text":"withholding tax liabilities.","page_number":77,"box":{"x":116,"y":366,"width":189,"height":12}},{"id":"7b93eeac-34ca-431e-bcfc-418df4107570","block_type":"box","text":"Taxation of RICs.","page_number":77,"box":{"x":116,"y":397,"width":136,"height":10}},{"id":"8de163b8-ca82-48e2-a548-c366219303ae","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":77,"box":{"x":253,"y":397,"width":615,"height":12}},{"id":"8d9101d5-08be-4f93-99a3-b865a9ef9ef1","block_type":"box","text":"its taxable investment income and capital gains that it distributes to its shareholders, provided that it","page_number":77,"box":{"x":117,"y":413,"width":744,"height":12}},{"id":"d0dfeb59-783d-4b27-9eb9-a57d42035807","block_type":"box","text":"satisfies a minimum distribution requirement. To satisfy the minimum distribution requirement, the Fund","page_number":77,"box":{"x":116,"y":428,"width":772,"height":12}},{"id":"d1907ef8-87fd-4c89-af36-2f65f55c80b4","block_type":"box","text":"must distribute to its shareholders at least the sum of (i) 90% of its “investment company taxable","page_number":77,"box":{"x":117,"y":444,"width":720,"height":12}},{"id":"83d41244-3d1f-46ce-98bf-5fc0cc764bff","block_type":"box","text":"income” (","page_number":77,"box":{"x":117,"y":459,"width":68,"height":12}},{"id":"25243073-0ac1-405d-970c-b6453bff87d3","block_type":"box","text":"i.e.,","page_number":77,"box":{"x":186,"y":459,"width":25,"height":11}},{"id":"d6c0506a-ccb6-4abf-992f-120c8fe222b3","block_type":"box","text":"income other than the excess of its net realized long-term capital gain over its net","page_number":77,"box":{"x":213,"y":459,"width":614,"height":12}},{"id":"99148f42-e1fc-46fa-9793-af65a0e92984","block_type":"box","text":"realized short-term capital loss), plus or minus certain adjustments, and (ii) 90% of its net tax-exempt","page_number":77,"box":{"x":117,"y":475,"width":753,"height":12}},{"id":"f1f46ad1-1368-4d5c-b766-27ca356d0e00","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":490,"width":751,"height":12}},{"id":"cf99f947-5414-4a7c-a70b-453bda005ed2","block_type":"box","text":"taxable income or gains that it does not distribute to","page_number":77,"box":{"x":116,"y":506,"width":389,"height":12}},{"id":"1b676d32-6237-4006-acbb-d5d606010fd5","block_type":"box","text":"its shareholders. If the Fund fails to qualify for any","page_number":77,"box":{"x":506,"y":506,"width":375,"height":12}},{"id":"338575e6-9bba-458f-9cda-a9415bbd0f9b","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":521,"width":726,"height":12}},{"id":"6dfe1d2f-1683-43da-82d4-6948453b086c","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":537,"width":689,"height":12}},{"id":"a1298137-4bbc-4ff6-9bc9-2b70c86d24cc","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":552,"width":760,"height":12}},{"id":"0e77b25f-d472-4d91-acd7-62b43d72de11","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":568,"width":750,"height":12}},{"id":"03eb7338-97c1-4e74-b668-3327e1c6938b","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":583,"width":753,"height":12}},{"id":"f895f2c9-57ba-48f5-95ec-9ff6da7fd9af","block_type":"box","text":"shareholders generally should be eligible for the dividends received deduction. Although the Fund","page_number":77,"box":{"x":116,"y":599,"width":730,"height":12}},{"id":"11ec0734-e4f2-4939-b161-a2c7784c5669","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":614,"width":758,"height":12}},{"id":"dfe62bb0-caef-4ab2-8341-a4468f56c2a7","block_type":"box","text":"year, the Fund may decide to retain a portion of its incomes or gains. The Fund will be subject to U.S.","page_number":77,"box":{"x":116,"y":630,"width":759,"height":12}},{"id":"d170ec28-6004-4f70-baac-6989262750a6","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":645,"width":761,"height":12}},{"id":"51e90cda-16db-4ed5-a46d-2da87c16aaab","block_type":"box","text":"(or, in the case of the excise tax, substantially all)","page_number":77,"box":{"x":117,"y":661,"width":365,"height":12}},{"id":"50009602-b1b4-47b8-b594-cfb2f2d532f1","block_type":"box","text":"of such income or gains. In certain circumstances,","page_number":77,"box":{"x":488,"y":661,"width":371,"height":12}},{"id":"2e7f55ef-779c-4343-aec2-91d2fe56c3bb","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":676,"width":736,"height":12}},{"id":"6cd2d30f-7c1f-4383-9a46-2730366c4df5","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":692,"width":762,"height":12}},{"id":"bfe1f3cc-360a-42c8-89e3-bd76f34b1ff1","block_type":"box","text":"the Fund for the tax. If the Fund fails to qualify as","page_number":77,"box":{"x":116,"y":707,"width":364,"height":12}},{"id":"805e46c1-c4a9-4fad-b0ff-4f968d1fabb2","block_type":"box","text":"a RIC in any year, it must pay out its earnings and","page_number":77,"box":{"x":486,"y":707,"width":371,"height":12}},{"id":"951b3014-2ff9-4fc6-b510-ad67a5a56f60","block_type":"box","text":"profits accumulated in that year in order to qualify again as","page_number":77,"box":{"x":117,"y":723,"width":434,"height":12}},{"id":"b678da1a-7907-4a35-8d58-14c9ed342810","block_type":"box","text":"a RIC. If the Fund fails to qualify as a RIC","page_number":77,"box":{"x":557,"y":723,"width":309,"height":12}},{"id":"1d7b0665-2031-43ac-a113-055bbb1965d4","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":738,"width":728,"height":12}},{"id":"70a2e728-1bf0-469c-997e-a6412b441a34","block_type":"box","text":"gains with respect to certain of its assets (","page_number":77,"box":{"x":116,"y":754,"width":312,"height":12}},{"id":"75d27aaf-58d5-4b19-a74a-87bbc713e50e","block_type":"box","text":"i.e.,","page_number":77,"box":{"x":429,"y":754,"width":25,"height":11}},{"id":"b35f8040-2b07-47ab-a353-e041ad639962","block_type":"box","text":"the excess of the aggregate gains, including items of","page_number":77,"box":{"x":461,"y":754,"width":392,"height":12}},{"id":"d2859799-ef34-48be-8445-b41a1dd4ab27","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":769,"width":746,"height":12}},{"id":"9226c3d1-32d5-46de-9fab-0110ba19322e","block_type":"box","text":"had been liquidated) if it qualifies as a RIC in a subsequent year.","page_number":77,"box":{"x":117,"y":785,"width":478,"height":12}},{"id":"c4762ad4-6451-4f8b-bf8f-298a223a2e1d","block_type":"box","text":"Excise Tax.","page_number":77,"box":{"x":117,"y":816,"width":89,"height":9}},{"id":"54fd0eef-247c-4efa-a2de-fdb3c2aec888","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":212,"y":816,"width":657,"height":12}},{"id":"56dcba3c-7dae-464f-af39-239ad8c2f163","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":831,"width":764,"height":12}},{"id":"abe8aab1-525e-44c9-88fb-9e75b775b2b4","block_type":"box","text":"year plus at least 98.2% of its capital gain net","page_number":77,"box":{"x":116,"y":847,"width":342,"height":12}},{"id":"ba61c9b1-995e-411d-a6d3-3ca9ff82d8cc","block_type":"box","text":"income for the 12 months ended October 31 of such","page_number":77,"box":{"x":459,"y":847,"width":393,"height":9}},{"id":"cff82e2e-bc77-4665-9cd9-460435b6c1fd","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":862,"width":758,"height":12}},{"id":"b3bdaf32-13f9-4b76-954f-84ec65e42833","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":878,"width":728,"height":12}},{"id":"dad63fea-e859-40a7-b3c1-eeb6f2c76549","block_type":"box","text":"69","page_number":77,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"011c1a32-fb27-4b7d-8e12-3bebade2c645","block_type":"box","text":"NM1026U-6030748-77/260","page_number":77,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"17105668-6364-4924-9909-0f116cac1b20","block_type":"box","text":"addition, the minimum amounts that must be distributed in any year to avoid the excise tax will be","page_number":78,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"59854170-c306-45b4-9ea2-3ba29e17ca4e","block_type":"box","text":"increased or decreased to reflect any underdistribution or overdistribution, as the case may be, from","page_number":78,"box":{"x":117,"y":102,"width":746,"height":13}},{"id":"13284242-2820-43d8-ae76-52424e985e4d","block_type":"box","text":"the previous year.","page_number":78,"box":{"x":116,"y":118,"width":138,"height":12}},{"id":"a9d40948-ac42-4173-9407-9874a1b9dee3","block_type":"box","text":"Net Capital Loss Carryforwards.","page_number":78,"box":{"x":117,"y":146,"width":254,"height":12}},{"id":"dddce0fc-ba0b-4a34-ac0e-0a7c80d04560","block_type":"box","text":"Net capital loss carryforwards may be applied against any net","page_number":78,"box":{"x":372,"y":146,"width":468,"height":12}},{"id":"334a786d-82c5-4ce0-9be0-967030459334","block_type":"box","text":"realized capital gains in each succeeding year, until they have been reduced to zero.","page_number":78,"box":{"x":117,"y":162,"width":633,"height":12}},{"id":"a44fced0-ab45-44cd-bf7b-37f6cd55464f","block_type":"box","text":"In the event that the Fund were to experience an ownership change as defined under the Internal","page_number":78,"box":{"x":117,"y":190,"width":726,"height":12}},{"id":"4eb21e84-df78-4400-8d5c-5ce3be1415a7","block_type":"box","text":"Revenue Code, the loss carryforwards and other favorable tax attributes of the Fund, if any, may be","page_number":78,"box":{"x":117,"y":206,"width":745,"height":12}},{"id":"1f01afb4-7728-4b7c-b6f2-015d7975874c","block_type":"box","text":"subject to limitation.","page_number":78,"box":{"x":116,"y":221,"width":152,"height":12}},{"id":"79b18aeb-6f1b-4c77-a973-4b32c3a81604","block_type":"box","text":"Taxation of U.S. Shareholders.","page_number":78,"box":{"x":116,"y":250,"width":249,"height":9}},{"id":"d0e016ea-c008-41cb-b837-7c9d8a5ac440","block_type":"box","text":"Dividends and other distributions by the Fund are generally treated","page_number":78,"box":{"x":366,"y":250,"width":500,"height":12}},{"id":"b599d7a0-4afd-4902-9e71-47133409ce51","block_type":"box","text":"under the Internal Revenue Code as received by the shareholders at the time the dividend or","page_number":78,"box":{"x":117,"y":265,"width":694,"height":12}},{"id":"308f1dbd-032d-415f-bc1e-64d5fd395b63","block_type":"box","text":"distribution is made. However, any dividend or distribution declared by the Fund in October, November","page_number":78,"box":{"x":116,"y":281,"width":767,"height":12}},{"id":"8f1afa3d-4a3c-4d9b-8903-406a3ee4d35d","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":78,"box":{"x":116,"y":296,"width":765,"height":12}},{"id":"a4f0c1ea-bfbf-41d9-b98b-8e50df3c8671","block_type":"box","text":"month shall be deemed to have been received by each shareholder on December 31 of such calendar","page_number":78,"box":{"x":117,"y":312,"width":763,"height":12}},{"id":"cf0ef431-37d0-4f72-baa4-43dbafee1047","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":78,"box":{"x":116,"y":327,"width":749,"height":12}},{"id":"59e1fc5c-1302-4565-bdfb-438a0a1bde99","block_type":"box","text":"actually paid by the Fund during January of the following calendar year.","page_number":78,"box":{"x":116,"y":343,"width":536,"height":12}},{"id":"3b78a966-0233-4347-ba2d-b3db710c7dc6","block_type":"box","text":"The Fund intends to distribute annually to its shareholders substantially all of its investment company","page_number":78,"box":{"x":116,"y":371,"width":755,"height":12}},{"id":"abcd621f-d02f-48f1-9949-a6ac2f5b7a34","block_type":"box","text":"taxable income and any net realized long-term capital gains in excess of net realized short-term capital","page_number":78,"box":{"x":116,"y":386,"width":768,"height":13}},{"id":"4e9272bd-ffee-4475-b934-3225eee5905a","block_type":"box","text":"losses (including any capital loss carryovers). However, if the Fund retains for investment an amount","page_number":78,"box":{"x":117,"y":402,"width":751,"height":12}},{"id":"d1c65285-bb1f-4540-9406-f3057a127511","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":78,"box":{"x":116,"y":417,"width":749,"height":13}},{"id":"5f676d0d-5fe7-4260-b456-88a61f4189e0","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":78,"box":{"x":117,"y":433,"width":761,"height":12}},{"id":"4c8a83e7-1762-4162-8340-bc2ac9f0d2af","block_type":"box","text":"amount retained. In that event, unless the retained amount is deemed to be de minimis or the","page_number":78,"box":{"x":116,"y":449,"width":698,"height":11}},{"id":"f7a4f2d5-e84f-4e99-8a33-ab98dd36c99a","block_type":"box","text":"applicable tax is otherwise reimbursed by BFA or an affiliate, the Fund will generally designate such","page_number":78,"box":{"x":116,"y":464,"width":745,"height":12}},{"id":"235b77c3-abfb-4e3e-aafb-663aee9d3727","block_type":"box","text":"retained amounts as undistributed capital gains in a notice to its shareholders who (a) will be required","page_number":78,"box":{"x":117,"y":480,"width":757,"height":12}},{"id":"b33ff5a9-6390-4689-bda2-dbce354ab2bb","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":495,"width":674,"height":12}},{"id":"f4b98b16-65db-4d46-a3e9-09591fd615f4","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":511,"width":768,"height":12}},{"id":"e243ffba-abd6-4c37-854c-e993cce1bc0d","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":526,"width":766,"height":12}},{"id":"58a4eb14-f66d-47f8-82b7-aebc17ef9025","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":542,"width":721,"height":12}},{"id":"6d79d5d9-d315-4ed4-8972-86a0cce4fbb3","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":557,"width":759,"height":12}},{"id":"3334dd14-94e6-4f26-91f7-4d0d350481d8","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":573,"width":709,"height":12}},{"id":"b90c6951-7d05-4b24-a34f-a3e2bd8f2459","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":588,"width":761,"height":12}},{"id":"e34d8b45-abae-4a6f-839f-5faed0f85e06","block_type":"box","text":"pro rata","page_number":78,"box":{"x":116,"y":604,"width":57,"height":11}},{"id":"a4973a03-9744-4d77-9f53-043546968047","block_type":"box","text":"share of such taxes paid by the Fund upon filing appropriate returns or claims for refund with","page_number":78,"box":{"x":174,"y":604,"width":697,"height":12}},{"id":"c5e6c2c0-437e-4011-ba49-4bf0465b334d","block_type":"box","text":"the IRS.","page_number":78,"box":{"x":116,"y":619,"width":65,"height":10}},{"id":"1b4b7ce4-3b11-4fc2-9933-cf4237190067","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":647,"width":758,"height":13}},{"id":"8307c6b6-b2aa-4697-a837-73f2a3d39c59","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":663,"width":727,"height":12}},{"id":"7e0776c2-b7fe-4cf2-bb2c-32316fea14a3","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":678,"width":728,"height":13}},{"id":"f144c039-8b78-41a0-a428-7c30fa27d69a","block_type":"box","text":"short-term capital gains) from its current and accumulated earnings and profits (“regular dividends”) are","page_number":78,"box":{"x":116,"y":694,"width":767,"height":12}},{"id":"fb042072-2ddc-4dd8-8be6-f039b3e6cb34","block_type":"box","text":"generally subject to tax as ordinary income, subject to the discussion of qualified dividend income","page_number":78,"box":{"x":116,"y":709,"width":723,"height":13}},{"id":"b7e3d39b-ce27-47b5-aad6-846f1631224d","block_type":"box","text":"below. Long-term capital gains are eligible for taxation at a maximum rate of 15% or 20% for","page_number":78,"box":{"x":117,"y":725,"width":685,"height":12}},{"id":"fe581a06-84fb-41d9-9840-44a7cc5a8fd5","block_type":"box","text":"non-corporate shareholders, depending on whether their income exceeds certain threshold amounts.","page_number":78,"box":{"x":117,"y":741,"width":747,"height":12}},{"id":"698d5e7c-5d83-4e2c-b5df-d49977cc959e","block_type":"box","text":"If an individual receives a regular dividend qualifyi","page_number":78,"box":{"x":117,"y":769,"width":359,"height":12}},{"id":"cdcc433d-7dbf-456a-a967-3ba92aec7ffe","block_type":"box","text":"ng for the long-term capital gains rates and such","page_number":78,"box":{"x":478,"y":769,"width":350,"height":12}},{"id":"581db3bd-9364-40c2-a9f1-196f10fd0739","block_type":"box","text":"dividend constitutes an “extraordinary dividend,” and the individual subsequently recognizes a loss on the","page_number":78,"box":{"x":116,"y":784,"width":764,"height":12}},{"id":"590376f2-a14e-4b8d-be3c-c5e72e2369ef","block_type":"box","text":"sale or exchange of stock in respect of which","page_number":78,"box":{"x":116,"y":800,"width":326,"height":12}},{"id":"f66cf021-4ba3-475d-9946-531b1ea82e31","block_type":"box","text":"the extraordinary dividend was paid, then the loss will be","page_number":78,"box":{"x":448,"y":800,"width":410,"height":12}},{"id":"020012d0-8752-45e4-88e2-ec5d73da4461","block_type":"box","text":"long-term capital loss to the extent of such ex","page_number":78,"box":{"x":117,"y":815,"width":329,"height":12}},{"id":"7434e6f0-913b-4023-8de1-745108e7a451","block_type":"box","text":"traordinary dividend. An “extraordinary dividend” on","page_number":78,"box":{"x":446,"y":815,"width":373,"height":12}},{"id":"9dff0906-4fe9-427a-8a90-14788b666e18","block_type":"box","text":"common stock for this purpose is generally a dividend","page_number":78,"box":{"x":116,"y":831,"width":396,"height":12}},{"id":"c442443b-7964-4fd5-8d2f-4170a4127697","block_type":"box","text":"(i) in an amount greater than or equal to 10% of","page_number":78,"box":{"x":513,"y":831,"width":349,"height":12}},{"id":"58b540e8-a7fc-40a3-9b5b-e3e82a7ca7d6","block_type":"box","text":"the taxpayer’s tax basis (or trading value) in a","page_number":78,"box":{"x":116,"y":846,"width":336,"height":12}},{"id":"cc6ca2eb-12a2-4016-b15f-54258720c18f","block_type":"box","text":"share of stock, aggregating dividends with ex-dividend","page_number":78,"box":{"x":452,"y":846,"width":400,"height":12}},{"id":"d736b40d-0351-45bd-b0f3-a5b65742a551","block_type":"box","text":"dates within an 85-day period, or (ii)","page_number":78,"box":{"x":116,"y":862,"width":260,"height":12}},{"id":"3facee48-1483-4aa8-b61b-32b97b267032","block_type":"box","text":"in an amount greater than 20% of the taxpayer’s tax basis (or trading","page_number":78,"box":{"x":377,"y":862,"width":510,"height":12}},{"id":"4222af33-d0c2-4d6e-9d88-7243a248c37a","block_type":"box","text":"value) in a share of stock, aggregating dividends","page_number":78,"box":{"x":116,"y":877,"width":352,"height":12}},{"id":"4ce962fb-ab9f-4f3d-a11f-9a89b582ebbd","block_type":"box","text":"with ex-dividend dates within a 365-day period.","page_number":78,"box":{"x":469,"y":877,"width":351,"height":12}},{"id":"3a378bce-1c44-4db3-badd-94eaef061534","block_type":"box","text":"70","page_number":78,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"8383bd45-e5d9-4b3c-9fe4-1609e1e214a1","block_type":"box","text":"NM1026U-6030748-78/260","page_number":78,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"1483a904-af2e-4dfa-a043-293d682979e7","block_type":"box","text":"Distributions in excess of the Fund’s current and accumulated earnings and profits will, as to each","page_number":79,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"5a3c6717-11c6-442a-b0d7-25bf3e1ce8ba","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":79,"box":{"x":116,"y":102,"width":769,"height":12}},{"id":"71528849-3f88-46a1-834c-8438f7098695","block_type":"box","text":"the Fund, and as a capital gain thereafter (if the shareholder holds shares of the Fund as capital","page_number":79,"box":{"x":116,"y":118,"width":718,"height":12}},{"id":"c595577e-de18-4efc-9d89-87639a6e120c","block_type":"box","text":"assets). Distributions in excess of the Fund’s minimum distribution requirements, but not in excess of","page_number":79,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"e21ef8ef-4b3d-42ee-af40-e6f3ce541364","block_type":"box","text":"the Fund’s current and accumulated earnings and profits, will be taxable to shareholders and will not","page_number":79,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"1711a689-1557-4d52-a349-446514799269","block_type":"box","text":"constitute nontaxable returns of capital. Shareholders receiving dividends or distributions in the form of","page_number":79,"box":{"x":116,"y":165,"width":767,"height":12}},{"id":"69e72f1f-cb98-4095-970c-2b0cc4d99b5c","block_type":"box","text":"additional shares should be treated for U.S. federal income tax purposes as receiving a distribution in","page_number":79,"box":{"x":116,"y":180,"width":757,"height":12}},{"id":"bb0ffa60-c5f4-4de3-acb1-e977b15be186","block_type":"box","text":"an amount equal to the amount of money that the shareholders receiving cash dividends or","page_number":79,"box":{"x":116,"y":196,"width":682,"height":12}},{"id":"3ec419e9-abed-4604-a636-27122dd95630","block_type":"box","text":"distributions will receive and should have a cost basis in the shares received equal to such amount.","page_number":79,"box":{"x":116,"y":211,"width":742,"height":12}},{"id":"bf436f73-f38c-4db8-9520-4883ed884528","block_type":"box","text":"A 3.8% U.S. federal Medicare contribution tax is imposed on net investment income, including, but not","page_number":79,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"2b795da9-30e1-4051-92e3-10c51ee359fd","block_type":"box","text":"limited to, interest, dividends, and net gain from investments, of U.S. individuals with income exceeding","page_number":79,"box":{"x":117,"y":258,"width":770,"height":12}},{"id":"9047d9c0-bb5c-48fe-9e7e-ba359c2214b5","block_type":"box","text":"$200,000 (or $250,000 if married and filing jointly) and of estates and trusts.","page_number":79,"box":{"x":116,"y":272,"width":569,"height":13}},{"id":"5604d487-9fab-44b1-9945-405721080482","block_type":"box","text":"Investors considering buying shares just prior to a dividend or capital gain distribution should be aware","page_number":79,"box":{"x":117,"y":304,"width":765,"height":12}},{"id":"b523c7d5-9dfa-4ece-b608-6469096a9402","block_type":"box","text":"that, although the price of shares purchased at that time may reflect the amount of the forthcoming","page_number":79,"box":{"x":116,"y":320,"width":737,"height":12}},{"id":"9cc8ed5e-5792-4b9f-8486-95919228bbe5","block_type":"box","text":"distribution, such dividend or distribution may nevertheless be taxable to them. If the Fund is the holder","page_number":79,"box":{"x":116,"y":335,"width":770,"height":12}},{"id":"a1c57d10-7b10-42e8-a21e-a80e3f606af7","block_type":"box","text":"of record of any security on the record date for any dividends payable with respect to such security,","page_number":79,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"3aa42330-f252-433b-a043-3d31da6cdd1f","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":79,"box":{"x":116,"y":366,"width":741,"height":12}},{"id":"a9c30663-6142-40e5-bc58-05436c8b1e36","block_type":"box","text":"later of (a) the date such security became ex-dividend with respect to such dividends (","page_number":79,"box":{"x":117,"y":382,"width":638,"height":12}},{"id":"e60a4339-d016-4773-ba4f-bf742f79c700","block_type":"box","text":"i.e.","page_number":79,"box":{"x":756,"y":382,"width":21,"height":9}},{"id":"fbb4360e-3210-46bb-b69e-456fa5288fd0","block_type":"box","text":", the date on","page_number":79,"box":{"x":780,"y":382,"width":97,"height":11}},{"id":"ba99a2ab-87c8-497d-aac3-91aad40cfe32","block_type":"box","text":"which a buyer of the security would not be entitled to receive the declared, but unpaid, dividends); or","page_number":79,"box":{"x":116,"y":397,"width":750,"height":12}},{"id":"6b759908-9425-4c79-8985-cfa26ef41463","block_type":"box","text":"(b) the date the Fund acquired such security. Accordingly, in order to satisfy its income distribution","page_number":79,"box":{"x":117,"y":413,"width":733,"height":12}},{"id":"5c6f7715-2075-4164-833f-822a37ab8378","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":428,"width":697,"height":12}},{"id":"5ccd56bd-8af6-41dd-b86a-7852a6f4d984","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":444,"width":662,"height":12}},{"id":"8f38fcff-fd28-4ff8-88ae-e6694e7876d2","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":475,"width":754,"height":12}},{"id":"f37fe076-e0b5-4ec2-8208-462fe5e26c93","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":490,"width":771,"height":12}},{"id":"d8e0c200-2b59-4542-a49c-86b2dfb48571","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":506,"width":746,"height":12}},{"id":"58ba6635-3cc8-4586-a358-91442fd8da30","block_type":"box","text":"passive foreign investment company (“PFIC”) losses over post-October foreign currency and PFIC","page_number":79,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"509dc342-bec2-44c1-b96a-bcbafc3a9f3c","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":537,"width":765,"height":12}},{"id":"893a5672-1e14-44c4-8f5a-8439b7ba389e","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":552,"width":762,"height":12}},{"id":"3ff1daff-60ab-405d-be91-aea88d6dd79b","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":568,"width":749,"height":12}},{"id":"870b0248-54a6-43b8-b1e7-daa46cbf67d9","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":583,"width":755,"height":12}},{"id":"7ad8059f-79c9-4a8b-9842-be74d1835808","block_type":"box","text":"Sales of Shares.","page_number":79,"box":{"x":116,"y":614,"width":123,"height":10}},{"id":"cbf8cd80-721c-4a8d-9643-dada80d7e54f","block_type":"box","text":"Upon the sale or exchange of shares of t","page_number":79,"box":{"x":240,"y":614,"width":291,"height":12}},{"id":"173620b8-437c-48b5-9275-c05cb3844bc8","block_type":"box","text":"the Fund, a shareholder will realize a taxable","page_number":79,"box":{"x":530,"y":614,"width":323,"height":11}},{"id":"11210dea-12d8-41af-9c4c-de2f6101bd64","block_type":"box","text":"gain or loss equal to the difference between the amount","page_number":79,"box":{"x":116,"y":630,"width":400,"height":12}},{"id":"8a751454-e9cc-40ec-915a-2a0384bf49cb","block_type":"box","text":"realized and the shareholder’s basis in shares of","page_number":79,"box":{"x":517,"y":630,"width":348,"height":9}},{"id":"2f7417af-68fe-4a10-9055-853393785c11","block_type":"box","text":"the Fund. A redemption of shares by","page_number":79,"box":{"x":116,"y":645,"width":260,"height":12}},{"id":"054dc574-f62e-4a81-8441-28c7081d0e4a","block_type":"box","text":"y the Fund will be treated as a sale for this purpose. Such gain or loss","page_number":79,"box":{"x":376,"y":645,"width":492,"height":12}},{"id":"80d4ba6f-af1d-4f00-887f-29d87c855a9c","block_type":"box","text":"will be treated as capital gain or loss if the shares","page_number":79,"box":{"x":116,"y":661,"width":348,"height":12}},{"id":"445b5062-68f1-4df7-982f-07a0579a5f95","block_type":"box","text":"are capital assets in the shareholder’s hands and will be","page_number":79,"box":{"x":470,"y":661,"width":397,"height":12}},{"id":"48cfaebc-a211-484b-8d2c-6d73da574c2a","block_type":"box","text":"long-term capital gain or loss if the shares are hel","page_number":79,"box":{"x":117,"y":676,"width":348,"height":12}},{"id":"2a637979-63c6-4a97-86ee-3a4c17cf4278","block_type":"box","text":"d for more than one year and short-term capital gain or","page_number":79,"box":{"x":467,"y":676,"width":389,"height":12}},{"id":"c6c792f1-da64-4d63-ae6b-9f8b51059f76","block_type":"box","text":"loss if the shares are held for one year or less. An","page_number":79,"box":{"x":117,"y":692,"width":351,"height":12}},{"id":"a0eb830d-91db-4941-9411-2e59196fccc9","block_type":"box","text":"y loss realized on a sale or exchange will be disallowed to","page_number":79,"box":{"x":469,"y":692,"width":410,"height":12}},{"id":"819da0b2-6010-4922-aff3-8c1599f5c1a2","block_type":"box","text":"the extent the shares disposed of","page_number":79,"box":{"x":116,"y":707,"width":238,"height":12}},{"id":"8ebfacc0-5e3e-4ed7-99b3-8aa276fef318","block_type":"box","text":"are replaced, including replacement","page_number":79,"box":{"x":358,"y":707,"width":254,"height":12}},{"id":"04947f7a-38cf-4c0a-aa7f-3990dc9d4672","block_type":"box","text":"through the reinvesting of dividends","page_number":79,"box":{"x":616,"y":707,"width":253,"height":12}},{"id":"a83a49f3-cd26-4fce-b2cf-15c9cfd3bfa7","block_type":"box","text":"or capital gains distributions, or by an option or contra","page_number":79,"box":{"x":116,"y":723,"width":380,"height":12}},{"id":"bfc31407-78de-40c1-bc8d-9a5916a7426b","block_type":"box","text":"ct to acquire substantially identical shares, within a","page_number":79,"box":{"x":497,"y":723,"width":358,"height":12}},{"id":"d48bff30-6cdb-4521-a070-74b0db4c751a","block_type":"box","text":"61-day period beginning 30 days before and ending 30 days afte","page_number":79,"box":{"x":116,"y":738,"width":459,"height":12}},{"id":"5866d491-8cc9-4911-9b6d-a97ce4e8e6c7","block_type":"box","text":"r the disposition of the shares. In such a","page_number":79,"box":{"x":577,"y":738,"width":282,"height":12}},{"id":"106a9299-fc88-49cc-99c4-43c6a0a307ba","block_type":"box","text":"case, the basis of the shares acquired will be increased to","page_number":79,"box":{"x":116,"y":754,"width":411,"height":12}},{"id":"cac26006-c28f-4976-b701-aba4cec526ff","block_type":"box","text":"reflect the disallowed loss. Any loss realized by a","page_number":79,"box":{"x":533,"y":754,"width":346,"height":12}},{"id":"cb8bbd26-0958-4c56-aa7e-83a7e01f3e39","block_type":"box","text":"shareholder on the sale of Fund shares held by the","page_number":79,"box":{"x":116,"y":769,"width":363,"height":12}},{"id":"9e8981b6-495b-4b44-9728-0b34ca7baeaa","block_type":"box","text":"shareholder for six months or less will be treated for","page_number":79,"box":{"x":484,"y":769,"width":367,"height":10}},{"id":"0702fb55-d51e-4233-ae35-40eb87f79398","block_type":"box","text":"U.S. federal income tax purposes as a long-term capita","page_number":79,"box":{"x":117,"y":785,"width":391,"height":12}},{"id":"29614b8b-da84-42e6-ab04-8e86b9560f2f","block_type":"box","text":"l loss to the extent of any distributions or deemed","page_number":79,"box":{"x":509,"y":785,"width":347,"height":12}},{"id":"4b03c2db-29d8-4049-bed1-3cb25bda7328","block_type":"box","text":"distributions of long-term capital gains received by","page_number":79,"box":{"x":116,"y":800,"width":356,"height":12}},{"id":"f6962d6c-df51-47e7-ad68-b3f77449092b","block_type":"box","text":"the shareholder with respect to such share. The","page_number":79,"box":{"x":476,"y":800,"width":340,"height":12}},{"id":"aafbc77d-b690-4818-a738-97db13729105","block_type":"box","text":"Medicare contribution tax described above will apply to the sale of Fund shares.","page_number":79,"box":{"x":117,"y":816,"width":564,"height":12}},{"id":"6ca803a8-d840-4c01-8d9f-4002fec8f60c","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":847,"width":763,"height":12}},{"id":"1164a623-9a3f-4b1c-a057-c684812f9f70","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":862,"width":761,"height":12}},{"id":"f876f416-bedd-4671-b4cf-c4996f32f967","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":878,"width":732,"height":12}},{"id":"d190eb10-5ac8-44b7-a19f-7e3d7555b254","block_type":"box","text":"e.g.","page_number":79,"box":{"x":849,"y":880,"width":26,"height":10}},{"id":"d1257ff2-a6a3-42ec-b3de-119b7cf37c45","block_type":"box","text":",","page_number":79,"box":{"x":878,"y":886,"width":8,"height":3}},{"id":"75092c6f-08bd-4cdb-b548-2f52f7f86a38","block_type":"box","text":"71","page_number":79,"box":{"x":491,"y":909,"width":15,"height":9}},{"id":"8dcc36d6-766b-4d2f-acbe-7ed0c82328b2","block_type":"box","text":"NM1026U-6030748-79/260","page_number":79,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ac2afd9e-48cd-47dd-af07-5ce70a9e7e57","block_type":"box","text":"an exchange privilege), the original sales charge will not be taken into account in computing gain or","page_number":80,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"a6550445-7678-428c-a14f-e4224f62b895","block_type":"box","text":"loss on the disposition of the original shares to the extent the subsequent sales charge is reduced.","page_number":80,"box":{"x":117,"y":102,"width":734,"height":13}},{"id":"5ad128a8-f94b-45c4-b050-0dd5aafb448b","block_type":"box","text":"Instead, the disregarded portion of the original sales charge will be added to the tax basis of the newly","page_number":80,"box":{"x":117,"y":118,"width":762,"height":12}},{"id":"913f47fa-3419-421a-8c64-348c40b55de6","block_type":"box","text":"acquired shares. Furthermore, the same rule also applies to a disposition of the newly acquired shares","page_number":80,"box":{"x":116,"y":134,"width":767,"height":12}},{"id":"f70e8d88-ccbb-4a2e-99e9-bdc0b5722c21","block_type":"box","text":"made within 90 days of the second acquisition. This provision prevents shareholders from immediately","page_number":80,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"813bebab-f250-4c30-ae05-2e5c897a2710","block_type":"box","text":"deducting the sales charge by shifting their investments within a family of mutual funds.","page_number":80,"box":{"x":116,"y":165,"width":653,"height":12}},{"id":"53f5977c-2695-42de-ba34-4f58fd8276fe","block_type":"box","text":"Backup Withholding.","page_number":80,"box":{"x":117,"y":196,"width":165,"height":12}},{"id":"80c9b68c-2cfa-4250-a0e4-5f340f790c08","block_type":"box","text":"In certain cases, the Fund will be required to withhold at a 24% rate and remit to","page_number":80,"box":{"x":283,"y":196,"width":605,"height":11}},{"id":"5dd63ea3-cdfc-4127-82dc-c8086b3b64a7","block_type":"box","text":"the U.S. Treasury such amounts withheld from any distributions paid to a shareholder who: (i) has","page_number":80,"box":{"x":116,"y":211,"width":731,"height":12}},{"id":"66531e01-f688-4df0-ac4b-b04899930e19","block_type":"box","text":"failed to provide a correct taxpayer identification number; (ii) is subject to backup withholding by the","page_number":80,"box":{"x":116,"y":227,"width":743,"height":12}},{"id":"21ff054b-c126-49c0-9cc7-7790a53347e5","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":80,"box":{"x":117,"y":242,"width":759,"height":12}},{"id":"5b0ba02c-01b7-4eb5-9a16-74c2ff00ed46","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":80,"box":{"x":117,"y":258,"width":745,"height":12}},{"id":"2fcda6d7-4d5c-422b-a88e-aa802c02f421","block_type":"box","text":"withholding is not an additional tax and any amount withheld may be credited against a shareholder’s","page_number":80,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"227894ef-9f51-451c-9d8b-b10d6939399e","block_type":"box","text":"U.S. federal income tax liability.","page_number":80,"box":{"x":117,"y":289,"width":238,"height":12}},{"id":"e038b2a0-67c1-477b-a201-07971e8b3ab3","block_type":"box","text":"Sections 351 and 362.","page_number":80,"box":{"x":116,"y":320,"width":173,"height":9}},{"id":"c766224b-e9a4-4f93-ade7-a82974a1f075","block_type":"box","text":"The Trust, on behalf of the Fund, has the right to reject an order to create","page_number":80,"box":{"x":291,"y":320,"width":554,"height":12}},{"id":"6298d1e8-a880-4bef-875a-e3ef47d329ff","block_type":"box","text":"Creation Units of the Fund if the Authorized Participant (or group of Authorized Participants) would,","page_number":80,"box":{"x":117,"y":335,"width":739,"height":12}},{"id":"1cdf6c39-8b6a-464a-a223-9feef98b47a8","block_type":"box","text":"upon obtaining the Creation Units, own 80% or more of the outstanding shares of the Fund and if,","page_number":80,"box":{"x":117,"y":351,"width":729,"height":12}},{"id":"1d6cdd78-ec44-4768-a6c4-02a0a8c2c1f5","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":80,"box":{"x":117,"y":366,"width":749,"height":12}},{"id":"21da8bd9-bba4-496c-915e-53c9e77d35aa","block_type":"box","text":"Deposit Securities different from the market value of such Deposit Securities on the date of deposit. If","page_number":80,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"810bcb61-875f-459a-90a1-73872da2f563","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":397,"width":763,"height":12}},{"id":"7242d239-1d2b-4a84-9ddd-559a9776db70","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":413,"width":755,"height":12}},{"id":"6c6dafc7-36ed-462e-808e-5712d0912ff1","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":428,"width":700,"height":12}},{"id":"55d86edb-f78b-4422-9dde-61630c043419","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":444,"width":686,"height":12}},{"id":"215455b9-d3d2-4f99-8d07-0be3917c3219","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":459,"width":757,"height":12}},{"id":"673ed1e8-8948-44f9-acec-c78661fca18f","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":475,"width":756,"height":12}},{"id":"9a2413d5-7bac-4dcf-9054-ef12418baba9","block_type":"box","text":"share ownership for purposes of the 80% determination.","page_number":80,"box":{"x":116,"y":490,"width":423,"height":12}},{"id":"9da24036-f55e-4ae5-b03b-66814dfe566a","block_type":"box","text":"Taxation of Certain Derivatives.","page_number":80,"box":{"x":116,"y":521,"width":256,"height":10}},{"id":"307bbce6-b641-4043-afc1-1199888a11c0","block_type":"box","text":"The Fund’s transactions in zero coupon securities, non-U.S.","page_number":80,"box":{"x":373,"y":521,"width":450,"height":12}},{"id":"9b9698b1-e18e-479f-8019-a2799ddcc669","block_type":"box","text":"currencies, forward contracts, options and futures contracts (including options and futures contracts on","page_number":80,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"fe14a504-d465-4782-b908-2409cd30bf73","block_type":"box","text":"non-U.S. currencies), to the extent permitted, will be subject to special provisions of the Internal","page_number":80,"box":{"x":117,"y":552,"width":713,"height":12}},{"id":"f170479e-167b-41f2-9ecd-355e4da7b0db","block_type":"box","text":"Revenue Code (including provisions relating to “hedging transactions” and “straddles”) that, among","page_number":80,"box":{"x":117,"y":568,"width":739,"height":12}},{"id":"a4408180-5e8b-4e3e-9069-a078825b3d39","block_type":"box","text":"other consequences, may affect the character of gains and losses realized by the Fund (","page_number":80,"box":{"x":116,"y":583,"width":657,"height":12}},{"id":"b6a7f836-36a0-4a30-9156-bfcb8449a266","block_type":"box","text":"i.e.","page_number":80,"box":{"x":774,"y":583,"width":20,"height":10}},{"id":"4ae340a4-5218-4bc9-80e5-d741bf59652a","block_type":"box","text":", may affect","page_number":80,"box":{"x":798,"y":583,"width":90,"height":12}},{"id":"0e8add66-5dd6-4830-8815-f34b745e5723","block_type":"box","text":"whether gains or losses are ordinary or capital), accelerate recognition of income to the Fund and defer","page_number":80,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"4ddb325b-9c34-48a3-b537-22acd469095f","block_type":"box","text":"Fund losses. These rules could therefore affect the character, amount and timing of distributions to","page_number":80,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"c4dbd041-76a9-42ea-ad5d-a464ee0e7d69","block_type":"box","text":"shareholders. These provisions also (a) may require the Fund to mark-to-market certain types of the","page_number":80,"box":{"x":116,"y":630,"width":749,"height":12}},{"id":"24831907-2a91-4712-b8ed-f91258068600","block_type":"box","text":"positions in its portfolio (","page_number":80,"box":{"x":117,"y":645,"width":179,"height":12}},{"id":"acc17f03-cd4b-4741-aaeb-256d8556bf26","block_type":"box","text":"i.e.","page_number":80,"box":{"x":297,"y":645,"width":20,"height":10}},{"id":"0340291d-e634-4082-9014-2d732cfa18ef","block_type":"box","text":", treat them as if they were closed out at the end of each year) and (b) may","page_number":80,"box":{"x":320,"y":645,"width":561,"height":12}},{"id":"2912fe38-8f85-4384-a929-891fda7c3a25","block_type":"box","text":"cause the Fund to recognize income without receiving cash with which to pay dividends or make","page_number":80,"box":{"x":116,"y":661,"width":715,"height":12}},{"id":"3e6c3a90-1052-4808-bd06-c011d05bbe80","block_type":"box","text":"distributions in amounts necessary to satisfy the distribution requirements for avoiding income and","page_number":80,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"85f7b312-c0b0-4690-9502-565a9a028af2","block_type":"box","text":"excise taxes. The Fund will monitor its transactions, will make the appropriate tax elections and will","page_number":80,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"71238c01-6ae8-40c3-b840-b68aeba3b3ce","block_type":"box","text":"make the appropriate entries in its books and records when it acquires any zero coupon security,","page_number":80,"box":{"x":117,"y":707,"width":717,"height":12}},{"id":"0644b095-bea2-471f-9de6-ae7d1a4afff5","block_type":"box","text":"non-U.S. currency, forward contract, option, futures contract or hedged investment in order to mitigate","page_number":80,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"269a11b6-9467-4db0-9bb0-0b7fe12efd39","block_type":"box","text":"the effect of these rules and prevent disqualification of the Fund as a RIC.","page_number":80,"box":{"x":116,"y":738,"width":547,"height":12}},{"id":"1b54bcff-fef0-43e1-a110-5fd637e5c64a","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":769,"width":730,"height":12}},{"id":"6486ae2c-a590-4694-bdd2-73693dd9803f","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":785,"width":757,"height":12}},{"id":"90a98c4f-c5ac-4f6c-825a-42c3c2893b3e","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":800,"width":746,"height":12}},{"id":"17044c7c-355b-48e7-9266-93843782c00b","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":816,"width":758,"height":12}},{"id":"e3d69bc3-1486-412b-9657-6aa6e12ce56d","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":831,"width":728,"height":12}},{"id":"dc7c3f75-52d9-4e85-9eef-bef4e17d8f28","block_type":"box","text":"value at the end of the taxable year. The resulting gain","page_number":80,"box":{"x":116,"y":847,"width":411,"height":12}},{"id":"15dbde41-cdfd-48d1-9abf-4115f27c4f17","block_type":"box","text":"or loss will be combined with any gain or loss","page_number":80,"box":{"x":527,"y":847,"width":340,"height":12}},{"id":"574cae7d-37ec-43e5-a2ca-e83c5a710537","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":862,"width":764,"height":12}},{"id":"5e4d7e8b-e0b5-47ea-8dde-14098c1c32c3","block_type":"box","text":"such positions were held as capital assets and were not","page_number":80,"box":{"x":116,"y":878,"width":420,"height":12}},{"id":"c9a32eb8-bff8-4d35-b785-91900e421afe","block_type":"box","text":"part of a “hedging transaction” nor part of a","page_number":80,"box":{"x":537,"y":878,"width":324,"height":12}},{"id":"43c8a414-d1c5-4405-a3c7-9c0d2019673d","block_type":"box","text":"72","page_number":80,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"c220eb52-a7fe-451f-9f4b-e623593bacb1","block_type":"box","text":"NM1026U-6030748-80/260","page_number":80,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"a99fbe00-e901-4617-a304-11238d97f146","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":81,"box":{"x":116,"y":87,"width":741,"height":12}},{"id":"12193988-2461-4599-9b61-d1aac50226b6","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":81,"box":{"x":116,"y":102,"width":759,"height":13}},{"id":"5fc792c5-67d1-4309-a1fe-afcb8494a9a6","block_type":"box","text":"of time the positions were actually held by the Fund.","page_number":81,"box":{"x":116,"y":118,"width":392,"height":12}},{"id":"ef2a063e-5674-4836-9042-25ba084afb2b","block_type":"box","text":"As a result of entering into swap contracts, the Fund may make or receive periodic net payments. The","page_number":81,"box":{"x":116,"y":145,"width":762,"height":12}},{"id":"2e8587ab-fff8-48b5-a782-ad62379f4cf4","block_type":"box","text":"Fund may also make or receive a payment when a swap is terminated prior to maturity through an","page_number":81,"box":{"x":117,"y":161,"width":732,"height":12}},{"id":"066ba149-1d6b-4569-b690-5bee4cb40522","block_type":"box","text":"assignment of the swap or other closing transaction. Periodic net payments will generally constitute","page_number":81,"box":{"x":116,"y":176,"width":742,"height":12}},{"id":"d9b05774-0bb4-4dc2-b083-e973649b389d","block_type":"box","text":"ordinary income or deductions, while termination of a swap will generally result in capital gain or loss","page_number":81,"box":{"x":116,"y":192,"width":751,"height":12}},{"id":"f0c78584-a40d-495a-8f75-d10596ad0da9","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":81,"box":{"x":117,"y":207,"width":747,"height":12}},{"id":"50c78af3-117a-46c4-a6a0-14a61e172a67","block_type":"box","text":"one year). With respect to certain types of swaps, the Fund may be required to currently recognize","page_number":81,"box":{"x":116,"y":223,"width":736,"height":12}},{"id":"cafe2494-f27f-45bb-9ece-7b6e339c6284","block_type":"box","text":"income or loss with respect to future payments on such swaps or may elect under certain","page_number":81,"box":{"x":117,"y":238,"width":666,"height":12}},{"id":"19fe0e64-551b-4fde-9feb-799e98b3c688","block_type":"box","text":"circumstances to mark such swaps to market annually for tax purposes as ordinary income or loss.","page_number":81,"box":{"x":116,"y":254,"width":739,"height":12}},{"id":"75df323d-d388-4215-b008-768500259440","block_type":"box","text":"Qualified Dividend Income and Qualified REIT Dividends.","page_number":81,"box":{"x":116,"y":281,"width":454,"height":10}},{"id":"1bb6e056-be18-40ac-ba60-729ea7d4da79","block_type":"box","text":"For non-corporate shareholders,","page_number":81,"box":{"x":571,"y":281,"width":251,"height":12}},{"id":"8d60ba43-99eb-48f6-9cbf-c712f7d89d1d","block_type":"box","text":"distributions by the Fund of investment company taxable income (including any short-term capital","page_number":81,"box":{"x":116,"y":296,"width":727,"height":12}},{"id":"93eef723-b5d3-4786-8e29-fe0793b8bd58","block_type":"box","text":"gains), whether received in cash or shares, will be taxable either as ordinary income or as qualified","page_number":81,"box":{"x":116,"y":312,"width":739,"height":12}},{"id":"4579b4f4-c7e2-47b9-a1dd-3f00ac8a5f3d","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":81,"box":{"x":116,"y":327,"width":735,"height":12}},{"id":"89e92119-20c9-4644-9d16-3db5b4c6b547","block_type":"box","text":"receives qualified dividend income on the securities it holds and the Fund reports the distribution as","page_number":81,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"5b1cdde0-71b5-4f85-b7ec-48f345aa373f","block_type":"box","text":"qualified dividend income. Qualified dividend income is, in general, dividend income from taxable U.S.","page_number":81,"box":{"x":116,"y":358,"width":761,"height":12}},{"id":"9b67fce6-75e1-45c7-af88-e7ace3667631","block_type":"box","text":"corporations and certain non-U.S. corporations (","page_number":81,"box":{"x":116,"y":374,"width":358,"height":12}},{"id":"a33c5e8c-f6c9-49b4-9bbe-0ce79416d240","block_type":"box","text":"e.g.","page_number":81,"box":{"x":476,"y":376,"width":25,"height":10}},{"id":"4c8481f2-83f9-47f4-9396-2e23fb579f8b","block_type":"box","text":", non-U.S. corporations that are not PFICs and","page_number":81,"box":{"x":505,"y":374,"width":350,"height":12}},{"id":"6b26362a-0a18-46b8-899a-efdffd603997","block_type":"box","text":"which are incorporated in a possession of the U.S. or in certain countries with a comprehensive tax","page_number":81,"box":{"x":116,"y":389,"width":740,"height":12}},{"id":"5ed0d7c4-48a2-4606-99c1-fe7da88cb840","block_type":"box","text":"treaty with the U.S., or the stock of which is readily tradable on an established securities market in the","page_number":81,"box":{"x":116,"y":405,"width":761,"height":12}},{"id":"45be40bf-d369-4b03-92ab-3c3648147db1","block_type":"box","text":"U.S. (where the dividends are paid with respect to such stock)). Substitute payments received by the","page_number":81,"box":{"x":117,"y":420,"width":751,"height":12}},{"id":"f5ef6b09-4e61-4d2e-a246-5ab7ea565515","block_type":"box","text":"Fund with respect to dividends paid on securities lent out will not be qualified dividend income.","page_number":81,"box":{"x":117,"y":436,"width":704,"height":12}},{"id":"09ccdc0d-33ff-4d8e-90e3-30abfe4555c0","block_type":"box","text":"A dividend from the Fund will not be treated as qualified dividend income to the extent that: (i) the","page_number":81,"box":{"x":116,"y":463,"width":728,"height":12}},{"id":"ea131612-8af3-49dc-989b-1b5e92e0fbbb","block_type":"box","text":"shareholder has not held the shares on which the dividend was paid for 61 days during the 121-day","page_number":81,"box":{"x":116,"y":478,"width":743,"height":13}},{"id":"a584659c-53d3-4977-a714-d49a66ac550a","block_type":"box","text":"period that begins on the date that is 60 days before the date on which the shares become ex-dividend","page_number":81,"box":{"x":117,"y":494,"width":767,"height":12}},{"id":"42e9ee62-cbe3-4783-930b-74f5798e57cb","block_type":"box","text":"with respect to such dividend or the Fund fails to satisfy those holding period requirements with respect","page_number":81,"box":{"x":116,"y":509,"width":771,"height":13}},{"id":"1712fed5-0125-436f-b0c1-a768a6ed4e58","block_type":"box","text":"to the securities it holds that paid the dividends distributed to the shareholder (or, in the case of certain","page_number":81,"box":{"x":116,"y":525,"width":766,"height":12}},{"id":"4d3f6794-f7d8-4992-b370-cc21eed0d00e","block_type":"box","text":"preferred stocks, the holding requirement of 91 days during the 181-day period beginning on the date","page_number":81,"box":{"x":117,"y":540,"width":756,"height":13}},{"id":"c3f9ba30-3c02-47d1-af2a-265df703dd27","block_type":"box","text":"that is 90 days before the date on which the stock becomes ex-dividend with respect to such dividend);","page_number":81,"box":{"x":116,"y":556,"width":769,"height":12}},{"id":"71409110-afca-4475-9303-afc04a1c0117","block_type":"box","text":"(ii) the Fund or the shareholder is under an obligation (whether pursuant to a short sale or otherwise) to","page_number":81,"box":{"x":117,"y":571,"width":771,"height":13}},{"id":"f185c69a-1dbd-4557-88f9-68a3e94329d1","block_type":"box","text":"make related payments with respect to substantially similar or related property; or (iii) the shareholder","page_number":81,"box":{"x":117,"y":587,"width":758,"height":12}},{"id":"88523244-ad74-4322-b404-52a4d755f737","block_type":"box","text":"elects to treat such dividend as investment income under Section 163(d)(4)(B) of the Internal Revenue","page_number":81,"box":{"x":116,"y":602,"width":765,"height":13}},{"id":"de58e3f7-88fc-4303-94a7-f44d74454f5d","block_type":"box","text":"Code.","page_number":81,"box":{"x":117,"y":618,"width":48,"height":10}},{"id":"3ac34a3e-6f66-4da9-8c4a-6fdfb8a317ca","block_type":"box","text":"Dividends received by the Fund from a REIT or another","page_number":81,"box":{"x":117,"y":645,"width":394,"height":12}},{"id":"00d0ee1c-ead1-4b36-b00f-b12db2a5cad6","block_type":"box","text":"r RIC may be treated as qualified dividend income","page_number":81,"box":{"x":510,"y":645,"width":356,"height":12}},{"id":"9f353dfd-1f8c-4f28-9205-781e1f41cba4","block_type":"box","text":"only to the extent the dividend distributions are attri","page_number":81,"box":{"x":116,"y":661,"width":360,"height":12}},{"id":"72f4963a-8657-42ea-be46-81b0b683f6b5","block_type":"box","text":"butable to qualified dividend income received by such","page_number":81,"box":{"x":478,"y":661,"width":379,"height":12}},{"id":"b469abf9-3e7c-4dbd-889b-e33d2ab86bb0","block_type":"box","text":"REIT or other RIC. It is expected that dividends","page_number":81,"box":{"x":117,"y":676,"width":334,"height":12}},{"id":"db4a2049-aaee-44e8-81a4-cce2b681af06","block_type":"box","text":"received by the Fund from a REIT and distributed to a","page_number":81,"box":{"x":457,"y":676,"width":381,"height":12}},{"id":"74817b20-6774-4560-aef0-26164abbc7db","block_type":"box","text":"shareholder generally will be taxable to the shareholder","page_number":81,"box":{"x":116,"y":692,"width":394,"height":12}},{"id":"1988fd1d-54ab-4246-a168-bb0bd21fa257","block_type":"box","text":"as ordinary income. However, a non-corporate","page_number":81,"box":{"x":514,"y":692,"width":331,"height":12}},{"id":"3be21549-703a-4f9b-9391-0f52cdada90b","block_type":"box","text":"taxpayer who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for","page_number":81,"box":{"x":116,"y":707,"width":724,"height":12}},{"id":"dc6250e7-b17f-44f9-a842-cd3a56d39f43","block_type":"box","text":"ordinary REIT dividends, and a RIC may report dividends as","page_number":81,"box":{"x":116,"y":723,"width":428,"height":12}},{"id":"94eaf329-af5c-4850-b7c5-e440dbbb0735","block_type":"box","text":"eligible for this deduction to the extent the","page_number":81,"box":{"x":549,"y":723,"width":295,"height":12}},{"id":"0b0696b5-3432-43c6-8d4d-d74126710d3e","block_type":"box","text":"RIC’s income is derived from ordinary REIT dividends","page_number":81,"box":{"x":117,"y":738,"width":380,"height":12}},{"id":"0a158d83-7a5d-4fbb-9980-9d138dce884f","block_type":"box","text":"(reduced by allocable RIC expenses). A shareholder","page_number":81,"box":{"x":503,"y":738,"width":373,"height":12}},{"id":"d8bff66c-80a0-40c3-8956-bc3dc727c669","block_type":"box","text":"may treat the dividends as such provided the RI","page_number":81,"box":{"x":117,"y":754,"width":337,"height":12}},{"id":"345fa9a0-9b4a-4014-a75b-77cd20e20400","block_type":"box","text":"C and the shareholder satisfy applicable holding period","page_number":81,"box":{"x":456,"y":754,"width":390,"height":12}},{"id":"3ad4e2d3-83a9-4018-8170-06ae1b39c069","block_type":"box","text":"requirements. A dividend from the Fund will not be treated","page_number":81,"box":{"x":117,"y":769,"width":411,"height":12}},{"id":"e29ed745-ced4-402a-b550-41515e1026f6","block_type":"box","text":"as qualified REIT dividend income to the extent","page_number":81,"box":{"x":533,"y":769,"width":336,"height":12}},{"id":"d8d01f55-86b4-4bd9-ad80-49dc2f52b6ab","block_type":"box","text":"that: (i) the shareholder has not held the shares on","page_number":81,"box":{"x":116,"y":785,"width":359,"height":12}},{"id":"bfe1cc2c-3215-4d77-b3a2-b9294b7f8d78","block_type":"box","text":"which the dividend was paid for at least 46 days during","page_number":81,"box":{"x":480,"y":785,"width":388,"height":12}},{"id":"6177ce80-f140-411a-b7de-86728bbedbc3","block_type":"box","text":"the 91-day period that begins on t","page_number":81,"box":{"x":116,"y":800,"width":239,"height":12}},{"id":"e301520e-78e2-4ed7-9e27-fe9ee160d4ec","block_type":"box","text":"he date that is 45 days before the","page_number":81,"box":{"x":356,"y":800,"width":237,"height":12}},{"id":"e659b9a8-f785-4bad-af17-d72eee91b9fe","block_type":"box","text":"date on which the shares become","page_number":81,"box":{"x":599,"y":800,"width":240,"height":10}},{"id":"840c8417-c883-47c3-8d69-151403b6d87e","block_type":"box","text":"ex-dividend with respect to such dividend or the Fund fa","page_number":81,"box":{"x":116,"y":816,"width":397,"height":12}},{"id":"9db8d2e2-590b-461c-8d7a-0c3c8ef8e43b","block_type":"box","text":"ils to satisfy those holding period requirements with","page_number":81,"box":{"x":514,"y":816,"width":361,"height":12}},{"id":"d5c2945d-7de3-4265-a693-cccdb695838e","block_type":"box","text":"respect to the share of REIT stock it holds that paid t","page_number":81,"box":{"x":117,"y":831,"width":368,"height":12}},{"id":"b4b610cb-e7e1-4b3e-840f-07b184859adb","block_type":"box","text":"the dividends distributed to the shareholder; or (ii) the","page_number":81,"box":{"x":484,"y":831,"width":384,"height":12}},{"id":"c6cc0c82-6a97-4dcc-a680-e5945c0919c3","block_type":"box","text":"Fund or the shareholder is under an obligation (whether purs","page_number":81,"box":{"x":117,"y":847,"width":423,"height":12}},{"id":"efd01d77-56c0-455c-ac74-101345189dd0","block_type":"box","text":"rsuant to a short sale or otherwise) to make","page_number":81,"box":{"x":540,"y":847,"width":308,"height":12}},{"id":"a5b790e1-ea67-4ae5-9b7c-c452561fc92e","block_type":"box","text":"related payments with respect to substantially similar","page_number":81,"box":{"x":117,"y":862,"width":378,"height":12}},{"id":"9c850266-4d86-45ad-affe-1e504d848f1c","block_type":"box","text":"or related property. Distributions by the Fund of its net","page_number":81,"box":{"x":495,"y":862,"width":387,"height":12}},{"id":"e43c2490-d0e7-4a3c-8425-8abd58e47315","block_type":"box","text":"short-term capital gains will be taxable as ordinary income.","page_number":81,"box":{"x":116,"y":878,"width":421,"height":12}},{"id":"892de2f6-b4bd-47c2-9155-10f99c4d1227","block_type":"box","text":"73","page_number":81,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"83508061-2329-4314-8cac-42e62fd52801","block_type":"box","text":"NM1026U-6030748-81/260","page_number":81,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"3158e8c8-dfca-4834-93e5-fc79621f914c","block_type":"box","text":"Corporate Dividends Received Deduction.","page_number":82,"box":{"x":116,"y":87,"width":334,"height":12}},{"id":"00a33b3e-26ad-4447-bd6f-76b8d940ea59","block_type":"box","text":"For corporate shareholders, dividends paid by the Fund","page_number":82,"box":{"x":451,"y":87,"width":423,"height":12}},{"id":"01fd426a-9af9-4852-8824-59a8813eed62","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":82,"box":{"x":116,"y":102,"width":759,"height":13}},{"id":"c7bbb3b0-429d-4328-afa7-93b30dddd8df","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":118,"width":697,"height":12}},{"id":"f3a73604-424c-40e9-8d7c-3021e9869405","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":134,"width":732,"height":12}},{"id":"0e3fc147-5572-47c6-a58e-6c41529fbac8","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":149,"width":768,"height":12}},{"id":"11c3ad48-1b16-4836-94bf-7430cfcb25ad","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":165,"width":766,"height":12}},{"id":"cba19b1b-c57b-49aa-93ac-74024b4805e3","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":180,"width":760,"height":12}},{"id":"f4e7e4dc-3e58-4561-82c6-7588c13b58be","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":196,"width":753,"height":12}},{"id":"192e6cdf-5c6c-40da-924c-9906b003cf8a","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":211,"width":749,"height":12}},{"id":"0e7fc00f-9b9c-4c58-b2ff-6a5ebd321851","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":227,"width":687,"height":12}},{"id":"8f6acd92-b350-45df-b08e-9a604d8577e2","block_type":"box","text":"themselves qualify for the dividends received deduction.","page_number":82,"box":{"x":116,"y":242,"width":422,"height":12}},{"id":"54e6eda4-fbf8-4055-8722-e58c4172024b","block_type":"box","text":"Tax-Exempt Investors and Excess Inclusion Income.","page_number":82,"box":{"x":116,"y":274,"width":423,"height":12}},{"id":"482ddbcf-6792-46d5-bc5c-77062bef82de","block_type":"box","text":"Under current law, the Fund serves to block","page_number":82,"box":{"x":541,"y":274,"width":329,"height":11}},{"id":"173e1f38-4900-40a3-8431-47726dc2bc7e","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":290,"width":758,"height":12}},{"id":"dc3a4adf-675e-4031-9251-a57b124d1dd4","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":305,"width":748,"height":12}},{"id":"b4c47f53-1331-46b2-9971-be817c7fefd5","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":321,"width":748,"height":12}},{"id":"78b1f0f9-08da-4dab-8bc8-892b60980a25","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":336,"width":742,"height":12}},{"id":"172be4ab-a737-4a04-9c71-e56d95532434","block_type":"box","text":"borrows money to acquire its shares fund.","page_number":82,"box":{"x":117,"y":352,"width":316,"height":12}},{"id":"a8af00b5-18c5-4742-9015-a759adce07bb","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":384,"width":754,"height":12}},{"id":"b468febe-2575-4c62-a376-a99a403b2027","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":399,"width":689,"height":12}},{"id":"8420eb55-aa90-43d3-99f7-682ccbad688d","block_type":"box","text":"distributions as “excess inclusion income.” To Fund shareholders, such excess inclusion income may:","page_number":82,"box":{"x":116,"y":415,"width":760,"height":12}},{"id":"decd9619-e008-4290-b031-ef76d8e7adc5","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":430,"width":768,"height":12}},{"id":"e763222a-0be0-41fa-a527-eba27b78ecfb","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":446,"width":760,"height":12}},{"id":"352c598b-af65-4c1f-aff4-2e2bc8159df2","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":461,"width":733,"height":12}},{"id":"8390df8d-7a62-46c8-9d7e-7e8a71ad3ecd","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":477,"width":758,"height":12}},{"id":"61af8892-8cec-46ff-ad4d-30b81acb21dd","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":492,"width":731,"height":12}},{"id":"6d4c5adf-294c-408d-b7d9-5f4d678ab47f","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":508,"width":761,"height":12}},{"id":"eda047f7-d4a8-44d1-825e-a5a481a50a20","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":523,"width":745,"height":12}},{"id":"dcabcbd8-17ae-4cf2-8e82-8e665875963a","block_type":"box","text":"excise tax on the UBTI is imposed on the trust.","page_number":82,"box":{"x":116,"y":539,"width":352,"height":12}},{"id":"9c11ba06-f7de-45be-9da4-b6e0f800ac57","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":570,"width":760,"height":12}},{"id":"b2de507e-feb6-457c-9344-975d3975f2f3","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":586,"width":757,"height":12}},{"id":"93e103bb-a860-4c9b-9119-cdddce8b19c2","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":601,"width":746,"height":12}},{"id":"be045c4c-1e45-443d-8227-7a2ba5e53a41","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":616,"width":743,"height":12}},{"id":"992b4d11-cca3-48c9-9921-778539639772","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":631,"width":726,"height":12}},{"id":"fae5bec4-3186-4c07-8d61-c398a0bf4151","block_type":"box","text":"investment opportunities.","page_number":82,"box":{"x":117,"y":647,"width":191,"height":11}},{"id":"f900381b-ecbd-47f7-a448-166d146cd86b","block_type":"box","text":"Non-U.S. Investments.","page_number":82,"box":{"x":117,"y":678,"width":169,"height":10}},{"id":"1bcf6804-4c95-4a31-a32b-76ac303ec535","block_type":"box","text":"Under Section 988 of the Internal Revenue Code, gains or losses attributable to","page_number":82,"box":{"x":293,"y":678,"width":564,"height":12}},{"id":"ff1a6ea9-9e53-4e65-a68f-6f01ae2ac0b3","block_type":"box","text":"fluctuations in exchange rates between the time the","page_number":82,"box":{"x":116,"y":693,"width":366,"height":13}},{"id":"f7ce1521-44ae-4c38-a710-7864547d3dda","block_type":"box","text":"Fund accrues income or receivables or expenses or","page_number":82,"box":{"x":488,"y":694,"width":369,"height":11}},{"id":"efc4ec05-4662-48f2-adb8-e50ed5bdff08","block_type":"box","text":"other liabilities denominated in a non-U.","page_number":82,"box":{"x":116,"y":709,"width":280,"height":9}},{"id":"705ee68f-c158-41cc-be8e-92062802f6db","block_type":"box","text":"S. currency and the time the Fund actually collects such income or","page_number":82,"box":{"x":398,"y":709,"width":473,"height":12}},{"id":"677b8d5e-2fb8-4dde-9f61-b5d0b60eca13","block_type":"box","text":"pays such liabilities are generally treated as ordinary in","page_number":82,"box":{"x":117,"y":724,"width":387,"height":12}},{"id":"397a8869-19cc-4bc3-8785-2266b50f78c8","block_type":"box","text":"come or ordinary loss. In general, gains (and losses)","page_number":82,"box":{"x":505,"y":724,"width":373,"height":12}},{"id":"945b69b5-b62c-441f-957c-aa03bc8e31cc","block_type":"box","text":"realized on debt instruments will be treated as Section","page_number":82,"box":{"x":117,"y":739,"width":383,"height":10}},{"id":"1db3dfa9-726b-4671-b630-cf4b9b94fbfd","block_type":"box","text":"988 gain (or loss) to the extent attributable to","page_number":82,"box":{"x":505,"y":739,"width":318,"height":12}},{"id":"0c85a99c-4f07-4cd7-a1c5-92470325dafb","block_type":"box","text":"changes in exchange rates between the U.S. dollar and","page_number":82,"box":{"x":116,"y":754,"width":395,"height":13}},{"id":"3bb59ec1-3b08-4a8e-9298-d2c9b903a283","block_type":"box","text":"the currencies in which the instruments are","page_number":82,"box":{"x":516,"y":755,"width":305,"height":9}},{"id":"d4b82432-9e01-4abb-9752-606ecbbc916f","block_type":"box","text":"denominated. Similarly, gains or losses on non-U.S.","page_number":82,"box":{"x":116,"y":770,"width":368,"height":12}},{"id":"4305fc1d-09be-4708-a7ab-6cc3c555040c","block_type":"box","text":"currency, non-U.S. currency forward contracts and","page_number":82,"box":{"x":490,"y":770,"width":358,"height":12}},{"id":"a68b7c19-ee78-4b44-a393-a1060e543581","block_type":"box","text":"certain non-U.S. currency options or futures contra","page_number":82,"box":{"x":116,"y":785,"width":359,"height":12}},{"id":"bd388163-a4e1-4218-8608-451510133685","block_type":"box","text":"cts denominated in non-U.S. cu","page_number":82,"box":{"x":476,"y":785,"width":224,"height":9}},{"id":"a45581d9-1128-40ae-bcc0-14bc062c9d5c","block_type":"box","text":"rrency, to the extent","page_number":82,"box":{"x":702,"y":785,"width":141,"height":12}},{"id":"b2fc9518-bf94-4e9b-a3fd-15b874891d51","block_type":"box","text":"attributable to fluctuations in exchange rates between","page_number":82,"box":{"x":116,"y":800,"width":378,"height":12}},{"id":"7014e5ff-b47e-469a-a3fe-fa9ae292bc61","block_type":"box","text":"the acquisition and disposition dates, are also treated","page_number":82,"box":{"x":500,"y":800,"width":377,"height":12}},{"id":"3dd466fa-dd76-4370-a114-1fbb49b3d0a8","block_type":"box","text":"as ordinary income or loss unless the Fund were to elect otherwise.","page_number":82,"box":{"x":116,"y":816,"width":479,"height":12}},{"id":"3b66507a-a770-4b7f-a65a-179322682d82","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":847,"width":749,"height":12}},{"id":"bbeae13d-e78e-48c3-81c0-2c59796481a0","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":862,"width":741,"height":12}},{"id":"3222582e-d729-4155-9982-921f521373c5","block_type":"box","text":"Fund provided that the Fund held the security on the dividend settlement date and for at least 15","page_number":82,"box":{"x":117,"y":878,"width":720,"height":12}},{"id":"f5aa4ec7-cc1c-4f7a-8800-caaac5d5cf9f","block_type":"box","text":"74","page_number":82,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"1e815f7e-376a-4650-8fcb-f60fe1616e34","block_type":"box","text":"NM1026U-6030748-82/260","page_number":82,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d746004b-af17-4551-b543-7ebfc3f24796","block_type":"box","text":"additional days immediately before and/or thereafter, with the result that each investor with respect to","page_number":83,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"9870d2ea-4e75-48fb-8734-8df07f5abfc7","block_type":"box","text":"shares of the Fund held for a minimum 16-day holding period at the time of deemed distribution will","page_number":83,"box":{"x":116,"y":102,"width":741,"height":12}},{"id":"af887136-0636-476a-b091-c4fe5971a13b","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":117,"width":724,"height":12}},{"id":"09e9dc1d-8c8b-4671-b7f2-47aba99ad7b3","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":132,"width":747,"height":13}},{"id":"b3f45cb2-5594-4a99-af73-8533a6f2a546","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":148,"width":718,"height":12}},{"id":"a6afccaa-b8b5-48de-ae35-79f0986fcb8e","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":163,"width":735,"height":12}},{"id":"7544fd34-3b5d-460b-add7-e92be11f7dc3","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":178,"width":770,"height":12}},{"id":"d69dda94-8783-499d-87bc-b7868ce2c0d7","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":193,"width":762,"height":13}},{"id":"5e32e35b-9fb4-4ec8-971a-ffc604dbd3d5","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":209,"width":754,"height":12}},{"id":"01c839d1-dc1c-49a3-a88c-1c9249bcd339","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":224,"width":745,"height":12}},{"id":"6549f45c-d22f-4f87-8b0a-3a9443ed3b1f","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":239,"width":717,"height":12}},{"id":"28b07728-1536-41e7-b42f-cadbfc509576","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":254,"width":750,"height":13}},{"id":"21410769-e843-407f-b632-d9c47eef331b","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":270,"width":739,"height":12}},{"id":"d8ae1f81-011a-4647-87fe-8e278c54ebb0","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":285,"width":750,"height":12}},{"id":"435591e6-6138-4bc2-b217-40db6862a400","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":300,"width":736,"height":12}},{"id":"3b7270d4-3af6-4542-9185-8a6c74994b54","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":315,"width":758,"height":12}},{"id":"b3836319-6aa0-4df2-8d7a-cf696ddf88bc","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":331,"width":771,"height":12}},{"id":"63bae963-2862-4806-bee4-c1a273194f85","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":346,"width":580,"height":12}},{"id":"5d7098f2-e06b-4b20-8e1e-c286e082e25d","block_type":"box","text":"Fund or to treat Fund","page_number":83,"box":{"x":703,"y":346,"width":162,"height":9}},{"id":"fd6e6eef-dca9-481b-8a16-bd8cb3095e34","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":361,"width":745,"height":12}},{"id":"e8c81e5a-56c3-4510-9d88-0fc8219a02fd","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":376,"width":749,"height":13}},{"id":"0b6d6e95-f835-4145-a59c-b85803e3d983","block_type":"box","text":"not be deductible under certain circumstances. Consult your financial intermediary or tax advisor.","page_number":83,"box":{"x":117,"y":392,"width":725,"height":12}},{"id":"569c0bdc-465c-4f5c-a93e-0047942997d2","block_type":"box","text":"The Fund may file refund claims in various countries t","page_number":83,"box":{"x":116,"y":421,"width":376,"height":12}},{"id":"0b61b69c-ebde-4413-80aa-7d26f501af99","block_type":"box","text":"to recover taxes withheld on dividend income. Whether","page_number":83,"box":{"x":492,"y":421,"width":395,"height":9}},{"id":"68c19ad1-a9e0-45a4-9e3b-2a322a81d228","block_type":"box","text":"or when the Fund will receive a tax refund is within the control of the individual country. Pending","page_number":83,"box":{"x":116,"y":436,"width":683,"height":12}},{"id":"985c209d-f21f-4cd2-a347-eb788a1ca86e","block_type":"box","text":"confirmatory guidance from the IRS, the refunds re","page_number":83,"box":{"x":116,"y":451,"width":361,"height":12}},{"id":"9e7050c9-8e9d-49a1-9ed0-5bc46bb868d4","block_type":"box","text":"ceived may reduce the Fund’s pass-through of foreign","page_number":83,"box":{"x":478,"y":451,"width":389,"height":12}},{"id":"41dd0d9f-cce4-403e-b189-a09b16c8e955","block_type":"box","text":"tax credits in such year and potentially future years","page_number":83,"box":{"x":116,"y":466,"width":366,"height":12}},{"id":"7352ecfa-c2e7-4172-839b-ffda1093e8f7","block_type":"box","text":"or may result in the Fund paying an IRS compliance fee","page_number":83,"box":{"x":482,"y":466,"width":400,"height":12}},{"id":"5f784976-5f5c-457e-82e2-f8fb869c4548","block_type":"box","text":"to cover the effect of the tax credits previously","page_number":83,"box":{"x":116,"y":482,"width":326,"height":12}},{"id":"dcc12d15-b772-414d-b0a5-5d5b1d47fdb3","block_type":"box","text":"y passed through to shareholders on refunded foreign taxes.","page_number":83,"box":{"x":442,"y":482,"width":427,"height":12}},{"id":"91784a64-a8a4-4c3f-b2f1-7cd6b82b7540","block_type":"box","text":"Controlled Foreign Corporation.","page_number":83,"box":{"x":116,"y":511,"width":255,"height":12}},{"id":"d0a847c8-81a1-41b4-8fa4-0acb08edf8b5","block_type":"box","text":"A Fund may take certain positions through a wholly-owned (or","page_number":83,"box":{"x":372,"y":511,"width":471,"height":12}},{"id":"bcdfac93-fd10-4cab-85ac-5f58348b0433","block_type":"box","text":"majority-owned), foreign subsidiary (the “Subsidiary”). It is expected that the Subsidiary will be a","page_number":83,"box":{"x":117,"y":526,"width":716,"height":12}},{"id":"a6835e37-2cc5-45ff-a351-05aad3a120c5","block_type":"box","text":"“controlled foreign corporation” and that all of its net income will be “subpart F income” for U.S. federal","page_number":83,"box":{"x":116,"y":542,"width":763,"height":12}},{"id":"8b2aa1b5-fa53-4230-9b7d-36307a2b0656","block_type":"box","text":"income tax purposes. If that is the case, the Fund will be required to report all of the Subsidiary’s net","page_number":83,"box":{"x":117,"y":557,"width":748,"height":12}},{"id":"592714c7-3e14-4363-b895-14eb3551081b","block_type":"box","text":"income as ordinary income regardless of whether that income would be treated differently (for","page_number":83,"box":{"x":117,"y":573,"width":700,"height":12}},{"id":"30847934-92f9-4fbb-ad0d-e20d13e286f8","block_type":"box","text":"example, as capital gain) at the Subsidiary level and regardless of whether that income is distributed to","page_number":83,"box":{"x":116,"y":588,"width":769,"height":12}},{"id":"46f63a47-e775-439c-bb07-33edcb96cb31","block_type":"box","text":"the Fund. (Previously taxed income will not, however, be taxable again when distributed.) If a net loss","page_number":83,"box":{"x":116,"y":604,"width":759,"height":12}},{"id":"20ef7710-b196-4146-a5bd-7dd5300060c3","block_type":"box","text":"is realized by the Subsidiary in any taxable year, the loss will generally not be available to offset the","page_number":83,"box":{"x":117,"y":619,"width":742,"height":12}},{"id":"f9f9342b-e9c2-4712-bbe7-486d759cac04","block_type":"box","text":"Fund’s other income. It is not expected that the Subsidiary will be subject to an entity-level federal tax.","page_number":83,"box":{"x":117,"y":635,"width":761,"height":12}},{"id":"2399d329-860f-4a70-9d30-3dc0045d6a32","block_type":"box","text":"Passive Foreign Investment Companies.","page_number":83,"box":{"x":117,"y":664,"width":320,"height":12}},{"id":"0669f333-d29c-4822-9eda-2c9b14028f7b","block_type":"box","text":"If the Fund purchases shares in PFICs, it may be subject","page_number":83,"box":{"x":445,"y":664,"width":421,"height":12}},{"id":"6e8d5f80-daf2-4c8a-942e-bfa776d59616","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":680,"width":757,"height":12}},{"id":"47dc7759-9407-47bd-b8f8-3024af8e2352","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":695,"width":705,"height":12}},{"id":"ec372e6b-0e11-4891-97d0-d88cf5144cd9","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":711,"width":746,"height":12}},{"id":"415cef47-2a6b-4d47-afe3-8bf875d3ae60","block_type":"box","text":"arising from such distributions or gains.","page_number":83,"box":{"x":116,"y":726,"width":290,"height":12}},{"id":"dd87a264-7c26-4060-8b89-e979b199092b","block_type":"box","text":"If the Fund were to invest in a PFIC and elect to tre","page_number":83,"box":{"x":117,"y":755,"width":353,"height":10}},{"id":"8852a6b8-4417-478a-89be-9a88f8fc878f","block_type":"box","text":"reat the PFIC as a “qualified electing fund” under the","page_number":83,"box":{"x":470,"y":755,"width":367,"height":12}},{"id":"42a49b73-80ba-467c-add2-849a7e3456e3","block_type":"box","text":"Internal Revenue Code, in lieu of the foregoing re","page_number":83,"box":{"x":117,"y":771,"width":341,"height":12}},{"id":"a75a16d8-db5d-49af-aa48-5d3342cf4163","block_type":"box","text":"requirements, the Fund might be required to include in","page_number":83,"box":{"x":458,"y":771,"width":380,"height":12}},{"id":"e1d1dcaf-f781-4dec-889e-dd30ab71d4d1","block_type":"box","text":"income each year a portion of the ordinary earnings and","page_number":83,"box":{"x":117,"y":786,"width":397,"height":12}},{"id":"709d69a5-f8e8-4042-95e3-9839b88a6329","block_type":"box","text":"net capital gains of the qualified electing fund, even","page_number":83,"box":{"x":520,"y":786,"width":362,"height":12}},{"id":"38c2b7ee-b3c8-4efa-85fd-ea6e7a506772","block_type":"box","text":"if not distributed to the Fund, and such amounts would","page_number":83,"box":{"x":117,"y":802,"width":384,"height":11}},{"id":"e58d18b7-2161-42bb-9100-7d814d70ca9f","block_type":"box","text":"be subject to the 90% and excise tax distribution","page_number":83,"box":{"x":507,"y":802,"width":342,"height":12}},{"id":"3f87db10-6264-4807-bb6d-a4ee8db9961d","block_type":"box","text":"requirements described above. In order to make this","page_number":83,"box":{"x":117,"y":817,"width":371,"height":12}},{"id":"8cf7bc46-9228-4738-9b78-f7a7d1665c46","block_type":"box","text":"election, the Fund would be required to obtain certain","page_number":83,"box":{"x":493,"y":817,"width":377,"height":12}},{"id":"049a2b53-a622-4d3b-aeee-aa9e7540dfc4","block_type":"box","text":"annual information from the PFICs in which it invests,","page_number":83,"box":{"x":116,"y":833,"width":377,"height":11}},{"id":"312f26c1-83d1-4d2f-a7be-7ffa2014f580","block_type":"box","text":"which may be difficult or impossible to obtain.","page_number":83,"box":{"x":494,"y":833,"width":331,"height":12}},{"id":"e90bcdd0-d868-402b-9f77-b68bc5d2ecfa","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":"1e609f1e-3d55-4170-896e-b5ecbd9b935f","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":877,"width":762,"height":13}},{"id":"51d0d0f7-8dc9-4852-a65e-98e74e45a8de","block_type":"box","text":"75","page_number":83,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"53f6208a-90b2-4b8a-bee1-bdbd3d92d4de","block_type":"box","text":"NM1026U-6030748-83/260","page_number":83,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0c1bb13a-733d-47a9-821a-2659b08d92c5","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":"763b6e4a-0c85-4fb9-b0e0-1218c8acb995","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":"c07b00e0-2983-4a5a-ad8d-9c6deb26c9b8","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":"9cc28142-01c0-4ae7-a9d0-c8b927123254","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":"3a6fc9b1-2d24-477e-a535-04e8482db745","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":"4e3d5662-f239-4469-ba31-605a9d1804d3","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":"3381c591-c4fa-46e5-be92-f96deed475cd","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":"af134e68-1864-4580-9019-52e4e9e497b0","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":"bafb0089-106c-445f-9206-f7d67c33109e","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":227,"width":740,"height":12}},{"id":"01f8e781-4a27-49c4-ad89-bdee6e5e205d","block_type":"box","text":"necessary to mitigate the effects of these rules.","page_number":84,"box":{"x":117,"y":242,"width":355,"height":12}},{"id":"03940ab6-1688-4ba1-b5a0-94e75b56b62f","block_type":"box","text":"Reporting.","page_number":84,"box":{"x":117,"y":273,"width":88,"height":12}},{"id":"0267142c-023f-4783-8654-3fbe33cdc5a9","block_type":"box","text":"If a shareholder recognizes a loss with respect to the Fund’s shares of $2 million or more","page_number":84,"box":{"x":206,"y":272,"width":664,"height":13}},{"id":"30f7bdf1-4bae-4395-ba62-e89e4c69356d","block_type":"box","text":"for an individual shareholder or $10 million or more for a corporate shareholder, the shareholder must","page_number":84,"box":{"x":116,"y":288,"width":759,"height":13}},{"id":"61529941-c2b1-4fbc-8f33-f70072151d33","block_type":"box","text":"file with the IRS a disclosure statement on IRS Form 8886. 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Shareholders should","page_number":84,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"f3678791-c59b-4d62-99e7-7914608c29bf","block_type":"box","text":"consult their tax advisors to determine the applicability of these regulations in light of their individual","page_number":84,"box":{"x":116,"y":366,"width":744,"height":12}},{"id":"d8597678-227d-4f86-8ee2-645e0ed53f65","block_type":"box","text":"circumstances.","page_number":84,"box":{"x":116,"y":382,"width":117,"height":9}},{"id":"1c62809e-e7e3-4a58-ad6f-b6bf1977030f","block_type":"box","text":"Other Taxes.","page_number":84,"box":{"x":116,"y":413,"width":106,"height":9}},{"id":"ff2b9d4a-717d-493a-8434-ba5e926ae331","block_type":"box","text":"Dividends, distributions and redemption proceeds may also be subject to additional","page_number":84,"box":{"x":224,"y":413,"width":621,"height":12}},{"id":"ade67563-810f-4d75-95ed-63b6dc8e5cfa","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":428,"width":633,"height":12}},{"id":"0654b631-5ea4-47b6-b99e-59bccd4d9ba5","block_type":"box","text":"Taxation of Non-U.S. Shareholders.","page_number":84,"box":{"x":116,"y":459,"width":275,"height":10}},{"id":"6d137465-d866-4a60-a5b5-6f85e565aa01","block_type":"box","text":"Dividends paid by the Fund to non-U.","page_number":84,"box":{"x":392,"y":459,"width":264,"height":12}},{"id":"73ff68fc-5745-4a89-a61d-eb6d1cf71e01","block_type":"box","text":"S. shareholders (other than a","page_number":84,"box":{"x":657,"y":459,"width":213,"height":12}},{"id":"03bc931c-72b3-46ff-b083-2182d82c318e","block_type":"box","text":"pass-through entity to the extent owned by U.S. pers","page_number":84,"box":{"x":117,"y":475,"width":373,"height":12}},{"id":"f59138ea-8056-4940-a248-e263f269e974","block_type":"box","text":"ons) are generally subject to withholding tax at a 30%","page_number":84,"box":{"x":491,"y":475,"width":385,"height":12}},{"id":"d84b93ee-4310-4ba5-8614-98598e2c7d5d","block_type":"box","text":"rate or a reduced rate specified by an applicable inco","page_number":84,"box":{"x":117,"y":490,"width":375,"height":12}},{"id":"737d8b22-62fb-4de8-82b4-6a1e29955117","block_type":"box","text":"me tax treaty to the extent derived from investment","page_number":84,"box":{"x":493,"y":490,"width":366,"height":12}},{"id":"6bf18cd9-575c-4062-a92b-38158f7bdb3c","block_type":"box","text":"income and short-term capital gains. Dividends paid by t","page_number":84,"box":{"x":117,"y":506,"width":394,"height":12}},{"id":"3d9aae00-5dd1-4d4b-9e9a-b629a65ff4be","block_type":"box","text":"the Fund from net tax-exempt income or long-term","page_number":84,"box":{"x":511,"y":506,"width":364,"height":12}},{"id":"df8ab6e9-1ad0-451d-800b-812d66532ff7","block_type":"box","text":"capital gains are generally not subject to such wit","page_number":84,"box":{"x":116,"y":521,"width":349,"height":12}},{"id":"1ed87b92-6421-4add-bb29-ce2d29906b35","block_type":"box","text":"hholding tax. In order to obtain a reduced rate of","page_number":84,"box":{"x":465,"y":521,"width":347,"height":12}},{"id":"d41104b1-cfd7-4d96-8b9d-70091970b96b","block_type":"box","text":"withholding, a non-U.S. shareholder","page_number":84,"box":{"x":116,"y":537,"width":256,"height":12}},{"id":"c535c17f-d213-4b91-b287-d67fda15f696","block_type":"box","text":"r will be required to provide an IRS Form W-8BEN or IRS Form","page_number":84,"box":{"x":371,"y":537,"width":448,"height":12}},{"id":"6f261791-d79b-4a10-9c81-5229e4ee4250","block_type":"box","text":"W-8BEN-E certifying its entitlement","page_number":84,"box":{"x":116,"y":552,"width":251,"height":12}},{"id":"149025ee-1dd4-42aa-8550-71293488b913","block_type":"box","text":"t to benefits under a treaty. The withhol","page_number":84,"box":{"x":367,"y":552,"width":272,"height":12}},{"id":"9d948e97-2a5a-4da1-81d3-4f7aa605b6cd","block_type":"box","text":"ding tax does not apply to regular","page_number":84,"box":{"x":640,"y":552,"width":242,"height":12}},{"id":"0ec8c80b-9d1d-4e60-bb68-adef43278778","block_type":"box","text":"dividends paid to a non-U.S. shareholder who provides","page_number":84,"box":{"x":116,"y":568,"width":390,"height":12}},{"id":"770ce9b5-e184-4d31-8a1a-cd386569b0c5","block_type":"box","text":"an IRS Form W-8ECI, certifying that the dividends","page_number":84,"box":{"x":506,"y":568,"width":366,"height":12}},{"id":"996ce523-944f-4c9b-98e9-2a06c259c005","block_type":"box","text":"are effectively connected with the","page_number":84,"box":{"x":116,"y":583,"width":242,"height":12}},{"id":"06cd695b-c4e1-480e-8a2d-2b57b8bbf48e","block_type":"box","text":"non-U.S. shareholder’s conduct of a t","page_number":84,"box":{"x":359,"y":583,"width":260,"height":10}},{"id":"a1679697-b6a7-4f80-bad6-bbfa50261e4a","block_type":"box","text":"trade or business within the U.S.","page_number":84,"box":{"x":619,"y":583,"width":236,"height":10}},{"id":"0798ee49-9bb9-4e31-ac79-3979658779db","block_type":"box","text":"Instead, the effectively connected dividends will be subject t","page_number":84,"box":{"x":117,"y":599,"width":418,"height":12}},{"id":"399bc56d-c23b-4eeb-a0da-e04d5d973c79","block_type":"box","text":"to regular U.S. income tax as if the non-U.S.","page_number":84,"box":{"x":535,"y":599,"width":319,"height":12}},{"id":"f6c8eb0a-a783-4aec-a633-5c1cf2d21cc9","block_type":"box","text":"shareholder were a U.S. shareholder. A","page_number":84,"box":{"x":116,"y":614,"width":272,"height":10}},{"id":"353d0910-2ce0-45bf-939a-fbec65812275","block_type":"box","text":"A non-U.S. corporation receiving","page_number":84,"box":{"x":388,"y":614,"width":237,"height":12}},{"id":"9a55731f-4eee-441e-8d32-1c5bd939a663","block_type":"box","text":"effectively connected dividends may","page_number":84,"box":{"x":625,"y":614,"width":262,"height":12}},{"id":"d2022521-dafb-4d91-8a24-9a159fdbe67c","block_type":"box","text":"also be subject to additional “branch profits tax” impos","page_number":84,"box":{"x":116,"y":630,"width":383,"height":12}},{"id":"6b358570-6bf5-40ae-8b5d-ecbc5e5f0435","block_type":"box","text":"ed at a rate of 30% (or lower treaty rate). A non-U.S.","page_number":84,"box":{"x":500,"y":630,"width":376,"height":12}},{"id":"4299544f-3c6f-4c6a-b247-d4bc7ee7b33d","block_type":"box","text":"shareholder who fails to provide an IRS Form W-8","page_number":84,"box":{"x":116,"y":645,"width":356,"height":12}},{"id":"8d618bf0-18cd-49b4-a87d-12042bca52d0","block_type":"box","text":"BEN, IRS Form W-8BEN-E or other applicable form may","page_number":84,"box":{"x":474,"y":645,"width":407,"height":12}},{"id":"f25ddce7-5a15-4ab5-a566-6b2fecddfc77","block_type":"box","text":"be subject to backup withholding at the appropriate rate.","page_number":84,"box":{"x":117,"y":661,"width":397,"height":12}},{"id":"2da41412-32e5-4096-aef4-ad3953275075","block_type":"box","text":"Except as discussed below, properly-reported dividends","page_number":84,"box":{"x":117,"y":692,"width":396,"height":12}},{"id":"55064db2-e7df-4e85-a527-8d1bc1c4bfe8","block_type":"box","text":"are generally exempt from U.S. federal withholding","page_number":84,"box":{"x":519,"y":692,"width":360,"height":12}},{"id":"c37f953a-2a87-49d4-86a4-92b65414d307","block_type":"box","text":"tax where they (i) are paid in respect of the Fund’s “","page_number":84,"box":{"x":116,"y":707,"width":366,"height":12}},{"id":"badffa61-e064-42a4-be8a-e63ebeda9030","block_type":"box","text":"qualified net interest income” (generally, the Fund’s U.S.","page_number":84,"box":{"x":483,"y":707,"width":398,"height":12}},{"id":"9970d0e3-83c5-4f96-aaec-bbcc189ed67d","block_type":"box","text":"source interest income, other than certain contingent in","page_number":84,"box":{"x":116,"y":723,"width":390,"height":12}},{"id":"99a4da88-41d8-4c87-bd9b-92e1e7d18acc","block_type":"box","text":"terest and interest from obligations of a corporation","page_number":84,"box":{"x":507,"y":723,"width":361,"height":12}},{"id":"a7beeecd-5f1c-4154-bff3-13b44ac5e8b6","block_type":"box","text":"or partnership in which the Fund is at least a 10%","page_number":84,"box":{"x":116,"y":738,"width":351,"height":12}},{"id":"1a1e1670-22ab-4fcc-b496-b5423fc6057f","block_type":"box","text":"shareholder or partner, reduced by expenses that are","page_number":84,"box":{"x":472,"y":738,"width":380,"height":12}},{"id":"076c1630-0843-47d3-b6ac-e0cdbd512b40","block_type":"box","text":"allocable to such income), (ii) are paid in respect","page_number":84,"box":{"x":116,"y":754,"width":344,"height":12}},{"id":"5f427827-ddd8-4983-a286-db45d7538012","block_type":"box","text":"of the Fund’s “qualified short-term capital gains” (generally,","page_number":84,"box":{"x":465,"y":754,"width":416,"height":12}},{"id":"4bc83a74-909a-4b3f-8caf-2f88ffea0ace","block_type":"box","text":"the excess of the Fund’s net short-term capital gain over","page_number":84,"box":{"x":116,"y":769,"width":400,"height":12}},{"id":"65952fea-67b9-4bb9-8fbc-91a69523c018","block_type":"box","text":"the Fund’s long-term capital loss for such taxable","page_number":84,"box":{"x":520,"y":769,"width":349,"height":12}},{"id":"a76f11bd-c47f-4833-981b-82f2c8a917bb","block_type":"box","text":"year) or (iii) are paid in respect of the Fund’s inte","page_number":84,"box":{"x":116,"y":785,"width":344,"height":12}},{"id":"c87c9eb1-d3c6-40cf-9b9c-36d33a539a94","block_type":"box","text":"rest income earned on municipal and other tax-exempt","page_number":84,"box":{"x":461,"y":785,"width":389,"height":12}},{"id":"4fb13895-747f-4f17-b2e9-a182ce200fba","block_type":"box","text":"securities. However, depending on its circumstances, the Fund may report all, some or none of its","page_number":84,"box":{"x":116,"y":800,"width":694,"height":12}},{"id":"d596c455-cb48-4b93-830f-56fe55716ffe","block_type":"box","text":"potentially eligible dividends as interest-related di","page_number":84,"box":{"x":117,"y":816,"width":346,"height":12}},{"id":"476ffc32-f0de-48e2-8b4b-3921b28450d5","block_type":"box","text":"vidends, short-term capital gains dividends or exempt","page_number":84,"box":{"x":464,"y":816,"width":384,"height":12}},{"id":"83aa01eb-170b-4b18-bab8-7c13e01432e0","block_type":"box","text":"interest dividends and/or treat such dividends, in whole o","page_number":84,"box":{"x":117,"y":831,"width":394,"height":11}},{"id":"188a7de9-b331-4646-a63a-1a13eb73f646","block_type":"box","text":"or in part, as ineligible for this exemption from","page_number":84,"box":{"x":511,"y":831,"width":327,"height":12}},{"id":"16f5a4b2-a379-44c3-985d-03eed65f176c","block_type":"box","text":"withholding. In order to qualify for this exempt","page_number":84,"box":{"x":116,"y":847,"width":323,"height":12}},{"id":"0e9da170-0b3a-44ac-839e-70cbc09a226d","block_type":"box","text":"ion from withholding, a non-U.S. shareholder will need to","page_number":84,"box":{"x":439,"y":847,"width":407,"height":12}},{"id":"5fecdd03-2d74-4bee-a580-949e3eb889bf","block_type":"box","text":"comply with applicable certification requirements relati","page_number":84,"box":{"x":116,"y":862,"width":382,"height":12}},{"id":"c0ddeca3-689d-40ec-acff-bb5ace199e8b","block_type":"box","text":"ng to its non-U.S. status (including, in general,","page_number":84,"box":{"x":500,"y":862,"width":332,"height":12}},{"id":"5395bea1-93c0-41c6-9618-3edc5679f034","block_type":"box","text":"furnishing an IRS Form W-8BEN, IRS Form W-8BEN-E or substitute Form). In the case of shares held","page_number":84,"box":{"x":116,"y":878,"width":732,"height":12}},{"id":"382d1247-e7e3-41aa-b3c8-dde31a5555a7","block_type":"box","text":"76","page_number":84,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6ba72962-3431-48c5-aed5-d7232f790616","block_type":"box","text":"NM1026U-6030748-84/260","page_number":84,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"e13a6dff-63a8-47b9-8583-338747bf67b1","block_type":"box","text":"through an intermediary, the intermediary may withhold","page_number":85,"box":{"x":116,"y":87,"width":397,"height":12}},{"id":"d23d522c-2f6e-4465-9768-773dae5394f9","block_type":"box","text":"even if the Fund reports the payment as qualified","page_number":85,"box":{"x":513,"y":87,"width":353,"height":12}},{"id":"013d23da-1530-422a-ad16-e668259420a1","block_type":"box","text":"net interest income or qualified short-term capita","page_number":85,"box":{"x":117,"y":102,"width":342,"height":12}},{"id":"f05d6bff-3e97-4d3a-9e33-0965d9c481cb","block_type":"box","text":"l gain. Non-U.S. shareholders should contact their","page_number":85,"box":{"x":460,"y":102,"width":359,"height":13}},{"id":"0d1b86fd-901f-4750-9b15-92035b800cab","block_type":"box","text":"intermediaries with respect to the applicat","page_number":85,"box":{"x":117,"y":118,"width":294,"height":12}},{"id":"940dd0af-3f16-4913-a2e3-3b3b6c5a3afe","block_type":"box","text":"ion of these rules to their accounts.","page_number":85,"box":{"x":412,"y":118,"width":252,"height":10}},{"id":"21c7eeb1-c07d-4ae3-9e34-1ec09c03d591","block_type":"box","text":"Special rules may apply to a foreign shareholder receiv","page_number":85,"box":{"x":116,"y":152,"width":391,"height":12}},{"id":"99f506a7-3714-4273-a600-cf7ba6f1bd63","block_type":"box","text":"ing a Fund distribution if at least 50% of the Fund’s","page_number":85,"box":{"x":508,"y":152,"width":364,"height":12}},{"id":"892878f8-d1f9-4b7d-987c-f5d0d8c54c76","block_type":"box","text":"assets consist of U.S. real property interests,","page_number":85,"box":{"x":116,"y":168,"width":323,"height":12}},{"id":"186364ff-de27-4edd-8d34-6ada93c6473a","block_type":"box","text":"including certain REITs and U.S. real property holding","page_number":85,"box":{"x":440,"y":168,"width":386,"height":12}},{"id":"1dd624cb-2d7a-42ef-b667-da56ff17c565","block_type":"box","text":"corporations (as defined in the Internal Revenue","page_number":85,"box":{"x":116,"y":183,"width":347,"height":12}},{"id":"529e9207-3554-40c6-b78d-459191110573","block_type":"box","text":"Code and Treasury regulations). Fund distributions that","page_number":85,"box":{"x":464,"y":183,"width":397,"height":12}},{"id":"3ba650f8-275a-4195-8a06-70ff4b31bd7e","block_type":"box","text":"are attributable to gain from the disposition of a U.S.","page_number":85,"box":{"x":116,"y":199,"width":368,"height":12}},{"id":"43038706-e17b-48b7-977c-c91d9f1d2bff","block_type":"box","text":"real property interest will be taxable as ordinary","page_number":85,"box":{"x":486,"y":199,"width":345,"height":12}},{"id":"f95370d8-af49-4ee8-b1fb-0abdb628c97f","block_type":"box","text":"dividends and subject to withholding at a 30% or lower t","page_number":85,"box":{"x":116,"y":214,"width":391,"height":12}},{"id":"08c16b7f-7039-445e-a11a-bdb368bb56cf","block_type":"box","text":"treaty rate if the foreign shareholder held no more","page_number":85,"box":{"x":507,"y":214,"width":357,"height":12}},{"id":"4fa378b4-3c7f-41ff-b8d6-9feac98c8916","block_type":"box","text":"than 5% of the Fund’s shares at all times during the","page_number":85,"box":{"x":116,"y":230,"width":371,"height":12}},{"id":"d29a8ea9-cc2d-4020-8702-1514a20c589c","block_type":"box","text":"one-year period ending on the dat","page_number":85,"box":{"x":487,"y":230,"width":241,"height":12}},{"id":"e954b58c-c0eb-46cb-8172-e9d489215ed2","block_type":"box","text":"e of the distribution. If","page_number":85,"box":{"x":728,"y":230,"width":157,"height":9}},{"id":"c69f4210-3fe3-471d-9116-a6066335376f","block_type":"box","text":"the foreign shareholder held at least 5% of the Fund’s s","page_number":85,"box":{"x":116,"y":245,"width":393,"height":12}},{"id":"eef0e5dd-c987-47ec-ba22-f0358beeefba","block_type":"box","text":"hares at any time during the one-year testing period,","page_number":85,"box":{"x":511,"y":245,"width":376,"height":12}},{"id":"050703be-60ad-45bd-acfb-318981ab9e5f","block_type":"box","text":"the distribution would be treated as income effectiv","page_number":85,"box":{"x":116,"y":261,"width":360,"height":9}},{"id":"bfde5edd-93b2-4c09-8759-9ab2c2db2cf0","block_type":"box","text":"ely connected with a trade or","page_number":85,"box":{"x":477,"y":261,"width":209,"height":12}},{"id":"6fe82fe3-9872-41c4-8259-49a212387f16","block_type":"box","text":"business within the U.S.","page_number":85,"box":{"x":687,"y":261,"width":175,"height":9}},{"id":"b7eb58b5-4cca-4bf2-9732-e17ce2fd73f8","block_type":"box","text":"and the foreign shareholder would be subject to withholding tax at a rate of 21% and would generally be","page_number":85,"box":{"x":116,"y":276,"width":742,"height":12}},{"id":"8b191aee-10f0-455a-ac0f-2c874728db88","block_type":"box","text":"required to file a U.S. federal income tax return.","page_number":85,"box":{"x":117,"y":292,"width":341,"height":12}},{"id":"f4262c3e-0434-4d14-ad3b-77d55060af12","block_type":"box","text":"Similar consequences would generally apply to a foreign s","page_number":85,"box":{"x":116,"y":326,"width":413,"height":12}},{"id":"b0e9a34a-aba1-4ebb-9d16-9d743b25225b","block_type":"box","text":"hareholder’s gain on the sale of Fund shares if at","page_number":85,"box":{"x":531,"y":326,"width":351,"height":12}},{"id":"e12e808d-deed-4fb1-930e-07d4edeab21f","block_type":"box","text":"least 50% of the Fund’s assets consist of U.S. real","page_number":85,"box":{"x":117,"y":341,"width":356,"height":10}},{"id":"67859fec-0498-436b-b8c0-d70048ff3683","block_type":"box","text":"property interests, unless the Fund is domestically","page_number":85,"box":{"x":474,"y":341,"width":365,"height":12}},{"id":"e868953c-9a3a-4d82-8592-021a6e828125","block_type":"box","text":"controlled (meaning that more than 50% of the value of","page_number":85,"box":{"x":116,"y":357,"width":392,"height":12}},{"id":"af495e69-033a-4bf1-9736-cfad68c1fc19","block_type":"box","text":"f the Fund’s shares is held by U.S. shareholders) or","page_number":85,"box":{"x":507,"y":357,"width":367,"height":12}},{"id":"4dedf7df-7ae3-48cf-a412-8c540e001dd7","block_type":"box","text":"the foreign shareholder owns no more than 5% of the","page_number":85,"box":{"x":116,"y":372,"width":384,"height":12}},{"id":"cbf6597e-87e4-41d5-9e9e-27fb7947c962","block_type":"box","text":"Fund’s shares at all times during the five-year period","page_number":85,"box":{"x":501,"y":372,"width":376,"height":12}},{"id":"442e86cf-7a1d-4776-9f20-18a70c2ae1d7","block_type":"box","text":"ending on the date of sale. 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Shareholders that are nonresident","page_number":85,"box":{"x":465,"y":403,"width":406,"height":12}},{"id":"b633001e-c967-48a8-8979-1201d4a3689a","block_type":"box","text":"aliens or foreign entities are urged to consult t","page_number":85,"box":{"x":116,"y":419,"width":324,"height":12}},{"id":"a4ecff01-2a8d-4f26-b20d-b36aba7d90b7","block_type":"box","text":"heir own tax advisors concerning the particular tax","page_number":85,"box":{"x":441,"y":419,"width":361,"height":12}},{"id":"e73d0d94-b0f9-47c6-9fbc-fea0dd6228bb","block_type":"box","text":"consequences to them of an investment in the Fund.","page_number":85,"box":{"x":116,"y":434,"width":379,"height":12}},{"id":"8521b3c3-2601-4281-8e06-2a191b0a5675","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":468,"width":760,"height":12}},{"id":"1c121510-2147-40dc-914b-de97b887a650","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":484,"width":752,"height":12}},{"id":"0bfe1d7a-d3a7-48fe-90c3-c1d424732f57","block_type":"box","text":"The Fund intends to gain exposure to commodities markets and other instruments that would generate","page_number":85,"box":{"x":116,"y":518,"width":767,"height":12}},{"id":"8a9134c0-e089-4944-bd57-4f44388f896d","block_type":"box","text":"“bad income” for purposes of RIC qualification if such investments were made directly by the Fund by","page_number":85,"box":{"x":116,"y":534,"width":757,"height":12}},{"id":"dcfa6b6f-85f6-4704-a2dc-abf97ebd3cb4","block_type":"box","text":"making such investments indirectly through the Subsidiary. The Subsidiary is expected to be a","page_number":85,"box":{"x":117,"y":549,"width":704,"height":12}},{"id":"9e5f94e0-a6e1-4605-8188-84e7fb897a5e","block_type":"box","text":"“controlled foreign corporation” and all of its net income is expected to be “subpart F income” for U.S.","page_number":85,"box":{"x":116,"y":565,"width":755,"height":12}},{"id":"2219168f-67dc-4356-8bdb-af4eb2f97532","block_type":"box","text":"federal income tax purposes. If that is the case, the Fund will be required to report all of the","page_number":85,"box":{"x":116,"y":580,"width":682,"height":12}},{"id":"9a3133bd-9d79-481f-af21-64fc3a682ce9","block_type":"box","text":"Subsidiary’s net income as ordinary income regardless of whether that income would be treated","page_number":85,"box":{"x":116,"y":596,"width":716,"height":12}},{"id":"f2843d06-8625-4206-97a1-cde637afc226","block_type":"box","text":"differently (for example, as capital gain) at the Subsidiary level and regardless of whether that income","page_number":85,"box":{"x":116,"y":611,"width":759,"height":12}},{"id":"2fb90be6-42c6-4db1-b024-db7cbeddd52a","block_type":"box","text":"is distributed to the Fund. Dividends from the Fund that are attributable to income of the Subsidiary will","page_number":85,"box":{"x":117,"y":627,"width":766,"height":12}},{"id":"eb05ceab-9e94-4a45-a5e9-1435fb9a056f","block_type":"box","text":"be ineligible to be treated as qualified dividend income (for non-corporate shareholders) or for the","page_number":85,"box":{"x":117,"y":642,"width":727,"height":12}},{"id":"c9254bef-cde2-4e6b-a8ab-2c9a1e16de51","block_type":"box","text":"dividends received deduction (for corporate shareholders).","page_number":85,"box":{"x":116,"y":658,"width":439,"height":12}},{"id":"21e23478-c822-4a85-bf92-f11d8f9f59b5","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":692,"width":741,"height":12}},{"id":"335280e4-b5f4-44ba-907d-088c94f27a5f","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":707,"width":699,"height":12}},{"id":"bedfcda7-1c4f-4070-b50d-e0634df8cae7","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":723,"width":760,"height":12}},{"id":"80f6e980-1a17-4440-a056-0090a7863f42","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":738,"width":757,"height":12}},{"id":"77412296-3861-4dcf-9238-d432d342f900","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":754,"width":761,"height":12}},{"id":"bd561053-7a74-423f-aa8e-89ea4fe4e3d2","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":769,"width":743,"height":12}},{"id":"10151c84-7cf2-45f8-be32-cce5e7a88924","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":785,"width":759,"height":12}},{"id":"e292f3f9-d2f8-4b5c-b220-b6912378edcf","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":800,"width":726,"height":12}},{"id":"6587fad4-0711-4933-bbb6-195f17586347","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":816,"width":726,"height":12}},{"id":"f852726e-ee52-4416-8b91-b88cc93976b9","block_type":"box","text":"event an intergovernmental agreement and implementing legislation are adopted, provide local","page_number":85,"box":{"x":116,"y":831,"width":709,"height":12}},{"id":"a42b577b-4c83-4d4c-93ee-6f1accbef2ca","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":847,"width":749,"height":12}},{"id":"60991089-711c-4b5f-9dfa-1946baee2759","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":862,"width":723,"height":12}},{"id":"8a50e9ef-97f9-489a-9352-0495f97018a4","block_type":"box","text":"certifications of no substantial U.S. ownership unless certain exceptions apply.","page_number":85,"box":{"x":116,"y":878,"width":587,"height":12}},{"id":"83cd140c-6021-4bbb-84da-40b57dac1c18","block_type":"box","text":"77","page_number":85,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"6d8a02c3-e84a-437b-ac86-51a8a2c84ef9","block_type":"box","text":"NM1026U-6030748-85/260","page_number":85,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"22702ba0-5667-4e1b-9c3e-efddeaa8be7b","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":86,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"d54d1e3b-0158-4cf7-86c8-d45a6600dbf5","block_type":"box","text":"and subject to the U.S. estate tax.","page_number":86,"box":{"x":116,"y":102,"width":257,"height":13}},{"id":"c2d4f059-3e8a-4654-8795-cc7226de44a8","block_type":"box","text":"The foregoing discussion is a summary of certain material","page_number":86,"box":{"x":116,"y":133,"width":410,"height":12}},{"id":"f874ffda-ca9f-44a9-b580-11831cbdf6ea","block_type":"box","text":"U.S. federal income tax considerations only and","page_number":86,"box":{"x":527,"y":133,"width":350,"height":12}},{"id":"7b68d3ab-ebe8-418e-8b8c-9687f34b1879","block_type":"box","text":"is not intended as a substitute for careful tax planning.","page_number":86,"box":{"x":117,"y":148,"width":381,"height":13}},{"id":"015af33e-8f27-483e-8882-8c7eeac50ca8","block_type":"box","text":"Purchasers of shares should consult their own tax","page_number":86,"box":{"x":499,"y":148,"width":364,"height":10}},{"id":"913408bb-1a03-4158-8934-a8cb6b87d123","block_type":"box","text":"advisors as to the tax consequences of investing in","page_number":86,"box":{"x":116,"y":164,"width":367,"height":12}},{"id":"2826f6db-34c5-4499-8bfd-d6964eb02352","block_type":"box","text":"such shares, including consequences under state, local","page_number":86,"box":{"x":483,"y":164,"width":399,"height":12}},{"id":"22405560-57dc-4496-a15a-a76db16edfcc","block_type":"box","text":"and non-U.S. tax laws. Finally, the foregoing discussion","page_number":86,"box":{"x":116,"y":179,"width":399,"height":13}},{"id":"4d1c1bb0-4886-4adf-8e4e-4eb01b953410","block_type":"box","text":"is based on applicable provisions of the Internal","page_number":86,"box":{"x":516,"y":179,"width":341,"height":12}},{"id":"d26a114a-9e2a-4b40-8267-a27ae860005e","block_type":"box","text":"Revenue Code, regulations, judicial authority and administrati","page_number":86,"box":{"x":117,"y":195,"width":434,"height":12}},{"id":"46078735-3023-4d4d-9f3f-624e70c6bf76","block_type":"box","text":"ve interpretations in effect on the date of this","page_number":86,"box":{"x":552,"y":195,"width":320,"height":12}},{"id":"023be692-c9ae-43ab-bbdd-a680aee73672","block_type":"box","text":"SAI. Changes in applicable authority could materially affect the conclusions discussed above, and such","page_number":86,"box":{"x":116,"y":211,"width":737,"height":12}},{"id":"da68fd38-69e4-41c3-b560-2e7070b62d4f","block_type":"box","text":"changes often occur.","page_number":86,"box":{"x":116,"y":226,"width":154,"height":12}},{"id":"92066ee2-2db0-4dc5-94ac-eb0cceb68284","block_type":"box","text":"Miscellaneous Information","page_number":86,"box":{"x":119,"y":276,"width":477,"height":23}},{"id":"a4163e38-b9d3-43fc-ba1a-e62a259598bb","block_type":"box","text":"Counsel.","page_number":86,"box":{"x":116,"y":328,"width":70,"height":9}},{"id":"c16b1898-222e-49ee-82b1-fec9d59cb871","block_type":"box","text":"Ropes & Gray LLP, located at 1211 Avenue of the Americas, New York, NY 10036, is","page_number":86,"box":{"x":187,"y":328,"width":645,"height":12}},{"id":"0e17eb42-ab87-4cea-84a7-21e1defc6ac7","block_type":"box","text":"counsel to the Trust.","page_number":86,"box":{"x":116,"y":343,"width":157,"height":10}},{"id":"d058df1f-915f-4f8b-93c7-f49f45a755d3","block_type":"box","text":"Independent Registered Public Accounting Firm.","page_number":86,"box":{"x":117,"y":374,"width":387,"height":12}},{"id":"3c9f62e3-7b9d-4e27-bc7f-890f764e68a6","block_type":"box","text":"PricewaterhouseCoopers LLP, located at Two","page_number":86,"box":{"x":506,"y":374,"width":351,"height":12}},{"id":"800dc8bc-93ca-4e85-b9c6-8988a539b34d","block_type":"box","text":"Commerce Square, 2001 Market Street, Suite 1800, Philadelphia, Pennsylvania 19103, serves as the","page_number":86,"box":{"x":117,"y":389,"width":758,"height":12}},{"id":"37af5341-0db4-45ef-a47c-9e3862dade9e","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":405,"width":764,"height":12}},{"id":"dc7fded8-afa8-4387-a233-20704bc14b45","block_type":"box","text":"perform other services.","page_number":86,"box":{"x":117,"y":420,"width":176,"height":12}},{"id":"53633ffa-8d71-4443-a07a-7e0a789acd45","block_type":"box","text":"Investors’ Rights.","page_number":86,"box":{"x":117,"y":451,"width":139,"height":12}},{"id":"6b5b391b-fcba-4743-a2a3-6493ccc00904","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":451,"width":605,"height":12}},{"id":"0aa5a8ba-02bd-4e31-b8e0-d4ee940efc67","block_type":"box","text":"the Distributor, administrator, custodian and transfer agent. Further information about the duties and","page_number":86,"box":{"x":116,"y":466,"width":748,"height":12}},{"id":"2d1cc590-485d-4663-ab45-eb7ecfb38d3c","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":482,"width":764,"height":12}},{"id":"626ee1d5-e5f5-42c4-9955-dbb973a450b5","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":497,"width":739,"height":12}},{"id":"afa6fada-4eb4-4d33-80ad-033e4771ed33","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":513,"width":770,"height":12}},{"id":"7957354b-b8b7-458b-a8e1-901fbc11496c","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":528,"width":766,"height":12}},{"id":"5a4978eb-664d-4655-a9be-3b51674416c8","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":544,"width":768,"height":12}},{"id":"934785f4-ef6c-4293-a2a7-c92196085b8e","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":559,"width":770,"height":12}},{"id":"6c401fca-e555-427b-8abb-9e531bdcf217","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":575,"width":758,"height":12}},{"id":"4bfb2026-4bc2-428f-8ee3-a04e39654dc2","block_type":"box","text":"Fund, such investor should consult its own legal advisor.","page_number":86,"box":{"x":117,"y":590,"width":423,"height":12}},{"id":"ec7e0ccc-4d9e-4cc8-9507-c688b1bf422d","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":621,"width":738,"height":12}},{"id":"4251ff07-470f-4232-9909-daaab14128a4","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":636,"width":760,"height":12}},{"id":"e4b9ae0d-2623-4dc0-91f1-185f5d67154e","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":652,"width":719,"height":12}},{"id":"8e87ce74-53b0-4ac7-b4e9-78cd3aa33c12","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":667,"width":720,"height":12}},{"id":"2eabe66d-a34f-4747-8c71-98ebd4f1e64e","block_type":"box","text":"jurisdiction in which the proceeding is brought.","page_number":86,"box":{"x":115,"y":683,"width":343,"height":12}},{"id":"8bb1e599-3763-4153-8dc0-8f132ceb1f61","block_type":"box","text":"Financial Statements","page_number":86,"box":{"x":119,"y":733,"width":385,"height":23}},{"id":"317651cc-ca1e-48a7-a4c5-651629d756a4","block_type":"box","text":"The audited financial statements, financial highlights and notes thereto in the Fund’s Annual Financial","page_number":86,"box":{"x":116,"y":784,"width":753,"height":13}},{"id":"24ff128b-bdff-4e2f-87eb-5d4ff8afe746","block_type":"box","text":"Statements and Additional Information for the fiscal period ended October 31, 2025, as filed with the","page_number":86,"box":{"x":116,"y":800,"width":743,"height":12}},{"id":"de213e9e-4860-4768-a07f-efe425b577d5","block_type":"box","text":"SEC on Form N-CSR (the “2025 Annual Financial Statements”), are incorporated in this SAI by","page_number":86,"box":{"x":116,"y":815,"width":706,"height":13}},{"id":"c9f02813-6cba-4dcc-a247-04c6cef9f68e","block_type":"box","text":"reference. No other parts of the 2025 Annual Financial Statements are incorporated by reference","page_number":86,"box":{"x":117,"y":831,"width":724,"height":12}},{"id":"46d46a20-dd96-4657-98fb-84f45fede979","block_type":"box","text":"herein. The 2025 Annual Financial Statements have been audited by PricewaterhouseCoopers LLP.","page_number":86,"box":{"x":117,"y":846,"width":748,"height":13}},{"id":"9303096e-0259-421c-ab61-f71d50cfc5d0","block_type":"box","text":"The report of PricewaterhouseCoopers LLP is incorporated herein by reference. Such 2025 Annual","page_number":86,"box":{"x":116,"y":862,"width":741,"height":12}},{"id":"d4d214a3-0988-4817-8853-34b26fca996a","block_type":"box","text":"Financial Statements have been incorporated herein in reliance upon the report of such firm given their","page_number":86,"box":{"x":117,"y":877,"width":768,"height":13}},{"id":"28c15068-743e-46f5-a3e9-40ca7a47dcfd","block_type":"box","text":"78","page_number":86,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"27e7e44b-3919-4df6-90e4-8122e862f766","block_type":"box","text":"NM1026U-6030748-86/260","page_number":86,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"6bf41fa7-88e6-4ee9-a35c-eba16f5cbcd1","block_type":"box","text":"authority as experts in accounting and auditing. Additional copies of the Fund’s annual and semi","page_number":87,"box":{"x":116,"y":87,"width":718,"height":12}},{"id":"18cbbccf-9bd5-45ed-85d5-f90b596cdc06","block_type":"box","text":"annual reports to shareholders and the Fund’s Annual and Semi-Annual Financial Statements and","page_number":87,"box":{"x":116,"y":102,"width":734,"height":12}},{"id":"d6e5f7da-43c4-48b0-bf0a-8175baa10dd6","block_type":"box","text":"Additional Information may be obtained at no charge by telephoning the Distributor at the telephone","page_number":87,"box":{"x":116,"y":118,"width":744,"height":12}},{"id":"bbb6549c-fa87-408e-9b41-4d520fcc33d9","block_type":"box","text":"number appearing on the front page of this SAI.","page_number":87,"box":{"x":117,"y":134,"width":358,"height":12}},{"id":"82d4614a-f4c8-43d5-94d0-f7060a5d9117","block_type":"box","text":"79","page_number":87,"box":{"x":491,"y":909,"width":17,"height":9}},{"id":"4bdc3618-de0e-45c0-9385-bbb68a48c681","block_type":"box","text":"NM1026U-6030748-87/260","page_number":87,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"9595284a-08af-4eff-ab79-a858fa00fe1a","block_type":"box","text":"PART II","page_number":88,"box":{"x":432,"y":92,"width":149,"height":22}},{"id":"98cba869-37a2-45eb-96a9-7ad370741724","block_type":"box","text":"Throughout this Statement of Additional Information (“SAI”), each BlackRock-advised fund may be","page_number":88,"box":{"x":116,"y":143,"width":734,"height":12}},{"id":"1780f043-3428-4de4-a842-62ebceb6521a","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":88,"box":{"x":117,"y":158,"width":770,"height":13}},{"id":"f1bbf9d5-aaea-47b6-8747-a731a8aa371b","block_type":"box","text":"as “Municipal Funds” if they invest certain of their assets in municipal investments described below.","page_number":88,"box":{"x":116,"y":174,"width":743,"height":12}},{"id":"27cdeac9-ea26-46ec-a4d7-8a9b29828791","block_type":"box","text":"Each Fund is organized either as a Maryland corporation, a Massachusetts business trust or a","page_number":88,"box":{"x":117,"y":205,"width":704,"height":11}},{"id":"4b1554a5-9a45-4daa-924c-e7c16ba9c867","block_type":"box","text":"Delaware statutory trust. In each jurisdiction, nomenclature varies. For ease and clarity of presentation,","page_number":88,"box":{"x":117,"y":220,"width":769,"height":12}},{"id":"52747779-ad97-46dc-a94a-f76b9e6a5720","block_type":"box","text":"shares of common stock and shares of beneficial interest are referred to herein as “shares” or","page_number":88,"box":{"x":116,"y":235,"width":701,"height":10}},{"id":"24893258-7b52-4036-8f27-6445116be8b8","block_type":"box","text":"“Common Stock,” holders of shares of Common Stock are referred to as “shareholders,” the trustees","page_number":88,"box":{"x":116,"y":251,"width":752,"height":11}},{"id":"b90b674a-23fa-4fd6-8ad8-a708122c2c3b","block_type":"box","text":"or directors of each Fund are referred to as “Directors,” the boards of trustees/directors of each Fund","page_number":88,"box":{"x":116,"y":266,"width":754,"height":12}},{"id":"0dbf93b0-6bef-4456-97a8-98225adf6b6f","block_type":"box","text":"are referred to as the “Board of Directors” or the “Board,” BlackRock Advisors, LLC, BlackRock Fund","page_number":88,"box":{"x":116,"y":282,"width":752,"height":11}},{"id":"1bc4c3b8-a176-4444-b37f-8ee3337408d3","block_type":"box","text":"Advisors or their respective affiliates is the investment adviser or manager of each Fund and is referred","page_number":88,"box":{"x":116,"y":297,"width":771,"height":12}},{"id":"3a4d06e3-ff30-41db-a24b-1cc933569285","block_type":"box","text":"to herein as the “Manager” or “BlackRock,” and the investment advisory agreement or management","page_number":88,"box":{"x":116,"y":313,"width":745,"height":12}},{"id":"06aae31f-4316-40a2-9b4b-6861babadd01","block_type":"box","text":"agreement applicable to each Fund is referred to as the “Management Agreement.” Each Fund’s","page_number":88,"box":{"x":116,"y":328,"width":722,"height":13}},{"id":"ca74253f-f484-4f24-933a-fd7599b3cfb4","block_type":"box","text":"Articles of Incorporation or Declaration of Trust, together with all amendments thereto, is referred to as","page_number":88,"box":{"x":116,"y":344,"width":765,"height":12}},{"id":"da93c10d-d28e-474b-a9b7-94a8b48ca2b9","block_type":"box","text":"its “charter.” The Investment Company Act of 1940, as amended, is referred to herein as the","page_number":88,"box":{"x":117,"y":359,"width":689,"height":13}},{"id":"9e30c29c-0876-47ac-aa7c-32f028ab7daa","block_type":"box","text":"“Investment Company Act.” The Securities Act of 1933, as amended, is referred to herein as the","page_number":88,"box":{"x":116,"y":375,"width":719,"height":12}},{"id":"dc403410-0af3-43b2-981b-749c3464318b","block_type":"box","text":"“Securities Act.” The Securities and Exchange Commission is referred to herein as the “Commission”","page_number":88,"box":{"x":116,"y":390,"width":755,"height":13}},{"id":"3ec86a3d-fcfb-4f49-8e10-31192a2d98ea","block_type":"box","text":"or the “SEC.”","page_number":88,"box":{"x":116,"y":406,"width":103,"height":9}},{"id":"8e4516c8-892b-4989-b513-a3b4790d6cb3","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":88,"box":{"x":117,"y":436,"width":765,"height":12}},{"id":"80d788c6-0172-450d-b5c1-e73c8ab80156","block_type":"box","text":"corresponding “master” portfolio (each, a “Master Portfolio”) of a master limited liability company (each,","page_number":88,"box":{"x":116,"y":452,"width":770,"height":12}},{"id":"66f0cb55-c4fe-4ad9-966f-b75555d5bc8f","block_type":"box","text":"a “Master LLC”), a mutual fund that has the same objective and strategies as the Feeder Fund. All","page_number":88,"box":{"x":116,"y":467,"width":734,"height":12}},{"id":"a9848809-c939-4799-879d-80c6f8975114","block_type":"box","text":"investments are generally made at the level of the Master Portfolio. This structure is sometimes called","page_number":88,"box":{"x":117,"y":483,"width":761,"height":12}},{"id":"a96371d4-905f-4cc9-9469-8340622f9e76","block_type":"box","text":"a “master/feeder” structure. A Feeder Fund’s investment results will correspond directly to the","page_number":88,"box":{"x":116,"y":498,"width":700,"height":12}},{"id":"017c2191-241c-46ff-abf0-267abc4f0995","block_type":"box","text":"investment results of the underlying Master Portfolio in which it invests. For simplicity, this SAI uses the","page_number":88,"box":{"x":117,"y":514,"width":770,"height":12}},{"id":"10aeb654-96c0-4ab9-88de-3c39d3a62876","block_type":"box","text":"term “Fund” to include both a Feeder Fund and its Master Portfolio.","page_number":88,"box":{"x":116,"y":529,"width":503,"height":10}},{"id":"533cf2a5-8cf9-41d5-a20a-f6bad2dd26e5","block_type":"box","text":"Certain information contained herein may not be relevant to a particular Fund.","page_number":88,"box":{"x":117,"y":560,"width":582,"height":12}},{"id":"75d4b3e9-32db-4ee4-8403-e9f5a84c8582","block_type":"box","text":"Investment Risks and Considerations","page_number":88,"box":{"x":119,"y":610,"width":675,"height":23}},{"id":"297c3dc5-dafc-429a-8c81-ca30d26cfc7e","block_type":"box","text":"Set forth below are descriptions of some of the types of investments and investment strategies that one","page_number":88,"box":{"x":116,"y":661,"width":767,"height":12}},{"id":"aa69bfa1-fa2a-4f00-9b0d-d754d1c220ad","block_type":"box","text":"or more of the Funds may use, and the risks and considerations associated with those investments","page_number":88,"box":{"x":116,"y":677,"width":735,"height":12}},{"id":"b720a261-c4eb-47fe-a626-aeda4fe07bad","block_type":"box","text":"and investment strategies. Please see each Fund’s prospectuses (the “Prospectus”) and the","page_number":88,"box":{"x":116,"y":692,"width":685,"height":12}},{"id":"7d34ebeb-0eae-4c05-b760-327961df4b46","block_type":"box","text":"“Investment Objective and Policies,” “Investment Objectives and Policies” or “Investment Strategies","page_number":88,"box":{"x":116,"y":708,"width":737,"height":12}},{"id":"261cd3ca-4fdd-44ae-8438-dc9a39b0f86f","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":88,"box":{"x":116,"y":723,"width":714,"height":12}},{"id":"07c7889b-dc24-496f-b806-2d1d152f7a81","block_type":"box","text":"Fund’s investment policies and risks. Information contained in this section about the risks and","page_number":88,"box":{"x":117,"y":739,"width":692,"height":12}},{"id":"186f7ba4-0984-4ea6-95de-f990fe2ae028","block_type":"box","text":"considerations associated with a Fund’s investments and/or investment strategies applies only to those","page_number":88,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"3e260e2a-ef07-4a22-a1f2-e00a78d80e21","block_type":"box","text":"Funds specifically identified in Part I of this SAI as making each type of investment or using each","page_number":88,"box":{"x":117,"y":770,"width":716,"height":12}},{"id":"578c4aaa-b309-4a67-a7c4-86252592aea4","block_type":"box","text":"investment strategy (each, a “Covered Fund”). Information that does not apply to a Covered Fund does","page_number":88,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"675d6658-986a-4f2e-b9c9-5de2751f75c0","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":88,"box":{"x":117,"y":801,"width":735,"height":12}},{"id":"27f21345-2083-48d0-bee3-12ef2d3467d9","block_type":"box","text":"Fund. Only information that is clearly identified as applicable to a Covered Fund is considered to form a","page_number":88,"box":{"x":117,"y":816,"width":765,"height":12}},{"id":"b457b621-69d1-438d-a0fb-5c6d1dd3410f","block_type":"box","text":"part of that Covered Fund’s SAI.","page_number":88,"box":{"x":117,"y":832,"width":244,"height":12}},{"id":"07c172e5-9b99-47a7-8df3-08553da1c067","block_type":"box","text":"Asset-Backed Securities.","page_number":88,"box":{"x":116,"y":862,"width":200,"height":10}},{"id":"1504b98b-e846-417f-b983-86ead21721b9","block_type":"box","text":"Asset-backed securities are securities backed by home equity loans,","page_number":88,"box":{"x":317,"y":862,"width":519,"height":12}},{"id":"716f8e9e-5347-4d50-8867-8b7bf143b9ba","block_type":"box","text":"installment sale contracts, credit card receivables or other assets. Asset-backed securities are","page_number":88,"box":{"x":117,"y":878,"width":702,"height":11}},{"id":"884ae268-05ea-4335-93cd-39ce25356795","block_type":"box","text":"II-1","page_number":88,"box":{"x":489,"y":909,"width":20,"height":9}},{"id":"cdc54043-e26f-4174-b46d-6ff5b92ac3eb","block_type":"box","text":"NM1026U-6030748-88/260","page_number":88,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"f86227b7-7d73-47c7-9a1f-67eac6017a9d","block_type":"box","text":"“pass-through” securities, meaning that principal and interest payments — net of expenses — made by","page_number":89,"box":{"x":116,"y":87,"width":770,"height":12}},{"id":"6a7779c0-f556-423c-8b80-0bfa3cd67db1","block_type":"box","text":"the borrower on the underlying assets (such as credit card receivables) are passed through to a Fund.","page_number":89,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"e718886d-a746-493a-9eff-68b02056f175","block_type":"box","text":"The value of asset-backed securities, like that of traditional fixed-income securities, typically increases","page_number":89,"box":{"x":116,"y":118,"width":763,"height":12}},{"id":"d35a738f-acfc-47a4-bc80-ee649c287c6d","block_type":"box","text":"when interest rates fall and decreases when interest rates rise. However, asset-backed securities differ","page_number":89,"box":{"x":116,"y":134,"width":770,"height":11}},{"id":"cbc2914f-0a25-4e0b-a4d6-cb1524db48f6","block_type":"box","text":"from traditional fixed-income securities because of their potential for prepayment. The price paid by a","page_number":89,"box":{"x":116,"y":149,"width":755,"height":12}},{"id":"019f185a-3aab-4623-a417-ad3bbc6e3fb5","block_type":"box","text":"Fund for its asset-backed securities, the yield the Fund expects to receive from such securities and the","page_number":89,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"4e748299-093e-4e0d-8503-6b32f5dc0948","block_type":"box","text":"average life of the securities are based on a number of factors, including the anticipated rate of","page_number":89,"box":{"x":116,"y":180,"width":709,"height":12}},{"id":"969982a8-2bd7-48fb-bda0-65d8c4ee200e","block_type":"box","text":"prepayment of the underlying assets. In a period of declining interest rates, borrowers may prepay the","page_number":89,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"dae38dc7-9b91-42fa-b961-faa802410e0b","block_type":"box","text":"underlying assets more quickly than anticipated, thereby reducing the yield to maturity and the average","page_number":89,"box":{"x":117,"y":211,"width":769,"height":12}},{"id":"3412a604-c522-4640-8de9-4a570b46cdb9","block_type":"box","text":"life of the asset-backed securities. Moreover, when a Fund reinvests the proceeds of a prepayment in","page_number":89,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"0518b3a6-566f-4a2b-8bd7-a4edfcf662ad","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":89,"box":{"x":116,"y":242,"width":772,"height":12}},{"id":"adcca81c-5139-4c96-8c0b-ea976f5bf202","block_type":"box","text":"was prepaid. To the extent that a Fund purchases asset-backed securities at a premium, prepayments","page_number":89,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"f3d5a76b-c7d0-41d3-aea3-d87b61b775e6","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":89,"box":{"x":117,"y":273,"width":736,"height":12}},{"id":"45acd815-d497-4dc8-bcb9-eaecac167fd3","block_type":"box","text":"both scheduled payments and unscheduled prepayments will increase current and total returns and","page_number":89,"box":{"x":117,"y":289,"width":742,"height":12}},{"id":"387505be-5881-4b2b-8d64-23bb1bcbd4d6","block_type":"box","text":"unscheduled prepayments will also accelerate the recognition of income which, when distributed to","page_number":89,"box":{"x":117,"y":304,"width":738,"height":12}},{"id":"20c87c6d-3279-4ecb-b6f8-88dbbd0cbf8e","block_type":"box","text":"shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of the","page_number":89,"box":{"x":116,"y":320,"width":772,"height":12}},{"id":"4666a971-3e3f-43ba-8400-89f997daf824","block_type":"box","text":"underlying assets may occur at a slower than expected rate, creating maturity extension risk. This","page_number":89,"box":{"x":117,"y":335,"width":730,"height":12}},{"id":"0f58a3c5-94e3-4866-af45-21dad5bd64f8","block_type":"box","text":"particular risk may effectively change a security that was considered short- or intermediate-term at the","page_number":89,"box":{"x":117,"y":351,"width":762,"height":12}},{"id":"874969c2-dc0c-4fcc-992c-52278739c8d7","block_type":"box","text":"time of purchase into a longer term security. Since the value of longer-term securities generally","page_number":89,"box":{"x":116,"y":366,"width":710,"height":12}},{"id":"7ee30214-1098-46b1-ab33-4ee21fead40d","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than does the value of shorter-term","page_number":89,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"7a028768-7d08-4b20-9778-18e3ab251822","block_type":"box","text":"securities, maturity extension risk could increase the volatility of the Fund. When interest rates decline,","page_number":89,"box":{"x":116,"y":397,"width":766,"height":12}},{"id":"70e5d564-5a53-47c1-89f1-71bb0ebd06a4","block_type":"box","text":"the value of an asset-backed security with prepayment features may not increase as much as that of","page_number":89,"box":{"x":116,"y":413,"width":751,"height":12}},{"id":"766d1d66-f30a-428e-90f8-3df15ba797c2","block_type":"box","text":"other fixed-income securities, and, as noted above, changes in market rates of interest may accelerate","page_number":89,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"260720cb-cec5-4aa1-be36-9a75baaa8c44","block_type":"box","text":"or retard prepayments and thus affect maturities.","page_number":89,"box":{"x":116,"y":444,"width":368,"height":12}},{"id":"5fc3a7ce-fe5c-4481-94b5-67bd4f8944f0","block_type":"box","text":"Asset-Based Securities.","page_number":89,"box":{"x":116,"y":475,"width":190,"height":9}},{"id":"4160d7aa-ad2d-440e-b1fe-bc819570e3c4","block_type":"box","text":"Certain Funds may invest in debt, preferred or convertible securities, the","page_number":89,"box":{"x":307,"y":475,"width":548,"height":12}},{"id":"3687e1c8-0a7d-4dac-a166-c470c7e07e4b","block_type":"box","text":"principal amount, redemption terms or conversion terms of which are related to the market price of","page_number":89,"box":{"x":117,"y":490,"width":734,"height":12}},{"id":"556c4be6-1925-43e5-9956-a0333dd55706","block_type":"box","text":"some natural resource asset such as gold bullion. These securities are referred to as “asset-based","page_number":89,"box":{"x":116,"y":506,"width":737,"height":12}},{"id":"266a9803-f20d-47a1-b467-8fd6a74cbf24","block_type":"box","text":"securities.” A Fund will purchase only asset-based securities that are rated, or are issued by issuers","page_number":89,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"c58c071b-6aa1-45da-976d-a2ec3600c8b4","block_type":"box","text":"that have outstanding debt obligations rated, investment grade (for example, AAA, AA, A or BBB by","page_number":89,"box":{"x":116,"y":537,"width":744,"height":12}},{"id":"8a3610f9-53fa-49db-884d-93f53096f8c5","block_type":"box","text":"S&P Global Ratings (“S&P”) or Fitch Ratings (“Fitch”), or Baa by Moody’s Investors Service, Inc.","page_number":89,"box":{"x":116,"y":552,"width":719,"height":12}},{"id":"5bd4bdb1-2b91-4e4f-85f9-33dd6d580cff","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":89,"box":{"x":117,"y":568,"width":721,"height":12}},{"id":"e1b015cb-d89d-4dff-8568-66514fef24a1","block_type":"box","text":"Manager has determined to be of similar creditworthiness. Obligations ranked in the fourth highest","page_number":89,"box":{"x":117,"y":583,"width":733,"height":12}},{"id":"24ec7cd7-3e7d-4714-9922-85ca18a24af0","block_type":"box","text":"rating category, while considered “investment grade,” may have certain speculative characteristics and","page_number":89,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"cc98e578-49b2-4fd6-9eb6-0a0b7a2ec4f5","block_type":"box","text":"may be more likely to be downgraded than securities rated in the three highest rating categories. If an","page_number":89,"box":{"x":117,"y":614,"width":759,"height":12}},{"id":"547e4d16-306c-49e6-9923-4330de4fc9fe","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":89,"box":{"x":116,"y":630,"width":764,"height":12}},{"id":"9dce8e94-7d2f-4396-a38e-450b198b7dc9","block_type":"box","text":"such backing into account in determining the creditworthiness of the issuer. While the market prices for","page_number":89,"box":{"x":116,"y":645,"width":769,"height":12}},{"id":"82464834-0c2e-4c3c-907d-e1282d29c519","block_type":"box","text":"an asset-based security and the related natural resource asset generally are expected to move in the","page_number":89,"box":{"x":116,"y":661,"width":751,"height":12}},{"id":"288ad803-a953-4d6e-8499-88fdb330cab4","block_type":"box","text":"same direction, there may not be perfect correlation in the two price movements. Asset-based","page_number":89,"box":{"x":116,"y":676,"width":696,"height":12}},{"id":"921b8bab-a6ca-4864-a886-8fb5c9a7917c","block_type":"box","text":"securities may not be secured by a security interest in or claim on the underlying natural resource","page_number":89,"box":{"x":116,"y":692,"width":723,"height":12}},{"id":"9ab0a7d6-48a6-4ce2-98cb-875d4122db7f","block_type":"box","text":"asset. The asset-based securities in which a Fund may invest may bear interest or pay preferred","page_number":89,"box":{"x":116,"y":707,"width":716,"height":12}},{"id":"5ee9ead8-468e-46c6-be1b-8fa71959550f","block_type":"box","text":"dividends at below market (or even relatively nominal) rates. Certain asset-based securities may be","page_number":89,"box":{"x":116,"y":723,"width":738,"height":12}},{"id":"f46e12b8-80a2-4dc6-82eb-8cb2df96a9d2","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":89,"box":{"x":117,"y":738,"width":738,"height":12}},{"id":"04031ba7-7eb5-4497-96f9-2c084637143f","block_type":"box","text":"stated amount of the asset to which it is related. In such instance, because no Fund presently intends","page_number":89,"box":{"x":116,"y":754,"width":753,"height":12}},{"id":"e23b9992-a8fd-4c78-acd4-b9d1b68cd9ac","block_type":"box","text":"to invest directly in natural resource assets, a Fund would sell the asset-based security in the","page_number":89,"box":{"x":116,"y":769,"width":691,"height":12}},{"id":"d3d21c2c-a934-4498-ae92-cbfce2624cc2","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":89,"box":{"x":116,"y":785,"width":733,"height":12}},{"id":"0375e056-c9a8-4e0c-895c-692a545ca620","block_type":"box","text":"asset exceeds the stated principal amount and thereby realize the appreciation in the underlying asset.","page_number":89,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"bb218d10-8bad-4e49-a3e3-125e1dd59112","block_type":"box","text":"Precious Metal-Related Securities.","page_number":89,"box":{"x":116,"y":831,"width":256,"height":10}},{"id":"136ec44f-0d6f-4816-9f87-0760a4eeb7af","block_type":"box","text":"A Fund may invest in the equity and other securities of companies","page_number":89,"box":{"x":374,"y":831,"width":500,"height":12}},{"id":"63ec70ee-ddad-4a4a-b152-5873d900e299","block_type":"box","text":"that explore for, extract, process or deal in precious metals (","page_number":89,"box":{"x":116,"y":847,"width":447,"height":12}},{"id":"4d553900-f367-463c-8336-98e3cd528617","block_type":"box","text":"e.g.","page_number":89,"box":{"x":564,"y":849,"width":26,"height":10}},{"id":"d5fb116c-4fc0-4ef5-8694-84b0d993a6e6","block_type":"box","text":", gold, silver and platinum), and in","page_number":89,"box":{"x":593,"y":847,"width":255,"height":12}},{"id":"c1703338-6b6c-4353-9f24-b8e2539f4999","block_type":"box","text":"asset-based securities indexed to the value of such metals. Such securities may be purchased when","page_number":89,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"c8368a8c-1a96-45a2-811a-b1a6bf7aa3c1","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":89,"box":{"x":116,"y":878,"width":769,"height":12}},{"id":"40c1ff19-f8ce-4a61-ad7f-5c2be7877765","block_type":"box","text":"II-2","page_number":89,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"a1de03db-bdec-49f9-babf-0688d6fb7a73","block_type":"box","text":"NM1026U-6030748-89/260","page_number":89,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"723d15ea-2f3d-40bc-a826-48263432cf8a","block_type":"box","text":"assets or when the values of precious metals are expected to benefit from inflationary pressure or","page_number":90,"box":{"x":116,"y":87,"width":731,"height":12}},{"id":"d9f16be2-5226-470b-82fa-04ec79509c2c","block_type":"box","text":"other economic, political or financial uncertainty or instability. Based on historical experience, during","page_number":90,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"7501499c-f04a-4334-b807-5584765a2d46","block_type":"box","text":"periods of economic or financial instability the securities of companies involved in precious metals may","page_number":90,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"30c405ab-0756-4719-8207-492e9cb3f80f","block_type":"box","text":"be subject to extreme price fluctuations, reflecting the high volatility of precious metal prices during","page_number":90,"box":{"x":117,"y":134,"width":736,"height":12}},{"id":"5e6ddd64-4f59-44aa-998b-704101440e13","block_type":"box","text":"such periods. In addition, the instability of precious metal prices may result in volatile earnings of","page_number":90,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"6bd057e1-70b2-44a7-85de-4f4b5fbad8c2","block_type":"box","text":"precious metal-related companies, which may, in turn, adversely affect the financial condition of such","page_number":90,"box":{"x":117,"y":165,"width":754,"height":12}},{"id":"3d6bdcf9-340d-4bee-8d74-6c6e5cdfc92d","block_type":"box","text":"companies. The major producers of gold include the Republic of South Africa, Russia, Canada, the","page_number":90,"box":{"x":116,"y":180,"width":739,"height":12}},{"id":"94fc374f-bd22-4e3e-938e-5c1ef76d12c2","block_type":"box","text":"United States, Brazil and Australia. Sales of gold by Russia are largely unpredictable and often relate","page_number":90,"box":{"x":117,"y":196,"width":754,"height":12}},{"id":"aed2354f-de7b-4868-8a9d-bf1d012a5deb","block_type":"box","text":"to political and economic considerations rather than to market forces. Economic, financial, social and","page_number":90,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"8c1334d7-fbd1-4d95-99c6-da9fed5d7d63","block_type":"box","text":"political factors within South Africa may significantly affect South African gold production.","page_number":90,"box":{"x":117,"y":227,"width":663,"height":12}},{"id":"35e9ef61-7588-43d4-97d0-a9320073a05e","block_type":"box","text":"Borrowing and Leverage.","page_number":90,"box":{"x":116,"y":258,"width":201,"height":12}},{"id":"b00d016b-d504-419f-ab7b-a8ea390ad950","block_type":"box","text":"Each Fund may borrow as a temporary measure for extraordinary or","page_number":90,"box":{"x":318,"y":258,"width":517,"height":12}},{"id":"686f6c8f-8b69-45ab-b750-4ff1de6b2d90","block_type":"box","text":"emergency purposes, including to meet redemptions or to settle securities transactions. Certain Funds","page_number":90,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"903528e7-e856-4cfa-ac66-e604f1de62a1","block_type":"box","text":"will not purchase securities at any time when borrowings exceed 5% of their total assets, except (a) to","page_number":90,"box":{"x":116,"y":289,"width":761,"height":12}},{"id":"dc40a0ef-ce60-454a-96f7-6ba6244bd039","block_type":"box","text":"honor prior commitments or (b) to exercise subscription rights when outstanding borrowings have been","page_number":90,"box":{"x":117,"y":304,"width":768,"height":12}},{"id":"3bcde3a1-fe86-424d-8c80-2cd776741ee3","block_type":"box","text":"obtained exclusively for settlements of other securities transactions.","page_number":90,"box":{"x":116,"y":320,"width":508,"height":12}},{"id":"c34d81d2-3360-46e8-ab50-5f2a46c27bde","block_type":"box","text":"Certain Funds may also borrow in order to make investments, to the extent disclosed in such Fund’s","page_number":90,"box":{"x":117,"y":351,"width":748,"height":12}},{"id":"e34922cf-b25e-41f4-8d53-3c21b60d0c8e","block_type":"box","text":"Prospectus. The purchase of securities while borrowings are outstanding will have the effect of","page_number":90,"box":{"x":117,"y":366,"width":707,"height":12}},{"id":"c6cf1c5d-6f79-4239-9214-6ace1d069dbd","block_type":"box","text":"leveraging the Fund. Such leveraging increases the Fund’s exposure to capital risk, and borrowed","page_number":90,"box":{"x":117,"y":382,"width":731,"height":12}},{"id":"f89bcb7d-8c51-439d-bedf-0d626b100b75","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":90,"box":{"x":116,"y":397,"width":757,"height":12}},{"id":"cbac109f-ac49-4d28-973e-042fd3873762","block_type":"box","text":"an opportunity for greater total return, but, at the same time, creates special risks. For example,","page_number":90,"box":{"x":116,"y":413,"width":714,"height":12}},{"id":"9f4458b6-7776-47ee-8c3e-5cba315b0641","block_type":"box","text":"leveraging may exaggerate changes in the net asset value (“NAV”) of Fund shares and in the yield on","page_number":90,"box":{"x":117,"y":428,"width":758,"height":12}},{"id":"59006b34-918a-461a-98fe-5c6c654a3a2a","block_type":"box","text":"the Fund’s portfolio. Although the principal of such borrowings will be fixed, the Fund’s assets may","page_number":90,"box":{"x":116,"y":444,"width":734,"height":12}},{"id":"e741f22a-fc5b-42bc-a901-e680a32d1fb4","block_type":"box","text":"change in value during the time the borrowings are outstanding. Borrowings will create interest","page_number":90,"box":{"x":116,"y":459,"width":707,"height":12}},{"id":"5632eb24-c095-437d-94dd-656379498052","block_type":"box","text":"expenses for the Fund that can exceed the income from the assets purchased with the borrowings. To","page_number":90,"box":{"x":116,"y":475,"width":764,"height":12}},{"id":"d17ed579-581b-4864-a359-a3185f9accb1","block_type":"box","text":"the extent the income or capital appreciation derived from securities purchased with borrowed funds","page_number":90,"box":{"x":116,"y":490,"width":747,"height":12}},{"id":"45009ce9-ca7a-4f35-9f32-fd16a1e068ad","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":90,"box":{"x":116,"y":506,"width":768,"height":12}},{"id":"68669531-1a9e-422d-875d-161f2ff13a6c","block_type":"box","text":"if leverage had not been used. Conversely, if the income or capital appreciation from the securities","page_number":90,"box":{"x":117,"y":521,"width":735,"height":12}},{"id":"742759b1-5e1e-435f-8eb7-5b3ba810e9ca","block_type":"box","text":"purchased with such borrowed funds is not sufficient to cover the cost of borrowing, the return to the","page_number":90,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"0bf4e198-4884-4f7f-819e-57ccb74d9ac0","block_type":"box","text":"Fund will be less than if leverage had not been used and, therefore, the amount available for","page_number":90,"box":{"x":117,"y":552,"width":690,"height":12}},{"id":"27ce9790-c8b5-41c7-9c90-7481db79ff00","block_type":"box","text":"distribution to shareholders as dividends will be reduced. In the latter case, the Manager in its best","page_number":90,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"8993e939-a976-408b-8161-286c46bf545a","block_type":"box","text":"judgment nevertheless may determine to maintain the Fund’s leveraged position if it expects that the","page_number":90,"box":{"x":115,"y":583,"width":752,"height":12}},{"id":"be5dca8d-3472-4f8b-b629-e3bc94ed9b99","block_type":"box","text":"benefits to the Fund’s shareholders of maintaining the leveraged position will outweigh the current","page_number":90,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"05f7d785-8310-4e95-aff1-812e3c16906b","block_type":"box","text":"reduced return.","page_number":90,"box":{"x":117,"y":614,"width":117,"height":10}},{"id":"71101583-92be-4cd6-8b3f-1e0367b14fbf","block_type":"box","text":"Certain types of borrowings by a Fund may result in the Fund being subject to covenants in credit","page_number":90,"box":{"x":117,"y":645,"width":727,"height":12}},{"id":"f7b13c81-23e9-4641-b9a2-a0cfa12ce838","block_type":"box","text":"agreements relating to asset coverage, portfolio composition requirements and other matters. It is not","page_number":90,"box":{"x":116,"y":661,"width":753,"height":12}},{"id":"47e9b2a1-8be2-4547-81b4-7dadb2833243","block_type":"box","text":"anticipated that observance of such covenants would impede the Manager from managing a Fund’s","page_number":90,"box":{"x":116,"y":676,"width":739,"height":12}},{"id":"d581bd8c-04ef-4400-81c8-0bef8426f42c","block_type":"box","text":"portfolio in accordance with the Fund’s investment objectives and policies. However, a breach of any","page_number":90,"box":{"x":117,"y":692,"width":746,"height":12}},{"id":"765e92e1-05d4-4990-97c2-4576e20a74f6","block_type":"box","text":"such covenants not cured within the specified cure period may result in acceleration of outstanding","page_number":90,"box":{"x":116,"y":707,"width":732,"height":12}},{"id":"9e53411d-eee1-4695-a4a3-48be7d504df7","block_type":"box","text":"indebtedness and require the Fund to dispose of portfolio investments at a time when it may be","page_number":90,"box":{"x":117,"y":723,"width":706,"height":12}},{"id":"5776eac4-1c82-4a34-9639-23e8342ce3dd","block_type":"box","text":"disadvantageous to do so.","page_number":90,"box":{"x":116,"y":738,"width":195,"height":12}},{"id":"43ad2a97-573a-4612-ab23-2928c36cbe4a","block_type":"box","text":"Each Fund may at times borrow from affiliates of the Manager, provided that the terms of such","page_number":90,"box":{"x":117,"y":769,"width":699,"height":12}},{"id":"b4144c73-a401-466b-98ef-df9f95ea4ef7","block_type":"box","text":"borrowings are no less favorable than those available from comparable sources of funds in the","page_number":90,"box":{"x":117,"y":785,"width":701,"height":12}},{"id":"a55e08dd-3ba3-4062-94e5-b303ab58a9da","block_type":"box","text":"marketplace.","page_number":90,"box":{"x":117,"y":800,"width":94,"height":12}},{"id":"adf1f3c1-5bd6-44bb-a2ea-6406c2ff487a","block_type":"box","text":"Cash Management.","page_number":90,"box":{"x":117,"y":831,"width":151,"height":12}},{"id":"e6820666-37cb-4755-a9c0-0717bf8701c5","block_type":"box","text":"Generally, the Manager will employ futures and options on futures to provide","page_number":90,"box":{"x":269,"y":831,"width":578,"height":12}},{"id":"5176d62d-c505-4567-9806-7b3bcd003d30","block_type":"box","text":"liquidity necessary to meet anticipated redemptions or for day-to-day operating purposes. However, if","page_number":90,"box":{"x":117,"y":847,"width":756,"height":12}},{"id":"967ac787-daaf-463c-ad7a-a9b5df5ab82b","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":90,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"94585030-9b1c-40f4-b999-028a1cd06ca1","block_type":"box","text":"certain types of instruments with remaining maturities of 397 days or less for liquidity purposes. Such","page_number":90,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"6beac381-d9b2-43c4-a84d-7aef5c3046ac","block_type":"box","text":"II-3","page_number":90,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"509cee49-931c-4566-a2e5-7eac42b44c04","block_type":"box","text":"NM1026U-6030748-90/260","page_number":90,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"53890d88-c9c0-457d-9e0c-6e21cf357ba9","block_type":"box","text":"instruments would consist of: (i) obligations of the U.S. Government, its agencies, instrumentalities,","page_number":91,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"c74fafde-ba74-4466-a98f-b149747ea61b","block_type":"box","text":"authorities or political subdivisions (“U.S. Government Securities”); (ii) other fixed-income securities","page_number":91,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"6a458f86-71dc-4077-b1d6-fe2c8d674fa1","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":91,"box":{"x":117,"y":118,"width":721,"height":12}},{"id":"b30bbb09-d9de-42dc-a29f-471f7fc2835b","block_type":"box","text":"opinion of the Manager; (iii) commercial paper; (iv) bank obligations, including negotiable certificates of","page_number":91,"box":{"x":116,"y":134,"width":768,"height":12}},{"id":"2a55ff7b-9d27-4c54-a5e9-3729da791171","block_type":"box","text":"deposit, time deposits and bankers’ acceptances; and (v) repurchase agreements. At the time the","page_number":91,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"1f604e9f-563a-4b74-a9a8-872006111e25","block_type":"box","text":"Fund invests in commercial paper, bank obligations or repurchase agreements, the issuer or the","page_number":91,"box":{"x":117,"y":165,"width":718,"height":12}},{"id":"f889ad0f-576e-4985-9351-611270d2da67","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":91,"box":{"x":117,"y":180,"width":752,"height":12}},{"id":"1b57158e-d685-49c3-b65b-f43042124a2c","block_type":"box","text":"outstanding commercial paper, bank obligations or other short-term obligations rated Prime-1 by","page_number":91,"box":{"x":116,"y":196,"width":719,"height":12}},{"id":"e9163df6-df17-4818-82ca-7b644f09041a","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":91,"box":{"x":117,"y":211,"width":731,"height":12}},{"id":"ecd916be-5cdd-4f2a-80c1-3e7f8d2b0748","block_type":"box","text":"quality in the opinion of the Manager. For more information on money market instruments, see “Money","page_number":91,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"6a56b9fb-cc5a-41e6-b3ce-d52a65d39b9a","block_type":"box","text":"Market Securities” below.","page_number":91,"box":{"x":117,"y":242,"width":192,"height":10}},{"id":"afe43cd9-98dc-4ca8-ab98-1b0be2467a8e","block_type":"box","text":"Collateralized Debt Obligations.","page_number":91,"box":{"x":117,"y":273,"width":251,"height":12}},{"id":"b1bb2715-4192-4712-b659-3f14ab30db7a","block_type":"box","text":"Certain Funds may invest in collateralized debt obligations","page_number":91,"box":{"x":369,"y":273,"width":444,"height":12}},{"id":"0314cf77-b355-4407-8104-821665434905","block_type":"box","text":"(“CDOs”), which include collateralized bond obligations (“CBOs”), collateralized loan obligations","page_number":91,"box":{"x":117,"y":289,"width":713,"height":12}},{"id":"93631230-f15d-42b1-9265-7de8bfe6769c","block_type":"box","text":"(“CLOs”) and other similarly structured securities. CDOs are types of asset-backed securities. A CBO","page_number":91,"box":{"x":117,"y":304,"width":756,"height":12}},{"id":"2feba7c5-d1ce-4ff3-97b4-f8166a9fb080","block_type":"box","text":"is ordinarily issued by a trust or other special purpose entity (“SPE”) and is typically backed by a","page_number":91,"box":{"x":117,"y":320,"width":716,"height":12}},{"id":"7d8414fc-680f-498d-8006-d85c18fa89db","block_type":"box","text":"diversified pool of fixed-income securities (which may include high risk, below investment grade","page_number":91,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"acf867f9-0d33-415b-953a-3bcd562929a7","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":91,"box":{"x":116,"y":351,"width":722,"height":12}},{"id":"0fbdda6f-eeea-4dd2-aabc-2370060eb731","block_type":"box","text":"collateralized by a pool of loans, which may include, among others, domestic and non-U.S. senior","page_number":91,"box":{"x":116,"y":366,"width":729,"height":12}},{"id":"8c7c07b4-7ac8-479c-a9c0-c12d5d696966","block_type":"box","text":"secured loans, senior unsecured loans, and subordinate corporate loans, including loans that may be","page_number":91,"box":{"x":116,"y":382,"width":756,"height":12}},{"id":"7532e5d1-ddbd-4daa-b631-f7610d08fd80","block_type":"box","text":"rated below investment grade or equivalent unrated loans, held by such issuer. Investments in a CLO","page_number":91,"box":{"x":117,"y":397,"width":757,"height":12}},{"id":"d7bff6f7-9036-4b4a-9684-c0ec2259c6ce","block_type":"box","text":"organized outside of the United States may not be deemed to be foreign securities if the CLO is","page_number":91,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"779e4d90-1228-4980-9666-11b43cbaf01e","block_type":"box","text":"collateralized by a pool of loans, a substantial portion of which are U.S. loans. Although certain CDOs","page_number":91,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"bcd5b3af-a15b-460f-9911-9a288e9fc6cd","block_type":"box","text":"may benefit from credit enhancement in the form of a senior-subordinate structure, over","page_number":91,"box":{"x":117,"y":444,"width":655,"height":12}},{"id":"362f89a1-825f-428c-a0e4-718d900d15de","block_type":"box","text":"collateralization or bond insurance, such enhancement may not always be present, and may fail to","page_number":91,"box":{"x":116,"y":459,"width":735,"height":12}},{"id":"e397320e-6b58-4fcd-8e43-eeca1d58c7ed","block_type":"box","text":"protect a Fund against the risk of loss on default of the collateral. Certain CDO issuers may use","page_number":91,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"480d67d5-b336-410a-bf05-81a6a12603c2","block_type":"box","text":"derivatives contracts to create “synthetic” exposure to assets rather than holding such assets directly,","page_number":91,"box":{"x":116,"y":490,"width":758,"height":12}},{"id":"74ef2969-e93e-46e4-91be-cece438a7c53","block_type":"box","text":"which entails the risks of derivative instruments described elsewhere in this SAI. CDOs may charge","page_number":91,"box":{"x":116,"y":506,"width":742,"height":12}},{"id":"fc197b82-1496-407f-8194-e3f9b9d31d04","block_type":"box","text":"management fees and administrative expenses, which are in addition to those of a Fund.","page_number":91,"box":{"x":117,"y":521,"width":664,"height":12}},{"id":"d69f6ca0-2504-4b17-80c1-3ccd4e802ab9","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":91,"box":{"x":117,"y":552,"width":724,"height":12}},{"id":"d11d5f49-5268-48d4-afed-866c18ec615f","block_type":"box","text":"tranches, varying in risk and yield. The riskiest portion is the “equity” tranche, which bears the first loss","page_number":91,"box":{"x":116,"y":568,"width":765,"height":12}},{"id":"566a09cb-5cac-45b0-861e-c588adeb77c5","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":91,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"88cd5407-841b-42e9-a1bc-44bfd0b7c20f","block_type":"box","text":"from default (though such protection is not complete). Since it is partially protected from defaults, a","page_number":91,"box":{"x":116,"y":599,"width":737,"height":12}},{"id":"ef4267c7-bb13-466f-af14-0d057ede4cab","block_type":"box","text":"senior tranche from a CBO or CLO typically has higher ratings and lower yields than its underlying","page_number":91,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"5996a762-688f-4c69-b731-fa0f139844bb","block_type":"box","text":"securities, and may be rated investment grade. Despite the protection from the equity tranche, CBO or","page_number":91,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"d801d8c0-2d89-41a4-9983-63fd91e55516","block_type":"box","text":"CLO tranches can experience substantial losses due to actual defaults, downgrades of the underlying","page_number":91,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"78d4a4f8-ac51-421d-9bd4-8e875484b34d","block_type":"box","text":"collateral by rating agencies, forced liquidation of the collateral pool due to a failure of coverage tests,","page_number":91,"box":{"x":116,"y":661,"width":752,"height":12}},{"id":"ed001915-95d4-44bd-9d80-3f1d247ab192","block_type":"box","text":"increased sensitivity to defaults due to collateral default and disappearance of protecting tranches,","page_number":91,"box":{"x":117,"y":676,"width":728,"height":12}},{"id":"72cc6a12-04e3-4827-9985-8f787ff4930c","block_type":"box","text":"market anticipation of defaults as well as investor aversion to CBO or CLO securities as a class.","page_number":91,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"f5f83fde-0313-4274-acac-0be84e32263b","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":91,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"8016757e-3fa0-491b-a4aa-1b7d4b43431f","block_type":"box","text":"of obligations of the same type rather than cash), which involves continued exposure to default risk","page_number":91,"box":{"x":116,"y":723,"width":734,"height":12}},{"id":"1882ee07-cbc2-45dd-9f6a-7917cd9f1ecf","block_type":"box","text":"with respect to such payments.","page_number":91,"box":{"x":116,"y":738,"width":229,"height":12}},{"id":"d85df3db-9a15-49a5-8a86-c6a0bb2ebd61","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":91,"box":{"x":116,"y":769,"width":728,"height":12}},{"id":"fe5b90e7-a751-4710-ad41-27fbc1865664","block_type":"box","text":"class of the CDO in which a Fund invests. Normally, CBOs, CLOs and other CDOs are privately","page_number":91,"box":{"x":116,"y":785,"width":712,"height":12}},{"id":"01e06c59-ea25-4085-943d-7eb14e416440","block_type":"box","text":"offered and sold, and thus are not registered under the securities laws. However, an active dealer","page_number":91,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"19bd5fba-043e-447e-a5e5-896dca4291ad","block_type":"box","text":"market may exist for CDOs, allowing a CDO to qualify for Rule 144A transactions. In addition to the","page_number":91,"box":{"x":117,"y":816,"width":736,"height":12}},{"id":"139cbe55-a9d3-4ac7-9a8a-89359e024384","block_type":"box","text":"normal risks associated with fixed-income securities and asset-backed securities generally discussed","page_number":91,"box":{"x":117,"y":831,"width":755,"height":12}},{"id":"7e190fcf-d15f-4efe-9c81-ef570c72408c","block_type":"box","text":"elsewhere in this SAI, CDOs carry additional risks including, but not limited to: (i) the possibility that","page_number":91,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"c7c4c394-54da-4836-b023-bcc62b7a6fde","block_type":"box","text":"distributions from collateral securities will not be adequate to make interest or other payments; (ii) the","page_number":91,"box":{"x":116,"y":862,"width":756,"height":12}},{"id":"9012d52c-28ab-4616-8eb6-a0ae83521f11","block_type":"box","text":"risk that the collateral may default or decline in value or be downgraded, if rated by a nationally","page_number":91,"box":{"x":117,"y":878,"width":708,"height":12}},{"id":"9f3077e1-325f-464d-bb6a-6d4df0185efa","block_type":"box","text":"II-4","page_number":91,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"371df42b-bd57-414c-8f14-f8a4a156f49c","block_type":"box","text":"NM1026U-6030748-91/260","page_number":91,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"516d6b27-e6cc-44d3-a2df-39b085a41957","block_type":"box","text":"recognized statistical rating organization (“NRSRO”); (iii) a Fund may invest in tranches of CDOs that","page_number":92,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"1210cefa-fcda-431c-8a28-79ce9e5a2741","block_type":"box","text":"are subordinate to other tranches; (iv) the structure and complexity of the transaction and the legal","page_number":92,"box":{"x":116,"y":102,"width":736,"height":13}},{"id":"afd8fe07-bc27-47fd-8d4c-104a9614d76a","block_type":"box","text":"documents could lead to disputes among investors regarding the characterization of proceeds; (v) the","page_number":92,"box":{"x":116,"y":118,"width":760,"height":12}},{"id":"5b43fb0e-2062-4fbe-8c36-f2d09793e17a","block_type":"box","text":"investment return achieved by the Fund could be significantly different than those predicted by financial","page_number":92,"box":{"x":117,"y":134,"width":771,"height":12}},{"id":"24100628-4fd8-4255-aac0-265ff79b682b","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":92,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"b4535b74-21ec-42fa-b068-8c11bfdab9be","block_type":"box","text":"liquidation due to technical defaults such as coverage test failures; and (viii) the CDO’s manager may","page_number":92,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"225f943a-b7b7-4729-b7a0-b9ecb1865ef7","block_type":"box","text":"perform poorly.","page_number":92,"box":{"x":117,"y":180,"width":117,"height":12}},{"id":"e78c4bf8-e929-4d9f-8394-ef50b4f42f50","block_type":"box","text":"Commercial Paper.","page_number":92,"box":{"x":117,"y":211,"width":150,"height":12}},{"id":"192fb15a-dd25-4684-a9f7-efbc15b9362a","block_type":"box","text":"Certain Funds may purchase commercial paper. Commercial paper purchasable","page_number":92,"box":{"x":268,"y":211,"width":607,"height":12}},{"id":"06eb8850-be8c-4715-82b6-d6e990f2c159","block_type":"box","text":"by each Fund includes “Section 4(a)(2) paper,” a term that includes debt obligations issued in reliance","page_number":92,"box":{"x":117,"y":227,"width":760,"height":12}},{"id":"d555f3c7-bb0a-4c50-b41d-8cf229647871","block_type":"box","text":"on the “private placement” exemption from registration afforded by Section 4(a)(2) of the Securities","page_number":92,"box":{"x":116,"y":242,"width":739,"height":12}},{"id":"d4173006-92b1-462f-8d3c-2574313a2081","block_type":"box","text":"Act. Section 4(a)(2) paper is restricted as to disposition under the Federal securities laws, and is","page_number":92,"box":{"x":116,"y":258,"width":719,"height":12}},{"id":"f8eb536e-4b7e-4f4d-8b09-914fe5995750","block_type":"box","text":"frequently sold (and resold) to institutional investors such as the Fund through or with the assistance of","page_number":92,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"ec507291-1941-46a7-a13b-060448ce6faf","block_type":"box","text":"investment dealers who make a market in the Section 4(a)(2) paper, thereby providing liquidity. Certain","page_number":92,"box":{"x":117,"y":289,"width":769,"height":12}},{"id":"46b8833b-ef85-4ddd-b7bf-ef653266fef2","block_type":"box","text":"transactions in Section 4(a)(2) paper may qualify for the registration exemption provided in Rule 144A","page_number":92,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"4a5df11f-2c65-4681-922b-b41981ea7e74","block_type":"box","text":"under the Securities Act. Most Funds can purchase commercial paper rated (at the time of purchase)","page_number":92,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"ae398bcb-755a-4989-9935-4c4cbd895536","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":92,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"4eee884f-42cc-40fa-ad13-0c1628760c72","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":92,"box":{"x":116,"y":351,"width":675,"height":12}},{"id":"a791a498-f720-4e45-9905-d5036254acc5","block_type":"box","text":"Commercial paper is generally considered to be short-term unsecured debt of corporations. Like all","page_number":92,"box":{"x":117,"y":382,"width":740,"height":12}},{"id":"fdd7237d-f066-491d-a220-bc8655c0d5e1","block_type":"box","text":"fixed income securities, commercial paper prices are susceptible to fluctuations in interest rates. If","page_number":92,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"04023470-e077-4060-a51b-8f82f69dee12","block_type":"box","text":"interest rates rise, commercial paper prices will decline and vice versa. However, the short-term nature","page_number":92,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"653e6757-15db-4a4d-8da8-4aca269aca88","block_type":"box","text":"of a commercial paper investment generally makes it less susceptible to volatility than many other fixed","page_number":92,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"b474b65a-28f0-47ff-8eb5-ad416340ae76","block_type":"box","text":"income securities because interest rate risk typically increases as maturity lengths increase.","page_number":92,"box":{"x":117,"y":444,"width":686,"height":12}},{"id":"3f00321e-016c-4040-9071-e0a93444adb7","block_type":"box","text":"Commercial paper tends to yield smaller returns than longer-term corporate debt because securities","page_number":92,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"33123f27-f0ed-41b2-8302-63ac63d80448","block_type":"box","text":"with shorter maturities typically have lower effective yields than those with longer maturities.","page_number":92,"box":{"x":116,"y":475,"width":686,"height":12}},{"id":"f041e7e5-a985-4d2d-9380-cd04ed4d2d2c","block_type":"box","text":"Commodity-Linked Derivative Instruments and Hybrid Instruments.","page_number":92,"box":{"x":117,"y":506,"width":535,"height":12}},{"id":"4066fcf2-4fc5-4d8c-8471-78bb4ee30cef","block_type":"box","text":"Certain Funds seek to gain","page_number":92,"box":{"x":653,"y":506,"width":210,"height":12}},{"id":"dc156262-f980-4169-8449-f5ea8729f0cc","block_type":"box","text":"exposure to the commodities markets primarily through investments in hybrid instruments. Hybrid","page_number":92,"box":{"x":116,"y":521,"width":727,"height":12}},{"id":"168aa135-4fa9-4986-aabd-123c9c74ebfe","block_type":"box","text":"instruments are either equity or debt derivative securities with one or more commodity-dependent","page_number":92,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"43e275a4-6a3d-465d-a2db-bb67461cb60e","block_type":"box","text":"components that have payment features similar to a commodity futures contract, a commodity option","page_number":92,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"81b54986-ef7d-40aa-b56c-782dca46bd57","block_type":"box","text":"contract, or a combination of both. Therefore, these instruments are “commodity-linked.” They are","page_number":92,"box":{"x":116,"y":568,"width":731,"height":12}},{"id":"9caabb9e-4479-4e04-ab19-7187e04e44bf","block_type":"box","text":"considered “hybrid” instruments because they have both commodity-like and security-like","page_number":92,"box":{"x":116,"y":583,"width":667,"height":12}},{"id":"d736d7b8-e894-4339-8737-c9597d433e1e","block_type":"box","text":"characteristics. Hybrid instruments are derivative instruments because at least part of their value is","page_number":92,"box":{"x":116,"y":599,"width":738,"height":12}},{"id":"6e0535ec-67e1-4b73-b306-2842f34f7b53","block_type":"box","text":"derived from the value of an underlying commodity, futures contract, index or other readily measurable","page_number":92,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"ba286e25-ff5e-4d1e-b35f-99e0d67a886e","block_type":"box","text":"economic variable.","page_number":92,"box":{"x":116,"y":630,"width":145,"height":9}},{"id":"43860011-c809-4971-b581-b8c4d4255eb6","block_type":"box","text":"The prices of commodity-linked derivative instruments may move in different directions than","page_number":92,"box":{"x":116,"y":661,"width":680,"height":12}},{"id":"63590b64-23a8-47cb-821c-d25981b5cc44","block_type":"box","text":"investments in traditional equity and debt securities when the value of those traditional securities is","page_number":92,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"7e94f597-f77f-4d2e-9acf-1157e8cae179","block_type":"box","text":"declining due to adverse economic conditions. As an example, during periods of rising inflation, debt","page_number":92,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"8d68ee21-186c-4582-90ec-381ded5c24e0","block_type":"box","text":"securities have historically tended to decline in value due to the general increase in prevailing interest","page_number":92,"box":{"x":116,"y":707,"width":753,"height":12}},{"id":"c0dfbc41-28fa-432a-9b4c-b0800a2adb24","block_type":"box","text":"rates. Conversely, during those same periods of rising inflation, the prices of certain commodities, such","page_number":92,"box":{"x":117,"y":723,"width":763,"height":12}},{"id":"8eb34b7d-e376-4fc1-ba82-b813d7a341ae","block_type":"box","text":"as oil and metals, have historically tended to increase. Of course, there cannot be any guarantee that","page_number":92,"box":{"x":116,"y":738,"width":752,"height":12}},{"id":"c766eb90-10ba-458d-9d59-39f51b1906ba","block_type":"box","text":"these investments will perform in that manner in the future, and at certain times the price movements","page_number":92,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"93775ced-867e-4539-af6e-4cda9b50f8c3","block_type":"box","text":"of commodity-linked instruments have been parallel to those of debt and equity securities.","page_number":92,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"b09dd430-33d9-4d7c-897b-98f5a58c3913","block_type":"box","text":"Commodities have historically tended to increase and decrease in value during different parts of the","page_number":92,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"85fb4933-8e49-43f1-a03c-577a4496b055","block_type":"box","text":"business cycle than financial assets. Nevertheless, at various times, commodities prices may move in","page_number":92,"box":{"x":117,"y":800,"width":753,"height":12}},{"id":"af9ef0dc-18d0-41c8-8f55-d51e6dc5e751","block_type":"box","text":"tandem with the prices of financial assets and thus may not provide overall portfolio diversification","page_number":92,"box":{"x":116,"y":816,"width":725,"height":12}},{"id":"684035f8-1ecb-4520-b74a-8c20120681f2","block_type":"box","text":"benefits. Under favorable economic conditions, the Fund’s investments may be expected to under","page_number":92,"box":{"x":117,"y":831,"width":731,"height":12}},{"id":"ef997eec-6822-4397-8daa-ef284a18b8a6","block_type":"box","text":"perform an investment in traditional securities. Over the long term, the returns on the Fund’s","page_number":92,"box":{"x":117,"y":847,"width":688,"height":12}},{"id":"5dd1149e-355a-43b9-8ace-3a234c5153bc","block_type":"box","text":"investments are expected to exhibit low or negative correlation with stocks and bonds.","page_number":92,"box":{"x":117,"y":862,"width":643,"height":12}},{"id":"ec8ac40d-9a07-4985-8d38-427dc7d61e67","block_type":"box","text":"II-5","page_number":92,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"9e8af10b-7431-4871-88b3-5193490087e4","block_type":"box","text":"NM1026U-6030748-92/260","page_number":92,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"0f1d8f37-8ac4-4313-807b-bb8de7a90c71","block_type":"box","text":"Qualifying Hybrid Instruments.","page_number":93,"box":{"x":117,"y":87,"width":218,"height":12}},{"id":"1d3d77d8-82db-4a60-a714-66f5682d1780","block_type":"box","text":"Certain Funds may invest in hybrid instruments that qualify for exclusion","page_number":93,"box":{"x":336,"y":87,"width":533,"height":12}},{"id":"872ff1a3-cdba-44eb-8f57-15c30f87349b","block_type":"box","text":"from regulation under the Commodity Exchange Act","page_number":93,"box":{"x":116,"y":102,"width":383,"height":13}},{"id":"db5c00ea-c986-4297-85e1-47be95c55626","block_type":"box","text":"and the regulations adopted thereunder. A hybrid","page_number":93,"box":{"x":499,"y":103,"width":362,"height":12}},{"id":"54c89aab-6d1d-44a7-91c9-36d2ca199495","block_type":"box","text":"instrument that qualifies for this exclusion from r","page_number":93,"box":{"x":117,"y":118,"width":347,"height":12}},{"id":"864df485-deeb-4b56-8bfc-321d91159c16","block_type":"box","text":"egulation must be “predominantly a security.” A hybrid","page_number":93,"box":{"x":464,"y":118,"width":398,"height":12}},{"id":"12659810-e3e9-4cb3-a949-dabef9e6fc52","block_type":"box","text":"instrument is considered to be predominantly a security if","page_number":93,"box":{"x":117,"y":134,"width":415,"height":12}},{"id":"698a183b-5a3b-49a6-bc0c-ea5956031e55","block_type":"box","text":"f (a) the issuer of the hybrid instrument receives","page_number":93,"box":{"x":531,"y":134,"width":347,"height":12}},{"id":"d140a55c-9ee3-4d2a-ba57-8c839fa78094","block_type":"box","text":"payment in full of the purchase price of the hybr","page_number":93,"box":{"x":117,"y":149,"width":346,"height":12}},{"id":"642e8f3d-3d34-4438-aff4-65466971cc52","block_type":"box","text":"id instrument, substantially contemporaneously with","page_number":93,"box":{"x":463,"y":149,"width":380,"height":12}},{"id":"b5cdd470-269a-418c-b053-7cc531af85a3","block_type":"box","text":"delivery of the hybrid instrument; (b) the purchaser or","page_number":93,"box":{"x":116,"y":165,"width":387,"height":12}},{"id":"a5191a21-43e1-4f57-af0d-416b390ab918","block_type":"box","text":"r holder of the hybrid instrument is not required to","page_number":93,"box":{"x":502,"y":165,"width":359,"height":12}},{"id":"e57db59d-b063-4c40-bc7a-f7c0132aec69","block_type":"box","text":"make any payment to the issuer in addition to t","page_number":93,"box":{"x":117,"y":180,"width":335,"height":12}},{"id":"7d7ffbcf-09ee-4e99-80aa-46acdd6890a6","block_type":"box","text":"the purchase price paid under subparagraph (a), whether","page_number":93,"box":{"x":452,"y":180,"width":421,"height":12}},{"id":"dcec9e3c-6c85-4a76-862d-b4a16e7ee698","block_type":"box","text":"as margin, settlement payment, or otherwise, during the life","page_number":93,"box":{"x":116,"y":196,"width":423,"height":12}},{"id":"9a583943-983d-49a1-ba0d-a2de96e03539","block_type":"box","text":"fe of the hybrid instrument or at maturity; (c) the","page_number":93,"box":{"x":539,"y":196,"width":346,"height":12}},{"id":"3e65b26e-7dd3-4fb6-b495-5b4def5ab9d0","block_type":"box","text":"issuer of the hybrid instrument is not subject by t","page_number":93,"box":{"x":117,"y":211,"width":351,"height":12}},{"id":"2635d318-68c0-49f4-8de6-597b5105c65a","block_type":"box","text":"he terms of the instrument to mark-to-market margining","page_number":93,"box":{"x":469,"y":211,"width":406,"height":12}},{"id":"eb01edbd-e55b-40ff-b23a-c85649938fae","block_type":"box","text":"requirements; and (d) the hybrid instrument is not ma","page_number":93,"box":{"x":117,"y":227,"width":385,"height":12}},{"id":"556279d9-b0d5-497e-96ce-a8bd1c841959","block_type":"box","text":"rketed as a contract of sale of a commodity for","page_number":93,"box":{"x":504,"y":227,"width":341,"height":12}},{"id":"9287bdb8-af7e-4d2b-97a6-6c92b67ef3e8","block_type":"box","text":"future delivery (or option on such a contract) subjec","page_number":93,"box":{"x":116,"y":242,"width":374,"height":12}},{"id":"4387ac21-644e-48d3-aa34-c0b3ac0f6451","block_type":"box","text":"t to applicable provisions of the Commodity Exchange","page_number":93,"box":{"x":490,"y":242,"width":396,"height":12}},{"id":"767f1a86-2547-44d8-982b-9f28ffbec153","block_type":"box","text":"Act. Hybrid instruments may be principal protected, parti","page_number":93,"box":{"x":116,"y":258,"width":408,"height":12}},{"id":"c8a78412-67fe-4a96-b501-38219d9e989b","block_type":"box","text":"ally protected, or offer no principal protection. A","page_number":93,"box":{"x":525,"y":258,"width":349,"height":12}},{"id":"60735528-f3c2-4fcb-a267-4b18085df07f","block_type":"box","text":"principal protected hybrid instrument means that t","page_number":93,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"efc7a9c8-c8c7-434f-847c-9a4cf55c346d","block_type":"box","text":"he issuer will pay, at a minimum, the par value of the","page_number":93,"box":{"x":477,"y":273,"width":387,"height":12}},{"id":"b9a78a3a-2f0b-4afb-a103-6dfd0b9e5183","block_type":"box","text":"note at maturity. Therefore, if the commodity value to w","page_number":93,"box":{"x":117,"y":289,"width":389,"height":12}},{"id":"463ff4f6-e3cd-41f7-8a1f-d19a12db0139","block_type":"box","text":"which the hybrid instrument is linked declines over","page_number":93,"box":{"x":505,"y":289,"width":371,"height":12}},{"id":"e068e2b3-3cb4-479c-94d8-304b38e30492","block_type":"box","text":"the life of the note, the Fund will receive","page_number":93,"box":{"x":116,"y":304,"width":294,"height":11}},{"id":"5b677c41-8744-4c33-9ca3-5eb11cfa142c","block_type":"box","text":"at maturity the face or stated value of the note. With a principal","page_number":93,"box":{"x":410,"y":304,"width":461,"height":12}},{"id":"81035b48-21f5-45d1-92a2-ce7afe68f79a","block_type":"box","text":"protected hybrid instrument, the Fund will receive at matu","page_number":93,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"66781986-338b-4441-8895-acee2a108017","block_type":"box","text":"rity the greater of the","page_number":93,"box":{"x":535,"y":320,"width":155,"height":12}},{"id":"5a03c1a8-b170-4154-9f5f-6ee75fe03ced","block_type":"box","text":"par value of the note or","page_number":93,"box":{"x":691,"y":320,"width":173,"height":12}},{"id":"ce6c3aa3-889a-409a-94e1-d036531811cb","block_type":"box","text":"the increase in its value based on the underlying comm","page_number":93,"box":{"x":116,"y":335,"width":400,"height":12}},{"id":"358e35cb-b63f-4397-9c65-e3a855a6bf10","block_type":"box","text":"odity or index. This protection is, in effect, an","page_number":93,"box":{"x":518,"y":335,"width":329,"height":12}},{"id":"3e202d48-221f-4e75-b776-4ce2c7afca59","block_type":"box","text":"option whose value is subject to the volatility and","page_number":93,"box":{"x":116,"y":351,"width":359,"height":12}},{"id":"27bc2060-679f-46c8-a8c8-f1042e762487","block_type":"box","text":"price level of the underlying commodity. The Manager’s","page_number":93,"box":{"x":476,"y":351,"width":407,"height":12}},{"id":"e0f3b009-7f78-4cb8-b15f-8cdcf3411084","block_type":"box","text":"decision whether to use principal protection depends in","page_number":93,"box":{"x":116,"y":366,"width":405,"height":12}},{"id":"2fa6253e-b425-4f00-aec6-322cfd1e469a","block_type":"box","text":"part on the cost of the protection. In addition, the","page_number":93,"box":{"x":522,"y":366,"width":356,"height":12}},{"id":"ec44540d-7277-48a1-bbc8-17ad261b96fd","block_type":"box","text":"protection feature depends upon the ability","page_number":93,"box":{"x":117,"y":382,"width":314,"height":12}},{"id":"045952e6-97a1-4e58-a694-534c3a3f4965","block_type":"box","text":"of the issuer to meet its obligation to buy back the security,","page_number":93,"box":{"x":432,"y":382,"width":431,"height":12}},{"id":"b7dfc974-5a2c-43ad-bab1-1275aa8ec465","block_type":"box","text":"and, therefore, depends on the creditworthiness of the","page_number":93,"box":{"x":116,"y":397,"width":399,"height":12}},{"id":"4a7da5ca-9fe5-4882-89a0-47421817814a","block_type":"box","text":"issuer. With full principal protection, the Fund will","page_number":93,"box":{"x":516,"y":397,"width":358,"height":12}},{"id":"5c4027dd-df11-4bc4-a996-32d36409784d","block_type":"box","text":"receive at maturity of the hybrid instrument either","page_number":93,"box":{"x":117,"y":413,"width":356,"height":12}},{"id":"9ba4124e-43bd-4d40-9ef9-a00b2188b52d","block_type":"box","text":"r the stated par value of the hybrid instrument, or","page_number":93,"box":{"x":472,"y":413,"width":354,"height":12}},{"id":"c018d002-26a6-4634-aa59-ae7cf2511d4d","block_type":"box","text":"potentially, an amount greater than","page_number":93,"box":{"x":117,"y":428,"width":258,"height":12}},{"id":"7d209bf5-c6d4-443d-a0a8-13e9a7590c49","block_type":"box","text":"the stated par value if the underlying commodity, index, futures","page_number":93,"box":{"x":375,"y":428,"width":461,"height":12}},{"id":"468cbb80-7195-47e9-b111-ddad69a1f9ce","block_type":"box","text":"contract or economic variable to which the hybrid in","page_number":93,"box":{"x":116,"y":444,"width":373,"height":12}},{"id":"0407bd85-be02-4eb4-ab74-f8f65b7a761c","block_type":"box","text":"strument is linked has increased in value. Partially","page_number":93,"box":{"x":490,"y":444,"width":368,"height":12}},{"id":"9b50ca7d-9b75-4c93-8021-1921f9a26caa","block_type":"box","text":"protected hybrid instruments may suffer some loss of","page_number":93,"box":{"x":117,"y":459,"width":386,"height":12}},{"id":"13bbf014-6647-42b5-89f7-6177c362e519","block_type":"box","text":"f principal if the underlying commodity, index, futures","page_number":93,"box":{"x":502,"y":459,"width":383,"height":12}},{"id":"ea491597-36ee-4375-ac3a-e4f8dcf29603","block_type":"box","text":"contract or economic variable to which the hybrid ins","page_number":93,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"5797cc05-0233-41b8-a0d7-0abf61f2fe6c","block_type":"box","text":"trument is linked declines in value during the term of","page_number":93,"box":{"x":498,"y":475,"width":384,"height":12}},{"id":"01fa7a62-4003-46fc-ab7d-77b8b25bd4c8","block_type":"box","text":"the hybrid instrument. However, partially protected hy","page_number":93,"box":{"x":116,"y":490,"width":388,"height":12}},{"id":"bd323831-5c9a-42ad-82e7-dd16fb0e27a7","block_type":"box","text":"brid instruments have a specified limit as to the","page_number":93,"box":{"x":505,"y":490,"width":346,"height":12}},{"id":"a11ad3b9-b569-4f22-97fd-e06579f316e7","block_type":"box","text":"amount of principal that they may lose.","page_number":93,"box":{"x":116,"y":506,"width":286,"height":12}},{"id":"dd199ca8-b077-437f-8bde-49835d98fd92","block_type":"box","text":"Hybrid Instruments Without Principal Protection.","page_number":93,"box":{"x":116,"y":537,"width":355,"height":12}},{"id":"b25948c0-19e0-467f-af31-1825306c7333","block_type":"box","text":"Certain Funds may invest in hybrid instruments that","page_number":93,"box":{"x":473,"y":537,"width":393,"height":12}},{"id":"ff6f75a4-0e30-4afc-b4bc-a2506a07223f","block_type":"box","text":"offer no principal protection. At maturity, there is a risk that the underlying commodity price, futures","page_number":93,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"bf469b2c-b7d8-4867-bb3f-cac15c56a1f4","block_type":"box","text":"contract, index or other economic variable may have declined sufficiently in value such that some or all","page_number":93,"box":{"x":116,"y":568,"width":768,"height":12}},{"id":"f771fb02-568a-4a84-94d3-25ec0a0ad454","block_type":"box","text":"of the face value of the hybrid instrument might not be returned. The Manager, at its discretion, may","page_number":93,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"44b7fe12-fd78-4ef0-a921-f11d5b02e682","block_type":"box","text":"invest in a partially protected principal structured note or a note without principal protection. In deciding","page_number":93,"box":{"x":117,"y":599,"width":767,"height":12}},{"id":"34dfbb96-aa45-4bcc-a004-e05fec0fc20b","block_type":"box","text":"to purchase a note without principal protection, the Manager may consider, among other things, the","page_number":93,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"facb4f08-e964-4a63-bf66-4fb6dcc8af87","block_type":"box","text":"expected performance of the underlying commodity futures contract, index or other economic variable","page_number":93,"box":{"x":116,"y":630,"width":761,"height":12}},{"id":"8376741b-1a55-431c-afe8-93bc89cc3177","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":93,"box":{"x":116,"y":645,"width":717,"height":12}},{"id":"4186bd15-1dbc-4c25-a306-25a87b204ba4","block_type":"box","text":"believes are relevant.","page_number":93,"box":{"x":117,"y":661,"width":157,"height":9}},{"id":"93a61f37-eafb-4ba9-9c67-1323a21f134d","block_type":"box","text":"Limitations on Leverage.","page_number":93,"box":{"x":116,"y":692,"width":177,"height":12}},{"id":"fe28251f-146c-47ea-b043-3dcda8405f05","block_type":"box","text":"Some of the hybrid instruments in which a Fund may invest may involve","page_number":93,"box":{"x":300,"y":692,"width":522,"height":12}},{"id":"801e0016-ecbf-48b1-858d-b4c806f5a587","block_type":"box","text":"leverage. To avoid being subject to undue leverage risk,","page_number":93,"box":{"x":117,"y":707,"width":405,"height":12}},{"id":"a23a7da6-4293-4a88-b7f9-4652d694cb87","block_type":"box","text":"a Fund will seek to limit the amount of economic","page_number":93,"box":{"x":529,"y":707,"width":349,"height":10}},{"id":"90e6ac49-6529-4b74-a2c5-98d71ce4ae16","block_type":"box","text":"leverage it has under any one hybrid instrument t","page_number":93,"box":{"x":117,"y":723,"width":356,"height":12}},{"id":"7c99acdb-454b-41d7-8ad5-6ce2fefd4ecc","block_type":"box","text":"hat it buys and the leverage of the Fund’s overall","page_number":93,"box":{"x":474,"y":723,"width":352,"height":12}},{"id":"b6699a08-137b-442e-ba63-e9365708505b","block_type":"box","text":"portfolio. A Fund will not invest in a hybrid instrument i","page_number":93,"box":{"x":117,"y":738,"width":390,"height":12}},{"id":"baa0af75-3f4b-46a8-8a50-835efe41d5b5","block_type":"box","text":"f, at the time of purchase: (i) that instrument’s","page_number":93,"box":{"x":508,"y":738,"width":330,"height":12}},{"id":"52232b5e-8f5c-42a3-9d84-e17389894f4b","block_type":"box","text":"“leverage ratio” exceeds 300% of the price increase","page_number":93,"box":{"x":116,"y":754,"width":375,"height":12}},{"id":"72d20602-320b-43ea-9977-cf56ff3e1cf7","block_type":"box","text":"in the underlying commodity, futures contract, index","page_number":93,"box":{"x":497,"y":754,"width":375,"height":12}},{"id":"860ec05e-91dd-4c9d-a401-5568e642e25e","block_type":"box","text":"or other economic variable or (ii) the Fund’s “portfo","page_number":93,"box":{"x":116,"y":769,"width":369,"height":12}},{"id":"2cb6e3ad-19a4-4a0f-93b4-573f9b5a0926","block_type":"box","text":"lio leverage ratio” exceeds 150%, measured at the","page_number":93,"box":{"x":486,"y":769,"width":366,"height":12}},{"id":"798ac91b-ef06-43ee-a5a2-b1edc9ffd267","block_type":"box","text":"time of purchase. “Leverage ratio” is the expected in","page_number":93,"box":{"x":116,"y":785,"width":378,"height":12}},{"id":"19b53ee7-1000-42b4-b6bc-899027c73bda","block_type":"box","text":"crease in the value of a hybrid instrument, assuming","page_number":93,"box":{"x":496,"y":785,"width":379,"height":12}},{"id":"ec53d357-36eb-4574-883a-4631232fcb31","block_type":"box","text":"a one percent price increase in the underlying commodi","page_number":93,"box":{"x":116,"y":800,"width":403,"height":12}},{"id":"4c6d6158-e198-4d9e-82dc-5fd963fb836b","block_type":"box","text":"ty, futures contract, index or other economic","page_number":93,"box":{"x":520,"y":800,"width":320,"height":12}},{"id":"78dda822-5644-4272-bb69-dbf34c38e49b","block_type":"box","text":"factor. In other words, for a hybrid instrument wit","page_number":93,"box":{"x":116,"y":816,"width":352,"height":12}},{"id":"dd3ae15c-b937-4745-8f1b-055d7b94d9ac","block_type":"box","text":"h a leverage factor of 150%, a 1% gain in the underlying","page_number":93,"box":{"x":469,"y":816,"width":407,"height":12}},{"id":"6579b3b5-4e04-4dd1-8868-d7e8825cc789","block_type":"box","text":"economic variable would be expected to result in a","page_number":93,"box":{"x":116,"y":831,"width":373,"height":12}},{"id":"8d27ab9d-1420-445a-a0b0-7a172b7f1f54","block_type":"box","text":"1.5% gain in value for the hybrid instrument.","page_number":93,"box":{"x":491,"y":831,"width":323,"height":12}},{"id":"5ab9299a-3310-467e-8476-f7947d1dad3b","block_type":"box","text":"Conversely, a hybrid instrument with a leverage fact","page_number":93,"box":{"x":117,"y":847,"width":376,"height":12}},{"id":"c08598ef-1f70-4712-a904-fa792ac91ae1","block_type":"box","text":"or of 150% would suffer a 1.5% loss if the underlying","page_number":93,"box":{"x":494,"y":847,"width":387,"height":12}},{"id":"5ac0fedb-978a-46aa-80f2-863dff7ce1a5","block_type":"box","text":"economic variable lost 1% of its value. “Portfolio","page_number":93,"box":{"x":116,"y":862,"width":348,"height":10}},{"id":"ce38ab88-e1de-4569-adc8-dd9bf0c8115e","block_type":"box","text":"leverage ratio” is defined as the average (mean)","page_number":93,"box":{"x":465,"y":862,"width":359,"height":12}},{"id":"a146a49e-7be3-429b-ab35-b7a68c5ba7ae","block_type":"box","text":"leverage ratio of all instruments in a Fund’s portfolio, we","page_number":93,"box":{"x":117,"y":878,"width":405,"height":12}},{"id":"6d5a841b-d3b5-40f3-aba3-b755d228251b","block_type":"box","text":"ighted by the market values of such instruments","page_number":93,"box":{"x":523,"y":878,"width":353,"height":12}},{"id":"81d0c633-605f-4a42-bdbf-ba389c9aa95b","block_type":"box","text":"II-6","page_number":93,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"6888c05f-a685-4407-aa60-2e1b3a0845d7","block_type":"box","text":"NM1026U-6030748-93/260","page_number":93,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"113d70ea-d178-4a2e-a292-d1b9e8cb352a","block_type":"box","text":"or, in the case of futures contracts, their notional v","page_number":94,"box":{"x":116,"y":87,"width":355,"height":11}},{"id":"d2907a38-e2f1-44ad-a9e8-587c1aa2f1cb","block_type":"box","text":"values. A Fund may at times or from time to time decide","page_number":94,"box":{"x":471,"y":87,"width":412,"height":12}},{"id":"3406bbd8-5104-4ec4-a331-9372ee0486a1","block_type":"box","text":"not to use leverage in its investments or us","page_number":94,"box":{"x":117,"y":103,"width":310,"height":12}},{"id":"358572a1-f0b5-42cf-845e-5e63ad73aee0","block_type":"box","text":"e less leverage than may otherwise be allowable.","page_number":94,"box":{"x":428,"y":103,"width":363,"height":12}},{"id":"49954b7f-a916-4e6e-808d-893b9ee364b3","block_type":"box","text":"Counterparty Risk.","page_number":94,"box":{"x":117,"y":134,"width":136,"height":12}},{"id":"1420b863-f8ab-45c5-97ad-00704177e329","block_type":"box","text":"A significant risk of hybrid instruments is counterparty risk. Unlike exchange-traded","page_number":94,"box":{"x":255,"y":134,"width":625,"height":12}},{"id":"22bb5689-2374-414e-8b2d-c4f9588af84d","block_type":"box","text":"futures and options, which are standard contracts, hybrid instruments are customized securities, tailor","page_number":94,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"fefbbc7c-01c1-4cd9-bada-a62cf172c1a2","block_type":"box","text":"made by a specific issuer. With a listed futures or options contract, an investor’s counterparty is the","page_number":94,"box":{"x":117,"y":165,"width":740,"height":12}},{"id":"2a06ee49-2bfc-4a6e-9d4b-991b0250ec5e","block_type":"box","text":"exchange clearinghouse. Exchange clearinghouses are capitalized by the exchange members and","page_number":94,"box":{"x":116,"y":180,"width":738,"height":12}},{"id":"3cbeda81-c1f3-439d-b8e9-ce4f56b9de46","block_type":"box","text":"typically have high investment grade ratings (","page_number":94,"box":{"x":116,"y":196,"width":336,"height":12}},{"id":"2f989c6b-d4e4-4ae7-be14-f83e5e04df9c","block_type":"box","text":"e.g.","page_number":94,"box":{"x":453,"y":198,"width":26,"height":10}},{"id":"6a242900-bde7-4645-88e9-5fcb723abefc","block_type":"box","text":", ratings of AAA or AA by S&P). Therefore, the risk is","page_number":94,"box":{"x":482,"y":196,"width":396,"height":12}},{"id":"c62b62d4-dbd6-44bb-bc26-4c312a9f0fb2","block_type":"box","text":"small that an exchange clearinghouse might be unable to meet its obligations at maturity. However,","page_number":94,"box":{"x":116,"y":211,"width":743,"height":12}},{"id":"aafbfc07-9267-4fe3-91b4-22f92d0cd872","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":94,"box":{"x":116,"y":227,"width":715,"height":12}},{"id":"d96df4d9-df33-4290-97cd-bcf4740da36b","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":94,"box":{"x":117,"y":242,"width":767,"height":12}},{"id":"5190307f-8a03-4db4-8c01-03c310c324c7","block_type":"box","text":"under the structured note.","page_number":94,"box":{"x":117,"y":258,"width":196,"height":9}},{"id":"238df071-ab7f-49b9-b9c3-e97de063d646","block_type":"box","text":"Convertible Securities.","page_number":94,"box":{"x":117,"y":289,"width":180,"height":9}},{"id":"f24d9dae-c40b-4cf8-b1e8-45ee2e672260","block_type":"box","text":"A convertible security is a bond, debenture, note, preferred stock or other","page_number":94,"box":{"x":298,"y":289,"width":554,"height":12}},{"id":"18681add-6db7-487e-8890-f91f0bc15149","block_type":"box","text":"security that may be converted into or exchanged for a prescribed amount of common stock or other","page_number":94,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"4b2f67b1-20b5-4690-b246-12aa05d53d9f","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":94,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"43682017-147b-4b0c-8bf7-3dbd67151820","block_type":"box","text":"formula. A convertible security entitles the holder to receive interest paid or accrued on debt or the","page_number":94,"box":{"x":116,"y":335,"width":734,"height":12}},{"id":"ef553ce8-696a-403c-8b84-fdcf7ca60cb2","block_type":"box","text":"dividend paid on preferred stock until the convertible security matures or is redeemed, converted or","page_number":94,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"93042019-4df8-40f8-8927-0cf9399a6d9d","block_type":"box","text":"exchanged. Before conversion, convertible securities have characteristics similar to nonconvertible","page_number":94,"box":{"x":116,"y":366,"width":738,"height":12}},{"id":"f2d42368-0651-4ec6-a417-e6092c98e843","block_type":"box","text":"income securities in that they ordinarily provide a stable stream of income with generally higher yields","page_number":94,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"10960848-f430-4be9-b431-fd44f26d8741","block_type":"box","text":"than those of common stocks of the same or similar issuers, but lower yields than comparable","page_number":94,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"abf4551e-f763-4367-9391-f1c2a782f8aa","block_type":"box","text":"nonconvertible securities. The value of a convertible security is influenced by changes in interest rates,","page_number":94,"box":{"x":117,"y":413,"width":767,"height":12}},{"id":"a1262c4d-ebce-4e68-bbb2-44b769c69719","block_type":"box","text":"with investment value declining as interest rates increase and increasing as interest rates decline. The","page_number":94,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"8dcfd558-0ec2-47ea-bc0e-77073304af7f","block_type":"box","text":"credit standing of the issuer and other factors also may have an effect on the convertible security’s","page_number":94,"box":{"x":116,"y":444,"width":736,"height":12}},{"id":"3ca91218-13e1-4877-9b02-33d97580f62a","block_type":"box","text":"investment value. Convertible securities rank senior to common stock in a corporation’s capital","page_number":94,"box":{"x":117,"y":459,"width":706,"height":12}},{"id":"dc5f9875-3fb4-463b-9b57-9344bb158f4f","block_type":"box","text":"structure but are usually subordinated to comparable nonconvertible securities. Convertible securities","page_number":94,"box":{"x":116,"y":475,"width":757,"height":12}},{"id":"e3b52329-5322-44ad-b7cf-9192b2e26a73","block_type":"box","text":"may be subject to redemption at the option of the issuer at a price established in the convertible","page_number":94,"box":{"x":117,"y":490,"width":714,"height":12}},{"id":"c0946026-c5f3-4682-95d9-ac30f7ed2ec6","block_type":"box","text":"security’s governing instrument.","page_number":94,"box":{"x":116,"y":506,"width":241,"height":12}},{"id":"8c908ce8-681b-4136-b495-ccbe6a4b7165","block_type":"box","text":"The characteristics of convertible securities make them potentially attractive investments for an","page_number":94,"box":{"x":116,"y":537,"width":710,"height":12}},{"id":"35683e5b-d436-4136-b274-7b64141b6e34","block_type":"box","text":"investment company seeking a high total return from capital appreciation and investment income.","page_number":94,"box":{"x":117,"y":552,"width":727,"height":12}},{"id":"6937d1ae-00a6-4cc7-a261-694e826fa0fc","block_type":"box","text":"These characteristics include the potential for capital appreciation as the value of the underlying","page_number":94,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"9d30d378-35bb-47a0-8401-fbb1d307814b","block_type":"box","text":"common stock increases, the relatively high yield received from dividend or interest payments as","page_number":94,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"817520b8-3890-4af1-a33a-17e8f686a87b","block_type":"box","text":"compared to common stock dividends and decreased risks of decline in value relative to the underlying","page_number":94,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"18e33f8f-12c4-452a-99bc-0654eb931c6a","block_type":"box","text":"common stock due to their fixed-income nature. As a result of the conversion feature, however, the","page_number":94,"box":{"x":116,"y":614,"width":739,"height":11}},{"id":"2a506673-58c6-4e54-afb7-1589a56d9e5b","block_type":"box","text":"interest rate or dividend preference on a convertible security is generally less than would be the case if","page_number":94,"box":{"x":117,"y":630,"width":766,"height":12}},{"id":"a4a67206-b57f-4a51-b971-a3b04828ee26","block_type":"box","text":"the securities were issued in nonconvertible form.","page_number":94,"box":{"x":116,"y":645,"width":373,"height":10}},{"id":"eac31117-6cd2-4f82-9164-1765ce96be51","block_type":"box","text":"In analyzing convertible securities, the Manager will consider both the yield on the convertible security","page_number":94,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"d753af10-c029-4959-932f-110c0faa035f","block_type":"box","text":"relative to its credit quality and the potential capital appreciation that is offered by the underlying","page_number":94,"box":{"x":117,"y":692,"width":710,"height":12}},{"id":"1352f700-6e5e-4b27-822f-10790adb4ca7","block_type":"box","text":"common stock, among other things.","page_number":94,"box":{"x":116,"y":707,"width":265,"height":12}},{"id":"9d0097d0-c9fb-489c-b042-0471c7b8ebec","block_type":"box","text":"Convertible securities are issued and traded in a number of securities markets. Even in cases where a","page_number":94,"box":{"x":117,"y":738,"width":758,"height":10}},{"id":"c934563f-76c9-416a-a577-10781e018526","block_type":"box","text":"substantial portion of the convertible securities held by a Fund are denominated in U.S. dollars, the","page_number":94,"box":{"x":116,"y":754,"width":734,"height":12}},{"id":"80757fdc-ddf2-4b92-b6ac-35250f23572f","block_type":"box","text":"underlying equity securities may be quoted in the currency of the country where the issuer is domiciled.","page_number":94,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"b5b4e64f-3c21-4068-9bc1-59b44a7f4222","block_type":"box","text":"As a result, fluctuations in the exchange rate between the currency in which the debt security is","page_number":94,"box":{"x":116,"y":785,"width":707,"height":12}},{"id":"f80b1c4f-e569-4024-be4b-5a219f2e53e3","block_type":"box","text":"denominated and the currency in which the share price is quoted will affect the value of the convertible","page_number":94,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"302783c3-3a02-496c-bde0-a6bda5677d80","block_type":"box","text":"security. With respect to convertible securities denominated in a currency different from that of the","page_number":94,"box":{"x":116,"y":816,"width":728,"height":12}},{"id":"cc1144a5-44aa-4cc9-9770-5948056fcca0","block_type":"box","text":"underlying equity securities, the conversion price may be based on a fixed exchange rate established","page_number":94,"box":{"x":117,"y":831,"width":756,"height":12}},{"id":"8fdffaab-f9fe-47bd-a866-5e09ea10c9b6","block_type":"box","text":"at the time the security is issued, which may increase the effects of currency risk. As described below,","page_number":94,"box":{"x":116,"y":847,"width":763,"height":12}},{"id":"a45b7a8b-fecc-4f6f-9aaf-101ac4f45b2a","block_type":"box","text":"a Fund is authorized to enter into foreign currency hedging transactions in which it may seek to reduce","page_number":94,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"8ac6f5cc-604b-446d-a378-cf1704b5b17a","block_type":"box","text":"the effect of exchange rate fluctuations.","page_number":94,"box":{"x":116,"y":878,"width":298,"height":12}},{"id":"ec775b99-b3fa-4b07-834c-15815fd46da0","block_type":"box","text":"II-7","page_number":94,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"54a6659e-e45f-444d-9a38-373947d25000","block_type":"box","text":"NM1026U-6030748-94/260","page_number":94,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"ea6fc935-f3df-48fc-8eea-5093aecd45f6","block_type":"box","text":"Apart from currency considerations, the value of convertible securities is influenced by both the yield","page_number":95,"box":{"x":116,"y":87,"width":749,"height":12}},{"id":"3d2d10a6-89b6-4a86-8279-39205782d7b1","block_type":"box","text":"on nonconvertible securities of comparable issuers and by the value of the underlying common stock.","page_number":95,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"a0282fba-9666-46e3-8a1c-959c63daf9c6","block_type":"box","text":"The value of a convertible security viewed without regard to its conversion feature (","page_number":95,"box":{"x":116,"y":118,"width":617,"height":12}},{"id":"829b54e1-9c7e-45e0-b6b3-8a88a5b0cd38","block_type":"box","text":"i.e.","page_number":95,"box":{"x":734,"y":118,"width":20,"height":10}},{"id":"efceb030-73f8-4859-a118-7051402c35ae","block_type":"box","text":", strictly on the","page_number":95,"box":{"x":757,"y":118,"width":112,"height":12}},{"id":"c71240c8-8cf0-4829-80e7-4ec8cac6fca0","block_type":"box","text":"basis of its yield) is sometimes referred to as its “investment value.” To the extent interest rates","page_number":95,"box":{"x":117,"y":134,"width":709,"height":12}},{"id":"f6031610-4d6c-4e83-a008-9dda9fd6fd59","block_type":"box","text":"change, the investment value of the convertible security typically will fluctuate. At the same time,","page_number":95,"box":{"x":116,"y":149,"width":720,"height":12}},{"id":"5210ca05-b509-4dcd-b9f2-b2422ac47651","block_type":"box","text":"however, the value of the convertible security will be influenced by its “conversion value,” which is the","page_number":95,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"79f43b0a-4ee5-4cb5-ad55-0e46364e9ce1","block_type":"box","text":"market value of the underlying common stock that would be obtained if the convertible security were","page_number":95,"box":{"x":117,"y":180,"width":747,"height":12}},{"id":"ccdb9689-2f25-42bc-a9c7-e2f85ad85899","block_type":"box","text":"converted. Conversion value fluctuates directly with the price of the underlying common stock. If the","page_number":95,"box":{"x":116,"y":196,"width":746,"height":12}},{"id":"dd3671aa-a6fd-4e81-86ad-291210e25e05","block_type":"box","text":"conversion value of a convertible security is substantially below its investment value, the price of the","page_number":95,"box":{"x":116,"y":211,"width":748,"height":12}},{"id":"4fad20e2-06e5-412d-ba5c-e289618a05f7","block_type":"box","text":"convertible security is governed principally by its investment value. To the extent the conversion value","page_number":95,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"21caff0b-edff-4b9f-bf5a-fda67dfb6cb8","block_type":"box","text":"of a convertible security increases to a point that approximates or exceeds its investment value, the","page_number":95,"box":{"x":116,"y":242,"width":743,"height":12}},{"id":"ccd9dff1-c6b8-4c06-a691-adaac01cb385","block_type":"box","text":"price of the convertible security will be influenced principally by its conversion value. A convertible","page_number":95,"box":{"x":117,"y":258,"width":729,"height":12}},{"id":"efe1ced3-f92f-4baa-ad10-77a92ac22b1c","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":95,"box":{"x":116,"y":273,"width":768,"height":12}},{"id":"3d78d6bc-7938-41e5-bc7f-49ad1125577a","block_type":"box","text":"to acquire the underlying common stock while holding a fixed-income security. The yield and","page_number":95,"box":{"x":116,"y":289,"width":691,"height":12}},{"id":"60821357-4d92-4734-985c-670ff4e15e1c","block_type":"box","text":"conversion premium of convertible securities issued in Japan and the Euromarket are frequently","page_number":95,"box":{"x":116,"y":304,"width":718,"height":12}},{"id":"b5a0ed60-f6eb-4c71-b697-a01e1ce79e73","block_type":"box","text":"determined at levels that cause the conversion value to affect their market value more than the","page_number":95,"box":{"x":116,"y":320,"width":708,"height":9}},{"id":"b60aed5f-7cf3-4580-a8c9-8f2e35e58b66","block_type":"box","text":"securities’ investment value.","page_number":95,"box":{"x":116,"y":335,"width":215,"height":10}},{"id":"1dd3a600-665a-4edb-84dc-480bacbab77c","block_type":"box","text":"Holders of convertible securities generally have a claim on the assets of the issuer prior to the common","page_number":95,"box":{"x":117,"y":362,"width":770,"height":12}},{"id":"3778044f-d70e-40f5-9c72-d5022b116b74","block_type":"box","text":"stockholders but may be subordinated to other debt securities of the same issuer. A convertible","page_number":95,"box":{"x":116,"y":378,"width":713,"height":12}},{"id":"d0422a16-68de-4831-99d4-ed5dd0429853","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":95,"box":{"x":116,"y":393,"width":734,"height":12}},{"id":"9a5042d8-7dfe-4442-8792-99be238e999b","block_type":"box","text":"provision, indenture or other governing instrument pursuant to which the convertible security was","page_number":95,"box":{"x":117,"y":409,"width":723,"height":12}},{"id":"0e8435e1-6513-4dac-bff8-2693767e7fdc","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":95,"box":{"x":117,"y":424,"width":741,"height":12}},{"id":"2b2a0ce1-41e7-460f-b4b2-87c8f0daafc9","block_type":"box","text":"redeem the security, convert it into the underlying common stock or sell it to a third party. Certain","page_number":95,"box":{"x":117,"y":440,"width":723,"height":12}},{"id":"66a2294b-e2f5-42af-9b65-f1f9cc2df036","block_type":"box","text":"convertible debt securities may provide a put option to the holder, which entitles the holder to cause","page_number":95,"box":{"x":116,"y":455,"width":745,"height":12}},{"id":"9fa72345-fa0d-46a7-a29e-ea501fa86683","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":95,"box":{"x":116,"y":471,"width":745,"height":12}},{"id":"82c1ecc1-1ea0-4be6-a6a2-798f28ee2b28","block_type":"box","text":"security under certain circumstances.","page_number":95,"box":{"x":116,"y":486,"width":282,"height":12}},{"id":"c9c3f956-f053-4c53-b896-2ea9a962a519","block_type":"box","text":"A Fund may also invest in synthetic convertible securities. Synthetic convertible securities may include","page_number":95,"box":{"x":116,"y":513,"width":765,"height":12}},{"id":"d6372216-14e8-4367-be3f-41619cd0dce0","block_type":"box","text":"either Cash-Settled Convertibles or Manufactured Convertibles. “Cash-Settled Convertibles” are","page_number":95,"box":{"x":116,"y":529,"width":717,"height":9}},{"id":"b1f04296-9079-4826-b29d-d3aa54670d93","block_type":"box","text":"instruments that are created by the issuer and have the economic characteristics of traditional","page_number":95,"box":{"x":117,"y":544,"width":701,"height":12}},{"id":"523ea326-520d-4b32-9b9d-59268fdcb03c","block_type":"box","text":"convertible securities but may not actually permit conversion into the underlying equity securities in all","page_number":95,"box":{"x":116,"y":560,"width":760,"height":12}},{"id":"bd318f5c-cc77-4d66-a4d1-fe88c0d18a03","block_type":"box","text":"circumstances. As an example, a private company may issue a Cash-Settled Convertible that is","page_number":95,"box":{"x":116,"y":575,"width":715,"height":12}},{"id":"891daab2-0231-466a-ba18-d4fa9dcc1c87","block_type":"box","text":"convertible into common stock only if the company successfully completes a public offering of its","page_number":95,"box":{"x":116,"y":591,"width":721,"height":12}},{"id":"41c712b4-b1f2-4c94-9324-9a53fdddf41e","block_type":"box","text":"common stock prior to maturity and otherwise pays a cash amount to reflect any equity appreciation.","page_number":95,"box":{"x":116,"y":606,"width":751,"height":12}},{"id":"e133cf7b-7c1d-4859-8576-001cd2963897","block_type":"box","text":"“Manufactured Convertibles” are created by the Manager or another party by combining separate","page_number":95,"box":{"x":116,"y":622,"width":726,"height":12}},{"id":"62eef896-326c-412b-a6a1-c360b01438a6","block_type":"box","text":"securities that possess one of the two principal characteristics of a convertible security,","page_number":95,"box":{"x":116,"y":637,"width":651,"height":12}},{"id":"80344e21-d029-4539-86d1-f1f27fde0085","block_type":"box","text":"i.e.","page_number":95,"box":{"x":767,"y":638,"width":21,"height":9}},{"id":"2a774ac8-1c5d-4d1a-8b14-acfc3eb45b13","block_type":"box","text":", fixed","page_number":95,"box":{"x":791,"y":637,"width":49,"height":12}},{"id":"dadb0428-ee7a-4249-9ed1-e0973492f80d","block_type":"box","text":"income (“fixed-income component”) or a right to acquire equity securities (“convertibility component”).","page_number":95,"box":{"x":117,"y":653,"width":756,"height":12}},{"id":"144482ae-2511-4cc1-bbb2-4138c9fc5c7a","block_type":"box","text":"The fixed-income component is achieved by investing in nonconvertible fixed-income securities, such","page_number":95,"box":{"x":116,"y":668,"width":751,"height":12}},{"id":"6b79f92e-e9dd-4bb3-9ffa-3594b1d1282a","block_type":"box","text":"as nonconvertible bonds, preferred stocks and money market instruments. The convertibility","page_number":95,"box":{"x":116,"y":684,"width":684,"height":12}},{"id":"831e6cb7-1020-4943-b490-5962d861260e","block_type":"box","text":"component is achieved by investing in call options, warrants, or other securities with equity conversion","page_number":95,"box":{"x":116,"y":700,"width":758,"height":12}},{"id":"a752ea33-d9e9-41bf-a60f-41146ecd68c6","block_type":"box","text":"features (“equity features”) granting the holder the right to purchase a specified quantity of the","page_number":95,"box":{"x":116,"y":715,"width":697,"height":12}},{"id":"a4340c6c-d674-42e3-a9b5-493591365e40","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":95,"box":{"x":117,"y":730,"width":745,"height":13}},{"id":"01b9faaa-f82c-499f-b90e-f2274fc8dc9e","block_type":"box","text":"option, the right to receive a cash payment based on the value of the underlying stock index.","page_number":95,"box":{"x":116,"y":746,"width":685,"height":12}},{"id":"741e8fb4-a43d-4959-ad39-4e8b69648cd3","block_type":"box","text":"A Manufactured Convertible differs from traditional convertible securities in several respects. Unlike a","page_number":95,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"3e8f19e5-a56a-4cc9-a6aa-b0ede1b67b13","block_type":"box","text":"traditional convertible security, which is a single security that has a unitary market value, a","page_number":95,"box":{"x":116,"y":789,"width":669,"height":12}},{"id":"a30ae17a-f6fe-4655-a612-0df30c0f978c","block_type":"box","text":"Manufactured Convertible is comprised of two or more separate securities, each with its own market","page_number":95,"box":{"x":117,"y":804,"width":742,"height":12}},{"id":"6608b81a-dc60-45d3-84fc-6aad459adc25","block_type":"box","text":"value. Therefore, the total “market value” of such a Manufactured Convertible is the sum of the values","page_number":95,"box":{"x":116,"y":820,"width":755,"height":11}},{"id":"d1f6ddc0-6233-4f88-bc13-1d0bc4380c96","block_type":"box","text":"of its fixed-income component and its convertibility component.","page_number":95,"box":{"x":116,"y":835,"width":472,"height":12}},{"id":"c38414fe-3082-49ea-9a54-74e31708fbde","block_type":"box","text":"More flexibility is possible in the creation of a Manufact","page_number":95,"box":{"x":117,"y":862,"width":382,"height":12}},{"id":"c3d1fbbf-a40f-475f-af8f-67c1afcb3030","block_type":"box","text":"ctured Convertible than in the purchase of a traditional","page_number":95,"box":{"x":499,"y":862,"width":382,"height":12}},{"id":"7ab1e29b-4000-4aa5-9d81-aa50df1caa4c","block_type":"box","text":"convertible security. Because many corporations hav","page_number":95,"box":{"x":116,"y":878,"width":377,"height":12}},{"id":"ba1e8a4f-66c3-4bfe-a51b-a697712e63df","block_type":"box","text":"e not issued convertible securities, the Manager may","page_number":95,"box":{"x":493,"y":878,"width":380,"height":12}},{"id":"baa7cf64-7ec3-473e-9b3b-1eea96c7472e","block_type":"box","text":"II-8","page_number":95,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"3cb8abee-94e1-4bd9-bdbc-f2d9d419af45","block_type":"box","text":"NM1026U-6030748-95/260","page_number":95,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"d3f910a1-d2ae-49c8-a5d2-7a2fe4094f9f","block_type":"box","text":"combine a fixed-income instrument and an equity feature wit","page_number":96,"box":{"x":116,"y":87,"width":429,"height":12}},{"id":"d89f3358-6324-4607-8c9f-0b7fd0452887","block_type":"box","text":"h respect to the stock of the issuer of the fixed","page_number":96,"box":{"x":546,"y":87,"width":331,"height":12}},{"id":"d52a54da-cf34-4ad6-be8f-0617481d94c4","block_type":"box","text":"income instrument to create a synthetic converti","page_number":96,"box":{"x":117,"y":103,"width":338,"height":12}},{"id":"32561e6f-5299-4b6f-82b6-bd0a9af40c7e","block_type":"box","text":"ble security otherwise unavailable in the market. The","page_number":96,"box":{"x":457,"y":103,"width":378,"height":12}},{"id":"3336a22c-85d0-445c-bd87-fc8165ee9a0e","block_type":"box","text":"Manager may also combine a fixed-income instrument of","page_number":96,"box":{"x":117,"y":118,"width":405,"height":12}},{"id":"d43567b3-11c1-4189-ad92-f499b30f26a7","block_type":"box","text":"f an issuer with an equity feature with respect to the","page_number":96,"box":{"x":521,"y":118,"width":366,"height":12}},{"id":"49e100b1-7030-43b6-ac57-10415168bb5c","block_type":"box","text":"stock of a different issuer when the Manager belie","page_number":96,"box":{"x":116,"y":134,"width":354,"height":12}},{"id":"ff38bdf4-c6a4-4371-8167-4cc0fe131977","block_type":"box","text":"ves such a Manufactured Convertible would better","page_number":96,"box":{"x":471,"y":134,"width":362,"height":9}},{"id":"52061579-859c-4be8-83ea-2a6b8beec3cf","block_type":"box","text":"promote a Fund’s objective than alternative investment","page_number":96,"box":{"x":117,"y":149,"width":389,"height":12}},{"id":"285a6316-4aa2-4f7f-a03e-45ab83ab367c","block_type":"box","text":"s. For example, the Manager may combine an equity","page_number":96,"box":{"x":506,"y":149,"width":381,"height":12}},{"id":"f788fb03-452d-4a78-b53d-d66f9a856efc","block_type":"box","text":"feature with respect to an issuer’s stock with a fixed-in","page_number":96,"box":{"x":116,"y":165,"width":382,"height":11}},{"id":"8206297b-9e0a-4c01-8b6e-547108ae8011","block_type":"box","text":"come security of a different issuer in the same","page_number":96,"box":{"x":500,"y":165,"width":331,"height":12}},{"id":"5313e6a0-c3cc-430d-ac1e-a61627bb203e","block_type":"box","text":"industry to diversify the Fund’s credit exposure, or","page_number":96,"box":{"x":117,"y":180,"width":353,"height":12}},{"id":"02285cd2-c95a-4e0e-a042-9d38affb48e0","block_type":"box","text":"r with a U.S. Treasury instrument to create a","page_number":96,"box":{"x":470,"y":180,"width":315,"height":12}},{"id":"f928a44d-4092-454e-b825-cb0ff653308e","block_type":"box","text":"Manufactured Convertible with a higher credit profile t","page_number":96,"box":{"x":117,"y":196,"width":379,"height":12}},{"id":"a3177139-93fe-44d7-8366-fdd9f48399fd","block_type":"box","text":"han a traditional convertible security issued by that","page_number":96,"box":{"x":497,"y":196,"width":363,"height":12}},{"id":"e8b92f2f-646b-423c-9c35-c59bb0d5a087","block_type":"box","text":"issuer. A Manufactured Convertible also is a more fl","page_number":96,"box":{"x":117,"y":211,"width":366,"height":10}},{"id":"3638b6d1-30f9-4daf-a38b-43d59bfebb7e","block_type":"box","text":"exible investment in that its two components may be","page_number":96,"box":{"x":484,"y":211,"width":377,"height":12}},{"id":"47f347b0-599d-4853-9782-940c47684cdb","block_type":"box","text":"purchased separately and, upon purchasi","page_number":96,"box":{"x":117,"y":227,"width":293,"height":12}},{"id":"40cf5814-21ac-4882-8303-c8748db68556","block_type":"box","text":"ng the separate securities, “combined” to create a Manufactured","page_number":96,"box":{"x":412,"y":227,"width":461,"height":12}},{"id":"d1856162-bad8-47c1-aeae-e95b173d6484","block_type":"box","text":"Convertible. For example, the Fund may purchase a w","page_number":96,"box":{"x":117,"y":242,"width":375,"height":12}},{"id":"87ef2e3f-0967-4efa-80b0-59f614783c35","block_type":"box","text":"warrant for eventual inclusion in a Manufactured","page_number":96,"box":{"x":492,"y":242,"width":347,"height":10}},{"id":"a0fba22b-f211-4d5d-b4c2-0c1e5128a0ac","block_type":"box","text":"Convertible while postponing the purchase of a su","page_number":96,"box":{"x":117,"y":258,"width":354,"height":12}},{"id":"9742f506-92cd-4e9c-9e1a-74a4acb7cac8","block_type":"box","text":"itable bond to pair with the warrant pending development","page_number":96,"box":{"x":473,"y":258,"width":407,"height":12}},{"id":"8f6175fc-2d38-4047-8a53-16974ffdb477","block_type":"box","text":"of more favorable market conditions.","page_number":96,"box":{"x":116,"y":273,"width":265,"height":10}},{"id":"d40b9e6d-86b9-4d46-8d00-6e01b2d26e8a","block_type":"box","text":"The value of a Manufactured Convertible may respond to certain market fluctuations differently from a","page_number":96,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"5ccb0a55-46c6-4197-8e86-1fbb1e955391","block_type":"box","text":"traditional convertible security with similar characteristics. For example, in the event a Fund created a","page_number":96,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"d6802708-cfc3-4fd2-ae1e-a4625600749a","block_type":"box","text":"Manufactured Convertible by combining a short-term U.S. Treasury instrument and a call option on a","page_number":96,"box":{"x":117,"y":335,"width":752,"height":12}},{"id":"1b38c4e4-e698-40f5-95c5-6ca1cdb7e96e","block_type":"box","text":"stock, the Manufactured Convertible would be expected to outperform a traditional convertible of","page_number":96,"box":{"x":116,"y":351,"width":720,"height":12}},{"id":"04540823-b3d2-48ff-a30a-c4ba51850f33","block_type":"box","text":"similar maturity that is convertible into that stock during periods when Treasury instruments outperform","page_number":96,"box":{"x":116,"y":366,"width":767,"height":12}},{"id":"d608ad53-3bc8-4def-b8b6-c15a3f5c5505","block_type":"box","text":"corporate fixed-income securities and underperform during periods when corporate fixed-income","page_number":96,"box":{"x":116,"y":382,"width":722,"height":12}},{"id":"423f1006-a579-407c-8c59-5e9983014bfa","block_type":"box","text":"securities outperform Treasury instruments.","page_number":96,"box":{"x":116,"y":397,"width":329,"height":12}},{"id":"c1aed74f-3120-4fcf-a704-9862243916e8","block_type":"box","text":"Corporate Loans.","page_number":96,"box":{"x":117,"y":428,"width":137,"height":12}},{"id":"5e4a1b4a-f3d3-4248-975c-8cbc717d0951","block_type":"box","text":"Certain Funds may invest in corporate loans. Corporate loans are generally","page_number":96,"box":{"x":255,"y":428,"width":570,"height":12}},{"id":"4cb54581-9188-46f2-b97e-886c00235e49","block_type":"box","text":"non-investment grade floating rate instruments. Usually, they are freely callable at the issuer’s option.","page_number":96,"box":{"x":117,"y":444,"width":757,"height":12}},{"id":"9e812d80-052b-4758-af88-2935e99827b9","block_type":"box","text":"Certain Funds may invest in fixed and floating rate loans (“Loans”) arranged through private","page_number":96,"box":{"x":117,"y":459,"width":685,"height":12}},{"id":"1ef3702c-4d15-4616-9be1-4a2ef9a8d541","block_type":"box","text":"negotiations between a corporate borrower or a foreign sovereign entity and one or more financial","page_number":96,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"a67cec4e-dda6-405a-81fa-2c64e19df1e4","block_type":"box","text":"institutions or institutional investors (“Lenders”). A Fund may invest in such Loans in the form of","page_number":96,"box":{"x":117,"y":490,"width":712,"height":12}},{"id":"371f68a7-86f7-48e0-8557-1e629fcbf5a2","block_type":"box","text":"participations in Loans (“Participations”) and assignments of all or a portion of Loans from third parties","page_number":96,"box":{"x":117,"y":506,"width":761,"height":12}},{"id":"4ec8014e-a14f-4815-a2c1-bed359b89e03","block_type":"box","text":"(“Assignments”). A Fund considers these investments to be investments in debt securities for purposes","page_number":96,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"f2a58b16-566f-4298-bc5d-4016baf6abe7","block_type":"box","text":"of its investment policies. Participations typically will result in the Fund having a contractual relationship","page_number":96,"box":{"x":116,"y":537,"width":770,"height":12}},{"id":"d2b7890f-807c-4011-b642-3c19aebdb2d2","block_type":"box","text":"only with the Lender, not with the borrower. The Fund will have the right to receive payments of","page_number":96,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"53f415e8-41b7-4592-a4fc-4cf863fcba07","block_type":"box","text":"principal, interest and any fees to which it is entitled only from the Lender selling the Participation and","page_number":96,"box":{"x":117,"y":568,"width":756,"height":12}},{"id":"5c77bfef-00f4-4b9b-a9db-d42f34a6f2a1","block_type":"box","text":"only upon receipt by the Lender of the payments from the borrower. In connection with purchasing","page_number":96,"box":{"x":116,"y":583,"width":734,"height":12}},{"id":"de04b53f-b292-4e7a-a701-15b65942afe7","block_type":"box","text":"Participations, the Fund generally will have no right to enforce compliance by the borrower with the","page_number":96,"box":{"x":117,"y":599,"width":737,"height":12}},{"id":"d968d20d-520b-4d85-bebd-3651cd36b9a6","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":96,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"1978cd7b-b6c8-4c03-b821-b4fe8bf0b9e0","block_type":"box","text":"the Fund may not benefit directly from any collateral supporting the Loan in which it has purchased the","page_number":96,"box":{"x":116,"y":630,"width":766,"height":12}},{"id":"29175c18-e637-4d60-9432-af912304ef89","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":96,"box":{"x":117,"y":645,"width":763,"height":12}},{"id":"521efef9-8ff5-4e05-a3ef-0f991bb272ca","block_type":"box","text":"is selling the Participation. In the event of the insolvency of the Lender selling the Participation, the","page_number":96,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"15b5b7f2-71a9-4805-b06a-1fa9bd66a849","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":96,"box":{"x":117,"y":676,"width":758,"height":12}},{"id":"5a3a7ddb-474f-460f-8073-7d4f50b7fedf","block_type":"box","text":"the Lender and the borrower. The Fund will acquire Participations only if the Lender interpositioned","page_number":96,"box":{"x":116,"y":692,"width":734,"height":12}},{"id":"3de59f7f-d7d6-4462-939f-436d5d6b343e","block_type":"box","text":"between the Fund and the borrower is determined by the Fund’s manager to be creditworthy. When","page_number":96,"box":{"x":117,"y":707,"width":738,"height":12}},{"id":"aeb71920-1df4-43c1-a416-9d25e497d112","block_type":"box","text":"the Fund purchases Assignments from Lenders, the Fund will acquire direct rights against the borrower","page_number":96,"box":{"x":116,"y":723,"width":767,"height":12}},{"id":"5b2bd615-0f2c-4fc6-b9bb-bb9640b15bf9","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":96,"box":{"x":116,"y":738,"width":718,"height":12}},{"id":"b5d881d6-8abd-4d02-850b-fe8004bd8130","block_type":"box","text":"Participations and Assignments on a forward commitment or “when-issued” basis, whereby a Fund","page_number":96,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"8b3857f9-6080-425f-92ab-66351399940b","block_type":"box","text":"would agree to purchase a Participation or Assignment at set terms in the future. For more information","page_number":96,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"07286cfe-cdba-41f7-a3a1-c4c895fe7ed3","block_type":"box","text":"on forward commitments and when-issued securities, see “When-Issued Securities, Delayed Delivery","page_number":96,"box":{"x":116,"y":785,"width":753,"height":12}},{"id":"a04565fe-d274-4c6b-9c91-f3ab76ca4f3d","block_type":"box","text":"Securities and Forward Commitments” below.","page_number":96,"box":{"x":116,"y":800,"width":339,"height":10}},{"id":"380923c7-61eb-4339-a339-fd4b5599e2c2","block_type":"box","text":"A Fund may have difficulty disposing of Assignments and Participations. In certain cases, the market","page_number":96,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"c00665b3-7eee-40fd-b02a-73d604824ca1","block_type":"box","text":"for such instruments may lack sufficient liquidity, and therefore the Fund anticipates that in such cases","page_number":96,"box":{"x":116,"y":847,"width":764,"height":12}},{"id":"0146982e-ff80-4b27-84a9-934e28e0a3c5","block_type":"box","text":"such instruments could be sold only to a limited number of institutional investors. The lack of a","page_number":96,"box":{"x":116,"y":862,"width":704,"height":12}},{"id":"c922246a-838f-433f-a20c-4316bd0f3a3c","block_type":"box","text":"sufficiently liquid secondary market may have an adverse impact on the value of such instruments and","page_number":96,"box":{"x":116,"y":878,"width":765,"height":12}},{"id":"a13b2b23-ae5a-4651-a3fe-213e003dae87","block_type":"box","text":"II-9","page_number":96,"box":{"x":489,"y":909,"width":22,"height":9}},{"id":"266b8450-60f5-427b-b783-6af74c2c9fe6","block_type":"box","text":"NM1026U-6030748-96/260","page_number":96,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"2ba7058d-b009-4eca-91b3-11683b525d62","block_type":"box","text":"on the Fund’s ability to dispose of particular Assignments or Participations in response to a specific","page_number":97,"box":{"x":116,"y":87,"width":740,"height":12}},{"id":"51a0da72-a75f-4ad2-81c3-ca2e8d2ee50a","block_type":"box","text":"economic event, such as deterioration in the creditworthiness of the borrower.","page_number":97,"box":{"x":116,"y":102,"width":583,"height":12}},{"id":"3ff088ed-b9f2-493d-b7c4-c7c3fef6247e","block_type":"box","text":"Leading financial institutions often act as agent for a broader group of Lenders, generally referred to as","page_number":97,"box":{"x":117,"y":132,"width":768,"height":12}},{"id":"f5f10bc2-87a3-441c-92a3-e9d10c0c5103","block_type":"box","text":"a syndicate. The syndicate’s agent arranges the loans, holds collateral and accepts payments of","page_number":97,"box":{"x":116,"y":147,"width":720,"height":12}},{"id":"e291ae97-aa56-4854-9df6-c788bcd7d47d","block_type":"box","text":"principal and interest. Failure by the syndicate agent to fulfill its obligations may delay or adversely","page_number":97,"box":{"x":117,"y":163,"width":734,"height":12}},{"id":"e5f460f9-34ee-49cb-a870-ea3d6dc393d9","block_type":"box","text":"affect receipt of payment by the Fund.","page_number":97,"box":{"x":116,"y":178,"width":287,"height":12}},{"id":"22284131-fb15-4a4d-b211-1bc565a9c8dc","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":97,"box":{"x":116,"y":207,"width":706,"height":12}},{"id":"4528b511-1508-4a78-88df-4d27b2a44a86","block_type":"box","text":"Although borrowers frequently provide collateral to secure repayment of these obligations they do not","page_number":97,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"e071d4b0-5605-4972-9f40-35f899cf3d44","block_type":"box","text":"always do so. If they do provide collateral, the value of the collateral may not completely cover the","page_number":97,"box":{"x":116,"y":238,"width":732,"height":12}},{"id":"034f3728-611b-482e-a925-5ed7ca83d7db","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":97,"box":{"x":117,"y":254,"width":757,"height":12}},{"id":"8020492d-402a-496d-8be7-55db22f820df","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":97,"box":{"x":116,"y":269,"width":761,"height":12}},{"id":"f36ce5dd-0aba-4ab5-a626-eb5327c117a3","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":97,"box":{"x":116,"y":285,"width":762,"height":12}},{"id":"b8152431-a0a3-4f8c-a6b9-2fd71483d328","block_type":"box","text":"not recover its principal, may experience a long delay in recovering its investment and may not receive","page_number":97,"box":{"x":117,"y":300,"width":765,"height":12}},{"id":"4ebf477e-9c7e-48c0-96d3-5332fef3549d","block_type":"box","text":"interest during the delay.","page_number":97,"box":{"x":117,"y":316,"width":188,"height":12}},{"id":"86d700e7-f2c0-47ee-8497-1b7af2e8f22f","block_type":"box","text":"Transactions in corporate loans may settle on a delayed basis. As a result, the proceeds from the sale","page_number":97,"box":{"x":116,"y":345,"width":763,"height":12}},{"id":"01d035d1-4ff5-4436-870f-86df79876cde","block_type":"box","text":"of corporate loans may not be readily available to make additional investments or to meet a Fund’s","page_number":97,"box":{"x":116,"y":360,"width":738,"height":12}},{"id":"d6374b11-4dde-4ab0-9624-243076cc1373","block_type":"box","text":"redemption obligations. To the extent the extended settlement process gives rise to short-term liquidity","page_number":97,"box":{"x":117,"y":376,"width":765,"height":12}},{"id":"83ef1e9c-bc48-40ca-ac96-75acf1bf62d8","block_type":"box","text":"needs, a Fund may hold additional cash, sell investments or temporarily borrow from banks and other","page_number":97,"box":{"x":117,"y":391,"width":758,"height":12}},{"id":"250d4e9e-d6ea-4a67-9071-e5bed274b756","block_type":"box","text":"lenders.","page_number":97,"box":{"x":117,"y":407,"width":63,"height":9}},{"id":"b7fb557b-7e8e-43ab-9f04-46950d2f74e1","block_type":"box","text":"In certain circumstances, Loans may not be deemed to be securities under certain federal securities","page_number":97,"box":{"x":117,"y":436,"width":746,"height":12}},{"id":"5fbafbd3-39d1-455b-aa82-931c67886466","block_type":"box","text":"laws. Therefore, in the event of fraud or misrepresentation by a borrower or an arranger, Lenders and","page_number":97,"box":{"x":117,"y":451,"width":758,"height":12}},{"id":"e73dd63e-be66-4b15-a970-c6d543e11131","block_type":"box","text":"purchasers of interests in Loans, such as the Funds, may not have the protection of the anti-fraud","page_number":97,"box":{"x":117,"y":467,"width":729,"height":12}},{"id":"c332a5e1-347b-4a51-8449-81c8a9679691","block_type":"box","text":"provisions of the federal securities laws as would otherwise be available for bonds or stocks. Instead,","page_number":97,"box":{"x":117,"y":482,"width":755,"height":12}},{"id":"769fb02e-2120-4679-9534-61d0729d9df0","block_type":"box","text":"in such cases, parties generally would rely on the contractual provisions in the Loan agreement itself","page_number":97,"box":{"x":117,"y":498,"width":750,"height":12}},{"id":"a8d43863-9b37-4fbf-9bb6-be2dcd4014e6","block_type":"box","text":"and common-law fraud protections under applicable state law.","page_number":97,"box":{"x":116,"y":513,"width":467,"height":12}},{"id":"0eb99d0c-a381-4060-b190-d85920648070","block_type":"box","text":"Direct Lending.","page_number":97,"box":{"x":116,"y":543,"width":109,"height":11}},{"id":"c47538ed-13ed-4e17-bb77-2447e2535ebf","block_type":"box","text":"The Fund may act as the originator for direct loans and engage in direct lending. Direct","page_number":97,"box":{"x":226,"y":542,"width":641,"height":13}},{"id":"8f7350dc-d6d8-4d58-b326-a6d006768b01","block_type":"box","text":"loans between the Fund and a borrower may not be adm","page_number":97,"box":{"x":117,"y":558,"width":412,"height":12}},{"id":"078f64dd-ba2c-4a41-b977-f7a914240a48","block_type":"box","text":"inistered by an underwriter or agent bank. The","page_number":97,"box":{"x":531,"y":558,"width":340,"height":12}},{"id":"33bf949b-50b5-4523-ad0c-248f46ece2bf","block_type":"box","text":"Fund may provide financing to commercial borrowers di","page_number":97,"box":{"x":117,"y":573,"width":402,"height":13}},{"id":"13a6135e-532b-4591-b13e-9b9b4f3f315b","block_type":"box","text":"rectly or through companies acquired (or created)","page_number":97,"box":{"x":521,"y":573,"width":364,"height":13}},{"id":"eff05974-ca95-406c-aa62-d668e002c6c1","block_type":"box","text":"and owned by or otherwise affiliat","page_number":97,"box":{"x":116,"y":589,"width":244,"height":12}},{"id":"024a29ad-cfbc-449c-9e3a-ccb5b6371480","block_type":"box","text":"ed with the Fund. The terms of the","page_number":97,"box":{"x":360,"y":589,"width":255,"height":9}},{"id":"5932ce01-f0f1-4e1e-83a4-9762dded84d6","block_type":"box","text":"direct loans are negotiated with","page_number":97,"box":{"x":616,"y":589,"width":231,"height":12}},{"id":"0de9715e-3eb4-422b-87c4-7b19f8c8409d","block_type":"box","text":"borrowers in private transactions. Furthermore, a direct loan may be secured or unsecured.","page_number":97,"box":{"x":117,"y":605,"width":667,"height":12}},{"id":"3a966426-8313-44b6-88a6-2d4e4ef6a111","block_type":"box","text":"In determining whether to make a direct loan, the Fund will rely primarily upon the creditworthiness of","page_number":97,"box":{"x":117,"y":634,"width":755,"height":12}},{"id":"be0c29df-2b35-4db8-843c-6237be9590da","block_type":"box","text":"the borrower and/or any collateral for payment of interest and repayment of principal. The risks","page_number":97,"box":{"x":116,"y":649,"width":708,"height":12}},{"id":"664be170-5807-4193-a667-3a2fe7a1210d","block_type":"box","text":"associated with direct loans are substantially similar to those associated with investing in corporate","page_number":97,"box":{"x":116,"y":665,"width":733,"height":12}},{"id":"77102234-bf00-4c9f-8a07-1c910c982364","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":97,"box":{"x":117,"y":680,"width":764,"height":12}},{"id":"777507d5-2a73-44d1-a93b-976088a447f0","block_type":"box","text":"insolvent and, consequently, that the Fund will lose money on the loan. Furthermore, direct loans may","page_number":97,"box":{"x":117,"y":696,"width":755,"height":12}},{"id":"6a4304e8-15b9-4999-9edd-2b3dc96954f9","block_type":"box","text":"subject the Fund to liquidity and interest rate risk and certain direct loans may be deemed illiquid.","page_number":97,"box":{"x":116,"y":711,"width":720,"height":12}},{"id":"c73d8f90-0d61-4e55-ba76-4066bc75d1f3","block_type":"box","text":"Direct loans are not publicly traded and may not have a secondary market. The lack of a secondary","page_number":97,"box":{"x":117,"y":727,"width":737,"height":12}},{"id":"96509cd5-0ed8-4972-98bc-07459f0a58a7","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":97,"box":{"x":117,"y":742,"width":734,"height":12}},{"id":"41058b0e-5c9a-4d2e-bd55-6dd9215ee4f5","block_type":"box","text":"loan and/or to value the direct loan.","page_number":97,"box":{"x":117,"y":758,"width":260,"height":9}},{"id":"951a6019-4981-4f35-8d00-b3d784b7e826","block_type":"box","text":"When engaging in direct lending, the Fund’s performance may depend, in part, on the ability of the","page_number":97,"box":{"x":116,"y":787,"width":731,"height":12}},{"id":"43a7977c-6188-4c5e-b31e-9663f72437c0","block_type":"box","text":"Fund to originate loans on advantageous terms. In originating loans, the Fund will compete with a","page_number":97,"box":{"x":117,"y":802,"width":722,"height":12}},{"id":"59019ea3-63cd-4e0d-adbe-fca7ffd81dbf","block_type":"box","text":"broad spectrum of lenders. Increased competition for, or a diminishment in the available supply of,","page_number":97,"box":{"x":117,"y":818,"width":727,"height":12}},{"id":"53bcc206-acad-4f4c-b496-f7edc71857a7","block_type":"box","text":"qualifying loans could result in lower yields on such loans, which could reduce Fund performance.","page_number":97,"box":{"x":116,"y":833,"width":730,"height":12}},{"id":"0ce42f7a-b29d-4049-9ff2-510148366cdc","block_type":"box","text":"As part of its lending activities, the Fund may originate loans to companies that are experiencing","page_number":97,"box":{"x":116,"y":862,"width":719,"height":12}},{"id":"a2014944-86f6-4ce0-b5bc-73206e61f588","block_type":"box","text":"significant financial or business difficulties, including companies involved in bankruptcy or other","page_number":97,"box":{"x":116,"y":878,"width":710,"height":12}},{"id":"056ab5f8-2d49-4cdc-bd2f-f48d37bb7852","block_type":"box","text":"II-10","page_number":97,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2b98d1e2-7f64-428a-8b5c-cd0360c0c72a","block_type":"box","text":"NM1026U-6030748-97/260","page_number":97,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"5ef50c3a-30c7-4024-9083-fda05fdec8f4","block_type":"box","text":"reorganization and liquidation proceedings. Although the terms of such financing may result in","page_number":98,"box":{"x":117,"y":87,"width":701,"height":12}},{"id":"564da2de-0152-4e2a-a670-c11764d100b9","block_type":"box","text":"significant financial returns to the Fund, they involve a substantial degree of risk. The level of analytical","page_number":98,"box":{"x":116,"y":102,"width":768,"height":13}},{"id":"f4233472-aa43-4631-9f2e-f08e84b9fb87","block_type":"box","text":"sophistication, both financial and legal, necessary for successful financing to companies experiencing","page_number":98,"box":{"x":116,"y":118,"width":758,"height":12}},{"id":"b82a00bf-6f8c-49db-9a2e-60775b581d29","block_type":"box","text":"significant business and financial difficulties is unusually high.","page_number":98,"box":{"x":116,"y":134,"width":461,"height":12}},{"id":"ccbca858-025e-421c-a7fd-e8f1b32e1ea0","block_type":"box","text":"Credit Linked Securities.","page_number":98,"box":{"x":117,"y":162,"width":195,"height":10}},{"id":"90b62e7a-b9a8-4940-a188-df22804a68f4","block_type":"box","text":"Among the income producing securities in which a Fund may invest are","page_number":98,"box":{"x":313,"y":162,"width":541,"height":12}},{"id":"8e18605a-eaf8-4fb2-a64f-748f1ae53fd7","block_type":"box","text":"credit linked securities, which are issued by a limited purpose trust or other vehicle that, in turn, invests","page_number":98,"box":{"x":116,"y":178,"width":768,"height":12}},{"id":"742b37bd-daf2-4447-9e3a-40920b45750a","block_type":"box","text":"in a derivative instrument or basket of derivative instruments, such as credit default swaps, interest rate","page_number":98,"box":{"x":117,"y":193,"width":771,"height":12}},{"id":"313455d0-fbbd-40e6-8a07-e7eabdc1c6e0","block_type":"box","text":"swaps and other securities, in order to provide exposure to certain fixed-income markets. For instance,","page_number":98,"box":{"x":116,"y":209,"width":768,"height":12}},{"id":"bca3f365-b8ef-4504-b2d2-b080b546dc55","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":98,"box":{"x":116,"y":224,"width":765,"height":12}},{"id":"6881c69c-c4b8-4607-b34a-5c00a09c69de","block_type":"box","text":"certain market and/or to remain fully invested when more traditional income producing securities are","page_number":98,"box":{"x":116,"y":240,"width":748,"height":12}},{"id":"0ad4837d-7a64-4b05-b261-1fdeaedd5524","block_type":"box","text":"not available.","page_number":98,"box":{"x":117,"y":255,"width":103,"height":10}},{"id":"c546009f-3f7c-4ff4-a266-09a3ed6f1b96","block_type":"box","text":"Like an investment in a bond, investments in these credit linked securities represent the right to receive","page_number":98,"box":{"x":117,"y":284,"width":770,"height":12}},{"id":"13dc0133-474b-431a-bad9-c3858e5569d3","block_type":"box","text":"periodic income payments (in the form of distributions) and payment of principal at the end of the term","page_number":98,"box":{"x":117,"y":300,"width":761,"height":12}},{"id":"bc14853c-b0b8-46a4-8a6e-da606b6dab87","block_type":"box","text":"of the security.","page_number":98,"box":{"x":116,"y":315,"width":114,"height":12}},{"id":"c87163d0-f7d5-4322-b9b2-7aa55ff0be6e","block_type":"box","text":"However, these payments are conditioned on the issuer’s receipt of payments from, and the issuer’s","page_number":98,"box":{"x":117,"y":344,"width":748,"height":12}},{"id":"0fd7c072-72bc-4d9d-a412-3af656248639","block_type":"box","text":"potential obligations to, the counterparties to the derivative instruments and other securities in which","page_number":98,"box":{"x":117,"y":359,"width":747,"height":12}},{"id":"d0633948-23af-4bc5-a8f2-aad6421f371c","block_type":"box","text":"the issuer invests. For instance, the issuer may sell one or more credit default swaps, under which the","page_number":98,"box":{"x":116,"y":375,"width":762,"height":12}},{"id":"9dc0020b-f209-4c55-a35a-0cc69979557f","block_type":"box","text":"issuer would receive a stream of payments over the term of the swap agreements provided that no","page_number":98,"box":{"x":117,"y":390,"width":736,"height":12}},{"id":"f21ae1c5-5cbe-46d1-9874-0c7c833b7c17","block_type":"box","text":"event of default has occurred with respect to the referenced debt obligation upon which the swap is","page_number":98,"box":{"x":116,"y":406,"width":741,"height":12}},{"id":"b361754a-5a43-4aa7-a81f-8ac470297480","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":98,"box":{"x":117,"y":421,"width":756,"height":12}},{"id":"3755951d-379b-4a06-8a09-f37325f3c605","block_type":"box","text":"the counterparty the par (or other agreed upon value) of the referenced debt obligation. This, in turn,","page_number":98,"box":{"x":116,"y":437,"width":749,"height":12}},{"id":"2a5dbd75-e04c-434c-8280-5d6281678020","block_type":"box","text":"would reduce the amount of income and principal that","page_number":98,"box":{"x":116,"y":452,"width":404,"height":12}},{"id":"b660acf9-39aa-411a-9c08-4e0ae33fb41f","block_type":"box","text":"a Fund would receive. A Fund’s investments in","page_number":98,"box":{"x":521,"y":452,"width":351,"height":10}},{"id":"a32da427-357c-4791-938c-7aa50c391926","block_type":"box","text":"these instruments are indirectly subject to the risks associated with derivative instruments, including,","page_number":98,"box":{"x":116,"y":468,"width":750,"height":12}},{"id":"384613e5-ee7a-4a17-b05d-077075b8dfad","block_type":"box","text":"among others, credit risk, default or similar event risk, counterparty risk, interest rate risk, leverage risk","page_number":98,"box":{"x":116,"y":483,"width":766,"height":12}},{"id":"bd175f2e-d1a0-47d7-bf98-8c790ae11e42","block_type":"box","text":"and management risk. It is also expected that the securities will be exempt from registration under the","page_number":98,"box":{"x":116,"y":499,"width":761,"height":12}},{"id":"271ec0c4-9e70-4c45-b3c4-7737a99b9737","block_type":"box","text":"Securities Act. Accordingly, there may be no established trading market for the securities and they may","page_number":98,"box":{"x":116,"y":514,"width":771,"height":12}},{"id":"b1f0cb64-c488-42be-b075-238ce84de7ed","block_type":"box","text":"constitute illiquid investments.","page_number":98,"box":{"x":116,"y":530,"width":227,"height":12}},{"id":"bf1a39a1-899c-44cd-a94b-7d60f160c440","block_type":"box","text":"Debt Securities.","page_number":98,"box":{"x":116,"y":559,"width":126,"height":9}},{"id":"a5f70b6d-079d-4689-8618-012d7905800b","block_type":"box","text":"Debt securities, such as bonds, involve credit risk. This is the risk that the issuer will","page_number":98,"box":{"x":243,"y":559,"width":633,"height":11}},{"id":"7b0edb6a-62a2-4565-938f-f2239f8c453d","block_type":"box","text":"not make timely payments of principal and interest. The degree of credit risk depends on the issuer’s","page_number":98,"box":{"x":117,"y":574,"width":751,"height":12}},{"id":"f8189f5e-b929-4702-9220-07d6f89da716","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":98,"box":{"x":116,"y":590,"width":749,"height":12}},{"id":"afebb223-0721-4578-878f-874da7a22ad2","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":98,"box":{"x":117,"y":605,"width":763,"height":12}},{"id":"4fd99ff0-5b48-4975-a614-6cab0f3037bd","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":98,"box":{"x":116,"y":621,"width":754,"height":9}},{"id":"c47e5a63-d81e-422c-af34-ae9be02559de","block_type":"box","text":"Securities.","page_number":98,"box":{"x":116,"y":636,"width":83,"height":10}},{"id":"81ac75d5-a793-4411-a523-72b11dba28e5","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":98,"box":{"x":116,"y":665,"width":709,"height":12}},{"id":"b48e2ec8-3f26-40d4-ad87-0d22da712174","block_type":"box","text":"security may fall when interest rates rise. If interest rates move sharply in a manner not anticipated by","page_number":98,"box":{"x":116,"y":680,"width":755,"height":12}},{"id":"5069bab0-ff71-443b-9bd7-bfa718a83dc2","block_type":"box","text":"Fund management, a Fund’s investments in debt securities could be adversely affected and the Fund","page_number":98,"box":{"x":117,"y":696,"width":752,"height":12}},{"id":"d93af97b-692d-4677-8615-9d3e984c544f","block_type":"box","text":"could lose money. In general, the market price of debt securities with longer maturities will go up or","page_number":98,"box":{"x":116,"y":711,"width":735,"height":12}},{"id":"0a997cd4-8132-4eab-b25e-5dba7238d492","block_type":"box","text":"down more in response to changes in interest rates than will the market price of shorter-term debt","page_number":98,"box":{"x":116,"y":727,"width":725,"height":12}},{"id":"b1745a2b-d5ee-4197-a9c2-b25914966944","block_type":"box","text":"securities.","page_number":98,"box":{"x":116,"y":743,"width":74,"height":9}},{"id":"4086580b-33af-4bf7-a24d-9ceee154be31","block_type":"box","text":"During periods of rising interest rates, the average life of certain fixed-income securities is extended","page_number":98,"box":{"x":117,"y":771,"width":738,"height":12}},{"id":"6b378ab4-38ec-402f-8e0d-4121d1221346","block_type":"box","text":"because of slower than expected principal payments. This may lock in a below-market interest rate and","page_number":98,"box":{"x":117,"y":787,"width":765,"height":12}},{"id":"10658765-a5ca-441d-86f7-5680cc29a8df","block_type":"box","text":"extend the duration of these fixed-income securities, especially mortgage-related securities, making","page_number":98,"box":{"x":116,"y":802,"width":739,"height":12}},{"id":"c95efed8-29c4-4cef-9502-a258f18a6916","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":98,"box":{"x":116,"y":818,"width":750,"height":12}},{"id":"5796302f-4181-4ab0-8485-502c7690a92f","block_type":"box","text":"securities may exhibit additional volatility and lose value. This is known as extension risk.","page_number":98,"box":{"x":116,"y":833,"width":665,"height":12}},{"id":"08baa0f7-1e1e-4dad-a412-3d3ad2a396e0","block_type":"box","text":"The value of fixed-income securities in the Funds can be expected to vary inversely with changes in","page_number":98,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"4a839f8e-168e-4cea-bbd1-71ff3741e4d0","block_type":"box","text":"prevailing interest rates. Fixed-income securities with longer maturities, which tend to produce higher","page_number":98,"box":{"x":117,"y":878,"width":753,"height":11}},{"id":"4a99d976-5387-43ee-b6fe-ca8dd1b54105","block_type":"box","text":"II-11","page_number":98,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"e584ec96-51a2-4485-8141-da6c1cce4346","block_type":"box","text":"NM1026U-6030748-98/260","page_number":98,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"30d6ff68-6d0b-4a37-b00d-6de71f1be62e","block_type":"box","text":"yields, are subject to potentially greater capital appreciation and depreciation than securities with","page_number":99,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"f32d0f60-67c2-4e48-a128-7b630eccdc97","block_type":"box","text":"shorter maturities. The Funds are not restricted to any maximum or minimum time to maturity in","page_number":99,"box":{"x":116,"y":103,"width":714,"height":12}},{"id":"2199238b-91f4-4db2-874e-f1b7f190399b","block_type":"box","text":"purchasing individual portfolio securities, and the average maturity of a Fund’s assets will vary.","page_number":99,"box":{"x":117,"y":118,"width":707,"height":12}},{"id":"f9ee360e-c18a-4816-8ade-90eb7ff72e3a","block_type":"box","text":"Floating and Variable Rate Securities","page_number":99,"box":{"x":116,"y":149,"width":277,"height":12}},{"id":"4be23ba8-bf60-42b6-b621-a7cf0dd49ee0","block_type":"box","text":". Certain Funds may invest in debt instruments that pay a variable","page_number":99,"box":{"x":395,"y":149,"width":493,"height":12}},{"id":"a2a600a3-49e6-4b6a-908d-58cd7afc6ee1","block_type":"box","text":"coupon rate. Securities with floating or variable interest rates can be less sensitive to interest rate","page_number":99,"box":{"x":116,"y":165,"width":728,"height":12}},{"id":"519fb1df-ed40-40ca-bfc8-f103209132fc","block_type":"box","text":"changes than securities with fixed interest rates, but may decline in value if their interest rates do not","page_number":99,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"e0ac0dcc-a1a2-4b08-aac4-98569d733d25","block_type":"box","text":"rise as much, or as quickly, as interest rates in general. Conversely, floating rate securities will not","page_number":99,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"19528bf0-e028-4f10-add4-11253f65fb48","block_type":"box","text":"generally increase in value if interest rates decline. The","page_number":99,"box":{"x":116,"y":211,"width":415,"height":12}},{"id":"0c794979-7f06-4488-9070-143667e3ee16","block_type":"box","text":"impact of interest rate changes on floating rate","page_number":99,"box":{"x":532,"y":211,"width":350,"height":12}},{"id":"fa30aefa-e62d-4abd-a30f-3a1078695b3f","block_type":"box","text":"investments is typically mitigated by the periodic interest rate reset of the investments. Benchmark","page_number":99,"box":{"x":117,"y":227,"width":733,"height":12}},{"id":"8923a1e4-9feb-4793-86ba-30c9d2fad01b","block_type":"box","text":"interest rates used for floating and variable rate securities may not accurately track market interest","page_number":99,"box":{"x":117,"y":242,"width":734,"height":12}},{"id":"17be4bcd-88a5-4d1e-86a0-4af9ef4b299b","block_type":"box","text":"rates.","page_number":99,"box":{"x":117,"y":258,"width":45,"height":9}},{"id":"d7cacc08-ede9-4647-87fe-a2ee4b8b0b44","block_type":"box","text":"Inflation-Indexed Bonds.","page_number":99,"box":{"x":117,"y":289,"width":179,"height":9}},{"id":"6370f9f3-9d41-447e-8d7e-b264e15bf5d7","block_type":"box","text":"Certain Funds may invest in inflation-indexed bonds, which are fixed-income","page_number":99,"box":{"x":297,"y":289,"width":577,"height":12}},{"id":"7267700d-a391-4319-9bcc-1e151324a1d7","block_type":"box","text":"securities or other instruments whose principal value is periodically adjusted according to the rate of","page_number":99,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"859c02d8-117a-41be-967c-ad4d1fe8d4ef","block_type":"box","text":"inflation. Two structures are common. The U.S. Treasury and some other issuers use a structure that","page_number":99,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"24087689-a494-4c21-a1dc-69242d0c2d66","block_type":"box","text":"accrues inflation into the principal value of the bond. Most other issuers pay out the Consumer Price","page_number":99,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"e186444b-8bf3-4bd2-8b90-d85e9018d3d3","block_type":"box","text":"Index (“CPI”) accruals as part of a semi-annual coupon.","page_number":99,"box":{"x":117,"y":351,"width":417,"height":12}},{"id":"f8f7c0f1-72cb-4852-9e50-4c8b6f794b2a","block_type":"box","text":"Inflation-indexed securities issued by the U.S. Treasury have maturities of five, ten or thirty years,","page_number":99,"box":{"x":117,"y":382,"width":728,"height":12}},{"id":"2bf1a3a0-175d-422b-acfa-13d439fb16d2","block_type":"box","text":"although it is possible that securities with other maturities will be issued in the future. The U.S.","page_number":99,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"bb8959d4-e6b7-45bb-bb3b-5f66b6ea20e7","block_type":"box","text":"Treasury securities pay interest on a semi-annual basis, equal to a fixed percentage of the inflation","page_number":99,"box":{"x":116,"y":413,"width":738,"height":12}},{"id":"b8d5b269-c4f9-484f-93c7-c12c445d0101","block_type":"box","text":"adjusted principal amount. For example, if a Fund purchased an inflation-indexed bond with a par","page_number":99,"box":{"x":116,"y":428,"width":727,"height":12}},{"id":"e9071d57-fd7c-4a35-8c50-8747a2363441","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":99,"box":{"x":116,"y":443,"width":753,"height":13}},{"id":"e1c9fddf-3b52-4a01-ae4a-7d71ea566ded","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":99,"box":{"x":116,"y":458,"width":736,"height":13}},{"id":"f50f4ada-270a-4e84-b134-30c58cd33b0d","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":99,"box":{"x":116,"y":474,"width":766,"height":13}},{"id":"82a7e87b-da48-4f2e-b52f-eb2a16f52637","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":99,"box":{"x":116,"y":490,"width":764,"height":12}},{"id":"53c327db-a018-4653-b5c5-4fc6a6084705","block_type":"box","text":"$1,030 and the second semi-annual interest payment would be $15.45 ($1,030 times 1.5%).","page_number":99,"box":{"x":116,"y":505,"width":689,"height":13}},{"id":"bf02dc0a-0a67-47c7-a1d3-618a8a99c1d8","block_type":"box","text":"If the periodic adjustment rate measuring inflation falls, the principal value of inflation-indexed bonds","page_number":99,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"f1cf66a7-ab45-4b38-84f9-9d003c4167d3","block_type":"box","text":"will be adjusted downward, and, consequently, the interest payable on these securities (calculated with","page_number":99,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"3d182bca-4dec-456f-8002-99cf4ff0c13b","block_type":"box","text":"respect to a smaller principal amount) will be reduced. Repayment of the original bond principal upon","page_number":99,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"503482a9-0d46-4d90-9d09-0d2a96d10e67","block_type":"box","text":"maturity (as adjusted for inflation) is guaranteed in the case of U.S. Treasury inflation-indexed bonds,","page_number":99,"box":{"x":117,"y":583,"width":755,"height":12}},{"id":"72ea7994-d510-47d5-8c29-892eb855adb4","block_type":"box","text":"even during a period of deflation. However, the current market value of the bonds is not guaranteed,","page_number":99,"box":{"x":116,"y":599,"width":748,"height":12}},{"id":"7228d9b1-20c0-4393-9b83-a4e0e4928607","block_type":"box","text":"and will fluctuate. Certain Funds may also invest in other inflation related bonds which may or may not","page_number":99,"box":{"x":116,"y":614,"width":763,"height":12}},{"id":"461645b7-347c-4c71-b8d5-97f26a6074c2","block_type":"box","text":"provide a similar guarantee. If a guarantee of principal is not provided, the adjusted principal value of","page_number":99,"box":{"x":117,"y":630,"width":752,"height":12}},{"id":"d7175930-dc09-4457-94dd-8633e3f32992","block_type":"box","text":"the bond repaid at maturity may be less than the original principal. In addition, if the Fund purchases","page_number":99,"box":{"x":116,"y":645,"width":749,"height":12}},{"id":"e59fd466-0ae1-4622-a01a-37702704c8f1","block_type":"box","text":"inflation-indexed bonds offered by foreign issuers, the rate of inflation measured by the foreign inflation","page_number":99,"box":{"x":117,"y":661,"width":761,"height":12}},{"id":"eed9e54e-fecc-4dda-bdcf-e823fbdd31bd","block_type":"box","text":"index may not be correlated to the rate of inflation in the United States.","page_number":99,"box":{"x":117,"y":676,"width":523,"height":12}},{"id":"586b8cab-1884-4674-9e28-138ddfe3ab0e","block_type":"box","text":"The value of inflation-indexed bonds is expected to change in response to changes in real interest","page_number":99,"box":{"x":116,"y":707,"width":727,"height":12}},{"id":"739fc485-4286-4183-ba1a-fcdb4f3b1f2e","block_type":"box","text":"rates. Real interest rates, in turn, are tied to the relationship between nominal interest rates and the","page_number":99,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"7590b52c-78ba-4706-a929-aba541200e6c","block_type":"box","text":"rate of inflation. Therefore, if inflation were to rise at a faster rate than nominal interest rates, real","page_number":99,"box":{"x":117,"y":738,"width":717,"height":11}},{"id":"81c9c504-a684-4a4d-a9e4-41dd1c57a8a2","block_type":"box","text":"interest rates might decline, leading to an increase in value of inflation-indexed bonds. In contrast, if","page_number":99,"box":{"x":117,"y":754,"width":739,"height":12}},{"id":"2d86047c-eb57-4c3d-b88f-4d2a3b41327c","block_type":"box","text":"nominal interest rates increased at a faster rate than inflation, real interest rates might rise, leading to a","page_number":99,"box":{"x":117,"y":769,"width":764,"height":12}},{"id":"4f3edff8-a94f-47ff-8ebf-f65d2aa57378","block_type":"box","text":"decrease in value of inflation-indexed bonds. There can be no assurance, however, that the value of","page_number":99,"box":{"x":116,"y":785,"width":745,"height":11}},{"id":"b8337c8c-8643-40fd-83cd-1822441b107b","block_type":"box","text":"inflation-indexed bonds will be directly correlated to changes in interest rates.","page_number":99,"box":{"x":117,"y":800,"width":570,"height":12}},{"id":"f4c07a22-9004-47be-b239-eaeaeef71cf6","block_type":"box","text":"While these securities are expected to be protected from long-term inflationary trends, short-term","page_number":99,"box":{"x":116,"y":831,"width":725,"height":12}},{"id":"6788a99a-2315-4334-be31-f3616b200745","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":99,"box":{"x":117,"y":847,"width":731,"height":12}},{"id":"743cd82e-18e1-4f67-abc8-bb564b3aa688","block_type":"box","text":"inflation (for example, due to changes in currency exchange rates), investors in these securities may","page_number":99,"box":{"x":117,"y":862,"width":749,"height":12}},{"id":"49e46ac3-77fb-4ba4-bd04-54d0fd7bec65","block_type":"box","text":"not be protected to the extent that the increase is not reflected in the bond’s inflation measure.","page_number":99,"box":{"x":117,"y":878,"width":704,"height":12}},{"id":"b55d83c3-3292-4525-bac1-e7a0453cbf31","block_type":"box","text":"II-12","page_number":99,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"f6a77ded-133f-47cd-8842-a1098a5f21aa","block_type":"box","text":"NM1026U-6030748-99/260","page_number":99,"box":{"x":757,"y":969,"width":152,"height":7}},{"id":"52769deb-7f7b-48e2-85bf-97e81f318133","block_type":"box","text":"In general, the measure used to determine the periodic adjustment of U.S. inflation-indexed bonds is","page_number":100,"box":{"x":117,"y":87,"width":750,"height":12}},{"id":"0e1e86dd-9151-4e88-998f-40e69fe5c261","block_type":"box","text":"the Consumer Price Index for Urban Consumers (“CPI-U”), which is calculated monthly by the U.S.","page_number":100,"box":{"x":116,"y":102,"width":739,"height":13}},{"id":"d48f6a06-a110-4c04-b6e0-73e4d7bdeb5c","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":100,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"eca203bb-0b8c-4748-ab7f-e1995dd7c027","block_type":"box","text":"components such as housing, food, transportation and energy. Inflation-indexed bonds issued by a","page_number":100,"box":{"x":116,"y":134,"width":739,"height":12}},{"id":"c49f9824-13ed-4974-9e25-1e24f9f7645f","block_type":"box","text":"foreign government are generally adjusted to reflect a comparable inflation index, calculated by that","page_number":100,"box":{"x":116,"y":149,"width":743,"height":12}},{"id":"c00652e0-3239-42b6-8c10-c007952b61f0","block_type":"box","text":"government. There can be no assurance that the CPI-U or any foreign inflation index will accurately","page_number":100,"box":{"x":116,"y":165,"width":744,"height":12}},{"id":"70072174-8a65-42e8-8f00-3e2b69b81248","block_type":"box","text":"measure the real rate of inflation in the prices of goods and services. Moreover, there can be no","page_number":100,"box":{"x":117,"y":180,"width":716,"height":12}},{"id":"33ba233c-5735-4caf-9a79-842314231ca8","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":100,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"cbfe6486-9717-4d2a-86c4-d5b292b27434","block_type":"box","text":"United States.","page_number":100,"box":{"x":117,"y":211,"width":109,"height":10}},{"id":"cd57a233-7daf-4bff-aebb-ad918b9b56ad","block_type":"box","text":"Any increase in the principal amount of an inflation-indexed bond will be considered taxable ordinary","page_number":100,"box":{"x":116,"y":242,"width":750,"height":12}},{"id":"0122b905-648a-4ee7-b2b3-9b66b501f634","block_type":"box","text":"income, even though investors do not receive their principal until maturity.","page_number":100,"box":{"x":117,"y":258,"width":552,"height":12}},{"id":"e9dcb318-a880-4066-b1c8-ed33cad88042","block_type":"box","text":"Investment Grade Debt Obligations.","page_number":100,"box":{"x":117,"y":289,"width":265,"height":12}},{"id":"11f49789-f09a-4d0d-abd7-7d92a71feda4","block_type":"box","text":"Certain Funds may invest in “investment grade securities,” which","page_number":100,"box":{"x":383,"y":289,"width":492,"height":12}},{"id":"ff145f1a-d285-4177-8d2f-af9431c53a02","block_type":"box","text":"are securities rated in the four highest rating categories of an NRSRO or deemed to be of equivalent","page_number":100,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"33595177-ba45-4177-8e16-3e3470da100b","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":100,"box":{"x":116,"y":320,"width":734,"height":12}},{"id":"f49a61f1-5f93-4f4d-98dd-2338172b7e31","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":100,"box":{"x":116,"y":335,"width":708,"height":12}},{"id":"d39c0027-f379-4880-b80b-029a950b7b4a","block_type":"box","text":"i.e.","page_number":100,"box":{"x":825,"y":335,"width":20,"height":10}},{"id":"a310f21e-9bf1-47fa-9b52-e39b05cde614","block_type":"box","text":",","page_number":100,"box":{"x":848,"y":343,"width":8,"height":3}},{"id":"ccc5d984-bdb6-4c76-a64b-366ad6143156","block_type":"box","text":"“Baa” by Moody’s or “BBB” by S&P) are considered to have some speculative characteristics and are","page_number":100,"box":{"x":116,"y":351,"width":756,"height":12}},{"id":"058046e0-809c-4c27-9cb4-8818dd400a57","block_type":"box","text":"more sensitive to economic change than higher rated securities. If an investment grade security of a","page_number":100,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"df4a9133-306b-4978-8c29-4b46e7580fbf","block_type":"box","text":"Fund is subsequently downgraded below investment grade, the Fund’s Manager will consider such an","page_number":100,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"cbccd9fa-a792-44b4-a332-053e50259f9c","block_type":"box","text":"event in determining whether the Fund should continue to hold the security. Subject to its investment","page_number":100,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"f0bbd605-7837-4dd5-8021-eb1074a4bdec","block_type":"box","text":"strategies, there is no limit on the amount of such downgraded securities a Fund may hold.","page_number":100,"box":{"x":116,"y":413,"width":679,"height":12}},{"id":"3e39d9df-3fe4-4507-bd71-ae3d089c7572","block_type":"box","text":"See Appendix A to this SAI for a description of applicable securities ratings.","page_number":100,"box":{"x":116,"y":444,"width":566,"height":12}},{"id":"2deaa3e1-52c3-429e-9b0b-b0ffa61f25f7","block_type":"box","text":"High Yield Investments (“Junk Bonds”).","page_number":100,"box":{"x":116,"y":475,"width":296,"height":12}},{"id":"3867d63a-53bb-4603-a1d7-b8453dcb8fa6","block_type":"box","text":"Non-investment grade or “high yield” fixed-income or convertible securities commonly known to","page_number":100,"box":{"x":117,"y":498,"width":711,"height":12}},{"id":"6ac70aeb-ffa2-471e-8b5d-3adad716c219","block_type":"box","text":"investors as “junk bonds” are debt securities that are rated below investment grade by the major rating","page_number":100,"box":{"x":117,"y":513,"width":764,"height":12}},{"id":"4fcdd49d-21f3-49a6-a2e8-f0376fe9b7dd","block_type":"box","text":"agencies or are securities that Fund management believes are of comparable quality. While generally","page_number":100,"box":{"x":116,"y":529,"width":759,"height":12}},{"id":"3198c705-dd5e-47af-aa86-ef13e93d48c1","block_type":"box","text":"providing greater income and opportunity for gain, non-investment grade debt securities may be","page_number":100,"box":{"x":117,"y":544,"width":715,"height":12}},{"id":"45f51194-e342-4cea-aad2-1550172e6eb8","block_type":"box","text":"subject to greater risks than securities which have higher credit ratings, including a high risk of default,","page_number":100,"box":{"x":116,"y":560,"width":764,"height":12}},{"id":"72a7ca31-5786-428c-a7bf-86451b56324b","block_type":"box","text":"and their yields will fluctuate over time. High yield securities will generally be in the lower rating","page_number":100,"box":{"x":116,"y":575,"width":709,"height":12}},{"id":"686119fd-860a-4fc8-b588-bdd0070e1518","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":100,"box":{"x":116,"y":591,"width":755,"height":12}},{"id":"66ea73fb-785c-4c47-ba4f-b5ff1454f235","block_type":"box","text":"will be non-rated. The credit rating of a high yield security does not necessarily address its market","page_number":100,"box":{"x":116,"y":606,"width":730,"height":12}},{"id":"5fc97080-222e-4028-98db-7b64771886cc","block_type":"box","text":"value risk, and ratings may from time to time change, positively or negatively, to reflect developments","page_number":100,"box":{"x":116,"y":622,"width":757,"height":12}},{"id":"75047aeb-3616-48ae-92f1-2fab58bc1d31","block_type":"box","text":"regarding the issuer’s financial condition. High yield securities are considered to be speculative with","page_number":100,"box":{"x":117,"y":637,"width":743,"height":12}},{"id":"8a6d3266-9635-477d-8144-bca62f4fbad4","block_type":"box","text":"respect to the capacity of the issuer to timely repay principal and pay interest or dividends in","page_number":100,"box":{"x":117,"y":653,"width":687,"height":12}},{"id":"b7e1e37c-a2a7-4278-888a-d3a81a8b8cea","block_type":"box","text":"accordance with the terms of the obligation and may have more credit risk than higher rated securities.","page_number":100,"box":{"x":116,"y":668,"width":761,"height":12}},{"id":"5161337d-10e6-4feb-b82a-faaf4a43a57b","block_type":"box","text":"The major risks in junk bond investments include the following:","page_number":100,"box":{"x":116,"y":699,"width":464,"height":13}},{"id":"71f7e775-97eb-427a-b1d8-11f967860478","block_type":"box","text":"• Junk bonds may be issued by less creditworthy companies. These securities are vulnerable to","page_number":100,"box":{"x":117,"y":731,"width":731,"height":12}},{"id":"173e6d80-f54f-4da6-91f7-d32285d05e71","block_type":"box","text":"adverse changes in the issuer’s industry and to general economic conditions. Issuers of junk","page_number":100,"box":{"x":150,"y":746,"width":686,"height":12}},{"id":"050658cb-bc05-4dc0-b865-c7900c495b46","block_type":"box","text":"bonds may be unable to meet their interest or principal payment obligations because of an","page_number":100,"box":{"x":150,"y":761,"width":669,"height":13}},{"id":"24056786-51cd-491e-a0ab-b6fbc07b7ee2","block_type":"box","text":"economic downturn, specific issuer developments or the unavailability of additional financing.","page_number":100,"box":{"x":150,"y":777,"width":689,"height":12}},{"id":"600ce101-028a-4a93-b23b-4848da408ce5","block_type":"box","text":"• The issuers of junk bonds may have a larger amount of outstanding debt relative to their assets","page_number":100,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"8688b7df-374b-4590-b7f8-d1b91459c46d","block_type":"box","text":"than issuers of investment grade bonds. If the issuer experiences financial stress, it may be","page_number":100,"box":{"x":150,"y":816,"width":678,"height":12}},{"id":"96544b30-0470-4a96-96be-a9eaf8f1802f","block_type":"box","text":"unable to meet its debt obligations. The issuer’s ability to pay its debt obligations also may be","page_number":100,"box":{"x":150,"y":831,"width":697,"height":12}},{"id":"3028519f-6e20-4e5c-bdbb-80572e4dd9b1","block_type":"box","text":"lessened by specific issuer developments, or the unavailability of additional financing. Issuers of","page_number":100,"box":{"x":150,"y":847,"width":717,"height":12}},{"id":"cf87e6a1-a1f2-4743-9b33-5e170f5a44b5","block_type":"box","text":"high yield securities are often in the growth stage of their development and/or involved in a","page_number":100,"box":{"x":150,"y":862,"width":677,"height":12}},{"id":"20d4de0b-a50a-476f-8646-baa6f8d29852","block_type":"box","text":"reorganization or takeover.","page_number":100,"box":{"x":150,"y":878,"width":204,"height":12}},{"id":"f36d99ea-c1d4-46b2-aea6-2c20e5ac9e10","block_type":"box","text":"II-13","page_number":100,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"23056895-e175-4cf9-81eb-98a7b8eb1e3b","block_type":"box","text":"NM1026U-6030748-100/260","page_number":100,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cf966abc-54e0-4a51-835d-4d9d1174b641","block_type":"box","text":"• Junk bonds are frequently ranked junior to claims by other creditors. If the issuer cannot meet its","page_number":101,"box":{"x":117,"y":87,"width":754,"height":12}},{"id":"f42e7490-3234-461d-8b5f-1d1776fd07e2","block_type":"box","text":"obligations, the senior obligations are generally paid off before the junior obligations, which will","page_number":101,"box":{"x":150,"y":102,"width":706,"height":13}},{"id":"bcdad598-7824-4055-93a0-98ff6e09e0a9","block_type":"box","text":"potentially limit a Fund’s ability to fully recover principal or to receive interest payments when","page_number":101,"box":{"x":150,"y":118,"width":693,"height":12}},{"id":"6b597ac6-fc89-4618-9cd7-c39c8d557388","block_type":"box","text":"senior securities are in default. Thus, investors in high yield securities have a lower degree of","page_number":101,"box":{"x":150,"y":134,"width":696,"height":12}},{"id":"25814bfb-8e17-4ab9-ae5f-f33890a4a22b","block_type":"box","text":"protection with respect to principal and interest payments than do investors in higher rated","page_number":101,"box":{"x":150,"y":149,"width":674,"height":12}},{"id":"99055f4b-874c-4054-bd80-c5fa2a1011e6","block_type":"box","text":"securities.","page_number":101,"box":{"x":150,"y":165,"width":80,"height":9}},{"id":"4b2ba87a-e56e-44f3-a0a3-4c0a9c11819f","block_type":"box","text":"• Junk bonds frequently have redemption features that permit an issuer to repurchase the security","page_number":101,"box":{"x":117,"y":188,"width":753,"height":12}},{"id":"89eeda6c-f9ba-4550-b5e3-08a8c567ec99","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":101,"box":{"x":149,"y":203,"width":738,"height":12}},{"id":"cd47a221-ab36-415b-baac-d915ab346925","block_type":"box","text":"proceeds in bonds with lower yields and may lose income.","page_number":101,"box":{"x":150,"y":219,"width":437,"height":12}},{"id":"7f4d4cbd-27b5-4820-bbec-ba5bff3e78d2","block_type":"box","text":"• Prices of junk bonds are subject to extreme price fluctuations. Negative economic developments","page_number":101,"box":{"x":117,"y":242,"width":753,"height":12}},{"id":"36081ba6-a365-4934-9dc1-af6c1aa5cd71","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":101,"box":{"x":150,"y":258,"width":713,"height":12}},{"id":"0f136e82-55fb-44c7-a91c-324ff846f21c","block_type":"box","text":"income securities.","page_number":101,"box":{"x":150,"y":273,"width":139,"height":10}},{"id":"5aed6a9b-e039-4ee3-a00c-c74f884911ec","block_type":"box","text":"• Junk bonds may be less liquid than higher rated fixed-income securities even under normal","page_number":101,"box":{"x":117,"y":296,"width":714,"height":12}},{"id":"452918e3-2697-43be-92b5-a2e0fdef63ce","block_type":"box","text":"economic conditions. Under certain economic and/or market conditions, a Fund may have difficulty","page_number":101,"box":{"x":150,"y":312,"width":738,"height":12}},{"id":"6a423000-6309-40ee-85f0-3bd952666c1c","block_type":"box","text":"disposing of certain high yield securities due to the limited number of investors in that sector of the","page_number":101,"box":{"x":150,"y":327,"width":734,"height":12}},{"id":"de7bfec9-836b-44f6-a43a-6df61fc52318","block_type":"box","text":"market. There are fewer dealers in the junk bond market, and there may be significant differences","page_number":101,"box":{"x":150,"y":343,"width":730,"height":12}},{"id":"3dfd257b-1984-445b-bf9a-19e1a0467b3a","block_type":"box","text":"in the prices quoted for junk bonds by the dealers, and such quotations may not be the actual","page_number":101,"box":{"x":150,"y":358,"width":698,"height":12}},{"id":"c7ec46d0-80a5-4df7-9060-219966bc171c","block_type":"box","text":"prices available for a purchase or sale. Because junk bonds are less liquid than higher rated","page_number":101,"box":{"x":150,"y":374,"width":688,"height":12}},{"id":"63cfdee7-496e-46f9-81cc-0e1e7457b415","block_type":"box","text":"bonds, judgment may play a greater role in valuing certain of a Fund’s portfolio securities than in","page_number":101,"box":{"x":150,"y":389,"width":720,"height":12}},{"id":"3159c968-02d2-4b2a-b4bc-19aeb8a9a3a4","block_type":"box","text":"the case of securities trading in a more liquid market.","page_number":101,"box":{"x":150,"y":405,"width":398,"height":12}},{"id":"f1a07d5b-a787-4360-b985-732f005b0a2c","block_type":"box","text":"• The secondary markets for high yield securities are not as liquid as the secondary markets for","page_number":101,"box":{"x":117,"y":428,"width":734,"height":12}},{"id":"5cc5b293-091d-4b4e-8c56-3b6ab563101b","block_type":"box","text":"higher rated securities. The secondary markets for high yield securities are concentrated in","page_number":101,"box":{"x":150,"y":444,"width":680,"height":12}},{"id":"b9878b7c-5b73-425d-8c4c-ec8e37355c25","block_type":"box","text":"relatively few market makers and participants in the markets are mostly institutional investors,","page_number":101,"box":{"x":150,"y":459,"width":699,"height":12}},{"id":"cd8a2f4c-1a38-4e92-ab00-06e7c3e1ce80","block_type":"box","text":"including insurance companies, banks, other financial institutions and mutual funds. In addition,","page_number":101,"box":{"x":150,"y":475,"width":712,"height":12}},{"id":"6b5dc3aa-30b3-4773-bcb5-55af404d3416","block_type":"box","text":"the trading volume for high yield securities is generally lower than that for higher rated securities","page_number":101,"box":{"x":150,"y":490,"width":718,"height":12}},{"id":"c0fe498e-5c08-4911-9dc4-10bb772a1f05","block_type":"box","text":"and the secondary markets could contract under adverse market or economic conditions","page_number":101,"box":{"x":150,"y":506,"width":662,"height":12}},{"id":"1f1c1d21-41ba-4aad-84ea-6144301ad350","block_type":"box","text":"independent of any specific adverse changes in the condition of a particular issuer. Under certain","page_number":101,"box":{"x":150,"y":521,"width":725,"height":12}},{"id":"b7c094de-3bf5-41f3-a26a-21720d3c4ef4","block_type":"box","text":"economic and/or market conditions, a Fund may have difficulty disposing of certain high yield","page_number":101,"box":{"x":150,"y":537,"width":695,"height":12}},{"id":"65c8c1b9-2808-445c-ad5a-86e12d8eb760","block_type":"box","text":"securities due to the limited number of investors in that sector of the market. An illiquid secondary","page_number":101,"box":{"x":150,"y":552,"width":728,"height":12}},{"id":"42f513a8-954b-445d-905a-4d3029454b89","block_type":"box","text":"market may adversely affect the market price of the high yield security, which may result in","page_number":101,"box":{"x":150,"y":568,"width":678,"height":12}},{"id":"89927b22-4362-434b-8722-428ee05f7b94","block_type":"box","text":"increased difficulty selling the particular issue and obtaining accurate market quotations on the","page_number":101,"box":{"x":150,"y":583,"width":706,"height":12}},{"id":"8bd9765d-655e-4f5c-b117-19ecc6b142e6","block_type":"box","text":"issue when valuing a Fund’s assets. Market quotations on high yield securities are available only","page_number":101,"box":{"x":150,"y":599,"width":722,"height":12}},{"id":"125ea8f6-9056-4407-9353-4f0179ff1166","block_type":"box","text":"from a limited number of dealers, and such quotations may not be the actual prices available for a","page_number":101,"box":{"x":149,"y":614,"width":731,"height":12}},{"id":"6ab6e685-cdcc-482a-a602-b7d2c13e606a","block_type":"box","text":"purchase or sale. When the secondary market for high yield securities becomes more illiquid, or in","page_number":101,"box":{"x":150,"y":630,"width":734,"height":12}},{"id":"b29eb0f8-9eb8-47d1-9645-678ea3b8eb13","block_type":"box","text":"the absence of readily available market quotations for such securities, the relative lack of reliable","page_number":101,"box":{"x":150,"y":645,"width":723,"height":12}},{"id":"8f01d052-d708-4c1d-8d15-03d465d49405","block_type":"box","text":"objective data makes it more difficult to value a Fund’s securities, and judgment plays a more","page_number":101,"box":{"x":150,"y":661,"width":691,"height":12}},{"id":"fe21677e-30b9-4b18-aead-f5a83bf2ea8d","block_type":"box","text":"important role in determining such valuations.","page_number":101,"box":{"x":150,"y":676,"width":337,"height":12}},{"id":"6fe3ffa7-1f5c-4f71-a39b-499420727039","block_type":"box","text":"• A Fund may incur expenses to the extent necessary to seek recovery upon default or to negotiate","page_number":101,"box":{"x":117,"y":699,"width":757,"height":13}},{"id":"ca731a82-b038-4621-ba7a-3c89ca3aec1a","block_type":"box","text":"new terms with a defaulting issuer.","page_number":101,"box":{"x":150,"y":715,"width":256,"height":12}},{"id":"63c96549-8d10-484a-9ed3-b3a46379e74e","block_type":"box","text":"• The junk bond markets may react strongly to adverse news about an issuer or the economy, or to","page_number":101,"box":{"x":117,"y":738,"width":756,"height":12}},{"id":"ae084424-0c0e-4eac-824d-e1f8164254a5","block_type":"box","text":"the perception or expectation of adverse news, whether or not it is based on fundamental analysis.","page_number":101,"box":{"x":150,"y":754,"width":731,"height":12}},{"id":"4446d3f1-4cbd-4edd-b061-ba047f0134ef","block_type":"box","text":"Additionally, prices for high yield securities may be affected by legislative and regulatory","page_number":101,"box":{"x":149,"y":769,"width":654,"height":12}},{"id":"5f7f14d7-9292-408f-9414-b1bf45db79db","block_type":"box","text":"developments. These developments could adversely affect a Fund’s NAV and investment","page_number":101,"box":{"x":150,"y":785,"width":664,"height":12}},{"id":"23653d39-663d-48e7-beb9-9aab0cf6f510","block_type":"box","text":"practices, the secondary market for high yield securities, the financial condition of issuers of these","page_number":101,"box":{"x":150,"y":800,"width":726,"height":12}},{"id":"0e820fc1-d5a0-46b1-a774-bc48eb6d3b34","block_type":"box","text":"securities and the value and liquidity of outstanding high yield securities, especially in a thinly","page_number":101,"box":{"x":150,"y":816,"width":690,"height":12}},{"id":"98dc382e-9ad0-4f90-b37b-56e9daefe83b","block_type":"box","text":"traded market. For example, federal legislation requiring the divestiture by federally insured","page_number":101,"box":{"x":150,"y":831,"width":681,"height":12}},{"id":"d98faa27-1b57-4dba-879d-0b6eac6ca303","block_type":"box","text":"savings and loan associations of their investments in high yield bonds and limiting the deductibility","page_number":101,"box":{"x":150,"y":847,"width":733,"height":12}},{"id":"9b2e4f44-9bf9-43c0-8c3d-6a578c71ced6","block_type":"box","text":"of interest by certain corporate issuers of high yield bonds adversely affected the market in the","page_number":101,"box":{"x":150,"y":862,"width":706,"height":12}},{"id":"dd28b87f-af0d-4b74-960d-fd1b175259d5","block_type":"box","text":"past.","page_number":101,"box":{"x":150,"y":878,"width":41,"height":12}},{"id":"60e9fb74-ff33-4093-b97a-81c8fb8f9f93","block_type":"box","text":"II-14","page_number":101,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b829748f-cc5f-4b39-8341-b8b878ed66b2","block_type":"box","text":"NM1026U-6030748-101/260","page_number":101,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a18bfc33-5ead-43ab-bf10-581cfa6e3fe7","block_type":"box","text":"• The rating assigned by a rating agency evaluates the issuing agency’s assessment of the safety of","page_number":102,"box":{"x":117,"y":87,"width":770,"height":12}},{"id":"f856c85d-3c96-4380-9abe-7d38481f804c","block_type":"box","text":"a non-investment grade security’s principal and interest payments, but does not address market","page_number":102,"box":{"x":150,"y":103,"width":716,"height":12}},{"id":"c3b79b4d-89b0-49fe-93cc-34c8766ccc0f","block_type":"box","text":"value risk. Because such ratings of the ratings agencies may not always reflect current conditions","page_number":102,"box":{"x":150,"y":118,"width":728,"height":12}},{"id":"08f6e1ae-cd24-43b1-bcf6-78a428518bef","block_type":"box","text":"and events, in addition to using recognized rating agencies and other sources, the Manager or","page_number":102,"box":{"x":150,"y":134,"width":705,"height":12}},{"id":"d6683377-71e7-43e5-8309-590351ed4957","block_type":"box","text":"sub-adviser performs its own analysis of the issuers whose non-investment grade securities a","page_number":102,"box":{"x":150,"y":149,"width":700,"height":12}},{"id":"17017c6f-1515-4e86-8b84-4df7b054b548","block_type":"box","text":"Fund holds. Because of this, the Fund’s performance may depend more on the Manager’s or","page_number":102,"box":{"x":151,"y":165,"width":693,"height":12}},{"id":"cb90354d-c018-4408-a0ef-d955d361c587","block_type":"box","text":"sub-adviser’s own credit analysis than in the case of mutual funds investing in higher-rated","page_number":102,"box":{"x":150,"y":180,"width":678,"height":12}},{"id":"f92c1dec-5e6e-4045-9c81-2ef11c4986b6","block_type":"box","text":"securities.","page_number":102,"box":{"x":150,"y":196,"width":80,"height":9}},{"id":"68dc7c12-8277-4046-aea0-89696fa73274","block_type":"box","text":"In selecting non-investment grade securities, the Manager or sub-adviser considers factors such as","page_number":102,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"d56a3bdb-752a-4ecb-9d95-c556888577aa","block_type":"box","text":"those relating to the creditworthiness of issuers, the ratings and performance of the securities, the","page_number":102,"box":{"x":116,"y":242,"width":731,"height":12}},{"id":"efcff7a4-b067-48c3-b7e8-ce22b3522f50","block_type":"box","text":"protections afforded the securities and the diversity of the Fund. The Manager or sub-adviser","page_number":102,"box":{"x":117,"y":258,"width":694,"height":12}},{"id":"3839d35d-74b0-4464-a0e9-7101bc4890b2","block_type":"box","text":"continuously monitors the issuers of non-investment grade securities held by the Fund for their ability","page_number":102,"box":{"x":116,"y":273,"width":755,"height":12}},{"id":"31ca7b6b-1a37-46f8-9eec-e556b23331fc","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":102,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"d13a7b3c-30c8-444f-8969-091f1cf7d932","block_type":"box","text":"Fund so that it can meet redemption requests. If a security’s rating is reduced below the minimum","page_number":102,"box":{"x":117,"y":304,"width":729,"height":12}},{"id":"cd7f20a5-622a-4bea-acd6-35a2f0a3e3cd","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":102,"box":{"x":116,"y":320,"width":745,"height":12}},{"id":"ed0f42a2-007e-4be9-8963-f06a38835ac9","block_type":"box","text":"Fund should continue to hold the security.","page_number":102,"box":{"x":117,"y":335,"width":315,"height":12}},{"id":"441c0b00-1db2-476c-86e8-4452df0f31e4","block_type":"box","text":"In the event that a Fund investing in high yield securities experiences an unexpected level of net","page_number":102,"box":{"x":117,"y":366,"width":718,"height":12}},{"id":"21b42898-7b39-4c18-975d-a522c6f26598","block_type":"box","text":"redemptions, the Fund could be forced to sell its holdings without regard to the investment merits,","page_number":102,"box":{"x":117,"y":382,"width":729,"height":12}},{"id":"20aa35cb-7374-489c-8918-3a68b017ef81","block_type":"box","text":"thereby decreasing the assets upon which the Fund’s rate of return is based.","page_number":102,"box":{"x":116,"y":397,"width":575,"height":12}},{"id":"a990d085-c296-4165-a273-eb518901587e","block_type":"box","text":"The costs attributable to investing in the junk bond markets are usually higher for several reasons,","page_number":102,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"ae4fe1b1-984b-47d9-a967-05bf3eb2e21d","block_type":"box","text":"such as higher investment research costs and higher commission costs.","page_number":102,"box":{"x":116,"y":444,"width":540,"height":12}},{"id":"05184989-bc93-4fb6-beca-edcd14c478a0","block_type":"box","text":"Mezzanine Investments.","page_number":102,"box":{"x":116,"y":475,"width":179,"height":9}},{"id":"68481aff-5e96-423e-a364-c4c966d2edea","block_type":"box","text":"Certain Funds, consistent with their restrictions on investing in securities of a","page_number":102,"box":{"x":297,"y":475,"width":579,"height":12}},{"id":"b7d4a3b0-de12-4a34-bee5-303e18bf5ddd","block_type":"box","text":"specific credit quality, may invest in certain high yield securities known as mezzanine investments,","page_number":102,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"2eadf4df-eabd-4e89-bd67-5040cc941320","block_type":"box","text":"which are subordinated debt securities which are generally issued in private placements in connection","page_number":102,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"4a1846c3-0ac4-404c-a759-f054fedbe394","block_type":"box","text":"with an equity security (","page_number":102,"box":{"x":116,"y":521,"width":175,"height":12}},{"id":"3673e556-b078-4466-955d-17721e3c43b2","block_type":"box","text":"e.g.","page_number":102,"box":{"x":292,"y":524,"width":26,"height":9}},{"id":"de683e63-d6c4-4b31-af5d-0179ada7606b","block_type":"box","text":", with attached warrants). Such mezzanine investments may be issued with","page_number":102,"box":{"x":321,"y":521,"width":563,"height":12}},{"id":"bdb602f2-89a8-4be4-96d7-440518ec24eb","block_type":"box","text":"or without registration rights. Similar to other high yield securities, maturities of mezzanine investments","page_number":102,"box":{"x":116,"y":537,"width":767,"height":12}},{"id":"fc26ac45-0541-4ac0-bede-d2fb8ad906e0","block_type":"box","text":"are typically seven to ten years, but the expected average life is significantly shorter at three to five","page_number":102,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"0de902e9-4de1-4602-ad82-35f0189be1c5","block_type":"box","text":"years. Mezzanine investments are usually unsecured and subordinate to other obligations of the","page_number":102,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"c7fdfa52-36c4-4152-a537-25536373c322","block_type":"box","text":"issuer.","page_number":102,"box":{"x":117,"y":583,"width":53,"height":10}},{"id":"3e5ea395-5226-475c-b69c-66688a1d0ace","block_type":"box","text":"Pay-in-kind Bonds.","page_number":102,"box":{"x":116,"y":614,"width":139,"height":12}},{"id":"f5cbaf6d-51a3-4e61-adef-484b02895898","block_type":"box","text":"Certain Funds may invest in pay-in-kind, or PIK, bonds. PIK bonds are bonds which","page_number":102,"box":{"x":257,"y":614,"width":631,"height":12}},{"id":"9e2db329-de81-4710-9853-b6ea5d493706","block_type":"box","text":"pay interest through the issuance of additional debt or equity securities. Similar to zero coupon","page_number":102,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"40f58a99-6392-4b79-8ca9-fdff6b014b20","block_type":"box","text":"obligations, pay-in-kind bonds also carry additional risk as holders of these types of securities realize","page_number":102,"box":{"x":116,"y":645,"width":753,"height":12}},{"id":"c1ef7c3c-ae18-4954-be43-e1c83bc65b89","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":102,"box":{"x":117,"y":661,"width":707,"height":12}},{"id":"142dd4bc-6ba9-42c9-aacf-c5d10351c2b5","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":102,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"99a2eb63-14f4-4732-a2ff-7d07633a7a88","block_type":"box","text":"affected by interest rate changes to a greater extent, and therefore tends to be more volatile, than that","page_number":102,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"80ee626e-4c23-4638-ae26-7b87113c45bb","block_type":"box","text":"of securities which pay interest in cash. Additionally, current U.S. federal tax law requires the holder of","page_number":102,"box":{"x":116,"y":707,"width":759,"height":12}},{"id":"dd7016fb-5999-48f0-94ae-4620692fa9c9","block_type":"box","text":"pay-in-kind bonds to accrue income with respect to these securities prior to the receipt of cash","page_number":102,"box":{"x":117,"y":723,"width":698,"height":12}},{"id":"50d2ca8e-2165-4b57-a373-da562faacd55","block_type":"box","text":"payments. To maintain its qualification as a regulated investment company and avoid liability for U.S.","page_number":102,"box":{"x":117,"y":738,"width":747,"height":12}},{"id":"bb5c22af-988a-4b85-b7b6-aa0513fd05eb","block_type":"box","text":"federal income and excise taxes, each Fund may be required to distribute income accrued with respect","page_number":102,"box":{"x":116,"y":754,"width":765,"height":12}},{"id":"720ca3b5-ca60-4bf4-a290-c95788ae6b7e","block_type":"box","text":"to these securities and may have to dispose of portfolio securities under disadvantageous","page_number":102,"box":{"x":116,"y":769,"width":665,"height":12}},{"id":"b43ec07b-0a4a-4caf-8658-0aeed48a9807","block_type":"box","text":"circumstances in order to generate cash to satisfy these distribution requirements.","page_number":102,"box":{"x":116,"y":785,"width":608,"height":12}},{"id":"db313e35-5551-490e-9c9f-2f1893b22f94","block_type":"box","text":"Supranational Entities.","page_number":102,"box":{"x":117,"y":816,"width":165,"height":12}},{"id":"30e5e4b9-d456-4bbe-bb82-0ffe89212ded","block_type":"box","text":"A Fund may invest in debt securities of supranational entities. Examples of","page_number":102,"box":{"x":289,"y":816,"width":555,"height":12}},{"id":"5ebbd6bb-ec0f-4841-91b9-0888a45a5335","block_type":"box","text":"such entities include the International Bank for Reconstruction and Development (the World Bank), the","page_number":102,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"355ae58c-47d6-47e7-9290-5048cae5f329","block_type":"box","text":"European Steel and Coal Community, the Asian Development Bank and the Inter-American","page_number":102,"box":{"x":117,"y":847,"width":683,"height":12}},{"id":"223e31a6-3fe5-47a4-97b6-9fedcc9aa37d","block_type":"box","text":"Development Bank. The government members, or “stockholders,” usually make initial capital","page_number":102,"box":{"x":117,"y":862,"width":691,"height":12}},{"id":"eabc5cf8-6d22-4dd6-a201-c7bba0c58c8d","block_type":"box","text":"contributions to the supranational entity and in many cases are committed to make additional capital","page_number":102,"box":{"x":116,"y":878,"width":748,"height":12}},{"id":"0377ad4f-bc23-4aa4-a13a-5505906af53c","block_type":"box","text":"II-15","page_number":102,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c793e015-db40-4c69-a862-49e3e1a97ea3","block_type":"box","text":"NM1026U-6030748-102/260","page_number":102,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"546a264e-e7dc-49a3-bcf1-aecc654b5086","block_type":"box","text":"contributions if the supranational entity is unable to repay its borrowings. There is no guarantee that","page_number":103,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"d2dcf650-5c33-4387-8a4a-d3ce272a34b2","block_type":"box","text":"one or more stockholders of a supranational entity will continue to make any necessary additional","page_number":103,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"d52c239c-cb21-442c-8fa4-a9812b8dc05d","block_type":"box","text":"capital contributions. If such contributions are not made, the entity may be unable to pay interest or","page_number":103,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"391a0472-58fb-4188-a55d-5ff67999981c","block_type":"box","text":"repay principal on its debt securities, and a Fund may lose money on such investments.","page_number":103,"box":{"x":117,"y":134,"width":655,"height":12}},{"id":"cacb1589-0890-4b4c-86b4-50ca7182d706","block_type":"box","text":"Depositary Receipts (ADRs, EDRs and GDRs).","page_number":103,"box":{"x":116,"y":167,"width":367,"height":12}},{"id":"7ce2985a-bb50-4834-931b-1ae053910262","block_type":"box","text":"Certain Funds may invest in the securities of foreign","page_number":103,"box":{"x":484,"y":167,"width":397,"height":12}},{"id":"7c6443a1-d524-4a6a-b230-ac641945b48d","block_type":"box","text":"issuers in the form of Depositary Receipts or other securities convertible into securities of foreign","page_number":103,"box":{"x":117,"y":182,"width":722,"height":12}},{"id":"2c24959b-360d-476a-af36-2a89e77e53ab","block_type":"box","text":"issuers. Depositary Receipts may not necessarily be denominated in the same currency as the","page_number":103,"box":{"x":117,"y":198,"width":707,"height":12}},{"id":"d2d73a6f-0d17-47a1-9c7f-62a558e2c026","block_type":"box","text":"underlying securities into which they may be converted. The Fund may invest in both sponsored and","page_number":103,"box":{"x":117,"y":213,"width":749,"height":12}},{"id":"e2465515-d922-4a29-ad67-0d29feb57866","block_type":"box","text":"unsponsored American Depositary Receipts (“ADRs”), European Depositary Receipts (“EDRs”), Global","page_number":103,"box":{"x":117,"y":229,"width":769,"height":12}},{"id":"260869f1-57b5-4d49-9ef9-fe7737252599","block_type":"box","text":"Depositary Receipts (“GDRs”) and other similar global instruments. ADRs typically are issued by an","page_number":103,"box":{"x":117,"y":244,"width":743,"height":12}},{"id":"90ddd931-6938-4a07-8e30-bfbea728d426","block_type":"box","text":"American bank or trust company and evidence ownership of underlying securities issued by a foreign","page_number":103,"box":{"x":116,"y":260,"width":756,"height":12}},{"id":"53f1fb0f-9452-4f8b-a60f-b9946d9e865e","block_type":"box","text":"corporation. EDRs, which are sometimes referred to as Continental Depositary Receipts, are receipts","page_number":103,"box":{"x":116,"y":275,"width":757,"height":12}},{"id":"e29dacb8-649b-4442-9eb2-760b26fe2a73","block_type":"box","text":"issued in Europe, typically by foreign banks and trust companies, that evidence ownership of either","page_number":103,"box":{"x":117,"y":291,"width":739,"height":12}},{"id":"42e9934f-6014-4662-9dde-5486608b2d59","block_type":"box","text":"foreign or domestic underlying securities. GDRs are depositary receipts structured like global debt","page_number":103,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"dd853cf7-078b-42cd-944a-97acf8fc4a05","block_type":"box","text":"issues to facilitate trading on an international basis. In addition to investment risks associated with the","page_number":103,"box":{"x":117,"y":322,"width":758,"height":12}},{"id":"1891291d-bcfd-45ad-8763-a69f3567e370","block_type":"box","text":"underlying issuer, Depositary Receipts expose a Fund to additional risks associated with the","page_number":103,"box":{"x":117,"y":337,"width":689,"height":12}},{"id":"a2f00349-c517-4553-b8fb-6583ef46f74c","block_type":"box","text":"non-uniform terms that apply to Depositary Receipt programs, credit exposure to the depository bank","page_number":103,"box":{"x":117,"y":353,"width":754,"height":12}},{"id":"df9fa57f-cf27-4064-976e-c28a8c9a1259","block_type":"box","text":"and to the sponsors and other parties with whom the depository bank establishes the programs,","page_number":103,"box":{"x":116,"y":368,"width":716,"height":12}},{"id":"e24c20d7-f084-420d-ace2-4236e9033031","block_type":"box","text":"currency risk and the risk of an illiquid market for Depositary Receipts. Unsponsored ADR, EDR and","page_number":103,"box":{"x":116,"y":384,"width":748,"height":12}},{"id":"5830843b-85f0-4b5d-b520-39f01e0f65d9","block_type":"box","text":"GDR programs are organized independently and without the cooperation of the issuer of the underlying","page_number":103,"box":{"x":117,"y":399,"width":771,"height":12}},{"id":"049359a4-a184-410c-b273-1f5e008828cf","block_type":"box","text":"securities. Unsponsored programs generally expose investors to greater risks than sponsored","page_number":103,"box":{"x":116,"y":415,"width":701,"height":12}},{"id":"39c7cb6d-d24f-441e-a774-f35607526504","block_type":"box","text":"programs and do not provide holders with many of the shareholder benefits that come from investing in","page_number":103,"box":{"x":117,"y":430,"width":769,"height":12}},{"id":"caacd507-e365-4464-9c01-660479e7f45d","block_type":"box","text":"a sponsored Depositary Receipt. Available information concerning the issuer may not be as current as","page_number":103,"box":{"x":116,"y":446,"width":764,"height":12}},{"id":"f858a0a5-3c2e-4f22-ba4d-1075a3952eb4","block_type":"box","text":"for sponsored ADRs, EDRs and GDRs, and the prices of unsponsored ADRs, EDRs and GDRs may","page_number":103,"box":{"x":116,"y":461,"width":750,"height":12}},{"id":"a97501aa-8436-43c4-8ff8-91ce5498f879","block_type":"box","text":"be more volatile than if such instruments were sponsored by the issuer. Depositary Receipts are","page_number":103,"box":{"x":117,"y":477,"width":718,"height":12}},{"id":"b1de8a6a-da9a-4e42-ac96-182e8a8d5eb8","block_type":"box","text":"generally subject to the same risks as the foreign securities that they evidence or into which they may","page_number":103,"box":{"x":116,"y":492,"width":759,"height":12}},{"id":"75f05553-1443-4ec7-98cc-e83955e46310","block_type":"box","text":"be converted. Investments in ADRs, EDRs and GDRs present additional investment considerations as","page_number":103,"box":{"x":117,"y":508,"width":763,"height":12}},{"id":"d5d58307-274a-4193-a29a-1b78b8301f22","block_type":"box","text":"described under “Foreign Investment Risks.”","page_number":103,"box":{"x":116,"y":523,"width":336,"height":12}},{"id":"0fdf42e5-649d-417d-9ea9-14006f7f32b9","block_type":"box","text":"Derivatives.","page_number":103,"box":{"x":116,"y":557,"width":99,"height":9}},{"id":"a86a8750-0124-4108-934d-5f6d640e4bc4","block_type":"box","text":"General.","page_number":103,"box":{"x":117,"y":581,"width":68,"height":9}},{"id":"1a7b7063-0740-47ac-aa04-cba9a972b5a2","block_type":"box","text":"Each Fund may use instruments referred to as derivatives, which are financial instruments","page_number":103,"box":{"x":186,"y":581,"width":675,"height":12}},{"id":"40a5126b-5622-42aa-966f-611a0b5669cd","block_type":"box","text":"that derive their value from one or more securities, commodities (such as gold or oil), currencies,","page_number":103,"box":{"x":116,"y":596,"width":722,"height":12}},{"id":"c86e7206-4ef7-4450-9a27-0378cea1d2fc","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":103,"box":{"x":117,"y":612,"width":758,"height":12}},{"id":"b1cd17c5-0e10-439d-90df-e7ea4953ebac","block_type":"box","text":"prime lending rate) or other reference asset. Derivatives may allow a Fund to increase or decrease the","page_number":103,"box":{"x":117,"y":627,"width":765,"height":12}},{"id":"d4e6d127-4ba4-4789-9d5a-3f4fd46baebe","block_type":"box","text":"level of risk to which the Fund is exposed more quickly and efficiently than with other transactions.","page_number":103,"box":{"x":117,"y":643,"width":732,"height":12}},{"id":"ae08039a-d8e1-43a9-88e2-5633f9020ec3","block_type":"box","text":"Certain Funds may use derivatives to maintain a portion of their long and short positions. Unless","page_number":103,"box":{"x":117,"y":658,"width":719,"height":12}},{"id":"2ac02251-b78d-4bbd-86d4-dbdd53983595","block_type":"box","text":"otherwise permitted, no Fund may use derivatives to gain exposure to an asset or asset class it is","page_number":103,"box":{"x":116,"y":674,"width":724,"height":12}},{"id":"bf7ce4f2-22db-4d70-abbb-1fc231c44df8","block_type":"box","text":"prohibited by its investment restrictions from purchasing directly. As described below, derivatives can","page_number":103,"box":{"x":117,"y":689,"width":748,"height":12}},{"id":"969a6b95-79dd-4068-bd4b-b6969a0ef02b","block_type":"box","text":"be used for hedging or speculative purposes. Funds will engage in transaction-level payment netting,","page_number":103,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"ea3f628a-43b7-4005-b0a4-8c25fed26396","block_type":"box","text":"i.e.","page_number":103,"box":{"x":116,"y":721,"width":20,"height":9}},{"id":"998a5fee-c9fc-455f-8b4c-f128a4a5b0b0","block_type":"box","text":", the payment obligations of derivatives contracts are netted against one another with the Fund","page_number":103,"box":{"x":140,"y":720,"width":701,"height":12}},{"id":"081ea04a-c511-4b98-b81b-7b8d027565d0","block_type":"box","text":"receiving or paying, as the case may be, only the net amount of the two payment streams.","page_number":103,"box":{"x":117,"y":736,"width":667,"height":12}},{"id":"6d7d0f48-4f84-4cba-a3b9-4957d4fbb93a","block_type":"box","text":"Hedging.","page_number":103,"box":{"x":116,"y":769,"width":65,"height":12}},{"id":"5acea4c4-0e9d-448a-93c9-444df518fbce","block_type":"box","text":"Each Fund may use derivatives for hedging purposes, in which a derivative is used to offset","page_number":103,"box":{"x":189,"y":769,"width":680,"height":12}},{"id":"8e09fb44-61a9-40b9-9f45-be90ef1ca4bb","block_type":"box","text":"the risks associated with other Fund holdings. Losses on other investments may be substantially","page_number":103,"box":{"x":116,"y":785,"width":716,"height":12}},{"id":"d87c26de-3263-4ca8-895f-301bcd765b0f","block_type":"box","text":"reduced by gains on a derivative that reacts in an opposite manner to market movements. Although","page_number":103,"box":{"x":117,"y":800,"width":737,"height":12}},{"id":"047abeab-ca2a-49e5-bd2e-0a5c896e7fce","block_type":"box","text":"hedging may reduce losses, it may also reduce or eliminate gains. In addition, hedging may cause","page_number":103,"box":{"x":117,"y":816,"width":728,"height":12}},{"id":"7c61fff9-c5a8-4f1c-9aa3-1e8e33d44ab1","block_type":"box","text":"losses if the market moves in an unanticipated manner, or if the cost of the derivative outweighs the","page_number":103,"box":{"x":117,"y":831,"width":744,"height":12}},{"id":"e2bfe01d-e9c4-4251-9093-3ef81ab50920","block_type":"box","text":"benefit of the hedge. The effectiveness of hedging may be reduced by correlation risk,","page_number":103,"box":{"x":117,"y":847,"width":643,"height":12}},{"id":"1dfe0e78-38bd-4dac-ab55-cdf02bdeb0f7","block_type":"box","text":"i.e.","page_number":103,"box":{"x":761,"y":847,"width":20,"height":9}},{"id":"7b45bf6b-93e4-408e-a36f-b8004422df1d","block_type":"box","text":",","page_number":103,"box":{"x":784,"y":855,"width":2,"height":3}},{"id":"6743e637-a9f0-4a0f-9170-511c3609517e","block_type":"box","text":"the risk that","page_number":103,"box":{"x":793,"y":847,"width":91,"height":9}},{"id":"e2a7c286-50db-4328-a521-1b9bbb354c5d","block_type":"box","text":"changes in the value of the derivative will not match those of the holdings being hedged as expected","page_number":103,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"d34ce63b-3531-4824-a91d-ae00b621d144","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":103,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"dfbfd608-a47b-4f62-979d-bf09c03b942b","block_type":"box","text":"II-16","page_number":103,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fedc6a95-b302-4089-add6-c9726f91b7ca","block_type":"box","text":"NM1026U-6030748-103/260","page_number":103,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"97196306-052d-42e8-b5bc-a11250c44d17","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":104,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"d1a1fb22-a825-417c-804b-3f6177a30974","block_type":"box","text":"will be effective. No Fund is required to use derivatives to hedge.","page_number":104,"box":{"x":116,"y":102,"width":486,"height":13}},{"id":"79086b66-0351-44a3-8659-7756d2cb9b07","block_type":"box","text":"Speculation.","page_number":104,"box":{"x":117,"y":132,"width":90,"height":12}},{"id":"4bb6279c-1957-4785-96d0-c7b4251af42f","block_type":"box","text":"Certain Funds may also use derivatives for speculative purposes to seek to enhance","page_number":104,"box":{"x":208,"y":132,"width":638,"height":13}},{"id":"e1af0d95-90a3-4d4d-a462-72a5c074077f","block_type":"box","text":"returns. The use of a derivative is speculative if the Fund is primarily seeking to achieve gains, rather","page_number":104,"box":{"x":117,"y":148,"width":753,"height":12}},{"id":"f6ff99d8-6cfa-4b32-9b09-ac2cded7d712","block_type":"box","text":"than offset the risk of other positions. To the extent a Fund invests in a derivative for speculative","page_number":104,"box":{"x":116,"y":163,"width":719,"height":12}},{"id":"5cea6e9c-6340-4632-ac24-b005549d9896","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":104,"box":{"x":117,"y":179,"width":769,"height":12}},{"id":"5312cb0e-1a0b-4398-a09d-60495940375f","block_type":"box","text":"greater than the derivative’s cost, and the potential for loss in certain cases may be unlimited.","page_number":104,"box":{"x":116,"y":194,"width":699,"height":13}},{"id":"59cfdada-e95c-41ed-bbc0-51f4b252df3d","block_type":"box","text":"Regulation of Derivatives.","page_number":104,"box":{"x":116,"y":224,"width":196,"height":12}},{"id":"a4c4ca38-e9da-41e4-99cc-7a875c5f7988","block_type":"box","text":"Rule 18f-4 Under the Investment Company Act.","page_number":104,"box":{"x":116,"y":247,"width":352,"height":12}},{"id":"3533a2a3-af32-40e7-aeee-dc4e484fd98b","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits","page_number":104,"box":{"x":469,"y":247,"width":416,"height":12}},{"id":"961415bf-d668-4d8b-97e8-55482d1878fc","block_type":"box","text":"a Fund to enter into Derivatives Transactions (as defined below) and certain other transactions","page_number":104,"box":{"x":116,"y":263,"width":708,"height":12}},{"id":"9a46d728-7dfd-4cba-a0a6-f7ba86cf7809","block_type":"box","text":"notwithstanding the restrictions on the issuance of “senior securities” under Section 18 of the","page_number":104,"box":{"x":117,"y":278,"width":692,"height":12}},{"id":"32758368-395b-4b9a-a736-211e0bcf5388","block_type":"box","text":"Investment Company Act. Section 18 of the Investment Company Act, among other things, prohibits","page_number":104,"box":{"x":117,"y":294,"width":747,"height":12}},{"id":"80871351-9e73-461e-a4ed-ee3a2cab7e02","block_type":"box","text":"open-end funds, including the Funds, from issuing or selling any “senior security,” other than borrowing","page_number":104,"box":{"x":116,"y":309,"width":769,"height":12}},{"id":"82e58cae-4e14-4b0d-935e-ceeca8201da4","block_type":"box","text":"from a bank (subject to a requirement to maintain 300% “asset coverage”).","page_number":104,"box":{"x":116,"y":325,"width":560,"height":12}},{"id":"62ff6b7b-c0b8-416a-aa4a-5a3b55fd8eab","block_type":"box","text":"Under Rule 18f-4, “Derivatives Transactions” include the following: (1) any swap, security-based swap","page_number":104,"box":{"x":117,"y":354,"width":761,"height":13}},{"id":"5a12d618-a113-49e5-85bc-51fccf34c49f","block_type":"box","text":"(including a contract for differences), futures contract, forward contract, option (excluding purchased","page_number":104,"box":{"x":117,"y":370,"width":747,"height":12}},{"id":"e59a0d2e-cfd8-4264-b03a-660af450c201","block_type":"box","text":"options), any combination of the foregoing, or any similar instrument, under which a Fund is or may be","page_number":104,"box":{"x":116,"y":385,"width":764,"height":13}},{"id":"964c28e5-3c63-491a-9a63-14d6e158417a","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":104,"box":{"x":117,"y":401,"width":763,"height":12}},{"id":"019febb0-74df-4dd5-a212-bddcaeeee518","block_type":"box","text":"maturity or early termination, whether as margin or settlement payment or otherwise; (2) any short sale","page_number":104,"box":{"x":117,"y":416,"width":767,"height":13}},{"id":"bcf225ba-e8bb-440d-a257-00492141428b","block_type":"box","text":"borrowing; (3) reverse repurchase agreements and similar financing transactions (e.g., recourse and","page_number":104,"box":{"x":117,"y":432,"width":750,"height":12}},{"id":"6c1307e3-9c3e-4f76-ad9e-6426be1ad157","block_type":"box","text":"non-recourse tender option bonds, and borrowed bonds), if a Fund elects to treat all of these","page_number":104,"box":{"x":117,"y":447,"width":691,"height":13}},{"id":"dd5d8942-59e2-4332-8762-c831cd73f4be","block_type":"box","text":"transactions as Derivatives Transactions under Rule 18f-4; and (4) when-issued or forward-settling","page_number":104,"box":{"x":116,"y":463,"width":738,"height":12}},{"id":"292cd1ff-2e02-4fc0-a8ac-2d2e8e609b9f","block_type":"box","text":"securities (e.g., firm and standby commitments, including to-be-announced (“TBA”) commitments, and","page_number":104,"box":{"x":116,"y":478,"width":763,"height":13}},{"id":"715e375f-2079-4878-a40e-9b8dc9f7a3d2","block_type":"box","text":"dollar rolls) and non-standard settlement cycle securities, unless such transactions meet the Delayed","page_number":104,"box":{"x":116,"y":494,"width":755,"height":12}},{"id":"2e51d7ef-ffe8-43f7-be16-e2dad5134c84","block_type":"box","text":"Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed Delivery","page_number":104,"box":{"x":116,"y":509,"width":768,"height":13}},{"id":"56adf4b7-4c30-4786-848e-03ae2938be54","block_type":"box","text":"Securities and Forward Commitments”).","page_number":104,"box":{"x":116,"y":525,"width":302,"height":12}},{"id":"0dbed333-3ab8-442c-a15d-6f521af799e1","block_type":"box","text":"Unless a Fund is relying on the Limited Derivatives User Exception (as defined below), the Fund must","page_number":104,"box":{"x":117,"y":555,"width":759,"height":12}},{"id":"9016b718-b935-49b2-9607-4d77616d8edc","block_type":"box","text":"comply with Rule 18f-4 with respect to its Derivatives Transactions. Rule 18f-4, among other things,","page_number":104,"box":{"x":116,"y":570,"width":744,"height":12}},{"id":"806163b6-b5b0-417d-b82d-fb3a010e32b0","block_type":"box","text":"requires a Fund to adopt and implement a comprehensive written derivatives risk management","page_number":104,"box":{"x":117,"y":586,"width":708,"height":12}},{"id":"169d9947-77d9-4899-9402-f86030b246a7","block_type":"box","text":"program (“DRMP”) and comply with a relative or absolute limit on Fund leverage risk calculated based","page_number":104,"box":{"x":117,"y":601,"width":761,"height":13}},{"id":"bbc08747-4a18-4262-a9f6-be39f5a756cb","block_type":"box","text":"on value-at-risk (“VaR”). The DRMP is administered by a “derivatives risk manager,” who is appointed","page_number":104,"box":{"x":116,"y":617,"width":760,"height":12}},{"id":"0ba6f09c-ff21-4173-8974-612771905dd7","block_type":"box","text":"by the Fund’s Board, including a majority of the independent Directors, and periodically reviews the","page_number":104,"box":{"x":117,"y":632,"width":739,"height":13}},{"id":"a45ab913-932d-4cf9-8999-502b0f15e80b","block_type":"box","text":"DRMP and reports to the Fund’s Board.","page_number":104,"box":{"x":117,"y":648,"width":299,"height":12}},{"id":"6dcc0f90-9621-4d91-960e-49d1fa13215e","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":104,"box":{"x":117,"y":678,"width":758,"height":12}},{"id":"52d90451-d9d9-46ec-838d-20e211dcbfd3","block_type":"box","text":"“derivatives exposure” is limited to 10% of its net assets (as calculated in accordance with Rule 18f-4)","page_number":104,"box":{"x":116,"y":693,"width":754,"height":12}},{"id":"4d3b2310-1de4-4ba2-a40a-de185bd788e2","block_type":"box","text":"and the Fund adopts and implements written policies and procedures reasonably designed to manage","page_number":104,"box":{"x":116,"y":709,"width":758,"height":12}},{"id":"e1167e4c-e323-4ec5-b92b-9f70fb2c1845","block_type":"box","text":"its derivatives risks (the “Limited Derivatives User Exception”).","page_number":104,"box":{"x":117,"y":724,"width":459,"height":12}},{"id":"9e895f2e-8112-470c-9303-9163a97f250c","block_type":"box","text":"Dodd-Frank Regulations.","page_number":104,"box":{"x":116,"y":754,"width":185,"height":12}},{"id":"8747e20f-7a7a-4fb3-9e02-403f55d9561f","block_type":"box","text":"The Dodd-Frank Wall Street Reform and Consumer Protection Act (“Dodd","page_number":104,"box":{"x":308,"y":754,"width":555,"height":12}},{"id":"cd9bff07-13a4-4e7d-8cbc-90bffd25e9fb","block_type":"box","text":"Frank”), enacted in July 2010, includes provisions that comprehensively regulate the over-the-counter","page_number":104,"box":{"x":117,"y":770,"width":754,"height":12}},{"id":"396f84f0-7394-40e0-9fa9-1b707f4baed1","block_type":"box","text":"(“OTC”) derivatives markets for the first time. While the Commodity Futures Trading Commission","page_number":104,"box":{"x":117,"y":785,"width":716,"height":12}},{"id":"56db727a-f8f0-454e-876e-d343ac78fa83","block_type":"box","text":"(“CFTC”) and other U.S. regulators have adopted many of the required Dodd-Frank regulations, certain","page_number":104,"box":{"x":117,"y":801,"width":764,"height":12}},{"id":"91fd59c5-64da-4490-a4bd-7d1f365740c0","block_type":"box","text":"regulations have only recently become effective and other regulations remain to be adopted. The full","page_number":104,"box":{"x":117,"y":816,"width":743,"height":12}},{"id":"4646ba84-065c-4ca3-acc8-b0cab642aafc","block_type":"box","text":"impact of Dodd-Frank on the Funds remains uncertain.","page_number":104,"box":{"x":117,"y":832,"width":411,"height":12}},{"id":"df0881d9-33b8-492d-840e-782085d621c3","block_type":"box","text":"Many OTC derivatives dealers are required to register with the CFTC as “swap dealers” and/or with the","page_number":104,"box":{"x":117,"y":862,"width":770,"height":12}},{"id":"cb1a2942-bc70-4314-843a-da3b6fed89fd","block_type":"box","text":"SEC as “security-based swap dealers”. Registered swap dealers and security-based swap dealers are","page_number":104,"box":{"x":116,"y":877,"width":765,"height":12}},{"id":"d70f0333-0cf9-42d1-b897-febbdd15cdb8","block_type":"box","text":"II-17","page_number":104,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b30b3ede-0454-414c-bfbc-f41053de2026","block_type":"box","text":"NM1026U-6030748-104/260","page_number":104,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c7cc53e6-4286-4f08-9d36-f6055ef3e0b3","block_type":"box","text":"subject to various regulatory requirements, including, but not limited to, margin, recordkeeping,","page_number":105,"box":{"x":116,"y":87,"width":708,"height":12}},{"id":"c3ffe655-3e05-46ff-b5d8-a570a972baa4","block_type":"box","text":"reporting, transparency, position limits, limitations on conflicts of interest, business conduct standards,","page_number":105,"box":{"x":117,"y":102,"width":761,"height":13}},{"id":"45b66bd5-7eac-4745-8081-527ebfb6e297","block_type":"box","text":"minimum capital requirements and other regulatory requirements, which indirectly impact the Funds","page_number":105,"box":{"x":117,"y":118,"width":743,"height":12}},{"id":"e60e66fc-741b-4aca-a566-1314b0a5f4cd","block_type":"box","text":"that enter into transactions with them.","page_number":105,"box":{"x":116,"y":134,"width":284,"height":9}},{"id":"8edade4f-89ed-410d-876a-7dbcdb3a6487","block_type":"box","text":"The CFTC requires that certain interest rate swaps and certain credit default swaps must be executed","page_number":105,"box":{"x":116,"y":165,"width":761,"height":11}},{"id":"4212d533-2f6d-4b31-83af-580e81e95c51","block_type":"box","text":"in regulated markets and be submitted for clearing to regulated clearinghouses. The SEC is also","page_number":105,"box":{"x":117,"y":180,"width":719,"height":12}},{"id":"1fe39ab5-013f-467c-a372-843db8221d50","block_type":"box","text":"expected to impose similar requirements on certain security-based derivatives in the future. OTC","page_number":105,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"fa7b4fbb-e531-438c-8738-17a0ebab0d20","block_type":"box","text":"derivatives trades submitted for clearing are subject to minimum initial and variation margin","page_number":105,"box":{"x":116,"y":211,"width":681,"height":12}},{"id":"b06f38cd-2e1b-4fe1-8db1-dbbe190b9127","block_type":"box","text":"requirements set by the relevant clearinghouse, as well as margin requirements mandated by the","page_number":105,"box":{"x":117,"y":227,"width":726,"height":12}},{"id":"863c7fa4-57d9-434f-9eb8-8a703eb2ec43","block_type":"box","text":"CFTC, SEC and/or federal prudential regulators. In addition, futures commission merchants (“FCMs”),","page_number":105,"box":{"x":117,"y":242,"width":760,"height":12}},{"id":"4654588f-86b7-4900-a87f-3f7772ad5162","block_type":"box","text":"who act as clearing members on behalf of customers for cleared OTC derivatives and futures","page_number":105,"box":{"x":116,"y":258,"width":697,"height":12}},{"id":"e0805ee1-8881-4a00-87ec-bcfa5efee28f","block_type":"box","text":"contracts, also have discretion to increase a Fund’s margin requirements for these transactions beyond","page_number":105,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"5d9a290f-58cc-4cad-a490-16b56c4cef44","block_type":"box","text":"any regulatory and clearinghouse minimums subject to any restrictions on such discretion in the","page_number":105,"box":{"x":116,"y":289,"width":715,"height":12}},{"id":"45736712-94c4-4dc9-a47f-a99179fb3780","block_type":"box","text":"documentation between the FCM and the customer. These regulatory requirements may make it more","page_number":105,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"d32a2ccd-5504-4773-b5e0-e162b8368f63","block_type":"box","text":"difficult and costly for the Funds to enter into highly tailored or customized transactions, potentially","page_number":105,"box":{"x":116,"y":320,"width":733,"height":12}},{"id":"966c0a31-c71f-48d3-ad76-9844fab8fd75","block_type":"box","text":"rendering certain investment strategies impossible or not economically feasible. If a Fund decides to","page_number":105,"box":{"x":117,"y":335,"width":747,"height":12}},{"id":"487b732e-70e1-45aa-a2b3-88dbef762104","block_type":"box","text":"execute and clear cleared OTC derivatives and/or futures contracts through execution facilities,","page_number":105,"box":{"x":116,"y":351,"width":712,"height":12}},{"id":"b37e6906-c098-4cb7-b655-7fc8eb71a560","block_type":"box","text":"exchanges or clearinghouses, either indirectly through an executing broker, clearing member FCM or","page_number":105,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"c5ebd8b0-2bde-448a-b6d9-3f2e8184212f","block_type":"box","text":"as a direct member, a Fund would be required to comply with the rules of the execution facility,","page_number":105,"box":{"x":116,"y":382,"width":709,"height":12}},{"id":"cb290f17-9165-48df-bea1-321e24533641","block_type":"box","text":"exchange or clearinghouse and other applicable law.","page_number":105,"box":{"x":116,"y":397,"width":397,"height":12}},{"id":"d3288bd8-e738-44e5-9761-4c10cd903c1d","block_type":"box","text":"With respect to cleared OTC derivatives and futures contracts and options on futures, a Fund will not","page_number":105,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"b656e08a-ab9f-41d5-92dc-ddf3c91ab52f","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":105,"box":{"x":116,"y":444,"width":759,"height":12}},{"id":"4fd760a0-b8f4-4cc8-9dff-ae8d90b444f9","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":105,"box":{"x":116,"y":459,"width":759,"height":12}},{"id":"c1341a49-9398-4188-be22-944abd12ba52","block_type":"box","text":"clearing member customer to meet its obligations to its clearing member. Such scenario could arise","page_number":105,"box":{"x":116,"y":475,"width":744,"height":12}},{"id":"392d5c3e-291d-44d1-acf6-2934ba16a3fe","block_type":"box","text":"due to a default by the clearing member on its obligations to the clearinghouse simultaneously with a","page_number":105,"box":{"x":116,"y":490,"width":752,"height":12}},{"id":"6775fcc8-9c15-4719-b0be-feb96db196d3","block_type":"box","text":"customer’s failure to meet its obligations to the clearing member.","page_number":105,"box":{"x":116,"y":506,"width":485,"height":12}},{"id":"d1a44be7-033b-4c96-9a04-ad48a31916e0","block_type":"box","text":"Clearing member FCMs are required to post initial margin to the clearinghouses through which they","page_number":105,"box":{"x":117,"y":537,"width":742,"height":12}},{"id":"2cf182eb-e4a2-4d4a-adf5-8b157a133e4b","block_type":"box","text":"clear their customers’ cleared OTC derivatives and futures contracts, instead of using such initial","page_number":105,"box":{"x":116,"y":552,"width":722,"height":12}},{"id":"02c0c7c4-3250-4ee3-b7de-e3ed09ea1586","block_type":"box","text":"margin in their businesses, as was widely permitted for OTC derivatives before Dodd-Frank. While an","page_number":105,"box":{"x":117,"y":568,"width":757,"height":12}},{"id":"c8151dd7-e21b-40b7-8b9d-71cf467b0476","block_type":"box","text":"FCM may require its customer to post initial margin in excess of clearinghouse requirements, and","page_number":105,"box":{"x":117,"y":583,"width":727,"height":12}},{"id":"4ab6ce50-3c3b-4030-9ea8-59e1241d028b","block_type":"box","text":"certain clearinghouses may share a portion of their earnings on initial margin with their clearing","page_number":105,"box":{"x":116,"y":599,"width":710,"height":12}},{"id":"20819720-3c30-4eb4-b164-abd5418b7605","block_type":"box","text":"members, some portion of the initial margin that is passed through to the clearinghouse does not","page_number":105,"box":{"x":117,"y":614,"width":722,"height":12}},{"id":"d07470f9-a23e-4980-a8b3-039a6252084c","block_type":"box","text":"generate earnings for the FCM. The inability of FCMs to earn the same levels of returns on initial","page_number":105,"box":{"x":116,"y":630,"width":722,"height":12}},{"id":"f9fb3752-3eeb-42d7-b903-11c98c86a534","block_type":"box","text":"margin for cleared OTC derivatives as they could earn with respect to non-cleared OTC derivatives","page_number":105,"box":{"x":117,"y":645,"width":739,"height":12}},{"id":"c0964896-2c7d-44e6-b402-6a2fc4326ca4","block_type":"box","text":"may cause FCMs to charge higher fees, or provide less favorable pricing on cleared OTC derivatives","page_number":105,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"1a2d46c1-a164-4e52-bb2d-256524c02ea2","block_type":"box","text":"than swap dealers will provide for non-cleared OTC derivatives. Furthermore, customers, including the","page_number":105,"box":{"x":116,"y":676,"width":760,"height":12}},{"id":"7aa20993-6c48-4e95-997f-6c9b5e9946f0","block_type":"box","text":"Funds, are subject to additional fees payable to FCMs with respect to cleared OTC derivatives, which","page_number":105,"box":{"x":117,"y":692,"width":751,"height":12}},{"id":"37105146-e102-431e-8559-84d06bb31872","block_type":"box","text":"may raise the cost to Funds of clearing as compared to trading non-cleared OTC derivatives bilaterally.","page_number":105,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"f15da07a-08d5-48b8-87cc-4d0df50e1bd8","block_type":"box","text":"With respect to uncleared swaps, registered swap dealers and security-based swap dealers are","page_number":105,"box":{"x":116,"y":738,"width":710,"height":12}},{"id":"6dedae9a-7465-4d55-8138-3748b850af6a","block_type":"box","text":"required to exchange variation margin with a Fund and may be required by applicable regulations to","page_number":105,"box":{"x":117,"y":754,"width":740,"height":12}},{"id":"6a86dc7b-75c2-4714-871d-bf2afa16c99e","block_type":"box","text":"collect (and in some cases exchange) initial margin with a Fund. Both initial and variation margin may","page_number":105,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"7acb4d95-1ef2-49ae-a924-3a708692a7b0","block_type":"box","text":"be comprised of cash and/or securities, subject to applicable regulatory haircuts and other restrictions.","page_number":105,"box":{"x":117,"y":785,"width":757,"height":12}},{"id":"6ff0aa5b-be16-4bc5-86e8-daa1e916078b","block_type":"box","text":"Shares of investment companies (other than certain money market funds) may not be posted as","page_number":105,"box":{"x":116,"y":800,"width":713,"height":12}},{"id":"3283b839-5fd7-4320-a668-24b96318ff29","block_type":"box","text":"collateral under applicable regulations.","page_number":105,"box":{"x":116,"y":816,"width":285,"height":12}},{"id":"46ac4f74-4b38-4846-931b-dd0035a9eef1","block_type":"box","text":"The CFTC, certain foreign regulators, and many futures exchanges have established (and continue to","page_number":105,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"b82eaf80-65ae-4d28-bb2d-d8fc0e14bc45","block_type":"box","text":"evaluate and monitor) speculative position limits (“position limits”) on the maximum speculative position","page_number":105,"box":{"x":116,"y":862,"width":771,"height":12}},{"id":"d8a110fa-e76f-456a-aa84-8b2d4b2746a9","block_type":"box","text":"which any person, or group of persons acting in concert, may hold or control in particular contracts. In","page_number":105,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"73516f4a-54ba-4aec-94fb-a21f683f448a","block_type":"box","text":"II-18","page_number":105,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"814eeb4c-9050-47c9-a132-8309c89124f3","block_type":"box","text":"NM1026U-6030748-105/260","page_number":105,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"67f93353-a4f6-4faf-a471-2fefa9422dfa","block_type":"box","text":"addition, U.S. federal position limits apply to swaps that are economically equivalent to futures","page_number":106,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"c49187f5-048d-4df6-8fbe-5313652a8747","block_type":"box","text":"contracts on certain agricultural, metals and energy commodities. All positions owned or controlled by","page_number":106,"box":{"x":116,"y":103,"width":758,"height":12}},{"id":"2a389ddd-6703-4d4d-9957-d890f5d5ba23","block_type":"box","text":"the same person or entity, even if in different accounts, must be aggregated for purposes of complying","page_number":106,"box":{"x":116,"y":118,"width":766,"height":12}},{"id":"146a3be5-0ea5-420d-8dd8-794da6591ed8","block_type":"box","text":"with the speculative limits. Thus, even if a Fund does not intend to exceed applicable position limits, it","page_number":106,"box":{"x":116,"y":134,"width":758,"height":11}},{"id":"36f893fb-e8e5-4ccb-a98e-a22830a4a5d9","block_type":"box","text":"is possible that different clients managed by the Manager and its affiliates may be aggregated for this","page_number":106,"box":{"x":117,"y":149,"width":755,"height":12}},{"id":"4e3b1ef6-755a-43eb-980a-1a7982d238c7","block_type":"box","text":"purpose. Therefore, the trading decisions of the Manager may have to be modified and positions held","page_number":106,"box":{"x":117,"y":165,"width":757,"height":12}},{"id":"64ae3dde-7c8f-4d2e-ac7b-79c7bc9930e5","block_type":"box","text":"by a Fund liquidated in order to avoid exceeding such limits. The modification of investment decisions","page_number":106,"box":{"x":117,"y":180,"width":757,"height":12}},{"id":"a9089533-0147-4b47-86a3-4c1e2a700dfd","block_type":"box","text":"or the elimination of open positions, if it occurs, may adversely affect the profitability of a Fund. A","page_number":106,"box":{"x":116,"y":196,"width":723,"height":12}},{"id":"4829cb37-aabc-402a-baa5-703836ef8e51","block_type":"box","text":"violation of position limits could also lead to regulatory action materially adverse to a Fund’s investment","page_number":106,"box":{"x":116,"y":211,"width":770,"height":12}},{"id":"0dee18b8-eee5-4a61-913e-2e1ba27c0fb9","block_type":"box","text":"strategy. A Fund may also be affected by other regimes, including those of the European Union and","page_number":106,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"ade0c22a-9d8c-4a98-89c2-b5ae156621f6","block_type":"box","text":"United Kingdom, and trading venues that impose position limits on commodity derivative contracts.","page_number":106,"box":{"x":117,"y":242,"width":737,"height":12}},{"id":"e60a1a44-5a6f-4800-b0a4-44d2eb348f51","block_type":"box","text":"Additional Regulation of Derivatives.","page_number":106,"box":{"x":115,"y":275,"width":269,"height":12}},{"id":"68343c22-947a-4f8f-b8ee-765916d3d6cf","block_type":"box","text":"Regulatory bodies outside the U.S. have also passed, proposed,","page_number":106,"box":{"x":386,"y":275,"width":489,"height":12}},{"id":"6de2eca4-cc71-443d-beb6-43bc786896b1","block_type":"box","text":"or may propose in the future, legislation similar to Dodd-Frank or other legislation that could increase","page_number":106,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"aec817ae-a480-4af3-8576-225668155250","block_type":"box","text":"the costs of participating in, or otherwise adversely impact the liquidity of, participating in the","page_number":106,"box":{"x":116,"y":306,"width":689,"height":12}},{"id":"7a48e272-e717-40b4-9d06-cdeea305812f","block_type":"box","text":"commodities markets. For example, the European Market Infrastructure Regulation (Regulation (EU)","page_number":106,"box":{"x":116,"y":321,"width":752,"height":12}},{"id":"00b4c936-63ec-4568-beef-bbca4d642b1e","block_type":"box","text":"No 648/2012) (“EMIR”) introduced certain requirements in respect of OTC derivatives including: (i) the","page_number":106,"box":{"x":117,"y":337,"width":761,"height":12}},{"id":"33e9a93d-d984-4c6f-81f3-993cb4eda333","block_type":"box","text":"mandatory clearing of OTC derivative contracts declared subject to the clearing obligation; (ii) risk","page_number":106,"box":{"x":117,"y":352,"width":728,"height":12}},{"id":"973cb769-52cc-4fc5-958e-c5bdc8608bc0","block_type":"box","text":"mitigation techniques in respect of uncleared OTC derivative contracts, including the mandatory","page_number":106,"box":{"x":117,"y":368,"width":714,"height":12}},{"id":"fb8d675e-363d-44b0-8626-2744d3d6c267","block_type":"box","text":"margining of uncleared OTC derivative contracts; and (iii) reporting and recordkeeping requirements in","page_number":106,"box":{"x":117,"y":383,"width":765,"height":12}},{"id":"b9ae518a-2841-4e88-bc97-185e5e0e8d77","block_type":"box","text":"respect of all derivatives contracts. By way of further example, the European Union Markets in","page_number":106,"box":{"x":117,"y":399,"width":703,"height":12}},{"id":"8127a25d-b74d-4ed3-a87d-557f9fc217a0","block_type":"box","text":"Financial Instruments Directive (Directive 2014/65/EU) and Markets in Financial Instruments","page_number":106,"box":{"x":117,"y":414,"width":688,"height":12}},{"id":"d2fba5f0-1074-46ce-96ca-6733741ba56a","block_type":"box","text":"Regulation (Regulation (EU) No 600/2014) (together “MiFID II”), which have applied since January 3,","page_number":106,"box":{"x":117,"y":430,"width":753,"height":12}},{"id":"1cfd7e1f-1d48-4b83-b709-b54e030e8b9d","block_type":"box","text":"2018, govern the provision of investment services and activities in relation to, as well as the organized","page_number":106,"box":{"x":116,"y":445,"width":762,"height":12}},{"id":"0aaaa26e-4714-4eb3-a7c3-64f76b2486ce","block_type":"box","text":"trading of, financial instruments such as shares, bonds, units in collective investment schemes and","page_number":106,"box":{"x":116,"y":461,"width":738,"height":12}},{"id":"2f8ff322-2406-4ba6-af3f-3752bfabf715","block_type":"box","text":"derivatives. In particular, MiFID II requires European Union Member States to apply position limits to","page_number":106,"box":{"x":116,"y":476,"width":749,"height":12}},{"id":"c3e3559a-ebd0-4a7f-8801-56326ee823fe","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":106,"box":{"x":116,"y":492,"width":754,"height":12}},{"id":"29f51c23-9a7a-4268-9af2-664bdd5d0854","block_type":"box","text":"Union trading venues and in “economically equivalent” OTC contracts. If the requirements of EMIR and","page_number":106,"box":{"x":117,"y":507,"width":769,"height":12}},{"id":"204ab931-5d1a-4c91-aa8d-efe6f5a5bcc0","block_type":"box","text":"MiFID II apply, the cost of derivatives transactions is expected to increase.","page_number":106,"box":{"x":117,"y":523,"width":550,"height":12}},{"id":"77de8396-4ba3-4b46-8926-01f8ddba15cb","block_type":"box","text":"In addition, regulations adopted by global prudential regulators that are now in effect require certain","page_number":106,"box":{"x":117,"y":555,"width":742,"height":13}},{"id":"20bc9a00-8bcc-4a83-80cf-1f1f9ad095dd","block_type":"box","text":"prudentially regulated entities and certain of their affiliates and subsidiaries (including swap dealers) to","page_number":106,"box":{"x":117,"y":571,"width":764,"height":12}},{"id":"7728bf41-ed43-41e9-ae12-85f495297c0e","block_type":"box","text":"include in their derivatives contracts and certain other financial contracts, terms that delay or restrict","page_number":106,"box":{"x":117,"y":586,"width":745,"height":13}},{"id":"14ba029a-9a2c-4046-b232-0d990b781554","block_type":"box","text":"the rights of counterparties (such as the Funds) to terminate such contracts, foreclose upon collateral,","page_number":106,"box":{"x":116,"y":602,"width":761,"height":12}},{"id":"ea87b571-b962-45a3-9448-b0f75117283f","block_type":"box","text":"exercise other default rights or restrict transfers of credit support in the event that the prudentially","page_number":106,"box":{"x":116,"y":617,"width":725,"height":13}},{"id":"ff7ff05c-b320-4fce-af36-2332b7b6cf9f","block_type":"box","text":"regulated entity and/or its affiliates are subject to certain types of resolution or insolvency proceedings.","page_number":106,"box":{"x":117,"y":633,"width":765,"height":12}},{"id":"ef3955fc-223d-4457-9d92-674662d8c9c3","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":106,"box":{"x":116,"y":648,"width":746,"height":13}},{"id":"48c785c4-87ce-4a6c-a7d3-75519ecf4458","block_type":"box","text":"counterparties located in those jurisdictions. In particular, in the United Kingdom and the European","page_number":106,"box":{"x":116,"y":664,"width":731,"height":12}},{"id":"cf130c1b-15f5-48d0-9b48-4d2f51a2d10b","block_type":"box","text":"Union, governmental authorities could reduce, eliminate or convert to equity the liabilities to a Fund of","page_number":106,"box":{"x":117,"y":680,"width":753,"height":12}},{"id":"fbd3e90c-6515-46ae-bfd1-1a37ad26fc25","block_type":"box","text":"a counterparty experiencing financial difficulties (sometimes referred to as a “bail in”). It is possible that","page_number":106,"box":{"x":116,"y":695,"width":763,"height":12}},{"id":"6710377f-581b-4940-b778-4dca6af6da10","block_type":"box","text":"these requirements, as well as potential additional related government regulation, could adversely","page_number":106,"box":{"x":116,"y":711,"width":726,"height":12}},{"id":"58cbdc90-2afe-430e-9a05-e313f37995d8","block_type":"box","text":"affect a Fund’s ability to terminate existing derivatives contracts, exercise default rights or satisfy","page_number":106,"box":{"x":116,"y":726,"width":716,"height":12}},{"id":"b1bdbc59-9032-40c8-bc3d-73288224ee1b","block_type":"box","text":"obligations owed to it with collateral received under such contracts.","page_number":106,"box":{"x":116,"y":742,"width":496,"height":12}},{"id":"723559dd-41da-4ba6-b7ba-4a95d251a480","block_type":"box","text":"Risk Factors in Derivatives.","page_number":106,"box":{"x":116,"y":774,"width":202,"height":10}},{"id":"50bdb0d2-9aff-479d-bb32-233a5f6b0d88","block_type":"box","text":"There are significant risks that apply generally to derivatives transactions, including:","page_number":106,"box":{"x":116,"y":798,"width":620,"height":12}},{"id":"9212f77c-b788-4dcc-82c7-6556ee661840","block_type":"box","text":"Correlation Risk —","page_number":106,"box":{"x":117,"y":831,"width":123,"height":10}},{"id":"0524b7f8-be49-42d4-8b1d-032cd53d87a7","block_type":"box","text":"— the risk that changes in the value of a derivative will not match the changes in the","page_number":106,"box":{"x":240,"y":831,"width":631,"height":12}},{"id":"ad532577-46b1-4321-93ed-8f0a1dcc258a","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":106,"box":{"x":116,"y":846,"width":765,"height":13}},{"id":"9c9b50d7-f960-4b93-9502-93dff9c25e12","block_type":"box","text":"Fund seeks exposure. There are a number of factors which may prevent a derivative instrument from","page_number":106,"box":{"x":117,"y":862,"width":754,"height":12}},{"id":"c676e0cb-36fb-44da-ab03-0e823b745c72","block_type":"box","text":"achieving the desired correlation (or inverse correlation) with an underlying asset, rate or index, such","page_number":106,"box":{"x":116,"y":877,"width":753,"height":13}},{"id":"6f3ca352-0da8-4286-a754-8bdb77fc7d7b","block_type":"box","text":"II-19","page_number":106,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0dee464a-a1e4-4d05-b50a-8408cde6f759","block_type":"box","text":"NM1026U-6030748-106/260","page_number":106,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f2a78f5c-b75a-4152-93ad-019af2872dba","block_type":"box","text":"as the impact of fees, expenses and transaction costs, the timing of pricing, and disruptions or illiquidity","page_number":107,"box":{"x":116,"y":87,"width":772,"height":12}},{"id":"e34c5188-68b0-412c-a47d-f1210fc1a594","block_type":"box","text":"in the markets for such derivative instrument.","page_number":107,"box":{"x":117,"y":102,"width":338,"height":10}},{"id":"6774524d-8312-49fc-bb1c-add44f5e7960","block_type":"box","text":"Counterparty Risk —","page_number":107,"box":{"x":117,"y":134,"width":138,"height":12}},{"id":"fb934e71-e75c-4d7c-931b-990f7432081e","block_type":"box","text":"—","page_number":107,"box":{"x":255,"y":139,"width":22,"height":4}},{"id":"d22752a7-280d-4f36-a874-9765a15cb121","block_type":"box","text":"the risk that a derivatives transaction counterparty will be unable or unwilling to","page_number":107,"box":{"x":277,"y":134,"width":590,"height":12}},{"id":"79ac321a-41bd-452d-bf5f-191eada78225","block_type":"box","text":"make payments or otherwise honor its obligations to a Fund and the related risks of having","page_number":107,"box":{"x":117,"y":149,"width":678,"height":12}},{"id":"19fb8737-29c1-4603-bf4a-51714d22103d","block_type":"box","text":"concentrated exposure to such a counterparty. In particular, derivatives traded in OTC markets often","page_number":107,"box":{"x":116,"y":165,"width":751,"height":12}},{"id":"5ccae2cb-0b15-4b76-9210-dc788b5bcbdb","block_type":"box","text":"are not guaranteed by an exchange or clearing corporation and often do not require payment of","page_number":107,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"91d0827f-3493-4b93-86ec-514700202cf9","block_type":"box","text":"margin, and to the extent that the Fund has unrealized gains in such instruments or has deposited","page_number":107,"box":{"x":117,"y":196,"width":732,"height":12}},{"id":"5757b18d-d360-4c20-97d8-13a5d49003f3","block_type":"box","text":"collateral with its counterparties the Fund is at risk that its counterparties will become bankrupt or","page_number":107,"box":{"x":116,"y":211,"width":725,"height":12}},{"id":"e901d5ed-7cf0-434e-afcd-9b40fbfc2d0c","block_type":"box","text":"otherwise fail to honor their obligations. A Fund will typically attempt to minimize counterparty risk by","page_number":107,"box":{"x":116,"y":227,"width":750,"height":12}},{"id":"6f898b4a-6b7c-4aa0-a603-d108c0601bb6","block_type":"box","text":"engaging in OTC derivatives transactions only with creditworthy entities that have substantial capital or","page_number":107,"box":{"x":116,"y":242,"width":768,"height":12}},{"id":"bef4bf58-cd8c-46ac-97ef-dd02377a0ff2","block_type":"box","text":"that have provided the Fund with a third-party guaranty or other credit support. When a Fund enters","page_number":107,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"20eb08f0-c49d-4294-a66d-730e06717fe4","block_type":"box","text":"into a derivatives transaction that is centrally cleared (whether mandatorily or voluntarily), the Fund is","page_number":107,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"7402239e-7060-4b25-8b9f-17087ee94541","block_type":"box","text":"subject to the credit risk of the clearing house and the clearing member through which it holds its","page_number":107,"box":{"x":116,"y":289,"width":722,"height":12}},{"id":"262c64ca-6b61-4a9f-ace2-068699161dd7","block_type":"box","text":"cleared position. Credit risk of market participants with respect to derivatives that are centrally cleared","page_number":107,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"74d01711-8e17-402f-9d32-af571d196c70","block_type":"box","text":"is concentrated in a few clearing houses and increasingly fewer clearing members. It is not clear how","page_number":107,"box":{"x":117,"y":320,"width":754,"height":12}},{"id":"d4db38ee-0114-4c0c-984a-5cf8c5e16721","block_type":"box","text":"an insolvency proceeding of a clearing house would be conducted and what impact an insolvency of a","page_number":107,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"8c0a05fe-4da5-49d5-b493-d7aaf922fd12","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":107,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"4b8ebe0d-8290-4f0c-9eaa-f0dfcb08ba19","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":107,"box":{"x":116,"y":366,"width":768,"height":12}},{"id":"5ff60d5a-635e-4d73-860b-2adf624b9dd7","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":107,"box":{"x":117,"y":382,"width":747,"height":12}},{"id":"e47b6bcd-8880-40cc-adbe-b5a8378fac54","block_type":"box","text":"cleared derivatives. Although a clearing member is required to segregate assets from customers with","page_number":107,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"c0b1aa55-15dd-4787-9390-fa4be1cac4cd","block_type":"box","text":"respect to cleared derivatives positions from the clearing member’s proprietary assets, if a clearing","page_number":107,"box":{"x":117,"y":413,"width":736,"height":12}},{"id":"c453f03e-4d64-49e4-a256-e3ee839f8c18","block_type":"box","text":"member does not comply with the applicable regulations, or in the event of fraud or misappropriation of","page_number":107,"box":{"x":117,"y":428,"width":768,"height":12}},{"id":"768db955-3770-4ab2-90e7-acd0d1909bd9","block_type":"box","text":"customer assets by a clearing member, a Fund could have only an unsecured creditor claim in an","page_number":107,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"04597df1-fbb7-4448-9ad7-b839faf16c9c","block_type":"box","text":"insolvency of the clearing member with respect to the assets held by the clearing member.","page_number":107,"box":{"x":117,"y":459,"width":675,"height":12}},{"id":"e1bfb8c5-0806-48ba-a3e5-a7ef387e6081","block_type":"box","text":"Credit Risk —","page_number":107,"box":{"x":117,"y":490,"width":86,"height":10}},{"id":"f6f3da40-d1ce-4876-bd34-8ac20ffb730d","block_type":"box","text":"— the risk that the reference entity in a credit default swap or similar derivative will not be","page_number":107,"box":{"x":203,"y":490,"width":668,"height":12}},{"id":"5bc21893-078a-4bd2-96bc-28c36b5d6ad5","block_type":"box","text":"able to honor its financial obligations.","page_number":107,"box":{"x":116,"y":506,"width":280,"height":12}},{"id":"ff2379cd-77d9-4d22-baa0-21ba2cbc2d59","block_type":"box","text":"Currency Risk —","page_number":107,"box":{"x":117,"y":537,"width":109,"height":12}},{"id":"6ccb6b63-2414-480e-a9e5-58bf925bcfb1","block_type":"box","text":"— the risk that changes in the exchange rate between two currencies will adversely","page_number":107,"box":{"x":226,"y":537,"width":625,"height":12}},{"id":"e8a654e9-1f9e-4095-b3dc-59ec2908a890","block_type":"box","text":"affect the value (in U.S. dollar terms) of a derivative.","page_number":107,"box":{"x":116,"y":552,"width":392,"height":12}},{"id":"bfce119c-88af-46ed-956a-76fcdbdd0cb7","block_type":"box","text":"Illiquidity Risk —","page_number":107,"box":{"x":117,"y":583,"width":105,"height":12}},{"id":"0e658a56-eddd-4956-85f5-ec38ea5b0932","block_type":"box","text":"— the risk that certain securities or instruments may be difficult or impossible to sell at","page_number":107,"box":{"x":222,"y":583,"width":644,"height":12}},{"id":"3051b795-2c21-4ce3-9591-8ee4f889af43","block_type":"box","text":"the time or at the price desired by a Fund in connection with payments of margin, collateral, or","page_number":107,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"d4ad4b14-3cea-4663-843b-375e79d19a89","block_type":"box","text":"settlement payments. There can be no assurance that a Fund will be able to unwind or offset a","page_number":107,"box":{"x":116,"y":614,"width":708,"height":12}},{"id":"326f29fb-4e9e-491e-8a79-10c312d59b9f","block_type":"box","text":"derivative at its desired price, in a secondary market or otherwise. It may, therefore, not be possible for","page_number":107,"box":{"x":116,"y":630,"width":768,"height":12}},{"id":"83d4a873-a9cb-42b5-8983-8af269cfaf02","block_type":"box","text":"the Fund to unwind its position in a derivative without incurring substantial losses (if at all). Certain","page_number":107,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"ed99d364-380e-4050-a223-84311e13d76a","block_type":"box","text":"OTC derivatives, including swaps and OTC options, involve substantial illiquidity risk. Illiquidity may","page_number":107,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"228a821b-d760-474f-9185-07a0f2a6b510","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":107,"box":{"x":116,"y":676,"width":723,"height":11}},{"id":"3f2e2b73-ee5e-46c6-b677-1bd9591d1e3c","block_type":"box","text":"therefore, acquire illiquid OTC derivatives (i) if the agreement pursuant to which the instrument is","page_number":107,"box":{"x":116,"y":692,"width":719,"height":12}},{"id":"c19170da-f21a-4bd4-a0a0-c00092f7d65a","block_type":"box","text":"purchased contains a formula price at which the instrument may be terminated or sold, or (ii) for which","page_number":107,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"ea1a4bd4-7c19-42f2-b996-9fe526973936","block_type":"box","text":"the Manager anticipates the Fund can receive on each business day at least two independent bids or","page_number":107,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"f28a421c-1b6c-44b0-ab8c-f8760199ebf5","block_type":"box","text":"offers, unless a quotation from only one dealer is available, in which case that dealer’s quotation may","page_number":107,"box":{"x":116,"y":738,"width":751,"height":12}},{"id":"980948eb-7075-416d-8ff6-1d0e4fc4dc6b","block_type":"box","text":"be used. The illiquidity of the derivatives markets may be due to various factors, including congestion,","page_number":107,"box":{"x":117,"y":754,"width":752,"height":12}},{"id":"6edaaacd-8d16-4a0d-88d6-01589bf34227","block_type":"box","text":"disorderly markets, limitations on deliverable supplies, the participation of speculators, government","page_number":107,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"d32e3f19-daac-4a12-9118-62c2e30d2d91","block_type":"box","text":"regulation and intervention, and technical and operational or system failures. In addition, the liquidity of","page_number":107,"box":{"x":117,"y":785,"width":763,"height":12}},{"id":"eb6da239-fd4f-4ad1-8ffc-7ff873112edd","block_type":"box","text":"a market in an exchange-traded derivative contract may be adversely affected by “daily price","page_number":107,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"16c56d23-cfb3-40c5-8ccc-bdc9734afab4","block_type":"box","text":"fluctuation limits” established by the exchanges which limit the amount of fluctuation in an exchange","page_number":107,"box":{"x":116,"y":816,"width":747,"height":12}},{"id":"f497bccf-7918-4389-8567-d198a0b918cd","block_type":"box","text":"traded contract price during a single trading day. Once the daily limit has been reached in the contract,","page_number":107,"box":{"x":116,"y":831,"width":766,"height":12}},{"id":"f3525736-d329-469e-9992-889b2c9d1ddd","block_type":"box","text":"no trades may be entered into at a price beyond the limit, thus preventing the liquidation of open","page_number":107,"box":{"x":117,"y":847,"width":717,"height":12}},{"id":"b5f605f9-d374-4780-a6b3-a1ccb272d176","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":107,"box":{"x":117,"y":862,"width":768,"height":12}},{"id":"a01d59bb-43e3-466e-b8fd-398a722dda62","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":107,"box":{"x":117,"y":878,"width":762,"height":12}},{"id":"e2b7f012-1231-4179-b640-ea1be203c968","block_type":"box","text":"II-20","page_number":107,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"af4fbd4b-dc97-4772-807c-97a514570efe","block_type":"box","text":"NM1026U-6030748-107/260","page_number":107,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f30dcaea-1b1b-488d-ad76-46589d8b02f8","block_type":"box","text":"Fund would continue to be required to make daily cash payments of variation margin in the event of","page_number":108,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"89648f6d-18dd-4e49-a0dc-20494f703191","block_type":"box","text":"adverse price movements. In such a situation, if the Fund has insufficient cash, it may have to sell","page_number":108,"box":{"x":116,"y":102,"width":732,"height":13}},{"id":"38e3d715-f6e8-4c66-89b1-fe3695aafcc9","block_type":"box","text":"portfolio securities to meet daily variation margin requirements at a time when it may be","page_number":108,"box":{"x":117,"y":118,"width":654,"height":12}},{"id":"ab6e239f-054c-4664-8a30-dc7bde3d2101","block_type":"box","text":"disadvantageous to do so.","page_number":108,"box":{"x":116,"y":134,"width":201,"height":12}},{"id":"39f8d4e8-f4ee-4344-8d83-1a826cc25a25","block_type":"box","text":"Index Risk","page_number":108,"box":{"x":117,"y":166,"width":78,"height":9}},{"id":"4dde04db-de25-4f17-8596-b1e29d67fb1c","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":108,"box":{"x":194,"y":166,"width":656,"height":12}},{"id":"61ecccf7-921e-4e14-a9ba-3a4afd0f2fe5","block_type":"box","text":"associated with changes in that index. If the index changes, the Fund could receive lower interest","page_number":108,"box":{"x":116,"y":181,"width":728,"height":12}},{"id":"51e55536-bbb5-4688-881d-050aa4fcdf5a","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":108,"box":{"x":117,"y":197,"width":762,"height":12}},{"id":"594c46bf-99e5-4045-af59-abedbf5771bd","block_type":"box","text":"for such derivative.","page_number":108,"box":{"x":116,"y":212,"width":146,"height":10}},{"id":"1adc782a-cf93-444c-9bb9-a39052f0b653","block_type":"box","text":"Legal Risk","page_number":108,"box":{"x":116,"y":245,"width":79,"height":12}},{"id":"bfd4f655-adee-4382-9120-6eb82850c1cc","block_type":"box","text":"k — the risk of insufficient documentation, insufficient capacity or authority of counterparty, or","page_number":108,"box":{"x":194,"y":245,"width":689,"height":12}},{"id":"e0e34ca0-dcf2-4c47-aa72-ebc6dbae413c","block_type":"box","text":"legality or enforceability of a contract.","page_number":108,"box":{"x":117,"y":260,"width":281,"height":12}},{"id":"b768f9c3-7077-4954-9a4d-9b817d80d2f1","block_type":"box","text":"Leverage Risk —","page_number":108,"box":{"x":116,"y":293,"width":112,"height":12}},{"id":"ff4c71a8-3202-4e70-8c49-8ccfa4a2b927","block_type":"box","text":"— the risk that a Fund’s derivatives transactions can magnify the Fund’s gains and","page_number":108,"box":{"x":228,"y":293,"width":619,"height":12}},{"id":"bc841f36-c534-4753-9ab7-25556c81d09d","block_type":"box","text":"losses. Relatively small market movements may result in large changes in the value of a derivatives","page_number":108,"box":{"x":117,"y":308,"width":744,"height":12}},{"id":"835fa0f7-de66-4c63-ad6e-ea6286312e40","block_type":"box","text":"position and can result in losses that greatly exceed the amount originally invested.","page_number":108,"box":{"x":117,"y":324,"width":621,"height":12}},{"id":"857dd3be-d12e-4840-a90e-9451e687657b","block_type":"box","text":"Market Risk —","page_number":108,"box":{"x":116,"y":356,"width":93,"height":10}},{"id":"20b29d42-3024-4a15-8513-de83cb0a0151","block_type":"box","text":"— the risk that changes in the value of one or more markets or changes with respect to","page_number":108,"box":{"x":209,"y":356,"width":653,"height":12}},{"id":"6f170db2-c60d-42d3-bbc6-53953efda56d","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":108,"box":{"x":116,"y":371,"width":719,"height":13}},{"id":"563b5cf6-5032-4e0e-893a-e5e1f39e7681","block_type":"box","text":"adverse movement, a Fund may be required to pay substantial additional margin to maintain its","page_number":108,"box":{"x":116,"y":387,"width":713,"height":12}},{"id":"c98c88b7-01ad-4391-937c-8869124b312b","block_type":"box","text":"position or the Fund’s returns may be adversely affected.","page_number":108,"box":{"x":117,"y":402,"width":427,"height":13}},{"id":"712920be-3034-4231-b1df-11999f0f19e6","block_type":"box","text":"Operational Risk","page_number":108,"box":{"x":117,"y":435,"width":124,"height":12}},{"id":"4c8a2d72-17f7-4b63-9a04-ee35fd3cad0d","block_type":"box","text":"k — the risk related to potential operational issues, including documentation issues,","page_number":108,"box":{"x":240,"y":435,"width":616,"height":12}},{"id":"b25d3c17-0b35-4b53-aec5-3f75f2ce9f20","block_type":"box","text":"settlement issues, systems failures, inadequate controls and human error.","page_number":108,"box":{"x":116,"y":450,"width":555,"height":12}},{"id":"3a042b24-d31a-42bc-a4a3-0956c2c50b00","block_type":"box","text":"Valuation Risk —","page_number":108,"box":{"x":118,"y":483,"width":110,"height":9}},{"id":"72f879db-2bbc-4fe5-ac49-43880637711c","block_type":"box","text":"— the risk that valuation sources for a derivative will not be readily available in the","page_number":108,"box":{"x":228,"y":483,"width":614,"height":12}},{"id":"e7de1924-cd97-455e-8051-86ef98878c36","block_type":"box","text":"market. This is possible especially in times of market distress, since many market participants may be","page_number":108,"box":{"x":117,"y":498,"width":760,"height":12}},{"id":"807583ba-e5ef-4886-96be-6df99a7d04c0","block_type":"box","text":"reluctant to purchase complex instruments or quote prices for them.","page_number":108,"box":{"x":117,"y":514,"width":507,"height":12}},{"id":"7cd7bbd8-2a01-43e4-870c-c61763bf775e","block_type":"box","text":"Volatility Risk —","page_number":108,"box":{"x":118,"y":546,"width":102,"height":12}},{"id":"22cfaf82-5301-4b84-9976-dac052ead59d","block_type":"box","text":"— the risk that the value of derivatives will fluctuate significantly within a short time","page_number":108,"box":{"x":220,"y":546,"width":619,"height":12}},{"id":"e5f36651-7243-4ff3-aa76-3fadbe83f0b5","block_type":"box","text":"period.","page_number":108,"box":{"x":117,"y":562,"width":55,"height":12}},{"id":"758a8aa0-ed31-4543-918f-a616d377da2a","block_type":"box","text":"Types of Derivatives Transactions.","page_number":108,"box":{"x":118,"y":594,"width":261,"height":12}},{"id":"83ba9a4c-89c1-426d-97a5-c390c51b8680","block_type":"box","text":"A Fund may enter into derivatives transactions in accordance with its investment guidelines and","page_number":108,"box":{"x":116,"y":618,"width":715,"height":12}},{"id":"222106df-6153-432d-bed1-f6a819212ac9","block_type":"box","text":"restrictions, including the following:","page_number":108,"box":{"x":117,"y":633,"width":263,"height":12}},{"id":"57b5409a-3c3a-405f-9248-87356cd17c0e","block_type":"box","text":"Futures.","page_number":108,"box":{"x":116,"y":666,"width":60,"height":9}},{"id":"c1ea4519-7cce-4999-8844-0ca00e160a81","block_type":"box","text":"A Fund may enter into futures contracts (“futures”) and options on futures contracts. Futures are","page_number":108,"box":{"x":116,"y":690,"width":713,"height":12}},{"id":"5b2162ac-157d-4a8f-96b4-744e7b2e2ae4","block_type":"box","text":"standardized, exchange-traded contracts that require a purchaser to take delivery, and a seller to make","page_number":108,"box":{"x":116,"y":705,"width":767,"height":12}},{"id":"327ee5e9-db6d-44b7-a806-65ff32372dd4","block_type":"box","text":"delivery, of a specified amount of an asset at a specified future date and price. Upon purchasing or","page_number":108,"box":{"x":116,"y":721,"width":734,"height":12}},{"id":"5736210e-2443-4f44-a25b-93f8c0052e76","block_type":"box","text":"selling a futures contract, a Fund is required to deposit initial margin equal to a percentage of the","page_number":108,"box":{"x":116,"y":736,"width":718,"height":12}},{"id":"00f1e92c-958e-4a05-ac5b-c24d0d3e4f73","block_type":"box","text":"contract value. Futures contracts are marked to market daily for the duration of the contract, and the","page_number":108,"box":{"x":116,"y":752,"width":743,"height":12}},{"id":"b8f75d54-83cd-49e1-9f1d-e4353380cb29","block_type":"box","text":"Fund will either post additional margin or be entitled to a payment, as applicable, based on the","page_number":108,"box":{"x":117,"y":767,"width":699,"height":12}},{"id":"75fa32b9-227b-4f16-a8a9-e4184232be36","block_type":"box","text":"mark-to-market movement of the contract.","page_number":108,"box":{"x":117,"y":783,"width":311,"height":9}},{"id":"3c40f207-ebdf-42d9-a430-09fea7cf291e","block_type":"box","text":"A Fund may sell a futures contract prior to the completion","page_number":108,"box":{"x":116,"y":815,"width":425,"height":12}},{"id":"70652fbd-254a-418f-9fdf-0a2d6df081d5","block_type":"box","text":"of its term to limit its risk of loss from a","page_number":108,"box":{"x":548,"y":815,"width":284,"height":10}},{"id":"187d7da8-8135-48f1-8117-f4c4fed988a8","block_type":"box","text":"decline in the market value of portfolio holdings correlated with the futures contract. However, in the","page_number":108,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"7bf8541b-f18e-4984-9759-b9a187d26b29","block_type":"box","text":"event the market value of the portfolio holdings correlated with the futures contract increases rather","page_number":108,"box":{"x":116,"y":846,"width":742,"height":12}},{"id":"a899d448-ca37-4cfc-a3cf-c73bc0bf0243","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":108,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"67aace70-a90c-423c-a20c-47db0b164959","block_type":"box","text":"holdings than would have been realized without the purchase of the futures contract.","page_number":108,"box":{"x":117,"y":877,"width":631,"height":12}},{"id":"916e3952-d607-4e12-aa3b-29899f70e49a","block_type":"box","text":"II-21","page_number":108,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"3d4a1ba9-ea27-45ac-b6c1-49a2dade46ce","block_type":"box","text":"NM1026U-6030748-108/260","page_number":108,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3fd3fa5a-8ec9-44ae-8ef8-5363e7139a9d","block_type":"box","text":"The purchase of a futures contract may provide a Fund a lower cost alternative to purchasing","page_number":109,"box":{"x":116,"y":87,"width":697,"height":12}},{"id":"85fab9ea-71f7-4035-8cfe-b2c562d37a0b","block_type":"box","text":"securities or commodities directly. In the event that such securities or commodities decline in value or a","page_number":109,"box":{"x":116,"y":103,"width":772,"height":12}},{"id":"5f5f391c-e932-4879-af0d-44d0025e7a0f","block_type":"box","text":"Fund determines not to complete an anticipatory hedge transaction relating to a futures contract,","page_number":109,"box":{"x":117,"y":118,"width":720,"height":12}},{"id":"6f695cc2-ea73-4c62-a3a3-83b6f78a02a0","block_type":"box","text":"however, the Fund may realize a loss relating to the futures position.","page_number":109,"box":{"x":117,"y":134,"width":512,"height":12}},{"id":"4e2b341d-224b-48cd-84de-531cdd63a450","block_type":"box","text":"Futures contracts are also subject to position limits. In order to comply with position limits, a Fund may","page_number":109,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"a72e52d4-5aa5-4160-83fb-81464592d69a","block_type":"box","text":"be required to liquidate positions or may not be able to fully implement trading instructions. Any such","page_number":109,"box":{"x":117,"y":181,"width":750,"height":12}},{"id":"03da233c-4895-46d4-98eb-f93e4f783448","block_type":"box","text":"liquidation or limited implementation could result in substantial costs to a Fund. See “— Regulation of","page_number":109,"box":{"x":117,"y":196,"width":754,"height":13}},{"id":"452f46af-0920-4a37-880f-771a695b217b","block_type":"box","text":"Derivatives — Dodd-Frank Regulations” above.","page_number":109,"box":{"x":117,"y":212,"width":356,"height":12}},{"id":"703b35f0-b9d6-4aca-b10d-235a636be0fd","block_type":"box","text":"A Fund is also permitted to purchase or sell call and put options on futures contracts, including","page_number":109,"box":{"x":116,"y":244,"width":706,"height":12}},{"id":"84eb9eb0-61fe-48df-9082-9f87ab6a4413","block_type":"box","text":"financial futures and stock indices. Generally, these strategies would be used under the same market","page_number":109,"box":{"x":116,"y":259,"width":757,"height":13}},{"id":"a043d818-e1bc-418b-bb7c-27a7dd169127","block_type":"box","text":"and market sector conditions (","page_number":109,"box":{"x":116,"y":275,"width":225,"height":12}},{"id":"cc0f8cc6-3e21-43d0-9e73-24c92d346a9f","block_type":"box","text":"i.e.","page_number":109,"box":{"x":342,"y":275,"width":20,"height":10}},{"id":"4e28b786-c491-4d4b-927c-f380ea0bed1f","block_type":"box","text":", conditions relating to specific types of investments) in which the","page_number":109,"box":{"x":365,"y":275,"width":485,"height":12}},{"id":"722e5170-a6d0-4a07-9005-7cc9ef83c214","block_type":"box","text":"Fund entered into futures transactions. A Fund may purchase put options or write call options on","page_number":109,"box":{"x":117,"y":290,"width":720,"height":13}},{"id":"67162709-9901-4799-a18c-04a47185a49d","block_type":"box","text":"futures contracts and stock indices in lieu of selling the underlying futures contract in anticipation of a","page_number":109,"box":{"x":116,"y":306,"width":754,"height":12}},{"id":"d7a06e56-1187-47d5-93ef-887826bc5943","block_type":"box","text":"decrease in the market value of its securities. Similarly, a Fund can purchase call options, or write put","page_number":109,"box":{"x":116,"y":321,"width":759,"height":13}},{"id":"efae012a-fc04-468a-b6d1-8e49e4b6dc90","block_type":"box","text":"options on futures contracts and stock indices, as a substitute for the purchase of such futures","page_number":109,"box":{"x":116,"y":337,"width":705,"height":12}},{"id":"a35ec73b-379c-4e54-8f06-2b01c75e6fd5","block_type":"box","text":"contracts to hedge against the increased cost resulting from an increase in the market value of","page_number":109,"box":{"x":116,"y":352,"width":707,"height":13}},{"id":"39bcea5a-b5b7-4262-aa7c-a87a5cc052c3","block_type":"box","text":"securities which the Fund intends to purchase.","page_number":109,"box":{"x":116,"y":368,"width":350,"height":12}},{"id":"8ea78856-f4bf-43ca-bf61-a9e1e9621278","block_type":"box","text":"To maintain greater flexibility, a Fund may invest in instruments which have characteristics similar to","page_number":109,"box":{"x":116,"y":400,"width":748,"height":12}},{"id":"b8389fc6-f941-4677-9cca-505debb71dcc","block_type":"box","text":"futures contracts. These instruments may take a variety of forms, such as debt securities with interest","page_number":109,"box":{"x":116,"y":415,"width":759,"height":13}},{"id":"76e93231-22c5-42b2-b223-62f450e13e82","block_type":"box","text":"or principal payments determined by reference to the value of a security, an index of securities or a","page_number":109,"box":{"x":116,"y":431,"width":740,"height":12}},{"id":"d5d211a4-310d-47b9-a0f7-b9d7c95ee8de","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":109,"box":{"x":116,"y":446,"width":764,"height":13}},{"id":"d0cd01f6-038d-4661-a011-959b83544f1b","block_type":"box","text":"futures and securities, including volatility and illiquidity.","page_number":109,"box":{"x":116,"y":462,"width":410,"height":12}},{"id":"366a3613-6c2d-41eb-8ca4-53333e2ed9cc","block_type":"box","text":"Futures contracts and options on futures contracts are subject to significant correlation risk, leverage","page_number":109,"box":{"x":117,"y":494,"width":751,"height":12}},{"id":"d66981c0-6906-463d-868e-fdb1fe8f6b95","block_type":"box","text":"risk, illiquidity risk, market risk and counterparty risk with respect to a Fund’s futures broker or the","page_number":109,"box":{"x":117,"y":509,"width":726,"height":13}},{"id":"4bc6018e-2be7-493c-9465-1289b0ac6a8f","block_type":"box","text":"clearinghouse. See “— Risk Factors in Derivatives” above.","page_number":109,"box":{"x":116,"y":525,"width":440,"height":12}},{"id":"8ad1416c-2bd3-43bb-bc49-3268eb31e3fd","block_type":"box","text":"Certain Funds may invest in futures based on carbon “allowances.” Under certain regulatory regimes, a","page_number":109,"box":{"x":117,"y":557,"width":771,"height":12}},{"id":"95b2c835-7ce9-411a-9f14-7a7f0b395544","block_type":"box","text":"limit is set by a regulator, such as a government entity, on the total amount of specific greenhouse","page_number":109,"box":{"x":117,"y":572,"width":732,"height":13}},{"id":"bd16b802-d294-4651-bb10-5f7a98b7d08c","block_type":"box","text":"gases, such as CO2, that can be emitted by regulated entities, such as manufacturers or energy","page_number":109,"box":{"x":116,"y":588,"width":720,"height":12}},{"id":"288d3b44-1468-4204-b0b5-abf6a099a6c4","block_type":"box","text":"producers. The regulator then may issue or sell individual “emission allowances” to regulated entities,","page_number":109,"box":{"x":117,"y":603,"width":756,"height":13}},{"id":"db239134-f763-4329-a2a5-35eca39b0dbb","block_type":"box","text":"which can then be traded on the open market. Commodity futures contracts linked to the value of","page_number":109,"box":{"x":116,"y":619,"width":725,"height":12}},{"id":"d6d097e3-7d7b-46a0-9358-71b488257e13","block_type":"box","text":"emission allowances are known as “carbon futures.”","page_number":109,"box":{"x":116,"y":634,"width":392,"height":10}},{"id":"90a02475-2308-4247-ad57-e4de62febc1a","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":109,"box":{"x":116,"y":666,"width":756,"height":13}},{"id":"43fe2cb3-83d9-446a-8b2f-6770ac94994c","block_type":"box","text":"demand for carbon futures contracts. Market conditions and expectations, position limits, collateral","page_number":109,"box":{"x":116,"y":682,"width":730,"height":12}},{"id":"4c8b3adb-35c0-4686-ac86-e68190cbaa9d","block_type":"box","text":"requirements, and other factors each can impact the supply of and demand for carbon futures","page_number":109,"box":{"x":117,"y":697,"width":694,"height":13}},{"id":"56244a6e-b9d2-40c7-895d-092f4f831881","block_type":"box","text":"contracts. The market for carbon futures contracts is still developing and may be subject to periods of","page_number":109,"box":{"x":116,"y":713,"width":753,"height":12}},{"id":"bb4f6124-846f-433e-aa25-a4472d502f37","block_type":"box","text":"illiquidity. During such times it may be difficult or impossible to buy or sell a position at the desired","page_number":109,"box":{"x":117,"y":728,"width":723,"height":13}},{"id":"df1f8e0e-da0c-4185-ab39-33745397c95e","block_type":"box","text":"price. Market disruptions or volatility can also make it difficult to find a counterparty willing to transact at","page_number":109,"box":{"x":117,"y":744,"width":765,"height":12}},{"id":"f59fcbb1-44ee-447f-bfa1-2dcafa6444ac","block_type":"box","text":"a reasonable price and sufficient size.","page_number":109,"box":{"x":116,"y":759,"width":280,"height":12}},{"id":"0933278e-54df-464e-9690-2224867d4ff9","block_type":"box","text":"Swap Agreements.","page_number":109,"box":{"x":117,"y":791,"width":139,"height":13}},{"id":"4a8b7032-ed88-4c57-be63-0e17f31a7f53","block_type":"box","text":"A Fund may enter into swap agreements for hedging purposes or speculative purposes. Swap","page_number":109,"box":{"x":116,"y":815,"width":699,"height":12}},{"id":"da979110-f447-459c-9b8e-2e7e396dbfb2","block_type":"box","text":"agreements are OTC contracts entered into primarily by financial institutions and institutional investors","page_number":109,"box":{"x":116,"y":831,"width":764,"height":12}},{"id":"0206acb9-3652-47e3-a651-3ccb1d749516","block_type":"box","text":"which may or may not be cleared by a central clearinghouse. In a standard “swap” transaction, two","page_number":109,"box":{"x":116,"y":846,"width":738,"height":12}},{"id":"604bb281-cbfd-4ee4-812d-89b75a94b72f","block_type":"box","text":"parties agree to exchange the returns earned or realized from one or more underlying assets or rates","page_number":109,"box":{"x":117,"y":862,"width":755,"height":12}},{"id":"2f3b5b65-24da-48ae-90ad-8afb63c53c93","block_type":"box","text":"of return, which may be adjusted for an interest factor. The gross returns to be exchanged or","page_number":109,"box":{"x":116,"y":877,"width":693,"height":12}},{"id":"f6a94a59-346c-4a1d-bb16-98fe02b7c0e6","block_type":"box","text":"II-22","page_number":109,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"36550036-bbbd-4f01-a175-a4e1a994bb09","block_type":"box","text":"NM1026U-6030748-109/260","page_number":109,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"53a9ad4b-eed2-4045-ab50-828272dbd79e","block_type":"box","text":"“swapped” between the parties are generally calculated with respect to a “notional amount,”","page_number":110,"box":{"x":116,"y":87,"width":684,"height":12}},{"id":"6b29e728-a9e8-42d7-8b2b-a0f4506088bb","block_type":"box","text":"e.g.","page_number":110,"box":{"x":801,"y":90,"width":26,"height":9}},{"id":"d23d03e2-0728-4995-a133-be04e27326e0","block_type":"box","text":", the","page_number":110,"box":{"x":830,"y":87,"width":36,"height":11}},{"id":"670a56b8-3a5c-472f-ba70-9ad6511ce309","block_type":"box","text":"return or increase in value of a particular dollar amount invested at a particular interest rate, in a","page_number":110,"box":{"x":117,"y":102,"width":716,"height":12}},{"id":"752adaa2-7d44-4339-888e-e39eee03745f","block_type":"box","text":"particular foreign currency, or in a “basket” of securities representing a particular index. The notional","page_number":110,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"ff3d6c5f-ab75-472b-bc70-5e7e887586f0","block_type":"box","text":"amount of the swap agreement is only used to calculate the obligations that the parties to a swap","page_number":110,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"33758c6a-2a9a-45f8-997b-3b71814de1d4","block_type":"box","text":"agreement have agreed to exchange. A Fund’s obligations (or rights) under a swap agreement will","page_number":110,"box":{"x":116,"y":149,"width":736,"height":12}},{"id":"7856c12c-1862-41bd-a1ae-0bbd3b072cd6","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":110,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"da81d5bd-e60c-4b51-a45b-ecb1f5baf367","block_type":"box","text":"relative values of the positions held by each party to the agreement. Swaps that are not cleared involve","page_number":110,"box":{"x":117,"y":180,"width":770,"height":12}},{"id":"1773bf95-b95a-415c-a51d-cabee370ad5e","block_type":"box","text":"substantial counterparty risk. A Fund will typically attempt to mitigate this counterparty risk by entering","page_number":110,"box":{"x":116,"y":196,"width":761,"height":12}},{"id":"37ab024c-b6aa-4888-a06d-54892b69a148","block_type":"box","text":"into swap agreements only with creditworthy entities that have substantial capital or that have provided","page_number":110,"box":{"x":117,"y":211,"width":767,"height":12}},{"id":"3cc680a5-8614-4a2e-a764-11d4e9df87a8","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":110,"box":{"x":116,"y":227,"width":751,"height":12}},{"id":"501ff0ac-d069-4698-b6d6-beb94ddc1ce0","block_type":"box","text":"may be restricted by the tax rules applicable to registered investment companies.","page_number":110,"box":{"x":117,"y":242,"width":607,"height":12}},{"id":"bb493ec0-ff72-4f79-bf97-3bd655751be6","block_type":"box","text":"Credit Default Swaps and Similar Instruments.","page_number":110,"box":{"x":117,"y":273,"width":333,"height":12}},{"id":"c574e290-9e05-4d4b-a341-5a387acc85f7","block_type":"box","text":"Certain Funds may enter into credit default swaps and","page_number":110,"box":{"x":450,"y":273,"width":389,"height":12}},{"id":"b3a33faf-5735-4692-a62d-c8850ebb36cf","block_type":"box","text":"similar instruments. Credit default swaps are standardi","page_number":110,"box":{"x":116,"y":289,"width":386,"height":12}},{"id":"9913f878-5e87-4a86-9b6b-85dbc3a0560c","block_type":"box","text":"zed agreements in which the protection “buyer” pays","page_number":110,"box":{"x":503,"y":289,"width":378,"height":12}},{"id":"768d85ff-e780-49f6-a03e-4f2e8992f085","block_type":"box","text":"the protection “seller” an up-front payment, or a periodic","page_number":110,"box":{"x":116,"y":304,"width":400,"height":12}},{"id":"7388bb74-9950-4d25-b24d-60623cd0f2fc","block_type":"box","text":"stream of payments, over the term of the contract,","page_number":110,"box":{"x":517,"y":304,"width":360,"height":12}},{"id":"1bffa9a0-1c19-4491-886d-1ede0e2a3380","block_type":"box","text":"provided generally that no credit event on a reference ob","page_number":110,"box":{"x":117,"y":320,"width":401,"height":12}},{"id":"bbe82d3f-ba33-4392-8c82-70a1e8eec5b2","block_type":"box","text":"ligation has occurred. If a credit event occurs, the","page_number":110,"box":{"x":520,"y":320,"width":353,"height":12}},{"id":"dc975035-1aa3-4e39-aaf2-ebd12789d759","block_type":"box","text":"seller generally must pay the buyer the difference","page_number":110,"box":{"x":116,"y":335,"width":355,"height":12}},{"id":"aad793b9-2c38-450b-a808-d1b05c924e8d","block_type":"box","text":"between the notional amount of the contract and the","page_number":110,"box":{"x":472,"y":335,"width":375,"height":10}},{"id":"00b10ef2-fec2-4781-b93b-0e43cb1dee72","block_type":"box","text":"value of a portfolio of securities issued by the refere","page_number":110,"box":{"x":116,"y":351,"width":357,"height":12}},{"id":"3280ca70-8300-494e-9ce7-99deadf25fd7","block_type":"box","text":"rence entity. A Fund may be either the buyer or seller in","page_number":110,"box":{"x":473,"y":351,"width":395,"height":12}},{"id":"6e064fae-9a1b-4063-9d90-8228ded60f12","block_type":"box","text":"the transaction. The Funds may enter into credit default","page_number":110,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"2fbcd2ad-9949-4ce4-b28e-f207a24d89fb","block_type":"box","text":"swaps that reference the obligations of a single","page_number":110,"box":{"x":515,"y":366,"width":338,"height":12}},{"id":"12fb63ac-61b3-43a7-91d8-0e58ae0f3e90","block_type":"box","text":"entity (“single-name CDS”) or the obli","page_number":110,"box":{"x":116,"y":382,"width":264,"height":12}},{"id":"2ac2af7b-646c-4914-b726-f920abbde300","block_type":"box","text":"gations of entities that make up an index (“index CDS”). References to","page_number":110,"box":{"x":381,"y":382,"width":504,"height":12}},{"id":"e2d307ef-00d9-4154-8d74-8d10d91db28f","block_type":"box","text":"“credit default swaps” shall collectively refer to single-name CDS and index CDS.","page_number":110,"box":{"x":116,"y":397,"width":579,"height":12}},{"id":"98fc2d37-2d02-4f1d-b265-0095f1b62db0","block_type":"box","text":"Credit default swaps have as reference obligations one or more securities or loans that are not","page_number":110,"box":{"x":117,"y":428,"width":706,"height":12}},{"id":"b6c5eaf3-a82f-49bf-929c-f6f530109b84","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":110,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"11756ee4-d290-4e06-ab8b-b5106f8324c5","block_type":"box","text":"are deliverable under a credit default swap, the Fund is exposed to the risk that deliverable securities","page_number":110,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"7aa4f113-254c-4f95-926f-b69732124239","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":110,"box":{"x":116,"y":475,"width":763,"height":12}},{"id":"20530e35-fffd-498c-b942-7d847f8776b0","block_type":"box","text":"in a so-called “short squeeze.” In certain instances of issuer defaults or restructurings, it has been","page_number":110,"box":{"x":117,"y":490,"width":729,"height":12}},{"id":"5502f1f3-755d-4989-a500-c6d125d1e847","block_type":"box","text":"unclear under the standard industry documentation for credit default swaps whether or not a “credit","page_number":110,"box":{"x":117,"y":506,"width":739,"height":12}},{"id":"b2353658-4518-40d8-94d5-e14f1e362c37","block_type":"box","text":"event” triggering the seller’s payment obligation had occurred. Certain initiatives adopted by derivatives","page_number":110,"box":{"x":116,"y":521,"width":771,"height":12}},{"id":"88570edf-96cf-4719-b6b6-6f19200c37af","block_type":"box","text":"market participants, including the International Swaps and Derivatives Association (“ISDA”), are","page_number":110,"box":{"x":117,"y":537,"width":713,"height":12}},{"id":"eec08ab4-7bca-4486-8cf6-f9f8e348f1d5","block_type":"box","text":"designed to implement uniform settlement terms into standard credit default swap documentation, as","page_number":110,"box":{"x":116,"y":552,"width":753,"height":12}},{"id":"5c134943-ce1a-4a02-8b92-e5ff38532bec","block_type":"box","text":"well as refine the practices for the transparent conduct of the credit default swap market generally.","page_number":110,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"35365816-3c69-475b-a33f-aa1d2fd1acf8","block_type":"box","text":"Among these initiatives are the ISDA Credit Derivatives Determination Committee and the","page_number":110,"box":{"x":116,"y":583,"width":672,"height":12}},{"id":"cabe77ef-bba9-4729-92a4-5ab96d8e809b","block_type":"box","text":"implementation of market-wide cash settlement protocols applicable to all market-standard credit","page_number":110,"box":{"x":117,"y":599,"width":722,"height":12}},{"id":"58c2309a-b220-4f2b-a888-9989f0bd9cc6","block_type":"box","text":"default swaps. These initiatives are intended to reduce both the uncertainty as to the occurrence of","page_number":110,"box":{"x":116,"y":614,"width":739,"height":12}},{"id":"a3161679-acf1-4557-9998-f623e6f89d99","block_type":"box","text":"credit events and the risk of a “short squeeze” by providing that the ISDA Credit Derivatives","page_number":110,"box":{"x":116,"y":630,"width":684,"height":12}},{"id":"d23bf3e7-e7ee-4d6a-b31d-101503f9bad0","block_type":"box","text":"Determinations Committee will make determinations as to whether a credit event has occurred,","page_number":110,"box":{"x":117,"y":645,"width":710,"height":11}},{"id":"88d6d731-17a1-4950-a2c5-ef2fd2054fb0","block_type":"box","text":"establish an auction to determine a settlement price and identify the deliverable securities for purposes","page_number":110,"box":{"x":116,"y":661,"width":763,"height":12}},{"id":"4afcffe9-d074-45d5-b306-d75bc2f2d85c","block_type":"box","text":"of the auction, although the ISDA Credit Derivatives Determinations Committee may in certain limited","page_number":110,"box":{"x":116,"y":676,"width":750,"height":12}},{"id":"d582c2d9-09a4-4d61-bd45-28443b1e170c","block_type":"box","text":"circumstances refrain from doing so. In the event the ISDA Credit Derivatives Determinations","page_number":110,"box":{"x":116,"y":692,"width":691,"height":12}},{"id":"abe90414-dbc7-4716-8351-023ffea24351","block_type":"box","text":"Committee cannot reach a timely resolution with respect to a “credit event” or otherwise does not","page_number":110,"box":{"x":117,"y":707,"width":718,"height":12}},{"id":"9af7238c-d51a-409f-8a28-f23538f33625","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":110,"box":{"x":116,"y":723,"width":713,"height":12}},{"id":"6c1380af-af14-4118-8a54-69642d0311a5","block_type":"box","text":"default swap upon a default by the reference entity. Furthermore, a Fund may enter into certain credit","page_number":110,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"6605b225-1f3c-4b24-8664-6729703e7cf3","block_type":"box","text":"default swaps or similar instruments that may not be covered by these initiatives.","page_number":110,"box":{"x":116,"y":754,"width":598,"height":12}},{"id":"3bf3ad60-1f00-42fe-a4af-923020fb4b79","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":110,"box":{"x":117,"y":785,"width":723,"height":12}},{"id":"5c7f80b2-aacb-43e4-af9b-1f92e6681ee2","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":110,"box":{"x":117,"y":800,"width":752,"height":12}},{"id":"c4b89db6-9c7a-4143-965f-781239d110c8","block_type":"box","text":"of any deliverable obligation received by the Fund or the amount of cash settlement received by the","page_number":110,"box":{"x":116,"y":816,"width":738,"height":12}},{"id":"a60e6cc6-9555-4f9f-8bdd-504e50a3fbb3","block_type":"box","text":"Fund pursuant to the relevant cash settlement auction, together with the up-front or periodic payments","page_number":110,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"7fd5fea8-ca94-4dbb-a4e1-3fe9293addd1","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":110,"box":{"x":117,"y":847,"width":770,"height":12}},{"id":"e9b51e81-7349-47a3-9f3f-61e2248a1e74","block_type":"box","text":"Fund. A Fund that sells credit default swaps incurs leveraged exposure to the credit of one or more","page_number":110,"box":{"x":117,"y":862,"width":739,"height":12}},{"id":"054888f0-efc5-4921-9bb3-411b4818cf0f","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":110,"box":{"x":117,"y":878,"width":703,"height":12}},{"id":"5eef2d0d-c6ab-4769-b0f5-f55947546e49","block_type":"box","text":"II-23","page_number":110,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"89d0cda7-81ef-4238-94ba-17b18208e1be","block_type":"box","text":"NM1026U-6030748-110/260","page_number":110,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0b9ff00a-d5c2-4f24-8e7d-d8d54a36a981","block_type":"box","text":"securities issued by the relevant reference entity. However, a Fund will not have any legal recourse","page_number":111,"box":{"x":116,"y":87,"width":742,"height":12}},{"id":"3350af5f-4add-4585-91dd-aed8f31a4ad9","block_type":"box","text":"against any reference entity and will not benefit from any collateral securing the reference entity’s debt","page_number":111,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"46e5ee46-30a5-4a42-b9ea-7a0fb4dd6e40","block_type":"box","text":"obligations. In the event the ISDA Credit Derivatives Determinations Committee does not establish a","page_number":111,"box":{"x":116,"y":118,"width":750,"height":12}},{"id":"92730d6b-6c94-44e6-b7b0-2ce1ce172d3b","block_type":"box","text":"cash settlement auction and identify the relevant deliverable securities or loans, the credit default swap","page_number":111,"box":{"x":116,"y":134,"width":769,"height":12}},{"id":"46880e6b-3921-4367-b7c3-710ae4360b56","block_type":"box","text":"buyer will have broad discretion to select which of the reference entity’s debt obligations to deliver to","page_number":111,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"2210e603-754f-4d81-b316-17bd9bfed557","block_type":"box","text":"the Fund following a credit event and will likely choose the obligations with the lowest market value in","page_number":111,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"0507e13b-1e32-4a27-b2c8-22551fc7cae8","block_type":"box","text":"order to maximize the payment obligations of the Fund. In addition, credit default swaps generally trade","page_number":111,"box":{"x":116,"y":180,"width":772,"height":12}},{"id":"8740bcf4-7cbd-4cc3-bc41-fdee4cf266b1","block_type":"box","text":"on the basis of theoretical pricing and valuation models, which may not accurately value such swap","page_number":111,"box":{"x":116,"y":196,"width":742,"height":12}},{"id":"09a07840-5cbe-4b89-8591-2224764fbe55","block_type":"box","text":"positions when established or when subsequently traded or unwound under actual market conditions.","page_number":111,"box":{"x":117,"y":211,"width":756,"height":12}},{"id":"248d9901-6be1-4f11-93d5-abbc0e8e01b4","block_type":"box","text":"Dodd-Frank requires that certain index CDS be executed in regulated markets and submitted for","page_number":111,"box":{"x":117,"y":242,"width":719,"height":12}},{"id":"411c1283-4daa-43a8-8a2f-5f3ae2e3847d","block_type":"box","text":"clearing to regulated clearinghouses. See “— Derivatives — Regulation of Derivatives — Dodd-Frank","page_number":111,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"4bdc3856-b712-4ab2-b437-dcc7bf9b2528","block_type":"box","text":"Regulations” above. Other single-name CDS and index CDS are permitted, although not required, to","page_number":111,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"7a87cdce-ac14-431e-8fe8-2f2be61fab65","block_type":"box","text":"be cleared through regulated clearinghouses. The Funds clear all credit default swaps that are subject","page_number":111,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"7b3e867f-e1dc-4924-b829-84f4ad6ac20c","block_type":"box","text":"to mandatory clearing and may voluntarily clear some, but not all, of the other credit default swaps not","page_number":111,"box":{"x":116,"y":304,"width":762,"height":12}},{"id":"97a430e7-ad0d-4c77-8231-fc229f451967","block_type":"box","text":"subject to mandatory clearing. The Funds face counterparty risk with respect to the clearinghouse","page_number":111,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"cd4c9cc1-3cc9-40c2-8b44-e471b5a4c059","block_type":"box","text":"when entering into cleared single-name CDS and cleared index CDS. The Funds face significant","page_number":111,"box":{"x":116,"y":335,"width":722,"height":12}},{"id":"cad141cd-a66f-4c5f-92b3-529695ab7b44","block_type":"box","text":"counterparty risk with respect to their counterparties to non-cleared credit default swaps and similar","page_number":111,"box":{"x":116,"y":351,"width":743,"height":12}},{"id":"c088d7ca-ce5f-4dc7-98f5-a12673e844c6","block_type":"box","text":"instruments. A Fund typically will enter into non-cleared credit default swaps and similar instruments","page_number":111,"box":{"x":117,"y":366,"width":746,"height":12}},{"id":"68de0a28-eca2-4481-87cd-4c36a99bb8b3","block_type":"box","text":"with swap dealers and creditworthy entities that have substantial capital or that have provided the Fund","page_number":111,"box":{"x":116,"y":382,"width":771,"height":12}},{"id":"f02ede68-4c82-4816-8825-29b851681a30","block_type":"box","text":"with a third-party guaranty or other credit support.","page_number":111,"box":{"x":116,"y":397,"width":373,"height":12}},{"id":"965379d2-ae03-4fab-b0a7-0129859f0ec8","block_type":"box","text":"In certain instances, a Fund may enter into bespoke credit default swaps or similar instruments either","page_number":111,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"6e7d339c-029a-4a8c-9329-a7903936d936","block_type":"box","text":"as protection buyer or protection seller. While these contracts are similar in their operation to the","page_number":111,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"5bbe1eb4-ce1a-45e1-a4c9-895fdcd9b5c6","block_type":"box","text":"market-standard credit default swaps described above, they are less standardized and instead have","page_number":111,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"430a6927-3e01-454e-89fd-c495b0e6bd70","block_type":"box","text":"bespoke or tailored features. For example, as compared to market-standard credit defaults, the range","page_number":111,"box":{"x":117,"y":475,"width":758,"height":12}},{"id":"fa222cc6-2d9a-4903-a210-635d54161041","block_type":"box","text":"of “credit events” triggering settlement of such bespoke contracts may be narrower or broader, any","page_number":111,"box":{"x":116,"y":490,"width":737,"height":12}},{"id":"0fc7f8ea-6922-49dc-90cf-e04f1fdf0fd5","block_type":"box","text":"such triggered contracts are settled by physical delivery of the underlying security or loan to or by the","page_number":111,"box":{"x":116,"y":506,"width":755,"height":12}},{"id":"57a8a08e-30be-436d-bc7d-5a5d2dcb79b4","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":111,"box":{"x":117,"y":521,"width":719,"height":12}},{"id":"b54e6a71-d903-4517-8dd4-0653f1918732","block_type":"box","text":"reference obligations and/or deliverable obligations.","page_number":111,"box":{"x":117,"y":537,"width":388,"height":12}},{"id":"88084742-81be-4866-9c2a-85715cb951cc","block_type":"box","text":"In addition, credit default swaps and similar instruments generally involve greater risks than if a Fund","page_number":111,"box":{"x":117,"y":568,"width":752,"height":12}},{"id":"a4b2be99-0576-4c48-82cb-9b827afcb66d","block_type":"box","text":"had invested in the reference obligation directly and are subject to significant credit risk, correlation","page_number":111,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"f859fdcc-8c94-47d9-96dc-56df374dc4ff","block_type":"box","text":"risk, leverage risk, illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":111,"box":{"x":117,"y":599,"width":689,"height":12}},{"id":"a8b7b43c-6aa7-4a77-ab5c-38ca14ce0883","block_type":"box","text":"Interest Rate Swaps, Floors and Caps.","page_number":111,"box":{"x":117,"y":630,"width":292,"height":12}},{"id":"012544b2-7614-4dcb-bf74-f422b0e55cb3","block_type":"box","text":"Certain Funds may enter into OTC derivatives in the form of","page_number":111,"box":{"x":410,"y":630,"width":450,"height":12}},{"id":"5596e5ca-a89b-4672-b765-3034441ff46d","block_type":"box","text":"interest rate swaps and interest rate caps and floors. As described in further detail below, a Fund may","page_number":111,"box":{"x":117,"y":645,"width":760,"height":12}},{"id":"0cf733dc-b480-44a6-a102-6a11d0aa47cc","block_type":"box","text":"enter into these transactions primarily to preserve a return or spread on a particular investment or","page_number":111,"box":{"x":116,"y":661,"width":724,"height":12}},{"id":"28b6d79e-d6d8-4845-a491-c8d98614c180","block_type":"box","text":"portion of its holdings, as a duration management technique, to protect against an increase in the price","page_number":111,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"afbb7f7c-5f7b-4a5c-82f7-c218c3fffd74","block_type":"box","text":"of securities a Fund anticipates purchasing at a later date, or for speculation to increase returns.","page_number":111,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"4e353b68-e8d2-4072-b85f-454869d8522e","block_type":"box","text":"Dodd-Frank requires that certain interest rate swaps be executed in regulated markets and submitted","page_number":111,"box":{"x":117,"y":723,"width":750,"height":12}},{"id":"a2d39deb-fd36-48fa-9961-c307ce0f39d1","block_type":"box","text":"for clearing to regulated clearinghouses. See “— Regulation of Derivatives — Dodd-Frank Regulations”","page_number":111,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"5d517431-1dc9-4bec-a16b-62b6603b89af","block_type":"box","text":"above. Other interest rate swaps are permitted, although not required, to be cleared. Most of the","page_number":111,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"6ca555f3-a983-4dad-a7b2-1b779ea3c944","block_type":"box","text":"interest rate swaps entered into by the Funds are cleared. The Funds face counterparty risk with","page_number":111,"box":{"x":117,"y":769,"width":714,"height":12}},{"id":"e8400443-8da6-4c73-8eff-c3dda0df067c","block_type":"box","text":"respect to the clearinghouse when entering into cleared interest rate swaps.","page_number":111,"box":{"x":117,"y":785,"width":561,"height":12}},{"id":"fd0cdb3b-d5b0-464d-983a-00645e165115","block_type":"box","text":"The Funds face significant counterparty risk with respect to their counterparties to non-cleared interest","page_number":111,"box":{"x":116,"y":816,"width":759,"height":12}},{"id":"d1155201-5ac8-4318-a982-a9dfba0b4fae","block_type":"box","text":"rate swaps and interest rate caps and floors. The typical counterparties for a Fund’s non-cleared","page_number":111,"box":{"x":117,"y":831,"width":719,"height":12}},{"id":"f3040464-01de-48b3-9e4e-0ee8a11d0d02","block_type":"box","text":"interest rate derivatives transactions are swap dealers and other creditworthy entities that have","page_number":111,"box":{"x":117,"y":847,"width":709,"height":12}},{"id":"bba6f2c6-fce3-439c-a824-3c945c3df333","block_type":"box","text":"substantial capital or that have provided the Fund with a third-party guaranty or other credit support. If","page_number":111,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"0f547bc7-da97-4cb4-92f7-7368bbd8ff7b","block_type":"box","text":"the Fund’s counterparty defaults on such a transaction, a Fund will have contractual remedies with","page_number":111,"box":{"x":116,"y":878,"width":736,"height":12}},{"id":"7b6e5d84-c942-43c7-ab7e-af871d95977d","block_type":"box","text":"II-24","page_number":111,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1351f4d9-bd23-4d81-b29a-0cf2404b502a","block_type":"box","text":"NM1026U-6030748-111/260","page_number":111,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8711f21c-532c-495e-a0ac-0d78e8ff849c","block_type":"box","text":"respect to the transaction, but there can be no guarantee that the Fund will be successful in enforcing","page_number":112,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"b2bf7fa8-0d56-4fd6-be68-daf5d6a37142","block_type":"box","text":"such remedies. The market for interest rate swaps is relatively liquid in comparison with other similar","page_number":112,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"91bf0d04-a40a-468a-8817-994421ef74bb","block_type":"box","text":"instruments traded in the interbank market. A Fund may be limited in its ability to enter into certain","page_number":112,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"5c9b952a-ffad-45f8-94ba-22805e070678","block_type":"box","text":"interest rate derivatives due to applicable income tax requirements.","page_number":112,"box":{"x":117,"y":134,"width":503,"height":11}},{"id":"0d8ec9b0-0769-4683-b0f2-12fd0d1e9c64","block_type":"box","text":"Interest rate swaps are transactions in which each party makes periodic interest payments based on a","page_number":112,"box":{"x":117,"y":163,"width":762,"height":12}},{"id":"6b035dd8-9c60-42df-8b01-e3ffdd8ff37d","block_type":"box","text":"fixed or variable interest rate, index or asset in return for periodic payments from its counterparty based","page_number":112,"box":{"x":116,"y":178,"width":772,"height":12}},{"id":"5b3814bc-a406-4fbd-96fe-70116b4cb2dd","block_type":"box","text":"on a different fixed or variable interest rate, index or asset.","page_number":112,"box":{"x":116,"y":194,"width":439,"height":11}},{"id":"7256b177-ae81-4fb6-bdb6-7314addcf749","block_type":"box","text":"The purchase of an interest rate floor entitles the purchaser, to the extent that a specified index falls","page_number":112,"box":{"x":116,"y":223,"width":746,"height":12}},{"id":"ece373fe-3739-4971-b9f1-8458a8cd5db4","block_type":"box","text":"below a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":112,"box":{"x":117,"y":239,"width":736,"height":12}},{"id":"e18208d2-4d69-47b7-bb55-5141e6d64ed7","block_type":"box","text":"from the party selling such interest rate floor.","page_number":112,"box":{"x":116,"y":254,"width":337,"height":12}},{"id":"461c36f3-819e-466c-8360-c0fd607deecf","block_type":"box","text":"The purchase of an interest rate cap entitles the purchaser, to the extent that a specified index rises","page_number":112,"box":{"x":116,"y":283,"width":746,"height":12}},{"id":"48c6c058-eb60-45bf-95da-d270e1ab9107","block_type":"box","text":"above a predetermined interest rate, to receive payments of interest on a notional principal amount","page_number":112,"box":{"x":116,"y":299,"width":739,"height":12}},{"id":"b4d28f27-83e8-438a-82b8-a42a48ba8bd0","block_type":"box","text":"from the party selling such interest rate cap.","page_number":112,"box":{"x":116,"y":314,"width":331,"height":12}},{"id":"5e3218ff-2078-4f81-b99b-7a3b60b9e56c","block_type":"box","text":"A Fund may enter into an interest rate swap to effectively exchange with another party their respective","page_number":112,"box":{"x":116,"y":344,"width":764,"height":12}},{"id":"a81872ad-299d-4b16-a3d9-78add7a3511d","block_type":"box","text":"commitments to pay or receive interest,","page_number":112,"box":{"x":116,"y":359,"width":298,"height":12}},{"id":"d1c6bee3-0c18-491d-af97-4f2d3dc55dba","block_type":"box","text":"e.g.","page_number":112,"box":{"x":415,"y":362,"width":26,"height":9}},{"id":"38f388c4-ff0b-42b2-a9fd-233bcd92da98","block_type":"box","text":", an exchange of fixed rate payments for floating rate","page_number":112,"box":{"x":444,"y":359,"width":396,"height":12}},{"id":"24b81828-3465-4368-bb0a-08662cd409cf","block_type":"box","text":"payments. For example, if a Fund holds a mortgage-backed security with an interest rate that is reset","page_number":112,"box":{"x":117,"y":375,"width":755,"height":12}},{"id":"f1ea4e73-76a7-4cc2-9c86-f6239f3aaa4d","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":112,"box":{"x":116,"y":390,"width":748,"height":12}},{"id":"0cf3e199-f3e4-44fb-aae8-95f1953ee9aa","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":112,"box":{"x":117,"y":406,"width":755,"height":12}},{"id":"de90d8e7-d93b-473f-b451-774607707e2d","block_type":"box","text":"the mortgage-backed security due to rising interest rates but would also limit its ability to benefit from","page_number":112,"box":{"x":116,"y":421,"width":753,"height":12}},{"id":"430a4dcb-eceb-4a70-88da-63427c560ac0","block_type":"box","text":"falling interest rates. Conversely, if a Fund holds a mortgage-backed security with an interest rate that","page_number":112,"box":{"x":116,"y":437,"width":761,"height":12}},{"id":"0a95b610-eb9f-422b-afdc-e18f3f54d47f","block_type":"box","text":"is reset every week and it would like to lock in what","page_number":112,"box":{"x":117,"y":452,"width":383,"height":12}},{"id":"6665d509-2d16-4443-8520-865531ab0e46","block_type":"box","text":"it believes to be a high interest rate for one year, it","page_number":112,"box":{"x":501,"y":452,"width":377,"height":12}},{"id":"14b53adb-d42d-4487-90fc-7fdd8b4d28e3","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":112,"box":{"x":117,"y":468,"width":746,"height":12}},{"id":"31199bbc-e2f7-444a-981b-173187578c15","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":112,"box":{"x":117,"y":483,"width":733,"height":12}},{"id":"ad3ded0a-ec69-40c9-808b-8388a2d2772d","block_type":"box","text":"falling interest rates and may permit the Fund to enhance its income through the positive differential","page_number":112,"box":{"x":116,"y":499,"width":745,"height":12}},{"id":"6090d245-c1cc-4683-96a1-2e71b20ac305","block_type":"box","text":"between one week and one year interest rates, but would preclude it from taking full advantage of","page_number":112,"box":{"x":117,"y":514,"width":729,"height":12}},{"id":"4d861d29-a73d-4aa6-bde5-564e7938fdb8","block_type":"box","text":"rising interest rates.","page_number":112,"box":{"x":117,"y":530,"width":150,"height":12}},{"id":"9cfe2cb9-10d5-417b-b069-5e8a272ed510","block_type":"box","text":"Gains from transactions in interest rate swaps distributed to shareholders will be taxable as ordinary","page_number":112,"box":{"x":117,"y":559,"width":746,"height":12}},{"id":"79000a0e-727f-4444-ba7e-dbde2fdea521","block_type":"box","text":"income or, in certain circumstances, as long term capital gains to shareholders.","page_number":112,"box":{"x":117,"y":575,"width":593,"height":12}},{"id":"ad8af061-c742-4d3c-b5ad-fc7bad8d5616","block_type":"box","text":"Interest rate swaps and interest rate caps and floors may be subject to correlation risk, leverage risk,","page_number":112,"box":{"x":117,"y":604,"width":751,"height":12}},{"id":"0c578f9b-0e5b-4b96-8a83-76ac35262ff8","block_type":"box","text":"illiquidity risk and market risk. See “— Risk Factors in Derivatives” above.","page_number":112,"box":{"x":117,"y":619,"width":549,"height":12}},{"id":"aecab2a0-c751-410a-9a42-1b3ae565e82d","block_type":"box","text":"Total Return Swaps.","page_number":112,"box":{"x":118,"y":648,"width":155,"height":12}},{"id":"3638b7c4-7024-4c98-a03c-be670f0e2066","block_type":"box","text":"Total return swaps are contracts in which one party agrees to make periodic","page_number":112,"box":{"x":273,"y":649,"width":570,"height":12}},{"id":"c311b8d9-29cc-45db-a7ab-6bd6250dda07","block_type":"box","text":"payments to the other party based on the return of the assets underlying the contract in exchange for","page_number":112,"box":{"x":117,"y":664,"width":750,"height":12}},{"id":"7ce11545-679a-40d1-9aa3-f9d3fcf9c726","block_type":"box","text":"periodic payments based on a fixed or variable interest rate or the total return from different underlying","page_number":112,"box":{"x":117,"y":679,"width":759,"height":13}},{"id":"f26eadc5-9cf4-4bf4-aa15-d8efbafa311f","block_type":"box","text":"assets. The return of the assets underlying the contract includes both the income generated by the","page_number":112,"box":{"x":116,"y":695,"width":732,"height":12}},{"id":"e814fde0-eb0d-48c2-834d-c38c2ca8f6f4","block_type":"box","text":"asset and the change in market value of the asset. The asset underlying the contract may include a","page_number":112,"box":{"x":116,"y":710,"width":737,"height":13}},{"id":"2288385d-787b-47f1-b088-bfa78819f6ee","block_type":"box","text":"specified security, basket of securities or securities indices. Total return swaps on a specified security,","page_number":112,"box":{"x":116,"y":726,"width":757,"height":12}},{"id":"30820db2-7f57-4aee-96ae-f1bfcfdb95d0","block_type":"box","text":"basket of securities or securities indices may sometimes be referred to as “contracts for difference.”","page_number":112,"box":{"x":117,"y":741,"width":738,"height":13}},{"id":"ebce7067-7db5-4701-89eb-4dcc22b62831","block_type":"box","text":"Total return swaps may be used to obtain exposure to a security or market without owning or taking","page_number":112,"box":{"x":116,"y":771,"width":738,"height":12}},{"id":"4a040f8a-4bc8-4679-bb8a-384d063f5c68","block_type":"box","text":"physical custody of such security or investing directly in such market. Upon entering into a total return","page_number":112,"box":{"x":117,"y":786,"width":752,"height":12}},{"id":"6237892c-9dde-4060-a421-5fa5e69e6134","block_type":"box","text":"swap, a Fund is required to deposit initial margin but the parties do not exchange the notional amount.","page_number":112,"box":{"x":116,"y":802,"width":757,"height":12}},{"id":"fda6c240-d910-440a-9dc3-27af14e81ddc","block_type":"box","text":"As a result, total return swaps may effectively add leverage to the Fund’s portfolio because the Fund","page_number":112,"box":{"x":116,"y":817,"width":744,"height":12}},{"id":"adc8fdd3-6929-4797-b99e-9c607ae5107e","block_type":"box","text":"would be subject to investment exposure on the notional amount of the swap.","page_number":112,"box":{"x":116,"y":833,"width":580,"height":12}},{"id":"bcfab75b-67de-4728-99e7-9ec35048eb1c","block_type":"box","text":"Total return swaps are subject to significant correlation risk, leverage risk, illiquidity risk, market risk","page_number":112,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"247976fe-e729-4db7-b6a3-1889420b70bd","block_type":"box","text":"and counterparty risk. See “— Risk Factors in Derivatives” above.","page_number":112,"box":{"x":116,"y":877,"width":493,"height":13}},{"id":"df602afd-4d46-4bde-a3e6-c3d1ae8e6cfc","block_type":"box","text":"II-25","page_number":112,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"feee9350-e3d1-4134-90dc-f5f7df6c02cc","block_type":"box","text":"NM1026U-6030748-112/260","page_number":112,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"94a55649-b0d5-4884-bb4d-7b1fca06f29d","block_type":"box","text":"Options.","page_number":113,"box":{"x":117,"y":87,"width":66,"height":12}},{"id":"59473938-693c-49b7-81d4-b75206f26ddb","block_type":"box","text":"Options on Securities and Securities Indices.","page_number":113,"box":{"x":117,"y":110,"width":337,"height":12}},{"id":"cd96cae6-11b2-4b86-ac8b-5297023e3cc2","block_type":"box","text":"A Fund may engage in transactions in options on","page_number":113,"box":{"x":454,"y":110,"width":370,"height":12}},{"id":"2115090c-03d1-4f36-aaa1-53b2c789cc34","block_type":"box","text":"individual securities, baskets of securities or securities indices, or particular measurements of value or","page_number":113,"box":{"x":117,"y":126,"width":761,"height":12}},{"id":"ff7a4bff-d91d-4354-8637-34aa02c15268","block_type":"box","text":"rates, such as an index of the price of treasury securities or an index representative of short-term","page_number":113,"box":{"x":117,"y":141,"width":724,"height":12}},{"id":"96e928af-1156-47d8-829b-c831f843f593","block_type":"box","text":"interest rates. Such investments may be made on exchanges and in the OTC markets. In general,","page_number":113,"box":{"x":117,"y":157,"width":732,"height":12}},{"id":"7d698e39-9d09-405b-b6c7-47593551b36a","block_type":"box","text":"exchange-traded options have standardized exercise prices and expiration dates and require the","page_number":113,"box":{"x":116,"y":172,"width":723,"height":12}},{"id":"91fb6378-1591-4fd0-ac1b-a3ca43bff9e8","block_type":"box","text":"parties to post margin against their obligations, and the performance of the parties’ obligations in","page_number":113,"box":{"x":117,"y":188,"width":720,"height":12}},{"id":"13f27aac-bf88-4d8c-8688-8963faabb251","block_type":"box","text":"connection with such options is guaranteed by the exchange or a related clearing corporation. OTC","page_number":113,"box":{"x":116,"y":203,"width":742,"height":12}},{"id":"f785e9eb-a56b-4013-ab33-c6fb3242b875","block_type":"box","text":"options have more flexible terms negotiated between the buyer and the seller, but are subject to","page_number":113,"box":{"x":116,"y":219,"width":717,"height":12}},{"id":"56baf6c6-3f24-4997-ae5a-ded6cee59708","block_type":"box","text":"greater credit risk. OTC options also involve greater illiquidity risk.","page_number":113,"box":{"x":116,"y":234,"width":493,"height":12}},{"id":"beb1478d-95cd-4caa-8439-3cd1b1ce95c2","block_type":"box","text":"A Fund may also engage in transactions in options which have additional features that result in","page_number":113,"box":{"x":116,"y":265,"width":709,"height":12}},{"id":"fada80e2-4349-4d09-a040-27b265150643","block_type":"box","text":"different payment structures and/or expirations (commonly referred to as exotic options). For example,","page_number":113,"box":{"x":116,"y":281,"width":765,"height":12}},{"id":"4a40fc5a-088f-4acd-aa00-ab0c89436a61","block_type":"box","text":"barrier options are exotic options that can only be exercised (or automatically expire) if the price of the","page_number":113,"box":{"x":117,"y":296,"width":761,"height":12}},{"id":"c3303055-85cc-4989-9d76-556fda82d70a","block_type":"box","text":"underlying asset reaches one or more predetermined levels on or before expiration. Binary options are","page_number":113,"box":{"x":117,"y":312,"width":765,"height":12}},{"id":"9add9447-769c-49f7-aa5d-3df6877dc4f4","block_type":"box","text":"another example of exotic options which have a fixed all-or-nothing payout if one or more","page_number":113,"box":{"x":116,"y":327,"width":666,"height":12}},{"id":"59e15798-8324-4fb7-823a-3bcadb69aaab","block_type":"box","text":"predetermined conditions are met. Exotic options are typically traded in OTC markets.","page_number":113,"box":{"x":117,"y":343,"width":641,"height":12}},{"id":"489b263d-caf1-4f47-97fb-346d34c83166","block_type":"box","text":"There are several risks associated with transactions in options on securities and indexes. For example,","page_number":113,"box":{"x":116,"y":374,"width":770,"height":12}},{"id":"83742820-a480-4e41-8523-e477572f180b","block_type":"box","text":"there are significant differences between the securities and options markets that could result in an","page_number":113,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"18db792e-1aa8-479f-b0bd-e86c37e88a0c","block_type":"box","text":"imperfect correlation between these markets, causing a given transaction not to achieve its objectives.","page_number":113,"box":{"x":117,"y":405,"width":763,"height":12}},{"id":"ea037ba8-f8c3-4105-ad25-af9dd9b48302","block_type":"box","text":"In addition, a liquid market for particular options, whether traded OTC or on a national securities","page_number":113,"box":{"x":117,"y":420,"width":716,"height":12}},{"id":"21eecb05-c695-423e-9be3-2aacd4d45d31","block_type":"box","text":"exchange (“Exchange”) may be absent for reasons which include the following: there may be","page_number":113,"box":{"x":116,"y":436,"width":695,"height":12}},{"id":"ff4e1219-69e2-4607-a934-8dabd92b0c2d","block_type":"box","text":"insufficient trading interest in certain options; restrictions may be imposed by an Exchange on opening","page_number":113,"box":{"x":117,"y":451,"width":763,"height":12}},{"id":"85f81cb0-a467-439a-a489-461ec2571064","block_type":"box","text":"transactions or closing transactions or both; trading halts, suspensions or other restrictions may be","page_number":113,"box":{"x":116,"y":467,"width":737,"height":12}},{"id":"f18641a3-4ecb-4c2d-a88d-bea78d6c64cc","block_type":"box","text":"imposed with respect to particular classes or series of options or underlying securities; unusual or","page_number":113,"box":{"x":117,"y":482,"width":727,"height":12}},{"id":"755725bd-f804-4f31-b850-6ba5cbb5b8fb","block_type":"box","text":"unforeseen circumstances may interrupt normal operations on an Exchange; the facilities of an","page_number":113,"box":{"x":117,"y":498,"width":708,"height":12}},{"id":"009b6c62-0223-49a2-8f73-83403ca2c26f","block_type":"box","text":"Exchange or the Options Clearing Corporation may not at all times be adequate to handle current","page_number":113,"box":{"x":117,"y":513,"width":728,"height":12}},{"id":"bb9766b9-419e-4de1-9e55-cee8f5ac58db","block_type":"box","text":"trading volume; or one or more Exchanges could, for economic or other reasons, decide or be","page_number":113,"box":{"x":116,"y":529,"width":703,"height":12}},{"id":"2fbaf03a-8fd3-45dc-a9e0-b032a16c25d4","block_type":"box","text":"compelled at some future date to discontinue the trading of options (or a particular class or series of","page_number":113,"box":{"x":116,"y":544,"width":746,"height":12}},{"id":"51fbd5bd-ba22-4081-9ac9-02e1b6a551a4","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":113,"box":{"x":116,"y":560,"width":770,"height":12}},{"id":"045e2817-3044-464a-bad9-b44bb2e406b7","block_type":"box","text":"to exist, although outstanding options that had been issued by the Options Clearing Corporation as a","page_number":113,"box":{"x":116,"y":575,"width":753,"height":12}},{"id":"05ea0696-1421-40e3-93a6-457a7234eac6","block_type":"box","text":"result of trades on that Exchange would continue to be exercisable in accordance with their terms.","page_number":113,"box":{"x":117,"y":591,"width":732,"height":12}},{"id":"1170f438-e007-4bd8-b725-24cde5f6f50f","block_type":"box","text":"Each of the options exchanges has established limitations governing the maximum number of call or","page_number":113,"box":{"x":117,"y":622,"width":749,"height":12}},{"id":"944575fd-eab8-498a-8371-5c4a9719e853","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":113,"box":{"x":117,"y":638,"width":764,"height":11}},{"id":"bafe8b41-2bc0-487a-9e78-bc6295630e86","block_type":"box","text":"or in concert with others (regardless of whether such options are written on the same or different","page_number":113,"box":{"x":116,"y":653,"width":720,"height":12}},{"id":"03b13bf2-02c4-4032-9bef-102ac62a9861","block_type":"box","text":"exchanges or are held or written on one or more accounts or through one or more brokers). Under","page_number":113,"box":{"x":116,"y":668,"width":730,"height":12}},{"id":"e06a5029-be47-4c8b-bdbf-e1fcbe0ecf1e","block_type":"box","text":"these limitations, option positions of all investment companies advised by the Manager are combined","page_number":113,"box":{"x":116,"y":684,"width":749,"height":12}},{"id":"a33bad90-88bd-4fb8-98ac-82fb0f510040","block_type":"box","text":"for purposes of these limits. Pursuant to these limitations, an exchange may order the liquidation of","page_number":113,"box":{"x":116,"y":699,"width":736,"height":13}},{"id":"de8b0802-39eb-4813-ad4e-74f623a1c252","block_type":"box","text":"positions and may impose other sanctions or restrictions. These position limits may restrict the number","page_number":113,"box":{"x":117,"y":715,"width":762,"height":12}},{"id":"c92bdea5-d379-4b59-8428-7cdb3dc27275","block_type":"box","text":"of listed options that a Fund may buy or sell.","page_number":113,"box":{"x":116,"y":730,"width":328,"height":13}},{"id":"436fe85c-45eb-44c8-adf7-13682dcf984f","block_type":"box","text":"Call Options.","page_number":113,"box":{"x":117,"y":761,"width":93,"height":12}},{"id":"5568a8f7-5b82-4020-9081-2844bf61e241","block_type":"box","text":"A Fund may purchase call options on any of the types of securities or instruments in","page_number":113,"box":{"x":217,"y":761,"width":623,"height":13}},{"id":"57416da3-4e4d-43d3-985a-e631c8027810","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":113,"box":{"x":116,"y":777,"width":743,"height":12}},{"id":"0968ddbe-d608-4a0e-9740-563a0c5f7da7","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":113,"box":{"x":116,"y":793,"width":762,"height":12}},{"id":"3dc4e85f-2c25-47fb-930b-468b22a5c3e9","block_type":"box","text":"purchase and sell call options on indices. Index options are similar to options on securities except that,","page_number":113,"box":{"x":117,"y":808,"width":759,"height":12}},{"id":"bf0c481a-8ace-4c17-a4c9-58864b137129","block_type":"box","text":"rather than taking or making delivery of securities underlying the option at a specified price upon","page_number":113,"box":{"x":117,"y":823,"width":712,"height":13}},{"id":"4c724793-1b7d-4adc-9ffa-7be75d111944","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":113,"box":{"x":116,"y":839,"width":745,"height":12}},{"id":"20aed398-9386-4809-b0fb-3b14bf4c8e40","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":113,"box":{"x":117,"y":854,"width":716,"height":13}},{"id":"a156ad77-06db-402f-9fc3-bab75fdaa21d","block_type":"box","text":"II-26","page_number":113,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0ae2883b-6af5-4070-9e7a-2d35567bfc49","block_type":"box","text":"NM1026U-6030748-113/260","page_number":113,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"65bad6c3-f50a-4294-80b1-cc16335c6ec5","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":114,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"155a6b68-a5c7-4149-a3ec-3424ec5d35d8","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":114,"box":{"x":116,"y":102,"width":765,"height":13}},{"id":"ac9fbb88-b682-43da-8c18-ccb5d3d2cb51","block_type":"box","text":"or (ii) greater than the exercise price of the call written provided the difference is maintained by the","page_number":114,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"b3c1cc5b-aa45-4d8e-b91a-2445e598ccbc","block_type":"box","text":"Fund in assets which are not considered illiquid investments under the Funds’ Liquidity Program (as","page_number":114,"box":{"x":117,"y":134,"width":745,"height":12}},{"id":"d11793ff-485a-46df-b948-9b0cb9281e09","block_type":"box","text":"defined below) (“liquid assets”) designated on the Manager’s or the sub-adviser’s books and records to","page_number":114,"box":{"x":116,"y":149,"width":769,"height":12}},{"id":"01e79eea-814e-4ba8-b049-7fd8d304f102","block_type":"box","text":"the extent required by Commission guidelines.","page_number":114,"box":{"x":116,"y":165,"width":350,"height":12}},{"id":"0113e496-97c1-456e-b378-470d2e0aa754","block_type":"box","text":"A Fund may write (","page_number":114,"box":{"x":116,"y":196,"width":140,"height":12}},{"id":"8ed99fe6-ce4a-4b6c-aeff-502081b1842e","block_type":"box","text":"i.e.","page_number":114,"box":{"x":257,"y":196,"width":21,"height":9}},{"id":"3c53ec00-43da-4257-98c2-7dee44e9b14f","block_type":"box","text":", sell) covered call options on the securities or instruments in which it may invest","page_number":114,"box":{"x":281,"y":196,"width":599,"height":12}},{"id":"f3b27a89-fb7c-497b-b7db-51c63a902099","block_type":"box","text":"and to enter into closing purchase transactions with respect to certain of such options. A covered call","page_number":114,"box":{"x":116,"y":211,"width":754,"height":12}},{"id":"eb70fee7-a53a-40a9-8b01-73bacde70510","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":114,"box":{"x":116,"y":227,"width":769,"height":12}},{"id":"e3cf120c-1d9e-448f-a940-652eea736e17","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":114,"box":{"x":116,"y":242,"width":747,"height":12}},{"id":"d3ab212d-9d9e-4bf9-8757-e925aeec37ef","block_type":"box","text":"principal reason for writing call options is the attempt to realize, through the receipt of premiums, a","page_number":114,"box":{"x":117,"y":258,"width":733,"height":12}},{"id":"2fb9824f-ac39-45cd-a64f-8fe60586617b","block_type":"box","text":"greater return than would be realized on the securities alone. By writing covered call options, a Fund","page_number":114,"box":{"x":116,"y":273,"width":750,"height":12}},{"id":"5a25e79a-abff-46b7-b7fe-30936d113fb6","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":114,"box":{"x":116,"y":289,"width":763,"height":12}},{"id":"e53b840a-7b78-4f31-aed7-846251510d7c","block_type":"box","text":"security above the option exercise price. In addition, a Fund’s ability to sell the underlying security will","page_number":114,"box":{"x":116,"y":304,"width":758,"height":12}},{"id":"a062b2a6-56b0-4b8a-8ecd-01e30ce0b1a8","block_type":"box","text":"be limited while the option is in effect unless the Fund enters into a closing purchase transaction. A","page_number":114,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"c6a66327-21a8-48e7-878d-387ef5c06437","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":114,"box":{"x":116,"y":335,"width":748,"height":12}},{"id":"eb586931-f5ad-436a-a553-ec8a29bc9609","block_type":"box","text":"offsetting purchase of an identical option prior to the expiration of the option it has written. Covered call","page_number":114,"box":{"x":116,"y":351,"width":768,"height":12}},{"id":"de96d31b-6c44-4987-9483-c79a24eec271","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":114,"box":{"x":116,"y":366,"width":736,"height":12}},{"id":"23e0f5d6-5ade-4cb0-b31e-79e032d6cc05","block_type":"box","text":"underlying security declining.","page_number":114,"box":{"x":117,"y":382,"width":219,"height":12}},{"id":"bfede69e-ee89-471e-abe9-04c7af380f22","block_type":"box","text":"A Fund may write (","page_number":114,"box":{"x":116,"y":413,"width":140,"height":12}},{"id":"fade16a6-b2b4-4e23-9173-a871962e075f","block_type":"box","text":"i.e.","page_number":114,"box":{"x":257,"y":413,"width":21,"height":9}},{"id":"89d95a67-72df-4204-af04-0922b1189a9f","block_type":"box","text":", sell) uncovered call options on securities or instruments in which it may invest","page_number":114,"box":{"x":281,"y":413,"width":590,"height":12}},{"id":"87f20f9e-7979-40dd-8c66-b9fe2d6278ce","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":114,"box":{"x":117,"y":428,"width":763,"height":12}},{"id":"a943f2ca-128c-4adf-a0fb-ab6523c3c1d1","block_type":"box","text":"realize income without committing capital to the ownership of the underlying securities or instruments.","page_number":114,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"427e0a87-68d9-4657-bf19-71c310505b8c","block_type":"box","text":"When writing uncovered call options, a Fund must deposit and maintain sufficient margin with the","page_number":114,"box":{"x":116,"y":459,"width":727,"height":12}},{"id":"040ac3bc-a0aa-44c9-b7f0-c19bcec70c10","block_type":"box","text":"broker-dealer through which it made the uncovered call option as collateral to ensure that the securities","page_number":114,"box":{"x":117,"y":475,"width":771,"height":12}},{"id":"e1cb29ab-9b4f-416e-b2e2-76ea9ed0989f","block_type":"box","text":"can be purchased for delivery if and when the option is exercised. During periods of declining","page_number":114,"box":{"x":116,"y":490,"width":697,"height":12}},{"id":"135d04bf-03bb-4246-bf54-3e6b33f7f558","block_type":"box","text":"securities prices or when prices are stable, writing uncovered calls can be a profitable strategy to","page_number":114,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"c3442f67-c75e-40f3-acc7-82d6f76e213d","block_type":"box","text":"increase a Fund’s income with minimal capital risk. Uncovered calls are riskier than covered calls","page_number":114,"box":{"x":117,"y":521,"width":724,"height":12}},{"id":"bb50b958-4ec5-423c-8f98-2052ba1677df","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":114,"box":{"x":117,"y":537,"width":771,"height":12}},{"id":"a37db78d-7895-4f62-9ad5-0cc82c4f5a4f","block_type":"box","text":"have speculative characteristics and the potential for loss is unlimited. When an uncovered call is","page_number":114,"box":{"x":117,"y":552,"width":725,"height":12}},{"id":"37dc6c40-08ee-493f-ad44-1bee40023638","block_type":"box","text":"exercised, a Fund must purchase the underlying security to meet its call obligation. There is also a risk,","page_number":114,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"79b93888-5ede-40bf-ab5d-7de11d5883b2","block_type":"box","text":"especially with preferred and debt securities that lack sufficient liquidity, that the securities may not be","page_number":114,"box":{"x":116,"y":583,"width":760,"height":12}},{"id":"ab127606-08dc-4f90-bb4f-de08845c65e4","block_type":"box","text":"available for purchase. If the purchase price exceeds the exercise price, a Fund will lose the difference.","page_number":114,"box":{"x":116,"y":599,"width":772,"height":12}},{"id":"70e38918-a058-4ac6-99f0-d19a5465c2b3","block_type":"box","text":"Put Options.","page_number":114,"box":{"x":116,"y":630,"width":97,"height":12}},{"id":"2598643f-39d4-4cef-91f6-2db06f501871","block_type":"box","text":"A Fund may purchase put options to seek to hedge against a decline in the value of its","page_number":114,"box":{"x":213,"y":630,"width":648,"height":12}},{"id":"04c2a2c4-0d56-40b1-aee7-86077b8d5428","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":114,"box":{"x":116,"y":645,"width":770,"height":12}},{"id":"931629fa-b138-485c-a2e7-1869837e9657","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":114,"box":{"x":116,"y":661,"width":754,"height":12}},{"id":"b7f1ee74-9c1b-456d-8696-2fd93153dad0","block_type":"box","text":"the market value of the securities or instruments until the put option expires. The amount of any","page_number":114,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"79f117b0-4862-40d1-b26a-3b9fa3385c1f","block_type":"box","text":"appreciation in the value of the underlying securities or instruments will be partially offset by the","page_number":114,"box":{"x":116,"y":692,"width":708,"height":12}},{"id":"7cd70ed3-f63b-4610-8e51-a6c8725dfc92","block_type":"box","text":"amount of the premium paid for the put option and any related transaction costs. Prior to its expiration,","page_number":114,"box":{"x":116,"y":707,"width":758,"height":12}},{"id":"77f4d7d6-4a44-4438-a8b8-c1908d286588","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":114,"box":{"x":116,"y":723,"width":737,"height":12}},{"id":"7f3f4f42-c9b5-44ff-ba2a-5d19249834bf","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":114,"box":{"x":116,"y":738,"width":753,"height":12}},{"id":"d0f937f5-04ab-4a75-a8ff-2ef463523de1","block_type":"box","text":"transaction costs. A closing sale transaction cancels out a Fund’s position as the purchaser of an","page_number":114,"box":{"x":116,"y":754,"width":719,"height":12}},{"id":"fea7139a-570a-4ed2-970b-6b72ca59ad0b","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":114,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"4f63ed6b-3493-4ee8-8dba-280962ff0008","block_type":"box","text":"purchased. A Fund also may purchase uncovered put options.","page_number":114,"box":{"x":117,"y":785,"width":460,"height":12}},{"id":"78a1cdc3-d25f-410e-b04f-995682838eb1","block_type":"box","text":"A Fund also may write (","page_number":114,"box":{"x":116,"y":816,"width":176,"height":12}},{"id":"7a96dafd-0f97-4ee2-9f13-c51f982d5b25","block_type":"box","text":"i.e.","page_number":114,"box":{"x":293,"y":816,"width":20,"height":9}},{"id":"7c1914c1-cc80-49f4-a318-05e1d328499e","block_type":"box","text":", sell) put options on the types of securities or instruments that may be held","page_number":114,"box":{"x":316,"y":816,"width":557,"height":12}},{"id":"c00ac86f-de45-42f5-9e1d-159336f3a2b1","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":114,"box":{"x":117,"y":831,"width":763,"height":12}},{"id":"f55d0279-c737-42ee-8bdf-0cae47101741","block_type":"box","text":"A Fund also may write (","page_number":114,"box":{"x":116,"y":862,"width":172,"height":12}},{"id":"92251c7e-4b42-444b-a123-556e168ae942","block_type":"box","text":"i.e.","page_number":114,"box":{"x":289,"y":862,"width":20,"height":10}},{"id":"1f5ea229-46aa-4f4d-b1d6-16107a8be783","block_type":"box","text":", sell) uncovered put options on securities or instruments in which it may invest","page_number":114,"box":{"x":312,"y":862,"width":575,"height":12}},{"id":"d37bac84-4ab6-440b-a532-41ec5f4a9a72","block_type":"box","text":"but with respect to which the Fund does not current","page_number":114,"box":{"x":117,"y":878,"width":372,"height":12}},{"id":"ad7b4ba5-7bbd-4adb-8f7a-2b35cf75d078","block_type":"box","text":"ly have a corresponding short position or has not","page_number":114,"box":{"x":490,"y":878,"width":359,"height":12}},{"id":"385d4075-f232-4471-a4f8-3b9a74aa1e9c","block_type":"box","text":"II-27","page_number":114,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7d71b0ad-0413-4022-9da4-cceb216357f0","block_type":"box","text":"NM1026U-6030748-114/260","page_number":114,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1927adb7-01d0-4ecb-a084-83f098743ce5","block_type":"box","text":"deposited as collateral cash equal to the exercise va","page_number":115,"box":{"x":116,"y":87,"width":380,"height":12}},{"id":"e6875eab-8df0-4cc0-9dcb-163278195ec4","block_type":"box","text":"lue of the put option with","page_number":115,"box":{"x":498,"y":87,"width":182,"height":12}},{"id":"1aeabbfc-cdd8-4721-8d76-02f6e13671ce","block_type":"box","text":"the broker-dealer through","page_number":115,"box":{"x":680,"y":87,"width":190,"height":12}},{"id":"2af7b2e0-8278-419e-a23e-94da5d42fcd2","block_type":"box","text":"which it made the uncovered put opt","page_number":115,"box":{"x":116,"y":103,"width":264,"height":11}},{"id":"1d268bd2-652a-4839-b915-72f797f8568b","block_type":"box","text":"ion. The principal reason for writing uncovered put options is to","page_number":115,"box":{"x":381,"y":102,"width":461,"height":13}},{"id":"50e94788-600c-4b78-93f2-576b99518355","block_type":"box","text":"receive premium income and to acquire such securities","page_number":115,"box":{"x":117,"y":118,"width":400,"height":12}},{"id":"c5b01c4c-8b39-4563-8967-39ca0d3a6c40","block_type":"box","text":"or instruments at a net cost below the current","page_number":115,"box":{"x":517,"y":118,"width":339,"height":10}},{"id":"c0aa7812-6826-4e73-aa6a-2d5f47c0b826","block_type":"box","text":"market value. A Fund has the obligation to buy the","page_number":115,"box":{"x":117,"y":134,"width":370,"height":12}},{"id":"d8206e63-0400-448f-9fae-c7714c53d3d5","block_type":"box","text":"securities or instruments at an agreed upon price if","page_number":115,"box":{"x":488,"y":134,"width":373,"height":12}},{"id":"3c6937c7-784d-42ce-a9a1-8fff0c148906","block_type":"box","text":"the price of the securities or instruments decreases bel","page_number":115,"box":{"x":116,"y":149,"width":397,"height":12}},{"id":"ce50555b-1960-4c88-9806-440ff0707666","block_type":"box","text":"ow the exercise price. If the price of the securities","page_number":115,"box":{"x":515,"y":149,"width":364,"height":12}},{"id":"7990b70d-12e0-4b87-931f-a6c91f5a9580","block_type":"box","text":"or instruments increases during the option period,","page_number":115,"box":{"x":116,"y":165,"width":360,"height":12}},{"id":"d1c44cc0-9b23-4239-9134-34876b6d17e3","block_type":"box","text":"the option will expire worthless and a Fund will retain","page_number":115,"box":{"x":477,"y":165,"width":393,"height":11}},{"id":"a03334d3-a2f3-4299-9437-56fffb4ac32c","block_type":"box","text":"the premium and will not have to purchase the securiti","page_number":115,"box":{"x":116,"y":180,"width":392,"height":12}},{"id":"8b432c92-cc48-43d0-94eb-964787220c94","block_type":"box","text":"es or instruments at the exercise price.","page_number":115,"box":{"x":510,"y":180,"width":286,"height":12}},{"id":"6222c0fd-e0a0-4d0f-94e7-067025315dfe","block_type":"box","text":"Options on Government National Mortgage Association (“GNMA”) Certificates.","page_number":115,"box":{"x":117,"y":211,"width":586,"height":12}},{"id":"78f539d3-7f45-44e3-8e87-3cc8c0512db9","block_type":"box","text":"The following","page_number":115,"box":{"x":704,"y":211,"width":103,"height":12}},{"id":"37ddcb3d-bf53-4b8f-a41e-575f784ca3c9","block_type":"box","text":"information relates to the unique characteristics of options on GNMA Certificates. Since the remaining","page_number":115,"box":{"x":117,"y":227,"width":759,"height":12}},{"id":"04709a61-bb95-402f-8752-5d50259a4dc2","block_type":"box","text":"principal balance of GNMA Certificates declines each month as a result of mortgage payments, a","page_number":115,"box":{"x":117,"y":242,"width":725,"height":12}},{"id":"ccbbd264-7bf9-4809-9b26-d137d0957182","block_type":"box","text":"Fund, as a writer of a GNMA call holding GNMA Certificates as “cover” to satisfy its delivery obligation","page_number":115,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"dd021c82-d051-408a-b5b0-638fb8b41974","block_type":"box","text":"in the event of exercise, may find that the GNMA Certificates it holds no longer have a sufficient","page_number":115,"box":{"x":117,"y":273,"width":714,"height":12}},{"id":"ee4a366c-78b3-40f2-a89d-911ede93e923","block_type":"box","text":"remaining principal balance for this purpose. Should this occur, a Fund will purchase additional GNMA","page_number":115,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"097ff22e-ae9d-4ba7-a211-ac087214db65","block_type":"box","text":"Certificates from the same pool (if obtainable) or other GNMA Certificates in the cash market in order","page_number":115,"box":{"x":117,"y":304,"width":754,"height":12}},{"id":"714aca85-1921-46d7-bdb2-7db46a4c0f5b","block_type":"box","text":"to maintain its “cover.”","page_number":115,"box":{"x":116,"y":320,"width":170,"height":9}},{"id":"35674a5d-715c-465a-a84e-b8f32d7e91d6","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":115,"box":{"x":116,"y":351,"width":764,"height":12}},{"id":"b935f802-c3a9-4e80-94bc-bbd4737d438f","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":115,"box":{"x":117,"y":366,"width":724,"height":12}},{"id":"daa1ff4a-bf2f-4851-9522-3c9103fc07b7","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":115,"box":{"x":116,"y":382,"width":765,"height":12}},{"id":"d7c0d735-2cca-41d5-85fb-b8d44ef12169","block_type":"box","text":"occur, a Fund will no longer be covered, and the Fund will either enter into a closing purchase","page_number":115,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"1ef5b894-527a-4415-998b-5f56dac0ba82","block_type":"box","text":"transaction or replace such Certificate with a certificate that represents cover. When a Fund closes its","page_number":115,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"f366cfa0-f5fc-45df-99f1-000598f62e87","block_type":"box","text":"position or replaces such Certificate, it may realize an unanticipated loss and incur transaction costs.","page_number":115,"box":{"x":117,"y":428,"width":751,"height":12}},{"id":"43d1593d-3f45-4699-8693-cd1754046796","block_type":"box","text":"Options on Swaps (“Swaptions”).","page_number":115,"box":{"x":117,"y":459,"width":243,"height":12}},{"id":"c7c36e4f-6035-49d8-9612-1fe23b8fbb68","block_type":"box","text":"A swaption gives a counterparty the option (but not the obligation) to","page_number":115,"box":{"x":362,"y":459,"width":517,"height":12}},{"id":"180f62c4-a09a-47b6-8481-769570d210ca","block_type":"box","text":"enter into a new swap agreement or to shorten, extend, cancel or otherwise modify an existing swap","page_number":115,"box":{"x":116,"y":475,"width":750,"height":12}},{"id":"876e10a3-56f7-4f86-afad-65e8506e1b5e","block_type":"box","text":"agreement, at a designated future time on specified terms. A Fund may write (","page_number":115,"box":{"x":116,"y":490,"width":580,"height":12}},{"id":"521f62b7-c7c8-4da7-8322-3e30bdb675dd","block_type":"box","text":"i.e.","page_number":115,"box":{"x":698,"y":490,"width":20,"height":10}},{"id":"d226c7ac-f04f-47a0-8029-bd287a92298a","block_type":"box","text":", sell) and purchase","page_number":115,"box":{"x":721,"y":490,"width":150,"height":12}},{"id":"77df49a7-38a8-4b4d-b296-4b9cf2a693c5","block_type":"box","text":"put and call swaptions. Depending on the terms of the particular option agreement, a Fund will","page_number":115,"box":{"x":117,"y":506,"width":704,"height":12}},{"id":"8ed0b92d-4539-4224-9cb2-a7c01dde9b8b","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":115,"box":{"x":116,"y":521,"width":758,"height":12}},{"id":"bee17dfa-def9-4db2-9430-fd261c96a378","block_type":"box","text":"swaption. When a Fund purchases a swaption, it risks losing only the amount of the premium it has","page_number":115,"box":{"x":116,"y":537,"width":741,"height":12}},{"id":"f6716e93-dd57-4979-856d-447ae5e5d33d","block_type":"box","text":"paid should it decide to let the option expire unexercised. However, when a Fund writes a swaption,","page_number":115,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"53d72a46-57e8-44b1-be27-7e6f66952225","block_type":"box","text":"upon exercise of the option the Fund will become obligated according to the terms of the underlying","page_number":115,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"4c7a2bd6-46ba-43a8-a2bb-13d868a0bf2f","block_type":"box","text":"agreement and the potential for loss may be unlimited. Certain swaptions are permitted, although not","page_number":115,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"0840030a-4248-4619-bd7e-55b3d341b859","block_type":"box","text":"required, to be cleared.","page_number":115,"box":{"x":117,"y":599,"width":177,"height":12}},{"id":"4af64ce5-3c9e-4ed1-9511-c3d556d3ced2","block_type":"box","text":"A Fund will likely enter into these transactions to preserve a return or spread on a particular investment","page_number":115,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"a64ea763-c4d1-4186-83fd-55107095fd7e","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":115,"box":{"x":116,"y":645,"width":772,"height":12}},{"id":"3e032715-fbf6-4bf1-8434-9d2c2d5409c3","block_type":"box","text":"purchasing at a later date. A Fund generally will use these transactions for hedging purposes, not for","page_number":115,"box":{"x":117,"y":661,"width":746,"height":12}},{"id":"8310b84f-4fed-462a-ba4f-091f526ff434","block_type":"box","text":"speculation.","page_number":115,"box":{"x":116,"y":676,"width":88,"height":12}},{"id":"3a7e3dcd-4a86-4633-ab78-918bea584fc7","block_type":"box","text":"Swaptions may be subject to correlation risk, leverage risk, illiquidity risk and market risk. See “— Risk","page_number":115,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"de2ea668-83a8-4719-b263-4cefc88883bb","block_type":"box","text":"Factors in Derivatives” above.","page_number":115,"box":{"x":117,"y":723,"width":220,"height":9}},{"id":"6e9ac93c-ff4f-4f68-9e83-27349dcf7af2","block_type":"box","text":"FLEX Options.","page_number":115,"box":{"x":116,"y":754,"width":107,"height":12}},{"id":"ba07d95b-6b0c-4b54-ae76-606b9324375d","block_type":"box","text":"FLEX Options are customized option contracts available through national securities","page_number":115,"box":{"x":231,"y":754,"width":617,"height":12}},{"id":"5b3dfbbe-e6b2-4471-a82d-98b06613b4c6","block_type":"box","text":"exchanges that are guaranteed for settlement by the Options Clearing Corporation (“OCC”). FLEX","page_number":115,"box":{"x":116,"y":769,"width":729,"height":12}},{"id":"026b3405-8eb6-4b36-8f2b-ec53d6d48f3e","block_type":"box","text":"Options are listed on a U.S. national securities exchange. FLEX Options provide investors with the","page_number":115,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"21b880b0-128c-4e01-b9b1-9da5974dece3","block_type":"box","text":"ability to customize assets referenced by the options, exercise prices, exercise styles (","page_number":115,"box":{"x":116,"y":800,"width":641,"height":12}},{"id":"566b0f40-f995-4fc8-a9ce-9594a9166d3d","block_type":"box","text":"i.e.","page_number":115,"box":{"x":758,"y":800,"width":20,"height":10}},{"id":"664cbbbc-8316-44bf-9a8c-c6fdcc3e907a","block_type":"box","text":", American","page_number":115,"box":{"x":782,"y":800,"width":84,"height":11}},{"id":"c910996d-2c4f-4066-8b8c-038b79658190","block_type":"box","text":"style, exercisable any time prior to the expiration date, or European-style, exercisable only on the","page_number":115,"box":{"x":116,"y":816,"width":721,"height":12}},{"id":"ff7da9d1-9146-4a36-bd1c-abab951ca8a4","block_type":"box","text":"option expiration date) and expiration dates, while achieving price discovery in competitive, transparent","page_number":115,"box":{"x":116,"y":831,"width":769,"height":12}},{"id":"8c77e770-b29c-492b-9814-ca2000ac98dc","block_type":"box","text":"auctions markets and avoiding the counterparty exposure of OTC options positions. Each option","page_number":115,"box":{"x":116,"y":847,"width":719,"height":12}},{"id":"d1cdbd46-03ea-461d-bb80-d627a630c08b","block_type":"box","text":"contract entitles the holder thereof to purchase (for the","page_number":115,"box":{"x":116,"y":862,"width":410,"height":12}},{"id":"42a5ffe2-2ff7-46ad-b60d-453ae6ea7cf6","block_type":"box","text":"call options) or sell (for the put options) shares","page_number":115,"box":{"x":527,"y":862,"width":349,"height":12}},{"id":"463a14c9-81c1-480b-bbe9-91ace898b607","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":115,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"f1a8308f-382c-4df8-83ea-1c5b62d42a59","block_type":"box","text":"II-28","page_number":115,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"99db5d0b-f0fb-4b6e-b692-1ce93b8e1d02","block_type":"box","text":"NM1026U-6030748-115/260","page_number":115,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e85a0f67-6b5d-45d3-9819-061fdc67a7f7","block_type":"box","text":"including both purchased and written put and call options (as further described below). The FLEX","page_number":116,"box":{"x":117,"y":87,"width":726,"height":12}},{"id":"a463da48-44ad-4596-82a4-dcba1edd5372","block_type":"box","text":"Options are all European style options, which means that they are exercisable at a predetermined","page_number":116,"box":{"x":116,"y":102,"width":730,"height":13}},{"id":"cfa7b97e-877f-4f5a-955c-7ec5ad1865ee","block_type":"box","text":"specified price (the “strike price”) only on the FLEX Option’s expiration date.","page_number":116,"box":{"x":116,"y":118,"width":569,"height":12}},{"id":"364759d2-874d-4d99-aa23-14b85b7a849e","block_type":"box","text":"The OCC guarantees performance by each of the counterparties to the FLEX Options, becoming the","page_number":116,"box":{"x":116,"y":149,"width":752,"height":12}},{"id":"f0d41c1f-6a47-4114-a41a-073b4fd087f0","block_type":"box","text":"“buyer for every seller and the seller for every buyer”, reducing counterparty risk for clearing members","page_number":116,"box":{"x":116,"y":165,"width":762,"height":12}},{"id":"c3fd54ce-7732-44c3-ab7c-427d922459eb","block_type":"box","text":"and options traders. Although guaranteed for settlement by the OCC, FLEX Options are still subject to","page_number":116,"box":{"x":116,"y":180,"width":762,"height":12}},{"id":"70b98660-446d-4737-83a4-a4164cca90b4","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":116,"box":{"x":116,"y":196,"width":760,"height":12}},{"id":"c24a6e19-3cb4-4250-8701-518b6fd2ce71","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":116,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"07646b34-434d-48f2-94ac-471170d2c553","block_type":"box","text":"will be unable or unwilling to perform its obligations under the FLEX Options contracts.","page_number":116,"box":{"x":116,"y":227,"width":646,"height":12}},{"id":"5e30f0a4-ba80-4a96-a172-ad7d620bc395","block_type":"box","text":"Subject to determination by the Securities Committee of the OCC, adjustments may be made to the","page_number":116,"box":{"x":116,"y":258,"width":744,"height":12}},{"id":"ec9bc53f-8007-466f-a04e-784dc81dfad3","block_type":"box","text":"FLEX Options for certain events (collectively, “Corporate Actions”) specified in the OCC’s by-laws and","page_number":116,"box":{"x":117,"y":273,"width":760,"height":12}},{"id":"1fad96d1-8390-4d3b-b201-ede1373992c5","block_type":"box","text":"rules: certain stock dividends or distributions, stock splits, reverse stock splits, rights offerings,","page_number":116,"box":{"x":117,"y":289,"width":702,"height":12}},{"id":"773dd7c1-80f0-4820-ae78-a034ca56fc47","block_type":"box","text":"distributions, reorganizations, recapitalizations, or reclassifications with respect to an underlying","page_number":116,"box":{"x":116,"y":304,"width":715,"height":12}},{"id":"a95d282c-8842-4281-9dc5-0379dbcdc0dd","block_type":"box","text":"security, or a merger, consolidation, dissolution or liquidation of the issuer of the underlying security.","page_number":116,"box":{"x":116,"y":320,"width":748,"height":12}},{"id":"a5a37c1f-bb75-490d-be75-178517856fec","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":116,"box":{"x":116,"y":335,"width":759,"height":12}},{"id":"6cd857fb-a82a-4278-9bb3-be0bdb5fa179","block_type":"box","text":"the OCC’s Securities Committee, in light of the circumstances known to it at the time such","page_number":116,"box":{"x":116,"y":351,"width":673,"height":12}},{"id":"ab1c96d3-a032-48ad-878e-658c1eddb379","block_type":"box","text":"determination is made, based on its judgment as to what is appropriate for the protection of investors","page_number":116,"box":{"x":116,"y":366,"width":754,"height":12}},{"id":"cce6520e-c2f9-46a2-bc7b-1ed49a729bc7","block_type":"box","text":"and the public interest, taking into account such factors as fairness to holders and writers (or","page_number":116,"box":{"x":116,"y":382,"width":691,"height":12}},{"id":"a5e194f4-6014-4abe-83d1-46d861a6dbe3","block_type":"box","text":"purchasers and sellers) of the affected options, the maintenance of a fair and orderly market in the","page_number":116,"box":{"x":117,"y":397,"width":734,"height":12}},{"id":"00f347b6-f34a-4c43-9fcc-7a1358be6c53","block_type":"box","text":"affected options, consistency of interpretation and practice, efficiency of exercise settlement","page_number":116,"box":{"x":116,"y":413,"width":687,"height":12}},{"id":"e7df9bc9-5145-4963-9a4a-6cc018b737b2","block_type":"box","text":"procedures, and the coordination with other clearing agencies of the clearance and settlement of","page_number":116,"box":{"x":117,"y":428,"width":721,"height":12}},{"id":"2635559e-39a4-4757-b408-4d46e2499890","block_type":"box","text":"transactions in the underlying interest.","page_number":116,"box":{"x":116,"y":444,"width":288,"height":12}},{"id":"6b075937-02df-40f1-82d7-ffc7783f43c2","block_type":"box","text":"Certain Considerations Regarding Options","page_number":116,"box":{"x":151,"y":475,"width":314,"height":12}},{"id":"25dbc246-11ae-46e4-9f2a-e37141b04897","block_type":"box","text":". The FLEX Options in which each Fund may invest will","page_number":116,"box":{"x":467,"y":475,"width":414,"height":12}},{"id":"a201880f-b6c8-4d8a-bdba-821d0d442e04","block_type":"box","text":"be options on an exchange-traded fund (“ETF”) or the S&P 500 Index (together with such ETF, a","page_number":116,"box":{"x":150,"y":490,"width":723,"height":12}},{"id":"6ce6b3cc-1f51-4226-9ced-a547fb9c7ffb","block_type":"box","text":"“Reference Asset”). As such, the value of a Fund’s FLEX Options will fluctuate with changes in the","page_number":116,"box":{"x":150,"y":506,"width":735,"height":12}},{"id":"a6493568-672c-42f4-a8d1-4e153da5a065","block_type":"box","text":"value of the securities held by the ETF, and thus the ETF’s share price. In addition to the value of","page_number":116,"box":{"x":150,"y":521,"width":726,"height":12}},{"id":"bc05d561-6eaa-47ac-bef9-02ae530e3218","block_type":"box","text":"the ETF, the value of an option, in general, will reflect, among other things, the time remaining until","page_number":116,"box":{"x":150,"y":537,"width":738,"height":12}},{"id":"eb7b0d9b-6d11-4d48-a6f2-668820cfa82c","block_type":"box","text":"expiration (the end of the Outcome Period), the relationship of the exercise price to the market","page_number":116,"box":{"x":150,"y":552,"width":704,"height":12}},{"id":"ca4340a6-decb-4b7a-94b7-5fd90f668a43","block_type":"box","text":"price of the Reference Asset, and general market conditions. Options that expire unexercised","page_number":116,"box":{"x":150,"y":568,"width":698,"height":12}},{"id":"c941788a-022c-4146-8147-fbbc3ab85eb5","block_type":"box","text":"have no value.","page_number":116,"box":{"x":150,"y":583,"width":113,"height":10}},{"id":"31143621-ff48-4ce6-ad48-2f6eef512048","block_type":"box","text":"The puts and calls on the Reference Asset entitle the purchaser of the option the right to purchase","page_number":116,"box":{"x":150,"y":606,"width":734,"height":12}},{"id":"efb364c5-7b05-4de6-ba6d-c77be2f49416","block_type":"box","text":"(for a call option) or sell (for a put option) the Reference Asset at a predetermined specified price","page_number":116,"box":{"x":150,"y":622,"width":723,"height":12}},{"id":"d35b8b1e-8bd2-4e13-96a6-e6656661d273","block_type":"box","text":"(the “strike price”). When a Fund writes a call on the Reference Asset, it receives a premium and","page_number":116,"box":{"x":150,"y":637,"width":722,"height":12}},{"id":"008b130e-6944-4993-937d-2ad4981da95e","block_type":"box","text":"agrees that the purchaser of the call, upon exercise of the call, will receive from the Fund the","page_number":116,"box":{"x":150,"y":653,"width":693,"height":12}},{"id":"0ceff28c-7cc5-4e5d-b745-d41d37966f9c","block_type":"box","text":"delivery of a specified number of shares of the ETF in exchange for the strike price. When a Fund","page_number":116,"box":{"x":150,"y":668,"width":724,"height":12}},{"id":"a3afe667-26af-43b6-a0b9-13ac77751ec1","block_type":"box","text":"buys a call on the Reference Asset, it pays a premium and has the same rights to such call as","page_number":116,"box":{"x":150,"y":684,"width":697,"height":12}},{"id":"6b6ce883-5e59-4754-8d2a-2adebc6279e8","block_type":"box","text":"indicated above. When a Fund buys a put on the Reference Asset, it pays a premium and has the","page_number":116,"box":{"x":150,"y":699,"width":725,"height":13}},{"id":"a6953de3-840e-4c8b-a22e-ce10a52fc51b","block_type":"box","text":"right to require the seller of the put, upon the Fund’s exercise of the put, to deliver the specified","page_number":116,"box":{"x":150,"y":715,"width":704,"height":12}},{"id":"933d14b6-d9b2-4af8-b5b8-b9cf1d0a035c","block_type":"box","text":"number of shares of the ETF in exchange for the strike price. When a Fund writes a put on the","page_number":116,"box":{"x":150,"y":730,"width":700,"height":13}},{"id":"4fe885b5-cc30-4078-a08e-1d240dd4cb30","block_type":"box","text":"Reference Asset, it receives a premium and the purchaser of the put has the right to require the","page_number":116,"box":{"x":151,"y":746,"width":708,"height":12}},{"id":"9dad7955-9760-451f-b01f-49be54cccee2","block_type":"box","text":"Fund to deliver the specified number of shares of the ETF in exchange for the strike price.","page_number":116,"box":{"x":151,"y":761,"width":665,"height":13}},{"id":"f454f17a-1e1a-4c89-9874-92cb040bcfc8","block_type":"box","text":"Although each Fund will generally utilize FLEX Options that are physically settled, a Fund may","page_number":116,"box":{"x":149,"y":785,"width":701,"height":12}},{"id":"935e5afd-6ae1-4e92-b6f1-b1a13105f299","block_type":"box","text":"also utilize FLEX Options that are cash-settled. Cash-settled options give the holder the right to","page_number":116,"box":{"x":150,"y":800,"width":706,"height":12}},{"id":"87cc3fa6-b8e1-4e14-824a-0e616c028455","block_type":"box","text":"receive an amount (or owe an amount) of cash upon the exercise of the option. Gain or loss","page_number":116,"box":{"x":150,"y":816,"width":681,"height":12}},{"id":"5512004c-3ca7-4b41-b978-42f363fc28f9","block_type":"box","text":"depends on changes in the value of the ETF’s share price relative to the strike price for a given","page_number":116,"box":{"x":150,"y":831,"width":710,"height":12}},{"id":"d5964720-38e5-4f3e-9ed2-94e4c0c56a23","block_type":"box","text":"option contract. The amount of cash is equal to the difference between the closing price of the","page_number":116,"box":{"x":150,"y":847,"width":702,"height":12}},{"id":"23ff84b0-288f-4bd9-a276-91b58e34dd4b","block_type":"box","text":"ETF’s share price and the exercise price of the option contract times a specified multiple","page_number":116,"box":{"x":151,"y":862,"width":659,"height":12}},{"id":"b40d066a-d4ef-44ab-81eb-49ccd71ec324","block_type":"box","text":"(“multiplier”), which determines the total value for each point of such difference.","page_number":116,"box":{"x":150,"y":878,"width":593,"height":12}},{"id":"6bff150c-59be-4e4b-9f80-eb1e80263e49","block_type":"box","text":"II-29","page_number":116,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9824cfd1-60d4-4acd-98c3-580335a9f52f","block_type":"box","text":"NM1026U-6030748-116/260","page_number":116,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"03cdf0b0-7388-42df-8caf-9a500416708f","block_type":"box","text":"Risks of Options on the Reference Assets","page_number":117,"box":{"x":150,"y":87,"width":311,"height":12}},{"id":"9b727234-d2cd-4081-b5f5-f8b3ecbf7f55","block_type":"box","text":". If a Fund has purchased an option and exercises it","page_number":117,"box":{"x":462,"y":87,"width":390,"height":12}},{"id":"e1c64c76-91ce-4366-95d8-dc6ed4eebd48","block_type":"box","text":"before the closing value for that day is available, it runs the risk that the level of the Reference","page_number":117,"box":{"x":150,"y":102,"width":702,"height":13}},{"id":"5bc85171-69c9-47b1-8bda-080191712342","block_type":"box","text":"Asset may subsequently change. If such a change causes the exercised option to fall out of the","page_number":117,"box":{"x":149,"y":118,"width":714,"height":12}},{"id":"50ab18dd-f336-43b1-9db2-86d6e73c8dd4","block_type":"box","text":"money, the applicable Fund will be required to pay the difference between the closing Reference","page_number":117,"box":{"x":150,"y":134,"width":721,"height":12}},{"id":"76164e3f-65a0-4583-a799-add2ac4fd36e","block_type":"box","text":"Asset value and the exercise price of the option (times the applicable multiplier) to the assigned","page_number":117,"box":{"x":149,"y":149,"width":714,"height":12}},{"id":"bf7130f5-9d84-4d63-b264-9685b063cc9a","block_type":"box","text":"writer.","page_number":117,"box":{"x":149,"y":165,"width":51,"height":9}},{"id":"e0b77c33-597a-4c31-8e00-a4a92a6ab0b7","block_type":"box","text":"Foreign Exchange Transactions.","page_number":117,"box":{"x":116,"y":196,"width":247,"height":12}},{"id":"681f7ab2-398d-45df-8d85-c2e46f058591","block_type":"box","text":"A Fund may enter into spot foreign exchange transactions, forward foreign exchange transactions (“FX","page_number":117,"box":{"x":116,"y":219,"width":768,"height":12}},{"id":"dd3f7dce-f161-4c2c-aae7-03c066967513","block_type":"box","text":"forwards”) and currency swaps, purchase and sell currency options, currency futures and related","page_number":117,"box":{"x":116,"y":234,"width":723,"height":12}},{"id":"9a528f01-1d0e-4556-80af-7180a7c6bcc8","block_type":"box","text":"options thereon (collectively, “Currency Instruments”) for purposes of hedging against the decline in the","page_number":117,"box":{"x":116,"y":250,"width":772,"height":12}},{"id":"92a16b2e-0d5f-4eef-aeff-dc34d8ac0068","block_type":"box","text":"value of currencies in which its portfolio holdings are denominated against the U.S. dollar or, with","page_number":117,"box":{"x":116,"y":265,"width":725,"height":12}},{"id":"0433c32f-6684-4028-af6b-5845067dd80c","block_type":"box","text":"respect to certain Funds, to seek to enhance returns.","page_number":117,"box":{"x":117,"y":281,"width":397,"height":12}},{"id":"0c4eb5c7-cd66-4c05-8643-137ad82608c6","block_type":"box","text":"Such transactions could be effected to hedge with respect to foreign dollar denominated securities","page_number":117,"box":{"x":116,"y":312,"width":734,"height":12}},{"id":"7e2533b3-fda0-4e84-80c2-6ff7117dc083","block_type":"box","text":"owned by a Fund, sold by a Fund but not","page_number":117,"box":{"x":116,"y":327,"width":309,"height":12}},{"id":"316c0efa-bf48-46d9-a3a8-c2b03facdfb1","block_type":"box","text":"yet delivered, or committed or anticipated to be purchased by","page_number":117,"box":{"x":426,"y":327,"width":460,"height":12}},{"id":"f027ea03-f05a-45a0-9f23-c84f37fa3303","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":117,"box":{"x":116,"y":343,"width":768,"height":12}},{"id":"7edd5a31-5a93-49c4-944f-6783dde236c0","block_type":"box","text":"an investment in a yen-denominated security. For example, the Fund may purchase a foreign currency","page_number":117,"box":{"x":116,"y":358,"width":767,"height":12}},{"id":"de802d98-02b7-4b88-8f1a-1eb7f9b2395b","block_type":"box","text":"put option enabling it to sell a specified amount of yen","page_number":117,"box":{"x":117,"y":374,"width":404,"height":12}},{"id":"28d7760e-7d55-428d-8337-8adfd61c727b","block_type":"box","text":"for dollars at a specified price by a future date.","page_number":117,"box":{"x":521,"y":374,"width":350,"height":12}},{"id":"9e34021f-adf5-4601-9220-e5fc4823ac27","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":117,"box":{"x":116,"y":389,"width":764,"height":12}},{"id":"3945862b-db67-4244-bea5-43e18fff1fb1","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":117,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"2d904573-8825-4728-ad17-941c9a3ee6fc","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":117,"box":{"x":116,"y":420,"width":764,"height":12}},{"id":"61e6f346-bb46-40b2-9674-7ec66a7fd0de","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":117,"box":{"x":116,"y":436,"width":727,"height":12}},{"id":"0b34dff4-4d26-43cf-8ee5-ee66dd095f29","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":117,"box":{"x":116,"y":451,"width":767,"height":12}},{"id":"2a1573cb-b4cf-4c3c-88fd-e5d7dea9ff17","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":117,"box":{"x":117,"y":467,"width":742,"height":12}},{"id":"671fdb36-6483-4992-92e1-adf6b00f99a3","block_type":"box","text":"Fund are considered hedging transactions. Certain Funds have a fundamental investment restriction","page_number":117,"box":{"x":117,"y":482,"width":749,"height":12}},{"id":"2c905850-e2e7-4b6b-8f1f-69e10cc70924","block_type":"box","text":"that restricts currency option strategies.","page_number":117,"box":{"x":116,"y":498,"width":298,"height":12}},{"id":"a665e110-42d8-445e-8d0b-acf96d3c07d8","block_type":"box","text":"Hedging transactions involving Currency Instruments involve substantial risks, including correlation","page_number":117,"box":{"x":117,"y":529,"width":737,"height":12}},{"id":"4187c5bb-8f69-410a-b6f4-4ee722aab137","block_type":"box","text":"risk. A Fund’s use of Currency Instruments to effect hedging strategies is intended to reduce the","page_number":117,"box":{"x":117,"y":544,"width":718,"height":12}},{"id":"bb7ffe98-b00e-4d75-929c-696594f818a0","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":117,"box":{"x":116,"y":560,"width":763,"height":12}},{"id":"1bd96381-88c0-4357-8c23-1e30fcbd10be","block_type":"box","text":"the NAV of the Fund’s shares from fluctuating. Moreover, although Currency Instruments will be used","page_number":117,"box":{"x":116,"y":575,"width":757,"height":12}},{"id":"eed3f107-057c-4fdc-98e2-792935d6e716","block_type":"box","text":"with the intention of hedging against adverse currency movements, transactions in Currency","page_number":117,"box":{"x":116,"y":591,"width":689,"height":12}},{"id":"59eb0cfe-6e59-4e95-898d-36c9a60f719a","block_type":"box","text":"Instruments involve the risk that anticipated currency movements will not be accurately predicted and","page_number":117,"box":{"x":117,"y":607,"width":755,"height":11}},{"id":"171350a1-a2a8-43c8-af66-1c29d33ad86c","block_type":"box","text":"that the Fund’s hedging strategies will be ineffective. To the extent that a Fund hedges against","page_number":117,"box":{"x":116,"y":622,"width":706,"height":12}},{"id":"bdcd5240-16e1-4158-9154-10f581658cf4","block_type":"box","text":"anticipated currency movements that do not occur, the Fund may realize losses and decrease its total","page_number":117,"box":{"x":116,"y":638,"width":761,"height":11}},{"id":"d579a64a-1dd7-4bf8-91b5-26d87ad1271b","block_type":"box","text":"return. Furthermore, a Fund will only engage in hedging activities from time to time and may not be","page_number":117,"box":{"x":117,"y":653,"width":738,"height":12}},{"id":"80cf4b18-70c9-4476-abc5-f3cb9b6300dd","block_type":"box","text":"engaging in hedging activities when movements in currency exchange rates actually occur.","page_number":117,"box":{"x":116,"y":669,"width":674,"height":11}},{"id":"13803f86-4fe6-4678-bd1a-7a342d404ad1","block_type":"box","text":"In connection with its trading in forward foreign currency contracts, a Fund will contract with a foreign","page_number":117,"box":{"x":117,"y":699,"width":746,"height":13}},{"id":"dc26a145-4b02-4ca4-b5be-87d5deed9ffa","block_type":"box","text":"or domestic bank, or foreign or domestic securities dealer, to make or take future delivery of a specified","page_number":117,"box":{"x":116,"y":715,"width":766,"height":12}},{"id":"5992253e-988a-4b79-bb3a-cdbbaf3c9bcd","block_type":"box","text":"amount of a particular currency. There are no limitations on daily price moves in such forward","page_number":117,"box":{"x":116,"y":730,"width":693,"height":13}},{"id":"2ed7ecda-c085-4fac-a76f-88d2356d0319","block_type":"box","text":"contracts, and banks and dealers are not required to continue to make markets in such contracts.","page_number":117,"box":{"x":116,"y":746,"width":722,"height":12}},{"id":"8d7e8b6b-5624-48df-9a9a-0179b5038df5","block_type":"box","text":"There have been periods during which certain banks or dealers have refused to quote prices for such","page_number":117,"box":{"x":116,"y":761,"width":751,"height":13}},{"id":"8d7f7694-db99-40b5-baf6-3f07f1f3d7b2","block_type":"box","text":"forward contracts or have quoted prices with an unusually wide spread between the price at which the","page_number":117,"box":{"x":116,"y":777,"width":756,"height":12}},{"id":"cb0826c4-c435-49be-b6cf-b97477da1861","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":117,"box":{"x":117,"y":792,"width":743,"height":13}},{"id":"762a4b4d-bf62-4aa0-9042-9a4fa80b5b47","block_type":"box","text":"currency controls might limit any such forward contract trading. With respect to its trading of forward","page_number":117,"box":{"x":116,"y":808,"width":740,"height":12}},{"id":"2b221726-7516-4e50-868c-b34f0d8865ec","block_type":"box","text":"contracts, if any, a Fund will be subject to counterparty risk. Any such failure to perform by a","page_number":117,"box":{"x":116,"y":823,"width":683,"height":13}},{"id":"0de1df2b-6076-4455-9bd0-d1d3f6bb7ac3","block_type":"box","text":"counterparty would deprive the Fund of any profit potential or force the Fund to cover its commitments","page_number":117,"box":{"x":116,"y":839,"width":762,"height":12}},{"id":"fc0f01d5-36a1-47b1-96cc-77574be7551f","block_type":"box","text":"for resale, if any, at the then market price and could result in a loss to the Fund.","page_number":117,"box":{"x":116,"y":854,"width":595,"height":13}},{"id":"7da80c5e-77d9-4f31-9a92-6c436c9ec821","block_type":"box","text":"II-30","page_number":117,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a2486a3e-a689-4be1-b47d-deaa949bf671","block_type":"box","text":"NM1026U-6030748-117/260","page_number":117,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"60dc0f5f-4e19-4cb9-a0dc-6db3c3f1c692","block_type":"box","text":"It may not be possible for a Fund to hedge against currency exchange rate movements, even if","page_number":118,"box":{"x":117,"y":87,"width":709,"height":12}},{"id":"120a5b9b-0a8c-466b-b643-0402ee3ff854","block_type":"box","text":"correctly anticipated, in the event that (i) the currency exchange rate movement is so generally","page_number":118,"box":{"x":116,"y":102,"width":707,"height":13}},{"id":"e252fa5e-4883-4ec2-945c-7d0da31bacd0","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":118,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"475b57f8-dcbf-48c7-8cbc-0ab201b9aebf","block_type":"box","text":"currency exchange rate movement relates to a market with respect to which Currency Instruments are","page_number":118,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"149b9428-6612-4072-ad6f-d1cbba99879f","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":118,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"4f6595f1-0c09-47c5-a82f-3014c404b248","block_type":"box","text":"of engaging in foreign currency transactions varies with such factors as the currencies involved, the","page_number":118,"box":{"x":116,"y":165,"width":743,"height":12}},{"id":"f2137415-88eb-417e-8354-32ee5a8c720f","block_type":"box","text":"length of the contract period and the market conditions then prevailing. Since transactions in foreign","page_number":118,"box":{"x":117,"y":180,"width":744,"height":12}},{"id":"0052b69a-7c0c-4c53-b3c9-9da4c99924a3","block_type":"box","text":"currency exchange usually are conducted on a principal basis, no fees or commissions are involved.","page_number":118,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"54133032-720c-4494-a18d-0551547c258c","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":118,"box":{"x":116,"y":227,"width":765,"height":12}},{"id":"dcacb697-f497-4651-a1d5-cb8900ffc725","block_type":"box","text":"(including receivables for unsettled securities sales), or has committed to purchase or anticipates","page_number":118,"box":{"x":117,"y":242,"width":724,"height":12}},{"id":"8b73216c-cfe9-4e3f-93a2-553d76bfb331","block_type":"box","text":"purchasing, which are denominated in such currency.","page_number":118,"box":{"x":117,"y":258,"width":401,"height":12}},{"id":"415b1d02-7a6c-4861-88b2-294a2edbf309","block_type":"box","text":"Spot Transactions and FX Forwards.","page_number":118,"box":{"x":117,"y":289,"width":271,"height":12}},{"id":"dc1eab87-926b-4062-9364-bdd1e4d2f6c4","block_type":"box","text":"FX forwards are OTC contracts to purchase or sell a specified","page_number":118,"box":{"x":390,"y":289,"width":470,"height":12}},{"id":"662f7be4-1583-438a-b512-3d7e50c8a52e","block_type":"box","text":"amount of a specified currency or multinational currency unit at a specified price and specified future","page_number":118,"box":{"x":116,"y":304,"width":750,"height":12}},{"id":"792a3cc1-a93a-4fa8-b529-3db5225db3e2","block_type":"box","text":"date. Spot foreign exchange transactions are similar but are settled in the current, or “spot”, market. A","page_number":118,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"24d979e8-6625-4d93-9d23-e4d06af34e4e","block_type":"box","text":"Fund will enter into foreign exchange transactions for purposes of hedging either a specific transaction","page_number":118,"box":{"x":117,"y":335,"width":764,"height":12}},{"id":"d5c1244f-83f3-4d68-928d-09ec64d09068","block_type":"box","text":"or a portfolio position, or, with respect to certain Funds, to seek to enhance returns. FX forwards","page_number":118,"box":{"x":116,"y":351,"width":719,"height":12}},{"id":"a843a5d1-d8a3-4046-8ec9-d2eda6c8db48","block_type":"box","text":"involve substantial currency risk, credit risk and liquidity risk. A Fund may enter into a foreign exchange","page_number":118,"box":{"x":117,"y":366,"width":770,"height":12}},{"id":"26399aa4-0e45-4860-9b23-0d186c807928","block_type":"box","text":"transaction for purposes of hedging a specific transaction by, for example, purchasing a currency","page_number":118,"box":{"x":116,"y":382,"width":725,"height":12}},{"id":"f8570bcd-d57c-48f0-a624-e8e6de3d31be","block_type":"box","text":"needed to settle a security transaction or selling a currency in which the Fund has received or","page_number":118,"box":{"x":117,"y":397,"width":699,"height":12}},{"id":"6308c673-2947-4808-ac69-ce9735bde599","block_type":"box","text":"anticipates receiving a dividend or distribution. A Fund may enter into a foreign exchange transaction","page_number":118,"box":{"x":116,"y":413,"width":754,"height":12}},{"id":"a2559d56-980f-45f9-a569-52553aead2d4","block_type":"box","text":"for purposes of hedging a portfolio position by selling forward a currency in which a portfolio position of","page_number":118,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"68fb74fd-bbb6-432a-b961-46ad10e930b3","block_type":"box","text":"the Fund is denominated or by purchasing a currency in which the Fund anticipates acquiring a","page_number":118,"box":{"x":116,"y":444,"width":711,"height":12}},{"id":"43b8bf4d-c45c-47a7-bfd1-536814edd021","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":118,"box":{"x":117,"y":459,"width":767,"height":12}},{"id":"da71a4a6-485e-4c2a-b27c-aa7892974c50","block_type":"box","text":"a Currency Instrument denominated in a currency other than the currency being hedged (a “cross","page_number":118,"box":{"x":116,"y":475,"width":729,"height":12}},{"id":"be805273-544f-4e87-b74d-9ec5fef937bc","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":118,"box":{"x":117,"y":490,"width":680,"height":12}},{"id":"5119d20f-26cd-4cc2-a259-a7d40c2a89a6","block_type":"box","text":"demonstrably high correlation between the currency in which the cross-hedge is denominated and the","page_number":118,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"ef6615bf-b985-48ce-9791-ab838124ad14","block_type":"box","text":"currency being hedged, and (ii) executing a cross-hedge through the currency in which the cross","page_number":118,"box":{"x":116,"y":521,"width":722,"height":12}},{"id":"f5f890e3-377f-4b72-83f5-8c798cf96b7a","block_type":"box","text":"hedge is denominated will be significantly more cost-effective or provide substantially greater liquidity","page_number":118,"box":{"x":117,"y":537,"width":755,"height":12}},{"id":"ee09a303-5bdc-459b-a391-4d618fc351d7","block_type":"box","text":"than executing a similar hedging transaction by means of the currency being hedged.","page_number":118,"box":{"x":116,"y":552,"width":638,"height":12}},{"id":"80a7dee8-7891-4751-b42b-5c8e6433744f","block_type":"box","text":"A Fund may also engage in proxy hedging transactions to reduce the effect of currency fluctuations on","page_number":118,"box":{"x":116,"y":583,"width":765,"height":12}},{"id":"e236a101-bbe3-4c3c-8fa3-9dcd1aae6aaa","block_type":"box","text":"the value of existing or anticipated holdings of portfolio securities. Proxy hedging is often used when","page_number":118,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"d4224e02-9e67-4771-8614-16cd9a77e893","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":118,"box":{"x":116,"y":614,"width":733,"height":12}},{"id":"87c038fb-0def-40b9-b222-447e10d0a2e6","block_type":"box","text":"Proxy hedging entails entering into a forward contract to sell a currency whose changes in value are","page_number":118,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"8897d6cb-4af0-49a4-b606-7bde61d3d8a0","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":118,"box":{"x":116,"y":645,"width":709,"height":12}},{"id":"5ba4f20a-ec15-4a05-9ec0-40eb671b92c2","block_type":"box","text":"securities are, or are expected to be, denominated, and to buy U.S. dollars. Proxy hedging involves","page_number":118,"box":{"x":116,"y":661,"width":736,"height":12}},{"id":"7caada1d-98f1-478f-aa4b-885c8d84d91d","block_type":"box","text":"some of the same risks and considerations as other transactions with similar instruments. Currency","page_number":118,"box":{"x":116,"y":676,"width":737,"height":12}},{"id":"0d462335-c8a0-49de-84ef-6fb5762c1148","block_type":"box","text":"transactions can result in losses to the Fund if the currency being hedged fluctuates in value to a","page_number":118,"box":{"x":116,"y":692,"width":717,"height":12}},{"id":"14470293-9518-4949-83af-a431cf920ce0","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":118,"box":{"x":116,"y":707,"width":742,"height":12}},{"id":"7d4c3054-f069-4c17-8bac-01c2d605d35b","block_type":"box","text":"between various currencies may not be present, including during the particular time that a Fund is","page_number":118,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"b0387c51-50da-45d8-9dd7-1874894000cc","block_type":"box","text":"engaging in proxy hedging.","page_number":118,"box":{"x":116,"y":738,"width":200,"height":12}},{"id":"4d4d4e9c-f9b3-4c2f-bc67-7b318afb7734","block_type":"box","text":"A Fund may also cross-hedge currencies by entering into forward contracts to sell one or more","page_number":118,"box":{"x":116,"y":769,"width":703,"height":12}},{"id":"6544d812-18e6-46ef-ad3e-82deb9e6d98f","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":118,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"ddef8d07-94cd-41b2-961f-e7100b054433","block_type":"box","text":"which the Fund expects to have portfolio exposure. For example, a Fund may hold both Canadian","page_number":118,"box":{"x":116,"y":800,"width":726,"height":12}},{"id":"4c99d85e-fd71-4ff0-8b7a-d3c6f4528361","block_type":"box","text":"government bonds and Japanese government bonds, and the Manager or sub-adviser may believe","page_number":118,"box":{"x":116,"y":816,"width":736,"height":12}},{"id":"40b9c341-2336-4d46-9884-fbbf3978d394","block_type":"box","text":"that Canadian dollars will deteriorate against Japanese yen. The Fund would sell Canadian dollars to","page_number":118,"box":{"x":116,"y":831,"width":754,"height":12}},{"id":"586c2223-b2a7-40b3-a911-21d33ee12cda","block_type":"box","text":"reduce its exposure to that currency and buy Japanese yen. This strategy would be a hedge against a","page_number":118,"box":{"x":117,"y":847,"width":761,"height":12}},{"id":"1927ae8f-d2b8-4cc0-87f7-9e44704b2f6f","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":118,"box":{"x":116,"y":862,"width":758,"height":12}},{"id":"4a9e9961-8255-45cd-a110-2562d6117bbe","block_type":"box","text":"the Japanese yen relative to the U.S. dollar.","page_number":118,"box":{"x":116,"y":878,"width":331,"height":12}},{"id":"7819d2ce-28af-43d9-a645-523bc307e289","block_type":"box","text":"II-31","page_number":118,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"cbff0585-7d56-4d8c-a6e5-2b5c8eb5d7f5","block_type":"box","text":"NM1026U-6030748-118/260","page_number":118,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7dcb4f30-4e61-4142-8a4a-84ecc89e8a87","block_type":"box","text":"Some of the forward non-U.S. currency contracts entered into by the Funds are classified as","page_number":119,"box":{"x":116,"y":87,"width":690,"height":12}},{"id":"bb8f8f1c-f213-4895-b22a-7c65deba280b","block_type":"box","text":"non-deliverable forwards (“NDFs”). NDFs are cash-settled, short-term forward contracts that may be","page_number":119,"box":{"x":117,"y":102,"width":748,"height":13}},{"id":"718353ef-5ff5-4d16-8923-27da2786d236","block_type":"box","text":"thinly traded or are denominated in non-convertible foreign currency, where the profit or loss at the","page_number":119,"box":{"x":116,"y":118,"width":736,"height":12}},{"id":"5645a4fc-5362-410a-89d4-7d3b8313eb84","block_type":"box","text":"time at the settlement date is calculated by taking the difference between the agreed upon exchange","page_number":119,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"0b6dc24d-1838-4c8b-aec4-a8d59880dc91","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":119,"box":{"x":117,"y":149,"width":765,"height":12}},{"id":"51481f47-1886-4b1f-be2c-17b1ed14633d","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":119,"box":{"x":117,"y":165,"width":746,"height":12}},{"id":"fee57b92-67c6-4f2c-b476-87f752c6bfe0","block_type":"box","text":"the prevailing market exchange rate and the agreed upon exchange rate is calculated. The settlement","page_number":119,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"7a6ab01f-0d0e-4860-8d2e-150cf419a316","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":119,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"ae2e39ae-0b34-4ecd-ace5-482087989955","block_type":"box","text":"are commonly quoted for time periods of one month up to two years, and are normally quoted and","page_number":119,"box":{"x":116,"y":211,"width":733,"height":12}},{"id":"0573f7ec-67ed-4469-8754-d342f8d178ca","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":119,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"6886c52d-f7ee-49b8-af92-c918c486062c","block_type":"box","text":"currencies that are not internationally traded.","page_number":119,"box":{"x":116,"y":242,"width":337,"height":12}},{"id":"836bde9b-eea0-4b2b-bc0c-3623a790d82b","block_type":"box","text":"Currency Futures.","page_number":119,"box":{"x":117,"y":273,"width":132,"height":12}},{"id":"e95c8343-eb7b-4555-b389-2304519febd9","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":119,"box":{"x":250,"y":273,"width":626,"height":12}},{"id":"07801a44-fe7d-47f6-b319-bbbfe0d1dfe6","block_type":"box","text":"currency through use of currency futures or options on currency futures. Currency futures are similar to","page_number":119,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"471a05db-0f0a-4921-b4e1-fc6d1fd86c27","block_type":"box","text":"forward foreign exchange transactions except that futures are standardized, exchange-traded contracts","page_number":119,"box":{"x":116,"y":304,"width":772,"height":12}},{"id":"65eec841-7b6d-4cae-91bf-cb7658ff72f0","block_type":"box","text":"while forward foreign exchange transactions are traded in the OTC market. Currency futures involve","page_number":119,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"7eaad64a-2770-4c0e-a618-7b3c3f086ea6","block_type":"box","text":"substantial currency risk as well as the risks discussed above in “— Futures.”","page_number":119,"box":{"x":116,"y":335,"width":578,"height":12}},{"id":"29367f73-fda9-4436-bad7-7adcf849eb95","block_type":"box","text":"Currency Options.","page_number":119,"box":{"x":117,"y":366,"width":133,"height":12}},{"id":"ee7435f3-dcc4-4b30-81fd-5f6392661eb0","block_type":"box","text":"A Fund may seek to enhance returns or hedge against the decline in the value of a","page_number":119,"box":{"x":251,"y":366,"width":626,"height":12}},{"id":"76928b7f-0d76-44d0-9fe5-998abcb1ed1f","block_type":"box","text":"currency through the use of currency options. Certain Funds have fundamental investment restrictions","page_number":119,"box":{"x":116,"y":382,"width":763,"height":12}},{"id":"101d4235-41d5-49d1-b482-a3d659061051","block_type":"box","text":"that permit the purchase of currency options, but prohibit the writing of currency options. Currency","page_number":119,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"74881382-e1ad-45be-99b3-d774d1ca8f57","block_type":"box","text":"options are similar to options on securities. For example, in consideration for an option premium the","page_number":119,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"4bbe5f58-6ddf-4aff-958c-2dfd945dac3c","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":119,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"b490083f-0477-4500-8c30-ac19bd7e931d","block_type":"box","text":"put option) a specified amount of a specified currency on or before the expiration date for a specified","page_number":119,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"67ba0cb9-ea63-40e1-a4d7-6038af14d6c2","block_type":"box","text":"amount of another currency. A Fund may engage in transactions in options on currencies either on","page_number":119,"box":{"x":116,"y":459,"width":737,"height":12}},{"id":"c149b4bd-dbfa-42af-b34f-709092c36932","block_type":"box","text":"exchanges or OTC markets. Such transactions in options may include exotic options on currencies,","page_number":119,"box":{"x":116,"y":475,"width":743,"height":12}},{"id":"34ec1ea3-c758-47e8-8395-4c38ea8adbb5","block_type":"box","text":"which are typically traded in OTC markets and have additional features that result in different payment","page_number":119,"box":{"x":116,"y":490,"width":763,"height":12}},{"id":"4fe92de2-aba7-4463-bf3e-c58ea544edca","block_type":"box","text":"structures and/or expirations. Where a Fund is permitted to write currency options, it may write covered","page_number":119,"box":{"x":116,"y":506,"width":771,"height":12}},{"id":"9baa7775-3e8f-40b5-8508-2776e57d300c","block_type":"box","text":"call options on up to 100% of the currencies in its portfolio. See “— Options” above. Currency options","page_number":119,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"4e2f7ba5-1d18-43ed-9682-6b610d705265","block_type":"box","text":"involve substantial currency risk, and may also involve credit, leverage or illiquidity risk.","page_number":119,"box":{"x":117,"y":537,"width":651,"height":12}},{"id":"afcffb2a-f37a-4e9b-958b-8d9200c3314f","block_type":"box","text":"Currency Swaps.","page_number":119,"box":{"x":117,"y":568,"width":131,"height":12}},{"id":"65a7e47a-95eb-4eea-8a60-00dfd27a963f","block_type":"box","text":"A Fund may enter into currency swaps in order to protect against currency","page_number":119,"box":{"x":248,"y":568,"width":557,"height":12}},{"id":"dcef9f0d-1bdc-4897-9dd1-f250007c3a02","block_type":"box","text":"fluctuations or to hedge portfolio positions. Currency swaps are transactions in which one currency is","page_number":119,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"5ffd5b83-b2db-4b7b-ae10-3b3715d042e1","block_type":"box","text":"simultaneously bought for a second currency on a spot basis and sold for the second currency on a","page_number":119,"box":{"x":116,"y":599,"width":743,"height":12}},{"id":"5b1205a9-dc51-4b1c-a0cf-04f0dc4522f9","block_type":"box","text":"forward basis. Currency swaps involve the exchange of the rights of a Fund and another party to make","page_number":119,"box":{"x":116,"y":614,"width":767,"height":12}},{"id":"50dbac70-95cf-4a45-9539-bf4b6f12f82b","block_type":"box","text":"or receive payments in specified currencies, and typically require the delivery of the entire principal","page_number":119,"box":{"x":116,"y":630,"width":738,"height":12}},{"id":"b2677ee0-e4da-4ae5-9a58-842ed0accf96","block_type":"box","text":"value of one designated currency in exchange for the other designated currency. As a result, the entire","page_number":119,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"e56d24f5-a915-4abb-aa77-617ae958cd83","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":119,"box":{"x":117,"y":661,"width":747,"height":12}},{"id":"6e1b8dc4-5f96-4d76-a503-909d648fc168","block_type":"box","text":"its contractual delivery obligations.","page_number":119,"box":{"x":117,"y":676,"width":254,"height":12}},{"id":"6e4e55fc-a0dc-4082-ab03-e8f0eecb758f","block_type":"box","text":"Distressed Securities.","page_number":119,"box":{"x":116,"y":707,"width":174,"height":10}},{"id":"3b91dfd0-afce-4fff-b166-b4b2aa065078","block_type":"box","text":"A Fund may invest in securities, including loans purchased in the secondary","page_number":119,"box":{"x":296,"y":707,"width":565,"height":12}},{"id":"8f45543c-0004-4906-9bce-d11d2eef953e","block_type":"box","text":"market, that are the subject of bankruptcy proceedings or otherwise in default or in risk of being in","page_number":119,"box":{"x":117,"y":723,"width":724,"height":12}},{"id":"38970c2a-88e4-4966-840b-a654799b2b0f","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":119,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"09f17ec7-a042-485e-ad00-437da7151463","block_type":"box","text":"rated in the lower rating categories by one or more nationally recognized statistical rating organizations","page_number":119,"box":{"x":117,"y":754,"width":762,"height":12}},{"id":"4d6b9f92-6dc8-4cd1-b0e2-59f9e694ae2e","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":119,"box":{"x":117,"y":769,"width":709,"height":12}},{"id":"76859c7e-1f53-4c4a-8048-0b3974fe3c7c","block_type":"box","text":"judgment of the Manager of equivalent quality (“Distressed Securities”). Investment in Distressed","page_number":119,"box":{"x":115,"y":785,"width":719,"height":12}},{"id":"fdcfe823-f2ca-40b1-bc4d-23fb3448928c","block_type":"box","text":"Securities is speculative and involves significant risks.","page_number":119,"box":{"x":116,"y":800,"width":399,"height":12}},{"id":"dc28d24b-af7a-42f4-971b-abf8f439c0e7","block_type":"box","text":"A Fund will generally make such investments only when the Manager believes it is reasonably likely","page_number":119,"box":{"x":116,"y":831,"width":745,"height":12}},{"id":"8a103d92-41fa-46e8-bb63-5d6586ee416c","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":119,"box":{"x":116,"y":847,"width":760,"height":12}},{"id":"25faf0cc-5b66-4d37-848d-c431b99bfac3","block_type":"box","text":"of reorganization pursuant to which the Fund will receive new securities in return for the Distressed","page_number":119,"box":{"x":116,"y":862,"width":739,"height":12}},{"id":"82526fca-9481-42ef-ae46-284f01df6b13","block_type":"box","text":"Securities. However, there can be no assurance that such an exchange offer will be made or that such","page_number":119,"box":{"x":116,"y":878,"width":766,"height":12}},{"id":"22958b0b-a296-42ee-b65f-1d99eb414464","block_type":"box","text":"II-32","page_number":119,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"40405fce-8f05-49b9-937c-d46f0f5fb59d","block_type":"box","text":"NM1026U-6030748-119/260","page_number":119,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ea725ed8-f1d8-4594-b1d3-a44183609379","block_type":"box","text":"a plan of reorganization will be adopted. In addition, a significant period of time may pass between the","page_number":120,"box":{"x":116,"y":87,"width":762,"height":12}},{"id":"6332fb78-b6e8-43aa-b01b-924f5ea6f246","block_type":"box","text":"time at which a Fund makes its investment in Distressed Securities and the time that any such","page_number":120,"box":{"x":116,"y":102,"width":704,"height":13}},{"id":"2bc8bae2-0aaf-43bc-8892-a65a5bf9c6c7","block_type":"box","text":"exchange offer or plan of reorganization is completed. During this period, it is unlikely that a Fund will","page_number":120,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"6b8dc9cd-a701-4f9d-a9b7-fa2ae4069d2c","block_type":"box","text":"receive any interest payments on the Distressed Securities, the Fund will be subject to significant","page_number":120,"box":{"x":117,"y":134,"width":725,"height":12}},{"id":"fccc6b3b-0917-4e0f-b765-37d4786e435a","block_type":"box","text":"uncertainty as to whether or not the exchange offer or plan of reorganization will be completed and the","page_number":120,"box":{"x":117,"y":149,"width":764,"height":12}},{"id":"995cb717-2cda-4192-a804-1fbebb282781","block_type":"box","text":"Fund may be required to bear certain extraordinary expenses to protect and recover its investment.","page_number":120,"box":{"x":117,"y":165,"width":741,"height":12}},{"id":"7776d8f2-7e5e-4134-98eb-75c1efcbaf7a","block_type":"box","text":"Therefore, to the extent the Fund seeks capital appreciation through investment in distressed","page_number":120,"box":{"x":116,"y":180,"width":696,"height":12}},{"id":"6027d541-f7a6-4b57-a5ab-576112497267","block_type":"box","text":"securities, the Fund’s ability to achieve current income for its shareholders may be diminished. The","page_number":120,"box":{"x":116,"y":196,"width":740,"height":12}},{"id":"d7a07d8b-46a6-466a-8a74-dbdd35aa45ab","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":120,"box":{"x":117,"y":211,"width":753,"height":12}},{"id":"eddc6080-42e8-4e3a-b330-19151a533354","block_type":"box","text":"the obligations evidenced by the distressed securities will eventually be satisfied (","page_number":120,"box":{"x":116,"y":227,"width":605,"height":12}},{"id":"1b27f1a7-39e5-4cc7-8c38-e4a66e63e022","block_type":"box","text":"e.g.","page_number":120,"box":{"x":723,"y":229,"width":25,"height":10}},{"id":"4821df47-440e-4272-a0ef-50cad2f6d494","block_type":"box","text":", through a","page_number":120,"box":{"x":751,"y":227,"width":84,"height":12}},{"id":"bcdf19f3-b472-49f5-bb44-a1cecf427ed5","block_type":"box","text":"liquidation of the obligor’s assets, an exchange offer or plan of reorganization involving the distressed","page_number":120,"box":{"x":117,"y":242,"width":756,"height":12}},{"id":"a350829d-d453-4ea2-b5cd-f0b5d9aa3550","block_type":"box","text":"securities or a payment of some amount in satisfaction of the obligation). Even if an exchange offer is","page_number":120,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"ec0cc237-5068-4bfa-9360-b1dc4c40407f","block_type":"box","text":"made or plan of reorganization is adopted with respect to Distressed Securities held by a Fund, there","page_number":120,"box":{"x":117,"y":273,"width":754,"height":12}},{"id":"077aada4-e66e-4b2c-a87d-8f4942b79153","block_type":"box","text":"can be no assurance that the securities or other assets received by a Fund in connection with such","page_number":120,"box":{"x":116,"y":289,"width":740,"height":12}},{"id":"f203a34c-b7c6-4d19-a85a-5f8bf5a410e1","block_type":"box","text":"exchange offer or plan of reorganization will not have a lower value or income potential than may have","page_number":120,"box":{"x":116,"y":304,"width":765,"height":12}},{"id":"4238a957-6726-4822-bee3-6925f88ab0c9","block_type":"box","text":"been anticipated when the investment was made or no value. Moreover, any securities received by a","page_number":120,"box":{"x":117,"y":320,"width":753,"height":12}},{"id":"db021a67-eafa-4004-a0bf-77958bd5f28b","block_type":"box","text":"Fund upon completion of an exchange offer or plan of reorganization may be restricted as to resale.","page_number":120,"box":{"x":117,"y":335,"width":745,"height":12}},{"id":"d6f83600-6cd6-44e3-9fc7-058ab468ac9d","block_type":"box","text":"Similarly, if a Fund participates in negotiations with respect to any exchange offer or plan of","page_number":120,"box":{"x":116,"y":351,"width":683,"height":12}},{"id":"31adf459-40f1-4989-bc9d-9264a2a2a7d4","block_type":"box","text":"reorganization with respect to an issuer of Distressed Securities, the Fund may be restricted from","page_number":120,"box":{"x":117,"y":366,"width":726,"height":12}},{"id":"09072dad-7ca8-4145-8a11-22a83353aed9","block_type":"box","text":"disposing of such securities. To the extent that a Fund becomes involved in such proceedings, the","page_number":120,"box":{"x":116,"y":382,"width":734,"height":12}},{"id":"09158cb1-e84f-4b5d-8deb-450f03cd343b","block_type":"box","text":"Fund may have a more active participation in the affairs of the issuer than that assumed generally by","page_number":120,"box":{"x":117,"y":397,"width":752,"height":12}},{"id":"5f08bcaf-70ad-4e22-a8eb-c255b8d648b1","block_type":"box","text":"an investor. The Fund, however, will not make investments for the purpose of exercising day-to-day","page_number":120,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"8f5b594e-c6bb-4d0b-9a25-b88f8bcb1fc2","block_type":"box","text":"management of any issuer’s affairs.","page_number":120,"box":{"x":117,"y":428,"width":269,"height":12}},{"id":"4f35854b-8aeb-41b4-b1b6-82ece5c6cc12","block_type":"box","text":"Environmental, Social and Governance (“ESG”) Integration.","page_number":120,"box":{"x":116,"y":459,"width":476,"height":12}},{"id":"530ee178-ac4e-4e81-b66e-af38b4ebea48","block_type":"box","text":"Although a Fund does not seek to","page_number":120,"box":{"x":593,"y":459,"width":261,"height":12}},{"id":"511ac753-9a8c-4337-87df-7b4489b433a3","block_type":"box","text":"implement a specific sustainability objective, strategy or process unless disclosed in its Prospectus,","page_number":120,"box":{"x":117,"y":475,"width":741,"height":12}},{"id":"c3686bd3-7b7f-49e3-ab53-70e0e355b7b4","block_type":"box","text":"Fund management will consider ESG factors as part of the investment process for the Fund. Fund","page_number":120,"box":{"x":117,"y":490,"width":733,"height":12}},{"id":"88fcd8f0-2476-4aa8-8ceb-a578a664ddf7","block_type":"box","text":"management views ESG integration as the practice of incorporating financially material ESG data or","page_number":120,"box":{"x":117,"y":506,"width":747,"height":12}},{"id":"77d00877-bcb4-4431-9fed-e5ed9f4fec4d","block_type":"box","text":"information into investment processes with the objective of enhancing risk-adjusted returns. These","page_number":120,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"2546c53e-3c1e-4e9f-8c0f-fd5f1de1de24","block_type":"box","text":"ESG considerations will vary depending on a Fund’s particular investment strategies and may include","page_number":120,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"8c848bf3-adbf-42cb-a5b9-cdf9e0445755","block_type":"box","text":"consideration of third-party research as well as consideration of proprietary BlackRock research across","page_number":120,"box":{"x":116,"y":552,"width":770,"height":12}},{"id":"66c5cc94-e2df-46d9-b170-f474da022f0d","block_type":"box","text":"the ESG risks and opportunities regarding an issuer. The ESG characteristics utilized in a Fund’s","page_number":120,"box":{"x":116,"y":568,"width":725,"height":12}},{"id":"2371f301-9859-4ce4-88b1-3d4157511293","block_type":"box","text":"investment process are anticipated to evolve over time and one or more characteristics may not be","page_number":120,"box":{"x":117,"y":583,"width":738,"height":12}},{"id":"bd9db4ed-89a6-4f20-a6b5-564a4885ae90","block_type":"box","text":"relevant with respect to all issuers that are eligible for investment.","page_number":120,"box":{"x":117,"y":599,"width":490,"height":12}},{"id":"e9084ed3-a57e-439b-a242-c18df1aae5c4","block_type":"box","text":"Certain of these considerations may affect a Fund’s exposure to certain companies or industries. 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Stock markets are volatile. The price of equity securities will fluctuate and can","page_number":120,"box":{"x":116,"y":738,"width":759,"height":12}},{"id":"c60cb014-8e09-44bc-86de-f04c6e2a1626","block_type":"box","text":"decline and reduce the value of a portfolio investing in equities. The price of equity securities fluctuates","page_number":120,"box":{"x":116,"y":754,"width":763,"height":12}},{"id":"4800b90f-9296-48bc-8533-6a65bcf8e361","block_type":"box","text":"based on changes in a company’s financial condition and overall market and economic conditions. The","page_number":120,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"f5eb9d21-e0a8-4764-be7b-44f23b5d807c","block_type":"box","text":"value of equity securities purchased by the Fund could decline if the financial condition of the","page_number":120,"box":{"x":116,"y":785,"width":689,"height":12}},{"id":"6d783e62-ccb5-4727-8866-99080c1204a1","block_type":"box","text":"companies the Fund invests in decline or if overall market and economic conditions deteriorate. They","page_number":120,"box":{"x":116,"y":800,"width":750,"height":12}},{"id":"053026be-e048-4931-b9d3-b4742ecb9d6c","block_type":"box","text":"may also decline due to factors that affect a particular industry or industries, such as labor shortages or","page_number":120,"box":{"x":117,"y":816,"width":766,"height":12}},{"id":"dda7c0df-78f0-4c5b-8261-8eddfde71152","block_type":"box","text":"increase in production costs and competitive conditions within an industry. In addition, they may","page_number":120,"box":{"x":117,"y":831,"width":714,"height":12}},{"id":"babea952-4fb8-4629-8309-6bdcd7b55185","block_type":"box","text":"decline due to general market conditions that are not specifically related to a company or industry,","page_number":120,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"d88b7bf5-bfed-4413-908b-082990415fd8","block_type":"box","text":"such as real or perceived adverse economic conditions, changes in the general outlook for corporate","page_number":120,"box":{"x":116,"y":862,"width":753,"height":12}},{"id":"1364b7da-0d2b-46c6-9481-cc3d80490387","block_type":"box","text":"earnings, changes in interest or currency rates or generally adverse investor sentiment.","page_number":120,"box":{"x":116,"y":878,"width":654,"height":12}},{"id":"53369b35-7acb-425e-86ac-6057a1ac956d","block_type":"box","text":"II-33","page_number":120,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1cabe68d-76a5-4e41-a02a-1b392badf69f","block_type":"box","text":"NM1026U-6030748-120/260","page_number":120,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1e7a2666-ee8d-424c-9064-0ec8fa8d9bc2","block_type":"box","text":"From time to time certain of the Funds may invest in","page_number":121,"box":{"x":117,"y":87,"width":368,"height":12}},{"id":"57e3fbe3-f8d9-412a-a332-4537176e0cc9","block_type":"box","text":"shares of companies through initial public offerings","page_number":121,"box":{"x":486,"y":87,"width":369,"height":12}},{"id":"05708a1a-36bb-451e-84ff-2e691026f92b","block_type":"box","text":"(“IPOs”). IPOs have the potential to produce, and have in fact produced, substantial gains for certain Funds.","page_number":121,"box":{"x":117,"y":102,"width":769,"height":13}},{"id":"4e82ce03-5809-4431-a799-79b09856b024","block_type":"box","text":"There is no assurance that any Fund will have continued a","page_number":121,"box":{"x":116,"y":118,"width":415,"height":12}},{"id":"0bffa3f5-f5f4-4f32-8ab3-46705ac1bb61","block_type":"box","text":"ccess to profitable IPOs and therefore investors","page_number":121,"box":{"x":532,"y":118,"width":343,"height":12}},{"id":"46c3c3b0-c48d-431e-b538-658a78224b7c","block_type":"box","text":"should not rely on these past gains as an indication of future performance. The investment performance of","page_number":121,"box":{"x":116,"y":134,"width":759,"height":12}},{"id":"3fc08696-7991-4fda-9ede-9ac94151a050","block_type":"box","text":"a Fund during periods when it is unable to invest signifi","page_number":121,"box":{"x":116,"y":149,"width":389,"height":12}},{"id":"bb055121-e132-4833-97e9-0a1b86ea89d8","block_type":"box","text":"cantly or at all in IPOs may be lower than during","page_number":121,"box":{"x":506,"y":149,"width":345,"height":12}},{"id":"eabfdd51-3a77-4b0e-bc49-353e103caddb","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":121,"box":{"x":117,"y":165,"width":694,"height":11}},{"id":"877a1150-236e-408b-adcf-d3bacfb882c0","block_type":"box","text":"performance will generally decrease. Securities issued in IPOs are subject to many of the same risks as","page_number":121,"box":{"x":117,"y":180,"width":741,"height":12}},{"id":"333846eb-2a7c-4685-90c7-be9dc491bc51","block_type":"box","text":"investing in companies with smaller market capita","page_number":121,"box":{"x":117,"y":196,"width":351,"height":12}},{"id":"398a129b-26e9-40ff-b743-fb8f1ac3ba7d","block_type":"box","text":"lizations. Securities issued in IPOs have no trading","page_number":121,"box":{"x":470,"y":196,"width":364,"height":12}},{"id":"0eb107b3-3280-457a-9db6-95bae745a03b","block_type":"box","text":"history, and information about the companies may be av","page_number":121,"box":{"x":117,"y":211,"width":399,"height":12}},{"id":"f75f2add-bcc5-44fe-9188-8772fd82190a","block_type":"box","text":"ailable for very limited periods. In addition, the","page_number":121,"box":{"x":516,"y":211,"width":330,"height":12}},{"id":"46ca09ae-ea74-4b24-8d28-09b7e9738e25","block_type":"box","text":"prices of securities sold in IPOs may be highly volatile","page_number":121,"box":{"x":117,"y":227,"width":380,"height":12}},{"id":"d33678c7-0df0-44f3-a9f6-3ab9fba4f8e9","block_type":"box","text":"or may decline shortly after the initial public offering.","page_number":121,"box":{"x":497,"y":227,"width":377,"height":12}},{"id":"27a32400-857e-4f04-84fd-91ae34c11ecf","block_type":"box","text":"The Funds may invest in companies that have relatively small market capitalizations. These","page_number":121,"box":{"x":116,"y":258,"width":685,"height":12}},{"id":"023607b4-e398-4e0a-a1bd-61261398725c","block_type":"box","text":"organizations will normally have more limited product lines, markets and financial resources and will be","page_number":121,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"c52af275-4833-4288-9c60-fafc0680c98e","block_type":"box","text":"dependent upon a more limited management group than larger capitalized companies. In addition, it is","page_number":121,"box":{"x":116,"y":289,"width":764,"height":12}},{"id":"91dde7b4-f0f5-4329-8586-d9f36af23947","block_type":"box","text":"more difficult to get information on smaller companies, which tend to be less well known, have shorter","page_number":121,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"e9678a25-030a-467c-8393-4ded0129de22","block_type":"box","text":"operating histories, do not have significant ownership by large investors and are followed by relatively","page_number":121,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"f57c1c6f-5aa4-4897-bdb6-9c172e13b72d","block_type":"box","text":"few securities analysts. The securities of smaller capitalized companies are often traded in the OTC","page_number":121,"box":{"x":116,"y":335,"width":744,"height":12}},{"id":"e54c8a60-f102-42bd-bef2-221dc4d67b14","block_type":"box","text":"markets and may have fewer market makers and wider price spreads. This may result in greater price","page_number":121,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"c43d9c6d-c619-4e53-898a-732be45d6096","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":121,"box":{"x":117,"y":366,"width":743,"height":12}},{"id":"20155b16-3bcc-4850-bcf6-f942ed4db7f7","block_type":"box","text":"more established companies.","page_number":121,"box":{"x":117,"y":382,"width":222,"height":12}},{"id":"c452236f-6e23-4a8d-9aaa-3d179a098105","block_type":"box","text":"For a discussion of the types of equity securities in which your Fund may invest and the risks","page_number":121,"box":{"x":117,"y":413,"width":693,"height":12}},{"id":"77653630-f84d-42de-a5db-b1b58f885f5c","block_type":"box","text":"associated with investing in such equity securities, see your Fund’s Prospectus. Certain of the Funds","page_number":121,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"16f190ca-d8ad-4b87-ba19-5165bc175644","block_type":"box","text":"may also invest in shares of private companies, which are subject to the risks of “Illiquid Investments”","page_number":121,"box":{"x":117,"y":444,"width":756,"height":12}},{"id":"8b927cf6-08c0-472d-a20c-42bd025de965","block_type":"box","text":"and “Restricted Securities” described below.","page_number":121,"box":{"x":116,"y":459,"width":334,"height":10}},{"id":"d92b2089-a3fd-4077-a47c-ca55ebb49e7c","block_type":"box","text":"Real Estate-Related Securities.","page_number":121,"box":{"x":116,"y":490,"width":232,"height":10}},{"id":"fa705e7d-f164-4813-8818-b68c6c4047d3","block_type":"box","text":"Although no Fund may invest directly in real estate, certain Funds may","page_number":121,"box":{"x":349,"y":490,"width":535,"height":12}},{"id":"7d56b263-28cf-4562-9d9e-4bc1290bfe63","block_type":"box","text":"invest in equity securities of issuers that are principally engaged in the real estate industry. Such","page_number":121,"box":{"x":117,"y":506,"width":719,"height":12}},{"id":"5538ca28-3db0-4282-9047-2987010c657f","block_type":"box","text":"investments are subject to certain risks associated with the ownership of real estate and with the real","page_number":121,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"1e068885-5b6f-4779-8b87-4c307c76661c","block_type":"box","text":"estate industry in general. These risks include, among others: possible declines in the value of real","page_number":121,"box":{"x":116,"y":537,"width":738,"height":12}},{"id":"35fb5cd4-6aa4-453d-a59c-33bee0fbad95","block_type":"box","text":"estate; risks related to general and local economic conditions; possible lack of availability of mortgage","page_number":121,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"d6a45cdc-09df-47a6-81a0-7e4cc8b43c95","block_type":"box","text":"funds or other limitations on access to capital; overbuilding; risks associated with leverage; market","page_number":121,"box":{"x":116,"y":568,"width":734,"height":12}},{"id":"0d0e9ee3-b3f3-4d5b-8850-0e9d7522670e","block_type":"box","text":"illiquidity; extended vacancies of properties; increase in competition, property taxes, capital","page_number":121,"box":{"x":117,"y":583,"width":679,"height":12}},{"id":"cf637059-8f79-4f2c-837e-c0a83f11cb78","block_type":"box","text":"expenditures and operating expenses; changes in zoning laws or other governmental regulation; costs","page_number":121,"box":{"x":116,"y":599,"width":765,"height":12}},{"id":"8ab6622b-a7b6-4e16-9a0c-6f56ad127a10","block_type":"box","text":"resulting from the clean-up of, and liability to third parties for damages resulting from, environmental","page_number":121,"box":{"x":117,"y":614,"width":746,"height":12}},{"id":"0255dadb-07b8-4074-a7d1-227cb77ea053","block_type":"box","text":"problems; tenant bankruptcies or other credit problems; casualty or condemnation losses; uninsured","page_number":121,"box":{"x":117,"y":630,"width":748,"height":12}},{"id":"5960ca03-2f49-4970-a79d-01d7ff00405e","block_type":"box","text":"damages from floods, earthquakes or other natural disasters; limitations on and variations in rents,","page_number":121,"box":{"x":116,"y":645,"width":736,"height":12}},{"id":"763a501b-fc60-4e88-b853-c945435972f5","block_type":"box","text":"including decreases in market rates for rents; investment in developments that are not completed or","page_number":121,"box":{"x":117,"y":661,"width":740,"height":12}},{"id":"f05b4070-be23-460e-9900-fe09b5eae60e","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":122,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"fca975ee-7a90-46a9-93c1-29b0ce56ae8b","block_type":"box","text":"erratic market movements than larger, more established companies or the market average in general.","page_number":122,"box":{"x":116,"y":103,"width":761,"height":12}},{"id":"00ec0ab9-1af9-4225-a2a5-c3d3188971c2","block_type":"box","text":"These companies may have limited product lines, markets or financial resources, or they may be","page_number":122,"box":{"x":116,"y":118,"width":723,"height":12}},{"id":"3de62ab3-df54-45ab-b549-79d59f00a73d","block_type":"box","text":"dependent on a limited management group.","page_number":122,"box":{"x":116,"y":134,"width":330,"height":12}},{"id":"afe5e66a-5752-4190-958e-09b56af4d481","block_type":"box","text":"Investments in smaller or emerging growth companies may involve greater risks and thus may be","page_number":122,"box":{"x":117,"y":163,"width":771,"height":12}},{"id":"a8f15376-0ccc-41ca-be53-4ca5beec9e2c","block_type":"box","text":"considered speculative. Full development of these companies and trends frequently takes time.","page_number":122,"box":{"x":116,"y":178,"width":713,"height":12}},{"id":"658bbb37-b389-450a-9c1c-fb2107a6de95","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":122,"box":{"x":116,"y":207,"width":762,"height":12}},{"id":"24ea950a-8efd-4113-acb2-cdf3e2c5ac43","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":122,"box":{"x":116,"y":223,"width":757,"height":12}},{"id":"985b698f-ab5f-49aa-8cce-978270c0ff96","block_type":"box","text":"securities exchange. As a result, the disposition by a Fund of portfolio securities to meet redemptions","page_number":122,"box":{"x":116,"y":238,"width":756,"height":12}},{"id":"5b5b555d-5339-4493-b6b0-6e6262fd2435","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":122,"box":{"x":116,"y":254,"width":749,"height":12}},{"id":"d7ce1f31-e6d7-4828-950f-306be0669094","block_type":"box","text":"these securities at a discount from market prices or during periods when, in Fund management’s","page_number":122,"box":{"x":116,"y":269,"width":722,"height":12}},{"id":"6f7474e9-2a8c-45ca-9295-d3b4a9c2e710","block_type":"box","text":"judgment, such disposition is not desirable.","page_number":122,"box":{"x":115,"y":285,"width":326,"height":12}},{"id":"50c92338-97ed-4db3-9d68-be4857189361","block_type":"box","text":"The process of selection and continuous supervision by Fund management does not guarantee","page_number":122,"box":{"x":116,"y":314,"width":714,"height":12}},{"id":"005603b3-b90b-4799-9b13-e25487bf5b19","block_type":"box","text":"successful investment results. Careful initial selection is particularly important in this area as many new","page_number":122,"box":{"x":116,"y":329,"width":770,"height":12}},{"id":"60b2a102-2ed2-45a6-9717-f198f2d980d6","block_type":"box","text":"enterprises have promise but lack certain of the fundamental factors necessary to prosper. Investing in","page_number":122,"box":{"x":116,"y":345,"width":767,"height":12}},{"id":"ca7be7d8-84bb-4ad3-9812-8348f69aa69e","block_type":"box","text":"small cap and emerging growth companies requires specialized research and analysis.","page_number":122,"box":{"x":116,"y":360,"width":651,"height":12}},{"id":"3b4292a9-3776-4ebd-964c-24e0286aabfc","block_type":"box","text":"Fund management believes that relatively small companies may have the opportunity to develop into","page_number":122,"box":{"x":117,"y":389,"width":753,"height":12}},{"id":"5d0e15ae-e263-4880-8a20-1f5e9ba8ed91","block_type":"box","text":"significant business enterprises. A Fund may invest in securities of small issuers in the relatively early","page_number":122,"box":{"x":116,"y":405,"width":759,"height":12}},{"id":"771bfc53-b634-43c6-ba5c-34855e0c8d83","block_type":"box","text":"stages of business development that have a new technology, a unique or proprietary product or","page_number":122,"box":{"x":116,"y":420,"width":714,"height":12}},{"id":"8fd92f8a-c96b-4db3-811b-4a119b9a3a8f","block_type":"box","text":"service, or a favorable market position.","page_number":122,"box":{"x":116,"y":436,"width":294,"height":12}},{"id":"803c9f41-ac79-4f56-8402-b0e009e6f911","block_type":"box","text":"Equity securities of specific small cap issuers may present different opportunities for long-term capital","page_number":122,"box":{"x":117,"y":465,"width":757,"height":12}},{"id":"de67e129-513c-4cbe-925a-6f5ac71e2f71","block_type":"box","text":"appreciation during varying portions of economic or securities market cycles, as well as during varying","page_number":122,"box":{"x":116,"y":480,"width":763,"height":13}},{"id":"bcdc9b22-3cd2-40dd-b17b-5f773768c58e","block_type":"box","text":"stages of their business development. The market valuation of small cap issuers tends to fluctuate","page_number":122,"box":{"x":116,"y":496,"width":734,"height":12}},{"id":"d43d58fe-6d8e-4042-babc-40b91da7dd1c","block_type":"box","text":"during economic or market cycles.","page_number":122,"box":{"x":116,"y":512,"width":260,"height":12}},{"id":"42d8f001-ab5f-4093-b569-79f3443796c9","block_type":"box","text":"Tracking Stocks","page_number":122,"box":{"x":118,"y":540,"width":117,"height":13}},{"id":"a81694ce-62d4-4456-9eb8-a28cc55dbc27","block_type":"box","text":". A tracking stock is a separate class of common stock whose value is linked to a","page_number":122,"box":{"x":237,"y":540,"width":604,"height":13}},{"id":"aef51be5-2b4d-4390-9d93-27dc2d380122","block_type":"box","text":"specific business unit or operating division within a larger company and is designed to “track” the","page_number":122,"box":{"x":116,"y":556,"width":723,"height":12}},{"id":"4baafb47-552d-49ca-8f6c-025778659c04","block_type":"box","text":"performance of such business unit or division. The tracking stock may pay dividends to shareholders","page_number":122,"box":{"x":117,"y":571,"width":751,"height":13}},{"id":"e1249dbc-ce93-4993-864b-52c4d424990b","block_type":"box","text":"independent of the parent company. The parent company, rather than the business unit or division,","page_number":122,"box":{"x":117,"y":587,"width":739,"height":12}},{"id":"511b5c2c-62d2-4535-8ac2-3cc09b57b02c","block_type":"box","text":"generally is the issuer of tracking stock. However, holders of the tracking stock may not have the same","page_number":122,"box":{"x":116,"y":602,"width":768,"height":13}},{"id":"0e32f396-0187-46d3-8264-e4bafbaccc17","block_type":"box","text":"rights as holders of the company’s common stock.","page_number":122,"box":{"x":117,"y":618,"width":377,"height":12}},{"id":"03553c4e-87ea-407c-af07-e7da10541f36","block_type":"box","text":"Exchange-Traded Notes (“ETNs”).","page_number":122,"box":{"x":116,"y":647,"width":271,"height":12}},{"id":"79df1ed7-248a-4876-8c4f-41d4ad130d61","block_type":"box","text":"Certain Funds may invest in ETNs. ETNs are generally notes","page_number":122,"box":{"x":389,"y":647,"width":464,"height":12}},{"id":"82fb8713-8d6f-4de6-8e08-ec8a53437de3","block_type":"box","text":"representing debt of the issuer, usually a financial institution. ETNs combine aspects of both bonds and","page_number":122,"box":{"x":117,"y":663,"width":765,"height":12}},{"id":"6a98a9de-d12e-4c27-a794-e5d4b598a523","block_type":"box","text":"ETFs. An ETN’s returns are based on the performance of one or more underlying assets, reference","page_number":122,"box":{"x":117,"y":678,"width":737,"height":12}},{"id":"5e9e1ec8-5894-43bb-aedf-65791a964d4f","block_type":"box","text":"rates or indexes, minus fees and expenses. Similar to ETFs, ETNs are listed on an exchange and","page_number":122,"box":{"x":117,"y":694,"width":724,"height":12}},{"id":"afcf2048-1f70-44b8-acbd-d960a6600600","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":122,"box":{"x":116,"y":709,"width":761,"height":12}},{"id":"68a97b1a-5bbb-4ca1-86a0-5201c483ac77","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":122,"box":{"x":116,"y":725,"width":748,"height":12}},{"id":"7e4fec6e-6af1-411f-aa34-fafa182942d5","block_type":"box","text":"(“reference instrument”) to which the ETN is linked minus certain fees. Unlike regular bonds, ETNs do","page_number":122,"box":{"x":117,"y":740,"width":753,"height":12}},{"id":"91ffe439-6d90-4475-ad0f-af2800b32445","block_type":"box","text":"not make periodic interest payments, and principal is not protected.","page_number":122,"box":{"x":117,"y":756,"width":497,"height":12}},{"id":"53105a5d-7996-402d-99ea-03e9a4dc1053","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":122,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"4857b5b1-7366-4592-9b67-c369bfddcda2","block_type":"box","text":"demand for the ETN, volatility and lack of liquidity in underlying markets, changes in the applicable","page_number":122,"box":{"x":116,"y":800,"width":731,"height":12}},{"id":"fc999656-16a9-44e9-8d12-4fe9960c6b03","block_type":"box","text":"interest rates, the performance of the reference instrument, changes in the issuer’s credit rating and","page_number":122,"box":{"x":117,"y":816,"width":739,"height":12}},{"id":"59b85170-d98c-46a7-844e-67bbefa6d1ea","block_type":"box","text":"economic, legal, political or geographic events that affect the reference instrument. ETNs are subject to","page_number":122,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"4608af40-d3f8-472c-978e-de2fdb38df83","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":122,"box":{"x":116,"y":847,"width":755,"height":12}},{"id":"dfd9b8a8-598c-433d-86ef-088a772b6368","block_type":"box","text":"the underlying reference instrument remaining unchanged. When a Fund invests in ETNs, it will bear","page_number":122,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"82fe8316-232b-4b60-b3c5-9b52260cdb0b","block_type":"box","text":"its proportionate share of any fees and expenses borne by the ETN.","page_number":122,"box":{"x":117,"y":878,"width":509,"height":12}},{"id":"91626730-7d86-4dde-8419-20cf51ea1033","block_type":"box","text":"II-35","page_number":122,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d31e2cb3-343a-44ab-bc69-8aaf118668e1","block_type":"box","text":"NM1026U-6030748-122/260","page_number":122,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"199de953-2738-4629-8b2d-5f05bff9ec02","block_type":"box","text":"An ETN that is tied to a reference instrument may not replicate the performance of the reference","page_number":123,"box":{"x":116,"y":87,"width":720,"height":12}},{"id":"1a5b0caf-006c-4322-b1c6-9e26de713a77","block_type":"box","text":"instrument. ETNs also incur certain expenses not incurred by their applicable reference instrument.","page_number":123,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"f3b00b2e-c800-4685-b7c0-bbe14a8546f5","block_type":"box","text":"Some ETNs that use leverage may, at times, be illiquid and","page_number":123,"box":{"x":116,"y":118,"width":446,"height":12}},{"id":"bc9d9d0d-957e-4283-a3f0-f038d4d7cdd7","block_type":"box","text":"may be difficult to purchase or sell at a fair","page_number":123,"box":{"x":563,"y":118,"width":319,"height":12}},{"id":"96a43774-9c73-4939-9976-1e979e4a5cb1","block_type":"box","text":"price. Levered ETNs are subject to the same risk as other instruments that use leverage in any form.","page_number":123,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"2000e870-f637-4855-8e9f-fb2d46b84e04","block_type":"box","text":"While leverage allows for greater potential return, the potential for loss is also greater. Finally,","page_number":123,"box":{"x":116,"y":149,"width":700,"height":12}},{"id":"73a988f1-38a9-46b2-82cb-e9f0dbda064e","block_type":"box","text":"additional losses may be incurred if the investment loses value because, in addition to the money lost","page_number":123,"box":{"x":116,"y":165,"width":757,"height":12}},{"id":"ed3d77e8-fb8d-464f-9644-1c0050def5b8","block_type":"box","text":"on the investment, the loan still needs to be repaid.","page_number":123,"box":{"x":116,"y":180,"width":384,"height":12}},{"id":"e17c44d3-7c0e-40c7-9adc-95143901c506","block_type":"box","text":"Because the return on the ETN is dependent on the issuer’s ability or willingness to meet its","page_number":123,"box":{"x":117,"y":210,"width":685,"height":12}},{"id":"686a7520-180d-45d2-a379-04952b32102f","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":123,"box":{"x":116,"y":226,"width":757,"height":12}},{"id":"6251a771-8388-4951-afc0-6d3fc641643b","block_type":"box","text":"change in the underlying reference instrument. The market value of ETN shares may differ from the","page_number":123,"box":{"x":116,"y":241,"width":744,"height":12}},{"id":"74fc476b-98c8-4901-8f0b-61610bbd4f02","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":123,"box":{"x":116,"y":257,"width":748,"height":12}},{"id":"818d2d51-27fd-4a07-ba9f-2fd9e0dac391","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":123,"box":{"x":116,"y":272,"width":732,"height":12}},{"id":"b89d2fe6-8f26-4fee-9da2-f629a2be8697","block_type":"box","text":"demand in the market for the assets underlying the reference instrument that the ETN seeks to track.","page_number":123,"box":{"x":116,"y":288,"width":755,"height":12}},{"id":"c7f57857-caf7-4422-a4c3-dc7e09458723","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":123,"box":{"x":116,"y":318,"width":761,"height":12}},{"id":"76d8109d-d033-42a1-8db3-9d217701bb16","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":123,"box":{"x":117,"y":333,"width":728,"height":12}},{"id":"389a3833-cd06-4499-a8f1-3b29ae649ae1","block_type":"box","text":"availability of a secondary market. An investor in an ETN could lose some or all of the amount","page_number":123,"box":{"x":116,"y":349,"width":701,"height":12}},{"id":"1b3062c1-66fe-4ccf-a69d-6f09c08223c6","block_type":"box","text":"invested.","page_number":123,"box":{"x":117,"y":364,"width":71,"height":10}},{"id":"4e77540f-ba51-43b5-a14a-66de38824334","block_type":"box","text":"ETNs are also subject to tax risks. The Internal Revenue Service (the “IRS”) may not accept, and a","page_number":123,"box":{"x":117,"y":394,"width":739,"height":12}},{"id":"e85fceae-ff04-4223-bca7-8ec85b1cdb37","block_type":"box","text":"court may not uphold, how the Funds characterize and treat ETNs for tax purposes. The timing and","page_number":123,"box":{"x":116,"y":410,"width":742,"height":12}},{"id":"6b751082-867d-4db2-8454-30fa2ba358e2","block_type":"box","text":"character of income and gains derived by a Fund from investments in ETNs may be affected by future","page_number":123,"box":{"x":116,"y":425,"width":762,"height":12}},{"id":"5222a45d-f7a0-4e20-b883-a728633f6599","block_type":"box","text":"legislation.","page_number":123,"box":{"x":117,"y":441,"width":83,"height":12}},{"id":"988a0685-7e6b-460b-8880-ada5821ce099","block_type":"box","text":"Foreign Investments.","page_number":123,"box":{"x":116,"y":471,"width":174,"height":12}},{"id":"56651c39-5d2b-4abe-bbae-2dce94fa29b1","block_type":"box","text":"Foreign Investment Risks.","page_number":123,"box":{"x":116,"y":494,"width":193,"height":12}},{"id":"bcd6bebe-d086-496b-9a4c-c88ecd378f25","block_type":"box","text":"Certain Funds may invest in foreign securities, including securities from","page_number":123,"box":{"x":310,"y":493,"width":540,"height":13}},{"id":"c49915c1-1481-4a70-bfbe-8485fa93cdc1","block_type":"box","text":"issuers located in emerging market countries. These securities may be denominated in U.S. dollars or","page_number":123,"box":{"x":117,"y":509,"width":760,"height":12}},{"id":"246f269e-f36b-4386-9abb-03e49d966a82","block_type":"box","text":"in a foreign currency. Investing in foreign securities involves risks not typically associated with investing","page_number":123,"box":{"x":117,"y":524,"width":770,"height":13}},{"id":"b9aa21b2-4dd5-4838-97f2-ae90612b9500","block_type":"box","text":"in securities of companies organized and operated in the United States that can increase the chances","page_number":123,"box":{"x":117,"y":540,"width":759,"height":12}},{"id":"a89c8a80-10ac-44fe-aeef-9008800ea419","block_type":"box","text":"that a Fund will lose money.","page_number":123,"box":{"x":116,"y":556,"width":213,"height":12}},{"id":"3b164010-dabe-408d-a336-8389c46f2c27","block_type":"box","text":"Securities issued by certain companies organized outside the United States may not be deemed to be","page_number":123,"box":{"x":116,"y":586,"width":762,"height":12}},{"id":"fe2c5dcb-1c8b-4271-bdb8-8cd8f5822766","block_type":"box","text":"foreign securities (but rather deemed to be U.S. securities) if (i) the company’s principal operations are","page_number":123,"box":{"x":116,"y":601,"width":766,"height":12}},{"id":"7feb66da-7d41-4949-a385-fcf74a90b8c7","block_type":"box","text":"conducted from the U.S., (ii) the company’s equity securities trade principally on a U.S. stock","page_number":123,"box":{"x":116,"y":617,"width":694,"height":12}},{"id":"da6c2163-dffb-4660-bba2-75ddba232f99","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":123,"box":{"x":116,"y":632,"width":729,"height":12}},{"id":"51010f04-6437-43c5-86be-8c168eb41f83","block_type":"box","text":"securities is included in the Fund’s primary U.S. benchmark index.","page_number":123,"box":{"x":116,"y":648,"width":496,"height":12}},{"id":"e0195850-7416-4c57-95c6-1aea9584e67d","block_type":"box","text":"In addition to equity securities, foreign investments of the Funds may include: (a) debt obligations","page_number":123,"box":{"x":117,"y":678,"width":721,"height":12}},{"id":"899f0f44-2372-4148-9201-91786c2d1eaa","block_type":"box","text":"issued or guaranteed by foreign sovereign governments or their agencies, authorities, instrumentalities","page_number":123,"box":{"x":117,"y":693,"width":762,"height":12}},{"id":"6746ee51-3e0d-4e45-95f7-5facf34efb08","block_type":"box","text":"or political subdivisions, including a foreign state, province or municipality; (b) debt obligations of","page_number":123,"box":{"x":116,"y":709,"width":716,"height":12}},{"id":"4cda9bae-032d-4a72-b893-47a5c61ff702","block_type":"box","text":"supranational organizations; (c) debt obligations of foreign banks and bank holding companies;","page_number":123,"box":{"x":116,"y":724,"width":703,"height":12}},{"id":"65b66f7e-4d1c-49fa-bbd9-7a2c105e4426","block_type":"box","text":"(d) debt obligations of domestic banks and corporations issued in foreign currencies; (e) debt","page_number":123,"box":{"x":117,"y":740,"width":689,"height":12}},{"id":"3bc68425-95be-4095-8646-7c12917a5047","block_type":"box","text":"obligations denominated in the Euro; and (f) foreign corporate debt securities and commercial paper.","page_number":123,"box":{"x":116,"y":755,"width":746,"height":12}},{"id":"c99d7d60-8df9-40b2-b2b3-5d6843208e7d","block_type":"box","text":"Such securities may include loan participations and assignments, convertible securities and","page_number":123,"box":{"x":116,"y":771,"width":678,"height":12}},{"id":"e6a540cd-986d-4cdf-b66b-c7dcfee8c4ae","block_type":"box","text":"zero-coupon securities.","page_number":123,"box":{"x":116,"y":786,"width":172,"height":12}},{"id":"87900a6d-a568-4adb-8e5e-3d731bc777fd","block_type":"box","text":"Dividends or interest on, or proceeds from the sale of, foreign securities may be subject to foreign","page_number":123,"box":{"x":117,"y":816,"width":723,"height":12}},{"id":"fd07e8f7-c0d4-40be-bfe7-43ebc8d65c2f","block_type":"box","text":"withholding taxes.","page_number":123,"box":{"x":116,"y":832,"width":138,"height":12}},{"id":"892084e5-9911-4799-9bb9-73d034e9beb0","block_type":"box","text":"To the extent that the underlying securities or other instruments held by a Fund trade on foreign","page_number":123,"box":{"x":116,"y":862,"width":715,"height":12}},{"id":"9a98da8b-fdd5-4223-9de5-6ab4c4d5fafb","block_type":"box","text":"exchanges or in foreign markets that are closed when the securities exchange on which the Fund’s","page_number":123,"box":{"x":116,"y":877,"width":740,"height":12}},{"id":"a4db5f67-8e0e-48d6-a809-8cf35f760e88","block_type":"box","text":"II-36","page_number":123,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"48199819-d9f9-4f4e-af48-af85559c9695","block_type":"box","text":"NM1026U-6030748-123/260","page_number":123,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5098d5a9-49b0-440d-8128-b74572637e5f","block_type":"box","text":"shares trade is open, there are likely to be deviations between the current price of such an underlying","page_number":124,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"b4e266bc-3fe9-4853-b43d-759281ed9d3b","block_type":"box","text":"security and the last quoted price for the underlying security (","page_number":124,"box":{"x":116,"y":102,"width":454,"height":13}},{"id":"e8c35009-4a64-4ff1-b34a-ec1bc33160b1","block_type":"box","text":"i.e.","page_number":124,"box":{"x":571,"y":103,"width":20,"height":9}},{"id":"c54c7a27-b2f9-4c0c-bbdc-b274b748ef85","block_type":"box","text":", the Fund’s quote from the closed","page_number":124,"box":{"x":594,"y":102,"width":258,"height":12}},{"id":"493af041-a7db-4f5e-9935-61859b2885cf","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":124,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"5801ba82-c09c-4b70-bc3c-80b800399183","block_type":"box","text":"portion of the Fund’s underlying securities or other instruments trade on that closed foreign market or","page_number":124,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"88636bf3-256b-47f0-952f-89b6ebd1b30f","block_type":"box","text":"when the foreign market is closed for unscheduled reasons. These deviations may result in premiums","page_number":124,"box":{"x":116,"y":149,"width":759,"height":12}},{"id":"59e22b86-dbdb-4b9d-a0e1-ab96d33c3799","block_type":"box","text":"or discounts to certain Funds’ NAVs that may be greater than those experienced by other ETFs.","page_number":124,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"3e8afb08-ec08-4113-b7f4-57e6a35365bf","block_type":"box","text":"Foreign Market Risk.","page_number":124,"box":{"x":116,"y":196,"width":152,"height":12}},{"id":"6db9f3da-1dc4-48ec-9762-57a0a30893a5","block_type":"box","text":"Funds that may invest in foreign securities offer the potential for more","page_number":124,"box":{"x":269,"y":196,"width":521,"height":12}},{"id":"a85a4b15-febc-4532-87eb-cabf6200e929","block_type":"box","text":"diversification than a Fund that invests only in the United States because securities traded on foreign","page_number":124,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"33a001c6-6d6b-4f84-93cb-7b19ae423fb5","block_type":"box","text":"markets have often (though not always) performed differently from securities traded in the United","page_number":124,"box":{"x":117,"y":227,"width":715,"height":12}},{"id":"8ed7a997-8c76-41cf-8c47-d838a37ab6e0","block_type":"box","text":"States. However, such investments often involve risks not present in U.S. investments that can increase","page_number":124,"box":{"x":116,"y":242,"width":769,"height":12}},{"id":"39522bfa-2874-46c0-8c6b-36de6cf0ae55","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":124,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"552ae7ae-6334-44de-9edd-3bded8c9e22f","block_type":"box","text":"are generally fewer investors on foreign exchanges and a smaller number of shares traded each day, it","page_number":124,"box":{"x":116,"y":273,"width":762,"height":12}},{"id":"7fa69e2e-3d2e-40a0-a236-0086fe4dbb4f","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":124,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"4d537d82-24f2-47ac-9b75-b79280f9642c","block_type":"box","text":"securities may fluctuate more than prices of securities traded in the United States. Investments in","page_number":124,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"e4a1714d-9736-4b37-a8eb-909ee22f0689","block_type":"box","text":"foreign markets may also be adversely affected by governmental actions such as the imposition of","page_number":124,"box":{"x":116,"y":320,"width":727,"height":12}},{"id":"1ae79d3d-e3c7-48aa-8183-139bc7f7bddd","block_type":"box","text":"punitive taxes or tariffs. In addition, economic conditions, such as volatile currency exchange rates and","page_number":124,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"24ee7f7a-d108-4a2e-b3c0-012cf50dd766","block_type":"box","text":"interest rates, political events, military action and other conditions may, without prior warning, lead to the","page_number":124,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"7ca7537c-2a2c-4018-a3f4-6f383109865a","block_type":"box","text":"governments of certain countries, or the U.S. Government with respect to certain countries, prohibiting","page_number":124,"box":{"x":116,"y":366,"width":756,"height":12}},{"id":"9c402636-2d0d-4ae7-9453-a543d40d70b4","block_type":"box","text":"or imposing substantial restrictions through capital controls and/or sanctions on foreign investing in the","page_number":124,"box":{"x":116,"y":382,"width":758,"height":12}},{"id":"30f65d24-10ff-40c0-89ef-3cddb0f23a8b","block_type":"box","text":"capital markets or certain industries in those countries. Capital controls and/or sanctions may include","page_number":124,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"0f18a26c-6b22-481a-b62d-82d43930d4b0","block_type":"box","text":"the prohibition of, or restrictions on, the ability to own or transfer currency, securities, derivatives or","page_number":124,"box":{"x":116,"y":413,"width":730,"height":12}},{"id":"b60094d8-e294-4378-82d3-939aecec233a","block_type":"box","text":"other assets and may also include retaliatory actions of one government against another government,","page_number":124,"box":{"x":116,"y":428,"width":752,"height":12}},{"id":"e3793223-e4be-4cab-84bc-9ae11d5ebf6c","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":124,"box":{"x":116,"y":444,"width":758,"height":12}},{"id":"cc33148c-8622-4aad-98fa-59931b58ba8b","block_type":"box","text":"transfer, receive, deliver or otherwise obtain exposure to foreign securities and assets, including the","page_number":124,"box":{"x":116,"y":459,"width":738,"height":12}},{"id":"9b7d2d87-4d70-4e9e-9b4a-9ce1050ce6ae","block_type":"box","text":"ability to transfer the Fund’s assets or income back into the United States, and could negatively impact","page_number":124,"box":{"x":116,"y":475,"width":758,"height":12}},{"id":"7364dd7a-08f3-480b-86f0-c66fc05df7e7","block_type":"box","text":"the value and/or liquidity of such assets or otherwise adversely affect a Fund’s operations, causing the","page_number":124,"box":{"x":116,"y":490,"width":757,"height":12}},{"id":"78ec21e4-9499-4336-8bc2-48f2913e0da9","block_type":"box","text":"Fund to decline in value. Other potential foreign market risks include exchange controls, difficulties in","page_number":124,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"0b03fbd6-47bc-4ac9-9981-5799a55ab337","block_type":"box","text":"pricing securities, defaults on foreign government securities, difficulties in enforcing favorable legal","page_number":124,"box":{"x":117,"y":521,"width":727,"height":12}},{"id":"646b7bf2-5b54-48fd-9a4c-dd527598e876","block_type":"box","text":"judgments in foreign courts, and political and social conditions, such as diplomatic relations,","page_number":124,"box":{"x":115,"y":537,"width":680,"height":12}},{"id":"b47597e4-e4a8-4fa4-b4c9-a3c85c89deb9","block_type":"box","text":"confiscatory taxation, expropriation, limitation on the removal of funds or assets, or imposition of (or","page_number":124,"box":{"x":116,"y":552,"width":735,"height":12}},{"id":"8b274599-708b-4ab7-8840-f34dd1f06b0b","block_type":"box","text":"change in) exchange control regulations. Legal remedies available to investors in certain foreign","page_number":124,"box":{"x":116,"y":568,"width":711,"height":12}},{"id":"45d71864-e0ab-45f1-9946-87a60f72cff6","block_type":"box","text":"countries may be less extensive than those available to investors in the United States or other foreign","page_number":124,"box":{"x":116,"y":583,"width":751,"height":12}},{"id":"b8cc64d6-c032-47d1-bcdb-3fc9f38fbe1d","block_type":"box","text":"countries. In addition, changes in government administrations or economic or monetary policies in the","page_number":124,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"eef35463-84a3-4c3a-ae41-24686b2b931f","block_type":"box","text":"United States or abroad could result in appreciation or depreciation of portfolio securities and could","page_number":124,"box":{"x":117,"y":614,"width":731,"height":12}},{"id":"85a0e2c3-6c14-4429-a9c2-4560f35af919","block_type":"box","text":"favorably or adversely affect a Fund’s operations.","page_number":124,"box":{"x":116,"y":630,"width":368,"height":12}},{"id":"38cd82c7-d172-4d4c-acab-84892aef4887","block_type":"box","text":"Foreign Economy Risk.","page_number":124,"box":{"x":116,"y":661,"width":172,"height":12}},{"id":"d722eb45-134f-4026-941f-21e65b18cdae","block_type":"box","text":"The economies of certain foreign markets often do not compare favorably with","page_number":124,"box":{"x":295,"y":661,"width":579,"height":12}},{"id":"8f28db99-8025-4a72-b9cf-42e6612900c9","block_type":"box","text":"that of the United States with respect to such issues as growth of gross national product, reinvestment","page_number":124,"box":{"x":116,"y":676,"width":759,"height":12}},{"id":"3fc9c295-0a9e-4c2b-9d1a-ba671d9e244d","block_type":"box","text":"of capital, resources, and balance of payments position. Certain such economies may rely heavily on","page_number":124,"box":{"x":116,"y":692,"width":748,"height":12}},{"id":"3b592dd7-bd5a-4b86-a5ee-b6213324f29c","block_type":"box","text":"particular industries or foreign capital and are more vulnerable to diplomatic developments, the","page_number":124,"box":{"x":117,"y":707,"width":702,"height":12}},{"id":"dadeeda4-cf20-4584-b313-1d9ae0111b4e","block_type":"box","text":"imposition of economic sanctions against a particular country or countries, changes in international","page_number":124,"box":{"x":117,"y":723,"width":731,"height":12}},{"id":"93f180e6-92b2-44e7-87d2-f215b1108206","block_type":"box","text":"trading patterns, trade barriers, and other protectionist or retaliatory measures.","page_number":124,"box":{"x":116,"y":738,"width":582,"height":12}},{"id":"9c66d2c3-93b7-4fd7-b4e7-32630c4239e6","block_type":"box","text":"Currency Risk and Exchange Risk.","page_number":124,"box":{"x":117,"y":769,"width":257,"height":12}},{"id":"b54bd555-c8ef-400d-9108-142f240b2bda","block_type":"box","text":"Because foreign securities generally are denominated and pay","page_number":124,"box":{"x":382,"y":769,"width":464,"height":12}},{"id":"fb299b26-255c-4f33-b901-ef6b5a21056e","block_type":"box","text":"dividends or interest in foreign currencies, the value of a Fund that invests in foreign securities as","page_number":124,"box":{"x":116,"y":785,"width":721,"height":12}},{"id":"84fa0a03-1da2-439f-be8b-8cca78c955c0","block_type":"box","text":"measured in U.S. dollars will be affected favorably or unfavorably by changes in exchange rates.","page_number":124,"box":{"x":117,"y":800,"width":715,"height":12}},{"id":"be961fbd-132d-4268-a9e3-4e16ac279812","block_type":"box","text":"Generally, when the U.S. dollar rises in value against a foreign currency, a security denominated in","page_number":124,"box":{"x":117,"y":816,"width":733,"height":12}},{"id":"87bdab15-0b70-4210-ad0b-2a3b778fed09","block_type":"box","text":"that currency loses value because the currency is worth fewer U.S. dollars. Conversely, when the U.S.","page_number":124,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"2e38b127-0a44-47f6-be6a-4f67dc10df4a","block_type":"box","text":"dollar decreases in value against a foreign currency, a security denominated in that currency gains","page_number":124,"box":{"x":116,"y":847,"width":737,"height":12}},{"id":"cc9d8d96-d11d-448d-9f30-355415b1abf2","block_type":"box","text":"value because the currency is worth more U.S. dollars. This risk, generally known as “currency risk,”","page_number":124,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"56c3678d-068e-48b3-bf7f-b64cdf270202","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":124,"box":{"x":117,"y":878,"width":738,"height":12}},{"id":"957f5492-b4c2-4325-8749-84143b557dee","block_type":"box","text":"II-37","page_number":124,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"ad99c286-eaa0-4240-9ec2-ea1708624a65","block_type":"box","text":"NM1026U-6030748-124/260","page_number":124,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"afb2e39f-95e4-470a-ab7d-a32b53eb97db","block_type":"box","text":"increase those returns. Currency exchange rates can also be affected unpredictably by intervention by","page_number":125,"box":{"x":117,"y":87,"width":764,"height":12}},{"id":"aeb1ea73-1298-427c-a298-d2da83c90eae","block_type":"box","text":"U.S. or foreign governments or central banks, or the failure to intervene, or buy currency controls or","page_number":125,"box":{"x":117,"y":102,"width":743,"height":13}},{"id":"0dc18409-fb74-412e-b6fc-778fcce1b294","block_type":"box","text":"political developments in the United States or abroad.","page_number":125,"box":{"x":117,"y":118,"width":402,"height":12}},{"id":"270ffe1f-6852-4978-9472-8e1dd628ec47","block_type":"box","text":"Governmental Supervision and Regulation/Accounting Standards. Many foreign governments","page_number":125,"box":{"x":117,"y":149,"width":697,"height":12}},{"id":"818078f0-983e-424d-b50f-bdcac173b2f5","block_type":"box","text":"supervise and regulate stock exchanges, brokers and the sale of securities less than does the United","page_number":125,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"0a5a4cad-d689-439d-8bcf-2fa73ad9b51c","block_type":"box","text":"States. Some countries may not have laws to protect investors comparable to the U.S. securities laws.","page_number":125,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"a136ce5e-0ffe-4d61-87b4-01c154f8c10a","block_type":"box","text":"For example, some foreign countries may have no laws or rules against insider trading. Insider trading","page_number":125,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"64e0ced7-bbf1-420c-b55b-3d3b5efca1fe","block_type":"box","text":"occurs when a person buys or sells a company’s securities based on nonpublic information about that","page_number":125,"box":{"x":116,"y":211,"width":760,"height":12}},{"id":"3f7bba85-f7c5-49cb-b0f9-c40205eba1df","block_type":"box","text":"company. Accounting standards in other countries are not necessarily the same as in the United","page_number":125,"box":{"x":116,"y":227,"width":719,"height":12}},{"id":"34281897-902a-4e00-b4bf-47743e1ce29b","block_type":"box","text":"States. If the accounting standards in another country do not require as much detail as U.S. accounting","page_number":125,"box":{"x":116,"y":242,"width":771,"height":12}},{"id":"30394d6a-86ad-4621-8b2b-6ef503fa959a","block_type":"box","text":"standards, it may be harder for Fund management to completely and accurately determine a","page_number":125,"box":{"x":116,"y":258,"width":691,"height":12}},{"id":"e362306f-2c24-4919-8825-22c374558ed8","block_type":"box","text":"company’s financial condition. In addition, the U.S. Government has from time to time in the past","page_number":125,"box":{"x":116,"y":273,"width":722,"height":12}},{"id":"e298f58b-06d1-4d29-850f-e91a3882cb6a","block_type":"box","text":"imposed restrictions, through penalties and otherwise, on foreign investments by U.S. investors such","page_number":125,"box":{"x":117,"y":289,"width":752,"height":12}},{"id":"ab948a12-b283-45af-9b3c-b65133cd4e43","block_type":"box","text":"as the Fund. If such restrictions should be reinstituted, it might become necessary for the Fund to","page_number":125,"box":{"x":116,"y":304,"width":727,"height":12}},{"id":"881b2651-8c49-4cbe-b7bb-9ccf8ae0348f","block_type":"box","text":"invest all or substantially all of its assets in U.S. securities. Also, brokerage commissions and other","page_number":125,"box":{"x":117,"y":320,"width":737,"height":12}},{"id":"8c8e9ea5-c083-4ee0-a5a8-a04d0b7fc2b1","block_type":"box","text":"costs of buying or selling securities often are higher in foreign countries than they are in the United","page_number":125,"box":{"x":116,"y":335,"width":736,"height":12}},{"id":"6082c2e7-8aef-4334-b255-269745ae55ee","block_type":"box","text":"States. This reduces the amount the Fund can earn on its investments.","page_number":125,"box":{"x":116,"y":351,"width":532,"height":9}},{"id":"bee7dfe0-237e-430d-acbe-22f34743966b","block_type":"box","text":"Certain Risks of Holding Fund Assets Outside the United States.","page_number":125,"box":{"x":117,"y":382,"width":477,"height":12}},{"id":"fa1f8134-4d50-4d8b-b5b5-8c73e8cf1cfe","block_type":"box","text":"A Fund generally holds its foreign","page_number":125,"box":{"x":596,"y":382,"width":259,"height":12}},{"id":"73353810-9e62-49ce-a0a2-b4538dea63d5","block_type":"box","text":"securities and cash in foreign banks and securities depositories. Some foreign banks and securities","page_number":125,"box":{"x":116,"y":397,"width":743,"height":12}},{"id":"97713be5-2ce1-46ce-a69b-140c74bd620b","block_type":"box","text":"depositories may be recently organized or new to the foreign custody business. In addition, there may","page_number":125,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"387c9f55-8afe-450a-8d21-b57f3f68974a","block_type":"box","text":"be limited or no regulatory oversight over their operations. Also, the laws of certain countries may put","page_number":125,"box":{"x":117,"y":428,"width":754,"height":12}},{"id":"4f08e41a-2f88-4962-916c-48bb02854829","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":125,"box":{"x":117,"y":444,"width":747,"height":12}},{"id":"cec02d36-d1fe-4d38-bc99-35609eb2563c","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":125,"box":{"x":116,"y":459,"width":741,"height":12}},{"id":"bfe42b9a-b6cd-4a2e-86b8-52ec96c06c45","block_type":"box","text":"hold securities in certain foreign markets than in the United States. The increased expense of investing","page_number":125,"box":{"x":117,"y":475,"width":768,"height":12}},{"id":"aaa3e184-1702-4eb5-8a7b-d07c5e20f086","block_type":"box","text":"in foreign markets reduces the amount a Fund can earn on its investments and typically results in a","page_number":125,"box":{"x":117,"y":490,"width":741,"height":12}},{"id":"2340682d-2d4c-453b-b457-ec3626aa4f54","block_type":"box","text":"higher operating expense ratio for the Fund as compared to investment companies that invest only in","page_number":125,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"d1a1d8cf-6b2d-499c-a378-95c6d82c9b3b","block_type":"box","text":"the United States.","page_number":125,"box":{"x":116,"y":521,"width":138,"height":10}},{"id":"c86b4691-05ac-4a4b-85d7-702c2a1b8788","block_type":"box","text":"Publicly Available Information.","page_number":125,"box":{"x":116,"y":552,"width":222,"height":12}},{"id":"ccf2cb10-a939-4e9b-8ed7-27822f8ebdab","block_type":"box","text":"In general, less information is publicly available with respect to foreign","page_number":125,"box":{"x":340,"y":552,"width":529,"height":12}},{"id":"c1fd136b-880f-42c8-9f59-69de09e64f65","block_type":"box","text":"issuers than is available with respect to U.S. companies. Most foreign companies are also not subject","page_number":125,"box":{"x":117,"y":568,"width":758,"height":12}},{"id":"0c68a7a0-4e43-4795-809c-f1a246ecf5d7","block_type":"box","text":"to the uniform accounting and financial reporting requirements applicable to issuers in the United","page_number":125,"box":{"x":116,"y":583,"width":723,"height":12}},{"id":"ccf1a206-39dd-47e9-af68-4753fbaee9f5","block_type":"box","text":"States. While the volume of transactions effected on foreign stock exchanges has increased in recent","page_number":125,"box":{"x":116,"y":599,"width":758,"height":12}},{"id":"51a94a58-307c-4c5f-834d-b4053e15760b","block_type":"box","text":"years, it remains appreciably below that of the New York Stock Exchange. Accordingly, a Fund’s","page_number":125,"box":{"x":116,"y":614,"width":721,"height":12}},{"id":"29f36d1c-9cd4-43dc-8cde-050dbaf4b472","block_type":"box","text":"foreign investments may be less liquid than, and their prices may be more volatile than, comparable","page_number":125,"box":{"x":116,"y":630,"width":745,"height":12}},{"id":"a643464a-6ca0-4fde-8c8f-0af941764e0c","block_type":"box","text":"investments in securities in U.S. companies. In addition, there is generally less government supervision","page_number":125,"box":{"x":117,"y":645,"width":771,"height":12}},{"id":"4441636c-28ee-462a-89a9-dd5f6b19371d","block_type":"box","text":"and regulation of securities exchanges, brokers and issuers in foreign countries than in the United","page_number":125,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"ac14db2d-c33c-47a3-9075-bc8f999526c6","block_type":"box","text":"States.","page_number":125,"box":{"x":116,"y":676,"width":51,"height":10}},{"id":"783e1bfd-667b-43de-af56-10a4b77a7637","block_type":"box","text":"Settlement Risk.","page_number":125,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"80598a3d-f299-4ad6-8787-be8df3593a42","block_type":"box","text":"Settlement and clearance procedures in certain foreign markets differ significantly","page_number":125,"box":{"x":244,"y":707,"width":606,"height":12}},{"id":"fbd9a39a-9c42-4efb-9c8a-4c1785331f92","block_type":"box","text":"from those in the United States. Supervisory authorities may also be unable to apply standards which","page_number":125,"box":{"x":116,"y":723,"width":751,"height":12}},{"id":"9a9233e5-82c3-4107-86c7-cf0c2e52647d","block_type":"box","text":"are comparable with those in the United States. Foreign settlement procedures and trade regulations","page_number":125,"box":{"x":116,"y":738,"width":749,"height":12}},{"id":"2429fa55-1590-4254-bd1d-b6b5ac636e2e","block_type":"box","text":"also may involve certain risks (such as delays in payment for or delivery of securities) not typically","page_number":125,"box":{"x":116,"y":754,"width":727,"height":12}},{"id":"b201ef22-201b-4465-abf8-3cf7db0f9990","block_type":"box","text":"generated by the settlement of U.S. investments.","page_number":125,"box":{"x":116,"y":769,"width":362,"height":12}},{"id":"d4e6d079-7f29-416f-b1d6-5ce36232b20c","block_type":"box","text":"Communications between the United States and emerging market countries may be unreliable,","page_number":125,"box":{"x":117,"y":800,"width":704,"height":12}},{"id":"4d813493-09ae-4e4c-9739-4883305b9e51","block_type":"box","text":"increasing the risk of delayed settlements or losses of security certificates in markets that still rely on","page_number":125,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"a8340f91-c983-4fd6-be88-c0db3045c00b","block_type":"box","text":"physical settlement. Settlements in certain foreign countries at times have not kept pace with the","page_number":125,"box":{"x":117,"y":831,"width":720,"height":12}},{"id":"a3fdf051-e8c3-4c64-836e-28bc6ebe2774","block_type":"box","text":"number of securities transactions; these problems may make it difficult for a Fund to carry out","page_number":125,"box":{"x":117,"y":847,"width":698,"height":12}},{"id":"a49c8d90-6e44-48b5-92b3-afedb4db4b79","block_type":"box","text":"transactions. If a Fund cannot settle or is delayed in settling a purchase of securities, it may miss","page_number":125,"box":{"x":116,"y":862,"width":723,"height":12}},{"id":"62d175ff-1aec-4181-b762-3493c16295fc","block_type":"box","text":"attractive investment opportunities and certain of its assets may be uninvested with no return earned","page_number":125,"box":{"x":116,"y":878,"width":751,"height":12}},{"id":"7a17ba78-e512-4ab5-95ab-0d068fff745c","block_type":"box","text":"II-38","page_number":125,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"0ffa40df-9684-4630-816f-f9ad14b07d51","block_type":"box","text":"NM1026U-6030748-125/260","page_number":125,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"261314f2-fcf1-4be9-93ed-9588533e66de","block_type":"box","text":"thereon for some period. If a Fund cannot settle or is delayed in settling a sale of securities, it may lose","page_number":126,"box":{"x":116,"y":87,"width":769,"height":12}},{"id":"20dd4855-ebf2-4412-b90e-bc75de100a2d","block_type":"box","text":"money if the value of the security then declines or, if it has contracted to sell the security to another","page_number":126,"box":{"x":117,"y":102,"width":739,"height":13}},{"id":"666c4454-52b6-4d9b-bea5-77143224c9c2","block_type":"box","text":"party, the Fund could be liable to that party for any losses incurred.","page_number":126,"box":{"x":117,"y":118,"width":501,"height":12}},{"id":"6bc6e4fc-fe5e-4d4f-829d-058bcae04044","block_type":"box","text":"Because of uncertainties in the operation of settlement systems in individual markets, competing","page_number":126,"box":{"x":117,"y":149,"width":720,"height":12}},{"id":"c5520426-21f9-4560-97b7-97571b034077","block_type":"box","text":"claims may arise in respect of securities held by or to be transferred to a Fund. Compensation","page_number":126,"box":{"x":116,"y":165,"width":703,"height":12}},{"id":"43acb011-7efe-4412-9d99-ebfcd6a725c4","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":126,"box":{"x":116,"y":180,"width":766,"height":12}},{"id":"ffd447e3-718e-4ed2-9ae6-ffe49140967a","block_type":"box","text":"such event.","page_number":126,"box":{"x":116,"y":196,"width":90,"height":9}},{"id":"b410a24b-8dfb-41ef-aab4-5a14f5cd5d05","block_type":"box","text":"Sovereign Debt.","page_number":126,"box":{"x":117,"y":227,"width":115,"height":12}},{"id":"1e3fbc3e-58b4-4748-b6f6-ae0484933402","block_type":"box","text":"Investment in sovereign debt can involv","page_number":126,"box":{"x":234,"y":227,"width":293,"height":12}},{"id":"38d3d326-1af6-4425-b49e-dadca87e640a","block_type":"box","text":"e a high degree of risk. The governmental entity","page_number":126,"box":{"x":527,"y":227,"width":353,"height":12}},{"id":"a153b26c-4dbb-4942-a8e7-4c9af8c8993a","block_type":"box","text":"that controls the repayment of sovereign debt ma","page_number":126,"box":{"x":116,"y":242,"width":357,"height":12}},{"id":"43df871f-a810-4a53-a288-66b95b4e08ab","block_type":"box","text":"y not be able or willing to repay the principal and/or","page_number":126,"box":{"x":474,"y":242,"width":375,"height":12}},{"id":"ec63017f-7251-42f6-a2c2-0c87b5147c12","block_type":"box","text":"interest when due in accordance with the terms of","page_number":126,"box":{"x":117,"y":258,"width":362,"height":9}},{"id":"7a3c3ea8-f1a1-4d27-9a20-1aeaff555981","block_type":"box","text":"f such debt. A governmental entity’s willingness or","page_number":126,"box":{"x":478,"y":258,"width":364,"height":12}},{"id":"c6df551a-cf7a-4f52-9464-d6c819936564","block_type":"box","text":"ability to repay principal and interest due in a timely","page_number":126,"box":{"x":116,"y":273,"width":372,"height":12}},{"id":"8ca4f2b6-0747-470f-b3db-e74d7f5b0a4e","block_type":"box","text":"y manner may be affected by, among other factors, its","page_number":126,"box":{"x":488,"y":273,"width":390,"height":12}},{"id":"73441df6-4055-4680-ba15-66fa7ad7ee31","block_type":"box","text":"cash flow situation, the extent of its foreign rese","page_number":126,"box":{"x":116,"y":289,"width":346,"height":12}},{"id":"36705c3f-6d88-47a5-b6f2-0a0660c263c4","block_type":"box","text":"rves, the availability of sufficient foreign exchange on the","page_number":126,"box":{"x":463,"y":289,"width":415,"height":12}},{"id":"6db384de-7d5a-4284-90bc-cc59db9bcefc","block_type":"box","text":"date a payment is due, the relative size of the","page_number":126,"box":{"x":116,"y":304,"width":335,"height":12}},{"id":"0e9c09e2-ec91-4c31-919a-4c38ecd56934","block_type":"box","text":"debt service burden to the economy as a whole, the","page_number":126,"box":{"x":452,"y":304,"width":381,"height":12}},{"id":"bab19f4b-d8c8-4217-9450-6506f7d20484","block_type":"box","text":"governmental entity’s policy towards the Internati","page_number":126,"box":{"x":116,"y":320,"width":354,"height":12}},{"id":"d21b00f5-f75d-4c2c-bf69-999e90afb558","block_type":"box","text":"onal Monetary Fund and the political constraints to","page_number":126,"box":{"x":472,"y":320,"width":372,"height":12}},{"id":"17470632-dc94-46fd-b8e3-fa53ebc4ee5d","block_type":"box","text":"which a governmental entity may be subject. Gove","page_number":126,"box":{"x":116,"y":335,"width":367,"height":12}},{"id":"ed1e06b3-08d4-4047-bad3-93ef70dd7138","block_type":"box","text":"rnmental entities may also be dependent on expected","page_number":126,"box":{"x":485,"y":335,"width":395,"height":12}},{"id":"4498182d-6e11-458b-a481-f83479edb223","block_type":"box","text":"disbursements from foreign governments, multila","page_number":126,"box":{"x":116,"y":351,"width":355,"height":12}},{"id":"dcd184ec-e5f1-4e1f-b4fb-804f292652da","block_type":"box","text":"teral agencies and others abroad to reduce principal","page_number":126,"box":{"x":472,"y":351,"width":384,"height":12}},{"id":"401261af-5f8c-4fe0-9db0-20eae7e02ef7","block_type":"box","text":"and interest arrearages on their debt. The commitment","page_number":126,"box":{"x":116,"y":366,"width":398,"height":12}},{"id":"5bbd9134-b05b-45c4-a453-afa0f8fdd0c9","block_type":"box","text":"t on the part of these governments, agencies and","page_number":126,"box":{"x":514,"y":366,"width":358,"height":12}},{"id":"aee04ee0-7593-456e-97fe-3005ab3e5808","block_type":"box","text":"others to make such disbursements may be condi","page_number":126,"box":{"x":116,"y":382,"width":362,"height":12}},{"id":"64e86006-1ebf-4893-9692-da88ea1f77f6","block_type":"box","text":"tioned on the implementation of economic reforms and/","page_number":126,"box":{"x":479,"y":382,"width":402,"height":12}},{"id":"6b207d6f-ae93-4528-ba29-d989aaf82396","block_type":"box","text":"or economic performance and the timely service of such","page_number":126,"box":{"x":116,"y":397,"width":407,"height":12}},{"id":"a1037927-2b07-473d-a563-0011af9524a4","block_type":"box","text":"debtor’s obligations. Failure to implement such","page_number":126,"box":{"x":524,"y":397,"width":349,"height":12}},{"id":"fff24064-932d-4529-823e-5133c778f09c","block_type":"box","text":"reforms, achieve such levels of economic performance","page_number":126,"box":{"x":117,"y":413,"width":402,"height":12}},{"id":"9e2cdc94-1392-4dc2-b555-eab7958ba188","block_type":"box","text":"or repay principal or interest when due may result","page_number":126,"box":{"x":519,"y":413,"width":365,"height":12}},{"id":"8959869b-9083-40b8-a536-fa9e208bb1d2","block_type":"box","text":"in the cancellation of such third parties’ commitments","page_number":126,"box":{"x":117,"y":428,"width":389,"height":12}},{"id":"dab5bdbe-f4d3-47c1-a53e-52681bff716f","block_type":"box","text":"to lend funds to the governmental entity, which may","page_number":126,"box":{"x":506,"y":428,"width":380,"height":12}},{"id":"2a59b889-a6ed-4601-bbc7-6f40e05efef2","block_type":"box","text":"further impair such debtor’s ability or willingness to t","page_number":126,"box":{"x":116,"y":444,"width":372,"height":12}},{"id":"c2c40ead-8328-4cc4-8725-bfce56565c54","block_type":"box","text":"timely service its debts. Consequently, governmental","page_number":126,"box":{"x":487,"y":444,"width":389,"height":12}},{"id":"f556a5d3-000c-4195-a356-cbb7325a3674","block_type":"box","text":"entities may default on their sovereign debt.","page_number":126,"box":{"x":116,"y":459,"width":323,"height":12}},{"id":"0cd3fda7-ff75-4a17-a897-53891cf90a52","block_type":"box","text":"Holders of sovereign debt may be requested to participate in the rescheduling of such debt and to","page_number":126,"box":{"x":117,"y":490,"width":730,"height":12}},{"id":"967a97c1-ad30-42d7-900c-2f02b5aebea4","block_type":"box","text":"extend further loans to governmental entities. In the event of a default by a governmental entity, there","page_number":126,"box":{"x":116,"y":506,"width":758,"height":12}},{"id":"6fe8c581-29ba-417d-94e6-6ccbe1773162","block_type":"box","text":"may be few or no effective legal remedies for collecting on such debt.","page_number":126,"box":{"x":117,"y":521,"width":519,"height":12}},{"id":"33a7dfd6-07e8-4573-be5f-d50114d22837","block_type":"box","text":"Withholding Tax Reclaims Risk","page_number":126,"box":{"x":118,"y":552,"width":226,"height":12}},{"id":"23a55d48-d4a2-4e12-b293-a21486b8fbf0","block_type":"box","text":". A Fund may file claims to recover foreign withholding taxes on dividend","page_number":126,"box":{"x":344,"y":552,"width":530,"height":12}},{"id":"4ab92597-3055-41a9-a749-6c051eb07437","block_type":"box","text":"and interest income (if any) received from issuers in","page_number":126,"box":{"x":116,"y":568,"width":381,"height":12}},{"id":"cfc8ec8d-4f42-4318-a6ae-3c9c2c4ccd51","block_type":"box","text":"certain countries and capital gains on the disposition","page_number":126,"box":{"x":498,"y":568,"width":385,"height":12}},{"id":"16f8c116-8e9a-4c80-bfc2-10030db46d2f","block_type":"box","text":"of stocks or securities where such withholding ta","page_number":126,"box":{"x":116,"y":583,"width":351,"height":12}},{"id":"7df8cbeb-9aee-4d8e-afa6-6e2f801f3a08","block_type":"box","text":"x reclaim is possible. Whether or when a Fund will","page_number":126,"box":{"x":468,"y":583,"width":369,"height":12}},{"id":"03a664c6-841c-4e9d-b33b-79dd0c08dc51","block_type":"box","text":"receive a withholding tax refund is within the control","page_number":126,"box":{"x":117,"y":599,"width":379,"height":12}},{"id":"3f0049af-4fb2-4235-842a-0a07ff79b4df","block_type":"box","text":"of the tax authorities in such countries. Where a","page_number":126,"box":{"x":496,"y":599,"width":352,"height":9}},{"id":"be85a9d4-0cd1-4b3d-bedf-3b5252a8bb84","block_type":"box","text":"Fund expects to recover withholding taxes, the net asset value of the Fund generally includes accruals","page_number":126,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"ae7c45f2-f4bf-4ce2-a651-a1ef3c03dc64","block_type":"box","text":"for such tax refunds. Each Fund regularly evaluates","page_number":126,"box":{"x":116,"y":630,"width":375,"height":12}},{"id":"3514ba6e-11e5-4f7e-944d-c1151c8d0588","block_type":"box","text":"the probability of recovery. If the likelihood of","page_number":126,"box":{"x":492,"y":630,"width":334,"height":12}},{"id":"55dbd305-43eb-43ad-9151-c6e5fd5ecd4c","block_type":"box","text":"recovery materially decreases, due to, for example,","page_number":126,"box":{"x":117,"y":645,"width":377,"height":12}},{"id":"a4d685c0-f386-4fcb-9c11-e0fe23e8c547","block_type":"box","text":"a change in tax regulation or approach in the foreign","page_number":126,"box":{"x":494,"y":645,"width":385,"height":12}},{"id":"929ab989-0dfc-4f91-9363-3624bb466f66","block_type":"box","text":"country, accruals in a Fund’s net asset value for such","page_number":126,"box":{"x":116,"y":661,"width":387,"height":12}},{"id":"e277170f-29b7-4b02-8ef3-55f90f1a8723","block_type":"box","text":"refunds may be written down partially or in full,","page_number":126,"box":{"x":509,"y":661,"width":336,"height":12}},{"id":"d74384d2-1fdb-45b4-b555-ea62c0fa7576","block_type":"box","text":"which will adversely affect the Fund’s net asset value.","page_number":126,"box":{"x":116,"y":676,"width":389,"height":12}},{"id":"72a9adc8-6e51-4951-b2b4-d6659ed44a33","block_type":"box","text":"Shareholders in a Fund at the time an accrual is","page_number":126,"box":{"x":511,"y":676,"width":348,"height":10}},{"id":"9d7b3ccb-f350-4c53-bfd6-c2ce300c8eda","block_type":"box","text":"written down will bear the impact of t","page_number":126,"box":{"x":116,"y":692,"width":265,"height":12}},{"id":"c5373170-a981-481d-822c-8ac00d27d210","block_type":"box","text":"he resulting reduction in net asset","page_number":126,"box":{"x":382,"y":692,"width":244,"height":12}},{"id":"bc9ee0e2-3b2a-462e-b405-852205f85429","block_type":"box","text":"value regardless of whether they","page_number":126,"box":{"x":631,"y":692,"width":238,"height":12}},{"id":"6d3f5d07-fba4-4568-8bb0-970fd9ca805a","block_type":"box","text":"were shareholders during the accrual period. Converse","page_number":126,"box":{"x":116,"y":707,"width":400,"height":12}},{"id":"5a8d9a5d-d72e-40fa-b985-2bdcb6b34931","block_type":"box","text":"ly, if a Fund receives a tax refund that has not","page_number":126,"box":{"x":518,"y":707,"width":331,"height":12}},{"id":"81cb232e-a082-403f-b487-6d0cc223e55b","block_type":"box","text":"been previously accrued, shareholders in the Fund at t","page_number":126,"box":{"x":117,"y":723,"width":396,"height":12}},{"id":"20d3e3e2-46e1-4fac-a8d9-172410e98c70","block_type":"box","text":"he time of the successful recovery will benefit from","page_number":126,"box":{"x":514,"y":723,"width":365,"height":12}},{"id":"a3945045-5706-4644-a11e-f6e77840df18","block_type":"box","text":"the resulting increase in the Fund’s net asset value.","page_number":126,"box":{"x":116,"y":738,"width":373,"height":12}},{"id":"7a274142-c0f2-4ca5-8295-2c0d192eba21","block_type":"box","text":"Shareholders who sold their shares prior to such","page_number":126,"box":{"x":496,"y":738,"width":351,"height":12}},{"id":"f5197742-f943-406a-be30-68ad7c1a6a78","block_type":"box","text":"time will not benefit from such increase in the Fund’s net asset value.","page_number":126,"box":{"x":116,"y":754,"width":500,"height":9}},{"id":"7c497e3f-03a7-4dfc-83e8-5832c6474c02","block_type":"box","text":"U.S. Economic Trading Partners Risk.","page_number":126,"box":{"x":117,"y":785,"width":280,"height":12}},{"id":"e483ad5f-da60-49ce-9d66-9f0a5eb5944d","block_type":"box","text":"The United States is a significant, and in some cases the most","page_number":126,"box":{"x":404,"y":785,"width":464,"height":12}},{"id":"eda99750-6b7e-4d3b-8982-7587a8e3ce1c","block_type":"box","text":"significant, trading partner of, or foreign investor in, certain countries in which a Fund may invest. As a","page_number":126,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"81ff1081-fecd-4404-aef0-4d0c4cda35fd","block_type":"box","text":"result, economic conditions of such countries may be particularly affected by changes in the U.S.","page_number":126,"box":{"x":117,"y":816,"width":717,"height":12}},{"id":"83ff3727-ebec-4a49-a9b0-06c119a0d165","block_type":"box","text":"economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs, changes","page_number":126,"box":{"x":116,"y":831,"width":770,"height":12}},{"id":"987bfe37-3285-4fd9-b1bd-01f6ac56de2a","block_type":"box","text":"in the U.S. dollar exchange rate or an economic slowdown in the United States may have a material","page_number":126,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"4f8b99e1-da51-4e4e-8d18-7879fbf1ef03","block_type":"box","text":"adverse effect on a country’s economic conditions and, as a result, securities to which the Fund has","page_number":126,"box":{"x":116,"y":862,"width":746,"height":12}},{"id":"a9e564bf-e209-47f4-b74a-781704eb134d","block_type":"box","text":"exposure. Circumstances could arise that could prevent the timely payment of interest or principal on","page_number":126,"box":{"x":116,"y":878,"width":754,"height":12}},{"id":"26505585-d37b-44c1-8091-1ba623a03832","block_type":"box","text":"II-39","page_number":126,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a88f458f-75c6-49de-b96a-11e1fc0dc1bd","block_type":"box","text":"NM1026U-6030748-126/260","page_number":126,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6520da0b-dbe0-4bb6-a9a7-1c0e22b91a5d","block_type":"box","text":"U.S. Government debt, such as reaching the legislative “debt ceiling.” Such non-payment would result","page_number":127,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"6fc805d8-8ff7-43c9-92ec-4100bc0d3ace","block_type":"box","text":"in substantial negative consequences for the U.S. economy and the global financial system.","page_number":127,"box":{"x":117,"y":102,"width":685,"height":13}},{"id":"43ad4750-fe0c-49a3-b78a-78d29d3e43d5","block_type":"box","text":"There are strained relations between the United States and a number of foreign countries, including","page_number":127,"box":{"x":116,"y":135,"width":745,"height":12}},{"id":"98ffd196-4e9d-4ead-93c3-2e671b110c06","block_type":"box","text":"traditional allies, such as certain European countries, and historical adversaries, such as North Korea,","page_number":127,"box":{"x":116,"y":151,"width":761,"height":11}},{"id":"f94d49ea-98c2-4c13-b738-9b0baa26974f","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":127,"box":{"x":117,"y":166,"width":763,"height":12}},{"id":"f6874579-9963-4712-a593-4e60381f6abd","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":127,"box":{"x":116,"y":181,"width":748,"height":12}},{"id":"3912a984-0406-4b5d-86de-d17acd10da03","block_type":"box","text":"increased internal unrest and discord. If these trends were to continue, it may have an adverse impact","page_number":127,"box":{"x":117,"y":197,"width":761,"height":12}},{"id":"2b5a9290-86fc-4ca4-8f46-284db16e2495","block_type":"box","text":"on the U.S. economy and many of the issuers in which a Fund may invest.","page_number":127,"box":{"x":116,"y":212,"width":557,"height":12}},{"id":"abb61c0d-977e-4bf1-9fe3-437735946df2","block_type":"box","text":"Funding Agreements.","page_number":127,"box":{"x":116,"y":245,"width":171,"height":12}},{"id":"8c8092f1-e9b7-4473-b0b3-d97d291c1f30","block_type":"box","text":"Certain Funds may invest in Guaranteed Investment Contracts and similar","page_number":127,"box":{"x":289,"y":245,"width":561,"height":12}},{"id":"9842f286-7239-42c0-9524-f5c37bcb96d6","block_type":"box","text":"funding agreements. In connection with these investments, a Fund makes cash contributions to a","page_number":127,"box":{"x":116,"y":260,"width":727,"height":12}},{"id":"873e2f15-1797-49fd-90ba-193ce8d84737","block_type":"box","text":"deposit fund of an insurance company’s general account. The insurance company then credits to the","page_number":127,"box":{"x":116,"y":276,"width":753,"height":12}},{"id":"3c862877-0f04-43cc-87cc-84d8500d42e7","block_type":"box","text":"Fund on a monthly basis guaranteed interest, which is based on an index. The funding agreements","page_number":127,"box":{"x":117,"y":291,"width":740,"height":12}},{"id":"4fbf349f-3475-47a2-b300-b3d5c73f280b","block_type":"box","text":"provide that this guaranteed interest will not be less than a certain minimum rate. The purchase price","page_number":127,"box":{"x":117,"y":307,"width":753,"height":12}},{"id":"d6e3f0e0-fbf1-40ff-8e52-1692b3c95c34","block_type":"box","text":"paid for a funding agreement becomes part of the general assets of the insurance company, and the","page_number":127,"box":{"x":117,"y":322,"width":749,"height":12}},{"id":"6704604f-dbd7-4da3-8d97-9b373fa2cc48","block_type":"box","text":"contract is paid from the general assets of the insurance company. Generally, funding agreements are","page_number":127,"box":{"x":116,"y":338,"width":764,"height":12}},{"id":"5f5de023-ae45-400a-a7e0-9b906941ef66","block_type":"box","text":"not assignable or transferable without the permission of the issuing insurance companies, and an","page_number":127,"box":{"x":117,"y":353,"width":726,"height":12}},{"id":"be6ea62c-3393-41e9-96aa-c0af42926944","block_type":"box","text":"active secondary market in some funding agreements does not currently exist.","page_number":127,"box":{"x":116,"y":369,"width":586,"height":12}},{"id":"2a602205-bf53-42c4-b5f0-29470ce19847","block_type":"box","text":"Guarantees","page_number":127,"box":{"x":117,"y":401,"width":91,"height":10}},{"id":"b9391a1e-b210-4276-b2ff-899e8bce0b81","block_type":"box","text":".","page_number":127,"box":{"x":209,"y":409,"width":3,"height":2}},{"id":"f3e66e8f-a881-4aeb-a3c5-c44ff8e57848","block_type":"box","text":"A Fund may purchase securities which contain guarantees issued by an entity separate","page_number":127,"box":{"x":213,"y":401,"width":660,"height":12}},{"id":"17e227d9-4de3-4654-a95b-2f921ce172d6","block_type":"box","text":"from the issuer of the security. Generally, the guarantor of a security (often an affiliate of the issuer) will","page_number":127,"box":{"x":116,"y":417,"width":771,"height":12}},{"id":"3fca16a7-48c1-46f4-94bd-66ae71f1a642","block_type":"box","text":"fulfill an issuer’s payment obligations under a security if the issuer is unable to do so.","page_number":127,"box":{"x":116,"y":432,"width":634,"height":12}},{"id":"5166775e-138d-4d5c-ac54-103f061173e0","block_type":"box","text":"Illiquid Investments.","page_number":127,"box":{"x":116,"y":465,"width":160,"height":11}},{"id":"6fb49dcc-6d4b-45b2-a2a7-bc76b4304333","block_type":"box","text":"Each Fund may not acquire any illiquid investment if, immediately after the","page_number":127,"box":{"x":278,"y":465,"width":563,"height":12}},{"id":"6b9c4546-3fbd-49bf-ab01-6fd117e5e874","block_type":"box","text":"acquisition, a Fund would have invested more than 15% of its net assets in illiquid investments. An","page_number":127,"box":{"x":116,"y":480,"width":737,"height":12}},{"id":"04e5aa3e-a05b-436b-9976-5cdbb77bf5ba","block_type":"box","text":"illiquid investment is any investment that a Fund reasonably expects cannot be sold or disposed of in","page_number":127,"box":{"x":117,"y":496,"width":753,"height":12}},{"id":"5a4327ce-7577-4241-bc2c-5c5acf0a4bc2","block_type":"box","text":"current market conditions in seven calendar days or less without the sale or disposition significantly","page_number":127,"box":{"x":116,"y":511,"width":742,"height":12}},{"id":"4702673c-2b87-4320-a937-78359fc2fe96","block_type":"box","text":"changing the market value of the investment. Liquid investments may become illiquid after purchase by","page_number":127,"box":{"x":116,"y":527,"width":771,"height":12}},{"id":"33e0272f-e847-4ccd-b43e-e0f89012c8a7","block_type":"box","text":"a Fund, particularly during periods of market turmoil. There can be no assurance that a security or","page_number":127,"box":{"x":116,"y":542,"width":733,"height":12}},{"id":"c705fe27-17fc-4190-a828-7ef1c959bf6d","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":127,"box":{"x":117,"y":558,"width":766,"height":12}},{"id":"fc89f5a0-9523-4b71-898b-857b9341c805","block_type":"box","text":"by a Fund, and any security or instrument held by the Fund may be deemed an illiquid investment","page_number":127,"box":{"x":117,"y":573,"width":729,"height":12}},{"id":"851beaf8-6c45-4872-bb38-8666466f29d1","block_type":"box","text":"pursuant to the Fund’s liquidity risk management program. A Fund’s illiquid investments may reduce","page_number":127,"box":{"x":117,"y":589,"width":747,"height":12}},{"id":"1500aff6-f7c0-4b90-8eb3-e664d2747b5c","block_type":"box","text":"the returns of the Fund because it may be difficult to sell the illiquid investments at an advantageous","page_number":127,"box":{"x":116,"y":604,"width":748,"height":12}},{"id":"fa7577ae-161d-47d1-b89e-0915d4276b95","block_type":"box","text":"time or price. In addition, if a Fund is limited in its ability to dispose of illiquid investments during","page_number":127,"box":{"x":116,"y":620,"width":713,"height":12}},{"id":"f107b6fb-97ff-401f-a813-586128e45f2c","block_type":"box","text":"periods when shareholders are redeeming or selling their shares or the Fund’s net assets otherwise","page_number":127,"box":{"x":117,"y":635,"width":744,"height":12}},{"id":"dd47e978-a9e6-44a0-a61b-d862986cafae","block_type":"box","text":"shrink, the Fund will need to dispose of liquid securities to meet redemption requests and illiquid","page_number":127,"box":{"x":116,"y":651,"width":718,"height":12}},{"id":"bb7770d7-48fb-437e-8ef2-b927eaab3b0a","block_type":"box","text":"securities will become a larger portion of the Fund’s holdings. If illiquid investments exceed 15% of a","page_number":127,"box":{"x":116,"y":666,"width":745,"height":12}},{"id":"4c37b06e-2ea8-4cdc-a918-3a63ff1a875c","block_type":"box","text":"Fund’s net assets, the Liquidity Rule (as defined below) and the Liquidity Program (as defined below)","page_number":127,"box":{"x":117,"y":682,"width":749,"height":12}},{"id":"9aa8475c-1228-4d33-aa27-682d46ca9fb4","block_type":"box","text":"will require that certain remedial actions be taken. Illiquid investments may trade at a discount from","page_number":127,"box":{"x":116,"y":697,"width":733,"height":12}},{"id":"0b23897f-7288-42dd-92c5-800a29f3899f","block_type":"box","text":"comparable liquid investments. Investment of a Fund’s assets in illiquid investments may restrict the","page_number":127,"box":{"x":116,"y":713,"width":742,"height":12}},{"id":"45079ce3-8d0b-4198-b836-1202414d6514","block_type":"box","text":"ability of the Fund to dispose of its investments in a timely fashion and for a fair price as well as its","page_number":127,"box":{"x":116,"y":728,"width":728,"height":12}},{"id":"17a64050-1e96-449a-a9c8-5b7368bb6437","block_type":"box","text":"ability to take advantage of market opportunities. The risks associated with illiquidity will be particularly","page_number":127,"box":{"x":116,"y":744,"width":760,"height":12}},{"id":"b2bc3269-609f-468e-8cd2-3bfde9464839","block_type":"box","text":"acute where a Fund’s operations require cash, such as when the Fund redeems shares or pays","page_number":127,"box":{"x":116,"y":759,"width":709,"height":12}},{"id":"56963e96-7108-4bc1-b938-eeab57c1b89c","block_type":"box","text":"dividends, and could result in the Fund borrowing to meet short-term cash requirements or incurring","page_number":127,"box":{"x":116,"y":775,"width":740,"height":12}},{"id":"27e24c7d-49e5-4607-80fb-477e6e274c44","block_type":"box","text":"capital losses on the sale of illiquid investments.","page_number":127,"box":{"x":116,"y":790,"width":355,"height":12}},{"id":"b5e6607c-d49b-414d-8e86-202a12413184","block_type":"box","text":"Index Funds.","page_number":127,"box":{"x":116,"y":823,"width":102,"height":9}},{"id":"0f5134de-2540-4687-beee-c6b94504fb58","block_type":"box","text":"Cash Flows; Expenses.","page_number":127,"box":{"x":117,"y":846,"width":173,"height":12}},{"id":"d8536d89-1696-49f0-ba5c-6a4f7b6bb058","block_type":"box","text":"The ability of each Fund to satisfy its investment objective depends to some","page_number":127,"box":{"x":291,"y":846,"width":573,"height":12}},{"id":"d3c7dcef-f444-4ba8-9521-e6980c7041dd","block_type":"box","text":"extent on the Manager’s ability to manage cash flow (primarily from purchases and redemptions and","page_number":127,"box":{"x":116,"y":862,"width":749,"height":12}},{"id":"c75e8ef6-5849-4190-9ac6-8674b465de23","block_type":"box","text":"distributions from the Fund’s investments). The Manager will make investment changes to a Fund’s","page_number":127,"box":{"x":116,"y":877,"width":742,"height":12}},{"id":"ad80ab97-b38f-4af3-bdf9-67f9ae3d60bb","block_type":"box","text":"II-40","page_number":127,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6db43d62-bd24-4331-8ef4-58bacb81c675","block_type":"box","text":"NM1026U-6030748-127/260","page_number":127,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e4cad5c0-ad0d-4b3f-8d65-a0c567afa2bd","block_type":"box","text":"portfolio to accommodate cash flow while continuing to seek to replicate the total return of the Fund’s","page_number":128,"box":{"x":117,"y":87,"width":753,"height":12}},{"id":"f304b07a-e740-4a18-a248-4d1bf6578e59","block_type":"box","text":"target index. Investors should also be aware that the investment performance of each index is a","page_number":128,"box":{"x":116,"y":102,"width":716,"height":13}},{"id":"25ea3f14-6880-4fe3-811a-05ef56e5970d","block_type":"box","text":"hypothetical number which does not take into account brokerage commissions and other transaction","page_number":128,"box":{"x":117,"y":118,"width":749,"height":12}},{"id":"150c06a6-0e59-4a5a-8f24-54f9f8ed750a","block_type":"box","text":"costs, custody and other costs of investing, and any incremental operating costs (e.g., transfer agency","page_number":128,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"88d356bf-3be9-4cab-a95a-1e4b9bdd188e","block_type":"box","text":"and accounting costs) that will be borne by the Funds. Finally, since each Fund seeks to replicate the","page_number":128,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"141f3304-a7af-46f8-bc97-7424b2cf4603","block_type":"box","text":"total return of its target index, the Manager generally will not attempt to judge the merits of any","page_number":128,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"56d42016-3bbc-4c10-8b01-cacbd76c8acd","block_type":"box","text":"particular security as an investment.","page_number":128,"box":{"x":117,"y":180,"width":272,"height":12}},{"id":"ffd06f68-2293-42e8-a92b-da9fa23f1fca","block_type":"box","text":"Tracking Error Risk","page_number":128,"box":{"x":118,"y":211,"width":143,"height":12}},{"id":"7fca58e0-5b10-486c-8d3e-25a5375af030","block_type":"box","text":". A Fund may be subject to tracking error, which is the divergence of the Fund’s","page_number":128,"box":{"x":261,"y":211,"width":594,"height":12}},{"id":"b4e85132-49e6-4593-b3f0-003aa8f74390","block_type":"box","text":"performance from that of the Underlying Index. Tracking error may occur because of differences","page_number":128,"box":{"x":117,"y":227,"width":718,"height":12}},{"id":"ec6c2aa3-53ca-44cf-85d4-e2bcb570101f","block_type":"box","text":"between the securities and other instruments held in the Fund’s portfolio and those included in the","page_number":128,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"dbcbe509-f196-4adf-aa3a-8fd2a95a1ce6","block_type":"box","text":"Underlying Index, pricing differences (including, as applicable, differences between a security’s price at","page_number":128,"box":{"x":117,"y":258,"width":768,"height":12}},{"id":"c90b5280-2223-40b3-a1b5-2eea21de7b3d","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":128,"box":{"x":116,"y":273,"width":767,"height":12}},{"id":"2dc1165f-cbe6-41ea-af8d-31a905c5640a","block_type":"box","text":"asset value), differences in transaction costs incurred by the Fund, the Fund’s holding of uninvested","page_number":128,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"07bd2623-77fc-4cc3-9391-27472056fa7c","block_type":"box","text":"cash, differences in timing of the accrual of or the valuation of dividends or other distributions, interest,","page_number":128,"box":{"x":116,"y":304,"width":764,"height":12}},{"id":"2e7515ec-ec08-44e4-88ab-7da17bed4edc","block_type":"box","text":"the requirements to maintain pass-through tax treatment, portfolio transactions carried out to minimize","page_number":128,"box":{"x":116,"y":320,"width":763,"height":12}},{"id":"abc5ca1d-f1f6-43a0-b998-4b306d543f6a","block_type":"box","text":"the distribution of capital gains to shareholders, changes to the Underlying Index or the costs to the","page_number":128,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"aefb260d-776d-419a-8ed6-250a212e12b4","block_type":"box","text":"Fund of complying with various new or existing regulatory requirements. These risks may be","page_number":128,"box":{"x":117,"y":351,"width":689,"height":12}},{"id":"6d4865c9-3f64-4031-84d1-43edcec0d315","block_type":"box","text":"heightened during times of increased market volatility or other unusual market conditions. In addition,","page_number":128,"box":{"x":117,"y":366,"width":755,"height":12}},{"id":"439d5e3f-89eb-4855-829a-66630ac94652","block_type":"box","text":"tracking error may result because the Fund incurs fees and expenses, while the Underlying Index does","page_number":128,"box":{"x":116,"y":382,"width":769,"height":12}},{"id":"b592756e-14c0-4e5d-89f4-5619361c9d89","block_type":"box","text":"not.","page_number":128,"box":{"x":117,"y":397,"width":31,"height":10}},{"id":"625a7805-53cd-4aa5-bdac-1bba18664c71","block_type":"box","text":"When an issuer is introduced by an index provider into an index tracked by a Fund, the Manager may","page_number":128,"box":{"x":116,"y":428,"width":758,"height":12}},{"id":"e9f32605-77f4-4556-bd2e-a1681bec35c4","block_type":"box","text":"conduct an analysis on such issuer’s securities to identify and screen for outlier high risk behavior","page_number":128,"box":{"x":116,"y":444,"width":729,"height":12}},{"id":"312be282-8318-4e9f-8b4e-758e41c79d74","block_type":"box","text":"(such as rapid or unusual price growth that does not appear to be supported by publicly available","page_number":128,"box":{"x":117,"y":459,"width":724,"height":12}},{"id":"dacf4ebd-86b2-475c-b287-61e8e0e5051a","block_type":"box","text":"information on the business and assets of the issuer, unusual or significant short interest or lending","page_number":128,"box":{"x":117,"y":475,"width":740,"height":12}},{"id":"cb395fa7-72f5-476d-88fc-7018a87c33d3","block_type":"box","text":"activity, negative sentiment, suspended trading or incorrect free-float calculations, which could be","page_number":128,"box":{"x":116,"y":490,"width":728,"height":12}},{"id":"b88559b1-13ca-43f3-96f5-b225692761df","block_type":"box","text":"indicators of possible irregularities, miscalculations or even fraud). If it identifies such behavior, the","page_number":128,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"feb6b6f1-772c-4b11-ae4b-eb0d78a8443e","block_type":"box","text":"Manager may, where appropriate, alert the index provider as to the alleged issue. The index provider","page_number":128,"box":{"x":117,"y":521,"width":753,"height":12}},{"id":"61ad0788-f3f2-43aa-94e3-d54a00cdd035","block_type":"box","text":"has sole discretion for the determination as to whether to continue to include the issuer’s securities in","page_number":128,"box":{"x":117,"y":537,"width":755,"height":9}},{"id":"0ba84e2d-8280-4386-952b-c14e169b58f3","block_type":"box","text":"the rebalancing of its index. If the securities continue to be included in the index, the Manager may","page_number":128,"box":{"x":116,"y":552,"width":736,"height":12}},{"id":"29f85c99-ceb7-4803-b00f-37a198d3d8bf","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":128,"box":{"x":117,"y":568,"width":732,"height":12}},{"id":"df92770c-662c-49ba-9803-c919c354f85e","block_type":"box","text":"subject to increased tracking error due to the divergence in the securities included in its portfolio from","page_number":128,"box":{"x":116,"y":583,"width":756,"height":12}},{"id":"24124e6a-2314-47d3-a274-7604f84e135c","block_type":"box","text":"its underlying index. The application of the abovementioned analysis and screening to a Fund and its","page_number":128,"box":{"x":117,"y":599,"width":753,"height":12}},{"id":"b99564d8-efc8-4463-8133-3abaefa6e421","block_type":"box","text":"Underlying Index is in the sole discretion of the Manager and its affiliates (without any guarantees).","page_number":128,"box":{"x":117,"y":614,"width":738,"height":12}},{"id":"3a5f1106-0bb9-41c7-a0ac-f27085843cc5","block_type":"box","text":"The analysis and screening may not exclude any or all high risk securities from an Underlying Index or","page_number":128,"box":{"x":116,"y":630,"width":765,"height":12}},{"id":"81896c3c-fe9c-4ffc-b127-6e08d36356ee","block_type":"box","text":"a Fund’s portfolio, and the inclusion of such securities will result in an adverse impact to the Fund’s net","page_number":128,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"39053d44-3517-43b5-a506-32fb14880c76","block_type":"box","text":"asset value if one or more such securities declines in value.","page_number":128,"box":{"x":116,"y":661,"width":442,"height":9}},{"id":"58e0edcc-38ec-48b9-ae2a-e9e909a23c8a","block_type":"box","text":"S&P 500","page_number":128,"box":{"x":117,"y":692,"width":65,"height":9}},{"id":"3ad7b2c4-15c2-4f34-9142-3492df9fff60","block_type":"box","text":"®","page_number":128,"box":{"x":183,"y":691,"width":9,"height":7}},{"id":"f4360137-349a-47ad-a876-2e356f543d5f","block_type":"box","text":"Index (“S&P 500”)","page_number":128,"box":{"x":197,"y":692,"width":133,"height":12}},{"id":"b54a2a24-c648-4378-84f5-e0be17c3297a","block_type":"box","text":". “Standard & Poor’s","page_number":128,"box":{"x":332,"y":692,"width":150,"height":9}},{"id":"24ae5033-e0bc-4adb-909a-50c34a01cbc8","block_type":"box","text":"®","page_number":128,"box":{"x":482,"y":691,"width":10,"height":7}},{"id":"07c5515b-44cd-457c-a346-6a14332c1adf","block_type":"box","text":",” “S&P","page_number":128,"box":{"x":493,"y":692,"width":52,"height":11}},{"id":"7d260b58-b79b-48de-8b5e-9262a39122c0","block_type":"box","text":"®","page_number":128,"box":{"x":546,"y":691,"width":9,"height":7}},{"id":"8ca52dc7-b1e8-4616-88b9-bd0166618074","block_type":"box","text":",” “S&P 500","page_number":128,"box":{"x":557,"y":692,"width":85,"height":11}},{"id":"ea4d1cfd-ac1b-40a4-98e7-6a1b0bfa29af","block_type":"box","text":"®","page_number":128,"box":{"x":642,"y":691,"width":10,"height":7}},{"id":"b8c2dc77-cf38-43db-8d90-c26449a56d33","block_type":"box","text":",” “Standard & Poor’s 500,”","page_number":128,"box":{"x":653,"y":692,"width":198,"height":11}},{"id":"2908cf74-61c7-4e1e-90c6-bd8e97a1bb69","block_type":"box","text":"and “500” are trademarks of S&P Global Inc. and have been licensed for use by certain mutual funds","page_number":128,"box":{"x":116,"y":707,"width":749,"height":12}},{"id":"042a4df5-400a-4f0b-bb57-d41b79171b5e","block_type":"box","text":"sponsored and advised by BlackRock or its affiliates (“BlackRock Funds”). No Fund is sponsored,","page_number":128,"box":{"x":116,"y":723,"width":723,"height":12}},{"id":"cf9047cb-f4a8-43b2-bf5b-c7bf638ead3c","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":128,"box":{"x":116,"y":738,"width":715,"height":12}},{"id":"f1329ba3-75c8-49bf-9a73-83a87e18ec2e","block_type":"box","text":"regarding the advisability of investing in any Fund. S&P makes no representation or warranty, express","page_number":128,"box":{"x":117,"y":754,"width":757,"height":12}},{"id":"f768d942-2fcf-49e8-bcff-1b4b218d34fe","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":128,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"c9982ddc-0b2a-4c1a-9e89-c73a9ef3ae43","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":128,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"5668fbd4-2158-4714-b63f-6777252236c8","block_type":"box","text":"stock market performance. S&P’s only relationship to certain Funds is the licensing of certain","page_number":128,"box":{"x":116,"y":800,"width":689,"height":12}},{"id":"a4807f4a-6b08-40a2-9cb2-0cf46969d195","block_type":"box","text":"trademarks and trade names of S&P and of the S&P 500 which is determined, composed and","page_number":128,"box":{"x":116,"y":816,"width":695,"height":12}},{"id":"c5d5a373-9cf7-4c6b-8471-1b55d897598e","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":128,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"8c57778e-664b-4c97-b151-76950e6e3c40","block_type":"box","text":"the owners of shares of a Fund into consideration in determining, composing or calculating the S&P","page_number":128,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"f21302c8-4b68-4a73-8947-9c8a03ef41df","block_type":"box","text":"500. 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To the extent a Fund invests in these types of","page_number":130,"box":{"x":116,"y":816,"width":755,"height":12}},{"id":"3849a914-7701-435e-adbb-56f81202d706","block_type":"box","text":"securities, the Fund’s return on such securities will be subject to risk with respect to the value of the","page_number":130,"box":{"x":116,"y":831,"width":744,"height":12}},{"id":"ab756afc-4d5e-48c1-887c-a0e3226a8d4c","block_type":"box","text":"particular index: that is, if the value of the index falls, the value of the indexed securities owned by the","page_number":130,"box":{"x":117,"y":847,"width":758,"height":12}},{"id":"8da8e028-6246-489d-8a01-515c88fa1607","block_type":"box","text":"Fund will fall. Interest and principal payable on certain securities may also be based on relative","page_number":130,"box":{"x":117,"y":862,"width":708,"height":12}},{"id":"8b9d3a2f-82f8-42da-90e2-9f1a2b2f98bd","block_type":"box","text":"changes among particular indices. A Fund may also invest in so-called “inverse floating obligations” or","page_number":130,"box":{"x":116,"y":878,"width":763,"height":12}},{"id":"1beb61b4-d979-455f-bc0d-daecaff49c23","block_type":"box","text":"II-43","page_number":130,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"78c9c054-84f0-4bff-8331-d91c9c3c7051","block_type":"box","text":"NM1026U-6030748-130/260","page_number":130,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"9769780c-f49b-46cf-8a09-72418478a661","block_type":"box","text":"“residual interest bonds” on which the interest rates vary inversely with a floating rate (which may be","page_number":131,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"b4c1cda9-da5e-4b1b-93d3-7c0d6e851405","block_type":"box","text":"reset periodically by a Dutch auction, a remarketing agent, or by reference to a short-term tax-exempt","page_number":131,"box":{"x":117,"y":102,"width":758,"height":13}},{"id":"1b2a0a8d-c56b-484b-91ca-65924279a796","block_type":"box","text":"interest rate index). A Fund may purchase synthetically-created inverse floating rate bonds evidenced","page_number":131,"box":{"x":117,"y":118,"width":759,"height":12}},{"id":"fd0a835b-218f-4621-bd85-9abb08122822","block_type":"box","text":"by custodial or trust receipts. Generally, income on inverse floating rate bonds will decrease when","page_number":131,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"2121a9bb-a244-4921-bec3-6ed660736a60","block_type":"box","text":"interest rates increase, and will increase when interest rates decrease. Such securities have the effect","page_number":131,"box":{"x":117,"y":149,"width":762,"height":11}},{"id":"bee67271-261c-43ad-b9c6-f0a62b996e50","block_type":"box","text":"of providing a degree of investment leverage, since they may increase or decrease in value in","page_number":131,"box":{"x":116,"y":165,"width":701,"height":12}},{"id":"b4cef35d-6736-43a7-9f73-ce703e408e0f","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":131,"box":{"x":117,"y":180,"width":764,"height":12}},{"id":"5df671b9-4032-4c9f-8a5e-1ecc0f4ab0a4","block_type":"box","text":"which fixed-rate securities increase or decrease in response to such changes. As a result, the market","page_number":131,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"b8ee0122-2bda-456b-8b06-a0ccd6c31fcf","block_type":"box","text":"values of such securities will generally be more volatile than the market values of fixed-rate securities.","page_number":131,"box":{"x":116,"y":211,"width":761,"height":12}},{"id":"7c1ed9ef-ef74-4032-8d10-3f4809ea8521","block_type":"box","text":"To seek to limit the volatility of these securities, a Fund may purchase inverse floating obligations that","page_number":131,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"79833e96-7cd0-4c69-9885-1fd623df6294","block_type":"box","text":"have shorter-term maturities or that contain limitations on the extent to which the interest rate may","page_number":131,"box":{"x":117,"y":242,"width":732,"height":12}},{"id":"ab84bf77-1061-4013-b440-43079ef5c4cc","block_type":"box","text":"vary. Certain investments in such obligations may be illiquid. The Manager believes that indexed and","page_number":131,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"028301f9-f7e3-486a-92cd-42bb7e0f85df","block_type":"box","text":"inverse floating obligations represent flexible portfolio management instruments for a Fund that allow","page_number":131,"box":{"x":117,"y":273,"width":751,"height":12}},{"id":"d80d0e64-0942-4b86-a720-5416e95a3030","block_type":"box","text":"the Fund to seek potential investment rewards, hedge other portfolio positions or vary the degree of","page_number":131,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"1a19cbe4-3020-4e46-b662-ec336da9f164","block_type":"box","text":"investment leverage relatively efficiently under different market conditions. A Fund may invest in","page_number":131,"box":{"x":117,"y":304,"width":716,"height":12}},{"id":"049ab430-e334-416f-ace8-c8a0e50a8c74","block_type":"box","text":"indexed and inverse securities for hedging purposes or to seek to increase returns. When used for","page_number":131,"box":{"x":117,"y":320,"width":734,"height":12}},{"id":"c4593a06-7f39-4384-afa0-6271b6a0126c","block_type":"box","text":"hedging purposes, indexed and inverse securities involve correlation risk. Furthermore, where such a","page_number":131,"box":{"x":117,"y":335,"width":755,"height":12}},{"id":"ff9e7bb0-7065-4bb3-ad44-5ba8f3013ee1","block_type":"box","text":"security includes a contingent liability, in the event of an adverse movement in the underlying index or","page_number":131,"box":{"x":116,"y":351,"width":759,"height":12}},{"id":"4ea8248e-3bb7-4934-a6e8-b449c8492a80","block_type":"box","text":"interest rate, a Fund may be required to pay substantial additional margin to maintain the position.","page_number":131,"box":{"x":117,"y":366,"width":731,"height":12}},{"id":"7f51cd0d-72d5-4b26-9252-7e19f0699ac5","block_type":"box","text":"The Funds may invest up to 10% of their total assets in leveraged inverse floating rate debt","page_number":131,"box":{"x":116,"y":397,"width":682,"height":12}},{"id":"18bb27d7-062f-46dd-936a-3682b528d724","block_type":"box","text":"instruments (“inverse floaters”). Inverse floaters are securities the potential of which is inversely related","page_number":131,"box":{"x":117,"y":413,"width":768,"height":12}},{"id":"3194c2b8-e036-4448-b784-5da1d34d3388","block_type":"box","text":"to changes in interest rates. In general, the return on inverse floaters will decrease when short-term","page_number":131,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"9687ef5a-641f-4f1d-99d4-438b6fb68fb8","block_type":"box","text":"interest rates increase and increase when short-term rates decrease. Municipal tender option bonds,","page_number":131,"box":{"x":117,"y":444,"width":751,"height":12}},{"id":"d0ae58ae-9cd9-41aa-be51-f68eed5c962b","block_type":"box","text":"both taxable and tax-exempt, which may include inverse floating rate debt instruments, (including","page_number":131,"box":{"x":117,"y":459,"width":725,"height":12}},{"id":"8a574f88-4825-4bd2-9a02-ecd13b06aa34","block_type":"box","text":"residual interests thereon) are excluded from this 10% limitation.","page_number":131,"box":{"x":117,"y":475,"width":483,"height":12}},{"id":"56edd5ca-b8be-4731-929a-e96603961be4","block_type":"box","text":"Inflation Risk.","page_number":131,"box":{"x":116,"y":506,"width":109,"height":9}},{"id":"8d5ed8cb-c4be-4032-b4df-32918aabb6b1","block_type":"box","text":"Like all funds, the Funds are subject to inflation risk. Inflation risk is the risk that the","page_number":131,"box":{"x":226,"y":506,"width":627,"height":12}},{"id":"27c19ec5-29c9-4aab-9ca9-a68adf5b3bed","block_type":"box","text":"present value of assets or income from investments will be less in the future as inflation decreases the","page_number":131,"box":{"x":117,"y":521,"width":763,"height":12}},{"id":"40c3cc5b-e8cb-4586-a901-3ee4324ccc26","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":131,"box":{"x":116,"y":537,"width":739,"height":12}},{"id":"51ac2edd-eee6-4d00-a0db-b7bbc9307d74","block_type":"box","text":"value of a Fund’s distributions. Inflation rates may change frequently and significantly due to a number","page_number":131,"box":{"x":116,"y":552,"width":764,"height":12}},{"id":"57012547-5d2a-484e-bcb6-db92805fefeb","block_type":"box","text":"of potential factors, including, among others, unexpected economic shifts or changes in fiscal or","page_number":131,"box":{"x":116,"y":568,"width":716,"height":12}},{"id":"1055c8f9-0d07-4e2f-b6d8-d3ff2676b3b0","block_type":"box","text":"monetary policies.","page_number":131,"box":{"x":117,"y":583,"width":139,"height":12}},{"id":"1b34e5fd-a49a-4b3c-9ad9-ea0221e2f01a","block_type":"box","text":"Initial Public Offering (“IPO”) Risk.","page_number":131,"box":{"x":116,"y":614,"width":275,"height":12}},{"id":"a91daae3-aaef-4ada-b44d-75979abebdf9","block_type":"box","text":"The volume of IPOs and the levels at which the newly issued","page_number":131,"box":{"x":392,"y":614,"width":462,"height":12}},{"id":"c878bfcc-a34d-4a2f-9100-b80a699be1c2","block_type":"box","text":"stocks trade in the secondary market are affected by the performance of the stock market overall. If","page_number":131,"box":{"x":116,"y":630,"width":743,"height":12}},{"id":"bcc51996-9115-4e68-9fab-d8ef80dd2b6c","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":131,"box":{"x":117,"y":645,"width":732,"height":12}},{"id":"444a252a-4424-4e49-baff-58617d12bed3","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":131,"box":{"x":116,"y":661,"width":744,"height":12}},{"id":"2e0263d3-a78d-4fa8-a83d-9e4f81e53aad","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":131,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"cdfc4d45-401a-46b8-b82c-42cfdd1f7131","block_type":"box","text":"to greater and more unpredictable price changes than more established stocks. IPOs have the","page_number":131,"box":{"x":116,"y":692,"width":701,"height":12}},{"id":"4f7dbaf7-dad2-4aef-a9bc-a92e3330a4de","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":131,"box":{"x":117,"y":707,"width":751,"height":12}},{"id":"2ea10ed5-07ee-4b2e-9329-58d333b6883e","block_type":"box","text":"time given possible price volatility. This may result in increased portfolio turnover and expenses, such","page_number":131,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"5e5d8a3c-5c0a-4e2e-b008-9ef7b9cee88c","block_type":"box","text":"as commissions and transaction costs, and potentially result in taxable gains that the Fund will","page_number":131,"box":{"x":116,"y":738,"width":699,"height":12}},{"id":"2784eec3-dba2-45e6-8b65-22e68b495c67","block_type":"box","text":"subsequently distribute to shareholders. There is no assurance that any Fund will have access to","page_number":131,"box":{"x":116,"y":754,"width":720,"height":12}},{"id":"d4c817b7-9a0c-4b18-b7b5-320d3437be69","block_type":"box","text":"profitable IPOs and therefore investors should not rely on any past gains from IPOs as an indication of","page_number":131,"box":{"x":117,"y":769,"width":759,"height":12}},{"id":"6a370eae-ec3f-4aa5-9727-507d7a8ba9df","block_type":"box","text":"future performance. The investment performance of a Fund during periods when it is unable to invest","page_number":131,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"4801fa42-5b52-40ed-a509-07a370dd920c","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":131,"box":{"x":116,"y":800,"width":763,"height":12}},{"id":"02498c06-97c5-419e-b852-bc9a9d2cb5e8","block_type":"box","text":"Fund increases in size, the impact of IPOs on its performance will generally decrease. Securities","page_number":131,"box":{"x":117,"y":816,"width":716,"height":12}},{"id":"ba030c89-7813-4ea4-bf50-94fb437ed470","block_type":"box","text":"issued in IPOs are subject to many of the same risks as investing in companies with smaller market","page_number":131,"box":{"x":117,"y":831,"width":743,"height":12}},{"id":"ab3e3f59-c91f-49f6-8925-8a6665281b2f","block_type":"box","text":"capitalizations. Securities issued in IPOs have no trading history, and information about the companies","page_number":131,"box":{"x":116,"y":847,"width":768,"height":12}},{"id":"ded71a99-390f-42ee-84b7-24770bd80c2e","block_type":"box","text":"may be available for very limited periods.","page_number":131,"box":{"x":117,"y":862,"width":308,"height":12}},{"id":"08696162-c0dc-40d5-9acb-a6f536b77d95","block_type":"box","text":"II-44","page_number":131,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"568cdee0-e8b4-46e8-8755-2550e9958cf0","block_type":"box","text":"NM1026U-6030748-131/260","page_number":131,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5e0987fc-18cd-4b7a-9cdd-3b7229ad0969","block_type":"box","text":"Investment in Emerging Markets.","page_number":132,"box":{"x":116,"y":87,"width":268,"height":12}},{"id":"e320e958-41fc-4e56-a613-51f9c6d24672","block_type":"box","text":"General.","page_number":132,"box":{"x":117,"y":110,"width":68,"height":10}},{"id":"cb6c674c-b295-45a4-8849-c4b5d235d521","block_type":"box","text":"Certain Funds may invest in the securities of issuers domiciled in various countries with emerging","page_number":132,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"350f6816-18d1-46c6-b7a0-9105c0876d11","block_type":"box","text":"capital markets. Unless otherwise provided in a Fund’s Prospectus, a country with an emerging capital","page_number":132,"box":{"x":116,"y":149,"width":765,"height":12}},{"id":"4cf0f25a-aeb3-4d4c-a17d-8942551c77c1","block_type":"box","text":"market is any country that is (i) generally recognized to be an emerging market country by the","page_number":132,"box":{"x":117,"y":165,"width":700,"height":12}},{"id":"ce770bd2-d171-44ee-a435-4fc5ac469951","block_type":"box","text":"international financial community, such as the International Finance Corporation, or","page_number":132,"box":{"x":117,"y":180,"width":617,"height":12}},{"id":"39cb2332-d3ff-426c-9327-5f198987ce64","block_type":"box","text":"determined by the","page_number":132,"box":{"x":739,"y":180,"width":139,"height":12}},{"id":"a8ddd320-fdc8-48e9-bde6-e22cecd1ef2d","block_type":"box","text":"World Bank to have a low, middle or middle upper income economy; (ii) classified by the United","page_number":132,"box":{"x":116,"y":196,"width":714,"height":12}},{"id":"11cf5c6d-75c8-4113-8264-87087100fba4","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":132,"box":{"x":117,"y":211,"width":762,"height":12}},{"id":"ebc66b44-d124-4da1-b8ae-fb7e923d8899","block_type":"box","text":"representative of emerging markets. Countries with emerging markets can be found in regions such as","page_number":132,"box":{"x":117,"y":227,"width":766,"height":12}},{"id":"22614793-1818-4275-a579-f43357195e7a","block_type":"box","text":"Asia, Latin America, Eastern Europe and Africa.","page_number":132,"box":{"x":116,"y":242,"width":361,"height":12}},{"id":"191796f4-22da-43bb-b52e-5f9cbd08556f","block_type":"box","text":"Investments in the securities of issuers domiciled in countries with emerging capital markets involve","page_number":132,"box":{"x":117,"y":273,"width":743,"height":12}},{"id":"2b1293f4-5cfb-44f9-a600-4cad9dcb84c9","block_type":"box","text":"certain additional risks that do not generally apply to investments in securities of issuers in more","page_number":132,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"1919ace9-1adc-468a-8882-64f6f70e6e62","block_type":"box","text":"developed capital markets, such as (i) low or non-existent trading volume, resulting in market illiquidity","page_number":132,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"8feccbe6-6eb7-4630-a405-5106d89b0587","block_type":"box","text":"and increased volatility in prices for such securities, as compared to securities of comparable issuers in","page_number":132,"box":{"x":116,"y":320,"width":771,"height":12}},{"id":"727f937a-ba35-4eed-bcdb-bd33c3d72744","block_type":"box","text":"more developed capital markets; (ii) uncertain national policies and social, political and economic","page_number":132,"box":{"x":117,"y":335,"width":723,"height":12}},{"id":"baa76185-d3d8-47a0-8390-3b1cccee9ef9","block_type":"box","text":"instability, increasing the potential for expropriation of assets, confiscatory taxation, high rates of","page_number":132,"box":{"x":117,"y":351,"width":718,"height":12}},{"id":"ca131681-1486-44cb-ac9c-4226827e6dff","block_type":"box","text":"inflation or unfavorable diplomatic developments; (iii) possible fluctuations in exchange rates, differing","page_number":132,"box":{"x":117,"y":366,"width":758,"height":12}},{"id":"a57084f4-4843-4854-b423-9846386caf16","block_type":"box","text":"legal systems and the existence or possible imposition of exchange controls, custodial restrictions or","page_number":132,"box":{"x":117,"y":382,"width":750,"height":12}},{"id":"1461288d-27ec-4681-bb81-a21c70112f2d","block_type":"box","text":"other foreign or U.S. Governmental laws or restrictions applicable to such investments; (iv) national","page_number":132,"box":{"x":116,"y":397,"width":741,"height":12}},{"id":"061e76b0-5da1-4744-b513-3b4d82900ac2","block_type":"box","text":"policies that may limit a Fund’s investment opportunities such as restrictions on investment in issuers","page_number":132,"box":{"x":117,"y":413,"width":754,"height":12}},{"id":"ee25b16f-8785-423d-95a5-19fdec28866d","block_type":"box","text":"or industries deemed sensitive to national interests; and (v) the lack or relatively early development of","page_number":132,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"e8504c13-8383-4c3f-a302-d6f41a59d197","block_type":"box","text":"legal structures governing private and foreign investments and private property. In addition to","page_number":132,"box":{"x":117,"y":444,"width":695,"height":12}},{"id":"9c816e99-47ac-4659-a576-2b9765397fd8","block_type":"box","text":"withholding taxes on investment income, some countries with emerging markets may impose","page_number":132,"box":{"x":116,"y":459,"width":695,"height":12}},{"id":"3ca3d3f6-24bc-4640-94e3-d71be7c0c1ae","block_type":"box","text":"differential capital gains taxes on foreign investors.","page_number":132,"box":{"x":116,"y":475,"width":381,"height":12}},{"id":"1989d2f6-5fb5-4897-a4ca-9dbcdb7a1fa7","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":132,"box":{"x":117,"y":506,"width":699,"height":12}},{"id":"4b56cbba-95bb-4f4e-9a88-4f0080eb8246","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":132,"box":{"x":116,"y":521,"width":726,"height":12}},{"id":"9d83000c-2348-4507-9fbc-eec4a5821af2","block_type":"box","text":"stability characteristic of more developed countries. In such a dynamic environment, there can be no","page_number":132,"box":{"x":116,"y":537,"width":750,"height":12}},{"id":"ebe64064-a5fd-464f-aaaf-5bdcfea1e919","block_type":"box","text":"assurance that any or all of these capital markets will continue to present viable investment","page_number":132,"box":{"x":116,"y":552,"width":681,"height":12}},{"id":"0a86268f-6edc-44aa-8f7c-dbc807232b8b","block_type":"box","text":"opportunities for a Fund. In the past, governments of such nations have expropriated substantial","page_number":132,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"e2ac0d8b-b3fe-4c1d-8df9-1813954c6c6c","block_type":"box","text":"amounts of private property, and most claims of the property owners have never been fully settled.","page_number":132,"box":{"x":116,"y":583,"width":736,"height":12}},{"id":"abdb79c3-5266-48a8-beff-22a95fae417b","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":132,"box":{"x":116,"y":599,"width":752,"height":12}},{"id":"95f0709e-aca5-4d1a-b3c2-221f35dde52c","block_type":"box","text":"Fund could lose the entire value of its investments in the affected market. As a result the risks","page_number":132,"box":{"x":117,"y":614,"width":700,"height":10}},{"id":"8edc3b5b-1009-4f4f-90e7-66e037796e8b","block_type":"box","text":"described above, including the risks of nationalization or expropriation of assets, may be heightened. In","page_number":132,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"3300b495-5e01-4ae6-95c1-c9a79537d1f4","block_type":"box","text":"addition, unanticipated political or social developments may affect the value of investments in these","page_number":132,"box":{"x":116,"y":645,"width":742,"height":12}},{"id":"9f9bf5e4-9c88-41b5-9d08-25d9871e4e0d","block_type":"box","text":"countries and the availability to a Fund of additional investments. The small size and inexperience of","page_number":132,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"8f134107-a5b6-494b-a54c-7d7a46fb8cb3","block_type":"box","text":"the securities markets in certain of these countries and the limited volume of trading in securities in","page_number":132,"box":{"x":116,"y":676,"width":732,"height":12}},{"id":"87a43640-e7ac-448c-820a-2123523db178","block_type":"box","text":"these countries may make investments in the countries illiquid and more volatile than investments in","page_number":132,"box":{"x":116,"y":692,"width":742,"height":12}},{"id":"d885b006-2633-436d-ada4-395e7967dd6e","block_type":"box","text":"more established markets.","page_number":132,"box":{"x":117,"y":707,"width":195,"height":10}},{"id":"754da1e0-9aea-4482-a473-045f06811b4d","block_type":"box","text":"Also, there may be less publicly available information about issuers in emerging markets than would be","page_number":132,"box":{"x":116,"y":738,"width":765,"height":12}},{"id":"e3117b79-7652-4367-b801-4248f9cb2bba","block_type":"box","text":"available about issuers in more developed capital markets, and such issuers may not be subject to","page_number":132,"box":{"x":116,"y":754,"width":732,"height":12}},{"id":"5fcbd1c2-b12b-44a5-84a1-0eb5b67c5796","block_type":"box","text":"accounting, auditing and financial reporting standards and requirements comparable to those to which","page_number":132,"box":{"x":116,"y":769,"width":756,"height":12}},{"id":"dd437d73-9ffd-4d19-8b20-13c58cd6aa81","block_type":"box","text":"U.S. companies are subject. In certain countries with emerging capital markets, reporting standards","page_number":132,"box":{"x":117,"y":785,"width":737,"height":12}},{"id":"7f683a8a-60b0-4c2c-b4b1-fd92a5a617f2","block_type":"box","text":"vary widely. As a result, traditional investment measurements used in the United States, such as price/","page_number":132,"box":{"x":116,"y":800,"width":762,"height":12}},{"id":"a4bcc3c8-03c8-4e7a-bc04-6eabd840b9a0","block_type":"box","text":"earnings ratios, may not be applicable. Emerging market securities may be substantially less liquid","page_number":132,"box":{"x":116,"y":816,"width":731,"height":12}},{"id":"6b9e95c6-70da-4d3e-98f6-592955483911","block_type":"box","text":"than, and more volatile than, those of mature markets, and company shares may be held by a limited","page_number":132,"box":{"x":116,"y":831,"width":755,"height":12}},{"id":"c5f49cf6-5f54-412e-8546-55cf2988c250","block_type":"box","text":"number of persons. This may adversely affect the timing and pricing of the Fund’s acquisition or","page_number":132,"box":{"x":117,"y":847,"width":715,"height":12}},{"id":"29beedd5-73db-46b4-afda-70b5adcee287","block_type":"box","text":"disposal of securities.","page_number":132,"box":{"x":116,"y":862,"width":165,"height":12}},{"id":"74d04fe7-33a4-4fd2-b9d1-1aa21ba48e5d","block_type":"box","text":"II-45","page_number":132,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"48a2a596-22b9-4d3b-9bf7-667d72764a98","block_type":"box","text":"NM1026U-6030748-132/260","page_number":132,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"84c1459e-93d3-41cf-9bdd-a80837b8f427","block_type":"box","text":"Practices in relation to settlement of securities transactions in emerging markets involve higher risks","page_number":133,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"fa4c33f0-1a2d-4118-95be-4f223093c5eb","block_type":"box","text":"than those in developed markets, in part because a Fund will need to use brokers and counterparties","page_number":133,"box":{"x":116,"y":103,"width":755,"height":11}},{"id":"e545dc4b-e42b-48f0-bb7c-2c1231192222","block_type":"box","text":"that are less well capitalized, and custody and registration of assets in some countries may be","page_number":133,"box":{"x":116,"y":118,"width":703,"height":12}},{"id":"d1577f26-8312-449d-abb8-818cb312ce6f","block_type":"box","text":"unreliable. The possibility of fraud, negligence, undue influence being exerted by the issuer or refusal","page_number":133,"box":{"x":117,"y":134,"width":754,"height":12}},{"id":"9605c478-9279-4562-8c80-dfe32eb098b7","block_type":"box","text":"to recognize ownership exists in some emerging markets, and, along with other factors, could result in","page_number":133,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"c98267ab-d1dc-4eb5-8d40-b1c8d7cc36fa","block_type":"box","text":"ownership registration being completely lost. A Fund would absorb any loss resulting from such","page_number":133,"box":{"x":116,"y":165,"width":712,"height":12}},{"id":"5118b35c-cf61-4466-9c73-653c014c75e3","block_type":"box","text":"registration problems and may have no successful claim for compensation.","page_number":133,"box":{"x":117,"y":180,"width":560,"height":12}},{"id":"c7cb65d9-29fe-4978-96a6-716ab72efc62","block_type":"box","text":"There could be additional impacts on the value of a Fund as a result of sustainability risks, in particular","page_number":133,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"055e40b5-698c-4fd2-b1e2-005df0ae1e96","block_type":"box","text":"those caused by environmental changes related to climate change, social issues (including relating to","page_number":133,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"44625a30-4c9c-4d05-b977-de77a28f7f1f","block_type":"box","text":"labor rights) and governance risk (including but not limited to risks around board independence,","page_number":133,"box":{"x":117,"y":242,"width":713,"height":12}},{"id":"8e332d2f-d0ab-45a5-a001-d9a71b299bf6","block_type":"box","text":"ownership and control, or audit and tax management). Additionally, disclosures or third-party data","page_number":133,"box":{"x":116,"y":258,"width":730,"height":12}},{"id":"a7e6ed8b-fece-481f-88a9-ba912e6d3358","block_type":"box","text":"coverage associated with sustainability risks is generally less available or transparent in these markets.","page_number":133,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"a4cc749f-b9b1-429e-8402-64f3e564b04c","block_type":"box","text":"Investment in non-dollar denominated securities including securities from issuers located in emerging","page_number":133,"box":{"x":117,"y":304,"width":755,"height":12}},{"id":"977b837c-3348-4e63-a247-01849302cb43","block_type":"box","text":"market countries may be on either a currency hedged or unhedged basis, and the Funds may hold","page_number":133,"box":{"x":117,"y":320,"width":735,"height":12}},{"id":"3359d7c1-42f4-4418-a9da-fb206c1e7883","block_type":"box","text":"from time to time various foreign currencies pending investment or conversion into U.S. dollars. Some","page_number":133,"box":{"x":116,"y":335,"width":761,"height":12}},{"id":"a364857e-b578-42e3-9e75-d327c68ddfa7","block_type":"box","text":"of these instruments may have the characteristics of futures contracts. In addition, certain Funds may","page_number":133,"box":{"x":116,"y":351,"width":757,"height":12}},{"id":"a3095c16-a560-4d1a-b23a-0ac263d92775","block_type":"box","text":"engage in foreign currency exchange transactions to seek to protect against changes in the level of","page_number":133,"box":{"x":116,"y":366,"width":742,"height":12}},{"id":"6d4e4f6f-9744-4e2e-933d-26a83f71366f","block_type":"box","text":"future exchange rates which would adversely affect the Fund’s performance. These investments and","page_number":133,"box":{"x":116,"y":382,"width":752,"height":12}},{"id":"35d92e5e-c63b-4e3c-bd5a-194f7316d3c8","block_type":"box","text":"transactions involving foreign securities, currencies, options (including options that relate to foreign","page_number":133,"box":{"x":116,"y":397,"width":738,"height":12}},{"id":"136b7af3-3abd-4c85-8f91-78f6fa636f75","block_type":"box","text":"currencies), futures, hedging and cross-hedging are described under “Derivatives.”","page_number":133,"box":{"x":116,"y":413,"width":619,"height":12}},{"id":"d0ee1fbf-5dab-4e9e-8a19-9010e3a82d81","block_type":"box","text":"Risks of Investing in Asia-Pacific Countries.","page_number":133,"box":{"x":116,"y":444,"width":328,"height":12}},{"id":"140b4bc9-2f44-4380-9c4a-66e97b5dec10","block_type":"box","text":"In addition to the risks of foreign investing and the risks of","page_number":133,"box":{"x":445,"y":444,"width":432,"height":12}},{"id":"a45cc9c1-798f-43e4-8ea4-f62e6d99558f","block_type":"box","text":"investing in developing markets, the developing market Asia-Pacific countries in which a Fund may","page_number":133,"box":{"x":117,"y":459,"width":738,"height":12}},{"id":"ebca8554-d736-42f4-a424-a78d7326912f","block_type":"box","text":"invest are subject to certain additional or specific risks. Certain Funds may make substantial","page_number":133,"box":{"x":117,"y":475,"width":687,"height":12}},{"id":"fcec7743-6c41-4feb-8d60-c1df47bd6cf3","block_type":"box","text":"investments in Asia-Pacific countries. In many of these markets, there is a high concentration of market","page_number":133,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"2af8df48-2dab-400f-8948-d0595a92d994","block_type":"box","text":"capitalization and trading volume in a small number of issuers representing a limited number of","page_number":133,"box":{"x":116,"y":506,"width":710,"height":12}},{"id":"ed1b0bd7-8f0e-4074-afdf-64fd0e590f9a","block_type":"box","text":"industries, as well as a high concentration of investors and financial intermediaries. Many of these","page_number":133,"box":{"x":117,"y":521,"width":730,"height":12}},{"id":"2f25409c-2ea6-4ff3-9078-eddd659478d6","block_type":"box","text":"markets also may be affected by developments with respect to more established markets in the region","page_number":133,"box":{"x":117,"y":537,"width":763,"height":12}},{"id":"8645272e-cf94-4610-a4c5-98eb4da3b618","block_type":"box","text":"such as in Japan and Hong Kong. Brokers in developing market Asia-Pacific countries typically are","page_number":133,"box":{"x":116,"y":552,"width":739,"height":12}},{"id":"90573f5c-397b-4227-9822-a8081533ec0f","block_type":"box","text":"fewer in number and less well capitalized than brokers in the United States. These factors, combined","page_number":133,"box":{"x":116,"y":568,"width":754,"height":12}},{"id":"a68090e5-cfc3-4d2f-b929-fb10b4efdc82","block_type":"box","text":"with the U.S. regulatory requirements for open-end investment companies and the restrictions on","page_number":133,"box":{"x":116,"y":583,"width":725,"height":12}},{"id":"91fb3f07-7fef-4b2f-9539-c935a1745e62","block_type":"box","text":"foreign investment discussed below, result in potentially fewer investment opportunities for a Fund and","page_number":133,"box":{"x":116,"y":599,"width":766,"height":12}},{"id":"bed7fee8-cb56-4adb-8923-06fec51e4235","block_type":"box","text":"may have an adverse impact on the investment performance of the Fund.","page_number":133,"box":{"x":117,"y":614,"width":550,"height":12}},{"id":"c6134a60-ec17-44f1-a0bb-c3d116d39800","block_type":"box","text":"Many of the developing market Asia-Pacific countries may be subject to a greater degree of economic,","page_number":133,"box":{"x":117,"y":645,"width":757,"height":12}},{"id":"a7d38094-fd1b-4211-aecb-d0f77b96e3e3","block_type":"box","text":"political and social instability than is the case in the United States and Western European countries.","page_number":133,"box":{"x":117,"y":661,"width":730,"height":12}},{"id":"8d4a8bfd-5fb0-4c0f-9e46-7316941f2404","block_type":"box","text":"Such instability may result from, among other things: (i) authoritarian governments or military","page_number":133,"box":{"x":116,"y":676,"width":681,"height":12}},{"id":"0b7bb422-6cce-458f-8a7c-6345474d8353","block_type":"box","text":"involvement in political and economic decision-making, including changes in government through extra","page_number":133,"box":{"x":117,"y":692,"width":759,"height":12}},{"id":"ae20df2b-e1e7-4722-8471-af833b5a3c09","block_type":"box","text":"constitutional means; (ii) popular unrest associated with demands for improved political, economic and","page_number":133,"box":{"x":116,"y":707,"width":751,"height":12}},{"id":"6c4eb2cd-02f1-4beb-ab21-61ea907030a5","block_type":"box","text":"social conditions; (iii) internal insurgencies; (iv) hostile relations with neighboring countries; and","page_number":133,"box":{"x":116,"y":723,"width":698,"height":12}},{"id":"075a79aa-0f78-4fb3-843a-8eef0bd11778","block_type":"box","text":"(v) ethnic, religious and racial disaffection. In addition, the governments of many of such countries, such","page_number":133,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"3b8bfe63-9345-47bb-8eb0-72a0a4a5ca18","block_type":"box","text":"as Indonesia, have a substantial role in regulating and supervising the economy. Another risk common","page_number":133,"box":{"x":116,"y":754,"width":752,"height":12}},{"id":"a14120e5-c172-4bc7-b71a-8cc608ae6b62","block_type":"box","text":"to most such countries is that the economy is heavily export oriented and, accordingly, is dependent","page_number":133,"box":{"x":116,"y":769,"width":735,"height":12}},{"id":"d7a86667-29ed-4715-b281-346df7156e33","block_type":"box","text":"upon international trade. The existence of overburdened infrastructure and obsolete financial systems","page_number":133,"box":{"x":117,"y":785,"width":745,"height":12}},{"id":"01b83a6f-408f-4c3a-b22d-3bfe653d6395","block_type":"box","text":"also presents risks in certain countries, as do environmental problems. Certain economies also depend","page_number":133,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"6c61e8dc-14cc-4c2e-a991-d407627cdfbc","block_type":"box","text":"to a significant degree upon exports of primary commodities and, therefore, are vulnerable to changes in","page_number":133,"box":{"x":116,"y":816,"width":766,"height":12}},{"id":"bd556021-18df-4c6a-a008-ea38f29d2a2c","block_type":"box","text":"commodity prices that, in turn, may be affected by a variety of factors.","page_number":133,"box":{"x":116,"y":831,"width":517,"height":12}},{"id":"227e37b7-d1b1-438f-a434-d492acbe9ecf","block_type":"box","text":"The legal systems in certain developing market Asia-Pacific countries also may have an adverse","page_number":133,"box":{"x":116,"y":862,"width":722,"height":12}},{"id":"e150fc4e-f52a-432d-9869-e6d8f2fd09de","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":133,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"2ecffd16-43a4-4e10-b8fc-ec2ac61d5cb3","block_type":"box","text":"II-46","page_number":133,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"6b8529bf-03b7-4d65-af99-21a529aa186d","block_type":"box","text":"NM1026U-6030748-133/260","page_number":133,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f26925a6-d577-4db5-b083-f02366e7b0b0","block_type":"box","text":"respect to acts of the corporation is generally limited to the amount of the shareholder’s investment, the","page_number":134,"box":{"x":117,"y":87,"width":771,"height":12}},{"id":"a2c87a13-d061-4470-9bd4-ba567a4d9a60","block_type":"box","text":"notion of limited liability is less clear in certain emerging market Asia-Pacific countries. Similarly, the","page_number":134,"box":{"x":117,"y":102,"width":744,"height":13}},{"id":"e8b48451-d4f8-48f8-a8f1-b3a67a92b61e","block_type":"box","text":"rights of investors in developing market Asia-Pacific companies may be more limited than those of","page_number":134,"box":{"x":117,"y":118,"width":732,"height":12}},{"id":"ae917a76-96d2-4441-b541-b43d5caa52d2","block_type":"box","text":"shareholders of U.S. corporations. It may be difficult or impossible to obtain and/or enforce a judgment","page_number":134,"box":{"x":116,"y":134,"width":765,"height":12}},{"id":"ec16be89-661c-455a-aff8-ec0bb63d4ba3","block_type":"box","text":"in a developing market Asia-Pacific country.","page_number":134,"box":{"x":117,"y":149,"width":330,"height":12}},{"id":"1a974632-43b1-42af-95c1-f0b749ab18f8","block_type":"box","text":"Governments of many developing market Asia-Pacific countries have exercised and continue to","page_number":134,"box":{"x":117,"y":180,"width":714,"height":12}},{"id":"0bfd72cc-4f6f-4514-8401-ebf6acd335d6","block_type":"box","text":"exercise substantial influence over many aspects of the private sector. In certain cases, the","page_number":134,"box":{"x":116,"y":196,"width":683,"height":12}},{"id":"20bfa018-ffb0-484d-a2bc-7b5a5ce0ec72","block_type":"box","text":"government owns or controls many companies, including the largest in the country. Accordingly,","page_number":134,"box":{"x":116,"y":211,"width":718,"height":12}},{"id":"79479187-765c-4776-9343-ecd95d840abb","block_type":"box","text":"government actions in the future could have a significant effect on economic conditions in developing","page_number":134,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"94522cf6-61c9-4a3d-bd26-a7078d0e3026","block_type":"box","text":"market Asia-Pacific countries, which could affect private sector companies and a Fund itself, as well as","page_number":134,"box":{"x":117,"y":242,"width":768,"height":12}},{"id":"5e5fc098-0ecf-41bd-9ffe-5ef5700b3324","block_type":"box","text":"the value of securities in the Fund’s portfolio. In addition, economic statistics of developing market","page_number":134,"box":{"x":116,"y":258,"width":731,"height":12}},{"id":"6bccebc5-6e14-4a44-8a10-ea96e9098d44","block_type":"box","text":"Asia-Pacific countries may be less reliable than economic statistics of more developed nations.","page_number":134,"box":{"x":116,"y":273,"width":710,"height":12}},{"id":"98016677-4b4e-4b06-9af1-9e6a36a030a4","block_type":"box","text":"In addition to the relative lack of publicly available information about developing market Asia-Pacific","page_number":134,"box":{"x":117,"y":304,"width":741,"height":12}},{"id":"c0dbca3f-127a-4eb5-819c-50363a6b82d4","block_type":"box","text":"issuers and the possibility that such issuers may not be subject to the same accounting, auditing and","page_number":134,"box":{"x":117,"y":320,"width":752,"height":12}},{"id":"77850293-933f-4e51-b578-50029a560def","block_type":"box","text":"financial reporting standards as U.S. companies, inflation accounting rules in some developing market","page_number":134,"box":{"x":116,"y":335,"width":762,"height":12}},{"id":"95ee94d9-2b2c-4b88-8123-eb0278c24329","block_type":"box","text":"Asia-Pacific countries require companies that keep accounting records in the local currency, for both","page_number":134,"box":{"x":116,"y":351,"width":750,"height":12}},{"id":"ff77b160-0a55-4c20-9475-ca2376724041","block_type":"box","text":"tax and accounting purposes, to restate certain assets and liabilities on the company’s balance sheet","page_number":134,"box":{"x":116,"y":366,"width":755,"height":12}},{"id":"25afc087-b932-45f4-a900-8aecc12e2771","block_type":"box","text":"in order to express items in terms of currency of constant purchasing power. Inflation accounting may","page_number":134,"box":{"x":117,"y":382,"width":756,"height":12}},{"id":"dfa7da4d-4283-4582-a539-df2da89d631f","block_type":"box","text":"indirectly generate losses or profits for certain developing market Asia-Pacific companies.","page_number":134,"box":{"x":117,"y":397,"width":669,"height":12}},{"id":"0b7b1622-69de-4f43-9e74-ecfd6133fc4a","block_type":"box","text":"Satisfactory custodial services for investment securities may not be available in some developing Asia","page_number":134,"box":{"x":116,"y":428,"width":762,"height":12}},{"id":"96c81daf-e492-4bf4-ba46-fc9d7ab586f8","block_type":"box","text":"Pacific countries, which may result in the Fund incurring additional costs and delays in providing","page_number":134,"box":{"x":117,"y":444,"width":716,"height":12}},{"id":"683108ef-2e97-4e2b-883c-c5d9f55cfc5f","block_type":"box","text":"transportation and custody services for such securities outside such countries.","page_number":134,"box":{"x":116,"y":459,"width":586,"height":12}},{"id":"8204af55-ddc7-464e-8f9a-f3812d405906","block_type":"box","text":"Certain developing Asia-Pacific countries, such as the Philippines, India and Turkey, are especially","page_number":134,"box":{"x":117,"y":490,"width":738,"height":12}},{"id":"f51bc43a-61cd-442c-92f0-d2ef8bcd12fe","block_type":"box","text":"large debtors to commercial banks and foreign governments.","page_number":134,"box":{"x":117,"y":506,"width":456,"height":12}},{"id":"4cc8c913-843e-4bdd-a108-1baa12ab3f64","block_type":"box","text":"Natural disasters in Asia-Pacific countries, and the resulting damage, could have a severe and","page_number":134,"box":{"x":117,"y":537,"width":705,"height":12}},{"id":"8afd6b7e-e041-42ca-b204-53dace60f761","block_type":"box","text":"negative impact on a Fund’s investment portfolio and, in the longer term, could impair the ability of","page_number":134,"box":{"x":117,"y":552,"width":732,"height":12}},{"id":"1daef505-7af4-4d54-8112-3eb835868b39","block_type":"box","text":"issuers in which the Fund invests to conduct their businesses in the manner normally conducted.","page_number":134,"box":{"x":117,"y":568,"width":722,"height":12}},{"id":"fbd0d1dc-ef17-4c20-8851-ae55acaa1e27","block_type":"box","text":"Fund management may determine that, notwithstanding otherwise favorable investment criteria, it may","page_number":134,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"5d7903d9-0fa2-426d-ba15-910ee4a38b17","block_type":"box","text":"not be practicable or appropriate to invest in a particular developing Asia-Pacific country. A Fund may","page_number":134,"box":{"x":117,"y":614,"width":757,"height":12}},{"id":"351a226e-0474-49fb-b50a-33ef6c80191c","block_type":"box","text":"invest in countries in which foreign investors, including management of the Fund, have had no or","page_number":134,"box":{"x":117,"y":630,"width":722,"height":12}},{"id":"edebbe1d-ee80-46a0-ac29-3afadb9f49fb","block_type":"box","text":"limited prior experience.","page_number":134,"box":{"x":117,"y":645,"width":182,"height":12}},{"id":"85b3a5a2-86d5-418c-8fad-c34f56747256","block_type":"box","text":"Restrictions on Foreign Investments in Asia-Pacific Countries.","page_number":134,"box":{"x":116,"y":676,"width":458,"height":12}},{"id":"9b9eb62a-01b4-4c3a-a840-103d0ee051db","block_type":"box","text":"Some developing Asia-Pacific countries","page_number":134,"box":{"x":581,"y":676,"width":294,"height":12}},{"id":"5dc15b77-833b-495c-a040-23a931888521","block_type":"box","text":"prohibit or impose substantial restrictions on investments in their capital markets, particularly their","page_number":134,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"9d503d39-18f3-448d-a0b2-7a21cb3f760e","block_type":"box","text":"equity markets, by foreign entities such as a Fund. As illustrations, certain countries may require","page_number":134,"box":{"x":116,"y":707,"width":714,"height":12}},{"id":"a382c760-ddb1-4cb8-9aa5-145f34136372","block_type":"box","text":"governmental approval prior to investments by foreign persons or limit the amount of investment by","page_number":134,"box":{"x":116,"y":723,"width":736,"height":12}},{"id":"2fbdcfd5-ef1f-49ce-b290-0b73a1253fd5","block_type":"box","text":"foreign persons in a particular company or limit the investment by foreign persons to only a specific","page_number":134,"box":{"x":116,"y":738,"width":735,"height":12}},{"id":"40ee41e1-1695-4621-9100-b0cc17aa4de0","block_type":"box","text":"class of securities of a company which may have less advantageous terms (including price and","page_number":134,"box":{"x":116,"y":754,"width":705,"height":12}},{"id":"61f3b74f-2fdf-4116-878b-09c1d3665486","block_type":"box","text":"shareholder rights) than securities of the company available for purchase by nationals. There can be","page_number":134,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"df350ecb-0c50-45a3-b43b-0814e2316d9a","block_type":"box","text":"no assurance that a Fund will be able to obtain required governmental approvals in a timely manner. In","page_number":134,"box":{"x":117,"y":785,"width":762,"height":12}},{"id":"4ddd6eac-f885-470f-83b3-1832c06cdeea","block_type":"box","text":"addition, changes to restrictions on foreign ownership of securities subsequent to a Fund’s purchase of","page_number":134,"box":{"x":116,"y":800,"width":765,"height":12}},{"id":"3395bf6b-cce5-43db-8103-2d60a5c03655","block_type":"box","text":"such securities may have an adverse effect on the value of such shares. Certain countries may restrict","page_number":134,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"a1c7ce68-18dc-4e4e-b747-34882444be57","block_type":"box","text":"investment opportunities in issuers or industries deemed important to national interests.","page_number":134,"box":{"x":117,"y":831,"width":654,"height":12}},{"id":"2dd08d7a-f9eb-42a7-b87f-6b0e1bfe7444","block_type":"box","text":"The manner in which foreign investors may invest in companies in certain developing Asia-Pacific","page_number":134,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"8179c402-96f1-43c6-88ac-2bfe6b00bc77","block_type":"box","text":"countries, as well as limitations on such investments, also may have an adverse impact on the","page_number":134,"box":{"x":116,"y":878,"width":705,"height":12}},{"id":"ac48ae72-e491-40de-bf0d-fda1bf132eb8","block_type":"box","text":"II-47","page_number":134,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"9ed66b34-a468-48bf-b307-3a1e451c67d3","block_type":"box","text":"NM1026U-6030748-134/260","page_number":134,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2e4eac6a-df4c-43b4-b33c-43fc580c57a4","block_type":"box","text":"operations of a Fund. For example, a Fund may be required in certain of such countries to invest","page_number":135,"box":{"x":116,"y":87,"width":722,"height":12}},{"id":"8217ed43-598f-4017-b22a-aedd84468f96","block_type":"box","text":"initially through a local broker or other entity and then have the shares purchased re-registered in the","page_number":135,"box":{"x":117,"y":103,"width":753,"height":12}},{"id":"99f459d4-e2c3-46ec-8b2c-9db91f6d71b0","block_type":"box","text":"name of the Fund. 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There also may be instances","page_number":135,"box":{"x":117,"y":149,"width":753,"height":12}},{"id":"419c865d-aad8-4fb5-9265-30026df78140","block_type":"box","text":"where a Fund places a purchase order but is subsequently informed, at the time of re-registration, that","page_number":135,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"20ea1133-b327-4c14-8044-555bd0ad77ab","block_type":"box","text":"the permissible allocation of the investment to foreign investors has been filled, depriving the Fund of","page_number":135,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"a0eb6233-0759-4aec-bd6c-41284bd4a74b","block_type":"box","text":"the ability to make its desired investment at that time.","page_number":135,"box":{"x":116,"y":196,"width":400,"height":12}},{"id":"e0808e3f-d2c8-4655-8e2d-e6aa5ad631ed","block_type":"box","text":"Substantial limitations may exist in certain countries with respect to a Fund’s ability to repatriate","page_number":135,"box":{"x":116,"y":227,"width":714,"height":12}},{"id":"48581c98-0e89-476e-857e-89174f4ee215","block_type":"box","text":"investment income, capital or the proceeds of sales of securities by foreign investors. A Fund could be","page_number":135,"box":{"x":117,"y":242,"width":763,"height":12}},{"id":"b8ed779e-8eb2-4bac-aec4-c0bd0a304849","block_type":"box","text":"adversely affected by delays in, or a refusal to grant, any required governmental approval for","page_number":135,"box":{"x":116,"y":258,"width":693,"height":12}},{"id":"db0432be-4868-4058-a258-03eb2145f662","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":135,"box":{"x":117,"y":273,"width":759,"height":12}},{"id":"1e881086-d436-4a90-a6a4-063acacd5319","block_type":"box","text":"possible that certain countries may impose currency controls or other restrictions relating to their","page_number":135,"box":{"x":117,"y":289,"width":719,"height":12}},{"id":"813ca424-0626-488f-b25e-5e513e8c91bc","block_type":"box","text":"currencies or to securities of issuers in those countries. To the extent that such restrictions have the","page_number":135,"box":{"x":116,"y":304,"width":746,"height":10}},{"id":"b1c92159-4f4a-44f8-b7a4-5e8ef9cd04f3","block_type":"box","text":"effect of making certain investments illiquid, securities may not be available for sale to meet","page_number":135,"box":{"x":116,"y":320,"width":685,"height":12}},{"id":"98ebd1bc-b606-426c-a2d7-0f2e4fc7666c","block_type":"box","text":"redemptions. Depending on a variety of financial factors, the percentage of a Fund’s portfolio subject to","page_number":135,"box":{"x":117,"y":335,"width":770,"height":12}},{"id":"8739ae70-8137-4793-bfd4-027ab6d1cbdf","block_type":"box","text":"currency controls may increase. In the event other countries impose similar controls, the portion of the","page_number":135,"box":{"x":116,"y":351,"width":763,"height":12}},{"id":"7883dc8f-9734-4a0b-b6a4-89000baa9a47","block_type":"box","text":"Fund’s assets that may be used to meet redemptions may be further decreased. Even where there is","page_number":135,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"bf346add-8a72-4609-a80e-7e1bd774ef93","block_type":"box","text":"no outright restriction on repatriation of capital, the mechanics of repatriation may affect certain aspects","page_number":135,"box":{"x":117,"y":382,"width":771,"height":12}},{"id":"b6eb629d-6ded-4bd0-853e-0bd5b88c8362","block_type":"box","text":"of the operations of a Fund (for example, if funds may be withdrawn only in certain currencies and/or","page_number":135,"box":{"x":116,"y":397,"width":751,"height":12}},{"id":"0af297f0-0b23-4fc1-a380-2e06fd974817","block_type":"box","text":"only at an exchange rate established by the government).","page_number":135,"box":{"x":116,"y":413,"width":433,"height":12}},{"id":"bdcf7611-ff29-4688-9962-5b2f7d2525a8","block_type":"box","text":"In certain countries, banks or other financial institutions may be among the leading companies or have","page_number":135,"box":{"x":117,"y":444,"width":763,"height":12}},{"id":"1f8323c7-c51e-42aa-978b-4123e1a9691e","block_type":"box","text":"actively traded securities available for investment. The Investment Company Act restricts a Fund’s","page_number":135,"box":{"x":116,"y":459,"width":734,"height":12}},{"id":"5809b2c9-d5f9-4d3f-bc2c-3198025606a9","block_type":"box","text":"investments in any equity securities of an issuer that, in its most recent fiscal year, derived more than","page_number":135,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"4977e448-613d-40a9-8b0a-41a0efa0c06a","block_type":"box","text":"15% of its revenues from “securities related activities,” as defined by the rules thereunder. These","page_number":135,"box":{"x":118,"y":490,"width":722,"height":12}},{"id":"71e5a5b7-2cdd-4f4d-aef3-4459390f506b","block_type":"box","text":"provisions may restrict a Fund’s investments in certain foreign banks and other financial institutions.","page_number":135,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"71c78e08-b52c-4a6d-be93-cc7fc5933421","block_type":"box","text":"Political and economic structures in emerging market countries may be undergoing significant","page_number":135,"box":{"x":117,"y":537,"width":699,"height":12}},{"id":"7f846e49-9e68-46c4-b636-85a2ccf37ac6","block_type":"box","text":"evolution and rapid development, and these countries may lack the social, political and economic","page_number":135,"box":{"x":116,"y":552,"width":726,"height":12}},{"id":"f613fda8-c043-42af-9169-c36ee9192eb3","block_type":"box","text":"stability characteristic of more developed countries. Some of these countries may have in the past","page_number":135,"box":{"x":116,"y":568,"width":732,"height":12}},{"id":"6fa0512c-a4cf-4c75-b41d-2eb39f627a06","block_type":"box","text":"failed to recognize private property rights and have at times nationalized or expropriated the assets of","page_number":135,"box":{"x":116,"y":583,"width":759,"height":12}},{"id":"8b0437b8-f27c-4c27-8f47-5d7a49b258b7","block_type":"box","text":"private companies. As a result the risks described above, including the risks of nationalization or","page_number":135,"box":{"x":117,"y":599,"width":718,"height":12}},{"id":"fe65cc66-f845-49c8-b05c-3e77f081ec03","block_type":"box","text":"expropriation of assets, may be heightened. In addition, unanticipated political or social developments","page_number":135,"box":{"x":116,"y":614,"width":760,"height":12}},{"id":"e0752e19-7490-4183-bb23-fbca90c17991","block_type":"box","text":"may affect the value of investments in these countries and the availability to a Fund of additional","page_number":135,"box":{"x":117,"y":630,"width":718,"height":12}},{"id":"ba5a4231-8139-409b-a837-f81eab848c99","block_type":"box","text":"investments in emerging market countries. The small size and inexperience of the securities markets in","page_number":135,"box":{"x":117,"y":645,"width":770,"height":12}},{"id":"08aaf44b-ef67-4a7c-a04b-9534548a218c","block_type":"box","text":"certain of these countries and the limited volume of trading in securities in these countries may make","page_number":135,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"0ad5f558-c419-4a49-b76a-de6cf6cc8571","block_type":"box","text":"investments in the countries illiquid and more volatile than investments in Japan or most Western","page_number":135,"box":{"x":117,"y":676,"width":719,"height":12}},{"id":"c7d39a37-6b0e-412d-ab7f-c6fa0692e757","block_type":"box","text":"European countries. There may be little financial or accounting information available with respect to","page_number":135,"box":{"x":117,"y":692,"width":736,"height":12}},{"id":"c383759e-6c11-43c8-88f2-6773b1a11213","block_type":"box","text":"issuers located in certain emerging market countries, and it may be difficult to assess the value or","page_number":135,"box":{"x":117,"y":707,"width":724,"height":12}},{"id":"2f0eb35e-6f13-4168-b572-f2721f757f47","block_type":"box","text":"prospects of an investment in such issuers.","page_number":135,"box":{"x":117,"y":723,"width":319,"height":12}},{"id":"8abd6c72-39f9-4a5a-a778-a27ea21cd5d5","block_type":"box","text":"The expense ratios of the Funds investing significantly in foreign securities can be expected to be","page_number":135,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"a22290a4-5492-4658-ab4a-34b39098f44c","block_type":"box","text":"higher than those of Funds investing primarily in domestic securities. The costs attributable to investing","page_number":135,"box":{"x":117,"y":769,"width":763,"height":12}},{"id":"5ae24a65-0c83-4326-997e-3cc6bcf05d1b","block_type":"box","text":"abroad are usually higher for several reasons, such as the higher cost of custody of foreign securities,","page_number":135,"box":{"x":116,"y":785,"width":755,"height":12}},{"id":"b2368dc8-efcb-4730-acbd-945a5c047119","block_type":"box","text":"higher commissions paid on comparable transactions on foreign markets and additional costs arising","page_number":135,"box":{"x":117,"y":800,"width":746,"height":12}},{"id":"0da97e60-0369-4ada-8f0d-9a4043db7923","block_type":"box","text":"from delays in settlements of transactions involving foreign securities.","page_number":135,"box":{"x":116,"y":816,"width":515,"height":12}},{"id":"574f2ca5-cf1c-455e-ad93-f63c71de09bf","block_type":"box","text":"Risks of Investments in Russia.","page_number":135,"box":{"x":116,"y":847,"width":232,"height":9}},{"id":"3440c441-9eb8-4c42-b89d-4a911ea94e29","block_type":"box","text":"A Fund may invest a portion of its assets in securities issued by","page_number":135,"box":{"x":350,"y":847,"width":482,"height":12}},{"id":"46b50f54-dae4-459c-8d53-3e57b8d63054","block_type":"box","text":"companies located in Russia. The Russian securities market suffers from a variety of problems","page_number":135,"box":{"x":116,"y":862,"width":709,"height":12}},{"id":"9a0698a8-5a58-4515-b4aa-ecabe415744f","block_type":"box","text":"described above in “Investment in Emerging Markets” not encountered in more developed markets.","page_number":135,"box":{"x":116,"y":878,"width":742,"height":12}},{"id":"46b40a2a-b422-423a-a79d-12d759f4fc2b","block_type":"box","text":"II-48","page_number":135,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"847c783e-24cd-4004-a8a9-3f879192d28f","block_type":"box","text":"NM1026U-6030748-135/260","page_number":135,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"563b5e08-243a-4500-bca8-1b3fa951a6b7","block_type":"box","text":"The Russian securities market is relatively new, and a substantial portion of securities transactions in","page_number":136,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"21eeeed0-50c1-45a6-b8c4-b1b253f9138c","block_type":"box","text":"Russia are privately negotiated outside of stock exchanges. 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In 2013, Russia established","page_number":136,"box":{"x":116,"y":242,"width":359,"height":12}},{"id":"9a4f4f02-6be6-4b31-a1fd-42800c9baa1c","block_type":"box","text":"the National Settlement Depository (“NSD”) as a","page_number":136,"box":{"x":475,"y":242,"width":356,"height":12}},{"id":"5b084faa-9d01-473d-94e2-92ded61162d9","block_type":"box","text":"recognized central securities depository, and title to Russian equities held through the NSD is now based","page_number":136,"box":{"x":117,"y":258,"width":766,"height":12}},{"id":"ca7d1765-e196-4062-ac3b-92cfa6e676e5","block_type":"box","text":"on the records of the NSD and not on the records of","page_number":136,"box":{"x":116,"y":273,"width":382,"height":10}},{"id":"d3a08374-7120-49a7-8912-eaafb98c2117","block_type":"box","text":"the local registrars. 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A","page_number":136,"box":{"x":532,"y":413,"width":354,"height":9}},{"id":"c75f1b84-a773-4c8b-82a0-24aa99f69d05","block_type":"box","text":"Fund also may experience difficulty in obtai","page_number":136,"box":{"x":117,"y":428,"width":312,"height":12}},{"id":"403db4b7-e9e1-45c5-9f1d-3b1c2c435092","block_type":"box","text":"ning and/or enforcing judgments in Russia.","page_number":136,"box":{"x":431,"y":428,"width":316,"height":12}},{"id":"f7d45b19-03ce-47ce-ba9d-36dcdcd2ae7a","block_type":"box","text":"In addition, Russia continues to assert its influence in the region through economic and military","page_number":136,"box":{"x":117,"y":459,"width":708,"height":12}},{"id":"b8974e08-549a-46c9-a0da-4463e87c2465","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":136,"box":{"x":117,"y":475,"width":735,"height":12}},{"id":"a1b6c7b3-2bd1-4538-a2c4-a24380fce407","block_type":"box","text":"launched a large-scale invasion of Ukraine on February 24, 2022. The extent and duration of the","page_number":136,"box":{"x":117,"y":490,"width":720,"height":12}},{"id":"e49114f8-7ff7-450e-971f-c1fbb6af5291","block_type":"box","text":"military action, resulting sanctions and resulting future market disruptions, including declines in its","page_number":136,"box":{"x":117,"y":506,"width":727,"height":12}},{"id":"5452658e-ab41-4fbd-b022-abda0227a6e4","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":136,"box":{"x":116,"y":521,"width":744,"height":12}},{"id":"de4c7a8a-a7fd-41ce-b7fc-b03a497da5ec","block_type":"box","text":"disruptions caused by Russian military action or other actions (including cyberattacks and espionage)","page_number":136,"box":{"x":116,"y":537,"width":757,"height":12}},{"id":"88595c1e-9bdf-4e1d-98da-0dd969a0bc5b","block_type":"box","text":"or resulting actual and threatened responses to such activity, including purchasing and financing","page_number":136,"box":{"x":116,"y":552,"width":720,"height":12}},{"id":"eb77d76a-7520-4cea-95cf-251f1a50a9c3","block_type":"box","text":"restrictions, boycotts or changes in consumer or purchaser preferences, sanctions, tariffs or","page_number":136,"box":{"x":117,"y":568,"width":685,"height":12}},{"id":"b53114de-1f03-4a0b-9ed3-d24c7bba1898","block_type":"box","text":"cyberattacks on the Russian government, Russian companies or Russian individuals, including","page_number":136,"box":{"x":116,"y":583,"width":710,"height":12}},{"id":"0569a35a-c35a-4633-9df5-354e47f569af","block_type":"box","text":"politicians, may impact Russia’s economy and Russian issuers of securities in which the Fund invests.","page_number":136,"box":{"x":117,"y":599,"width":763,"height":12}},{"id":"91bfcbe4-0b92-40d8-bfcd-e0437795f0ad","block_type":"box","text":"Actual and threatened responses to such activity, including purchasing restrictions, sanctions, tariffs or","page_number":136,"box":{"x":116,"y":614,"width":766,"height":12}},{"id":"190fe599-076e-423f-ade9-58b3f84645e5","block_type":"box","text":"cyberattacks on the Russian government or Russian companies, may impact Russia’s economy and","page_number":136,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"bfe189e7-2bb2-48be-904a-20cf9d7ff4b7","block_type":"box","text":"Russian issuers of securities in which the Fund invests. Actual and threatened responses to such","page_number":136,"box":{"x":117,"y":645,"width":726,"height":12}},{"id":"37272324-7ca9-4cd4-a7f3-37398d6c3ce4","block_type":"box","text":"military action may also impact the markets for certain Russian commodities, such as oil and natural","page_number":136,"box":{"x":117,"y":661,"width":741,"height":12}},{"id":"36920382-779f-4fe8-bb87-f916c765f7dc","block_type":"box","text":"gas, as well as other sectors of the Russian economy, and may likely have collateral impacts on such","page_number":136,"box":{"x":116,"y":676,"width":752,"height":12}},{"id":"fd8b0bf0-dfc9-4f35-a98a-0c892bb2ff32","block_type":"box","text":"sectors globally.","page_number":136,"box":{"x":116,"y":692,"width":119,"height":12}},{"id":"550baecb-00a6-4c5b-b49f-0c2c9eec3ea2","block_type":"box","text":"Governments in the United States and many other countries (collectively, the “Sanctioning Bodies”)","page_number":136,"box":{"x":117,"y":723,"width":735,"height":12}},{"id":"83ee0112-b451-44b7-a1cc-e2286a540833","block_type":"box","text":"have imposed economic sanctions, which can consist of prohibiting certain securities trades, certain","page_number":136,"box":{"x":117,"y":738,"width":739,"height":12}},{"id":"d6728c61-c0a0-4125-b6e6-69652105233e","block_type":"box","text":"private transactions in the energy sector, asset freezes and prohibition of all business, against certain","page_number":136,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"a6ff4b09-8ac2-4d32-b2e5-9a883d9c2261","block_type":"box","text":"Russian individuals, including politicians, and Russian corporate and banking entities. The Sanctioning","page_number":136,"box":{"x":117,"y":769,"width":760,"height":12}},{"id":"74bee33f-67cb-4481-9dc8-d3e8215adc23","block_type":"box","text":"Bodies, or others, could also institute broader sanctions on Russia, including banning Russia from","page_number":136,"box":{"x":117,"y":785,"width":725,"height":12}},{"id":"8b29d56a-980f-4518-a780-f4c916f98a65","block_type":"box","text":"global payments systems that facilitate cross-border payments. These sanctions, or even the threat of","page_number":136,"box":{"x":116,"y":800,"width":758,"height":12}},{"id":"697877ae-64d3-419e-bb6e-7a109fb68324","block_type":"box","text":"further sanctions, may result in the decline of the value and liquidity of Russian securities, a weakening","page_number":136,"box":{"x":116,"y":816,"width":763,"height":12}},{"id":"1ef9325e-e61c-419c-8832-3872f0f613d9","block_type":"box","text":"of the ruble or other adverse consequences to the Russian economy. These sanctions have resulted","page_number":136,"box":{"x":116,"y":831,"width":752,"height":12}},{"id":"69eed1d3-badb-4cc8-9545-13d021f425fd","block_type":"box","text":"and may continue to result in the immediate freeze of Russian securities and/or funds invested in","page_number":136,"box":{"x":116,"y":847,"width":725,"height":12}},{"id":"baf98acc-b028-4ce8-a879-1ebf38a02dd0","block_type":"box","text":"prohibited assets, impairing the ability of a Fund to buy, sell, receive or deliver those securities and/or","page_number":136,"box":{"x":117,"y":862,"width":757,"height":12}},{"id":"19d1a6e5-1e67-4935-b0b6-cf72fe7c31e1","block_type":"box","text":"II-49","page_number":136,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"16b84f18-a412-4894-b049-25bb74aa209e","block_type":"box","text":"NM1026U-6030748-136/260","page_number":136,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7170b278-400b-4cf2-bf33-3ea4d721ffdc","block_type":"box","text":"assets. Sanctions could also result in Russia taking counter measures or retaliatory actions which may","page_number":137,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"5ecccea3-a755-4ad2-ba5e-a77094c28513","block_type":"box","text":"further impair the value and liquidity of Russian securities.","page_number":137,"box":{"x":116,"y":102,"width":435,"height":13}},{"id":"ec0c336c-e117-4ada-9aa4-854b7c9c5b3a","block_type":"box","text":"Risks of Investing in Saudi Arabia.","page_number":137,"box":{"x":116,"y":134,"width":253,"height":12}},{"id":"436845bf-ee0e-4170-9278-5aff4b7e091f","block_type":"box","text":"The ability of foreign investors (such as a Fund) to invest in Saudi","page_number":137,"box":{"x":371,"y":134,"width":497,"height":12}},{"id":"c1deb2f6-1689-4663-8ae7-049f19fd7f47","block_type":"box","text":"Arabian issuers is new and untested. Such ability could be restricted or revoked by the Saudi Arabian","page_number":137,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"c89af6a2-da17-4aa1-aca3-3c1ad9ef28d5","block_type":"box","text":"government at any time, and unforeseen risks could materialize due to foreign ownership in such","page_number":137,"box":{"x":116,"y":165,"width":724,"height":12}},{"id":"7bbda78d-1928-4b81-8ef4-d6c823679c28","block_type":"box","text":"securities. In addition, the Capital Market Authority (“CMA”) places investment limitations on the","page_number":137,"box":{"x":116,"y":180,"width":715,"height":12}},{"id":"76a78baf-ed49-49f6-8ccc-93e1183ca704","block_type":"box","text":"ownership of Saudi Arabian issuers by foreign investors, including a limitation on a Fund’s ownership","page_number":137,"box":{"x":116,"y":196,"width":753,"height":12}},{"id":"62d26505-0ac6-47ae-8ebc-7dae73870e33","block_type":"box","text":"of any single issuer listed on the Saudi Arabian Stock Exchange, which may prevent a Fund from","page_number":137,"box":{"x":116,"y":211,"width":726,"height":12}},{"id":"769f6bba-45c1-4636-970a-7bad4521c5f8","block_type":"box","text":"investing in accordance with its strategy and contribute to tracking error against the Underlying Index.","page_number":137,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"8a816d5a-bddf-4f53-8407-7c1ea1de922b","block_type":"box","text":"These restrictions may be changed or new restrictions, such as licensing requirements, special","page_number":137,"box":{"x":116,"y":242,"width":710,"height":12}},{"id":"cabe9afe-2873-4613-a8e5-a6f91c71fc81","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":137,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"e405e470-9810-4fe8-a546-0e7e94b14c47","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":137,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"3d3d8580-164a-4478-ba93-35a1cfec5684","block_type":"box","text":"Major disruptions or regulatory changes could occur in the Saudi Arabian market, any of which could","page_number":137,"box":{"x":117,"y":289,"width":750,"height":12}},{"id":"056b2c2f-e098-4c6c-9baa-478ff2d7ba9a","block_type":"box","text":"negatively impact a Fund. These risks may be exacerbated, compared to more developed markets,","page_number":137,"box":{"x":117,"y":304,"width":741,"height":12}},{"id":"3fa459e6-64c7-4e57-b936-1ed93dab70f4","block_type":"box","text":"given the limited history of foreign investment in the Saudi Arabian market. Investments in Saudi","page_number":137,"box":{"x":116,"y":320,"width":719,"height":12}},{"id":"f03902e9-e54e-40fb-adf4-396071d3c952","block_type":"box","text":"Arabia may also be subject to loss due to expropriation or nationalization of assets and property or the","page_number":137,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"857c5ea1-c00f-43f4-baf8-458a0022336b","block_type":"box","text":"imposition of restrictions on additional foreign investments and repatriation of capital. Such heightened","page_number":137,"box":{"x":117,"y":351,"width":764,"height":12}},{"id":"bef614eb-104b-42e2-b838-33bb5016101c","block_type":"box","text":"risks may include, among others, restrictions on and government intervention in international trade,","page_number":137,"box":{"x":117,"y":366,"width":739,"height":12}},{"id":"c04f4a2d-bb96-4bfe-842e-c801d74d5aed","block_type":"box","text":"confiscatory taxation, political instability, including authoritarian and/or military involvement in","page_number":137,"box":{"x":116,"y":382,"width":694,"height":12}},{"id":"0804b222-c1fa-4e93-afeb-c0b198d842ea","block_type":"box","text":"governmental decision making, armed conflict, crime and instability as a result of religious, ethnic and/","page_number":137,"box":{"x":116,"y":397,"width":758,"height":12}},{"id":"85eef5a0-4c15-46e5-be7f-9476830a8ecc","block_type":"box","text":"or socioeconomic unrest. Saudi Arabia has privatized, or has begun the process of privatizing, certain","page_number":137,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"a1c8ea3d-d75f-4fb8-8856-bdbd2b547314","block_type":"box","text":"entities and industries. Newly privatized companies may face strong competition from government","page_number":137,"box":{"x":116,"y":428,"width":733,"height":12}},{"id":"4e1a1f66-e874-47fe-ba4a-0bcd8b709270","block_type":"box","text":"sponsored competitors that have not been privatized. In some instances, investors in newly privatized","page_number":137,"box":{"x":116,"y":444,"width":760,"height":12}},{"id":"87df1aeb-8fe4-44c1-9884-46d5915da0e6","block_type":"box","text":"entities have suffered losses due to the inability of the newly privatized entities to adjust quickly to a","page_number":137,"box":{"x":116,"y":459,"width":744,"height":12}},{"id":"fd204150-c062-4070-ac2b-09a9298037a4","block_type":"box","text":"competitive environment or changing regulatory and legal standards or, in some cases, due to","page_number":137,"box":{"x":116,"y":475,"width":703,"height":12}},{"id":"743a6035-975f-41f5-9600-9a32181e879a","block_type":"box","text":"re-nationalization of such privatized entities. There is no assurance that similar losses will not recur.","page_number":137,"box":{"x":117,"y":490,"width":743,"height":12}},{"id":"5627d661-0466-4af6-ad9c-af2f6b7215de","block_type":"box","text":"Further, under income tax laws imposed by the Department of Zakat and Income Tax, dividends paid","page_number":137,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"633a919b-ec35-40ae-8301-c4fe8a83df22","block_type":"box","text":"by a Saudi Arabian company to foreign stockholders are generally subject to a 5% withholding tax","page_number":137,"box":{"x":117,"y":521,"width":730,"height":12}},{"id":"ce2ec405-7a32-4577-93d2-5fb975a2b9b1","block_type":"box","text":"(different tax rates may apply pursuant to an applicable treaty). Saudi Arabia is highly reliant on income","page_number":137,"box":{"x":117,"y":537,"width":770,"height":12}},{"id":"e9333b2c-7d0e-4e0e-85db-37b3d720a0d8","block_type":"box","text":"from the sale of petroleum and trade with other countries involved in the sale of petroleum, and its","page_number":137,"box":{"x":116,"y":552,"width":732,"height":12}},{"id":"da6c6e61-b4cf-426d-85ca-9516f9554f4c","block_type":"box","text":"economy is therefore vulnerable to changes in foreign currency values and the market for petroleum.","page_number":137,"box":{"x":116,"y":568,"width":753,"height":12}},{"id":"23c5ff38-df50-4147-95ed-ca80b8c25d89","block_type":"box","text":"As global demand for petroleum fluctuates, Saudi Arabia may be significantly impacted.","page_number":137,"box":{"x":116,"y":583,"width":655,"height":12}},{"id":"5f5d0f76-5aab-4c8e-be1f-7d09748b0b34","block_type":"box","text":"Like most Middle Eastern governments, the government of Saudi Arabia exercises substantial","page_number":137,"box":{"x":117,"y":614,"width":701,"height":12}},{"id":"15be7849-b15d-40e0-99ac-c9a60b19e32f","block_type":"box","text":"influence over many aspects of the private sector. Although liberalization in the wider economy is","page_number":137,"box":{"x":117,"y":630,"width":724,"height":12}},{"id":"d11e4687-2a2a-4ee0-aee5-2c8230d3f82f","block_type":"box","text":"underway, in many areas it has lagged significantly: restrictions on foreign ownership persist, and the","page_number":137,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"5cbaf483-2103-496f-8673-4344ac28ffdf","block_type":"box","text":"government has an ownership stake in many key industries. The situation is exacerbated by the fact","page_number":137,"box":{"x":116,"y":661,"width":743,"height":12}},{"id":"b6b173c8-d744-4061-996b-53ccad31fee3","block_type":"box","text":"that Saudi Arabia is governed by an absolute monarchy. Saudi Arabia has historically experienced","page_number":137,"box":{"x":116,"y":676,"width":729,"height":12}},{"id":"9dfe07ca-2930-4472-8a65-af392fec930d","block_type":"box","text":"strained relations with economic partners worldwide, including other countries in the Middle East due to","page_number":137,"box":{"x":116,"y":692,"width":766,"height":12}},{"id":"d3aeea04-9745-4f8f-9211-7d736ca114cb","block_type":"box","text":"geopolitical events. Incidents involving a Middle Eastern country’s or the region’s security, including","page_number":137,"box":{"x":116,"y":707,"width":737,"height":12}},{"id":"cf9e3b1d-1a39-4bb8-8018-cae638f408a4","block_type":"box","text":"terrorism, may cause uncertainty in their markets and may adversely affect its economy and a Fund’s","page_number":137,"box":{"x":116,"y":723,"width":752,"height":12}},{"id":"6232506f-3098-4689-b898-472ff95db2d4","block_type":"box","text":"investments. Governmental actions in the future could have a significant effect on economic conditions","page_number":137,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"8aacfedc-4fb7-4024-82b9-71c689b6bed7","block_type":"box","text":"in Saudi Arabia, which could affect private sector companies and a Fund, as well as the value of","page_number":137,"box":{"x":117,"y":754,"width":713,"height":12}},{"id":"cab682f5-be20-415f-957d-c3d17b909db5","block_type":"box","text":"securities in a Fund’s portfolio. Any economic sanctions on Saudi Arabian individuals or Saudi Arabian","page_number":137,"box":{"x":116,"y":769,"width":759,"height":12}},{"id":"a00329a6-4c83-44de-af21-dcb62bff9577","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":137,"box":{"x":116,"y":785,"width":760,"height":12}},{"id":"c0b620bb-be92-4787-9efd-43e41ad6f112","block_type":"box","text":"Saudi Arabian securities, a weakening of the Saudi riyal or other adverse consequences to the Saudi","page_number":137,"box":{"x":116,"y":800,"width":749,"height":12}},{"id":"2cc7e009-4112-4e98-a60c-643f1476949d","block_type":"box","text":"Arabian economy. In addition, Saudi Arabia’s economy relies heavily on cheap, foreign labor, and","page_number":137,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"2517c9de-7b76-4123-9191-1fb26bc8c054","block_type":"box","text":"changes in the availability of this labor supply could have an adverse effect on the economy.","page_number":137,"box":{"x":116,"y":831,"width":690,"height":12}},{"id":"57513a14-89d2-474f-b0f2-a2fc33c20efa","block_type":"box","text":"The securities markets in Saudi Arabia may not be as developed as those in other countries. As a","page_number":137,"box":{"x":116,"y":862,"width":730,"height":12}},{"id":"dc9e6ed8-ed0f-434f-8cc2-20f38d751d77","block_type":"box","text":"result, securities markets in Saudi Arabia are subject to greater risks associated with market volatility,","page_number":137,"box":{"x":117,"y":878,"width":757,"height":12}},{"id":"5e024053-be06-4cc3-bd20-65ec025f693b","block_type":"box","text":"II-50","page_number":137,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"333254e1-3623-4ff4-a752-b26686939324","block_type":"box","text":"NM1026U-6030748-137/260","page_number":137,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"34e60829-92ff-4573-b1dd-4ac650614a81","block_type":"box","text":"lower market capitalization, lower trading volume, illiquidity, inflation, greater price fluctuations,","page_number":138,"box":{"x":117,"y":87,"width":705,"height":12}},{"id":"ca23e557-533f-48ad-bd01-b95b5d208c5f","block_type":"box","text":"uncertainty regarding the existence of trading markets, governmental control and heavy regulation of","page_number":138,"box":{"x":117,"y":102,"width":751,"height":13}},{"id":"03799c4e-0977-4c93-9310-1c37afc03519","block_type":"box","text":"labor and industry. Shares of certain Saudi Arabian companies tend to trade less frequently than those","page_number":138,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"5085ae26-4d09-4e97-954b-81a93803df89","block_type":"box","text":"of companies on exchanges in more developed markets. Such infrequent trading may adversely affect","page_number":138,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"b45920fb-1ac9-4895-8609-871397b9f570","block_type":"box","text":"the pricing of these securities and a Fund’s ability to sell these securities in the future. Current","page_number":138,"box":{"x":116,"y":149,"width":701,"height":12}},{"id":"15cb47e0-d5f2-4770-b945-0cac85a504fe","block_type":"box","text":"regulations in Saudi Arabian markets may require a Fund to execute trades of securities through a","page_number":138,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"a301eeef-0b1b-48c5-a22c-447504a1b9a2","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":138,"box":{"x":116,"y":180,"width":767,"height":12}},{"id":"4b3ddf96-929a-4839-bad8-19fa598a50fd","block_type":"box","text":"Fund than is typically the case for investment managers.","page_number":138,"box":{"x":117,"y":196,"width":424,"height":12}},{"id":"5d9aebfc-eea4-4c3a-a17b-8c5ed42d1a0b","block_type":"box","text":"Although the political situation in Saudi Arabia is largely stable, Saudi Arabia has historically","page_number":138,"box":{"x":116,"y":227,"width":687,"height":12}},{"id":"4e1502d9-89aa-4c63-9a81-42fa3381c465","block_type":"box","text":"experienced political instability, and there remains the possibility that the stability will not hold in the","page_number":138,"box":{"x":116,"y":242,"width":741,"height":12}},{"id":"ad4ad4b0-29f9-4480-a34c-582ca13ba5d3","block_type":"box","text":"future or that instability in the larger Middle East region could adversely impact the economy of Saudi","page_number":138,"box":{"x":116,"y":258,"width":755,"height":12}},{"id":"c0de05dc-52ae-42d7-af86-465e2d2de782","block_type":"box","text":"Arabia. Instability may be caused by military developments, government interventions in the","page_number":138,"box":{"x":116,"y":273,"width":686,"height":12}},{"id":"eec3d41f-5234-4c6b-910a-a0a8d9ac1def","block_type":"box","text":"marketplace, terrorism, extremist attitudes, attempted social or political reforms, religious differences,","page_number":138,"box":{"x":117,"y":289,"width":755,"height":12}},{"id":"8fb20138-85ec-4298-b30d-bf0b78696b3b","block_type":"box","text":"or other factors. Additionally, anti-Western views held by certain groups in the Middle East may","page_number":138,"box":{"x":116,"y":304,"width":710,"height":12}},{"id":"6a0af2a1-9bc7-4a52-a837-9c36948bdda5","block_type":"box","text":"influence government policies regarding foreign investment. Further developments in U.S. relations","page_number":138,"box":{"x":117,"y":320,"width":740,"height":12}},{"id":"3829a4e0-a774-43ca-b1c1-6b0b7d6529ea","block_type":"box","text":"with Saudi Arabia and other Middle-Eastern countries may affect these attitudes and policies. The U.S.","page_number":138,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"13f386b8-11e7-49d3-9f43-00f332566c54","block_type":"box","text":"is a significant, and in some cases the most significant, trading partner of, or foreign investor in, Saudi","page_number":138,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"30d14fc6-9d6b-4421-bc37-19f834fd7eaf","block_type":"box","text":"Arabia. As a result, economic conditions of Saudi Arabia may be particularly affected by changes in the","page_number":138,"box":{"x":116,"y":366,"width":771,"height":12}},{"id":"b5e065e8-68dc-408b-8ba3-5b5268bca0bf","block_type":"box","text":"U.S. economy. A decrease in U.S. imports or exports, new trade and financial regulations or tariffs,","page_number":138,"box":{"x":117,"y":382,"width":738,"height":12}},{"id":"7f656b61-1ba3-42f3-88a3-7c714bd0fafe","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":138,"box":{"x":116,"y":397,"width":746,"height":12}},{"id":"86d343fc-3b24-4fca-9857-c26aa0dadc1e","block_type":"box","text":"adverse effect on the economic conditions of Saudi Arabia and, as a result, securities to which the","page_number":138,"box":{"x":116,"y":413,"width":733,"height":11}},{"id":"d7389976-ed19-4981-86ae-de72efc1372e","block_type":"box","text":"Fund has exposure. Political instability in North Africa and the larger Middle East region has caused","page_number":138,"box":{"x":117,"y":428,"width":743,"height":12}},{"id":"c0bc36b7-63e0-40a5-a449-a47dc0188718","block_type":"box","text":"significant disruptions to many industries. Continued political and social unrest in these areas may","page_number":138,"box":{"x":116,"y":444,"width":732,"height":12}},{"id":"ef506e8e-8df4-48fd-b126-a9dd4a841c57","block_type":"box","text":"negatively affect the value of securities in a Fund’s portfolio.","page_number":138,"box":{"x":117,"y":459,"width":449,"height":12}},{"id":"63575f7c-c60a-4f27-9674-d50371d74c2c","block_type":"box","text":"Certain issuers located in Saudi Arabia may operate in, or have dealings with, countries subject to","page_number":138,"box":{"x":117,"y":490,"width":731,"height":12}},{"id":"123df4cb-deda-4b9d-9abf-4e72bba3bd6b","block_type":"box","text":"sanctions and/or embargoes imposed by the U.S. Government and the United Nations and/or countries","page_number":138,"box":{"x":116,"y":506,"width":772,"height":12}},{"id":"d24d72a4-5b37-4206-a7f8-c9bfd7e7bf5e","block_type":"box","text":"identified by the U.S. Government as state sponsors of terrorism. As a result, an issuer may sustain","page_number":138,"box":{"x":117,"y":521,"width":744,"height":12}},{"id":"1b51e247-1dbc-4ff6-9c0e-a6331c207cae","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":138,"box":{"x":116,"y":537,"width":734,"height":12}},{"id":"01420679-6678-408d-9394-7d17974e641b","block_type":"box","text":"countries. A Fund, as an investor in such issuers will be indirectly subject to those risks.","page_number":138,"box":{"x":116,"y":552,"width":655,"height":12}},{"id":"d48cb848-19ee-40d0-b946-07f39d12417b","block_type":"box","text":"Risks of Investing in Venezuela.","page_number":138,"box":{"x":116,"y":583,"width":237,"height":12}},{"id":"957829f3-ff65-4936-afd6-3fa83ef3c87c","block_type":"box","text":"Investment in Venezuela may subject a Fund to legal, regulatory,","page_number":138,"box":{"x":354,"y":583,"width":493,"height":12}},{"id":"7cfe7a0e-611c-414f-b83d-d101ae0e4b78","block_type":"box","text":"political, currency, security, expropriation and/or nationalization of assets and economic risk specific to","page_number":138,"box":{"x":117,"y":599,"width":764,"height":12}},{"id":"6ee54982-7406-445d-82e2-9186df307ab6","block_type":"box","text":"Venezuela. Venezuela is extremely well endowed with natural resources, including oil and natural gas,","page_number":138,"box":{"x":116,"y":614,"width":765,"height":12}},{"id":"b97acfaf-03a6-4d84-bf90-5686cd16994a","block_type":"box","text":"and its economy is heavily dependent on export of natural resources to key trading partners. Any act of","page_number":138,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"8c36a378-cd3b-4bef-ba46-b9424272ed3c","block_type":"box","text":"terrorism, an armed conflict or a breakdown of a key trading relationship that disrupts the production or","page_number":138,"box":{"x":116,"y":645,"width":767,"height":12}},{"id":"058fbc53-36b6-4499-bc7f-84451eddafe5","block_type":"box","text":"export of natural resources will likely negatively affect the Venezuelan economy. The government","page_number":138,"box":{"x":116,"y":661,"width":723,"height":12}},{"id":"413d4beb-a7e0-4af4-b097-7ce0d790acf1","block_type":"box","text":"continues to control key sectors of the economy, including upstream oil and gas production, and has","page_number":138,"box":{"x":116,"y":676,"width":744,"height":12}},{"id":"faea0e32-3177-4ae9-8cb5-0dca238ad1ad","block_type":"box","text":"sought to increase its role in key sectors, such as telecommunications and steel. Meanwhile,","page_number":138,"box":{"x":116,"y":692,"width":686,"height":12}},{"id":"01a153b1-7b13-43b3-92f6-4347f5e6dfd2","block_type":"box","text":"ambiguities in the investment environment remain, such as continued high levels of bureaucracy and","page_number":138,"box":{"x":116,"y":707,"width":747,"height":12}},{"id":"94541d3c-d236-462d-904f-c616169883db","block_type":"box","text":"corruption, large macroeconomic imbalances, and political and policy uncertainty. Friction continues","page_number":138,"box":{"x":116,"y":723,"width":741,"height":12}},{"id":"cb88c1e2-56c0-4621-b087-9588d9cb6234","block_type":"box","text":"between the governments of the U.S. and Venezuela. The U.S. has imposed economic sanctions,","page_number":138,"box":{"x":117,"y":738,"width":725,"height":12}},{"id":"78a160b4-0663-4306-902a-d3cb9aab0801","block_type":"box","text":"which consist of asset freezes and sectoral sanctions, on certain Venezuelan individuals and","page_number":138,"box":{"x":116,"y":754,"width":687,"height":11}},{"id":"5c90e0c4-1686-47f1-89f5-0108fd918117","block_type":"box","text":"Venezuelan corporate entities, and on the Venezuelan government. The U.S. could also institute","page_number":138,"box":{"x":116,"y":769,"width":717,"height":12}},{"id":"db9d771a-05c4-4e95-aa2f-d39a3bed7e02","block_type":"box","text":"broader sanctions on Venezuela. The U.S. has also taken military action against Venezuela in an effort","page_number":138,"box":{"x":117,"y":785,"width":764,"height":12}},{"id":"9a57d90c-fd1b-4579-b803-1ab853b31d27","block_type":"box","text":"to effect regime change. Military action, sanctions, or even the threat of further military action and","page_number":138,"box":{"x":116,"y":800,"width":721,"height":12}},{"id":"b9a2d7da-453b-47e5-814e-8089465927e1","block_type":"box","text":"sanctions, may result in the decline of the value and liquidity of Venezuelan securities, a weakening of","page_number":138,"box":{"x":116,"y":816,"width":758,"height":12}},{"id":"67619a94-774d-455c-93a7-9c3cff618635","block_type":"box","text":"the bolivar or other adverse consequences to the Venezuelan economy. These sanctions impair the","page_number":138,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"ac73d8b7-fc25-4266-9fa2-ebf013934e6e","block_type":"box","text":"ability of a Fund to buy, sell, receive or deliver those securities and/or assets. Additional sanctions","page_number":138,"box":{"x":116,"y":847,"width":732,"height":12}},{"id":"1f4e2a3b-dacd-4498-8ce1-006df3084963","block_type":"box","text":"against Venezuela may in the future be imposed by the U.S. or other countries. These factors, among","page_number":138,"box":{"x":116,"y":862,"width":761,"height":12}},{"id":"1db337a1-df71-4688-9f83-6a532833dc87","block_type":"box","text":"others, can have a negative impact on a Fund’s investments.","page_number":138,"box":{"x":116,"y":878,"width":457,"height":12}},{"id":"73841740-6888-472e-a7f7-d909965edf6b","block_type":"box","text":"II-51","page_number":138,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"eb57b7be-93db-4781-ac70-29264de57ebf","block_type":"box","text":"NM1026U-6030748-138/260","page_number":138,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0d4ff479-ffa6-4074-baac-d0217f622e5a","block_type":"box","text":"Brady Bonds.","page_number":139,"box":{"x":116,"y":87,"width":99,"height":12}},{"id":"fceada07-01fd-4e34-985b-de5a7fd2590f","block_type":"box","text":"Certain Funds may invest in Brady Bonds. A Fund’s emerging market debt securities","page_number":139,"box":{"x":217,"y":87,"width":639,"height":12}},{"id":"81fcc81f-58bf-403b-b4b4-c717bc35c272","block_type":"box","text":"may include emerging market governmental debt obligations commonly referred to as Brady Bonds.","page_number":139,"box":{"x":117,"y":102,"width":745,"height":13}},{"id":"f8588a75-b8b4-4757-9935-27e88096f661","block_type":"box","text":"Brady Bonds are securities created through the exchange of existing commercial bank loans to","page_number":139,"box":{"x":117,"y":118,"width":709,"height":12}},{"id":"58560a0d-c139-466e-9a0d-0dd40f5526b6","block_type":"box","text":"sovereign entities for new obligations in connection with debt restructurings under a debt restructuring","page_number":139,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"720baeae-aefd-4c25-ba7f-6a27fcdbf266","block_type":"box","text":"plan introduced by former U.S. Secretary of the Treasury, Nicholas F. Brady (the “Brady Plan”). Brady","page_number":139,"box":{"x":117,"y":149,"width":760,"height":12}},{"id":"e62640f2-f7dc-443d-8057-33a15e57e0e9","block_type":"box","text":"Plan debt restructurings have been implemented in a number of countries, including: Argentina,","page_number":139,"box":{"x":117,"y":165,"width":713,"height":12}},{"id":"3a33cc69-9298-4afb-9c72-718b79c21227","block_type":"box","text":"Bolivia, Brazil, Bulgaria, Costa Rica, the Dominican Republic, Ecuador, Jordan, Mexico, Niger, Nigeria,","page_number":139,"box":{"x":117,"y":180,"width":766,"height":12}},{"id":"6af84993-9f0d-45a6-a256-99bcaaf69566","block_type":"box","text":"Panama, Peru, the Philippines, Poland, Uruguay, Venezuela, and Vietnam. Beginning in the early","page_number":139,"box":{"x":117,"y":196,"width":728,"height":12}},{"id":"eaee03d9-5e95-4ed8-be44-cac10f905167","block_type":"box","text":"2000s, certain countries began retiring their Brady Bonds, including Brazil, Colombia, Mexico, the","page_number":139,"box":{"x":116,"y":211,"width":727,"height":12}},{"id":"1d1c3ae9-722d-4391-8ff0-9613042f428e","block_type":"box","text":"Philippines, and Venezuela.","page_number":139,"box":{"x":117,"y":227,"width":211,"height":11}},{"id":"2a65ae0b-c07a-45d5-b964-0c3e11402c1f","block_type":"box","text":"Brady Bonds may be collateralized or uncollateralized, are issued in various currencies (primarily the","page_number":139,"box":{"x":117,"y":259,"width":752,"height":12}},{"id":"65f0d4fd-60ed-41a8-b80b-82760289f5be","block_type":"box","text":"U.S. dollar) and are actively traded in the OTC secondary market. Brady Bonds are not considered to","page_number":139,"box":{"x":117,"y":275,"width":756,"height":12}},{"id":"8cb112bd-4434-455c-9d2a-64c51e5c1e0d","block_type":"box","text":"be U.S. Government Securities. U.S. dollar-denominated, collateralized Brady Bonds, which may be","page_number":139,"box":{"x":117,"y":290,"width":747,"height":12}},{"id":"fb79de1f-1d46-4d3d-8064-a63e97a5c411","block_type":"box","text":"fixed rate par bonds or floating rate discount bonds, are generally collateralized in full as to principal by","page_number":139,"box":{"x":116,"y":306,"width":768,"height":12}},{"id":"c04cbde5-4dd5-40c2-9e92-c02d64ab80de","block_type":"box","text":"U.S. Treasury zero-coupon bonds having the same maturity as the Brady Bonds. Interest payments on","page_number":139,"box":{"x":117,"y":321,"width":767,"height":12}},{"id":"d368e9f5-b268-4515-b3da-70a50b4f4385","block_type":"box","text":"these Brady Bonds generally are collateralized on a one-year or longer rolling-forward basis by cash or","page_number":139,"box":{"x":116,"y":337,"width":769,"height":12}},{"id":"9821c952-c114-4022-ab4c-7f5b15311b99","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":139,"box":{"x":116,"y":352,"width":738,"height":12}},{"id":"5852a157-de80-45f4-9213-f6f67ace8aab","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":139,"box":{"x":117,"y":368,"width":769,"height":12}},{"id":"17bbbe8a-5627-4e3b-964b-a3a46f7579fe","block_type":"box","text":"based on the applicable interest rate at that time and is adjusted at regular intervals thereafter. Certain","page_number":139,"box":{"x":117,"y":383,"width":764,"height":12}},{"id":"59862784-c9bb-4c50-8cc5-34abdb923c41","block_type":"box","text":"Brady Bonds are entitled to “value recovery payments” in certain circumstances, which in effect","page_number":139,"box":{"x":117,"y":399,"width":711,"height":12}},{"id":"7d5aed2c-9dd7-4520-b5ae-ee7f069a0dba","block_type":"box","text":"constitute supplemental interest payments but generally are not collateralized. Brady Bonds are often","page_number":139,"box":{"x":116,"y":414,"width":757,"height":12}},{"id":"31e14aad-590d-4084-9060-659ec0740b35","block_type":"box","text":"viewed as having three or four valuation components: (i) the collateralized repayment of principal at","page_number":139,"box":{"x":116,"y":430,"width":743,"height":12}},{"id":"3f7c5dde-d12b-4041-9013-49cca8b52474","block_type":"box","text":"final maturity; (ii) the collateralized interest payments; (iii) the uncollateralized interest payments; and","page_number":139,"box":{"x":116,"y":445,"width":753,"height":12}},{"id":"e46dd6a1-fde2-4943-a2f0-bd10e956060d","block_type":"box","text":"(iv) any uncollateralized repayment of principal at maturity (the uncollateralized amounts constitute the","page_number":139,"box":{"x":117,"y":461,"width":763,"height":12}},{"id":"5b3f4a77-7527-4f68-89fb-6acbe4bce491","block_type":"box","text":"“residual risk”).","page_number":139,"box":{"x":116,"y":476,"width":116,"height":12}},{"id":"3be213c2-e446-42b4-a85e-45a004652bbe","block_type":"box","text":"Brady Bonds involve various risk factors described above associated with investing in foreign","page_number":139,"box":{"x":117,"y":509,"width":695,"height":12}},{"id":"2e5eba94-5dab-411d-a4ef-903600294d2c","block_type":"box","text":"securities, including the history of defaults with respect to commercial bank loans by public and private","page_number":139,"box":{"x":116,"y":524,"width":765,"height":13}},{"id":"3aef6b18-adc1-4d15-96fe-cf49df151b65","block_type":"box","text":"entities of countries issuing Brady Bonds. In light of the residual risk of Brady Bonds and, among other","page_number":139,"box":{"x":116,"y":540,"width":764,"height":12}},{"id":"dc3182de-3035-403c-a700-9b134983f401","block_type":"box","text":"factors, the history of defaults, investments in Brady Bonds are considered speculative. There can be","page_number":139,"box":{"x":116,"y":555,"width":756,"height":13}},{"id":"c63ed51d-5034-4425-8b94-6561d565b28d","block_type":"box","text":"no assurance that Brady Bonds in which the Funds may invest will not be subject to restructuring","page_number":139,"box":{"x":117,"y":571,"width":723,"height":12}},{"id":"a780db56-e10c-4abe-9302-c24de96581f7","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":139,"box":{"x":116,"y":586,"width":752,"height":13}},{"id":"8ec1e80d-97d6-42e3-aaef-133ca7de82de","block_type":"box","text":"principal on any of its holdings.","page_number":139,"box":{"x":117,"y":602,"width":234,"height":12}},{"id":"e198ea4b-5e1c-423d-9e4f-bced2c403fef","block_type":"box","text":"China Investments Risk.","page_number":139,"box":{"x":117,"y":635,"width":185,"height":9}},{"id":"60f5df02-317a-4fb3-a035-57f78b218d9f","block_type":"box","text":"Investments in securities of companies domiciled in the People’s Republic of China (“China” or the","page_number":139,"box":{"x":117,"y":659,"width":734,"height":12}},{"id":"817988d8-680d-4946-b35e-52d871a9dbfc","block_type":"box","text":"“PRC”), including certain Hong Kong-listed and U.S.-listed securities, involve a high degree of risk and","page_number":139,"box":{"x":116,"y":674,"width":758,"height":12}},{"id":"4bd784a6-2def-484e-a0e5-816329c9f574","block_type":"box","text":"special considerations not typically associated with investing in the U.S. securities markets. Such","page_number":139,"box":{"x":116,"y":690,"width":719,"height":12}},{"id":"d2313c1c-de56-42dd-af58-8b7d4b1d549d","block_type":"box","text":"heightened risks include, among others, an authoritarian government, popular unrest associated with","page_number":139,"box":{"x":117,"y":705,"width":747,"height":12}},{"id":"ef36adb1-9279-49e1-b93a-84a89f3ffab2","block_type":"box","text":"demands for improved political, economic and social conditions, the impact of regional conflict on the","page_number":139,"box":{"x":116,"y":721,"width":748,"height":12}},{"id":"5af546c2-5153-4514-aa54-57c4e4208b24","block_type":"box","text":"economy and hostile relations with other countries.","page_number":139,"box":{"x":116,"y":736,"width":376,"height":12}},{"id":"8e3dd06c-68c8-4d25-a827-6661530d3b08","block_type":"box","text":"Military conflicts, either in response to internal social unrest or conflicts with other countries, could","page_number":139,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"89c8610e-9a90-41b7-abd4-82d9f0b7984f","block_type":"box","text":"disrupt economic development. The Chinese economy is vulnerable to the long-running disagreements","page_number":139,"box":{"x":116,"y":784,"width":764,"height":13}},{"id":"9f55d480-7311-4a6e-986f-008a6963be8b","block_type":"box","text":"and religious and nationalist disputes with Tibet and the Xinjiang region. Since 1997, there have been","page_number":139,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"81a9f174-9308-4d0c-8388-be429927e6ee","block_type":"box","text":"tensions between the Chinese government and many people in Hong Kong who perceive China as","page_number":139,"box":{"x":116,"y":815,"width":733,"height":13}},{"id":"90df893b-7332-452a-8fb9-cb332e853842","block_type":"box","text":"tightening control over Hong Kong’s semi-autonomous liberal political, economic, legal, and social","page_number":139,"box":{"x":116,"y":831,"width":731,"height":12}},{"id":"48722af7-98ce-4fe5-8e0b-cc5cb8325016","block_type":"box","text":"framework. Protests and unrest have increased tensions even further. Due to the interconnected","page_number":139,"box":{"x":116,"y":846,"width":721,"height":10}},{"id":"8342318d-028b-4311-a232-42145c33927e","block_type":"box","text":"nature of the Hong Kong and Chinese economies, this instability in Hong Kong may cause uncertainty","page_number":139,"box":{"x":117,"y":862,"width":761,"height":12}},{"id":"6cb3406e-f17f-49ee-b65d-8471c8ab584f","block_type":"box","text":"in the Hong Kong and Chinese markets. China has a complex territorial dispute regarding the","page_number":139,"box":{"x":117,"y":877,"width":697,"height":13}},{"id":"1ba42daa-d449-4e7c-ab03-597ef26368da","block_type":"box","text":"II-52","page_number":139,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"1496e27c-481c-48ba-807d-aa1e742e5fb1","block_type":"box","text":"NM1026U-6030748-139/260","page_number":139,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"99348d4d-3ffa-49a7-97ff-ae5fb0c2132a","block_type":"box","text":"sovereignty of Taiwan and has made threats of invasion. Taiwan-based companies and individuals are","page_number":140,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"14cb76ca-8325-4909-9a41-7b8f66f7aa69","block_type":"box","text":"significant investors in China. The continuing hostility between China and Taiwan may have an adverse","page_number":140,"box":{"x":116,"y":102,"width":772,"height":13}},{"id":"8e06989a-45c4-4ad2-a51e-2b1a4fdb76da","block_type":"box","text":"impact on the value of the Fund’s investments in China or Taiwan, may cause a suspension in a","page_number":140,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"8982ea03-524b-455f-ac45-aca9f0c9bdf6","block_type":"box","text":"Fund’s ability to trade in certain securities or other assets or may otherwise make such investments","page_number":140,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"3c4ca737-52fa-4105-9c44-936fcc7f55cd","block_type":"box","text":"impracticable or impossible. Any escalation of hostility between China and Taiwan would likely have a","page_number":140,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"89ec5584-07dc-4903-8d03-018377eb418c","block_type":"box","text":"significant adverse impact on the value of the Fund’s investments in both countries and the region. In","page_number":140,"box":{"x":116,"y":165,"width":755,"height":12}},{"id":"260ff46a-5034-4925-b326-839aa7821878","block_type":"box","text":"addition, China has strained international relations with Japan, India, the Philippines and other","page_number":140,"box":{"x":116,"y":180,"width":703,"height":12}},{"id":"d0b23ab1-6560-4cf5-b16b-5c69f28557c6","block_type":"box","text":"neighbors due to territorial disputes, historical animosities and other defense concerns. Frictions","page_number":140,"box":{"x":117,"y":196,"width":717,"height":12}},{"id":"0df28f15-536d-4989-b4db-6103b404aaee","block_type":"box","text":"between China and the Philippines in the South China Sea pose a risk of escalation potentially leading","page_number":140,"box":{"x":117,"y":211,"width":765,"height":12}},{"id":"7ad8b9fa-3ce7-47b4-be08-9431625656ee","block_type":"box","text":"to military conflict. Additionally, China is alleged to have participated in state-sponsored cyberattacks","page_number":140,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"e0fea54c-a2e1-41ce-9d66-48c53112df55","block_type":"box","text":"against foreign companies and foreign governments. Actual and threatened responses to such activity","page_number":140,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"0961a9e6-ac41-4345-9ed3-f9a817448e2a","block_type":"box","text":"and strained international relations, including purchasing restrictions, sanctions, tariffs or cyberattacks","page_number":140,"box":{"x":116,"y":258,"width":760,"height":12}},{"id":"349cadee-a7b0-4c97-98c6-7e73cf503db2","block_type":"box","text":"on the Chinese government or Chinese companies, may impact China’s economy and Chinese issuers","page_number":140,"box":{"x":116,"y":273,"width":769,"height":12}},{"id":"dc9ebd0b-99d8-403c-96e3-3800cac9c5b8","block_type":"box","text":"of securities in which a Fund invests. China could be affected by military events on the Korean","page_number":140,"box":{"x":116,"y":289,"width":705,"height":12}},{"id":"d5af8ef0-53a4-4e3f-85ec-315764cf6382","block_type":"box","text":"peninsula or internal instability within North Korea. These situations may cause uncertainty in the","page_number":140,"box":{"x":117,"y":304,"width":723,"height":12}},{"id":"a628b14c-432a-4a1c-b71e-f91f26be6ade","block_type":"box","text":"Chinese market and may adversely affect the performance of the Chinese economy.","page_number":140,"box":{"x":117,"y":320,"width":631,"height":12}},{"id":"e6c689ea-3330-40d1-a902-6d79702989a0","block_type":"box","text":"The Chinese government has implemented economic reforms in order to liberalize trade policy,","page_number":140,"box":{"x":116,"y":347,"width":712,"height":13}},{"id":"a2577397-0bd7-4b64-89cd-de1e41040511","block_type":"box","text":"promote foreign investment in the economy, reduce government control of the economy and develop","page_number":140,"box":{"x":117,"y":363,"width":752,"height":12}},{"id":"a57208ae-b0d1-4160-aae7-9f67d697fcba","block_type":"box","text":"market mechanisms. However, the Chinese government still exercises substantial influence over many","page_number":140,"box":{"x":117,"y":378,"width":768,"height":13}},{"id":"c5aafeeb-7666-440b-89f0-5efffd7bdee1","block_type":"box","text":"aspects of the private sector and may own or control many companies. Chinese companies, such as","page_number":140,"box":{"x":116,"y":394,"width":751,"height":12}},{"id":"61f74d6c-9963-438b-bf06-1733cc6d05ad","block_type":"box","text":"those in the financial services or technology sectors, and potentially other sectors in the future, are","page_number":140,"box":{"x":116,"y":409,"width":736,"height":13}},{"id":"ec4eabbc-83a9-4612-b1f7-fafa5f129a40","block_type":"box","text":"subject to the risk that Chinese authorities can intervene in their operations and structure. The Chinese","page_number":140,"box":{"x":116,"y":425,"width":769,"height":12}},{"id":"9aae2810-c670-48e9-a304-c3be424b9671","block_type":"box","text":"government continues to maintain a major role in economic policymaking and investing in China","page_number":140,"box":{"x":116,"y":440,"width":717,"height":13}},{"id":"c626b721-8487-4e68-a866-8010dc7ef282","block_type":"box","text":"involves risk of loss due to expropriation, nationalization, confiscation of assets and property or the","page_number":140,"box":{"x":117,"y":456,"width":736,"height":12}},{"id":"c5a3a079-8059-47db-aaec-53a7f51b1130","block_type":"box","text":"imposition of restrictions on foreign investments and on repatriation of capital invested.","page_number":140,"box":{"x":117,"y":471,"width":647,"height":13}},{"id":"e435cc1b-f12c-4df7-85ab-64b1dd7ad0c0","block_type":"box","text":"The Chinese government may intervene in the Chinese financial markets, such as by the imposition of","page_number":140,"box":{"x":116,"y":499,"width":764,"height":13}},{"id":"9f8c71bf-cda7-4c02-97c8-3c84b639dee3","block_type":"box","text":"trading restrictions, a ban on “naked” short selling or the suspension of short selling for certain stocks.","page_number":140,"box":{"x":116,"y":515,"width":761,"height":12}},{"id":"700db8d1-2e5c-4c74-8b38-53fb98b6ed96","block_type":"box","text":"This may affect market price and liquidity of these stocks, and may have an unpredictable impact on","page_number":140,"box":{"x":116,"y":530,"width":748,"height":13}},{"id":"d44ec171-4493-4e93-a3f1-9a3a4c7d1144","block_type":"box","text":"the investment activities of the Funds. Furthermore, such market interventions may have a negative","page_number":140,"box":{"x":116,"y":546,"width":745,"height":12}},{"id":"59f8d108-7605-4792-a57f-6e8ae8857cd1","block_type":"box","text":"impact on market sentiment which may in turn affect the performance of the securities markets and as","page_number":140,"box":{"x":117,"y":561,"width":762,"height":13}},{"id":"68e9d496-1787-4891-8bb2-6294b0774bcf","block_type":"box","text":"a result the performance of the Funds.","page_number":140,"box":{"x":116,"y":577,"width":290,"height":12}},{"id":"752f8140-fd56-41f1-837b-5b20214e9bf7","block_type":"box","text":"In addition, there is less regulation and monitoring of Chinese securities markets and the activities of","page_number":140,"box":{"x":117,"y":605,"width":749,"height":12}},{"id":"ad49058b-d6d5-4cd1-903d-d24a1cf63191","block_type":"box","text":"investors, brokers and other participants than in the United States. Accordingly, issuers of securities in","page_number":140,"box":{"x":117,"y":620,"width":763,"height":12}},{"id":"ed53e144-e1dc-422d-99d5-bfbc4b27b102","block_type":"box","text":"China, including Chinese companies that are listed on U.S. exchanges, are not subject to the same","page_number":140,"box":{"x":117,"y":636,"width":741,"height":12}},{"id":"7e878863-596f-4538-8ed6-19afcf54f5ed","block_type":"box","text":"degree of regulation as are U.S. issuers with respect to such matters as insider trading rules, tender","page_number":140,"box":{"x":116,"y":651,"width":747,"height":12}},{"id":"e8a679b6-c4b9-4295-a660-df09c8462ae4","block_type":"box","text":"offer regulation, accounting standards or auditor oversight, stockholder proxy requirements and the","page_number":140,"box":{"x":116,"y":667,"width":735,"height":12}},{"id":"d1b11c2e-4fa4-4150-8aaf-32fba013d239","block_type":"box","text":"requirements mandating timely and accurate disclosure of information. Securities markets in China are","page_number":140,"box":{"x":117,"y":682,"width":761,"height":12}},{"id":"ac734a4d-c872-476a-b86c-f257b94f5cf0","block_type":"box","text":"in the process of change and further development. This may lead to trading volatility, difficulty in the","page_number":140,"box":{"x":117,"y":698,"width":738,"height":12}},{"id":"fffaa45a-d0f0-4a2d-b82d-eb563dd3591a","block_type":"box","text":"settlement and recording of transactions and difficulty in interpreting and applying the relevant","page_number":140,"box":{"x":116,"y":713,"width":697,"height":12}},{"id":"952ade52-09c6-42ef-9c6d-d905e23e513c","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":140,"box":{"x":117,"y":729,"width":750,"height":12}},{"id":"eb014497-cb44-4030-bd2f-a4b16b163a90","block_type":"box","text":"settlement and administration of securities in China that is customary in more developed markets. In","page_number":140,"box":{"x":116,"y":744,"width":743,"height":12}},{"id":"d0131c9c-d281-4183-92f2-0abeefe68ccd","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":140,"box":{"x":117,"y":760,"width":759,"height":12}},{"id":"dab3b700-394a-4ada-8822-61e5796d135d","block_type":"box","text":"behalf of the Fund by a subcustodian.","page_number":140,"box":{"x":117,"y":775,"width":278,"height":12}},{"id":"bc38d94c-7a5a-450d-b50c-6c9316a4e1ea","block_type":"box","text":"There may be significant obstacles to obtaining information necessary for investigations into or","page_number":140,"box":{"x":116,"y":803,"width":702,"height":12}},{"id":"7618ecab-3bb1-4b7d-9e7e-4c0ef3512e0a","block_type":"box","text":"litigation against Chinese companies, and shareholders may have limited legal remedies. The Funds","page_number":140,"box":{"x":117,"y":819,"width":745,"height":12}},{"id":"0ef5b219-f6f0-4ce6-8d64-3e78b1eaf749","block_type":"box","text":"do not select investments based on investor protection considerations.","page_number":140,"box":{"x":116,"y":834,"width":528,"height":12}},{"id":"2ce25010-5438-409b-aa8f-ac54c1bda7d5","block_type":"box","text":"The Chinese government historically took positions that prevented the U.S. Public Company","page_number":140,"box":{"x":116,"y":862,"width":689,"height":12}},{"id":"fff05172-3b5c-4f87-baf8-1687ea4eea93","block_type":"box","text":"Accounting Oversight Board (“PCAOB”) from inspecting the audit work and practices of accounting","page_number":140,"box":{"x":116,"y":878,"width":738,"height":12}},{"id":"65b9cad0-d775-48d0-a22d-29036b1f8c78","block_type":"box","text":"II-53","page_number":140,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"4f4d57cb-0c1f-4ae7-8820-9e4faa2859f7","block_type":"box","text":"NM1026U-6030748-140/260","page_number":140,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c6656f6b-84d0-41bf-b2f5-8f3b594e1dce","block_type":"box","text":"firms in mainland China and Hong Kong for compliance with U.S. law and professional standards. On","page_number":141,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"2123bbcc-0981-4855-80f5-04d513f7663d","block_type":"box","text":"August 26, 2022, the PCAOB signed a Statement of Protocol with the China Securities Regulatory","page_number":141,"box":{"x":116,"y":102,"width":734,"height":13}},{"id":"32f514c7-f349-43ec-935d-4476af773a46","block_type":"box","text":"Commission and the Ministry of Finance of the PRC, which marked the first step toward opening","page_number":141,"box":{"x":117,"y":118,"width":719,"height":12}},{"id":"d3d41e6d-3a72-416d-a06b-d321ce65b2b5","block_type":"box","text":"access for the PCAOB to inspect and investigate registered public accounting firms headquartered in","page_number":141,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"48793ecb-dd05-48e2-9aca-7c45c0be2da2","block_type":"box","text":"mainland China and Hong Kong completely in accordance with U.S. law. However, as this","page_number":141,"box":{"x":117,"y":149,"width":672,"height":12}},{"id":"175a8d81-67b6-492d-aab1-d176b259b655","block_type":"box","text":"development is relatively recent, the implementation of the Statement of Protocol remains to be tested.","page_number":141,"box":{"x":116,"y":165,"width":767,"height":12}},{"id":"2b403099-3d17-4dfd-ad48-771e286abb89","block_type":"box","text":"Audits performed by PCAOB-registered accounting firms in mainland China and Hong Kong may be","page_number":141,"box":{"x":116,"y":180,"width":747,"height":12}},{"id":"b82fdfca-f91e-43aa-88cd-081827c96814","block_type":"box","text":"less reliable than those performed by firms subject to PCAOB inspection. Accordingly, information","page_number":141,"box":{"x":117,"y":196,"width":730,"height":12}},{"id":"875ec5b6-ef02-4aac-9394-bd18e375fd9d","block_type":"box","text":"about the Chinese securities in which the Funds invest may be less reliable or complete. Under","page_number":141,"box":{"x":116,"y":211,"width":712,"height":12}},{"id":"df74e266-04e5-4082-8326-3babbbebd2dd","block_type":"box","text":"amendments to the Sarbanes-Oxley Act enacted in December 2020, which requires that the PCAOB","page_number":141,"box":{"x":116,"y":227,"width":752,"height":12}},{"id":"cf3bff3f-7acf-4773-9dbb-74e7c45afd20","block_type":"box","text":"be permitted to inspect the accounting firm of a U.S.-listed Chinese issuer, Chinese companies with","page_number":141,"box":{"x":117,"y":242,"width":743,"height":12}},{"id":"e38f29ac-7cbd-4df6-97ec-996fc3ef3b1d","block_type":"box","text":"securities listed on U.S. exchanges may be delisted if the PCAOB is unable to inspect the","page_number":141,"box":{"x":116,"y":258,"width":670,"height":12}},{"id":"63a1d820-2d97-4411-93e7-b1ea6de6a1dc","block_type":"box","text":"accounting firm.","page_number":141,"box":{"x":116,"y":273,"width":123,"height":12}},{"id":"cb883736-634a-4d27-935a-e715227933dd","block_type":"box","text":"The Renminbi (“RMB”) is currently not a freely convertible currency and is subject to foreign exchange","page_number":141,"box":{"x":116,"y":304,"width":763,"height":12}},{"id":"ba7159fa-c255-4e12-ac40-c8fcf7adce6a","block_type":"box","text":"control policies and repatriation restrictions imposed by the Chinese government. The imposition of","page_number":141,"box":{"x":116,"y":320,"width":740,"height":12}},{"id":"a76c0a2a-09b6-4511-ba88-695f0e6cb2aa","block_type":"box","text":"currency controls may negatively impact performance and liquidity of the Funds as capital may become","page_number":141,"box":{"x":116,"y":335,"width":772,"height":12}},{"id":"419d53fe-2c1b-4a15-a3c7-23f3cb72570d","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":141,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"601f306b-5769-45fd-9884-11aeca9d5cf5","block_type":"box","text":"required governmental approval for repatriation of capital, as well as by the application to the Funds of","page_number":141,"box":{"x":117,"y":366,"width":762,"height":12}},{"id":"419d4c52-803e-49d0-86aa-95e8c397b59f","block_type":"box","text":"any restrictions on investments. Investing in entities either in, or which have a substantial portion of","page_number":141,"box":{"x":116,"y":382,"width":740,"height":12}},{"id":"1db02827-fd8b-41a2-b5a4-ff9a9fa41f36","block_type":"box","text":"their operations in, the PRC may require the Funds to adopt special procedures, seek local","page_number":141,"box":{"x":116,"y":397,"width":680,"height":12}},{"id":"bedada11-aee7-4fe6-802a-f12e0c1f395e","block_type":"box","text":"government approvals or take other actions, each of which may involve additional costs and delays to","page_number":141,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"becb1ba3-e4dd-40e4-ab5c-81e96eb636b2","block_type":"box","text":"the Funds. The Fund may also incur costs in connection with conversions between U.S. dollars and","page_number":141,"box":{"x":116,"y":428,"width":743,"height":12}},{"id":"00c4f9c9-9937-4d12-b34f-2b0791fdf3d1","block_type":"box","text":"RMB, as well as in connection with conversions between the two separate types of RMB, the onshore","page_number":141,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"87195c5b-7900-4b39-b6fe-b7d5a8c0a27a","block_type":"box","text":"RMB (“CNY”) and the offshore RMB (“CNH”).","page_number":141,"box":{"x":117,"y":459,"width":340,"height":12}},{"id":"f2a9e389-d677-48bd-ba22-1e12686c5775","block_type":"box","text":"Many Chinese companies listed on U.S. exchanges use variable interest entities or “VIEs” in their","page_number":141,"box":{"x":117,"y":490,"width":727,"height":12}},{"id":"97b09e48-4e75-4743-9b36-e543621c0f70","block_type":"box","text":"structure as a result of foreign ownership restrictions. In a VIE structure, a Chinese operating company","page_number":141,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"3eaee9b6-c1e4-46cd-a6ea-87044e3d2ce2","block_type":"box","text":"establishes a shell company in another jurisdiction to issue stock to public shareholders. When a VIE","page_number":141,"box":{"x":116,"y":521,"width":754,"height":12}},{"id":"b36e5c10-276f-42d7-9add-ade2de5384d5","block_type":"box","text":"structure is used by a Chinese company to list its stock in the U.S., instead of owning the equity","page_number":141,"box":{"x":116,"y":537,"width":715,"height":12}},{"id":"f3e4a6da-72a0-4f47-9ad6-a5ad490fd086","block_type":"box","text":"securities of the Chinese company, the U.S.-listed shell company directly or indirectly enters into","page_number":141,"box":{"x":116,"y":552,"width":721,"height":12}},{"id":"1abe3100-03be-4df0-8baa-598b4a51e06c","block_type":"box","text":"contracts with the Chinese operating company under Chinese law. These contracts provide the U.S.-","page_number":141,"box":{"x":116,"y":568,"width":749,"height":12}},{"id":"a41e2101-f68b-452a-82cc-26806cd781da","block_type":"box","text":"listed shell company with only economic exposure to the Chinese company and do not represent","page_number":141,"box":{"x":117,"y":583,"width":722,"height":12}},{"id":"81cb277a-3983-4400-b3f5-20948c130d85","block_type":"box","text":"equity ownership in the operating company.","page_number":141,"box":{"x":116,"y":599,"width":329,"height":12}},{"id":"aec398e3-1d65-43ad-b6c9-3e6c90f1f916","block_type":"box","text":"While VIEs are a longstanding practice that is well known to Chinese officials and regulators, they have","page_number":141,"box":{"x":116,"y":630,"width":770,"height":12}},{"id":"c8bcc69f-8ed6-4faa-8f6d-75015841b46b","block_type":"box","text":"not been formally recognized under Chinese law. The Chinese government has provided guidance to","page_number":141,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"5734c297-5286-40ba-be42-fcb63a2e6555","block_type":"box","text":"and placed restrictions on Chinese-based companies raising capital offshore, including through VIEs.","page_number":141,"box":{"x":116,"y":661,"width":749,"height":12}},{"id":"64c57be7-9e80-4280-bbfb-f33d779cb53a","block_type":"box","text":"In 2023, the China Securities Regulatory Commission (“CSRC”) released new rules that permit the use","page_number":141,"box":{"x":117,"y":676,"width":762,"height":12}},{"id":"64c5a79a-a127-457b-a003-069bd81afca7","block_type":"box","text":"of VIE structures, provided they abide by Chinese laws and register with the CSRC. The rules,","page_number":141,"box":{"x":116,"y":692,"width":699,"height":12}},{"id":"f990e6d2-eddb-4720-ab16-bf0bf901ab37","block_type":"box","text":"however, may cause Chinese companies to undergo greater scrutiny and add costs to VIE structures.","page_number":141,"box":{"x":117,"y":707,"width":753,"height":12}},{"id":"44497c1f-955b-4b6a-921c-3e1e2c694f66","block_type":"box","text":"Intervention, rulemaking or guidance by the Chinese government with respect to VIE structures or the","page_number":141,"box":{"x":117,"y":723,"width":753,"height":12}},{"id":"ccfa74ef-0d93-4e90-b067-8d29e103e07d","block_type":"box","text":"non-enforcement of VIE-related contractual rights could significantly affect the operating company’s","page_number":141,"box":{"x":117,"y":738,"width":736,"height":12}},{"id":"3c8b9f7b-a9b5-4968-a641-4e9ead990235","block_type":"box","text":"business in China, the enforceability of the U.S.-listed shell company’s contractual arrangements with","page_number":141,"box":{"x":117,"y":754,"width":751,"height":12}},{"id":"e3bae0fe-a921-4724-bd07-053cf25bfabb","block_type":"box","text":"the Chinese company and the value of the U.S.-listed stock. Further, the VIE contractual arrangement","page_number":141,"box":{"x":116,"y":769,"width":757,"height":12}},{"id":"6faec49a-9696-4291-ad51-ef07d88ba836","block_type":"box","text":"would likely be subject to Chinese law and jurisdiction, and remedies available to the U.S.-listed shell","page_number":141,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"1ec54b95-80b3-4cab-b36c-462b5e6d1d4c","block_type":"box","text":"company are uncertain and could be ineffective. In addition to the risk of government intervention,","page_number":141,"box":{"x":116,"y":800,"width":724,"height":12}},{"id":"f44cacbc-fe6b-4076-9fc3-5be89ecd801d","block_type":"box","text":"investments through a VIE structure are subject to the risk that the China-based company (or its","page_number":141,"box":{"x":117,"y":816,"width":711,"height":12}},{"id":"799d4fad-ede4-48a7-99ae-e6a2d2125964","block_type":"box","text":"officers, directors, or Chinese equity owners) may breach those contractual arrangements, or Chinese","page_number":141,"box":{"x":116,"y":831,"width":763,"height":12}},{"id":"2d498afa-e5d5-49ad-810a-90fe80bb01d1","block_type":"box","text":"law changes in a way that adversely affects the enforceability of these arrangements, or those","page_number":141,"box":{"x":117,"y":847,"width":703,"height":12}},{"id":"ef96c7be-267f-47af-910a-3c3666cfc2e1","block_type":"box","text":"contracts are otherwise not enforceable under Chinese law, in which case the Fund may suffer","page_number":141,"box":{"x":116,"y":862,"width":708,"height":12}},{"id":"aa6ba45a-b225-4a0c-8a44-7a09c63069a1","block_type":"box","text":"significant losses on its investments through a VIE structure with little or no recourse available. Any","page_number":141,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"81d9bd9c-fbfb-451b-92ba-a18a940d245c","block_type":"box","text":"II-54","page_number":141,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7aa13932-63c2-46d6-9d6b-bdf5c3bdb7af","block_type":"box","text":"NM1026U-6030748-141/260","page_number":141,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dc48220c-097f-4328-b2e0-ad2c545a4c73","block_type":"box","text":"change in the operations of entities in a VIE structure, the status of VIE contractual arrangements or","page_number":142,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"bb299382-0a31-416b-ba2e-d907a133d4dc","block_type":"box","text":"the legal or regulatory environment in China, generally or with respect to specific industries, could","page_number":142,"box":{"x":116,"y":102,"width":729,"height":13}},{"id":"ec933f7f-f41d-41b9-a8a0-72a31ee26b17","block_type":"box","text":"result in significant, and possibly permanent and/or total, losses to a Fund.","page_number":142,"box":{"x":117,"y":118,"width":556,"height":12}},{"id":"76992cb8-73a3-4c3e-b7bf-3b1a7b1f0123","block_type":"box","text":"While the Chinese economy has experienced past periods of rapid growth, there is no assurance that","page_number":142,"box":{"x":116,"y":151,"width":758,"height":12}},{"id":"0ec5d07a-f678-484d-a930-e27b0eb7b063","block_type":"box","text":"such growth rates will recur. Other economic challenges for China include indebtedness, weak","page_number":142,"box":{"x":116,"y":166,"width":706,"height":12}},{"id":"f147edd3-df96-4d8f-b058-6e7bed4954f6","block_type":"box","text":"consumer demand, trade tensions, and an aging population. China continues to face pressure from its","page_number":142,"box":{"x":116,"y":182,"width":763,"height":12}},{"id":"c25cb49f-93d8-42be-9da4-c791cdf8930c","block_type":"box","text":"trading partners over its exporting of its excess industrial capacity and overall approach to economic","page_number":142,"box":{"x":116,"y":197,"width":748,"height":12}},{"id":"5e605fd3-b83d-4e3d-9ec7-07849c35cfd2","block_type":"box","text":"management. China’s economy is heavily dependent on export growth. Reduction in spending on","page_number":142,"box":{"x":117,"y":213,"width":727,"height":12}},{"id":"19e60569-66ba-47e4-8240-c21aa24ff28b","block_type":"box","text":"Chinese products and services, supply chain diversification, institution of additional tariffs, sanctions or","page_number":142,"box":{"x":117,"y":228,"width":765,"height":12}},{"id":"f35e5f15-0165-4921-927b-6d1a39bbaff0","block_type":"box","text":"other trade barriers (including as a result of heightened trade tensions between China and the United","page_number":142,"box":{"x":116,"y":244,"width":755,"height":12}},{"id":"1683d7ec-7e75-428d-8f84-9b5ce9832795","block_type":"box","text":"States or in response to actual or alleged Chinese cyber activity) or a downturn in any of the","page_number":142,"box":{"x":116,"y":259,"width":688,"height":12}},{"id":"3eb7a7b2-6fdc-40f9-836c-2c774a248a25","block_type":"box","text":"economies of China’s key trading partners may have an adverse impact on the Chinese economy and","page_number":142,"box":{"x":116,"y":275,"width":762,"height":12}},{"id":"01fa2689-acc8-4800-8a80-5cc9e33a2ded","block_type":"box","text":"the companies in which a Fund invests. Certain Chinese companies (which may change from time to","page_number":142,"box":{"x":116,"y":290,"width":753,"height":12}},{"id":"60c745cb-b561-460d-9cb0-2217afc60c89","block_type":"box","text":"time) are directly or indirectly subject to economic or trade restrictions imposed by the U.S. or other","page_number":142,"box":{"x":116,"y":306,"width":741,"height":12}},{"id":"4b67ffdf-0172-4927-88a6-5f9f9db68ff1","block_type":"box","text":"governments due to national security, human rights or other concerns of such government. For","page_number":142,"box":{"x":116,"y":321,"width":709,"height":12}},{"id":"6cc3343f-4387-41fd-9a73-3c448a679990","block_type":"box","text":"example, certain foreign technology companies are subject to U.S. export controls as those companies","page_number":142,"box":{"x":116,"y":337,"width":769,"height":12}},{"id":"e9f63b7f-4dc8-42d3-b507-5d86009431e0","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":142,"box":{"x":116,"y":352,"width":755,"height":12}},{"id":"6fbe34c7-7054-4311-90a4-9bfe222144aa","block_type":"box","text":"regions of China or by certain Chinese companies due to concerns about forced labor. Such","page_number":142,"box":{"x":117,"y":368,"width":688,"height":12}},{"id":"c66811de-3ade-4c05-9daf-6fff638a61a8","block_type":"box","text":"restrictions may have unanticipated and adverse effects on the Chinese economy and companies. Any","page_number":142,"box":{"x":117,"y":383,"width":767,"height":12}},{"id":"9c28ec00-ade3-4d27-a7a1-83b853968a81","block_type":"box","text":"action that targets Chinese financial markets or securities exchanges could interfere with orderly","page_number":142,"box":{"x":116,"y":399,"width":719,"height":12}},{"id":"8a68358a-e8da-4103-85c8-51c349cb2e86","block_type":"box","text":"trading, delay settlement or cause market disruptions. Certain companies may be subject to economic","page_number":142,"box":{"x":116,"y":414,"width":762,"height":12}},{"id":"98c364fd-dcb8-4884-9400-7f4c47e01ae2","block_type":"box","text":"or trade restrictions (but not investment restrictions) imposed by the U.S. or other governments due to","page_number":142,"box":{"x":116,"y":430,"width":761,"height":12}},{"id":"e74a43cd-6bbd-4549-9fdb-faf190271b69","block_type":"box","text":"national security, human rights or other concerns of such government. So long as these restrictions do","page_number":142,"box":{"x":117,"y":445,"width":764,"height":12}},{"id":"85ab18c1-9e1e-40d0-87a1-c68a171f826d","block_type":"box","text":"not include restrictions on investments, the Fund may invest in such companies.","page_number":142,"box":{"x":117,"y":461,"width":599,"height":12}},{"id":"019265a3-7964-482d-b34c-9d04b5c69346","block_type":"box","text":"The tax laws and regulations in the PRC are subject to change, including the issuance of authoritative","page_number":142,"box":{"x":116,"y":493,"width":760,"height":13}},{"id":"3c1349cd-91dd-4a6d-97fe-4a6dc03141b3","block_type":"box","text":"guidance or enforcement, possibly with retroactive effect. The interpretation, applicability and","page_number":142,"box":{"x":116,"y":509,"width":695,"height":12}},{"id":"0416f13c-44fc-4f5a-90e3-38a5e12068f3","block_type":"box","text":"enforcement of such laws by PRC tax authorities are not as consistent and transparent as those of","page_number":142,"box":{"x":116,"y":524,"width":737,"height":13}},{"id":"f060c628-85cd-47ae-bc4a-8a8abf5eafff","block_type":"box","text":"more developed nations, and may vary over time and from region to region. The application and","page_number":142,"box":{"x":117,"y":540,"width":716,"height":12}},{"id":"49c7ae9d-6013-4db0-85cc-7dfcb2502f83","block_type":"box","text":"enforcement of PRC tax rules could have a significant adverse effect on a Fund and its investors,","page_number":142,"box":{"x":116,"y":555,"width":727,"height":13}},{"id":"ae2ff4d0-1ce1-4ae3-b278-f29843606ab0","block_type":"box","text":"particularly in relation to capital gains withholding tax imposed upon non-residents. In addition, the","page_number":142,"box":{"x":117,"y":571,"width":732,"height":12}},{"id":"c211f251-63e1-4bd8-a7e7-d1cd46748b55","block_type":"box","text":"accounting, auditing and financial reporting standards and practices applicable to Chinese companies","page_number":142,"box":{"x":116,"y":586,"width":759,"height":13}},{"id":"cc59b512-da98-4049-b2c1-f08cb0e291a8","block_type":"box","text":"may be less rigorous, and may result in significant differences between financial statements prepared","page_number":142,"box":{"x":117,"y":602,"width":757,"height":12}},{"id":"6c7704f8-2406-44f1-9717-5ee82db0ed07","block_type":"box","text":"in accordance with PRC accounting standards and practice and those prepared in accordance with","page_number":142,"box":{"x":117,"y":617,"width":739,"height":13}},{"id":"38e08ce0-1a35-4662-8379-12c93733ba25","block_type":"box","text":"international accounting standards.","page_number":142,"box":{"x":117,"y":633,"width":264,"height":12}},{"id":"7ab7a92c-0e7e-4af6-b8a3-7dfb98836db7","block_type":"box","text":"From time to time and in recent years, China has experienced outbreaks of infectious illnesses and the","page_number":142,"box":{"x":117,"y":666,"width":762,"height":12}},{"id":"c01a856d-d435-4f3e-a313-c1cbef36382d","block_type":"box","text":"country may be subject to other public health threats, infectious illnesses, diseases or similar issues in","page_number":142,"box":{"x":116,"y":681,"width":757,"height":12}},{"id":"3ac03f89-3631-465b-b814-2184e05c834b","block_type":"box","text":"the future. Any spread of an infectious illness, public health threat or similar issue could reduce","page_number":142,"box":{"x":116,"y":697,"width":704,"height":12}},{"id":"b8f07064-58b5-49d5-80c8-5720767af749","block_type":"box","text":"consumer demand or economic output, result in market closures, travel restrictions or quarantines, and","page_number":142,"box":{"x":116,"y":712,"width":764,"height":12}},{"id":"7414221f-643c-489c-875f-e95434a44a5c","block_type":"box","text":"generally have a significant impact on the Chinese economy, which in turn could adversely affect a","page_number":142,"box":{"x":116,"y":728,"width":732,"height":12}},{"id":"0be6a69d-c5b0-4ff1-896e-749b413eb57f","block_type":"box","text":"Fund’s investments.","page_number":142,"box":{"x":117,"y":743,"width":147,"height":10}},{"id":"372a5d6b-87a5-4bd0-be57-098211ec2297","block_type":"box","text":"Risk of Investing through Stock Connect.","page_number":142,"box":{"x":116,"y":776,"width":302,"height":12}},{"id":"7bdf3292-2d4e-4083-8566-bd723eb2f744","block_type":"box","text":"General.","page_number":142,"box":{"x":117,"y":800,"width":62,"height":10}},{"id":"99d6cf02-7bc7-482f-99d6-2514546ef68a","block_type":"box","text":"China A-shares are equity securities of companies domiciled in China that trade on Chinese","page_number":142,"box":{"x":186,"y":800,"width":681,"height":12}},{"id":"f137a63b-083c-462f-a0ee-efa6531b0438","block_type":"box","text":"stock exchanges such as the Shanghai Stock Exchange (“SSE”), the Shenzhen Stock Exchange","page_number":142,"box":{"x":116,"y":815,"width":718,"height":13}},{"id":"80dd7609-74d6-4823-ab5f-6c09bcfb24ef","block_type":"box","text":"(“SZSE”) and the Beijing Stock Exchange (“BSE”) (“A-shares”). Foreign investment in A-shares on the","page_number":142,"box":{"x":117,"y":831,"width":761,"height":12}},{"id":"e0f6cd78-ddc2-480a-aeee-e1a6ff91419a","block_type":"box","text":"SSE and SZSE is not permitted, other than pursuant to available exceptions, such as through a","page_number":142,"box":{"x":116,"y":846,"width":713,"height":13}},{"id":"aaa46d34-45a6-4aae-82dd-399ec97a69b8","block_type":"box","text":"qualified foreign investor approved pursuant to the relevant mainland China laws and regulations as","page_number":142,"box":{"x":116,"y":862,"width":745,"height":12}},{"id":"4e2def52-4718-46ff-be9b-69eb8b410a4c","block_type":"box","text":"may be promulgated and/or amended from time to time (“QFI”).","page_number":142,"box":{"x":117,"y":877,"width":474,"height":13}},{"id":"fa35987a-dade-47e1-96fe-9c5bc1227239","block_type":"box","text":"II-55","page_number":142,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"32349509-ddc9-4846-ba7c-0479ae74f03e","block_type":"box","text":"NM1026U-6030748-142/260","page_number":142,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"dbf88aa4-c42a-410e-ac11-cad8703bb33a","block_type":"box","text":"Investment in eligible exchange traded funds and A-shares listed and traded on the SSE or SZSE","page_number":143,"box":{"x":117,"y":87,"width":728,"height":12}},{"id":"ebea89f2-1d3a-4915-8f52-ff963d2ddeab","block_type":"box","text":"(“Stock Connect Securities”) is also permitted through the Shanghai-Hong Kong Stock Connect","page_number":143,"box":{"x":117,"y":102,"width":711,"height":13}},{"id":"49ed07c8-191e-4f40-94e0-850b5a99644f","block_type":"box","text":"program or the Shenzhen-Hong Kong Stock Connect program, as applicable (each, a “Stock Connect”","page_number":143,"box":{"x":117,"y":118,"width":764,"height":12}},{"id":"280751ce-90c9-48d3-8ae4-62d5f1fdeb8d","block_type":"box","text":"and collectively, “Stock Connects”). Each Stock Connect is a securities trading and clearing links","page_number":143,"box":{"x":116,"y":134,"width":722,"height":12}},{"id":"264a821f-6ea2-45e0-8ad7-86cf780c76a0","block_type":"box","text":"program established by The Stock Exchange of Hong Kong Limited (“SEHK”), the Hong Kong","page_number":143,"box":{"x":117,"y":149,"width":699,"height":12}},{"id":"7f503c3f-eb6f-40d4-9d48-961640579a54","block_type":"box","text":"Securities Clearing Company Limited (“HKSCC”), the SSE or SZSE, as applicable, and China","page_number":143,"box":{"x":116,"y":165,"width":700,"height":12}},{"id":"4323c45f-8a5b-4ec3-8265-de191609646e","block_type":"box","text":"Securities Depository and Clearing Corporation Limited (“CSDCC”) that aims to provide mutual stock","page_number":143,"box":{"x":116,"y":180,"width":753,"height":12}},{"id":"25ec6e3c-8ca9-4091-b6aa-2c779b590dc9","block_type":"box","text":"market access between the PRC and Hong Kong by permitting investors to trade and settle shares on","page_number":143,"box":{"x":117,"y":196,"width":761,"height":12}},{"id":"e79f7a88-fa7c-4478-b24c-f2fb884a20b5","block_type":"box","text":"each market through their local securities brokers. Under Stock Connects, a Fund’s trading of Stock","page_number":143,"box":{"x":116,"y":211,"width":746,"height":12}},{"id":"30642677-a4ea-431b-b185-78ef951fccba","block_type":"box","text":"Connect Securities listed on the SSE or SZSE, as applicable, would be effectuated through its Hong","page_number":143,"box":{"x":117,"y":227,"width":747,"height":12}},{"id":"6c7549ba-3df0-4573-a677-36ce44bf2df0","block_type":"box","text":"Kong broker and a securities trading service company established by SEHK.","page_number":143,"box":{"x":117,"y":242,"width":572,"height":12}},{"id":"cad937ba-a881-42e1-a058-7759fb2e7659","block_type":"box","text":"Although no individual investment quotas or licensing requirements apply to investors in Stock","page_number":143,"box":{"x":116,"y":273,"width":703,"height":12}},{"id":"689e56d9-a351-4c9e-b69d-a029c2373166","block_type":"box","text":"Connect, trading through a Stock Connect’s Northbound Trading Link is subject to daily investment","page_number":143,"box":{"x":117,"y":289,"width":738,"height":12}},{"id":"f217b216-4e66-43d4-9cdd-d1c8830c59dd","block_type":"box","text":"quota limitations which require that buy orders for Stock Connect Securities be rejected once the daily","page_number":143,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"447769fc-0e9e-488b-824f-afb0597f3d15","block_type":"box","text":"quota is exceeded (although a Fund will be permitted to sell their Stock Connect Securities regardless","page_number":143,"box":{"x":116,"y":320,"width":761,"height":12}},{"id":"1b43e08b-2679-4b38-a1e7-6a9e3fd61954","block_type":"box","text":"of the quota). These limitations may restrict a Fund from investing in Stock Connect Securities on a","page_number":143,"box":{"x":116,"y":335,"width":741,"height":12}},{"id":"21cca6dd-07b6-41c3-9189-e8959e6c27e5","block_type":"box","text":"timely basis, which could affect the Fund’s ability to effectively pursue its investment strategy.","page_number":143,"box":{"x":116,"y":351,"width":698,"height":12}},{"id":"9784f0f5-4f5f-433a-a490-f2743505d47d","block_type":"box","text":"Investment quotas are also subject to change. Investment in Stock Connect Securities through a Stock","page_number":143,"box":{"x":117,"y":366,"width":767,"height":12}},{"id":"72738ac6-b8f8-4c95-a61f-b47287c3c544","block_type":"box","text":"Connect is subject to trading, clearance and settlement procedures that could pose risks to a Fund.","page_number":143,"box":{"x":117,"y":382,"width":741,"height":12}},{"id":"2e67bab6-edcf-407a-8711-c6b6fa17a8d7","block_type":"box","text":"Stock Connect Securities purchased through Stock Connects generally may not be sold or otherwise","page_number":143,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"d9ba0a88-46d8-480e-97e8-99fd317375db","block_type":"box","text":"transferred other than through Stock Connects in accordance with applicable rules. For example, the","page_number":143,"box":{"x":116,"y":413,"width":752,"height":12}},{"id":"cc41dabf-40b3-4a24-8d3a-ec74587297bd","block_type":"box","text":"PRC regulations require that in order for an investor to sell any Stock Connect Securities on a certain","page_number":143,"box":{"x":117,"y":428,"width":755,"height":12}},{"id":"fdcf0f2f-0b7f-42ed-9be8-a94004152afc","block_type":"box","text":"trading day, there must be sufficient Stock Connect Securities in the investor’s account before the","page_number":143,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"1588122b-8d6b-4732-8fe0-f5d4f96b9428","block_type":"box","text":"market opens on that day. If there are insufficient Stock Connect Securities in the investor’s account,","page_number":143,"box":{"x":117,"y":459,"width":751,"height":12}},{"id":"e5c4d6ca-8552-4e60-a954-3f824633b103","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":143,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"d857fc5a-4393-48a0-ac0c-6070438545de","block_type":"box","text":"on sell orders of certain stocks listed on the SSE market (“SSE Securities”) or SZSE market (“SZSE","page_number":143,"box":{"x":116,"y":490,"width":746,"height":12}},{"id":"d47795a0-ee86-47ce-ad12-edf8a9ca1b87","block_type":"box","text":"Securities”) of its participants (","page_number":143,"box":{"x":116,"y":506,"width":226,"height":12}},{"id":"f8e5aa54-f935-4555-b843-05b82fb48998","block_type":"box","text":"i.e.","page_number":143,"box":{"x":343,"y":506,"width":20,"height":9}},{"id":"f5d8bf58-2de1-4008-b954-9baafcbcea1d","block_type":"box","text":", stock brokers) to ensure that this requirement is satisfied. While","page_number":143,"box":{"x":366,"y":506,"width":486,"height":12}},{"id":"905e5036-8a0e-4978-938a-6bf22a3537e7","block_type":"box","text":"shares must be designated as eligible to be traded under a Stock Connect, those shares may also lose","page_number":143,"box":{"x":116,"y":521,"width":770,"height":12}},{"id":"befbd9bf-fc0c-40c7-b049-a58ab9100053","block_type":"box","text":"such designation, and if this occurs, such shares may be sold but cannot be purchased through a","page_number":143,"box":{"x":116,"y":537,"width":728,"height":12}},{"id":"f5446352-0606-4ed2-8e33-25cd16d23140","block_type":"box","text":"Stock Connect. In addition, Stock Connects will only operate on days when both the Chinese and Hong","page_number":143,"box":{"x":116,"y":552,"width":771,"height":12}},{"id":"597bafa7-eb6a-42ba-9c13-8cd49ada228c","block_type":"box","text":"Kong markets are open for trading, and banking services are available in both markets on the","page_number":143,"box":{"x":117,"y":568,"width":698,"height":12}},{"id":"2ddddde7-9115-4e5f-9b68-8561f2326930","block_type":"box","text":"corresponding settlement days. Therefore, an investment in Stock Connect Securities through a Stock","page_number":143,"box":{"x":116,"y":583,"width":763,"height":12}},{"id":"1e8df8aa-c478-4c82-85a3-be0f0e4253b3","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":143,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"785cff21-d6ed-4c8b-bb22-369766fb3b0d","block_type":"box","text":"but a Stock Connect is not trading. Moreover, day (turnaround) trading is not permitted on the Stock","page_number":143,"box":{"x":117,"y":614,"width":745,"height":12}},{"id":"7916cec2-805e-4cbc-aec7-9f1a16c35413","block_type":"box","text":"Connect Securities market. If an investor buys Stock Connect Securities on day “T,” the investor will","page_number":143,"box":{"x":117,"y":630,"width":746,"height":12}},{"id":"6d40f112-28fe-4391-b214-982f513d2c42","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":143,"box":{"x":116,"y":645,"width":763,"height":12}},{"id":"081b7337-9771-4a45-b55e-670774867d36","block_type":"box","text":"Connect Securities must be settled in RMB, investors must have timely access to a reliable supply of","page_number":143,"box":{"x":117,"y":661,"width":748,"height":12}},{"id":"a5ffeb30-01e7-4e5e-afdf-18933f0f10e3","block_type":"box","text":"offshore RMB, which cannot be guaranteed. There is also no assurance that RMB will not be subject to","page_number":143,"box":{"x":116,"y":676,"width":765,"height":12}},{"id":"1e5a8b2f-0c78-4636-8b7c-f19c9702f7ea","block_type":"box","text":"devaluation. Any devaluation of RMB could adversely affect a Fund’s investments. If a Fund holds a","page_number":143,"box":{"x":116,"y":692,"width":741,"height":12}},{"id":"56cc5982-d77c-4ae1-86ae-14bb0005e8e9","block_type":"box","text":"class of shares denominated in a local currency other than RMB, the Fund will be exposed to currency","page_number":143,"box":{"x":116,"y":707,"width":760,"height":12}},{"id":"ae3173e1-c7ea-4bee-8292-f50554c4bfe3","block_type":"box","text":"exchange risk if the Fund converts the local currency into RMB for investments in Stock Connect","page_number":143,"box":{"x":116,"y":723,"width":717,"height":12}},{"id":"5c5eb05b-6d12-47b7-a0f7-84044ba8087d","block_type":"box","text":"Securities. A Fund may also incur conversion costs.","page_number":143,"box":{"x":116,"y":738,"width":384,"height":12}},{"id":"2d69faa3-2ed3-45f3-a44b-c3ecc3299fdb","block_type":"box","text":"Stock Connect Securities held through the nominee structure under a Stock Connect will be held","page_number":143,"box":{"x":116,"y":769,"width":716,"height":12}},{"id":"5d822d8c-9581-49c7-be14-1ef4fca14d5d","block_type":"box","text":"through HKSCC as nominee on behalf of investors. The precise nature and rights of a Fund as the","page_number":143,"box":{"x":116,"y":785,"width":731,"height":12}},{"id":"ddc4d94d-c1b2-45be-a8de-a7f754db97c2","block_type":"box","text":"beneficial owner of the SSE Securities or SZSE Securities through HKSCC as nominee is not well","page_number":143,"box":{"x":117,"y":800,"width":725,"height":12}},{"id":"fce92bd4-804a-4acf-aac0-503afc64e292","block_type":"box","text":"defined under the PRC laws. There is a lack of a clear definition of, and distinction between, legal","page_number":143,"box":{"x":116,"y":816,"width":722,"height":12}},{"id":"3f97f2b3-b9f9-44c6-a258-6edc282ebd9c","block_type":"box","text":"ownership and beneficial ownership under the PRC laws and there have been few cases involving a","page_number":143,"box":{"x":116,"y":831,"width":748,"height":12}},{"id":"0efe1abd-3c13-4935-b30b-0a18044574bf","block_type":"box","text":"nominee account structure in the PRC courts. The exact nature and methods of enforcement of the","page_number":143,"box":{"x":117,"y":847,"width":740,"height":9}},{"id":"aaa32037-7c3d-4dab-a99b-3bdbe00dbb59","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":143,"box":{"x":117,"y":862,"width":757,"height":12}},{"id":"26338e5d-6f94-46be-9530-10b895e523a4","block_type":"box","text":"becomes subject to winding up proceedings in Hong Kong, there is a risk that the SSE Securities or","page_number":143,"box":{"x":117,"y":878,"width":743,"height":12}},{"id":"f2ea6d89-a360-49a9-8a5c-dddfbde9dd93","block_type":"box","text":"II-56","page_number":143,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dca70a32-2b30-4f0a-a5cc-e753dece4dea","block_type":"box","text":"NM1026U-6030748-143/260","page_number":143,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"670c52ad-0842-4d37-833c-884dbd262e75","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":144,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"28ba173a-afd6-447e-80b3-a9652a8f05cf","block_type":"box","text":"general assets of HKSCC available for general distribution to its creditors. Notwithstanding the fact that","page_number":144,"box":{"x":116,"y":102,"width":770,"height":13}},{"id":"268185b3-776e-4128-8893-89122371dae8","block_type":"box","text":"HKSCC does not claim proprietary interests in the SSE Securities or SZSE Securities held in its","page_number":144,"box":{"x":117,"y":118,"width":714,"height":12}},{"id":"957adba2-8600-4540-9e4d-d75c5ccb14d7","block_type":"box","text":"omnibus stock account in the CSDCC, the CSDCC as the share registrar for SSE- or SZSE-listed","page_number":144,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"7281af00-74bf-456f-90e0-7915ce7ea28b","block_type":"box","text":"companies will still treat HKSCC as one of the shareholders when it handles corporate actions in","page_number":144,"box":{"x":116,"y":149,"width":722,"height":12}},{"id":"8806323e-2bc2-4662-99ce-a77ffe08c6f7","block_type":"box","text":"respect of such SSE Securities or SZSE Securities. HKSCC monitors the corporate actions affecting","page_number":144,"box":{"x":117,"y":165,"width":749,"height":12}},{"id":"95f9d32f-ff91-4500-97e0-c4b1eb4ac965","block_type":"box","text":"SSE Securities and SZSE Securities and keeps participants of Central Clearing and Settlement","page_number":144,"box":{"x":116,"y":180,"width":712,"height":12}},{"id":"e4c9f119-a369-45e1-8680-e54809bfbff9","block_type":"box","text":"System (“CCASS”) informed of all such corporate actions that require CCASS participants to take","page_number":144,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"34086355-0ffb-472d-a722-1a169c858062","block_type":"box","text":"steps in order to participate in them. Investors may only exercise their voting rights by providing their","page_number":144,"box":{"x":116,"y":211,"width":750,"height":12}},{"id":"9948ab5f-e84f-4daa-a5f4-889ec3ec271b","block_type":"box","text":"voting instructions to HKSCC through participants of CCASS. All voting instructions from CCASS","page_number":144,"box":{"x":116,"y":227,"width":724,"height":12}},{"id":"0a6fc8da-dde4-4e21-9291-647ef2e117bb","block_type":"box","text":"participants will be consolidated by HKSCC, who will then submit a combined single voting instruction","page_number":144,"box":{"x":117,"y":242,"width":757,"height":12}},{"id":"c3b2c565-bf17-4e22-b467-b904e4fab15f","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":144,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"362ac3b8-0e1d-4834-9422-10a0748e88cc","block_type":"box","text":"enforcing its rights in SSE Securities or SZSE Securities.","page_number":144,"box":{"x":116,"y":273,"width":427,"height":12}},{"id":"f6225684-5835-4fee-91f1-dc9184a27d0f","block_type":"box","text":"Hong Kong’s Investor Compensation Fund is established to pay compensation to investors of any","page_number":144,"box":{"x":117,"y":304,"width":728,"height":12}},{"id":"32bc13ff-6945-4ceb-8176-b9dc6ba61ed3","block_type":"box","text":"nationality who suffer pecuniary losses as a result of default of a licensed intermediary or authorized","page_number":144,"box":{"x":117,"y":320,"width":747,"height":12}},{"id":"1defc95b-2d91-44ae-8161-45f65ab81cc8","block_type":"box","text":"financial institution in relation to exchange-traded products in Hong Kong. For defaults occurring on or","page_number":144,"box":{"x":116,"y":335,"width":760,"height":12}},{"id":"9ef4a805-9179-4e8c-957e-e8e62c32894e","block_type":"box","text":"after January 1, 2020, Hong Kong’s Investor Compensation Fund covers investors’ losses in relation to","page_number":144,"box":{"x":116,"y":351,"width":769,"height":12}},{"id":"0c16db42-926b-40ac-83df-dec6c9c01e1d","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":144,"box":{"x":116,"y":366,"width":743,"height":12}},{"id":"0dd59907-ddfc-4870-a5dd-2a0e495846da","block_type":"box","text":"purchase is permitted to be routed through the Northbound Trading Link of a Stock Connect. On the","page_number":144,"box":{"x":117,"y":382,"width":746,"height":12}},{"id":"a2f22030-3226-4008-a33e-5ad2c735006a","block_type":"box","text":"other hand, since a Fund carries out Northbound trading through securities brokers in Hong Kong but","page_number":144,"box":{"x":116,"y":397,"width":756,"height":12}},{"id":"edf62dd1-6e37-4597-90b9-710a174fd942","block_type":"box","text":"not PRC brokers, it is not protected by the China Securities Investor Protection Fund in the PRC.","page_number":144,"box":{"x":117,"y":413,"width":722,"height":12}},{"id":"c04cbb3a-47be-418b-bf83-8a6791b8d838","block_type":"box","text":"Market participants are able to participate in Stock Connects subject to meeting certain information","page_number":144,"box":{"x":117,"y":444,"width":737,"height":12}},{"id":"3ea1de98-45e2-400c-b470-10ea1de8151b","block_type":"box","text":"technology capability, risk management and other requirements as may be specified by the relevant","page_number":144,"box":{"x":116,"y":459,"width":746,"height":12}},{"id":"e16ad451-47d1-4836-8a8c-f7354f89f7dd","block_type":"box","text":"exchange and/or clearing house. Further, the “connectivity” in Stock Connects requires routing of","page_number":144,"box":{"x":116,"y":475,"width":725,"height":12}},{"id":"efd6257b-19d6-4891-837e-4602f5c188de","block_type":"box","text":"orders across the border of Hong Kong and the PRC. This requires the development of new","page_number":144,"box":{"x":116,"y":490,"width":687,"height":12}},{"id":"0e7b8875-d00e-4618-87bd-2c49e9cbd1ff","block_type":"box","text":"information technology systems on the part of SEHK and exchange participants. There is no assurance","page_number":144,"box":{"x":117,"y":506,"width":771,"height":12}},{"id":"b87de358-a84c-4330-b06d-1c791df8be35","block_type":"box","text":"that the systems of SEHK and market participants will function properly or will continue to be adapted","page_number":144,"box":{"x":116,"y":521,"width":757,"height":12}},{"id":"069cf7f5-3734-4098-967d-a5fef7d11181","block_type":"box","text":"to changes and developments in both markets. In the event that the relevant systems fail to function","page_number":144,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"ed5f57ab-c458-40ed-8d9f-21650bb7d307","block_type":"box","text":"properly, trading in Stock Connect Securities through Stock Connects could be disrupted.","page_number":144,"box":{"x":117,"y":552,"width":667,"height":12}},{"id":"507d45f2-1a35-4ad5-b3c4-3dc883ddefb1","block_type":"box","text":"The Shanghai-Hong Kong Stock Connect program launched in November 2014 and the Shenzhen","page_number":144,"box":{"x":116,"y":583,"width":737,"height":12}},{"id":"c156ee65-04b9-4fe8-a29f-cd53b3a4d352","block_type":"box","text":"Hong Kong Stock Connect program launched in December 2016. Each program does not have an","page_number":144,"box":{"x":117,"y":599,"width":733,"height":12}},{"id":"02e95384-1f65-467f-b90a-8a8871db0a76","block_type":"box","text":"extensive operating history. New or revised regulations may be issued from time to time by the","page_number":144,"box":{"x":116,"y":614,"width":707,"height":12}},{"id":"9bd47d58-cbfb-4dd5-9246-6a93e3eb9657","block_type":"box","text":"regulators and stock exchanges in China and Hong Kong in connection with operations, legal","page_number":144,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"2e8cd583-01ea-40be-8cc4-f84f3a8e0e8a","block_type":"box","text":"enforcement and cross-border trades under Stock Connects. In addition, there can be no assurance","page_number":144,"box":{"x":116,"y":645,"width":748,"height":11}},{"id":"a8426ab8-3ce1-4293-9401-6a9097514597","block_type":"box","text":"that Stock Connect will not be discontinued. A Fund may be adversely affected as a result of such","page_number":144,"box":{"x":116,"y":661,"width":726,"height":12}},{"id":"1fe4259b-92be-4d21-bd62-7035be3d019d","block_type":"box","text":"changes. Furthermore, the securities regimes and legal systems of China and Hong Kong differ","page_number":144,"box":{"x":116,"y":676,"width":709,"height":12}},{"id":"0589f239-2baa-4f87-84a8-36effd1c8027","block_type":"box","text":"significantly and issues may arise from the differences on an on-going basis. In the event that the","page_number":144,"box":{"x":116,"y":692,"width":722,"height":12}},{"id":"b37efffd-e2a2-461f-b375-ec405762a2ca","block_type":"box","text":"relevant systems fail to function properly, trading in both markets through Stock Connects could be","page_number":144,"box":{"x":117,"y":707,"width":732,"height":12}},{"id":"3fe2f666-8472-4970-9703-d29fcb2e62d6","block_type":"box","text":"disrupted and a Fund’s ability to achieve its investment objective may be adversely affected. In","page_number":144,"box":{"x":116,"y":723,"width":702,"height":12}},{"id":"aedac5ef-0b82-48d1-abe3-a1cf0a96185c","block_type":"box","text":"addition, a Fund’s investments in Stock Connect Securities through Stock Connects are generally","page_number":144,"box":{"x":116,"y":738,"width":724,"height":12}},{"id":"3b8af741-ffb7-495f-8c7b-89f7b5a4c252","block_type":"box","text":"subject to Chinese securities regulations and listing rules, among other restrictions. Further, different","page_number":144,"box":{"x":116,"y":754,"width":746,"height":12}},{"id":"8e793b97-31e2-4983-bf7d-4489bee94411","block_type":"box","text":"fees, costs and taxes are imposed on foreign investors acquiring Stock Connect Securities through","page_number":144,"box":{"x":116,"y":769,"width":733,"height":12}},{"id":"21136bce-3060-459a-b6ee-0ef8e06ccb5e","block_type":"box","text":"Stock Connects, and these fees, costs and taxes may be higher than comparable fees, costs and","page_number":144,"box":{"x":116,"y":785,"width":722,"height":12}},{"id":"cb7a5843-9386-4e79-a0c6-456fe566f3c9","block_type":"box","text":"taxes imposed on owners of other securities providing similar investment exposure.","page_number":144,"box":{"x":116,"y":800,"width":618,"height":12}},{"id":"77b1bbde-101f-4be2-a4ff-d9ba99daf452","block_type":"box","text":"Suspension Risk.","page_number":144,"box":{"x":117,"y":831,"width":127,"height":12}},{"id":"87605b0e-cffc-4644-9e09-053a238855e8","block_type":"box","text":"SSE Securities and SZSE Securities may only be bought from, or sold to, a Fund at","page_number":144,"box":{"x":246,"y":831,"width":630,"height":12}},{"id":"3af7245e-223a-493e-a0a1-245b51a774f5","block_type":"box","text":"times when the relevant SSE Securities and SZSE Securities may be sold or purchased on the","page_number":144,"box":{"x":116,"y":847,"width":709,"height":12}},{"id":"facc071a-1746-4a53-9515-c71bd036ba4f","block_type":"box","text":"relevant Chinese stock exchange. The SSE Securities and SZSE Securities markets have a higher","page_number":144,"box":{"x":117,"y":862,"width":738,"height":12}},{"id":"c4e49ff0-27cf-4ef1-8e35-6f8c35890583","block_type":"box","text":"propensity for trading suspensions than many other global equity markets. Each of the SEHK, SSE and","page_number":144,"box":{"x":117,"y":878,"width":771,"height":12}},{"id":"2a4c5934-0812-40e0-a638-3ec0098b0f76","block_type":"box","text":"II-57","page_number":144,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"5fd9bedf-2201-4c24-9e6b-498b42026cf5","block_type":"box","text":"NM1026U-6030748-144/260","page_number":144,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bbba4833-1830-446a-9a71-65021db76e39","block_type":"box","text":"SZSE reserves the right to suspend trading of SSE Securities and SZSE Securities purchased on the","page_number":145,"box":{"x":116,"y":87,"width":756,"height":12}},{"id":"4e9f05b7-2adf-44c0-acf3-a516b95e2c01","block_type":"box","text":"Stock Connects if necessary for ensuring an orderly and fair market and ensuring that risks are","page_number":145,"box":{"x":116,"y":102,"width":710,"height":13}},{"id":"0233e3b4-2c09-4a6a-97eb-0d0d6f3c7068","block_type":"box","text":"managed prudently. Consent from the relevant regulator would be sought before a suspension of","page_number":145,"box":{"x":117,"y":118,"width":724,"height":12}},{"id":"84717003-31d5-4109-bd96-d156451b73c6","block_type":"box","text":"Northbound trading is triggered. The relevant PRC government authority may also impose “circuit","page_number":145,"box":{"x":117,"y":134,"width":727,"height":12}},{"id":"0d53ee8b-d2e0-4ae7-b568-d6baaa3e2aec","block_type":"box","text":"breakers” and other measures to halt or suspend Northbound trading. Where a suspension in the","page_number":145,"box":{"x":117,"y":149,"width":725,"height":12}},{"id":"9606f6d6-d453-4d5d-906e-37bcc90b8137","block_type":"box","text":"Northbound trading through Stock Connect is effected, the Fund’s ability to access the PRC market will","page_number":145,"box":{"x":117,"y":165,"width":769,"height":12}},{"id":"8bfe2e85-acf7-46cb-aab8-5c95db891a5d","block_type":"box","text":"be adversely affected. Trading suspensions in certain stocks could lead to greater market execution","page_number":145,"box":{"x":117,"y":180,"width":745,"height":12}},{"id":"77ea0aa3-aaef-473b-bbaa-2306fa34d6f5","block_type":"box","text":"risk and costs for a Fund. The SSE and SZSE currently","page_number":145,"box":{"x":117,"y":196,"width":415,"height":12}},{"id":"d35bb40b-f310-4214-9655-9e3f08d33e47","block_type":"box","text":"apply a daily price limit, generally set at 10%,","page_number":145,"box":{"x":533,"y":196,"width":340,"height":12}},{"id":"97543da7-726e-4a06-a228-5483b59e3c42","block_type":"box","text":"of the amount of fluctuation permitted in the prices of the relevant SSE Securities and SZSE Securities","page_number":145,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"8d292ebd-742a-4295-a4c2-b90a62d9761c","block_type":"box","text":"during a single trading day. The daily price limit refers to price movements only and does not restrict","page_number":145,"box":{"x":116,"y":227,"width":747,"height":12}},{"id":"9b0d663b-16a3-4928-a647-52051e8e495f","block_type":"box","text":"trading within the relevant limit. There can be no assurance that a liquid market on an exchange will","page_number":145,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"c2f31455-0557-419d-9a3f-6c0d36f0c2cb","block_type":"box","text":"exist for any particular SSE Security or SZSE Security or for any particular time.","page_number":145,"box":{"x":116,"y":258,"width":598,"height":12}},{"id":"e9ed04ec-9b78-45d8-802a-46f62b8d0dc9","block_type":"box","text":"Risk of Investing in the China Interbank Bond Market through Bond Connect.","page_number":145,"box":{"x":116,"y":289,"width":575,"height":12}},{"id":"69d54f07-7d52-430f-a5e6-20162b5c11cd","block_type":"box","text":"A Fund may invest","page_number":145,"box":{"x":691,"y":289,"width":144,"height":12}},{"id":"7c657589-dad5-4265-aeb0-9a5f1180394d","block_type":"box","text":"directly in the domestic bond market in the PRC (the “China Interbank Bond Market”) through the","page_number":145,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"7e8618ba-4abc-49bd-b376-e98e2e2fb727","block_type":"box","text":"northbound trading of Bond Connect (“Bond Connect”). Bond Connect is an initiative launched in July","page_number":145,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"e9ab5e7a-a073-4026-b366-27633a0c9d9d","block_type":"box","text":"2017 for mutual bond market access between the PRC and Hong Kong, established by the China","page_number":145,"box":{"x":116,"y":335,"width":729,"height":12}},{"id":"31dbf944-7bdd-4ae1-a737-ab109ca671c7","block_type":"box","text":"Foreign Exchange Trade System & National Interbank Funding Centre (“CFETS”), China Central","page_number":145,"box":{"x":117,"y":351,"width":722,"height":12}},{"id":"311667f3-3c81-482c-8da7-886f9d8e8381","block_type":"box","text":"Depository & Clearing Co., Ltd (“CDCC”), Shanghai Clearing House (“SCH”), Hong Kong Exchanges","page_number":145,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"398ad81c-3389-4f85-88bf-abaefb7c9212","block_type":"box","text":"and Clearing Limited (“HKEX”) and Central Moneymarkets Unit (“CMU”). Under the prevailing","page_number":145,"box":{"x":116,"y":382,"width":699,"height":12}},{"id":"3b4889c1-b054-44a3-90a0-3ca2820b4360","block_type":"box","text":"regulations in the PRC, eligible foreign investors are allowed to invest in the bonds circulated in the","page_number":145,"box":{"x":117,"y":397,"width":738,"height":12}},{"id":"3b960a94-e60d-4c9a-9319-3b138145255c","block_type":"box","text":"China Interbank Bond Market through Bond Connect. Eligible foreign investors may submit trade","page_number":145,"box":{"x":117,"y":413,"width":721,"height":12}},{"id":"26cefdb6-8301-4e2b-a07c-40f46671e967","block_type":"box","text":"requests for bonds circulated in the China Interbank Bond Market through offshore electronic bond","page_number":145,"box":{"x":117,"y":428,"width":735,"height":12}},{"id":"0fde6c87-eafc-4597-a4ea-a72102051c7f","block_type":"box","text":"trading platforms (such as Tradeweb), which will in turn transmit their requests for quotation to CFETS.","page_number":145,"box":{"x":116,"y":444,"width":768,"height":12}},{"id":"38a9ba96-9688-4c90-98d6-07d2c33ec1b1","block_type":"box","text":"CFETS will send the requests for quotation to a number of approved onshore dealers (including market","page_number":145,"box":{"x":117,"y":459,"width":770,"height":12}},{"id":"4ac9dc2b-06b4-4258-9f9f-0ce08dd9811b","block_type":"box","text":"makers and others engaged in the market making business) in the PRC. The approved onshore","page_number":145,"box":{"x":117,"y":475,"width":715,"height":12}},{"id":"a9eca078-48b0-4b7c-a832-f11908a7de4a","block_type":"box","text":"dealer(s) will respond to the requests for quotation via CFETS and CFETS will send their responses to","page_number":145,"box":{"x":116,"y":490,"width":765,"height":12}},{"id":"1f48ece4-433f-49ea-a16e-bd2cc37c7d5a","block_type":"box","text":"those eligible foreign investors through the same offshore electronic bond trading platforms. Once the","page_number":145,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"b30adac5-77fa-43a7-8c6a-5bf9385fcecb","block_type":"box","text":"eligible foreign investor accepts the quotation, the trade is concluded on CFETS.","page_number":145,"box":{"x":116,"y":521,"width":603,"height":12}},{"id":"3896a76c-d154-417d-a01b-a624df9abc44","block_type":"box","text":"The settlement and custody of bonds traded in the China Interbank Bond Market under Bond Connect","page_number":145,"box":{"x":116,"y":552,"width":761,"height":12}},{"id":"4e848414-44d1-459c-bcec-f18c7b50b092","block_type":"box","text":"will be effected through the settlement and custody link between CMU, as an offshore custody agent,","page_number":145,"box":{"x":116,"y":568,"width":755,"height":12}},{"id":"addf9635-71ca-4ec7-8a8f-94a2c3e8c355","block_type":"box","text":"and CDCC and SCH, as onshore custodians and clearing institutions in the PRC. Under the settlement","page_number":145,"box":{"x":116,"y":583,"width":768,"height":12}},{"id":"0442c501-5a27-4a4b-8fd9-67931ac87305","block_type":"box","text":"link, CDCC or SCH will effect gross settlement of confirmed trades onshore and CMU will process","page_number":145,"box":{"x":117,"y":599,"width":730,"height":12}},{"id":"defe616c-4090-4b97-824e-ef59bd3b5570","block_type":"box","text":"bond settlement instructions from CMU members on behalf of eligible foreign investors in accordance","page_number":145,"box":{"x":117,"y":614,"width":757,"height":12}},{"id":"7aa1c42e-c4aa-481d-9e89-582f1e5cbae3","block_type":"box","text":"with its relevant rules. Since the introduction in August 2018 of delivery versus payment (DVP)","page_number":145,"box":{"x":116,"y":630,"width":705,"height":12}},{"id":"136f2b4a-93a8-4f35-b990-e58e68aea040","block_type":"box","text":"settlement in respect of Bond Connect, the movement of cash and securities is carried out","page_number":145,"box":{"x":116,"y":645,"width":675,"height":12}},{"id":"02fb3c96-6ce4-4f03-869c-7b5cd1bd935d","block_type":"box","text":"simultaneously on a real-time basis. Pursuant to the prevailing regulations in the PRC, CMU, as the","page_number":145,"box":{"x":116,"y":661,"width":738,"height":12}},{"id":"9ad6b4d1-5d9c-4fcb-9230-45c94d0015d1","block_type":"box","text":"offshore custody agent recognized by the Hong Kong Monetary Authority, will open omnibus nominee","page_number":145,"box":{"x":116,"y":676,"width":754,"height":12}},{"id":"ad00a8ee-544c-401f-9469-8d52a71efa3f","block_type":"box","text":"accounts with the onshore custody agent recognized by the People’s Bank of China (","page_number":145,"box":{"x":116,"y":692,"width":631,"height":12}},{"id":"31baae22-1f32-42e1-a50e-4185f5a62c08","block_type":"box","text":"i.e.","page_number":145,"box":{"x":749,"y":692,"width":20,"height":9}},{"id":"12e25a30-9fe7-4097-b2f7-42736de1316b","block_type":"box","text":", CDCC and","page_number":145,"box":{"x":772,"y":692,"width":88,"height":11}},{"id":"9b65e36d-a9c6-4dc0-8ec4-bcc5a307e2f8","block_type":"box","text":"SCH). All bonds traded by eligible foreign investors through Bond Connect will be registered in the","page_number":145,"box":{"x":116,"y":707,"width":729,"height":12}},{"id":"97bff2bd-3ba6-4b35-aac3-a91678f6fbd5","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":145,"box":{"x":117,"y":723,"width":748,"height":12}},{"id":"4346fa89-f911-48c1-9d25-53c43b226395","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":145,"box":{"x":116,"y":738,"width":754,"height":12}},{"id":"1ecf4bc7-e503-470b-8218-1e43d070429c","block_type":"box","text":"Bond Connect bonds under its market contracts with clearing participants will be limited to assisting","page_number":145,"box":{"x":117,"y":754,"width":736,"height":12}},{"id":"9fca1d66-6a5c-4925-bd7b-88f43cdfc4f0","block_type":"box","text":"clearing participants in pursuing their claims against CDCC or SCH. The Fund may suffer delay in the","page_number":145,"box":{"x":116,"y":769,"width":753,"height":12}},{"id":"93c4379b-c505-4de6-8448-bf385688256e","block_type":"box","text":"recovery process or may not fully recover its losses from CDCC or SCH. In addition, as the relevant","page_number":145,"box":{"x":117,"y":785,"width":739,"height":12}},{"id":"285b5506-c640-4389-adda-90f01518f90a","block_type":"box","text":"filings, registration with the People’s Bank of China, and account opening have to be carried out by","page_number":145,"box":{"x":116,"y":800,"width":733,"height":12}},{"id":"7d90e72a-8a7a-4a35-a22b-d5f9458e3786","block_type":"box","text":"third parties, including CMU, CDCC, SCH, and CFETS, a Fund is subject to the risks of default or","page_number":145,"box":{"x":116,"y":816,"width":723,"height":12}},{"id":"20e1c856-a5ce-45bd-9a1a-f5cc463ec6f8","block_type":"box","text":"errors on the part of such third parties.","page_number":145,"box":{"x":116,"y":831,"width":290,"height":12}},{"id":"520192d2-a0b5-44fc-ba1e-fdd816cfc70b","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":145,"box":{"x":116,"y":862,"width":720,"height":12}},{"id":"13d6f83c-5f8f-4e92-a963-dc914a9ec92a","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":145,"box":{"x":117,"y":878,"width":765,"height":12}},{"id":"bab09103-ddd4-46df-a22b-156acdb108f1","block_type":"box","text":"II-58","page_number":145,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"a6c83a33-2651-4467-a3e2-ac8440131a9d","block_type":"box","text":"NM1026U-6030748-145/260","page_number":145,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"494c4851-e049-4dae-a806-35c6ff19dabd","block_type":"box","text":"a clear definition of, and distinction between, legal ownership and beneficial ownership under PRC law","page_number":146,"box":{"x":116,"y":87,"width":765,"height":12}},{"id":"41c433f8-85d3-43ef-8c2f-0c6edc8fd232","block_type":"box","text":"and there have been few cases involving a nominee account structure in the PRC courts. The exact","page_number":146,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"e846c178-ab8e-4021-8326-745555251979","block_type":"box","text":"nature and methods of enforcement of the rights and interests of a Fund under PRC law are also","page_number":146,"box":{"x":117,"y":118,"width":722,"height":12}},{"id":"a6bc6c06-3793-43a5-b7e7-9797571da83f","block_type":"box","text":"uncertain.","page_number":146,"box":{"x":117,"y":134,"width":77,"height":9}},{"id":"e288061c-1f98-4133-9cc2-d556fdf44b33","block_type":"box","text":"Market volatility and potential lack of liquidity due to low trading volume of certain bonds in the China","page_number":146,"box":{"x":117,"y":165,"width":750,"height":13}},{"id":"e1e0d2f2-55d5-498d-92c0-88cc928dd619","block_type":"box","text":"Interbank Bond Market may result in prices of certain bonds traded on such market fluctuating","page_number":146,"box":{"x":117,"y":181,"width":702,"height":12}},{"id":"692039d1-d6ce-4ede-8937-8dd1f01c5ca5","block_type":"box","text":"significantly. A Fund investing in such market is therefore subject to liquidity and volatility risks. The","page_number":146,"box":{"x":116,"y":196,"width":742,"height":13}},{"id":"31b9c4fc-4307-4d47-bc7f-a04814cf36eb","block_type":"box","text":"bid-ask spreads of the prices of such securities may be large, and a Fund may therefore incur","page_number":146,"box":{"x":117,"y":212,"width":700,"height":12}},{"id":"93fd3dd6-bb37-4f2c-a3c7-327780673826","block_type":"box","text":"significant costs and may suffer losses when selling such investments. The bonds traded in the China","page_number":146,"box":{"x":116,"y":227,"width":759,"height":13}},{"id":"cedc06d4-19ee-4e68-a6de-d55a44bd0bc5","block_type":"box","text":"Interbank Bond Market may be difficult or impossible to sell, which may impact a Fund’s ability to","page_number":146,"box":{"x":117,"y":243,"width":722,"height":12}},{"id":"cc266d5e-955e-46b1-a125-b03de92d2977","block_type":"box","text":"acquire or dispose of such securities at their expected prices.","page_number":146,"box":{"x":116,"y":259,"width":460,"height":11}},{"id":"03a3b913-12a6-4beb-9e9b-daa876bf9280","block_type":"box","text":"Investing in the China Interbank Bond Market through Bond Connect is also subject to regulatory risks.","page_number":146,"box":{"x":117,"y":290,"width":766,"height":13}},{"id":"79ab416c-9b41-4b91-93fc-760ca6e82789","block_type":"box","text":"The relevant rules and regulations are subject to change, which may have potential retrospective","page_number":146,"box":{"x":116,"y":306,"width":724,"height":12}},{"id":"c483a17f-310d-4806-a579-1c08a769fbf8","block_type":"box","text":"effect, and there can be no assurance that Bond Connect will not be discontinued or abolished.","page_number":146,"box":{"x":116,"y":321,"width":711,"height":12}},{"id":"c17e5465-c1de-4d52-a449-ccd4e2be7022","block_type":"box","text":"Furthermore, the securities regimes and legal systems of China and Hong Kong differ significantly and","page_number":146,"box":{"x":117,"y":337,"width":764,"height":12}},{"id":"9e8e086d-1694-4de6-88d1-cf3cb2ae35b9","block_type":"box","text":"issues may arise based on these differences. In the event that the relevant authorities suspend","page_number":146,"box":{"x":117,"y":352,"width":709,"height":13}},{"id":"a58eb222-a3e1-4ae1-8a21-c4ff1304412a","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":146,"box":{"x":116,"y":368,"width":762,"height":12}},{"id":"345d3bbf-7d8d-4402-858a-aa14a57b93dd","block_type":"box","text":"Interbank Bond Market will be adversely affected and limited. In such event, the Fund’s ability to","page_number":146,"box":{"x":117,"y":384,"width":716,"height":12}},{"id":"b223a063-ece0-4638-bcf5-ca34d383861f","block_type":"box","text":"achieve its investment objective will be negatively affected and, after exhausting other trading","page_number":146,"box":{"x":116,"y":399,"width":699,"height":12}},{"id":"bbac1711-ffa6-4736-b629-d469efe0c015","block_type":"box","text":"alternatives, the Fund may suffer substantial losses as a result. Further, if Bond Connect is not","page_number":146,"box":{"x":116,"y":415,"width":707,"height":12}},{"id":"4689065e-9bff-4ae6-bd6d-05652eadd93b","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":146,"box":{"x":116,"y":430,"width":745,"height":12}},{"id":"cd4edda1-118d-42e5-8330-6288bbd5ab19","block_type":"box","text":"manner, which could adversely affect the Fund’s performance.","page_number":146,"box":{"x":117,"y":446,"width":467,"height":12}},{"id":"927b7c6c-fdb8-465d-9e1b-4f81254ee0ce","block_type":"box","text":"Trading through Bond Connect is performed through newly developed trading platforms and","page_number":146,"box":{"x":116,"y":477,"width":687,"height":13}},{"id":"a67e2514-83fa-40b0-8afe-03c64d535f19","block_type":"box","text":"operational systems. There is no assurance that such systems will function properly or will continue to","page_number":146,"box":{"x":116,"y":493,"width":761,"height":12}},{"id":"33a66ca2-9744-4646-8a5e-22075592ef65","block_type":"box","text":"be adapted to changes and developments in the market. In the event that the relevant systems fail to","page_number":146,"box":{"x":117,"y":509,"width":753,"height":12}},{"id":"2ee27e2b-59aa-4108-93e6-c934286dea12","block_type":"box","text":"function properly, trading through Bond Connect may be disrupted. A Fund’s ability to trade through","page_number":146,"box":{"x":116,"y":524,"width":744,"height":12}},{"id":"c978e15d-5332-48ed-9066-3ad26519547c","block_type":"box","text":"Bond Connect (and hence to pursue its investment strategy) may therefore be adversely affected. In","page_number":146,"box":{"x":117,"y":540,"width":749,"height":12}},{"id":"acb1aa2f-8a8d-4e17-b140-bd24c06e3224","block_type":"box","text":"addition, where a Fund invests in the China Interbank Bond Market through Bond Connect, it may be","page_number":146,"box":{"x":116,"y":555,"width":753,"height":12}},{"id":"f5c9ceef-c32d-461c-b32f-8e6e44dc402e","block_type":"box","text":"subject to risks of delays inherent in the order placing and/or settlement systems.","page_number":146,"box":{"x":116,"y":571,"width":607,"height":12}},{"id":"8c19889d-3163-442c-8406-cd0b3c78be9c","block_type":"box","text":"Bond Connect trades are settled in Chinese currency, the RMB, which is currently restricted and not","page_number":146,"box":{"x":117,"y":602,"width":746,"height":13}},{"id":"4d038dec-1c62-4898-9a47-3e811707e2b2","block_type":"box","text":"freely convertible. As a result, a Fund will be exposed to currency risk, and it cannot be guaranteed","page_number":146,"box":{"x":116,"y":618,"width":740,"height":12}},{"id":"4b68ce5d-aefb-4033-aeea-8270266e3512","block_type":"box","text":"that investors will have timely access to a reliable supply of RMB.","page_number":146,"box":{"x":116,"y":634,"width":490,"height":12}},{"id":"489596a0-2e15-49c6-851f-c9c97c063bc9","block_type":"box","text":"Tax Risk — Withholding Income Tax Risk.","page_number":146,"box":{"x":118,"y":666,"width":310,"height":12}},{"id":"e9c066fa-cffe-48a6-8d56-6b2f5ca25ed3","block_type":"box","text":"According to PRC tax regulations, a 10% withholding income tax is imposed on PRC sourced","page_number":146,"box":{"x":116,"y":689,"width":692,"height":12}},{"id":"e06f0296-0bd5-4780-adc7-38f83ebde75c","block_type":"box","text":"dividends and interests from non-government bonds paid to a non-PRC tax resident enterprise, unless","page_number":146,"box":{"x":116,"y":705,"width":760,"height":12}},{"id":"b5da25c2-2b87-4f71-b8b1-68902d3e4d97","block_type":"box","text":"the rate is reduced under an applicable tax treaty. From a technical perspective, withholding income","page_number":146,"box":{"x":116,"y":720,"width":741,"height":12}},{"id":"818994e4-9ab5-4344-8b39-524805177dcb","block_type":"box","text":"tax is also applicable to capital gains realized by foreign investors on the disposal of PRC equity","page_number":146,"box":{"x":116,"y":736,"width":712,"height":12}},{"id":"ca09fa1d-6796-4552-9c66-ad3dca686be8","block_type":"box","text":"interests.","page_number":146,"box":{"x":117,"y":751,"width":65,"height":10}},{"id":"aaa09fc4-4930-4af7-ae1e-a179a8285900","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":146,"box":{"x":116,"y":783,"width":729,"height":12}},{"id":"a69ef201-cd72-4143-a7a1-b66bcb5cce9c","block_type":"box","text":"On November 14, 2014, the Ministry of Finance (“MoF”), China Securities Regulatory Commission and","page_number":146,"box":{"x":116,"y":815,"width":761,"height":12}},{"id":"aee9cb3d-d00e-485c-8570-c34cf5a727be","block_type":"box","text":"the State Taxation Administration (“STA”), acting with State Council’s approval, jointly released Circular","page_number":146,"box":{"x":116,"y":831,"width":771,"height":12}},{"id":"f82dacae-4475-4b06-b177-148546e28084","block_type":"box","text":"79, which temporarily exempts Qualified Foreign Institutional Investors (“QFIIs”) and Renminbi","page_number":146,"box":{"x":116,"y":846,"width":704,"height":12}},{"id":"1d9f14ef-03b7-45ec-8704-974e680d4b61","block_type":"box","text":"Qualified Foreign Institutional Investors (“RQFIIs”) from tax on capital gains derived from the trading of","page_number":146,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"5abceab9-d604-4be1-ab6b-3625571e271c","block_type":"box","text":"shares and other equity interest investments on or after November 17, 2014. Subsequently, Circulars","page_number":146,"box":{"x":116,"y":877,"width":756,"height":12}},{"id":"4b59fc80-f0a4-473d-97e8-f19cf4eaa35a","block_type":"box","text":"II-59","page_number":146,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"274d0f6a-35e3-4c2d-94ca-8c5c3c5e9c83","block_type":"box","text":"NM1026U-6030748-146/260","page_number":146,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e17ce8d8-ae29-4f01-a99f-a7ad4d28555e","block_type":"box","text":"81 and 127 were issued to temporarily exempt tax on capital gains derived from trading of equity","page_number":147,"box":{"x":116,"y":87,"width":721,"height":12}},{"id":"5625b3f6-4487-40fe-83ac-b008e6324ff9","block_type":"box","text":"securities of companies domiciled in the PRC that trade on Chinese stock exchanges (“A-Shares”)","page_number":147,"box":{"x":116,"y":102,"width":735,"height":13}},{"id":"d507db10-663b-46b4-b378-05d5e9af2f8c","block_type":"box","text":"through the Shanghai-Hong Kong Stock Connect program or the Shenzhen-Hong Kong Stock Connect","page_number":147,"box":{"x":116,"y":118,"width":769,"height":12}},{"id":"0bee005d-61f8-4571-a8c6-dc7c811d043b","block_type":"box","text":"program, as applicable (each, a “Stock Connect” and collectively, “Stock Connects”). The duration of","page_number":147,"box":{"x":117,"y":134,"width":750,"height":12}},{"id":"512fbc4f-8011-4913-a11a-140f2c8ec789","block_type":"box","text":"the temporary exemptions is not stated in the circulars and is subject to termination by the PRC tax","page_number":147,"box":{"x":116,"y":149,"width":740,"height":12}},{"id":"4760bb80-94ed-4a19-b17d-39c71382ef4e","block_type":"box","text":"authorities with or without notice.","page_number":147,"box":{"x":116,"y":165,"width":249,"height":9}},{"id":"dfed5eda-c12b-48ab-a194-cad637516743","block_type":"box","text":"On November 22, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":147,"box":{"x":116,"y":196,"width":703,"height":12}},{"id":"5945abc5-d441-45b0-8572-bfafb2fd8b28","block_type":"box","text":"institutional investors are temporarily exempt from withholding income tax with respect to interest","page_number":147,"box":{"x":117,"y":211,"width":723,"height":12}},{"id":"94d005f0-7d76-4617-8cc7-fec3f51fec69","block_type":"box","text":"income on bonds derived from the PRC bond market from November 7, 2018 to November 6, 2021.","page_number":147,"box":{"x":117,"y":227,"width":745,"height":11}},{"id":"79cb128c-3b6c-4e55-ba0a-801df45de2a7","block_type":"box","text":"On November 22, 2021, the MoF and STA issued Public Notice 34 to extend the temporary exemption","page_number":147,"box":{"x":116,"y":242,"width":765,"height":12}},{"id":"f0a59439-2a20-4926-8f50-b4802f148c75","block_type":"box","text":"from November 7, 2021 to December 31, 2025. On January 15, 2026, it was announced via Public","page_number":147,"box":{"x":116,"y":258,"width":736,"height":12}},{"id":"a1373614-fb65-476f-bd08-33c6b191609b","block_type":"box","text":"Notice No. 5 of 2026 that the exemption was extended through December 31, 2027.","page_number":147,"box":{"x":117,"y":273,"width":628,"height":12}},{"id":"254917fa-f30f-4c9f-b592-4b0b60bd8e45","block_type":"box","text":"Value Added Tax (“VAT”) Risk—","page_number":147,"box":{"x":118,"y":304,"width":225,"height":12}},{"id":"053dd0a9-cf76-4954-8b03-0e8ec5969b41","block_type":"box","text":"k—From May 1, 2016, VAT applies to certain income derived by the","page_number":147,"box":{"x":342,"y":304,"width":501,"height":12}},{"id":"076dec31-2955-4ee4-b561-d3fad8ffd417","block_type":"box","text":"Fund, including PRC sourced interest income on non-government bonds and trading gains.","page_number":147,"box":{"x":117,"y":320,"width":681,"height":12}},{"id":"8f21bb8d-1dbb-4184-bdf3-cad892093db7","block_type":"box","text":"There are however certain tax exemptions available, some temporary in nature, highlighted below.","page_number":147,"box":{"x":116,"y":351,"width":735,"height":12}},{"id":"251c2e21-577b-485d-b885-e44c4f5eb5a6","block_type":"box","text":"VAT exemptions currently apply to capital gains from trading of QFII and RQFII products, A-Shares","page_number":147,"box":{"x":116,"y":382,"width":741,"height":12}},{"id":"fec386f4-41f6-4e8c-8272-caa75b35e722","block_type":"box","text":"traded on the Stock Connects and debt securities traded in the China Interbank Bond Market.","page_number":147,"box":{"x":116,"y":397,"width":699,"height":10}},{"id":"a5c76e3f-3a90-4401-86da-2d596afe88c8","block_type":"box","text":"On November 7, 2018, the MoF and STA jointly issued Circular 108 which states that foreign","page_number":147,"box":{"x":116,"y":428,"width":694,"height":12}},{"id":"c4494fa6-c9fb-4b5d-a4c7-3bd977a61f73","block_type":"box","text":"institutional investors are temporarily exempt from VAT with respect to interest income on bonds","page_number":147,"box":{"x":117,"y":444,"width":718,"height":12}},{"id":"b05ef5d8-7a6d-4c53-a1e0-702e1dcd6e6f","block_type":"box","text":"derived from the PRC bond market from November 7, 2018 to November 6, 2021. On November 22,","page_number":147,"box":{"x":116,"y":459,"width":750,"height":11}},{"id":"be2bf31c-7214-4bd7-bbbc-410638d20e01","block_type":"box","text":"2021, the MoF and STA jointly issued Public Notice 34 to extend the temporary exemption from","page_number":147,"box":{"x":116,"y":475,"width":714,"height":12}},{"id":"e602c3ff-0065-4d2b-a9f8-ad01a86b1ea9","block_type":"box","text":"November 7, 2021 to December 31, 2025. However, on July 31, 2025, the MoF and STA jointly issued","page_number":147,"box":{"x":117,"y":490,"width":764,"height":12}},{"id":"74ba4eee-0b77-4515-8436-7f0b6e9fe0b2","block_type":"box","text":"Public Notice No 4 of 2025, stating that VAT will apply with respect to interest income derived from","page_number":147,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"2d29222f-5e8a-4ef7-927e-b0f2b124d6ae","block_type":"box","text":"treasury bonds, local government bonds and financial bonds issued on or after August 8, 2025. It is","page_number":147,"box":{"x":116,"y":521,"width":742,"height":12}},{"id":"4306a1e2-56d8-4481-8407-44e4519919fe","block_type":"box","text":"understood that Public Notice No 4 of 2025 does not supersede the afore-mentioned exemption for","page_number":147,"box":{"x":117,"y":537,"width":739,"height":12}},{"id":"4729862f-c0a0-4f76-b4ba-34a3777d43a3","block_type":"box","text":"foreign institutional investors. This exemption was extended through December 31, 2027.","page_number":147,"box":{"x":116,"y":552,"width":668,"height":12}},{"id":"01aed2f3-4e2a-41e6-b233-3d8920b979da","block_type":"box","text":"Any changes in PRC tax law, future clarifications thereof, and/or subsequent retroactive enforcement","page_number":147,"box":{"x":116,"y":583,"width":754,"height":12}},{"id":"8e69f2aa-5899-4bf4-bb67-a512a9438a46","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":147,"box":{"x":117,"y":599,"width":761,"height":12}},{"id":"47cd60ec-e46e-416b-827f-86983dbac190","block_type":"box","text":"PRC tax authorities may withdraw the temporary tax exemptions in the future and seek to collect taxes","page_number":147,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"3955c9c9-b180-4a79-aacd-b7170433b5de","block_type":"box","text":"realized on the sale of A-Shares or PCR sourced interest income on non-government bonds received","page_number":147,"box":{"x":117,"y":630,"width":756,"height":12}},{"id":"2c79de09-4143-4795-add0-0578e89295e7","block_type":"box","text":"by the Fund without giving any prior notice. If the temporary tax exemptions are withdrawn, any taxes","page_number":147,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"3fdbccd4-5f4e-4fd7-8ee3-24cfca8e6f7c","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":147,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"40e7af1f-6edf-43f0-bf09-75cdc822cc72","block_type":"box","text":"its net asset value. As with any net asset value adjustment, investors may be advantaged or","page_number":147,"box":{"x":117,"y":676,"width":683,"height":12}},{"id":"b262f3ad-812d-41d6-9e31-2ea641d30f57","block_type":"box","text":"disadvantaged depending on when the investors purchased and/or sold the shares of the Fund. There","page_number":147,"box":{"x":116,"y":692,"width":758,"height":12}},{"id":"b6f3dbc9-b146-455d-abb4-4a22ea8f054f","block_type":"box","text":"will be no retrospective restatement of the Fund’s net asset value.","page_number":147,"box":{"x":116,"y":707,"width":488,"height":12}},{"id":"3026b362-fbc7-4eb7-9cce-7564516faf15","block_type":"box","text":"BlackRock will keep the provisioning policy for tax liability under review and may, in its discretion from","page_number":147,"box":{"x":117,"y":738,"width":752,"height":12}},{"id":"8e70334b-4ddc-4d78-882e-5665f25ad051","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":147,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"09b64530-7194-4c1f-85de-aba763f287ba","block_type":"box","text":"as further clarified by the PRC in notifications.","page_number":147,"box":{"x":116,"y":769,"width":339,"height":12}},{"id":"cd70d90b-85e3-43c4-9f4e-33070fddf91d","block_type":"box","text":"Investment in Other Investment Companies.","page_number":147,"box":{"x":116,"y":800,"width":350,"height":12}},{"id":"34b62a56-cce1-4fd1-a668-42a550854a78","block_type":"box","text":"Each Fund may, subject to applicable law, invest in","page_number":147,"box":{"x":474,"y":800,"width":378,"height":12}},{"id":"f8a8bfb9-10b0-4cc1-a63f-74386e7b5632","block_type":"box","text":"other investment companies (including investment companies managed by BlackRock and its","page_number":147,"box":{"x":116,"y":816,"width":694,"height":12}},{"id":"70e1ad9c-b737-4978-8be0-25ee34b1c26e","block_type":"box","text":"affiliates), including money market funds and ETFs, which are typically open-end funds or unit","page_number":147,"box":{"x":116,"y":831,"width":701,"height":12}},{"id":"d10cd8d8-94dc-4d08-a29c-ce41bb1ab566","block_type":"box","text":"investment trusts listed on a stock exchange. Under Section 12(d)(1)(A) of the Investment Company","page_number":147,"box":{"x":117,"y":847,"width":748,"height":12}},{"id":"a545d672-ea19-41d7-8ce8-3105237887b2","block_type":"box","text":"Act, however, a Fund may invest up to 10% of its total assets in securities of other investment","page_number":147,"box":{"x":116,"y":862,"width":701,"height":12}},{"id":"42949364-de0c-4b70-a695-d5f655bbdc4e","block_type":"box","text":"companies (measured at the time of such investment). In addition, under Section 12(d)(1)(A) of the","page_number":147,"box":{"x":116,"y":878,"width":739,"height":12}},{"id":"73831aa3-51d8-416d-9f1c-f37db08c2ace","block_type":"box","text":"II-60","page_number":147,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e1ce9683-f0d2-41e7-8798-5d583179d788","block_type":"box","text":"NM1026U-6030748-147/260","page_number":147,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bc30607b-7da9-4080-a263-1d570e59c92c","block_type":"box","text":"Investment Company Act a Fund may not acquire securities of an investment company if such","page_number":148,"box":{"x":117,"y":87,"width":703,"height":12}},{"id":"738a60e5-51a4-4979-b601-274eba49f4fe","block_type":"box","text":"acquisition would cause the Fund to own more than 3% of the total outstanding voting stock of such","page_number":148,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"d1b7088a-bab1-45bb-8142-4e595fac4627","block_type":"box","text":"investment company and a Fund may not invest in another investment company if such investment","page_number":148,"box":{"x":117,"y":118,"width":739,"height":12}},{"id":"7775e239-6ff4-4fd7-be3d-583c5d0f352a","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":148,"box":{"x":116,"y":134,"width":753,"height":9}},{"id":"dfd54dcc-138e-457a-98a8-f3ec77656a89","block_type":"box","text":"investment company. (These limits do not restrict a Feeder Fund from investing all of its assets in","page_number":148,"box":{"x":117,"y":149,"width":727,"height":12}},{"id":"b10d9410-9e57-4051-af20-5447c10bbfe2","block_type":"box","text":"shares of its Master Portfolio.) In addition to the restrictions on investing in other investment companies","page_number":148,"box":{"x":116,"y":165,"width":771,"height":12}},{"id":"88cb61bb-8c81-4cc2-9475-4f0545c2e60a","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":148,"box":{"x":116,"y":180,"width":759,"height":12}},{"id":"5c9ea155-7216-4a0b-bb96-80407b310c04","block_type":"box","text":"a registered closed-end investment company if such investment would cause the Fund and other","page_number":148,"box":{"x":116,"y":196,"width":724,"height":12}},{"id":"14161421-43f7-4a53-a57c-84f7ef280b05","block_type":"box","text":"BlackRock-advised investment companies to own more than 10% of the total outstanding voting stock","page_number":148,"box":{"x":117,"y":211,"width":760,"height":12}},{"id":"a5fd0462-cb06-4f56-8d12-f4e7b9a30a02","block_type":"box","text":"of such closed-end investment company. Pursuant to Section 12(d)(1)(G) of the Investment Company","page_number":148,"box":{"x":116,"y":227,"width":761,"height":12}},{"id":"66b379a6-28ff-431c-a221-14ad1ccd3cbf","block_type":"box","text":"Act, these percentage limitations do not apply to investments in affiliated investment companies,","page_number":148,"box":{"x":116,"y":242,"width":719,"height":12}},{"id":"8923ff21-f6ef-4634-a78f-95db28068283","block_type":"box","text":"including ETFs, subject to certain conditions. In addition, a Fund may be able to rely on certain rules","page_number":148,"box":{"x":117,"y":258,"width":747,"height":12}},{"id":"b2fc20f6-c3d1-410e-888a-b8b0bc8702f6","block_type":"box","text":"under the Investment Company Act to invest in shares of money market funds or other investment","page_number":148,"box":{"x":117,"y":273,"width":733,"height":12}},{"id":"90c47743-0b7d-47ba-b148-3e6f3ba5c9f6","block_type":"box","text":"companies beyond the statutory limits noted above, but subject to certain conditions.","page_number":148,"box":{"x":116,"y":289,"width":633,"height":12}},{"id":"5752624e-9d86-442c-993e-a71a22a64b4f","block_type":"box","text":"As with other investments, investments in other investment companies are subject to market and","page_number":148,"box":{"x":116,"y":320,"width":723,"height":12}},{"id":"81470ba4-de1d-4180-8501-8ecb0a6afa6e","block_type":"box","text":"selection risk.","page_number":148,"box":{"x":116,"y":335,"width":106,"height":10}},{"id":"e4cf9d0c-824d-432d-b35e-5bafbfd7a3e1","block_type":"box","text":"Shares of investment companies, such as closed-end fund investment companies, that trade on an","page_number":148,"box":{"x":116,"y":366,"width":740,"height":12}},{"id":"4e7bb62f-373f-453f-963c-be8ef9efdc09","block_type":"box","text":"exchange may at times be acquired at market prices representing premiums to their NAVs. In addition,","page_number":148,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"6b2fea59-a8a1-4b53-98a1-c705e0b1a194","block_type":"box","text":"investment companies held by a Fund that trade on an exchange could trade at a discount from NAV,","page_number":148,"box":{"x":117,"y":397,"width":758,"height":12}},{"id":"47e39ebb-6d8d-444b-b824-81bf0ad301e2","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":148,"box":{"x":116,"y":413,"width":756,"height":12}},{"id":"381b6d8b-b9a6-46b3-9812-4596e5f9c5c6","block_type":"box","text":"exchange-traded investment company decreases below the price that the Fund paid for the shares and","page_number":148,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"bcc2cdd9-3653-4b3c-a357-4fe8c72fe252","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":148,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"250f4a1f-4ea1-46cc-8ae5-fc7d15985adc","block_type":"box","text":"than the price at which it purchased the shares, the Fund would experience a loss.","page_number":148,"box":{"x":116,"y":459,"width":617,"height":12}},{"id":"5870061e-8cf6-4a7f-a75c-11cd4037530d","block_type":"box","text":"In addition, if a Fund acquires shares in investment companies, including affiliated investment","page_number":148,"box":{"x":117,"y":490,"width":698,"height":12}},{"id":"7f96e74d-68a6-46e7-8c33-21b2a16e447f","block_type":"box","text":"companies, shareholders would bear both their proportionate share of expenses in the Fund and,","page_number":148,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"766a4fb2-b8f1-47b9-9ea1-ddbf10ee9548","block_type":"box","text":"indirectly, the expenses of such investment companies. Such expenses, both at the Fund level and","page_number":148,"box":{"x":117,"y":521,"width":739,"height":12}},{"id":"6961b7e0-bd3a-4a34-8503-16586617e2a9","block_type":"box","text":"acquired investment company level, would include management and advisory fees, unless such fees","page_number":148,"box":{"x":116,"y":537,"width":753,"height":12}},{"id":"4ef44572-84f9-4de1-ba36-26d17d7eae0b","block_type":"box","text":"have been waived by BlackRock. Please see the relevant Fund’s Prospectus to determine whether any","page_number":148,"box":{"x":117,"y":552,"width":769,"height":12}},{"id":"c097bd02-9acd-4a51-bbd0-2e43b85ae0c3","block_type":"box","text":"such management and advisory fees have been waived by BlackRock. Investments by a Fund in","page_number":148,"box":{"x":116,"y":568,"width":724,"height":12}},{"id":"a3a207ea-b4f0-4070-ab0f-d89120585d5c","block_type":"box","text":"wholly owned investment entities created under the laws of certain countries will not be deemed an","page_number":148,"box":{"x":116,"y":583,"width":740,"height":12}},{"id":"4c2396d5-304c-41f2-af8a-0f2b0c6a058b","block_type":"box","text":"investment in other investment companies. Pursuant to guidance issued by the staff of the","page_number":148,"box":{"x":117,"y":599,"width":674,"height":12}},{"id":"53b7aae9-669c-422e-aa62-4692d8b2ab73","block_type":"box","text":"Commission, fees and expenses of money market funds used for the investment of cash collateral","page_number":148,"box":{"x":117,"y":614,"width":733,"height":12}},{"id":"c1e6391c-3d98-4c84-912c-bce6dfbdc6c6","block_type":"box","text":"received in connection with loans of Fund securities are not treated as “acquired fund fees and","page_number":148,"box":{"x":117,"y":630,"width":706,"height":12}},{"id":"41fdbf72-2372-4bae-967a-e996966146ea","block_type":"box","text":"expenses,” which are fees and expenses charged by other investment companies and pooled","page_number":148,"box":{"x":116,"y":645,"width":701,"height":12}},{"id":"dc747d5c-af2f-4680-8a4e-bc6275d705f8","block_type":"box","text":"investment vehicles in which a Fund invests a portion of its assets.","page_number":148,"box":{"x":117,"y":661,"width":492,"height":12}},{"id":"54ce9f1a-3d16-456c-a223-a44e0b7e7635","block_type":"box","text":"To the extent shares of a Fund are held by another f","page_number":148,"box":{"x":116,"y":692,"width":380,"height":12}},{"id":"ae837541-e674-45e4-a77b-40c2520927af","block_type":"box","text":"und, the ability of the Fund it","page_number":148,"box":{"x":497,"y":692,"width":205,"height":12}},{"id":"3068a2ee-ed2e-460f-aed9-3a572f096447","block_type":"box","text":"self to purchase other","page_number":148,"box":{"x":702,"y":692,"width":158,"height":12}},{"id":"e4f76dee-46b8-4a72-8451-97f81f455ccc","block_type":"box","text":"funds may be limited. In addition, a fund of funds (","page_number":148,"box":{"x":116,"y":707,"width":363,"height":12}},{"id":"e9c3317a-2953-4267-9b98-c73677bb1586","block_type":"box","text":"e.g.","page_number":148,"box":{"x":480,"y":710,"width":25,"height":9}},{"id":"dfec3182-9c53-47d1-82d8-86d59219f98e","block_type":"box","text":", an investment company that seeks to meet its","page_number":148,"box":{"x":508,"y":707,"width":342,"height":12}},{"id":"1152805a-474c-4e49-ae66-ae4309df1bc3","block_type":"box","text":"investment objective by investing significantly in","page_number":148,"box":{"x":117,"y":723,"width":345,"height":12}},{"id":"9a8d5346-84c3-4990-b713-9e115208f302","block_type":"box","text":"other investment companies)","page_number":148,"box":{"x":468,"y":723,"width":210,"height":12}},{"id":"db8a7062-fc70-4c4e-bece-c1f3992c8779","block_type":"box","text":"may be limited in its ability","page_number":148,"box":{"x":684,"y":723,"width":190,"height":12}},{"id":"2bec6f1b-9317-4d6d-8f55-994aa90e6588","block_type":"box","text":"to purchase underlying funds if such underlying f","page_number":148,"box":{"x":116,"y":738,"width":353,"height":12}},{"id":"51ce1266-9afe-4df5-9ca1-e15019037cd0","block_type":"box","text":"unds themselves own shares of underlying funds.","page_number":148,"box":{"x":470,"y":738,"width":358,"height":12}},{"id":"e42ceffb-3874-4ec1-990b-1b637a7ef37d","block_type":"box","text":"A number of publicly traded closed-end investment companies have been organized to facilitate","page_number":148,"box":{"x":116,"y":769,"width":710,"height":12}},{"id":"c7395735-fa08-4022-b6c7-418a8f1a726f","block_type":"box","text":"indirect foreign investment in developing countries, and certain of such countries, such as Thailand,","page_number":148,"box":{"x":117,"y":785,"width":736,"height":12}},{"id":"41f2abb7-e7a6-4297-b2f5-ed2253543005","block_type":"box","text":"South Korea, Chile and Brazil, have specifically authorized such funds. There also are investment","page_number":148,"box":{"x":116,"y":800,"width":725,"height":12}},{"id":"28866138-11cd-4f33-afe1-6e1dfe4185f3","block_type":"box","text":"opportunities in certain of such countries in pooled vehicles that resemble open-end investment","page_number":148,"box":{"x":116,"y":816,"width":708,"height":12}},{"id":"3e6b5f8b-82cf-4b29-9b08-2bbf8be7662f","block_type":"box","text":"companies. The restrictions on investments in securities of investment companies set forth above may","page_number":148,"box":{"x":116,"y":831,"width":765,"height":12}},{"id":"3e6d8682-39f9-4c0f-ab83-e0fa5879c618","block_type":"box","text":"limit opportunities for a Fund to invest indirectly in certain developing countries.","page_number":148,"box":{"x":117,"y":847,"width":591,"height":12}},{"id":"51a83d5a-bb4c-43ca-8f3f-3b923e2b9273","block_type":"box","text":"II-61","page_number":148,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"ddec618c-85e3-4b9c-8987-86316df0b156","block_type":"box","text":"NM1026U-6030748-148/260","page_number":148,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fcc4d253-eef2-404e-978c-16e09195f833","block_type":"box","text":"Issuer Insolvency Risk.","page_number":149,"box":{"x":116,"y":87,"width":185,"height":12}},{"id":"5e7baa96-688a-40ec-adac-39e458418cbf","block_type":"box","text":"Certain Funds’ potential exposure to financially or operationally troubled","page_number":149,"box":{"x":302,"y":87,"width":543,"height":12}},{"id":"0f4a71fc-9b95-4ae7-b0e5-2553a0fec1d6","block_type":"box","text":"issuers involves a high degree of credit and market risk, which may be heightened during an economic","page_number":149,"box":{"x":117,"y":102,"width":766,"height":13}},{"id":"cc1e6c94-6eda-4dcd-9139-be84094e8424","block_type":"box","text":"downturn or recession. Should an issuer of securities held by a Fund become involved in a bankruptcy","page_number":149,"box":{"x":116,"y":118,"width":765,"height":12}},{"id":"06c49883-86e0-45e4-b455-5f7d2bf2f976","block_type":"box","text":"proceeding, reorganization or financial restructuring, a wide variety of considerations make an","page_number":149,"box":{"x":117,"y":134,"width":700,"height":12}},{"id":"3567b1eb-355f-4908-801e-a9406c4a1ddd","block_type":"box","text":"evaluation of the outcome of the Fund’s exposure to the issuer uncertain.","page_number":149,"box":{"x":116,"y":149,"width":548,"height":12}},{"id":"e2dd1fd9-81ea-44e5-b3d8-cac9791892de","block_type":"box","text":"During the period of a bankruptcy proceeding, reorganization or financial restructuring, it is unlikely that","page_number":149,"box":{"x":117,"y":177,"width":769,"height":12}},{"id":"b454cfc5-f51b-4fa8-8b52-d30584fba1eb","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":149,"box":{"x":116,"y":192,"width":728,"height":13}},{"id":"c20e6063-8ffb-40da-9902-3a1f2c393993","block_type":"box","text":"significant uncertainty as to whether the reorganization or restructuring will be completed, and the Fund","page_number":149,"box":{"x":116,"y":208,"width":772,"height":12}},{"id":"853a0d35-5109-4c28-af71-ac8eab01b25a","block_type":"box","text":"may bear certain extraordinary expenses to protect and recover its investment. A Fund will also be","page_number":149,"box":{"x":117,"y":224,"width":735,"height":12}},{"id":"cafe9787-c04e-45a1-baec-4fc5b6bddc66","block_type":"box","text":"subject to significant uncertainty as to when and in what manner and for what value the obligations","page_number":149,"box":{"x":116,"y":239,"width":737,"height":12}},{"id":"1afc2899-1f49-4fa7-8354-559c83dc29ef","block_type":"box","text":"evidenced by the securities of the issuer held by the Fund will eventually be satisfied.","page_number":149,"box":{"x":116,"y":254,"width":637,"height":13}},{"id":"5bd19762-7610-458f-abea-88eae538cd2c","block_type":"box","text":"Even if a plan of reorganization or restructuring is adopted with respect to the securities of the issuer","page_number":149,"box":{"x":117,"y":282,"width":741,"height":12}},{"id":"ded749f1-a580-4339-a680-3aeda1868ec7","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":149,"box":{"x":117,"y":298,"width":748,"height":12}},{"id":"e3b6161c-168f-4c61-9cf6-4b9a07c5818c","block_type":"box","text":"connection with such plan of reorganization or restructuring will not have a lower value or income","page_number":149,"box":{"x":116,"y":313,"width":717,"height":12}},{"id":"6e43624b-5e05-4764-be1c-f3e3974707c0","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":149,"box":{"x":117,"y":329,"width":742,"height":12}},{"id":"0efea08d-c466-46d5-bc2b-250a2d533ae8","block_type":"box","text":"rights in any collateral or may have its claims or security interest in any collateral challenged, disallowed","page_number":149,"box":{"x":117,"y":345,"width":767,"height":11}},{"id":"075a97d8-5604-4c73-bb79-6bfc36ba9e5d","block_type":"box","text":"or subordinated to the claims or security interests of other creditors. In addition, amendments to the U.S.","page_number":149,"box":{"x":116,"y":360,"width":772,"height":12}},{"id":"d5e4f6ef-d3a5-4d1c-ba89-1257a94d9221","block_type":"box","text":"Bankruptcy Code or other relevant laws could alter the expected outcome or introduce greater","page_number":149,"box":{"x":117,"y":375,"width":695,"height":12}},{"id":"86cba561-f8ff-4ef6-801c-ae450b1e1d20","block_type":"box","text":"uncertainty regarding the outcome of the Fund’s securities holdings in the issuer. In a bankruptcy","page_number":149,"box":{"x":117,"y":391,"width":716,"height":12}},{"id":"fd9b811b-575c-4132-bb3d-ff4ee1f46c61","block_type":"box","text":"proceeding, a reorganization or restructuring, the securities of the issuer held by a Fund could be","page_number":149,"box":{"x":117,"y":406,"width":716,"height":12}},{"id":"6c4dab2e-b25a-4792-b115-4ca6d7044135","block_type":"box","text":"re-characterized or a Fund may receive different securities or other assets, including equity securities.","page_number":149,"box":{"x":117,"y":422,"width":752,"height":12}},{"id":"b0adb4b8-55e9-4247-a75e-9053aeb347cd","block_type":"box","text":"These types of equity securities include, but are not limited to: common stock; preferred stock (including","page_number":149,"box":{"x":116,"y":437,"width":768,"height":12}},{"id":"84a31771-f400-4fe2-a594-ecdc634a6aea","block_type":"box","text":"convertible preferred stock); bonds, notes and debentures convertible into common or preferred stock;","page_number":149,"box":{"x":116,"y":453,"width":756,"height":12}},{"id":"d6b5f696-a291-41fa-9dba-8626add94c27","block_type":"box","text":"stock purchase warrants and rights; equity interests in trusts; and depositary receipts. Equity securities","page_number":149,"box":{"x":116,"y":469,"width":759,"height":11}},{"id":"7435f00f-4f1d-450e-8a7a-346464358ccd","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":149,"box":{"x":116,"y":484,"width":764,"height":12}},{"id":"16bec7dd-d5cb-42fd-9fd2-6e00993b5a3d","block_type":"box","text":"Holders of equity securities are subject to more risk than holders of debt securities because the status of","page_number":149,"box":{"x":117,"y":499,"width":771,"height":13}},{"id":"4ca03faf-d6e8-49ed-b5e3-67805d258812","block_type":"box","text":"equity holders is subordinate to debtholders in an issuer’s capital structure. The value of equity","page_number":149,"box":{"x":116,"y":515,"width":701,"height":12}},{"id":"3ee7b789-1bf7-43bd-ad5d-a04e93a73145","block_type":"box","text":"securities received by a Fund could decline if the financial condition of the issuer deteriorates or if","page_number":149,"box":{"x":116,"y":530,"width":721,"height":13}},{"id":"e78cb2ba-d079-42d3-8d83-d46742fd0e57","block_type":"box","text":"overall market and economic conditions, or conditions within the issuer’s region or industry, deteriorate.","page_number":149,"box":{"x":116,"y":546,"width":764,"height":12}},{"id":"fd8404d2-6371-4f3a-a881-440009179e7a","block_type":"box","text":"To the extent that a Fund receives other assets in connection with a bankruptcy proceeding,","page_number":149,"box":{"x":116,"y":574,"width":681,"height":12}},{"id":"07e56f3b-e225-41cf-8707-16b783d2da6e","block_type":"box","text":"reorganization or financial restructuring, the Fund may also be subject to additional risks associated with","page_number":149,"box":{"x":117,"y":589,"width":770,"height":12}},{"id":"cf51dec9-fd2d-4445-a738-b715a8aaabcb","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":149,"box":{"x":116,"y":605,"width":730,"height":12}},{"id":"7da5b2b4-6622-4da0-8548-409975cb0355","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":149,"box":{"x":117,"y":620,"width":756,"height":12}},{"id":"e3bbc8ee-0666-404a-abe1-6543bb51588b","block_type":"box","text":"the issuer. A Fund may receive such interests in loans to the extent permitted by the Investment","page_number":149,"box":{"x":116,"y":636,"width":710,"height":12}},{"id":"2003e7b5-951a-4438-a5c3-1e69fa8de08c","block_type":"box","text":"Company Act.","page_number":149,"box":{"x":117,"y":651,"width":108,"height":12}},{"id":"1e38401f-783a-4054-b669-aed44eac6371","block_type":"box","text":"Securities or other assets received in a reorganization or restructuring typically entail a higher degree","page_number":149,"box":{"x":116,"y":679,"width":750,"height":12}},{"id":"4ccf8644-7d15-4600-95f7-212d5a73332e","block_type":"box","text":"of risk than investments in securities of issuers that have not undergone a reorganization or","page_number":149,"box":{"x":116,"y":695,"width":679,"height":12}},{"id":"29905556-b23d-4e88-8cb6-a4056170dd2f","block_type":"box","text":"restructuring and may be subject to heavy selling or downward pricing pressure after completion of the","page_number":149,"box":{"x":117,"y":710,"width":760,"height":12}},{"id":"3a8b841a-4c11-44b9-be4a-f44cffebc124","block_type":"box","text":"reorganization or restructuring. The post-reorganization/restructuring assets and securities may also be","page_number":149,"box":{"x":117,"y":726,"width":766,"height":12}},{"id":"d0e40e0d-7381-4331-a0d4-22e50d2fd542","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":149,"box":{"x":117,"y":741,"width":711,"height":12}},{"id":"af6676dd-9d7a-4b24-a3f9-261fa0639beb","block_type":"box","text":"reorganization or restructuring with respect to securities of the issuer held by a Fund, the Fund also","page_number":149,"box":{"x":117,"y":757,"width":736,"height":12}},{"id":"931433d8-5028-4e26-90c6-f619c8ec04e7","block_type":"box","text":"may be restricted from disposing such securities for a period of time. If a Fund becomes involved in","page_number":149,"box":{"x":117,"y":772,"width":735,"height":12}},{"id":"bc1de208-e7a4-472c-8029-0cca669f04fe","block_type":"box","text":"such proceedings, the Fund may have more active participation in the affairs of the issuer than that","page_number":149,"box":{"x":116,"y":788,"width":735,"height":12}},{"id":"b24aed7b-281a-4cb6-81ea-32749281a16f","block_type":"box","text":"assumed generally by an investor.","page_number":149,"box":{"x":116,"y":803,"width":254,"height":12}},{"id":"9cc9b1cf-e654-470f-ad17-d3328ff42fd0","block_type":"box","text":"Lease Obligations.","page_number":149,"box":{"x":116,"y":831,"width":148,"height":12}},{"id":"b537e7d0-86dc-4951-95f0-3267199b847b","block_type":"box","text":"A Fund may hold participation certificates in a lease, an installment purchase","page_number":149,"box":{"x":265,"y":831,"width":581,"height":12}},{"id":"c9224daf-3dbd-41c9-9f3e-0e914ce2e0f8","block_type":"box","text":"contract, or a conditional sales contract (“lease obligations”). The Manager will monitor the credit","page_number":149,"box":{"x":116,"y":847,"width":721,"height":12}},{"id":"955fd5f5-6a32-4a09-a2a5-5a5c339eb7b6","block_type":"box","text":"standing of each borrower and each entity providing credit support and/or a put option relating to lease","page_number":149,"box":{"x":116,"y":862,"width":766,"height":12}},{"id":"c75600fb-4c0c-434c-bc69-de5fcfb65054","block_type":"box","text":"obligations.","page_number":149,"box":{"x":116,"y":878,"width":89,"height":12}},{"id":"250da62e-9090-4e03-95b9-51b4a8be5517","block_type":"box","text":"II-62","page_number":149,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"88989249-fd71-4037-b290-dc1d0bd28331","block_type":"box","text":"NM1026U-6030748-149/260","page_number":149,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b7605acb-67c6-4de6-9a5c-7d2748616ec2","block_type":"box","text":"Life Settlement Investments.","page_number":150,"box":{"x":116,"y":87,"width":227,"height":10}},{"id":"9d06058f-edc4-431a-862b-e68a9f1c0da9","block_type":"box","text":"A Fund may invest in life settlements, which are sales to third parties,","page_number":150,"box":{"x":344,"y":87,"width":525,"height":12}},{"id":"00172c35-2611-42a3-97c5-97c499eb56d0","block_type":"box","text":"such as the Fund, of existing life insurance contracts for more than their cash surrender value but less","page_number":150,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"02f8e592-e554-42cc-bab6-ceb79f1fe964","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":150,"box":{"x":116,"y":118,"width":756,"height":12}},{"id":"65f16c56-d1ff-4354-b5df-50cb66a73b5f","block_type":"box","text":"policy premiums in return for the expected receipt of the net benefit as the beneficiary under the policy.","page_number":150,"box":{"x":117,"y":134,"width":767,"height":12}},{"id":"b61e3d79-c206-47cd-ab45-921f3800c0db","block_type":"box","text":"Investments in these contracts involve certain risks, including liquidity risk, credit risk of the insurance","page_number":150,"box":{"x":117,"y":149,"width":756,"height":12}},{"id":"0ac730d5-57a7-4a24-8a84-6a51125170d9","block_type":"box","text":"company, and inaccurate estimations of life expectancy of the insured individuals (viators). These","page_number":150,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"7a0ea47a-503e-41d4-b1f1-581db1762680","block_type":"box","text":"policies may be considered illiquid because they are bought and sold in a secondary market through","page_number":150,"box":{"x":117,"y":180,"width":748,"height":12}},{"id":"cbd30af4-2214-4ba9-931f-0f3fdf06acb9","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":150,"box":{"x":117,"y":196,"width":760,"height":12}},{"id":"9f6e8300-4a93-4d8a-ba3b-814574c29f5e","block_type":"box","text":"may receive reduced or no benefits under the contract. A Fund seeks to minimize credit risk by","page_number":150,"box":{"x":117,"y":211,"width":708,"height":12}},{"id":"25d5d1ca-db90-416a-ba7b-280af71e832a","block_type":"box","text":"investing in policies issued by a diverse range of highly-rated insurance carriers. Furthermore, a Fund","page_number":150,"box":{"x":117,"y":227,"width":758,"height":12}},{"id":"d82fbfcf-766e-4f62-9d99-5808beffb962","block_type":"box","text":"may encounter losses on its investments if there is an inaccurate estimation of the life expectancies of","page_number":150,"box":{"x":117,"y":242,"width":761,"height":12}},{"id":"8a4bdd81-7292-4f59-afd2-6004cdadf258","block_type":"box","text":"viators. A Fund intends to reduce this life expectancy risk by investing only in contracts where the life","page_number":150,"box":{"x":116,"y":258,"width":754,"height":12}},{"id":"52f6a9a7-1029-4a49-8765-aac5df81a4c7","block_type":"box","text":"expectancy was reviewed by an experienced actuary, as well as by diversifying its investments across","page_number":150,"box":{"x":116,"y":273,"width":763,"height":12}},{"id":"9c81079a-4558-4b49-863f-a5cbe0406e1b","block_type":"box","text":"viators of varying ages and medical profiles. In addition, it is unclear whether the income from life","page_number":150,"box":{"x":116,"y":289,"width":725,"height":12}},{"id":"de99dc11-bb21-457d-a351-9f3eba8f43f6","block_type":"box","text":"settlements is qualifying income for purposes of the IRS 90% gross income test a Fund must satisfy","page_number":150,"box":{"x":116,"y":304,"width":746,"height":12}},{"id":"a0c2fab8-2c27-49ad-b23d-7e06cc50d595","block_type":"box","text":"each year to qualify as a regulated investment company. A Fund intends to monitor its investments to","page_number":150,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"7aa956f9-711a-4ac2-86f5-db627c58b751","block_type":"box","text":"ensure that the Fund remains qualified as a regulated investment company.","page_number":150,"box":{"x":116,"y":335,"width":567,"height":12}},{"id":"46082fd2-0f6d-4060-98d9-454ba37b52e3","block_type":"box","text":"Liquidity Risk Management.","page_number":150,"box":{"x":116,"y":366,"width":221,"height":12}},{"id":"5f28e745-e687-48d7-8ddb-b922d28225e8","block_type":"box","text":"Rule 22e-4 under the Investment Company Act (the “Liquidity Rule”)","page_number":150,"box":{"x":338,"y":366,"width":517,"height":12}},{"id":"3491dc2f-41d6-41ab-8c70-373afaac287c","block_type":"box","text":"requires open-end funds, such as the Funds, to adopt a liquidity risk management program and","page_number":150,"box":{"x":117,"y":382,"width":712,"height":12}},{"id":"a5c75a0b-b25c-4316-b1e6-7adcee74f165","block_type":"box","text":"enhance disclosures regarding fund liquidity. As required by the Liquidity Rule, the Funds have","page_number":150,"box":{"x":116,"y":397,"width":709,"height":12}},{"id":"f47ae5be-fcf9-4941-839d-e6f0c7762e32","block_type":"box","text":"implemented a liquidity risk management program (the “Liquidity Program”), and the Boards of","page_number":150,"box":{"x":117,"y":413,"width":704,"height":12}},{"id":"83f7bea2-7258-4ed6-a65b-21fe21bdb6b5","block_type":"box","text":"Directors of the Funds, including a majority of the independent Directors, have appointed the Manager","page_number":150,"box":{"x":117,"y":428,"width":762,"height":12}},{"id":"46dfee32-9b7a-433e-ab05-9214293d3efb","block_type":"box","text":"as the liquidity risk program administrator of the Liquidity Program. Under the Liquidity Program, the","page_number":150,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"099a701b-385b-47fd-b617-ebf400765802","block_type":"box","text":"Manager assesses, manages, and periodically reviews each Fund’s liquidity risk and classifies each","page_number":150,"box":{"x":117,"y":459,"width":746,"height":12}},{"id":"fc8091c7-a439-4598-934e-000bc382ed3e","block_type":"box","text":"investment held by a Fund as a “highly liquid investment,” “moderately liquid investment,” “less liquid","page_number":150,"box":{"x":117,"y":475,"width":750,"height":12}},{"id":"79b83a19-2863-490c-a9f0-4c727e15cc84","block_type":"box","text":"investment” or “illiquid investment.” The Liquidity Rule defines “liquidity risk” as the risk that a Fund","page_number":150,"box":{"x":117,"y":490,"width":736,"height":12}},{"id":"d505b6ca-6d4c-4964-adb5-5d220bfddd96","block_type":"box","text":"could not meet requests to redeem shares issued by the Fund without significant dilution of the","page_number":150,"box":{"x":116,"y":506,"width":709,"height":12}},{"id":"02d2f750-7362-44bc-a7b8-0f9bc25af40a","block_type":"box","text":"remaining investors’ interests in the Fund. The liquidity of a Fund’s portfolio investments is determined","page_number":150,"box":{"x":117,"y":521,"width":762,"height":12}},{"id":"e832fe5d-3607-469f-b589-d290be80ea49","block_type":"box","text":"based on relevant market, trading and investment-specific considerations under the Liquidity Program.","page_number":150,"box":{"x":117,"y":537,"width":764,"height":12}},{"id":"b36af030-41ee-41a2-beb3-4ccd638b72b4","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":150,"box":{"x":116,"y":552,"width":747,"height":12}},{"id":"c59e63ef-c553-457c-8d76-bd3c9d87c784","block_type":"box","text":"Fund can expect to be exposed to greater liquidity risk.","page_number":150,"box":{"x":117,"y":568,"width":411,"height":12}},{"id":"07ee0318-c92b-4c0d-9447-0d2872f99f65","block_type":"box","text":"Master Limited Partnerships.","page_number":150,"box":{"x":116,"y":599,"width":230,"height":12}},{"id":"a4019c36-58fe-48b5-ab6b-a6852d624a67","block_type":"box","text":"Certain Funds may invest in publicly traded master limited partnerships","page_number":150,"box":{"x":347,"y":599,"width":538,"height":12}},{"id":"b6a7a763-a9c4-4a89-b0cc-a070fbbdacef","block_type":"box","text":"(“MLPs”) which are limited partnerships or limited liability companies taxable as partnerships. MLPs","page_number":150,"box":{"x":117,"y":614,"width":741,"height":12}},{"id":"bde02934-2aac-4b51-a3b9-7e27809f1a9a","block_type":"box","text":"may derive income and gains from the exploration, development, mining or production, processing,","page_number":150,"box":{"x":117,"y":630,"width":739,"height":12}},{"id":"c35df000-6824-4c09-9fff-0ce5d222948f","block_type":"box","text":"refining, transportation (including pipelines transporting gas, oil, or products thereof), or the marketing","page_number":150,"box":{"x":117,"y":645,"width":758,"height":12}},{"id":"4af8d357-2817-4278-90e3-57ac9cb0ad86","block_type":"box","text":"of any mineral or natural resources. MLPs generally have two classes of owners, the general partner","page_number":150,"box":{"x":116,"y":661,"width":748,"height":12}},{"id":"7833d377-98f6-493f-93f9-1787ad2398f0","block_type":"box","text":"and limited partners. When investing in an MLP, a Fund intends to purchase publicly traded common","page_number":150,"box":{"x":116,"y":676,"width":747,"height":12}},{"id":"3b0f182f-8226-43a0-b538-f158e6c7aacc","block_type":"box","text":"units issued to limited partners of the MLP. The general partner is typically owned by a major energy","page_number":150,"box":{"x":117,"y":692,"width":744,"height":12}},{"id":"6914392b-2e97-4f49-905b-d4ff76f45e73","block_type":"box","text":"company, an investment fund, the direct management of the MLP or is an entity owned by one or more","page_number":150,"box":{"x":116,"y":707,"width":764,"height":12}},{"id":"dd9d650c-d0d1-4906-96d8-a997a2c6686f","block_type":"box","text":"of such parties. The general partner may be structured as a private or publicly traded corporation or","page_number":150,"box":{"x":116,"y":723,"width":739,"height":12}},{"id":"3b2d40a9-3cb2-4a75-80eb-7bc75860d417","block_type":"box","text":"other entity. The general partner typically controls the operations and management of the MLP through","page_number":150,"box":{"x":116,"y":738,"width":762,"height":12}},{"id":"5840c28f-ff28-4035-9c18-95a974aa53ad","block_type":"box","text":"an up to 2% equity interest in the MLP plus, in many cases, ownership of common units and","page_number":150,"box":{"x":116,"y":754,"width":683,"height":12}},{"id":"65ef376a-517e-46dd-93bc-d80df328a9d7","block_type":"box","text":"subordinated units. Limited partners own the remainder of the partnership, through ownership of","page_number":150,"box":{"x":116,"y":769,"width":714,"height":12}},{"id":"f28f0b59-dd1e-4834-bccc-a2b0a53f311b","block_type":"box","text":"common units, and have a limited role in the partnership’s operations and management.","page_number":150,"box":{"x":116,"y":785,"width":652,"height":12}},{"id":"d26558ec-e065-46d6-8064-f3ea92d80cb4","block_type":"box","text":"MLPs are typically structured such that common units and general partner interests have first priority to","page_number":150,"box":{"x":117,"y":816,"width":764,"height":12}},{"id":"fa6a99fd-0314-48b7-83e4-c22edb7364aa","block_type":"box","text":"receive quarterly cash distributions up to an established minimum amount (“minimum quarterly","page_number":150,"box":{"x":117,"y":831,"width":706,"height":12}},{"id":"777bf71a-1714-4220-89c1-24d1f9c0ee55","block_type":"box","text":"distributions” or “MQD”). Common and general partner interests also accrue arrearages in distributions","page_number":150,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"9d33f15f-146e-4e0a-9dc7-5d14a31c2138","block_type":"box","text":"to the extent the MQD is not paid. Once common and general partner interests have been paid,","page_number":150,"box":{"x":116,"y":862,"width":714,"height":12}},{"id":"654340df-96cf-417f-a63c-fe7e90903256","block_type":"box","text":"subordinated units receive distributions of up to the MQD; however, subordinated units do not accrue","page_number":150,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"37bb2d29-e2ab-41b9-86e0-34ec0d9d44e7","block_type":"box","text":"II-63","page_number":150,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"001aca6e-de11-4bdf-bd63-9d8c5901cc79","block_type":"box","text":"NM1026U-6030748-150/260","page_number":150,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bdaee703-2b07-4506-b0eb-059da34c7edd","block_type":"box","text":"arrearages. Distributable cash in excess of the MQD paid to both common and subordinated units is","page_number":151,"box":{"x":116,"y":87,"width":748,"height":12}},{"id":"b1b64494-f9aa-475d-baf5-2cfab20a83fd","block_type":"box","text":"distributed to both common and subordinated units generally on a pro rata basis. The general partner","page_number":151,"box":{"x":116,"y":103,"width":757,"height":12}},{"id":"463881d8-5abe-48f4-9210-d215d5c90d9c","block_type":"box","text":"is also eligible to receive incentive distributions if the general partner operates the business in a","page_number":151,"box":{"x":117,"y":118,"width":712,"height":12}},{"id":"1a7be74d-2e3f-45a0-9adc-1a08c2f0e14a","block_type":"box","text":"manner which results in distributions paid per common unit surpassing specified target levels. As the","page_number":151,"box":{"x":117,"y":134,"width":751,"height":12}},{"id":"637bdc49-b54d-4a07-b64a-4d74421e6847","block_type":"box","text":"general partner increases cash distributions to the limited partners, the general partner receives an","page_number":151,"box":{"x":116,"y":149,"width":739,"height":12}},{"id":"08794588-5bc0-4abc-9574-edc40f4f013b","block_type":"box","text":"increasingly higher percentage of the incremental cash distributions. A common arrangement provides","page_number":151,"box":{"x":117,"y":165,"width":764,"height":12}},{"id":"4104aacc-e214-4031-8e15-cd8f90021631","block_type":"box","text":"that the general partner can reach a tier where it receives 50% of every incremental dollar paid to","page_number":151,"box":{"x":116,"y":180,"width":727,"height":12}},{"id":"cbd1e510-5311-4377-acc2-a500c9a5ad3e","block_type":"box","text":"common and subordinated unit holders. These incentive distributions encourage the general partner to","page_number":151,"box":{"x":116,"y":196,"width":767,"height":12}},{"id":"70bee567-4aee-4246-83f4-2fd06023292f","block_type":"box","text":"streamline costs, increase capital expenditures and acquire assets in order to increase the","page_number":151,"box":{"x":116,"y":211,"width":676,"height":12}},{"id":"a380577b-cdd0-47eb-b90c-2663bf4897c6","block_type":"box","text":"partnership’s cash flow and raise the quarterly cash distribution in order to reach higher tiers. Such","page_number":151,"box":{"x":117,"y":227,"width":736,"height":12}},{"id":"88ff496b-69f9-4c4f-99ba-628b26d3237d","block_type":"box","text":"results benefit all security holders of the MLP.","page_number":151,"box":{"x":117,"y":242,"width":343,"height":12}},{"id":"7089f04d-787b-472a-a4a7-7fad00254ea5","block_type":"box","text":"MLP common units represent a limited partnership interest in the MLP. Common units are listed and","page_number":151,"box":{"x":117,"y":276,"width":748,"height":12}},{"id":"03f20e1b-f7dd-40d1-af5e-d16756189f80","block_type":"box","text":"traded on U.S. securities exchanges, with their value fluctuating predominantly based on prevailing","page_number":151,"box":{"x":116,"y":291,"width":739,"height":12}},{"id":"610b0f32-d8c5-4c45-b662-0f2caab1eaab","block_type":"box","text":"market conditions and the success of the MLP. Certain Funds intend to purchase common units in","page_number":151,"box":{"x":117,"y":307,"width":733,"height":12}},{"id":"e3a9efbb-7dd8-436f-919c-226fb72ae80d","block_type":"box","text":"market transactions. Unlike owners of common stock of a corporation, owners of common units have","page_number":151,"box":{"x":117,"y":322,"width":752,"height":12}},{"id":"af8a0eab-d803-40a7-8cc4-582d7857b8c1","block_type":"box","text":"limited voting rights and have no ability to annually elect directors. In the event of liquidation, common","page_number":151,"box":{"x":117,"y":338,"width":758,"height":12}},{"id":"9acc488c-b06b-4669-98c8-4e676cbfa999","block_type":"box","text":"units have preference over subordinated units, but not over debt or preferred units, to the remaining","page_number":151,"box":{"x":117,"y":353,"width":744,"height":12}},{"id":"0c6bfce7-0829-4205-a4bb-58ca73f7a8bb","block_type":"box","text":"assets of the MLP.","page_number":151,"box":{"x":116,"y":369,"width":144,"height":9}},{"id":"e1bddc3a-9bff-4d8c-9892-a98b04f21b84","block_type":"box","text":"Merger Transaction Risk.","page_number":151,"box":{"x":116,"y":402,"width":200,"height":12}},{"id":"55bc7d39-b3cc-4f1e-a3d7-0e880d59aeec","block_type":"box","text":"A Fund may buy stock of the target company in an announced merger","page_number":151,"box":{"x":317,"y":402,"width":531,"height":12}},{"id":"b164d555-020a-4e88-bdaa-dff6b409dc57","block_type":"box","text":"transaction prior to the consummation of such transaction. In that circumstance, a Fund would expect","page_number":151,"box":{"x":116,"y":418,"width":757,"height":12}},{"id":"ac35479c-0c63-4e82-b1e2-7769bec39cba","block_type":"box","text":"to receive an amount (whether in cash, stock of the acquiring company or a combination of both) in","page_number":151,"box":{"x":116,"y":433,"width":740,"height":12}},{"id":"7b57878b-5abe-4d8a-aae2-20e0fe47c101","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":151,"box":{"x":116,"y":449,"width":733,"height":12}},{"id":"5d1328e2-bdd3-4afe-b80c-8a5493aea943","block_type":"box","text":"subject to the risk that the merger transaction may be canceled, delayed or restructured, in which case","page_number":151,"box":{"x":116,"y":464,"width":766,"height":12}},{"id":"e03511f6-705d-44be-be0d-bfdb1a54b052","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":151,"box":{"x":116,"y":480,"width":754,"height":12}},{"id":"83b4ea85-fc99-4860-8b38-d780ba7af958","block_type":"box","text":"significant value.","page_number":151,"box":{"x":116,"y":495,"width":129,"height":12}},{"id":"142a247f-c8fa-4ef1-bb95-cd4eb66882b3","block_type":"box","text":"Money Market Obligations of Domestic Banks, Foreign Banks and Foreign Branches of U.S.","page_number":151,"box":{"x":116,"y":529,"width":737,"height":12}},{"id":"a1f1ff03-3791-4a0f-b2ca-87fe16cc185c","block_type":"box","text":"Banks.","page_number":151,"box":{"x":116,"y":544,"width":54,"height":10}},{"id":"d317f4ec-2bfe-454e-b7fa-6f8c9b939c1e","block_type":"box","text":"Certain Funds may purchase bank obligations, such as certificates of deposit, notes, bankers’","page_number":151,"box":{"x":171,"y":544,"width":705,"height":12}},{"id":"47e0183a-a120-4700-9c2a-6ec859df7e58","block_type":"box","text":"acceptances and time deposits, including instruments issued or supported by the credit of U.S. or","page_number":151,"box":{"x":116,"y":560,"width":728,"height":12}},{"id":"d8e342fd-f7af-46ce-ad8a-b2186b1bdb6b","block_type":"box","text":"foreign banks or savings institutions having total assets at the time of purchase in excess of $1 billion.","page_number":151,"box":{"x":116,"y":574,"width":761,"height":13}},{"id":"236929fe-e21f-43a4-8d12-40275e0813fc","block_type":"box","text":"These obligations may be general obligations of the parent bank or may be limited to the issuing","page_number":151,"box":{"x":116,"y":591,"width":719,"height":12}},{"id":"6c16030d-a783-402f-8d35-628050e2cc41","block_type":"box","text":"branch or subsidiary by the terms of a specific obligation or by government regulation. The assets of a","page_number":151,"box":{"x":117,"y":606,"width":761,"height":12}},{"id":"feac71b7-58d2-47a1-8180-fbea12a541f0","block_type":"box","text":"bank or savings institution will be deemed to include the assets of its domestic and foreign branches","page_number":151,"box":{"x":117,"y":622,"width":747,"height":12}},{"id":"fa77d993-6d22-4e82-87c0-8677f7155b0a","block_type":"box","text":"for purposes of a Fund’s investment policies. Investments in short-term bank obligations may include","page_number":151,"box":{"x":116,"y":637,"width":753,"height":12}},{"id":"5a765d10-4249-4d57-9c5a-4286aaffc5ff","block_type":"box","text":"obligations of foreign banks and domestic branches of foreign banks, and also foreign branches of","page_number":151,"box":{"x":116,"y":653,"width":734,"height":12}},{"id":"0538174a-2bf2-4764-b435-3cf97da9a1f3","block_type":"box","text":"domestic banks.","page_number":151,"box":{"x":116,"y":668,"width":120,"height":10}},{"id":"01733d51-0606-4f8b-885c-4f8492fc2040","block_type":"box","text":"To the extent consistent with their investment objectives, a Fund may invest in debt obligations of","page_number":151,"box":{"x":116,"y":702,"width":723,"height":12}},{"id":"64ade85e-97ac-4ba6-97c5-9d71d4e7d8fd","block_type":"box","text":"domestic or foreign corporations and banks, and may acquire commercial obligations issued by","page_number":151,"box":{"x":116,"y":717,"width":708,"height":12}},{"id":"05bfb4e8-662f-40e3-b7b8-798ee3aa8c09","block_type":"box","text":"Canadian corporations and Canadian counterparts of U.S. corporations, as well as Europaper, which is","page_number":151,"box":{"x":117,"y":733,"width":764,"height":12}},{"id":"c0bb402c-69b1-4e08-8e4f-7f1104d6a637","block_type":"box","text":"U.S. dollar-denominated commercial paper of a foreign issuer.","page_number":151,"box":{"x":117,"y":748,"width":460,"height":12}},{"id":"2d145f8e-d8fe-4da8-a1b3-0c67eef23cdf","block_type":"box","text":"Money Market Securities.","page_number":151,"box":{"x":116,"y":782,"width":201,"height":12}},{"id":"275d2c7a-aaea-49f1-8366-2298aee62c1e","block_type":"box","text":"Certain Funds may invest in a broad range of short-term, high quality, U.S.","page_number":151,"box":{"x":323,"y":782,"width":553,"height":12}},{"id":"a8cf8d3d-7004-4a63-9167-274042570101","block_type":"box","text":"dollar-denominated instruments, such as government, bank, commercial and other obligations that are","page_number":151,"box":{"x":116,"y":797,"width":760,"height":12}},{"id":"34229167-d960-494d-9be3-8207de0baaf9","block_type":"box","text":"available in the money markets. In particular, the Funds may invest in:","page_number":151,"box":{"x":116,"y":813,"width":519,"height":12}},{"id":"d938ebf3-491a-433f-b259-26616b1da94a","block_type":"box","text":"(a) U.S. dollar-denominated obligations issued or supported by the credit of U.S. or foreign banks","page_number":151,"box":{"x":150,"y":846,"width":735,"height":12}},{"id":"8c762216-2a40-49cd-8813-80feafb40fcd","block_type":"box","text":"or savings institutions with total assets in excess of $1 billion (including obligations of foreign","page_number":151,"box":{"x":184,"y":861,"width":690,"height":13}},{"id":"bcda430d-a97f-4669-9be1-e123263c55ec","block_type":"box","text":"branches of such banks);","page_number":151,"box":{"x":184,"y":877,"width":192,"height":12}},{"id":"9770f5a3-eaa2-48b8-8b51-0ec330f1cba9","block_type":"box","text":"II-64","page_number":151,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f3d33b45-c3ae-42ca-a3c2-45fc5fb5c394","block_type":"box","text":"NM1026U-6030748-151/260","page_number":151,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"928f99c3-d68c-4b9c-a579-2891c4e1aa1c","block_type":"box","text":"(b) high quality commercial paper and other obligations issued or guaranteed by U.S. and foreign","page_number":152,"box":{"x":150,"y":87,"width":734,"height":12}},{"id":"b25165ac-dcbf-4ceb-8c41-96c9452ec57b","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":152,"box":{"x":184,"y":102,"width":692,"height":13}},{"id":"919ef518-9e99-4a8a-b30f-11dedf511d26","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":152,"box":{"x":184,"y":118,"width":687,"height":12}},{"id":"96c533b6-94fa-4217-b506-52c233f06d11","block_type":"box","text":"(at the time of purchase) A or higher by those rating agencies;","page_number":152,"box":{"x":184,"y":134,"width":465,"height":12}},{"id":"5efc7f1f-8535-4b28-a220-67da6ec8524b","block_type":"box","text":"(c) unrated notes, paper and other instruments that are of comparable quality to the instruments","page_number":152,"box":{"x":150,"y":157,"width":726,"height":12}},{"id":"3f732649-1153-4d49-bb55-254e07333eb4","block_type":"box","text":"described in (b) above as determined by the Fund’s Manager;","page_number":152,"box":{"x":184,"y":172,"width":463,"height":12}},{"id":"bd0fee7e-e8f2-41f0-b17a-837e9b87ed32","block_type":"box","text":"(d) asset-backed securities (including interests in pools of assets such as mortgages, installment","page_number":152,"box":{"x":150,"y":196,"width":730,"height":12}},{"id":"595b5a9b-96aa-4ebb-81c1-cede40201837","block_type":"box","text":"purchase obligations and credit card receivables);","page_number":152,"box":{"x":184,"y":211,"width":374,"height":12}},{"id":"b6652d54-0985-4eaa-b0fe-bc937b4dc6de","block_type":"box","text":"(e) securities issued or guaranteed as to principal and interest by the U.S. Government or by its","page_number":152,"box":{"x":150,"y":234,"width":722,"height":12}},{"id":"b233c90a-ea3e-47ce-af86-e88e452f4cc2","block_type":"box","text":"agencies or authorities and related custodial receipts;","page_number":152,"box":{"x":184,"y":250,"width":401,"height":12}},{"id":"9f3a7074-8c17-44a9-ae08-ff463bd47c82","block_type":"box","text":"(f) dollar-denominated securities issued or guaranteed by foreign governments or their political","page_number":152,"box":{"x":150,"y":273,"width":719,"height":12}},{"id":"7c987f08-235d-4075-8be6-0403fb0b2530","block_type":"box","text":"subdivisions, agencies or authorities;","page_number":152,"box":{"x":184,"y":289,"width":279,"height":12}},{"id":"27dd5d67-0bf5-4704-8b4c-55550034b573","block_type":"box","text":"(g) funding agreements issued by highly-rated U.S. insurance companies;","page_number":152,"box":{"x":150,"y":312,"width":561,"height":12}},{"id":"86422a6a-ad01-4ac4-a768-a90f05df3b26","block_type":"box","text":"(h) securities issued or guaranteed by state or local governmental bodies;","page_number":152,"box":{"x":150,"y":335,"width":560,"height":12}},{"id":"22652985-67d9-485f-98f9-d4c4f37b8044","block_type":"box","text":"(i) repurchase agreements relating to the above instruments;","page_number":152,"box":{"x":150,"y":358,"width":469,"height":12}},{"id":"578f0f7a-69c2-4041-aea1-fcd463832866","block_type":"box","text":"(j) municipal bonds and notes whose principal and interest payments are guaranteed by the U.S.","page_number":152,"box":{"x":150,"y":382,"width":736,"height":12}},{"id":"9663a600-51fe-43f9-89c0-1ea11d030ba6","block_type":"box","text":"Government or one of its agencies or authorities or which otherwise depend directly or","page_number":152,"box":{"x":184,"y":397,"width":646,"height":12}},{"id":"8ad8a4a4-381d-444f-9c37-9009bf81373c","block_type":"box","text":"indirectly on the credit of the United States;","page_number":152,"box":{"x":184,"y":413,"width":325,"height":12}},{"id":"78ea6ba4-3175-4705-a0b8-1aab1901aa9a","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":152,"box":{"x":150,"y":436,"width":730,"height":12}},{"id":"272c300a-bdac-423d-ad87-a84b9ab08dd0","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":152,"box":{"x":184,"y":451,"width":563,"height":12}},{"id":"6aed4f97-6a1f-4cc4-b56f-0fc09257b58e","block_type":"box","text":"(l) tax-exempt commercial paper and similar debt instruments rated Prime-2 or higher by","page_number":152,"box":{"x":150,"y":475,"width":675,"height":12}},{"id":"827fde90-7b68-4f33-a8c8-a74c9ee44191","block_type":"box","text":"Moody’s, A-2 or higher by S&P, or F-2 or higher by Fitch;","page_number":152,"box":{"x":184,"y":490,"width":428,"height":12}},{"id":"78b4e9a0-8dd8-48a0-be2f-95b3a0176fec","block_type":"box","text":"(m) municipal bonds rated A or higher by Moody’s, S&P or Fitch;","page_number":152,"box":{"x":150,"y":513,"width":488,"height":12}},{"id":"d1a4a3b0-9d62-49f2-bd3c-ede790432923","block_type":"box","text":"(n) unrated notes, paper or other instruments that are of comparable quality to the instruments","page_number":152,"box":{"x":150,"y":537,"width":713,"height":12}},{"id":"d8875e27-8077-49d0-9269-15625c741b7d","block_type":"box","text":"described above, as determined by the Fund’s Manager under guidelines established by the","page_number":152,"box":{"x":184,"y":552,"width":688,"height":12}},{"id":"87e621ce-b71e-4b9c-8cdd-f43c0537c5e8","block_type":"box","text":"Board; and","page_number":152,"box":{"x":184,"y":568,"width":86,"height":11}},{"id":"75c61038-9c4a-465d-b676-b6a2d9edbf8f","block_type":"box","text":"(o) municipal bonds and notes which are guaranteed as to principal and interest by the U.S.","page_number":152,"box":{"x":150,"y":591,"width":693,"height":12}},{"id":"2727b413-5c97-426b-89c9-8db30cebc353","block_type":"box","text":"Government or an agency or instrumentality thereof or which otherwise depend directly or","page_number":152,"box":{"x":184,"y":606,"width":671,"height":12}},{"id":"8d6fcac6-f157-44a6-8665-3b3d6d799e37","block_type":"box","text":"indirectly on the credit of the United States.","page_number":152,"box":{"x":184,"y":622,"width":325,"height":12}},{"id":"99b26ccf-84ce-484f-b704-35a3658529b0","block_type":"box","text":"Mortgage-Related Securities.","page_number":152,"box":{"x":116,"y":653,"width":236,"height":12}},{"id":"cd489951-4d8f-4cc3-9a1d-be15a6f229ff","block_type":"box","text":"Mortgage-Backed Securities.","page_number":152,"box":{"x":116,"y":676,"width":214,"height":12}},{"id":"cd3af016-f7bd-4d3f-b10c-d7d6da7b59b4","block_type":"box","text":"Mortgage-backed securities represent interests in pools of mortgages in","page_number":152,"box":{"x":338,"y":676,"width":532,"height":12}},{"id":"fae71950-e453-42a4-8b26-20af9b552d15","block_type":"box","text":"which payments of both principal and interest on the securities are generally made monthly, in effect","page_number":152,"box":{"x":116,"y":692,"width":744,"height":12}},{"id":"c9172834-ad2e-40e7-b917-1a153ea01018","block_type":"box","text":"“passing through” monthly payments made by borrowers on the residential or commercial mortgage","page_number":152,"box":{"x":116,"y":707,"width":739,"height":12}},{"id":"582300aa-fc43-4bac-8676-e6d2612a7350","block_type":"box","text":"loans that underlie the securities (net of any fees paid to the issuer or guarantor of the securities).","page_number":152,"box":{"x":117,"y":723,"width":722,"height":12}},{"id":"f687de17-e417-4bd5-91d5-40c0fe6746e6","block_type":"box","text":"Mortgage-backed securities differ from other forms of debt securities, which normally provide for","page_number":152,"box":{"x":117,"y":738,"width":713,"height":12}},{"id":"b08b87bc-7188-4e80-93e4-4c1dc2b6564a","block_type":"box","text":"periodic payment of interest in fixed amounts with principal payments at maturity or specified call","page_number":152,"box":{"x":117,"y":754,"width":715,"height":12}},{"id":"e8f14516-1537-49d7-9351-c22d3f286f1c","block_type":"box","text":"dates.","page_number":152,"box":{"x":116,"y":769,"width":44,"height":10}},{"id":"42a9a179-d07c-426c-96a7-7cf4b52051e9","block_type":"box","text":"Mortgage-backed securities are subject to the general risks associated with investing in real estate","page_number":152,"box":{"x":117,"y":800,"width":731,"height":12}},{"id":"c864a76e-a5d4-4049-ac3d-ed295b331c40","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":152,"box":{"x":116,"y":816,"width":718,"height":12}},{"id":"57d86ba6-593f-47b2-9751-58d2267333f9","block_type":"box","text":"mortgages relates declines. In addition, investments in mortgage-backed securities involve certain","page_number":152,"box":{"x":117,"y":831,"width":732,"height":12}},{"id":"eea14d66-0771-40c3-88e9-800f00a7d862","block_type":"box","text":"specific risks. These risks include the failure of a party to meet its commitments under the related","page_number":152,"box":{"x":116,"y":847,"width":726,"height":12}},{"id":"a694c7a9-6eb4-47bd-bb92-ff11d2748eeb","block_type":"box","text":"operative documents, adverse interest rate changes and the effects of prepayments on mortgage cash","page_number":152,"box":{"x":116,"y":862,"width":767,"height":12}},{"id":"ac941268-04c4-4b5d-bc87-ce8914ae5dc5","block_type":"box","text":"flows. Mortgage-backed securities are “pass-through” securities, meaning that principal and interest","page_number":152,"box":{"x":116,"y":878,"width":744,"height":12}},{"id":"d7266f52-c0b9-4bd1-9aab-6766a8df9017","block_type":"box","text":"II-65","page_number":152,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"3803683f-4180-4ee4-aecc-8cc812bb522a","block_type":"box","text":"NM1026U-6030748-152/260","page_number":152,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ec376466-a286-4878-aad0-a31066d22356","block_type":"box","text":"payments made by the borrower on the underlying mortgages are passed through to a Fund.","page_number":153,"box":{"x":117,"y":87,"width":693,"height":12}},{"id":"287bfca8-e7a1-4568-9c3b-1bd1e3ed00d4","block_type":"box","text":"Accordingly, the value of mortgage-backed securities in which a Fund invests may be particularly","page_number":153,"box":{"x":116,"y":102,"width":725,"height":13}},{"id":"67b477b0-3790-46cd-af49-cccbf5f9a0c0","block_type":"box","text":"sensitive to changes in prevailing interest rates, and, like other fixed income investments, the ability of","page_number":153,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"ca9e98f4-5b87-4e9c-b1ee-d35eadc467fd","block_type":"box","text":"a Fund to utilize these instruments successfully may depend in part upon the ability of the Manager to","page_number":153,"box":{"x":116,"y":134,"width":760,"height":12}},{"id":"8b0d3b72-eb35-44db-87de-2eefe4df7915","block_type":"box","text":"forecast interest rates and other economic factors correctly. The value of mortgage-backed securities,","page_number":153,"box":{"x":116,"y":149,"width":761,"height":12}},{"id":"e717c39e-1acb-457c-82a9-c5c67a895272","block_type":"box","text":"like that of traditional fixed-income securities, typically increases when interest rates fall and decreases","page_number":153,"box":{"x":117,"y":165,"width":768,"height":12}},{"id":"4ae09380-5cf5-49b7-bbce-38713efe0195","block_type":"box","text":"when interest rates rise. However, mortgage-backed securities differ from traditional fixed-income","page_number":153,"box":{"x":116,"y":180,"width":729,"height":12}},{"id":"7d04b530-84a4-4f81-90ed-68967e5ccbc2","block_type":"box","text":"securities because of their potential for prepayment without penalty. The price paid by a Fund for its","page_number":153,"box":{"x":116,"y":196,"width":745,"height":12}},{"id":"ada2be8a-9018-49c3-af54-eb274a944b06","block_type":"box","text":"mortgage-backed securities, the yield the Fund expects to receive from such securities and the","page_number":153,"box":{"x":117,"y":211,"width":709,"height":12}},{"id":"55039920-024d-4524-bada-ff2e336ef251","block_type":"box","text":"weighted average life of the securities are based on a number of factors, including the anticipated rate","page_number":153,"box":{"x":116,"y":227,"width":762,"height":12}},{"id":"f400d810-36b3-4013-9449-0e9b8767eeb7","block_type":"box","text":"of prepayment of the underlying mortgages. In a period of declining interest rates, borrowers may","page_number":153,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"3ca3986d-35db-46f5-9047-c967ed8d5945","block_type":"box","text":"prepay the underlying mortgages more quickly than anticipated, thereby reducing the yield to maturity","page_number":153,"box":{"x":117,"y":258,"width":757,"height":12}},{"id":"d56fd7d7-d2b5-45db-944c-cc69c08b2d20","block_type":"box","text":"and the average life of the mortgage-backed securities. Moreover, when a Fund reinvests the proceeds","page_number":153,"box":{"x":116,"y":273,"width":772,"height":12}},{"id":"393697c5-83e0-4860-9e43-20ab8eaae3ee","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":153,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"39faf4c2-87ed-47a7-bdd4-e34a152b4604","block_type":"box","text":"on the security that was prepaid.","page_number":153,"box":{"x":116,"y":304,"width":247,"height":12}},{"id":"ca7a6ca2-9ce5-4481-a0c6-ff50e8303cba","block_type":"box","text":"To the extent that a Fund purchases mortgage-backed securities at a premium, mortgage foreclosures","page_number":153,"box":{"x":116,"y":335,"width":766,"height":12}},{"id":"39d3d082-349d-449e-8f61-b6aca492007f","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":153,"box":{"x":116,"y":351,"width":758,"height":12}},{"id":"57c47a0d-538c-4e1f-8221-d7f5043fa657","block_type":"box","text":"securities at a discount, both scheduled payments of principal and unscheduled prepayments will","page_number":153,"box":{"x":116,"y":366,"width":726,"height":12}},{"id":"bc89983e-3206-446f-be4b-4ecaa0aedc08","block_type":"box","text":"increase current and total returns and will accelerate the recognition of income, which, when distributed","page_number":153,"box":{"x":117,"y":382,"width":771,"height":12}},{"id":"652d6d66-2489-44f5-b373-2808761645b3","block_type":"box","text":"to shareholders, will be taxable as ordinary income. In a period of rising interest rates, prepayments of","page_number":153,"box":{"x":116,"y":397,"width":762,"height":12}},{"id":"03e27faa-734b-4acb-8f55-a160dd958a77","block_type":"box","text":"the underlying mortgages may occur at a slower than expected rate, creating maturity extension risk.","page_number":153,"box":{"x":116,"y":413,"width":753,"height":12}},{"id":"467fba80-6edd-49bf-8a4a-a7c193c9189a","block_type":"box","text":"This particular risk may effectively change a security that was considered short- or intermediate-term at","page_number":153,"box":{"x":116,"y":428,"width":771,"height":12}},{"id":"f455af10-8486-43e6-a23d-06e202476f13","block_type":"box","text":"the time of purchase into a long-term security. Since the value of long-term securities generally","page_number":153,"box":{"x":116,"y":444,"width":709,"height":12}},{"id":"6361235b-5016-4f78-9431-3d0c66dc3fa4","block_type":"box","text":"fluctuates more widely in response to changes in interest rates than that of shorter-term securities,","page_number":153,"box":{"x":116,"y":459,"width":736,"height":12}},{"id":"b27c0646-65c8-4505-adce-380e911b2369","block_type":"box","text":"maturity extension risk could increase the inherent volatility of the Fund. Under certain interest rate and","page_number":153,"box":{"x":117,"y":475,"width":769,"height":12}},{"id":"b085373d-c7f8-45bb-a357-50d94da58e6c","block_type":"box","text":"prepayment scenarios, a Fund may fail to recoup fully its investment in mortgage-backed securities","page_number":153,"box":{"x":117,"y":490,"width":740,"height":12}},{"id":"74a98c47-c612-4eb4-b0e2-46d7d101438f","block_type":"box","text":"notwithstanding any direct or indirect governmental or agency guarantee.","page_number":153,"box":{"x":117,"y":506,"width":547,"height":12}},{"id":"5525dcba-ce9f-42f2-9cd0-182328032d2b","block_type":"box","text":"There are currently three types of mortgage pass-through securities: (1) those issued by the U.S.","page_number":153,"box":{"x":116,"y":537,"width":725,"height":12}},{"id":"64ca34f9-e819-412d-8e19-9a0ad73f7ae3","block_type":"box","text":"Government or one of its agencies or instrumentalities, such as the Government National Mortgage","page_number":153,"box":{"x":117,"y":552,"width":742,"height":12}},{"id":"f54ab702-c0f6-4467-a8a7-168cd9977e89","block_type":"box","text":"Association (“Ginnie Mae”), the Federal National Mortgage Association (“Fannie Mae”) and the Federal","page_number":153,"box":{"x":116,"y":568,"width":770,"height":12}},{"id":"82606334-34a7-4aa6-9b16-7cb2eab1bb52","block_type":"box","text":"Home Loan Mortgage Corporation (“Freddie Mac”); (2) those issued by private issuers that represent","page_number":153,"box":{"x":117,"y":583,"width":753,"height":12}},{"id":"fd9bed93-8fe0-4607-bf52-1a3d58418ecc","block_type":"box","text":"an interest in or are collateralized by pass-through securities issued or guaranteed by the U.S.","page_number":153,"box":{"x":116,"y":599,"width":704,"height":12}},{"id":"9605fbc0-4b54-42b1-b29e-797879b4b5aa","block_type":"box","text":"Government or one of its agencies or instrumentalities; and (3) those issued by private issuers that","page_number":153,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"ea31ef9a-f46b-44a3-9449-5cfbffcafb87","block_type":"box","text":"represent an interest in or are collateralized by whole mortgage loans or pass-through securities","page_number":153,"box":{"x":117,"y":630,"width":717,"height":12}},{"id":"586c5433-fb96-4401-b492-dceee319f03c","block_type":"box","text":"without a government guarantee but that usually have some form of private credit enhancement.","page_number":153,"box":{"x":116,"y":645,"width":720,"height":12}},{"id":"09d4b8cb-dbec-4cca-bcba-989c6a4644c4","block_type":"box","text":"Ginnie Mae is a wholly owned U.S. Government corporation within the Department of Housing and","page_number":153,"box":{"x":117,"y":676,"width":730,"height":12}},{"id":"af921448-958c-461f-86fc-1e1d3bdf2278","block_type":"box","text":"Urban Development. Ginnie Mae is authorized to guarantee, with the full faith and credit of the U.S.","page_number":153,"box":{"x":117,"y":692,"width":735,"height":12}},{"id":"8eb41ff3-bc1a-4f02-bf79-05115f59f9ec","block_type":"box","text":"Government, the timely payment of principal and interest on securities issued by the institutions","page_number":153,"box":{"x":117,"y":707,"width":707,"height":12}},{"id":"f9cb8634-483c-48ea-bdd7-877c50dd4c92","block_type":"box","text":"approved by Ginnie Mae (such as savings and loan institutions, commercial banks and mortgage","page_number":153,"box":{"x":116,"y":723,"width":720,"height":12}},{"id":"5094b36a-30e6-4651-9549-aa037cb4bfad","block_type":"box","text":"banks), and backed by pools of Federal Housing Administration (“FHA”)-insured or Veterans’","page_number":153,"box":{"x":117,"y":738,"width":687,"height":12}},{"id":"ffd211eb-f194-4362-a61c-c8325bcc1f54","block_type":"box","text":"Administration (“VA”)-guaranteed mortgages. Pass-through certificates guaranteed by Ginnie Mae","page_number":153,"box":{"x":116,"y":754,"width":728,"height":12}},{"id":"fd07a7d0-8300-42fb-a903-d9646523f0ff","block_type":"box","text":"(such certificates are also known as “Ginnie Maes”) are guaranteed as to the timely payment of","page_number":153,"box":{"x":117,"y":769,"width":707,"height":12}},{"id":"359e2cc4-f2c3-4ef6-9372-a4964dea58ff","block_type":"box","text":"principal and interest by Ginnie Mae, whose guarantee is backed by the full faith and credit of the","page_number":153,"box":{"x":117,"y":785,"width":720,"height":12}},{"id":"b171e753-81fd-477e-bc7a-dd120279743d","block_type":"box","text":"United States. Ginnie Mae certificates also are supported by the authority of Ginnie Mae to borrow","page_number":153,"box":{"x":117,"y":800,"width":729,"height":12}},{"id":"0508d578-05fd-4e3f-8118-97a02b1e5f70","block_type":"box","text":"funds from the U.S. Treasury Department to make payments under its guarantee. Mortgage-related","page_number":153,"box":{"x":116,"y":816,"width":737,"height":12}},{"id":"c928cfb6-644e-4abf-9607-8154da87991c","block_type":"box","text":"securities issued by Fannie Mae include Fannie Mae guaranteed Mortgage Pass-Through Certificates","page_number":153,"box":{"x":116,"y":831,"width":761,"height":12}},{"id":"07a57d23-9f82-4208-a00d-25987926a847","block_type":"box","text":"(also known as “Fannie Maes”), which are guaranteed as to timely payment of principal and interest by","page_number":153,"box":{"x":117,"y":847,"width":766,"height":12}},{"id":"39ab33e1-10db-4141-ba51-df3e6360d31e","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":153,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"c3025904-6912-4f68-ad15-3cfc43dc5997","block_type":"box","text":"supported by the right of Fannie Mae to borrow from the U.S. Treasury Department. Fannie Mae was","page_number":153,"box":{"x":116,"y":878,"width":755,"height":12}},{"id":"557af74f-8127-473c-b922-592d5b0a7c63","block_type":"box","text":"II-66","page_number":153,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"84eab00c-e25d-451a-a340-b8e2379e06ca","block_type":"box","text":"NM1026U-6030748-153/260","page_number":153,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"13faee0c-dd3a-416f-b579-7a6cae2ed764","block_type":"box","text":"established as a federal agency in 1938 and in 1968 was chartered by Congress as a private","page_number":154,"box":{"x":116,"y":87,"width":695,"height":12}},{"id":"5e4be5f5-be0f-4517-8ae3-7095b80cccf0","block_type":"box","text":"shareholder-owned company. Mortgage-related securities issued by Freddie Mac include Freddie Mac","page_number":154,"box":{"x":116,"y":103,"width":765,"height":12}},{"id":"f9faddbc-10e2-40b5-97c1-f2d985fe4c3d","block_type":"box","text":"Mortgage Participation Certificates (also known as “Freddie Macs” or “PCs”). Freddie Mac is a","page_number":154,"box":{"x":117,"y":118,"width":702,"height":12}},{"id":"93b86e5d-3bf3-4c13-b70f-1b4bd9daa403","block_type":"box","text":"stockholder-owned corporation chartered by Congress in 1970. Freddie Macs are not guaranteed by","page_number":154,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"ebfabf14-fedd-4611-8bcb-033e33bef84d","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":154,"box":{"x":116,"y":149,"width":768,"height":12}},{"id":"34e642cd-02f1-4f10-8529-0938034d9898","block_type":"box","text":"United States or of any Federal Home Loan Bank. Freddie Macs entitle the holder to timely payment of","page_number":154,"box":{"x":117,"y":165,"width":767,"height":12}},{"id":"6f06a857-2fb1-498c-bb8a-6b5790789ccb","block_type":"box","text":"interest, which is guaranteed by Freddie Mac. Freddie Mac guarantees either ultimate collection or","page_number":154,"box":{"x":117,"y":180,"width":735,"height":12}},{"id":"53093566-c44e-46d5-874a-8064b235cb97","block_type":"box","text":"timely payment of all principal payments on the underlying mortgage loans. While Freddie Mac","page_number":154,"box":{"x":116,"y":196,"width":707,"height":12}},{"id":"b5e129d8-76aa-45c2-960e-38eaf7bb9c74","block_type":"box","text":"generally does not guarantee timely payment of principal, Freddie Mac may remit the amount due on","page_number":154,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"f5b55feb-f0e4-46ae-9e2a-f469c0ac5a7d","block_type":"box","text":"account of its guarantee of ultimate payment of principal at any time after default on an underlying","page_number":154,"box":{"x":116,"y":227,"width":732,"height":12}},{"id":"718c7ad0-2185-479b-b379-97337f8a5602","block_type":"box","text":"mortgage, but in no event later than one year after it becomes payable.","page_number":154,"box":{"x":117,"y":242,"width":532,"height":12}},{"id":"ac79aecc-9527-4797-9221-27ca727b3bff","block_type":"box","text":"Private mortgage pass-through securities are structured similarly to Ginnie Mae, Fannie Mae, and","page_number":154,"box":{"x":117,"y":273,"width":730,"height":12}},{"id":"14434c9e-36ab-4263-87d2-18ae09fd2a52","block_type":"box","text":"Freddie Mac mortgage pass-through securities and are issued by originators of and investors in","page_number":154,"box":{"x":117,"y":289,"width":714,"height":12}},{"id":"60477bc6-4dff-47e2-83ad-37dba18bd9d5","block_type":"box","text":"mortgage loans, including depository institutions, mortgage banks, investment banks and special","page_number":154,"box":{"x":117,"y":304,"width":722,"height":12}},{"id":"cd527116-004d-4e56-93b7-2adefb6c10b2","block_type":"box","text":"purpose subsidiaries of the foregoing.","page_number":154,"box":{"x":117,"y":320,"width":284,"height":12}},{"id":"f2ecaa86-eb02-4166-bf84-cbaf1dffc482","block_type":"box","text":"Pools created by private mortgage pass-through issuers generally offer a higher rate of interest than","page_number":154,"box":{"x":117,"y":351,"width":747,"height":12}},{"id":"cb6dabc1-68ee-45d0-8049-f0d16a953eb5","block_type":"box","text":"government and government-related pools because there are no direct or indirect government or","page_number":154,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"f27b653a-3ef0-42c5-873e-9a2d91cabedd","block_type":"box","text":"agency guarantees of payments in the private pools. However, timely payment of interest and principal","page_number":154,"box":{"x":116,"y":382,"width":767,"height":12}},{"id":"cbaa74c5-028c-4bb1-b7ee-4ca54c47e1b3","block_type":"box","text":"of these pools may be supported by various forms of insurance or guarantees, including individual","page_number":154,"box":{"x":116,"y":397,"width":732,"height":12}},{"id":"694b11eb-09e2-4edc-8b9e-f41f2af9416d","block_type":"box","text":"loan, title, pool and hazard insurance and letters of credit. The insurance and guarantees are issued by","page_number":154,"box":{"x":117,"y":413,"width":769,"height":12}},{"id":"bc4d2899-c040-44b1-afc6-eddb9921efad","block_type":"box","text":"governmental entities, private insurers and the mortgage poolers. The insurance and guarantees and","page_number":154,"box":{"x":116,"y":428,"width":756,"height":12}},{"id":"087bde5d-f4a3-4653-945a-5c170f7ffdaf","block_type":"box","text":"the creditworthiness of the issuers thereof will be considered in determining whether a mortgage","page_number":154,"box":{"x":116,"y":444,"width":720,"height":12}},{"id":"ec677545-c607-4180-8e11-b9d9a469056e","block_type":"box","text":"related security meets a Fund’s investment quality standards. There can be no assurance that the","page_number":154,"box":{"x":117,"y":459,"width":731,"height":12}},{"id":"83f9fd14-cee7-466a-9c7d-f61da967a217","block_type":"box","text":"private insurers or guarantors can meet their obligations under the insurance policies or guarantee","page_number":154,"box":{"x":117,"y":475,"width":734,"height":12}},{"id":"86009bd5-3f75-4ffc-b8d7-4a426e6ae564","block_type":"box","text":"arrangements. Private mortgage pass-through securities may be bought without insurance or","page_number":154,"box":{"x":116,"y":490,"width":696,"height":12}},{"id":"bb939192-c0ed-4f4b-81a0-ee1e3888eeb7","block_type":"box","text":"guarantees if, through an examination of the loan experience and practices of the originator/servicers","page_number":154,"box":{"x":116,"y":506,"width":756,"height":12}},{"id":"6878d1e2-9791-41ab-ac37-b5de58a5d31b","block_type":"box","text":"and poolers, the Manager determines that the securities meet a Fund’s quality standards. Any","page_number":154,"box":{"x":116,"y":521,"width":703,"height":12}},{"id":"a4b75c99-6a00-4577-a268-f97a690bab48","block_type":"box","text":"mortgage-related securities that are issued by private issuers have some exposure to subprime loans","page_number":154,"box":{"x":117,"y":537,"width":757,"height":12}},{"id":"6ab51245-fd5d-4f3b-ae86-a004eae6eb8e","block_type":"box","text":"as well as to the mortgage and credit markets generally.","page_number":154,"box":{"x":116,"y":552,"width":422,"height":12}},{"id":"45a2026a-637f-438e-b4ec-93934df74ef4","block_type":"box","text":"In addition, mortgage-related securities that are issued by private issuers are not subject to the","page_number":154,"box":{"x":117,"y":583,"width":707,"height":12}},{"id":"abd1817f-66f9-496d-99cb-7551ae9a3bfa","block_type":"box","text":"underwriting requirements for the underlying mortgages that are applicable to those mortgage-related","page_number":154,"box":{"x":117,"y":599,"width":757,"height":12}},{"id":"700e0828-51fe-44e2-beb3-586a2a353890","block_type":"box","text":"securities that have a government or government-sponsored entity guarantee. As a result, the","page_number":154,"box":{"x":116,"y":614,"width":702,"height":12}},{"id":"ab420535-9aab-4997-94bb-b8ebfbc94a85","block_type":"box","text":"mortgage loans underlying private mortgage-related securities may, and frequently do, have less","page_number":154,"box":{"x":117,"y":630,"width":722,"height":12}},{"id":"486456eb-100f-41c7-b041-6ab4d20064ea","block_type":"box","text":"favorable collateral, credit risk or other underwriting characteristics than government or government","page_number":154,"box":{"x":116,"y":645,"width":743,"height":12}},{"id":"36027198-c6b9-4c6c-a4a0-4ae201fb6858","block_type":"box","text":"sponsored mortgage-related securities and have wider variances in a number of terms including","page_number":154,"box":{"x":116,"y":661,"width":712,"height":12}},{"id":"c2be2ccc-8c94-41a5-bb17-3ff0e9883aa6","block_type":"box","text":"interest rate, term, size, purpose and borrower characteristics. Privately issued pools more frequently","page_number":154,"box":{"x":117,"y":676,"width":750,"height":12}},{"id":"720689c5-56ef-45b4-9c71-e542918552ca","block_type":"box","text":"include second mortgages, high loan-to-value mortgages and manufactured housing loans. The","page_number":154,"box":{"x":117,"y":692,"width":709,"height":12}},{"id":"a4d6103d-b693-4631-895a-d081b0d12bf6","block_type":"box","text":"coupon rates and maturities of the underlying mortgage loans in a private-label mortgage-related","page_number":154,"box":{"x":116,"y":707,"width":717,"height":12}},{"id":"f29e9ff6-fb69-4e25-9812-a48a8b7ab1e3","block_type":"box","text":"securities pool may vary to a greater extent than those included in a government guaranteed pool, and","page_number":154,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"0bbc4dab-3149-4887-920c-725d8ae78d25","block_type":"box","text":"the pool may include subprime mortgage loans. Subprime loans refer to loans made to borrowers with","page_number":154,"box":{"x":116,"y":738,"width":757,"height":12}},{"id":"45e1e4d6-f3cb-4b3d-8d16-b90c04a474b3","block_type":"box","text":"weakened credit histories or with a lower capacity to make timely payments on their loans. For these","page_number":154,"box":{"x":116,"y":754,"width":746,"height":12}},{"id":"e484d6d4-44ec-4198-9e41-eeecbd7b0226","block_type":"box","text":"reasons, the loans underlying these securities have had in many cases higher default rates than those","page_number":154,"box":{"x":117,"y":769,"width":758,"height":12}},{"id":"fe074f80-5655-4c79-8bbe-5ae8e408b3df","block_type":"box","text":"loans that meet government underwriting requirements.","page_number":154,"box":{"x":117,"y":785,"width":410,"height":12}},{"id":"f02f9737-ef47-47fc-ae53-4df298da97fa","block_type":"box","text":"The risk of non-payment is greater for mortgage-related securities that are backed by mortgage pools","page_number":154,"box":{"x":116,"y":816,"width":753,"height":12}},{"id":"1f286cc5-334f-47a7-af32-a3ab708464ba","block_type":"box","text":"that contain subprime loans, but a level of risk exists for all loans. Market factors adversely affecting","page_number":154,"box":{"x":116,"y":831,"width":746,"height":12}},{"id":"74996269-dbc2-4e9d-8f59-4ded7cf30832","block_type":"box","text":"mortgage loan repayments may include a general economic turndown, high unemployment, a general","page_number":154,"box":{"x":117,"y":847,"width":759,"height":12}},{"id":"04333645-2683-4330-a583-1e3c985c0823","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":154,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"3e967cc9-f2aa-4c7f-b355-41ede3a8d1c1","block_type":"box","text":"rates resulting in higher mortgage payments by holders of adjustable rate mortgages.","page_number":154,"box":{"x":117,"y":878,"width":637,"height":12}},{"id":"8cfbf5b6-d147-41ce-8324-0be4595ecc3d","block_type":"box","text":"II-67","page_number":154,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c703d6f7-b657-4839-9aa2-49f70fc7503d","block_type":"box","text":"NM1026U-6030748-154/260","page_number":154,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0bde2735-c320-433d-88b0-162ec4367827","block_type":"box","text":"Privately issued mortgage-related securities are not traded on an exchange and there may be a limited","page_number":155,"box":{"x":117,"y":87,"width":767,"height":12}},{"id":"5fd1563a-5ad4-4f20-8fdb-6ddc9a66d4f3","block_type":"box","text":"market for the securities, especially when there is a perceived weakness in the mortgage and real","page_number":155,"box":{"x":117,"y":102,"width":729,"height":13}},{"id":"005d5128-16e3-4eb6-99df-278b0c0a02f4","block_type":"box","text":"estate market sectors. Without an active trading market, mortgage-related securities held in a Fund’s","page_number":155,"box":{"x":116,"y":118,"width":753,"height":12}},{"id":"8dd8351c-cdb0-48da-9355-0415e8bdf21b","block_type":"box","text":"portfolio may be particularly difficult to value because of the complexities involved in assessing the","page_number":155,"box":{"x":117,"y":134,"width":734,"height":12}},{"id":"893825fc-173f-4e26-9b8c-9168717b2a49","block_type":"box","text":"value of the underlying mortgage loans.","page_number":155,"box":{"x":116,"y":149,"width":299,"height":12}},{"id":"058b3ed7-ff92-408d-8281-c7a4f2353419","block_type":"box","text":"Collateralized Mortgage Obligations (“CMOs”).","page_number":155,"box":{"x":117,"y":180,"width":343,"height":12}},{"id":"0aa4b64f-26e2-47c2-822e-ee7bb7ede569","block_type":"box","text":"CMOs are debt obligations collateralized by residential","page_number":155,"box":{"x":462,"y":180,"width":415,"height":12}},{"id":"7fd19f5c-be32-40cb-826e-7c04e6d62b84","block_type":"box","text":"or commercial mortgage loans or residential or commercial mortgage pass-through securities. Interest","page_number":155,"box":{"x":116,"y":196,"width":762,"height":12}},{"id":"a9964332-6196-492b-b83d-6c6a8cc6dfd9","block_type":"box","text":"and prepaid principal are generally paid monthly. CMOs may be collateralized by whole mortgage","page_number":155,"box":{"x":116,"y":211,"width":729,"height":12}},{"id":"70e71bfa-acf0-4ff7-8e2b-c303b5717cb6","block_type":"box","text":"loans or private mortgage pass-through securities but are more typically collateralized by portfolios of","page_number":155,"box":{"x":117,"y":227,"width":755,"height":12}},{"id":"5d1fe17e-a616-402b-a499-f1627834e81a","block_type":"box","text":"mortgage pass-through securities guaranteed by Ginnie Mae, Freddie Mac, or Fannie Mae. The issuer","page_number":155,"box":{"x":117,"y":242,"width":765,"height":12}},{"id":"17348ac2-3774-44f2-b7ba-d4bc1a543e6b","block_type":"box","text":"of a series of CMOs may elect to be treated as a Real Estate Mortgage Investment Conduit (“REMIC”).","page_number":155,"box":{"x":116,"y":258,"width":769,"height":12}},{"id":"496bbe09-645a-4946-8699-de1406b1bff6","block_type":"box","text":"All future references to CMOs also include REMICs.","page_number":155,"box":{"x":116,"y":273,"width":392,"height":10}},{"id":"83b2ae36-caac-446e-9696-1e12025fda5a","block_type":"box","text":"CMOs are structured into multiple classes, often referred to as a “tranche,” each issued at a specific","page_number":155,"box":{"x":117,"y":304,"width":746,"height":12}},{"id":"8f794822-1153-4136-be8e-66a34c5080a2","block_type":"box","text":"adjustable or fixed interest rate, and bearing a different stated maturity date and each must be fully","page_number":155,"box":{"x":116,"y":320,"width":738,"height":12}},{"id":"5991adeb-ff36-4608-ad01-98a93215b2d1","block_type":"box","text":"retired no later than its final distribution date. Actual maturity and average life will depend upon the","page_number":155,"box":{"x":117,"y":335,"width":734,"height":12}},{"id":"f056db57-5a77-45b6-abf2-f13c9a0ec915","block_type":"box","text":"prepayment experience of the collateral, which is ordinarily unrelated to the stated maturity date.","page_number":155,"box":{"x":117,"y":351,"width":719,"height":12}},{"id":"172f5fa7-8f5d-4134-aec0-095c72f5cc8a","block_type":"box","text":"CMOs often provide for a modified form of call protection through a de facto breakdown of the","page_number":155,"box":{"x":117,"y":366,"width":700,"height":12}},{"id":"80512d41-fb5a-4e56-aa2d-af6f34f956b4","block_type":"box","text":"underlying pool of mortgages according to how quickly the loans are repaid. Monthly payment of","page_number":155,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"25cd5027-abbc-40fa-b6b2-a9f8747a92d5","block_type":"box","text":"principal received from the pool of underlying mortgages, including prepayments, is first returned to","page_number":155,"box":{"x":117,"y":397,"width":740,"height":12}},{"id":"a2b7a3a8-edad-480f-a12a-a7c3225c643e","block_type":"box","text":"investors holding the shortest maturity class. Investors holding the longer maturity classes usually","page_number":155,"box":{"x":117,"y":413,"width":729,"height":12}},{"id":"12defa75-876f-4ca4-a00f-d36b6e5dc366","block_type":"box","text":"receive principal only after the first class has been retired. An investor may be partially protected","page_number":155,"box":{"x":117,"y":428,"width":719,"height":12}},{"id":"56788d97-7c66-4fbd-a2c3-3cbad38853eb","block_type":"box","text":"against a sooner than desired return of principal because of the sequential payments.","page_number":155,"box":{"x":116,"y":444,"width":640,"height":12}},{"id":"1f4da1cc-6ab1-4fdd-af39-2625d9e5350e","block_type":"box","text":"Certain issuers of CMOs are not considered investment companies pursuant to a rule adopted by the","page_number":155,"box":{"x":117,"y":475,"width":755,"height":12}},{"id":"81e66833-f6af-4114-87b9-f2325e61a182","block_type":"box","text":"Commission, and a Fund may invest in the securities of such issuers without the limitations imposed by","page_number":155,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"139fa9e9-ba5d-4a82-bbd0-503452bc8114","block_type":"box","text":"the Investment Company Act on investments by a Fund in other investment companies. In addition, in","page_number":155,"box":{"x":116,"y":506,"width":761,"height":12}},{"id":"96aea51a-b4a3-484f-835d-a0eb174680da","block_type":"box","text":"reliance on an earlier Commission interpretation, a Fund’s investments in certain other qualifying","page_number":155,"box":{"x":117,"y":521,"width":721,"height":12}},{"id":"080e3cb5-2c86-430e-80e8-59ee6328d362","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":155,"box":{"x":117,"y":537,"width":753,"height":12}},{"id":"b1e46e02-406b-44ce-89d3-856e0a4176ef","block_type":"box","text":"Company Act on acquiring interests in other investment companies. In order to be able to rely on the","page_number":155,"box":{"x":117,"y":552,"width":750,"height":12}},{"id":"9ddcf71b-491e-4849-9b79-b214b437c9fa","block_type":"box","text":"Commission’s interpretation, these CMOs must be unmanaged, fixed asset issuers, that: (1) invest","page_number":155,"box":{"x":117,"y":568,"width":736,"height":12}},{"id":"556efc20-500d-4e8b-8605-4b56843322c0","block_type":"box","text":"primarily in mortgage-backed securities; (2) do not issue redeemable securities; (3) operate under","page_number":155,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"7533012e-b812-4ad5-8e61-3da080caf715","block_type":"box","text":"general exemptive orders exempting them from all provisions of the Investment Company Act; and","page_number":155,"box":{"x":116,"y":599,"width":736,"height":12}},{"id":"e620133c-8be9-4ec7-bfeb-25a36f71dc25","block_type":"box","text":"(4) are not registered or regulated under the Investment Company Act as investment companies. To","page_number":155,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"63a32509-06dd-413e-b1c5-79df0e1fa722","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":155,"box":{"x":116,"y":630,"width":674,"height":12}},{"id":"f08f79c7-1cc7-43ca-bbac-e3f6c7c08a8b","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":155,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"f73da94a-f4e1-446e-91af-bf2d823910c3","block_type":"box","text":"acquire more than 3% of the voting securities of any single such entity.","page_number":155,"box":{"x":116,"y":661,"width":524,"height":12}},{"id":"fb10edda-1a85-4eed-93e5-69a24aed8804","block_type":"box","text":"A Fund may also invest in, among other things, parallel pay CMOs, sequential pay CMOs, and floating","page_number":155,"box":{"x":116,"y":692,"width":759,"height":12}},{"id":"6611cbbf-e9aa-4012-95fc-e404cae87711","block_type":"box","text":"rate CMOs. Parallel pay CMOs are structured to provide payments of principal on each payment date","page_number":155,"box":{"x":117,"y":707,"width":752,"height":12}},{"id":"6c375425-500e-4b96-b16f-667a326550f9","block_type":"box","text":"to more than one class, concurrently on a proportionate or disproportionate basis. These simultaneous","page_number":155,"box":{"x":116,"y":723,"width":761,"height":12}},{"id":"e74f7a42-9d02-4902-9afe-93aabd0d10ad","block_type":"box","text":"payments are taken into account in calculating the final distribution date of each class. Sequential pay","page_number":155,"box":{"x":117,"y":738,"width":754,"height":12}},{"id":"ff46945d-37e5-41d9-a424-53f0109c050a","block_type":"box","text":"CMOs generally pay principal to only one class at a time while paying interest to several classes. A","page_number":155,"box":{"x":117,"y":754,"width":734,"height":12}},{"id":"a5e23267-e8b5-49ef-a043-06f242ba12dd","block_type":"box","text":"wide variety of REMIC Certificates may be issued in the parallel pay or sequential pay structures.","page_number":155,"box":{"x":116,"y":769,"width":719,"height":12}},{"id":"026cf860-3856-42a3-95f9-fdc1d69a832c","block_type":"box","text":"These securities include accrual certificates (also known as “Z-Bonds”), which only accrue interest at a","page_number":155,"box":{"x":116,"y":785,"width":761,"height":12}},{"id":"a8273b94-55b5-48da-b79d-dd055b71b5ff","block_type":"box","text":"specified rate until all other certificates having an earlier final distribution date have been retired and","page_number":155,"box":{"x":116,"y":800,"width":740,"height":12}},{"id":"6453bdc7-41b7-40e9-9f0d-4bef83d2996d","block_type":"box","text":"are converted thereafter to an interest-paying security. Floating rate CMOs are securities whose","page_number":155,"box":{"x":116,"y":816,"width":712,"height":12}},{"id":"413803c7-5b22-418b-abbc-90eb33712e05","block_type":"box","text":"coupon rate fluctuates according to some formula related to an existing market index or rate. Typical","page_number":155,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"1f60976a-98cd-48cf-8e09-631ee0c9dd41","block_type":"box","text":"indices would include the eleventh district cost-of-funds index (“COFI”), one-year Treasury yields, and","page_number":155,"box":{"x":117,"y":847,"width":758,"height":12}},{"id":"9f7e8a40-0458-4b5b-9975-dd0decf0aa38","block_type":"box","text":"ten-year Treasury yields.","page_number":155,"box":{"x":116,"y":862,"width":190,"height":12}},{"id":"d3bae3a9-706a-41e3-a69c-c117c902d2a6","block_type":"box","text":"II-68","page_number":155,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1cf58631-48ee-401a-84fe-77847d4a1ec9","block_type":"box","text":"NM1026U-6030748-155/260","page_number":155,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1b7db209-c8f7-4663-9172-7bfdda7b5e02","block_type":"box","text":"Classes of CMOs also include planned amortization classes (“PACs”) and targeted amortization","page_number":156,"box":{"x":117,"y":87,"width":715,"height":12}},{"id":"94b1b562-a9ee-4f19-b1ea-f8ca41c9c3d6","block_type":"box","text":"classes (“TACs”). PAC bonds generally require payments of a specified amount of principal on each","page_number":156,"box":{"x":116,"y":102,"width":747,"height":13}},{"id":"0722bdd8-0ea0-4ed9-bf9b-144a733e56b4","block_type":"box","text":"payment date. The scheduled principal payments for PAC Certificates generally have the highest","page_number":156,"box":{"x":117,"y":118,"width":724,"height":12}},{"id":"f3f69398-ffaa-4650-a7ed-83f9c64e4daf","block_type":"box","text":"priority on each payment date after interest due has been paid to all classes entitled to receive interest","page_number":156,"box":{"x":117,"y":134,"width":764,"height":12}},{"id":"8ea65d7e-c106-4045-8cd9-7f6ff241b1a5","block_type":"box","text":"currently. Shortfalls, if any, are added to the amount payable on the next payment date. The PAC","page_number":156,"box":{"x":116,"y":149,"width":727,"height":12}},{"id":"e9c62481-4d7b-4806-b1b0-43335ecceb83","block_type":"box","text":"Certificate payment schedule is taken into account in calculating the final distribution date of each class","page_number":156,"box":{"x":117,"y":165,"width":770,"height":12}},{"id":"841696e6-cf84-41e8-be25-5527558a36f3","block_type":"box","text":"of PAC. In order to create PAC tranches, one or more tranches generally must be created that absorb","page_number":156,"box":{"x":116,"y":180,"width":761,"height":12}},{"id":"3dc1ef2a-636f-42c5-b699-d75a55b235ba","block_type":"box","text":"most of the volatility in the underlying mortgage assets. These tranches (often called “supports” or","page_number":156,"box":{"x":117,"y":196,"width":731,"height":12}},{"id":"d6ff7492-da73-4f55-9d43-c483bc0497bf","block_type":"box","text":"“companion” tranches) tend to have market prices and yields that are more volatile than the PAC","page_number":156,"box":{"x":116,"y":211,"width":723,"height":12}},{"id":"086e8c53-2d87-44f8-89d6-f984473906b6","block_type":"box","text":"classes.","page_number":156,"box":{"x":116,"y":227,"width":65,"height":9}},{"id":"df6f8fe9-9945-4b9a-9464-7ca1d39da659","block_type":"box","text":"TACs are similar to PACs in that they require that specified amounts of principal be applied on each","page_number":156,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"7086ba62-7452-4c85-9383-feae33f0aa93","block_type":"box","text":"payment date to one or more classes of REMIC Certificates. A PAC’s payment schedule, however,","page_number":156,"box":{"x":117,"y":273,"width":738,"height":12}},{"id":"f6386424-720c-437f-97bc-62776b38e839","block_type":"box","text":"remains in effect as long as prepayment rates on the underlying mortgages do not exceed certain","page_number":156,"box":{"x":117,"y":289,"width":728,"height":12}},{"id":"2fb7971b-4e01-4a36-bf5b-b1f7693816b2","block_type":"box","text":"ranges. In contrast, a TAC provides investors with protection, to a certain level, against either faster","page_number":156,"box":{"x":117,"y":304,"width":743,"height":12}},{"id":"d9bd460b-cf9c-47a0-90c7-f5b676cf4788","block_type":"box","text":"than expected or slower than expected prepayment rates, but not both. TACs thus provide more cash","page_number":156,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"c88de55a-5d70-4ca8-b83d-ac72be5330c2","block_type":"box","text":"flow stability than a regular sequential paying class, but less than a PAC. TACs also tend to have","page_number":156,"box":{"x":116,"y":335,"width":725,"height":12}},{"id":"b9a6095f-6172-4134-9ff9-87d6581ce047","block_type":"box","text":"market prices and yields that are more volatile than PACs.","page_number":156,"box":{"x":117,"y":351,"width":437,"height":12}},{"id":"21213604-7610-42e7-a691-104c30ae9b9e","block_type":"box","text":"Adjustable Rate Mortgage Securities.","page_number":156,"box":{"x":115,"y":382,"width":277,"height":12}},{"id":"fc5403cb-6bff-4d7c-ab35-fb0a944d5588","block_type":"box","text":"Adjustable rate mortgage securities (“ARMs”) are pass-through","page_number":156,"box":{"x":393,"y":382,"width":479,"height":12}},{"id":"3eda052a-9b90-403c-93bd-20a63537f7d0","block_type":"box","text":"securities collateralized by mortgages with adjustable rather than fixed rates. ARMs eligible for","page_number":156,"box":{"x":116,"y":397,"width":706,"height":12}},{"id":"8a3e156f-2238-4f77-b036-88f0e11052de","block_type":"box","text":"inclusion in a mortgage pool generally provide for a fixed initial mortgage interest rate for a set number","page_number":156,"box":{"x":117,"y":413,"width":764,"height":12}},{"id":"750d78bc-5a08-4b40-963d-4c2f6770a714","block_type":"box","text":"of scheduled monthly payments. After that schedule of payments has been completed, the interest","page_number":156,"box":{"x":116,"y":428,"width":736,"height":12}},{"id":"ad9bb9dd-92de-4b37-acaa-bec9ec0682f5","block_type":"box","text":"rates are subject to periodic adjustment based on changes to a designated benchmark index.","page_number":156,"box":{"x":117,"y":444,"width":697,"height":12}},{"id":"26023ab2-d40a-4391-9d88-c3f61b016817","block_type":"box","text":"ARMs contain maximum and minimum rates beyond which the mortgage interest rate may not vary","page_number":156,"box":{"x":116,"y":475,"width":741,"height":12}},{"id":"c37e926d-5470-4d63-a879-687e89a7776a","block_type":"box","text":"over the lifetime of the security. In addition, certain ARMs provide for additional limitations on the","page_number":156,"box":{"x":116,"y":490,"width":722,"height":12}},{"id":"30ae7d2b-629f-4bda-a541-2491a5a9597d","block_type":"box","text":"maximum amount by which the mortgage interest rate may adjust for any single adjustment period. In","page_number":156,"box":{"x":117,"y":506,"width":758,"height":12}},{"id":"0f3c820f-db9c-469a-a3e7-38fab76be016","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":156,"box":{"x":116,"y":521,"width":741,"height":12}},{"id":"1eda1e4a-d20b-410d-a726-854b65183d04","block_type":"box","text":"rate, the ARM’s coupon may represent a below market rate of interest. In these circumstances, the","page_number":156,"box":{"x":117,"y":537,"width":737,"height":12}},{"id":"b8d76d7a-debb-4c7f-9f46-acfb858a6657","block_type":"box","text":"market value of the ARM security will likely have fallen.","page_number":156,"box":{"x":117,"y":552,"width":412,"height":12}},{"id":"99272dcc-bb65-45a4-a5bb-2630c6879f55","block_type":"box","text":"Certain ARMs contain limitations on changes in the required monthly payment. In the event that a","page_number":156,"box":{"x":117,"y":583,"width":728,"height":12}},{"id":"67e73003-6d77-4431-8fe6-fab90c13dd61","block_type":"box","text":"monthly payment is not sufficient to pay the interest accruing on an ARM, any such excess interest is","page_number":156,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"d7743483-d923-4498-8878-85cb30c17633","block_type":"box","text":"added to the principal balance of the mortgage loan, which is repaid through future monthly payments.","page_number":156,"box":{"x":116,"y":614,"width":764,"height":12}},{"id":"738d42e3-b1a6-4cc9-96ad-e0ce9899aabc","block_type":"box","text":"If the monthly payment for such an instrument exceeds the sum of the interest accrued at the","page_number":156,"box":{"x":117,"y":630,"width":695,"height":12}},{"id":"34a0eb09-2fef-4421-9499-03f02a546574","block_type":"box","text":"applicable mortgage interest rate and the principal payment required at such point to amortize the","page_number":156,"box":{"x":116,"y":645,"width":730,"height":12}},{"id":"01ff14eb-a8d7-4c13-99a3-93c578383674","block_type":"box","text":"outstanding principal balance over the remaining term of the loan, the excess is then used to reduce","page_number":156,"box":{"x":116,"y":661,"width":743,"height":12}},{"id":"92f2e17d-5e1a-410b-a1e3-6067ec16bad0","block_type":"box","text":"the outstanding principal balance of the ARM.","page_number":156,"box":{"x":116,"y":676,"width":338,"height":12}},{"id":"6dbfcc0e-6fc0-420a-a466-0bd6ab6341b1","block_type":"box","text":"CMO Residuals.","page_number":156,"box":{"x":117,"y":707,"width":120,"height":10}},{"id":"fd0f820a-d629-4254-950a-265baee7930d","block_type":"box","text":"CMO residuals are derivative mortgage securities issued by agencies or","page_number":156,"box":{"x":244,"y":707,"width":535,"height":12}},{"id":"30c40020-65ce-4c66-9c02-e1e48e16f80c","block_type":"box","text":"instrumentalities of the U.S. Government or by private originators of, or investors in, mortgage loans,","page_number":156,"box":{"x":117,"y":723,"width":744,"height":12}},{"id":"8a52f7ac-d991-4069-8d1b-8225f7b8d676","block_type":"box","text":"including savings and loan associations, homebuilders, mortgage banks, commercial banks,","page_number":156,"box":{"x":117,"y":738,"width":682,"height":12}},{"id":"a14a9993-f629-4873-882f-afce28dc42b9","block_type":"box","text":"investment banks, and special purpose entities of the foregoing. The cash flow generated by the","page_number":156,"box":{"x":117,"y":754,"width":713,"height":12}},{"id":"c63f5db2-2438-46cf-8ac5-8cc66e95e46c","block_type":"box","text":"mortgage assets underlying a series of CMOs is applied first to make required payments of principal","page_number":156,"box":{"x":117,"y":769,"width":742,"height":12}},{"id":"52c5ffdc-0df8-44ba-a4fc-95d82bfa92c1","block_type":"box","text":"and interest on the CMOs and second to pay the related administrative expenses and any","page_number":156,"box":{"x":116,"y":785,"width":668,"height":12}},{"id":"040b094f-0794-4d50-99de-3894336e2290","block_type":"box","text":"management fees of the issuer. The residual in a CMO structure generally represents the interest in","page_number":156,"box":{"x":117,"y":800,"width":740,"height":12}},{"id":"a6560327-bd63-4c50-87c0-a2305cf0f7c8","block_type":"box","text":"any excess cash flow remaining after making the foregoing payments. Each payment of such excess","page_number":156,"box":{"x":116,"y":816,"width":748,"height":12}},{"id":"2e80b17c-656f-423d-ae62-52896db7e809","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":156,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"21f0a39c-378d-4d54-80a6-1576a96b3242","block_type":"box","text":"amount of residual cash flow resulting from a CMO will depend on, among other things, the","page_number":156,"box":{"x":116,"y":847,"width":681,"height":12}},{"id":"02ea8b9b-4594-4893-9064-50e8e5b1f471","block_type":"box","text":"characteristics of the mortgage assets, the coupon rate of each class of CMO, prevailing interest rates,","page_number":156,"box":{"x":116,"y":862,"width":768,"height":12}},{"id":"35ee6b09-d380-42c5-8bff-01d1d6b1f7ff","block_type":"box","text":"the amount of administrative expenses and the prepayment experience on the mortgage assets. In","page_number":156,"box":{"x":116,"y":878,"width":738,"height":12}},{"id":"87b9b640-1f7e-4fa9-b6d8-e4092e953a59","block_type":"box","text":"II-69","page_number":156,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7093235d-f90a-4c34-a1e8-7e6b07110831","block_type":"box","text":"NM1026U-6030748-156/260","page_number":156,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1bfc969e-dcac-4cb6-86e1-84f607a74675","block_type":"box","text":"part, the yield to maturity on the CMO residuals is extremely sensitive to prepayments on the related","page_number":157,"box":{"x":117,"y":87,"width":748,"height":12}},{"id":"7bbd5812-f017-4f45-9ceb-78b0e5425747","block_type":"box","text":"underlying mortgage assets, in the same manner as an interest-only class of stripped mortgage-related","page_number":157,"box":{"x":117,"y":102,"width":770,"height":13}},{"id":"15e3acf4-b70c-497b-96b5-b2e6644e3faa","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":157,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"b722394a-57df-48aa-ba40-aa7be0381888","block_type":"box","text":"the yield to maturity on the related CMO residual will also be extremely sensitive to changes in the","page_number":157,"box":{"x":116,"y":134,"width":733,"height":12}},{"id":"50636b01-3786-446c-af96-acc9f2fe14ea","block_type":"box","text":"level of the index upon which interest rate adjustments are based. In certain circumstances, a Fund","page_number":157,"box":{"x":117,"y":149,"width":741,"height":12}},{"id":"bb483796-7d2e-44ad-a08d-fc8216b13d63","block_type":"box","text":"may fail to recoup fully its initial investment in a CMO residual.","page_number":157,"box":{"x":117,"y":165,"width":466,"height":12}},{"id":"b6d95add-e905-41f3-a9f6-3cf7c601b75a","block_type":"box","text":"CMO residuals are generally purchased and sold by institutional investors through one or more","page_number":157,"box":{"x":117,"y":196,"width":709,"height":12}},{"id":"8ecebe31-8166-4feb-87da-383966ac7a8b","block_type":"box","text":"investment banking firms acting as brokers or dealers. Transactions in CMO residuals are generally","page_number":157,"box":{"x":117,"y":211,"width":744,"height":12}},{"id":"ec052e38-e887-46fe-9a26-809346a46dde","block_type":"box","text":"completed only after careful review of the characteristics of the securities in question. In addition, CMO","page_number":157,"box":{"x":116,"y":227,"width":768,"height":12}},{"id":"4acc9adc-0a0e-472a-8ead-96f48b51e2be","block_type":"box","text":"residuals may or, pursuant to an exemption therefrom, may not have been registered under the","page_number":157,"box":{"x":117,"y":242,"width":711,"height":12}},{"id":"a870cafc-8a23-4151-b5cb-0f8d837ccb36","block_type":"box","text":"Securities Act. Residual interests generally are junior to, and may be significantly more volatile than,","page_number":157,"box":{"x":116,"y":258,"width":748,"height":12}},{"id":"c77bfbf3-b216-45c7-a097-895eb2502e16","block_type":"box","text":"“regular” CMO and REMIC interests. CMO residuals, whether or not registered under the Securities","page_number":157,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"088a6ec2-71f7-444f-b0a1-72b45bdbd655","block_type":"box","text":"Act, may be subject to certain restrictions on transferability.","page_number":157,"box":{"x":116,"y":289,"width":444,"height":12}},{"id":"ea7f722b-59b7-4125-8fc4-7c08c065e14c","block_type":"box","text":"Stripped Mortgage-Backed Securities.","page_number":157,"box":{"x":117,"y":320,"width":280,"height":12}},{"id":"6ca4332c-4b3a-49fb-b331-1f8b5bc07247","block_type":"box","text":"A Fund may invest in stripped mortgage-backed securities","page_number":157,"box":{"x":399,"y":320,"width":443,"height":12}},{"id":"504374a9-f7b1-425a-83e3-5dd0f5996a55","block_type":"box","text":"(“SMBSs”) issued by agencies or instrumentalities of the United States. SMBSs are derivative multi","page_number":157,"box":{"x":117,"y":335,"width":740,"height":12}},{"id":"8daf85e8-efe4-421e-9933-07fb1070a12e","block_type":"box","text":"class mortgage-backed securities. SMBS arrangements commonly involve two classes of securities","page_number":157,"box":{"x":116,"y":351,"width":744,"height":12}},{"id":"6610f6fd-36b9-458f-ba77-996a6c563cb3","block_type":"box","text":"that receive different proportions of the interest and principal distributions on a pool of mortgage","page_number":157,"box":{"x":116,"y":366,"width":716,"height":12}},{"id":"5fbcfa97-31d0-4675-bcdc-9d43df7d5378","block_type":"box","text":"assets. A common variety of SMBS is where one class (the principal only or PO class) receives some","page_number":157,"box":{"x":116,"y":382,"width":759,"height":12}},{"id":"6e5eb27d-cfa8-4630-81cd-a5e6306d9440","block_type":"box","text":"of the interest and most of the principal from the underlying assets, while the other class (the interest","page_number":157,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"589232b7-bde3-4862-b0fa-02c6330145e7","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":157,"box":{"x":116,"y":413,"width":755,"height":12}},{"id":"ed773d1d-ef04-47ea-93a5-3e9feb274ec0","block_type":"box","text":"case, the IO class receives all of the interest, while","page_number":157,"box":{"x":116,"y":428,"width":382,"height":11}},{"id":"ddd63f92-4c10-42e2-a32c-0e015de75e17","block_type":"box","text":"the PO class receives all of the principal. While a","page_number":157,"box":{"x":498,"y":428,"width":368,"height":12}},{"id":"73386a1a-ad87-443d-b798-cc4a8801b962","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":157,"box":{"x":117,"y":444,"width":758,"height":12}},{"id":"e0227d3b-9725-412d-87a6-b6efb6474916","block_type":"box","text":"class. The yield to maturity of an IO class is extremely sensitive to the rate of principal payments","page_number":157,"box":{"x":116,"y":459,"width":720,"height":12}},{"id":"e960438a-9304-41e2-9b62-aafb015b00bd","block_type":"box","text":"(including prepayments) on the related underlying assets, and a rapid rate of principal prepayments in","page_number":157,"box":{"x":117,"y":475,"width":759,"height":12}},{"id":"edeb8c07-9779-4019-801e-74e15de2d4b3","block_type":"box","text":"excess of that considered in pricing the securities will have a material adverse effect on an IO","page_number":157,"box":{"x":116,"y":490,"width":699,"height":12}},{"id":"876edd3c-1b35-40d8-b40b-53470c112498","block_type":"box","text":"security’s yield to maturity. If the underlying mortgage assets experience greater than anticipated","page_number":157,"box":{"x":116,"y":506,"width":724,"height":12}},{"id":"c7c88c51-a835-49fd-8f12-b7e7a998cc73","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":157,"box":{"x":117,"y":521,"width":760,"height":12}},{"id":"c884b1a9-cb0f-4955-9460-fd9ba96d9174","block_type":"box","text":"certain types of IOs that represent the interest portion of a particular class as opposed to the interest","page_number":157,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"580a9823-a438-40f5-8620-bcfcf599d925","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":157,"box":{"x":117,"y":552,"width":768,"height":12}},{"id":"4db5b6b7-b358-47ce-ab6a-85853698b921","block_type":"box","text":"because of the characteristics of the principal portion to which they relate. As a result of the above","page_number":157,"box":{"x":117,"y":568,"width":733,"height":12}},{"id":"641a8b48-2b20-4512-9d6b-74155282d6e8","block_type":"box","text":"factors, a Fund generally will purchase IOs only as a component of so called “synthetic” securities. This","page_number":157,"box":{"x":116,"y":583,"width":772,"height":12}},{"id":"8d7da2e4-4b5a-4c9a-922d-204378fe2c2e","block_type":"box","text":"means that purchases of IOs will be matched with certain purchases of other securities, such as POs,","page_number":157,"box":{"x":117,"y":599,"width":759,"height":12}},{"id":"d2bda199-3ba1-4f8e-8883-0d4db056b170","block_type":"box","text":"inverse floating rate CMOs or fixed rate securities; as interest rates fall, presenting a greater risk of","page_number":157,"box":{"x":117,"y":614,"width":737,"height":12}},{"id":"b4501e6a-d407-4530-bfc3-8b1db1564df8","block_type":"box","text":"unanticipated prepayments of principal, the negative effect on a Fund because of its holdings of IOs","page_number":157,"box":{"x":117,"y":630,"width":744,"height":12}},{"id":"da8de3ad-19b8-4c71-9632-8c0b20d5a34b","block_type":"box","text":"should be diminished somewhat because of the increased yield on the inverse floating rate CMOs or","page_number":157,"box":{"x":116,"y":645,"width":751,"height":12}},{"id":"926138c7-d52d-4d6d-942b-5ed4309d090c","block_type":"box","text":"the increased appreciation on the POs or fixed rate securities.","page_number":157,"box":{"x":116,"y":661,"width":459,"height":12}},{"id":"061ae07a-28a7-4409-92d2-9249930721f3","block_type":"box","text":"Tiered Index Bonds.","page_number":157,"box":{"x":118,"y":692,"width":147,"height":9}},{"id":"1bf62573-08e2-4b15-b284-d457345a236d","block_type":"box","text":"Tiered index bonds are forms of mortgage-related securities. The interest rate on","page_number":157,"box":{"x":271,"y":692,"width":601,"height":12}},{"id":"a3ff338b-90fd-4ae9-a6a2-662ae61bf2b9","block_type":"box","text":"a tiered index bond is tied to a specified index or","page_number":157,"box":{"x":116,"y":707,"width":360,"height":12}},{"id":"beb92209-9e79-45f5-b931-05a12f48de92","block_type":"box","text":"market rate. So long as this index or market rate is","page_number":157,"box":{"x":482,"y":707,"width":374,"height":12}},{"id":"52b9c022-f80c-4c67-811c-d18df1e24a1f","block_type":"box","text":"below a predetermined “strike” rate, the interest rate on the tiered index bond remains fixed. If,","page_number":157,"box":{"x":117,"y":723,"width":698,"height":12}},{"id":"d6c438e1-ab7b-4bd0-9510-1a9eae1547b8","block_type":"box","text":"however, the specified index or market rate rises above the “strike” rate, the interest rate of the tiered","page_number":157,"box":{"x":117,"y":738,"width":749,"height":12}},{"id":"ad09e693-e141-4793-9551-4e5d0d766f73","block_type":"box","text":"index bond will decrease. Thus, under these circumstances, the interest rate on a tiered index bond,","page_number":157,"box":{"x":117,"y":754,"width":741,"height":11}},{"id":"edfafdd2-840f-4b2c-81e9-e8a5c046c687","block_type":"box","text":"like an inverse floater, will move in the opposite direction of prevailing interest rates, with the result that","page_number":157,"box":{"x":117,"y":769,"width":762,"height":12}},{"id":"6c274b93-521f-4f08-95ba-ad6542a1f48b","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":157,"box":{"x":116,"y":785,"width":727,"height":12}},{"id":"aca1d1bc-7273-4458-a9e7-6f13630611f9","block_type":"box","text":"TBA Commitments.","page_number":157,"box":{"x":118,"y":816,"width":142,"height":9}},{"id":"09b5b7ba-315b-48f1-8824-f55ce441dfa3","block_type":"box","text":"Certain Funds may enter into “to be announced” or “TBA” commitments. TBA","page_number":157,"box":{"x":267,"y":816,"width":573,"height":12}},{"id":"2c216e67-f10b-4d88-9421-9dd6027e58b0","block_type":"box","text":"commitments are forward agreements for the purchase or sale of securities, including mortgage","page_number":157,"box":{"x":116,"y":831,"width":716,"height":12}},{"id":"80cfc2e3-632e-409a-bd43-0571ee57b060","block_type":"box","text":"backed securities for a fixed price, with payment and delivery on an agreed upon future settlement","page_number":157,"box":{"x":117,"y":847,"width":733,"height":12}},{"id":"9de363d0-1293-4c1e-b7d7-f085eaaecf99","block_type":"box","text":"date. The specific securities to be delivered are not identified at the trade date. However, delivered","page_number":157,"box":{"x":116,"y":862,"width":737,"height":12}},{"id":"804422c0-1960-460c-8879-adf67bb2e67f","block_type":"box","text":"securities must meet specified terms, including issuer, rate and mortgage terms. When the Fund enters","page_number":157,"box":{"x":116,"y":878,"width":772,"height":12}},{"id":"628be0dd-71d2-4875-8e34-5f26aaeff585","block_type":"box","text":"II-70","page_number":157,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"455af91e-2e59-4989-9bd9-4184d448d59b","block_type":"box","text":"NM1026U-6030748-157/260","page_number":157,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ba08fe68-e41e-432c-b1ba-fb30f311e7f4","block_type":"box","text":"into a TBA commitment for the sale of mortgage-backed securities for a fixed price, with payment and","page_number":158,"box":{"x":117,"y":87,"width":758,"height":12}},{"id":"a8da0015-bf9c-4bb4-bfb6-c2778b4ac7a4","block_type":"box","text":"delivery on an agreed upon future settlement date (which may be referred to as having a short position","page_number":158,"box":{"x":116,"y":102,"width":767,"height":13}},{"id":"96b7c773-a116-4cef-9679-9c2c27b264ce","block_type":"box","text":"in such TBA securities), the Fund may or may not hold the types of mortgage-backed securities","page_number":158,"box":{"x":117,"y":118,"width":712,"height":12}},{"id":"bd774606-dc38-4a45-85fe-1495f2b99b9a","block_type":"box","text":"required to be delivered. See “— When-Issued Securities, Delayed Delivery Securities and Forward","page_number":158,"box":{"x":117,"y":134,"width":743,"height":12}},{"id":"e67c5cc2-2a2f-4295-ace3-9a8ad03366c3","block_type":"box","text":"Commitments” below.","page_number":158,"box":{"x":117,"y":149,"width":166,"height":10}},{"id":"c64a19c3-82d7-462c-afd1-709eddb9e89e","block_type":"box","text":"Mortgage Dollar Rolls.","page_number":158,"box":{"x":116,"y":180,"width":164,"height":12}},{"id":"c5f391fc-9821-41a0-bf37-ac0d7d101b62","block_type":"box","text":"Certain Funds may invest in mortgage dollar rolls. In a mortgage dollar roll","page_number":158,"box":{"x":282,"y":180,"width":562,"height":12}},{"id":"2c19c5ef-6f86-4b20-8c7f-049410178ba7","block_type":"box","text":"transaction, a Fund sells mortgage-backed securities for delivery in the current month and","page_number":158,"box":{"x":116,"y":196,"width":673,"height":12}},{"id":"fac112e8-2c23-47f5-835d-bb911bfba560","block_type":"box","text":"simultaneously contracts to repurchase substantially similar securities on a specified future date. The","page_number":158,"box":{"x":116,"y":211,"width":755,"height":12}},{"id":"b942b195-d1ca-47b7-badd-19ce0ffdc788","block_type":"box","text":"securities that are repurchased will bear the same interest rate and a similar maturity as those sold, but","page_number":158,"box":{"x":116,"y":227,"width":771,"height":12}},{"id":"fbbbd351-2f4f-440d-991a-185a63b3cbae","block_type":"box","text":"pools of mortgages collateralizing those securities may have different prepayment histories than those","page_number":158,"box":{"x":117,"y":242,"width":762,"height":12}},{"id":"1cff69b0-7504-480b-a8ca-e91c34d6814d","block_type":"box","text":"sold. During the period between the sale and repurchase, a Fund will not be entitled to receive interest","page_number":158,"box":{"x":116,"y":258,"width":765,"height":12}},{"id":"95fca636-f366-4329-9c7f-418d246d7910","block_type":"box","text":"and principal payments on the securities sold. Proceeds of the sale will be invested in additional","page_number":158,"box":{"x":116,"y":273,"width":716,"height":12}},{"id":"80b5d9de-3de8-44a5-95ed-efa804893350","block_type":"box","text":"instruments for the Fund, and the income from these investments will generate income for the Fund. If","page_number":158,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"f8c9ac9b-9453-4105-9a65-0c996e998174","block_type":"box","text":"such income does not exceed the income, capital appreciation and gain or loss that would have been","page_number":158,"box":{"x":116,"y":304,"width":757,"height":12}},{"id":"7f19327c-aead-49da-aadd-da404490e008","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":158,"box":{"x":117,"y":320,"width":715,"height":12}},{"id":"6d653af5-bedf-49d1-a17a-f9007a54fc48","block_type":"box","text":"investment performance of a Fund compared with what the performance would have been without the","page_number":158,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"9979e05f-71eb-4bef-a519-cafc2fdbde04","block_type":"box","text":"use of dollar rolls.","page_number":158,"box":{"x":117,"y":351,"width":135,"height":9}},{"id":"f5ae6d1e-d6a0-42b1-8b9b-88b30f7a2229","block_type":"box","text":"Each mortgage dollar roll transaction is accounted for as a sale or purchase of a portfolio security and","page_number":158,"box":{"x":117,"y":382,"width":760,"height":12}},{"id":"3c776a9f-3fda-4546-915d-8c247169d64e","block_type":"box","text":"a subsequent purchase or sale of a substantially similar security in the forward market. Transactions in","page_number":158,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"ff85219f-9f1a-41b8-a876-8a6296d3a2f9","block_type":"box","text":"mortgage dollar rolls may increase trading costs and portfolio turnover.","page_number":158,"box":{"x":117,"y":413,"width":529,"height":12}},{"id":"8ceff31f-e302-4d9e-b9f2-9295bd51f289","block_type":"box","text":"In the event the buyer of the securities under a mortgage dollar roll files for bankruptcy or becomes","page_number":158,"box":{"x":117,"y":444,"width":738,"height":12}},{"id":"6c3fc99a-d0ab-4366-b633-eb81057fa16c","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":158,"box":{"x":117,"y":459,"width":760,"height":12}},{"id":"4c666c30-41e6-47bb-89b4-abdf88ec8db1","block_type":"box","text":"pending a determination by the other party, or its trustee or receiver, whether to enforce the Fund’s","page_number":158,"box":{"x":117,"y":475,"width":738,"height":12}},{"id":"2d2f643d-d753-4c57-9a2b-7318ae65270b","block_type":"box","text":"obligation to purchase the similar securities in the forward transaction.","page_number":158,"box":{"x":116,"y":490,"width":525,"height":12}},{"id":"166895f4-21b2-42a6-b51f-0df97882c529","block_type":"box","text":"A Fund may engage in dollar roll transactions to enhance returns. Successful use of mortgage dollar","page_number":158,"box":{"x":116,"y":521,"width":750,"height":12}},{"id":"04aaeb1d-5817-4ef8-8ea7-dfc078dd5d5d","block_type":"box","text":"rolls may depend upon the Manager’s ability to correctly predict interest rates and prepayments. Dollar","page_number":158,"box":{"x":117,"y":537,"width":765,"height":12}},{"id":"1228065d-335d-485f-a9b9-947cfa356e26","block_type":"box","text":"rolls involve the risk that the market value of the securities subject to a Fund’s forward purchase","page_number":158,"box":{"x":117,"y":552,"width":716,"height":12}},{"id":"cf30282b-ac29-4fe1-a350-9c5536097ff0","block_type":"box","text":"commitment may decline below, or the market value of the securities subject to a Fund’s forward sale","page_number":158,"box":{"x":116,"y":568,"width":758,"height":12}},{"id":"1a63c06c-8b8a-422d-b231-2b6ba4fa13ef","block_type":"box","text":"commitment may increase above, the exercise price of the forward commitment. Dollar rolls are","page_number":158,"box":{"x":116,"y":583,"width":715,"height":12}},{"id":"cdbf55ec-5ef3-4655-9c1e-1f42d5fc6472","block_type":"box","text":"speculative techniques that can be deemed to involve leverage. There is no assurance that dollar rolls","page_number":158,"box":{"x":116,"y":599,"width":763,"height":12}},{"id":"173293d4-775a-48a1-8162-9bbc5a0ee9cc","block_type":"box","text":"can be successfully employed.","page_number":158,"box":{"x":116,"y":614,"width":233,"height":12}},{"id":"8ffc22ec-8d4b-4388-a591-208360f31581","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":158,"box":{"x":117,"y":645,"width":740,"height":12}},{"id":"b5d2b7c0-6243-48e0-b301-18be8affb981","block_type":"box","text":"settling securities (e.g., dollar rolls and firm and standby commitments, including TBA commitments)","page_number":158,"box":{"x":116,"y":661,"width":742,"height":12}},{"id":"228f4a7f-f61c-4aba-b316-f89a010b2844","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":158,"box":{"x":116,"y":676,"width":746,"height":12}},{"id":"ed478d96-2f41-4131-a7f6-bfbd9bacbdc1","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the transaction meets the","page_number":158,"box":{"x":116,"y":692,"width":712,"height":12}},{"id":"570f1199-ee03-49ae-93ba-fed7821cf982","block_type":"box","text":"Delayed-Settlement Securities Provision (as defined below under “— When-Issued Securities, Delayed","page_number":158,"box":{"x":117,"y":707,"width":763,"height":12}},{"id":"bcfde7f7-2c4b-49cc-ad22-128ab14caf34","block_type":"box","text":"Delivery Securities and Forward Commitments”). If a when-issued, forward-settling or non-standard","page_number":158,"box":{"x":117,"y":723,"width":736,"height":12}},{"id":"f0485160-4ae1-40c8-82b1-61ffb6504e1a","block_type":"box","text":"settlement cycle security does not satisfy the Delayed-Settlement Securities Provision, then it is treated","page_number":158,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"3bd4be85-616c-4efd-9743-d693a950fe49","block_type":"box","text":"as a Derivatives Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":158,"box":{"x":116,"y":754,"width":731,"height":12}},{"id":"c63cb243-7c33-4df0-b9ff-a7694fc6cacc","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":158,"box":{"x":117,"y":769,"width":404,"height":12}},{"id":"9483a861-25ab-422a-abd3-7c71e68b3acc","block_type":"box","text":"Net Interest Margin (NIM) Securities.","page_number":158,"box":{"x":117,"y":800,"width":270,"height":12}},{"id":"d2d3818b-93e6-467f-b3d3-68cbd2bc3511","block_type":"box","text":"A Fund may invest in net interest margin (“NIM”) securities.","page_number":158,"box":{"x":394,"y":800,"width":438,"height":12}},{"id":"526c947f-0e70-4559-a82a-727e11855909","block_type":"box","text":"These securities are derivative interest-only mortgage securities structured off home equity loan","page_number":158,"box":{"x":116,"y":816,"width":711,"height":12}},{"id":"cbbc63b9-c1cb-4d05-b370-3bd4c0c026d7","block_type":"box","text":"transactions. NIM securities receive any “excess” interest computed after paying coupon costs,","page_number":158,"box":{"x":116,"y":831,"width":710,"height":12}},{"id":"916df28d-235a-44a9-a86c-8d9805f55221","block_type":"box","text":"servicing costs and fees and any credit losses associated with the underlying pool of home equity","page_number":158,"box":{"x":116,"y":847,"width":728,"height":12}},{"id":"b9244443-4447-4ffd-872c-19e10f70ee7d","block_type":"box","text":"loans. Like traditional stripped mortgage-backed securities, the yield to maturity on a NIM security is","page_number":158,"box":{"x":117,"y":862,"width":745,"height":12}},{"id":"19c2abb4-0e4a-43b9-b9e9-32f0491c1579","block_type":"box","text":"sensitive not only to changes in prevailing interest rates but also to the rate of principal payments","page_number":158,"box":{"x":116,"y":878,"width":725,"height":12}},{"id":"a9d668fb-307a-4872-b892-a638bf456709","block_type":"box","text":"II-71","page_number":158,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"33fedec0-d9b1-4e1f-b50d-dea6f731a76a","block_type":"box","text":"NM1026U-6030748-158/260","page_number":158,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3f0674ae-8afd-4ac9-b61d-5b1ec6a81890","block_type":"box","text":"(including prepayments) on the underlying home equity loans. NIM securities are highly sensitive to","page_number":159,"box":{"x":117,"y":87,"width":740,"height":12}},{"id":"5a100a90-ea1c-488e-b222-d3b893083ac9","block_type":"box","text":"credit losses on the underlying collateral and the timing in which those losses are taken.","page_number":159,"box":{"x":116,"y":103,"width":657,"height":12}},{"id":"92573dde-0f85-4850-a53f-c8eef07d6d74","block_type":"box","text":"Municipal Investments.","page_number":159,"box":{"x":116,"y":134,"width":177,"height":11}},{"id":"d0f3a1d3-c595-4339-a428-6d44e6d25277","block_type":"box","text":"Certain Funds may invest in obligations issued by or on behalf of states, territories and possessions of","page_number":159,"box":{"x":117,"y":157,"width":763,"height":12}},{"id":"3f7a231f-04b0-425d-86f0-647502659334","block_type":"box","text":"the United States and the District of Columbia and their political subdivisions, agencies and","page_number":159,"box":{"x":116,"y":172,"width":681,"height":12}},{"id":"4a02776b-8d2f-484c-87e7-e93774558aea","block_type":"box","text":"instrumentalities, the payments from which, in the opinion of bond counsel to the issuer, are excludable","page_number":159,"box":{"x":117,"y":188,"width":770,"height":12}},{"id":"00efee95-e9c4-438b-9598-0c790d9bb3f8","block_type":"box","text":"from gross income for U.S. federal income tax purposes (“Municipal Bonds”). Certain of the Municipal","page_number":159,"box":{"x":116,"y":203,"width":758,"height":12}},{"id":"21a0b906-5656-4f38-af1f-2ade169a3a6f","block_type":"box","text":"Funds may also invest in Municipal Bonds that pay interest excludable from gross income for purposes","page_number":159,"box":{"x":117,"y":219,"width":768,"height":12}},{"id":"e3f37247-1554-4dd1-8d31-6b0705f5aa71","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":159,"box":{"x":116,"y":234,"width":764,"height":12}},{"id":"246f2435-d042-4cf7-a936-ad233b12aa7f","block_type":"box","text":"exempt from state and local taxes of the designated state (“State Municipal Bonds”). The Municipal","page_number":159,"box":{"x":116,"y":250,"width":740,"height":12}},{"id":"60afe29a-e92a-4fc0-a059-895dba3a15b7","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":159,"box":{"x":117,"y":265,"width":762,"height":12}},{"id":"d2495bc7-fd2c-48a2-8960-e529584b3b8f","block_type":"box","text":"instrumentality thereof, if the Manager believes such securities to pay interest excludable from gross","page_number":159,"box":{"x":117,"y":281,"width":748,"height":12}},{"id":"18730a4e-0887-4679-b151-ed9c2a73c1a4","block_type":"box","text":"income for purposes of U.S. federal income tax and state and local income taxes of the designated","page_number":159,"box":{"x":117,"y":296,"width":738,"height":12}},{"id":"905f3ee4-5b53-41b6-8677-4e11d14ecaf0","block_type":"box","text":"state and/or state and local personal property taxes of the designated state (“Non-Municipal","page_number":159,"box":{"x":116,"y":312,"width":686,"height":12}},{"id":"83ac7e82-55e6-43f1-ae31-1ab849e4874d","block_type":"box","text":"Tax-Exempt Securities”). Non-Municipal Tax-Exempt Securities could include trust certificates or other","page_number":159,"box":{"x":116,"y":327,"width":764,"height":12}},{"id":"7945018b-8492-4ab0-8f12-2b68eaf114fb","block_type":"box","text":"instruments evidencing interest in one or more long-term municipal securities. Non-Municipal","page_number":159,"box":{"x":117,"y":343,"width":693,"height":12}},{"id":"084f89dd-9125-4b11-ba35-9c6f82dd30ed","block_type":"box","text":"Tax-Exempt Securities also may include securities issued by other investment companies that invest in","page_number":159,"box":{"x":116,"y":358,"width":770,"height":12}},{"id":"472684bf-c840-4bd0-bce4-25aefa32e4ad","block_type":"box","text":"municipal bonds, to the extent such investments are permitted by applicable law. Non-Municipal","page_number":159,"box":{"x":117,"y":374,"width":715,"height":12}},{"id":"730f9d20-b5f6-436c-ae67-7bee84c9e579","block_type":"box","text":"Tax-Exempt Securities that pay interest excludable from gross income for U.S. federal income tax","page_number":159,"box":{"x":116,"y":389,"width":731,"height":12}},{"id":"f5872086-beda-4bda-84e5-668fc5d22637","block_type":"box","text":"purposes will be considered “Municipal Bonds” for purposes of a Municipal Fund’s investment objective","page_number":159,"box":{"x":117,"y":405,"width":769,"height":12}},{"id":"5295f512-37d5-4505-9a8f-f86aca36e2ab","block_type":"box","text":"and policies. Non-Municipal Tax-Exempt Securities that pay interest excludable from gross income for","page_number":159,"box":{"x":116,"y":420,"width":761,"height":12}},{"id":"a7b4f64e-f3b2-4ad9-96b7-8d7a077e7619","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":159,"box":{"x":117,"y":436,"width":734,"height":12}},{"id":"49ae26c7-d851-49bf-9b08-656c73d7d696","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":159,"box":{"x":116,"y":451,"width":745,"height":12}},{"id":"7df0178e-757d-495f-a157-4ef2bf15d5f0","block_type":"box","text":"state will be considered “State Municipal Bonds” for purposes of the investment objective and policies","page_number":159,"box":{"x":116,"y":467,"width":758,"height":12}},{"id":"2f3bf4c2-de6f-4207-adb4-ac5348778ee7","block_type":"box","text":"of each of California Municipal Opportunities Fund, New Jersey Municipal Bond Fund, New York","page_number":159,"box":{"x":116,"y":482,"width":720,"height":12}},{"id":"ae00ec0a-f759-47d3-8c37-e507332ca314","block_type":"box","text":"Municipal Opportunities Fund and Pennsylvania Municipal Bond Fund.","page_number":159,"box":{"x":117,"y":498,"width":527,"height":12}},{"id":"d59839c3-aa7e-4d3d-b313-4e4f0fbc89b0","block_type":"box","text":"Risk Factors and Special Considerations Relating to Municipal Bonds.","page_number":159,"box":{"x":116,"y":529,"width":519,"height":12}},{"id":"9822cc16-32d9-4dde-ba9d-1537377767a7","block_type":"box","text":"The risks and special","page_number":159,"box":{"x":636,"y":529,"width":168,"height":12}},{"id":"d75b4814-ab50-40c2-b39c-9d76f964192f","block_type":"box","text":"considerations involved in investment in Municipal Bonds vary with the types of instruments being","page_number":159,"box":{"x":116,"y":544,"width":729,"height":12}},{"id":"7c0d7d49-7a91-41b0-a2c4-c4bf06e982ea","block_type":"box","text":"acquired. Investments in Non-Municipal Tax-Exempt Securities may present similar risks, depending","page_number":159,"box":{"x":116,"y":560,"width":751,"height":12}},{"id":"abf53c33-27f4-44b4-81b4-d943cde89efa","block_type":"box","text":"on the particular product. Certain municipal instruments in which a Fund may invest may be","page_number":159,"box":{"x":116,"y":575,"width":685,"height":12}},{"id":"d884c959-583d-46a4-b45b-8359e031805e","block_type":"box","text":"characterized as derivatives.","page_number":159,"box":{"x":116,"y":591,"width":218,"height":9}},{"id":"577fb6ba-b892-4664-bbcd-5332e877a750","block_type":"box","text":"The value of Municipal Bonds generally may be affected by uncertainties in the municipal markets as a","page_number":159,"box":{"x":116,"y":622,"width":768,"height":12}},{"id":"e02736bc-a406-450c-a998-ab33bce2759b","block_type":"box","text":"result of legislation or litigation, including legislation or litigation that changes the taxation of Municipal","page_number":159,"box":{"x":117,"y":637,"width":757,"height":12}},{"id":"a297df11-6681-46e5-8c6c-5dea858ba618","block_type":"box","text":"Bonds or the rights of Municipal Bond holders in the event of a bankruptcy. Municipal bankruptcies are","page_number":159,"box":{"x":117,"y":653,"width":764,"height":12}},{"id":"7cf67489-37d5-44aa-85cd-fa0b8741a014","block_type":"box","text":"rare and certain provisions of the U.S. Bankruptcy Code governing such bankruptcies are unclear.","page_number":159,"box":{"x":117,"y":668,"width":726,"height":12}},{"id":"d6a22bb9-6929-48f6-af56-ca416c27351e","block_type":"box","text":"Further, the application of state law to Municipal Bond issuers could produce varying results among the","page_number":159,"box":{"x":117,"y":684,"width":764,"height":12}},{"id":"d729d618-f63e-4471-a09a-5f8b08ba1715","block_type":"box","text":"states or among Municipal Bond issuers within a state. These uncertainties could have a significant","page_number":159,"box":{"x":116,"y":699,"width":737,"height":13}},{"id":"8a48ed14-cc0d-4488-88b9-340e4ea7c101","block_type":"box","text":"impact on the prices of the Municipal Bonds in which a Fund invests.","page_number":159,"box":{"x":117,"y":715,"width":507,"height":12}},{"id":"f0432b9a-233f-4c34-86fe-3d425d7ab0f9","block_type":"box","text":"Description of Municipal Bonds.","page_number":159,"box":{"x":116,"y":746,"width":234,"height":12}},{"id":"30c2811b-639d-4012-867e-887f37da8234","block_type":"box","text":"Municipal Bonds include debt obligations issued to obtain funds for various public purposes, including","page_number":159,"box":{"x":117,"y":769,"width":751,"height":12}},{"id":"8bd53fb9-24a1-42c1-a498-71f8b39eaec0","block_type":"box","text":"the construction of a wide range of public facilities, refunding of outstanding obligations and obtaining","page_number":159,"box":{"x":116,"y":785,"width":750,"height":12}},{"id":"2bfeda9f-562f-4494-a080-94f2cd1c1371","block_type":"box","text":"funds for general operating expenses and loans to other public institutions and facilities. In addition,","page_number":159,"box":{"x":116,"y":800,"width":737,"height":12}},{"id":"da2e13f3-f7fc-4eca-9e04-eb3116ee781e","block_type":"box","text":"certain types of bonds are issued by or on behalf of public authorities to finance various privately","page_number":159,"box":{"x":116,"y":816,"width":716,"height":12}},{"id":"41c9f482-02ba-4c48-a8af-d5b943234839","block_type":"box","text":"owned or operated facilities, including certain facilities for the local furnishing of electric energy or gas,","page_number":159,"box":{"x":116,"y":831,"width":763,"height":12}},{"id":"bdf7df7a-43ea-4071-8cd6-9feb31398e04","block_type":"box","text":"sewage facilities, solid waste disposal facilities and other specialized facilities. Such obligations are","page_number":159,"box":{"x":116,"y":847,"width":740,"height":12}},{"id":"3a94f28c-d03f-43b3-b903-047c411c4ee2","block_type":"box","text":"included within the term Municipal Bonds if the interest paid thereon is excluded from gross income for","page_number":159,"box":{"x":117,"y":862,"width":764,"height":12}},{"id":"8b9f66b4-9f07-4fe9-885d-8d1eadf28c17","block_type":"box","text":"U.S. federal income tax purposes and any applicable state and local taxes. Other types of private","page_number":159,"box":{"x":117,"y":878,"width":726,"height":12}},{"id":"f7922ae4-2ecb-4d7a-8aa5-fc4a56508e8b","block_type":"box","text":"II-72","page_number":159,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"45d384bd-f955-45b9-b04f-99b0fc9a63ac","block_type":"box","text":"NM1026U-6030748-159/260","page_number":159,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8d669398-9d2b-40a7-91f7-78bd42e9be6c","block_type":"box","text":"activity bonds, the proceeds of which are used for the construction, equipment or improvement of","page_number":160,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"d461e599-b91f-4898-a7d4-f7dc6cde8bf3","block_type":"box","text":"privately operated industrial or commercial facilities, may constitute Municipal Bonds, although the","page_number":160,"box":{"x":117,"y":102,"width":732,"height":13}},{"id":"12301eb0-280a-4f0c-98e2-22ee41377974","block_type":"box","text":"current U.S. federal tax laws place substantial limitations on the size of such issues. The interest on","page_number":160,"box":{"x":116,"y":118,"width":745,"height":12}},{"id":"9c81130d-4b16-4060-882f-af8568432a56","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":160,"box":{"x":117,"y":134,"width":742,"height":12}},{"id":"9123881b-5036-4bc1-bfc3-d004c81ab07d","block_type":"box","text":"classifications of Municipal Bonds are “general obligation” and “revenue” or “special obligation” bonds,","page_number":160,"box":{"x":116,"y":149,"width":762,"height":12}},{"id":"523ec450-0d2d-4c1e-bd20-337f1d76347d","block_type":"box","text":"which latter category includes private activity bonds (“PABs”) (or “industrial development bonds” under","page_number":160,"box":{"x":116,"y":165,"width":764,"height":12}},{"id":"4abc4d51-16f6-4a83-aaf5-24ad0f71f96d","block_type":"box","text":"pre-1986 law).","page_number":160,"box":{"x":117,"y":180,"width":111,"height":12}},{"id":"e1ff8651-6499-42ac-8fc1-85ab39966aa7","block_type":"box","text":"General Obligation Bonds.","page_number":160,"box":{"x":117,"y":211,"width":194,"height":12}},{"id":"ef19f35a-4784-41eb-91b1-f9cd36a1c6e0","block_type":"box","text":"General obligation bonds are secured by the issuer’s pledge of its full faith,","page_number":160,"box":{"x":313,"y":211,"width":565,"height":12}},{"id":"d2e87bdd-643e-499a-ac3d-7c3ffd8481bb","block_type":"box","text":"credit and taxing power for the payment of principal and interest. The taxing power of any","page_number":160,"box":{"x":116,"y":227,"width":668,"height":12}},{"id":"aad9c060-47e2-4080-b6ed-50ee71050d50","block_type":"box","text":"governmental entity may be limited, however, by provisions of its state constitution or laws, and an","page_number":160,"box":{"x":116,"y":242,"width":735,"height":12}},{"id":"8b004807-2b5e-4f3b-a095-bd127ded5764","block_type":"box","text":"entity’s creditworthiness will depend on many factors, including potential erosion of its tax base due to","page_number":160,"box":{"x":116,"y":258,"width":760,"height":12}},{"id":"ecce85be-fbfd-43c7-ab2a-99a40cdcff99","block_type":"box","text":"population declines, natural disasters, declines in the state’s industrial base or inability to attract new","page_number":160,"box":{"x":117,"y":273,"width":750,"height":12}},{"id":"2ff2d49a-c15a-4866-b6f2-5d88499aa615","block_type":"box","text":"industries, economic limits on the ability to tax without eroding the tax base, state legislative proposals","page_number":160,"box":{"x":117,"y":289,"width":762,"height":12}},{"id":"a0675313-3c03-48ef-9513-e84f86289ee7","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":160,"box":{"x":116,"y":304,"width":740,"height":12}},{"id":"d7c6981a-fcaf-46e4-afe1-c89352466d65","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":160,"box":{"x":116,"y":320,"width":738,"height":12}},{"id":"0759adcb-d9c9-4cd6-a147-03b586ff90c2","block_type":"box","text":"Accordingly, the capacity of the issuer of a general obligation bond as to the timely payment of interest","page_number":160,"box":{"x":116,"y":335,"width":765,"height":12}},{"id":"e3520755-fc0b-4830-a555-6cb13bad564d","block_type":"box","text":"and the repayment of principal when due is affected by the issuer’s maintenance of its tax base.","page_number":160,"box":{"x":116,"y":351,"width":717,"height":12}},{"id":"b7aa4327-0445-4cef-bd70-f6f6c4a9b63f","block_type":"box","text":"Revenue Bonds.","page_number":160,"box":{"x":116,"y":382,"width":122,"height":9}},{"id":"f3124920-3efc-4149-818d-a1d6f33d985f","block_type":"box","text":"Revenue bonds are payable only from the revenues derived from a particular facility","page_number":160,"box":{"x":240,"y":382,"width":634,"height":12}},{"id":"ca2d1cf7-3d21-4ce5-8b0f-c7c029d5de2d","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":160,"box":{"x":116,"y":397,"width":720,"height":12}},{"id":"d877c842-cf54-4018-a226-1ca6fd63b88a","block_type":"box","text":"revenue source such as payments from the user of the facility being financed; accordingly, the timely","page_number":160,"box":{"x":117,"y":413,"width":752,"height":12}},{"id":"9be3c8f0-2342-472a-ade0-c891b85075bd","block_type":"box","text":"payment of interest and the repayment of principal in accordance with the terms of the revenue or","page_number":160,"box":{"x":117,"y":428,"width":729,"height":12}},{"id":"9a3a203e-44d2-4046-aa25-60cd7637f697","block_type":"box","text":"special obligation bond is a function of the economic viability of such facility or such revenue source.","page_number":160,"box":{"x":116,"y":444,"width":749,"height":12}},{"id":"668c9079-d610-449a-ac6c-8b54a4b9f180","block_type":"box","text":"Revenue bonds issued by state or local agencies to finance the development of low-income, multi","page_number":160,"box":{"x":117,"y":475,"width":730,"height":12}},{"id":"a0618dda-e190-4d79-ba9b-c4f4f41c41dc","block_type":"box","text":"family housing involve special risks in addition to those associated with municipal bonds generally,","page_number":160,"box":{"x":116,"y":490,"width":735,"height":12}},{"id":"7548213b-566a-4027-a37b-e8db8e169f30","block_type":"box","text":"including that the underlying properties may not generate sufficient income to pay expenses and","page_number":160,"box":{"x":117,"y":506,"width":718,"height":12}},{"id":"f81ad144-8591-41bd-b422-4c621d84576e","block_type":"box","text":"interest costs. Such bonds are generally non-recourse against the property owner, may be junior to the","page_number":160,"box":{"x":117,"y":521,"width":768,"height":12}},{"id":"6931ef2e-eb4e-41f1-b920-c2627c826a29","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":160,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"162216a9-f84e-4444-84a9-6376b555b51c","block_type":"box","text":"financial performance of the property, may be prepayable without penalty and may be used to finance","page_number":160,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"356cff16-3135-4eab-8beb-8e55b035674e","block_type":"box","text":"the construction of housing developments which, until completed and rented, do not generate income","page_number":160,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"9ffe1d74-c6d8-4c32-8ff2-975ca0248940","block_type":"box","text":"to pay interest. Increases in interest rates payable on senior obligations may make it more difficult for","page_number":160,"box":{"x":116,"y":583,"width":755,"height":12}},{"id":"bbeab196-d1b4-476d-8969-67a225bdcbfb","block_type":"box","text":"issuers to meet payment obligations on subordinated bonds.","page_number":160,"box":{"x":117,"y":599,"width":452,"height":12}},{"id":"66522dac-8a9c-4c86-a610-3f658cf5d022","block_type":"box","text":"PABs.","page_number":160,"box":{"x":116,"y":630,"width":45,"height":9}},{"id":"55a115c2-9a7c-42c1-9ac5-ef881318ff4e","block_type":"box","text":"PABs are, in most cases, tax-exempt securities issued by states, municipalities or public","page_number":160,"box":{"x":162,"y":630,"width":666,"height":12}},{"id":"01756470-26c6-4afa-96ee-5001cc6bf46b","block_type":"box","text":"authorities to provide funds, usually through a loan or lease arrangement, to a private entity for the","page_number":160,"box":{"x":116,"y":645,"width":735,"height":12}},{"id":"6640954e-5b9a-4687-9538-d5f31842d05e","block_type":"box","text":"purpose of financing construction or improvement of a facility to be used by the entity. Such bonds are","page_number":160,"box":{"x":117,"y":661,"width":757,"height":12}},{"id":"5bf2aa9f-4e6d-4a45-a8d7-5dfc6cbe6559","block_type":"box","text":"secured primarily by revenues derived from loan repayments or lease payments due from the entity,","page_number":160,"box":{"x":116,"y":676,"width":741,"height":12}},{"id":"478ebf11-db1f-4453-aba5-b65feb7eedd4","block_type":"box","text":"which may or may not be guaranteed by a parent company or otherwise secured. PABs generally are","page_number":160,"box":{"x":116,"y":692,"width":752,"height":12}},{"id":"33066fb0-f1a4-44b2-9d96-ac118b4df51e","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":160,"box":{"x":117,"y":707,"width":759,"height":12}},{"id":"c9a4b29a-172f-4eb2-b794-beb264d64428","block_type":"box","text":"understand that repayment of such bonds generally depends on the revenues of a private entity and be","page_number":160,"box":{"x":117,"y":723,"width":766,"height":12}},{"id":"2b5a7493-efa7-4bd7-aca3-7a02e62ba811","block_type":"box","text":"aware of the risks that such an investment may entail. The continued ability of an entity to generate","page_number":160,"box":{"x":116,"y":738,"width":736,"height":12}},{"id":"3f24ddc8-3eaa-4187-9ff0-e531e77ab617","block_type":"box","text":"sufficient revenues for the payment of principal and interest on such bonds will be affected by many","page_number":160,"box":{"x":116,"y":754,"width":739,"height":12}},{"id":"a2f93c68-9860-4165-ab71-3c219e48d463","block_type":"box","text":"factors including the size of the entity, its capital structure, demand for its products or services,","page_number":160,"box":{"x":116,"y":769,"width":700,"height":12}},{"id":"4e48e1d9-7152-4924-8bfa-012a8a3df385","block_type":"box","text":"competition, general economic conditions, government regulation and the entity’s dependence on","page_number":160,"box":{"x":116,"y":785,"width":723,"height":12}},{"id":"0c18aa49-4382-4780-80fb-31bbc6657787","block_type":"box","text":"revenues for the operation of the particular facility being financed.","page_number":160,"box":{"x":117,"y":800,"width":485,"height":12}},{"id":"ede8325d-8b64-4d29-8c3e-3330a527b248","block_type":"box","text":"Moral Obligation Bonds.","page_number":160,"box":{"x":116,"y":831,"width":178,"height":12}},{"id":"7b92c67b-3ed9-4ff0-bada-9911dbc13cb8","block_type":"box","text":"“Moral obligation” bonds are normally issued by special purpose public","page_number":160,"box":{"x":295,"y":831,"width":534,"height":12}},{"id":"c6355649-47eb-4634-b059-ada788050432","block_type":"box","text":"authorities. If an issuer of moral obligation bonds is unable to meet its obligations, the repayment of","page_number":160,"box":{"x":116,"y":847,"width":742,"height":12}},{"id":"5d57b79f-3bf7-4fbe-acd1-3944b19034e0","block_type":"box","text":"such bonds becomes a moral commitment but not a legal obligation of the state or municipality that","page_number":160,"box":{"x":116,"y":862,"width":741,"height":12}},{"id":"a82ca63f-9b43-4f81-a056-d5d7e1b065c6","block_type":"box","text":"created the special purpose public authority that issued the bonds.","page_number":160,"box":{"x":116,"y":878,"width":498,"height":12}},{"id":"56deeb8b-6d79-492f-8558-d0ab4b05837e","block_type":"box","text":"II-73","page_number":160,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"90815217-5ed8-4e0e-9468-3ea5d26107a1","block_type":"box","text":"NM1026U-6030748-160/260","page_number":160,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"81ab3dd6-2a54-4145-be11-11ec53172a1a","block_type":"box","text":"Municipal Notes.","page_number":161,"box":{"x":116,"y":87,"width":122,"height":12}},{"id":"b04a13b9-d6fd-4099-b964-c405c74f249f","block_type":"box","text":"Municipal notes are shorter term municipal debt obligations. They may provide interim","page_number":161,"box":{"x":240,"y":87,"width":647,"height":12}},{"id":"8e374b5e-8c65-436d-97f7-76a53ef86bdf","block_type":"box","text":"financing in anticipation of tax collection, bond sales or revenue receipts. If there is a shortfall in the","page_number":161,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"febefc68-a21f-4101-b227-1963c98ba980","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":161,"box":{"x":116,"y":118,"width":772,"height":12}},{"id":"06ed390b-f309-46d8-a639-ae1040970846","block_type":"box","text":"Fund may lose money.","page_number":161,"box":{"x":117,"y":134,"width":174,"height":12}},{"id":"c953be5c-379e-4f11-bd6a-cc8390976582","block_type":"box","text":"Municipal Commercial Paper.","page_number":161,"box":{"x":116,"y":165,"width":218,"height":11}},{"id":"87f569ca-b057-409e-9d00-911036ccffd5","block_type":"box","text":"Municipal commercial paper is generally unsecured and issued to meet","page_number":161,"box":{"x":335,"y":165,"width":539,"height":12}},{"id":"850d3ea9-64b1-4c9f-9de7-30e11c2818a2","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":161,"box":{"x":116,"y":180,"width":728,"height":12}},{"id":"c74aaafa-602c-44c4-9eb5-3ae51af5cf12","block_type":"box","text":"event of an issuer’s bankruptcy, unsecured creditors are repaid only after the secured creditors out of","page_number":161,"box":{"x":116,"y":196,"width":757,"height":12}},{"id":"6dcb8855-1d81-431f-bcb7-199d6dfc6fbc","block_type":"box","text":"the assets, if any, that remain.","page_number":161,"box":{"x":116,"y":211,"width":229,"height":12}},{"id":"06d03cf7-a161-4b12-bc6b-1d169f1cd144","block_type":"box","text":"Municipal Lease Obligations.","page_number":161,"box":{"x":116,"y":242,"width":213,"height":12}},{"id":"f1c8fb25-6cdd-42a3-a0b9-3ee7338b18b8","block_type":"box","text":"Also included within the general category of Municipal Bonds are","page_number":161,"box":{"x":331,"y":242,"width":491,"height":12}},{"id":"e32b1f99-927f-4e14-9b07-203741825413","block_type":"box","text":"certificates of participation (“COPs”) issued by government authorities or entities to finance the","page_number":161,"box":{"x":116,"y":258,"width":706,"height":12}},{"id":"79ca1664-f829-4176-b6ea-18ce598b8deb","block_type":"box","text":"acquisition or construction of equipment, land and/or facilities. The COPs represent participations in a","page_number":161,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"4837a903-039b-4121-9b3b-068c851c5e4b","block_type":"box","text":"lease, an installment purchase contract or a conditional sales contract (hereinafter collectively called","page_number":161,"box":{"x":117,"y":289,"width":748,"height":12}},{"id":"d834af8f-8f3a-42df-8359-90f4dc9f83a1","block_type":"box","text":"“lease obligations”) relating to such equipment, land or facilities. Municipal leases, like other municipal","page_number":161,"box":{"x":116,"y":304,"width":761,"height":12}},{"id":"f3923231-227c-463e-ad68-462c1a243d65","block_type":"box","text":"debt obligations, are subject to the risk of non-payment. Although lease obligations do not constitute","page_number":161,"box":{"x":116,"y":320,"width":747,"height":12}},{"id":"612c43e7-0993-44b2-a978-12cb907368fc","block_type":"box","text":"general obligations of the issuer for which the issuer’s unlimited taxing power is pledged, a lease","page_number":161,"box":{"x":116,"y":335,"width":721,"height":12}},{"id":"4a721b42-d7de-48d0-8d33-c605b11df18e","block_type":"box","text":"obligation is frequently backed by the issuer’s covenant to budget for, appropriate and make the","page_number":161,"box":{"x":116,"y":351,"width":716,"height":12}},{"id":"32519755-490a-4cb1-a8fb-a53b4135b8af","block_type":"box","text":"payments due under the lease obligation. However, certain lease obligations contain","page_number":161,"box":{"x":117,"y":366,"width":631,"height":12}},{"id":"a941909d-682b-4b99-bca3-06dd2143ce0e","block_type":"box","text":"“non-appropriation” clauses, which provide that the issuer has no obligation to make lease or","page_number":161,"box":{"x":116,"y":382,"width":693,"height":12}},{"id":"b78c99c8-6fc4-47b2-a683-1efeb14e80ad","block_type":"box","text":"installment purchase payments in future years unless money is appropriated for such purpose on a","page_number":161,"box":{"x":117,"y":397,"width":739,"height":12}},{"id":"bf5d5fbc-7f12-439a-a0b9-81056051da74","block_type":"box","text":"yearly basis. Although “non-appropriation” lease obligations are secured by the leased property,","page_number":161,"box":{"x":116,"y":413,"width":716,"height":12}},{"id":"680bac70-33f6-48d9-b79c-bff08a4e82b9","block_type":"box","text":"disposition of the property in the event of foreclosure might prove difficult. These securities represent a","page_number":161,"box":{"x":116,"y":428,"width":767,"height":12}},{"id":"65944900-77bb-48ff-b32b-6c18e1870c82","block_type":"box","text":"type of financing that has not yet developed the depth of marketability associated with more","page_number":161,"box":{"x":116,"y":444,"width":685,"height":12}},{"id":"c2008fc7-08a0-449f-a14a-24fea7822664","block_type":"box","text":"conventional securities. Certain investments in lease obligations may be illiquid.","page_number":161,"box":{"x":116,"y":459,"width":596,"height":12}},{"id":"0a578c92-fbac-4663-8d34-d0560cbe0d3d","block_type":"box","text":"The ability of issuers of municipal leases to make timely lease payments may be adversely impacted in","page_number":161,"box":{"x":116,"y":490,"width":769,"height":12}},{"id":"53687896-dfba-40cf-be97-ef6e45269f1c","block_type":"box","text":"general economic downturns and as relative governmental cost burdens are allocated and reallocated","page_number":161,"box":{"x":116,"y":506,"width":762,"height":12}},{"id":"48a2c99c-cec5-4b84-9419-8ea3c031715f","block_type":"box","text":"among federal, state and local governmental units. Such non-payment would result in a reduction of","page_number":161,"box":{"x":116,"y":521,"width":746,"height":12}},{"id":"859445f0-a26f-4409-bee0-5f4dba60d8c7","block_type":"box","text":"income to a Fund, and could result in a reduction in the value of the municipal lease experiencing","page_number":161,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"6cca3db8-ca43-450d-aa49-62a842c3cde8","block_type":"box","text":"non-payment and a potential decrease in the NAV of a Fund. Issuers of municipal securities might","page_number":161,"box":{"x":117,"y":552,"width":731,"height":12}},{"id":"06684d82-1a20-4b2f-a8f2-f9e7e45227de","block_type":"box","text":"seek protection under the bankruptcy laws. In the event of bankruptcy of such an issuer, a Fund could","page_number":161,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"7959f016-7c00-40df-ae64-5ed1302deed5","block_type":"box","text":"experience delays and limitations with respect to the collection of principal and interest on such","page_number":161,"box":{"x":116,"y":583,"width":711,"height":12}},{"id":"3663a126-5f07-4033-af8f-555b3faf66a6","block_type":"box","text":"municipal leases and a Fund may not, in all circumstances, be able to collect all principal and interest","page_number":161,"box":{"x":117,"y":599,"width":755,"height":12}},{"id":"ae82a701-3d07-412a-868f-865dd4fa76d4","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":161,"box":{"x":116,"y":614,"width":740,"height":12}},{"id":"9b933717-de94-41d6-8fed-4726bc84a3e4","block_type":"box","text":"take possession of and manage the assets securing the issuer’s obligations on such securities, which","page_number":161,"box":{"x":116,"y":630,"width":758,"height":12}},{"id":"f3d600d9-6ae8-41d4-a8b5-9dfbd44fe247","block_type":"box","text":"may increase a Fund’s operating expenses and adversely affect the NAV of a Fund. When the lease","page_number":161,"box":{"x":117,"y":645,"width":749,"height":12}},{"id":"3a19f84c-2d25-459d-96ca-02f6134fdeb1","block_type":"box","text":"contains a non-appropriation clause, however, the failure to pay would not be a default and a Fund","page_number":161,"box":{"x":116,"y":661,"width":731,"height":12}},{"id":"bb37f695-e9da-4f67-8990-99420024d146","block_type":"box","text":"would not have the right to take possession of the assets. Any income derived from a Fund’s","page_number":161,"box":{"x":116,"y":676,"width":687,"height":12}},{"id":"baaa89bc-a681-43ee-a6e5-1ecf811f3b74","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":161,"box":{"x":116,"y":692,"width":760,"height":12}},{"id":"f464e1b6-36cf-4d9a-9309-1943cec969db","block_type":"box","text":"as a “regulated investment company” under the Code, may limit the extent to which a Fund may","page_number":161,"box":{"x":116,"y":707,"width":712,"height":12}},{"id":"ffd697cb-dad2-4bc4-8891-bda5f05fc4f3","block_type":"box","text":"exercise its rights by taking possession of such assets, because as a regulated investment company a","page_number":161,"box":{"x":116,"y":723,"width":760,"height":12}},{"id":"bbdb7984-8f43-4c1c-8577-58920edce96c","block_type":"box","text":"Fund is subject to certain limitations on its investments and on the nature of its income.","page_number":161,"box":{"x":117,"y":738,"width":644,"height":12}},{"id":"c036604a-fe5f-4f54-ad35-ee8be81667e4","block_type":"box","text":"Tender Option Bonds.","page_number":161,"box":{"x":118,"y":769,"width":161,"height":12}},{"id":"5e1859cd-0c9a-4012-984d-b9c41734fb18","block_type":"box","text":"Certain Funds may invest in residual inverse floating rate interest tender option","page_number":161,"box":{"x":286,"y":769,"width":585,"height":12}},{"id":"be2d5290-07d4-4c2c-ac35-b4e6941c7cd0","block_type":"box","text":"bonds (“TOB Residuals”), which are derivative interests in Municipal Bonds. The TOB Residuals in","page_number":161,"box":{"x":117,"y":785,"width":730,"height":12}},{"id":"21c09ac5-c354-4b8a-9c84-f93a80106646","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":161,"box":{"x":116,"y":800,"width":710,"height":12}},{"id":"94c5f49a-bd43-455d-923a-861412a66ef7","block_type":"box","text":"exempt from regular U.S. federal income tax. BlackRock will not conduct its own analysis of the tax","page_number":161,"box":{"x":116,"y":816,"width":735,"height":12}},{"id":"d8552e9f-1bfe-4295-a68c-c979d7883be6","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":161,"box":{"x":116,"y":831,"width":772,"height":12}},{"id":"599b8649-88a4-4859-a018-f9b868bff3e1","block_type":"box","text":"counsel to the issuer. Although volatile, TOB Residuals typically offer the potential for yields exceeding","page_number":161,"box":{"x":116,"y":847,"width":767,"height":12}},{"id":"3f65d166-59bb-40cd-a6d9-610079ddda7e","block_type":"box","text":"the yields available on fixed rate Municipal Bonds with comparable credit quality. The Funds may","page_number":161,"box":{"x":116,"y":862,"width":724,"height":12}},{"id":"0eb3d590-908a-41f3-8f20-8ad5c8cdecce","block_type":"box","text":"invest in TOB Residuals for the purpose of using economic leverage.","page_number":161,"box":{"x":117,"y":878,"width":515,"height":12}},{"id":"28170e12-03a1-40d1-90fb-2c84a4a29256","block_type":"box","text":"II-74","page_number":161,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"dc04ef19-7f74-4030-bfac-64c41b717436","block_type":"box","text":"NM1026U-6030748-161/260","page_number":161,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"059af13a-2044-4627-86d7-9559b62112e7","block_type":"box","text":"TOB Residuals represent beneficial interests in a special purpose trust formed for the purpose of","page_number":162,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"23553b4b-7d63-46d1-b486-b8ca062d44b3","block_type":"box","text":"holding Municipal Bonds contributed by one or more funds (a “TOB Trust”). A TOB Trust typically","page_number":162,"box":{"x":117,"y":102,"width":724,"height":13}},{"id":"afe827e3-4940-4b6d-8f32-bafcab46bf93","block_type":"box","text":"issues two classes of beneficial interests: short-term floating rate interests (“TOB Floaters”), which are","page_number":162,"box":{"x":117,"y":118,"width":762,"height":12}},{"id":"ffad0b00-b824-4f9c-baf2-85d09113a988","block_type":"box","text":"sold to third-party investors, and TOB Residuals, which are generally issued to the fund(s) that","page_number":162,"box":{"x":116,"y":134,"width":706,"height":12}},{"id":"d179db4f-1d33-4d54-87db-03cb9231577b","block_type":"box","text":"transferred Municipal Bonds to the TOB Trust. The Funds may invest in both TOB Floaters and TOB","page_number":162,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"8f93cfd7-120e-4322-b959-bde35f4fa776","block_type":"box","text":"Residuals. TOB Floaters may have first priority on the cash flow from the Municipal Bonds held by the","page_number":162,"box":{"x":117,"y":165,"width":759,"height":12}},{"id":"ce99053d-55f5-426a-9480-85a2d36d7cb3","block_type":"box","text":"TOB Trust and are enhanced with a liquidity support arrangement from a third-party Liquidity Provider","page_number":162,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"95d9c6b6-3f71-4892-bf1d-d821d55ebbc1","block_type":"box","text":"(defined below) which allows holders to tender their position at par (plus accrued interest). A Fund, as","page_number":162,"box":{"x":117,"y":196,"width":758,"height":12}},{"id":"ba71e214-0911-4ced-9077-191d30c69f76","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":162,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"624d9b0a-7208-40d1-88ab-d1a2c27e34b2","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":162,"box":{"x":116,"y":227,"width":757,"height":12}},{"id":"49841cdb-0efd-49af-9e62-d4539be9ecc6","block_type":"box","text":"TOB Floaters, less certain transaction costs, and typically will invest the cash to purchase additional","page_number":162,"box":{"x":116,"y":242,"width":746,"height":12}},{"id":"eacbd713-1dc5-47f2-8502-168ef33d78a4","block_type":"box","text":"Municipal Bonds or other investments permitted by its investment policies. If a Fund ever purchases all","page_number":162,"box":{"x":117,"y":258,"width":767,"height":12}},{"id":"24b25096-3f97-488b-81bd-718a7909d581","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":162,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"8682533d-cc73-445c-9433-4a1b66e3c070","block_type":"box","text":"with a proportionate amount of TOB Residuals to the TOB Trust in exchange for a proportionate","page_number":162,"box":{"x":116,"y":289,"width":717,"height":12}},{"id":"878d8f00-a826-456f-88a4-273c3cf3cec2","block_type":"box","text":"amount of the Municipal Bonds owned by the TOB Trust.","page_number":162,"box":{"x":116,"y":304,"width":427,"height":12}},{"id":"8acfe224-7ed0-4426-83f9-6b7c58e10558","block_type":"box","text":"Other BlackRock-advised funds may contribute Municipal Bonds to a TOB Trust into which a Fund has","page_number":162,"box":{"x":116,"y":335,"width":767,"height":12}},{"id":"605a2e4f-92f2-4638-8478-6efa2be51c03","block_type":"box","text":"contributed Municipal Bonds. If multiple BlackRock-advised funds participate in the same TOB Trust,","page_number":162,"box":{"x":116,"y":351,"width":752,"height":12}},{"id":"8c345cb9-8022-40af-86b1-2639d0517034","block_type":"box","text":"the economic rights and obligations under the TOB Residual will generally be shared among the funds","page_number":162,"box":{"x":116,"y":366,"width":764,"height":12}},{"id":"1701da9a-151f-41b9-a3d4-9befe113b55c","block_type":"box","text":"ratably in proportion to their participation in the TOB Trust.","page_number":162,"box":{"x":117,"y":382,"width":437,"height":12}},{"id":"97944330-b825-4b04-9aca-4a16508c31f1","block_type":"box","text":"The Municipal Bonds transferred to a TOB Trust typically are high grade Municipal Bonds. In certain","page_number":162,"box":{"x":116,"y":413,"width":747,"height":12}},{"id":"8eb72278-35ad-431a-b3e3-cccd1d7aa833","block_type":"box","text":"cases, when Municipal Bonds transferred are lower grade Municipal Bonds, the TOB Trust transaction","page_number":162,"box":{"x":116,"y":428,"width":764,"height":12}},{"id":"02fd43bc-f99c-4ee7-b771-42a0403c3553","block_type":"box","text":"includes a credit enhancement feature that provides for the timely payment of principal and interest on","page_number":162,"box":{"x":117,"y":444,"width":762,"height":12}},{"id":"ae1f0a8a-f9cb-4772-b10c-9237308f492f","block_type":"box","text":"the bonds to the TOB Trust by a credit enhancement provider. The TOB Trust would be responsible for","page_number":162,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"9d4ca45d-0aaf-42eb-877b-55211aa10d0c","block_type":"box","text":"the payment of the credit enhancement fee and a Fund, as a TOB Residual holder, would be","page_number":162,"box":{"x":116,"y":475,"width":693,"height":12}},{"id":"4457fbaa-ddd1-4696-95a7-d40275290bdc","block_type":"box","text":"responsible for reimbursement of any payments of principal and interest made by the credit","page_number":162,"box":{"x":117,"y":490,"width":681,"height":12}},{"id":"3e60c8cd-26ea-49de-9388-d4a1f85f40c5","block_type":"box","text":"enhancement provider.","page_number":162,"box":{"x":116,"y":506,"width":176,"height":12}},{"id":"558a16ec-e919-4463-83d8-fdca0cbf425c","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":162,"box":{"x":116,"y":537,"width":760,"height":12}},{"id":"e159ce3f-a441-4132-a950-957b2e58ad2f","block_type":"box","text":"proportional share of the TOB Floaters to tender their notes to the TOB Trust at par plus accrued","page_number":162,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"b3621c0e-be63-45e9-81c2-206abdfb29ad","block_type":"box","text":"interest. Thereafter, the Fund may withdraw a corresponding share of the Municipal Bonds from the","page_number":162,"box":{"x":117,"y":568,"width":743,"height":12}},{"id":"2b96734a-849c-4bf2-8fe9-3393f590dbb6","block_type":"box","text":"TOB Trust. This transaction, in effect, creates exposure for the Fund to the entire return of the","page_number":162,"box":{"x":116,"y":583,"width":702,"height":12}},{"id":"ffe05b8d-6865-4d66-846d-c7b4474700a2","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":162,"box":{"x":117,"y":599,"width":770,"height":12}},{"id":"533b619c-d904-4b46-aa54-42df2462ac6d","block_type":"box","text":"the Municipal Bonds in the TOB Trust. This multiplies the positive or negative impact of the Municipal","page_number":162,"box":{"x":116,"y":614,"width":755,"height":12}},{"id":"a8818599-4a0d-42ff-8012-45eab634313a","block_type":"box","text":"Bonds’ return within the Fund (thereby creating leverage). The leverage within a TOB Trust depends","page_number":162,"box":{"x":117,"y":630,"width":749,"height":12}},{"id":"7ef38935-ef0f-422e-a3d1-a979fe23afde","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":162,"box":{"x":116,"y":645,"width":714,"height":12}},{"id":"429adb73-ff1e-4d94-9aa2-dfcb738821ba","block_type":"box","text":"Floaters it issues.","page_number":162,"box":{"x":117,"y":661,"width":128,"height":9}},{"id":"a5b5219a-0be5-4c3b-a23b-a080c40abcc2","block_type":"box","text":"A Fund may invest in highly leveraged TOB Residuals. A TOB Residual generally is considered highly","page_number":162,"box":{"x":116,"y":692,"width":757,"height":12}},{"id":"766157f5-0fc9-4929-920a-6decf5efa10d","block_type":"box","text":"leveraged if the principal amount of the TOB Floaters issued by the related TOB Trust exceeds 75% of","page_number":162,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"3e267422-e591-4660-8f71-e39a9e70d36b","block_type":"box","text":"the principal amount of the Municipal Bonds owned by the TOB Trust.","page_number":162,"box":{"x":116,"y":723,"width":516,"height":12}},{"id":"781fcdff-54bb-4a1e-b2bb-4032296d816f","block_type":"box","text":"The TOB Trust may be collapsed without the consent of a Fund upon the occurrence of tender option","page_number":162,"box":{"x":116,"y":754,"width":751,"height":12}},{"id":"7f4a631e-7b7d-4a74-9312-fed222e0b555","block_type":"box","text":"termination events (“TOTEs”) and mandatory termination events (“MTEs”), as defined in the TOB Trust","page_number":162,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"43ca9ac1-4f82-4c7f-862b-9b3bf9a9fb66","block_type":"box","text":"agreements. TOTEs include the bankruptcy or default of the issuer of the Municipal Bonds held in the","page_number":162,"box":{"x":116,"y":785,"width":752,"height":12}},{"id":"96925931-15aa-4378-94bd-5898f816779b","block_type":"box","text":"TOB Trust, a substantial downgrade in the credit quality of the issuer of the Municipal Bonds held in","page_number":162,"box":{"x":116,"y":800,"width":739,"height":12}},{"id":"99a81637-aec7-47f5-86ad-8328704024c5","block_type":"box","text":"the TOB Trust, failure of any scheduled payment of principal or interest on the Municipal Bonds, and a","page_number":162,"box":{"x":116,"y":816,"width":758,"height":12}},{"id":"8d1fbae9-c5e6-4536-ab9a-06aa2f0ccc93","block_type":"box","text":"judgment or ruling that interest on the Municipal Bonds is subject to U.S. federal income taxation.","page_number":162,"box":{"x":115,"y":831,"width":727,"height":12}},{"id":"7dc62293-4322-4568-abe1-7b995de18562","block_type":"box","text":"MTEs may include, among other things, a failed remarketing of the TOB Floaters, the inability of the","page_number":162,"box":{"x":117,"y":847,"width":745,"height":12}},{"id":"39636415-517c-4272-a05f-bfc7147fbc67","block_type":"box","text":"TOB Trust to obtain renewal of the liquidity support agreement, and a substantial decline in the market","page_number":162,"box":{"x":116,"y":862,"width":765,"height":12}},{"id":"01537bb2-25b2-4b69-ae88-43f7245ebec6","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":162,"box":{"x":116,"y":878,"width":734,"height":12}},{"id":"344256d3-f166-4ef0-be72-265d92ab5d50","block_type":"box","text":"II-75","page_number":162,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2a5f6486-8314-4f0b-bb0e-382ae2770ffd","block_type":"box","text":"NM1026U-6030748-162/260","page_number":162,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cec53cf2-340f-4455-bb59-3640867dadee","block_type":"box","text":"TOB Trust would be liquidated with the proceeds applied first to any accrued fees owed to the trustee","page_number":163,"box":{"x":116,"y":87,"width":758,"height":12}},{"id":"bc22efe6-ff03-4fab-8cdc-699c1e4bbde8","block_type":"box","text":"of the TOB Trust, the remarketing agent of the TOB Floaters and the Liquidity Provider (defined","page_number":163,"box":{"x":116,"y":102,"width":714,"height":13}},{"id":"eee8e817-869f-402c-a170-9061dce391a3","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":163,"box":{"x":117,"y":118,"width":739,"height":12}},{"id":"e1abf3d2-4aa8-4ae5-b576-c86f11b7e85d","block_type":"box","text":"paid senior to the TOB Residual holders (","page_number":163,"box":{"x":117,"y":134,"width":307,"height":12}},{"id":"6f77a8af-3700-475f-82b0-780efb5060fa","block_type":"box","text":"i.e.","page_number":163,"box":{"x":425,"y":134,"width":20,"height":9}},{"id":"35774c17-2821-40ed-9581-93b5f4c340d6","block_type":"box","text":", the Fund). In contrast, in the case of a TOTE, after","page_number":163,"box":{"x":448,"y":134,"width":389,"height":12}},{"id":"28af426a-909b-4342-bf84-5cf9360d6004","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":163,"box":{"x":117,"y":149,"width":759,"height":12}},{"id":"31abd51e-3b8c-4bf8-a395-40eb524740f8","block_type":"box","text":"proportion to the respective face values of their certificates.","page_number":163,"box":{"x":117,"y":165,"width":443,"height":11}},{"id":"d38ada60-0dbc-46e4-992e-33b3be299080","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":163,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"2fe7c992-5e38-4a7d-9b90-315e47248906","block_type":"box","text":"supported by a liquidity facility provided by a third-party bank or other financial institution (the “Liquidity","page_number":163,"box":{"x":116,"y":211,"width":766,"height":12}},{"id":"80dd8390-f8ae-4ff9-abb1-c0926046d839","block_type":"box","text":"Provider”) that allows the holders of the TOB Floaters to tender their TOB Floaters in exchange for","page_number":163,"box":{"x":117,"y":227,"width":734,"height":12}},{"id":"42852f0a-aa7e-47f8-84b9-1f28c646358d","block_type":"box","text":"payment of par plus accrued interest on any business day (subject to the non-occurrence of a TOTE","page_number":163,"box":{"x":117,"y":242,"width":748,"height":12}},{"id":"75628671-7e97-435e-bf01-43487307c8b1","block_type":"box","text":"described above). Depending on the structure of the TOB Trust, the Liquidity Provider may purchase","page_number":163,"box":{"x":116,"y":258,"width":752,"height":12}},{"id":"700e2a89-bd9e-4ebc-b159-1006f0c40c64","block_type":"box","text":"the tendered TOB Floaters, or the TOB Trust may draw upon a loan from the Liquidity Provider to","page_number":163,"box":{"x":116,"y":273,"width":728,"height":12}},{"id":"2676dba5-4736-4f52-9a5c-2ff3fc831ba0","block_type":"box","text":"purchase the tendered TOB Floaters.","page_number":163,"box":{"x":117,"y":289,"width":281,"height":12}},{"id":"1b96622f-c781-4392-b4ed-33fb9b98c7f2","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":163,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"3f040d92-79e8-4176-8b04-8bd88457ed27","block_type":"box","text":"make a payment under the liquidity facility, the Liquidity Provider will typically liquidate all or a portion","page_number":163,"box":{"x":117,"y":335,"width":753,"height":12}},{"id":"626e0c71-66d9-4129-afdc-3437ad454fc5","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":163,"box":{"x":116,"y":351,"width":746,"height":12}},{"id":"c1a11327-cd07-4e2a-a1cc-220363fe5a8f","block_type":"box","text":"under the liquidity facility over the liquidation proceeds (the “Liquidation Shortfall”). If a Fund invests in","page_number":163,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"e518ebb6-1ea2-40d1-a54d-3617e7da491e","block_type":"box","text":"a TOB Trust on a recourse basis, it will typically enter into a reimbursement agreement with the","page_number":163,"box":{"x":116,"y":382,"width":712,"height":12}},{"id":"fbe24eee-e668-4021-8405-36c45196a645","block_type":"box","text":"Liquidity Provider pursuant to which the Fund is required to reimburse the Liquidity Provider the","page_number":163,"box":{"x":117,"y":397,"width":712,"height":12}},{"id":"0c5928e9-7b42-47df-a331-c2ea3fef8386","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":163,"box":{"x":116,"y":413,"width":759,"height":12}},{"id":"4bafb7ac-1e6a-4073-9c31-460a4b3f11a4","block_type":"box","text":"will bear the risk of loss with respect to any Liquidation Shortfall. If multiple BlackRock-advised funds","page_number":163,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"424615f1-ba26-4608-98e8-39cfe6c095c8","block_type":"box","text":"participate in any such TOB Trust, these losses will be shared ratably, in proportion to their","page_number":163,"box":{"x":117,"y":444,"width":678,"height":12}},{"id":"4f471dc7-d6f4-499d-a811-ff5bcc9238fa","block_type":"box","text":"participation in the TOB Trust.","page_number":163,"box":{"x":117,"y":459,"width":227,"height":12}},{"id":"c31ba5d4-b415-41a2-a906-fde14d7b81f7","block_type":"box","text":"Under accounting rules, Municipal Bonds of a Fund that are deposited into a TOB Trust are","page_number":163,"box":{"x":117,"y":490,"width":682,"height":12}},{"id":"2f4750d8-369d-4a60-93af-baff1d5ad958","block_type":"box","text":"investments of the Fund and are presented on the Fund’s Schedule of Investments and outstanding","page_number":163,"box":{"x":117,"y":506,"width":745,"height":12}},{"id":"193175da-83a0-41c6-9c20-f9dc3ea5b69a","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":163,"box":{"x":116,"y":521,"width":765,"height":12}},{"id":"372c8bb1-00c4-4e45-9632-0be4a90f42d7","block_type":"box","text":"Liabilities. Interest income from the underlying Municipal Bonds is recorded by a Fund on an accrual","page_number":163,"box":{"x":117,"y":537,"width":747,"height":12}},{"id":"d013c0c3-022b-4a09-b2d0-e765907829da","block_type":"box","text":"basis. Interest expense incurred on the","page_number":163,"box":{"x":117,"y":552,"width":288,"height":12}},{"id":"b73bf6f8-b493-482e-8c95-b7c4ae9deb9e","block_type":"box","text":"TOB Floaters and other expenses related to remarketing,","page_number":163,"box":{"x":409,"y":552,"width":430,"height":12}},{"id":"1f4cbb4d-949e-4609-a43e-883da97f8a25","block_type":"box","text":"administration, trustee and other services to a TOB Trust are reported as expenses of a Fund. In","page_number":163,"box":{"x":116,"y":568,"width":722,"height":12}},{"id":"9c927996-1be8-46c2-b784-58138ea409fe","block_type":"box","text":"addition, under accounting rules, loans made to a TOB Trust sponsored by a Fund may be presented","page_number":163,"box":{"x":116,"y":583,"width":757,"height":12}},{"id":"aefb6e45-6046-4349-b237-4152ab352ea2","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":163,"box":{"x":116,"y":599,"width":721,"height":9}},{"id":"efe931b7-8f0d-40d0-a0d0-bf0e581ce3ca","block_type":"box","text":"assets.","page_number":163,"box":{"x":116,"y":614,"width":58,"height":10}},{"id":"9fb0ad05-a905-4b81-99d9-90d5657bf6a1","block_type":"box","text":"For TOB Floaters, generally, the interest rate earned will be based upon the market rates for Municipal","page_number":163,"box":{"x":117,"y":645,"width":765,"height":12}},{"id":"336715e4-17b9-46fc-b90f-55e227f0d96f","block_type":"box","text":"Bonds with maturities or remarketing provisions that are comparable in duration to the periodic interval","page_number":163,"box":{"x":117,"y":661,"width":758,"height":12}},{"id":"e1da9bf4-04dd-4bf6-91be-21096f6c63f3","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":163,"box":{"x":116,"y":676,"width":743,"height":12}},{"id":"1eeebb7a-4f71-450a-85fc-00a82712b7f7","block_type":"box","text":"call date of the underlying Municipal Bonds deposited in the TOB Trust, the holder of the TOB Floaters","page_number":163,"box":{"x":116,"y":692,"width":761,"height":12}},{"id":"fda6476a-6e77-4114-a954-3ef9866d962c","block_type":"box","text":"relies upon the terms of the agreement with the financial institution furnishing the liquidity facility as","page_number":163,"box":{"x":117,"y":707,"width":732,"height":12}},{"id":"24406154-01f1-4213-8974-a56dacd36024","block_type":"box","text":"well as the credit strength of that institution. The risk associated with TOB Floaters, however, may be","page_number":163,"box":{"x":116,"y":723,"width":749,"height":12}},{"id":"780ae48f-589b-4e49-9592-88cf800a110a","block_type":"box","text":"increased in the current market environment as a result of recent downgrades to the credit ratings, and","page_number":163,"box":{"x":117,"y":738,"width":761,"height":12}},{"id":"c520ca7e-e061-4b1a-ae53-4f84fdf58d9e","block_type":"box","text":"thus the perceived reliability and creditworthiness, of many major financial institutions, some of which","page_number":163,"box":{"x":116,"y":754,"width":749,"height":12}},{"id":"8c1f832e-417f-4571-b426-be2febd71e9e","block_type":"box","text":"sponsor and/or provide liquidity support to TOB Trusts. This in turn may reduce the desirability of TOB","page_number":163,"box":{"x":116,"y":769,"width":758,"height":12}},{"id":"7f7fcb1c-b8a5-4058-9fa6-bc3fd1167bd0","block_type":"box","text":"Floaters as investments, which could impair the viability or availability of TOB Trusts.","page_number":163,"box":{"x":117,"y":785,"width":627,"height":12}},{"id":"ac5e7a92-6f36-4157-b51f-f99162db7db7","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into TOB Trust transactions,","page_number":163,"box":{"x":117,"y":816,"width":737,"height":12}},{"id":"30d73bc0-7463-44ae-bf3d-cdc6008aebfd","block_type":"box","text":"reverse repurchase agreements and similar financing transactions (e.g., borrowed bonds)","page_number":163,"box":{"x":117,"y":831,"width":670,"height":12}},{"id":"323dd9a5-f906-42aa-ad79-5d86a92edf55","block_type":"box","text":"notwithstanding the limitation on the issuance of senior securities in Section 18 of the Investment","page_number":163,"box":{"x":117,"y":847,"width":723,"height":12}},{"id":"1cd15230-1dc4-497e-a9ef-6b47fbe6f336","block_type":"box","text":"Company Act, provided that the Fund either (i) complies with the 300% asset coverage ratio with","page_number":163,"box":{"x":117,"y":862,"width":721,"height":12}},{"id":"b0d7d0a3-4e28-4f6b-95b1-46532ec8384c","block_type":"box","text":"respect to such transactions and any other borrowings in the aggregate, or (ii) treats such transactions","page_number":163,"box":{"x":117,"y":878,"width":764,"height":12}},{"id":"2dd8dfc0-f81f-49fe-8942-2540c05175f2","block_type":"box","text":"II-76","page_number":163,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"86c287c5-9832-427b-aa63-2b0fe2dcde7d","block_type":"box","text":"NM1026U-6030748-163/260","page_number":163,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8ca10bcc-6ed2-459a-86f3-b112bb7db21f","block_type":"box","text":"as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of Derivatives —","page_number":164,"box":{"x":116,"y":87,"width":730,"height":12}},{"id":"092e1efd-c4e5-4731-abcf-d5e61ef473cd","block_type":"box","text":"Rule 18f-4 under the Investment Company Act” above.","page_number":164,"box":{"x":117,"y":102,"width":411,"height":13}},{"id":"655b86a5-ff27-4726-82f0-e403c79e8dbb","block_type":"box","text":"Developments in the TOB Trust Market.","page_number":164,"box":{"x":116,"y":134,"width":301,"height":11}},{"id":"12870140-208f-476a-9489-4f3c261f7b50","block_type":"box","text":"In response to the restrictions imposed by section 619 of the","page_number":164,"box":{"x":419,"y":134,"width":452,"height":12}},{"id":"e43f249b-f3ad-4389-8e79-79eee9b05961","block_type":"box","text":"Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Volcker Rule”), market participants","page_number":164,"box":{"x":117,"y":149,"width":766,"height":12}},{"id":"b87a5dec-6cd4-4975-8c49-c94ee93ac4ff","block_type":"box","text":"have developed a structure for TOB Trusts designed to ensure that no banking entity is sponsoring the","page_number":164,"box":{"x":117,"y":165,"width":766,"height":12}},{"id":"8eafba26-5f2c-4560-b56a-7d1650f515e8","block_type":"box","text":"TOB Trust for purposes of the Volcker Rule. Specifically, a Fund will establish, structure and “sponsor”","page_number":164,"box":{"x":116,"y":180,"width":765,"height":12}},{"id":"2b4c2f77-595e-4d23-9859-58626fe22a2b","block_type":"box","text":"the TOB Trusts in which it holds TOB Residuals. In such a structure, certain responsibilities that","page_number":164,"box":{"x":116,"y":196,"width":715,"height":11}},{"id":"f47cfccd-103f-4c3a-8e01-07aaecacd096","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":164,"box":{"x":117,"y":211,"width":740,"height":12}},{"id":"94c715b7-4705-4aef-a5a9-f8bcabde0cd7","block_type":"box","text":"utilize service providers in meeting these responsibilities. It is possible that regulators could take","page_number":164,"box":{"x":117,"y":227,"width":717,"height":12}},{"id":"32a376c7-7e7d-43b7-a707-c86e2b985fb7","block_type":"box","text":"positions that could limit the market for such structured TOB Trust transactions or a Fund’s ability to","page_number":164,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"661a339f-5ffc-4b24-bfc8-5a017186e9e2","block_type":"box","text":"hold TOB Residuals. Under this TOB Trust structure, a Fund has certain additional duties and","page_number":164,"box":{"x":117,"y":258,"width":699,"height":11}},{"id":"4a97fd17-5606-49d7-a652-7f976d5026d4","block_type":"box","text":"responsibilities, which may give rise to certain additional risks including","page_number":164,"box":{"x":117,"y":273,"width":525,"height":12}},{"id":"f76ae881-07ce-4ba1-b813-a54dade8aa75","block_type":"box","text":",","page_number":164,"box":{"x":643,"y":281,"width":3,"height":3}},{"id":"31da2c7f-fe20-4746-9305-9efb4c7f1c06","block_type":"box","text":"but not limited to, compliance,","page_number":164,"box":{"x":648,"y":273,"width":232,"height":12}},{"id":"8798570f-4e34-4a99-a3e4-89c8f527da75","block_type":"box","text":"securities law and operational risks.","page_number":164,"box":{"x":116,"y":289,"width":270,"height":12}},{"id":"e2a7d2dd-347d-4ee6-aeb4-a58b9881b6c7","block_type":"box","text":"Under this structure, service providers to a TOB Trust, such as administrators, liquidity providers,","page_number":164,"box":{"x":117,"y":320,"width":724,"height":12}},{"id":"06af7c8e-7c04-497e-9ca1-77534d7195ef","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":164,"box":{"x":116,"y":335,"width":764,"height":12}},{"id":"99cac0a2-3a83-4b48-939b-079a3b849f58","block_type":"box","text":"holder. Similar to the traditional tender option bond structure, a Fund deposits Municipal Bonds into the","page_number":164,"box":{"x":117,"y":351,"width":768,"height":12}},{"id":"9d19759c-d116-4b5c-b551-e6c344ad8d31","block_type":"box","text":"TOB Trust in exchange for TOB Residuals, the TOB Trust then issues and sells TOB Floaters to third","page_number":164,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"e7502dd8-856b-4249-bb72-10b23e9d9332","block_type":"box","text":"party investors, and the proceeds of the sale of the TOB Floaters is distributed to such TOB Residual","page_number":164,"box":{"x":117,"y":382,"width":754,"height":12}},{"id":"77e2450d-128c-4a3c-8706-0dc19d24d455","block_type":"box","text":"holders (","page_number":164,"box":{"x":117,"y":397,"width":64,"height":12}},{"id":"c1aef58c-43cc-4168-87d6-f62b31576519","block_type":"box","text":"i.e.","page_number":164,"box":{"x":182,"y":397,"width":20,"height":10}},{"id":"19ed2419-33b3-4865-b937-b28844028b82","block_type":"box","text":", the Fund). Tendered TOB Floaters continue to be supported by a remarketing agent and","page_number":164,"box":{"x":205,"y":397,"width":671,"height":12}},{"id":"494815d5-f544-4e8e-abfa-b9c530eb16ff","block_type":"box","text":"a liquidity facility. However, the remarketing agent does not purchase tendered TOB Floaters for its","page_number":164,"box":{"x":116,"y":413,"width":740,"height":12}},{"id":"02f7341a-9b01-42ee-af5f-ff1bb728c74a","block_type":"box","text":"own account in the event of a failed remarketing, which may increase the likelihood that a TOB Trust","page_number":164,"box":{"x":116,"y":428,"width":751,"height":12}},{"id":"ad4069fa-f521-48f8-956d-427652c5fc7a","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":164,"box":{"x":116,"y":444,"width":772,"height":12}},{"id":"2f8abfb8-7393-4744-9337-32279aadac10","block_type":"box","text":"a failed remarketing of TOB Floaters, the Liquidity Provider, at its option, may advance a loan to the","page_number":164,"box":{"x":116,"y":459,"width":745,"height":12}},{"id":"2a99b4d2-3bef-428c-84ad-11bf1d63911f","block_type":"box","text":"TOB Trust the proceeds of which would be used by the TOB Trust to purchase the tendered TOB","page_number":164,"box":{"x":116,"y":475,"width":728,"height":12}},{"id":"5037aa3e-503c-47a2-adb1-e06b625625ae","block_type":"box","text":"Floaters. The Liquidity Provider is not obligated to advance such a loan. The TOB Trust would be the","page_number":164,"box":{"x":117,"y":490,"width":753,"height":12}},{"id":"875e7ae0-85d5-4a8e-b144-a3a2651ecd5c","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":164,"box":{"x":117,"y":506,"width":758,"height":12}},{"id":"aa77e5ab-dfa0-4602-afb4-a84f57fce6ac","block_type":"box","text":"purchased TOB Floaters held by the TOB Trust.","page_number":164,"box":{"x":117,"y":521,"width":361,"height":12}},{"id":"560915c1-0a16-4301-b342-13862b0eafac","block_type":"box","text":"Similar to the traditional structure for TOB Trusts, a Fund may hold either non-recourse TOB Residuals","page_number":164,"box":{"x":116,"y":552,"width":769,"height":12}},{"id":"26e4b83d-6327-4dfa-b16e-2312dfe79d76","block_type":"box","text":"or recourse TOB Residuals under this structure. In the event of a Liquidation Shortfall, there would","page_number":164,"box":{"x":116,"y":568,"width":735,"height":12}},{"id":"b565078f-fefd-473c-bd71-72f0e9bc6d67","block_type":"box","text":"generally be no contractual recourse to the Fund’s assets if the Fund holds a non-recourse TOB","page_number":164,"box":{"x":116,"y":583,"width":718,"height":12}},{"id":"675a8d2b-5e43-46c5-a607-9c400eed0e1d","block_type":"box","text":"Residual. However, as described above, a Fund would bear the risk of loss with respect to any","page_number":164,"box":{"x":117,"y":599,"width":706,"height":12}},{"id":"2f5bd164-240c-41e1-a162-10267238513e","block_type":"box","text":"Liquidation Shortfall if it holds a recourse TOB Residual.","page_number":164,"box":{"x":117,"y":614,"width":420,"height":12}},{"id":"77f8403d-aad2-4e41-ac2e-64d912d0fa12","block_type":"box","text":"The SEC and various federal banking and housing agencies adopted credit risk retention rules for","page_number":164,"box":{"x":116,"y":645,"width":730,"height":12}},{"id":"675180a0-aa98-47f5-b69f-e094c7dc420e","block_type":"box","text":"securitizations (the “Risk Retention Rules”), which took effect in December 2016. The Risk Retention","page_number":164,"box":{"x":116,"y":661,"width":747,"height":12}},{"id":"72ff1406-c344-43df-945e-c3a009a9c1cf","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":164,"box":{"x":117,"y":676,"width":766,"height":12}},{"id":"d226b207-2c08-4d3f-ae9c-10c941ecdd78","block_type":"box","text":"supporting the TOB Trust’s Municipal Bonds. The Risk Retention Rules may adversely affect the","page_number":164,"box":{"x":116,"y":692,"width":716,"height":12}},{"id":"3a26e92a-fdd3-4b21-a613-48beeaa6f00c","block_type":"box","text":"Fund’s ability to engage in TOB Trust transactions or increase the costs of such transactions in certain","page_number":164,"box":{"x":117,"y":707,"width":758,"height":12}},{"id":"70eb3c25-4c6f-468b-a38c-b711e0cada67","block_type":"box","text":"circumstances.","page_number":164,"box":{"x":116,"y":723,"width":110,"height":9}},{"id":"c9074714-0fdb-4153-8f20-87561ffe36cf","block_type":"box","text":"TOB Trust transactions constitute an important component of the municipal bond market. Accordingly,","page_number":164,"box":{"x":116,"y":754,"width":756,"height":12}},{"id":"ab17a8c1-602f-458f-aef4-0a07f15f5680","block_type":"box","text":"implementation of the Volcker Rule may adversely impact the municipal market, including through","page_number":164,"box":{"x":117,"y":769,"width":723,"height":12}},{"id":"b1e7ea18-46b3-4939-8d44-231754940ad6","block_type":"box","text":"reduced demand for and liquidity of municipal bonds and increased financing costs for municipal","page_number":164,"box":{"x":117,"y":785,"width":713,"height":12}},{"id":"dadb43fd-c1b1-4664-b9ff-374d88dae241","block_type":"box","text":"issuers. Any such developments could adversely affect the Funds. The ultimate impact of these rules","page_number":164,"box":{"x":117,"y":800,"width":749,"height":12}},{"id":"c68f62d2-05ed-4bf0-9d1d-e739a40eafa7","block_type":"box","text":"on the TOB market and the overall municipal market is not yet certain.","page_number":164,"box":{"x":116,"y":816,"width":520,"height":12}},{"id":"22093d2f-f804-4ed1-a258-3f06f1646e7d","block_type":"box","text":"Yields.","page_number":164,"box":{"x":118,"y":847,"width":47,"height":9}},{"id":"810f0e1e-c9ad-4c43-8145-6063041be9b4","block_type":"box","text":"Yields on Municipal Bonds are dependent on a variety of factors, including the general","page_number":164,"box":{"x":166,"y":847,"width":650,"height":12}},{"id":"2aeb7dcf-0f7b-4976-851c-9bddd0774268","block_type":"box","text":"condition of the money market and of the municipal bond market, the size of a particular offering, the","page_number":164,"box":{"x":116,"y":862,"width":751,"height":12}},{"id":"5057af0e-ba79-42e7-9946-5b2e165cbcc3","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":164,"box":{"x":116,"y":878,"width":759,"height":12}},{"id":"b3887b19-06e5-44a6-88ea-b520e4091538","block_type":"box","text":"II-77","page_number":164,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c3c1df7c-8056-4a57-85e1-e9fda11e9c86","block_type":"box","text":"NM1026U-6030748-164/260","page_number":164,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d5b37659-fd71-4205-b487-2c147543dfd6","block_type":"box","text":"a Fund to achieve its investment objective is also dependent on the continuing ability of the issuers of","page_number":165,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"62ced2a0-4f29-4fd2-b571-f6d9365e576e","block_type":"box","text":"the securities in which the Fund invests to meet their obligations for the payment of interest and","page_number":165,"box":{"x":116,"y":102,"width":714,"height":13}},{"id":"77b5a372-af03-4923-90d0-00e5bab3c25a","block_type":"box","text":"principal when due. There are variations in the risks involved in holding Municipal Bonds, both within a","page_number":165,"box":{"x":117,"y":118,"width":763,"height":12}},{"id":"5a0d69e8-45a3-41e8-bed1-13e36c2cf9e2","block_type":"box","text":"particular classification and between classifications, depending on numerous factors. Furthermore, the","page_number":165,"box":{"x":117,"y":134,"width":763,"height":12}},{"id":"351ee4cf-f7f4-4f14-94e8-dfca1763fa6b","block_type":"box","text":"rights of owners of Municipal Bonds and the obligations of the issuer of such Municipal Bonds may be","page_number":165,"box":{"x":117,"y":149,"width":758,"height":12}},{"id":"87760802-f30a-46f7-b65b-d44d9b7fb29d","block_type":"box","text":"subject to applicable bankruptcy, insolvency and similar laws and court decisions affecting the rights of","page_number":165,"box":{"x":116,"y":165,"width":767,"height":12}},{"id":"e435bd6a-dc10-416d-86ce-402f4a20031a","block_type":"box","text":"creditors generally and to general equitable principles, which may limit the enforcement of certain","page_number":165,"box":{"x":116,"y":180,"width":727,"height":12}},{"id":"e7774521-8ec9-4805-ac5c-5a4c10fde6a7","block_type":"box","text":"remedies.","page_number":165,"box":{"x":117,"y":196,"width":77,"height":9}},{"id":"f6b0396a-2494-48b3-8a75-9e9590aef49d","block_type":"box","text":"Variable Rate Demand Obligations (“VRDOs”).","page_number":165,"box":{"x":118,"y":227,"width":344,"height":12}},{"id":"33b8da45-6f6d-4d69-9d95-380e386cbf64","block_type":"box","text":"VRDOs are tax-exempt obligations that contain a","page_number":165,"box":{"x":464,"y":227,"width":374,"height":12}},{"id":"34585bee-80f2-42f4-ab54-1e599561985a","block_type":"box","text":"floating or variable interest rate adjustment formula and a right of demand on the part of the holder","page_number":165,"box":{"x":116,"y":242,"width":736,"height":12}},{"id":"6b3ade5d-c99a-48e2-a8b2-1c05d252e617","block_type":"box","text":"thereof to receive payment of the unpaid principal balance plus accrued interest upon a short notice","page_number":165,"box":{"x":116,"y":258,"width":745,"height":12}},{"id":"9b55b887-7b75-4a81-b820-f18e11e5f118","block_type":"box","text":"period not to exceed seven days.","page_number":165,"box":{"x":117,"y":273,"width":250,"height":12}},{"id":"068437df-e08f-49cb-a81d-20a38e373a5e","block_type":"box","text":"There is the possibility that because of default or insolvency the demand feature of VRDOs may not be","page_number":165,"box":{"x":116,"y":304,"width":768,"height":12}},{"id":"d03c76bb-1c48-47cd-b707-837f45c943c3","block_type":"box","text":"honored. The interest rates are adjustable at periodic intervals to some prevailing market rate for","page_number":165,"box":{"x":117,"y":320,"width":721,"height":12}},{"id":"d03fd476-a656-43fd-bc67-c6e57c7883b0","block_type":"box","text":"similar investments, such adjustment formula being calculated to maintain the market rate of the","page_number":165,"box":{"x":116,"y":335,"width":718,"height":12}},{"id":"a03df834-81b2-494c-b6d0-96622fa72ae8","block_type":"box","text":"VRDOs at approximately the par value of the VRDOs on the adjustment date. The adjustments","page_number":165,"box":{"x":116,"y":351,"width":710,"height":12}},{"id":"d644f829-010e-4527-9613-41a5a13a1394","block_type":"box","text":"typically are based upon the Securities Industry and Financial Markets Association (“SIFMA”) Index.","page_number":165,"box":{"x":116,"y":366,"width":746,"height":12}},{"id":"ea34a7da-d1aa-404f-9259-fecde43cbfee","block_type":"box","text":"Because of the interest rate adjustment formula on VRDOs, VRDOs are not comparable to fixed rate","page_number":165,"box":{"x":117,"y":397,"width":751,"height":12}},{"id":"4d8624eb-5044-484f-954f-805f0a31bc8b","block_type":"box","text":"securities. During periods of declining interest rates, a Fund’s yield on a VRDO will decrease and its","page_number":165,"box":{"x":116,"y":413,"width":746,"height":12}},{"id":"caaf49ef-e79c-4fdf-9798-b20e02f99202","block_type":"box","text":"shareholders will forego the opportunity for capital appreciation. During periods of rising interest rates,","page_number":165,"box":{"x":116,"y":428,"width":761,"height":12}},{"id":"59abd18f-0fbd-48a0-8bf6-f272705eb6b6","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":165,"box":{"x":117,"y":444,"width":764,"height":12}},{"id":"d5209340-3a0c-429a-a320-f538969202f1","block_type":"box","text":"of capital depreciation.","page_number":165,"box":{"x":116,"y":459,"width":173,"height":12}},{"id":"08a358e8-c10a-4e15-80aa-8c0b6ffefa26","block_type":"box","text":"Transactions in Financial Futures Contracts on Municipal Indexes.","page_number":165,"box":{"x":118,"y":490,"width":488,"height":12}},{"id":"765d0ad4-7a5c-4f80-98a7-e31315998cb8","block_type":"box","text":"The Municipal Funds and certain","page_number":165,"box":{"x":608,"y":490,"width":253,"height":12}},{"id":"97fbbfbe-0d46-4810-9f1e-097432c784b7","block_type":"box","text":"other funds deal in financial futures contracts based on a long-term municipal bond index developed by","page_number":165,"box":{"x":116,"y":506,"width":770,"height":12}},{"id":"bda4735c-62c2-4546-b573-9846cabcaadb","block_type":"box","text":"the Chicago Board of Trade (“CBT”) and The Bond Buyer (the “Municipal Bond Index”). The Municipal","page_number":165,"box":{"x":116,"y":521,"width":761,"height":12}},{"id":"ab065c52-627f-4f99-8397-4e416c5e0f42","block_type":"box","text":"Bond Index is comprised of 40 long-term, actively traded tax-exempt municipal revenue and general","page_number":165,"box":{"x":117,"y":537,"width":746,"height":12}},{"id":"9f380d55-1a59-412d-a755-ff67d828ae8e","block_type":"box","text":"obligation bonds. Each bond included in the Municipal Bond Index must be rated A or higher by","page_number":165,"box":{"x":116,"y":552,"width":712,"height":12}},{"id":"6cc0ef3c-7ed5-4771-8e8c-d2be990a0cd1","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":165,"box":{"x":117,"y":568,"width":754,"height":12}},{"id":"a72522dc-6788-4c08-b296-cc7ea8ec22ce","block_type":"box","text":"satisfying the eligibility requirements are added to, and an equal number of old issues are deleted from,","page_number":165,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"aaa4e484-bbce-43f9-8b52-45ea94e77920","block_type":"box","text":"the Municipal Bond Index. The value of the Municipal Bond Index is computed daily according to a","page_number":165,"box":{"x":116,"y":599,"width":734,"height":12}},{"id":"14032900-5c3c-4eb4-aa9d-c0a2ee53087c","block_type":"box","text":"formula based on the price of each bond in the Municipal Bond Index, as evaluated by six","page_number":165,"box":{"x":116,"y":614,"width":670,"height":12}},{"id":"8bccc177-c6cc-469b-b416-5c81ecd8f1fd","block_type":"box","text":"dealer-to-dealer brokers.","page_number":165,"box":{"x":116,"y":630,"width":189,"height":9}},{"id":"79ca8d8f-9a43-4662-8b79-e932b40f78dc","block_type":"box","text":"The Municipal Bond Index futures contract is traded only on the CBT. Like other contract markets, the","page_number":165,"box":{"x":116,"y":661,"width":755,"height":12}},{"id":"c1883f69-bc42-4f14-84ed-f911ca97a2ba","block_type":"box","text":"CBT assures performance under futures contracts through a clearing corporation, a nonprofit","page_number":165,"box":{"x":117,"y":676,"width":689,"height":12}},{"id":"ddc94d5e-bd6a-470c-9315-baf2a2324200","block_type":"box","text":"organization managed by the exchange membership that is also responsible for handling daily","page_number":165,"box":{"x":116,"y":692,"width":699,"height":12}},{"id":"b042eedf-1212-4123-83bf-7c54932dd8a4","block_type":"box","text":"accounting of deposits or withdrawals of margin.","page_number":165,"box":{"x":116,"y":707,"width":357,"height":12}},{"id":"53daa58b-3582-4964-bd1c-50f65c888d8a","block_type":"box","text":"The particular municipal bonds comprising the index underlying the Municipal Bond Index financial","page_number":165,"box":{"x":116,"y":738,"width":729,"height":12}},{"id":"c89e82e2-4354-4219-aa6b-d84a3f907f72","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":165,"box":{"x":116,"y":754,"width":736,"height":12}},{"id":"93992e6a-d09a-4f0a-ae06-117aed58b999","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":165,"box":{"x":116,"y":769,"width":743,"height":12}},{"id":"dbd454ef-06a9-4b15-8fac-c899011c7ce4","block_type":"box","text":"financial futures contracts will depend in part on the degree to which price movements in the index","page_number":165,"box":{"x":116,"y":785,"width":729,"height":12}},{"id":"69492e67-8b12-45eb-ad36-a235097038ca","block_type":"box","text":"underlying the financial futures contract correlate with the price movements of the Municipal Bonds","page_number":165,"box":{"x":117,"y":800,"width":732,"height":12}},{"id":"c7a257fc-b807-4698-bdbc-e087a3d70f2f","block_type":"box","text":"held by the Fund. The correlation may be affected by disparities in the average maturity, ratings,","page_number":165,"box":{"x":117,"y":816,"width":712,"height":12}},{"id":"ad209eab-ee69-41c1-b739-ce53d6bda9ad","block_type":"box","text":"geographical mix or structure of a Municipal Fund’s investments as compared to those comprising the","page_number":165,"box":{"x":116,"y":831,"width":760,"height":12}},{"id":"b4d9449a-2d00-4890-a710-9d7f633ec743","block_type":"box","text":"Municipal Bond Index and general economic or political factors. In addition, the correlation between","page_number":165,"box":{"x":117,"y":847,"width":741,"height":12}},{"id":"2b85196d-9544-47b5-80d1-edcfa4940333","block_type":"box","text":"movements in the value of the Municipal Bond Index may be subject to change over time as additions","page_number":165,"box":{"x":117,"y":862,"width":759,"height":12}},{"id":"71983508-3c04-456d-935c-eb470f4f5648","block_type":"box","text":"to and deletions from the Municipal Bond Index alter its structure. The correlation between futures","page_number":165,"box":{"x":116,"y":878,"width":731,"height":12}},{"id":"b7620a75-89c5-493c-908d-d6eb912a76ac","block_type":"box","text":"II-78","page_number":165,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"df1e4d7e-41d6-44a5-a396-2dc810ac5ac3","block_type":"box","text":"NM1026U-6030748-165/260","page_number":165,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b5fda926-8e6f-4a79-ac7e-8741e32b737f","block_type":"box","text":"contracts on U.S. Government Securities and the Municipal Bonds held by a Municipal Fund may be","page_number":166,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"e332b94d-e043-4a32-bf40-8a3df3112878","block_type":"box","text":"adversely affected by similar factors and the risk of imperfect correlation between movements in the","page_number":166,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"01031cd5-1449-4af1-bc4a-619fe7824b5c","block_type":"box","text":"prices of such futures contracts and the prices of Municipal Bonds held by a Municipal Fund may be","page_number":166,"box":{"x":117,"y":118,"width":745,"height":12}},{"id":"212bf9a6-6155-4e33-bab7-bf63069c4662","block_type":"box","text":"greater. Municipal Bond Index futures contracts were approved for trading in 1985. Trading in such","page_number":166,"box":{"x":116,"y":134,"width":738,"height":12}},{"id":"cb0e5065-4b03-487f-b929-d9d65f0f60a5","block_type":"box","text":"futures contracts may tend to be less liquid than trading in other futures contracts. The trading of","page_number":166,"box":{"x":116,"y":149,"width":721,"height":12}},{"id":"5381c5bf-78ea-4547-80db-d08309cfd3ec","block_type":"box","text":"futures contracts also is subject to certain market risks, such as inadequate trading activity, which","page_number":166,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"f09db028-ff36-4e9e-945b-ddfcf34a021e","block_type":"box","text":"could at times make it difficult or impossible to liquidate existing positions.","page_number":166,"box":{"x":116,"y":180,"width":552,"height":12}},{"id":"ab615c27-639f-431c-94a1-3f1169069f76","block_type":"box","text":"Call Rights.","page_number":166,"box":{"x":117,"y":211,"width":83,"height":12}},{"id":"79658bcf-c6e6-4df7-b212-de190506a216","block_type":"box","text":"A Fund may purchase a Municipal Bond issuer’s right to call all or a portion of such","page_number":166,"box":{"x":202,"y":211,"width":626,"height":12}},{"id":"f7860037-a338-4641-84aa-546a56cb469c","block_type":"box","text":"Municipal Bond for mandatory tender for purchase (a “Call Right”). A holder of a Call Right may","page_number":166,"box":{"x":117,"y":227,"width":711,"height":12}},{"id":"ff75e651-db58-4951-9a48-94b2d8da7b08","block_type":"box","text":"exercise such right to require a mandatory tender for the purchase of related Municipal Bonds, subject","page_number":166,"box":{"x":116,"y":242,"width":763,"height":12}},{"id":"e598ba14-1adf-4ca4-b345-f7f66020c2af","block_type":"box","text":"to certain conditions. A Call Right that is not exercised prior to maturity of the related Municipal Bond","page_number":166,"box":{"x":116,"y":258,"width":751,"height":12}},{"id":"7d2152d1-6384-4c51-84b8-a5ddc673aa51","block_type":"box","text":"will expire without value. The economic effect of holding both the Call Right and the related Municipal","page_number":166,"box":{"x":116,"y":273,"width":756,"height":12}},{"id":"5c97f0bd-9106-4f8f-bbeb-d98d2096e392","block_type":"box","text":"Bond is identical to holding a Municipal Bond as a non-callable security. Certain investments in such","page_number":166,"box":{"x":117,"y":289,"width":748,"height":12}},{"id":"736e0dbc-87a6-4f86-b592-1391d7a0a977","block_type":"box","text":"obligations may be illiquid.","page_number":166,"box":{"x":116,"y":304,"width":201,"height":12}},{"id":"ef4da650-ec22-4720-8f51-4765c752c4fe","block_type":"box","text":"Municipal Interest Rate Swap Transactions.","page_number":166,"box":{"x":116,"y":335,"width":323,"height":12}},{"id":"584917f4-06f9-4ffe-8968-81d38839c4f3","block_type":"box","text":"In order to hedge the value of a Fund against interest rate","page_number":166,"box":{"x":440,"y":335,"width":439,"height":12}},{"id":"ef540829-c62b-4216-b9d7-a4603bb8eeaf","block_type":"box","text":"fluctuations or to enhance a Fund’s income, a Fund may enter into interest rate swap transactions such","page_number":166,"box":{"x":116,"y":351,"width":772,"height":12}},{"id":"15cc65cb-9558-498f-b323-b803e959fedc","block_type":"box","text":"as Municipal Market Data AAA Cash Curve swaps (“MMD Swaps”) or Securities Industry and Financial","page_number":166,"box":{"x":116,"y":366,"width":769,"height":12}},{"id":"977be04d-2d88-4d1a-90d0-bc668ae3687b","block_type":"box","text":"Markets Association Municipal Swap Index swaps (“SIFMA Swaps”). To the extent that a Fund enters","page_number":166,"box":{"x":117,"y":382,"width":758,"height":12}},{"id":"12fe8d25-28df-44a2-97ba-7c6a7aeb198d","block_type":"box","text":"into these transactions, the Fund expects to do so primarily to preserve a return or spread on a","page_number":166,"box":{"x":117,"y":397,"width":708,"height":12}},{"id":"5c4f9506-a084-4a85-8cf6-b8fae2b877d3","block_type":"box","text":"particular investment or portion of its portfolio or to protect against any increase in the price of","page_number":166,"box":{"x":117,"y":413,"width":699,"height":12}},{"id":"eb8d08b1-1678-46ef-86d2-598e23f831e9","block_type":"box","text":"securities the Fund anticipates purchasing at a later date. A Fund intends to use these transactions","page_number":166,"box":{"x":116,"y":428,"width":741,"height":12}},{"id":"bc51607c-155a-45cf-b6ba-61a630e1889f","block_type":"box","text":"primarily as a hedge rather than as a speculative investment. However, a Fund also may invest in","page_number":166,"box":{"x":117,"y":444,"width":729,"height":12}},{"id":"96f5a52a-1cef-4335-a072-f3fcde8ebe89","block_type":"box","text":"MMD Swaps and SIFMA Swaps to enhance income or gain or to increase the Fund’s yield, for","page_number":166,"box":{"x":117,"y":459,"width":704,"height":12}},{"id":"7d9f3c52-d8f5-458d-98b3-e14afd814ee0","block_type":"box","text":"example, during periods of steep interest rate yield curves (","page_number":166,"box":{"x":116,"y":475,"width":441,"height":12}},{"id":"f71c5d92-3ce3-4c04-9b08-f3a64b1c45d4","block_type":"box","text":"i.e.","page_number":166,"box":{"x":558,"y":475,"width":20,"height":9}},{"id":"4b73f4a4-d0fb-4f86-a2b8-26d516e4a35b","block_type":"box","text":", wide differences between short-term","page_number":166,"box":{"x":581,"y":475,"width":284,"height":11}},{"id":"2b43b5ae-6c69-461b-8910-8b6839c10c12","block_type":"box","text":"and long-term interest rates).","page_number":166,"box":{"x":116,"y":490,"width":221,"height":12}},{"id":"8f1f2a8d-1949-4505-92a6-380c3ec8b2d9","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":166,"box":{"x":116,"y":521,"width":747,"height":12}},{"id":"124766b9-b875-4933-816a-7e43b78165e9","block_type":"box","text":"exchanges with another party their respective commitments to pay or receive interest (","page_number":166,"box":{"x":116,"y":537,"width":642,"height":12}},{"id":"8b1dcaf4-d7bb-47e0-a35c-3a6ef42a8cbb","block_type":"box","text":"e.g.","page_number":166,"box":{"x":760,"y":539,"width":25,"height":10}},{"id":"1ee009a4-f4d5-47c9-92b1-e79f22e73271","block_type":"box","text":", an","page_number":166,"box":{"x":788,"y":539,"width":32,"height":9}},{"id":"22a68805-7d41-4bbf-b173-82356ffb472a","block_type":"box","text":"exchange of fixed rate payments for floating rate payments linked to the SIFMA Municipal Swap","page_number":166,"box":{"x":116,"y":552,"width":717,"height":12}},{"id":"6386ac30-3928-4547-ae57-f26829136494","block_type":"box","text":"Index). Because the underlying index is a tax-exempt index, SIFMA Swaps may reduce cross-market","page_number":166,"box":{"x":117,"y":568,"width":755,"height":12}},{"id":"7b7cb2ef-c687-4154-956d-1470700d6ae9","block_type":"box","text":"risks incurred by a Fund and increase a Fund’s ability to hedge effectively. SIFMA Swaps are typically","page_number":166,"box":{"x":117,"y":583,"width":760,"height":12}},{"id":"cf908379-c45b-4a7f-88dd-b488906c55f3","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":166,"box":{"x":116,"y":599,"width":745,"height":12}},{"id":"fddaf0db-5e65-4dae-9103-cce4814267c5","block_type":"box","text":"duration of a SIFMA Swap is approximately equal to the duration of a fixed-rate Municipal Bond with","page_number":166,"box":{"x":116,"y":614,"width":747,"height":12}},{"id":"3cd721cd-11d8-48e7-b256-cc51f7aacaf8","block_type":"box","text":"the same attributes as the swap (","page_number":166,"box":{"x":116,"y":630,"width":247,"height":12}},{"id":"e02a3c67-d724-40a5-afea-3f9a5d6e7ffc","block_type":"box","text":"e.g.","page_number":166,"box":{"x":365,"y":632,"width":25,"height":10}},{"id":"23ef764c-76ea-4f9b-bb0c-71a82b64b45d","block_type":"box","text":", coupon, maturity, call feature).","page_number":166,"box":{"x":393,"y":630,"width":240,"height":12}},{"id":"33900a72-b7bd-49e0-94c3-53f3f27537ca","block_type":"box","text":"A Fund may also purchase and sell MMD Swaps, also known as MMD rate locks. An MMD Swap","page_number":166,"box":{"x":116,"y":661,"width":721,"height":12}},{"id":"0e2a82a7-9145-4551-bf65-ab97cf8dabd5","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":166,"box":{"x":117,"y":676,"width":738,"height":12}},{"id":"18d0ca69-2ca1-48a1-83b2-f6a6301ddbc4","block_type":"box","text":"return on a particular investment or a portion of its portfolio as a duration management technique or to","page_number":166,"box":{"x":117,"y":692,"width":755,"height":12}},{"id":"ddcd0bd2-148a-4d3e-9410-be2c4eb3e74a","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":166,"box":{"x":117,"y":707,"width":765,"height":12}},{"id":"8042cb49-1b44-4817-adb3-c8174f93bb00","block_type":"box","text":"Swap, a Fund can create a synthetic long or short position, allowing the Fund to select the most","page_number":166,"box":{"x":116,"y":723,"width":711,"height":12}},{"id":"da0c7181-b59a-4f33-b81d-04b2c93fb31d","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":166,"box":{"x":116,"y":738,"width":724,"height":12}},{"id":"45fc8bb1-f43a-429a-a6b2-031be541c044","block_type":"box","text":"provider pursuant to which the parties agree to make payments to each other on a notional amount,","page_number":166,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"c8a755fe-f1d2-4cfd-a12d-a3a350c3779b","block_type":"box","text":"contingent upon whether the Municipal Market Data AAA General Obligation Scale is above or below a","page_number":166,"box":{"x":116,"y":769,"width":763,"height":12}},{"id":"0962783c-baaf-409b-8236-b804008b4f16","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":166,"box":{"x":116,"y":785,"width":748,"height":12}},{"id":"2d73ed9b-aa50-4019-bb34-b23fe2b16798","block_type":"box","text":"the Municipal Market Data AAA General Obligation Scale is below the specified level on the expiration","page_number":166,"box":{"x":116,"y":800,"width":757,"height":12}},{"id":"b24dd000-9ea0-46fb-817f-7889ce787d77","block_type":"box","text":"date, the counterparty to the contract will make a payment to the Fund equal to the specified level","page_number":166,"box":{"x":116,"y":816,"width":724,"height":12}},{"id":"1233b37c-914a-4171-89ac-059bf546dee5","block_type":"box","text":"minus the actual level, multiplied by the notional amount of the contract. If the Municipal Market Data","page_number":166,"box":{"x":117,"y":831,"width":751,"height":12}},{"id":"06832ae1-a805-43b4-a2b1-c75db05359c5","block_type":"box","text":"AAA General Obligation Scale is above the specified level on the expiration date, a Fund will make a","page_number":166,"box":{"x":116,"y":847,"width":752,"height":12}},{"id":"ecc76262-3073-4212-9968-75bd052fb544","block_type":"box","text":"payment to the counterparty equal to the actual level minus the specified level, multiplied by the","page_number":166,"box":{"x":117,"y":862,"width":714,"height":12}},{"id":"be14c0a6-9c93-45c8-9c32-c3f0bc3fb034","block_type":"box","text":"notional amount of the contract.","page_number":166,"box":{"x":117,"y":878,"width":239,"height":9}},{"id":"13af5326-fa94-4592-9567-126c9fe2e2f6","block_type":"box","text":"II-79","page_number":166,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d7f22a77-0662-41a0-af65-e15ecb93b51b","block_type":"box","text":"NM1026U-6030748-166/260","page_number":166,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"818a0475-77f3-42ff-a8e9-c9200fff55b5","block_type":"box","text":"In connection with investments in SIFMA and MMD Swaps,","page_number":167,"box":{"x":117,"y":87,"width":444,"height":12}},{"id":"9a97287a-15f4-427d-8eb4-a73ad0c208a3","block_type":"box","text":"there is a risk that municipal yields will","page_number":167,"box":{"x":561,"y":87,"width":289,"height":12}},{"id":"d43de136-560c-497f-bfaa-ebd6c322a27d","block_type":"box","text":"move in the opposite direction than anticipated by a Fund, which would cause the Fund to make","page_number":167,"box":{"x":117,"y":103,"width":716,"height":12}},{"id":"04054f5f-6c7d-4764-abfe-7dc4d79bc685","block_type":"box","text":"payments to its counterparty in the transaction that could adversely affect the Fund’s performance.","page_number":167,"box":{"x":117,"y":118,"width":735,"height":12}},{"id":"432c964c-9482-48fd-a1c4-b1d5e5fb29cd","block_type":"box","text":"Insured Municipal Bonds.","page_number":167,"box":{"x":117,"y":146,"width":186,"height":12}},{"id":"56a24d88-eaa8-4f71-9c51-b165881cc1ef","block_type":"box","text":"Bonds purchased by a Fund may be covered by insurance that guarantees","page_number":167,"box":{"x":305,"y":146,"width":566,"height":12}},{"id":"59bb2b9f-f461-4d72-9125-8a7ad4808915","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":167,"box":{"x":116,"y":162,"width":768,"height":12}},{"id":"055442aa-95f9-4b92-b5d9-54540992a23b","block_type":"box","text":"matures. Either the issuer of the bond or the Fund purchases the insurance. Insurance is expected to","page_number":167,"box":{"x":117,"y":177,"width":755,"height":12}},{"id":"74aa2d8b-b96d-4740-b633-5c5c1cea2be8","block_type":"box","text":"protect the Fund against losses caused by a bond issuer’s failure to make interest or principal","page_number":167,"box":{"x":117,"y":192,"width":699,"height":13}},{"id":"3c276a2e-40f5-4351-b663-98ba04efdf51","block_type":"box","text":"payments. However, insurance does not protect the Fund or its shareholders against losses caused by","page_number":167,"box":{"x":117,"y":208,"width":767,"height":12}},{"id":"4c1bd7b6-87af-4a25-a36d-75ea2f32ed95","block_type":"box","text":"declines in a bond’s market value. Also, the Fund cannot be certain that any insurance company does","page_number":167,"box":{"x":116,"y":224,"width":761,"height":12}},{"id":"66fdfc7f-7a17-4cf2-8f87-48ec10fd996e","block_type":"box","text":"not make these payments. In addition, if the Fund purchases the insurance, it may pay the premiums,","page_number":167,"box":{"x":117,"y":239,"width":758,"height":12}},{"id":"5ed537c2-e77c-4f9e-9153-c8f47ac1cd6c","block_type":"box","text":"which will reduce the Fund’s yield. The Fund seeks to use only insurance companies with claims","page_number":167,"box":{"x":116,"y":255,"width":721,"height":12}},{"id":"692dff91-55ab-49a8-b44f-58408c29f2f8","block_type":"box","text":"paying ability, financial strength, or equivalent ratings of at least investment grade. However, if","page_number":167,"box":{"x":117,"y":270,"width":703,"height":12}},{"id":"52252c16-fbfd-420d-b116-ff9c90b3da77","block_type":"box","text":"insurance from insurers with these ratings is not available, the Fund may use insurance companies","page_number":167,"box":{"x":117,"y":285,"width":739,"height":13}},{"id":"f712bfa6-52b5-44be-b50f-500685788823","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":167,"box":{"x":116,"y":301,"width":742,"height":12}},{"id":"3ef8773c-ccf3-41e8-9f21-6dc3fb9dbe84","block_type":"box","text":"obligations or loses its credit rating, the value of the bond could drop.","page_number":167,"box":{"x":116,"y":316,"width":517,"height":13}},{"id":"0cb5f890-1934-487f-8b4a-0832a03f9a18","block_type":"box","text":"Build America Bonds.","page_number":167,"box":{"x":116,"y":345,"width":159,"height":9}},{"id":"e6c1c31e-0bd8-44fa-9df8-43a7547961d5","block_type":"box","text":"If a Fund holds Build America Bonds, the Fund may be eligible to receive a U.S.","page_number":167,"box":{"x":276,"y":344,"width":604,"height":12}},{"id":"08efb02e-105c-4b7d-a5eb-121191f8745e","block_type":"box","text":"federal income tax credit; however, the issuer of a Build America Bond may instead elect to receive a","page_number":167,"box":{"x":116,"y":360,"width":756,"height":12}},{"id":"1586cc4d-e07b-41f5-8ac8-7f35ab52030d","block_type":"box","text":"cash payment directly from the federal government in lieu of holders such as the fund receiving a tax","page_number":167,"box":{"x":116,"y":375,"width":752,"height":12}},{"id":"b5852c50-1432-4a6e-91bc-e135db357f3b","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":167,"box":{"x":116,"y":391,"width":772,"height":12}},{"id":"c1d2c4ac-6510-4a72-9f0d-d2026dbb70ec","block_type":"box","text":"does receive tax credits from Build America Bonds or other tax credit bonds on one or more specified","page_number":167,"box":{"x":116,"y":406,"width":757,"height":12}},{"id":"3c3c0022-f467-4447-a65e-e9173f7f98e7","block_type":"box","text":"dates during the fund’s taxable year, and the Fund satisfies the minimum distribution requirement, the","page_number":167,"box":{"x":116,"y":422,"width":760,"height":12}},{"id":"d9d2dcd0-caf2-4324-8a4c-8c7b56b184f7","block_type":"box","text":"Fund may elect for U.S. federal income tax purposes to pass through to shareholders tax credits","page_number":167,"box":{"x":117,"y":437,"width":719,"height":12}},{"id":"cba2fbb2-3be7-40ee-93d4-4d3bd033969d","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":167,"box":{"x":116,"y":453,"width":770,"height":12}},{"id":"f42ffbf7-3cce-4e74-a617-f0e0f42611c7","block_type":"box","text":"the Code as a “qualified tax credit bond” (which includes a qualified forestry conservation bond, a new","page_number":167,"box":{"x":116,"y":468,"width":761,"height":12}},{"id":"a036fc46-5153-4e9e-bfab-a46136ab1baf","block_type":"box","text":"clean renewable energy bond, a qualified energy conservation bond, or a qualified zone academy","page_number":167,"box":{"x":116,"y":484,"width":729,"height":12}},{"id":"c6c2c586-8746-437a-b617-f239aa21baab","block_type":"box","text":"bond, each of which must meet certain requirements specified in the Code), a “Build America Bond”","page_number":167,"box":{"x":117,"y":499,"width":744,"height":13}},{"id":"f656eabc-44e9-4abc-8f83-257a959b7fbf","block_type":"box","text":"(which includes certain qualified bonds issued before January 1, 2011) or certain other specified","page_number":167,"box":{"x":117,"y":515,"width":717,"height":12}},{"id":"a36371a9-dba5-4fbe-a968-80082c4b7481","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":167,"box":{"x":117,"y":530,"width":771,"height":12}},{"id":"50ace1ae-1803-414c-bcb8-2614d4fbc547","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":167,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"122cf16b-4723-4bd3-938f-4e7b891bf32c","block_type":"box","text":"amount would be subject to withholding provisions of the Code. Certain limitations may apply on the","page_number":167,"box":{"x":116,"y":561,"width":746,"height":13}},{"id":"ef4d99d2-8506-4a34-862c-133cf37d5668","block_type":"box","text":"extent to which the credit may be claimed.","page_number":167,"box":{"x":116,"y":577,"width":318,"height":12}},{"id":"eff62b2d-02be-428a-b5b2-797692ec59c5","block_type":"box","text":"Tax-Exempt Municipal Investments.","page_number":167,"box":{"x":118,"y":605,"width":263,"height":12}},{"id":"11957b06-977b-4dfb-a159-03b497fe229f","block_type":"box","text":"Certain Funds may hold tax-exempt municipal investments which","page_number":167,"box":{"x":382,"y":605,"width":494,"height":12}},{"id":"15bb02be-66c3-4895-8017-5fc902f98d0b","block_type":"box","text":"may be in the form of tender option bonds, variable rate demand obligations, participations, beneficial","page_number":167,"box":{"x":117,"y":620,"width":757,"height":12}},{"id":"0b0b4cb6-64c3-40cf-af3a-9525a57f8ef5","block_type":"box","text":"interests in a trust, partnership interests or other forms. These investments are described in greater","page_number":167,"box":{"x":117,"y":636,"width":741,"height":12}},{"id":"63f349d1-82b9-4807-ad3e-32fe7a111e96","block_type":"box","text":"detail above in this section. Some of the structures used by certain Funds include interests in long-term","page_number":167,"box":{"x":116,"y":651,"width":771,"height":12}},{"id":"6ef475f1-cdc2-4dcb-83d7-b90bf698e811","block_type":"box","text":"fixed-rate municipal debt obligations, held by a trustee or custodian, that are coupled with tender","page_number":167,"box":{"x":116,"y":667,"width":716,"height":12}},{"id":"d0010bf7-dcba-400b-bfd1-68e09e168db8","block_type":"box","text":"option, demand and other features when the tax-exempt municipal investments are created. Together,","page_number":167,"box":{"x":116,"y":682,"width":758,"height":12}},{"id":"51ea182d-09e2-4459-a035-ed250f4ce077","block_type":"box","text":"these features entitle the holder of the interest to tender (or put) the underlying municipal debt","page_number":167,"box":{"x":116,"y":698,"width":696,"height":12}},{"id":"8d3fb100-6bae-4d0d-b098-225a9feb23cd","block_type":"box","text":"obligation to a third party at periodic intervals and to receive the principal amount thereof.","page_number":167,"box":{"x":116,"y":713,"width":661,"height":12}},{"id":"2e6d12f7-313c-4431-9e2b-a0bf53022ba7","block_type":"box","text":"In some cases, municipal debt obligations are represented by custodial receipts evidencing rights to","page_number":167,"box":{"x":117,"y":741,"width":740,"height":12}},{"id":"065b003f-8c09-468f-ad6a-dd79f36e9b6f","block_type":"box","text":"receive specific future interest payments, principal payments, or both, on the underlying securities held","page_number":167,"box":{"x":117,"y":757,"width":760,"height":12}},{"id":"67929bdd-a67f-4418-bf0f-3d6a50a67e71","block_type":"box","text":"by the custodian. Under such arrangements, the holder of the custodial receipt has the option to tender","page_number":167,"box":{"x":117,"y":772,"width":765,"height":12}},{"id":"a9b67ad6-74e3-4de4-bacc-8a35bda0f822","block_type":"box","text":"the underlying securities at their face value to the sponsor (","page_number":167,"box":{"x":116,"y":788,"width":440,"height":12}},{"id":"c12b3cd7-1123-4d46-9c85-cd648b1b5cd5","block_type":"box","text":"e.g.","page_number":167,"box":{"x":557,"y":790,"width":26,"height":10}},{"id":"046baaca-5ef1-4311-8408-c46531cc6ca6","block_type":"box","text":", a Fund, or a bank or broker-dealer or","page_number":167,"box":{"x":586,"y":788,"width":284,"height":11}},{"id":"763799fd-1496-45c2-aeac-b7f924888f38","block_type":"box","text":"other financial institution), which is paid periodic fees equal to the difference between the securities’","page_number":167,"box":{"x":116,"y":803,"width":738,"height":12}},{"id":"bd819d09-457f-46e0-be5e-039af8dbd92d","block_type":"box","text":"fixed coupon rate and the rate that would cause the securities, coupled with the tender option, to trade","page_number":167,"box":{"x":116,"y":819,"width":758,"height":12}},{"id":"dc429b88-b505-47e2-b877-843443a60e8c","block_type":"box","text":"at par on the date of a rate adjustment.","page_number":167,"box":{"x":116,"y":834,"width":295,"height":12}},{"id":"cebde3f5-72bf-4a82-ba2d-34619da09302","block_type":"box","text":"A participation interest gives the Fund an undivided interest in a Municipal Bond in the proportion the","page_number":167,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"64ef1812-a2be-4a50-962c-cc4b89b05232","block_type":"box","text":"Fund’s participation bears to the total principal amount of the Municipal Bond, and typically provides for","page_number":167,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"500e416c-57cc-45a8-b9f6-25051aae0f76","block_type":"box","text":"II-80","page_number":167,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"03415cf4-5642-4d94-8587-8bf3f91e3ec9","block_type":"box","text":"NM1026U-6030748-167/260","page_number":167,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7d906068-0053-4bd1-95a3-961d30769552","block_type":"box","text":"a repurchase feature for all or any part of the full principal amount of the participation interest, plus","page_number":168,"box":{"x":116,"y":87,"width":735,"height":12}},{"id":"e8d07151-e417-4fe0-9591-007cbf5d461b","block_type":"box","text":"accrued interest. Trusts and partnerships are typically used to convert long-term fixed rate high quality","page_number":168,"box":{"x":116,"y":102,"width":763,"height":13}},{"id":"948255c8-c0ed-43a9-bb3f-60a977f193e8","block_type":"box","text":"bonds of a single state or municipal issuer into variable or floating rate demand instruments.","page_number":168,"box":{"x":117,"y":118,"width":686,"height":12}},{"id":"742f5942-b6da-41bf-aa4a-9fc7f5705ae7","block_type":"box","text":"The Municipal Bond Funds may hold participation interests and custodial receipts for municipal debt","page_number":168,"box":{"x":116,"y":149,"width":746,"height":12}},{"id":"450ae541-e6b3-4393-b3da-f12b2c03791e","block_type":"box","text":"obligations which give the holder the right to receive payment of principal subject to the conditions","page_number":168,"box":{"x":116,"y":165,"width":731,"height":12}},{"id":"e05837a3-bdd5-4e19-a2a4-fe9f4eaf2663","block_type":"box","text":"described above. The IRS has not ruled on whether the interest received on tax-exempt municipal","page_number":168,"box":{"x":116,"y":180,"width":732,"height":12}},{"id":"82d5f766-2661-4528-ab62-1607480b91cf","block_type":"box","text":"investments in the form of participation interests or custodial receipts is tax-exempt, and accordingly,","page_number":168,"box":{"x":117,"y":196,"width":751,"height":12}},{"id":"be20bfa2-5b95-4a87-ad21-f2e9f392fc81","block_type":"box","text":"purchases of any such interests or receipts are based on the opinions of counsel to the sponsors of","page_number":168,"box":{"x":117,"y":211,"width":742,"height":12}},{"id":"5d43c2c2-336d-4ec8-a5fc-d0e10dd3330f","block_type":"box","text":"such derivative securities. Neither a Fund nor its investment adviser or sub-advisers will review the","page_number":168,"box":{"x":116,"y":227,"width":738,"height":9}},{"id":"933924a0-fc39-4f63-981b-89433971b862","block_type":"box","text":"proceedings related to the creation of any tax-exempt municipal investments or the basis for such","page_number":168,"box":{"x":117,"y":242,"width":728,"height":12}},{"id":"28d7844a-e87f-405f-b2bb-9401c55761e8","block_type":"box","text":"opinions.","page_number":168,"box":{"x":116,"y":258,"width":72,"height":11}},{"id":"f4ae1318-f22e-4a70-8df4-6a208b309db2","block_type":"box","text":"Operational and Technology Risks.","page_number":168,"box":{"x":117,"y":289,"width":279,"height":12}},{"id":"6d70ca6a-fab2-4be9-bd73-d37fd2cad8b5","block_type":"box","text":"The Fund and the entities with which it interacts directly or","page_number":168,"box":{"x":397,"y":289,"width":442,"height":12}},{"id":"1b3e6153-19f6-4372-8f4a-7deefe6c4854","block_type":"box","text":"indirectly are susceptible to operational and technology risks, including those related to human errors,","page_number":168,"box":{"x":117,"y":304,"width":758,"height":12}},{"id":"4fbaecbc-bd64-4609-95c4-5c70c002d511","block_type":"box","text":"processing errors, communication errors, systems failures, cybersecurity incidents, and the use of","page_number":168,"box":{"x":117,"y":320,"width":731,"height":12}},{"id":"987b250d-089e-4342-ba42-b32f6ab3da15","block_type":"box","text":"artificial intelligence and machine learning (“AI”), which may result in losses for the Fund and its","page_number":168,"box":{"x":116,"y":335,"width":713,"height":12}},{"id":"d1636acf-d1c6-4ec6-b49e-36e54def6f75","block_type":"box","text":"shareholders or impair the Fund’s operations. These entities include, but are not limited to, the Fund’s","page_number":168,"box":{"x":116,"y":351,"width":760,"height":12}},{"id":"f8765c80-f292-497e-95c4-1af72a26223a","block_type":"box","text":"adviser, administrator, distributor, other service providers (e.g., index and benchmark providers,","page_number":168,"box":{"x":116,"y":366,"width":716,"height":12}},{"id":"35288c47-d1ad-41ab-9dae-03b30c42cf8e","block_type":"box","text":"accountants, custodians, and transfer agents), financial intermediaries, counterparties, market makers,","page_number":168,"box":{"x":116,"y":382,"width":768,"height":12}},{"id":"69f709e6-3953-42b3-b940-c98a585993c9","block_type":"box","text":"Authorized Participants, listing exchanges, other financial market operators, and governmental","page_number":168,"box":{"x":116,"y":397,"width":706,"height":12}},{"id":"3cdb8828-2106-46ef-b906-64bb21adc0e6","block_type":"box","text":"authorities. Operational and technology risks for the issuers in which the Fund invests could also result","page_number":168,"box":{"x":116,"y":413,"width":767,"height":12}},{"id":"4fd0a502-3c0a-4b31-8811-a0ecf6b81c72","block_type":"box","text":"in material adverse consequences for such issuers and may cause the Fund’s investments in such","page_number":168,"box":{"x":117,"y":428,"width":736,"height":12}},{"id":"33b73c77-7b0c-4c11-853e-34f01a81ce17","block_type":"box","text":"issuers to lose value. The Fund may incur substantial costs in order to mitigate operational and","page_number":168,"box":{"x":117,"y":444,"width":709,"height":12}},{"id":"bdda6d71-b255-48cd-b18b-daf73493d902","block_type":"box","text":"technology risks.","page_number":168,"box":{"x":116,"y":459,"width":130,"height":12}},{"id":"419d9659-aff3-48b8-8a4e-f7ae1649187a","block_type":"box","text":"Cybersecurity incidents can result from deliberate attacks or unintentional events against an issuer in","page_number":168,"box":{"x":117,"y":490,"width":754,"height":12}},{"id":"b92a2f45-7b45-47e9-97e5-4f2094a671bf","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":168,"box":{"x":116,"y":506,"width":746,"height":12}},{"id":"e439af4c-5830-4af8-a2f1-f8b62f35a73e","block_type":"box","text":"gaining unauthorized access to systems, misappropriating assets or sensitive information, corrupting or","page_number":168,"box":{"x":116,"y":521,"width":772,"height":12}},{"id":"ffd4df08-cacf-49ab-8e34-d1384d94af0e","block_type":"box","text":"destroying data, and causing operational disruption. Geopolitical tension may increase the scale and","page_number":168,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"e837994c-9964-4b11-9787-2dcc26de7be3","block_type":"box","text":"sophistication of deliberate attacks, particularly those from nation states or from entities with nation","page_number":168,"box":{"x":116,"y":552,"width":738,"height":12}},{"id":"78396209-2887-48fb-b6c0-c3ce2cee913c","block_type":"box","text":"state backing. Cybersecurity incidents may result in any of the following: financial losses; interference","page_number":168,"box":{"x":116,"y":568,"width":757,"height":12}},{"id":"cebf651b-41fe-418c-9cdc-899be9d8af81","block_type":"box","text":"with the Fund’s ability to calculate its NAV; disclosure of confidential information; impediments to","page_number":168,"box":{"x":116,"y":583,"width":721,"height":12}},{"id":"d502b8b8-e147-4809-989d-2eba2371df85","block_type":"box","text":"trading; submission of erroneous trades by the Fund or erroneous subscription or redemption orders;","page_number":168,"box":{"x":116,"y":599,"width":754,"height":12}},{"id":"09266f95-a934-4db4-9472-44f0dc6c26ec","block_type":"box","text":"the inability of the Fund or its service providers to transact business; violations of applicable privacy","page_number":168,"box":{"x":116,"y":614,"width":743,"height":12}},{"id":"4f57fc07-bdf5-4f2f-9148-dc605c790293","block_type":"box","text":"and other laws; regulatory fines; penalties; reputational damage; reimbursement or other compensation","page_number":168,"box":{"x":116,"y":630,"width":772,"height":12}},{"id":"2fdfa1b3-6b9c-404b-b0d9-745d537a6828","block_type":"box","text":"costs; and other legal and compliance expenses. Furthermore, cybersecurity incidents may render","page_number":168,"box":{"x":116,"y":645,"width":735,"height":12}},{"id":"f066da0b-d875-4ca5-83a8-8e64f46a1aba","block_type":"box","text":"records of the Fund, including records relating to its assets and transactions, shareholder ownership of","page_number":168,"box":{"x":117,"y":661,"width":762,"height":12}},{"id":"f3783e83-4a52-48bd-a642-4cbb28e2d061","block_type":"box","text":"Fund shares, and other data integral to the Fund’s functioning, inaccessible, inaccurate or incomplete.","page_number":168,"box":{"x":117,"y":676,"width":755,"height":12}},{"id":"d2aec561-624c-4b8d-9a3d-5cfc9c364c65","block_type":"box","text":"Power outages, natural disasters, equipment malfunctions and processing errors that threaten","page_number":168,"box":{"x":117,"y":692,"width":697,"height":12}},{"id":"50099029-2c30-42d6-8187-49711d43e252","block_type":"box","text":"information and technology systems relied upon by the Fund or its service providers, as well as market","page_number":168,"box":{"x":117,"y":707,"width":761,"height":12}},{"id":"3a865c86-f050-493d-b647-6d00f15573ec","block_type":"box","text":"events that occur at a pace that overloads these systems, may also disrupt business operations or","page_number":168,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"57b81663-d38c-4534-ab42-e3b88bf3a8bc","block_type":"box","text":"impact critical data.","page_number":168,"box":{"x":117,"y":738,"width":141,"height":12}},{"id":"31fe2dc6-2bd6-4a48-8458-8dc2a88a6bd1","block_type":"box","text":"AI refers to computer systems that can perform tasks that would otherwise require human intelligence","page_number":168,"box":{"x":116,"y":769,"width":755,"height":12}},{"id":"2abef1b5-7d4f-4c40-9678-fbd44f09362d","block_type":"box","text":"and encompasses various different forms of artificial intelligence, including machine learning models.","page_number":168,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"610669ed-507d-4e65-a9e0-4912eb04cea7","block_type":"box","text":"AI is typically designed to analyze data, learn from patterns and experiences, make decisions, and","page_number":168,"box":{"x":116,"y":800,"width":729,"height":12}},{"id":"13ae2f1f-bf98-4f8f-8740-86a3186a8e13","block_type":"box","text":"solve problems. The risks of increased use of AI technologies, such as machine learning, include data","page_number":168,"box":{"x":116,"y":816,"width":757,"height":12}},{"id":"82229b29-09db-4173-b0f6-ea6308f77c86","block_type":"box","text":"risk, transparency risk, and operational risk. These AI technologies, which are generally highly reliant","page_number":168,"box":{"x":117,"y":831,"width":753,"height":12}},{"id":"a477b756-0405-48f6-8f50-2c1da49f2839","block_type":"box","text":"on the collection and analysis of large amounts of data, may incorporate biased or inaccurate data, and","page_number":168,"box":{"x":116,"y":847,"width":772,"height":12}},{"id":"424f71e6-c581-4fd0-b53a-9cd6ab177d25","block_type":"box","text":"it is not possible or practicable to incorporate all relevant data into such technologies. The output or","page_number":168,"box":{"x":117,"y":862,"width":741,"height":12}},{"id":"6ba0e847-fcdd-4c6d-a8c1-f7f481d32f53","block_type":"box","text":"results of any such AI technologies may therefore be incomplete, erroneous, distorted or misleading.","page_number":168,"box":{"x":117,"y":878,"width":750,"height":12}},{"id":"2a43d7f9-820d-4032-a0c7-c60e01f9efa9","block_type":"box","text":"II-81","page_number":168,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"a06d1bd2-7373-4339-a8bd-12657ae72697","block_type":"box","text":"NM1026U-6030748-168/260","page_number":168,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2b11e040-25f4-4b3d-bd1b-cda13a49af97","block_type":"box","text":"Further, AI tools may lack transparency as to how data is utilized and how outputs are generated. AI","page_number":169,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"5ca72543-e76d-4462-83be-73ce605d9d8c","block_type":"box","text":"technologies may also allow the unintended introduction of vulnerabilities into infrastructures and","page_number":169,"box":{"x":116,"y":102,"width":723,"height":13}},{"id":"bf70f0b1-8a3b-4568-a450-ff6f00f220a2","block_type":"box","text":"applications. The Fund and its shareholders could be negatively impacted as a result of these risks","page_number":169,"box":{"x":116,"y":118,"width":739,"height":12}},{"id":"4e84b1a6-b4ed-4b72-88df-8547abc6e6bd","block_type":"box","text":"associated with AI technologies. AI technologies and their current and potential future applications, and","page_number":169,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"37a2a3f2-912a-419e-88b9-090132cca3cd","block_type":"box","text":"the regulatory frameworks within which they operate, continue to quickly evolve, and it is impossible to","page_number":169,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"933b20e9-921f-43df-9045-8c9e0ae509a8","block_type":"box","text":"anticipate the full scope of future AI capabilities or rules and the associated risks to the Fund.","page_number":169,"box":{"x":116,"y":165,"width":696,"height":11}},{"id":"09a70693-84cb-4718-bf05-c25682f0b1e2","block_type":"box","text":"While the Fund’s service providers are required to have appropriate operational, information security","page_number":169,"box":{"x":116,"y":196,"width":750,"height":12}},{"id":"99523c4f-cb09-44e1-9256-a0e80afe70e3","block_type":"box","text":"and cybersecurity risk management policies and procedures, their methods of risk management may","page_number":169,"box":{"x":116,"y":211,"width":753,"height":12}},{"id":"f7777f21-53d3-437d-878c-0d082dec6138","block_type":"box","text":"differ from those of the Fund in the setting of priorities, the personnel and resources available or the","page_number":169,"box":{"x":116,"y":227,"width":745,"height":12}},{"id":"ac874333-1004-4737-85e9-e9f8fb7063e6","block_type":"box","text":"effectiveness of relevant controls. The Fund and its adviser seek to reduce these risks through","page_number":169,"box":{"x":116,"y":242,"width":706,"height":12}},{"id":"2b470dd7-043b-4110-9206-d3439ddb5d45","block_type":"box","text":"controls, procedures and oversight, including establishing business continuity plans and risk","page_number":169,"box":{"x":116,"y":258,"width":687,"height":12}},{"id":"bc888f6c-0278-4f1c-80fa-ce73d4a28dac","block_type":"box","text":"management systems. However, there are inherent limitations in such plans and systems, including","page_number":169,"box":{"x":117,"y":273,"width":744,"height":12}},{"id":"1193e4a0-2132-41fd-866a-fdf7ebec4db4","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":169,"box":{"x":116,"y":289,"width":766,"height":12}},{"id":"ab1c3542-b20a-4a2c-94d1-cb92e13be949","block_type":"box","text":"future; that such plans and systems may not completely eliminate the occurrence or mitigate the","page_number":169,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"5f8c5883-4960-4531-9f3d-5814743a4b49","block_type":"box","text":"effects of operational or information security disruptions or failures or of cybersecurity incidents; or that","page_number":169,"box":{"x":116,"y":320,"width":766,"height":12}},{"id":"fc244be3-ca20-484e-8ec2-1f43f768f9c1","block_type":"box","text":"prevention and remediation efforts will not be successful or that incidents will go undetected. The Fund","page_number":169,"box":{"x":117,"y":335,"width":766,"height":12}},{"id":"fc33dad3-def7-4da1-aeb8-5b55ed6054ee","block_type":"box","text":"cannot control the systems, information security or other cybersecurity of the issuers in which it invests","page_number":169,"box":{"x":116,"y":351,"width":767,"height":12}},{"id":"697b5b8f-a1fe-4d3d-9e00-7ec9b05cd918","block_type":"box","text":"or its service providers, counterparties, and other third parties whose activities affect the Fund.","page_number":169,"box":{"x":116,"y":366,"width":706,"height":12}},{"id":"34d7eeac-b286-4e67-8f59-585872762e25","block_type":"box","text":"AI and its current and potential future applications, including in the investment and financial sectors, as","page_number":169,"box":{"x":116,"y":397,"width":767,"height":12}},{"id":"2a9aa4a4-5177-4bbc-bd00-86eb0bb53dbc","block_type":"box","text":"well as the regulatory frameworks within which they operate, continue to rapidly evolve, and it is","page_number":169,"box":{"x":116,"y":413,"width":715,"height":12}},{"id":"2bd46d87-2887-4f44-9371-7552be0aa3a3","block_type":"box","text":"impossible to predict the full extent of future applications or regulations. Regulators continue to develop","page_number":169,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"cbdb08b7-f4c7-409d-9761-d079db771130","block_type":"box","text":"new rules and standards related to cybersecurity and data protection. Compliance with evolving","page_number":169,"box":{"x":117,"y":444,"width":713,"height":12}},{"id":"282a667c-2e8f-431a-b41d-a8d71aa8db70","block_type":"box","text":"regulations can be demanding and costly, requiring substantial resources to monitor and implement","page_number":169,"box":{"x":117,"y":459,"width":742,"height":12}},{"id":"19093791-e88b-4dcf-ac6e-880869a877f5","block_type":"box","text":"required changes. Ongoing and future regulatory actions with respect to AI generally or artificial","page_number":169,"box":{"x":117,"y":475,"width":713,"height":12}},{"id":"5fa6578d-ab13-4e0a-b5ae-4ebed688f94b","block_type":"box","text":"intelligence’s use in any industry in particular may alter, perhaps to a materially adverse extent, the","page_number":169,"box":{"x":117,"y":490,"width":738,"height":12}},{"id":"e8ffe0b1-8332-4678-b8f7-937b189b98c8","block_type":"box","text":"ability of the Fund’s adviser and other service providers or other market participants to utilize AI in the","page_number":169,"box":{"x":116,"y":506,"width":759,"height":12}},{"id":"304c541b-8309-43ba-b82b-9b2f91dfe5c2","block_type":"box","text":"manner used to-date, and may have an adverse impact on the ability of a Fund’s adviser and other","page_number":169,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"604af97f-ca1a-474d-8c58-9b3c88b20b27","block_type":"box","text":"service providers, as well as the Fund or the issuers in which it invests, service providers, or other","page_number":169,"box":{"x":116,"y":537,"width":731,"height":12}},{"id":"7101845b-63cf-4c30-83a8-c75674d045e4","block_type":"box","text":"market participants to continue to operate as intended.","page_number":169,"box":{"x":117,"y":552,"width":410,"height":12}},{"id":"810ecd84-f2b6-4907-80a3-a4399fd7a3d8","block_type":"box","text":"Participation Notes.","page_number":169,"box":{"x":116,"y":583,"width":157,"height":12}},{"id":"f9ef58bc-4b24-4925-b83e-4eb4465826aa","block_type":"box","text":"A Fund may buy participation notes from a bank or broker-dealer (“issuer”) that","page_number":169,"box":{"x":274,"y":583,"width":596,"height":12}},{"id":"30222f8b-79bf-4d78-b1dd-b08ef1fc9810","block_type":"box","text":"entitle the Fund to a return measured by the change in value of an identified underlying security or","page_number":169,"box":{"x":116,"y":599,"width":733,"height":12}},{"id":"291889d6-0788-4936-8217-a7f2ef8cfd52","block_type":"box","text":"basket of securities (collectively, the “underlying security”). Participation notes are typically used when","page_number":169,"box":{"x":117,"y":614,"width":761,"height":12}},{"id":"a6364a1d-ce1c-498f-84e7-c80c239b7b5d","block_type":"box","text":"a direct investment in the underlying security is restricted due to country-specific regulations.","page_number":169,"box":{"x":116,"y":630,"width":692,"height":12}},{"id":"f138e5ca-05fe-493b-8d37-54280cfcae3e","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":661,"width":761,"height":12}},{"id":"eaa6691e-5ace-4766-b06b-aa76da5843b7","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":676,"width":766,"height":12}},{"id":"3621be79-f70e-4154-a4dc-eec6a1a63228","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":692,"width":739,"height":12}},{"id":"45be1647-3890-413c-91de-779b26df374b","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":707,"width":720,"height":12}},{"id":"e18daef1-9358-4a11-b6f2-655a5370d18d","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":723,"width":721,"height":12}},{"id":"0dccbe94-8576-447f-8575-d986f3d09445","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":738,"width":698,"height":12}},{"id":"25516f51-eac4-412c-8ec9-6f8225c67cde","block_type":"box","text":"replicates the economic benefit of holding shares in the underlying security. Because a participation","page_number":169,"box":{"x":117,"y":754,"width":738,"height":12}},{"id":"4f623c3b-1f34-4856-aeef-10642a520422","block_type":"box","text":"note is an obligation of the issuer, rather than a direct investment in shares of the underlying security, a","page_number":169,"box":{"x":117,"y":769,"width":765,"height":12}},{"id":"96d82acf-6084-4929-812c-2f47b5db7609","block_type":"box","text":"Fund may suffer losses potentially equal to the full value of the participation note if the issuer fails to","page_number":169,"box":{"x":117,"y":785,"width":740,"height":12}},{"id":"74921170-fd7e-4c90-b594-ceba01d5f011","block_type":"box","text":"perform its obligations. A Fund attempts to mitigate that risk by purchasing only from issuers","page_number":169,"box":{"x":117,"y":800,"width":683,"height":12}},{"id":"2e489063-499a-4824-b350-320a701ce05a","block_type":"box","text":"determined to be creditworthy.","page_number":169,"box":{"x":116,"y":816,"width":225,"height":12}},{"id":"4e90cd18-71ba-477e-a81f-0c2a0c41bf35","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":847,"width":755,"height":12}},{"id":"91b34038-0249-4ea8-8764-46deb90a3733","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":862,"width":752,"height":12}},{"id":"eb45c902-afa4-46c0-8536-9ebabb914483","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":878,"width":742,"height":12}},{"id":"a9282048-a921-450e-a2b5-929baf11a8f5","block_type":"box","text":"II-82","page_number":169,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"64b7d6f3-42ba-4f24-bb25-9d100c681b2e","block_type":"box","text":"NM1026U-6030748-169/260","page_number":169,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a9b1e19d-c4c5-4224-bcb4-e78984a8fdfd","block_type":"box","text":"position, the Fund receives a payment that is based upon the then-current value of the underlying","page_number":170,"box":{"x":117,"y":87,"width":728,"height":12}},{"id":"1a436a7a-e7c4-475f-8ac8-742efcadf4c8","block_type":"box","text":"security converted into U.S. dollars (less transaction costs). The price, performance and liquidity of a","page_number":170,"box":{"x":116,"y":102,"width":751,"height":13}},{"id":"493012b4-fc64-4c7a-8bd8-3a40411859c9","block_type":"box","text":"participation note are all linked directly to the underlying security. A Fund’s ability to redeem or","page_number":170,"box":{"x":117,"y":118,"width":704,"height":12}},{"id":"7e160032-c686-4465-92db-bb701f448ad8","block_type":"box","text":"exercise a participation note generally is dependent on the liquidity in the local trading market for the","page_number":170,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"61f51476-84ef-4bb0-8e5b-43fe994a1e21","block_type":"box","text":"security underlying the participation note.","page_number":170,"box":{"x":116,"y":149,"width":310,"height":12}},{"id":"7e40f422-3d49-4f59-aec6-200dd34174c8","block_type":"box","text":"Portfolio Turnover Rates.","page_number":170,"box":{"x":116,"y":180,"width":201,"height":10}},{"id":"e6c8054b-1f6b-4616-a7e8-7592e80e4695","block_type":"box","text":"A Fund’s annual portfolio turnover rate will not be a factor preventing a sale","page_number":170,"box":{"x":318,"y":180,"width":569,"height":12}},{"id":"f09c7d7e-ca77-4abb-8008-ddb710a559b1","block_type":"box","text":"or purchase when the Manager believes investment considerations warrant such sale or purchase.","page_number":170,"box":{"x":116,"y":196,"width":738,"height":12}},{"id":"87069f6d-2517-4210-9778-10100ced88be","block_type":"box","text":"Although certain Funds will use an approach to investing that is largely a passive, indexing approach,","page_number":170,"box":{"x":116,"y":211,"width":756,"height":12}},{"id":"d419dba2-4757-4711-897b-f9375a993b8a","block_type":"box","text":"such Funds may engage in a substantial number of portfolio transactions. With respect to these Funds,","page_number":170,"box":{"x":116,"y":227,"width":770,"height":12}},{"id":"c9f0291f-1495-49f6-9717-b16ca6f5fe80","block_type":"box","text":"the rate of portfolio turnover will be a limiting factor when the Manager considers whether to purchase","page_number":170,"box":{"x":116,"y":242,"width":759,"height":12}},{"id":"f8c59faa-34eb-4602-951b-110adf95ba7b","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":170,"box":{"x":116,"y":258,"width":756,"height":12}},{"id":"779475e8-cde1-443e-8888-67634e28ff01","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":170,"box":{"x":116,"y":273,"width":765,"height":12}},{"id":"b1f59b88-9ec4-427c-a9bc-ec27a2b87929","block_type":"box","text":"a particular year. High portfolio turnover (","page_number":170,"box":{"x":116,"y":289,"width":305,"height":12}},{"id":"20dbec5d-aa8f-4dfe-8008-3af893226372","block_type":"box","text":"i.e.","page_number":170,"box":{"x":422,"y":289,"width":21,"height":9}},{"id":"12de97af-4dcf-45ea-be7e-ef59dabd38b1","block_type":"box","text":", 100% or more) may result in increased transaction costs","page_number":170,"box":{"x":446,"y":289,"width":433,"height":12}},{"id":"55b8d9ef-f2d6-4e6c-9b83-ebe2d88d2621","block_type":"box","text":"to a Fund, including brokerage commissions, dealer mark-ups and other transaction costs on the sale","page_number":170,"box":{"x":116,"y":304,"width":759,"height":12}},{"id":"3bbbcfac-6795-482d-9998-3f9bc39f82ed","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":170,"box":{"x":116,"y":320,"width":759,"height":12}},{"id":"4045b3d1-2c64-4ded-aab2-3801b84e97aa","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":170,"box":{"x":117,"y":335,"width":743,"height":12}},{"id":"4b319eb5-228b-45f0-8897-8900732db2d0","block_type":"box","text":"term capital gain or loss. These effects of higher than normal portfolio turnover may adversely affect a","page_number":170,"box":{"x":116,"y":351,"width":761,"height":12}},{"id":"7a0f2c2d-84aa-4ce0-9231-5d1a55103f8e","block_type":"box","text":"Fund’s performance.","page_number":170,"box":{"x":117,"y":366,"width":158,"height":12}},{"id":"4db2175a-e39f-4b80-8d57-133c141b75dd","block_type":"box","text":"Preferred Stock.","page_number":170,"box":{"x":116,"y":397,"width":129,"height":10}},{"id":"34dd6110-7b1c-440c-9090-89f2b8f73e7d","block_type":"box","text":"Certain Funds may invest in preferred stocks. Preferred stock has a preference over","page_number":170,"box":{"x":246,"y":397,"width":635,"height":12}},{"id":"f3c5545b-e977-422b-bb89-f9d9d178909d","block_type":"box","text":"common stock in liquidation (and generally dividends as well) but is subordinated to bond holders and","page_number":170,"box":{"x":116,"y":413,"width":760,"height":12}},{"id":"287751f9-7aa6-4f08-9518-3d326f928e4b","block_type":"box","text":"other creditors in all respects. As a general rule,","page_number":170,"box":{"x":116,"y":428,"width":361,"height":12}},{"id":"f8430df5-28d6-4983-9814-bd65a7ab60fc","block_type":"box","text":"the market value of preferred stock with a fixed","page_number":170,"box":{"x":477,"y":428,"width":354,"height":12}},{"id":"caa69115-9527-4762-8b07-057746948b8d","block_type":"box","text":"dividend rate and no conversion element varies inversely with interest rates and perceived credit risk,","page_number":170,"box":{"x":116,"y":444,"width":757,"height":12}},{"id":"227287f1-3e55-4d80-8421-09a9f770eeda","block_type":"box","text":"while the market price of convertible preferred stock generally also reflects some element of","page_number":170,"box":{"x":116,"y":459,"width":687,"height":12}},{"id":"dcb744d8-fb53-446e-b94a-a0a383dd7814","block_type":"box","text":"conversion value. Because preferred stock is junior to debt securities and other obligations of the","page_number":170,"box":{"x":116,"y":475,"width":725,"height":12}},{"id":"55be124e-46b2-42c4-84d8-1e9ef37e6dd8","block_type":"box","text":"issuer, deterioration in the credit quality of the issuer will cause greater changes in the value of a","page_number":170,"box":{"x":117,"y":490,"width":720,"height":12}},{"id":"d8aac919-1959-43c4-aadc-fa7e64de23ef","block_type":"box","text":"preferred stock than in a more senior debt security with similar stated yield characteristics. Unlike","page_number":170,"box":{"x":117,"y":506,"width":725,"height":12}},{"id":"d6345575-e7a9-4e14-84f3-dff779778414","block_type":"box","text":"interest payments on debt securities, preferred stock dividends are payable only if declared by the","page_number":170,"box":{"x":117,"y":521,"width":731,"height":12}},{"id":"b67bae61-ae4c-447b-b47f-58a11a381eb6","block_type":"box","text":"issuer’s board of directors. Preferred stock also may be subject to optional or mandatory redemption","page_number":170,"box":{"x":117,"y":537,"width":748,"height":12}},{"id":"7e4f4ec8-1c9e-44fc-a494-86b643f41c34","block_type":"box","text":"provisions.","page_number":170,"box":{"x":117,"y":552,"width":84,"height":12}},{"id":"820a1ffa-b4ed-4e2a-bd04-2b4248d14db9","block_type":"box","text":"Tax-Exempt Preferred Shares.","page_number":170,"box":{"x":118,"y":583,"width":224,"height":12}},{"id":"ea783618-935c-4dcf-9481-1185116ff2c3","block_type":"box","text":"Certain Funds may invest in preferred interests of other investment","page_number":170,"box":{"x":344,"y":583,"width":507,"height":12}},{"id":"08cd25b8-a7eb-4e2a-96d9-8ad5324e7b84","block_type":"box","text":"funds that pay dividends that are exempt from regular U.S. federal income tax. Such funds in turn","page_number":170,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"d6b37575-e188-4352-a443-241d8dea01e0","block_type":"box","text":"invest in municipal bonds and other assets that pay interest or make distributions that are exempt from","page_number":170,"box":{"x":117,"y":614,"width":765,"height":12}},{"id":"1085c96c-815d-42fd-ab14-ea930c98872c","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":170,"box":{"x":117,"y":630,"width":751,"height":12}},{"id":"c5cf4858-37af-425b-aec0-c22ffb82eab8","block_type":"box","text":"development of low-income, multi-family housing. Investment in such tax-exempt preferred shares","page_number":170,"box":{"x":116,"y":645,"width":733,"height":12}},{"id":"43846b0e-ed94-4411-a103-8b50aa50b186","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":661,"width":763,"height":12}},{"id":"729afea2-b856-4437-93a0-f03247c3f4a8","block_type":"box","text":"have additional risks, including illiquid investments risk, the absence of regulation governing","page_number":170,"box":{"x":117,"y":676,"width":679,"height":12}},{"id":"11d32122-972a-4b45-897d-692d0ca55daf","block_type":"box","text":"investment practices, capital structure and leverage, affiliated transactions and other matters, and","page_number":170,"box":{"x":117,"y":692,"width":723,"height":12}},{"id":"983ea550-6dd8-4483-8c55-4fe13be985e2","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":707,"width":736,"height":12}},{"id":"8278f7a3-43c5-498b-b100-fd6c791b0f07","block_type":"box","text":"investments in tax-exempt preferred shares as investments in municipal bonds.","page_number":170,"box":{"x":117,"y":723,"width":587,"height":12}},{"id":"54c624ac-f16d-4e3c-bcd4-25c553fa823e","block_type":"box","text":"Trust Preferred Securities.","page_number":170,"box":{"x":118,"y":754,"width":193,"height":9}},{"id":"90fa7de1-9c31-4c50-9f28-8148419c5dd1","block_type":"box","text":"Certain Funds may invest in trust preferred securities. Trust preferred","page_number":170,"box":{"x":318,"y":754,"width":514,"height":12}},{"id":"5ef3ef3e-1042-4ff1-a115-8443261e692c","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":769,"width":718,"height":12}},{"id":"8b644fd6-c326-432a-a4bf-3e4cd949bd83","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":785,"width":746,"height":12}},{"id":"ee16c344-2106-4bd8-85ef-72cf72dfa042","block_type":"box","text":"form of beneficial interests in subordinated debentures or similarly structured securities. The trust","page_number":170,"box":{"x":116,"y":800,"width":721,"height":12}},{"id":"19feb32c-6c16-4c38-b993-af051b393f65","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":816,"width":753,"height":12}},{"id":"c3cb7ebb-73be-4707-80e0-004b3acafc4f","block_type":"box","text":"perpetual in nature or have stated maturity dates.","page_number":170,"box":{"x":117,"y":831,"width":370,"height":12}},{"id":"b65eef69-7a58-49a7-a8f0-67ef5f7e5a67","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":862,"width":748,"height":12}},{"id":"720b4ceb-84ad-4d29-b7ca-a410b364cf95","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":878,"width":771,"height":12}},{"id":"785ca6fa-5955-4c20-a172-fa8d26f2f046","block_type":"box","text":"II-83","page_number":170,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"b9e26587-9dab-47a3-a7c0-013bad0607fd","block_type":"box","text":"NM1026U-6030748-170/260","page_number":170,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ccb250a9-64ee-4962-8843-66473aa22d00","block_type":"box","text":"trust preferred securities typically permit an issuer to defer the payment of income for five years or","page_number":171,"box":{"x":116,"y":87,"width":733,"height":12}},{"id":"3f6c50aa-05da-4041-809c-8e8a26a92cd3","block_type":"box","text":"more without triggering an event of default. Because of their subordinated position in the capital","page_number":171,"box":{"x":117,"y":102,"width":713,"height":13}},{"id":"a346e4f2-fbf7-43ce-9505-f42676c03a9b","block_type":"box","text":"structure of an issuer, the ability to defer payments for extended periods of time without default","page_number":171,"box":{"x":116,"y":118,"width":708,"height":12}},{"id":"e3127611-e364-457b-aee7-5eb65cc9235a","block_type":"box","text":"consequences to the issuer, and certain other features (such as restrictions on common dividend","page_number":171,"box":{"x":116,"y":134,"width":725,"height":12}},{"id":"cf3346d5-450f-41a6-a0de-acf6afddc4b1","block_type":"box","text":"payments by the issuer or ultimate guarantor when full cumulative payments on the trust preferred","page_number":171,"box":{"x":117,"y":149,"width":733,"height":12}},{"id":"7063b989-496c-45d4-b0db-de9628a820a7","block_type":"box","text":"securities have not been made), these trust preferred securities are often treated as close substitutes","page_number":171,"box":{"x":116,"y":165,"width":756,"height":12}},{"id":"ca034106-5a3c-47bd-a6b5-f317e9952ffd","block_type":"box","text":"for traditional preferred securities, both by issuers and investors.","page_number":171,"box":{"x":116,"y":180,"width":483,"height":12}},{"id":"e5d46903-0b4a-4c79-9700-a708927ab573","block_type":"box","text":"Trust preferred securities include but are not limited to trust originated preferred securities (“TOPRS","page_number":171,"box":{"x":116,"y":211,"width":740,"height":12}},{"id":"8a5b5fd6-6b34-4cc1-9441-5a57cf4b2ba0","block_type":"box","text":"®","page_number":171,"box":{"x":857,"y":210,"width":9,"height":7}},{"id":"0e557a66-d50a-4b87-b8e7-5931d9c6e7eb","block_type":"box","text":"”);","page_number":171,"box":{"x":867,"y":211,"width":20,"height":12}},{"id":"d6278ac2-d388-4f31-9bfb-362e09eb9511","block_type":"box","text":"monthly income preferred securities (“MIPS","page_number":171,"box":{"x":117,"y":227,"width":322,"height":12}},{"id":"e4faec02-26aa-47da-b44b-4027ce8abaea","block_type":"box","text":"®","page_number":171,"box":{"x":439,"y":226,"width":10,"height":7}},{"id":"11c2f887-1544-4eb7-8baa-b4dcc3c1b8c7","block_type":"box","text":"”); quarterly income bond securities (“QUIBS","page_number":171,"box":{"x":449,"y":227,"width":330,"height":12}},{"id":"28056829-68ce-4ad4-834d-e7fd13fe79b6","block_type":"box","text":"®","page_number":171,"box":{"x":780,"y":226,"width":9,"height":7}},{"id":"c293fece-423c-48ae-9a03-ec99e78dcb6d","block_type":"box","text":"” ); quarterly","page_number":171,"box":{"x":790,"y":227,"width":95,"height":12}},{"id":"f581cd9f-bd8b-4b6b-b153-5059edb7f4e7","block_type":"box","text":"income debt securities (“QUIDS","page_number":171,"box":{"x":117,"y":242,"width":234,"height":12}},{"id":"b913809d-b454-4261-b1cf-c188b8ce50c0","block_type":"box","text":"®","page_number":171,"box":{"x":352,"y":241,"width":10,"height":7}},{"id":"0a752008-2eb4-44a1-a9f1-c821f6120a46","block_type":"box","text":"”); quarterly income preferred securities (“QUIPS","page_number":171,"box":{"x":362,"y":242,"width":361,"height":12}},{"id":"e5b44c75-0204-488d-b937-29677b5e80b4","block_type":"box","text":"SM","page_number":171,"box":{"x":724,"y":242,"width":16,"height":6}},{"id":"e5742f35-fff6-47fb-a48a-c5d24b63884c","block_type":"box","text":"”); corporate trust","page_number":171,"box":{"x":741,"y":242,"width":133,"height":12}},{"id":"6ccdbbff-b0c7-44bd-a301-b6b0a4632fe9","block_type":"box","text":"securities (“CORTS","page_number":171,"box":{"x":116,"y":258,"width":145,"height":12}},{"id":"691ea09b-8c7d-4d98-9f04-809b313850b7","block_type":"box","text":"®","page_number":171,"box":{"x":262,"y":257,"width":9,"height":7}},{"id":"a4c15286-5fc1-4bfb-bd49-41bd981b74e2","block_type":"box","text":"”); public income notes (“PINES","page_number":171,"box":{"x":271,"y":258,"width":235,"height":12}},{"id":"9de0d85e-efe8-48e4-92a7-9d654b62e764","block_type":"box","text":"®","page_number":171,"box":{"x":507,"y":257,"width":9,"height":7}},{"id":"21beecb8-f5f4-4e8b-a25f-c43e3d32cfac","block_type":"box","text":"”); and other trust preferred securities.","page_number":171,"box":{"x":517,"y":258,"width":287,"height":12}},{"id":"d76f90cb-0cab-4b08-b623-35b0457b722e","block_type":"box","text":"Trust preferred securities are typically issued with a final maturity date, although some are perpetual in","page_number":171,"box":{"x":116,"y":289,"width":766,"height":12}},{"id":"d22e6c24-05e1-4a89-8a7e-4c5211b0a33e","block_type":"box","text":"nature. In certain instances, a final maturity date may be extended and/or the final payment of principal","page_number":171,"box":{"x":117,"y":304,"width":767,"height":12}},{"id":"51ca1121-dfa0-4066-a2f2-a44677aa914c","block_type":"box","text":"may be deferred at the issuer’s option for a specified time without default. No redemption can typically","page_number":171,"box":{"x":117,"y":320,"width":760,"height":12}},{"id":"f04710d7-f67d-4249-b5f8-3398966d4e4d","block_type":"box","text":"take place unless all cumulative payment obligations have been met, although issuers may be able to","page_number":171,"box":{"x":116,"y":335,"width":758,"height":12}},{"id":"21673f3d-3270-471f-881a-96c1fbfd6532","block_type":"box","text":"engage in open-market repurchases without regard to whether all payments have been paid.","page_number":171,"box":{"x":116,"y":351,"width":693,"height":12}},{"id":"15e0a06e-c05f-4b45-8089-47196550ced0","block_type":"box","text":"Many trust preferred securities are issued by trusts or other special purpose entities established by","page_number":171,"box":{"x":117,"y":382,"width":737,"height":12}},{"id":"8b330331-6dd5-4f05-831a-bd814d02a8ad","block_type":"box","text":"operating companies and are not a direct obligation of an operating company. At the time the trust or","page_number":171,"box":{"x":116,"y":397,"width":752,"height":12}},{"id":"eb57f99d-854b-41aa-ada3-77aa6fc7410e","block_type":"box","text":"special purpose entity sells such preferred securities to investors, it purchases debt of the operating","page_number":171,"box":{"x":116,"y":413,"width":745,"height":12}},{"id":"f8c73236-9887-4766-a3ea-3602c2452bb0","block_type":"box","text":"company (with terms comparable to those of the trust or special purpose entity securities), which","page_number":171,"box":{"x":116,"y":428,"width":722,"height":12}},{"id":"c3efcbc2-94c4-4e4e-af88-5a979a970b93","block_type":"box","text":"enables the operating company to deduct for tax purposes the interest paid on the debt held by the","page_number":171,"box":{"x":116,"y":444,"width":739,"height":12}},{"id":"74dc2835-6d7d-46d1-9f3d-1c5844b21c34","block_type":"box","text":"trust or special purpose entity. The trust or special purpose entity is generally required to be treated as","page_number":171,"box":{"x":116,"y":459,"width":765,"height":12}},{"id":"5451e9b0-af55-45e1-a8ed-f1c0aa4f3d01","block_type":"box","text":"transparent for U.S. federal income tax purposes such that the holders of the trust preferred securities","page_number":171,"box":{"x":116,"y":475,"width":762,"height":12}},{"id":"d7471430-4af2-4eed-9ebe-fa32fd125a82","block_type":"box","text":"are treated as owning beneficial interests in the underlying debt of the operating company. Accordingly,","page_number":171,"box":{"x":116,"y":490,"width":772,"height":12}},{"id":"9173fd43-791d-4e7e-a34d-2bc37907a6e7","block_type":"box","text":"payments on the trust preferred securities are treated as interest rather than dividends for U.S. federal","page_number":171,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"ef42b792-d492-4b12-bef8-f31a2b1f76b2","block_type":"box","text":"income tax purposes. The trust or special purpose entity in turn would be a holder of the operating","page_number":171,"box":{"x":117,"y":521,"width":732,"height":12}},{"id":"00a11823-1e68-4c61-9dab-5f660e1153d1","block_type":"box","text":"company’s debt and would have priority with respect to the operating company’s earnings and profits","page_number":171,"box":{"x":116,"y":537,"width":754,"height":12}},{"id":"6bf553d9-9856-404f-a5ff-b13271d4c9de","block_type":"box","text":"over the operating company’s common shareholders, but would typically be subordinated to other","page_number":171,"box":{"x":116,"y":552,"width":729,"height":12}},{"id":"72a3d583-3ff5-4040-8519-45184d698010","block_type":"box","text":"classes of the operating company’s debt. Typically a preferred share has a rating that is slightly below","page_number":171,"box":{"x":116,"y":568,"width":760,"height":12}},{"id":"e8fbc1e4-ee49-485c-8ca0-f1efd01ceaa5","block_type":"box","text":"that of its corresponding operating company’s senior debt securities.","page_number":171,"box":{"x":116,"y":583,"width":512,"height":12}},{"id":"b4ffefa7-11a5-46af-bd16-d9b039724d57","block_type":"box","text":"Real Estate Investment Trusts (“REITs”).","page_number":171,"box":{"x":116,"y":614,"width":324,"height":12}},{"id":"20700209-d2aa-4c17-90ed-2598bf77dc1e","block_type":"box","text":"In pursuing its investment strategy, a Fund may invest in","page_number":171,"box":{"x":441,"y":614,"width":430,"height":12}},{"id":"1932faef-27a7-4fb0-87c2-c9162fcbe866","block_type":"box","text":"shares of REITs. REITs possess certain risks which differ from an investment in common stocks.","page_number":171,"box":{"x":116,"y":630,"width":724,"height":12}},{"id":"49d6c886-2199-4c3b-954c-c84720263bde","block_type":"box","text":"REITs are financial vehicles that pool investor’s capital to purchase or finance real estate. REITs may","page_number":171,"box":{"x":117,"y":645,"width":756,"height":12}},{"id":"c95415f8-2a6a-4072-9ad2-bafcbc28928e","block_type":"box","text":"concentrate their investments in specific geographic areas or in specific property types,","page_number":171,"box":{"x":116,"y":661,"width":646,"height":12}},{"id":"838fdde4-fecd-4bc4-a436-416ab67a9ee0","block_type":"box","text":"i.e.","page_number":171,"box":{"x":768,"y":661,"width":21,"height":9}},{"id":"6d64b42f-e44c-4588-9ea3-b10fa9cef3a4","block_type":"box","text":", hotels,","page_number":171,"box":{"x":792,"y":661,"width":56,"height":11}},{"id":"05cb5625-c6be-4413-af4b-f6bc5e8f6c1e","block_type":"box","text":"shopping malls, residential complexes and office buildings.","page_number":171,"box":{"x":116,"y":676,"width":435,"height":12}},{"id":"4a201681-c66e-48f5-9661-c9ba8ec42830","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":707,"width":746,"height":12}},{"id":"4c46ca42-c384-42e7-b0dc-b405d3742539","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":723,"width":749,"height":12}},{"id":"b5c95e79-a830-45c2-8424-f2e82359e400","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":738,"width":758,"height":12}},{"id":"e21f13b1-d40d-4a21-b933-72f5f2829737","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":754,"width":715,"height":12}},{"id":"a60c5c24-ca3d-4fdb-b116-1f1029ca8fd0","block_type":"box","text":"Mortgage REITs invest mostly in mortgages on real estate, which may secure construction,","page_number":171,"box":{"x":117,"y":769,"width":675,"height":12}},{"id":"82972dfd-e7df-4673-bf7a-d710c02c8640","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":785,"width":714,"height":12}},{"id":"de8fd06a-07b9-4cbe-967d-e2662541cac3","block_type":"box","text":"Hybrid REITs hold both ownership and mortgage interests in real estate.","page_number":171,"box":{"x":117,"y":800,"width":535,"height":12}},{"id":"afa99ab5-2fd5-45d9-a828-3441a049bd73","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":831,"width":749,"height":12}},{"id":"b392d1c9-e134-4e73-a275-0b84a2ed8602","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":847,"width":735,"height":12}},{"id":"c3c549bc-93ea-4802-825f-6344802c1290","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":862,"width":765,"height":12}},{"id":"2262cac3-8e67-4f99-94e2-2abc2b08d1e2","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":878,"width":727,"height":12}},{"id":"010d94c4-e6ac-4402-85ca-f377ddac0989","block_type":"box","text":"II-84","page_number":171,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"91d5816d-430b-4fe3-a394-dcc0e33e9e8e","block_type":"box","text":"NM1026U-6030748-171/260","page_number":171,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"aed18e01-7737-44e7-aefa-5b315d1eb0b2","block_type":"box","text":"rates, perceptions of prospective tenants of the safety, convenience and attractiveness of the","page_number":172,"box":{"x":117,"y":87,"width":695,"height":12}},{"id":"0e692b67-684f-4311-ad4e-603323c36a7b","block_type":"box","text":"properties, the ability of the owners to provide adequate management, maintenance and insurance, the","page_number":172,"box":{"x":117,"y":102,"width":770,"height":13}},{"id":"0c6fdac7-b1be-4fb6-8119-4ae385aa680b","block_type":"box","text":"cost of complying with the Americans with Disabilities Act, increased competition from new properties,","page_number":172,"box":{"x":116,"y":118,"width":761,"height":12}},{"id":"aa909c4f-12cc-45b8-84d4-3ee512a15063","block_type":"box","text":"the impact of present or future environmental legislation and compliance with environmental laws,","page_number":172,"box":{"x":116,"y":134,"width":729,"height":12}},{"id":"293c0dbb-f96e-4761-9175-e09ca0535cb8","block_type":"box","text":"failing to maintain their exemptions from registration under the Investment Company Act, changes in","page_number":172,"box":{"x":116,"y":149,"width":749,"height":12}},{"id":"1ed304a1-252c-4da2-9cba-2d472ff383e8","block_type":"box","text":"real estate taxes and other operating expenses, adverse changes in governmental rules and fiscal","page_number":172,"box":{"x":117,"y":165,"width":733,"height":12}},{"id":"a46bd012-c21f-48b1-96d6-774de7f5c20e","block_type":"box","text":"policies, adverse changes in zoning laws and other factors beyond the control of the issuers of the","page_number":172,"box":{"x":117,"y":180,"width":733,"height":12}},{"id":"52cbdda6-be60-4a78-b14e-27d7b6e9b899","block_type":"box","text":"REITs. To the extent that assets underlying a REIT are concentrated geographically, by property type,","page_number":172,"box":{"x":117,"y":196,"width":762,"height":12}},{"id":"c0c1dcc0-2fe7-4916-b415-99729f2d7b64","block_type":"box","text":"or in certain other respects, these risks may be heightened.","page_number":172,"box":{"x":116,"y":211,"width":446,"height":12}},{"id":"6415ed1c-9196-4b37-868c-29eb1a7c9f8a","block_type":"box","text":"In addition, distributions received by a Fund from REITs may consist of dividends, capital gains and/or","page_number":172,"box":{"x":117,"y":242,"width":761,"height":12}},{"id":"cc5fc55d-7a97-4d79-a2aa-dc7287228040","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":172,"box":{"x":117,"y":258,"width":760,"height":12}},{"id":"a75a1111-ffb1-4173-ac04-eb490122f637","block_type":"box","text":"companies, to the extent application of the Fund’s investment strategy results in the Fund investing in","page_number":172,"box":{"x":116,"y":273,"width":758,"height":12}},{"id":"c37de16a-384d-4c40-9ff1-525e420985d3","block_type":"box","text":"REIT shares, the percentage of the Fund’s dividend income received from REIT shares will likely","page_number":172,"box":{"x":117,"y":289,"width":722,"height":12}},{"id":"616ddabc-8676-49a9-8a50-afe3de284669","block_type":"box","text":"exceed the percentage of the Fund’s portfolio which is comprised of REIT shares. Ordinary REIT","page_number":172,"box":{"x":116,"y":304,"width":723,"height":12}},{"id":"a3e390f1-7b06-4601-b6a4-8be85ccd7e6a","block_type":"box","text":"dividends received by the Fund and distributed to the Fund’s shareholders will generally be taxable as","page_number":172,"box":{"x":116,"y":320,"width":762,"height":12}},{"id":"664ca8a0-80c0-4589-bf88-1e3a7d1c2279","block_type":"box","text":"ordinary income and will not constitute “qualified dividend income.” However, a non-corporate taxpayer","page_number":172,"box":{"x":116,"y":335,"width":768,"height":12}},{"id":"850415e1-9072-4d38-9a5d-a244d83f0aa3","block_type":"box","text":"who is a direct REIT shareholder may claim a 20% “qualified business income” deduction for ordinary","page_number":172,"box":{"x":116,"y":351,"width":757,"height":12}},{"id":"7b321ce2-728a-4979-acf8-0603c91d8d4e","block_type":"box","text":"REIT dividends, and a regulated investment company may report dividends as eligible for this","page_number":172,"box":{"x":117,"y":366,"width":698,"height":12}},{"id":"430909bb-bbe7-414c-96ea-0f5a7b0c233e","block_type":"box","text":"deduction to the extent the regulated investment company’s income is derived from ordinary REIT","page_number":172,"box":{"x":116,"y":382,"width":731,"height":12}},{"id":"8c085dee-7f43-4c0d-996e-04fa07714d80","block_type":"box","text":"dividends (reduced by allocable regulated investment company expenses). A shareholder may treat","page_number":172,"box":{"x":116,"y":397,"width":745,"height":12}},{"id":"80e3643b-88d2-4663-9b4d-31f287266117","block_type":"box","text":"the dividends as such provided the regulated investment company and the shareholder satisfy","page_number":172,"box":{"x":116,"y":413,"width":704,"height":12}},{"id":"34730849-a992-45e6-9ad9-8bafd3db5a48","block_type":"box","text":"applicable holding period requirements.","page_number":172,"box":{"x":116,"y":428,"width":298,"height":12}},{"id":"b9c59bad-0d16-44be-bee8-bfbc516eee84","block_type":"box","text":"REITs (especially mortgage REITs) are also subject to interest rate risk. Rising interest rates may","page_number":172,"box":{"x":117,"y":459,"width":728,"height":12}},{"id":"354a00c1-3ede-4613-a94b-799b1a0062c1","block_type":"box","text":"cause REIT investors to demand a higher annual yield, which may, in turn, cause a decline in the","page_number":172,"box":{"x":116,"y":475,"width":726,"height":12}},{"id":"ff67a495-abf0-4dff-bc21-76bb0e882c07","block_type":"box","text":"market price of the equity securities issued by a REIT. Rising interest rates also generally increase the","page_number":172,"box":{"x":117,"y":490,"width":764,"height":12}},{"id":"0212674c-21b6-482b-8ac5-e00a410b37a8","block_type":"box","text":"costs of obtaining financing, which could cause the value of a Fund’s REIT investments to decline.","page_number":172,"box":{"x":116,"y":506,"width":734,"height":12}},{"id":"6ddf6b8c-0004-4b88-bc26-9c9816b40880","block_type":"box","text":"During periods when interest rates are declining, mortgages are often refinanced. Refinancing may","page_number":172,"box":{"x":117,"y":521,"width":738,"height":12}},{"id":"f7c2edab-2b72-442c-8e44-250ee69da2d6","block_type":"box","text":"reduce the yield on investments in mortgage REITs. In addition, since REITs depend on payment","page_number":172,"box":{"x":117,"y":537,"width":726,"height":12}},{"id":"68fc874b-5346-4a97-9ac3-d60bf50264a0","block_type":"box","text":"under their mortgage loans and leases to generate cash to make distributions to their shareholders,","page_number":172,"box":{"x":117,"y":552,"width":743,"height":12}},{"id":"bc3a22b0-4dfe-413e-b1a7-5263462588fa","block_type":"box","text":"investments in REITs may be adversely affected by defaults on such mortgage loans or leases.","page_number":172,"box":{"x":117,"y":568,"width":712,"height":12}},{"id":"2d388eef-295c-4813-a029-710ac9686857","block_type":"box","text":"Investing in certain REITs, which often have small market capitalizations, may also involve the same","page_number":172,"box":{"x":117,"y":599,"width":741,"height":12}},{"id":"d1a8b931-f498-46bc-8ae8-69f5248e9da6","block_type":"box","text":"risks as investing in other small capitalization companies. REITs may have limited financial resources","page_number":172,"box":{"x":117,"y":614,"width":749,"height":12}},{"id":"800ae04c-c63d-446e-80ba-c620616fb7a3","block_type":"box","text":"and their securities may trade less frequently and in limited volume and may be subject to more abrupt","page_number":172,"box":{"x":116,"y":630,"width":758,"height":12}},{"id":"7ce4d77e-c434-4ad1-ac2c-b42ffdf06c10","block_type":"box","text":"or erratic price movements than larger company securities. Historically, small capitalization stocks, such","page_number":172,"box":{"x":116,"y":645,"width":768,"height":12}},{"id":"11afa5cd-7c89-4821-b1c5-fbaed637cb00","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":661,"width":750,"height":12}},{"id":"0af941c9-8521-4873-b216-59c6fcdbb534","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":676,"width":759,"height":12}},{"id":"d46da208-c997-4fd3-8ba0-ad8517dc8723","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":692,"width":750,"height":12}},{"id":"9ed18d7f-d83e-4d88-8299-76670295f966","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":707,"width":761,"height":12}},{"id":"af244fe2-e85f-48b7-b1a5-a01dd1757d22","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":723,"width":675,"height":12}},{"id":"283d99f7-a71c-45ee-a34d-7cb928e35aac","block_type":"box","text":"Market Risks/Recent Market Events.","page_number":172,"box":{"x":116,"y":754,"width":287,"height":9}},{"id":"c9770489-eb47-4147-8538-a8a8be5e1ed9","block_type":"box","text":"Securities may decline in value due to factors affecting","page_number":172,"box":{"x":409,"y":754,"width":405,"height":12}},{"id":"e59702b6-665d-4011-a964-39c9a06c574e","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":769,"width":762,"height":12}},{"id":"3d8d45b9-5622-4373-9369-8c1fbb3246a9","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":785,"width":720,"height":12}},{"id":"07dab707-abbc-42a3-beb1-aed5e1926f5f","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":800,"width":748,"height":12}},{"id":"f0427fb8-d9fb-4086-afab-743e25c5961d","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":816,"width":743,"height":12}},{"id":"f4f22b2f-edfc-4e7c-bace-aeafb112c3b0","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":831,"width":761,"height":12}},{"id":"f9962fa2-01a6-4063-9d9e-08e0b1e9fdd9","block_type":"box","text":"availability of credit, inflation rates, economic uncertainty, changes in laws, trade barriers, economic","page_number":172,"box":{"x":116,"y":847,"width":744,"height":12}},{"id":"dda3623e-15f0-4d45-87a0-82f919485145","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":862,"width":714,"height":12}},{"id":"60ab0ba9-c315-45e9-9d35-1b4f8c7203aa","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":878,"width":744,"height":12}},{"id":"8324fb22-442a-4b0c-8b3a-a8b27bda90b0","block_type":"box","text":"II-85","page_number":172,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"c48a4606-0813-4fdf-bb6c-cf276efff146","block_type":"box","text":"NM1026U-6030748-172/260","page_number":172,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d7cf83a2-bea1-4d45-94cd-069da72c710d","block_type":"box","text":"issues, recessions, or other events could have a significant impact on a Fund and its investments.","page_number":173,"box":{"x":117,"y":87,"width":730,"height":12}},{"id":"7f68b7b1-7e82-428f-8bc6-262808d8f852","block_type":"box","text":"During a general economic downturn in the securities markets, multiple asset classes may be","page_number":173,"box":{"x":117,"y":103,"width":698,"height":12}},{"id":"aa33d980-baea-45c7-ab52-3ad2e2331945","block_type":"box","text":"negatively affected. These factors may affect the level and volatility of securities prices and the liquidity","page_number":173,"box":{"x":117,"y":118,"width":768,"height":12}},{"id":"9cb3911b-167a-4c60-804e-8e0a4b1bcf87","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":173,"box":{"x":116,"y":134,"width":734,"height":12}},{"id":"a095f7aa-0d22-47a4-8d49-b3cbf165d054","block_type":"box","text":"maintain substantial trading positions that can be adversely affected by the level of volatility in the","page_number":173,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"bd9a4282-f6bd-471f-97bb-6ac94de30fc6","block_type":"box","text":"financial markets; the larger the positions, the greater the potential for loss. Unpredictable or unstable","page_number":173,"box":{"x":116,"y":165,"width":758,"height":12}},{"id":"7c9c7b8f-1958-4851-a6c8-272f083e2abb","block_type":"box","text":"market conditions may result in reduced opportunities to find suitable investments to deploy capital or","page_number":173,"box":{"x":117,"y":180,"width":756,"height":12}},{"id":"28c6cce1-2980-48bd-bd63-a3cedcd23f18","block_type":"box","text":"make it more difficult to exit and realize value","page_number":173,"box":{"x":117,"y":196,"width":339,"height":9}},{"id":"473481cf-003b-44e3-b7a2-5544b70b9a7c","block_type":"box","text":"from a Fund’s existing investments. It is important to","page_number":173,"box":{"x":456,"y":196,"width":394,"height":12}},{"id":"f8a1a657-a2b3-49c8-8d46-e78eefcaaf63","block_type":"box","text":"understand that a Fund can incur material losses even if it reacts quickly to difficult market conditions","page_number":173,"box":{"x":117,"y":211,"width":754,"height":12}},{"id":"9536da7b-92fc-4394-af66-40efb9221fe9","block_type":"box","text":"and there can be no assurance that a Fund will not suffer material adverse effects from broad and","page_number":173,"box":{"x":116,"y":227,"width":732,"height":9}},{"id":"f0b32fba-db4e-48c4-8753-a39d4ae5cef5","block_type":"box","text":"rapid changes in market conditions.","page_number":173,"box":{"x":117,"y":242,"width":268,"height":12}},{"id":"c7278562-da59-474f-bac8-e529aa76c906","block_type":"box","text":"Periods of unusually high volatility in the financial","page_number":173,"box":{"x":117,"y":273,"width":359,"height":12}},{"id":"9dfd9701-7c85-4134-9712-e32c93e9d50a","block_type":"box","text":"markets and restrictive credit conditions, sometimes","page_number":173,"box":{"x":477,"y":273,"width":381,"height":11}},{"id":"6d7a4c77-d943-4598-b8ca-982748e8bd7f","block_type":"box","text":"limited to a particular sector or a geography, can o","page_number":173,"box":{"x":117,"y":289,"width":364,"height":12}},{"id":"ad078910-6db2-4242-88c5-41d5da088784","block_type":"box","text":"ccur. Some countries, including the United States,","page_number":173,"box":{"x":482,"y":289,"width":368,"height":12}},{"id":"70ed6ca9-a6ae-4c9e-8222-2b9a38fc10f1","block_type":"box","text":"have adopted and/or are considering the adoption of more","page_number":173,"box":{"x":117,"y":304,"width":422,"height":12}},{"id":"ecefe8f0-670e-456a-8d7d-d8e71ac619f3","block_type":"box","text":"protectionist trade policies, a move away from","page_number":173,"box":{"x":539,"y":304,"width":344,"height":12}},{"id":"e1fa798a-b9f4-4363-acb3-c400f86d78ba","block_type":"box","text":"the tighter financial industry regulations that follow","page_number":173,"box":{"x":116,"y":320,"width":363,"height":12}},{"id":"725dc38a-ea30-4447-8316-ceebf73a0868","block_type":"box","text":"ed the financial crisis of","page_number":173,"box":{"x":480,"y":320,"width":174,"height":9}},{"id":"42963b89-cb16-4619-8bf0-28d281c00aef","block_type":"box","text":"2008, and/or substantially","page_number":173,"box":{"x":654,"y":320,"width":192,"height":12}},{"id":"b8a4f13a-5347-4a02-a64b-f73a0bd85c68","block_type":"box","text":"reducing corporate taxes. The exact shape of these","page_number":173,"box":{"x":117,"y":335,"width":379,"height":12}},{"id":"3ca21e7f-e921-44a8-b4d6-39c861261ba8","block_type":"box","text":"policies is still being considered, but the equity and","page_number":173,"box":{"x":497,"y":335,"width":372,"height":12}},{"id":"40c1734b-daca-40b3-ae36-a63360de6547","block_type":"box","text":"debt markets may react strongly to expectations of c","page_number":173,"box":{"x":116,"y":351,"width":381,"height":12}},{"id":"0aebc8a6-0e05-4e12-9f36-58c49e116ba8","block_type":"box","text":"hange, which could increase volatility, especially if","page_number":173,"box":{"x":498,"y":351,"width":367,"height":12}},{"id":"1aa75da2-e972-4010-a218-6321b3133f7d","block_type":"box","text":"the market’s expectations are not borne out. A rise in","page_number":173,"box":{"x":116,"y":366,"width":384,"height":12}},{"id":"0175e0eb-6185-4fd6-ba25-229840597903","block_type":"box","text":"protectionist trade policies, and the possibility of","page_number":173,"box":{"x":501,"y":366,"width":357,"height":12}},{"id":"bcb718d2-fc08-406f-bd05-458e47725473","block_type":"box","text":"changes to some international trade agreements, coul","page_number":173,"box":{"x":116,"y":382,"width":392,"height":12}},{"id":"23699464-dba8-43ad-91ca-50c9de192b22","block_type":"box","text":"d affect the economies of many nations in ways","page_number":173,"box":{"x":509,"y":382,"width":350,"height":12}},{"id":"d117cf3d-eca8-41ec-8d60-588f854fc9e7","block_type":"box","text":"that cannot necessarily be foreseen at the present","page_number":173,"box":{"x":116,"y":397,"width":370,"height":12}},{"id":"4c2d3de3-45fe-4173-afbc-785fe31eb2b2","block_type":"box","text":"time. In addition, geopolitical and other risks, including","page_number":173,"box":{"x":486,"y":397,"width":398,"height":12}},{"id":"44574b02-b230-4664-a19a-2334f61fa607","block_type":"box","text":"environmental and public health, may add to instability in world economies and markets generally.","page_number":173,"box":{"x":116,"y":413,"width":716,"height":12}},{"id":"d3cfac26-0fce-4dd7-99ee-49b449a47e2b","block_type":"box","text":"Economies and financial markets throughout the world","page_number":173,"box":{"x":117,"y":428,"width":400,"height":12}},{"id":"997a72b5-2b80-48a6-83d4-b9a055fae992","block_type":"box","text":"are increasingly interconnected. As a result,","page_number":173,"box":{"x":517,"y":428,"width":323,"height":12}},{"id":"fe0d0e9b-b513-4752-a2db-33a35eccd71f","block_type":"box","text":"whether or not a Fund invests in securities of issuers","page_number":173,"box":{"x":116,"y":444,"width":388,"height":9}},{"id":"d01dec4f-48df-4e50-aa9d-249d28e14a76","block_type":"box","text":"located in or with significant exposure to countries","page_number":173,"box":{"x":504,"y":444,"width":367,"height":12}},{"id":"e56cebef-9eec-49a2-a9bc-aef7d62fd2a5","block_type":"box","text":"experiencing economic, political and/or financial di","page_number":173,"box":{"x":116,"y":459,"width":364,"height":12}},{"id":"fec57964-408c-4830-a659-5f314d8d4ac2","block_type":"box","text":"fficulties, the value and liquidity of the Fund’s","page_number":173,"box":{"x":481,"y":459,"width":330,"height":12}},{"id":"c55458da-e506-4351-8489-442b806cb9c2","block_type":"box","text":"investments may be negatively affected by such events.","page_number":173,"box":{"x":117,"y":475,"width":411,"height":12}},{"id":"9e3c4a7a-df50-4243-80cc-21f737f760e4","block_type":"box","text":"Governments and regulators may take actions that affect the regulation of the Fund or the instruments","page_number":173,"box":{"x":117,"y":506,"width":754,"height":12}},{"id":"d3a50252-3f0c-49df-9577-96e572c14912","block_type":"box","text":"in which the Fund invests, or the issuers of such instruments, in ways that are unforeseeable. Future","page_number":173,"box":{"x":117,"y":521,"width":742,"height":12}},{"id":"9f162e78-e804-4d1b-986d-a8d043a3e421","block_type":"box","text":"legislation or regulation or other governmental actions could limit or preclude the Fund’s abilities to","page_number":173,"box":{"x":117,"y":537,"width":727,"height":12}},{"id":"cd1f538d-15a3-4570-a09a-7496af6e92f0","block_type":"box","text":"achieve its investment objectives or otherwise adversely impact an investment in the Fund. Recent","page_number":173,"box":{"x":116,"y":552,"width":730,"height":12}},{"id":"1ef61952-21f4-403a-a599-97af0c1a195e","block_type":"box","text":"policy initiatives undertaken by the U.S. government have the potential to impact international relations,","page_number":173,"box":{"x":117,"y":568,"width":763,"height":12}},{"id":"0279ec23-e462-491a-bf4b-e0215c43ca10","block_type":"box","text":"trade agreements and the overall regulatory environment in ways that could create uncertainty and","page_number":173,"box":{"x":116,"y":583,"width":730,"height":12}},{"id":"76e377a4-5b17-4cab-8eea-45df4f9e56cd","block_type":"box","text":"instability in domestic and global markets, and could adversely affect the investment performance of the","page_number":173,"box":{"x":117,"y":599,"width":766,"height":12}},{"id":"7b6ea588-9899-408d-b56d-f1552bebd9f8","block_type":"box","text":"Fund. In particular, actions taken by the U.S. government in respect of international trade relations could","page_number":173,"box":{"x":117,"y":614,"width":770,"height":12}},{"id":"c1056232-b230-416b-a47d-a23c1d3ccd32","block_type":"box","text":"lead to trade wars, increased costs for imported goods, disruptions in supply chains, reduced foreign","page_number":173,"box":{"x":117,"y":630,"width":742,"height":12}},{"id":"941cfdf3-2cfd-4b30-99bf-3d3b4d1fb602","block_type":"box","text":"investment, and instability in regions where the Fund invests. Political and diplomatic events within the","page_number":173,"box":{"x":117,"y":645,"width":755,"height":12}},{"id":"da561353-c652-4fda-a9e9-9fcc619ff1bb","block_type":"box","text":"United States, including a contentious domestic political environment, changes in political party control","page_number":173,"box":{"x":117,"y":661,"width":750,"height":12}},{"id":"7cfd486c-363b-41fe-9c9e-5b77f84a2f3e","block_type":"box","text":"of one or more branches of the U.S. Government, the U.S. Government’s inability at times to agree on a","page_number":173,"box":{"x":116,"y":676,"width":764,"height":12}},{"id":"4ac57405-f7c7-46da-9236-58427b8cf2f7","block_type":"box","text":"long-term budget and deficit reduction plan, the threat of a U.S. Government shutdown, and","page_number":173,"box":{"x":117,"y":692,"width":672,"height":12}},{"id":"ef33cbc3-0f85-43c2-b79c-517ea9ec60d4","block_type":"box","text":"disagreements over, or threats not to increase, the U.S. Government’s borrowing limit (or “debt ceiling”),","page_number":173,"box":{"x":116,"y":707,"width":763,"height":12}},{"id":"41fdf93a-e383-4d67-b599-18267b03e5e3","block_type":"box","text":"as well as political and diplomatic events abroad, may affect investor and consumer confidence and","page_number":173,"box":{"x":116,"y":723,"width":731,"height":12}},{"id":"79c097c0-9a94-48ba-a0c5-92f598be52cf","block_type":"box","text":"may adversely impact financial markets and the broader economy, perhaps suddenly and to a","page_number":173,"box":{"x":117,"y":738,"width":689,"height":12}},{"id":"9a61cd44-0dcf-494b-8290-4050250c5c33","block_type":"box","text":"significant degree. A downgrade of the ratings of U.S. Government debt obligations, or concerns about","page_number":173,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"2ce8286e-4ab4-4344-ba76-d729a43bf807","block_type":"box","text":"the U.S. Government’s credit quality in general, could have a substantial negative effect on the U.S. and","page_number":173,"box":{"x":116,"y":769,"width":764,"height":12}},{"id":"f9baba24-ef30-42b1-bcbe-463faf33462c","block_type":"box","text":"global economies. For example, concerns about the U.S. Government’s credit quality may cause","page_number":173,"box":{"x":116,"y":785,"width":710,"height":12}},{"id":"955b6a2b-2d3c-48e7-8d13-2a4c7e4f9243","block_type":"box","text":"increased volatility in the stock and bond markets, higher interest rates, reduced prices and liquidity of","page_number":173,"box":{"x":117,"y":800,"width":748,"height":12}},{"id":"fef6f648-52b9-4590-9d42-a3b30da4e832","block_type":"box","text":"U.S. Treasury securities, and/or increased costs of various kinds of debt. Moreover, although the U.S.","page_number":173,"box":{"x":117,"y":816,"width":745,"height":12}},{"id":"e75ef40b-484b-431d-965c-06e5a26da96a","block_type":"box","text":"Government has honored its credit obligations, there remains a possibility that the United States could","page_number":173,"box":{"x":117,"y":831,"width":754,"height":12}},{"id":"739d4495-f686-4768-ac7a-a0aad1cf5d0d","block_type":"box","text":"default on its obligations. The consequences of such an unprecedented event are impossible to predict,","page_number":173,"box":{"x":116,"y":847,"width":765,"height":12}},{"id":"be5410a9-0b5b-4124-9d54-10440aef67b8","block_type":"box","text":"but it is likely that a default by the United States would be highly disruptive to the U.S. and global","page_number":173,"box":{"x":117,"y":862,"width":714,"height":12}},{"id":"d6f7555c-ce08-4c8e-af57-d372d72537b8","block_type":"box","text":"securities markets and could significantly impair the value of the Fund’s investments.","page_number":173,"box":{"x":116,"y":878,"width":627,"height":12}},{"id":"87013091-2308-40c3-8f8f-ca3d16e63a7a","block_type":"box","text":"II-86","page_number":173,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"be493bb9-3b16-4bb9-ac7d-d1a5c58d7aae","block_type":"box","text":"NM1026U-6030748-173/260","page_number":173,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a835d850-0e39-47c2-adab-808cd74ec908","block_type":"box","text":"The COVID-19 pandemic resulted in significant market volatility, exchange suspensions and closures,","page_number":174,"box":{"x":116,"y":87,"width":761,"height":12}},{"id":"bf695cf0-d895-4d73-a584-51da2601de3b","block_type":"box","text":"declines in global financial markets, higher default rates, supply chain disruptions, and a substantial","page_number":174,"box":{"x":116,"y":102,"width":743,"height":13}},{"id":"ea7fed25-4245-45c2-8203-8089871a947c","block_type":"box","text":"economic downturn in economies throughout the world. The impact of this coronavirus, and other","page_number":174,"box":{"x":116,"y":118,"width":727,"height":12}},{"id":"75721d60-2003-4955-8ffc-f27aa8c6f019","block_type":"box","text":"epidemics and pandemics that may arise in the future, could affect the economies of many nations,","page_number":174,"box":{"x":116,"y":134,"width":741,"height":12}},{"id":"b0176c96-a585-4a88-81e8-4e082d4ce792","block_type":"box","text":"individual companies and the market in general in ways that cannot necessarily be foreseen at the","page_number":174,"box":{"x":117,"y":149,"width":733,"height":12}},{"id":"c9efe9ab-207a-4ab3-bfa1-8ffa7d4793fe","block_type":"box","text":"present time. These health crises may be short term or long term, and may exacerbate other pre","page_number":174,"box":{"x":117,"y":165,"width":721,"height":12}},{"id":"99816728-c320-4941-86d9-2de7be8602cc","block_type":"box","text":"existing political, social and economic risks, disrupt normal market conditions and operations, and","page_number":174,"box":{"x":116,"y":180,"width":729,"height":12}},{"id":"2346c648-8e64-480c-a32c-aee3fd8a8d25","block_type":"box","text":"negatively impact performance. In addition, the impact of infectious diseases in emerging developing or","page_number":174,"box":{"x":117,"y":196,"width":771,"height":12}},{"id":"0fb793e2-ce6b-4356-a0a8-b2ac799fbe83","block_type":"box","text":"emerging market countries may be greater due to less established health care systems.","page_number":174,"box":{"x":116,"y":211,"width":657,"height":12}},{"id":"250a7641-b9e2-41a4-af25-6afb385bf0c7","block_type":"box","text":"Legal and Regulatory Risks.","page_number":174,"box":{"x":116,"y":242,"width":208,"height":12}},{"id":"17d4ea3f-4889-4065-b627-eb47f89246c7","block_type":"box","text":"The Manager is part of a larger firm with multiple business lines active in","page_number":174,"box":{"x":326,"y":242,"width":547,"height":12}},{"id":"22ab1ac9-7bed-4bad-bf16-81764d9fe7a6","block_type":"box","text":"multiple jurisdictions that are governed by a multitude of legal systems and regulatory regimes, some","page_number":174,"box":{"x":117,"y":258,"width":753,"height":12}},{"id":"996d0bcb-83ba-46f9-9d8f-c8278053321e","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":174,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"8610b820-11a6-4f4f-a59c-3199720dd5ff","block_type":"box","text":"extensive and sophisticated legal, tax and regulatory risks, including changing laws and regulations,","page_number":174,"box":{"x":116,"y":289,"width":746,"height":12}},{"id":"6a18de6e-d9cb-42fa-b513-01a9ddff72ac","block_type":"box","text":"developing interpretations of such laws and regulations, as well as existing laws, and increased","page_number":174,"box":{"x":116,"y":304,"width":712,"height":12}},{"id":"00ae9d2e-b5b9-4d72-a39d-e3345475e640","block_type":"box","text":"scrutiny by regulators and law enforcement authorities. Unexpected economic, political, regulatory and","page_number":174,"box":{"x":116,"y":320,"width":766,"height":12}},{"id":"ce6e0ba2-d804-4201-b3c7-b2ca0ba52c9b","block_type":"box","text":"diplomatic events within the United States and abroad can trigger new and complex regulations that","page_number":174,"box":{"x":116,"y":335,"width":745,"height":12}},{"id":"29f9cd31-e657-4c4b-9a4f-6ef7a9b19377","block_type":"box","text":"the Manager and/or the Funds may need to comply with. The implementation of changes to comply","page_number":174,"box":{"x":116,"y":351,"width":742,"height":12}},{"id":"f6313200-5da4-47ab-a8d3-879c2c44fdeb","block_type":"box","text":"with current and/or new regulations applicable to the Funds and/or the Manager could have a material","page_number":174,"box":{"x":116,"y":366,"width":761,"height":12}},{"id":"90307015-1e17-45d2-be5f-b9f02474f0fc","block_type":"box","text":"adverse effect on the Funds (including by imposing material costs on the Funds, reducing profit","page_number":174,"box":{"x":116,"y":382,"width":712,"height":12}},{"id":"e85fb72e-6c54-4b3f-9335-959504cbddaa","block_type":"box","text":"margins, reducing investment opportunities or by otherwise restricting the Funds and/or the Manager).","page_number":174,"box":{"x":117,"y":397,"width":762,"height":12}},{"id":"862a4b97-cf94-400e-a35d-2e1a5c567da7","block_type":"box","text":"Tariff and Trade Policy Risks","page_number":174,"box":{"x":118,"y":428,"width":213,"height":12}},{"id":"756befc8-795f-4f93-a6a9-3d2dc6d42a28","block_type":"box","text":".","page_number":174,"box":{"x":331,"y":436,"width":9,"height":1}},{"id":"36a064d2-69c2-4c72-a608-f57859df2bc8","block_type":"box","text":"Some countries, including the U.S., have adopted more protectionist","page_number":174,"box":{"x":341,"y":428,"width":512,"height":12}},{"id":"ad8f8325-2deb-4903-ac2e-6fba180c896e","block_type":"box","text":"trade policies. The U.S. government recently altered its approach to international trade policy, resulting","page_number":174,"box":{"x":116,"y":444,"width":768,"height":12}},{"id":"122141e1-c920-42ee-9a1e-cbd680b74ba7","block_type":"box","text":"in significant impacts on international trade relations, certain tax and immigration policies, and other","page_number":174,"box":{"x":117,"y":459,"width":742,"height":12}},{"id":"4b7281da-f951-4892-a1bb-40a15bbe3cf1","block_type":"box","text":"aspects of the national and international political and financial landscape. The rise in protectionist trade","page_number":174,"box":{"x":116,"y":475,"width":769,"height":12}},{"id":"84f454e4-66fc-4f74-9c60-597bc89c6149","block_type":"box","text":"policies, slowing economic growth, changes to some major international trade agreements, risks","page_number":174,"box":{"x":117,"y":490,"width":718,"height":12}},{"id":"3fc0c0c3-a121-4fe8-bbdb-e8b73c323cf6","block_type":"box","text":"associated with trade agreements between the U.S. and the European Union, and the risks associated","page_number":174,"box":{"x":116,"y":506,"width":767,"height":12}},{"id":"7242b71a-fdd6-4df2-a307-d40a6c5444b1","block_type":"box","text":"with trade negotiations between the U.S. and China, could affect the economies of many nations in","page_number":174,"box":{"x":116,"y":521,"width":739,"height":12}},{"id":"2d53300d-ef66-4f30-b456-39315f9fe389","block_type":"box","text":"ways that cannot necessarily be foreseen at the present time.","page_number":174,"box":{"x":116,"y":537,"width":462,"height":12}},{"id":"4a0eef9e-13f3-42e6-a1cb-96a8eb1a826d","block_type":"box","text":"Global trade disruption, significant introductions of trade barriers, and bilateral trade frictions, together","page_number":174,"box":{"x":117,"y":568,"width":759,"height":12}},{"id":"1e519f44-6c35-4b25-a98d-9348fd60ebba","block_type":"box","text":"with any future downturns in the global economy resulting therefrom, could adversely affect the","page_number":174,"box":{"x":116,"y":583,"width":710,"height":12}},{"id":"41b2c760-4a15-45d1-92ae-eb62a50ca6e1","block_type":"box","text":"financial performance of a Fund and its investments. Trade policy may be an ongoing source of","page_number":174,"box":{"x":116,"y":599,"width":713,"height":12}},{"id":"b787e2a3-16ef-449d-ba4b-f689ce88b6fe","block_type":"box","text":"instability, potentially resulting in significant currency fluctuations and/or having other adverse effects","page_number":174,"box":{"x":117,"y":614,"width":751,"height":12}},{"id":"42e0403c-6503-4e23-8521-f6f3bd80c010","block_type":"box","text":"on international markets, international trade agreements, and/or other existing cross-border","page_number":174,"box":{"x":116,"y":630,"width":683,"height":12}},{"id":"f3575cbd-4bdb-4625-b9bb-f65775754623","block_type":"box","text":"cooperation arrangements (whether economic, tax, fiscal, legal, regulatory, or otherwise). To the extent","page_number":174,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"ac8a5c29-2532-4680-9173-94466bb6e00b","block_type":"box","text":"trade disputes escalate globally, there could be additional significant impacts on the sectors or","page_number":174,"box":{"x":116,"y":661,"width":700,"height":12}},{"id":"8a8ab8f6-d5fb-4517-b52b-8dc41d23e020","block_type":"box","text":"industries in which a Fund invests and other adverse impacts on a Fund’s overall performance.","page_number":174,"box":{"x":117,"y":676,"width":703,"height":12}},{"id":"c07d29f4-cebc-425a-a0ff-19b7270c0280","block_type":"box","text":"Geographic Risks","page_number":174,"box":{"x":117,"y":707,"width":131,"height":12}},{"id":"30f84a38-106c-4256-a726-e74da88f9308","block_type":"box","text":". Some of the companies in which the Fund invests may be located in, or otherwise","page_number":174,"box":{"x":250,"y":707,"width":616,"height":12}},{"id":"5f7fb1a2-3369-41a4-8402-9adc79e7be6e","block_type":"box","text":"connected to, parts of the world affected by natural disasters such as severe heat, earthquakes,","page_number":174,"box":{"x":116,"y":723,"width":711,"height":12}},{"id":"2495296f-ef0f-4150-b965-f142500eadb5","block_type":"box","text":"tornadoes, volcanic eruptions, wildfires, droughts, floods, hurricanes or tsunamis, and are economically","page_number":174,"box":{"x":116,"y":738,"width":766,"height":12}},{"id":"23c07f03-4063-4f72-adcc-64be31fe9ca9","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":754,"width":723,"height":12}},{"id":"c26855a3-2014-40cb-b6cc-cffd1ef92051","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":769,"width":754,"height":12}},{"id":"ff9e1543-2747-4615-81ec-3c169512641f","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":785,"width":736,"height":12}},{"id":"c05d9c20-1b52-43da-95fc-3f4be5c9cfaa","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":800,"width":667,"height":12}},{"id":"ab1a2377-42f5-4e83-bb44-54fe55f40c6a","block_type":"box","text":"Reference Rate Replacement Risk.","page_number":174,"box":{"x":116,"y":831,"width":275,"height":12}},{"id":"64bc2dd0-a576-4c0b-85bd-1b16af987c56","block_type":"box","text":"The London Interbank Offered Rate (“LIBOR”) had historically","page_number":174,"box":{"x":393,"y":831,"width":469,"height":12}},{"id":"3373f598-1542-4198-85b4-7934a9526c86","block_type":"box","text":"been used extensively in the U.S. and globally as a “benchmark” or “reference rate” for various","page_number":174,"box":{"x":117,"y":847,"width":707,"height":12}},{"id":"96e89ed1-757f-49bb-a709-5bd0c66aebcc","block_type":"box","text":"commercial and financial contracts, including corporate and municipal bonds, bank loans, asset","page_number":174,"box":{"x":116,"y":862,"width":714,"height":12}},{"id":"a2677609-3924-445d-a2fb-6c1fd2a7225b","block_type":"box","text":"backed and mortgage-related securities, interest rate swaps and other derivatives. Instruments in","page_number":174,"box":{"x":117,"y":878,"width":726,"height":12}},{"id":"c6c5408f-e981-4e84-9da5-a699974408bc","block_type":"box","text":"II-87","page_number":174,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"68a6ad14-7ee7-4d80-a56b-0c758f516bc1","block_type":"box","text":"NM1026U-6030748-174/260","page_number":174,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d67fa318-6983-4bc3-95cf-25191ef39968","block_type":"box","text":"which a Fund may have historically paid interest at floating rates based on LIBOR or may have been","page_number":175,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"f5fe203d-8c07-49d7-bbc4-5ccaa57bc643","block_type":"box","text":"subject to interest caps or floors based on LIBOR. The Funds and issuers of instruments in which a","page_number":175,"box":{"x":116,"y":102,"width":742,"height":13}},{"id":"506814a6-07e4-49fb-a143-1e1c1bc83416","block_type":"box","text":"Fund invests may have also historically obtained financing at floating rates based on LIBOR. In","page_number":175,"box":{"x":117,"y":118,"width":709,"height":12}},{"id":"2b121160-7277-467f-8467-f6583076abcc","block_type":"box","text":"connection with the global transition away from LIBOR led by regulators and market participants as a","page_number":175,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"5e6aaba5-684b-48ff-b0b4-3a5878ae5836","block_type":"box","text":"result of benchmark reforms, LIBOR was last published on a representative basis at the end of June","page_number":175,"box":{"x":117,"y":149,"width":748,"height":12}},{"id":"de807a2e-002c-459d-97a2-5a95d4c64151","block_type":"box","text":"2023. Alternative reference rates to LIBOR have been established in most major currencies and","page_number":175,"box":{"x":116,"y":165,"width":717,"height":12}},{"id":"d80084d9-dc53-426a-b793-98d9870e9149","block_type":"box","text":"markets in these alternative rates are continuing to develop (","page_number":175,"box":{"x":117,"y":180,"width":449,"height":12}},{"id":"acf25c6a-ee42-439c-b92d-27d4435611aa","block_type":"box","text":"e.g.","page_number":175,"box":{"x":568,"y":183,"width":25,"height":9}},{"id":"8a9fd253-090d-4810-9769-9f05d1e33918","block_type":"box","text":", the Secured Overnight Financing","page_number":175,"box":{"x":596,"y":180,"width":259,"height":12}},{"id":"a54a5ee7-e9e9-4525-87f7-26288250a655","block_type":"box","text":"Rate (“SOFR”) for USD-LIBOR). While the transition from LIBOR has gone relatively smoothly, residual","page_number":175,"box":{"x":117,"y":196,"width":771,"height":12}},{"id":"fde9acbe-9af9-4d6d-94dc-5654a3753c9d","block_type":"box","text":"risks associated with the transition may remain that may impact markets or particular investments and,","page_number":175,"box":{"x":117,"y":211,"width":765,"height":12}},{"id":"25a3c63e-81ab-46d3-9d06-f51ea36b3461","block_type":"box","text":"as such, the full impact of the transition on the Funds or the financial instruments in which the Funds","page_number":175,"box":{"x":116,"y":227,"width":749,"height":11}},{"id":"dbc77a9f-a9c1-4e34-8b4c-d201432888e1","block_type":"box","text":"invest cannot yet be fully determined.","page_number":175,"box":{"x":117,"y":242,"width":281,"height":12}},{"id":"84458c48-1b94-4b4b-b6fa-6be8e44683ac","block_type":"box","text":"SOFR is intended to be a broad measure of the cost of borrowing funds overnight in transactions that","page_number":175,"box":{"x":116,"y":273,"width":757,"height":12}},{"id":"752312f5-5138-42c3-9859-66e170762394","block_type":"box","text":"are collateralized by U.S. Treasury securities . SOFR is calculated based on transaction-level repo","page_number":175,"box":{"x":116,"y":289,"width":736,"height":12}},{"id":"1471bfbd-16cf-402f-82b2-fffd3dce7f76","block_type":"box","text":"data collected from various sources. For each trading day, SOFR is calculated as a volume-weighted","page_number":175,"box":{"x":116,"y":304,"width":755,"height":12}},{"id":"61aadf10-102a-47aa-a65f-df04dd01a8cc","block_type":"box","text":"median rate derived from such data. Because SOFR is a financing rate based on overnight secured","page_number":175,"box":{"x":117,"y":320,"width":744,"height":12}},{"id":"efd930c3-8692-4dfe-b303-fc7853c642ea","block_type":"box","text":"funding transactions, it differs fundamentally from LIBOR. LIBOR is intended to be an unsecured rate","page_number":175,"box":{"x":116,"y":335,"width":755,"height":12}},{"id":"810f6009-e334-45da-a488-ccd783f5848d","block_type":"box","text":"that represents interbank funding costs for different short-term maturities or tenors. It is a forward","page_number":175,"box":{"x":116,"y":351,"width":726,"height":12}},{"id":"6027c763-1652-4a58-9552-0bf7b2e5addf","block_type":"box","text":"looking rate reflecting expectations regarding interest rates for the applicable tenor. Thus, LIBOR is","page_number":175,"box":{"x":117,"y":366,"width":740,"height":12}},{"id":"e5930130-5812-4b14-8e67-2ab434a77d8b","block_type":"box","text":"intended to be sensitive, in certain respects, to bank credit risk and to term interest rate risk. In","page_number":175,"box":{"x":117,"y":382,"width":706,"height":12}},{"id":"0ec728a7-6f52-4e0b-be0f-6e914f58fd27","block_type":"box","text":"contrast, SOFR is a secured overnight rate reflecting the credit of U.S. Treasury securities as","page_number":175,"box":{"x":116,"y":397,"width":696,"height":12}},{"id":"9286c711-cd6e-46b7-8190-149e1947a824","block_type":"box","text":"collateral. Thus, it is largely insensitive to credit-risk considerations and to short-term interest rate risks.","page_number":175,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"408e3b70-73bf-4877-b503-a389abb42134","block_type":"box","text":"SOFR is a transaction-based rate, and it has been more volatile than other benchmark or market rates,","page_number":175,"box":{"x":116,"y":428,"width":770,"height":11}},{"id":"2262c817-39af-48dd-8a21-f19b9441764d","block_type":"box","text":"such as three-month LIBOR, during certain periods. For these reasons, among others, there is no","page_number":175,"box":{"x":116,"y":444,"width":730,"height":12}},{"id":"52495168-58d6-4f40-8a7e-b3acb1b50c60","block_type":"box","text":"assurance that SOFR, or rates derived from SOFR, will perform in the same or similar way as LIBOR","page_number":175,"box":{"x":116,"y":459,"width":755,"height":12}},{"id":"bd5f55a6-c9f8-4f3f-9fb6-a0d70102feb2","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":175,"box":{"x":116,"y":475,"width":767,"height":12}},{"id":"34779a5e-0a1b-4c0c-9dbb-dd2d6a48a402","block_type":"box","text":"substitute for LIBOR. SOFR has a relatively limited history, having been first published in April 2018.","page_number":175,"box":{"x":116,"y":490,"width":749,"height":12}},{"id":"83434ba8-970d-43ad-b9a0-44502d584096","block_type":"box","text":"The future performance of SOFR, and SOFR-based reference rates, cannot be predicted based on","page_number":175,"box":{"x":116,"y":506,"width":740,"height":12}},{"id":"201ce323-7444-4650-bbb2-c4559e4b70c7","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":175,"box":{"x":116,"y":521,"width":738,"height":12}},{"id":"8310b047-4fe8-4149-bec3-0ae99c61d6c0","block_type":"box","text":"levels of SOFR, LIBOR or other rates. There can also be no assurance that SOFR will not be","page_number":175,"box":{"x":117,"y":537,"width":695,"height":11}},{"id":"2dd5599d-b709-47d5-9890-06da784f03ed","block_type":"box","text":"discontinued or fundamentally altered in a manner that is materially adverse to the interests of the","page_number":175,"box":{"x":116,"y":552,"width":731,"height":12}},{"id":"1cc68f87-1554-4946-9558-8f0198bfd685","block_type":"box","text":"Fund.","page_number":175,"box":{"x":117,"y":568,"width":46,"height":9}},{"id":"abad61f9-4431-4773-85db-83b8220a22b1","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":599,"width":768,"height":12}},{"id":"0117cb3e-6d0d-4b2d-8c1b-c836ff187cc9","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":614,"width":765,"height":12}},{"id":"19f86bb7-f1ea-477f-980c-8b5831640792","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":630,"width":765,"height":12}},{"id":"62ee21b0-3969-4c12-8ce9-9b8cce1be0cf","block_type":"box","text":"(known as the “Benchmarks Regulation”). The Benchmarks Regulation has been enacted into United","page_number":175,"box":{"x":117,"y":645,"width":754,"height":12}},{"id":"9e7fb5c3-0184-4b49-a47f-f447f964034c","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":661,"width":750,"height":12}},{"id":"2bc44e9e-d2d1-430e-a6da-e9df4f5868ab","block_type":"box","text":"made by the Benchmarks (Amendment and Transitional Provision) (EU Exit) Regulations 2019 (SI","page_number":175,"box":{"x":117,"y":676,"width":727,"height":12}},{"id":"1485b50c-c214-4f1f-8a79-291b84ff6f4b","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":692,"width":761,"height":12}},{"id":"9d89c138-5ed1-44ce-8efc-4f3bace196af","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":707,"width":762,"height":12}},{"id":"0e8ce4fe-da13-42d5-a924-729c0823b82a","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":723,"width":721,"height":12}},{"id":"06df1645-e8d1-4352-8d4b-d95eb68b6c29","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":738,"width":696,"height":12}},{"id":"0b6f36a7-ad5e-4315-b08f-be0f39949925","block_type":"box","text":"benchmarks may be eliminated entirely. Such changes could cause increased market volatility and","page_number":175,"box":{"x":117,"y":754,"width":731,"height":12}},{"id":"eb9e949f-2c14-4e6e-a228-2011dd0fd972","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":769,"width":743,"height":12}},{"id":"3b364d8b-f5bf-46cc-99c1-c21bce90d8ea","block_type":"box","text":"there could be other consequences which cannot be predicted.","page_number":175,"box":{"x":116,"y":785,"width":466,"height":12}},{"id":"c2b8ecda-cb95-4ca4-863d-cc5c655b69de","block_type":"box","text":"Repurchase Agreements and Purchase and Sale Contracts.","page_number":175,"box":{"x":116,"y":816,"width":473,"height":12}},{"id":"524be077-6fb1-4b30-a581-308c3e786127","block_type":"box","text":"Under repurchase agreements and","page_number":175,"box":{"x":597,"y":816,"width":258,"height":12}},{"id":"3012c37a-c4e2-444c-8c0c-c49bb4fc9396","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":831,"width":740,"height":12}},{"id":"265e957d-654c-45dd-b4cd-0c328639031d","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":847,"width":703,"height":12}},{"id":"335a1043-a069-4bef-9f15-501dfb4780fe","block_type":"box","text":"currency, thereby determining the yield during the term of the agreement.","page_number":175,"box":{"x":116,"y":862,"width":549,"height":12}},{"id":"58a12e7f-2f79-4e6d-8c45-d109b6cc97c3","block_type":"box","text":"II-88","page_number":175,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"2d1657ba-858e-4efd-b716-d7f2b9402fd6","block_type":"box","text":"NM1026U-6030748-175/260","page_number":175,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"7258196e-a1cd-4d14-8ac2-a02fb52c840f","block_type":"box","text":"A purchase and sale contract differs from a repurchase agreement in that the contract arrangements","page_number":176,"box":{"x":116,"y":87,"width":751,"height":12}},{"id":"fc84c215-b652-4317-8619-4046aeec1d57","block_type":"box","text":"stipulate that securities are owned by the Fund and the purchaser receives any interest on the security","page_number":176,"box":{"x":116,"y":103,"width":766,"height":12}},{"id":"59f88749-837d-4b91-85a3-b13b5e76ece5","block_type":"box","text":"paid during the period. In the case of repurchase agreements, the prices at which the trades are","page_number":176,"box":{"x":117,"y":118,"width":717,"height":12}},{"id":"4781d5bc-4216-49b5-8958-2178730589cf","block_type":"box","text":"conducted do not reflect accrued interest on the underlying obligation; whereas, in the case of","page_number":176,"box":{"x":116,"y":134,"width":701,"height":12}},{"id":"d206f7d9-9e9a-477e-b16d-6335b53182f9","block_type":"box","text":"purchase and sale contracts, the prices take into account accrued interest. A Fund may enter into","page_number":176,"box":{"x":117,"y":149,"width":728,"height":12}},{"id":"b6cdf94f-cbd0-443b-8781-da5899551949","block_type":"box","text":"“tri-party” repurchase agreements. In “tri-party” repurchase agreements, an unaffiliated third-party","page_number":176,"box":{"x":116,"y":165,"width":729,"height":12}},{"id":"3be2d272-d84a-4afe-b490-0b7721be0c89","block_type":"box","text":"custodian maintains accounts to hold collateral for the Fund and its counterparties and, therefore, the","page_number":176,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"75ec478b-1fbf-4f50-a7a2-b293c0953dcd","block_type":"box","text":"Fund may be subject to the credit risk of those custodians.","page_number":176,"box":{"x":117,"y":196,"width":438,"height":12}},{"id":"c16d00a8-4b25-4f06-b3d9-0a8ab8d136a1","block_type":"box","text":"Some repurchase agreements and purchase and sale contracts are structured to result in a fixed rate","page_number":176,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"b94514d8-db93-4f37-9682-2f321151681b","block_type":"box","text":"of return insulated from market fluctuations during the term of the agreement, although such return","page_number":176,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"76e293c8-f15e-4b52-99a0-8a0bb6adb1af","block_type":"box","text":"may be affected by currency fluctuations. However, in the event of a default under a repurchase","page_number":176,"box":{"x":117,"y":258,"width":716,"height":12}},{"id":"9f127640-0347-4453-bb14-6203132d624c","block_type":"box","text":"agreement or under a purchase and sale contract, instead of the contractual fixed rate, the rate of","page_number":176,"box":{"x":116,"y":273,"width":730,"height":12}},{"id":"795e18c6-2f70-413c-a56d-ebe471b5f49e","block_type":"box","text":"return to the Fund would be dependent upon intervening fluctuations of the market values of the","page_number":176,"box":{"x":117,"y":289,"width":716,"height":12}},{"id":"b9569576-5d43-42ff-a8bc-b4a73d3a6a1f","block_type":"box","text":"securities underlying the contract and the accrued interest on those securities. In such event, the Fund","page_number":176,"box":{"x":116,"y":304,"width":766,"height":12}},{"id":"bfeff0ab-a8cf-431e-a785-d1ec7dbe3d96","block_type":"box","text":"would have rights against the seller for breach of contract with respect to any losses arising from","page_number":176,"box":{"x":116,"y":320,"width":721,"height":12}},{"id":"1967a8cf-b47c-4a2d-ab4e-e7cf259faddb","block_type":"box","text":"market fluctuations following the default.","page_number":176,"box":{"x":117,"y":335,"width":303,"height":12}},{"id":"bdb8061c-9c74-44b6-872a-ffecd3e4713c","block_type":"box","text":"Both types of agreement usually cover short periods, such as less than one week, although they may","page_number":176,"box":{"x":117,"y":366,"width":747,"height":12}},{"id":"c1b9ba1c-9940-4b6b-89bc-1d81dc8b6a37","block_type":"box","text":"have longer terms, and may be construed to be collateralized loans by the purchaser to the seller","page_number":176,"box":{"x":117,"y":382,"width":718,"height":12}},{"id":"42598918-6216-42d3-bb05-40c7b19eed57","block_type":"box","text":"secured by the securities transferred to the purchaser. In the case of a repurchase agreement, as a","page_number":176,"box":{"x":116,"y":397,"width":735,"height":12}},{"id":"71bcdd46-173c-4fd2-b31f-7c70e7f0e8eb","block_type":"box","text":"purchaser, a Fund’s Manager or sub-adviser will monitor the creditworthiness of the seller, and a Fund","page_number":176,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"e87888f1-b4d4-435b-a7ba-754b7aba458e","block_type":"box","text":"will require the seller to provide additional collateral if the market value of the securities falls below the","page_number":176,"box":{"x":116,"y":428,"width":753,"height":12}},{"id":"30449e57-514c-41a8-b964-a661cf4030b9","block_type":"box","text":"repurchase price at any time during the term of the repurchase agreement. The Fund does not have this","page_number":176,"box":{"x":117,"y":444,"width":769,"height":12}},{"id":"44e8814c-f733-4602-abe1-149f019a2d55","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":176,"box":{"x":117,"y":459,"width":765,"height":12}},{"id":"c305080a-6a08-459a-90f5-4151046884d4","block_type":"box","text":"Manager or sub-adviser will mark-to-market daily the value of the securities. Securities subject to","page_number":176,"box":{"x":117,"y":475,"width":715,"height":12}},{"id":"f685f15e-a5eb-4176-b844-c03df88edf08","block_type":"box","text":"repurchase agreements (other than tri-party repurchase agreements) and purchase and sale contracts","page_number":176,"box":{"x":117,"y":490,"width":757,"height":12}},{"id":"729f2a80-7ebd-4007-82be-649f0cfc6c3a","block_type":"box","text":"will be held by the Fund’s custodian (or sub-custodian) in the Federal Reserve/Treasury book-entry","page_number":176,"box":{"x":116,"y":506,"width":733,"height":12}},{"id":"ba4b6396-4224-499b-95d5-4311f3ccccf4","block_type":"box","text":"system or by another authorized securities depository.","page_number":176,"box":{"x":116,"y":521,"width":403,"height":12}},{"id":"af419394-74c6-4348-b338-9d3c9ef9f979","block_type":"box","text":"In the event of default by the seller under a repurchase agreement construed to be a collateralized loan,","page_number":176,"box":{"x":117,"y":552,"width":750,"height":12}},{"id":"c6bac2fa-80de-4657-944f-79458eefb225","block_type":"box","text":"the underlying securities are not owned by the Fund but only constitute collateral for the seller’s obligation","page_number":176,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"7e75161f-024e-470a-bc50-4d491bbdd192","block_type":"box","text":"to pay the repurchase price. Therefore, the Fund may suffer time delays and incur costs or possible losses","page_number":176,"box":{"x":116,"y":583,"width":770,"height":12}},{"id":"fd11b648-b275-4925-911d-7cd949cb8ac3","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":599,"width":759,"height":12}},{"id":"a6eb50ef-936a-48d5-be54-0127fac1bf2a","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":614,"width":733,"height":12}},{"id":"6cd4e430-d29b-4254-bf7c-df2a3dcd7bc4","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":630,"width":769,"height":12}},{"id":"ed10f9d2-fd3c-4aa6-bb01-bcd2da624f1b","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":645,"width":766,"height":12}},{"id":"a0f414e8-dea4-44ed-bbbc-f273d3d5be9c","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":661,"width":756,"height":12}},{"id":"958ff55d-f7d8-4ec3-9c3b-b0bb34f816ed","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":676,"width":723,"height":12}},{"id":"4b2b041b-d706-4575-8481-3970f9bb09ef","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":692,"width":616,"height":12}},{"id":"eea55a79-b602-49e5-a248-c8ae49922434","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":723,"width":743,"height":12}},{"id":"6f511965-639a-4f9a-8d8b-677d08858efa","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":738,"width":756,"height":12}},{"id":"c75f4755-38db-4cc0-916a-49479758d066","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":754,"width":749,"height":12}},{"id":"bf8a17f1-5448-4cfe-9b0c-749ff25b6937","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":769,"width":746,"height":12}},{"id":"7f6cd300-bd96-4467-8c0a-336c1e3b5e74","block_type":"box","text":"could not hold directly under its investment strategies without the repurchase obligation.","page_number":176,"box":{"x":116,"y":785,"width":650,"height":12}},{"id":"c9a5753f-34b6-42f8-bbe9-c5263eee61aa","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":816,"width":765,"height":12}},{"id":"1723a565-65ae-4535-be4a-6e10074fe2c8","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":831,"width":757,"height":12}},{"id":"5a9f90ed-9d77-4d13-99b3-6420a003c3f8","block_type":"box","text":"higher quality collateral and collateral with shorter maturities. If the repurchase agreement counterparty","page_number":176,"box":{"x":117,"y":847,"width":769,"height":12}},{"id":"49b1ce88-0947-490f-93a8-2b36b4e7dd49","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":862,"width":755,"height":12}},{"id":"f1261976-baaf-4d89-b989-d094a06a4b88","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":878,"width":666,"height":12}},{"id":"598bad48-7fd6-4601-9670-e78290373a26","block_type":"box","text":"II-89","page_number":176,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"d69f0b70-b778-4e74-9682-5ca81ac5869b","block_type":"box","text":"NM1026U-6030748-176/260","page_number":176,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bb8429c2-1329-4490-a71e-aa239477be2a","block_type":"box","text":"counterparty’s repurchase obligation, a Fund would retain the status of an unsecured creditor of the","page_number":177,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"e0e4ebbf-7acd-4200-b315-a73261e0cf21","block_type":"box","text":"counterparty (","page_number":177,"box":{"x":116,"y":102,"width":103,"height":13}},{"id":"0867e292-1c69-4ce7-a3d8-806d0c02063d","block_type":"box","text":"i.e.","page_number":177,"box":{"x":220,"y":103,"width":20,"height":9}},{"id":"aa580cde-68ae-4ca6-b048-4d1dac278eec","block_type":"box","text":", the position the Fund would normally be in if it were to hold, pursuant to its","page_number":177,"box":{"x":244,"y":102,"width":565,"height":13}},{"id":"97211c41-ebeb-44a2-b7be-e0ef4b8b86f2","block_type":"box","text":"investment policies, other unsecured debt securities of the defaulting counterparty) with respect to the","page_number":177,"box":{"x":117,"y":118,"width":760,"height":12}},{"id":"2575735a-ba9a-4e5b-ae99-1624fba7abbb","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":177,"box":{"x":116,"y":134,"width":752,"height":12}},{"id":"e0203f8b-fa1e-436e-82c2-1963c88a6a7f","block_type":"box","text":"principal and income involved in the transaction.","page_number":177,"box":{"x":117,"y":149,"width":361,"height":12}},{"id":"97cb2ae8-d9bd-43b3-9b25-f6ebd7b32d35","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":177,"box":{"x":117,"y":180,"width":761,"height":12}},{"id":"4aeb0a20-07f2-49eb-abed-8d7bf3e07fe3","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many repurchase agreements","page_number":177,"box":{"x":116,"y":196,"width":771,"height":12}},{"id":"470e28dc-0f97-431b-8969-92440858673d","block_type":"box","text":"and purchase and sale contracts, terms that delay or restrict the rights of counterparties, such as a","page_number":177,"box":{"x":116,"y":211,"width":738,"height":12}},{"id":"5195d036-dcd5-48fa-8cc4-fed2107d47ec","block_type":"box","text":"Fund, to terminate such agreements, take foreclosure action, exercise other default rights or restrict","page_number":177,"box":{"x":117,"y":227,"width":744,"height":12}},{"id":"2abddd12-bd06-49ca-9a5a-d734633fcee3","block_type":"box","text":"transfers of credit support in the event that the counterparty and/or its affiliates are subject to certain","page_number":177,"box":{"x":116,"y":242,"width":748,"height":12}},{"id":"3e444efc-a786-4838-8ea1-b577043e895f","block_type":"box","text":"types of resolution or insolvency proceedings. It is possible that these requirements, as well as","page_number":177,"box":{"x":116,"y":258,"width":707,"height":12}},{"id":"bf30187e-2fc8-4957-b8a4-89b624a80ff5","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":177,"box":{"x":117,"y":273,"width":729,"height":12}},{"id":"2c5a108f-a52e-43c1-a89f-3e95ccb04926","block_type":"box","text":"affect a Fund’s ability to terminate existing repurchase agreements and purchase and sale contracts or","page_number":177,"box":{"x":116,"y":289,"width":768,"height":12}},{"id":"c95f5577-8b66-4425-9a7e-29e6b958ed2b","block_type":"box","text":"to realize amounts to be received under such agreements. The SEC has also finalized rules that will","page_number":177,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"935a49f2-b3ba-4cf3-91f7-a86b5c2fe9ba","block_type":"box","text":"require certain transactions involving U.S. Treasuries, including repurchase agreements, to be centrally","page_number":177,"box":{"x":117,"y":320,"width":770,"height":12}},{"id":"6cfb78cf-d12c-4cb5-b8b7-1cc55dc7ae91","block_type":"box","text":"cleared. Compliance with these rules is expected to be required by the middle of 2027. Although the","page_number":177,"box":{"x":116,"y":335,"width":747,"height":12}},{"id":"e1bd494b-4a1e-42d6-b4c0-36804cc62df3","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":177,"box":{"x":117,"y":351,"width":770,"height":12}},{"id":"912c78cf-43bc-4614-8b7e-298cce56af7c","block_type":"box","text":"costs of such transactions and may adversely affect a Fund’s performance.","page_number":177,"box":{"x":116,"y":366,"width":563,"height":12}},{"id":"61d140b3-3ff2-4da1-bd11-4a68d9b387af","block_type":"box","text":"Restricted Securities.","page_number":177,"box":{"x":116,"y":397,"width":177,"height":10}},{"id":"716456fe-be07-461b-a072-2df9e3248f3e","block_type":"box","text":"A Fund may invest in or hold securities that are not registered under the","page_number":177,"box":{"x":293,"y":397,"width":539,"height":12}},{"id":"3381381c-4004-494d-a7ff-539bf611bb87","block_type":"box","text":"Securities Act (“restricted securities”), which may include securities in private companies and Rule","page_number":177,"box":{"x":116,"y":413,"width":733,"height":12}},{"id":"889ad5cd-b442-4ca8-942d-8cee1ae91bb0","block_type":"box","text":"144A Securities. Restricted securities may be sold in private placement transactions between issuers","page_number":177,"box":{"x":118,"y":428,"width":754,"height":12}},{"id":"a21b1689-30e9-42b9-9522-9c78d3cc47bb","block_type":"box","text":"and their purchasers, including through private negotiated transactions between the issuer and their","page_number":177,"box":{"x":116,"y":444,"width":745,"height":12}},{"id":"567b998c-307e-407c-812e-5d241dbe9ae6","block_type":"box","text":"purchasers, such as the Funds, and may be neither listed on an exchange nor traded in other","page_number":177,"box":{"x":117,"y":459,"width":698,"height":12}},{"id":"ac455aaa-b59a-4025-ba10-d32400a76b90","block_type":"box","text":"established markets. In many cases, privately placed securities may not be freely transferable under","page_number":177,"box":{"x":116,"y":475,"width":749,"height":12}},{"id":"e2b81287-a561-4f88-831b-ac0780ebab35","block_type":"box","text":"the laws of the applicable jurisdiction or due to contractual restrictions on resale. Some of these","page_number":177,"box":{"x":116,"y":490,"width":714,"height":12}},{"id":"621b622f-35c2-4d75-86a2-5c8ccee1c3c7","block_type":"box","text":"securities are new and complex, and trade only among institutions; the markets for these securities are","page_number":177,"box":{"x":116,"y":506,"width":769,"height":12}},{"id":"9d7ae2fe-2d3c-44eb-a5e5-b9062fbc1b60","block_type":"box","text":"still developing and may not function as efficiently as established markets. Typically, investments in","page_number":177,"box":{"x":116,"y":521,"width":742,"height":12}},{"id":"79dfb255-2aad-4db6-a540-62b1f46d24c0","block_type":"box","text":"private companies are in restricted securities that are not traded in public markets and subject to","page_number":177,"box":{"x":117,"y":537,"width":719,"height":12}},{"id":"924aa9e1-4435-4c06-aca2-af8115d88bd5","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":177,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"2de917be-9ccf-4cec-a67f-f9d95fb33931","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":177,"box":{"x":117,"y":568,"width":769,"height":12}},{"id":"c0c78a45-75d7-49f8-a570-364476ab6228","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":177,"box":{"x":116,"y":583,"width":741,"height":12}},{"id":"6dd4e497-6c53-41ef-a088-031480bb7318","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":599,"width":750,"height":12}},{"id":"1f18feb3-e6a5-40a8-b737-723ccb703dd8","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":614,"width":740,"height":12}},{"id":"df1fc98e-49f6-49d1-bdfa-283d2770965d","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":630,"width":757,"height":12}},{"id":"b9e1763b-9919-4665-985f-adbc4783f672","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":645,"width":713,"height":12}},{"id":"9465ddd2-d057-44e4-8cec-fb990fd182e5","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":661,"width":744,"height":12}},{"id":"d10be7fa-3689-4cff-97d7-e24b8c1c843b","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":676,"width":754,"height":12}},{"id":"2ceb2fa4-683d-4629-bc61-3b0fd9bfc80f","block_type":"box","text":"of registering the restricted security, and prevailing market conditions. In addition, issuers whose","page_number":177,"box":{"x":116,"y":692,"width":715,"height":12}},{"id":"01fc0cd2-1ba6-46b2-9f8f-a1e8606bb10a","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":707,"width":727,"height":12}},{"id":"e3526d42-e1b5-4a33-bfa2-dc6248519112","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":723,"width":736,"height":12}},{"id":"de84fcbb-1761-4b0b-b797-90da38ef42a8","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":738,"width":764,"height":12}},{"id":"30cc793f-6645-44e3-a369-4d590b03a9c6","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":754,"width":751,"height":12}},{"id":"42c20406-643a-409d-9606-9f0144abcc18","block_type":"box","text":"expenses of registration. Where registration is required for restricted securities, a considerable time","page_number":177,"box":{"x":116,"y":769,"width":738,"height":12}},{"id":"8d5c45b5-dc9c-4d84-89f6-68374764560e","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":785,"width":731,"height":12}},{"id":"8e638383-9e70-4cce-8db6-bfa0deca4b15","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":800,"width":744,"height":12}},{"id":"d3185efe-18da-4986-9b99-74e2fb07ad64","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":816,"width":731,"height":12}},{"id":"227046f8-cfc6-4513-9899-c8fef87b3c8c","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":831,"width":755,"height":12}},{"id":"74ad0e5a-3872-40f1-b5a9-4508ff11937f","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":847,"width":747,"height":12}},{"id":"54e16d9c-59e1-4559-934c-9efc7ac20c21","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":862,"width":722,"height":12}},{"id":"cb5a62a4-99c9-4dc3-a382-c4290ccb102f","block_type":"box","text":"prospectus, is materially inaccurate or misleading. Transactions in restricted securities may entail other","page_number":177,"box":{"x":117,"y":878,"width":769,"height":12}},{"id":"237e732d-a3de-477e-a6e7-df22967a1a02","block_type":"box","text":"II-90","page_number":177,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"f17d5644-de11-4637-a81e-7881cf99459b","block_type":"box","text":"NM1026U-6030748-177/260","page_number":177,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"729272ca-86ce-4b7f-ae30-037705b700a3","block_type":"box","text":"transaction costs that are higher than those for transactions in unrestricted securities. Certain of the","page_number":178,"box":{"x":116,"y":87,"width":744,"height":12}},{"id":"40fe9b9e-a791-42e0-b000-10cc971a70d7","block_type":"box","text":"Fund’s investments in private placements may consist of direct investments and may include","page_number":178,"box":{"x":117,"y":102,"width":692,"height":13}},{"id":"6ed2affc-b2b1-40cf-85bf-7e98ef4a0661","block_type":"box","text":"investments in smaller, less seasoned issuers, which may involve greater risks. Issuers of restricted","page_number":178,"box":{"x":117,"y":118,"width":744,"height":12}},{"id":"f1d80458-bc44-46ad-b4f8-25cf57ddb199","block_type":"box","text":"securities may not be subject to SEC reporting requirements, may not be required to maintain their","page_number":178,"box":{"x":116,"y":134,"width":737,"height":12}},{"id":"1c74baf3-e6b7-4588-af10-acb1c091a792","block_type":"box","text":"accounting records in accordance with generally accepted accounting principles, and may not be","page_number":178,"box":{"x":116,"y":149,"width":724,"height":12}},{"id":"de4b7613-4441-47c3-aa18-281ec580a6f6","block_type":"box","text":"required to maintain effective internal controls over financial reporting. As a result, BlackRock may not","page_number":178,"box":{"x":117,"y":165,"width":760,"height":12}},{"id":"c58f3c9b-4eb9-4e22-86b8-d54e627616e6","block_type":"box","text":"have timely or accurate information about the business, financial condition and results of operations of","page_number":178,"box":{"x":117,"y":180,"width":762,"height":12}},{"id":"251cfc04-24a1-48d6-a3e1-4165f6aa0bc1","block_type":"box","text":"such issuers, and investments in securities of such issuers may involve a high degree of business and","page_number":178,"box":{"x":116,"y":196,"width":764,"height":12}},{"id":"d336a79d-b17e-441f-911d-3be1ef5ed823","block_type":"box","text":"financial risk and may result in substantial losses to the Fund. Such issuers may also have limited","page_number":178,"box":{"x":116,"y":211,"width":729,"height":12}},{"id":"c28c501e-e26f-44d8-bb1c-b8dce74d4c41","block_type":"box","text":"product lines, markets or financial resources, or they may be dependent on a limited management","page_number":178,"box":{"x":117,"y":227,"width":731,"height":12}},{"id":"0129c406-2207-4136-a437-8584116a654f","block_type":"box","text":"group.","page_number":178,"box":{"x":116,"y":245,"width":52,"height":9}},{"id":"b49bda8b-26a8-4645-aaa8-6168d45b99ec","block_type":"box","text":"Certain restricted securities may represent limited investment opportunities and each shareholder’s","page_number":178,"box":{"x":117,"y":273,"width":740,"height":12}},{"id":"24864f9c-b88c-468b-87ce-8b1e808f17dc","block_type":"box","text":"proportionate investment exposure to such limited investment opportunities may be reduced","page_number":178,"box":{"x":117,"y":289,"width":687,"height":12}},{"id":"3bb47b27-d039-4519-95b7-cc7add7975fd","block_type":"box","text":"proportionately as the Fund’s net assets grow from new or additional investments made in the Fund by","page_number":178,"box":{"x":117,"y":304,"width":766,"height":12}},{"id":"4e633cf3-07a3-4be0-b255-fc8879a48fda","block_type":"box","text":"other shareholders. The issuer of a private placement may later register those shares for public sale in","page_number":178,"box":{"x":116,"y":320,"width":765,"height":12}},{"id":"25f13792-5247-488b-b88a-a39848c3e59c","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":178,"box":{"x":116,"y":335,"width":766,"height":12}},{"id":"31e58b75-68ba-4854-b4fa-18d82c4b1281","block_type":"box","text":"a limited trading market for securities of that issuer, including any direct investment by a Fund, or the","page_number":178,"box":{"x":116,"y":351,"width":752,"height":12}},{"id":"6b1e8165-c822-4679-be37-65ed3ebe5f14","block_type":"box","text":"Fund may be subject to contractual limitations on its ability to resell its existing securities following an","page_number":178,"box":{"x":117,"y":366,"width":754,"height":12}},{"id":"e3b88deb-5a3e-4f0a-a72b-3b4709e143e5","block_type":"box","text":"IPO. The inability of an applicable issuer of a restricted security to complete an IPO or offer other","page_number":178,"box":{"x":117,"y":382,"width":723,"height":12}},{"id":"5ff46740-cd16-408c-b051-e2e6370ae5b9","block_type":"box","text":"liquidity opportunities to the Fund and other investors will extend the holding period of a Fund’s","page_number":178,"box":{"x":117,"y":397,"width":708,"height":12}},{"id":"7c4fb889-fd0c-4f58-ace7-8f7089ec0116","block_type":"box","text":"investments, potentially indefinitely, and may adversely affect the value of the investments. In making","page_number":178,"box":{"x":117,"y":413,"width":756,"height":12}},{"id":"3a665073-63a6-481f-8f9e-3fca582ff8a7","block_type":"box","text":"investments in such securities, a Fund may obtain access to material nonpublic information, which may","page_number":178,"box":{"x":117,"y":428,"width":770,"height":12}},{"id":"51d15d8b-e2a1-4093-9ab1-8431f6083f79","block_type":"box","text":"restrict the Fund’s ability to conduct portfolio transactions in such securities. The activity of identifying,","page_number":178,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"b1475ae9-33e4-49e7-a054-f2af9fa473e8","block_type":"box","text":"completing, and realizing upon attractive investments in restricted securities is highly competitive and","page_number":178,"box":{"x":116,"y":459,"width":756,"height":12}},{"id":"bd586e76-2d1d-4a7b-81ba-7b7b1203d2ea","block_type":"box","text":"involves a high degree of uncertainty. A Fund will be competing for investments against other similarly","page_number":178,"box":{"x":117,"y":475,"width":761,"height":12}},{"id":"585bbc2c-acad-47b8-85d5-f430a271db51","block_type":"box","text":"situated investors. It is possible that competition for appropriate investment opportunities may increase,","page_number":178,"box":{"x":116,"y":490,"width":772,"height":12}},{"id":"3b854362-ad58-49cb-b37e-62e18b93d656","block_type":"box","text":"thus potentially reducing the number of investment opportunities available to a Fund and adversely","page_number":178,"box":{"x":116,"y":506,"width":738,"height":12}},{"id":"456a8f99-0dac-4c06-9e3c-2f55272a679c","block_type":"box","text":"affecting the terms upon which investments can be made. There is no assurance that investment","page_number":178,"box":{"x":116,"y":521,"width":724,"height":12}},{"id":"4fd20c52-aa59-4caf-a835-a0acce5d0a3a","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":178,"box":{"x":116,"y":537,"width":765,"height":12}},{"id":"29d96ba3-df75-470f-ad2b-dace7382e552","block_type":"box","text":"especially as that Fund grows in size.","page_number":178,"box":{"x":116,"y":552,"width":283,"height":12}},{"id":"83387251-6be0-491c-aaa2-6762ae412448","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":583,"width":722,"height":12}},{"id":"fb90003c-b6df-4736-9f47-3d824ff2b76f","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":599,"width":745,"height":12}},{"id":"877dd581-9bb6-4b44-8e95-d0dee7cdb7a4","block_type":"box","text":"values restricted securities in accordance with BlackRock’s valuation policies and procedures, which","page_number":178,"box":{"x":116,"y":614,"width":750,"height":12}},{"id":"726a6292-c112-491e-93cf-892ca9646626","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":630,"width":727,"height":12}},{"id":"4977a91c-8f42-4a32-8545-14741ceb439d","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":645,"width":725,"height":12}},{"id":"d62e4000-a16d-4f0f-aa79-7cd2dcce4141","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":661,"width":747,"height":12}},{"id":"86ac2cbb-8f5f-4a11-8519-ceef8c7026d3","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":676,"width":744,"height":12}},{"id":"e29c7a94-832e-4d3f-88a2-115c81620479","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":692,"width":686,"height":12}},{"id":"0ca3c19a-4d3e-4a7b-bdb2-a154bba8c67b","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":707,"width":717,"height":12}},{"id":"81482108-ed95-49f0-8717-eb9ea3490546","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":723,"width":755,"height":12}},{"id":"8c593af0-596f-4cab-8670-5121771337bb","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":738,"width":712,"height":12}},{"id":"5a2c7b05-7217-4105-ad67-891a2bf4d776","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":754,"width":742,"height":12}},{"id":"2ae758f4-cf36-4b06-b109-e70d7ac718a6","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":769,"width":710,"height":12}},{"id":"6e6a842e-14da-4f75-8a4b-3c495c8f7985","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":785,"width":757,"height":12}},{"id":"11ef0d03-d0b6-4d69-955d-586f75dae69b","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":800,"width":764,"height":12}},{"id":"221b63ee-9d68-4012-aff0-0802809eb326","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":816,"width":728,"height":12}},{"id":"7a430e01-0289-42ec-93e4-edae6ece14d8","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":831,"width":738,"height":12}},{"id":"791fa0c1-4ff0-4a61-85c1-51f6d1b69393","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":847,"width":728,"height":12}},{"id":"3d0375c2-a2d5-43e7-bbc8-de983383bde5","block_type":"box","text":"values that the Fund ultimately realizes upon the disposal of such investments.","page_number":178,"box":{"x":116,"y":862,"width":590,"height":12}},{"id":"2d16f4ba-3488-4acc-a233-3a75fd37bf32","block_type":"box","text":"II-91","page_number":178,"box":{"x":484,"y":909,"width":29,"height":9}},{"id":"9340beed-c762-4dff-b645-b1206b610d01","block_type":"box","text":"NM1026U-6030748-178/260","page_number":178,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"8a010f52-a2d3-48ba-bbd7-12d3fe38d79b","block_type":"box","text":"See also risks discussed under “Illiquid Investments.”","page_number":179,"box":{"x":116,"y":87,"width":400,"height":12}},{"id":"dae38793-09f4-4665-b76b-c23a1caa6434","block_type":"box","text":"Reverse Repurchase Agreements.","page_number":179,"box":{"x":116,"y":118,"width":271,"height":12}},{"id":"1f7a06d8-43db-49f1-8ca9-ab119b22ec52","block_type":"box","text":"A Fund may enter into reverse repurchase agreements with the","page_number":179,"box":{"x":389,"y":118,"width":481,"height":12}},{"id":"6f070074-bc11-4978-a3a5-aef685f1f6b5","block_type":"box","text":"same parties with whom it may enter into repurchase agreements. Under a reverse repurchase","page_number":179,"box":{"x":116,"y":134,"width":711,"height":12}},{"id":"d8a5c831-b578-4ce1-ad50-60ba9de77003","block_type":"box","text":"agreement, a Fund sells securities to another party and agrees to repurchase them at a particular date","page_number":179,"box":{"x":116,"y":149,"width":766,"height":12}},{"id":"aa27204a-980f-450c-81e8-2c3e3c04d647","block_type":"box","text":"and price. A Fund may enter into a reverse repurchase agreement when it is anticipated that the","page_number":179,"box":{"x":116,"y":165,"width":719,"height":12}},{"id":"e11c5891-701e-438a-9c7b-d4e329a3e94a","block_type":"box","text":"interest income to be earned from the investment of the proceeds of the transaction is greater than the","page_number":179,"box":{"x":117,"y":180,"width":765,"height":12}},{"id":"7caa2cdf-6656-4aea-8f73-bada002b5c3e","block_type":"box","text":"interest expense of the transaction.","page_number":179,"box":{"x":117,"y":196,"width":265,"height":11}},{"id":"9bda9a6c-bc92-4e3d-a12c-987ea3836d9a","block_type":"box","text":"The use of reverse repurchase agreements may be regarded as leveraging and, therefore, speculative.","page_number":179,"box":{"x":116,"y":227,"width":772,"height":12}},{"id":"fce956e9-5c28-4ec6-9ed9-41388431628a","block_type":"box","text":"Furthermore, reverse repurchase agreements involve the risks that (i) the interest income earned in the","page_number":179,"box":{"x":117,"y":242,"width":771,"height":12}},{"id":"2440587a-a21e-4d3d-9775-42a7eb711319","block_type":"box","text":"investment of the proceeds will be less than the interest expense, (ii) the market value of the securities","page_number":179,"box":{"x":117,"y":258,"width":765,"height":12}},{"id":"8a2df66d-a3a2-49d0-b307-0fc3f6b757e1","block_type":"box","text":"retained in lieu of sale by a Fund may decline below","page_number":179,"box":{"x":117,"y":273,"width":390,"height":12}},{"id":"4c855123-7a0e-4382-bb3f-1982edbac261","block_type":"box","text":"the price of the securities the Fund has sold but is","page_number":179,"box":{"x":507,"y":273,"width":375,"height":12}},{"id":"816b9c40-7834-4da4-b708-7d0fd75d31d4","block_type":"box","text":"obligated to repurchase, (iii) the market value of the securities sold will decline below the price at which","page_number":179,"box":{"x":116,"y":289,"width":770,"height":12}},{"id":"9246379e-e916-4c6f-8170-9349716373e6","block_type":"box","text":"the Fund is required to repurchase them and (iv) the securities will not be returned to the Fund.","page_number":179,"box":{"x":116,"y":304,"width":710,"height":12}},{"id":"9af05fdf-9857-46b2-a262-b6d7e70079a6","block_type":"box","text":"In addition, if the buyer of securities under a reverse repurchase agreement files for bankruptcy or","page_number":179,"box":{"x":117,"y":335,"width":731,"height":12}},{"id":"b8aac599-ec0c-4872-88b7-9106852687be","block_type":"box","text":"becomes insolvent, such buyer or its trustee or receiver may receive an extension of time to determine","page_number":179,"box":{"x":117,"y":351,"width":765,"height":12}},{"id":"df4ae102-0972-47fc-8ebd-73fc088ebf72","block_type":"box","text":"whether to enforce a Fund’s obligations to repurchase the securities and the Fund’s use of the","page_number":179,"box":{"x":116,"y":366,"width":704,"height":12}},{"id":"66e040a6-aaab-42d2-af41-b219615c3ac0","block_type":"box","text":"proceeds of the reverse repurchase agreement may effectively be restricted pending such decision.","page_number":179,"box":{"x":117,"y":382,"width":744,"height":12}},{"id":"7054d76d-9ebf-4762-9543-538e2f34be3b","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into reverse repurchase","page_number":179,"box":{"x":117,"y":413,"width":710,"height":12}},{"id":"105f01fd-a641-4060-b6f2-a1ba8f6b9b89","block_type":"box","text":"agreements and similar financing transactions (e.g., recourse and non-recourse tender option bonds,","page_number":179,"box":{"x":116,"y":428,"width":755,"height":12}},{"id":"12cf9ce4-c277-4452-a099-b8311b7a02fa","block_type":"box","text":"borrowed bonds) notwithstanding the limitation on the issuance of senior securities in Section 18 of the","page_number":179,"box":{"x":117,"y":444,"width":767,"height":12}},{"id":"08c91d70-9cf1-4195-b238-02d699957bf7","block_type":"box","text":"Investment Company Act, provided that the Fund either (i) complies with the 300% asset coverage","page_number":179,"box":{"x":117,"y":459,"width":736,"height":12}},{"id":"db0601d9-6ff8-4723-9a6f-41bada97990e","block_type":"box","text":"ratio with respect to all such transactions and any","page_number":179,"box":{"x":117,"y":475,"width":371,"height":12}},{"id":"eea20488-eca1-4fae-81f8-730891b36540","block_type":"box","text":"other borrowings in the aggregate, or (ii) treats all","page_number":179,"box":{"x":489,"y":475,"width":372,"height":12}},{"id":"3075a78e-800c-4900-8b19-035945c8aa89","block_type":"box","text":"such transactions as Derivatives Transactions under Rule 18f-4. See “— Derivatives — Regulation of","page_number":179,"box":{"x":116,"y":490,"width":756,"height":12}},{"id":"78e590ff-b9a4-4d46-813d-46d35b4ccb98","block_type":"box","text":"Derivatives — Rule 18f-4 under the Investment Company Act” above. The SEC has also finalized rules","page_number":179,"box":{"x":117,"y":506,"width":768,"height":12}},{"id":"a27a3ac5-ce4d-4dca-8576-0f7e194b0c6e","block_type":"box","text":"that will require certain transactions involving U.S. Treasuries, including reverse repurchase","page_number":179,"box":{"x":116,"y":521,"width":685,"height":12}},{"id":"0f480734-9abe-434a-84c5-783ac40e1cee","block_type":"box","text":"agreements, to be centrally cleared. Compliance with these rules is expected to be required by the","page_number":179,"box":{"x":116,"y":537,"width":736,"height":12}},{"id":"4ac72a1a-4485-4b8d-9d40-62d362776a2e","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":179,"box":{"x":117,"y":552,"width":762,"height":12}},{"id":"4618e74d-9abb-4c72-8879-463005b21be5","block_type":"box","text":"the availability or increase the costs of such transactions and may adversely affect a Fund’s","page_number":179,"box":{"x":116,"y":568,"width":686,"height":12}},{"id":"8c789bf6-7dbb-42de-87b7-acbcff27b40a","block_type":"box","text":"performance.","page_number":179,"box":{"x":117,"y":583,"width":103,"height":12}},{"id":"5485d6db-2f44-43c0-9d28-1d49f90f286f","block_type":"box","text":"Additionally, regulations adopted by global prudential regulators require certain bank-regulated","page_number":179,"box":{"x":116,"y":614,"width":707,"height":12}},{"id":"7b45b121-74d7-471a-8443-0add06847a9f","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":630,"width":732,"height":12}},{"id":"991aca97-a680-4c71-b3f0-055fdaeb6dab","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":645,"width":732,"height":12}},{"id":"3ace24e0-e2a7-4a2d-924b-c5bfb4c07eaa","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":661,"width":739,"height":12}},{"id":"2f8bbb19-4dcd-4848-9357-bd06e8103372","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":676,"width":742,"height":12}},{"id":"d6f6833d-2087-49f6-890d-6d98d3887a44","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":692,"width":702,"height":12}},{"id":"51eaa884-c567-4a82-9db9-f1a55b624140","block_type":"box","text":"potential additional government regulation and other developments in the market, could adversely","page_number":179,"box":{"x":117,"y":707,"width":725,"height":12}},{"id":"8e13b507-478e-4555-abd4-8693e6fe1ffc","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":723,"width":760,"height":12}},{"id":"09ed576b-82e4-4f01-8049-b21dc6590038","block_type":"box","text":"received under such agreements.","page_number":179,"box":{"x":117,"y":738,"width":247,"height":12}},{"id":"d6f1cce7-0c31-4d91-ba62-4a006a25e6af","block_type":"box","text":"Rights Offerings and Warrants to Purchase.","page_number":179,"box":{"x":116,"y":769,"width":349,"height":12}},{"id":"97a448ff-d9e8-4e10-80f3-578f2a0f7bcf","block_type":"box","text":"Certain Funds may participate in rights offerings and","page_number":179,"box":{"x":471,"y":769,"width":388,"height":12}},{"id":"85188ee8-f97d-4382-96ea-03cb29d80727","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":785,"width":754,"height":12}},{"id":"0558e33e-897f-4632-9f69-e533e5eeca58","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":800,"width":758,"height":12}},{"id":"d0824b98-0ab3-43bc-a794-f996e6f70012","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":816,"width":754,"height":12}},{"id":"c8d9086b-6898-4f18-a568-19b2b8307fe7","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":831,"width":760,"height":12}},{"id":"15df7b01-938d-4003-9b6b-aceb2b9c2d67","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":847,"width":760,"height":12}},{"id":"3bc24c4c-ab68-4869-85fe-98f0d21bdf0b","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":862,"width":732,"height":12}},{"id":"e712ef6b-7def-46f8-ac21-3493b3886f19","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":878,"width":762,"height":12}},{"id":"2269b4f4-8fbb-499a-b915-ff83fdc57ecd","block_type":"box","text":"II-92","page_number":179,"box":{"x":484,"y":909,"width":31,"height":9}},{"id":"79b26380-e79b-46c6-bd6e-a0f123c3e3ee","block_type":"box","text":"NM1026U-6030748-179/260","page_number":179,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"32bb846f-e41a-4fd4-acbe-ad4a88443194","block_type":"box","text":"security’s market price such as when there is no movement in the level of the underlying security.","page_number":180,"box":{"x":116,"y":87,"width":728,"height":12}},{"id":"5135dc48-36f9-4237-960d-453cd6344967","block_type":"box","text":"Buying a warrant does not make the Fund a shareholder of the underlying stock. The warrant holder","page_number":180,"box":{"x":117,"y":102,"width":747,"height":13}},{"id":"0e452671-f4d1-40c3-90ae-777fc656de01","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":180,"box":{"x":117,"y":118,"width":766,"height":12}},{"id":"352233c6-08da-4d0a-a90c-cb7aafc94628","block_type":"box","text":"to assets of the issuer, and for this reason investments in warrants may be more speculative than other","page_number":180,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"0f14d43a-dfcd-4f39-b6db-9eeaffb94c41","block_type":"box","text":"equity-based investments.","page_number":180,"box":{"x":116,"y":149,"width":200,"height":12}},{"id":"a20decec-c413-4265-82d9-91de149f88a7","block_type":"box","text":"Rule 144A Securities.","page_number":180,"box":{"x":116,"y":180,"width":170,"height":10}},{"id":"9fdf98ba-2cf7-4eca-a79d-fbb52ea153b9","block_type":"box","text":"A Fund may purchase securities that can be offered and sold only to “qualified","page_number":180,"box":{"x":287,"y":180,"width":590,"height":12}},{"id":"10c6c81a-ad43-4fba-b82a-5008a9149b85","block_type":"box","text":"institutional buyers” pursuant to Rule 144A under the Securities Act. See “Restricted Securities” above.","page_number":180,"box":{"x":117,"y":196,"width":769,"height":12}},{"id":"4d7d1916-2f69-4ded-8b70-577f3b889014","block_type":"box","text":"Securities Lending.","page_number":180,"box":{"x":117,"y":227,"width":153,"height":12}},{"id":"bdfbe096-9f06-4b32-aed1-bac8e88448dd","block_type":"box","text":"Each Fund may lend portfolio securities to certain borrowers that BlackRock","page_number":180,"box":{"x":271,"y":227,"width":575,"height":12}},{"id":"370514d0-b36a-4962-9d38-dec18e5a447f","block_type":"box","text":"determines to be creditworthy, including borrowers affiliated with BlackRock. The borrowers provide","page_number":180,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"b9aadcd2-bece-47cf-a344-e6b050d8ef08","block_type":"box","text":"collateral that is maintained in an amount at least","page_number":180,"box":{"x":116,"y":258,"width":369,"height":9}},{"id":"4b2e87e8-2c97-4243-8209-7437283aca28","block_type":"box","text":"equal to the current market value of the securities","page_number":180,"box":{"x":486,"y":258,"width":373,"height":11}},{"id":"6b04f534-826f-40b6-8e6d-58af69eee68a","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":180,"box":{"x":117,"y":273,"width":755,"height":12}},{"id":"8c5835d2-2fdb-4223-b227-c6a1a16df1f9","block_type":"box","text":"securities loans of the particular Fund exceeds one-third of the value of such Fund’s total assets","page_number":180,"box":{"x":116,"y":289,"width":718,"height":12}},{"id":"1b2f373b-0c14-4a0a-9e83-e6c9b250a073","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":180,"box":{"x":117,"y":304,"width":765,"height":12}},{"id":"2786444b-6bf7-4855-8a16-683c0cf4b0c9","block_type":"box","text":"return of the securities loaned. Each Fund receives, by way of substitute payment, the value of any","page_number":180,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"38dbf6c3-421a-4be1-bba8-7ed74d471482","block_type":"box","text":"interest or cash or non-cash distributions paid on the loaned securities that it would have otherwise","page_number":180,"box":{"x":117,"y":335,"width":738,"height":12}},{"id":"cbd2c55e-c328-4aeb-84c4-a913de682c33","block_type":"box","text":"received if the securities were not on loan.","page_number":180,"box":{"x":117,"y":351,"width":318,"height":9}},{"id":"b2f73207-b475-413b-84e1-f882beae182b","block_type":"box","text":"With respect to loans that are collateralized by cash, the borrower may be entitled to receive a fee","page_number":180,"box":{"x":116,"y":382,"width":732,"height":12}},{"id":"50b66637-649e-4bb1-b3a7-2faa8adf15b8","block_type":"box","text":"based on the amount of cash collateral. The Funds are compensated by any positive difference","page_number":180,"box":{"x":117,"y":397,"width":712,"height":12}},{"id":"a891fb44-c207-46f0-bdb9-e18e2d70cbe3","block_type":"box","text":"between the amount earned on the reinvestment of cash collateral and the fee paid to the borrower. In","page_number":180,"box":{"x":117,"y":413,"width":763,"height":12}},{"id":"a3c208eb-91e9-48b3-a830-9ab496f0fd38","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":180,"box":{"x":116,"y":428,"width":765,"height":12}},{"id":"cfc008ff-6de7-4ae7-bcef-499c3123504a","block_type":"box","text":"percentage of the market value of the loaned securities. Any cash collateral received by the Fund for","page_number":180,"box":{"x":117,"y":444,"width":750,"height":12}},{"id":"a84b0306-55b3-48bc-bcd3-641218598b2c","block_type":"box","text":"such loans, and uninvested cash, may be reinvested in certain short-term instruments either directly on","page_number":180,"box":{"x":116,"y":459,"width":770,"height":12}},{"id":"1ed8a43b-bc4f-4d6c-bf3f-2ee3537e1f01","block_type":"box","text":"behalf of the Fund or through one or more joint accounts or money market funds, including those","page_number":180,"box":{"x":117,"y":475,"width":722,"height":12}},{"id":"7607d9d7-1d17-4166-9a23-3730cdf8789e","block_type":"box","text":"affiliated with BlackRock; such investments are subject to investment risk.","page_number":180,"box":{"x":116,"y":490,"width":553,"height":12}},{"id":"451c42ff-97c4-451f-9ee5-958aa363b459","block_type":"box","text":"Securities lending involves exposure to certain risks, including operational risk (","page_number":180,"box":{"x":116,"y":521,"width":589,"height":12}},{"id":"a7ec3e84-da8f-4ad1-94bd-8e8257c62f83","block_type":"box","text":"i.e.","page_number":180,"box":{"x":706,"y":521,"width":21,"height":10}},{"id":"323a3518-c9eb-4300-b726-d206efd118f6","block_type":"box","text":", the risk of losses","page_number":180,"box":{"x":730,"y":521,"width":138,"height":11}},{"id":"a70d874f-d3fb-4743-92c2-6cfa4e3d520d","block_type":"box","text":"resulting from problems in the settlement and accounting process), “gap” risk (","page_number":180,"box":{"x":117,"y":537,"width":580,"height":12}},{"id":"b8c91bbf-6aeb-4a44-b5c8-de21ba24dc4c","block_type":"box","text":"i.e.","page_number":180,"box":{"x":698,"y":537,"width":21,"height":9}},{"id":"d8278ef1-c725-45ee-b5ef-1213bab8634a","block_type":"box","text":", the risk of a","page_number":180,"box":{"x":722,"y":537,"width":100,"height":11}},{"id":"f8120725-1b77-4bd8-96c2-3f24a45acca3","block_type":"box","text":"mismatch between the return on cash collateral reinvestments and the fees each Fund has agreed to","page_number":180,"box":{"x":117,"y":552,"width":755,"height":12}},{"id":"4c880fe2-ddb3-4f65-b588-5f03eb89c263","block_type":"box","text":"pay a borrower), foreign exchange risk (","page_number":180,"box":{"x":117,"y":568,"width":296,"height":12}},{"id":"014ce1b7-ca17-4d68-ba3a-cbd40d1b83cc","block_type":"box","text":"i.e.","page_number":180,"box":{"x":414,"y":568,"width":20,"height":9}},{"id":"9dd45912-99e1-4926-bdbb-985bbd781a02","block_type":"box","text":", the risk of a shortfall at default when a cash collateral","page_number":180,"box":{"x":437,"y":568,"width":409,"height":11}},{"id":"2e2dff31-a461-4822-9ff2-81cfc0fb8fa4","block_type":"box","text":"investment is denominated in a currency other than the currency of the assets being loaned due to","page_number":180,"box":{"x":117,"y":583,"width":735,"height":12}},{"id":"38d19d4c-d1af-4446-98ee-2edc9ab49898","block_type":"box","text":"movements in foreign exchange rates), and credit, legal, counterparty and market risks (including the","page_number":180,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"37eb633e-7632-461d-8bc1-9a5b1b18a191","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":614,"width":709,"height":12}},{"id":"8e8e7acc-7e54-4b52-8d71-3c550ee79522","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":630,"width":748,"height":12}},{"id":"d7809649-0275-4749-82bb-5eeb85d3f86d","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":645,"width":754,"height":12}},{"id":"49ccc7ef-b38a-4aff-b892-4077402bc93b","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":661,"width":759,"height":12}},{"id":"1c9e6553-c12a-4e22-a798-b9892c3c0eaa","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":676,"width":698,"height":12}},{"id":"f543d33c-8fcb-462a-8b60-468eccd7c02b","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":692,"width":730,"height":12}},{"id":"633528cf-e182-44f0-a81f-426e16ddc520","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":707,"width":743,"height":12}},{"id":"a0490dba-2848-4034-b801-c294fba93477","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":723,"width":745,"height":12}},{"id":"8c3d004f-0338-45a8-9da0-a715fbbdcb96","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":738,"width":746,"height":12}},{"id":"70198c2b-4124-452e-98bc-863f91930dad","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":754,"width":743,"height":12}},{"id":"762b591c-a2ba-4b0c-9fdd-2ae8782ab14c","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":769,"width":763,"height":12}},{"id":"09350936-5b89-40c4-812a-0fb865a645ec","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":785,"width":734,"height":12}},{"id":"f5e9f40c-e1fd-4f08-96eb-1bc8579932be","block_type":"box","text":"transaction costs incurred in purchasing replacement securities. This latter event could trigger adverse","page_number":180,"box":{"x":116,"y":800,"width":760,"height":12}},{"id":"a75f84fb-a468-49bb-a834-318e3db53ef0","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":816,"width":736,"height":12}},{"id":"a69d1f98-068e-4e56-b680-ca03d567f8df","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":831,"width":737,"height":12}},{"id":"060b1df5-3a47-4011-af31-b86527da0c5f","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":847,"width":752,"height":12}},{"id":"64f735bc-f9d5-4f4b-b1af-7740ac104a0f","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":862,"width":765,"height":12}},{"id":"93f9d3e7-640b-4edb-b4af-df3202de8bb3","block_type":"box","text":"Additionally, substitute payments received by a Fund representing qualified REIT dividends paid on","page_number":180,"box":{"x":116,"y":878,"width":741,"height":12}},{"id":"6f40e218-0050-497a-a9fd-728e7d9f5c08","block_type":"box","text":"II-93","page_number":180,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e10c95e7-250a-4a22-8112-6dd13eb7f4c3","block_type":"box","text":"NM1026U-6030748-180/260","page_number":180,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"48b9a7b0-664f-4052-aff0-2287aed97968","block_type":"box","text":"REIT securities loaned out by the Fund will not be considered qualified REIT dividends, and","page_number":181,"box":{"x":117,"y":87,"width":684,"height":12}},{"id":"d3c130f5-08fb-43b1-8221-7532078d0c8d","block_type":"box","text":"distributions by the Fund of such substitute payments will not be eligible for a 20% deduction currently","page_number":181,"box":{"x":116,"y":102,"width":761,"height":13}},{"id":"43551de0-a591-4d2b-bc10-61cbdea24095","block_type":"box","text":"available for ordinary REIT dividends paid to non-corporate shareholders provided certain other","page_number":181,"box":{"x":116,"y":118,"width":713,"height":12}},{"id":"b27fe73a-ae69-4e57-9ccc-938486590a35","block_type":"box","text":"requirements are satisfied. The securities lending agent will take into account the tax effects on","page_number":181,"box":{"x":117,"y":134,"width":710,"height":12}},{"id":"b46151bd-183f-4502-ab7d-356bad41f2f3","block_type":"box","text":"shareholders caused by these differences in connection with a Fund’s securities lending program.","page_number":181,"box":{"x":116,"y":149,"width":730,"height":12}},{"id":"2df96fef-603c-40fa-8041-5167864ad961","block_type":"box","text":"Substitute payments received on tax-exempt securities loaned out will not be tax-exempt income.","page_number":181,"box":{"x":116,"y":165,"width":727,"height":12}},{"id":"bdc5a005-0a24-4516-8fcf-81ec0b5fd631","block_type":"box","text":"There could also be changes in the status of issuers under applicable laws and regulations, including","page_number":181,"box":{"x":116,"y":180,"width":755,"height":12}},{"id":"09c1497b-3c60-42c5-b844-a448d8357196","block_type":"box","text":"tax regulations, that may impact the regulatory or tax treatment of loaned securities and could, for","page_number":181,"box":{"x":116,"y":196,"width":729,"height":12}},{"id":"52594190-634d-4569-aa75-e457b621b767","block_type":"box","text":"example, result in a delay in the payment of dividend equivalent payments owed to a Fund (as","page_number":181,"box":{"x":116,"y":211,"width":704,"height":12}},{"id":"83919346-1e5f-478d-9e5a-f1f6e0d275b7","block_type":"box","text":"permitted by applicable law).","page_number":181,"box":{"x":117,"y":227,"width":217,"height":12}},{"id":"944f8110-4b8b-4dda-a51c-7f532f0ac72a","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":181,"box":{"x":117,"y":258,"width":761,"height":12}},{"id":"315acbcd-3fbf-47c7-a7d9-5327501de5f1","block_type":"box","text":"certain of their affiliates to include in certain financial contracts, including many securities lending","page_number":181,"box":{"x":116,"y":273,"width":723,"height":12}},{"id":"1e6b9a46-e14d-4844-86f0-090894b2e8f8","block_type":"box","text":"agreements, terms that delay or restrict the rights of counterparties, such as the Fund, to terminate","page_number":181,"box":{"x":116,"y":289,"width":739,"height":12}},{"id":"6e40fe91-542c-441c-b387-66b4e09c9043","block_type":"box","text":"such agreements, foreclose upon collateral, exercise other default rights or restrict transfers of credit","page_number":181,"box":{"x":116,"y":304,"width":751,"height":12}},{"id":"047a7d65-5c6d-45d9-8f71-502a5570ffd5","block_type":"box","text":"support in the event that the counterparty and/or its affiliates are subject to certain types of resolution","page_number":181,"box":{"x":116,"y":320,"width":754,"height":12}},{"id":"574db811-1d8a-460c-ab4e-b3ecd9ef9fd6","block_type":"box","text":"or insolvency proceedings. It is possible that these requirements, as well as potential additional","page_number":181,"box":{"x":116,"y":335,"width":711,"height":12}},{"id":"8953a01a-30c0-4d17-8310-93817e563668","block_type":"box","text":"government regulation and other developments in the market, could adversely affect the Fund’s ability","page_number":181,"box":{"x":116,"y":351,"width":762,"height":12}},{"id":"5ea2663f-0622-4376-b2c2-be87898f4aaf","block_type":"box","text":"to terminate existing securities lending agreements or to realize amounts to be received under such","page_number":181,"box":{"x":116,"y":366,"width":744,"height":12}},{"id":"1f866c52-a66c-45a2-a81f-f3bb0ebcea40","block_type":"box","text":"agreements. Prudential regulation may also favor lenders that can provide additional protections, such","page_number":181,"box":{"x":116,"y":382,"width":764,"height":12}},{"id":"cd7c29c8-45cd-4f5a-9170-d97101c83530","block_type":"box","text":"as liens that are exercisable upon lender default, to bank borrowers. Certain Funds expect to provide","page_number":181,"box":{"x":116,"y":397,"width":754,"height":12}},{"id":"f75a6dbe-f11e-4165-bfcb-667a029b9b0c","block_type":"box","text":"additional protections to bank borrowers, where permitted pursuant to a Fund’s investment policies and","page_number":181,"box":{"x":116,"y":413,"width":771,"height":12}},{"id":"d6c95293-bf8e-4b53-9845-395f4c49a7a6","block_type":"box","text":"if BlackRock believes doing so is in the best interest of the Fund.","page_number":181,"box":{"x":117,"y":428,"width":484,"height":12}},{"id":"b9fc4f1b-f162-4c41-99a1-a1580b2b4506","block_type":"box","text":"The SEC has adopted a rule that will require reporting and public disclosure of securities loan","page_number":181,"box":{"x":116,"y":459,"width":698,"height":12}},{"id":"609835d8-cb2b-4385-bbee-a1d7e0366785","block_type":"box","text":"transaction","page_number":181,"box":{"x":116,"y":475,"width":81,"height":9}},{"id":"33d0e30f-53cc-4ad0-87b7-95dbe23ccec6","block_type":"box","text":"information (not including party names); this may include, but is not limited to, information","page_number":181,"box":{"x":204,"y":475,"width":667,"height":12}},{"id":"34bdb7f7-afb1-4dc7-a647-02a26f244e8a","block_type":"box","text":"about securities","page_number":181,"box":{"x":116,"y":490,"width":117,"height":10}},{"id":"1069f0d6-f75d-4ad7-ae88-ea81c1815310","block_type":"box","text":"loans entered into in connection with short sales. Compliance with this rule is expected","page_number":181,"box":{"x":239,"y":490,"width":648,"height":12}},{"id":"1207365a-b669-4b57-9e81-7afba8091eb4","block_type":"box","text":"to be required in early 2026, although a legal challenge against the rules is currently pending.","page_number":181,"box":{"x":116,"y":506,"width":697,"height":12}},{"id":"fe83bb78-0221-42d7-8cd8-74bbc1c2d825","block_type":"box","text":"Short Sales.","page_number":181,"box":{"x":117,"y":537,"width":95,"height":9}},{"id":"e9e1922d-b546-4cba-b244-fdf73a89178f","block_type":"box","text":"Certain Funds may make short sales of securities, either as a hedge against potential","page_number":181,"box":{"x":213,"y":537,"width":645,"height":12}},{"id":"9a5ca9c8-7a8b-4656-9aed-922d624a505c","block_type":"box","text":"declines in value of a portfolio security or to realize appreciation when a security that the Fund does","page_number":181,"box":{"x":116,"y":552,"width":744,"height":12}},{"id":"3a6af2de-92ea-469c-9c38-b8be7693ce27","block_type":"box","text":"not own declines in value. Certain Funds have a fundamental investment restriction prohibiting short","page_number":181,"box":{"x":117,"y":568,"width":747,"height":12}},{"id":"31ddc1c2-d7c0-4ae2-a4e6-468eda8b6b69","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":181,"box":{"x":116,"y":583,"width":771,"height":12}},{"id":"76cb07f2-3a01-431a-8910-4f41f600fb0f","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":599,"width":769,"height":12}},{"id":"bbc9bae1-6eea-436d-b4e2-c3462b4d2eb6","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":614,"width":746,"height":12}},{"id":"8abffc86-ad69-4d15-9c28-c612ccf89de2","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":630,"width":717,"height":12}},{"id":"80a40bb3-ab35-465e-a809-684cf7b8df69","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":645,"width":719,"height":12}},{"id":"3fae1d33-e71d-477e-8d96-5cd26eb60135","block_type":"box","text":"securities to the lender of the securities.","page_number":181,"box":{"x":116,"y":661,"width":295,"height":9}},{"id":"2ad0a266-b87c-42fa-ae7d-3a20cde7f977","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":692,"width":756,"height":12}},{"id":"f90cf2aa-9706-4f32-a486-7e936b1bbfda","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":707,"width":763,"height":12}},{"id":"db6aa7f3-3acb-4644-933c-d4a32ef6c575","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":723,"width":712,"height":12}},{"id":"c75a72bc-12c1-458b-b205-7ab2e648ee85","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":738,"width":757,"height":12}},{"id":"e02ab5e0-f0cf-4e19-a7f9-23d1810c96df","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":754,"width":717,"height":12}},{"id":"ca6bf06e-a351-483e-a08d-751a4cfa45c3","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":769,"width":720,"height":12}},{"id":"750c4c90-0f95-4343-b9be-732a2e674bed","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":785,"width":722,"height":12}},{"id":"e34928ad-5bc7-4a03-855e-91f34be3d52a","block_type":"box","text":"interest) on its collateral deposited with such broker-dealer.","page_number":181,"box":{"x":117,"y":800,"width":437,"height":12}},{"id":"b19892d4-6617-4dbc-98c4-dfcdb6d0d1fa","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":831,"width":754,"height":12}},{"id":"583d6eaa-cdec-49f2-9c08-2fe3d72d6874","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":847,"width":755,"height":12}},{"id":"6b16809b-325d-4495-9a9c-6b86de65316f","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":862,"width":743,"height":12}},{"id":"177c9c43-681e-4f06-959e-ce05afd258ac","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":878,"width":735,"height":12}},{"id":"bbd0f043-5091-494c-a06e-408d5d29402e","block_type":"box","text":"II-94","page_number":181,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"96b7b14f-5f58-439b-bc84-4da85856ab01","block_type":"box","text":"NM1026U-6030748-181/260","page_number":181,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a713fbdb-3588-43cf-a28e-6270597f5f0f","block_type":"box","text":"securities that increase in value, it will likely underperform similar mutual funds that do not make short","page_number":182,"box":{"x":116,"y":87,"width":759,"height":12}},{"id":"c01d60c0-1dd9-4660-9623-0ddab11be1d1","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":182,"box":{"x":116,"y":102,"width":746,"height":13}},{"id":"0a999e3e-88c4-4124-a3bf-88ffe4f01539","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":182,"box":{"x":116,"y":118,"width":747,"height":12}},{"id":"d91d0690-2c35-40a2-a407-918a6f98b095","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":182,"box":{"x":116,"y":134,"width":750,"height":12}},{"id":"bfb62ca5-ff84-483f-a2e1-e24d79b7b877","block_type":"box","text":"sold the security short, its potential loss is limited only by the maximum attainable price of the security,","page_number":182,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"e6a1f9f4-ab00-4629-8e18-80a9bdcef88b","block_type":"box","text":"less the price at which the security was sold and may, theoretically, be unlimited.","page_number":182,"box":{"x":117,"y":165,"width":603,"height":12}},{"id":"5f237caf-e3dd-41af-acd9-001962a85d26","block_type":"box","text":"A Fund may also make short sales “against the box” without being subject to such limitations.","page_number":182,"box":{"x":116,"y":192,"width":698,"height":13}},{"id":"bfe5fb05-f517-4968-adf3-0a8f6c2e5f7f","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":182,"box":{"x":116,"y":220,"width":756,"height":12}},{"id":"2558216b-f17b-4515-a77c-6d7f252922a6","block_type":"box","text":"borrowings, which are considered Derivatives Transactions under the Rule. See “— Derivatives —","page_number":182,"box":{"x":117,"y":236,"width":734,"height":12}},{"id":"0d931b1c-e8da-47dc-8d94-5f2ade55eb53","block_type":"box","text":"Regulation of Derivatives — Rule 18f-4 under the Investment Company Act” above.","page_number":182,"box":{"x":117,"y":251,"width":624,"height":12}},{"id":"1105b348-9da2-4f97-9676-4f2fd0216ecc","block_type":"box","text":"Short sales are also subject to certain SEC regulations and certain European Union and United","page_number":182,"box":{"x":116,"y":279,"width":712,"height":12}},{"id":"91f7cb3a-7336-45b5-89c1-ec3a810a0a71","block_type":"box","text":"Kingdom regulations (under which there are restrictions on net short sales in certain securities). If the","page_number":182,"box":{"x":117,"y":295,"width":755,"height":12}},{"id":"79b1b25c-1a8f-4c5e-8bfe-fde04ba1d56d","block_type":"box","text":"SEC or regulatory authorities in other jurisdictions were to adopt additional restrictions regarding short","page_number":182,"box":{"x":116,"y":310,"width":761,"height":12}},{"id":"1c3d8af8-9235-403b-bb56-ae051ec0a6b0","block_type":"box","text":"sales, they could restrict a Fund’s ability to engage in short sales in certain circumstances, and the","page_number":182,"box":{"x":116,"y":326,"width":736,"height":12}},{"id":"bdb2d86d-2be0-4051-b690-0c896d3be533","block_type":"box","text":"Fund may be unable to execute its investment strategy as a result. In response to market events, the","page_number":182,"box":{"x":117,"y":341,"width":753,"height":12}},{"id":"91f664d8-8af9-4505-a8bb-8c195f6c11bf","block_type":"box","text":"SEC and regulatory authorities in other jurisdictions may adopt (and in certain cases, have adopted)","page_number":182,"box":{"x":116,"y":357,"width":747,"height":12}},{"id":"456a4332-f278-4ea3-9db6-90159c8f7f5b","block_type":"box","text":"bans or other restrictions on short sales of certain securities or on derivatives and other hedging","page_number":182,"box":{"x":117,"y":372,"width":717,"height":12}},{"id":"16531eb7-faeb-4edc-b6fc-af96b17ed320","block_type":"box","text":"instruments used to achieve a similar economic effect. Such bans or other restrictions may make it","page_number":182,"box":{"x":117,"y":388,"width":736,"height":12}},{"id":"adacf10d-6142-49a2-b0fd-d664f491e9fd","block_type":"box","text":"impossible for a Fund to execute certain investment strategies and may have a material adverse effect","page_number":182,"box":{"x":117,"y":403,"width":765,"height":12}},{"id":"a6af192d-2003-4d78-a750-2d2258bea075","block_type":"box","text":"on the Fund’s ability to generate returns.","page_number":182,"box":{"x":116,"y":419,"width":306,"height":12}},{"id":"e796e1dc-df99-4d53-bb6d-a8e9768fa103","block_type":"box","text":"Special Purpose Acquisition Companies.","page_number":182,"box":{"x":117,"y":447,"width":325,"height":12}},{"id":"44aebcdd-f836-405e-8c51-ebeb3972ecf2","block_type":"box","text":"A Fund may invest in stock, warrants, rights and other","page_number":182,"box":{"x":443,"y":447,"width":411,"height":12}},{"id":"6ebb9cd4-1c62-47a7-b046-5188fbee1fe9","block_type":"box","text":"interests issued by special purpose acquisition companies (“SPACs”) or similar special purpose entities","page_number":182,"box":{"x":117,"y":462,"width":770,"height":12}},{"id":"4fdbc152-7dce-4405-9c92-bb711267d657","block_type":"box","text":"that pool funds to seek potential acquisition opportunities, including the “founder’s” shares and","page_number":182,"box":{"x":116,"y":478,"width":704,"height":12}},{"id":"2470a4f1-4146-4b8c-9606-f38dd9c815c1","block_type":"box","text":"warrants described below. A SPAC is a publicly traded company that raises investment capital via an","page_number":182,"box":{"x":116,"y":493,"width":755,"height":12}},{"id":"7bfba76e-4fe9-49b4-aa92-27c8bc848b2f","block_type":"box","text":"IPO for the purpose of identifying and acquiring one or more operating businesses or assets. In","page_number":182,"box":{"x":117,"y":509,"width":711,"height":12}},{"id":"2d18dba9-6b5b-4fdb-aefa-e3ac8844c7f5","block_type":"box","text":"connection with forming a SPAC, the SPAC’s sponsors acquire “founder’s” shares, generally for","page_number":182,"box":{"x":116,"y":524,"width":716,"height":12}},{"id":"0c1edcba-a36f-4734-a2c7-509e54a8ee25","block_type":"box","text":"nominal consideration, and warrants that will result in the sponsors owning a specified percentage","page_number":182,"box":{"x":117,"y":540,"width":731,"height":12}},{"id":"7104da37-996f-4cd0-9dc0-f015cba1d8ff","block_type":"box","text":"(typically 20%) of the SPAC’s outstanding common stock upon completion of the IPO. At the time a","page_number":182,"box":{"x":117,"y":555,"width":740,"height":12}},{"id":"6e2d654f-ab19-43af-bef4-abbe67d24725","block_type":"box","text":"SPAC conducts an IPO, it has selected a management team but has not yet identified a specific","page_number":182,"box":{"x":116,"y":571,"width":718,"height":12}},{"id":"7aee5e4d-9035-4406-ac5d-7e9e4929c1f3","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":586,"width":728,"height":12}},{"id":"94485f34-055b-44e7-9232-3ec90fe5d003","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":602,"width":756,"height":12}},{"id":"6fa5dc2a-c268-40ee-874e-b7daeed4b72b","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":617,"width":749,"height":12}},{"id":"ab3a4165-029f-4bcc-9a15-b9c98ac8e82e","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":633,"width":761,"height":12}},{"id":"e9e7dc75-09fb-420e-91e5-9dbee5b4a5f3","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":648,"width":725,"height":10}},{"id":"868076f0-0faf-48dd-bada-761f1d17bf71","block_type":"box","text":"check” companies without operating histories or ongoing business operations (other than identifying","page_number":182,"box":{"x":116,"y":664,"width":740,"height":12}},{"id":"9b8c74e0-07af-45f6-a703-f1faf509ff1b","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":679,"width":722,"height":12}},{"id":"a5da3082-a1d9-4dde-9536-a7b40e1bddf0","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":695,"width":746,"height":12}},{"id":"78ed5388-9c43-4ae3-9204-b69ae2168fa4","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":710,"width":760,"height":12}},{"id":"967f06ca-47ac-4421-abff-a007caa7837f","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":726,"width":735,"height":12}},{"id":"18dcce78-455d-4ed0-bfad-2b915fb30dd5","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":741,"width":753,"height":12}},{"id":"a688ca8c-84ce-4b68-8526-e2c4e1ba636b","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":757,"width":762,"height":12}},{"id":"ff0e6fed-e8d3-46db-9ce1-e1235492c19a","block_type":"box","text":"may be considered illiquid and/or subject to restrictions on resale.","page_number":182,"box":{"x":117,"y":772,"width":485,"height":12}},{"id":"7f82302e-ff6a-4c56-b6c6-e757d635b9ce","block_type":"box","text":"Standby Commitment Agreements.","page_number":182,"box":{"x":117,"y":800,"width":278,"height":12}},{"id":"5c27c2db-555b-482b-b30e-be8fc93f9dd7","block_type":"box","text":"Standby commitment agreements commit a Fund, for a stated","page_number":182,"box":{"x":402,"y":800,"width":459,"height":12}},{"id":"37136c13-54ec-494a-b43c-8d9702630382","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":816,"width":746,"height":12}},{"id":"2150b250-c4de-4fbe-9a33-7141c0749e0d","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":831,"width":756,"height":12}},{"id":"70b9bd19-34b8-41cf-b11e-1e20ced29830","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":847,"width":711,"height":12}},{"id":"84b75ec9-9042-4ca9-b5ca-163937e0355d","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":862,"width":762,"height":12}},{"id":"dc17b261-16d4-44fc-b64b-38ef7ad04264","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":878,"width":685,"height":12}},{"id":"70b145bb-3b4b-489b-a3ad-ed844225a1ab","block_type":"box","text":"II-95","page_number":182,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"cae7db4d-200f-4a2b-987d-7903171e4cd7","block_type":"box","text":"NM1026U-6030748-182/260","page_number":182,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"476734c5-6cb5-41dc-bcc7-8f4ef50076c6","block_type":"box","text":"There can be no assurance that the securities subject to a standby commitment will be issued, and the","page_number":183,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"59a61ac1-60be-443a-abec-456ea8ffa72b","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":183,"box":{"x":116,"y":102,"width":764,"height":13}},{"id":"9bcc4e62-fd88-44d3-b006-b96723dad7eb","block_type":"box","text":"the issuance of the security underlying the commitment is at the option of the issuer, the Fund may","page_number":183,"box":{"x":116,"y":118,"width":738,"height":12}},{"id":"6bd086db-ed90-4145-991a-f1033030affc","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":183,"box":{"x":117,"y":134,"width":756,"height":12}},{"id":"2b711c07-79b0-4161-ab91-089c28cde909","block_type":"box","text":"value of the security during the commitment period.","page_number":183,"box":{"x":116,"y":149,"width":386,"height":12}},{"id":"4d0b93e9-3049-4eac-8ead-d8a9288c7a53","block_type":"box","text":"The purchase of a security pursuant to a standby commitment agreement and the related commitment","page_number":183,"box":{"x":116,"y":180,"width":756,"height":12}},{"id":"b402345b-eea2-42b8-80e7-e6e39d9a21fa","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":183,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"91c6fba8-b637-4b0f-840e-c45682bafc00","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":183,"box":{"x":116,"y":211,"width":765,"height":12}},{"id":"b4ba6dea-7d9e-4b76-9c48-aea42256824f","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":183,"box":{"x":116,"y":227,"width":748,"height":12}},{"id":"851491c8-7adb-463d-a328-880cb3af713e","block_type":"box","text":"the commitment fee will be recorded as income on the expiration date of the standby commitment.","page_number":183,"box":{"x":116,"y":242,"width":727,"height":12}},{"id":"4b21019e-c86c-42bf-8d18-ac81a2766b39","block_type":"box","text":"Standby commitments will only be entered into with dealers, banks and broker-dealers which, in the","page_number":183,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"1bb23f48-f254-4054-9f4e-0b0a1e6bf1db","block_type":"box","text":"Manager’s or sub-adviser’s opinion, present minimal credit risks. A Fund will acquire standby","page_number":183,"box":{"x":117,"y":289,"width":693,"height":12}},{"id":"c9842555-601c-40d5-ac4d-f8dea01ff5eb","block_type":"box","text":"commitments solely to facilitate portfolio liquidity and not to exercise its rights thereunder for trading","page_number":183,"box":{"x":116,"y":304,"width":744,"height":12}},{"id":"0c56730d-1dfa-45b2-b281-1301bb44f2bf","block_type":"box","text":"purposes. Standby commitments will be valued at zero in determining NAV. Accordingly, where a Fund","page_number":183,"box":{"x":117,"y":320,"width":769,"height":12}},{"id":"0d4cac5f-b023-4f2b-9eb2-2a94b303d4d4","block_type":"box","text":"pays directly or indirectly for a standby commitment, its cost will be reflected as an unrealized loss for","page_number":183,"box":{"x":117,"y":335,"width":756,"height":12}},{"id":"781e0b6d-f54d-47aa-afa2-da893b05748a","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":183,"box":{"x":116,"y":351,"width":771,"height":12}},{"id":"81f9c576-eef7-4e34-9707-5015f77c76a1","block_type":"box","text":"loss when the commitment is exercised or expires.","page_number":183,"box":{"x":117,"y":366,"width":380,"height":12}},{"id":"ab1d9311-189e-4d05-8c9d-5ea6169f0198","block_type":"box","text":"Stripped Securities.","page_number":183,"box":{"x":117,"y":397,"width":156,"height":12}},{"id":"8b5a1d24-7569-4905-bd96-b205e9a2085e","block_type":"box","text":"Stripped securities are created when the issuer separates the interest and","page_number":183,"box":{"x":274,"y":397,"width":560,"height":12}},{"id":"c887ba43-8a54-4be2-8988-c770e34a737c","block_type":"box","text":"principal components of an instrument and sells them as separate securities. In general, one security is","page_number":183,"box":{"x":117,"y":413,"width":771,"height":12}},{"id":"cc905bb9-d9bd-4c79-ab1e-d5a271fb9cde","block_type":"box","text":"entitled to receive the interest payments on the underlying assets (the interest only or “IO” security)","page_number":183,"box":{"x":116,"y":428,"width":740,"height":12}},{"id":"777b11a2-5a6a-4ad5-b0cc-aa48d4983475","block_type":"box","text":"and the other to receive the principal payments (the principal only or “PO” security). Some stripped","page_number":183,"box":{"x":116,"y":444,"width":737,"height":12}},{"id":"6b64324e-8a2c-4b83-b30e-3dea4411e45b","block_type":"box","text":"securities may receive a combination of interest and principal payments. The yields to maturity on IOs","page_number":183,"box":{"x":116,"y":459,"width":760,"height":12}},{"id":"db8c24d1-0b20-4aff-b68b-f03983e7e264","block_type":"box","text":"and POs are sensitive to the expected or anticipated rate of principal payments (including","page_number":183,"box":{"x":116,"y":475,"width":669,"height":12}},{"id":"ffb7f1c5-9dbc-4a02-a53a-670c8ea1e4ef","block_type":"box","text":"prepayments) on the related underlying assets, and principal payments may have a material effect on","page_number":183,"box":{"x":117,"y":490,"width":758,"height":12}},{"id":"2a26f27c-9c3d-4336-b8e7-0ebdf1be8c5a","block_type":"box","text":"yield to maturity. If the underlying assets experience greater than anticipated prepayments of principal,","page_number":183,"box":{"x":116,"y":506,"width":766,"height":12}},{"id":"01ddd08a-fb35-49cd-b62e-43663ba2fab9","block_type":"box","text":"a Fund may not fully recoup its initial investment in IOs. Conversely, if the underlying assets","page_number":183,"box":{"x":116,"y":521,"width":686,"height":12}},{"id":"0fd5ee4d-8922-4016-82fb-b1794b0b0885","block_type":"box","text":"experience less than anticipated prepayments of principal, the yield on POs could be adversely","page_number":183,"box":{"x":116,"y":537,"width":711,"height":12}},{"id":"5913e013-d15c-4ffe-be90-2fda25fe4ea6","block_type":"box","text":"affected. Stripped securities may be highly sensitive to changes in interest rates and rates of","page_number":183,"box":{"x":116,"y":552,"width":691,"height":12}},{"id":"b689fd4e-df54-4593-b352-f5de40e0785e","block_type":"box","text":"prepayment.","page_number":183,"box":{"x":117,"y":568,"width":97,"height":12}},{"id":"457f360e-c144-4e85-8e44-23fb33617e3f","block_type":"box","text":"Structured Notes.","page_number":183,"box":{"x":117,"y":599,"width":139,"height":9}},{"id":"468d5f9f-2ca5-42c9-8116-075eebd521e1","block_type":"box","text":"Structured notes and other related instruments purchased by a Fund are generally","page_number":183,"box":{"x":257,"y":599,"width":621,"height":12}},{"id":"6c0fa5aa-8d7e-497d-a511-56cc45b60a67","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":614,"width":753,"height":12}},{"id":"31cc44d3-d3e2-46c1-a2ca-787c50f70f00","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":630,"width":751,"height":12}},{"id":"13ced5f0-8640-4bcf-88f4-021ad1018aeb","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":645,"width":760,"height":12}},{"id":"24f48196-f5b3-4d65-aacb-9e247e902849","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":661,"width":748,"height":12}},{"id":"e94d9acb-6ba5-4385-898a-3e45ade4e449","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":676,"width":702,"height":12}},{"id":"400698ac-a805-4924-9d91-e274aeac6e68","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":692,"width":761,"height":12}},{"id":"f04d07a5-816c-4c0e-a867-f5c470067cef","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":707,"width":738,"height":12}},{"id":"ac35ed04-14ef-40a5-843e-66e127690736","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":723,"width":664,"height":12}},{"id":"c0aa2a9e-43a4-432b-aae0-a53c40f5104b","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":754,"width":765,"height":12}},{"id":"112ddf8a-2930-4b6c-b758-ed5f93d4f927","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":769,"width":763,"height":12}},{"id":"701c1d57-1618-481b-8ab7-c88068dcbef4","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":785,"width":735,"height":12}},{"id":"7a3dc094-de6d-4009-96d9-1c3d13b9adfe","block_type":"box","text":"differential performance of reference measures. Application of a multiplier involves leverage that will","page_number":183,"box":{"x":116,"y":800,"width":741,"height":12}},{"id":"89a18ee9-0b9b-4282-8a8e-3cde5c58c80d","block_type":"box","text":"serve to magnify the potential for gain and the risk of loss.","page_number":183,"box":{"x":116,"y":816,"width":429,"height":12}},{"id":"be55d340-0ca6-4b74-bf05-75d581d9d402","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":847,"width":722,"height":12}},{"id":"b8f484b4-35b4-412a-8adb-a7d1f2a34a22","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":862,"width":750,"height":12}},{"id":"51ae6f98-e8a1-4561-8cd8-9e468f3447e4","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":878,"width":770,"height":12}},{"id":"dabad060-5002-41d0-90d9-cc3012c2a07b","block_type":"box","text":"II-96","page_number":183,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"7f57970f-6c95-4196-b28a-8c807aad9774","block_type":"box","text":"NM1026U-6030748-183/260","page_number":183,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6553327f-3477-44e9-9156-2ec28c33e8f2","block_type":"box","text":"for structured notes could be illiquid making them difficult to sell when the Fund determines to sell","page_number":184,"box":{"x":116,"y":87,"width":729,"height":12}},{"id":"0b02e2d9-798c-4a54-96a8-3c440b3794f8","block_type":"box","text":"them. The possible lack of a liquid secondary market for structured notes and the resulting inability of","page_number":184,"box":{"x":116,"y":102,"width":755,"height":13}},{"id":"e1ee9933-ba22-4eb6-b11c-234aa7b8d0a1","block_type":"box","text":"the Fund to sell a structured note could expose the Fund to losses and could make structured notes","page_number":184,"box":{"x":116,"y":118,"width":746,"height":12}},{"id":"2e938e2d-cabf-4b0f-892a-09a49ab7db5c","block_type":"box","text":"more difficult for the Fund to value accurately.","page_number":184,"box":{"x":117,"y":134,"width":344,"height":12}},{"id":"e16953b7-6343-415b-b50b-c30b622d0d23","block_type":"box","text":"Taxability Risk.","page_number":184,"box":{"x":118,"y":161,"width":119,"height":12}},{"id":"33c1201a-343b-408a-9b4a-8caea1296a9f","block_type":"box","text":"Certain of the Funds intend to minimize the payment of taxable income to","page_number":184,"box":{"x":238,"y":161,"width":555,"height":12}},{"id":"a6546107-0547-4809-9b9a-3cd3f160bd2d","block_type":"box","text":"shareholders by investing in tax-exempt or municipal securities in reliance at the time of purchase on","page_number":184,"box":{"x":116,"y":176,"width":753,"height":12}},{"id":"fe810f69-20b0-467c-ac19-e3b38dc86b47","block_type":"box","text":"an opinion of bond counsel to the issuer and, in the case of derivative securities, sponsors’ counsel,","page_number":184,"box":{"x":116,"y":192,"width":745,"height":12}},{"id":"5f9bde74-ebf9-4ef3-a130-c95c0d6d4cb3","block_type":"box","text":"that the interest paid on those securities will be excludable from gross income for U.S. federal income","page_number":184,"box":{"x":116,"y":207,"width":759,"height":12}},{"id":"b1532961-b30e-4888-8aff-f75263887646","block_type":"box","text":"tax purposes. Such securities, however, may be determined to pay, or have paid, taxable income","page_number":184,"box":{"x":116,"y":223,"width":726,"height":12}},{"id":"aec56f9b-a6bc-4ed6-93b3-760b94c0ed70","block_type":"box","text":"subsequent to the Fund’s acquisition of the securities. In that event, the IRS may demand that the","page_number":184,"box":{"x":116,"y":238,"width":731,"height":12}},{"id":"d83b7612-a156-4676-a894-d30b11a964da","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":184,"box":{"x":117,"y":254,"width":758,"height":12}},{"id":"74ff1053-3fbd-4345-8263-097769533b5c","block_type":"box","text":"the Fund’s yield could be adversely affected. In addition, the treatment of dividends previously paid or","page_number":184,"box":{"x":116,"y":269,"width":758,"height":12}},{"id":"ba05d57d-f8ec-48e5-9700-6446de2b6e36","block_type":"box","text":"to be paid by the Fund as “exempt interest dividends” could be adversely affected, subjecting the","page_number":184,"box":{"x":116,"y":285,"width":724,"height":12}},{"id":"6440da48-d10f-4f3a-81d5-aec47b5870fa","block_type":"box","text":"Fund’s shareholders to increased U.S. federal income tax liabilities. If the interest paid on any","page_number":184,"box":{"x":117,"y":300,"width":699,"height":12}},{"id":"6c6d112e-e53c-4de0-a0f6-db1d3a724ac7","block_type":"box","text":"tax-exempt or municipal security held by the Fund is subsequently determined to be taxable, the Fund","page_number":184,"box":{"x":116,"y":316,"width":762,"height":12}},{"id":"cf477800-988e-45ec-94d7-2692396b6ef2","block_type":"box","text":"will dispose of that security as soon as reasonably practicable. In addition, future laws, regulations,","page_number":184,"box":{"x":116,"y":331,"width":738,"height":12}},{"id":"fab91d8f-27bf-4054-a48d-3674be5d26f0","block_type":"box","text":"rulings or court decisions may cause interest on municipal securities to be subject, directly or indirectly,","page_number":184,"box":{"x":117,"y":347,"width":769,"height":12}},{"id":"b466ba03-fc5f-4588-8ab6-c47f8109609c","block_type":"box","text":"to U.S. federal income taxation or interest on state municipal securities to be subject to state or local","page_number":184,"box":{"x":116,"y":362,"width":749,"height":12}},{"id":"08cda28d-5875-47f9-9265-a51f174d4464","block_type":"box","text":"income taxation, or the value of state municipal securities to be subject to state or local intangible","page_number":184,"box":{"x":117,"y":378,"width":726,"height":12}},{"id":"555d3969-2466-45f5-9ea5-18c1eb14669c","block_type":"box","text":"personal property tax, or may otherwise prevent the Fund from realizing the full current benefit of the","page_number":184,"box":{"x":117,"y":393,"width":750,"height":12}},{"id":"d8b6e8dd-974d-4f9f-8da7-1292b72245d3","block_type":"box","text":"tax-exempt status of such securities. Any such change could also affect the market price of such","page_number":184,"box":{"x":116,"y":409,"width":721,"height":12}},{"id":"e6325b83-93cd-45dd-8250-35d7b5e0b647","block_type":"box","text":"securities, and thus the value of an investment in the Fund.","page_number":184,"box":{"x":116,"y":424,"width":444,"height":11}},{"id":"c6bc5f6b-19c8-421c-8f70-2b09f15d385f","block_type":"box","text":"Temporary Defensive Measures.","page_number":184,"box":{"x":118,"y":451,"width":255,"height":12}},{"id":"f87e39da-8a3b-476e-8598-1995da24d75f","block_type":"box","text":"As a temporary defensive measure, including to respond to adverse","page_number":184,"box":{"x":374,"y":451,"width":514,"height":12}},{"id":"76f7c374-3549-4d5b-a7eb-398c0f9be554","block_type":"box","text":"market, economic, political or other conditions, a Fund may depart from its principal investment","page_number":184,"box":{"x":117,"y":467,"width":709,"height":12}},{"id":"5ba699a1-5dcb-4ebb-811c-9b26436c71c7","block_type":"box","text":"strategies and may invest without limitation in cash, high quality money market instruments, or other","page_number":184,"box":{"x":116,"y":482,"width":747,"height":12}},{"id":"d56d6c2f-8699-42d5-b13c-5b1ff2a5dfb0","block_type":"box","text":"short term investments. Certain Funds may also invest in cash and other such instruments pending","page_number":184,"box":{"x":116,"y":498,"width":741,"height":12}},{"id":"809e71fd-d350-4c1c-8753-f48805d37bdb","block_type":"box","text":"investment or to meet anticipated redemption requests. High quality money market instruments include","page_number":184,"box":{"x":117,"y":514,"width":768,"height":11}},{"id":"c1409e75-822d-4744-be2f-f8aaff78c8c5","block_type":"box","text":"U.S. Government obligations, U.S. Government agency obligations, dollar denominated obligations of","page_number":184,"box":{"x":117,"y":529,"width":758,"height":12}},{"id":"62efa863-78ec-4b74-9940-c4f252a38c30","block_type":"box","text":"foreign issuers, bank obligations, including U.S. subsidiaries and branches of foreign banks, corporate","page_number":184,"box":{"x":116,"y":544,"width":763,"height":12}},{"id":"1b9560f4-0ca0-4f90-8874-d8434653531e","block_type":"box","text":"obligations, commercial paper, repurchase agreements and obligations of supranational organizations.","page_number":184,"box":{"x":116,"y":560,"width":767,"height":12}},{"id":"c3184849-54f8-425d-b864-aab5fb19b49a","block_type":"box","text":"Generally, such obligations will mature within one year from the date of settlement but may mature","page_number":184,"box":{"x":117,"y":575,"width":735,"height":12}},{"id":"d1851e51-83be-42d9-a7ac-b8a5216b3ce9","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":591,"width":727,"height":12}},{"id":"7a9e31ac-5b92-40ee-8793-3e79d6fff87c","block_type":"box","text":"ability to achieve its investment objective.","page_number":184,"box":{"x":116,"y":607,"width":312,"height":11}},{"id":"d6030afa-85f2-4c20-a34e-88e4212a85df","block_type":"box","text":"U.S. Government Obligations.","page_number":184,"box":{"x":117,"y":634,"width":236,"height":12}},{"id":"e6ce560c-9494-4367-8bb6-3c3bddd2fb77","block_type":"box","text":"A Fund may purchase obligations issued or guaranteed by the U.S.","page_number":184,"box":{"x":354,"y":634,"width":510,"height":12}},{"id":"57a57b25-be02-4b08-b26e-dcbd972ade8a","block_type":"box","text":"Government and U.S. Government agencies and instrumentalities. Obligations of certain agencies and","page_number":184,"box":{"x":117,"y":649,"width":767,"height":12}},{"id":"146c39dc-5a05-485e-aa6d-3df6eecfbd0c","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":665,"width":761,"height":12}},{"id":"febd6e37-9bb8-4d1d-b8c6-80528c7acb9e","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":680,"width":740,"height":12}},{"id":"c1502268-de77-4502-9606-abbd0555adf9","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":696,"width":751,"height":12}},{"id":"79fdf905-6f04-41d4-b2e2-47360be28741","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":711,"width":710,"height":12}},{"id":"2fcb4592-3e07-4156-803b-2c1a41c5e2cd","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":727,"width":757,"height":12}},{"id":"02fecae6-b8e9-412c-9062-a11eeb33b88a","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":742,"width":728,"height":12}},{"id":"023cefef-fc49-4771-9d0f-21cffb9b2d44","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":758,"width":734,"height":12}},{"id":"d85c5520-2375-42ec-975a-39502f547031","block_type":"box","text":"other stripped securities, represent beneficial ownership interests in either future interest payments or","page_number":184,"box":{"x":116,"y":773,"width":754,"height":12}},{"id":"bf56229b-ee09-4e93-bc13-71fed0f8ecce","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":789,"width":721,"height":12}},{"id":"ad2ddb59-fb70-42d2-9232-3ca92ce0643b","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":804,"width":758,"height":12}},{"id":"fd1b80b8-1133-40c4-af01-fb52a5752799","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":820,"width":708,"height":12}},{"id":"fd72ff33-f00f-4a8c-a484-fc34d78392a6","block_type":"box","text":"principal and interest are returned to investors.","page_number":184,"box":{"x":117,"y":835,"width":351,"height":12}},{"id":"e7ea0324-76c6-4b09-b303-95dc3e26da29","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":862,"width":734,"height":12}},{"id":"e6dbbbf6-2e19-491d-9874-3b1ad80b2d87","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":878,"width":708,"height":12}},{"id":"72caee10-edf1-41d5-b4ce-eb29395326b4","block_type":"box","text":"II-97","page_number":184,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"e1820d45-9cca-4bcd-b41e-c134bdac2eab","block_type":"box","text":"NM1026U-6030748-184/260","page_number":184,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"414c5521-bbda-4c2e-8fa7-91e766eb4110","block_type":"box","text":"Administration, Farmers Home Administration, Export-Import Bank of the United States, Small","page_number":185,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"e215eb23-399f-44d6-9043-1de5c8dc0af7","block_type":"box","text":"Business Administration, Ginnie Mae, Fannie Mae, Federal Financing Bank, General Services","page_number":185,"box":{"x":117,"y":102,"width":702,"height":13}},{"id":"3a2e18d3-87e3-41a2-ba3f-772e6b39b47a","block_type":"box","text":"Administration, Student Loan Marketing Association, Central Bank for Cooperatives, Federal Home","page_number":185,"box":{"x":116,"y":118,"width":741,"height":12}},{"id":"562c3f79-f161-4735-97f1-425e3bc202ba","block_type":"box","text":"Loan Banks, Freddie Mac, Federal Intermediate Credit Banks, Federal Land Banks, Farm Credit Banks","page_number":185,"box":{"x":117,"y":134,"width":771,"height":11}},{"id":"6e80ee10-3d16-4a34-bcfd-76af2d47d41d","block_type":"box","text":"System, Maritime Administration, Tennessee Valley Authority and Washington D.C. Armory Board. The","page_number":185,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"03af1f73-0b96-42fb-b6af-7dd13c229738","block_type":"box","text":"Funds may also invest in mortgage-related securities issued or guaranteed by U.S. Government","page_number":185,"box":{"x":117,"y":165,"width":717,"height":12}},{"id":"e37ff01e-4ba8-4bb8-966d-5abab84a06b9","block_type":"box","text":"agencies and instrumentalities, including such instruments as obligations of Ginnie Mae, Fannie Mae","page_number":185,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"48ea4ae1-1467-4a98-8689-33e7cfff0149","block_type":"box","text":"and Freddie Mac.","page_number":185,"box":{"x":116,"y":196,"width":135,"height":9}},{"id":"214de8b1-22c0-49e1-a316-c0befd92881c","block_type":"box","text":"U.S. Treasury Obligations.","page_number":185,"box":{"x":117,"y":227,"width":194,"height":12}},{"id":"c00ea680-9422-48d8-934d-35d119f18f4c","block_type":"box","text":"Treasury obligations may differ in their interest rates, maturities, times of","page_number":185,"box":{"x":313,"y":227,"width":548,"height":12}},{"id":"b52dff82-cf80-4126-893a-4f410ac04d41","block_type":"box","text":"issuance and other characteristics. Obligations of U.S. Government agencies and authorities are","page_number":185,"box":{"x":117,"y":242,"width":721,"height":12}},{"id":"cd40046f-deab-46b8-b225-418de6085fef","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":185,"box":{"x":116,"y":258,"width":747,"height":12}},{"id":"4691b20b-dce0-4260-92d1-51390bc05fb6","block_type":"box","text":"U.S. Government. No assurance can be given that the U.S. Government will provide financial support","page_number":185,"box":{"x":117,"y":273,"width":758,"height":12}},{"id":"b30dded5-612e-45e2-996a-770496ccebf7","block_type":"box","text":"to its agencies and authorities if it is not obligated by law to do so.","page_number":185,"box":{"x":116,"y":289,"width":493,"height":12}},{"id":"07d7956e-62ad-4e2f-a9d5-5abd6a5551cd","block_type":"box","text":"U.S. Treasury Rolls.","page_number":185,"box":{"x":117,"y":320,"width":153,"height":12}},{"id":"ba65de12-0f32-47c9-8b63-99f8e1a5e909","block_type":"box","text":"Certain Funds may invest in U.S. Treasury","page_number":185,"box":{"x":271,"y":320,"width":320,"height":12}},{"id":"a5adb953-9775-4467-b861-917bf4b94509","block_type":"box","text":"rolls. In a U.S. Treasury roll transaction,","page_number":185,"box":{"x":592,"y":320,"width":292,"height":12}},{"id":"e02783df-c228-4236-9dd8-7f59088dea21","block_type":"box","text":"the Fund sells a treasury security to a counterpa","page_number":185,"box":{"x":116,"y":335,"width":350,"height":12}},{"id":"ea3a19c9-50f1-42ca-8de6-5ba67b1ab7f5","block_type":"box","text":"rty with a simultaneous agreement to repurchase the","page_number":185,"box":{"x":468,"y":335,"width":387,"height":12}},{"id":"7f07631b-1545-4887-bfd2-3fab0ee13012","block_type":"box","text":"same security at an agreed upon price and future settl","page_number":185,"box":{"x":116,"y":351,"width":392,"height":12}},{"id":"a468222a-971c-4c81-b36c-8f70a4b821bd","block_type":"box","text":"ement date. U.S. Treasury roll transactions may","page_number":185,"box":{"x":510,"y":351,"width":353,"height":12}},{"id":"bfa6f23b-7882-4def-a460-2c2fa4484b59","block_type":"box","text":"incrementally adjust the average maturity of a Fund’","page_number":185,"box":{"x":117,"y":366,"width":376,"height":12}},{"id":"caf89d18-b34b-452f-856e-6274655eb310","block_type":"box","text":"s portfolio and increase the interest yield on the","page_number":185,"box":{"x":494,"y":366,"width":348,"height":12}},{"id":"ceba2e95-60dd-4647-a878-d5bdd9e85613","block_type":"box","text":"Fund’s portfolio by extending the average maturity of the portfolio in a normal yield curve environment.","page_number":185,"box":{"x":117,"y":382,"width":746,"height":12}},{"id":"346c4a7e-7bb1-458d-848c-62d7ec3381ac","block_type":"box","text":"During the period before the settlement","page_number":185,"box":{"x":117,"y":397,"width":284,"height":12}},{"id":"0c4bedbe-33b5-4859-a793-cec4d08b536b","block_type":"box","text":"date of a U.S. Treasury roll, a","page_number":185,"box":{"x":401,"y":397,"width":224,"height":12}},{"id":"ce312dec-189f-4629-9677-38b3df62079d","block_type":"box","text":"Fund continues to earn interest on","page_number":185,"box":{"x":626,"y":397,"width":254,"height":10}},{"id":"37dd5621-6da5-497c-800d-7e1caa6bf29b","block_type":"box","text":"the securities it is selling; however, it does not earn in","page_number":185,"box":{"x":116,"y":413,"width":387,"height":12}},{"id":"94bea8e1-e65f-479a-a019-4aa9098458e1","block_type":"box","text":"terest on the securities it is purchasing until after the","page_number":185,"box":{"x":504,"y":413,"width":383,"height":12}},{"id":"9fbfb4bf-424d-43e1-969b-d1ff6a0df50a","block_type":"box","text":"settlement date. A Fund could suffer an opportunity loss","page_number":185,"box":{"x":116,"y":428,"width":412,"height":12}},{"id":"84241868-fab8-4827-b863-27827e45c27f","block_type":"box","text":"if the counterparty to the U.S. Treasury roll","page_number":185,"box":{"x":528,"y":428,"width":314,"height":12}},{"id":"6df3c6e5-63f2-4a13-bc69-1ee0d0cfdbc4","block_type":"box","text":"transaction failed to perform its obligations on the settlement date.","page_number":185,"box":{"x":116,"y":444,"width":484,"height":12}},{"id":"4ff4ef57-4b94-456d-97b6-6e6b5dd6c0aa","block_type":"box","text":"The market value of the securities that a Fund is required to purchase may decline below the agreed","page_number":185,"box":{"x":116,"y":475,"width":751,"height":12}},{"id":"b2ebb24a-9159-4edb-b1c1-6cdb337df752","block_type":"box","text":"upon purchase price of those securities. U.S. Treasury rolls are speculative techniques that can be","page_number":185,"box":{"x":117,"y":490,"width":737,"height":12}},{"id":"318dc8df-35c9-4e74-825b-838006bdbf0a","block_type":"box","text":"deemed to involve leverage. There is no assurance that U.S. Treasury rolls can be successfully","page_number":185,"box":{"x":116,"y":506,"width":714,"height":12}},{"id":"768e6637-e21c-47e8-a9a6-a768b28984aa","block_type":"box","text":"employed.","page_number":185,"box":{"x":116,"y":521,"width":82,"height":12}},{"id":"3270714d-49b9-46b7-aca9-79afb0c47aa6","block_type":"box","text":"Utility Industries.","page_number":185,"box":{"x":117,"y":552,"width":140,"height":12}},{"id":"2b48deed-6b2d-485d-8a60-73b6b222bb6d","block_type":"box","text":"Risks that are intrinsic to the utility industries include difficulty in obtaining an","page_number":185,"box":{"x":259,"y":552,"width":572,"height":12}},{"id":"4ef12dd8-746a-4975-9a17-3e07d53c53b3","block_type":"box","text":"adequate return on invested capital, difficulty in financing large construction programs during an","page_number":185,"box":{"x":116,"y":568,"width":715,"height":12}},{"id":"6e3c1188-c927-4830-9ab1-6c6903dc6923","block_type":"box","text":"inflationary period, restrictions on operations and increased cost and delays attributable to","page_number":185,"box":{"x":117,"y":583,"width":672,"height":12}},{"id":"6af8fdaa-0f46-4f45-b35a-838f36697b2f","block_type":"box","text":"environmental considerations and regulation, difficulty in raising capital in adequate amounts on","page_number":185,"box":{"x":116,"y":599,"width":715,"height":12}},{"id":"0c1c4d9b-408f-4c74-93b5-6d757dcb9ae2","block_type":"box","text":"reasonable terms in periods of high inflation and unsettled capital markets, technological innovations","page_number":185,"box":{"x":117,"y":614,"width":750,"height":12}},{"id":"d0145e5d-324c-40d9-ae18-3ac53bf91899","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":630,"width":729,"height":12}},{"id":"8460f790-a707-4c65-96a5-a779a60e711d","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":645,"width":721,"height":12}},{"id":"1c56fe2d-643b-4638-9a86-0df7b218acb9","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":661,"width":731,"height":12}},{"id":"938b6868-bbde-48da-9cbe-e1d9827dccd1","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":676,"width":753,"height":12}},{"id":"7e4876b0-2c97-4cb9-bc3b-b3bf506bcf6a","block_type":"box","text":"associated with the design, construction, licensing, regulation and operation of nuclear facilities for","page_number":185,"box":{"x":116,"y":692,"width":730,"height":12}},{"id":"6218ccde-61f7-42a4-8738-1c927c79aebb","block_type":"box","text":"electric generation, including, among other considerations, the problems associated with the use of","page_number":185,"box":{"x":116,"y":707,"width":736,"height":12}},{"id":"5ed74870-0316-490c-9649-908416a21770","block_type":"box","text":"radioactive materials and the disposal of radioactive wastes. There are substantial differences among","page_number":185,"box":{"x":117,"y":723,"width":752,"height":12}},{"id":"cb262b4e-aafc-4d2b-acfe-e0445071fa83","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":738,"width":727,"height":12}},{"id":"921755b3-eea5-4894-92e4-e11e6bbfa342","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":754,"width":746,"height":12}},{"id":"92fb61b3-1195-46c3-82cf-c5260a19fbca","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":769,"width":712,"height":12}},{"id":"a009ae6e-4fd6-456b-8c67-a87b88ebaaab","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":785,"width":730,"height":12}},{"id":"73d18506-6558-451c-9b31-27173ce0f8ee","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":800,"width":765,"height":12}},{"id":"d24d582e-f14b-4733-b426-799d26619ba6","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":816,"width":714,"height":12}},{"id":"359b37b6-19ba-46dc-98f1-495e4f99f9f2","block_type":"box","text":"Governmental authorities may from time to time review existing policies and impose additional","page_number":185,"box":{"x":117,"y":831,"width":702,"height":12}},{"id":"4bfd6e59-fd58-4d20-9c7c-1cdfe17a7cd7","block_type":"box","text":"requirements governing the licensing, construction and operation of nuclear power plants. Prolonged","page_number":185,"box":{"x":117,"y":847,"width":751,"height":12}},{"id":"bfdd157e-91c4-482f-bad1-2afdad27e5a5","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":862,"width":746,"height":12}},{"id":"33113bd3-da83-4e51-a5b9-d5f9a89be3b6","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":878,"width":675,"height":12}},{"id":"570b51b5-14bf-40f9-9e9a-baf1fe7d7f6a","block_type":"box","text":"II-98","page_number":185,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"fb296138-0c63-45a2-a496-59f630fa01de","block_type":"box","text":"NM1026U-6030748-185/260","page_number":185,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6a205928-1486-4b63-b9a5-2d940ee5544e","block_type":"box","text":"Companies in the utilities sector may be adversely affected by changes in exchange rates, domestic","page_number":186,"box":{"x":117,"y":87,"width":747,"height":12}},{"id":"e7ce65da-d166-4655-ab80-d4262685fa24","block_type":"box","text":"and international competition, and governmental limitations on rates charged to customers. The value","page_number":186,"box":{"x":116,"y":103,"width":759,"height":12}},{"id":"02e47f3d-4c5c-4e1e-a862-fdadbd84bcd2","block_type":"box","text":"of regulated utility debt securities and, to a lesser extent, equity securities, tends to have an inverse","page_number":186,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"1c6fbe8c-1817-4b14-886f-426978316be2","block_type":"box","text":"relationship to the movement of interest rates and therefore may lead to volatility in performance.","page_number":186,"box":{"x":117,"y":134,"width":723,"height":12}},{"id":"c284046d-5394-4e7d-84e6-499405f063e9","block_type":"box","text":"Utility companies in the United States and in foreign countries are generally subject to regulation. In the","page_number":186,"box":{"x":117,"y":165,"width":771,"height":12}},{"id":"27b59e82-bffb-486e-8560-945fced0393a","block_type":"box","text":"United States, most utility companies are regulated by state and/or federal authorities. Such regulation","page_number":186,"box":{"x":117,"y":180,"width":764,"height":12}},{"id":"04c7071a-83a8-4b9f-9ac2-49d2ab96930f","block_type":"box","text":"is intended to ensure appropriate standards of service and adequate capacity to meet public demand.","page_number":186,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"193eca9b-3021-4d13-aa00-53a91d3c00af","block_type":"box","text":"Generally, prices are also regulated in the United States and in foreign countries with the intention of","page_number":186,"box":{"x":117,"y":211,"width":750,"height":12}},{"id":"d9184255-74ec-4f69-a6fc-21781e44478a","block_type":"box","text":"protecting the public while ensuring that the rate of return earned by utility companies is sufficient to","page_number":186,"box":{"x":117,"y":227,"width":744,"height":12}},{"id":"cbf6d17c-b824-4cb0-9c13-cb13fef8985d","block_type":"box","text":"allow them to attract capital in order to grow and continue to provide appropriate services. There can","page_number":186,"box":{"x":116,"y":242,"width":751,"height":12}},{"id":"769314af-31b7-445f-9872-d708d4a2db5c","block_type":"box","text":"be no assurance that such pricing policies or rates of return will continue in the future.","page_number":186,"box":{"x":117,"y":258,"width":640,"height":12}},{"id":"0b3d1e2c-30d7-427d-ab12-af4419a147f1","block_type":"box","text":"The nature of regulation of the utility industries continues to evolve both in the United States and in","page_number":186,"box":{"x":116,"y":289,"width":738,"height":12}},{"id":"b6c7872f-ec32-4355-9a26-3e8ad78ee03f","block_type":"box","text":"foreign countries. In recent years, changes in regulation in the United States increasingly have allowed","page_number":186,"box":{"x":116,"y":304,"width":767,"height":12}},{"id":"99996d58-5e81-4333-83dc-5448a92dd8fc","block_type":"box","text":"utility companies to provide services and products outside their traditional geographic areas and lines","page_number":186,"box":{"x":117,"y":320,"width":755,"height":12}},{"id":"3315fa17-067b-4d03-803d-1cd6c27cc520","block_type":"box","text":"of business, creating new areas of competition within the industries. In some instances, utility","page_number":186,"box":{"x":116,"y":335,"width":696,"height":12}},{"id":"b9575f1a-b138-4264-a530-bf9fc4441405","block_type":"box","text":"companies are operating on an unregulated basis. Because of trends toward deregulation and the","page_number":186,"box":{"x":116,"y":351,"width":732,"height":12}},{"id":"1fcf2d3b-7bb0-4e7b-9703-954d554b986a","block_type":"box","text":"evolution of independent power producers as well as new entrants to the field of telecommunications,","page_number":186,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"b1526e2a-bd7a-4f97-93ff-a61f54250f37","block_type":"box","text":"non-regulated providers of utility services have become a significant part of their respective industries.","page_number":186,"box":{"x":117,"y":382,"width":761,"height":12}},{"id":"267c05e2-2a9c-4e4b-84ea-ea5b878f0189","block_type":"box","text":"The Manager believes that the emergence of competition and deregulation will result in certain utility","page_number":186,"box":{"x":116,"y":397,"width":750,"height":12}},{"id":"5f481067-d913-4606-8211-5b888b5a00c9","block_type":"box","text":"companies being able to earn more than their traditional regulated rates of return, while others may be","page_number":186,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"a0014171-e54c-40b2-b922-bb5ec74eb0cc","block_type":"box","text":"forced to defend their core business from increased competition and may be less profitable. Reduced","page_number":186,"box":{"x":116,"y":428,"width":757,"height":12}},{"id":"b245805f-e58e-4339-9c38-3acb24146317","block_type":"box","text":"profitability, as well as new uses of funds (such as for expansion, operations or stock buybacks) could","page_number":186,"box":{"x":117,"y":444,"width":759,"height":12}},{"id":"d8f9b40a-cbe7-40f9-a57a-527d56ec8570","block_type":"box","text":"result in cuts in dividend payout rates. As deregulation allows utility companies to diversify outside of","page_number":186,"box":{"x":117,"y":459,"width":750,"height":12}},{"id":"73ab2d0b-f38a-4c83-be7e-a0ada6ca0769","block_type":"box","text":"their original geographic regions and their traditional lines of business, utilities companies may engage","page_number":186,"box":{"x":116,"y":475,"width":765,"height":12}},{"id":"9c6f405e-40e7-42ce-8ea6-8cfac47a1215","block_type":"box","text":"in riskier ventures. Therefore, deregulation may eliminate restrictions on the maximum level of profits of","page_number":186,"box":{"x":117,"y":490,"width":771,"height":12}},{"id":"b88fe258-6b2c-4090-b060-756856a4d3c5","block_type":"box","text":"certain utility companies, but may also subject these companies to greater risk of loss. The Manager","page_number":186,"box":{"x":116,"y":506,"width":749,"height":12}},{"id":"8b8b0a4b-f1f1-4d08-ab93-81ed6e3e9fe2","block_type":"box","text":"seeks to take advantage of favorable investment opportunities that may arise from these structural","page_number":186,"box":{"x":116,"y":521,"width":735,"height":12}},{"id":"f83414c7-1e0d-4994-be33-2318b5034bbb","block_type":"box","text":"changes. Of course, there can be no assurance that favorable developments will occur in the future.","page_number":186,"box":{"x":116,"y":537,"width":747,"height":12}},{"id":"fdb7c64a-5193-4805-a112-a5b2115d1ccf","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":568,"width":755,"height":12}},{"id":"596f6316-ef40-4b52-b3db-6703a1d465a4","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":583,"width":761,"height":12}},{"id":"fd7a81f4-628d-45d7-adf9-a7885ea00128","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":599,"width":755,"height":12}},{"id":"e4c7b999-f6dd-40a0-9bd1-72b58a268efb","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":614,"width":733,"height":12}},{"id":"26068cb3-e315-413d-9c8c-7601311edd82","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":630,"width":731,"height":12}},{"id":"c7742cb1-ddc8-4515-b086-526e34fa0491","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":645,"width":733,"height":12}},{"id":"063ceb0d-837d-4d32-a7dc-d1e1e4f72a25","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":661,"width":765,"height":12}},{"id":"4b9b4cbc-f043-4174-8fb3-29323e7d7b0f","block_type":"box","text":"United States.","page_number":186,"box":{"x":117,"y":676,"width":103,"height":10}},{"id":"e0856dfa-c5a5-49b9-81eb-3da1bf11fb19","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":707,"width":764,"height":12}},{"id":"ff816adb-74ee-49ce-bc7c-fdbeca6f6b1c","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":723,"width":712,"height":12}},{"id":"80c26a07-3086-4d09-b46d-0169f6f4529f","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":738,"width":762,"height":12}},{"id":"cb92d1d1-6e60-4978-844e-7062bb6b9c20","block_type":"box","text":"currently are government-owned, thereby limiting current investment opportunities for a Fund, the","page_number":186,"box":{"x":116,"y":754,"width":715,"height":12}},{"id":"eb33900f-1d8d-43cd-9e11-e0bdfaf4f691","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":769,"width":757,"height":12}},{"id":"5d92bf61-fbe9-476e-8a75-9259d6f184e5","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":785,"width":757,"height":12}},{"id":"0afd22ed-3b02-4a70-98f7-baac4971f43d","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":800,"width":739,"height":12}},{"id":"b33b33de-0556-4d1c-8af3-11ddac0e3cb3","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":816,"width":757,"height":12}},{"id":"66ffbf76-0c88-45a1-8cee-e189a11dbcec","block_type":"box","text":"favorable developments will occur or that investment opportunities in foreign markets will increase.","page_number":186,"box":{"x":116,"y":831,"width":728,"height":12}},{"id":"23d89b76-b9ca-42d9-b95d-588520279e4f","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":862,"width":732,"height":12}},{"id":"ff502381-89a4-4c70-a68d-90466da3b1b6","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":878,"width":747,"height":12}},{"id":"4bf82fb6-e6ba-43e2-bc4c-d0cf7c0cf7df","block_type":"box","text":"II-99","page_number":186,"box":{"x":484,"y":909,"width":32,"height":9}},{"id":"1990c878-4799-4389-a7a6-1f79fbae864a","block_type":"box","text":"NM1026U-6030748-186/260","page_number":186,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5d15f328-dcbb-44c3-b471-aaa2b20759e3","block_type":"box","text":"anticipated economic growth rates and other economic developments when selecting securities of","page_number":187,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"14f82d9e-bdd2-4f31-b2b1-5f2feea7a1ba","block_type":"box","text":"utility companies.","page_number":187,"box":{"x":117,"y":103,"width":132,"height":12}},{"id":"ca5e5fab-ca77-4af3-bdf5-bb064c2d8793","block_type":"box","text":"Electric.","page_number":187,"box":{"x":116,"y":134,"width":58,"height":9}},{"id":"1de8b211-9f58-4bbc-a40d-1979db76e89e","block_type":"box","text":"The electric utility industry consists of companies that are engaged principally in the","page_number":187,"box":{"x":176,"y":134,"width":630,"height":12}},{"id":"6cb7141b-1336-484e-b925-c6354cbd5cf0","block_type":"box","text":"generation, transmission and sale of electric energy, although many also provide other energy-related","page_number":187,"box":{"x":116,"y":149,"width":760,"height":12}},{"id":"b2ba9a97-c704-413c-8af5-340f45ccb86b","block_type":"box","text":"services. In the past, electric utility companies, in general, have been favorably affected by lower fuel","page_number":187,"box":{"x":116,"y":165,"width":754,"height":12}},{"id":"fe4d0fa6-a285-490c-ab73-46797dd15a38","block_type":"box","text":"and financing costs and the full or near completion of major construction programs. In addition, many","page_number":187,"box":{"x":116,"y":180,"width":754,"height":12}},{"id":"1e08b224-8192-4ddb-9d7a-87489774aa8e","block_type":"box","text":"of these companies have generated cash flows in excess of current operating expenses and","page_number":187,"box":{"x":116,"y":196,"width":690,"height":12}},{"id":"680f332e-fc19-48a1-b5e4-d5f7789bbb43","block_type":"box","text":"construction expenditures, permitting some degree of diversification into unregulated businesses.","page_number":187,"box":{"x":116,"y":211,"width":727,"height":12}},{"id":"93f6fa74-d56a-46d8-895b-17bf974ccaa5","block_type":"box","text":"Some electric utilities have also taken advantage of the right to sell power outside of their traditional","page_number":187,"box":{"x":116,"y":227,"width":744,"height":12}},{"id":"f8aef2c6-ff72-4c0c-9bb1-4b789a03b78f","block_type":"box","text":"geographic areas. Electric utility companies have historically been subject to the risks associated with","page_number":187,"box":{"x":116,"y":242,"width":758,"height":12}},{"id":"7d2b630f-a554-4988-82e7-b0005af4f000","block_type":"box","text":"increases in fuel and other operating costs, high interest costs on borrowings needed for capital","page_number":187,"box":{"x":117,"y":258,"width":714,"height":12}},{"id":"241c74d0-8e91-42e6-8917-a36d1f2b2180","block_type":"box","text":"construction programs, costs associated with compliance with environmental and safety regulations","page_number":187,"box":{"x":116,"y":273,"width":744,"height":12}},{"id":"724e1121-d806-4f55-a2d2-a0ea1167e0a7","block_type":"box","text":"and changes in the regulatory climate. As interest rates declined, many utilities refinanced high cost","page_number":187,"box":{"x":116,"y":289,"width":744,"height":12}},{"id":"eb08aee1-a87f-421f-86b4-8b3487feca14","block_type":"box","text":"debt and in doing so improved their fixed charges coverage. Regulators, however, lowered allowed","page_number":187,"box":{"x":116,"y":304,"width":740,"height":12}},{"id":"978a26d0-e80b-4d4d-8da2-52f234ac277e","block_type":"box","text":"rates of return as interest rates declined and thereby caused the benefits of the rate declines to be","page_number":187,"box":{"x":117,"y":320,"width":734,"height":12}},{"id":"f0d093df-dd62-41b7-b59c-52206d09a28f","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":187,"box":{"x":116,"y":335,"width":754,"height":12}},{"id":"4f934c40-2bfc-4e28-8359-d0294ff355c6","block_type":"box","text":"may not keep pace with the utilities’ increased costs. The construction and operation of nuclear power","page_number":187,"box":{"x":117,"y":351,"width":760,"height":12}},{"id":"d6333fe8-90c4-4cf6-a93c-c51e1a4ae52d","block_type":"box","text":"facilities are subject to strict scrutiny by, and evolving regulations of, the Nuclear Regulatory","page_number":187,"box":{"x":116,"y":366,"width":686,"height":12}},{"id":"1ae733b8-3c19-4dbb-9e84-534a8edde5de","block_type":"box","text":"Commission and state agencies which have comparable jurisdiction. Strict scrutiny might result in","page_number":187,"box":{"x":117,"y":382,"width":727,"height":12}},{"id":"b83727d6-767b-473c-bbfe-a14dddb37b59","block_type":"box","text":"higher operating costs and higher capital expenditures, with the risk that the regulators may disallow","page_number":187,"box":{"x":117,"y":397,"width":747,"height":12}},{"id":"94880317-601b-4301-a566-1eeaed3e4a07","block_type":"box","text":"inclusion of these costs in rate authorizations or the risk that a company may not be permitted to","page_number":187,"box":{"x":117,"y":413,"width":719,"height":12}},{"id":"e21b9bb0-dcc7-4157-9b3c-92757650c6df","block_type":"box","text":"operate or complete construction of a facility. In addition, operators of nuclear power plants may be","page_number":187,"box":{"x":116,"y":428,"width":740,"height":12}},{"id":"afd52e18-92aa-42fb-80ce-1b1781e9b4c6","block_type":"box","text":"subject to significant costs for disposal of nuclear fuel and for decommissioning such plants.","page_number":187,"box":{"x":116,"y":444,"width":687,"height":12}},{"id":"973c7b89-b41d-4f8e-9257-4b25302559df","block_type":"box","text":"The rating agencies look closely at the business profile of utilities. Ratings for companies are expected","page_number":187,"box":{"x":116,"y":475,"width":766,"height":12}},{"id":"25722e39-da3c-4099-a777-c6894b0885a5","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":187,"box":{"x":116,"y":490,"width":711,"height":12}},{"id":"b739d0eb-ae0a-4f49-bcfb-35bdc1f1c6ce","block_type":"box","text":"companies that focus more on the generation of electricity may be assigned less favorable ratings as","page_number":187,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"52823108-0b7a-42b0-a385-89fe6ee126de","block_type":"box","text":"this business is expected to be competitive and the least regulated. On the other hand, companies that","page_number":187,"box":{"x":116,"y":521,"width":768,"height":12}},{"id":"c2bc1185-32a9-427c-b007-e3a7b1bd12f6","block_type":"box","text":"focus on transmission and distribution, which is expected to be the least competitive and the more","page_number":187,"box":{"x":116,"y":537,"width":732,"height":12}},{"id":"759ae031-5dcf-4a1c-885f-e4137c376280","block_type":"box","text":"regulated part of the business, may see higher ratings given the greater predictability of cash flow.","page_number":187,"box":{"x":117,"y":552,"width":732,"height":12}},{"id":"e7c9c2f0-fe84-44d3-8e7b-41c74a72b12f","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":583,"width":715,"height":12}},{"id":"453a067b-3337-4a01-98ab-f8e30aa4eef3","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":599,"width":746,"height":12}},{"id":"ec9b91d4-d0e9-4302-a863-490009ed030a","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":614,"width":734,"height":12}},{"id":"3fb83adb-fd97-42ec-a810-45bb5401cffe","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":630,"width":752,"height":12}},{"id":"fd96791f-014e-4858-9250-8b9c3da3102f","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":645,"width":739,"height":12}},{"id":"1567c9ab-2222-4bf9-b513-34d31fed0d23","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":661,"width":711,"height":12}},{"id":"ae07f895-db60-4e20-8984-ab2c88593ed2","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":676,"width":759,"height":12}},{"id":"4a32cc99-6e92-44ae-a063-69027084e03a","block_type":"box","text":"deregulated environment. In some instances, such acquisitions have involved significant borrowings,","page_number":187,"box":{"x":116,"y":692,"width":746,"height":12}},{"id":"dfd94cf2-6f5b-40f7-9b83-ecb87f2b31f7","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":707,"width":737,"height":12}},{"id":"f788abba-3284-43d2-9b9e-f9f0cdb42b78","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":723,"width":731,"height":12}},{"id":"51e7d969-545f-4023-a16c-18b3c20ed248","block_type":"box","text":"utilities industry.","page_number":187,"box":{"x":117,"y":738,"width":117,"height":12}},{"id":"a674ceec-1628-4a03-8e98-098d1d4ee6ee","block_type":"box","text":"Telecommunications.","page_number":187,"box":{"x":118,"y":769,"width":155,"height":10}},{"id":"c840f2a8-cf2d-4853-bba1-c2f81e5a73cf","block_type":"box","text":"The telecommunications industry today includes both traditional telephone","page_number":187,"box":{"x":280,"y":769,"width":551,"height":12}},{"id":"7a9c03f8-0fde-4113-89ab-f862401ea9c5","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":785,"width":712,"height":12}},{"id":"3c809e6f-f468-4820-9454-23e77d824ad1","block_type":"box","text":"companies, which began as small, lightly regulated businesses focused on limited markets. Today","page_number":187,"box":{"x":116,"y":800,"width":728,"height":12}},{"id":"3c9da1f7-1b72-40d5-b931-5964e1752f7f","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":816,"width":751,"height":12}},{"id":"e876593e-5cad-4721-bac2-5b9f6af0876e","block_type":"box","text":"competitive national and international markets with an emphasis on deregulation. Companies that","page_number":187,"box":{"x":116,"y":831,"width":729,"height":12}},{"id":"9ee56c47-5dc4-4434-829d-20a1eddab2e7","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":847,"width":760,"height":12}},{"id":"e3d0d1b1-54fc-496e-b3f3-83f179ae6c94","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":862,"width":759,"height":12}},{"id":"3bb455af-d8f1-4254-b00f-1d8de1adab22","block_type":"box","text":"transmission and processing, equipment retailing, computer software and hardware and internet","page_number":187,"box":{"x":116,"y":878,"width":718,"height":12}},{"id":"836576bc-0fd8-4dca-9579-e2a9a989b384","block_type":"box","text":"II-100","page_number":187,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"f414bb4b-99da-4782-a4ca-20e85c221092","block_type":"box","text":"NM1026U-6030748-187/260","page_number":187,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"24e91bae-2c97-42a4-90cf-868499e5b87f","block_type":"box","text":"services are becoming increasingly significant components as well. In particular, wireless and internet","page_number":188,"box":{"x":116,"y":87,"width":759,"height":12}},{"id":"5901aded-ce52-4e6a-bc78-36605337db00","block_type":"box","text":"telephone services continue to gain market share at the expense of traditional telephone companies.","page_number":188,"box":{"x":116,"y":102,"width":752,"height":13}},{"id":"b0708516-074f-428b-b0d5-5a8701335631","block_type":"box","text":"The presence of unregulated companies in this industry and the entry of traditional telephone","page_number":188,"box":{"x":116,"y":118,"width":696,"height":12}},{"id":"b7e8f0c5-bd27-47cb-b54b-e6d1cc34e20c","block_type":"box","text":"companies into unregulated or less regulated businesses provide significant investment opportunities","page_number":188,"box":{"x":116,"y":134,"width":755,"height":12}},{"id":"1f89ac54-a67f-4845-9a83-e567043a4c8b","block_type":"box","text":"with companies that may increase their earnings at faster rates than had been allowed in traditional","page_number":188,"box":{"x":116,"y":149,"width":742,"height":12}},{"id":"e5e908fc-0768-46b7-8bf3-cf7a6353e7c1","block_type":"box","text":"regulated businesses. Still, increasing competition, technological innovations and other structural","page_number":188,"box":{"x":117,"y":165,"width":722,"height":12}},{"id":"ec004c1b-3ef6-4b45-a655-5e72048ab990","block_type":"box","text":"changes could adversely affect the profitability of such utilities and the growth rate of their dividends.","page_number":188,"box":{"x":116,"y":180,"width":750,"height":12}},{"id":"bfe5e167-f9a9-46ef-b41c-2aa3c78dae9b","block_type":"box","text":"Given mergers and proposed legislation and enforcement changes, it is likely that both traditional","page_number":188,"box":{"x":117,"y":196,"width":725,"height":12}},{"id":"30bcaabb-e6f4-4b16-a522-d135481bc7d2","block_type":"box","text":"telephone companies and cable companies will continue to provide an expanding range of utility","page_number":188,"box":{"x":116,"y":211,"width":718,"height":12}},{"id":"5e6c5b43-2455-447b-8384-f8c5bc2742c5","block_type":"box","text":"services to both residential, corporate and governmental customers.","page_number":188,"box":{"x":116,"y":227,"width":511,"height":12}},{"id":"3ac27383-5671-433a-ac99-9736db4e3e98","block_type":"box","text":"Gas.","page_number":188,"box":{"x":117,"y":261,"width":33,"height":9}},{"id":"d4371366-5358-4826-8482-4877c657f2f6","block_type":"box","text":"Gas transmission companies and gas distribution companies are undergoing significant changes.","page_number":188,"box":{"x":151,"y":261,"width":733,"height":12}},{"id":"94478b37-57c4-4ac8-b84e-c34a4a92b1b3","block_type":"box","text":"In the United States, interstate transmission companies are regulated by the Federal Energy","page_number":188,"box":{"x":117,"y":276,"width":689,"height":12}},{"id":"77d70f5e-2fc1-4aac-9058-64e49c619c83","block_type":"box","text":"Regulatory Commission, which is reducing its regulation of the industry. Many companies have","page_number":188,"box":{"x":117,"y":292,"width":709,"height":12}},{"id":"a5c16735-9d33-4b5d-b9b0-e15ad10a22dd","block_type":"box","text":"diversified into oil and gas exploration and development, making returns more sensitive to energy","page_number":188,"box":{"x":116,"y":307,"width":728,"height":12}},{"id":"feee78a8-3ac3-418f-8d0b-0c0047449a59","block_type":"box","text":"prices. In the recent decade, gas utility companies have been adversely affected by disruptions in the","page_number":188,"box":{"x":117,"y":323,"width":756,"height":12}},{"id":"e96899b5-4dfb-4880-b707-5a7e7058a8a0","block_type":"box","text":"oil industry and have also been affected by increased concentration and competition. In the opinion of","page_number":188,"box":{"x":116,"y":338,"width":759,"height":12}},{"id":"4a0b76fe-6b5b-4dcd-bca0-926b9363fa75","block_type":"box","text":"the Manager, however, environmental considerations could improve the gas industry outlook in the","page_number":188,"box":{"x":116,"y":354,"width":738,"height":12}},{"id":"7ee96d50-29bd-454c-a403-bc9e347c22cc","block_type":"box","text":"future. For example, natural gas is the cleanest of the hydrocarbon fuels, and this may result in","page_number":188,"box":{"x":116,"y":369,"width":709,"height":12}},{"id":"e9ec7b32-7576-46da-b100-b4f1f8c30ade","block_type":"box","text":"incremental shifts in fuel consumption toward natural gas and away from oil and coal, even for","page_number":188,"box":{"x":117,"y":385,"width":702,"height":12}},{"id":"234d39ad-8445-4d94-aa09-648f7a8ba05c","block_type":"box","text":"electricity generation. However, technological or regulatory changes within the industry may delay or","page_number":188,"box":{"x":116,"y":400,"width":750,"height":12}},{"id":"09ed6141-97ce-47b4-af47-b70e25c578ea","block_type":"box","text":"prevent this result.","page_number":188,"box":{"x":117,"y":416,"width":141,"height":12}},{"id":"c31d8495-000f-495a-bdb8-b2a49cf81c65","block_type":"box","text":"Water.","page_number":188,"box":{"x":118,"y":450,"width":46,"height":9}},{"id":"9e89b8cc-fe2d-4f95-90e5-c3d9394a2118","block_type":"box","text":"Water supply utilities are companies that collect, purify, distribute and sell water. In the United","page_number":188,"box":{"x":165,"y":450,"width":706,"height":12}},{"id":"4cf2e5c9-6add-4742-b3e2-f245a61b4338","block_type":"box","text":"States and around the world the industry is highly fragmented because most of the supplies are owned","page_number":188,"box":{"x":116,"y":465,"width":768,"height":12}},{"id":"000792d3-bdf9-4d0b-89e1-b507f5044ebe","block_type":"box","text":"by local authorities. Companies in this industry are generally mature and are experiencing little or no","page_number":188,"box":{"x":117,"y":481,"width":748,"height":12}},{"id":"78cc5306-6769-4039-a6d8-56930ac262e7","block_type":"box","text":"per capita volume growth. In the opinion of the Manager, there may be opportunities for certain","page_number":188,"box":{"x":117,"y":496,"width":708,"height":12}},{"id":"7f17ddcf-afa3-4a74-9d6a-a716a5657abc","block_type":"box","text":"companies to acquire other water utility companies and for foreign acquisition of domestic companies.","page_number":188,"box":{"x":116,"y":512,"width":761,"height":12}},{"id":"8a6f6886-bfe3-4f60-884b-e9c4a182483e","block_type":"box","text":"The Manager believes that favorable investment opportunities may result from consolidation of this","page_number":188,"box":{"x":116,"y":527,"width":738,"height":12}},{"id":"8f1bf548-b453-4070-9087-e4d28e85f60d","block_type":"box","text":"segment. As with other utilities, however, increased regulation, increased costs and potential","page_number":188,"box":{"x":116,"y":543,"width":693,"height":12}},{"id":"1a8139b8-d6a2-426d-8d67-29cc08a9cc9d","block_type":"box","text":"disruptions in supply may adversely affect investments in water supply utilities.","page_number":188,"box":{"x":116,"y":558,"width":588,"height":12}},{"id":"5b21c6b5-6ec3-45f1-97d1-b175e82f688d","block_type":"box","text":"Utility Industries Generally.","page_number":188,"box":{"x":117,"y":592,"width":197,"height":13}},{"id":"31498537-92b7-4bac-ac15-11da6a3a8061","block_type":"box","text":"There can be no assurance that the positive developments noted above,","page_number":188,"box":{"x":316,"y":593,"width":548,"height":11}},{"id":"991d72fb-2bdf-41e0-ba2a-4e73cb54c18e","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":608,"width":771,"height":12}},{"id":"bad87aaf-1122-4e75-a1ce-d4da281bc352","block_type":"box","text":"those noted above will not develop in the future.","page_number":188,"box":{"x":116,"y":623,"width":361,"height":12}},{"id":"f6781981-c9b0-4589-8850-a99389dcad99","block_type":"box","text":"When-Issued Securities, Delayed Delivery Securities and Forward Commitments.","page_number":188,"box":{"x":118,"y":658,"width":643,"height":12}},{"id":"8238ed6d-cc20-4811-bbdf-d198b8c34213","block_type":"box","text":"A Fund may","page_number":188,"box":{"x":762,"y":658,"width":100,"height":12}},{"id":"1274f89f-284f-4837-b720-6e7728fc8430","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":673,"width":708,"height":12}},{"id":"b4961cfc-2a3c-4cba-8126-64914319cf9c","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":689,"width":753,"height":12}},{"id":"43178f6d-49c2-4809-ae01-3a24f44bcc68","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":704,"width":734,"height":12}},{"id":"59c451c1-7ee2-4d9b-91fe-4c6977aa5fef","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":720,"width":762,"height":12}},{"id":"a2292872-4912-47e1-8907-43f9ace6a749","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":735,"width":717,"height":12}},{"id":"c87f4e82-87d0-456a-928f-b013b9c862d6","block_type":"box","text":"entering into the transaction.","page_number":188,"box":{"x":116,"y":751,"width":211,"height":12}},{"id":"5930ebdb-9277-48a1-b647-f4814a6abe4e","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":785,"width":725,"height":12}},{"id":"94631c99-104d-4682-a652-afc61c3904ac","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":800,"width":710,"height":12}},{"id":"b5c894cf-210b-46eb-b820-8e5c5e417065","block_type":"box","text":"collateral when entering into certain forward-settling transactions, including without limitation TBA","page_number":188,"box":{"x":116,"y":816,"width":722,"height":12}},{"id":"0b399073-f2e4-488e-b573-384cb37d6a2b","block_type":"box","text":"transactions. FINRA rules have also been implemented that include mandatory margin requirements","page_number":188,"box":{"x":116,"y":831,"width":750,"height":12}},{"id":"29bfe445-9874-489b-8f06-92a22980fd68","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":847,"width":754,"height":12}},{"id":"38503153-6074-4a40-a543-1ce878dd522e","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":862,"width":763,"height":12}},{"id":"0f96b487-0276-4630-83d9-06eea2d2d978","block_type":"box","text":"and impose added operational complexity.","page_number":188,"box":{"x":116,"y":878,"width":320,"height":12}},{"id":"7b469d57-02bc-4841-8377-b12986920cac","block_type":"box","text":"II-101","page_number":188,"box":{"x":480,"y":909,"width":38,"height":9}},{"id":"ece9a63e-4617-4316-bf5f-3864af633df6","block_type":"box","text":"NM1026U-6030748-188/260","page_number":188,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a1b4cc5a-7375-4b26-a2ad-2dd166f84b01","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":189,"box":{"x":116,"y":87,"width":754,"height":12}},{"id":"6c42d89c-f589-4282-a216-3e6e8aec149a","block_type":"box","text":"security purchased or sold on a delayed delivery basis or through a forward commitment will be","page_number":189,"box":{"x":116,"y":102,"width":713,"height":13}},{"id":"7304aba0-4347-463b-aa6e-35f471b25344","block_type":"box","text":"delivered. Also, the value of securities in these transactions on the delivery date may be more or less","page_number":189,"box":{"x":116,"y":118,"width":755,"height":12}},{"id":"fc17e418-fb5f-47e2-9303-01832a68c729","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":189,"box":{"x":116,"y":134,"width":766,"height":12}},{"id":"b99cce9b-6ea8-4288-8259-ef6930fee8e5","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":189,"box":{"x":116,"y":149,"width":757,"height":12}},{"id":"9487a4be-e069-46f0-9389-97d552e0cc26","block_type":"box","text":"security appreciates above the sale price during the commitment period.","page_number":189,"box":{"x":116,"y":165,"width":542,"height":12}},{"id":"86118fae-517f-4284-af74-e95f09c27583","block_type":"box","text":"If deemed advisable as a matter of investment strategy, a Fund may dispose of or renegotiate a","page_number":189,"box":{"x":117,"y":198,"width":715,"height":12}},{"id":"cd0751c8-e887-496c-a6e1-4fe26ecfb537","block_type":"box","text":"commitment after it has been entered into, and may sell securities it has committed to purchase before","page_number":189,"box":{"x":116,"y":214,"width":767,"height":12}},{"id":"905d203a-ac1f-47ca-8866-2f8db2512a28","block_type":"box","text":"those securities are delivered to the Fund on the settlement date. In these cases the Fund may realize","page_number":189,"box":{"x":116,"y":229,"width":764,"height":12}},{"id":"4d0b659b-4be8-40d7-87ee-fbfbf44702f8","block_type":"box","text":"a taxable capital gain or loss.","page_number":189,"box":{"x":116,"y":245,"width":221,"height":12}},{"id":"55403f92-e998-49e1-8086-19b8f20f4afd","block_type":"box","text":"When a Fund engages in when-issued, TBA or forward commitment transactions, it relies on the other","page_number":189,"box":{"x":116,"y":278,"width":763,"height":12}},{"id":"422d1f06-e9fe-45de-8867-de90aad14eec","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":189,"box":{"x":117,"y":294,"width":760,"height":12}},{"id":"91896056-7147-471d-b91b-294554c7a041","block_type":"box","text":"or missing an opportunity to obtain a price considered to be advantageous.","page_number":189,"box":{"x":116,"y":309,"width":561,"height":12}},{"id":"72edac6a-ed40-4011-a24d-afa23685323a","block_type":"box","text":"The market value of the securities underlying a commitment to purchase securities, and any","page_number":189,"box":{"x":116,"y":343,"width":688,"height":12}},{"id":"22ab0d94-ddbe-4c87-87c5-3097980f63c5","block_type":"box","text":"subsequent fluctuations in their market value, is taken into account when determining the market value","page_number":189,"box":{"x":116,"y":358,"width":767,"height":12}},{"id":"8cb1953e-de95-495e-ac8c-21c6f18aec70","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":189,"box":{"x":116,"y":374,"width":732,"height":12}},{"id":"b867c1a9-b7c4-4238-9f7a-44af34b5a422","block_type":"box","text":"interest on the securities it has committed to purchase until they are paid for and delivered on the","page_number":189,"box":{"x":117,"y":389,"width":725,"height":12}},{"id":"c6d294d0-fdce-4391-b53a-b9abde462fb0","block_type":"box","text":"settlement date.","page_number":189,"box":{"x":116,"y":405,"width":124,"height":9}},{"id":"067c1462-65a3-4923-8041-766f5dc26f67","block_type":"box","text":"Rule 18f-4 under the Investment Company Act permits a Fund to enter into when-issued or forward","page_number":189,"box":{"x":117,"y":438,"width":740,"height":12}},{"id":"a25d8bf3-2548-43a1-a2a2-496c12baf800","block_type":"box","text":"settling securities (e.g., firm and standby commitments, including TBA commitments, and dollar rolls)","page_number":189,"box":{"x":116,"y":454,"width":753,"height":12}},{"id":"9049844b-4551-41ca-9e7e-d1c7a25419c7","block_type":"box","text":"and non-standard settlement cycle securities notwithstanding the limitation on the issuance of senior","page_number":189,"box":{"x":116,"y":469,"width":750,"height":12}},{"id":"16abba7d-36d5-4195-a264-db27a94a92fb","block_type":"box","text":"securities in Section 18 of the Investment Company Act, provided that the Fund intends to physically","page_number":189,"box":{"x":116,"y":485,"width":750,"height":12}},{"id":"6b1999bc-a12d-4ac9-ab07-78a479cb3543","block_type":"box","text":"settle the transaction and the transaction will settle within 35 days of its trade date (the “Delayed","page_number":189,"box":{"x":116,"y":500,"width":719,"height":12}},{"id":"f9b36b7b-4bf2-4803-99ac-b63e06776e3d","block_type":"box","text":"Settlement Securities Provision”). If a when-issued, forward-settling or non-standard settlement cycle","page_number":189,"box":{"x":116,"y":516,"width":754,"height":12}},{"id":"414f2a59-0e89-4413-9fb9-48558a438813","block_type":"box","text":"security does not satisfy the Delayed-Settlement Securities Provision, then it is treated as a Derivatives","page_number":189,"box":{"x":116,"y":531,"width":771,"height":12}},{"id":"353d88f8-f365-4805-b640-5b92a387960f","block_type":"box","text":"Transaction under Rule 18f-4. See “— Derivatives — Regulation of Derivatives — Rule 18f-4 under the","page_number":189,"box":{"x":116,"y":547,"width":770,"height":12}},{"id":"a64ec14b-475c-4d3c-a17a-aaac086ccb49","block_type":"box","text":"Investment Company Act” above.","page_number":189,"box":{"x":117,"y":562,"width":252,"height":12}},{"id":"1f20f4c4-9fc1-44b4-ac20-17ecfe0ce75f","block_type":"box","text":"Regulations adopted by global prudential regulators require certain bank-regulated counterparties and","page_number":189,"box":{"x":117,"y":596,"width":761,"height":12}},{"id":"672c32d0-99d2-4c79-b02f-328cb231f242","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":611,"width":716,"height":12}},{"id":"aaf6e24a-9ce3-4bd6-ad46-762843b5a672","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":627,"width":736,"height":12}},{"id":"b0b63503-c788-49cb-94dd-ca6332f64029","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":642,"width":728,"height":12}},{"id":"8924fac6-10ef-41cf-a0ff-a0227299b0e5","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":658,"width":766,"height":12}},{"id":"83801306-7dbb-4ae1-8e3b-59840be5118c","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":673,"width":739,"height":12}},{"id":"5bc3a764-787e-4976-a30f-5c0e960487f7","block_type":"box","text":"these requirements, as well as potential additional government regulation and other developments in","page_number":189,"box":{"x":116,"y":689,"width":746,"height":12}},{"id":"88a49573-c549-42ea-8613-33a10d1b4b22","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":704,"width":730,"height":12}},{"id":"55f9cd1c-928a-443b-89f9-be6b27350960","block_type":"box","text":"these transactions or to realize amounts to be received under such agreements.","page_number":189,"box":{"x":116,"y":720,"width":593,"height":12}},{"id":"34236798-04c1-4128-afbb-52fdbaf04d79","block_type":"box","text":"Yields and Ratings.","page_number":189,"box":{"x":118,"y":753,"width":152,"height":12}},{"id":"d8732604-797d-451e-8fd1-f8b9420544f2","block_type":"box","text":"The yields on certain obligations are dependent on a variety of factors, including","page_number":189,"box":{"x":276,"y":753,"width":594,"height":12}},{"id":"66e5593c-9213-4119-93af-8b65275b5922","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":769,"width":753,"height":12}},{"id":"983bf118-adf5-4297-8196-d1bf45a91745","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":784,"width":732,"height":12}},{"id":"a329b8a4-26e0-4c0c-b721-f7df922771a5","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":800,"width":683,"height":12}},{"id":"0396a296-ab70-4bc9-b6e9-2f092291c31e","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":815,"width":739,"height":12}},{"id":"0703a78a-f003-4e65-bd22-c3dde03c4692","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":831,"width":749,"height":12}},{"id":"75d2977a-7674-449e-972f-0e0c59d78f6b","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":846,"width":769,"height":12}},{"id":"f6c69e22-5aa9-4ffc-a4e7-42fb128b8b34","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":862,"width":755,"height":12}},{"id":"2d63fcef-a453-4159-9b11-b0272fe4c1ae","block_type":"box","text":"to hold the security.","page_number":189,"box":{"x":116,"y":877,"width":150,"height":12}},{"id":"3ccbe141-2fa7-4e12-9bf4-f8f7f7196107","block_type":"box","text":"II-102","page_number":189,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"52eb1e0f-fe9f-4931-ac7e-5081afdf7e99","block_type":"box","text":"NM1026U-6030748-189/260","page_number":189,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2e25da16-3874-48e4-962f-a46d4970a165","block_type":"box","text":"Zero Coupon Securities.","page_number":190,"box":{"x":116,"y":87,"width":193,"height":12}},{"id":"eca0de3f-8512-43e1-8f29-c63ceccd6a0d","block_type":"box","text":"Zero coupon securities are securities that are sold at a discount to par value","page_number":190,"box":{"x":310,"y":87,"width":575,"height":12}},{"id":"3554eada-f092-479d-8787-eb7acb49f7b4","block_type":"box","text":"and do not pay interest during the life of the security. The discount approximates the total amount of","page_number":190,"box":{"x":116,"y":102,"width":747,"height":13}},{"id":"89547d4d-5858-4823-a16a-9588af412952","block_type":"box","text":"interest the security will accrue and compound over the period until maturity at a rate of interest","page_number":190,"box":{"x":117,"y":118,"width":711,"height":12}},{"id":"eb15f90e-7072-4052-823b-1663af2f9625","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":190,"box":{"x":117,"y":134,"width":741,"height":12}},{"id":"ff049ec8-b490-4b78-8060-71f82afec804","block_type":"box","text":"coupon security is entitled to receive the par value of the security.","page_number":190,"box":{"x":116,"y":149,"width":492,"height":12}},{"id":"f7285013-43e5-44a7-a545-ccef62910090","block_type":"box","text":"While interest payments are not made on such securities, holders of such securities are deemed to","page_number":190,"box":{"x":116,"y":180,"width":740,"height":12}},{"id":"29ebc6e5-0c2a-490c-be14-6659e3702e6d","block_type":"box","text":"have received income (“phantom income”) annually, notwithstanding that cash may not be received","page_number":190,"box":{"x":117,"y":196,"width":742,"height":12}},{"id":"8f670d57-404a-4710-a594-79b91abb8878","block_type":"box","text":"currently. The effect of owning instruments that do not make current interest payments is that a fixed","page_number":190,"box":{"x":116,"y":211,"width":751,"height":12}},{"id":"3e0a3032-2352-49d3-aadb-323b306a802a","block_type":"box","text":"yield is earned not only on the original investment but also, in effect, on all discount accretion during","page_number":190,"box":{"x":116,"y":227,"width":746,"height":12}},{"id":"9e6fdd9f-64d6-4a82-86a3-1ccfff7146d5","block_type":"box","text":"the life of the obligations. This implicit reinvestment of earnings at a fixed rate eliminates the risk of","page_number":190,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"4cadac25-e894-4d72-97dd-94eb8a85c6ff","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":190,"box":{"x":117,"y":258,"width":757,"height":12}},{"id":"bb481aaa-9e76-4771-85b4-6915d9f66be3","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":190,"box":{"x":116,"y":273,"width":764,"height":12}},{"id":"acffe377-f9a9-45ef-983e-24824245cbda","block_type":"box","text":"some of these securities may be subject to substantially greater price fluctuations during periods of","page_number":190,"box":{"x":116,"y":289,"width":739,"height":12}},{"id":"4ed44cfd-b539-42b0-9d7f-21ac99a8f23a","block_type":"box","text":"changing market interest rates than are comparable securities that pay interest currently. Longer term","page_number":190,"box":{"x":116,"y":304,"width":760,"height":12}},{"id":"03a78da9-17c9-4f12-abbe-17db310a6b2b","block_type":"box","text":"zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds. These","page_number":190,"box":{"x":116,"y":320,"width":768,"height":12}},{"id":"d0155694-a10f-409f-b908-9c6aea06fac7","block_type":"box","text":"investments benefit the issuer by mitigating its need for cash to meet debt service, but also require a","page_number":190,"box":{"x":117,"y":335,"width":749,"height":12}},{"id":"45e731ae-a913-49ea-9f39-4b8313a7b386","block_type":"box","text":"higher rate of return to attract investors who are willing to defer receipt of cash.","page_number":190,"box":{"x":117,"y":351,"width":589,"height":12}},{"id":"81fb662b-e831-4082-8343-eff396d641db","block_type":"box","text":"A Fund accrues income with respect to these securities for U.S. federal income tax and accounting","page_number":190,"box":{"x":116,"y":382,"width":739,"height":12}},{"id":"7c0fde0e-a75a-4e40-b708-cf3a724865d2","block_type":"box","text":"purposes prior to the receipt of cash payments. Zero coupon securities may be subject to greater","page_number":190,"box":{"x":117,"y":397,"width":724,"height":12}},{"id":"727da7b3-a8f4-44e2-8fda-87de5eedb43a","block_type":"box","text":"fluctuation in value and less liquidity in the event of adverse market conditions than comparably rated","page_number":190,"box":{"x":116,"y":413,"width":756,"height":12}},{"id":"8e9c51eb-f587-4240-88b6-977e609c570b","block_type":"box","text":"securities that pay cash interest at regular intervals.","page_number":190,"box":{"x":116,"y":428,"width":388,"height":12}},{"id":"147aead7-2035-42a1-9c57-5270f21d571d","block_type":"box","text":"Further, to maintain its qualification for pass-through treatment under the U.S. federal tax laws, a Fund","page_number":190,"box":{"x":117,"y":459,"width":764,"height":12}},{"id":"a9991a7f-89ae-4822-b952-bd2627a45201","block_type":"box","text":"is required to distribute income to its shareholders and, consequently, may have to dispose of other,","page_number":190,"box":{"x":117,"y":475,"width":746,"height":12}},{"id":"7d647c2d-f1f1-4c46-a5f4-1ed6a7234bff","block_type":"box","text":"more liquid portfolio securities under disadvantageous circumstances or may have to leverage itself by","page_number":190,"box":{"x":117,"y":490,"width":765,"height":12}},{"id":"62e80869-07e9-46d5-8d69-392abe9dc0bf","block_type":"box","text":"borrowing in order to generate the cash to satisfy these distributions. The required distributions may","page_number":190,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"c78805a0-bf75-4387-8f6f-e1c10978449e","block_type":"box","text":"result in an increase in a Fund’s exposure to zero coupon securities.","page_number":190,"box":{"x":117,"y":521,"width":511,"height":12}},{"id":"b9fcc273-fb73-459c-bd6f-b9c799abdf22","block_type":"box","text":"In addition to the above-described risks, there are certain other risks related to investing in zero","page_number":190,"box":{"x":117,"y":552,"width":712,"height":12}},{"id":"bb5b4b7b-d737-4a40-bea9-d21b29c98c93","block_type":"box","text":"coupon securities. During a period of severe market conditions, the market for such securities may","page_number":190,"box":{"x":116,"y":568,"width":736,"height":12}},{"id":"65724c68-a878-47a7-af0f-f4129d57c7ba","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":583,"width":762,"height":12}},{"id":"4452fdda-9140-4589-8b35-8ff82009a165","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":599,"width":739,"height":12}},{"id":"df2ca1d4-d78c-415c-a6eb-88b33d93fdc1","block_type":"box","text":"securities are held in the Fund’s portfolio.","page_number":190,"box":{"x":116,"y":614,"width":311,"height":12}},{"id":"94bef75c-f963-4f34-9772-0dfeade42648","block_type":"box","text":"Suitability. (All Funds)","page_number":190,"box":{"x":117,"y":645,"width":181,"height":12}},{"id":"c1f4d2ab-bf72-4ee4-bcde-84331ffa666e","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":668,"width":756,"height":12}},{"id":"e8a1ad4c-36cb-4e6d-8310-e7cec6a5e382","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":684,"width":747,"height":12}},{"id":"007ad916-be95-47c4-8145-ba27073512dc","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":699,"width":751,"height":13}},{"id":"00057a0c-9557-4606-882f-8df18dff9b0f","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":715,"width":727,"height":12}},{"id":"0791a4d4-9608-48d7-80b3-1067f636cad2","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":730,"width":737,"height":13}},{"id":"237631c8-62ee-42c1-8bd6-81de4d5de889","block_type":"box","text":"loss of principal.","page_number":190,"box":{"x":117,"y":746,"width":118,"height":12}},{"id":"ac90cbc5-c49e-4d67-8135-a5fa488e3016","block_type":"box","text":"Investment Restrictions. (All Funds)","page_number":190,"box":{"x":116,"y":777,"width":287,"height":12}},{"id":"50317556-f53e-4137-a26a-91f0385765d1","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":800,"width":707,"height":12}},{"id":"1765cca4-cf82-434a-af0e-e10259bb828f","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":816,"width":766,"height":12}},{"id":"0480289e-1290-4caf-9929-459fb9ccc5fc","block_type":"box","text":"those investment restrictions, each Fund is also subject to the restrictions discussed below.","page_number":190,"box":{"x":116,"y":831,"width":683,"height":12}},{"id":"fd749566-6bb3-4f64-a6f5-ece50c2143cb","block_type":"box","text":"Each Fund’s investments will be limited in order to","page_number":190,"box":{"x":117,"y":862,"width":376,"height":10}},{"id":"411c19a4-7a4d-488e-bb72-6ec31d840fa7","block_type":"box","text":"allow the Fund to qualify as a “regulated investment","page_number":190,"box":{"x":494,"y":862,"width":389,"height":12}},{"id":"8edbf203-e4f6-4cfc-bc62-12ce0a21c37e","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":878,"width":721,"height":12}},{"id":"71ef8968-2334-4ea5-b2cf-5a58c6a518c9","block_type":"box","text":"II-103","page_number":190,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"2d10aecc-e49b-40e5-b400-c7a09278b9bc","block_type":"box","text":"NM1026U-6030748-190/260","page_number":190,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e94d847a-19c6-4329-bc21-fb08133fcd2f","block_type":"box","text":"among other requirements, each Fund will limit its investments so that, at the close of each quarter of","page_number":191,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"a19678e4-45c1-4f0f-9aee-a2044b1e7152","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":191,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"c5a671dd-03b1-4b54-8e10-7a52342dc525","block_type":"box","text":"securities of other regulated investment companies, U.S. Government Securities and other securities,","page_number":191,"box":{"x":116,"y":118,"width":759,"height":12}},{"id":"58f96001-7f1f-49b7-bccb-7956e14e7991","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":191,"box":{"x":116,"y":134,"width":756,"height":12}},{"id":"5511f33f-2540-476d-8e64-596f66003d13","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":191,"box":{"x":116,"y":149,"width":751,"height":12}},{"id":"133469af-038f-4d14-ada0-675be56607eb","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":191,"box":{"x":116,"y":165,"width":718,"height":12}},{"id":"21b03d25-87a8-44db-8e90-5d273306e0ab","block_type":"box","text":"Government Securities or securities of other regulated investment companies) of any one issuer, any","page_number":191,"box":{"x":117,"y":180,"width":754,"height":12}},{"id":"d4abc61d-6a98-43fb-ae68-a46dc7e66284","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":191,"box":{"x":116,"y":196,"width":726,"height":12}},{"id":"7db92c58-202f-4184-9d29-34d545cdddef","block_type":"box","text":"similar trades or businesses or related trades or businesses or in the securities of one or more qualified","page_number":191,"box":{"x":116,"y":211,"width":772,"height":12}},{"id":"74d108a2-777f-4a7c-840b-a6aaa05e67b3","block_type":"box","text":"publicly traded partnerships (","page_number":191,"box":{"x":117,"y":227,"width":214,"height":12}},{"id":"c37f8726-5087-42ba-a59d-1d24af3253fd","block_type":"box","text":"i.e.","page_number":191,"box":{"x":332,"y":227,"width":21,"height":9}},{"id":"78f3c45f-fc76-4648-a5f8-535aabf395f2","block_type":"box","text":", partnerships that are traded on an established securities market or","page_number":191,"box":{"x":356,"y":227,"width":507,"height":11}},{"id":"eb4967f6-facf-4131-b0d9-1e15d5d03dee","block_type":"box","text":"tradable on a secondary market, other than partnerships that derive 90% of their income from interest,","page_number":191,"box":{"x":116,"y":242,"width":764,"height":12}},{"id":"e3b07ace-75ea-4aa5-a347-514f20478e8d","block_type":"box","text":"dividends, capital gains and other traditionally permitted mutual fund income). For purposes of this","page_number":191,"box":{"x":116,"y":258,"width":734,"height":12}},{"id":"e7b51118-acc3-4625-9032-4613ce1a5f66","block_type":"box","text":"restriction, the Municipal Funds generally will regard each state and each of its political subdivisions,","page_number":191,"box":{"x":117,"y":273,"width":749,"height":12}},{"id":"66d0c6e9-3346-4e9d-9342-c642a99cfb05","block_type":"box","text":"agencies or instrumentalities and each multi-state agency of which the state is a member as a","page_number":191,"box":{"x":116,"y":289,"width":703,"height":12}},{"id":"a9f8d30a-033d-4165-b30c-8505af785c4d","block_type":"box","text":"separate issuer. Each public authority that issues securities on behalf of a private entity generally will","page_number":191,"box":{"x":116,"y":304,"width":754,"height":12}},{"id":"d6fb1c73-c7c6-4154-a538-dc96438d79bc","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":191,"box":{"x":116,"y":320,"width":731,"height":12}},{"id":"0a3ccbd6-e6f9-4a10-9873-cbcd05e28e82","block_type":"box","text":"revenues of a non-government entity, then the entity with the ultimate responsibility for the payment of","page_number":191,"box":{"x":117,"y":335,"width":762,"height":12}},{"id":"91d81299-f5b2-4566-b3d5-de3c1f3950c9","block_type":"box","text":"interest and principal may be regarded as the sole issuer.","page_number":191,"box":{"x":117,"y":351,"width":431,"height":12}},{"id":"a46bcb44-3b96-4062-8619-56d8f177ecdd","block_type":"box","text":"Foreign government securities (unlike U.S. Government Securities) are not exempt from the 5%, 10%","page_number":191,"box":{"x":117,"y":382,"width":759,"height":12}},{"id":"82bbf064-bb32-403e-ad22-4420dc70d964","block_type":"box","text":"and 25% diversification requirements of the Code discussed above and the securities of each foreign","page_number":191,"box":{"x":116,"y":397,"width":755,"height":12}},{"id":"535ac57d-36de-420d-bdb1-113a904e4de9","block_type":"box","text":"government issuer are considered to be obligations of a single issuer. These tax-related limitations","page_number":191,"box":{"x":116,"y":413,"width":737,"height":12}},{"id":"634c1a40-4c8c-4bf2-ad8d-279516b5a0b6","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":191,"box":{"x":117,"y":428,"width":769,"height":12}},{"id":"80c81ac9-198b-421d-bed3-c14269cfe9a1","block_type":"box","text":"federal tax requirements. A Fund that is “diversified” under the Investment Company Act must satisfy","page_number":191,"box":{"x":116,"y":444,"width":753,"height":12}},{"id":"49c1b5fd-10d8-40ce-9af9-48b195140b00","block_type":"box","text":"the foregoing 5% and 10% requirements with respect to 75% of its total assets.","page_number":191,"box":{"x":116,"y":459,"width":592,"height":12}},{"id":"52c961b9-003c-4848-b316-64ff5ad088dc","block_type":"box","text":"II-104","page_number":191,"box":{"x":480,"y":909,"width":40,"height":9}},{"id":"289e6b2b-0f79-4cc2-b35e-37f845f70bc5","block_type":"box","text":"NM1026U-6030748-191/260","page_number":191,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"542f0a70-75cf-4d15-878e-fe6e0794a07c","block_type":"box","text":"Appendix A","page_number":192,"box":{"x":453,"y":87,"width":98,"height":12}},{"id":"9a36b600-2cec-49f3-9a40-ce0bebdc97c5","block_type":"box","text":"Description of Bond Ratings","page_number":192,"box":{"x":387,"y":117,"width":231,"height":12}},{"id":"db1d1f81-def2-49b5-9716-79db869c8c8f","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":192,"box":{"x":116,"y":154,"width":722,"height":12}},{"id":"e17ef628-da89-4eb5-8e67-3e14f92181fe","block_type":"box","text":"agency designated as a nationally recognized statistical rating organization (“NRSRO”) by the SEC.","page_number":192,"box":{"x":116,"y":170,"width":744,"height":12}},{"id":"7377954c-764c-419f-8b7d-61ece467ccf7","block_type":"box","text":"While NRSROs may from time to time revise such ratings, they undertake no obligation to do so, and","page_number":192,"box":{"x":116,"y":185,"width":755,"height":12}},{"id":"81eaa1d2-4dca-4a72-8e4f-e182616c9bc8","block_type":"box","text":"the ratings given to securities at issuance do not necessarily represent ratings which would be given to","page_number":192,"box":{"x":116,"y":201,"width":767,"height":12}},{"id":"0a35dc24-e152-4b26-a164-b94c2816ee37","block_type":"box","text":"these securities on a particular subsequent date.","page_number":192,"box":{"x":116,"y":216,"width":366,"height":12}},{"id":"a397ba57-31e1-47ae-8112-67b5aeabdce0","block_type":"box","text":"NRSROs may rate specific investments (e.g., bonds), issuers (e.g., corporations, governments and","page_number":192,"box":{"x":117,"y":246,"width":740,"height":12}},{"id":"3c4d168e-de51-4b50-b50d-45d3fdca41c9","block_type":"box","text":"financial institutions) and/or programs (e.g., commercial paper programs). However, certain types of","page_number":192,"box":{"x":116,"y":261,"width":747,"height":13}},{"id":"60d4a885-9fc2-437a-b878-d3ac392d128f","block_type":"box","text":"investments may not be rated by NRSROs, such as certain government/sovereign obligations, US","page_number":192,"box":{"x":117,"y":277,"width":732,"height":12}},{"id":"0abe74fa-b785-414c-b075-e6b4ed3f7491","block_type":"box","text":"agency securities, commercial paper, time deposits at financial institutions, and derivative instruments","page_number":192,"box":{"x":116,"y":292,"width":761,"height":13}},{"id":"e6f2e88e-d383-4779-957a-acda0cf3fe68","block_type":"box","text":"such as credit default swaps. For these types of investments, as well as US Treasury securities (some","page_number":192,"box":{"x":116,"y":308,"width":764,"height":12}},{"id":"92309ea3-a155-4319-b9c1-f23a14309ac4","block_type":"box","text":"of which are not rated), where a NRSRO has not rated the specific investment but has rated the","page_number":192,"box":{"x":116,"y":323,"width":716,"height":13}},{"id":"7c1410c3-dd9a-4051-b63d-69246f3e28a6","block_type":"box","text":"investment’s issuer, program, financial institution or underlying reference asset, BlackRock Advisors,","page_number":192,"box":{"x":117,"y":339,"width":751,"height":12}},{"id":"dbef36a0-c1ec-4912-bff6-83fbdb69d46e","block_type":"box","text":"LLC, BlackRock Fund Advisors or their respective affiliates (“BlackRock”) may consider the investment","page_number":192,"box":{"x":117,"y":355,"width":766,"height":12}},{"id":"5199fcaa-82b8-402f-92a6-a875bbe35691","block_type":"box","text":"to have the same NRSRO rating as its issuer, program, financial institution or underlying reference","page_number":192,"box":{"x":116,"y":370,"width":736,"height":12}},{"id":"634a1f72-c512-4155-a786-067c2065cbba","block_type":"box","text":"asset, as applicable. In the case of municipal securities, where one NRSRO provides multiple ratings","page_number":192,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"7d49d025-49c0-4ee9-96db-caa73a1920f2","block_type":"box","text":"for the same security (e.g., “underlying,” “insured” and/or “enhanced” ratings), BlackRock may consider","page_number":192,"box":{"x":116,"y":401,"width":770,"height":12}},{"id":"28d27b8a-5aa5-4ece-ac33-3d0702f5f3db","block_type":"box","text":"the security to have the highest of the multiple ratings.","page_number":192,"box":{"x":116,"y":417,"width":407,"height":12}},{"id":"72adc3ae-84e0-4bc0-9718-5eb7c2990613","block_type":"box","text":"New issue securities (regardless of type) may not be rated by a NRSRO at the time of their initial","page_number":192,"box":{"x":117,"y":446,"width":722,"height":13}},{"id":"c5907b1f-f62f-4bc5-8536-04fefb110088","block_type":"box","text":"offering. Preliminary prospectuses or term sheets for new issue securities may include an expected","page_number":192,"box":{"x":116,"y":462,"width":742,"height":12}},{"id":"a958aba3-c16d-4f30-9110-7d9bff2c31d6","block_type":"box","text":"rating for the security (as determined by the underwriter and/or issuer) or a NRSRO rating for the","page_number":192,"box":{"x":117,"y":477,"width":723,"height":13}},{"id":"9983ba44-933d-401c-8829-69383313acb1","block_type":"box","text":"issuer of the security. If applicable, when deciding whether to purchase a new issue security that has","page_number":192,"box":{"x":117,"y":493,"width":752,"height":12}},{"id":"544e86a1-ab10-4cc4-8d6d-f16d247e3660","block_type":"box","text":"not yet been rated by a NRSRO, BlackRock may attribute an expected rating to the security based on:","page_number":192,"box":{"x":117,"y":508,"width":763,"height":13}},{"id":"6fe193c4-c272-44dd-a880-0fa4895a6add","block_type":"box","text":"(i) the expected rating of the security set forth in the preliminary prospectus or term sheet for the","page_number":192,"box":{"x":117,"y":524,"width":718,"height":12}},{"id":"17ccc25e-51a7-43b5-8292-354a0d0d13d4","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":192,"box":{"x":116,"y":539,"width":760,"height":13}},{"id":"bdf1f118-17c9-4288-9d76-8f9fd5593bd4","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":192,"box":{"x":116,"y":555,"width":767,"height":12}},{"id":"726b2fa0-3c4f-477a-a21a-2f892ed81437","block_type":"box","text":"having a similar structure or the same sponsor.","page_number":192,"box":{"x":117,"y":571,"width":353,"height":12}},{"id":"0595ed5d-848f-4798-9bd0-217d4619d8f8","block_type":"box","text":"Where the investment objective of a fund is to track the performance of an index that includes credit","page_number":192,"box":{"x":116,"y":600,"width":746,"height":12}},{"id":"971b18ad-b766-4931-ac61-46a67c4e3917","block_type":"box","text":"ratings eligibility criteria as part of its index methodology, the fund may purchase any security within the","page_number":192,"box":{"x":117,"y":616,"width":771,"height":12}},{"id":"33b94539-d737-498d-b979-450429603883","block_type":"box","text":"index, such security having been determined by the index provider as meeting its credit ratings","page_number":192,"box":{"x":117,"y":632,"width":707,"height":11}},{"id":"5aa45c8d-b2b8-4627-b534-5a8fd115ffd5","block_type":"box","text":"eligibility criteria. The credit ratings practices of an index provider may differ from BlackRock’s","page_number":192,"box":{"x":116,"y":647,"width":701,"height":12}},{"id":"7a044553-0890-4cb2-8421-edf1fd32223b","block_type":"box","text":"practices, as described above. Further, the fund may invest, directly or indirectly, in securities that are","page_number":192,"box":{"x":117,"y":662,"width":754,"height":12}},{"id":"288c9c10-eb1c-4468-875b-75c004fdbbd0","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":192,"box":{"x":117,"y":678,"width":757,"height":12}},{"id":"3df73ae2-f8d0-4615-b625-23650e978740","block_type":"box","text":"in its index methodology in various circumstances, including where a security is downgraded but not","page_number":192,"box":{"x":117,"y":694,"width":741,"height":11}},{"id":"48a9886c-ec37-4775-ae25-6e4b25f50036","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":192,"box":{"x":116,"y":709,"width":733,"height":12}},{"id":"68422bdd-8f05-450c-afe6-277850d1495b","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":192,"box":{"x":116,"y":724,"width":734,"height":13}},{"id":"73f24f88-12bb-451c-ae43-09a8112fda10","block_type":"box","text":"fund.","page_number":192,"box":{"x":116,"y":740,"width":36,"height":9}},{"id":"86a50ee1-4717-490e-b57a-41544f64c6f4","block_type":"box","text":"Fixed-income securities which are unrated may expose the investor to risks with respect to capacity to","page_number":192,"box":{"x":117,"y":770,"width":757,"height":12}},{"id":"a96b1049-e2c3-4645-a59f-dfb9d71f1fd4","block_type":"box","text":"pay interest or repay principal which are similar to the risks of lower-rated speculative bonds.","page_number":192,"box":{"x":117,"y":785,"width":686,"height":12}},{"id":"fa917aec-b2c5-4262-b3e4-cd35c2830ce9","block_type":"box","text":"Evaluation of these securities is dependent on BlackRock’s judgment, analysis and experience in the","page_number":192,"box":{"x":117,"y":801,"width":747,"height":12}},{"id":"5e8f0c43-50f5-4ba6-ae65-b6691da325f6","block_type":"box","text":"evaluation of such securities.","page_number":192,"box":{"x":116,"y":816,"width":214,"height":10}},{"id":"bb708b38-ffcd-4123-a101-ca5a0f3a5a48","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":192,"box":{"x":117,"y":846,"width":745,"height":12}},{"id":"cc750b88-2faa-47df-bda2-0d63f05d5955","block_type":"box","text":"effect of recent developments on the issuer’s ability to make interest and principal payments or on the","page_number":192,"box":{"x":116,"y":862,"width":760,"height":12}},{"id":"7ea89d92-4e6b-4140-a63c-2d90e01315ab","block_type":"box","text":"likelihood of default.","page_number":192,"box":{"x":117,"y":877,"width":152,"height":10}},{"id":"47ef13f1-7bcf-4f5e-a607-0327fb62eb20","block_type":"box","text":"A-1","page_number":192,"box":{"x":486,"y":909,"width":24,"height":9}},{"id":"7d239de6-0d4a-4a53-85a1-9281ed7921b2","block_type":"box","text":"NM1026U-6030748-192/260","page_number":192,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a5496e0f-3a99-4869-97fb-c88109474162","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":193,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"af437335-2ae7-483d-9a3b-0a6afcad30da","block_type":"box","text":"Ratings and Fitch.","page_number":193,"box":{"x":117,"y":103,"width":139,"height":12}},{"id":"c1265ded-7771-4a80-9330-e7dd0732d710","block_type":"box","text":"The descriptions below relate to general long-term and short-term obligations of an issuer.","page_number":193,"box":{"x":116,"y":134,"width":674,"height":12}},{"id":"afd95ccc-6ae7-4c51-a7a2-d3513d04d558","block_type":"box","text":"A Description of Moody’s Investors Service, Inc.’s (“Moody’s”) Global Rating Scales","page_number":193,"box":{"x":116,"y":165,"width":677,"height":12}},{"id":"2d5e7002-0d92-40f4-b0fe-82706eab3927","block_type":"box","text":"Ratings assigned on Moody’s global long-term and short-term rating scales are forward-looking","page_number":193,"box":{"x":117,"y":196,"width":711,"height":12}},{"id":"72d39b1f-11b6-4f2b-ba37-41e9c3c1041d","block_type":"box","text":"opinions of the relative credit risks of financial obligations issued by non-financial corporates, financial","page_number":193,"box":{"x":116,"y":211,"width":759,"height":12}},{"id":"a7aeeb0d-4b41-4741-9b6a-d9815ed18964","block_type":"box","text":"institutions, structured finance vehicles, project finance vehicles, and public sector entities. Moody’s","page_number":193,"box":{"x":117,"y":227,"width":742,"height":12}},{"id":"b9b4323e-0d79-483c-b6a4-bdc25946bf7c","block_type":"box","text":"defines credit risk as the risk that an entity may not meet its contractual financial obligations as they","page_number":193,"box":{"x":116,"y":242,"width":744,"height":12}},{"id":"f7695015-bd58-4e2f-a07e-404c812135d6","block_type":"box","text":"come due and any estimated financial loss in the event of default or impairment. The contractual","page_number":193,"box":{"x":116,"y":258,"width":720,"height":12}},{"id":"13a2b4e0-0307-4db3-b87f-7df568b3380a","block_type":"box","text":"financial obligations addressed by Moody’s ratings are those that call for, without regard to","page_number":193,"box":{"x":116,"y":273,"width":676,"height":12}},{"id":"f23a994f-6bf3-49b1-80dd-41abc1b33a7f","block_type":"box","text":"enforceability, the payment of an ascertainable amount, which may vary based upon standard sources","page_number":193,"box":{"x":116,"y":289,"width":765,"height":12}},{"id":"40dd495d-1ab9-4cc2-bdff-099f77e4d483","block_type":"box","text":"of variation (e.g., floating interest rates), by an ascertainable date. Moody’s rating addresses the","page_number":193,"box":{"x":116,"y":304,"width":719,"height":12}},{"id":"a5104aff-0c87-44d8-88fd-8e253c3fdfa8","block_type":"box","text":"issuer’s ability to obtain cash sufficient to service the obligation, and its willingness to pay. Moody’s","page_number":193,"box":{"x":117,"y":320,"width":738,"height":12}},{"id":"7ec47be2-b570-44fa-8b11-2105126119f2","block_type":"box","text":"ratings do not address non-standard sources of variation in the amount of the principal obligation (e.g.,","page_number":193,"box":{"x":117,"y":335,"width":765,"height":12}},{"id":"9af40891-9bc6-4a95-bcec-4d99270ec881","block_type":"box","text":"equity indexed), absent an express statement to the contrary in a press release accompanying an","page_number":193,"box":{"x":116,"y":351,"width":731,"height":12}},{"id":"303ea1a7-f748-431e-930c-e0435ef7b361","block_type":"box","text":"initial rating. Long-term ratings are assigned to issuers or obligations with an original maturity of one","page_number":193,"box":{"x":117,"y":366,"width":745,"height":12}},{"id":"db88021f-4ab1-49ea-bc23-f87249f22f33","block_type":"box","text":"year or more and reflect both on the likelihood of a default or impairment on contractual financial","page_number":193,"box":{"x":116,"y":382,"width":719,"height":12}},{"id":"1483e3b1-6e4f-46ad-bf7d-d0c5702fbc0b","block_type":"box","text":"obligations and the expected financial loss suffered in the event of default or impairment. Short-term","page_number":193,"box":{"x":116,"y":397,"width":747,"height":12}},{"id":"b535732b-96f2-48a3-9b14-2c476d687e7c","block_type":"box","text":"ratings are assigned for obligations with an original maturity of thirteen months or less and reflect both","page_number":193,"box":{"x":117,"y":413,"width":760,"height":12}},{"id":"eaa8d294-5768-4f37-b5c6-3ef1e9cccb69","block_type":"box","text":"on the likelihood of a default or impairment on contractual financial obligations and the expected","page_number":193,"box":{"x":116,"y":428,"width":717,"height":12}},{"id":"63a93c3e-6ffa-4faf-b7b0-bb2f656c1cdf","block_type":"box","text":"financial loss suffered in the event of default or impairment. Moody’s issues ratings at the issuer level","page_number":193,"box":{"x":116,"y":444,"width":755,"height":12}},{"id":"1df7b75d-8cd3-4d08-bf69-51f9ffc8f4c5","block_type":"box","text":"and instrument level on both the long-term scale and the short-term scale. Typically, ratings are made","page_number":193,"box":{"x":116,"y":459,"width":761,"height":12}},{"id":"ece8ba99-1acd-452e-bb8e-e88764aba2fd","block_type":"box","text":"publicly available although private and unpublished ratings may also be assigned.","page_number":193,"box":{"x":117,"y":475,"width":610,"height":12}},{"id":"4982b13a-eb11-4a33-a930-684a577e9bbd","block_type":"box","text":"Moody’s differentiates structured finance ratings from fundamental ratings (i.e., ratings on nonfinancial","page_number":193,"box":{"x":117,"y":506,"width":763,"height":12}},{"id":"79fa95f6-106d-4573-9c65-fbc47f9c087f","block_type":"box","text":"corporate, financial institution, and public sector entities) on the global long-term scale by adding (sf) to","page_number":193,"box":{"x":116,"y":521,"width":769,"height":12}},{"id":"1bac9acb-b1ed-40c0-abea-c3a1b715cc4b","block_type":"box","text":"all structured finance ratings. The addition of (sf) to structured finance ratings should eliminate any","page_number":193,"box":{"x":116,"y":537,"width":735,"height":12}},{"id":"d1d459b1-2571-46c4-b565-a6d66e15b709","block_type":"box","text":"presumption that such ratings and fundamental ratings at the same letter grade level will behave the","page_number":193,"box":{"x":117,"y":552,"width":747,"height":12}},{"id":"7361d922-1ea1-4d47-854b-546a3bcb107f","block_type":"box","text":"same. The (sf) indicator for structured finance security ratings indicates that otherwise similarly rated","page_number":193,"box":{"x":116,"y":568,"width":751,"height":12}},{"id":"ac98ef40-40fb-4e85-a6ab-eb486fea380f","block_type":"box","text":"structured finance and fundamental securities may have different risk characteristics. Through its","page_number":193,"box":{"x":116,"y":583,"width":724,"height":12}},{"id":"db078edb-b41f-45b5-874f-4afce552aaa3","block_type":"box","text":"current methodologies, however, Moody’s aspires to achieve broad expected equivalence in structured","page_number":193,"box":{"x":116,"y":599,"width":769,"height":12}},{"id":"fbf16a40-d73c-4a17-91d5-d094a2821141","block_type":"box","text":"finance and fundamental rating performance when measured over a long period of time.","page_number":193,"box":{"x":116,"y":614,"width":658,"height":12}},{"id":"3443b276-5440-4b2c-8767-9132c3a6ea68","block_type":"box","text":"Description of Moody’s Global Long-Term Rating Scale","page_number":193,"box":{"x":117,"y":645,"width":445,"height":12}},{"id":"c10253fb-03c9-4e6e-b202-d4371ac15cdf","block_type":"box","text":"Aaa Obligations rated Aaa are judged to be of the highest quality, subject to the lowest level","page_number":193,"box":{"x":116,"y":676,"width":756,"height":12}},{"id":"acab0c3f-12ec-42f0-b057-1e0950efd991","block_type":"box","text":"of credit risk.","page_number":193,"box":{"x":226,"y":692,"width":93,"height":9}},{"id":"6093c2da-05f0-4efd-be0c-f83ccff83047","block_type":"box","text":"Aa Obligations rated Aa are judged to be of high quality and are subject to very low credit","page_number":193,"box":{"x":116,"y":715,"width":747,"height":12}},{"id":"a44d6e6b-c1d1-4134-b498-6ac702d6bc16","block_type":"box","text":"risk.","page_number":193,"box":{"x":226,"y":731,"width":28,"height":9}},{"id":"e962e6ca-b98c-4505-980d-9226450ae331","block_type":"box","text":"A Obligations rated A are judged to be upper-medium grade and are subject to low credit","page_number":193,"box":{"x":116,"y":754,"width":754,"height":12}},{"id":"69b308a1-701b-4c0c-8b97-c853cf81ec9f","block_type":"box","text":"risk.","page_number":193,"box":{"x":226,"y":769,"width":28,"height":10}},{"id":"e7fd8a31-54ab-4026-a480-d2fff9c2230e","block_type":"box","text":"Baa Obligations rated Baa are judged to be medium-grade and subject to moderate credit","page_number":193,"box":{"x":117,"y":792,"width":741,"height":13}},{"id":"fa465aa1-4db3-4910-9629-af78a1c887a2","block_type":"box","text":"risk and as such may possess certain speculative characteristics.","page_number":193,"box":{"x":226,"y":808,"width":483,"height":12}},{"id":"63577839-b624-43be-ae1b-0426f2bbee37","block_type":"box","text":"Ba Obligations rated Ba are judged to be speculative and are subject to substantial credit","page_number":193,"box":{"x":117,"y":831,"width":750,"height":12}},{"id":"bf9c3de2-0426-4aba-b5cb-1f59dd6fb415","block_type":"box","text":"risk.","page_number":193,"box":{"x":226,"y":847,"width":35,"height":9}},{"id":"1a9d94ed-1cc2-48bb-b636-c2af13028446","block_type":"box","text":"B Obligations rated B are considered speculative and are subject to high credit risk.","page_number":193,"box":{"x":117,"y":870,"width":717,"height":12}},{"id":"3ace5f14-0102-4533-9873-b4d90cbbdf17","block_type":"box","text":"A-2","page_number":193,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"8dfd7e06-375e-445b-91a8-f50d048f2b5e","block_type":"box","text":"NM1026U-6030748-193/260","page_number":193,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4898c142-25f5-40d3-8df7-918b56a8544d","block_type":"box","text":"Caa Obligations rated Caa are judged to be speculative of poor standing and are subject to","page_number":194,"box":{"x":117,"y":87,"width":755,"height":12}},{"id":"0ebc4f71-571f-469d-9619-6cc11409adc1","block_type":"box","text":"very high credit risk.","page_number":194,"box":{"x":225,"y":103,"width":154,"height":12}},{"id":"2d3b8836-465a-47bc-851c-0e09999b8676","block_type":"box","text":"Ca Obligations rated Ca are highly speculative and are likely in, or very near, default, with","page_number":194,"box":{"x":117,"y":126,"width":753,"height":12}},{"id":"03c74ce6-8b58-49f0-8c75-12d440ea4651","block_type":"box","text":"some prospect of recovery of principal and interest.","page_number":194,"box":{"x":226,"y":141,"width":386,"height":12}},{"id":"e68d6b67-ab6e-434f-a15f-9d1e27aba3b4","block_type":"box","text":"C Obligations rated C are the lowest rated and are typically in default, with little prospect","page_number":194,"box":{"x":117,"y":165,"width":752,"height":12}},{"id":"08bd90f3-db3e-46fb-84d9-f94d741c2bad","block_type":"box","text":"for recovery of principal or interest.","page_number":194,"box":{"x":225,"y":180,"width":264,"height":12}},{"id":"616a3956-8c0a-4517-926e-ea21fd7033b9","block_type":"box","text":"Note:","page_number":194,"box":{"x":117,"y":210,"width":39,"height":9}},{"id":"22974da8-8783-4197-bb73-4730b648231e","block_type":"box","text":"Moody’s appends numerical modifiers 1, 2, and 3 to each generic rating classification from Aa","page_number":194,"box":{"x":156,"y":210,"width":706,"height":12}},{"id":"c751b64b-d189-4bb1-8c1b-a175d69ca124","block_type":"box","text":"through Caa. The modifier 1 indicates that the obligation ranks in the higher end of its generic rating","page_number":194,"box":{"x":116,"y":225,"width":745,"height":12}},{"id":"eb306040-ab6e-403e-b3da-836585a33bf4","block_type":"box","text":"category; the modifier 2 indicates a mid-range ranking; and the modifier 3 indicates a ranking in the","page_number":194,"box":{"x":116,"y":241,"width":741,"height":12}},{"id":"8dde7b21-c03e-4611-9a1a-f317b6053046","block_type":"box","text":"lower end of that generic rating category. Additionally, a “(hyb)” indicator is appended to all ratings of","page_number":194,"box":{"x":117,"y":256,"width":751,"height":12}},{"id":"e53c2769-9189-42fd-a278-1880f3869323","block_type":"box","text":"hybrid securities issued by banks, insurers, finance companies, and securities firms.","page_number":194,"box":{"x":117,"y":272,"width":628,"height":12}},{"id":"3825b8c9-db90-4c45-bd55-a0bfe7e5000c","block_type":"box","text":"By their terms, hybrid securities allow for the omission of scheduled dividends, interest, or principal","page_number":194,"box":{"x":117,"y":301,"width":737,"height":12}},{"id":"47af81fe-64a8-4026-b5be-a5c41ef1d12f","block_type":"box","text":"payments, which can potentially result in impairment if such an omission occurs. Hybrid securities may","page_number":194,"box":{"x":117,"y":317,"width":765,"height":12}},{"id":"281a98ad-405e-4585-b479-53f6dae017f4","block_type":"box","text":"also be subject to contractually allowable write-downs of principal that could result in impairment.","page_number":194,"box":{"x":116,"y":332,"width":724,"height":12}},{"id":"9aafe038-8d7e-48cb-b55e-ed02dbdb55f0","block_type":"box","text":"Together with the hybrid indicator, the long-term obligation rating assigned to a hybrid security is an","page_number":194,"box":{"x":116,"y":348,"width":744,"height":12}},{"id":"b8b066b3-e84e-4212-af93-43760921f534","block_type":"box","text":"expression of the relative credit risk associated with that security.","page_number":194,"box":{"x":116,"y":363,"width":488,"height":12}},{"id":"86d36f04-71b3-4247-a330-ee90df555ac1","block_type":"box","text":"Description of Moody’s Global Short-Term Rating Scale","page_number":194,"box":{"x":117,"y":393,"width":448,"height":12}},{"id":"8ef8aa47-d7ac-4650-a5cb-ac935496f7e8","block_type":"box","text":"P-1 Ratings of Prime-1 reflect a superior ability to repay short-term obligations.","page_number":194,"box":{"x":117,"y":422,"width":667,"height":13}},{"id":"a7190c37-350d-499a-ad0b-b90fac17a5af","block_type":"box","text":"P-2 Ratings of Prime-2 reflect a strong ability to repay short-term obligations.","page_number":194,"box":{"x":117,"y":446,"width":653,"height":12}},{"id":"6e82e656-6dfc-417b-a880-f43b7b1ec8a9","block_type":"box","text":"P-3 Ratings of Prime-3 reflect an acceptable ability to repay short-term obligations.","page_number":194,"box":{"x":117,"y":469,"width":697,"height":12}},{"id":"35ddee6d-8218-470e-8269-08ee2ae61eaa","block_type":"box","text":"NP Issuers (or supporting institutions) rated Not Prime do not fall within any of the Prime","page_number":194,"box":{"x":117,"y":492,"width":741,"height":12}},{"id":"a3126c0a-32d2-4264-a8f3-43a01aa551c0","block_type":"box","text":"rating categories.","page_number":194,"box":{"x":226,"y":508,"width":133,"height":12}},{"id":"ba20a397-3050-407c-84a3-e6fe018b25f5","block_type":"box","text":"Description of Moody’s U.S. Municipal Short-Term Debt and Demand Obligation Ratings","page_number":194,"box":{"x":117,"y":537,"width":707,"height":12}},{"id":"40b2ff0a-34a2-4ab1-8ba8-02864b9c7799","block_type":"box","text":"Description of Moody’s Short-Term Obligation Ratings","page_number":194,"box":{"x":117,"y":567,"width":439,"height":12}},{"id":"4b8522de-e4b2-448c-8428-9029b4cdbf68","block_type":"box","text":"Moody’s uses the global short-term Prime rating scale for commercial paper issued by U.S.","page_number":194,"box":{"x":117,"y":596,"width":681,"height":13}},{"id":"d1343c44-926e-47b6-b6ba-46f7bdbc6491","block_type":"box","text":"municipalities and nonprofits. These commercial paper programs may be backed by external letters of","page_number":194,"box":{"x":117,"y":612,"width":761,"height":12}},{"id":"f29cf369-8d35-4aed-a133-5508c9fcf6c7","block_type":"box","text":"credit or liquidity facilities, or by an issuer’s self-liquidity.","page_number":194,"box":{"x":116,"y":627,"width":420,"height":13}},{"id":"7672652f-2031-496e-b50f-6fd2dffc2d96","block_type":"box","text":"For other short-term municipal obligations, Moody’s uses one of two other short-term rating scales, the","page_number":194,"box":{"x":117,"y":657,"width":765,"height":12}},{"id":"9fbf0d9e-60ca-4468-8fe2-8f135d4907de","block_type":"box","text":"Municipal Investment Grade (“MIG”) and Variable Municipal Investment Grade (“VMIG”) scales","page_number":194,"box":{"x":117,"y":673,"width":703,"height":12}},{"id":"ce6ff9ab-95e4-49f4-b9f3-094736a37ac8","block_type":"box","text":"discussed below.","page_number":194,"box":{"x":116,"y":688,"width":126,"height":10}},{"id":"5fd0b7ab-ca76-4a8b-81d9-1d2dacf2835f","block_type":"box","text":"Moody’s uses the MIG scale for U.S. municipal cash flow notes, bond anticipation notes and certain","page_number":194,"box":{"x":117,"y":718,"width":738,"height":12}},{"id":"0bbeac5f-bf24-4e82-9432-2b2b94aac861","block_type":"box","text":"other short-term obligations, which typically mature in three years or less. Under certain circumstances,","page_number":194,"box":{"x":116,"y":733,"width":766,"height":12}},{"id":"ea2ad34e-7dc6-48ae-ad42-10708311b903","block_type":"box","text":"Moody’s uses the MIG scale for bond anticipation notes with maturities of up to five years.","page_number":194,"box":{"x":117,"y":749,"width":665,"height":12}},{"id":"81e88b11-3f24-48c1-b522-e369478e5cb1","block_type":"box","text":"MIG Scale","page_number":194,"box":{"x":117,"y":778,"width":77,"height":10}},{"id":"774a7145-6482-4d8a-80ff-eb250311afff","block_type":"box","text":"MIG 1 This designation denotes superior credit quality. Excellent protection is afforded by","page_number":194,"box":{"x":117,"y":808,"width":722,"height":12}},{"id":"a47252bb-f74f-44f8-a4d8-99c75a1d5916","block_type":"box","text":"established cash flows, highly reliable liquidity support, or demonstrated broad-based","page_number":194,"box":{"x":226,"y":823,"width":631,"height":12}},{"id":"02c86d1a-e93d-489b-b048-54e4e74b2b7d","block_type":"box","text":"access to the market for refinancing.","page_number":194,"box":{"x":226,"y":839,"width":275,"height":12}},{"id":"59bf56f2-e296-4167-8491-1972837f417c","block_type":"box","text":"MIG 2 This designation denotes strong credit quality. Margins of protection are ample, although","page_number":194,"box":{"x":117,"y":862,"width":771,"height":12}},{"id":"b39d91e7-20a9-4afc-a440-2b9233af4579","block_type":"box","text":"not as large as in the preceding group.","page_number":194,"box":{"x":226,"y":878,"width":291,"height":12}},{"id":"5a435e63-be09-4243-ac9e-40be8347164f","block_type":"box","text":"A-3","page_number":194,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"8c7f1b1b-4ad0-46dd-981a-bab1dfabb043","block_type":"box","text":"NM1026U-6030748-194/260","page_number":194,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"753a0a14-00a9-46d1-841d-d79649a1954d","block_type":"box","text":"MIG 3 This designation denotes acceptable credit quality. Liquidity and cash-flow protection","page_number":195,"box":{"x":117,"y":87,"width":743,"height":12}},{"id":"c2df030c-b6d5-45bc-af6e-13e60b4972ae","block_type":"box","text":"may be narrow, and market access for refinancing is likely to be less well-established.","page_number":195,"box":{"x":226,"y":102,"width":642,"height":13}},{"id":"fa6fad40-c44c-4dd8-92b5-10c80338e8de","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Debt instruments in this","page_number":195,"box":{"x":116,"y":126,"width":723,"height":12}},{"id":"f1f30796-00b1-496c-b906-ff5587486cfe","block_type":"box","text":"category may lack sufficient margins of protection.","page_number":195,"box":{"x":226,"y":141,"width":377,"height":12}},{"id":"168eb500-fc0a-47fc-8887-7603f17f3f50","block_type":"box","text":"Description of Moody’s Demand Obligation Ratings","page_number":195,"box":{"x":117,"y":172,"width":415,"height":12}},{"id":"139c45ff-22f3-4d6e-9389-3f7abb2c5172","block_type":"box","text":"In the case of variable rate demand obligations (“VRDOs”), a two-component rating is assigned. The","page_number":195,"box":{"x":117,"y":203,"width":749,"height":12}},{"id":"8730a517-07f3-4151-9a03-0571292ee62e","block_type":"box","text":"components are a long-term rating and a short-term demand obligation rating. The long-term rating","page_number":195,"box":{"x":116,"y":219,"width":740,"height":12}},{"id":"d9a2d85c-6ecf-4ed9-8b79-d7772256fdff","block_type":"box","text":"addresses the issuer’s ability to meet scheduled principal and interest payments. The short-term","page_number":195,"box":{"x":116,"y":234,"width":719,"height":12}},{"id":"58248335-eba8-4dac-bd2b-81292d37c1a9","block_type":"box","text":"demand obligation rating addresses the ability of the issuer or the liquidity provider to make payments","page_number":195,"box":{"x":116,"y":250,"width":759,"height":12}},{"id":"002331c4-2950-4766-8429-6043a27a27c6","block_type":"box","text":"associated with the purchase-price-upon-demand feature (“demand feature”) of the VRDO. The short","page_number":195,"box":{"x":116,"y":265,"width":756,"height":12}},{"id":"668503e3-c1a4-4d6c-9472-aa2d6d4c1698","block_type":"box","text":"term demand obligation rating uses the VMIG scale. VMIG ratings with liquidity support use as an input","page_number":195,"box":{"x":116,"y":281,"width":770,"height":12}},{"id":"4de1e44d-7982-4342-9809-8519dcee3aa2","block_type":"box","text":"the short-term Counterparty Risk Assessment of the support provider, or the long-term rating of the","page_number":195,"box":{"x":116,"y":296,"width":740,"height":12}},{"id":"8dce1e32-69dc-4c82-bfff-ece972880685","block_type":"box","text":"underlying obligor in the absence of third party liquidity support. Transitions of VMIG ratings of demand","page_number":195,"box":{"x":117,"y":312,"width":768,"height":12}},{"id":"c4f752df-701d-4a66-969b-fea01bf612f2","block_type":"box","text":"obligations with conditional liquidity support differ from transitions on the Prime scale to reflect the risk","page_number":195,"box":{"x":116,"y":327,"width":760,"height":12}},{"id":"33a896b0-ea4e-43a3-a712-cae4c46b1c98","block_type":"box","text":"that external liquidity support will terminate if the issuer’s long-term rating drops below investment","page_number":195,"box":{"x":116,"y":343,"width":729,"height":12}},{"id":"0b08ad67-ba57-495a-a675-c968e3edbb4d","block_type":"box","text":"grade.","page_number":195,"box":{"x":116,"y":358,"width":52,"height":12}},{"id":"fb5ef159-cb8d-4068-ae85-1c453b7fee16","block_type":"box","text":"Moody’s typically assigns the VMIG short-term demand obligation rating if the frequency of the demand","page_number":195,"box":{"x":117,"y":389,"width":771,"height":12}},{"id":"0e4ad776-5b48-4c8c-9995-c654a94d53ce","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":195,"box":{"x":116,"y":405,"width":753,"height":12}},{"id":"78c9d229-981c-4896-acc8-aea44cd31b3a","block_type":"box","text":"but the purchase price is payable only with remarketing proceeds, the short-term demand obligation","page_number":195,"box":{"x":117,"y":420,"width":745,"height":12}},{"id":"760ac891-0531-4e15-961a-374ff46660fc","block_type":"box","text":"rating is “NR”.","page_number":195,"box":{"x":117,"y":436,"width":107,"height":12}},{"id":"c8ec38fa-b9a7-4bb2-9d17-1f5e89b205b7","block_type":"box","text":"VMIG Scale","page_number":195,"box":{"x":116,"y":467,"width":94,"height":9}},{"id":"09df2958-401e-4510-99f2-e1ca2f72c744","block_type":"box","text":"VMIG 1 This designation denotes superior credit quality. Excellent protection is afforded by the","page_number":195,"box":{"x":116,"y":498,"width":756,"height":12}},{"id":"a07b0f32-b67b-4dd5-b95e-27dd1e0c4fae","block_type":"box","text":"superior short-term credit strength of the liquidity provider and structural and legal","page_number":195,"box":{"x":226,"y":513,"width":610,"height":12}},{"id":"21a595d3-8724-4b53-a27c-a767143f0e00","block_type":"box","text":"protections that ensure the timely payment of purchase price upon demand.","page_number":195,"box":{"x":226,"y":529,"width":567,"height":12}},{"id":"cfae1597-99f3-4c9e-bd54-e7f2d60db044","block_type":"box","text":"VMIG 2 This designation denotes strong credit quality. Good protection is afforded by the strong","page_number":195,"box":{"x":116,"y":552,"width":766,"height":12}},{"id":"c35f3cba-04e6-48e8-b2c4-d293ef646faa","block_type":"box","text":"short-term credit strength of the liquidity provider and structural and legal protections","page_number":195,"box":{"x":226,"y":568,"width":632,"height":12}},{"id":"4aa6e01e-dfe3-41dd-92db-675135db77c1","block_type":"box","text":"that ensure the timely payment of purchase price upon demand.","page_number":195,"box":{"x":225,"y":583,"width":481,"height":12}},{"id":"b50b9afc-6007-4172-a6d2-72c4a4de5ffc","block_type":"box","text":"VMIG 3 This designation denotes acceptable credit quality. Adequate protection is afforded by","page_number":195,"box":{"x":116,"y":606,"width":752,"height":12}},{"id":"1db417d2-de3f-4ac6-9146-5153ee209f07","block_type":"box","text":"the satisfactory short-term credit strength of the liquidity provider and structural and","page_number":195,"box":{"x":225,"y":622,"width":624,"height":12}},{"id":"86b7c646-0f24-4036-abba-4b5441886549","block_type":"box","text":"legal protections that ensure the timely payment of purchase price upon demand.","page_number":195,"box":{"x":226,"y":637,"width":607,"height":12}},{"id":"eb10b83a-26b9-48be-b558-5267a398f121","block_type":"box","text":"SG This designation denotes speculative-grade credit quality. Demand features rated in this","page_number":195,"box":{"x":116,"y":661,"width":762,"height":12}},{"id":"ce755c60-eaff-4429-86ed-d3d3cf74a00f","block_type":"box","text":"category may be supported by a liquidity provider that does not have a sufficiently","page_number":195,"box":{"x":226,"y":676,"width":606,"height":12}},{"id":"a0070118-4fcb-4970-b0cf-14e0214989ea","block_type":"box","text":"strong short-term rating or may lack the structural or legal protections necessary to","page_number":195,"box":{"x":226,"y":692,"width":614,"height":12}},{"id":"c18b1654-29da-4911-a5a4-3f6dab973390","block_type":"box","text":"ensure the timely payment of purchase price upon demand.","page_number":195,"box":{"x":226,"y":707,"width":441,"height":12}},{"id":"821ec655-9b29-4007-b417-e852c47ce192","block_type":"box","text":"Description of S&P Global Ratings (“S&P”), a Division of S&P Global Inc., Issue Credit Ratings","page_number":195,"box":{"x":117,"y":738,"width":753,"height":12}},{"id":"9aa031e7-7f7f-451e-87ac-4168fbb3bca9","block_type":"box","text":"An S&P issue credit rating is a forward-looking opinion about the creditworthiness of an obligor with","page_number":195,"box":{"x":116,"y":769,"width":737,"height":12}},{"id":"6d672d7b-52b4-4fb1-a01e-fa57aa1d8207","block_type":"box","text":"respect to a specific financial obligation, a specific class of financial obligations, or a specific financial","page_number":195,"box":{"x":117,"y":785,"width":748,"height":12}},{"id":"cff8af39-1a1b-484c-8cd0-f9002177c069","block_type":"box","text":"program (including ratings on medium-term note programs and commercial paper programs). It takes","page_number":195,"box":{"x":117,"y":800,"width":750,"height":12}},{"id":"df0dd1b8-0187-4d13-a944-4dc412af6c98","block_type":"box","text":"into consideration the creditworthiness of guarantors, insurers, or other forms of credit enhancement","page_number":195,"box":{"x":117,"y":816,"width":744,"height":12}},{"id":"d733d098-02f1-4d88-bead-2528b176826f","block_type":"box","text":"on the obligation and takes into account the currency in which the obligation is denominated. The","page_number":195,"box":{"x":116,"y":831,"width":726,"height":12}},{"id":"39b038a7-5506-4604-94bf-9c32d5911438","block_type":"box","text":"opinion reflects S&P’s view of the obligor’s capacity and willingness to meet its financial commitments","page_number":195,"box":{"x":116,"y":847,"width":759,"height":12}},{"id":"56196e65-010a-4c60-971c-609f05e8d7ca","block_type":"box","text":"as they come due, and this opinion may assess terms, such as collateral security and subordination,","page_number":195,"box":{"x":116,"y":862,"width":750,"height":12}},{"id":"65be4a82-6f39-44b2-8434-8f8aa4b6c390","block_type":"box","text":"which could affect ultimate payment in the event of default.","page_number":195,"box":{"x":116,"y":878,"width":441,"height":12}},{"id":"56340ef3-b398-4d6a-93f3-a794cbbf311c","block_type":"box","text":"A-4","page_number":195,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"5133881b-4522-44cc-a4b6-12c1c07ebf69","block_type":"box","text":"NM1026U-6030748-195/260","page_number":195,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"714d5ca3-2c12-47c5-89aa-f63c66eb0259","block_type":"box","text":"Issue credit ratings can be either long-term or short-term. Short-term issue credit ratings are generally","page_number":196,"box":{"x":117,"y":87,"width":760,"height":12}},{"id":"6c80f814-558b-4c31-b953-9c86fa916595","block_type":"box","text":"assigned to those obligations considered short-term in the relevant market, typically with an original","page_number":196,"box":{"x":116,"y":103,"width":743,"height":12}},{"id":"5fee4e1b-d900-48c8-90ae-a288bb436b46","block_type":"box","text":"maturity of no more than 365 days. Short-term issue credit ratings are also used to indicate the","page_number":196,"box":{"x":117,"y":118,"width":708,"height":12}},{"id":"cbec94e7-69a3-4e03-92c2-ce1db14890a1","block_type":"box","text":"creditworthiness of an obligor with respect to put features on long-term obligations. S&P would typically","page_number":196,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"54ad12cf-d71f-4f39-9ee0-6e997350b5aa","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":196,"box":{"x":116,"y":149,"width":772,"height":12}},{"id":"20a12868-7556-4223-a06a-6f3fe4a453d9","block_type":"box","text":"However, the ratings S&P assigns to certain instruments may diverge from these guidelines based on","page_number":196,"box":{"x":117,"y":165,"width":758,"height":12}},{"id":"1b2cf360-3c83-4e4d-9677-bf8b1479b1dd","block_type":"box","text":"market practices. Medium-term notes are assigned long-term ratings.","page_number":196,"box":{"x":117,"y":180,"width":518,"height":12}},{"id":"a7c00d94-3ac6-4cf0-99e4-fead7e50b295","block_type":"box","text":"Issue credit ratings are based, in varying degrees, on S&P’s analysis of the following considerations:","page_number":196,"box":{"x":117,"y":208,"width":750,"height":12}},{"id":"5f5ab0e0-51ea-49a5-ae7a-556de52c5588","block_type":"box","text":"• The likelihood of payment — the capacity and willingness of the obligor to meet its financial","page_number":196,"box":{"x":117,"y":237,"width":714,"height":12}},{"id":"e563017f-05f8-4875-9916-4e2d26901ce0","block_type":"box","text":"commitments on an obligation in accordance with the terms of the obligation;","page_number":196,"box":{"x":150,"y":252,"width":575,"height":12}},{"id":"135e486c-e1be-464b-9867-b662e2bad78d","block_type":"box","text":"• The nature and provisions of the financial obligation, and the promise S&P imputes; and","page_number":196,"box":{"x":117,"y":274,"width":691,"height":12}},{"id":"29c4e1ea-7033-4fcb-a366-480daf751f9a","block_type":"box","text":"• The protection afforded by, and relative position of, the financial obligation in the event of a","page_number":196,"box":{"x":117,"y":296,"width":712,"height":12}},{"id":"df028cc6-51be-41d3-a0b3-689f6b7f9ab3","block_type":"box","text":"bankruptcy, reorganization, or other arrangement under the laws of bankruptcy and other laws","page_number":196,"box":{"x":150,"y":312,"width":704,"height":12}},{"id":"329229e4-f999-482c-a00d-2cbd6d5e0650","block_type":"box","text":"affecting creditors’ rights.","page_number":196,"box":{"x":150,"y":327,"width":191,"height":12}},{"id":"a0a5c4a4-a4c0-43de-b59d-788f7baad2c5","block_type":"box","text":"An issue rating is an assessment of default risk but may incorporate an assessment of relative seniority","page_number":196,"box":{"x":116,"y":355,"width":772,"height":13}},{"id":"2bab327c-065a-42cb-8607-246002c8762d","block_type":"box","text":"or ultimate recovery in the event of default. Junior obligations are typically rated lower than senior","page_number":196,"box":{"x":116,"y":371,"width":728,"height":12}},{"id":"29d6ef8d-f541-4056-bdbc-197db899e155","block_type":"box","text":"obligations, to reflect lower priority in bankruptcy, as noted above. (Such differentiation may apply","page_number":196,"box":{"x":116,"y":386,"width":729,"height":13}},{"id":"430e4dcb-687b-42bc-bd8e-03b472a69666","block_type":"box","text":"when an entity has both senior and subordinated obligations, secured and unsecured obligations, or","page_number":196,"box":{"x":116,"y":402,"width":747,"height":12}},{"id":"7440f3c8-01fe-41f0-be7d-28dfc302e0e6","block_type":"box","text":"operating company and holding company obligations.)","page_number":196,"box":{"x":116,"y":417,"width":407,"height":13}},{"id":"f8050c32-74fb-4f19-a524-5d5b8c8fbce6","block_type":"box","text":"Long-Term Issue Credit Ratings*","page_number":196,"box":{"x":117,"y":446,"width":265,"height":12}},{"id":"3139b9f2-d9f3-4e43-8469-fe6eb73be48d","block_type":"box","text":"AAA An obligation rated ‘AAA’ has the highest rating assigned by S&P. The obligor’s capacity","page_number":196,"box":{"x":116,"y":474,"width":770,"height":12}},{"id":"7590b501-7ad2-42b2-a599-1ee83a7b0f83","block_type":"box","text":"to meet its financial commitments on the obligation is extremely strong.","page_number":196,"box":{"x":225,"y":490,"width":533,"height":12}},{"id":"41c8bcde-0534-4350-a22e-df04af0e5331","block_type":"box","text":"AA An obligation rated ‘AA’ differs from the highest-rated obligations only to a small degree.","page_number":196,"box":{"x":116,"y":513,"width":768,"height":12}},{"id":"d2f9aad6-f6b3-4766-9b6f-fe8a9f6c6ac3","block_type":"box","text":"The obligor’s capacity to meet its financial commitments on the obligation is very strong.","page_number":196,"box":{"x":225,"y":528,"width":659,"height":13}},{"id":"f83c2f46-8a09-4ab2-8902-89129537e2e9","block_type":"box","text":"A An obligation rated ‘A’ is somewhat more susceptible to the adverse effects of changes","page_number":196,"box":{"x":116,"y":552,"width":760,"height":12}},{"id":"5b849bfd-5c6c-4fea-bc0b-b0fccddefc88","block_type":"box","text":"in circumstances and economic conditions than obligations in higher-rated categories.","page_number":196,"box":{"x":226,"y":567,"width":642,"height":12}},{"id":"3e84290d-5d7e-4b73-9390-cdd7b6a1ccc8","block_type":"box","text":"However, the obligor’s capacity to meet its financial commitments on the obligation is","page_number":196,"box":{"x":226,"y":583,"width":635,"height":12}},{"id":"25bf85b7-866a-450e-8b6c-7682f733f5d7","block_type":"box","text":"still strong.","page_number":196,"box":{"x":226,"y":598,"width":84,"height":12}},{"id":"fc12d9bb-bf53-4377-a307-8b4edbd8e3da","block_type":"box","text":"BBB An obligation rated ‘BBB’ exhibits adequate protection parameters. However, adverse","page_number":196,"box":{"x":117,"y":621,"width":749,"height":13}},{"id":"0b595cff-ac89-4cd9-92f4-c8fa5e97b229","block_type":"box","text":"economic conditions or changing circumstances are more likely to weaken the obligor’s","page_number":196,"box":{"x":226,"y":637,"width":652,"height":12}},{"id":"33cc4693-62f1-4528-93e4-6df266314c1e","block_type":"box","text":"capacity to meet its financial commitments on the obligation.","page_number":196,"box":{"x":226,"y":652,"width":452,"height":13}},{"id":"bd85a857-652a-4ea7-924a-d84bc90653c2","block_type":"box","text":"BB, B,","page_number":196,"box":{"x":117,"y":676,"width":45,"height":11}},{"id":"c2c85839-2ff5-4330-8038-669028b06041","block_type":"box","text":"CCC, CC,","page_number":196,"box":{"x":117,"y":691,"width":72,"height":11}},{"id":"eb726a1c-ddba-4197-978c-86260ff11b5a","block_type":"box","text":"and C","page_number":196,"box":{"x":116,"y":707,"width":44,"height":9}},{"id":"9eafad2b-baf4-49b3-9818-8506d5d8df59","block_type":"box","text":"Obligations rated ‘BB’, ‘B’, ‘CCC’, ‘CC’, and ‘C’ are regarded as having significant","page_number":196,"box":{"x":226,"y":676,"width":602,"height":12}},{"id":"4a67447c-5292-4475-becb-3ffef9ec4659","block_type":"box","text":"speculative characteristics. ‘BB’ indicates the least degree of speculation and ‘C’ the","page_number":196,"box":{"x":226,"y":691,"width":624,"height":12}},{"id":"5f6b24fb-0586-419d-9033-d21d3894a67a","block_type":"box","text":"highest. While such obligations will likely have some quality and protective","page_number":196,"box":{"x":226,"y":707,"width":550,"height":12}},{"id":"d2a276a7-2f68-422d-92c0-33fe31947cf8","block_type":"box","text":"characteristics, these may be outweighed by large uncertainties or major exposure to","page_number":196,"box":{"x":226,"y":722,"width":631,"height":12}},{"id":"9e6e029a-0df9-4536-9987-71f2fc19f8ac","block_type":"box","text":"adverse conditions.","page_number":196,"box":{"x":226,"y":738,"width":143,"height":9}},{"id":"157fdd81-46a6-4d6a-bb6c-f5d9f645893b","block_type":"box","text":"BB An obligation rated ‘BB’ is less vulnerable to nonpayment than other speculative issues.","page_number":196,"box":{"x":117,"y":761,"width":758,"height":12}},{"id":"b5df368c-685e-4544-aa2b-fc036a3346af","block_type":"box","text":"However, it faces major ongoing uncertainties or exposure to adverse business,","page_number":196,"box":{"x":226,"y":776,"width":591,"height":13}},{"id":"32c8430d-f2a0-40b7-a525-343b9de8a5fe","block_type":"box","text":"financial, or economic conditions that could lead to the obligor’s inadequate capacity to","page_number":196,"box":{"x":225,"y":792,"width":644,"height":12}},{"id":"0f4a1ed5-935f-45ce-aaee-90392aad3821","block_type":"box","text":"meet its financial commitments on the obligation.","page_number":196,"box":{"x":226,"y":807,"width":361,"height":13}},{"id":"187f5fac-28a7-47ba-9a6d-7fc28add5cdd","block_type":"box","text":"B An obligation rated ‘B’ is more vulnerable to nonpayment than obligations rated ‘BB’, but","page_number":196,"box":{"x":117,"y":831,"width":767,"height":12}},{"id":"d5d21efd-6cb1-4d43-9f6b-465d994d56a5","block_type":"box","text":"the obligor currently has the capacity to meet its financial commitments on the","page_number":196,"box":{"x":225,"y":846,"width":584,"height":12}},{"id":"cc66949b-e35f-40a6-b8a2-f93205985c04","block_type":"box","text":"obligation. Adverse business, financial, or economic conditions will likely impair the","page_number":196,"box":{"x":226,"y":862,"width":619,"height":12}},{"id":"d734804c-7259-4679-b32f-61716ad54104","block_type":"box","text":"obligor’s capacity or willingness to meet its financial commitments on the obligation.","page_number":196,"box":{"x":226,"y":877,"width":625,"height":12}},{"id":"f606b5dc-e836-4cf1-b5ff-164fe07c516f","block_type":"box","text":"A-5","page_number":196,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"170db6a8-b659-437e-aa3e-299ab23f93e5","block_type":"box","text":"NM1026U-6030748-196/260","page_number":196,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"bd599106-dac8-4f2c-af78-e3b1d0d59c3e","block_type":"box","text":"CCC An obligation rated ‘CCC’ is currently vulnerable to nonpayment and is dependent upon","page_number":197,"box":{"x":117,"y":87,"width":762,"height":12}},{"id":"5681d8d3-014f-4fb0-a473-8a8d5fb28cc7","block_type":"box","text":"favorable business, financial, and economic conditions for the obligor to meet its","page_number":197,"box":{"x":225,"y":102,"width":601,"height":13}},{"id":"a42e2c6e-678f-4723-aeef-e279a871415c","block_type":"box","text":"financial commitments on the obligation. In the event of adverse business, financial, or","page_number":197,"box":{"x":225,"y":118,"width":647,"height":12}},{"id":"394a451b-ac88-4f0f-a16d-43f36d44e973","block_type":"box","text":"economic conditions, the obligor is not likely to have the capacity to meet its financial","page_number":197,"box":{"x":226,"y":134,"width":634,"height":12}},{"id":"d1901c96-4fdf-4538-b454-7fe9bedc2a9d","block_type":"box","text":"commitments on the obligation.","page_number":197,"box":{"x":226,"y":149,"width":237,"height":12}},{"id":"fbfbbaea-daea-4ca8-8a25-8999eab95b2d","block_type":"box","text":"CC An obligation rated ‘CC’ is currently highly vulnerable to nonpayment. The ‘CC’ rating is","page_number":197,"box":{"x":117,"y":172,"width":761,"height":12}},{"id":"537a4be0-9ce5-4fec-9ef9-108425d0f7b3","block_type":"box","text":"used when a default has not yet occurred but S&P expects default to be a virtual","page_number":197,"box":{"x":226,"y":188,"width":602,"height":12}},{"id":"fea1f953-b251-4129-a97e-73dc5407b534","block_type":"box","text":"certainty, regardless of the anticipated time to default.","page_number":197,"box":{"x":226,"y":203,"width":404,"height":12}},{"id":"3a860aa1-8229-4adf-b15f-432b27401317","block_type":"box","text":"C An obligation rated ‘C’ is currently highly vulnerable to nonpayment, and the obligation is","page_number":197,"box":{"x":117,"y":227,"width":769,"height":12}},{"id":"4b7c3dd2-16f0-438f-ac5f-0045c8589fe4","block_type":"box","text":"expected to have lower relative seniority or lower ultimate recovery compared with","page_number":197,"box":{"x":226,"y":242,"width":615,"height":12}},{"id":"015b7802-d99e-4199-94bf-40beed06741a","block_type":"box","text":"obligations that are rated higher.","page_number":197,"box":{"x":226,"y":258,"width":245,"height":12}},{"id":"f54632a7-6aa8-49d7-9d54-696ecc8db6b5","block_type":"box","text":"D An obligation rated ‘D’ is in default or in breach of an imputed promise. For non-hybrid","page_number":197,"box":{"x":117,"y":281,"width":751,"height":12}},{"id":"8858fd53-2406-4c89-bae9-6e2f12656729","block_type":"box","text":"capital instruments, the ‘D’ rating category is used when payments on an obligation are","page_number":197,"box":{"x":226,"y":296,"width":650,"height":12}},{"id":"70a73bd5-3871-47db-bdcd-611804e37012","block_type":"box","text":"not made on the date due, unless S&P believes that such payments will be made within","page_number":197,"box":{"x":226,"y":312,"width":655,"height":12}},{"id":"2e37ec8a-f2c9-4bb6-a719-497df64c5450","block_type":"box","text":"five business days in the absence of a stated grace period or within the earlier of the","page_number":197,"box":{"x":225,"y":327,"width":632,"height":12}},{"id":"c766aedb-4277-4ebd-ace0-5eb62ea570ab","block_type":"box","text":"stated grace period or 30 calendar days. The ‘D’ rating also will be used upon the filing","page_number":197,"box":{"x":226,"y":343,"width":647,"height":12}},{"id":"c620d58f-fb8f-4a41-a4ef-44ce5d3b9b43","block_type":"box","text":"of a bankruptcy petition or the taking of similar action and where default on an obligation","page_number":197,"box":{"x":226,"y":358,"width":659,"height":12}},{"id":"49c363d8-dbc9-4861-b5d0-51662acb10e6","block_type":"box","text":"is a virtual certainty, for example due to automatic stay provisions. A rating on an","page_number":197,"box":{"x":226,"y":374,"width":605,"height":12}},{"id":"6c2c0e6d-0bc5-43bc-b0a0-a5f378152963","block_type":"box","text":"obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":197,"box":{"x":226,"y":389,"width":555,"height":12}},{"id":"429e211d-a523-444b-bc77-de8671f5772a","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":197,"box":{"x":143,"y":420,"width":705,"height":9}},{"id":"b5e0ad16-f623-403f-9fd3-d1d7af5018cb","block_type":"box","text":"within the rating categories.","page_number":197,"box":{"x":170,"y":433,"width":162,"height":9}},{"id":"623d37ea-2c86-41ef-ab5c-7466a4969ff9","block_type":"box","text":"Short-Term Issue Credit Ratings","page_number":197,"box":{"x":116,"y":462,"width":263,"height":12}},{"id":"87b73bf9-6e61-4b2c-8bf9-a5fea9a0113b","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":197,"box":{"x":116,"y":493,"width":765,"height":12}},{"id":"3f045d81-dfbc-4013-830e-a25292fb2a3e","block_type":"box","text":"capacity to meet its financial commitments on the obligation is strong. Within this","page_number":197,"box":{"x":226,"y":508,"width":603,"height":12}},{"id":"2c90856c-101d-42cb-b21d-428e6163a2a2","block_type":"box","text":"category, certain obligations are designated with a plus sign (+). This indicates that the","page_number":197,"box":{"x":226,"y":524,"width":648,"height":12}},{"id":"6cf94aa3-497e-4eee-880b-34a3febdc887","block_type":"box","text":"obligor’s capacity to meet its financial commitments on these obligations is extremely","page_number":197,"box":{"x":226,"y":539,"width":635,"height":12}},{"id":"8ccebefb-e413-451b-a3d3-656f0a22565f","block_type":"box","text":"strong.","page_number":197,"box":{"x":226,"y":555,"width":55,"height":12}},{"id":"8b4480c2-9ec6-4eea-a597-0acef9e817db","block_type":"box","text":"A-2 A short-term obligation rated ‘A-2’ is somewhat more susceptible to the adverse effects","page_number":197,"box":{"x":116,"y":578,"width":760,"height":12}},{"id":"5f659d66-2be3-4f26-8b9e-0345ae14af93","block_type":"box","text":"of changes in circumstances and economic conditions than obligations in higher rating","page_number":197,"box":{"x":226,"y":593,"width":644,"height":13}},{"id":"8547d3f9-36eb-43e9-b04a-ecddfaba400b","block_type":"box","text":"categories. However, the obligor’s capacity to meet its financial commitments on the","page_number":197,"box":{"x":226,"y":609,"width":629,"height":12}},{"id":"1d06452d-4d12-46b1-b070-087eb6120508","block_type":"box","text":"obligation is satisfactory.","page_number":197,"box":{"x":226,"y":624,"width":187,"height":13}},{"id":"42482377-1988-4882-83a7-6976732051c4","block_type":"box","text":"A-3 A short-term obligation rated ‘A-3’ exhibits adequate protection parameters. However,","page_number":197,"box":{"x":116,"y":648,"width":750,"height":12}},{"id":"3dac21ab-ecbd-4d1c-996b-c0057cb663dc","block_type":"box","text":"adverse economic conditions or changing circumstances are more likely to weaken an","page_number":197,"box":{"x":226,"y":663,"width":639,"height":12}},{"id":"9785c7ef-9445-4fa4-9416-f23d163c820a","block_type":"box","text":"obligor’s capacity to meet its financial commitments on the obligation.","page_number":197,"box":{"x":226,"y":679,"width":513,"height":12}},{"id":"af3a678f-cc0b-4e39-b83d-5325ec8d0a5c","block_type":"box","text":"B A short-term obligation rated ‘B’ is regarded as vulnerable and has significant","page_number":197,"box":{"x":117,"y":702,"width":681,"height":12}},{"id":"a09b4f7a-8e8c-4fd9-a18b-10148cec4fcd","block_type":"box","text":"speculative characteristics. The obligor currently has the capacity to meet its financial","page_number":197,"box":{"x":226,"y":717,"width":632,"height":13}},{"id":"7f0c3df9-df96-4cb7-a1f0-69766025977c","block_type":"box","text":"commitments; however, it faces major ongoing uncertainties that could lead to the","page_number":197,"box":{"x":226,"y":733,"width":607,"height":12}},{"id":"d57f9055-0991-40d9-a52a-f64f701909ef","block_type":"box","text":"obligor’s inadequate capacity to meet its financial commitments.","page_number":197,"box":{"x":226,"y":748,"width":473,"height":13}},{"id":"72eaa03d-d804-4a7c-898c-436f4f9d8181","block_type":"box","text":"C A short-term obligation rated ‘C’ is currently vulnerable to nonpayment and is dependent","page_number":197,"box":{"x":117,"y":772,"width":763,"height":12}},{"id":"28fdc6d3-0c0a-44cc-9eb5-06d5aac20cd5","block_type":"box","text":"upon favorable business, financial, and economic conditions for the obligor to meet its","page_number":197,"box":{"x":226,"y":787,"width":636,"height":12}},{"id":"d27aa533-a58a-479d-82bb-de2e8690ee3b","block_type":"box","text":"financial commitments on the obligation.","page_number":197,"box":{"x":225,"y":803,"width":298,"height":12}},{"id":"b36d99a3-12d6-401e-bb76-02e19028bfb0","block_type":"box","text":"A-6","page_number":197,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"e6367914-6be5-40b3-8e15-aab1dd85c00b","block_type":"box","text":"NM1026U-6030748-197/260","page_number":197,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0fa326b2-0a30-41ca-99e1-7b7641d57cbd","block_type":"box","text":"D A short-term obligation rated ‘D’ is in default or in breach of an imputed promise. For","page_number":198,"box":{"x":117,"y":87,"width":739,"height":12}},{"id":"0f116557-e6be-4165-a034-dc5ad317cf27","block_type":"box","text":"non-hybrid capital instruments, the ‘D’ rating category is used when payments on an","page_number":198,"box":{"x":226,"y":102,"width":629,"height":13}},{"id":"1c99d85a-c983-4769-aef8-dab3ee3eba9c","block_type":"box","text":"obligation are not made on the date due, unless S&P believes that such payments will","page_number":198,"box":{"x":226,"y":118,"width":643,"height":12}},{"id":"78c7b053-63b8-44a4-b268-63427a52ec1c","block_type":"box","text":"be made within any stated grace period. However, any stated grace period longer than","page_number":198,"box":{"x":226,"y":134,"width":648,"height":12}},{"id":"ff0d8eea-d229-4c2d-9f3e-59ffcec88f42","block_type":"box","text":"five business days will be treated as five business days. The ‘D’ rating also will be used","page_number":198,"box":{"x":225,"y":149,"width":653,"height":12}},{"id":"44b6588e-2e1c-42fc-b897-5c63be1ba5c9","block_type":"box","text":"upon the filing of a bankruptcy petition or the taking of a similar action and where default","page_number":198,"box":{"x":226,"y":165,"width":659,"height":12}},{"id":"c7b3fe83-32f5-45d3-9038-2bb6c08e36b6","block_type":"box","text":"on an obligation is a virtual certainty, for example due to automatic stay provisions. A","page_number":198,"box":{"x":226,"y":180,"width":635,"height":12}},{"id":"7f20fbe6-2e9a-49eb-a277-8c0ebc4d1e18","block_type":"box","text":"rating on an obligation is lowered to ‘D’ if it is subject to a distressed debt restructuring.","page_number":198,"box":{"x":226,"y":196,"width":648,"height":12}},{"id":"1dcd75a8-85aa-496f-b6de-216a636cbc80","block_type":"box","text":"Description of S&P’s Municipal Short-Term Note Ratings","page_number":198,"box":{"x":117,"y":227,"width":456,"height":12}},{"id":"a5735153-fb19-4b72-b56c-4d380f2fdb22","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":198,"box":{"x":116,"y":258,"width":766,"height":12}},{"id":"76073fb8-48d8-4948-a78e-a83fba9950e2","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":198,"box":{"x":117,"y":273,"width":748,"height":12}},{"id":"dd390adf-ebc8-4df6-95de-f4722f6ed000","block_type":"box","text":"an original maturity of more than three years will most likely receive a long-term debt rating. In","page_number":198,"box":{"x":116,"y":289,"width":703,"height":12}},{"id":"cefbb709-678d-43a6-9442-0ad2b7ce1fb9","block_type":"box","text":"determining which type of rating, if any, to assign, S&P’s analysis will review the following","page_number":198,"box":{"x":116,"y":304,"width":668,"height":12}},{"id":"5357a497-77bf-4d04-83c1-d8aacb0569cc","block_type":"box","text":"considerations:","page_number":198,"box":{"x":116,"y":320,"width":118,"height":9}},{"id":"a4700abe-858f-4bd2-a63f-f25f56c36077","block_type":"box","text":"• Amortization schedule — the larger the final maturity relative to other maturities, the more likely it","page_number":198,"box":{"x":125,"y":351,"width":750,"height":12}},{"id":"09957bb8-5b91-4330-a701-5da7ff93a1d7","block_type":"box","text":"will be treated as a note; and","page_number":198,"box":{"x":149,"y":366,"width":220,"height":11}},{"id":"ba8f5200-a192-41a8-a33f-57b89ba80bc9","block_type":"box","text":"• Source of payment — the more dependent the issue is on the market for its refinancing, the more","page_number":198,"box":{"x":125,"y":389,"width":753,"height":12}},{"id":"7d20b5b7-03c8-41b1-9db6-1afbed9917b9","block_type":"box","text":"likely it will be treated as a note.","page_number":198,"box":{"x":150,"y":405,"width":242,"height":12}},{"id":"ddb2af16-0e24-46f6-8ddc-6e5bd7170247","block_type":"box","text":"S&P’s municipal short-term note rating symbols are as follows:","page_number":198,"box":{"x":116,"y":436,"width":470,"height":12}},{"id":"7c8e720f-d599-4257-a8dd-603f7cc06734","block_type":"box","text":"SP-1 Strong capacity to pay principal and interest. An issue determined to possess a very","page_number":198,"box":{"x":116,"y":467,"width":739,"height":12}},{"id":"5ab2b8fd-f320-47c9-ae07-0a77b42b0766","block_type":"box","text":"strong capacity to pay debt service is given a plus (+) designation.","page_number":198,"box":{"x":226,"y":482,"width":496,"height":12}},{"id":"fc406f85-b2bf-4143-af78-37c9462bf0b8","block_type":"box","text":"SP-2 Satisfactory capacity to pay principal and interest, with some vulnerability to adverse","page_number":198,"box":{"x":116,"y":506,"width":741,"height":12}},{"id":"2d3bc0c6-4519-4cba-af9b-e3266e101ac3","block_type":"box","text":"financial and economic changes over the term of the notes.","page_number":198,"box":{"x":225,"y":521,"width":446,"height":12}},{"id":"60a0e0eb-4c4f-4a7d-995f-83287765a818","block_type":"box","text":"SP-3 Speculative capacity to pay principal and interest.","page_number":198,"box":{"x":116,"y":544,"width":482,"height":12}},{"id":"1d49a7f4-504c-4207-bb52-f87ac851a263","block_type":"box","text":"D ‘D’ is assigned upon failure to pay the note when due, completion of a distressed debt","page_number":198,"box":{"x":117,"y":568,"width":750,"height":12}},{"id":"14892950-f147-4eba-9919-0b853654bd70","block_type":"box","text":"restructuring, or the filing of a bankruptcy petition or the taking of similar action and","page_number":198,"box":{"x":226,"y":583,"width":620,"height":12}},{"id":"ce9714b8-ebb8-4177-b90c-31b144a62b79","block_type":"box","text":"where default on an obligation is a virtual certainty, for example due to automatic stay","page_number":198,"box":{"x":225,"y":599,"width":640,"height":12}},{"id":"888d745e-4a33-4352-8f31-852c13e0369e","block_type":"box","text":"provisions.","page_number":198,"box":{"x":226,"y":614,"width":84,"height":12}},{"id":"2daade23-fb71-4f4f-a50d-feb914e10f9e","block_type":"box","text":"Description of Fitch Ratings’ (“Fitch’s”) Credit Ratings Scales","page_number":198,"box":{"x":117,"y":645,"width":498,"height":12}},{"id":"47b63e12-e331-4ed1-8f90-629642bb5680","block_type":"box","text":"Fitch Ratings publishes opinions on a variety of scales. The most common of these are credit ratings,","page_number":198,"box":{"x":117,"y":676,"width":750,"height":12}},{"id":"e82aa387-b9ec-47e7-9e87-bb6b9b279c51","block_type":"box","text":"but the agency also publishes ratings, scores and other relative opinions relating to financial or","page_number":198,"box":{"x":117,"y":692,"width":701,"height":12}},{"id":"e276370c-5719-405b-803b-59769600937b","block_type":"box","text":"operational strength. For example, Fitch also provides specialized ratings of servicers of residential","page_number":198,"box":{"x":116,"y":707,"width":734,"height":12}},{"id":"62474abf-1364-4e6d-9f2d-fc5baa1fbccf","block_type":"box","text":"and commercial mortgages, asset managers and funds. In each case, users should refer to the","page_number":198,"box":{"x":116,"y":723,"width":706,"height":12}},{"id":"63b381f8-b4ed-423d-b0f1-b0fe6901a93a","block_type":"box","text":"definitions of each individual scale for guidance on the dimensions of risk covered in each assessment.","page_number":198,"box":{"x":116,"y":738,"width":763,"height":12}},{"id":"bfa551af-6c80-45b8-b9ad-8a5a12e0a44d","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":198,"box":{"x":117,"y":769,"width":702,"height":12}},{"id":"b1edf092-9714-4ff7-a0f4-749b98d692aa","block_type":"box","text":"financial commitments, such as interest, preferred dividends, repayment of principal, insurance claims","page_number":198,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"c41909a4-681b-4cda-9104-c9e3bddddfda","block_type":"box","text":"or counterparty obligations. Credit ratings relating to securities and obligations of an issuer can include","page_number":198,"box":{"x":116,"y":800,"width":761,"height":12}},{"id":"141dd86d-f9b9-45be-bb90-9009ea20d4a5","block_type":"box","text":"a recovery expectation. Credit ratings are used by investors as indications of the likelihood of receiving","page_number":198,"box":{"x":116,"y":816,"width":761,"height":12}},{"id":"fb2d641f-00ae-4844-8b59-b9bd3591603c","block_type":"box","text":"the money owed to them in accordance with the terms on which they invested. The agency’s credit","page_number":198,"box":{"x":116,"y":831,"width":738,"height":12}},{"id":"87fff10a-9088-469d-89f1-21c759928c33","block_type":"box","text":"ratings cover the global spectrum of corporate, sovereign financial, bank, insurance, and public finance","page_number":198,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"5fcdaaa7-234e-4fad-a2ce-d178d423b781","block_type":"box","text":"entities (including supranational and sub-national entities) and the securities or other obligations they","page_number":198,"box":{"x":116,"y":862,"width":754,"height":12}},{"id":"85d6f9d2-8c29-43a0-a7ee-d129ceef960a","block_type":"box","text":"issue, as well as structured finance securities backed by receivables or other financial assets.","page_number":198,"box":{"x":117,"y":878,"width":698,"height":12}},{"id":"4a505a96-0d6a-4b55-a34c-82acfc2ab24c","block_type":"box","text":"A-7","page_number":198,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"2e37da8e-86fc-4023-88cd-34f6c792e3f2","block_type":"box","text":"NM1026U-6030748-198/260","page_number":198,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"83b63094-878b-4e3f-bee2-1de218095e45","block_type":"box","text":"The terms “investment grade” and “speculative grade” have established themselves over time as","page_number":199,"box":{"x":116,"y":87,"width":723,"height":12}},{"id":"9b901c4a-0ed5-4720-a84a-a4cae57d5076","block_type":"box","text":"shorthand to describe the categories ‘AAA’ to ‘BBB’ (investment grade) and ‘BB’ to ‘D’ (speculative","page_number":199,"box":{"x":116,"y":102,"width":737,"height":13}},{"id":"62329fc2-b1a3-4d70-be68-9563e508731a","block_type":"box","text":"grade). The terms investment grade and speculative grade are market conventions and do not imply","page_number":199,"box":{"x":116,"y":118,"width":749,"height":12}},{"id":"26ef2cb3-9a40-4e8c-915d-78135dbd4bb3","block_type":"box","text":"any recommendation or endorsement of a specific security for investment purposes. Investment grade","page_number":199,"box":{"x":116,"y":134,"width":764,"height":12}},{"id":"0e189045-6c1d-4f59-a3b9-20de24e42bdb","block_type":"box","text":"categories indicate relatively low to moderate credit risk, while ratings in the speculative categories","page_number":199,"box":{"x":116,"y":149,"width":737,"height":12}},{"id":"ce4f236a-8679-4783-9ccc-3f16abcaa398","block_type":"box","text":"either signal a higher level of credit risk or that a default has already occurred.","page_number":199,"box":{"x":116,"y":165,"width":584,"height":12}},{"id":"23a1df72-90b2-4cff-83b9-8034cc6eb4ac","block_type":"box","text":"For the convenience of investors, Fitch may also include issues relating to a rated issuer that are not","page_number":199,"box":{"x":117,"y":196,"width":750,"height":12}},{"id":"fa88e675-245b-4b8a-b20c-bac02e271600","block_type":"box","text":"and have not been rated on its web page. Such issues are also denoted as ‘NR’.","page_number":199,"box":{"x":116,"y":211,"width":603,"height":12}},{"id":"ebbd89df-52d9-4bc9-a77b-3b3467e8c38f","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":199,"box":{"x":117,"y":242,"width":770,"height":12}},{"id":"5477f679-6841-489a-af8d-e5f4c2e96d10","block_type":"box","text":"and are not predictive of a specific frequency of default or loss. For information about the historical","page_number":199,"box":{"x":116,"y":258,"width":735,"height":12}},{"id":"68f3579c-a5cc-4bc0-815a-d7f6b8448951","block_type":"box","text":"performance of ratings please refer to Fitch’s Ratings Transition and Default studies which detail the","page_number":199,"box":{"x":117,"y":273,"width":747,"height":12}},{"id":"3bd73171-d7d5-48e7-83f0-6432522da977","block_type":"box","text":"historical default rates and their meaning. The European Securities and Markets Authority also","page_number":199,"box":{"x":117,"y":289,"width":705,"height":12}},{"id":"d9eb95b2-00ed-4336-bf4d-7cdcd485df6a","block_type":"box","text":"maintains a central repository of historical default rates.","page_number":199,"box":{"x":117,"y":304,"width":415,"height":12}},{"id":"31ef52d2-67e4-4aa8-af3a-23ade96fb5e0","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":199,"box":{"x":117,"y":335,"width":756,"height":12}},{"id":"ac6e57c5-ca9c-4d43-8808-7d3d7433e548","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":199,"box":{"x":116,"y":351,"width":747,"height":12}},{"id":"7862e2a3-a280-4236-87a1-827536dd75cb","block_type":"box","text":"and other market considerations. However, in terms of payment obligation on the rated liability, market","page_number":199,"box":{"x":116,"y":366,"width":765,"height":12}},{"id":"ba7b0a4c-8343-4c88-8b6e-d07a56cf7ded","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":199,"box":{"x":117,"y":382,"width":674,"height":12}},{"id":"87fe6ab6-98e3-41b2-83db-a4edee89e950","block_type":"box","text":"commitment.","page_number":199,"box":{"x":116,"y":397,"width":101,"height":10}},{"id":"2a014766-d503-4bd5-a087-7a79e3b28bf2","block_type":"box","text":"Ratings nonetheless do not reflect market risk to the extent that they influence the size or other","page_number":199,"box":{"x":117,"y":428,"width":709,"height":12}},{"id":"f24459dd-49bf-4252-bb63-75669f632642","block_type":"box","text":"conditionality of the obligation to pay upon a commitment (for example, in the case of index-linked","page_number":199,"box":{"x":116,"y":444,"width":731,"height":12}},{"id":"007a3cd3-6ff9-43be-abcc-6597b64b57fe","block_type":"box","text":"bonds).","page_number":199,"box":{"x":117,"y":459,"width":59,"height":12}},{"id":"1006213a-7d0a-40c8-b5c2-a4207610b553","block_type":"box","text":"In the default components of ratings assigned to individual obligations or instruments, the agency","page_number":199,"box":{"x":117,"y":490,"width":725,"height":12}},{"id":"bcc7a5d8-3fbb-40dc-8e6c-4b339ddb23a8","block_type":"box","text":"typically rates to the likelihood of non-payment or default in accordance with the terms of that","page_number":199,"box":{"x":116,"y":506,"width":695,"height":12}},{"id":"f80bb3b4-e451-43c2-b727-aed878f5bb6c","block_type":"box","text":"instrument’s documentation. In limited cases, Fitch may include additional considerations (","page_number":199,"box":{"x":117,"y":521,"width":670,"height":12}},{"id":"2677c071-4847-4a92-9d24-bd6682e0185c","block_type":"box","text":"i.e.","page_number":199,"box":{"x":788,"y":521,"width":20,"height":10}},{"id":"8d8c8585-b7a6-47c1-a929-30f2f162e60c","block_type":"box","text":"rate to a","page_number":199,"box":{"x":810,"y":521,"width":71,"height":10}},{"id":"2b9eecb9-b016-4c0e-85f4-4590afb9c45b","block_type":"box","text":"higher or lower standard than that implied in the obligation’s documentation).","page_number":199,"box":{"x":117,"y":537,"width":573,"height":12}},{"id":"663ad3be-ab02-4478-b9d0-0069fb6088c1","block_type":"box","text":"The primary credit rating scales can be used to provide a rating of privately issued obligations or","page_number":199,"box":{"x":116,"y":568,"width":719,"height":12}},{"id":"67ca2624-4f1a-4649-857b-5b1b76803637","block_type":"box","text":"certain note issuance programs or for private ratings. In this case the rating is not published, but only","page_number":199,"box":{"x":116,"y":583,"width":753,"height":12}},{"id":"ead2359a-d88f-4b41-a653-bfaf9709f38d","block_type":"box","text":"provided to the issuer or its agents in the form of a rating letter.","page_number":199,"box":{"x":117,"y":599,"width":472,"height":12}},{"id":"f0cb0562-8e47-42d8-b315-0ce88ddc6189","block_type":"box","text":"The primary credit rating scales may also be used to provide ratings for a more narrow scope,","page_number":199,"box":{"x":116,"y":630,"width":702,"height":12}},{"id":"a1d1fb13-8ab8-4a82-b159-24233e0e4830","block_type":"box","text":"including interest strips and return of principal or in other forms of opinions such as credit opinions or","page_number":199,"box":{"x":117,"y":645,"width":751,"height":12}},{"id":"72187e63-a992-4926-840a-d588eb55d6f6","block_type":"box","text":"rating assessment services. Credit opinions are either a notch- or category-specific view using the","page_number":199,"box":{"x":117,"y":661,"width":726,"height":12}},{"id":"43d01391-54fd-496a-bdbb-eb3e7f799095","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":199,"box":{"x":117,"y":676,"width":731,"height":12}},{"id":"daa94543-dd8f-4532-93c3-79f30905b80b","block_type":"box","text":"standard. Credit opinions will be indicated using a lower case letter symbol combined with either an ‘*’","page_number":199,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"70f0e8d8-e8e9-4825-a32c-4e966f79ac51","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":199,"box":{"x":117,"y":707,"width":743,"height":12}},{"id":"1f018ce8-e12d-488b-9ed8-65ec446454be","block_type":"box","text":"but may be monitored if the analytical group believes information will be sufficiently available. Rating","page_number":199,"box":{"x":117,"y":723,"width":742,"height":12}},{"id":"a8d9c1ed-9ddd-4028-9f8e-2e57fe1e1d60","block_type":"box","text":"assessment services are a notch-specific view using the primary rating scale of how an existing or","page_number":199,"box":{"x":116,"y":738,"width":729,"height":12}},{"id":"2c9c64ef-53e4-4e74-bece-d7db21f3d82d","block_type":"box","text":"potential rating may be changed by a given set of hypothetical circumstances. While credit opinions","page_number":199,"box":{"x":117,"y":754,"width":736,"height":12}},{"id":"15f92378-c120-4194-872c-e680203a5884","block_type":"box","text":"and rating assessment services are point-in-time and are not monitored, they may have a directional","page_number":199,"box":{"x":116,"y":769,"width":745,"height":12}},{"id":"7f803cee-25ed-4347-b1ac-fba481f8c4fa","block_type":"box","text":"watch or outlook assigned, which can signify the trajectory of the credit profile.","page_number":199,"box":{"x":116,"y":785,"width":579,"height":12}},{"id":"ff67d0ff-fde7-4671-b46d-7e9799410dfd","block_type":"box","text":"Description of Fitch’s Long-Term Corporate Finance Obligations Rating Scales","page_number":199,"box":{"x":117,"y":816,"width":629,"height":12}},{"id":"558d1f19-ac2e-48bf-9f2c-9cbdf22f6ab5","block_type":"box","text":"Ratings of individual securities or financial obligations of a corporate issuer address relative","page_number":199,"box":{"x":117,"y":847,"width":682,"height":12}},{"id":"d1f86570-e580-4c7a-bd99-dd063f545c44","block_type":"box","text":"vulnerability to default on an ordinal scale. In addition, for financial obligations in corporate finance, a","page_number":199,"box":{"x":116,"y":862,"width":752,"height":12}},{"id":"476acc66-5451-4b25-8cf4-d52b17f8fde2","block_type":"box","text":"measure of recovery given default on that liability is also included in the rating assessment. This","page_number":199,"box":{"x":117,"y":878,"width":716,"height":12}},{"id":"58685529-6188-49f2-8cb2-94dbec2f3fc6","block_type":"box","text":"A-8","page_number":199,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"f312db3d-3c06-4685-8648-2fbc652a1942","block_type":"box","text":"NM1026U-6030748-199/260","page_number":199,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"78bd1378-70fb-4b7c-89d3-635dbc29eb07","block_type":"box","text":"notably applies to covered bonds ratings, which incorporate both an indication of the probability of","page_number":200,"box":{"x":117,"y":87,"width":729,"height":12}},{"id":"2c2053f9-e117-4869-8ce6-8a9aa9791478","block_type":"box","text":"default and of the recovery given a default of this debt instrument. On the contrary, Ratings of","page_number":200,"box":{"x":116,"y":102,"width":699,"height":13}},{"id":"abda09db-6ee3-4b6d-b6ae-ebf804ce0bd8","block_type":"box","text":"debtor-in-possession (“DIP”) obligations incorporate the expectation of full repayment.","page_number":200,"box":{"x":116,"y":118,"width":642,"height":12}},{"id":"1fb96276-e25f-4ad8-a201-2a57c3433b44","block_type":"box","text":"The relationship between the issuer scale and obligation scale assumes a generic historical average","page_number":200,"box":{"x":116,"y":149,"width":750,"height":12}},{"id":"85d7c1bf-d06a-408a-885a-4f68ddf1f8e7","block_type":"box","text":"recovery. Individual obligations can be assigned ratings higher, lower, or the same as that entity’s","page_number":200,"box":{"x":117,"y":165,"width":728,"height":12}},{"id":"0f95809c-2474-45d8-8b49-8c5645fe0960","block_type":"box","text":"issuer rating or issuer default rating (“IDR”), based on their relative ranking, relative vulnerability to","page_number":200,"box":{"x":117,"y":180,"width":733,"height":12}},{"id":"7d9f220c-4041-4e4e-88c6-fe871e65cf45","block_type":"box","text":"default or based on explicit Recovery Ratings.","page_number":200,"box":{"x":116,"y":196,"width":347,"height":12}},{"id":"809ba1cf-0824-4d2f-b7cc-98d7c7286381","block_type":"box","text":"As a result, individual obligations of entities, such as corporations, are assigned ratings higher, lower,","page_number":200,"box":{"x":116,"y":227,"width":756,"height":12}},{"id":"ea6e0477-9128-4689-b3eb-745ae00af4df","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":200,"box":{"x":116,"y":242,"width":766,"height":12}},{"id":"60f1f9e4-a1fd-4843-8191-beb07f8f23ba","block_type":"box","text":"IDR. At the lower end of the ratings scale, Fitch publishes explicit Recovery Ratings in many cases to","page_number":200,"box":{"x":117,"y":258,"width":756,"height":12}},{"id":"8aa70c80-44c6-4a2e-ba28-c7814294f68e","block_type":"box","text":"complement issuer and obligation ratings.","page_number":200,"box":{"x":116,"y":273,"width":315,"height":12}},{"id":"26388f32-7a02-4d92-93db-7b982923bf38","block_type":"box","text":"Fitch long-term obligations rating scales are as follows:","page_number":200,"box":{"x":117,"y":304,"width":412,"height":12}},{"id":"76d4f174-d6aa-4a5b-b9d2-3e00cdaf8872","block_type":"box","text":"AAA Highest Credit Quality. ‘AAA’ ratings denote the lowest expectation of credit risk. They","page_number":200,"box":{"x":116,"y":335,"width":753,"height":12}},{"id":"a82fcddf-b9c7-4bd9-878c-0f4f9bbd0f24","block_type":"box","text":"are assigned only in cases of exceptionally strong capacity for payment of financial","page_number":200,"box":{"x":226,"y":351,"width":619,"height":12}},{"id":"8c182f11-89fe-4f1c-a43d-e92ffedd15de","block_type":"box","text":"commitments. This capacity is highly unlikely to be adversely affected by foreseeable","page_number":200,"box":{"x":226,"y":366,"width":636,"height":12}},{"id":"86ce43ec-e5c3-43bf-9a6c-114c8547b4ed","block_type":"box","text":"events.","page_number":200,"box":{"x":226,"y":382,"width":58,"height":9}},{"id":"1e857137-ee5f-40dd-8c32-e9ee5629ac3a","block_type":"box","text":"AA Very High Credit Quality. ‘AA’ ratings denote expectations of very low credit risk. 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This capacity may,","page_number":200,"box":{"x":226,"y":475,"width":562,"height":12}},{"id":"94f62d8c-6603-4065-8858-8752a211793c","block_type":"box","text":"nevertheless, be more vulnerable to adverse business or economic conditions than is","page_number":200,"box":{"x":226,"y":490,"width":638,"height":11}},{"id":"97b1b269-fbca-465e-84a5-8fb27ec1acd9","block_type":"box","text":"the case for higher ratings.","page_number":200,"box":{"x":225,"y":506,"width":204,"height":12}},{"id":"4d125558-3d66-4698-ad71-db73afdabdc1","block_type":"box","text":"BBB Good Credit Quality. ‘BBB’ ratings indicate that expectations of credit risk are currently","page_number":200,"box":{"x":117,"y":529,"width":755,"height":12}},{"id":"2106665e-3c83-4c2c-bedd-650be1deb502","block_type":"box","text":"low. The capacity for payment of financial commitments is considered adequate, but","page_number":200,"box":{"x":226,"y":544,"width":629,"height":12}},{"id":"e20e9a5f-eca1-4d26-a036-2a4182c1a117","block_type":"box","text":"adverse business or economic conditions are more likely to impair this capacity.","page_number":200,"box":{"x":226,"y":560,"width":597,"height":12}},{"id":"77e6dd9e-bf40-44c6-93b6-6b998d16afb8","block_type":"box","text":"BB Speculative. ‘BB’ ratings indicate an elevated vulnerability to credit risk, particularly in","page_number":200,"box":{"x":117,"y":583,"width":746,"height":12}},{"id":"67d33ba5-1cae-46b3-887c-05abaa010039","block_type":"box","text":"the event of adverse changes in business or economic conditions over time; however,","page_number":200,"box":{"x":225,"y":599,"width":643,"height":12}},{"id":"da69e61a-3a7b-4f40-bb56-074144445eb7","block_type":"box","text":"business or financial alternatives may be available to allow financial commitments to be","page_number":200,"box":{"x":226,"y":614,"width":653,"height":12}},{"id":"e5d6503f-bd5a-4463-8662-b8f797c32468","block_type":"box","text":"met.","page_number":200,"box":{"x":226,"y":630,"width":37,"height":9}},{"id":"58f6f289-01df-41e9-90cf-0b522e8ea7ce","block_type":"box","text":"B Highly Speculative. ‘B’ ratings indicate that material credit risk is present.","page_number":200,"box":{"x":117,"y":653,"width":653,"height":12}},{"id":"cac80160-ae9f-4338-bd70-a57f5b5381fd","block_type":"box","text":"CCC Substantial Credit Risk. ‘CCC’ ratings indicate that substantial credit risk is present.","page_number":200,"box":{"x":117,"y":676,"width":725,"height":12}},{"id":"b0472654-2004-4b47-839f-ddb2045d405b","block_type":"box","text":"CC Very High Levels of Credit Risk. ‘CC’ ratings indicate very high levels of credit risk.","page_number":200,"box":{"x":117,"y":699,"width":719,"height":13}},{"id":"1fd0aee0-ac43-4481-805b-52da371cb84b","block_type":"box","text":"C Exceptionally High Levels of Credit Risk. ‘C’ indicates exceptionally high levels of credit","page_number":200,"box":{"x":117,"y":723,"width":756,"height":12}},{"id":"133f3d58-3eaa-48b9-991d-932d27059d90","block_type":"box","text":"risk.","page_number":200,"box":{"x":226,"y":738,"width":28,"height":10}},{"id":"2a946257-3397-45c6-8e82-1375215e29ef","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":769,"width":759,"height":12}},{"id":"d5df44f0-eaf9-4be8-b5ea-5a2dfb51c365","block_type":"box","text":"to denote relative status within major rating categories.","page_number":200,"box":{"x":116,"y":785,"width":405,"height":12}},{"id":"1a99feab-6aaa-4858-b404-5ef607e7dc19","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":816,"width":750,"height":12}},{"id":"dd230807-30ec-4e5b-bc76-6a97d986c688","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":831,"width":745,"height":12}},{"id":"54f36124-c8da-4a62-8327-b3198b20f353","block_type":"box","text":"the short-term rating category of ‘F1’, a ‘+’ may be appended.","page_number":200,"box":{"x":116,"y":847,"width":461,"height":12}},{"id":"f74e49e0-b3ef-4c40-a47b-85c170627a40","block_type":"box","text":"A-9","page_number":200,"box":{"x":486,"y":909,"width":26,"height":9}},{"id":"784de637-55b7-467a-8005-d12e65458c3b","block_type":"box","text":"NM1026U-6030748-200/260","page_number":200,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"931e487d-565f-4252-ad00-ee4f823953b8","block_type":"box","text":"Description of Fitch’s Short-Term Ratings Assigned to Issuers and Obligations","page_number":201,"box":{"x":117,"y":87,"width":634,"height":12}},{"id":"fa408ec6-5b89-479f-899f-93722d1ebbd2","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":201,"box":{"x":116,"y":118,"width":764,"height":12}},{"id":"e256ec27-014a-49fa-b744-50b723fabc0e","block_type":"box","text":"the rated entity and relates to the capacity to meet financial obligations in accordance with the","page_number":201,"box":{"x":116,"y":134,"width":701,"height":12}},{"id":"ef169bac-3665-4a6f-9887-80eb093dc260","block_type":"box","text":"documentation governing the relevant obligation. Short-term deposit ratings may be adjusted for loss","page_number":201,"box":{"x":116,"y":149,"width":753,"height":12}},{"id":"e4ca4758-1c06-4e56-83e1-8054ae97e39b","block_type":"box","text":"severity. Short-term ratings are assigned to obligations whose initial maturity is viewed as “short term”","page_number":201,"box":{"x":116,"y":165,"width":760,"height":12}},{"id":"88ef6efa-e78c-4e42-b6f3-e91f1a4c827f","block_type":"box","text":"based on market convention. Typically, this means up to 13 months for corporate, sovereign, and","page_number":201,"box":{"x":117,"y":180,"width":726,"height":12}},{"id":"59091c02-fc16-4835-ba39-feaabd269c3b","block_type":"box","text":"structured obligations and up to 36 months for obligations in U.S. public finance markets.","page_number":201,"box":{"x":116,"y":196,"width":664,"height":12}},{"id":"8ca80df3-6958-48ca-843b-bed92b66bd73","block_type":"box","text":"Fitch short-term ratings are as follows:","page_number":201,"box":{"x":117,"y":227,"width":289,"height":12}},{"id":"2963e1e9-24b1-4ea6-be8e-cc8ca7e95051","block_type":"box","text":"F1 Highest Short-Term Credit Quality. 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The intrinsic capacity for timely payment of financial","page_number":201,"box":{"x":117,"y":351,"width":732,"height":12}},{"id":"889d2899-3f4a-4af8-9e44-c7f1c2aa19c3","block_type":"box","text":"commitments is adequate.","page_number":201,"box":{"x":226,"y":366,"width":200,"height":12}},{"id":"b8fccce9-2ab2-49a8-a1d0-594b7420caf1","block_type":"box","text":"B Speculative Short-Term Credit Quality. 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Indicates an entity that has defaulted on one or more of its financial","page_number":201,"box":{"x":117,"y":467,"width":756,"height":12}},{"id":"ea349d8e-be8d-438f-8628-00415b42517f","block_type":"box","text":"commitments, although it continues to meet other financial obligations. Typically","page_number":201,"box":{"x":226,"y":482,"width":598,"height":12}},{"id":"7d96538c-f8ed-40af-bddc-027c4fe82101","block_type":"box","text":"applicable to entity ratings only.","page_number":201,"box":{"x":226,"y":498,"width":239,"height":12}},{"id":"17561b93-8325-4882-b812-42b06328fa3e","block_type":"box","text":"D Default. Indicates a broad-based default event for an entity, or the default of a short","page_number":201,"box":{"x":117,"y":521,"width":733,"height":12}},{"id":"04c4928b-a9a6-4583-8f5f-96cbfc53f1fb","block_type":"box","text":"term obligation.","page_number":201,"box":{"x":225,"y":537,"width":120,"height":12}},{"id":"4910f75e-312f-4639-ba4f-af86b2640dcb","block_type":"box","text":"A-10","page_number":201,"box":{"x":482,"y":909,"width":35,"height":9}},{"id":"3b2a5e26-7540-4309-881a-441d6fb3c95a","block_type":"box","text":"NM1026U-6030748-201/260","page_number":201,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"161b433d-38b1-43f2-9a95-4fdccd9f38d7","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting Policy","page_number":202,"box":{"x":380,"y":87,"width":508,"height":12}},{"id":"19081925-3b3e-4804-beff-ad479cc6b232","block_type":"box","text":"APPENDIX B","page_number":202,"box":{"x":448,"y":118,"width":108,"height":9}},{"id":"b75826eb-41bc-422c-a938-e03fdb563304","block_type":"box","text":"Open-End Active and Fixed Income Index Fund Proxy Voting Policy","page_number":202,"box":{"x":204,"y":146,"width":597,"height":14}},{"id":"ef33bf1b-0552-48b7-bb2b-73e7dcd61d2f","block_type":"box","text":"Procedures Governing Delegation of Proxy Voting to Fund Advisers","page_number":202,"box":{"x":229,"y":175,"width":547,"height":13}},{"id":"9af5a7b3-eb58-4ddc-88fe-59de1b5e17f9","block_type":"box","text":"Effective Date: January 1, 2025","page_number":202,"box":{"x":383,"y":204,"width":239,"height":12}},{"id":"d9c0e626-9d27-4514-ab55-8be1255f9102","block_type":"box","text":"Applies to the following types of Funds registered under the 1940 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There are separate, independently developed principles and","page_number":207,"box":{"x":116,"y":304,"width":748,"height":12}},{"id":"8ecbf405-024d-47b6-a059-caab73f1263a","block_type":"box","text":"voting policies that are applied to BlackRock’s index equity investments by a distinct and independent","page_number":207,"box":{"x":116,"y":320,"width":758,"height":12}},{"id":"2b78072a-e9c3-4408-85a5-4e5b2a587514","block_type":"box","text":"function, BlackRock Investment Stewardship.","page_number":207,"box":{"x":116,"y":335,"width":341,"height":12}},{"id":"14da84b0-bc90-4b45-9fd1-6fb00c898c18","block_type":"box","text":"1","page_number":207,"box":{"x":144,"y":789,"width":2,"height":5}},{"id":"13e1a891-1f16-40c0-9525-86c0b37f11a0","block_type":"box","text":"This document includes BAIS’ benchmark policy, which covers nearly all active equity holdings in BlackRock’s","page_number":207,"box":{"x":170,"y":789,"width":653,"height":10}},{"id":"c8d3e93e-6cf7-4190-9cd8-5f2c268db925","block_type":"box","text":"fundamental equity, systematic equity and multi-asset solutions strategies. 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The money BlackRock manages is not its own","page_number":208,"box":{"x":485,"y":118,"width":392,"height":12}},{"id":"0208d029-6677-48da-a431-3a3fe16911e1","block_type":"box","text":"— it belongs to BlackRock’s clients, many of w","page_number":208,"box":{"x":116,"y":133,"width":339,"height":12}},{"id":"3fa9e387-261b-48e7-8bdc-0e87c3e37d8b","block_type":"box","text":"hom make their own asset allocation and portfolio","page_number":208,"box":{"x":456,"y":133,"width":365,"height":12}},{"id":"397cf5e8-4875-4f38-b06d-226f7c072eab","block_type":"box","text":"construction decisions. As a fiduciary, BlackRock in","page_number":208,"box":{"x":116,"y":149,"width":373,"height":12}},{"id":"1ea22854-4d38-4a84-a9c2-8baebfc8bf9e","block_type":"box","text":"vests on clients’ behalf to help them meet their","page_number":208,"box":{"x":490,"y":149,"width":342,"height":12}},{"id":"ad8428ce-9f8a-431a-aa3f-98c437d187d3","block_type":"box","text":"investment objectives. 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BlackRock then helps clients seek the","page_number":208,"box":{"x":501,"y":180,"width":380,"height":12}},{"id":"9a5239fd-45ee-45f0-a5f8-b20fc34a3d6d","block_type":"box","text":"best risk-adjusted returns based on those choices,","page_number":208,"box":{"x":117,"y":195,"width":364,"height":12}},{"id":"314b951b-38d5-4fc7-965c-4d636a8fa260","block_type":"box","text":"underpinning this work with research, data and","page_number":208,"box":{"x":482,"y":195,"width":350,"height":12}},{"id":"020f4cd7-60b5-4ba5-9f14-60ca2443c8fd","block_type":"box","text":"analytics.","page_number":208,"box":{"x":116,"y":211,"width":73,"height":12}},{"id":"1de323d5-555c-47ac-a011-b5ac16408459","block_type":"box","text":"At BlackRock, investment stewardship is core to our role as an asset manager and a fiduciary to our","page_number":208,"box":{"x":116,"y":241,"width":748,"height":12}},{"id":"c3109d02-f0d4-4445-a2ea-08cabbb422c9","block_type":"box","text":"clients. As stewards of our clients’ assets, we engage with companies to discuss the corporate","page_number":208,"box":{"x":116,"y":257,"width":706,"height":12}},{"id":"a294ff73-44c9-4155-826c-99347347a955","block_type":"box","text":"governance and business practices that, in our experience, support companies in delivering durable,","page_number":208,"box":{"x":116,"y":272,"width":751,"height":12}},{"id":"b417cc70-99b8-43da-98ec-d4af28634d5d","block_type":"box","text":"risk-adjusted financial returns over time. We are committed to building strong relationships through","page_number":208,"box":{"x":117,"y":288,"width":736,"height":12}},{"id":"22197c29-4b74-4559-be4c-5587c7300b30","block_type":"box","text":"constructive, ongoing dialogue with the boards and executive management of the companies in which","page_number":208,"box":{"x":116,"y":303,"width":760,"height":12}},{"id":"60515207-0c36-4e07-918b-51c801aba522","block_type":"box","text":"our clients are invested.","page_number":208,"box":{"x":116,"y":319,"width":182,"height":9}},{"id":"ac9159ee-f5a0-4a87-bda3-0f019aeb725a","block_type":"box","text":"About BlackRock Active Investment Stewardship","page_number":208,"box":{"x":303,"y":357,"width":398,"height":12}},{"id":"55e3d8f5-7162-4bfa-96d1-bf49690f3578","block_type":"box","text":"BlackRock Active Investment Stewardship (BAIS) is a specialist team within the Portfolio Management","page_number":208,"box":{"x":117,"y":388,"width":764,"height":12}},{"id":"d2f85ca5-c3c8-41c8-8758-c8732a6bbbe7","block_type":"box","text":"Group and manages BlackRock’s stewardship engagement and voting on behalf of clients invested in","page_number":208,"box":{"x":117,"y":403,"width":758,"height":12}},{"id":"10935439-bbfa-48fb-bbda-7f1cce8440ea","block_type":"box","text":"active strategies globally. BAIS is also responsible for engagement with issuers in index fixed income","page_number":208,"box":{"x":116,"y":419,"width":755,"height":12}},{"id":"c47900db-fc16-491d-a4de-b02f4e03f2c3","block_type":"box","text":"strategies, where appropriate. Our activities are informed by these Global Engagement and Voting","page_number":208,"box":{"x":116,"y":434,"width":735,"height":12}},{"id":"aff5ad1e-b942-420f-b36a-f2c098ec68b5","block_type":"box","text":"Guidelines (the “Guidelines”) and insights from active investment analysts and portfolio managers, with","page_number":208,"box":{"x":117,"y":450,"width":768,"height":12}},{"id":"7b327ce9-940f-4f41-b0ee-600f85da8567","block_type":"box","text":"whom we work closely in engaging companies and voting at shareholder meetings.","page_number":208,"box":{"x":116,"y":465,"width":622,"height":12}},{"id":"72b482c4-5d57-4fc2-b226-26ff07e2fdb4","block_type":"box","text":"Engagement with public companies is the foundation of our approach to stewardship within","page_number":208,"box":{"x":117,"y":496,"width":680,"height":12}},{"id":"7823d983-a0b3-40c7-9ef7-fcd56d6ab6ec","block_type":"box","text":"fundamental active investing.","page_number":208,"box":{"x":116,"y":511,"width":215,"height":12}},{"id":"6935e0dc-38c2-4d25-aee7-9ca16ade52f3","block_type":"box","text":"3","page_number":208,"box":{"x":333,"y":511,"width":5,"height":6}},{"id":"fa176183-2ce3-4eb9-a516-c015762b509b","block_type":"box","text":"Through direct dialogue with company leadership, we seek to","page_number":208,"box":{"x":339,"y":511,"width":466,"height":12}},{"id":"7072e4b0-9bea-4240-968b-2ce795ed8509","block_type":"box","text":"understand their businesses and how they manage risks and opportunities to deliver durable, risk","page_number":208,"box":{"x":117,"y":527,"width":727,"height":12}},{"id":"f27e83bd-fdf6-4894-ae9f-6533aa2e8845","block_type":"box","text":"adjusted financial returns. Portfolio managers and stewardship specialists may engage jointly or","page_number":208,"box":{"x":116,"y":542,"width":716,"height":12}},{"id":"16cf6042-e0c4-47fa-89b3-fa9a6fbb77b2","block_type":"box","text":"independently on material corporate governance matters. Our discussions focus on topics relevant to a","page_number":208,"box":{"x":117,"y":558,"width":769,"height":12}},{"id":"7fcd4bc8-3bd0-42f9-ae3e-b8487835ad13","block_type":"box","text":"company’s success over time, including governance and leadership, corporate strategy, capital","page_number":208,"box":{"x":116,"y":573,"width":711,"height":12}},{"id":"022e0caa-ca1f-47fb-bd3a-53fa1cb3ca6e","block_type":"box","text":"structure and financial performance, operations and material sustainability-related risks, as well as","page_number":208,"box":{"x":116,"y":589,"width":734,"height":12}},{"id":"c95580dd-d53d-485a-b310-c9cc5a91b20e","block_type":"box","text":"macro-economic, geopolitical and sector dynamics. We aim to be constructive investors and are","page_number":208,"box":{"x":117,"y":604,"width":717,"height":12}},{"id":"8b452379-c09b-4f40-bb25-26b5cba3546b","block_type":"box","text":"generally supportive of management teams that have a track record of financial value creation. We aim","page_number":208,"box":{"x":116,"y":620,"width":770,"height":12}},{"id":"26abe2b5-6093-4aed-924d-c2fc2b93d77d","block_type":"box","text":"to build and maintain strong relationships with company leadership based on open dialogue and","page_number":208,"box":{"x":116,"y":635,"width":717,"height":12}},{"id":"d22ddef9-25f6-4a35-9d87-e0b804b07d32","block_type":"box","text":"mutual respect.","page_number":208,"box":{"x":117,"y":651,"width":118,"height":12}},{"id":"bd582468-a33a-4081-ae4a-f8f86365b047","block_type":"box","text":"Different active equity strategies may implement these voting guidelines differently, as a result of the","page_number":208,"box":{"x":117,"y":681,"width":744,"height":12}},{"id":"a7159079-6c94-45aa-af0b-672df17e0a45","block_type":"box","text":"latitude each portfolio manager has to make independent voting decisions on their holdings. 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We provide voting recommendations to fundamental equity portfolio managers,","page_number":208,"box":{"x":116,"y":728,"width":751,"height":12}},{"id":"8a201dab-7dbf-447b-9aaf-3cc9ea5cac86","block_type":"box","text":"who may determine to vote differently based on each portfolio’s investment objectives and strategy.","page_number":208,"box":{"x":116,"y":743,"width":737,"height":12}},{"id":"2b95226d-3890-4fe4-99b0-852641d73402","block_type":"box","text":"These guidelines discuss BAIS’ views on corporate governance topics on which we may engage with","page_number":208,"box":{"x":116,"y":774,"width":749,"height":12}},{"id":"ca05a0f4-62a7-49ba-a806-db216951bbbb","block_type":"box","text":"management teams and board directors","page_number":208,"box":{"x":117,"y":790,"width":297,"height":12}},{"id":"9910c293-8beb-46bb-84a4-f7d9a90f8546","block_type":"box","text":"4","page_number":208,"box":{"x":414,"y":790,"width":6,"height":6}},{"id":"b544f655-4447-4794-a638-b1b6477994ae","block_type":"box","text":"and on matters that routinely come to a shareholder vote. We","page_number":208,"box":{"x":424,"y":790,"width":456,"height":12}},{"id":"8f2b1c13-4041-4e79-9e90-93ef6d81bd8e","block_type":"box","text":"3","page_number":208,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"869cec4b-d53c-489e-a127-9217617c3d9d","block_type":"box","text":"On February 11, 2025, the U.S. Securities and Exchange Commission (SEC) staff issued updated guidance for","page_number":208,"box":{"x":170,"y":815,"width":660,"height":9}},{"id":"671da0f1-6131-486a-a517-94ce731f3794","block_type":"box","text":"shareholders to maintain their eligibility to report their beneficial ownership under Schedule 13G of the Exchange Act.","page_number":208,"box":{"x":170,"y":828,"width":695,"height":9}},{"id":"362dc8ff-1fd2-485a-81c0-8d98d70188dd","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":208,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"9a33ae10-4f8c-4a8c-8f34-77d99e49f22d","block_type":"box","text":"of changing or influencing control of the company.","page_number":208,"box":{"x":170,"y":853,"width":295,"height":10}},{"id":"2bfb4dba-9266-405d-a6b6-0281d1ed49f3","block_type":"box","text":"4","page_number":208,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"e682b8a9-7eb9-4b1a-a1a5-e6870417dce6","block_type":"box","text":"References to the board, board directors or non-executive directors should be understood to include supervisory boards","page_number":208,"box":{"x":171,"y":866,"width":710,"height":10}},{"id":"37b9b3fc-250e-497d-b700-aec782b5a11f","block_type":"box","text":"and their members, where relevant.","page_number":208,"box":{"x":170,"y":879,"width":210,"height":9}},{"id":"c8f91c62-6013-4bf1-b4cd-8333a3080e6d","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":208,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"a95783bf-82f9-4ebc-8c75-86312712c988","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":208,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"af5fb0d1-9838-483a-89ea-b6a6245c2a1d","block_type":"box","text":"4","page_number":208,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"bd5eca46-e177-49db-9a9e-45989f3f3433","block_type":"box","text":"NM1026U-6030748-208/260","page_number":208,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"44c330dd-6fc0-4130-8857-3b81eeb0eec1","block_type":"box","text":"recognize that accepted corporate governance norms can differ across markets, and believe these","page_number":209,"box":{"x":117,"y":87,"width":736,"height":12}},{"id":"53e52371-904e-47fd-95e8-7c2570114a40","block_type":"box","text":"guidelines represent globally applicable elements of governance that support a company’s ability to","page_number":209,"box":{"x":116,"y":102,"width":741,"height":13}},{"id":"c86f2a5d-7b9e-4e8b-9a34-1e081255080d","block_type":"box","text":"manage material risks and opportunities and deliver financial returns to investors. Generally, we","page_number":209,"box":{"x":117,"y":118,"width":715,"height":12}},{"id":"b68340ba-310c-4006-8a80-164c58c450da","block_type":"box","text":"believe companies should observe accepted corporate governance norms within their local markets or,","page_number":209,"box":{"x":117,"y":134,"width":768,"height":12}},{"id":"81a6c556-aa42-4189-9ffd-450838586389","block_type":"box","text":"particularly in markets without well-established norms, aspire to widely recognized international best","page_number":209,"box":{"x":117,"y":149,"width":746,"height":12}},{"id":"6a51bed4-20c1-45be-89c5-ac1a9176810b","block_type":"box","text":"practices. As one of many minority shareholders, BlackRock cannot – and does not try to – direct a","page_number":209,"box":{"x":117,"y":165,"width":739,"height":12}},{"id":"b6d4ab0c-010a-47a4-9b41-b6bb60d6b1a6","block_type":"box","text":"company’s strategy or its implementation. We look to companies to provide disclosures that explain","page_number":209,"box":{"x":116,"y":180,"width":743,"height":12}},{"id":"59e69da1-6bb7-41ac-a325-21186c1261c7","block_type":"box","text":"how their approach to corporate governance best aligns with the financial interests of their investors.","page_number":209,"box":{"x":117,"y":196,"width":749,"height":12}},{"id":"5c1dbbd5-3bba-4a3e-baa6-43ed27b67389","block_type":"box","text":"Our approach to stewardship within active equities","page_number":209,"box":{"x":296,"y":234,"width":412,"height":12}},{"id":"ea865ab7-0830-4f30-968f-76b4aa7cedec","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":209,"box":{"x":116,"y":265,"width":713,"height":12}},{"id":"74940b4e-4586-4002-876a-789b814eb175","block_type":"box","text":"corporate governance. The voting rights attached to clients’ holdings are an important mechanism for","page_number":209,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"1dbb596f-f5a6-4389-b201-c162cdc20d81","block_type":"box","text":"investors to express support for, or concern about, a company’s performance. As a fiduciary,","page_number":209,"box":{"x":117,"y":296,"width":692,"height":12}},{"id":"73c6aecf-b286-4629-b390-1536b918d9e7","block_type":"box","text":"BlackRock is legally required to make proxy voting determinations, on behalf of clients who have","page_number":209,"box":{"x":117,"y":312,"width":720,"height":12}},{"id":"36bce38a-f100-4896-bfa7-f8d540e63214","block_type":"box","text":"delegated voting authority to us, in a manner consistent with BlackRock’s contractual arrangements","page_number":209,"box":{"x":116,"y":327,"width":743,"height":12}},{"id":"210a12e5-781e-4acd-b3b7-7c9e95edba54","block_type":"box","text":"with clients and funds.","page_number":209,"box":{"x":116,"y":343,"width":170,"height":9}},{"id":"3ef835e8-3e84-42c9-a8e7-0e2517150a67","block_type":"box","text":"In general, we tend to support the recommendations of the board of directors and management. As","page_number":209,"box":{"x":117,"y":374,"width":740,"height":12}},{"id":"4d1591cf-580e-4ae8-a793-2054453ebfa4","block_type":"box","text":"indicated below, we may vote against management recommendations when we have concerns about","page_number":209,"box":{"x":117,"y":389,"width":755,"height":12}},{"id":"9ef461e5-6876-47a7-9724-6a1185838102","block_type":"box","text":"how companies are serving the financial interests of our clients as their shareholders. BAIS takes a","page_number":209,"box":{"x":117,"y":405,"width":740,"height":12}},{"id":"ae047a02-4c06-4c5d-982f-1f5072ea1dad","block_type":"box","text":"globally consistent approach to voting but considers the different corporate governance regulations and","page_number":209,"box":{"x":116,"y":420,"width":772,"height":12}},{"id":"80c04122-7f6f-4c26-aba5-2e3bbf6dd41a","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":209,"box":{"x":117,"y":436,"width":753,"height":12}},{"id":"7d72d661-bc13-4026-b59f-480611411d3b","block_type":"box","text":"situation and the investment mandate we have from clients. Please see page 19 for more information","page_number":209,"box":{"x":116,"y":451,"width":756,"height":12}},{"id":"021be3b9-3648-422d-b590-26a12f80a29c","block_type":"box","text":"about how we fulfill and oversee our investment stewardship responsibilities for BlackRock’s non-index","page_number":209,"box":{"x":116,"y":467,"width":768,"height":12}},{"id":"b012af54-be19-4284-baa4-b9f7343723b8","block_type":"box","text":"equity strategies.","page_number":209,"box":{"x":116,"y":482,"width":125,"height":12}},{"id":"10703e81-ca5e-46ba-ad7a-43c9937bf48a","block_type":"box","text":"5","page_number":209,"box":{"x":243,"y":483,"width":6,"height":6}},{"id":"8895531c-4bb9-4860-be7b-b980904883d9","block_type":"box","text":"Our approach to stewardship within fixed income","page_number":209,"box":{"x":303,"y":521,"width":399,"height":12}},{"id":"1e9cf6d3-8652-452a-807b-88fe8186b1e5","block_type":"box","text":"Although fixed income investors do not have the right to vote at shareholder meetings, issuer","page_number":209,"box":{"x":116,"y":552,"width":695,"height":12}},{"id":"211d1bb3-c015-4541-ba92-a20ecefb7ca4","block_type":"box","text":"engagement is a component of fixed income investment strategies at BlackRock, particularly for those","page_number":209,"box":{"x":116,"y":568,"width":762,"height":12}},{"id":"63863eff-8634-4a5f-911d-9fd47ba87e89","block_type":"box","text":"with sustainability objectives in addition to financial objectives. Most corporate governance-related","page_number":209,"box":{"x":116,"y":583,"width":732,"height":12}},{"id":"1c6bde37-c27f-4477-b58d-2b50321ae1f6","block_type":"box","text":"fixed income engagements are undertaken in conjunction with the active investment stewardship team,","page_number":209,"box":{"x":116,"y":599,"width":770,"height":12}},{"id":"0789963e-1d32-4f47-bf8d-7254cec8d56c","block_type":"box","text":"and often active equity investors. In addition to the topics listed below, engagement with fixed income","page_number":209,"box":{"x":116,"y":614,"width":757,"height":12}},{"id":"c126b74d-82d3-4480-951f-2f38699888e7","block_type":"box","text":"investment teams may help inform an issuer’s approach to structuring specialist issuances and the","page_number":209,"box":{"x":117,"y":630,"width":736,"height":12}},{"id":"51dadb6c-7e6a-49b6-a926-a2c80bc1d4f7","block_type":"box","text":"standard terms and information in bond documentation.","page_number":209,"box":{"x":116,"y":645,"width":417,"height":10}},{"id":"ab255fb5-805a-420c-b8b6-b55398ff1d1e","block_type":"box","text":"5","page_number":209,"box":{"x":143,"y":854,"width":4,"height":5}},{"id":"76183ad5-3a47-4dc4-9afa-5e7301380c17","block_type":"box","text":"Non-index equity strategies include active equity holdings in BlackRock’s fundamental equity, systematic equity and","page_number":209,"box":{"x":171,"y":854,"width":685,"height":9}},{"id":"3f5aa1c8-a046-4bee-9ec9-11c6c5a72b5c","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":209,"box":{"x":170,"y":867,"width":678,"height":9}},{"id":"0e3b5af2-e33a-4fc8-aee1-25ccf7432330","block_type":"box","text":"extent those strategies hold voting securities or conduct issuer engagements.","page_number":209,"box":{"x":170,"y":880,"width":458,"height":9}},{"id":"3316e581-057e-464e-a408-f09d37795745","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":209,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"d3db5a07-5013-4c56-99cb-fa3b7c833cc6","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":209,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"80be4213-32ca-4ae3-8504-db8f5bde7a81","block_type":"box","text":"5","page_number":209,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"63418767-f23d-4366-b315-11e631ac4803","block_type":"box","text":"NM1026U-6030748-209/260","page_number":209,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"42e56691-ba0a-4223-859a-b75ed1bb4c66","block_type":"box","text":"Boards of Directors","page_number":210,"box":{"x":422,"y":113,"width":161,"height":9}},{"id":"bc15489a-3f25-4cbf-b5c1-b53dfc0f92b4","block_type":"box","text":"Roles and responsibilities","page_number":210,"box":{"x":117,"y":146,"width":212,"height":11}},{"id":"d1e97ca0-3a19-4191-a573-8525236eaa8b","block_type":"box","text":"There is widespread consensus that the foundation of good corporate governance is an effective board","page_number":210,"box":{"x":116,"y":178,"width":770,"height":12}},{"id":"c6486fc8-7a2e-4ef3-900b-9c166663f546","block_type":"box","text":"of directors that is able to advise and supervise management in an independent and objective","page_number":210,"box":{"x":116,"y":194,"width":700,"height":12}},{"id":"f6f6420b-bffc-488c-9caa-15b47f02e549","block_type":"box","text":"manner.","page_number":210,"box":{"x":117,"y":212,"width":59,"height":7}},{"id":"062cdecc-80dd-4527-9ae5-988def7c69f8","block_type":"box","text":"6","page_number":210,"box":{"x":178,"y":209,"width":5,"height":6}},{"id":"46e818fa-3cf1-4a04-a1cd-48a4a32a57ea","block_type":"box","text":"We look to the board of directors (hereafter the “board”) to have an oversight role in the establishment","page_number":210,"box":{"x":116,"y":242,"width":762,"height":12}},{"id":"11573a7a-1b4c-4b72-a0f9-79e58d1b8d7c","block_type":"box","text":"and realization of a company’s strategy, purpose and culture. These constructs are interdependent","page_number":210,"box":{"x":116,"y":257,"width":738,"height":12}},{"id":"d392d0f0-295e-4ebc-b64c-ff30e1f1f9ee","block_type":"box","text":"and, when aligned, can better position a company to be resilient in the face of a changing business","page_number":210,"box":{"x":116,"y":273,"width":739,"height":12}},{"id":"d6b6059d-313d-448c-969c-fc4b3b1b5297","block_type":"box","text":"environment, help reduce the risks of corporate or employee misconduct, and attract and retain the","page_number":210,"box":{"x":116,"y":288,"width":740,"height":12}},{"id":"a6412905-188a-4f7d-8466-e39c92c30dc3","block_type":"box","text":"caliber of workers necessary to deliver financial performance over time.","page_number":210,"box":{"x":116,"y":304,"width":535,"height":12}},{"id":"cc8d278e-059b-439e-a811-480f7b4394d4","block_type":"box","text":"In overseeing the management of the company, the board ensures the necessary resources, policies","page_number":210,"box":{"x":117,"y":337,"width":754,"height":12}},{"id":"dcd0a1bf-b81f-47c9-ad03-a285c2b31c95","block_type":"box","text":"and procedures are in place to help management meet its strategic objectives within an agreed risk","page_number":210,"box":{"x":116,"y":352,"width":742,"height":12}},{"id":"d7081448-fec5-4ef8-b172-23a8e78ad4f5","block_type":"box","text":"tolerance.","page_number":210,"box":{"x":116,"y":368,"width":78,"height":9}},{"id":"e2737a85-0989-4566-946e-a5856fb52561","block_type":"box","text":"One of the most important responsibilities of the board is to appoint, and remove as necessary, the","page_number":210,"box":{"x":116,"y":400,"width":739,"height":12}},{"id":"65d9081c-9599-413e-9cd9-3437c52166cd","block_type":"box","text":"chief executive officer (“CEO”). In addition, the board plays a meaningful role in monitoring the","page_number":210,"box":{"x":116,"y":416,"width":704,"height":12}},{"id":"a611c8b6-ed36-438c-b99d-ed0086a87d2f","block_type":"box","text":"performance of the CEO and other key executives, determining executive compensation, ensuring a","page_number":210,"box":{"x":117,"y":431,"width":747,"height":12}},{"id":"ef8758d7-bc79-4714-b7ee-d08684f182ae","block_type":"box","text":"rigorous audit, overseeing strategy execution and risk management and engaging with shareholders,","page_number":210,"box":{"x":117,"y":447,"width":753,"height":12}},{"id":"7d6814d6-d80d-4bb2-9a64-0d45a8794194","block_type":"box","text":"and other stakeholders, as necessary.","page_number":210,"box":{"x":116,"y":462,"width":289,"height":12}},{"id":"3b457e37-bf1a-4266-9a5d-d7d569d4a52b","block_type":"box","text":"Composition and effectiveness","page_number":210,"box":{"x":116,"y":495,"width":253,"height":12}},{"id":"715c8b0f-0ab7-4ae1-ae79-b7ae911c0980","block_type":"box","text":"Appointment process","page_number":210,"box":{"x":116,"y":528,"width":177,"height":12}},{"id":"9d0c6338-b74a-4b7d-a1b1-abd922fc8fbc","block_type":"box","text":"A formal and transparent process for identifying and appointing director candidates is critical to","page_number":210,"box":{"x":116,"y":560,"width":708,"height":12}},{"id":"330754b5-7894-4dd9-9bbf-6f6882c41411","block_type":"box","text":"ensuring the board is composed of directors with the appropriate mix of skills and experience.","page_number":210,"box":{"x":116,"y":576,"width":700,"height":12}},{"id":"c3b757bb-f65d-4135-a982-8b4e3d42e4c8","block_type":"box","text":"Generally, the board or a sub-committee determines the general criteria given the company’s","page_number":210,"box":{"x":117,"y":591,"width":695,"height":12}},{"id":"95ec6a39-92d2-4cf0-b204-4cac2ccaaf8f","block_type":"box","text":"circumstances (e.g., sector, maturity, geographic footprint) and any additional criteria for a specific role","page_number":210,"box":{"x":116,"y":607,"width":767,"height":12}},{"id":"b32680bf-e9cf-4f9a-8d10-5c380f82aad4","block_type":"box","text":"being filled (e.g., financial expertise, industry track record). To inform the process, we encourage","page_number":210,"box":{"x":117,"y":622,"width":721,"height":12}},{"id":"60e41ca7-c6fa-422d-8fd7-6cf0bed8fe49","block_type":"box","text":"companies to review the skills and experience of incumbent directors to identify any gaps and whether","page_number":210,"box":{"x":116,"y":638,"width":764,"height":12}},{"id":"12fc3e07-cd31-4367-95e8-4be2b0ca0dc7","block_type":"box","text":"the skills and experience of a director candidate would be additive. We welcome disclosures that","page_number":210,"box":{"x":116,"y":653,"width":722,"height":12}},{"id":"d2196ce6-ff4a-41f8-9a1f-ac285c673005","block_type":"box","text":"explain how the board considered different skills and experience to ensure that the directors","page_number":210,"box":{"x":116,"y":669,"width":682,"height":12}},{"id":"6f0d26a0-c43c-4e78-a1e4-7eb7c613ae24","block_type":"box","text":"collectively can be effective in fulfilling their responsibilities. We assess a company’s board","page_number":210,"box":{"x":116,"y":684,"width":672,"height":12}},{"id":"6398e618-98d2-4fe0-80f1-0d8beae0329c","block_type":"box","text":"composition against that of its peer group and local market requirements.","page_number":210,"box":{"x":116,"y":700,"width":542,"height":12}},{"id":"a41b1aeb-6e8c-4cdc-9ba2-e2aac5a7a731","block_type":"box","text":"Shareholders periodically vote to elect directors to serve on the board. We do not prescribe any","page_number":210,"box":{"x":116,"y":733,"width":709,"height":12}},{"id":"8e23e1ac-f796-40f4-9599-383532fc2930","block_type":"box","text":"particular board composition in our engagements or voting but seek to understand how well placed a","page_number":210,"box":{"x":117,"y":748,"width":746,"height":12}},{"id":"ee35e2e9-442f-4860-a8ed-c3a90326d67f","block_type":"box","text":"board is to act in investors’ interests. We may vote against the election of the most senior independent","page_number":210,"box":{"x":117,"y":764,"width":760,"height":12}},{"id":"e069d21f-4d7b-4469-8f30-9077f3533981","block_type":"box","text":"director, or the chair of the relevant committee, where a company has not demonstrated it has an","page_number":210,"box":{"x":116,"y":779,"width":720,"height":12}},{"id":"850321a4-7ee5-4044-97b8-45fe255ce104","block_type":"box","text":"appointment process that results in a high functioning board with the appropriate complement of skills","page_number":210,"box":{"x":116,"y":795,"width":753,"height":12}},{"id":"afc76577-fad9-48a9-91bf-1196ee11e740","block_type":"box","text":"and experience amongst the directors to support strong financial performance over time. We may vote","page_number":210,"box":{"x":116,"y":810,"width":759,"height":12}},{"id":"0c4c1088-1530-4dfa-8f66-c05f07281649","block_type":"box","text":"against newly nominated directors who do not seem to have the appropriate skills or experience to","page_number":210,"box":{"x":116,"y":826,"width":736,"height":12}},{"id":"0ddbb154-8a44-430f-8926-374f8a0302ab","block_type":"box","text":"contribute to the board’s effectiveness.","page_number":210,"box":{"x":116,"y":841,"width":293,"height":10}},{"id":"3416e48a-24ba-4e0d-ba0e-fda461d08595","block_type":"box","text":"6","page_number":210,"box":{"x":143,"y":866,"width":4,"height":5}},{"id":"bb3b3a5f-5a7b-4b44-87e4-1b13555d3484","block_type":"box","text":"See the Corporate Governance Codes of Germany, Japan, and the UK, as well as the corporate governance principles","page_number":210,"box":{"x":170,"y":866,"width":706,"height":10}},{"id":"f9d884b6-755a-4de7-8be7-28685e605c59","block_type":"box","text":"of the US Business Roundtable as examples.","page_number":210,"box":{"x":170,"y":879,"width":268,"height":10}},{"id":"f0264b73-0508-4942-b20b-0ddea14ccd6e","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":210,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"cb6d15dc-ef69-4caf-a162-8ab0b914c112","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":210,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"db89615c-b735-4ba2-9962-6c817eae1174","block_type":"box","text":"6","page_number":210,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"fec34c80-88ed-406b-8e3e-f1bad8ea0be7","block_type":"box","text":"NM1026U-6030748-210/260","page_number":210,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"96367d96-2899-456d-b79b-a20eec6a1887","block_type":"box","text":"Independence","page_number":211,"box":{"x":116,"y":87,"width":118,"height":12}},{"id":"1b453361-eca5-4115-a0d2-a11c476c2998","block_type":"box","text":"Director independence from management, significant shareholders or other stakeholders (e.g.,","page_number":211,"box":{"x":117,"y":116,"width":706,"height":12}},{"id":"7e7ce7d0-004e-456c-834d-f710c49a7971","block_type":"box","text":"government or employees) is of paramount importance to the protection of the interests of minority","page_number":211,"box":{"x":116,"y":132,"width":736,"height":12}},{"id":"e9e58a7d-0823-4107-a728-0b38eec4b5af","block_type":"box","text":"shareholders such as BlackRock’s clients. We consider it good practice for at least half the directors to","page_number":211,"box":{"x":116,"y":147,"width":766,"height":12}},{"id":"52692672-ac74-4c3e-bc13-904ba7367969","block_type":"box","text":"be independent and free from conflicts of interest or undue influence.","page_number":211,"box":{"x":117,"y":163,"width":510,"height":12}},{"id":"c8f1bf7a-7b6e-4ef2-845e-78648ddbc1fc","block_type":"box","text":"7","page_number":211,"box":{"x":629,"y":163,"width":5,"height":6}},{"id":"432124d0-2003-4c8c-b486-8eafb9cab1c2","block_type":"box","text":"This also helps to ensure that","page_number":211,"box":{"x":635,"y":163,"width":229,"height":12}},{"id":"0baa6c05-be9c-4a45-a7cd-7ce2f50ca9e2","block_type":"box","text":"board committees are composed of a sufficient number of independent directors. Companies domiciled","page_number":211,"box":{"x":117,"y":178,"width":770,"height":12}},{"id":"c86d1134-2d7e-4c8b-ba8e-da647aacae01","block_type":"box","text":"in markets with a higher threshold for board independence should meet those local requirements.","page_number":211,"box":{"x":117,"y":194,"width":727,"height":12}},{"id":"ee5d37f7-4d9c-42e6-b7a6-08297b263d1c","block_type":"box","text":"We may vote against the election of non-independent directors if the board does not have a sufficient","page_number":211,"box":{"x":116,"y":223,"width":756,"height":12}},{"id":"a4c6d2af-1649-4468-8da3-5caa097c6204","block_type":"box","text":"balance of independence. We may also vote against the election of the chair of the committee","page_number":211,"box":{"x":117,"y":239,"width":701,"height":12}},{"id":"8627bfa3-c4ed-4309-ab83-4e0a29f4a160","block_type":"box","text":"responsible for board composition if this is a perennial issue.","page_number":211,"box":{"x":117,"y":254,"width":453,"height":12}},{"id":"28726adc-0c2d-4a2a-8735-ab6fdf4c1fde","block_type":"box","text":"Independent board leadership","page_number":211,"box":{"x":116,"y":283,"width":245,"height":12}},{"id":"603616b3-a6ed-491e-aaca-59743e87e341","block_type":"box","text":"Practices across markets differ, as do board structures, but we observe two main approaches to","page_number":211,"box":{"x":117,"y":312,"width":718,"height":12}},{"id":"9122b212-3677-42de-922c-40d95362f209","block_type":"box","text":"independent board leadership. One is a non-executive, independent chair of the board who is","page_number":211,"box":{"x":117,"y":327,"width":697,"height":12}},{"id":"e0fa1ca0-72c4-432f-aa96-f0c822f82f3d","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":211,"box":{"x":117,"y":342,"width":738,"height":12}},{"id":"6f0fecba-e101-45d7-a265-dc4d5e770002","block_type":"box","text":"independent director, who is responsible for coordinating with the other non-executive directors and","page_number":211,"box":{"x":117,"y":357,"width":742,"height":12}},{"id":"6ef2cfc0-0f0b-4661-b7b3-00afe4bd1740","block_type":"box","text":"working closely with the executive chair on the board agenda and other board procedures. In this case,","page_number":211,"box":{"x":116,"y":372,"width":770,"height":11}},{"id":"3fcab0e2-0a35-42da-9b8d-6b09a6a34a79","block_type":"box","text":"the executive chair and the lead independent director work together to ensure the board is effectively","page_number":211,"box":{"x":116,"y":386,"width":754,"height":12}},{"id":"4f708d03-dd16-42ee-9fd8-40f4e874f982","block_type":"box","text":"fulfilling its responsibilities. In our view, the independent leader of the board, and/or the chair of a","page_number":211,"box":{"x":116,"y":401,"width":723,"height":12}},{"id":"57d87732-9cb2-4a65-8781-06169eefef51","block_type":"box","text":"relevant committee, should be available to investors to discuss governance matters such as CEO","page_number":211,"box":{"x":117,"y":416,"width":727,"height":12}},{"id":"2e3cc182-ab11-4dad-95d1-290f61730f7d","block_type":"box","text":"succession, executive pay, and board performance. We look to boards to explain their board","page_number":211,"box":{"x":116,"y":431,"width":691,"height":12}},{"id":"54e40f53-abdd-4a9e-b573-f9d078fcb3c4","block_type":"box","text":"leadership model and how it serves the interests of shareholders.","page_number":211,"box":{"x":117,"y":446,"width":489,"height":12}},{"id":"5d5474ff-ecd5-4110-8a60-e0c55f9f3828","block_type":"box","text":"We may vote against the election of the chair of the committee responsible for board composition if","page_number":211,"box":{"x":116,"y":475,"width":740,"height":12}},{"id":"a44de124-bf23-4e80-a53d-e59d24e824d9","block_type":"box","text":"there is not an identified independent leader of the board with clear responsibilities for board","page_number":211,"box":{"x":116,"y":490,"width":689,"height":12}},{"id":"cd24e139-2528-4049-87c6-474c20c43941","block_type":"box","text":"performance. We may vote against the most senior independent director if the board has a policy of","page_number":211,"box":{"x":117,"y":506,"width":744,"height":12}},{"id":"7fdf0545-148a-4271-9d78-fce3f19be710","block_type":"box","text":"not engaging with shareholders.","page_number":211,"box":{"x":117,"y":522,"width":242,"height":12}},{"id":"ec5d8f29-b1d5-4561-a0b4-08cc70f13913","block_type":"box","text":"Tenure and succession","page_number":211,"box":{"x":118,"y":551,"width":189,"height":9}},{"id":"d2316dde-02f5-4c50-9fe2-e3109d1d077c","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":211,"box":{"x":117,"y":580,"width":745,"height":12}},{"id":"9664ba6d-2790-412f-acd8-a1179ec0fea9","block_type":"box","text":"expected to serve, in line with market norms where those exist. We find it helpful when companies","page_number":211,"box":{"x":116,"y":595,"width":733,"height":12}},{"id":"efc0528e-0043-4992-8879-9ed45c297262","block_type":"box","text":"disclose their approach to director tenure particularly around the contributions of directors who have","page_number":211,"box":{"x":116,"y":611,"width":745,"height":12}},{"id":"02d527df-402f-4648-8a8c-cb955b7c6646","block_type":"box","text":"served for longer periods than typically provided for under local practice. In our experience, long","page_number":211,"box":{"x":116,"y":626,"width":718,"height":13}},{"id":"62663229-0cc6-4007-9d21-86975f55f9ac","block_type":"box","text":"serving directors could become less independent given their long-term relationship with management","page_number":211,"box":{"x":116,"y":642,"width":755,"height":12}},{"id":"bc4ade1b-3b31-416d-a54a-318ef77b00eb","block_type":"box","text":"and involvement in past board decisions.","page_number":211,"box":{"x":116,"y":658,"width":308,"height":11}},{"id":"43f59f99-b48b-4d0e-a11b-c4a6e293b356","block_type":"box","text":"Succession planning for board roles helps achieve the appropriate cadence of turnover that balances","page_number":211,"box":{"x":116,"y":687,"width":750,"height":12}},{"id":"34734858-6e66-44b5-b1bb-9695bcc08c38","block_type":"box","text":"renewal through the regular introduction of directors with fresh perspectives and expertise with","page_number":211,"box":{"x":117,"y":702,"width":699,"height":12}},{"id":"990bbb8a-5adc-40c3-9a77-647bedcd1f73","block_type":"box","text":"continuity through the retention of directors with long-term knowledge of the board and company.","page_number":211,"box":{"x":116,"y":718,"width":718,"height":12}},{"id":"9aab2bdf-068c-4761-80e7-45b7df112778","block_type":"box","text":"In markets where there is not specific director tenure guidance from regulation or corporate","page_number":211,"box":{"x":117,"y":746,"width":675,"height":12}},{"id":"0340bcbd-7e2b-42b1-8784-6458f493bee3","block_type":"box","text":"governance best practices, we may vote against the election of the chair of the committee responsible","page_number":211,"box":{"x":116,"y":760,"width":757,"height":12}},{"id":"5c40c3a0-adae-46d7-8f4c-db52a5066086","block_type":"box","text":"for board composition if a company does not clearly disclose its approach to director tenure and board","page_number":211,"box":{"x":116,"y":774,"width":757,"height":12}},{"id":"3b1f54b3-d9c6-47db-a737-5a8f8be1d542","block_type":"box","text":"renewal. We may vote against the election of directors who have served for more years than is typical","page_number":211,"box":{"x":117,"y":788,"width":754,"height":12}},{"id":"a5998bba-48ff-40e0-b24a-69e469cc7f96","block_type":"box","text":"in markets with specific guidance, where the case for their continued service is not evident.","page_number":211,"box":{"x":117,"y":803,"width":673,"height":12}},{"id":"056edd4e-6a7e-4ebe-9096-80ae1237c516","block_type":"box","text":"7","page_number":211,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"26b96f3e-6eac-4268-a03a-7f6af7a4063c","block_type":"box","text":"Common impediments to independence may include but are not limited to: current or recent employment at the","page_number":211,"box":{"x":170,"y":828,"width":659,"height":9}},{"id":"7e382c0c-ec28-49ca-a7d7-a6514ac12542","block_type":"box","text":"company or a subsidiary; being, or representing, a shareholder with a substantial shareholding in the company;","page_number":211,"box":{"x":170,"y":841,"width":659,"height":9}},{"id":"d3f5564b-e69b-4ee9-bef5-ac69a6028ea2","block_type":"box","text":"interlocking directorships; lengthy tenure, and having any other interest, business, or other relationship which could, or","page_number":211,"box":{"x":170,"y":854,"width":702,"height":9}},{"id":"80b0dce4-2dda-4afa-a4df-a485b0e1e6c8","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":211,"box":{"x":170,"y":866,"width":703,"height":10}},{"id":"609789bf-e965-477c-9be3-d1772be3e488","block_type":"box","text":"and shareholders.","page_number":211,"box":{"x":170,"y":880,"width":106,"height":7}},{"id":"dd97f86d-5454-431f-bd41-ac6f08196575","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":211,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"ee3c0bc6-c791-4d20-a186-49c90d4279c1","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":211,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"bd5ed075-5c2a-40af-be6b-005788515efd","block_type":"box","text":"7","page_number":211,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"97722424-a87c-4097-83f3-0acf364fd256","block_type":"box","text":"NM1026U-6030748-211/260","page_number":211,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"66ebbf70-7ea9-40f6-930d-5e097e1977a1","block_type":"box","text":"Capacity","page_number":212,"box":{"x":117,"y":87,"width":74,"height":12}},{"id":"d01c6343-4dcb-42c9-b7cd-871d589bd00c","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":212,"box":{"x":116,"y":118,"width":757,"height":13}},{"id":"03c17683-bcbe-451e-998b-ffc425ede03c","block_type":"box","text":"view, an effective board will assess the ability of its members to maintain an appropriate focus on","page_number":212,"box":{"x":116,"y":134,"width":726,"height":12}},{"id":"0977fb69-af30-433e-8831-8baaf9d926dc","block_type":"box","text":"board matters and the company taking into consideration competing responsibilities. We recognize that","page_number":212,"box":{"x":117,"y":150,"width":770,"height":12}},{"id":"03cb7d8f-f02d-4fda-95f7-896d8d2b5424","block_type":"box","text":"board leadership roles vary across markets in responsibilities and required time commitment but note","page_number":212,"box":{"x":117,"y":165,"width":756,"height":12}},{"id":"f5f8f201-4504-4086-8cb3-be3da54239fc","block_type":"box","text":"that they are generally more intensive than a standard directorship. We will take local norms and","page_number":212,"box":{"x":116,"y":181,"width":721,"height":12}},{"id":"67784301-5607-4098-a8d0-e71244953703","block_type":"box","text":"practices into consideration when making our voting determinations across markets.","page_number":212,"box":{"x":117,"y":196,"width":628,"height":12}},{"id":"6aeaa8a1-7170-4850-b723-c27b46f6f143","block_type":"box","text":"We may vote against the election of directors who do not seem to have sufficient capacity to effectively","page_number":212,"box":{"x":116,"y":227,"width":769,"height":13}},{"id":"f877e3b4-789b-4ac2-ab79-c6a07001d87c","block_type":"box","text":"fulfil their duties to the board and company.","page_number":212,"box":{"x":116,"y":243,"width":326,"height":12}},{"id":"f0eee760-8b96-45de-9dd6-b8534f162eae","block_type":"box","text":"Director elections","page_number":212,"box":{"x":116,"y":275,"width":147,"height":9}},{"id":"8ad2002b-187e-4e0d-9954-1a084beaf01c","block_type":"box","text":"Regular election of directors, ideally annually, supports director accountability to shareholders. A","page_number":212,"box":{"x":117,"y":306,"width":720,"height":12}},{"id":"79a192f4-2ed3-4392-bda1-26b940e47c9c","block_type":"box","text":"classified board structure","page_number":212,"box":{"x":116,"y":321,"width":186,"height":10}},{"id":"fed57613-c903-4e89-a4bd-6436a00abe89","block_type":"box","text":"8","page_number":212,"box":{"x":303,"y":321,"width":5,"height":7}},{"id":"954e9460-5ff9-4cab-a1b8-2f436e8f75d4","block_type":"box","text":"may be justified by a company when it needs consistency and stability","page_number":212,"box":{"x":309,"y":321,"width":530,"height":12}},{"id":"978b8858-b95a-42e6-b147-f316d6581abb","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":212,"box":{"x":116,"y":337,"width":754,"height":12}},{"id":"614bcd4f-61ec-4863-82c1-854c511590d0","block_type":"box","text":"as closed-end funds).","page_number":212,"box":{"x":116,"y":352,"width":165,"height":12}},{"id":"35aa7241-24a9-4c0f-a50b-f2aacfd906ac","block_type":"box","text":"Shareholders should have the opportunity to evaluate nominated directors individually rather than in","page_number":212,"box":{"x":116,"y":384,"width":746,"height":12}},{"id":"92e46c6a-9d93-43c7-b835-ae52afa8b4c3","block_type":"box","text":"bundled slates. We look to companies to provide sufficient information on each director standing for","page_number":212,"box":{"x":117,"y":399,"width":743,"height":12}},{"id":"80fb31f2-4467-403d-9e3f-6824d67dbca3","block_type":"box","text":"election so that shareholders can assess their capabilities and suitability. We will generally not support","page_number":212,"box":{"x":116,"y":415,"width":765,"height":12}},{"id":"1fc323dd-ba75-491c-a246-84fc16cc97e2","block_type":"box","text":"the election of directors whose names and biographical details have not been disclosed sufficiently in","page_number":212,"box":{"x":116,"y":430,"width":755,"height":12}},{"id":"885de533-144d-4ee6-bbb6-513eca2e5717","block_type":"box","text":"advance of the shareholder meeting.","page_number":212,"box":{"x":116,"y":446,"width":278,"height":12}},{"id":"770ab534-7e79-4fe3-a7d8-d3c09f594dc6","block_type":"box","text":"Each director’s appointment should be dependent on receiving a simple majority of the votes cast at","page_number":212,"box":{"x":117,"y":477,"width":746,"height":12}},{"id":"4fee7e88-9652-46e7-9e6e-cc7a6311f003","block_type":"box","text":"the shareholder meeting. Where a company’s practices differ, we look to the board to provide a","page_number":212,"box":{"x":116,"y":493,"width":712,"height":12}},{"id":"4fcc01d8-c88d-478a-9897-e0183593cd68","block_type":"box","text":"detailed explanation as to how its approach best serves investors’ interests.","page_number":212,"box":{"x":116,"y":508,"width":567,"height":12}},{"id":"095bd44e-5efa-418d-a56a-65298fd984f6","block_type":"box","text":"We may vote for shareholder or management proposals seeking to establish annual election of","page_number":212,"box":{"x":116,"y":540,"width":710,"height":12}},{"id":"0c00456a-846f-4077-8d22-aaf7693a65ef","block_type":"box","text":"directors and/or a simple majority vote standard for director elections. We may vote against all the","page_number":212,"box":{"x":116,"y":555,"width":732,"height":12}},{"id":"2703a500-82c5-4cea-b7b2-695da7c8b59d","block_type":"box","text":"directors standing for election as part of a single slate if we have concerns about the profile or","page_number":212,"box":{"x":116,"y":571,"width":701,"height":12}},{"id":"ff4b6101-0b76-4cad-a282-99510122b600","block_type":"box","text":"performance of an individual director.","page_number":212,"box":{"x":117,"y":586,"width":280,"height":12}},{"id":"5bc10933-a7a3-4ec9-ad8a-00f4fffc8069","block_type":"box","text":"Committees","page_number":212,"box":{"x":117,"y":618,"width":100,"height":9}},{"id":"2eac01a7-20fe-4084-a82f-29b688a8d6dc","block_type":"box","text":"Many boards establish committees to focus on specific responsibilities of the board such as audit and","page_number":212,"box":{"x":117,"y":649,"width":757,"height":12}},{"id":"d0ef7c09-a87e-4490-b52c-af6d57efead7","block_type":"box","text":"risk, governance and human capital, and executive compensation, amongst other matters. We do not","page_number":212,"box":{"x":117,"y":665,"width":751,"height":12}},{"id":"c9314c1f-591b-4d8a-8a75-a095c50ce567","block_type":"box","text":"prescribe to companies what committees they should establish, but we seek to understand the board’s","page_number":212,"box":{"x":117,"y":680,"width":760,"height":12}},{"id":"2f5f4601-051d-48e4-a151-ff9c7bff337b","block_type":"box","text":"rationale for the committee structure it determines is appropriate. We note that, in some markets,","page_number":212,"box":{"x":117,"y":696,"width":717,"height":12}},{"id":"e2da9f11-c123-4438-b642-c24267f97190","block_type":"box","text":"regulation requires such committees. The responsibilities of each committee should be clear, and the","page_number":212,"box":{"x":117,"y":711,"width":748,"height":12}},{"id":"7deaea4b-e19e-4d26-9095-40cb343173c2","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":212,"box":{"x":117,"y":727,"width":706,"height":12}},{"id":"aaffe1db-742c-4ea1-adcb-e629299121fa","block_type":"box","text":"committees. It is helpful to investor understanding when the board discloses the structure,","page_number":212,"box":{"x":116,"y":742,"width":665,"height":12}},{"id":"9d25903f-bc9c-40c7-bebe-13b5492f6eee","block_type":"box","text":"membership, proportion of independent directors, and responsibilities of each committee. The","page_number":212,"box":{"x":117,"y":758,"width":694,"height":12}},{"id":"d3695f07-e53b-4294-a54e-a3ec70de24ba","block_type":"box","text":"responsibilities we typically see assigned to the three most common committees include:","page_number":212,"box":{"x":117,"y":773,"width":656,"height":12}},{"id":"eb35491d-062a-44ad-8e42-c55ab14cf006","block_type":"box","text":"• Audit and risk – oversight responsibilities for the integrity of financial reporting, risk management","page_number":212,"box":{"x":117,"y":805,"width":747,"height":12}},{"id":"3690bc25-88f5-46d5-b990-5026fd97d2cc","block_type":"box","text":"and compliance with legal and regulatory requirements; may also play an oversight role in relation","page_number":212,"box":{"x":150,"y":820,"width":725,"height":12}},{"id":"a4deb470-7ed1-4bc0-914b-72c7d3dd504d","block_type":"box","text":"to the internal audit function and whistleblowing mechanisms.","page_number":212,"box":{"x":150,"y":836,"width":460,"height":12}},{"id":"18f041d2-650d-402c-8e75-860418079d64","block_type":"box","text":"8","page_number":212,"box":{"x":116,"y":862,"width":5,"height":6}},{"id":"f56f9a01-e7fe-416a-a6bc-f68fcc869cb0","block_type":"box","text":"A classified board divides the directors into classes with different overlapping terms. As a result,","page_number":212,"box":{"x":122,"y":862,"width":744,"height":12}},{"id":"93128cc7-c36c-43ec-9976-f9de40c7f3a8","block_type":"box","text":"only one class of directors stands for election in any one year.","page_number":212,"box":{"x":150,"y":877,"width":464,"height":12}},{"id":"e7a7551d-c711-43e1-b278-4499f11e38fc","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":212,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"4740e733-bfbf-41e9-abb7-90724c051003","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":212,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"0c17b611-c475-4a84-a24e-8d9d045bde63","block_type":"box","text":"8","page_number":212,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"7cd3c309-be8b-4974-b3e4-7cbc139b6607","block_type":"box","text":"NM1026U-6030748-212/260","page_number":212,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c01ca306-5a9a-4f60-844a-45ea851f7ff1","block_type":"box","text":"• Nominating, governance and human capital – oversight responsibilities for corporate governance","page_number":213,"box":{"x":117,"y":87,"width":756,"height":12}},{"id":"dc399c5b-a5f5-437e-962f-ef88231f17b9","block_type":"box","text":"principles and practices of the company, including the periodic review of board performance;","page_number":213,"box":{"x":150,"y":102,"width":691,"height":13}},{"id":"a8fda37a-b825-4582-a7e9-2ec2af4e781a","block_type":"box","text":"responsibility for succession planning for CEO and key board roles, as well as the director","page_number":213,"box":{"x":150,"y":118,"width":672,"height":12}},{"id":"d2adae7f-3afe-48c0-8632-ad19fe1f9eca","block_type":"box","text":"appointment process; may also have oversight responsibilities for human capital management","page_number":213,"box":{"x":150,"y":134,"width":703,"height":12}},{"id":"693f0bcd-c56f-49f2-88d3-78ec71411c66","block_type":"box","text":"strategies, including corporate culture and purpose.","page_number":213,"box":{"x":150,"y":149,"width":387,"height":12}},{"id":"82b93173-4be7-463a-8fa8-1ebd5ac795e4","block_type":"box","text":"• Executive compensation – determines the compensation policies and programs for the CEO and","page_number":213,"box":{"x":117,"y":174,"width":755,"height":12}},{"id":"ba89aa2d-7936-4fd8-9ff4-24a9b2eb1418","block_type":"box","text":"other executive officers, approves annual awards and payments under the policies; may also have","page_number":213,"box":{"x":150,"y":189,"width":735,"height":12}},{"id":"dfeec5db-96ea-4245-8890-ecdd83514fa0","block_type":"box","text":"oversight responsibilities for firm-wide compensation policies.","page_number":213,"box":{"x":150,"y":205,"width":460,"height":12}},{"id":"2aec7a2b-700d-4d27-82d9-a9608539cbc3","block_type":"box","text":"We may vote against the election of the chair of the committee or other directors serving as committee","page_number":213,"box":{"x":116,"y":239,"width":765,"height":12}},{"id":"81d11f28-e09c-4099-aa1a-5cd4d8f5a751","block_type":"box","text":"members to convey concerns about how a committee has undertaken its responsibilities. We may vote","page_number":213,"box":{"x":117,"y":255,"width":767,"height":12}},{"id":"3fcd940a-efd8-421c-9f37-ef76a281704d","block_type":"box","text":"against the election of the most senior non-executive director if there is not a clearly disclosed","page_number":213,"box":{"x":116,"y":270,"width":702,"height":12}},{"id":"44e28b8d-84c7-451b-8a50-7c68a156799c","block_type":"box","text":"approach to board committees.","page_number":213,"box":{"x":116,"y":286,"width":236,"height":11}},{"id":"21e32112-6599-4ff8-ab37-d93406ee3e86","block_type":"box","text":"Board and director evaluation","page_number":213,"box":{"x":116,"y":320,"width":243,"height":9}},{"id":"48f535b0-ac31-4e3f-9558-e868cfae32b1","block_type":"box","text":"We consider it best practice for companies to conduct an annual review of the performance of the","page_number":213,"box":{"x":116,"y":354,"width":729,"height":12}},{"id":"2e79b9e6-2b80-40a1-bdaa-0fd8c083ddaa","block_type":"box","text":"board, the committees, the chair and individual directors. Periodically, this review could be undertaken","page_number":213,"box":{"x":117,"y":369,"width":762,"height":12}},{"id":"e76e3235-3c4f-4de9-bae4-f8084f796a78","block_type":"box","text":"by an independent third party able to bring objective perspectives to the board on governance and","page_number":213,"box":{"x":117,"y":385,"width":732,"height":12}},{"id":"0406fc92-ebca-4033-96c9-15f529e8781f","block_type":"box","text":"performance. We encourage companies to disclose their approach to and the objectives of","page_number":213,"box":{"x":117,"y":400,"width":677,"height":12}},{"id":"29902a10-726d-4082-bd24-39f0a0078830","block_type":"box","text":"evaluations, including any changes made to the board’s approach as a result.","page_number":213,"box":{"x":116,"y":416,"width":581,"height":12}},{"id":"f455ec2f-e9b7-4e96-8b10-e8215c61c199","block_type":"box","text":"Access to independent advice","page_number":213,"box":{"x":116,"y":450,"width":246,"height":12}},{"id":"2e63af2b-133a-4a7b-bad0-48c481e3dabc","block_type":"box","text":"To support the directors in effectively fulfilling their duties to the company and shareholders, they","page_number":213,"box":{"x":116,"y":484,"width":723,"height":12}},{"id":"5fa40b71-a266-4dde-ac72-21d7b200fc8f","block_type":"box","text":"should have access to independent advice. In certain circumstances, it may be helpful to boards to","page_number":213,"box":{"x":116,"y":499,"width":738,"height":13}},{"id":"adfd9fa7-223d-4c52-89f8-0b83485c9595","block_type":"box","text":"retain independent third parties to advise on critical matters. These might include new industry","page_number":213,"box":{"x":117,"y":515,"width":703,"height":12}},{"id":"98e1033f-d7db-4321-b86e-0dc2dedcdbd4","block_type":"box","text":"developments such as emergent and disruptive technology, operating events with material","page_number":213,"box":{"x":116,"y":531,"width":676,"height":12}},{"id":"2efc2855-39a7-41be-858d-fc3a4b969a9c","block_type":"box","text":"consequences for the company’s reputation and/or performance, or significant transactions. Board","page_number":213,"box":{"x":116,"y":546,"width":735,"height":12}},{"id":"cbd2df10-55ef-4425-9d91-6037289bbe81","block_type":"box","text":"committees may similarly retain third parties to advise them on specialist matters such as audit,","page_number":213,"box":{"x":116,"y":562,"width":713,"height":12}},{"id":"a672200c-8492-4315-8332-54a7f80a29b5","block_type":"box","text":"compensation and succession planning.","page_number":213,"box":{"x":116,"y":577,"width":303,"height":12}},{"id":"5fe33d45-35cd-46a4-81a0-92f503b42fe0","block_type":"box","text":"Executive compensation","page_number":213,"box":{"x":402,"y":620,"width":201,"height":12}},{"id":"22113928-7bb5-4aee-9fb7-75a62dc9787c","block_type":"box","text":"Boards play an important role in establishing compensation arrangements that enable the company to","page_number":213,"box":{"x":117,"y":655,"width":760,"height":12}},{"id":"5613f380-2b37-4d21-af41-6bec206f3b44","block_type":"box","text":"recruit, retain and reward the caliber of executive management necessary to lead and operate the","page_number":213,"box":{"x":117,"y":670,"width":724,"height":12}},{"id":"0452d8c7-57d2-4ed5-a2cb-3faf1681d0f8","block_type":"box","text":"company to deliver superior financial returns over time. We focus on alignment between variable pay","page_number":213,"box":{"x":116,"y":685,"width":748,"height":13}},{"id":"dfed09fd-0f33-4039-980b-bd26efc62f1c","block_type":"box","text":"and a company’s financial performance.","page_number":213,"box":{"x":116,"y":701,"width":296,"height":12}},{"id":"ec24490a-23d2-4bf8-881c-8401000f0934","block_type":"box","text":"Generally, executive compensation arrangements have four components: base salary, annual bonus","page_number":213,"box":{"x":117,"y":735,"width":746,"height":12}},{"id":"89df4ea3-16f7-4d52-9381-0f9420a41dfd","block_type":"box","text":"that rewards performance against short-term metrics, incentives—most often share-based- that reward","page_number":213,"box":{"x":116,"y":751,"width":762,"height":12}},{"id":"337e1f3b-af06-439a-bcbd-9b59315b2f55","block_type":"box","text":"performance against long-term metrics, and pensions and benefits. In our observation, base salary,","page_number":213,"box":{"x":117,"y":766,"width":736,"height":12}},{"id":"345a88b5-6f2d-4e6c-a38e-e933bf00cde2","block_type":"box","text":"pensions and benefits are largely set relative to market norms and benchmarks. The annual bonus and","page_number":213,"box":{"x":117,"y":782,"width":763,"height":12}},{"id":"d6e706d5-e2a1-455b-9699-83d144f4d1a0","block_type":"box","text":"share-based incentive, or variable pay plans, tend to be tailored to the company, its sector and long","page_number":213,"box":{"x":116,"y":797,"width":744,"height":12}},{"id":"31d10f59-9e04-459e-ae91-ebf81b9e36da","block_type":"box","text":"term strategy, as well as the individuals the board is seeking to recruit and motivate.","page_number":213,"box":{"x":116,"y":813,"width":622,"height":12}},{"id":"017257b4-f12a-4085-accf-a0c843c96e1b","block_type":"box","text":"Recognizing the unique circumstances of each company, we determine whether to support a","page_number":213,"box":{"x":117,"y":847,"width":693,"height":12}},{"id":"b3cd9a73-fe12-4aef-bd28-987ebec6e9d1","block_type":"box","text":"company’s approach to executive compensation on a case-by-case basis. We rely on companies","page_number":213,"box":{"x":116,"y":862,"width":726,"height":12}},{"id":"b7fe6688-0ea7-4e09-8fa4-9b0f4e72264d","block_type":"box","text":"providing sufficient quantitative and qualitative information in their disclosures to enable shareholders","page_number":213,"box":{"x":117,"y":878,"width":754,"height":12}},{"id":"8da8992b-8dc3-4647-bc82-4f2d07faa21a","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":213,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"67d3b983-cc61-4065-aa1f-de7c46f3b715","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":213,"box":{"x":539,"y":909,"width":324,"height":12}},{"id":"8569afd7-4caf-487c-ac52-1001d9ae66a7","block_type":"box","text":"9","page_number":213,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"eca7a9cf-fef3-4dcf-9709-ad38c72dd888","block_type":"box","text":"NM1026U-6030748-213/260","page_number":213,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"da6e909f-1d6b-486c-940f-2bf1ce0eefde","block_type":"box","text":"to understand the compensation arrangements and assess the alignment with investors’ interests.","page_number":214,"box":{"x":116,"y":87,"width":732,"height":12}},{"id":"ba62a10c-540a-4b44-b735-f0dd73d782cb","block_type":"box","text":"Features we look for in compensation arrangements include:","page_number":214,"box":{"x":117,"y":102,"width":454,"height":13}},{"id":"ef05f4e6-183c-453b-8679-a783a562b2e2","block_type":"box","text":"• Fixed pay components, including base salary, benefits and prerequisites that are appropriate in","page_number":214,"box":{"x":117,"y":133,"width":744,"height":12}},{"id":"009e3dd8-0f74-46a7-b69b-418a0ffdd035","block_type":"box","text":"the context of the company’s size, sector and market.","page_number":214,"box":{"x":150,"y":148,"width":402,"height":12}},{"id":"fad44a38-59c9-4ab6-9228-4bbc8830b968","block_type":"box","text":"• Variable pay subject to performance metrics that are closely linked to the company’s short- and","page_number":214,"box":{"x":117,"y":171,"width":745,"height":12}},{"id":"b59635c2-ad20-42f6-9394-767e7e13be88","block_type":"box","text":"long-term strategic objectives.","page_number":214,"box":{"x":150,"y":187,"width":228,"height":12}},{"id":"4e8f9b7f-5b8c-47f7-9c4a-9c96181ac585","block_type":"box","text":"• Long-term incentives that motivate sustained performance across a multi-year period.","page_number":214,"box":{"x":117,"y":210,"width":674,"height":12}},{"id":"49a4d899-b77c-4040-94ed-f55f813ba4cf","block_type":"box","text":"• A balance between fixed and variable pay, short- and long-term incentives, and specific","page_number":214,"box":{"x":117,"y":233,"width":687,"height":12}},{"id":"1f2c5e04-0f1b-4623-a38c-4496c93a548e","block_type":"box","text":"instruments (cash and equity awards) that promotes pay program durability and seldom","page_number":214,"box":{"x":150,"y":248,"width":654,"height":12}},{"id":"be3dee13-3ae8-4a06-9d12-c502d77b4c9c","block_type":"box","text":"necessitates one-off, discretionary payments.","page_number":214,"box":{"x":150,"y":264,"width":342,"height":12}},{"id":"3104954c-179b-4ff9-98e0-e73aaa33b206","block_type":"box","text":"• Pay outcomes that are consistent with the returns to investors over the relevant time period.","page_number":214,"box":{"x":117,"y":287,"width":720,"height":12}},{"id":"6fe640fb-2887-4a0b-9078-6735543e1922","block_type":"box","text":"• Board discretion, if allowed within the variable pay arrangements, to be used sparingly,","page_number":214,"box":{"x":117,"y":310,"width":683,"height":12}},{"id":"30bb9967-8ead-4ca4-be9b-971c7c386a75","block_type":"box","text":"responsibly and transparently.","page_number":214,"box":{"x":150,"y":325,"width":228,"height":12}},{"id":"90cdd432-b026-4ed0-a10d-10362faeb584","block_type":"box","text":"• A requirement, that participants in long-term share-based incentive plans build a meaningful","page_number":214,"box":{"x":117,"y":348,"width":720,"height":12}},{"id":"8d99f2b1-143c-410e-b7ce-408c56649bcc","block_type":"box","text":"shareholding in the company within a defined time period, as determined by the board or relevant","page_number":214,"box":{"x":150,"y":363,"width":727,"height":13}},{"id":"6a26ec2b-b3f5-42c5-9dc4-636253a03fde","block_type":"box","text":"board committee.","page_number":214,"box":{"x":150,"y":379,"width":134,"height":10}},{"id":"b7b5e2dc-3ff8-4bc3-a737-12c2faac09f0","block_type":"box","text":"• Change of control provisions that appropriately balance the interests of executives and","page_number":214,"box":{"x":117,"y":402,"width":681,"height":12}},{"id":"913e28d6-c2fb-4e31-9310-540ad0578a2e","block_type":"box","text":"shareholders.","page_number":214,"box":{"x":150,"y":418,"width":106,"height":9}},{"id":"dbbcdcbc-e720-4062-a4da-3d8857a8d2e1","block_type":"box","text":"• Clawback or malus provisions that allow the company to recoup or hold back variable","page_number":214,"box":{"x":117,"y":440,"width":671,"height":12}},{"id":"14323885-684d-4a46-bebd-02a45dad5088","block_type":"box","text":"compensation from individuals whose awards were based on fraudulent activities, misstated","page_number":214,"box":{"x":150,"y":456,"width":688,"height":12}},{"id":"219902f7-6d28-45f7-b8c7-1e8e255be940","block_type":"box","text":"financial reports, or executive misconduct.","page_number":214,"box":{"x":149,"y":471,"width":318,"height":12}},{"id":"c932192c-e444-4780-a6ac-1de729edbfaa","block_type":"box","text":"• Severance arrangements that protect the company’s interests but do not cost more than is","page_number":214,"box":{"x":117,"y":494,"width":709,"height":12}},{"id":"a64e63cf-bcb2-4210-8ec6-35135334a0b6","block_type":"box","text":"contractual.","page_number":214,"box":{"x":150,"y":510,"width":91,"height":9}},{"id":"cffe882e-ad44-4770-8747-572ee7be8a00","block_type":"box","text":"We may vote against proposals to introduce new share-based incentives, approve existing policies or","page_number":214,"box":{"x":116,"y":540,"width":757,"height":12}},{"id":"f1b4c144-bc03-4296-9404-971ce4ed0c12","block_type":"box","text":"plans, or approve the compensation report where we do not see alignment between executive","page_number":214,"box":{"x":117,"y":556,"width":701,"height":12}},{"id":"aba4cb65-2db2-4978-b417-398510bba965","block_type":"box","text":"compensation arrangements and our clients’ financial interests. When there is not an alternative, or","page_number":214,"box":{"x":116,"y":571,"width":742,"height":12}},{"id":"00d18916-e420-455f-a393-d3d45894f5d6","block_type":"box","text":"where there have been multi-year issues with compensation misaligned with performance, we may","page_number":214,"box":{"x":116,"y":587,"width":738,"height":12}},{"id":"eb81a8cd-ae50-4eb2-af43-ebd5350c612c","block_type":"box","text":"vote against the election of the chair of the responsible committee, or the most senior independent","page_number":214,"box":{"x":116,"y":602,"width":735,"height":12}},{"id":"b73f62d7-5282-4905-b243-56b91196028e","block_type":"box","text":"director.","page_number":214,"box":{"x":116,"y":618,"width":65,"height":9}},{"id":"415272e8-4eb9-44cb-949d-5edb455e192c","block_type":"box","text":"Non-executive director compensation","page_number":214,"box":{"x":350,"y":656,"width":305,"height":11}},{"id":"d73d2421-b96f-4d87-b31f-14e3c6ff4506","block_type":"box","text":"Companies generally pay non-executive directors an annual retainer or fee in cash, shares or a","page_number":214,"box":{"x":117,"y":686,"width":706,"height":12}},{"id":"81e21bb0-e9b8-475d-9622-0809c659d40f","block_type":"box","text":"combination of the two. Some companies also pay additional fees for service on board committees or","page_number":214,"box":{"x":116,"y":701,"width":752,"height":12}},{"id":"1277b227-1ce2-4640-8a6b-707f098f0c2c","block_type":"box","text":"in board leadership roles. We do not support non-executive directors participating in performance","page_number":214,"box":{"x":117,"y":717,"width":726,"height":12}},{"id":"4a4ac617-0f70-4ca9-b2cc-3c1ddeac87cb","block_type":"box","text":"based incentive plans as doing so may create a conflict of interest and undermine their independence","page_number":214,"box":{"x":117,"y":732,"width":753,"height":12}},{"id":"67417441-394c-4c62-a650-50d081fb1aec","block_type":"box","text":"from management, whom they oversee.","page_number":214,"box":{"x":116,"y":748,"width":295,"height":12}},{"id":"6b99ca94-10f1-443e-aeb8-361a40c74d9f","block_type":"box","text":"Capital structure","page_number":214,"box":{"x":433,"y":786,"width":133,"height":12}},{"id":"480098fd-2229-42b5-85ff-ca3aa3218ba7","block_type":"box","text":"Boards are responsible for ensuring senior executive leadership has established a capital strategy that","page_number":214,"box":{"x":117,"y":816,"width":760,"height":12}},{"id":"bd62675f-63f6-4f99-88e9-ed47fd48c5d8","block_type":"box","text":"achieves appropriate capital allocation in support of long-term financial resilience.","page_number":214,"box":{"x":116,"y":832,"width":610,"height":12}},{"id":"892f39ab-63a0-4c42-a05c-3c56f8dddd69","block_type":"box","text":"Where company practices diverge from those set out below, we look for companies to disclose why","page_number":214,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"b828ce0f-440a-4ebd-903c-dd9887aacdeb","block_type":"box","text":"they view these practices to be aligned with shareholders’ interests. We may vote against management","page_number":214,"box":{"x":116,"y":878,"width":772,"height":11}},{"id":"1c0fd5e2-f5ca-41eb-9e60-2796819779a3","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":214,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"c706d689-3db1-4903-9e8e-8c55b71226d5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":214,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"37d42271-56d0-41d7-9fa5-ebb3e520b93f","block_type":"box","text":"10","page_number":214,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"58188ea0-18d5-4c7e-bdbc-98eaa369f5f0","block_type":"box","text":"NM1026U-6030748-214/260","page_number":214,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"04936dc9-9aad-488c-9321-615c0f410976","block_type":"box","text":"proposals seeking capital-related authorities, or the election of the most senior independent director, if","page_number":215,"box":{"x":117,"y":87,"width":761,"height":12}},{"id":"c394ebd8-9660-4160-aa11-59ce013dd713","block_type":"box","text":"we have concerns about a company’s approach. We may also support a shareholder proposal seeking","page_number":215,"box":{"x":116,"y":103,"width":768,"height":12}},{"id":"525c12af-5790-4e9f-bcc0-1e03f547f0c9","block_type":"box","text":"conversion of shares with differentiated voting rights to a one-share, one-vote standard.","page_number":215,"box":{"x":116,"y":118,"width":655,"height":12}},{"id":"3a649602-e69f-4882-a6f6-f670e4474c4c","block_type":"box","text":"Share","page_number":215,"box":{"x":116,"y":148,"width":46,"height":10}},{"id":"366c16f6-26b0-4a72-9557-b02785522b07","block_type":"box","text":"issuance","page_number":215,"box":{"x":168,"y":149,"width":76,"height":9}},{"id":"b8ccf43a-63ba-4fff-aef5-b3df4e1ddc91","block_type":"box","text":"We assess requests for share issuance for particular transactions on a case-by-case basis. We will","page_number":215,"box":{"x":116,"y":179,"width":741,"height":12}},{"id":"22cad080-ab8d-4abf-90f8-a996710f3cdb","block_type":"box","text":"generally support authorities to issue shares when subject to pre-emptive rights, and up to 20% absent","page_number":215,"box":{"x":116,"y":194,"width":768,"height":12}},{"id":"2123c782-4f00-45b0-be98-4bbae539117b","block_type":"box","text":"pre-emptive rights. We consider it good practice for companies to seek regular approval of these","page_number":215,"box":{"x":117,"y":210,"width":720,"height":12}},{"id":"0e16a3bb-7399-4cd7-9ed8-619e6746ce4f","block_type":"box","text":"authorities to allow shareholders to take into consideration how prior authorities were used, as well as","page_number":215,"box":{"x":116,"y":226,"width":759,"height":11}},{"id":"a2320a11-c734-4bf9-ae02-ed2a43809d17","block_type":"box","text":"the current circumstances of the company and the market environment.","page_number":215,"box":{"x":116,"y":241,"width":536,"height":12}},{"id":"5eab997d-5187-4d87-907c-57dfd97588c3","block_type":"box","text":"Share buybacks","page_number":215,"box":{"x":116,"y":271,"width":133,"height":12}},{"id":"14fb5066-8a42-433c-8800-bf7f192608f4","block_type":"box","text":"We assess share buyback proposals in the context of the company’s disclosed capital management","page_number":215,"box":{"x":116,"y":302,"width":746,"height":12}},{"id":"4c48c7d3-2cb7-4bd7-ba5e-83c533a2a415","block_type":"box","text":"strategy and management’s determination of the appropriate balance between investment that","page_number":215,"box":{"x":116,"y":317,"width":706,"height":12}},{"id":"6cfa7ad5-3ac4-412a-b862-ebae29698efb","block_type":"box","text":"supports the long-term growth of the company and returning cash to investors. We also take into","page_number":215,"box":{"x":116,"y":333,"width":721,"height":12}},{"id":"ee659c5b-734c-46f1-adf1-4036aeccd22f","block_type":"box","text":"consideration the effect of a buyback program on the company’s balance sheet and executive","page_number":215,"box":{"x":116,"y":348,"width":701,"height":12}},{"id":"0c94a2ea-6b7b-415a-a788-80bbc3e5cd31","block_type":"box","text":"compensation arrangements and the price at which shares are repurchased relative to market price.","page_number":215,"box":{"x":116,"y":364,"width":748,"height":12}},{"id":"2e6c5a2c-389f-4110-bc4e-57f0d3ff85d8","block_type":"box","text":"We consider it good practice for companies to seek regular approval of these authorities to allow","page_number":215,"box":{"x":116,"y":379,"width":721,"height":12}},{"id":"d0dadfbd-e9af-49ce-8435-c1ac8447b31f","block_type":"box","text":"shareholders to take into consideration how prior authorities were used, as well as the current","page_number":215,"box":{"x":116,"y":395,"width":700,"height":12}},{"id":"5fc7dee3-8441-4957-8ac4-d818aa848fe2","block_type":"box","text":"circumstances of the company and the market environment.","page_number":215,"box":{"x":116,"y":410,"width":451,"height":12}},{"id":"108955f3-80e1-4090-a6b0-78be4bf40f33","block_type":"box","text":"Dividends","page_number":215,"box":{"x":117,"y":441,"width":84,"height":9}},{"id":"193921d7-1a7d-4fa5-aa8b-47c555e28512","block_type":"box","text":"We generally defer to management and the board on dividend policy but may engage to seek further","page_number":215,"box":{"x":116,"y":471,"width":752,"height":12}},{"id":"53bc6686-5e62-4288-8d68-b20a762c8f55","block_type":"box","text":"clarification where a proposed dividend appears out of line with the company’s financial position.","page_number":215,"box":{"x":116,"y":487,"width":720,"height":12}},{"id":"8490dda4-33f6-4f67-b580-8acd43476f82","block_type":"box","text":"Differentiated voting rights","page_number":215,"box":{"x":117,"y":517,"width":219,"height":12}},{"id":"0cacb98e-df71-4f15-bf1b-804d292d4291","block_type":"box","text":"We prefer companies to adopt a one-share, one-vote structure for share classes with the same","page_number":215,"box":{"x":116,"y":547,"width":710,"height":12}},{"id":"766a29e4-6f59-47f5-a596-3fd8d1848cb8","block_type":"box","text":"economic exposure. Certain companies, particularly those new to public markets, could make the case","page_number":215,"box":{"x":116,"y":563,"width":768,"height":12}},{"id":"46196025-8f2d-4fee-a99a-dc11667a3db1","block_type":"box","text":"to adopt a differentiated voting rights structure, or dual class stock. In those situations, we encourage","page_number":215,"box":{"x":116,"y":578,"width":755,"height":13}},{"id":"ac8fe793-0093-40d8-a62c-daca6d0961e3","block_type":"box","text":"companies to evaluate and seek approval for their capital structure on a periodic basis.","page_number":215,"box":{"x":116,"y":594,"width":650,"height":12}},{"id":"7e6bdbc5-c219-4f05-a37a-61998daaea7d","block_type":"box","text":"Transactions and special situations","page_number":215,"box":{"x":357,"y":632,"width":290,"height":12}},{"id":"6374dc5b-fb8c-4053-8ddd-a139e2ec5bdd","block_type":"box","text":"We monitor developments in transactions and special situations closely and undertake our own","page_number":215,"box":{"x":116,"y":662,"width":706,"height":12}},{"id":"715efd9b-6902-4e7c-adef-9e0fa6294032","block_type":"box","text":"detailed analyses of proposals.","page_number":215,"box":{"x":116,"y":678,"width":229,"height":12}},{"id":"ad433d59-c808-41be-bf31-b42fdfecff4c","block_type":"box","text":"Mergers and acquisitions","page_number":215,"box":{"x":117,"y":708,"width":201,"height":12}},{"id":"e27fe1cf-502c-43af-be56-b8ed9eaf8c80","block_type":"box","text":"We evaluate proposed mergers or acquisitions by assessing the financial outcome for our clients as","page_number":215,"box":{"x":116,"y":739,"width":740,"height":12}},{"id":"2ca0f8bc-c1ab-449a-8b10-404c075d96d1","block_type":"box","text":"minority shareholders. Management should provide an assessment of the proposed transaction’s","page_number":215,"box":{"x":117,"y":754,"width":719,"height":12}},{"id":"802ad6f8-8df9-4bc8-bf4b-6996cadb2ed0","block_type":"box","text":"strategic and financial rationale, along with its execution and operational risks. We review each","page_number":215,"box":{"x":116,"y":770,"width":703,"height":12}},{"id":"bd3466f7-44a4-4e59-af00-06813839c885","block_type":"box","text":"transaction independently based on these factors and the degree to which the transaction enhances","page_number":215,"box":{"x":116,"y":785,"width":743,"height":12}},{"id":"3a1a0ca0-2e01-4c7b-bcd6-8c63a8e4b261","block_type":"box","text":"shareholder value. The board might consider establishing an ad hoc transaction committee to","page_number":215,"box":{"x":116,"y":801,"width":693,"height":12}},{"id":"b613e015-7ca3-40ba-935f-510cf3a01d7e","block_type":"box","text":"undertake an independent assessment of a significant merger or acquisition, in advance of making its","page_number":215,"box":{"x":117,"y":816,"width":752,"height":12}},{"id":"8a9bdd2c-d16d-4721-a984-a5ff953fb89d","block_type":"box","text":"recommendation to shareholders.","page_number":215,"box":{"x":117,"y":832,"width":254,"height":9}},{"id":"2882be5c-617f-4a0c-8128-561e7aa81c65","block_type":"box","text":"We will vote against transactions that, in our assessment, do not advance our clients’ financial","page_number":215,"box":{"x":116,"y":862,"width":703,"height":12}},{"id":"5fbe73bb-d504-4ca6-8260-f0cbf9d6035a","block_type":"box","text":"interests.","page_number":215,"box":{"x":117,"y":878,"width":72,"height":9}},{"id":"6005d176-eaa7-4426-9c09-ab7c4ed665c9","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":215,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"607ec43d-593e-4e91-9d71-951c888562c9","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":215,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"6f7091d6-bae4-4d34-a660-dbb0966cc6ca","block_type":"box","text":"11","page_number":215,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"22c8fff2-9509-43e4-ba4c-1c65fa8839b0","block_type":"box","text":"NM1026U-6030748-215/260","page_number":215,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"3d2d7228-0133-48d6-af3b-38c994dee63b","block_type":"box","text":"Anti-takeover defenses","page_number":216,"box":{"x":116,"y":87,"width":190,"height":10}},{"id":"5922b44e-0f4d-4ab0-9aaa-c5046b2dda57","block_type":"box","text":"In principle, we do not support companies using anti-takeover defenses, also known as poison pills or","page_number":216,"box":{"x":117,"y":119,"width":757,"height":12}},{"id":"c09e032d-debb-4850-bc5f-de961a953f63","block_type":"box","text":"shareholder rights plans, as they can entrench management and boards which have not delivered","page_number":216,"box":{"x":116,"y":134,"width":731,"height":12}},{"id":"99ae0d02-26b1-47a0-a4ca-a8bc86059309","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":216,"box":{"x":117,"y":150,"width":751,"height":12}},{"id":"738bf4c5-7ceb-4849-a141-783f19539e54","block_type":"box","text":"takeover that is considered sub-optimal and enable management to seek an improved offer. Similarly,","page_number":216,"box":{"x":116,"y":165,"width":761,"height":12}},{"id":"2547d622-7412-4ad6-9e19-28dab26c6be9","block_type":"box","text":"management could make the case to use a poison pill to block a shareholder activism campaign that","page_number":216,"box":{"x":117,"y":181,"width":751,"height":12}},{"id":"7d7c6876-2aef-4af1-ab1e-a3aab68f95c3","block_type":"box","text":"may be counter to the interests of other investors. Defense mechanisms introduced in these","page_number":216,"box":{"x":117,"y":196,"width":687,"height":12}},{"id":"442c446e-e1b2-41b8-8eb1-e9f8809cfda4","block_type":"box","text":"circumstances should be limited in term and threshold, and also be closely monitored by the","page_number":216,"box":{"x":116,"y":212,"width":688,"height":12}},{"id":"5e75baf0-c516-443f-aed5-0dcd7b1e7d99","block_type":"box","text":"independent members of the board. We consider it good practice for companies to put to a shareholder","page_number":216,"box":{"x":117,"y":227,"width":771,"height":12}},{"id":"bc393b0e-3ac9-420a-af91-e138460995e1","block_type":"box","text":"vote any mechanisms expected to be in place for more than 12 months.","page_number":216,"box":{"x":116,"y":243,"width":538,"height":12}},{"id":"76533546-5a51-4c79-8e73-0a9b20bb60dd","block_type":"box","text":"Shareholder activism","page_number":216,"box":{"x":116,"y":274,"width":175,"height":10}},{"id":"f570fac0-30f5-4e95-a60e-46c8b677be8b","block_type":"box","text":"When companies are the focus of an activism campaign, we may communicate with the activist to","page_number":216,"box":{"x":116,"y":306,"width":732,"height":12}},{"id":"1aa330b4-8847-4b02-9866-1f67277ad013","block_type":"box","text":"understand their analysis and objectives, once they have publicly disclosed their campaign. We may","page_number":216,"box":{"x":117,"y":322,"width":748,"height":12}},{"id":"cfc3519f-b16c-4e83-953e-4ef09a95f501","block_type":"box","text":"also engage with company management and possibly board members, especially those the activist","page_number":216,"box":{"x":116,"y":337,"width":741,"height":12}},{"id":"727b7041-6ddb-48a1-9d15-30fe9db52900","block_type":"box","text":"may be seeking to replace. In our assessment, we evaluate various factors, including the concerns","page_number":216,"box":{"x":117,"y":353,"width":737,"height":12}},{"id":"c4d87ff9-b21d-4767-a024-9d1934ba313e","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":216,"box":{"x":117,"y":368,"width":728,"height":12}},{"id":"4a31d92c-54f3-478d-b17f-c4ae64e1dae3","block_type":"box","text":"plans; and the qualifications of each party’s candidates. We evaluate each contested situation by","page_number":216,"box":{"x":117,"y":384,"width":723,"height":12}},{"id":"99d5ad71-eb4f-46ea-85e4-e5deaa340e88","block_type":"box","text":"assessing the potential financial outcome for our clients as minority shareholders.","page_number":216,"box":{"x":116,"y":399,"width":610,"height":12}},{"id":"7dcea142-fd8e-4ae0-aa68-c58a3f516f22","block_type":"box","text":"We may support board candidates nominated by a shareholder activist if BAIS, in its independent","page_number":216,"box":{"x":116,"y":431,"width":728,"height":12}},{"id":"2eb44ab0-fc8a-43e6-9001-9dc0b9565e90","block_type":"box","text":"judgment, or the relevant portfolio manager has determined that there is a case for change to enhance","page_number":216,"box":{"x":115,"y":446,"width":767,"height":13}},{"id":"3a539b37-9a2f-48ef-a414-031a8c1c2d98","block_type":"box","text":"shareholder value, or if the incumbent board members do not demonstrate the relevant skills and","page_number":216,"box":{"x":116,"y":462,"width":725,"height":11}},{"id":"689c97b3-43d8-41bd-9831-99c5b891acac","block_type":"box","text":"expertise or have a poor track record of protecting shareholders’ interests.","page_number":216,"box":{"x":116,"y":477,"width":556,"height":13}},{"id":"7ec62b36-0075-4fb5-a536-f4180cae98cc","block_type":"box","text":"Significant shareholders and related party transactions","page_number":216,"box":{"x":116,"y":509,"width":446,"height":12}},{"id":"ed63b551-0fa0-4f6e-bb8c-5ea02e4201ae","block_type":"box","text":"Boards of companies with affiliated shareholders or directors should give equitable consideration to the","page_number":216,"box":{"x":117,"y":541,"width":768,"height":12}},{"id":"7008047c-e0c5-40eb-b61f-22a4673dfd44","block_type":"box","text":"interests of all shareholders when evaluating related party transactions.","page_number":216,"box":{"x":117,"y":556,"width":534,"height":12}},{"id":"c6c409c8-53c4-45e6-9d67-c485622f7907","block_type":"box","text":"We consider it good practice for transactions with related parties, such as significant shareholders or","page_number":216,"box":{"x":116,"y":588,"width":751,"height":12}},{"id":"c32f98b1-0d73-459c-b6ba-f7fe47598626","block_type":"box","text":"companies affiliated with the public company, to be disclosed in detail and conducted on terms similar","page_number":216,"box":{"x":116,"y":604,"width":760,"height":12}},{"id":"78cdc6bd-9d7a-41c4-b2b1-c2d28d09b3cf","block_type":"box","text":"to what would objectively have been agreed with a non-related party. In our view, such transactions","page_number":216,"box":{"x":116,"y":619,"width":743,"height":12}},{"id":"8bee5a5d-f8fa-4fa5-b708-7ddbe555ec6e","block_type":"box","text":"should be reviewed and approved by the independent members of the board, and if voted on, only","page_number":216,"box":{"x":116,"y":635,"width":734,"height":12}},{"id":"ddfe356b-c8e6-4003-a56e-26a29c2910aa","block_type":"box","text":"disinterested shareholders should vote.","page_number":216,"box":{"x":116,"y":650,"width":297,"height":10}},{"id":"bb152bad-cba6-4c0f-aca1-550d232e5865","block_type":"box","text":"Corporate reporting, risk management and audit","page_number":216,"box":{"x":307,"y":690,"width":385,"height":12}},{"id":"b418d57e-6577-45f6-a981-0a187a13e9d6","block_type":"box","text":"Investors depend on corporate reporting, both regulatory and voluntary, to understand a company’s","page_number":216,"box":{"x":117,"y":722,"width":737,"height":12}},{"id":"1295d494-d533-4f8b-9733-1ea339091248","block_type":"box","text":"strategy, its implementation and financial performance, as well as to assess the quality of management","page_number":216,"box":{"x":116,"y":737,"width":765,"height":12}},{"id":"08abf885-1a04-4d3f-aa09-d650c7e12846","block_type":"box","text":"and operations and potential for the company to create shareholder value over time. We consider it","page_number":216,"box":{"x":116,"y":753,"width":736,"height":12}},{"id":"10e33f1c-b9de-4792-aeab-c90208a4cd87","block_type":"box","text":"good practice for the board to oversee corporate reporting and the policies and procedures","page_number":216,"box":{"x":116,"y":768,"width":674,"height":12}},{"id":"3999c992-cd13-4bc7-9e41-b9a3db72a542","block_type":"box","text":"underpinning the internal audit function and external audit.","page_number":216,"box":{"x":117,"y":784,"width":430,"height":12}},{"id":"b2cd27b0-8bf9-4a9f-94e0-a2f84d9db0da","block_type":"box","text":"A company’s financial reporting should provide decision-useful information for investors, and other","page_number":216,"box":{"x":116,"y":815,"width":730,"height":13}},{"id":"43bb4f1f-3a35-4622-b129-4f89c3ddae10","block_type":"box","text":"stakeholders, on its financial performance and position. It should provide an accurate and balanced","page_number":216,"box":{"x":116,"y":831,"width":742,"height":12}},{"id":"bced9a40-b14b-4b1e-a74f-a51b26b53ca7","block_type":"box","text":"assessment of the risks and opportunities the company faces in realizing its long-term strategy.","page_number":216,"box":{"x":116,"y":846,"width":712,"height":13}},{"id":"3263b2d6-2891-4d06-b1eb-a0b6e348bc4d","block_type":"box","text":"Accordingly, the assumptions made by management and reviewed by the auditor in preparing the","page_number":216,"box":{"x":116,"y":862,"width":729,"height":12}},{"id":"d24b3f49-e719-458e-a8de-3a0d2b2e7fb3","block_type":"box","text":"financial statements should be reasonable and justified. Financial statements should be prepared in","page_number":216,"box":{"x":116,"y":877,"width":744,"height":13}},{"id":"2b637045-4c3e-419c-99e4-86f862bca915","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":216,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f8112fad-8497-4270-b2e1-466bd45a0c94","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":216,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"d4018308-0677-4d98-a3be-e33732927960","block_type":"box","text":"12","page_number":216,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"8842f7c6-0c54-42c5-83ec-819f653320a0","block_type":"box","text":"NM1026U-6030748-216/260","page_number":216,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"ebad653e-46df-4292-bbf7-4b51663ab488","block_type":"box","text":"accordance with globally developed reporting standards and any divergence from generally accepted","page_number":217,"box":{"x":116,"y":87,"width":755,"height":12}},{"id":"d55f8a94-3fb0-461c-bb34-40e5523b92af","block_type":"box","text":"accounting principles should be explained in detail and justified. Accounting restatements should be","page_number":217,"box":{"x":116,"y":102,"width":745,"height":13}},{"id":"ffb7d8f8-3a38-4f3e-a995-d7821ef4fc29","block_type":"box","text":"explained in detail and any remedial actions, and the implications of these, disclosed.","page_number":217,"box":{"x":116,"y":118,"width":638,"height":12}},{"id":"dcce22b3-0046-4b78-b86e-1d5faa6a7f69","block_type":"box","text":"In this context, audit committees play a vital role in a company’s financial reporting system by providing","page_number":217,"box":{"x":117,"y":149,"width":769,"height":12}},{"id":"ba166f53-03c3-43b8-b145-1f5353efeea5","block_type":"box","text":"independent oversight of the accounts, material financial and, where appropriate to the jurisdiction,","page_number":217,"box":{"x":117,"y":165,"width":737,"height":12}},{"id":"6a3ccf6d-461a-41d6-9cb8-952dd87305ca","block_type":"box","text":"non-financial information, internal control frameworks and Enterprise Risk Management systems. In","page_number":217,"box":{"x":117,"y":180,"width":743,"height":12}},{"id":"4de1dc23-d38d-4fc4-a5ad-db9086ab79da","block_type":"box","text":"our view, effective audit committee oversight strengthens the quality and reliability of a company’s","page_number":217,"box":{"x":116,"y":196,"width":730,"height":12}},{"id":"f0120e65-e433-442e-bd3f-f5959c1dabdf","block_type":"box","text":"financial statements and provides an important level of reassurance to shareholders. Audit committees","page_number":217,"box":{"x":116,"y":211,"width":767,"height":12}},{"id":"f5b1031a-a296-4bd7-99ab-f784728b9e88","block_type":"box","text":"should have a procedure in place for assessing the independence of the auditor and the quality of the","page_number":217,"box":{"x":116,"y":227,"width":758,"height":12}},{"id":"620521e1-6fad-4401-b8cd-b03aba42f21c","block_type":"box","text":"external audit process annually.","page_number":217,"box":{"x":116,"y":242,"width":241,"height":12}},{"id":"669fd863-3e98-4739-af22-0477382b70d0","block_type":"box","text":"Similarly, we encourage companies to disclose material sustainability-related factors that are integral to","page_number":217,"box":{"x":116,"y":273,"width":771,"height":12}},{"id":"495fec30-40e2-4d6a-ba2c-693f97ea9492","block_type":"box","text":"how a company manages risks or generates revenue. BAIS finds it helpful to our understanding when","page_number":217,"box":{"x":117,"y":289,"width":758,"height":12}},{"id":"ef3b6ae0-ff92-49e5-b03f-df7be1177646","block_type":"box","text":"companies provide robust, standardized disclosures on their material sustainability-related risks and","page_number":217,"box":{"x":116,"y":304,"width":747,"height":12}},{"id":"d0702a07-fc34-48d9-b969-0783caab29b6","block_type":"box","text":"opportunities. The International Sustainability Standards Board (ISSB) is one entity working to meet","page_number":217,"box":{"x":116,"y":320,"width":743,"height":12}},{"id":"3d750a9d-738b-4e6d-8222-67d6caae25cd","block_type":"box","text":"these objectives through its reporting standards, which may be helpful to companies in preparing such","page_number":217,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"a0af9cea-dc19-4b9b-8cd1-ec9359fc259a","block_type":"box","text":"reports.","page_number":217,"box":{"x":117,"y":351,"width":54,"height":12}},{"id":"36001e06-1fdd-498d-bc9b-9db85e98fbbc","block_type":"box","text":"9","page_number":217,"box":{"x":173,"y":351,"width":5,"height":6}},{"id":"bc5f5157-aff2-4ce7-bcad-7c6c2b8bf803","block_type":"box","text":"However, we do not mandate any specific disclosure framework, and note that companies in","page_number":217,"box":{"x":179,"y":351,"width":696,"height":12}},{"id":"6b0235b7-6d1c-461a-bb57-2bb96c226118","block_type":"box","text":"certain jurisdictions are subject to mandatory reporting requirements under standards specified by","page_number":217,"box":{"x":116,"y":366,"width":731,"height":12}},{"id":"8051eb93-df09-4afc-b8f0-4ca66c8f1556","block_type":"box","text":"policy makers.","page_number":217,"box":{"x":117,"y":382,"width":105,"height":12}},{"id":"84c32957-60af-4134-9fdb-9c9def362f47","block_type":"box","text":"10","page_number":217,"box":{"x":224,"y":382,"width":11,"height":6}},{"id":"81fb17ee-135b-43ad-a88e-0a87ca18bbef","block_type":"box","text":"Companies should establish robust risk management and internal control processes appropriate to the","page_number":217,"box":{"x":117,"y":413,"width":765,"height":12}},{"id":"d7cb61ed-4728-478e-ae54-fca5d3cdc591","block_type":"box","text":"company’s business, risk tolerance, and regulatory environment. A credible whistleblowing system for","page_number":217,"box":{"x":116,"y":428,"width":759,"height":12}},{"id":"373e6a3a-837f-4d92-b230-ea0c79baee79","block_type":"box","text":"employees, and potentially other stakeholders, can be a useful mechanism for ensuring that senior","page_number":217,"box":{"x":116,"y":444,"width":738,"height":12}},{"id":"a9929b21-2058-4339-ae96-8f9f9d9dc296","block_type":"box","text":"management and the board are aware of potential misconduct or breaches in risk management and","page_number":217,"box":{"x":117,"y":459,"width":745,"height":12}},{"id":"8de2667d-2325-4694-861b-fe1e791552e5","block_type":"box","text":"internal control processes.","page_number":217,"box":{"x":117,"y":475,"width":200,"height":12}},{"id":"ea62e9c4-0f0b-4b8d-8533-1f410b2783d9","block_type":"box","text":"A comprehensive audit conducted by an independent audit firm contributes to investor confidence in","page_number":217,"box":{"x":116,"y":506,"width":748,"height":12}},{"id":"46f9e140-30eb-4ab5-a288-1c7cc1a19614","block_type":"box","text":"the quality of corporate reporting. It is helpful when the audit report gives some insight into the scope","page_number":217,"box":{"x":116,"y":521,"width":752,"height":12}},{"id":"84f6930b-ec31-4496-ab80-087fae1cad75","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":217,"box":{"x":116,"y":537,"width":751,"height":12}},{"id":"23e3f2f7-564f-43a3-9ae7-2907f0300b16","block_type":"box","text":"comprehensive and effective audit is time and resource intensive, and the audit fee should be","page_number":217,"box":{"x":116,"y":552,"width":700,"height":12}},{"id":"d17f2f49-1468-4443-adee-086e0a087963","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":217,"box":{"x":116,"y":568,"width":771,"height":12}},{"id":"b3a6c354-d1d7-4169-a4fe-1d476812c1ba","block_type":"box","text":"degree that may prompt concerns about the independence of the audit. The audit committee should","page_number":217,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"9add5d9b-4591-471d-b477-bcabb56682d1","block_type":"box","text":"explain its position on auditor tenure and how it confirmed that the auditor remained independent.","page_number":217,"box":{"x":116,"y":599,"width":728,"height":12}},{"id":"bee1bc82-1f64-4f93-b1f8-9d1f28851bf2","block_type":"box","text":"We may vote against the election of the responsible directors if corporate reporting is insufficient or","page_number":217,"box":{"x":116,"y":630,"width":740,"height":12}},{"id":"36ba7c1a-e104-4ae5-900f-ebd4107d90c9","block_type":"box","text":"there are material misstatements in financial reports. In markets where relevant, we may vote against a","page_number":217,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"03a27f23-046c-45d4-9896-aa2b73fa2a9a","block_type":"box","text":"proposal to approve the financial statements or the discharge of the board when we are concerned","page_number":217,"box":{"x":117,"y":661,"width":731,"height":12}},{"id":"8612623e-7b67-492a-98e6-0d907189c5a3","block_type":"box","text":"about the quality of corporate reporting or the audit. We may vote against proposals to appoint the","page_number":217,"box":{"x":116,"y":676,"width":728,"height":12}},{"id":"9dddb709-876f-4b79-b4cc-221fadaa5baa","block_type":"box","text":"auditor, ratify the audit report, or approve the audit fee if we are concerned about the auditor’s","page_number":217,"box":{"x":116,"y":692,"width":697,"height":12}},{"id":"e2eb2717-ca3f-4989-9e15-b47a6bd1ceb1","block_type":"box","text":"independence, the quality of the audit, or there are material misstatements in financial reports and the","page_number":217,"box":{"x":117,"y":707,"width":754,"height":12}},{"id":"84f695f7-bd10-408f-9fa7-8f3fa404832d","block_type":"box","text":"board has not established reasonable remediation plans.","page_number":217,"box":{"x":117,"y":723,"width":420,"height":12}},{"id":"aac75e43-1933-4ed1-b500-f74cd3d4e783","block_type":"box","text":"9","page_number":217,"box":{"x":143,"y":815,"width":4,"height":5}},{"id":"b6c8526e-6cc1-4701-bce8-6aefc6e03041","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":217,"box":{"x":170,"y":815,"width":666,"height":10}},{"id":"2ba14603-9b71-4a7e-ba7e-39131655376b","block_type":"box","text":"Foundation. Please refer to the IFRS website to learn more about the framework and standards S1 “General","page_number":217,"box":{"x":171,"y":828,"width":641,"height":8}},{"id":"afad8fdf-4b7a-421b-81e2-3953c2892be7","block_type":"box","text":"Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related Disclosures.”","page_number":217,"box":{"x":171,"y":841,"width":672,"height":9}},{"id":"31a6e513-64b8-4429-879c-a84bd3e37d92","block_type":"box","text":"10","page_number":217,"box":{"x":144,"y":854,"width":8,"height":5}},{"id":"ba3152cb-7d80-4025-b0f4-d9823083ec1f","block_type":"box","text":"See, for examples, https://www.ifrs.org/news-and-events/news/2025/06/ifrs-foundation-publishes-jurisdictional-profiles","page_number":217,"box":{"x":170,"y":854,"width":705,"height":9}},{"id":"d508dff8-a589-49c6-886f-c83a8bc1c282","block_type":"box","text":"issb-standards/ and https://finance.ec.europa.eu/capital-markets-union-and-financial-markets/company","page_number":217,"box":{"x":170,"y":867,"width":615,"height":9}},{"id":"36f1a2cc-4ff9-4246-8a4f-cfda6ab9efaa","block_type":"box","text":"reporting-and-auditing/company-reporting/corporate-sustainability-reporting_en","page_number":217,"box":{"x":170,"y":880,"width":468,"height":9}},{"id":"c1ebed42-0245-4fd4-92d2-d1f55d6b24be","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":217,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"f37a6277-7400-4563-a29b-39598479ede0","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":217,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"e915db2a-63a8-4ede-ba36-7280521eb1a8","block_type":"box","text":"13","page_number":217,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"42e5abee-3765-4e61-9ee3-d523c034f37c","block_type":"box","text":"NM1026U-6030748-217/260","page_number":217,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4358e73d-212c-4388-8377-c449882988d1","block_type":"box","text":"Shareholder rights and protections","page_number":218,"box":{"x":360,"y":87,"width":285,"height":12}},{"id":"7c57a8be-236f-4c6a-9872-1530954cbe13","block_type":"box","text":"General shareholder meetings","page_number":218,"box":{"x":116,"y":116,"width":247,"height":12}},{"id":"de8622f3-10ea-4050-b43e-0bbfcb6dd171","block_type":"box","text":"Companies normally have an annual general meeting of shareholders at which routine and non-routine","page_number":218,"box":{"x":117,"y":144,"width":768,"height":13}},{"id":"4d073281-afb0-4041-a5ce-c5b58998d9f4","block_type":"box","text":"items of business are discussed and voted on by shareholders in attendance or submitting proxy votes.","page_number":218,"box":{"x":117,"y":160,"width":771,"height":12}},{"id":"cf7fc65f-f9b4-4997-ab14-ad31cbf06c74","block_type":"box","text":"Companies should disclose materials relevant to the shareholder meeting sufficiently in advance so","page_number":218,"box":{"x":117,"y":175,"width":742,"height":13}},{"id":"59f59a8a-1676-4e53-89d8-f33e0043bcd0","block_type":"box","text":"that shareholders can take them into consideration in their voting decisions. Many companies offer","page_number":218,"box":{"x":116,"y":191,"width":736,"height":12}},{"id":"e09ca814-f2ce-455e-acb0-8d47e037b9e7","block_type":"box","text":"shareholders the option of participating in the meeting virtually which, whilst welcome, should not limit","page_number":218,"box":{"x":116,"y":207,"width":758,"height":12}},{"id":"b876c966-463a-4b6b-baf3-603ce0a49f3d","block_type":"box","text":"the rights of shareholders to participate as they would during an in-person meeting.","page_number":218,"box":{"x":116,"y":222,"width":622,"height":12}},{"id":"67c88976-9abd-4448-b4ae-f0d68fcaad63","block_type":"box","text":"We may vote against directors when materials related to the business of the shareholder meeting are","page_number":218,"box":{"x":116,"y":251,"width":757,"height":12}},{"id":"0bed8b86-d7e1-4c09-aa03-186db17bd94b","block_type":"box","text":"not provided in a timely manner or do not provide sufficient information for us to make an informed","page_number":218,"box":{"x":117,"y":266,"width":733,"height":12}},{"id":"000baed3-fefa-4542-936f-940ef7166777","block_type":"box","text":"voting decision. We may vote against directors if the format of the shareholder meeting does not","page_number":218,"box":{"x":116,"y":282,"width":719,"height":12}},{"id":"f030f766-cb62-4eec-9382-c6c8f4dd011b","block_type":"box","text":"accommodate reasonable shareholder participation.","page_number":218,"box":{"x":116,"y":297,"width":392,"height":12}},{"id":"06d8a2a8-69c7-43e5-92f4-c2cfde125ed5","block_type":"box","text":"Bylaw amendments","page_number":218,"box":{"x":117,"y":326,"width":161,"height":12}},{"id":"7c2a33ad-0b5e-4f57-b56b-96e41f82286f","block_type":"box","text":"We review bylaw amendments proposed by management on a case-by-case basis and will generally","page_number":218,"box":{"x":116,"y":355,"width":753,"height":12}},{"id":"d0dc64dc-3fb0-40e3-8b50-f418409798eb","block_type":"box","text":"support those that are aligned with the interests of minority shareholders. Any material changes to the","page_number":218,"box":{"x":116,"y":370,"width":761,"height":12}},{"id":"7894bf9c-4f41-430f-947c-ff9fe214d6ac","block_type":"box","text":"bylaws should be explained in detail and put to a shareholder vote.","page_number":218,"box":{"x":117,"y":386,"width":500,"height":12}},{"id":"e20e5d5a-aab4-4238-b1ad-fbe3ab82e15d","block_type":"box","text":"We may vote against bylaw amendments that reduce shareholder rights and protections or introduce","page_number":218,"box":{"x":116,"y":415,"width":753,"height":12}},{"id":"c0221566-81e0-40fd-9ddd-0cd2639721e3","block_type":"box","text":"additional burdens. We may vote against directors if material changes are made to the bylaws without","page_number":218,"box":{"x":116,"y":430,"width":760,"height":12}},{"id":"7f6c48a9-4fa5-4c68-84ba-498bb010b49d","block_type":"box","text":"shareholder approval.","page_number":218,"box":{"x":116,"y":446,"width":167,"height":11}},{"id":"f2424bcc-77e5-4732-88b7-304c075a2581","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":218,"box":{"x":117,"y":474,"width":688,"height":12}},{"id":"0d4eedc0-cf31-444b-b982-4ad0d5aba904","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to call a special meeting of","page_number":218,"box":{"x":117,"y":490,"width":704,"height":12}},{"id":"c7dd0137-876e-4f35-bc64-d03772feb549","block_type":"box","text":"shareholders. The shareholding required to exercise this right should balance its utility with the cost to","page_number":218,"box":{"x":116,"y":505,"width":761,"height":12}},{"id":"dc487bc0-f280-4f45-9966-4e59e3c1399c","block_type":"box","text":"the company of holding special meetings.","page_number":218,"box":{"x":116,"y":521,"width":307,"height":12}},{"id":"adc3399f-9cb1-4f66-bcaf-498916138472","block_type":"box","text":"If not provided for in the relevant corporate law, company bylaws should allow shareholders,","page_number":218,"box":{"x":117,"y":550,"width":688,"height":12}},{"id":"e0ff253a-11b2-4e96-a4dc-f47d3c9759be","block_type":"box","text":"individually or as a group, with a meaningful shareholding, the right to nominate directors to the","page_number":218,"box":{"x":117,"y":565,"width":710,"height":12}},{"id":"4b2a872b-4bc3-46da-8555-0851a33cfa3d","block_type":"box","text":"company’s board. The threshold for this right should be set so that shareholders can exercise it without","page_number":218,"box":{"x":116,"y":581,"width":770,"height":12}},{"id":"5ecec8ae-1c06-455f-8e31-8e847c1ca0da","block_type":"box","text":"being unduly disruptive to the board’s own nomination process.","page_number":218,"box":{"x":117,"y":596,"width":473,"height":12}},{"id":"5de039f1-d8c5-4a17-91e7-23b142220ed1","block_type":"box","text":"Whilst we would not use either of these rights ourselves, we see them as important accountability","page_number":218,"box":{"x":116,"y":625,"width":728,"height":12}},{"id":"a81b9d3f-d14d-44e4-b89d-9ad9ce556d50","block_type":"box","text":"mechanisms. We may vote for a shareholder proposal seeking the addition of either of these","page_number":218,"box":{"x":117,"y":640,"width":691,"height":12}},{"id":"c33505de-d35b-4c90-bb4f-92cd99e99f5c","block_type":"box","text":"provisions to a company’s bylaws.","page_number":218,"box":{"x":117,"y":656,"width":258,"height":12}},{"id":"b3470c69-e1bc-4266-aec7-8b827372dcf6","block_type":"box","text":"Change of domicile","page_number":218,"box":{"x":116,"y":685,"width":154,"height":12}},{"id":"0c42be7a-52fa-4e01-b1f2-e42cbb1b6647","block_type":"box","text":"We generally defer to management on proposals to change a company’s domicile as long as the","page_number":218,"box":{"x":116,"y":713,"width":717,"height":12}},{"id":"64b2f4df-38df-44f3-9829-673b3456df95","block_type":"box","text":"rationale for doing so is consistent with the company’s long-term strategy and business model and the","page_number":218,"box":{"x":117,"y":729,"width":756,"height":12}},{"id":"269300ab-a455-4391-a585-1b01651861ca","block_type":"box","text":"related costs are immaterial.","page_number":218,"box":{"x":117,"y":744,"width":209,"height":10}},{"id":"00fb2a29-3f97-4ba5-a3da-a9a776fae8c4","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":218,"box":{"x":116,"y":773,"width":751,"height":12}},{"id":"9b107262-fed2-47ea-96d5-f45aeff7f429","block_type":"box","text":"aligned with our clients’ financial interests.","page_number":218,"box":{"x":116,"y":789,"width":311,"height":12}},{"id":"e8694a8f-eef3-419e-b604-73bc5784a686","block_type":"box","text":"Changes to a company’s purpose or the nature of its business","page_number":218,"box":{"x":116,"y":817,"width":499,"height":12}},{"id":"a276054c-d63c-46bc-9698-b98ba7af8635","block_type":"box","text":"Plans to materially change the nature of a company’s business or its purpose should be disclosed and","page_number":218,"box":{"x":117,"y":846,"width":762,"height":12}},{"id":"44470aa0-f970-4c55-aa58-51ed739fcfda","block_type":"box","text":"explained in the context of long-term strategy and business dynamics. Such changes may significantly","page_number":218,"box":{"x":116,"y":862,"width":764,"height":12}},{"id":"80e4732a-a8cc-4fb9-a46e-c926b139c5af","block_type":"box","text":"alter an investor’s views on the suitability of a company for their investment strategy or portfolio.","page_number":218,"box":{"x":116,"y":877,"width":716,"height":12}},{"id":"e997301f-7d59-4235-b557-8ca8630c3378","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":218,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"52c1e1d0-733b-4f53-a5fa-fd55424f48fa","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":218,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"d39d4e02-7a27-462c-acb5-6a566d9dfd82","block_type":"box","text":"14","page_number":218,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"0c41c7d2-dbd4-484b-9d3b-d6fa65c9ada0","block_type":"box","text":"NM1026U-6030748-218/260","page_number":218,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"d65f0f11-d4d2-4090-a922-669f06e9230b","block_type":"box","text":"Where relevant, we may vote against proposals to change a company’s purpose or the nature of its","page_number":219,"box":{"x":116,"y":87,"width":743,"height":12}},{"id":"843c88c8-cdd1-494f-bf02-6e34fdc8bcb0","block_type":"box","text":"business if the board has not provided a credible argument for change.","page_number":219,"box":{"x":117,"y":102,"width":530,"height":13}},{"id":"dd796756-9095-4541-a6b9-570785825d00","block_type":"box","text":"Shareholder proposals","page_number":219,"box":{"x":409,"y":141,"width":187,"height":12}},{"id":"6690acc9-3559-4365-9490-a13b016ace80","block_type":"box","text":"Shareholders in many markets, who meet certain eligibility criteria, have the right to submit proposals","page_number":219,"box":{"x":116,"y":172,"width":756,"height":12}},{"id":"3a8c6213-0748-4493-ba22-a5c4649195cc","block_type":"box","text":"to the general shareholder meeting asking a company to take a particular course of action subject to","page_number":219,"box":{"x":116,"y":188,"width":749,"height":12}},{"id":"d84c2bcf-c76f-48db-a9b3-51de91814637","block_type":"box","text":"the proposal being supported by a majority of votes cast at the meeting. The topics raised can address","page_number":219,"box":{"x":116,"y":203,"width":767,"height":12}},{"id":"46b08326-2eb9-430f-9a2f-c8444b01eb17","block_type":"box","text":"a range of matters that may be relevant to a company’s business.","page_number":219,"box":{"x":116,"y":219,"width":492,"height":12}},{"id":"9b327172-c458-4669-8f1b-27115980b263","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":219,"box":{"x":116,"y":250,"width":767,"height":12}},{"id":"286f2760-ea50-4d62-8c26-68c17462fbd8","block_type":"box","text":"company’s business and its current approach, whether the actions sought are consistent with","page_number":219,"box":{"x":116,"y":265,"width":697,"height":12}},{"id":"42e5f960-266e-4b62-90db-e2287c1bddce","block_type":"box","text":"shareholders’ interests, and what impact the proposal being acted upon might have on financial","page_number":219,"box":{"x":116,"y":281,"width":714,"height":12}},{"id":"4dcfb18e-0824-4e16-857f-ea7f3d85e107","block_type":"box","text":"performance.","page_number":219,"box":{"x":117,"y":296,"width":103,"height":12}},{"id":"58c448b3-492a-4061-8438-74019cb57ec2","block_type":"box","text":"Our general approach where we have concerns about","page_number":219,"box":{"x":116,"y":327,"width":393,"height":12}},{"id":"3dfea800-f327-44f2-80a0-09160661fb1b","block_type":"box","text":"t a company’s governance, disclosures or","page_number":219,"box":{"x":509,"y":327,"width":303,"height":12}},{"id":"5f9551fd-6c26-417c-9951-488c9b222557","block_type":"box","text":"performance is to engage to understand the apparent diffe","page_number":219,"box":{"x":117,"y":343,"width":423,"height":12}},{"id":"bd73e9e6-8869-4e5b-92e4-238e302fed2c","block_type":"box","text":"rence in perspective. If we are concerned a","page_number":219,"box":{"x":541,"y":343,"width":319,"height":12}},{"id":"1359676b-a2c3-400a-90fe-d56bc83ac0ec","block_type":"box","text":"company is not acting in shareholders’ financial interest","page_number":219,"box":{"x":116,"y":358,"width":403,"height":12}},{"id":"6edbcfbf-766c-4416-8da5-b41ee87669fc","block_type":"box","text":"s, we may vote against the election of directors.","page_number":219,"box":{"x":519,"y":358,"width":351,"height":12}},{"id":"263ed572-e660-4482-9a5b-3a5b9a98d48b","block_type":"box","text":"We may support a relevant shareholder proposal if doing","page_number":219,"box":{"x":116,"y":374,"width":418,"height":12}},{"id":"0a8af727-439b-442d-a3e4-0a0945bf6597","block_type":"box","text":"so is aligned with our clients’ financial interests.","page_number":219,"box":{"x":534,"y":374,"width":348,"height":12}},{"id":"0192c738-53c1-4f6c-b2d8-c9f46d895d29","block_type":"box","text":"We generally do not support shareholder proposals that","page_number":219,"box":{"x":116,"y":389,"width":410,"height":12}},{"id":"fcfb066b-7da5-44f1-bbc4-ad5402b50679","block_type":"box","text":"are legally binding on the company, seek to alter","page_number":219,"box":{"x":526,"y":389,"width":357,"height":12}},{"id":"7e10bca2-65ee-46e4-8386-80a463664a80","block_type":"box","text":"a company’s strategy or direct its operations,","page_number":219,"box":{"x":116,"y":405,"width":331,"height":12}},{"id":"e5137f10-3a1f-4700-ae7e-efcb29f1a139","block_type":"box","text":"or are unrelated to how a company manages risk or","page_number":219,"box":{"x":447,"y":405,"width":381,"height":12}},{"id":"9b88a503-fb71-4acc-8806-b7b643cd0938","block_type":"box","text":"generates financial returns.","page_number":219,"box":{"x":116,"y":420,"width":203,"height":12}},{"id":"8f49bdb3-f43a-457e-9717-6a1e3f16aa3f","block_type":"box","text":"BlackRock is subject to rules, regulations, agency guidance and contractual agreements that place","page_number":219,"box":{"x":117,"y":451,"width":737,"height":12}},{"id":"7995e449-ac63-4fbb-9863-e44275775a53","block_type":"box","text":"restrictions and limitations on how we can interact with the companies in which we invest on behalf of","page_number":219,"box":{"x":117,"y":467,"width":755,"height":12}},{"id":"9beb1935-1a57-4c6e-87c3-9a0463371573","block_type":"box","text":"our clients, including our ability to submit shareholder proposals. We do not submit shareholder","page_number":219,"box":{"x":116,"y":482,"width":712,"height":12}},{"id":"abbd9c05-4609-40d1-bfb1-562e41a74ac3","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":219,"box":{"x":117,"y":498,"width":770,"height":12}},{"id":"2c9d8163-1dd7-4dba-b4d2-037bd0756fd6","block_type":"box","text":"Corporate political activities","page_number":219,"box":{"x":387,"y":537,"width":230,"height":12}},{"id":"0b3b2446-fe52-4311-b483-eaf1b756842b","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":219,"box":{"x":116,"y":568,"width":733,"height":12}},{"id":"f5b64e8e-ee0b-4236-8de4-b942f9a3a64e","block_type":"box","text":"jurisdictions in which they engage. When a corporation reports material financial risk related to policy","page_number":219,"box":{"x":115,"y":583,"width":754,"height":12}},{"id":"1c8ad9e1-6c0f-4224-9563-96816fc1df02","block_type":"box","text":"and or regulatory changes, BAIS may seek to understand how it is addressing the material risk","page_number":219,"box":{"x":116,"y":599,"width":708,"height":12}},{"id":"f7330097-c189-4fac-ad6a-aaba6d57c7e5","block_type":"box","text":"identified. We seek to understand how companies engage in corporate political activities and ensure","page_number":219,"box":{"x":117,"y":614,"width":748,"height":12}},{"id":"ca5e802c-4fa5-4286-91ba-92190b26afd7","block_type":"box","text":"that their participation is consistent with their public statements on policy matters material to the","page_number":219,"box":{"x":116,"y":630,"width":714,"height":12}},{"id":"66e97329-7ccb-42bd-813b-79a2e79f3bf7","block_type":"box","text":"company’s long-term strategy. The board should be aware of the approach taken by management on","page_number":219,"box":{"x":116,"y":645,"width":756,"height":12}},{"id":"f914eb18-4245-4d87-91ae-d222142a6e1b","block_type":"box","text":"corporate political activities as there can be reputational risks arising from inconsistencies between a","page_number":219,"box":{"x":116,"y":661,"width":746,"height":12}},{"id":"cd908166-ac0f-4b4a-98b4-60c716215c74","block_type":"box","text":"company’s policy engagement and stated policy positions. Companies should, as a minimum, meet all","page_number":219,"box":{"x":116,"y":676,"width":758,"height":12}},{"id":"3919f1e4-471e-4b46-9aa8-4288daabec94","block_type":"box","text":"regulatory disclosure requirements on political activities. We may engage a company where we would","page_number":219,"box":{"x":117,"y":692,"width":753,"height":12}},{"id":"6ecc1447-49a5-4c08-9975-c9dd690ba781","block_type":"box","text":"like to better understand its approach to policy engagement, where relevant.","page_number":219,"box":{"x":117,"y":707,"width":563,"height":12}},{"id":"03acb1d9-a191-495c-8b5d-fb4c51bdaadc","block_type":"box","text":"To mitigate the risk of inconsistencies, companies may wish to assess the alignment between their","page_number":219,"box":{"x":116,"y":738,"width":732,"height":12}},{"id":"b284aa35-4429-4da8-82a8-2e5805a52658","block_type":"box","text":"policy priorities and the policy positions of the trade associations of which they are active members and","page_number":219,"box":{"x":117,"y":754,"width":764,"height":12}},{"id":"8081d2b5-9f6e-4973-909c-2c033a32ef9d","block_type":"box","text":"any engagements undertaken by trade associations on behalf of members.","page_number":219,"box":{"x":116,"y":769,"width":556,"height":12}},{"id":"24c116c3-78cd-49d4-b7b3-7d46485b740b","block_type":"box","text":"We may support a relevant shareholder proposal, or vote against directors, where a company’s","page_number":219,"box":{"x":116,"y":800,"width":707,"height":12}},{"id":"28789a88-3ce8-435f-b92a-fac38f3a2c03","block_type":"box","text":"disclosures are insufficient to address the material risk it has identified.","page_number":219,"box":{"x":116,"y":816,"width":524,"height":9}},{"id":"98f86f3b-2a7b-4668-ad77-db8dcfa2aa00","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":219,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"6285c6b1-3e80-4fdb-9ecb-37636a60acb5","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":219,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"30383f4f-ee8d-467c-ad6e-5d2be7682aca","block_type":"box","text":"15","page_number":219,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"42872ad4-1db6-4b2e-9c7f-73155f3e6768","block_type":"box","text":"NM1026U-6030748-219/260","page_number":219,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"5c0e32c6-6fc8-4b8b-832c-0e1424bd2a0d","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":220,"box":{"x":287,"y":87,"width":431,"height":12}},{"id":"8019b14f-a2e5-45ed-b757-c3d7f61b1789","block_type":"box","text":"We seek to understand how companies manage the material risks and opportunities inherent in their","page_number":220,"box":{"x":116,"y":118,"width":751,"height":12}},{"id":"a9aac224-1bf6-4529-b51a-b839038d7492","block_type":"box","text":"business operations. In our experience, sustainability-related factors","page_number":220,"box":{"x":117,"y":133,"width":505,"height":12}},{"id":"e0e5a536-786e-49d6-972f-f8618a41812b","block_type":"box","text":"11","page_number":220,"box":{"x":624,"y":133,"width":9,"height":6}},{"id":"6d87e0c2-b9b2-4456-8b2f-e103f6a8c04c","block_type":"box","text":"that are relevant to a company’s","page_number":220,"box":{"x":635,"y":133,"width":249,"height":12}},{"id":"28731250-65fe-4127-b65d-31a71e53e5c3","block_type":"box","text":"business or material to its financial performance, are generally operational considerations embedded","page_number":220,"box":{"x":117,"y":149,"width":752,"height":12}},{"id":"50c088c6-1df6-462e-a317-dedccba63b12","block_type":"box","text":"into day-to-day management systems. Certain sustainability issues may also inform long-term strategic","page_number":220,"box":{"x":117,"y":164,"width":769,"height":12}},{"id":"db017c2d-8269-4180-b4d1-de7c573115ae","block_type":"box","text":"planning, for example, investing in product innovation in anticipation of changing consumer demand or","page_number":220,"box":{"x":117,"y":180,"width":763,"height":12}},{"id":"18b5f4b6-1296-4686-81e8-5e95bbeaa2f0","block_type":"box","text":"adapting supply chains in response to changing regulatory requirements.","page_number":220,"box":{"x":116,"y":195,"width":546,"height":12}},{"id":"f8e5ef99-2524-4091-90dc-1a2a0e486d94","block_type":"box","text":"We recognize that the specific sustainability-related factors that may be financially material or business","page_number":220,"box":{"x":116,"y":226,"width":769,"height":12}},{"id":"4e271b32-790f-4188-9738-67c4bf1fe144","block_type":"box","text":"relevant will vary by company business model, sector, key markets, and time horizon, amongst other","page_number":220,"box":{"x":117,"y":241,"width":751,"height":12}},{"id":"e4d1d8b0-30dc-47f8-b0af-e87d1f0bb654","block_type":"box","text":"considerations. From company disclosures and our engagement, we aim to understand how","page_number":220,"box":{"x":116,"y":257,"width":689,"height":12}},{"id":"1949b873-8c2f-4f7a-9969-cc0cba4f2c53","block_type":"box","text":"management is identifying, assessing and integrating material sustainability-related risks and","page_number":220,"box":{"x":117,"y":272,"width":694,"height":12}},{"id":"7825a41f-976b-4c20-9e46-80f1574d93fc","block_type":"box","text":"opportunities into their business decision-making and practices. Doing so helps us undertake a more","page_number":220,"box":{"x":116,"y":288,"width":752,"height":12}},{"id":"938b42a6-f7de-47b9-9c75-005578b3b7ed","block_type":"box","text":"holistic assessment of a company’s potential financial performance and the likely risk-adjusted returns","page_number":220,"box":{"x":117,"y":303,"width":761,"height":12}},{"id":"41862ddd-d0dd-4c24-80c1-f0a9ad9b0a9a","block_type":"box","text":"of an investment.","page_number":220,"box":{"x":116,"y":319,"width":133,"height":9}},{"id":"d0ec30ae-7b28-41c9-8920-0895d2f9452a","block_type":"box","text":"We may vote against directors or support a relevant shareholder proposal if we have concerns about","page_number":220,"box":{"x":116,"y":349,"width":753,"height":13}},{"id":"afb395e4-96eb-4b51-8fd8-8f01604c98f5","block_type":"box","text":"how a company is managing or disclosing its approach to material sustainability-related risks that may","page_number":220,"box":{"x":117,"y":365,"width":761,"height":12}},{"id":"09483a8e-d414-4784-942e-90e709076223","block_type":"box","text":"impact financial returns.","page_number":220,"box":{"x":117,"y":380,"width":181,"height":12}},{"id":"6e974036-1488-44eb-8aa7-5ebff43f9f99","block_type":"box","text":"Key stakeholders","page_number":220,"box":{"x":431,"y":419,"width":143,"height":12}},{"id":"c1fb6c7a-e574-43d1-b743-d97890a23d06","block_type":"box","text":"In our view, companies should understand and take into consideration the interests of the various","page_number":220,"box":{"x":117,"y":449,"width":727,"height":12}},{"id":"f9a9ea2e-6ba5-4c1c-ace5-90bd61a5388b","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":220,"box":{"x":117,"y":465,"width":766,"height":12}},{"id":"b15d24b7-eb85-4b22-9ee2-e861db05012f","block_type":"box","text":"stakeholders based on what is material to their business and long-term financial performance. For","page_number":220,"box":{"x":116,"y":480,"width":731,"height":12}},{"id":"a9ac8ec6-9420-4036-9ad7-e1f90d8f2bb9","block_type":"box","text":"many companies, key stakeholders include employees, business partners (such as suppliers and","page_number":220,"box":{"x":117,"y":496,"width":726,"height":12}},{"id":"ef226885-1c6b-4944-8d8f-b033a8f84848","block_type":"box","text":"distributors), clients and consumers, regulators, and the communities in which they operate.","page_number":220,"box":{"x":116,"y":511,"width":687,"height":12}},{"id":"a3d245f2-840e-4995-9e0e-fcb07cc752ff","block_type":"box","text":"Companies that appropriately balance the interests of investors and other stakeholders are, in our","page_number":220,"box":{"x":117,"y":527,"width":730,"height":12}},{"id":"a64c7f9e-cd82-4db7-a375-4c51eb825180","block_type":"box","text":"experience, more likely to be financially resilient over time.","page_number":220,"box":{"x":116,"y":542,"width":438,"height":12}},{"id":"93eee355-afb8-4f8d-8704-8ba28eb031f5","block_type":"box","text":"Climate and decarbonization investment objectives","page_number":220,"box":{"x":295,"y":581,"width":414,"height":12}},{"id":"068147be-64fc-40f4-8c57-cc6aad075b7b","block_type":"box","text":"Certain active BlackRock funds have climate and decarbonization objectives in addition to financial","page_number":220,"box":{"x":117,"y":611,"width":737,"height":12}},{"id":"bab05237-7460-48be-a45f-df5828ff523c","block_type":"box","text":"objectives. Consistent with the objectives of those investment strategies, our stewardship activity in","page_number":220,"box":{"x":116,"y":627,"width":741,"height":12}},{"id":"4422a337-bd38-4c96-bbd6-16a8c4e0d20d","block_type":"box","text":"relation to the holdings in those funds differs in some respects from BAIS’ benchmark guidelines, which","page_number":220,"box":{"x":117,"y":642,"width":771,"height":12}},{"id":"a51eb3de-e328-4738-bfbf-708e0a1470a1","block_type":"box","text":"are described above. Specifically, for those funds’ holdings, we look to investee companies to","page_number":220,"box":{"x":116,"y":658,"width":699,"height":12}},{"id":"3769b994-4769-4c15-a055-3335ece1bdf7","block_type":"box","text":"demonstrate that they are aligned with a decarbonization pathway that means their business model","page_number":220,"box":{"x":116,"y":673,"width":736,"height":12}},{"id":"88464d14-67d1-455c-95bb-8daba529edfe","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":220,"box":{"x":116,"y":689,"width":754,"height":12}},{"id":"ef2f875b-3784-4ad6-9703-7f508893436e","block_type":"box","text":"above pre-industrial levels. In addition, clients in separately managed accounts may instruct BlackRock","page_number":220,"box":{"x":116,"y":704,"width":766,"height":12}},{"id":"b4ceb05f-cb80-48f1-aa2b-303e310860fc","block_type":"box","text":"to apply these guidelines to their holdings. Both in the case of funds and separately managed","page_number":220,"box":{"x":116,"y":720,"width":692,"height":12}},{"id":"5fe26036-201a-466e-9818-ef21c24a77bb","block_type":"box","text":"accounts, these guidelines are only implemented upon explicit selection and approval by the applicable","page_number":220,"box":{"x":116,"y":735,"width":765,"height":12}},{"id":"8a187a3f-a245-403a-ab1d-d679b2d6d8b3","block_type":"box","text":"fund board or client.","page_number":220,"box":{"x":116,"y":751,"width":147,"height":9}},{"id":"133b11d9-5ed4-4d23-ac03-0066afda139b","block_type":"box","text":"11","page_number":220,"box":{"x":144,"y":776,"width":7,"height":5}},{"id":"e74e0ad9-a754-45fd-a472-74bb96ff2838","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":220,"box":{"x":171,"y":776,"width":691,"height":10}},{"id":"40868a87-62aa-4dee-bc47-9e2e2bd242be","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":220,"box":{"x":170,"y":789,"width":686,"height":9}},{"id":"77be6366-d6bd-4f2a-adb3-4718f3b408ef","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":220,"box":{"x":170,"y":802,"width":682,"height":9}},{"id":"9d9cfb03-98c2-4b66-b5f9-692003b35baa","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":220,"box":{"x":170,"y":815,"width":683,"height":9}},{"id":"4d67a775-52ba-4430-a31a-d935bf2d8036","block_type":"box","text":"operates, customer loyalty, and relationships with regulators. It is our view that well-managed companies will effectively","page_number":220,"box":{"x":170,"y":828,"width":708,"height":9}},{"id":"ef6a5d25-2c57-433f-9e9c-72f4a2748448","block_type":"box","text":"evaluate and manage material sustainability-related risks and opportunities relevant to their businesses. Governance is","page_number":220,"box":{"x":170,"y":840,"width":707,"height":10}},{"id":"52f7b75c-e214-4360-84f8-79ddb3bf492b","block_type":"box","text":"the core means by which boards can oversee the creation of durable financial value over time. Appropriate risk","page_number":220,"box":{"x":170,"y":853,"width":658,"height":10}},{"id":"459e7604-1bb8-4fe3-99f2-a508d28f98fd","block_type":"box","text":"oversight of business-relevant and material sustainability-related considerations is a component of a sound governance","page_number":220,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"380b2e87-4b65-4a3e-9689-39d81c85ac78","block_type":"box","text":"framework.","page_number":220,"box":{"x":170,"y":879,"width":65,"height":8}},{"id":"edba6f4b-d8b8-43d4-929d-62e168218ad1","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":220,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"bcbbed5f-e2af-418e-a3bd-64e15f5db955","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":220,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"d229eb9f-67f8-4555-8e74-4eaaffde05fa","block_type":"box","text":"16","page_number":220,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"8d1e0a1a-8c10-47cd-8db3-b717d1c6b360","block_type":"box","text":"NM1026U-6030748-220/260","page_number":220,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"041aaf88-aece-4cec-9590-e85bf8a018f6","block_type":"box","text":"These decarbonization stewardship guidelines focus on companies which produce goods and services","page_number":221,"box":{"x":116,"y":87,"width":766,"height":12}},{"id":"45659c8f-28fd-4713-ba51-ed1d938b6659","block_type":"box","text":"that contribute to real world decarbonization or have a carbon intensive business model and face","page_number":221,"box":{"x":116,"y":102,"width":724,"height":10}},{"id":"29253248-63b5-44b4-96b0-63d8eea1fdd8","block_type":"box","text":"outsized impacts from the low carbon transition, based on reported and estimated scopes 1, 2, and 3","page_number":221,"box":{"x":116,"y":118,"width":754,"height":12}},{"id":"306774f4-833d-42ce-bb78-342b5dc787cd","block_type":"box","text":"greenhouse gas emissions. These companies should provide disclosures that set out their","page_number":221,"box":{"x":116,"y":134,"width":675,"height":12}},{"id":"15c628fc-5c79-4f14-af04-e1ea2a24d07d","block_type":"box","text":"governance, strategy, risk management processes and metrics and targets relevant to","page_number":221,"box":{"x":116,"y":149,"width":646,"height":12}},{"id":"5b723254-8cfd-4783-917f-27c4ba3dd12f","block_type":"box","text":"decarbonization. It is helpful to investors’ understanding when these disclosures include an explanation","page_number":221,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"a6688e33-2f63-4fce-a9de-7c4fc70958f4","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":221,"box":{"x":116,"y":180,"width":760,"height":12}},{"id":"fa851f60-6d5c-4402-b613-3f9d79237990","block_type":"box","text":"scope 1, scope 2 and material scope 3 greenhouse gas (GHG) emissions and reduction targets for","page_number":221,"box":{"x":116,"y":196,"width":739,"height":12}},{"id":"eef36375-f8bd-4799-9bac-4be37c444829","block_type":"box","text":"scope 1 and 2 emissions.","page_number":221,"box":{"x":116,"y":211,"width":194,"height":12}},{"id":"36d74bd5-e8c5-480e-a833-2d942cf147a1","block_type":"box","text":"Under these climate- and decarbonization-specific guidelines, BAIS may recommend a vote against","page_number":221,"box":{"x":117,"y":242,"width":744,"height":12}},{"id":"e35efe44-bdc4-49c0-9ad8-1e8439277a16","block_type":"box","text":"directors or support for a relevant shareholder proposal if a company does not appear to be adequately","page_number":221,"box":{"x":116,"y":258,"width":771,"height":12}},{"id":"558cf5ee-15e7-4ae7-bca4-c9b3a97cc3b5","block_type":"box","text":"acting to address or disclosing material climate-related risks, consistent with the parameters set out in","page_number":221,"box":{"x":116,"y":273,"width":761,"height":12}},{"id":"780ef4e9-9c9f-47cd-9ab8-24261d6245e1","block_type":"box","text":"these climate- and decarbonization-specific guidelines. We may recommend supporting shareholder","page_number":221,"box":{"x":116,"y":289,"width":749,"height":12}},{"id":"7063b7e2-63de-4994-a761-f310e0fd2353","block_type":"box","text":"proposals seeking information relevant to a company’s stated low-carbon transition strategy or targets","page_number":221,"box":{"x":117,"y":304,"width":760,"height":12}},{"id":"6e878f87-17a7-4f29-ad1e-3e46eaa1007b","block_type":"box","text":"that the company does not currently provide and that would be helpful to investment decision-making.","page_number":221,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"5002371f-fd27-416c-b0cd-dbcd688b1b23","block_type":"box","text":"We would not recommend support for shareholder proposals that seek to constrain board or","page_number":221,"box":{"x":116,"y":335,"width":689,"height":12}},{"id":"68d02f3b-8ad8-46ee-b0a3-5692d3472b54","block_type":"box","text":"management decision-making or direct specific business or strategic decisions. As under the BAIS","page_number":221,"box":{"x":117,"y":351,"width":736,"height":12}},{"id":"aeeb134a-6062-4aa3-a52f-9eb4052d208b","block_type":"box","text":"benchmark approach, the active portfolio managers are ultimately responsible for voting consistent","page_number":221,"box":{"x":117,"y":366,"width":737,"height":12}},{"id":"8a5ae4f7-8ead-4c99-a462-6268bf6968e6","block_type":"box","text":"with their investment mandate and fund objectives. For the funds and accounts in scope, voting on","page_number":221,"box":{"x":116,"y":382,"width":736,"height":12}},{"id":"442c893e-5248-43f5-b7e1-d6e2fd6104c7","block_type":"box","text":"matters not related to climate risk and the energy transition is undertaken in line with BAIS’ benchmark","page_number":221,"box":{"x":117,"y":397,"width":765,"height":12}},{"id":"4af0a453-a3e0-4de5-ba2d-af09d7284fc2","block_type":"box","text":"guidelines.","page_number":221,"box":{"x":116,"y":413,"width":85,"height":12}},{"id":"de640f1c-2265-4504-8949-32eddc84973d","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":221,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"886732fe-c278-4f42-a41f-5495e81ebae1","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":221,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"613e8865-b854-472b-b1f4-5534806d4ca0","block_type":"box","text":"17","page_number":221,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"a2b27129-48a6-4ccb-bc69-8a673401ed7f","block_type":"box","text":"NM1026U-6030748-221/260","page_number":221,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e2bee207-d795-4951-a77f-161974702cbc","block_type":"box","text":"Appendix 1: How we fulfil and oversee our investment stewardship responsibilities","page_number":222,"box":{"x":168,"y":87,"width":668,"height":12}},{"id":"f1601775-e940-48c0-9077-31542ea11fa0","block_type":"box","text":"Oversight","page_number":222,"box":{"x":116,"y":118,"width":83,"height":12}},{"id":"b4296397-fe23-4e5d-b495-8bbcd8d3fac5","block_type":"box","text":"The Global Head of BAIS has primary oversight of and responsibility for the team’s activities, including","page_number":222,"box":{"x":116,"y":149,"width":764,"height":12}},{"id":"764d6a12-c079-4206-9c58-ca7db1371db6","block_type":"box","text":"voting in accordance with the BlackRock Active Investment Stewardship Global Engagement and","page_number":222,"box":{"x":116,"y":165,"width":726,"height":12}},{"id":"665ef356-4dfb-4004-8a69-14baa87bdfad","block_type":"box","text":"Voting Guidelines (the “Guidelines”), which require the application of professional judgment and","page_number":222,"box":{"x":116,"y":180,"width":714,"height":12}},{"id":"4df4aefa-3326-465f-8576-f775b4257db6","block_type":"box","text":"consideration of each company’s unique circumstances, as well as input from active investors. BAIS is","page_number":222,"box":{"x":116,"y":196,"width":765,"height":12}},{"id":"a632f872-0eac-430a-864b-274198729cc1","block_type":"box","text":"independent from BlackRock Investment Stewardship in our engagement and voting activities,","page_number":222,"box":{"x":117,"y":211,"width":704,"height":12}},{"id":"9d04e35d-8f15-44f2-b452-48c7914dcf7b","block_type":"box","text":"reporting lines, and oversight.","page_number":222,"box":{"x":117,"y":227,"width":224,"height":12}},{"id":"6ddaa5c7-ea7d-4349-ab98-f61869a4303f","block_type":"box","text":"The Stewardship Leaders Group, comprised of senior active investors and other relevant stakeholders","page_number":222,"box":{"x":116,"y":258,"width":765,"height":11}},{"id":"5e42c43a-6fbd-48ad-9c42-2a89d0557da1","block_type":"box","text":"in BlackRock’s legal, public policy, sustainability and communications teams, helps shape the firm’s","page_number":222,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"992f0737-142c-4c63-a076-800b612baf1c","block_type":"box","text":"approach to investment stewardship on non-index equity investment strategies. The Group may advise","page_number":222,"box":{"x":116,"y":289,"width":769,"height":12}},{"id":"7eb5c136-404a-4ebb-b9c6-a39c739cf30d","block_type":"box","text":"on and review amendments to BAIS’ policies and practices. It does not determine voting decisions,","page_number":222,"box":{"x":116,"y":304,"width":739,"height":12}},{"id":"760dd57b-d0c8-4e23-b17f-dbeff1c93c6f","block_type":"box","text":"which are the responsibility of BAIS and the relevant active equity investors.","page_number":222,"box":{"x":116,"y":320,"width":568,"height":12}},{"id":"73cb71d5-7bfe-4b5b-88e0-8e7160268470","block_type":"box","text":"BAIS carries out engagement with companies in collaboration with active investment colleagues,","page_number":222,"box":{"x":117,"y":351,"width":721,"height":12}},{"id":"e3a30edf-bfd3-4164-bcf1-176602a61d01","block_type":"box","text":"executes proxy votes, and conducts vote operations (including maintaining records of votes cast) in a","page_number":222,"box":{"x":116,"y":366,"width":757,"height":12}},{"id":"fe5fc14d-8d92-41b8-9a5e-d7a5aea792b3","block_type":"box","text":"manner consistent with the Guidelines. BAIS also conducts research on corporate governance issues","page_number":222,"box":{"x":117,"y":382,"width":757,"height":12}},{"id":"5e62b894-43df-4870-92fb-04a3c7753862","block_type":"box","text":"and participates in industry discussions to contribute to and keep abreast of important developments in","page_number":222,"box":{"x":116,"y":397,"width":768,"height":12}},{"id":"945ae901-c3a8-4a7d-a0ae-189dd22faf41","block_type":"box","text":"the corporate governance field. BAIS may use third parties for certain of the foregoing activities and","page_number":222,"box":{"x":116,"y":413,"width":744,"height":12}},{"id":"096c15c7-79b9-4a96-8b1b-40920193eba0","block_type":"box","text":"performs oversight of those third parties (see “Use and oversight of third-party vote services providers”","page_number":222,"box":{"x":117,"y":428,"width":765,"height":12}},{"id":"d4c73e1c-744f-4fe6-b6b2-bb87949849d3","block_type":"box","text":"below).","page_number":222,"box":{"x":117,"y":444,"width":58,"height":12}},{"id":"597a4ecf-626f-4ce6-9119-a0d45e496ca3","block_type":"box","text":"Voting guidelines and vote execution","page_number":222,"box":{"x":116,"y":475,"width":302,"height":12}},{"id":"131a3dd2-dbf9-46d3-a2d9-869de9613fc7","block_type":"box","text":"BlackRock votes on proxy issues when our clients authorize us to do so. We carefully consider the","page_number":222,"box":{"x":117,"y":506,"width":735,"height":12}},{"id":"51d57438-5ba6-4f99-abd1-5b1690a07d42","block_type":"box","text":"voting items submitted to funds and other fiduciary account(s) (Fund or Funds) for which we have","page_number":222,"box":{"x":116,"y":521,"width":728,"height":12}},{"id":"0e21eca3-40ca-4a2d-a2e8-f8ee6ca5eca3","block_type":"box","text":"voting authority. BlackRock votes (or refrains from voting) for each Fund for which we have voting","page_number":222,"box":{"x":116,"y":537,"width":730,"height":12}},{"id":"1fd87480-cc08-40c6-a8b3-4ac75eb60388","block_type":"box","text":"authority based on our evaluation of the alignment of the voting items with the long-term economic","page_number":222,"box":{"x":116,"y":552,"width":734,"height":12}},{"id":"2712e6f2-fe53-46c8-8ba4-47419b956dcc","block_type":"box","text":"interests of our clients, in the exercise of our independent business judgment, and without regard to the","page_number":222,"box":{"x":117,"y":568,"width":771,"height":12}},{"id":"b5d8fde3-25a1-4655-8346-4e97397a7e89","block_type":"box","text":"relationship of the issuer (or any shareholder proponent or dissident shareholder) to the Fund, the","page_number":222,"box":{"x":117,"y":583,"width":730,"height":12}},{"id":"ad15256d-17f7-45d6-bca5-765f0a753520","block_type":"box","text":"Fund’s affiliates (if any), BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts","page_number":222,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"be6ec897-9736-4d68-8520-a0903874d5ae","block_type":"box","text":"management policies and procedures,” below).","page_number":222,"box":{"x":117,"y":614,"width":353,"height":12}},{"id":"5e1029dd-6f74-407b-9ba5-065e55b8dd5b","block_type":"box","text":"When exercising voting rights, BAIS will normally vote on specific proxy issues in accordance with the","page_number":222,"box":{"x":116,"y":645,"width":759,"height":12}},{"id":"1e989377-08d6-4122-97d2-ad2d6fb93156","block_type":"box","text":"Guidelines, although portfolio managers have the right to vote differently on their holdings if they","page_number":222,"box":{"x":117,"y":661,"width":713,"height":12}},{"id":"721f4d6c-45c9-473a-8bb4-e4d1051c2640","block_type":"box","text":"determine doing so is more aligned with the investment objective and financial interests of clients","page_number":222,"box":{"x":116,"y":676,"width":719,"height":12}},{"id":"795a52ae-877f-476e-b14b-37410351d0ce","block_type":"box","text":"invested in the funds they manage.","page_number":222,"box":{"x":117,"y":692,"width":258,"height":12}},{"id":"2bfbc2c3-d011-49e9-97b3-16f1c6f55b00","block_type":"box","text":"The Guidelines are not intended to be exhaustive. BAIS applies the Guidelines on a case-by-case","page_number":222,"box":{"x":116,"y":723,"width":726,"height":12}},{"id":"b7660f96-3890-49eb-8d65-71a2c0f4b23f","block_type":"box","text":"basis, in the context of the individual circumstances of each company and the specific issue under","page_number":222,"box":{"x":117,"y":738,"width":728,"height":12}},{"id":"365bc5ae-ba3a-4e3c-8ada-ac65f3fe8ac7","block_type":"box","text":"review. As such, the Guidelines do not indicate how BAIS will vote in every instance. Rather, they","page_number":222,"box":{"x":117,"y":754,"width":723,"height":12}},{"id":"1f6d7c37-e58c-4ac6-ae15-302a5fb0361f","block_type":"box","text":"reflect our view about corporate governance issues generally, and provide insight into how we typically","page_number":222,"box":{"x":117,"y":769,"width":761,"height":12}},{"id":"034a4c89-b042-4678-9681-c6e355e0376c","block_type":"box","text":"approach issues that are commonly put to a shareholder vote. The Guidelines are reviewed annually","page_number":222,"box":{"x":116,"y":785,"width":747,"height":12}},{"id":"d3f46076-2fa2-4c29-8a17-71ec73addfd4","block_type":"box","text":"and updated as necessary to reflect changes in market practices, developments in corporate","page_number":222,"box":{"x":116,"y":800,"width":688,"height":12}},{"id":"9d2e4db7-b816-469c-9ed6-2b3ee2309940","block_type":"box","text":"governance and feedback from companies and clients. In this way, BAIS aims to maintain policies that","page_number":222,"box":{"x":116,"y":816,"width":760,"height":12}},{"id":"0e7a3add-97dd-4e01-a16e-c8f432349b1d","block_type":"box","text":"explain our approach to governance practices most aligned with clients’ long-term financial interests.","page_number":222,"box":{"x":116,"y":831,"width":751,"height":12}},{"id":"4c717a8e-84f4-4108-bc22-0317047d09e8","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BAIS’ ability to vote such","page_number":222,"box":{"x":117,"y":862,"width":740,"height":12}},{"id":"da98a39c-d99c-4128-8497-abcfe07f3985","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":222,"box":{"x":117,"y":878,"width":768,"height":12}},{"id":"17aa068e-fb8c-4c58-b1b0-7c794e6ac589","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":222,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"acdaf257-8634-4424-9579-027680c60f8f","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":222,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"2172a5de-70bd-40bd-a6c7-0bb72ad5caa1","block_type":"box","text":"18","page_number":222,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"44ce2e27-c1bd-4984-83e4-0161d087776d","block_type":"box","text":"NM1026U-6030748-222/260","page_number":222,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"e2316711-1d5d-4019-812c-f303cd2dbcbb","block_type":"box","text":"untimely notice of shareholder meetings; ii) restrictions on a foreigner’s ability to exercise votes; iii)","page_number":223,"box":{"x":117,"y":87,"width":735,"height":12}},{"id":"52693772-bd80-4065-ad65-bf9e406f097a","block_type":"box","text":"requirements to vote proxies in person; iv) “share-blocking” (requirements that investors who exercise","page_number":223,"box":{"x":117,"y":102,"width":759,"height":13}},{"id":"5507dcf5-0f76-4ebc-9d99-29f0cd6603f7","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":223,"box":{"x":116,"y":118,"width":728,"height":12}},{"id":"0b7d8e1f-7c6c-4b1a-aa13-f81e7b17ca39","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); v) potential difficulties in","page_number":223,"box":{"x":116,"y":134,"width":700,"height":12}},{"id":"d974a3fc-4480-4048-a238-804ed9f94607","block_type":"box","text":"translating the proxy; vi) regulatory constraints; and vii) requirements to provide local agents with","page_number":223,"box":{"x":116,"y":149,"width":723,"height":12}},{"id":"9fadb1d5-1eee-4ebd-9428-bcf43e69de29","block_type":"box","text":"powers of attorney to facilitate voting instructions. We are not supportive of impediments to the","page_number":223,"box":{"x":117,"y":165,"width":706,"height":12}},{"id":"aadf4d7d-3a2b-4dd2-abbf-69ff7f38f5e8","block_type":"box","text":"exercise of voting rights such as share-blocking or overly burdensome administrative requirements.","page_number":223,"box":{"x":116,"y":180,"width":742,"height":12}},{"id":"5181349d-9950-4959-9a7e-fc1208c66f12","block_type":"box","text":"BlackRock votes proxies in these situations on a “best-efforts” basis. In addition, BAIS may determine","page_number":223,"box":{"x":117,"y":211,"width":759,"height":12}},{"id":"611b17f4-59bf-43c8-89d8-98c073fc8e18","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":223,"box":{"x":116,"y":227,"width":723,"height":12}},{"id":"a2019a03-0458-4d4f-a746-e9c57503a051","block_type":"box","text":"allocation) if the costs (including but not limited to opportunity costs associated with share-blocking","page_number":223,"box":{"x":116,"y":242,"width":737,"height":12}},{"id":"66d971c9-e8d2-40ad-9118-d5facb030e16","block_type":"box","text":"constraints) associated with exercising a vote are expected to outweigh the benefit the client would","page_number":223,"box":{"x":116,"y":258,"width":739,"height":12}},{"id":"2a71405f-edf4-45e4-9147-688374f3a495","block_type":"box","text":"derive by voting on the proposal.","page_number":223,"box":{"x":116,"y":273,"width":248,"height":12}},{"id":"0689bbc1-a827-48da-a13b-039460085948","block_type":"box","text":"Voting Choice","page_number":223,"box":{"x":116,"y":304,"width":118,"height":12}},{"id":"fb7a3c56-a63f-4e53-9d92-401a4b838ef3","block_type":"box","text":"BlackRock offers Voting Choice, a program that provides eligible clients with more opportunities to","page_number":223,"box":{"x":117,"y":335,"width":733,"height":12}},{"id":"d36c134f-8d6a-4ff1-bc19-acf29e3d1cf7","block_type":"box","text":"participate in the proxy voting process where legally and operationally viable.","page_number":223,"box":{"x":117,"y":351,"width":575,"height":12}},{"id":"751991af-7a8a-4a44-be22-f2bf22899e4e","block_type":"box","text":"Voting Choice is currently available for eligible clients invested in certain institutional pooled funds in","page_number":223,"box":{"x":116,"y":382,"width":748,"height":12}},{"id":"67a76be3-ea4d-466f-b6f3-2a5b589a1898","block_type":"box","text":"the U.S., UK, and Canada that use systematic active equity (SAE) and multi-asset strategies. In","page_number":223,"box":{"x":116,"y":397,"width":716,"height":12}},{"id":"b1ec5e94-64ac-4b4b-bc28-03fe4ae18cf5","block_type":"box","text":"addition, institutional clients in separately managed accounts (SMAs) are eligible for BlackRock Voting","page_number":223,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"70ab823f-4060-4252-abaf-ec80e442bb6d","block_type":"box","text":"Choice regardless of their investment strategies.","page_number":223,"box":{"x":117,"y":428,"width":357,"height":12}},{"id":"962e63a9-cd52-4234-9d9f-a466fbea1104","block_type":"box","text":"12","page_number":223,"box":{"x":477,"y":428,"width":11,"height":6}},{"id":"f3d26266-2e1d-49d4-bc8c-b5c9dc5a0425","block_type":"box","text":"As a result, the shares attributed to BlackRock in company share registers may be voted differently","page_number":223,"box":{"x":116,"y":459,"width":740,"height":12}},{"id":"f59f690f-0357-47a6-92f2-fe11ede7967f","block_type":"box","text":"depending on whether our clients have authorized BAIS to vote on their behalf, have authorized","page_number":223,"box":{"x":116,"y":475,"width":715,"height":12}},{"id":"c7cec907-0171-427b-ae1c-4eac6136d145","block_type":"box","text":"BlackRock to vote in accordance with a third-party policy, or have elected to vote shares in accordance","page_number":223,"box":{"x":117,"y":490,"width":769,"height":12}},{"id":"aa7088c3-46d8-4e5a-9756-07ac857b8a01","block_type":"box","text":"with their own policy. Our clients have greater control over proxy voting because of Voting Choice.","page_number":223,"box":{"x":116,"y":506,"width":727,"height":12}},{"id":"2efc02fb-cc01-495b-a0c6-758aac5e9e46","block_type":"box","text":"13","page_number":223,"box":{"x":846,"y":506,"width":10,"height":6}},{"id":"00ab3f94-d2c9-4328-b9c9-bbb8f583cff7","block_type":"box","text":"Use and oversight of third-party vote services providers","page_number":223,"box":{"x":117,"y":537,"width":452,"height":12}},{"id":"42551a7b-1afd-4384-93cd-bda82ffdda53","block_type":"box","text":"Third-party vote services providers – or proxy research firms—provide research and recommendations","page_number":223,"box":{"x":116,"y":568,"width":767,"height":12}},{"id":"634305ab-d6f6-4e7e-b070-4297ae150a58","block_type":"box","text":"on proxy votes, as well as voting infrastructure. BlackRock contracts primarily with the vote services","page_number":223,"box":{"x":116,"y":583,"width":746,"height":12}},{"id":"544de84b-15e0-43ca-b3c6-495fd5efc126","block_type":"box","text":"provider ISS and leverages its online platform to supply research and support voting, record keeping,","page_number":223,"box":{"x":117,"y":599,"width":754,"height":12}},{"id":"2bb18354-98d9-4952-8a90-87974ee649d4","block_type":"box","text":"and reporting processes. We also use Glass Lewis’ research and analysis as an input into our voting","page_number":223,"box":{"x":116,"y":614,"width":752,"height":12}},{"id":"c73bb17c-9038-482a-9e7b-225f418d9388","block_type":"box","text":"process. It is important to note that, although proxy research firms provide important data and analysis,","page_number":223,"box":{"x":117,"y":630,"width":768,"height":12}},{"id":"d24d2413-6229-4b0c-9834-77426b340e62","block_type":"box","text":"BAIS does not rely solely on their information or follow their voting recommendations. A company’s","page_number":223,"box":{"x":117,"y":645,"width":738,"height":12}},{"id":"d2ff1a83-98cc-4364-98a7-fa53b656a112","block_type":"box","text":"disclosures, our engagements and voting, investment colleagues’ insights and our Guidelines are","page_number":223,"box":{"x":116,"y":661,"width":722,"height":12}},{"id":"377ea0de-160f-4848-a775-3b0e718dbfb8","block_type":"box","text":"important inputs into our voting decisions on behalf of clients.","page_number":223,"box":{"x":117,"y":676,"width":452,"height":12}},{"id":"3b77e2f9-b8ff-4d6e-b9df-10cfb0cdde61","block_type":"box","text":"Given the large universe of actively held companies, BAIS employs the proxy services provider to","page_number":223,"box":{"x":117,"y":707,"width":722,"height":12}},{"id":"d6f29c6d-9b29-4d39-95c6-4153a1d08841","block_type":"box","text":"streamline the voting process by making voting recommendations based on BAIS’ Guidelines when the","page_number":223,"box":{"x":116,"y":723,"width":765,"height":12}},{"id":"2d57aa81-0c62-420b-8ca0-fa7d98f41637","block_type":"box","text":"items on a shareholder meeting agenda are routine. 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Our oversight of service providers includes regular meetings with client","page_number":224,"box":{"x":117,"y":118,"width":747,"height":12}},{"id":"11f3ba17-a5a8-4f37-8050-183b3c240436","block_type":"box","text":"service teams, systematic monitoring of vendor operations, as well as annual due diligence meetings in","page_number":224,"box":{"x":116,"y":134,"width":771,"height":12}},{"id":"e33edac9-f726-48ff-90e3-a88aa7d38df5","block_type":"box","text":"accordance with BlackRock’s firmwide policies.","page_number":224,"box":{"x":116,"y":149,"width":355,"height":12}},{"id":"da522892-dbb6-4478-a3c0-1662482600d0","block_type":"box","text":"Conflicts management policies and procedures","page_number":224,"box":{"x":116,"y":181,"width":383,"height":12}},{"id":"4640a920-b709-40b3-bb8c-57d1f33257e2","block_type":"box","text":"BlackRock maintains policies and procedures that seek to prevent undue influence on BAIS’ proxy","page_number":224,"box":{"x":117,"y":213,"width":734,"height":12}},{"id":"2ef1dfe7-1a77-448d-9067-be15d9d147cf","block_type":"box","text":"voting activity. 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In addition, BlackRock seeks to ensure that all","page_number":224,"box":{"x":150,"y":637,"width":682,"height":12}},{"id":"7245298d-18ef-47f3-8feb-11a1f4509105","block_type":"box","text":"engagements with corporate issuers, dissident shareholders or shareholder proponents are","page_number":224,"box":{"x":150,"y":653,"width":683,"height":11}},{"id":"c738863b-43ef-4fb7-9a6c-1003c30272ef","block_type":"box","text":"managed consistently and without regard to BlackRock’s relationship with such parties. Clients or","page_number":224,"box":{"x":150,"y":668,"width":723,"height":12}},{"id":"3d08b0ae-7741-4de5-9a72-7f9e1e2b5234","block_type":"box","text":"business partners are not given preferential treatment or differentiated access. 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Within the normal course of business, BAIS may","page_number":224,"box":{"x":149,"y":730,"width":681,"height":12}},{"id":"030eaa9b-dc54-46f3-acba-e62d9431a652","block_type":"box","text":"engage directly with BlackRock clients, business partners and/or third parties, and/or with","page_number":224,"box":{"x":150,"y":746,"width":663,"height":11}},{"id":"2efae5ac-013e-4d2f-a6a0-760e05b87886","block_type":"box","text":"employees with sales, vendor management, or business partnership roles, in discussions","page_number":224,"box":{"x":150,"y":761,"width":662,"height":12}},{"id":"64a04771-bc5f-4ee7-aa47-f428470769ff","block_type":"box","text":"regarding our approach to stewardship, general corporate governance matters, client reporting","page_number":224,"box":{"x":150,"y":777,"width":701,"height":12}},{"id":"b7ef6f7e-2c05-4924-aa2c-6a193cbf643d","block_type":"box","text":"needs, and/or to otherwise ensure that proxy-related client service levels are met","page_number":224,"box":{"x":150,"y":792,"width":601,"height":12}},{"id":"11eb2016-02aa-47cf-96d7-473575c19b61","block_type":"box","text":"• Determined to engage, in certain instances, an independent third-party voting service provider to","page_number":224,"box":{"x":117,"y":816,"width":749,"height":12}},{"id":"b4e8e749-8a41-4781-b55e-0dc6e120ce50","block_type":"box","text":"make proxy voting recommendations as a further safeguard to avoid perceived or potential","page_number":224,"box":{"x":150,"y":831,"width":678,"height":12}},{"id":"9a2070b5-6f3a-4300-8b4c-55dd12202cfc","block_type":"box","text":"conflicts of interest, to satisfy regulatory requirements, or as may be otherwise required by","page_number":224,"box":{"x":150,"y":847,"width":674,"height":12}},{"id":"427dfba9-716d-4cb4-934b-64ad9c9703b5","block_type":"box","text":"applicable law. In such circumstances, the independent third-party voting service provider provides","page_number":224,"box":{"x":150,"y":862,"width":737,"height":12}},{"id":"de103d6e-62c1-4a5b-b196-dd580ec04987","block_type":"box","text":"BlackRock with recommendations, in accordance with the Guidelines, as to how to vote such","page_number":224,"box":{"x":151,"y":878,"width":693,"height":11}},{"id":"9f9dea40-9cce-4776-acea-66858da21588","block_type":"box","text":"BlackRock Active Investment Stewardship","page_number":224,"box":{"x":117,"y":909,"width":338,"height":12}},{"id":"b95e04d1-068a-41df-aa5a-cfbb0f01f68a","block_type":"box","text":"Global Engagement and Voting Guidelines |","page_number":224,"box":{"x":530,"y":909,"width":324,"height":12}},{"id":"402e9506-b9bd-4903-9426-32d497abaebe","block_type":"box","text":"20","page_number":224,"box":{"x":865,"y":909,"width":18,"height":9}},{"id":"6d055846-0dc9-431e-8b09-e241c0c90ec7","block_type":"box","text":"NM1026U-6030748-224/260","page_number":224,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"cd33e14d-3a05-4796-9456-a792c4ec4e45","block_type":"box","text":"proxies. BlackRock uses an independent third-party voting service provider to make proxy voting","page_number":225,"box":{"x":150,"y":87,"width":722,"height":12}},{"id":"b6df249b-a287-48bf-9be8-b3264f6d5343","block_type":"box","text":"recommendations for shares of BlackRock, Inc. and companies affiliated with BlackRock, Inc.","page_number":225,"box":{"x":150,"y":102,"width":698,"height":12}},{"id":"ada66e74-7a35-43b5-8740-0fc9a2b9b363","block_type":"box","text":"BlackRock may also use an independent third-party voting service provider to make proxy voting","page_number":225,"box":{"x":151,"y":118,"width":721,"height":12}},{"id":"79b64bd9-e503-4a90-b8d7-26aa0f74bfb5","block_type":"box","text":"recommendations for certain perceived or potential conflicts of interest, including:","page_number":225,"box":{"x":150,"y":134,"width":608,"height":12}},{"id":"4c6c1181-c039-4db2-b17b-a65a0676b726","block_type":"box","text":"• public companies that include BlackRock employees on their boards of directors","page_number":225,"box":{"x":159,"y":156,"width":624,"height":12}},{"id":"84313099-43d3-47bc-93a4-753426a54698","block_type":"box","text":"• public companies of which a BlackRock, Inc. board member serves as a senior executive or a","page_number":225,"box":{"x":159,"y":178,"width":725,"height":12}},{"id":"806ec3dd-4146-4293-8dda-c536cc656f6c","block_type":"box","text":"member of the board of directors","page_number":225,"box":{"x":184,"y":193,"width":248,"height":10}},{"id":"38a97623-500a-4add-bfc1-c75fcf73da11","block_type":"box","text":"• public companies that are the subject of certain transactions involving BlackRock Funds","page_number":225,"box":{"x":159,"y":215,"width":682,"height":12}},{"id":"844f8992-40a2-4442-ba98-1da3a4cdd10d","block_type":"box","text":"• public companies that are joint venture partners with BlackRock, and","page_number":225,"box":{"x":159,"y":238,"width":540,"height":11}},{"id":"fcab3205-545c-427e-9ddd-997aa83cee79","block_type":"box","text":"• public companies when legal or regulatory requirements compel BlackRock to use an","page_number":225,"box":{"x":159,"y":260,"width":663,"height":12}},{"id":"3d2fff49-d718-4fc5-86a8-24bda0c13d09","block_type":"box","text":"independent third-party voting service provider","page_number":225,"box":{"x":184,"y":275,"width":350,"height":12}},{"id":"bc2bb865-07d5-4b08-8c01-88ffa55d0739","block_type":"box","text":"In selecting an independent third-party voting service provider, we assess several characteristics,","page_number":225,"box":{"x":117,"y":304,"width":727,"height":12}},{"id":"ad095c28-6d65-4e12-9806-92c6623e03a7","block_type":"box","text":"including but not limited to: independence, an ability to analyze proxy issues and make","page_number":225,"box":{"x":117,"y":319,"width":647,"height":12}},{"id":"6b205b7d-352d-4abf-9359-d8aef2f4827a","block_type":"box","text":"recommendations in the economic interest of our clients in accordance with the Guidelines, reputation","page_number":225,"box":{"x":117,"y":335,"width":760,"height":12}},{"id":"aba150bb-4b71-4fc8-984e-f0a1171420b1","block_type":"box","text":"for reliability and integrity, and operational capacity to accurately deliver the assigned","page_number":225,"box":{"x":116,"y":350,"width":637,"height":12}},{"id":"416e7e23-f05c-4493-aae7-79e8736951de","block_type":"box","text":"recommendations in a timely manner. We may engage more than one independent third-party voting","page_number":225,"box":{"x":117,"y":366,"width":752,"height":12}},{"id":"f481e9fd-e581-4d8d-bd25-a7190b8fb7f6","block_type":"box","text":"service provider, in part to mitigate potential or perceived conflicts of interest at a single voting service","page_number":225,"box":{"x":116,"y":381,"width":761,"height":12}},{"id":"693beaf1-2450-436e-99fe-17dd5aed0af9","block_type":"box","text":"provider.","page_number":225,"box":{"x":117,"y":397,"width":69,"height":12}},{"id":"79908cb8-4ef0-4916-bf04-257b465f27ec","block_type":"box","text":"Securities lending","page_number":225,"box":{"x":116,"y":425,"width":149,"height":13}},{"id":"4233c2c6-fdba-4f0d-abc3-e0a4ff029106","block_type":"box","text":"If authorized, BlackRock acts as a securities lending agent on behalf of its clients. Securities lending is","page_number":225,"box":{"x":117,"y":454,"width":764,"height":12}},{"id":"9ba58aff-b5f1-43a0-b5e8-61fe77b0396c","block_type":"box","text":"a well-regulated practice that contributes to capital market efficiency. It also enables funds to generate","page_number":225,"box":{"x":116,"y":470,"width":763,"height":12}},{"id":"c05cd651-eb02-4b3c-8f5f-76652c33fd5c","block_type":"box","text":"additional returns which in turn may allow fund providers to offset fund expenses.","page_number":225,"box":{"x":116,"y":485,"width":607,"height":12}},{"id":"3839e527-cd01-48cd-8d77-f253259e381f","block_type":"box","text":"With regard to the relationship between securities lending and proxy voting, BlackRock cannot vote","page_number":225,"box":{"x":116,"y":514,"width":741,"height":12}},{"id":"20a5b416-8474-44b7-afb9-1cb5a6df92c9","block_type":"box","text":"shares on loan and may determine to recall them to allow for voting. This decision is guided by our","page_number":225,"box":{"x":116,"y":530,"width":736,"height":12}},{"id":"11d93d54-3ab2-4465-ad1f-4af53f890daf","block_type":"box","text":"fiduciary duty as an asset manager to our clients in helping them achieve their investment goals. 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The Guidelines set forth BlackRock’s approach to","page_number":228,"box":{"x":117,"y":211,"width":733,"height":12}},{"id":"6429af02-26d1-4382-952e-0686bdc36975","block_type":"box","text":"recalling securities on loan in connection with proxy voting.","page_number":228,"box":{"x":117,"y":227,"width":440,"height":12}},{"id":"bc4cc092-144e-4130-9e67-da46e4fde321","block_type":"box","text":"Reports to the Board","page_number":228,"box":{"x":117,"y":258,"width":171,"height":11}},{"id":"97e01a68-81a7-4d21-84ca-02673192531d","block_type":"box","text":"BlackRock will report on an annual basis to the Directors on (1) a summary of the proxy voting process","page_number":228,"box":{"x":117,"y":281,"width":767,"height":12}},{"id":"41da34dc-413a-4991-9660-ba5f93aa52f2","block_type":"box","text":"as applicable to the Funds covered by this policy in the preceding year together with a representation","page_number":228,"box":{"x":116,"y":296,"width":756,"height":12}},{"id":"3fd51ea9-dddc-44ea-8c24-3917c545b765","block_type":"box","text":"that all votes were in accordance with the Guidelines and the BlackRock Climate and Decarbonization","page_number":228,"box":{"x":116,"y":312,"width":762,"height":9}},{"id":"0f1912e3-4d57-40e1-ba54-ceaa7b843c75","block_type":"box","text":"Stewardship Guidelines, as applicable (2) any material changes to the Guidelines and the BlackRock","page_number":228,"box":{"x":116,"y":327,"width":754,"height":12}},{"id":"9219f4f9-a2c1-485d-895b-a376a7e4f70e","block_type":"box","text":"Climate and Decarbonization Stewardship Guidelines, including material changes to conflicts","page_number":228,"box":{"x":117,"y":343,"width":693,"height":12}},{"id":"6c407c66-b5c0-41c2-8d3d-2cbb761f4671","block_type":"box","text":"management practices, that have not previously been 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Our stewardship program – including when engaging with","page_number":233,"box":{"x":116,"y":118,"width":730,"height":12}},{"id":"5cfd975e-c7b8-4d22-b12d-4879f3f449dc","block_type":"box","text":"companies and voting at shareholder meetings on behalf of clients – is conducted from a long-term","page_number":233,"box":{"x":116,"y":134,"width":740,"height":12}},{"id":"8c5496de-aa8f-4675-b4b4-830b6bded8a7","block_type":"box","text":"investor perspective and takes a financial materiality-based approach, focused solely on advancing","page_number":233,"box":{"x":117,"y":149,"width":740,"height":12}},{"id":"3a8cfc17-7b85-4bd4-bd69-ff66ed97359c","block_type":"box","text":"clients’ long-term financial interests.","page_number":233,"box":{"x":116,"y":165,"width":271,"height":12}},{"id":"96726d69-c342-4d68-b300-f41d3099c9e6","block_type":"box","text":"BIS engages with the boards and management of companies in which clients are invested to deepen","page_number":233,"box":{"x":117,"y":192,"width":753,"height":13}},{"id":"e46dd7ab-f759-4080-ba1b-256284004f71","block_type":"box","text":"our understanding of a company’s business model, including how they are overseeing material","page_number":233,"box":{"x":116,"y":208,"width":708,"height":12}},{"id":"d7d5e352-b645-4437-ba39-5e39a6157512","block_type":"box","text":"business risks and opportunities over time, and to help inform our voting on behalf of clients.","page_number":233,"box":{"x":117,"y":223,"width":689,"height":13}},{"id":"0c0ef88b-8f3d-4876-a5a6-98dd094272cc","block_type":"box","text":"Engagements provide companies with the opportunity to share their perspectives on topics that, in BIS’","page_number":233,"box":{"x":117,"y":239,"width":769,"height":12}},{"id":"a19c1f9a-0e74-4da4-aab4-357cb5e62405","block_type":"box","text":"experience, impact the long-term financial returns BlackRock’s clients depend on to meet their financial","page_number":233,"box":{"x":116,"y":254,"width":771,"height":13}},{"id":"afd51d20-1d1d-413c-8055-e8a6e99325bb","block_type":"box","text":"goals.","page_number":233,"box":{"x":116,"y":270,"width":49,"height":12}},{"id":"5b762bb7-ec90-4eea-809f-1b9d278eb3d0","block_type":"box","text":"Voting at a company’s shareholder meeting is a right of share ownership and a core principle of","page_number":233,"box":{"x":116,"y":298,"width":713,"height":12}},{"id":"782a5a4e-711d-47bf-a591-24e940b6bd68","block_type":"box","text":"corporate governance. As a fiduciary, BlackRock is legally required to make proxy voting","page_number":233,"box":{"x":116,"y":313,"width":663,"height":12}},{"id":"b02e4f1c-3065-464c-99a1-e7a6358460ce","block_type":"box","text":"determinations in a manner that is consistent with the investment objectives of clients who have","page_number":233,"box":{"x":116,"y":329,"width":715,"height":12}},{"id":"73f068e4-4762-4bc7-8b18-7e8115b0fe98","block_type":"box","text":"delegated voting authority to us. BIS’ Benchmark Policies, and the vote decisions made consistent with","page_number":233,"box":{"x":116,"y":344,"width":770,"height":12}},{"id":"f5b5f25f-1930-465d-b684-b0a2729274c2","block_type":"box","text":"those policies, reflect our reasonable and independent judgment of what is in the long-term financial","page_number":233,"box":{"x":116,"y":360,"width":746,"height":12}},{"id":"cef494d6-41ea-4bd4-add6-d2a13c2e20b1","block_type":"box","text":"interests of clients. Our vote decisions are often informed by several factors, including in-depth","page_number":233,"box":{"x":117,"y":375,"width":706,"height":12}},{"id":"35c082c4-8662-4372-b9e8-dd5faf22969b","block_type":"box","text":"analysis of company disclosures, comparisons against industry peers, third-party research, and, where","page_number":233,"box":{"x":116,"y":391,"width":768,"height":12}},{"id":"f25debde-50c5-4885-9177-f6d2c226b014","block_type":"box","text":"appropriate, engagement with companies.","page_number":233,"box":{"x":116,"y":407,"width":318,"height":11}},{"id":"38f3bd86-e921-4dc3-9b35-3dfb828a710e","block_type":"box","text":"Generally, BIS supports the vote recommendations of the board of directors and management at","page_number":233,"box":{"x":117,"y":434,"width":721,"height":12}},{"id":"b2e5fd34-10b1-4ea4-b583-1ce65d67e0eb","block_type":"box","text":"companies which have sound corporate governance and deliver strong financial returns over time.","page_number":233,"box":{"x":116,"y":450,"width":734,"height":12}},{"id":"61e760fd-1ea2-449a-8760-9b860c9a56c2","block_type":"box","text":"When we determine it is in our clients’ financial interests to convey concern to companies through","page_number":233,"box":{"x":116,"y":465,"width":729,"height":12}},{"id":"4e10ba75-9825-48b6-9518-dfce0b344114","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":233,"box":{"x":116,"y":481,"width":768,"height":12}},{"id":"96b9cad9-f6fd-4593-af9d-84c7c8f05fe3","block_type":"box","text":"proposals, or we might not support management’s voting recommendation on a shareholder proposal.","page_number":233,"box":{"x":117,"y":496,"width":761,"height":12}},{"id":"1a86451c-a178-4e06-af82-1a3247a6a8af","block_type":"box","text":"Shareholder 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to:","page_number":233,"box":{"x":163,"y":590,"width":468,"height":11}},{"id":"3caae277-5418-4c66-bc9a-93a65c12925a","block_type":"box","text":"• Vote to elect, remove, and nominate directors, approve the appointment of the auditor, and","page_number":233,"box":{"x":159,"y":617,"width":705,"height":12}},{"id":"5b6b353f-90b4-41d3-ac2e-690b6b3297b5","block_type":"box","text":"amend the corporate charter or bylaws.","page_number":233,"box":{"x":184,"y":633,"width":297,"height":12}},{"id":"d3945458-a9a6-4b69-ae40-e78f5035736f","block_type":"box","text":"• Vote on key board decisions that are material to","page_number":233,"box":{"x":159,"y":655,"width":377,"height":12}},{"id":"9e3ee485-3b87-4016-a420-ce48c80810e9","block_type":"box","text":"the protection of their investment, including but","page_number":233,"box":{"x":536,"y":655,"width":345,"height":12}},{"id":"e77c099f-a113-4202-bee9-e5cec1487ec4","block_type":"box","text":"not limited to, changes to the purpose of the busi","page_number":233,"box":{"x":184,"y":670,"width":353,"height":12}},{"id":"3aec4bf7-d317-4510-8d40-e8f2f2908104","block_type":"box","text":"ness, dilution levels, and pre-emptive rights.","page_number":233,"box":{"x":539,"y":670,"width":317,"height":12}},{"id":"9806d338-2e75-4ca7-a0db-a3b6de78c29d","block_type":"box","text":"• Access sufficient and timely information on governance, strategic, and business matters –","page_number":233,"box":{"x":159,"y":692,"width":691,"height":12}},{"id":"a555a95a-3925-4837-818b-b985fb061a8e","block_type":"box","text":"where such matters are material – to make informed decisions.","page_number":233,"box":{"x":183,"y":707,"width":468,"height":10}},{"id":"7dfa8523-183d-4321-98e7-3b0acead4d83","block_type":"box","text":"Key governance topics","page_number":233,"box":{"x":409,"y":742,"width":182,"height":11}},{"id":"46a2131b-118b-40b7-b43c-3238e9184beb","block_type":"box","text":"In our experience, there are certain globally applicable elements of corporate governance that","page_number":233,"box":{"x":117,"y":769,"width":696,"height":12}},{"id":"dcd25a78-e2fa-45e1-a0b7-e797641626b8","block_type":"box","text":"contribute to a company’s ability to create long-term financial value for shareholders. These are topics","page_number":233,"box":{"x":116,"y":785,"width":756,"height":12}},{"id":"11eb3365-242a-4589-8f0e-f494c02c5d1a","block_type":"box","text":"that shareholders may have the ability to vote on at shareholder meetings. These areas include:","page_number":233,"box":{"x":116,"y":800,"width":711,"height":12}},{"id":"22d5e54e-895f-4b01-b7da-48e467eed999","block_type":"box","text":"• Boards and directors","page_number":233,"box":{"x":117,"y":828,"width":192,"height":10}},{"id":"1d86a71e-95e6-4224-a7f0-3a4f9ea42e00","block_type":"box","text":"3","page_number":233,"box":{"x":143,"y":853,"width":4,"height":5}},{"id":"65e4704b-b327-4cf5-90ec-006613967f2c","block_type":"box","text":"Examples include: Government of Canada, “Canada Business Corporations Act,” amended 2024; European Union,","page_number":233,"box":{"x":171,"y":853,"width":682,"height":10}},{"id":"e02c8f9d-829a-4aba-b8be-68d2fcddf095","block_type":"box","text":"“Shareholder Rights Directive II,” 2017; and the China Securities Regulatory Commission, “Code of Corporate","page_number":233,"box":{"x":170,"y":866,"width":651,"height":10}},{"id":"1dfe594b-9101-4591-a5dc-f7daa5a39cd2","block_type":"box","text":"Governance for Listed Companies in China,” 2001. Websites accessed in December 2025.","page_number":233,"box":{"x":170,"y":879,"width":538,"height":10}},{"id":"eae7b52d-f1fd-4f02-84d6-f8cc15e4e2be","block_type":"box","text":"BlackRock Investment Stewardship","page_number":233,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"4e669473-468b-4d28-85ff-999d5b01770d","block_type":"box","text":"Global Principles |","page_number":233,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"ea438c25-5717-4dad-bfc3-ad3e8053ee55","block_type":"box","text":"4","page_number":233,"box":{"x":874,"y":909,"width":9,"height":9}},{"id":"3a523e69-9e8b-4047-82c5-4845facc0f3c","block_type":"box","text":"NM1026U-6030748-233/260","page_number":233,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"0dfa450d-7747-4b48-8fbc-4b61acafb261","block_type":"box","text":"• Auditors and audit-related issues","page_number":234,"box":{"x":117,"y":87,"width":282,"height":10}},{"id":"c22802f7-b80e-49be-9d35-00d130fa0b88","block_type":"box","text":"• Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":234,"box":{"x":117,"y":109,"width":635,"height":12}},{"id":"6da30dc3-07e2-4352-b14a-438c18d311af","block_type":"box","text":"• Executive compensation","page_number":234,"box":{"x":117,"y":130,"width":219,"height":12}},{"id":"cf582c4c-b2de-4061-afaa-3daa3af4e694","block_type":"box","text":"• Shareholder protections and other significant corporate governance matters","page_number":234,"box":{"x":117,"y":152,"width":600,"height":12}},{"id":"185e2e80-9457-4886-bf09-aa15a789889b","block_type":"box","text":"• Shareholder proposals","page_number":234,"box":{"x":117,"y":173,"width":206,"height":12}},{"id":"9c78b7b3-f4d0-483b-bba8-84d09ecd790b","block_type":"box","text":"The BIS Benchmark Policies are not prescriptive but rather are applied on a pragmatic basis, taking","page_number":234,"box":{"x":116,"y":201,"width":744,"height":12}},{"id":"ebddf401-b042-4492-8dc4-7713a9f0744f","block_type":"box","text":"into consideration a number of company-specific factors, including the sector, market, and business","page_number":234,"box":{"x":117,"y":216,"width":744,"height":12}},{"id":"3b824dc9-6350-43cb-b92a-0540cd558f0c","block_type":"box","text":"environment within which companies operate.","page_number":234,"box":{"x":116,"y":232,"width":345,"height":12}},{"id":"7d003eeb-b339-41f1-9828-cb0db5d36086","block_type":"box","text":"At the regional level, it is our view that companies should observe the accepted corporate governance","page_number":234,"box":{"x":116,"y":259,"width":761,"height":12}},{"id":"877c884e-65bf-4a4c-8dfa-fc35fb392d16","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":234,"box":{"x":116,"y":275,"width":736,"height":12}},{"id":"dc8bed4b-8bdc-4bf7-82cb-24bd04944d07","block_type":"box","text":"their approach better supports durable, long-term financial value creation. Our regional voting","page_number":234,"box":{"x":116,"y":290,"width":698,"height":12}},{"id":"224a8e4f-b086-4362-bcd1-6e4903bcb5f5","block_type":"box","text":"guidelines explain how the BIS Global Principles inform our voting decisions in relation to common","page_number":234,"box":{"x":116,"y":306,"width":735,"height":12}},{"id":"e3b9c7df-6ba2-4d2a-8f28-79e296786b81","block_type":"box","text":"ballot items for shareholder meetings in those markets.","page_number":234,"box":{"x":117,"y":321,"width":406,"height":12}},{"id":"2c316cfa-a9f6-416f-ad7a-f1a8ad4d0609","block_type":"box","text":"4","page_number":234,"box":{"x":525,"y":321,"width":5,"height":6}},{"id":"5cbe3e81-2a7e-4a75-a986-a29b015677cd","block_type":"box","text":"Boards and directors","page_number":234,"box":{"x":416,"y":355,"width":173,"height":9}},{"id":"352dc0aa-adde-4dd8-8442-9043d33d3196","block_type":"box","text":"Oversight role of the board","page_number":234,"box":{"x":117,"y":382,"width":220,"height":13}},{"id":"bda96494-2782-4cee-a090-ef0d9d363b62","block_type":"box","text":"Companies whose boards are comprised of appropriately qualified, engaged directors with","page_number":234,"box":{"x":117,"y":410,"width":676,"height":12}},{"id":"b7e5532a-abe0-42ae-9977-77c53d3df2e5","block_type":"box","text":"professional characteristics relevant to a company’s business enhance the board’s ability to add long","page_number":234,"box":{"x":117,"y":426,"width":753,"height":12}},{"id":"f0bc7731-9da9-4a79-9906-6c5d03526aa3","block_type":"box","text":"term financial value and serve as the voice of shareholders in board discussions. In our view, a strong","page_number":234,"box":{"x":116,"y":441,"width":761,"height":12}},{"id":"3e8aa95e-a672-4b1c-8de9-85e410e08e7f","block_type":"box","text":"board gives a company a competitive advantage, providing valuable oversight and contributing to the","page_number":234,"box":{"x":117,"y":457,"width":754,"height":12}},{"id":"4fe9fa09-7a2c-48ee-bf7a-f3bec9be2369","block_type":"box","text":"most important management decisions that support long-term financial performance.","page_number":234,"box":{"x":117,"y":472,"width":632,"height":12}},{"id":"9a679cb8-f083-4d80-9561-71626b8ebf9b","block_type":"box","text":"For this reason, our investment stewardship efforts focus on the effectiveness of the board of directors.","page_number":234,"box":{"x":117,"y":500,"width":768,"height":12}},{"id":"15e744d1-164f-4df3-853f-f0a19b4949f1","block_type":"box","text":"We engage, as necessary, with members of the board’s nominating and/or governance committee to","page_number":234,"box":{"x":116,"y":515,"width":753,"height":12}},{"id":"7ab465ad-041f-4516-bf28-54edbbf9fd26","block_type":"box","text":"assess whether governance practices and board composition are effective given a company’s","page_number":234,"box":{"x":116,"y":531,"width":701,"height":12}},{"id":"b17fecbf-d1ba-4819-bdde-263038d3c4f8","block_type":"box","text":"business model, sector, market, and the business environment in which a company is operating.","page_number":234,"box":{"x":117,"y":546,"width":719,"height":12}},{"id":"8720ff32-ee9b-4dc2-b934-4989fbd7d96f","block_type":"box","text":"We consider it good practice when the board establishes and maintains a framework of robust and","page_number":234,"box":{"x":116,"y":574,"width":736,"height":12}},{"id":"89fbe88f-2aeb-4e4a-a004-8f4381c9ed65","block_type":"box","text":"effective governance mechanisms that supports its oversight of the company’s strategy and","page_number":234,"box":{"x":116,"y":589,"width":685,"height":12}},{"id":"a72cf6ae-06f3-442e-881e-57d527ba3f8f","block_type":"box","text":"operations, consistent with the long-term financial interests of investors. This includes having clear","page_number":234,"box":{"x":116,"y":605,"width":735,"height":12}},{"id":"dda5d63a-f28f-46a0-88dc-c7e1f00ba2dd","block_type":"box","text":"descriptions of the role of the board and the committees of the board and how directors engage with","page_number":234,"box":{"x":116,"y":620,"width":748,"height":12}},{"id":"8588ccdb-b0ea-4c75-83c6-51b5789990af","block_type":"box","text":"and oversee management, as well as disclosure of material risks that may affect a company’s long","page_number":234,"box":{"x":116,"y":636,"width":738,"height":12}},{"id":"4f9af7fb-c024-46ed-ba5d-f8647e0c30a6","block_type":"box","text":"term strategy and how management is effectively identifying, managing, and mitigating such risks.","page_number":234,"box":{"x":116,"y":651,"width":732,"height":12}},{"id":"38ea11c1-85fb-42a5-8925-55b6a96c55fe","block_type":"box","text":"Understanding management’s long-term strategy and the milestones against which investors should","page_number":234,"box":{"x":117,"y":679,"width":741,"height":12}},{"id":"f1aebcda-277c-45a5-ac9f-fb891834eedd","block_type":"box","text":"assess its implementation is central to our approach. If any strategic targets are significantly missed or","page_number":234,"box":{"x":116,"y":694,"width":761,"height":12}},{"id":"7c19a2e6-f4f7-46f3-8d4a-28696961cccf","block_type":"box","text":"materially restated, we find it helpful when company disclosures provide a detailed explanation of the","page_number":234,"box":{"x":117,"y":710,"width":747,"height":12}},{"id":"7788eb9b-c7b6-4fe7-8f8f-f206a623a83f","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":234,"box":{"x":116,"y":725,"width":754,"height":12}},{"id":"dc53c09f-e975-4033-90e7-b1f96bdd0961","block_type":"box","text":"articulate the effectiveness of these mechanisms in overseeing the management of business risks and","page_number":234,"box":{"x":116,"y":741,"width":759,"height":12}},{"id":"e0b61431-728d-4d2b-9fde-4ae178638730","block_type":"box","text":"opportunities and the fulfillment of the company’s strategy.","page_number":234,"box":{"x":116,"y":756,"width":432,"height":12}},{"id":"eea59ae8-b193-4053-8f7c-768f4fd36cf4","block_type":"box","text":"Where a company has not adequately disclosed or demonstrated that its board has fulfilled these","page_number":234,"box":{"x":116,"y":784,"width":722,"height":12}},{"id":"a95a51f4-1c92-4a3d-ad6d-a7a98c7eabcd","block_type":"box","text":"corporate governance and risk oversight responsibilities, we may consider not supporting the election","page_number":234,"box":{"x":116,"y":800,"width":752,"height":12}},{"id":"7e7513b3-2c9b-4301-889e-1ee7a66ad579","block_type":"box","text":"of directors who, in our assessment, have particular responsibility for the issues.","page_number":234,"box":{"x":116,"y":815,"width":594,"height":12}},{"id":"0ead8435-66bc-4cf6-af33-bfe06b4979b7","block_type":"box","text":"4","page_number":234,"box":{"x":143,"y":840,"width":4,"height":5}},{"id":"3bc75cc1-b98d-4dfd-b4dc-46e23e56705d","block_type":"box","text":"Our regional voting guidelines reflect these different market standards and norms. Depending on the market, generally","page_number":234,"box":{"x":170,"y":840,"width":702,"height":10}},{"id":"b8416c79-6ec3-4e8f-87be-421923036b64","block_type":"box","text":"accepted practice is informed by corporate law, market regulation, best practices, and industry initiatives, amongst other","page_number":234,"box":{"x":170,"y":853,"width":712,"height":10}},{"id":"71f1c329-e905-46a6-8e86-3502ccbf6a86","block_type":"box","text":"factors. BIS carries out engagement with companies, executes proxy votes, and conducts vote operations (including","page_number":234,"box":{"x":170,"y":866,"width":688,"height":10}},{"id":"4d923e7d-69aa-43fe-b100-acc4bd006b35","block_type":"box","text":"maintaining records of votes cast) in a manner consistent with the relevant regional voting guidelines.","page_number":234,"box":{"x":170,"y":879,"width":600,"height":10}},{"id":"bbbc9bb4-9c80-42dd-98ed-a4a0c8e37043","block_type":"box","text":"BlackRock Investment Stewardship","page_number":234,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"4bccba8f-56ba-4751-9f6d-c8d5621686ac","block_type":"box","text":"Global Principles |","page_number":234,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"116b3cd3-9c6b-42bc-a895-496b502d833f","block_type":"box","text":"5","page_number":234,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"46e0bfef-2ba6-4581-9da8-c97c737ff9f4","block_type":"box","text":"NM1026U-6030748-234/260","page_number":234,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"042e0b74-e559-4bb6-a578-a82d9502c47f","block_type":"box","text":"When casting vote decisions on behalf of clients on the election of directors, some of the factors that","page_number":235,"box":{"x":116,"y":87,"width":750,"height":12}},{"id":"f5e8f2e2-c338-4bd8-9eaf-3265d75b1dc8","block_type":"box","text":"speak to the board’s effectiveness as a group include the relevance of individual directors’","page_number":235,"box":{"x":116,"y":102,"width":673,"height":13}},{"id":"34445631-5e58-492b-aec3-83e0aed3b280","block_type":"box","text":"qualifications and skillsets, as well as directors’ capacity and other time commitments, and how these","page_number":235,"box":{"x":116,"y":118,"width":757,"height":12}},{"id":"3bbe3cb4-c3d7-4a00-9534-71af3c27ce7f","block_type":"box","text":"factors may contribute to the company’s financial performance. We look to boards to establish formal","page_number":235,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"8848b3d0-8878-4e9b-9675-4994c6f553ca","block_type":"box","text":"and transparent processes for nominating directors that reflect the company’s long-term strategy and","page_number":235,"box":{"x":116,"y":149,"width":754,"height":12}},{"id":"6d4686df-ea48-480b-82ae-7b09eba553cf","block_type":"box","text":"business model.","page_number":235,"box":{"x":117,"y":165,"width":125,"height":9}},{"id":"b7482973-decd-439c-a0f7-f6a3883855df","block_type":"box","text":"In the section titled “Board quality and effectiveness” below, we provide more detail about our","page_number":235,"box":{"x":117,"y":193,"width":697,"height":12}},{"id":"69cf9401-e8a0-45fc-b5f9-86fe0df04a3b","block_type":"box","text":"approach to board composition and how it underpins board effectiveness and long-term financial value","page_number":235,"box":{"x":116,"y":209,"width":766,"height":12}},{"id":"090b6af1-d1ab-4f72-9e41-3b3b11169126","block_type":"box","text":"creation.","page_number":235,"box":{"x":116,"y":224,"width":69,"height":10}},{"id":"a4ccaca6-1b2a-4708-9657-d23dbd9cdda7","block_type":"box","text":"Regular accountability through director elections","page_number":235,"box":{"x":116,"y":253,"width":398,"height":12}},{"id":"8cc621bd-55d5-448b-bfa8-b04160945212","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":235,"box":{"x":116,"y":281,"width":756,"height":12}},{"id":"78705f6f-9ee0-4fd5-8806-a8cc07fdba27","block_type":"box","text":"or concern about, the performance of the board in overseeing and advising management. To ensure","page_number":235,"box":{"x":116,"y":297,"width":749,"height":12}},{"id":"5ac9b1e2-3fb6-4801-98a1-f22b5aeeb3d5","block_type":"box","text":"accountability for their decisions on behalf of shareholders, directors should stand for election on a","page_number":235,"box":{"x":116,"y":312,"width":736,"height":12}},{"id":"96ac6f10-daf0-41a4-b1f9-2eda797a9973","block_type":"box","text":"regular basis, ideally annually.","page_number":235,"box":{"x":117,"y":328,"width":223,"height":12}},{"id":"75f70544-45bb-429e-899d-911357674563","block_type":"box","text":"5","page_number":235,"box":{"x":341,"y":328,"width":6,"height":6}},{"id":"7b31989d-ab2d-4fb0-a622-e11471fcca18","block_type":"box","text":"Annual director elections allow shareholders to reaffirm their support","page_number":235,"box":{"x":347,"y":328,"width":517,"height":12}},{"id":"17212fc6-e28a-44d6-966d-99046a71abac","block_type":"box","text":"for, or concerns about, board members’ decisions in a timely manner. When board members are not","page_number":235,"box":{"x":116,"y":343,"width":749,"height":12}},{"id":"a15e0c1e-1b01-4f88-a140-e9aabecde78b","block_type":"box","text":"elected annually, we consider it good practice for boards to have a rotation policy to ensure that,","page_number":235,"box":{"x":116,"y":359,"width":719,"height":12}},{"id":"ed05c281-50b8-4253-8954-ab973383d3a9","block_type":"box","text":"through a board cycle, all directors have had their appointment re-confirmed, with a proportion of","page_number":235,"box":{"x":116,"y":374,"width":722,"height":12}},{"id":"1d02d417-c357-4443-aaa7-801243bec0ee","block_type":"box","text":"directors being put forward for election at each shareholder meeting.","page_number":235,"box":{"x":116,"y":390,"width":513,"height":12}},{"id":"9c7569de-a4a7-4c53-84c7-a5d0368a0ed4","block_type":"box","text":"Board quality and effectiveness","page_number":235,"box":{"x":116,"y":418,"width":258,"height":12}},{"id":"195624d9-3a96-4547-94bd-55bf881ba1b4","block_type":"box","text":"Regular director elections also give boards the opportunity to adjust their composition in an orderly way","page_number":235,"box":{"x":117,"y":447,"width":770,"height":12}},{"id":"09fe4127-79c9-4c29-9856-49353136ef7d","block_type":"box","text":"to reflect developments in the company’s strategy and the market environment. In our view, it is","page_number":235,"box":{"x":116,"y":462,"width":714,"height":12}},{"id":"6f1075ad-1403-4cf5-b91f-ef2b0889732b","block_type":"box","text":"beneficial for new directors to be brought onto the board periodically to refresh the group’s thinking,","page_number":235,"box":{"x":117,"y":478,"width":741,"height":12}},{"id":"29ced6ad-9d68-4194-849c-cef16808fe0b","block_type":"box","text":"while supporting both continuity and appropriate succession planning. We consider the average overall","page_number":235,"box":{"x":116,"y":493,"width":768,"height":12}},{"id":"c03c2d9c-53c8-4593-b5d7-c8174a39b5c5","block_type":"box","text":"tenure of the board and seek a balance between the knowledge and experience of longer-serving","page_number":235,"box":{"x":116,"y":509,"width":728,"height":12}},{"id":"4bf8e319-0e5a-4c67-a3db-da9ae018683d","block_type":"box","text":"directors and the fresh perspectives of directors who joined more recently.","page_number":235,"box":{"x":116,"y":524,"width":556,"height":12}},{"id":"4e54bac8-a89d-4ba4-bd45-439fc90a774e","block_type":"box","text":"We appreciate when companies regularly review and assess how directors nominated for election","page_number":235,"box":{"x":116,"y":553,"width":731,"height":12}},{"id":"11112be1-0999-42d4-bb9e-b4b92a463664","block_type":"box","text":"contribute to the effectiveness of the board. In our view, the company’s assessment should consider a","page_number":235,"box":{"x":116,"y":568,"width":763,"height":12}},{"id":"b553f4f0-691c-4727-b393-99361c7737d5","block_type":"box","text":"number of factors, including each director’s independence and time commitments, as well as the","page_number":235,"box":{"x":117,"y":584,"width":720,"height":12}},{"id":"dcabca1c-7fe0-48bf-ae84-dba051b3a12d","block_type":"box","text":"breadth and relevance of director experiences and skillsets, and how these collectively contribute to","page_number":235,"box":{"x":117,"y":599,"width":744,"height":13}},{"id":"8f9f930c-d489-4f47-a8cf-84d37ed9fb5c","block_type":"box","text":"the board’s effectiveness in advising and overseeing management in delivering long-term financial","page_number":235,"box":{"x":116,"y":615,"width":734,"height":12}},{"id":"0fe73e2e-f931-4bfa-b14a-142814920c2d","block_type":"box","text":"returns.","page_number":235,"box":{"x":117,"y":631,"width":60,"height":9}},{"id":"9f05ca83-c10d-4472-9586-f680c5ec2e6a","block_type":"box","text":"Director independence","page_number":235,"box":{"x":116,"y":659,"width":187,"height":12}},{"id":"265ef654-2633-44e4-a1a4-28f7579cd301","block_type":"box","text":"Director independence – from management, significant shareholders, or other related parties – is a","page_number":235,"box":{"x":117,"y":688,"width":733,"height":12}},{"id":"ef247836-e4b9-4e04-87e7-29bd7cd3264c","block_type":"box","text":"central tenet of sound corporate governance across markets.","page_number":235,"box":{"x":116,"y":703,"width":452,"height":12}},{"id":"af80fd75-8daf-4e06-8b8a-c5fd02d65b4f","block_type":"box","text":"6","page_number":235,"box":{"x":570,"y":703,"width":5,"height":6}},{"id":"a08ee286-7089-47f6-8a7a-9c98531afa38","block_type":"box","text":"We look to boards to have a sufficient","page_number":235,"box":{"x":581,"y":703,"width":280,"height":10}},{"id":"0b619b4e-f62d-4adc-b07e-21f5687f124d","block_type":"box","text":"number of independent directors, free from conflicts of interest or undue influence, to ensure objectivity","page_number":235,"box":{"x":117,"y":719,"width":763,"height":12}},{"id":"6b93ed7b-14e7-4ba2-9880-43b4d72dd5e8","block_type":"box","text":"in the decision-making of the board and its ability to oversee management. We generally consider it","page_number":235,"box":{"x":117,"y":734,"width":738,"height":12}},{"id":"554cea32-e472-4136-8dcc-9d16d8b17f54","block_type":"box","text":"good practice for independent directors to make a majority of the board, or in the case of controlled","page_number":235,"box":{"x":116,"y":750,"width":734,"height":12}},{"id":"303bd0f6-5f92-44d5-ae86-e690f4f9805c","block_type":"box","text":"companies, at least one-third.","page_number":235,"box":{"x":116,"y":765,"width":219,"height":12}},{"id":"c6246184-65b5-4741-96f4-0ae3b0a16410","block_type":"box","text":"Common impediments to independence may include but are not limited to:","page_number":235,"box":{"x":117,"y":794,"width":551,"height":12}},{"id":"172feff2-b8f3-40f6-b040-95f897e69272","block_type":"box","text":"• Current or recent employment at the company or a subsidiary","page_number":235,"box":{"x":117,"y":816,"width":490,"height":12}},{"id":"0de18f1c-866b-443c-a6bc-b95b22b1ad6b","block_type":"box","text":"5","page_number":235,"box":{"x":143,"y":841,"width":4,"height":5}},{"id":"a7e15d21-af61-475e-b626-592d82b848bc","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":235,"box":{"x":171,"y":841,"width":703,"height":9}},{"id":"f2035ce8-9000-4fd8-9b10-df3b4137480d","block_type":"box","text":"regulation or voluntary best practice.","page_number":235,"box":{"x":170,"y":854,"width":215,"height":9}},{"id":"70ac6b41-30c3-46a5-accb-f41636297235","block_type":"box","text":"6","page_number":235,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"cde75a60-95f8-4c5c-ad15-165208506387","block_type":"box","text":"For example, please see: Tokyo Stock Exchange, “Japan’s Corporate Governance Code,” June 11, 2021; Financial","page_number":235,"box":{"x":171,"y":867,"width":683,"height":9}},{"id":"982bcb61-bda8-458e-9795-83ffec2f8af2","block_type":"box","text":"Reporting Council, “UK Corporate Governance Code,” January 2024, accessed in December 2025.","page_number":235,"box":{"x":171,"y":880,"width":587,"height":9}},{"id":"23a84068-ef0b-434d-b532-51a3fb9e31c8","block_type":"box","text":"BlackRock Investment Stewardship","page_number":235,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"e9739ad2-7dc2-474e-b9d1-59b5e42efbc7","block_type":"box","text":"Global Principles |","page_number":235,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"cfa53ec5-0765-44af-9fbf-6891b98d816e","block_type":"box","text":"6","page_number":235,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"6f8ea0d2-d1b8-4ba7-a7dc-9558e449d97f","block_type":"box","text":"NM1026U-6030748-235/260","page_number":235,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"6f86244b-6f70-4aff-8427-3646d20380e3","block_type":"box","text":"• Being, or representing, a shareholder with a substantial shareholding in the company","page_number":236,"box":{"x":117,"y":87,"width":668,"height":12}},{"id":"5d619c7c-bd71-4f36-9226-02ccf3806480","block_type":"box","text":"• Interlocking directorates","page_number":236,"box":{"x":117,"y":110,"width":216,"height":12}},{"id":"801d1907-4038-47b3-b382-c70364df7968","block_type":"box","text":"• Having any other interest, business, or other relationship which could, or could reasonably be","page_number":236,"box":{"x":117,"y":134,"width":730,"height":12}},{"id":"226bf0b3-c279-42e3-b8c6-c574c2893122","block_type":"box","text":"perceived to, materially interfere with a director’s ability to act in the best interests of the company","page_number":236,"box":{"x":150,"y":149,"width":729,"height":12}},{"id":"94ed0d29-f09a-4501-947d-c8eeb33189d1","block_type":"box","text":"and shareholders","page_number":236,"box":{"x":150,"y":165,"width":134,"height":9}},{"id":"adf5ad6a-6abb-4ff2-9dfe-aa88a7b4415a","block_type":"box","text":"In our experience, boards are most effective at overseeing and advising management when there is a","page_number":236,"box":{"x":117,"y":196,"width":759,"height":12}},{"id":"a731d36f-726f-4350-982b-84485b6cdd11","block_type":"box","text":"senior, independent board leader. This director may chair the board, or, where the chair is also the","page_number":236,"box":{"x":116,"y":211,"width":736,"height":12}},{"id":"216013d5-1e39-4589-8754-7e7121711f89","block_type":"box","text":"CEO (or is otherwise not independent), be designated as a lead independent director. The role of this","page_number":236,"box":{"x":117,"y":227,"width":757,"height":12}},{"id":"93a343ce-2ac7-465a-8e7f-4f888849f179","block_type":"box","text":"director is to support independent board members in fulfilling their oversight responsibilities effectively","page_number":236,"box":{"x":116,"y":242,"width":760,"height":12}},{"id":"66735f5a-bdad-4abd-80b8-4a4139ea1993","block_type":"box","text":"by shaping the agenda, ensuring adequate information is provided to the board, and encouraging","page_number":236,"box":{"x":117,"y":258,"width":726,"height":12}},{"id":"329b1774-89e1-4b94-875a-476874a8f9bd","block_type":"box","text":"independent director participation in board deliberations. We appreciate when the lead independent","page_number":236,"box":{"x":117,"y":273,"width":742,"height":12}},{"id":"93eae2c7-58b2-4cc8-aae8-db5982defeb3","block_type":"box","text":"director or another appropriate director is available to meet with shareholders to explain and","page_number":236,"box":{"x":116,"y":289,"width":687,"height":12}},{"id":"3fca6dcf-ac97-48ea-babf-7f782a31d527","block_type":"box","text":"contextualize a company’s approach as a situation warrants.","page_number":236,"box":{"x":116,"y":304,"width":454,"height":12}},{"id":"3e84d46f-e1fe-4c19-8aea-609b4396c9f8","block_type":"box","text":"Boards may face matters that could involve conflicts of interest for executives or affiliated directors, or","page_number":236,"box":{"x":117,"y":335,"width":759,"height":12}},{"id":"a5813a11-5a7f-4348-a395-74db16511378","block_type":"box","text":"that require additional focus. It is our view that objective oversight of such matters is best achieved","page_number":236,"box":{"x":116,"y":351,"width":736,"height":12}},{"id":"28cdb945-b3ca-4729-bb85-8e0831e3a119","block_type":"box","text":"when the board forms committees with a majority of independent directors, depending on market","page_number":236,"box":{"x":116,"y":366,"width":723,"height":12}},{"id":"6e3c9213-9f74-4da0-96dd-b4455a481677","block_type":"box","text":"norms and a company’s ownership structure. In many markets, these committees of the board","page_number":236,"box":{"x":117,"y":382,"width":704,"height":12}},{"id":"6c36ec8d-a659-43b2-9422-8ecc846b00a8","block_type":"box","text":"specialize in audit, director nominations, and compensation matters, among others. An ad hoc","page_number":236,"box":{"x":116,"y":397,"width":703,"height":12}},{"id":"111d47c6-667f-4e64-be39-38ecc5e50d79","block_type":"box","text":"committee might also be formed to decide on a special transaction, particularly one involving a related","page_number":236,"box":{"x":116,"y":413,"width":762,"height":12}},{"id":"f9df371d-63f2-412d-89a6-83b2f94cad72","block_type":"box","text":"party, or to investigate a significant adverse event.","page_number":236,"box":{"x":117,"y":428,"width":378,"height":12}},{"id":"87953b50-01b0-4bc0-b111-7b4842580bc4","block_type":"box","text":"Sufficient capacity","page_number":236,"box":{"x":117,"y":459,"width":152,"height":12}},{"id":"52496aeb-9b06-4c04-9371-4bb1f6d202df","block_type":"box","text":"As the role and expectations of a director are increasingly demanding, directors must be able to","page_number":236,"box":{"x":116,"y":490,"width":715,"height":12}},{"id":"6c122a75-8b84-4a1b-9483-0cb86a20732a","block_type":"box","text":"commit an appropriate amount of time to board and committee matters. It is important that directors","page_number":236,"box":{"x":116,"y":506,"width":743,"height":12}},{"id":"a10e67a4-d33c-4229-8a9d-a1badd434ed0","block_type":"box","text":"have the capacity to meet all of their responsibilities – including when there are unforeseen events –","page_number":236,"box":{"x":117,"y":521,"width":747,"height":12}},{"id":"ea67c36a-6658-4d4c-84e1-9648c4e865ac","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":236,"box":{"x":116,"y":537,"width":756,"height":12}},{"id":"2a34efbf-a886-4973-8453-08008579071c","block_type":"box","text":"would impair their ability to fulfill their duties.","page_number":236,"box":{"x":116,"y":552,"width":333,"height":12}},{"id":"78ca6a0b-715c-4f62-8079-ecb469556b82","block_type":"box","text":"Board composition","page_number":236,"box":{"x":116,"y":583,"width":158,"height":12}},{"id":"6cdb3bde-998d-404d-be7d-359832ce0161","block_type":"box","text":"In assessing board composition, we take into account a company’s board size, business model,","page_number":236,"box":{"x":117,"y":614,"width":714,"height":12}},{"id":"fc48db07-b9c5-46a8-acf5-1c0aecb3d296","block_type":"box","text":"strategy, market capitalization, and ownership structure, as well as the market in which the company","page_number":236,"box":{"x":116,"y":630,"width":750,"height":12}},{"id":"190c4c22-7a27-4f66-80f8-b35e82c6dc39","block_type":"box","text":"operates. We find it helpful when companies explain how their approach to board composition supports","page_number":236,"box":{"x":116,"y":645,"width":771,"height":12}},{"id":"be69d4f0-be9f-49c5-baba-de36ec0be1c9","block_type":"box","text":"the company’s governance practices.","page_number":236,"box":{"x":116,"y":661,"width":276,"height":12}},{"id":"80922b0f-0bbd-4024-8433-9e8f073ed018","block_type":"box","text":"When nominating directors to the board, we look to companies to provide sufficient information on the","page_number":236,"box":{"x":116,"y":692,"width":754,"height":12}},{"id":"5e842b0e-29b7-4f9e-9bc0-bbcdab2fd667","block_type":"box","text":"individual candidates so that shareholders can assess the capabilities and suitability of each individual","page_number":236,"box":{"x":117,"y":707,"width":757,"height":12}},{"id":"10f90da0-05d3-41d9-9b1f-49e7c98a99ac","block_type":"box","text":"nominee and their fit within overall board composition. These disclosures should explain how the","page_number":236,"box":{"x":117,"y":723,"width":715,"height":12}},{"id":"eba18f42-d6a1-4717-a1c7-46c5898ec83d","block_type":"box","text":"collective experience and expertise of the board, as well as the particular skillsets of individual","page_number":236,"box":{"x":116,"y":738,"width":697,"height":12}},{"id":"62e94624-29eb-4554-b4b9-f5a63ed58a29","block_type":"box","text":"directors, aligns with the company’s long-term strategy. Highly qualified, engaged directors with","page_number":236,"box":{"x":116,"y":754,"width":707,"height":12}},{"id":"b038124f-4789-459a-af16-7c39c8fd8a19","block_type":"box","text":"professional characteristics relevant to a company’s business and strategy enhance the ability of the","page_number":236,"box":{"x":117,"y":769,"width":744,"height":12}},{"id":"8ca4bd22-a8e5-423a-bbbb-9e5f0482d74a","block_type":"box","text":"board to add value and be the voice of shareholders in board discussions.","page_number":236,"box":{"x":117,"y":785,"width":547,"height":9}},{"id":"2241b815-7933-4432-8266-3fb5b42199cb","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":236,"box":{"x":117,"y":816,"width":750,"height":12}},{"id":"8cd8731c-5734-407f-a4d4-70e17d9a36ee","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":236,"box":{"x":117,"y":831,"width":659,"height":12}},{"id":"7fcde280-94e5-44b4-9005-966c072c6c1b","block_type":"box","text":"responsibilities to advise and oversee management. We note that in many markets, policymakers have","page_number":236,"box":{"x":117,"y":847,"width":768,"height":12}},{"id":"15d235aa-a9ae-42c3-bb5b-a5a30c11d5b3","block_type":"box","text":"set board gender diversity goals which we may discuss with companies, particularly if there is a risk","page_number":236,"box":{"x":116,"y":862,"width":743,"height":12}},{"id":"0ee8165e-149f-4a44-afe9-d4ca55d85661","block_type":"box","text":"their board composition may be misaligned.","page_number":236,"box":{"x":116,"y":878,"width":329,"height":12}},{"id":"97714eea-3c19-47a7-97d5-4e27a1a258b7","block_type":"box","text":"BlackRock Investment Stewardship","page_number":236,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"fd1f1d46-1bd3-40fb-b0ee-b6e3b236c4b7","block_type":"box","text":"Global Principles |","page_number":236,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"b15214df-790b-4989-8878-38a2bf0ae716","block_type":"box","text":"7","page_number":236,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"3997882b-1768-4022-bad6-5cc2269ddd26","block_type":"box","text":"NM1026U-6030748-236/260","page_number":236,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"4124b2aa-7572-4fbf-ad5c-61d8373d2e53","block_type":"box","text":"Auditors and audit-related issues","page_number":237,"box":{"x":366,"y":87,"width":272,"height":10}},{"id":"24311afa-899d-4d48-a21d-aa1a23ce8d20","block_type":"box","text":"BIS recognizes the critical importance of financial statements to provide a complete and accurate","page_number":237,"box":{"x":117,"y":117,"width":725,"height":12}},{"id":"135eb988-bb59-4b7d-8686-49e0e267df91","block_type":"box","text":"portrayal of a company’s financial condition. Accordingly, we look for the assumptions made by","page_number":237,"box":{"x":117,"y":133,"width":709,"height":12}},{"id":"2addf5ea-cb11-4980-8a51-bf0cf7e965cb","block_type":"box","text":"management, and reviewed by the auditor in preparing the financial statements, to be reasonable and","page_number":237,"box":{"x":117,"y":148,"width":760,"height":12}},{"id":"a01926bd-f77a-446d-bd06-8f01d332301c","block_type":"box","text":"justified.","page_number":237,"box":{"x":115,"y":164,"width":67,"height":12}},{"id":"fe922d04-7e3f-40d2-9fcd-483b92a9409a","block_type":"box","text":"We view the audit committee, or its equivalent, as responsible for overseeing the management of the","page_number":237,"box":{"x":116,"y":194,"width":754,"height":12}},{"id":"84b81b80-9cb9-4c00-97ff-a13c917b7b64","block_type":"box","text":"independent auditor and the internal audit function at a company. The committee plays an important","page_number":237,"box":{"x":117,"y":210,"width":746,"height":12}},{"id":"8ae56953-de08-4515-9129-bc9bb85955c8","block_type":"box","text":"role in a company’s financial reporting system by providing independent oversight of the accounts,","page_number":237,"box":{"x":117,"y":225,"width":733,"height":12}},{"id":"791fde57-6ac9-4177-8f72-4d771885745f","block_type":"box","text":"material financial, and, where appropriate to the jurisdiction, non-financial information and internal","page_number":237,"box":{"x":117,"y":241,"width":728,"height":12}},{"id":"24c1e3f4-1a2c-4819-a30b-ca1cecf3a75e","block_type":"box","text":"control frameworks. Moreover, in the absence of a dedicated risk committee, these committees can","page_number":237,"box":{"x":116,"y":256,"width":743,"height":11}},{"id":"1625db99-8f79-4b42-800c-040841e7ba86","block_type":"box","text":"provide oversight of Enterprise Risk Management systems.","page_number":237,"box":{"x":117,"y":272,"width":437,"height":12}},{"id":"27790d5c-c194-4636-9217-0121cd173066","block_type":"box","text":"7","page_number":237,"box":{"x":556,"y":272,"width":5,"height":6}},{"id":"19a2ea2d-b795-4708-8d31-ddd72799fe12","block_type":"box","text":"In our view, effective audit committee","page_number":237,"box":{"x":562,"y":272,"width":286,"height":11}},{"id":"3ea1d64b-20a0-4fc9-bcc9-f373ac375f31","block_type":"box","text":"oversight strengthens the quality and reliability of a company’s financial statements and provides an","page_number":237,"box":{"x":116,"y":287,"width":745,"height":12}},{"id":"b39b0d91-5ada-4a44-8728-23efbc429324","block_type":"box","text":"important level of reassurance to shareholders.","page_number":237,"box":{"x":117,"y":303,"width":354,"height":12}},{"id":"26110b5f-5764-42da-ad56-14eeb2a5e8f0","block_type":"box","text":"We look to audit committees, or their equivalent, to have clearly articulated charters that set out their","page_number":237,"box":{"x":116,"y":333,"width":750,"height":12}},{"id":"0d7389c0-b993-4f8d-ab67-6ad6e490bc3e","block_type":"box","text":"responsibilities. Additionally, having a rotation plan can periodically refresh the committee membership","page_number":237,"box":{"x":117,"y":349,"width":765,"height":12}},{"id":"2b2a0c4b-2c54-4c52-bbc8-4b103fd33ac8","block_type":"box","text":"and introduce new perspectives. We recognize that audit committees will rely on management, internal","page_number":237,"box":{"x":116,"y":364,"width":769,"height":12}},{"id":"27b4a484-84ad-4564-80d1-5d45710a108e","block_type":"box","text":"audit, and the independent auditor to fulfill their responsibilities. However, we look to committee","page_number":237,"box":{"x":116,"y":380,"width":712,"height":12}},{"id":"9728b163-66d5-4a1f-9c52-0aad105499d8","block_type":"box","text":"members to demonstrate they have relevant expertise to monitor and oversee the audit process and","page_number":237,"box":{"x":117,"y":395,"width":749,"height":12}},{"id":"fed132fe-6595-4320-a1b5-260b572731a3","block_type":"box","text":"related activities.","page_number":237,"box":{"x":117,"y":411,"width":129,"height":9}},{"id":"8d0161fb-e2ab-4ea7-8ded-3819888297e4","block_type":"box","text":"We take particular note of unexplained changes in reporting methodology, cases involving significant","page_number":237,"box":{"x":116,"y":441,"width":753,"height":12}},{"id":"be1201f4-ac22-4fc9-93d8-fd8c87c0823b","block_type":"box","text":"financial restatements, or ad hoc notifications of material financial weakness. In this respect, we look to","page_number":237,"box":{"x":116,"y":457,"width":770,"height":11}},{"id":"f9f146cf-affa-4063-9108-0dd26ff3ae33","block_type":"box","text":"audit committees to provide timely disclosure on the remediation of key and critical audit matters","page_number":237,"box":{"x":116,"y":472,"width":720,"height":12}},{"id":"125c5b3b-6968-4cc6-99e3-1550527596a2","block_type":"box","text":"identified either by the external auditor or internal audit function.","page_number":237,"box":{"x":117,"y":488,"width":478,"height":12}},{"id":"76928a9b-0fca-48da-a255-fcf2a0e6b66f","block_type":"box","text":"The integrity of financial statements depends on the auditor being free of any impediments that could","page_number":237,"box":{"x":116,"y":518,"width":754,"height":12}},{"id":"7713f6ff-7afb-4bc0-818e-f01e76fb5b83","block_type":"box","text":"compromise its ability to serve as an effective check on management. To that end, it is important that","page_number":237,"box":{"x":116,"y":533,"width":755,"height":12}},{"id":"751bf220-d58b-4fb8-ae28-04c9559d9eda","block_type":"box","text":"auditors are, and are seen to be, independent. Where an audit firm provides services to the company","page_number":237,"box":{"x":116,"y":549,"width":756,"height":12}},{"id":"8e032a2c-6f44-4896-9378-b67ad77b99cd","block_type":"box","text":"in addition to the audit, we look for the fees","page_number":237,"box":{"x":117,"y":564,"width":323,"height":12}},{"id":"be85623f-4da9-4238-b455-2440fb4c626f","block_type":"box","text":"earned to be disclosed and explained. We look for audit","page_number":237,"box":{"x":441,"y":564,"width":419,"height":12}},{"id":"6d6b21bb-9f6e-4161-8e3f-76a8a9698976","block_type":"box","text":"committees to have in place a procedure for assessing the independence of the auditor and the quality","page_number":237,"box":{"x":116,"y":580,"width":767,"height":12}},{"id":"3ec80ee7-ad1d-4a75-b284-c59f997182fb","block_type":"box","text":"of the external audit process on an annual basis.","page_number":237,"box":{"x":116,"y":595,"width":366,"height":12}},{"id":"03b1e4c7-0251-4c50-81cb-44df07c71117","block_type":"box","text":"Comprehensive disclosure provides investors with an understanding of the company’s long-term","page_number":237,"box":{"x":117,"y":626,"width":719,"height":12}},{"id":"f31d3d64-f6d1-447f-93ad-9af53fc9a323","block_type":"box","text":"operational risk management practices and, more broadly, the quality of the board’s oversight. We look","page_number":237,"box":{"x":116,"y":641,"width":770,"height":12}},{"id":"36bf5c50-5637-4c3d-900f-e7a7144e540e","block_type":"box","text":"to the audit or risk committee to periodically review the company’s risk assessment and risk","page_number":237,"box":{"x":116,"y":657,"width":684,"height":12}},{"id":"c05a7162-c105-4fe0-b0b7-f51a0c0c473c","block_type":"box","text":"management policies and the significant risks and exposures identified by management, the internal","page_number":237,"box":{"x":117,"y":672,"width":741,"height":12}},{"id":"41c43032-1fff-44ef-b6bc-e3c41d3c938d","block_type":"box","text":"auditors or the independent auditors, and management’s steps to address them. In the absence of","page_number":237,"box":{"x":116,"y":688,"width":731,"height":12}},{"id":"ee7a0b9f-d6ee-4df0-bac8-3c1a2519397e","block_type":"box","text":"detailed disclosures, we may conclude that companies are not adequately managing risk.","page_number":237,"box":{"x":116,"y":703,"width":662,"height":12}},{"id":"019f1ca1-3894-4177-91e4-f8866bdbe2c2","block_type":"box","text":"Capital structure, mergers, acquisitions, asset sales, and other special situations","page_number":237,"box":{"x":176,"y":741,"width":647,"height":12}},{"id":"23f45f9c-3246-4857-bc96-b7a9c2680be7","block_type":"box","text":"The capital structure of a company is critical to shareholders as it impacts the value of their investment","page_number":237,"box":{"x":116,"y":771,"width":761,"height":13}},{"id":"2bd01622-1f53-4aa3-b14c-76f577b5152a","block_type":"box","text":"and the priority of their interest in the company relative to that of other equity or debt investors.","page_number":237,"box":{"x":116,"y":787,"width":700,"height":12}},{"id":"0298c1b4-9fa9-4918-ac5c-883576101ed6","block_type":"box","text":"Pre-emptive rights are a key protection for shareholders against the dilution of their interests.","page_number":237,"box":{"x":117,"y":802,"width":687,"height":13}},{"id":"c5736790-72cf-4d48-b321-51a7dd830a8a","block_type":"box","text":"7","page_number":237,"box":{"x":143,"y":828,"width":4,"height":5}},{"id":"4d247fec-f005-4031-9477-fa93113ac127","block_type":"box","text":"Enterprise Risk Management is a process, effected by the entity’s board of directors, management, and other","page_number":237,"box":{"x":171,"y":828,"width":648,"height":9}},{"id":"530391f9-900d-49b4-9673-f3b2fdc6fb99","block_type":"box","text":"personnel, applied in strategy setting and across the enterprise, designed to identify potential events that may affect the","page_number":237,"box":{"x":170,"y":840,"width":709,"height":10}},{"id":"a7f81dff-5608-4b52-9d92-ccd32a6d1baf","block_type":"box","text":"entity, and manage risk to be within the risk appetite, to provide reasonable assurance regarding the achievement of","page_number":237,"box":{"x":170,"y":853,"width":690,"height":10}},{"id":"741a1b9a-1bb5-4ac9-9249-8d3e16060587","block_type":"box","text":"objectives. Please see: The Committee of Sponsoring Organizations of the Treadway Commission (COSO), “Enterprise","page_number":237,"box":{"x":170,"y":866,"width":710,"height":10}},{"id":"dff4c034-9fc7-43b0-a571-ed0312c950dd","block_type":"box","text":"Risk Management,” 2023, accessed in December 2025.","page_number":237,"box":{"x":171,"y":879,"width":329,"height":10}},{"id":"57c9f511-b5ea-48bd-bbcd-dbb5f78fce9c","block_type":"box","text":"BlackRock Investment Stewardship","page_number":237,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"2df90084-92cc-40ca-a5ad-ef6d0990535e","block_type":"box","text":"Global Principles |","page_number":237,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"25504d44-0969-4c96-aa70-fd52cfc4311e","block_type":"box","text":"8","page_number":237,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"cb29b6f5-5f6d-4af2-aa5f-3efd81bca951","block_type":"box","text":"NM1026U-6030748-237/260","page_number":237,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"a88c3e89-1a6c-40c0-81a3-18d723645908","block_type":"box","text":"In principle, we have concerns with the creation of a share class with equivalent economic exposure","page_number":238,"box":{"x":117,"y":87,"width":746,"height":12}},{"id":"48563465-78ab-4204-ad12-cea8a8e81094","block_type":"box","text":"and differentiated voting rights. As a result, BIS generally supports bylaw amendments that introduce","page_number":238,"box":{"x":116,"y":102,"width":754,"height":13}},{"id":"c81e56ed-be10-4ea5-9d4d-1436a8810a5d","block_type":"box","text":"the adoption of “one share, one vote” for registered shareholders.","page_number":238,"box":{"x":116,"y":118,"width":491,"height":12}},{"id":"150566a4-a0a8-4db1-b4b1-d79039fb10cd","block_type":"box","text":"However, we recognize that in certain markets, at least for a period of time, companies may have a","page_number":238,"box":{"x":117,"y":149,"width":740,"height":13}},{"id":"daaabc58-7d04-4681-a2e9-6814c124c6b2","block_type":"box","text":"valid reason for listing dual classes of shares with differentiated voting rights. In our view, such","page_number":238,"box":{"x":116,"y":165,"width":706,"height":12}},{"id":"29d357f7-fb62-442c-80e1-56923ebbd233","block_type":"box","text":"companies should review these share class structures on a regular basis or as company","page_number":238,"box":{"x":116,"y":181,"width":661,"height":12}},{"id":"b9b65990-de81-41fb-b782-3269f86fb48b","block_type":"box","text":"circumstances change. Additionally, they should seek shareholder approval of their capital structure on","page_number":238,"box":{"x":116,"y":196,"width":769,"height":12}},{"id":"a3f626da-52ab-4843-9e5d-01e295475a72","block_type":"box","text":"a periodic basis via a management proposal at the company’s shareholder meeting. The proposal","page_number":238,"box":{"x":116,"y":212,"width":731,"height":12}},{"id":"f99c6290-0214-4794-94f6-0ff832957a9c","block_type":"box","text":"should give unaffiliated shareholders the opportunity to affirm the current structure or establish","page_number":238,"box":{"x":116,"y":227,"width":705,"height":12}},{"id":"f11264a7-b105-41f4-8dd9-ac815e4d6386","block_type":"box","text":"mechanisms to end or phase out controlling structures at the appropriate time, while minimizing costs","page_number":238,"box":{"x":117,"y":243,"width":757,"height":12}},{"id":"92162532-ac45-48a1-9448-e0ff17aab5f0","block_type":"box","text":"to shareholders.","page_number":238,"box":{"x":116,"y":258,"width":125,"height":9}},{"id":"31bf2d9f-51bf-4922-9443-626c88c20ee7","block_type":"box","text":"In assessing mergers, asset sales, or other special situations, BIS’ primary consideration is the long","page_number":238,"box":{"x":117,"y":289,"width":745,"height":12}},{"id":"fc2d4676-b5e5-48a4-b56a-392d49f42450","block_type":"box","text":"term financial interests of our clients as shareholders, and so we will review any proposed transaction","page_number":238,"box":{"x":116,"y":305,"width":758,"height":12}},{"id":"b69f35f7-bf23-4c7e-a8e3-dd5dd44ef7ac","block_type":"box","text":"with that objective in mind. Typically, we review factors such as whether the proposed transaction has","page_number":238,"box":{"x":116,"y":320,"width":760,"height":12}},{"id":"9492d736-86b2-499b-9430-e0eed964cb80","block_type":"box","text":"the unanimous support of the board and has been negotiated at arm’s length, and whether the board","page_number":238,"box":{"x":116,"y":336,"width":753,"height":12}},{"id":"2cc2a8c4-fb96-4e89-a172-cac33f48e601","block_type":"box","text":"or management has clearly explained its economic and strategic rationale. We may also seek","page_number":238,"box":{"x":116,"y":351,"width":699,"height":12}},{"id":"a4efd165-4174-45a0-8f78-c15c93feaff1","block_type":"box","text":"reassurance from the board that the financial interests of executives and/or board members in a given","page_number":238,"box":{"x":117,"y":367,"width":761,"height":12}},{"id":"779b2d0a-0c28-4c6b-a822-f5d804d0d664","block_type":"box","text":"transaction have not adversely affected their ability to place shareholders’ interests before their own.","page_number":238,"box":{"x":116,"y":382,"width":750,"height":12}},{"id":"16a79414-cb66-4cb7-8521-6e5abc648984","block_type":"box","text":"Where the transaction involves related parties, the recommendation to support should come from the","page_number":238,"box":{"x":116,"y":398,"width":755,"height":12}},{"id":"e155034b-71b8-48a4-8468-d9ffe761fa79","block_type":"box","text":"independent directors, a best practice in most markets, and ideally, the terms should have been","page_number":238,"box":{"x":117,"y":414,"width":715,"height":11}},{"id":"bc83dd22-fb4d-46a1-8a26-e8042ac4a09b","block_type":"box","text":"assessed through an independent appraisal process. In addition, it is good practice that it be approved","page_number":238,"box":{"x":116,"y":429,"width":766,"height":12}},{"id":"24f71734-2920-4b1a-a514-df909fb93793","block_type":"box","text":"by a separate vote of the non-conflicted parties.","page_number":238,"box":{"x":117,"y":444,"width":358,"height":12}},{"id":"e0d06114-93c2-4e85-bc91-663851dbf89b","block_type":"box","text":"As a matter of sound governance practice, shareholders should have a right to dispose of company","page_number":238,"box":{"x":116,"y":476,"width":743,"height":12}},{"id":"65193a54-a76b-455f-923a-4d2bc58e07f1","block_type":"box","text":"shares in the open market without unnecessary restriction. In our view, corporate mechanisms","page_number":238,"box":{"x":116,"y":491,"width":705,"height":12}},{"id":"b5c5fd10-3dca-456f-919a-56d115de1018","block_type":"box","text":"designed to limit shareholders’ ability to sell their shares are contrary to basic property rights. Such","page_number":238,"box":{"x":116,"y":507,"width":738,"height":12}},{"id":"59b74be1-3340-4376-bdac-78b84fc3333d","block_type":"box","text":"mechanisms can serve to protect and entrench interests other than those of the shareholders. In our","page_number":238,"box":{"x":117,"y":522,"width":750,"height":12}},{"id":"7a8798ce-e6e8-47e9-a755-a5debf3d2e35","block_type":"box","text":"view, shareholders are broadly capable of making decisions in their own best interests. We encourage","page_number":238,"box":{"x":116,"y":538,"width":764,"height":12}},{"id":"f1ed1f92-7a97-4824-a531-b1a233261e0b","block_type":"box","text":"any shareholder rights plans proposed by a board to be subject to shareholder approval upon","page_number":238,"box":{"x":116,"y":553,"width":699,"height":12}},{"id":"d90f9a17-f965-4bed-90f1-795368a494a1","block_type":"box","text":"introduction and periodically thereafter.","page_number":238,"box":{"x":117,"y":569,"width":293,"height":12}},{"id":"08881235-7243-4841-91b7-9f3ea463eea7","block_type":"box","text":"Executive compensation and benefits","page_number":238,"box":{"x":350,"y":608,"width":305,"height":12}},{"id":"48c1943f-683e-4f5b-a23a-ef2964c8afae","block_type":"box","text":"Executive compensation is an important tool used by companies to support long-term financial value","page_number":238,"box":{"x":117,"y":640,"width":749,"height":12}},{"id":"63711da8-2849-48ae-98da-30de02757653","block_type":"box","text":"creation. A well-structured compensation policy rewards the successful delivery of strategic,","page_number":238,"box":{"x":116,"y":655,"width":686,"height":12}},{"id":"bf365459-0e0a-4c6c-87b0-f0d95b758917","block_type":"box","text":"operational, and/or financial goals; encourages an appropriate risk appetite; and aligns the interests of","page_number":238,"box":{"x":116,"y":671,"width":759,"height":12}},{"id":"066de696-ed33-48e1-92b1-146700f16d15","block_type":"box","text":"shareholders and executives through equity ownership.","page_number":238,"box":{"x":116,"y":686,"width":410,"height":12}},{"id":"dd24f567-2c14-4621-b47f-fcb9759234a4","block_type":"box","text":"8","page_number":238,"box":{"x":528,"y":686,"width":5,"height":6}},{"id":"3d06edde-3673-4293-a022-d8dee4cdcc38","block_type":"box","text":"We look for a clear link between variable pay and operational and financial performance that support","page_number":238,"box":{"x":116,"y":717,"width":746,"height":13}},{"id":"0653809a-be8f-4f54-a447-74988c5ccea4","block_type":"box","text":"sustained financial value creation for our clients as shareholders. We appreciate when performance","page_number":238,"box":{"x":116,"y":733,"width":739,"height":12}},{"id":"6da54578-7358-49d2-bce2-72131ebc8093","block_type":"box","text":"targets incorporate ambitious objectives, and the corresponding metrics are aligned with the","page_number":238,"box":{"x":116,"y":749,"width":682,"height":12}},{"id":"49e271e2-12db-4e44-9d66-c1b56657b510","block_type":"box","text":"company’s strategy and business model. BIS does not have a position on whether companies choose","page_number":238,"box":{"x":116,"y":764,"width":755,"height":12}},{"id":"9881fd7a-52fc-469a-8da6-84f2b8c81d5f","block_type":"box","text":"to use sustainability-related criteria in compensation structures, but, where they are included, we look","page_number":238,"box":{"x":116,"y":780,"width":752,"height":12}},{"id":"d37e0144-c267-41f6-b82e-9957f5059e0f","block_type":"box","text":"to companies to be as rigorous as they would be in setting other financial or operational targets. We","page_number":238,"box":{"x":116,"y":795,"width":740,"height":12}},{"id":"23855cb1-fc85-44e6-a4aa-a1d55c03483d","block_type":"box","text":"appreciate when long-term incentive plans encompass timeframes that: 1) are distinct from annual","page_number":238,"box":{"x":116,"y":810,"width":730,"height":13}},{"id":"e201973b-80d7-4aa2-a4a8-56908cb7fef1","block_type":"box","text":"executive compensation structures and metrics, and 2) encourage the delivery of strong financial","page_number":238,"box":{"x":116,"y":826,"width":724,"height":12}},{"id":"0c66f0b1-91fa-4335-8b1d-7a4301cef9f9","block_type":"box","text":"results over a period of years.","page_number":238,"box":{"x":117,"y":841,"width":225,"height":13}},{"id":"e9ab260d-5dc7-4361-99f3-4f5dc388a6e5","block_type":"box","text":"8","page_number":238,"box":{"x":143,"y":867,"width":4,"height":5}},{"id":"3f187a29-4bf9-4118-a29c-1cabffaf66fa","block_type":"box","text":"The terms “compensation,” “remuneration,” and “pay” are used interchangeably to describe the same concept in","page_number":238,"box":{"x":170,"y":867,"width":664,"height":9}},{"id":"685e1039-8153-4a2d-8eec-b15b49535998","block_type":"box","text":"different markets.","page_number":238,"box":{"x":170,"y":880,"width":102,"height":7}},{"id":"60bc8b06-8c64-4f53-8b95-8881ceafe0e2","block_type":"box","text":"BlackRock Investment Stewardship","page_number":238,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"4192e3c4-1e4f-4972-8950-85ec7e7e4e0a","block_type":"box","text":"Global Principles |","page_number":238,"box":{"x":735,"y":909,"width":133,"height":12}},{"id":"bd22b096-27e8-4706-ae77-88a0db530605","block_type":"box","text":"9","page_number":238,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"6c9abcf0-1f66-4e76-a98a-35fb505a9a07","block_type":"box","text":"NM1026U-6030748-238/260","page_number":238,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f4c3d931-e5af-4ea4-84bc-2dacdf313bd8","block_type":"box","text":"We consider it best practice when board members responsible for designing and approving executive","page_number":239,"box":{"x":116,"y":87,"width":757,"height":12}},{"id":"a0b71cbf-9d22-42da-b50b-05dbda92b2ec","block_type":"box","text":"compensation carefully consider the company’s specific circumstances. Factors to consider may","page_number":239,"box":{"x":116,"y":102,"width":720,"height":13}},{"id":"539237b7-c29c-4c1d-b49e-74dcbfc7120a","block_type":"box","text":"include the company’s risk profile, the environment it operates in, and the individuals the board is trying","page_number":239,"box":{"x":117,"y":118,"width":770,"height":12}},{"id":"3c778b3c-caf3-4dd7-9f62-bba70f8de931","block_type":"box","text":"to attract and retain. We look to the compensation committees to guard against contractual","page_number":239,"box":{"x":116,"y":134,"width":679,"height":12}},{"id":"1af37370-f487-42c4-b0f3-3ed58b56324c","block_type":"box","text":"arrangements that would entitle executives to material compensation for early termination of their","page_number":239,"box":{"x":116,"y":149,"width":726,"height":12}},{"id":"907f50cc-cb98-499f-bd4a-2cebb3c23c18","block_type":"box","text":"employment. Finally, we look for pension contributions and other deferred compensation arrangements","page_number":239,"box":{"x":116,"y":165,"width":770,"height":12}},{"id":"8f8fcb25-9a9d-4930-93f2-47ee513c7e6f","block_type":"box","text":"to be reasonable in light of market practices or the company’s business and executive compensation","page_number":239,"box":{"x":116,"y":180,"width":752,"height":12}},{"id":"1ad73e7a-dfcd-42ea-9ade-edf1a53940a4","block_type":"box","text":"strategies.","page_number":239,"box":{"x":116,"y":196,"width":82,"height":12}},{"id":"39c64883-3932-4429-855a-ddaf72628460","block_type":"box","text":"We are not supportive of one-off or special bonuses unrelated to company or individual performance.","page_number":239,"box":{"x":116,"y":227,"width":755,"height":12}},{"id":"33c6f56c-f0fe-4fb8-87c7-0ccb197bd8fe","block_type":"box","text":"Where discretion has been used by the compensation committee, or its equivalent, we appreciate","page_number":239,"box":{"x":116,"y":242,"width":730,"height":12}},{"id":"ba9fe607-9a15-482e-9954-da0578ac9fdf","block_type":"box","text":"disclosure relating to how and why the discretion was used, and how the adjusted outcome is aligned","page_number":239,"box":{"x":116,"y":258,"width":757,"height":12}},{"id":"50e59fe4-c920-405a-8ace-d26c776de222","block_type":"box","text":"with the interests of shareholders. In addition, we acknowledge that the use of peer group evaluation","page_number":239,"box":{"x":116,"y":273,"width":751,"height":12}},{"id":"f4060153-8595-4774-adf5-63fd950fc1af","block_type":"box","text":"by compensation committees can help ensure competitive pay. However, we encourage companies to","page_number":239,"box":{"x":117,"y":289,"width":763,"height":12}},{"id":"17de60df-94c4-496e-b175-84eacc6818ae","block_type":"box","text":"clearly explain how compensation outcomes have rewarded performance rather than solely base","page_number":239,"box":{"x":116,"y":304,"width":724,"height":12}},{"id":"7f95596b-61b2-468e-a69e-b80b7af8943b","block_type":"box","text":"increases in total compensation on peer benchmarking.","page_number":239,"box":{"x":117,"y":320,"width":416,"height":12}},{"id":"4bb16d87-7976-43df-ad84-df30da57ed82","block_type":"box","text":"We consider the inclusion of building clawback provisions into incentive plans as good practice. Such","page_number":239,"box":{"x":116,"y":351,"width":755,"height":12}},{"id":"98039b02-4126-4f40-9808-254698ad0734","block_type":"box","text":"provisions could require executives to forgo awards when compensation was based on faulty financial","page_number":239,"box":{"x":117,"y":366,"width":760,"height":12}},{"id":"48a7aebd-576e-4dbb-817a-69148011f575","block_type":"box","text":"statements or deceptive business practices, or when their behavior caused material financial harm to","page_number":239,"box":{"x":116,"y":382,"width":754,"height":12}},{"id":"2f0af5ef-88cf-46b8-89db-25228cb786de","block_type":"box","text":"shareholders, material reputational risk to the company, or resulted in a criminal investigation.","page_number":239,"box":{"x":116,"y":397,"width":701,"height":12}},{"id":"ee2184b8-ed39-4747-90a6-9cf983128ab3","block_type":"box","text":"In our view, non-executive directors should be compensated in a manner that is commensurate with","page_number":239,"box":{"x":117,"y":428,"width":745,"height":12}},{"id":"dba90405-dbf1-43c7-86ce-7b142d21a109","block_type":"box","text":"the time and effort expended in fulfilling their professional responsibilities. Additionally, these","page_number":239,"box":{"x":116,"y":444,"width":691,"height":12}},{"id":"ce0e15e7-74fb-4267-a8a7-f882637ea1df","block_type":"box","text":"compensation arrangements should not risk compromising directors’ independence or aligning their","page_number":239,"box":{"x":116,"y":459,"width":743,"height":12}},{"id":"fb53b60d-1873-4dea-b653-953c9665a7d0","block_type":"box","text":"interests too closely with those of the management, whom they are charged with overseeing.","page_number":239,"box":{"x":117,"y":475,"width":693,"height":12}},{"id":"2ed801c6-0e10-4bf1-ab3f-42fdcb01b714","block_type":"box","text":"When assessing compensation proposals, BIS reviews companies’ disclosures to determine whether","page_number":239,"box":{"x":116,"y":506,"width":754,"height":12}},{"id":"8e0826f4-1a72-4cc3-8070-602e33eba8e6","block_type":"box","text":"the board’s approach to executive compensation is rigorous in light of the company’s stated long-term","page_number":239,"box":{"x":116,"y":521,"width":760,"height":12}},{"id":"2008fede-46c7-46b7-a26f-84409afea70a","block_type":"box","text":"corporate strategy and specific circumstances, as well as local market and policy developments.","page_number":239,"box":{"x":116,"y":537,"width":719,"height":12}},{"id":"fb5e0e01-649a-4224-a67f-5ca3759f63a4","block_type":"box","text":"When our analysis indicates that executive compensation is misaligned with company performance,","page_number":239,"box":{"x":116,"y":568,"width":745,"height":12}},{"id":"7fa4bf30-6475-4baa-949b-2f693c7d09d4","block_type":"box","text":"BIS may not support management’s proposals to approve compensation, where they are on the","page_number":239,"box":{"x":117,"y":583,"width":715,"height":12}},{"id":"364f436e-2c60-41bc-829c-32900cd00deb","block_type":"box","text":"agenda. We may also not support members of the compensation committee or equivalent board","page_number":239,"box":{"x":116,"y":599,"width":719,"height":12}},{"id":"ed05ff10-c73f-402a-8dbc-acdd21287a5a","block_type":"box","text":"members for poor compensation practices or structures.","page_number":239,"box":{"x":117,"y":614,"width":421,"height":12}},{"id":"587fad6b-26a7-4820-ba9f-c3f9a8ad7e77","block_type":"box","text":"Shareholder protections and other corporate governance matters","page_number":239,"box":{"x":239,"y":653,"width":527,"height":12}},{"id":"7d6525f0-fd96-4e39-a1af-8739b70ae05b","block_type":"box","text":"Corporate form","page_number":239,"box":{"x":117,"y":684,"width":121,"height":12}},{"id":"b4114cdf-7886-4d0c-b88a-cd8141f5f74d","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":239,"box":{"x":117,"y":715,"width":760,"height":12}},{"id":"8fdf3954-1625-4ac4-98be-a4db62d46db9","block_type":"box","text":"given the company’s purpose and business model.","page_number":239,"box":{"x":116,"y":731,"width":376,"height":12}},{"id":"f54c4b8a-3dd2-480c-a3e7-2c409009cbe2","block_type":"box","text":"9","page_number":239,"box":{"x":494,"y":731,"width":5,"height":6}},{"id":"b7131831-0539-4c91-87de-673c8d3d95d1","block_type":"box","text":"We look to companies proposing to change their","page_number":239,"box":{"x":504,"y":731,"width":361,"height":12}},{"id":"180b8dea-43a9-4d5d-a24d-fd284fdb3d59","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":239,"box":{"x":116,"y":746,"width":726,"height":12}},{"id":"f1155d43-1fb9-450a-abd5-86d0b1c30d7b","block_type":"box","text":"already required to do so under applicable law. We appreciate when supporting documentation from","page_number":239,"box":{"x":116,"y":761,"width":742,"height":13}},{"id":"425bd6eb-db0f-4d6d-811a-343c75311f09","block_type":"box","text":"companies or shareholders proposing to alter the corporate form clearly explains how the interests of","page_number":239,"box":{"x":116,"y":777,"width":751,"height":12}},{"id":"10dd5fbf-3427-4802-97bd-c79dc84709cc","block_type":"box","text":"shareholders and different stakeholders would be impacted as well as the accountability and voting","page_number":239,"box":{"x":116,"y":792,"width":735,"height":13}},{"id":"17bf3713-f97b-4b84-bf9d-0ab13181ccb9","block_type":"box","text":"mechanisms that would be available to shareholders. We generally support management proposals if","page_number":239,"box":{"x":117,"y":808,"width":752,"height":12}},{"id":"88853c8b-0a7d-4b4d-8dde-c80bf875048f","block_type":"box","text":"our analysis indicates that shareholders’ financial interests are adequately protected. Corporate form","page_number":239,"box":{"x":116,"y":823,"width":746,"height":13}},{"id":"faf9520c-b4cc-479c-8c78-5d8ae2ee0197","block_type":"box","text":"shareholder proposals are evaluated on a case-by-case basis.","page_number":239,"box":{"x":116,"y":839,"width":468,"height":12}},{"id":"e5ed7530-9adc-4841-9b26-8461b4549741","block_type":"box","text":"9","page_number":239,"box":{"x":143,"y":880,"width":4,"height":5}},{"id":"4e5a7c45-281e-46ce-ac15-6b600383c1dd","block_type":"box","text":"Corporate form refers to the legal structure by which a business is organized.","page_number":239,"box":{"x":170,"y":880,"width":457,"height":9}},{"id":"7eef472e-6fe7-46f9-8df3-0d148871ad1f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":239,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"19cfbf4f-a3e9-4254-b4c0-eab6aa2b9ed2","block_type":"box","text":"Global Principles |","page_number":239,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"84a5d2fc-966f-4b0a-a5b4-9bdb14df560a","block_type":"box","text":"10","page_number":239,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"792d171c-17a3-4ddb-85ed-d38be8460288","block_type":"box","text":"NM1026U-6030748-239/260","page_number":239,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"c72dcb23-373e-4f72-b71b-e6022a5bb4d2","block_type":"box","text":"Shareholder proposals","page_number":240,"box":{"x":409,"y":87,"width":187,"height":12}},{"id":"a028bc69-3812-48d3-9d7a-4d14634bcca9","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":240,"box":{"x":117,"y":120,"width":717,"height":11}},{"id":"3c4a21c0-94ed-4c68-80eb-5ea05e042730","block_type":"box","text":"meeting, as long as certain requirements are met. Shareholder proposals span a wide range of topics,","page_number":240,"box":{"x":117,"y":135,"width":762,"height":12}},{"id":"1a4099ce-c5d4-46aa-a59a-3c24a54e776f","block_type":"box","text":"including governance reforms, capital management, and changes in the management or disclosure of","page_number":240,"box":{"x":117,"y":150,"width":758,"height":12}},{"id":"fc8737b8-d4ba-4aea-96ef-1129b55121f9","block_type":"box","text":"sustainability-related risks. These proposals have a varying degree of relevance for companies across","page_number":240,"box":{"x":116,"y":166,"width":763,"height":12}},{"id":"60cbc4af-b3d2-4698-b804-ff416f3e53ea","block_type":"box","text":"sectors, locations, and business models.","page_number":240,"box":{"x":116,"y":182,"width":307,"height":11}},{"id":"33c3c26c-c0bf-4bb1-a449-3f37508978e1","block_type":"box","text":"BIS takes a case-by-case approach to voting on shareholder proposals and maintains a singular focus","page_number":240,"box":{"x":117,"y":214,"width":764,"height":12}},{"id":"70b02ec8-375b-426f-bfcc-4df5fb18776b","block_type":"box","text":"on the proposal’s implications for long-term financial value creation for shareholders. Our analysis","page_number":240,"box":{"x":116,"y":229,"width":730,"height":12}},{"id":"223bfea3-edb7-486c-b655-20829867be60","block_type":"box","text":"considers whether a shareholder proposal addresses a material risk that may impact a company’s","page_number":240,"box":{"x":116,"y":245,"width":732,"height":12}},{"id":"1e3625c3-ff8a-4a1e-a799-3df30360c076","block_type":"box","text":"long-term financial performance. BIS may support shareholder proposals that request disclosures that","page_number":240,"box":{"x":117,"y":260,"width":760,"height":12}},{"id":"80bec6cd-99f3-4408-9605-816b034e4c7a","block_type":"box","text":"help us, as long-term investors on behalf of our clients, better understand the material risks and","page_number":240,"box":{"x":117,"y":276,"width":713,"height":12}},{"id":"1dc9115c-7dd1-4a33-849b-ba7827b9e555","block_type":"box","text":"opportunities companies face and how they are managing them, especially where this information is","page_number":240,"box":{"x":116,"y":291,"width":747,"height":12}},{"id":"7a5033c2-58ef-4fad-a811-2e7ee5fc1e41","block_type":"box","text":"additive given the company’s existing disclosures. We look for consistency between the specific","page_number":240,"box":{"x":116,"y":307,"width":715,"height":12}},{"id":"cff5b3e4-a732-4f60-8275-69b2004ddce5","block_type":"box","text":"request formally made in the proposal, the supporting documentation, and the proponents’ other","page_number":240,"box":{"x":117,"y":322,"width":717,"height":12}},{"id":"8b7d7b09-b83c-495d-aca6-d2f963a9ae6b","block_type":"box","text":"communications on the issues. We also assess the company’s practices and disclosures and the costs","page_number":240,"box":{"x":116,"y":338,"width":769,"height":12}},{"id":"88bd2523-f754-4e21-965a-032369c16704","block_type":"box","text":"and benefits to the company of meeting the request made in the proposal. We take into consideration a","page_number":240,"box":{"x":116,"y":353,"width":772,"height":12}},{"id":"2ba212ae-18d8-4b9b-8c88-fb54cd30c3c6","block_type":"box","text":"company’s governance practices and disclosures against those of their peers.","page_number":240,"box":{"x":116,"y":369,"width":583,"height":12}},{"id":"ce5abd65-1988-44f0-bf7c-4328ab97e91a","block_type":"box","text":"BIS does not support shareholder proposals that we view as inconsistent with long-term financial value","page_number":240,"box":{"x":117,"y":401,"width":767,"height":12}},{"id":"f50051d4-e8d1-49f9-a4b0-01b98133b694","block_type":"box","text":"or that seek to micromanage companies. We take into consideration the legal effect of the proposal, as","page_number":240,"box":{"x":116,"y":417,"width":769,"height":12}},{"id":"066f3991-9c2b-498b-a2a6-828f7572bc8c","block_type":"box","text":"shareholder proposals may be advisory or legally binding depending on the jurisdiction, while others","page_number":240,"box":{"x":116,"y":432,"width":747,"height":12}},{"id":"65f27095-3fcc-4870-b06a-6d497d5182e1","block_type":"box","text":"may make requests that would be deemed illegal in a given jurisdiction.","page_number":240,"box":{"x":117,"y":448,"width":534,"height":12}},{"id":"bdc71840-0fa5-4db7-9146-9f38522031b6","block_type":"box","text":"In our experience, it is helpful when companies disclose the names of the proponent or organization","page_number":240,"box":{"x":117,"y":480,"width":745,"height":12}},{"id":"d134f222-ffb8-4a5d-a0c3-1f9fa39a1c77","block_type":"box","text":"that has submitted or advised on the proposal. We recognize that some shareholder proposals bundle","page_number":240,"box":{"x":116,"y":496,"width":762,"height":12}},{"id":"4ff99166-992b-4879-bdd6-72a81c90cd2d","block_type":"box","text":"topics and/or specific requests. Further, the proponent’s supporting statement may refer to topics that","page_number":240,"box":{"x":116,"y":511,"width":758,"height":12}},{"id":"26cc5492-1651-4040-bbf8-f633dc941f6b","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":240,"box":{"x":116,"y":527,"width":767,"height":12}},{"id":"2de739e4-3121-4e12-aa4b-7937cf409ff9","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":240,"box":{"x":116,"y":542,"width":720,"height":12}},{"id":"3085809d-3597-4894-8aa0-e44c9ea60e53","block_type":"box","text":"proposal, we are not necessarily endorsing every element of the proposal or the reasoning, objectives,","page_number":240,"box":{"x":117,"y":558,"width":765,"height":12}},{"id":"5791c81c-36c9-439c-b730-ee6309265153","block_type":"box","text":"or supporting statement of the proponent. We may support a proposal for different reasons than those","page_number":240,"box":{"x":116,"y":573,"width":762,"height":12}},{"id":"1f3c0025-ffd6-4d31-a6b1-02a770ac5d3e","block_type":"box","text":"put forth by the proponent, when we believe that overall it may advance our clients’ long-term financial","page_number":240,"box":{"x":117,"y":589,"width":762,"height":12}},{"id":"7eac64e0-302d-4478-90c5-88e6c8cea1f6","block_type":"box","text":"interests.","page_number":240,"box":{"x":117,"y":604,"width":72,"height":10}},{"id":"3008f213-f9de-47d6-b406-ccdae2685399","block_type":"box","text":"BlackRock is subject to certain rules, regulations, agency guidance, and contractual agreements that","page_number":240,"box":{"x":117,"y":637,"width":752,"height":12}},{"id":"c9f2d581-0f18-481d-9aa1-9c6e904cf795","block_type":"box","text":"place restrictions and limitations on how BlackRock can interact with the companies in which we invest","page_number":240,"box":{"x":117,"y":652,"width":766,"height":12}},{"id":"e82278a6-8a11-44c8-ad33-a41cfe537ec0","block_type":"box","text":"on behalf of our clients. BlackRock does not nominate directors for board elections or submit","page_number":240,"box":{"x":116,"y":667,"width":687,"height":10}},{"id":"5128c8ac-03d8-4be2-a3f7-b32e6e90170b","block_type":"box","text":"shareholder proposals to companies. Non-compliance with these requirements could adversely affect","page_number":240,"box":{"x":116,"y":683,"width":752,"height":12}},{"id":"4ec1de96-6637-44cd-b461-f760ee9b1306","block_type":"box","text":"BlackRock’s ability to serve its clients’ interests.","page_number":240,"box":{"x":117,"y":699,"width":352,"height":12}},{"id":"5202be14-b9d2-4461-8469-dcdd8ebafec2","block_type":"box","text":"Material sustainability-related risks and opportunities","page_number":240,"box":{"x":287,"y":739,"width":426,"height":12}},{"id":"d3cf0e82-a24a-490a-b33b-95543627af06","block_type":"box","text":"Appropriate oversight of material risks and opportunities, including material sustainability-related risks","page_number":240,"box":{"x":116,"y":772,"width":753,"height":12}},{"id":"7c1de593-a7c1-492c-8703-79d60dd8fff9","block_type":"box","text":"and opportunities, is an important component of having an effective governance framework that","page_number":240,"box":{"x":116,"y":787,"width":709,"height":12}},{"id":"dc89f83d-c290-44a7-ba4e-1ee76c228602","block_type":"box","text":"supports durable, long-term financial value creation.","page_number":240,"box":{"x":116,"y":803,"width":385,"height":12}},{"id":"e41d9177-f1a6-43ba-8c9c-7572c61542c5","block_type":"box","text":"10","page_number":240,"box":{"x":503,"y":803,"width":11,"height":6}},{"id":"65a2e1ac-f2c8-484f-9bc2-cd024f9bbeaa","block_type":"box","text":"10","page_number":240,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"7f876676-c484-4821-9619-5d8aa1ba8b05","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":240,"box":{"x":171,"y":828,"width":691,"height":9}},{"id":"14c20e53-159a-4471-9664-0017a2715ec1","block_type":"box","text":"company’s business model that have an environmental or social dependency or impact. Examples of environmental","page_number":240,"box":{"x":170,"y":841,"width":686,"height":9}},{"id":"ecb2a401-e6dd-4bde-95ab-574936bbfa67","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":240,"box":{"x":170,"y":854,"width":682,"height":9}},{"id":"cf64a135-d28c-4304-8b42-c5c5656568a3","block_type":"box","text":"issues include, but are not limited to, human capital management, impacts on the communities in which a company","page_number":240,"box":{"x":170,"y":867,"width":683,"height":9}},{"id":"f0e2570c-9696-4ead-aae3-7389431ab916","block_type":"box","text":"operates, customer loyalty, and relationships with regulators.","page_number":240,"box":{"x":170,"y":880,"width":360,"height":9}},{"id":"846f26d6-412d-4655-8dba-bb606399a439","block_type":"box","text":"BlackRock Investment Stewardship","page_number":240,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"87b782a6-a32a-4e70-9d18-b270ca1a3346","block_type":"box","text":"Global Principles |","page_number":240,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"4f199303-af4e-4767-aa21-fac0cb208793","block_type":"box","text":"11","page_number":240,"box":{"x":866,"y":909,"width":15,"height":9}},{"id":"8b72cf8e-aa9d-437e-8986-46d0966d90f7","block_type":"box","text":"NM1026U-6030748-240/260","page_number":240,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2d688f84-2a82-4d89-9a9c-d93cc3984b98","block_type":"box","text":"We look to companies to provide robust disclosure that allows investors to effectively evaluate","page_number":241,"box":{"x":116,"y":87,"width":703,"height":12}},{"id":"59fa8f8d-afc1-4a27-8081-525d33e3e67c","block_type":"box","text":"companies’ strategy and business practices related to material sustainability-related risks and","page_number":241,"box":{"x":116,"y":103,"width":699,"height":12}},{"id":"896a7a6c-0e66-4d75-8bd2-77c3d28265b4","block_type":"box","text":"opportunities. We find it helpful when companies’ disclosures demonstrate that they have a resilient","page_number":241,"box":{"x":116,"y":118,"width":743,"height":12}},{"id":"63814900-ee1e-4535-8a82-c69c1c74dbc9","block_type":"box","text":"business model that integrates material sustainability-related risks and opportunities into their strategy,","page_number":241,"box":{"x":117,"y":134,"width":766,"height":12}},{"id":"93adf0df-1461-4497-8ace-6ad9f700bac8","block_type":"box","text":"risk management, and metrics and targets, including industry-specific metrics.","page_number":241,"box":{"x":117,"y":149,"width":583,"height":12}},{"id":"936a44e1-c4f0-4672-9557-53cffd6f93f3","block_type":"box","text":"Standardized disclosure of sustainability-related data supports investors in making informed decisions.","page_number":241,"box":{"x":116,"y":177,"width":766,"height":12}},{"id":"ff5cdf1b-6344-420c-bc66-6049e8da4cc9","block_type":"box","text":"The International Sustainability Standards Board (ISSB) standards, IFRS S1 and S2, represent one","page_number":241,"box":{"x":116,"y":193,"width":743,"height":12}},{"id":"85bb6def-7495-45fe-b17c-b42b70ca6443","block_type":"box","text":"such approach to standardization that we find useful in our analysis.","page_number":241,"box":{"x":116,"y":208,"width":503,"height":12}},{"id":"4c4a5db5-44f9-4aca-b4e8-9dad4a87a947","block_type":"box","text":"11","page_number":241,"box":{"x":622,"y":209,"width":9,"height":6}},{"id":"22aa8603-ad3a-45b6-a9d0-147bb90b58ff","block_type":"box","text":"However, we do not mandate","page_number":241,"box":{"x":633,"y":209,"width":228,"height":11}},{"id":"54ff1513-97ef-4d5a-9772-496be2122641","block_type":"box","text":"any specific disclosure framework companies should use, and recognize that companies may report","page_number":241,"box":{"x":116,"y":224,"width":747,"height":12}},{"id":"9d6f4576-ff56-4880-90e5-d7910fde484f","block_type":"box","text":"using different standards, some of which may be required by regulation. In such cases, we ask that","page_number":241,"box":{"x":117,"y":239,"width":739,"height":12}},{"id":"c834b036-e0ff-40ff-bcfb-d92ddf355f8e","block_type":"box","text":"companies highlight the metrics that are industry- or company-specific.","page_number":241,"box":{"x":116,"y":255,"width":530,"height":12}},{"id":"0642dd22-4944-4001-a7d5-24b7bcca1f01","block_type":"box","text":"We also recognize that companies may be phasing in reporting over several years. We do not","page_number":241,"box":{"x":116,"y":283,"width":702,"height":12}},{"id":"9d7d67d4-66c6-4509-9bb9-3e8cc9096e1e","block_type":"box","text":"prescribe timelines regarding when companies should make sustainability-related disclosures but","page_number":241,"box":{"x":117,"y":299,"width":725,"height":12}},{"id":"cbdb3448-9b59-44c9-9afe-8b8436c6fac3","block_type":"box","text":"appreciate it when companies produce them sufficiently in advance of their shareholder meeting, to the","page_number":241,"box":{"x":116,"y":314,"width":770,"height":12}},{"id":"7dcb272b-92c3-4d10-afd1-6c2292199f54","block_type":"box","text":"best of their abilities, to provide investors with time to assess the data and make informed voting","page_number":241,"box":{"x":117,"y":330,"width":718,"height":12}},{"id":"f0f6447d-b4fc-446a-8e79-ba5a9eea1e36","block_type":"box","text":"decisions.","page_number":241,"box":{"x":116,"y":345,"width":79,"height":10}},{"id":"2201152e-7202-40e3-911f-0f53cefd3f10","block_type":"box","text":"Industry initiatives on managing specific operational risks may also provide useful guidance to","page_number":241,"box":{"x":117,"y":374,"width":700,"height":12}},{"id":"d12af498-a91d-49d4-8f1b-30a2cb6cdf4f","block_type":"box","text":"companies on best practices and disclosures. While not a voting item, we find it helpful to our","page_number":241,"box":{"x":116,"y":389,"width":697,"height":12}},{"id":"2a5a349e-9199-4c23-8a59-ebbda1d819e8","block_type":"box","text":"understanding of investment risk when companies disclose any relevant global sustainability-related","page_number":241,"box":{"x":117,"y":405,"width":746,"height":12}},{"id":"2bd77655-efa0-4cbc-9056-d6cf6f71277a","block_type":"box","text":"standards adopted, the industry initiatives in which they participate, any peer group benchmarking","page_number":241,"box":{"x":116,"y":420,"width":731,"height":12}},{"id":"3d6b7482-a797-43c1-96f3-44141dc48752","block_type":"box","text":"undertaken, and any assurance processes to help investors understand their approach to sustainable","page_number":241,"box":{"x":117,"y":436,"width":758,"height":12}},{"id":"335ee40c-c268-4cbc-895e-7e8bbc23b044","block_type":"box","text":"and responsible business practices.","page_number":241,"box":{"x":116,"y":451,"width":271,"height":12}},{"id":"9507f2a9-9ba1-491c-b64e-5b2cffa756cd","block_type":"box","text":"Climate and nature-related risk","page_number":241,"box":{"x":117,"y":480,"width":250,"height":9}},{"id":"2defe997-c5f0-4b5d-a05d-47091372a681","block_type":"box","text":"Many companies are assessing how to navigate the low-carbon transition while delivering long-term","page_number":241,"box":{"x":117,"y":508,"width":745,"height":12}},{"id":"3dca56da-84ab-4641-be50-9846368bf8a5","block_type":"box","text":"financial value to investors. For companies facing material climate-related risks, we find it helpful when","page_number":241,"box":{"x":116,"y":523,"width":766,"height":12}},{"id":"2e87505e-f890-493b-9fcd-4c0eeacc2c1a","block_type":"box","text":"they publicly disclose, consistent with their business model and sector, how they intend to deliver long","page_number":241,"box":{"x":116,"y":539,"width":762,"height":12}},{"id":"0f766d20-8f72-40a2-88d6-1c14fbf69586","block_type":"box","text":"term financial performance through the low-carbon transition, including where available, their transition","page_number":241,"box":{"x":116,"y":554,"width":766,"height":12}},{"id":"c9502f00-13b6-4d47-a702-8072ccd84a2f","block_type":"box","text":"plan.","page_number":241,"box":{"x":117,"y":570,"width":34,"height":12}},{"id":"2b8fd401-03c6-4e93-991d-dc5a6f4762cc","block_type":"box","text":"12, 13","page_number":241,"box":{"x":153,"y":570,"width":29,"height":7}},{"id":"7ae43f61-7fc5-48f7-b577-b60cc7e76f0a","block_type":"box","text":"From company disclosures and engagement, we seek to understand the strategies","page_number":241,"box":{"x":182,"y":570,"width":626,"height":12}},{"id":"88adb347-b716-4471-ab09-f1a275c56020","block_type":"box","text":"companies have in place to manage material risks to, and opportunities for, their long-term business","page_number":241,"box":{"x":116,"y":585,"width":748,"height":12}},{"id":"196159ad-d173-463d-8717-124519da8f32","block_type":"box","text":"model associated with a range of climate-related scenarios.","page_number":241,"box":{"x":117,"y":601,"width":446,"height":12}},{"id":"12cba341-60aa-48d5-9e41-41db9d621b63","block_type":"box","text":"Recognizing the value of these disclosures, certain markets such as the European Union mandate","page_number":241,"box":{"x":117,"y":629,"width":734,"height":12}},{"id":"ba6a9fb5-e610-4fdd-925b-2758a628e9ff","block_type":"box","text":"large companies to disclose such climate-related financial information, while in other jurisdictions these","page_number":241,"box":{"x":117,"y":645,"width":767,"height":12}},{"id":"4d5f8f09-5dcc-4076-b9cd-ca5b03e213e3","block_type":"box","text":"disclosures are viewed as best practice in the market.","page_number":241,"box":{"x":116,"y":660,"width":398,"height":12}},{"id":"572bb57d-6270-44c9-9ace-f50030286054","block_type":"box","text":"11","page_number":241,"box":{"x":144,"y":685,"width":7,"height":5}},{"id":"b708d828-2880-4666-b8ca-97580093d1e1","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":241,"box":{"x":170,"y":685,"width":666,"height":10}},{"id":"31b68f96-b725-4d0f-a3d7-9fc603d43f67","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":241,"box":{"x":171,"y":698,"width":712,"height":10}},{"id":"278f8c8e-6773-470b-8e37-433a2e33ee4b","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":241,"box":{"x":170,"y":711,"width":649,"height":10}},{"id":"1ea714c2-c2a3-4538-948f-e3cbd59549f3","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":241,"box":{"x":170,"y":724,"width":674,"height":10}},{"id":"64d93ddb-6225-4cce-af33-3187b2dfac3a","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":241,"box":{"x":170,"y":737,"width":647,"height":10}},{"id":"68d26a90-1932-4a7e-87c4-bf76d179055f","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":241,"box":{"x":171,"y":750,"width":312,"height":8}},{"id":"bf0f6558-7d62-4679-b276-c9a88927aaa5","block_type":"box","text":"12","page_number":241,"box":{"x":144,"y":763,"width":8,"height":5}},{"id":"15e89582-461a-4362-86d5-319befe36518","block_type":"box","text":"We have observed that more companies are developing such plans, and public policymakers in certain markets are","page_number":241,"box":{"x":170,"y":763,"width":685,"height":10}},{"id":"69db4147-60a6-4fe8-96ec-ac43f2c52717","block_type":"box","text":"signaling their intentions to require them or already have requirements in place, such as Australia, Brazil, and the","page_number":241,"box":{"x":170,"y":776,"width":670,"height":10}},{"id":"9d30d839-ccb2-49f5-a25a-d308ff441342","block_type":"box","text":"European Union (please see the International Transition Plan Network for information). We view transition plans as a","page_number":241,"box":{"x":171,"y":789,"width":691,"height":9}},{"id":"e35bbdf6-2d99-49a6-835b-0c2f59afb22d","block_type":"box","text":"method for a company to both internally assess and externally communicate its long-term strategy, ambition, objectives,","page_number":241,"box":{"x":170,"y":802,"width":710,"height":9}},{"id":"3f96d243-1881-4d61-97ee-52543dff05a8","block_type":"box","text":"and actions to create financial value through the global transition towards a low-carbon economy. Across the landscape","page_number":241,"box":{"x":170,"y":815,"width":709,"height":9}},{"id":"af049998-cb60-4682-a21d-f7692ebbb5f1","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":241,"box":{"x":170,"y":828,"width":710,"height":9}},{"id":"d8396517-9d7e-4643-a712-d4d2807eaf8a","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":241,"box":{"x":170,"y":840,"width":684,"height":10}},{"id":"34960018-810e-471b-a0e8-6848fcbb595f","block_type":"box","text":"engage companies that have chosen to publish a transition plan to understand their planned actions and resource","page_number":241,"box":{"x":170,"y":853,"width":675,"height":10}},{"id":"d17e121d-a587-4921-a3a4-86ad7d89d128","block_type":"box","text":"implications. Website accessed in December 2025.","page_number":241,"box":{"x":170,"y":866,"width":303,"height":10}},{"id":"20c9823c-835e-4354-91d9-19cc5d421bc0","block_type":"box","text":"13","page_number":241,"box":{"x":144,"y":879,"width":8,"height":5}},{"id":"1cc3dd84-1476-42ad-9f64-8bf2d2f86cdf","block_type":"box","text":"For more information, please see our commentary “Climate-related risks and a low-carbon transition,” December 2025.","page_number":241,"box":{"x":171,"y":879,"width":703,"height":10}},{"id":"cf979c0c-dde0-448d-b747-126c310e863e","block_type":"box","text":"BlackRock Investment Stewardship","page_number":241,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"6711d140-a4a6-4b72-99c2-e60a502952ec","block_type":"box","text":"Global Principles |","page_number":241,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"7e74e4bb-1946-4ec2-9aea-d05e3d006755","block_type":"box","text":"12","page_number":241,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"49993279-99e5-44fe-881b-fca46bd810a5","block_type":"box","text":"NM1026U-6030748-241/260","page_number":241,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"1e256c8a-ec1d-4326-a2a5-dfc0ab7be16f","block_type":"box","text":"The ISSB standards provide one such framework that can assist investors in assessing company","page_number":242,"box":{"x":116,"y":87,"width":726,"height":12}},{"id":"ed761248-f494-463c-a8e2-e2cc37899e85","block_type":"box","text":"specific climate-related risks and opportunities, and informing investment decisions. Such disclosures","page_number":242,"box":{"x":116,"y":102,"width":757,"height":13}},{"id":"71bcd0b1-09d3-4bed-bfc0-d19886bee034","block_type":"box","text":"also provide investors with insights into how companies are managing the risks associated with a","page_number":242,"box":{"x":116,"y":118,"width":726,"height":12}},{"id":"9b9df00d-f165-4cc7-9e78-81a2fd048e90","block_type":"box","text":"transition to a low-carbon economy by managing their own carbon emissions or emissions intensities","page_number":242,"box":{"x":116,"y":134,"width":754,"height":12}},{"id":"13cd5f65-680c-4371-a50d-b750d5b2c271","block_type":"box","text":"to the extent financially practicable.","page_number":242,"box":{"x":116,"y":149,"width":266,"height":12}},{"id":"ada44614-f505-41b8-b182-8aed759b9ab8","block_type":"box","text":"The ISSB standards, for example, contemplate disclosures on how companies are setting short-,","page_number":242,"box":{"x":116,"y":177,"width":723,"height":12}},{"id":"2cebef13-5479-44a6-94a9-6ffae8d9bcce","block_type":"box","text":"medium- and long-term targets, ideally science-based where these are available for their sector, for","page_number":242,"box":{"x":117,"y":193,"width":742,"height":12}},{"id":"e1165ae5-1d64-4d4b-86e9-7828dc3944b9","block_type":"box","text":"scope 1 and 2 greenhouse gas emissions (GHG) reductions and to demonstrate how their targets are","page_number":242,"box":{"x":116,"y":208,"width":760,"height":12}},{"id":"013fc203-ece4-4cdb-8084-b5c92c5aa14f","block_type":"box","text":"consistent with the long-term financial interests of their investors.","page_number":242,"box":{"x":116,"y":224,"width":486,"height":12}},{"id":"22a431a5-adf0-401e-96bc-67916a6f7e32","block_type":"box","text":"While we recognize that regulators in some markets are moving to mandate certain disclosures, at this","page_number":242,"box":{"x":116,"y":252,"width":766,"height":12}},{"id":"633da7a5-4035-4021-8942-4530b8f12340","block_type":"box","text":"stage, we view scope 3 emissions differently from scopes 1 and 2, given methodological complexity,","page_number":242,"box":{"x":116,"y":268,"width":749,"height":12}},{"id":"3419822e-7344-472a-ad1f-a235c6d304d7","block_type":"box","text":"regulatory uncertainty, concerns about double-counting, and lack of direct control by companies. We","page_number":242,"box":{"x":117,"y":283,"width":749,"height":12}},{"id":"2c3f0606-e973-4ba4-9aaa-d8cf9cede6c4","block_type":"box","text":"welcome disclosures and commitments that companies choose to make regarding material scope 3","page_number":242,"box":{"x":116,"y":299,"width":744,"height":12}},{"id":"f1cc9888-4f67-43d1-9921-1d9f2bf192d6","block_type":"box","text":"emissions and recognize that these are provided on a good-faith basis as methodology develops.","page_number":242,"box":{"x":116,"y":314,"width":728,"height":12}},{"id":"75e15bb7-6bfd-4d01-97be-14f075e684ca","block_type":"box","text":"In addition to climate-related risks and opportunities, for companies whose strategies, operations or","page_number":242,"box":{"x":117,"y":343,"width":742,"height":12}},{"id":"e48dfb73-3da7-4ebd-9b80-962fbb68bdfc","block_type":"box","text":"supply chains are materially reliant on natural capital, nature-related risks and opportunities may affect","page_number":242,"box":{"x":116,"y":358,"width":765,"height":12}},{"id":"a1b2568f-2b03-4780-9274-840e6640cf11","block_type":"box","text":"their ability to generate long-term financial returns.","page_number":242,"box":{"x":116,"y":374,"width":372,"height":12}},{"id":"5107ca63-abf4-4ff2-83a4-b0636db8e9cb","block_type":"box","text":"14","page_number":242,"box":{"x":491,"y":374,"width":11,"height":6}},{"id":"4d94f40c-c2d6-4230-a4a5-4a5d5360e2aa","block_type":"box","text":"For these companies, we rely on disclosures to","page_number":242,"box":{"x":502,"y":374,"width":360,"height":12}},{"id":"c38e72b4-a56d-4548-9d37-22e8363217ed","block_type":"box","text":"understand how their strategies consider nature-related impacts and dependencies and to assess how","page_number":242,"box":{"x":117,"y":389,"width":765,"height":12}},{"id":"bd1ceecf-23f2-4b18-a214-654b8bf4b375","block_type":"box","text":"the board oversees these risks.","page_number":242,"box":{"x":116,"y":405,"width":232,"height":9}},{"id":"d6954f01-88b6-4d70-827a-c3293a9f5216","block_type":"box","text":"15","page_number":242,"box":{"x":351,"y":405,"width":10,"height":6}},{"id":"fbd5bebd-193a-4d14-a34a-c656125db09a","block_type":"box","text":"Companies’ impact on their workforce, supply chains, and communities","page_number":242,"box":{"x":117,"y":433,"width":579,"height":12}},{"id":"b653d24d-b11f-4bb4-a6ea-955df72b70b7","block_type":"box","text":"Companies determine their key stakeholders based on what is material to their business and long-term","page_number":242,"box":{"x":117,"y":461,"width":768,"height":12}},{"id":"e3e608c6-a7be-4dd2-9c65-9ea80d97d91c","block_type":"box","text":"financial performance. For many companies, key stakeholders include employees, business supply","page_number":242,"box":{"x":116,"y":477,"width":741,"height":12}},{"id":"c62bf190-4a79-4ec2-9fee-c34bf2b0b67a","block_type":"box","text":"chains, clients and consumers, regulators, and the communities in which they operate.","page_number":242,"box":{"x":116,"y":493,"width":647,"height":11}},{"id":"1dfc8576-e65d-40ff-b6b3-c81aeb04cd39","block_type":"box","text":"In our experience, companies that invest in the relationships that are critical to their strategic objectives","page_number":242,"box":{"x":117,"y":521,"width":769,"height":12}},{"id":"2cd32c06-6e14-44c6-89d3-37376cb21e94","block_type":"box","text":"are more likely to deliver durable, long-term financial performance. By contrast, we have found that","page_number":242,"box":{"x":116,"y":536,"width":739,"height":12}},{"id":"ed0ad3cb-64c0-48f1-acfa-ae4dc9405f01","block_type":"box","text":"poor relationships may create adverse impacts that could expose companies to legal, regulatory,","page_number":242,"box":{"x":117,"y":552,"width":722,"height":12}},{"id":"de47bfd9-f7d1-4fa7-b6d8-0d20d181782e","block_type":"box","text":"operational, and reputational risks. This is particularly relevant to a company’s workforce, which is","page_number":242,"box":{"x":116,"y":567,"width":730,"height":12}},{"id":"e9b189c7-9d56-4ec2-944e-6cb216663fc4","block_type":"box","text":"central to long-term financial value creation.","page_number":242,"box":{"x":116,"y":583,"width":324,"height":12}},{"id":"f91ebdc2-2c20-4bc1-bdc0-65800f5a31f1","block_type":"box","text":"16","page_number":242,"box":{"x":442,"y":583,"width":11,"height":6}},{"id":"f23f56fd-203d-4a3f-8f27-7eb3632fddd1","block_type":"box","text":"As a long-term shareholder on behalf of our clients, we find it helpful when companies disclose how","page_number":242,"box":{"x":116,"y":611,"width":743,"height":12}},{"id":"73f72c87-451e-4324-8676-97b70a2cfaac","block_type":"box","text":"they have identified their key stakeholders and considered their interests in business decision-making.","page_number":242,"box":{"x":116,"y":627,"width":763,"height":12}},{"id":"e44b0dac-1052-4e05-9b8b-41d47ce27452","block_type":"box","text":"In addition to understanding broader stakeholder relationships, BIS finds it helpful when companies","page_number":242,"box":{"x":117,"y":642,"width":740,"height":12}},{"id":"1aac3e31-be8e-4641-bbc1-5ddab56a181b","block_type":"box","text":"discuss how they consider the needs of their workforce today, and the skills required for their future","page_number":242,"box":{"x":116,"y":658,"width":742,"height":12}},{"id":"63223a00-e3f0-436e-a2ce-d8eb78b0b18d","block_type":"box","text":"business strategy. We are also interested in understanding how the board monitors and engages on","page_number":242,"box":{"x":117,"y":673,"width":741,"height":12}},{"id":"3e1137b7-4f36-49b2-8df0-52dccb05260c","block_type":"box","text":"these matters, given it is well positioned to ensure that the approach taken by management is informed","page_number":242,"box":{"x":116,"y":689,"width":764,"height":12}},{"id":"e7f8c159-a4bf-4362-ae17-dd33cda6518d","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":242,"box":{"x":117,"y":704,"width":765,"height":12}},{"id":"1c81ea39-b980-42e4-ac94-bf7451f18021","block_type":"box","text":"are the responsibility of management and the board.","page_number":242,"box":{"x":116,"y":720,"width":387,"height":12}},{"id":"2332f1d4-24be-4ee9-a590-03b4c03584a2","block_type":"box","text":"In addition, we find it helpful when companies disclose their approach to addressing material adverse","page_number":242,"box":{"x":117,"y":748,"width":749,"height":12}},{"id":"4ccc8025-5b88-4636-ae27-6830ca0ff7f8","block_type":"box","text":"impacts that could arise from their business practices and affect critical relationships with their","page_number":242,"box":{"x":117,"y":763,"width":697,"height":12}},{"id":"810144f2-317b-44bd-bb68-08f84d49bf3a","block_type":"box","text":"14","page_number":242,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"154765a0-7cae-48ff-b8ee-6040a7e38389","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on natural capital,” December 2025.","page_number":242,"box":{"x":171,"y":789,"width":697,"height":9}},{"id":"289316b6-c5e4-42b7-bce1-d5775c8d70e4","block_type":"box","text":"15","page_number":242,"box":{"x":144,"y":802,"width":8,"height":5}},{"id":"d82e7321-06ef-4eed-a565-4e1a7c813796","block_type":"box","text":"Given the growing awareness of the materiality of these issues for certain businesses, enhanced reporting on a","page_number":242,"box":{"x":170,"y":802,"width":660,"height":9}},{"id":"3a97c112-c2d2-4a5b-a714-1535b99d7513","block_type":"box","text":"company’s natural capital dependencies and impacts would aid investors’ understanding. The recommendations of the","page_number":242,"box":{"x":170,"y":814,"width":704,"height":10}},{"id":"a5b2be29-fc6b-4bda-94a5-54bea861cefc","block_type":"box","text":"Taskforce on Nature-related Financial Disclosures (TNFD) may prove useful to some companies. We recognize that","page_number":242,"box":{"x":170,"y":827,"width":689,"height":10}},{"id":"eb677a54-2ddf-4da0-9292-668ee406e999","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":242,"box":{"x":170,"y":840,"width":680,"height":10}},{"id":"f063f1f3-6ecc-4e81-9d3f-80a9222cbf19","block_type":"box","text":"other private sector standards. TNFD-aligned reporting is not a voting issue. Website accessed in December 2025.","page_number":242,"box":{"x":170,"y":853,"width":680,"height":10}},{"id":"29592802-4826-46b7-a6a1-ce4311f0c477","block_type":"box","text":"16","page_number":242,"box":{"x":144,"y":866,"width":8,"height":5}},{"id":"a793dbe2-dd95-4933-ac78-6b712eee6670","block_type":"box","text":"For more information, please see our commentary “Our approach to engagement on human capital management,”","page_number":242,"box":{"x":171,"y":866,"width":677,"height":10}},{"id":"bd7ec870-ad58-44e5-a87f-7134fd9f506c","block_type":"box","text":"December 2025.","page_number":242,"box":{"x":171,"y":879,"width":97,"height":8}},{"id":"e6cf3e63-0517-4176-9736-6088e4de9840","block_type":"box","text":"BlackRock Investment Stewardship","page_number":242,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"25c9e0f2-f18a-4b7b-ae34-7bc437e9260a","block_type":"box","text":"Global Principles |","page_number":242,"box":{"x":726,"y":909,"width":132,"height":12}},{"id":"247ebcbb-097b-48cc-a98d-e8639861bed4","block_type":"box","text":"13","page_number":242,"box":{"x":866,"y":909,"width":17,"height":9}},{"id":"72ce4bc8-6b52-4f12-9e3e-0c3bd269b4d6","block_type":"box","text":"NM1026U-6030748-242/260","page_number":242,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"f66e4b87-6739-4e6a-817f-1a80d9a87288","block_type":"box","text":"stakeholders. We encourage companies to implement, to the extent appropriate, monitoring processes","page_number":243,"box":{"x":116,"y":87,"width":767,"height":12}},{"id":"f6839270-942c-4b52-b29c-5bc80d50c5f4","block_type":"box","text":"(often referred to as due diligence) to identify and mitigate potential adverse impacts and grievance","page_number":243,"box":{"x":117,"y":102,"width":740,"height":13}},{"id":"a1cf0fcc-ffbf-4e0c-870a-3c340a33905a","block_type":"box","text":"mechanisms to remediate any actual adverse material impacts.","page_number":243,"box":{"x":117,"y":118,"width":474,"height":12}},{"id":"847415d5-c935-4b30-bc76-7111bed23345","block_type":"box","text":"We look to boards to oversee management’s approach to addressing material risks related to key","page_number":243,"box":{"x":116,"y":148,"width":729,"height":12}},{"id":"79e1be0a-b8b8-4986-92af-f8349462acf8","block_type":"box","text":"stakeholders and may convey concerns about board oversight in our voting on director elections or","page_number":243,"box":{"x":116,"y":164,"width":739,"height":12}},{"id":"5ef114d2-f1cd-4d3e-b6ec-fd30c5afd64e","block_type":"box","text":"supporting a business relevant shareholder proposal when, in our assessment, the board is not acting","page_number":243,"box":{"x":116,"y":179,"width":761,"height":12}},{"id":"887675be-8085-46df-ab4e-5c4831805208","block_type":"box","text":"in shareholders’ long-term financial interests.","page_number":243,"box":{"x":117,"y":195,"width":337,"height":12}},{"id":"d9c54c14-e6c2-48ee-9860-2d3272c95c14","block_type":"box","text":"BlackRock’s oversight of its investment stewardship activities","page_number":243,"box":{"x":251,"y":232,"width":503,"height":12}},{"id":"36683c4a-a6e6-4ded-87ce-26d66cdfebbd","block_type":"box","text":"BIS’ governance structure supports oversight and accountability of stewardship-related activities on","page_number":243,"box":{"x":117,"y":262,"width":742,"height":12}},{"id":"23ea36df-263c-445a-80b2-2c53c28de1ac","block_type":"box","text":"behalf of clients at the global and regional level.","page_number":243,"box":{"x":117,"y":278,"width":358,"height":12}},{"id":"3f3a3c11-c77d-4a0e-86bf-5db00f0dcba7","block_type":"box","text":"At the top of this governance structure, the risk-focused BIS Global Oversight Committee (the","page_number":243,"box":{"x":116,"y":308,"width":699,"height":12}},{"id":"1c51591d-b7dd-41c6-9d49-71c4deb95b3e","block_type":"box","text":"Committee) supports BIS’ regulatory responsibilities in relation to proxy voting, including adherence to","page_number":243,"box":{"x":117,"y":324,"width":760,"height":12}},{"id":"1ea9a33e-5218-4f60-b134-2943a886fe05","block_type":"box","text":"policies and procedures as well as market-level stewardship requirements. The Committee reviews","page_number":243,"box":{"x":117,"y":339,"width":740,"height":12}},{"id":"1234e5f6-2665-4948-8b79-05dd6dc228a4","block_type":"box","text":"and approves amendments to the Global Principles and regional voting guidelines. The Committee","page_number":243,"box":{"x":116,"y":355,"width":738,"height":12}},{"id":"f0a03749-72f9-4396-8144-b322c164f7d0","block_type":"box","text":"also reviews periodic reports regarding the votes cast by BIS on behalf of clients, as well as updates","page_number":243,"box":{"x":116,"y":370,"width":749,"height":12}},{"id":"8325aa33-1782-4db4-b564-4b0324e5cd60","block_type":"box","text":"on material process issues, procedural changes, and other risk oversight considerations. The","page_number":243,"box":{"x":116,"y":386,"width":697,"height":12}},{"id":"02a4f901-8642-4899-95c9-b689df2dae58","block_type":"box","text":"Committee is chaired by the Global Heads of the Investment Stewardship function and its members","page_number":243,"box":{"x":117,"y":401,"width":743,"height":12}},{"id":"f4d0dad7-19bb-41c4-8173-edab08b9b6e4","block_type":"box","text":"include senior BlackRock executives with legal, risk, and other experience relevant to team oversight","page_number":243,"box":{"x":117,"y":417,"width":752,"height":12}},{"id":"36bc5f1b-a82c-43b9-ab01-96922a98c2cd","block_type":"box","text":"who are independent from the investment stewardship function.","page_number":243,"box":{"x":116,"y":432,"width":477,"height":12}},{"id":"d87be289-0113-45c6-9ece-5a4da0a57c2b","block_type":"box","text":"The Global Heads have primary oversight of BIS’ activities globally, including voting in accordance with","page_number":243,"box":{"x":116,"y":462,"width":769,"height":12}},{"id":"563a80aa-3f81-4b25-a3e3-f4d6de6cc887","block_type":"box","text":"the Global Principles and regional voting guidelines. At the regional level, three regional Heads for the","page_number":243,"box":{"x":116,"y":478,"width":761,"height":12}},{"id":"fff58178-8606-423e-a6e7-663c3eda0c02","block_type":"box","text":"Americas, APAC, and EMEA oversee BIS’ activities for their specific markets.","page_number":243,"box":{"x":116,"y":493,"width":581,"height":12}},{"id":"f6b3d6a5-69fa-4563-b26e-81a46d0fc02c","block_type":"box","text":"Vote execution","page_number":243,"box":{"x":118,"y":524,"width":122,"height":9}},{"id":"6ba9ca6d-8620-4e7a-9801-57398f9da909","block_type":"box","text":"BIS votes proxies on behalf of index equity funds and accounts when authorized by our clients. We","page_number":243,"box":{"x":117,"y":554,"width":739,"height":12}},{"id":"6afb1925-859a-4b08-af3a-b63c23844ac7","block_type":"box","text":"have processes in place to consider all proxies for which we have voting authority, and submit voting","page_number":243,"box":{"x":117,"y":569,"width":751,"height":12}},{"id":"ada58e0a-756e-4015-af5b-ad7e08159af6","block_type":"box","text":"decisions, or refrain from voting when logistical issues arise (see below). The BIS Benchmark","page_number":243,"box":{"x":116,"y":585,"width":698,"height":12}},{"id":"edbb9f3a-1b99-4e22-a932-01e8dd8244bf","block_type":"box","text":"Policies – and the vote decisions made consistent with those policies – reflect our reasonable and","page_number":243,"box":{"x":117,"y":600,"width":730,"height":12}},{"id":"bc898efc-f0b1-4d3f-8ecd-996b1ab4982b","block_type":"box","text":"independent judgment and are made without regard to the relationship between the issuer of the proxy","page_number":243,"box":{"x":117,"y":616,"width":766,"height":12}},{"id":"c2d2085f-00d8-42e9-9226-01a56af6c2d1","block_type":"box","text":"(or any shareholder proponent or dissident shareholder) and the Fund, the Fund’s affiliates (if any),","page_number":243,"box":{"x":117,"y":631,"width":739,"height":12}},{"id":"9c61a6c6-b7f9-4e16-bbf7-b3e6260fd3f0","block_type":"box","text":"BlackRock or BlackRock’s affiliates, or BlackRock employees (see “Conflicts management policies and","page_number":243,"box":{"x":117,"y":647,"width":768,"height":12}},{"id":"23d5985c-954a-4932-92ed-894a40ba1e9c","block_type":"box","text":"procedures,” below).","page_number":243,"box":{"x":117,"y":662,"width":151,"height":12}},{"id":"9c8ad073-cf59-4548-8d48-955a23daccab","block_type":"box","text":"In certain markets, proxy voting involves logistical issues which can affect BIS’ ability to vote, as well","page_number":243,"box":{"x":117,"y":692,"width":743,"height":12}},{"id":"2083096e-4714-483f-a8c3-b256dc8e943e","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":243,"box":{"x":116,"y":708,"width":754,"height":12}},{"id":"b4eb5808-a283-4ac2-8d3f-298c66aa8cd7","block_type":"box","text":"1) untimely notice of shareholder meetings; 2) restrictions on a foreigner’s ability to exercise votes; 3)","page_number":243,"box":{"x":118,"y":723,"width":748,"height":12}},{"id":"f56b3c60-3073-481e-b2cc-da16c9a4e474","block_type":"box","text":"requirements to vote proxies in person; 4) “share-blocking” (requirements that investors who exercise","page_number":243,"box":{"x":117,"y":739,"width":751,"height":12}},{"id":"bd2a8d75-3a5b-4824-a181-1e9967fa0bb6","block_type":"box","text":"their voting rights surrender the right to dispose of their holdings from the point at which votes are","page_number":243,"box":{"x":116,"y":754,"width":723,"height":12}},{"id":"98bc3fba-e652-4d70-9231-084c9348b8e2","block_type":"box","text":"submitted until after the after the shareholder meeting has occurred); 5) potential difficulties in","page_number":243,"box":{"x":116,"y":770,"width":695,"height":12}},{"id":"1f507478-617f-46fe-9c67-00b7774e9ecf","block_type":"box","text":"translating the proxy; 6) regulatory constraints; and 7) requirements to provide local agents with","page_number":243,"box":{"x":116,"y":785,"width":708,"height":12}},{"id":"3cb0758a-23b1-4188-b216-5792dc4415dc","block_type":"box","text":"powers of attorney to facilitate voting instructions. 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It is important to note that the majority of lendable assets in the","page_number":244,"box":{"x":116,"y":676,"width":755,"height":12}},{"id":"ed4eb799-9b4e-418d-9ef5-9ec46edbf00b","block_type":"box","text":"market at any given time are not out on loan.","page_number":244,"box":{"x":117,"y":692,"width":331,"height":12}},{"id":"84c20774-4d91-4d08-8bc9-3abf005c7b1c","block_type":"box","text":"Periodically, BlackRock reviews our process for determining whether to recall securities on loan in","page_number":244,"box":{"x":117,"y":723,"width":725,"height":12}},{"id":"34ba5448-36db-427b-b35d-c92164280203","block_type":"box","text":"order to vote and may modify it as necessary.","page_number":244,"box":{"x":116,"y":738,"width":338,"height":12}},{"id":"4b2b9ab3-eebb-4920-81c0-2b05158f460a","block_type":"box","text":"17","page_number":244,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"09e0b6b1-06ef-45c7-879e-40d4f5c7e7c2","block_type":"box","text":"Recalling securities on loan can be impacted by the timing of record dates. 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Our clients have greater control over proxy voting because of Voting","page_number":245,"box":{"x":116,"y":335,"width":763,"height":12}},{"id":"9d6d28bc-5bbc-4066-a2c3-99bb82ac0717","block_type":"box","text":"Choice.","page_number":245,"box":{"x":117,"y":351,"width":54,"height":9}},{"id":"ec807053-18a8-46ef-ae3a-d3a01363592a","block_type":"box","text":"21","page_number":245,"box":{"x":173,"y":351,"width":10,"height":6}},{"id":"f787a024-0719-4882-b6a5-bbfc7fefd684","block_type":"box","text":"Reporting and vote transparency","page_number":245,"box":{"x":369,"y":389,"width":267,"height":12}},{"id":"6718ace1-bfe5-4058-9e0d-eec722f92435","block_type":"box","text":"We are committed to transparency of the stewardship work we do on behalf of clients. 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Under the Guidelines, the dedicated team makes decisions on how to","page_number":251,"box":{"x":184,"y":552,"width":644,"height":12}},{"id":"fb013756-0a1f-4f51-a342-6aaeb64992c3","block_type":"box","text":"engage companies and vote proxies independently, based on its professional judgment of the","page_number":251,"box":{"x":184,"y":568,"width":700,"height":12}},{"id":"47d19d29-f6d6-4c06-820a-399d341c53dc","block_type":"box","text":"priorities and outcomes most aligned with participating clients’ investment objectives.","page_number":251,"box":{"x":184,"y":583,"width":634,"height":12}},{"id":"649a2981-83b2-4151-bfe2-0c43eddb68c9","block_type":"box","text":"Voting approach under the Guidelines","page_number":251,"box":{"x":341,"y":622,"width":304,"height":12}},{"id":"e5edbb97-0ff2-4c52-bc4d-65bb938aed83","block_type":"box","text":"12","page_number":251,"box":{"x":647,"y":622,"width":11,"height":6}},{"id":"5a4229e8-98c8-42c7-bf0f-a1335294cb84","block_type":"box","text":"When evaluating each voting item across management or shareholder proposals, the dedicated team","page_number":251,"box":{"x":116,"y":653,"width":758,"height":12}},{"id":"dfe27518-0f41-40a4-bd03-92d24e95bf45","block_type":"box","text":"applies a case-by-case approach that reflects the uneven pace of the low-carbon transition across","page_number":251,"box":{"x":116,"y":668,"width":728,"height":12}},{"id":"f4ecee10-0668-4ccc-b0c1-d603c27e6746","block_type":"box","text":"sectors and markets, and acknowledges the distinction between what company management can","page_number":251,"box":{"x":116,"y":684,"width":723,"height":12}},{"id":"9088e6c9-4394-4240-9592-3910fe234562","block_type":"box","text":"influence and what lies beyond its control. 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This includes receiving independent,","page_number":252,"box":{"x":184,"y":363,"width":671,"height":12}},{"id":"7c401250-217c-41b2-aaf9-67882dd81cea","block_type":"box","text":"third-party assurances, as audit and assurance standards are developed.","page_number":252,"box":{"x":183,"y":379,"width":549,"height":12}},{"id":"c40e00ab-30d2-4709-972c-247acd479469","block_type":"box","text":"(3) scope 1 and scope 2, and most significant scope 3 GHG emissions.","page_number":252,"box":{"x":150,"y":400,"width":536,"height":12}},{"id":"6b548a07-9557-418a-bc51-86a40a8a620a","block_type":"box","text":"16","page_number":252,"box":{"x":689,"y":400,"width":10,"height":6}},{"id":"3fb64da6-4788-4cf8-9016-cfaa44fc500e","block_type":"box","text":",","page_number":252,"box":{"x":701,"y":408,"width":8,"height":3}},{"id":"8a1cd565-9d94-40b9-8370-e1ecc27b9008","block_type":"box","text":"17","page_number":252,"box":{"x":710,"y":400,"width":11,"height":6}},{"id":"9118f1d7-fb14-4530-af7a-c3ae528bb71a","block_type":"box","text":"In addition, the","page_number":252,"box":{"x":721,"y":400,"width":120,"height":11}},{"id":"33852de8-8e2f-4358-87ec-f74cecf46bc7","block_type":"box","text":"dedicated team looks to companies to disclose their emissions reduction targets for scope 1","page_number":252,"box":{"x":184,"y":415,"width":687,"height":12}},{"id":"cd308d11-773a-42e3-8329-d8ad4733d161","block_type":"box","text":"and 2 emissions, science-based where possible. 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In addition, certain disclosures related to a company’s plans for adapting their business","page_number":252,"box":{"x":170,"y":531,"width":686,"height":9}},{"id":"7075ebed-c7de-4ad4-9a4a-f08e79f2318d","block_type":"box","text":"models through the low-carbon transition may require forward-looking statements.","page_number":252,"box":{"x":170,"y":544,"width":485,"height":9}},{"id":"0067d456-41c9-4020-a75d-43af14e735ed","block_type":"box","text":"14","page_number":252,"box":{"x":144,"y":557,"width":8,"height":4}},{"id":"4575d037-8122-4cc2-8aa4-0652d36ff280","block_type":"box","text":"The ISSB is an independent standard-setting body within the International Financial Reporting Standards (IFRS)","page_number":252,"box":{"x":170,"y":556,"width":666,"height":10}},{"id":"afd09e71-e6d6-4e89-866e-3e3fd336946e","block_type":"box","text":"Foundation. The standards build on the Task Force on Climate-related Financial Disclosures (TCFD) framework and the","page_number":252,"box":{"x":171,"y":569,"width":712,"height":10}},{"id":"2a09bbf8-0b20-41a2-991c-bf52aed96341","block_type":"box","text":"standards and metrics developed by the Sustainability Accounting Standards Board (SASB), which have both","page_number":252,"box":{"x":170,"y":582,"width":649,"height":10}},{"id":"97eb50d1-9383-4120-8c30-652d30cb9d79","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":252,"box":{"x":170,"y":595,"width":674,"height":10}},{"id":"2a06b963-ee86-49c7-b7ee-c08d616c1d9b","block_type":"box","text":"“General Requirements for Disclosure of Sustainability-related Financial Information” and S2 “Climate-related","page_number":252,"box":{"x":170,"y":608,"width":647,"height":10}},{"id":"29ec81d0-3722-4e44-891b-e818bcd7a83a","block_type":"box","text":"Disclosures.” Websites accessed in December 2025.","page_number":252,"box":{"x":171,"y":621,"width":312,"height":8}},{"id":"25e24547-993c-4bc5-8129-98f0e3d38fe3","block_type":"box","text":"15","page_number":252,"box":{"x":144,"y":634,"width":8,"height":5}},{"id":"f778dc71-1bc6-4f59-900e-54317ef011a0","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":252,"box":{"x":170,"y":634,"width":694,"height":10}},{"id":"c1672ec4-7cc9-4ca1-b331-a397deea9168","block_type":"box","text":"so. BIS does not mandate any specific disclosure framework companies should use, and recognize that some","page_number":252,"box":{"x":170,"y":647,"width":651,"height":10}},{"id":"a714d1cf-4f3f-497a-822f-3277b3d3cad9","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":252,"box":{"x":170,"y":660,"width":698,"height":9}},{"id":"ac70120a-2bc3-4234-8a65-77ef5e3ad616","block_type":"box","text":"that companies highlight the metrics that are industry- or company-specific. We also recognize that companies may be","page_number":252,"box":{"x":170,"y":673,"width":703,"height":9}},{"id":"787757e2-aadf-4674-b3e3-777a2e78aa83","block_type":"box","text":"phasing in reporting over several years. We do not prescribe timelines regarding when companies should make","page_number":252,"box":{"x":170,"y":686,"width":661,"height":9}},{"id":"eaab706e-2dfc-4527-bade-a4a4be6e4219","block_type":"box","text":"sustainability-related disclosures but appreciate it when companies produce them sufficiently in advance of their","page_number":252,"box":{"x":170,"y":699,"width":664,"height":9}},{"id":"f43e59b3-5918-408d-a33f-bd0ce748d321","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":252,"box":{"x":170,"y":711,"width":698,"height":10}},{"id":"9cbf6f4a-052a-4c52-bc33-cb492ab2f407","block_type":"box","text":"voting decisions.","page_number":252,"box":{"x":170,"y":725,"width":98,"height":9}},{"id":"7214edec-3ffd-45d5-83ba-34a34dd3500c","block_type":"box","text":"16","page_number":252,"box":{"x":144,"y":737,"width":8,"height":5}},{"id":"2d9e11b6-dc4c-4950-8914-9a4538caf39f","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":252,"box":{"x":171,"y":737,"width":685,"height":10}},{"id":"34382e08-340e-4999-bdd8-b79327a1b632","block_type":"box","text":"paper: FTSE Russel, “Scope for improvement: Solving the Scope 3 conundrum,” January 2024, accessed in December","page_number":252,"box":{"x":170,"y":750,"width":708,"height":10}},{"id":"76baaf3f-a857-430f-82f6-a933b79356cf","block_type":"box","text":"2025.","page_number":252,"box":{"x":170,"y":763,"width":32,"height":8}},{"id":"5a31883a-8eab-4605-bc19-297ceb126aa1","block_type":"box","text":"17","page_number":252,"box":{"x":144,"y":776,"width":8,"height":5}},{"id":"e498bb6d-30e2-4236-8230-73c71845a45c","block_type":"box","text":"Under this policy, the dedicated team looks for GHG emissions disclosures to be aligned with the Greenhouse Gas","page_number":252,"box":{"x":171,"y":776,"width":680,"height":10}},{"id":"f4979df1-a397-4a14-962e-a80f82f4335d","block_type":"box","text":"Protocol (GHG Protocol). The Protocol Standards and Guidance are currently being updated to ensure they continue to","page_number":252,"box":{"x":171,"y":789,"width":706,"height":10}},{"id":"646a382a-9e50-4e22-b079-2b9e66c200b8","block_type":"box","text":"provide “a rigorous and credible accounting foundation for businesses to measure, plan and track progress toward","page_number":252,"box":{"x":170,"y":802,"width":677,"height":10}},{"id":"8deb4cc3-fa7b-4024-aa2f-a31407cb26a7","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":252,"box":{"x":170,"y":815,"width":650,"height":10}},{"id":"751dd897-b394-4d20-9c08-324100e330b6","block_type":"box","text":"18","page_number":252,"box":{"x":144,"y":828,"width":8,"height":5}},{"id":"caba2874-3e22-465b-8819-7780be560b2f","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":252,"box":{"x":170,"y":828,"width":707,"height":9}},{"id":"e5473ac8-8c09-4a2b-ac3d-c47ed171728b","block_type":"box","text":"companies into the role of enforcing emission reduction targets outside of their control. Given methodological","page_number":252,"box":{"x":170,"y":841,"width":645,"height":9}},{"id":"fc1b7f24-d0cf-4dd2-982d-dcb9e9ad3cb6","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":252,"box":{"x":170,"y":854,"width":686,"height":9}},{"id":"6f02768b-e50d-4bf4-a101-34af5700fd77","block_type":"box","text":"useful when companies focus their disclosures on those of the fifteen scope 3 GHG Protocol categories that are","page_number":252,"box":{"x":170,"y":867,"width":663,"height":9}},{"id":"6f469c42-dfac-4b61-a3dc-5e0581c2d1ef","block_type":"box","text":"material to their business models.","page_number":252,"box":{"x":170,"y":880,"width":199,"height":7}},{"id":"34580b55-4ed5-4c9e-80e3-4ac53a043d14","block_type":"box","text":"BlackRock Investment Stewardship","page_number":252,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"6e5a6168-a290-43c9-9079-04aaae7e6be2","block_type":"box","text":"Climate and Decarbonization St","page_number":252,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"238e5d4a-9fc5-464b-9171-5a70f3ecb2c7","block_type":"box","text":"ewardship Guidelines |","page_number":252,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"d3b06364-ffaa-488c-be66-1fac1669e4c5","block_type":"box","text":"6","page_number":252,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"bd0e0b2b-f5c9-4134-a055-9f4d0a5c910f","block_type":"box","text":"NM1026U-6030748-252/260","page_number":252,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"2dadb137-479d-43ee-946b-bdf5bf30c8c1","block_type":"box","text":"However, the team recognizes that companies have varying ability to influence the emissions","page_number":253,"box":{"x":184,"y":87,"width":696,"height":12}},{"id":"25291050-a135-469c-b8ac-529747427d51","block_type":"box","text":"across the different parts of their value chain and, therefore, it is helpful when disclosures","page_number":253,"box":{"x":184,"y":102,"width":667,"height":12}},{"id":"f8c46c10-aee6-4301-a796-e4a88910229b","block_type":"box","text":"explain the implications for the achievement of their decarbonization targets. For some","page_number":253,"box":{"x":184,"y":118,"width":647,"height":12}},{"id":"a3edffa1-3c67-4e76-bc9f-f91325ee199a","block_type":"box","text":"companies that play an important role in the low-carbon transition, scope 3 may represent","page_number":253,"box":{"x":184,"y":134,"width":671,"height":12}},{"id":"8cc15688-c495-4773-9dc6-5ecd9c3632e0","block_type":"box","text":"their only significant source of GHG emissions in the value chain. While we do not believe","page_number":253,"box":{"x":183,"y":149,"width":672,"height":12}},{"id":"36ac923e-8d19-4c2c-b027-bb2617dfe14a","block_type":"box","text":"companies should be required to enforce emissions reduction targets outside of their control,","page_number":253,"box":{"x":184,"y":165,"width":693,"height":12}},{"id":"ac32d78b-a91c-456c-b3db-70e5b7cb5ba3","block_type":"box","text":"where relevant, we look for disclosures on how the company approaches the low-carbon","page_number":253,"box":{"x":183,"y":180,"width":662,"height":12}},{"id":"4c82a36e-4dc0-4ab5-a5f6-76f1f3c5ab6f","block_type":"box","text":"transition in these cases. This may include plans and targets to grow businesses that","page_number":253,"box":{"x":183,"y":196,"width":636,"height":12}},{"id":"5d8925fb-58c5-4643-8ecb-48e37dc70149","block_type":"box","text":"contribute to real world decarbonization, forward-looking capital or procurement allocation","page_number":253,"box":{"x":184,"y":211,"width":670,"height":12}},{"id":"1695b559-5cbe-41d0-84db-1e905d0d4295","block_type":"box","text":"plans to net-zero aligned activities or suppliers, and strategies to mitigate material transition","page_number":253,"box":{"x":184,"y":227,"width":684,"height":12}},{"id":"51c8aeff-28dd-4a71-b762-e217affd9d4e","block_type":"box","text":"risks.","page_number":253,"box":{"x":184,"y":242,"width":43,"height":10}},{"id":"8cff86c4-109f-48c2-b75b-b201660e9c2d","block_type":"box","text":"(4) where relevant, disclosures that describe the company’s exposure to climate-related physical","page_number":253,"box":{"x":150,"y":265,"width":729,"height":12}},{"id":"8b9ef81e-0fcf-4dc8-b88f-be77321a8652","block_type":"box","text":"risks – such as acute risks from extreme weather events or chronic risks from long-term shifts","page_number":253,"box":{"x":184,"y":280,"width":699,"height":13}},{"id":"6cfd2f5b-4653-43a3-bcd8-6036274ff4a0","block_type":"box","text":"in climate patterns – and how these risks could reasonably be expected to affect the","page_number":253,"box":{"x":184,"y":296,"width":629,"height":12}},{"id":"3332fdea-4086-451a-a2f1-fd81bd63c08c","block_type":"box","text":"company’s operations, assets, or supply chains.","page_number":253,"box":{"x":184,"y":312,"width":361,"height":12}},{"id":"f28eef57-4564-4e5c-9927-63982d373a40","block_type":"box","text":"Transition plans","page_number":253,"box":{"x":150,"y":342,"width":134,"height":12}},{"id":"6cc139e0-504c-4ed0-b00f-4b12aa67e0af","block_type":"box","text":"Some companies have published transition plans outlining how they intend to implement their","page_number":253,"box":{"x":150,"y":372,"width":698,"height":12}},{"id":"92128a64-a260-475a-8d7a-40b860326034","block_type":"box","text":"low-carbon transition strategies. As defined by the ISSB, a transition plan “lays out the entity’s","page_number":253,"box":{"x":150,"y":387,"width":701,"height":12}},{"id":"c47dfbb8-42db-4ecd-9d97-32bc7529bc96","block_type":"box","text":"targets, actions or resources for its transition towards a lower-carbon economy, including actions","page_number":253,"box":{"x":150,"y":403,"width":722,"height":12}},{"id":"aa661622-96ce-4442-a595-e1c0b13c468d","block_type":"box","text":"such as reducing its greenhouse gas emissions” (see Appendix 1).","page_number":253,"box":{"x":150,"y":418,"width":494,"height":12}},{"id":"4b6a3a96-be2b-4289-b228-8a6c5fcdde40","block_type":"box","text":"19","page_number":253,"box":{"x":646,"y":419,"width":11,"height":6}},{"id":"e6431729-beae-4fd9-acfd-2fec110a326b","block_type":"box","text":"Work is also underway in a number of jurisdictions on establishing a common approach in a","page_number":253,"box":{"x":150,"y":441,"width":685,"height":12}},{"id":"386a7c36-4766-43ee-8fbc-8325c2013812","block_type":"box","text":"market to corporate transition plans.","page_number":253,"box":{"x":150,"y":457,"width":267,"height":12}},{"id":"d5385164-1f2d-4120-ba39-c796d66e97c3","block_type":"box","text":"20","page_number":253,"box":{"x":418,"y":457,"width":12,"height":6}},{"id":"1c4a6ebc-5ca6-434e-adb0-80e1783676ab","block_type":"box","text":"Recent guidance from the ISSB on disclosures about","page_number":253,"box":{"x":430,"y":457,"width":404,"height":12}},{"id":"496363c7-3767-4ace-aa1f-da8816ce1e64","block_type":"box","text":"transition plans highlights the convergence of reporting approaches.","page_number":253,"box":{"x":150,"y":472,"width":509,"height":12}},{"id":"7ec4c569-780b-4770-829d-4cf5412da526","block_type":"box","text":"While the preparation of a transition plan, or lack thereof, is not, in itself, a voting issue, these","page_number":253,"box":{"x":150,"y":495,"width":697,"height":12}},{"id":"55940fe8-7329-43b7-8854-2adc8b20835b","block_type":"box","text":"disclosures typically provide valuable insights that inform the dedicated team’s approach to","page_number":253,"box":{"x":150,"y":511,"width":679,"height":12}},{"id":"54dd509d-8dae-479a-b172-30e1b86c843b","block_type":"box","text":"engaging and voting on matters related to climate and transition risks on behalf of in-scope funds","page_number":253,"box":{"x":150,"y":526,"width":725,"height":12}},{"id":"5c1b9701-9a3b-4516-9429-2a650a6518c4","block_type":"box","text":"and accounts.","page_number":253,"box":{"x":150,"y":542,"width":109,"height":9}},{"id":"7638aeff-d0a1-4b98-a1df-487fcfa98fbb","block_type":"box","text":"Boards and directors","page_number":253,"box":{"x":116,"y":572,"width":174,"height":9}},{"id":"b76b9d7e-d008-4ce0-9160-87dcc406a9bd","block_type":"box","text":"An effective and well-functioning board that has appropriate governance structures to facilitate","page_number":253,"box":{"x":116,"y":602,"width":704,"height":12}},{"id":"a76e3fd9-9351-42cd-a45c-12ef145ea723","block_type":"box","text":"oversight of a company’s management and strategic initiatives is critical to the company’s ability to","page_number":253,"box":{"x":116,"y":618,"width":736,"height":12}},{"id":"ab5f2f0f-ec6c-4714-adbe-fbd0af90eb91","block_type":"box","text":"deliver on its low-carbon transition strategy. In assessing the role and effectiveness of the board in this","page_number":253,"box":{"x":116,"y":633,"width":766,"height":12}},{"id":"5c585deb-4057-41bc-9663-605d532ad448","block_type":"box","text":"regard, the dedicated team seeks to understand whether:","page_number":253,"box":{"x":117,"y":649,"width":430,"height":12}},{"id":"7706cb0d-5285-4be1-88a8-456a3a9fd1cd","block_type":"box","text":"• The board has clear oversight responsibilities for climate and low-carbon transition-related","page_number":253,"box":{"x":150,"y":679,"width":702,"height":12}},{"id":"16fb5216-bd7f-4494-ae87-f1ccda19fbd0","block_type":"box","text":"risks and opportunities in the company’s business model. The Guidelines consider the whole","page_number":253,"box":{"x":184,"y":694,"width":687,"height":12}},{"id":"5e327e97-f216-4045-82bc-8753bf765c6b","block_type":"box","text":"board to have responsibility for oversight of the company’s long-term strategy, including those","page_number":253,"box":{"x":184,"y":710,"width":695,"height":12}},{"id":"1d96765b-cd97-4c9f-b4d7-c74ed6a16930","block_type":"box","text":"aspects related to the transition to a low-carbon economy.","page_number":253,"box":{"x":184,"y":726,"width":429,"height":11}},{"id":"e460fc40-7260-4b07-af00-e730b22eedcb","block_type":"box","text":"• Management has established a robust low-carbon transition framework and long-term","page_number":253,"box":{"x":150,"y":748,"width":669,"height":12}},{"id":"3ea60ac3-8697-446e-99d9-0f6f5212aa5f","block_type":"box","text":"strategy, with clear accountability for delivery by senior executives.","page_number":253,"box":{"x":184,"y":764,"width":493,"height":12}},{"id":"60c71f37-548e-4ec9-b0af-7c3725e64304","block_type":"box","text":"19","page_number":253,"box":{"x":144,"y":789,"width":8,"height":5}},{"id":"ca3aea11-b657-435c-9f61-59040e95afc6","block_type":"box","text":"International Financial Reporting Standards, “IFRS S2: Climate-related Disclosures,” June 2023, accessed in December","page_number":253,"box":{"x":171,"y":789,"width":712,"height":10}},{"id":"d4f4c9db-4c2b-4eea-99dd-5d245c5940c1","block_type":"box","text":"2025.","page_number":253,"box":{"x":170,"y":802,"width":32,"height":7}},{"id":"01d22649-0bde-4f2e-a4a4-c4602484f3c7","block_type":"box","text":"20","page_number":253,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"0dc208d5-f398-444f-892e-bd5202deab9d","block_type":"box","text":"More companies are developing such plans, and public policymakers in certain markets are signaling their intentions to","page_number":253,"box":{"x":171,"y":815,"width":705,"height":9}},{"id":"353d17e5-98e0-472c-b521-dbf5a4173183","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":253,"box":{"x":170,"y":828,"width":704,"height":9}},{"id":"91368ca0-dfa7-4f97-a850-5436d6819804","block_type":"box","text":"International Transition Plan Network for information). 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Where the dedicated team determines this is not the case, it may vote against the","page_number":254,"box":{"x":116,"y":533,"width":727,"height":13}},{"id":"07e32515-b546-441d-9ec7-1e6cb25a78af","block_type":"box","text":"election of one or more directors who the team identifies as having the most responsibility for the issue.","page_number":254,"box":{"x":116,"y":549,"width":772,"height":12}},{"id":"a8d205ee-17e4-4be6-8afe-4134ef514409","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":254,"box":{"x":116,"y":564,"width":765,"height":13}},{"id":"9be0a12f-a540-4371-901a-9c1c22c634cd","block_type":"box","text":"climate or sustainability risk oversight responsibilities, other members of the relevant committee, the","page_number":254,"box":{"x":116,"y":580,"width":746,"height":12}},{"id":"473e7176-a564-4425-b0f8-a252579b25d9","block_type":"box","text":"lead independent director or the non-executive chair of the board. In certain markets, the team may","page_number":254,"box":{"x":117,"y":595,"width":741,"height":13}},{"id":"f0028202-f7a2-406f-b7fd-f55f87a3adb7","block_type":"box","text":"withhold support for the discharge of the supervisory board or equivalent and/or board reports.","page_number":254,"box":{"x":116,"y":611,"width":699,"height":12}},{"id":"f05e37ee-4071-4f8f-8a1d-fd5cd1a8f859","block_type":"box","text":"23","page_number":254,"box":{"x":817,"y":611,"width":11,"height":6}},{"id":"58ba8620-3a7b-4c04-af40-14dffe2c01b5","block_type":"box","text":"Where the dedicated team has not supported director elections over climate concerns in a prior year,","page_number":254,"box":{"x":116,"y":640,"width":754,"height":12}},{"id":"a630cb0d-27ba-49dd-8cdf-11ed0d76347f","block_type":"box","text":"and the company has not subsequently made progress towards aligning with the transition to a","page_number":254,"box":{"x":116,"y":655,"width":709,"height":12}},{"id":"785b17f2-993f-48d0-b529-03c1bb4e1bd4","block_type":"box","text":"low-carbon economy, the team may escalate by not supporting the re-election of additional responsible","page_number":254,"box":{"x":117,"y":671,"width":764,"height":12}},{"id":"e1855035-d207-499b-8e6f-c55c1d288670","block_type":"box","text":"directors.","page_number":254,"box":{"x":116,"y":686,"width":67,"height":10}},{"id":"bebf424b-5eb8-4c70-95b3-6d85462b434b","block_type":"box","text":"24","page_number":254,"box":{"x":185,"y":686,"width":12,"height":6}},{"id":"a7aeb192-39f7-47bd-944c-e1364f7f83cd","block_type":"box","text":"21","page_number":254,"box":{"x":143,"y":711,"width":8,"height":5}},{"id":"c3c9106b-9391-44f4-9da5-bbf726222821","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":254,"box":{"x":171,"y":711,"width":685,"height":10}},{"id":"6043fbdb-3548-4a80-a2ee-cf98f6e57576","block_type":"box","text":"paper “Scope for improvement: Solving the Scope 3 conundrum.” Their research indicates that there are 2-3 material","page_number":254,"box":{"x":170,"y":724,"width":692,"height":10}},{"id":"2320abb3-37ef-463c-903d-344f96fa6a28","block_type":"box","text":"scope 3 GHG emissions categories by sector. The research uses a definition of materiality from the GHG Protocol,","page_number":254,"box":{"x":170,"y":737,"width":679,"height":10}},{"id":"bd992792-f218-4db7-a864-eb33e24a88f6","block_type":"box","text":"which “encourages companies to maintain a representative inventory of the “most significant GHG emissions, [that]","page_number":254,"box":{"x":170,"y":750,"width":682,"height":10}},{"id":"79f8c486-e104-417e-9bc0-8cd88587da77","block_type":"box","text":"offer the most significant GHG reduction opportunities and are most relevant to the company’s business goals.” Website","page_number":254,"box":{"x":170,"y":763,"width":712,"height":10}},{"id":"779d4284-7877-4d2f-857b-43f487cf726c","block_type":"box","text":"accessed in December 2025.","page_number":254,"box":{"x":170,"y":776,"width":173,"height":7}},{"id":"305a5ba3-853e-440f-a270-3bd00ca3d53f","block_type":"box","text":"22","page_number":254,"box":{"x":143,"y":789,"width":9,"height":5}},{"id":"ab8ef98b-e5d0-42e4-95f6-883f7b2da5d2","block_type":"box","text":"Corporate political activities may include lobbying as defined by local regulations, policy engagement (including trade","page_number":254,"box":{"x":170,"y":789,"width":694,"height":9}},{"id":"c811b767-0f96-4fc1-9837-3d7ee39c8b65","block_type":"box","text":"association memberships), and corporate political contributions.","page_number":254,"box":{"x":170,"y":802,"width":378,"height":9}},{"id":"b0e95d24-fab1-4c77-82c4-818ef34c42b6","block_type":"box","text":"23","page_number":254,"box":{"x":143,"y":815,"width":9,"height":5}},{"id":"7cfddb8d-a8e6-4aa3-8544-640f51928c97","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":254,"box":{"x":171,"y":815,"width":661,"height":9}},{"id":"92f49fa2-430a-438c-8077-827e7e1c1b83","block_type":"box","text":"information on a company’s sustainability efforts, operational resilience, or financial condition, among others.","page_number":254,"box":{"x":170,"y":828,"width":643,"height":9}},{"id":"666aa922-5a4d-446d-b65f-7eb896715d89","block_type":"box","text":"24","page_number":254,"box":{"x":143,"y":841,"width":9,"height":4}},{"id":"23e99472-1488-47d5-b167-cdabc027891a","block_type":"box","text":"While the dedicated team may escalate voting by not supporting additional management proposals, principally director","page_number":254,"box":{"x":170,"y":841,"width":703,"height":9}},{"id":"ddd7599f-c6d1-4f95-aa62-cf119684e29c","block_type":"box","text":"elections, the team does not consider filing shareholder proposals, preannouncing voting intentions or using the media","page_number":254,"box":{"x":170,"y":853,"width":702,"height":10}},{"id":"3534123c-4696-4af0-b3e2-c2419ff590d8","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":254,"box":{"x":170,"y":866,"width":708,"height":10}},{"id":"70bb3559-ffe7-4434-bfa2-1abb12e86ca4","block_type":"box","text":"focused approach, to engagement and voting on behalf of clients under these Guidelines.","page_number":254,"box":{"x":170,"y":879,"width":530,"height":10}},{"id":"6616f7ce-a3ca-41e5-adfa-5ec258ed4523","block_type":"box","text":"BlackRock Investment Stewardship","page_number":254,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"9c48ab79-203f-4c88-a1de-104293beaf9a","block_type":"box","text":"Climate and Decarbonization St","page_number":254,"box":{"x":504,"y":909,"width":213,"height":9}},{"id":"63392cb0-b364-4658-87c2-11c531c53595","block_type":"box","text":"ewardship Guidelines |","page_number":254,"box":{"x":717,"y":909,"width":152,"height":12}},{"id":"11ce3226-869d-4bc7-801d-605ba5536cbb","block_type":"box","text":"8","page_number":254,"box":{"x":875,"y":909,"width":8,"height":9}},{"id":"f7a9d009-1d95-4def-a4fb-da879a16bc92","block_type":"box","text":"NM1026U-6030748-254/260","page_number":254,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"fc9b9fd1-1fff-4690-b87e-a9ad6b8538ac","block_type":"box","text":"Management proposals to approve a climate strategy or progress report","page_number":255,"box":{"x":116,"y":87,"width":582,"height":12}},{"id":"b536da64-8eb7-4c6f-b145-d79a14b3266a","block_type":"box","text":"In certain markets, company management may submit proposals – commonly referred to as “Say on","page_number":255,"box":{"x":117,"y":120,"width":749,"height":12}},{"id":"8184a2a0-5085-40cd-a26c-84050913271c","block_type":"box","text":"Climate” – seeking shareholder approval of their climate action plans or progress reports. The","page_number":255,"box":{"x":117,"y":136,"width":700,"height":12}},{"id":"53b51d72-11a4-4d8e-8161-1120e236f010","block_type":"box","text":"Guidelines consider these proposals as a valuable governance mechanism that can enhance","page_number":255,"box":{"x":117,"y":151,"width":696,"height":12}},{"id":"0290cfe2-6695-466b-8937-4127ffc5c0b3","block_type":"box","text":"transparency, accountability, and investors’ understanding of a company’s climate strategy. The","page_number":255,"box":{"x":116,"y":167,"width":716,"height":12}},{"id":"caa5bc13-8648-43fd-b3e6-137d3ebcd2c4","block_type":"box","text":"dedicated team generally supports management’s climate strategy proposal if, in the team’s","page_number":255,"box":{"x":116,"y":182,"width":687,"height":12}},{"id":"3fa693f3-393f-4f44-b73e-943205bceac9","block_type":"box","text":"assessment based on these Guidelines, the strategy is aligned with the low-carbon transition. Similarly,","page_number":255,"box":{"x":116,"y":198,"width":772,"height":12}},{"id":"1a10a0fd-556d-4fad-813c-8df6b93ac5ef","block_type":"box","text":"the dedicated team generally supports management’s proposal on a progress report if the company","page_number":255,"box":{"x":116,"y":213,"width":745,"height":12}},{"id":"7d51b714-cadc-4736-b50e-113d840c9e4e","block_type":"box","text":"has clearly explained its progress against, and any deviations from or changes to, its stated low-carbon","page_number":255,"box":{"x":117,"y":229,"width":770,"height":12}},{"id":"0d7e00d0-7baf-4e96-9982-bc0d01a0d5fd","block_type":"box","text":"transition plan and targets.","page_number":255,"box":{"x":116,"y":245,"width":203,"height":11}},{"id":"79b5e094-2788-4f7f-8abc-8a12280bd029","block_type":"box","text":"Shareholder proposals on climate and low-carbon transition matters","page_number":255,"box":{"x":117,"y":278,"width":551,"height":12}},{"id":"62b8b1aa-086a-4153-9b35-709735a4db80","block_type":"box","text":"In most markets, shareholders can submit proposals to be voted on at a company’s shareholder","page_number":255,"box":{"x":117,"y":311,"width":717,"height":12}},{"id":"9538db96-acd4-48dd-9dfa-28ac009c33c3","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":255,"box":{"x":116,"y":391,"width":748,"height":12}},{"id":"fc0186c5-ac78-45af-9e21-a1327f79adea","block_type":"box","text":"proposal, it is not necessarily endorsing every element of the proposal or the reasoning, objectives, or","page_number":255,"box":{"x":117,"y":406,"width":759,"height":12}},{"id":"8df29b72-0448-4636-9434-17f7b3b5b64d","block_type":"box","text":"supporting statement of the proponent.","page_number":255,"box":{"x":116,"y":422,"width":294,"height":12}},{"id":"12607adf-6e78-4bdc-9361-2b4692620119","block_type":"box","text":"In addition to financial materiality, the Guidelines consider the proposal’s relevance to the company’s","page_number":255,"box":{"x":117,"y":455,"width":752,"height":12}},{"id":"2d2f2a22-adad-4ad2-b262-3fe12a0b41a6","block_type":"box","text":"low-carbon transition strategy and targets. 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The team notes that assurance of","page_number":256,"box":{"x":116,"y":320,"width":744,"height":12}},{"id":"40bc4123-d71d-4f42-aaed-d2971997c79a","block_type":"box","text":"corporate disclosures related to climate risk and the transition to a low-carbon economy is still nascent.","page_number":256,"box":{"x":116,"y":335,"width":769,"height":12}},{"id":"0d6bedc2-d802-4e9a-af60-b643632790eb","block_type":"box","text":"Mergers, acquisitions, asset sales, and other special situations","page_number":256,"box":{"x":116,"y":366,"width":509,"height":12}},{"id":"877ecebc-1adb-46eb-ab15-7cb4d6b3f778","block_type":"box","text":"Special situations will be considered on their financial merits, but the dedicated team may engage on","page_number":256,"box":{"x":116,"y":397,"width":753,"height":12}},{"id":"ab6cae4d-1b6c-4a72-9606-6f3d42ab1c03","block_type":"box","text":"climate-related factors under these Guidelines where a transaction may significantly alter a company’s","page_number":256,"box":{"x":116,"y":413,"width":764,"height":12}},{"id":"2b8149c0-012e-4cb5-ad78-3511dd323dda","block_type":"box","text":"climate strategy or a shareholder activist has proposed governance, strategic or operational changes","page_number":256,"box":{"x":116,"y":428,"width":754,"height":12}},{"id":"97f99fa8-2a73-4f1f-9807-370d5990c2a3","block_type":"box","text":"that may impact its climate strategy. The dedicated team does not promote changes in corporate","page_number":256,"box":{"x":116,"y":444,"width":723,"height":12}},{"id":"fc2c2c1c-805a-485f-8cb2-3bbd325c5c05","block_type":"box","text":"control or engage in shareholder activism.","page_number":256,"box":{"x":116,"y":459,"width":317,"height":12}},{"id":"24240735-cc26-4c92-88cf-e7c261948e7e","block_type":"box","text":"Other business relevant sustainability-related risks and opportunities","page_number":256,"box":{"x":117,"y":490,"width":559,"height":12}},{"id":"91a57898-aeb0-472a-97d9-a60c3d5caa5d","block_type":"box","text":"Climate risk and the transition to a low-carbon economy are interconnected with a number of other","page_number":256,"box":{"x":117,"y":521,"width":734,"height":12}},{"id":"017b0325-5f3c-470e-9f08-294538c25f62","block_type":"box","text":"material sustainability-related risks and opportunities that may be relevant to a company’s business","page_number":256,"box":{"x":117,"y":537,"width":741,"height":12}},{"id":"ae02b28b-599f-4c87-bdf2-92422702a65c","block_type":"box","text":"model and long-term financial performance. These include a company’s impacts or dependencies on","page_number":256,"box":{"x":117,"y":552,"width":752,"height":12}},{"id":"80b20916-9ca9-44e7-8594-ad069d88c6cc","block_type":"box","text":"natural capital and key stakeholders.","page_number":256,"box":{"x":117,"y":568,"width":270,"height":12}},{"id":"4755aa5c-4ee9-426a-b497-2602cc76c589","block_type":"box","text":"26","page_number":256,"box":{"x":389,"y":568,"width":12,"height":6}},{"id":"af096eec-1910-4251-9167-30817453a4c1","block_type":"box","text":"In the context of these Guidelines, the dedicated team may","page_number":256,"box":{"x":401,"y":568,"width":448,"height":12}},{"id":"27bba8bc-f6e7-458d-9d59-e7187ec28bb9","block_type":"box","text":"engage companies to better understand how they are managing the impact on people (e.g.,","page_number":256,"box":{"x":116,"y":583,"width":686,"height":12}},{"id":"24126f41-147e-4660-aeeb-58c222d42715","block_type":"box","text":"employees, suppliers, customers and communities) of any strategic or operational changes they are","page_number":256,"box":{"x":116,"y":599,"width":747,"height":12}},{"id":"01f2e0c5-11b7-42ed-9be5-4f29b0ba6e84","block_type":"box","text":"making in relation to their transition to a low-carbon economy. Similarly, the team may engage","page_number":256,"box":{"x":117,"y":614,"width":702,"height":12}},{"id":"7837f21c-90dc-4dd3-91b6-3a5725ef695b","block_type":"box","text":"companies that face risks and opportunities related to land use and deforestation, access to fresh","page_number":256,"box":{"x":116,"y":630,"width":729,"height":12}},{"id":"9b293b54-22e8-460b-9ab5-65064e8bb63f","block_type":"box","text":"water, or the ability to secure scarce resources critical to the transition to a low-carbon economy.","page_number":256,"box":{"x":116,"y":645,"width":722,"height":12}},{"id":"ef6ddef4-50f2-4bec-aa0e-38fa8cbc5454","block_type":"box","text":"26","page_number":256,"box":{"x":143,"y":867,"width":9,"height":5}},{"id":"324c4755-8d1f-4ab4-946c-f7e8cf036cde","block_type":"box","text":"Engagement with companies on these issues is informed by BIS’ commentaries on natural capital, human capital","page_number":256,"box":{"x":171,"y":867,"width":669,"height":9}},{"id":"7947f36d-172a-45e8-9285-d305053d555a","block_type":"box","text":"management, and corporate human rights risks, December 2025.","page_number":256,"box":{"x":170,"y":880,"width":387,"height":9}},{"id":"4286ff3e-228b-49e6-9b31-6412a8ab519f","block_type":"box","text":"BlackRock Investment Stewardship","page_number":256,"box":{"x":117,"y":909,"width":282,"height":12}},{"id":"d45406ff-7172-41a5-a478-3cf293c9cc6c","block_type":"box","text":"Climate and Decarbonization St","page_number":256,"box":{"x":496,"y":909,"width":212,"height":9}},{"id":"68076fe0-2c8b-47be-85f3-54f701d76a5b","block_type":"box","text":"ewardship Guidelines |","page_number":256,"box":{"x":709,"y":909,"width":152,"height":12}},{"id":"6ab728bc-a764-4363-80a5-3f1346421b95","block_type":"box","text":"10","page_number":256,"box":{"x":867,"y":909,"width":16,"height":9}},{"id":"2a1b2c70-3e94-4789-b5c2-8762232db6e4","block_type":"box","text":"NM1026U-6030748-256/260","page_number":256,"box":{"x":757,"y":969,"width":158,"height":7}},{"id":"b12778c1-53c2-494d-99f8-f08d6821550a","block_type":"box","text":"Appendix 1","page_number":257,"box":{"x":116,"y":87,"width":95,"height":12}},{"id":"e980a34b-5513-4912-9816-b2362ad489d8","block_type":"box","text":"Terminology","page_number":257,"box":{"x":449,"y":117,"width":106,"height":12}},{"id":"4a4fcc04-7084-44f1-8a4e-b4a8f8235191","block_type":"box","text":"We understand the key concepts referred to within these Guidelines as follows:","page_number":257,"box":{"x":116,"y":147,"width":593,"height":12}},{"id":"6de48c98-ab4a-4bc2-91f4-2f3a820dd8be","block_type":"box","text":"Climate risk","page_number":257,"box":{"x":116,"y":170,"width":95,"height":10}},{"id":"d4ad411e-de3e-47d0-8810-99b77d285ea8","block_type":"box","text":": Includes physical risk, the increased risk to companies’ assets and activities caused by","page_number":257,"box":{"x":213,"y":170,"width":658,"height":12}},{"id":"1ccd414d-59a1-4f98-8472-752a3baf2617","block_type":"box","text":"the direct impact of changing weather patterns and natural catastrophes, and transition risk, the impact","page_number":257,"box":{"x":116,"y":186,"width":768,"height":12}},{"id":"e2471ed1-fe2f-40f8-a357-98d92db5df18","block_type":"box","text":"of the transition to a low-carbon economy on a company’s long-term profitability.","page_number":257,"box":{"x":116,"y":201,"width":601,"height":12}},{"id":"3d6adbd7-b27b-4760-bffb-3770b166c507","block_type":"box","text":"Transition to a low-carbon economy (“low-carbon transition”)","page_number":257,"box":{"x":116,"y":224,"width":492,"height":12}},{"id":"2b760dc1-0ccf-4a9b-af2a-6b1d50fcb7f4","block_type":"box","text":": The global economic shift toward","page_number":257,"box":{"x":610,"y":224,"width":259,"height":12}},{"id":"2b0e1f2b-641e-4511-8341-b11f71e74055","block_type":"box","text":"lower emissions across many sectors and business models. The economic transformation is being","page_number":257,"box":{"x":117,"y":239,"width":735,"height":13}},{"id":"7762826f-6a71-47e0-a1d5-6e66ef5dd516","block_type":"box","text":"driven by changes in government policy, technology, and consumer and investor preferences, as well","page_number":257,"box":{"x":116,"y":255,"width":758,"height":12}},{"id":"a034e824-f268-4d00-a6dd-d905ef1bac05","block_type":"box","text":"as the physical effects of climate change (e.g., extreme weather), and can potentially have a material","page_number":257,"box":{"x":116,"y":270,"width":755,"height":13}},{"id":"8762af71-46e6-42a2-8275-974398dec6b8","block_type":"box","text":"impact on clients’ investments and portfolios.","page_number":257,"box":{"x":117,"y":286,"width":337,"height":12}},{"id":"79a46989-27e3-4cd7-9a83-d6de6be34bd4","block_type":"box","text":"Decarbonization","page_number":257,"box":{"x":117,"y":309,"width":128,"height":9}},{"id":"509aa492-927b-4cd2-8295-8cf2492f9545","block_type":"box","text":": the process of reducing or eliminating emissions of carbon dioxide (CO","page_number":257,"box":{"x":248,"y":309,"width":535,"height":12}},{"id":"1a0007bf-4b46-4426-92b1-119f665d1c81","block_type":"box","text":"2","page_number":257,"box":{"x":784,"y":315,"width":5,"height":6}},{"id":"4faa3e37-e389-4db0-b067-faded96b747c","block_type":"box","text":") from","page_number":257,"box":{"x":790,"y":309,"width":48,"height":12}},{"id":"58286760-9e3e-4a2c-8dd6-b4ad0ed140ed","block_type":"box","text":"human activity and removing carbon currently in the atmosphere. This can be carried out by countries,","page_number":257,"box":{"x":117,"y":324,"width":763,"height":12}},{"id":"93d6f343-5d38-424a-a9d6-dba76ab35241","block_type":"box","text":"companies and even individual consumers. 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